SANTA MONICA, Calif., Aug. 3 /PRNewswire-FirstCall/ -- The Macerich Company (NYSE: MAC) today announced results of operations for the quarter ended June 30, 2006 which included net income available to common stockholders of $25.7 million or $.36 per share-diluted compared to $6.7 million or $.11 per share-diluted for the quarter ended June 30, 2005. For the six months ended June 30, 2006, net income increased to $33.1 million compared to $24.9 million for the six months ended June 30, 2005. Funds from operations ("FFO") diluted was $85.3 million or $.96 per share compared to $77.0 million or $1.00 per share for the quarter ended June 30, 2005. For the six months ended June 30, 2006, FFO-diluted was $175.4 million compared to $153.0 million for the six months ended June 30, 2005. The Company's definition of FFO is in accordance with the definition provided by the National Association of Real Estate Investment Trusts ("NAREIT"). A reconciliation of net income to FFO and net income per common share-diluted ("EPS") to FFO per share-diluted is included in the financial tables accompanying this press release.
Recent Highlights:
- During the quarter, Macerich signed 398,000 square feet of specialty store leases at average initial rents of $41.14 per square foot. Starting base rent on new lease signings was 24.5% higher than the expiring base rent.
- Total same center tenant sales, for the quarter ended June 30, 2006, were up 4.4% compared to sales for the quarter ended June 30, 2005.
- Portfolio occupancy at June 30, 2006 was 92.1% compared to 92.3% at June 30, 2005. On a same center basis, occupancy was 92.1% at June 30, 2006 compared to 92.6% at June 30, 2005.
- In June, Macerich sold Scottsdale 101 for a total price of $117.6 million. In late July, Greeley Mall, Holiday Village Mall, and Parklane Mall were also sold for a combined sale price of $105 million. The Macerich share of total gain on sale of these assets is in excess of $60 million.
- In July, Macerich upsized its line of credit from $1.0 billion to $1.5 billion. The average borrowing rate was reduced by .25% to 1.15% over LIBOR and the maturity was extended to 2010.
Commenting on results, Arthur Coppola president and chief executive officer of Macerich stated, "The quarter was highlighted by improvement of our balance sheet through continued refinancing activity and sale of non-core assets. The recent sale of four such non-core assets continues our strategy of recycling and redeploying our capital. The strengthening of our balance sheet leaves us very well positioned to take advantage of the pipeline of development and redevelopment opportunities in our existing portfolio.
Although our results were adversely impacted by the increase in short term interest rates compared to a year ago, our core operations continue to be strong. Occupancy remained high, leasing spreads and the volume of leasing were excellent and mall tenant sales growth continues at a healthy level. "
Redevelopment and Development Activity
The opening of the first phase of Twenty-Ninth Street, an 877,000 square foot shopping district in Boulder, Colorado, is planned for October 12 with the balance of the project scheduled for completion in the spring 2007. The project is 75% leased with another 15% of the space committed. Tenants include Ann Taylor Loft, Apple, Bath and Body Works, Borders, California Pizza Kitchen, Century Theatres, Coldwater Creek, Home Depot, J. Jill, Macy's, Muttropolis, Puma, Purple Martini, Victoria's Secret and Wild Oats Market.
Construction began on the 435,000 square foot Village at Flagstaff Mall, a 45 acre large format and lifestyle expansion of Flagstaff Mall. The project is expected to be completed in phases starting in the fall of 2007.
At Westside Pavilion in Los Angeles, construction continues on the redevelopment of the western portion of the center that will include a 104,000 square foot state of the art Landmark Theatre, a Barnes & Noble and restaurants. The estimated completion of the redevelopment is Fall 2007.
In February, construction began on the SanTan Village regional shopping center in Gilbert, Arizona. The center is an outdoor open air streetscape project planned to contain in excess of 1.2 million square feet on 120 acres. The center will be anchored by Dillard's, Harkins Theatres and will contain a lifestyle shopping district featuring retail, office and restaurants. Additional tenants include American Eagle Outfitters, Ann Taylor Loft, Borders, Charlotte Russe, Chico's, Coldwater Creek, J. Jill, Lucy, Pac Sun and Soma. The project is scheduled to open in phases starting in the fall of 2007, with the retail phases expected to be completed by late 2008.
Asset Sales
Macerich continued its strategy of selling non-core assets with the June sale of Scottsdale 101, a power center located in Phoenix, Arizona, for $117.6 million. Macerich owned 46% of the asset. The center was developed by the Westcor subsidiary of Macerich with completion in 2004.
In July, Holiday Village Mall, Greeley Mall and Parklane Mall were sold for an aggregate total purchase price of $105 million. In addition, the sale of Great Falls Marketplace is scheduled to close in August. It is anticipated that the gain on the sale of these four assets will exceed $48 million. These centers totaled 1.6 million square feet and averaged $239 per square foot in annual tenant sales.
The average capitalization rate for the above sales is approximately 7.5%.
Financing Activity
The Company's line of credit was upsized from $1.0 billion to $1.5 billion in July. The borrowing spread was reduced by .25% to 1.15% over LIBOR at the current leverage level. The maturity was extended from July 2007 to April 2010.
In July, a $61 million, 6.625% fixed rate, 10-year loan was placed on Crossroads Mall. On April 19, a $115 million loan was placed on the Centre at Salisbury. The loan is a ten-year fixed rate loan bearing interest at 5.789%. The proceeds of the above loans were used primarily to pay-down floating rate debt.
At the Twenty-Ninth Street development, a $115 million floating rate construction loan closed in June. The initial floating interest rate is LIBOR plus 1.25% for a term of up to three years.
Earnings Guidance
Management is revising upward its guidance for EPS and reducing its guidance range for FFO per share for 2006.
Revised guidance for 2006 and reconciliation of EPS to FFO per share and
to EBITDA per share:
Range per share:
Fully Diluted EPS $1.73 - $1.83
Plus: Real Estate Depreciation and Amortization 3.71 - 3.71
Less: gain on sales of depreciated assets (.89) - (.89)
Less: impact of preferred stock (dilutive to FFO) (.10) - (.10)
Fully Diluted FFO per share $4.45 - $4.55
Plus: Interest Expense per share 4.32 - 4.32
Plus: Effect of preferred stock dividends .39 - .39
Plus: other items .13 - .13
EBITDA per share $9.29 - $9.39
This range is based on many assumptions, including the following:
Management expects 2006 same center EBITDA to grow at a 3.0% to 3.5% rate compared to 2005 results. 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's original guidance was based on the forward LIBOR curve at the date of the original guidance and assumed short-term LIBOR interest rates would increase to 5.00% by year-end 2006. The new guidance range assumes LIBOR will reach 5.70% by year-end 2006.
The above guidance also reflects the impact on EPS and FFO of the sale of Holiday Village, Greeley Mall, Great Falls Marketplace, Parklane Mall and Scottsdale 101.
The guidance is based on management's current view of the current market conditions in the regional mall business. Due to the uncertainty in the timing and economics of acquisitions and dispositions, the guidance ranges do not include any potential mall acquisitions or dispositions other than those that have closed or are under contract as of August 3, 2006. The Company is not able to assess at this time the potential impact of such exclusions on future EPS and FFO.
The Macerich Company is a fully integrated self-managed and self-administered real estate investment trust, which focuses on the acquisition, leasing, management, development and redevelopment of regional malls throughout the United States. The Company is the sole general partner and owns an 84% ownership interest in The Macerich Partnership, L.P. Macerich now owns approximately 79 million square feet of gross leaseable area consisting primarily of interests in 73 regional malls. 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 and through CCBN at www.earnings.com. The call begins today, August 3, 2006 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 at www.macerich.com will be available for one year 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, anchor or tenant bankruptcies, closures, mergers or consolidations, lease rates and terms, interest rate fluctuations, 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 (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 Securities and Exchange Commission, including the Annual Report on Form 10-K for the year ended December 31, 2005, for a discussion of such risks and uncertainties.
(See attached tables)
THE MACERICH COMPANY
FINANCIAL HIGHLIGHTS
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
Results before Impact of
SFAS 144(e) SFAS 144(e)
Results of Operations: For the Three Months For the Three Months
Ended June 30, Ended June 30,
Unaudited
2006 2005 2006 2005
Minimum Rents $127,483 $116,657 ($1,554) ($1,937)
Percentage Rents 2,754 3,068 -- --
Tenant Recoveries 65,932 57,172 (400) (577)
Management Companies Revenues 7,369 6,164 -- --
Other Income 6,341 6,034 (91) (75)
Total Revenues 209,879 189,095 (2,045) (2,589)
Shopping center and operating
expenses 70,151 59,687 (721) (971)
Management Companies' operating
expenses 12,125 13,329 -- --
Income tax expense < benefit > 218 (529) -- --
Depreciation and amortization 59,411 54,173 -- (808)
General, administrative and
other expenses 3,292 3,865 -- --
Interest expense 71,188 61,718 (666) (930)
Loss on early extinguishment
of debt -- -- -- --
Gain (loss) on sale or
writedown of assets 62,961 (141) (62,961) --
Pro rata income (loss) of
unconsolidated entities (c) 17,861 16,338 -- --
Minority interests in
consolidated joint ventures 37,904 255 (37,363) 56
Income (loss) of the Operating
Partnership from continuing
operations 36,412 12,794 (26,256) 64
Discontinued Operations:
Gain (loss) on sale of asset -- -- 25,952 --
Income from discontinued
operations -- -- 304 (64)
Income before minority
interests of OP 36,412 12,794 -- --
Income allocated to minority
interests of OP 4,770 1,480 -- --
Net income before preferred
dividends 31,642 11,314 -- --
Preferred dividends and
distributions (a) 5,970 4,566 -- --
Net income to common
stockholders $25,672 $6,748 $0 $0
Average number of shares
outstanding - basic 71,458 59,099
Average shares outstanding,
assuming full conversion
of OP Units (d) 85,023 73,616
Average shares outstanding
- diluted for FFO (d) 88,650 77,244
Per share income - diluted
before discontinued operations -- --
Net income per share - basic $0.36 $0.11
Net income per share - diluted $0.36 $0.11
Dividend declared per share $0.68 $0.65
Funds from operations
"FFO" (b)(d) - basic $82,860 $74,707
Funds from operations
"FFO" (a)(b)(d) - diluted $85,327 $77,065
FFO per share - basic (b)(d) $0.98 $1.02
FFO per share
- diluted (a)(b)(d) $0.96 $1.00
THE MACERICH COMPANY
FINANCIAL HIGHLIGHTS
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
Results after SFAS 144 (e)
Results of Operations: For the Three Months
Ended June 30,
Unaudited
2006 2005
Minimum Rents $125,929 $114,720
Percentage Rents 2,754 3,068
Tenant Recoveries 65,532 56,595
Management Companies Revenues 7,369 6,164
Other Income 6,250 5,959
Total Revenues 207,834 186,506
Shopping center and operating expenses 69,430 58,716
Management Companies' operating expenses 12,125 13,329
Income tax expense < benefit > 218 (529)
Depreciation and amortization 59,411 53,365
General, administrative and other expenses 3,292 3,865
Interest expense 70,522 60,788
Loss on early extinguishment of debt -- --
Gain (loss) on sale or writedown of assets -- (141)
Pro rata income (loss) of unconsolidated
entities (c) 17,861 16,338
Minority interests in consolidated joint
ventures 541 311
Income (loss) of the Operating
Partnership from continuing operations 10,156 12,858
Discontinued Operations:
Gain (loss) on sale of asset 25,952 --
Income from discontinued operations 304 (64)
Income before minority interests of OP 36,412 12,794
Income allocated to minority interests of OP 4,770 1,480
Net income before preferred dividends 31,642 11,314
Preferred dividends and distributions(a) 5,970 4,566
Net income to common stockholders $25,672 $6,748
Average number of shares outstanding - basic 71,458 59,099
Average shares outstanding, assuming
full conversion of OP Units (d) 85,023 73,616
Average shares outstanding - diluted
for FFO (d) 88,650 77,244
Per share income - diluted before
discontinued operations $0.05 $0.11
Net income per share - basic $0.36 $0.11
Net income per share - diluted $0.36 $0.11
Dividend declared per share $0.68 $0.65
Funds from operations "FFO" (b)(d) - basic $82,860 $74,707
Funds from operations "FFO" (a)(b)(d)
- diluted $85,327 $77,065
FFO per share- basic (b)(d) $0.98 $1.02
FFO per share- diluted (a)(b)(d) $0.96 $1.00
Results before Impact of
SFAS 144 (e) SFAS 144(e)
Results of Operations: For the Six Months For the Six Months
Ended June 30, Ended June 30,
Unaudited
2006 2005 2006 2005
Minimum Rents $261,069 $211,453 ($3,623) ($3,717)
Percentage Rents 5,720 5,873 (6) (4)
Tenant Recoveries 133,338 103,365 (849) (949)
Management Companies Revenues 14,626 11,441 -- --
Other Income 13,289 11,180 (163) (126)
Total Revenues 428,042 343,312 (4,641) (4,796)
Shopping center and operating
expenses 138,278 108,345 (1,589) (1,700)
Management Companies'
operating expenses 26,839 24,377 -- --
Income tax (benefit) expense (315) (1,039) -- --
Depreciation and amortization 122,951 91,826 (866) (1,623)
General, administrative
and other expenses 6,990 6,517 -- --
Interest expense 143,153 104,282 (1,481) (1,537)
Loss on early extinguishment
of debt 1,782 -- -- --
Gain (loss) on sale or
writedown of assets 62,460 1,464 (62,961) (297)
Pro rata income (loss) of
unconsolidated entities (c) 38,877 27,584 -- --
Minority interests in
consolidated joint ventures 38,407 561 (37,403) 5
Income (loss) of the Operating
Partnership from continuing
operations 51,294 37,491 (26,263) (238)
Discontinued Operations:
Gain (loss) on sale of asset -- -- 25,952 297
Income from discontinued
operations -- -- 311 (59)
Income before minority
interests of OP 51,294 37,491 -- --
Income allocated to minority
interests of OP 6,230 5,679 -- --
Net income before preferred
dividends 45,064 31,812 -- --
Preferred dividends and
distributions (a) 11,939 6,923 -- --
Net income to common
stockholders $33,125 $24,889 $0 $0
Average number of shares
outstanding - basic 70,152 58,984
Average shares outstanding,
assuming full conversion
of OP Units (d) 83,807 73,452
Average shares outstanding
- diluted for FFO (d) 87,434 77,080
Per share income - diluted
before discontinued operations -- --
Net income per share - basic $0.47 $0.42
Net income per share - diluted $0.47 $0.42
Dividend declared per share $1.36 $1.30
Funds from operations
"FFO" (b)(d)- basic $170,504 $148,303
Funds from operations
"FFO" (a)(b)(d) - diluted $175,437 $153,018
FFO per share - basic (b)(d) $2.04 $2.03
FFO per share
- diluted (a)(b)(d) $2.01 $1.99
Results after SFAS 144 (e)
Results of Operations: For the Six Months
Ended June 30,
Unaudited
2006 2005
Minimum Rents $257,446 $207,736
Percentage Rents 5,714 5,869
Tenant Recoveries 132,489 102,416
Management Companies Revenues 14,626 11,441
Other Income 13,126 11,054
Total Revenues 423,401 338,516
Shopping center and operating expenses 136,689 106,645
Management Companies' operating expenses 26,839 24,377
Income tax (benefit) expense (315) (1,039)
Depreciation and amortization 122,085 90,203
General, administrative and other expenses 6,990 6,517
Interest expense 141,672 102,745
Loss on early extinguishment of debt 1,782 --
Gain (loss) on sale or writedown of assets (501) 1,167
Pro rata income (loss) of unconsolidated
entities (c) 38,877 27,584
Minority interests in consolidated
joint ventures 1,004 566
Income (loss) of the Operating
Partnership from continuing operations 25,031 37,253
Discontinued Operations:
Gain (loss) on sale of asset 25,952 297
Income from discontinued
operations 311 (59)
Income before minority interests of OP 51,294 37,491
Income allocated to minority interests of OP 6,230 5,679
Net income before preferred dividends 45,064 31,812
Preferred dividends and distributions (a) 11,939 6,923
Net income to common stockholders $33,125 $24,889
Average number of shares outstanding - basic 70,152 58,984
Average shares outstanding, assuming
full conversion of OP Units (d) 83,807 73,452
Average shares outstanding - diluted
for FFO (d) 87,434 77,080
Per share income - diluted before
discontinued operations $0.16 $0.42
Net income per share - basic $0.47 $0.42
Net income per share - diluted $0.47 $0.42
Dividend declared per share $1.36 $1.30
Funds from operations "FFO" (b)(d) - basic $170,504 $148,303
Funds from operations "FFO" (a)(b)(d)
- diluted $175,437 $153,018
FFO per share - basic (b)(d) $2.04 $2.03
FFO per share - diluted (a)(b)(d) $2.01 $1.99
(a) On February 25, 1998, the Company sold $100,000 of convertible
preferred stock representing 3.627 million shares. 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 for 2006 and 2005 as they would be antidilutive to
those calculations. The weighted average preferred shares outstanding
are assumed converted for purposes of FFO per diluted share as they
are dilutive to that calculation for all periods presented.
(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 sale 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 six months ended June 30, 2006 and 2005 by
$3.5 million, $3.6 million, $0.3 million and $1.8 million,
respectively, or by $.04 per share, $.04 per share, $.00 per share and
$.02 per share, respectively. Additionally, SFAS 141 increased FFO for
the three and six months ended June 30, 2006 and 2005 by $4.3 million,
$8.9 million, $3.7 million and $6.1 million, respectively or by $.05
per share, $.10 per share, $.05 per share and $.08 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 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 outstanding stock options and restricted stock
using the treasury method. Also assumes conversion of MACWH, LP units
to the extent they are dilutive to the calculation. For the three and
six months ended June 30, 2006 and 2005, the MACWH, LP units were
antidilutive 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 January 5, 2005, the Company sold Arizona Lifestyle Galleries. The
sale of this property resulted in a gain on sale of $0.3 million. On
June 9, 2006, Scottsdale 101 in Arizona was sold. The sale of this
property resulted in a gain on sale, at the Company's prorata share,
of $26.0 million. Additionally, the Company reclassified the results
of operations for the three and six months ended June 30, 2006 and
2005 to discontinued operations.
THE MACERICH COMPANY
FINANCIAL HIGHLIGHTS
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
Summarized Balance Sheet Information June 30, Dec 31,
2006 2005
(UNAUDITED)
Cash and cash equivalents $45,489 $155,113
Investment in real estate, net (h) $5,644,885 $5,438,496
Investments in unconsolidated entities (i) $995,374 $1,075,621
Total Assets $7,185,246 $7,178,944
Mortgage and notes payable $4,764,177 $5,424,730
Pro rata share of debt on unconsolidated
entities $1,591,938 $1,438,960
Total common shares outstanding at
quarter end: 71,459 59,942
Total preferred shares outstanding at
quarter end: 3,627 3,627
Total partnership/preferred units
outstanding at quarter end: 16,404 16,647
June 30, June 30,
Additional financial data as of: 2006 2005
Occupancy of centers (f) 92.10% 92.30%
Comparable quarter change in same center
sales (f)(g) 4.40% 6.00%
Additional financial data for the six months
ended:
Acquisitions of property and equipment -
including joint ventures prorata $265,455 $2,457,446
Redevelopment and expansions of centers -
including joint ventures prorata $80,864 $60,377
Renovations of centers - including joint
ventures at prorata $26,070 $19,609
Tenant allowances - including joint
ventures at prorata $13,624 $14,347
Deferred leasing costs - including joint
ventures at prorata $13,606 $12,690
(f) excludes redevelopment properties -- 29th Street Center, Parklane Mall
and Santa Monica Place
(g) includes mall and freestanding stores.
(h) includes construction in process on wholly owned assets of $206,929 at
June 30, 2006 and $162,157 at December 31, 2005.
(i) the Company's prorata share of construction in process on
unconsolidated entities of $115,286 at June 30, 2006 and $98,180 at
December 31, 2005.
PRORATA SHARE OF JOINT VENTURES
For the Three Months For the Six Months
Ended June 30, Ended June 30,
(UNAUDITED) (UNAUDITED)
(All amounts in (All amounts in
(Unaudited) thousands) thousands)
2006 2005 2006 2005
Revenues:
Minimum rents $59,100 $51,254 $117,470 $95,819
Percentage rents 1,894 1,644 4,522 3,551
Tenant recoveries 26,403 22,777 54,006 41,937
Other 3,139 2,936 6,676 5,755
Total revenues 90,536 78,611 182,674 147,062
Expenses:
Shopping center
expenses 29,286 24,930 60,444 48,249
Interest expense 23,292 20,484 42,753 37,305
Depreciation and
amortization 20,585 17,253 41,164 34,748
Total operating
expenses 73,163 62,667 144,361 120,302
Gain on sale or writedown
of assets 244 254 244 540
Equity in income of joint
ventures 244 140 320 284
Net income $17,861 $16,338 $38,877 $27,584
THE MACERICH COMPANY
FINANCIAL HIGHLIGHTS
(IN THOUSANDS EXCEPT PER SHARE AMOUNTS)
RECONCILIATION OF NET INCOME TO FFO (b)(e)
For the Three Months For the Six Months
Ended June 30, Ended June 30,
(UNAUDITED) (UNAUDITED)
(All amounts in (All amounts in
thousands) thousands)
2006 2005 2006 2005
Net income - available
to common stockholders $25,672 $6,748 $33,125 $24,889
Adjustments to reconcile
net income to FFO -
basic
Minority interest
in OP 4,770 1,480 6,230 5,679
(Gain ) loss on sale of
consolidated assets (62,961) 141 (62,460) (1,464)
plus gain on
undepreciated asset
sales - consolidated
assets 3,255 -- 3,376 1,308
plus minority interest
share of gain on sale
of consolidated joint
ventures 37,008 -- 37,008 --
(Gain) loss on sale of
assets from unconsoli-
dated entities (prorata
share) (244) (254) (244) (540)
plus gain on
undepreciated asset
sales - unconsoli-
dated assets 244 258 244 543
Depreciation and
amortization on
consolidated assets 59,411 54,173 122,951 91,826
Less depreciation and
amortization allocable
to minority interests on
consolidated joint
ventures (1,247) (1,404) (3,222) (1,825)
Depreciation and
amortization on joint
ventures (prorata) 20,585 17,253 41,164 34,748
Less: depreciation on
personal property and
amortization of loan
costs and interest
rate caps (3,633) (3,688) (7,668) (6,861)
Total FFO - basic 82,860 74,707 170,504 148,303
Additional adjustment to
arrive at FFO - diluted
Preferred stock
dividends earned 2,467 2,358 4,933 4,715
Non-participating
preferred units
- dividends n/a - antidilutive n/a - antidilutive
Participating
preferred units
- dividends n/a - antidilutive n/a - antidilutive
FFO - diluted $85,327 $77,065 $175,437 $153,018
Reconciliation of EPS to FFO per diluted share:
For the Three Months For the Six Months
Ended June 30, Ended June 30,
(UNAUDITED) (UNAUDITED)
(All amounts in (All amounts in
thousands) thousands)
2006 2005 2006 2005
Earnings per share $0.36 $0.11 $0.47 $0.42
Per share impact of
depreciation and
amortization
real estate $0.89 $0.91 $1.83 $1.62
Per share impact of
gain on sale of
depreciated assets ($0.26) $0.00 ($0.27) ($0.01)
Per share impact of
preferred stock not
dilutive to EPS ($0.03) ($0.02) ($0.02) ($0.04)
Fully Diluted FFO per
share $0.96 $1.00 $2.01 $1.99
THE MACERICH COMPANY
RECONCILIATION OF NET INCOME TO EBITDA
For the Three Months For the Six Months
Ended June 30, Ended June 30,
(UNAUDITED) (UNAUDITED)
(All amounts in (All amounts in
thousands) thousands)
2006 2005 2006 2005
Net income - available
to common stockholders $25,672 $6,748 $33,125 $24,889
Interest expense 71,188 61,718 143,153 104,282
Interest expense
- unconsolidated
entities (pro rata) 23,292 20,484 42,753 37,305
Depreciation and
amortization
- consolidate 59,411 54,173 122,951 91,826
Depreciation and
amortization
- unconsolidated
entities (pro rata) 20,585 17,253 41,164 34,748
Minority interests 4,770 1,480 6,230 5,679
Less: Interest expense
and depreciation and
amortization allocable
to minority interests
on consolidated joint
ventures (2,500) (2,066) (4,927) (2,604)
Loss on early
extinguishment of debt -- -- 1,782 --
Loss (gain) on sale of
assets - consolidated
assets (62,961) 141 (62,460) (1,464)
Loss (gain) on sale of
assets - unconsolidated
entities (pro rata) (244) (254) (244) (540)
Add: Minority interest
share of gain on sale
of consolidated joint
ventures 37,008 -- 37,008 --
Income tax expense
(benefit) 218 (529) (315) (1,039)
Preferred dividends 5,970 4,566 11,939 6,923
EBITDA (j) $182,409 $163,714 $372,159 $300,005
THE MACERICH COMPANY
FINANCIAL HIGHLIGHTS
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
THE MACERICH COMPANY
RECONCILIATION OF EBITDA TO SAME CENTERS - NET OPERATING INCOME ("NOI")
For the Three Months For the Six Months
Ended June 30, Ended June 30,
(UNAUDITED) (UNAUDITED)
(All amounts in (All amounts in
thousands) thousands)
2006 2005 2006 2005
EBITDA (j) $182,409 $163,714 $372,159 $300,005
Add: REIT general and
administrative expenses 3,292 3,865 6,990 6,517
Management Companies'
revenues (c) (7,369) (6,164) (14,626) (11,441)
Management Companies'
operating expenses (c) 12,125 13,329 26,839 24,377
EBITDA of non-
comparable centers (50,938) (38,883) (107,208) (49,121)
SAME CENTERS - Net
operating income
("NOI") (k) $139,519 $135,861 $284,154 $270,337
(j) 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.
(k) 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.
SOURCE Macerich Company 08/03/2006 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 Web site: http://www.macerich.com