SANTA MONICA, Calif., Aug 12, 2002 /PRNewsire-FirstCall via Comtex/ -- The Macerich Company (NYSE: MAC) today announced results of operations for the quarter and six months ended June 30, 2002 which included funds from operations ("FFO") per share - diluted increasing to $.67 from $.66 for the second quarter of 2001 and FFO per share - diluted for the six months ended June 30, 2002 increasing to $1.37 compared to $1.31 for the comparable period in 2001.
Net income to common stockholders for the six months ended June 30, 2002 was $16.1 million or $.45 per share compared to $13.2 million or $.39 per share for the six months ended June 30, 2001. Net loss to common stockholders for the three months ended June 30, 2002 was $1.277 million, or ($.04) per share compared to net income of $6.8 million or $.20 per share for the three months ended June 30, 2001. These results include the second quarter write- off of the Company's investment in MerchantWired.
During the quarter fundamentals improved:
- Macerich signed 225,000 square feet of specialty store leases at average initial rents of $35.74 per square foot. First year rents on mall and freestanding store leases signed during the quarter were 31% higher than expiring rents on a comparable space basis.
- Portfolio occupancy increased to 92.9% up from 92.4% at June 30, 2001.
- Total tenant sales for the quarter ended June 30, 2002 were up 2.9% compared to the second quarter of 2001.
Commenting on results and recent events, Arthur Coppola, President and Chief Executive Officer of Macerich stated, "The quarter was highlighted by our acquisition of The Oaks, in Thousand Oaks, California and our agreement to acquire Westcor. Adding The Oaks and Westcor significantly upgrades our portfolio in terms of sales productivity, market dominance and from a human capital viewpoint the integration of the talented Westcor development and operating team further strengthens our stellar Macerich organization. The Westcor portfolio, plus The Oaks, will significantly expand our platform for growth in the Western United States."
Acquisition Activity
The Oaks-
On June 12, 2002, the Company announced the acquisition of The Oaks, a 1.1 million square foot super regional mall in Thousand Oaks. The mall has annual tenant shop sales of $437 per square foot and is anchored by Macy's, Macy's Men and Home Store, JC Penney, Robinsons-May and Robinsons-May Men's and Home Store. The purchase price was $152.5 million and was funded by a $108 million mortgage bearing interest at LIBOR plus 1.15%, plus cash and borrowings under the Company's line of credit.
Westcor-
On July 26, 2002, the Company completed the acquisition of Westcor Realty Limited Partnership and its affiliated entities ("Westcor"). The purchase price was $1.475 billion including the assumption of $733 million of debt and the issuance of approximately $72 million of convertible preferred operating partnership units at a price of $36.55. The balance of the purchase price was paid in cash which was provided primarily from a $380 million interim loan with a term of up to 18 months bearing interest at an average rate of LIBOR plus 3.25% and a $250 million term loan with a maturity of up to five years with an interest rate ranging from LIBOR plus 2.75% to LIBOR plus 3.00% depending on the Company's overall leverage.
The assets acquired include some of the leading retail assets in the country, including Scottsdale Fashion Square and Chandler Fashion Center in the Phoenix area and FlatIron Crossing in Colorado's Denver-Boulder area. The gross leasable area in the Westcor portfolio totals 15.6 million square feet. In addition, the Westcor portfolio includes two retail properties in Arizona that recently broke ground, as well as option rights for over 1,000 acres of valuable, well-situated undeveloped land.
Redevelopment Activity
At Queens Center the redevelopment and expansion continued with the ground breaking in June. The project will increase the size of the center from 620,000 square feet to approximately 1 million square feet. Completion is estimated in phases through late 2004.
At Lakewood Center Target commenced the demolition of the former Montgomery Wards location. Target plans to build a two-level Target store with a fall 2003 opening.
Bon Marche began construction of a new department store at Redmond Town Center.
At Southern Hills Mall, construction commenced for the addition of a new 60,000 square foot Scheel's Sporting goods Store scheduled to open in March 2003.
Financing Activity
Concurrent with the closing of Westcor, the Company replaced its $200 million line of credit with a new $425 million revolving line of credit. This increased line of credit has a three-year term plus a one-year extension. The interest rate fluctuates from LIBOR plus 1.75% to LIBOR plus 3.00% depending on the Company's overall leverage level. At closing the interest rate was 4.82%.
The Company is writing off its remaining investment in Merchant Wired of $8.9 million which is reflected in the net loss from unconsolidated entities on the Company's statement of operations.
2002 Earnings Estimates
The Company previously provided year 2002 FFO per share guidance in the range of $3.11 to $3.18. The Company is currently revising guidance upward to a range of $3.14 to $3.25.
Accounting for Stock Options
Effective January 1, 2002, the Company will be expensing the fair value of stock options granted under the Company's employee and director stock incentive plans. The Company will record the expense over the option vesting period, using the fair value at the date of the grant. The Company currently expects the impact to be approximately $.01 per share for 2002.
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 a 78% ownership interest in The Macerich Partnership, L.P. Macerich now owns interests in 56 regional malls and 21 community centers totaling approximately 58 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 quarterly 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 CCBN at www.ccbn.com . The call begins today, August 12, 2002 at 10:30 AM Pacific 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 development and 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 before SFAS 144 Impact of SFAS 144
Results of Operations: For the Three Months For the Three Months
Ended June 30 Ended June 30
Unaudited
2002 2001 2002 2001
Minimum Rents 49,597 49,553 (10) (548)
Percentage Rents 991 1,140 -- (35)
Tenant Recoveries 26,313 27,364 -- (90)
Other Income 2,217 2,634 -- (5)
Total Revenues 79,118 80,691 (10) (678)
Shopping center and
operating expenses (c) 27,660 27,825 (6) (149)
Depreciation and
amortization 17,126 16,387 (87)
General, administrative
and other expenses 2,012 1,832
Interest expense 25,036 27,497
Gain (loss) on sale or
writedown of assets (3,041) 132 508
Pro rata income (loss)
of unconsolidated
entities (c) (900) 6,625
Income before minority
interest & extraordinary
items 3,343 13,907 504 (442)
Extraordinary loss on
early extinguishment
of debt -- 1 -- --
Income (loss) of the
Operating Partnership
from continuing
operations 3,343 13,906 504 (442)
Discontinued Operations:
Gain (loss) on sale
of asset -- -- (508) --
Income from
discontinuing
operations -- -- 4 442
Income before minority
interest 3,343 13,906 -- --
Income (loss) allocated
to minority interests (393) 2,249 -- --
Net income before
preferred dividends 3,736 11,657 -- --
Dividends earned by
preferred stockholders 5,013 4,831 -- --
Net income < loss > to
common stockholders (1,277) 6,826 -- --
Average # of shares
outstanding - basic 36,241 33,771
Average shares
outstanding, - basic,
assuming full conversion
of OP Units (d) 47,393 44,924
Average shares
outstanding - diluted
for FFO (d)(e) 60,529 58,886
Per share income
- diluted before
extraordinary item (0.04) 0.20
Net income per
share - basic (0.04) 0.20
Net income per
share - diluted (0.04) 0.20
Dividend declared
per share 0.55 0.53
Funds from operations
"FFO" (b)(d) - basic 33,172 30,918
Funds from operations
"FFO" (a)(b)(d)
- diluted 40,547 38,704
FFO per share
- basic (b)(d) 0.70 0.69
FFO per share
- diluted (a)(b)(d) 0.67 0.66
% change in FFO - diluted 1.92%
Results after SFAS 144
Results of Operations: For the Three Months
Ended June 30
Unaudited
2002 2001
Minimum Rents 49,587 49,005
Percentage Rents 991 1,105
Tenant Recoveries 26,313 27,274
Other Income 2,217 2,629
-- --
Total Revenues 79,108 80,013
Shopping center and operating expenses (c) 27,654 27,676
Depreciation and amortization 17,126 16,300
General, administrative and other expenses 2,012 1,832
Interest expense 25,036 27,497
Gain (loss) on sale or writedown of assets (2,533) 132
Pro rata income (loss) of unconsolidated
entities (c) (900) 6,625
Income before minority interest &
extraordinary items 3,847 13,465
Extraordinary loss on early extinguishment
of debt -- 1
Income (loss) of the Operating Partnership
from continuing operations 3,847 13,464
Discontinued Operations: --
Gain (loss) on sale of asset (508) --
Income from discontinuing operations 4 442
Income before minority interest 3,343 13,906
Income (loss) allocated to minority interests (393) 2,249
Net income before preferred dividends 3,736 11,657
Dividends earned by preferred stockholders 5,013 4,831
Net income < loss > to common stockholders (1,277) 6,826
Average # of shares outstanding - basic 36,241 33,771
Average shares outstanding, - basic,
assuming full conversion of OP Units (d) 47,393 44,924
Average shares outstanding - diluted
for FFO (d)(e) 60,529 58,886
Per share income - diluted before
extraordinary item (0.04) 0.20
Net income per share - basic (0.04) 0.20
Net income per share - diluted (0.04) 0.20
Dividend declared per share 0.55 0.53
Funds from operations "FFO" (b)(d) - basic 33,172 30,918
Funds from operations "FFO" (a)(b)(d) - diluted 40,547 38,704
FFO per share - basic (b) (d) 0.70 0.69
FFO per share- diluted (a)(b)(d) 0.67 0.66
% change in FFO - diluted 1.92%
THE MACERICH COMPANY
FINANCIAL HIGHLIGHTS
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
Results before SFAS 144 Impact of SFAS 144
Results of Operations: For the Six Months For the Six Months
Ended June 30 Ended June 30
Unaudited
2002 2001 2002 2001
Minimum Rents 98,138 98,219 (415) (927)
Percentage Rents 2,288 2,988 -- (40)
Tenant Recoveries 51,439 52,166 (59) (173)
Other Income 4,663 5,081 4 (12)
Total Revenues 156,528 158,454 (470) (1,152)
Shopping center and
operating expenses (c) 53,416 51,977 (63) (250)
Depreciation and
amortization 33,750 32,491 (115) (174)
General, administrative
and other expenses 3,544 3,515 -- --
Interest expense 50,159 55,493 -- --
Gain < loss > on sale
or writedown of assets 10,215 (188) (13,916) --
Pro rata income of
unconsolidated
entities (c) 5,406 12,681 -- --
Income before minority
interest & extraordinary
items 31,280 27,471 (14,208) (728)
Extraordinary loss on
early extinguishment
of debt -- 187 -- --
Income of the Operating
Partnership from
continuing operations 31,280 27,284 (14,208) (728)
Discontinued Operations:
Gain on sale of asset -- -- 13,916 --
Income from discontinuing
operations -- -- 292 728
Income before minority
interest 31,280 27,284 -- --
Income allocated to
minority interests 5,180 4,377 -- --
Net income before
preferred dividends 26,100 22,907 -- --
Dividends earned by
preferred stockholders 10,026 9,662 -- --
Net income < loss > to
common stockholders 16,074 13,245 -- --
Average # of shares
outstanding - basic 35,498 33,706
Average shares
outstanding, - basic,
assuming full
conversion of OP
Units (d) 46,651 44,860
Average shares
outstanding - diluted
for FFO (d)(e) 59,787 58,823
Per share income
- diluted before
extraordinary item 0.45 0.39
Net income per share
- basic 0.45 0.39
Net income per share
- diluted 0.45 0.39
Dividend declared
per share 1.10 1.06
Funds from operations
"FFO" (b)d) - basic 66,847 61,291
Funds from operations
"FFO" (a)(b)(d)
- diluted 81,680 76,812
FFO per share
- basic(b) (d) 1.43 1.37
FFO per share
- diluted(a)(b)(d) 1.37 1.31
% change in FFO - diluted 4.62%
Results after SFAS 144
Results of Operations: For the Six Months
Ended June 30
Unaudited
2002 2001
Minimum Rents 97,723 97,292
Percentage Rents 2,288 2,948
Tenant Recoveries 51,380 51,993
Other Income 4,667 5,069
Total Revenues 156,058 157,302
Shopping center and operating expenses ( c) 53,353 51,727
Depreciation and amortization 33,635 32,317
General, administrative and other expenses 3,544 3,515
Interest expense 50,159 55,493
Gain < loss > on sale or writedown of assets (3,701) (188)
Pro rata income of unconsolidated entities (c) 5,406 12,681
Income before minority interest &
extraordinary items 17,072 26,743
Extraordinary loss on early extinguishment
of debt -- 187
Income of the Operating Partnership from
continuing operations 17,072 26,556
Discontinued Operations: --
Gain on sale of asset 13,916 --
Income from discontinuing operations 292 728
Income before minority interest 31,280 27,284
Income allocated to minority interests 5,180 4,377
Net income before preferred dividends 26,100 22,907
Dividends earned by preferred stockholders 10,026 9,662
Net income < loss > to common stockholders 16,074 13,245
Average # of shares outstanding - basic 35,498 33,706
Average shares outstanding, - basic, assuming
full conversion of OP Units (d) 46,651 44,860
Average shares outstanding - diluted for
FFO (d)(e) 59,787 58,823
Per share income - diluted before
extraordinary item 0.45 0.39
Net income per share - basic 0.45 0.39
Net income per share - diluted 0.45 0.39
Dividend declared per share 1.10 1.06
Funds from operations "FFO" (b)(d) - basic 66,847 61,291
Funds from operations "FFO" (a)(b)(d) - diluted 81,680 76,812
FFO per share - basic (b) (d) 1.43 1.37
FFO per share - diluted (a)(b)(d) 1.37 1.31
% change in FFO - diluted 4.62%
(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, dated October,
1999, 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 its 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.
June 30 Dec 31
Summarized Balance Sheet Information 2002 2001
(UNAUDITED)
Cash and cash equivalents $59,605 $26,470
Investment in real estate, net (h) $2,024,896 $1,887,329
Investments in unconsolidated entities (i) $260,985 $278,526
Total Assets $2,442,001 $2,294,502
Mortgage and notes payable $1,515,767 $1,398,512
Convertible debentures $125,148 $125,148
June 30 June 30
Additional financial data as of: 2002 2001
Occupancy of centers (f) 92.90% 92.40%
Comparable quarter change in same center
sales (f) (g) 2.90% -1.00%
Additional financial data for the six months
ended:
Acquisitions of property and equipment
- including joint ventures prorata $160,216 $6,810
Redevelopment and expansions of centers
- including joint ventures prorata $13,516 $19,216
Renovations of centers
- including joint ventures at prorata $1,526 $3,960
Tenant allowances
- including joint ventures at prorata $5,818 $8,266
Deferred leasing costs
- including joint ventures at prorata $7,063 $6,043
(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 $79,551 at
June 30, 2002 and $71,161 at December 31, 2001.
(i) the Company's prorata share of construction in process on
unconsolidated entities of $7,242 at June 30, 2002 and $3,110 at
December 31, 2001.
THE MACERICH COMPANY
FINANCIAL HIGHLIGHTS
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
For the Three Months For the Six Months
PRORATA SHARE OF Ended June 30, Ended June 30,
JOINT VENTURES Unaudited Unaudited
(Unaudited) (All amounts in thousands)(All amounts in thousands)
2002 2001 2002 2001
Revenues:
Minimum rents $26,955 $25,774 $53,372 $51,380
Percentage rents 617 675 1,760 1,979
Tenant recoveries 10,794 10,613 21,456 21,208
Management fee (c) 2,181 2,326 4,315 5,224
Other 572 1,029 1,331 1,820
Total revenues 41,119 40,417 82,234 81,611
Expenses:
Shopping center
expenses 13,347 13,427 26,707 26,164
Interest expense 10,616 11,680 21,388 23,901
Management company
expense (c) 1,966 1,922 3,849 5,668
Depreciation and
amortization 7,090 6,800 14,465 13,320
Total operating
expenses 33,019 33,829 66,409 69,053
Gain (loss) on sale or
writedown of assets (9,000) 37 (10,419) 123
Extraordinary gain
< loss > on early
extinguishment of debt -- -- -- --
Net income < loss > ($900) $6,625 $5,406 $12,681
For the Three Months For the Six Months
RECONCILIATION OF Ended June 30, Ended June 30,
NET INCOME TO FFO (All amounts in thousands)(All amounts in thousands)
(UNAUDITED) (UNAUDITED)
2002 2001 2002 2001
Net income < loss >
- available to
common stockholders ($1,277) $6,826 $16,074 $13,245
Adjustments to
reconcile net income
to FFO - basic
Minority interest (393) 2,249 5,180 4,377
Loss on early
extinguishment of
debt -- 1 -- 187
(Gain ) loss on sale
of wholly owned
assets 3,041 (132) (10,215) 188
(Gain) loss on sale
or write-down of
assets from
unconsolidated
entities (pro rata) 9,000 (37) 10,419 (123)
Depreciation and
amortization on
wholly owned
centers 17,126 16,387 33,750 32,491
Depreciation and
amortization on
joint ventures
and from the
management
companies
(pro rata) 7,090 6,800 14,465 13,320
Less: depreciation
on personal
property and
amortization of
loan costs and
interest rate caps (1,415) (1,176) (2,826) (2,394)
Total FFO - basic 33,172 30,918 66,847 61,291
Weighted average
shares outstanding
- basic (d) 47,393 44,924 46,651 44,860
Additional adjustment
to arrive at FFO
- diluted
Interest expense
and amortization
of loan costs on
the debentures (e) 2,362 2,955 4,807 5,859
Preferred stock
dividends earned 5,013 4,831 10,026 9,662
Effect of employee/
director stock
incentive plans
FFO - diluted 40,547 38,704 81,680 76,812
Weighted average
shares outstanding
- diluted (d)(e) 60,529 58,886 59,787 58,823
SOURCE:The Macerich Company
CONTACT:
press, Arthur Coppola, President and Chief Executive Officer,
or Thomas E. O'Hern, Executive Vice President and Chief Financial Officer of
The Macerich Company, +1-310-394-6000
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