SANTA MONICA, Calif., Nov. 3 /PRNewswire-FirstCall/ -- The Macerich Company (NYSE: MAC) today announced results of operations for the quarter ended September 30, 2006 which included net income available to common stockholders of $47.0 million or $.66 per share-diluted compared to $4.1 million or $.07 per share-diluted for the quarter ended September 30, 2005. For the nine months ended September 30, 2006, net income increased to $80.1 million compared to $28.9 million for the nine months ended September 30, 2005. Funds from operations ("FFO") diluted was $86.6 million or $.98 per share compared to $81.1 million or $1.04 per share for the quarter ended September 30, 2005. For the nine months ended September 30, 2006, FFO-diluted was $262.0 million compared to $234.1 million for the nine months ended September 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 326,000 square feet of specialty
store leases at average initial rents of $40.88 per square foot.
Starting base rent on new lease signings was 23.7% higher than the
expiring base rent.
* Total same center tenant sales, for the quarter ended September 30,
2006, were up 5.3% compared to sales for the quarter ended September 30,
2005.
* Portfolio occupancy at September 30, 2006 was 93.0% compared to 93.4% at
September 30, 2005. On a same center basis, occupancy was 93.0% at
September 30, 2006 compared to 93.6% at September 30, 2005.
* During the third quarter, Great Falls Marketplace, Greeley Mall, Holiday
Village Mall, and Parklane Mall were sold for a combined sale price of
approximately $132 million. The Macerich total gain on sale of these
assets recognized during the quarter was in excess of $46 million.
Commenting on results, Arthur Coppola president and chief executive officer of Macerich stated, "The quarter was highlighted by continued strong core operations. Occupancy remained high, leasing spreads were excellent and mall tenant sales growth continued at a healthy level.
In addition during the quarter we were active in selling non-core assets and improving our balance sheet. The ultimate use of the sale proceeds will be for our upcoming developments and redevelopments which is a very effective recycling of our capital. The strengthening of our balance sheet leaves us well positioned to take advantage of the pipeline of development and redevelopment opportunities in our existing portfolio."
Redevelopment and Development Activity
The grand opening of the first phase of Twenty-Ninth Street, an 805,000 square foot shopping district in Boulder, Colorado, took place on October 13. The balance of the project is scheduled for completion in the summer 2007. Phase I of the project is 87% leased with another 7% of the space in negotiation. 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.
The grand re-opening of Carmel Plaza took place on October 21. The center underwent an $11 million renovation which included the reconfiguring of a former department store space. New high-profile luxury tenants include San Francisco based Wilkes Bashford, Tiffany & Co., Cos Bar and Anthropologie.
On November 1, we received City Council approval for our application to add up to four or five mixed use towers of up to 165 feet at Biltmore Fashion Park. Biltmore Fashion Park is an established luxury destination for first-to-market, high-end and luxury tenants in the metropolitan Phoenix market. The mixed use towers are planned to be built over time based upon demand.
In Thousand Oaks, California, the planning commission voted on October 23 to approve the first comprehensive renovation and expansion plan of The Oaks Mall since it was first opened in 1978. The expansion will add 230,000 square feet of building area to the approximately 1 million square feet of space that currently exists. Construction is projected to start in January 2007. The expansion, including a new 144,000 square foot Nordstrom is scheduled to open at the center in fall 2008.
At Westside Pavilion in Los Angeles, construction continues on the redevelopment of the western portion of the center that will include a 12 screen, 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 is currently 70% leased and 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 third quarter sales of Great Falls Marketplace, Greeley Mall, Holiday Village Mall and Parklane Mall. The aggregate total purchase price was approximately $132 million. The gain on the sale of these four assets was in excess of $46 million. These centers totaled 1.0 million square feet and averaged $239 per square foot in annual tenant sales.
Financing Activity
In July, the Company's line of credit was upsized from $1.0 billion to $1.5 billion. 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 September, Macerich swapped $400 million of the line to a fixed rate of 5.08% plus the applicable line of credit borrowing spread.
In July, a $61 million, 6.26% fixed rate, 10-year loan was placed on Crossroads Mall. The loan proceeds were used primarily to pay-down floating rate debt.
Primarily as a result of the above transactions and the application of the asset sale proceeds to reduce the line of credit indebtedness, the percentage of unhedged floating rate debt to total debt was reduced to 18.65%.
Macerich 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, November 3, 2006 at 10:30 AM Pacific Time. To listen to the call, please go to either 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.
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 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, which discussion is incorporated herein by reference.
(See attached tables)
THE MACERICH COMPANY
FINANCIAL HIGHLIGHTS
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
Results before Impact of
SFAS 144 (e) SFAS 144 (e)
For the For the
Three Months Three Months
Ended Ended
September 30, September 30,
Unaudited
Results of Operations: 2006 2005 2006 2005
Minimum rents $123,314 $124,738 ($895) ($4,737)
Percentage rents 4,880 5,291 (14) 13
Tenant recoveries 67,541 65,645 (186) (1,585)
Management Companies' revenues 8,023 6,921 -- --
Other income 9,469 5,505 (26) (201)
Total revenues 213,227 208,100 (1,121) (6,510)
Shopping center and operating
expenses 71,553 70,824 (595) (2,553)
Management Companies' operating
expenses 14,455 12,914 -- --
Income tax expense < benefit > 535 (1,166) -- --
Depreciation and amortization 56,120 57,941 (277) (1,730)
General, administrative and other
expenses 2,551 3,420 -- --
Interest expense 70,272 71,354 (117) (1,294)
Loss on early extinguishment of debt 29 -- -- --
Gain (loss) on sale or writedown of
assets 46,560 10 (46,022) --
Pro rata income (loss) of
unconsolidated entities (c) 18,490 18,831 -- --
Minority interests in consolidated
joint ventures (694) 90 (176) (168)
Income (loss) from continuing
operations 62,068 11,744 (46,330) (1,101)
Discontinued Operations:
Gain (loss) on sale of asset -- -- 46,214 --
Income from discontinued
operations -- -- 116 1,101
Income before minority interests
of OP 62,068 11,744 -- --
Income allocated to minority
interests of OP 8,901 1,406 -- --
Net income before preferred
dividends 53,167 10,338 -- --
Preferred dividends and
distributions (a) 6,199 6,274 -- --
Net income to common stockholders $46,968 $4,064 $0 $0
Average number of shares outstanding
- basic 71,479 59,247
Average shares outstanding, assuming
full conversion of OP Units (d) 85,021 73,660
Average shares outstanding - diluted
for FFO (d) 88,648 77,633
Per share income - diluted before
discontinued operations -- --
Net income per share - basic $0.66 $0.07
Net income per share - diluted (a) $0.66 $0.07
Dividend declared per share $0.68 $0.65
Funds from operations
"FFO" (b)(d) - basic $84,020 $78,264
Funds from operations
"FFO" (a)(b)(d) - diluted $86,595 $81,090
FFO per share- basic (b)(d) $0.99 $1.07
FFO per share- diluted (a)(b)(d) $0.98 $1.04
Results after SFAS 144 (e)
For the Three Months
Ended September 30,
Unaudited
Results of Operations: 2006 2005
Minimum rents $122,419 $120,001
Percentage rents 4,866 5,304
Tenant recoveries 67,355 64,060
Management Companies' revenues 8,023 6,921
Other income 9,443 5,304
Total revenues 212,106 201,590
Shopping center and operating expenses 70,958 68,271
Management Companies' operating expenses 14,455 12,914
Income tax expense < benefit > 535 (1,166)
Depreciation and amortization 55,843 56,211
General, administrative and other expenses 2,551 3,420
Interest expense 70,155 70,060
Loss on early extinguishment of debt 29 --
Gain (loss) on sale or writedown of assets 538 10
Pro rata income (loss) of
unconsolidated entities (c) 18,490 18,831
Minority interests in consolidated
joint ventures (870) (78)
Income (loss) from continuing operations 15,738 10,643
Discontinued Operations:
Gain (loss) on sale of asset 46,214 --
Income from discontinued
operations 116 1,101
Income before minority interests of OP 62,068 11,744
Income allocated to minority
interests of OP 8,901 1,406
Net income before preferred dividends 53,167 10,338
Preferred dividends and distributions (a) 6,199 6,274
Net income to common stockholders $46,968 $4,064
Average number of shares outstanding -
basic 71,479 59,247
Average shares outstanding, assuming
full conversion of OP Units (d) 85,021 73,660
Average shares outstanding - diluted
for FFO (d) 88,648 77,633
Per share income - diluted before
discontinued operations $0.12 $0.06
Net income per share - basic $0.66 $0.07
Net income per share - diluted (a) $0.66 $0.07
Dividend declared per share $0.68 $0.65
Funds from operations "FFO" (b)(d)- basic $84,020 $78,264
Funds from operations "FFO" (a)(b)(d) -
diluted $86,595 $81,090
FFO per share - basic (b)(d) $0.99 $1.07
FFO per share - diluted (a)(b)(d) $0.98 $1.04
THE MACERICH COMPANY
FINANCIAL HIGHLIGHTS
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
Results before Impact of
SFAS 144 (e) SFAS 144 (e)
For the For the
Nine Months Nine Months
Ended Ended
September 30, September 30,
Unaudited
Results of Operations: 2006 2005 2006 2005
Minimum rents $384,383 $335,391 ($10,314) ($14,376)
Percentage rents 10,601 11,164 (248) (431)
Tenant recoveries 200,879 169,811 (3,954) (5,179)
Management Companies' revenues 22,650 18,362 -- --
Other income 22,756 16,684 (349) (517)
Total revenues 641,269 551,412 (14,865) (20,503)
Shopping center and operating
expenses 209,831 179,169 (6,125) (7,964)
Management Companies' operating
expenses 41,295 37,291 -- --
Income tax expense (benefit) 219 (2,205) -- --
Depreciation and amortization 179,071 149,767 (3,097) (4,851)
General, administrative and other
expenses 9,540 9,937 -- --
Interest expense 213,426 175,636 (2,253) (3,501)
Loss on early extinguishment of
debt 1,811 -- -- --
Gain (loss) on sale or writedown
of assets 109,020 1,474 (108,983) (297)
Pro rata income (loss) of
unconsolidated entities (c) 57,367 46,416 -- --
Minority interests in consolidated
joint ventures (39,101) (471) 37,229 (173)
Income (loss) from continuing
operations 113,362 49,236 (75,144) (4,657)
Discontinued Operations:
Gain (loss) on sale of asset -- -- 72,167 297
Income from discontinued
operations -- -- 2,977 4,360
Income before minority interests
of OP 113,362 49,236 -- --
Income allocated to minority
interests of OP 15,131 7,085 -- --
Net income before preferred
dividends 98,231 42,151 -- --
Preferred dividends and
distributions (a) 18,139 13,197 -- --
Net income to common stockholders $80,092 $28,954 $0 $0
Average number of shares
outstanding - basic 70,587 59,073
Average shares outstanding,
assuming full conversion of
OP Units (d) 84,216 73,522
Average shares outstanding -
diluted for FFO (d) 87,843 77,349
Per share income - diluted before
discontinued operations -- --
Net income per share - basic $1.13 $0.49
Net income per share - diluted (a) $1.13 $0.49
Dividend declared per share $2.04 $1.95
Funds from operations
"FFO" (b)(d) - basic $254,523 $226,569
Funds from operations
"FFO" (a)(b)(d) - diluted $262,031 $234,110
FFO per share - basic (b)(d) 3.03 $3.10
FFO per share- diluted (a)(b)(d) $2.98 $3.03
Results after SFAS 144 (e)
For the Nine Months
Ended September 30,
Unaudited
Results of Operations: 2006 2005
Minimum rents $374,069 $321,015
Percentage rents 10,353 10,733
Tenant recoveries 196,925 164,632
Management Companies' revenues 22,650 18,362
Other income 22,407 16,167
Total revenues 626,404 530,909
Shopping center and operating expenses 203,706 171,205
Management Companies' operating expenses 41,295 37,291
Income tax expense (benefit) 219 (2,205)
Depreciation and amortization 175,974 144,916
General, administrative and other expenses 9,540 9,937
Interest expense 211,173 172,135
Loss on early extinguishment of debt 1,811 --
Gain (loss) on sale or writedown of assets 37 1,177
Pro rata income (loss) of
unconsolidated entities (c) 57,367 46,416
Minority interests in consolidated
joint ventures (1,872) (644)
Income (loss) from continuing operations 38,218 44,579
Discontinued Operations:
Gain (loss) on sale of asset 72,167 297
Income from discontinued
operations 2,977 4,360
Income before minority interests of OP 113,362 49,236
Income allocated to minority
interests of OP 15,131 7,085
Net income before preferred dividends 98,231 42,151
Preferred dividends and distributions (a) 18,139 13,197
Net income to common stockholders $80,092 $28,954
Average number of shares outstanding - basic 70,587 59,073
Average shares outstanding, assuming
full conversion of OP Units (d) 84,216 73,522
Average shares outstanding - diluted
for FFO (d) 87,843 77,349
Per share income - diluted before
discontinued operations $0.24 $0.43
Net income per share - basic $1.13 $0.49
Net income per share - diluted (a) $1.13 $0.49
Dividend declared per share $2.04 $1.95
Funds from operations "FFO" (b)(d) - basic $254,523 $226,569
Funds from operations "FFO" (a)(b)(d) -
diluted $262,031 $234,110
FFO per share - basic (b)(d) $3.03 $3.10
FFO per share - diluted (a)(b)(d) $2.98 $3.03
(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 - diluted 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 nine months ended September 30, 2006 and 2005 by
$2.3 million, $6.0 million, $1.3 million and $3.2 million,
respectively, or by $.03 per share, $.07 per share, $.02 per share and
$.04 per share, respectively. Additionally, SFAS 141 increased FFO
for the three and nine months ended September 30, 2006 and 2005 by
$4.0 million, $12.9 million, $4.8 million and $10.9 million,
respectively or by $.04 per share, $.15 per share, $.06 per share and
$.14 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 nine months ended September 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 $25.8 million. Additionally, the Company
reclassified the results of operations for the three and nine months
ended September 30, 2006 and 2005 to discontinued operations. On
July 13, 2006, Parklane Mall in Nevada was sold. The sale of this
property resulted in a gain on sale of $5.9 million. The Company
reclassified the results of operations for the three and nine months
ended September 30, 2006 and 2005 to discontinued operations.
On July 27, 2006, Greeley Mall in Colorado and Holiday Village in
Montana were sold. The sale of these properties resulted in gains on
sale of $21.3 million and $7.3 million, respectively. The Company
reclassified the results of operations for the three and nine months
ended September 30, 2006 and 2005 to discontinued operations.
On August 11, 2006, Great Falls Marketplace in Montana was sold. The
sale of this property resulted in a gain on sale of $11.9 million.
The Company reclassified the results of operations for the three and
nine months ended September 30, 2006 and 2005 to discontinued
operations.
September 30, Dec 31,
Summarized Balance Sheet Information 2006 2005
(UNAUDITED)
Cash and cash equivalents $62,047 $155,113
Investment in real estate, net (h) $5,675,959 $5,438,496
Investments in unconsolidated
entities (i) $1,001,051 $1,075,621
Total Assets $7,280,523 $7,178,944
Mortgage and notes payable $4,852,636 $5,424,730
Pro rata share of debt on
unconsolidated entities $1,644,727 $1,438,960
Total common shares outstanding at
quarter end: 71,482 59,942
Total preferred shares outstanding at
quarter end: 3,627 3,627
Total partnership/preferred units
outstanding at quarter end: 16,387 16,647
September 30, September 30,
Additional financial data as of: 2006 2005
Occupancy of centers (f) 93.00% 93.40%
Comparable quarter change in same
center sales (f) (g) 5.30% 7.00%
Additional financial data for the
nine months ended:
Acquisitions of property and
equipment - including joint
ventures at prorata $359,213 $2,476,820
Redevelopment and expansions of centers -
including joint ventures at prorata $141,039 $114,648
Renovations of centers - including
joint ventures at prorata $44,546 $44,916
Tenant allowances - including joint
ventures at prorata $28,794 $22,074
Deferred leasing costs - including
joint ventures at prorata $20,473 $19,939
(f) excludes redevelopment properties.
(g) includes mall and freestanding stores.
(h) includes construction in process on wholly owned assets of $295,852
at September 30, 2006 and $162,157 at December 31, 2005.
(i) the Company's prorata share of construction in process on
unconsolidated entities of $148,800 at September 30, 2006 and $98,180
at December 31, 2005.
PRORATA SHARE OF For the Three Months For the Nine Months
JOINT VENTURES Ended September 30, Ended September 30,
(UNAUDITED) (UNAUDITED)
(All amounts in (All amounts in
(Unaudited) thousands) thousands)
2006 2005 2006 2005
Revenues:
Minimum rents $59,760 $54,310 $177,230 $150,130
Percentage rents 2,784 2,391 7,306 5,942
Tenant recoveries 28,674 23,909 82,680 65,846
Other 3,931 2,910 10,607 8,665
Total revenues 95,149 83,520 277,823 230,583
Expenses:
Shopping center
expenses 32,425 28,818 92,869 77,067
Interest expense 23,507 16,823 66,260 54,128
Depreciation and
amortization 21,045 20,495 62,209 55,243
Total operating
expenses 76,977 66,136 221,338 186,438
Gain on sale or
writedown of assets 1 1,321 245 1,861
Equity in income of
joint ventures 317 126 637 410
Net income $18,490 $18,831 $57,367 $46,416
RECONCILIATION OF For the Three Months For the Nine Months
NET INCOME TO Ended September 30, Ended September 30,
FFO (b)(e) (UNAUDITED) (UNAUDITED)
(All amounts in (All amounts in
thousands) thousands)
2006 2005 2006 2005
Net income - available
to common stockholders $46,968 $4,064 $80,092 $28,954
Adjustments to reconcile
net income to FFO - basic
Minority interest in OP 8,901 1,406 15,131 7,085
(Gain ) loss on sale of
consolidated assets (46,560) (10) (109,020) (1,474)
plus gain on
undepreciated asset
sales - consolidated
assets 2,339 -- 5,715 1,307
plus minority interest
share of gain on
sale of consolidated
joint ventures (192) -- 36,816 --
(Gain) loss on sale
of assets from
unconsolidated
entities (pro rata
share) (1) (1,321) (245) (1,861)
plus gain on
undepreciated
asset sales -
unconsolidated assets -- 1,323 244 1,867
Depreciation and
amortization on
consolidated assets 56,120 57,941 179,071 149,767
Less depreciation and
amortization allocable
to minority interests
on consolidated joint
ventures (1,128) (1,787) (4,351) (3,612)
Depreciation and
amortization on joint
ventures (pro rata) 21,045 20,495 62,209 55,243
Less: depreciation
on personal property
and amortization of
loan costs and
interest rate caps (3,472) (3,847) (11,139) (10,707)
Total FFO - basic 84,020 78,264 254,523 226,569
Additional adjustment
to arrive at FFO -
diluted
Preferred stock
dividends earned 2,575 2,503 7,508 7,218
Non-participating
preferred units -
dividends 323 323
Participating
preferred units -
dividends n/a - antidilutive n/a - antidilutive
FFO - diluted 86,595 81,090 262,031 234,110
For the Three Months For the Nine Months
Ended September 30, Ended September 30,
(UNAUDITED) (UNAUDITED)
(All amounts in (All amounts in
Reconciliation of EPS thousands) thousands)
to FFO per diluted share: 2006 2005 2006 2005
Earnings per share $0.66 $0.07 $1.13 $0.49
Per share impact of
depreciation and
amortization real
estate $0.86 $0.99 $2.69 $2.60
Per share impact of
gain on sale of
depreciated assets ($0.52) $0.00 ($0.79) $0.00
Per share impact of
preferred stock
not dilutive to EPS ($0.02) ($0.02) ($0.05) ($0.06)
Fully Diluted FFO per
share $0.98 $1.04 $2.98 $3.03
THE MACERICH COMPANY
RECONCILIATION OF For the Three Months For the Nine Months
NET INCOME TO EBITDA Ended September 30, Ended September 30,
(UNAUDITED) (UNAUDITED)
(All amounts in (All amounts in
thousands) thousands)
2006 2005 2006 2005
Net income - available
to common stockholders $46,968 $4,064 $80,092 $28,954
Interest expense 70,272 71,354 213,426 175,636
Interest expense -
unconsolidated
entities (pro rata) 23,507 16,823 66,260 54,128
Depreciation and
amortization -
consolidated assets 56,120 57,941 179,071 149,767
Depreciation and
amortization -
unconsolidated
entities (pro rata) 21,045 20,495 62,209 55,243
Minority interest 8,901 1,406 15,131 7,085
Less: Interest expense
and depreciation and
amortization allocable
to minority interests
on consolidated joint
ventures (1,264) (2,559) (6,191) (5,163)
Loss on early
extinguishment of debt 29 -- 1,811 --
Loss on early
extinguishment of debt -
unconsolidated entities
(pro rata) -- 7 -- 7
Loss (gain) on sale
of assets -
consolidated assets (46,560) (10) (109,020) (1,474)
Loss (gain) on sale
of assets -
unconsolidated
entities (pro rata) (1) (1,321) (245) (1,861)
Add: Minority interest
share of gain on sale
of consolidated joint
ventures (192) -- 36,816 --
Income tax expense
(benefit) 535 (1,166) 219 (2,205)
Preferred dividends 6,199 6,274 18,139 13,197
EBITDA (j) $185,559 $173,308 $557,718 $473,314
THE MACERICH COMPANY
RECONCILIATION OF EBITDA TO SAME CENTERS - NET OPERATING INCOME ("NOI")
For the Three Months For the Nine Months
Ended September 30, Ended September 30,
(UNAUDITED) (UNAUDITED)
(All amounts in (All amounts in
thousands) thousands)
2006 2005 2006 2005
EBITDA (j) $185,559 $173,308 $557,718 $473,314
Add: REIT general and
administrative expenses 2,551 3,420 9,540 9,937
Management Companies'
revenues (c) (8,023) (6,921) (22,650) (18,362)
Management Companies'
operating expenses (c) 14,455 12,914 41,295 37,291
EBITDA of non-
comparable centers (13,017) (5,898) (120,501) (55,679)
SAME CENTERS - Net
operating income
("NOI")(k) $181,525 $176,823 $465,402 $446,501
(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
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