Readers of this Quarterly Report should refer to the Company's (as defined below) audited consolidated financial statements for the year ended December 31, ~~2016~~2017 which are included in the Company's Annual Report on Form 10-K (our "Annual Report") for the fiscal year ended December 31, ~~2016~~2017 (Commission File No. 1-34948), as certain footnote disclosures which would substantially duplicate those contained in our Annual Report have been omitted from this Quarterly Report. In the opinion of management, all adjustments necessary for a fair presentation (which include only normal recurring adjustments) have been included in this Quarterly Report. ~~Capitalized~~Unless context otherwise requires, capitalized terms used, but not defined in this Quarterly Report, have the same meanings as in our Annual Report.

GGP Inc. ("GGP" or the "Company"), a Delaware corporation, was organized in July 2010 and is a self-administered and self-managed real estate investment trust, referred to as a "REIT". ~~Effective January 27, 2017, the Company changed its name from General Growth Properties, Inc. to GGP Inc.~~ In these notes, the terms ~~"we,"~~"we", "us" and "our" refer to GGP and its subsidiaries.

GGP, through its subsidiaries and affiliates, is an owner and operator of retail properties. As of June 30, ~~2017,~~2018, we are the owner, either entirely or with joint venture partners, of ~~126~~125 retail properties.

Substantially all of our business is conducted through GGP Operating Partnership, LP ("GGPOP"), GGP Nimbus, LP ("GGPN") and GGP Limited Partnership ("GGPLP", and together with GGPN and GGPOP, the "Operating Partnerships"), subsidiaries of GGP. The Operating Partnerships own an interest in the properties that are part of the consolidated financial statements of GGP. As of June 30, ~~2017,~~2018, GGP held approximately a 99% common equity ownership (without giving effect to the potential conversion of the Preferred Units and LTIP Units, each as defined below) of ~~the Operating Partnerships,~~GGPLP and GGPN, while the remaining 1% was held by limited partners and certain previous contributors of properties to ~~the Operating Partnerships or their predecessors.~~GGPOP.

GGPOP is the general partner of, and owns a 1.5% equity interest in GGPN and GGPLP. GGPOP has common units of limited partnership ("Common Units"), which are redeemable for cash or, at our option, shares of GGP common stock. It also has preferred units of limited partnership interest ("Preferred Units"), of which, certain Preferred Units can be converted into Common Units and then redeemed for cash or, at our option, shares of GGP common stock (Note 9)8). GGPOP also has full value long term incentive plan units and appreciation only long term incentive plan units (collectively "LTIP Units"), which are redeemable for cash or, at our option, shares of GGP common stock (Note ~~11)~~10).

In addition to holding ownership interests in various joint ventures, the Operating Partnerships generally conduct their operations through General Growth Management, Inc. ("GGMI"), General Growth Services, Inc. ("GGSI") and GGPLP REIT Services, LLC ("GGPRS"). GGMI and GGSI are taxable REIT subsidiaries ("TRS"s), which provide management, leasing, tenant coordination, business development, marketing, strategic partnership and other services for a majority of our Unconsolidated Real Estate Affiliates (defined below) and for substantially all of our Consolidated Properties, as defined below. GGSI also serves as a contractor to GGMI for these services. GGPRS generally provides financial, accounting, tax, legal, development, and other services to our Consolidated Properties.

We refer to our ownership interests in properties in which we own a majority or controlling interest and are consolidated under accounting principles generally accepted in the United States of America ("GAAP") as the "Consolidated Properties." We also own interests in certain properties through joint venture entities in which we own a noncontrolling interest ("Unconsolidated Real Estate Affiliates") and we refer to those properties as the "Unconsolidated Properties".

As previously announced, we had reached an agreement with Brookfield Property Partners L.P. ("BPY"), pursuant to which, among other things, BPY will acquire all of our outstanding shares of common stock, other than those that BPY and its affiliates already own. The transactions provide for distribution and consideration per GGP share of up to $23.50 in cash or a choice of either one BPY limited partnership unit or one newly created BPY U.S. REIT share of Brookfield Property REIT Inc. ("BPR"), the successor to GGP, subject to proration in each case, based on aggregate cash amount of $9.25 billion. The BPR shares were structured with the intention of providing an economic return equivalent to BPY units, including identical distributions. BPR shareholders will have the right to exchange each BPR share for one BPY unit or the cash equivalent of one BPY unit at the election of BPY. On

July 26, 2018, the company held a special meeting of its common stockholders. At the special meeting, holders of record of GGP common stock on June 22, 2018, the record date for the special meeting, voted upon and approved the transactions. The completion of the transactions remains subject to certain customary closing conditions. The company expects that the transactions will be completed by the end of August this year.

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 noncontrolling partner's share of the assets, liabilities and operations of the joint ventures (generally computed as the joint venture partner's ownership percentage) is included in noncontrolling interests in consolidated real estate affiliates as permanent equity of the Company. Intercompany balances and

We operate in a single reportable segment, which includes the operation, development and management of retail and other rental properties. Our portfolio is targeted to a range of market sizes and consumer tastes. Each of our operating properties is considered a separate operating segment, as each property earns revenues and incurs expenses, individual operating results are reviewed and discrete financial information is available. The Company's chief operating decision maker is comprised of a team of several members of executive management who use Company NOI in assessing segment operating performance. We do not distinguish or group our consolidated operations based on geography, size or type for purposes of making property operating decisions. Our operating properties have similar economic characteristics and provide similar products and services to our tenants. There are no individual operating segments that are greater than 10% of combined revenue, Company NOI or combined assets. Company NOI excludes certain non-cash and non-comparable items such as straight-line rent, depreciation expense and intangible asset and liability amortization, which are a result of our emergence from bankruptcy, acquisition accounting and other capital contribution or restructuring events. Further, all material operations are within the United States and no customer or tenant comprises more than 10% of consolidated revenues. As a result, the Company's operating properties are aggregated into a single reportable segment.

Real estate assets are stated at cost less any provisions for impairments. Expenditures for significant betterments and improvements are capitalized. Maintenance and repairs are charged to expense when incurred. Construction and improvement costs incurred in connection with the development of new properties or the redevelopment of existing properties are capitalized. Real estate taxes, interest costs, and internal costs associated with leasing and development overhead incurred during construction periods are capitalized. Capitalization is based on qualified expenditures and interest rates. Capitalized real estate taxes, interest costs, and internal costs associated with leasing and development overhead are amortized over lives which are consistent with the related assets.

Pre-development costs, which generally include legal and professional fees and other third-party costs directly related to the construction assets, are capitalized as part of the property being developed. In the event a development is no longer deemed to be probable of occurring, the capitalized costs are expensed (see also our impairment policies in this note below).

We periodically review the estimated useful lives of our properties, and may adjust them as necessary. The estimated useful lives of our properties range from 10-45 years.

Depreciation or amortization expense is computed using the straight-line method based upon the following estimated useful lives:

In November 2016, the FASB issued ASU 2016-18 which requires that a statement of cash flows explain the change during the reporting period in the total of cash, cash equivalents and restricted cash or restricted cash equivalents. The Company adopted this guidance on December 31, 2017, which changes our statements of cash flows and related disclosures for all periods presented. The following is a summary of our cash, cash equivalents and restricted cash total as presented in our statements of cash flows for the six months ended June 30, 2018 and 2017:

For the six months ended June 30, 2017 the changes in restricted cash related to cash flows provided by operating activities of $16.0 million, restricted cash related to cash flows used in investing activities of $0.4 million and restricted cash related to cash flows used in financing activities of $2.8 million were reclassified.

Acquisitions of properties are typically accounted for ~~utilizing the acquisition method~~as acquisitions of ~~accounting and, accordingly,~~assets rather than acquisitions of a business. Accordingly, the results of operations of acquired properties have been included in the results of operations from the respective dates of ~~acquisition.~~acquisition and acquisition costs are capitalized. 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, assumed debt liabilities and identifiable intangible assets and liabilities such as amounts related to in-place tenant leases, acquired above and below-market tenant and ground leases, and tenant relationships.

Identifiable intangible assets and liabilities are calculated for above-market and below-market tenant and ground leases where we are either the lessor or the lessee. The difference between the contractual rental rates and our estimate of market rental rates is

The gross asset balances of the in-place value of tenant leases are included in buildings and equipment in our Consolidated Balance Sheets.

The above-market tenant leases and below-market ground leases are included in prepaid expenses and other assets (Note ~~14)~~13); the below-market tenant leases, above-market ground leases and above-market headquarters office lease are included in accounts payable and accrued expenses (Note ~~15)~~14) in our Consolidated Balance Sheets.

Future amortization/accretion of all intangibles, including the intangibles in Note 1413 and Note ~~15,~~14, is estimated to decrease results from continuing operations as follows:

We account for investments in joint ventures where we own a non-controlling joint interest using either the equity method or the cost method. If we have significant influence but not control over the investment, we utilize the equity method. If we have neither control nor significant influence, we utilize the cost method. Under the equity method, the cost of our investment is adjusted for

To determine the method of accounting for partially owned joint ventures, we evaluate the characteristics of associated entities and determine whether an entity is a variable interest entity ("VIE"). A limited partnership or other similar entity is considered a VIE unless a simple majority of limited partners (excluding limited partners that are under common control with the general partner) have substantive kick-out rights or participating rights. Accounting guidance amended the following: (i) modified the evaluation of whether limited partnerships and similar legal entities are ~~variable interest entities ("VIEs")~~VIEs or voting interest entities, (ii) eliminated the presumption that a general partner should consolidate a limited partnership, (iii) affected the consolidation analysis of reporting entities that are involved with VIEs, and (iv) provided a scope exception for certain entities. If an entity is determined to be a VIE, we determine which party is the primary beneficiary by analyzing whether we have both the power to direct the entity's significant economic activities and the obligation to absorb potentially significant losses or receive potentially significant benefits. Significant judgments and assumptions inherent in this analysis include the nature of the entity's operations, future cash flow projections, the entity's financing and capital structure, and contractual relationship and terms. ~~The adoption of the consolidation guidance did not materially impact our consolidated financial statements.~~

Primary risks associated with our VIEs include the potential of funding the entities' debt obligations or making additional contributions to fund the entities' operations.

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. Except for Retained Debt (as described in Note 5), differences between the carrying amount of our investment in the Unconsolidated Real Estate Affiliates and our share of the underlying equity of our Unconsolidated Real Estate Affiliates are typically amortized over lives ranging from 5 to 45 years. When cumulative distributions exceed our investment in the joint venture, the investment is reported as a liability in our consolidated financial statements. The liability is limited to our maximum potential obligation to fund contractual obligations, including recourse related to certain debt obligations.

Partially owned, ~~non-variable interest~~ joint ventures over which we have controlling financial interest are consolidated in our consolidated financial statements. In determining if we have a controlling financial interest, we consider factors such as ownership interest, authority to

make decisions, kick-out rights and substantive participating rights. Partially owned joint ventures where we do not have a controlling financial interest, but have the ability to exercise significant influence, are accounted for using the equity method.

To the extent that we contribute assets to a joint venture accounted for using the equity method, our investment in the joint venture is recorded at ~~our cost basis in~~the fair value of the consideration of the assets that were contributed to the joint venture. We will recognize gains and losses on the contribution of our real estate to joint ventures, relating ~~solely~~ to our entire investment in the ~~outside partner's interest,~~property, to the extent the buyer is independent of the Company, the collection of the sales price is reasonably assured, and we will not be required to support the operations of the property or its related obligations to an extent greater than our proportionate interest.

The combined summarized financial information of unconsolidated joint ventures is disclosed in Note 5 to the Consolidated Financial Statements.

We continually analyze and assess reconsideration events, including changes in the factors mentioned above, to determine if the consolidation treatment remains appropriate. Decisions regarding consolidation of partially owned entities frequently require significant judgment by our management.

Minimum rents are recognized on a straight-line basis over the terms of the related operating leases, including the effect of any free rent periods. Minimum rents also include lease termination income collected from tenants to allow for the tenant to vacate their space prior to their scheduled termination dates, as well as accretion related to above-market and below-market tenant leases on acquired properties and properties that were recorded at fair value at the emergence from bankruptcy.

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Tenant recoveries are established in the leases or computed based upon a formula related to real estate taxes, insurance and other property operating expenses and are generally recognized as revenues in the period the related costs are incurred.

~~Real~~

Accounting for real estate sales ~~are recognized whenever (1)~~distinguishes between sales to a ~~sale is consummated, (2)~~customer or non-customer for purposes of revenue recognition. Once we, as the ~~buyer has demonstrated an adequate commitment to pay for the property, (3) our receivable is not subject to future subordination, and (4)~~seller, determine that we have ~~transferred~~a contract, we will identify each distinct non-financial asset promised to the ~~buyer~~counter-party and whether the counter-party obtains control and transfers risks and rewards of ownership ~~and do not have continuing involvement. Unless all conditions are met, recognition~~ of ~~all or a portion of~~each non-financial asset to determine if we should derecognize the ~~profit shall be postponed.~~asset.

We provide an allowance for doubtful accounts against the portion of accounts receivable ~~net~~ including straight-line rents, which is estimated to be uncollectible. Such allowances are reviewed ~~periodically~~each period based upon our recovery ~~experience.~~experience and the specific facts of each outstanding amount.

Management fees and other corporate revenues primarily represent management and leasing fees, development fees, financing fees and fees for other ancillary services performed for the benefit of certain of the Unconsolidated Real Estate Affiliates. Management fees are reported at 100% of the revenue earned from the joint venture in management fees and other corporate revenues on our Consolidated Statements of Comprehensive Income. Our share of the management fee expense incurred by the Unconsolidated Real Estate Affiliates is reported within equity in income of Unconsolidated Real Estate Affiliates on our Consolidated Statements of Comprehensive Income and in property management and other costs in the Condensed Combined Statements of Income in Note 5. The following table summarizes the management fees from affiliates and our share of the management fee expense:

Based upon the new revenue recognition guidance, we determined that typical management fees including property and asset management, construction and development management services, leasing services, property acquisition and disposition services and financing services, needed to be evaluated for each separate performance obligation included in the contract in order to determine timing of revenue recognition. Revenues from contracts within the scope of the new revenue recognition guidance were $50.6 million for the six months ended June 30, 2018. Management determined that property and asset management and construction and development management services each represent a series of stand-ready performance obligations satisfied over time with each day of service being a distinct performance obligation. For property and asset management services, we are compensated for our services through a monthly management fee earned based on a specified percentage of the monthly rental income or rental receipts generated from the property under management. For construction and development services, we are compensated for planning, administering and monitoring the design and construction of projects at our joint venture properties typically based on a percentage of project costs, hourly rate of development staff or a fixed fee. Revenues from such contracts were $43.7 million for the six months ended June 30, 2018 and are recognized over the life of the applicable contract.

Conversely, leasing services, property acquisition and disposition services and financing services are each considered to be a single performance obligation, satisfied as of a point in time. Our fee is paid upon the occurrence of certain contractual event(s) that may be contingent and pattern of revenue recognition may differ from the timing of payment. For these services, the obligation is the execution of the lease, closing of the sale or acquisition, or closing of the financing or refinancing. As such, revenues are recognized at the point in time when the respective obligation has been satisfied. Revenues from such contracts were $6.9 million for the six months ended June 30, 2018.

We regularly review our consolidated properties for potential impairment indicators whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. Impairment indicators are assessed separately for each property and include, but are not limited to, significant decreases in real estate property net operating income, significant decreases in occupancy percentage, debt maturities, changes in management's intent with respect to the properties and prevailing market conditions.

If an indicator of potential impairment exists, the property is tested for recoverability by comparing its carrying amount to the estimated future undiscounted cash flows. Although the carrying amount may exceed the estimated fair value of certain properties, a real estate asset is only considered to be impaired when its carrying amount cannot be recovered through estimated future undiscounted cash flows. To the extent an impairment provision is determined to be necessary, the excess of the carrying amount of the property over its estimated fair value is expensed to operations. In addition, the impairment provision is allocated proportionately to adjust the carrying amount of the asset group. The adjusted carrying amount, which represents the new cost basis of the property, is depreciated over the remaining useful life of the property.

Although we may market a property for sale, there can be no assurance that the transaction will be complete until the sale is finalized. However, GAAP requires us to utilize the Company's expected holding period of our properties when assessing recoverability. If we cannot recover the carrying value of these properties within the planned holding period, we will estimate the fair values of the assets and record impairment charges for properties when the estimated fair value is less than their carrying value.

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Impairment charges are recorded in the Consolidated Statements of Comprehensive Income when the carrying value of a property is not recoverable and it exceeds the estimated fair value of the property, which can occur in accounting periods preceding disposition and/or in the period of disposition.

During the ~~three~~six months ended June 30, ~~2016,~~2018, we recorded a ~~$4.1~~$38.4 million impairment charge on our Consolidated Statements of Comprehensive Income related to one operating ~~property. During the period, we received a bona fide purchase offer for the~~ property which was less than its carrying value. During the six months ended June 30, 2016, we recorded a $44.8 million impairment charge on our Consolidated Statements of Comprehensive Income related to three operating properties. During the period, we received bona fide purchase offers for two properties which were less than their respective carrying values. The other property hadthat has non-recourse debt maturing during 2019 that ~~matured during 2016 and exceeded~~exceeds the fair value of the operating property. ~~This property was transferred to a special servicer during 2016 and conveyed to~~No provisions for impairment were recognized for the ~~lender in full satisfaction of the debt during the~~ ~~six~~three months ended June 30, ~~2017~~.2018.

Changes in economic and operating conditions that occur subsequent to our review of recoverability of our properties could impact the assumptions used in that assessment and could result in future impairment if assumptions regarding those properties differ from actual results.

A series of operating losses of an investee or other factors may indicate that an other-than-temporary decline in value of our investment in an Unconsolidated Real Estate Affiliate has occurred. The investment in each of the Unconsolidated Real Estate Affiliates is evaluated for valuation declines below the carrying amount. Accordingly, in addition to the property-specific impairment analysis that we performed for such joint ventures (as part of our operating property impairment process described above), we also considered whether there were other-than-temporary declines with respect to the carrying values of our Unconsolidated Real Estate Affiliates.

No impairments related to our investments in Unconsolidated Real Estate Affiliates were recognized for the three and six months ended June 30, ~~2017~~2018 and ~~2016.~~ 2017.

Changes in economic and operating conditions that occur subsequent to our review of recoverability of our investments in Unconsolidated Real Estate Affiliates could impact the assumptions used in that assessment and could result in future impairment if assumptions regarding those investments differ from actual results.

Notes receivable are evaluated for impairment at least quarterly. Impairment occurs when it is deemed probable that we will not be able to collect all amounts due according to the contractual terms of the loan. If a loan is considered to be impaired, we record an allowance through the provision for loan losses to reduce the carrying value of the loan to the present value of expected future cash flows discounted at the loan’s contractual effective rate or the fair value of the collateral, if repayment is expected solely from the collateral.

No impairments related to our notes receivable were recognized for the three and six months ended June 30, 2018 and 2017.

As of June 30, 2018, a non-refundable deposit of significance was received from the buyer for one property, making the sale probable. Therefore, the property was considered held for disposition as of June 30, 2018. Total assets held for disposition were $120.7 million, which included $119.4 million of net investment in real estate, and total liabilities held for disposition were $100.7 million, which included $100.0 million of mortgages, notes and loans payable. The property was subsequently sold on July 13, 2018 (Note 17).

The accounting principles for fair value measurements establish a three-tier fair value hierarchy, which prioritizes the inputs used in measuring fair value. These tiers include:

Note 4 includes a discussion of properties measured at fair value on a non-recurring basis using Level 2 and Level 3 inputs and the fair value of debt, which is estimated on a recurring basis using Level 2 and Level 3 inputs. Note 98 includes a discussion of certain redeemable noncontrolling interests that are measured at fair value using Level 1 inputs.

Financial instruments that potentially subject us to significant concentrations of credit risk consist principally of cash and cash equivalents. We are exposed to credit risk with respect to cash held at various financial institutions and access to our credit facility. Our credit risk exposure with regard to our cash and the $1.5 billion, including the uncommitted accordion feature, available under our credit facility is spread among a diversified group of investment grade financial institutions. We had ~~$345.0~~$260.0 million outstanding and no amount outstanding ~~balance~~ under our credit facility as of June 30, ~~2017~~2018 and December 31, ~~2016,~~2017, respectively.

Based upon the new revenue recognition guidance, revenue recognized for the three and six months ended June 30, 2018 is not significantly different as compared to what would have been recognized in the same period under guidance that was in effect before the change. Effective January 1, 2018, companies ~~will be~~are required to apply a five-step model in accounting for revenue. The core principle of the revenue model is that a company recognizes revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. Lease contracts ~~will be~~are excluded from this revenue recognition criteria; however, the sale of real estate ~~will be~~is required to follow the new model. Expanded quantitative and qualitative disclosures regarding revenue recognition ~~will be~~are required for contracts that are subject to this pronouncement. The Company has completed a preliminary review of the potential impact of this pronouncement to determine specific areas that will be affected by the adoption of this standard. Once the new guidance setting forth principles for the recognition, measurement, presentation and disclosure of leases (discussed below) goes into effect, the new revenue standard may apply to executory costs and other components of revenue due under leases that are deemed to be non-lease components (such as common area maintenance and provision of utilities), even when the revenue for such activities is not separately stipulated in the lease. In that case, then revenue from these items previously recognized on a straight-line basis under current lease guidance would be recognized under the new revenue guidance as the related services are delivered. As a result, while the total revenue recognized over time would not differ under the new guidance, the recognition pattern would be different. The new standard can be adopted either retrospectively to each prior reporting period presented or on a modified retrospective approach as a cumulative effect adjustment as of the date of adoption. The ~~company is currently evaluating~~Company adopted the model effective January 1, 2018 using the modified retrospective approach for implementation. We elected to use the practical expedient to apply the model only to contracts not yet completed as of the date of adoption. The adoption ~~method that will be used for~~resulted in a cumulative-effect adjustment to increase equity as of January 1, 2018 of approximately $1.90 million related to changes in the ~~implementation.~~revenue recognition pattern of lease commissions earned by the Company from our joint ventures and the sale of condos in our Unconsolidated Real Estate Affiliates (Note 5).

In February 2016, the FASB issued Accounting Standards Update ("ASU") 2016-02 which will require organizations that lease assets to recognize on the balance sheet the assets and liabilities for the rights and obligations created by those leases. Under ASU 2016-02, a lessee will be required to recognize assets and liabilities for leases with lease terms of more than 12 months. Lessor accounting remains substantially similar to current GAAP. However, leasing costs that are currently eligible to be capitalized as initial direct costs are limited by ASU 2016-02. In addition, disclosures of leasing activities are to be expanded to include qualitative along with specific quantitative information. For public entities, ASU 2016-02 is effective for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years. ASU 2016-02 mandates a modified retrospective transition method. The Company ~~is evaluating~~expects to adopt this guidance on January 1, 2019 and will continue to evaluate the potential impact of this pronouncement on its consolidated financial ~~statements.~~statements until the guidance becomes effective.

In March 2016, the FASB issued ASU 2016-07 which eliminates the requirement for retrospective application of equity method accounting when an investment previously accounted for by another method initially qualifies for the equity method. This standard is effective for all entities for fiscal years beginning after December 15, 2016 with earlier application permitted. The adoption of this standard did not materially impact the Company's consolidated financial statements.

In June 2016, the FASB issued ASU 2016-13 which changes the model for the measurement of credit losses on financial instruments. Specifically, the amendments in the ASU replace the incurred loss impairment methodology in current GAAP with a methodology that reflects expected credit losses and requires consideration of a broader range of reasonable and supportable information to inform credit loss estimates. The amendments in this ASU will be effective for the Company January 1, 2020 with early adoption permitted on January 1, 2019. The Company is evaluating the potential impact of this pronouncement on its consolidated financial statements.

In ~~August~~October 2016, the FASB issued ASU ~~2016-15~~2016-16 which ~~provides guidance on~~changed the ~~statement of cash flows presentation of certain transactions where diversity in practice exists. The effective date will~~current income tax accounting for intra-entity asset sales to be ~~the first quarter of fiscal year 2019, with early adoption permitted. The ASU will be adopted using a retrospective transition approach.~~only for inventory. The Company ~~is evaluating~~adopted this standard effective January 1, 2018. For those companies that did not recognize the ~~potential~~income tax impact of ~~this pronouncement~~a sale other than inventory before the adoption date, the new ASU was applied on ~~its Consolidated Statements of Cash Flows.~~

basis, with a cumulative-effect adjustment directly to retained earnings as of January 1, 2018. This resulted in a cumulative-effect adjustment to decrease retained earnings by the unamortized balance of the $18.8 million prepaid asset established in December 2016.

In November 2016, the FASB issued ASU 2016-18 which requires that a statement of cash flows explain the change during the reporting period in the total of cash, cash equivalents and restricted cash or restricted cash equivalents. This standard is effective for public entities for fiscal years beginning after December 15, 2017, and interim periods within those fiscal years. Early adoption is permitted, including adoption in an interim period. If an entity early adopts the amendments in an interim period, any adjustments should be reflected as of the beginning of the fiscal year that includes that interim period. The Company ~~is evaluating the potential impact of this pronouncement on its Consolidated Statements of Cash Flows.~~

In February 2017, the FASB issued ASU 2017-05 which clarifies the accounting for the derecognition of nonfinancial assets by eliminating the exception in current GAAP for transfers of investments in real estate entities (including equity method investments). The amendments in this update provide guidance on the accounting of partial sales of nonfinancial assets and contributions of nonfinancial assets to a joint venture or other noncontrolling investee. Once this guidance is adopted, an entity would use the guidance in the new revenue recognition standard (discussed above) to determine whether it is transferring multiple, distinct assets and would recognize a gain or loss for each distinct asset transferred. When an entity transfers nonfinancial assets included in a subsidiary and retains or receives an equity interest, it first determines whether it has retained a controlling financial interest in the subsidiary. If so, the entity does not derecognize the assets and accounts for the sale of noncontrolling interest in the subsidiary under the consolidation guidance covering decreases in ownership which would result in recognizing a gain or ~~loss in equity.~~loss. If an entity retains or receives a noncontrolling interest in the entity that owns the asset post-sale, that noncontrolling interest is considered noncash consideration and is included in the transaction price at its fair value. The retained noncontrolling interest is included at its fair value and results in an entity recognizing 100% of the gain on sale of the ~~asset which differs from current applicable GAAP.~~ ~~Public entities should~~asset. The Company adopted this standard as of January 1, 2018 using the modified retrospective approach for implementation. We elected to use the practical expedient to apply the ~~amendments in this~~ standard only to ~~annual periods beginning after December 15, 2017, including interim periods within those periods.~~ ~~Entities are required to adopt this standard in conjunction with~~contracts not yet completed as of the ~~new revenue recognition standard which we will adopt on January 1, 2018.~~ date of adoption. The adoption ~~of this standard~~ will result in higher gains on ~~the sale~~future sales of partial real estate interests due to recognizing 100% of the gain on the sale of the partial interest and recording the retained noncontrolling interest at fair value. As of the adoption date, January 1, 2018, there was no cumulative-effect adjustment recorded to retained earnings.

The preparation of financial statements in conformity with GAAP 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 periods. For example, estimates and assumptions have been made with respect to ~~fair values~~allocating the purchase price of ~~assets and liabilities for purposes of applying the acquisition method of accounting,~~real estate acquisitions, the useful lives of assets, capitalization of development and leasing costs, provision for income taxes, recoverable amounts of receivables and deferred taxes, provision for loan loss, initial valuations and related amortization periods of deferred costs and intangibles, particularly with respect to acquisitions, impairment of long-lived assets, litigation related accruals and disclosures and fair value of debt. Actual results could differ from these and other estimates.

On January 29, 2018, we completed the sale of a 49.49% joint venture interest in the Sears Box at Oakbrook Center for a sales price of $44.7 million, which resulted in a gain of $12.7 million recognized in gain from changes in control of investment properties and other for the six months ended June 30, 2018.

On September 15, 2016, joint ventures we formed with Simon Property Group and Authentic Brands Group LLC ("ABG") acquired Aeropostale, Inc. ("Aeropostale") for $80.0 million in total cash which included cash for working capital requirements of the retail business. The intellectual property and brand related assets were assigned to the Aero IpCo, LLC venture ("IPCO") and the assets and liabilities necessary to run the stores were assigned to the Aero OpCo, LLC venture ("OPCO"). In connection with the transaction, our total investment was $20.4 million of cash contributed to the ventures for an effective ownership of approximately 26% in the two joint ventures. Aeropostale is a tenant at certain properties for which we receive rental income included in minimum rents on the Consolidated Statements of Operations and Comprehensive Income.

On December 29, 2017, we sold approximately 54% of our interest in IPCO to ABG for a sales price of $16.6 million, which resulted in a gain of $12.0 million recognized in Unconsolidated Real Estate Affiliates - gain on investment on our Consolidated Statements of Comprehensive Income for the year ended December 31, 2017. On March 30, 2018, ABG exercised their call right to purchase our remaining 46% interest in IPCO for a sales price of $13.9 million, which resulted in a gain of $10.4 million recognized in Unconsolidated Real Estate Affiliates - gain on investment on our Consolidated Statements of Comprehensive Income for the six months ended June 30, 2018. In addition, we invested $30.5 million in ABG units on December 29, 2017. The investment is considered a cost method investment and is included in investment in Unconsolidated Real Estate Affiliates on the Consolidated Balance Sheets.

On June 30, 2017, we conveyed Lakeside Mall to the lender in full satisfaction of $144.5 million in outstanding debt. This transaction resulted in a $55.1 million gain on extinguishment of ~~debt.~~debt for the three and six months ended June 30, 2017.

On June 9, 2017, we closed on the acquisition of our joint venture partner's 50% interest in Neshaminy Mall located in Bensalem, Pennsylvania for a gross purchase price of $65.0 million. Post acquisition, we own 100% of the mall. Prior to the acquisition of the remaining interest, the carrying value for our investment was $55.2 million. As a result of this acquisition, the implied fair value of our previous investment in Neshaminy Mall is $33.7 million, resulting in a loss of $21.5 million, recognized in loss from changes in control of investment properties and other for the three and six months ended June 30, 2017.

We estimate fair value relating to impairment assessments based upon discounted cash flow and direct capitalization models that include all projected cash inflows and outflows over a specific holding period, or the negotiated sales price, if applicable. Such projected cash flows are comprised of contractual rental revenues and forecasted rental revenues and expenses based upon market conditions and expectations for growth. Capitalization rates and discount rates utilized in these models are based on a reasonable range of current market rates for each property analyzed. Based upon these inputs, we determined that our valuations of properties using a discounted cash flow or a direct capitalization model were classified within Level 3 of the fair value hierarchy. For our properties for which the estimated fair value was based on negotiated sales prices, we determined that our valuation was classified within Level 2 of the fair value hierarchy.

The following table summarizes certain of our assets that are measured at fair value on a nonrecurring basis as a result of impairment charges recorded during the six months ended June 30, 2018. No impairment charges were recognized during the six months ended June 30, 2017.



	Total Fair Value Measurement		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		Provisions for Impairment
Six Months Ended June 30, 2018
Investments in real estate (1)	$	71,181	$	—	$	—	$	71,181	$	38,379



Unobservable Quantitative Input		Rate
Discount rates		9.75%
Terminal capitalization rates		10.25%

The fair values of our financial instruments approximate their carrying amount in our consolidated financial statements except for debt. Management's estimates of fair value are presented below for our debt as of June 30, ~~2017~~2018 and December 31, ~~2016.~~2017.

The fair value of our Junior Subordinated Notes approximates their carrying amount as of June 30, ~~2017~~2018 and December 31, ~~2016.~~2017. We estimated the fair value of mortgages, notes and other loans payable using Level 2 and Level 3 inputs based on recent financing transactions, estimates of the fair value of the property that serves as collateral for such debt, historical risk premiums for loans of comparable quality, current LIBOR, U.S. treasury obligation interest rates and on the discounted estimated future cash payments to be made on such debt. The discount rates estimated reflect our judgment as to what the approximate current lending rates for loans or groups of loans with similar maturities and assume that the debt is outstanding through maturity. We have utilized market information as available or present value techniques to estimate the amounts required to be disclosed. Since such amounts are estimates that are based on limited available market information for similar transactions and do not acknowledge transfer or other repayment restrictions that may exist in specific loans, it is unlikely that the estimated fair value of any such debt could be realized by immediate settlement of the obligation.

Following is summarized financial information for all of our real estate related Unconsolidated Real Estate Affiliates accounted for using the equity method and a reconciliation to our total investment in Unconsolidated Real Estate Affiliates. The reconciliation to our total investment in Unconsolidated Real Estate Affiliates is inclusive of investments accounted for using the cost method (Note 2).

(2) Includes management fees charged to the unconsolidated joint ventures by GGMI and GGSI.

The Unconsolidated Real Estate Affiliates represent our investments in real estate joint ventures that are not consolidated. We hold interests in 22 domestic joint ventures, comprising 38 U.S. retail properties and one joint venture in Brazil. Generally, we share in the profits and losses, cash flows and other matters relating to our investments in Unconsolidated Real Estate Affiliates in

On June 1, 2017, we received an additional 7.3% of our joint venture partner's membership interests in Miami Design District in full satisfaction of two promissory notes for $57.6 million and $40.4 million, respectively, resulting in a total ownership of 22.3% ~~(Note 13)~~. We determined that we had significant influence over the investment subsequent to the acquisition of the additional interest, and therefore we changed our method of accounting for this joint venture from the cost method to the equity method (Note 2).

On July 12, 2017, we closed on the acquisition of the remaining 50% interest in 8 anchor boxes included in the GSPH joint venture with Seritage. We had previously owned a 50% interest in the joint venture and accounted for the joint venture using the equity method of accounting, but as a result of the transaction we now account for this joint venture using the consolidation method of accounting. Simultaneously, we distributed the 4 remaining anchor boxes in GSPH to a newly formed joint venture, GSPHII, between GGP and Seritage in which the ownership interest remains at 50% for both joint venture partners, and we continue to account for this joint venture using the equity method of accounting. Finally, we acquired a 50% interest in 5 anchor boxes through a newly formed joint venture, GSPH2017, which we account for using the equity method of accounting.

On September 19, 2017, we entered into three transactions with affiliates of Thor related to joint ventures between GGP and Thor at 218 West 57th Street, 530 Fifth Avenue and 685 Fifth Avenue. As a result of these transactions, we changed our method of accounting for these three joint ventures from the equity method of accounting. We now consolidate the joint ventures with our joint venture partner's share of equity included in noncontrolling interest.

On March 7, 2014, GGP formed a joint venture, AMX Partners, LLC, with Kahikolu Partners, LLC, for the purpose of constructing a luxury residential condominium tower (the Park Lane condominium project) on a site located within the Ala Moana Shopping Center. Under the previous revenue recognition guidance, the percentage of completion method was used to account for the sales revenue of the Park Lane condominium project. Upon adoption of the new revenue recognition standard (Note 2), risks and rewards of ownership and control over the condominium unit transfers upon the closing of the sale to the customer, and as such, the joint venture will recognize revenue for the condominium unit upon closing.

Our proportionate share of the mortgages, notes and loans payable of the unconsolidated joint ventures was ~~$5.4~~$5.1 billion as of June 30, ~~2017~~2018 and December 31, ~~2016,~~2017, including Retained Debt (as defined below). There can be no assurance that the Unconsolidated Properties will be able to refinance or restructure such debt on acceptable terms or otherwise, or that joint venture operations or contributions by us and/or our partners will be sufficient to repay such loans.

We have debt obligations in excess of our pro rata share of the debt for one of our Unconsolidated Real Estate Affiliates ("Retained Debt"). This Retained Debt represents distributed debt proceeds of the Unconsolidated Real Estate Affiliates in excess of our pro rata share of the non-recourse mortgage indebtedness. The proceeds of the Retained Debt which were distributed to us are included as a reduction in our investment in Unconsolidated Real Estate Affiliates. We had retained debt of ~~$85.7~~$84.1 million at one property as of June 30, ~~2017,~~2018, and ~~$86.5~~$85.2 million as of December 31, ~~2016.~~2017. We are obligated to contribute funds on an ongoing basis, as needed, to our Unconsolidated Real Estate Affiliates in amounts sufficient to pay debt service on such Retained Debt. If we do not contribute such funds, our distributions from such Unconsolidated Real Estate Affiliates, or our interest in, could be reduced to the extent of such deficiencies. As of June 30, ~~2017,~~2018, we do not anticipate an inability to perform on our obligations with respect to Retained Debt.

As of June 30, ~~2017, $16.5~~2018, $18.2 billion of land, buildings and equipment (before accumulated depreciation) and construction in progress have been pledged as collateral for our mortgages, notes and loans payable. Certain of these consolidated secured loans, representing $1.4 billion of debt, are ~~cross-collateralized with other properties.~~cross-collateralized. Although a majority of the ~~$12.2~~$12.7 billion of fixed and variable rate collateralized mortgages, notes and loans payable are non-recourse, ~~$817.6~~$808.4 million of such mortgages, notes and loans payable are recourse to the Company as guarantees on secured financings. In addition, certain mortgage loans contain other credit enhancement provisions which have been provided by GGP. Certain mortgages, notes and loans payable may be prepaid but are generally subject to a prepayment penalty equal to a yield-maintenance premium, defeasance or a percentage of the loan balance.

During the six months ended June 30, 2018, we refinanced a consolidated mortgage note at 685 Fifth Avenue. The prior $340.0 million variable-rate consolidated mortgage note matured on July 1, 2018 and had an interest rate of LIBOR plus 2.75%. In connection with the refinancing, $100.0 million remained related to the commercial office unit and a new $275.0 million fixed-rate consolidated mortgage note with a term-to-maturity of 10.0 years and an interest rate of 4.53% was obtained on the retail unit. The $100.0 million was paid down in full in conjunction with the sale of the commercial office unit on July 13, 2018 (Note 17 ).

During the year ended December 31, 2017, we paid down a $73.4 million consolidated mortgage note at ~~one property.~~Four Seasons Town Centre. The prior loan had a term-to-maturity of 0.2 years and an interest rate of 5.6%. ~~The property~~Four Seasons Town Centre subsequently replaced a property that was sold during the ~~six months~~year ended ~~June 30,~~December 31, 2017 as collateral in our $1.4 billion loan secured by cross-collateralized mortgages on 1514 properties.

Our $1.4 billion loan is secured by cross-collateralized mortgages on 14 properties. The interest rate is LIBOR plus 1.75% and the recourse is 50%. The loan matures on April 25, 2019, with two one year extension options.

We have certain unsecured debt obligations, the terms of which are described below:

Our revolving credit facility (the "Facility") as amended on October 30, 2015, provides for revolving loans of up to $1.1 billion. The Facility has an uncommitted accordion feature for a total facility of up to $1.5 billion. The Facility is scheduled to mature in October 2020 and is unsecured. Borrowings under the Facility bear interest at a rate equal to LIBOR plus 130 to 190 basis points or at a base rate plus 30 to 90 basis points, which is determined by the Company's leverage level. The Facility contains certain restrictive covenants which limit material changes in the nature of our business conducted, including, but not limited to, mergers, dissolutions or liquidations, dispositions of assets, liens, incurrence of additional indebtedness, dividends, transactions with affiliates, prepayment of subordinated debt, negative pledges and changes in fiscal periods. In addition, we are required not to exceed a maximum net debt-to-value ratio, a maximum leverage ratio and a minimum net cash interest coverage ratio; we are not aware of any instances of non-compliance with such covenants as of June 30, ~~2017.~~2018. As of June 30, ~~2017, $345.0~~2018, $260.0 million was outstanding on the ~~Facility.~~Facility, including $100.0 million categorized as held for disposition as of June 30, 2018 (Note 2).

GGP Capital Trust I, a Delaware statutory trust (the "Trust") and a wholly-owned subsidiary of GGPN, completed a private placement of $200.0 million of trust preferred securities ("TRUPS") in 2006. The Trust also issued $6.2 million of Common Securities to GGPOP. 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~~Subordinated Notes of GGPOP due 2036. Distributions on the TRUPS are 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 Junior ~~subordinated notes.~~Subordinated Notes. The Junior ~~subordinated notes~~Subordinated Notes bear interest at LIBOR plus 1.45% and are fully recourse to the Company. ~~Though the Trust currently is a wholly-owned subsidiary of GGPN, we are not the primary beneficiary of the Trust and, accordingly, it is not consolidated for accounting purposes.~~ We have recorded the Junior ~~subordinated notes~~Subordinated Notes as a liability and our common equity interest in the Trust as prepaid expenses and other assets in our Consolidated Balance Sheets as of June 30, ~~2017~~2018 and December 31, ~~2016.~~2017.

We had outstanding letters of credit and surety bonds of ~~$57.9~~$42.4 million as of June 30, ~~2017~~2018 and ~~$57.8~~$51.3 million as of December 31, ~~2016.~~2017. These letters of credit and bonds were issued primarily in connection with insurance requirements, special real estate assessments and construction obligations.

We are not aware of any instances of non-compliance with our financial covenants related to our mortgages, notes and loans payable as of June 30, ~~2017.~~2018.

We have elected to be taxed as a REIT under the Internal Revenue Code. We intend to maintain REIT status. To qualify as a REIT, the Company must meet a number of organizational and operational requirements, including a requirement to distribute at least 90% of our taxable ordinary income. In addition, the Company is required to meet certain asset and income tests.

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 and capital gains. We are currently statutorily open to audit by the Internal Revenue Service for the years ended December 31, ~~2013~~2014 through ~~2016~~2017 and are statutorily open to audit by state taxing authorities for the years ended December 31, ~~2012~~2013 through ~~2016.~~2017. We have one TRS that has extended the statute of limitations for the year ended December 31, 2013 until September 30, 2018 for purposes of reviewing a carryback claim.

Noncontrolling interests consists of the redeemable interests related to GGPOP Common, Preferred, and LTIP Units and the noncontrolling interest in our consolidated joint ventures. The following table reflects the activity included in the allocation to noncontrolling interests.

The noncontrolling interest related to the Common, Preferred, and LTIP Units of GGPOP are presented either as redeemable noncontrolling interests in mezzanine equity or as noncontrolling interests in our permanent equity on our Consolidated Balance Sheets. Classification as redeemable or permanent equity is considered on a tranche-by-tranche basis and is dependent on whether we could be required, under certain events outside of our control, to redeem the securities for cash by the holders of the securities. Those tranches for which we could be required to redeem the security for cash are included in redeemable equity. If we control the decision to redeem the securities for cash, the securities are classified as permanent equity.

The redeemable Common and Preferred Units of GGPOP are recorded at the greater of the carrying amount adjusted for the noncontrolling interest's share of the allocation of income or loss (and its share of other comprehensive income or loss) and dividends or their redemption value (i.e. fair value) as of each measurement date. The excess of the fair value over the carrying amount from period to period is recorded within additional paid-in capital in our Consolidated Balance Sheets. Allocation to noncontrolling interests is presented as an adjustment to net income to arrive at net income (loss) attributable to GGP Inc.

The common redeemable noncontrolling interests have been recorded at fair value for all periods presented. ~~One tranche of preferred redeemable noncontrolling interests has been recorded at fair value, while the other tranches of~~The preferred redeemable noncontrolling interests have been recorded at carrying value.

Generally, the holders of the Common Units share in any distributions by GGPOP with our common stockholders. However, the GGPOP operating partnership agreement permits distributions solely to GGP if such distributions were required to allow GGP to comply with the REIT distribution requirements or to avoid the imposition of excise tax. Under certain circumstances, the conversion rate for each Common Unit is required to be adjusted to give effect to stock distributions. If the holders had requested redemption of the Common and Preferred Units as of June 30, ~~2017,~~2018, the aggregate amount of cash we would have paid would have been ~~$197.3~~$171.1 million and ~~$52.5~~$52.3 million, respectively.

GGPOP issued Preferred Units that are, or were, convertible into Common Units of GGPOP at the rates below (subject to adjustment). The holder may convert the Series D and Series E Preferred Units into Common Units of GGPOP at any time, subject to certain restrictions. The Common Units are convertible into common stock at approximately a one-to-one ratio at the current stock price.



	Number of Common Units for each Preferred Unit	Number of Contractual Preferred Units Outstanding as of June 30, 2018 (in thousands)	Converted Basis to Common Units Outstanding as of June 30, 2018 (in thousands)	Conversion Price		Redemption Value (1) (in thousands)
Series B	3.00000	10	—	$	16.66670	$	486
Series D	1.50821	533	835	33.15188		26,637
Series E	1.29836	503	679	38.51000		25,133
						$	52,256

The following table reflects the activity of the common redeemable noncontrolling interests for the six months ended June 30, 2018, and 2017.



Balance at January 1, 2017	$	262,727
Net income	1,251
Distributions	(2,887		)
Redemption of GGPOP units	(651		)
Other comprehensive loss	(315		)
Fair value adjustment for noncontrolling interests in Operating Partnership	(10,346		)
Balance at June 30, 2017	$	249,779

Balance at January 1, 2018	$	248,126
Net income	1,378
Distributions	(3,684		)
Other comprehensive loss	(86		)
Fair value adjustment for noncontrolling interests in Operating Partnership	(22,395		)
Balance at June 30, 2018	$	223,339

Our Board of Directors declared common stock dividends during ~~2017~~2018 and ~~2016~~2017 as follows:

Declaration Date Record Date Payment Date Dividend Per Share
2017
August 2 October 13, 2017 October 31, 2017 $ 0.22
May 1 July 13, 2017 July 28, 2017 0.22
January 30 April 13, 2017 April 28, 2017 0.22
2016
December 13 December 27, 2016 January 27, 2017 $ 0.26
October 31 December 15, 2016 January 6, 2017 0.22
August 1 October 14, 2016 October 31, 2016 0.20
May 2 July 15, 2016 July 29, 2016 0.19
February 1 April 15, 2016 April 29, 2016 0.19

Our Dividend Reinvestment Plan ("DRIP") provides eligible holders of GGP's common stock with a convenient method of increasing their investment in the Company by reinvesting all or a portion of cash dividends in additional shares of common stock. Eligible stockholders who enroll in the DRIP on or before the fourth business day preceding the record date for a dividend payment will be able to have that dividend reinvested. As a result of the DRIP elections, 11,239 shares were issued during the six months ended June 30, 2018 and 28,693 shares were issued during the six months ended June 30, ~~2017 and 13,990 shares were issued during the six months ended June 30, 2016.~~2017.

On February 13, 2013, we issued, in a public offering, 10,000,000 shares of 6.375% Series A Cumulative Perpetual Preferred Stock (the "Preferred Stock") at a price of $25.00 per share, resulting in net proceeds of $242.0 million after issuance costs. The Preferred Stock is recorded net of issuance costs within equity on our Consolidated Balance Sheets, and accrues a quarterly dividend at an annual rate of 6.375%. The dividend is paid in arrears in preference to dividends on our common stock, and reduces net income available to common stockholders, and therefore, earnings per share.

The Preferred Stock does not have a stated maturity date but we may redeem the Preferred Stock after February ~~13,~~12, 2018, for $25.00 per share plus all accrued and unpaid dividends. We may redeem the Preferred Stock prior to February ~~13,~~12, 2018, in limited circumstances that preserve ownership limits and/or our status as a REIT, as well as during certain circumstances surrounding a change of control. Upon certain circumstances surrounding a change of control, holders of Preferred Stock may elect to convert each share of their Preferred Stock into a number of shares of GGP common stock equivalent to $25.00 plus accrued and unpaid dividends, but not to exceed a cap of 2.4679 common shares (subject to certain adjustments related to GGP common share splits, subdivisions, or combinations).

Our Board of Directors declared preferred stock dividends during ~~2017~~2018 and ~~2016~~2017 as follows:

Declaration Date Record Date Payment Date Dividend Per Share
2017
August 2 September 15, 2017 October 2, 2017 $ 0.3984
May 1 June 15, 2017 July 3, 2017 0.3984
January 30 March 15, 2017 April 3, 2017 0.3984
2016
October 31 December 15, 2016 January 3, 2017 $ 0.3984
August 1 September 15, 2016 October 3, 2016 0.3984
May 2 June 15, 2016 July 1, 2016 0.3984
February 1 March 15, 2016 April 1, 2016 0.3984

The following table reflects the activity of the components of accumulated other comprehensive loss for the three months ended June 30, ~~2017,~~2018, and ~~2016:~~2017:

The following table reflects the activity of the components of accumulated other comprehensive loss for the six months ended June 30, ~~2017,~~2018, and ~~2016:~~2017:

Foreign currency translation Net unrealized gains (losses) on other financial instruments Reclassification adjustment for realized gains on available-for-sale securities included in net income Total
Balance at January 1, 2016 $ (84,798 ) $ 100
$ 11,894
$ (72,804 )
Other comprehensive income (loss) 15,547
20
(11,894 ) 3,673
Balance at June 30, 2016 $ (69,251 ) $ 120
$ —
$ (69,131 )

Balance at January 1, 2017 $ (70,560 ) $ 104
$ —
$ (70,456 )
Other comprehensive income (loss) (1,147 ) 10
—
(1,137 )
Balance at June 30, 2017 $ (71,707 ) $ 114
$ —
$ (71,593 )

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 effect of the ~~Warrants~~warrants and the dilutive effect of options and their equivalents (including fixed awards and nonvested stock issued under stock-based compensation plans), are computed using the "treasury" method.

Information related to our EPS calculations is summarized as follows:

For the three and six months ended June 30, 2017, ~~and 2016,~~ dilutive options and dilutive shares related to the ~~Warrants~~warrants are included in the denominator of diluted EPS.

Outstanding Common Units and LTIP Units have also been excluded from the diluted earnings per share calculation because including such units would also require that the share of GGPOP income attributable to such units be added back to net income therefore resulting in no effect on EPS. Outstanding Preferred Units have been excluded from the diluted EPS calculation for all periods presented because including the Preferred Units would also require that the Preferred Units dividend be added back to the net income, resulting in anti-dilution.

During the year ended December 31, 2017, Brookfield, Abu Dhabi Investment Authority and Future Fund Board of Guardians exercised warrants for 83,866,187 shares of common stock using both full and net share settlement.

GGP owned 55,969,390 shares of treasury stock as of June 30, ~~2017~~2018 and ~~2016.~~2017. These shares are presented as common stock in treasury, at cost, on our Consolidated Balance Sheets. Additionally, GGPN holds 27,459,195 shares of stock as a result of warrants purchased during the year ended December 31, 2013. These shares are presented as issued, but not outstanding on our Consolidated Balance Sheets. Accordingly, these shares have been excluded from the calculation of EPS.

The GGP Inc. 2010 Equity Plan (the "Equity Plan") reserved for issuance of 4% of outstanding shares on a fully diluted basis. The Equity Plan provides for grants of nonqualified stock options, incentive stock options, stock appreciation rights, restricted stock, other stock-based awards and performance-based compensation (collectively, the "Awards"). Directors, officers and other employees of GGP and its subsidiaries and affiliates are eligible for the Awards. The Equity Plan is not subject to the Employee Retirement Income Security Act of 1974, as amended. No participant may be granted more than 4,000,000 shares, or the equivalent dollar value of such shares, in any year. Options granted under the Equity Plan will be designated as either nonqualified stock options or incentive stock options. An option granted as an incentive stock option will, to the extent it fails to qualify as an incentive stock option, be treated as a nonqualified option. The exercise price of an option may not be less than the fair value of a share of GGP's common stock on the date of grant. The term of each option will be determined prior to the date of grant, but may not exceed 10 years.

On November 12, 2014, the Company's Equity Plan was amended to allow for the grant of LTIP Units to certain officers, directors, and employees of the Company as an alternative to the Company's stock options or restricted stock. LTIP Units are classes of partnership interests that under certain conditions, including vesting, are convertible by the holder into common units, which are redeemable by the holder for common shares on a one-to-one ratio (subject to adjustment for changes to GGP's capital structure) or for the cash value of such shares at the option of the Company.

On February 17, 2016, the Company's Equity Plan was amended to allow for the grant of restricted stock or LTIP Units to certain officers, directors, and employees of the Company that vest based on the achievement of certain established metrics that are based on the performance of the Company.

On January 1, 2017, the Company adopted ASU 2016-09, Compensation - Stock Compensation. This new guidance allowed us to make the election to account for share-based payment forfeitures when they occur versus estimating a forfeiture rate. This resulted in a cumulative effect of accounting change adjustment of $3.0 million to additional paid-in capital, noncontrolling interests related to LTIP Units and accumulated distributions in excess of earnings as of January 1, 2017.

Compensation expense related to stock-based compensation plans for the three and six months ended June 30, ~~2017,~~2018, and ~~2016~~2017 is summarized in the following table in thousands:

The following tables summarize stock option, LTIP Unit and restricted stock activity for the Equity Plan for GGP for the six months ended June 30, ~~2017,~~2018 and ~~2016:~~2017:

On ~~November 11, 2015,~~July 12, 2017, we entered into a promissory note with our joint venture ~~partner, Ashkenazy Holding Co.,~~GS Portfolio Holdings II, LLC ("~~AHC"~~GSPHII"), in which we lent ~~AHC $57.6~~GSPHII $127.4 million that bears interest at ~~8% per annum.~~6.3% from January 1, 2018 until the note matures on December 31, 2018. Interest payments occur a month in arrears, commencing on the first day of the second calendar month with a final payment on the maturity date. The note ~~was~~is collateralized by ~~AHC's equity~~GSPHII's interest in Miami Design District Associates, which is part of the AACMDD Group, LLC joint venture ("AACMDD"). On November 18, 2016, the maturity date of the note was amended to November 15, 2019. On June 1, 2017, AHC conveyed the collateral of the note in full satisfaction of the receivable and $2.6 million in accrued interest.

On May 23, 2017, we entered into a promissory note with our joint venture partner, Bayside Equities, LLC ("Bayside Equities"), a subsidiary of AHC, in which we lent Bayside Equities $19.1 million that bears interest at 12.2% per annum. The note is collateralized by Bayside Equities' economic interest in Riverchase Galleria and the Tysons Galleria anchor ~~box.~~

Notes receivable includes $204.3 million of notes receivable from our joint venture partners related to the acquisition of 730 Fifth Avenue in New York, New York. The first note was issued for $104.3 million to our joint venture partner in the retail portion and bears interest at 8.0% compounded annually and matures on February 12, 2025. The second note was issued for $100.0 million to the joint venture partner acquiring the office portion of the property and bears interest at ~~9.0%~~8.0% subject to terms and conditions in the loan agreement and matures on April 17, 2025. As of June 30, ~~2017,~~2018, there was ~~$150.0 million and $100.0~~$175.8 million outstanding on ~~these loans, respectively (Note 18).~~

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 effect on our consolidated financial position, results of operations or liquidity. ~~Neither~~

GGP is subject to litigation related to the ~~Company~~agreements with BPY (Note 1). GGP cannot predict the outcome of pending litigation, nor ~~any~~can it predict the amount of ~~the Unconsolidated Real Estate Affiliates is currently involved in any material pending legal proceedings nor,~~time and expense that will be required to ~~our knowledge, is any material legal proceeding currently threatened against the Company or any of the Unconsolidated Real Estate Affiliates.~~resolve such litigation.

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, to the extent applicable.~~lease. The following is a summary of our contractual rental expense as presented in our Consolidated Statements of Comprehensive Income:

On July ~~7, 2017, we received~~2, 2018, the company obtained a ~~$20.0 million payment from our joint venture partner in the office portion on a~~new fixed-rate loan at Plaza Frontenac for $100.0 million ~~note receivable related to the acquisition~~with an interest rate of ~~730 Fifth Avenue in New York, New York (Note 13)~~4.43%. The loan replaced a fixed-rate loan of $52.0 million with an interest rate of 3.04%.

On July 12, ~~2017, we closed on two transactions~~2018, the company obtained a new fixed-rate subordinate loan at The Woodlands Mall for $62.4 million with ~~Seritage Growth Properties for gross consideration~~an interest rate of $247.6 million. Pursuant to the transactions, we (i) acquired the remaining 50% interest in eight of the 12 assets in the existing joint venture between the two companies for $190.1 million which includes a deferred payment of $63.7 million due no later than December 31, 2018; and (ii) acquired a 50% joint venture interest in five additional assets for $57.5 million. We provided a loan of $127.4 million to four of the original 12 assets that are still in a joint venture with Seritage Growth Properties.4.05%.

On ~~August 2, 2017,~~July 12, 2018, the company obtained a new fixed-rate loan at Christiana Mall for $550.0 million with an interest rate of 4.28%. The loan replaced a fixed-rate loan of $225.0 million with an interest rate of 5.10%.

On July 13, 2018, the company completed the sale of the commercial office unit at 685 Fifth Avenue for a gross sales price of $135.0 million. In conjunction with the sale, we ~~received~~paid down a ~~$17.2~~$100.0 million ~~payment from our joint venture partner MKB (defined in Note 5) as payment in full on a note receivable~~loan. The assets and liabilities related to the ~~construction~~685 Fifth Avenue office property were classified as held for sale on the Consolidated Balance Sheets as of ~~a luxury residential condominium tower on a site located within the Ala Moana Shopping Center (Note 13).~~June 30, 2018.

On July 26, 2018, the company held a special meeting of its common stockholders. At the special meeting, holders of record of GGP common stock on June 22, 2018, the record date for the special meeting, voted upon and approved the transactions. The completion of the transactions remains subject to certain customary closing conditions. The company expects that the transactions will be completed by the end of August this year.

All references to numbered Notes are to specific footnotes to our consolidated financial statements included in this Quarterly Report and whose 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.

Our primary business is owning and operating best-in-class retail properties that provide an outstanding environment and experience for our communities, retailers, employees, consumers and ~~shareholders.~~stockholders. We are an S&P 500 real estate company with a property portfolio comprised primarily of Class A retail properties (defined primarily by sales per square foot) and urban retail properties. GGP Inc. defines best-in-class retail and modern luxury through curated merchandising and elegant culinary experiences set against the backdrop of refined ambiance across this distinguished collection of destinations. Our retail properties are the core centers of retail, dining and entertainment within their trade areas and, therefore, represent hubs of daily life. As of June 30, ~~2017,~~2018, we own, either entirely or with joint venture partners, ~~126~~125 retail properties located throughout the United States comprising approximately ~~123~~122 million square feet of gross leasable area ("GLA").

We provide 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 the same whether the properties are consolidated or unconsolidated.

We seek to increase long-term Company NOI and Company EBITDA (as defined below) growth through proactive management and leasing of our properties. We also recycle capital through strategic dispositions in order to opportunistically invest in high quality retail ~~properties, as well as control operating expenses.~~properties. We believe that the ~~following items are the~~ most significant ~~drivers~~operating factor affecting incremental cash flow and Company EBITDA ~~growth:~~growth is increased rents earned from tenants at our properties. This growth is primarily achieved by:

As of June 30, ~~2017~~2018 the portfolio was ~~95.7%~~95.6% leased, compared to ~~96.2%~~95.7% leased at June 30, ~~2016. The decrease is primarily due to tenant bankruptcies during the current year quarter, which affected 1.8 million square feet in our portfolio.~~2017. On a suite-to-suite basis, the leases commencing occupancy in the trailing 12 months exhibited initial rents that were ~~10.0%~~11.8% higher than the final rents paid on expiring leases. ~~Our overall leasing activity is approximately twice the amount of GLA included in the suite-to-suite comparison due to leasing of anchor boxes that are not included in the suite-to-suite spreads.~~

We have identified approximately $1.5 billion of ~~income producing~~ development and redevelopment projects within our portfolio, including re-development of anchor box spaces, over 80% of which is being invested into Class A retail properties. We currently expect to achieve stabilized returns of approximately 7-9% for all projects.

We believe our long-term strategy can provide our ~~shareholders~~stockholders with a competitive risk-adjusted total return comprised of dividends and share price appreciation.

As previously announced, we had reached an agreement with BPY, pursuant to which, among other things, BPY will acquire all of our outstanding shares of common stock, other than those that BPY and its affiliates already own. The transactions provide for distribution and consideration per GGP share of up to $23.50 in cash or a choice of either one BPY limited partnership unit or one newly created share of BPR, subject to proration in each case, based on aggregate cash amount of $9.25 billion. The BPR shares were structured with the intention of providing an economic return equivalent to BPY units, including identical distributions. BPR shareholders will have the right to exchange each BPR share for one BPY unit or the cash equivalent of one BPY unit at the election of BPY. On July 26, 2018, the company held a special meeting of its common stockholders. At the special meeting, holders of record of GGP common stock on June 22, 2018, the record date for the special meeting, voted upon and approved the transactions. The completion of the transactions remains subject to certain customary closing conditions. The company expects that the transactions will be completed by the end of August this year.

Net income attributable to GGP ~~Inc.~~ decreased from ~~$377.7 million for the six months ended June 30, 2016 to~~ $233.0 million for the six months ended June 30, 2017 ~~primarily due~~ to ~~2016 gains related to the sale of interests in two properties. Our Company NOI (as defined below) remained flat of $1,139.5~~$157.7 million for the six months ended June 30, ~~2016 compared~~2018 primarily due to ~~$1,139.0 million~~a one-time gain on debt extinguishment in the prior year. Our Company NOI (as defined below) increased 0.6% from $1.1 billion for the six months ended June 30, ~~2017. Our Company FFO (as defined below) decreased 5.8% from $722.9 million~~2017 to $1.1 billion for the six months ended June 30, ~~2016 to~~2018. Our Company FFO (as defined below) increased 0.6% from $680.9 million for the six months ended June 30, 2017 ~~primarily due~~ to ~~decreased income recognition on condominiums.~~

See Non-GAAP Supplemental Financial Measures below for a discussion of Company NOI, Company EBITDA and Company FFO, along with a reconciliation to the comparable GAAP measures, Operating income and Net income attributable to ~~GGP Inc.~~GGP.

The following table summarizes signed leases compared to expiring leases in the same suite, for leases where (1) the downtime between new and previous tenant was less than 24 months, (2) the occupied space between the previous tenant and new tenant did not change by more than 10,000 square feet and (3) the new lease is at least a year.

# of Leases SF
Term
(in years)
Initial Rent PSF (1) Expiring Rent PSF (2)
Initial Rent
Spread
% Change
Trailing 12 Month Commencements 1,524
4,730,557
6.9
$ 62.51
$ 56.84
$ 5.66
10.0 %



	# of Leases	SF	Term (in years)	Initial Rent PSF (1)		Expiring Rent PSF (2)		Initial Rent Spread		% Change
Trailing 12 Month Commencements	1,266	4,085,587	6.7	$	59.23	$	52.98	$	6.26	11.8	%

Base minimum rents ~~decreased $17.7~~increased $11.9 million primarily due to our sale of an interest in Fashion Show during the third quarter of 2016. This resulted in $20.1 million less base minimum rents during the three months ended June 30, 2017 compared to the three months ended June 30, 2016 as the property is now accounted for as an Unconsolidated Real Estate Affiliate. In addition, the sale of two operating218 West 57th Street, 530 Fifth Avenue and 685 Fifth Avenue becoming consolidated properties during the third quarter of ~~2016~~2017. This resulted in ~~$3.4~~a $7.2 million ~~less~~increase in base minimum rents during the second quarter of 2018 compared to the second quarter of 2017. In addition, the acquisition of our joint venture partner's interest in Neshaminy during the second quarter of 2017 resulted in a $2.1 million increase in base minimum rents. Rents from new developments and contractual rent steps between 2017 and 2018 also increased base minimum rents. The ~~acquisition~~disposition of ~~the remaining 50% interest in Riverchase Galleria from our joint venture partner~~three operating properties during ~~the fourth quarter of 2016~~2017 resulted in an offsetting ~~$5.1~~$4.2 million ~~increase~~decrease in base minimum rents.

Lease termination income increased $16.9 million from one tenant at multiple operating properties.

Tenant recoveries decreased ~~$7.8~~$5.8 million ~~primarily~~ due in part to ~~our sale~~the disposition of ~~an interest in Fashion Show~~three operating properties during ~~the third quarter of 2016. This~~2017. These dispositions resulted in ~~$8.1~~a $2.5 million ~~less~~decrease in tenant recoveries during the ~~three months ended June 30, 2017~~second quarter of 2018 compared to the ~~three months ended June 30, 2016 as the property is now accounted for as an Unconsolidated Real Estate Affiliate. In addition, the sale of two operating properties during the third~~second quarter of 2016 resulted in $1.4 million less tenant recoveries and reimbursable common area maintenance charges decreased by $4.4 million across the portfolio. The acquisition of the remaining 50% interest in Riverchase Galleria from our joint venture partner during the fourth quarter of 2016 resulted in an offsetting $2.5 million increase in tenant recoveries and reimbursable taxes increased by $3.0 million.2017.

Management fees and other corporate revenues increased ~~$1.9~~$5.2 million primarily due to a $4.8 million increase in property and asset management fees related to the Seritage joint venture ~~formed with Fashion Show~~(Note 5).

Other revenue decreased $2.8 million primarily due to the disposition of three operating properties during 2017, resulting in a $5.8 million decrease in other revenue. The sale of a land parcel at one property during 2017 resulted in an offsetting $2.3 million in other revenue.

Real estate taxes increased $3.6 million due in part to 218 West 57th Street, 530 Fifth Avenue and 685 Fifth Avenue becoming consolidated properties during the third quarter of ~~2016.~~

~~Property maintenance costs~~General and administrative expense decreased ~~$1.2~~$3.8 million ~~primarily due to operational efficiencies.~~

Interest and dividend income ~~increased $4.1~~decreased $7.9 million primarily due to ~~interest income received during the three months ended June 30, 2017 on the proceeds of~~ the settlement of ~~the Rique note~~notes receivable ~~in the third quarter of 2016. As it was determined~~with our joint venture partners during

Interest expense ~~decreased $14.2~~increased $6.4 million primarily due to ~~our sale of an interest in Fashion Show~~218 West 57th Street, 530 Fifth Avenue and 685 Fifth Avenue becoming consolidated properties during the third quarter of ~~2016.~~2017. This resulted in ~~$8.7~~a $6.9 million ~~less~~increase in interest expense during the ~~three months ended June 30, 2017~~second quarter of 2018 compared to the ~~three months ended June 30, 2016 as the property is now accounted for as an Unconsolidated Real Estate Affiliate.~~second quarter of 2017. In addition, we ~~paid down~~obtained a new consolidated mortgage ~~notes~~note at ~~two~~Mall of Louisiana during the third quarter of 2017, resulting in a $3.3 million increase in interest expense. The disposition of three operating properties during ~~2016, resulting~~2017 resulted in ~~a $2.1 million decrease in interest expense (Note 6). We also sold two operating properties during 2016, resulting in a $1.2~~an offsetting $2.9 million decrease in interest expense.

The gain on foreign currency during the three months ended June 30, 2016 is related to the impact of changes in the exchange rate on a note receivable denominated in Brazilian Reais and received in conjunction with the sale of Aliansce in the third quarter of 2013. The note receivable was settled during 2016 (Note 13). The loss on foreign currency during the three months ended June 30, 2017 is related to the impact of changes in the exchange rate on the proceeds from the settlement ~~which are held~~of a note receivable denominated in Brazilian ~~Reais.~~Reais and received in conjunction with the sale of Aliansce in the third quarter of 2013.

The gain on extinguishment of debt during the three months ended June 30, 2017 relates to Lakeside Mall, which was conveyed to the lender in full satisfaction of the debt.

The loss from changes in control of investment properties and other of $15.8 million during the three months ended June 30, 2017 relates to the acquisition of the remaining interest in Neshaminy Mall and our sale of our interest in Red Cliffs Mall. The gain from changes in control of investment properties and other of $38.6 million during the three months ended June 30, 2016 relates to our sale of our interest in one operating property and additional development related to our sale of a 25% interest in Ala Moana Center in 2015 (Note 3).

Provision for income taxes ~~increased $6.1~~decreased $3.9 million primarily due to ~~tax credits related to solar investments received during~~a decrease in taxable income recognized by our taxable REIT subsidiary for the ~~three months ended June 30, 2016.~~sale of condominiums.

Equity in income of Unconsolidated Real Estate Affiliates ~~- gain~~decreased $15.7 million primarily due to a decrease in income recognition on ~~investment during the three months ended June 30, 2016 relates to additional development related to the sale of an additional 12.5% interest in Ala Moana Center during the second quarter of 2015~~condominiums and ~~the sale of our interest in~~demolition work at one ~~joint venture during the three months ended June 30, 2016 (Note 3).~~property.

Base minimum rents ~~decreased $31.7~~increased $20.1 million primarily due to our sale of an interest in Fashion Show during the third quarter of 2016. This resulted in $39.0 million less base minimum rents during the six months ended June 30, 2017 compared to the six months ended June 30, 2016 as the property is now accounted for as an Unconsolidated Real Estate Affiliate. In addition, the sale of two operating218 West 57th Street, 530 Fifth Avenue and 685 Fifth Avenue becoming consolidated properties during the third quarter of ~~2016~~2017. This resulted in ~~$6.8~~a $14.2 million ~~less~~increase in base minimum rents during the first six months of 2018 compared to the first six months of 2017. In addition, the acquisition of our joint venture partner's interest in Neshaminy during the second quarter of 2017 resulted in a $5.1 million increase in base minimum rents. Rents from new developments and contractual rent steps between 2017 and 2018 also increased base minimum rents. The ~~acquisition~~disposition of ~~the remaining 50% interest in Riverchase Galleria from our joint venture partner~~three operating properties during ~~the fourth quarter of 2016~~2017 resulted in an offsetting ~~$10.4~~$9.0 million ~~increase~~decrease in base minimum rents.

Lease termination income increased $16.6 million from one tenant at multiple operating properties.

Tenant recoveries decreased ~~$17.2~~$11.8 million primarily due to ~~our sale~~the disposition of ~~an interest in Fashion Show~~three operating properties during ~~the third quarter of 2016.~~2017. This resulted in ~~$16.2~~a $5.0 million ~~less~~decrease in tenant recoveries during the first six months ~~ended June 30, 2017~~of 2018 compared to the first six months ~~ended June 30, 2016 as the property is now accounted for as an Unconsolidated Real Estate Affiliate. In addition, the sale~~ of two operating properties during the third quarter of 2016 resulted in $2.7 million less tenant recoveries and reimbursable common area maintenance charges decreased by $9.2 million across the portfolio.2017. The acquisition of ~~the remaining 50% interest in Riverchase~~

Management fees and other corporate revenues ~~decreased $3.7~~increased $2.8 million primarily due to $9.4 million increase in property and asset management fees related to the ~~divestiture of our investment in~~ Seritage ~~Growth Properties stock during the six months ended June 30, 2016, which resulted in a $13.1 million gain~~joint venture (Note 2)5). This is partially offset by a $4.3 million one-time profit participation payment received during ~~the six months ended June 30,~~ 2017 related to our Aeropostale joint venture (Note 5)3). ~~In addition,~~

Other revenue decreased $6.4 million primarily due to the disposition of three operating properties during 2017, resulting in a $6.0 million decrease in other revenue, and a contract termination fee of $3.2 million received during 2017. The sale of a land parcel at one property during 2017 resulted in an offsetting $2.3 million in other revenue.

Real estate taxes increased $5.8 million primarily due to 218 West 57th Street, 530 Fifth Avenue and 685 Fifth Avenue becoming consolidated properties during the third quarter of 2017. This resulted in a $3.7 million increase in real estate taxes during the first six months of 2018 compared to the first six months of 2017.

General and administrative expense decreased $6.3 million primarily due to a decrease in compensation expense (Note 10).

The provision for impairment during the six months ended June 30, ~~2017, we received $2.9 million in property management fees related to the joint venture formed with Fashion Show during the third quarter of 2016.~~

Depreciation and amortization increased ~~$27.7~~$14.4 million primarily due to ~~an increase~~the write-off of $9.4 million of corporate assets in ~~write-offs~~2018. In addition, the consolidation of ~~tenant allowances during the six months ended June 30, 2016.~~

Neshaminy during the second quarter of 2017 resulted in a $3.7 million increase in depreciation and amortization. The disposition of three operating properties during 2017 resulted in an offsetting $5.1 million decrease in depreciation and amortization.

Interest and dividend income decreased $16.7 million primarily due to the settlement of notes receivable with our joint venture partners during 2017.

Interest expense increased $12.0 million primarily due to 218 West 57th Street, 530 Fifth Avenue and 685 Fifth Avenue becoming consolidated properties during the third quarter of 2017. This resulted in ~~$17.5~~a $13.3 million ~~less~~increase in interest expense during the first six months ~~ended June 30, 2017~~of 2018 compared to the first six months ~~ended June 30, 2016 as the property is now accounted for as an Unconsolidated Real Estate Affiliate.~~of 2017. In addition, we ~~paid down~~obtained a new consolidated mortgage ~~notes~~note at ~~two~~Mall of Louisiana during the third quarter of 2017, resulting in a $6.6 million increase in interest expense. The disposition of three operating properties during ~~2016, resulting~~2017 resulted in ~~a $7.2 million decrease in interest expense (Note 6). We also sold two operating properties during 2016, resulting in a $2.4~~an offsetting $5.9 million decrease in interest expense.

The gain on foreign currency during the six months ended June 30, 2016 is related to the impact of changes in the exchange rate on a note receivable denominated in Brazilian Reais and received in conjunction with the sale of Aliansce in the third quarter of 2013. The note receivable was settled during 2016 (Note 13). The loss on foreign currency during the six months ended June 30, 2017 is related to the impact of changes in the exchange rate on the proceeds from the settlement ~~which are held~~of a note receivable denominated in Brazilian ~~Reais.~~Reais and received in conjunction with the sale of Aliansce in the third quarter of 2013.

The gain from changes in control of investment properties and other of $12.7 million during the six months ended June 30, 2018 relates to the sale of a 49.9% joint venture interest in the Sears Box at Oakbrook Center (Note 3). The loss from changes in control of investment properties and other of $15.8 million during the six months ended June 30, 2017 relates to the acquisition of the remaining interest in Neshaminy Mall and our sale of our interest in Red Cliffs Mall. ~~The gain from changes in control of investment properties and other of $113.1 million during the six months ended June 30, 2016 relates~~

Provision for income taxes ~~increased $7.7~~decreased $8.7 million primarily due to tax credits related to solar investments received during the six months ended June 30, 2016 and the tax impact of the provision for loan loss related to the Rique note recorded during the six months ended June 30, 2016 (Note 13). This increase was partially offset by a decrease in taxable income recognized by our taxable REIT subsidiary for the sale of ~~condominiums (Note 5).~~condominiums.

Equity in income of Unconsolidated Real Estate Affiliates decreased ~~by $28.2~~$25.1 million primarily due to ~~decreased~~a decrease in income recognition on condominiums during the six months ended June 30, 2017 compared to the six months ended June 30, 2016 (Note 5), partially offset by our share of income in the Fashion Show joint venture formed during the third quarter of 2016.and demolition work at one property.

The Unconsolidated Real Estate Affiliates - gain on investment during the six months ended June 30, ~~2016 relates to additional development~~2018 is related to the sale of ~~an additional 12.5% interest in Ala Moana Center during the second quarter of 2015 and the sale~~a portion of our interest in ~~three joint ventures during the six months ended June 30, 2016~~Aeropostale (Note 3).

Our primary source of cash is from the ownership and management of our properties and strategic dispositions. We may generate cash from refinancings or borrowings under our revolving credit facility. Our primary uses of cash include payment of operating expenses, debt service, reinvestment in and redevelopment of properties, tenant allowances, dividends, share repurchases and acquisitions.

We anticipate maintaining financial flexibility by managing our future maturities, amortization of debt, and minimizing cross collateralizations and corporate guarantees. We believe that we currently have sufficient liquidity to satisfy all of our commitments in the form of ~~$227.6~~$194.7 million of consolidated unrestricted cash and ~~$705.0~~$790.0 million of available credit under our credit facility as of June 30, ~~2017,~~2018, as well as anticipated cash provided by operations.

Our key financing objectives include:

We may raise capital through public or private issuances of debt securities, preferred stock, common stock, common units of the Operating Partnerships (as defined in Note 1), share repurchases or other capital raising activities.

During the six months ended June 30, 2018, we refinanced a consolidated mortgage note at 685 Fifth Avenue. The prior $340.0 million variable-rate consolidated mortgage note matured on July 1, 2018 and had an interest rate of LIBOR plus 2.75%. In connection with the refinancing, $100.0 million remained related to the commercial office unit and a new $275.0 million fixed-rate consolidated mortgage note with a term-to-maturity of 10.0 years and an interest rate of 4.53% was obtained on the retail unit. The $100.0 million was paid down in full in conjunction with the sale of the commercial office unit on July 13, 2018 (Note 17 ).

During the year ended December 31, 2017, we paid down a $73.4 million consolidated mortgage note at ~~one property.~~Four Seasons Town Centre. The prior loan had a term-to-maturity of 0.2 years and an interest rate of 5.6%. ~~The property~~Four Seasons Town Centre subsequently replaced a property that was sold during the ~~six months~~year ended ~~June 30,~~December 31, 2017 as collateral in our $1.4 billion loan secured by cross-collateralized mortgages on 1514 properties.

As of June 30, ~~2017,~~2018, we had ~~$3.3~~$2.8 billion of debt pre-payable at our proportionate share without penalty. We may pursue opportunities to refinance this debt at lower interest rates and longer maturities.

As of June 30, ~~2017,~~2018, our proportionate share of total debt aggregated $18.6 billion. Our total debt includes our consolidated debt of ~~$12.7~~$13.1 billion and our share of Unconsolidated Real Estate Affiliates debt of ~~$5.8~~$5.6 billion. Of our proportionate share of total debt, ~~$1.7~~$1.3 billion is recourse to the Company or its subsidiaries (including the facility) due to guarantees or other security provisions for the benefit of the note holder.

The amount of debt due in the next three years represents ~~15.5%~~27.8% of our total debt at maturity. The maximum amount due in any one of the next ten years is no more than ~~$3.0~~$3.2 billion at our proportionate share or approximately ~~17.5%~~18.1% of our total debt at maturity.

The following table illustrates the scheduled payments for our proportionate share of total debt as of June 30, ~~2017.~~2018. The $206.2 million of Junior Subordinated Notes are due in 2036, but we may redeem them any time after April 30, 2011 (Note 6). As we do not expect to redeem the notes prior to maturity, they are included in the consolidated debt maturing subsequent to ~~2021.~~2022.

We believe we will be able to extend the maturity date, repay under our available line of credit or refinance the consolidated debt that is scheduled to mature in 2018. We also believe that the joint ventures will be able to refinance the debt of our Unconsolidated Real Estate Affiliates upon maturity; however, there can be no assurance that we will be able to refinance or restructure such debt on acceptable terms or otherwise, or that joint venture operations or contributions by us and/or our partners will be sufficient to repay such loans.

From time-to-time we may acquire whole or partial interests in high-quality retail properties or make strategic dispositions. Refer to Note 3 for more information.

We are currently redeveloping several consolidated and unconsolidated properties primarily to improve the productivity and value of the property, convert large-scale anchor boxes into smaller leasable areas and to create new in-line retail space and new restaurant venues. The execution of these redevelopment projects within our portfolio was identified as providing compelling risk-adjusted returns on investment.

We have development and redevelopment activities totaling approximately ~~$1.3~~$1.4 billion under construction and ~~$230~~$72 million in the pipeline. We continue to evaluate a number of other redevelopment projects to further enhance the quality of our assets. Expected returns are based on the completion of current and future redevelopment projects, and the success of the leasing and asset management plans in place for each project. Expected returns are subject to a number of variables, risks, and uncertainties including those disclosed within Item 1A of our Annual Report on Form 10-K for the year ended December 31, ~~2016~~2017 (our "Annual Report"). We also refer the reader to our disclosure related to forward-looking statements, below. The following table illustrates our planned redevelopments:

Our investment in these projects for the six months ended June 30, ~~2017 has~~2018 increased from December 31, ~~2016~~2017 in conjunction with the applicable development plan and as projects near completion. The continued progression of redevelopment projects resulted in increases to GGP's investment to date.

The following table illustrates our capital expenditures, capitalized interest, and internal costs associated with leasing and development overhead, which primarily relate to ordinary capital projects at our operating properties. In addition, we incurred tenant allowances and capitalized leasing costs for our operating properties as outlined below. Capitalized interest is based upon qualified expenditures and interest rates; capitalized leasing and development costs are based upon time expended on these activities. These costs are amortized over lives which are consistent with the related asset.

Our Board of Directors declared common stock dividends during ~~2017~~2018 and ~~2016~~2017 as follows:

On February 13, 2013, we issued, under a public offering, 10,000,000 shares of 6.375% Series A Cumulative Stock at a price of $25.00 per share. Our Board of Directors declared preferred stock dividends during ~~2017~~2018 and ~~2016~~2017 as follows:

Net cash provided by operating activities was ~~$498.5~~$538.0 million for the six months ended June 30, ~~2017~~2018 and ~~$546.1~~$482.5 million for the six months ended June 30, ~~2016.~~2017. Significant changes in the components of net cash provided by operating activities include:

Net cash ~~(used in) provided by~~used in investing activities was ~~($260.9)~~$184.6 million for the six months ended June 30, ~~2017~~2018 and ~~$59.8~~$261.4 million for the six months ended June 30, ~~2016.~~2017. Significant components of net cash (used in) provided by investing activities include:

The following table reconciles GAAP net income attributable to GGP to Company FFO for the three and six months ended June 30, ~~2017~~2018 and ~~2016:~~2017:

Certain statements made in this section or elsewhere in this report may be deemed "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. Although the Company believes the expectations reflected in any forward-looking statement are based on reasonable ~~assumption,~~assumptions, it can give no assurance that its expectations will be attained, and it is possible that actual results may differ materially from those indicated by these forward-looking statements due to a variety of risks, uncertainties and other factors. Such factors include, but are not limited to, the Company's ability to refinance, extend, restructure or repay near and intermediate term debt, its indebtedness, its ability to raise capital through equity issuances, asset sales or the incurrence of new debt, retail and credit market conditions, impairments, its liquidity demands and economic conditions. The Company discusses these and other risks and uncertainties in its annual and quarterly periodic reports filed with the Securities and Exchange Commission. The Company may update that discussion in its periodic reports, but otherwise takes no duty or obligation to update or revise these forward-looking statements, whether as a result of new information, future developments, or otherwise.

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.

There have been no changes in our internal control over financial reporting during our most recently completed fiscal quarter that have materially affected or are reasonably likely to materially affect our internal control over financial reporting.

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 effect on our consolidated financial position, results of operations or liquidity. 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.

~~There are no material changes~~In addition to the risk factors previously disclosed in our Annual ~~Report.~~Report, the following risk factors relate to the agreement reached with BPY (Note 1). We refer to the transactions contemplated by the merger agreement and other related transaction agreements collectively as the Transactions.

Following the consummation of the Transactions, GGP common stockholders may elect to receive shares of class A stock (however, if enough GGP common stockholders elect to receive BPY units, then all those eligible to receive class A stock in connection with the Transactions will receive BPY units instead). Prior to completion of the Transactions, there has not been and will not be established public trading for class A stock. The market price of class A stock following the Transactions will be unknown until the commencement of its trading following completion of the Transactions.

GGP is subject to litigation related to the Transactions. GGP cannot predict the outcome of pending litigation, nor can it predict the amount of time and expense that will be required to resolve such litigation. An unfavorable resolution of any such litigation concerning the Transactions could delay or prevent the consummation of the Transactions. In addition, the costs of defending the

litigation, even if resolved in GGP’s favor, could be substantial and such litigation could distract GGP from pursuing the consummation of the Transactions and other potentially beneficial business opportunities.



Delaware		27-2963337
(State or other jurisdiction of incorporating or organization)		(I.R.S. Employer Identification Number)

~~110~~350 N. ~~Wacker Dr.~~Orleans St., Suite 300, Chicago, IL		~~60606~~60654
(Address of principal executive offices)		(Zip Code)

(312) 960-5000
(Registrant's telephone number, including area code)



ý	Large accelerated filer	o	Accelerated filer
o	Non-accelerated filer (Do not check if a smaller reporting company)	o	Smaller reporting company
		o	Emerging growth company



			PAGE NUMBER

Part I	FINANCIAL INFORMATION

	Item 1: Consolidated Financial Statements (Unaudited)

		Consolidated Balance Sheets as of June 30, ~~2017~~2018 and December 31, ~~2016~~2017	3

		Consolidated Statements of Comprehensive Income for the three and six months ended June 30, ~~2017~~2018 and ~~2016~~2017	4

		Consolidated Statements of Equity for the six months ended June 30, ~~2017~~2018 and ~~2016~~2017	65

		Consolidated Statements of Cash Flows for the six months ended June 30, ~~2017~~2018 and ~~2016~~2017	87

		Notes to Consolidated Financial Statements (Unaudited)	109

		Note 1: Organization	109

		Note 2: Summary of Significant Accounting Policies	10

		Note 3: Acquisitions, Sales and Joint Venture Activity	17

		Note 4: Fair Value	2018

		Note 5: Unconsolidated Real Estate Affiliates	2120

		Note 6: Mortgages, Notes and Loans Payable	2423

		Note 7: Income Taxes	2625

		Note 8: ~~Warrants~~Equity and Redeemable Noncontrolling Interests	2625

		Note 9: ~~Equity and Redeemable Noncontrolling Interests~~Earnings Per Share	2729

		Note 10: ~~Earnings Per Share~~Stock-Based Compensation Plans	30

		Note 11: Accounts Receivable, net	31

		Note ~~11: Stock-Based Compensation Plans~~12: Notes Receivable	32

		Note ~~12:~~13: Prepaid Expenses and Other Assets	32

		Note 14: Accounts ~~Receivable, net~~Payable and Accrued Expenses	33

		Note 15: Litigation	33

		Note 16: Commitments and Contingencies	34

		Note ~~13: Notes Receivable~~	34

		~~Note 14: Prepaid Expenses and Other Assets~~	35

		~~Note 15: Accounts Payable and Accrued Expenses~~	36

		~~Note 16: Litigation~~	36

		~~Note~~ 17: ~~Commitments and Contingencies~~	37

		~~Note 18:~~ Subsequent Events	3734

	Item 2: Management's Discussion and Analysis of Financial Condition and Results of Operations		3835

		Liquidity and Capital Resources	4338

	Item 3: Quantitative and Qualitative Disclosures about Market Risk		5347

	Item 4: Controls and Procedures		5348

Part II	OTHER INFORMATION

	Item 1: Legal Proceedings		5348

	Item 1A: Risk Factors		5348

	Item 2: Unregistered Sales of Equity Securities and Use of Proceeds		5350

	Item 3: Defaults Upon Senior Securities		5450

	Item 4: Mine Safety Disclosures		5450

	Item 5: Other Information		5450

	Item 6: Exhibits		54

	~~SIGNATURE~~		5550

	EXHIBIT INDEX		5651

	SIGNATURE		52


	June 30, 2017			December 31, 2016			June 30, 2018			December 31, 2017
	(Dollars in thousands, except share and per share amounts)						(Dollars in thousands, except share and per share amounts)
Assets:
Investment in real estate:
Land	$	3,043,007		$	3,066,019		$	3,887,771		$	4,013,874
Buildings and equipment	16,144,950			16,091,582			17,086,107			16,957,720
Less accumulated depreciation	(2,930,511		)	(2,737,286		)	(3,389,587		)	(3,188,481		)
Construction in progress	273,008			251,616			484,835			473,118
Net property and equipment	16,530,454			16,671,931			18,069,126			18,256,231
Investment in Unconsolidated Real Estate Affiliates	3,866,518			3,868,993			3,360,839			3,377,112
Net investment in real estate	20,396,972			20,540,924			21,429,965			21,633,343
Cash and cash equivalents	227,626			474,757			194,675			164,604
Accounts receivable, net	301,515			322,196			311,660			334,081
Notes receivable	609,415			678,496			351,422			417,558
Deferred expenses, net	269,445			209,852			281,570			284,512
Prepaid expenses and other assets	472,473			506,521			442,574			515,856
Assets held for disposition							120,732			—
Total assets	$	22,277,446		$	22,732,746		$	23,132,598		$	23,349,954
Liabilities:
Mortgages, notes and loans payable	$	12,496,119		$	12,430,418		$	12,847,635		$	12,832,459
Investment in Unconsolidated Real Estate Affiliates	25,863			39,506			22,400			21,393
Accounts payable and accrued expenses	591,023			655,362			878,526			919,432
Dividend payable	201,238			433,961			217,480			219,508
Deferred tax liabilities	3,664			3,843			2,245			2,428
Junior subordinated notes	206,200			206,200			206,200			206,200
Liabilities held for disposition							100,711			—
Total liabilities	13,524,107			13,769,290			14,275,197			14,201,420
Redeemable noncontrolling interests:
Preferred	52,485			144,060			52,256			52,256
Common	197,294			118,667			171,083			195,870
Total redeemable noncontrolling interests	249,779			262,727			223,339			248,126
Commitments and Contingencies	—			—			—			—
Equity:
Common stock:
11,000,000,000 shares authorized, $0.01 par value, 965,437,229 issued, 882,008,644 outstanding as of June 30, 2017, and 968,153,526 issued, 884,097,680 outstanding as of December 31, 2016	9,380			9,407
11,000,000,000 shares authorized, $0.01 par value, 1,041,821,913 issued, 958,391,012 outstanding as of June 30, 2018, and 1,040,382,900 issued, 956,982,536 outstanding as of December 31, 2017							10,144			10,130
Preferred Stock:
500,000,000 shares authorized, $0.01 par value, 10,000,000 shares issued and outstanding as of June 30, 2017 and December 31, 2016	242,042			242,042
500,000,000 shares authorized, $0.01 par value, 10,000,000 shares issued and outstanding as of June 30, 2018 and December 31, 2017							242,042			242,042
Additional paid-in capital	11,400,989			11,417,597			11,880,450			11,845,532
Retained earnings (accumulated deficit)	(2,032,093		)	(1,824,866		)	(2,396,371		)	(2,107,498		)
Accumulated other comprehensive loss	(71,593		)	(70,456		)	(82,229		)	(71,906		)
Common stock in treasury, at cost, 55,969,390 shares as of June 30, 2017 and 56,596,651 shares as of December 31, 2016	(1,122,640		)	(1,137,960		)
Common stock in treasury, at cost, 55,969,390 shares as of June 30, 2018 and December 31, 2017							(1,122,640		)	(1,122,640		)
Total stockholders' equity	8,426,085			8,635,764			8,531,396			8,795,660
Noncontrolling interests in consolidated real estate affiliates	34,175			33,583			48,340			55,379
Noncontrolling interests related to long-term incentive plan common units	43,300			31,382			54,326			49,369
Total equity	8,503,560			8,700,729			8,634,062			8,900,408
Total liabilities, redeemable noncontrolling interests and equity	$	22,277,446		$	22,732,746		$	23,132,598		$	23,349,954

GGP INC. CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (UNAUDITED)

	Three Months Ended June 30,						Six Months Ended June 30,
	2017			2016			2017			2016
	(Dollars in thousands, except per share amounts)
Revenues:
Minimum rents	$	349,205		$	363,412		$	698,218		$	734,544
Tenant recoveries	161,926			169,763			324,982			342,211
Overage rents	3,280			4,375			9,217			12,519
Management fees and other corporate revenues	20,847			18,917			48,990			52,659
Other	20,538			18,119			40,722			39,685
Total revenues	555,796			574,586			1,122,129			1,181,618
Expenses:
Real estate taxes	59,042			57,309			116,536			115,412
Property maintenance costs	10,724			11,955			25,699			29,438
Marketing	1,296			2,738			3,441			4,792
Other property operating costs	69,590			71,601			138,893			141,995
Provision for doubtful accounts	3,166			1,710			6,617			5,111
Provision for loan loss	—			—			—			36,069
Property management and other costs	39,025			38,282			80,139			69,027
General and administrative	15,862			14,650			30,546			28,076
Provision for impairment	—			4,058			—			44,763
Depreciation and amortization	174,298			156,248			344,596			316,919
Total expenses	373,003			358,551			746,467			791,602
Operating income	182,793			216,035			375,662			390,016
Interest and dividend income	17,452			13,335			35,388			29,393
Interest expense	(134,209		)	(148,366		)	(266,532		)	(296,043		)
(Loss) gain on foreign currency	(3,877		)	7,893			(694		)	16,829
Gain on extinguishment of debt	55,112			—			55,112			—
(Loss) gain from changes in control of investment properties and other, net	(15,841		)	38,553			(15,841		)	113,108
Income before income taxes, equity in income of Unconsolidated Real Estate Affiliates and allocation to noncontrolling interests	101,430			127,450			183,095			253,303
(Provision for) benefit from income taxes	(3,844		)	2,242			(8,354		)	(679		)
Equity in income of Unconsolidated Real Estate Affiliates	30,732			34,618			63,946			92,108
Unconsolidated Real Estate Affiliates - gain on investment, net	—			25,591			—			40,506
Net income	128,318			189,901			238,687			385,238
Allocation to noncontrolling interests	(2,455		)	(3,956		)	(5,665		)	(7,513		)
Net income attributable to GGP Inc.	125,863			185,945			233,022			377,725
Preferred Stock dividends	(3,984		)	(3,983		)	(7,968		)	(7,967		)
Net income attributable to common stockholders	$	121,879		$	181,962		$	225,054		$	369,758
Earnings Per Share:
Basic	$	0.14		$	0.21		$	0.25		$	0.42
Diluted	$	0.13		$	0.19		$	0.24		$	0.39
Dividends declared per share	$	0.22		$	0.19		$	0.44		$	0.38

GGP INC. CONSOLIDATED STATEMENTS OF EQUITY (UNAUDITED)

	Common Stock			Preferred Stock		Additional Paid-In Capital			Retained Earnings (Accumulated Deficit)			Accumulated Other Comprehensive Income (Loss)			Common Stock in Treasury			Noncontrolling Interests in Consolidated Real Estate Affiliates and Long Term Incentive Plan Common Units			Total Equity
	(Dollars in thousands, except for per share and share amounts)
Balance at January 1, 2016	$	9,386		$	242,042	$	11,362,369		$	(2,141,549	)	$	(72,804	)	$	(1,129,401	)	$	38,251		$	8,308,294

Net income									377,725									1,073			378,798
Distributions to noncontrolling interests in consolidated Real Estate Affiliates																		(1,522		)	(1,522		)
Acquisition/disposition of partner's noncontrolling interests in consolidated Real Estate Affiliates						(16,384		)										(2,971		)	(19,355		)
Long Term Incentive Plan Common Unit grants, net (684,216 LTIP Units)						43			(950		)							7,804			6,897
Restricted stock grants, net (339,937 common shares)	3			—		1,548															1,551
Employee stock purchase program (87,589 common shares)	1					3,109															3,110
Stock options exercised (1,789,201 common shares)	18					34,730															34,748
Cancellation of repurchased common shares (270,869 common shares)	(2		)			(3,415		)	(3,356		)				6,773						—
Cash dividends reinvested (DRIP) in stock (13,990 common shares)	—			—		385			(215		)										170
Other comprehensive income												15,567									15,567
Amounts reclassified from accumulated other comprehensive income												(11,894		)							(11,894		)
Cash distributions declared ($0.38 per share)									(335,627		)										(335,627		)
Cash distributions on Preferred Stock									(7,967		)										(7,967		)
Fair value adjustment for noncontrolling interest in Operating Partnership						(24,297		)													(24,297		)

Balance at June 30, 2016	$	9,406		$	242,042	$	11,358,088		$	(2,111,939	)	$	(69,131	)	$	(1,122,628	)	$	42,635		$	8,348,473

GGP INC. CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)

	Six Months Ended June 30,						Six Months Ended June 30,
	2017			2016			2018			2017
	(Dollars in thousands)						(Dollars in thousands)
Cash Flows provided by Operating Activities:
Net income	$	238,687		$	385,238		$	161,460		$	238,687
Adjustments to reconcile net income to net cash provided by operating activities:
Equity in income of Unconsolidated Real Estate Affiliates	(63,946		)	(92,108		)	(38,869		)	(63,946		)
Distributions received from Unconsolidated Real Estate Affiliates	52,876			51,632			46,256			52,876
Provision for doubtful accounts	6,617			5,111			5,662			6,617
Depreciation and amortization	344,596			316,919			359,035			344,596
Amortization/write-off of deferred finance costs	5,972			5,709			5,544			5,972
Accretion/write-off of debt market rate adjustments	(2,181		)	(630		)	(2,230		)	(2,181		)
Amortization of intangibles other than in-place leases	18,857			24,956			7,150			18,857
Straight-line rent amortization	(493		)	(10,445		)	(594		)	(493		)
Deferred income taxes	4,817			(1,472		)	(1,692		)	4,817
Gain on dispositions, net	(2,515		)	(24,001		)	—			(2,515		)
Unconsolidated Real Estate Affiliates - gain on investment, net	—			(40,506		)	(10,361		)	—
Loss (gain) from changes in control of investment properties and other, net	15,841			(113,108		)
Gain (loss) from changes in control of investment properties and other, net							(12,664		)	15,841
Provision for impairment	—			44,763			38,379			—
Gain on extinguishment of debt	(55,112		)	—			—			(55,112		)
Provision for loan loss	—			36,069
Loss (gain) on foreign currency	694			(16,829		)
Loss on foreign currency							—			694
Net changes:
Accounts and notes receivable, net	(259		)	2,052			5,963			(259		)
Prepaid expenses and other assets	(28,887		)	(9,280		)	32,811			(38,556		)
Deferred expenses, net	(22,010		)	(20,125		)	(21,577		)	(22,010		)
Restricted cash	6,341			6,789
Accounts payable and accrued expenses	(45,441		)	(22,495		)	(50,045		)	(45,441		)
Other, net	24,008			17,881			13,803			24,008
Net cash provided by operating activities	498,462			546,120			538,031			482,452
Cash Flows (used in) provided by Investing Activities:
Acquisition of real estate and property additions	(49,062		)	(70,709		)	—			(49,062		)
Development of real estate and property improvements	(269,820		)	(233,502		)	(361,966		)	(269,820		)
Loans to joint venture partners	(47,205		)	(43,364		)	(5,772		)	(47,205		)
Proceeds from repayment of loans to joint venture partners	47,076			8,755			80,000			47,076
Proceeds from sales of investment properties and Unconsolidated Real Estate Affiliates	39,622			390,067			60,960			39,622
Contributions to Unconsolidated Real Estate Affiliates	(44,755		)	(78,476		)	(82,637		)	(44,755		)
Distributions received from Unconsolidated Real Estate Affiliates in excess of income	62,792			40,682			124,792			62,792
Sale of marketable securities	—			46,408
Decrease (increase) in restricted cash	436			(102		)
Other, net	—			36
Net cash (used in) provided by investing activities	(260,916		)	59,795			(184,623		)	(261,352		)
Cash Flows used in Financing Activities:
Proceeds from refinancing/issuance of mortgages, notes and loans payable	575,000			313,479			790,000			575,000
Principal payments on mortgages, notes and loans payable	(368,669		)	(694,233		)	(677,926		)	(368,669		)
Deferred finance costs	(965		)	(13,672		)	(213		)	(965		)
Treasury stock purchases	(77,032		)	—			—			(77,032		)
Cash contributions from noncontrolling interests in consolidated real estate affiliates	15,258			—			—			15,258
Cash distributions to noncontrolling interests in consolidated real estate affiliates	(3,569		)	(22,609		)	(2,888		)	(3,569		)
Cash distributions paid to common stockholders	(618,830		)	(335,505		)	(421,374		)	(618,830		)
Cash distributions reinvested (DRIP) in common stock							245			696
Cash distributions paid to preferred stockholders							(7,968		)	(7,968		)
Cash distributions and redemptions paid to unit holders							(6,361		)	(10,515		)
Other, net							5,705			9,799
Net cash used in financing activities							(320,780		)	(486,795		)
Effect of foreign exchange rates on cash and cash equivalents							—			(694		)
Net change in cash, cash equivalents and restricted cash							32,628			(266,389		)
Cash, cash equivalents and restricted cash at beginning of period							231,939			531,705
Cash, cash equivalents and restricted cash at end of period							$	264,567		$	265,316



	Years
Buildings and improvements	10 - 45
Equipment and fixtures	3 - 20
Tenant improvements	Shorter of useful life or applicable lease term


	Gross Asset		Accumulated Amortization			Net Carrying Amount		Gross Asset		Accumulated Amortization			Net Carrying Amount

As of June 30, 2017
As of June 30, 2018
Tenant leases:
In-place value	$	270,540	$	(178,675	)	$	91,865	$	285,145	$	(145,194	)	$	139,951

As of December 31, 2016
As of December 31, 2017
Tenant leases:
In-place value	$	306,094	$	(214,111	)	$	91,983	$	347,232	$	(181,088	)	$	166,144


Year	Amount		Amount
2017 Remaining	$	27,053
2018	42,090
2018 Remaining			$	20,497
2019	27,343		28,966
2020	19,338		19,567
2021	14,257		13,908
2022			12,579


~~(1)~~	~~Excludes a $13.1 million gain recognized in management fees and other corporate revenues on the divestiture of our investment in Seritage Growth Properties during the six months ended June 30, 2016.~~


(1)	Refer to Note 2 for more information regarding impairment. Investments in real estate includes consolidated properties and Unconsolidated Real Estate Affiliates.


	June 30, 2017				December 31, 2016				June 30, 2018				December 31, 2017
	Carrying Amount (1)		Estimated Fair Value		Carrying Amount (2)		Estimated Fair Value		Carrying Amount (1)		Estimated Fair Value		Carrying Amount (2)		Estimated Fair Value
Fixed-rate debt	$	10,160,336	$	10,487,786	$	10,441,166	$	10,832,272	$	10,618,364	$	10,441,443	$	10,420,252	$	10,467,262
Variable-rate debt	2,335,783		2,343,870		1,989,252		1,990,458		2,229,271		2,244,670		2,412,207		2,415,457
	$	12,496,119	$	12,831,656	$	12,430,418	$	12,822,730	$	12,847,635	$	12,686,113	$	12,832,459	$	12,882,719


(1)	Includes net market rate adjustments of ~~$25.7~~$21.3 million and deferred financing costs of ~~$34.0~~$25.0 million, net.


(1)	The Condensed Combined ~~Balance Sheets~~Statements of Income - Unconsolidated Real Estate Affiliates include income from Miami Design District ~~as of~~subsequent to June ~~30,~~1, 2017. ~~Refer to the discussion below regarding Miami Design District.~~


~~(1)~~	The Condensed Combined Statements of Income - Unconsolidated Real Estate Affiliates include income from Fashion Show subsequent to the formation of the joint venture on July 29, 2016 and Miami Design District subsequent to June 1, 2017.


~~(2)~~	~~Includes management fees charged to the unconsolidated joint ventures by GGMI and GGSI.~~


	June 30, 2017 (1)		Weighted-Average Interest Rate (2)		December 31, 2016 (3)			Weighted-Average Interest Rate (2)		June 30, 2018 (1)		Weighted-Average Interest Rate (2)		December 31, 2017 (3)			Weighted-Average Interest Rate (2)
Fixed-rate debt:
Collateralized mortgages, notes and loans payable	$	10,160,336	4.42	%	$	10,441,166		4.44	%	$	10,618,364	4.41	%	$	10,420,252		4.41	%
Total fixed-rate debt	10,160,336		4.42	%	10,441,166			4.44	%	10,618,364		4.41	%	10,420,252			4.41	%
Variable-rate debt:
Collateralized mortgages, notes and loans payable (4)	1,998,356		2.89	%	1,997,978			2.45	%	2,074,540		3.87	%	2,418,628			3.39	%
Revolving credit facility (5)	337,427		2.41	%	(8,726		)	—		154,731		3.34	%	(6,421		)	—
Total variable-rate debt	2,335,783		2.82	%	1,989,252			2.45	%	2,229,271		3.83	%	2,412,207			3.39	%
Total Mortgages, notes and loans payable	$	12,496,119	4.12	%	$	12,430,418		4.12	%	$	12,847,635	4.31	%	$	12,832,459		4.22	%
Junior subordinated notes	$	206,200	2.62	%	$	206,200		2.34	%	$	206,200	3.81	%	$	206,200		2.83	%


(1)	Includes ~~$25.7~~$21.3 million of market rate adjustments and ~~$34.0~~$25.0 million of deferred financing costs, net.


(2)	Represents the weighted-average interest rates on our ~~contractual~~ principal ~~balances.~~balances, excluding the effects of market rate adjustments and deferred financing costs.


(3)	Includes ~~$27.8~~$23.5 million of market rate adjustments and ~~$40.1~~$30.3 million of deferred financing costs, net.


(4)	$1.4 billion of the variable-rate balance is cross-collateralized.


(5)	Includes deferred financing costs, which are shown as a reduction to the debt balance. See table below for the balance excluding deferred financing costs. Excludes $100.0 million categorized as held for disposition as of June 30, 2018 (Note 2).


	June 30, 2017 (1)		Weighted-Average Interest Rate		December 31, 2016 (2)		Weighted-Average Interest Rate	June 30, 2018 (1)		Weighted-Average Interest Rate		December 31, 2017 (2)		Weighted-Average Interest Rate
Unsecured debt:
Revolving credit facility	$	345,000	2.41	%	$	—	—	$	160,000	3.34	%	$	—	—
Total unsecured debt	$	345,000	2.41	%	$	—	—	$	160,000	3.34	%	$	—	—


(1)	Excludes deferred financing costs of ~~$7.6~~$5.4 million in ~~2017~~2018 that decrease the total amount that appears outstanding in our Consolidated Balance ~~Sheets.~~Sheets and $100.0 million categorized as held for disposition as of June 30, 2018 (Note 2).



Initial Warrant Holder	Number of Warrants	Initial Exercise Price
Brookfield - A	57,500,000	$	10.75
Brookfield - B	16,430,000	10.50
	73,930,000



		Exercise Price
Record Date	Issuable Shares	Brookfield - A		Brookfield - B
April 15, 2016	90,288,964	$	8.80	$	8.60
July 15, 2016	90,865,607	8.75		8.54
October 14, 2016	91,553,142	8.68		8.48
December 15, 2016	92,344,178	8.61		8.41
December 27, 2016	93,268,285	8.52		8.32
April 13, 2017	94,170,214	8.44		8.24


(1)	As of July 10, 2017, the Series B preferred unit conversion option expired and now has a fixed cash redemption value of $50 per unit.



Balance at January 1, 2016	$	287,627
Net income	2,039
Distributions	(2,124		)
Redemption of GGPOP units	(1,592		)
Other comprehensive loss	3
Fair value adjustment for noncontrolling interests in Operating Partnership	24,297
Balance at June 30, 2016	$	310,250

Balance at January 1, 2017	$	262,727
Net income	1,251
Distributions	(2,887		)
Redemption of GGPOP units	(651		)
Other comprehensive income	(315		)
Fair value adjustment for noncontrolling interests in Operating Partnership	(10,346		)
Balance at June 30, 2017	$	249,779



Declaration Date	Record Date	Payment Date	Dividend Per Share
2017
August 2	October 13, 2017	October 31, 2017	$	0.22
May 1	July 13, 2017	July 28, 2017	0.22
January 30	April 13, 2017	April 28, 2017	0.22
2016
December 13	December 27, 2016	January 27, 2017	$	0.26
October 31	December 15, 2016	January 6, 2017	0.22
August 1	October 14, 2016	October 31, 2016	0.20
May 2	July 15, 2016	July 29, 2016	0.19
February 1	April 15, 2016	April 29, 2016	0.19


	Foreign currency translation			Net unrealized gains (losses) on other financial instruments			Reclassification adjustment for realized gains on available-for-sale securities included in net income		Total
Balance at April 1, 2016	$	(77,859	)	$	109		$	—	$	(77,750	)
Other comprehensive income (loss)	8,608			11			—		8,619
Balance at June 30, 2016	$	(69,251	)	$	120		$	—	$	(69,131	)
												Foreign currency translation			Net unrealized gains (losses) on other financial instruments			Total
Balance at April 1, 2017	$	(67,998	)	$	117		$	—	$	(67,881	)	$	(67,998	)	$	117		$	(67,881	)
Other comprehensive income (loss)	(3,709		)	(3		)	—		(3,712		)	(3,709		)	(3		)	(3,712		)
Balance at June 30, 2017	$	(71,707	)	$	114		$	—	$	(71,593	)	$	(71,707	)	$	114		$	(71,593	)

Balance at April 1, 2018												$	(72,398	)	$	167		$	(72,231	)
Other comprehensive income (loss)												(9,954		)	(44		)	(9,998		)
Balance at June 30, 2018												$	(82,352	)	$	123		$	(82,229	)


~~(1)~~	~~Changes to prior year weighted average exercise price is due to adjustment of the strike price for the special dividend issued in 2016.~~


ITEM 2	MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS



	June 30, 2017 (1)			June 30, 2016 (1)
In-Place Rents per square foot (2)
Consolidated Properties	$	65.20		$	64.80
Unconsolidated Properties	102.96			100.29
Total Retail Properties	$	78.12		$	76.87

Percentage Leased
Consolidated Properties	95.6		%	96.0		%
Unconsolidated Properties	95.8		%	96.6		%
Total Retail Properties	95.7		%	96.2		%

Tenant Sales Volume (All Less Anchors) (3)
Consolidated Properties	$	12,173		$	12,228
Unconsolidated Properties	9,061			8,795
Total Retail Properties	$	21,234		$	21,023

Tenant Sales per square foot (3)
Consolidated Properties	$	503		$	510
Unconsolidated Properties	765			741
Total Retail Properties	$	590		$	586



	June 30, 2018 (1)			June 30, 2017 (1)
In-Place Rents Per Square Foot for Total Retail Properties (2)	$	78.37		$	78.22

Percentage Leased for Total Retail Properties	95.6		%	95.7		%