Recent Activity:
-- During the quarter,
-- The Company completed three joint venture transactions generating over
-- Portfolio occupancy at
-- On
-- Tenant sales per square foot were
Commenting on the quarter,
Redevelopment and Development Activity
On
At
Phase I of
Financing Activity
During the quarter
After considering extensions and other loans committed but not yet closed, the Company's remaining debt maturities for 2009 are only
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
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
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, terms 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; the liquidity of real estate investments, 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
(See attached tables)
THE MACERICH COMPANY
FINANCIAL HIGHLIGHTS
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
Results of Operations:
Results before Impact of SFAS Results after
SFAS 144 (a) 144 (a) SFAS 144 (a)
-------------- -------------- --------------
For the For the For the
Three Months Three Months Three Months
Ended Ended Ended
September 30, September 30, September 30,
------------- ------------- -------------
Unaudited Unaudited
--------- ---------
2009 2008 (b) 2009 2008 2009 2008 (b)
---- -------- ---- ---- ---- --------
Minimum rents $119,903 $133,985 (414) ($2,902) $119,489 $131,083
Percentage
rents 3,909 4,114 - - 3,909 4,114
Tenant
recoveries 59,754 70,059 55 (642) 59,809 69,417
Management
Companies'
revenues 10,449 10,261 - - 10,449 10,261
Other income 6,648 7,388 (8) (2) 6,640 7,386
----- ----- --- --- ----- -----
Total revenues 200,663 225,807 (367) (3,546) 200,296 222,261
-------------- ------- ------- ---- ------ ------- -------
Shopping center
and operating
expenses 65,160 74,100 (208) (899) 64,952 73,201
Management
Companies'
operating
expenses 16,400 19,014 - - 16,400 19,014
Income tax
expense
(benefit) 302 (362) - - 302 (362)
Depreciation
and
amortization 61,856 66,637 (41) (700) 61,815 65,937
REIT general
and
administrative
expenses 7,084 2,881 - - 7,084 2,881
Interest
expense (b) 65,779 73,889 - - 65,779 73,889
Loss on early
extinguishment
of debt (455) - - - (455) -
Gain (loss) on
sale or write
down of assets 161,580 (5,178) (3,968) 961 157,612 (4,217)
Equity in
income of
unconsolidated
joint ventures
(c) 19,165 19,928 - - 19,165 19,928
Income from
continuing
operations 164,372 4,398 (4,086) (986) 160,286 3,412
Discontinued
operations:
Gain (loss) on
sale or
disposition of
assets - - 3,968 (961) 3,968 (961)
Income from
discontinued
operations - - 118 1,947 118 1,947
Total income
from
discontinued
operations - - 4,086 986 4,086 986
Net income 164,372 4,398 - - 164,372 4,398
Less net income
attributable to
noncontrolling
interests 21,534 925 - - 21,534 925
Net income
attributable
the Company 142,838 3,473 - - 142,838 3,473
Less preferred
dividends (d) - 835 - - - 835
Net income
available to
common
stockholders $142,838 $2,638 - - $142,838 $2,638
------------- -------- ------ --- --- -------- ------
Average number
of shares
outstanding -
basic 79,496 74,931 79,496 74,931
--------------- ------ ------ ------ ------
Average shares
outstanding,
assuming full
conversion of
OP Units (e) 91,347 87,439 91,347 87,439
------ ------ ------ ------
Average shares
outstanding -
Funds From
Operations
("FFO") -
diluted (d) (e) 91,347 88,333 91,347 88,333
---------------- ------ ------ ------ ------
Per share
income- diluted
before
discontinued
operations - - $1.71 $0.02
------------- --- --- ----- -----
Net income per
share-basic
(b) $1.75 $0.03 $1.75 $0.03
-------------- ----- ----- ----- -----
Net income per
share- diluted
(b) (d) (e) $1.75 $0.03 $1.75 $0.03
---------------- ----- ----- ----- -----
Dividend
declared per
share $0.60 $0.80 $0.60 $0.80
------------- ----- ----- ----- -----
FFO - basic
(b) (e) (f) $88,650 $97,711 $88,650 $97,711
------------- ------- ------- ------- -------
FFO - diluted
(b) (d) (e) (f) $88,650 $98,546 $88,650 $98,546
---------------- ------- ------- ------- -------
FFO per share-
basic (b) (e)
(f) $0.97 $1.12 $0.97 $1.12
---------------- ----- ----- ----- -----
FFO per share-
diluted (b)
(d) (e) (f) $0.97 $1.12 $0.97 $1.12
--------------- ----- ----- ----- -----
THE MACERICH COMPANY
FINANCIAL HIGHLIGHTS
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
Results of Operations:
Results before Impact of SFAS Results after
SFAS 144 (a) 144 (a) SFAS 144 (a)
-------------- -------------- --------------
For the For the For the
Nine Months Nine Months Nine Months
Ended Ended Ended
September 30, September 30, September 30,
------------- ------------- -------------
Unaudited Unaudited
--------- ---------
2009 2008 (b) 2009 2008 2009 2008 (b)
---- -------- ---- ---- ---- --------
Minimum rents $370,879 $396,745 (3,634) ($8,673) $367,245 $388,072
Percentage
rents 9,396 9,772 6 - 9,402 9,772
Tenant
recoveries 187,194 204,956 (220) (1,916) 186,974 203,040
Management
Companies'
revenues 28,335 30,334 - - 28,335 30,334
Other income 21,552 20,776 (15) (356) 21,537 20,420
------ ------ --- ---- ------ ------
Total revenues 617,356 662,583 (3,863) (10,945) 613,493 651,638
-------------- ------- ------- ------ ------- ------- -------
Shopping center
and operating
expenses 203,504 214,407 (1,667) (2,727) 201,837 211,680
Management
Companies'
operating
expenses 58,702 57,886 - - 58,702 57,886
Income tax
benefit (878) (750) - - (878) (750)
Depreciation and
amortization 190,507 185,538 (1,214) (2,431) 189,293 183,107
REIT general and
administrative
expenses 16,989 11,419 - - 16,989 11,419
Interest expense
(b) 207,631 220,299 - - 207,631 220,299
Gain on early
extinguishment
of debt 29,145 - - - 29,145 -
Gain (loss) on
sale or write
down of assets 136,731 95,135 23,045 (98,189) 159,776 (3,054)
Equity in income
of
unconsolidated
joint ventures
(c) 49,647 67,172 - - 49,647 67,172
Income from
continuing
operations 156,424 136,091 22,063 (103,976) 178,487 32,115
Discontinued
operations:
(Loss) gain on
sale or
disposition of
assets - - (23,045) 98,189 (23,045) 98,189
Income from
discontinued
operations - - 982 5,787 982 5,787
Total (loss)
income from
discontinued
operations - - (22,063) 103,976 (22,063) 103,976
Net income 156,424 136,091 - - 156,424 136,091
Less net income
attributable to
noncontrolling
interests 21,306 20,994 - - 21,306 20,994
Net income
attributable to
the Company 135,118 115,097 - - 135,118 115,097
Less preferred
dividends (d) - 4,124 - - - 4,124
Net income
available to
common
stockholders $135,118 $110,973 - - $135,118 $110,973
------------- -------- -------- --- --- -------- --------
Average number
of shares
outstanding -
basic 77,898 73,688 77,898 73,688
--------------- ------ ------ ------ ------
Average shares
outstanding,
assuming full
conversion of OP
Units (e) 89,635 86,483 89,635 86,483
------ ------ ------ ------
Average shares
outstanding -
Funds From
Operations
("FFO") -
diluted (d) (e) 89,635 88,418 89,635 88,418
---------------- ------ ------ ------ ------
Per share income-
diluted before
discontinued
operations - - $1.96 $0.29
----------------- --- --- ----- -----
Net income per
share-basic (b) $1.71 $1.50 $1.71 $1.50
----------------- ----- ----- ----- -----
Net income per
share- diluted
(b) (d) (e) $1.71 $1.50 $1.71 $1.50
---------------- ----- ----- ----- -----
Dividend
declared per
share $2.00 $2.40 $2.00 $2.40
------------- ----- ----- ----- -----
FFO - basic (b)
(e) (f) $251,410 $286,534 $251,410 $286,534
--------------- -------- -------- -------- --------
FFO - diluted
(b) (d) (e)
(f) $251,410 $290,658 $251,410 $290,658
--------------- -------- -------- -------- --------
FFO per share-
basic (b) (e)
(f) $2.80 $3.32 $2.80 $3.32
---------------- ----- ----- ----- -----
FFO per share-
diluted (b) (d)
(e) (f) $2.80 $3.29 $2.80 $3.29
----------------- ----- ----- ----- -----
THE MACERICH COMPANY
FINANCIAL HIGHLIGHTS
(IN THOUSANDS, EXCEPT SHARE AND PER SHARE AMOUNTS)
(a) SFAS No. 144, "Accounting for the Impairment or Disposal of Long-
Lived Assets" ("SFAS 144") addresses financial accounting and
reporting for the impairment or disposal of long-lived assets. The
following dispositions impacted the results for the three and nine
months ended September 30, 2009 and 2008:
On April 25, 2005 , in connection with the acquisition of Wilmorite
Holdings, L.P. and its affiliates, the Company issued as part of the
consideration participating and non-participating convertible
preferred units in MACWH, LP . On January 1, 2008 , a subsidiary of
the Company, at the election of the holders, redeemed approximately
3.4 million participating convertible preferred units in exchange for
the distribution of the interests in the entity which held that
portion of the Wilmorite portfolio that consisted of Eastview
Commons , Eastview Mall , Greece Ridge Center, Marketplace Mall and
Pittsford Plaza ("Rochester Properties"). This exchange is referred
to as the "Rochester Redemption." As a result of the Rochester
Redemption , the Company recorded a gain of $99.3 million and
classified the gain to discontinued operations.
On December 19, 2008 , the Company sold the fee simple and/or ground
leasehold interests in three freestanding Mervyn's buildings to the
Pacific Premier Retail Trust joint venture for $43.4 million . As a
result of the sale, the Company has classified the results of
operations to discontinued operations for all periods presented.
On July 14, 2009 , the Company sold Village Center, a 170,801 square
foot urban village property, for $11.8 million . During the period of
July 15, 2009 through July 30, 2009 , the Company sold five Kohl's
stores for approximately $52.7 million . As a result of these sales,
the Company has classified the results of operations to discontinued
operations for all periods presented.
(b) On January 1, 2009 , the Company adopted FASB Staff Position APB 14-1,
"Accounting for Convertible Debt Instruments That May Be Settled Upon
Conversion (Including Partial Cash Settlement)" (FSP APB 14-1"). As a
result, the Company retrospectively applied FSP APB 14-1 to the three
and nine months ended September 30, 2008 resulting in an increase to
interest expense of $3.6 million and $10.7 million , respectively,
and a decrease to net income available to common stockholders of
$3.0 million and $9.1 million , respectively, or $0.04 and $0.12 per
share, respectively. FSP APB 14-1 decreased FFO for the three and
nine months ended September 30, 2008 by $3.6 million and $7.1
million , respectively, or by $0.04 per share and $0.12 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) On February 25, 1998 , the Company sold $100 million of convertible
preferred stock representing 3.627 million shares. The convertible
preferred shares were convertible on a 1 for 1 basis for common
stock.
On October 18, 2007 , 560,000 shares of convertible preferred stock
were converted to common shares. Additionally, on May 6, 2008 , May 8,
2008 and September 18, 2008 , 684,000, 1,338,860 and 1,044,271 shares
of convertible preferred stock were converted to common shares,
respectively. As of December 31, 2008 , there was no convertible
preferred stock outstanding.
The preferred shares were assumed converted for purposes of net
income per share - diluted for the three and nine months ended
September 30, 2008 . The weighted average preferred shares are assumed
converted for purposes of FFO per share - diluted for 2008.
(e) The Macerich Partnership, L.P. (the "Operating Partnership" or the
"OP") has operating partnership units ("OP units"). OP units can be
converted into shares of Company common 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 share and unit-based compensation
plans and convertible senior notes using the treasury stock method.
It also assumes conversion of MACWH, LP preferred and common units to
the extent they are dilutive to the calculation.
(f) 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. The Company also cautions
that FFO as presented, may not be comparable to similarly titled
measures reported by other real estate investment trusts.
Gains or losses on sales 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 nine months
ended September 30, 2009 and 2008 by $0.8 million , $3.3 million ,
$0.6 million and $3.6 million , respectively, or by $0.01 per share,
$0.04 per share, $0.01 per share and $0.04 per share, respectively.
Additionally, SFAS 141 increased FFO for the three and nine months
ended September 30, 2009 and 2008 by $3.2 million , $10.4 million ,
$4.7 million and $13.2 million , respectively, or by $0.04 per share,
$0.12 per share, $0.05 per share and $0.15 per share, respectively.
THE MACERICH COMPANY
FINANCIAL HIGHLIGHTS
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
Pro rata share of joint ventures:
For the For the
Three Months Nine Months
Ended Ended
September 30, September 30,
-------------- --------------
Unaudited Unaudited
----------- -----------
2009 2008 2009 2008
---- ---- ---- ----
Revenues:
Minimum rents $72,756 $68,828 $204,733 $202,262
Percentage rents 2,857 2,856 5,712 7,261
Tenant recoveries 35,310 33,024 99,187 97,072
Other 4,361 3,362 11,009 17,371
----- ----- ------ ------
Total revenues 115,284 108,070 320,641 323,966
------- ------- ------- -------
Expenses:
Shopping center and operating
expenses 39,982 36,487 111,156 108,400
Interest expense 27,448 25,923 78,747 77,850
Depreciation and amortization 28,552 26,292 80,961 74,326
------ ------ ------ ------
Total operating expenses 95,982 88,702 270,864 260,576
------ ------ ------- -------
(Loss) gain on sale or write down
of assets (309) 349 (298) 3,272
Equity in income of joint ventures 172 211 168 510
--- --- --- ---
Net income $19,165 $19,928 $49,647 $67,172
------- ------- ------- -------
Reconciliation of Net income to
FFO (f):
For the For the
Three Months Nine Months
Ended Ended
September 30, September 30,
-------------- --------------
Unaudited Unaudited
----------- -----------
2009 2008 2009 2008
---- ---- ---- ----
Net income - available to common
stockholders $142,838 $2,638 $135,118 $110,973
Adjustments to reconcile net income
to FFO - basic
Noncontrolling interests in OP 21,520 386 20,351 19,051
(Gain) loss on sale or write down
of consolidated assets (161,580) 5,178 (136,731) (95,135)
plus gain on undepreciated
asset sales- consolidated
assets 792 224 3,289 798
plus noncontrolling
interests share of gain
on sale or write-down
of consolidated joint
ventures - - 310 589
less write down of
consolidated assets (589) - (28,228) -
Loss (gain) on sale or write-down
of assets from unconsolidated
entities (pro rata) 309 (349) 298 (3,272)
plus (loss) gain on
undepreciated asset
sales- unconsolidated
entities (pro rata share) (26) 328 (24) 2,764
plus noncontrolling interests
in gain on sale of
unconsolidated entities - - - 487
less write down of assets -
unconsolidated entities
(pro rata share) (282) - (282) -
Depreciation and amortization on
consolidated assets 61,856 66,637 190,507 185,538
Less depreciation and amortization
allocable to noncontrolling
interests on consolidated joint
ventures (1,117) (1,065) (3,247) (2,426)
Depreciation and amortization on
joint ventures (pro rata) 28,552 26,292 80,961 74,326
Less: depreciation on personal
property (3,623) (2,558) (10,912) (7,159)
------ ------ ------- ------
Total FFO - basic 88,650 97,711 251,410 286,534
Additional adjustment to arrive at
FFO - diluted Preferred stock
dividends earned - 835 - 4,124
--- --- --- -----
Total FFO - diluted $88,650 $98,546 $251,410 $290,658
------- ------- -------- --------
Reconciliation of EPS to FFO per
diluted share:
For the For the
Three Months Nine Months
Ended Ended
September 30, September 30,
-------------- --------------
Unaudited Unaudited
----------- -----------
2009 2008 2009 2008
---- ---- ---- ----
Earnings per share - diluted $1.75 $0.03 $1.71 $1.50
Per share impact of depreciation
and amortization of real
estate 0.94 1.03 2.89 2.91
Per share impact of (gain) loss
on sale or write-down of
depreciated assets (1.72) 0.06 (1.80) (1.10)
Per share impact of preferred
stock not dilutive to EPS - 0.00 - (0.02)
--- ---- --- -----
FFO per share - diluted $0.97 $1.12 $2.80 $3.29
----- ----- ----- -----
THE MACERICH COMPANY
FINANCIAL HIGHLIGHTS
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
For the For the
Three Months Nine Months
Reconciliation of Net Ended Ended
income to EBITDA: September 30, September 30,
-------------- --------------
Unaudited Unaudited
----------- -----------
2009 2008 2009 2008
---- ---- ---- ----
Net income - available to
common stockholders $142,838 $2,638 $135,118 $110,973
Interest expense -
consolidated assets 65,779 73,889 207,631 220,299
Interest expense -
unconsolidated entities
(pro rata) 27,448 25,923 78,747 77,850
Depreciation and
amortization -
consolidated assets 61,856 66,637 190,507 185,538
Depreciation and
amortization -
unconsolidated entities
(pro rata) 28,552 26,292 80,961 74,326
Noncontrolling interests
in OP 21,520 386 20,351 19,051
Less: Interest expense and
depreciation and
amortization allocable to
noncontrolling interests
on consolidated joint
ventures (1,552) (1,673) (4,511) (3,623)
Loss (gain) on early
extinguishment of debt 455 - (29,145) -
(Gain) loss on sale or
write down of assets -
consolidated assets (161,580) 5,178 (136,731) (95,135)
Loss (gain) on sale or
write down of assets -
unconsolidated entities
(pro rata) 309 (349) 298 (3,272)
Add: Noncontrolling
interests share of gain on
sale of consolidated joint
ventures - - 310 589
Add: Noncontrolling
interests share of gain on
sale of unconsolidated
entities - - - 487
Income tax expense
(benefit) 302 (362) (878) (750)
Distributions on preferred
units 208 242 623 782
Preferred dividends - 835 - 4,124
-------- -------- -------- --------
EBITDA (g) $186,135 $199,636 $543,281 $591,239
-------- -------- -------- --------
Reconciliation of EBITDA to Same Centers - Net Operating Income ("NOI"):
For the For the
Three Months Nine Months
Ended Ended
September 30, September 30,
-------------- --------------
Unaudited Unaudited
----------- -----------
2009 2008 2009 2008
---- ---- ---- ----
EBITDA (g) $186,135 $199,636 $543,281 $591,239
Add: REIT general and
administrative
expenses 7,084 2,881 16,989 11,419
Management Companies'
revenues (10,449) (10,261) (28,335) (30,334)
Management Companies'
operating expenses 16,400 19,014 58,702 57,886
Lease termination income
of comparable
centers (6,901) (3,476) (9,206) (8,263)
EBITDA of non-
comparable centers (27,899) (40,824) (69,791) (105,657)
-------- -------- -------- --------
Same Centers - NOI (h) $164,370 $166,970 $511,640 $516,290
-------- -------- -------- --------
(g) EBITDA represents earnings before interest, income taxes,
depreciation, amortization, noncontrolling interests, 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.
(h) 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. Same center NOI excludes the impact of
straight-line and SFAS 141 adjustments to minimum rents.
SOURCE The
Arthur Coppola, Chairman and Chief Executive Officer, or, Thomas E. O'Hern, Senior Executive Vice President and Chief Financial Officer, both of The Macerich Company, +1-310-394-6000