10-K

UNITED STATES SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Form 10-K

(Mark One)
þ	ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
	For the fiscal year ended December 31, 2006
or
o	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
	For the transition period from          to

Commission File Number 1-11656

GENERAL GROWTH PROPERTIES, INC.

(Exact name of registrant as specified in its charter)

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)

(312) 960-5000

(Registrant’s telephone number, including area code)

Securities Registered Pursuant to Section 12(b) of the Act:

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

Securities Registered Pursuant to Section 12(g) of the Act: None

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.  YES þ     NO o

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act.  YES o     NO þ

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.  YES þ     NO o

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K.  o

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, or a non-accelerated filer. See definition of “accelerated filer and large accelerated filer” in Rule 12b-2 of the Exchange Act. (Check one):

Large accelerated filer  þ          Accelerated filer  o          Non-accelerated filer  o

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).  YES o     NO þ

On June 30, 2006, the last business day of the registrant’s most recently completed second quarter, the aggregate market value of the shares of common stock held by non-affiliates of the registrant was approximately $9.6 billion based upon the closing price of the common stock on the New York Stock Exchange composite tape on such date.

As of February 23, 2007, there were 243,769,536 shares of the registrant’s common stock outstanding.

DOCUMENTS INCORPORATED BY REFERENCE

Portions of the proxy statement for the annual stockholders meeting to be held on May 15, 2007 are incorporated by reference into Part III.

GENERAL GROWTH PROPERTIES, INC.

Annual Report on Form 10-K
December 31, 2006

TABLE OF CONTENTS

Item No.		Page Number
Part I
1.	Business		1
1A.	Risk Factors		6
1B.	Unresolved Staff Comments		15
2.	Properties		15
3.	Legal Proceedings		27
4.	Submission of Matters to a Vote of Security Holders		27
Part II
5.	Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities		27
6.	Selected Financial Data		29
7.	Management’s Discussion and Analysis of Financial Condition and Results of Operations		31
7A.	Quantitative and Qualitative Disclosures About Market Risk		49
8.	Financial Statements and Supplementary Data		49
9.	Changes in and Disagreements with Accountants on Accounting and Financial Disclosure		49
9A.	Controls and Procedures		49
9B.	Other Information		52
Part III
10.	Directors, Executive Officers and Corporate Governance		52
11.	Executive Compensation		52
12.	Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters		52
13.	Certain Relationships, Related Transactions and Director Independence		53
14.	Principal Accounting Fees and Services		53
Part IV
15.	Exhibits and Financial Statement Schedules		53
Signatures			54
Consolidated Financial Statements			F-1
Consolidated Financial Statement Schedule			F-55
Exhibit Index			S-1
Certificate of Designations
Indenture dated May 5, 2006
Amendment to the LP Agreement
Twelfth Amendment to the LP Agreement
List of Subsidiaries
Consent of Deloitte & Touche LLP
Consent of KPMG LLP
Certification of CEO
Certification of CFO
Certification of CEO
Certification of CFO
Financial Statements of TRCLP

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PART I

Item 1.   Business

All references to numbered Notes are to specific footnotes to the Consolidated Financial Statements of General Growth Properties, Inc. (“GGP” or the “Company”) as included in this Annual Report on Form 10-K (“Annual Report”). The descriptions included in such Notes are incorporated into the applicable Item 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” may also be used to refer to General Growth and its subsidiaries. See also the Glossary at the end of Item 7, Management’s Discussion and Analysis of Financial Condition and Results of Operations, for definitions of selected terms used in this Annual Report.

Overview

GGP is a self-administered and self-managed real estate investment trust, referred to as a “REIT.” GGP is a Delaware corporation and was organized in 1986.

Our business is focused in two main areas:

•  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

We own one hundred percent of many of our properties and a majority or controlling interest of certain others. As a result, these properties are consolidated under generally accepted accounting principles (“GAAP”) and we refer to them as the “Consolidated Properties.” Some properties are held through joint venture entities in which we own a non-controlling interest (“Unconsolidated Real Estate Affiliates”) and we refer to those properties as the “Unconsolidated Properties.” Collectively, we refer to the Consolidated Properties and Unconsolidated Properties as our “Company Portfolio.”

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. We are 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”). As of December 31, 2006, we managed the properties for 20 of our unconsolidated joint ventures and 13 of our consolidated joint ventures. Our joint venture partners or other third parties managed the properties for 14 of our unconsolidated joint ventures and one of our consolidated joint ventures.

General Development of Business

Prior to 2005, acquisitions had been a key contributor to our growth. In 2004, for example, acquisitions totaled over $16 billion, largely due to the $14 billion acquisition of The Rouse Company in November (the “TRC Merger”). In 2005 and 2006, however, acquisitions were minimal and our operational focus was on the following:

•  Development activities, including ground-up development and redevelopment and expansion of existing properties. In 2006, we substantially completed the ground-up development of Pinnacle Hills Promenade in Rogers, Arkansas; Otay Ranch Town Center in Chula Vista (San Diego), California; Lincolnshire Commons in Lincolnshire (Chicago), Illinois; and Shopping Leblon in Rio de Janeiro, Brazil. During 2006, we completed 33 development projects totaling over $250 million. Unlike prior years when our developments consisted almost exclusively of traditional shopping malls, our current development activity includes alternative uses and densification. Certain of our current developments include residential, hotel and office space. Development expenditures, including ground-up developments, redevelopments and expansions, exceeded $600 million in 2006 and are expected to approximate $1 billion in 2007.

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•  Continued maximization of our retail operations through proactive property management and leasing and through operating cost reductions. Specific actions to increase productivity of our properties have included changing the tenant mix and integrating new retail formats such as power, lifestyle and mixed use centers.

•  Increasing our international focus, which includes both attracting international retailers into our existing domestic centers and investing in retail properties overseas. As of December 31, 2006, we had investments in joint ventures in Brazil, Turkey and Costa Rica totaling approximately $128.0 million. Our joint ventures in Brazil have ownership interests in five operating retail centers, two third-party management companies, and two retail centers under development and our joint ventures in Turkey own a third party management company and one retail center under development.

•  As the TRC Merger was primarily funded with new acquisition debt, management and refinancing of our current debt.

Financial Information About Industry Segments

Information regarding our segments is incorporated herein by reference to Note 16.

Narrative Description of Business

Retail and Other Segment

Our Retail and Other segment consists of retail centers, office and industrial buildings and mixed-use and other properties.

Retail Portfolio

The Retail Portfolio is comprised primarily of regional shopping centers, but also includes festival market places, urban mixed-use centers and strip/community centers. Most of our shopping centers are strategically located in major and middle markets where they have strong competitive positions. Most of these properties contain at least one major department store as an Anchor. As of December 31, 2006, we had ownership interest in or management responsibility for a portfolio of over 200 regional shopping malls in 44 states. We also own non-controlling interests in various international joint ventures in Brazil, Turkey and Costa Rica. We believe the Retail Portfolio’s geographic diversification should mitigate the effects of regional economic conditions and local factors.

A detailed listing of the principal properties in our Retail Portfolio is included in Item 2 of this Annual Report.

The majority of the income from the properties in the Retail Portfolio is derived from rents received through long-term leases with retail tenants. These long-term leases generally require the tenants to pay base rent which is a fixed amount specified in the lease. The base rent is often subject to scheduled increases during the term of the lease. Another component of income is overage rent. Overage rent is paid by a tenant generally if its sales exceed an agreed upon minimum amount. Overage rent is calculated by multiplying the sales in excess of the minimum amount by a percentage defined in the lease, the majority of which is earned in the fourth quarter. Historically, our leases have included both a base rent component and a component which requires tenants to pay amounts related to all, or substantially all, of their share of real estate taxes and certain property operating expenses, including common area maintenance and insurance. The portion of these leases attributable to real estate tax and operating expense recoveries are recorded as “Tenant recoveries.” Recently, however, we have structured our new tenant leases such that a higher proportion of our rental revenues represent operating expense recoveries. This change has resulted in a shift between minimum rents and tenant recoveries.

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The following table reflects retail tenant representation by category for the domestic Consolidated Properties as of December 31, 2006. In general, similar percentages existed for the Unconsolidated Properties.

Category	% of Square Feet			Representative Tenants
Specialty (includes personal services)		22	%	Lenscrafters, Mastercuts, Mia & Maxx, Pearl Vision, The Picture People, Regis
Family Apparel (includes unisex)		15		Banana Republic, Eddie Bauer, Express, Gap, J. Crew, Old Navy
Women’s Apparel		13		Ann Taylor, bebe, Chico’s, Christopher & Banks, Coldwater Creek, H & M, J. Jill, Lane Bryant, New York & Co., Talbot’s, Victoria’s Secret
Teen Apparel		9		Abercrombie & Fitch, Aeropostale, American Eagle, Forever 21, Hollister & Co., Hot Topic, Limited Too, Pacific Sunwear, Zumiez
Shoes		9		Aldo, Champ’s, Easy Spirit, Finish Line, FootLocker, Journeys, Nine West, Payless Shoesource, Shoe Dept
Restaurants		7		Applebee’s, Cheesecake Factory, Maggiano’s, Panera Bread, PF Chang’s, Red Robin, Ruby Tuesday, TGI Friday’s
Home Entertainment and Electronics		4		Apple Computer, Brookstone, EB Games, FYE, Gamestop, RadioShack, Ritz Camera, Sharper Image, Suncoast
Home Furnishings		4		Bombay, Crate & Barrel, Kirkland’s, Pottery Barn, Select Comfort, Williams-Sonoma, Z Gallerie
Sporting Goods		3		Dick’s Sporting Goods, Hibbett’s, MC Sports, Pro Image, Scheel’s All Sports
Gifts (includes stationery, cards, gifts and novelty)		3		Carlton Cards, Hallmark, Papyrus, Spencer Gifts, Things Remembered, Yankee Candle
Fast Food/Food Court		3		Arby’s, Auntie Anne’s, Chick-Fil-A, McDonald’s, Sbarro, Subway, Taco Bell
Jewelry		3		Bailey, Banks, & Biddle; Ben Bridge Jewelers; Helzberg Diamonds; Kay Jewelers; Piercing Pagoda; Whitehall Co. Jewellers; Zales Jewelers
Children’s Merchandise		2		Abercrombie Kids, Build-A-Bear Workshop, Children’s Place, Club Libby Lu, Gap Kids, Gymboree, Janie & Jack, Stride Rite
Personal Care		2		Aveda, Bath & Body Works, Crabtree & Evelyn, M.A.C., L’Occitane, Origins, Sephora, Trade Secret
Specialty Food (includes health, candy and coffee)		1		Gloria Jean’s Gourmet Coffee, GNC, Godiva Chocolatier, Rocky Mountain Chocolate Factory, Starbucks, Vitamin World
TOTAL		100	%

As of December 31, 2006, our largest tenant (based on common parent ownership) accounted for approximately 4% of consolidated rents.

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Other Office, Industrial and Mixed-Use Buildings

Office and other properties are located primarily in the Baltimore/Washington, D.C. 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. Including properties adjacent to our retail centers, we own approximately 7 million square feet of leasable office and industrial space.

Master Planned Communities Segment

The Master Planned Communities segment is comprised primarily of the following large-scale, long-term community development projects:

		As of December 31, 2006
		Total		Remaining
		Gross		Saleable
Project	Location	Acres(1)		Acres(2)
Columbia	Baltimore, Maryland/Washington D.C. corridor		18,000		417
Fairwood	Prince George’s County, Maryland		1,100		163
Summerlin	Northwest of Las Vegas, Nevada		22,500		6,415
Bridgeland	Western Houston, Texas		10,200		6,519
Woodlands(3)	Houston, Texas		28,400		3,002

(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)	We own 52.5% of Woodlands. Total gross acres and remaining saleable acres represent 100% of the project.

We develop and sell land in these communities to builders and other developers for residential, commercial and other uses. Additionally, certain saleable land within these properties may be transferred to our Retail and Other segment to be developed as commercial properties for either our own use or to be operated as investment rental property.

Other Business Information

Competition

The nature and extent of the competition we face varies from property to property within each segment of our business. In our Retail and Other segment, our direct competitors include other publicly-traded retail mall development and operating companies, retail real estate companies, commercial property developers and other owners of retail real estate that engage in similar businesses.

Within our Retail Portfolio, we compete for retail tenants. We believe the principal factors that retailers consider in making their leasing decision include:

•  Consumer demographics

•  Quality, design and location of properties

•  Total number and geographic distribution of properties

•  Diversity of retailers and anchor tenants at shopping center locations

•  Management and operational expertise

•  Rental rates

Based on these criteria, we believe that the size and scope of our property portfolio, as well as the overall quality and attractiveness of our individual properties, enable us to compete effectively for retail tenants in our local markets.

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Because our revenue potential is linked to the success of our retailers, we indirectly share exposure to the same competitive factors that our retail tenants experience in their respective markets when trying to attract individual shoppers. These dynamics include general competition from other regional shopping centers, including outlet malls and other discount shopping centers, as well as competition with discount shopping clubs, catalog companies, internet sales and telemarketing.

We also compete to acquire land for new site development and to acquire existing retail properties. We believe that we have a competitive advantage with respect to acquisitions for the following reasons:

•  Subject to certain limitations, the funds necessary for cash acquisitions are available to us from a combination of sources, including mortgage or unsecured financing or the issuance of public or private debt or equity.

•  We have the flexibility to pay for an acquisition with a combination of cash, GGP equity securities or common or preferred units of limited partnership interest in the Operating Partnership. This last approach may create the opportunity for a tax-advantaged transaction for the seller.

•  Our expertise allows us to evaluate proposed acquisitions of existing retail properties for their increased profit potential through expansion, remodeling, re-merchandising and more efficient management of the property.

With respect to our office and other properties, we experience competition in the development and management of our properties similar to that of our Retail Portfolio. Prospective tenants generally consider quality and appearance, amenities, location relative to other commercial activity and price in determining the attractiveness of our properties. Based on the quality and location of our properties, which are generally in urban markets or are concentrated in the commercial centers of our master planned communities, we believe that our properties are viewed favorably among prospective tenants.

In our Master Planned Communities segment, we compete with other landholders and residential and commercial property developers in the development of properties within the Baltimore/Washington, D.C., Las Vegas and Houston markets. Significant factors affecting our competition in this business include:

•  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

We believe our projects offer significant advantages when viewed against these criteria.

Environmental Matters

Under various Federal, state and local laws and regulations, an owner of real estate is liable for the costs of removal or remediation of certain hazardous or toxic substances on such real estate. These laws often impose such liability without regard to whether the owner knew of, or was responsible for, the presence of such hazardous or toxic substances. The costs of remediation or removal of such substances may be substantial, and the presence of such substances, or the failure to promptly remediate such substances, may adversely affect the owner’s ability to sell such real estate or to borrow using such real estate as collateral. In connection with our ownership and operation of our properties, we, or the relevant joint venture through which the property is owned, may be potentially liable for such costs.

Substantially all of our properties have been subject to Phase I environmental assessments, which are intended to evaluate the environmental condition of the surveyed and surrounding properties. The Phase I environmental assessments included a historical review, a public records review, a preliminary investigation of the site and surrounding properties, screening for the presence of asbestos, polychlorinated biphenyls (“PCBs”) and underground storage tanks and the preparation and issuance of a written report, but do not include soil sampling or subsurface investigations. A Phase II assessment, when necessary, was conducted to further investigate any issues raised by the Phase I assessment. In each case where Phase I and/or Phase II assessments resulted in specific

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recommendations for remedial actions required by law, management has either taken or scheduled the recommended action.

Neither the Phase I nor the Phase II assessments have revealed any environmental liability that we believe would have a material effect on our overall business, financial condition or results of operations. Nevertheless, it is possible that these assessments do not reveal all environmental liabilities or that there are material environmental liabilities of which we are unaware. Moreover, no assurances can be given that future laws, ordinances or regulations will not impose any material environmental liability or the current environmental condition of our properties will not be adversely affected by tenants and occupants of the properties, by the condition of properties in the vicinity of our properties (such as the presence on such properties of underground storage tanks) or by third parties unrelated to us.

Future development opportunities may require additional capital and other expenditures in order to comply with Federal, state and local statutes and regulations relating to the protection of the environment. We can not predict with any certainty the magnitude of any such expenditures or the long-range effect, if any, on our operations. Compliance with such laws has had no material adverse effect on our operating results or competitive position in the past.

Employees

As of February 23, 2007, we had approximately 4,700 employees.

Qualification as a Real Estate Investment Trust and Taxability of Distributions

GGP currently qualifies as a real estate investment trust pursuant to the requirements contained in Sections 856-858 of the Internal Revenue Code of 1986, as amended (the “Code”). If, as we contemplate, such qualification continues, GGP will not be subject to Federal tax on its real estate investment trust taxable income. During 2006, GGP distributed (or was deemed to have distributed) 100% of its taxable income to its common stockholders (Note 7).

Available Information

Our Internet website address is www.ggp.com. Our Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K and amendments to those reports are available and may be accessed free of charge through the Investment section of our Internet website under the Shareholder Info subsection, as soon as reasonably practicable after those documents are filed with, or furnished to, the SEC. Our Internet website and information contained therein or connected thereto are not intended to be incorporated into this Annual Report.

Item 1A.  Risk Factors

Risks Related to Real Estate Investments

We invest primarily in regional shopping centers and other retail properties, which are subject to a number of significant risks which are beyond our control

Real property investments are subject to varying degrees of risk that may affect the ability of our retail properties to generate sufficient revenues. A number of factors may decrease the income generated by a retail property, including:

•  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

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•  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

If we are unable to generate sufficient revenue from our retail properties, including those held by joint ventures, we will be unable to meet operating and other expenses, including debt service, lease payments, capital expenditures and tenant improvements, and to make distributions from our joint ventures and then, in turn, to our stockholders.

We depend on leasing space to tenants on economically favorable terms and collecting rent from these tenants, who may not be able to pay

Our results of operations will depend on our ability to continue to lease space in our properties on economically favorable terms. If the sales of stores operating in our centers decline sufficiently, tenants might be unable to pay their existing minimum rents or expense recovery charges, since these rents and charges would represent a higher percentage of their sales. If our tenants’ sales decline, new tenants would be less likely to be willing to pay minimum rents as high as they would otherwise pay. In addition, as substantially all of our income is derived from rentals of real property, our income and cash available for distribution to our stockholders would be adversely affected if a significant number of tenants were unable to meet their obligations to us. During times of economic recession, these risks will increase.

Bankruptcy or store closures of tenants may decrease our revenues and available cash

Our leases generally do not contain provisions designed to ensure the creditworthiness of the tenant, and a number of companies in the retail industry, including some of our tenants, have declared bankruptcy or voluntarily closed certain of their stores in recent years. The bankruptcy or closure of a major tenant, particularly an Anchor tenant, may have a material adverse effect on the retail properties affected and the income produced by these properties and may make it substantially more difficult to lease the remainder of the affected retail properties. As a result, the bankruptcy or closure of a major tenant and potential additional closures as a result of co-tenancy requirements could result in a lower level of revenues and cash available for distribution to our stockholders.

We may be negatively impacted by department store consolidations

Department store consolidations, such as Federated’s acquisition of May Department Stores and the break up of Saks Holdings, Inc., are resulting in the closure of existing department stores and we may be unable to re-lease this area or to re-lease it on comparable or more favorable terms. Other tenants may be entitled to modify the terms of their existing leases, including those pertaining to rent payment, in the event of such closures. Additionally, department store closures could result in decreased customer traffic which could lead to decreased sales at other stores. We may pay more to acquire an Anchor store location in order to avoid these potential decreases as well as to avoid the transfer of certain approval rights typically associated with such locations. Consolidations may also negatively affect current and future development and redevelopment projects.

It may be difficult to buy and sell real estate quickly, and transfer restrictions apply to some of our properties

Equity real estate investments are relatively illiquid, and this characteristic tends to limit our ability to vary our portfolio promptly in response to changes in economic or other conditions. In addition, significant expenditures associated with each equity investment, such as mortgage payments, real estate taxes and maintenance costs, are generally not reduced when circumstances cause a reduction in income from the investment. If income from a property declines while the related expenses do not decline, our income and cash available for distribution to our stockholders would be adversely affected. A significant portion of our properties are mortgaged to secure payment of indebtedness, and if we were unable to meet our mortgage payments, we could lose money as a result of foreclosure on the properties by the various mortgagees. In addition, if it becomes necessary or desirable for us to dispose of one or more of the mortgaged properties, we might not be able to obtain a release of the lien on the mortgaged property without payment of the associated debt. The foreclosure of a mortgage on a property or inability to sell a property could adversely affect the level of cash available for distribution to our stockholders. In certain transactions, if persons selling properties to us wish to defer the payment of taxes on the sales proceeds, we

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are likely to pay them in units of limited partnership interest in the Operating Partnership. In transactions of this kind, we may also agree, subject to certain exceptions, not to sell the acquired properties for significant periods of time.

Risks Related to our Business

We develop and expand properties, and this activity is subject to various risks

We intend to continue to pursue development and expansion activities as opportunities arise. In connection with any development or expansion, we will be subject to various risks, including the following:

•  We may abandon development or expansion activities already under way, which may result in additional cost recognition

•  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 financing or to refinance construction loans, which generally have full recourse to us

•  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

If a development project is unsuccessful, our loss could exceed our investment in the project.

We may incur costs to comply with environmental laws

Under various federal, state or local laws, ordinances and regulations, a current or previous owner or operator of real estate may be required to investigate and clean up hazardous or toxic substances released at a property, and may be held liable to a governmental entity or to third parties for property damage or personal injuries and for investigation and clean-up costs incurred by the parties in connection with the contamination. These laws often impose liability without regard to whether the owner or operator knew of, or was responsible for, the release of the hazardous or toxic substances. The presence of contamination or the failure to remediate contamination may adversely affect the owner’s ability to sell or lease real estate or to borrow using the real estate as collateral. Other federal, state and local laws, ordinances and regulations require abatement or removal of asbestos-containing materials in the event of demolition or certain renovations or remodeling, the cost of which may be substantial for some of our redevelopments and also govern emissions of and exposure to asbestos fibers in the air. Federal and state laws also regulate the operation and removal of underground storage tanks. In connection with the ownership, operation and management of our properties, we could be held liable for the costs of remedial action with respect to these regulated substances or tanks or related claims.

Our properties have been subjected to varying degrees of environmental assessment at various times. However, the identification of new areas of contamination, a change in the extent or known scope of contamination or changes in cleanup requirements could result in significant costs to us.

We are in a competitive business

There are numerous shopping facilities that compete with our properties in attracting retailers to lease space. In addition, retailers at our properties face continued competition from other regional shopping centers, including outlet malls and other discount shopping centers, discount shopping clubs, catalog companies, internet sales and telemarketing. Competition of this type could adversely affect our revenues and cash available for distribution to our stockholders.

We compete with other major real estate investors with significant capital for attractive investment opportunities. These competitors include other REITs, investment banking firms and private institutional investors. This

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competition has increased prices for commercial properties and may impair our ability to make suitable property acquisitions on favorable terms in the future.

We may not be able to obtain capital to make investments

We depend primarily on external financing to fund the growth of our business. This is because one of the requirements of the Internal Revenue Code of 1986, as amended, which we refer to as the “Code,” for a REIT generally is that it distribute or pay tax on 100% of its capital gains and distribute at least 90% of its ordinary taxable income to its stockholders. Our access to debt or equity financing depends on banks’ willingness to lend to us and on conditions in the capital markets in general. We and other companies in the real estate industry have experienced less favorable terms for bank loans and capital markets financing from time to time. Although we believe, based on current market conditions, that we will be able to finance investments we wish to make in the foreseeable future, financing might not be available on acceptable terms or may be affected by the amount of debt we have outstanding as a result of the TRC Merger.

Some of our properties are subject to potential natural or other disasters

A number of our properties are located in areas which are subject to natural disasters. For example, two of our properties, located in the New Orleans area, suffered major damage in 2005. It is uncertain as to whether the New Orleans area will recover to its prior economic strength.

We carry comprehensive liability, fire, flood, earthquake, terrorism, extended coverage and rental loss insurance on all of our properties. We believe the policy specifications and insured limits of these policies are adequate and appropriate. There are, however, some types of losses, including lease and other contract claims, which generally are not insured. If an uninsured loss or a loss in excess of insured limits occurs, we could lose all or a portion of the capital we have invested in a property, as well as the anticipated future revenue from the property. If this happens, we might nevertheless remain obligated for any mortgage debt or other financial obligations related to the property.

If the Terrorism Risk Insurance Extension Act is not extended beyond 2007, we may incur higher insurance costs and greater difficulty in obtaining insurance which covers terrorist-related damages. Our tenants may also experience similar difficulties.

Inflation may adversely affect our financial condition and results of operations

Should inflation increase in the future, we may experience any or all of the following:

•  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

Inflation also poses a potential threat to us due to the probability of future increases in interest rates. Such increases would adversely impact us due to our outstanding variable-rate debt as well as result in higher interest rates on new fixed-rate debt.

We have certain ownership interests outside the United States which may increase in relative significance over time

We hold interests in joint venture properties in Brazil, Turkey and Costa Rica. We expect to pursue additional expansion opportunities outside the United States. International development and ownership activities carry risks that are different from those we face with our domestic properties and operations. These risks include:

•  Difficulties in managing international operations

•  Changes in foreign political environments, regionally, nationally, and locally

9

•  Challenges of complying with a wide variety of foreign laws including corporate governance, operations, taxes and litigation

•  Differing lending practices

•  Differences in cultures

•  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

Although our international activities currently are a relatively small portion of our business (international properties represented less than 1% of the NOI of all of our properties in 2006), to the extent that we expand our international activities, these risks could increase in significance and adversely affect our results of operations and financial condition.

Risks Related to our Organizational and Financial Structure that Give Rise to Operational and Financial Risks

Our substantial indebtedness could adversely affect our financial health and operating flexibility

We have a substantial amount of indebtedness. As of December 31, 2006, we had an aggregate consolidated indebtedness outstanding of approximately $20.5 billion (Note 6). Approximately $5.5 billion of our aggregate indebtedness was unsecured, recourse indebtedness of the Operating Partnership and consolidated subsidiaries, while approximately $15.0 billion was secured by our properties. A majority of the secured indebtedness was non-recourse to us. This indebtedness does not include our proportionate share of indebtedness incurred by our Unconsolidated Properties. As a result of this substantial indebtedness, we are required to use a material portion of our cash flow to service principal and interest on our debt, which will limit the cash flow available for other desirable business opportunities.

Our substantial indebtedness could have important consequences to us and the value of our common stock, including:

•  Limiting our ability to borrow additional amounts for working capital, capital expenditures, debt service requirements, execution of our growth strategy or other purposes

•  Limiting our ability to use operating cash flow in other areas of our business 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, including the acquisition of additional properties, 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

The terms of the 2006 Credit Facility, and certain other debt, require us to satisfy certain customary affirmative and negative covenants and to meet financial ratios and tests including ratios and tests based on leverage, interest coverage and net worth. The covenants under our debt affect, among other things, our ability to:

•  Incur indebtedness

•  Create liens on assets

•  Sell assets

•  Make capital expenditures

10

•  Engage in mergers and acquisitions

Given the restrictions in our debt covenants on these and other activities, we may be restricted in our ability to pursue other acquisitions, may be significantly limited in our operating and financial flexibility and may be limited in our ability to respond to changes in our business or competitive activities.

A failure to comply with these covenants, including a failure to meet the financial tests or ratios, would likely result in an event of default under our debt and would allow the lenders to accelerate such debt under such facility. If our debt is accelerated, our assets may not be sufficient to repay such debt in full.

We share control of some of our properties with other investors and may have conflicts of interest with those investors

While we generally make all operating decisions for the Unconsolidated Properties, we are required to make other decisions with the other investors who have interests in the relevant property or properties. For example, the approval of certain of the other investors is required with respect to operating budgets and refinancing, encumbering, expanding or selling any of these properties. We might not have the same interests as the other investors in relation to these transactions. Accordingly, we might not be able to favorably resolve any of these issues, or we might have to provide financial or other inducement to the other investors to obtain a favorable resolution.

In addition, various restrictive provisions and rights apply to sales or transfers of interests in our jointly owned properties. These may work to our disadvantage because, among other things, we might be required to make decisions about buying or selling interests in a property or properties at a time that is disadvantageous to us or we might be required to purchase the interests of our partners in our jointly owned properties.

Bankruptcy of joint venture partners could impose delays and costs on us with respect to the jointly owned retail properties

The bankruptcy of one of the other investors in any of our jointly owned shopping centers could materially and adversely affect the relevant property or properties. Under the bankruptcy laws, we would be precluded by the automatic stay from taking some actions affecting the estate of the other investor without prior approval of the bankruptcy court, which would, in most cases, entail prior notice to other parties and a hearing in the bankruptcy court. At a minimum, the requirement to obtain court approval may delay the actions we would or might want to take. If the relevant joint venture through which we have invested in a property has incurred recourse obligations, the discharge in bankruptcy of one of the other investors might result in our ultimate liability for a greater portion of those obligations than we would otherwise bear.

Payments by our direct and indirect subsidiaries of dividends and distributions to us may be adversely affected by prior payments to these subsidiaries’ creditors and preferred security holders

Substantially all of our assets are owned through our general partnership interest in the Operating Partnership, including TRCLP. The Operating Partnership holds substantially all of its properties and assets through subsidiaries, including subsidiary partnerships, limited liability companies and corporations that have elected to be taxed as REITs. The Operating Partnership therefore derives substantially all of its cash flow from cash distributions to it by its subsidiaries, and we, in turn, derive substantially all of our cash flow from cash distributions to us by the Operating Partnership. The creditors and preferred security holders, if any, of each of our direct and indirect subsidiaries are entitled to payment of that subsidiary’s obligations to them, when due and payable, before that subsidiary may make distributions to us. Thus, the Operating Partnership’s ability to make distributions to its partners, including us, depends on its subsidiaries’ ability first to satisfy obligations to their creditors and preferred security holders, if any, and then to make distributions to the Operating Partnership. Similarly, our ability to pay dividends to holders of our common stock depends on the Operating Partnership’s ability first to satisfy its obligations to its creditors and preferred security holders and then to make distributions to us.

In addition, we will have the right to participate in any distribution of the assets of any of our direct or indirect subsidiaries upon the liquidation, reorganization or insolvency of the subsidiary only after the claims of the creditors, including trade creditors, and preferred security holders, if any, of the subsidiary are satisfied. Our

11

common stockholders, in turn, will have the right to participate in any distribution of our assets upon the liquidation, reorganization or insolvency of us only after the claims of our creditors, including trade creditors, and preferred security holders, if any, are satisfied.

We might fail to qualify or remain qualified as a REIT

Although we believe that we will remain structured and will continue to operate so as to qualify as a REIT for federal income tax purposes, we might not continue to be so qualified. Qualification as a REIT for federal income tax purposes involves the application of highly technical and complex provisions of the Code for which there are only limited judicial or administrative interpretations. Therefore, the determination of various factual matters and circumstances not entirely within our control may impact our ability to qualify as a REIT. In addition, legislation, new regulations, administrative interpretations or court decisions might significantly change the tax laws with respect to the requirements for qualification as a REIT or the federal income tax consequences of qualification as a REIT.

If, with respect to any taxable year, we fail to maintain our qualification as a REIT, we would not be allowed to deduct distributions to stockholders in computing our taxable income and federal income tax. The corporate level income tax, including any applicable alternative minimum tax, would apply to our taxable income at regular corporate rates. As a result, the amount available for distribution to stockholders would be reduced for the year or years involved, and we would no longer be required to make distributions. In addition, unless we were entitled to relief under the relevant statutory provisions, we would be disqualified from treatment as a REIT for four subsequent taxable years. Notwithstanding that we currently intend to operate in a manner designed to allow us to qualify as a REIT, future economic, market, legal, tax or other considerations may cause us to determine that it is in our best interest and the best interest of our stockholders to revoke the REIT election.

An ownership limit and certain anti-takeover defenses and applicable law may hinder any attempt to acquire us

The Ownership Limit.  Generally, for us to maintain our qualification as a REIT under the Code, not more than 50% in value of the outstanding shares of our capital stock may be owned, directly or indirectly, by five or fewer individuals at any time during the last half of our taxable year. The Code defines “individuals” for purposes of the requirement described in the preceding sentence to include some types of entities. In general, under our current certificate of incorporation, no person other than Martin Bucksbaum (deceased), Matthew Bucksbaum (the Chairman of our board of directors), their families and related trusts and entities, including M.B. Capital Partners III, may own more than 7.5% of the value of our outstanding capital stock. However, our certificate of incorporation also permits our company to exempt a person from the 7.5% ownership limit upon the satisfaction of certain conditions which are described in our certificate of incorporation.

Selected Provisions of our Charter Documents.  Our board of directors is divided into three classes of directors. Directors of each class are chosen for three-year staggered terms. Staggered terms of directors may reduce the possibility of a tender offer or an attempt to change control of our company, even though a tender offer or change in control might be in the best interest of our stockholders. Our charter authorizes the board of directors:

•  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

Stockholder Rights Plan.  We have a stockholder rights plan which will impact a potential acquirer unless the acquirer negotiates with our board of directors and the board of directors approves the transaction.

Selected Provisions of Delaware Law.  We are a Delaware corporation, and Section 203 of the Delaware General Corporation Law applies to us. In general, Section 203 prevents an “interested stockholder,” as defined in the next

12

sentence, from engaging in a “business combination,” as defined in the statute, with us for three years following the date that person becomes an interested stockholder unless one or more of the following occurs:

•  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

The statute defines “interested stockholder” to mean generally any person that is the owner of 15% or more of our outstanding voting stock or is an affiliate or associate of us and was the owner of 15% or more of our outstanding voting stock at any time within the three-year period immediately before the date of determination.

Each item discussed above may delay, deter or prevent a change in control of our company, even if a proposed transaction is at a premium over the then current market price for our common stock. Further, these provisions may apply in instances where some stockholders consider a transaction beneficial to them. As a result, our stock price may be negatively affected by these provisions.

We are impacted by tax-related obligations to some of our partners

We own properties through partnerships which have arrangements in place that protect the deferred tax situation of our existing third party limited partners. Violation of these arrangements could impose costs on us. As a result, we may be restricted with respect to decisions such as financing, encumbering, expanding or selling these properties.

Several of our joint venture partners are tax-exempt. As such, they are taxable to the extent of their share of unrelated business taxable income generated from these properties. As the managing partner in these joint ventures, we have obligations to avoid the creation of unrelated business taxable income at these properties. As a result, we may be restricted with respect to decisions such as financing and revenue generation with respect to these properties.

Risks Related to the TRC Merger

We may not realize the full anticipated benefits of the TRC Merger

Achieving the anticipated benefits of the TRC Merger will depend in part upon our ability to integrate the two companies’ businesses in an efficient and effective manner. We may continue to face difficulties integrating aspects of the combined company’s businesses that we have not historically focused on, such as the master planned community business. Any inability of management to integrate the operations of TRCLP successfully could cause us to not fully achieve the expected benefits of the TRC Merger.

Limitations on the sale of the TRCLP assets may affect our cash flow

We may be restricted in our ability to dispose of certain TRCLP assets until the ten-year period after TRC’s election of REIT status expires in 2008 due to the potential incurrence of substantial tax liabilities on such dispositions due to applicable REIT regulations.

We have significant obligations under a Contingent Stock Agreement we assumed in the TRC Merger

We have assumed the obligations of TRC under a Contingent Stock Agreement, which we refer to as the “CSA.” The assumption includes the obligation under the CSA to issue shares of common stock twice a year to the

13

beneficiaries under the CSA and certain indemnification obligations. The number of shares is based upon our stock price and upon a formula set forth in the CSA. In addition, the CSA requires a valuation of certain assets that we own as of December 31, 2009, which is expected to result in the issuance of a significant number of additional shares to the beneficiaries under the CSA. Such issuances would be dilutive to our existing stockholders if we are unable to repurchase a corresponding number of shares through our publicly announced stock repurchase program.

Risks Related to our Common Stock

Our common stock price may be volatile, and consequently investors may not be able to resell their common stock at or above their purchase price

The price at which our common stock will trade may be volatile and may fluctuate due to factors such as:

•  Our historical and anticipated quarterly and annual operating results

•  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

•  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

•  Our financial condition and performance

•  General market conditions and trends

Fluctuations may be unrelated to or disproportionate to our financial performance. These fluctuations may result in a material decline in the trading price of our common stock.

Future sales of our common stock may depress our stock price

As of December 31, 2006, approximately 58.3 million shares of common stock were issuable upon exercise of conversion and/or redemption rights as to units of limited partnership interest in the Operating Partnership. Under our shelf registration statement, we may offer from time to time up to approximately $1.5 billion worth of common stock, preferred stock, depositary shares, debt securities, warrants, stock purchase contracts and/or purchase units. An additional 14.5 million shares of our common stock are reserved for issuance to meet our obligations under the CSA we assumed in connection with the TRC Merger. In addition, we have reserved a number of shares of common stock for issuance under our option and other benefit plans for employees and directors and in connection with certain other obligations, and these shares will be available for sale from time to time. Although we have publicly announced a stock repurchase program which may offset the dilution resulting from issuances pursuant to the CSA and one of our employee option plans, there is no certainty that we will be successful in acquiring a sufficient number of shares at an acceptable price to accomplish this goal. No prediction can be made as to the effect, if any, that these and other future sales of our common stock, or the availability of common stock for future sales, will have on the market price of the stock. Sales in the public market of substantial amounts of our common stock, or the perception that such sales could occur, could adversely affect prevailing market prices for our common stock.

Increases in market interest rates may hurt the market price of our common stock

We believe that investors consider the distribution rate on REIT stocks, expressed as a percentage of the price of the stocks, relative to market interest rates as an important factor in deciding whether to buy or sell the stocks. If market interest rates go up, prospective purchasers of REIT stocks may expect a higher distribution rate. Higher interest

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rates would not, however, result in more funds being available for us to distribute and, in fact, would likely increase our borrowing costs and might decrease our funds available for distribution. Thus, higher market interest rates could cause the market price of our common stock to decline.

Forward-Looking Information

We may make forward-looking statements in this Annual Report and in other reports which we file with the SEC. In addition, our senior management might make forward-looking statements orally to analysts, investors, the media and others.

Forward-looking statements include:

•  Projections of our revenues, income, earnings per share, Funds From Operations, capital expenditures, dividends, capital structure or other financial items

•  Descriptions of plans or objectives of our management for future operations, including pending acquisitions

•  Forecasts of our future economic performance

•  Descriptions of assumptions underlying or relating to any of the foregoing

In this Annual Report, for example, we make forward-looking statements discussing our expectations about:

•  Future repayment of debt and interest rates

•  Distributions pursuant to the Contingent Stock Agreement

•  Expected sales and development and acquisition expenditures in our Master Planned Communities segment

•  Expected restructurings of certain of our operating properties that are currently owned by TRS entities

•  Future cash needed to meet federal income tax requirements

Forward-looking statements discuss matters that are not historical facts. Because they discuss future events or conditions, forward-looking statements often include words such as “anticipate,” “believe,” “estimate,” “expect,” “intend,” “plan,” “project,” “target,” “can,” “could,” “may,” “should,” “will,” “would” or similar expressions. Forward-looking statements should not be unduly relied upon. They give our expectations about the future and are not guarantees. Forward-looking statements speak only as of the date they are made and we might not update them to reflect changes that occur after the date they are made.

There are several factors, many beyond our control, which could cause results to differ significantly from our expectations. Factors such as credit, market, operational, liquidity, interest rate and other risks are described elsewhere in this Annual Report. Any factor described in this Annual Report could by itself, or together with one or more other factors, adversely affect our business, results of operations or financial condition. There are also other factors that we have not described in this Annual Report that could cause results to differ from our expectations.

Item 1B.   Unresolved Staff Comments

None.

Item 2.   Properties

Our investment in real estate as of December 31, 2006 consisted of our interests in the properties in our Retail and Other and Master Planned Communities segments. We, generally, own the land underlying the properties in our Retail and Other segment. However, at certain of the properties, all or part of the underlying land is owned by a third party that leases the land to us pursuant to a long-term ground lease. The leases generally contain various purchase options and typically provide us with a right of first refusal in the event of a proposed sale of the property by the landlord. Information regarding encumbrances on these properties is included in Schedule III of this Annual Report.

The following tables set forth certain information regarding the Consolidated Properties and the Unconsolidated Properties in our Retail Portfolio as of December 31, 2006. These tables do not reflect subsequent activity in 2007

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including purchases, sales or consolidations of Anchor stores. Anchors include all stores with Gross Leasable Area greater than 30,000 square feet.

Combined occupancy for Consolidated Properties and Unconsolidated Properties as of December 31, 2006 was approximately 93.6%.

Consolidated Retail Properties

		GLA
				Mall and			Anchor
Name of Center	Location(1)	Total		Freestanding		Anchors/Significant Tenants	Vacancies
Ala Moana Center	Honolulu, HI		1,773,537		826,929	Barnes & Noble, Macy’s, Neiman Marcus, Old Navy, Sears, Shirokiya		—
Alameda Plaza	Pocatello, ID		190,341		190,341	—		2
Anaheim Crossing(2)(3)	Anaheim, CA		92,170		92,170	N/A		N/A
Animas Valley Mall	Farmington, NM		490,739		241,274	Allen Theatres, Dillard’s, JCPenney, Ross Dress for Less, Sears		—
Apache Mall(2)	Rochester, MN		752,330		269,338	Herberger’s, JCPenney, Macy’s, Sears		—
Arizona Center(2)	Phoenix, AZ		164,881		78,878	AMC Theatres		—
Augusta Mall(2)	Augusta, GA		1,073,562		324,339	Dillard’s, JCPenney, Macy’s, Sears		1
Austin Bluffs Plaza	Colorado Springs, CO		107,402		107,402	Longs Drugs		1
Bailey Hills Village	Eugene, OR		11,887		11,887	N/A		N/A
Baskin Robbins	Idaho Falls, ID		1,814		1,814	N/A		N/A
Baybrook Mall	Friendswood (Houston), TX		1,243,195		342,586	Dillard’s, JCPenney, Macy’s, Sears		1
Bayshore Mall(2)	Eureka, CA		613,371		393,113	Gottschalks, Mervyn’s, Sears		—
Bayside Marketplace(2)	Miami, FL		226,289		226,289	N/A		N/A
Beachwood Place	Beachwood, OH		905,486		325,906	Dillard’s, Nordstrom, Saks Fifth Avenue		—
Bellis Fair	Bellingham (Seattle), WA		773,050		334,726	JCPenney, Kohl’s, Macy’s, Macy’s Home Store, Sears, Target		—
Birchwood Mall	Port Huron (Detroit), MI		787,222		330,993	GKC Theaters, JCPenney, Macy’s, Sears, Target, Younkers		—
Boise Plaza	Boise, ID		114,404		114,404	Albertson’s, Burlington Coat Factory		—
Boise Towne Plaza(3)	Boise, ID		116,677		116,677	Circuit City, Linens ’N Things, Old Navy		—
Boise Towne Square	Boise, ID		1,165,352		495,323	JCPenney, Dillard’s, Macy’s, Mervyn’s, Sears		—
The Boulevard Mall	Las Vegas, NV		1,184,547		396,511	Dillard’s, JCPenney, Macy’s, Sears		—
Burlington Town Center(3)	Burlington, VT		308,770		162,017	Macy’s		—
Cache Valley Mall	Logan, UT		321,723		175,891	Dillard’s, Dillard’s Men’s & Home, JCPenney		—
Cache Valley Marketplace	Logan, UT		179,996		179,996	Home Depot, Olive Garden, T.J. Maxx		—
Canyon Point Village Center	Las Vegas, NV		57,229		57,229	N/A		N/A
Capital Mall	Jefferson City, MO		518,880		285,803	Dillard’s, JCPenney, Sears		—
Century Plaza	Birmingham, AL		738,867		252,911	Sears		3

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		GLA
				Mall and			Anchor
Name of Center	Location(1)	Total		Freestanding		Anchors/Significant Tenants	Vacancies
Chapel Hills Mall	Colorado Springs, CO		1,211,271		415,832	Dick’s Sporting Goods, Dillard’s, JCPenney, Kmart, Macy’s, Sears		1
Chico Mall	Chico, CA		502,891		177,308	Gottschalks, Gottschalks Home Store, JCPenney, Sears		1
Coastland Center	Naples, FL		910,759		320,369	Dillard’s, JCPenney, Macy’s, Sears		—
Collin Creek	Plano, TX		1,118,408		328,325	Dillard’s, JCPenney, Macy’s, Sears		1
Colony Square Mall	Zanesville, OH		514,951		268,169	Cinemark, Elder-Beerman, JCPenney, Sears		—
Columbia Mall	Columbia, MO		747,626		326,566	Dillard’s, JCPenney, Sears, Target		—
Coral Ridge Mall	Coralville (Iowa City), IA		1,075,581		420,416	Dillard’s, JCPenney, Scheel’s, Sears, Target, Younkers		—
Coronado Center(2)	Albuquerque, NM		1,151,919		377,590	Barnes & Noble, JCPenney, Macy’s, Mervyn’s, Sears, Target		—
Cottonwood Mall	Salt Lake City, UT		734,018		354,510	JCPenney, Macy’s		—
Cottonwood Square(2)	Salt Lake City, UT		77,079		77,079	—		1
Country Hills Plaza	Ogden, UT		140,097		140,097	McKay-Dee Hospital Center, Smith’s Food King		—
The Crossroads	Portage (Kalamazoo), MI		769,821		266,861	JCPenney, Macy’s, Sears		1
Crossroads Center	St. Cloud, MN		890,078		284,398	JCPenney, Macy’s, Scheel’s, Sears, Target		—
Cumberland Mall	Atlanta, GA		1,037,629		387,407	Costco, Macy’s, Sears		—
Division Crossing	Portland, OR		100,910		100,910	Rite Aid, Safeway		—
Eagle Ridge Mall	Lake Wales (Orlando), FL		657,304		261,849	Dillard’s, JCPenney, Recreation Station, Regal Cinemas, Sears		—
Eastridge Mall	San Jose, CA		1,313,025		478,631	AMC 15, Bed Bath & Beyond, JCPenney, Macy’s, Sears, Sport Chalet		—
Eastridge Mall	Casper, WY		571,910		282,114	JCPenney, Macy’s, Sears, Target		—
Eden Prairie Center	Eden Prairie (Minneapolis), MN		1,007,023		327,442	AMC Theatres, JCPenney, Kohl’s, Sears, Target, Von Maur		—
Fallbrook Center	West Hills (Los Angeles), CA		877,782		877,782	24 Hour Fitness, DSW Shoe Warehouse, Home Depot, Kohl’s, Linens ’N Things, Mervyn’s, Michael’s Arts & Crafts, Old Navy, Party City		1
Faneuil Hall Marketplace(2)	Boston, MA		198,364		198,364	N/A		N/A
Fashion Place(2)	Murray, UT		876,779		310,806	Dillard’s, Nordstrom, Sears		—
Fashion Show	Las Vegas, NV		1,898,078		538,187	Bloomingdale’s Home, Dillard’s, Macy’s, Neiman Marcus, Nordstrom, Saks Fifth Avenue		1
Foothills Mall	Fort Collins, CO		804,377		464,280	Macy’s, Sears		2
Fort Union(2)	Midvale (Salt Lake City), UT		32,968		32,968	N/A		N/A
Four Seasons Town Centre	Greensboro, NC		1,141,326		499,310	Belk, Dillard’s, JCPenney		—

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		GLA
				Mall and			Anchor
Name of Center	Location(1)	Total		Freestanding		Anchors/Significant Tenants	Vacancies
Fox River Mall	Appleton, WI		1,207,363		518,726	Cost Plus World Market, David’s Bridal, DSW Shoe Warehouse, Factory Card Outlet, JCPenney, Linens ’N Things, Macy’s, Scheel’s, Sears		—
Fremont Plaza(2)	Las Vegas, NV		115,862		115,862	Asian Seafood & Grocery, Sav-On Drugs		—
The Gallery at Harborplace(2)	Baltimore, MD		132,105		132,105	N/A		N/A
Gateway Crossing Shopping Center	Bountiful (Salt Lake City), UT		183,526		183,526	All A Dollar, Barnes & Noble, T.J. Maxx		—
Gateway Mall	Springfield, OR		824,152		342,446	24 Hour Fitness, Ashley Furniture Homestore, Kohl’s, Movies 12, Ross Dress for Less, Sears, Target		—
Glenbrook Square	Fort Wayne, IN		1,210,029		433,159	JCPenney, Macy’s, Sears		1
Governor’s Square(2)	Tallahassee, FL		1,021,989		330,384	Dillard’s, JCPenney, Macy’s, Sears		—
The Grand Canal Shoppes	Las Vegas, NV		512,815		512,815	N/A		N/A
Grand Teton Mall	Idaho Falls, ID		543,084		219,159	Dillard’s, JCPenney, Macy’s, Sears		—
Grand Teton Plaza	Idaho Falls, ID		93,274		93,274	Best Buy, Linens ’N Things, Petsmart, Ross Dress for Less		—
Grand Traverse Mall	Traverse City, MI		592,774		279,383	GKC Theaters, JCPenney, Macy’s, Target		—
Greenwood Mall	Bowling Green, KY		847,578		418,525	Dillard’s, JCPenney, Macy’s, Sears		—
Halsey Crossing(2)	Gresham (Portland), OR		99,438		99,438	Safeway		—
Harborplace(2)	Baltimore, MD		153,371		153,371	N/A		N/A
Hulen Mall	Fort Worth, TX		941,681		345,111	Dillard’s, Macy’s, Sears		—
Jordan Creek Town Center	West Des Moines, IA		1,335,574		793,875	Century Theatres, Dillard’s, Scheel’s, Younkers		—
Knollwood Mall	St. Louis Park (Minneapolis), MN		463,907		167,684	Cub Foods, Kohl’s, Steve & Barry’s University Sportswear, T.J. Maxx		—
Lakeside Mall	Sterling Heights, MI		1,529,736		507,138	JCPenney, Lord & Taylor, Macy’s, Macy’s Men’s & Home, Sears		—
Lakeview Square	Battle Creek, MI		552,563		260,970	JCPenney, Macy’s, Sears		—
Landmark Mall(2)	Alexandria (Washington, D.C.), VA		884,596		325,659	Lord & Taylor, Macy’s, Sears		—
Lansing Mall(2)	Lansing, MI		836,390		413,220	JCPenney, Macy’s, Steve & Barry’s University Sportswear, T.J. Maxx, Younkers		—
Lincolnshire Commons	Lincolnshire (Chicago), IL		88,894		88,894	N/A		N/A
Lockport Mall	Lockport, NY		336,070		122,989	The Bon Ton		2
Lynnhaven Mall	Virginia Beach, VA		1,174,106		458,659	AMC Theatres, Dick’s Sporting Goods, Dillard’s, JCPenney, Macy’s, Steve & Barry’s University Sportswear		—

18

		GLA
				Mall and			Anchor
Name of Center	Location(1)	Total		Freestanding		Anchors/Significant Tenants	Vacancies
The Maine Mall	South Portland, ME		1,020,001		347,067	Best Buy, Chuck E Cheese, JCPenney, Linens ’N Things, Macy’s, Sears, Sports Authority		—
Mall at Sierra Vista	Sierra Vista, AZ		362,053		130,783	Cinemark, Dillard’s, Sears		—
The Mall in Columbia	Columbia, MD		1,399,642		599,474	JCPenney, Lord & Taylor, Macy’s, Nordstrom, Sears		—
Mall of Louisiana	Baton Rouge, LA		1,316,055		508,573	Dillard’s, Dillard’s Mens & Home, JCPenney, Macy’s, Sears		—
Mall of the Bluffs	Council Bluffs (Omaha, NE), IA		703,732		377,510	Dillard’s, Hy-Vee, JCPenney, Sears, Target		—
Mall St. Matthews	Louisville, KY		1,085,896		350,191	Dillard’s, Dillard’s Men’s & Home, JCPenney		1
Mall St. Vincent(2)	Shreveport, LA		533,738		185,738	Dillard’s, Sears		—
Market Place Shopping Center	Champaign, IL		1,041,426		505,680	Bergner’s, JCPenney, Macy’s, Sears		—
Mayfair	Wauwatosa (Milwaukee), WI		1,112,898		493,514	AMC Theatres, Barnes & Noble, Boston Store, Macy’s		—
Meadows Mall	Las Vegas, NV		956,948		320,095	Dillard’s, JCPenney, Macy’s, Sears		—
Metro Plaza	Baltimore, MD		85,289		85,289	N/A		N/A
Mondawmin Mall	Baltimore, MD		361,506		294,806	Shoppers Food and Pharmacy		—
North Plains Mall	Clovis, NM		303,613		109,532	Beall’s, Dillard’s, JCPenney, Sears		—
North Star Mall	San Antonio, TX		1,257,407		432,535	Dillard’s, Macy’s, Mervyn’s Saks Fifth Avenue		1
North Temple Shops	Salt Lake City, UT		10,181		10,181	N/A		N/A
North Town Mall	Spokane, WA		1,046,358		414,864	JCPenney, Macy’s, Mervyn’s, Regal Cinemas, Sears, Steve & Barry’s University Sportswear		1
Northgate Mall	Chattanooga, TN		824,191		358,871	JCPenney, Proffitt’s, Proffitt’s Home Store, Sears, T.J. Maxx		—
Northridge Fashion Center	Northridge (Los Angeles), CA		1,443,563		568,120	JCPenney, Macy’s, Pacific Theatres, Sears		1
Oak View Mall	Omaha, NE		865,003		260,743	Dillard’s, JCPenney, Sears, Younkers		—
Oakwood Center	Gretna, LA		949,426		351,079	Dillard’s, JCPenney, Sears		(4	)
Oakwood Mall	Eau Claire, WI		818,933		333,857	JCPenney, Macy’s, Scheel’s, Sears, Younkers		—
Oglethorpe Mall	Savannah, GA		945,582		365,434	Belk, JCPenney, Macy’s, Macy’s Junior, Sears, Stein Mart		—
Orem Plaza Center Street	Orem, UT		90,218		90,218	Chuck E Cheese, Robert’s Crafts		—
Orem Plaza State Street	Orem, UT		27,557		27,557	N/A		N/A
Oviedo Marketplace	Oviedo, FL		951,286		286,357	Bed Bath & Beyond, Dillard’s, Macy’s, Regal Cinemas, Sears		—
Owings Mills Mall	Owings Mills, MD		1,083,447		436,410	Boscov’s, JCPenney, Macy’s		1
Oxmoor Center	Louisville, KY		928,545		281,335	Dick’s Sporting Goods, Macy’s, Sears, Von Maur		—

19

		GLA
				Mall and			Anchor
Name of Center	Location(1)	Total		Freestanding		Anchors/Significant Tenants	Vacancies
Paramus Park	Paramus, NJ		769,156		310,099	Macy’s, Sears		—
Park City Center	Lancaster (Philadelphia), PA		1,374,133		510,944	The Bon Ton, Boscov’s, JCPenney, Kohl’s, Sears		—
Park Place	Tucson, AZ		1,047,141		392,404	Century Theatres, Dillard’s, Macy’s, Sears		—
Peachtree Mall	Columbus, GA		820,202		311,587	Dillard’s, JCPenney, Macy’s, Parisian		—
Pecanland Mall	Monroe, LA		945,248		329,812	Belk, Dillard’s, JCPenney, Sears		1
Piedmont Mall	Danville, VA		725,122		173,384	Belk, Belk Men’s, Boscov’s, JCPenney, Sears		—
Pierre Bossier Mall	Bossier City (Shreveport), LA		607,022		213,724	Dillard’s, JCPenney, Sears, Stage		1
Pine Ridge Mall(2)	Pocatello, ID		641,654		203,667	Dillard’s, JCPenney, Sears, ShopKo		1
The Pines	Pine Bluff, AR		644,469		262,049	Dillard’s, Holiday Inn Express, JCPenney, Sears		1
Pioneer Place(2)	Portland, OR		368,183		287,183	Saks Fifth Avenue		—
Plaza 800(2)	Sparks (Reno), NV		176,431		176,431	Albertson’s		1
Plaza 9400(2)	Sandy (Salt Lake City), UT		228,661		228,661	Albertson’s, Deseret Industries		1
Prince Kuhio Plaza(2)	Hilo, HI		504,807		272,185	Macy’s, Sears		1
Providence Place(2)	Providence, RI		1,258,733		513,185	Bed Bath & Beyond, Dave & Buster’s, JCPenney, Macy’s, National Amusements Cinema 16, Nordstrom, Old Navy		—
Provo Towne Centre(3)	Provo, UT		801,014		230,945	Cinemark, Dillard’s, JCPenney, Sears		—
Red Cliffs Mall	St. George, UT		383,131		108,431	Dillard’s, JCPenney, Sears		1
Red Cliffs Plaza	St. George, UT		57,304		57,304	Gold’s Gym, Sears		—
Redlands Mall	Redlands, CA		173,997		78,938	Gottschalks		—
Regency Square Mall	Jacksonville, FL		1,386,950		527,944	Belk, Champs Sports/World Foot Locker, Dillard’s, Homeworks Furniture Center, JCPenney, Sears		—
Ridgedale Center	Minnetonka, MN		1,044,076		341,696	JCPenney, Macy’s Mens & Home, Macy’s Women’s, Sears		—
Rio West Mall(2)(3)	Gallup, NM		515,038		333,905	Beall’s, JCPenney		1
River Falls Mall	Clarksville, IN		819,878		588,735	Bass Pro Shops Outdoor World, Toys R Us		2
River Hills Mall	Mankato, MN		718,540		278,346	Herberger’s, JCPenney, Scheel’s, Sears, Target		—
River Pointe Plaza	West Jordan (Salt Lake City), UT		224,252		224,252	Albertson’s, ShopKo		—
Riverlands Shopping Center	LaPlace (New Orleans), LA		184,992		184,992	Burke’s Outlet, Citi Trends, Matherne’s Supermarkets, Stage		—
Riverside Plaza	Provo, UT		175,417		175,417	Big Lots, Macey’s, Rite Aid		—
Rivertown Crossings	Grandville (Grand Rapids), MI		1,270,948		421,890	Dick’s Sporting Goods, JCPenney, Kohl’s, Macy’s, Old Navy, Rivertown Cinemas, Sears, Younkers		—
Riverwalk Marketplace(2)	New Orleans, LA		189,250		189,250	N/A		N/A

20

		GLA
				Mall and			Anchor
Name of Center	Location(1)	Total		Freestanding		Anchors/Significant Tenants	Vacancies
Rogue Valley Mall	Medford (Portland), OR		640,762		253,324	JCPenney, Kohl’s, Linens ’N Things, Macy’s, Macy’s Home Store		—
Saint Louis Galleria	St. Louis, MO		1,046,205		470,153	Dillard’s, Macy’s		1
Salem Center(2)	Salem, OR		650,132		212,132	JCPenney, Macy’s, Nordstrom		1
The Shops at La Cantera(3)	San Antonio, TX		1,017,798		388,798	Dillard’s, Macy’s, Neiman Marcus, Nordstrom		—
Sikes Senter	Wichita Falls, TX		667,551		262,027	Dillard’s, JCPenney, Sears, Sikes Ten Theatres		—
Silver Lake Mall	Coeur d’ Alene, ID		326,618		110,254	JCPenney, Macy’s, Sears		1
Sooner Mall	Norman, OK		509,141		169,069	Dillard’s, JCPenney, Old Navy, Sears, Stein Mart		—
South Street Seaport(2)	New York, NY		283,783		283,783	N/A		N/A
Southlake Mall	Morrow (Atlanta), GA		1,014,204		273,952	JCPenney, Macy’s, Sears		1
Southland Center	Taylor, MI		915,197		287,160	Best Buy, JCPenney, Macy’s		1
Southland Mall	Hayward, CA		1,275,469		535,205	JCPenney, Macy’s, Mervyn’s, Sears		—
Southshore Mall(2)	Aberdeen, WA		291,666		157,891	JCPenney, Sears		—
Southwest Plaza	Littleton (Denver), CO		1,361,097		654,701	Dillard’s, JCPenney, Macy’s, Sears		—
Spokane Valley Mall(3)	Spokane, WA		737,954		318,870	JCPenney, Macy’s, Regal Act III, Sears		—
Spokane Valley Plaza(3)	Spokane, WA		132,048		132,048	Linens ’N Things, Old Navy, Sportsman’s Warehouse, T.J. Maxx		—
Spring Hill Mall	West Dundee (Chicago), IL		1,370,930		638,135	Carson Pirie Scott, JCPenney, Kohl’s, Macy’s, Sears, Steve & Barry’s University Sportswear		—
Staten Island Mall	Staten Island, NY		1,276,207		605,118	JCPenney, Macy’s, Macy’s Annex II, Macy’s Home Store, Sears		—
Stonestown Galleria	San Francisco, CA		867,391		439,098	Macy’s, Nordstrom		—
The Streets at Southpoint	Durham, NC		1,329,123		582,202	Barnes & Noble, Hudson Belk, JCPenney, Macy’s, Maggiano’s, Nordstrom, Pottery Barn, Sears, Urban Outfitters		—
Three Rivers Mall	Kelso, WA		430,111		236,878	JCPenney, Macy’s, Sears		1
Town East Mall	Mesquite (Dallas), TX		1,215,358		405,972	Dillard’s, JCPenney, Macy’s, Sears		—
Tucson Mall(2)	Tucson, AZ		1,306,515		448,251	Dillard’s, JCPenney, Macy’s, Mervyn’s, Sears		1
Twin Falls Crossing	Twin Falls, ID		37,680		37,680	Kalik Investors		—
University Crossing	Orem, UT		206,035		206,035	Barnes & Noble, CompUSA, Fred Meyer — Burlington Coat, OfficeMax, Pier 1 Imports		—
Valley Hills Mall	Hickory, NC		931,534		320,018	Belk, Dillard’s, JCPenney, Sears		—
Valley Plaza Mall	Bakersfield, CA		1,178,327		451,638	Gottschalks, JCPenney, Macy’s, Sears		1
Village of Cross Keys Retail	Baltimore, MD		74,112		74,112	N/A		N/A
Visalia Mall	Visalia, CA		439,548		182,548	Gottschalks, JCPenney		—

21

		GLA
				Mall and			Anchor
Name of Center	Location(1)	Total		Freestanding		Anchors/Significant Tenants	Vacancies
Ward Centers	Honolulu, HI		743,061		700,400	Sports Authority		—
West Valley Mall	Tracy (San Francisco), CA		880,114		483,205	Gottschalks, JCPenney, Movies 14, Sears, Target		—
Westlake Center(2)	Seattle, WA		104,631		104,631	N/A		N/A
Westwood Mall	Jackson, MI		508,199		136,511	Elder-Beerman, JCPenney, Wal-Mart		—
White Marsh Mall	Baltimore, MD		1,204,212		367,970	Boscov’s, JCPenney, Macy’s, Sears, Sports Authority		1
White Mountain Mall	Rock Springs, WY		330,197		175,737	Flaming Gorge Harley Davidson, Herberger’s, JCPenney, State Of Wyoming		—
Willowbrook	Wayne, NJ		1,518,873		490,873	Bloomingdale’s, Lord & Taylor, Macy’s, Sears		—
Woodbridge Center	Woodbridge, NJ		1,631,080		546,045	Dick’s Sporting Goods, Fortunoff, JCPenney, Lord & Taylor, Macy’s, Sears		—
Woodlands Village	Flagstaff, AZ		91,810		91,810	—		—
Yellowstone Square	Idaho Falls, ID		221,937		221,937	Yellowstone Warehouse		2
			118,303,425		51,078,033

(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.
(4)	Mervyn’s is not expected to re-open when the mall re-opens, which is currently expected to be October 2007.

Unconsolidated Retail Properties

					GLA
		Ownership					Mall and		Anchors/	Anchor
Name of Center	Location	Interest			Total		Freestanding		Significant Tenants	Vacancies
Alderwood	Lynnwood (Seattle), WA		50	%		1,271,237		500,686	JCPenney, Loews Cineplex, Macy’s, Nordstrom, Sears		—
Altamonte Mall	Altamonte Springs (Orlando), FL		50			1,149,411		470,863	Dillard’s, JCPenney, Macy’s, Sears		—
Arrowhead Towne Center	Glendale, AZ		16.7			1,133,342		348,805	AMC Theatres, Dillard’s, JCPenney, Macy’s, Mervyn’s, Sears		—
Bay City Mall	Bay City, MI		50			526,742		211,091	JCPenney, Sears, Target, Younkers		—
Brass Mill Center and Commons	Waterbury, CT		50			1,184,909		527,570	Burlington Coat Factory, JCPenney, Macy’s, Regal Cinemas, Sears, Steve & Barry’s University Sportswear		—
Bridgewater Commons	Bridgewater, NJ		35			971,547		435,658	AMC Theatres, Bloomingdale’s, Lord & Taylor, Macy’s		—

22

				GLA
		Ownership				Mall and		Anchors/	Anchor
Name of Center	Location	Interest		Total		Freestanding		Significant Tenants	Vacancies
Carolina Place	Pineville (Charlotte), NC		50		1,154,344		349,428	Barnes & Noble, Belk, Dillard’s, JCPenney, Macy’s, Sears		—
Center Pointe Plaza	Las Vegas, NV		50		144,635		144,635	Albertson’s, CVS		—
Christiana Mall	Newark, DE		50		1,083,027		311,623	JCPenney, Macy’s		2
Chula Vista Center	Chula Vista (San Diego), CA		50		876,212		288,075	JCPenney, Macy’s, Mervyn’s, Sears, Ultrastar Theaters		—
Clackamas Town Center	Portland, OR		50		1,229,899		351,210	Barnes & Noble, Century Theatres, JCPenney, Meier & Frank, Meier & Frank Home Store, Nordstrom, Sears		—
Columbiana Centre	Columbia, SC		50		824,184		265,207	Belk, Dillard’s, JCPenney, Sears		—
Deerbrook Mall	Humble (Houston), TX		50		1,204,982		366,158	AMC Theatres, Dillard’s, JCPenney, Macy’s, Sears		1
First Colony Mall	Sugar Land (Houston), TX		50		1,108,387		489,339	Dillard’s, Dillard’s Men’s & Home, JCPenney, Macy’s		—
Florence Mall	Florence (Cincinnati, OH), KY		50		889,236		336,829	JCPenney, Macy’s, Macy’s Home Store, Sears		—
Galleria at Tyler(2)	Riverside, CA		50		1,154,039		532,331	JCPenney, Macy’s, Nordstrom		1
Glendale Galleria(2)	Glendale, CA		50		1,319,256		515,018	JCPenney, Macy’s, Mervyn’s, Nordstrom, Target		—
Highland Mall(2)	Austin, TX		50		1,116,203		397,462	Austin Leasehold Investors, Dillard’s, Dillard’s Men’s, Macy’s		—
Kenwood Towne Centre(2)	Cincinnati, OH		50		1,200,907		549,887	Dillard’s, Macy’s, Parisian		—
Lake Mead & Buffalo Partners Village Center	Las Vegas, NV		50		150,948		150,948	Only 99 Cent Store, Vons		—
Lakeland Square	Lakeland (Orlando), FL		50		894,430		284,392	Dillard’s, Dillard’s Men’s & Home, Inland Retail Trs. Corp, JCPenney, Macy’s, Sears		—
Mizner Park(2)	Boca Raton, FL		50		236,999		126,177	Mizner Park Cinema, Robb & Stucky		—
Montclair Plaza	Montclair (San Bernadino), CA		50		1,353,074		555,497	Circuit City, Ethan Allen Gallery, JCPenney, Linens ’N Things, Macy’s, Nordstrom, Sears, Ninety Nine Cent Only Store		1
Moreno Valley Mall	Moreno Valley (Riverside), CA		50		1,086,776		317,585	Gottschalks, Harkins Theatre, JCPenney, Limited, Macy’s, Sears		—
Natick Mall	Natick (Boston), MA		50		1,129,628		402,966	JCPenney, Lord & Taylor, Macy’s, Sears		—

23

				GLA
		Ownership				Mall and		Anchors/	Anchor
Name of Center	Location	Interest		Total		Freestanding		Significant Tenants	Vacancies
Neshaminy Mall	Bensalem, PA		25		1,016,631		318,645	AMC Theatres, Boscov’s, Macy’s, Sears		—
Newgate Mall	Ogden (Salt Lake City), UT		50		725,288		253,154	Dillard’s, Mervyn’s, Sears, Sports Authority, Tinsel Town		—
NewPark Mall	Newark (San Francisco), CA		50		1,209,906		395,058	Century Theatres, JCPenney, Macy’s, Mervyn’s, Sears, Target		—
North Point Mall	Alpharetta (Atlanta), GA		50		1,372,650		406,363	Dillard’s, JCPenney, Macy’s, Parisian, Sears		1
Northbrook Court	Northbrook (Chicago), IL		50		1,000,941		385,022	AMC Theatres, Lord & Taylor, Macy’s, Neiman Marcus		—
Oakbrook Center	Oakbrook (Chicago), IL		47		2,090,601		805,621	Bloomingdale’s Home, Crate & Barrel, Eddie Bauer, Lord & Taylor, Macy’s, Neiman Marcus, Nordstrom, Sears		—
The Oaks Mall	Gainesville, FL		51		907,282		349,415	Belk, Dillard’s, JCPenney, Macy’s, Sears		—
Otay Ranch Town Center	Chula Vista (San Diego), CA		50		589,423		449,423	Macy’s		—
The Parks at Arlington	Arlington (Dallas), TX		50		1,509,692		423,432	AMC Theatres, Circuit City, Dick’s Sporting Goods, Dillard’s, JCPenney, Macy’s, Sears, Steve & Barry’s University Sportswear		1
Park Meadows	Littleton, CO		35		1,631,482		533,482	Dick’s Sporting Goods, Dillard’s, JCPenney, Macy’s, Nordstrom		1
Pembroke Lakes Mall	Pembroke Pines (Fort Lauderdale), FL		50		1,136,859		355,584	Dillard’s, Dillard’s Men’s & Home, JCPenney, Macy’s, Macy’s Home Store, Sears		—
Perimeter Mall	Atlanta, GA		50		1,560,321		507,047	Bloomingdale’s, Dillard’s, Macy’s, Nordstrom		—
Pinnacle Hills Promenade	Rogers, AR		50		601,228		347,688	Dillard’s, JCPenney		—
Quail Springs Mall	Oklahoma City, OK		50		1,134,643		349,843	AMC Theatres, Dillard’s, JCPenney, Macy’s, Sears		—
Riverchase Galleria	Hoover (Birmingham), AL		50		1,553,451		504,544	Belk, CompUSA, JCPenney, Macy’s, Parisian, Sears		1
The Shoppes at Buckland Hills	Manchester, CT		50		1,051,380		458,769	Dick’s Sporting Goods, JCPenney, Macy’s, Macy’s Men’s & Home, Sears		—
Shopping Iguatemi Salvador	Salvador, Bahia (Brazil)		13		505,653		2,321	Bompreco, C&A, Cinema Multiplex, Lojas Americanas, Playland, Riachuelo, Renner, Zara		—

24

				GLA
		Ownership				Mall and		Anchors/	Anchor
Name of Center	Location	Interest		Total		Freestanding		Significant Tenants	Vacancies
Shopping Iguatemi Campina Grande	Campina Grande, Paraiba (Brazil)		8		171,512		1,780	Bompreco, Cine Sercia, Gamestation, Insinuante, Lojas Americanas, Riachuelo		—
Shopping Taboao	Taboao da Serra, Sao Paulo (Brazil)		19		265,296		4,650	Besni, C&A, Carrefour, Casas Bahia, Lojas Americanas, Riachuelo, Telha Norte		—
Shopping Leblon	Rio de Janeiro, Rio de Janeiro (Brazil)		15		247,661		—	Centauro, Cinema Kinoplex, Livraria da Travessa, Renner, Zara		—
Silver City Galleria	Taunton (Boston), MA		50		1,025,192		413,926	Dick’s Sporting Goods, JCPenney, Macy’s, Sears, Silver City Cinemas, Steve & Barry’s University Sportswear		2
Steeplegate Mall	Concord, NH		50		481,896		225,549	The Bon Ton, JCPenney, Sears		—
Stonebriar Centre	Frisco (Dallas), TX		50		1,652,900		527,867	AMC Theatres, Barnes & Noble, Dave & Buster’s, Dick’s Sporting Goods, JCPenney, Macy’s, Nordstrom, Sears		1
Superstition Springs Center(2)	East Mesa (Phoenix), AZ		16.7		1,068,290		331,136	Dillards, JCPenney, JCPenney Home Store, Macy’s, Mervyn’s, Sears		—
Towson Town Center	Towson, MD		35		944,105		524,976	Macy’s, Nordstrom		—
The Trails Village Center	Las Vegas, NV		50		174,660		174,660	Longs Drugs, Vons		—
Tysons Galleria	McLean (Washington, D.C.), VA		50		820,492		308,559	Macy’s, Neiman Marcus, Saks Fifth Avenue		—
Via Parque Shopping	Rio de Janeiro, Rio de Janeiro (Brazil)		29		574,258		29,150	C&C Casa e Construcao, Casa & Video, Casas Bahia, Cine Via Parque, Claro Hall, Kalunga, Leader, Lojas Americanas, Marisa, Ponto Frio, Renner		—
Village of Merrick Park(2)	Coral Gables, FL		40		743,414		413,414	Neiman Marcus, Nordstrom		—
Vista Ridge Mall	Lewisville (Dallas), TX		50		1,105,334		336,487	Cinemark, Dillard’s, JCPenney, Macy’s, Sears		—
Washington Park Mall	Bartlesville, OK		50		357,346		163,050	Dillard’s, JCPenney, Sears		—
Water Tower Place	Chicago, IL		52		711,737		284,694	Lord & Taylor, Macy’s		—
West Oaks Mall	Ocoee (Orlando), FL		50		1,163,119		366,369	AMC Theatres, Belk, Dillard’s, JCPenney, Sears Dick’s Sporting Goods, JCPenney, Tilt,		1
Westroads Mall	Omaha, NE		51		1,155,493		331,433	Von Maur, Younkers		1
Whaler’s Village	Lahaina, HI		50		112,057		112,057	N/A		N/A

25

				GLA
		Ownership				Mall and		Anchors/	Anchor
Name of Center	Location	Interest		Total		Freestanding		Significant Tenants	Vacancies
Willowbrook Mall	Houston, TX		50		1,506,724		400,140	Dillard’s, JCPenney, Macy’s, Sears		1
The Woodlands Mall	Woodlands (Houston), TX		50		1,354,849		509,620	Dillard’s, JCPenney, Macy’s, Macy’s Children Store, Sears		1
					59,628,120		21,534,368

(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.

Anchors

Anchors have traditionally been a major component of a regional shopping center. Anchors are frequently department stores whose merchandise appeals to a broad range of shoppers. Anchors generally either own their stores, the land under them and adjacent parking areas, or enter into long-term leases at rates that are generally lower than the rents charged to Mall Store tenants. We also typically enter into long-term reciprocal agreements with Anchors that provide for, among other things, mall and Anchor operating covenants and Anchor expense participation. The centers in the Retail Portfolio receive a smaller percentage of their operating income from Anchors than from Mall Stores. While the market share of many traditional department store Anchors has been declining, strong Anchors continue to play an important role in maintaining customer traffic and making the centers in the Retail Portfolio desirable locations for Mall Store tenants.

The following table indicates the parent company of certain Anchors and sets forth the number of stores and square feet owned or leased by each Anchor in the Retail Portfolio as of December 31, 2006.

	Consolidated				Unconsolidated				Total
	Total		Square Feet		Total		Square Feet		Total		Square Feet
	Stores		(000’s)		Stores		(000’s)		Stores		(000’s)
Federated Department Stores, Inc.
Bloomingdale’s, including Home		2		360		3		465		5		825
David’s Bridal		1		10		—		—		1		10
Macy’s, including Mens, Womens, Children and Home		85		13,301		48		8,583		133		21,884
Meier & Frank, including Home		—		—		2		365		2		365
Total Federated Department Stores, Inc.		88		13,671		53		9,413		141		23,084
Sears Holdings Corporation
Sears		95		13,521		33		5,164		128		18,685
Kmart		1		88		—		—		1		88
Total Sears Holdings Corporation		96		13,609		33		5,164		129		18,773
Belk, Inc.
Belk, including Men’s and Hudson		9		1,187		5		898		14		2,085
Dillard’s		1		160		—		—		1		160
Parisian		1		86		4		423		5		509
Proffit’s, including Home		2		113		—		—		2		113
Total Belk, Inc.		13		1,546		9		1,321		22		2,867

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	Consolidated				Unconsolidated				Total
	Total		Square Feet		Total		Square Feet		Total		Square Feet
	Stores		(000’s)		Stores		(000’s)		Stores		(000’s)
Bon-Ton Department Stores, Inc.
Bergner’s		1		154		—		—		1		154
The Bon-Ton		2		224		1		88		3		312
Boston Store		1		211		—		—		1		211
Carson Pirie Scott		1		138		—		—		1		138
Elder-Beerman		3		142		—		—		3		142
Herberger’s		3		186		—		—		3		186
Younkers		8		939		2		244		10		1,183
Total Bon-Ton Department Stores, Inc.		19		1,994		3		332		22		2,326
JCPenney Company, Inc. (d.b.a. JCPenney)		94		10,847		37		4,943		131		15,790
Dillard’s Inc. (d.b.a. Dillard’s)		53		8,769		27		4,683		80		13,422
Nordstrom, Inc. (d.b.a. Nordstrom)		8		1,256		12		2,046		20		3,302
Target Corporation (d.b.a. Target)		14		1,604		3		480		17		2,084
MDS Texas Realty I (d.b.a. Mervyn’s)		9		767		4		338		13		1,105
The Neiman Marcus Group, Inc.		2		328		5		624		7		952
American Multi-Cinema, Inc.		5		403		7		547		12		950
Others		120		8,232		43		3,381		163		11,613
Grand Total		521		63,026		236		33,272		757		96,298

Non-Retail Properties

See Item 1 “Narrative Description of Business” for information regarding our other properties (office, industrial and mixed-use buildings) and our Master Planned Communities segment.

Item 3.   Legal Proceedings

Neither the Company nor any of the Unconsolidated Real Estate Affiliates is currently involved in any material pending legal proceedings nor, to our knowledge, is any material legal proceeding currently threatened against the Company or any of the Unconsolidated Real Estate Affiliates.

Item 4.   Submission of Matters to a Vote of Security Holders

No matters were submitted to a vote of GGP’s stockholders during the fourth quarter of 2006.

PART II

Item 5.   Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities

GGP’s common stock is listed on the New York Stock Exchange (“NYSE”) and is traded under the symbol “GGP.” As of February 23, 2007, 243,769,536 outstanding shares of our common stock were held by 2,825 stockholders of record. The closing price per share of our common stock on the NYSE on February 23, 2007, was $64.80 per share.

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The following table summarizes the quarterly high and low sales prices per share of our common stock as reported by the NYSE.

	Stock Price
Quarter Ended	High		Low
2006
December 31	$	56.14	$	46.14
September 30		48.70		43.49
June 30		49.06		41.92
March 31		52.32		46.23
2005
December 31	$	48.27	$	39.60
September 30		47.48		40.82
June 30		42.08		33.40
March 31		37.75		31.38
2004
December 31	$	36.90	$	30.90
September 30		32.12		28.41
June 30		35.30		24.31
March 31		35.15		27.25

The following table summarizes quarterly distributions per share of our common stock.

	Record	Payment
Declaration Date	Date	Date	Amount
2007
January 5	January 17	January 31	$	.45
2006
October 6	October 17	October 31		.45
July 5	July 17	July 31		.41
April 4	April 13	April 28		.41
January 6	January 17	January 31		.41
2005
October 6	October 18	October 31		.41
July 5	July 15	July 29		.36
April 4	April 15	April 29		.36
January 7	January 17	January 31		.36
2004
August 20	October 15	October 29		.36
July 2	July 15	July 30		.30
April 5	April 15	April 30		.30
January 5	January 15	January 30		.30

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The following table summarizes treasury share repurchases during the quarter ended December 31, 2006.

Issuer Purchases of Equity Securities

					Total Number		Approximate
					of Shares		Dollar Value
					Purchased		of Shares that
					as Part of		May Yet be
	Total		Average		Publicly		Purchased
	Number of		Price		Announced		Under the
	Shares		Paid		Plans or		Plans or
Period	Purchased		per Share		Programs		Programs
November 9-13		346,300	$	46.88		346,300	$	600,000,000(1	)

(1) We have a common stock repurchase program which allows us to repurchase $200 million of our common stock per year through 2009, unless the program is earlier terminated. Stock repurchases under this program are made through open market or privately negotiated transactions. The repurchase program gives us the ability to acquire some or all of the shares of common stock to be issued upon the exercise of certain employee stock options and pursuant to the CSA.

See Note 12 for information regarding redemptions of Common Units for common stock and information regarding shares of our common stock that may be issued under our equity compensation plans as of December 31, 2006.

Item 6.   Selected Financial Data

The following table sets forth selected financial data which is derived from, and should be read in conjunction with, the Consolidated Financial Statements and the related Notes and Management’s Discussion and Analysis of Financial Condition and Results of Operations contained in this Annual Report.

	2006			2005			2004			2003			2002
	(In thousands, except per share amounts)
Operating Data
Revenues	$	3,256,283		$	3,072,704		$	1,799,881		$	1,262,791		$	973,440
Depreciation and amortization		(690,194	)		(672,914	)		(364,854	)		(230,195	)		(179,036	)
Other operating expenses		(1,377,637	)		(1,340,806	)		(693,735	)		(484,196	)		(366,806	)
Interest expense, net		(1,105,852	)		(1,020,825	)		(468,958	)		(276,235	)		(215,340	)
Provision for income taxes		(98,984	)		(51,289	)		(2,383	)		(98	)		(119	)
Minority interest		(37,761	)		(43,989	)		(105,274	)		(110,984	)		(86,213	)
Equity in income of unconsolidated affiliates		114,241			120,986			88,191			94,480			80,825
Income from continuing operations		60,096			63,867			252,868			255,563			206,751
Income (loss) from discontinued operations, net		(823	)		11,686			14,984			7,848			2,507
Net income		59,273			75,553			267,852			263,411			209,258
Convertible preferred stock dividends		—			—			—			(13,030	)		(24,467	)
Net income available to common stockholders	$	59,273		$	75,553		$	267,852		$	250,381		$	184,791
Basic earnings per share:
Continuing operations	$	0.25		$	0.27		$	1.15		$	1.21		$	0.98
Discontinued operations		—			0.05			0.07			0.04			0.01
	$	0.25		$	0.32		$	1.22		$	1.25		$	0.99

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	2006			2005			2004			2003			2002
	(In thousands, except per share amounts)
Diluted earnings per share:
Continuing operations	$	0.24		$	0.27		$	1.15		$	1.19		$	0.97
Discontinued operations		—			0.05			0.06			0.03			0.01
	$	0.24		$	0.32		$	1.21		$	1.22		$	0.98
Distributions declared per share	$	1.68		$	1.49		$	1.26		$	0.78		$	0.92
Balance Sheet Data
Investment in real estate assets — cost	$	26,160,637		$	25,404,891		$	25,254,333		$	10,307,961		$	7,724,515
Total assets		25,241,445			25,307,019			25,718,625			9,582,897			7,280,822
Total debt		20,521,967			20,418,875			20,310,947			6,649,490			4,592,311
Preferred minority interests		182,828			205,944			403,161			495,211			468,201
Common minority interests		347,753			430,292			551,282			408,613			377,746
Convertible preferred stock		—			—			—			—			337,500
Stockholders’ equity		1,664,079			1,932,918			2,143,150			1,670,409			1,196,525
Cash Flow Data
Operating activities	$	816,351		$	841,978		$	719,376		$	585,735		$	460,495
Investing activities		(210,400	)		(154,197	)		(9,020,815	)		(1,753,426	)		(949,411	)
Financing activities		(611,603	)		(624,571	)		8,330,343			1,124,728			381,801
Funds From Operations(1)
Operating Partnership	$	902,361		$	891,696		$	766,164		$	618,561		$	485,304
Less: Allocation to Operating Partnership unitholders		(161,795	)		(165,205	)		(154,347	)		(138,568	)		(116,170	)
General Growth stockholders	$	740,566		$	726,491		$	611,817		$	479,993		$	369,134

(1) Funds From Operations (“FFO” as defined below) does not represent cash flow from operations as defined by Generally Accepted Accounting Principles (“GAAP”).

Funds From Operations

Consistent with real estate industry and investment community practices, we use Funds From Operations (“FFO”) as a supplemental measure of our operating performance. The National Association of Real Estate Investment Trusts (“NAREIT”) defines FFO as net income (loss) (computed in accordance with GAAP), excluding gains or losses from cumulative effects of accounting changes, extraordinary items and sales of operating rental properties, plus real estate related depreciation and amortization and after adjustments for unconsolidated partnerships and joint ventures.

We consider FFO a useful supplemental measure for equity REITs and a complement to GAAP measures because it facilitates an understanding of the operating performance of our properties. FFO does not include real estate depreciation and amortization required by GAAP since these amounts are computed to allocate the cost of a property over its useful life. Since values for well-maintained real estate assets have historically increased or decreased based upon prevailing market conditions, we believe that FFO provides investors with a clearer view of our operating performance.

In order to provide a better understanding of the relationship between FFO and net income available to common stockholders, a reconciliation of FFO to net income available to common stockholders has been provided. FFO does

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not represent cash flow from operations as defined by GAAP, should not be considered as an alternative to GAAP net income and is not necessarily indicative of cash available to fund all cash requirements.

Reconciliation of FFO to Net Income Available to Common Stockholders

	2006			2005			2004			2003			2002
	(In thousands)
FFO:
General Growth stockholders	$	740,566		$	726,491		$	611,817		$	479,993		$	369,134
Operating Partnership unitholders		161,795			165,205			154,347			138,568			116,170
Operating Partnership		902,361			891,696			766,164			618,561			485,304
Depreciation and amortization of capitalized real estate costs		(835,656	)		(799,337	)		(440,108	)		(299,711	)		(241,393	)
FFO of discontinued operations and other		8,401			(10,712	)		(6,235	)		(6,299	)		(4,263	)
Allocations to Operating Partnership unitholders		(15,010	)		(17,780	)		(66,953	)		(56,988	)		(32,897	)
Income from continuing operations		60,096			63,867			252,868			255,563			206,751
Income (loss) from discontinued operations, net of minority interest		(823	)		11,686			14,984			7,848			2,507
Net income		59,273			75,553			267,852			263,411			209,258
Convertible preferred stock dividends		—			—			—			(13,030	)		(24,467	)
Net income available to common stockholders	$	59,273		$	75,553		$	267,852		$	250,381		$	184,791

Item 7.   Management’s Discussion and Analysis of Financial Condition and Results of Operations

All references to numbered Notes are to specific footnotes to our Consolidated Financial Statements included in this Annual Report and which descriptions are incorporated into the applicable response by reference. The following discussion should be read in conjunction with such Consolidated Financial Statements and related Notes. Capitalized terms used, but not defined, in this Management’s Discussion and Analysis of Financial Condition and Results of Operations (“MD&A”) have the same meanings as in such Notes. See also the Glossary at the end of this Item 7 for definitions of selected terms used in this Annual Report.

Overview — Retail and Other Segment

Our primary business is acquiring, owning, managing, leasing and developing retail rental property, primarily shopping centers. The majority of our properties are located in the United States, but we also have retail operations and property management activities, through unconsolidated joint ventures, in Brazil and Turkey.

We provide on-site management and other services to substantially all of our properties, including properties which we own through joint venture arrangements and which are unconsolidated for GAAP purposes. Our management operating philosophies and strategies are generally the same whether the properties are consolidated or unconsolidated. As a result, we believe that financial information and operating statistics with respect to all properties, both consolidated and unconsolidated, provide important insights into our operating results. Collectively, we refer to our Consolidated and Unconsolidated Properties as our “Company Portfolio” and the retail portion of the Company Portfolio as the “Retail Company Portfolio.”

We seek to increase cash flow and real estate net operating income of our retail and office rental properties through proactive property management and leasing (including tenant remerchandising), operating cost reductions, physical expansions, redevelopments and capital reinvestment. Some of the actions that we take to increase productivity include changing the tenant mix, adding vendor carts or kiosks and full expansions or renovations of centers.

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We believe that the most significant operating factor affecting incremental cash flow and real estate net operating income is increased rents earned from tenants at our properties. These rental revenue increases are primarily achieved by:

•  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

The following table summarizes selected operating statistics. Unless noted, all information is as of December 31, 2006.

	Consolidated			Unconsolidated			Retail
	Retail			Retail			Company
	Properties			Properties			Portfolio
Operating Statistics (a)
Occupancy:
December 31, 2006		93.4	%		94.2	%		93.6	%
December 31, 2005		92.1			93.5			92.5
Trailing 12 month total tenant sales per sq. ft.(b)	$	443		$	473		$	453
% change in total sales(b)		5.6	%		4.5	%		5.2	%
% change in comparable sales(b)		2.5			2.6			2.5
Mall and freestanding GLA
excluding space under redevelopment (in sq. ft.)		42,818,331			19,038,590			61,856,921
Certain Financial Information
Average annualized in place rent per sq. ft.	$	34.29		$	37.30
Average rent per sq. ft. for new/renewal leases		34.99			39.76
Average rent per sq. ft. for leases expiring in 2006		30.16			33.59

(a)	Excludes properties currently being redeveloped and/or remerchandised and miscellaneous (non-mall) properties.
(b)	Due to tenant sales reporting timelines, data presented is as of November.

The expansion and renovation of a property may also result in increased cash flows and operating income as a result of increased customer traffic, trade area penetration and improved competitive position of the property. As of December 31, 2006, we had 17 major approved redevelopment projects underway (each with budgeted projected expenditures, at our ownership share, in excess of $10 million).

We also develop retail centers from the ground-up.  On October 4, 2006, we opened Pinnacle Hills Promenade in Rogers, Arkansas. This 980,000 square foot open-air center is anchored by Dillard’s, JCPenney and a 12-screen theatre and includes retail, dining, entertainment, recreation and office space. Additionally, we opened Otay Ranch Town Center in Chula Vista (San Diego), California on October 27, 2006. This open-air center includes approximately 850,000 square feet of retail, dining and entertainment space. Anchors include AMC Theatres, Barnes & Noble, Macy’s and REI. Portions of Lincolnshire Commons in Lincolnshire (Chicago), Illinois opened throughout 2006 and Shopping Leblon in Rio de Janeiro, Brazil opened in November 2006. In September 2005, we opened the Shops at La Cantera in San Antonio, Texas. Nine additional domestic retail center development projects are currently under construction, and are expected to open in 2007 and 2008:

Consolidated Properties:

•  Gateway Overlook in Columbia, Maryland

•  Parke West in Peoria, Arizona

•  The Shops at Fallen Timbers, Maumee (Toledo), Ohio

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•  Vista Commons in Las Vegas, Nevada

Unconsolidated Properties:

•  Bangu Shopping in Rio de Janeiro, Brazil

•  Espark in Eskisehir, Turkey

•  Natick West in Natick, Massachusetts

•  RiverCrossing in Macon, Georgia

•  Santana Parque Shopping in Santana (Sao Paulo), Brazil

Total projected expenditures (including our share of the Unconsolidated Real Estate Affiliates) for these redevelopment and development projects were approximately $1.4 billion as of December 31, 2006.

We also have eight other potential new retail or mixed-use developments, including Phase II of the Shops at La Cantera which was opened in September 2005, that are currently projected to open in 2008 through 2010. In addition, we have agreed to acquire the new retail development at The Palazzo in Las Vegas, Nevada, upon opening. This is currently expected in early 2008, at an estimated acquisition cost of approximately $600 million.

Prior to 2005, acquisitions were also a significant factor affecting our cash flows and real estate net operating income. Acquisitions have included single centers, privately held portfolios and public-to-public purchases such as the $14 billion TRC Merger in November 2004. Acquisitions in 2006 and 2005, however, were not as significant and consisted primarily of additional interests in existing joint ventures and investments in new joint ventures.

Overview — Master Planned Communities Segment

Our Master Planned Communities business is the development and sale of residential and commercial land, primarily in large-scale projects in and around Columbia, Maryland; Houston, Texas; and Summerlin, Nevada. Residential sales include standard, custom and high density (i.e. condominium, town homes and apartments) parcels. Standard residential lots are designated for detached and attached single- and multi-family homes, ranging from entry-level to luxury homes. At our Summerlin project, we have further designated certain residential parcels as custom lots as their premium price reflects their larger size and other distinguishing features including gated communities, golf course access and higher elevations. Commercial sales include parcels designated for retail, office, services and other for-profit activities, as well as those parcels designated for use by government, schools and other not-for-profit entities.

Revenues are derived primarily from the sale of finished lots, including infrastructure and amenities, and undeveloped property to both residential and commercial developers. Additional revenues are earned through participations with builders in their sales of finished homes to homebuyers. Revenues and net operating income are affected by such factors as the availability to purchasers of construction and permanent mortgage financing at acceptable interest rates, consumer and business confidences, regional economic conditions in the areas surrounding the projects, levels of homebuilder inventory, other factors affecting the homebuilder business, availability of saleable land for particular uses and our decisions to sell, develop or retain land.

Our primary strategy in this segment is to develop and sell land in a manner that increases the value of the remaining land to be developed and sold and to provide current cash flows. Our Master Planned Communities projects are owned by taxable REIT subsidiaries and, as a result, are subject to income taxes. Cash requirements to meet federal income tax requirements will increase in future years as we exhaust certain net loss carry forwards and as certain master planned community developments are completed for tax purposes and, as a result, previously deferred taxes must be paid. Such cash requirements could be significant. Additionally, revenues from the sale of land at Summerlin are subject to the Contingent Stock Agreement as more fully described in Note 14.

As the new housing market softened throughout 2006, demand at our Summerlin, Columbia and Fairwood projects declined and a number of anticipated sales were cancelled by the builders. Unlike other markets in which builders have a significantly higher supply of unsold homes, demand at Woodlands and Bridgeland, which began sales in the first quarter of 2006, did not decline in 2006. We currently expect these trends to continue through 2007.

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Overview — Other

We believe changes in interest rates are the most significant external factor affecting our cash flows and net income. As detailed in our discussion of economic conditions and market risk (Item 7A), interest rates have risen during 2006 and could continue to rise in future periods. These increases have had, and may continue to have, an adverse impact on our cash flow and net income.

During 2006, we obtained approximately $9.4 billion of consolidated debt through new financings and refinancings. Our share of debt issued by our Unconsolidated Real Estate Affiliates totaled approximately $1.3 million during the same period. Proceeds from the issuances were used, in part, to repay $3.0 billion of variable-rate debt.

Seasonality

Although we have a year-long temporary leasing program, occupancies for short-term tenants and, therefore, rental income recognized, are higher during the second half of the year. In addition, the majority of our tenants have December or January lease years for purposes of calculating annual overage rent amounts. Accordingly, overage rent thresholds and the related revenue recognition are most commonly achieved in the fourth quarter.

Use of Estimates

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

Critical Accounting Policies

Critical accounting policies are those that are both significant to the overall presentation of our financial condition and results of operations and require management to make difficult, complex or subjective judgments. Our critical accounting policies are those applicable to the following:

Initial valuations and estimated useful lives or amortization periods for property and intangibles.  When we acquire a property, we make an initial assessment of the initial valuation and composition of the assets acquired and liabilities assumed. These assessments consider fair values of the respective assets and liabilities and are primarily determined based on estimated future cash flows using appropriate discount and capitalization rates, but may also be based on independent appraisals or other market data. The estimated future cash flows that are used for this analysis reflect the historical operations of the property, known trends and changes expected in current market and economic conditions which would impact the property’s operations, and our plans for such property. These estimates are particularly important as they are used for the allocation of purchase price between depreciable and non-depreciable real estate and other identifiable intangibles including above, below and at-market leases. Significant differences in annual depreciation or amortization expense may result from the differing amortization periods related to such purchased assets and liabilities. As a result, the impact of these estimates on our operations could be substantial.

Events or changes in circumstances concerning a property may occur which could indicate that the carrying values or amortization periods of the assets and liabilities may require adjustment. The resulting recovery analysis also depends on an analysis of future cash flows to be generated from a property’s assets and liabilities. Changes in our overall plans (for example, the extent and nature of a proposed redevelopment of a property) and our views on current market and economic conditions may have a significant impact on the resulting estimated future cash flows of a property that are analyzed for these purposes.

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Recoverable amounts of receivables and deferred taxes.  We make periodic assessments of the collectibility of receivables (including those resulting from the difference between rental revenue recognized and rents currently due from tenants) and the recoverability of deferred taxes based on a specific review of the risk of loss on specific accounts or amounts. The receivable analysis places particular emphasis on past-due accounts and considers the nature and age of the receivables, the payment history and financial condition of the payee, the basis for any disputes or negotiations with the payee and other information which may impact collectibility. For straight-line rents, the analysis considers the probability of collection of the unbilled deferred rent receivable given our experience regarding such amounts. For deferred taxes, an assessment of the recoverability of the tax asset considers the current expiration periods of the prior net operating loss carryforwards and the estimated future taxable income of our taxable REIT subsidiaries. The resulting estimates of any allowance or reserve related to the recovery of these items is subject to revision as these factors change and is sensitive to the effects of economic and market conditions on such payees and our taxable REIT subsidiaries.

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.

Revenue recognition and related matters.  Minimum rent revenues are recognized on a straight-lined 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. Straight-line rents receivable represents the current net cumulative rents recognized prior to when billed and collectible as provided by the terms of the leases. 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 master planned community project. The cost ratios used are based on actual costs incurred and estimates of development costs and sales revenues for 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 increase in the basis of the land due to purchase price accounting adjustments has resulted in a significant increase in the cost ratios of our projects. 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.

Results of Operations

Our revenues are primarily received from tenants in the form of fixed minimum rents, overage rents and recoveries of operating expenses. We have presented the following discussion of our results of operations on a segment basis under the proportionate share method. Under the proportionate share method, our share of the revenues and expenses of the Unconsolidated Properties are combined with the revenues and expenses of the Consolidated Properties. In addition, other revenues are increased by the real estate net operating income of discontinued

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operations and are reduced by our consolidated minority interest venturers’ share of real estate net operating income. See Note 16 for additional information including reconciliations of our segment basis results to GAAP basis results.

Retail and Other Segment

2006 compared to 2005 The following table compares major revenue and expense items for the years ended December 31, 2006 and 2005:

					$ Increase			% Increase
	2006		2005		(Decrease)			(Decrease)
	(In thousands)
Property revenues:
Minimum rents	$	2,181,845	$	2,064,127	$	117,718			5.7	%
Tenant recoveries		960,816		936,029		24,787			2.6
Overage rents		91,911		83,713		8,198			9.8
Other		188,331		172,477		15,854			9.2
Total property revenues		3,422,903		3,256,346		166,557			5.1
Property operating expenses:
Real estate taxes		277,381		261,331		16,050			6.1
Repairs and maintenance		242,846		238,703		4,143			1.7
Marketing		61,810		78,227		(16,417	)		(21.0	)
Other property operating costs		527,030		510,432		16,598			3.3
Provision for doubtful accounts		22,871		18,725		4,146			22.1
Total property operating expenses		1,131,938		1,107,418		24,520			2.2
Real estate property net operating income	$	2,290,965	$	2,148,928	$	142,037			6.6	%

The increase in minimum rents is primarily attributable to the following:

•  Higher minimum rents, especially at The Shops at La Cantera which opened in September 2005, and Ala Moana Center which was recently redeveloped

•  The acquisition of Whaler’s Village by one of our joint ventures, the acquisition of our partner’s share of GGP Ivanhoe IV, Inc. and the acquisition of Shopping Campina Grande as well as other properties in our Brazil joint venture

•  Higher specialty leasing and kiosk rents, especially at properties acquired in the 2004 TRC Merger, as well as higher termination income

•  Greater use of vacant space for temporary tenant rentals

Tenant recoveries increased primarily as a result of higher operating costs, as discussed below, that are substantially recoverable from our tenants.

Historically, our leases have included both a base rent component and a component which requires tenants to pay amounts related to all, or substantially all, of their share of real estate taxes and certain property operating expenses, including common area maintenance and insurance. The portion of these leases attributable to real estate tax and operating expense recoveries are recorded as “Tenant recoveries.” Recently, however, we structured our new tenant leases such that a higher proportion of our rental revenues represent operating expense recoveries. This change has resulted in a shift between minimum rents and tenant recoveries.

The increase in overage rents is primarily attributed to The Grand Canal Shoppes and Fashion Show as the result of increased sales and occupancy compared to 2005.

Other revenues include all other property revenues including vending, parking, sponsorship and advertising revenues in addition to real estate property net operating income (“NOI”) of discontinued operations less NOI of

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minority interests in consolidated joint ventures. Increases in vending, parking, sponsorship and advertising revenues in 2006 were partially offset by higher minority interest allocations, especially at The Shops at La Cantera, which opened in September 2005. Nonrecurring activity included a gain on sale of an unconsolidated office property in 2006, a non-recurring reduction to income by an Unconsolidated Property in 2005, and NOI of discontinued operations in 2005.

Higher real estate taxes are primarily attributed to The Shops at La Cantera and Jordan Creek Town Center with substantially all of the remaining properties in the portfolio reporting individual minor increases.

The increase in repairs and maintenance is primarily attributed to Ala Moana Center, The Shops at La Cantera, Providence Place, the acquisition of Whaler’s Village and the acquisition of the remaining interest in GGP Ivanhoe IV, Inc.

Marketing expenses decreased at substantially all of our properties due to significant cost control initiatives.

Property operating expenses increased due to higher electric expense, security expense and insurance costs across the portfolio. Property operating expenses in 2005 include a non-recurring reduction to expenses by an Unconsolidated Property, which was acquired during the TRC Merger. Such increases were offset by decreases at Oakwood Center which is operating at substantially reduced capacity due to hurricane-related damage incurred in September 2005.

The increase in the provision for doubtful accounts is primarily due to Oakwood Center and Riverwalk Marketplace, which were damaged as discussed in Note 14. Although we may not collect all of these amounts from our tenants, we do believe that the remaining amounts will be recovered under our business interruption insurance coverage. Under GAAP, however, not all amounts which we expect to collect for business interruption coverage are currently recognizable. The increases were partially offset by non-recurring provisions in 2005 including an individual tenant bankruptcy.

2005 compared to 2004 Acquisitions were the main reason for the increases in property revenues and expenses as detailed below:

	2005		2004		$ Increase		% Increase
	(In thousands)
Property revenues:
Minimum rents	$	2,064,127	$	1,351,907	$	712,220		52.7	%
Tenant recoveries		936,029		607,811		328,218		54.0
Overage rents		83,713		65,065		18,648		28.7
Other		172,477		86,380		86,097		99.7
Total property revenues		3,256,346		2,111,163		1,145,183		54.2
Property operating expenses:
Real estate taxes		261,331		167,660		93,671		55.9
Repairs and maintenance		238,703		156,401		82,302		52.6
Marketing		78,227		61,571		16,656		27.1
Other property operating costs		510,432		282,498		227,934		80.7
Provision for doubtful accounts		18,725		13,141		5,584		42.5
Total property operating expenses		1,107,418		681,271		426,147		62.6
Real estate property net operating income	$	2,148,928	$	1,429,892	$	719,036		50.3	%

Minimum rents increased $670 million as a result of acquisitions and $42 million largely as a result of Jordan Creek Town Center which opened in August 2004 and Ala Moana Center which was recently redeveloped.

Tenant recoveries and overage rents increased primarily as a result of acquisitions.

Substantially all of the increases in real estate taxes, repairs and maintenance, marketing, other property operating costs and provision for doubtful accounts were attributable to acquisitions.

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Master Planned Communities Segment

	2006			2005			$ Increase		% Increase
	(In thousands)
Land sales	$	508,744		$	468,294		$	40,450		8.6	%
Land sales operations		(378,757	)		(372,641	)		6,116		1.6
Real estate property net operating income	$	129,987		$	95,653		$	34,334		35.9	%

The increase in land sales is substantially due to a single $123 million sale to a home builder at our Summerlin project in December 2006. The increase was offset by lower demand at our Columbia and Fairwood projects. See the table below for additional detail regarding the acres sold and the price per acre sold.

Both real estate property net operating income and real estate property net operating income as a percent of land sales increased over 2005. These increases are primarily due to an increase in the builder participation at our Summerlin development and to an increase in the margin between the cost and the sales prices for developed lots. Lots developed and sold since the TRC Merger have higher profit margins than lots which were finished at the time of the TRC Merger because all lots were marked-to-market at the time of the TRC Merger.

As the new housing market softened throughout 2006, demand at our Summerlin, Columbia and Fairwood projects declined and a number of anticipated sales were cancelled by the builders. Unlike other markets in which builders have a significantly higher supply of unsold homes, demand at Woodlands and Bridgeland, which began sales in the first quarter of 2006, did not decline in 2006. We currently expect these trends to continue through 2007.

	Lot Sales and Pricing				Acreage
							Remaining
					Total Gross		Saleable
	2006		2005		Acres		Acres
	($ in thousands)
Columbia:
Residential:
Acres sold		12.6		28.6				80
Average price/acre	$	1,425	$	1,194
Commercial:
Acres sold		51.7		50.3				337
Average price/acre	$	701	$	438
Acreage						18,000		417
Fairwood:
Residential:
Acres sold		33.9		58.3				148
Average price/acre	$	796	$	656
Commercial:
Acres sold		3.5		—				15
Average price/acre	$	389	$	—
Acreage						1,100		163

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	Lot Sales and Pricing					Acreage
								Remaining
						Total Gross		Saleable
	2006			2005		Acres		Acres
	($ in thousands)
Summerlin(1):
Residential:
Acres sold		251.2			269.7				5,527
Average price/acre	$	1,067		$	860
Commercial:
Acres sold		22.5			10.0				888
Average price/acre	$	251	(2)	$	511
Acreage							22,500		6,415
Bridgeland:
Residential:
Acres sold		64.3			—				5,308
Average price/acre	$	222		$	—
Commercial:
Acres sold		—			—				1,211
Average price/acre	$	—		$	—
Acreage							10,200		6,519
Woodlands(3):
Residential:
Acres sold		288.1			337.3				1,814
Average price/acre	$	374		$	312
Commercial:
Acres sold		96.0			109.9				1,188
Average price/acre	$	397		$	372
Acreage							28,400		3,002

(1)	Summerlin — Does not reflect impact of CSA (Note 14). Average price per acre includes assumption of Special Improvement District financing.
(2)	Summerlin — Includes the effect of a single sale of a 19.1 acre parcel to a school at a price of $25 thousand per acre.
(3)	Woodlands — Shown at 100%. Our share of The Woodlands is 52.5%.

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Average Price per Acre is the aggregate contract price paid for all parcels sold, divided by the relevant number of acres sold and is based on sales closed. This average price can fluctuate widely, depending on location of the parcels within a community and the unit price and density of what is sold. The average price per acre does not include payments received under builders’ price participation agreements, where we may receive additional proceeds post-sale and record those revenues at that later date, based on the final selling price of the home. In some cases, these payments have been significant with respect to the initial lot price. In addition, there will be other timing differences between lot sales and reported revenue due to timing of revenue recognition under generally accepted accounting principles. The above pricing data also does not reflect the impact of income taxes and the CSA (Note 14), which can have a material impact on results.

Residential Acreage includes standard, custom and high density residential land parcels. Standard residential lots are designated for detached and attached single- and multi-family homes, of a broad range, from entry-level to luxury homes. At Summerlin, we have designated certain residential parcels as custom lots as their premium price reflects their larger size and other distinguishing features, such as being within a gated community, having golf course access or being located at higher elevations. High density residential includes townhomes, apartments and condos.

Commercial Acreage is designated for retail, office, services and other for-profit activities, as well as those parcels allocated for use by government, schools, houses of worship and other not-for-profit entities.

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.

Remaining Saleable Acres includes only parcels that are intended for sale. The mix of intended use, as well as amount of remaining saleable acres, is likely to change over time as the master plan for a particular project is developed over time.

2005 compared to 2004

Acquisitions were the reason for the increases in the table below as the properties included in this segment were acquired in the TRC Merger in November 2004.

	2005			2004			$ Increase		% Increase
	(In thousands)
Land sales	$	468,294		$	105,813		$	362,481		342.6	%
Land sales operations		(372,641	)		(103,325	)		269,316		260.6
Real estate property net operating income	$	95,653		$	2,488		$	93,165		3,744.6	%

Certain Significant Consolidated Revenues and Expenses

					$ Increase			% Increase
	2006		2005		(Decrease)			(Decrease)
	(In thousands)
Tenant rents	$	2,602,487	$	2,494,851	$	107,636			4.3	%
Land sales		423,183		385,205		37,978			9.9
Property operating expenses		861,351		868,926		(7,575	)		(0.9	)
Land sales operations		316,453		311,815		4,638			1.5
Management and other fees		115,798		91,022		24,776			27.2
Property management and other costs		184,705		147,012		37,693			25.6
Depreciation and amortization		690,194		672,914		17,280			2.6
Interest expense		1,117,437		1,031,241		86,196			8.4
Provision for income taxes		98,984		51,289		47,695			93.0

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Changes in consolidated tenant rents (which includes minimum rents, tenant recoveries and overage rents), land sales, property operating expenses and land sales operations were attributable to the same items discussed above in our segment basis results except for items related to our Unconsolidated Properties.

Management and other fees increased as a result of higher development fees earned as a result of the increased level of expansion and redevelopment activity in 2006. The increase was also attributed to higher management fees earned from our joint venture partners due to acquisitions and openings of ground up developments.

Property management and other costs increased primarily as a result of higher personnel and personnel-related costs in 2006. These increases were primarily attributable to revised allocations between our operating properties and management cost centers.

The increase in depreciation and amortization is primarily due to an increase in depreciation and amortization as a result of redevelopments, the opening of The Shops at La Cantera in September 2005, acquisition of the remaining interest in GGP Ivanhoe IV, Inc. and a change in depreciable life at one of our properties (Note 2).

The net increase in interest expense is primarily attributable to the following:

•  Increase in interest rates both on new fixed-rate financings and variable-rate debt as a result of increases in the LIBOR rate

•  Lower amortization of purchase accounting mark-to-market adjustments (which reduce interest expense). This amortization is reduced as debt is repaid and refinanced

•  Increased amortization of deferred finance costs as a result of finance costs incurred in conjunction with the 2006 Credit Facility

These increases were partially offset by lower interest expense on our corporate and other unsecured term loans as a result of refinancing activity in February and August 2006 and increased capitalized interest (which reduces interest expense). See Liquidity and Capital Resources for information regarding 2006 financing activity and Item 7A, “Quantitative and Qualitative Disclosures About Market Risk,” for additional information regarding the potential impact of future interest rate increases.

The increase in the provision for income taxes is attributable to higher pre-tax book income subject to taxes at our TRS entities, especially at the properties included in our Master Planned Communities segment. The increase in the provision for income taxes is more significant than the increase in net operating income generated by this segment as certain expenses, including participation expense, are not deductible for tax purposes and the tax basis of properties sold is, generally, significantly lower than the cost of properties sold for financial reporting purposes.

During the first quarter of 2007, we expect to complete an internal restructuring of certain of our operating properties that are currently owned by TRS entities. We currently estimate that the restructuring will reduce our deferred tax liability by approximately $300 million.

	2005		2004		$ Increase		% Increase
	(In thousands)
Tenant rents	$	2,494,851	$	1,585,087	$	909,764		57.4	%
Land sales		385,205		68,643		316,562		461.2
Property operating expenses		868,926		517,869		351,057		67.8
Land sales operations		311,815		66,100		245,715		371.7
Management and other fees		91,022		82,896		8,126		9.8
Property management and other costs		147,012		100,267		46,745		46.6
Depreciation and amortization		672,914		364,854		308,060		84.4
Interest expense		1,031,241		472,185		559,056		118.4
Provision for income taxes		51,289		2,383		48,906		2,052.3

Substantially all of the increases in tenant rents (which includes minimum rents, tenant recoveries and overage rents), land sales, property operating expenses and land sales operations was attributable to acquisitions.

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The increase in management and other fees for 2005, as a result of acquisitions, was offset by the loss of fees resulting from our acquisition of the remaining 50% interest in Town East Mall in March 2004. As Town East Mall is now wholly-owned and consolidated in our results of operations, we no longer receive management or other fees from this property.

Property management and other costs and depreciation and amortization increased in 2005 as compared to 2004 primarily as a result of acquisitions. Because acquisitions are initially recorded at fair value, the depreciable basis and the corresponding depreciation expense for recent acquisitions are generally higher than for properties that we have owned for a longer period of time.

Interest expense increased $496.5 million in 2005 as compared to 2004 as a result of increased debt associated with acquisitions and $62.6 million as a result of higher debt levels primarily as a result of redevelopments, working capital requirements and higher average interest rates during the current year. These increases were partially offset by lower debt extinguishment costs in 2005 as a result of deferred finance cost write-offs in 2004 resulting from TRC Merger funding. The weighted average interest rate on our outstanding debt was 5.64% at December 31, 2005 compared to approximately 5.16% at December 31, 2004. Amortization of purchase accounting adjustments, which increased the fair value of our debt acquired in the TRC Merger, decreased interest expense by approximately $51 million in 2005 and $1 million in 2004.

The increase in the provision for income taxes for 2005 primarily relates to operations acquired in the TRC Merger, including the Master Planned Communities segment, which are conducted by various TRS entities.

Liquidity and Capital Resources

Our primary uses and sources of our consolidated cash are as follows:

Uses	Sources
Short-term:
• Tenant construction allowances • Minor improvements made to individual properties that are not recoverable through common area maintenance charges to tenants • Dividend payments • Debt repayment requirements, including both principal and interest • Stock repurchases • Corporate and administrative expenses	• Operating cash flow, including the distributions of our share of cash flow produced by our Unconsolidated Real Estate Affiliates • Land sales from the Master Planned Communities segment • Borrowings under revolving credit facilities
Longer-term:
• Acquisitions, including Anchor stores available as a result of consolidations• New development, including the Master Planned Communities segment • Major redevelopment, renovation or expansion programs at individual properties • Debt repayment requirements, including both principal and interest • Income tax payments • International expansion	• Secured loans collateralized by individual properties • Unsecured loans at either a venture or company level • Construction loans • Mini-permanent loans • Long-term project financing • Joint venture financing with institutional partners • Equity securities • Asset sales

The sources and uses of cash have generally been the same over the past several years. The decrease in the amount of funds necessary for acquisitions in 2006 and 2005 has been partially offset by the increase in the amount of funds necessary for developments and redevelopments.

Cash Flows from Operating Activities

Net cash provided by operating activities was $816.4 million in 2006, $842.0 million in 2005 and $719.4 million in 2004.

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Land development and acquisitions expenditures, which are related to our Master Planned Communities segment, were $184.3 million in 2006, $140.8 million in 2005 and $27.6 million in 2004. These expenditures will vary from year to year based on the pace of development and expected sales. As discussed above, demand at our Summerlin, Columbia and Fairwood projects declined in 2006 and we expect this trend to continue into 2007. As a result, land development and acquisitions expenditures are also expected to decline in 2007. Expenditures for 2004 reflect only the six week period subsequent to the November 2004 TRC Merger.

Net cash used for working capital needs totaled $72.1 million in 2006, $71.4 million in 2005 and $47.1 million in 2004.

These items were partially offset by higher net income after adjustments to reconcile to net cash provided by operating activities. The increase in 2006 compared to 2005 is primarily attributable to higher real estate net operating income in both our Retail and Other and Master Planned Communities segments, partially offset by higher interest expense and current provision for income taxes. The increase in 2005 compared to 2004 is primarily attributable to acquisitions.

Cash Flows from Investing Activities

Net cash used in investing activities was $210.4 million in 2006, $154.2 million in 2005 and $9.0 billion in 2004.

Net investing cash provided by (used in) our unconsolidated affiliates was $409.9 million in 2006, $191.5 million in 2005 and ($86.0) million in 2004. The changes are primarily attributable to distributions resulting from financing activities by our unconsolidated affiliates.

Cash used for acquisition/development of real estate and property additions/improvements was $699.4 million in 2006, $498.0 million in 2005 and $9.0 billion in 2004. Unlike 2004 which included significant acquisitions, including the TRC Merger, expenditures in 2006 and 2005 were primarily related to development and redevelopment activity. As of December 31, 2006, we had 17 major approved redevelopment projects underway (each with budgeted projected expenditures, at our ownership share, in excess of $10 million) and nine new retail center development projects under construction. Total projected expenditures (including our share of the Unconsolidated Real Estate Affiliates) for these projects were approximately $1.4 billion as of December 31, 2006. We also have eight potential new retail or mixed-use developments.

Cash Flows from Financing Activities

Net cash (used in) provided by financing activities was ($611.6) million in 2006, ($624.6) million in 2005 and $8.3 billion in 2004.

Distributions to common stockholders, holders of Common Units and holders of perpetual and convertible preferred units totaled $510.4 million in 2006, $461.9 million in 2005 and $382.4 million in 2004. Dividends paid per common share were $1.68 in 2006, $1.49 in 2005 and $1.26 in 2004.

On November 17, 2004, we sold 15.9 million shares of our common stock for $512.7 million pursuant to a warrant offering.

On August 3, 2005, we announced that our Board of Directors authorized, effective immediately, a $200 million per fiscal year common stock repurchase program. Stock repurchases under this program may be made through open market or privately negotiated transactions through 2009, unless the program is earlier terminated. The repurchase program gives us the ability to acquire some or all of the shares of common stock to be issued upon the exercise of certain employee stock options and pursuant to the CSA. We repurchased 1.9 million shares for $85.9 million under this program in 2006 and 2.2 million shares for $98.9 million in 2005.

We redeemed perpetual preferred units totaling $183.0 million in 2005 and $107.9 million in 2004.

Principal payments on our debt exceeded new financings by $17.2 million in 2006 whereas new financings exceeded principal payments by $115.3 million in 2005 and $8.3 billion in 2004. The net financing activity in 2004 reflects funding for the TRC Merger.

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Our consolidated debt and our pro rata share of the debt of our Unconsolidated Real Estate Affiliates, after giving effect to interest rate swap agreements, were as follows:

	December 31,
	2006			2005			2004
	(In millions)
Consolidated:
Fixed-rate debt	$	17,838		$	14,789		$	11,860
Variable-rate debt:
Corporate and other unsecured		2,491			4,875			6,200
Other variable-rate debt		193			755			2,251
Total variable-rate debt		2,684			5,630			8,451
Total consolidated	$	20,522		$	20,419		$	20,311
Weighted-average interest rate (excluding deferred finance costs)		5.70	%		5.64	%		5.16	%
Unconsolidated:
Fixed-rate debt	$	3,588		$	2,788		$	2,112
Variable-rate debt		296			455			723
Total Unconsolidated Real Estate Affiliates	$	3,884		$	3,243		$	2,835
Weighted-average interest rate (excluding deferred finance costs)		5.66	%		5.56	%		5.16	%

On February 24, 2006, we amended the 2004 Credit Facility, which was entered into to fund the TRC Merger, and entered into a 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, 2006, $590 million is available to be drawn on the revolving credit facility.

The 2006 Credit Facility has a four year term, with a one year extension option. The interest rate ranges from LIBOR plus 1.15% to LIBOR plus 1.5%, depending on our leverage ratio and assuming we maintain our election to have these loans designated as Eurodollar loans. The interest rate, as of December 31, 2006, was LIBOR plus 1.25%. Quarterly principal payments on the Term Loan of $12.5 million begin March 31, 2007, with the balance due at maturity.

Under the terms of the 2006 Credit Facility, we are subject to customary affirmative and negative covenants. If a default occurs, the lenders will have the option of declaring all outstanding amounts immediately due and payable. Events of default include a failure to maintain our REIT status under the Internal Revenue Code, a failure to remain listed on the New York Stock Exchange and such customary events as nonpayment of principal, interest, fees or other amounts, breach of representations and warranties, breach of covenant, cross-default to other indebtedness and certain bankruptcy events.

Concurrently with the 2006 Credit Facility transaction, we also entered into a $1.4 billion term loan (the “Short Term Loan”) and TRCLP entered into a $500 million term loan (the “Bridge Loan”). The Short Term Loan was repaid in August 2006 as part of various refinancing transactions including the GGP MPTC. The Bridge Loan was fully repaid in May 2006 with a portion of the proceeds obtained from the sale of $800 million of senior unsecured notes which were issued by TRCLP. These notes provide for semi-annual, interest-only payments at a rate of 6.75% and payment of the principal in full on May 1, 2013.

Also concurrently with the 2006 Credit Facility transaction, GGP Capital Trust  I, a Delaware statutory trust (the “Trust”) and a wholly-owned subsidiary of GGPLP, completed a private placement of $200 million of trust preferred securities (“TRUPS”). The Trust also issued $6.2 million of Common Securities 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%.

44

Although agreements to refinance debt maturing in 2007 have not yet been reached, we currently anticipate that all of our debt will be repaid or refinanced on a timely basis. We believe that we have sufficient sources of funds to meet our cash needs and that covenants in the 2006 Credit Facility will not materially impact our liquidity or our ability to operate our business. However, there can be no assurance that we can obtain such financing on satisfactory terms. We will continue to monitor our capital structure, investigate potential investments or joint venture partnership arrangements and purchase additional properties if they can be acquired and financed on terms that we reasonably believe will enhance long-term stockholder value.

Certain properties are subject to financial performance covenants, primarily debt service coverage ratios. We believe we are in compliance with all such covenants as of December 31, 2006.

We have not generally guaranteed the debt of the Unconsolidated Real Estate Affiliates, however, certain Consolidated Properties are cross-collateralized with Unconsolidated Properties (Note 5) and we have retained or agreed to be responsible for a portion of certain debt of the Unconsolidated Real Estate Affiliates (Note 5).

Contractual Cash Obligations and Commitments

The following table aggregates our contractual cash obligations and commitments subsequent to December 31, 2006:

	2007		2008		2009		2010		2011		Subsequent		Total
	(In thousands)
Long-term debt-principal(1)	$	1,300,937	$	2,037,804	$	3,230,677	$	3,746,780	$	6,535,402	$	3,556,414	$	20,408,014
Interest payments(2)		1,161,297		1,040,632		896,543		714,977		385,247		779,363		4,978,059
Retained debt-principal		6,847		2,446		2,606		119,694		775		37,742		170,110
Ground lease payments(1)		13,250		13,293		13,317		13,325		13,186		476,762		543,133
Committed real estate acquisition contracts(3)		—		250,000		—		—		—		—		250,000
Purchase obligations(4)		135,933		—		—		—		—		—		135,933
Other long-term liabilities(5)		—		—		—		—		—		—		—
Total	$	2,618,264	$	3,344,175	$	4,143,143	$	4,594,776	$	6,934,610	$	4,850,281	$	26,485,249

(1)	Excludes non-cash purchase accounting adjustments.
(2)	Based on rates as of December 31, 2006. Variable rates are based on a LIBOR rate of 5.35%.
(3)	Reflects $250 million minimum purchase price of the Palazzo (Note 14). We currently expect the actual purchase price to be approximately $600 million.
(4)	Reflects accrued and incurred construction costs payable in our Retail and Other and Master Planned Communities segments. Routine trade payables have been excluded. We expect development and redevelopment expenditures of approximately $1 billion in 2007.
(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 $218.5 million in 2006, $206.2 million in 2005 and $128.3 million in 2004.

We anticipate that all of our debt will be repaid or refinanced on a timely basis. Other than as previously discussed or in conjunction with possible future new developments or acquisitions, there are no current plans to incur additional debt, increase the amounts available under our credit facilities or raise equity capital.

We believe that we have adequate sources of funds if additional capital is required for any of the above listed obligations or for other purposes. However, there can be no assurance that we can obtain such financing on satisfactory terms.

In conjunction with the TRC Merger, we assumed TRC’s obligations under a Contingent Stock Agreement (“CSA”). TRC entered into the CSA in 1996 when they acquired The Hughes Corporation (“Hughes”). This acquisition included various assets, including Summerlin (the “CSA Assets”), a project in our Master Planned Communities segment. We agreed that the TRC Merger would not have a prejudicial effect on the former Hughes

45

owners or their successors (the “Beneficiaries”) with respect to their receipt of securities pursuant to the CSA. We further agreed to indemnify and hold harmless the Beneficiaries against losses arising out of any breach by us of these covenants.

Under the CSA, we are required to issue shares of our common stock semi-annually (February and August) to the Beneficiaries. The number of shares to be issued is based on cash flows from the development and/or sale of the CSA Assets and our stock price. We account for the Beneficiaries’ share of earnings from the CSA Assets as an operating expense. We delivered 1.8 million shares of our common stock (including 1.7 million treasury shares) to the Beneficiaries in 2006 and 1.6 million (including 1.0 million treasury shares) in 2005.

We are also required to make a final distribution to the Beneficiaries in 2009. The amount of this distribution will be based on the appraised values of the CSA Assets and is expected to be significant. We will account for this distribution as additional investments in the related assets (that is, contingent consideration).

The issuance of shares pursuant to any of the semi-annual or final distributions could be dilutive to our existing stockholders if we issue new shares rather than treasury shares or shares purchased on the open market.

Off-Balance Sheet Financing Arrangements

We do not have any off-balance sheet financing arrangements.

REIT Requirements

In order to remain qualified as a real estate investment trust for federal income tax purposes, we must distribute or pay tax on 100% of our capital gains and at least 90% of our ordinary taxable income to stockholders. In determining distributions, the Board of Directors considers operating cash flow.

We anticipate that our operating cash flow and potential new debt or equity will provide adequate liquidity to conduct our operations, fund general and administrative expenses, fund operating costs and interest payments and allow distributions to our stockholders in accordance with the requirements of the Code.

Recently Issued Accounting Pronouncements and Developments

As described in Note 15, new accounting pronouncements have been issued which are effective for the current or subsequent year.

Inflation

Substantially all of our tenant leases contain provisions designed to partially mitigate the negative impact of inflation. Such provisions include clauses enabling us to receive overage rents based on tenants’ gross sales, which generally increase as prices rise, and/or escalation clauses, which generally increase rental rates during the terms of the leases. In addition, many of the leases expire each year which may enable us to replace or renew such expiring leases with new leases at higher rents. Finally, many of the existing leases require the tenants to pay amounts related to all, or substantially all, of their share of certain operating expenses, including common area maintenance, real estate taxes and insurance, thereby partially reducing our exposure to increases in costs and operating expenses resulting from inflation. In general, these amounts either vary annually based on actual expenditures or are set on an initial share of costs with provisions for annual increases.

Inflation also poses a risk to us due to the probability of future increases in interest rates. Such increases would adversely impact us due to our outstanding variable-rate debt. We have limited our exposure to interest rate fluctuations related to a portion of our variable-rate debt by the use of interest rate cap and swap agreements. Finally, subject to current market conditions, we have a policy of replacing variable-rate debt with fixed-rate debt. However, in an increasing interest rate environment the fixed rates we can obtain with such replacement fixed-rate debt will also continue to increase.

46

GLOSSARY

Anchor:  A department store or other large retail store with gross leaseable area greater than 30,000 square feet.

Code:  The Internal Revenue Code of 1986, as amended.

Common Units:  The common units of GGP Limited Partnership held by limited partners.

Company Portfolio:  Includes both the Unconsolidated Properties and the Consolidated Properties.

Consolidated Properties:  Properties in which we own either a majority or a controlling interest and, as a result, are consolidated under GAAP.

CSA:  The Contingent Stock Agreement under which we assumed the obligations of TRC to issue shares of common stock to the beneficiaries thereunder.

Exchange Act:  Securities Exchange Act of 1934, as amended.

Freestanding GLA:  The gross leaseable area of freestanding retail stores in locations that are not attached to the primary complex of buildings that comprise a shopping center, measured in square feet.

Funds From Operations or FFO:  A supplemental measure of operating performance defined by NAREIT as net income (loss) (computed in accordance with GAAP), excluding gains or losses from cumulative effects of accounting changes, extraordinary items and sales of properties, plus real estate related depreciation and amortization and after adjustments for unconsolidated partnerships and joint ventures.

GAAP:  Accounting principles generally accepted in the United States of America.

GGMI:  General Growth Management, Inc., which manages, leases, and performs various services for some of our Unconsolidated Real Estate Affiliates and approximately 30 properties owned by unaffiliated third parties, all located in the United States. GGMI also performs marketing and strategic partnership services at all of our Consolidated Properties.

GGPLP:  GGP Limited Partnership, also referred to as the Operating Partnership, the partnership through which substantially all of our business is conducted.

Gross Leaseable Area or GLA:  Gross leaseable retail space, including Anchors and all other leaseable areas, measured in square feet.

LIBOR:  London Interbank Offered Rate. A widely quoted market rate which is frequently the index used to determine the rate at which we borrow funds.

Mall GLA:  Gross leaseable retail space, excluding both Anchors and Freestanding GLA, measured in square feet.

Mall Stores:  Stores (other than Anchors) that are typically specialty retailers who lease space in the structure including, or attached to, the primary complex of buildings that comprise a shopping center.

MD&A:  The Management’s Discussion and Analysis of Financial Condition and Results of Operations contained in Item 7 of this Annual Report on Form 10-K.

NAREIT:  The National Association of Real Estate Investment Trusts.

NOI:  Real estate property net operating income, the measure of property operating performance used by management. NOI represents the operating revenues of the properties less property operating expenses, exclusive of depreciation and amortization.

Operating Partnership:  GGP Limited Partnership, also referred to as GGPLP, the partnership through which substantially all of our business is conducted.

Overage rent:  Rent paid by the tenant if its sales exceed an agreed upon minimum amount. The amount is calculated by multiplying the sales in excess of the minimum amount by a percentage defined in the applicable lease.

REIT:  A real estate investment trust.

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Remaining Saleable Acres:  Includes only parcels within our Master Planned Communities segment which are intended for sale.

Retail Portfolio:  The retail centers and mixed-use and other properties within our Retail and Other segment.

SEC:  The United States Securities and Exchange Commission.

Significant Tenants:  Any tenant at a community/strip center with gross leaseable area greater than 10,000 square feet.

Total GLA:  The gross leaseable area of Anchor stores plus Mall GLA and Freestanding GLA.

Total Gross Acres:  Includes 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.

Total Mall Stores Sales:  The gross revenue from product sales to customers generated by the Mall Stores.

TRC Merger:  The transaction in which we acquired The Rouse Company, a real estate development and management company, on November 12, 2004.

TRCLP:  The Rouse Company LP.

TRS:  An entity that has elected to be treated as taxable REIT subsidiary.

Unconsolidated Properties:  Properties owned by Unconsolidated Real Estate Affiliates and which are unconsolidated under GAAP.

Unconsolidated Real Estate Affiliates:  Joint venture entities in which we own a non-controlling interest.

48

Item 7A.   Quantitative and Qualitative Disclosures about Market Risk

We are subject to market risk associated with changes in interest rates both in terms of variable-rate debt and the price of new fixed-rate debt upon maturity of existing debt and for acquisitions. As of December 31, 2006, we had consolidated debt of $20.5 billion, including $3.5 billion of variable-rate debt of which approximately $820.0 million was subject to interest rate swap agreements, which fixed the interest rate we are required to pay on such debt at approximately 4.27% per annum (excluding the impact of deferred finance costs). Although the majority of the remaining variable-rate debt is subject to interest rate cap agreements pursuant to the loan agreements and financing terms, such interest rate caps generally limit our interest rate exposure only if LIBOR exceeds a rate per annum significantly higher (generally above 8% per annum) than current LIBOR rates (5.35% at December 31, 2006). A 25 basis point movement in the interest rate on the $2.7 billion of variable-rate debt which is not subject to interest rate swap agreements would result in an approximately $6.7 million annualized increase or decrease in consolidated interest expense and operating cash flows.

In addition, we are subject to interest rate exposure as a result of variable-rate debt collateralized by the Unconsolidated Properties for which similar interest rate swap agreements have not been obtained. Our share (based on our respective equity ownership interests in the Unconsolidated Real Estate Affiliates) of such remaining variable-rate debt was approximately $295.6 million at December 31, 2006. A similar 25 basis point annualized movement in the interest rate on the variable-rate debt of the Unconsolidated Real Estate Affiliates would result in an approximately $0.7 million annualized increase or decrease in our equity in the income and operating cash flows from Unconsolidated Real Estate Affiliates.

We are further subject to interest rate risk with respect to our fixed-rate financing in that changes in interest rates will impact the fair value of our fixed-rate financing. To determine fair value, the fixed-rate debt is discounted at a rate based on an estimate of current lending rates, assuming the debt is outstanding through maturity and considering the collateral. At December 31, 2006, the fair value of our debt is estimated to be approximately $150 million lower than the carrying value of $20.5 billion. If LIBOR were to increase by 25 basis points, the fair value of our debt would be approximately $320 million lower than the carrying value and the fair value of our swap agreements would increase by approximately $0.9 million. For additional information concerning our debt, reference is made to Item 7, Liquidity and Capital Resources and Note 6.

We have not entered into any transactions using derivative commodity instruments.

Item 8.   Financial Statements and Supplementary Data

Reference is made to the Consolidated Financial Statements and Consolidated Financial Statement Schedule beginning on page F-1 for the required information.

Item 9.   Changes in and Disagreements with Accountants on Accounting and Financial Disclosure

None.

Item 9A.   Controls and Procedures

Disclosure Controls and Procedures  As of the end of the period covered by this report, we carried out an evaluation, under the supervision and with the participation of our management, including the Chief Executive Officer (“CEO”) and Chief Financial Officer (“CFO”), of the effectiveness of the design and operation of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15(d)-15(e) under the Securities Exchange Act of 1934, as amended, (the “Exchange Act”)). Based on that evaluation, the CEO and the CFO have concluded that our disclosure controls and procedures are effective to ensure that information that we are required to disclose in the reports we file or submit under the Exchange Act, is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission rules and forms.

Internal Controls over Financial Reporting  During the fourth quarter, we completed the remediation of the material weaknesses in internal control relating to our financial close process and accounting for income taxes identified as of December 31, 2005. There have been no other changes in our internal controls during our most recently completed fiscal quarter that have materially affected or are reasonably likely to materially affect our

49

internal control over financial reporting or in other factors that could significantly affect internal controls subsequent to the end of the period covered by this report.

MANAGEMENT’S REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING

Our management is responsible for establishing and maintaining adequate internal control over financial reporting. Our internal control over financial reporting is a process designed under the supervision of our principal executive and principal financial officers to provide reasonable assurance regarding the reliability of financial reporting and preparation of our financial statements for external reporting purposes in accordance with generally accepted accounting principles in the U.S.

As of December 31, 2006, we conducted an assessment of the effectiveness of our internal control over financial reporting based on the framework utilizing the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission in “Internal Controls — Integrated Framework.” Based on this assessment, management believes that, as of December 31, 2006, the Company maintained effective internal controls over financial reporting.

Deloitte & Touche LLP, the Company’s independent registered public accounting firm, audited management’s assessment of the effectiveness of internal control over financial reporting as of December 31, 2006 and, based on that audit, issued the report set forth herein.

50

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Directors and Stockholders of
General Growth Properties, Inc.
Chicago, Illinois

We have audited management’s assessment, included in the accompanying Management’s Report on Internal Control Over Financial Reporting, that General Growth Properties, Inc. and subsidiaries (the “Company”) maintained effective internal control over financial reporting as of December 31, 2006, based on criteria established in Internal Control — Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission. The Company’s management is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting. Our responsibility is to express an opinion on management’s assessment and an opinion on the effectiveness of the Company’s internal control over financial reporting based on our audit.

We conducted our audit 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 effective internal control over financial reporting was maintained in all material respects. Our audit included obtaining an understanding of internal control over financial reporting, evaluating management’s assessment, testing and evaluating the design and operating effectiveness of internal control, and performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinions.

A company’s internal control over financial reporting is a process designed by, or under the supervision of, the company’s principal executive and principal financial officers, or persons performing similar functions, and effected by the company’s board of directors, management, and other personnel to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.

Because of the inherent limitations of internal control over financial reporting, including the possibility of collusion or improper management override of controls, material misstatements due to error or fraud may not be prevented or detected on a timely basis. Also, projections of any evaluation of the effectiveness of the internal control over financial reporting to future periods are subject to the risk that the controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

In our opinion, management’s assessment that the Company maintained effective internal control over financial reporting as of December 31, 2006, is fairly stated, in all material respects, based on the criteria established in Internal Control — Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission. Also in our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of December 31, 2006, based on the criteria established in Internal Control — Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission.

We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), the consolidated financial statements and consolidated financial statement schedule as of and for the year ended December 31, 2006 of the Company and our reports dated February 28, 2007 expressed an unqualified opinion on those consolidated financial statements and consolidated financial statement schedule.

Deloitte & Touche LLP

Chicago, Illinois
February 28, 2007

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Item 9B.   Other Information

Not applicable.

PART III

Item 10.   Directors, Executive Officers and Corporate Governance

The information which appears under the captions “Election of Class III Directors,” “Executive Officers,” “Corporate Governance-Committees of the Board of Directors-Audit Committee” and “-Nominating & Governance Committee” and “Other Information-Section 16(a) Beneficial Ownership Reporting Compliance” in our proxy statement for our 2007 Annual Meeting of Stockholders is incorporated by reference into this Item 10.

We have a Code of Business Conduct and Ethics which applies to all of our employees, officers and directors, including our Chairman, Chief Executive Officer and Chief Financial Officer. The Code of Business Conduct and Ethics is available on the Corporate Governance page of our website at www.ggp.com and we will provide a copy of the Code of Business Conduct and Ethics without charge to any person who requests it in writing to: General Growth Properties, Inc., 110 N. Wacker Dr., Chicago, IL 60606, Attn: Director of Investor Relations. We will post on our website amendments to or waivers of our Code of Ethics for executive officers, in accordance with applicable laws and regulations.

Our Chief Executive Officer and Chief Financial Officer have signed certificates under Sections 302 and 906 of the Sarbanes-Oxley Act, which are filed as Exhibits 31.1 and 31.2 and 32.1 and 32.2, respectively, to this Annual Report. In addition, our Chief Executive Officer submitted his most recent annual certification to the NYSE pursuant to Section 303A 12(a) of the NYSE listing standards on May 17, 2006, in which he indicated that he was not aware of any violations of NYSE corporate governance listing standards.

Item 11.   Executive Compensation

The information which appears under the caption “Executive Compensation” in our proxy statement for our 2007 Annual Meeting of Stockholders is incorporated by reference into this Item 11; provided, however, that the Report of the Compensation Committee of the Board of Directors on Executive Compensation shall not be incorporated by reference herein, in any of our previous filings under the Securities Act of 1933, as amended, or the Exchange Act, or in any of our future filings.

Item 12.   Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters

The information which appears under the captions “Executive Officer and Beneficial Owner Information —  Stock Ownership” in our proxy statement for our 2007 Annual Meeting of Stockholders is incorporated by reference into this Item 12.

The following table sets forth certain information with respect to shares of our common stock that may be issued under our equity compensation plans as of December 31, 2006.

					(c)
					Number of Securities
	(a)		(b)		Remaining Available for
	Number of Securities to		Weighted-Average		Future Issuance Under
	be Issued upon Exercise		Exercise Price of		Equity Compensation Plans
	of Outstanding Options,		Outstanding Options,		(Excluding Securities
Plan Category	Warrants and Rights		Warrants and Rights		Reflected in Column (a))
Equity compensation plans approved by security holders(1)		4,796,839	$	40.83		9,851,161	(2)
Equity compensation plans not approved by security holders(3)		N/A		N/A		122,104
Total		4,796,839	$	40.83		9,973,265

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(1)	Includes shares of common stock under the 1993 Stock Incentive Plan (which terminated on April 4, 2003), the 1998 Incentive Stock Plan and the 2003 Incentive Stock Plan.
(2)	Includes 5,531,500 shares of common stock available for issuance under the 2003 Incentive Stock Plan and 4,319,661 shares of common stock available for issuance under the 1998 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. Under New York Stock Exchange rules then in effect, stockholder approval was not required for the Employee Stock Purchase Plan because it is a broad-based plan available generally to all employees.

Item 13.   Certain Relationships, Related Transactions and Director Independence

The information which appears under the caption “Corporate Governance — Director Independence,” “— Certain Relationships,” and “— Related Party Transactions,” in our proxy statement for our 2007 Annual Meeting of Stockholders is incorporated by reference into this Item 13.

Item 14.   Principal Accounting Fees and Services

The information which appears under the caption “Audit Related Matters — Audit Fees and Services” and “— Audit Committee’s Pre-Approval Policies and Procedures” in our proxy statement for our 2007 Annual Meeting of Stockholders is incorporated by reference into this Item 14.

PART IV

Item 15.   Exhibits and Financial Statement Schedules

(a) Financial Statements and Financial Statement Schedules.

The consolidated financial statements and schedule listed in the accompanying Index to Consolidated Financial Statements and Consolidated Financial Statement Schedule are filed as part of this Annual Report.

(b) Exhibits.

See Exhibit Index on page S-1.

(c) Separate financial statements.

Not applicable.

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SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

General Growth Properties, Inc.

/s/  John Bucksbaum

John Bucksbaum

Chief Executive Officer

February 28, 2007

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.

Signature	Title	Date
/s/  Matthew Bucksbaum Matthew Bucksbaum	Chairman of the Board	February 28, 2007
/s/  John Bucksbaum John Bucksbaum	Director and Chief Executive Officer (Principal Executive Officer)	February 28, 2007
/s/  Robert Michaels Robert Michaels	Director, President and Chief Operating Officer	February 28, 2007
/s/  Bernard Freibaum Bernard Freibaum	Director, Executive Vice President and Chief Financial Officer (Principal Financial and Accounting Officer)	February 28, 2007
/s/  Alan Cohen Alan Cohen	Director	February 28, 2007
/s/  Anthony Downs Anthony Downs	Director	February 28, 2007
/s/  Adam Metz Adam Metz	Director	February 28, 2007
/s/  Thomas Nolan, Jr. Thomas Nolan, Jr.	Director	February 28, 2007
/s/  John Riordan John Riordan	Director	February 28, 2007
/s/  Beth Stewart Beth Stewart	Director	February 28, 2007

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INDEX TO CONSOLIDATED FINANCIAL STATEMENTS
AND CONSOLIDATED FINANCIAL STATEMENT SCHEDULE

The following consolidated financial statements and consolidated financial statement schedule are included in Item 8 of this Annual Report on Form 10-K:

	Page
	Number
Consolidated Financial Statements
Reports of Independent Registered Public Accounting Firms:
General Growth Properties, Inc.		F-2
GGP/Homart, Inc.		F-3
GGP/Homart II L.L.C.		F-4
GGP-TRS L.L.C.		F-5
Consolidated Balance Sheets as of December 31, 2006 and 2005		F-6
Consolidated Statements of Income and Comprehensive Income for the years ended December 31, 2006, 2005 and 2004		F-7
Consolidated Statements of Stockholders’ Equity for the years ended December 31, 2006, 2005 and 2004		F-8
Consolidated Statements of Cash Flows for the years ended December 31, 2006, 2005 and 2004		F-9
Notes to Consolidated Financial Statements:
Note 1 Organization		F-11
Note 2 Summary of Significant Accounting Policies		F-12
Note 3 Intangibles		F-20
Note 4 Discontinued Operations and Gains (Losses) on Dispositions of Interests in Operating Properties		F-21
Note 5 Unconsolidated Real Estate Affiliates		F-21
Note 6 Mortgage Notes and Other Property Debt Payable		F-32
Note 7 Income Taxes		F-34
Note 8 Rentals under Operating Leases		F-37
Note 9 Transactions with Affiliates		F-37
Note 10 Stock-Based Compensation Plans and Other Stock-Based Activity		F-37
Note 11 Other Assets and Liabilities		F-41
Note 12 Minority Interests		F-42
Note 13 Accumulated Other Comprehensive Income (Loss)		F-44
Note 14 Commitments and Contingencies		F-44
Note 15 Recently Issued Accounting Pronouncements		F-45
Note 16 Segments		F-47
Note 17 Quarterly Financial Information (Unaudited)		F-52
Consolidated Financial Statement Schedule
Report of Independent Registered Public Accounting Firm		F-54
Schedule III — Real Estate and Accumulated Depreciation		F-55

All other schedules are omitted since the required information is either not present in any amounts, is not present in amounts sufficient to require submission of the schedule or because the information required is included in the consolidated financial statements and related notes.

F-1

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Directors and Stockholders of
General Growth Properties, Inc.
Chicago, Illinois

We have audited the accompanying consolidated balance sheets of General Growth Properties, Inc. and subsidiaries (the “Company”) as of December 31, 2006 and 2005, and the related consolidated statements of income and comprehensive income, stockholders’ equity, and cash flows for each of the three years in the period ended December 31, 2006. These 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 did not audit the consolidated financial statements of GGP/Homart, Inc., GGP/Homart II L.L.C., and GGP-TRS L.L.C., the Company’s investments in which are accounted for by use of the equity method. The Company’s equity (deficit) of $(104,853,000) and $70,175,000 in GGP/Homart, Inc.’s net assets as of December 31, 2006 and 2005, respectively, and of $30,204,000, $31,425,000, and $21,148,000 in GGP/Homart, Inc.’s net income for each of the three years in the respective period ended December 31, 2006 are included in the accompanying financial statements. The Company’s equity of $81,926,000 and $259,716,000 in GGP/Homart II L.L.C.’s net assets as of December 31, 2006 and 2005, respectively, and of $16,839,000, $33,849,000, and $36,724,000 in GGP/Homart II L.L.C.’s net income for each of the three years in the respective period ended December 31, 2006 are included in the accompanying financial statements. The Company’s equity (deficit) of $(30,170,000) and $3,764,000 in GGP-TRS L.L.C.’s net assets as of December 31, 2006 and 2005, respectively, and of $15,004,000 and $19,308,000 in GGP-TRS L.L.C.’s net income for each of the two years in the respective period ended December 31, 2006 are included in the accompanying financial statements. The financial statements of GGP/Homart, Inc., GGP/Homart II L.L.C., and GGP-TRS L.L.C. were audited by other auditors related to the periods listed above whose reports have been furnished to us, and our opinion, insofar as it relates to the amounts included for such companies, is based solely on the report of the other auditors.

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. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes 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 and the reports of the other auditors provide a reasonable basis for our opinion.

In our opinion, based on our audits and the reports of the other auditors, such consolidated financial statements present fairly, in all material respects, the financial position of General Growth Properties, Inc. and subsidiaries at December 31, 2006 and 2005, and the results of their operations and their cash flows for each of the three years in the period ended December 31, 2006, in conformity with accounting principles generally accepted in the United States of America.

We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), the effectiveness of the Company’s internal control over financial reporting as of December 31, 2006, based on the criteria established in Internal Control — Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission and our report dated February 28, 2007 expressed an unqualified opinion on management’s assessment of the effectiveness of the Company’s internal control over financial reporting and an unqualified opinion on the effectiveness of the Company’s internal control over financial reporting based on our audits.

Deloitte & Touche LLP

Chicago, Illinois
February 28, 2007

F-2

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

The Stockholders
GGP/Homart, Inc.:

We have audited the consolidated balance sheets of GGP/Homart, Inc. (a Delaware Corporation) and subsidiaries (the Company) 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 (not presented separately herein). These consolidated financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these consolidated financial statements based on our audits.

We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes 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, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of GGP/Homart, Inc. and subsidiaries as of December 31, 2006 and 2005, and the results of their operations and their cash flows for each of the years in the three-year period ended December 31, 2006, in conformity with U.S. generally accepted accounting principles.

KPMG LLP

Chicago, Illinois
February 27, 2007

F-3

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To Members
GGP/Homart II L.L.C.:

We have audited the consolidated balance sheets of GGP/Homart II L.L.C. (a Delaware Limited Liability Company) and subsidiaries (the Company) as of December 31, 2006 and 2005, 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, 2006 (not presented separately herein). These consolidated financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these consolidated financial statements based on our audits.

We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes 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, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of GGP/Homart II L.L.C. and subsidiaries as of December 31, 2006 and 2005, and the results of their operations and their cash flows for each of the years in the three-year period ended December 31, 2006, in conformity with U.S. generally accepted accounting principles.

KPMG LLP

Chicago, Illinois
February 27, 2007

F-4

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

Members GGP-TRS L.L.C.:

We have audited the consolidated balance sheets of GGP — TRS L.L.C. (a Delaware limited liability company) and subsidiaries as of December 31, 2006 and 2005, and the related consolidated statements of operations, changes in members’ capital, and cash flows for the years then ended (not presented separately herein). These consolidated financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these consolidated financial statements based on our audits.

We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.

In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of GGP — TRS L.L.C. and subsidiaries as of December 31, 2006 and 2005, and the result of their operations and their cash flows for the years then ended, in conformity with U.S. generally accepted accounting principles.

KPMG LLP

Chicago, Illinois
February 27, 2007

F-5

GENERAL GROWTH PROPERTIES, INC.
CONSOLIDATED BALANCE SHEETS

	December 31,
	2006			2005
	(Dollars in thousands)
Assets
Investment in real estate:
Land	$	2,952,477		$	2,826,766
Buildings and equipment		19,379,386			18,739,445
Less accumulated depreciation		(2,766,871	)		(2,104,956	)
Developments in progress		673,900			369,520
Net property and equipment		20,238,892			19,830,775
Investment in and loans to/from Unconsolidated Real Estate Affiliates		1,499,036			1,818,097
Investment land and land held for development and sale		1,655,838			1,651,063
Net investment in real estate		23,393,766			23,299,935
Cash and cash equivalents		97,139			102,791
Accounts and notes receivable, net		328,890			293,351
Insurance recovery receivable		14,952			63,382
Goodwill		371,674			420,624
Deferred expenses, net		252,190			209,825
Prepaid expenses and other assets		782,834			917,111
Total assets	$	25,241,445		$	25,307,019
Liabilities and Stockholders’ Equity
Mortgage notes and other property debt payable	$	20,521,967		$	20,418,875
Investment in and loans to/from Unconsolidated Real Estate Affiliates		172,421			17,971
Deferred tax liabilities		1,302,205			1,286,576
Accounts payable and accrued expenses		1,050,192			1,014,443
Total liabilities		23,046,785			22,737,865
Minority interests:
Preferred		182,828			205,944
Common		347,753			430,292
Total minority interests		530,581			636,236
Commitments and Contingencies
Preferred Stock: $100 par value; 5,000,000 shares authorized; none issued and outstanding		—			—
Stockholders’ Equity:
Common stock: $.01 par value; 875,000,000 shares authorized, 242,357,416 and 239,865,045 shares issued as of December 31, 2006 and 2005, respectively		2,424			2,399
Additional paid-in capital		2,536,112			2,469,262
Retained earnings (accumulated deficit)		(868,391	)		(518,555	)
Unearned compensation-restricted stock		(2,214	)		(280	)
Accumulated other comprehensive income		9,582			10,454
Less common stock in treasury, 290,787 and 668,396 shares, at cost at December 31, 2006 and 2005, respectively		(13,434	)		(30,362	)
Total stockholders’ equity		1,664,079			1,932,918
Total liabilities and stockholders’ equity	$	25,241,445		$	25,307,019

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

F-6

GENERAL GROWTH PROPERTIES, INC.
CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME

	Years Ended December 31,
	2006			2005			2004
	(Dollars in thousands, except for per share amounts)
Revenues:
Minimum rents	$	1,753,508		$	1,670,387		$	1,058,732
Tenant recoveries		773,034			754,836			472,250
Overage rents		75,945			69,628			54,105
Land sales		423,183			385,205			68,643
Management and other fees		115,798			91,022			82,896
Other		114,815			101,626			63,255
Total revenues		3,256,283			3,072,704			1,799,881
Expenses:
Real estate taxes		218,549			206,193			128,114
Repairs and maintenance		199,078			195,292			123,251
Marketing		48,626			63,522			48,220
Other property operating costs		373,020			390,051			207,909
Land sales operations		316,453			311,815			66,100
Provision for doubtful accounts		22,078			13,868			10,375
Property management and other costs		184,705			147,012			100,267
General and administrative		15,128			13,053			9,499
Depreciation and amortization		690,194			672,914			364,854
Total expenses		2,067,831			2,013,720			1,058,589
Operating income		1,188,452			1,058,984			741,292
Interest income		11,585			10,416			3,227
Interest expense		(1,117,437	)		(1,031,241	)		(472,185	)
Income before income taxes, minority interest and equity in income of unconsolidated affiliates		82,600			38,159			272,334
Provision for income taxes		(98,984	)		(51,289	)		(2,383	)
Minority interest		(37,761	)		(43,989	)		(105,274	)
Equity in income of unconsolidated affiliates		114,241			120,986			88,191
Income from continuing operations		60,096			63,867			252,868
Discontinued operations, net of minority interests:
Income from operations		—			6,568			3,813
Gains (losses) on dispositions		(823	)		5,118			11,171
Income (loss) from discontinued operations		(823	)		11,686			14,984
Net income	$	59,273		$	75,553		$	267,852
Basic Earnings Per Share:
Continuing operations	$	0.25		$	0.27		$	1.15
Discontinued operations		—			0.05			0.07
Total basic earnings per share	$	0.25		$	0.32		$	1.22
Diluted Earnings Per Share:
Continuing operations	$	0.24		$	0.27		$	1.15
Discontinued operations		—			0.05			0.06
Total diluted earnings per share	$	0.24		$	0.32		$	1.21
Comprehensive Income, Net:
Net income	$	59,273		$	75,553		$	267,852
Other comprehensive income, net of minority interest:
Net unrealized gains (losses) on financial interests		(3,316	)		9,554			10,992
Accrued pension adjustment		(2	)		(374	)		102
Foreign currency translation		2,728			4,920			1,590
Unrealized gains (losses) on available-for-sale securities		(282	)		39			(94	)
Total other comprehensive income (loss), net of minority interest		(872	)		14,139			12,590
Comprehensive income, net	$	58,401		$	89,692		$	280,442

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

F-7

GENERAL GROWTH PROPERTIES, INC.

CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY

									Notes
						Retained			Receivable-			Unearned			Accumulated
			Additional			Earnings			Common			Compensation			Other						Total
	Common		Paid-In			(Accumulated			Stock			Restricted			Comprehensive			Treasury			Stockholders’
	Stock		Capital			Deficit)			Purchase			Stock			Income (Loss)			Stock			Equity
	(Dollars in thousands)
Balance, January 1, 2004	$	2,173	$	1,913,447		$	(220,512	)	$	(6,475	)	$	(1,949	)	$	(16,275	)	$	—		$	1,670,409
Net income							267,852															267,852
Cash distributions declared ($1.26 per share)							(274,851	)														(274,851	)
Conversion of operating partnership units to common stock (179,987 common shares)		2		1,371																		1,373
Conversion of convertible preferred units to common stock (456,463 common shares)		4		9,297																		9,301
Issuance of common stock, net of employee stock option loan/repayments (16,793,656 common shares)		168		530,920						1,297												532,385
Restricted stock grant, net of compensation expense													889									889
Other comprehensive income																12,590						12,590
Adjustment for minority interest in operating partnership				(76,798	)																	(76,798	)
Balance, December 31, 2004	$	2,347	$	2,378,237		$	(227,511	)	$	(5,178	)	$	(1,060	)	$	(3,685	)	$	—			2,143,150
Net income							75,553															75,553
Cash distributions declared ($1.49 per share)							(353,665	)														(353,665	)
Conversion of operating partnership units to common stock (2,470,368 common shares)		25		23,907																		23,932
Conversion of convertible preferred units to common stock (729,890 common shares)		7		14,330																		14,337
Issuance of common stock, net of employee stock option loan/repayments (1,322,720 common shares) (545,204 treasury shares)		13		40,135			(7,892	)		5,178									24,522			61,956
Tax benefit from stock option exercises				3,328																		3,328
Shares issued pursuant to CSA (551,985 common shares) (1,000,400 treasury shares)		6		19,393			(5,040	)											44,696			59,055
Restricted stock grant, net of compensation expense (66,000 common shares)		1		2,336									780									3,117
Purchase of treasury stock (2,214,000 treasury shares)																			(99,580	)		(99,580	)
Other comprehensive income																14,139						14,139
Adjustment for minority interest in operating partnership				(12,404	)																	(12,404	)
Balance, December 31, 2005	$	2,399	$	2,469,262		$	(518,555	)	$	—		$	(280	)	$	10,454		$	(30,362	)	$	1,932,918
Net income							59,273															59,273
Cash distributions declared ($1.68 per share)							(403,831	)														(403,831	)
Conversion of operating partnership units to common stock (808,173 common shares)		8		5,784																		5,792
Conversion of convertible preferred units to common stock (526,464 common shares)		5		10,021																		10,026
Issuance of common stock (971,238 common shares) (563,185 treasury shares)		10		34,333			(5,278	)											26,018			55,083
Tax benefit from stock option exercises				267																		267
Shares issued pursuant to CSA (87,495 common shares) (1,727,524 treasury shares)		1		4,895															76,835			81,731
Restricted stock grant, net of compensation expense (99,000 common shares)		1		4,741									(1,934	)								2,808
Purchase of treasury stock (1,913,100 treasury shares)																			(85,925	)		(85,925	)
Other comprehensive income																(872	)					(872	)
Adjustment for minority interest in operating partnership				6,809																		6,809
Balance, December 31, 2006	$	2,424	$	2,536,112		$	(868,391	)	$	—		$	(2,214	)	$	9,582		$	(13,434	)	$	1,664,079

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

F-8

GENERAL GROWTH PROPERTIES, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

	Years Ended December 31,
	2006			2005			2004
	(In thousands)
Cash Flows from Operating Activities:
Net income	$	59,273		$	75,553		$	267,852
Adjustments to reconcile net income to net cash provided by operating activities:
Minority interests, including discontinued operations		37,761			45,488			106,233
Equity in income of unconsolidated affiliates		(114,241	)		(120,986	)		(88,191	)
Provision for doubtful accounts, including discontinued operations		22,078			13,876			10,375
Distributions received from unconsolidated affiliates		111,864			119,602			87,906
Depreciation, including discontinued operations		663,523			657,358			348,303
Amortization, including discontinued operations		42,750			30,536			28,753
Amortization of debt market rate adjustment		(32,153	)		(47,015	)		(1,026	)
(Gain) loss on disposition		823			(5,118	)		(11,171	)
Participation expense pursuant to Contingent Stock Agreement		110,740			106,285			8,513
Land development and acquisitions expenditures		(184,302	)		(140,823	)		(27,563	)
Cost of land sales		175,184			181,301			51,659
Debt assumed by purchasers of land		(5,640	)		(11,371	)		(318	)
Deferred income taxes		58,252			28,596			1,993
Proceeds from the sale of marketable securities		4,982			27,740			7,954
Straight-line rent amortization		(34,176	)		(33,994	)		(14,810	)
Above and below market tenant lease amortization, including discontinued operations		(39,661	)		(34,304	)		(27,592	)
Other intangible amortization		6,568			10,683			1,650
Net changes:
Accounts and notes receivable		(23,091	)		(51,131	)		(6,367	)
Prepaid expenses and other assets		28,165			(69,379	)		15,962
Deferred expenses		(46,741	)		(73,048	)		(43,485	)
Accounts payable and accrued expenses		(30,434	)		122,208			(13,171	)
Other, net		4,827			9,921			15,917
Net cash provided by operating activities		816,351			841,978			719,376
Cash Flows from Investing Activities:
Acquisition/development of real estate and property additions/improvements		(699,403	)		(497,977	)		(9,000,108	)
Proceeds from sales of investment properties		23,117			143,543			65,268
Increase in investments in unconsolidated affiliates		(285,747	)		(195,642	)		(211,247	)
(Increase) decrease in restricted cash		12,017			(22,950	)		(1,951	)
Insurance recoveries		28,359			5,000			—
Distributions received from unconsolidated affiliates in excess of income		627,869			260,639			134,116
Loans from unconsolidated affiliates, net		67,821			126,500			(8,884	)
Other, net		15,567			26,690			1,991
Net cash used in investing activities		(210,400	)		(154,197	)		(9,020,815	)
Cash Flows from Financing Activities:
Cash distributions paid to common stockholders		(403,831	)		(353,665	)		(274,851	)
Cash distributions paid to holders of Common Units		(88,992	)		(80,885	)		(70,412	)
Cash distributions paid to holders of perpetual and convertible preferred units		(17,546	)		(27,329	)		(37,152	)
Proceeds from issuance of common stock, including from common stock plans		49,267			45,208			531,976
Purchase of treasury stock		(85,925	)		(98,939	)		—
Redemption of preferred minority interests		—			(183,000	)		(107,923	)
Proceeds from issuance of mortgage notes and other property debt payable		9,366,183			3,907,254			12,733,339
Principal payments on mortgage notes and other property debt payable		(9,383,378	)		(3,791,978	)		(4,430,532	)
Deferred financing costs		(38,916	)		(6,984	)		(13,408	)
Other, net		(8,465	)		(34,253	)		(694	)
Net cash (used in) provided by financing activities		(611,603	)		(624,571	)		8,330,343
Net change in cash and cash equivalents		(5,652	)		63,210			28,904
Cash and cash equivalents at beginning of period		102,791			39,581			10,677
Cash and cash equivalents at end of period	$	97,139		$	102,791		$	39,581

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

F-9

GENERAL GROWTH PROPERTIES, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS (Continued)

	Years Ended December 31,
	2006		2005			2004
	(In thousands)
Supplemental Disclosure of Cash Flow Information:
Interest paid	$	1,170,929	$	1,074,874		$	424,380
Interest capitalized		58,019		54,260			11,272
Taxes paid		34,743		8,170			390
Non-Cash Investing and Financing Activities:
Common stock issued in exchange for Operating Partnership Units	$	5,792	$	23,932		$	1,373
Common stock issued in exchange for convertible preferred units		10,026		14,337			9,301
Assumption of debt in conjunction with acquisition of property		—		—			134,902
Common stock issued pursuant to Contingent Stock Agreement		81,731		59,055			—
Operating Partnership Units issued as consideration for purchase of real estate		—		—			25,132
Acquisitions:
Fair value of assets acquired		169,415		(134,166	)		14,327,519
Liabilities assumed		169,415		(125,925	)		7,176,675

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

F-10

GENERAL GROWTH PROPERTIES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Note 1   Organization

General

General Growth Properties, Inc. (“GGP”), a Delaware corporation, is a self-administered and self-managed real estate investment trust, referred to as a “REIT.” GGP was organized in 1986 and through its subsidiaries and affiliates operates, develops and manages retail and other rental properties, primarily shopping centers, which are located primarily throughout the United States. As of December 31, 2006, GGP also has international investments through unconsolidated real estate affiliates in Brazil, Turkey and Costa Rica totaling approximately $128.0 million. Additionally, GGP develops and sells land for residential, commercial and other uses primarily in large-scale, long-term master planned communities projects in and around Columbia, Maryland; Summerlin, Nevada; and Houston, Texas. In these notes, the terms “we,” “us” and “our” refer to GGP and its subsidiaries (the “Company”).

Substantially all of our business is conducted through GGP Limited Partnership (the “Operating Partnership” or “GGPLP”). As of December 31, 2006, ownership of the Operating Partnership was as follows:

82	%	General Growth, as sole general partner
16		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	%

The Operating Partnership also has preferred units of limited partnership interest (the “Preferred Units”) outstanding. Under certain circumstances, the Preferred Units are convertible into Common Units which are redeemable for shares of GGP common stock on a one-for-one basis.

In addition to holding ownership interests in various joint ventures, the Operating Partnership generally conducts its operations through the following subsidiaries:

•  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. Effective July 1, 2006, GGMI also performs tenant related marketing and strategic partnership services at all of our Consolidated Properties.

In this report, we refer to our ownership interests in majority-owned or controlled properties as “Consolidated Properties”, to 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.

Shareholder Rights Plan

We have a shareholder rights plan which will impact a potential acquirer unless the acquirer negotiates with our Board of Directors and the Board of Directors approves the transaction. Pursuant to this plan, one preferred share purchase right (a “Right”) is attached to each currently outstanding or subsequently issued share of our common

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

stock. Prior to becoming exercisable, the Rights trade together with our common stock. In general, the Rights will become exercisable if a person or group acquires or announces a tender or exchange offer for 15% or more of our common stock. Each Right will initially entitle the holder to purchase from GGP one-third of one-thousandth of a share of Series A Junior Participating Preferred Stock, par value $100 per share (the “Preferred Stock”), at an exercise price of $148 per one one-thousandth of a share, subject to adjustment. If a person or group acquires 15% or more of our common stock, each Right will entitle the holder (other than the acquirer) to purchase shares of our common stock (or, in certain circumstances, cash or other securities) having a market value of twice the exercise price of a Right at such time. Under certain circumstances, each Right will entitle the holder (other than the acquirer) to purchase the common stock of the acquirer having a market value of twice the exercise price of a Right at such time. In addition, under certain circumstances, our Board of Directors may exchange each Right (other than those held by the acquirer) for one share of our common stock, subject to adjustment. If the Rights become exercisable, holders of common units of partnership interest in the Operating Partnership, other than GGP, will receive the number of Rights they would have received if their units had been redeemed and the purchase price paid in our common stock. The Rights expire on November 18, 2008, but may be extended or redeemed earlier by our Board of Directors for one-third of $0.01 per Right.

Note 2   Summary of Significant Accounting Policies

Principles of Consolidation

The accompanying Consolidated Financial Statements include the accounts of GGP, 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 are stated at cost. 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.

Our real estate assets, including developments in progress, are reviewed for impairment whenever events or changes in circumstances indicate that the carrying value may not be recoverable. A real estate asset is considered to be impaired when the estimated future undiscounted operating cash flow is less than its carrying value. To the extent an impairment has occurred, the excess of the carrying value of the asset over its estimated fair value will be expensed to operations.

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GENERAL GROWTH PROPERTIES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

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

Acquisitions of Operating Properties

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

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

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

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

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

The excess of the cost of an acquired entity over the net of the amounts assigned to assets acquired (including identified intangible assets) and liabilities assumed is recorded as goodwill. Goodwill is not amortized but is tested for impairment on an annual basis, or more frequently if events or changes in circumstances indicate that the asset might be impaired. An impairment loss for an asset group is allocated to the long-lived assets of the group on a pro-rata basis using the relative carrying amounts of those assets, unless the fair value of specific components of the reporting group are determinable without undue cost and effort.

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,

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GENERAL GROWTH PROPERTIES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

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. Except for Retained Debt (as described in Note 5), differences between the carrying value of our investment in the 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 a 5% interest and have virtually no influence on the joint venture’s operating and financial policies, we account for our investments using the cost method.

Cash and Cash Equivalents

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

Investments in Marketable Securities

Most investments in marketable securities are held in an irrevocable trust for participants in qualified defined contribution plans which were acquired with the TRC Merger, are classified as trading securities and are carried at fair value with changes in values recognized in earnings. Investments in marketable securities with maturities at dates of purchase in excess of three months are carried at amortized cost as it is our intention to hold these investments until maturity. Other investments in marketable equity securities subject to significant restrictions on sale or transfer are classified as available-for-sale and are carried at fair value with unrealized changes in values recognized in other comprehensive income.

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 and leasing costs and commissions. Deferred financing fees are amortized to interest expense using the interest method (or other methods which approximate the interest method) over the terms of the respective agreements. Deferred leasing costs and commissions are amortized using the straight-line method over the average life of the tenant leases. Deferred expenses in our Consolidated Balance Sheets are shown at cost, net of accumulated amortization of $151.0 million as of December 31, 2006 and $147.5 million as of December 31, 2005.

Minority Interests — Common (Note 12)

Minority Interests — Common includes income allocated to holders of the Common Units (the “OP Minority Interests”) as well as to minority interest venture partners in consolidated joint ventures. Income is allocated to the OP Minority Interests based on their ownership percentage of the Operating Partnership. This ownership percentage, as well as the total net assets of the Operating Partnership, changes when additional shares of our common stock or Common Units are issued. Such changes result in an allocation between stockholders’ equity and

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GENERAL GROWTH PROPERTIES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

Minority Interests-Common in the Consolidated Balance Sheets. Due to the number of such capital transactions that occur each period, we have presented a single net effect of all such allocations for the period as the “Adjustment for Minority Interest in Operating Partnership” in our Consolidated Statements of Stockholders’ Equity (rather than separately allocating the minority interest for each individual capital transaction).

Treasury Stock

We account for repurchases of common stock using the cost method with common stock in treasury classified in the Consolidated Balance Sheets as a reduction of stockholders’ equity. Treasury stock is reissued at average cost.

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.

Straight-line rents receivable, which represent the current net cumulative rents recognized prior to when billed and collectible as provided by the terms of the leases, of approximately $159.2 million as of December 31, 2006 and $124.8 million as of December 31, 2005 are included in Accounts and notes receivable, net in our Consolidated Balance Sheets.

We provide an allowance for doubtful accounts against the portion of accounts receivable, including straight-line rents, which is estimated to be uncollectible. Such allowances are reviewed periodically based upon our recovery experience. We also evaluate the probability of collecting future rent which is recognized currently under a straight-line methodology. This analysis considers the long-term nature of our leases, as a certain portion of the straight-line rent currently recognizable will not be billed to the tenant until many years into the future. Our experience relative to unbilled deferred rent receivable is that a certain portion of the amounts straight-lined into revenue are never collected from (or billed to) the tenant 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 receivable in our Consolidated Balance Sheets are shown net of an allowance for doubtful accounts of $56.9 million as of December 31, 2006 and $58.5 million as of December 31, 2005.

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.

Management and other fees primarily represent management and leasing fees, construction fees, financing fees and fees for other ancillary services performed for the benefit of the Unconsolidated Real Estate Affiliates and for properties owned by third parties. Such fees are recognized as revenue when earned.

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,

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GENERAL GROWTH PROPERTIES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

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.

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 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.

Earnings Per Share (“EPS”)

Basic earnings per share (“EPS”) is computed by dividing net income available to common stockholders by the weighted-average number of common shares outstanding. Diluted EPS is computed after adjusting the numerator and denominator of the basic EPS computation for the effects of all potentially dilutive common shares. The dilutive effects of convertible securities are computed using the “if-converted” method and the dilutive effects of options, warrants and their equivalents (including fixed awards and nonvested stock issued under stock-based compensation plans) are computed using the “treasury stock” method.

Dilutive EPS excludes anti-dilutive options where the exercise price was higher than the average market price of our common stock and options for which conditions for issuance were not achieved. Such options totaled 2,250,227 in 2006, 1,026,777 in 2005 and 1,590,974 in 2004. Outstanding Common Units have also been excluded from the diluted earnings per share calculation because there would be no effect on EPS as the minority interests’ share of income would also be added back to net income.

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GENERAL GROWTH PROPERTIES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

Information related to our EPS calculations is summarized as follows:

	Years Ended December 31,
	2006						2005				2004
	Basic			Diluted			Basic		Diluted		Basic		Diluted
	(In thousands)
Numerators:
Income from continuing operations	$	60,096		$	60,096		$	63,867	$	63,867	$	252,868	$	252,868
Discontinued operations, net of minority interests		(823	)		(823	)		11,686		11,686		14,984		14,984
Net income available to common stockholders	$	59,273		$	59,273		$	75,553	$	75,553	$	267,852	$	267,852
Denominators:
Weighted average number of common shares outstanding — basic		241,222			241,222			237,673		237,673		220,149		220,149
Effect of dilutive securities — options		—			832			—		796		—		680
Weighted average number of common shares outstanding — diluted		241,222			242,054			237,673		238,469		220,149		220,829

Derivative Financial Instruments

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

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

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

Substantially all of our interest rate swap and other derivative financial instruments qualify as cash flow hedges and hedge our exposure to forecasted interest payments on variable-rate LIBOR-based debt. Accordingly, the effective portion of the instruments’ gains or losses is reported as a component of other comprehensive income and reclassified into earnings when the related forecasted transactions affect earnings. If we discontinue a cash flow hedge because it is no longer probable that the original forecasted transaction will occur or if a hedge is deemed no longer effective, the net gain or loss in accumulated other comprehensive income (loss) is immediately reclassified into earnings.

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GENERAL GROWTH PROPERTIES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

We have not recognized any losses as a result of hedge discontinuance and the expense that we recognized related to changes in the time value of interest rate cap agreements and ineffective hedges was insignificant for 2006, 2005 and 2004.

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

Fair Value of Financial Instruments

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

	2006				2005
	Carrying		Estimated		Carrying		Estimated
	Amount		Fair Value		Amount		Fair Value
	(In millions)
Fixed-rate debt	$	17,018	$	16,854	$	13,906	$	13,960
Variable-rate debt		3,504		3,518		6,513		6,430
	$	20,522	$	20,372	$	20,419	$	20,390

Stock-Based Compensation Expense

On January 1, 2006, we adopted Statement of Financial Accounting Standards (“SFAS”) No. 123 (revised 2004), “Share-Based Payment,” (“SFAS 123(R)”). SFAS 123(R) requires companies to estimate the fair value of share-based payment awards on the date of grant using an option-pricing model. The value of the portion of the award that is ultimately expected to vest is recognized as expense over the requisite service periods in the Consolidated Statements of Income and Comprehensive Income. SFAS 123(R) replaces SFAS No. 123, “Accounting for Stock-Based Compensation” (“SFAS 123”) which we adopted in the second quarter of 2002. In March 2005, the Securities and Exchange Commission issued Staff Accounting Bulletin No. 107 (“SAB 107”) relating to SFAS 123(R). We have applied the provisions of SAB 107 in our adoption of SFAS 123(R).

We adopted SFAS 123(R) using the modified prospective transition method, which requires the application of the accounting standard as of January 1, 2006. Our Consolidated Financial Statements as of and for the year ended December 31, 2006 reflect the impact of SFAS 123(R). In accordance with the modified prospective transition method, our Consolidated Financial Statements for prior periods have not been restated to reflect, and do not include, the impact of SFAS 123(R). Because we had previously adopted SFAS 123, the impact of the adoption of SFAS 123(R) was not significant to our Consolidated Financial Statements. SFAS 123(R) requires forfeitures to be estimated at the time of grant and revised, if necessary, in subsequent periods if actual forfeitures differ from those estimates. Under SFAS 123, we did not estimate forfeitures for options issued pursuant to our Incentive Stock Plans. The cumulative effect of estimating forfeitures for these plans decreased compensation expense by approximately $150 thousand and has been reflected in our Consolidated Statements of Income and Comprehensive Income in 2006.

Prior to the adoption of SFAS 123 in the second quarter of 2002, we accounted for stock-based awards using the intrinsic value method in accordance with APB 25 as allowed under SFAS 123. Under the intrinsic value method, compensation cost is recognized for common stock awards or stock options only if the quoted market price of the

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GENERAL GROWTH PROPERTIES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

stock as of the grant date (or other measurement date, if later) is greater than the amount the grantee must pay to acquire the stock. Because the exercise price of stock options and the fair value of restricted stock grants equaled the fair market value of the underlying stock at the date of grant, no compensation expense related to grants issued under the 1993 Stock Incentive Plan was recognized. As a result of the cash settlement option available for threshold-vesting stock options (“TSOs”) issued prior to 2004, compensation expense equal to the change in the market price of our stock at the end of each reporting period continues to be recognized for all such unexercised TSOs.

On November 10, 2005, the Financial Accounting Standards Board (“FASB”) issued FASB Staff Position No. 123(R)-3 “Transition Election Related to Accounting for Tax Effects of Share-Based Payment Awards.” The transition methods include procedures to establish the beginning balance of the additional paid-in capital pool (“APIC pool”) related to the tax effects of employee stock-based compensation, and to determine the subsequent impact on the APIC pool and Consolidated Statements of Cash Flows of the tax effects of employee stock-based compensation awards that are outstanding upon adoption of SFAS 123(R). We have adopted the transition guidance in SFAS 123(R) and not the alternative method described in this FASB staff position.

Foreign Currency Translation

The functional currencies for our international joint ventures are their local currencies. Assets and liabilities of these investments are translated at the rate of exchange in effect on the balance sheet date. Translation adjustments resulting from this process are accumulated in stockholders’ equity as a component of accumulated other comprehensive income (loss).

Use of Estimates

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

Reclassifications and Corrections

Certain amounts in the 2005 and 2004 Consolidated Financial Statements have been reclassified to conform to the current year presentation.

During 2006, we made various corrections to the TRCLP purchase price allocation that was recorded in our 2005 Consolidated Financial Statements. Corrections related to the aggregate net deferred tax liabilities acquired in the TRC Merger reduced deferred tax liabilities by approximately $58.7 million with a corresponding decrease in goodwill in the first quarter of 2006 and additional corrections identified in the fourth quarter increased deferred tax liabilities by $15.5 million, increased goodwill by $9.8 million, increased deferred tax assets by $2.1 million and decreased current taxes payable by $3.6 million. The net reductions to deferred tax liabilities of $43.2 million and goodwill of $48.9 million and the other corrections noted above, had no impact on earnings for the years ended December 31, 2006 and 2005, or any period within such years.

Additionally, we reclassified approximately $65 million of below-market ground leases, which were included in prepaid expenses and other assets in our December 31, 2005 Consolidated Balance Sheet, to owned land in 2006. This change and the corresponding revision of previously recorded amortization decreased other property operating costs by approximately $1.9 million and increased net income by approximately $1.5 million during 2006. We also

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GENERAL GROWTH PROPERTIES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

corrected the amortization period used to amortize the tenant-related intangible assets and liabilities at one of the properties acquired in the TRC Merger. This correction increased depreciation and amortization by approximately $2.4 million and decreased net income by approximately $2.0 million in 2006.

None of the adjustments impacted our cash flows from operating, investing or financing activities in any period in 2006 and 2005. We believe that the effects of these changes are not material to our Consolidated Financial Statements.

Note 3   Intangibles

The following table summarizes our intangible assets and liabilities:

				Accumulated
	Gross Asset			(Amortization)/			Net Carrying
	(Liability)			Accretion			Amount
	(In thousands)
As of December 31, 2006
Tenant leases:
In-place value	$	667,492		$	(314,270	)	$	353,222
Above-market		107,157			(53,176	)		53,981
Below-market		(294,052	)		176,089			(117,963	)
Ground leases:
Above-market		(16,968	)		1,007			(15,961	)
Below-market		293,435			(12,919	)		280,516
Real estate tax stabilization agreement		91,879			(8,501	)		83,378
As of December 31, 2005
Tenant leases:
In-place value	$	664,444		$	(176,190	)	$	488,254
Above-market		106,117			(29,023	)		77,094
Below-market		(293,967	)		111,697			(182,270	)
Ground leases:
Above-market		(16,968	)		535			(16,433	)
Below-market		358,524			(8,736	)		349,788
Real estate tax stabilization agreement		91,879			(4,691	)		87,188

Changes in gross asset (liability) balances are the result of the ground lease reclassification (Note 2), GGP Ivanhoe IV, Inc. acquisition (Note 5) and acquisition of the minority interest in two joint ventures.

Amortization 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 minority interest and the provision for income taxes) by approximately $118.2 million in 2006 and $157.5 million in 2005 and increased net income by $8.4 million in 2004.

Future amortization, including our share of such items from Unconsolidated Real Estate Affiliates, is estimated to decrease income (excluding the impact of minority interest and the provision for income taxes) by approximately $120 million in 2007, $90 million in 2008, $60 million in 2009, $40 million in 2010, and $30 million in 2011.

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GENERAL GROWTH PROPERTIES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

Note 4   Discontinued Operations and Gains (Losses) on Dispositions of Interests in Operating Properties

In December 2005, our Board of Directors approved two separate plans to dispose of certain office/industrial properties originally acquired in the TRCLP merger in 2004. The plans included 21 office properties which were sold at a total sale price of approximately $125 million and 16 industrial buildings which were sold at a total sale price of approximately $57 million. All of the properties were located in Hunt Valley and Woodlawn, Baltimore, Maryland. The sales closed in December 2005. As a result of the dispositions, we recognized a loss of approximately $1.3 million in 2006 and a gain of approximately $6.2 million in 2005, both before minority interest.

In August 2004, our Board of Directors approved plans to dispose of certain of the commercial/business properties originally acquired in the JP Realty acquisition in July 2002. The sale closed on November 1, 2004 for $67 million and a gain of approximately $11 million was recognized.

Pursuant to SFAS No. 144, the operations of these properties (net of minority interests) have been reported as discontinued operations in the accompanying consolidated financial statements. Revenues and income before minority interest were as follows:

	Years Ended December 31,
	2005		2004
	(In thousands)
Revenues:
TRCLP office/industrial properties	$	24,275	$	2,813
JP Realty commercial/business properties		—		6,118
Total	$	24,275	$	8,931
Net income:
TRCLP office/industrial properties	$	8,067	$	983
JP Realty commercial/business properties		—		3,801
Total	$	8,067	$	4,784

Note 5   Unconsolidated Real Estate Affiliates

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

In certain circumstances, we are obligated (or can elect) to fund debt in excess of our pro rata share of the debt of our Unconsolidated Real Estate Affiliates. Such Retained Debt totaled $170.1 million as of December 31, 2006 and $302.7 million as of December 31, 2005, and has been reflected as a reduction in our investment in Unconsolidated Real Estate Affiliates.

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

On April 6, 2006, we acquired our joint venture partner’s 49% interest in GGP Ivanhoe IV, Inc., which owns Eastridge Mall, for approximately $115 million, which was paid with a 5.95% fixed-rate note. This note was repaid, prior to its scheduled maturity of September 2006, in August 2006 in conjunction with the refinancing of the entire property, with a $170 million, 5.79% fixed-rate mortgage note due in 2011. As of April 6, 2006, GGP Ivanhoe IV, Inc. has been consolidated for accounting purposes.

F-21

GENERAL GROWTH PROPERTIES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

Condensed Combined Financial Information of Unconsolidated Real Estate Affiliates

Following is summarized financial information for our Unconsolidated Real Estate Affiliates as of December 31, 2006 and 2005 and for the years ended December 31, 2006, 2005 and 2004. Certain 2005 and 2004 amounts have been reclassified to conform to the 2006 presentation.

	December 31,			December 31,
	2006			2005
	(In thousands)
Condensed Combined Balance Sheets — Unconsolidated Real Estate Affiliates
Assets:
Land	$	988,018		$	919,533
Buildings and equipment		8,158,030			7,656,894
Less accumulated depreciation		(1,590,812	)		(1,302,624	)
Developments in progress		551,464			427,779
Net property and equipment		8,106,700			7,701,582
Investment in unconsolidated joint ventures		7,424			8,788
Investment land and land held for sale and development		290,273			259,386
Net investment in real estate		8,404,397			7,969,756
Cash and cash equivalents		180,203			217,535
Accounts and notes receivable, net		165,049			161,225
Deferred expenses, net		155,051			148,568
Prepaid expenses and other assets		509,324			340,120
Total assets	$	9,414,024		$	8,837,204
Liabilities and Owners’ Equity:
Mortgage notes and other property debt payable	$	7,752,889		$	6,325,116
Accounts payable and accrued expenses		558,974			482,414
Owners’ equity		1,102,161			2,029,674
Total liabilities and owners’ equity	$	9,414,024		$	8,837,204
Investment In and Loans To/From Unconsolidated Real Estate Affiliates, Net
Owners’ equity	$	1,102,161		$	2,029,674
Less joint venture partners’ equity		(601,314	)		(1,175,175	)
Capital or basis differences and loans		825,768			945,627
Investment in and loans to/from
Unconsolidated Real Estate Affiliates, net	$	1,326,615		$	1,800,126

F-22

GENERAL GROWTH PROPERTIES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

	Years Ended December 31,
	2006			2005			2004
	(In thousands)
Condensed Combined Statements of Income — Unconsolidated Real Estate Affiliates
Revenues:
Minimum rents	$	864,368		$	795,185		$	569,348
Tenant recoveries		378,413			365,325			264,907
Overage rents		31,889			28,592			21,422
Land sales		162,790			158,181			38,681
Other		182,134			126,507			35,083
Management and other fees		15,712			—			—
Total revenues		1,635,306			1,473,790			929,441
Expenses:
Real estate taxes		119,426			112,225			77,513
Repairs and maintenance		88,243			87,816			59,051
Marketing		26,485			29,561			25,860
Other property operating costs		311,267			239,194			142,185
Land sales operations		103,519			89,561			18,101
Provision for doubtful accounts		1,494			10,182			5,390
Property management and other costs		77,290			59,548			47,044
General and administrative		7,947			2,684			10,115
Depreciation and amortization		269,327			257,153			170,529
Total expenses		1,004,998			887,924			555,788
Operating income		630,308			585,866			373,653
Interest income		30,498			14,432			3,778
Interest expense		(361,114	)		(304,368	)		(179,807	)
Provision for income taxes		(1,274	)		(1,157	)		(353	)
Income allocated to minority interest		(588	)		—			—
Equity in income of unconsolidated joint ventures		6,509			5,384			4,337
Net income	$	304,339		$	300,157		$	201,608
Equity In Income of Unconsolidated Real Estate Affiliates
Net income of Unconsolidated Real Estate Affiliates	$	304,339		$	300,157		$	201,608
Joint venture partners’ share of income of Unconsolidated Real Estate Affiliates		(160,099	)		(157,756	)		(103,768	)
Amortization of capital or basis differences		(22,083	)		(20,844	)		(9,632	)
Elimination of Unconsolidated Real Estate Affiliates loan interest		(7,916	)		(571	)		(17	)
Equity in income of Unconsolidated Real Estate Affiliates	$	114,241		$	120,986		$	88,191

F-23

GENERAL GROWTH PROPERTIES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

Condensed Financial Information of Individually Significant Unconsolidated Real Estate Affiliates

The following is summarized financial information for certain individually significant Unconsolidated Real Estate Affiliates as of December 31, 2006 and 2005 and for the years ended December 31, 2006, 2005 and 2004. Our investment in such affiliates varies from a strict ownership percentage due to capital or basis differences or loans and related amortization.

GGP/Homart I

We own 50% of the common stock of GGP/Homart, Inc. (“GGP/Homart I”), a REIT. The remaining 50% interest in GGP/Homart I is owned by New York State Common Retirement Fund (“NYSCRF”). GGP/Homart I owns an interest in 23 retail properties. NYSCRF has an exchange right which permits it to convert its ownership interest in GGP/Homart I to shares of GGP common stock. If this exchange right is exercised, we may alternatively satisfy it in cash. Certain 2005 and 2004 amounts have been reclassified to conform to the 2006 presentation.

	GGP/Homart I
	December 31,			December 31,
	2006			2005
	(In thousands)
Assets:
Land	$	157,708		$	146,527
Buildings and equipment		1,879,992			1,796,335
Less accumulated depreciation		(517,187	)		(452,809	)
Developments in progress		13,216			30,010
Investment in unconsolidated joint ventures		7,424			8,788
Net investment in real estate		1,541,153			1,528,851
Cash and cash equivalents		15,871			69,034
Accounts receivable, net		48,498			48,137
Deferred expenses, net		44,773			46,709
Prepaid expenses and other assets		174,854			18,333
Total assets	$	1,825,149		$	1,711,064
Liabilities and Owners’ Equity (Deficit):
Mortgage notes and other property debt payable	$	2,041,796		$	1,579,717
Accounts payable and accrued expenses		58,408			62,132
Owners’ equity (deficit)		(275,055	)		69,215
Total liabilities and owners’ equity (deficit)	$	1,825,149		$	1,711,064

F-24

GENERAL GROWTH PROPERTIES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

	GGP/Homart I
	Years Ended December 31,
	2006			2005			2004
	(In thousands)
Revenues:
Minimum rents	$	236,192		$	226,936		$	214,448
Tenant recoveries		98,864			95,752			91,867
Overage rents		10,237			9,312			8,266
Other		11,224			10,660			7,469
Total revenues		356,517			342,660			322,050
Expenses:
Real estate taxes		30,393			29,745			27,845
Repairs and maintenance		25,477			26,748			25,890
Marketing		7,963			9,294			9,683
Other property operating costs		44,062			36,480			41,120
Provision for doubtful accounts		835			1,088			1,487
Property management and other costs		22,603			20,835			19,355
General and administrative		456			418			3,461
Depreciation and amortization		71,043			68,578			66,430
Total expenses		202,832			193,186			195,271
Operating income		153,685			149,474			126,779
Interest income		14,688			4,588			1,817
Interest expense		(99,991	)		(84,684	)		(81,120	)
Provision for income taxes		(338	)		(126	)		(150	)
Equity in income of unconsolidated joint ventures		6,509			5,384			4,337
Net income	$	74,553		$	74,636		$	51,663

F-25

GENERAL GROWTH PROPERTIES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

GGP/Homart II

We own 50% of the membership interest of GGP/Homart II L.L.C. (“GGP/Homart II”), a limited liability company. The remaining 50% interest in GGP/Homart II is owned by NYSCRF. GGP Homart II owns 13 retail properties and one office building. Certain 2005 and 2004 amounts have been reclassified to conform to the 2006 presentation.

	GGP/Homart II
	December 31,			December 31,
	2006			2005
	(In thousands)
Assets:
Land	$	224,158		$	190,787
Buildings and equipment		2,261,123			2,014,151
Less accumulated depreciation		(326,340	)		(264,434	)
Developments in progress		286,396			148,453
Net investment in real estate		2,445,337			2,088,957
Cash and cash equivalents		6,289			55,539
Accounts receivable, net		35,506			32,644
Deferred expenses, net		58,712			56,223
Prepaid expenses and other assets		36,656			116,234
Total assets	$	2,582,500		$	2,349,597
Liabilities and Owners’ Equity:
Mortgage notes and other property debt payable	$	2,284,763		$	1,666,979
Accounts payable and accrued expenses		146,781			88,822
Owners’ equity		150,956			593,796
Total liabilities and owners’ equity	$	2,582,500		$	2,349,597

F-26

GENERAL GROWTH PROPERTIES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

	GGP/Homart II
	Years Ended December 31,
	2006			2005			2004
	(In thousands)
Revenues:
Minimum rents	$	205,835		$	194,938		$	184,418
Tenant recoveries		94,298			92,862			90,958
Overage rents		5,935			6,432			5,530
Other		9,057			8,543			5,352
Total revenues		315,125			302,775			286,258
Expenses:
Real estate taxes		29,883			27,132			27,030
Repairs and maintenance		19,362			19,671			18,734
Marketing		7,583			8,726			9,504
Other property operating costs		37,776			29,490			32,435
(Recovery of) provision for doubtful accounts		(47	)		3,125			1,591
Property management and other costs		19,469			17,468			16,176
General and administrative		7,137			2,005			6,056
Depreciation and amortization		66,024			61,923			56,394
Total expenses		187,187			169,540			167,920
Operating income		127,938			133,235			118,338
Interest income		8,840			7,358			1,492
Interest expense		(91,240	)		(77,285	)		(55,780	)
(Provision) benefit for income taxes		(69	)		64			(59	)
Net income	$	45,469		$	63,372		$	63,991

F-27

GENERAL GROWTH PROPERTIES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

GGP/Teachers

We own 50% of the membership interest in GGP- TRS L.L.C. (GGP/Teachers), a limited liability company. The remaining 50% interest in GGP/Teachers is owned by the Teachers’ Retirement System of the State of Illinois. GGP/Teachers owns six retail properties. Certain 2005 and 2004 amounts have been reclassified to conform to the 2006 presentation.

	GGP/Teachers
	December 31,			December 31,
	2006			2005
	(In thousands)
Assets:
Land	$	176,761		$	176,761
Buildings and equipment		908,786			879,828
Less accumulated depreciation		(89,323	)		(64,795	)
Developments in progress		76,991			18,431
Net investment in real estate		1,073,215			1,010,225
Cash and cash equivalents		19,029			18,279
Accounts receivable, net		11,347			9,725
Deferred expenses, net		15,280			13,220
Prepaid expenses and other assets		13,980			3,968
Total assets	$	1,132,851		$	1,055,417
Liabilities and Owners’ Equity:
Mortgage notes and other property debt payable	$	933,375		$	786,025
Accounts payable and accrued expenses		88,188			84,322
Owners’ equity		111,288			185,070
Total liabilities and owners’ equity	$	1,132,851		$	1,055,417

F-28

GENERAL GROWTH PROPERTIES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

	GGP/Teachers
	Years Ended December 31,
	2006			2005			2004
	(In thousands)
Revenues:
Minimum rents	$	106,422		$	87,014		$	83,464
Tenant recoveries		46,530			40,033			38,473
Overage rents		6,003			2,888			2,736
Other		2,753			2,378			1,831
Total revenues		161,708			132,313			126,504
Expenses:
Real estate taxes		11,549			11,130			10,868
Repairs and maintenance		8,298			7,405			7,472
Marketing		3,909			3,610			3,424
Other property operating costs		18,783			13,466			16,531
Provision for doubtful accounts		132			440			445
Property management and other costs		9,166			7,424			6,716
General and administrative		297			213			179
Depreciation and amortization		26,621			21,385			20,578
Total expenses		78,755			65,073			66,213
Operating income		82,953			67,240			60,291
Interest income		914			723			287
Interest expense		(44,262	)		(27,030	)		(15,499	)
Provision for income taxes		(485	)		(747	)		(130	)
Net income	$	39,120		$	40,186		$	44,949

F-29

GENERAL GROWTH PROPERTIES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

Woodlands Land Development

We own 52.5% of the membership interest of The Woodlands Land Development Company, L.P. (“The Woodlands Partnership”), a limited liability partnership. The remaining 47.5% interest in The Woodlands Partnership is owned by Morgan Stanley Real Estate Fund II, L.P.

	Woodlands Land Development
	Holdings, LP
	December 31,			December 31,
	2006			2005
	(In thousands)
Assets:
Land	$	13,828		$	15,302
Buildings and equipment		91,485			86,892
Less accumulated depreciation		(19,271	)		(9,825	)
Developments in progress		6,939			27,802
Investment land and land held for sale and development		290,273			258,926
Net investment in real estate		383,254			379,097
Cash and cash equivalents		15,219			—
Deferred expenses, net		2,782			—
Prepaid expenses and other assets		97,977			88,926
Total assets	$	499,232		$	468,023
Liabilities and Owners’ Equity:
Mortgage notes and other property debt payable	$	321,724		$	282,036
Accounts payable and accrued expenses		58,805			84,275
Owners’ equity		118,704			101,712
Total liabilities and owners’ equity	$	499,233		$	468,023

F-30

GENERAL GROWTH PROPERTIES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

	The Woodlands Land
	Development Holdings, L.P.
	Years Ended December 31,
	2006			2005
	(In thousands)
Revenues:
Minimum rents	$	1,834		$	(9	)
Land sales		161,540			157,581
Other		50,791			31,947
Total revenues		214,165			189,519
Expenses:
Real estate taxes		453			—
Repairs and maintenance		311			—
Other property operating costs		32,207			33,083
Land sales operations		102,989			89,313
Depreciation and amortization		5,218			4,659
Total expenses		141,178			127,055
Operating income		72,987			62,464
Interest income		332			224
Interest expense		(6,434	)		(5,873	)
Net income	$	66,885		$	56,815

Results for the year ended December 31, 2004 include only the six weeks subsequent to the November 12, 2004 TRC Merger and, as a result, have not been presented due to immateriality.

F-31

GENERAL GROWTH PROPERTIES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

Note 6   Mortgage Notes and Other Property Debt Payable

Mortgage notes and other property debt payable are summarized as follows:

	December 31,
	2006		2005
	(In thousands)
Fixed-rate debt:
Commercial mortgage-backed securities	$	868,765	$	1,181,895
Other collateralized mortgage notes and other property debt payable		13,761,988		11,092,544
Corporate and other unsecured term loans		2,386,727		1,631,257
Total fixed-rate debt		17,017,480		13,905,696
Variable-rate debt:
Commercial mortgage-backed securities		—		306,270
Other collateralized mortgage notes and other property debt payable		388,287		888,842
Credit facilities		60,000		180,500
Corporate and other unsecured term loans		3,056,200		5,137,567
Total variable-rate debt		3,504,487		6,513,179
Total	$	20,521,967	$	20,418,875

The weighted-average annual interest rate (including the effects of swaps and excluding the effects of deferred finance costs) on our mortgage notes and other property debt payable was 5.70% at December 31, 2006 and 5.64% at December 31, 2005. Our mortgage notes and other debt payable have various maturities through 2095. The weighted-average remaining term of our mortgage notes and other property debt payable was 4.7 years as of December 31, 2006.

As of December 31, 2006, approximately $21.5 billion of land, buildings and equipment and developments in progress (before accumulated depreciation) have been pledged as collateral for our mortgage notes and other debt payable. Certain properties, including those within the portfolios collateralized by commercial mortgage-backed securities, are subject to financial performance covenants, primarily debt service coverage ratios.

Commercial Mortgage-Backed Securities

In November 1997 (refinanced in November 2004), the Operating Partnership and GGP Ivanhoe I completed the placement of fixed-rate non-recourse commercial mortgage backed securities (the “CMBS 13”). The commercial mortgage-backed securities have cross-default provisions and are cross-collateralized. Under certain cross-default provisions, a default under any mortgage note included in a cross-defaulted package may constitute a default under all such mortgage notes in the package and may lead to acceleration of the indebtedness due on each property within the collateral package. In general, the cross-defaulted properties are under common ownership; however, $138.6 million of unconsolidated debt at two Unconsolidated Properties is cross-defaulted and cross-collateralized by $868.8 million of consolidated debt at eleven Consolidated Properties. As of December 31, 2006, the weighted-average interest rate on the CMBS 13 was 5.40% (range of 4.20% to 6.71%).

In December 2001, the Operating Partnership and certain Unconsolidated Real Estate Affiliates completed the placement of non-recourse commercial mortgage pass-through certificates (the “GGP MPTC”). The principal amount of the GGP MPTC was attributed to the Operating Partnership, GGP/Homart I, GGP/Homart II, GGP Ivanhoe III and GGP Ivanhoe IV. The GGP MPTC was repaid in the third quarter of 2006.

F-32

GENERAL GROWTH PROPERTIES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

Other Collateralized Mortgage Notes and Other Property Debt Payable

Collateralized mortgage notes and other property debt payable consist primarily of non-recourse notes collateralized by individual properties and equipment. Substantially all of the mortgage notes are non-recourse to us. Certain mortgage notes payable may be prepaid but are generally subject to a prepayment penalty equal to a yield-maintenance premium or a percentage of the loan balance.

The fixed-rate collateralized mortgage notes and other debt payable bear interest ranging from 3.17% to 11.53%. The variable-rate collateralized mortgage notes and other debt payable bear interest at LIBOR (5.35% at December 31, 2006) plus 125 to 190 basis points.

Corporate and Other Unsecured Term Loans

On February 24, 2006, we amended the 2004 Credit Facility, which was entered into to fund the TRC Merger, and entered into a 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, 2006, $590 million is available to be drawn on the revolving credit facility.

The 2006 Credit Facility has a four year term, with a one year extension option. The interest rate ranges from LIBOR plus 1.15% to LIBOR plus 1.5%, depending on our leverage ratio and assuming we maintain our election to have these loans designated as Eurodollar loans. The interest rate, as of December 31, 2006, was LIBOR plus 1.25%. Quarterly principal payments on the Term Loan of $12.5 million begin March 31, 2007, with the balance due at maturity.

Under the terms of the 2006 Credit Facility, we are subject to customary affirmative and negative covenants. If a default occurs, the lenders will have the option of declaring all outstanding amounts immediately due and payable. Events of default include a failure to maintain our REIT status under the Internal Revenue Code, a failure to remain listed on the New York Stock Exchange and such customary events as nonpayment of principal, interest, fees or other amounts, breach of representations and warranties, breach of covenant, cross-default to other indebtedness and certain bankruptcy events.

Concurrently with the 2006 Credit Facility transaction, we also entered into a $1.4 billion term loan (the “Short Term Loan”) and TRCLP entered into a $500 million term loan (the “Bridge Loan”). The Short Term Loan was repaid in August 2006 as part of various refinancing transactions including the GGP MPTC. The Bridge Loan was fully repaid in May 2006 with a portion of the proceeds obtained from the sale of $800 million of senior unsecured notes which were issued by TRCLP. These notes provide for semi-annual, interest-only payments at a rate of 6.75% and payment of the principal in full on May 1, 2013.

Also concurrently with the 2006 Credit Facility transaction, GGP Capital Trust  I, a Delaware statutory trust (the “Trust”) and a wholly-owned subsidiary of GGPLP, completed a private placement of $200 million of trust preferred securities (“TRUPS”). The Trust also issued $6.2 million of Common Securities 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%. Though the Trust is a wholly-owned subsidiary of GGPLP, we are not the primary beneficiary of the Trust and, accordingly, it is not consolidated for accounting purposes under FASB Interpretation No. 46 (as revised), “Consolidation of Variable Interest Entities — An Interpretation of ARB No. 51” (“FIN 46R”). As a result, we have recorded the Junior Subordinated Notes as Mortgage Notes and Other Property Debt Payable and our common equity interest in the Trust as Prepaid Expenses and Other Assets in our Consolidated Balance Sheet.

F-33

GENERAL GROWTH PROPERTIES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

Unsecured Term Loans

In conjunction with the TRC Merger, we assumed certain publicly-traded unsecured debt which included 8.78% and 8.44% Notes due 2007, 3.625% Notes and 8% Notes due 2009, 7.2% Notes due 2012 and 5.375% Notes due 2013. Such debt totaled $1.5 billion at both December 31, 2006 and 2005. Under the terms of the Indenture dated as of February 24, 1995, as long as these notes are outstanding, TRCLP is 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 Exhibit 99.1 to this Annual Report on Form 10-K. We believe that such TRCLP information is responsive to the terms of the Indenture and that any additional information needed or actions required can be supplied or addressed.

In conjunction with our acquisition of JP Realty in 2002, we assumed $100 million of ten-year senior unsecured notes which bear interest at a fixed rate of 7.29% and were issued in March 1998. The notes require semi-annual interest payments. Annual principal payments of $25 million began in March 2005 and continue until the loan is fully repaid in March 2008.

Interest Rate Swaps

To achieve a more desirable balance between fixed and variable-rate debt, we have also entered into certain swap agreements as follows:

	2006 Credit			Property
	Agreement			Specific
Total notional amount (in millions)	$	625.0		$	195.0
Average fixed pay rate		4.11	%		4.78	%
Average variable receive rate		LIBOR			LIBOR

Such swap agreements have been designated as cash flow hedges and are intended to hedge our exposure to future interest payments on the related variable-rate debt.

Letters of Credit and Surety Bonds

We had outstanding letters of credit and surety bonds of approximately $220 million as of December 31, 2006. 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

We elected to be taxed as a REIT under sections 856-860 of the Internal Revenue Code, commencing with our taxable year beginning January 1, 1993. To qualify as a REIT, we must meet a number of organizational and operational requirements, including requirements to distribute at least 90% of our ordinary taxable income and to distribute to stockholders or pay tax on 100% of capital gains and to meet certain asset and income tests. It is management’s current intention to adhere to these requirements.

As a REIT, we will generally not be subject to corporate level Federal income tax on taxable income we distribute currently to our stockholders. If we fail to qualify as a REIT in any taxable year, we will be subject to Federal income taxes at regular corporate rates (including any applicable alternative minimum tax) and may not be able to qualify as a REIT for four subsequent taxable years. Even if we qualify for taxation as a REIT, we may be subject to certain state and local taxes on our income or property, and to Federal income and excise taxes on our undistributed taxable income. In addition, we are subject to rules which may impose corporate income tax on certain built-in gains recognized upon the disposition of assets owned by our subsidiaries where such subsidiaries (or other predecessors)

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GENERAL GROWTH PROPERTIES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

had formerly been C corporations. These rules apply only where the disposition occurs within certain specified recognition periods. Specifically, in the case of the TRC assets, we may be subject to tax on built-in gain recognized upon the disposition prior to January 1, 2008 of assets owned by TRC on January 1, 1998, the effective date of TRC’s REIT election. At December 31, 2006, the total amount of built-in gains with respect to our assets is substantial. However, to the extent that any such properties are to be sold, we intend to utilize tax strategies such as dispositions through like-kind exchanges and the use of net operating loss carryforwards to limit or offset the amount of such gains and therefore the amount of tax paid.

We also have subsidiaries which we have elected to be treated as taxable real estate investment trust subsidiaries (a “TRS” or “TRS entities”) and which are, therefore, subject to federal and state income taxes. Our primary TRS entities include GGMI, entities which own our master planned community properties and other TRS entities acquired in the TRC Merger. Current Federal income taxes of certain of these TRS entities are likely to increase in future years as we exhaust the net loss carryforwards of these entities and as certain master planned community developments are completed. Such increases could be significant.

The provision for income taxes for the years ended December 31, 2006, 2005 and 2004 were as follows:

	2006		2005		2004
	(In thousands)
Current	$	40,732	$	22,693	$	390
Deferred		58,252		28,596		1,993
Total	$	98,984	$	51,289	$	2,383

Income tax expense computed by applying the Federal corporate tax rate for the years ended December 31, 2006, 2005 and 2004 is reconciled to the provision for income taxes as follows:

	2006		2005			2004
	(In thousands)
Tax at statutory rate on earnings from continuing operations before income taxes	$	55,678	$	40,723		$	89,481
Increase (decrease) in valuation allowances, net		936		(5,114	)		(2,110	)
State income taxes, net of Federal income tax benefit		4,608		343			115
Tax at statutory rate on earnings (losses) not subject to Federal income taxes and other permanent differences		37,762		15,337			(85,103	)
Income tax expense	$	98,984	$	51,289		$	2,383

Realization of a deferred tax benefit is dependent upon generating sufficient taxable income in future periods. Our net operating loss carryforwards are currently scheduled to expire in subsequent years through 2026. Some of the net operating loss carryforward amounts are subject to annual limitations under Section 382 of the Internal Revenue Code. This annual limitation under Section 382 is subject to modification if a taxpayer recognizes what are called “built-in gain items.” For 2004, the benefit of the entire amount of the net operating loss was recorded and a reserve was established to reflect the limitations caused by Section 382. For 2005, the presentation has changed, but the net amount has remained the same. For 2005, the benefit amount has been reduced to reflect the sum of the annual Section 382 limitations, with no adjustment for the potential of built-in gain items. The valuation amount has likewise been reduced, thereby maintaining the same net deferred tax benefit amount for the net operating loss carryforwards. For 2006, there has been no change from 2005 in the presentation of the net tax benefit.

F-35

GENERAL GROWTH PROPERTIES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

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:

	2006			2005
	(In thousands)
Total deferred tax assets	$	16,006		$	12,457
Valuation allowance		(936	)		—
Net deferred tax assets		15,070			12,457
Total deferred tax liabilities		(1,302,205	)		(1,286,576	)
Net deferred tax liabilities	$	(1,287,135	)	$	(1,274,119	)

As part of the TRC merger, we acquired a controlling interest in an entity whose assets included a deferred tax asset of approximately $141 million related to $405.5 million of temporary differences (primarily interest deduction carryforwards with no expiration date).

Due to the uncertainty of the realization of certain tax carryforwards, we established valuation allowances. The majority of the valuation allowances related to net operating loss carryforwards where there was uncertainty regarding their realizability.

The tax effects of temporary differences and carryforwards included in the net deferred tax liabilities at December 31, 2006 and 2005 are summarized as follows:

	2006			2005
	(In thousands)
Property, primarily differences in depreciation and amortization, the tax basis of land assets and treatment of interest and certain other costs	$	(1,165,960	)	$	(1,266,660	)
Deferred income		(291,634	)		(236,167	)
Interest deduction carryforwards		142,177			163,193
Operating loss and tax credit carryforwards		28,282			65,515
Net deferred tax liabilities	$	(1,287,135	)	$	(1,274,119	)

Several of our subsidiaries and partnerships in which we have an interest are currently under examination by the Internal Revenue Service. 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.

During the first quarter of 2007, we expect to complete an internal restructuring of certain of our operating properties that are currently owned by TRS entities. We currently estimate that the restructuring will reduce our deferred tax liability by approximately $300 million.

Earnings and profits, which determine the taxability of dividends to stockholders, differ from net income reported for financial reporting purposes due to differences for Federal income tax reporting purposes in, among other things, estimated useful lives, depreciable basis of properties and permanent and temporary differences on the inclusion or deductibility of elements of income and deductibility of expense for such purposes.

F-36

GENERAL GROWTH PROPERTIES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

Distributions paid on our common stock and their tax status, as sent to our shareholders, are presented in the following table. The tax status of GGP distributions in 2006, 2005 and 2004 may not be indicative of future periods.

	2006		2005		2004
Ordinary income	$	0.542	$	0.993	$	1.260
Return of capital		0.501		0.497		—
Qualified dividends		0.432		—		—
Capital gain distributions		0.205		—		—
Distributions per share	$	1.680	$	1.490	$	1.260

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 based on operating leases of our Consolidated Properties held as of December 31, 2006 are as follows:

Year	Amount
	(In thousands)
2007	$	1,393,768
2008		1,293,107
2009		1,156,375
2010		1,005,205
2011		861,215
Subsequent		3,097,317

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.

Such operating leases are with a variety of tenants, the majority of which are national and regional retail chains and local retailers, and consequently, our credit risk is concentrated in the retail industry.

Note 9   Transactions With Affiliates

Management fees primarily represent management and leasing fees, financing fees and fees for other ancillary services performed for the benefit of certain of the Unconsolidated Real Estate Affiliates and for properties owned by third parties. Fees charged to the Unconsolidated Properties totaled approximately $110.9 million in 2006, $87.5 million in 2005 and $61.8 million in 2004. Such fees are recognized as revenue when earned.

Note 10   Stock-Based Compensation Plans and Other Stock-Based Activity

Incentive Stock Plans

We grant qualified and non-qualified stock options and make restricted stock grants to attract and retain officers and key employees through the 2003 Incentive Stock Plan and, prior to April 2003, the 1993 Stock Incentive Plan. Stock options are granted by the Compensation Committee of the Board of Directors at an exercise price of not less than 100% of the fair market value of our common stock on the date of the grant. The terms of the options are fixed by the Compensation Committee. Stock options granted to officers and key employees under the 2003 Incentive Stock Plan are for 5-year terms and under the 1993 Incentive Stock Plan are for 10-year terms. Stock options generally vest 20% at the time of the grant and in 20% annual increments thereafter. Prior to May 2006, we granted options to non-employee directors that were exercisable in full commencing on the date of grant and scheduled to expire on the fifth anniversary of the date of the grant. Beginning in May 2006, non-employee directors received restricted stock

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GENERAL GROWTH PROPERTIES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

grants, as further described below. The 2003 Incentive Stock Plan provides for the issuance of up to 9.0 million shares of our common stock, subject to certain customary adjustments to prevent dilution.

The following tables summarize stock option activity as of and for the years ended December 31, 2006, 2005 and 2004.

	2006					2005					2004
				Weighted					Weighted					Weighted
				Average					Average					Average
				Exercise					Exercise					Exercise
	Shares			Price		Shares			Price		Shares			Price
Stock Options Outstanding at January 1		2,546,174		$	29.57		1,875,687		$	22.17		1,482,087		$	14.86
Granted		1,370,000			49.78		1,352,500			36.13		922,500			30.80
Exercised		(573,226	)		24.70		(610,213	)		21.00		(521,100	)		16.83
Exchanged for restricted stock		(30,000	)		47.26		—			—		—			—
Forfeited		(145,000	)		43.10		(70,000	)		33.49		(7,500	)		11.31
Expired		(600	)		9.99		(1,800	)		9.99		(300	)		9.99
Stock Options Outstanding at December 31		3,167,348		$	38.41		2,546,174		$	29.57		1,875,687		$	22.17

	Stock Options Outstanding						Stock Options Exercisable
			Weighted						Weighted
			Average		Weighted				Average		Weighted
			Remaining		Average				Remaining		Average
			Contractual		Exercise				Contractual		Exercise
Range of Exercise Prices	Shares		Term (in years)		Price		Shares		Term (in years)		Price
In-the-money stock options
$ 5.05 - $10.09		6,000		3.3	$	9.99		6,000		3.3	$	9.99
$10.09 - $15.14		54,700		5.2		13.58		54,700		5.2		13.58
$15.14 - $20.19		247,148		6.2		16.77		103,148		6.2		16.77
$30.28 - $35.33		612,500		2.7		30.98		298,500		2.7		31.03
$35.33 - $40.38		972,000		3.1		35.61		292,000		3.1		35.55
$40.38 - $50.47		1,275,000		4.1		49.50		220,000		4.0		49.37
Total		3,167,348		3.9	$	38.41		974,348		3.8	$	33.91
Intrinsic value (in thousands)	$	43,773					$	17,850

The intrinsic value of outstanding and exercisable stock options as of December 31, 2006 represents the excess of our closing stock price ($52.23) over the exercise price multiplied by the applicable number of stock options. The intrinsic value of exercised stock options represents the excess of our stock price at the time the option was exercised over the exercise price and was $13.9 million for options exercised during 2006, $10.9 million for options exercised during 2005, and $7.4 million for options exercised during 2004.

The weighted-average fair value of stock options as of the grant date was $7.61 for stock options granted during 2006, $4.82 for stock options granted during 2005, and $2.97 for stock options granted during 2004.

F-38

GENERAL GROWTH PROPERTIES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

Restricted Stock

We also make restricted stock grants to certain officers and, beginning in May 2006, to non-employee directors, pursuant to the 2003 Stock Incentive Plan. The vesting terms of these grants are specific to the individual grant. Generally, the shares vest either one-third immediately with the remainder vesting equally on the first and second anniversaries or equally on the first, second and third anniversaries.

The following table summarizes restricted stock activity as of and for the years ended December 31, 2006, 2005, and 2004.

	2006					2005					2004
				Weighted					Weighted					Weighted
				Average					Average					Average
				Grant Date					Grant Date					Grant Date
	Shares			Fair Value		Shares			Fair Value		Shares			Fair Value
Nonvested restricted stock grants outstanding as of January 1		15,000		$	16.77		80,001		$	16.71		145,002		$	16.71
Granted		99,000			47.91		66,000			35.41		55,000			30.94
Vested		(41,334	)		37.13		(131,001	)		26.13		(120,001	)		23.22
Nonvested restricted stock grants outstanding as of December 31		72,666		$	47.62		15,000		$	16.77		80,001		$	16.71
Intrinsic value (in thousands)	$	3,795				$	705				$	2,893

The total fair value of restricted stock grants which vested during 2006 was $2.0 million, during 2005 was $5.1 million and during 2004 was $3.7 million.

Threshold-Vesting Stock Options

Under the 1998 Incentive Stock Plan (the “1998 Incentive Plan”), we may also grant stock incentive awards to employees in the form of threshold-vesting stock options (“TSOs”). The exercise price of the TSO is the Fair Market Value (“FMV”) of our common stock on the date the TSO is granted. In order for the TSOs to vest, our common stock must achieve and sustain the Threshold Price for at least 20 consecutive trading days at any time over the five years following the date of grant. The Threshold Price is determined by multiplying the FMV on the date of grant by the Estimated Annual Growth Rate (currently 7%) and compounding the product over a five-year period. TSOs granted in 2004 and thereafter must be exercised within 30 days of the vesting date. TSOs granted prior to 2004, all of which have vested, have a term of up to 10 years. The 1998 Incentive Plan provides for the issuance of 11.0 million shares, subject to certain customary adjustments to prevent dilution.

F-39

GENERAL GROWTH PROPERTIES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

The following table summarizes TSO activity by grant year.

	TSO Grant Year
	2006			2005			2004
Granted		1,400,000			1,000,000			1,031,480
Forfeited		(84,773	)		(118,332	)		(114,919	)
Vested and exercised		—			(723,920	)		(916,561	)
TSOs outstanding at December 31, 2006		1,315,227			157,748	(1)		—
Intrinsic value (in thousands)	$	2,315		$	2,653			—
Exercise price	$	50.47		$	35.41		$	30.94
Threshold price		70.79			49.66			43.39
Fair value of options on grant date		6.51			3.81			1.59
Remaining contractual term (in years)		4.2			0.1			—

(1) Substantially all of the outstanding 2005 grant year TSOs were exercised in January 2007.

In addition to the TSOs above, which are accounted for pursuant to SFAS 123(R), 156,516 vested, but unexercised, TSOs granted prior to 2004 are accounted for using the intrinsic value method.

Other Required Disclosures

The fair values of TSOs granted in 2006 and 2005 were estimated using the binomial method. The value of restricted stock grants is calculated as the average of the high and low stock prices on the date of the initial grant. The fair values of all other stock options were estimated on the date of grant using the Black-Scholes-Merton option pricing model. These fair values are affected by our stock price as well as assumptions regarding a number of highly complex and subjective variables. Expected volatilities are based on historical volatility of our stock price as well as that of our peer group, implied volatilities and various other factors. Historical data was used to estimate expected life and represents the period of time that options are expected to be outstanding. The weighted average estimated value of stock options and TSOs granted during 2006, 2005 and 2004 were based on the following assumptions:

	2006			2005			2004
Risk-free interest rate		4.43	%		3.40	%		3.44	%
Dividend yield		4.00			4.00			6.09
Expected volatility		22.94			21.61			20.10
Expected life (in years)		2.5 - 3.5			5.0			5.2

Compensation expense related to the Incentive Stock Plans, TSOs and restricted stock was $14.0 million in 2006, $11.1 million in 2005 and $6.5 million in 2004.

As of December 31, 2006, total compensation expense related to nonvested options, TSOs and restricted stock grants which had not yet been recognized was $17.4 million. Of this total, $7.9 million is expected to be recognized in 2007, $6.5 million in 2008, $2.5 million in 2009, $0.4 million in 2010 and $0.1 million in 2011. These amounts may be impacted by future grants, changes in forfeiture estimates, actual forfeiture rates which differ from estimated forfeitures and/or timing of TSO vesting.

We have a $200 million per fiscal year common stock repurchase program which gives us the ability to acquire some or all of the shares of common stock to be issued upon the exercise of the TSOs.

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GENERAL GROWTH PROPERTIES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

Employee Stock Purchase Plan

The General Growth Properties, Inc. Employee Stock Purchase Plan (the “ESPP”) was established to assist eligible employees in acquiring stock ownership interest in GGP. Under the ESPP, eligible employees make payroll deductions over a six-month purchase period. At the end of each six-month purchase period, the amounts withheld are used to purchase shares of our common stock at a purchase price equal to 85% of the lesser of the closing price of a share of a common stock on the first or last trading day of the purchase period. The ESPP is considered a compensatory plan pursuant to SFAS 123(R). A maximum of 1.5 million shares of our common stock are reserved for issuance under the ESPP. Since inception, an aggregate of approximately 1.4 million shares of our common stock have been sold under the ESPP, including 61,759 shares for the purchase period ending December 31, 2006 which were purchased at a price of $39.26 per share. Compensation expense related to the ESPP was $1.5 million in 2006, $2.0 million in 2005, and $1.3 million in 2004.

Defined Contribution Plan

We sponsor the General Growth 401(k) Savings Plan (the “401(k) Plan”) which permits all eligible employees to defer a portion of their compensation in accordance with the provisions of Section 401(k) of the Internal Revenue Code. Subject to certain limitations (including an annual limit imposed by the Internal Revenue Code), each participant is allowed to make before-tax contributions up to 50% of gross earnings, as defined. We add to a participant’s account through a matching contribution up to 5% of the participant’s annual earnings contributed to the 401(k) Plan. We match 100% of the first 4% of earnings contributed by each participant and 50% of the next 2% of earnings contributed by each participant. We recognized expense resulting from the matching contributions of $9.3 million in 2006, $7.5 million in 2005, and $5.3 million in 2004.

Dividend Reinvestment and Stock Purchase Plan

We have reserved up to 3.0 million shares of our common stock for issuance under the Dividend Reinvestment and Stock Purchase Plan (“DRSP”). In general, the DRSP allows participants to purchase our common stock from dividends received or additional cash investments. The stock is purchased at current market price, but no fees or commissions are charged to the participant. We expect to continue to satisfy DRSP common stock purchases by issuing new shares of our common stock or by repurchasing currently outstanding common stock. As of December 31, 2006, an aggregate of 598,161 shares of our common stock have been issued under the DRSP.

Note 11   Other Assets & Liabilities

The following table summarizes the significant components of “Prepaid Expenses and Other Assets.”

	December 31,
	2006		2005
	(In thousands)
Below-market ground leases	$	280,516	$	349,788
Receivables — finance leases and bonds		118,459		136,409
Security and escrow deposits		76,834		87,326
Real estate tax stabilization agreement		83,378		87,188
Special Improvement District receivable		64,819		66,206
Above-market tenant leases		53,981		77,094
Prepaid expenses		37,528		26,627
Funded defined contribution plan assets		17,119		20,062
Other		50,200		66,411
	$	782,834	$	917,111

F-41

GENERAL GROWTH PROPERTIES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

The following table summarizes the significant components of “Accounts Payable and Accrued Expenses.”

	December 31,
	2006		2005
	(In thousands)
Accounts payable and accrued expenses	$	200,936	$	217,829
Below-market tenant leases		117,963		182,270
Construction payables		188,038		105,789
Accrued interest		102,870		85,945
Hughes participation payable		90,793		61,783
Accrued real estate taxes		71,816		62,492
Accrued payroll and other employee liabilities		58,372		60,038
Deferred gains/income		56,414		75,488
Tenant and other deposits		32,887		18,651
Funded defined contribution plan liabilities		17,119		20,062
Above-market ground leases		15,961		16,433
Capital lease obligations		14,967		19,206
Other		82,056		88,457
	$	1,050,192	$	1,014,443

Note 12   Minority Interests

Common

Changes in outstanding Operating Partnership Common Units for the three years ended December 31, 2006 are as follows:

January 1, 2004	55,712,250
Exchanges for GGP common stock	(179,987	)
December 31, 2004	55,532,263
Conversion of Preferred Units into Common Units	729,890
Exchanges for GGP common stock	(3,200,258	)
December 31, 2005	53,061,895
Conversion of Preferred Units into Common Units	1,163,333
Exchanges for GGP common stock	(1,334,637	)
December 31, 2006	52,890,591

Under certain circumstances, the Common Units can be redeemed at the option of the holders for cash or, at our election, for shares of GGP common stock on a one-for-one basis. The holders of the Common Units also share equally with our common stockholders on a per share basis in any distributions by the Operating Partnership on the basis that one Common Unit is equivalent to one share of GGP common stock.

Also included in minority interests-common is minority interest in consolidated joint ventures of approximately $6.4 million as of December 31, 2006 and $13.6 million as of December 31, 2005.

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GENERAL GROWTH PROPERTIES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

Preferred

Components of minority interest — preferred as of December 31, 2006 and 2005 are as follows:

						Number
						of Units
						as of		Per Unit
	Coupon			Issuing		December 31,		Liquidation		Carrying Amount
Security Type	Rate			Entity		2006		Preference		2006		2005
										(In thousands)
Perpetual Preferred Units
Redeemable Preferred Units (“RPUs”)		8.95	%		LLC		240,000	$	250	$	60,000	$	60,000
Cumulative Preferred Units (“CPUs”)		8.25	%		LLC		20,000		250		5,000		5,000
											65,000		65,000
Convertible Preferred Units
Series B — JP Realty		8.50	%		GGPLP		1,294,471		50		64,724		68,129
Series C — Glendale Galleria		7.00	%		GGPLP		19,466		50		974		20,685
Series D — Foothills Mall		6.50	%		GGPLP		532,750		50		26,637		26,637
Series E — Four Seasons Town Centre		7.00	%		GGPLP		502,658		50		25,132		25,132
											117,467		140,583
Other preferred stock of consolidated subsidiaries		N/A			various		361		1,000		361		361
Total Minority Interest-Preferred										$	182,828	$	205,944

Holders of the RPUs and CPUs are entitled to receive cumulative preferential cash distributions prior to any distributions by the LLC to the Operating Partnership. Subject to certain limitations, the RPUs may be redeemed in cash by the LLC in April 2007 for the liquidation preference amount plus accrued and unpaid distributions and may be exchanged by the holders of the RPUs for an equivalent amount of GGP redeemable preferred stock. Such preferred stock provides for an equivalent 8.95% annual preferred distribution and is redeemable at our option for cash equal to the liquidation preference amount plus accrued and unpaid distributions.

The Convertible Preferred Units are convertible, with certain restrictions, at any time by the holder into Common Units of the Operating Partnership at the following rates:

	Number of Common
	Units for each
	Preferred Unit
Series B — JP Realty		3.000
Series C — Glendale Galleria		2.433
Series D — Foothills Mall		1.508
Series E — Four Seasons Town Centre		1.298

F-43

GENERAL GROWTH PROPERTIES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

Note 13   Accumulated Other Comprehensive Income

Components of accumulated other comprehensive income as of December 31, 2006 and 2005 are as follows:

	2006			2005
	(In thousands)
Net unrealized gains on financial instruments	$	1,386		$	4,702
Accrued pension adjustment		(705	)		(703	)
Foreign currency translation		9,238			6,510
Unrealized losses on available-for-sale securities		(337	)		(55	)
	$	9,582		$	10,454

Note 14   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.

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 $10.3 million in 2006, $10.5 million in 2005 and $3.6 million in 2004.

We periodically enter into contingent agreements for the acquisition of properties. Each acquisition is subject to satisfactory completion of due diligence and, in the case of property acquired under development, completion of the project. In conjunction with the acquisition of The Grand Canal Shoppes in 2004, we entered into an agreement (the “Phase II Agreement”) to acquire the multi-level retail space that is planned to be part of The Palazzo in Las Vegas, Nevada that will be connected to the existing Venetian and the Sands Expo and Convention Center facilities (the “Phase II Acquisition”) and The Grand Canal Shoppes. The Palazzo is currently under construction and is expected to be completed in early 2008. If completed as specified under the terms of the Phase II Agreement, we will purchase, payable upon grand opening, the Phase II Acquisition retail space at a price computed on a 6% capitalization rate on the projected net operating income of the Phase II retail space, as defined by the Phase II Agreement (“Phase II NOI”), up to $38 million and on a capitalization rate of 8% on Phase II NOI in excess of $38 million, all subject to a minimum purchase price of $250 million. Based on current construction plans, progress and estimated rents, we believe the actual purchase price will be approximately $600 million. The Phase II Agreement is subject to the satisfaction of customary closing conditions.

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:

	2007		2008		2009		2010		2011		Subsequent		Total
	(In thousands)
Long-term debt-principal	$	1,330,256	$	2,055,555	$	3,246,184	$	3,760,636	$	6,546,472	$	3,582,864	$	20,521,967
Retained debt-principal		6,847		2,446		2,606		119,694		775		37,742		170,110
Ground lease payments		18,795		18,838		18,862		18,870		18,731		712,147		806,243
Total	$	1,355,898	$	2,076,839	$	3,267,652	$	3,899,200	$	6,565,978	$	4,332,753	$	21,498,320

F-44

GENERAL GROWTH PROPERTIES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

Contingent Stock Agreement

In conjunction with the TRC Merger, we assumed TRC’s obligations under a Contingent Stock Agreement (“CSA”). TRC entered into the CSA in 1996 when they acquired The Hughes Corporation (“Hughes”). This acquisition included various assets, including Summerlin (the “CSA Assets”), a project in our Master Planned Communities segment. We agreed that the TRC Merger would not have a prejudicial effect on the former Hughes owners or their successors (the “Beneficiaries”) with respect to their receipt of securities pursuant to the CSA. We further agreed to indemnify and hold harmless the Beneficiaries against losses arising out of any breach by us of these covenants.

Under the CSA, we are required to issue shares of our common stock semi-annually (February and August) to the Beneficiaries. The number of shares to be issued is based on cash flows from the development and/or sale of the CSA Assets and our stock price. We account for the Beneficiaries’ share of earnings from the CSA Assets as an operating expense. We delivered 1.8 million shares of our common stock (including 1.7 million treasury shares) to the Beneficiaries in 2006 and 1.6 million (including 1.0 million treasury shares) in 2005.

We are also required to make a final distribution to the Beneficiaries in 2009. The amount of this distribution will be based on the appraised values of the CSA Assets and is expected to be significant. We will account for this distribution as additional investments in the related assets (that is, contingent consideration).

The issuance of shares pursuant to any of the semi-annual or final distributions could be dilutive to our existing stockholders if we issue new shares rather than treasury shares or shares purchased on the open market.

Hurricane Damages

In September 2005, two of our operating retail properties in Louisiana incurred hurricane and/or vandalism damage. Riverwalk Marketplace, which is located near the convention center in downtown New Orleans, partially reopened in November 2005. Though it is now fully opened, it is operating at levels below pre-hurricane levels as a result of reduced occupancy and tourist traffic. Oakwood Center, located in Gretna, Louisiana, is not expected to reopen until October 2007. We have comprehensive insurance coverage for both property damage and business interruption and, therefore, have recorded insurance recovery receivables for both of these coverages.

The net book value of the property damage at these properties is currently estimated to be approximately $37 million. However, we continue to assess the damage estimates and are having ongoing discussions with our insurance carriers regarding the scope of repair, cleaning, and replacement required. The actual net book value write-off could vary from this estimate. Changes to these estimates have been and will be recorded in the periods in which they are determined.

We believe it is probable that insurance proceeds will be sufficient to cover the cost of restoring the property damage and certain business interruption amounts; however, certain deductibles, limitations and exclusions are expected to apply with respect to both current and future matters. No determination has yet been made as to the total amount or timing of insurance payments. As of December 31, 2006, however, an aggregate of $32.5 million in insurance proceeds related to property damage and business interruption have been received. These proceeds have been applied against insurance recovery receivables. In addition, as certain disputes currently exist or may occur in the future with our insurance carriers, we have initiated litigation to preserve our rights concerning our claims. Finally, as of December 31, 2006, the majority of the remaining insurance recovery receivable represents the recovery of the net book value of fixed assets written off.

Note 15   Recently Issued Accounting Pronouncements

In February 2007, the FASB issued SFAS No. 159, “The Fair Value Option for Financial Assets and Financial Liabilities” (“SFAS No. 159”) which provides companies with an option to report selected financial assets and liabilities at fair value. The standard’s objective is to reduce both complexity in accounting for financial instruments

F-45

GENERAL GROWTH PROPERTIES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

and the volatility in earnings caused by measuring related assets and liabilities differently. SFAS No. 159 also establishes presentation and disclosure requirements designed to facilitate comparisons between companies that choose different measurement attributes for similar types of assets and liabilities. SFAS No. 159 is effective as of the beginning of an entity’s first fiscal year beginning after November 15, 2007. With certain limitations, early adoption is permitted. We are evaluating the impact of this new statement on our financial statements.

In September 2006, the SEC staff issued SEC Staff Accounting Bulletin (“SAB”) Topic 1N, “Financial Statements — Considering the Effects of Prior Year Misstatements When Quantifying Misstatements in Current Year Financial Statements” (“SAB 108”). SAB 108 addresses how a registrant should quantify the effect of an error on the financial statements. The SEC staff concludes in SAB 108 that a dual approach should be used to compute the amount of a misstatement. Specifically, the amount should be computed using both the “rollover” (current year income statement perspective) and “iron curtain” (year-end balance sheet perspective) methods. The adoption had no impact on our Consolidated Financial Statements.

In September 2006, the FASB issued SFAS No. 158, “Employers’ Accounting for Defined Benefit Pension and Other Postretirement Plans (an amendment of FASB Statements No. 87, 88, 106, and 132R)” (“SFAS 158”) which requires employers to fully recognize the obligations associated with single-employer defined benefit pension, retiree healthcare and other postretirement plans in their financial statements. Specifically, SFAS 158 requires an employer to:

(a)  Recognize in its statement of financial position an asset for a plan’s overfunded status or a liability for a plan’s underfunded status

(b)  Measure a plan’s assets and its obligations that determine its funded status as of the end of the employer’s fiscal year (with limited exceptions)

(c)  Recognize changes in the funded status of a defined benefit postretirement plan in the year in which the changes occur. Those changes will be reported in comprehensive income of a business entity.

The requirement to recognize the funded status of a benefit plan and the disclosure requirements are effective as of the end of the fiscal year ending after December 15, 2006. The requirement to measure plan assets and benefit obligations as of the date of the employer’s fiscal year-end statement of financial position is effective for fiscal years ending after December 15, 2008. We have adopted SFAS 158 as of and for the year-ended December 31, 2006. Due to the immateriality of our defined benefit pension plans, the impact of the adoption of SFAS 158 was not significant to our Consolidated Financial Statements.

In September 2006, the FASB also 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 information about the extent to which companies measure assets and liabilities at fair value, the information used to measure fair value, and the effect of fair value measurements on earnings. The standard applies whenever other standards require (or permit) assets or liabilities to be measured at fair value. The standard does not expand the use of fair value in any new circumstances. SFAS No. 157 is effective for financial statements issued for fiscal years beginning after November 15, 2007, and interim periods within those fiscal years. We do not believe that the adoption of SFAS No. 157 will have a material impact on our Consolidated Financial Statements.

In June 2006, the FASB issued Interpretation No. 48, “Accounting for Uncertainty in Income Taxes” (“FIN 48”), an interpretation of SFAS 109, “Accounting for Income Taxes,” to create a single model to address accounting for uncertainty in tax positions. FIN 48 clarifies the accounting for income taxes, by prescribing a minimum recognition threshold a tax position is required to meet before being recognized in the financial statements. FIN 48 also provides guidance on derecognition, measurement, classification, interest and penalties, accounting in interim periods, disclosure and transition. FIN 48 is effective for fiscal years beginning after December 15, 2006. We will adopt FIN 48 as of January 1, 2007, as required. The cumulative effect of adopting FIN 48 will be recorded in retained earnings and other accounts as applicable. We are evaluating the impact of FIN 48 but cannot estimate

F-46

GENERAL GROWTH PROPERTIES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

the impact to the financial statements because of the need to continue to assess the sufficiency of our positions with respect to measurement and recognition, including but not limited to, transfer pricing.

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

Note 16   Segments

We have two business segments which offer different products and services. Our segments are managed separately because each requires different operating strategies or management expertise. We do not distinguish or group our consolidated operations on a geographic basis. Further, all material operations are within the United States and no customer or tenant comprises more than 10% of consolidated revenues. Our reportable segments are as follows:

•  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

The operating measure used to assess operating results for the business segments is Real Estate Property Net Operating Income (“NOI”) which represents the operating revenues of the properties less property operating expenses, exclusive of depreciation and amortization. Management believes that NOI provides useful information about a property’s operating performance.

The accounting policies of the segments are the same as those described in Note 2, except that we account for unconsolidated real estate ventures using the proportionate share method rather than the equity method. Under the proportionate share method, our share of the revenues and expenses of the Unconsolidated Properties are combined with the revenues and expenses of the Consolidated Properties. Under the equity method, our share of the net revenues and expenses of the Unconsolidated Properties are reported as a single line item, “Equity in income of unconsolidated affiliates,” in our Consolidated Statements of Income and Comprehensive Income. This difference affects only the reported revenues and operating expenses of the segments and has no effect on our reported net earnings. In addition, other revenues include the NOI of discontinued operations and is reduced by the NOI attributable to our minority interest partners in consolidated joint ventures.

F-47

GENERAL GROWTH PROPERTIES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

Segment operating results are as follows:

	Year Ended December 31, 2006
	Consolidated			Unconsolidated			Segment
	Properties			Properties			Basis
	(In thousands)
Retail and Other
Property revenues:
Minimum rents	$	1,753,508		$	428,337		$	2,181,845
Tenant recoveries		773,034			187,782			960,816
Overage rents		75,945			15,966			91,911
Other, including minority interest		99,779			88,552			188,331
Total property revenues		2,702,266			720,637			3,422,903
Property operating expenses:
Real estate taxes		218,549			58,832			277,381
Repairs and maintenance		199,078			43,768			242,846
Marketing		48,626			13,184			61,810
Other property operating costs		373,020			154,010			527,030
Provision for doubtful accounts		22,078			793			22,871
Total property operating expenses		861,351			270,587			1,131,938
Retail and other net operating income		1,840,915			450,050			2,290,965
Master Planned Communities
Land sales		423,183			85,561			508,744
Land sales operations		(316,453	)		(62,304	)		(378,757	)
Master Planned Communities net operating income		106,730			23,257			129,987
Real estate property net operating income	$	1,947,645		$	473,307		$	2,420,952

F-48

GENERAL GROWTH PROPERTIES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

	Year Ended December 31, 2005
	Consolidated			Unconsolidated			Segment
	Properties			Properties			Basis
	(In thousands)
Retail and Other
Property revenues:
Minimum rents	$	1,670,387		$	393,740		$	2,064,127
Tenant recoveries		754,836			181,193			936,029
Overage rents		69,628			14,085			83,713
Other, including discontinued operations and minority interest		107,674			64,803			172,477
Total property revenues		2,602,525			653,821			3,256,346
Property operating expenses:
Real estate taxes		206,193			55,138			261,331
Repairs and maintenance		195,292			43,411			238,703
Marketing		63,522			14,705			78,227
Other property operating costs		390,051			120,381			510,432
Provision for doubtful accounts		13,868			4,857			18,725
Total property operating expenses		868,926			238,492			1,107,418
Retail and other net operating income		1,733,599			415,329			2,148,928
Master Planned Communities
Land sales		385,205			83,089			468,294
Land sales operations		(311,815	)		(60,826	)		(372,641	)
Master Planned Communities net operating income		73,390			22,263			95,653
Real estate property net operating income	$	1,806,989		$	437,592		$	2,244,581

F-49

GENERAL GROWTH PROPERTIES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

	Year Ended December 31, 2004
	Consolidated			Unconsolidated			Segment
	Properties			Properties			Basis
	(In thousands)
Retail and Other
Property revenues:
Minimum rents	$	1,058,732		$	293,175		$	1,351,907
Tenant recoveries		472,250			135,561			607,811
Overage rents		54,105			10,960			65,065
Other, including discontinued operations and minority interest		67,686			18,694			86,380
Total property revenues		1,652,773			458,390			2,111,163
Property operating expenses:
Real estate taxes		128,114			39,546			167,660
Repairs and maintenance		123,251			33,150			156,401
Marketing		48,220			13,351			61,571
Other property operating costs		207,909			74,589			282,498
Provision for doubtful accounts		10,375			2,766			13,141
Total property operating expenses		517,869			163,402			681,271
Retail and other net operating income		1,134,904			294,988			1,429,892
Master Planned Communities
Land sales		68,643			37,170			105,813
Land sales operations		(66,100	)		(37,225	)		(103,325	)
Master Planned Communities net operating income		2,543			(55	)		2,488
Real estate property net operating income	$	1,137,447		$	294,933		$	1,432,380

F-50

GENERAL GROWTH PROPERTIES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

The following reconciles NOI to GAAP-basis operating income and income from continuing operations:

	Years Ended December 31,
	2006			2005			2004
	(In thousands)
Real estate property net operating income	$	2,420,952		$	2,244,581		$	1,432,380
Unconsolidated Properties NOI		(473,307	)		(437,592	)		(294,933	)
Consolidated Properties NOI		1,947,645			1,806,989			1,137,447
Management and other fees		115,798			91,022			82,896
Property management and other costs		(184,705	)		(147,012	)		(100,267	)
General and administrative		(15,128	)		(13,053	)		(9,499	)
Depreciation and amortization		(690,194	)		(672,914	)		(364,854	)
Discontinued operations and minority interest in consolidated NOI		15,036			(6,048	)		(4,431	)
Operating income		1,188,452			1,058,984			741,292
Interest income		11,585			10,416			3,227
Interest expense		(1,117,437	)		(1,031,241	)		(472,185	)
Provision for income taxes		(98,984	)		(51,289	)		(2,383	)
Income allocated to minority interest		(37,761	)		(43,989	)		(105,274	)
Equity in income of unconsolidated affiliates		114,241			120,986			88,191
Income from continuing operations	$	60,096		$	63,867		$	252,868

The following reconciles segment revenues to GAAP-basis consolidated revenues:

	Years Ended December 31,
	2006			2005			2004
	(In thousands)
Segment basis total property revenues	$	3,422,903		$	3,256,346		$	2,111,163
Unconsolidated segment revenues		(720,637	)		(653,821	)		(458,390	)
Land sales		423,183			385,205			68,643
Management and other fees		115,798			91,022			82,896
Real estate net operating income attributable to minority interests, net of discontinued operations		15,036			(6,048	)		(4,431	)
GAAP-basis consolidated total revenues	$	3,256,283		$	3,072,704		$	1,799,881

The assets by segment and the reconciliation of total segment assets to the total assets in the consolidated financial statements at December 31, 2006 and 2005 are summarized as follows:

	2006			2005
	(In thousands)
Retail and Other	$	26,444,766		$	25,523,426
Master Planned Communities		2,144,268			2,116,588
Total segment assets		28,589,034			27,640,014
Unconsolidated Properties		(4,753,634	)		(4,308,854	)
Corporate and other		1,406,045			1,975,859
Total assets	$	25,241,445		$	25,307,019

F-51

GENERAL GROWTH PROPERTIES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

Note 17   Quarterly Financial Information (Unaudited)

	2006
	First			Second			Third			Fourth
	Quarter			Quarter			Quarter			Quarter
	(In thousands except for per share amounts)
Total revenues	$	828,619		$	709,810		$	746,032		$	971,823
Operating income		307,747	(b)		245,449			265,356			369,901
Income (loss) from continuing operations		23,014			(25,813	)		(8,161	)		71,056
Loss from discontinued operations		—			—			—			(823	)
Net income (loss) available to common shareholders		23,014			(25,813	)		(8,161	)		70,233
Earnings (loss) per share from continuing operations:
Basic		0.10			(0.11	)		(0.03	)		0.29
Diluted(a)		0.10			(0.11	)		(0.03	)		0.29
Earnings per share from discontinued operations:
Basic		—			—			—			—
Diluted		—			—			—			—
Earnings (loss) per share:
Basic		0.10			(0.11	)		(0.03	)		0.29
Diluted(a)		0.10			(0.11	)		(0.03	)		0.29
Distributions declared per share		0.41			0.41			0.41			0.45
Weighted-average shares outstanding:
Basic		240,621			241,330			241,150			241,779
Diluted		241,588			241,330			241,150			242,739

(a)	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.
(b)	Amounts reported differ from previously reported amounts as a result of reclassifications to conform to current period presentation.

F-52

GENERAL GROWTH PROPERTIES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

	2005
	First			Second		Third			Fourth
	Quarter			Quarter		Quarter			Quarter
	(In thousands except for per share amounts)
Total revenues	$	706,457		$	758,230	$	745,843		$	862,176
Operating income		240,478	(b)		235,436		261,399			321,670
Income (loss) from continuing operations		11,535			884		(8,521	)		59,967
Income from discontinued operations		1,530			1,768		1,687			6,703
Net income (loss) available to common shareholders		13,065			2,652		(6,834	)		66,670
Earnings (loss) per share from continuing operations:
Basic(a)		0.05			—		(0.04	)		0.25
Diluted(a)		0.05			—		(0.04	)		0.25
Earnings per share from discontinued operations:
Basic(a)		0.01			0.01		0.01			0.03
Diluted(a)		0.01			0.01		0.01			0.03
Earnings (loss) per share:
Basic		0.06			0.01		(0.03	)		0.28
Diluted		0.06			0.01		(0.03	)		0.28
Distributions declared per share		0.36			0.36		0.36			0.41
Weighted-average shares outstanding:
Basic		235,812			237,854		238,218			238,784
Diluted		236,588			238,922		238,218			239,736

(a)	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.
(b)	Amounts reported may differ from previously reported amounts as a result of reclassifications to conform to conform to current period presentation.

F-53

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Directors and Stockholders of

General Growth Properties, Inc.

Chicago, Illinois

We have audited the consolidated financial statements of General Growth Properties, Inc. and subsidiaries (the “Company”) as of December 31, 2006 and 2005, and for each of the three years in the period ended December 31, 2006, management’s assessment of the effectiveness of the Company’s internal control over financial reporting as of December 31, 2006, and the effectiveness of the Company’s internal control over financial reporting as of December 31, 2006, and have issued our reports thereon dated February 28, 2007; such consolidated financial statements and reports are included elsewhere in this Form 10-K. Our audits also included the consolidated financial statement schedule of the Company listed in the Index to Consolidated Financial Statements and Consolidated Financial Statement Schedule on page F-1 of this Form 10-K. This consolidated financial statement schedule is the responsibility of the Company’s management. Our responsibility is to express an opinion based on our audits. In our opinion, such consolidated financial statement schedule, when considered in relation to the basic consolidated financial statements taken as a whole, presents fairly, in all material respects, the information set forth therein.

Deloitte & Touche LLP

Chicago, Illinois

February 28, 2007

F-54

GENERAL GROWTH PROPERTIES, INC.
SCHEDULE III — REAL ESTATE AND ACCUMULATED DEPRECIATION
DECEMBER 31, 2006

								Costs Capitalized
								Subsequent to						Gross Amounts at Which
				Initial Cost(b)				Acquisition (c)						Carried at Close of Period (d)												Life Upon Which
						Buildings					Buildings					Buildings										Latest Income
						and					and					and				Accumulated		Date of		Date		Statement is
Name of Center	Location	Encumbrances (a)		Land		Improvements		Land			Improvements			Land		Improvements		Total		Depreciation (e)		Construction		Acquired		Computed
(In thousands)
Retail and Other:
Ala Moana Center	Honolulu, HI	$	1,500,000	$	336,229	$	473,771	$	—		$	106,974		$	336,229	$	580,745	$	916,974	$	128,627				1999		(e	)
Alameda Plaza	Pocatello, ID		—		740		2,060		—			16			740		2,076		2,816		231				2002		(e	)
Anaheim Crossing	Anaheim, CA		—		—		1,986		—			5			—		1,991		1,991		224				2002		(e	)
Animas Valley Mall	Farmington, NM		25,530		6,464		35,902		—			7,837			6,464		43,739		50,203		4,911				2002		(e	)
Apache Mall	Rochester, MN		51,647		8,110		72,993		—			24,062			8,110		97,055		105,165		20,593				1998		(e	)
Arizona Center	Phoenix, AZ		7,766		2,314		132,158		—			1,586			2,314		133,744		136,058		15,314				2004		(e	)
Augusta Mall	Augusta, GA		175,000		787		162,272		—			4,044			787		166,316		167,103		13,269				2004		(e	)
Austin Bluffs Plaza	Colorado Springs, CO		2,451		1,080		3,007		—			210			1,080		3,217		4,297		355				2002		(e	)
Bailey Hills Village	Eugene, OR		—		290		806		—			36			290		842		1,132		92				2002		(e	)
Baybrook Mall	Friendswood, TX		153,420		13,300		117,163		6,853			26,559			20,153		143,722		163,875		26,423				1999		(e	)
Bayshore Mall	Eureka, CA		32,214		3,005		27,399		—			36,753			3,005		64,152		67,157		28,588		1986-1987				(e	)
Bayside Marketplace	Miami, FL		65,865		—		177,801		—			2,460			—		180,261		180,261		18,912				2004		(e	)
Beachwood Place	Beachwood, OH		247,973		18,500		319,684		—			6,943			18,500		326,627		345,127		20,437				2004		(e	)
Bellis Fair	Bellingham, WA		65,569		7,616		47,040		(131	)		22,336			7,485		69,376		76,861		35,739		1987-1988				(e	)
Birchwood Mall	Port Huron, MI		39,982		1,769		34,575		1,274			19,815			3,043		54,390		57,433		25,427		1989-1990				(e	)
Boise Plaza	Boise, ID		—		374		1,042		—			40			374		1,082		1,456		124				2002		(e	)
Boise Towne Plaza	Boise, ID		11,431		3,988		11,101		—			68			3,988		11,169		15,157		1,261				2002		(e	)
Boise Towne Square	Boise, ID		76,149		23,449		131,001		1,019			17,662			24,468		148,663		173,131		16,933				2002		(e	)
The Boulevard Mall	Las Vegas, NV		113,032		16,490		148,413		(1,135	)		9,614			15,355		158,027		173,382		34,786				1998		(e	)
Burlington Town Center	Burlington, VT		31,501		1,637		32,798		—			3,135			1,637		35,933		37,570		7,630				2004		(e	)
Cache Valley Mall	Logan, UT		—		3,875		22,047		—			9,123			3,875		31,170		35,045		3,374				2002		(e	)
Cache Valley Marketplace	Logan, UT		—		1,500		1,583		1,639			2,086			3,139		3,669		6,808		297				2002		(e	)
Capital Mall	Jefferson City, MO		21,000		4,200		14,201		(287	)		10,248			3,913		24,449		28,362		10,314				1993		(e	)
Century Plaza	Birmingham, AL		2		3,164		28,514		—			5,895			3,164		34,409		37,573		9,769				1997		(e	)
Chapel Hills Mall	Colorado Springs, CO		120,009		4,300		34,017		—			64,947			4,300		98,964		103,264		33,254				1993		(e	)
Chico Mall	Chico, CA		59,300		16,958		45,628		—			1,135			16,958		46,763		63,721		4,239				2003		(e	)
Coastland Center	Naples, FL		100,925		11,450		103,050		—			14,935			11,450		117,985		129,435		25,525				1998		(e	)
Collin Creek	Plano, TX		75,223		26,250		122,991		—			1,266			26,250		124,257		150,507		11,310				2004		(e	)
Colony Square Mall	Zanesville, OH		41,083		1,000		24,500		597			23,868			1,597		48,368		49,965		22,355				1986		(e	)
Columbia Mall	Columbia, MO		89,226		5,383		19,663		—			28,976			5,383		48,639		54,022		23,113		1984-1985				(e	)
Coral Ridge Mall	Coralville, IA		102,705		3,364		64,218		49			21,028			3,413		85,246		88,659		23,761		1998-1999				(e	)
Coronado Center	Albuquerque, NM		175,249		33,072		148,799		—			2,118			33,072		150,917		183,989		17,404				2003		(e	)
Cottonwood Mall	Salt Lake City, UT		—		7,613		42,987		—			(271	)		7,613		42,716		50,329		5,103				2002		(e	)
Cottonwood Square	Salt Lake City, UT		—		1,558		4,339		—			90			1,558		4,429		5,987		497				2002		(e	)
Country Hills Plaza	Ogden, UT		13,923		3,620		9,080		—			588			3,620		9,668		13,288		1,053				2002		(e	)
The Crossroads	Portage, MI		41,397		6,800		61,200		—			22,326			6,800		83,526		90,326		16,344				1999		(e	)
Crossroads Center	St. Cloud, MN		87,945		10,813		72,203		2,393			37,875			13,206		110,078		123,284		16,065				2000		(e	)
Cumberland Mall	Atlanta, GA		161,806		15,199		136,787		10,042			52,959			25,241		189,746		214,987		32,261				1998		(e	)
Division Crossing	Portland, OR		5,648		1,773		4,935		—			323			1,773		5,258		7,031		584				2002		(e	)
Eagle Ridge Mall	Lake Wales, FL		49,244		7,620		49,561		—			17,627			7,620		67,188		74,808		22,965		1995-1996				(e	)
Eastridge Mall	Casper, WY		40,711		6,171		34,384		(79	)		4,806			6,092		39,190		45,282		4,549				2002		(e	)
Eastridge Mall	San Jose, CA		170,000		36,724		178,018		—			10,568			36,724		188,586		225,310		11,806				2006		(e	)
Eden Prairie Center	Eden Prairie, MN		83,388		465		19,024		28			127,429			493		146,453		146,946		27,988				1997		(e	)
Fallbrook Center	West Hills, CA		74,957		6,117		10,077		10			101,259			6,127		111,336		117,463		44,165				1984		(e	)
Faneuil Hall Marketplace	Boston, MD		97,201		—		122,098		—			1,224			—		123,322		123,322		12,128				2004		(e	)
Fashion Place	Murray, UT		149,649		21,604		206,484		—			3,695			21,604		210,179		231,783		13,680				2004		(e	)
Fashion Show	Las Vegas, NV		366,269		523,650		602,288		—			8,415			523,650		610,703		1,134,353		53,806				2004		(e	)
Foothills Mall	Fort Collins, CO		43,325		8,031		96,642		1,233			1,369			9,264		98,011		107,275		9,214				2003		(e	)
Fort Union	Midvale, UT		2,948		—		3,842		—			25			—		3,867		3,867		441				2002		(e	)

F-55

								Costs Capitalized
								Subsequent to						Gross Amounts at Which
				Initial Cost(b)				Acquisition (c)						Carried at Close of Period (d)												Life Upon Which
						Buildings					Buildings					Buildings										Latest Income
						and					and					and				Accumulated		Date of		Date		Statement is
Name of Center	Location	Encumbrances (a)		Land		Improvements		Land			Improvements			Land		Improvements		Total		Depreciation (e)		Construction		Acquired		Computed
(In thousands)
dFour Seasons Town Centre	Greensboro, NC		106,162		27,231		141,978		—			2,483			27,231		144,461		171,692		12,493				2004		(e	)
Fox River Mall	Appleton, WI		195,223		2,701		18,291		2,086			63,065			4,787		81,356		86,143		33,593		1983-1984				(e	)
Fremont Plaza	Las Vegas, NV		—		—		3,956		—			295			—		4,251		4,251		452				2002		(e	)
The Gallery At Harborplace	Baltimore, MD		106,176		17,912		174,410		—			3,459			17,912		177,869		195,781		13,373				2004		(e	)
Gateway Crossing Shopping Center	Bountiful, UT		15,945		4,104		11,422		—			600			4,104		12,022		16,126		1,408				2002		(e	)
Gateway Mall	Springfield, OR		41,156		8,728		34,707		—			36,551			8,728		71,258		79,986		31,570		1989-1990				(e	)
Glenbrook Square	Fort Wayne, IN		184,179		30,414		195,896		50			5,904			30,464		201,800		232,264		17,526				2003		(e	)
Governor’s Square	Tallahassee, FL		66,738		—		121,482		—			2,149			—		123,631		123,631		10,073				2004		(e	)
The Grand Canal Shoppes	Las Vegas, NV		410,778		—		766,232		—			12,938			—		779,170		779,170		53,895				2004		(e	)
Grand Teton Mall	Idaho Falls, ID		27,354		6,973		44,030		—			9,567			6,973		53,597		60,570		5,728				2002		(e	)
Grand Teton Plaza	Idaho Falls, ID		—		2,349		7,336		—			587			2,349		7,923		10,272		500				2004		(e	)
Grand Traverse Mall	Traverse City, MI		88,526		3,534		20,776		—			29,471			3,534		50,247		53,781		24,097		1990-1991				(e	)
Greenwood Mall	Bowling Green, KY		46,206		3,200		40,202		187			33,888			3,387		74,090		77,477		30,770				1993		(e	)
Halsey Crossing	Gresham, OR		2,764		—		4,363		—			115			—		4,478		4,478		509				2002		(e	)
Harborplace	Baltimore, MD		28,692		—		54,308		—			3,655			—		57,963		57,963		6,199				2004		(e	)
Hulen Mall	Fort Worth, TX		117,532		8,910		153,894		—			1,345			8,910		155,239		164,149		11,467				2004		(e	)
Jordan Creek Town Center	West Des Moines, IA		193,733		18,142		166,143		—			10,423			18,142		176,566		194,708		16,966		2004				(e	)
Knollwood Mall	St. Louis Park, MN		41,357		—		9,748		7,026			41,364			7,026		51,112		58,138		22,149				1978		(e	)
Lakeside Mall	Sterling Heights, MI		188,554		35,860		369,639		—			3,283			35,860		372,922		408,782		25,231				2004		(e	)
Lakeview Square	Battle Creek, MI		42,628		3,579		32,210		—			18,753			3,579		50,963		54,542		14,337				1996		(e	)
Landmark Mall	Alexandria, VA		—		28,396		67,235		—			(374	)		28,396		66,861		95,257		15,691				2003		(e	)
Lansing Mall	Lansing, MI		26,469		6,978		62,800		4,518			46,270			11,496		109,070		120,566		27,119				1996		(e	)
Lincolnshire Commons	Lincolnshire, IL		—		10,784		9,441		—			2,735			10,784		12,176		22,960		577		2006				(e	)
Lockport Mall	Lockport, NY		—		800		10,000		—			3,315			800		13,315		14,115		7,750				1986		(e	)
Lynnhaven Mall	Virginia Beach, VA		246,035		33,698		229,433		—			5,060			33,698		234,493		268,191		22,045				2003		(e	)
The Maine Mall	South Portland, ME		224,946		41,374		238,457		(297	)		8,317			41,077		246,774		287,851		19,803				2003		(e	)
Mall At Sierra Vista	Sierra Vista, AZ		—		3,652		20,450		—			746			3,652		21,196		24,848		2,625				2002		(e	)
The Mall In Columbia	Columbia, MD		193,913		34,650		522,363		—			14,936			34,650		537,299		571,949		35,580				2004		(e	)
Mall Of Louisiana	Baton Rouge, LA		238,000		24,591		246,452		—			27,699			24,591		274,151		298,742		18,740				2004		(e	)
Mall Of The Bluffs	Council Bluffs, IA		39,982		1,860		24,016		35			24,304			1,895		48,320		50,215		23,672		1985-1986				(e	)
Mall St. Matthews	Louisville, KY		150,829		—		176,583		—			5,106			—		181,689		181,689		14,483				2004		(e	)
Mall St. Vincent	Shreveport, LA		17,252		2,640		23,760		—			9,824			2,640		33,584		36,224		8,770				1998		(e	)
Market Place Shopping Center	Champaign, IL		106,737		7,000		63,972		—			52,828			7,000		116,800		123,800		29,596				1997		(e	)
Mayfair Mall	Wauwatosa, WI		185,783		14,707		224,847		—			34,172			14,707		259,019		273,726		48,592				2003		(e	)
Meadows Mall	Las Vegas, NV		106,917		24,634		104,088		(3,259	)		16,655			21,375		120,743		142,118		23,620				2003		(e	)
Metro Plaza	Baltimore, MD		—		1,050		10,340		—			148			1,050		10,488		11,538		1,758				2004		(e	)
Mondawmin Mall	Baltimore, MD		16,604		10,800		47,531		—			935			10,800		48,466		59,266		5,890				2004		(e	)
North Plains Mall	Clovis, NM		—		2,722		15,048		—			2,873			2,722		17,921		20,643		2,250				2002		(e	)
North Star Mall	San Antonio, TX		242,932		29,230		467,961		3,791			31,653			33,021		499,614		532,635		30,906				2004		(e	)
North Temple Shops	Salt Lake City, UT		—		168		468		—			6			168		474		642		53				2002		(e	)
North Town Mall	Spokane, WA		76,677		22,407		125,033		—			5,660			22,407		130,693		153,100		15,470				2002		(e	)
Northgate Mall	Chattanooga, TN		46,365		2,525		43,944		—			6,743			2,525		50,687		53,212		11,189				2003		(e	)
Northridge Fashion Center	Northridge, CA		131,160		16,618		149,563		248			36,364			16,866		185,927		202,793		41,982				1998		(e	)
Oak View Mall	Omaha, NE		118,248		12,056		113,042		—			4,134			12,056		117,176		129,232		20,025				2003		(e	)
Oakwood Center	Gretna, LA		95,000		2,830		137,574		—			(29,360	)		2,830		108,214		111,044		12,709				2004		(e	)
Oakwood Mall	Eau Claire, WI		53,309		3,267		18,281		—			27,224			3,267		45,505		48,772		23,823		1985-1986				(e	)
Oglethorpe Mall	Savannah, GA		146,937		16,036		92,978		—			7,005			16,036		99,983		116,019		20,672				2003		(e	)
Orem Plaza Center Street	Orem, UT		2,635		1,069		2,974		—			2,368			1,069		5,342		6,411		349				2002		(e	)
Orem Plaza State Street	Orem, UT		1,631		592		1,649		—			59			592		1,708		2,300		188				2002		(e	)
Oviedo Marketplace	Orlando, FL		53,795		24,017		23,958		(2,045	)		724			21,972		24,682		46,654		6,093				2004		(e	)

F-56

								Costs Capitalized
								Subsequent to						Gross Amounts at Which
				Initial Cost(b)				Acquisition (c)						Carried at Close of Period (d)												Life Upon Which
						Buildings					Buildings					Buildings										Latest Income
						and					and					and				Accumulated		Date of		Date		Statement is
Name of Center	Location	Encumbrances (a)		Land		Improvements		Land			Improvements			Land		Improvements		Total		Depreciation (e)		Construction		Acquired		Computed
(In thousands)
Owings Mills Mall	Owing Mills, MD		28,849		27,534		173,005		(6,208	)		6,274			21,326		179,279		200,605		17,401				2004		(e	)
Oxmoor Center	Louisville, KY		63,719		—		131,434		—			3,262			—		134,696		134,696		7,639				2004		(e	)
Paramus Park	Paramus, NJ		108,143		47,660		182,124		—			2,327			47,660		184,451		232,111		12,935				2004		(e	)
Park City Center	Lancaster, PA		155,556		8,465		177,191		—			11,711			8,465		188,902		197,367		38,340				2003		(e	)
Park Place	Tucson, AZ		183,530		4,996		44,993		(280	)		112,564			4,716		157,557		162,273		34,322				1996		(e	)
Peachtree Mall	Columbus, GA		93,011		22,052		67,679		—			4,921			22,052		72,600		94,652		8,773				2003		(e	)
Pecanland Mall	Monroe, LA		61,811		10,101		68,329		—			9,868			10,101		78,197		88,298		10,505				2002		(e	)
Piedmont Mall	Danville, VA		34,900		2,000		38,000		—			10,765			2,000		48,765		50,765		14,992				1995		(e	)
Pierre Bossier Mall	Bossier City, LA		37,130		4,367		35,353		—			10,265			4,367		45,618		49,985		11,192				1998		(e	)
Pine Ridge Mall	Pocatello, ID		27,448		4,905		27,349		—			6,179			4,905		33,528		38,433		3,864				2002		(e	)
The Pines	Pine Bluff, AR		—		1,489		17,627		(242	)		17,223			1,247		34,850		36,097		17,942		1985-1986				(e	)
Pioneer Place	Portland, OR		175,591		10,805		209,965		—			4,134			10,805		214,099		224,904		18,771				2004		(e	)
Plaza 800	Sparks, NV		—		—		5,430		—			33			—		5,463		5,463		549				2002		(e	)
Plaza 9400	Sandy, UT		—		—		9,114		—			196			—		9,310		9,310		1,053				2002		(e	)
Prince Kuhio Plaza	Hilo, HI		39,826		9		42,710		—			2,363			9		45,073		45,082		9,523				2002		(e	)
Providence Place	Providence, RI		430,434		—		502,809		—			3,969			—		506,778		506,778		38,968				2004		(e	)
Provo Towne Centre	Provo, UT		50,366		13,486		74,587		—			1,428			13,486		76,015		89,501		9,443				2002		(e	)
Red Cliffs Mall	St. George, UT		26,088		1,879		26,561		3,237			3,656			5,116		30,217		35,333		3,673				2002		(e	)
Red Cliffs Plaza	St. George, UT		—		—		2,366		—			371			—		2,737		2,737		280				2002		(e	)
Regency Square Mall	Jacksonville, FL		99,061		16,498		148,478		1,386			19,672			17,884		168,150		186,034		35,677				1998		(e	)
Ridgedale Center	Minnetonka, MN		185,368		10,710		272,607		—			4,881			10,710		277,488		288,198		18,047				2004		(e	)
Rio West Mall	Gallup, NM		22,844		—		19,500		—			6,919			—		26,419		26,419		13,432				1986		(e	)
River Falls Mall	Clarksville, IN		—		3,178		54,610		3,703			83,392			6,881		138,002		144,883		36,358		1989-1990				(e	)
River Hills Mall	Mankato, MN		83,018		3,714		29,014		993			36,360			4,707		65,374		70,081		24,992		1990-1991				(e	)
River Pointe Plaza	West Jordan, UT		4,082		1,302		3,623		—			327			1,302		3,950		5,252		428				2002		(e	)
Riverlands Shopping Center	LaPlace, LA		—		500		4,500		601			4,868			1,101		9,368		10,469		1,518				1998		(e	)
Riverside Plaza	Provo, UT		5,841		2,475		6,890		—			1,996			2,475		8,886		11,361		1,020				2002		(e	)
Rivertown Crossings	Grandville, MI		122,302		10,973		97,142		(3,747	)		50,099			7,226		147,241		154,467		34,979		1998-1999				(e	)
Riverwalk Marketplace	New Orleans, LA		52,696		—		94,513		—			(135	)		—		94,378		94,378		10,166				2004		(e	)
Rogue Valley Mall	Medford, OR		27,191		21,913		36,392		(95	)		3,847			21,818		40,239		62,057		4,494				2003		(e	)
Saint Louis Galleria	St. Louis, MO		246,818		36,774		184,645		9,005			15,116			45,779		199,761		245,540		19,268				2003		(e	)
Salem Center	Salem, OR		26,442		6,966		38,976		—			1,614			6,966		40,590		47,556		4,896				2002		(e	)
The Shops At La Cantera	San Antonio, TX		177,141		10,966		205,222		—			7,402			10,966		212,624		223,590		8,664		2005				(e	)
Sikes Senter	Wichita Falls, TX		63,672		12,759		50,567		—			2,780			12,759		53,347		66,106		7,035				2003		(e	)
Silver Lake Mall	Coeur d’Alene, ID		—		4,448		24,801		—			1,215			4,448		26,016		30,464		3,035				2002		(e	)
Sooner Mall	Norman, OK		59,206		2,700		24,300		(119	)		18,740			2,581		43,040		45,621		12,162				1996		(e	)
South Street Seaport	New York, NY		—		—		10,872		—			113			—		10,985		10,985		6,386				2004		(e	)
Southlake Mall	Morrow, GA		105,996		6,700		60,407		—			13,912			6,700		74,319		81,019		19,373				1997		(e	)
Southland Center	Taylor, MI		113,099		7,690		99,376		—			2,829			7,690		102,205		109,895		11,649				2004		(e	)
Southland Mall	Hayward, CA		85,478		13,921		75,126		200			10,438			14,121		85,564		99,685		9,780				2002		(e	)
Southshore Mall	Aberdeen, WA		—		650		15,350		—			5,665			650		21,015		21,665		11,820				1986		(e	)
Southwest Plaza	Littleton, CO		76,159		9,000		103,984		602			33,660			9,602		137,644		147,246		30,488				1998		(e	)
Spokane Valley Mall	Spokane, WA		39,168		11,455		67,046		—			(290	)		11,455		66,756		78,211		7,924				2002		(e	)
Spokane Valley Plaza	Spokane, WA		—		3,558		10,150		—			90			3,558		10,240		13,798		1,136				2002		(e	)
Spring Hill Mall	West Dundee, IL		81,444		12,400		111,644		—			19,849			12,400		131,493		143,893		28,306				1998		(e	)
Staten Island Mall	Staten Island, NY		170,322		222,710		339,102		—			4,614			222,710		343,716		566,426		25,414				2004		(e	)
Stonestown Galleria	San Francisco, CA		273,000		67,000		246,272		—			8,647			67,000		254,919		321,919		16,035				1998		(e	)
The Streets At Southpoint	Durham, NC		249,359		16,070		406,266		—			7,127			16,070		413,393		429,463		25,714				2004		(e	)
Three Rivers Mall	Kelso, WA		22,347		4,312		23,019		—			2,503			4,312		25,522		29,834		2,976				2002		(e	)
Town East Mall	Mesquite, TX		110,957		7,711		149,258		—			16,896			7,711		166,154		173,865		23,688				2004		(e	)

F-57

								Costs Capitalized
								Subsequent to					Gross Amounts at Which
				Initial Cost(b)				Acquisition (c)					Carried at Close of Period (d)												Life Upon Which
						Buildings					Buildings				Buildings										Latest Income
						and					and				and				Accumulated		Date of		Date		Statement is
Name of Center	Location	Encumbrances (a)		Land		Improvements		Land			Improvements		Land		Improvements		Total		Depreciation (e)		Construction		Acquired		Computed
(In thousands)
Tucson Mall	Tucson, AZ		123,014		—		181,424		—			29,650		—		211,074		211,074		27,217				2001		(e	)
Twin Falls Crossing	Twin Falls, ID		—		275		769		—			—		275		769		1,044		86				2002		(e	)
University Crossing	Orem, UT		11,904		3,420		9,526		—			587		3,420		10,113		13,533		1,131				2002		(e	)
Valley Hills Mall	Hickory, NC		59,374		3,444		31,025		2,212			43,648		5,656		74,673		80,329		18,080				1997		(e	)
Valley Plaza Mall	Bakersfield, CA		100,359		12,685		114,166		—			19,322		12,685		133,488		146,173		27,881				1998		(e	)
The Village Of Cross Keys	Baltimore, MD		618		18,070		57,285		—			1,980		18,070		59,265		77,335		5,301				2004		(e	)
Visalia Mall	Visalia, CA		44,801		11,052		58,172		—			5,984		11,052		64,156		75,208		7,578				2002		(e	)
Ward Centers	Honolulu, HI		217,938		164,007		89,321		1,475			47,540		165,482		136,861		302,343		17,609				2002		(e	)
West Valley Mall	Tracy, CA		60,982		9,295		47,789		1,591			34,720		10,886		82,509		93,395		27,183		1995				(e	)
Westlake Center	Seattle, WA		79,279		12,971		117,003		4,669			4,603		17,640		121,606		139,246		14,424				2004		(e	)
Westwood Mall	Jackson, MI		37,110		2,658		23,924		913			5,879		3,571		29,803		33,374		8,750				1996		(e	)
White Marsh Mall	Baltimore, MD		72,149		24,760		239,688		—			6,746		24,760		246,434		271,194		17,996				2004		(e	)
White Mountain Mall	Rock Springs, WY		—		1,363		7,611		—			6,078		1,363		13,689		15,052		1,954				2002		(e	)
Willowbrook	Wayne, NJ		178,659		28,810		444,762		—			6,544		28,810		451,306		480,116		30,390				2004		(e	)
Woodbridge Center	Woodbridge, NJ		217,513		50,737		420,703		—			2,568		50,737		423,271		474,008		30,958				2004		(e	)
Woodlands Village	Flagstaff, AZ		7,463		2,689		7,484		—			147		2,689		7,631		10,320		841				2002		(e	)
Yellowstone Square	Idaho Falls, ID		—		1,057		2,943		—			130		1,057		3,073		4,130		340				2002		(e	)
Other, including corporate and developments in progress			5,986,735		265,143		490,895		102,691			409,021		367,834		899,916		1,267,750		130,493
Total Retail and Other			20,415,833		3,074,441		17,056,164		158,432			2,715,913		3,232,873		19,772,077		23,004,950		2,766,833
Master Planned Communities
Bridgeland	Houston, TX		41,587		257,222		—		66,756			567		323,978		567		324,545		28				2004		(e	)
Columbia	Howard County, MD		—		315,944		—		(91,111	)		111		224,833		111		224,944		—				2004		(e	)
Fairwood	Prince George’s County, MD		—		136,434		—		(34,546	)		19		101,888		19		101,907		—				2004		(e	)
Summerlin	Summerlin, NV		52,835		990,179		—		12,858			110		1,003,037		110		1,003,147		10				2004		(e	)
Other			11,712		—		—		2,102			6		2,102		6		2,108		—
Total Master Planned Communities			106,134		1,699,779		—		(43,941	)		813		1,655,838		813		1,656,651		38
Total		$	20,521,967	$	4,774,220	$	17,056,164	$	114,491		$	2,716,726	$	4,888,711	$	19,772,890	$	24,661,601	$	2,766,871

F-58

GENERAL GROWTH PROPERTIES, INC.

NOTES TO SCHEDULE III

(a)	See description of mortgage notes and other property 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 and 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 $16.1 billion.
(e)	Depreciation is computed based upon the following estimated lives:

	Years
Buildings, improvements and carrying costs		40-45
Equipment, tenant improvements and fixtures		5-10

Reconciliation of Real Estate

	2006			2005			2004
	(In thousands)
Balance at beginning of year	$	23,583,536		$	23,308,792		$	9,677,348
Acquisitions		234,624			—			11,235,608
Change in Master Planned Communities land		4,775			5,363			1,645,700
Additions		855,529			496,362			804,556
Hurricane property damage provisions — Oakwood Center and Riverwalk (Note 14)		—			(53,022	)		—
Dispositions		(16,863	)		(173,959	)		(54,420	)
Balance at end of year	$	24,661,601		$	23,583,536		$	23,308,792

Reconciliation of Accumulated Depreciation

	2006			2005			2004
	(In thousands)
Balance at beginning of year	$	2,104,956		$	1,453,488		$	1,101,235
Depreciation expense		663,524			652,109			354,560
Dispositions and other		(1,609	)		(641	)		(2,307	)
Balance at end of year	$	2,766,871		$	2,104,956		$	1,453,488

F-59

EXHIBIT INDEX

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, incorporated herein by reference).
3	.2	Bylaws of General Growth Properties, Inc., as amended (previously filed as Exhibit 3(ii) to the Current Report on Form 8-K dated November 8, 2006 which was filed with the SEC on November 14, 2006, incorporated herein by reference).
3	.3	Certificate of Designations, Preferences and Rights of Increasing Rate Cumulative Preferred Stock, Series 1 Filed with the Delaware Secretary of State on February 26, 2007 (Filed herewith).
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, incorporated herein by reference).
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, incorporated herein by reference).
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, incorporated herein by reference).
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, incorporated herein by reference).
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, incorporated herein by reference).
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, incorporated herein by reference).
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, incorporated herein by reference).
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, incorporated herein by reference).
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, incorporated herein by reference).
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, incorporated herein by reference).
4	.11	Redemption Rights Agreement (PDC 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 10.6 to the Current Report on Form 8-K dated July 10, 2002 which was filed with the SEC on July 24, 2002, incorporated herein by reference).

S-1

4	.12	Redemption Rights Agreement (PDC 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 10.7 to the Current Report on Form 8-K dated July 10, 2002 which was filed with the SEC on July 24, 2002, incorporated herein by reference).
4	.13	Redemption Rights Agreement (Series C Preferred Units) dated November 27, 2002, by and among the Operating Partnership, General Growth Properties, Inc. and JSG, LLC (previously filed as Exhibit 10(LLL) to the Annual Report on Form 10-K for the year ended December 31, 2002 which was filed with the SEC on March 14, 2003, incorporated herein by reference).
4	.14	Redemption Rights Agreement (PDC Common Units) dated November 27, 2002, by and among the Operating Partnership, General Growth Properties, Inc. and JSG, LLC (previously filed as Exhibit 10(MMM) to the Annual Report on Form 10-K for the year ended December 31, 2002 which was filed with the SEC on March 14, 2003, incorporated herein by reference).
4	.15	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, incorporated herein by reference).
4	.16	Form of 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, 2005 which was filed with the SEC on March 31, 2006, incorporated herein by reference).
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, incorporated herein by reference).
4	.18	Registration Rights Agreement dated April 17, 2002, between General Growth Properties, Inc. and GSEP 2002 Realty Corp. (previously filed as Exhibit 10.3 to the Quarterly Report on Form 10-Q for the quarterly period ended March 31, 2002 which was filed with the SEC on May 13, 2002, incorporated herein by reference).
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, incorporated herein by reference).
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, incorporated herein by reference).
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, incorporated herein by reference).
4	.22	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, incorporated herein by reference).
4	.23	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, incorporated herein by reference).
4	.24	The Rouse Company LP, TRC Co-Issuer, Inc. and LaSalle Bank National Association (Trustee) Indenture dated May 5, 2006 (filed herewith).

S-2

4	.25	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, incorporated herein by reference).
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, incorporated herein by reference).
10	.2	First Amendment to the LP Agreement dated as of June 10, 1998 (previously filed as Exhibit 10(B) to the Annual Report on Form 10-K for the year ended December 31, 2002 which was filed with the SEC on March 14, 2003, incorporated herein by reference).
10	.3	Second Amendment to the LP Agreement dated as of June 29, 1998 (previously filed as Exhibit 10(C) to the Annual Report on Form 10-K for the year ended December 31, 2002 which was filed with the SEC on March 14, 2003, incorporated herein by reference).
10	.4	Third Amendment to the LP Agreement dated as of February 15, 2002 (previously filed as Exhibit 10.3 to the Current Report on Form 8-K dated July 10, 2002 which was filed with the SEC on July 24, 2002, incorporated herein by reference).
10	.5	Amendment to the LP Agreement dated as of April 24, 2002 (previously filed as Exhibit 10.4 to the Current Report on Form 8-K dated July 10, 2002 which was filed with the SEC on July 24, 2002, incorporated herein by reference).
10	.6	Fourth Amendment to the LP Agreement dated as of July 10, 2002 (previously filed as Exhibit 10.5 to the Current Report on Form 8-K dated July 10, 2002 which was filed with the SEC on July 24, 2002, incorporated herein by reference).
10	.7	Amendment to the LP Agreement dated as of November 27, 2002 (previously filed as Exhibit 10(G) to the Annual Report on Form 10-K for the year ended December 31, 2002 which was filed with the SEC on March 14, 2003, incorporated herein by reference).
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, incorporated herein by reference).
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, incorporated herein by reference).
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, incorporated herein by reference).
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, incorporated herein by reference).
10	.12	Amendment to the LP Agreement dated September 30, 2006 (filed herewith).
10	.13	Twelfth Amendment to the LP Agreement dated December 31, 2006 (filed herewith).
10	.14	Second Amended and Restated Operating Agreement of GGPLP L.L.C. dated April 17, 2002 (the “LLC Agreement”) (previously filed as Exhibit 10.1 to the Quarterly Report on Form 10-Q for the quarterly period ended March 31, 2002 which was filed with the SEC on May 13, 2002, incorporated herein by reference).
10	.15	First Amendment to the LLC Agreement dated April 23, 2002 (previously filed as Exhibit 10.2 to the Quarterly Report on Form 10-Q for the quarterly period ended March 31, 2002 which was filed with the SEC on May 13, 2002, incorporated herein by reference).

S-3

10	.16	Second Amendment to the LLC Agreement dated May 13, 2002 (previously filed as Exhibit 10.1 to the Quarterly Report on Form 10-Q for the quarterly period ended June 30, 2002 which was filed with the SEC on August 13, 2002, incorporated herein by reference).
10	.17	Third Amendment to the LLC Agreement dated October 30, 2002 (previously filed as Exhibit 10(Y) to the Annual Report on Form 10-K for the year ended December 31, 2002 which was filed with the SEC on March 14, 2003, incorporated herein by reference).
10	.18	Fourth Amendment to the LLC Agreement dated April 7, 2003 (previously filed as Exhibit 10.1 to the Quarterly Report on Form 10-Q for the quarterly period ended March 31, 2003 which was filed with the SEC on May 9, 2003, incorporated herein by reference).
10	.19	Fifth Amendment to the LLC Agreement dated April 11, 2003 (previously filed as Exhibit 10.2 to the Quarterly Report on Form 10-Q for the quarterly period ended March 31, 2003 which was filed with the SEC on May 9, 2003, incorporated herein by reference).
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, incorporated herein by reference).
10	.21	Stockholders Agreement dated December 20, 1995, among GGP/Homart, Inc., Operating Partnership, The Comptroller of the State of New York, As Trustee of the Common Retirement Fund (“NYSCRF”), Equitable Life Insurance Company of Iowa, USG Annuity & Life Company, Trustees of the University of Pennsylvania and General Growth Properties (previously filed as Exhibit 10.18 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, incorporated herein by reference).
10	.22	First Amendment to Stockholders Agreement dated September 10, 1996 (previously filed as Exhibit 10.19 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, incorporated herein by reference).
10	.23	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, incorporated herein by reference).
10	.24	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, incorporated herein by reference).
10	.25	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, incorporated herein by reference).
10	.26	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, incorporated herein by reference).
10	.27	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, incorporated herein by reference).
10	.28	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, incorporated herein by reference).
10	.29	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, incorporated herein by reference).
10	.30*	Summary of Non-Employee Director Compensation Program (previously filed as Exhibit 10.1 to the Current Report on Form 8-K dated July 26, 2005 which was filed with the SEC on July 28, 2005, incorporated herein by reference).

S-4

10	.31	Form of 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 99.1 to the Registration Statement on Form S-3/A (No. 333-120373) which was filed with the SEC on December 23, 2004, incorporated herein by reference).
10	.32	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, incorporated herein by reference).
10	.33	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, incorporated herein by reference).
10	.34*	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, incorporated herein by reference).
10	.35*	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, incorporated herein by reference).
10	.36*	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, incorporated herein by reference).
10	.37*	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 June 30, 2006 which was filed with the SEC on August 9, 2006, incorporated herein by reference).
10	.38*	Amendment dated November 8, 2006 and effective January 1, 2007 to General Growth Properties, Inc. 2003 Incentive Stock Plan (previously filed as Exhibit 10.2 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, incorporated herein by reference).
10	.39*	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, incorporated herein by reference).
10	.40*	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, incorporated herein by reference).
10	.41*	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, incorporated herein by reference).
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).

S-5

(*) A compensatory plan or arrangement required to be filed.

Pursuant to Item 601(b)(4)(iii) of Regulation S-K, the registrant has not filed debt instruments relating to long-term debt that is not registered and for which the total amount of securities authorized thereunder does not exceed 10% of total assets of the registrant and its subsidiaries on a consolidated basis as of December 31, 2006. The registrant agrees to furnish a copy of such agreements to the Commission upon request.

S-6

EX-3.3

                                                                     Exhibit 3.3

               CERTIFICATE OF DESIGNATIONS, PREFERENCES AND RIGHTS

                                       OF

              INCREASING RATE CUMULATIVE PREFERRED STOCK, SERIES I

                                       OF

                         GENERAL GROWTH PROPERTIES, INC.

            PURSUANT TO SECTION 151 OF THE GENERAL CORPORATION LAW OF

                              THE STATE OF DELAWARE


     General Growth Properties, Inc., a Delaware corporation (the
"Corporation"), hereby certifies that the following resolution creating a series
of its preferred stock, par value $100 per share, designated as the Increasing
Rate Cumulative Preferred Stock, Series I, has been adopted by the Board of
Directors of the Corporation (the "Board") on February 23, 2007 pursuant to the
authority contained in Article IV of its Restated Certificate of Incorporation
(as the same may be hereafter amended, modified or supplemented, the
"Certificate of Incorporation"), and in accordance with Section 151 of the
General Corporation Law of the State of Delaware (the "DGCL").

     WHEREAS, the Board is authorized, within the limitations and restrictions
stated in its Certificate of Incorporation, to provide for the issuance of
preferred stock in series and to establish the number of shares to be included
in each such series and to fix the designation, powers, preferences and rights
of the shares of each such series and the qualifications, limitations and
restrictions thereof; and

     WHEREAS, it is the desire of the Board, pursuant to its authority as
aforesaid, to authorize and fix the terms of the preferred stock to be
designated the "Increasing Rate Cumulative Preferred Stock, Series I" and the
number of shares constituting such preferred stock.

     NOW, THEREFORE, BE IT RESOLVED, that there is hereby authorized the
Increasing Rate Cumulative Preferred Stock, Series I on the terms and with the
provisions herein set forth.

I.   Certain Definitions.

     For purposes of this Certificate of Designations, Preferences and Rights,
the following terms shall have the meanings indicated:

     "Affiliate" has the meaning specified in the Contingent Stock Agreement.

     "Base Rate" has the meaning specified in Section III(c) hereof.

     "Board" has the meaning specified in the first paragraph of this
     Certificate.



     "Business Day" means any day on which state or federally chartered
financial institutions are not authorized or required to close in New York, New
York.

     "Capital Stock" means shares of any class or series of capital stock of the
Corporation, including the Common Stock and the Preferred Stock.

     "Certificate" means this Certificate of Designations, Preferences and
Rights, as the same may hereafter be amended, modified or supplemented.

     "Certificate of Incorporation" has the meaning specified in the first
paragraph of this Certificate.

     "Common Stock" means the common stock, par value $0.01 per share, of the
Corporation and any securities issued or issuable with respect to any such
common stock by way of stock dividend or stock split or in connection with a
combination of shares, recapitalization, merger, consolidation or other
reorganization or otherwise.

     "Contingent Stock Agreement" means that certain Contingent Stock Agreement
dated as of January 1, 1996, executed by The Rouse Company, a Maryland
corporation and predecessor in interest to the Corporation, for the benefit of
the Holders and the Representatives described therein, as the same may hereafter
be amended, modified or supplemented pursuant to the express terms thereof.

     "Corporation" has the meaning specified in the first paragraph of this
Certificate.

     "Current Share Value" means, as of any date (the "computation date"), the
average of the closing per share sales prices of Common Stock during the ten
trading days consisting of (i) the five consecutive trading days ending on the
last day of the calendar month immediately preceding the calendar month in which
the computation date falls, and (ii) the five consecutive trading days ending on
the computation date, in each case, on the Composite Tape of the New York Stock
Exchange or, if shares of Common Stock are not then listed on the New York Stock
Exchange, on the principal United States securities exchange registered under
the Securities Exchange Act of 1934, as amended, on which shares of Common Stock
are then listed or, if shares of Common Stock are not then listed on any such
stock exchange, the average of the average closing bid and ask quotations with
respect to a share of Common Stock during the ten trading days consisting of (A)
the five consecutive trading days ending on the last day of the calendar month
immediately preceding the computation date and (B) the five consecutive trading
days ending on the computation date, in each case, on The Nasdaq Stock Market or
any successor system then in use or, if no such quotations are then available,
the average of the bid and asked prices for such trading days as furnished by a
member firm of the New York Stock Exchange regularly making a market in the
Common Stock selected for such purpose by the Board or, if no such member firm
is then making a market in the Common Stock, the fair market value on the
computation date of a share of Common Stock as determined in good faith by a
majority of the members of the Board after consultation with an independent
financial advisor of recognized national standing.

     "DGCL" has the meaning specified in the first paragraph of this
     Certificate.

                                       2



     "Dividend Payment Date" means the first Business Day after the last day of
each Dividend Period.

     "Dividend Period" means the six-month period beginning on each January 1
and July 1 of each year; provided, however, that the final Dividend Period with
respect to any share of Exchangeable Preferred Stock shall end on the date that
such share of Exchangeable Preferred Stock is redeemed or exchanged by the
Corporation in accordance with the terms of this Certificate.

     "Dividend Rate" has the meaning specified in Section III(c) hereof.

     "Exchange" has the meaning specified in Section VI(a) hereof.

     "Exchange Notice" has the meaning specified in Section VI(c) hereof.

     "Exchangeable Preferred Stock" has the meaning specified in Section II
     hereof.

     "Issue Date" means, with respect to any share of Exchangeable Preferred
Stock, the actual original date of issuance of such share.

     "Junior Dividend Stock" means the Common Stock and any other Capital Stock
ranking junior to the Exchangeable Preferred Stock with respect to payments of
dividends.

     "Junior Liquidation Stock" means the Common Stock and any other Capital
Stock ranking junior to the Exchangeable Preferred Stock with respect to
distributions of assets upon Liquidation.

     "Junior Stock" means the Common Stock and any other Capital Stock ranking
junior to the Exchangeable Preferred Stock with respect to distributions of
assets upon Liquidation and with respect to payments of dividends.

     "Liquidation" means any dissolution, liquidation (complete or partial) or
winding up of the Corporation, whether voluntary or involuntary.

     "Liquidation Payment" has the meaning specified in Section IV(a) hereof.

     "Liquidation Value" means, with respect to any share of Exchangeable
Preferred Stock at any time, $10,000 plus all dividends (whether or not earned
or declared) accrued and unpaid on such share as of such time.

     "Merger" means the merger or consolidation of the Corporation with or into
another Person.

     "Parity Dividend Stock" means any Capital Stock ranking on a parity with
the Exchangeable Preferred Stock with respect to payments of dividends.

     "Parity Liquidation Stock" means any Capital Stock ranking on a parity with
the Exchangeable Preferred Stock with respect to distributions of assets upon
Liquidation.

                                       3



     "Parity Stock" means any Capital Stock ranking on a parity with the
Exchangeable Preferred Stock with respect to distributions of assets upon
Liquidation and with respect to payments of dividends.

     "Person" means any individual, firm, corporation, trust, association,
company, limited liability company, joint stock company, partnership, joint
venture, governmental authority or other entity or enterprise.

     "Preferred Stock" shall mean the preferred stock, par value $100 per share,
of the Corporation.

     "Prior Stock" means any Capital Stock ranking prior to the Exchangeable
Preferred Stock with respect to distributions of assets upon Liquidation or with
respect to payments of dividends.

     "Record Date" means, with respect to any Dividend Period, the date which is
15 days prior to the last day of such Dividend Period.

     "Redemption Notice" has the meaning specified in Section V hereof.

     "Redemption Price" means, with respect to any share of Exchangeable
Preferred Stock on any Dividend Payment Date, an amount equal to the sum of (i)
110% of the Liquidation Value (determined by excluding accrued and unpaid
dividends) of such share as of such Dividend Payment Date plus (ii) the amount
of any and all accrued and unpaid dividends (whether or not earned or declared)
on such share as of such Dividend Payment Date.

     "Representatives" has the meaning specified in the Contingent Stock
Agreement.

     "Series A Preferred Stock" means the Preferred Stock designated as Series A
Junior Participating Preferred Stock.

     "Series C Preferred Stock" means the Preferred Stock designated as 8.5%
Cumulative Convertible Preferred Stock, Series C.

     "Series G Preferred Stock" shall mean the Preferred Stock designated as
8.95% Cumulative Redeemable Preferred Stock, Series G.

     "Series H Preferred Stock" means the Preferred Stock designated as 7%
Cumulative Convertible Preferred Stock, Series H.

     "Spread" has the meaning specified in Section III(c) hereof.

     "Trust" has the meaning specified in Section VI(d) hereof.

II.  Designation and Number of Shares.

     A series of Preferred Stock, designated the "Increasing Rate Cumulative
Preferred Stock, Series I" (the "Exchangeable Preferred Stock"), is hereby
established. The par value of the Exchangeable Preferred Stock is $100 per
share, which is not a change in the par value per share

                                       4



of the Preferred Stock as set forth in the Certificate of Incorporation. The
authorized number of shares of Exchangeable Preferred Stock is 100,000. The
Exchangeable Preferred Stock shall not have any relative, participating,
optional or other special rights and powers other than as set forth herein.

III. Dividends.

     (a) With respect to each Dividend Period, the holder of record of each
share of Exchangeable Preferred Stock on the applicable Record Date shall be
entitled to receive on the applicable Dividend Payment Date, when, as and if
declared by the Board, out of funds legally available for the payment of
dividends, the dividends accrued on such share during such Dividend Period,
payable in cash. Such dividends with respect to each share of Exchangeable
Preferred Stock shall be cumulative and shall accrue (whether or not earned or
declared) from the Issue Date of such share until such share is redeemed or
exchanged in accordance with this Certificate.

     (b) The amount of dividends accrued on any share of Exchangeable Preferred
Stock at the end of any Dividend Period shall be the amount of any unpaid
dividends accrued thereon to and including the last day of such Dividend Period,
whether or not earned or declared. The amount of dividends accrued on any share
of Exchangeable Preferred Stock at any date other than the last day of any
Dividend Period shall be the sum of (i) the amount of any unpaid dividends
accrued thereon to and including the last day of the immediately preceding
Dividend Period, whether or not earned or declared, plus (ii) an amount
calculated on the basis of the Dividend Rate applicable to the Dividend Period
in which such date occurs for the period commencing with the first day of such
Dividend Period (or the Issue Date with respect thereto, if later) to and
including the date of calculation, based upon the number of days elapsed in such
Dividend Period in relation to the total number of days in such Dividend Period.
For purposes of this paragraph (b) dividends shall be deemed to accrue daily.

     (c) Each share of Exchangeable Preferred Stock that is outstanding during a
Dividend Period shall accrue dividends for such Dividend Period, based on the
applicable Liquidation Value of such share of Exchangeable Preferred Stock, at a
rate per annum (the "Dividend Rate") equal to the Base Rate plus the Spread, in
each case as in effect during such Dividend Period; provided, however, that in
the event that any share of Exchangeable Preferred Stock shall have an Issue
Date other than on the first day of any Dividend Period, the dividend with
respect to such share during the Dividend Period in which such Issue Date occurs
shall be calculated on the basis of the applicable Dividend Rate for such
Dividend Period for the period commencing with the Issue Date to and including
the last day of such Dividend Period. "Base Rate" means (i) with respect to the
Dividend Period during which the Corporation issues shares of Exchangeable
Preferred Stock for the first time, the dividend rate, as determined by a
nationally recognized investment banking firm selected by the Corporation for
such purpose and reasonably acceptable to the Representatives, which would be
required in order for the Corporation to successfully sell at par (i.e., stated
liquidation value), in a private placement transaction, a class or series of its
perpetual preferred stock as of such time and (ii) with each subsequent Dividend
Period, the dividend rate, as determined by a nationally recognized investment
banking firm selected by the Corporation for such purpose and reasonably
acceptable to the Representatives, which would be required in order for the
Corporation to successfully sell at par (i.e., stated liquidation value), in a

                                       5



private placement transaction, a class of its perpetual preferred stock as of
the first day of such Dividend Period. The "Spread" (i) for the Dividend Period
during which the Corporation issues shares of Exchangeable Preferred Stock for
the first time shall be 3.50% per annum and (ii) for each Dividend Period
thereafter shall be the Spread for the immediately preceding Dividend Period
plus 0.50%.

     (d) Except as provided in subsection II(e) herein, so long as any shares of
Exchangeable Preferred Stock are outstanding, (i) no dividends (other than in
Common Stock or other Junior Stock) shall be paid or set apart for payment upon
the Junior Stock or Parity Stock for any period and (ii) no Junior Stock or
Parity Stock 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 Capital Stock) by the Corporation (except by
conversion into or exchange for other Junior Stock or by redemptions for the
purpose of maintaining the Corporation's qualification as a real estate
investment trust ("REIT") for U.S. federal income tax purposes) unless, in the
case of either clause (i) or (ii), full cumulative dividends 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 Exchangeable Preferred Stock
for all Dividend Periods ending on or prior to the dividend payment date for
such Junior Stock or Parity Stock or the date of such redemption, purchase or
other acquisition.

     (e) When dividends are not paid in full (or a sum sufficient for such full
payment is not set apart for such payment) upon the Exchangeable Preferred Stock
and any other Parity Dividend Stock, all dividends declared upon the
Exchangeable Preferred Stock and any other Parity Dividend Stock shall be
declared pro rata so that the amount of dividends declared per share of
Exchangeable Preferred Stock and such Parity Stock shall in all cases bear to
each other the same ratio that accrued dividends per share on the Exchangeable
Preferred Stock and such other Capital Stock (which shall not include any
accumulation in respect of unpaid dividends for prior dividend periods if such
Parity Dividend Stock does not have a cumulative dividend) bear to each other.

IV.  Liquidation.

     (a) Each share of Exchangeable Preferred Stock shall be preferred over the
shares of Junior Liquidation Stock, as to assets, so that, in the event of any
Liquidation, the holders of Exchangeable Preferred Stock shall be entitled to
receive out of the assets of the Corporation available for distribution to its
stockholders (whether from capital, surplus or earnings), before any
distribution is made to the holders of shares of Junior Liquidation Stock upon
such Liquidation, an amount in cash equal to the Liquidation Value multiplied by
the number of outstanding shares of Exchangeable Preferred Stock (the
"Liquidation Payment"). If, upon any Liquidation, the assets (or proceeds
thereof) distributable among the holders of Exchangeable Preferred Stock and any
Parity Liquidation Stock are insufficient to pay the Liquidation Payment and the
liquidating payments to be made with respect to such Parity Liquidation Stock in
full, then such assets (or the proceeds thereof) shall be distributable among
such holders ratably in accordance with the respective amounts which would be
payable on such shares if all amounts payable thereon were payable in full.

                                       6



     (b) Written notice of any Liquidation, stating a payment date, the amount
of the Liquidation Payment and the place where the amount distributable shall be
payable, shall be given, not less than 30 nor more than 60 days prior to the
payment date stated therein, to each holder of record of Exchangeable Preferred
Stock.

     (c) For the purposes of this Section IV, neither any Merger nor any
voluntary sale, lease, conveyance, exchange or transfer (for cash, shares of
stock, securities or other consideration) of all or substantially all of the
property or assets of the Corporation shall be deemed to be a Liquidation,
unless such voluntary sale, lease, conveyance, exchange or transfer shall be in
connection with a plan of liquidation, dissolution or winding up of the
Corporation.

     (d) After the payment in cash to the holders of Exchangeable Preferred
Stock of the full amount of the Liquidation Payment with respect to all
outstanding shares of Exchangeable Preferred Stock, the holders of outstanding
shares of Exchangeable Preferred Stock shall have no right or claim, based
solely on their ownership of shares of Exchangeable Preferred Stock, to any of
the remaining assets of the Corporation.

V.   Redemption.

     (a) The holder of any share of Exchangeable Preferred Stock may, at his or
its option elect to have the Corporation redeem, on any Dividend Payment Date,
all or any number of whole shares of Exchangeable Preferred Stock held by such
holder on such Dividend Payment Date, such election to be made by providing
written notice of such election and the number of shares of Exchangeable
Preferred Stock elected to be redeemed to the Corporation (a "Redemption
Notice") not less than 30 nor more than 60 days prior to the applicable Dividend
Payment Date; provided, however, that in no event may a Redemption Notice be
given with respect to any share of Exchangeable Preferred Stock prior to the
first anniversary of the Issue Date of such share. The Corporation shall, on the
applicable Dividend Payment Date, redeem the shares of Exchangeable Preferred
Stock elected to be redeemed pursuant to such Redemption Notice and pay the
holder of such shares the Redemption Price therefor, provided the Corporation
has sufficient legally available funds for such purpose and otherwise is
permitted to do so under the Certificate of Incorporation (provided that any
failure to redeem any such shares due to the Corporation not having sufficient
legally available funds for such purpose shall cause the Special Voting Right in
Section VII to become exercisable). Prior to such Dividend Payment Date, as
promptly as possible after the Redemption Price can be determined, the
Corporation shall deliver to each holder of shares to be redeemed an accurate
copy of the calculation of the Redemption Price. In the event that the
Corporation is required to redeem any shares of Exchangeable Preferred Stock and
does not have sufficient funds legally available to redeem all of such shares or
otherwise is not permitted to do so under the Certificate of Incorporation, it
shall use all of the funds that it does have available and is permitted to use
for such purpose, if any, to redeem such number of shares of Exchangeable
Preferred Stock as is possible with such funds, pro rata, among all holders of
Exchangeable Preferred Stock which have previously provided the Corporation with
a Redemption Notice and for which all or any portion of the shares of
Exchangeable Preferred Stock elected to be redeemed thereunder have not been
redeemed.

                                       7



     (b) Upon any redemption of shares of Exchangeable Preferred Stock, the
shares of Exchangeable Preferred Stock so redeemed shall have the status of
authorized and unissued shares of preferred stock of the Corporation,
unclassified as to series, and the number of shares of preferred stock which the
Corporation shall have authority to issue shall not be decreased by the
redemption of such shares of Exchangeable Preferred Stock; provided, however,
that no shares of Exchangeable Preferred Stock which are redeemed shall be
reissued as Exchangeable Preferred Stock except pursuant to the Contingent Stock
Agreement.

VI.  Exchange.

     (a) Except as provided below, the Corporation may, at its sole option, on
any Dividend Payment Date, exchange shares of Common Stock for any shares of
Exchangeable Preferred Stock then outstanding, in whole or in part (each, an
"Exchange"); provided, however, that, as a condition to any Exchange, the
Corporation shall simultaneously with such Exchange pay the holder of each share
of Exchangeable Preferred Stock being exchanged an amount equal to the amount of
any and all accrued and unpaid dividends (whether or not earned or declared) on
such share of Exchangeable Preferred Stock to the date of such Exchange.

     (b) In connection with any Exchange, the number of shares of Common Stock
to be exchanged for each share of Exchangeable Preferred Stock shall be a number
equal to the Liquidation Value of such share of Exchangeable Preferred Stock on
the Dividend Payment Date on which such Exchange is to be consummated (after
giving effect to the payment of accrued and unpaid dividends pursuant to Section
VI(a) above) divided by Current Share Value as of the last day of the Dividend
Period immediately preceding the Dividend Payment Date on which such Exchange is
to be consummated.

     (c) Not less than 30 nor more than 60 days prior to the date fixed for any
Exchange, a notice of the time, date and place thereof shall be given to the
holders of record of the shares of Exchangeable Preferred Stock to be exchanged
(an "Exchange Notice"), such Exchange Notice to specify the number of shares of
Exchangeable Preferred Stock to be exchanged and the date fixed for such
Exchange. Upon giving any Exchange Notice, the Corporation shall be obligated to
effect the Exchange described therein.

     (d) The Corporation may, prior to the Dividend Payment Date on which any
shares of Exchangeable Preferred Stock are to be exchanged, deposit the
aggregate number of shares of Common Stock and the amount of any dividends
required to be paid pursuant to paragraph (a) above in an irrevocable trust with
a bank or trust company located in New York, New York and having capital and
surplus of not less than $500,000,000 (a "Trust"), for the benefit of the
holders of the shares of Exchangeable Preferred Stock to be exchanged. If notice
of such Exchange shall have been duly mailed, and upon making such deposit, or,
if no such deposit is made, then upon the applicable Dividend Payment Date
(provided that the shares of Common Stock and dividends required to be delivered
and paid in exchange therefor are made available by the Corporation on such
date), the holders of the shares of Exchangeable Preferred Stock to be exchanged
on such Dividend Payment Date shall cease to be stockholders with respect to the
shares of Exchangeable Preferred Stock to be exchanged and, thereafter, such
shares shall no longer be transferable on the books of the Corporation and such
holders shall have no interest in or claim against the Corporation with respect
to such shares other than the right to receive the

                                       8



shares of Common Stock for which such shares are being exchanged and any
dividends required to be paid thereon pursuant to paragraph (a) above upon
surrender of the certificate or certificates for such shares. Any shares of
Common Stock or funds deposited with a Trust in connection with any Exchange
which are unclaimed at the end of two years from the date fixed for such
Exchange shall be redelivered and repaid to the Corporation upon its request
and, thereafter, the holders of shares of Exchangeable Preferred Stock which are
the subject of such Exchange shall look only to the Corporation for delivery of
such shares of Common Stock and the payment of such dividends. The Board may
cause the transfer books of the Corporation to be closed with respect to any
shares of Exchangeable Preferred Stock which are the subject of an Exchange
Notice.

     (e) If less than all of the outstanding shares of Exchangeable Preferred
Stock are to be exchanged in connection with any Exchange, the shares of
Exchangeable Preferred Stock to be exchanged shall be determined pro rata (as
nearly as possible) among all holders of Exchangeable Preferred Stock, according
to the respective number of shares of Exchangeable Preferred Stock held by each
such holder (and for such purpose, if any holder holds shares of Exchangeable
Preferred Stock evidenced by more than one certificate, such Exchange shall also
be allocated on such basis among such certificates as such holder shall request
on a timely basis).

     (f) Upon any exchange of shares of Exchangeable Preferred Stock pursuant to
this Section VI, the shares of Exchangeable Preferred Stock so exchanged shall
have the status of authorized and unissued shares of preferred stock of the
Corporation, unclassified as to series, and the number of shares of preferred
stock which the Corporation shall have authority to issue shall not be decreased
by the exchange of such shares of Exchangeable Preferred Stock; provided,
however, that no shares of Exchangeable Preferred Stock which are exchanged
shall be reissued as Exchangeable Preferred Stock except pursuant to the
Contingent Stock Agreement.

VII. Voting.

     (a) The holders of shares of Exchangeable Preferred Stock shall have no
voting rights whatsoever, except for any voting rights to which such holders may
be entitled under the laws of the State of Delaware and except that the holders
of the outstanding shares of Exchangeable Preferred Stock shall have the
exclusive right (the "Special Voting Right"), voting separately as a class, to
elect one of the members of the Board if and whenever at any time or times (i)
dividends (whether or not earned or declared) payable on Exchangeable Preferred
Stock for one or more Dividend Periods shall be in arrears and unpaid or (ii)
the Corporation shall fail to effect any redemption required to be made pursuant
to Section V hereof or any Exchange required to be made pursuant to Section VI
hereof. If the Special Voting Right shall vest as provided in the preceding
sentence, it shall continue until such time as (A) all cumulative dividends
accumulated on all shares of Exchangeable Preferred Stock (whether or not earned
or declared) shall have been paid in full, (B) all redemptions required to be
made pursuant to Section V hereof shall have been made and (C) all Exchanges
required to be made pursuant to Section VI hereof have been made, at which time
the Special Voting Right shall terminate, subject to revesting in the event of
each and every subsequent occurrence of one or more of the events described in
clauses (i) and (ii) of the preceding sentence.

                                       9



     (b) Upon the vesting of the Special Voting Right, the authorized number of
directors constituting the Board shall, without further action, be increased by
one and the vacancy so created shall be filled only by vote of the holders of
the outstanding shares of Exchangeable Preferred Stock. Whenever the Special
Voting Right shall have vested, such Right may be exercised initially either at
a special meeting of the holders of Exchangeable Preferred Stock, called as
hereinafter provided, or at any annual meeting of stockholders, or by the
written consent of the holders of outstanding shares of Exchangeable Preferred
Stock. Each director elected by the holders of the Exchangeable Preferred Stock
upon exercise of the Special Voting Right shall hold office until the next
annual meeting of stockholders and until his successor shall have been duly
elected and qualified; provided, however, that the term of office of any
incumbent director so elected shall terminate concurrently with the termination
of the Special Voting Right and upon such termination the number of directors
constituting the Board shall, without further action, be reduced by one, subject
always to increase as provided above upon revesting of the Special Voting Right.

     (c) At any time when the Special Voting Right shall have vested and if such
Right shall not already have been initially exercised, a proper officer of the
Corporation shall, upon the written request of the holders of record of at least
10% of the outstanding shares of Exchangeable Preferred Stock, addressed to the
Secretary of the Corporation, call a special meeting of the holders of
Exchangeable Preferred Stock and of any other class or classes of stock having
voting power with respect thereto for the purpose of electing directors. Such
meeting shall be held at the earliest practicable date upon the notice required
for annual meetings of stockholders at the place for holding annual meetings of
stockholders of the Corporation or, if none, at a place reasonably designated by
the Secretary of the Corporation. If such meeting shall not be called by the
proper officers of the Corporation within 20 days after the date of any request
made as aforesaid, then the holders of record of at least 10% of the issued and
outstanding shares of Exchangeable Preferred Stock which would be entitled to
vote at such meeting may designate in writing one of their number to call such
meeting at the expense of the Corporation, and such meeting may be called by
such Person so designated upon the notice required for annual meetings of
stockholders and shall be held at the place for holding annual meetings of
stockholders of the Corporation or, if none, at a place reasonably designated by
such Person. Any holder of Exchangeable Preferred Stock which would be entitled
to vote at such meeting shall have access to the stock books of the Corporation
for the purpose of causing a meeting of stockholders to be called pursuant to
the provisions of this paragraph (c).

     (d) At any meeting held for the purpose of electing directors at which the
holders of Exchangeable Preferred Stock are entitled to exercise the Special
Voting Right, the presence (in person or by proxy) of the holders of 33 1/3% of
the then issued and outstanding shares of Exchangeable Preferred Stock shall be
required and shall be sufficient to constitute a quorum of such class for the
exercise of the Special Voting Right. At any such meeting or adjournment
thereof, (i) the absence of a quorum of holders of Exchangeable Preferred Stock
shall not prevent the election of directors other than the director to be
elected by such holders and the absence of a quorum or quorums of the holders of
capital stock entitled to elect such other directors shall not prevent the
election of the director to be elected by the holders of Exchangeable Preferred
Stock pursuant to the exercise of the Special Voting Right and (ii) in the
absence of a quorum of the holders of any class of stock entitled to vote for
the election of directors, a majority of the holders present (in person or by
proxy) of such class shall have the power to adjourn the meeting for the
election of directors which the holders of such class are entitled to elect,
from time to time, without notice other than announcement at the meeting, until
a quorum shall be present.

                                       10



     (e) In exercising the Special Voting Right, each share of Exchangeable
Preferred Stock shall be entitled to one vote.

     (f) Notwithstanding the foregoing, in the event that, at any time, the
Special Voting Right is then exercisable on account of a dividend arrearage and
other holders of Preferred Stock have the then exercisable right to elect one or
more directors on account of a dividend arrearage, then (i) any director
previously elected solely by the holders of Exchangeable Preferred Stock shall
be deemed to have resigned, (ii) the holders of the Exchangeable Preferred Stock
and such other holders will vote together for the election of such one or more
directors, (iii) each share entitled to vote will have the number of votes equal
to the base liquidation preference thereof divided by $25, (iv) each director
will be elected by a majority of the votes entitled to be cast and (v) the
holders of Exchangeable Preferred Stock shall not have the independent right to
elect a director.

VIII. Ranking.

     All shares of Exchangeable Preferred Stock shall rank:

     (a) senior, both as to payments of dividends and as to distributions of
assets upon any Liquidation, to all shares of Junior Stock, whether presently
outstanding or issued after the date hereof;

     (b) senior, as to payments of dividends, to all shares of Junior Dividend
Stock, whether presently outstanding or issued after the date hereof;

     (c) senior, as to distributions of assets upon any Liquidation, to all
shares of Junior Liquidation Stock, whether presently outstanding or issued
after the date hereof;

     (d) on a parity, as to payments of dividends and as to distributions of
assets upon any Liquidation, with all shares of Parity Stock, whether presently
outstanding or issued after the date hereof;

     (e) on a parity, as to payments of dividends, with all shares of Parity
Dividend Stock, whether presently outstanding or issued after the date hereof;

     (f) on a parity, as to distributions of assets upon any Liquidation, with
all shares of Parity Liquidation Stock, whether presently outstanding or issued
after the date hereof; and

     (g) junior, as to payments of dividends and as to distributions of assets
upon any Liquidation, to all shares of Prior Stock, issued after the date hereof
in accordance with the terms hereof.

     As of the date hereof, (i) no shares of Prior Stock are authorized or
outstanding, (ii) no shares of Parity Dividend Stock or Parity Liquidation Stock
are authorized or outstanding except for Series C Preferred Stock, Series G
Preferred Stock and Series H Preferred Stock and (iii) no

                                       11



shares of Junior Dividend Stock or Junior Liquidation Stock are authorized or
outstanding except for shares of Series A Preferred Stock and Common Stock.

IX.  Non-Assessability.

     The shares of Exchangeable Preferred Stock when issued, shall be fully-paid
and nonassessable.

X.   Preemptive Rights.

The  Exchangeable Preferred Stock is not entitled to any preemptive rights or
     subscription rights in respect of any Capital Stock.

XI.  Registration Books, etc.

         The Corporation will keep, or cause to be kept, at its principal office
(or at the office of its agent for such purpose) proper books in which the names
and addresses of the holders of shares of Exchangeable Preferred Stock issued by
the Corporation shall be registered and in which transfers of such shares may be
registered. The Corporation may treat the registered holder of any shares of
Exchangeable Preferred Stock as the absolute owner thereof for the purpose of
receiving all dividends and redemption payments thereon and for all other
purposes, and the Corporation shall not be affected by any notice or knowledge
to the contrary.

XII. Certain Restrictions.

     (a) So long as any shares of Exchangeable Preferred Stock are outstanding,
the Corporation will not, either directly or indirectly or through a Merger,
without either (1) the written consent of the Representatives or (2) the
affirmative vote (at a meeting) or the written consent (with or without a
meeting) of the holders of at least 66 2/3% of the shares of Exchangeable
Preferred Stock at the time outstanding:

         (i) issue (or approve the issuance of) any shares of Prior Stock or
increase the authorized number of shares of Prior Stock;

         (ii) amend, alter or repeal any of the provisions of this Certificate,
the Certificate of Incorporation or the Corporation's bylaws, so as to affect
adversely the preferences, special rights or powers of the Exchangeable
Preferred Stock;

         (iii) issue (or approve the issuance of) any shares of Exchangeable
Preferred Stock except pursuant to the Contingent Stock Agreement;

         (iv) redeem, retire, purchase or otherwise acquire, or permit any of
the Corporation's Affiliates to redeem, purchase or otherwise acquire, any
shares of Exchangeable Preferred Stock except as provided in Sections V and VI
hereof;

         (v) approve or consummate any Merger which would affect adversely the
preferences, special rights or powers of the Exchangeable Preferred Stock; or

                                       12



         (vi) approve any Exchange of less than all the Exchangeable Preferred
Stock at the time outstanding unless the full accrued dividends (whether or not
earned or declared) for all prior and then current Dividend Periods shall either
(A) have been paid or (B) declared and a sum sufficient for the payment thereof
set apart for such payment;

     (b) So long as any shares of Exchangeable Preferred Stock are outstanding,
the Corporation will not, either directly or indirectly or through a Merger,
without the affirmative vote (at a meeting) or the written consent (with or
without a meeting) of at least 66 2/3% of the shares of Exchangeable Preferred
Stock at the time outstanding take any action which would amend the provisions
hereof relating to dividends on, or redemptions or exchanges of, the
Exchangeable Preferred Stock so as to adversely affect the holders of the
Exchangeable Preferred Stock.

     (c) So long as the Corporation shall be obligated (contingently or
otherwise) to issue shares of Exchangeable Preferred Stock pursuant to the
Contingent Stock Agreement, the Corporation will not, either directly or
indirectly or through a Merger, at any time when no shares of Exchangeable
Preferred Stock are outstanding, without the prior written consent of the
Representatives, take (or cause to be taken) any of the actions described in
clauses (i) and (vi) of paragraph (a) above or in paragraph (b) above.

     (d) So long as the Corporation shall be in default of any obligation to
make any redemption pursuant to Section V hereof or any obligation to make any
Exchange pursuant to Section VI hereof, the Corporation shall not directly or
indirectly purchase, redeem or discharge any mandatory redemption, sinking fund
or any other similar obligation in respect of any shares of any class or series
of Junior Stock, Parity Dividend Stock or Parity Liquidation Stock.

XIII. No Consent for Certain Actions.

     Notwithstanding anything to contrary contained herein, no consent of the
holders of Exchangeable Preferred Stock or the Representatives shall be required
for (a) the creation of any indebtedness of any kind of the Corporation, (b) the
creation of any class of Junior Stock or Parity Stock, (c) any increase or
decrease in the amount of authorized or issued Junior Stock or Parity Stock or
any increase, decrease or change in the par value thereof, (d) the occurrence of
any Merger, entity conversion, share exchange, recapitalization of the Capital
Stock or other business combination or reorganization so long as either (i) the
Corporation is the surviving entity and the Exchangeable Preferred Stock remains
outstanding with the terms thereof materially unchanged or (ii) if the
Corporation is not the surviving entity in such transaction, interests in an
entity having substantially the same rights and terms with respect to rights to
dividends, voting, redemption and exchange as the Exchangeable Preferred Stock
are exchanged or substituted for the Exchangeable Preferred Stock or (e) a
Liquidation.

XIV. Severability of Provisions.

     Whenever possible, each provision hereof shall be interpreted in a manner
as to be effective and valid under applicable law, but if any provision hereof
is held to be prohibited by or invalid under applicable law, such provision
shall be ineffective only to the extent of such prohibition or invalidity,
without invalidating or otherwise adversely affecting the remaining

                                       13



provisions hereof. If a court of competent jurisdiction should determine that a
provision hereof would be valid or enforceable if a period of time were extended
or shortened or a particular percentage were increased or decreased, then such
court may make such change as shall be necessary to render the provision in
question effective and valid under applicable law.

XV.  Notices.

     Any notice required to be given hereunder shall be sufficient if in
writing, sent by facsimile transmission or electronic telecommunications
equipment (with confirmation of receipt), or by courier service (with proof of
service), hand delivery or certified or registered mail (return receipt
requested and first-class postage prepaid), and addressed (a) if to any record
holder of shares of Exchangeable Preferred Stock, to the address or facsimile
number of such record holder as reflected in the transfer records for shares of
Exchangeable Preferred Stock maintained by the Corporation or any transfer
agent, or (b) if to the Corporation, at its principal executive offices to the
attention of its Secretary. Any notice given in accordance with this provision
by the Corporation shall be deemed delivered as of the date of receipt or proof
of service or delivery is confirmed or on the third Business Day after the date
mailed.

XVI. Ownership Limitations.

     The shares of Exchangeable Preferred Stock are subject to the restrictions
on transferability and ownership provisions described in Article IV of the
Certificate of Incorporation.

     IN WITNESS WHEREOF, the Corporation has caused this Certificate to be
executed in its name and on its behalf on this 26th day of February, 2007.

                                          GENERAL GROWTH PROPERTIES, INC.



                                          By: /s/ Robert A. Michaels
                                              ---------------------------------
                                               Robert A. Michaels, President


                                       14

EX-4.24

                                                                    Exhibit 4.24

                                                                  EXECUTION COPY

================================================================================

                              THE ROUSE COMPANY LP
                              TRC CO-ISSUER, INC.,

                                  as Co-Issuers

                                       and

                       LASALLE BANK NATIONAL ASSOCIATION,

                                   as Trustee

                          6-3/4% SENIOR NOTES DUE 2013

                                   ----------

                                   INDENTURE

                            Dated as of May 5, 2006

                                   ----------

================================================================================



          This INDENTURE dated as of May 5, 2006, is by and among The Rouse
Company LP, a limited partnership validly existing under the laws of the State
of Delaware (the "COMPANY"), TRC Co-Issuer, Inc., a corporation validly existing
under the laws of the State of Delaware ("CORPORATE CO-ISSUER" and, together
with the Company, the "CO-ISSUERS") and LaSalle Bank National Association, as
trustee (the "TRUSTEE").

          The Co-Issuers and the Trustee agree as follows for the benefit of
each other and for the equal and ratable benefit of the Holders of the 6-3/4%
Senior Notes due 2013 (the "NOTES") issued under this Indenture:

                                   ARTICLE 1.

                   DEFINITIONS AND INCORPORATION BY REFERENCE

Section 1.01. DEFINITIONS.

          For all purposes of this Indenture, except as otherwise expressly
provided or unless the context otherwise requires:

          "144A Global Note" means a Global Note in the form of Exhibit A hereto
bearing the Global Note Legend and the Private Placement Legend and deposited
with and registered in the name of the Depositary or its nominee issued in a
denomination equal to the outstanding principal amount of the Notes sold for
initial resale in reliance on Rule 144A.

          "Additional Notes" means any Notes (other than Initial Notes and Notes
issued under Sections 2.06, 2.07, 2.10 and 3.06 hereof) issued under this
Indenture in accordance with Sections 2.02 and 2.15 hereof, as part of the same
series as the Initial Notes.

          "Adjusted Treasury Rate" means, with respect to any Determination
Date, the rate per annum equal to the semi-annual yield to maturity of the
Comparable Treasury Issue, assuming a price for the Comparable Treasury Issue
(expressed as a percentage of its principal amount) equal to the Comparable
Treasury Price for such Determination Date, plus 50 basis points.

          "Affiliate" of any specified Person means any other Person directly or
indirectly controlling or controlled by or under direct or indirect common
control with such specified Person. For the purposes of this definition,
"control" when used with respect to any specified Person means the power to
direct the management and policies of such Person, directly or indirectly,
whether through the ownership of voting securities, by contract or otherwise;
and the terms "controlling" and "controlled" have meanings correlative to the
foregoing.

          "Agent" means any Registrar, co-registrar, Paying Agent or additional
paying agent.

          "Applicable Procedures" means, with respect to any transfer,
redemption or exchange of or for beneficial interests in any Global Note, the
rules and procedures of the Depositary, Euroclear and Clearstream that apply to
such transfer, redemption or exchange.

          "Asset" means, with respect to one or more transactions occurring
within any 12-month period, any asset or group of assets of the Company or its
Subsidiaries (including, but not limited to, all balance sheet items and all
intangible assets including management contracts, goodwill and trade secrets)
with a fair market or book value, whichever is larger, greater than 5% of
Consolidated Net Tangible Assets on the date of such transaction.

          "Assets Under Development" means land and improvements owned by a
member of the Consolidated Group or an Investment Affiliate being developed for
retail, office, mixed-use or other rental-income producing purposes which meet
all four of the following criteria: (a) such project (or phase) has not yet been
substantially completed; (b) no rental income has yet been received; (c) no
certificate of occupancy has yet been issued for such project (or phase); and
(d) such project (or phase) is classified as construction in progress in
accordance with GAAP.



          "Attributable Debt" shall mean, as to any particular lease under which
the Company or any Restricted Subsidiary is at the time liable, at any date as
of which the amount thereof is to be determined, the lesser of (i) the fair
value of the property subject to such lease (as certified in an Officer's
Certificate) or (ii) the total net amount of rent required to be paid by the
Company under such lease during the remaining term thereof, discounted from the
respective due dates thereof to such date at the rate of interest per annum
equal to 8.5%, compounded semiannually. The net amount of rent required to be
paid under any such lease for any such period shall be the amount of the rent
payable by the lessee with respect to such period, after excluding amounts
required to be paid on account of maintenance and repairs, insurance, taxes,
assessments, water rates and similar charges. In the case of any lease which is
terminable by the lessee upon the payment of a penalty, such net amount shall
also include the amount of such penalty, but no rent shall be considered as
required to be paid under such lease subsequent to the first date upon which it
may be so terminated.

          "Bankruptcy Law" means Title 11, U.S. Code or any similar federal or
state law for the relief of debtors, or the law of any other jurisdiction
relating to bankruptcy, insolvency, winding up, liquidation, reorganization or
relief of debtors.

          "Board of Directors" means (1) in respect of a corporation, the board
of directors of the corporation, or any duly authorized committee thereof; (2)
with respect to a partnership, the board of directors, or other body serving a
similar function, of the general partner of the partnership, or any duly
authorized committee thereof; or (3) in respect of any other Person, the board
or committee of that Person serving an equivalent function.

          "Board Resolution " of a Person means a copy of a resolution certified
by the secretary or an assistant secretary (or individual performing comparable
duties) of the applicable Person to have been duly adopted by the Board of
Directors of such Person and to be in full force and effect on the date of such
certification, and delivered to the Trustee.

          "Business Day" means any day other than a Legal Holiday.

          "Capital Lease Obligations" of any Person means the obligations to pay
rent or other amounts under a lease of (or other Debt arrangements conveying the
right to use) real or personal property of such Person which are required to be
classified and accounted for as a capital lease or a liability on the face of a
balance sheet of such Person in accordance with GAAP, and the amount of such
obligations shall be the capitalized amount thereof in accordance with GAAP and
the stated maturity thereof shall be the date of the last payment of rent or any
other amount due under such lease prior to the first date upon which such lease
may be terminated by the lessee without payment of a penalty.

          "Capital Stock" means shares, interests, participations or other
equivalents (however designated) of capital stock of a corporation, equivalent
ownership interests in a Person which is not a corporation, and warrants or
options to purchase any of the foregoing.

          "Cash Equivalents" means (a) short-term obligations of, or fully
guaranteed by, the United States of America, (b) commercial paper rated A-1 or
better by Standard & Poor's Rating Services (or any successor) or P-1 or better
by Moody's Investors Service, Inc. (or any successor), or (c) certificates of
deposit issued by, and time deposits with, commercial banks (whether domestic or
foreign) having capital and surplus in excess of $100,000,000.

          "Clearstream" means Clearstream Banking S.A. and any successor
thereto.

          "Code" means the U.S. Internal Revenue Code of 1986, as amended.

          "Co-Issuers" means the Company and Corporate Co-Issuer, and any
successors thereto.

          "Commission" means the Securities and Exchange Commission.

          "Company" means The Rouse Company LP and any successor thereto.


                                       2


          "Comparable Treasury Issue" means the United States Treasury security
selected by the Independent Investment Banker as having a maturity comparable to
the remaining term of the Notes that would be utilized, at the time of selection
and in accordance with customary financial practice, in pricing new issues of
corporate debt securities of comparable maturity to the remaining term of the
Notes.

          "Comparable Treasury Price" means, with respect to any Determination
Date: (1) the average of the Reference Treasury Dealer Quotations for such date,
after excluding the highest and lowest such Reference Treasury Dealer
Quotations, or (2) if fewer than three such Reference Treasury Dealer Quotations
are obtained, the average of all such Reference Treasury Dealer Quotations.

          "Consolidated Coverage Ratio" of any Person means for any period the
ratio of (a) Total FFO for such period plus Total Interest Expense for the same
period for such Person to (b) Total Interest Expense for the same period for
such Person.

          "Consolidated Group" means the Company and its Subsidiaries that are
consolidated with the Company for financial reporting purposes under GAAP, and
any other Person whose financial results are included using the proportionate
share method under the Company's segment accounting policies in the financial
statements of the Consolidated Group.

          "Consolidated Group's Pro Rata Share" means, with respect to any
Investment Affiliate, the percentage of the total ownership and financial
interests held by the Consolidated Group, in the aggregate, in such Investment
Affiliate as determined in accordance with the Company's segment accounting
policies in the financial statements of the Consolidated Group.

          "Consolidated Net Tangible Assets" shall mean the aggregate amount of
assets (less applicable reserves and other properly deductible items) after
deducting therefrom: (i) all current liabilities (excluding any thereof which
are by their terms extendible or renewable at the option of the obligor thereon
to a time more than 12 months after the time as of which the amount thereof is
being computed and excluding current maturities of long-term indebtedness and
Capital Lease Obligations); and (ii) all goodwill, all as shown in the
consolidated balance sheet of the Company and its Subsidiaries as of the end of
the latest fiscal quarter for which consolidated financial statements are
available.

          "Corporate Co-Issuer" means TRC Co-Issuer, Inc. and any successor
thereto.

          "Corporate Trust Office of the Trustee" shall be at the address of the
Trustee specified in Section 11.02 hereof, or such other address as to which the
Trustee may give notice to the Co-Issuers.

          "Custodian" means, with respect to the Notes issuable or issued in
whole or in part in global form, the Person specified in Section 2.03(c) as
Custodian with respect to the Notes, and any and all successors thereto
appointed as custodian hereunder and having become such pursuant to the
applicable provisions of this Indenture.

          "Debt" means (without duplication), with respect to any Person: (i)
every obligation of such Person for money borrowed; (ii) every obligation of
such Person evidenced by bonds, debentures, notes or other similar instruments,
including obligations incurred in connection with the acquisition of property,
assets or businesses, but excluding any trade payments and other accrued current
liabilities arising in the ordinary course of business; (iii) every currently
due reimbursement obligation of such Person with respect to letters of credit,
bankers' acceptances or similar facilities issued for the account of such
Person; (iv) every obligation of such Person issued or assumed as the deferred
purchase price of property, but excluding trade accounts payable and other
accrued current liabilities arising in the ordinary course of business which are
not overdue by more than 90 days or which are being contested in good faith; (v)
every Capital Lease Obligation of such Person; (vi) the maximum fixed redemption
or repurchase price of any equity security which may be converted into a debt
security of such Person at any time or is mandatorily redeemable for cash within
20 years from its initial issuance; and (vii) every obligation of the type
referred to in clauses (i) through (vi) of another Person and all dividends of
another Person the payment of which, in either case, such Person has guaranteed
or for which such Person is responsible or liable, directly or indirectly, as
obligor, guarantor or otherwise.


                                        3



          "Default" means any event which is, or after notice or passage of time
or both would be, an Event of Default.

          "Definitive Note" means a certificated Note registered in the name of
the Holder thereof and issued in accordance with Section 2.06 or 2.10 hereof, in
substantially the form of Exhibit A hereto except that such Note shall not bear
the Global Note Legend and shall not have the "Schedule of Exchanges of
Interests in the Global Note" attached thereto.

          "Depositary" means, with respect to the Notes issuable or issued in
whole or in part in global form, the Person specified in Section 2.03(b) hereof
as the Depositary with respect to the Notes, and any and all successors thereto
appointed as depositary hereunder and having become such pursuant to the
applicable provisions of this Indenture.

          "Determination Date" means, with respect to the calculation of the
Make-Whole Price in connection with any redemption of the Notes, the redemption
date.

          "Distribution Compliance Period" means the 40-day distribution
compliance period as defined in Regulation S.

          "Euroclear" means Euroclear Bank, S.A./N.V., as operator of the
Euroclear systems, and any successor thereto.

          "Exchange Act" means the Securities Exchange Act of 1934, as amended.

          "GAAP" means generally accepted accounting principles in the United
States, consistent with the accounting principles utilized in preparing the
financial statements of the Consolidated Group in accordance with this Indenture
as in effect from time to time. All ratios and computations based on GAAP
contained in this Indenture will be computed in conformity with GAAP.

          "Global Note Legend" means the legend set forth in Section
2.06(f)(ii), which is required to be placed on all Global Notes issued under
this Indenture.

          "Global Notes" means the global Notes in the form of Exhibit A hereto
issued in accordance with Article 2 hereof.

          "Gross Asset Value" means, as of any determination date, the sum of
the values of the following assets of the Consolidated Group, including the
Consolidated Group's Pro Rata Share of the values of such assets of Investment
Affiliates, based on the valuation methods set forth below:

          (a) with respect to all Retail Properties, the Net Operating Income
attributable thereto for the most recent period of four full fiscal quarters for
which financial results have been reported, divided by 0.0825;

          (b) with respect to all office, mixed-use and other income-producing
properties other than Retail Properties, the Net Operating Income attributable
thereto for the most recent period of four full fiscal quarters for which
financial results have been reported, divided by 0.09;

          (c) with respect to any properties relating to master planned
communities, 100% of the most recent current value thereof (without deduction
for the value of the interests of the Hughes heirs therein under the Hughes
Agreement) as set forth in appraisals prepared by Weiser Realty Advisors, LLC
(or another nationally recognized appraisal firm selected by the Company),
provided that the Company will obtain updated appraisals thereof at least once
during each fiscal year and also when, during any four consecutive full fiscal
quarters, any such properties having an aggregate value in excess of 5% of Gross
Asset Value as of the end of the last full fiscal quarter are sold or
transferred;


                                        4



          (d) 100% of the GAAP book value of all other land, all Assets Under
Development and other non-income-producing properties (less the portion of such
value attributable to minority interest holders);

          (e) 100% of the GAAP book value of cash and Cash Equivalents held by
the Consolidated Group; and

          (f) 100% of the GAAP book value of current accounts receivable, net
held by the Consolidated Group.

Notwithstanding the preceding sentence, the contribution to the Gross Asset
Value of those assets acquired in any acquisition will be calculated prior to
the date ending on or after four full fiscal quarters subsequent to any such
acquisition using the actual acquisition cost of such assets excluding actual
transaction costs (without regard to any adjustments which may be made in
determining book value under GAAP).

          "guarantee" means a guarantee (other than by endorsement of negotiable
instruments for collection in the ordinary course of business), direct or
indirect, in any manner (including, without limitation, by way of a pledge of
assets or through letters of credit or reimbursement agreements in respect
thereof), of all or any part of any Debt. The term "guarantee" used as a verb
has a corresponding meaning.

          "Holder" means a Person in whose name a Note is registered in the
Security Register.

          "Hughes Agreement" means the Contingent Stock Agreement, effective as
of January 1, 1996, by the Company in favor of and for the benefit of the
holders and the representatives named therein, as the same may be amended.

          "IAI Global Note" means a Global Note in the form of Exhibit A hereto
bearing the Global Note Legend and the Private Placement Legend and deposited
with and registered in the name of the Depositary or its nominee issued in a
denomination equal to the outstanding principal amount of the Notes sold to
Institutional Accredited Investors, if any, to the extent required by the
Applicable Procedures.

          "Incur" means, with respect to any Debt or other obligation of any
Person, to create, issue, incur (by conversion, exchange or otherwise), assume,
guarantee or otherwise become liable in respect of such Debt or other obligation
or the recording, as required pursuant to GAAP or otherwise, of any such Debt or
other obligation on the balance sheet of any such Person (and "incurrence,"
"incurred," "incurrable" and "incurring" shall have meanings correlative to the
foregoing); provided that a change in GAAP that results in an obligation of such
Person that exists at such time becoming Debt shall not be deemed an incurrence
of such Debt.

          "Indenture" means this instrument, as originally executed or as it may
from time to time be supplemented or amended in accordance with Article 9
hereof.

          "Independent Investment Banker" means one of the Reference Treasury
Dealers appointed by the Trustee after consultation with the Company.

          "Indirect Participant" means a Person who holds a beneficial interest
in a Global Note through a Participant.

          "Initial Notes" means $800,000,000 aggregate principal amount of Notes
issued under this Indenture on the date hereof.

          "Institutional Accredited Investor" means an institution that is an
"accredited investor" as defined in Rule 501(a)(1), (2), (3) or (7) under the
Securities Act.

          "Interest Payment Dates" shall have the meaning set forth in paragraph
1 of each Note.


                                        5



          "Investment Affiliate" means any Person in which any member of the
Consolidated Group, directly or indirectly, has an ownership interest, whose
financial results are not included using the proportionate share method under
the Company's segment accounting policies with the financial results of the
Consolidated Group in the financial statements of the Consolidated Group.

          "Issue Date" means May 5, 2006.

          "Legal Holiday" means a Saturday, a Sunday or a day on which banking
institutions in the City of New York, the city in which the Corporate Trust
Office of the Trustee is located or any other place of payment on the Notes are
authorized by law, regulation or executive order to remain closed.

          "Lien" means any mortgage, pledge, security interest, encumbrance,
lien or charge of any kind (including, without limitation, any conditional sale
or other title retention agreement or lease in the nature thereof, any filing or
agreement to file a financing statement as debtor under the Uniform Commercial
Code on any property leased to any Person under a lease which is not in the
nature of a conditional sale or title retention agreement, or any subordination
agreement in favor of another Person).

          "Make-Whole Price" means with respect to any Note as of any
Determination Date, an amount equal to the greater of (x) 100% of the principal
amount of the Note and (y) as determined by an Independent Investment Banker,
the sum of the present values of the remaining scheduled payments of principal
and interest thereon (not including any portion of such payments of interest
accrued as of the Determination Date) discounted to the Determination Date on a
semi-annual basis (assuming a 360-day year consisting of twelve 30-day months)
at the Adjusted Treasury Rate, plus, in each case, accrued and unpaid interest
thereon to such Determination Date.

          "Net Operating Income" means, with respect to any Property, for any
period, earnings from rental operations (computed in accordance with GAAP, but
without deduction for reserves) attributable to such Property, plus
depreciation, amortization, interest expense and deferred taxes with respect to
such Property for such period, and, if such period is less than four full fiscal
quarters, adjusted by straight lining ordinary operating expenses which are
payable less frequently than once during every such period (e.g., real estate
taxes and insurance). The amounts determined under the preceding sentence will
be adjusted by adding back (a) the interests of the former Hughes owners
pursuant to the Hughes Agreement that were excluded in determining such amounts
and (b) dividends or other distributions accrued with respect to such period on
any preferred stock or other preferred security issued by the Company to the
extent that such dividends or other distributions are treated as an operating
expense under GAAP. "Net Operating Income" shall be adjusted to include a pro
forma amount thereof (as determined in good faith by the Company) for four full
fiscal quarters for any Property placed in service during any quarter and to
exclude any Net Operating Income for the prior four full fiscal quarters from
any Property not owned as of the end of any quarter.

          "Obligations" means all obligations for principal, premium, interest,
penalties, fees, indemnifications, reimbursements, damages and other liabilities
payable under the documentation governing any Debt.

          "Officer" means the Chairman of the Board, Vice Chairman, Chief
Executive Officer, Chief Operating Officer, President, Senior or Executive Vice
Presidents, Vice President, Treasurer, Assistant Treasurer, Secretary or an
Assistant Secretary of the Co-Issuers, as applicable.

          "Officer's Certificate" means a certificate signed by the Chairman of
the Board, Vice Chairman, Chief Executive Officer, Chief Operating Officer,
President, one of its Senior or Executive Vice Presidents, a Vice President, the
Treasurer, an Assistant Treasurer, the Secretary or an Assistant Secretary, of
each of the Co-Issuers, and delivered to the Trustee. The officer signing an
Officer's Certificate given pursuant to Section 4.04 shall be the principal
executive, financial or accounting officer of each of the Co-Issuers.

          "Opinion of Counsel" means a written opinion, in form and substance
reasonably satisfactory to the Trustee, from legal counsel who is acceptable to
the Trustee and which meets the requirements of Section 11.05 hereof. The
counsel may be an employee of or counsel to the Company or the Trustee.


                                        6



          "Participant" means, with respect to the Depositary, Euroclear or
Clearstream, a Person who has an account with the Depositary, Euroclear or
Clearstream, respectively, and, with respect to DTC, shall include Euroclear and
Clearstream.

          "Person" means any individual, corporation, any limited liability
company, partnership, joint venture, trust, unincorporated organization, or
government or any agency or political subdivision thereof.

          "Predecessor Note" of any particular Note means every previous Note
evidencing all or a portion of the same Debt as that evidenced by such
particular Note; and any Note authenticated and delivered under Section 2.07 in
lieu of a lost, destroyed or stolen Note shall be deemed to evidence the same
Debt as the lost, destroyed or stolen Note.

          "Principal Property" shall mean any land, and any building, structure
or other facility, together with the land upon which it is erected and fixtures
comprising a part thereof, in each case the net book value of which on the date
as of which the determination is being made exceeds 2% of Consolidated Net
Tangible Assets at such date; provided, however, that Principal Property shall
not include: (i) any building, structure or facility which, in the opinion of
the Board of Directors of the Company as evidenced by a Board Resolution, is not
of material importance to the total business conducted by the Company and its
Subsidiaries as an entirety; or (ii) any portion of a particular building,
structure or facility which, in the opinion of the Board of Directors of the
Company as evidenced by a Board Resolution, is not of material importance to the
use or operation of such building, structure or facility.

          "Private Placement Legend" means the legend set forth in Section
2.06(f)(i) hereof to be placed on all Notes issued under this Indenture except
as otherwise permitted by the provisions of this Indenture.

          "Property" means each parcel of real property owned or operated by any
member of the Consolidated Group or any Investment Affiliate.

          "QIB" means a "qualified institutional buyer" as defined in Rule 144A.

          "Ratio Calculation" means that, immediately after either the
incurrence of Debt or the sale of or other disposal of an Asset, as the case may
be, we, or our agent, shall calculate the Consolidated Coverage Ratio for the
four full fiscal quarter period preceding the Incurrence, sale or disposal for
which consolidated financial statements are available. In making such
calculation, (a) the Total Interest Expense attributable to interest on any Debt
to be Incurred bearing a floating interest rate shall be computed on a pro forma
basis as if the rate in effect on the date of computation had been the
applicable rate for the entire period and (b) with respect to any Debt which
bears, at the option of the Company, a fixed or floating rate of interest, the
Company shall apply the same rate for purposes of calculating the Consolidated
Coverage Ratio as it chooses to apply to the Debt. In addition, such calculation
shall be performed using the consolidated financial statements which shall be
reformulated on a pro forma basis as if such Debt had been Incurred or such
Asset had been sold or otherwise disposed of, as the case may be, at the
beginning of such four fiscal quarter period. Such reformulation shall give
effect, as if the relevant event had occurred at the beginning of such four
fiscal quarter period, to any actual use of proceeds of such Debt being incurred
or Asset being sold or disposed of and to any Incurrences or repayments of Debt
and other sales, disposals or acquisitions of Assets occurring after the end of
the last quarter for which there are consolidated financial statements
available. If any portion of the proceeds has not been used, it shall be assumed
that such portion of the proceeds was invested in one-year Treasury bills on the
first day of such four fiscal quarter period.

          "Reference Treasury Dealer" means Lehman Brothers Inc. and its
successors; provided, however, that if any of the foregoing shall not be a
primary U.S. Government securities dealer in New York City (a "PRIMARY TREASURY
DEALER"), the Company shall substitute therefor another Primary Treasury Dealer.

          "Reference Treasury Dealer Quotations" means, with respect to each
Reference Treasury Dealer and any Determination Date, the average of the bid and
asked prices for the Comparable Treasury Issue (expressed in each case as a
percentage of its principal amount) quoted in writing by such Reference Treasury
Dealer at 5:00 p.m. on the third business day preceding such Determination Date.


                                        7



          "Regular Record Date" for the interest payable on any Interest Payment
Date means the applicable date specified as a "Record Date" on the face of the
Note.

          "Regulation S" means Regulation S promulgated under the Securities
Act.

          "Regulation S Global Note" means a Regulation S Temporary Global Note
or Regulation S Permanent Global Note, as appropriate.

          "Regulation S Permanent Global Note" means a permanent Global Note in
the form of Exhibit A hereto bearing the Global Note Legend and the Private
Placement Legend and deposited with and registered in the name of the Depositary
or its nominee that will be issued in a denomination equal to the outstanding
principal amount of the Regulation S Temporary Global Note upon expiration of
the Distribution Compliance Period.

          "Regulation S Temporary Global Note" means a temporary Global Note in
the form of Exhibit A hereto bearing the Global Note Legend, the Private
Placement Legend and Regulation S Temporary Global Note Legend and deposited
with and registered in the name of the Depositary or its nominee, issued in a
denomination equal to the outstanding principal amount of the Notes sold for
initial resale in reliance on Rule 903 of Regulation S.

          "Regulation S Temporary Global Note Legend" means the legend set forth
in Section 2.06(f)(iii) hereof to be placed on all Regulation S Temporary Global
Notes issued under this Indenture.

          "Responsible Officer," when used with respect to the Trustee, means
any officer within the Corporate Trust Department of the Trustee (or any
successor group of the Trustee) with direct responsibility for the
administration of this Indenture and also means, with respect to a particular
corporate trust matter, any other officer to whom such matter is referred
because of his or her knowledge of and familiarity with the particular subject.

          "Restricted Definitive Note" means one or more Definitive Notes
bearing the Private Placement Legend.

          "Restricted Global Notes" means 144A Global Notes, IAI Global Notes
and Regulation S Global Notes.

          "Restricted Subsidiary" means any subsidiary of the Company which has
a 50% or greater ownership interest in a Principal Property or Properties.

          "Retail Property" means a shopping center or other retail development
containing more than one retail tenant in which at least 90% of the Net
Operating Income from such center or development is attributable to retail uses.

          "Rule 144" means Rule 144 promulgated under the Securities Act.

          "Rule 144A" means Rule 144A promulgated under the Securities Act.

          "Rule 903" means Rule 903 promulgated under the Securities Act.

          "Rule 904" means Rule 904 promulgated under the Securities Act.

          "Sale/Leaseback Transaction" has the meaning specified in Section
4.10.

          "Secured Debt" means, as of any determination date, the sum of:

          (a) the aggregate principal amount of all Debt of the Consolidated
Group then outstanding (including only the Company's proportionate interest in
the Debt of any Person whose financial results are included using the
proportionate share method under the Company's segment accounting policies in
the financial statements of the Consolidated Group) which is secured by a Lien
on any asset (including any Capital Stock) of any member of


                                        8



the Consolidated Group, including, without limitation, loans secured by
mortgages, stock or partnership interests; plus

          (b) the Consolidated Group's Pro Rata Share of any Debt of an
Investment Affiliate then outstanding which is secured by a Lien on any asset
(including any Capital Stock) of such Investment Affiliate, without duplication
of any such items.

For purposes of the preceding sentence, "Debt" shall (1) include, with respect
to any Person, any loans where such Person is liable as a general partner or
co-venturer less, in each case, the proportionate share of any other general or
limited partners or co-venturers and (2) exclude any Debt due from any member of
the Consolidated Group or any Investment Affiliate solely to one or more members
of the Consolidated Group.

          "Securities Act" means the Securities Act of 1933, as amended.

          "Significant Subsidiary" means any Subsidiary of the Company that
holds assets that had a value, on a current value basis, in excess of 3% of the
Company's total partners' capital, on a current value basis, as reported in the
Company's most recent annual financial statements.

          "Stated Maturity" means, with respect to any installment of interest
or principal on any series of Debt (including, without limitation, a scheduled
repayment or a scheduled sinking fund payment), the date on which the payment of
interest or principal was scheduled to be paid in the original documentation
governing such Debt, and will not include any contingent obligations to repay,
redeem or repurchase any such interest or principal prior to the date originally
scheduled for the payment hereof.

          "Subsidiary," means a Person more than 50% of the (a) outstanding
voting stock or interest in and/or (b) financial interest in which, is owned,
directly or indirectly, by the Company or by one or more other Subsidiaries, or
by the Company and one or more other Subsidiaries. For the purposes of this
definition, "voting stock" means stock which ordinarily has voting power for the
election of directors or equivalent persons, whether at all times or only so
long as no senior class of stock has such voting power by reason of any
contingency.

          "TIA" means the Trust Indenture Act of 1939, as amended, and the rules
and regulations thereunder.

          "Total Debt" means, as of any determination date:

          (a) all Debt of the Consolidated Group then outstanding (including
only the Company's proportionate interest in the Debt of any Person whose
financial results are included using the proportionate share method under the
Company's segment accounting policies in the financial statements of the
Consolidated Group); plus

          (b) the Consolidated Group's Pro Rata Share of all Debt of Investment
Affiliates then outstanding, without duplication of any such items.

For purposes of the preceding sentence, "Debt" will (1) include, with respect to
any Person, any loans where such Person is liable as a general partner or
co-venturer less, in each case, the proportionate share of any other general or
limited partners or co-venturers and (2) exclude any Debt due from any member of
the Consolidated Group or any Investment Affiliate solely to one or more members
of the Consolidated Group.

          "Total FFO" means, for any period, net earnings, as reported by the
Consolidated Group in accordance with GAAP, excluding cumulative effects of
changes in accounting principles, extraordinary or unusual items, gains or
losses from debt restructurings and sales of operating properties, and deferred
income taxes, plus depreciation and amortization and after adjustments for
minority interests, and treating unconsolidated partnerships and joint ventures
on the same basis, plus payments made and other amounts treated as an expense of
the Company under GAAP with respect to such period pursuant to the Hughes
Agreement (provided that no item of income or expense shall be included more
than once in such calculation even if it falls within more than one of the above
categories).

          "Total Interest Expense" means, for any period, the sum of


                                        9



          (a) all interest expense of the Consolidated Group (less the
proportionate share of interest expense of any minority interest holders); plus

          (b) the allocable portion (based on liability) of any interest expense
on any obligation for which any member of the Consolidated Group is wholly or
partially liable under repayment, interest carry or performance guarantees or
other relevant liabilities; plus

          (c) the Consolidated Group's Pro Rata Share of any interest expense on
any Debt of any Investment Affiliate, whether recourse or non-recourse,

(provided that no expense shall be included more than once in such calculation
even if it falls within more than one of the foregoing categories, and provided,
further, that no interest expense on Debt due from one member of the
Consolidated Group solely to another member of the Consolidated Group shall be
included in determining Total Interest Expense). For purposes of the preceding
sentence, interest expense will be determined in accordance with GAAP and will
exclude any amortization of debt issuance costs.

          "Trustee" means the Person named as the "Trustee" in the first
paragraph of this instrument until a successor Trustee shall have become such
pursuant to the applicable provisions of this Indenture, and thereafter
"Trustee" shall mean such successor Trustee.

          "Unrestricted Definitive Notes" means one or more Definitive Notes
that do not and are not required to bear the Private Placement Legend.

          "Unrestricted Global Notes" means one or more Global Notes that do not
and are not required to bear the Private Placement Legend and are deposited with
and registered in the name of the Depositary or its nominee.

          "U.S. Government Securities" means direct obligations (or certificates
representing an ownership interest in such obligations) of the United States of
America (including any agency or instrumentality thereof) for the payment of
which the full faith and credit of the United States of America is pledged and
which are not callable or redeemable at me issuer's option.

Section 1.02. OTHER DEFINITIONS.



                                                Defined in
Term                                              Section
- ----                                            ----------
                                             
"Authentication Order".......................      2.02
"Covenant Defeasance"........................      8.03
"defeasance trust"...........................      8.04
"DTC"........................................      2.03
"Event of Default"...........................      6.01
"Legal Defeasance"...........................      8.02
"losses".....................................      7.07
"Paying Agent"...............................      2.03
"Registrar"..................................      2.03
"Required  Information"......................      4.03
"Security Register"..........................      2.03


Section 1.03. INCORPORATION BY REFERENCE OF TRUST INDENTURE ACT.

          (a) Whenever this Indenture expressly incorporates a provision of the
TIA, the provision is incorporated by reference in and made a part of this
Indenture.

          (b) The TIA term "obligor" upon the Notes means the Company and any
successor obligor upon the Notes.


                                       10



Section 1.04. RULES OF CONSTRUCTION.

          (a) Unless the context otherwise requires:

               (i) a term has the meaning assigned to it;

               (ii) an accounting term not otherwise defined herein has the
          meaning assigned to it in accordance with GAAP;

               (iii) "or" is not exclusive;

               (iv) words in the singular include the plural, and in the plural
          include the singular;

               (v) all references in this instrument to "Articles," "Sections"
          and other subdivisions are to the designated Articles, Sections and
          subdivisions of this instrument as originally executed;

               (vi) the words "herein," "hereof" and "hereunder" and other words
          of similar import refer to this Indenture as a whole and not to any
          particular Article, Section or other subdivision;

               (vii) "including" means "including without limitation";

               (viii) provisions apply to successive events and transactions;
          and

               (ix) references to sections of or rules under the Securities Act,
          the Exchange Act or the TIA shall be deemed to include substitute,
          replacement or successor sections or rules adopted by the Commission
          from time to time thereunder.

                                   ARTICLE 2.

                                    THE NOTES

Section 2.01. FORM AND DATING.

          (a) GENERAL. The Notes and the Trustee's certificate of authentication
shall be substantially in the form included in Exhibit A hereto, which is hereby
incorporated in and expressly made part of this Indenture. The Notes may have
notations, legends or endorsements required by law, exchange rule or usage in
addition to those set forth on Exhibit A. Each Note shall be dated the date of
its authentication. The Notes shall be in denominations of $1,000 and integral
multiples thereof. The terms and provisions contained in the Notes shall
constitute a part of this Indenture and the Co-Issuers and the Trustee, by their
execution and delivery of this Indenture, expressly agree to such terms and
provisions and to be bound thereby. To the extent any provision of any Note
conflicts with the express provisions of this Indenture, the provisions of this
Indenture shall govern and be controlling.

          (b) FORM OF NOTES. Notes shall be issued in global form and shall be
substantially in the form of Exhibit A attached hereto (including the Global
Note Legend thereon and the "Schedule of Exchanges of Interests in the Global
Note" attached thereto). Notes issued in definitive form shall be substantially
in the form of Exhibit A attached hereto (but without the Global Note Legend
thereon and without the "Schedule of Exchanges of Interests in the Global Note"
attached thereto). Each Global Note shall represent such aggregate principal
amount of the outstanding Notes as shall be specified therein and each shall
provide that it shall represent the aggregate principal amount of outstanding
Notes from time to time endorsed thereon and that the aggregate principal amount
of outstanding Notes represented thereby may from time to time be reduced or
increased, as appropriate, to reflect exchanges and redemptions and transfers of
interests therein. Any endorsement of a Global Note to reflect the amount of any
increase or decrease in the aggregate principal amount of outstanding Notes
represented thereby shall be made by the Trustee or the Custodian, at the
direction of the Trustee, in accordance with instructions given by the Holder
thereof as required by Section 2.06 hereof.


                                       11


          (c) TEMPORARY GLOBAL NOTES. Notes offered and sold in reliance on
Regulation S shall be issued initially in the form of the Regulation S Temporary
Global Note, which shall be deposited on behalf of the purchasers of the Notes
represented thereby with the Trustee, at its New York office, as custodian for
the Depositary, and registered in the name of the Depositary or the nominee of
the Depositary for the accounts of designated agents holding on behalf of
Euroclear or Clearstream, duly executed by the Co-Issuers and authenticated by
the Trustee as hereinafter provided. The Distribution Compliance Period shall be
terminated upon the receipt by the Trustee of (i) a written certificate from the
Depositary, together with copies of certificates from Euroclear and Clearstream
certifying that they have received certification of non-United States beneficial
ownership of 100% of the aggregate principal amount of the Regulation S
Temporary Global Note (except to the extent of any beneficial owners thereof who
acquired an interest therein during the Distribution Compliance Period pursuant
to another exemption from registration under the Securities Act and who will
take delivery of a beneficial ownership interest in a Global Note, bearing a
Private Placement Legend, all as contemplated by Section 2.06(b) hereof), and
(ii) an Officer's Certificate from the Co-Issuers. Following the termination of
the Distribution Compliance Period, beneficial interests in the Regulation S
Temporary Global Note shall be exchanged for beneficial interests in the
Regulation S Permanent Global Note pursuant to the Applicable Procedures.
Simultaneously with the authentication of the Regulation S Permanent Global
Note, the Trustee shall cancel the Regulation S Temporary Global Note. The
aggregate principal amount of the Regulation S Temporary Global Note and the
Regulation S Permanent Global Notes may from time to time be increased or
decreased by adjustments made on the records of the Trustee and the Depositary
or its nominee, as the case may be, in connection with transfers of interests as
hereinafter provided.

          (d) BOOK-ENTRY PROVISIONS. This Section 2.01(d) shall apply only to
Global Notes deposited with the Trustee, as custodian for the Depositary.
Participants and Indirect Participants shall have no rights under this Indenture
or any Global Note with respect to any Global Note held on their behalf by the
Depositary or by the Trustee as custodian for the Depositary, and the Depositary
shall be treated by the Co-Issuers, the Trustee and any agent of the Co-Issuers
or the Trustee as the absolute owner of such Global Note for all purposes
whatsoever. Notwithstanding the foregoing, nothing herein shall prevent the
Co-Issuers, the Trustee or any agent of the Co-Issuers or the Trustee from
giving effect to any written certification, proxy or other authorization
furnished by the Depositary or impair, as between the Depositary and its
Participants or Indirect Participants, the Applicable Procedures or the
operation of customary practices of the Depositary governing the exercise of the
rights of a holder of a beneficial interest in any Global Note.

          (e) EUROCLEAR AND CLEARSTREAM PROCEDURES APPLICABLE. The provisions of
the "Operating Procedures of the Euroclear System" and "Terms and Conditions
Governing Use of Euroclear" and the "General Terms and Conditions of
Clearstream" and "Customer Handbook" of Clearstream shall be applicable to
transfers of beneficial interests in Global Notes that are held by Participants
through Euroclear or Clearstream.

          (f) CERTIFICATED SECURITIES. The Co-Issuers shall exchange Global
Notes for Definitive Notes if: (1) at any time the Depositary notifies the
Co-Issuers that it is unwilling or unable to continue to act as Depositary for
the Global Notes or if at any time the Depositary shall no longer be eligible to
act as such because it ceases to be a clearing agency registered under the
Exchange Act, and, in either case, the Co-Issuers shall not have appointed a
successor Depositary within 120 days after the Co-Issuers receive such notice or
become aware of such ineligibility, (2) the Co-Issuers, in their discretion and
in accordance with the rules of the Depositary, determine not to require that
all of the Notes be represented by a Global Note and the Co-Issuers notify the
Trustee of their decision or (3) upon written request of the Trustee if an Event
of Default shall have occurred and be continuing with respect to the Notes
represented by a Global Note and the Trustee shall have received a written
request from the Depositary to issue such Notes in certificated form.

          Upon the occurrence of any of the events set forth in clauses (1), (2)
or (3) above, the Co-Issuers shall execute, and, upon receipt of an
Authentication Order in accordance with Section 2.02 hereof, the Trustee shall
authenticate and deliver, Definitive Notes, in authorized denominations, in an
aggregate principal amount equal to the principal amount of the Global Notes in
exchange for such Global Notes.

          In no event shall the Regulation S Temporary Global Note be exchanged
by the Co-Issuers for Definitive Notes prior to (x) the expiration of the
Distribution Compliance Period and (y) the receipt by the Registrar of any
certificates required pursuant to Rule 903(b)(3)(ii)(B) under the Securities
Act.


                                       12



          Upon the exchange of a Global Note for Definitive Notes, such Global
Note shall be cancelled by the Trustee or an agent of the Co-Issuers or the
Trustee. Definitive Notes issued in exchange for a Global Note pursuant to this
Section 2.01 shall be registered in such names and in such authorized
denominations as the Depositary, pursuant to instructions from its Participants
or its Applicable Procedures, shall instruct the Trustee or an agent of the
Co-Issuers or the Trustee in writing. The Trustee or such agent shall deliver
such Definitive Notes to or as directed by the Persons in whose names such
Definitive Notes are so registered or to the Depositary.

Section 2.02. EXECUTION AND AUTHENTICATION.

          (a) One Officer of each of the Company and Corporate Co-Issuer shall
execute the Notes on behalf of the Co-Issuers by manual or facsimile signature.

          (b) If an Officer whose signature is on a Note no longer holds that
office at the time a Note is authenticated by the Trustee, the Note shall
nevertheless be valid.

          (c) A Note shall not be valid until authenticated by the manual
signature of the Trustee. The signature shall be conclusive evidence that the
Note has been authenticated under this Indenture.

          (d) The Trustee shall, upon a written order of the Co-Issuers signed
by an Officer of the Co-Issuers (an "AUTHENTICATION ORDER"), authenticate Notes
for issuance.

          (e) The Trustee may appoint an authenticating agent acceptable to the
Co-Issuers to authenticate Notes. Unless otherwise provided in such appointment,
an authenticating agent may authenticate Notes whenever the Trustee may do so.
Each reference in this Indenture to authentication by the Trustee includes
authentication by such agent. An authenticating agent shall have the same rights
as the Trustee to deal with Holders, the Co-Issuers or an Affiliate of the
Co-Issuers.

Section 2.03. REGISTRAR AND PAYING AGENT.

          (a) The Co-Issuers shall maintain an office or agency where Notes may
be presented for registration of transfer or for exchange ("REGISTRAR") and an
office or agency where Notes may be presented for payment ("PAYING AGENT"). The
Registrar shall keep a register (the "SECURITY REGISTER") of the Notes and of
their transfer and exchange. The Co-Issuers may appoint one or more
co-registrars and one or more additional paying agents. The term "Registrar"
includes any co-registrar and the term "Paying Agent" includes any additional
paying agent. The Co-Issuers may change any Paying Agent or Registrar without
notice to any Holder. The Co-Issuers shall notify the Trustee in writing of the
name and address of any Agent not a party to this Indenture. If the Co-Issuers
fail to appoint or maintain another entity as Registrar or Paying Agent, the
Trustee shall act as such. The Company or any of its Subsidiaries may act as
Paying Agent or Registrar.

          (b) The Co-Issuers initially appoint The Depository Trust Company
("DTC) to act as Depositary with respect to the Global Notes.

          (c) The Co-Issuers initially appoint the Trustee to act as Registrar
and Paying Agent and to act as Custodian with respect to the Global Notes, and
the Trustee hereby agrees so to initially act.

Section 2.04. PAYING AGENT TO HOLD MONEY IN TRUST.

          The Co-Issuers shall require each Paying Agent other than the Trustee
to agree in writing that the Paying Agent shall hold in trust for the benefit of
Holders or the Trustee all money held by the Paying Agent for the payment of
principal, premium, if any, or interest on the Notes, and shall notify the
Trustee of any default by the Co-Issuers in making any such payment. While any
such default continues, the Trustee may require a Paying Agent to pay all funds
held by it relating to the Notes to the Trustee. The Co-Issuers at any time may
require a Paying Agent to pay all funds held by it to the Trustee. Upon payment
over to the Trustee, the Paying Agent (if other than the Company or a
Subsidiary) shall have no further liability for such funds. If the Company or a
Subsidiary acts as Paying Agent, it shall segregate and hold in a separate trust
fund for the benefit of the Holders all funds held by it as


                                       13



Paying Agent. Upon any Event of Default under Sections 6.01(e) and (f) hereof
relating to the either of the Co-Issuers, the Trustee shall serve as Paying
Agent for the Notes.

Section 2.05. HOLDER LISTS.

          The Trustee shall preserve in as current a form as is reasonably
practicable the most recent list available to it of the names and addresses of
all Holders. If the Trustee is not the Registrar, the Co-Issuers shall furnish
or cause to be furnished to the Trustee at least seven Business Days before each
Interest Payment Date and at such other times as the Trustee may request in
writing, a list in such form and as of such date or such shorter time as the
Trustee may allow, as the Trustee may reasonably require of the names and
addresses of the Holders.

Section 2.06. TRANSFER AND EXCHANGE.

          (a) TRANSFER AND EXCHANGE OF GLOBAL NOTES. A Global Note may not be
transferred as a whole except by the Depositary to a nominee of the Depositary,
by a nominee of the Depositary to the Depositary or to another nominee of the
Depositary, or by the Depositary or any such nominee to a successor Depositary
or a nominee of such successor Depositary. Upon the occurrence of any of the
events set forth in Section 2.01(f) above, Definitive Notes shall be issued in
denominations of $1,000 or integral multiples thereof and in such names as the
Depositary shall instruct the Trustee in writing. Global Notes also may be
exchanged or replaced, in whole or in part, as provided in Sections 2.07 and
2.10 hereof. Except as provided above, every Note authenticated and delivered in
exchange for, or in lieu of, a Global Note or any portion thereof, pursuant to
this Section 2.06 or Section 2.07 or 2.10 hereof, shall be authenticated and
delivered in the form of, and shall be, a Global Note. A Global Note may not be
exchanged for another Note other than as provided in this Section 2.06(a), and
beneficial interests in a Global Note may not be transferred and exchanged other
than as provided in Section 2.06(b) or (c) hereof.

          (b) TRANSFER AND EXCHANGE OF BENEFICIAL INTERESTS IN THE GLOBAL NOTES.
The transfer and exchange of beneficial interests in the Global Notes shall be
effected through the Depositary, in accordance with the provisions of this
Indenture and the Applicable Procedures. Beneficial interests in the Restricted
Global Notes shall be subject to restrictions on transfer comparable to those
set forth herein to the extent required by the Securities Act. Transfers of
beneficial interests in Global Notes also shall require compliance with either
clause (i) or (ii) below, as applicable, as well as one or more of the other
following clauses, as applicable:

          (i) Transfer of Beneficial Interests in the Same Global Note.
     Beneficial interests in any Restricted Global Note may be transferred to
     Persons who take delivery thereof in the form of a beneficial interest in
     the same Restricted Global Note in accordance with the transfer
     restrictions set forth in the Private Placement Legend and any Applicable
     Procedures; provided, however, that prior to the expiration of the
     Distribution Compliance Period, transfers of beneficial interests in the
     Regulation S Temporary Global Note may not be made to or for the account or
     benefit of a "U.S. Person" (as defined in Rule 902(k) of Regulation S)
     (other than a "distributor" (as defined in Rule 902(d) of the Regulation
     S)). Beneficial interests in any Unrestricted Global Note may be
     transferred to Persons who take delivery thereof in the form of a
     beneficial interest in an Unrestricted Global Note. Except as may be
     required by any Applicable Procedures, no written orders or instructions
     shall be required to be delivered to the Registrar to effect the transfers
     described in this Section 2.06(b)(i).

          (ii) All Other Transfers and Exchanges of Beneficial Interests in
     Global Notes. In connection with all transfers and exchanges of beneficial
     interests that are not subject to Section 2.06(b)(i) above, the transferor
     of such beneficial interest must deliver to the Registrar either (A)(1) a
     written order from a Participant or an Indirect Participant given to the
     Depositary in accordance with the Applicable Procedures directing the
     Depositary to credit or cause to be credited a beneficial interest in
     another Global Note in an amount equal to the beneficial interest to be
     transferred or exchanged and (2) instructions given in accordance with the
     Applicable Procedures containing information regarding the Participant
     account to be credited with such increase or (B)(1) if permitted under
     Section 2.06(a), a written order from a Participant or an Indirect
     Participant given to the Depositary in accordance with the Applicable
     Procedures directing the Depositary to cause to be issued a Definitive Note
     in an amount equal to the beneficial interest to be transferred or
     exchanged and (2) instructions given by the Depositary to the Registrar
     containing information regarding the Person in whose name such Definitive
     Note shall be registered to effect the


                                       14



     transfer or exchange referred to in (B)(1) above; provided that in no event
     shall Definitive Notes be issued upon the transfer or exchange of
     beneficial interests in the Regulation S Temporary Global Note prior to (x)
     the expiration of the Distribution Compliance Period and (y) the receipt by
     the Registrar of any certificates required pursuant to Rule
     903(b)(3)(ii)(B) under the Securities Act. Upon satisfaction of all of the
     requirements for transfer or exchange of beneficial interests in Global
     Notes contained in this Indenture and the Notes or otherwise applicable
     under the Securities Act, the Trustee shall adjust the principal amount of
     the relevant Global Note(s) pursuant to Section 2.06(g) hereof.

          (iii) Transfer of Beneficial Interests in a Restricted Global Note to
     Another Restricted Global Note. A holder of a beneficial interest in a
     Restricted Global Note may transfer such beneficial interest to a Person
     who takes delivery thereof in the form of a beneficial interest in another
     Restricted Global Note if the transfer complies with the requirements of
     Section 2.06(b)(ii) above and the Registrar receives the following:

               (A) if the transferee will take delivery in the form of a
          beneficial interest in the 144A Global Note, then the transferor must
          deliver a certificate in the form of Exhibit B hereto, including the
          certifications in item (1) thereof or, if permitted by the Applicable
          Procedures, item (3) thereof;

               (B) if the transferee will take delivery in the form of a
          beneficial interest in the Regulation S Temporary Global Note or the
          Regulation S Permanent Global Note, as the case may be, then the
          transferor must deliver a certificate in the form of Exhibit B hereto,
          including the certifications in item (2) thereof; and

               (C) if the transferee is required by the Applicable Procedures to
          take delivery in the form of a beneficial interest in the IAI Global
          Note, then the transferor must deliver a certificate in the form of
          Exhibit B hereto, including the certifications and certificates and
          Opinion of Counsel required by item (3) thereof, if applicable.

          (iv) Transfer or Exchange of Beneficial Interests in a Restricted
     Global Note for Beneficial Interests in an Unrestricted Global Note. A
     holder of a beneficial interest in a Restricted Global Note may exchange
     such beneficial interest for a beneficial interest in an Unrestricted
     Global Note or may transfer such beneficial interest to a Person who takes
     delivery thereof in the form of a beneficial interest in an Unrestricted
     Global Note only if the exchange or transfer complies with the requirements
     of Section 2.06(b)(ii) above and the Registrar receives the following:

               (A) if the holder of such beneficial interest in a Restricted
          Global Note proposes to exchange such beneficial interest for a
          beneficial interest in an Unrestricted Global Note, a certificate from
          such holder in the form of Exhibit C hereto, including the
          certifications in item (1)(a) thereof; or

               (B) if the holder of such beneficial interest in a Restricted
          Global Note proposes to transfer such beneficial interest to a Person
          who shall take delivery thereof in the form of a beneficial interest
          in an Unrestricted Global Note, a certificate from such holder in the
          form of Exhibit B hereto, including the certifications in item (4)
          thereof;

          and, in each such case, if the Registrar so requests or if the
          Applicable Procedures so require, an Opinion of Counsel in form
          reasonably acceptable to the Registrar to the effect that such
          exchange or transfer complies with the Securities Act and that the
          restrictions on transfer contained herein and in the Private Placement
          Legend are no longer required in order to maintain compliance with the
          Securities Act.


                                       15



          (v) Transfer or Exchange of Beneficial Interests in an Unrestricted
     Global Note for Beneficial Interests in a Restricted Global Note
     Prohibited. Beneficial interests in an Unrestricted Global Note may not be
     exchanged for, or transferred to Persons who take delivery thereof in the
     form of, beneficial interests in a Restricted Global Note.

          (c) TRANSFER AND EXCHANGE OF BENEFICIAL INTERESTS IN GLOBAL NOTES FOR
DEFINITIVE NOTES.

          (i) Transfer or Exchange of Beneficial Interests in Restricted Global
     Notes to Restricted Definitive Notes. Subject to Section 2.06(a) hereof, if
     any holder of a beneficial interest in a Restricted Global Note proposes to
     exchange such beneficial interest for a Restricted Definitive Note or to
     transfer such beneficial interest to a Person who takes delivery thereof in
     the form of a Restricted Definitive Note, then, upon receipt by the
     Registrar of the following documentation:

               (A) if the holder of such beneficial interest in a Restricted
          Global Note proposes to exchange such beneficial interest for a
          Restricted Definitive Note, a certificate from such holder in the form
          of Exhibit C hereto, including the certifications in item (2)(a)
          thereof;

               (B) if such beneficial interest is being transferred to a QIB in
          accordance with Rule 144A, a certificate to the effect set forth in
          Exhibit B hereto, including the certifications in item (1) thereof;

               (C) if such beneficial interest is being transferred to a "Non-U.
          S. Person" in an offshore transaction (as defined in Section 902(k) of
          Regulation S) in accordance with Rule 903 or Rule 904, a certificate
          to the effect set forth in Exhibit B hereto, including the
          certifications in item (2) thereof;

               (D) if such beneficial interest is being transferred pursuant to
          an exemption from the registration requirements of the Securities Act
          in accordance with Rule 144 under the Securities Act, a certificate to
          the effect set forth in Exhibit B hereto, including the certifications
          in item (3)(a) thereof;

               (E) if such beneficial interest is being transferred to an
          Institutional Accredited Investor in reliance on an exemption from the
          registration requirements of the Securities Act other than those
          listed in clauses (B) through (D) above, a certificate to the effect
          set forth in Exhibit B hereto, including the certifications,
          certificates and Opinion of Counsel required by item (3)(d) thereof,
          if applicable; or

               (F) if such beneficial interest is being transferred to the
          Company or any of its Subsidiaries, a certificate to the effect set
          forth in Exhibit B hereto, including the certifications in item (3)(b)
          thereof,

     the Trustee shall reduce or cause to be reduced in a corresponding amount
     pursuant to Section 2.06(g) hereof, the aggregate principal amount of the
     applicable Restricted Global Note, and the Co-Issuers shall execute and,
     upon receipt of an Authentication Order in accordance with Section 2.02
     hereof, the Trustee shall authenticate and deliver a Restricted Definitive
     Note in the appropriate principal amount to the Person designated by the
     holder of such beneficial interest in the instructions delivered to the
     Registrar by the Depositary and the applicable Participant or Indirect
     Participant on behalf of such holder. Any Restricted Definitive Note issued
     in exchange for beneficial interests in a Restricted Global Note pursuant
     to this Section 2.06(c)(i) shall be registered in such name or names and in
     such authorized denomination or denominations as the holder of such
     beneficial interest shall designate in such instructions. The Trustee shall
     deliver such Restricted Definitive Notes to the Persons in whose names such
     Notes are so registered. Any Restricted Definitive Note issued in exchange
     for a beneficial interest in a Restricted Global Note


                                       16



     pursuant to this Section 2.06(c)(i) shall bear the Private Placement Legend
     and shall be subject to all restrictions on transfer contained therein.

          (ii) Notwithstanding Sections 2.06(c)(i)(A) and (C) hereof, a
     beneficial interest in the Regulation S Temporary Global Note may not be
     exchanged for a Definitive Note or transferred to a Person who takes
     delivery thereof in the form of a Definitive Note prior to (x) the
     expiration of the Distribution Compliance Period and (y) the receipt by the
     Registrar of any certificates required pursuant to Rule 903(b)(3)(ii)(B)
     under the Securities Act, except in the case of a transfer pursuant to an
     exemption from the registration requirements of the Securities Act other
     than Rule 903 or Rule 904.

          (iii) Transfer or Exchange of Beneficial Interests in Restricted
     Global Notes to Unrestricted Definitive Notes. Subject to Section 2.06(a)
     hereof, a holder of a beneficial interest in a Restricted Global Note may
     exchange such beneficial interest for an Unrestricted Definitive Note or
     may transfer such beneficial interest to a Person who takes delivery
     thereof in the form of an Unrestricted Definitive Note only if the
     Registrar receives the following:

               (A) if the holder of such beneficial interest in a Restricted
          Global Note proposes to exchange such beneficial interest for an
          Unrestricted Definitive Note, a certificate from such holder in the
          form of Exhibit C hereto, including the certifications in item (1)(b)
          thereof; or

               (B) if the holder of such beneficial interest in a Restricted
          Global Note proposes to transfer such beneficial interest to a Person
          who shall take delivery thereof in the form of an Unrestricted
          Definitive Note, a certificate from such holder in the form of Exhibit
          B hereto, including the certifications in item (4) thereof;

          and, in each such case, if the Registrar so requests or if the
          Applicable Procedures so require, an Opinion of Counsel in form
          reasonably acceptable to the Registrar to the effect that such
          exchange or transfer complies with the Securities Act and that the
          restrictions on transfer contained herein and in the Private Placement
          Legend are no longer required in order to maintain compliance with the
          Securities Act.

          Upon satisfaction of any of the conditions of any of the clauses of
     this Section 2.06(c)(iii), the Co-Issuers shall execute and, upon receipt
     of an Authentication Order in accordance with Section 2.02 hereof, the
     Trustee shall authenticate and deliver an Unrestricted Definitive Note in
     the appropriate principal amount to the Person designated by the holder of
     such beneficial interest in instructions delivered to the Registrar by the
     Depositary and the applicable Participant or Indirect Participant on behalf
     of such holder, and the Trustee shall reduce or cause to be reduced in a
     corresponding amount pursuant to Section 2.06(g), the aggregate principal
     amount of the applicable Restricted Global Note.

          (iv) Transfer or Exchange of Beneficial Interests in Unrestricted
     Global Notes to Unrestricted Definitive Notes. Subject to Section 2.06(a)
     hereof, if any holder of a beneficial interest in an Unrestricted Global
     Note proposes to exchange such beneficial interest for an Unrestricted
     Definitive Note or to transfer such beneficial interest to a Person who
     takes delivery thereof in the form of an Unrestricted Definitive Note,
     then, upon satisfaction of the applicable conditions set forth in Section
     2.06(b)(ii) hereof, the Trustee shall reduce or cause to be reduced in a
     corresponding amount pursuant to Section 2.06(g) hereof, the aggregate
     principal amount of the applicable Unrestricted Global Note, and the
     Co-Issuers shall execute, and, upon receipt of an Authentication Order in
     accordance with Section 2.02 hereof, the Trustee shall authenticate and
     deliver an Unrestricted Definitive Note in the appropriate principal amount
     to the Person designated by the holder of such beneficial interest in
     instructions delivered to the Registrar by the Depositary and the
     applicable Participant or Indirect Participant on behalf of such holder.
     Any Unrestricted Definitive Note issued in exchange for a beneficial
     interest pursuant to this Section 2.06(c)(iv) shall be registered in such
     name or names and in such authorized denomination or denominations as the
     holder of such beneficial interest shall designate in such instructions.
     The Trustee shall deliver such Unrestricted Definitive Notes to the Persons
     in whose names such Notes are so registered. Any Unrestricted Definitive


                                       17



     Note issued in exchange for a beneficial interest pursuant to this Section
     2.06(c)(iv) shall not bear the Private Placement Legend.

          (d) TRANSFER AND EXCHANGE OF DEFINITIVE NOTES FOR BENEFICIAL INTERESTS
IN THE GLOBAL NOTES.

          (i) Transfer or Exchange of Restricted Definitive Notes to Beneficial
     Interests in Restricted Global Notes. If any holder of a Restricted
     Definitive Note proposes to exchange such Restricted Definitive Note for a
     beneficial interest in a Restricted Global Note or to transfer such
     Restricted Definitive Notes to a Person who takes delivery thereof in the
     form of a beneficial interest in a Restricted Global Note, then, upon
     receipt by the Registrar of the following documentation:

               (A) if the holder of such Restricted Definitive Note proposes to
          exchange such Restricted Definitive Note for a beneficial interest in
          a Restricted Global Note, a certificate from such holder in the form
          of Exhibit C hereto, including the certifications in item (2)(b)
          thereof;

               (B) if such Restricted Definitive Note is being transferred to a
          QIB in accordance with Rule 144A, a certificate to the effect set
          forth in Exhibit B hereto, including the certifications in item (1)
          thereof;

               (C) if such Restricted Definitive Note is being transferred to a
          "non-U.S. Person" in an offshore transaction (as defined in Rule
          902(k) of Regulation S) in accordance with Rule 903 or Rule 904, a
          certificate to the effect set forth in Exhibit B hereto, including the
          certifications in item (2) thereof;

               (D) if such Restricted Definitive Note is being transferred
          pursuant to an exemption from the registration requirements of the
          Securities Act in accordance with Rule 144, a certificate to the
          effect set forth in Exhibit B hereto, including the certifications in
          item (3)(a) thereof;

               (E) if such Restricted Definitive Note is being transferred to an
          Institutional Accredited Investor in reliance on an exemption from the
          registration requirements of the Securities Act other than those
          listed in clauses (B) through (D) above, a certificate to the effect
          set forth in Exhibit B hereto, including the certifications,
          certificates and Opinion of Counsel required by item (3)(d) thereof,
          if applicable; or

               (F) if such Restricted Definitive Note is being transferred to
          the Company or any of its Subsidiaries, a certificate to the effect
          set forth in Exhibit B hereto, including the certifications in item
          (3)(b) thereof,

     the Trustee shall cancel the Restricted Definitive Note, increase or cause
     to be increased in a corresponding amount pursuant to Section 2.06(g)
     hereof, the aggregate principal amount of, in the case of clause (A) above,
     the appropriate Restricted Global Note, in the case of clause (B) above, a
     144A Global Note, in the case of clause (C) above, a Regulation S Global
     Note, and in all other cases, a IAI Global Note.

          (ii) Transfer or Exchange of Restricted Definitive Notes to Beneficial
     Interests in Unrestricted Global Notes. A holder of a Restricted Definitive
     Note may exchange such Restricted Definitive Note for a beneficial interest
     in an Unrestricted Global Note or transfer such Restricted Definitive Note
     to a Person who takes delivery thereof in the form of a beneficial interest
     in an Unrestricted Global Note only if the Registrar receives the
     following:

               (A) if the holder of such Restricted Definitive Note proposes to
          exchange such Restricted Definitive Note for a beneficial interest in
          an


                                       18



          Unrestricted Global Note, a certificate from such holder in the form
          of Exhibit C hereto, including the certifications in item (1)(c)
          thereof; or

               (B) if the holder of such Restricted Definitive Note proposes to
          transfer such Restricted Definitive Note to a Person who shall take
          delivery thereof in the form of a beneficial interest in an
          Unrestricted Global Note, a certificate from such Holder in the form
          of Exhibit B hereto, including the certifications in item (4) thereof;

          and, in each such case, if the Registrar so requests or if the
          Applicable Procedures so require, an Opinion of Counsel in form
          reasonably acceptable to the Registrar to the effect that such
          exchange or transfer shall be effected in compliance with the
          Securities Act and that the restrictions on transfer contained herein
          and in the Private Placement Legend shall no longer be required in
          order to maintain compliance with the Securities Act.

          Upon satisfaction of the conditions of any of the clauses in this
     Section 2.06(d)(ii), the Trustee shall cancel such Restricted Definitive
     Note and increase or cause to be increased in a corresponding amount
     pursuant to Section 2.06(g) hereof, the aggregate principal amount of the
     Unrestricted Global Note.

          (iii) Transfer or Exchange of Unrestricted Definitive Notes to
     Beneficial Interests in Unrestricted Global Notes. A holder of an
     Unrestricted Definitive Note may exchange such Unrestricted Definitive Note
     for a beneficial interest in an Unrestricted Global Note or transfer such
     Unrestricted Definitive Note to a Person who takes delivery thereof in the
     form of a beneficial interest in an Unrestricted Global Note at any time.
     Upon receipt of a request for such an exchange or transfer, the Trustee
     shall cancel the applicable Unrestricted Definitive Note and increase or
     cause to be increased in a corresponding amount pursuant to Section 2.06(g)
     hereof the aggregate principal amount of one of the Unrestricted Global
     Notes.

          (iv) Transfer or Exchange of Unrestricted Definitive Notes to
     Beneficial Interests in Restricted Global. Notes Prohibited. An
     Unrestricted Definitive Note may not be exchanged for, or transferred to
     Persons who take delivery thereof in the form of, beneficial interests in a
     Restricted Global Note.

          (v) Issuance of Unrestricted Global Notes. If any such exchange or
     transfer of a Definitive Note for a beneficial interest in an Unrestricted
     Global Note is effected pursuant to clause (ii) or (iii) at a time when an
     Unrestricted Global Note has not yet been issued, the Co-Issuers shall
     issue and, upon receipt of an Authentication Order in accordance with
     Section 2.02 hereof, the Trustee shall authenticate one or more
     Unrestricted Global Notes in an aggregate principal amount equal to the
     principal amount of Definitive Notes so transferred.

          (e) TRANSFER AND EXCHANGE OF DEFINITIVE NOTES FOR DEFINITIVE NOTES.
Upon request by a holder of Definitive Notes and such holder's compliance with
the provisions of this Section 2.06(e), the Registrar shall register the
transfer or exchange of Definitive Notes. Prior to such registration of transfer
or exchange, the requesting Holder shall present or surrender to the Registrar
the Definitive Notes duly endorsed or accompanied by a written instruction of
transfer in form satisfactory to the Registrar duly executed by such holder. In
addition, the requesting holder shall provide any additional certifications,
documents and information, as applicable, required pursuant to the following
provisions of this Section 2.06(e).

          (i) Transfer of Restricted Definitive Notes to Restricted Definitive
     Notes. Any Restricted Definitive Note may be transferred to and registered
     in the name of Persons who take delivery thereof in the form of a
     Restricted Definitive Note if the Registrar receives the following:

               (A) if the transfer will be made pursuant to Rule 144 A, a
          certificate in the form of Exhibit B hereto, including the
          certifications in item (1) thereof;


                                       19



               (B) if the transfer will be made pursuant to Rule 903 or Rule
          904, a certificate in the form of Exhibit B hereto, including the
          certifications in item (2) thereof; and

               (C) if the transfer will be made pursuant to any other exemption
          from the registration requirements of the Securities Act, a
          certificate in the form of Exhibit B hereto, including the
          certifications, certificates and Opinion of Counsel required by item
          (3) thereof, if applicable.

          (ii) Transfer or Exchange of Restricted Definitive Notes to
     Unrestricted Definitive Notes. Any Restricted Definitive Note may be
     exchanged by the holder thereof for an Unrestricted Definitive Note or
     transferred to a Person or Persons who take delivery thereof in the form of
     an Unrestricted Definitive Note only if the Registrar receives the
     following:

               (A) if the holder of such Restricted Definitive Note proposes to
          exchange such Restricted Definitive Notes for an Unrestricted
          Definitive Note, a certificate from such holder in the form of Exhibit
          C hereto, including the certifications in item (1)(d) thereof; or

               (B) if the holder of such Restricted Definitive Notes proposes to
          transfer such Restricted Definitive Notes to a Person who shall take
          delivery thereof in the form of an Unrestricted Definitive Note, a
          certificate from such holder in the form of Exhibit B hereto,
          including the certifications in item (4) thereof;

          and, in each such case, if the Registrar so requests, an Opinion of
          Counsel in form reasonably acceptable to the Registrar to the effect
          that such exchange or transfer complies with the Securities Act and
          that the restrictions on transfer contained herein and in the Private
          Placement Legend are no longer required in order to maintain
          compliance with the Securities Act.

          Upon satisfaction of the conditions of any of the clauses of this
Section 2.06(e)(ii), the Trustee shall cancel the prior Restricted Definitive
Note and the Co-Issuers shall execute, and upon receipt of an Authentication
Order in accordance with Section 2.02 hereof, the Trustee shall authenticate and
deliver an Unrestricted Definitive Note in the appropriate aggregate principal
amount to the Person designated by the holder of such prior Restricted
Definitive Note in instructions delivered to the Registrar by such holder.

          (iii) Transfer of Unrestricted Definitive Notes to Unrestricted
     Definitive Notes. A holder of Unrestricted Definitive Notes may transfer
     such Unrestricted Definitive Notes to a Person who takes delivery thereof
     in the form of an Unrestricted Definitive Note. Upon receipt of a request
     to register such a transfer, the Registrar shall register the Unrestricted
     Definitive Notes pursuant to the instructions from the holder thereof.

          (f) LEGENDS. The following legends shall appear on the face of all
Global Notes and Definitive Notes issued under this Indenture unless
specifically stated otherwise in the applicable provisions of this Indenture.

          (i) Private Placement Legend.

               (A) Except as permitted by clause (B) below, each Global Note and
          each Definitive Note (and all Notes issued in exchange therefor or
          substitution thereof) shall bear the legend in substantially the
          following form:

          "THE NOTES EVIDENCED HEREBY HAVE NOT BEEN REGISTERED UNDER THE UNITED
     STATES SECURITIES ACT OF 1933 (THE "SECURITIES ACT") AND MAY NOT BE
     OFFERED, SOLD, PLEDGED OR OTHERWISE TRANSFERRED EXCEPT (1) TO A PERSON WHOM
     THE SELLER REASONABLY BELIEVES IS A QUALIFIED INSTITUTIONAL BUYER


                                       20


     WITHIN THE MEANING OF RULE 144A UNDER THE SECURITIES ACT PURCHASING FOR ITS
     OWN ACCOUNT OR FOR THE ACCOUNT OF A QUALIFIED INSTITUTIONAL BUYER IN A
     TRANSACTION MEETING THE REQUIREMENTS OF RULE 144A, (2) TO A NON-U.S. PERSON
     IN AN OFFSHORE TRANSACTION COMPLYING WITH RULE 903 OR RULE 904 OF
     REGULATION S UNDER THE SECURITIES ACT, (3) PURSUANT TO AN EXEMPTION FROM
     REGISTRATION UNDER THE SECURITIES ACT PROVIDED BY RULE 144 THEREUNDER (IF
     AVAILABLE) OR (4) TO AN INSTITUTIONAL "ACCREDITED INVESTOR" WITHIN THE
     MEANING OF RULE 501 (A)(1), (2), (3) OR (7) UNDER THE SECURITIES ACT, IN A
     TRANSACTION EXEMPT FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES
     ACT, IN EACH CASE, IN ACCORDANCE WITH ALL APPLICABLE SECURITIES LAWS OF THE
     STATES OF THE UNITED STATES."

               (B) Notwithstanding the foregoing, any Global Note or Definitive
          Note issued pursuant to clauses (b)(iv), (c)(iii), (c)(iv), (d)(ii),
          (d)(iii), (e)(ii) or (e)(iii) to this Section 2.06 (and all Notes
          issued in exchange therefor or substitution thereof) shall not bear
          the Private Placement Legend.

          (ii) Global Note Legend. Each Global Note shall bear a legend in
     substantially the following form:

          "THIS GLOBAL NOTE IS HELD BY THE DEPOSITARY (AS DEFINED IN THE
     INDENTURE GOVERNING THIS NOTE) OR ITS NOMINEE IN CUSTODY FOR THE BENEFIT OF
     THE BENEFICIAL OWNERS HEREOF, AND IS NOT TRANSFERABLE TO ANY PERSON UNDER
     ANY CIRCUMSTANCES EXCEPT THAT (I) THE TRUSTEE MAY MAKE SUCH NOTATIONS
     HEREON AS MAY BE REQUIRED PURSUANT TO SECTION 2.06 OF THE INDENTURE, (II)
     THIS GLOBAL NOTE MAY BE EXCHANGED IN WHOLE BUT NOT IN PART PURSUANT TO
     SECTION 2.06(a) OF THE INDENTURE, (III) THIS GLOBAL NOTE MAY BE DELIVERED
     TO THE TRUSTEE FOR CANCELLATION PURSUANT TO SECTION 2.11 OF THE INDENTURE
     AND (IV) THIS GLOBAL NOTE MAY BE TRANSFERRED TO A SUCCESSOR DEPOSITARY WITH
     THE PRIOR WRITTEN CONSENT OF THE CO-ISSUERS.

          UNLESS AND UNTIL IT IS EXCHANGED IN WHOLE OR IN PART FOR NOTES IN
     DEFINITIVE FORM, THIS NOTE MAY NOT BE TRANSFERRED EXCEPT AS A WHOLE BY THE
     DEPOSITARY TO A NOMINEE OF THE DEPOSITARY OR BY A NOMINEE OF THE DEPOSITARY
     TO THE DEPOSITARY OR ANOTHER NOMINEE OF THE DEPOSITARY OR BY THE DEPOSITARY
     OR ANY SUCH NOMINEE TO A SUCCESSOR DEPOSITARY OR A NOMINEE OF SUCH
     SUCCESSOR DEPOSITARY. UNLESS THIS NOTE IS PRESENTED BY AN AUTHORIZED
     REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION
     ("DTC"), TO THE CO-ISSUERS OR THEIR AGENTS FOR REGISTRATION OF TRANSFER,
     EXCHANGE OR PAYMENT, AND ANY NOTE ISSUED IS REGISTERED IN THE NAME OF CEDE
     & CO. OR IN SUCH OTHER NAME AS MAY BE REQUESTED BY AN AUTHORIZED
     REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO CEDE & CO. OR TO SUCH
     OTHER ENTITY AS MAY BE REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC),
     ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO
     ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO.,
     HAS AN INTEREST HEREIN."

          (iii) Regulation S Temporary Global Note Legend. Each Regulation S
     Temporary Global Note shall bear a legend in substantially the following
     form:

          "EXCEPT AS SET FORTH BELOW, BENEFICIAL OWNERSHIP INTERESTS IN THIS
     REGULATION S TEMPORARY GLOBAL NOTE WILL NOT BE EXCHANGEABLE FOR INTERESTS
     IN THE REGULATION S PERMANENT GLOBAL NOTE OR ANY OTHER NOTE REPRESENTING AN
     INTEREST IN THE NOTES REPRESENTED HEREBY WHICH DO NOT CONTAIN A LEGEND
     CONTAINING RESTRICTIONS ON TRANSFER, UNTIL THE EXPIRATION OF THE "40-DAY
     DISTRIBUTION COMPLIANCE PERIOD" (WITHIN THE MEANING OF RULE 903(B)(2) OF
     REGULATION S UNDER THE SECURITIES ACT) AND THEN ONLY UPON


                                       21



     CERTIFICATION IN FORM REASONABLY SATISFACTORY TO THE TRUSTEE THAT SUCH
     BENEFICIAL INTERESTS ARE OWNED EITHER BY NON-U.S. PERSONS OR U.S. PERSONS
     WHO PURCHASED SUCH INTERESTS IN A TRANSACTION THAT DID NOT REQUIRE
     REGISTRATION UNDER THE SECURITIES ACT. DURING SUCH 40-DAY DISTRIBUTION
     COMPLIANCE PERIOD, BENEFICIAL OWNERSHIP IN THIS REGULATION S TEMPORARY
     GLOBAL NOTE MAY ONLY BE SOLD, PLEDGED OR TRANSFERRED THROUGH EUROCLEAR
     SYSTEM OR CLEARSTREAM LUXEMBOURG, A SOCIETE ANONYME AND ONLY (1) TO THE
     COMPANY, (2) WITHIN THE UNITED STATES TO A PERSON WHOM THE SELLER
     REASONABLY BELIEVES IS A QUALIFIED INSTITUTIONAL BUYER (AS DEFINED IN RULE
     144A UNDER THE SECURITIES ACT) IN A TRANSACTION MEETING THE REQUIREMENTS OF
     RULE 144A, (3) OUTSIDE THE UNITED STATES IN A TRANSACTION IN ACCORDANCE
     WITH RULE 904 UNDER THE SECURITIES ACT OR (4) PURSUANT TO AN EFFECTIVE
     REGISTRATION STATEMENT UNDER THE SECURITIES ACT, IN EACH OF THE CASES (1)
     THROUGH (4) IN ACCORDANCE WITH ANY APPLICABLE SECURITIES LAWS OF ANY STATE
     OF THE UNITED STATES AND OTHER JURISDICTIONS. HOLDERS OF INTERESTS IN THIS
     REGULATION S TEMPORARY GLOBAL NOTE WILL NOTIFY ANY PURCHASER OF THIS NOTE
     OF THE RESALE RESTRICTIONS REFERRED TO ABOVE, IF THEN APPLICABLE.

          BENEFICIAL INTERESTS IN THIS REGULATION S TEMPORARY GLOBAL NOTE MAY BE
     EXCHANGED FOR INTERESTS IN A RESTRICTED GLOBAL NOTE ONLY IF (1) SUCH
     EXCHANGE OCCURS IN CONNECTION WITH A TRANSFER OF THE NOTES IN COMPLIANCE
     WITH RULE 144A, AND (2) THE TRANSFEROR OF THE REGULATION S TEMPORARY GLOBAL
     NOTE FIRST DELIVERS TO THE TRUSTEE A WRITTEN CERTIFICATE (IN THE FORM
     ATTACHED TO THIS CERTIFICATE) TO THE EFFECT THAT THE REGULATION S GLOBAL
     NOTE IS BEING TRANSFERRED (A) TO A PERSON WHO THE TRANSFEROR REASONABLY
     BELIEVES TO BE A QUALIFIED INSTITUTIONAL BUYER WITHIN THE MEANING OF RULE
     144A, (B) TO A PERSON WHO IS PURCHASING FOR ITS OWN ACCOUNT OR THE ACCOUNT
     OF A QUALIFIED INSTITUTIONAL BUYER IN A TRANSACTION MEETING THE
     REQUIREMENTS OF RULE 144A AND (C) IN ACCORDANCE WITH ALL APPLICABLE
     SECURITIES LAWS OF THE STATES OF THE UNITED STATES AND OTHER JURISDICTIONS.

          BENEFICIAL INTERESTS IN A GLOBAL TRANSFER RESTRICTED NOTE MAY BE
     TRANSFERRED TO A PERSON WHO TAKES DELIVERY IN THE FORM OF AN INTEREST IN
     THE REGULATION S GLOBAL NOTE, WHETHER BEFORE OR AFTER THE EXPIRATION OF THE
     40-DAY DISTRIBUTION COMPLIANCE PERIOD, ONLY IF THE TRANSFEROR FIRST
     DELIVERS TO THE TRUSTEE A WRITTEN CERTIFICATE (IN THE FORM ATTACHED TO THIS
     CERTIFICATE) TO THE EFFECT THAT IF SUCH TRANSFER IS BEING MADE IN
     ACCORDANCE WITH RULE 903 OR 904 OF REGULATION S OR RULE 144 (IF AVAILABLE)
     AND THAT, IF SUCH TRANSFER OCCURS PRIOR TO THE EXPIRATION OF THE 40-DAY
     DISTRIBUTION COMPLIANCE PERIOD, THE INTEREST TRANSFERRED WILL BE HELD
     IMMEDIATELY THEREAFTER THROUGH EUROCLEAR SYSTEM OR CLEARSTREAM LUXEMBOURG,
     A SOCIETE ANONYME."

          (g) CANCELLATION AND/OR ADJUSTMENT OF GLOBAL NOTES. At such time as
all beneficial interests in a particular Global Note have been exchanged for
Definitive Notes or a particular Global Note has been redeemed, repurchased or
cancelled in whole and not in part, each such Global Note shall be returned to
or retained and cancelled by the Trustee in accordance with Section 2.11 hereof.
At any time prior to such cancellation, if any beneficial interest in a Global
Note is exchanged for or transferred to a Person who will take delivery thereof
in the form of a beneficial interest in another Global Note or for Definitive
Notes, the aggregate principal amount of Notes represented by such Global Note
shall be reduced accordingly and an endorsement shall be made on such Global
Note by the Trustee or by the Depositary at the direction of the Trustee to
reflect such reduction; and if the beneficial interest is being exchanged for or
transferred to a Person who will take delivery thereof in the form of a
beneficial interest in another Global Note, the aggregate principal amount of
such other Global Note shall be increased accordingly and an endorsement shall
be made on such Global Note by the Trustee or by the Depositary at the direction
of the Trustee to reflect such increase.


                                       22



          (h) GENERAL PROVISIONS RELATING TO TRANSFERS AND EXCHANGES.

          (i) No service charge shall be made to a holder of a beneficial
     interest in a Global Note or to a Holder of a Definitive Note for any
     registration of transfer or exchange, but the Co-Issuers may require
     payment of a sum sufficient to cover any transfer tax or similar
     governmental charge payable in connection therewith (other than any such
     transfer taxes or similar governmental charge payable upon exchange or
     transfer pursuant to Sections 2.10, 3.06 and 9.05 hereof).

          (ii) All Global Notes and Definitive Notes issued upon any
     registration of transfer or exchange of Global Notes or Definitive Notes
     shall be the valid obligations of the Co-Issuers, evidencing the same debt
     as the Global Notes or Definitive Notes surrendered upon such registration
     of transfer or exchange and shall be entitled to all of the benefits of
     this Indenture equally and proportionately with all other Notes duly issued
     hereunder.

          (iii) Neither the Registrar nor the Co-Issuers shall be required (A)
     to issue, to register the transfer of or to exchange any Notes during a
     period beginning at the opening of business 15 days before the day of any
     selection of Notes for redemption under Section 3.02 hereof and ending at
     the close of business on the date of selection, (B) to register the
     transfer of or to exchange any Note so selected for redemption in whole or
     in part, except the unredeemed portion of any Note being redeemed in part
     or (C) to register the transfer of or to exchange a Note between a record
     date (including a Regular Record Date) and the next succeeding Interest
     Payment Date.

          (iv) Prior to due presentment for the registration of transfer of any
     Note, the Trustee, any Agent and the Co-Issuers may deem and treat the
     Person in whose name any Note is registered as the absolute owner of such
     Note for the purpose of receiving payment of principal of, premium, if any,
     and interest on such Note and for all other purposes, in each case
     regardless of any notice to the contrary.

          (v) All certifications, certificates and Opinions of Counsel required
     to be submitted to the Registrar pursuant to this Section 2.06 to effect a
     registration of transfer or exchange may be submitted by facsimile.

          (vi) The Trustee is hereby authorized and directed to enter into a
     letter of representation with the Depositary in the form provided by the
     Co-Issuers and to act in accordance with such letter.

Section 2.07. REPLACEMENT NOTES.

          If any mutilated Note is surrendered to the Trustee or the Co-Issuers
and the Trustee receives evidence to its satisfaction of the destruction, loss
or theft of any Note, the Co-Issuers shall issue and, upon receipt of an
Authentication Order in accordance with Section 2.02 hereof, the Trustee shall
authenticate a replacement Note. If required by the Trustee or the Co-Issuers,
the Holder of such Note shall provide indemnity that is sufficient, in the
judgment of the Trustee or the Co-Issuers, to protect the Co-Issuers, the
Trustee, any Agent and any authenticating agent from any loss that any of them
may suffer in connection with such replacement. If required by the Co-Issuers,
such Holder shall reimburse the Co-Issuers for their reasonable expenses in
connection with such replacement.

          Every replacement Note issued in accordance with this Section 2.07
shall be the valid obligation of the Co-Issuers, evidencing the same debt as the
destroyed, lost or stolen Note, and shall be entitled to all of the benefits of
this Indenture equally and proportionately with all other Notes duly issued
hereunder.

Section 2.08. OUTSTANDING NOTES.

          (a) The Notes outstanding at any time shall be the entire principal
amount of Notes represented by all of the Global Notes and Definitive Notes
authenticated by the Trustee except for those cancelled by it, those delivered
to it for cancellation, those subject to reductions in beneficial interests
effected by the Trustee in accordance with Section 2.06 hereof, and those
described in this Section 2.08 as not outstanding. Except as set forth


                                       23



 in Section 2.09 hereof, a Note shall not cease to be outstanding because the
 Co-Issuers or an Affiliate of the Co-Issuers holds the Note.

          (b) If a Note is replaced pursuant to Section 2.07 hereof, it shall
cease to be outstanding unless the Trustee receives proof satisfactory to it
that the replaced note is held by a bona fide purchaser.

          (c) If the principal amount of any Note is considered paid under
Section 4.01 hereof, it shall cease to be outstanding and interest on it shall
cease to accrue.

          (d) If the Paying Agent (other than the Company, a Subsidiary or an
Affiliate of any thereof) holds, on a redemption date or a maturity date, funds
sufficient to pay Notes payable on that date, then on and after that date such
Notes shall be deemed to be no longer outstanding and shall cease to accrue
interest.

Section 2.09. TREASURY NOTES.

          In determining whether the Holders of the required principal amount of
Notes have concurred in any direction, waiver or consent, Notes owned by the
Co-Issuers, or by any Affiliate of the Co-Issuers, shall be considered as though
not outstanding, except that for the purposes of determining whether the Trustee
shall be protected in relying on any such direction, waiver or consent, only
Notes that the Trustee knows are so owned shall be so disregarded.

Section 2.10. TEMPORARY NOTES.

          Until certificates representing Notes are ready for delivery, the
Co-Issuers may prepare and, upon receipt of an Authentication Order in
accordance with Section 2.02 hereof, the Trustee shall authenticate temporary
Notes. Temporary Notes shall be substantially in the form of Defimtive Notes but
may have variations that the Co-Issuers consider appropriate for temporary Notes
and as shall be reasonably acceptable to the Trustee. Without unreasonable
delay, the Co-Issuers shall prepare and the Trustee shall authenticate Global
Notes or Definitive Notes in exchange for temporary Notes, as applicable. After
preparation of Definitive Notes, the Temporary Note will be exchangeable for
Definitive Notes upon surrender of the Temporary Notes.

          Holders of temporary Notes shall be entitled to all of the benefits of
this Indenture equally and proportionately with all other Notes duly issued
hereunder.

Section 2.11. CANCELLATION.

          The Co-Issuers at any time may deliver Notes to the Trustee for
cancellation. The Registrar and Paying Agent shall forward to the Trustee any
Notes surrendered to them for registration of transfer, exchange or payment.
Upon sole direction of the Co-Issuers, the Trustee and no one else shall cancel
all Notes surrendered for registration of transfer, exchange, payment,
replacement or cancellation and shall destroy cancelled Notes (subject to the
record retention requirements of the Exchange Act or other applicable laws)
unless by written order, signed by an Officer of the Co-Issuers, the Co-Issuers
direct them to be returned to it. Certification of the destruction of all
cancelled Notes shall be delivered to the Co-Issuers from time to time upon
request. The Co-Issuers may not issue new Notes to replace Notes that they have
paid or that have been delivered to the Trustee for cancellation.

Section 2.12. PAYMENT OF INTEREST; DEFAULTED INTEREST.

          If the Co-Issuers default in a payment of interest on the Notes, they
shall pay the defaulted interest in any lawful manner plus, to the extent
lawful, interest payable on the defaulted interest, to the Persons who are
Holders on a subsequent special record date, in each case at the rate provided
in the Notes and in Section 4.01 hereof. The Co-Issuers shall notify the Trustee
in writing of the amount of defaulted interest proposed to be paid on each Note
and the date of the proposed payment. The Co-Issuers shall fix or cause to be
fixed each such special record date and payment date; provided that no such
special record date shall be less than 10 days prior to the related Interest
Payment Date for such defaulted interest. At least 15 days before the special
record date, the Co-Issuers (or, upon the written request of the Co-Issuers, the
Trustee in the name and at the expense of the Co-Issuers) shall mail


                                       24



or cause to be mailed to Holders a notice that states the special record date,
the related Interest Payment Date and the amount of such interest to be paid.

Section 2.13. CUSIP OR ISIN NUMBERS.

          The Co-Issuers in issuing the Notes may use "CUSIP" and/or "ISIN"
numbers (if then generally in use), and, if so, the Trustee shall use "CUSIP"
and/or "ISIN" numbers in notices of redemption as a convenience to Holders;
provided, however, that any such notice may state that no representation is made
as to the correctness of such numbers either as printed on the Notes or as
contained in any notice of a redemption and that reliance may be placed only on
the other identification numbers printed on the Notes, and any such redemption
shall not be affected by any defect in or omission of such numbers. The
Co-Issuers shall promptly notify the Trustee of any change in the "CUSIP" and/or
"ISIN" numbers.

Section 2.14. ISSUANCE OF ADDITIONAL NOTES.

          The Co-Issuers shall be entitled, subject to their compliance with
Section 4.09 hereof, to issue Additional Notes under this Indenture which shall
have identical terms as the Initial Notes issued on the date hereof, other than
with respect to the date of issuance and issue price. The Initial Notes issued
on the date hereof and any Additional Notes shall be treated as a single class
for all purposes under this Indenture, including directions, waivers,
amendments, consents and redemptions.

          With respect to any Additional Notes, the Co-Issuers shall set forth
in a Board Resolution and an Officer's Certificate, a copy of each of which
shall be delivered to the Trustee, the following information:

          (a) the aggregate principal amount of such Additional Notes to be
authenticated and delivered pursuant to this Indenture;

          (b) the issue price, the issue date and the CUSIP and/or ISIN number
of such Additional Notes; provided, however, that no Additional Notes may be
issued at a price that would cause such Additional Notes to have "original issue
discount" within the meaning of Section 1273 of the Code, other than a de
minimis original issue discount within the meaning of Section 1273 of the Code;
and

          (c) whether such Additional Notes shall be subject to the restrictions
on transfer set forth in Section 2.06 hereof relating to Restricted Global Notes
and Restricted Definitive Notes.

Section 2.15. RECORD DATE.

          The record date for purposes of determining the identity of Holders of
Notes entitled to vote or consent to any action by vote or consent or permitted
under this Indenture shall be determined as provided for in TIA Section 316(c).

                                   ARTICLE 3.

                            REDEMPTION AND PREPAYMENT

Section 3.01. NOTICES TO TRUSTEE.

          If the Co-Issuers elect to redeem Notes pursuant to the optional
redemption provisions of Section 3.07 hereof, they shall furnish to the Trustee,
at least 35 days but not more than 60 days before a redemption date (or such
shorter period as allowed by the Trustee), an Officer's Certificate setting
forth (a) the applicable section of this Indenture pursuant to which the
redemption shall occur, (b) the redemption date, (c) the principal amount of
Notes to be redeemed and (d) the redemption price.


                                       25



Section 3.02. SELECTION OF NOTES TO BE REDEEMED.

          If less than all of the Notes are to be redeemed at any time, the
Trustee shall select the Notes to be redeemed among the Holders of the Notes in
compliance with the requirements of the principal national securities exchange,
if any, on which the Notes are listed or, if the Notes are not so listed, on a
pro rata basis, by lot or in accordance with any other method the Trustee deems
fair and appropriate. In the event of partial redemption by lot, the particular
Notes to be redeemed shall be selected, unless otherwise provided herein, not
less than 30 nor more than 60 days prior to the redemption date by the Trustee
from the outstanding Notes not previously called for redemption.

          The Trustee shall promptly notify the Co-Issuers in writing of the
Notes selected for redemption and, in the case of any Note selected for partial
redemption, the principal amount thereof to be redeemed. Notes and portions of
Notes selected shall be in amounts of $1,000 or integral multiples thereof;
except that if all of the Notes of a Holder are to be redeemed, the entire
outstanding amount of Notes held by such Holder, even if not an integral
multiple of $1,000, shall be redeemed. Except as provided in the preceding
sentence, provisions of this Indenture that apply to Notes called for redemption
also apply to portions of Notes called for redemption.

Section 3.03. NOTICE OF REDEMPTION.

          At least 30 days but not more than 60 days prior to a redemption date,
the Company shall mail or cause to be mailed, by first class mail, a notice of
redemption to each Holder whose Notes are to be redeemed at such Holder's
registered address appearing in the Security Register.

          The notice shall identify the Notes to be redeemed and shall state:

          (a) the redemption date;

          (b) the appropriate method for calculation of the redemption price,
but need not include the redemption price itself; the actual redemption price
shall be set forth in an Officer's Certificate delivered to the Trustee no later
than two (2) Business Days prior to the redemption date;

          (c) if any Note is being redeemed in part, the portion of the
principal amount of such Note to be redeemed and that, after the redemption date
upon surrender of such Note, if applicable, a new Note or Notes in principal
amount equal to the unredeemed portion shall be issued upon cancellation of the
original Note;

          (d) the name and address of the Paying Agent;

          (e) that Notes called for redemption must be surrendered to the Paying
Agent to collect the redemption price;

          (f) that, unless the Co-Issuers default in making such redemption
payment, interest on Notes called for redemption ceases to accrue on and after
the redemption date;

          (g) the applicable section of this Indenture pursuant to which the
Notes called for redemption are being redeemed; and

          (h) that no representation is made as to the correctness of the CUSIP
and/or ISIN numbers, if any, listed in such notice or printed on the Notes.

          At the Co-Issuers' request, the Trustee shall give the notice of
redemption in the Co-Issuers' names and at their expense; provided, however,
that the Co-Issuers shall have delivered to the Trustee, at least 45 days (or
such shorter period allowed by the Trustee), prior to the redemption date, an
Officer's Certificate requesting that the Trustee give such notice (in the name
and at the expense of the Co-Issuers) and setting forth the information to be
stated in such notice as provided in this Section 3.03.


                                       26


Section 3.04. EFFECT OF NOTICE OF REDEMPTION.

          Once notice of redemption is mailed in accordance with Section 3.03
hereof, Notes called for redemption shall become irrevocably due and payable on
the redemption date at the redemption price. A notice of redemption may not be
conditional.

Section 3.05. DEPOSIT OF REDEMPTION PRICE.

          On or prior to 1:00 p.m. Eastern time on the Business Day prior to any
redemption date, the Co-Issuers shall deposit with the Trustee or with the
Paying Agent money sufficient to pay the redemption price of and, if applicable,
accrued and unpaid interest on all Notes to be redeemed on that date. The
Trustee or the Paying Agent shall promptly, and in any event within two (2)
Business Days after the redemption date, return to the Co-Issuers any money
deposited with the Trustee or the Paying Agent by the Co-Issuers in excess of
the amounts necessary to pay the redemption price of, and accrued and unpaid
interest, if any, on, all Notes to be redeemed.

          If the Co-Issuers comply with the provisions of the preceding
paragraph, on and after the redemption date, interest shall cease to accrue on
the Notes or the portions of Notes called for redemption in accordance with
Section 2.08(d) hereof, whether or note such Notes are presented for payment. If
a Note is redeemed on or after a Regular Record Date but on or prior to the
related Interest Payment Date, then any accrued and unpaid interest, if any,
shall be paid to the Person in whose name such Note was registered at the close
of business on such Regular Record Date. If any Note called for redemption shall
not be so paid upon surrender for redemption because of the failure of the
Co-Issuers to comply with the preceding paragraph, interest shall be paid on the
unpaid principal from the redemption date until such principal is paid, and to
the extent lawful on any interest not paid on such unpaid principal, in each
case at the rate provided in the Notes and in Section 4.01 hereof.

Section 3.06. NOTES REDEEMED IN PART.

          Upon surrender of a Note that is redeemed in part, the Co-Issuers
shall issue and, upon receipt of an authentication order in accordance with
Section 2.02 hereof, the Trustee shall authenticate for the Holder at the
expense of the Co-Issuers a new Note equal in principal amount to the unredeemed
portion of the Note surrendered.

Section 3.07. OPTIONAL REDEMPTION.

          (a) At any time, the Co-Issuers may redeem all or any portion of the
Notes, at once or over time, after giving the notice required pursuant to
Section 3.03 hereof, at a redemption price equal to the Make-Whole Price. Any
notice to the Holders of Notes of a redemption pursuant to this Section 3.07(a)
shall include the calculation of the redemption price, but need not include the
redemption price itself. The actual redemption price, calculated as described
above, shall be set forth in an Officer's Certificate delivered to the Trustee
no later than two Business Days prior to the redemption date.

          (b) Any prepayment pursuant to this Section 3.07 shall be made
pursuant to the provisions of Sections 3.01 through 3.06 hereof.

Section 3.08. MANDATORY REDEMPTION.

          The Co-Issuers shall not be required to make mandatory redemption or
sinking fund payments with respect to, or offer to purchase, the Notes.

                                   ARTICLE 4.

                                   COVENANTS


                                       27



Section 4.01. PAYMENT OF PRINCIPAL, PREMIUM AND INTEREST.

          The Co-Issuers covenant and agree for the benefit of the Holders of
the Notes that they will duly and punctually pay the principal of and any
premium and interest on the Notes in accordance with the terms of the Notes and
this Indenture. Principal, premium, if any, and interest shall be considered
paid on the date due if the Paying Agent, if other than the Company or a
Subsidiary thereof, holds as of 1:00 p.m. Eastern Time on the due date money
deposited by the Co-Issuers in immediately available funds and designated for
and sufficient to pay all principal, premium, if any, and interest then due.
Such Paying Agent shall return to the Co-Issuers promptly, and in any event, no
later than five (5) Business Days following the date of payment, any money
(including accrued interest) that exceeds such amount of principal, premium, if
any, and interest paid on the Notes. If a payment date is a Legal Holiday at a
place of payment, payment may be made at that place on the next succeeding day
that is not a Legal Holiday, and no interest shall accrue on such payment for
the intervening period.

          Interest shall be computed on the basis of a 360-day year of twelve
30-day months.

Section 4.02. MAINTENANCE OF OFFICE OR AGENCY.

          (a) The Co-Issuers shall maintain in the United States, an office or
agency (which may be an office or drop facility of the Trustee or an affiliate
of the Trustee, Registrar or co-registrar) where Notes may be presented or
surrendered for registration of transfer or for exchange and where notices and
demands to or upon the Co-Issuers in respect of the Notes and this Indenture may
be served. The Co-Issuers shall give prompt written notice to the Trustee of the
location, and any change in the location, of such office or agency. If at any
time the Co-Issuers shall fail to maintain any such required office or agency or
shall fail to furnish the Trustee with the address thereof, such presentations,
surrenders, notices and demands may be made or served at the Corporate Trust
Office of the Trustee, and the Co-Issuers hereby appoint the Trustee as their
agent to receive all such presentations, surrenders, notices and demands.

          (b) The Co-Issuers may also from time to time designate one or more
other offices or agencies where the Notes may be presented or surrendered for
any or all such purposes and may from time to time rescind such designations;
provided, however, that no such designation or rescission shall in any manner
relieve the Co-Issuers of their obligation to maintain an office or agency for
the Notes for such purposes. The Co-Issuers shall give prompt written notice to
the Trustee of any such designation or rescission and of any change in the
location of any such other office or agency.

          (c) The Co-Issuers hereby designates the Corporate Trust Office of the
Trustee, as one such office, drop facility or agency of the Co-Issuers in
accordance with Section 2.03 hereof.

Section 4.03. REPORTING.

          So long as the Notes are outstanding, the Company will provide:

          (a) not later than 105 days after the end of each fiscal year of the
Company, audited consolidated financial statements of the Company, including
consolidated balance sheets as of the end of such year and the end of the
preceding year and the related audited consolidated statements of income and of
cash flows for each year in the three year period then ended, reported on by an
independent registered public accounting firm of nationally recognized standing;

          (b) not later than 60 days after the end of each of the first three
quarterly periods of each fiscal year of the Company, unaudited consolidated
financial statements of the Company, including a balance sheet as at the end of
such quarter and the related unaudited consolidated statements of income and of
cash flows for such quarter and the portion of the fiscal year through the end
of such quarter, setting forth in each case in comparative form the figures for
the previous year; and

          (c) with each delivery of the financial statements specified in
clauses (a) and (b), a corresponding discussion of the statements of income
included therein and the Company's cash position.


                                       28



          All such financial statements shall be prepared in accordance with
GAAP; provided that the financial statements specified in clause (b) need not
contain footnotes. The information specified in clauses (a), (b) and (c) is
herein referred to as the "REQUIRED INFORMATION."

          The Company may provide the Required Information by (1) filing or
furnishing the Required Information with the Commission (submitted either by the
Company or any direct or indirect parent of the Company) or (2) both (a) posting
the Required Information on the website of the Company or any direct or indirect
parent of the Company and (b) providing the Required Information to the Trustee.

          In addition, for so long as any Notes are "restricted securities"
within the meaning of Rule 144(a)(3) under the Securities Act, during any period
in which the Company is not subject to or in voluntary compliance with Section
13 or 15(d) of the Exchange Act, the Company will furnish to the holders of the
notes and to prospective investors, upon their request, the information required
to be delivered pursuant to Rule 144A(d)(4) under the Securities Act.

Section 4.04. COMPLIANCE CERTIFICATE.

          The Co-Issuers will deliver to the Trustee, within 120 days after the
end of each fiscal year of the Co-Issuers ending after the date hereof, an
Officer's Certificate, stating whether or not to the best knowledge of the
signers thereof the Co-Issuers are in default in the performance and observance
of any of the terms, provisions and conditions of this Indenture (without regard
to any period of grace or requirement of notice provided hereunder) and, if the
Co-Issuers shall be in default, specifying all such defaults and the nature and
status thereof of which they may have knowledge.

Section 4.05. PAYMENT OF TAXES AND OTHER CLAIMS.

          The Co-Issuers will pay or discharge or cause to be paid or
discharged, before the same shall become delinquent, (1) all taxes, assessments
and governmental charges levied or imposed upon the Co-Issuers or any
Significant Subsidiary or upon the income, profits or property of the Co-Issuers
or any Significant Subsidiary, and (2) all lawful claims for labor, materials
and supplies which, if unpaid, might by law become a lien upon the property of
the Co-Issuers or any Significant Subsidiary; provided, however, that the
Co-Issuers shall not be required to pay or discharge or cause to be paid or
discharged any such tax, assessment, charge or claim whose amount, applicability
or validity is being contested in good faith by appropriate proceedings.

Section 4.06. EXISTENCE.

          Subject to Article 5, the Co-Issuers will do or cause to be done all
things necessary to preserve and keep in full force and effect their existence,
rights (charter and statutory) and franchises; provided, however, that the
Co-Issuers shall not be required to preserve any such right or franchise if the
Board of Directors shall determine that the preservation thereof is no longer
desirable in the conduct of the business of the Co-Issuers and that the loss
thereof is not disadvantageous in any material respect to the Holders.

Section 4.07. MAINTENANCE OF PROPERTIES

          The Company will cause all material properties used or useful in the
conduct of its business or the business of any Significant Subsidiary to be
maintained and kept in good condition, repair and working order and supplied
with all necessary equipment and will cause to be made all necessary repairs,
renewals, replacements, betterments and improvements thereof, all as in the
judgment of the Company may be necessary so that the business carried on in
connection therewith may be properly and advantageously conducted at all times;
provided, however, that nothing in this Section shall prevent the Company from
(i) discontinuing the operation or maintenance of any of such properties if such
discontinuance is, in the judgment of me Company, desirable in the conduct of
its business or the business of any Significant Subsidiary and not
disadvantageous in any material respect to the Holders or (ii) selling any
properties or taking any action in accordance with Article 5.


                                       29



Section 4.08. INCURRENCE OF ADDITIONAL DEBT AND ISSUANCE OF CAPITAL STOCK.

          The Company and its consolidated Subsidiaries may not Incur any Debt
if, after giving effect to the Incurrence of such Debt, the Ratio Calculation is
less than 1.7 to 1.

          Notwithstanding the foregoing paragraph, the Company and its
consolidated Subsidiaries may Incur the following additional Debt without regard
to the foregoing limitation (although the additional Debt so incurred will be
included in the determination of the Consolidated Coverage Ratio thereafter):

          (a) additional Debt securities, not to exceed an aggregate issue price
of $150,000,000;

          (b) intercompany Debt (representing Debt to which the only parties are
the Company and any of its consolidated Subsidiaries (but only so long as such
Debt is held solely by any of the Company and its consolidated Subsidiaries));

          (c) any drawings or redrawings under any lines of credit, provided,
however, that the maximum amount that may be drawn under all lines of credit
pursuant to this clause (c) may not at any time exceed $200,000,000;

          (d) refinancings, renewals, refundings or extensions of any Debt, in
any case in an amount not to exceed the principal amount of the Debt so
refinanced plus any prepayment premium or accrued interest, provided that

          (i) such refinancing Debt is either:

               (A) Debt of the Company that ranks equally with or junior to the
          Debt being refinanced,

               (B) Debt of a Subsidiary that the Company or another Subsidiary
          guarantees, or

               (C) Debt of a Subsidiary; and

          (ii) such refinancing Debt either has a weighted average life equal to
     or longer than the remaining weighted average life of the Debt being
     refinanced or has a minimum term of five years;

          (e) third party Debt of a Subsidiary, including Debt of a Subsidiary
that carries a Company guarantee of repayment, directly relating to the
development of projects or the expansion, renovation or improvement of existing
properties;

          (f) third party Debt of a Subsidiary directly relating to the
acquisition of assets;

          (g) reimbursement obligations under letters of credit, bankers'
acceptances or similar facilities, provided that at the time of incurring any
additional obligations pursuant to this clause (g) the amount of all such
obligations, whether or not currently due, aggregate at any time less than 5% of
Consolidated Net Tangible Assets at such date;

          (h) Debt that by its terms is subordinate in right of payment to the
other Debt of the Company, provided, however, the aggregate issue price of such
subordinated Debt may not at any time exceed $100,000,000;

          (i) Attributable Debt; and

          (j) in addition to Debt referred to in clauses (a) through (i) above,
Debt in the aggregate principal amount of $50,000,000 that is to be used only
for working capital purposes.


                                       30



          In addition to the foregoing limitations, the Company will not, and
will not permit any Subsidiary (as to which the Company owns, directly or
indirectly, more than 50% of the voting stock therein) to, incur any Debt if,
immediately after giving effect to the incurrence of such additional Debt, the
aggregate principal amount of outstanding Total Debt would be greater than 65%
of the sum of:

          (a) the Gross Asset Value as of the end of the fiscal quarter prior to
the incurrence of such additional Debt, plus

          (b) any increase in the Gross Asset Value resulting from any
acquisition completed after the end of such quarter, including, without
limitation, any pro forma increase from the application of the proceeds of such
additional Debt, less

          (c) any decrease in the Gross Asset Value resulting from any
disposition completed after the end of such quarter.

          In addition to the foregoing limitation, the Company will not, and
will not permit any Subsidiary (as to which the Company owns, directly or
indirectly, more than 50% of the voting stock therein) to, incur any Secured
Debt if, immediately after giving effect to the incurrence of such additional
Secured Debt, the aggregate principal amount of all outstanding Secured Debt
would be greater than 50% of the sum of:

          (a) the Gross Asset Value as of the end of the fiscal quarter prior to
the incurrence of such additional Secured Debt, plus

          (b) any increase in the Gross Asset Value resulting from any
acquisition completed after the end of such quarter, including, without
limitation, any pro forma increase from the application of the proceeds of such
additional Secured Debt, less

          (c) any decrease in the Gross Asset Value resulting from any
disposition completed after the end of such quarter.

Section 4.09. LIMITATION ON SALE/LEASEBACK TRANSACTIONS.

          The Company will not, nor will it permit any Restricted Subsidiary to,
enter into any arrangement with any bank, insurance company or other lender or
investor (not including the Company or any consolidated Subsidiary) or to which
any such lender or investor is a party, providing for the leasing by the Company
or any such Restricted Subsidiary for a period, including renewals, in excess of
three years, of any Principal Property owned by the Company or such Restricted
Subsidiary, which has been or is to be sold or transferred more than one year
after either the acquisition thereof or the completion of construction and
commencement of full operation thereof by the Company or any such Restricted
Subsidiary, to such lender or investor or to any Person to whom funds have been
or are to be advanced by such lender or investor on the security of such
Principal Property (herein referred to as a "SALE/LEASEBACK TRANSACTION") unless
(A) the aggregate amount of Attributable Debt for the proposed and all existing
Sale/Leaseback Transactions is less than 10% of Consolidated Net Tangible Assets
and (B) if the Ratio Calculation is less than 1.7 to 1 after giving effect to
the proposed Sale/Leaseback Transaction, the Company and its Subsidiaries,
within 270 days after the sale or transfer shall have been made by the Company
or by any such Restricted Subsidiary, must apply an amount equal to the net
proceeds of the sale of the Principal Property sold and leased back pursuant to
such arrangement to either (or a combination of) (x) the purchase of property,
facilities or equipment (other than the property, facilities or equipment
involved in such Sale/Leaseback Transaction) or (y) the retirement of Debt of
the Company or a Restricted Subsidiary, including the notes, which either has an
initial term of greater than 12 months or is a bona fide acquisition loan or a
construction or bridge loan entered in connection with a construction project or
other real estate development.

Section 4.10. OWNERSHIP OF CORPORATE CO-ISSUER.

          The Company will not cease to own, directly or indirectly, 100% of the
Capital Stock of Corporate Co-Issuer unless the Company owns, directly or
indirectly, 100% of the Capital Stock of the successor corporation


                                       31



to Corporate Co-Issuer or any substitute corporate co-issuer. Corporate
Co-Issuer shall not consolidate with or merge with or into any other entity that
is not a U.S. corporation.

                                   ARTICLE 5.

              CONSOLIDATION, MERGER, CONVEYANCE, TRANSFER OR LEASE

Section 5.01. COMPANY MAY CONSOLIDATE, ETC. ONLY ON CERTAIN TERMS.

          The Company shall not consolidate with or merge into any other Person
or sell, convey or lease all of substantially all of its Assets to any other
Person, and the Company shall not permit any Person to consolidate with or merge
into the Company, unless:

          (a) the Person (if other than the Company) formed by such
consolidation or into which the Company is merged or which acquires or leases
substantially all of the Assets of the Company, shall be a corporation,
partnership or trust, shall be organized and validly existing under the laws of
the United States of America, any State thereof or the District of Columbia and
shall expressly assume, by an indenture supplemental hereto, executed and
delivered to the Trustee, in form reasonably satisfactory to the Trustee, the
due and punctual payment of the principal of and any premium and interest on all
the Notes and the performance or observance of every covenant of this Indenture
on the part of the Company to be performed or observed;

          (b) immediately after giving effect to such consolidation or merger,
or such sale, conveyance or lease, no Event of Default, and no event which,
after notice or lapse of time or both, would become an Event of Default, shall
have happened and be continuing;

          (c) the Company or such successor entity shall, immediately after
giving effect to such consolidation or merger, or such sale, conveyance or
lease, have a Ratio Calculation of 1.7 to 1 or more;

          (d) if, as a result of any such consolidation or merger or such
conveyance, transfer or lease, properties or assets of the Company would become
subject to a mortgage, pledge, lien, security interest or other encumbrance
which would not be permitted by this Indenture, the Company or such successor
Person, as the case may be, shall take such steps as shall be necessary
effectively to secure the Notes equally and ratably with (or prior to) all
indebtedness secured thereby; and

          (e) the Company has delivered to the Trustee an Officer's Certificate
and an Opinion of Counsel, each stating that such consolidation, merger,
conveyance, transfer or lease and, if a supplemental indenture is required in
connection with such transaction, such supplemental indenture comply with this
Article and that all conditions precedent herein provided for relating to such
transaction have been complied with.

Section 5.02. SUCCESSOR SUBSTITUTED.

          Upon any consolidation of the Company with, or merger of the Company
into, any other Person or any conveyance, transfer or lease of all or
substantially all of the Assets of the Company in accordance with Section 5.01,
the successor Person formed by such consolidation or into which the Company is
merged or to which such conveyance, transfer or lease is made shall succeed to,
and be substituted for, and may exercise every right and power of, the Company
under this Indenture with the same effect as if such successor Person had been
named as the Company herein, and thereafter, except in the case of a lease, the
predecessor Person shall be relieved of all obligations and covenants under this
Indenture and the Notes.


                                       32


                                   ARTICLE 6.

                              DEFAULTS AND REMEDIES

Section 6.01. EVENTS OF DEFAULT.

          "EVENT OF DEFAULT" wherever used herein with respect to the Notes,
means any one of the following events (whatever the reason for such Event of
Default and whether it shall be voluntary or involuntary or be effected by
operation of law or pursuant to any judgment, decree or order of any court or
any order, rule or regulation of any administrative or governmental body):

          (a) default in the payment of the principal of (or premium, if any,
on) any Note when due; or

          (b) default in the payment of any interest upon any Note when it
becomes due and payable, and continuance of such default for a period of 30
days; or

          (c) default in the performance, or breach, of any covenant or warranty
of the Co-Issuers in this Indenture (other man a covenant or warranty a default
which is specifically dealt with) and continuance of such default or breach for
a period of 60 days after there has been given, by registered or certified mail,
to the Co-Issuers by the Trustee or to the Co-Issuers and the Trustee by the
Holders of at least 25% in principal amount of the outstanding Notes a written
notice specifying such default or breach and requiring it to be remedied and
stating that such notice is a "Notice of Default" hereunder; or

          (d) a default under any bond, debenture, note, mortgage, indenture or
other evidence of indebtedness for borrowed money of the Company (or by any
Subsidiary, the repayment of which the Company has guaranteed or for which the
Company is directly responsible or liable as obligor or guarantor) having an
aggregate principal amount outstanding of at least $10,000,000, whether such
indebtedness now exists or shall hereafter be created, which default shall have
resulted in such indebtedness being declared due and payable prior to the date
on which it would otherwise have become due and payable, without such
acceleration having been rescinded or annulled, within a period of 10 days after
there shall have been given, by registered or certified mail, to the Co-Issuers
by the Trustee or to the Co-Issuers and the Trustee by the Holders of at least
25% in principal amount of the outstanding Notes a written notice specifying
such default and requiring the Co-Issuers to cause such acceleration to be
rescinded or annulled and stating that such notice is a "Notice of Default"
hereunder; or

          (e) the entry by a court having jurisdiction in the premises of (A) a
decree or order for relief in respect of either of the Co-Issuers in an
involuntary case or proceeding under any applicable Federal or State bankruptcy,
insolvency, reorganization or other similar law or (B) a decree or order
adjudging either of the Co-Issuers as bankrupt or insolvent, or approving as
properly filed a petition seeking reorganization, arrangement, adjustment or
composition of or in respect of either of the Co-Issuers under any applicable
Federal or State law, or appointing a custodian, receiver, liquidator, assignee,
trustee, sequestrator or other similar official of either of the Co-Issuers or
of any substantial part of their property, or ordering the winding up or
liquidation of their affairs, and the continuance of any such decree or order
for relief or any such other decree or order unstayed and in effect for a period
of 60 consecutive days; or

          (f) the commencement by either of the Co-Issuers of a voluntary case
or proceeding under any applicable Federal or State bankruptcy, insolvency,
reorganization or other similar law or of any other case or proceeding to be
adjudicated a bankrupt or insolvent, or the consent by them to the entry of a
decree or order for relief in respect of either of the Co-Issuers in an
involuntary case or proceeding under any applicable Federal or State bankruptcy,
insolvency, reorganization or other similar law or to the commencement of any
bankruptcy or insolvency case or proceeding against them, or the filing by them
of a petition or answer or consent seeking reorganization or relief under any
applicable Federal or State law, or the consent by them to the filing of such
petition or to the appointment of or taking possession by a custodian, receiver,
liquidator, assignee, trustee, sequestrator or other similar official of either
of the Co-Issuers or of any substantial part of their property, or the making by
them of an assignment for the benefit of creditors, or the admission by them in
writing of their inability to pay their debts generally as they become due, or
the taking of corporate action by either of the Co-Issuers in furtherance of any
such action; or


                                       33



          (g) any other Event of Default provided with respect to Notes.

          Upon receipt by the Trustee of any Notice of Default pursuant to this
Section 6.01 with respect to the Notes, a record date shall automatically and
without any other action by any Person be set for the purpose of determining the
Holders of outstanding Notes entitled to join in such Notice of Default, which
record date shall be the close of business on the day the Trustee receives such
Notice of Default. The Holders of outstanding Notes on such record date (or
their duly appointed agents), and only such Persons, shall be entitled to join
in such Notice of Default, whether or not such Holders remain Holders after such
record date; provided that, unless such Notice of Default shall have become
effective by virtue of Holders of the requisite principal amount of outstanding
Notes on such record date (or their duly appointed agents) having joined therein
on or prior to the 90th day after such record date, such Notice of Default shall
automatically and without any action by any Person be cancelled and of no
further effect. Nothing in this paragraph shall prevent a Holder (or a duly
appointed agent thereof) from giving, before or after the expiration of such
90-day period, a Notice of Default contrary to or different from, or, after the
expiration of such period, identical to, a Notice of Default that has been
cancelled pursuant to the proviso to the preceding sentence, in which event a
new record date in respect thereof shall be set pursuant to this paragraph.

Section 6.02. ACCELERATION.

          If an Event of Default with respect to Notes at the time outstanding
occurs and is continuing, then in every such case the Trustee or the Holders of
not less than 25% in principal amount of the outstanding Notes may declare the
principal amount of all of the Notes to be due and payable immediately, by a
notice in writing to the Co-Issuers (and to the Trustee if given by Holders),
and upon any such declaration such principal amount (or specified amount) shall
become immediately due and payable.

          At any time after such a declaration of acceleration with respect to
Notes has been made and before a judgment or decree for payment of the money due
has been obtained by the Trustee as hereinafter in this Article provided, the
Holders of a majority in principal amount of the outstanding Notes, by written
notice to the Co-Issuers and the Trustee, may rescind and annul such declaration
and its consequences if:

          (a) the Co-Issuers have paid or deposited with the Trustee a sum
sufficient to pay:

          (i) all overdue interest on all Notes,

          (ii) the principal of (and premium, if any, on) any Notes which have
     become due otherwise than by such declaration of acceleration and any
     interest thereon at the rate or rates prescribed therefor in such Notes,

          (iii) to the extent that payment of such interest is lawful, interest
     upon overdue interest at the rate or rates prescribed therefor in such
     Notes, and

          (iv) all sums paid or advanced by the Trustee hereunder and the
     reasonable compensation, expenses, disbursements and advances of the
     Trustee, its agents and counsel;

     and

          (b) all Events of Default with respect to Notes, other than the
non-payment of the principal of Notes which have become due solely by such
declaration of acceleration, have been cured or waived as provided in Section
6.13.

No such rescission shall affect any subsequent default or impair any right
consequent thereon.

          Upon receipt by the Trustee of any declaration of acceleration, or any
rescission and annulment of any such declaration, pursuant to this Section 6.02,
a record date shall automatically and without any other action by any Person be
set for the purpose of determining the Holders of outstanding Notes entitled to
join in such declaration, or rescission and annulment, as the case may be, which
record date shall be the close of business on the


                                       34



day the Trustee receives such declaration, or rescission and annulment, as the
case may be. The Holders of outstanding Notes on such record date (or their duly
appointed agents), and only such Persons, shall be entitled to join in such
declaration, or rescission and annulment, as the case may be, whether or not
such Holders remain Holders after such record date; provided that, unless such
declaration, or rescission and annulment, as the case may be, shall have become
effective by virtue of Holders of the requisite principal amount of outstanding
Notes on such record date (or their duly appointed agents) having joined therein
on or prior to the 90th day after such record date, such declaration, or
rescission and annulment, as the case may be, shall automatically and without
any action by any Person be cancelled and of no further effect. Nothing in this
paragraph shall prevent a Holder (or a duly appointed agent thereof) from
giving, before or after the expiration of such 90-day period, a declaration of
acceleration, or a rescission and annulment of any such declaration, contrary to
or different from, or, after the expiration of such period, identical to, a
declaration, or rescission and annulment, as the case may be, that has been
cancelled pursuant to the proviso to the preceding sentence, in which event a
new record date in respect thereof shall be set pursuant to this paragraph.

Section 6.03. COLLECTION OF INDEBTEDNESS AND SUITS FOR ENFORCEMENT BY TRUSTEE.

          The Co-Issuers covenant that if:

          (a) default is made in the payment of any interest on any Note when
such interest becomes due and payable and such default continues for a period of
30 days, or

          (b) default is made in the payment of the principal of (or premium, if
any, on) any Note at the maturity thereof,

the Co-Issuers will, upon demand of the Trustee, pay to it, for the benefit of
the Holders of such Notes, the whole amount then due and payable on such Notes
for principal and any premium and interest and, to the extent that payment of
such interest shall be legally enforceable, interest on any overdue principal
and premium and on any overdue interest, at the rate or rates prescribed
therefor in such Notes, and, in addition thereto, such further amount as shall
be sufficient to cover the costs and expenses of collection, including the
reasonable compensation, expenses, disbursements and advances of the Trustee,
its agents and counsel.

          If an Event of Default with respect to Notes occurs and is continuing,
the Trustee may in its discretion proceed to protect and enforce its rights and
the rights of the Holders of Notes by such appropriate judicial proceedings as
the Trustee shall deem most effectual to protect and enforce any such rights,
whether for the specific enforcement of any covenant or agreement in this
Indenture or in aid of the exercise of any power granted herein, or to enforce
any other proper remedy.

Section 6.04. TRUSTEE MAY FILE PROOFS OF CLAIM.

          In case of any judicial proceeding relative to the Co-Issuers (or any
other obligor upon the Notes), their property or their creditors, the Trustee
shall be entitled and empowered, by intervention in such proceeding or
otherwise, to take any and all actions authorized under the TIA in order to have
claims of the Holders and the Trustee allowed in any such proceeding. In
particular, the Trustee shall be authorized to collect and receive any moneys or
other property payable or deliverable on any such claims and to distribute the
same; and any custodian, receiver, assignee, trustee, liquidator, sequestrator
or other similar official in any such judicial proceeding is hereby authorized
by each Holder to make such payments to the Trustee and, in the event that the
Trustee shall consent to the making of such payments directly to the Holders, to
pay to the Trustee any amount due it for the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and counsel, and any other
amounts due the Trustee under Section 7.07.

          No provision of this Indenture shall be deemed to authorize the
Trustee to authorize or consent to or accept or adopt on behalf of any Holder
any plan of reorganization, arrangement, adjustment or composition affecting the
Notes or the rights of any Holder thereof or to authorize the Trustee to vote in
respect of the claim of any Holder in any such proceeding; provided, however,
that the Trustee may, on behalf of the Holders, vote for the election of a
trustee in bankruptcy or similar official and be a member of a creditors' or
other similar committee.


                                       35



Section 6.05. TRUSTEE MAY ENFORCE CLAIMS WITHOUT POSSESSION OF NOTES.

          All rights of action and claims under this Indenture or the Notes may
be prosecuted and enforced by the Trustee without the possession of any of the
Notes or the production thereof in any proceeding relating thereto, and any such
proceeding instituted by the Trustee shall be brought in its own name as trustee
of an express trust, and any recovery of judgment shall, after provision for the
payment of the reasonable compensation, expenses, disbursements and advances of
the Trustee, its agents and counsel, be for the ratable benefit of the Holders
of the Notes in respect of which such judgment has been recovered

Section 6.06. APPLICATION OF MONEY COLLECTED.

          Any money collected by the Trustee pursuant to this Article shall be
applied in the following order, at the date or dates fixed by the Trustee and,
in case of the distribution of such money on account of principal or any premium
or interest, upon presentation of the Notes and the notation thereon of the
payment if only partially paid and upon surrender thereof if fully paid:

          FIRST: To the payment of all amounts due the Trustee under Section
7.07; and

          SECOND: To the payment of the amounts then due and unpaid for
principal of and any premium and interest on the Notes in respect of which or
for the benefit of which such money has been collected, ratably, without
preference or priority of any kind, according to the amounts due and payable on
such Notes for principal and any premium and interest, respectively.

Section 6.07. LIMITATION ON SUITS.

          No Holder of any Note shall have any right to institute any
proceeding, judicial or otherwise, with respect to this Indenture, or for the
appointment of a receiver or trustee, or for any other remedy hereunder, unless:

          (a) such Holder has previously given written notice to the Trustee of
a continuing Event of Default with respect to the Notes;

          (b) the Holders of not less than 25% in principal amount of the
outstanding Notes shall have made written request to the Trustee to institute
proceedings in respect of such Event of Default in its own name as Trustee
hereunder;

          (c) such Holder or Holders have offered to the Trustee reasonable
indemnity against the costs, expenses and liabilities to be incurred in
compliance with such request;

          (d) the Trustee for 60 days after its receipt of such notice, request
and offer of indemnity has failed to institute any such proceeding; and

          (e) no direction inconsistent with such written request has been given
to the Trustee during such 60-day period by the Holders of a majority in
principal amount of the outstanding Notes;

          it being understood and intended that no one or more of such Holders
shall have any right in any manner whatever by virtue of, or by availing of, any
provision of this Indenture to affect, disturb or prejudice the rights of any
other of such Holders, or to obtain or to seek to obtain priority or preference
over any other of such Holders or to enforce any right under this Indenture,
except in the manner herein provided and for the equal and ratable benefit of
all of such Holders.

Section 6.08. UNCONDITIONAL RIGHT OF HOLDERS TO RECEIVE PRINCIPAL, PREMIUM AND
INTEREST.

          Notwithstanding any other provision in this Indenture, the Holder of
any Note shall have the right, which is absolute and unconditional, to receive
payment of the principal of and any premium and (subject to Section 4.01)
interest on such Note on the Stated Maturity expressed in such Note (or, in the
case of redemption, on the


                                       36



redemption date) and to institute suit for the enforcement of any such payment,
and such rights shall not be impaired without the consent of such Holder.

Section 6.09. RESTORATION OF RIGHTS AND REMEDIES.

          If the Trustee or any Holder has instituted any proceeding to enforce
any right or remedy under this Indenture and such proceeding has been
discontinued or abandoned for any reason, or has been determined adversely to
the Trustee or to such Holder, then and in every such case, subject to any
determination in such proceeding, the Co-Issuers, the Trustee and the Holders
shall be restored severally and respectively to their former positions hereunder
and thereafter all rights and remedies of the Trustee and the Holders shall
continue as though no such proceeding had been instituted.

Section 6.10. RIGHTS AND REMEDIES CUMULATIVE.

          No right or remedy herein conferred upon or reserved to the Trustee or
to the Holders is intended to be exclusive of any other right or remedy, and
every right and remedy shall, to the extent permitted by law, be cumulative and
in addition to every other right and remedy given hereunder or now or hereafter
existing at law or in equity or otherwise. The assertion or employment of any
right or remedy hereunder, or otherwise, shall not prevent the concurrent
assertion or employment of any other appropriate right or remedy.

Section 6.11. DELAY OR OMISSION NOT WAIVER.

          No delay or omission of the Trustee or of any Holder of any Notes to
exercise any right or remedy accruing upon any Event of Default shall impair any
such right or remedy or constitute a waiver of any such Event of Default or an
acquiescence therein. Every right and remedy given by this Article or by law to
the Trustee or to the Holders may be exercised from time to time, and as often
as may be deemed expedient, by the Trustee or by the Holders, as the case may
be.

Section 6.12. CONTROL BY HOLDERS.

          The Holders of a majority in principal amount of the outstanding Notes
shall have the right to direct the time, method and place of conducting any
proceeding for any remedy available to the Trustee, or exercising any trust or
power conferred on the Trustee, with respect to the Notes of such series,
provided that:

          (a) such direction shall not be in conflict with any rule of law or
with this Indenture, and

          (b) the Trustee may take any other action deemed proper by the Trustee
which is not inconsistent with such direction.

          Upon receipt by the Trustee of any such direction with respect to
Notes, a record date shall automatically and without any other action by any
Person be set for determining the Holders of outstanding Notes entitled to join
in such direction, which record date shall be the close of business on the day
the Trustee receives such direction. The Holders of outstanding Notes on such
record date (or their duly appointed agents), and only such Persons, shall be
entitled to join in such direction, whether or not such Holders remain Holders
after such record date; provided that, unless such direction shall have become
effective by virtue of Holders of the requisite principal amount of outstanding
Notes on such record date (or their duly appointed agents) having joined therein
on or prior to the 90th day after such record date, such direction shall
automatically and without any action by any Person be cancelled and of no
further effect. Nothing in this paragraph shall prevent Holder (or a duly
appointed agent thereof) from giving, before or after the expiration of such
90-day period, a direction contrary to or different from, or, after the
expiration of such period, identical to, a direction that has been cancelled
pursuant to the proviso to the preceding sentence, in which event a new record
date in respect thereof shall be set pursuant to this paragraph.


                                       37



Section 6.13. WAIVER OF PAST DEFAULTS.

          The Holders of not less than a majority in principal amount of the
outstanding Notes may on behalf of the Holders of all the Notes of such series
waive any past default hereunder with respect to such series and its
consequences, except a default:

          (a) in the payment of the principal of or any premium or interest on
any Note, or

          (b) in respect of a covenant or provision hereof which under Article 9
cannot be modified or amended without the consent of the Holder of each
outstanding Note affected.

          Upon any such waiver, such default shall cease to exist, and any Event
of Default arising therefrom shall be deemed to have been cured, for every
purpose of this Indenture; but no such waiver shall extend to any subsequent or
other default or impair any right consequent thereon.

Section 6.14. UNDERTAKING FOR COSTS.

          In any suit for the enforcement of any right or remedy under this
Indenture, or in any suit against the Trustee for any action taken, suffered or
omitted by it as Trustee, a court may require any party litigant in such suit to
file an undertaking to pay the costs of such suit, and may assess costs against
any such party litigant, in the manner and to the extent provided in the TIA;
provided that neither this Section nor the TIA shall be deemed to authorize any
court to require such an undertaking or to make such an assessment in any suit
instituted by the Co-Issuers.

Section 6.15. WAIVER OF USURY, STAY OR EXTENSION LAWS.

          The Co-Issuers covenant (to the extent that they may lawfully do so)
that they will not at any time insist upon, or plead, or in any manner
whatsoever claim or take the benefit or advantage of, any usury, stay or
extension law wherever enacted, now or at any time hereafter in force, which may
affect the covenants or the performance of this Indenture; and the Co-Issuers
(to the extent that they may lawfully do so) hereby expressly waive all benefit
or advantage of any such law and covenant that they will not hinder, delay or
impede the execution of any power herein granted to the Trustee, but will suffer
and permit the execution of every such power as though no such law had been
enacted.

                                   ARTICLE 7.

                                     TRUSTEE

Section 7.01. DUTIES OF TRUSTEE

          (a) If an Event of Default has occurred and is continuing, the Trustee
shall exercise such of the rights and powers vested in it by this Indenture, and
use the same degree of care and skill in its exercise, as a prudent Person would
exercise or use under the circumstances in the conduct of such Person's own
affairs.

          (b) Except during the continuance of an Event of Default:

               (1) the duties of the Trustee shall be determined solely by the
          express provisions of this Indenture and the Trustee need perform only
          those duties that are specifically set forth in this Indenture and no
          others, and no implied covenants or obligations shall be read into
          this Indenture against the Trustee; and

               (2) in the absence of bad faith on its part, the Trustee may
          conclusively rely, as to the truth of the statements and the
          correctness of the opinions expressed therein, upon certificates or
          opinions furnished to the Trustee and conforming to the requirements
          of this Indenture. However, the Trustee shall examine the certificates
          and opinions to


                                       38



          determine whether or not they conform to the requirements of this
          Indenture (but need not confirm or investigate the accuracy of
          mathematical calculations or other facts stated therein).

          (c) The Trustee may not be relieved from liabilities for its own
negligent action, its own negligent failure to act, or its own willful
misconduct, except that:

               (1) this paragraph does not limit the effect of paragraph (b) of
          this Section;

               (2) the Trustee shall not be liable for any error of judgment
          made in good faith by a Responsible Officer, unless it is proved that
          the Trustee was negligent in ascertaining the pertinent facts; and

               (3) the Trustee shall not be liable with respect to any action it
          takes or omits to take in good faith in accordance with a direction
          received by it pursuant to Section 6.12 hereof.

          (d) Whether or not therein expressly so provided, every provision of
this Indenture that in any way relates to the Trustee is subject to paragraphs
(a), (b) and (c) of this Section 7.01.

          (e) No provision of this Indenture shall require the Trustee to expend
or risk its own funds or incur any liability. The Trustee shall be under no
obligation to exercise any of its rights and powers under this Indenture at the
request of any Holders, unless such Holder shall have offered to the Trustee
security and indemnity satisfactory to it against any loss, liability or
expense.

          (f) The Trustee shall not be liable for interest on any money received
by it except as the Trustee may agree in writing with the Co-Issuers. Money held
in trust by the Trustee need not be segregated from other funds except to the
extent required by law.

Section 7.02. RIGHTS OF TRUSTEE.

          Subject to TIA Section 315:

          (a) The Trustee may conclusively rely upon any document believed by it
to be genuine and to have been signed or presented by the proper Person. The
Trustee need not investigate any fact or matter stated in any such document.

          (b) Before the Trustee acts or refrains from acting, it may require an
Officer's Certificate or an Opinion of Counsel or both. The Trustee shall not be
liable for any action it takes or omits to take in good faith in reliance on
such Officer's Certificate or Opinion of Counsel. The Trustee may consult with
counsel and the written advice of such counsel or any Opinion of Counsel shall
be full and complete authorization and protection from liability in respect of
any action taken, suffered or omitted by it hereunder in good faith and in
reliance thereon.

          (c) The Trustee shall not be liable for any action it takes or omits
to take in good faith that it believes to be authorized or within the rights or
powers conferred upon it by this Indenture.

          (d) Unless otherwise specifically provided in this Indenture, any
demand, request, direction or notice from the Co-Issuers shall be sufficient if
signed by an Officer of each of the Co-Issuers.

          (e) The Trustee shall not be deemed to have notice of any Default or
Event of Default unless a Responsible Officer of the Trustee has actual
knowledge thereof or unless written notice of any event which is in fact such a
Default or Event of Default is received by a Responsible Officer of the Trustee
at the Corporate Trust Office of the Trustee from the Co-Issuers or the Holders
of 25% in aggregate principal amount of the outstanding Notes, and such notice
references the specific Default or Event of Default, the Notes and this
Indenture.


                                       39



          (f) The Trustee shall not be required to give any bond or surety in
respect of the performance of its power and duties hereunder.

          (g) The Trustee shall have no duty to inquire as to the performance of
the Co-Issuers' covenants herein.

          (h) The Trustee may execute any of the trusts or powers hereunder or
perform any duties hereunder either directly or by or through agents or
attorneys and the Trustee shall not be responsible for any misconduct or
negligence on the part of any agent or attorney appointed with due care by it
hereunder.

Section 7.03. INDIVIDUAL RIGHTS OF TRUSTEE.

          The Trustee in its individual or any other capacity may become the
owner or pledgee of Notes and may otherwise deal with the Co-Issuers or any
Affiliate of the Co-Issuers with the same rights it would have if it were not
Trustee. However, in the event that the Trustee acquires any conflicting
interest it must eliminate such conflict within 90 days, apply to the Commission
for permission to continue as Trustee or resign. Any Agent may do the same with
like rights and duties. The Trustee shall also be subject to Sections 7.10 and
7.11 hereof.

Section 7.04. TRUSTEE'S DISCLAIMER.

          The Trustee shall not be responsible for and makes no representation
as to the validity or adequacy of this Indenture or the Notes, it shall not be
accountable for the Co-Issuers' use of the proceeds from the Notes or any money
paid to the Co-Issuers or upon the Co-Issuers' direction under any provision of
this Indenture, it shall not be responsible for the use or application of any
money received by any Paying Agent other than the Trustee, and it shall not be
responsible for any statement or recital herein or any statement in the Notes or
any other document in connection with the sale of the Notes or pursuant to this
Indenture other than its certificate of authentication.

Section 7.05. NOTICE OF DEFAULTS.

          If a Default or Event of Default occurs and is continuing and if it is
known to the Trustee, the Trustee shall mail to Holders a notice of the Default
or Event of Default within 90 days after it occurs. Except in the case of a
Default or Event of Default in payment of principal of, premium, if any, or
interest on any Note, the Trustee may withhold the notice if and so long as a
committee of its Responsible Officers in good faith determines that withholding
the notice is in the interests of the Holders.

Section 7.06. REPORTS BY TRUSTEE TO HOLDERS.

          Within 60 days after each May 15 beginning with May 15, 2007, and for
so long as Notes remain outstanding, the Trustee shall mail to the Holders a
brief report dated as of such reporting date that complies with TIA Section
313(a) (but if no event described in TIA Section 313(a) has occurred within the
twelve months preceding the reporting date, no report need be transmitted). The
Trustee also shall comply with TIA Section 313(b)(2). The Trustee shall also
transmit by mail all reports as required by TIA Section 313(c).

          A copy of each report at the time of its mailing to the Holders shall
be mailed to the Co-Issuers and filed with the Commission and each stock
exchange on which the Notes are listed in accordance with TIA Section 313(d).
The Co-Issuers shall promptly notify the Trustee when the Notes are listed on
any stock exchange and any delisting thereof.

Section 7.07. COMPENSATION AND INDEMNITY.

          The Co-Issuers shall pay to the Trustee from time to time reasonable
compensation for its acceptance of this Indenture and services hereunder. The
Trustee's compensation shall not be limited by any law on compensation of a
trustee of an express trust. The Co-Issuers shall reimburse the Trustee promptly
upon request for all reasonable disbursements, advances and expenses incurred or
made by it in addition to the compensation for its


                                       40



services. Such expenses shall include the reasonable compensation, disbursements
and expenses of the Trustee's agents and counsel.

          The Co-Issuers shall indemnify the Trustee (in its capacity as
Trustee) or any predecessor Trustee (in its capacity as Trustee) against any and
all losses, claims, damages, penalties, fines, liabilities or expenses,
including incidental and out-of-pocket expenses and reasonable attorneys fees
(for purposes of this Article, "LOSSES") incurred by it arising out of or in
connection with the acceptance or administration of its duties under this
Indenture, including the costs and expenses of enforcing this Indenture against
the Co-Issuers (including this Section 7.07) and defending itself against any
claim (whether asserted by the Co-Issuers or any Holder or any other Person) or
liability in connection with the exercise or performance of any of its powers or
duties hereunder, except to the extent such losses may be attributable to its
negligence or bad faith. The Trustee shall notify the Co-Issuers promptly of any
claim for which it may seek indemnity. Failure by the Trustee to so notify the
Co-Issuers shall not relieve the Co-Issuers of their obligations under this
Section 7.07, except to the extent the Co-Issuers have been prejudiced thereby.
The Co-Issuers shall defend the claim, and the Trustee shall cooperate in the
defense. The Trustee may have separate counsel if the Trustee has been
reasonably advised by counsel that there may be one or more legal defenses
available to it that are different from or additional to those available to the
Co-Issuers and in the reasonable judgment of such counsel it is advisable for
the Trustee to engage separate counsel, and the Co-Issuers shall pay the
reasonable fees and expenses of such counsel. The Co-Issuers need not pay for
any settlement made without its consent, which consent shall not be unreasonably
withheld. The Co-Issuers need not reimburse any expense or indemnify against any
loss incurred by the Trustee through the Trustee's own willful misconduct, gross
negligence or bad faith.

          The obligations of the Co-Issuers under this Section 7.07 shall
survive the satisfaction and discharge of this Indenture, the resignation or
removal of the Trustee and payment in full of the Notes through the expiration
of the applicable statute of limitations.

          To secure the Co-Issuers' payment obligations in this Section, the
Trustee shall have a Lien prior to the Notes on all money or property held or
collected by the Trustee, except that held in trust to pay principal, premium,
if any, and interest on particular Notes. Such Lien shall survive the
satisfaction and discharge of this Indenture.

          When the Trustee incurs expenses or renders services after an Event of
Default specified in Section 6.01(e) or (f) hereof occurs, the expenses and the
compensation for the services (including the fees and expenses of its agents and
counsel) are intended to constitute expenses of administration under any
Bankruptcy Law.

Section 7.08. REPLACEMENT OF TRUSTEE.

          A resignation or removal of the Trustee and appointment of a successor
Trustee shall become effective only upon the successor Trustee's acceptance of
appointment as provided in this Section 7.08.

          The Trustee may resign in writing at any time upon 30 days' prior
notice to the Co-Issuers and be discharged from the trust hereby created by so
notifying the Co-Issuers. The Holders of a majority in aggregate principal
amount of the then outstanding Notes may remove the Trustee by so notifying the
Trustee and the Co-Issuers in writing. The Co-Issuers may remove the Trustee if:

          (a) the Trustee fails to comply with Section 7.10 hereof;

          (b) the Trustee is adjudged bankrupt or insolvent or an order for
relief is entered with respect to the Trustee under any Bankruptcy Law;

          (c) a custodian or public officer takes charge of the Trustee or its
property; or

          (d) the Trustee becomes incapable of acting.


                                       41



          If the Trustee resigns or is removed or if a vacancy exists in the
office of Trustee for any reason (the Trustee in such event being referred to
herein as the retiring Trustee), the Co-Issuers shall promptly appoint a
successor Trustee. Within one year after the successor Trustee takes office, the
Holders of a majority in principal amount of the then outstanding Notes may
appoint a successor Trustee to replace the successor Trustee appointed by the
Co-Issuers.

          If a successor Trustee does not take office within 30 days after the
retiring Trustee resigns or is removed, the retiring Trustee, the Co-Issuers, or
the Holders of at least 10% in aggregate principal amount of the then
outstanding Notes may petition any court of competent jurisdiction for the
appointment of a successor Trustee.

          If the Trustee, after written request by any Holder who has been a
Holder for at least six months, fails to comply with Section 7.10 hereof, such
Holder may petition any court of competent jurisdiction for the removal of the
Trustee and the appointment of a successor Trustee.

          A successor Trustee shall deliver a written acceptance of its
appointment to the retiring Trustee and to the Co-Issuers. Thereupon, the
resignation or removal of the retiring Trustee shall become effective, and the
successor Trustee shall have all the rights, powers and duties of the Trustee
under this Indenture. The successor Trustee shall mail a notice of its
succession to Holders. Subject to the Lien provided for in Section 7.07 hereof,
the retiring Trustee shall promptly transfer all property held by it as Trustee
to the successor Trustee; provided, however, that all sums owing to the Trustee
hereunder shall have been paid. Notwithstanding replacement of the Trustee
pursuant to this Section 7.08, the Co-Issuers' obligations under Section 7.07
hereof shall continue for the benefit of the retiring Trustee.

          In the case of an appointment hereunder of a separate or successor
Trustee with respect to the Notes, the Co-Issuers, any retiring Trustee and each
successor or separate Trustee with respect to the Notes shall execute and
deliver an Indenture supplemental hereto (1) which shall contain such provisions
as shall be deemed necessary or desirable to confirm that all the rights,
powers, trusts and duties of any retiring Trustee with respect to the Notes as
to which any such retiring Trustee is not retiring shall continue to be vested
in such retiring Trustee and (2) that shall add to or change any of the
provisions of this Indenture as shall be necessary to provide for or facilitate
the administration of the trusts hereunder by more than one Trustee, it being
understood that nothing herein or in such supplemental indenture shall
constitute such Trustee co-trustees of the same trust and that each such
separate, retiring or successor Trustee shall be Trustee of a trust or trusts
hereunder separate and apart from any trust or trusts hereunder administered by
any such other Trustee.

Section 7.09. SUCCESSOR TRUSTEE BY MERGER, ETC.

          If the Trustee consolidates, merges or converts into, or transfers all
or substantially all of its corporate trust business to, another corporation or
banking association, the successor corporation or banking association without
any further act shall, if such successor corporation or banking association is
otherwise eligible hereunder, be the successor Trustee.

Section 7.10. ELIGIBILITY; DISQUALIFICATION.

          There shall at all times be a Trustee hereunder that is a Person
organized and doing business under the laws of the United States of America or
of any state thereof that is authorized under such laws to exercise corporate
trustee power, that is subject to supervision or examination by federal or state
authorities and that has a combined capital and surplus of at least $50.0
million (or a wholly-owned subsidiary of a bank or trust company, or of a bank
holding company, the principal subsidiary of which is a bank or trust company
having a combined capital and surplus of at least $50.0 million) as set forth in
its most recent published annual report of condition.

          This Indenture shall always have a Trustee who satisfies the
requirements of TIA Section 310(a)(1), (2) and (5). The Trustee is subject to
TIA Section 310(b).


                                       42



Section 7.11. PREFERENTIAL COLLECTION OF CLAIMS AGAINST CO-ISSUERS.

          The Trustee is subject to TIA Section 311(a), excluding any creditor
relationship listed in TIA Section 311 (b). A Trustee who has resigned or been
removed shall be subject to TIA Section 311 (a) to the extent indicated therein.

                                   ARTICLE 8.

                    LEGAL DEFEASANCE AND COVENANT DEFEASANCE

Section 8.01. OPTION TO EFFECT LEGAL DEFEASANCE OR COVENANT DEFEASANCE.

          The Co-Issuers may, at their option and at any time, elect to have
either Section 8.02 or 8.03 hereof be applied to all outstanding Notes upon
compliance with the conditions set forth in this Article 8.

Section 8.02. LEGAL DEFEASANCE AND DISCHARGE.

          Upon the Co-Issuers' exercise under Section 8.01 of the option
applicable to this Section 8.02, the Co-Issuers shall, subject to the
satisfaction of the conditions set forth in Section 8.04, be deemed to have been
discharged from their obligations with respect to all outstanding Notes on the
date the conditions set forth below are satisfied (hereinafter, "LEGAL
DEFEASANCE"). For this purpose, Legal Defeasance means that the Co-Issuers shall
be deemed to have paid and discharged the entire Debt represented by the
outstanding Notes, which shall thereafter be deemed to be "outstanding" only for
the purposes of Section 8.05 and the other Sections of this Indenture referred
to in (a) and (b) below, and to have satisfied all its other obligations under
the Notes and this Indenture (and the Trustee, on demand of and at the expense
of the Co-Issuers, shall execute proper instruments acknowledging the same),
except for the following provisions which shall survive until otherwise
terminated or discharged hereunder: (a) the rights of Holders of outstanding
Notes to receive solely from the trust fund described in Section 8.04, and as
more fully set forth in such Section, payments in respect of the principal of,
premium, if any, or interest on such Notes when such payments are due, (b) the
Co-Issuers' obligations with respect to such Notes under Article 2 and Sections
4.01 and 4.02, (c) the rights, powers, trusts, duties and immunities of the
Trustee hereunder and the Co-Issuers' obligations in connection therewith and
(d) this Article 8. If the Co-Issuers exercise under Section 8.01 the option
applicable to this Section 8.02, subject to the satisfaction of the conditions
set forth in Section 8.04, payment of the Notes may not be accelerated because
of an Event of Default. Subject to compliance with this Article 8, the
Co-Issuers may exercise its option under this Section 8.02 notwithstanding the
prior exercise of its option under Section 8.03.

Section 8.03. COVENANT DEFEASANCE.

          Upon the Co-Issuers' exercise under Section 8.01 of the option
applicable to this Section 8.03, the Co-Issuers shall, subject to the
satisfaction of the conditions set forth in Section 8.04, be released from their
obligations under the covenants contained in Sections 4.03, 4.05, 4.06, 4.07,
4.08, 4.09, 4.10 and 5.01 hereof and the occurrence of any event specified in
clause (c) (with respect to Sections 4.03, 4.05, 4.06, 4.07, 4.08, 4.09, 4.10
and 5.01 hereof) or (d) of Section 6.01 shall be deemed not to be or result in
an Event of Default, in each case with respect to the outstanding Notes on and
after the date the conditions set forth in Section 8.04 are satisfied
(hereinafter, "COVENANT DEFEASANCE ") and the Notes shall thereafter be deemed
not "outstanding" for the purposes of any direction, waiver, consent or
declaration or act of Holders (and the consequences of any thereof) in
connection with such covenants, but shall continue to be deemed "outstanding"
for all other purposes hereunder (it being understood that such Notes shall not
be deemed outstanding for accounting purposes). For this purpose, Covenant
Defeasance means that, with respect to the outstanding Notes, the Co-Issuers may
omit to comply with and shall have no liability in respect of any term,
condition or limitation set forth in any such covenant, whether directly or
indirectly, by reason of any reference elsewhere herein to any such covenant or
by reason of any reference in any such covenant to any other provision herein or
in any other document and such omission to comply shall not constitute a Default
or an Event of Default under Section 6.01, but, except as specified above, the
remainder of this Indenture and such Notes shall be unaffected thereby.


                                       43



Section 8.04. CONDITIONS TO LEGAL OR COVENANT DEFEASANCE.

          The following shall be the conditions to the application of either
Section 8.02 or 8.03 to the outstanding Notes.

          The Legal Defeasance or Covenant Defeasance may be exercised only if:

          (a) the Co-Issuers irrevocably deposit with the Trustee, in trust (the
"DEFEASANCE TRUST"), for the benefit of the Holders, cash in U.S. dollars,
non-callable U.S. Government Securities, or a combination of cash in U.S.
dollars and non-callable U.S. Government Securities, in an amount sufficient, in
the opinion of a nationally recognized firm of independent public accountants,
to pay the principal, premium, if any, and interest on the outstanding Notes on
the Stated Maturity or on the next redemption date, as the case may be, and the
Company shall specify whether the Notes are being defeased to maturity or to
such particular redemption date;

          (b) in the case of Legal Defeasance, the Co-Issuers shall deliver to
the Trustee an Opinion of Counsel reasonably acceptable to the Trustee
confirming that (i) the Company has received from, or there has been published
by, the Internal Revenue Service a ruling or (ii) subsequent to the Issue Date,
there has been a change in the applicable federal income tax law, in either case
to the effect that, and based thereon such Opinion of Counsel shall confirm
that, the Holders of the outstanding Notes will not recognize income, gain or
loss for federal income tax purposes as a result of such Legal Defeasance and
will be subject to federal income tax on the same amounts, in the same manner
and at the same times as would have been the case if such Legal Defeasance had
not occurred;

          (c) in the case of Covenant Defeasance, the Co-Issuers shall deliver
to the Trustee an Opinion of Counsel reasonably acceptable to the Trustee
confirming that the Holders of the outstanding Notes will not recognize income,
gain or loss for federal income tax purposes as a result of such Covenant
Defeasance and will be subject to federal income tax on the same amounts, in the
same manner and at the same times as would have been the case if such Covenant
Defeasance had not occurred;

          (d) no Event of Default under Section 6.01(e) or (f) shall have
occurred at any time in the period ending on the 91st day after the cash and/or
non-callable U.S. Government Securities have been deposited in the defeasance
trust;

          (e) such Legal Defeasance or Covenant Defeasance shall not result in a
breach or violation of, or constitute a default under, any material agreement or
instrument (other than this Indenture) to which the Co-Issuers or any Restricted
Subsidiary is a party or by which the Co-Issuers or any Restricted Subsidiary is
bound;

          (f) the Co-Issuers shall deliver to the Trustee an Officer's
Certificate stating that the deposit was not made by the Company with the intent
of preferring the Holders over other creditors of the Company with the intent of
defeating, hindering, delaying or defrauding such other creditors; and

          (g) the Co-Issuers deliver to the Trustee an Officer's Certificate and
an Opinion of Counsel, each stating that all conditions precedent relating to
the Legal Defeasance or the Covenant Defeasance have been complied with.

Section 8.05. DEPOSITED CASH AND U.S. GOVERNMENT SECURITIES TO BE HELD
IN TRUST: OTHER MISCELLANEOUS PROVISIONS.

          Subject to Section 8.06, all cash and non-callable U.S. Government
Securities (including the proceeds thereof) deposited with the Trustee (or other
qualifying trustee, collectively for purposes of this Section 8.05, the
"Trustee") pursuant to Section 8.04 in respect of the outstanding Notes shall be
held in trust and applied by the Trustee, in accordance with the provisions of
such Notes and this Indenture, to the payment, either directly or through any
Paying Agent (including the Company acting as Paying Agent) as the Trustee may
determine, to the Holders of all sums due and to become due thereon in respect
of principal, premium, if any, and interest but such cash and securities need
not be segregated from other funds except to the extent required by law.


                                       44


          The Co-Issuers shall pay and indemnify the Trustee against any tax,
fee or other charge imposed on or assessed against the cash or non-callable U.S.
Government Securities deposited pursuant to Section 8.04 hereof or the principal
and interest received in respect thereof other than any such tax, fee or other
charge which by law is for the account of the Holders of the outstanding Notes.

          Anything in this Article 8 to the contrary notwithstanding, the
Trustee shall deliver or pay to the Co-Issuers from time to time upon the
request of the Co-Issuers any cash or non-callable U.S. Government Securities
held by it as provided in Section 8.04 which, in the opinion of a nationally
recognized firm of independent certified public accountants expressed in a
written certification thereof delivered to the Trustee (which may be the
certification delivered under Section 8.04(a)), are in excess of the amount
thereof that would then be required to be deposited to effect an equivalent
Legal Defeasance or Covenant Defeasance.

Section 8.06. REPAYMENT TO THE CO-ISSUERS.

          The Trustee shall promptly, and in any event, no later than five (5)
Business Days, pay to the Company after request therefor, any excess money held
with respect to the Notes at such time in excess of amounts required to pay any
of the Co-Issuers' Obligations then owing with respect to the Notes.

          Any cash or non-callable U.S. Government Securities deposited with the
Trustee or any Paying Agent, or then held by the Co-Issuers, in trust for the
payment of the principal, premium, if any, or interest on any Note and remaining
unclaimed for one year after such principal, premium, if any, or interest has
become due and payable shall be paid to the Co-Issuers on their request or (if
then held by the Co-Issuers) shall be discharged from such trust; and the Holder
shall thereafter, as an unsecured creditor, look only to the Co-Issuers for
payment thereof, and all liability of the Trustee or such Paying Agent with
respect to such cash and securities, and all liability of the Co-Issuers as
trustee thereof, shall thereupon cease; provided, however, that the Trustee or
such Paying Agent, before being required to make any such repayment, may at the
expense of the Co-Issuers cause to be published once, in The New York Times and
The Wall Street Journal (national edition), notice that such cash and securities
remains unclaimed and that, after a date specified therein, which shall not be
less than 30 days from the date of such notification or publication, any
unclaimed balance of such cash and securities then remaining shall be repaid to
the Co-Issuers.

Section 8.07. REINSTATEMENT.

          If the Trustee or Paying Agent is unable to apply any cash or
non-callable U.S. Government Securities in accordance with Section 8.02 or 8.03,
as the case may be, by reason of any order or judgment of any court or
governmental authority enjoining, restraining or otherwise prohibiting such
application, then the Co-Issuers' obligations under this Indenture and the Notes
shall be revived and reinstated as though no deposit had occurred pursuant to
Section 8.02 or 8.03 until such time as the Trustee or Paying Agent is permitted
to apply all such cash and securities in accordance with Section 8.02 or 8.03,
as the case may be; provided, however, that, if the Co-Issuers make any payment
of principal of, premium, if any, or interest on any Note following the
reinstatement of its obligations, the Company shall be subrogated to the rights
of the Holders to receive such payment from the cash and securities held by the
Trustee or Paying Agent.

                                   ARTICLE 9.

                        AMENDMENT, SUPPLEMENT AND WAIVER

Section 9.01. WITHOUT CONSENT OF HOLDERS OF NOTES.

          Notwithstanding Section 9.02 of this Indenture, the Co-Issuers and the
Trustee may amend or supplement this Indenture or the Notes without the consent
of any Holder to:

          (a) cure any ambiguity, manifest error, omission, defect or
inconsistency;


                                       45



          (b) provide for the assumption by a surviving Person of the
obligations of the Co-Issuers under this Indenture;

          (c) provide for uncertificated Notes in addition to or in place of
certificated Notes {provided that the uncertificated Notes are issued in
registered form for purposes of Section 163(f) of the Code, or in a manner such
that the uncertificated Notes are described in Section 163(f)(2)(B) of the
Code);

          (d) add guarantees with respect to the Notes;

          (e) secure the Notes; or

          (f) add to the covenants of the Co-Issuers for the benefit of the
Holders or to surrender any right or power conferred upon the Co-Issuers.

Section 9.02. WITH CONSENT OF HOLDERS OF NOTES.

          Except as provided below in this Section 9.02, the Co-Issuers and the
Trustee may amend or supplement this Indenture and the Notes with the consent of
the Holders of at least a majority in aggregate principal amount of the Notes,
including Additional Notes, if any, then outstanding voting as a single class
(including consents obtained in connection with a purchase of or tender offer or
exchange offer for the Notes), and, subject to Sections 6.08 and 6.13, any
existing Default or Event of Default (except a continuing Default or Event of
Default in (i) the payment of principal, premium, if any, or interest on the
Notes and (ii) in respect of a covenant or provision which under this Indenture
cannot be modified or amended without the consent of the Holder of each Note
affected by such modification or amendment) or compliance with any provision of
this Indenture or the Notes may be waived with the consent of the Holders of at
least a majority in aggregate principal amount of the Notes, including
Additional Notes, if any, then outstanding voting as a single class (including
consents obtained in connection with a purchase of or tender offer or exchange
offer for the Notes).

          Without the consent of each Holder, an amendment or waiver under this
Section 9.02 may not (with respect to any Notes held by a non-consenting
Holder):

          (a) change the stated maturity of the principal of, or any installment
of principal of or interest on the Notes;

          (b) reduce the amount of, or any premium or interest on, the Notes;

          (c) change the place or currency of payment of principal of, or any
premium or interest on, the Notes;

          (d) impair the right to institute suit for the enforcement of any
payment on or with respect to the Notes;

          (e) reduce the percentage in principal amount of Notes, the consent of
whose Holders is required for modification or amendment of this Indenture;

          (f) reduce the percentage in principal amount of Notes necessary for
waiver of certain defaults; or

          (g) modify such provisions with respect to modification and waiver.

          The Holders of a majority in principal amount of Notes may on behalf
of the Holders of all Notes waive any past default under this Indenture, except
a default in the payment of the principal of or premium, if any, or interest on
the Notes or in respect of a provision which under this Indenture cannot be
modified or amended without the consent of each Holder affected.


                                       46



          The Co-Issuers may, but shall not be obligated to, fix a record date
for the purpose of determining the Persons entitled to consent to any
supplemental indenture. If a record date is fixed, the Holders on such record
date, or their duly designated proxies, and only such Persons, shall be entitled
to consent to such supplemental indenture, whether or not such Holders remain
Holders after such record date; provided that unless such consent shall have
become effective by virtue of the requisite percentage having been obtained
prior to the date which is 120 days after such record date, any such consent
previously given shall automatically and without further action by any Holder be
cancelled and of no further effect.

          It shall not be necessary for the consent of the Holders under this
Section 9.02 to approve the particular form of any proposed amendment or waiver,
but it shall be sufficient if such consent approves the substance thereof.

          After an amendment, supplement or waiver under this Section 9.02
becomes effective, the Company shall mail to the Holder of each Note affected
thereby to such Holder's address appearing in the Security Register a notice
briefly describing the amendment, supplement or waiver. Any failure of the
Co-Issuers to mail such notice, or any defect therein, shall not, however, in
any way impair or affect the validity of any such amended or supplemental
indenture or waiver.

Section 9.03. REVOCATION AND EFFECT OF CONSENTS.

          Until an amendment, supplement or waiver becomes effective, a consent
to it by a Holder is a continuing consent by the Holder of a Note and every
subsequent Holder of a Note or portion thereof that evidences the same debt as
the consenting Holder's Note, even if notation of the consent is not made on any
Note. However, any such Holder or subsequent Holder may revoke the consent as to
its Note or portion thereof if the Trustee receives written notice of revocation
before the Trustee receives an Officer's Certificate certifying that the Holders
of the requisite principal amount of Notes have consented (and theretofore not
revoked such consent) to the amendment, supplement or waiver.

Section 9.04. NOTATION ON OR EXCHANGE OF NOTES.

          The Trustee may place an appropriate notation about an amendment,
supplement or waiver on any Note thereafter authenticated. The Co-Issuers in
exchange for all Notes may issue and, upon receipt of an Authentication Order in
accordance with Section 2.02 hereof, the Trustee shall authenticate new Notes
that reflect the amendment, supplement or waiver.

          Failure to make the appropriate notation or issue a new Note shall not
affect the validity and effect of such amendment, supplement or waiver.

Section 9.05. TRUSTEE TO SIGN AMENDMENTS, ETC.

          The Trustee shall sign any amended or supplemental indenture
authorized pursuant to this Article 9 if the amendment or supplement does not
adversely affect the rights, duties, liabilities or immunities of the Trustee.
The Co-Issuers may not sign an amendment or supplemental indenture until its
board of directors (or committee serving a similar function) approves it. In
executing any amended or supplemental indenture, the Trustee shall be entitled
to receive and (subject to Section 7.01 hereof) shall be fully protected in
relying upon an Officer's Certificate and an Opinion of Counsel stating that the
execution of such amended or supplemental indenture is authorized or permitted
by this Indenture and that such amended or supplemental indenture is the legal,
valid and binding obligations of the Co-Issuers enforceable against them in
accordance with its terms, subject to customary exceptions and that such amended
or supplemental indenture complies with the provisions hereof.

                                   ARTICLE 10.

                           SATISFACTION AND DISCHARGE


                                       47



Section 10.01. SATISFACTION AND DISCHARGE.

          This Indenture shall upon the Co-Issuers' request cease to be of
further effect (except as to any surviving rights of transfer or exchange of
Notes herein expressly provided for), and the Trustee, at the expense of the
Co-Issuers, shall execute proper instruments acknowledging satisfaction and
discharge of this Indenture, when:

          (a) either

               (1) all Notes theretofore authenticated and delivered (other than
          (i) Notes which have been destroyed, lost or stolen and which have
          been replaced or paid as provided in Section 2.07 and (ii) Notes for
          whose payment money has theretofore been deposited in trust or
          segregated and held in trust by the Co-Issuers and thereafter repaid
          to the Co-Issuers or discharged from such trust, as provided in
          Section 2.04) have been delivered to the Trustee for cancellation; or

               (2) all such Notes not theretofore delivered to the Trustee for
          cancellation

                    (A) have become due and payable, or

                    (B) will become due and payable at their Stated Maturity
          within one year, or

                    (C) are to be called for redemption within one year under
          arrangements satisfactory to the Trustee for the giving of notice of
          redemption by the Trustee in the name, and at the expense, of the
          Co-Issuers,

     and the Co-Issuers, in the case of (A), (B) or (C) above, have deposited or
     caused to be deposited with the Trustee as trust funds in trust for the
     purpose an amount sufficient to pay and discharge the entire indebtedness
     on such Notes not theretofore delivered to the Trustee for cancellation,
     for principal and any premium and interest to the date of such deposit (in
     the case of Notes which have become due and payable) or to the Stated
     Maturity or redemption date, as the case may be;

          (b) the Co-Issuers have paid or caused to be paid all other sums
payable hereunder by the Co-Issuers; and

          (c) the Co-Issuers have delivered to the Trustee an Officer's
Certificate and an Opinion of Counsel, each stating that all conditions
precedent herein provided for relating to the satisfaction and discharge of this
Indenture have been complied with.

          Notwithstanding the satisfaction and discharge of this Indenture, the
obligations of the Co-Issuers to the Trustee under Section 7.07, the obligations
of the Trustee to any authenticating agent under Section 2.02(e) and, if money
shall have been deposited with the Trustee pursuant to subclause (B) of Clause
(1) of this Section, the obligations of the Trustee under Section 10.02 and
Section 2.04 shall survive.

Section 10.02. APPLICATION OF TRUST MONEY.

          Subject to provisions of Section 2.04, all money deposited with the
Trustee pursuant to Section 10.01 shall be held in trust and applied by it, in
accordance with the provisions of the Notes and this Indenture, to the payment,
either directly or through any Paying Agent (including the Company acting as its
own Paying Agent) as the Trustee may determine, to the Persons entitled thereto,
of the principal and any premium and interest for whose payment such money has
been deposited with the Trustee.

                                   ARTICLE 11.

                                  MISCELLANEOUS


                                       48



Section 11.01. TABLE OF CONTENTS, HEADINGS, ETC.

          The Table of Contents, Cross-Reference Table and Headings in this
Indenture have been inserted for convenience of reference only, are not to be
considered a part of this Indenture and shall in no way modify or restrict any
of the terms or provisions hereof.

Section 11.02. NOTICES.

          Any notice or communication by the Co-Issuers or the Trustee to the
other is duly given if in writing and delivered in person or mailed by first
class mail (registered or certified, return receipt requested), facsimile
transmission or overnight air courier guaranteeing next-day delivery, to the
other's address:

          If to the Co-Issuers:

          The Rouse Company LP
          TRC Co-Issuer, Inc.
          110N. Wacker Drive
          Chicago, IL 60606
          Attention: Chief Financial Officer
          Telecopier No.: (312)960-5475

          With a copy to:

          Sullivan & Cromwell LLP
          125 Broad Street
          New York, NY 10004
          Attention: Robert Downes, Esq.
          Telecopier No.: (212)558-3588

          If to the Trustee:

          LaSalle Bank National Association
          135 S. LaSalle, Suite 1960
          Chicago, IL 60603
          Attention: Corporate Trust Services Department
          Telecopier No.: (312)904-2236

          The Co-Issuers or the Trustee, by notice to the other, may designate
additional or different addresses for subsequent notices or communications.

          All notices and communications (other than those sent to the Trustee
or Holders) shall be deemed to have been duly given: at the time delivered by
hand, if personally delivered; five Business Days after being deposited in the
mail, postage prepaid, if mailed; when receipt acknowledged, if sent by
facsimile transmission; and the next Business Day after timely delivery to the
courier, if sent by overnight air courier guaranteeing next-day delivery. All
notices and communications to the Trustee or Holders shall be deemed duly given
and effective only upon receipt.

          Any notice or communication to a Holder shall be mailed by first class
mail, certified or registered, return receipt requested, or by overnight air
courier guaranteeing next-day delivery to its address shown on the Security
Register. Failure to mail a notice or communication to a Holder or any defect in
it shall not affect its sufficiency with respect to other Holders.

          If a notice or communication is mailed in the manner provided above
within the time prescribed, it is duly given, whether or not the addressee
receives it.


                                       49



          If the Co-Issuers mail a notice or communication to Holders, they
shall mail a copy to the Trustee and each Agent at the same time.

Section 11.03. COMMUNICATION BY HOLDERS OF NOTES WITH OTHER HOLDERS OF NOTES.

          Holders may communicate pursuant to TIA Section 312(b) with other
Holders with respect to their rights under this Indenture or the Notes. The
Company, the Trustee, the Registrar and anyone else shall have the protection of
TIA Section 312(c).

Section 11.04. CERTIFICATE AND OPINION AS TO CONDITIONS PRECEDENT.

          Upon any request or application by the Co-Issuers to the Trustee to
take any action under any provision of this Indenture, the Co-Issuers shall
furnish to the Trustee:

          (a) an Officer's Certificate in form and substance reasonably
satisfactory to the Trustee (which shall include the statements set forth in
Section 11.05 hereof) stating that, in the opinion of the signers, all
conditions precedent and covenants, if any, provided for in this Indenture
relating to the proposed action have been complied with; and

          (b) an Opinion of Counsel in form and substance reasonably
satisfactory to the Trustee (which shall include the statements set forth in
Section 11.05 hereof) stating that, in the opinion of such counsel, all such
conditions precedent and covenants have been complied with.

Section 11.05. STATEMENTS REQUIRED IN CERTIFICATE OR OPINION.

          Each certificate or opinion with respect to compliance with a
condition or covenant provided for in this Indenture (other than a certificate
provided pursuant to TIA Section 314(a)(4)) shall comply with the provisions of
TIA Section 314(e) and shall include:

          (a) a statement that the Person making such certificate or opinion has
read such covenant or condition;

          (b) a brief statement as to the nature and scope of the examination or
investigation upon which the statements or opinions contained in such
certificate or opinion are based;

          (c) a statement that, in the opinion of such Person, he or she has
made such examination or investigation as is necessary to enable such Person to
express an informed opinion as to whether or not such covenant or condition has
been complied with; and

          (d) a statement as to whether or not, in the opinion of such Person,
such condition or covenant has been complied with.

With respect to matters of fact, an Opinion of Counsel may rely on an Officer's
Certificate, certificates of public officials or reports or opinions of experts.

Section 11.06. RULES BY TRUSTEE AND AGENTS.

          The Trustee may make reasonable rules for action by or at a meeting of
Holders. The Registrar or Paying Agent may make reasonable rules and set
reasonable requirements for its functions.

Section 11.07. NO PERSONAL LIABILITY OF DIRECTORS, OFFICERS, EMPLOYEES AND
STOCKHOLDERS.

          No past, present or future director, officer, employee, incorporator
or stockholder of the Co-Issuers, as such, shall have any liability for any
obligations of the Co-Issuers under the Notes, this Indenture or for any claim
based on, in respect of, or by reason of, such obligations or their creation.
Each Holder of Notes by


                                       50


accepting a Note waives and releases all such liability. The waiver and release
are part of the consideration for issuance of the Notes. The waiver and release
may not be effective to waive or release liabilities under the federal
securities laws.

Section 11.08. GOVERNING LAW.

          THE LAW OF THE STATE OF NEW YORK SHALL GOVERN AND BE USED TO CONSTRUE
THIS INDENTURE AND THE NOTES WITHOUT GIVING EFFECT TO APPLICABLE PRINCIPLES OF
CONFLICTS OF LAW TO THE EXTENT THAT THE APPLICATION OF THE LAWS OF ANOTHER
JURISDICTION WOULD BE REQUIRED THEREBY.

Section 11.09. NO ADVERSE INTERPRETATION OF OTHER AGREEMENTS.

          This Indenture may not be used to interpret any other indenture, loan
or debt agreement of the Company or its Subsidiaries or of any other Person. Any
such indenture, loan or debt agreement may not be used to interpret this
Indenture.

Section 11.10. SUCCESSORS.

          All covenants and agreements of the Co-Issuers in this Indenture and
the Notes shall bind their successors. All covenants and agreements of the
Trustee in this Indenture shall bind its successors.

Section 11.11. SEVERABILITY.

          In case any provision in this Indenture or in the Notes shall be
invalid, illegal or unenforceable, the validity, legality and enforceability of
the remaining provisions shall not in any way be affected or impaired thereby.

Section 11.12. COUNTERPART ORIGINALS.

          The parties may sign any number of copies of this Indenture. Each
signed copy shall be an original, but all of them together represent the same
agreement.

                         [Signatures on following page]


                                       51



                                   SIGNATURES

Dated as of May 5, 2006

                                        COMPANY:

                                        THE ROUSE COMPANY LP

                                        BY: ROUSE LLC, its general partner


                                        By: /s/ Illegible
                                            ------------------------------------
                                        Name:
                                              ----------------------------------
                                        Title:
                                               ---------------------------------


                                        CORPORATE CO-ISSUER:

                                        TRC CO-ISSUER, INC.


                                        By: /s/ Illegible
                                            ------------------------------------
                                        Name:
                                              ----------------------------------
                                        Title:
                                               ---------------------------------

                                                      SIGNATURE PAGE - INDENTURE



                                        TRUSTEE:

                                        LASALLE BANK NATIONAL ASSOCIATION


                                        By: /s/ Margaret M. Muir
                                            ------------------------------------
                                        Name: Margaret M. Muir
                                        Title: First Vice President

                                                      SIGNATURE PAGE - INDENTURE



                                                                       EXHIBIT A

                                 (Face of Note)

                          6-3/4% SENIOR NOTES DUE 2013

                                                       CUSIP ___________________

NO. ________                                                         $__________

                              THE ROUSE COMPANY LP
                               TRC CO-ISSUER, INC.

promises to pay to CEDE & CO., INC. or registered assigns, the principal sum
of _____________________________ Dollars ($________________________) on May 1,
2013.

Interest Payment Dates: May 1 and November 1.

Record Dates: April 15 and October 15.

Dated: May 5, 2006.


                                       A-1



          IN WITNESS WHEREOF, each of the Co-Issuers has caused this Note to be
signed manually or by facsimile by its duly authorized officer.

                                        THE ROUSE COMPANY LP

                                        BY: ROUSE LLC, its general partner


                                        By:
                                            ------------------------------------
                                        Name:
                                              ----------------------------------
                                        Title:
                                               ---------------------------------


                                        TRC CO-ISSUER, INC.


                                        By:
                                            ------------------------------------
                                        Name:
                                              ----------------------------------
                                        Title:
                                               ---------------------------------

This is one of the Global Notes
referred to in the within-
mentioned Indenture:

LASALLE BANK NATIONAL ASSOCIATION,
as Trustee


By:
    ---------------------------------
    Authorized Signatory

Dated:
       ------------------------------


                                       A-2



                                 (Back of Note)

                          6-3/4% SENIOR NOTES due 2013

[Insert the Global Note Legend, if applicable pursuant to the terms of the
 Indenture]

[Insert the Private Placement Legend, if applicable pursuant to the terms of the
Indenture]

[Insert the Regulation S Temporary Global Note Placement Legend, if applicable
pursuant to the terms of the Indenture]

          Capitalized terms used herein shall have the meanings assigned to them
in the Indenture referred to below unless otherwise indicated.

     1. INTEREST. The Rouse Company LP, a Delaware limited partnership (the
"COMPANY"), and TRC Co-Issuer, Inc., a Delaware corporation ("CORPORATE
CO-ISSUER" and, together with the Company, the "CO-ISSUERS"), promise to pay
interest on the principal amount of this Note at 6-3/4% per annum until
maturity. The Co-Issuers shall pay interest semi-annually on May 1 and November
1 of each year, or if any such day is not a Business Day, on the next succeeding
Business Day (each an "INTEREST PAYMENT DATE"). Interest shall accrue from the
most recent date to which interest has been paid on the Notes (or one or more
Predecessor Notes) or, if no interest has been paid, from the date of issuance
of this Note; provided, however, that if there is no existing Default in the
payment of interest, and if this Note is authenticated between a record date
referred to on the face hereof and the next succeeding Interest Payment Date,
interest shall accrue from such next succeeding Interest Payment Date; provided,
further, that the first Interest Payment Date shall be November 1, 2006.
Interest shall be computed on the basis of a 360-day year of twelve 30-day
months.

     2. METHOD OF PAYMENT. The Co-Issuers shall pay interest on the Notes
(except defaulted interest) to the Persons in whose name this Note (or one or
more Predecessor Notes) is registered at the close of business on the April 15
or October 15 next preceding the Interest Payment Date, even if such Notes are
cancelled after such record date and on or before such Interest Payment Date,
except as provided in Section 2.12 of the Indenture with respect to defaulted
interest. The Notes shall be payable as to principal, premium, if any, and
interest at the office or agency of the Co-Issuers maintained for such purpose,
or, at the option of the Co-Issuers, payment of interest may be made by check
mailed to the Holders at their addresses set forth in the Security Register;
provided, however, that payment by wire transfer of immediately available funds
shall be required with respect to principal of and interest and premium, if any,
on, all Global Notes and all other Notes the Holders of which shall have
provided wire transfer instructions to the Co-Issuers or the Paying Agent. Such
payment shall be in such coin or currency of the United States of America as at
the time of payment is legal tender for payment of public and private debts.

     3. PAYING AGENT AND REGISTRAR. Initially, LaSalle Bank National
Association, the Trustee under the Indenture, shall act as Paying Agent and
Registrar. The Co-Issuers may change any Paying Agent or Registrar without
notice to any Holder. The Company or any of its Subsidiaries may act in any such
capacity.

     4. INDENTURE. The Co-Issuers issued the Notes under an Indenture dated as
of May 5, 2006 ("INDENTURE") among the Company, Corporate Co-Issuer and the
Trustee. The terms of the Notes include those stated in the Indenture and those
made part of the Indenture by reference to the Trust Indenture Act of 1939, as
amended (15 U.S. Code Sections 77aaa-77bbbb). The Notes are subject to all such
terms, and Holders are referred to the Indenture and such Act for a statement of
such terms. To the extent any provision of this Note conflicts with the express
provisions of the Indenture, the provisions of the Indenture shall govern and be
controlling. The Notes are obligations of the Co-Issuers unlimited in aggregate
principal amount.

     5. OPTIONAL REDEMPTION.

          (a) At any time, the Co-Issuers may redeem all or any portion of the
Notes, at once or over time, after giving the notice required pursuant to
Section 3.03 of the Indenture, at a redemption price equal to the Make-Whole
Price.


                                       A-3


          Any notice to the Holders of Notes of a redemption pursuant to this
paragraph (5)(a) shall include the appropriate calculation of the redemption
price, but need not include the redemption price itself. The actual redemption
price, calculated as described above, shall be set forth in an Officer's
Certificate delivered to the Trustee no later than two Business Days prior to
the redemption date

          (b) Any prepayment pursuant to this paragraph shall be made pursuant
to the provisions of Sections 3.01 through 3.06 of the Indenture.

     6. MANDATORY REDEMPTION. The Co-Issuers shall not be required to make
mandatory redemption or sinking fund payments with respect to, or offer to
purchase, the Notes.

     7. NOTICE OF REDEMPTION. Notice of redemption shall be mailed at least 30
days but not more than 60 days before the redemption date to each Holder whose
Notes are to be redeemed at its registered address. Notes in denominations
larger than $1,000 may be redeemed in part but only in whole multiples of
$1,000, unless all of the Notes held by a Holder are to be redeemed. On and
after the redemption date interest ceases to accrue on Notes or portions thereof
called for redemption.

     8. DENOMINATIONS, TRANSFER, EXCHANGE. The Notes are in registered form
without coupons in denominations of $1,000 and integral multiples of $1,000.
This Note shall represent the aggregate principal amount of outstanding Notes
from time to time endorsed hereon and the aggregate principal amount of Notes
represented hereby may from time to time be reduced or increased, as
appropriate, to reflect exchanges and redemptions. The transfer of Notes may be
registered and Notes may be exchanged as provided in the indenture. The
Registrar and the Trustee may require a Holder, among other things, to furnish
appropriate endorsements and transfer documents and the Co-Issuers may require a
Holder to pay any taxes and fees required by law or permitted by the Indenture.
The Co-Issuers need not exchange or register the transfer of any Note or portion
of a Note selected for redemption, except for the unredeemed portion of any Note
being redeemed in part. Also, the Co-Issuers need not exchange or register the
transfer of any Notes for a period of 15 days before a selection of Notes to be
redeemed or during the period between a record date and the corresponding
Interest Payment Date.

          [This Regulation S Temporary Global Note is exchangeable in whole or
in part for one or more Global Notes only (i) on or after the termination of the
Distribution Compliance Period and (ii) upon presentation of certificates
(accompanied by an Opinion of Counsel, if applicable) required by Article 2 of
the Indenture. Upon exchange of this Regulation S Temporary Global Note for one
or more Global Notes, the Trustee shall cancel this Regulation S Temporary
Global Note.]

     9. PERSONS DEEMED OWNERS. The registered Holder of a Note may be treated as
its owner for all purposes.

     10. AMENDMENT, SUPPLEMENT AND WAIVER. Subject to certain exceptions, the
Co-Issuers and the Trustee may amend or supplement the Indenture or the Notes
with the consent of the Holders of a majority in principal amount of the then
outstanding Notes, including Additional Notes, if any, voting as a single class
(including consents obtained in connection with a purchase of or tender offer or
exchange offer for the Notes), and, subject to Sections 6.08 and 6.13 of the
Indenture, any existing Default or Event of Default (except a continuing Default
or Event of Default in the payment of principal, premium, if any, interest on
the Notes) or compliance with any provision of the Indenture or the Notes
(except for certain covenants and provisions of the Indenture which cannot be
amended without the consent of each Holder) may be waived with the consent of
the Holders of a majority in principal amount of the then outstanding Notes,
including Additional Notes, if any, then outstanding voting as a single class
(including consents obtained in connection with a purchase of or tender offer or
exchange offer for the Notes). Without the consent of any Holder, the Co-Issuers
and the Trustee may amend or supplement the Indenture or the Notes to cure any
ambiguity, manifest error, omission, defect or inconsistency, to provide for the
assumption by a successor of the obligations of the Co-Issuers under the
Indenture, to provide for uncertificated Notes in addition to or in place of
certificated Notes, to add guarantees with respect to the Notes, to secure the
Notes, to add to the covenants of the Co-Issuers for the benefit of the Holders
of the Notes or to surrender any right or power conferred upon the Co-Issuers.


                                       A-4



     11. DEFAULTS AND REMEDIES. If any Event of Default occurs and is
continuing, the Trustee or the Holders of at least 25% in principal amount of
the then outstanding Notes may declare all the Notes to be due and payable.
Notwithstanding the foregoing, in the case of an Event of Default arising from
certain events of bankruptcy or insolvency described in the Indenture, all
outstanding Notes shall become due and payable without further action or notice.
Holders may not enforce the Indenture or the Notes except as provided in the
Indenture. Subject to certain limitations, Holders of a majority in aggregate
principal amount of the then outstanding Notes may direct the Trustee in its
exercise of any trust or power. The Trustee may withhold from Holders notice of
any continuing Default or Event of Default (except a Default or Event of Default
relating to the payment of principal or interest) if it determines that
withholding notice is in their interest. The Holders of a majority in aggregate
principal amount of the Notes then outstanding by notice to the Trustee may on
behalf of the Holders of all of the Notes waive any existing Default or Event of
Default and its consequences under the Indenture except a continuing Default or
Event of Default in the payment of interest, or the principal of, the Notes. The
Company is required to deliver to the Trustee annually a statement regarding
compliance with the Indenture.

     12. TRUSTEE DEALINGS WITH CO-ISSUERS. Subject to certain limitations, the
Trustee in its individual or any other capacity may become the owner or pledgee
of Notes and may otherwise deal with the Co-Issuers or any Affiliate of the
Co-Issuers with the same rights it would have if it were not Trustee.

     13. NO RECOURSE AGAINST OTHERS. No past, present or future director,
officer, employee, incorporator or stockholder of the Co-Issuers, as such, shall
have any liability for any obligations of the Co-Issuers under the Indenture,
the Notes or for any claim based on, in respect of, or by reason of, such
obligations or their creation. Each Holder by accepting a Note waives and
releases all such liability.

     14. AUTHENTICATION. This Note shall not be valid until authenticated by the
manual signature of the Trustee or an authenticating agent.

     15. ABBREVIATIONS. Customary abbreviations may be used in the name of a
Holder or an assignee, such as: TEN COM (= tenants in common), TEN ENT (=
tenants by the entireties), JT TEN (= joint tenants with right of survivorship
and not as tenants in common), CUST (= Custodian), and U/G/M/A (= Uniform Gifts
to Minors Act).

     16. CUSIP NUMBERS. Pursuant to a recommendation promulgated by the
Committee on Uniform Security Identification Procedures, the Co-Issuers have
caused CUSIP numbers to be printed on the Notes and has directed the Trustee to
use CUSIP numbers in notices of redemption as a convenience to Holders. No
representation is made as to the accuracy of such numbers either as printed on
the Notes or as contained in any notice of redemption and reliance may be placed
only on the other identification numbers placed thereon.

          The Co-Issuers shall furnish to any Holder upon written request and
without charge a copy of the Indenture. Requests may be made to:

          The Rouse Company LP
          110 North Wacker Drive
          Chicago, Illinois 60606
          Attention: Chief Financial Officer

     17. GOVERNING LAW. The law of the State of New York shall govern and be
used to construe this Note without giving effect to applicable principals of
conflicts of law to the extent that the application of the laws of another
jurisdiction would be required thereby.


                                       A-5



                                 ASSIGNMENT FORM

To assign this Note, fill in the form below:

(I) or (we) assign and transfer this Note to

________________________________________________________________________________
            (Insert assignee's social security or other tax I.D. no.)

________________________________________________________________________________

________________________________________________________________________________

________________________________________________________________________________

________________________________________________________________________________
              (Print or type assignee's name, address and zip code)

and irrevocably appoint ________________________________________________________
as agent to transfer this Note on the books of the Co-Issuers. The agent may
substitute another to act for him.
________________________________________________________________________________


Date:                                   Your Signature:
      ------------------                                ------------------------
                                        (Sign exactly as your name appears on
                                        the face of this Note)


                                        Signature Guarantee:
                                                             -------------------


                                       A-6



              SCHEDULE OF EXCHANGES OF INTERESTS IN THE GLOBAL NOTE

          The following exchanges of a part of this Global Note for an interest
in another Global Note or for a Definitive Note, or exchanges of a part of
another Global Note or Definitive Note for an interest in this Global Note, have
been made:



                                                                  Principal Amount
                        Amount of                               of this Global Note       Signature of
                       decrease in        Amount of increase       following such     authorized signatory
                     Principal Amount     in Principal Amount      decrease (or           of Trustee or
Date of Exchange   of this Global Note   of this Global  Note        increase)           Note Custodian
- ----------------   -------------------   --------------------   -------------------   --------------------
                                                                          





                                    EXHIBIT B

                         FORM OF CERTIFICATE OF TRANSFER

The Rouse Company LP
TRC Co-Issuer, Inc.
110 North Wacker Drive
Chicago, Illinois 60606
Attention: Chief Financial Officer

LaSalle Bank National Association
135 S. LaSalle, Suite 1960
Chicago, IL 60603
Attention: Corporate Trust Services Division
Telecopier No.: _______________________

     Re: 6-3/4% Senior Notes due 2013

          Reference is hereby made to the Indenture, dated as of May 5, 2006
(the "Indenture"), among The Rouse Company LP and TRC Co-Issuer, Inc., as
co-issuers (the "Co-Issuers) and LaSalle Bank National Association, as trustee.
Capitalized terms used but not defined herein shall have the meanings given to
them in the Indenture.

          ______________________________, (the "Transferor") owns and proposes
to transfer the Note[s] or interest in such Note[s] specified in Annex A hereto,
in the principal amount of $__________________________________________ in such
Note[s] or interests (the "Transfer"), to ___________________________________
(the "Transferee"), as further specified in Annex A hereto. In connection with
the Transfer, the Transferor hereby certifies that:

                             [CHECK ALL THAT APPLY]

          1. [ ] CHECK IF TRANSFEREE WILL TAKE DELIVERY OF A BENEFICIAL INTEREST
IN THE 144A GLOBAL NOTE OR A DEFINITIVE NOTE PURSUANT TO RULE 144A. The Transfer
is being effected pursuant to and in accordance with Rule 144A under the United
States Securities Act of 1933, as amended (the "Securities Act"), and,
accordingly, the Transferor hereby further certifies that the beneficial
interest or Definitive Note is being transferred to a Person that the Transferor
reasonably believed and believes is purchasing the beneficial interest or
Definitive Note for its own account, or for one or more accounts with respect to
which such Person exercises sole investment discretion, and such Person and each
such account is a "qualified institutional buyer" within the meaning of Rule
144A in a transaction meeting the requirements of Rule 144A and such Transfer is
in compliance with any applicable blue sky securities laws of any state of the
United States. Upon consummation of the proposed Transfer in accordance with the
terms of the Indenture, the transferred beneficial interest or Definitive Note
will be subject to the restrictions on transfer enumerated in the Private
Placement Legend printed on the 144A Global Note and/or the Definitive Note and
in the Indenture and the Securities Act.

          2. [ ] CHECK IF TRANSFEREE WILL TAKE DELIVERY OF A BENEFICIAL INTEREST
IN THE REGULATION S GLOBAL NOTE OR A DEFINITIVE NOTE PURSUANT TO REGULATION S.
The Transfer is being effected pursuant to and in accordance with Rule 903 or
Rule 904 under the Securities Act and, accordingly, the Transferor hereby
further certifies that (i) the Transfer is not being made to a Person in the
United States and (x) at the time the buy order was originated, the Transferee
was outside the United States or such Transferor and any Person acting on its
behalf reasonably believed and believes that the Transferee was outside the
United States or (y) the transaction was executed in, on or through the
facilities of a designated offshore securities market and neither such
Transferor nor any Person acting on its behalf knows that the transaction was
prearranged with a buyer in the United States, (ii) no directed selling efforts
have been made in contravention of the requirements of Rule 903(b) or Rule
904(a) of Regulation S under the Securities Act, (iii) the transaction is not
part of a plan or scheme to evade the registration requirements of the
Securities Act and (iv) if the proposed transfer is being made prior to the
expiration of the Distribution Compliance Period, the transfer is not being made
to a U.S. Person or for the account or benefit of a U.S. Person (other than an
Initial Purchaser). Upon consummation of the proposed transfer in accordance
with the


                                       B-1



terms of the Indenture, the transferred beneficial interest or Definitive Note
will be subject to the restrictions on Transfer enumerated in the Private
Placement Legend printed on the Regulation S Global Note, the Regulation S
Temporary Global Note and/or the Definitive Note and in the Indenture and the
Securities Act.

          3. [ ] CHECK AND COMPLETE IF TRANSFEREE WILL TAKE DELIVERY OF A
BENEFICIAL INTEREST IN THE IAI GLOBAL NOTE OR A DEFINITIVE NOTE PURSUANT TO ANY
PROVISION OF THE SECURITIES ACT OTHER THAN RULE 144A OR REGULATION S. The
Transfer is being effected in compliance with the transfer restrictions
applicable to beneficial interests in Restricted Global Notes and Restricted
Definitive Notes and pursuant to and in accordance with the Securities Act and
any applicable blue sky securities laws of any state of the United States, and
accordingly the Transferor hereby further certifies that (check one):

               (a) [ ] such Transfer is being effected pursuant to and in
     accordance with Rule 144 under the Securities Act;

                                       or

               (b) [ ] such Transfer is being effected to the Company or a
     subsidiary thereof;

                                       or

               (c) [ ] such Transfer is being effected pursuant to an effective
     registration statement under the Securities Act and in compliance with the
     prospectus delivery requirements of the Securities Act;

                                       or

               (d) [ ] such Transfer is being effected to an Institutional
     Accredited Investor and pursuant to an exemption from the registration
     requirements of the Securities Act other than Rule 144 A, Rule 144 or Rule
     904, and the Transferor hereby further certifies that it has not engaged in
     any general solicitation within the meaning of Regulation D under the
     Securities Act and the Transfer complies with the transfer restrictions
     applicable to beneficial interests in a Restricted Global Note or
     Restricted Definitive Notes and the requirements of the exemption claimed,
     which certification is supported by (1) a certificate executed by the
     Transferee in the form of Exhibit D to the Indenture and (2) if such
     Transfer is in respect of a principal amount of Notes at the time of
     transfer of less than $250,000, an Opinion of Counsel provided by the
     Transferor or the Transferee (a copy of which the Transferor has attached
     to this certification), to the effect that such Transfer is in compliance
     with the Securities Act. Upon consummation of the proposed transfer in
     accordance with the terms of the Indenture, the transferred beneficial
     interest or Definitive Note will be subject to the restrictions on transfer
     enumerated in the Private Placement Legend printed on the IAI Global Note
     and/or the Definitive Notes and in the Indenture and the Securities Act.

          4. [ ] CHECK IF TRANSFEREE WILL TAKE DELIVERY OF A BENEFICIAL INTEREST
IN AN UNRESTRICTED GLOBAL NOTE OR OF AN UNRESTRICTED DEFINITIVE NOTE.

          (A) [ ] CHECK IF TRANSFER IS PURSUANT TO RULE 144. (i) The Transfer is
being effected pursuant to and in accordance with Rule 144 under the Securities
Act and in compliance with the transfer restrictions contained in the Indenture
and any applicable blue sky securities laws of any state of the United States
and (ii) the restrictions on transfer contained in the Indenture and the Private
Placement Legend are not required in order to maintain compliance with the
Securities Act. Upon consummation of the proposed Transfer in accordance with
the terms of the Indenture, the transferred beneficial interest or Definitive
Note will no longer be subject to the restrictions on transfer enumerated in the
Private Placement Legend printed on the Restricted Global Notes, on Restricted
Definitive Notes and in the Indenture.

          (b) [ ] CHECK IF TRANSFER IS PURSUANT TO REGULATION S. (i) The
Transfer is being effected pursuant to and in accordance with Rule 903 or Rule
904 under the Securities Act and in compliance with the transfer restrictions
contained in the Indenture and any applicable blue sky securities laws of any
state of the United


                                       B-2


States and (ii) the restrictions on transfer contained in the Indenture and the
Private Placement Legend are not required in order to maintain compliance with
the Securities Act. Upon consummation of the proposed Transfer in accordance
with the terms of the Indenture, the transferred beneficial interest or
Definitive Note will no longer be subject to the restrictions on transfer
enumerated in the Private Placement Legend printed on the Restricted Global
Notes, on Restricted Definitive Notes and in the Indenture.

          (c) [ ] CHECK IF TRANSFER IS PURSUANT TO OTHER EXEMPTION, (i) The
Transfer is being effected pursuant to and in compliance with an exemption from
the registration requirements of the Securities Act other than Rule 144, Rule
903 or Rule 904 and in compliance with the transfer restrictions contained in
the Indenture and any applicable blue sky securities laws of any State of the
United States and (ii) the restrictions on transfer contained in the Indenture
and the Private Placement Legend are not required in order to maintain
compliance with the Securities Act. Upon consummation of the proposed Transfer
in accordance with the terms of the Indenture, the transferred beneficial
interest or Definitive Note will not be subject to the restrictions on transfer
enumerated in the Private Placement Legend printed on the Restricted Global
Notes or Restricted Definitive Notes and in the Indenture.

          This certificate and the statements contained herein are made for your
benefit and the benefit of the Co-Issuers.

                                        ----------------------------------------
                                        [Insert Name of Transferor]


                                        By:
                                            ------------------------------------
                                        Name:
                                              ----------------------------------
                                        Title:
                                               ---------------------------------

                                        Dated:
                                               ---------------------------------


                                       B-3



                       ANNEX A TO CERTIFICATE OF TRANSFER

1.   The Transferor owns and proposes to transfer the following:

                            [CHECK ONE OF (a) OR (b)]

     (a)  [ ]  a beneficial interest in the:

     (i)  [ ] 144A Global Note (CUSIP __________), or

     (ii) [ ] Regulation S Global Note (CUSIP __________), or

     (iii) [ ] IAI Global Note (CUSIP __________); or

     (b)  [ ] a Restricted Definitive Note.

2.   After the Transfer the Transferee will hold:

                         [CHECK ONE OF (a), (b) OR (c)]

     (a)  [ ] a beneficial interest in the:

     (i)  [ ] 144A Global Note (CUSIP __________), or

     (ii) [ ] Regulation S Global Note (CUSIP __________), or

     (iii) [ ] IAI Global Note (CUSIP __________); or

     (iv) [ ] Unrestricted Global Note (CUSIP __________); or

     (b)  [ ] a Restricted Definitive Note; or

     (c)  [ ] an Unrestricted Definitive Note,

     in accordance with the terms of the Indenture.


                                       B-4



                                    EXHIBIT C

                         FORM OF CERTIFICATE OF EXCHANGE

The Rouse Company LP
TRC Co-Issuer, Inc.
110 North Wacker Drive
Chicago, Illinois 60606
Attention: Chief Financial Officer

LaSalle Bank National Association
135 S. LaSalle, Suite 1960
Chicago, IL 60603
Attention: Corporate Trust Services Division
Telecopier No.: ________________

     Re: 6-3/4% Senior Notes due 2013

          Reference is hereby made to the Indenture, dated as of May 5, 2006
(the "Indenture"), among The Rouse Company LP and TRC Co-Issuer, Inc., as
co-issuers (the "Co-Issuers) and LaSalle Bank National Association, as trustee.
Capitalized terms used but not defined herein shall have the meanings given to
them in the Indenture.

          _____________________________, (the "Owner") owns and proposes to
exchange the Note[s] or interest in such Note[s] specified herein, in the
principal amount of $__________ in such Note[s] or interests (the "Exchange").
In connection with the Exchange, the Owner hereby certifies that:

          1. EXCHANGE OF RESTRICTED DEFINITIVE NOTES OR BENEFICIAL INTERESTS IN
A RESTRICTED GLOBAL NOTE FOR UNRESTRICTED DEFINITIVE NOTES OR BENEFICIAL
INTERESTS IN AN UNRESTRICTED GLOBAL NOTE

          (A) [ ] CHECK IF EXCHANGE IS FROM BENEFICIAL INTEREST IN A RESTRICTED
GLOBAL NOTE TO BENEFICIAL INTEREST IN AN UNRESTRICTED GLOBAL NOTE. In connection
with the Exchange of the Owner's beneficial interest in a Restricted Global Note
for a beneficial interest in an Unrestricted Global Note in an equal principal
amount, the Owner hereby certifies (i) the beneficial interest is being acquired
for the Owner's own account without transfer, (ii) such Exchange has been
effected in compliance with the transfer restrictions applicable to the
Restricted Global Note and pursuant to and in accordance with the United States
Securities Act of 1933, as amended (the "Securities Act"), (iii) the
restrictions on transfer contained in the Indenture and the Private Placement
Legend are not required in order to maintain compliance with the Securities Act
and (iv) the beneficial interest in an Unrestricted Global Note is being
acquired in compliance with any applicable blue sky securities laws of any state
of the United States.

          (B) [ ] CHECK IF EXCHANGE IS FROM BENEFICIAL INTEREST IN A RESTRICTED
GLOBAL NOTE TO UNRESTRICTED DEFINITIVE NOTE. In connection with the Exchange of
the Owner's beneficial interest in a Restricted Global Note for an Unrestricted
Definitive Note, the Owner hereby certifies (i) the Unrestricted Definitive Note
is being acquired for the Owner's own account without transfer, (ii) such
Exchange has been effected in compliance with the transfer restrictions
applicable to the Restricted Global Note and pursuant to and in accordance with
the Securities Act, (iii) the restrictions on transfer contained in the
Indenture and the Private Placement Legend are not required in order to maintain
compliance with the Securities Act and (iv) the Unrestricted Definitive Note is
being acquired in compliance with any applicable blue sky securities laws of any
state of the United States.

          (c) [ ] CHECK IF EXCHANGE IS FROM RESTRICTED DEFINITIVE NOTE TO
BENEFICIAL INTEREST IN AN UNRESTRICTED GLOBAL NOTE. In connection with the
Owner's Exchange of a Restricted Definitive Note for a beneficial interest in an
Unrestricted Global Note, the Owner hereby certifies (i) the beneficial interest
is being acquired for the Owner's own account without transfer, (ii) such
Exchange has been effected in compliance with the transfer restrictions
applicable to Restricted Definitive Notes and pursuant to and in accordance with
the Securities Act, (iii) the restrictions on transfer contained in the
Indenture and the Private Placement Legend are not required in order to maintain
compliance with the Securities Act and (iv) the beneficial interest is being
acquired in compliance with any applicable blue sky securities laws of any state
of the United States.

          (d) [ ] CHECK IF EXCHANGE IS FROM RESTRICTED DEFINITIVE NOTE TO
UNRESTRICTED DEFINITIVE NOTE. In connection with the Owner's Exchange of a
Restricted Definitive Note for an Unrestricted Definitive Note, the


                                       C-1



Owner hereby certifies (i) the Unrestricted Definitive Note is being acquired
for the Owner's own account without transfer, (ii) such Exchange has been
effected in compliance with the transfer restrictions applicable to Restricted
Definitive Notes and pursuant to and in accordance with the Securities Act,
(iii) the restrictions on transfer contained in the Indenture and the Private
Placement Legend are not required in order to maintain compliance with the
Securities Act and (iv) the Unrestricted Definitive Note is being acquired in
compliance with any applicable blue sky securities laws of any state of the
United States.

          2. EXCHANGE OF RESTRICTED DEFINITIVE NOTES OR BENEFICIAL INTERESTS IN
RESTRICTED GLOBAL NOTES FOR RESTRICTED DEFINITIVE NOTES OR BENEFICIAL INTERESTS
IN RESTRICTED GLOBAL NOTES

          (a) [ ] CHECK IF EXCHANGE IS FROM BENEFICIAL INTEREST IN A RESTRICTED
GLOBAL NOTE TO RESTRICTED DEFINITIVE NOTE. In connection with the Exchange of
the Owner's beneficial interest in a Restricted Global Note for a Restricted
Definitive Note with an equal principal amount, the Owner hereby certifies that
the Restricted Definitive Note is being acquired for the Owner's own account
without transfer. Upon consummation of the proposed Exchange in accordance with
the terms of the Indenture, the Restricted Definitive Note issued will continue
to be subject to the restrictions on transfer enumerated in the Private
Placement Legend printed on the Restricted Definitive Note and in the Indenture
and the Securities Act.

          (b) [ ] CHECK IF EXCHANGE IS FROM RESTRICTED DEFINITIVE NOTE TO
BENEFICIAL INTEREST IN A RESTRICTED GLOBAL NOTE. In connection with the Exchange
of the Owner's Restricted Definitive Note for a beneficial interest in the
[CIRCLE ONE] 144A Global Note, Regulation S Global Note, IAI Global Note with an
equal principal amount, the Owner hereby certifies (i) the beneficial interest
is being acquired for the Owner's own account without transfer and (ii) such
Exchange has been effected in compliance with the transfer restrictions
applicable to the Restricted Definitive Note and pursuant to and in accordance
with the Securities Act, and in compliance with any applicable blue sky
securities laws of any state of the United States. Upon consummation of the
proposed Exchange in accordance with the terms of the Indenture, the beneficial
interest issued will be subject to the restrictions on transfer enumerated in
the Private Placement Legend printed on the relevant Restricted Global Note and
in the Indenture and the Securities Act.


                                       C-2



          This certificate and the statements contained herein are made for your
benefit and the benefit of the Co-Issuers.

                                        ----------------------------------------
                                        [Insert Name of Transferor]


                                        By:
                                            ------------------------------------
                                        Name:
                                              ----------------------------------
                                        Title:
                                               ---------------------------------

                                        Dated:
                                               ---------------------------------


                                       C-3



                                    EXHIBIT D

                            FORM OF CERTIFICATE FROM
                   ACQUIRING INSTITUTIONAL ACCREDITED INVESTOR

The Rouse Company LP
TRC Co-Issuer, Inc.
110 North Wacker Drive
Chicago, Illinois 60606
Attention: Chief Financial Officer

LaSalle Bank National Association
135 S. LaSalle, Suite 1960
Chicago, IL 60603
Attention: Corporate Trust Services Division
Telecopier No.:______________

     Re: 6-3/4% Senior Notes due 2013

          Reference is hereby made to the Indenture, dated as of May 5, 2006
(the "'Indenture"), among The Rouse Company LP and TRC Co-Issuer, Inc., as
co-issuers (the "Co-Issuers) and LaSalle Bank National Association, as trustee.
Capitalized terms used but not defined herein shall have the meanings given to
them in the Indenture.

          In connection with our proposed purchase of $__________ aggregate
principal amount of:

          (a)  [ ] a beneficial interest in a Global Note, or

          (b)  [ ] a Definitive Note,

               we confirm that:

          1. We understand that any subsequent transfer of the Notes or any
interest therein is subject to certain restrictions and conditions set forth in
the Indenture and the undersigned agrees to be bound by, and not to resell,
pledge or otherwise transfer the Notes or any interest therein except in
compliance with, such restrictions and conditions and the United States
Securities Act of 1933, as amended (the "Securities Act").

          2. We understand that the offer and sale of the Notes have not been
registered under the Securities Act, and that the Notes and any interest therein
may not be offered or sold except as permitted in the following sentence. We
agree, on our own behalf and on behalf of any accounts for which we are acting
as hereinafter stated, that if we should sell the Notes or any interest therein,
we will do so only (A) to the Company or any subsidiary thereof, (B) in
accordance with Rule 144A under the Securities Act to a "qualified institutional
buyer" (as defined therein), (C) to an institutional "accredited investor" (as
defined below) that, prior to such transfer, furnishes (or has furnished on its
behalf by a U.S. broker-dealer) to you and to the Co-Issuers a signed letter
substantially in the form of this letter and, if such transfer is in respect of
a principal amount of Notes, at the time of transfer of less than $250,000, an
Opinion of Counsel in form reasonably acceptable to the Co-Issuers to the effect
that such transfer is in compliance with the Securities Act, (D) outside the
United States in accordance with Rule 904 of Regulation S under the Securities
Act, (E) pursuant to the provisions of Rule 144(k) under the Securities Act or
(F) pursuant to an effective registration statement under the Securities Act,
and we further agree to provide to any Person purchasing the Definitive Note or
beneficial interest in a Global Note from us in a transaction meeting the



requirements of clauses (A) through (E) of this paragraph a notice advising such
purchaser that resales thereof are restricted as stated herein.

          3. We understand that, on any proposed resale of the Notes or
beneficial interest therein, we will be required to furnish to you and the
Co-Issuers such certifications, legal opinions and other information as you and
the Co-Issuers may reasonably require to confirm that the proposed sale complies
with the foregoing restrictions. We further understand that the Notes purchased
by us will bear a legend to the foregoing effect.

          4. We are an institutional "accredited investor" (as defined in Rule
501(a)(1), (2), (3) or (7) of Regulation D under the Securities Act) and have
such knowledge and experience in financial and business matters as to be capable
of evaluating the merits and risks of our investment in the Notes, and we and
any accounts for which we are acting are each able to bear the economic risk of
our or its investment. We have had access to such financial and other
information and have been afforded the opportunity to ask such questions of
representatives of the Company and receive answers thereto, as we deem necessary
in connection with our decision to purchase the Notes.

          5. We are acquiring the Notes or a beneficial interest therein
purchased by us for our own account or for one or more accounts (each of which
is an institutional "accredited investor") as to each of which we exercise sole
investment discretion and are not acquiring the Notes with a view to any
distribution thereof in a transaction that would violate the Securities Act of
the securities laws of any state of the United States or any other applicable
jurisdiction.

          You and the Co-Issuers are entitled to rely upon this letter and are
irrevocably authorized to produce this letter or a copy hereof to any interested
party in any administrative or legal proceedings or official inquiry with
respect to the matters covered hereby. This letter shall be governed by, and
construed in accordance with, the laws of the State of New York.

                                        ----------------------------------------
                                        [Insert Name of Accredited Investor]


                                        By:
                                            ------------------------------------
                                        Name:
                                              ----------------------------------
                                        Title:
                                               ---------------------------------

Dated:
       ---------------------------------


                                        5



                                  TABLE OF CONTENTS



                                                                            PAGE
                                                                            ----
                                                                         
ARTICLE 1.  DEFINITIONS AND INCORPORATION BY REFERENCE...................     1
   Section 1.01.  Definitions............................................     1
   Section 1.02.  Other Definitions......................................    10
   Section 1.03.  Incorporation by Reference of Trust Indenture Act......    10
   Section 1.04.  Rules of Construction..................................    11

ARTICLE 2.  THE NOTES....................................................    11
   Section 2.01.  Form and Dating........................................    11
   Section 2.02.  Execution and Authentication...........................    13
   Section 2.03.  Registrar and Paying Agent.............................    13
   Section 2.04.  Paying Agent to Hold Money in Trust....................    14
   Section 2.05.  Holder Lists...........................................    14
   Section 2.06.  Transfer and Exchange..................................    14
   Section 2.07.  Replacement Notes......................................    23
   Section 2.08.  Outstanding Notes......................................    24
   Section 2.09.  Treasury Notes.........................................    24
   Section 2.10.  Temporary Notes........................................    24
   Section 2.11.  Cancellation...........................................    24
   Section 2.12.  Payment of Interest; Defaulted Interest................    25
   Section 2.13.  CUSIP or ISIN Numbers..................................    25
   Section 2.14.  Issuance of Additional Notes...........................    25
   Section 2.15.  Record Date............................................    25

ARTICLE 3.  REDEMPTION AND PREPAYMENT....................................    25
   Section 3.01.  Notices to Trustee.....................................    26
   Section 3.02.  Selection of Notes to Be Redeemed......................    26
   Section 3.03.  Notice of Redemption...................................    26
   Section 3.04.  Effect of Notice of Redemption.........................    27
   Section 3.05.  Deposit of Redemption Price............................    27
   Section 3.06.  Notes Redeemed in Part.................................    27
   Section 3.07.  Optional Redemption....................................    27
   Section 3.08.  Mandatory Redemption...................................    28

ARTICLE 4.  COVENANTS....................................................    28
   Section 4.01.  Payment of Principal, Premium and Interest.............    28
   Section 4.02.  Maintenance of Office or Agency........................    28
   Section 4.03.  Reporting..............................................    28



                                        i



                                TABLE OF CONTENTS
                                   (CONTINUED)



                                                                            PAGE
                                                                            ----
                                                                         
   Section 4.04.  Compliance Certificate.................................    29
   Section 4.05.  Payment of Taxes and Other Claims......................    29
   Section 4.06.  Existence..............................................    29
   Section 4.07.  Maintenance of Properties..............................    30
   Section 4.08.  Payments for Consent...................................    30
   Section 4.09.  Incurrence of Additional Debt and Issuance of Capital
                  Stock..................................................    30
   Section 4.10.  Limitation on Sale/Leaseback Transactions..............    32
   Section 4.11.  Ownership of Corporate Co-Issuer.......................    32

ARTICLE 5.  CONSOLIDATION, MERGER, CONVEYANCE, TRANSFER OR LEASE.........    32
   Section 5.01.  Company May Consolidate, Etc. Only on Certain Terms....    32
   Section 5.02.  Successor Substituted..................................    33

ARTICLE 6.  DEFAULTS AND REMEDIES........................................    33
   Section 6.01.  Events of Default......................................    33
   Section 6.02.  Acceleration...........................................    34
   Section 6.03.  Collection of Indebtedness and Suits for Enforcement by
                  Trustee................................................    35
   Section 6.04.  Trustee May File Proofs of Claim.......................    36
   Section 6.05.  Trustee May Enforce Claims Without Possession of Notes     36
   Section 6.06.  Application of Money Collected.........................    36
   Section 6.07.  Limitation on Suits....................................    36
   Section 6.08.  Unconditional Right of Holders to Receive Principal,
                  Premium and Interest...................................    37
   Section 6.09.  Restoration of Rights and Remedies.....................    37
   Section 6.10.  Rights and Remedies Cumulative.........................    37
   Section 6.11.  Delay or Omission Not Waiver...........................    37
   Section 6.12.  Control by Holders.....................................    38
   Section 6.13.  Waiver of Past Defaults................................    38
   Section 6.14.  Undertaking for Costs..................................    38
   Section 6.15.  Waiver of Usury, Stay or Extension Laws................    38

ARTICLE 7.  TRUSTEE......................................................    39
   Section 7.01.  Duties of Trustee......................................    39
   Section 7.02.  Rights of Trustee......................................    40
   Section 7.03.  Individual Rights of Trustee...........................    40
   Section 7.04.  Trustee's Disclaimer...................................    40



                                       ii



                                TABLE OF CONTENTS
                                   (CONTINUED)



                                                                            PAGE
                                                                            ----
                                                                         
   Section 7.05.  Notice of Defaults.....................................    41
   Section 7.06.  Reports by Trustee to Holders..........................    41
   Section 7.07.  Compensation and Indemnity.............................    41
   Section 7.08.  Replacement of Trustee.................................    42
   Section 7.09.  Successor Trustee by Merger, etc.......................    43
   Section 7.10.  Eligibility; Disqualification..........................    43
   Section 7.11.  Preferential Collection of Claims Against Co-Issuers...    43

ARTICLE 8.  LEGAL DEFEASANCE AND COVENANT DEFEASANCE.....................    43
   Section 8.01.  Option to Effect Legal Defeasance or Covenant
                  Defeasance.............................................    43
   Section 8.02.  Legal Defeasance and Discharge.........................    43
   Section 8.03.  Covenant Defeasance....................................    44
   Section 8.04.  Conditions to Legal or Covenant Defeasance.............    44
   Section 8.05.  Deposited Cash and U.S. Government Securities to be
                  held in Trust; Other Miscellaneous Provisions..........    45
   Section 8.06.  Repayment to the Co-Issuers............................    45
   Section 8.07.  Reinstatement..........................................    46

ARTICLE 9.  AMENDMENT, SUPPLEMENT AND WAIVER.............................    46
   Section 9.01.  Without Consent of Holders of Notes....................    46
   Section 9.02.  With Consent of Holders of Notes.......................    46
   Section 9.03.  Compliance with Trust Indenture Act....................    47
   Section 9.04.  Revocation and Effect of Consents......................    47
   Section 9.05.  Notation on or Exchange of Notes.......................    48
   Section 9.06.  Trustee to Sign Amendments, etc........................    48

ARTICLE 10. SATISFACTION AND DISCHARGE...................................    48
   Section 10.01. Satisfaction and Discharge.............................    48
   Section 10.02. Application of Trust Money.............................    49

ARTICLE 11. MISCELLANEOUS................................................    49
   Section 11.01. Trust Indenture Act Controls...........................    49
   Section 11.02. Notices................................................    49
   Section 11.03. Communication by Holders of Notes with Other Holders of
                  Notes..................................................    50
   Section 11.04. Certificate and Opinion as to Conditions Precedent.....    50
   Section 11.05. Statements Required in Certificate or Opinion..........    51
   Section 11.06. Rules by Trustee and Agents............................    51



                                       iii



                                TABLE OF CONTENTS
                                   (CONTINUED)



                                                                            PAGE
                                                                            ----
                                                                         
   Section 11.07. No Personal Liability of Directors, Officers, Employees
                  and Stockholders.......................................    51
   Section 11.08. Governing Law..........................................    51
   Section 11.09. No Adverse Interpretation of Other Agreements..........    51
   Section 11.10. Successors.............................................    52
   Section 11.11. Severability...........................................    52
   Section 11.12. Counterpart Originals..................................    52
   Section 11.13. Table of Contents, Headings, etc.......................    52



                                       iv

EX-10.12

                                                                   Exhibit 10.12

                                    AMENDMENT
                                       TO
                           SECOND AMENDED AND RESTATED
                        AGREEMENT OF LIMITED PARTNERSHIP
                           OF GGP LIMITED PARNTERSHIP

     THIS AMENDMENT (the "Amendment") is made and entered into on September 30,
2006, by and among the undersigned parties.

                                   WITNESSETH:

     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, pursuant to the Second Restated Partnership Agreement the General
Partner is issued from time to time additional common units of partnership upon
issuance by the General Partner of certain shares of its common stock;

     WHEREAS, on August 3, 2005 the Board of Directors of the General Partner
approved a repurchase program to re-purchase shares of its common stock on the
open market (the "Common Stock Repurchase Program"); and

     WHEREAS, the parties hereto, being the sole general partner of the
Partnership and the holders of a Majority-in-Interest of the Common Units,
desire to amend the Second Restated Partnership Agreement to (a) reflect such
re-purchases by reducing the number of partnership units held by the General
Partner in proportion to the number of shares of common stock re-purchased and
(b) set forth certain other understandings.

     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 herby agree
as follows:

     1. CAPITALIZED TERMS. Capitalized terms used but not defined herein shall
have the definitions assigned to such terms in the Second Restated Partnership
Agreement.

     2. REDUCTION OF UNITS, ETC. In connection with the Common Stock Repurchase
Program the Partnership hereby (a) reduces the General Partner's Common Units by
a number equal to the number of previously re-purchased shares of its common



stock; and (b) agrees that upon the re-purchase by the General Partner of shares
of its common stock the Partnership shall reduce the General Partner's Common
Units by an equal number of Common Units.

     3. NEW EXHIBIT A. Exhibit A to the Second Restated Partnership Agreement,
identifying the Partners, the number and class of 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. COUNTERPARTS. This Amendment may be executed in counterparts, each of
which shall be an original and all of which together shall constitute the same
document.

     5. 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 INTENTIONALL LEFT BLANK]


                                        2



     IN WITNESS WHEREOF, the undersigned have executed this Amendment on the day
and year first written above.

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/ E. Michael Greaves
    ---------------------------------
    E. Michael Greaves,
    Vice President


                                        3

EX-10.13

                                                                   Exhibit 10.13

                                TWELFTH AMENDMENT
                                       TO
                           SECOND AMENDED AND RESTATED
                        AGREEMENT OF LIMITED PARTNERSHIP
                           OF GGP LIMITED PARNTERSHIP

     THIS AMENDMENT (this "Amendment") is made and entered into on December 31,
2006, by and among the undersigned parties.

                                   WITNESSETH:

     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 "Partnership Agreement"), and the Delaware Revised Uniform
Limited Partnership Act;

     WHEREAS, General Growth Properties, Inc., a Delaware corporation, is the
sole general partner of the Partnership (the "General Partner");

     WHEREAS, certain holders of Series C Preferred Units have converted all of
such Units into Common Units pursuant to Section 7 of Schedule A to the Sixth
Amendment to the Partnership Agreement, dated November 27, 2002 (the "Series C
Amendment");

     WHEREAS, pursuant to the Series C Amendment the Partnership is required to
amend the Partnership Agreement to reflect the conversion and issuance of the
Common Units;

     WHEREAS, the parties hereto, being the General Partner and the holder of a
Majority-in-Interest of the Common Units, desire to amend the Partnership
Agreement in order to reflect such conversion and issuance of Common Units by
deleting and replacing Exhibit A to the Partnership Agreement in its entirety;
and



     WHEREAS, the General Partner and the holder of a Majority-in-Interest of
the Common Units have the right to amend the Partnership Agreement pursuant to
Section 13.7 of the Partnership 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 herby agree
as follows:

     1. CAPITALIZED TERMS. Capitalized terms used but not defined herein shall
have the definitions assigned to such terms in the Partnership Agreement.

     2. NEW EXHIBIT A. Exhibit A to the Partnership Agreement, identifying the
Partners, the number and class of series of Units owned by each of 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.

     3. OTHER PROVISIONS UNAFFECTED. Except as expressly amended hereby, the
Partnership Agreement shall remain in full force and effect in accordance with
its terms.

     4. COUNTERPARTS. This Amendment may be executed in counterparts, each of
which shall be an original and all of which together shall constitute the same
document.

                   [REMAINDER OF PAGE INTENTIONALL LEFT BLANK]


                                        2



     In witness whereof, THE UNDERSIGNED HAVE EXECUTED THIS Amendment on the day
and year first written above.

GENERAL PARTNER:

GENERAL GROWTH PROPERTIES, INC.,
a Delaware corporation


By: /S/ Bernard Freibaum
    ---------------------------------
    Bernard Freibaum, Executive
    Vice President

MAJORITY-IN-INTEREST LIMITED PARTNER:

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/ E. Michael Greaves
    ---------------------------------
    E. Michael Greaves,
    Vice President


                                        3

EX-21

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 BUSINESS TRUST                                                MARYLAND
10000 WEST CHARLESTON BOULEVARD, LLC                                 NEVADA
10450 WEST CHARLESTON BOULEVARD, LLC                                 NEVADA
1450 CENTER CROSSING DRIVE, LLC                                      DELAWARE
1451 CENTER CROSSING DRIVE, LLC                                      DELAWARE
1551 HILLSHIRE DRIVE, LLC                                            DELAWARE
1645 VILLAGE CENTER CIRCLE, LLC                                      DELAWARE
170 RETAIL ASSOCIATES, LTD.                                          TEXAS
20 CCC BUSINESS TRUST                                                MARYLAND
30 CCC BUSINESS TRUST                                                MARYLAND
500 WEST ASSOCIATES, LLC                                             UTAH
500 WEST CAPITAL, L.C.                                               UTAH
A/T ROUSE LIMITED PARTNERSHIP, THE                                   DELAWARE
ABBEY ACQUISITION LLC                                                DELAWARE
ACAPURANA PARTICIPACOES LTDA                                         BRAZIL
ACB PARKING BUSINESS TRUST                                           MARYLAND
ALAMEDA MALL ASSOCIATES                                              ILLINOIS
ALAMEDA MALL, L.L.C.                                                 DELAWARE
ALDERWOOD MALL L.L.C.                                                DELAWARE
ALDERWOOD MALL HOLDING L.L.C.                                        DELAWARE
ALIANSCE SHOPPING CENTERS LTDA.                                      BRAZIL
ALLENTOWNE MALL HOLDING, LLC                                         DELAWARE
ALLENTOWNE MALL, LP                                                  DELAWARE
ALTAMONTE MALL VENTURE                                               FLORIDA
ALTAMONTE SPRINGS MALL II, L.P.                                      DELAWARE
ALTAMONTE SPRINGS MALL L.L.C.                                        DELAWARE
ALTAMONTE SPRINGS MALL, L.P.                                         DELAWARE
AMERICAN CITY COMPANY, LLC, THE                                      MARYLAND
ATEMOYA PARTICIPACOES SA                                             BRAZIL
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
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, L.P.                                                  DELAWARE
BAYSIDE CENTER LIMITED PARTNERSHIP                                   MARYLAND






                                                                        PLACE OF
ENTITY:                                                                FORMATION:
- -------                                                              -------------
                                                                  
BEACHWOOD PLACE HOLDING, LLC                                         DELAWARE
BEACHWOOD PLACE MALL, LLC                                            DELAWARE
BEACHWOOD PLACE, LLC                                                 MARYLAND
BELLIS FAIR PARTNERS                                                 WASHINGTON
BENSON PARK BUSINESS TRUST                                           MARYLAND
BESSERAT PARTICIPACOES S.A.                                          BRAZIL
BEVERAGE OPERATIONS, INC.                                            TEXAS
BIRCHWOOD MALL PARTNERS L.L.C.                                       MICHIGAN
BIRCHWOOD MALL, INC.                                                 DELAWARE
BOISE MALL, LLC                                                      DELAWARE
BOISE TOWN SQUARE ANCHOR ACQUISITION, LLC                            DELAWARE
BOISE TOWNE PLAZA L.L.C.                                             DELAWARE
BOSSIER OUTPARCEL, L.P.                                              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
BTS PROPERTIES L.L.C.                                                DELAWARE
BURLINGTON ASSOCIATES LIMITED PARTNERSHIP                            MARYLAND
BURLINGTON TOWN CENTER II LLC                                        DELAWARE
BURLINGTON TOWN CENTER LLC, THE                                      DELAWARE
C.V. CENTER, INC.                                                    DELAWARE
CALEDONIAN HOLDING COMPANY, INC.                                     DELAWARE
CAPITAL MALL L.L.C.                                                  DELAWARE
CAPITAL MALL, INC.                                                   DELAWARE
CAROLINA PLACE L.L.C.                                                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
CHAMPAIGN MARKET PLACE, INC.                                         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 ANCHOR ACQUISITION, LLC                                   DELAWARE
CHRISTIANA HOLDINGS I LLC                                            DELAWARE
CHRISTIANA MALL LLC                                                  DELAWARE
CLACKAMAS MALL L.L.C.                                                DELAWARE
CLOVER ACQUISITIONS LLC                                              DELAWARE
CM THEATRE BUSINESS TRUST                                            MARYLAND






                                                                        PLACE OF
ENTITY:                                                                FORMATION:
- -------                                                              -------------
                                                                  
CMA ACCESS COMPANY, LLC                                              MARYLAND
CM-H BUSINESS TRUST                                                  MARYLAND
CMI CORPORATE PARKING BUSINESS TRUST                                 MARYLAND
CM-N BUSINESS TRUST                                                  MARYLAND
COASTLAND CENTER, INC.                                               DELAWARE
COASTLAND CENTER, L.P.                                               DELAWARE
COLINA SHOPPING CENTER LTDA.                                         BRAZIL
COLLIN CREEK MALL, LP                                                TEXAS
COLLIN CREEK PLANO, LLC                                              MARYLAND
COLLIN CREEK, LLC                                                    DELAWARE
COLONY SQUARE LAND L.L.C.                                            DELAWARE
COLONY SQUARE MALL L.L.C.                                            DELAWARE
COLUMBIA CROSSING, LLC                                               DELAWARE
COLUMBIA DEVELOPMENT CORPORATION, THE                                MARYLAND
COLUMBIA LAND HOLDINGS, INC.                                         MARYLAND
COLUMBIA MALL BUSINESS TRUST                                         MARYLAND
COLUMBIA MALL L.L.C.                                                 DELAWARE
COLUMBIA MALL SPE, LLC                                               MARYLAND
COLUMBIA MALL, INC.                                                  MARYLAND
COLUMBIA MALL, LLC                                                   MARYLAND
COLUMBIA MANAGEMENT, INC.                                            MARYLAND
CORONADO CENTER HOLDING L.L.C.                                       DELAWARE
CORONADO CENTER L.L.C.                                               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
CROSSROADS MALL LAND L.L.C., THE                                     DELAWARE
CROSSROADS MALL LAND, INC., THE                                      DELAWARE
CURA/GGP INVESTMENT CORPORATION S.A.R.L.                             LUXEMBOURG
CURA/GGP GAYRIMENKUL INSAAT YONETIM VE GELISTIRME ANONIM SIRKETI     TURKEY
DAYJAY ASSOCIATES                                                    OKLAHOMA
DEERBROOK ANCHOR ACQUISITION, LLC                                    DELAWARE
DEERBROOK ANCHOR ACQUISITION, LP                                     DELAWARE
DESARROLLOS COMERCIALES DEL OESTE GSG, SRL                           COSTA RICA
DK BURLINGTON TOWN CENTER LLC                                        DELAWARE
DTA HOLDING 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
ECHELON MALL LLC                                                     MARYLAND
EDEN PRAIRIE ANCHOR BUILDING L.L.C.                                  DELAWARE
EDEN PRAIRIE MALL L.L.C.                                             DELAWARE






                                                                        PLACE OF
ENTITY:                                                                FORMATION:
- -------                                                              -------------
                                                                  
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-ENDEAVOR FRONT-FOOT BENEFIT COMPANY, LLC                    MARYLAND
FAIRWOOD-FOUR FRONT-FOOT BENEFIT COMPANY, LLC                        MARYLAND
FAIRWOOD-GGP 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 II, L.P.                                   DELAWARE
FALLBROOK SQUARE PARTNERS L.L.C.                                     DELAWARE
FALLBROOK SQUARE PARTNERS LIMITED PARTNERSHIP                        CALIFORNIA
FALLBROOK SQUARE, INC.                                               DELAWARE
FANEUIL HALL BEVERAGE, LLC                                           MARYLAND
FANEUIL HALL MARKETPLACE, LLC                                        DELAWARE
FASHION PLACE, LLC                                                   DELAWARE
FASHION SHOW MALL LLC                                                DELAWARE
FIFTY COLUMBIA CORPORATE CENTER, LLC                                 DELAWARE
FLORENCE MALL L.L.C.                                                 DELAWARE
FORTY COLUMBIA CORPORATE CENTER, LLC                                 DELAWARE
FOUR OWINGS MILLS CORPORATE CENTER ASSOCIATES LIMITED PARTNERSHIP    MARYLAND
FOUR OWINGS MILLS CORPORATE CENTER LAND LIMITED PARTNERSHIP          MARYLAND
FOUR OWINGS MILLS CORPORATE CENTER, LLC                              MARYLAND
FOUR STATE FACILITY CORPORATION                                      DELAWARE
FOUR STATE PROPERTIES, LLC                                           DELAWARE
FOX RIVER PLAZA NORTH L.L.C.                                         DELAWARE
FOX RIVER SHOPPING CENTER L.L.P.                                     WISCONSIN
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
GALLERY AT MARKET EAST LLC                                           DELAWARE
GATEWAY CROSSING L.L.C.                                              DELAWARE
GATEWAY OVERLOOK BUSINESS TRUST                                      DELAWARE
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 BAYBROOK MALL, INC.                                   DELAWARE
GENERAL GROWTH FINANCE SPE, INC.                                     DELAWARE
GENERAL GROWTH MANAGEMENT, INC.                                      DELAWARE
GENERAL GROWTH OAK VIEW MALL, INC.                                   DELAWARE






                                                                        PLACE OF
ENTITY:                                                                FORMATION:
- -------                                                              -------------
                                                                  
GENERAL GROWTH SUGAR LAND MALL, INC.                                 DELAWARE
GENERAL GROWTH WILLOWBROOK L.L.C.                                    DELAWARE
GENERAL GROWTH WILLOWBROOK LAND, L.L.C.                              DELAWARE
GENERAL GROWTH WOODLANDS ONE, INC.                                   DELAWARE
GENERAL GROWTH WOODLANDS TWO, 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 BOSSIER MALL, INC.                                               DELAWARE
GGP BRASIL PARTICIPACOES LTDA.                                       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 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 MEZZANINE ONE L.L.C.                                             DELAWARE
GGP MEZZANINE THREE L.L.C.                                           DELAWARE
GGP MEZZANINE TWO 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 II SERVICES, INC.                                         DELAWARE






                                                                        PLACE OF
ENTITY:                                                                FORMATION:
- -------                                                              -------------
                                                                  
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-CONCORD LAND CO., INC.                                           DELAWARE
GGP-CUMBERLAND LAND L.L.C.                                           DELAWARE
GGP-DEERBROOK ONE, INC.                                              DELAWARE
GGP-DEERBROOK TWO, INC.                                              DELAWARE
GGP-DEERBROOK, L.P.                                                  DELAWARE
GGP-FOOTHILLS L.L.C.                                                 DELAWARE
GGP-FOOTHILLS LAND 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-KENTUCKY, INC.                                                   KENTUCKY
GGP-LA PLACE, INC.                                                   DELAWARE
GGP-LAKELAND, INC.                                                   DELAWARE
GGP-LAKEVIEW SQUARE, INC.                                            DELAWARE
GGP-LANSING MALL, INC.                                               DELAWARE
GGP-LINCOLNSHIRE L.L.C.                                              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, INC.                                               DELAWARE
GGP-NEWPARK L.L.C.                                                   DELAWARE






                                                                        PLACE OF
ENTITY:                                                                FORMATION:
- -------                                                              -------------
                                                                  
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-PARKS AT ARLINGTON ONE, INC.                                     DELAWARE
GGP-PARKS AT ARLINGTON TWO, INC.                                     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-ROCHESTER MALL, INC.                                             DELAWARE
GGP-ROGERS RETAIL L.L.C.                                             DELAWARE
GGP-SIKES SENTER L.L.C.                                              DELAWARE
GGP-SOUTH SHORE PARTNERS, INC.                                       DELAWARE
GGP-STEEPLEGATE, INC.                                                DELAWARE
GGP-SUGAR LAND MALL, L.P.                                            DELAWARE
GGP-TOWN EAST MALL, 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
GGP-VISTA RIDGE, INC.                                                DELAWARE
GGP-WESTWOOD MALL, INC.                                              DELAWARE
GGP-WILLOWBROOK LAND, L.P.                                           DELAWARE
GGP-WILLOWBROOK, INC.                                                DELAWARE
GGP-WILLOWBROOK, L.P.                                                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
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, INC.                                                 DELAWARE





                                                                        PLACE OF
ENTITY:                                                                FORMATION:
- -------                                                              -------------
                                                                  
GSG DE COSTA RICA, SRL                                               BARBADOS
HARBOR OVERLOOK LIMITED PARTNERSHIP                                  MARYLAND
HARBOR PLACE ASSOCIATES LIMITED PARTNERSHIP                          MARYLAND
HARBORPLACE MANAGEMENT COMPANY, LLC                                  MARYLAND
HARBORPLACE, LLC                                                     MARYLAND
HARPER'S CHOICE BUSINESS TRUST                                       MARYLAND
HCTSS L.L.C.                                                         DELAWARE
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 LIMITED PARTNERSHIP                                   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
HOWARD RESEARCH AND DEVELOPMENT HOLDINGS CORPORATION, THE            MARYLAND
HOWARD RETAIL INVESTMENT COMPANY, LLC                                MARYLAND
HRD PARKING DECK BUSINESS TRUST                                      MARYLAND
HRD PARKING, INC.                                                    MARYLAND
HRD REMAINDER, INC.                                                  MARYLAND
HRDHC, LLC                                                           MARYLAND
HRE FLANC, INC.                                                      DELAWARE
HRE KI SMBT                                                          DELAWARE
HRE PENNSYLVANIA SMBT                                                DELAWARE
HRE-NS, LLC                                                          DELAWARE
H-TEX, INCORPORATED                                                  TEXAS
HUGHES CORPORATION, THE                                              DELAWARE
HUGHES PROPERTIES, INC.                                              DELAWARE
HULEN GP LLC                                                         DELAWARE
HULEN MALL JOINT VENTURE                                             TEXAS
HULEN OWNER, LP                                                      DELAWARE
HUNT VALLEY TITLE HOLDING COMPANY, LLC                               MARYLAND
KALAMAZOO MALL L.L.C.                                                DELAWARE
KALAMAZOO MALL, INC.                                                 DELAWARE






                                                                        PLACE OF
ENTITY:                                                                FORMATION:
- -------                                                              -------------
                                                                  
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
LAKESIDE MALL PROPERTY LLC                                           DELAWARE
LAKESIDE MALL, LLC                                                   MICHIGAN
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
LANDMARK MALL, INC.                                                  DELAWARE
LANSING MALL LIMITED PARTNERSHIP                                     DELAWARE
LEARNING MALL L.L.C., THE                                            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 PARTNERS L.L.C.                                   IOWA
MALL OF THE BLUFFS, INC.                                             DELAWARE
MALL ST. MATTHEWS COMPANY, LLC                                       DELAWARE
MALL ST. VINCENT, INC.                                               DELAWARE
MALL ST. VINCENT, L.P.                                               DELAWARE
MARKET PLACE OUTPARCEL L.L.C.                                        DELAWARE
MARKET PLACE OUTPARCEL, INC.                                         DELAWARE
MAYFAIR PROPERTY INC.                                                DELAWARE
MERRICK PARK HOLDING, LLC                                            DELAWARE
MERRICK PARK LLC                                                     MARYLAND
MERRICK PARK PARKING LLC                                             DELAWARE
MERRIWEATHER POST BUSINESS TRUST                                     MARYLAND






                                                                        PLACE OF
ENTITY:                                                                FORMATION:
- -------                                                              -------------
                                                                  
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 BUSINESS TRUST                                             MARYLAND
MONDAWMIN, LLC                                                       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 ADMINISTRADORA LTDA.                               BRAZIL
NACIONAL IGUATEMI ADMINISTRADORA DE SHOPPING CENTERS LTDA.           BRAZIL
NACIONAL IGUATEMI BAHIA ADMINISTRADORA E PARTICIPACOES LTDA.         BRAZIL
NATICK MALL, LLC                                                     DELAWARE
NESHAMINY MALL JOINT VENTURE LIMITED PARTNERSHIP                     ILLINOIS
NEW ORLEANS RIVERWALK ASSOCIATES                                     LOUISIANA
NEW ORLEANS RIVERWALK LIMITED PARTNERSHIP                            MARYLAND
NEW RIVER ASSOCIATES                                                 ARIZONA
NEWPARK ANCHOR ACQUISITION, LLC                                      DELAWARE
NEWPARK MALL, L.L.C.                                                 DELAWARE
NORTH STAR ANCHOR ACQUISITION, LLC                                   DELAWARE
NORTH STAR ANCHOR ACQUISITION, LP                                    DELAWARE
NORTH STAR MALL II, LLC                                              MARYLAND
NORTH STAR MALL, LLC                                                 TEXAS
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
NORTHWEST OHIO MALL L.L.C.                                           DELAWARE
NS MALL GP LLC                                                       DELAWARE
NS MALL PROPERTY, LP                                                 DELAWARE
NSMJV, LP                                                            DELAWARE
O.M. INVESTMENT II LIMITED PARTNERSHIP                               MARYLAND
O.M. INVESTMENT LIMITED PARTNERSHIP                                  MARYLAND
O.M. LAND DEVELOPMENT, LLC                                           MARYLAND
O.M. MALL COMPANY, 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 GAINESVILLE II, INC.                                       DELAWARE
OAKS MALL GAINESVILLE LIMITED PARTNERSHIP                            DELAWARE
OAKWOOD HILLS MALL PARTNERS L.L.P.                                   WISCONSIN
OAKWOOD HILLS MALL, INC.                                             DELAWARE






                                                                        PLACE OF
ENTITY:                                                                FORMATION:
- -------                                                              -------------
                                                                  
OAKWOOD SHOPPING CENTER LIMITED PARTNERSHIP                          LOUISIANA
OGLETHORPE MALL L.L.C.                                               DELAWARE
OKLAHOMA MALL L.L.C.                                                 DELAWARE
OKLAHOMA MALL, INC.                                                  DELAWARE
ONE OWINGS MILLS CORPORATE CENTER ASSOCIATES LIMITED PARTNERSHIP     MARYLAND
ONE OWINGS MILLS CORPORATE CENTER, LLC                               MARYLAND
ONE WILLOW COMPANY, 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 SQUARE LIMITED PARTNERSHIP                                      MARYLAND
PARKE WEST, LLC                                                      DELAWARE
PARKS AT ARLINGTON, L.P.                                             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 HOLDING, LLC                                                     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
PIEDMONT MALL, LLC                                                   DELAWARE
PIERRE BOSSIER MALL, INC.                                            DELAWARE
PIERRE BOSSIER MALL, L.P.                                            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
PLANOLE STORE, LP                                                    TEXAS
PLYMOUTH MEETING PROPERTY LLC                                        DELAWARE






                                                                        PLACE OF
ENTITY:                                                                FORMATION:
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PRICE DEVELOPMENT COMPANY, LIMITED PARTNERSHIP                       MARYLAND
PRICE FINANCING PARTNERSHIP, L.P.                                    DELAWARE
PRICE GP L.L.C.                                                      DELAWARE
PRICE NT L.L.C.                                                      DELAWARE
PRICE SPOKANE LIMITED PARTNERSHIP                                    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
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
RII HOLDING, LLC                                                     TEXAS
RIO WEST L.L.C.                                                      DELAWARE
RIVER HILLS MALL L.L.P.                                              MINNESOTA
RIVERS PARK ABC, LLC                                                 DELAWARE
RIVERSPARK ASSOCIATES LIMITED PARTNERSHIP                            MARYLAND
ROCHESTER MALL 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 MASSACHUSETTS, LLC, THE                             MARYLAND
ROUSE COMPANY OF MICHIGAN, LLC, THE                                  MARYLAND
ROUSE COMPANY OF MINNESOTA, LLC, THE                                 MARYLAND
ROUSE COMPANY OF NEW JERSEY, LLC, THE                                NEW JERSEY
ROUSE COMPANY OF NEW YORK, LLC, THE                                  NEW YORK
ROUSE COMPANY OF OHIO, LLC, THE                                      OHIO
ROUSE COMPANY OF OREGON, LLC, THE                                    MARYLAND
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






                                                                        PLACE OF
ENTITY:                                                                FORMATION:
- -------                                                              -------------
                                                                  
ROUSE FASHION SHOW MANAGEMENT, LLC                                   MARYLAND
ROUSE HOLDING COMPANY OF ARIZONA, LLC, THE                           MARYLAND
ROUSE HOLDING LIMITED PARTNERSHIP                                    MARYLAND
ROUSE INVESTING COMPANY, LLC                                         MARYLAND
ROUSE LLC                                                            DELAWARE
ROUSE OAKBROOK, LLC                                                  DELAWARE
ROUSE OFFICE MANAGEMENT OF ARIZONA, LLC                              MARYLAND
ROUSE OFFICE MANAGEMENT OF OREGON, LLC                               MARYLAND
ROUSE OFFICE MANAGEMENT, LLC                                         MARYLAND
ROUSE OWINGS MILLS MANAGEMENT COMPANY, LLC                           MARYLAND
ROUSE PROVIDENCE LLC                                                 DELAWARE
ROUSE RIDGEDALE HOLDING, LLC                                         MARYLAND
ROUSE RIDGEDALE, LLC                                                 DELAWARE
ROUSE SI SHOPPING CENTER, LLC                                        MARYLAND
ROUSE SOUTHLAND, LLC                                                 MARYLAND
ROUSE TRANSPORTATION, LLC                                            MARYLAND
ROUSE TRI-PARTY MISCELLANEOUS, LLC                                   MARYLAND
ROUSE TRI-PARTY TRS, INC.                                            MARYLAND
ROUSE WESTIN, INC.                                                   MARYLAND
ROUSE-ABBEY, LLC                                                     MARYLAND
ROUSE-ARIZONA CENTER, LLC                                            MARYLAND
ROUSE-ARIZONA RETAIL CENTER LIMITED PARTNERSHIP                      MARYLAND
ROUSE-BRIDGEWATER COMMONS, LLC                                       MARYLAND
ROUSE-BURLINGTON, LLC                                                MARYLAND
ROUSE-EASTFIELD, LLC                                                 MARYLAND
ROUSE-FAIRWOOD DEVELOPMENT CORPORATION                               MARYLAND
ROUSE-FAIRWOOD DEVELOPMENT LIMITED PARTNERSHIP                       MARYLAND
ROUSE-GOVERNOR'S SQUARE, LLC                                         MARYLAND
ROUSE-HIGHLAND, LLC                                                  DELAWARE
ROUSE-MIAMI, LLC                                                     DELAWARE
ROUSE-MIZNER PARK, LLC                                               DELAWARE
ROUSE-NEW ORLEANS, LLC                                               MARYLAND
ROUSE-OAKWOOD SHOPPING CENTER, LLC                                   MARYLAND
ROUSE-ORLANDO, LLC                                                   DELAWARE
ROUSE-PARK MEADOWS HOLDING, LLC                                      MARYLAND
ROUSE-PARK MEADOWS, LLC                                              MARYLAND
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-PHOENIX TWO CORPORATE CENTER, LLC                              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





                                                                        PLACE OF
ENTITY:                                                                FORMATION:
- -------                                                              -------------
                                                                  
ROUSE-WEST DADE, INC.                                                MARYLAND
ROUSE-WESTLAKE LIMITED PARTNERSHIP                                   MARYLAND
ROUSE-WESTLAKE LIMITED PARTNERSHIP II                                DELAWARE
ROUSE-WINCOPIN, LLC                                                  MARYLAND
RREF HOLDING, LLC                                                    TEXAS
RS PROPERTIES INC.                                                   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
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
SIKES SENTER, L.P.                                                   DELAWARE
SILVER CITY GALLERIA L.L.C.                                          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
SOUTHLAKE MALL, INC.                                                 DELAWARE
SOUTHLAND CENTER HOLDING, LLC                                        MARYLAND
SOUTHLAND CENTER, LLC                                                DELAWARE
SOUTHLAND MALL, INC.                                                 DELAWARE
SOUTHLAND MALL, L.P.                                                 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
SPRING HILL MALL, INC.                                               DELAWARE
ST. CLOUD LAND L.L.C.                                                DELAWARE
ST. CLOUD MALL HOLDING L.L.C.                                        DELAWARE
ST. CLOUD MALL L.L.C.                                                DELAWARE
STERRETT BUILDING BUSINESS TRUST                                     MARYLAND
STONE LAKE CORPORATION                                               MARYLAND
STONEBRIAR ANCHOR ACQUISITION, LLC                                   DELAWARE
STONEBRIAR CENTRE ANCHOR ACQUISITION, LP                             DELAWARE
STONEBRIAR MALL (GP) L.L.C.                                          DELAWARE
STONEBRIAR MALL LIMITED PARTNERSHIP                                  DELAWARE
STONEBRIAR MALL, INC.                                                DELAWARE
STONESTOWN SHOPPING CENTER HOLDING L.L.C.                            DELAWARE
STONESTOWN SHOPPING CENTER L.L.C.                                    DELAWARE






                                                                        PLACE OF
ENTITY:                                                                FORMATION:
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STONESTOWN SHOPPING CENTER, L.P.                                     DELAWARE
SUMMERLIN CENTRE, LLC                                                DELAWARE
SUMMERLIN CORPORATION                                                DELAWARE
SUPERSTITION SPRINGS HOLDING, LLC                                    DELAWARE
SUPERSTITION SPRINGS, INC.                                           DELAWARE
TALLAHASSEE ASSOCIATES                                               MARYLAND
TDS CENTRO COMERCIAL LTDA.                                           BRAZIL
THC-HRE, LLC                                                         MARYLAND
THREE OWINGS MILLS CORPORATE CENTER ASSOCIATES LIMITED PARTNERSHIP   MARYLAND
THREE OWINGS MILLS CORPORATE CENTER LAND LIMITED PARTNERSHIP         MARYLAND
THREE OWINGS MILLS CORPORATE CENTER, 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, L.P.                                                 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 CENTRAL, LLC                                                     MARYLAND
TRC CO-ISSUER, INC.                                                  DELAWARE
TRC EXTON PLYMOUTH 12 LLC                                            DELAWARE
TRC EXTON PLYMOUTH 13 LLC                                            DELAWARE
TRC EXTON PLYMOUTH 14 LLC                                            DELAWARE
TRC EXTON PLYMOUTH 15 LLC                                            DELAWARE
TRC EXTON PLYMOUTH 16 LLC                                            DELAWARE
TRC EXTON PLYMOUTH 17 LLC                                            DELAWARE
TRC EXTON PLYMOUTH 18 LLC                                            DELAWARE
TRC EXTON PLYMOUTH 19 LLC                                            DELAWARE
TRC EXTON PLYMOUTH 20 LLC                                            DELAWARE
TRC EXTON PLYMOUTH 21 LLC                                            DELAWARE
TRC EXTON PLYMOUTH 22 LLC                                            DELAWARE
TRC EXTON PLYMOUTH 23 LLC                                            DELAWARE
TRC EXTON PLYMOUTH 24 LLC                                            DELAWARE
TRC EXTON PLYMOUTH 25 LLC                                            DELAWARE
TRC EXTON PLYMOUTH 26 LLC                                            DELAWARE
TRC EXTON PLYMOUTH 27 LLC                                            DELAWARE
TRC EXTON PLYMOUTH 28 LLC                                            DELAWARE
TRC EXTON PLYMOUTH 29 LLC                                            DELAWARE
TRC EXTON PLYMOUTH 30 LLC                                            DELAWARE
TRC EXTON PLYMOUTH 31 LLC                                            DELAWARE
TRC EXTON PLYMOUTH 32 LLC                                            DELAWARE
TRC EXTON PLYMOUTH 33 LLC                                            DELAWARE






                                                                        PLACE OF
ENTITY:                                                                FORMATION:
- -------                                                              -------------
                                                                  
TRC EXTON PLYMOUTH 34 LLC                                            DELAWARE
TRC EXTON PLYMOUTH 35 LLC                                            DELAWARE
TRC EXTON PLYMOUTH 36 LLC                                            DELAWARE
TRC EXTON PLYMOUTH 37 LLC                                            DELAWARE
TRC EXTON PLYMOUTH 38 LLC                                            DELAWARE
TRC EXTON PLYMOUTH 39 LLC                                            DELAWARE
TRC GALLERY AT MARKET EAST 1, LLC                                    DELAWARE
TRC GALLERY AT MARKET EAST 10, LLC                                   DELAWARE
TRC GALLERY AT MARKET EAST 11, LLC                                   DELAWARE
TRC GALLERY AT MARKET EAST 12, LLC                                   DELAWARE
TRC GALLERY AT MARKET EAST 13, LLC                                   DELAWARE
TRC GALLERY AT MARKET EAST 14, LLC                                   DELAWARE
TRC GALLERY AT MARKET EAST 15, LLC                                   DELAWARE
TRC GALLERY AT MARKET EAST 16, LLC                                   DELAWARE
TRC GALLERY AT MARKET EAST 17, LLC                                   DELAWARE
TRC GALLERY AT MARKET EAST 18, LLC                                   DELAWARE
TRC GALLERY AT MARKET EAST 19, LLC                                   DELAWARE
TRC GALLERY AT MARKET EAST 2, LLC                                    DELAWARE
TRC GALLERY AT MARKET EAST 20, LLC                                   DELAWARE
TRC GALLERY AT MARKET EAST 21, LLC                                   DELAWARE
TRC GALLERY AT MARKET EAST 22, LLC                                   DELAWARE
TRC GALLERY AT MARKET EAST 23, LLC                                   DELAWARE
TRC GALLERY AT MARKET EAST 24, LLC                                   DELAWARE
TRC GALLERY AT MARKET EAST 25, LLC                                   DELAWARE
TRC GALLERY AT MARKET EAST 26, LLC                                   DELAWARE
TRC GALLERY AT MARKET EAST 27, LLC                                   DELAWARE
TRC GALLERY AT MARKET EAST 28, LLC                                   DELAWARE
TRC GALLERY AT MARKET EAST 29, LLC                                   DELAWARE
TRC GALLERY AT MARKET EAST 3, LLC                                    DELAWARE
TRC GALLERY AT MARKET EAST 30, LLC                                   DELAWARE
TRC GALLERY AT MARKET EAST 31, LLC                                   DELAWARE
TRC GALLERY AT MARKET EAST 32, LLC                                   DELAWARE
TRC GALLERY AT MARKET EAST 33, LLC                                   DELAWARE
TRC GALLERY AT MARKET EAST 34, LLC                                   DELAWARE
TRC GALLERY AT MARKET EAST 35, LLC                                   DELAWARE
TRC GALLERY AT MARKET EAST 36, LLC                                   DELAWARE
TRC GALLERY AT MARKET EAST 37, LLC                                   DELAWARE
TRC GALLERY AT MARKET EAST 38, LLC                                   DELAWARE
TRC GALLERY AT MARKET EAST 39, LLC                                   DELAWARE
TRC GALLERY AT MARKET EAST 4, LLC                                    DELAWARE
TRC GALLERY AT MARKET EAST 5, LLC                                    DELAWARE
TRC GALLERY AT MARKET EAST 6, LLC                                    DELAWARE
TRC GALLERY AT MARKET EAST 7, LLC                                    DELAWARE
TRC GALLERY AT MARKET EAST 8, LLC                                    DELAWARE
TRC GALLERY AT MARKET EAST 9, LLC                                    DELAWARE
TRC NJ HOLDING, LP                                                   DELAWARE
TRC PARKING BUSINESS TRUST                                           MARYLAND
TRC PROPERTY HOLDINGS, INC.                                          MARYLAND






                                                                        PLACE OF
ENTITY:                                                                FORMATION:
- -------                                                              -------------
                                                                  
TRC WILLOW, LLC                                                      MARYLAND
TRIANGLE BUSINESS CENTER I LIMITED PARTNERSHIP                       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 HOLDINGS, INC.                                         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 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
U.K.-LASALLE, 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 RIDGE JOINT VENTURE, L.P.                                      DELAWARE
VISTA RIDGE MALL, INC.                                               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






                                                                        PLACE OF
ENTITY:                                                                FORMATION:
- -------                                                              -------------
                                                                  
WEST KENDALL HOLDINGS, LLC                                           MARYLAND
WEST OAKS MALL TRUST                                                 DELAWARE
WESTCOAST ESTATES                                                    CALIFORNIA
WESTLAKE CENTER ASSOCIATES LIMITED PARTNERSHIP                       WASHINGTON
WESTLAKE RETAIL ASSOCIATES, LTD.                                     TEXAS
WESTROADS LAND L.L.C.                                                DELAWARE
WESTROADS MALL II, INC.                                              DELAWARE
WESTROADS MALL L.L.C.                                                DELAWARE
WESTWOOD LAND L.L.C.                                                 DELAWARE
WESTWOOD MALL LIMITED PARTNERSHIP                                    DELAWARE
WHITE MARSH GENERAL PARTNERSHIP                                      MARYLAND
WHITE MARSH LIMITED PARTNERSHIP                                      MARYLAND
WHITE MARSH MALL ASSOCIATES                                          MARYLAND
WHITE MARSH MALL, LLC                                                MARYLAND
WHITE MARSH PHASE II ASSOCIATES                                      MARYLAND
WILLOW SPE, LLC                                                      DELAWARE
WILLOWBROOK COMPANY, LLC, THE                                        MARYLAND
WILLOWBROOK II, LLC                                                  MARYLAND
WILLOWBROOK MALL, LLC                                                DELAWARE
WINCOPIN RESTAURANT BUSINESS TRUST                                   MARYLAND
WOODBRIDGE CENTER PROPERTY, LLC                                      DELAWARE
WOODBRIDGE CENTER, LLC                                               MARYLAND
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 HOLDING HOTEL, LP, THE                                     TEXAS
WOODLANDS HOTEL GP, LLC, THE                                         DELAWARE
WOODLANDS HOTEL, LP, THE                                             TEXAS
WOODLANDS LAND DEVELOPMENT CO., LP, THE                              TEXAS
WOODLANDS MALL ASSOCIATES, LP, THE                                   DELAWARE
WOODLANDS OFFICE EQUITIES-95, LTD.                                   TEXAS
WOODLANDS OPERATING COMPANY, L.P., THE                               TEXAS
WOODLANDS VTO 2000 COMMERCIAL, GP, LLC                               TEXAS
WOODLANDS VTO 2000 COMMERCIAL, LP                                    TEXAS
WV SUB, LLC                                                          DELAWARE
YANGON PARTICIPACOES LTDA.                                           BRAZIL
ZARATUSTRA PARTICIPACEOS LTDA.                                       BRAZIL

EX-23.1

                                                                    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, and 333-139349 on Form
S-3 and Registration Statement Nos. 333-07241, 333-11237, 333-28449, 333-74461,
333-79737, 333-105882, 333-125605, and 333-135118 on Form S-8 of our reports
dated February 28, 2007, relating to the consolidated financial statements and
consolidated financial statement schedule of General Growth Properties, Inc. and
subsidiaries and management's report on the effectiveness of 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, 2006.

Deloitte & Touche LLP

Chicago, Illinois
February 28, 2007

EX-23.2

                                                                   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, 333-17021, 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, and
333-120373) on Form S-3 and the registration statements (Nos. 33-79372,
333-07241, 333-11237, 333-28449, 333-74461, 333-79737, 333-105882, and
333-125605) 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 27, 2007,
with respect to the consolidated balance sheets of GGP/Homart II L.L.C. and
subsidiaries as of December 31, 2006 and 2005, 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,
2006, and our report dated February 27, 2007, with respect to the consolidated
balance sheets of GGP - TRS L.L.C. and subsidiaries as of December 31, 2006 and
2005, and the related consolidated statements of operations, changes in members'
capital and cash flows for the years then ended, which reports appear in the
December 31, 2006 annual report on Form 10-K of General Growth Properties, Inc.


KPMG LLP


Chicago, Illinois
February 27, 2007

EX-31.1

EXHIBIT 31.1

CERTIFICATION OF CHIEF EXECUTIVE OFFICER PURSUANT TO SECTION 302
OF THE SARBANES-OXLEY ACT OF 2002

I, John Bucksbaum, certify that:

1. I have reviewed this annual report on Form 10-K of General Growth Properties, Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of registrant’s board of directors (or persons performing the equivalent functions):

a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

/s/  John Bucksbaum

John Bucksbaum

Chief Executive Officer

Date: February 28, 2007

EX-31.2

EXHIBIT 31.2

CERTIFICATION OF CHIEF FINANCIAL OFFICER PURSUANT TO SECTION 302
OF THE SARBANES-OXLEY ACT OF 2002

I, Bernard Freibaum, certify that:

1. I have reviewed this annual report on Form 10-K of General Growth Properties, Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of registrant’s board of directors (or persons performing the equivalent functions):

a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

/s/  Bernard Freibaum

Bernard Freibaum

Executive Vice President and

Chief Financial Officer

Date: February 28, 2007

EX-32.1

EXHIBIT 32.1

CERTIFICATION OF CHIEF EXECUTIVE OFFICER PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Annual Report of General Growth Properties, Inc. (the “Company”) on Form 10-K for the period ending December 31, 2006, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, John Bucksbaum, in my capacity as Chief Executive Officer of the Company, do hereby certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:

(1) The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

/s/  John Bucksbaum

John Bucksbaum

Chief Executive Officer

February 28, 2007

EX-32.2

EXHIBIT 32.2

CERTIFICATION OF CHIEF FINANCIAL OFFICER PURSUANT
TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Annual Report of General Growth Properties, Inc. (the “Company”) on Form 10-K for the period ending December 31, 2006, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Bernard Freibaum, in my capacity as Chief Financial Officer of the Company, do hereby certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:

(1) The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

/s/  Bernard Freibaum

Bernard Freibaum

Chief Financial Officer

February 28, 2007

EX-99.1

EXHIBIT 99.1

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

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

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

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

MANAGEMENT'S OVERVIEW AND SUMMARY

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

Our Retail and Other segment includes retail or mixed-use centers, and office
buildings (the "Consolidated Retail Properties") and interests in retail or
mixed-use properties, and office buildings through investments in Unconsolidated
Real Estate Affiliates (the "Unconsolidated Retail Properties"). For the
purposes of this report, 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.


                                      T-1


MANAGEMENT'S DISCUSSION OF TRCLP OPERATIONS AND LIQUIDITY

REVENUES

Tenant rents (which includes minimum rents, tenant recoveries, and overage
rents) increased in 2006 primarily due to increased rents of approximately $12.2
million from The Shops at La Cantera which opened in September 2005. In
addition, tenant rents increased at various properties primarily due to
increased occupancy and rental rates as compared to 2005. Lease termination
income increased approximately $2.9 million from 2005. Such amounts are normally
negotiated based on amounts remaining to be collected on the terminated leases.
As a result, lease termination income represents an acceleration, rather than an
increase, in revenues collected on such leases. Management and other fees
increased $4.1 million in 2006 primarily due to higher development fees. Land
sales revenue increased by $39.3 million in 2006 primarily due to increased
sales at our Summerlin operation.

OPERATING EXPENSES

     Real estate taxes increased approximately $4.3 million in 2006 due to
increased property taxes at certain properties, including The Shops at La
Cantera. Property operating and marketing costs decreased and property
management and other costs increased primarily as a result of lower allocations
of costs to our operating properties in 2006. Additionally, property operating
costs decreased due to lower legal and insurance costs in 2006. Real estate
taxes, repairs and maintenance and other property operating expenses are
generally recoverable from tenants, either specifically as allocated cost
recovery charges or in the form of fixed or calculated occupancy charges, and,
therefore, the changes in these expenses are generally consistent with the
changes in tenant recovery revenues. The provision for doubtful accounts
increased $11.0 million in 2006 which is primarily due to Oakwood Center, which
was damaged in the third quarter of 2005 (Note 14).

NET INCOME (LOSS)

Interest expense increased as a result of higher interest rates and higher
outstanding debt balances. The increase in the provision for income taxes is
attributable to higher pre-tax book income subject to taxes at our TRS entities,
especially at the properties included in our Master Planned Communities segment.
The increase in the provision for income taxes is more significant than the
increase in net operating income generated by this segment as certain expenses,
including participation expense, are not deductible for tax purposes and the tax
basis of properties sold is, generally, significantly lower than the cost of
properties sold for financial reporting purposes. Equity in income of
unconsolidated affiliates increased as a result of gains recognized related to
property sales in 2006 by our unconsolidated joint ventures.

CASH POSITION AT DECEMBER 31, 2006

TRCLP's cash and cash equivalents decreased $8.7 million to $64.6 million as of
December 31, 2006 as compared to December 31, 2005. The cash position of TRCLP
is largely determined at any point in time by the relative short-term needs for
cash by TRCLP and GGP. Advances to GGP by TRCLP increased in
2006, which is primarily due to $800.0 million from the sale of bonds by TRCLP,
the proceeds of which were distributed to GGP. TRCLP expects to
remain current with respect to its debt obligations and be able to access
additional funds as required from GGP.


                                      T-2




                              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

Reports of Independent Registered Public Accounting Firms                                                    T-4
Consolidated Balance Sheets as of December 31, 2006 and 2005                                                 T-6
Consolidated Statements of Operations and Comprehensive Income (Loss) for the Years
     Ended December 31, 2006 and 2005, and the periods January 1, 2004 through
     November 12, 2004 and November 13, 2004 through December 31, 2004                                       T-7
Consolidated Statements of Changes in Equity/Partners' Capital for the Years
     Ended December 31, 2006 and 2005, and the periods January 1, 2004 through November
     12, 2004 and November 13, 2004 through December 31, 2004                                                T-8
Consolidated Statements of Cash Flows for the Years Ended December 31, 2006 and
     2005, and the periods January 1, 2004 through November 12, 2004 and November
     13, 2004 through December 31, 2004                                                                      T-9
Notes to Consolidated Financial Statements                                                                  T-11
     Note 1       Organization                                                                              T-11
     Note 2       Summary of Significant Accounting Policies                                                T-11
     Note 3       Purchase Accounting Due to the Merger                                                     T-17
     Note 4       Discontinued Operations and Gains (Losses)  on Dispositions of
                  Interests in Operating Properties                                                         T-19
     Note 5       Unconsolidated Real Estate Affiliates                                                     T-20
     Note 6       Mortgage Notes and Other Property Debt Payable                                            T-23
     Note 7       Income Taxes                                                                              T-23
     Note 8       Rentals under Operating Leases                                                            T-25
     Note 9       Transactions with Affiliates                                                              T-26
     Note 10      Stock-Based Compensation Plans                                                            T-26
     Note 11      Pension, Post-Retirement and Deferred Compensation Plans                                  T-26
     Note 12      Other Provisions and Losses, Net                                                          T-28
     Note 13      Other Assets and Liabilities                                                              T-29
     Note 14      Commitments and Contingencies                                                             T-29
     Note 15      Recently Issued Accounting Pronouncements                                                 T-31



                                      T-3



             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, 2006 and 2005,
and the related consolidated statements of operations and comprehensive income
(loss), partners' capital and cash flows for the years ended December 31, 2006
and 2005 and the period November 13, 2004 through December 31, 2004. These
consolidated financial statements are the responsibility of the Company's
management. Our responsibility is to express an opinion on these consolidated
financial statements based on our audits. The consolidated financial statements
of the Company for the period January 1, 2004 through November 12, 2004 were
audited by other auditors whose report, dated April 17, 2006, expressed an
unqualified opinion on those statements.

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 financial statements present fairly, in all material
respects, the financial position of The Rouse Company LP and subsidiaries at
December 31, 2006 and 2005, and the results of their operations and their cash
flows for the years ended December 31, 2006 and 2005 and the period November 13,
2004 through December 31, 2004, in conformity with accounting principles
generally accepted in the United States of America.

Deloitte & Touche LLP

Chicago, Illinois
February 28, 2007


                                        T-4



             REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM



The Partners
The Rouse Company LP:


We have audited the consolidated statements of operations and comprehensive
income (loss), changes in equity/partners capital, and cash flows of The Rouse
Company LP and subsidiaries for the period January 1, 2004 through November 12,
2004. These consolidated financial statements are the responsibility of the
partnership's management. Our responsibility is to express an opinion on these
consolidated financial statements based on our audit.

     We conducted our audit 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. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures in
the financial statements. An audit also includes assessing the accounting
principles used and significant estimates made by management, as well as
evaluating the overall financial statement presentation. We believe that our
audit provides a reasonable basis for our opinion.

In our opinion, the consolidated financial statements referred to above present
fairly, in all material respects, the results of operations and cash flows for
the period January 1, 2004 through November 12, 2004, of The Rouse Company LP
and subsidiaries in conformity with U.S. generally accepted accounting
principles.

KPMG LLP

Baltimore, Maryland
April 17, 2006

                                        T-5





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



                                                                                                        December 31,
                                                                                             -----------------------------------
                                                                                                  2006                2005
                                                                                             ---------------     ---------------
ASSETS:                                                                                            (Dollars in thousands)
                                                                                                       
Investment in real estate:
      Land                                                                                $       1,348,939   $       1,263,288
      Buildings and equipment                                                                     8,338,449           8,370,635
      Less accumulated depreciation                                                               (665,982)           (357,859)
      Developments in progress                                                                      224,795             203,027
                                                                                             ---------------     ---------------
         Net property and equipment                                                               9,246,201           9,479,091
      Investment in and loans to/from Unconsolidated Real Estate Affiliates                       1,176,478           1,192,976
      Investment land and land held for development and sale                                      1,655,838           1,651,063
                                                                                             ---------------     ---------------
         Net investment in real estate                                                           12,078,517          12,323,130
Cash and cash equivalents                                                                            64,648              73,374
Accounts and notes receivable, net                                                                  102,723              88,142
Insurance recovery receivable                                                                        14,952              63,382
Goodwill                                                                                            371,674             420,624
Deferred expenses, net                                                                               67,936              51,607
Prepaid expenses and other assets                                                                   664,893             814,872
                                                                                             ---------------     ---------------
                Total assets                                                              $      13,365,343   $      13,835,131
                                                                                             ===============     ===============

LIABILITIES AND PARTNERS' CAPITAL:
Mortgage notes and other property debt payable                                            $       7,299,832   $       6,503,073
Deferred tax liabilities                                                                          1,302,205           1,286,576
Accounts payable and accrued expenses                                                               532,483             591,679
                                                                                             ---------------     ---------------
                                                                                                  9,134,520           8,381,328
                                                                                             ---------------     ---------------

Commitments and contingencies                                                                            --                  --

Partners' capital:
      Partners' capital                                                                           7,075,170           7,191,001
      Accumulated other comprehensive income (loss)                                                     (9)                 877
                                                                                             ---------------     ---------------
         Total partners' capital, before receivable from General Growth Properties,
         Inc.                                                                                     7,075,161           7,191,878
      Receivable from General Growth Properties, Inc.                                           (2,844,338)         (1,738,075)
                                                                                             ---------------     ---------------
         Total partners' capital                                                                  4,230,823           5,453,803
                                                                                             ---------------     ---------------
                Total liabilities and partners' capital                                  $       13,365,343   $      13,835,131
                                                                                             ===============     ===============


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


                                        T-6



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



                                                                   Post-Merger basis                             Pre-Merger basis
                                              -------------------------------------------------------------      -----------------
                                                Year ended           Year ended            For the period          For the period
                                               December 31,         December 31,        November 13 through       January 1 through
                                                   2006                 2005             December 31, 2004        November 12, 2004
                                              ----------------     ----------------     -------------------      -----------------
                                                                                                     
Revenues:
     Minimum rents                            $       650,866      $       622,766      $           84,893       $        478,662
     Tenant recoveries                                285,836              288,676                  33,792                216,099
     Overage rents                                     16,686               16,412                   3,293                  9,392
     Land sales                                       424,516              385,205                  66,436                281,640
     Management and other fees                         17,306               13,256                   2,293                 12,093
     Other                                             50,014               46,693                   7,541                 37,474
                                              ----------------     ----------------     -------------------      -----------------
        Total revenues                              1,445,224            1,373,008                 198,248              1,035,360
                                              ----------------     ----------------     -------------------      -----------------
Expenses:
     Real estate taxes                                 82,948               78,615                   9,878                 64,078
     Repairs and maintenance                           80,741               81,013                  10,533                 57,986
     Marketing                                         10,965               19,132                   1,388                  6,200
     Other property operating expenses                153,032              190,967                  23,711                160,370
     Land sales operations                            316,453              311,815                  63,767                167,769
     Property management and other costs               74,775               55,161                   5,642                 47,798
     Provision for doubtful accounts                   17,368                6,357                      --                 13,060
     Depreciation and amortization                    325,028              323,367                  34,895                159,629
     Other provisions and losses, net                      --                   --                      --                133,271
                                              ----------------     ----------------     -------------------      -----------------
        Total expenses                              1,061,310            1,066,427                 149,814                810,161
                                              ----------------     ----------------     -------------------      -----------------
     OPERATING INCOME                                 383,914              306,581                  48,434                225,199

Interest income                                         5,338                7,363                   2,260                  8,257
Interest expense                                    (339,915)            (259,927)                (34,565)              (215,072)
Gains on dispositions of interests in
  operating properties                                    --                   --                      --                 14,100
                                              ----------------     ----------------     -------------------      -----------------
     INCOME BEFORE INCOME TAXES,
        MINORITY INTERESTS AND EQUITY IN
         INCOME OF UNCONSOLIDATED
         AFFILIATES                                   49,337               54,017                  16,129                 32,484
Provision for income taxes                           (82,915)             (48,931)                 (1,992)               (63,941)
Minority interests                                    (4,642)              (1,474)                   (562)                (3,152)
Equity in income of unconsolidated
 affiliates                                           37,367               22,104                     749                 22,265
                                              ----------------     ----------------     -------------------      -----------------
     INCOME (LOSS) FROM CONTINUING
       OPERATIONS                                       (853)               25,716                  14,324               (12,344)
Discontinued operations                               (1,003)               14,317                     983                 52,390
                                              ----------------     ----------------     -------------------      -----------------
     NET INCOME (LOSS)                                (1,856)               40,033                  15,307                 40,046
Other items of comprehensive income
  (loss):
     Minimum pension liability
       adjustment                                         --                   --                      --                  4,159
     Unrealized gains (losses) on
       available-for-sale securities                    (328)                 (82)                      89                   (54)
     Net unrealized gains (losses) on
       financial instruments                            (558)                  870                      --                  3,110
                                              ----------------     ----------------     -------------------      -----------------
     Total other comprehensive income
       (loss)                                           (886)                  788                      89                  7,215
                                              ----------------     ----------------     -------------------      -----------------
COMPREHENSIVE INCOME (LOSS), NET              $       (2,742)      $        40,821      $           15,396       $         47,261
                                              ================     ================     ===================      =================


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


                                        T-7



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



                                                                                                      Receivable
                                                                                                          from
                                                                       Accumulated     Accumulated      General
                                 Series B                Additional      deficit/         other         Growth
                                 Preferred   Common        paid-in      Partners'     comprehensive   Properties,
                                   stock      stock        capital       Capital      income (loss)      Inc.            Total
                                 ----------  ---------   ------------  -------------  --------------  ------------  ------------
                                                           (Dollars in thousands, except per share amounts)
                                                                                               
PRE-MERGER BASIS:
BALANCE AT JANUARY 1, 2004              41        918      1,346,890       (10,991)        (11,894)            --     1,324,964

Net income                              --         --             --         40,046              --            --        40,046
Other comprehensive income              --         --             --             --           7,215            --         7,215
Dividends declared:
     Common stock - $4.00 per
       share                            --         --             --      (413,175)              --            --     (413,175)
Conversion of preferred stock         (41)         53           (12)             --              --            --            --
Tax benefit from stock options          --         --         14,928             --              --            --        14,928
Purchases of common stock               --        (7)       (31,110)             --              --            --      (31,117)
Common stock issued pursuant to
     Contingent Stock Agreement         --         12         51,806             --              --            --        51,818
Proceeds from exercise of
  stock options                         --         14         31,630             --              --            --        31,644
Other common stock issuances            --         46        221,871             --              --            --       221,917
Lapses of restrictions on
     common stock awards and
     other                              --          1          6,340             --              --            --         6,341
                                 ----------  ---------   ------------  -------------  --------------  ------------  ------------

BALANCE AT NOVEMBER 12, 2004     $      --   $  1,037    $ 1,642,343   $  (384,120)   $     (4,679)   $        --   $ 1,254,581
                                 ==========  =========   ============  =============  ==============  ============  ============

- --------------------------------------------------------------------------------------------------------------------------------

POST-MERGER BASIS:
BALANCE AT NOVEMBER 13, 2004     $      --   $  1,037    $ 1,642,343   $  (384,120)   $     (4,679)   $        --   $ 1,254,581

Net income                              --         --             --         15,307              --            --        15,307
Other comprehensive income              --         --             --             --              89            --            89
Cancellation of common stock            --    (1,037)    (1,642,343)      1,643,380              --            --            --
Receivable from General Growth
  Properties, Inc.                      --         --             --             --              --     (650,876)     (650,876)
Net capital contributions               --         --             --      5,875,334           4,679            --     5,880,013
                                 ----------  ---------   ------------  -------------  --------------  ------------   ------------
BALANCE AT DECEMBER 31, 2004            --         --             --      7,149,901              89     (650,876)     6,499,114

Net income                              --         --             --         40,033              --            --        40,033
Other comprehensive income              --         --             --             --             788            --           788
Receivable from General Growth
  Properties, Inc.                      --         --             --             --              --   (1,087,199)   (1,087,199)
Tax benefit from stock options          --         --             --          1,067              --            --         1,067
                                 ----------  ---------   ------------  -------------  --------------  ------------  ------------
BALANCE AT DECEMBER 31, 2005            --         --             --      7,191,001             877   (1,738,075)     5,453,803

Net loss                                --         --             --        (1,856)              --            --       (1,856)
Other comprehensive loss                --         --             --             --           (886)            --         (886)
Distribution of Augusta Mall
     to General Growth
     Properties, Inc.                   --         --             --      (113,965)              --            --     (113,965)
Receivable from General Growth
  Properties, Inc.                      --         --             --             --              --   (1,106,263)   (1,106,263)
Tax expense from stock options          --         --             --           (10)              --            --          (10)
                                 ----------  ---------   ------------  -------------  --------------  ------------  ------------
BALANCE AT DECEMBER 31, 2006     $      --   $     --    $        --   $  7,075,170   $         (9)   $(2,844,338)  $  4,230,823
                                 ==========  =========   ============  =============  ==============  ============  ============


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


                                        T-8



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



                                                                    Post-Merger basis                              Pre-Merger basis
                                             -----------------------------------------------------------------     -----------------
                                               Year ended           Year ended             For the period           For the period
                                              December 31,         December 31,         November 13 through        January 1 through
                                                  2006                 2005              December 31, 2004         November 12, 2004
                                             ----------------     ----------------     -----------------------     -----------------
                                                                                                       
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income (loss)                            $        (1,856)     $        40,033      $               15,307      $         40,046
Adjustments to reconcile net income (
   loss) to net cash provided by
   operating activities:
  Depreciation and amortization,
   including discontinued operations                 328,684              330,375                      36,534               166,392
  Merger-related market rate adjustment
   amortization                                      (31,149)             (46,098)                       (255)                   --
  Equity in income of unconsolidated real
   estate affiliates                                 (37,367)             (22,104)                       (749)              (22,265)
  Operating distributions received from
   unconsolidated real estate affiliates              40,283               22,104                         749                22,265
  Net losses (gains) on dispositions of
   interests in operating properties                   1,003               (6,249)                         --               (59,313)
  Impairment losses on operating
   properties and other assets                            --                   --                          --                   432
  Losses (gains) on extinguishment of
   debt                                               (3,487)                (267)                         --                 8,018
  Participation expense pursuant to
   Contingent Stock Agreement                        110,740              106,285                       8,513                54,166
  Land development and acquisition
   expenditures                                     (184,302)            (140,823)                    (27,563)             (141,893)
  Cost of land sales                                 175,184              181,301                      51,659                94,764
  Provision for doubtful accounts,
   including discontinued operations                  17,368                6,365                          --                13,026
  Debt assumed by purchasers of land                  (5,640)             (11,371)                       (318)               (6,385)
  Deferred income taxes                               53,469               26,945                       1,595                63,675
  Proceeds from the sale of marketable
   securities, including defined
   contribution plan assets                               --               27,740                       7,954                    --
  Straight-line rent amortization                    (19,328)             (19,526)                     (1,560)                   --
  Above and below market lease
   amortization                                       (9,574)              (6,192)                       (364)                   --
  Other intangible amortization                        7,567               11,242                       1,650                    --
  Decrease (increase) in accounts and
   notes receivable                                  (17,912)             (40,965)                     36,335               (39,033)
  Decrease (increase) in other assets                  8,742              (84,998)                     (1,827)               24,941
  Increase (decrease) in accounts
   payable, accrued expenses and
   other liabilities                                 (24,675)              70,240                    (117,249)               23,952
  Other, net                                           1,736                1,304                      (7,597)               (1,024)
                                             ----------------     ----------------     -----------------------     -----------------
Net cash provided by operating activities            409,486              445,341                       2,814               241,764
                                             ----------------     ----------------     -----------------------     -----------------

CASH FLOWS FROM INVESTING ACTIVITIES:
Acquisition/development of real estate
   and improvements and additions to
   properties                                       (167,671)            (161,241)                    (21,598)             (505,721)
Proceeds from sale of investment
   properties                                         23,117              143,543                      10,380                95,967
Distributions received from
   unconsolidated real estate affiliates
   in excess of income                                27,099               45,032                      58,712                49,887
Increase in investments in unconsolidated
   real estate affiliates                            (24,436)             (15,481)                     (5,083)               (9,844)
Change in restricted cash                             12,036              (17,853)                      2,711                (4,992)
Collection of long-term notes receivable               4,822               15,374                          --                    --
Insurance recoveries                                  28,359                5,000                          --                    --
Other, net                                             7,249                5,515                         694                  (832)
                                             ----------------     ----------------     -----------------------     -----------------
     Net cash (used in) provided
      by investing activities                        (89,425)              19,889                      45,816              (375,535)
                                             ----------------     ----------------     -----------------------     -----------------


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


                                        T-9



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



                                                                      Post-Merger basis                             Pre-Merger basis
                                               -------------------------------------------------------------      ------------------
                                                 Year ended         Year ended           For the period            For the period
                                                December 31,       December 31,       November 13 through         January 1 through
                                                    2006               2005            December 31, 2004          November 12, 2004
                                               ----------------   ----------------   -----------------------      ------------------
                                                                                                      
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from issuance of property debt              1,742,683          1,922,254                 1,330,676               1,089,466
Principal payments on mortgages, notes
  and other property debt payable                     (863,712)        (1,157,045)                 (724,837)               (763,778)
Advances to General Growth Properties, Inc.         (1,189,806)        (1,153,181)                 (650,876)                     --
Purchases of The Rouse Company-obligated
  mandatorily redeemable preferred
  securities                                                --                 --                        --                 (79,751)
Purchases of common stock                                   --                 --                        --                 (31,117)
Proceeds from issuance of common stock                      --                 --                        --                 221,917
Proceeds from exercise of stock options                     --                 --                        --                  31,644
Dividends paid                                              --                 --                        --                (413,175)
Deferred financing and other related costs              (9,581)            (3,765)                   (2,092)                     --
Distributions to minority interest
  partners of excess financing proceeds                     --            (26,816)                       --                      --
Other, net                                              (8,371)            (3,499)                     (382)                 (9,588)
                                               ----------------   ----------------   -----------------------      ------------------
     Net cash provided (used) by
      financing activities                            (328,787)          (422,052)                  (47,511)                 45,618
                                               ----------------   ----------------   -----------------------      ------------------
     Net change in cash and cash
      equivalents                                       (8,726)            43,178                     1,119                 (88,153)
Cash and cash equivalents at beginning of
  period                                                73,374             30,196                    29,077                 117,230
                                               ----------------   ----------------   -----------------------      ------------------
Cash and cash equivalents at end of period     $        64,648    $        73,374    $               30,196       $          29,077
                                               ================   ================   =======================      ==================

SUPPLEMENTAL DISCLOSURE OF CASH FLOW
  Information:
     Interest paid                             $       409,247    $       305,680    $               43,146       $         194,058
     Interest capitalized                               46,075             46,198                     3,528                  33,255
     Income taxes paid                                  32,435              7,358                        --                  19,262

SCHEDULE OF NONCASH INVESTING AND
  Financing Activities:
     Common stock issued                       $            --    $            --    $                   --       $          51,818
     Capital lease obligations incurred                     --                 --                        --                   3,704
     Transfer of deferred compensation
       and retirement accounts from TRCLP
       to GGMI                                          20,062                 --                        --                      --
     Distribution of Augusta Mall from
       TRCLP to GGPLP                                  113,965                 --                        --                      --
     Tax benefit (expense) related to
       nonqualified stock options exercised                (10)             1,067                        --                  14,928
     Lapses of restrictions on common stock
       awards and other                                     --                 --                        --                   6,341
     Debt assumed by purchasers of land and
       other assets                                      5,640             11,371                       318                   6,385
     Debt assumed by purchasers of operating
       properties                                           --                 --                        --                 130,787
     Debt and other liabilities assumed or
       issued in other acquisitions of assets               --                 --                        --                 400,744
     Purchase price adjustments related to
      Merger:
     Land                                                   --             (2,720)                       --                      --
     Building and equipment                                 --            (24,808)                       --                      --
     Development in progress                                --            (52,904)                       --                      --
     Investment in Unconsolidated Real
      Estate Affiliates                                     --             49,203                        --                      --
     Mortgage notes and other debt payable                  --             35,862                        --                      --


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


                                        T-10

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



NOTE 1     ORGANIZATION

GENERAL

The consolidated financial statements include the accounts of The Rouse Company
LP (the successor to The Rouse Company), ("TRC"), our subsidiaries and ventures
("we," "TRCLP" or "us") in which we have a controlling interest. Through our
subsidiaries and affiliates, we acquire, develop and manage operating properties
located throughout the United States and develop and sell land for residential,
commercial and other uses primarily in master planned communities. The operating
properties consist of retail centers, office and industrial buildings and
mixed-use and other properties. The retail centers are primarily regional
shopping centers in suburban market areas, but also include specialty
marketplaces in certain downtown areas and several community retail centers. The
office and industrial properties are located primarily in the
Baltimore-Washington and Las Vegas markets or are components of large-scale
mixed-use properties (which include retail, parking and other uses) located in
other urban markets. Land development and sales operations are predominantly
related to large scale, long-term community development projects in and around
Columbia, Maryland; Summerlin, Nevada; and Houston, Texas.

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

MERGER WITH GENERAL GROWTH PROPERTIES, INC.

On August 19, 2004, TRC executed a definitive merger agreement, which was
approved by TRC's Board of Directors, with General Growth Properties, Inc.
("GGP"). On November 9, 2004, TRC's shareholders approved the merger (the
"Merger"). On November 12, 2004, the Merger was completed and TRC was merged
with and into us. A subsidiary of GGP was then merged with and into us and
through a series of transactions, we were converted to a limited partnership and
a subsidiary of GGP.

Typically, the effects of a merger transaction are reflected on the date of the
transaction in the financial statements of the acquired company by adjusting its
basis of assets and liabilities to their fair values in order to reflect the
purchase price paid in the acquisition. However, there are certain exceptions
(related to the presence of public debt that is qualitatively or quantitatively
significant) to this requirement that would allow a company to elect to not
apply this general practice. Accordingly, we had elected to not reflect these
purchase accounting adjustments in our consolidated financial statements that
were previously prepared and filed with the Securities and Exchange Commission
("SEC") for 2004.

However, in 2005, we reflected these purchase accounting adjustments in our
consolidated financial statements, and the consolidated balance sheet for
December 31, 2004 was adjusted. The adjustments are reflected in our
consolidated financial statements in 2004 from the date of the Merger.
Accordingly, operations for 2004 have been split between periods prior to, and
subsequent to, the Merger. Operations subsequent to the Merger have been
presented on a purchase price-adjusted basis (Note 3). As a result, a single
underlying set of information can be used for both our and GGP's consolidated
financial statements.


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.



                                      T-11



PROPERTIES

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

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.

Our real estate assets, including developments in progress, are reviewed for
impairment whenever events or changes in circumstances indicate that the
carrying value may not be recoverable. A real estate asset is considered to be
impaired when the estimated future undiscounted operating cash flow is less than
its carrying value. To the extent an impairment has occurred, the excess of
carrying value of the asset over its estimated fair value will be charged to
operations.

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


ACQUISITIONS OF OPERATING PROPERTIES

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

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

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

Intangible assets and liabilities are also recorded for above-market and
below-market in-place tenant and ground leases where we are either the lessor or
the lessee. Above-market and below-market in-place tenant and ground lease
values are recorded based on the present value (using an interest rate which
reflects the risks associated with the leases acquired) of the difference
between the contractual amounts to be received or paid pursuant to the in-place


                                      T-12


leases and our estimate of fair market lease rates for the corresponding
in-place leases, measured over a period equal to the remaining non-cancelable
term of the leases. Above and below-market lease values are amortized over the
remaining non-cancelable terms of the respective leases (approximately five
years for tenant leases and approximately 50 years for ground leases).

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

The excess of the cost of an acquired entity over the net of the amounts
assigned to assets acquired (including identified intangible assets) and
liabilities assumed is recorded as goodwill. Goodwill is not amortized but is
tested for impairment on an annual basis, or more frequently if events or
changes in circumstances indicate that the asset might be impaired. An
impairment loss for an asset group is allocated to the long-lived assets of the
group on a pro-rata basis using the relative carrying amounts of those assets,
unless the fair value of specific components of the reporting group are
determinable without undue cost and effort.

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.

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

CASH AND CASH EQUIVALENTS

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

INVESTMENTS IN MARKETABLE SECURITIES

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

RECEIVABLE FROM GENERAL GROWTH PROPERTIES, INC.

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

LEASES

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

DEFERRED EXPENSES

Deferred expenses consist principally of financing fees, leasing costs and
commissions. Deferred financing fees are amortized to interest expense using the
interest method (or other methods which approximate the interest method) over
the terms of the respective agreements. Deferred leasing costs and commissions
are amortized using the straight-line method over the average life of the tenant
leases. Deferred expenses in our Consolidated Balance Sheets are shown at cost,
net of accumulated amortization of $7.4 million as of December 31, 2006 and $2.1
million as of December 31, 2005.


                                      T-13



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.

Straight-line rents receivable, which represent the current net cumulative rents
recognized prior to when billed and collectible as provided by the terms of the
leases, of approximately $39.7 million as of December 31, 2006 and $20.0 million
as of December 31, 2005 are included in Accounts and notes receivable, net in
our Consolidated Balance Sheets.

We provide an allowance for doubtful accounts against the portion of accounts
receivable, including straight-line rents, which is estimated to be
uncollectible. Such allowances are reviewed periodically based upon our recovery
experience. We also evaluate the probability of collecting future rent which is
recognized currently under a straight-line methodology. This analysis considers
the long-term nature of our leases, as a certain portion of the straight-line
rent currently recognizable will not be billed to the tenant until many years
into the future. Our experience relative to unbilled deferred rent receivable is
that a certain portion of the amounts straight-lined into revenue are never
collected from (or billed to) the tenant 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 $38.3 million as of December 31, 2006 and $39.6 million as
of December 31, 2005.

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.

Management and other fees primarily represent management and leasing fees,
construction fees, financing fees and fees for other ancillary services
performed for the benefit of the Unconsolidated Real Estate Affiliates and for
properties owned by third parties. Such fees are recognized as revenue when
earned.

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.


                                      T-14

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

DERIVATIVE FINANCIAL INSTRUMENTS

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

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

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

Substantially all of our interest rate swap and other derivative financial
instruments qualify as cash flow hedges and hedge our exposure to forecasted
interest payments on variable-rate LIBOR-based debt. Accordingly, the effective
portion of the instruments' gains or losses is reported as a component of other
comprehensive income and reclassified into earnings when the related forecasted
transactions affect earnings. If we discontinue a cash flow hedge because it is
no longer probable that the original forecasted transaction will occur or if a
hedge is deemed no longer effective, the net gain or loss in accumulated other
comprehensive income (loss) is immediately reclassified into earnings.

We have not recognized any losses as a result of hedge discontinuance and the
expense that we recognized related to changes in the time value of interest rate
cap agreements and ineffective hedges was insignificant for 2006, 2005 and 2004.

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

FAIR VALUE OF FINANCIAL INSTRUMENTS

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


                                      T-15



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




                                                  2006                                    2005
                                 ------------------------------------    ------------------------------------
(IN THOUSANDS)                        CARRYING       ESTIMATED FAIR           CARRYING        ESTIMATED FAIR
                                       AMOUNT            VALUE                 AMOUNT             VALUE
                                       ------            -----                 ------             -----
                                                                                
Fixed-rate debt                     $  7,011,545        $  6,950,810        $  6,186,915        $  6,112,798
Variable-rate debt
                                         288,287             289,692             316,158             317,094
                                 ----------------    ----------------    ----------------   -----------------
                                    $  7,299,832        $  7,240,502        $  6,503,073        $  6,429,892
                                 ================    ================    ================   =================



STOCK-BASED COMPENSATION

We applied the intrinsic value-based method of accounting prescribed by
Accounting Principles Board ("APB") Opinion No. 25, "Accounting for Stock Issued
to Employees," and related interpretations to account for stock-based employee
compensation plans. Under this method, compensation cost was recognized for
awards of shares of common stock or stock options to our officers and employees
only if the quoted market price of the stock at the grant date (or other
measurement date, if later) was greater than the amount the grantee must pay to
acquire the stock. The following table summarizes the pro forma effects on net
income (in thousands) and earnings per share of common stock for the period from
January 1 to November 12, 2004 using an optional fair value-based method, rather
than the intrinsic value-based method, to account for stock-based compensation
awards made since 1995. Subsequent to the Merger, there were no outstanding
shares of common stock, all outstanding stock options became fully vested,
settled and expensed, and stock-based compensation plans were terminated as of
the date of the Merger.




                                                                              Pre-Merger basis
                                                                           -----------------------
                                                                                January 1 to
                                                                                November 12,
                                                                                   2004*
                                                                           -----------------------
                                                                     
Net income, as reported                                                 $                  40,046
Add: Stock-based employee compensation expense included in
     determined reported net earnings, net of related tax effects
     and amounts capitalized                                                                2,745
Deduct: Total stock-based employee compensation expense
     under fair value-based method, net of related tax effects
     and amounts capitalized                                                             (20,911)
                                                                           -----------------------
Pro forma net income                                                    $                  21,880
                                                                           =======================


*     All TRC options and common stock of employees were settled as of the
      Merger date

EARNINGS PER SHARE ("EPS")

Earnings per share amounts are not presented as there were no outstanding shares
of common stock at December 31, 2006, 2005 and 2004 due to the Merger.

USE OF ESTIMATES

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

RECLASSIFICATIONS AND CORRECTIONS

Certain amounts in the 2005 and 2004 Consolidated Financial Statements have been
reclassified to conform to the current year presentation.

     During 2006, we made various corrections to the purchase price allocation
related to the Merger that was recorded in our 2005 Consolidated Financial
Statements. Corrections related to the aggregate net deferred tax liabilities
related to the Merger reduced deferred tax liabilities by approximately $58.7
million with a corresponding reduction to goodwill in the first quarter of 2006
and additional corrections identified in the fourth quarter increased deferred
tax liabilities by $15.5 million, increased goodwill by $9.8 million, increased
deferred tax assets by $2.1 million and decreased current taxes payable by $3.6
million. The net reductions to deferred tax liabilities of $43.2 million and
goodwill of $48.9 million and the other corrections noted above, had no impact
on earnings for the years ended December 31, 2006 and 2005, or any period within
such years.


                                      T-16



Additionally, we reclassified approximately $65 million of below-market ground
leases, which were included in prepaid expenses and other assets in our December
31, 2005 Consolidated Balance Sheet, to owned land in 2006. This change and the
corresponding revision of previously recorded amortization decreased other
property operating costs by approximately $1.9 million and increased net income
by approximately $1.5 million during 2006. We also corrected the amortization
period used to amortize the tenant-related intangible assets and liabilities at
one of our properties. This correction increased depreciation and amortization
by approximately $2.4 million and decreased net income by approximately $2.0
million in 2006.

None of the adjustments impacted our cash flows from operating, investing or
financing activities in any period in 2006 or 2005. We believe that the effects
of these changes are not material to our Consolidated Financial Statements.

NOTE 3 PURCHASE ACCOUNTING DUE TO THE MERGER

Under terms of the Merger, TRC shareholders received consideration of $67.50 per
share reduced by the payment of any extraordinary dividends. We declared and
paid an extraordinary dividend in November 2004 of $2.29474 per share. This
reduced the merger consideration to $65.20526 per share.

Effective with the Merger, each of our outstanding stock options and restricted
stock grants became fully vested. Each option holder received a cash payment
equal to the excess of the merger consideration over the exercise price per
share of the stock option. Each holder of restricted stock received a cash
payment equal to the per share merger consideration. These payments are not
included in our results of operations on either the Pre-Merger or Post-Merger
basis.

At the time of the Merger, the common stock of TRC was canceled and retired.
Additionally, all stock-based employee compensation plans (stock option plans
and stock bonus plans) were terminated. As a result, our consolidated financial
statements do not contain common stock related disclosures, such as earnings per
share amounts or certain information regarding stock-based compensation, for the
years ended December 31, 2006 and 2005 and for any periods in 2004.

The Merger has been accounted for using the purchase method and, accordingly,
our properties' results of operations subsequent to the Merger reflect a new
basis of accounting from the date of acquisition. Therefore, our operating
results for the years ended December 31, 2005 and 2006 and for the period
November 13, 2004 to December 31, 2004 reflect this new, Post-Merger, basis of
our assets and liabilities. However, the results for the period January 1, 2004
to November 12, 2004 continue to reflect the prior TRC historical, Pre-Merger,
carrying amounts. Estimates of future cash flows and other valuation techniques
were used to allocate the purchase price to our properties between land,
buildings and improvements, equipment and identifiable intangible assets and
liabilities such as amounts related to in-place at-market leases, acquired
above- and below-market leases and tenant relationships.


                                      T-17


In addition, the accompanying consolidated statements of operations for 2004
have been separated to present operations on a Pre-Merger basis (January 1 to
November 12, 2004), and on a Post-Merger basis (November 13 to December 31,
2004). A reconciliation of the previously reported full year 2004 presentation
to the current presentation of 2004 is as follows (computed as the total for
2004 less the period in 2004 prior to the Merger yielding unadjusted Post-Merger
results; then applying purchase accounting and other adjustments to yield
Post-Merger 2004 period operations reflecting purchase accounting, discontinued
operations, and current year reclassifications):



                                                             Pre-Merger basis                                         Post-Merger
                                        ----------------------------------------------------                             basis
                                          Year ended                             (Unaudited)                          -----------
                                         December 31,          January 1         November 13         Purchase         November 13
                                             2004               through            through          Accounting          through
                                        (as previously        November 12,       December 31,       and Other         December 31,
(In thousands)                             reported)              2004               2004          Adjustments*           2004
                                           ---------              ----               ----          ------------           ----
                                                                                                       
Revenues:
     Minimum rents and
       other tenant revenues ....        $   849,714         $   704,153         $ 145,561         $ (23,583)          $ 121,978
     Land sales..................            361,965             281,640            80,325           (13,889)             66,436
     Fees and other..............             58,554              49,567             8,987               847               9,834
                                         -----------         -----------         ---------         ---------           ---------
        Total revenues...........          1,270,233           1,035,360           234,873           (36,625)            198,248
                                         -----------         -----------         ---------         ---------           ---------
Expenses:
     Property operating
       expenses .................            355,341             288,634            66,707           (21,197)             45,510
     Land sales
       operations ...............            207,324             167,769            39,555            24,212              63,767
     Property management
       and other costs ..........             52,786              47,798             4,988               654               5,642
     Provision for
       bad debts ................             14,338              13,060             1,278            (1,278)                 --
     Depreciation and
       amortization .............            193,437             159,629            33,808             1,087              34,895
     Other provisions
       and losses, net ..........            452,956             133,271           319,685          (319,685)                 --
     Impairment losses
       on operating properties ..             69,538                  --            69,538           (69,538)                 --
                                         -----------         -----------         ---------         ---------           ---------
        Total expenses...........          1,345,720             810,161           535,559          (385,745)            149,814
                                         -----------         -----------         ---------         ---------           ---------
     OPERATING INCOME (LOSS) ....            (75,487)            225,199          (300,686)          349,120              48,434

Interest expense, net............           (245,698)           (206,815)          (38,883)            6,578             (32,305)

Net gains (losses) on
     dispositions of interests
     in operating properties ....             14,121              14,100                21               (21)                 --
                                         -----------         -----------         ---------         ---------           ---------
     INCOME BEFORE INCOME TAXES,
        ALLOCATIONS TO MINORITY
        INTEREST AND FROM
        UNCONSOLIDATED REAL
        ESTATE AFFILIATES .......           (307,064)             32,484          (339,548)          355,677              16,129
Provision for income taxes ......            (39,505)            (63,941)           24,436           (26,428)             (1,992)
Income (losses) allocated to
     minority interests .........                 --              (3,152)            3,152            (3,714)               (562)
Equity in income of
     unconsolidated real
     estate affiliates ..........             26,409              22,265             4,144            (3,395)                749
                                         -----------         -----------         ---------         ---------           ---------
     INCOME (LOSS) FROM
        CONTINUING OPERATIONS ...           (320,160)            (12,344)         (307,816)          322,140              14,324
Discontinued operations .........             45,399              52,390            (6,991)            7,974                 983
                                         -----------         -----------         ---------         ---------           ---------
     NET INCOME (LOSS)...........        $  (274,761)        $    40,046         $(314,807)        $ 330,114           $  15,307
                                         ===========         ===========         =========         =========           =========


*      Purchase accounting adjustments represent differences in amounts reported
       on a Pre-Merger and Post-Merger basis resulting from the adjustment of
       assets and liabilities to fair value as of the Merger date. Examples of
       such adjustments include the difference in depreciation of assets at fair
       value versus historical cost and the difference in rent revenues related
       to a new lease revenue recognition period commencing on the Merger date.
       Other adjustments include reclassifications to conform presentation to
       that of GGP and adjust for certain charges previously reported that we
       believe should not be included in either the Pre-Merger or Post-Merger
       periods. Such adjustments include impairment charges resulting from
       changes in new management's plans or intentions with respect to the
       future operation of assets, loss contingencies due to new management's
       intentions with respect to the potential settlement of certain litigation
       matters, charges related to the acceleration of vesting of stock options,
       the effect of 2005 sales of properties on discontinued operations, and
       certain severance costs that are reflected in the fair values of the
       assets and liabilities on the Merger date rather than in operations.


                                      T-18



As discussed above, a portion of the aggregate purchase price relating to the
Merger was allocated to intangible assets and liabilities. This allocation, the
accumulated amortization since the Merger date and the net carrying value of
each intangible asset and liability component is as follows (in thousands):



                                                                 Accumulated
                                               Gross Asset      (Amortization)/    Net Carrying
                                               (Liability)        Accretion           Amount
                                               -----------        ---------           ------
                                                                          
DECEMBER 31, 2006
Tenant leases:
   In-place value .....................        $ 544,623         $(273,011)        $ 271,612
   Above-market .......................          106,360           (52,702)           53,658
   Below-market .......................         (143,343)           68,304           (75,039)
Ground leases:
   Above-market .......................          (16,968)            1,007           (15,961)
   Below-market .......................          291,907           (12,836)          279,071
Real estate tax stabilization agreement           91,879            (8,501)           83,378

DECEMBER 31, 2005
Tenant leases:
   In-place value .....................        $ 552,052         $(150,008)        $ 402,044
   Above-market .......................          106,117           (29,023)           77,094
   Below-market .......................         (145,120)           35,578          (109,542)
Ground leases:
   Above-market .......................          (16,968)              535           (16,433)
   Below-market .......................          358,524            (8,736)          349,788
Real estate tax stabilization agreement           91,879            (4,691)           87,188


Changes in gross asset (liability) balances are the result of the ground lease
reclassification, the distribution of Augusta Mall to GGP, and acquisition of
the minority interest in two joint ventures.

Amortization 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 $147.7
million in 2006, $164.4 million in 2005, and $16.9 million in the period
November 13 to December 31, 2004.

     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 $140
million in 2007, $100 million in 2008, $50 million in 2009, $30 million in 2010
and $20 million in 2011.

OTHER ACQUISITION AND DEVELOPMENT ACTIVITIES

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

We are an investor in a consolidated joint venture that is developing The Shops
at La Cantera, a regional retail center in San Antonio, Texas. The project held
its grand opening of its first phase on September 15, 2005.


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.

In December 2003, as part of an agreement to acquire interests in entities
developing The Woodlands (see Note 5), we agreed to dispose of Hughes Center, a
master planned business park in Las Vegas, Nevada, comprising eight office
buildings totaling approximately 1.1 million square feet, nine ground leases and
approximately 13 acres of developable land. The sales of two of the office
buildings and two of the ground leases closed in December 2003 for cash of $29.0
million and the assumption by the buyer of $9.6 million of mortgage debt. We
recorded aggregate


                                      T-19


gains on these sales of approximately $10.1 million. The remaining sale of the
properties in Hughes Center closed in 2004 for cash of $71.3 million and the
assumption by the buyer of $110.8 million of mortgage debt. We recorded
aggregate gains on these sales of approximately $42.2 million (net of deferred
income taxes of $2.7 million).

In May 2004, we agreed to sell our interests in two office buildings in Hunt
Valley, Maryland. We recorded aggregate impairment losses of $1.4 million in the
fourth quarter of 2003 and $0.4 million in 2004 related to these properties.
These properties were sold in October 2004 for net proceeds of $8.4 million.

In March 2004, we sold our interests in Westdale Mall, a retail center in Cedar
Rapids, Iowa, for cash of $1.3 million and the assumption by the buyer of $20.0
million of mortgage debt. We recognized a gain of $0.8 million relating to this
sale. We recorded an impairment loss of $6.5 million in 2003 related to this
property.

We also recorded in 2004 net gains of $2.0 million (net of deferred income taxes
of $0.4 million) related to the resolutions of certain contingencies related to
disposals of properties in 2002 and 2003.

In 2000, we contributed our ownership interests in 37 buildings in two
industrial parks to a joint venture in exchange for cash and a minority interest
in the venture. We also guaranteed $44.0 million of indebtedness of the venture
and, because of the nature of our continuing involvement in the venture,
deferred a portion of the gains from the transaction. In June 2004, we redeemed
our interest in the venture and terminated our guarantee of its indebtedness.
Accordingly, we recognized the previously deferred gain of $12.7 million (net of
deferred income taxes of approximately $1.7 million).

In April 2004, we sold most of our interest in Westin New York, a hotel in New
York City, for net proceeds of $15.8 million and recognized a gain of $1.4
million (net of deferred income taxes of $0.8 million).

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

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

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



                                                                 Post-Merger basis*                 Pre-Merger basis
                                                                 ------------------                 ----------------
                                                             Year ended        November 13 to         January 1 to
                                                            December 31,        December 31,          November 12,
                                                                2005                2004                  2004
                                                                ----                ----                  ----
                                                                                           
Revenues .........................................            $ 24,275             $ 2,812             $ 23,486
Operating expenses, exclusive of depreciation,
     amortization and impairments ................             (10,388)             (1,061)              (8,402)
Interest income (expense), net ...................                (339)                  1                 (330)
Depreciation and amortization ....................              (5,480)               (769)              (6,763)
Impairment losses on operating properties ........                  --                  --                 (432)
Gains on dispositions of operating properties, net               6,249                  --               45,213
Income tax benefit (provision), primarily deferred                  --                  --                   63
Income allocated to minority interests ...........                  --                  --                 (445)
                                                              --------             -------             --------
        Discontinued operations ..................            $ 14,317             $   983             $ 52,390
                                                              ========             =======             ========


*     There were no significant discontinued operations for the year ended
      December 31, 2006.

NOTE 5 UNCONSOLIDATED REAL ESTATE AFFILIATES

We own interests in unconsolidated real estate affiliates that own and/or
develop properties, including master planned communities. We use these ventures
to limit our risk associated with individual properties and to reduce our
capital requirements. We may also contribute interests in properties we own to
unconsolidated ventures for cash distributions and interests in the ventures to
provide liquidity as an alternative to outright property sales. We


                                      T-20


account for the majority of these ventures using the equity method because the
ventures do not meet the definition of a variable interest entity and we have
joint interest and control of these properties with our venture partners.

At December 31, 2006, 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. In January 2004, we acquired our partners' interests in the joint venture
that is developing the master-planned community known as Fairwood, in Prince
George's County, Maryland, increasing our ownership to 100%. Prior to this
transaction, we held a noncontrolling interest in this venture and accounted for
our investment as an investment in unconsolidated real estate affiliates. We
consolidated the venture in our financial statements from the date of the
acquisition.

In April 2004, we sold most of our interest in Westin New York, a hotel in New
York City, for net proceeds of $15.8 million and recognized a gain of
approximately $1.4 million (net of deferred income taxes of $0.8 million). In
September 2006, we sold the remaining interest in Westin New York and recognized
no gain.

In December 2003, we acquired a 50% interest in the retail component and certain
office components of Mizner Park, a mixed-use property in Boca Raton, Florida,
for approximately $34 million. In January 2004, we acquired a 50% interest in
the remaining office components of Mizner Park for approximately $18 million.

On December 31, 2003 we acquired, for approximately $185 million, certain office
buildings and a 52.5% economic interest in entities (which we refer to as the
"Woodlands Entities") that own The Woodlands, a master planned community in the
Houston, Texas metropolitan area. Assets owned by the Woodlands Entities at the
time of acquisition included approximately 5,500 acres of land, three golf
course complexes, a resort conference center, a hotel, interests in seven office
buildings and other assets. Two of the office buildings were sold during 2004.
In January 2006 one building was sold and in December 2006 four buildings were
sold for total cash proceeds of $17.7 million and a gain of approximately $9.0
million. Of this amount, $5.3 million was recorded as operating income, as the
building was constructed with the intent to sell and considered inventory.

As a result of these transactions and 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 $21.9
million and $18.0 million at December 31, 2006 and 2005, respectively and is
included in other liabilities.

The condensed, combined balance sheets of ventures accounted for using the
equity method as of December 31, 2006 and 2005 and the condensed, combined
statements of income are summarized as follows (in thousands):



                                                                         December 31,
                                                                         ------------
                                                                  2006                  2005
                                                                  ----                  ----
                                                                               
Net property and property-related deferred expenses            $2,703,977            $2,700,701
Accounts and notes receivable .....................                60,103                46,664
Prepaid expenses and other assets .................               140,499               116,168
Cash and cash equivalents .........................                75,143                51,267
                                                               ----------            ----------
     Total assets .................................            $2,979,722            $2,914,800
                                                               ==========            ==========

Mortgage notes and other property debt payable ....            $1,850,687            $1,857,590
Accounts payable and other liabilities ............               209,244               200,077
Owners' equity ....................................               919,791               857,133
                                                               ----------            ----------
     Total liabilities and owners' equity .........            $2,979,722            $2,914,800
                                                               ==========            ==========



                                      T-21





                                                                         December 31,
                                                              ---------------------------------
                                                                   2006              2005
                                                              ---------------   ---------------
                                                                          
Owners' equity                                                    $  919,791        $  857,133
Less joint venture partners' equity                                 (545,908)         (512,605)
Capital or basis differences and loans                               802,595           848,448
                                                              ---------------   ---------------
Investment in and loans to/from Unconsolidated
     Real Estate Affiliates                                      $ 1,176,478       $ 1,192,976
                                                              ===============   ===============




                                                                         Post-Merger basis                         Pre-Merger basis
                                                        ------------------------------------------------------     ----------------
                                                         Year ended           Year ended        November 13 to        January 1 to
                                                        December 31,         December 31,        December 31,         November 12,
                                                            2006                 2005                2004                 2004
                                                            ----                 ----                ----                 ----
                                                                                                       
Revenues .....................................           $ 670,897            $ 590,801            $ 90,604            $ 441,238
Operating and interest expenses ..............            (465,708)            (405,088)            (58,681)            (301,229)
Depreciation and amortization ................             (87,825)             (90,855)            (12,219)             (72,562)
Equity in income of unconsolidated investments                  --                   --                  --                  553
                                                         ---------            ---------            --------            ---------
     Net earnings.............................           $ 117,364            $  94,858            $ 19,704            $  68,000
                                                         =========            =========            ========            =========


CONDENSED FINANCIAL INFORMATION OF INDIVIDUALLY SIGNIFICANT UNCONSOLIDATED REAL
ESTATE AFFILIATES

We own 52.5% of the membership interest of The Woodlands Land Development
Company, L.P., The Woodlands Commercial Properties Company, L.P., and The
Woodlands Operating Company, L.P. ("The Woodlands Partnerships"), limited
liability partnerships. The remaining 47.5% interest in The Woodlands
Partnerships is owned by Morgan Stanley Real Estate Fund II, L.P.

The condensed balance sheets of The Woodlands Land Development Company, L.P. as
of December 31, 2006 and 2005, and the condensed statements of operations of
this venture for the years ended December 31, 2006, 2005, and 2004 are
summarized as follows (in thousands):



                                                                THE WOODLANDS LAND DEVELOPMENT COMPANY, L.P.
                                                                --------------------------------------------
                                                                        2006                2005
                                                                        ----                ----
                                                                                    
Net property and property-related deferred costs                      $386,036            $379,097
Prepaid expenses and other assets ..............                        97,977              88,926
Cash and cash equivalents ......................                        15,219                  --
                                                                      --------            --------
      Total assets .............................                      $499,232            $468,023
                                                                      ========            ========

Mortgage notes and other property debt payable .                      $321,724            $282,036
Accounts payable and other liabilities .........                        58,804              84,275
Owners' equity (deficit) .......................                       118,704             101,712
                                                                      --------            --------
      Total liabilities and owners' equity .....                      $499,232            $468,023
                                                                      ========            ========




                                                   THE WOODLANDS LAND DEVELOPMENT COMPANY, L.P.
                                             -------------------------------------------------------
                                             YEAR ENDED            YEAR ENDED           YEAR ENDED
                                             DECEMBER 31,         DECEMBER 31,          DECEMBER 31,
                                                2006                 2005                   2004
                                                ----                 ----                   ----
                                                                               
Revenue .........................            $ 214,497             $ 189,743             $ 159,992
Operating and interest expenses .             (142,394)             (128,269)             (114,054)
Depreciation and amortization ...               (5,218)               (4,659)               (6,454)
Gain from discontinued operations                   --                    --                 2,616
                                             ---------             ---------             ---------
      Net income ................            $  66,885             $  56,815             $  42,100
                                             =========             =========             =========



                                      T-22



NOTE 6  MORTGAGE NOTES AND OTHER PROPERTY DEBT PAYABLE

Mortgage notes and other property debt payable are summarized as follows (in
thousands):



                                                                               December 31,
                                                                         -----------------------
                                                                           2006          2005
                                                                         ----------    ---------
                                                                                
Fixed-rate debt:
      Collateralized mortgage notes and other debt payable               $4,674,707   $4,630,435
      Corporate and other unsecured term loans                            2,336,838    1,556,480
                                                                         ----------   ----------
      Total fixed-rate debt                                               7,011,545    6,186,915
                                                                         ----------   ----------

Variable-rate debt:
      Collateralized mortgage notes and other debt payable                  288,287      315,458
      Corporate and other unsecured term loans                                   --          700
                                                                         ----------   ----------
      Total variable-rate debt                                              288,287      316,158
                                                                         ----------   ----------
      Total                                                              $7,299,832   $6,503,073
                                                                         ==========   ==========


As of December 31, 2006, approximately $8.7 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 mortgage notes
and other property debt payable. Certain properties are subject to financial
performance covenants, primarily debt service coverage ratios, which we are in
compliance with at December 31, 2006.

At December 31, 2006, we had a $95.0 million interest rate swap agreement that
effectively fixed the LIBOR rate (5.35% at December 31, 2006) on a portion of
our variable-rate debt through February 2008 at 6.1%. The rate on the underlying
debt is LIBOR plus 1.3%. The swap has a notional amount of $95.0 million and the
variable rate of the debt is 6.6%, fixed at 6.1%.

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

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

LETTERS OF CREDIT AND SURETY BONDS

We had outstanding letters of credit and surety bonds of approximately $200
million as of December 31, 2006. 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

Prior to the Merger, TRC was a Real Estate Investment Trust ("REIT") and
generally was not subject to corporate level federal income tax on taxable
income it distributed currently to its stockholders. A REIT is permitted to own
securities of a TRS in an amount up to 20% of the fair value of its assets. A
TRS is a taxable corporation that is used by REITs generally to engage in
nonqualifying REIT activities or perform nonqualifying services, and therefore a
REIT is liable for federal and state income taxes with respect to such TRS
entities.

Subsequent to the Merger, we are an entity disregarded for federal income tax
purposes and we are not liable for federal income taxes, except with respect to
our TRS entities.

As a subsidiary of GGP (which operates as a REIT), we own and operate several
TRS entities that are principally engaged 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 several

                                      T-23


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 2006 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.

Several of our taxable REIT subsidiaries are subject to an ongoing federal
income tax examination. We do not believe that the outcome of these examinations
will have a material adverse effect on our consolidated results of operations,
cash flows, or financial position.

The provision for income taxes for the years ended December 31, 2006 and
2005 and the periods November 13, 2004 through December 31, 2004 and January 1,
2004 through November 12, 2004 are summarized as follows (in thousands):



                                                   Post-Merger basis
                             ---------------------------------------------------------------
                                         2006                             2005
                             ------------------------------   ------------------------------
                             Current    Deferred    Total      Current   Deferred    Total
                             --------   --------   --------   --------   --------   --------
                                                                  
Continuing
operations:
     Operating income        $29,446    $53,469    $82,915    $21,986    $26,945    $48,931
     Gains on dispositions        --         --         --         --         --         --
                             -------    -------    -------    -------    -------    -------
         Subtotal
         continuing
            operations        29,446     53,469     82,915     21,986     26,945     48,931
                             -------    -------    -------    -------    -------    -------

Discontinued
operations:
     Operating income             --         --         --         --         --         --
     Gains on dispositions        --         --         --         --         --         --
                             -------    -------    -------    -------    -------    -------
     Subtotal discontinued
            operations            --         --         --         --         --         --
                             -------    -------    -------    -------    -------    -------
                             $29,446    $53,469    $82,915    $21,986    $26,945    $48,931
                             =======    =======    =======    =======    =======    =======




                                     Post-Merger basis                Pre-Merger basis
                             ------------------------------   --------------------------------
                                    November 13 through               January 1 through
                                     December 31, 2004                November 12, 2004
                             ------------------------------   --------------------------------
                              Current   Deferred    Total     Current     Deferred     Total
                             --------   --------   --------   --------    --------    --------
                                                                    
Continuing
operations:
     Operating income           397      1,595     $1,992     $2,760      $61,181      63,941
     Gains on dispositions       --         --         --         --        2,494       2,494
                               ----     ------     ------     ------      -------     -------
         Subtotal
         continuing
            operations          397      1,595      1,992      2,760       63,675      66,435
                               ----     ------     ------     ------      -------     -------

Discontinued
operations:
     Operating income            --         --         --        (28)         (35)        (63)
     Gains on dispositions       --         --         --         --        3,134       3,134
                               ----     ------     ------     ------      -------     -------
     Subtotal discontinued
            operations           --         --         --        (28)       3,099       3,071
                               ----     ------     ------     ------      -------     -------
                               $397     $1,595     $1,992     $2,732      $66,774     $69,506
                               ====     ======     ======     ======      =======     =======


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




                                                                                   Post-Merger basis               Pre-Merger basis
                                                                         ---------------------------------------   -----------------
                                                                                                  November 13        January 1
                                                                                                    through           through
                                                                           2006       2005     December 31, 2004   November 12, 2004
                                                                           ----       ----     -----------------   -----------------
                                                                                                       

Tax at statutory rate on income from continuing operations before
  income taxes                                                           $ 28,722    $ 26,073       $ 5,711            $18,059
Increase (decrease) in valuations allowance, net                              222          --        (1,719)            25,115
State income taxes, net of federal income tax benefit                       2,808         352           115               (580)
Tax at statutory rate on (income) loss not subject to federal income
 taxes and other permanent differences                                     51,163     22,506        (2,115)            23,841
                                                                         --------    --------       -------            -------
      Income tax expense                                                 $ 82,915    $ 48,931       $ 1,992            $66,435
                                                                         ========    ========       =======            =======


Net deferred tax assets (liabilities) are summarized as follows (in thousands):



                                      2006             2005
                                   -----------      -----------
                                              
Total deferred tax assets          $    14,196      $     6,480
Total deferred tax liabilities      (1,302,205)      (1,286,576)
                                   -----------      -----------
Net deferred tax liabilities       $(1,288,009)     $(1,280,096)
                                   ===========      ===========


                                      T-24


The tax effects of temporary differences and loss carryforwards included in the
net deferred tax assets (liabilities) at December 31, 2006 and 2005 are
summarized as follows (in thousands):



                                                                         2006             2005
                                                                      -----------      -----------
                                                                                 
Property, primarily differences in depreciation and amortization,
  the tax basis of land assets and treatment of interest and
  certain other costs                                                 $(1,166,243)     $(1,302,947)
Deferred income                                                          (291,634)        (205,857)
Interest deduction carryforwards                                          142,177          163,193
Operating loss and tax credit carryforwards                                27,691           65,515
                                                                      -----------      -----------
     Total                                                            $(1,288,009)     $(1,280,096)
                                                                      ===========      ===========


The deferred tax assets relate primarily to operating losses and interest
deduction carryforwards for federal income tax purposes. A valuation allowance
has been established due to the uncertainty of realizing operating loss and
interest deduction carryforwards of certain TRS entities. Reversals of other
valuation allowances of $25.6 million in 2005 related to certain tax loss
carryforwards that we were previously unable to conclude were more likely than
not to be realized. This amount is reflected as an adjustment to goodwill. Based
on projections of future taxable income, management believes that it is more
likely than not that the deferred tax assets at December 31, 2006 and 2005, will
be realized. The amount of the deferred tax assets considered realizable could
be reduced in the near term, however, if estimates of future taxable income are
reduced. Deferred income taxes will become payable as temporary differences
reverse (primarily due to the completion of land development projects) and TRS
net operating loss carryforwards are exhausted.

The TRS net operating loss, charitable contributions, and capital loss
carryforwards at December 31, 2006 for federal income tax purposes were
approximately $42.6 million in total and will begin to expire in 2007. The TRS
interest deduction carryforwards at December 31, 2006 for Federal income tax
purposes were approximately $405.5 million and do not expire.

Several of our subsidiaries and partnerships in which we have an interest are
currently under examination by the Internal Revenue Service. 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.

During the first quarter of 2007, we expect to complete an internal
restructuring of certain of our operating properties that are currently owned
by TRS entities. We currently estimate that the restructuring will reduce our
deferred tax liability by approximately $300 million.

NOTE 8  RENTALS UNDER OPERATING LEASES

We, as lessee, have entered into operating leases, primarily for land at
operating properties, expiring at various dates through 2072. Rents under such
leases aggregated $12.0 million in 2006, $14.4 million in 2005, $2.0 million in
the period November 13, 2004 to December 31, 2004 (including a purchase price
adjustment of $1.0 million), and $5.1 million in the period January 1, 2004 to
November 12, 2004, including contingent rents. In addition, we are responsible
for real estate taxes, insurance and maintenance expenses. Minimum rent payments
due under operating leases in effect at properties included in continuing
operations at December 31, 2006 are summarized as follows (in thousands):

                                                
2007                                               $ 11,684
2008                                                 11,706
2009                                                 11,729
2010                                                 11,752
2011                                                 11,776
Subsequent                                          490,471




                                      T-25


Minimum rents to be received from tenants under operating leases in effect at
properties included in continuing operations at December 31, 2006 are summarized
as follows (in thousands):

                                                
2007                                               $524,646
2008                                                480,028
2009                                                427,554
2010                                                372,735
2011                                                314,383
Subsequent                                          913,281



Rents under finance leases aggregated $8.4 million in 2006, $9.0 million in
2005, and $8.9 million in 2004.

Minimum rent payments to be received from tenants under finance leases in effect
at December 31, 2006 are summarized as follows (in thousands):

                                                
2007                                               $ 8,284
2008                                                 8,284
2009                                                 7,266
2010                                                 7,062
2011                                                 7,062
Subsequent                                          28,275



NOTE 9  TRANSACTIONS WITH AFFILIATES

Management fees primarily represent management and leasing fees, financing fees
and fees for other ancillary services performed for the benefit of certain of
the Unconsolidated Real Estate Affiliates and for properties owned by third
parties. Fees charged to the Unconsolidated Properties totaled approximately
$15.0 million in 2006, $10.9 million in 2005, $1.5 million for the period
November 13, 2004 to December 31, 2004, and $7.9 million for the period January
1, 2004 to November 12, 2004. Such fees are recognized as revenue when earned.
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. Effective January 1, 2007, RPMI merged into
General Growth Management, Inc. ("GGMI"), a wholly owned subsidiary of GGP.

NOTE 10  STOCK-BASED COMPENSATION PLANS

We had stock option plans that awarded options to purchase shares of common
stock to our directors, officers and employees. Stock options were generally
granted with an exercise price equal to the market price of the common stock on
the date of grant, typically vested over a three- to five-year period, subject
to certain conditions, and had a maximum term of ten years. These stock option
plans were terminated following the Merger.

As a result of the Merger, there were no options outstanding as of November 12,
2004. Expense recognized for stock options granted to employees of our
unconsolidated ventures was insignificant.

Under our stock bonus plans, shares of common stock were awarded to our
directors, officers and employees. Shares awarded under the plans were typically
subject to forfeiture restrictions which lapsed at defined annual rates. These
stock bonus plans were terminated following the Merger.

NOTE 11  PENSION, POST-RETIREMENT AND DEFERRED COMPENSATION PLANS

We had a qualified defined benefit pension plan ("funded plan") that covered
substantially all employees, and nonqualified unfunded defined benefit pension
plans that primarily covered participants in the funded plan whose defined
benefits exceed the plan's limits ("supplemental plan"). In April 2003, we
modified our funded plan and our supplemental plan so that covered employees
would not earn additional benefits for future services. In February


                                      T-26


2004, we adopted a proposal to terminate our funded and supplemental plans. On
October 4, 2004, we began distributing the funded plan's assets to its
beneficiaries. Concurrent with the first distributions from the funded plan, we
terminated our supplemental plan by merger into our nonqualified supplemental
defined contribution plan. As of December 31, 2004 the distributions were
completed. We incurred settlement losses of $34.8 million in 2004 related to
lump-sum distributions made primarily as a result of the plan termination in
2004 and retirements as a result of organizational changes. The lump-sum
distributions were paid to participants primarily from assets of our funded
plan, or with respect to the supplemental plan, from contributions made by us.

The remaining nonqualified plan benefit obligations relate to The Rouse Company
Board of Director's plan which has been curtailed as a result of the Merger and
resulted in a curtailment loss of $0.1 million.

We had a qualified defined contribution plan and a nonqualified supplemental
defined contribution plan available to substantially all employees. In 2004, we
matched 100% of participating employees' pre-tax contributions up to a maximum
of 3% of eligible compensation and 50% of participating employees' pre-tax
contributions up to an additional maximum of 2% of eligible compensation. In an
action related to the curtailment of the funded and supplemental plans, we added
new components to the defined contribution plans under which we either made or
accrued discretionary contributions to the plans for all employees. Expenses
related to these plans were $5.9 million in 2004. Our defined contribution plans
were merged effective April 1, 2005 with those defined contribution plans
offered by General Growth Properties, Inc., and our former employees, now as
employees of GGP in 2005, participate in such plans.

The supplemental plan obligations were $17.3 million at October 4, 2004. On
August 20, 2004, we funded an irrevocable trust for the participants in our
supplemental plan and our nonqualified supplemental defined contribution plan
with cash of approximately $27.2 million and the transfer of marketable
securities valued at approximately $25.2 million.

We also had a retiree benefits plan that provided postretirement medical and
life insurance benefits to full-time employees who met minimum age and service
requirements. We paid a portion of the cost of participants' life insurance
coverage and made contributions to the cost of participants' medical coverage
based on years of service, subject to a maximum annual contribution. Effective
December 31, 2004, modifications were made to the plan so that employees
retiring on or after January 1, 2005 would no longer be eligible for this
benefit. The curtailment of this plan required us to immediately recognize all
unamortized prior service credit and unrecognized transition obligation and
resulted in a curtailment gain of approximately $3 million in 2004. As of
December 31, 2005, the retiree benefit plan was terminated as to all
participants with unvested benefits.

The net pension cost includes the following components (in thousands):



                                                          Pre-Merger basis
                                                         -------------------
                                                         Period January 1 to
                                                          November 12, 2004
                                                         -------------------
                                                      
Interest cost on projected benefit obligations                 $ 3,167
Expected return on funded plan assets                           (2,906)
Prior service cost recognized                                       30
Net actuarial loss recognized                                    1,184
                                                               -------
     Net pension cost before special events                      1,475

Special events:
     Settlement losses                                          34,839
     Curtailment loss                                              136
                                                               -------
        Net pension cost after special events                  $36,450
                                                               =======


The curtailment and settlement losses in 2004 are included in other provisions
and losses, net, in the consolidated statements of operations and comprehensive
income (loss) (see Note 12).


                                      T-27


The net postretirement benefit cost includes the following components (in
thousands):



                                                            Post-Merger basis            Pre-Merger basis
                                                        --------------------------     ---------------------
                                                           Period November 13           Period January 1 to
                                                          to December 31, 2004           November 12, 2004
                                                        --------------------------     ---------------------
                                                                                 
Service cost                                                      $  48                      $  312
Interest cost on accumulated benefit obligations                    136                         879
Net actuarial loss recognized                                        19                         124
Amortization of prior service cost                                  (32)                       (209)
                                                                   ----                      ------
     Net postretirement benefit cost before
     special events                                                $171                      $1,106
                                                                   ====                      ======


We also had a deferred compensation program which permitted directors and
certain management employees to defer portions of their compensation on a
pre-tax basis. The effect of this program on net income was insignificant in
2004. Future contributions into the program were terminated on December 31, 2004
as a result of the Merger.

NOTE 12 OTHER PROVISIONS AND LOSSES, NET

Other provisions and losses, net, are summarized as follows (in thousands):



                                                                      Pre-Merger basis
                                                                   ----------------------
                                                                   Period January 1, 2004
                                                                 through November 12, 2004
                                                                 -------------------------
                                                              
Costs of Merger with GGP                                                   $ 52,519
Interest and penalties for tax related matters (see Note 7)                  45,571
Pension and post-retirement plan curtailment loss (see Note 11)                 136
Pension plan settlement losses (see Note 11)                                 34,839
Other                                                                           206
                                                                           --------
     Total                                                                 $133,271
                                                                           ========


* There were no significant other provisions for 2006, 2005 or for the period
  November 13, 2004 to December 31, 2004.

As a result of the Merger, we recognized significant Merger-related costs. We
incurred approximately $32.5 million in professional service fees and other
costs in connection with the Merger transaction and $20 million for a
contribution to The Rouse Company Foundation, a charitable organization that is
neither owned nor controlled by us, that was required under the Merger
agreement.

One of the conditions for closing the Merger was that we deliver to GGP an
opinion of tax counsel acceptable to GGP with respect to our qualification as a
REIT. In preparing for the Merger, we discovered that we may have had non-REIT
earnings and profits that we did not distribute to our shareholders. These
earnings and profits included non-REIT earnings and profits we would have
succeeded to in 2001 if a tax election we made in 2001 with respect to one of
our subsidiaries was determined to be invalid. Such earnings and profits also
included earnings and profits which might be attributed to certain intercompany
transactions. Based on advice from our outside legal counsel who assisted us
with REIT tax matters and our internal analysis, we believed that paying
additional distributions to our shareholders (which we refer to as extraordinary
dividends) and making payments of additional tax, interest and penalties were
the most expedient courses of action to take. On November 9, 2004, we entered
into an agreement with the Internal Revenue Service ("IRS") to settle these
matters and treat the payment of extraordinary dividends as satisfying our
distribution requirements. The amount of the extraordinary dividend paid was
$238 million. Additionally, we paid approximately $23.2 million of interest and
a penalty of approximately $22.4 million to the IRS under the terms of the
closing agreement with the IRS. As a result of these payments, we were able to
deliver to GGP an acceptable opinion of tax counsel with respect to our REIT
status.

We had a qualified defined benefit pension plan ("funded plan") that covered
substantially all employees, and nonqualified unfunded defined benefit pension
plans that primarily covered participants in the funded plan whose defined
benefits exceed the plan's limits ("supplemental plan"). In 2003, we modified
our funded plan and our supplemental plan so that covered employees would not
earn additional benefits for future services. In February


                                      T-28


2004, we adopted a proposal to terminate our funded and supplemental plans. On
October 4, 2004, we began distributing the funded plan's assets to its
beneficiaries. Concurrent with the first distributions from the funded plan, we
terminated our supplemental plan by merger into our nonqualified supplemental
defined contribution plan. As of December 31, 2004 the distributions were
completed. We incurred settlement losses of $34.8 million in 2004 related to
lump-sum distributions made primarily as a result of the plan termination in
2004 and retirements as a result of organizational changes. The lump-sum
distributions were paid to participants primarily from assets of our funded
plan, or with respect to the supplemental plan, from contributions made by us.


NOTE 13  OTHER ASSETS AND LIABILITIES

The following table summarizes the significant components of prepaid expenses
and other assets as of December 31, 2006 and December 31, 2005 (in thousands):




                                                   2006          2005
                                                  --------     --------
                                                         
Below-market ground leases                        $279,071     $349,788
Receivables - finance leases and bonds              91,147      114,115
Security and escrow deposits                        42,474       54,852
Real estate tax stabilization agreement             83,378       87,188
Special Improvement District receivable             64,819       66,206
Above-market tenant leases                          53,658       77,094
Prepaid expenses                                    22,632       22,790
Funded defined contribution plan assets                 --       20,062
Other                                               27,714       22,777
                                                  --------     --------
                                                  $664,893     $814,872
                                                  ========     ========


The following table summarizes the significant components of accounts payable
and accrued expenses as of December 31, 2006 and December 31, 2005 (in
thousands):



                                                              2006         2005
                                                            --------     --------
                                                                   
Accounts payable, deposits and accrued expenses             $120,091     $135,028
Below-market tenant leases                                    75,039      109,542
Construction payable                                          64,713       51,064
Accrued interest                                              54,263       46,714
Hughes participation payable                                  90,793       61,783
Accrued real estate taxes                                     15,445       11,931
Accrued payroll and other employee liabilities                 6,640       14,315
Deferred gains/income                                         18,557       27,950
Tenant and other deposits                                     20,001        6,960
Funded defined contribution plan liabilities                      --       20,062
Above-market ground leases                                    15,961       16,433
Capital lease obligations                                     14,967       19,206
Minority interest                                              5,557       26,602
Other                                                         30,456       44,089
                                                            --------     --------
                                                            $532,483     $591,679
                                                            ========     ========


NOTE 14  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.


                                      T-29


CONTINGENT STOCK AGREEMENT

In connection with the acquisition of The Hughes Corporation ("Hughes") in 1996,
we entered into a Contingent Stock Agreement ("CSA") for the benefit of the
former Hughes owners or their successors ("beneficiaries"). Under terms of the
CSA, additional shares of common stock (or in certain circumstances, Increasing
Rate Cumulative Preferred stock) are issuable to the beneficiaries based on
certain indemnification obligations and on the appraised values of four defined
groups of acquired assets at specified termination dates to 2009 and/or cash
flows generated from the development and/or sale of those assets prior to the
termination dates ("earnout periods"). Subsequent to the Merger, shares of GGP
common stock are used to satisfy distribution requirements. The distributions of
additional shares, based on cash flows, are determined and payable semiannually
as of June 30 and December 31. At December 31, 2006 and 2005, 1,814,810 and
755,642, respectively, of GGP shares of common stock ($81.7 million and $35.3
million, respectively) were issuable to the beneficiaries, representing their
share of cash flows for the period ended December 31, 2006 and 2005.

The CSA is, in substance, an arrangement under which we and the beneficiaries
will share in cash flows from development and/or sale of the defined assets
during their respective earnout periods, and GGP will issue additional shares of
common stock to the beneficiaries based on the value, if any, of the defined
asset groups at specified termination dates. We account for the beneficiaries'
shares of earnings from the assets subject to the agreement as an operating
expense. We will account for any distributions to the beneficiaries in 2009,
which are likely to be significant, in connection with the valuation related to
assets we own as of such termination date as additional investments in the
related assets (i.e., contingent consideration). All shares of TRC common stock
repurchased in 2004 were subsequently issued pursuant to the CSA.

HURRICANE DAMAGES

In September 2005, two of our operating retail properties in Louisiana incurred
hurricane and/or vandalism damage. Riverwalk Marketplace, which is located near
the convention center in downtown New Orleans, partially reopened in November
2005. Though it is now fully opened, it is operating at levels below
pre-hurricane levels as a result of reduced occupancy and tourist traffic.
Oakwood Center, located in Gretna, Louisiana, is not expected to reopen until
October 2007. We have comprehensive insurance coverage for both property damage
and business interruption and, therefore, have recorded insurance recovery
receivables for both of these coverages.

The net book value of the property damage at these properties is currently
estimated to be approximately $37 million. However, we continue to assess the
damage estimates and are having ongoing discussions with our insurance carriers
regarding the scope of repair, cleaning, and replacement required. The actual
net book value write-off could vary from this estimate. Changes to these
estimates have been and will be recorded in the periods in which they are
determined.

We believe it is probable that insurance proceeds will be sufficient to cover
the cost of restoring the property damage and certain business interruption
amounts; however, certain deductibles, limitations and exclusions are expected
to apply with respect to both current and future matters. No determination has
yet been made as to the total amount or timing of insurance payments. As of
December 31, 2006, however, an aggregate of $32.5 million in insurance proceeds
related to property damage and business interruption have been received. These
proceeds have been applied against insurance recovery receivables. In addition,
as certain disputes currently exist or may occur in the future with our
insurance carriers, we have initiated litigation to preserve our rights
concerning our claims. Finally, as of December 31, 2006, the majority of the
remaining insurance recovery receivable represents the recovery of the net book
value of fixed assets written off.

                                      T-30


OTHER COMMITMENTS AND CONTINGENCIES

                                                                                          
Construction contracts for properties in development:
      Consolidated subsidiaries, primarily related to The Shops at La Cantera                $ 14.6
      Our share of unconsolidated real estate affiliates                                        1.1
Construction and purchase contracts for land development                                       56.9
Our share of long-term ground lease obligations of unconsolidated real estate
      affiliates                                                                              118.5
                                                                                             ------
                                                                                             $191.1
                                                                                             ======



The following table summarizes the contractual maturities of our long-term debt
and commitments under ground leases as of December 31, 2006. Both long-term debt
and ground leases include the related purchase accounting fair value
adjustments:




(In thousands)                  2007           2008           2009          2010           2011         Subsequent       Total
                             ----------     ----------     ----------     ----------     --------       ----------     ----------
                                                                                                  
Long-term debt-principal     $268,627       $960,423       $1,410,833     $1,601,313     $675,251       $2,383,385     $7,299,832
Ground lease payments          11,684         11,706           11,729         11,752       11,776          490,471        549,118
                             --------       --------       ----------     ----------     --------       ----------     ----------
                             $280,311       $972,129       $1,422,562     $1,613,065     $687,027       $2,873,856     $7,848,950
                             ========       ========       ==========     ==========     ========       ==========     ==========


NOTE 15  RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS

In February 2007, the FASB issued SFAS No. 159, "The Fair Value Option for
Financial Assets and Financial Liabilities" ("SFAS No. 159") which provides
companies with an option to report selected financial assets and liabilities at
fair value. The standard's objective is to reduce both complexity in accounting
for financial instruments and the volatility in earnings caused by measuring
related assets and liabilities differently. SFAS No. 159 also establishes
presentation and disclosure requirements designed to facilitate comparisons
between companies that choose different measurement attributes for similar types
of assets and liabilities. SFAS No. 159 is effective as of the beginning of an
entity's first fiscal year beginning after November 15, 2007. With certain
limitations, early adoption is permitted. We are evaluating the impact of this
new statement on our financial statements.

In September 2006, the SEC staff issued SEC Staff Accounting Bulletin ("SAB")
Topic 1N, "Financial Statements -- Considering the Effects of Prior Year
Misstatements When Quantifying Misstatements in Current Year Financial
Statements" ("SAB 108"). SAB 108 addresses how a registrant should quantify the
effect of an error on the financial statements. The SEC staff concludes in SAB
108 that a dual approach should be used to compute the amount of a misstatement.
Specifically, the amount should be computed using both the "rollover" (current
year income statement perspective) and "iron curtain" (year-end balance sheet
perspective) methods. The adoption had no impact on our Consolidated Financial
Statements.

In September 2006, the FASB issued SFAS No. 158, "Employers' Accounting for
Defined Benefit Pension and Other Postretirement Plans (an amendment of FASB
Statements No. 87, 88, 106, and 132R)" ("SFAS 158") which requires employers to
fully recognize the obligations associated with single-employer defined benefit
pension, retiree healthcare and other postretirement plans in their financial
statements. Specifically, SFAS 158 requires an employer to:

     (a)  Recognize in its statement of financial position an asset for a plan's
          overfunded status or a liability for a plan's underfunded status

     (b)  Measure a plan's assets and its obligations that determine its funded
          status as of the end of the employer's fiscal year (with limited
          exceptions)

     (c)  Recognize changes in the funded status of a defined benefit
          postretirement plan in the year in which the changes occur. Those
          changes will be reported in comprehensive income of a business entity.

The requirement to recognize the funded status of a benefit plan and the
disclosure requirements are effective as of the end of the fiscal year ending
after December 15, 2006. The requirement to measure plan assets and benefit
obligations as of the date of the employer's fiscal year-end statement of
financial position is effective for fiscal years ending after December 15, 2008.
We have adopted SFAS 158 as of and for the year-ended December 31, 2006. Due to
the immateriality of our defined benefit pension plans, the impact of the
adoption of SFAS 158 was not significant to our Consolidated Financial
Statements.

In September 2006, the FASB also 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 information 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


                                      T-31

of fair value in any new circumstances. SFAS No. 157 is effective for financial
statements issued for fiscal years beginning after November 15, 2007, and
interim periods within those fiscal years. We do not believe that the adoption
of SFAS No. 157 will have a material impact on our Consolidated Financial
Statements.

In June 2006, the FASB issued Interpretation No. 48, "Accounting for Uncertainty
in Income Taxes" ("FIN 48"), an interpretation of SFAS No. 109, "Accounting for
Income Taxes," to create a single model to address accounting for uncertainty in
tax positions. FIN 48 clarifies the accounting for income taxes, by prescribing
a minimum recognition threshold a tax position is required to meet before being
recognized in the financial statements. FIN 48 also provides guidance on
derecognition, measurement, classification, interest and penalties, accounting
in interim periods, disclosure and transition. FIN 48 is effective for fiscal
years beginning after December 15, 2006. We will adopt FIN 48 as of January 1,
2007, as required. The cumulative effect of adopting FIN 48 will be recorded in
retained earnings and other accounts as applicable. We are evaluating the impact
of FIN 48 but cannot estimate the impact to the financial statements because of
the need to continue to access the sufficiency of its positions with respect to
measurement and recognition, including, but not limited to, transfer pricing.

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


                                      T-32