"We are considering all strategic alternatives and are continuing our discussions with our lenders," executives stated in the earnings report. "In addition, we have suspended our cash dividend, halted or slowed nearly all of our development and redevelopment projects, systematically engaged in certain cost reduction or efficiency programs, reduced our workforce by over 20% and sold certain non-mall assets."
Legal action may be an option in order to protect the company against creditors for all the overdue and coming due debt. "In the event that we are unable to extend or refinance our near and intermediate term loan maturities, we may be required to seek legal protection from our creditors."
Core funds from operations fell in Q4 2008 to $231 million, $0.72 per share, compared to $271.2 million, $0.72 million for Q4 2007. "While the aggregate of minimum rents and tenant recoveries remained essentially flat for the quarter, overall declines in the general economy, and the retail market specifically, impacted our retail properties causing revenue reductions in overage rents and other income (for items including promotion, sponsorship, and parking income)," executives stated. "Cost reductions in marketing, repairs and maintenance, supplies, contracted services, security, landscaping and personnel costs did not fully offset our revenue declines."
Funds from operations was $222.2 million in Q4, up from $190.4 million during the same period the year before.
General Growth owns and manages more than 200 malls in 44 states, for more than 200 million square feet of retail space. At these properties, occupancy dropped slightly from 93.8% at the end of 2007, to 92.5% at the end of 2008. Sales per square foot declined by 4.2% in 2008.
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