SANTA MONICA, Calif.,
Recent Activity:
- During the quarter,
Macerich signed 238,000 square feet of specialty store leases with average initial rents of$43.49 per square foot. Starting base rent on new lease signings was 21.2% higher than the expiring base rent. - Mall tenant sales per square foot for the trailing twelve month period
decreased to
$428 for the quarter endedJune 30, 2009 compared to$464 for the quarter endedJune 30, 2008. - Portfolio occupancy at
June 30, 2009 was 90.5% compared to 92.5% atJune 30, 2008 and up from 90.2% atMarch 31, 2009. - In July, the Company completed the sale of
$66 million in non core asset sales. - During 2009, the Company has closed on over
$600 million in financings and has arranged for financing on another three loans totaling over$200 million. - On
July 30, 2009, the Company closed on the sale of a 49% joint venture interest in Queens Center, netting approximately$150 million in cash proceeds.
Commenting on results,
Joint Ventures:
On
Non Core Asset Sales:
During July the Company closed on
Financing Activity:
The Company has arranged for financing on two previously unencumbered
assets. A
At the Village of Corte Madera the Company has agreed to an
Upon completion of these financings, the Company will have less than
Subsequent to quarter end, the unsecured term notes were paid down by
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 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 (a) SFAS 144 (a) SFAS 144 (a)
-------------- ------------- -------------
For the For the For the
Three Months Three Months Three Months
Ended June 30, Ended June 30, Ended June 30,
-------------- -------------- --------------
Unaudited Unaudited
--------- ---------
2009 2008(b) 2009 2008 2009 2008(b)
---- ------- ---- ---- ---- -------
Minimum rents $123,504 $130,673 $0 ($842) $123,504 $129,831
Percentage rents 2,686 2,954 - - 2,686 2,954
Tenant recoveries 62,530 67,067 - (154) 62,530 66,913
Management Companies'
revenues 9,345 10,382 - - 9,345 10,382
Other income 7,850 6,775 - (64) 7,850 6,711
----- ----- - ---- ----- -----
Total revenues $205,915 $217,851 $0 ($1,060) $205,915 $216,791
-------------- -------- -------- -- -------- -------- --------
Shopping center and
operating expenses 67,565 69,354 (11) (346) 67,554 69,008
Management Companies'
operating expenses 18,872 20,529 - - 18,872 20,529
Income tax (benefit)
provision (380) (689) - - (380) (689)
Depreciation and
amortization 63,740 57,774 - (300) 63,740 57,474
REIT general and
administrative
expenses 4,648 4,135 - - 4,648 4,135
Interest expense (b) 71,914 72,042 - - 71,914 72,042
Gain on early
extinguishment of debt 7,127 - - - 7,127 -
(Loss) gain on sale or
write-down of assets (25,605) 376 - 113 (25,605) 489
Equity in income of
unconsolidated joint
ventures (c) 14,556 24,946 - - 14,556 24,946
(Loss) income from
continuing operations (24,366) 20,028 11 (301) (24,355) 19,727
Discontinued Operations:
(Loss) gain on sale
or disposition of
assets - - - (113) - (113)
(Loss) income from
discontinued
operations - - (11) 414 (11) 414
Total (loss) income
from discontinued
operations - - (11) 301 (11) 301
Net (loss) income (24,366) 20,028 - - (24,366) 20,028
Less net (loss) income
attributable to
noncontrolling
interests (2,630) 3,468 - - (2,630) 3,468
Net (loss) income
attributable to
common stockholders (21,736) 16,560 - - (21,736) 16,560
Less preferred
dividends (d) - 835 - - - 835
Net (loss) income
available to
common stockholders ($21,736) $15,725 - - ($21,736) $15,725
-------------------- --------- ------- --- --- --------- -------
Average number of
shares
outstanding -basic 77,270 73,780 77,270 73,780
------------------- ------ ------ ------ ------
Average shares
outstanding,
assuming full
conversion of OP
Units (e) 88,970 86,781 88,970 86,781
------ ------ ------ ------
Average shares
outstanding
-Funds From Operations
("FFO") -diluted (d)
(e) 88,970 88,633 88,970 88,633
----------------------- ------ ------ ------ ------
Per share (loss)
income-
diluted before
discontinued
operations - - ($0.29) $0.21
---------------- --- --- ------- -----
Net (loss) income per
share-
basic (b) ($0.29) $0.21 ($0.29) $0.21
--------------------- ------- ----- ------- -----
Net (loss) income per
share-
diluted (b) (d) (e) ($0.29) $0.21 ($0.29) $0.21
--------------------- ------- ----- ------- -----
Dividend declared per
share $0.60 $0.80 $0.60 $0.80
--------------------- ----- ----- ----- -----
FFO - basic (b) (e)
(f) $59,920 $98,810 $59,920 $98,810
--------------------- ------- ------- ------- -------
FFO - diluted (b) (d)
(e) (f) $59,920 $99,645 $59,920 $99,645
---------------------- ------- ------- ------- -------
FFO per share- basic
(b) (e) (f) $0.67 $1.14 $0.67 $1.14
----------------------- ----- ----- ----- -----
FFO per share- diluted
(b) (d) (e) (f) $0.67 $1.12 $0.67 $1.12
----------------------- ----- ----- ----- -----
THE MACERICH COMPANY
FINANCIAL HIGHLIGHTS
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
Results of Operations:
--------------- ------------- --------------
Results before Impact of Results after
SFAS 144 (a) SFAS 144 (a) SFAS 144 (a)
-------------- ------------- --------------
For the For the For the
Six Months Six Months Six Months
Ended June 30, Ended June 30, Ended June 30,
-------------- -------------- --------------
Unaudited Unaudited
--------- ---------
2009 2008(b) 2009 2008 2009 2008(b)
---- ------- ---- ---- ---- -------
Minimum rents $250,976 $262,760 $0 ($1,781) $250,976 $260,979
Percentage rents 5,487 5,658 - - 5,487 5,658
Tenant recoveries 127,441 134,898 - (328) 127,441 134,570
Management Companies'
revenues 17,885 20,073 - - 17,885 20,073
Other income 14,904 13,388 - (347) 14,904 13,041
------ ------ - ----- ------ ------
Total revenues $416,693 $436,777 $0 ($2,456) $416,693 $434,321
-------------- -------- -------- -- -------- -------- --------
Shopping center and
operating expenses 138,346 140,308 (20) (677) 138,326 139,631
Management Companies'
operating expenses 42,302 38,872 - - 42,302 38,872
Income tax (benefit)
provision (1,181) (388) - - (1,181) (388)
Depreciation and
amortization 128,651 118,901 - (772) 128,651 118,129
REIT general and
administrative
expenses 9,906 8,538 - - 9,906 8,538
Interest expense (b) 141,852 146,411 - - 141,852 146,411
Gain on early
extinguishment of
debt 29,601 - - - 29,601 -
(Loss) gain on sale or
write-down of assets (24,849) 100,313 17 (99,150) (24,832) 1,163
Equity in income of
unconsolidated joint
ventures (c) 30,482 47,244 - - 30,482 47,244
(Loss) income from
continuing
operations (7,949) 131,692 37(100,157) (7,912) 31,535
Discontinued Operations:
(Loss) gain on sale
or disposition of
assets - - (17) 99,150 (17) 99,150
(Loss) income from
discontinued
operations - - (20) 1,007 (20) 1,007
Total (loss) income
from discontinued
operations - - (37)100,157 (37) 100,157
Net (loss) income (7,949) 131,692 - - (7,949) 131,692
Less net (loss) income
attributable to
noncontrolling
interests (229) 20,068 - - (229) 20,068
Net (loss) income
attributable
to common stockholders (7,720) 111,624 - - (7,720) 111,624
Less preferred
dividends (d) - 3,289 - - - 3,289
Net (loss) income
available to
common stockholders ($7,720)$108,335 - - ($7,720)$108,335
-------------------- ------- -------- --- --- ------- --------
Average number of
shares
outstanding - basic 77,082 73,061 77,082 73,061
-------------------- ------ ------ ------ ------
Average shares
outstanding,
assuming full
conversion of OP
Units (e) 88,759 88,465 88,759 88,465
------ ------ ------ ------
Average shares
outstanding -
Funds From Operations
("FFO") - diluted (d)
(e) 88,759 88,465 88,759 88,465
----------------------- ------ ------ ------ ------
Per share (loss)
income- diluted
before discontinued
operations - - ($0.11) $0.34
-------------------- --- --- ------- -----
Net (loss) income per
share-basic (b) ($0.12) $1.48 ($0.12) $1.48
--------------------- ------- ----- ------- -----
Net (loss) income per
share-diluted (b) (d)
(e) ($0.11) $1.47 ($0.11) $1.47
--------------------- ------- ----- ------- -----
Dividend declared per
share $1.40 $1.60 $1.40 $1.60
--------------------- ----- ----- ----- -----
FFO - basic (b) (e)
(f) $162,760 $188,824 $162,760 $188,824
--------------------- -------- -------- -------- --------
FFO - diluted (b) (d)
(e) (f) $162,760 $192,113 $162,760 $192,113
------------------------------ -------- -------- --------
FFO per share- basic
(b) (e) (f) $1.83 $2.21 $1.83 $2.21
----------------------- ----- ----- ----- -----
FFO per share- diluted
(b) (d) (e) (f) $1.83 $2.17 $1.83 $2.17
----------------------- ----- ----- ----- -----
THE MACERICH COMPANY
FINANCIAL HIGHLIGHTS
(IN THOUSANDS, EXCEPT SHARE AND PER SHARE AMOUNTS)
(a) SFAS No. 144, "Accounting for the Impairment or Disposal of Long-
Lived Assets" ("SFAS 144") addresses financial accounting and reporting
for the impairment or disposal of long-lived assets. The following
dispositions impacted the results for the three and six months ended June
30, 2009 and 2008:
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. 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 recorded a gain of $99.3 million
for the period ended March 31, 2008 and classified the gain to
discontinued operations.
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.
(b) On January 1, 2009, the Company adopted FASB Staff Position APB 14-
1, "Accounting for Convertible Debt Instruments That May Be Settled Upon
Conversion (Including Partial Cash Settlement)" (FSP APB 14-1"). As a
result, the Company retrospectively applied FSP APB 14-1 to the three and
six months ended June 30, 2008 resulting in an increase to interest
expense of $3.5 million and $7.1 million, respectively, and a decrease to
net income available to common stockholders of $3.1 million and $6.1
million, respectively, or $0.04 and $0.07 per share, respectively. FSP APB
14-1 decreased FFO for the three and six months ended June 30, 2008 by
$3.5 million and $7.1 million, respectively, or by $0.04 per share and
$0.08 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) 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 assumed converted for purposes of net income per
share - diluted for the three and six months ended June 30, 2008. The
weighted average preferred shares are assumed converted for purposes of
FFO per share - diluted for 2008.
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.
(e) The Macerich Partnership, LP (the "Operating Partnership" or the
"OP") has operating partnership units ("OP units"). OP units can be
converted into shares 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.
(f) 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.
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 six months ended June
30, 2009 and 2008 by $1.1 million, $2.5 million, $1.4 million and $3.0
million, respectively, or by $0.01 per share, $0.03 per share, $0.01 per
share and $0.03 per share, respectively. Additionally, SFAS 141 increased
FFO for the three and six months ended June 30, 2009 and 2008 by $3.0
million, $7.2 million, $3.9 million and $8.5 million, respectively, or by
$0.03 per share, $0.08 per share, $0.04 per share and $0.10 per share,
respectively.
THE MACERICH COMPANY
FINANCIAL HIGHLIGHTS
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
Pro rata share of joint ventures:
---------------- ----------------
For the Three For the Six
Months Months
Ended June 30, Ended June 30,
---------------- ----------------
Unaudited Unaudited
----------- -----------
2009 2008 2009 2008
---- ---- ---- ----
Revenues:
Minimum rents $64,941 $67,124 $131,977 $133,434
Percentage rents 1,458 2,143 2,855 4,405
Tenant recoveries 31,822 31,452 63,877 64,048
Other 3,213 9,851 6,648 14,009
----- ----- ----- ------
Total revenues $101,434 $110,570 $205,357 $215,896
-------- -------- -------- --------
Expenses:
Shopping center and operating
expenses 35,195 35,988 71,174 71,913
Interest expense 25,797 25,668 51,299 51,927
Depreciation and amortization 25,908 25,755 52,409 48,034
------ ------ ------ ------
Total operating expenses 86,900 87,411 174,882 171,874
------ ------ ------- -------
Gain on sale or write-down of
assets 3 1,604 11 2,923
Equity in income (loss) of joint
ventures 19 183 (4) 299
--- --- --- ---
Net income $14,556 $24,946 $30,482 $47,244
------- ------- ------- -------
Reconciliation of Net (Loss)
income to FFO (f):
------------- -----------
For the Three For the Six
Months Months
Ended June 30, Ended June 30,
---------------- ----------------
Unaudited Unaudited
----------- -----------
2009 2008 2009 2008
---- ---- ---- ----
Net (loss) income - available to
common stockholders ($21,736) $15,725 ($7,720) $108,335
Adjustments to reconcile net
income to FFO - basic
Noncontrolling interests in OP (3,293) 2,590 (1,169) 18,665
Gain on sale or write-down of
consolidated assets 25,605 (376) 24,849 (100,313)
plus gain on undepreciated
asset sales- consolidated
assets 1,143 241 2,497 574
plus noncontrolling interests
share of gain on sale or
write-down of consolidated
joint ventures 310 248 310 589
less write-down of
consolidated assets (27,058) - (27,639) -
Gain on sale or write-down of
assets from unconsolidated
entities (pro rata share) (3) (1,604) (11) (2,923)
plus gain on undepreciated
asset sales- unconsolidated
entities (pro rata share) 3 1,116 2 2,436
plus noncontrolling interests of
gain on sale of unconsolidated
entities - 487 - 487
Depreciation and amortization on
consolidated assets 63,740 57,774 128,651 118,901
Less depreciation and amortization
allocable to noncontrolling
interests on consolidated joint
ventures (1,064) (788) (2,130) (1,361)
Depreciation and amortization on
joint ventures (pro rata) 25,908 25,755 52,409 48,034
Less: depreciation on personal
property (3,635) (2,358) (7,289) (4,600)
------ ------ ------ ------
Total FFO - basic 59,920 98,810 162,760 188,824
Additional adjustment to arrive
at FFO - diluted
Preferred stock dividends
earned - 835 - 3,289
--- --- --- -----
Total FFO - diluted $59,920 $99,645 $162,760 $192,113
------- ------- -------- --------
Reconciliation of EPS to FFO per
diluted share:
------------- -----------
For the Three For the Six
Months Months
Ended June 30, Ended June 30,
---------------- ----------------
Unaudited Unaudited
----------- -----------
2009 2008 2009 2008
---- ---- ---- ----
Earnings per share - diluted ($0.29) $0.21 ($0.11) $1.47
Per share impact of depreciation
and amortization of real
estate 0.96 0.92 1.94 1.88
Per share impact of (gain) loss
on sale or write-down of
depreciated assets - - - (1.16)
Per share impact of preferred
stock not dilutive to EPS - (0.01) - (0.02)
--- ----- --- -----
FFO per share - diluted $0.67 $1.12 $1.83 $2.17
----- ----- ----- -----
THE MACERICH COMPANY
FINANCIAL HIGHLIGHTS
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
------------- -----------
For the Three For the Six
Months Months
Reconciliation of Net
(Loss) income to EBITDA: Ended June 30, Ended June 30,
---------------- ----------------
Unaudited Unaudited
----------- -----------
2009 2008 2009 2008
---- ---- ---- ----
Net (loss) income -
available to common
stockholders ($21,736) $15,725 ($7,720) $108,335
Interest expense -
consolidated assets 71,914 72,042 141,852 146,411
Interest expense -
unconsolidated entities
(pro rata) 25,797 25,668 51,299 51,927
Depreciation and
amortization -
consolidated assets 63,740 57,774 128,651 118,901
Depreciation and
amortization -
unconsolidated entities
(pro rata) 25,908 25,755 52,409 48,034
Noncontrolling interests
in OP (3,293) 2,590 (1,169) 18,665
Less: Interest expense
and depreciation and
amortization Allocable
to noncontrolling
interests on consolidated
joint ventures (1,471) (1,191) (2,959) (1,950)
Gain on early
extinguishment of debt (7,127) - (29,601) -
Gain on sale or write-down
of assets - consolidated
assets 25,605 (376) 24,849 (100,313)
Gain on sale or write-down
of assets - unconsolidated
entities (pro rata) (3) (1,604) (11) (2,923)
Add: Non-controlling
interests share of gain on
sale of consolidated joint
ventures 310 248 310 589
Add: Non-controlling
interests share of gain on
sale of unconsolidated
entities - 487 - 487
Income tax expense
(benefit) (380) (689) (1,181) (388)
Distributions on preferred
units 171 264 415 540
Preferred dividends - 835 - 3,289
-------- -------- -------- --------
EBITDA (g) $179,435 $197,528 $357,144 $391,604
-------- -------- -------- --------
Reconciliation of EBITDA to Same Centers - Net Operating Income ("NOI"):
------------- -----------
For the Three For the Six
Months Months
Ended June 30, Ended June 30,
---------------- ----------------
Unaudited Unaudited
----------- -----------
2009 2008 2009 2008
---- ---- ---- ----
EBITDA (g) $179,435 $197,528 $357,144 $391,604
Add: REIT general and
administrative expenses 4,648 4,135 9,906 8,538
Management Companies'
revenues (9,345) (10,382) (17,885) (20,073)
Management Companies'
operating
expenses 18,872 20,529 42,302 38,872
Lease termination income
of comparable
centers (711) (2,264) (2,268) (4,787)
EBITDA of non-comparable
centers (19,833) (34,681) (41,893) (64,836)
-------- -------- -------- --------
Same Centers - NOI (h) $173,066 $174,865 $347,306 $349,318
-------- -------- -------- --------
(g) EBITDA represents earnings before interest, income taxes,
depreciation, amortization, noncontrolling interests, 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.
(h) 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 The
CONTACT: Arthur Coppola, Chairman and Chief Executive Officer, or Thomas
E. O'Hern, Senior Executive Vice President and Chief Financial Officer, both
of The
Web Site: http://www.macerich.com