SANTA MONICA, Calif., Feb 15 /PRNewswire/ -- The Macerich Company (NYSE: MAC) today announced results of operations for the quarter and for the year ended December 31, 1999 which included the following:
-- FFO per share-diluted increased by 16.5% during the quarter to $.76
compared to $.65 for the fourth quarter of 1998 on a comparable basis.
-- Same Center net operating income, excluding redevelopment centers,
increased by 6.3% compared to the fourth quarter of 1998 and 6.7% for
the twelve months ended December 31, 1999 compared to the same period
in 1998.
-- Tenant Sales per square foot, for tenants in occupancy for a full
year, increased to $336 in 1999, a 5.3% increase over 1998.
-- During the fourth quarter, Macerich sold Huntington Center for
$48 million. The proceeds were used to paydown debt and redeem
$26 million in Operating Partnership Units ("OP units").
-- In 1999, Macerich formed a joint venture, known as Pacific Premier
Retail Trust ("PPRT"), with the Ontario Teachers' Pension Plan Board.
In February, PPRT acquired the Safeco Portfolio with total assets of
$530 million, primarily in the Pacific Northwest. In October 1999,
Macerich contributed Lakewood Mall, Los Cerritos Center and Stonewood
Mall to PPRT. The joint venture now has total assets of approximately
$1.1 billion.
-- In 1999, Macerich signed 967,000 square feet of leases on space under
10,000 square feet at average first year rents of $29.76 per square
foot. First year rent on new leases was approximately 13% higher than
expiring rent on comparable space and approximately 19% higher than
the average base rent per square foot in the portfolio.
Commenting on the results, Arthur Coppola, President and Chief Executive Officer of Macerich stated, "The results for the fourth quarter and the year reflect the ongoing trend of same center revenue gains compared to the same periods in the prior year, strong increases in tenant sales per square foot and strong leasing activity. These trends have contributed to the significant increase in our internal growth, which has fueled much of our 1999 FFO growth per share. In addition, the joint venture we formed in February 1999 with the Ontario Teachers' Pension Plan Board also made a significant contribution to the FFO growth.
The liquidity derived from the sale of Huntington Center, refinancing activities in the fourth quarter and the expansion of our joint venture with the Ontario Teachers' Pension Plan Board allowed us to strengthen our balance sheet. In addition to paying off some short-term debt, we also reduced the outstanding balance on our line of credit and redeemed 1.3 million OP units. Our balance sheet is well positioned for the upcoming year."
Financial Results
For the quarter ended December 31, 1999, FFO-diluted increased to $45.9 million from $43 million, and on a per share basis, FFO - diluted increased 16.5% to $.76 from $.65 in the fourth quarter of 1998 on a comparable basis. For the year ended December 31, 1999, FFO per share-diluted was $2.70, a 12.2% increase over $2.41 in 1998 on a comparable basis.
Net income available to common stockholders for the quarter was $83.9 million or $2.45 per share-diluted compared to $13.8 million or $.42 per share for the three months ended December 31, 1998. For the year ended December 31, 1999, net income available to common stockholders was $110.9 million or $3.24 per share-diluted compared to $32.5 million or $1.06 per share for 1998.
Highlights
-- During the quarter, there were 298,000 square feet of leases signed
for mall and freestanding shop space. The average rent on new leases
was $28.89 per square foot. On a comparable space basis, the new
leases were signed at rents approximately 13% higher than expiring
rents.
-- In October, the Company acquired Santa Monica Place in Santa Monica,
California. Santa Monica Place is a 560,000 square foot regional mall
anchored by Robinsons-May and Macy's. It is prominently situated in
the heart of the Santa Monica retail district and combined with
Westside Pavilion in West Los Angeles and Villa Marina Marketplace in
Marina Del Rey, gives Macerich control of the three dominant regional
centers in this densely populated trade area.
-- The Company placed a $75 million secured loan on Stonewood Mall. The
interest rate is at LIBOR plus 1.75% and the loan matures in February
2001. The proceeds were used to pay down short term debt and for
general corporate purposes.
-- The Company contributed Lakewood Mall, Stonewood Mall and Los Cerritos
Center to PPRT, owned approximately 51% by Macerich and 49% by Ontario
Teachers' Pension Plan Board. The total value of the transaction was
approximately $535 million. The properties were contributed to the
venture subject to existing debt of $322 million. The net proceeds to
Macerich of $104 million were used for reduction of debt and general
corporate purposes, which included the acquisition of Santa Monica
Place.
-- The $90 million redevelopment of Pacific View Mall in Ventura,
California continues and is on schedule for a March 2000 grand
opening. This renovation includes the addition of Robinsons-May and
Sears and a new 124,500 square foot JC Penney store. The leasing
activity remains strong with approximately 91% of the non-anchor space
committed. In addition, Macy's has started a $25 million renovation
of their store.
-- Ground breaking took place on the expansion of Lakewood Mall. The
first Macy's store to be built in Southern California is now under
construction and the project will also include the relocation of
Mervyn's department store and development of an additional
60,000 square feet of shop space.
-- In December, the Company increased its dividend to $0.51 per share per
quarter. Macerich has increased its dividend each year since going
public in March, 1994.
The Macerich Company is a fully integrated self-managed and self-administered real estate investment trust, which focuses on the acquisition and redevelopment of regional malls and community centers throughout the United States. The Company is the sole general partner and owns an 80% ownership interest in The Macerich Partnership, L.P. Macerich owns interests in 47 regional malls and five community centers totaling over 41 million square feet. Additional information about The Macerich Company can be obtained from the Company's web site at www.macerich.com.
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, lease rates, availability and cost of financing and operating expenses; adverse changes in the real estate markets including, among other things, competition with other companies, retail formats and technology, risks of real estate development and acquisition, governmental actions and initiatives; and environmental and safety requirements. 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 of Operations: for the three for the twelve
months ended months ended
December 31 December 31
(UNAUDITED)
1999 1998 1999 1998
Minimum Rents 51,094 52,657 204,568 179,710
Percentage Rents (b) 4,511 6,148 15,106 12,856
Tenant Recoveries 26,341 25,965 99,126 86,740
Other Income 2,730 1,430 8,644 4,555
Total Revenues 84,676 86,200 327,444 283,861
Shopping Center Expenses 27,789 27,856 100,327 89,991
Depreciation and amortization 14,949 14,222 61,383 53,141
General, administrative and
other expenses (c) 1,405 1,253 5,488 4,373
Interest expense 28,180 25,333 113,348 91,433
Gain on sale of assets 95,819 0 95,981 9
Pro rata income of unconsolidated
entities (d) 9,251 6,048 25,945 14,480
Income before minority interest
& extraordinary items 117,423 23,584 168,824 59,412
Income allocated to
minority interests 28,540 5,154 38,335 12,902
Extraordinary loss on early
extinguishment of debt 460 22 1,478 2,435
Dividends earned by
preferred stockholders 4,557 4,648 18,138 11,547
Net income -- available
to common stockholders 83,866 13,760 110,873 32,528
Average # of shares
outstanding -- basic 34,069 32,775 34,007 30,805
Average shares outstanding,-basic,
assuming full conversion of OP
Units (e) 45,664 45,107 46,130 43,016
Average shares outstanding --
diluted for FFO (f) (e) 60,409 60,024 60,893 49,686
Net income per share -- basic $2.46 $0.42 $3.26 $1.06
Net income per share -- diluted $2.45 $0.42 $3.24 $1.06
Dividend declared per share $0.510 $0.485 $1.965 $1.865
Funds from operations
"FFO" (a) (e) -- basic $37,466 $34,960 $131,725 $108,303
Funds from operations
"FFO" (a) (f) (e) -- diluted $45,868 $43,027 $164,302 $120,518
FFO per share -- basic (a) (e) $0.820 $0.775 $2.856 $2.518
FFO per share -- diluted(a) (f) (e) $0.759 $0.717 $2.698 $2.426
Proforma FFO per share- diluted
assuming the accounting change,
EITF 97-11, was effective 1-1-98,
and that EITF 98-9, was reversed
effective 1-1-98.
proforma impact of EITF 97-11 (c) ($0.020)
proforma impact of EITF 98-9 (b) ($0.065) $0.000
Proforma FFO per share --
diluted (g) $0.759 $0.652 $2.698 $2.406
% change in proforma
FFO -- diluted (g) 16.49% 12.16%
(a) 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
entitiesare calculated on the same basis."Percentage change in FFO per
share is based on a comparison to the same period in 1998.
(b) Effective April 1, 1998, there was an accounting change (EITF 98-9)
mandated by the Financial Accounting Standards Board which modified
the timing on recognition of revenue forpercentage rent received from
tenants. Although the accounting change hadno material impact on the
annual percentage rent recognized, theaccounting change had the effect
of deferring, including a pro rata share of joint ventures, $3,241 of
percentage rent (or $.065 per diluted share) from the second and third
quarters of 1998 to the quarter ended December 31, 1998.During 1999,
the FASB reversed EITF 98-9 and the accounting treatment, starting
effective January 1, 1999 reverted to the former method of accounting
for percentage rents.
(c) Effective March 19, 1998 the Financial Accounting Standards Board
adopted EITF # 97-11 entitled "Accounting for Internal Costs Relating
to Real Estate Property Acquisitions".This accounting interpretation
requires internal acquisition costs to be expensed, previously these
costs had been capitalized. If this new accounting interpretation had
been implemented effective January 1, 1998,it would have reducedincome
before extraordinary items by $543 or$.02 per share - dilutedfor the
first quarter of 1998.
(d) This includes the Company's prorata share of the equity in income or
loss of its unconsolidated joint ventures and the Management
companies, all of which are accounted for using the equity method of
accounting.
(e) The Company has operating partnership units ("OP units"). Each OP
unit can be converted into a share of Company stock.Conversion of the
OP unitshas been assumed for purposes of calculating the FFO per share
and the weighted average number of shares outstanding.
(f) The Company issued $161,400 of convertible debentures in June and
July, 1997. The debentures are convertibleinto common shares at a
conversion price of$31.125 per share.Conversion is not reflected for
calculation of 1998FFO per share (although it was dilutive for FFO per
share in the fourth quarter of 1998) or net income per share as the
conversion would be antidilutive.On February 25, 1998 the Company sold
$100,000 of convertible preferred stock and onJune 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 incomeper share as it would beantidilutive to that
calculation.The weighted average preferred shares outstanding are
assumed converted for purposes ofFFO per share as they are dilutive to
that calculation.Also included in diluted net income per share and FFO
per share is theeffect of stock optionsand restricted stock,
calculated using the treasury method.
(g) This reflects the impact of the accounting changes discussed in
footnotes (b) and (c) above on a proforma basis assuming that the
accounting change noted in footnote (c) was effective as of January1,
1998 and that the accounting change discussed in footnote (b), EITF
98-9 was reversed effective January 1, 1998.
Summarized Balance Sheet Dec 31 Dec 31
Information 1999 1998
(UNAUDITED)
Cash and cash equivalents $40,455 $25,143
Investment in real estate, net 1,932,126 1,966,845
Investment in unconsolidated entities 342,935 230,022
Total Assets 2,404,779 2,322,056
Mortgage and notes payable 1,399,727 1,345,718
Convertible debentures 161,400 161,400
Additional financial data as
of December 31, 1999
Occupancy of centers (h) 92.80%
Year to date increase in
comparable tenant sales (h) (i) 3.60%
(h) excludes redevelopment properties -
Pacific View Mall, Crossroads Mall -
Boulder, Huntington Center and Parklane Mall
(i) includes mall and freestanding stores
for the three for the twelve
months ended months ended
RECONCILIATION OF NET
INCOME TO FFO December 31 December 31
(UNAUDITED) (UNAUDITED)
1999 1998 1999 1998
Net income -- available
to common stockholders 83,866 13,760 110,873 32,528
Adjustments to reconcile net
income to FFO -- basic
Minority interest 28,540 5,154 38,335 12,902
Loss on early extinguishment
of debt 460 22 1,478 2,435
(Gain ) loss on sale of
wholly owned assets (95,819) 0 (95,981) (9)
( Gain) loss on sale or
write-down of assets from
unconsolidated entities
(pro rata) 591 (21) 193 143
Depreciation and amortization on
wholly owned centers 14,949 14,222 61,383 53,141
Depreciation and amortization on
joint ventures and from the
management companies (pro rata) 5,623 2,898 19,715 10,879
Less: depreciation on personal
property and amortization of loan
costs and interest rate caps (744) (1,075) (4,271) (3,716)
Total FFO -- basic 37,466 34,960 131,725 108,303
Weighted average shares
outstanding -- basic (e) 45,664 45,107 46,130 43,016
Additional adjustment to arrive at
FFO -- diluted Interest expense and
amortization of loan costs on the
debentures (f) 3,162 3,162 12,616 n/a
Preferred stock dividends earned 4,557 4,648 18,138 11,547
Effect of restricted stock grants
and stock options 683 257 1,823 668
FFO -- diluted 45,868 43,027 164,302 120,518
Weighted average shares
outstanding -- diluted (e) (f) 60,409 60,024 60,893 49,686
SOURCE The Macerich Company
CONTACT: Arthur Coppola, President and Chief Executive Officer or Thomas O'Hern, Executive Vice President and Chief Financial Officer of The Macerich Company, 310-394-6000/