SANTA MONICA, Calif., May 14 /PRNewswire/ --The Macerich Company (NYSE: MAC) today announced results of operations for the quarter ended March 31, 2001 which included the following:
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Funds from operations ("FFO") per share - diluted increased to $.65 from $.63 for the first quarter of 2000.
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Total same center tenant sales increased by 3.4% for the quarter compared to the comparable period ended March 31, 2000.
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During the quarter, Macerich signed 468,000 square feet of new leases at average initial rents of $29.80 per square foot. First year rents on mall and freestanding store leases signed during the quarter were 21% higher than expiring rents on a comparable space basis.
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Portfolio occupancy increased to 92.5% compared to 92.3% at March 31, 2000.
Commenting on results for the quarter, Arthur Coppola, President and Chief Executive Officer of Macerich stated, "The quarter was highlighted by good leasing activity and stable occupancy levels. During the quarter, releasing spreads, on a comparable space basis, were up 21%. Our same center net operating income grew by 3.3% and we continued to improve our balance sheet with some attractive long-term, fixed rate, financing transactions. Our long-term view of our prospects for continued growth in our portfolio remains positive."
Operating Results for the Quarter Ended March 31, 2001
Total revenues were $77.8 million for the quarter, compared to $75.3 million for the quarter ended March 31, 2000. The pro rata income of unconsolidated entities was $6.1 million for the quarter ended March 31, 2001 compared to $6.7 million for the same period in 2000. Included in revenues are rents attributable to the accounting practice of straight lining of rents. The amount of straight lined rents, including joint ventures at pro rata, decreased to $494,000 in the quarter compared to $782,000 during the quarter ended March 31, 2000. This decrease resulted primarily from the Company structuring the majority of its new leases using annual CPI increases, which generally do not require straight lining treatment. This approach of using CPI increases results in revenue recognition that more closely matches the cash flow from the lease and provides more consistent rent growth throughout the life of the lease. Same center net operating income, including the prorata share of joint ventures, increased by 3.3% during the quarter ended March 31, 2001 compared to the same period in 2000. Also, lease termination revenue recorded in minimum rent, including joint ventures at their pro-rata share, decreased to $425,000 in the quarter compared to $1.1 million in the quarter ended March 31, 2000.
For the quarter ended March 31, 2001, FFO-diluted was $38.1 million compared to $37.8 million during the first quarter of 2000. Net income available to common stockholders for the quarter was $6.4 million compared to $6.3 million for the first quarter of 2000 and net income per share diluted was $.19 compared to $.19 for the first quarter of 2000.
Highlights
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In the quarter, approximately 468,000 square feet of leases were signed for mall and freestanding space. The average rent on new leases executed in the first quarter was $29.80 per square foot. On a comparable space basis, new leases were signed during the quarter at initial rents approximately 21% higher than expiring rents.
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Total same center sales increased 3.4% for the quarter compared to the first quarter of 2000 and on a comparable tenant basis, sales increased 1.7% compared to the first quarter of 2000.
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At Lakewood Mall, the $35 million expansion of the mall was completed. The expansion included the first new Macys store ever built in Southern California. In addition, the $35 million redevelopment included the relocation of Mervyn's to a new store that opened in August and the development of an additional 60,000 square feet of shop space plus a food court. The expansion space is currently 92% leased.
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On May 11, 2001, the Company declared a quarterly dividend of $.53 per share on its common and preferred stock, payable on June 8, 2001 to stockholders of record on May 18, 2001. Annualized, based on the recent share price, this represents a dividend yield in excess of 9%. The Company has increased its dividend each year since becoming a public company in 1994.
Refinancing Activity
During the first quarter, the Company refinanced its $150 million line of credit. The new line of credit matures in May 2002 with a one-year extension option subject to certain terms and conditions. The interest rate ranges from LIBOR plus 1.35% to 1.80%, depending on leverage level.
Also during the quarter, the Company committed to refinance the loan on Capitola Mall. The former $36.5 million loan, bearing interest at 9.25% was refinanced with a $48.5 million, 10 year fixed rate loan with interest at 7.13%, which closed on May 2nd. The Company has no remaining year 2001 loan maturities.
The Company has also committed to a $96 million, 10 year, 7.16% fixed rate permanent loan on Pacific View Mall. This loan will repay the current construction loan of $89.3 million, which bears interest at LIBOR plus 1.75%.
The Macerich Company is a fully integrated self-managed and self- administered real estate investment trust, which acquires, leases, manages and redevelops regional malls and community centers throughout the United States. The Company is the sole general partner and owns a 79% ownership interest in The Macerich Partnership, L.P. Macerich owns interests in 46 regional malls and five community centers totaling over 42 million square feet. Additional information about The Macerich Company can be obtained from the Company's web site at www.macerich.com.
Investor Conference Call
The Company will provide an online Web simulcast and rebroadcast of its quarterly earnings conference call. The call will be available on The Macerich Company's website at www.macerich.com, through Vcall at www.vcall.com, through Street Events at www.streetevents.com and StreetFusion at www.streetfusion.com. The call begins today, May 14, 2001 at 10:00 AM Pacific Time. To listen to the call, please go to any of these web sites at least 15 minutes prior to the call in order to register and download audio software if needed. An online replay will be available for 90 days after the call.
| Note: | This release contains statements that constitute forward-looking |
|---|---|
| statements. Stockholders are cautioned that any such forward-looking | |
| statements are not guarantees of future performance and involve risks, | |
| uncertainties and other factors that may cause actual results, performance or | |
| achievements of the Company to vary materially from those anticipated, | |
| expected or projected. Such factors include, among others, general industry | |
| economic and business conditions, which will, among other things, affect | |
| demand for retail space or retail goods, availability and creditworthiness of | |
| current and prospective tenants, tenant bankruptcies, lease rates and terms, | |
| availability and cost of financing, operating expenses and interest rate | |
| fluctuations; adverse changes in the real estate markets including, among | |
| other things, competition from other companies, retail formats and technology, | |
| risks of real estate development, acquisitions and dispositions; 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 months ended
March 31
(UNAUDITED)
2001 2000
Minimum Rents 48,665 47,175
Percentage Rents 1,848 1,532
Tenant Recoveries 24,803 24,569
Other Income 2,447 2,027
Total Revenues 77,763 75,303
Shopping Center Expenses 24,151 23,900
Depreciation and amortization 16,104 14,528
General, administrative and other expenses 1,682 1,469
Interest expense 27,996 28,151
Gain (loss) on sale of assets (321) (2)
Pro rata income of unconsolidated entities (b) 6,055 6,723
Income before minority interest,
extraordinary items and cumulative effect
of change in accounting principle 13,564 13,976
Extraordinary loss on early extinguishment
of debt (186) 0
Cumulative effect of change in accounting
principle (e) 0 (963)
Income of the Operating Partnership 13,378 13,013
Income allocated to minority interests 2,128 2,039
Dividends earned by preferred stockholders 4,831 4,648
Net income - available to common stockholders 6,419 6,326
Average shares outstanding - basic 33,640 34,091
Average shares outstanding, - basic, assuming
full conversion of OP Units (c) 44,796 45,052
Average shares outstanding - diluted for
FFO (d)(c) 58,758 59,651
Income before extraordinary items and
cumulative effect of change in accounting
principle - diluted $0.19 $0.21
Net income per share - basic $0.19 $0.19
Net income per share - diluted $0.19 $0.19
Dividend declared per share $0.530 $0.510
Funds from operations "FFO" (a)(c) - basic $30,374 $29,570
Funds from operations "FFO"
(a) (c) (d) - diluted $38,109 $37,822
FFO per share - basic (a)(c) $0.68 $0.66
FFO per share - diluted (a)(c)(d) $0.65 $0.63
(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 entities are calculated on the same basis." In
accordance with The National Association of Real Estate Investment
Trusts'(NAREIT) white paper on Funds from Operations dated October,
1999, excluded from FFO are the earnings impact of cumulative effects
of accounting changes and results of discontinued operations, both as
defined by GAAP.
Percentage change in FFO/share is based on the comparison to the same
period in 2000.
(b) 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.
(c) The Company has operating partnership units ("OP units"). Each OP
unit can be converted into a share of Company stock.Conversion of the
OP units has been assumed for purposes of calculating the FFO per
share and the weighted average number of shares outstanding.
(d) The Company issued $161.4 million of convertible debentures in June
and July, 1997. The debentures are convertibleinto common shares at
a conversion price of $31.125 per share.In November and December of
2000, the Company purchased and retired $10.6 million of the
debentures. In the first quarter of 2001 and 2000, the debentures are
not dilutive to net income per share, but the debentures weredilutive
to FFO per share and are reflected as converted for the calculation of
FFO per share - diluted.
The Company has 9,115 shares ofconvertible preferred stock
outstanding. The convertible preferred shares can be converted on a
1 for 1 basis for common stock.These preferred shares are not
assumed converted for purposes of net income per share as it would be
antidilutive to that calculation. The weighted average preferred
shares outstanding are assumed converted for purposes of FFO per share
as they are dilutive to that calculation. Also included in diluted
net income per share and FFO per share is the effect of stock options
and restricted stock, calculated using the treasury method for 2000
only.
(e)Effective January 1, 2000, in accordance with Staff Accounting
Bulletin No. 101, "Revenue Recognition in Financial Statements," the
Company changed its method of accounting for percentage rents. The
new accounting method has the impact of deferring percentage rent from
the first, second and third quarters into the fourth quarter. The
cumulative effect of this change in accounting principle at the
adoption date of January 1, 2000, was $963 for the wholly-owned assets
and $787 for joint ventures on a pro rata basis, which in accordance
with GAAP, was accounted for as a cumulative effect of a change in
accounting principle.
THE MACERICH COMPANY
FINANCIAL HIGHLIGHTS
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
March 31, December 31,
Summarized Balance Sheet Information 2001 2000
(UNAUDITED)
Cash and cash equivalents 21,762 36,273
Investment in real estate, net 1,933,533 1,933,584
Total Assets 2,314,114 2,337,242
Mortgage and notes payable 1,408,542 1,400,087
Convertible debentures 150,848 150,848
Additional financial data as of : March 31, March 31,
2001 2000
Occupancy of centers (f) 92.50% 92.30%
Year to date increase in same
center sales (f)(g) 3.40% 3.60%
(f) excludes redevelopment properties - Crossroads - Boulder, Parklane
Mall, and Pacific View Mall.
(g) includes mall and freestanding stores
RECONCILIATION OF NET INCOME TO FFO
For the three months ended
MARCH 31,
(UNAUDITED)
2001 2000
Net income - available to common
stockholders 6,419 6,326
Adjustments to reconcile net income to FFO
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basic
Minority interest 2,128 2,039
Loss on early extinguishment of debt 186 --
(Gain) loss on sale of wholly owned assets 321 2
(Gain) loss on sale of assets from
unconsolidated entities (pro rata) (85) 424
Depreciation and amortization on
wholly owned centers 16,104 14,528
Depreciation and amortization on joint
ventures and from the management
companies (pro rata) 6,521 5,695
Cumulative effect of the change in
accounting principle - wholly owned assets -- 963
Cumulative effect of the change in accounting
principle - prorata joint ventures -- 787
Less: depreciation on personal property and
amortization of loan costs and interest
rate caps (1,220) (1,194)
Total FFO - basic 30,374 29,570
Weighted average shares
outstanding - basic (c) 44,796 45,052
Additional adjustment to arrive at FFO - diluted
Interest expense and amortization of loan
costs on the debentures (d) 2,904 3,146
Preferred stock dividends earned 4,831 4,648
Effect of restricted stock grants -- 458
FFO - diluted 38,109 37,822
Weighted average shares outstanding
- diluted (c)(d) 58,758 59,651
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SOURCE The Macerich Company
CONTACT: Arthur Coppola, President and Chief Executive Officer, or Thomas E. O'Hern, Executive Vice President and Chief Financial Officer, both of The Macerich Company, 310-394-6000/