SANTA MONICA, Calif., Nov. 8 /PRNewswire-FirstCall/ -- The Macerich Company (NYSE: MAC) today announced results of operations for the quarter and nine months ended September 30, 2005 which included funds from operations ("FFO") per share -- diluted increasing 9% to $1.04 compared to $.95 for the quarter ended September 30, 2004 and increasing to $3.03 for the nine months ended September 30, 2005 compared to $2.73 for the comparable period in 2004. Total FFO -- diluted increased by 11% to $81 million for the quarter compared to $72.9 million for the quarter ended September 30, 2004 and to $234 million for the nine months ended September 30, 2005 compared to $210 million for the comparable period in 2004. 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 per common share-diluted ("EPS") to FFO per share-diluted is included in the financial tables accompanying this press release.
Net income available to common stockholders for the quarter ended September 30, 2005 was $4.1 million or $.07 per share-diluted compared to $17.3 million or $.29 per share-diluted for the quarter ended September 30, 2004. For the nine months ended September 30, 2005 net income available to common stockholders was $29 million or $.49 per share-diluted compared to $53 million or $.89 per share-diluted for the nine months ended September 30, 2004. A reconciliation of net income to FFO is included in the financial highlights section of this press release.
Recent highlights:
- During the quarter, Macerich signed 355,000 square feet of specialty store leases at average initial rents of $37.20 per square foot. First year rents on mall and freestanding store leases signed during the quarter were 22% higher than average expiring rents.
- This quarter's FFO per diluted share increased 9% to $1.04 from $.95 for the quarter ended September 30, 2004.
- Total same center tenant sales, for the quarter ended September 30, 2005, were up 7.0% compared to sales levels for the quarter ended September 30, 2004.
- Portfolio occupancy at September 30, 2005 was 93.4% compared to 91.8% at September 30, 2004. On a same center basis occupancy increased to 92.9% at September 30, 2005 compared to 92.4% at September 30, 2004.
- Same center earnings before interest, taxes, depreciation and amortization were up 3.6% compared to the quarter ended September 30, 2004.
Commenting on results, Arthur Coppola president and chief executive officer of Macerich stated, "The quarter was highlighted by another quarter of solid growth in FFO per share. We continue to see strong fundamentals in our business with very strong occupancy levels and leasing activity combined with solid tenant sales increases that year to date have exceeded 6.5%. Our substantial redevelopment and development pipelines continue to progress well and we expect them to fuel our FFO growth in the years to come. An example of this is the $135 million expansion of Tysons Corner Center that was completed in late September where we will see the economic benefit starting in the fourth quarter."
Redevelopment and Development Activity
At Washington Square in suburban Portland, the Company is completing a lifestyle oriented expansion project which consists of the addition of 76,000 square feet of shop space. The expansion is underway with the grand opening of the expansion scheduled for November 18, 2005. New tenants include Cheesecake Factory, Pottery Barn Kids, Williams-Sonoma, Bebe, Godiva and Papyrus. In addition, an agreement has been reached with Mervyn's to recapture their 100,000 square foot location and recycle that square footage over the next two years.
At Fresno Fashion Fair, an 87,000 square foot lifestyle center expansion to the existing mall continues on schedule with sections opening in the fourth quarter 2005 and final completion expected in spring 2006. Illustrative new tenants in the expansion include Anthropologie, Bebe, Bebe Sport, Cheesecake Factory, Chico's, Fleming's Steakhouse and Lucky Brand Jeans.
Now under construction on the site of the former Crossroads Mall, Twenty Ninth Street will be an outdoor retail development on 62 acres in the heart of Boulder. Five new merchants were recently named for Twenty Ninth Street, including Puma, J.Jill, Ann Taylor Loft, Acorn and Francesca's Collection joining anchors Macy's department store, Wild Oats, Home Depot, and Century Theatres and an array of specialty stores and restaurants. Twenty Ninth Street is scheduled to open in fall 2006.
The 364,000 square foot expansion of the recently acquired Tysons Corner Center opened on September 29, 2005. The expansion is currently 97% leased. Included in the expansion is a 105,000 square foot, state of the art, 16-screen AMC theatre complex, five exclusive restaurants including Coastal Flats, Brio Tuscan Grille, Pauli Moto's Asian Bistro, Gordon Biersch, and T.G.I. Friday's. In addition, the expansion features a two-level, 33,700 square foot Barnes & Noble and a 10-unit 800 seat food court. Notable tenants include Z Gallerie, West Elm, H by Tommy Hilfiger, Banana Republic Petites, Esprit, Sony Style, The North Face, Urban Outfitters, Guess, Mexx, Lucky Brand Jeans, Free People and Oakley. Also at Tysons Corner Center, the entitlement process is underway to further expand the project with the addition of approximately 3 million square feet of office, residential and mixed use high-rise development.
Construction will begin in the first quarter of 2006 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 1.5 million square feet on 120 acres. The center will be anchored by Dillard's, Harkins Theatres and will contain a lifestyle shopping district featuring retail, office, residential and restaurants. It is also anticipated that an additional department store will also anchor this center. The project is scheduled to open in phases starting in fall 2007 with all phases completed by 2008.
Plans for Estrella Falls, a major regional shopping center and mixed use project, have been accelerated. The project is located on approximately 300 acres in Goodyear, Arizona. The Company will develop the regional mall, which will consist of approximately 1.2 million square feet, and will co-develop associated commercial uses surrounding the shopping center. The first phase of this project is anticipated to open in 2008 with completion of the mall in 2009.
Financing Activity
The Company has refinanced the mortgage on Flagstaff Mall. The former mortgage of $13 million with interest at 7.8% was replaced with a $37 million 10-year fixed rate loan bearing interest at 4.97%.
The $72 million loan secured by Greece Ridge Mall in Rochester, New York is being refinanced with a drop in the interest rate from LIBOR plus 2.625% down to LIBOR plus .65%, nearly a 198 basis point reduction. The transaction is expected to close in November.
The $30.6 million mortgage on Camelback Colonnade was refinanced with a $41.5 million 5-year loan bearing interest at LIBOR plus .69%.
A $56 million loan was placed on Scottsdale 101 and the proceeds were used to pay off the $40 million construction loan. The new loan reduced the interest rate by 75 basis points to LIBOR plus 1.25%.
Earnings Guidance
Management is tightening its previously issued guidance range for 2005 FFO per share and modifying its guidance for EPS.
Guidance for 2005 and reconciliation of EPS to FFO per share and to EBITDA
per share:
Range per share:
Fully Diluted EPS $.87.......$.93
Plus: Real Estate Depreciation
and Amortization $3.59......$3.59
Less: other items including
gain on asset sales ($.12).....($.12)
Fully Diluted FFO per share $4.34......$4.40
Plus: Interest Expense
per share $4.48......$4.48
Plus: effect of preferred
stock dividends $.37.......$.37
Plus: Non real estate depreciation,
income taxes and ground rent
expense per share $.29.......$.29
EBITDA per share $9.48......$9.54
The guidance is based on a large number of assumptions and management's current view of the current market conditions in the regional mall business. Due to the uncertainty in the timing and economics of acquisitions and dispositions, the guidance ranges do not include any potential property acquisitions or dispositions other than those that have closed or are under contract as of November 8, 2005. The Company is not able to assess at this time the potential impact of such exclusions on future EPS and FFO. FFO does not include gains or losses on sales of depreciated operating assets.
The Macerich Company 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 82% 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 75 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 8, 2005 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 at www.macerich.com will be available for one year 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, 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, for a discussion of such risks and uncertainties.
(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 Three For the Three
Results of Operations: Months Ended Months Ended
September 30, September 30,
Unaudited
2005 2004 2005 2004
Minimum Rents $123,938 $84,028 ($1,686) ($2,630)
Percentage Rents 5,291 3,338 (6) (114)
Tenant Recoveries 66,445 37,194 (916) (1,245)
Management Companies (c) 6,921 5,642 -- --
Other Income 5,505 3,858 (69) (64)
Total Revenues 208,100 134,060 (2,677) (4,053)
Shopping center and
operating expenses 70,734 37,907 (1,196) (1,990)
Management Companies'
operating expenses (c) 11,748 7,130 -- --
Depreciation and amortization 57,941 35,644 (759) (973)
General, administrative and
other expenses 3,420 2,788 -- --
Interest expense 71,354 37,507 -- (67)
Loss on early extinguishment
of debt -- 1,237 -- --
Gain (loss) on sale or
writedown of assets 10 (101) -- (11)
Pro rata income (loss) of
unconsolidated entities (c) 18,831 12,090 -- --
Income (loss) of the
Operating Partnership from
continuing operations 11,744 23,836 (722) (1,034)
Discontinued Operations:
Gain (loss) on sale of
asset -- -- -- 11
Income from discontinued
operations -- -- 722 1,023
Income before minority
interests 11,744 23,836 -- --
Income allocated to minority
interests 1,406 4,180 -- --
Net income before preferred
dividends 10,338 19,656 -- --
Preferred dividends (a) 6,274 2,358 -- --
Net income to common
stockholders $4,064 $17,298 $0 $0
Average number of shares
outstanding - basic 59,247 58,673
Average shares outstanding,
assuming full conversion
of OP Units (d) 73,660 73,209
Average shares outstanding -
diluted for FFO (d) 77,633 76,837
Per share income- diluted
before discontinued
operations -- --
Net income per share-basic $0.07 $0.29
Net income per share- diluted $0.07 $0.29
Dividend declared per share $0.65 $0.61
Funds from operations "FFO"
(b)(d) - basic 78,264 70,529
Funds from operations "FFO"
(a)(b)(d) - diluted 81,090 72,887
FFO per share - basic (b)(d) $1.07 $0.97
FFO per share -
diluted (a)(b)(d) $1.04 $0.95
percentage change
Results after
SFAS 144 (e)
Results of Operations: For the Three Months
Ended September 30,
Unaudited
2005 2004
Minimum Rents $122,252 $81,398
Percentage Rents 5,285 3,224
Tenant Recoveries 65,529 35,949
Management Companies (c) 6,921 5,642
Other Income 5,436 3,794
Total Revenues 205,423 130,007
Shopping center and operating
expenses 69,538 35,917
Management Companies'
operating expenses (c) 11,748 7,130
Depreciation and amortization 57,182 34,671
General, administrative and
other expenses 3,420 2,788
Interest expense 71,354 37,440
Loss on early extinguishment
of debt -- 1,237
Gain (loss) on sale or
writedown of assets 10 (112)
Pro rata income (loss) of
unconsolidated entities (c) 18,831 12,090
Income (loss) of the
Operating Partnership from
continuing operations 11,022 22,802
Discontinued Operations:
Gain (loss) on sale of
asset -- 11
Income from discontinued
operations 722 1,023
Income before minority
interests 11,744 23,836
Income allocated to minority
interests 1,406 4,180
Net income before preferred
dividends 10,338 19,656
Preferred dividends (a) 6,274 2,358
Net income to common
stockholders $4,064 $17,298
Average number of shares
outstanding - basic 59,247 58,673
Average shares outstanding,
assuming full conversion of
OP Units (d) 73,660 73,209
Average shares outstanding -
diluted for FFO (d) 77,633 76,837
Per share income- diluted
before discontinued operations $0.06 $0.28
Net income per share-basic $0.07 $0.29
Net income per share- diluted $0.07 $0.29
Dividend declared per share $0.65 $0.61
Funds from operations "FFO"
(b)(d)- basic 78,264 70,529
Funds from operations "FFO"
(a)(b)(d) - diluted 81,090 72,887
FFO per share -
basic b)(d) $1.07 $0.97
FFO per share -
diluted (a)(b)(d) $1.04 $0.95
percentage change 9.95%
THE MACERICH COMPANY
FINANCIAL HIGHLIGHTS
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
Results before Impact of
SFAS 144 (e) SFAS 144 (e)
For the Nine For the Nine
Results of Operations: Months Ended Months Ended
September 30, September 30,
Unaudited
2005 2004 2005 2004
Minimum Rents $335,391 $240,101 ($5,173) ($8,150)
Percentage Rents 11,164 8,165 (50) (233)
Tenant Recoveries 169,811 120,035 (2,793) (3,894)
Management Companies (c) 18,362 15,656 -- --
Other Income 16,684 12,767 (214) (361)
Total Revenues 551,412 396,724 (8,230) (12,638)
Shopping center and operating
expenses 179,640 119,150 (3,585) (4,907)
Management Companies'
operating expenses (c) 35,086 26,280 -- --
Depreciation and amortization 149,767 105,256 (2,172) (3,410)
General, administrative and
other expenses 9,937 8,084 -- --
Interest expense 175,636 105,595 (7) (115)
Loss on early extinguishment
of debt -- 1,642 -- --
Gain (loss) on sale or
writedown of assets 1,474 994 (297) (313)
Pro rata income (loss) of
unconsolidated entities (c) 46,416 40,250 -- --
Income (loss) of the
Operating Partnership from
continuing operations 49,236 71,961 (2,763) (4,519)
Discontinued Operations:
Gain (loss) on sale of
asset -- -- 297 313
Income from discontinued
operations -- -- 2,466 4,206
Income before minority
interests 49,236 71,961 -- --
Income allocated to minority
interests 7,085 12,650 -- --
Net income before preferred
dividends 42,151 59,311 -- --
Preferred dividends (a) 13,197 6,783 -- --
Net income to common
stockholders $28,954 $52,528 $0 $0
Average number of shares
outstanding - basic 59,073 58,479
Average shares outstanding,
assuming full conversion
of OP Units (d) 73,522 73,053
Average shares outstanding -
diluted for FFO (d) 77,349 76,681
Per share income- diluted
before discontinued
operations -- --
Net income per share-basic $0.49 $0.90
Net income per share- diluted $0.49 $0.89
Dividend declared per share $1.95 $1.83
Funds from operations "FFO"
(b)(d) - basic 226,569 202,835
Funds from operations "FFO"
(a)(b)(d) - diluted $234,110 $209,618
FFO per share -
basic (b)(d) $3.10 $2.79
FFO per share -
diluted (a)(b)(d) $3.03 $2.73
percentage change
Results after
SFAS 144 (e)
Results of Operations: For the Nine Months
Ended September 30,
Unaudited
2005 2004
Minimum Rents $330,218 $231,951
Percentage Rents 11,114 7,932
Tenant Recoveries 167,018 116,141
Management Companies (c) 18,362 15,656
Other Income 16,470 12,406
Total Revenues 543,182 384,086
Shopping center and operating
expenses 176,055 114,243
Management Companies'
operating expenses (c) 35,086 26,280
Depreciation and amortization 147,595 101,846
General, administrative and
other expenses 9,937 8,084
Interest expense 175,629 105,480
Loss on early extinguishment
of debt -- 1,642
Gain (loss) on sale or
writedown of assets 1,177 681
Pro rata income (loss) of
unconsolidated entities (c) 46,416 40,250
Income (loss) of the
Operating Partnership from
continuing operations 46,473 67,442
Discontinued Operations:
Gain (loss) on sale of
asset 297 313
Income from discontinued
operations 2,466 4,206
Income before minority
interests 9,236 71,961
Income allocated to minority
interests 7,085 12,650
Net income before preferred
dividends 42,151 59,311
Preferred dividends (a) 13,197 6,783
Net income to common
stockholders $28,954 $52,528
Average number of shares
outstanding - basic 59,073 58,479
Average shares outstanding,
assuming
full conversion of OP
Units (d) 73,522 73,053
Average shares outstanding -
diluted for FFO (d) 77,349 76,681
Per share income- diluted
before discontinued
operations - $0.45 $0.83
Net income per share-basic $0.49 $0.90
Net income per share- diluted $0.49 $0.89
Dividend declared per share $1.95 $1.83
Funds from operations "FFO"
(b)(d)- basic 226,569 202,835
Funds from operations "FFO"
(a)(b)(d) - diluted 234,110 209,618
FFO per share-
basic (b)(d) $3.10 $2.79
FFO per share -
diluted (a)(b)(d) $3.03 $2.73
percentage change 10.87%
(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 for 2005 and 2004 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 peripheral
land and the impact of SFAS 141 have been included in FFO. The
inclusion of gains on sales of peripheral land increased FFO for the
three and nine months ended September 30, 2005 and 2004 by $1.3
million, $3.2 million, $0.5 million and $3.0 million, respectively,
or by $.02 per share, $.04 per share, $.01 per share and $.04 per
share, respectively. Additionally, SFAS 141 increased FFO for the
three and nine months ended September 30, 2005 and 2004 by $4.8
million, $10.9 million, $4.2 million and $7.9 million, respectively
or by $.06 per share, $.14 per share, $.05 per share and $.10 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. Certain reclassifications
have been made in the 2004 financial highlights to conform to the
2005 financial highlights presentation.
(d) The Macerich Partnership, LP 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.
(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 December 17, 2004, the Company sold Westbar and
the results for the three and nine months ended September 30, 2004
have been reclassified to discontinued operations. The sale of
Westbar resulted in a gain on sale of $6.8 million. On January 5,
2005, the Company sold Arizona Lifestyle Galleries and the results
for the three and nine months ended September 30, 2004 have been
reclassified to discontinued operations. The sale of this property
resulted in a gain on sale of $0.3 million. Additionally, the
results of Crossroads Mall in Oklahoma for the three and nine months
ended September 30, 2005 and 2004 have been reclassified to
discontinued operations as the Company has identified this asset for
disposition.
THE MACERICH COMPANY
FINANCIAL HIGHLIGHTS
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
Summarized Balance Sheet September 30, December 31,
Information 2005 2004
(UNAUDITED)
Cash and cash equivalents $68,217 $72,114
Investment in real estate, net
(h) $5,409,852 $3,574,553
Investments in unconsolidated
entities (i) $1,072,034 $618,523
Total Assets $7,063,037 $4,637,096
Mortgage and notes payable $5,292,345 $3,230,120
Pro rata share of debt on
unconsolidated entities $1,411,770 $1,147,268
September 30, September 30,
Additional financial data as of: 2005 2004
Occupancy of centers (f) 93.40% 91.80%
Comparable quarter change in
same center sales (f) (g) 7.00% 5.50%
Additional financial data for
the nine months ended:
Acquisitions of property and
equipment - including joint
ventures prorata $2,476,820 $197,313
Redevelopment and expansions of
centers - including joint
ventures prorata $114,648 $118,545
Renovations of centers -
including joint ventures at
prorata $44,916 $22,847
Tenant allowances- including
joint ventures at prorata $22,074 $11,437
Deferred leasing costs-
including joint ventures at
prorata $19,939 $13,825
(f) excludes redevelopment properties- 29th Street Center, Parklane
Mall, Santa Monica Place
(g) includes mall and freestanding stores.
(h) includes construction in process on wholly owned assets of $146,054
at September 30, 2005 and $88,228 at December 31, 2004.
(i) includes the Company's prorata share of construction in process on
unconsolidated entities of $97,020 at September 30, 2005 and
$32,047 at December 31, 2004.
PRORATA SHARE OF JOINT For the Three For the Nine
VENTURES Months Ended Months Ended
September 30, September 30,
(UNAUDITED) (UNAUDITED)
(All amounts in (All amounts in
(Unaudited) thousands) thousands)
2005 2004 2005 2004
Revenues:
Minimum rents $54,310 $45,794 $150,130 $128,786
Percentage rents 2,391 1,725 5,942 4,454
Tenant recoveries 23,909 19,544 65,846 55,999
Other 2,910 1,496 8,665 4,772
Total revenues 83,520 68,559 230,583 194,011
Expenses:
Shopping center
expenses 28,685 23,046 76,650 67,257
Interest expense 16,823 17,906 54,128 47,936
Depreciation and
amortization 20,495 15,854 55,243 40,988
Total operating
expenses 66,003 56,806 186,021 156,181
Gain on sale or writedown
of assets 1,321 498 1,861 2,581
Loss on early
extinguishment of debt (7) (161) (7) (161)
Net income 18,831 12,090 46,416 40,250
THE MACERICH COMPANY
FINANCIAL HIGHLIGHTS
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
For the Three For the Nine
RECONCILIATION OF NET Months Ended Months Ended
INCOME TO FFO (b)(e) September 30, September 30,
(UNAUDITED) (UNAUDITED)
(All amounts in (All amounts in
thousands) thousands)
2005 2004 2005 2004
Net income - available to
common stockholders $4,064 $17,298 $28,954 $52,528
Adjustments to reconcile net
income to FFO- basic
Minority interest 1,406 4,180 7,085 12,650
(Gain ) loss on sale of
wholly owned assets (10) 101 (1,474) (994)
plus gain on land sales-
consolidated assets -- 5 1,307 339
(Gain) loss on sale or
write-down of assets from
unconsolidated entities
(pro rata share) (1,321) (498) (1,861) (2,581)
plus gain on land sales-
unconsolidated assets 1,323 533 1,867 2,616
Depreciation and
amortization on
consolidated assets 57,941 35,644 149,767 105,256
Less depreciation and
amortization allocable to
minority interests (1,787) -- (3,612) --
Depreciation
and amortization on joint
ventures (pro rata) 20,495 15,854 55,243 40,988
Less: depreciation on
personal property and
amortization of loan costs
and interest rate caps (3,847) (2,588) (10,707) (7,967)
Total FFO - basic 78,264 70,529 226,569 202,835
Additional adjustment to
arrive at FFO - diluted
Preferred stock dividends
earned 2,503 2,358 7,218 6,783
Non-Participating
Preferred units - dividends 323 n/a 323 n/a
Participating Preferred
units - dividends n/a - antidilutive n/a - antidilutive
FFO - diluted 81,090 72,887 234,110 209,618
For the Three For the Nine
Months Ended Months Ended
September 30, September 30,
(UNAUDITED) (UNAUDITED)
(All amounts in (All amounts in
thousands) thousands)
Reconciliation of EPS to FFO
per diluted share: 2005 2004 2005 2004
Earnings per share $0.07 $0.29 $0.49 $0.89
Per share impact of
depreciation and
amortization real estate $0.99 $0.67 $2.60 $1.90
Per share impact of gain on
sale of depreciated assets $0.00 $0.00 $0.00 ($0.01)
Per share impact of
preferred stock not dilutive
to EPS ($0.02) ($0.01) ($0.06) ($0.05)
Fully Diluted FFO per share $1.04 $0.95 $3.03 $2.73
THE MACERICH COMPANY For the Three For the Nine
RECONCILIATION OF NET Months Ended Months Ended
INCOME TO EBITDA September 30, September 30,
(UNAUDITED) (UNAUDITED)
(All amounts in (All amounts in
thousands) thousands)
2005 2004 2005 2004
Net income - available to
common stockholders $4,064 $17,298 $28,954 $52,528
Interest expense 71,354 37,507 175,636 105,595
Interest expense -
unconsolidated entities
(pro rata) 16,823 17,906 54,128 47,936
Depreciation and
amortization - wholly-
owned centers 57,941 35,644 149,767 105,256
Depreciation and
amortization -
unconsolidated entities
(pro rata) 20,495 15,854 55,243 40,988
Minority interest 1,406 4,180 7,085 12,650
Less: Interest expense
and depreciation and
amortization allocable
to minority interests
on consolidated assets (2,243) -- (4,400) --
Loss on early
extinguishment of debt -- 1,237 -- 1,642
Loss on early
extinguishment of debt -
unconsolidated entities
(pro rata) 7 161 7 161
Loss (gain) on sale of
assets - wholly-owned
centers (10) 101 (1,474) (994)
Loss (gain) on sale of
assets - unconsolidated
entities (pro rata) (1,321) (498) (1,861) (2,581)
Preferred dividends 6,274 2,358 13,197 6,783
EBITDA(j) $174,790 $131,748 $476,282 $369,964
THE MACERICH COMPANY
FINANCIAL HIGHLIGHTS
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
THE MACERICH COMPANY
RECONCILIATION OF EBITDA TO SAME CENTERS -- NET OPERATING INCOME ("NOI")
For the Three For the Nine
Months Ended Months Ended
September 30, September 30,
(UNAUDITED) (UNAUDITED)
(All amounts in (All amounts in
thousands) thousands)
2005 2004 2005 2004
EBITDA (j) $174,790 $131,748 $476,282 $369,964
Add: REIT general and
administrative expenses 3,420 2,788 9,937 8,084
Management Companies'
revenues (c) (6,921) (5,642) (18,362) (15,656)
Management Companies'
operating expenses (c) 11,748 7,130 35,086 26,280
EBITDA of non-comparable
centers (64,363) (21,431) (153,487) (49,446)
SAME CENTERS - Net
operating income
("NOI") (k) $118,674 $114,593 $349,456 $339,226
(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 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
Web site: http://www.earnings.com
Web site: http://www.macerich.com