SANTA MONICA, Calif.,
Results included:
* During the quarter,
* Mall tenant sales per square foot decreased to
* Mall occupancy at
* FFO per share-diluted for the year ended
Commenting on results,
Redevelopment Activity
Construction continues on Santa Monica Place, a regional shopping center
under development in Santa Monica,
At Scottsdale Fashion Square, construction on an approximately 160,000-
square-foot expansion continues on schedule toward a fall 2009 opening. The
expansion will be anchored by a 60,000-square-foot Barneys New York. In
addition, recently signed fashion retailers
Also during the quarter, the Company wrote off
Financing Activity
In December, 2008, the Company closed on a
During 2008 the Company completed 13 financing transactions with its pro-
rata share of the loan proceeds being nearly
Loan transactions completed or underway for 2009 include the recent
closing of a
In addition, the Company has obtained a commitment for a
During the fourth quarter the Company opportunistically retired
Earnings Guidance
Management is providing guidance for both FFO per share-diluted and EPS
for 2009. The FFO guidance of
The following table provides the reconciliation of the range of estimated EPS to estimated FFO per diluted-share.
For the year ended December 31, 2009 Low End High End Estimated EPS $.54 $.79 Depreciation and amortization including pro rata share of joint ventures 3.96 3.96 Estimated diluted FFO per share $4.50 $4.75 Plus: Interest Expense 4.03 4.03 Plus: Non real estate depreciation, amortization of loan costs, income Taxes and less gain on sale of undepreciated assets .12 .12 Net operating income per share $8.65 $8.90
The Company's 2009 earnings guidance is based upon its internal forecasting and planning process and on many assumptions including management's current view of market and economic conditions, including those specifically impacting the regional mall business. Due to the uncertainty in the timing and economics of dispositions and acquisitions of assets and joint venture interests, the guidance ranges do not include any potential impact from such dispositions or acquisitions.
The
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 http://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 (e) SFAS 144 (e) SFAS 144 (e) For the Three Months For the Three Months For the Three Months Ended December 31, Ended December 31, Ended December 31, Unaudited Unaudited 2008 2007 2008 2007 2008 2007 Minimum rents $151,128 $141,881 ($778) ($12,756) $150,350 $129,125 Percentage rents 9,320 15,196 - (538) 9,320 14,658 Tenant recoveries 62,470 67,690 (39) (6,983) 62,431 60,707 Management Companies' revenues 10,382 12,157 - - 10,382 12,157 Other income 9,947 9,231 - (805) 9,947 8,426 Total revenues $243,247 $246,155 ($817) ($21,082) $242,430 $225,073 Shopping center and operating expenses 73,880 73,875 (212) (7,607) 73,668 66,268 Management Companies' operating expenses 19,185 19,579 - - 19,185 19,579 Income tax provision 1,876 8 - - 1,876 8 Depreciation and amortization 93,802 62,626 (342) (4,545) 93,460 58,081 REIT general and administrative expenses 5,101 4,823 - - 5,101 4,823 Interest expense 71,717 68,833 - (2,885) 71,717 65,948 Gain on early extinguishment of debt 95,265 - - - 95,265 - (Loss) gain on sale or write-down of assets (26,421) 7,882 (1,436) 86 (27,857) 7,968 Equity in income of unconsolidated joint ventures (c) 26,659 29,330 - - 26,659 29,330 Minority interests in consolidated joint ventures 207 (5,398) - 4,681 207 (717) Income from continuing operations 73,396 48,225 (1,699) (1,278) 71,697 46,947 Discontinued Operations: Gain (loss) on sale or disposition of assets - - 1,436 (86) 1,436 (86) Income from discontinued operations - - 263 1,364 263 1,364 Income before minority interests of OP 73,396 48,225 - - 73,396 48,225 Income allocated to minority interests of OP 10,165 7,016 - - 10,165 7,016 Net income before preferred dividends 63,231 41,209 - - 63,231 41,209 Preferred dividends (a) - 2,006 - - - 2,006 Adjustment of minority interest due to redemption value - (727) - - - (727) Net income available to common stockholders $63,231 $39,930 $0 $0 $63,231 $39,930 Average number of shares outstanding - basic 76,194 72,195 76,194 72,195 Average shares outstanding, assuming full conversion of OP Units (d) (e) 88,510 84,918 88,510 84,918 Average shares outstanding - Funds From Operations ("FFO") - diluted (a) (d) (e) 88,703 91,165 88,703 91,165 Per share income - diluted before discontinued operations - - $0.81 $0.53 Net income per share - basic $0.83 $0.55 $0.83 $0.55 Net income per share - diluted (a) (e) $0.83 $0.55 $0.83 $0.55 Dividend declared per share $0.80 $0.80 $0.80 $0.80 FFO - basic (b) (d) $184,144 $126,571 $184,144 $126,571 FFO - diluted (a) (b) (d) (e) $184,341 $132,479 $184,341 $132,479 FFO per share - basic (b) (d) $2.08 $1.50 $2.08 $1.50 FFO per share - diluted (a) (b) (d) (e) $2.08 $1.45 $2.08 $1.45 Percentage change vs 2007 43.32% THE MACERICH COMPANY FINANCIAL HIGHLIGHTS (IN THOUSANDS, EXCEPT PER SHARE AMOUNTS) Results of Operations: Results before Impact of Results after SFAS 144 (e) SFAS 144 (e) SFAS 144 (e) For the Twelve Months For the Twelve Months For the Twelve Months Ended December 31, Ended December 31, Ended December 31, Unaudited Unaudited 2008 2007 2008 2007 2008 2007 Minimum rents $547,873 $522,167 ($3,452) ($46,418) $544,421 $475,749 Percentage rents 19,092 26,894 - (790) 19,092 26,104 Tenant recoveries 267,426 274,091 (541) (28,581) 266,885 245,510 Management Companies' revenues 40,716 39,752 - - 40,716 39,752 Other income 30,724 34,969 (348) (7,770) 30,376 27,199 Total revenues $905,831 $897,873 ($4,341) ($83,559) $901,490 $814,314 Shopping center and operating expenses 288,287 285,350 (1,210) (28,620) 287,077 256,730 Management Companies' operating expenses 77,072 73,761 - - 77,072 73,761 Income tax provision (benefit) 1,126 (470) - - 1,126 (470) Depreciation and amortization 279,339 231,860 (1,512) (19,351) 277,827 212,509 REIT general and administrative expenses 16,520 16,600 - - 16,520 16,600 Interest expense 281,356 263,691 - (13,564) 281,356 250,127 Gain (loss) on early extinguishment of debt 95,265 (877) - - 95,265 (877) Gain (loss) on sale or write-down of assets 68,714 9,771 (100,533) 2,375 (31,819) 12,146 Equity in income of unconsolidated joint ventures (c) 93,831 81,458 - - 93,831 81,458 Minority interests in consolidated joint ventures (1,736) (18,589) - 16,288 (1,736) (2,301) Income from continuing operations 218,205 98,844 (102,152) (3,361) 116,053 95,483 Discontinued Operations: Gain (loss) on sale or disposition of assets - - 100,533 (2,409) 100,533 (2,409) Income from discontinued operations - - 1,619 5,770 1,619 5,770 Income before minority interests of OP 218,205 98,844 - - 218,205 98,844 Income allocated to minority interests of OP 30,765 13,036 - - 30,765 13,036 Net income before preferred dividends 187,440 85,808 - - 187,440 85,808 Preferred dividends (a) 4,124 10,058 - - 4,124 10,058 Adjustment of minority interest due to redemption value - 2,046 - - - 2,046 Net income available to common stock- holders $183,316 $73,704 $0 $0 $183,316 $73,704 Average number of shares outstanding - basic 74,319 71,768 74,319 71,768 Average shares outstanding, assuming full conversion of OP Units (d) (e) 86,794 84,760 86,794 84,760 Average shares outstanding - FFO - diluted (a) (d) (e) 88,446 88,272 88,446 88,272 Per share income - diluted before discontinued operations - - $1.29 $1.01 Net income per share - basic $2.47 $1.03 $2.47 $1.03 Net income per share - diluted (a) (e) $2.47 $1.02 $2.47 $1.02 Dividend declared per share $3.20 $2.93 $3.20 $2.93 FFO - basic (b) (d) $481,338 $397,869 $481,338 $397,869 FFO - diluted (a) (b) (d) (e) $486,441 $407,927 $486,441 $407,927 FFO per share - basic (b) (d) $5.55 $4.71 $5.55 $4.71 FFO per share - diluted (a) (b) (d) (e) $5.50 $4.62 $5.50 $4.62 Percentage change vs 2007 19.01% THE MACERICH COMPANY FINANCIAL HIGHLIGHTS (IN THOUSANDS, EXCEPT SHARE AND PER SHARE AMOUNTS) (a) OnFebruary 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 not assumed converted for purposes of net income per share - diluted for the three and twelve months endedDecember 31, 2008 and for all periods presented for 2007 as they would be antidilutive to the calculation. The weighted average preferred shares are assumed converted for purposes of FFO per share - diluted as they are dilutive to those calculations for all periods presented. OnOctober 18, 2007 , 560,000 shares of convertible preferred stock were converted to common shares. Additionally, onMay 6, 2008 ,May 8, 2008 andSeptember 18, 2008 , 684,000, 1,338,860 and 1,044,271 shares of convertible preferred stock were converted to common shares, respectively. As ofDecember 31, 2008 , there was no convertible preferred stock outstanding. (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. EffectiveJanuary 1, 2003 , 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 twelve months endedDecember 31, 2008 and 2007 by$0.3 million ,$3.8 million ,$10.0 million and$10.8 million , respectively, or by$0.00 per share,$0.04 per share,$0.11 per share and$0.12 per share, respectively. Additionally, SFAS 141 increased FFO for the three and twelve months endedDecember 31, 2008 and 2007 by$14.2 million and$27.4 million ,$3.5 million and$15.1 million , respectively, or by$0.16 per share,$0.31 per share,$0.04 per share and$0.17 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 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 ofMACWH, LP preferred and common units to the extent they are dilutive to the calculation. For the three and twelve months endedDecember 31, 2008 and for the three months endedDecember 31, 2007 , theMACWH, LP preferred units outstanding were dilutive to FFO. (e) InOctober 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 onJanuary 1, 2002 . OnApril 25, 2005 , in connection with the acquisition ofWilmorite Holdings, L.P. and its affiliates, the Company issued as part of the consideration participating and non-participating convertible preferred units inMACWH, LP . The participating units are not assumed converted for purposes of net income per share and FFO - diluted per share for all periods presented as they would be antidilutive to the calculation. OnJanuary 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 theRochester Redemption , the Company has classified the results of operations from the Rochester Properties to discontinued operations and recorded a gain of$99.3 million for the period endedMarch 31, 2008 . OnDecember 19, 2008 , the Company sold the fee simple and/or ground leasehold interests in three freestandingMervyn's buildings to thePacific 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 and recorded a gain of$1.5 million for the period endedDecember 31, 2008 . THE MACERICH COMPANY FINANCIAL HIGHLIGHTS (IN THOUSANDS, EXCEPT PER SHARE AMOUNTS) Pro rata share of joint ventures: For the Three Months For the Twelve Months Ended December 31, Ended December 31, Unaudited Unaudited 2008 2007 2008 2007 Revenues: Minimum rents $70,398 $63,634 $272,660 $250,220 Percentage rents 6,881 8,408 14,142 15,733 Tenant recoveries 33,480 30,868 130,552 118,798 Other 5,122 3,517 22,493 14,840 Total revenues $115,881 $106,427 $439,847 $399,591 Expenses: Shopping center and operating expenses 41,444 33,100 149,844 130,294 Interest expense 26,269 25,640 104,119 100,383 Depreciation and amortization 22,115 21,197 96,441 88,807 Total operating expenses 89,828 79,937 350,404 319,484 Gain on sale or write-down of assets 160 2,424 3,432 400 Equity in income of joint ventures 446 416 956 951 Net income $26,659 $29,330 $93,831 $81,458 Reconciliation of Net Income to FFO (b): For the Three Months For the Twelve Months Ended December 31, Ended December 31, Unaudited Unaudited 2008 2007 2008 2007 Net income - available to common stockholders $63,231 $39,930 $183,316 $73,704 Adjustments to reconcile net income to FFO - basic Minority interest in OP 10,165 7,016 30,765 13,036 Loss (gain) on sale or write-down of consolidated assets 26,421 (7,882) (68,714) (9,771) Adjustment of minority interest due to redemption value - (727) - 2,046 plus gain on undepreciated asset sales - consolidated assets - 7,596 798 8,047 plus minority interest share of (loss) gain on sale or write-down of consolidated joint ventures (404) 373 185 760 less write-down of consolidated assets (27,445) - (27,445) - Gain on sale or write-down of assets from unconsolidated entities (pro rata share) (160) (2,424) (3,432) (400) plus gain on undepreciated asset sales - unconsolidated entities (pro rata share) 274 2,447 3,039 2,793 plus minority interest share of gain on sale of unconsolidated entities - - 487 - less write-down of assets - unconsolidated entities (pro rata share) (94) - (94) - Depreciation and amortization on consolidated assets 93,802 62,626 279,339 231,860 Less depreciation and amortization allocable to minority interests on consolidated joint ventures (968) (1,424) (3,395) (4,769) Depreciation and amortization on joint ventures (pro rata) 22,115 21,197 96,441 88,807 Less: depreciation on personal property (2,793) (2,157) (9,952) (8,244) Total FFO - basic $184,144 $126,571 $481,338 $397,869 Additional adjustment to arrive at FFO - diluted Preferred stock dividends earned - 2,006 4,124 10,058 Preferred units - dividends 197 3,902 979 antidilutive Total FFO - diluted $184,341 $132,479 $486,441 $407,927 Reconciliation of EPS to FFO per diluted share: For the Three Months For the Twelve Months Ended December 31, Ended December 31, Unaudited Unaudited 2008 2007 2008 2007 Earnings per share - diluted $0.83 $0.55 $2.47 $1.02 Per share impact of depreciation and amortization of real estate 1.27 0.95 4.17 3.63 Per share impact of (gain) loss on sale or write-down of depreciated assets (0.02) 0.00 (1.12) 0.03 Per share impact of preferred stock not dilutive to EPS - (0.04) (0.02) (0.08) Per share impact of adjustment of minority interest due to redemption value - (0.01) - 0.02 FFO per share - diluted $2.08 $1.45 $5.50 $4.62 THE MACERICH COMPANY FINANCIAL HIGHLIGHTS (IN THOUSANDS, EXCEPT PER SHARE AMOUNTS) Reconciliation of Net Income to EBITDA: For the Three Months For the Twelve Months Ended December 31, Ended December 31, Unaudited Unaudited 2008 2007 2008 2007 Net income - available to common stockholders $63,231 $39,930 $183,316 $73,704 Interest expense - consolidated assets 71,717 68,833 281,356 263,691 Interest expense - unconsolidated entities (pro rata) 26,269 25,640 104,119 100,383 Depreciation and amortization - consolidated assets 93,802 62,626 279,339 231,860 Depreciation and amortization - unconsolidated entities (pro rata) 22,115 21,197 96,441 88,807 Minority interest in OP 10,165 7,016 30,765 13,036 Adjustment of minority interest due to redemption value - (727) - 2,046 Less: Interest expense and depreciation and amortization allocable to minority interests on consolidated joint ventures (1,721) (1,717) (5,344) (6,386) (Gain) loss on early extinguishment of debt (95,265) - (95,265) 877 Loss (gain) on sale or write-down of assets - consolidated assets 26,421 (7,882) (68,714) (9,771) Gain on sale or write-down of assets - unconsolidated entities (pro rata) (160) (2,424) (3,432) (400) Add: Minority interest share of gain on sale of consolidated joint ventures (404) 373 185 760 Add: Minority interest share of gain on sale of unconsolidated entities - - 487 - Income tax expense (benefit) 1,876 8 1,126 (470) Distributions on preferred units 197 3,902 979 14,821 Preferred dividends - 2,006 4,124 10,058 EBITDA (f) $218,243 $218,781 $809,482 $783,016 Reconciliation of EBITDA to Same Centers - Net Operating Income ("NOI"): For the Three Months For the Twelve Months Ended December 31, Ended December 31, Unaudited Unaudited 2008 2007 2008 2007 EBITDA (f) $218,243 $218,781 $809,482 $783,016 Add: REIT general and administrative expenses 5,101 4,823 16,520 16,600 Management Companies' revenues (10,382) (12,157) (40,716) (39,752) Management Companies' operating expenses 19,185 19,579 77,072 73,761 Lease termination income of comparable centers (1,678) (1,122) (10,341) (11,553) EBITDA of non-comparable centers (41,680) (36,430) (150,301) (130,053) Same Centers - NOI (g) $188,789 $193,474 $701,716 $692,019 (f) 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. (g) 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
both of The
Web site: http://www.macerich.com/