Recent Highlights
* During the quarter, Macerich signed 286,000 square feet of specialty
store leases at average initial rents of $39.90 per square foot. First
year rents on mall and freestanding store leases signed during the
quarter were 21% higher than average expiring rents.
* For the quarter, EPS increased to $1.98, up from $.39 during the
quarter ended December 31, 2005. Gain on asset sales of
$132.7 million helped fuel the increase.
* Mall tenant sales per square foot increased 8.4% to $452 compared to
$417 for the year ended December 31, 2005.
* Portfolio occupancy at December 31, 2006 was 93.6% compared to 93.5%
at December 31, 2005. On a same center basis occupancy decreased to
93.6% at December 31, 2006 compared to 93.8% at December 31, 2005.
* Same center earnings before interest, taxes, depreciation and
amortization, excluding lease termination revenue, were up 3.0%
compared to the quarter ended December 31, 2005.
* Macerich closed on the $241 million acquisition of Deptford Mall in
Deptford, New Jersey.
Commenting on the quarter, Arthur Coppola president and chief executive officer of Macerich stated, "The fundamentals remained solid with good releasing spreads, strong occupancy levels and good tenant sales gains. The quarter was another example of strategically improving our overall portfolio with the sale of three non core assets and the acquisition of another strong East Coast mall. Through asset sales and financing activity our balance sheet continues to improve and we are well positioned to fund and execute our development pipeline."
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, 2006. The balance of the project is scheduled for completion in summer 2007. Phase I of the project is 93% leased. Recent store openings include Borders Books, Chipotle, Helly Hansen, Lady Footlocker, Lululemon, and Solstice. Wild Oats has also opened their corporate headquarters. Recent lease commitments include Anthropologie, Sephora, Cantina Laredo, Jamba Juice and North Face.
On November 1, Macerich received Phoenix City Council approval to add up to 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.
Groundbreaking took place on February 6, 2007 for the 230,000 square foot life style expansion at The Oaks in Thousand Oaks, California. Plans also call for a remodel of both the interior spaces and the exterior faAade, and will include a new 138,000 square foot Nordstrom scheduled to open at the center in fall 2008. New tenants include Abercrombie Kids, Forever 21, Forth & Towne, Guess?, J Crew, Iridesse, Planet Funk and Solstice. The combined expansion and renovation of the center is projected to cost approximately $250 million and be completed in fall 2008.
Phase I of SanTan Village, a $205 million regional shopping center under construction in Gilbert, Arizona, is scheduled to open in fall 2007. The center, currently 85% leased, is an open-air streetscape that will contain in excess of 1.2 million square feet on 120 acres. More than 35 tenants have committed to date, including Dillard's, Harkins Theatres, Aeropostale, American Eagle Outfitters, Ann Taylor, Ann Taylor Loft, Apple, Banana Republic, Best Buy, Blue Wasabi, The Body Shop, The Buckle, Charlotte Russe, Chico's, The Children's Place, Coach, Coldwater Creek, The Disney Store, Eddie Bauer, J. Jill, Lane Bryant/Cacique, lucy, PacSun, Soma by Chico's, Swarovski, Victoria's Secret, Weisfield's Jewelers, White House/Black Market and Z Gallerie.
Construction began in late 2006 on The Promenade at Casa Grande, a $135 million, 1 million-square-foot regional shopping center in Arizona's fastest-growing county. Located in Casa Grande, Pinal County, the center will be located along the I-10 corridor between Phoenix and Tucson. The project is 85% committed, including anchors Target and JC Penney, and will deliver shopping, dining and entertainment options to a key growth corridor. The first phase of the project, which will include a combination of large-format retailers, specialty shops and restaurants, is scheduled for completion in fall 2007. Phase II is comprised of small shops and is scheduled to open in March 2008. The Promenade is a joint venture owned 51% by Macerich.
On January 22, Macerich received approval from the Fairfax County Board of Supervisors to move forward with plans for a transit-oriented development at Tysons Corner Center in McLean, Virginia. The expansion will add 3.5 million square feet of mixed use space to the existing 2.2 million square foot regional shopping center. The project is planned to be built in phases over the next 10 years based on market demand and the expansion of the area's light rail system. Completion of the entitlement process for Phase I, totaling approximately 1.4 million square feet, is anticipated for the first quarter of 2008. The first phase of the project is anticipated to begin development in late 2009.
In late 2006, Macerich announced plans to bring Barneys New York Department Store to Scottsdale Fashion Square, replacing one of the anchor spaces acquired as a result of the Federated-May merger. Demolition of the vacant space and adjoining parking structure will begin in 2007, allowing for construction of an additional 100,000 square feet of new shop space and the 65,000 square foot Barneys New York location. This first to the Arizona market store is scheduled to open in fall 2009.
Acquisition Activity
In December Macerich acquired the entity owning Deptford Mall for $241 million. Deptford Mall is a two-level 1,040,000 square foot super-regional mall anchored by JC Penney, Sears, Macy's and Boscov's. The mall includes 343,000 square feet of mall shop space. Annual tenant sales per square foot are approximately $507. The mall has an occupancy level of 94%. Macerich placed a $172 million, five year, 5.44% fixed rate loan on the mall.
Asset Sales
Macerich continued to prune its portfolio with the sale of three non core malls: Crossroads Mall in Oklahoma City, Oklahoma, Northwest Arkansas Mall in Fayetteville, Arkansas and The Citadel Mall in Colorado Springs, Colorado. The combined sale price was $375 million reflecting a combined capitalization rate of 7.0%. The average annual tenant sales per square foot for these assets was approximately $338. This brings the total number of malls sold in 2006 to six as the Company continues to redeploy its capital into developments, redevelopments and higher quality assets.
2007 Earnings Guidance
Management is issuing its guidance for EPS and FFO per share for 2007.
Guidance for 2007 and reconciliation of EPS to FFO per share:
Range per share:
Fully Diluted EPS $1.24......$1.34
Plus: Real Estate Depreciation and Amortization 3.44.......3.44
Less: other items including additional
dilutive securities (.10)......(.10)
Fully Diluted FFO per share $4.58......$4.68
The Company's 2007 earnings guidance is based upon its internal forecasting and planning process and on many assumptions, including the following:
Management expects comparable property EBITDA (excluding the impact of lease termination revenue) to grow in the 2.5% to 3.5% range compared to 2006. 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.
This guidance is based on 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. 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 84% ownership interest in The Macerich Partnership, L.P. Macerich now owns approximately 77 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, February 13, 2007 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 Results after
SFAS 144 (e) SFAS 144 (e) SFAS 144 (e)
Results of For the Three For the Three For the Three
Operations: Months Ended Months Ended Months Ended
December 31, December 31, December 31,
Unaudited Unaudited
2006 2005 2006 2005 2006 2005
Minimum rents $141,347 $132,972 ($6,819) ($11,651) $134,528 $121,321
Percentage rents 15,572 15,093 (523) (939) 15,049 14,154
Tenant recoveries 69,334 63,219 (2,026) (3,962) 67,308 59,257
Management
Companies'
revenues 8,806 7,766 -- -- 8,806 7,766
Other income 8,650 7,898 (535) (531) 8,115 7,367
Total revenues 243,709 226,948 (9,903) (17,083) 233,806 209,865
Shopping center
and operating
expenses 71,439 68,851 (2,635) (6,052) 68,804 62,799
Management
Companies'
operating
expenses 15,379 15,547 -- -- 15,379 15,547
Income tax
expense
< benefit > (187) 174 -- -- (187) 174
Depreciation and
amortization 57,598 59,171 (2,288) (3,758) 55,310 55,413
General,
administrative
and other
expenses 3,991 2,170 -- -- 3,991 2,170
Interest expense 73,209 74,281 (2,825) (3,089) 70,384 71,192
Loss on early
extinguishment
of debt 24 1,666 -- -- 24 1,666
Gain (loss) on
sale or
writedown
of assets 132,710 56 (132,710) -- -- 56
Equity in
income of
unconsolidated
entities (c) 28,686 29,887 -- -- 28,686 29,887
Minority
interests
in consolidated
joint ventures (1,832) (129) 37 72 (1,795) (57)
Income (loss)
from
continuing
operations 181,820 34,902 (134,828) (4,112) 46,992 30,790
Discontinued
Operations:
Gain (loss) on
sale of asset -- -- 132,695 -- 132,695 --
Income from
discontinued
operations -- -- 2,133 4,112 2,133 4,112
Income before
minority
interests
of OP 181,820 34,902 181,820 34,902
Income allocated
to minority
interests
of OP 27,690 5,365 -- -- 27,690 5,365
Net income
before
preferred
dividends 154,130 29,537 -- -- 154,130 29,537
Preferred
dividends and
distributions (a) 6,198 5,900 -- -- 6,198 5,900
Net income to
common
stockholders $147,932 $23,637 $0 $0 $147,932 $23,637
Average number
of shares
outstanding
- basic 71,521 59,916 71,521 59,916
Average shares
outstanding,
assuming full
conversion of
OP Units (d) 91,820 73,728 91,820 73,728
Average shares
outstanding
- diluted for
FFO (d) 91,820 80,496 91,820 80,496
Per share income
- diluted before
discontinued
operations -- -- $0.51 $0.33
Net income per
share - basic $2.07 $0.39 $2.07 $0.39
Net income per
share -
diluted (a) $1.98 $0.39 $1.98 $0.39
Dividend declared
per share $0.71 $0.68 $0.71 $0.68
Funds from
operations
"FFO" (b)(d)
- basic $118,521 $99,976 $118,521 $99,976
Funds from
operations
"FFO" (a)(b)(d)
- diluted $124,719 $105,876 $124,719 $105,876
FFO per share
- basic (b)(d) $1.40 $1.36 $1.40 $1.36
FFO per share
- diluted
(a)(b)(d) $1.36 $1.32 $1.36 $1.32
Results before Impact of Results after
SFAS 144 (e) SFAS 144 (e) SFAS 144 (e)
Results of For the For the For the
Operations: Year Ended Year Ended Year Ended
December 31 December 31 December 31
Unaudited Unaudited
2006 2005 2006 2005 2006 2005
Minimum rents $525,728 $468,363 ($36,650) ($44,604) $489,078 $423,759
Percentage rents 26,173 26,258 (1,506) (2,106) 24,667 24,152
Tenant recoveries 270,214 233,029 (15,688) (18,197) 254,526 214,832
Management
Companies'
revenues 31,456 26,128 -- -- 31,456 26,128
Other income 31,406 24,581 (1,477) (1,628) 29,929 22,953
Total revenues 884,977 778,359 (55,321) (66,535) 829,656 711,824
Shopping center
and operating
expenses 281,273 248,020 (19,146) (24,115) 262,127 223,905
Management
Companies'
operating
expenses 56,673 52,840 -- -- 56,673 52,840
Income tax
expense
(benefit) 33 (2,031) -- -- 33 (2,031)
Depreciation and
amortization 236,669 208,938 (12,396) (15,793) 224,273 193,145
General,
administrative
and other
expenses 13,532 12,106 -- -- 13,532 12,106
Interest expense 286,635 249,917 (11,968) (12,820) 274,667 237,097
Loss on early
extinguishment
of debt 1,835 1,666 -- -- 1,835 1,666
Gain (loss) on
sale or writedown
of assets 241,732 1,530 (241,694) (277) 38 1,253
Equity in income
of unconsolidated
entities (c) 86,053 76,303 -- -- 86,053 76,303
Minority interests
in consolidated
joint ventures (40,933) (600) 37,266 (100) (3,667) (700)
Income (loss)
from
continuing
operations 295,179 84,136 (216,239) (14,184) 78,940 69,952
Discontinued
Operations:
Gain (loss) on
sale of asset -- -- 204,863 277 204,863 277
Income from
discontinued
operations -- -- 11,376 13,907 11,376 13,907
Income before
minority
interests
of OP 295,179 84,136 -- -- 295,179 84,136
Income allocated
to minority
interests
of OP 42,821 12,450 -- -- 42,821 12,450
Net income before
preferred
dividends 252,358 71,686 -- -- 252,358 71,686
Preferred
dividends and
distributions (a) 24,336 19,098 -- -- 24,336 19,098
Net income to
common
stockholders $228,022 $52,588 $0 $0 $228,022 $52,588
Average number
of shares
outstanding
- basic 70,826 59,279 70,826 59,279
Average shares
outstanding,
assuming full
conversion of
OP Units (d) 88,058 73,573 88,058 73,573
Average shares
outstanding
- diluted
for FFO (d) 88,058 77,397 88,058 77,397
Per share income
- diluted before
discontinued
operations -- -- $0.73 $0.69
Net income per
share - basic $3.22 $0.89 $3.22 $0.89
Net income per
share
- diluted (a) $3.19 $0.88 $3.19 $0.88
Dividend declared
per share $2.75 $2.63 $2.75 $2.63
Funds from
operations
"FFO" (b)(d)
- basic $373,039 $326,541 $373,039 $326,541
Funds from
operations
"FFO" (a)(b)(d)
- diluted $383,122 $336,831 $383,122 $336,831
FFO per share
- basic (b)(d) $4.43 $4.46 $4.43 $4.46
FFO per share
- diluted
(a)(b)(d) $4.35 $4.35 $4.35 $4.35
(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 assumed converted for purposes of net
income per share - diluted for 2006 and are not assumed converted
for 2005 as they would be antidilutive.
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 twelve months ended December 31, 2006 and 2005 by
$3.6 million, $9.5 million, $0.2 million and $3.4 million,
respectively, or by $.04 per share, $.11 per share, $.00 per share
and $.04 per share, respectively. Additionally, SFAS 141 increased
FFO for the three and twelve months ended December 31, 2006 and 2005
by $4.0 million, $16.9 million, $4.4 million and $15.3 million,
respectively or by $.04 per share, $.19 per share, $.05 per share and
$.20 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 months ended December 31, 2006 and 2005,
the MACWH, LP units were dilutive to FFO. For the twelve months ended
December 31, 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 twelve months ended December
31, 2006 and 2005 to discontinued operations.
On July 13, 2006, Park Lane 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
twelve months ended December 31, 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 $7.4 million, respectively. The Company
reclassified the results of operations for the three and twelve
months ended December 31, 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 $11.8 million.
The Company reclassified the results of operations for the three and
twelve months ended December 31, 2006 and 2005 to discontinued
operations.
On December 29, 2006, Citadel Mall in Colorado Springs, Colorado,
Crossroads Malls in Oklahoma City, Oklahoma and Northwest Arkansas
Mall in Fayetteville, Arkansas were sold. The sale of these
properties resulted in a total gain on sale of $132.7 million. The
Company reclassified the results of operations for the three and
twelve months ended December 31, 2006 and 2005 to discontinued
operations.
Dec 31, Dec 31,
Summarized Balance Sheet Information 2006 2005
(UNAUDITED)
Cash and cash equivalents $269,435 $155,113
Investment in real estate, net (h) $5,755,283 $5,438,496
Investments in unconsolidated entities (i) $1,010,380 $1,075,621
Total Assets $7,562,163 $7,178,944
Mortgage and notes payable $4,993,879 $5,424,730
Pro rata share of debt on unconsolidated
entities $1,664,447 $1,505,612
Total common shares outstanding at quarter end: 71,568 59,942
Total preferred shares outstanding at
quarter end: 3,627 3,627
Total partnership/preferred units outstanding
at quarter end: 16,342 16,647
Dec 31, Dec 31,
Additional financial data as of: 2006 2005
Occupancy of centers (f) 93.60% 93.50%
Comparable quarter change in same center
sales (f)(g) 2.53% 5.50%
Additional financial data for the
twelve months ended:
Acquisitions of property and equipment -
including joint ventures at prorata $609,275 $2,503,688
Redevelopment and expansions of centers -
including joint ventures at prorata $223,307 $156,655
Renovations of centers - including joint
ventures at prorata $59,525 $83,336
Tenant allowances - including joint ventures
at prorata $49,398 $30,686
Deferred leasing costs - including joint ventures
at prorata $27,045 $26,950
(f) excludes redevelopment properties.
(g) includes mall and freestanding stores.
(h) includes construction in process on wholly owned assets of $294,115
at December 31, 2006 and $162,157 at December 31, 2005.
(i) the Company's prorata share of construction in process on
unconsolidated entities of $45,268 at December 31, 2006 and $98,180
at December 31, 2005.
For the Three Months For the Year
PRORATA SHARE OF Ended December 31, Ended December 31,
JOINT VENTURES (UNAUDITED) (UNAUDITED)
(Unaudited) (All amounts in thousands) (All amounts in thousands)
2006 2005 2006 2005
Revenues:
Minimum rents $64,400 $59,803 $241,630 $209,933
Percentage rents 8,657 7,873 15,963 13,815
Tenant recoveries 29,108 25,636 111,788 91,482
Other 4,518 3,737 15,125 12,402
Total revenues 106,683 97,049 384,506 327,632
Expenses:
Shopping center
expenses 33,076 29,549 125,945 106,616
Interest expense 25,244 20,255 91,504 74,383
Depreciation and
amortization 20,536 18,004 82,745 73,247
Total operating
expenses 78,856 67,808 300,194 254,246
Gain on sale of assets 480 93 725 1,954
Equity in income of
joint ventures 379 553 1,016 970
Loss on early
extinguishment of debt -- -- -- (7)
Net income $28,686 $29,887 $86,053 $76,303
For the Three Months For the Year
RECONCILIATION OF Ended December 31, Ended December 31,
NET INCOME TO (UNAUDITED) (UNAUDITED)
FFO (b)(e) (All amounts in thousands) (All amounts in thousands)
2006 2005 2006 2005
Net income -
available to
common stockholders $147,932 $23,637 $228,022 $52,588
Adjustments to
reconcile net income
to FFO - basic
Minority interest
in OP 27,690 5,365 42,821 12,450
(Gain) loss on sale
of consolidated
assets (132,710) (56) (241,732) (1,530)
plus gain on
undepreciated
asset sales -
consolidated
assets 3,112 -- 8,827 1,068
plus minority
interest share
of gain on sale
of consolidated
joint ventures 15 -- 36,831 239
(Gain) loss on sale
of assets from
unconsolidated
entities
(pro rata share) (480) (93) (725) (1,954)
plus gain on
undepreciated
asset sales -
unconsolidated
assets 481 225 725 2,092
Depreciation and
amortization on
consolidated
assets 57,598 59,171 236,669 208,938
Less depreciation
and amortization
allocable to
minority interests
on consolidated
joint ventures (1,071) (2,261) (5,422) (5,873)
Depreciation and
amortization on
joint ventures
(pro rata) 20,536 18,004 82,745 73,247
Less: depreciation
on personal property
and amortization of
loan costs and
interestrate caps (4,582) (4,016) (15,722) (14,724)
Total FFO - basic 118,521 99,976 373,039 326,541
Additional adjustment
to arrive at FFO
- diluted
Preferred stock
dividends earned 2,575 2,430 10,083 9,648
Non-participating
preferred units
- dividends 284 320 642
Participating
preferred units
- dividends 3,339 3,150 n/a - antidilutive
FFO - diluted $124,719 $105,876 $383,122 $336,831
For the Three Months For the Year
Ended December 31, Ended December 31,
Reconciliation of (UNAUDITED) (UNAUDITED)
EPS to FFO per (All amounts in thousands) (All amounts in thousands)
diluted share: 2006 2005 2006 2005
Earnings per share $1.98 $0.39 $3.19 $0.88
Per share impact of
depreciation and
amortization
real estate $0.86 $0.97 $3.54 $3.57
Per share impact of
gain on sale of
depreciated assets ($1.48) $0.00 ($2.33) $0.00
Per share impact of
preferred stock not
dilutive to EPS $0.00 ($0.04) ($0.05) ($0.10)
Fully Diluted FFO
per share $1.36 $1.32 $4.35 $4.35
THE MACERICH COMPANY For the Three Months For the Year
RECONCILIATION OF Ended December 31, Ended December 31,
NET INCOME TO EBITDA (UNAUDITED) (UNAUDITED)
(All amounts in thousands) (All amounts in thousands)
2006 2005 2006 2005
Net income -
available
to common
stockholders $147,932 $23,637 $228,022 $52,588
Interest expense 73,209 74,281 286,635 249,917
Interest expense -
unconsolidated
entities (pro rata) 25,244 20,255 91,504 74,383
Depreciation and
amortization -
consolidated assets 57,598 59,171 236,669 208,938
Depreciation and
amortization -
unconsolidated
entities (pro rata) 20,536 18,004 82,745 73,247
Minority interest 27,690 5,365 42,821 12,450
Less: Interest
expense and
depreciation and
amortization
allocable to
minority interests
on consolidated
joint ventures (1,836) (3,117) (8,027) (8,280)
Loss on early
extinguishment
of debt 24 1,666 1,835 1,666
Loss on early
extinguishment
of debt -
unconsolidated
entities (pro rata) -- 7 -- 7
Loss (gain) on
sale of assets -
consolidated
assets (132,710) (56) (241,732) (1,530)
Loss (gain) on
sale of assets -
unconsolidated
entities (pro rata) (480) (93) (725) (1,954)
Add: Minority
interest share of
gain on sale of
consolidated
joint ventures 15 -- 36,831 --
Income tax expense
(benefit) (187) 174 33 (2,031)
Preferred dividends 6,198 5,900 24,336 19,098
EBITDA (j) $223,233 $205,194 $780,947 $678,499
THE MACERICH COMPANY
RECONCILIATION OF EBITDA TO SAME CENTERS - NET OPERATING INCOME ("NOI")
For the Three Months For the Year
Ended December 31, Ended December 31,
(UNAUDITED) (UNAUDITED)
(All amounts in thousands) (All amounts in thousands)
2006 2005 2006 2005
EBITDA (j) $223,233 $205,194 $780,947 $678,499
Add: REIT general
and administrative
expenses 3,991 2,170 13,532 12,106
Management
Companies'
revenues (c) (8,806) (7,766) (31,456) (26,128)
Management
Companies'
operating
expenses (c) 15,379 15,547 56,673 52,840
EBITDA of
non-comparable
centers (25,511) (19,843) (147,493) (77,092)
SAME CENTERS -
Net operating
income ("NOI") (k) $208,286 $195,302 $672,203 $640,225
(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
Press, 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