10/31/23 at 1:00 PM EDT

Q3 2023 Macerich Earnings Conference Call

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The Macerich Company Announces a 16.5% Increase in FFO Per Share

SANTA MONICA, Calif., Feb 15 /PRNewswire/ -- The Macerich Company (NYSE: MAC) today announced results of operations for the quarter and for the year ended December 31, 1999 which included the following:

-- FFO per share-diluted increased by 16.5% during the quarter to $.76

compared to $.65 for the fourth quarter of 1998 on a comparable basis.

-- Same Center net operating income, excluding redevelopment centers,

        increased by 6.3% compared to the fourth quarter of 1998 and 6.7% for
        the twelve months ended December 31, 1999 compared to the same period
        in 1998.

    --  Tenant Sales per square foot, for tenants in occupancy for a full
        year, increased to $336 in 1999, a 5.3% increase over 1998.

    --  During the fourth quarter, Macerich sold Huntington Center for
        $48 million.  The proceeds were used to paydown debt and redeem
        $26 million in Operating Partnership Units ("OP units").

    --  In 1999, Macerich formed a joint venture, known as Pacific Premier
        Retail Trust ("PPRT"), with the Ontario Teachers' Pension Plan Board.
        In February, PPRT  acquired the  Safeco Portfolio with total assets of
        $530 million, primarily in the Pacific Northwest.  In October 1999,
        Macerich contributed Lakewood Mall, Los Cerritos Center and Stonewood
        Mall to PPRT.  The joint venture now has total assets of approximately
        $1.1 billion.

    --  In 1999, Macerich signed 967,000 square feet of leases on space under
        10,000 square feet at average first year rents of $29.76 per square
        foot.  First year rent on new leases was approximately 13% higher than
        expiring rent on comparable space and approximately 19% higher than
        the average base rent per square foot in the portfolio.

Commenting on the results, Arthur Coppola, President and Chief Executive Officer of Macerich stated, "The results for the fourth quarter and the year reflect the ongoing trend of same center revenue gains compared to the same periods in the prior year, strong increases in tenant sales per square foot and strong leasing activity. These trends have contributed to the significant increase in our internal growth, which has fueled much of our 1999 FFO growth per share. In addition, the joint venture we formed in February 1999 with the Ontario Teachers' Pension Plan Board also made a significant contribution to the FFO growth.

The liquidity derived from the sale of Huntington Center, refinancing activities in the fourth quarter and the expansion of our joint venture with the Ontario Teachers' Pension Plan Board allowed us to strengthen our balance sheet. In addition to paying off some short-term debt, we also reduced the outstanding balance on our line of credit and redeemed 1.3 million OP units. Our balance sheet is well positioned for the upcoming year."

Financial Results

For the quarter ended December 31, 1999, FFO-diluted increased to $45.9 million from $43 million, and on a per share basis, FFO - diluted increased 16.5% to $.76 from $.65 in the fourth quarter of 1998 on a comparable basis. For the year ended December 31, 1999, FFO per share-diluted was $2.70, a 12.2% increase over $2.41 in 1998 on a comparable basis.

Net income available to common stockholders for the quarter was $83.9 million or $2.45 per share-diluted compared to $13.8 million or $.42 per share for the three months ended December 31, 1998. For the year ended December 31, 1999, net income available to common stockholders was $110.9 million or $3.24 per share-diluted compared to $32.5 million or $1.06 per share for 1998.


-- During the quarter, there were 298,000 square feet of leases signed

        for mall and freestanding shop space.  The average rent on new leases
        was $28.89 per square foot.  On a comparable space basis, the new
        leases were signed at rents approximately 13% higher than expiring

    --  In October, the Company acquired Santa Monica Place in Santa Monica,
        California.  Santa Monica Place is a 560,000 square foot regional mall
        anchored by Robinsons-May and Macy's.  It is prominently situated in
        the heart of the Santa Monica retail district and combined with
        Westside Pavilion in West Los Angeles and Villa Marina Marketplace in
        Marina Del Rey, gives Macerich control of the three dominant regional
        centers in this densely populated trade area.

    --  The Company placed a $75 million secured loan on Stonewood Mall.  The
        interest rate is at LIBOR plus 1.75% and the loan matures in February
        2001.  The proceeds were used to pay down short term debt and for
        general corporate purposes.

    --  The Company contributed Lakewood Mall, Stonewood Mall and Los Cerritos
        Center to PPRT, owned approximately 51% by Macerich and 49% by Ontario
        Teachers' Pension Plan Board.  The total value of the transaction was
        approximately $535 million.  The properties were contributed to the
        venture subject to existing debt of $322 million.  The net proceeds to
        Macerich of $104 million were used for reduction of debt and general
        corporate purposes, which included the acquisition of Santa Monica

    --  The $90 million redevelopment of Pacific View Mall in Ventura,
        California continues and is on schedule for a March 2000 grand
        opening.  This renovation includes the addition of Robinsons-May and
        Sears and a new 124,500 square foot JC Penney store.  The leasing
        activity remains strong with approximately 91% of the non-anchor space
        committed.  In addition, Macy's has started a $25 million renovation
        of their store.

    --  Ground breaking took place on the expansion of Lakewood Mall.  The
        first Macy's store to be built in Southern California is now under
        construction and the project will also include the relocation of
        Mervyn's department store and development of an additional
        60,000 square feet of shop space.

    --  In December, the Company increased its dividend to $0.51 per share per
        quarter.  Macerich has increased its dividend each year since going
        public in March, 1994.

The Macerich Company is a fully integrated self-managed and self-administered real estate investment trust, which focuses on the acquisition and redevelopment of regional malls and community centers throughout the United States. The Company is the sole general partner and owns an 80% ownership interest in The Macerich Partnership, L.P. Macerich owns interests in 47 regional malls and five community centers totaling over 41 million square feet. Additional information about The Macerich Company can be obtained from the Company's web site at www.macerich.com.

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, lease rates, availability and cost of financing and operating expenses; adverse changes in the real estate markets including, among other things, competition with other companies, retail formats and technology, risks of real estate development and acquisition, governmental actions and initiatives; and environmental and safety requirements. 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

    Results of Operations:                for the three      for the twelve
                                          months ended        months ended
                                           December 31        December 31
                                         1999      1998      1999      1998

    Minimum Rents                       51,094    52,657   204,568   179,710
    Percentage Rents (b)                 4,511     6,148    15,106    12,856
    Tenant Recoveries                   26,341    25,965    99,126    86,740
    Other Income                         2,730     1,430     8,644     4,555

    Total Revenues                      84,676    86,200   327,444   283,861

    Shopping Center Expenses            27,789    27,856   100,327    89,991
    Depreciation and amortization       14,949    14,222    61,383    53,141
    General, administrative and
     other expenses (c)                  1,405     1,253     5,488     4,373
    Interest expense                    28,180    25,333   113,348    91,433
    Gain on sale of assets              95,819         0    95,981         9
    Pro rata income of unconsolidated
     entities (d)                        9,251     6,048    25,945    14,480
    Income before minority interest
     & extraordinary items             117,423    23,584   168,824    59,412
    Income allocated to
     minority interests                 28,540     5,154    38,335    12,902
    Extraordinary loss on early
     extinguishment of debt                460        22     1,478     2,435
    Dividends earned by
     preferred stockholders              4,557     4,648    18,138    11,547
    Net income -- available
     to common stockholders             83,866    13,760   110,873    32,528

    Average # of shares
     outstanding -- basic               34,069    32,775    34,007    30,805
    Average shares outstanding,-basic,
     assuming full conversion of OP
     Units (e)                          45,664    45,107    46,130    43,016
    Average shares outstanding --
     diluted for FFO (f) (e)            60,409    60,024    60,893    49,686

    Net income per share -- basic        $2.46     $0.42     $3.26     $1.06
    Net income per share -- diluted      $2.45     $0.42     $3.24     $1.06
    Dividend declared per share         $0.510    $0.485    $1.965    $1.865
    Funds from operations
     "FFO" (a) (e) -- basic            $37,466   $34,960  $131,725  $108,303
    Funds from operations
     "FFO" (a) (f) (e) -- diluted      $45,868   $43,027  $164,302  $120,518
    FFO per share -- basic (a) (e)      $0.820    $0.775    $2.856    $2.518
    FFO per share -- diluted(a) (f) (e) $0.759    $0.717    $2.698    $2.426

    Proforma FFO per share- diluted
     assuming the accounting change,
     EITF 97-11, was effective 1-1-98,
     and that EITF 98-9, was reversed
     effective 1-1-98.
       proforma impact of EITF 97-11 (c)                             ($0.020)
       proforma impact of EITF 98-9 (b)          ($0.065)             $0.000
    Proforma FFO per share --
     diluted (g)                        $0.759    $0.652    $2.698    $2.406

    % change in proforma
     FFO -- diluted (g)                 16.49%              12.16%

    (a) 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
        entitiesare calculated on the same basis."Percentage change in FFO per
        share is based on a comparison to the same period in 1998.

    (b) Effective April 1, 1998, there was an accounting change (EITF 98-9)
        mandated by the Financial Accounting Standards Board which modified
        the timing on recognition of revenue forpercentage rent received from
        tenants.  Although the accounting change hadno material impact on the
        annual percentage rent recognized, theaccounting change had the effect
        of deferring, including a pro rata share of joint ventures, $3,241 of
        percentage rent (or $.065 per diluted share) from the second and third
        quarters of 1998 to the quarter ended December 31, 1998.During 1999,
        the FASB reversed EITF 98-9 and the accounting treatment, starting
        effective January 1, 1999 reverted to the former method of accounting
        for percentage rents.

    (c) Effective March 19, 1998 the Financial Accounting Standards Board
        adopted EITF # 97-11 entitled "Accounting for Internal Costs Relating
        to Real Estate Property Acquisitions".This accounting interpretation
        requires internal acquisition costs to be expensed, previously these
        costs had been capitalized.  If this new accounting interpretation had
        been implemented effective January 1, 1998,it would have reducedincome
        before extraordinary items by $543 or$.02 per share - dilutedfor the
        first quarter of 1998.

    (d) This includes the Company's prorata share of the equity in income or
        loss of its unconsolidated joint ventures and the Management
        companies, all of which are accounted for using the equity method of

    (e) The Company has operating partnership units ("OP units").  Each OP
        unit can be converted into a share of Company stock.Conversion of the
        OP unitshas been assumed for purposes of calculating the FFO per share
        and the weighted average number of shares outstanding.

    (f) The Company issued $161,400 of convertible debentures in June and
        July, 1997.  The debentures are convertibleinto common shares at a
        conversion price of$31.125 per share.Conversion is not reflected for
        calculation of 1998FFO per share (although it was dilutive for FFO per
        share in the fourth quarter of 1998) or net income per share as the
        conversion would be antidilutive.On February 25, 1998 the Company sold
        $100,000 of convertible preferred stock and onJune 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
        purposes of net incomeper share as it would beantidilutive to that
        calculation.The weighted average preferred shares outstanding are
        assumed converted for purposes ofFFO per share as they are dilutive to
        that calculation.Also included in diluted net income per share and FFO
        per share is theeffect of stock optionsand restricted stock,
        calculated using the treasury method.

    (g) This reflects the impact of the accounting changes discussed in
        footnotes (b) and (c) above on a proforma basis assuming that the
        accounting change noted in footnote (c) was effective as of January1,
        1998 and that the accounting change discussed in footnote (b), EITF
        98-9 was reversed effective January 1, 1998.

    Summarized Balance Sheet                         Dec 31        Dec 31
     Information                                      1999          1998

    Cash and cash equivalents                        $40,455      $25,143
    Investment in real estate, net                 1,932,126    1,966,845
    Investment in unconsolidated entities            342,935      230,022
    Total Assets                                   2,404,779    2,322,056
    Mortgage and notes payable                     1,399,727    1,345,718
    Convertible debentures                           161,400      161,400

    Additional financial data as
     of December 31, 1999
      Occupancy of centers (h)                        92.80%
      Year to date increase in
       comparable tenant sales (h) (i)                 3.60%
     (h) excludes redevelopment properties -
         Pacific View Mall, Crossroads Mall -
         Boulder, Huntington Center and Parklane Mall
     (i) includes mall and freestanding stores

                                          for the three      for the twelve
                                          months ended        months ended
     INCOME TO FFO                         December 31         December 31
                                           (UNAUDITED)         (UNAUDITED)
                                         1999      1998      1999      1998

    Net income -- available
     to common stockholders             83,866    13,760   110,873    32,528

    Adjustments to reconcile net
     income to FFO -- basic
      Minority interest                 28,540     5,154    38,335    12,902
      Loss on early extinguishment
       of debt                             460        22     1,478     2,435
      (Gain ) loss on sale of
       wholly owned assets             (95,819)        0   (95,981)       (9)
      ( Gain) loss on sale or
       write-down of assets from
       unconsolidated entities
       (pro rata)                          591       (21)      193       143
      Depreciation and amortization on
       wholly owned centers             14,949    14,222    61,383    53,141
      Depreciation and amortization on
       joint ventures and from the
       management companies (pro rata)   5,623     2,898    19,715    10,879

      Less: depreciation on personal
       property and amortization of loan
       costs and interest rate caps       (744)   (1,075)   (4,271)   (3,716)

        Total FFO -- basic              37,466    34,960   131,725   108,303

        Weighted average shares
         outstanding -- basic (e)       45,664    45,107    46,130    43,016

    Additional adjustment to arrive at
     FFO -- diluted Interest expense and
     amortization of loan costs on the
     debentures (f)                      3,162     3,162    12,616       n/a

      Preferred stock dividends earned   4,557     4,648    18,138    11,547
      Effect of restricted stock grants
       and stock options                   683       257     1,823       668

       FFO -- diluted                   45,868    43,027   164,302   120,518
      Weighted average shares
       outstanding -- diluted (e) (f)   60,409    60,024    60,893    49,686

SOURCE  The Macerich Company

CONTACT: Arthur Coppola, President and Chief Executive Officer or Thomas O'Hern, Executive Vice President and Chief Financial Officer of The Macerich Company, 310-394-6000/

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