-- Funds from operations ("FFO") per share -- diluted increased to
$.95 for the quarter ended December 31, 2001 compared to $.91 for the
comparable period in 2000. FFO per share-diluted for the year
increased to $2.97 compared to $2.82 in 2000.
-- Net income per share-diluted increased to $.94 compared to $.50 for
the quarter ended December 31, 2000. For the year, net income per
share diluted was $1.72 compared to $1.11 for 2000. The increases
were primarily the result of recognizing a gain on sale of assets of
$.42 per share diluted in the fourth quarter of 2001 and $.54 per
share diluted for the year ended December 31, 2001.
-- During the quarter, Macerich signed new leases at average initial
rents of $37.25 per square foot, substantially in excess of average
portfolio minimum rents of $28.34. First year rents on mall and
freestanding store leases signed during the quarter were 27% higher
than expiring rents.
-- Portfolio occupancy remained high at 92.4% as of December 31, 2001,
which was consistent with the occupancy level at September 30, 2001
and down from 93.3% at December 31, 2000.
-- The quarterly dividend was increased to $ .55 per share.
-- Total same center tenant sales decreased .9% for the quarter ended
December 31, 2001 compared to the quarter ended December 31, 2000 and
decreased .1% for the year ended December 31, 2001 compared to 2000.
Tenant sales per square foot were $350 for 2001 compared to $349 in
2000.
Commenting on the results and major transactions for the quarter, Arthur
Coppola, President and Chief Executive Officer of Macerich stated, "Given the
soft economic climate, we were pleased with the fourth quarter results.
Occupancy remains high and we had strong leasing activity with new rents
substantially higher than expiring rents. The results continue to illustrate the
resiliency of our portfolio. We had several major transactions during the
quarter including acquiring five acres of land adjacent to Queens Center in New
York. This will give us the opportunity to increase the size of that dominant
center by adding over 400,000 square feet of retail space. The quarter was also
highlighted by the successful sale of Villa Marina Marketplace. That sale
resulted in a $24.7 million gain during the quarter and approximately $26
million of the net sale proceeds were used to retire convertible debentures.
This is indicative of our continued commitment to recycle our capital."
Operating Results for the Periods Ended December 31, 2001
Total revenues were $93.2 million for the quarter, compared to $91.6 million for the quarter ended December 31, 2000 and $334.6 million for the year ended December 31, 2001 compared to $320 million in 2000. The pro rata income of unconsolidated entities increased to $12.0 million for the quarter compared to $9.9 million for the quarter ended December 31, 2000 and $32.9 million for the year ended December 31, compared to $30.3 million for 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 $387,000 in the quarter compared to $805,000 during the quarter ended December 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. CPI increases included in minimum rents were approximately $332,000 greater than in the quarter ended December 31, 2000.
Same center earnings, before interest, taxes, depreciation and amortization, including joint ventures at pro rata, ("EBITDA") grew at a 4.1% pace for the year compared to 2000.
Gain on sale of assets was $24.8 million during the quarter ended December 31, 2001 compared to a loss on sale of assets of $1.5 million during the comparable quarter in 2000. The gain in 2001 resulted primarily from the sale of Villa Marina Marketplace. Villa Marina was sold in December 2001 for $99 million. The sale resulted in a $24.7 million gain on sale of the asset.
For the quarter ended December 31, 2001, FFO-diluted was $55.8 million compared to $53.8 million for the fourth quarter of 2000. For the year ended December 31, 2001, FFO-diluted was $175.1 million compared to $167.2 million in 2000. Net income available to common stockholders for the quarter was $35.5 million compared to $16.9 million for the fourth quarter of 2000 and net income per share diluted was $.94 compared to $.50 for the fourth quarter of 2000. Net income available to common stockholders for the year ended December 31, 2001 was $58.0 million or $1.72 per share diluted compared to $38.0 million or $1.11 per share diluted for 2000.
Quarterly Highlights
-- During the quarter, leases were signed for approximately 281,000
square feet of mall and freestanding space. The average rent on new
leases was $37.25 per square foot, 27% higher than expiring rents.
-- Total same center tenant sales for the quarter decreased .9% compared
to the fourth quarter of 2000.
-- Robinson-May completed a comprehensive renovation of their store at
Lakewood Center.
-- The Queens Center redevelopment and expansion project is now underway
with the acquisition of a five-acre site adjacent to the existing
mall. The expansion will increase the size of the mall from 620,000
square feet to approximately 1 million square feet, including the
addition of 250,000 square feet of mall shops. Construction is
expected to start in the second quarter of 2002 with completion
estimated, in phases, through late 2004.
-- Nordstrom completed a major renovation of their store at Los Cerritos
Center.
-- Swedish apparel retailer Hennes & Mauritz (H&M) opened a
19,427 square foot store at Queens Center.
Financing Activity
In October 2001, a $46 million, 10 year, fixed rate loan bearing interest at 7.45% was placed on Rimrock Mall in Billings, Montana. This loan replaced a $29 million, 7.7% fixed interest rate loan.
During the quarter, using proceeds from the sale of Villa Marina Marketplace, $25.7 million of the Company's convertible debentures were retired.
The Macerich Company is a fully integrated self-managed and self- administered real estate investment trust, which focuses on the acquisition, leasing, management and redevelopment of 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 four community centers totaling approximately 41 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 fourth quarter earnings conference call. The call will be available on The Macerich Company's website at www.macerich.com , through Vcall at www.vcall.com , and through Street Events at www.streetevents.com . The call begins today, February 19, at 10:30 Pacific Standard 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 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, acquisitions and dispositions; governmental actions and initiatives; 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 of Operations: For the Three Months For the Year
Ended December 31 Ended December 31
(UNAUDITED)
2001 2000 2001 2000
Minimum Rents 53,271 52,315 201,481 195,236
Percentage Rents (a) 7,014 7,402 12,394 12,558
Tenant Recoveries 29,297 29,796 109,163 104,125
Other Income 3,651 2,082 11,535 8,173
Total Revenues 93,233 91,595 334,573 320,092
Shopping center and
operating expenses (c) 30,221 28,443 110,827 101,674
Depreciation and
amortization 16,892 17,015 65,983 61,647
General, administrative
and other expenses 2,301 1,477 6,780 5,509
Interest expense 26,604 26,386 109,646 108,447
Gain < loss > on sale
of assets 24,787 (1,476) 24,491 (2,773)
Pro rata income of
unconsolidated
entities (c) 12,040 9,862 32,930 30,322
Income before minority
interest & extraordinary
items 54,042 26,660 98,758 70,364
Extraordinary < gain >
loss on early
extinguishment of debt 1,847 (679) 2,034 304
Cumulative effect of
change in accounting
principle (a) -- -- -- (963)
Income of the Operating
Partnership 52,195 27,339 96,724 69,097
Income allocated to
minority interests 11,659 5,446 19,001 12,168
Dividends earned by
preferred stockholders 5,013 5,013 19,688 18,958
Net income - available
to common stockholders 35,523 16,880 58,035 37,971
Average # of shares
outstanding - basic 33,935 33,977 33,809 34,095
Average shares outstanding
- basic, assuming full
conversion of OP Units (d) 45,088 44,945 44,963 45,050
Average shares
outstanding - diluted
for FFO (d) (e) 58,958 59,118 58,902 59,319
Per share income before
cumulative effect of
change in accounting
principle and extraordinary
item - diluted 0.97 0.48 1.76 1.14
Net income per share - basic 1.05 0.50 1.72 1.11
Net income per
share - diluted 0.94 0.50 1.72 1.11
Dividend declared per share 0.55 0.53 2.14 2.06
Funds from operations
"FFO" (b) (d) - basic 47,839 45,656 143,607 135,744
Funds from operations
"FFO" (b) (d) (e)
- diluted 55,797 53,757 175,068 167,244
FFO per share
- basic (b) (d) 1.06 1.02 3.19 3.01
FFO per share
- diluted (b) (d) (e) 0.95 0.91 2.97 2.82
% change in FFO - diluted 4.08% 5.42%
(a) 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 treatment at the
adoption date of January 1, 2000 was $963 for the wholly owned assets
and $787 for joint ventures on a prorata basis, which in accordance
with GAAP, was written off as a cumulative change in accounting
principle.
(b) 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.
(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 and for Macerich Management Company for all periods
presented and for The Macerich Property Management Company through
March 28, 2001.
Effective March 28, 2001, the Macerich Property Management Company was
converted from an unconsolidated preferred stock subsidiary into a
taxable reit subsidiary ("TRS") and as of that date the results of the
Macerich Property Management Company are now included in the
consolidated results of The Macerich Company.
(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) The Company issued $161,400 of convertible debentures in June and
July, 1997. The debentures are convertible into common shares at a
conversion price of $31.125 per share.
On February 25, 1998 the Company sold $100,000 of convertible
preferred stock and on June 17, 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 not assumed converted for 2000 or the full year 2001 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 in 2001 and 2000 and
net income per share in the fourth quarter of 2001 as they are
dilutive to those calculations.
Dec 31 Dec 31
Summarized Balance Sheet Information 2001 2000
(UNAUDITED)
Cash and cash equivalents 26,470 36,273
Investment in real estate, net (h) 1,887,329 1,933,584
Investments in unconsolidated entities (I) 278,526 273,140
Total Assets 2,294,502 2,337,242
Mortgage and notes payable 1,398,512 1,400,087
Convertible debentures 125,148 150,848
Dec 31 Dec 31
Additional financial data as of: 2001 2000
Occupancy of centers (f) 92.40% 93.30%
Comparable quarter change in same
center sales (f) (g) -0.90% 2.40
(f) excludes redevelopment properties- Crossroads Mall- Boulder, and
Parklane Mall.
(g) includes mall and freestanding stores.
(h) includes construction in process on wholly owned assets of
$71,161 at December 31, 2001 and $44,700 at December 31, 2000.
(I) the Company's prorata share of construction in process on
unconsolidated entities of $ 3,110 at December 31, 2001 and $4,860 at
December 31, 2000.
THE MACERICH COMPANY
FINANCIAL HIGHLIGHTS
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
PRORATA SHARE OF For the Three Months For the Year
JOINT VENTURES Ended December 31 Ended December 31
(Unaudited) (All amounts in thousands)
2001 2000 2001 2000
Revenues:
Minimum rents 28,599 27,299 106,610 101,973
Percentage rents 3,828 4,020 6,823 6,871
Tenant recoveries 11,141 11,453 43,622 41,367
Management fee 2,410 3,604 9,738 12,297
Other 1,598 1,247 4,334 3,502
Total revenues 47,576 47,623 171,127 166,010
Expenses:
Shopping center expenses 15,265 14,130 55,211 49,870
Interest expense 10,458 12,497 45,888 46,372
Management company expense 1,836 4,321 9,084 14,422
Depreciation and
amortization 7,833 6,285 28,077 24,472
Total operating expenses 35,392 37,233 138,260 135,136
Gain (loss) on sale
of assets (16) (337) 191 426
Extraordinary gain < loss >
on early extinguishment of
debt (128) (191) (128) (191)
Cumulative effect of change
in accounting principle -- -- -- (787)
Net income 12,040 9,862 32,930 30,322
RECONCILIATION OF For the Three Months For the Year
NET INCOME TO FFO Ended December 31 Ended December 31
(All amounts in thousands)
(UNAUDITED) (UNAUDITED)
2001 2000 2001 2000
Net income
- available to
common stockholders 35,523 16,880 58,035 37,971
Adjustments to
reconcile net
income to FFO - basic
Minority interest 11,659 5,446 19,001 12,168
Loss on early
extinguishment
of debt 1,847 (679) 2,034 304
(Gain) loss on
sale of wholly
owned assets (24,787) 1,476 (24,491) 2,773
(Gain) loss on
sale or write-down
of assets from
unconsolidated
entities (prorata) 144 528 (63) (235)
Depreciation and
amortization on
wholly owned
centers 16,892 17,015 65,983 61,647
Depreciation and
amortization on
joint ventures and
from the management
companies
(prorata) 7,833 6,285 28,077 24,472
Cumulative effect of
change in accounting
- wholly owned assets -- -- -- 963
Cumulative effect of
change in accounting
- prorata joint
ventures -- -- -- 787
Less: depreciation
on personal property
and amortization
of loan costs
and interest
rate caps (1,272) (1,295) (4,969) (5,106)
Total FFO - basic 47,839 45,656 143,607 135,744
Weighted average
shares outstanding
- basic (d) 45,088 44,945 44,963 45,050
Additional adjustment
to arrive at FFO
- diluted
Interest expense
and amortization
of loan costs on
the debentures (e) 2,945 3,088 11,773 12,542
Preferred stock
dividends earned 5,013 5,013 19,688 18,958
Effect of
employee/director
stock incentive
plans antidilutive antidilutive antidilutive antidilutive
FFO - diluted 55,797 53,757 175,068 167,244
Weighted average
shares outstanding
- diluted (d) (e) 58,958 59,118 58,902 59,319
SOURCE The Macerich Company
CONTACT:
Press, Arthur Coppola, President and Chief Executive Officer or
Thomas E. O'Hern, Executive Vice President and Chief Financial Officer of The
Macerich Company, +1-310-394-6000
URL:
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