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.

Forward-looking information

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

Forward-looking statements include:

† descriptions of plans or objectives for future operations;

† projections of our revenues, net operating income, core net operating income, earnings per share, Funds From Operations ("FFO"), capital expenditures, income tax and other contingent liabilities, dividends, leverage, capital structure or other financial items;

†          forecasts of our future economic performance; or

†          descriptions of assumptions underlying or relating to any of the
foregoing,

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

There are several factors, many beyond our control, which could cause results to differ materially from our expectations, some of which are described in Item 1A Risk Factors in our Annual Report on Form 10-K for the year ended December 31, 2011 (our "Annual Report"). These factors are incorporated herein by reference. Any factor could by itself, or together with one or more other factors, adversely affect our business, results of operations or financial condition. There are also other factors that we have not described in this Quarterly Report or in our Annual Report that could cause results to differ from our expectations.

Overview - Introduction

Our primary business is to own, manage, lease and develop regional malls. The substantial majority of our properties are located in the United States; however, we also own interests in regional malls and property management activities (through unconsolidated joint ventures) in Brazil. As of March 31, 2012, we are the owner, either entirely or with joint venture partners, of 135 regional malls comprising approximately 136 million square feet of gross leasable area. 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.

Overview

In 2011, we embarked on a strategy to execute transactions to achieve our long-term goals of enhancing the quality of our portfolio and maximizing total returns for our shareholders. We continued this strategy to improve the overall quality of our portfolio during 2012, as we successfully completed transactions promoting our long-term strategy as summarized below:

†

† on January 12, 2012, we distributed our shares in RPI to the GGP shareholders of record as of the close of business on December 30, 2011. GGP shareholders were entitled to receive approximately 0.0375 shares of RPI common stock for each share of GGP common stock held as of December 30, 2011. Subsequent to the spin-off, we retained an approximately 1% interest in RPI. These properties are presented within discontinued operations in our Consolidated Statements of Operations and Comprehensive Income (Loss). The transaction decreased our outstanding mortgage loans by $1.12 billion;

† sold our interests in approximately 1.2 million square feet of gross leasable area of non-core assets including an anchor box and two regional malls for $88.6 million, which reduced our property level debt by $78.0 million;

† acquired whole or partial interests in four anchor pads comprising approximately 497 thousand square feet of gross leasable area for $23.2 million, which allows us to recapture real estate in our portfolio and provides us with redevelopment opportunities; and

† on February 23, 2012 we signed a definitive agreement to acquire 11 Sears anchor pads (including fee interests in five anchor pads and long-term leasehold interests in six anchor pads) for purposes of redevelopment or remerchandising. Total consideration paid at closing was $270.0 million. This portfolio represents a significant opportunity to recapture valuable real estate within our portfolio and enhances several expansion and redevelopment opportunities, including re-tenanting the anchor space and adding new in-line GLA. The acquisition closed on April 17, 2012 (Note 16).

As a result of our efforts in 2011 and thus far in 2012, our portfolio now has sales in excess of $500 per square foot. We will continue to evaluate other opportunities to improve our portfolio.

Our total portfolio Core NOI (as defined below) increased 3.3% from $506.5 million for the three months ended March 31, 2011 to $523.4 million for the three months ended March 31, 2012 as a result of increased rents and overage rents while expenses remained relatively flat. Our Core FFO (as defined below) increased 6.7% from $208.2 million for the three months ended 2011 to $222.1 million for the three months ended March 31, 2012. Core FFO increases are primarily the result of increases in Core NOI and decrease in pro rata interest expense due to amortization of debt and improved terms of refinancing transactions completed in 2012 and 2011, and were partially offset by an increase in corporate expenses.

Our key operational objectives include the following:

†

†          lease vacant space;

†          increase the permanent occupancy of the regional mall portfolio,

† opportunistically acquire whole or partial interests in high-quality regional malls and anchor pads that improve the overall quality of our portfolio;

† commence several redevelopment projects within our portfolio;

† form joint ventures with institutional investors to acquire partial interests in regional malls, either currently owned by us or through new acquisitions;

† dispose of properties in our portfolio that do not fit within our long-term strategy, including certain of our office properties, retail strip centers and regional malls; and

† continue to refinance our maturing debt, and certain debt prepayable without penalty, with the goal of lowering our overall borrowing costs and managing future maturities.

We seek to increase long-term NOI (as defined below) growth through proactive management and leasing of our regional malls. Our leasing strategy is to identify and provide the right stores and the appropriate merchandise for each of our regional malls. We believe that the most significant operating factor affecting incremental cash flow and NOI is increased rents earned from tenants at our properties. These rental revenue increases are primarily achieved by:

† renewing expiring leases and re-leasing existing space at rates higher than expiring or existing rates;

† increasing occupancy at the properties so that more space is generating rent; and

† increased tenant sales in which we participate through overage rent.

Operating Metrics



Regional Mall Metrics



The following table summarizes selected operating metrics for our portfolio of
regional malls:



                                                                                                Tenant Sales
                                   Rents per square foot (2)     Percentage Leased (3)      Per Square Foot (4)
March 31, 2012 (1)
Consolidated Properties           $                     66.41                    93.40 %   $                  505
Unconsolidated Properties         $                     71.40                    94.40 %   $                  574
Total Domestic Portfolio          $                     67.86                    93.70 %   $                  525

March 31, 2011 (1)
Consolidated Properties           $                     65.00                    92.40 %   $                  469
Unconsolidated Properties         $                     70.30                    94.00 %   $                  507
Total Domestic Portfolio          $                     66.52                    92.90 %   $                  479

% Change
Consolidated Properties                                  2.17 %                    100 bps                   7.68 %
Unconsolidated Properties                                1.56 %                     40 bps                  13.21 %
Total Domestic Portfolio                                 2.01 %                     80 bps                   9.60 %

(2) Weighted average rent of mall stores as of March 31, 2012 and 2011. Rent is presented on a cash basis and consists of minimum rent, common area costs and real estate taxes.

(3) Represents contractual obligations for space in regional malls or predominantly retail centers and excludes traditional anchor stores.

(4) Comparative rolling twelve month tenant sales for mall stores less than 10,000 square feet.

Lease Spread Metrics



The following table summarizes signed leases that are scheduled to commence in
2012 compared to expiring leases for the prior tenant in the same suite.



                      Number      Square                 Initial Rent Per     Expiring Rent Per     Average Rent
                     of Leases     Feet        Term       Square Foot(1)       Square Foot(2)          Spread
New Leases(3)              278     983,842        8.5   $            69.41   $             60.86   $         8.55
Renewal Leases             578   1,900,033        5.7   $            58.34   $             56.27   $         2.07
New/Renewal Leases         856   2,883,875        6.6   $            62.12   $             57.83   $         4.29

(2) Represents expiring rent at end of lease consisting of base minimum rent, common area costs and real estate taxes.

(3) Represents new leases where downtime between the new and old tenant in the suite was less than nine months.

Results of Operations

We review our results of operations based on NOI for the three months ended March 31, 2012 and 2011. The components of NOI are discussed below.

The following table summarizes minimum rents for the three months ended March 31, 2012 and 2011.

                                      Three Months Ended March 31,
                                        2012               2011           $ Change      % Change

Components of Minimum rents:
Base minimum rents                 $       392,956    $       388,930    $     4,026          1.0 %
Lease termination income                     4,153              3,436            717         20.9
Straight-line rent                          16,312             25,548         (9,236 )      (36.2 )
Above- and below-market tenant
leases, net                                (25,300 )          (21,001 )       (4,299 )       20.5
Total Minimum rents                $       388,121    $       396,913    $    (8,792 )       (2.2 )%

Base minimum rents remained relatively flat, increasing by $4.0 million for the three months ended March 31, 2012.

Straight-line rent and above-and below-market tenant leases, net are non-cash items and reflect the impact of acquisition accounting.

Overage rents increased $2.8 million for the three months ended March 31, 2012 primarily due to increased tenant sales during the 2011 holiday season through 2012.

Other revenue primarily includes parking and specialty leasing, which are revenues generated by the properties.

Noncontrolling interests decreased $0.2 million primarily due to a decrease in net operating income at one of our consolidated joint ventures.

Other property operating costs decreased $1.6 million for the three months ended March 31, 2012 primarily due to savings on property maintenance and utility costs resulting from milder weather, lower labor costs and various cost control measures.

Property maintenance costs decreased $5.4 million due to a decrease in labor costs and snow removal as the result of a mild winter, which were partially offset by higher costs for contract services.

The provision for doubtful accounts increased $2.5 million for the three months ended March 31, 2012 primarily as the result of certain recoveries during the prior year.

The following is a discussion of non-operating items for the three months ended March 31, 2012 compared to March 31, 2011:

Management fees and other corporate revenues primarily represent the revenues earned from the management of our joint venture properties. Management fees and other corporate revenues increased $0.8 million for the three months ended March 31, 2012 due to an increase in management and leasing fees resulting from the management of a new joint venture formed in fourth quarter of 2011.

Property management and other costs represents regional and home office costs and include items such as corporate payroll, rent for office space, supplies and professional fees, which represent corporate overhead costs not generated at the properties. Property management and other costs decreased $5.7 million for the three months ended March 31, 2012 primarily due to a $7.4 million decrease in severance costs incurred in 2011, which was offset by a $0.8 million increase in professional services, a $0.5 million increase in building rent and a $0.5 million increase in travel and entertainment.

General and administrative costs represent the costs to run the public company and include executive costs, audit fees, professional fees and administrative fees related to the public company, and in 2011, also include bankruptcy costs or reimbursements incurred post-emergence. General and administrative expenses increased $9.8 million for the three months ended March 31, 2012 primarily due to the reversal of previously accrued bankruptcy costs of $12.3 million and gains on bankruptcy settlements recorded for the three months ended March 31, 2011. The increase was partially offset by a $2.3 million decrease in executive compensation for the three months ended March 31, 2012.

Depreciation and amortization decreased $10.2 million for the three months ended March 31, 2012 primarily due to fully depreciated or written off assets as tenants vacated since March 2011.

Interest expense decreased $3.8 million for the three months ended March 31, 2012 primarily due to savings from refinancing transactions completed in 2011 and the first quarter of 2012, which resulted in a lower debt balance and lower weighted average interest expense in 2012.

The Warrant liability adjustment represents the non-cash income (expense) recognized as a result of the change in the fair value of the Warrant liability (Note 8). For the three months ended March 31, 2012, we incurred additional expense of $143.1 million related to the Warrant liability primarily due to the increase in our stock price, which was partially offset by a decrease in implied volatility since December 31, 2011. For the three months ended March 31, 2011, we recognized income of $76.4 million related to the Warrant liability primarily due to a decrease in our estimate of the implied volatility since December 31, 2010.

The provision for income taxes decreased $1.6 million for the three months ended March 31, 2012 primarily due to the recognition of an uncertain tax position of $2.2 million for the three months ended March 31, 2011.

The equity in income (loss) of Unconsolidated Real Estate Affiliates increased $8.9 million for the three months ended March 31, 2012 primarily due to decreased interest expense of $4.3 million related to the refinancing of mortgage notes at Riverchase Galleria and other joint ventures in 2011 and 2012.

Liquidity and Capital Resources

Our primary uses of cash include payment of operating expenses, working capital, debt repayment, including principal and interest, reinvestment in properties, redevelopment of properties, tenant allowances and dividends. Our primary sources of cash include operating cash flows, including our share of cash flows produced by our Unconsolidated Real Estate Affiliates, incremental cash from refinancings and borrowings under our revolving credit facility.

Our capital plan is to refinance our existing debt, lower our borrowing costs, manage our future maturities and provide the necessary capital to fund growth. We believe that we currently have sufficient liquidity to satisfy all of our commitments in the form of $494.8 million of unrestricted cash and $750.0 million of available credit under our credit facility as of March 31, 2012, as well as anticipated cash provided by operations. On April 30, 2012, we obtained a $1.00 billion secured corporate line of credit. The new facility has an uncommitted accordion feature for a total facility of up to $1.25 billion and a term of four years. The facility bears interest at LIBOR plus 250 basis points and is determined by the Company's leverage level. The new facility is guaranteed by certain of our subsidiaries and secured by first-lien pledges of equity interests in certain of our subsidiaries. In connection with the new facility, the Company terminated its $750.0 million corporate line of credit. In addition, on April 2, 2012, we closed the $1.40 billion secured financing of Ala Moana Center. The loan matures in April 2022, is interest only and bears interest at 4.23% per annum. As a result, we expect interest expense to decrease by approximately $3.5 million per quarter.

We have executed and continue to execute a refinancing strategy of extending the average debt maturity profile while reducing interest rates. We will continue to modify our capital structure to provide the necessary financial flexibility for the Company.

During 2012, we executed the following refinancing and capital transactions (at our proportionate share):

† on January 12, 2012, we distributed our shares in RPI to the GGP shareholders of record as of the close of business on December 30, 2011, decreasing our outstanding mortgage loans by $1.12 billion;

† in March 2012, we obtained a $130.0 million secured financing of The Shoppes at Buckland Hills. The loan matures in ten years and bears interest at 5.19% per annum. The net proceeds of the loan, along with a $26.1 million capital contribution were used to fully repay a $156.1 million mortgage upon its maturity; and

† during 2012, we sold our interests in one anchor box and two operating properties, for an aggregate $88.6 million with net proceeds of $26.6 million.

We have incurred capital expenditures of $19.8 million for the three months ended March 31, 2012 and $16.9 million for the three months ended March 31, 2011 relating to our operating properties. In addition, we incurred tenant allowances for our operating properties of $23.7 million for the three months ended March 31, 2012 and $21.1 million for the three months ended March 31, 2011.

As of March 31, 2012, we have $8.90 billion of debt pre-payable at par. We may pursue opportunities to refinance this debt at better terms. Our long term goal is to improve our overall debt to earnings before interest, taxes and depreciation and amortization, or EBIDTA, and leverage ratios by improving operations, amortization of debt and refinancing debt at improved terms.

Our key financing and capital raising objectives include the following:

† continue to refinance our maturing debt, and certain debt prepayable without penalty, with the goal of lowering our overall borrowing costs and managing future maturities;

† raise capital by forming joint ventures with institutional investors to acquire partial interests in regional malls, either currently owned by us or through new acquisitions; and

† dispose of properties in our portfolio that do not fit within our long-term strategy, including certain of our office properties, retail strip centers and regional malls.

We may also raise capital through public or private issuances of debt securities, preferred stock, common stock, common units of the Operating Partnership or other capital raising activities.

As of March 31, 2012, our proportionate share of total debt aggregated $18.87 billion consisting of our consolidated debt, net of noncontrolling interest, of $16.05 billion combined with our share of the debt of our Unconsolidated Real Estate Affiliates of $2.82 billion. Of the amounts maturing in 2012, $1.30 billon is secured and $558.7 million is unsecured. Of our proportionate share of total debt, $2.25 billion of our consolidated debt is recourse due to guarantees or other security provisions for the benefit of the note holder.

Our outstanding corporate debt is comprised of $206.2 million of Junior Subordinated Notes which are due in 2041 and $1.65 billion of bonds with maturity dates from 2012 through November 2015. We expect to repay the $349.5 million bonds that are due in September 2012 from available cash on-hand.

The following table illustrates the scheduled loan maturities of our mortgages, notes and loans payable for our consolidated debt (net of noncontrolling interest) and unconsolidated debt at our proportionate share as of March 31, 2012. Also, $206.2 million of callable subordinated notes are included in the $1.25 billion of consolidated debt that is due in 2012. Although we do not expect the notes to be redeemed prior to maturity in 2041, the trust that owns the notes may exercise its right to redeem the notes prior to 2041. Of the $5.64 billion of consolidated debt that matures in the subsequent period, $2.17 billion matures in 2017 and $1.28 billion matures in 2018.

              Consolidated     Unconsolidated
2012         $    1,248,798   $        608,666
2013                978,415            146,426
2014              2,160,268            138,211
2015              1,713,815            213,735
2016              2,606,385                  -
Subsequent        5,641,388          1,358,805

We generally believe that we will be able to extend the maturity date or refinance the consolidated debt that is scheduled to mature in 2012. We also believe that the joint ventures will be able to refinance the debt of our Unconsolidated Real Estate Affiliates that mature in 2012; 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.

Redevelopment and Acquisitions

We are currently redeveloping several consolidated and unconsolidated properties, including Glendale Galleria, North Point and Northridge Fashion Center with our joint venture partners. These projects are expected to be completed in 2012 and 2013 and we expect to incur costs of approximately $80 million at our proportionate share. We continue to evaluate a number of other redevelopment prospects to further enhance the quality of our assets. As part of our overall strategy we may:

† opportunistically acquire whole or partial interests in high-quality regional malls and anchor pads that improve the overall quality of our portfolio;

† commence several redevelopment projects within our portfolio identified as providing compelling risk-adjusted returns on investment; and

† purchase joint venture interests from our partners.

On February 23, 2012 we signed a definitive agreement for the acquisition of 11 Sears anchor pads (including fee interests in five anchor pads and long-term leasehold interests in six anchor pads) within our portfolio for $270.0 million. This portfolio represents a significant opportunity to recapture valuable real estate within our portfolio and enhances several redevelopment and remerchandising opportunities, including re-tenanting the anchor space and adding new in-line GLA. The acquisition closed on April 17, 2012 (Note 16).

On April 5, 2012, we acquired the remaining 49% interest in two properties, previously owned through a joint venture, for $191.2 million. The properties, which are currently recorded under the equity method of accounting, will be consolidated as of the acquisition date (Note 16).

Dividend

On May 1, 2012, the Board of Directors declared a second quarter common stock dividend of $0.10 per share payable on July 30, 2012 to stockholders of record on July 16, 2012.

On December 20, 2011, the Board of Directors approved the distribution of RPI in the form of a special dividend for which GGP shareholders were entitled to receive approximately 0.0375 shares of RPI common stock for each share of GGP Common Stock held as of December 30, 2011. RPI's net equity was recorded as of December 31, 2011 as a dividend payable as substantive conditions for the spin-off were met as of December 31, 2011 and it was probable that the spin-off would occur. On January 12, 2012, we distributed our shares in RPI to the GGP shareholders of record as of the close of business on December 30, 2011. As of December 31, 2011, we had recorded a distribution payable of $526.3 million and a related decrease in retained earnings (accumulated deficit), of which $426.7 . . .