SANTA MONICA, Calif., Aug. 5 /PRNewswire-FirstCall/ -- The Macerich Company (NYSE: MAC) today announced results of operations for the quarter and six months ended June 30, 2004 which included funds from operations ("FFO") per share-diluted increasing 5% to $.89 compared to $.85 for the quarter ended June 30, 2003 and increasing to $1.79 for the six months ended June 30, 2004 compared to $1.69 for the comparable period in 2003. Total FFO-diluted increased by 6.7% to $68 million for the quarter compared to $63.8 million for the quarter ended June 30, 2003 and to $136.7 million for the six months ended June 30, 2004 compared to $127.0 million for the comparable period in 2003. 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 June 30, 2004 was $17.1 million or $.29 per share-diluted compared to $28.6 million or $.55 per share-diluted for the quarter ended June 30, 2003. Net income in the quarter ended June 30, 2003 was positively impacted by net gain on sales of consolidated assets of $11.6 million or $.18 per share compared to a net gain on asset sales of $1.1 million or $.01 per share for the quarter ended June 30, 2004. For the six months ended June 30, 2004 net income was $35.2 million or $.60 per share-diluted compared to $48 million or $.92 per share-diluted for the six months ended June 30, 2003. 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 367,000 square feet of specialty
store leases at average initial rents of $39.82 per square foot.
First year rents on mall and freestanding store leases signed during
the quarter were 38% higher than average expiring rents.
* Total same center tenant sales, for the quarter ended June 30, 2004,
were up 6.0% compared to sales levels for the quarter ended June 30,
2003.
* Portfolio occupancy at June 30, 2004 was 91.7% compared to 92.4% at
June 30, 2003. On a same center basis occupancy was 92.0% at June 30,
2004 compared to 92.4% at June 30, 2003.
* The Company acquired two California malls; La Cumbre Plaza and The
Mall of Victor Valley and also a 50% interest in NorthPark Center in
Dallas.
* The Company completed an upsizing of its line of credit to $1 billion
from $425 million.
Commenting on results and recent events, Arthur Coppola, President and Chief Executive Officer of Macerich stated, "The quarter was highlighted by excellent leasing activity including positive releasing spreads in excess of 35%. In addition we continued to make excellent progress on the expansion of Queens Center which is currently 98% leased. It has also been an active time for accretive, strategic acquisitions. Including three recently announced acquisitions, we have acquired over 21 million square feet since June 2002. Included in the acquisitions were 16 malls, located primarily in California and Arizona. These acquisitions along with our development and redevelopment pipeline will help fuel our continued FFO growth."
Redevelopment and Development Activity
At Queens Center, the redevelopment and expansion continue. The project will increase the size of the center from 620,000 square feet to approximately one million square feet. Completion is planned in phases. Phase I recently opened and project completion and stabilization is expected in early 2005. Leasing activity has been robust with 98% of the total shop expansion space already leased.
In Boulder, Colorado, the Company has received unanimous approval from the City of Boulder's Planning Board for its proposal to transform Crossroads Mall into "Twenty Ninth Street" -- an open-air retail, entertainment, restaurant and office district. Boulder's City Council subsequently passed a resolution supporting the Planning Board's decision, finalizing the extended regulatory process and bringing final approval to the project. Macerich has reached agreement with two anchors, Century Theatres and Wild Oats Market. Wild Oats and Century will join existing anchor Foley's which is the remaining retailer from the original mall. In addition to building a flagship, 35,000-square-foot Wild Oats Natural Marketplace, the Boulder-based Wild Oats agreed to relocate from its current 50,000-square-foot headquarters elsewhere in the city to 80,000 square feet of newly-constructed office space in the center's former Sears building -- bringing 275 employees to the site.
Acquisitions
In July, the Company acquired La Cumbre Plaza in Santa Barbara, California and the Mall of Victor Valley in Victorville, California. La Cumbre Plaza is a 494,000 square foot Mediterranean themed, open-air regional mall anchored by Sears and Robinson-May. The specialty tenant annual sales per square foot are $369. The Mall of Victor Valley is a 507,000 square foot regional mall anchored by JC Penney, Harris, Sears and Mervyn's. The mall is located in the Inland Empire, one of California's fastest growing regions. Specialty tenant annual sales per square foot are $370. The combined total purchase price for both properties was $151.3 million. Projected first year net operating income from the two properties combined is $10.9 million.
In May, a 50% interest in NorthPark Center in Dallas, Texas was acquired. NorthPark is a 1.4 million square foot enclosed mall anchored by Neiman Marcus, Foley's and Dillard's. Plans are underway to expand the center by adding specialty shops and Nordstrom. Tenant average annual sales per square foot exceed $550.
Financing Activity
In June, an $85 million fixed rate loan was placed on Northridge Mall in Salinas, California. The five-year loan bears interest at 4.94%.
In July, Redmond Town Center was refinanced with a $75 million fixed rate loan at 4.81%. The proceeds were used to pay off the existing $58 million, 6.5% loan.
The Company's line of credit was amended and upsized to $ 1 billion from $425 million. The term was extended two years to 2007 and the borrowing spread was reduced by 100 basis points to LIBOR plus 1.50% based on the Company's current leverage level. The 23 participating banks closed the transaction on July 30. Concurrently with the line of credit closing, a $196 million term loan bearing interest at LIBOR plus 2.75% was paid off.
Earnings Guidance
The Company is raising the lower end of its year 2004 FFO per share guidance range and revising its EPS guidance as follows:
Range per share:
Fully Diluted EPS $1.65........$1.71
Plus: Real Estate Depreciation
and Amortization $2.26........$2.26
Less: impact of preferred shares
(not dilutive to EPS) ($.08).......($.08)
Less: Gain on Sale of depreciated
Assets ($.01).......($.01)
Fully Diluted FFO per share $3.82........$3.88
The 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 other than those that have closed through August 5, 2004. 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 81% ownership interest in The Macerich Partnership, L.P. Macerich now owns approximately 61 million square feet of gross leaseable area consisting primarily of interests in 62 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.fulldisclosure.com. The call begins today, August 5, 2004 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.
THE MACERICH COMPANY
FINANCIAL HIGHLIGHTS
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
Results before Impact of Results after
SFAS 144 (f) SFAS 144 (f) SFAS 144 (f)
Results of
Operations: For the For the For the
Three Months Three Months Three Months
Ended June 30 Ended June 30 Ended June 30
Unaudited Unaudited
2004 2003 2004 2003 2004 2003
Minimum Rents (e) $80,126 $73,029 ($26) ($1,035) $80,100 $71,994
Percentage Rents 2,400 1,261 -- -- $2,400 1,261
Tenant Recoveries 41,519 39,638 -- (185) $41,519 39,453
Other Income 4,854 3,784 (77) (19) $4,777 3,765
Total Revenues 128,899 117,712 (103) (1,239) 128,796 116,473
Shopping center
and operating
expenses (c) 47,544 42,846 (11) (256) 47,533 42,590
Depreciation and
amortization 35,311 24,575 (179) 35,311 24,396
General,
administrative
and other
expenses (c) 2,271 2,719 -- 2,271 2,719
Interest expense 34,755 32,981 -- 34,755 32,981
Gain (loss) on
sale or writedown
of assets 1,068 11,591 (288) 19 780 11,610
Equity in income
of unconsolidated
entities (c) 13,310 15,141 -- 13,310 15,141
Income of the
Operating
Partnership from
continuing
operations 23,396 41,323 (380) (785) 23,016 40,538
Discontinued
Operations:
Gain (loss) on
sale of asset -- -- 288 (19) 288 (19)
Income from
discontinued
operations -- -- 92 804 92 804
Income before
minority interests 23,396 41,323 -- -- 23,396 41,323
Income (loss)
allocated to
minority interests 4,070 7,554 -- -- 4,070 7,554
Net income before
preferred
dividends 19,326 33,769 -- -- 19,326 33,769
Dividends earned
by preferred
stockholders (a) 2,213 5,195 -- -- 2,213 5,195
Net income to
common
stockholders $17,113 $28,574 $0 $0 $17,113 $28,574
Average # of
shares
outstanding --
basic 58,612 51,874 58,612 51,874
Average shares
outstanding,--
basic, assuming
full conversion of
OP Units (d) 72,827 65,586 72,827 65,586
Average shares
outstanding --
diluted for
FFO (d) 76,830 75,203 76,830 75,203
Per share
income-diluted
before discontinued
operations -- -- $0.28 $0.54
Net income per
share-basic $0.29 $0.55 $0.29 $0.55
Net income per
share-diluted $0.29 $0.55 $0.29 $0.55
Dividend declared
per share $0.61 $0.57 $0.61 $0.57
Funds from
operations "FFO"
(b) (d)-- basic $65,836 $58,566 $65,836 $58,566
Funds from
operations "FFO"
(a) (b) (d) --
diluted $68,049 $63,761 $68,049 $63,761
FFO per share-
basic (b) (d) $0.90 $0.89 $0.90 $0.89
FFO per share-
diluted (a) (b)
(d) $0.89 $0.85 $0.89 $0.85
% change in
FFO -- diluted 4.47% 4.47%
THE MACERICH COMPANY
FINANCIAL HIGHLIGHTS
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
Results before Impact of Results after
SFAS 144 (f) SFAS 144 (f) SFAS 144 (f)
Results of
Operations: For the For the For the
Six Months Six Months Six Months
Ended June 30 Ended June 30 Ended June 30
Unaudited Unaudited
2004 2003 2004 2003 2004 2003
Minimum Rents (e) $156,073 $145,167 ($170) ($2,117) $155,903 $143,050
Percentage Rents 4,827 2,971 -- -- 4,827 2,971
Tenant Recoveries 82,840 76,655 -- (303) 82,840 76,352
Other Income 8,909 7,877 (159) (25) 8,750 7,852
Total Revenues 252,649 232,670 (329) (2,445) 252,320 230,225
Shopping center
and operating
expenses (c) 90,380 82,208 (11) (642) 90,369 81,566
Depreciation and
amortization 69,612 48,489 (44) (373) 69,568 48,116
General,
administrative and
other expenses (c) 5,294 5,055 -- -- 5,294 5,055
Interest expense 68,088 66,989 -- -- 68,088 66,989
Loss on early
extinguishment
of debt (405) -- -- -- (405) --
Gain on sale
or writedown of
assets 1,094 11,553 (313) 169 781 11,722
Equity in income of
unconsolidated
entities (c) 28,160 29,607 -- -- 28,160 29,607
Income of the
Operating
Partnership from
continuing
operations 48,124 71,089 (587) (1,261) 47,537 69,828
Discontinued
Operations:
Gain (loss) on
sale of asset -- -- 313 (169) 313 (169)
Income from
discontinued
operations -- -- 274 1,430 274 1,430
Income before
minority interests 48,124 71,089 -- -- 48,124 71,089
Income allocated to
minority interests 8,470 12,699 -- -- 8,470 12,699
Net income before
preferred
dividends 39,654 58,390 -- -- 39,654 58,390
Dividends earned
by preferred
stockholders (a) 4,425 10,391 -- -- 4,425 10,391
Net income to
common
stockholders $35,229 $47,999 $0 $0 $35,229 $47,999
Average # of
shares outstanding
-- basic 58,354 51,733 58,354 51,733
Average shares
outstanding,--
basic, assuming
full conversion
of OP Units (d) 72,569 65,446 72,569 65,446
Average shares
outstanding --
diluted for
FFO (d) 76,595 75,030 76,595 75,030
Per share
income-diluted
before
discontinued
operations -- -- $0.59 $0.90
Net income per
share-basic $0.60 $0.93 $0.60 $0.93
Net income per
share-diluted $0.60 $0.92 $0.60 $0.92
Dividend declared
per share $1.22 $1.14 $1.22 $1.14
Funds from
operations
"FFO" (b) (d)
-- basic $132,306 $116,657 $132,306 $116,657
Funds from
operations
"FFO" (a) (b)
(d) -- diluted $136,731 $127,048 $136,731 $127,048
FFO per
share-basic
(b) (d) $1.82 $1.78 $1.82 $1.78
FFO per
share-diluted
(a) (b) (d) $1.79 $1.69 $1.79 $1.69
% change in FFO
-- diluted 5.42% 5.42%
THE MACERICH COMPANY
FINANCIAL HIGHLIGHTS
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
(a) On February 25, 1998, the Company sold $100,000 of convertible
preferred stock and on June 16, 1998 another $150,000 of
convertible preferred stock was issued. The convertible preferred
shares can be converted on a one for one basis for common stock.
These preferred shares are not assumed converted for purposes of net
income per share for the three and six months ending June 30, 2004
and 2003 as it would be antidilutive to that calculation. On
September 9, 2003, 5.487 million shares of Series B convertible
preferred stock were converted into common shares. 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 six months ended June 30, 2004 by $1,001 and $2,417,
respectively, or by $.01 per share and $.03 per share, respectively.
Additionally, the impact of SFAS No. 141 increased FFO for the three
and six months ended June 30, 2004 by $1.9 million and $3.8 million,
respectively, or by $.024 per share and $.049 per share,
respectively. The inclusion of gains on sales of peripheral land
increased FFO for the three and six months ended June 30, 2003 by
$64 and $588, respectively, or by $.00 per share and $.01 per share,
respectively. Additionally, the impact of SFAS 141 increased FFO
for the three and six months ended June 30, 2003 by $1.3 million and
$2.4 million, respectively, or by $.017 per share and $.032 per
share, respectively. The Company adopted SFAS No. 141 (see Note (e)
below) effective October 1, 2002.
(c) This includes, using the equity method of accounting, the Company's
prorata share of the equity in income or loss of its unconsolidated
joint ventures for all periods presented and for Macerich Management
Company through June 30, 2003. Effective July 1, 2003, the
Company has consolidated Macerich Management Company. Certain
reclassifications have been made in the 2003 financial highlights
to conform to the 2004 financial highlights presentation.
(d) The Company has operating partnership units ("OP units"). Each OP
unit may be converted into a share of Company stock. Conversion of
the OP units has been assumed for purposes of calculating the FFO
per share and the weighted average number of shares outstanding.
(e) Effective October 1, 2002, the Company adopted SFAS No. 141,
Business Combinations, which requires companies that have acquired
assets subsequent to June 2001 to reflect the discounted net present
value of market rents in excess of rents in place at the date of
acquisition as a deferred credit to be amortized into income over
the average remaining life of the acquired leases. Additionally,
depreciation and amortization reflects the impact of SFAS 141. The
impact on EPS for the three and six months ending June 30, 2004 was
approximately ($.06) per share and ($.14) per share, respectively.
The impact on EPS for the three and six months ending June 30, 2003
was approximately $.02 per share and $.03 per share, respectively.
(f) 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. The Company sold its 67% interest in Paradise
Village Gateway on January 2, 2003 (acquired in July 2002), and the
loss on sale of $0.2 million has been reclassified to discontinued
operations. Additionally, the Company sold Bristol Center on
August 4, 2003, and the results for the period January 1, 2003 to
June 30, 2003 and the results for the period January 1, 2004 to
June 30, 2004 have been reclassified to discontinued operations.
The sale of Bristol Center resulted in a gain on sale of asset of
$22.2 million.
THE MACERICH COMPANY
FINANCIAL HIGHLIGHTS
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
June 30 Dec 31
Summarized Balance Sheet Information 2004 2003
(UNAUDITED)
Cash and cash equivalents $93,382 $47,160
Investment in real estate, net (i) $3,236,521 $3,186,725
Investments in unconsolidated
entities (j) $609,038 $577,908
Total Assets $4,277,108 $4,145,593
Mortgage and notes payable $2,865,346 $2,682,599
Pro rata share of debt on
unconsolidated entities $1,114,253 $1,046,042
June 30 June 30
Additional financial data as of: 2004 2003
Occupancy of centers (g):
consolidated assets 91.20% 91.50%
unconsolidated assets 92.10% 93.10%
total portfolio 91.70% 92.40%
Comparable quarter change in same
center sales (g) (h):
consolidated assets 4.20% 0.20%
unconsolidated assets 7.70% 2.70%
total portfolio 6.00% 1.50%
Sales per square foot (h):
consolidated assets $359 $352
unconsolidated assets $390 $360
total portfolio $375 $356
Additional financial data for the
six months ended:
Acquisitions of property and equipment
-- including joint ventures prorata $40,910 $9,303
Redevelopment and expansions of
centers -- including joint ventures
prorata $84,740 $73,132
Renovations of centers -- including
joint ventures at prorata $16,711 $5,508
Tenant allowances -- including
joint ventures at prorata $5,774 $3,939
Deferred leasing costs -- including
joint ventures at prorata $9,576 $8,972
(g) excludes redevelopment properties -- Crossroads Mall-Boulder,
Parklane Mall, Queens expansion, Scottsdale 101 and La Encantada.
(h) includes mall and freestanding stores.
(i) includes construction in process on wholly owned assets of $158,179
at June 30, 2004 and $268,810 at December 31, 2003.
(j) the Company's prorata share of construction in process on
unconsolidated entities of $9,759 at June 30, 2004 and $8,188 at
December 31, 2003.
THE MACERICH COMPANY
FINANCIAL HIGHLIGHTS
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
For the Three Months For the Six Months
PRORATA SHARE OF Ended June 30, Ended June 30,
JOINT VENTURES Unaudited Unaudited
(Unaudited) (All amounts in thousands) (All amounts in thousands)
2004 2003 2004 2003
Revenues:
Minimum rents $42,931 $38,904 $82,992 $78,675
Percentage rents 1,221 901 2,729 2,288
Tenant recoveries 18,566 16,814 36,455 32,957
Management fee (c) -- 2,666 -- 5,250
Other 1,286 1,221 3,276 2,303
Total revenues 64,004 60,506 125,452 121,473
Expenses:
Shopping center
expenses 23,513 19,083 44,212 38,199
Interest expense 15,074 13,753 30,030 27,916
Management company
expense (c) -- 1,003 -- 3,013
Depreciation and
amortization 12,775 11,282 25,133 22,940
Total operating
expenses 51,362 45,121 99,375 92,068
Gain (loss) on sale
or writedown of assets 668 (244) 2,083 202
Net income $13,310 $15,141 $28,160 $29,607
For the Three Months For the Six Months
RECONCILIATION OF Ended June 30, Ended June 30,
NET INCOME TO FFO (All amounts in thousands) (All amounts in thousands)
(UNAUDITED) (UNAUDITED)
2004 2003 2004 2003
Net income --
available to
common stockholders $17,113 $28,574 $35,229 $47,999
Adjustments to
reconcile net income
to FFO-basic
Minority interest 4,070 7,554 8,470 12,699
(Gain) loss on
sale of consolidated
assets (1,068) (11,591) (1,094) (11,553)
plus gain on land
sales --
consolidated assets 334 27 334 155
(Gain) loss on sale
or write-down of
assets from
unconsolidated
entities (pro rata) (668) 244 (2,083) (202)
plus gain on land
sales --
unconsolidated
entities (pro rata) 668 38 2,083 433
Depreciation and
amortization on
consolidated
centers 35,311 24,575 69,612 48,489
Depreciation and
amortization on
joint ventures and
from the management
companies
(pro rata) 12,775 11,282 25,133 22,940
Less: depreciation
on personal property
and amortization of
loan costs and
interest rate caps (2,699) (2,137) (5,378) (4,303)
Total FFO -- basic 65,836 58,566 132,306 116,657
Additional adjustment
to arrive at
FFO-diluted
Preferred stock
dividends earned 2,213 5,195 4,425 10,391
Effect of
employee/director
stock incentive
plans FFO-diluted $68,049 $63,761 $136,731 $127,048
Weighted average
shares outstanding
-- diluted (d) (e) 76,830 75,203 76,595 75,030
For the Three Months For the Six Months
Ended June 30, Ended June 30,
(All amounts in thousands) (All amounts in thousands)
(UNAUDITED) (UNAUDITED)
Reconciliation of EPS 2004 2003 2004 2003
to FFO per
diluted share:
Earnings per share $0.29 $0.55 $0.60 $0.92
Per share impact
of depreciation
and amortization
real estate $0.62 $0.51 $1.23 $1.03
Per share impact
of gain on sale
of depreciated
assets ($0.01) ($0.17) ($0.01) ($0.17)
Per share impact
of preferred
stock not
dilutive to EPS ($0.01) ($0.04) ($0.03) ($0.09)
Fully Diluted FFO
per share $0.89 $0.85 $1.79 $1.69
THE MACERICH COMPANY
FINANCIAL HIGHLIGHTS
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
THE MACERICH For the Three Months For the Six Months
COMPANY Ended June 30, Ended June 30,
RECONCILIATION (All amounts in thousands) (All amounts in thousands)
OF NET INCOME (UNAUDITED) (UNAUDITED)
TO EBITDA 2004 2003 2004 2003
Net income --
available to common
stockholders $17,113 $28,574 $35,229 $47,999
Interest expense 34,755 32,981 68,088 66,989
Depreciation and
amortization 35,311 24,575 69,612 48,489
Equity in income
of unconsolidated
entities
(pro rata) (13,310) (15,141) (28,160) (29,607)
Minority interest 4,070 7,554 8,470 12,699
Loss on early
extinguishment
of debt -- -- 405 --
Loss (gain) on
sale of assets (1,068) (11,591) (1,094) (11,553)
Preferred dividends 2,213 5,195 4,425 10,391
EBITDA --
Consolidated
centers (k) $79,084 $72,147 $156,975 $145,407
Equity in income
of unconsolidated
entities
(pro rata) $13,310 $15,141 $28,160 $29,607
Interest expense --
unconsolidated
entities
(pro rata) 15,074 13,753 30,030 27,916
Depreciation and
amortization --
unconsolidated
entities
(pro rata) 12,775 11,282 25,133 22,940
Loss (gain) on
sale of assets --
unconsolidated
entities
(pro rata) (668) 244 (2,083) (202)
EBITDA --
Unconsolidated
entities
(pro rata) (k) $40,491 $40,420 $81,240 $80,261
EBITDA --
Total (k) $119,575 $112,567 $238,215 $225,668
THE MACERICH COMPANY
RECONCILIATION OF EBITDA TO SAME CENTERS -- NET OPERATING INCOME ("NOI")
For the Three Months For the Six Months
Ended June 30, Ended June 30,
(All amounts in thousands) (All amounts in thousands)
(UNAUDITED) (UNAUDITED)
2004 2003 2004 2003
EBITDA --
Consolidated
centers (k) $79,084 $72,147 $156,975 $145,407
Add: REIT general
and
administrative
expenses 2,271 2,719 5,294 5,055
Management
Company
expenses 4,752 4,134 5,598 6,357
EBITDA of
non-comparable
centers (10,664) (5,514) (17,287) (9,224)
Consolidated Same
Centers -- NOI
-- (l) $75,443 $73,486 $150,580 $147,595
EBITDA --
Unconsolidated
entities (k) $40,491 $40,420 $81,240 $80,261
EBITDA of
non-comparable
centers (4,239) (3,976) (8,261) (7,921)
Unconsolidated
entities -- Same
Centers -- NOI
-- (l) $36,252 $36,444 $72,979 $72,340
Total Same
Centers --
NOI (l) $111,695 $109,930 $223,559 $219,935
(k) 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.
(l) 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