SANTA MONICA, Calif.,
Results included:
* During the quarter,
* Mall tenant sales per square foot decreased to
* Mall occupancy at
* FFO per share-diluted for the year ended
Commenting on results,
Redevelopment Activity
Construction continues on Santa Monica Place, a regional shopping center
under development in Santa Monica,
At Scottsdale Fashion Square, construction on an approximately 160,000-
square-foot expansion continues on schedule toward a fall 2009 opening. The
expansion will be anchored by a 60,000-square-foot Barneys New York. In
addition, recently signed fashion retailers
Also during the quarter, the Company wrote off
Financing Activity
In December, 2008, the Company closed on a
During 2008 the Company completed 13 financing transactions with its pro-
rata share of the loan proceeds being nearly
Loan transactions completed or underway for 2009 include the recent
closing of a
In addition, the Company has obtained a commitment for a
During the fourth quarter the Company opportunistically retired
Earnings Guidance
Management is providing guidance for both FFO per share-diluted and EPS
for 2009. The FFO guidance of
The following table provides the reconciliation of the range of estimated EPS to estimated FFO per diluted-share.
For the year ended December 31, 2009 Low End High End
Estimated EPS $.54 $.79
Depreciation and amortization including pro rata
share of joint ventures 3.96 3.96
Estimated diluted FFO per share $4.50 $4.75
Plus: Interest Expense 4.03 4.03
Plus: Non real estate depreciation, amortization
of loan costs, income
Taxes and less gain on sale of
undepreciated assets .12 .12
Net operating income per share $8.65 $8.90
The Company's 2009 earnings guidance is based upon its internal forecasting and planning process and on many assumptions including management's current view of market and economic conditions, including those specifically impacting the regional mall business. Due to the uncertainty in the timing and economics of dispositions and acquisitions of assets and joint venture interests, the guidance ranges do not include any potential impact from such dispositions or acquisitions.
The
Investor Conference Call
The Company will provide an online Web simulcast and rebroadcast of its
quarterly earnings conference call. The call will be available on The
The Company will publish a supplemental financial information package which will be available at http://www.macerich.com in the Investing Section. It will also be furnished to the SEC as part of a Current Report on Form 8-K.
Note: This release contains statements that constitute forward-looking
statements. Stockholders are cautioned that any such forward-looking
statements are not guarantees of future performance and involve risks,
uncertainties and other factors that may cause actual results, performance or
achievements of the Company to vary materially from those anticipated,
expected or projected. Such factors include, among others, general industry,
economic and business conditions, which will, among other things, affect
demand for retail space or retail goods, availability and creditworthiness of
current and prospective tenants, anchor or tenant bankruptcies, closures,
mergers or consolidations, lease rates and terms, interest rate fluctuations,
availability, terms and cost of financing and operating expenses; adverse
changes in the real estate markets including, among other things, competition
from other companies, retail formats and technology, risks of real estate
development and redevelopment, acquisitions and dispositions; the liquidity of
real estate investments, governmental actions and initiatives (including
legislative and regulatory changes); environmental and safety requirements;
and terrorist activities which could adversely affect all of the above
factors. The reader is directed to the Company's various filings with the
(See attached tables)
THE MACERICH COMPANY
FINANCIAL HIGHLIGHTS
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
Results of Operations:
Results before Impact of Results after
SFAS 144 (e) SFAS 144 (e) SFAS 144 (e)
For the Three Months For the Three Months For the Three Months
Ended December 31, Ended December 31, Ended December 31,
Unaudited Unaudited
2008 2007 2008 2007 2008 2007
Minimum
rents $151,128 $141,881 ($778) ($12,756) $150,350 $129,125
Percentage
rents 9,320 15,196 - (538) 9,320 14,658
Tenant
recoveries 62,470 67,690 (39) (6,983) 62,431 60,707
Management
Companies'
revenues 10,382 12,157 - - 10,382 12,157
Other income 9,947 9,231 - (805) 9,947 8,426
Total
revenues $243,247 $246,155 ($817) ($21,082) $242,430 $225,073
Shopping
center and
operating
expenses 73,880 73,875 (212) (7,607) 73,668 66,268
Management
Companies'
operating
expenses 19,185 19,579 - - 19,185 19,579
Income tax
provision 1,876 8 - - 1,876 8
Depreciation
and
amortization 93,802 62,626 (342) (4,545) 93,460 58,081
REIT general
and
administrative
expenses 5,101 4,823 - - 5,101 4,823
Interest
expense 71,717 68,833 - (2,885) 71,717 65,948
Gain on early
extinguishment
of debt 95,265 - - - 95,265 -
(Loss) gain on
sale or
write-down of
assets (26,421) 7,882 (1,436) 86 (27,857) 7,968
Equity in
income of
unconsolidated
joint
ventures (c) 26,659 29,330 - - 26,659 29,330
Minority
interests in
consolidated
joint ventures 207 (5,398) - 4,681 207 (717)
Income from
continuing
operations 73,396 48,225 (1,699) (1,278) 71,697 46,947
Discontinued
Operations:
Gain (loss) on
sale or
disposition of
assets - - 1,436 (86) 1,436 (86)
Income from
discontinued
operations - - 263 1,364 263 1,364
Income before
minority
interests of
OP 73,396 48,225 - - 73,396 48,225
Income
allocated to
minority
interests of
OP 10,165 7,016 - - 10,165 7,016
Net income
before
preferred
dividends 63,231 41,209 - - 63,231 41,209
Preferred
dividends (a) - 2,006 - - - 2,006
Adjustment of
minority
interest due
to redemption
value - (727) - - - (727)
Net income
available to
common
stockholders $63,231 $39,930 $0 $0 $63,231 $39,930
Average number
of shares
outstanding -
basic 76,194 72,195 76,194 72,195
Average shares
outstanding,
assuming full
conversion of
OP Units
(d) (e) 88,510 84,918 88,510 84,918
Average shares
outstanding -
Funds From
Operations
("FFO") -
diluted
(a) (d) (e) 88,703 91,165 88,703 91,165
Per share
income -
diluted before
discontinued
operations - - $0.81 $0.53
Net income per
share - basic $0.83 $0.55 $0.83 $0.55
Net income per
share - diluted
(a) (e) $0.83 $0.55 $0.83 $0.55
Dividend
declared per
share $0.80 $0.80 $0.80 $0.80
FFO - basic
(b) (d) $184,144 $126,571 $184,144 $126,571
FFO - diluted
(a) (b)
(d) (e) $184,341 $132,479 $184,341 $132,479
FFO per
share -
basic (b) (d) $2.08 $1.50 $2.08 $1.50
FFO per
share -
diluted
(a) (b)
(d) (e) $2.08 $1.45 $2.08 $1.45
Percentage
change vs
2007 43.32%
THE MACERICH COMPANY
FINANCIAL HIGHLIGHTS
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
Results of Operations:
Results before Impact of Results after
SFAS 144 (e) SFAS 144 (e) SFAS 144 (e)
For the Twelve Months For the Twelve Months For the Twelve Months
Ended December 31, Ended December 31, Ended December 31,
Unaudited Unaudited
2008 2007 2008 2007 2008 2007
Minimum
rents $547,873 $522,167 ($3,452) ($46,418) $544,421 $475,749
Percentage
rents 19,092 26,894 - (790) 19,092 26,104
Tenant
recoveries 267,426 274,091 (541) (28,581) 266,885 245,510
Management
Companies'
revenues 40,716 39,752 - - 40,716 39,752
Other
income 30,724 34,969 (348) (7,770) 30,376 27,199
Total
revenues $905,831 $897,873 ($4,341) ($83,559) $901,490 $814,314
Shopping
center and
operating
expenses 288,287 285,350 (1,210) (28,620) 287,077 256,730
Management
Companies'
operating
expenses 77,072 73,761 - - 77,072 73,761
Income tax
provision
(benefit) 1,126 (470) - - 1,126 (470)
Depreciation
and
amortization 279,339 231,860 (1,512) (19,351) 277,827 212,509
REIT general
and
administrative
expenses 16,520 16,600 - - 16,520 16,600
Interest
expense 281,356 263,691 - (13,564) 281,356 250,127
Gain (loss)
on early
extinguishment
of debt 95,265 (877) - - 95,265 (877)
Gain (loss) on
sale or
write-down of
assets 68,714 9,771 (100,533) 2,375 (31,819) 12,146
Equity in
income of
unconsolidated
joint
ventures (c) 93,831 81,458 - - 93,831 81,458
Minority
interests in
consolidated
joint
ventures (1,736) (18,589) - 16,288 (1,736) (2,301)
Income from
continuing
operations 218,205 98,844 (102,152) (3,361) 116,053 95,483
Discontinued
Operations:
Gain (loss)
on sale or
disposition
of assets - - 100,533 (2,409) 100,533 (2,409)
Income from
discontinued
operations - - 1,619 5,770 1,619 5,770
Income before
minority
interests of
OP 218,205 98,844 - - 218,205 98,844
Income
allocated to
minority
interests
of OP 30,765 13,036 - - 30,765 13,036
Net income
before
preferred
dividends 187,440 85,808 - - 187,440 85,808
Preferred
dividends (a) 4,124 10,058 - - 4,124 10,058
Adjustment of
minority
interest due
to redemption
value - 2,046 - - - 2,046
Net income
available to
common stock-
holders $183,316 $73,704 $0 $0 $183,316 $73,704
Average number
of shares
outstanding -
basic 74,319 71,768 74,319 71,768
Average shares
outstanding,
assuming full
conversion of
OP Units
(d) (e) 86,794 84,760 86,794 84,760
Average shares
outstanding -
FFO - diluted
(a) (d) (e) 88,446 88,272 88,446 88,272
Per share
income -
diluted before
discontinued
operations - - $1.29 $1.01
Net income per
share - basic $2.47 $1.03 $2.47 $1.03
Net income per
share - diluted
(a) (e) $2.47 $1.02 $2.47 $1.02
Dividend
declared per
share $3.20 $2.93 $3.20 $2.93
FFO - basic
(b) (d) $481,338 $397,869 $481,338 $397,869
FFO - diluted
(a) (b)
(d) (e) $486,441 $407,927 $486,441 $407,927
FFO per
share -
basic (b) (d) $5.55 $4.71 $5.55 $4.71
FFO per
share -
diluted (a) (b)
(d) (e) $5.50 $4.62 $5.50 $4.62
Percentage
change vs
2007 19.01%
THE MACERICH COMPANY
FINANCIAL HIGHLIGHTS
(IN THOUSANDS, EXCEPT SHARE AND PER SHARE AMOUNTS)
(a) On February 25, 1998 , the Company sold $100 million of convertible
preferred stock representing 3.627 million shares.
The convertible preferred shares were convertible on a 1 for 1 basis
for common stock. The preferred shares were not assumed converted
for purposes of net income per share - diluted for the three and
twelve months ended December 31, 2008 and for all periods presented
for 2007 as they would be antidilutive to the calculation. The
weighted average preferred shares are assumed converted for purposes
of FFO per share - diluted as they are dilutive to those
calculations for all periods presented.
On October 18, 2007 , 560,000 shares of convertible preferred stock
were converted to common shares. Additionally, on May 6, 2008 ,
May 8, 2008 and September 18, 2008 , 684,000, 1,338,860 and 1,044,271
shares of convertible preferred stock were converted to common
shares, respectively. As of December 31, 2008 , there was no
convertible preferred stock outstanding.
(b) The Company uses FFO in addition to net income to report its
operating and financial results and considers FFO and FFO-diluted as
supplemental measures for the real estate industry and a supplement
to Generally Accepted Accounting Principles (GAAP) measures.
NAREIT defines FFO as net income (loss) (computed in accordance with
GAAP), excluding gains (or losses) from extraordinary items and
sales of depreciated operating properties, plus real estate related
depreciation and amortization and after adjustments for
unconsolidated partnerships and joint ventures. Adjustments for
unconsolidated partnerships and joint ventures are calculated to
reflect FFO on the same basis. FFO and FFO on a fully diluted basis
are useful to investors in comparing operating and financial results
between periods. This is especially true since FFO excludes real
estate depreciation and amortization, as the Company believes real
estate values fluctuate based on market conditions rather than
depreciating in value ratably on a straight-line basis over time.
FFO on a fully diluted basis is one of the measures investors find
most useful in measuring the dilutive impact of outstanding
convertible securities. FFO does not represent cash flow from
operations as defined by GAAP, should not be considered as an
alternative to net income as defined by GAAP and is not indicative
of cash available to fund all cash flow needs. FFO as presented may
not be comparable to similarly titled measures reported by other
real estate investment trusts.
Effective January 1, 2003 , gains or losses on sales of undepreciated
assets and the impact of SFAS 141 have been included in FFO.
The inclusion of gains on sales of undepreciated assets increased
FFO for the three and twelve months ended December 31, 2008 and 2007
by $0.3 million , $3.8 million , $10.0 million and $10.8 million ,
respectively, or by $0.00 per share, $0.04 per share, $0.11 per
share and $0.12 per share, respectively. Additionally, SFAS 141
increased FFO for the three and twelve months ended December 31,
2008 and 2007 by $14.2 million and $27.4 million , $3.5 million and
$15.1 million , respectively, or by $0.16 per share, $0.31 per share,
$0.04 per share and $0.17 per share, respectively.
(c) This includes, using the equity method of accounting, the Company's
prorata share of the equity in income or loss of its unconsolidated
joint ventures for all periods presented.
(d) The Macerich Partnership, LP (the "Operating Partnership" or the
"OP") has operating partnership units ("OP units"). Each OP unit can
be converted into a share of Company common stock. Conversion of the
OP units not owned by the Company has been assumed for purposes of
calculating the FFO per share and the weighted average number of
shares outstanding. The computation of average shares for
FFO - diluted includes the effect of share and unit-based
compensation plans and convertible senior notes using the treasury
stock method. It also assumes conversion of MACWH, LP preferred and
common units to the extent they are dilutive to the calculation. For
the three and twelve months ended December 31, 2008 and for the
three months ended December 31, 2007 , the MACWH, LP preferred units
outstanding were dilutive to FFO.
(e) In October 2001 , the FASB issued SFAS No. 144, "Accounting for the
Impairment or Disposal of Long-Lived Assets" ("SFAS 144"). SFAS 144
addresses financial accounting and reporting for the impairment or
disposal of long-lived assets. The Company adopted SFAS 144 on
January 1, 2002 .
On April 25, 2005 , in connection with the acquisition of Wilmorite
Holdings, L.P. and its affiliates, the Company issued as part of the
consideration participating and non-participating convertible
preferred units in MACWH, LP . The participating units are not
assumed converted for purposes of net income per share and
FFO - diluted per share for all periods presented as they would be
antidilutive to the calculation. On January 1, 2008 , a subsidiary of
the Company, at the election of the holders, redeemed approximately
3.4 million participating convertible preferred units in exchange
for the distribution of the interests in the entity which held that
portion of the Wilmorite portfolio that consisted of Eastview
Commons, Eastview Mall, Greece Ridge Center, Marketplace Mall and
Pittsford Plaza ("Rochester Properties"). This exchange is referred
to as the "Rochester Redemption." As a result of the Rochester
Redemption , the Company has classified the results of operations
from the Rochester Properties to discontinued operations and
recorded a gain of $99.3 million for the period ended March 31,
2008 .
On December 19, 2008 , the Company sold the fee simple and/or ground
leasehold interests in three freestanding Mervyn's buildings to the
Pacific Premier Retail Trust joint venture for $43.4 million . As a
result of the sale, the Company has classified the results of
operations to discontinued operations for all periods presented and
recorded a gain of $1.5 million for the period ended December 31,
2008 .
THE MACERICH COMPANY
FINANCIAL HIGHLIGHTS
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
Pro rata share of joint ventures:
For the Three Months For the Twelve Months
Ended December 31, Ended December 31,
Unaudited Unaudited
2008 2007 2008 2007
Revenues:
Minimum rents $70,398 $63,634 $272,660 $250,220
Percentage rents 6,881 8,408 14,142 15,733
Tenant recoveries 33,480 30,868 130,552 118,798
Other 5,122 3,517 22,493 14,840
Total revenues $115,881 $106,427 $439,847 $399,591
Expenses:
Shopping center and
operating expenses 41,444 33,100 149,844 130,294
Interest expense 26,269 25,640 104,119 100,383
Depreciation and
amortization 22,115 21,197 96,441 88,807
Total operating expenses 89,828 79,937 350,404 319,484
Gain on sale or write-down
of assets 160 2,424 3,432 400
Equity in income of joint
ventures 446 416 956 951
Net income $26,659 $29,330 $93,831 $81,458
Reconciliation of Net Income to FFO (b):
For the Three Months For the Twelve Months
Ended December 31, Ended December 31,
Unaudited Unaudited
2008 2007 2008 2007
Net income - available to
common stockholders $63,231 $39,930 $183,316 $73,704
Adjustments to reconcile net
income to FFO - basic
Minority interest in OP 10,165 7,016 30,765 13,036
Loss (gain) on sale or
write-down of consolidated
assets 26,421 (7,882) (68,714) (9,771)
Adjustment of minority
interest due to redemption
value - (727) - 2,046
plus gain on undepreciated
asset sales - consolidated
assets - 7,596 798 8,047
plus minority interest share
of (loss) gain on sale or
write-down of consolidated
joint ventures (404) 373 185 760
less write-down of
consolidated assets (27,445) - (27,445) -
Gain on sale or write-down
of assets from
unconsolidated entities
(pro rata share) (160) (2,424) (3,432) (400)
plus gain on undepreciated
asset sales - unconsolidated
entities (pro rata share) 274 2,447 3,039 2,793
plus minority interest share
of gain on sale of
unconsolidated entities - - 487 -
less write-down of
assets - unconsolidated
entities (pro rata share) (94) - (94) -
Depreciation and amortization
on consolidated assets 93,802 62,626 279,339 231,860
Less depreciation and
amortization allocable to
minority interests on
consolidated joint ventures (968) (1,424) (3,395) (4,769)
Depreciation and amortization
on joint ventures
(pro rata) 22,115 21,197 96,441 88,807
Less: depreciation on
personal property (2,793) (2,157) (9,952) (8,244)
Total FFO - basic $184,144 $126,571 $481,338 $397,869
Additional adjustment to
arrive at FFO - diluted
Preferred stock dividends
earned - 2,006 4,124 10,058
Preferred units - dividends 197 3,902 979 antidilutive
Total FFO - diluted $184,341 $132,479 $486,441 $407,927
Reconciliation of EPS to FFO
per diluted share:
For the Three Months For the Twelve Months
Ended December 31, Ended December 31,
Unaudited Unaudited
2008 2007 2008 2007
Earnings per share - diluted $0.83 $0.55 $2.47 $1.02
Per share impact of
depreciation and amortization
of real estate 1.27 0.95 4.17 3.63
Per share impact of (gain)
loss on sale or write-down of
depreciated assets (0.02) 0.00 (1.12) 0.03
Per share impact of preferred
stock not dilutive to EPS - (0.04) (0.02) (0.08)
Per share impact of adjustment
of minority interest due to
redemption value - (0.01) - 0.02
FFO per share - diluted $2.08 $1.45 $5.50 $4.62
THE MACERICH COMPANY
FINANCIAL HIGHLIGHTS
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
Reconciliation of Net Income to EBITDA:
For the Three Months For the Twelve Months
Ended December 31, Ended December 31,
Unaudited Unaudited
2008 2007 2008 2007
Net income - available to
common stockholders $63,231 $39,930 $183,316 $73,704
Interest expense -
consolidated assets 71,717 68,833 281,356 263,691
Interest expense -
unconsolidated entities
(pro rata) 26,269 25,640 104,119 100,383
Depreciation and
amortization - consolidated
assets 93,802 62,626 279,339 231,860
Depreciation and
amortization - unconsolidated
entities (pro rata) 22,115 21,197 96,441 88,807
Minority interest in OP 10,165 7,016 30,765 13,036
Adjustment of minority
interest due to
redemption value - (727) - 2,046
Less: Interest expense and
depreciation and
amortization
allocable to minority
interests on
consolidated joint
ventures (1,721) (1,717) (5,344) (6,386)
(Gain) loss on early
extinguishment of debt (95,265) - (95,265) 877
Loss (gain) on sale or
write-down of assets -
consolidated assets 26,421 (7,882) (68,714) (9,771)
Gain on sale or write-down
of assets - unconsolidated
entities (pro rata) (160) (2,424) (3,432) (400)
Add: Minority interest share
of gain on sale of
consolidated joint ventures (404) 373 185 760
Add: Minority interest share
of gain on sale of
unconsolidated entities - - 487 -
Income tax expense
(benefit) 1,876 8 1,126 (470)
Distributions on preferred
units 197 3,902 979 14,821
Preferred dividends - 2,006 4,124 10,058
EBITDA (f) $218,243 $218,781 $809,482 $783,016
Reconciliation of EBITDA to Same Centers - Net Operating Income ("NOI"):
For the Three Months For the Twelve Months
Ended December 31, Ended December 31,
Unaudited Unaudited
2008 2007 2008 2007
EBITDA (f) $218,243 $218,781 $809,482 $783,016
Add: REIT general and
administrative expenses 5,101 4,823 16,520 16,600
Management Companies'
revenues (10,382) (12,157) (40,716) (39,752)
Management Companies'
operating expenses 19,185 19,579 77,072 73,761
Lease termination income
of comparable centers (1,678) (1,122) (10,341) (11,553)
EBITDA of non-comparable
centers (41,680) (36,430) (150,301) (130,053)
Same Centers - NOI (g) $188,789 $193,474 $701,716 $692,019
(f) EBITDA represents earnings before interest, income taxes,
depreciation, amortization, minority interest, extraordinary items,
gain (loss) on sale of assets and preferred dividends and includes
joint ventures at their pro rata share. Management considers EBITDA
to be an appropriate supplemental measure to net income because it
helps investors understand the ability of the Company to incur and
service debt and make capital expenditures. EBITDA should not be
construed as an alternative to operating income as an indicator of
the Company's operating performance, or to cash flows from operating
activities (as determined in accordance with GAAP) or as a measure
of liquidity. EBITDA, as presented, may not be comparable to
similarly titled measurements reported by other companies.
(g) The Company presents same-center NOI because the Company believes it
is useful for investors to evaluate the operating performance of
comparable centers. Same-center NOI is calculated using total EBITDA
and subtracting out EBITDA from non-comparable centers and
eliminating the management companies and the Company's general and
administrative expenses. Same center NOI excludes the impact of
straight-line and SFAS 141 adjustments to minimum rents.
SOURCE
both of The
Web site: http://www.macerich.com/