SANTA MONICA, Calif., Nov. 5 /PRNewswire-FirstCall/ -- The Macerich Company (NYSE: MAC) today announced results of operations for the quarter and nine months ended September 30, 2004 which included funds from operations ("FFO") per share -- diluted increasing 12% to $.95 compared to $.85 for the quarter ended September 30, 2003 and increasing to $2.73 for the nine months ended September 30, 2004 compared to $2.54 for the comparable period in 2003. Total FFO -- diluted increased by 14% to $73 million for the quarter compared to $64 million for the quarter ended September 30, 2003 and to $210 million for the nine months ended September 30, 2004 compared to $191 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 September 30, 2004 was $17.3 million or $.29 per share-diluted compared to $39.7 million or $.69 per share-diluted for the quarter ended September 30, 2003. Net income in the quarter ended September 30, 2003 was positively impacted by net gain on sales of consolidated assets of $23 million or $.31 per share-diluted compared to a net loss on asset sales of $.1 million or $.00 per share for the quarter ended September 30, 2004. The gain on sale of assets was primarily due to the sale of Bristol Center in August 2003. For the nine months ended September 30, 2004 net income was $52 million or $.89 per share-diluted compared to $88 million or $1.64 per share-diluted for the nine months ended September 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 404,000 square feet of specialty
store leases at average initial rents of $34.39 per square foot.
First year rents on mall and freestanding store leases signed during
the quarter were 19% higher than average expiring rents.
* Total same center tenant sales, for the quarter ended September 30,
2004, were up 5.5% compared to sales levels for the quarter ended
September 30, 2003.
* Portfolio occupancy at September 30, 2004 was 91.8% compared to 92.9%
at September 30, 2003. On a same center basis occupancy was 92.0% at
September 30, 2004 compared to 92.4% at September 30, 2003.
* The Company announced an increased quarterly dividend of $.65 per
share payable on December 9, 2004 to stockholders of record on
November 15, 2004. This represents the 10th consecutive year that
Macerich has increased its dividend.
Commenting on results and recent events, Arthur Coppola, President and Chief Executive Officer of Macerich stated, "The quarter was highlighted by continued strong leasing activity including very positive releasing spreads. Occupancy continues to be strong.
"We are very near final completion on the Queens Center renovation and expansion and expect to see a 12% return on cost. That project will help fuel strong FFO growth in 2005 and beyond. In addition, we continue to make significant progress on our other development and redevelopment projects which provide a very strong internal pipeline for growth."
Redevelopment and Development Activity
At Queens Center, the multi-phased $275 million redevelopment and expansion nears completion. The grand opening is set for the weekend of November 19th. The project increases the size of the center from 620,000 square feet to approximately one million square feet. As part of the redevelopment, Macy's has added a fifth level to their store increasing their size to approximately 365,000 square feet and JC Penney has expanded their presence from 137,000 to 202,000 square feet by building a new store. During the course of the last 12 months, 92 new or expanded stores have opened at Queens Center. New tenants recently opened include Banana Republic, Godiva, Guess, Coach, Aldo Shoes, Club Monaco, Benetton, American Eagle Outfitters, and Bostonian. Tenants who have recently expanded their presence at Queens Center include, The Gap, H & M, Victoria's Secret and Forever 21. Tenants which are expected to open shortly after the Grand Opening include Urban Outfitters, Applebee's Neighbor Bar & Grill, GNC and Queens Diner.
Leasing activity has been robust as the overall property is 98% leased. By December 31, 2004, 91% of all spaces are expected to be open and operating with the remaining 7% of leased spaces expected to open during the first and second quarter of 2005.
At Fresno Fashion Fair, the Company is pursuing entitlements for the addition of a 92,780 square foot lifestyle retail center. Subject to the timing of entitlements, the planned opening of this expansion is late 2005.
At Washington Square in suburban Portland the Company is proceeding with an expansion project which consists of the addition of 80,000 square feet of shop space. The expansion is scheduled to start in January 2005 with substantial completion earmarked for the fourth quarter of 2005.
During the quarter, the Company unveiled its plans for San Tan Village. The 500 acre master planned Gilbert project will unfold during several phases of development which will be driven by market and retailers' needs. Upon full completion, San Tan Village will represent 3,000,000 square feet of retail space. Phase I, featuring a 29 acre full service power center, will open a Wal-Mart in 2005 followed by a Sam's Club later in the year. Phase II represents an additional 308,000 square feet of gross leaseable area. Leases have been signed with OfficeMax, Jo-Ann Superstore, Bed Bath & Beyond, Marshall's and DSW Designer Shoes representing 157,000 square feet. Phase II is projected to open September 2005. The regional shopping center component of San Tan Village sits on 120 acres representing 1.3 million square feet. The center's multi-faceted design will incorporate the very best elements from other retail formats including the successful traditional enclosed mall anchored by Dillard's and May Co.'s Robinsons-May, an open-air lifestyle center and an 18-screen Harkins Theatre entertainment district. Infrastructure improvements are underway. The entertainment district could open as early as 2006 followed by a projected Fall 2007 opening for the majority of the balance of the center.
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.
Fiesta Mall is under contract for acquisition, with the closing expected in November. The acquisition of Fiesta will further solidify Macerich's dominance in the Phoenix market. Fiesta is a 1,000,000 square foot super regional mall. It is anchored by Dillard's, Macy, Sears, Robinson May. The malls shops have annual sales of $362. The purchase price is $135 million. Concurrent with, or shortly after the planned November closing, the Company expects to place a 10 year $84 million fixed rate loan at 4.87%.
Financing Activity
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 its year 2004 FFO per share guidance range and revising its EPS guidance as follows:
Range per share:
Fully Diluted EPS $1.71 .........$1.78
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 $3.88..........$3.95
In addition management is also providing guidance for 2005. Management currently estimates that FFO per share for 2005 will be in the range of $4.20 to $4.30 and EPS is estimated to be in the range of $2.05 to $2.15.
Guidance for 2005 and reconciliation of EPS to FFO per share and to EBITDA per share:
Range per share:
Fully Diluted EPS $2.05.........$2.15
Plus: Real Estate Depreciation and
Amortization $2.25.........$2.25
Less: impact of preferred shares (not
dilutive to EPS) ($.10)........($.10)
Less: Gain on Sale of Assets $.00.......... $.00
Fully Diluted FFO per share $4.20.........$4.30
Plus: Interest Expense per share $3.15.........$3.25
Plus: Non real estate depreciation,
income taxes and ground rent expense
per share $.16...........$.16
EBITDA per share $7.51.........$7.71
Less: management company expenses,
REIT
General and administrative expenses
and EBITDA of non-comparable centers ($1.00)......($1.10)
Same center EBITDA per share $6.51.........$6.61
This range is based on many assumptions, including the following:
Management expects 2005 same center EBITDA to grow at a 2.5% to 3.0% rate compared to 2004 results. 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 has assumed short-term LIBOR interest rates will increase to 3.0% by year-end 2005.
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 or are under contract as of November 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, November 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)
For the For the For the
Results Three Months Three Months Three Months
of Operations: Ended Sept. 30 Ended Sept. 30 Ended Sept. 30
Unaudited Unaudited
2004 2003 2004 2003 2004 2003
Minimum Rents (e) 84,028 71,720 (44) (435) 83,984 71,285
Percentage Rents 3,338 2,071 -- -- 3,338 2,071
Tenant Recoveries 37,194 39,574 (2) (34) 37,192 39,540
Other Income 3,858 4,356 (9) (33) 3,849 4,323
Total Revenues 128,418 117,721 (55) (502) 128,363 117,219
Shopping center
and operating
expenses (c) 39,395 42,940 (4) (208) 39,391 42,732
Depreciation and
amortization 35,644 25,364 (3) (87) 35,641 25,277
General,
administrative
and other
expenses (c) 2,788 1,687 -- -- 2,788 1,687
Interest expense 37,507 31,858 -- -- 37,507 31,858
Loss on early
extinguishment
of debt 1,237 126 -- -- 1,237 126
Gain (loss) on
sale or
writedown of
assets (101) 23,015 21 (22,289) (80) 726
Pro rata income
(loss) of
unconsolidated
entities (c) 12,090 13,252 -- -- 12,090 13,252
Income (loss)
of the
Operating
Partnership from
continuing
operations 23,836 52,013 (27)(22,496) 23,809 29,517
Discontinued
Operations:
Gain (loss)
on sale
of asset -- -- (21) 22,289 (21) 22,289
Income from
discontinued
operations -- -- 48 207 48 207
Income before
minority
interests 23,836 52,013 -- -- 23,836 52,013
Income allocated
to minority
interests 4,180 10,214 -- -- 4,180 10,214
Net income
before
preferred
dividends 19,656 41,799 -- -- 19,656 41,799
Dividends
earned by
preferred
stockholders (a) 2,358 2,067 -- -- 2,358 2,067
Net income to
common
stockholders 17,298 39,732 -- -- 17,298 39,732
Average # of
shares
outstanding -
basic 58,673 53,396 58,673 53,396
Average shares
outstanding,-
basic,
assuming
full conversion
of OP Units (d) 72,851 67,042 72,851 67,042
Average shares
outstanding -
diluted for
FFO (d) 76,837 75,307 76,837 75,307
Per share
income-diluted
before
discontinued
operations -- -- 0.29 0.39
Net income
per share-basic 0.29 0.74 0.29 0.74
Net income
per share-diluted 0.29 0.69 0.29 0.69
Dividend
declared
per share 0.61 0.57 0.61 0.57
Funds from
operations
"FFO"
(b) (d)- basic 70,529 61,696 70,529 61,696
Funds from
operations
"FFO"
(a) (b) (d) -
diluted 72,887 63,763 72,887 63,763
FFO per share-
basic
(b) (d) 0.97 0.92 0.97 0.92
FFO per share-
diluted
(a) (b) (d) 0.95 0.85 0.95 0.85
percentage
change from
prior year -
same period: 12.03%
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)
For the For the For the
Results Nine Months Nine Months Nine Months
of Operations: Ended Sept. 30 Ended Sept. 30 Ended Sept. 30
Unaudited Unaudited
2004 2003 2004 2003 2004 2003
Minimum Rents (e) 240,101 217,788 (212) (2,551) 239,889 215,237
Percentage Rents 8,165 5,041 -- -- 8,165 5,041
Tenant Recoveries 120,035 115,329 (4) (336) 120,031 114,993
Other Income 12,767 12,233 (168) (58) 12,599 12,175
Total Revenues (e) 381,068 350,391 (384) (2,945) 380,684 347,446
Shopping center
and operating
expenses ( c) 129,774 125,150 (16) (856) 129,758 124,294
Depreciation
and amortization 105,256 73,853 (48) (460) 105,208 73,393
General,
administrative
and other
expenses (c) 8,084 6,742 -- -- 8,084 6,742
Interest expense 105,595 98,847 -- -- 105,595 98,847
Loss on early
extinguishment
of debt 1,642 126 -- -- 1,642 126
Gain on
sale or
writedown of
assets 994 34,567 (295)(22,119) 699 12,448
Pro rata income
of
unconsolidated
entities (c) 40,250 42,859 -- -- 40,250 42,859
Income (loss)
of the
Operating
Partnership
from
continuing
operations 71,961 123,099 (615)(23,748) 71,346 99,351
Discontinued
Operations:
Gain on sale
of asset -- -- 295 22,119 295 22,119
Income from
discontinued
operations -- -- 320 1,629 320 1,629
Income before
minority
interest 71,961 123,099 -- -- 71,961 123,099
Income allocated
to minority
interests 12,650 22,913 -- -- 12,650 22,913
Net income
before preferred
dividends 59,311 100,186 -- -- 59,311 100,186
Dividends
earned by
preferred
stockholders (a) 6,783 12,458 -- -- 6,783 12,458
Net income
to common
stockholders 52,528 87,728 -- -- 52,528 87,728
Average #
of shares
outstanding -
basic 58,479 52,305 58,479 52,305
Average shares
outstanding,
-basic,
assuming full
conversion of
OP Units (d) 72,669 65,995 72,669 65,995
Average shares
outstanding -
diluted for
FFO (d) 76,681 75,124 76,681 75,124
Per share
income-diluted
before
discontinued
operations -- -- 0.88 1.32
Net income
per share-
basic 0.90 1.68 0.90 1.68
Net income
per share-diluted 0.89 1.64 0.89 1.64
Dividend
declared
per share 1.83 1.71 1.83 1.71
Funds from
operations
"FFO"
(b) (d)-
basic 202,835 178,351 202,835 178,351
Funds from
operations
"FFO"
(a) (b) (d) -
diluted 209,618 190,809 209,618 190,809
FFO per share-
basic
(b) (d) 2.79 2.70 2.79 2.70
FFO per share-
diluted
(a) (b) (d) 2.73 2.54 2.73 2.54
percentage
change
from prior
year - same
period: 7.63%
(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 1 for 1 basis for common stock. These
preferred shares are assumed converted for purposes of net income
per share for 2003 and are not assumed converted for purposes of
net income per share for 2004 as it would be antidilutive to those
calculations. 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 nine months ended September 30, 2004 by $537 and
$2,955 respectively, or by $.01 per share and $.04 per share,
respectively. Additionally, the impact of SFAS No. 141 increased
FFO for the three and nine months ended September 30, 2004 by
$4.2 million and $7.9 million, respectively, or by $.05 per share
and approximately $.10 per share, respectively. The inclusion of
gains on sales of peripheral land increased FFO for the 3 and
9 months ended September 30, 2003 by $663 and $1,252, respectively,
or by approximately $.01 per share and $.02 per share, respectively.
Additionally, the impact of SFAS 141 increased FFO for the three and
nine months ended September 30, 2003 by $1.2 million and
$3.5 million, respectively, or by $.015 per share and $.047 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 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 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.
(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. The impact on
diluted EPS for the three and nine months ended September 30, 2004
was approximately $.06 and $.11 per share respectively. The impact
on diluted EPS for the three and nine months periods ending
September 30, 2003 was approximately $.02 per share and $.05 per
share, respectively. In accordance with the NAREIT definition of
FFO, the impact of this accounting treatment is included in FFO.
(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 September
30, 2003 and the results for the period July 1 to September 30, 2003
have been reclassified to discontinued operations. The sale of
Bristol Center resulted in a gain on sale of asset of $22.3 million.
Sept. 30 Dec. 31
Summarized Balance Sheet Information 2004 2003
(UNAUDITED)
Cash and cash equivalents $52,706 $47,160
Investment in real estate, net (i) $3,382,285 $3,186,725
Investments in unconsolidated entities (j) $614,728 $577,908
Total Assets $4,400,373 $4,145,593
Mortgage and notes payable $2,993,430 $2,682,599
Pro rata share of debt on unconsolidated
entities $1,161,043 $1,046,042
Sept. 30 Sept. 30
Additional financial data as of: 2004 2003
Additional financial data as of:
Occupancy of centers (g):
consolidated assets 91.40% 91.60%
unconsolidated assets 92.10% 93.90%
total portfolio 91.80% 92.90%
Comparable quarter change in same center
sales (g) (h):
consolidated assets 3.90% 0.00%
unconsolidated assets 7.00% 3.50%
total portfolio 5.50% 1.90%
Sales per square foot (h):
consolidated assets $364 $345
unconsolidated assets $392 $366
total portfolio $378 $356
Additional financial data for the nine
months ended:
Acquisitions of property and equipment -
including joint ventures prorata $197,313 $152,370
Redevelopment and expansions of centers -
including joint ventures prorata $118,545 $121,377
Renovations of centers - including joint
ventures at prorata $22,847 $12,016
Tenant allowances - including
joint ventures at prorata $11,437 $5,675
Deferred leasing costs - including
joint ventures at prorata $13,825 $14,074
(g) excludes redevelopment properties -
Crossroads Mall - Boulder, Queens,
Scottsdale 101, La Encantada,
Santa Monica Place and Parklane Mall.
(h) includes mall and freestanding stores.
(i) includes construction in process
on wholly owned assets of $160,872
at September 30, 2004 and $268,810
at December 31, 2003.
(j) the Company's prorata share of
construction in process on unconsolidated
entities of $26,468 at September 30,
2004 and $8,188 at December 31, 2003.
For the Three Months For the Nine Months
PRORATA SHARE OF Ended Sept. 30, Ended Sept. 30,
JOINT VENTURES Unaudited Unaudited
(Unaudited) (All amounts in thousands) (All amounts in thousands)
2004 2003 2004 2003
Revenues:
Minimum rents $45,794 $38,978 $128,786 $117,655
Percentage rents 1,725 1,250 4,454 3,538
Tenant recoveries 19,544 17,048 55,999 50,005
Management fee ( c ) -- -- -- 5,250
Other 1,496 1,077 4,772 3,381
Total revenues 68,559 58,353 194,011 179,829
Expenses:
Shopping center
expenses 23,046 19,425 67,257 57,625
Interest expense 17,906 14,395 47,936 42,311
Management company
expense ( c ) -- -- -- 3,014
Depreciation and
amortization 15,854 11,240 40,988 34,180
Total operating
expenses 56,806 45,060 156,181 137,130
Gain (loss) on sale
or writedown of assets 498 (41) 2,581 160
Loss on early
extinguishment
of debt (161) -- (161) --
Net income 12,090 13,252 40,250 42,859
RECONCILIATION OF For the Three Months For the Nine Months
NET INCOME Ended Sept. 30, Ended Sept. 30,
TO FFO (All amounts in thousands)(All amounts in thousands)
(UNAUDITED) (UNAUDITED)
2004 2003 2004 2003
Net income -
available to
common
stockholders $17,298 $39,732 $52,528 $87,728
Adjustments to
reconcile net
income to
FFO- basic
Minority interest 4,180 10,214 12,650 22,913
(Gain) loss
on sale of
wholly owned
assets 101 (23,015) (994) (34,567)
Add Gain (loss)
on land sales
- consolidated
assets 5 705 339 859
(Gain) loss
on sale or
write-down of
assets from
unconsolidated
entities
(pro rata) (498) 41 (2,581) (160)
Add Gain
(loss) on
land sales -
unconsolidated
assets 533 (41) 2,616 392
Depreciation and
amortization
on wholly
owned centers 35,644 25,364 105,256 73,853
Depreciation
and amortization
on joint
ventures and
from the
management
companies
(pro rata) 15,854 11,240 40,988 34,180
Less:
depreciation
on personal
property and
amortization of
loan costs
and interest
rate caps (2,588) (2,544) (7,967) (6,847)
Total FFO -
basic 70,529 61,696 202,835 178,351
Additional
adjustment to
arrive at FFO -
diluted
Preferred
stock dividends
earned 2,358 2,067 6,783 12,458
Effect of
employee/director
stock
incentive plans -- -- -- --
FFO - diluted 72,887 63,763 209,618 190,809
Weighted average
shares
outstanding -
diluted (d) 76,837 75,307 76,681 75,124
For the Three Months For the Nine Months
Ended Sept. 30 Ended Sept. 30
(All amounts in thousands) (All amounts in thousands)
(UNAUDITED) (UNAUDITED)
Reconciliation of
EPS to FFO
per diluted share: 2004 2003 2004 2003
Earnings per share $0.29 $0.69 $0.89 $1.64
Per share impact
of depreciation
and amortization
real estate $0.67 $0.46 $1.90 $1.35
Per share impact
of gain on
sale of
depreciated assets $0.00 ($0.30) ($0.01) ($0.45)
Per share
impact of
preferred stock
not dilutive
to EPS ($0.01) $0.00 ($0.05) $0.00
Fully Diluted FFO
per share $0.95 $0.85 $2.73 $2.54
THE MACERICH
COMPANY
RECONCILIATION
OF NET INCOME For the Three Months For the Nine Months
TO EBITDA Ended Sept. 30, Ended Sept. 30,
(All amounts in thousands) (All amounts in thousands)
(UNAUDITED) (UNAUDITED)
2004 2003 2004 2003
Net income -
available to
common stockholders 17,298 39,732 52,528 87,728
Interest expense 37,507 31,858 105,595 98,847
Interest expense -
unconsolidated
entities (pro
rata) 17,906 14,395 47,936 42,311
Depreciation
and amortization -
wholly-owned
centers 35,644 25,364 105,256 73,853
Depreciation and
amortization -
unconsolidated
entities
(pro rata) 15,854 11,240 40,988 34,180
Minority interest 4,180 10,214 12,650 22,913
Loss on early
extinguishment
of debt 1,237 126 1,642 126
Loss on early
extinguishment
of debt -
unconsolidated
entities (pro rata) 161 -- 161 --
Loss (gain)
on sale of
assets -
wholly-owned
centers 101 (23,015) (994) (34,567)
Loss (gain)
on sale of
assets -
unconsolidated
entities
(pro rata) (498) 41 (2,581) (160)
Preferred
dividends 2,358 2,067 6,783 12,458
EBITDA (k) $131,748 $112,022 $369,964 $337,689
THE MACERICH
COMPANY
RECONCILIATION
OF EBITDA TO
SAME CENTERS -
NET OPERATING
INCOME ("NOI")
For the Three Months For the Nine Months
Ended Sept. 30, Ended Sept. 30,
(All amounts in thousands) (All amounts in thousands)
(UNAUDITED) (UNAUDITED)
2004 2003 2004 2003
EBITDA (k) $131,748 $112,022 $369,964 $337,689
Add: REIT general
and administrative
expenses 2,788 1,687 8,084 6,742
Management Company
expenses (317) 2,960 5,280 7,768
EBITDA of
non-comparable
centers (25,383) (9,135) (53,992) (29,944)
SAME CENTERS -
Net operating
income ("NOI")
(l) $108,836 $107,534 $329,336 $322,255
(k) EBITDA represents earnings before interest, income taxes,
depreciation, amortization, minority interest, extraordinary items,
gain (loss) on sale of assets, gain (loss) on early extinguishment
of debt 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 Macerich Company
CONTACT: Arthur Coppola, President and Chief Executive Officer, or
Thomas E. O'Hern, Executive Vice President and Chief Financial Officer, both
of Macerich Company, +1-310-394-6000
Web site: http://www.fulldisclosure.com
Web site: http://www.macerich.com
(MAC)