- Net income per share-diluted increased to $.50 compared to $.19 for the quarter ended March 31, 2001. The large increase was driven by a gain on sale of assets of $.29 per share-diluted for the quarter ended March 31, 2002.
- During the quarter, Macerich signed new leases at average initial rents of $37.92 per square foot, substantially in excess of average portfolio minimum rents of $29.14. First year rents on mall and freestanding comparable store leases signed during the quarter were 26% higher than expiring rents.
- Portfolio occupancy remained high at 92.0% as of March 31, 2002 and decreased slightly compared to 92.4% at March 31, 2001.
- The quarterly dividend of $.55 per share was declared and is payable on June 10, 2002 to shareholders of record on May 20, 2002.
- Tenant sales per square foot for the twelve months ended March 31, 2002 were $350, unchanged from December 31, 2001.
- Funds from operations ("FFO") per share -- diluted increased 7.45% to $.70 for the quarter ended March 31, 2002 compared to $.65 for the comparable period in 2001.
Operating Results for the Quarter Ended March 31, 2002
In October 2001, the Financial Accounting Standards Board ("FASB") issued Statement of Financial Accounting Standards ("SFAS") 144, "Accounting for the Impairment or Disposal of Long-Lived Assets." The Company adopted SFAS 144 on January 1, 2002. SFAS 144 requires that assets sold after January 1, 2002 are to be reported as "discontinued operations" on the income statement for the year of the sale and retroactively for all prior years presented. The Company sold Boulder Plaza on March 19, 2002 and in accordance with SFAS 144 the results of Boulder Plaza for the periods of January 1 through March 19, 2002 and the period from January 1, 2001 to March 31, 2001 have been reclassified from operations into discontinued operations on the income statement. This accounting pronouncement will not have an impact on Funds from Operations.
Total revenues were $77.0 million for the quarter, compared to $77.3 million for the quarter ended March 31, 2001. The pro rata income of unconsolidated entities increased to $6.3 million for the quarter compared to $6.1 million for the quarter ended March 31, 2001.
Same center earnings, before interest, taxes, depreciation and amortization, including joint ventures at pro rata, ("EBITDA") grew at a 2.45% rate for the quarter ended March 31, 2002 compared to the same period in 2001.
Gain on sale of assets was $13.3 million during the quarter ended March 31, 2002 compared to a $.3 million loss on sale of assets during the comparable quarter in 2001. The gain in 2002 resulted primarily from the sale of Boulder Plaza, a 159,000 square foot community center located in Colorado. Boulder Plaza was sold in March 2002 for $24.8 million. The sale resulted in a $13.4 million gain on sale of the asset.
For the quarter ended March 31, 2002, FFO-diluted was $41.1 million compared to $38.1 million for the first quarter of 2001. Net income available to common stockholders for the quarter was $17.4 million compared to $6.4 million for the first quarter of 2001 and net income per share-diluted was $.50 compared to $.19 for the quarter ended March 31, 2001.
Highlights
- During the quarter, leases were signed for approximately 265,000 square feet of mall and freestanding space. The average rent on new leases was $37.92 per square foot, 26% higher than expiring rents on a comparable space basis.
- Macy's opened an 110,000 square foot store at Capitola Mall in California.
- The Queens Center redevelopment and expansion continued with pre-leasing reaching the 50% level. The project will increase the size of the mall from 620,000 square feet to approximately 1 million square feet, including the addition of 250,000 square feet of mall shops. Construction is expected to start in mid-2002 with completion estimated, in phases, through late 2004.
- The Company issued 1,968,957 shares of common stock raising net proceeds of $52.2 million.
- Total same center tenant sales for the quarter decreased .5% and comparable tenant sales decreased 2.9% compared to the first quarter of 2001.
- During the quarter, the Company sold Boulder Plaza, a community center, for $24.8 million, recognizing a $13.4 million gain on asset sale.
2002 Earnings Estimates
The Company remains comfortable with its previously provided 2002 FFO per share-diluted guidance in the $3.11 to $3.18 range.
The Macerich Company is a fully integrated self-managed and self-administered real estate investment trust, which focuses on the acquisition, leasing, management and redevelopment of regional malls and community centers throughout the United States. The Company is the sole general partner and owns an 80% ownership interest in The Macerich Partnership, L.P. Macerich owns interests in 46 regional malls and three community centers totaling approximately 41 million square feet. Additional information about The Macerich Company can be obtained from the Company's web site at www.macerich.com .
Investor Conference Call
The Company will provide an online Web simulcast and rebroadcast of its first quarter earnings conference call. The call will be available on The Macerich Company's website at www.macerich.com , through Vcall at www.vcall.com , and through Street Events at www.streetevents.com . The call begins today, May 13, at 10:30 Pacific Standard Time. To listen to the call, please go to any of these web sites at least 15 minutes prior to the call in order to register and download audio software if needed. An online replay will be available for 90 days after the call.
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, tenant bankruptcies, lease rates and terms, availability 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 redevelopment, acquisitions and dispositions; governmental actions and initiatives; 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 Securities and Exchange Commission, for a discussion of such risks and uncertainties.
THE MACERICH COMPANY
FINANCIAL HIGHLIGHTS
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
Results of Operations (unaudited):
Results before Impact of Results after
SFAS 144 (e) SFAS 144 (e) SFAS 144 (e)
For the Three For the Three For the Three
Months Ended Months Ended Months Ended
March 31 March 31 March 31
2002 2001 2002 2001 2002 2001
Minimum Rents 48,970 48,665 (405) (379) 48,565 48,286
Percentage Rents 1,297 1,848 -- (5) 1,297 1,843
Tenant Recoveries 24,698 24,803 (59) (82) 24,639 24,721
Other Income 2,445 2,447 4 (8) 2,449 2,439
Total Revenues 77,410 77,763 (460) (474) 76,950 77,289
Shopping center
and operating
expenses (c) 25,755 24,151 (57) (101) 25,698 24,050
Depreciation and
amortization 16,624 16,104 (115) (87) 16,509 16,017
General,
administrative and
other expenses 1,533 1,682 -- -- 1,533 1,682
Interest expense 25,124 27,996 -- -- 25,124 27,996
Gain on
sale of assets 13,256 (321) (13,408) -- (152) (321)
Pro rata income of
unconsolidated
entities (c) 6,306 6,055 -- -- 6,306 6,055
Income before
minority interest
& extraordinary
items 27,936 13,564 (13,696) (286) 14,240 13,278
Extraordinary loss
on early
extinguishment
of debt -- 186 -- -- -- 186
Income of the
Operating Partnership
from continuing
operations 27,936 13,378 (13,696) (286) 14,240 13,092
Discontinued
Operations:
Gain on sale
of asset -- -- 13,408 -- 13,408 --
Income from
discontinuing
operations -- -- 288 286 288 286
Income before
minority interest 27,936 13,378 -- -- 27,936 13,378
Income allocated
to minority
interests 5,573 2,128 -- -- 5,573 2,128
Dividends earned by
preferred
stockholders 5,013 4,831 -- -- 5,013 4,831
Net income -
available to common
stockholders 17,350 6,419 -- -- 17,350 6,419
Average # of shares
outstanding -
basic 34,734 33,640 34,734 33,640
Average shares
outstanding - basic,
assuming full
conversion of OP
Units (d) 45,887 44,796 45,887 44,796
Average shares
outstanding -
diluted for
FFO (d) (e) 59,023 58,758 59,023 58,758
Per share income -
diluted before
extraordinary item 0.50 0.20 0.50 0.20
Net income
per share - basic 0.50 0.19 0.50 0.19
Net income
per share - diluted 0.50 0.19 0.50 0.19
Dividend declared
per share 0.55 0.53 0.55 0.53
Funds from operations
"FFO" (b) (d) -
basic 33,673 30,374 33,673 30,374
Funds from operations
"FFO" (a) (b) (d) -
diluted 41,132 38,109 41,132 38,109
FFO per share -
basic (b) (d) 0.73 0.68 0.73 0.68
FFO per share -
diluted (a) (b) (d) 0.70 0.65 0.70 0.65
% change in FFO -
diluted 7.45% 7.45%
(a) The Company issued $161,400 of convertible debentures in June and
July, 1997. The debentures are convertible into common shares at a
conversion price of $31.125 per share. On February 25, 1998 the
Company sold $100,000 of convertible preferred stock and on
June 17, 1998 another $150,000 of convertible preferred stock was
issued. The convertible preferred shares can be converted on a
1 for 1 basis for common stock. These preferred shares are not
assumed converted for purposes of net income per share as it would be
antidilutive to that calculation. The weighted average preferred
shares outstanding are assumed converted for purposes of FFO per
diluted share as they are dilutive to that calculation.
(b) Funds from Operations ("FFO") is defined as: "net income (computed
in accordance with GAAP) excluding gains or losses from debt
restructuring and sales of property, plus depreciation and
amortization (excluding depreciation on personal property and
amortization of loan and financial instrument cost) and after
adjustments for unconsolidated entities. Adjustments for
unconsolidated entities are calculated on the same basis."
In accordance with the National Association of Real Estate Investment
Trusts' (NAREIT) white paper on Funds from Operations, excluded from
FFO are the earnings impact of cumulative effects of accounting
changes and results of discontinued operations, both as defined by
GAAP.
(c) This includes, using the equity method of accounting, the Company's
prorata share of the equity in income or loss of it's unconsolidated
joint ventures and for Macerich Management Company for all periods
presented and for The Macerich Property Management Company through
March 28, 2001. Effective March 28, 2001, the Macerich Property
Management Company was converted from an unconsolidated preferred
stock subsidiary into a taxable reit subsidiary ("TRS") and as of that
date the results of the Macerich Property Management Company are now
included in the consolidated results of The Macerich Company.
(d) The Company has operating partnership units ("OP units"). Each OP
unit can be converted into a share of Company stock. Conversion of
the OP units has been assumed for purposes of calculating the FFO per
share and the weighted average number of shares outstanding.
(e) In October 2001, the Financial Accounting Standards Board ("FASB")
issued Statement of Accounting Standards ("SFAS") #144, "Accounting
for the impairment or Disposal of Long-Lived Assets." The Company
adopted SFAS 144 on January 1, 2002. SFAS 144 requires that assets
sold after January 1, 2002 be considered as "discontinued operations"
on the income statement for the year of sale, and retroactively to all
years presented as if the sale took place at the beginning of the
earliest year presented. The Company sold Boulder Plaza on
March 19, 2002 and in accordance with SFAS 144 the results of Boulder
Plaza for the periods from January 1, 2002 to March 19, 2002 and from
January 1, 2001 to March 31, 2001 have been reclassified into
"discontinued operations" on the income statement.
March 31 Dec 31
Summarized Balance Sheet Information 2002 2001
(UNAUDITED)
Cash and cash equivalents 68,566 26,470
Investment in real estate, net (h) 1,872,441 1,887,329
Investments in unconsolidated entities (I) 275,324 278,526
Total Assets 2,309,136 2,294,502
Mortgage and notes payable 1,361,071 1,398,512
Convertible debentures 125,148 125,148
March 31 Dec 31
Additional financial data as of: 2002 2001
Occupancy of centers (f) 92.00% 92.40%
Comparable quarter change
in same center sales (f) (g) -0.50% -0.90%
(f) excludes redevelopment properties- Crossroads Mall- Boulder, and
Parklane Mall.
(g) includes mall and freestanding stores.
(h) includes construction in process on wholly owned assets of $76,670 at
March 31, 2002 and $71,161 at December 31, 2001.
(i) the Company's prorata share of construction in process on
unconsolidated entities of $ 5,103 at March 31, 2002 and $3,110 at
December 31, 2001.
PRORATA SHARE OF JOINT VENTURES For the 3 Months
Ended March 31,
(Unaudited) (All amounts in 000's)
2002 2001
Revenues:
Minimum rents 26,417 25,606
Percentage rents 1,143 1,304
Tenant recoveries 10,662 10,595
Management fee (c) 2,134 2,898
Other 759 791
Total revenues 41,115 41,194
Expenses:
Shopping center and operating expenses 13,360 12,737
Interest expense 10,772 12,221
Management company expense ( c ) 1,884 3,745
Depreciation and amortization 7,375 6,521
Total operating expenses 33,391 35,224
Gain (loss) on sale or
write-down of assets (1,418) 85
Extraordinary gain < loss>
on early extinguishment of debt -- --
Net income 6,306 6,055
For the 3 Months
RECONCILIATION OF NET INCOME TO FFO Ended March 31,
(All amounts in 000's)
(UNAUDITED)
2002 2001
Net income - available
to common stockholders 17,350 6,419
Adjustments to reconcile
net income to FFO - basic
Minority interest 5,573 2,128
Loss on early extinguishment of debt -- 186
(Gain) loss on sale of wholly owned assets (13,256) 321
(Gain) loss on sale or write-down of assets
from unconsolidated entities (pro rata) 1,418 (85)
Depreciation and amortization
on wholly owned centers 16,624 16,104
Depreciation and amortization
on joint ventures and from the
management companies (pro rata) 7,375 6,521
Less: depreciation on personal property
and amortization of loan costs and
interest rate caps (1,411) (1,220)
Total FFO - basic 33,673 30,374
Weighted average shares
outstanding - basic (d) 45,887 44,796
Additional adjustment to arrive
at FFO - diluted
Interest expense and amortization of loan
costs on the debentures (e) 2,446 2,904
Preferred stock dividends earned 5,013 4,831
Effect of employee/director stock
incentive plans antidilutive antidilutive
FFO - diluted 41,132 38,109
Weighted average shares
outstanding - diluted (d) (e) 59,023 58,758
SOURCE The Macerich Company
CONTACT:
Arthur Coppola, President and Chief Executive Officer,
or Thomas E. O'Hern, Executive Vice President and Chief Financial Officer,
both of The Macerich Company, +1-310-394-6000
URL:
http://www.macerich.com
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