SANTA MONICA, Calif., Nov. 13 /PRNewswire-FirstCall/ -- The Macerich Company (NYSE: MAC) today announced results of operations for the quarter and nine months ended September 30, 2002 which included funds from operations ("FFO") per share-diluted increasing 15.1% to $.83 for the quarter ended September 30, 2002 from $.72 for the comparable period in 2001 and FFO per share-diluted for the nine months ended September 30, 2002 increasing to $2.19 compared to $2.03 for the comparable period in 2001.
Net income to common stockholders for the nine months ended September 30, 2002 was $27.7 million or $.77 per share-diluted compared to $22.5 million or $.67 per share-diluted for the nine months ended September 30, 2001. Net income to common stockholders for the three months ended September 30, 2002 was $11.7 million, or $.32 per share-diluted compared to net income of $9.3 million or $.27 per share-diluted for the three months ended September 30, 2001.
Highlights included:
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On July 26, 2002, the Company closed on the $1.475 billion acquisition of Westcor Realty Limited Partnership and its affiliated entities ("Westcor").
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Macerich signed 253,000 square feet of specialty store leases at average initial rents of $43.37 per square foot. First year rents on mall and freestanding store leases signed during the quarter were 20% higher than expiring rents on a comparable space basis.
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Portfolio occupancy increased to 93.6% up from 92.4% at September 30, 2001. On a same center basis occupancy at September 30, 2002 was 93.3%
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Total same center tenant sales for the quarter ended September 30, 2002 were up 1.8% compared to the third quarter of 2001.
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The quarterly dividend was increased to $.57 per share to stockholders of record on November 18, 2002. Macerich has increased its dividend each year since becoming a public company in 1994. The annualized dividend yield based on the closing price on the date of declaration was 7.9%.
Commenting on results and recent events, Arthur Coppola, President and Chief Executive Officer of Macerich stated, "The quarter was highlighted by continued strong fundamentals and by our acquisition of Westcor. The Westcor portfolio significantly expands our platform for growth in the Western United States. The acquisition upgrades the quality of our portfolio in terms of sales productivity and market dominance. During the quarter the results of Westcor helped fuel our double digit FFO growth. The integration of Westcor has gone smoothly and has exceeded our expectations."
Acquisition Activity
On July 26, 2002, the Company completed the acquisition of 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. Additionally, $18.9 million of partnership units of Westcor Realty Limited Partnership were issued to limited partners of Westcor. 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 rights for over 1,000 acres of well- situated undeveloped land.
Redevelopment and Development Activity
At Queens Center, the redevelopment and expansion continued. The project will increase the size of the center from 620,000 square feet to approximately 1 million square feet. Completion is planned in phases starting in 2004 with stabilization expected in 2005. To date, 53% of the expansion space is leased with another 15% out for signature.
At Lakewood Center, Target commenced building a two-level Target store with a fall 2003 opening.
Bon Marche began construction of a new department store at Redmond Town Center.
Construction began at Scottsdale 101, a 600,000 square foot power center in North Phoenix and construction also commenced at La Encantada, a 258,000 square foot specialty center in Tucson, Arizona.
During October 2002 Macy's opened a new 180,000 square foot store becoming the fifth department store at the dominant super regional mall, Scottsdale Fashion Square.
Financing Activity
The Company refinanced Chandler Fashion Center with a $184 million 10-year fixed rate loan bearing interest at 5.48%. This loan replaced a $160 million floating rate construction loan and is a step forward towards the Company's objective of reducing its floating rate debt level.
2002 Earnings Estimates
The Company previously revised upward its year 2002 FFO per share guidance to a range of $3.14 to $3.25. The Company is currently revising guidance upward again to a range of $3.20 to $3.27.
The Macerich Company is a fully integrated self-managed and self- administered real estate investment trust, which focuses on the acquisition, leasing, management, redevelopment and development of regional malls and community centers throughout the United States. The Company is the sole general partner and owns a 77% 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, November 13, 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 September 30 Ended September 30
Unaudited
2002 2001 2002 2001
Minimum Rents 62,107 49,991 (278)
Percentage Rents 1,961 2,392 (1)
Tenant Recoveries 33,999 27,701 (121)
Other Income 3,500 2,803 (24) (6)
Total Revenues 101,567 82,887 (24) (406)
Shopping center and
operating expenses (c) 36,437 28,629 (1) (168)
Depreciation and
amortization 21,479 16,601 (88)
General, administrative
and other expenses 1,015 963
Interest expense 36,255 27,550
Gain (loss) on sale
or writedown of assets (6) (107) (7)
Pro rata income (loss)
of unconsolidated
entities (c) 15,550 8,209
Income before minority
interest & extraordinary
items 21,925 17,246 (30) (150)
Extraordinary loss on
early extinguishments
of debt 870 -- -- --
Income (loss) of the
Operating Partnership
from continuing
operations 21,055 17,246 (30) (150)
Discontinued Operations:
Gain (loss) on sale
of asset -- -- 7 --
Income from discontinuing
operations -- -- 23 150
Income before minority
interest 21,055 17,246 -- --
Income (loss) allocated
to minority interests 4,184 2,965
Net income before
preferred dividends 16,871 14,281 -- --
Dividends earned by
preferred stockholders 5,195 5,013 -- --
Net income to common
stockholders 11,676 9,268 -- --
Average # of shares
outstanding - basic 36,260 33,879
Average shares
outstanding, - basic,
assuming full conversion
of OP Units (d) 49,252 45,032
Average shares
outstanding - diluted
for FFO (d) (e) 62,852 58,994
Per share income - diluted
before extraordinary item 0.34 0.27
Net income per share -
basic 0.32 0.27
Net income per share -
diluted 0.32 0.27
Dividend declared per share 0.55 0.53
Funds from operations
"FFO" (b) (d) - basic 44,455 34,478
Funds from operations
"FFO" (a) (b) (d) -
diluted 52,093 42,462
FFO per share -
basic (b) (d) 0.90 0.77
FFO per share -
diluted (a) (b) (d) 0.83 0.72
% change in FFO -
diluted 15.15%
Results after SFAS 144
Results of Operations:
For the Three Months
Ended September 30
Unaudited
2002 2001
Minimum Rents 62,107 49,713
Percentage Rents 1,961 2,391
Tenant Recoveries 33,999 27,580
Other Income 3,476 2,797
-- --
Total Revenues 101,543 82,481
Shopping center and
operating expenses (c) 36,436 28,461
Depreciation and
amortization 21,479 16,513
General, administrative
and other expenses 1,015 963
Interest expense 36,255 27,550
Gain (loss) on sale or
writedown of assets (13) (107)
Pro rata income (loss)
of unconsolidated
entities (c) 15,550 8,209
Income before minority
interest & extraordinary
items 21,895 17,096
Extraordinary loss on
early extinguishments
of debt 870 --
Income (loss) of the
Operating Partnership
from continuing
operations 21,025 17,096
Discontinued Operations:
Gain (loss) on sale
of asset 7 --
Income from discontinuing
operations 23 150
Income before minority
interest 21,055 17,246
Income (loss) allocated
to minority interests 4,184 2,965
Net income before
preferred dividends 16,871 14,281
Dividends earned by
preferred stockholders 5,195 5,013
Net income to common
stockholders 11,676 9,268
Average # of shares
outstanding - basic 36,260 33,879
Average shares
outstanding, - basic,
assuming full conversion
of OP Units (d) 49,252 45,032
Average shares
outstanding - diluted
for FFO (d) (e) 62,852 58,994
Per share income - diluted
before extraordinary item 0.34 0.27
Net income per share -
basic 0.32 0.27
Net income per share -
diluted 0.32 0.27
Dividend declared
per share 0.55 0.53
Funds from operations
"FFO" (b) (d) - basic 44,455 34,478
Funds from operations
"FFO" (a) (b) (d) -
diluted 52,093 42,462
FFO per share -
basic (b) (d) 0.90 0.77
FFO per share -
diluted (a) (b) (d) 0.83 0.72
% change in FFO -
diluted 15.15%
THE MACERICH COMPANY
FINANCIAL HIGHLIGHTS
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
Results before SFAS 144 Impact of SFAS 144
Results of Operations:
For the Nine Months For the Nine Months
Ended September 30 Ended September 30
Unaudited
2002 2001 2002 2001
Minimum Rents 160,244 148,209 (415) (1,206)
Percentage Rents 4,250 5,380 (39)
Tenant Recoveries 85,438 79,867 (59) (294)
Other Income 8,164 7,885 (21) (19)
Total Revenues 258,096 241,341 (495) (1,558)
Shopping center and
operating expenses (c) 89,853 80,606 (64) (418)
Depreciation and
amortization 55,229 49,092 (115) (261)
General, administrative
and other expenses 4,559 4,478
Interest expense 86,415 83,042
Gain on sale
or writedown of assets 10,209 (295) (13,923)
Pro rata income of
unconsolidated
entities (c) 20,955 20,891
Income before minority
interest & extraordinary
items 53,204 44,719 (14,239) (879)
Extraordinary loss on
early extinguishments
of debt 870 187
Income of the Operating
Partnership from
continuing operations 52,334 44,532 (14,239) (879)
Discontinued Operations:
Gain on sale of asset -- -- 13,923 --
Income from discontinuing
operations -- -- 316 879
Income before minority
interest 52,334 44,532 -- --
Income allocated
to minority interests 9,364 7,342 -- --
Net income before
preferred dividends 42,970 37,190 -- --
Dividends earned by
preferred stockholders 15,222 14,675 -- --
Net income to common
stockholders 27,748 22,515 -- --
Average # of shares
outstanding - basic 35,739 33,761
Average shares
outstanding, - basic,
assuming full conversion
of OP Units (d) 47,525 44,915
Average shares
outstanding - diluted
for FFO (d) (e) 61,125 58,877
Per share income -
diluted before
extraordinary item 0.79 0.67
Net income per share -
basic 0.78 0.67
Net income per share -
diluted 0.77 0.67
Dividend declared
per share 1.65 1.59
Funds from operations
"FFO" (b) (d) - basic 111,300 95,769
Funds from operations
"FFO" (a) (b) (d) -
diluted 133,773 119,273
FFO per share -
basic (b) (d) 2.34 2.13
FFO per share -
diluted (a) (b) (d) 2.19 2.03
% change in FFO - diluted 8.03%
Results after SFAS 144
Results of Operations:
For the Nine Months
Ended September 30
Unaudited
2002 2001
Minimum Rents 159,829 147,003
Percentage Rents 4,250 5,341
Tenant Recoveries 85,379 79,573
Other Income 8,143 7,866
Total Revenues 257,601 239,783
Shopping center and
operating expenses (c) 89,789 80,188
Depreciation and
amortization 55,114 48,831
General, administrative
and other expenses 4,559 4,478
Interest expense 86,415 83,042
Gain on sale or
writedown of assets (3,714) (295)
Pro rata income of
unconsolidated
entities (c) 20,955 20,891
Income before minority
interest & extraordinary
items 38,965 43,840
Extraordinary
loss on early
extinguishment of debt 870 187
Income of the Operating
Partnership from
continuing operations 38,095 43,653
Discontinued Operations:
Gain on sale of asset 13,923 --
Income from discontinuing
operations 316 879
Income before minority
interest 52,334 44,532
Income allocated to
minority interests 9,364 7,342
Net income before
preferred dividends 42,970 37,190
Dividends earned by
preferred stockholders 15,222 14,675
Net income to common
stockholders 27,748 22,515
Average # of shares
outstanding - basic 35,739 33,761
Average shares
outstanding, - basic,
assuming full conversion
of OP Units (d) 47,525 44,915
Average shares
outstanding -
diluted
for FFO (d) (e) 61,125 58,877
Per share income - diluted
before extraordinary item 0.79 0.67
Net income per share - basic 0.78 0.67
Net income per share - diluted 0.77 0.67
Dividend declared per share 1.65 1.59
Funds from operations
"FFO" (b) (d) - basic 111,300 95,769
Funds from operations
"FFO" (a) (b) (d) -
diluted 133,773 119,273
FFO per share - basic (b) (d) 2.34 2.13
FFO per share -
diluted (a) (b) (d) 2.19 2.03
% change in FFO - diluted 8.03%
(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 29, 2001, Macerich Property Management Company merged
into a wholly-owned subsidiary of the Macerich Partnership L.P. and
as of that date the results 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.
Sept. 30 Dec 31
Summarized Balance Sheet Information 2002 2001
(UNAUDITED)
Cash and cash equivalents $63,165 $26,470
Investment in real estate, net (h) $2,779,423 $1,887,329
Investments in unconsolidated
entities (i) $610,255 $278,526
Total Assets $3,588,051 $2,294,502
Mortgage and notes payable $2,550,415 $1,398,512
Convertible debentures $125,148 $125,148
Sept. 30 Sept. 30
Additional financial data as of: 2002 2001
Occupancy of centers (f) 93.60% 92.40%
Comparable quarter change
in same center sales (f) (g) 1.80% -1.80%
Additional financial data for
the nine months ended:
Acquisitions of property
and equipment - including
joint ventures prorata $923,219 $11,159
Development, redevelopment
and expansions of centers -
including joint
ventures prorata $26,967 $25,239
Renovations of centers -
including joint ventures
at prorata $4,241 $9,432
Tenant allowances - including
joint ventures at prorata $9,901 $13,568
Deferred leasing costs -
including joint ventures
at prorata $12,192 $9,777
(f) excludes redevelopment properties -- Crossroads Mall - Boulder,
and Parklane Mall, Westcor and the Oaks.
(g) includes mall and freestanding stores.
(h) includes construction in process on wholly owned assets of $91,224 at
September 30, 2002 and $71,161 at December 31, 2001.
(i) the Company's prorata share of construction in process on
unconsolidated entities of $13,064 at September 30, 2002 and
$3,110 at December 31, 2001.
THE MACERICH COMPANY
FINANCIAL HIGHLIGHTS
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
PRORATA SHARE OF JOINT VENTURES
For the Three Months For the Nine Months
Ended September 30 Ended September 30
Unaudited Unaudited
(Unaudited) (All amounts in thousands) (All amounts in thousands)
2002 2001 2002 2001
Revenues:
Minimum rents $38,122 $26,630 $91,494 $78,011
Percentage rents 1,027 1,016 2,787 2,995
Tenant recoveries 16,047 11,274 37,503 32,481
Management fee (c) 2,573 2,104 6,888 7,328
Other 806 915 2,136 2,736
Total revenues 58,575 41,939 140,808 123,551
Expenses:
Shopping center and
operating expenses 17,761 13,782 44,468 39,946
Interest expense 14,398 11,529 35,786 35,430
Management company
expense (c) 2,317 1,584 6,165 7,248
Depreciation and
amortization 11,076 6,920 25,541 20,244
Total operating
expenses 45,552 33,815 111,960 102,868
Gain (loss) on sale
or writedown of assets 2,527 85 (7,893) 208
Net income 15,550 8,209 20,955 20,891
RECONCILIATION OF NET INCOME TO FFO
For the Three Months For the Nine Months
Ended September 30 Ended September 30
(All amounts in thousands) (All amounts in thousands)
(UNAUDITED) (UNAUDITED)
2002 2001 2002 2001
Net income - available
to common stockholders $11,676 $9,268 $27,748 $22,515
Adjustments to reconcile
net income to FFO - basic
Minority interest 4,184 2,965 9,364 7,342
Loss on early
extinguishment of debt 870 -- 870 187
(Gain) loss on sale
of wholly owned assets 6 107 (10,209) 295
(Gain) loss on sale
or write-down of assets
from unconsolidated
entities (pro rata) (2,527) (85) 7,893 (208)
Depreciation and
amortization on
wholly owned centers 21,479 16,601 55,229 49,092
Depreciation and
amortization on
joint ventures and
from the management
companies (pro rata) 11,076 6,920 25,541 20,244
Less: depreciation on
personal property and
amortization of loan
costs and interest
rate caps (2,309) (1,298) (5,136) (3,698)
Total FFO - basic 44,455 34,478 111,300 95,769
Weighted average
shares outstanding -
basic (d) 49,252 45,032 47,525 44,915
Additional adjustment to
arrive at FFO - diluted
Interest expense and
amortization of loan
costs on the
debentures (e) 2,443 2,971 7,251 8,829
Preferred stock
dividends earned 5,195 5,013 15,222 14,675
Effect of employee/
director stock
incentive plans
FFO - diluted 52,093 42,462 133,773 119,273
Weighted average
shares outstanding -
diluted (d) (e) 62,852 58,994 61,125 58,877
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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/