SECURITIES AND EXCHANGE COMMISSION

Washington, D.C.  20549

FORM 8-K

CURRENT REPORT

PURSUANT TO SECTION 13 OR 15(d) OF THE

SECURITIES EXCHANGE ACT OF 1934

Date of report (Date of earliest event reported) February 13, 2007

THE MACERICH COMPANY

(Exact Name of Registrant as Specified in its Charter)

MARYLAND

 

1-12504

 

95-4448705

(State or Other Jurisdiction of

 

(Commission File Number)

 

(I.R.S. Employer Identification No.)

Incorporation)

 

 

 

 

 

401 Wilshire Boulevard, Suite 700, Santa Monica, California 90401

(Address of principal executive office, including zip code)

Registrant’s telephone number, including area code  (310) 394-6000

N/A

(Former name, former address and former fiscal year, if changed since last report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

o  Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

o  Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

o  Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

o  Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

 




ITEM 2.02                 RESULTS OF OPERATIONS AND FINANCIAL CONDITION.

The Company issued a press release on February 13, 2007, announcing results of operations for the Company for the quarter and year ended December 31, 2006 and such press release is furnished as Exhibit 99.1 hereto.

The press release included as an exhibit with this report is being furnished pursuant to Item 2.02 and Item 7.01 of Form 8-K and shall not be deemed to be “filed” with the SEC or incorporated by reference into any other filing with the SEC.

ITEM 7.01             REGULATION FD DISCLOSURE.

On February 13, 2007, the Company made available on its website a financial supplement containing financial and operating information of the Company (“Supplemental Financial Information”) for the three and twelve months ended December 31, 2006 and such Supplemental Financial Information is furnished as Exhibit 99.2 hereto.

The Supplemental Financial Information included as an exhibit with this report is being furnished pursuant to Item 7.01 of Form 8-K and shall not be deemed to be “filed” with the SEC or incorporated by reference into any other filing with the SEC.

ITEM 9.01             FINANCIAL STATEMENTS AND EXHIBITS.

Listed below are the financial statements, pro forma financial information and exhibits furnished as part of this report:

(a), (b) and (c) Not applicable.

(d) Exhibits.

Exhibit Index attached hereto and incorporated herein by reference.

2




SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, The Macerich Company has duly caused this report to be signed by the undersigned, hereunto duly authorized, in the City of Santa Monica, State of California, on February 13, 2007.

 

THE MACERICH COMPANY

 

 

By: THOMAS E. O’HERN

 

 

/s/ Thomas E. O’Hern

 

 

Executive Vice President,

 

 

Chief Financial Officer

 

 

and Treasurer

 

3




EXHIBIT INDEX

EXHIBIT

 

 

NUMBER

 

NAME

99.1

 

Press Release dated February 13, 2007

99.2

 

Supplemental Financial Information for the three and twelve months ended December 31, 2006

 

4



Exhibit 99.1

PRESS RELEASE

For:

THE MACERICH COMPANY

 

 

Press Contact:

Arthur Coppola, President and Chief Executive Officer

 

 

 

or

 

 

 

Thomas E. O’Hern, Executive Vice President and Chief Financial Officer

 

 

 

(310) 394-6000

 

MACERICH ANNOUNCES FOURTH QUARTER RESULTS

Santa Monica, CA (2/13/07) — The Macerich Company (NYSE Symbol: MAC) today announced results of operations for the quarter and year ended December 31, 2006, which included net income available to common stockholders for the quarter ended December 31, 2006 increasing to $147.9 million or $1.98 per share-diluted compared to $23.6 million or $.39 per share-diluted for the quarter ended December 31, 2005.  For the year ended December 31, 2006, net income available to common stockholders was $228 million or $3.19 per share-diluted compared to $52.6 million or $.88 per share-diluted for the year ended December 31, 2005.  Funds from operations (“FFO”) — diluted increased to $124.7 million or $1.36 per share for the quarter compared to $105.9 million or $1.32 per share for the quarter ended December 31, 2005 and FFO-diluted for the year was $383.1 million or $4.35 per share compared to $336.8 million or $4.35 per share for the year ended December 31, 2005.  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 to FFO and net income per common share-diluted (“EPS”) to FFO per share-diluted is included in the financial tables accompanying this press release.

Recent Highlights

·                  During the quarter, Macerich signed 286,000 square feet of specialty store leases at average initial rents of $39.90 per square foot.  First year rents on mall and freestanding store leases signed during the quarter were 21% higher than average expiring rents.

·                  For the quarter, EPS increased to $1.98, up from $.39 during the quarter ended December 31, 2005.  Gain on asset sales of $132.7 million helped fuel the increase.

·                  Mall tenant sales per square foot increased 8.4% to $452 compared to $417 for the year ended December 31, 2005.

·                  Portfolio occupancy at December 31, 2006 was 93.6% compared to 93.5% at December 31, 2005.  On a same center basis occupancy decreased to 93.6% at December 31, 2006 compared to 93.8% at December 31, 2005.

·                  Same center earnings before interest, taxes, depreciation and amortization, excluding lease termination revenue, were up 3.0% compared to the quarter ended December 31, 2005.




·                  Macerich closed on the $241 million acquisition of Deptford Mall in Deptford, New Jersey.

Commenting on the quarter, Arthur Coppola president and chief executive officer of Macerich stated, “The fundamentals remained solid with good releasing spreads, strong occupancy levels and good tenant sales gains.  The quarter was another example of strategically improving our overall portfolio with the sale of three non core assets and the acquisition of another strong East Coast mall.  Through asset sales and financing activity our balance sheet continues to improve and we are well positioned to fund and execute our development pipeline.”

Redevelopment and Development Activity

The grand opening of the first phase of Twenty-Ninth Street, an 805,000 square foot shopping district in Boulder, Colorado, took place on October 13, 2006.  The balance of the project is scheduled for completion in summer 2007.  Phase I of the project is 93% leased. Recent store openings include Borders Books, Chipotle, Helly Hansen, Lady Footlocker, Lululemon, and Solstice.  Wild Oats has also opened their corporate headquarters.  Recent lease commitments include Anthropologie, Sephora, Cantina Laredo, Jamba Juice and North Face.

On November 1, Macerich received Phoenix City Council approval to add up to five mixed use towers of up to 165 feet at Biltmore Fashion Park.  Biltmore Fashion Park is an established luxury destination for first-to-market, high-end and luxury tenants in the metropolitan Phoenix market.  The mixed use towers are planned to be built over time based upon demand.

Groundbreaking took place on February 6, 2007 for the 230,000 square foot life style expansion at The Oaks in Thousand Oaks, California.  Plans also call for a remodel of both the interior spaces and the exterior façade, and will include a new 138,000 square foot Nordstrom scheduled to open at the center in fall 2008.  New tenants include Abercrombie Kids, Forever 21, Forth & Towne, Guess?, J Crew, Iridesse, Planet Funk and Solstice.  The combined expansion and renovation of the center is projected to cost approximately $250 million and be completed in fall 2008.

Phase I of SanTan Village, a $205 million regional shopping center under construction in Gilbert, Arizona, is scheduled to open in fall 2007.  The center, currently 85% leased, is an open-air streetscape that will contain in excess of 1.2 million square feet on 120 acres.  More than 35 tenants have committed to date, including Dillard’s, Harkins Theatres, Aeropostale, American Eagle Outfitters, Ann Taylor, Ann Taylor Loft, Apple, Banana Republic, Best Buy, Blue Wasabi, The Body Shop, The Buckle, Charlotte Russe, Chico’s, The Children’s Place, Coach, Coldwater Creek, The Disney Store, Eddie Bauer, J. Jill, Lane Bryant/Cacique, lucy, PacSun, Soma by Chico’s, Swarovski, Victoria’s Secret, Weisfield’s Jewelers, White House/Black Market and Z Gallerie.

Construction began in late 2006 on The Promenade at Casa Grande, a $135 million, 1 million-square-foot regional shopping center in Arizona’s fastest-growing county. Located in Casa Grande, Pinal County, the center will be located along the I-10 corridor between Phoenix and Tucson. The project is 85% committed, including anchors Target and JC Penney, and will deliver shopping, dining and entertainment options to a key growth corridor. The first phase of the project, which will include a combination of large-

2




format retailers, specialty shops and restaurants, is scheduled for completion in fall 2007. Phase II is comprised of small shops and is scheduled to open in March 2008.  The Promenade is a joint venture owned 51% by Macerich.

On January 22, Macerich received approval from the Fairfax County Board of Supervisors to move forward with plans for a transit-oriented development at Tysons Corner Center in McLean, Virginia. The expansion will add 3.5 million square feet of mixed use space to the existing 2.2 million square foot regional shopping center.  The project is planned to be built in phases over the next 10 years based on market demand and the expansion of the area’s light rail system.  Completion of the entitlement process for Phase I, totaling approximately 1.4 million square feet, is anticipated for the first quarter of 2008. The first phase of the project is anticipated to begin development in late 2009.

In late 2006, Macerich announced plans to bring Barneys New York Department Store to Scottsdale Fashion Square, replacing one of the anchor spaces acquired as a result of the Federated-May merger. Demolition of the vacant space and adjoining parking structure will begin in 2007, allowing for construction of an additional 100,000 square feet of new shop space and the 65,000 square foot Barneys New York location. This first to the Arizona market store is scheduled to open in fall 2009.

Acquisition Activity

In December Macerich acquired the entity owning Deptford Mall for $241 million.  Deptford Mall is a two-level 1,040,000 square foot super-regional mall anchored by JC Penney, Sears, Macy’s and Boscov’s.  The mall includes 343,000 square feet of mall shop space.  Annual tenant sales per square foot are approximately $507.  The mall has an occupancy level of 94%.  Macerich placed a $172 million, five year, 5.44% fixed rate loan on the mall.

Asset Sales

Macerich continued to prune its portfolio with the sale of three non core malls: Crossroads Mall in Oklahoma City, Oklahoma, Northwest Arkansas Mall in Fayetteville, Arkansas and The Citadel Mall in Colorado Springs, Colorado.  The combined sale price was $375 million reflecting a combined capitalization rate of 7.0 %. The average annual tenant sales per square foot for these assets was approximately $338.  This brings the total number of malls sold in 2006 to six as the Company continues to redeploy its capital into developments, redevelopments and higher quality assets.

2007 Earnings Guidance

Management is issuing its guidance for EPS and FFO per share for 2007.

Guidance for 2007 and reconciliation of EPS to FFO per share:

 

 

Range per share:

 

Fully Diluted EPS

 

$

1.24

 

-

 

$

1.34

 

Plus: Real Estate Depreciation and Amortization

 

3.44

 

-

 

3.44

 

Less: other items including additional dilutive securities

 

(.10

)

-

 

(.10

)

Fully Diluted FFO per share

 

$

4.58

 

-

 

$

4.68

 

 

3




The Company’s 2007 earnings guidance is based upon its internal forecasting and planning process and on many assumptions, including the following:

Management expects comparable property EBITDA (excluding the impact of lease termination revenue) to grow in the 2.5% to 3.5% range compared to 2006.  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.

This 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.  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 84% ownership interest in The Macerich Partnership, L.P.  Macerich now owns approximately 77 million square feet of gross leaseable area consisting primarily of interests in 73 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.earnings.com.  The call begins today, February 13, 2007 at 10:30 AM Pacific Time. To listen to the call, please go to either 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.

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 SEC as part of a Current Report on Form 8-K.

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

4




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, including the Annual Report on Form 10-K for the year ended December 31, 2005, for a discussion of such risks and uncertainties, which discussion is incorporated herein by reference.

(See attached tables)

##

 

5




THE MACERICH COMPANY

FINANCIAL HIGHLIGHTS

(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)

 

 

Results before SFAS 144 (e)

 

Impact of SFAS 144 (e)

 

Results after SFAS 144 (e)

 

Results of Operations:

 

For the Three Months

 

For the Three Months

 

For the Three Months

 

 

 

Ended December 31,

 

Ended December 31,

 

Ended December 31,

 

 

 

Unaudited

 

Unaudited

 

 

 

2006

 

2005

 

2006

 

2005

 

2006

 

2005

 

Minimum rents

 

$

141,347

 

$

132,972

 

($6,819

)

($11,651

)

$

134,528

 

$

121,321

 

Percentage rents

 

15,572

 

15,093

 

(523

)

(939

)

15,049

 

14,154

 

Tenant recoveries

 

69,334

 

63,219

 

(2,026

)

(3,962

)

67,308

 

59,257

 

Management Companies’ revenues

 

8,806

 

7,766

 

 

 

8,806

 

7,766

 

Other income

 

8,650

 

7,898

 

(535

)

(531

)

8,115

 

7,367

 

Total revenues

 

243,709

 

226,948

 

(9,903

)

(17,083

)

233,806

 

209,865

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Shopping center and operating expenses

 

71,439

 

68,851

 

(2,635

)

(6,052

)

68,804

 

62,799

 

Management Companies’ operating expenses

 

15,379

 

15,547

 

 

 

15,379

 

15,547

 

Income tax expense (benefit)

 

(187

)

174

 

 

 

(187

)

174

 

Depreciation and amortization

 

57,598

 

59,171

 

(2,288

)

(3,758

)

55,310

 

55,413

 

General, administrative and other expenses

 

3,991

 

2,170

 

 

 

3,991

 

2,170

 

Interest expense

 

73,209

 

74,281

 

(2,825

)

(3,089

)

70,384

 

71,192

 

Loss on early extinguishment of debt

 

24

 

1,666

 

 

 

24

 

1,666

 

Gain (loss) on sale or writedown of assets

 

132,710

 

56

 

(132,710

)

 

 

56

 

Equity in income of unconsolidated entities (c)

 

28,686

 

29,887

 

 

 

28,686

 

29,887

 

Minority interests in consolidated joint ventures

 

(1,832

)

(129

)

37

 

72

 

(1,795

)

(57

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Income (loss) from continuing operations

 

181,820

 

34,902

 

(134,828

)

(4,112

)

46,992

 

30,790

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Discontinued Operations:

 

 

 

 

 

 

 

 

 

 

 

 

 

Gain (loss) on sale of asset

 

 

 

132,695

 

 

132,695

 

 

Income from discontinued operations

 

 

 

2,133

 

4,112

 

2,133

 

4,112

 

Income before minority interests of OP

 

181,820

 

34,902

 

 

 

 

 

181,820

 

34,902

 

Income allocated to minority interests of OP

 

27,690

 

5,365

 

 

 

27,690

 

5,365

 

Net income before preferred dividends

 

154,130

 

29,537

 

 

 

154,130

 

29,537

 

Preferred dividends and distributions (a)

 

6,198

 

5,900

 

 

 

6,198

 

5,900

 

Net income to common stockholders

 

$

147,932

 

$

23,637

 

$

0

 

$

0

 

$

147,932

 

$

23,637

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Average number of shares outstanding - basic

 

71,521

 

59,916

 

 

 

 

 

71,521

 

59,916

 

Average shares outstanding, assuming full conversion of OP Units (d)

 

91,820

 

73,728

 

 

 

 

 

91,820

 

73,728

 

Average shares outstanding - diluted for FFO(d)

 

91,820

 

80,496

 

 

 

 

 

91,820

 

80,496

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Per share income- diluted before discontinued operations

 

 

 

 

 

 

 

$

0.51

 

$

0.33

 

Net income per share-basic

 

$

2.07

 

$

0.39

 

 

 

 

 

$

2.07

 

$

0.39

 

Net income per share- diluted (a)

 

$

1.98

 

$

0.39

 

 

 

 

 

$

1.98

 

$

0.39

 

Dividend declared per share

 

$

0.71

 

$

0.68

 

 

 

 

 

$

0.71

 

$

0.68

 

Funds from operations “FFO” (b) (d)- basic

 

$

118,521

 

$

99,976

 

 

 

 

 

$

118,521

 

$

99,976

 

Funds from operations “FFO” (a) (b) (d) - diluted

 

$

124,719

 

$

105,876

 

 

 

 

 

$

124,719

 

$

105,876

 

FFO per share- basic (b) (d)

 

$

1.40

 

$

1.36

 

 

 

 

 

$

1.40

 

$

1.36

 

FFO per share- diluted (a) (b) (d)

 

$

1.36

 

$

1.32

 

 

 

 

 

$

1.36

 

$

1.32

 

 




THE MACERICH COMPANY

FINANCIAL HIGHLIGHTS

(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)

 

 

Results before SFAS 144 (e)

 

Impact of SFAS 144 (e)

 

Results after SFAS 144 (e)

 

Results of Operations:

 

For the Year

 

For the Year

 

For the Year

 

 

 

Ended December 31

 

Ended December 31

 

Ended December 31

 

 

 

Unaudited

 

Unaudited

 

 

 

2006

 

2005

 

2006

 

2005

 

2006

 

2005

 

Minimum rents

 

$

525,728

 

$

468,363

 

($36,650

)

($44,604

)

$

489,078

 

$

423,759

 

Percentage rents

 

26,173

 

26,258

 

(1,506

)

(2,106

)

24,667

 

24,152

 

Tenant recoveries

 

270,214

 

233,029

 

(15,688

)

(18,197

)

254,526

 

214,832

 

Management Companies’ revenues

 

31,456

 

26,128

 

 

 

31,456

 

26,128

 

Other income

 

31,406

 

24,581

 

(1,477

)

(1,628

)

29,929

 

22,953

 

Total revenues

 

884,977

 

778,359

 

(55,321

)

(66,535

)

829,656

 

711,824

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Shopping center and operating expenses

 

281,273

 

248,020

 

(19,146

)

(24,115

)

262,127

 

223,905

 

Management Companies’ operating expenses

 

56,673

 

52,840

 

 

 

56,673

 

52,840

 

Income tax expense (benefit)

 

33

 

(2,031

)

 

 

33

 

(2,031

)

Depreciation and amortization

 

236,669

 

208,938

 

(12,396

)

(15,793

)

224,273

 

193,145

 

General, administrative and other expenses

 

13,532

 

12,106

 

 

 

13,532

 

12,106

 

Interest expense

 

286,635

 

249,917

 

(11,968

)

(12,820

)

274,667

 

237,097

 

Loss on early extinguishment of debt

 

1,835

 

1,666

 

 

 

1,835

 

1,666

 

Gain (loss) on sale or writedown of assets

 

241,732

 

1,530

 

(241,694

)

(277

)

38

 

1,253

 

Equity in income of unconsolidated entities (c)

 

86,053

 

76,303

 

 

 

86,053

 

76,303

 

Minority interests in consolidated joint ventures

 

(40,933

)

(600

)

37,266

 

(100

)

(3,667

)

(700

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Income (loss) from continuing operations

 

295,179

 

84,136

 

(216,239

)

(14,184

)

78,940

 

69,952

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Discontinued Operations:

 

 

 

 

 

 

 

 

 

 

 

 

 

Gain (loss) on sale of asset

 

 

 

204,863

 

277

 

204,863

 

277

 

Income from discontinued operations

 

 

 

11,376

 

13,907

 

11,376

 

13,907

 

Income before minority interests of OP

 

295,179

 

84,136

 

 

 

295,179

 

84,136

 

Income allocated to minority interests of OP

 

42,821

 

12,450

 

 

 

42,821

 

12,450

 

Net income before preferred dividends

 

252,358

 

71,686

 

 

 

252,358

 

71,686

 

Preferred dividends and distributions (a)

 

24,336

 

19,098

 

 

 

24,336

 

19,098

 

Net income to common stockholders

 

$

228,022

 

$

52,588

 

$

0

 

$

0

 

$

228,022

 

$

52,588

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Average number of shares outstanding - basic

 

70,826

 

59,279

 

 

 

 

 

70,826

 

59,279

 

Average shares outstanding, assuming full conversion of OP Units (d)

 

88,058

 

73,573

 

 

 

 

 

88,058

 

73,573

 

Average shares outstanding - diluted for FFO (d)

 

88,058

 

77,397

 

 

 

 

 

88,058

 

77,397

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Per share income- diluted before discontinued operations

 

 

 

 

 

 

 

$

0.73

 

$

0.69

 

Net income per share-basic

 

$

3.22

 

$

0.89

 

 

 

 

 

$

3.22

 

$

0.89

 

Net income per share- diluted (a)

 

$

3.19

 

$

0.88

 

 

 

 

 

$

3.19

 

$

0.88

 

Dividend declared per share

 

$

2.75

 

$

2.63

 

 

 

 

 

$

2.75

 

$

2.63

 

Funds from operations “FFO” (b) (d)- basic

 

$

373,039

 

$

326,541

 

 

 

 

 

$

373,039

 

$

326,541

 

Funds from operations “FFO” (a) (b) (d) - diluted

 

$

383,122

 

$

336,831

 

 

 

 

 

$

383,122

 

$

336,831

 

FFO per share- basic (b) (d)

 

$

4.43

 

$

4.46

 

 

 

 

 

$

4.43

 

$

4.46

 

FFO per share- diluted (a) (b) (d)

 

$

4.35

 

$

4.35

 

 

 

 

 

$

4.35

 

$

4.35

 

 




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 representing 3.627 million shares. 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 - diluted for 2006 and are not assumed converted for 2005 as they would be antidilutive.

                           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 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 twelve months ended December 31, 2006 and 2005 by $3.6 million, $9.5 million, $0.2 million and $3.4 million, respectively, or by $.04 per share, $.11 per share, $.00 per share and $.04 per share, respectively. Additionally, SFAS 141 increased FFO for the three and twelve months ended December 31, 2006 and 2005 by $4.0 million, $16.9 million, $4.4 million and $15.3 million, respectively or by $.04 per share, $.19 per share, $.05 per share and $.20 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)            The Macerich Partnership, LP (the “Operating Partnership” or the “OP”) has operating partnership units (“OP units”). Each OP unit can be converted into a share of Company 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 outstanding stock options and restricted stock using the treasury method. Also assumes conversion of MACWH, LP units to the extent they are dilutive to the calculation. For the three months ended December 31, 2006 and 2005, the MACWH, LP units were dilutive to FFO. For the twelve months ended December 31, 2006 and 2005, the MACWH, LP units were antidilutive to FFO.

(e)             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.

                           On January 5, 2005, the Company sold Arizona Lifestyle Galleries. The sale of this property resulted in a gain on sale of $0.3 million.

                           On June 9, 2006, Scottsdale 101 in Arizona was sold. The sale of this property resulted in a gain on sale, at the Company’s prorata share, of $25.8 million. Additionally, the Company reclassified the results of operations for the three and twelve months ended December 31, 2006 and 2005 to discontinued operations.

                           On July 13, 2006, Park Lane Mall in Nevada was sold. The sale of this property resulted in a gain on sale of $5.9 million. The Company reclassified the results of operations for the three and twelve months ended December 31, 2006 and 2005 to discontinued operations.

                           On July 27, 2006, Greeley Mall in Colorado and Holiday Village in Montana were sold. The sale of these properties resulted in gains on sale of $21.3 million and $7.4 million, respectively. The Company reclassified the results of operations for the three and twelve months ended December 31, 2006 and 2005 to discontinued operations.

                           On August 11, 2006, Great Falls Marketplace in Montana was sold. The sale of this property resulted in a gain on sale of $11.8 million. The Company reclassified the results of operations for the three and twelve months ended December 31, 2006 and 2005 to discontinued operations.

                           On December 29, 2006, Citadel Mall in Colorado Springs, Colorado, Crossroads Malls in Oklahoma City, Oklahoma and Northwest Arkansas Mall in Fayetteville, Arkansas were sold. The sale of these properties resulted in a total gain on sale of $132.7 million. The Company reclassified the results of operations for the three and twelve months ended December 31, 2006 and 2005 to discontinued operations.

 




THE MACERICH COMPANY

FINANCIAL HIGHLIGHTS

(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)

 

 

Dec 31,

 

Dec 31,

 

Summarized Balance Sheet Information

 

2006

 

2005

 

 

 

(UNAUDITED)

 

Cash and cash equivalents

 

$

269,435

 

$

155,113

 

Investment in real estate, net (h)

 

$

5,755,283

 

$

5,438,496

 

Investments in unconsolidated entities (i)

 

$

1,010,380

 

$

1,075,621

 

Total Assets

 

$

7,562,163

 

$

7,178,944

 

Mortgage and notes payable

 

$

4,993,879

 

$

5,424,730

 

Pro rata share of debt on unconsolidated entities

 

$

1,664,447

 

$

1,505,612

 

 

 

 

 

 

 

Total common shares outstanding at quarter end:

 

71,568

 

59,942

 

Total preferred shares outstanding at quarter end:

 

3,627

 

3,627

 

Total partnership/preferred units outstanding at quarter end:

 

16,342

 

16,647

 

 

 

 

 

Dec 31,

 

Dec 31,

 

Additional financial data as of:

 

2006

 

2005

 

 

 

 

 

 

 

Occupancy of centers (f)

 

93.60

%

93.50

%

Comparable quarter change in same center sales (f) (g)

 

2.53

%

5.50

%

 

 

 

 

 

 

Additional financial data for the twelve months ended:

 

 

 

 

 

Acquisitions of property and equipment - including joint ventures at prorata

 

$

609,275

 

$

2,503,688

 

Redevelopment and expansions of centers- including joint ventures at prorata

 

$

223,307

 

$

156,655

 

Renovations of centers- including joint ventures at prorata

 

$

59,525

 

$

83,336

 

Tenant allowances- including joint ventures at prorata

 

$

49,398

 

$

30,686

 

Deferred leasing costs- including joint ventures at prorata

 

$

27,045

 

$

26,950

 

 

(f)               excludes redevelopment properties.

(g)            includes mall and freestanding stores.

(h)            includes construction in process on wholly owned assets of $294,115 at December 31, 2006 and $162,157 at December 31, 2005.

(i)                the Company’s prorata share of construction in process on unconsolidated entities of $45,268 at December 31, 2006 and $98,180 at December 31, 2005.

 

 

 

For the Three Months

 

For the Year

 

PRORATA SHARE OF JOINT VENTURES

 

Ended December 31,

 

Ended December 31,

 

 

 

(UNAUDITED)

 

(UNAUDITED)

 

(Unaudited)

 

(All amounts in thousands)

 

(All amounts in thousands)

 

 

 

2006

 

2005

 

2006

 

2005

 

Revenues:

 

 

 

 

 

 

 

 

 

Minimum rents

 

$

64,400

 

$

59,803

 

$

241,630

 

$

209,933

 

Percentage rents

 

8,657

 

7,873

 

15,963

 

13,815

 

Tenant recoveries

 

29,108

 

25,636

 

111,788

 

91,482

 

Other

 

4,518

 

3,737

 

15,125

 

12,402

 

Total revenues

 

106,683

 

97,049

 

384,506

 

327,632

 

 

 

 

 

 

 

 

 

 

 

Expenses:

 

 

 

 

 

 

 

 

 

Shopping center expenses

 

33,076

 

29,549

 

125,945

 

106,616

 

Interest expense

 

25,244

 

20,255

 

91,504

 

74,383

 

Depreciation and amortization

 

20,536

 

18,004

 

82,745

 

73,247

 

Total operating expenses

 

78,856

 

67,808

 

300,194

 

254,246

 

Gain on sale of assets

 

480

 

93

 

725

 

1,954

 

Equity in income of joint ventures

 

379

 

553

 

1,016

 

970

 

Loss on early extinguishment of debt

 

 

 

 

(7

)

Net income

 

$

28,686

 

$

29,887

 

$

86,053

 

$

76,303

 

 




THE MACERICH COMPANY

FINANCIAL HIGHLIGHTS

(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)

 

 

For the Three Months

 

For the Year

 

RECONCILIATION OF NET INCOME TO FFO (b)(e)

 

Ended December 31,

 

Ended December 31,

 

 

 

(UNAUDITED)

 

(UNAUDITED)

 

 

 

(All amounts in thousands)

 

(All amounts in thousands)

 

 

 

2006

 

2005

 

2006

 

2005

 

Net income - available to common stockholders

 

$

147,932

 

$

23,637

 

$

228,022

 

$

52,588

 

 

 

 

 

 

 

 

 

 

 

Adjustments to reconcile net income to FFO- basic

 

 

 

 

 

 

 

 

 

Minority interest in OP

 

27,690

 

5,365

 

42,821

 

12,450

 

(Gain) loss on sale of consolidated assets

 

(132,710

)

(56

)

(241,732

)

(1,530

)

plus gain on undepreciated asset sales- consolidated assets

 

3,112

 

 

8,827

 

1,068

 

plus minority interest share of gain on sale of consolidated joint ventures

 

15

 

 

36,831

 

239

 

(Gain) loss on sale of assets from unconsolidated entities (pro rata share)

 

(480

)

(93

)

(725

)

(1,954

)

plus gain on undepreciated asset sales- unconsolidated assets

 

481

 

225

 

725

 

2,092

 

Depreciation and amortization on consolidated assets

 

57,598

 

59,171

 

236,669

 

208,938

 

Less depreciation and amortization allocable to minority interests on consolidated joint ventures

 

(1,071

)

(2,261

)

(5,422

)

(5,873

)

Depreciation and amortization on joint ventures (pro rata)

 

20,536

 

18,004

 

82,745

 

73,247

 

Less: depreciation on personal property and amortization of loan costs and interest rate caps

 

(4,582

)

(4,016

)

(15,722

)

(14,724

)

 

 

 

 

 

 

 

 

 

 

Total FFO - basic

 

118,521

 

99,976

 

373,039

 

326,541

 

 

 

 

 

 

 

 

 

 

 

Additional adjustment to arrive at FFO -diluted

 

 

 

 

 

 

 

 

 

Preferred stock dividends earned

 

2,575

 

2,430

 

10,083

 

9,648

 

Non-participating preferred units - dividends

 

284

 

320

 

 

 

642

 

Participating preferred units - dividends

 

3,339

 

3,150

 

n/a - antidilutive

 

FFO - diluted

 

$

124,719

 

$

105,876

 

$

383,122

 

$

336,831

 

 

 

 

 

For the Three Months

 

For the Year

 

 

 

Ended December 31,

 

Ended December 31,

 

 

 

(UNAUDITED)

 

(UNAUDITED)

 

 

 

(All amounts in thousands)

 

(All amounts in thousands)

 

Reconciliation of EPS to FFO per diluted share:

 

2006

 

2005

 

2006

 

2005

 

Earnings per share

 

$

1.98

 

$

0.39

 

$

3.19

 

$

0.88

 

Per share impact of depreciation and amortization real estate

 

$

0.86

 

$

0.97

 

$

3.54

 

$

3.57

 

Per share impact of gain on sale of depreciated assets

 

($1.48

)

$

0.00

 

($2.33

)

$

0.00

 

Per share impact of preferred stock not dilutive to EPS

 

$

0.00

 

($0.04

)

($0.05

)

($0.10

)

Fully Diluted FFO per share

 

$

1.36

 

$

1.32

 

$

4.35

 

$

4.35

 

 

 

THE MACERICH COMPANY

 

For the Three Months

 

For the Year

 

RECONCILIATION OF NET INCOME TO EBITDA

 

Ended December 31,

 

Ended December 31,

 

 

 

(UNAUDITED)

 

(UNAUDITED)

 

 

 

(All amounts in thousands)

 

(All amounts in thousands)

 

 

 

2006

 

2005

 

2006

 

2005

 

 

 

 

 

 

 

 

 

 

 

Net income - available to common stockholders

 

$

147,932

 

$

23,637

 

$

228,022

 

$

52,588

 

 

 

 

 

 

 

 

 

 

 

Interest expense

 

73,209

 

74,281

 

286,635

 

249,917

 

Interest expense - unconsolidated entities (pro rata)

 

25,244

 

20,255

 

91,504

 

74,383

 

Depreciation and amortization - consolidated assets

 

57,598

 

59,171

 

236,669

 

208,938

 

Depreciation and amortization - unconsolidated entities (pro rata)

 

20,536

 

18,004

 

82,745

 

73,247

 

Minority interest

 

27,690

 

5,365

 

42,821

 

12,450

 

Less: Interest expense and depreciation and amortization allocable to minority interests on consolidated joint ventures

 

(1,836

)

(3,117

)

(8,027

)

(8,280

)

Loss on early extinguishment of debt

 

24

 

1,666

 

1,835

 

1,666

 

Loss on early extinguishment of debt- unconsolidated entities (pro rata)

 

 

7

 

 

7

 

Loss (gain) on sale of assets - consolidated assets

 

(132,710

)

(56

)

(241,732

)

(1,530

)

Loss (gain) on sale of assets - unconsolidated entities (pro rata)

 

(480

)

(93

)

(725

)

(1,954

)

Add: Minority interest share of gain on sale of consolidated joint ventures

 

15

 

 

36,831

 

 

Income tax expense (benefit)

 

(187

)

174

 

33

 

(2,031

)

Preferred dividends

 

6,198

 

5,900

 

24,336

 

19,098

 

 

 

 

 

 

 

 

 

 

 

EBITDA (j)

 

$

223,233

 

$

205,194

 

$

780,947

 

$

678,499

 

 




THE MACERICH COMPANY

FINANCIAL HIGHLIGHTS

(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)

THE MACERICH COMPANY

RECONCILIATION OF EBITDA TO SAME CENTERS - NET OPERATING INCOME (“NOI”)

 

 

For the Three Months

 

For the Year

 

 

 

Ended December 31,

 

Ended December 31,

 

 

 

(UNAUDITED)

 

(UNAUDITED)

 

 

 

(All amounts in thousands)

 

(All amounts in thousands)

 

 

 

2006

 

2005

 

2006

 

2005

 

 

 

 

 

 

 

 

 

 

 

EBITDA (j)

 

$

223,233

 

$

205,194

 

$

780,947

 

$

678,499

 

 

 

 

 

 

 

 

 

 

 

Add: REIT general and administrative expenses

 

3,991

 

2,170

 

13,532

 

12,106

 

Management Companies’ revenues (c)

 

(8,806

)

(7,766

)

(31,456

)

(26,128

)

Management Companies’ operating expenses (c)

 

15,379

 

15,547

 

56,673

 

52,840

 

EBITDA of non-comparable centers

 

(25,511

)

(19,843

)

(147,493

)

(77,092

)

 

 

 

 

 

 

 

 

 

 

SAME CENTERS - Net operating income (“NOI”) (k)

 

$

208,286

 

$

195,302

 

$

672,203

 

$

640,225

 

 

(j)                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.

(k)             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.



Exhibit 99.2

 

Supplemental Financial Information

For the Three and Twelve Months Ended December 31, 2006




The Macerich Company

Supplemental Financial and Operating Information

Table of Contents

All information included in this supplemental financial package is unaudited, unless otherwise indicated.

Page No.

 

 

Corporate overview

 

Overview

1

Capital information and market capitalization

2

Changes in total common and equivalent shares

3

 

 

Financial data

 

Supplemental FFO information

4

Capital expenditures

5

 

 

Operational data

 

Sales per square foot

6

Occupancy

7

Rent

8

Cost of occupancy

9

 

 

Balance sheet information

 

Debt summary

10

Outstanding debt by maturity

11

 

 

This supplemental financial information should be read in connection with the Company's fourth quarter 2006 earnings announcement (included as Exhibit 99.1 of the Company's Current Report on 8-K, event date February 13, 2007) as certain disclosures, definitions and reconciliations in such announcement have not been included in the supplemental financial information.




The Macerich Company

Supplemental Financial and Operating Information

Overview

The Macerich Company (the “Company”) is involved in the acquisition, ownership, development, redevelopment, and leasing of regional and community shopping centers located throughout the United States. The Company is the sole general partner of, and owns a majority of the ownership interests in, The Macerich Partnership, L.P., a Delaware limited partnership (the “Operating Partnership”).

As of December 31, 2006, the Operating Partnership owned or had an ownership interest in 73 regional shopping centers and 18 community shopping centers aggregating approximately 77 million square feet of gross leasable area (“GLA”). These 91 regional and community shopping centers are referred to hereinafter as the “Centers”, unless the context requires otherwise.

The Company is a self-administered and self-managed real estate investment trust (“REIT”) and conducts all of its operations through the Operating Partnership and the Company’s management companies (collectively, the “Management Companies”).

All references to the Company in this Exhibit include the Company, those entities owned or controlled by the Company and predecessors of the Company, unless the context indicates otherwise.

1




The Macerich Company

Supplemental Financial and Operating Information (unaudited)

Capital Information and Market Capitalization

 

 

 

Period Ended

 

dollars in thousands except per share data

 

12/31/2006

 

12/31/2005

 

12/31/2004

 

12/31/2003

 

Closing common stock price per share

 

$

86.57

 

$

67.14

 

$

62.80

 

$

44.50

 

52 Week High

 

$

87.10

 

$

71.22

 

$

64.66

 

$

45.16

 

52 Week Low

 

$

66.70

 

$

53.10

 

$

38.90

 

$

28.65

 

 

 

 

 

 

 

 

 

 

 

Shares outstanding at end of period

 

 

 

 

 

 

 

 

 

Class A participating convertible preferred units

 

2,855,393

 

2,855,393

 

 

 

Class A non-participating convertible preferred units

 

287,176

 

287,176

 

 

 

Series A cumulative convertible redeemable preferred stock

 

3,627,131

 

3,627,131

 

3,627,131

 

3,627,131

 

Common shares and operating partnership units

 

84,767,432

 

73,446,422

 

72,923,605

 

72,080,524

 

Total common and equivalent shares outstanding

 

91,537,132

 

80,216,122

 

76,550,736

 

75,707,655

 

 

 

 

 

 

 

 

 

 

 

Portfolio capitalization data

 

 

 

 

 

 

 

 

 

Total portfolio debt, including joint ventures at pro rata

 

$

6,620,271

 

$

6,863,690

 

$

4,377,388

 

$

3,728,645

 

 

 

 

 

 

 

 

 

 

 

Equity market capitalization at end of period

 

7,924,369

 

5,385,710

 

4,807,386

 

3,368,991

 

 

 

 

 

 

 

 

 

 

 

Total market capitalization at end of period

 

$

14,544,640

 

$

12,249,400

 

$

9,184,774

 

$

7,097,636

 

 

 

 

 

 

 

 

 

 

 

Leverage ratio (%) (a)

 

45.5

%

56.0

%

47.7

%

52.5

%

 

 

 

 

 

 

 

 

 

 

Floating rate debt as a percentage of total market capitalization

 

9.46

%

13.00

%

13.00

%

11.40

%

 

 

 

 

 

 

 

 

 

 

Floating rate debt as a percentage of total debt

 

20.78

%

35.71

%

27.00

%

21.80

%

 


(a) Debt as a percentage of total market capitalization

 

 

2




The Macerich Company

Supplemental Financial and Operating Information (unaudited)

Changes in Total Common and Equivalent Shares

 

 

 

Operating
Partnership
Units

 

Company
Common
Shares

 

Class A
Participating
Convertible
Preferred
Units

 

Class A Non
Participating
Convertible
Preferred
Units

 

Series A
Cumulative
Convertible
Redeemable
Preferred
Stock

 

Total
Common
and
Equivalent
Shares

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Balance as of December 31, 2005

 

13,504,870

 

59,941,552

 

2,855,393

 

287,176

 

3,627,131

 

80,216,122

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Common stock offering

 

 

10,952,381

 

 

 

 

10,952,381

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Conversion of OP units to common shares

 

(179,789

)

179,789

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Conversion of OP units to cash

 

(4,987

)

 

 

 

 

(4,987

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Issuance of stock from stock option exercises, restricted stock issuance or other share-based plans

 

 

284,181

 

 

 

 

284,181

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Balance as of March 31, 2006

 

13,320,094

 

71,357,903

 

2,855,393

 

287,176

 

3,627,131

 

91,447,697

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Conversion of OP units to cash

 

(58,567

)

 

 

 

 

(58,567

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Issuance of stock from stock option exercises, restricted stock issuance or other share-based plans

 

 

100,754

 

 

 

 

100,754

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Balance as of June 30, 2006

 

13,261,527

 

71,458,657

 

2,855,393

 

287,176

 

3,627,131

 

91,489,884

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Conversion of OP units to common shares

 

(17,378

)

17,378

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Issuance of stock from stock option exercises, restricted stock issuance or other share-based plans

 

 

6,039

 

 

 

 

6,039

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Balance as of September 30, 2006

 

13,244,149

 

71,482,074

 

2,855,393

 

287,176

 

3,627,131

 

91,495,923

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Conversion of OP units to common shares

 

(44,625

)

44,625

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Issuance of stock from stock option exercises, restricted stock issuance or other share-based plans

 

 

41,209

 

 

 

 

41,209

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Balance as of December 31, 2006

 

13,199,524

 

71,567,908

 

2,855,393

 

287,176

 

3,627,131

 

91,537,132

 

 

3




The Macerich Company

Supplemental Financial and Operating Information (unaudited)

Supplemental Funds from Operations (“FFO”) Information (a)

 

 

 

Quarter Ended December 31,

 

Year Ended December 31,

 

dollars in millions

 

2006

 

2005

 

2006

 

2005

 

 

 

 

 

 

 

 

 

 

 

Lease termination fees

 

$

7.9

 

$

0.6

 

$

20.0

 

$

5.9

 

 

 

 

 

 

 

 

 

 

 

Straight line rental income

 

$

2.8

 

$

4.5

 

$

11.9

 

$

12.3

 

 

 

 

 

 

 

 

 

 

 

Gain on sales of undepreciated assets

 

$

3.6

 

$

0.2

 

$

9.5

 

$

3.4

 

 

 

 

 

 

 

 

 

 

 

Amortization of acquired above- and below-market leases (SFAS 141)

 

$

4.0

 

$

4.4

 

$

16.9

 

$

15.3

 

 

 

 

 

 

 

 

 

 

 

Amortization of debt premiums

 

$

4.2

 

$

6.0

 

$

17.7

 

$

17.3

 

 

 

 

 

 

 

 

 

 

 

Interest capitalized

 

$

4.0

 

$

3.9

 

$

17.0

 

$

16.3

 

 


(a) All joint venture amounts included at pro rata.

4




The Macerich Company

Supplemental Financial and Operating Information (unaudited)

Capital Expenditures

 

 

 

Year Ended

 

Year Ended

 

Year Ended

 

Year Ended

 

dollars in millions

 

31-Dec-06

 

31-Dec-05

 

31-Dec-04

 

31-Dec-03

 

Consolidated Centers

 

 

 

 

 

 

 

 

 

Acquisitions of property and equipment

 

$

580.5

 

$

1,767.2

 

$

301.1

 

$

359.2

 

Development, redevelopment and expansions of centers

 

174.5

 

77.2

 

139.3

 

166.3

 

Renovations of centers

 

51.4

 

51.1

 

21.2

 

21.7

 

Tenant allowances

 

35.6

 

21.8

 

10.9

 

7.3

 

Deferred leasing charges

 

22.8

 

21.8

 

16.8

 

15.2

 

Total

 

$

864.8

 

$

1,939.1

 

$

489.3

 

$

569.7

 

 

 

 

 

 

 

 

 

 

 

Joint Venture Centers (a)

 

 

 

 

 

 

 

 

 

Acquisitions of property and equipment (b)

 

$

28.7

 

$

736.4

 

$

41.1

 

$

(19.2

)

Development, redevelopment and expansions of centers

 

48.8

 

79.4

 

6.6

 

17.6

 

Renovations of centers

 

8.1

 

32.2

 

10.1

 

2.8

 

Tenant allowances

 

13.8

 

8.9

 

10.5

 

4.7

 

Deferred leasing charges

 

4.3

 

5.1

 

3.7

 

3.3

 

Total

 

$

103.7

 

$

862.0

 

$

72.0

 

$

9.2

 

 


(a) All joint venture amounts at pro rata.

(b) Includes the Company's purchase of joint venture partner's 50% interest in FlatIron Crossing on January 31, 2003.

 

5




The Macerich Company

Supplemental Financial and Operating Information (unaudited)

Sales Per Square Foot (a)

 

 

Consolidated
Centers

 

Unconsolidated
Centers

 

Total Centers

 

 

 

 

 

 

 

 

 

12/31/06

 

$

435

 

$

470

 

$

452

 

12/31/05

 

$

395

 

$

440

 

$

417

 

12/31/04

 

$

368

 

$

414

 

$

391

 

12/31/03

 

$

350

 

$

372

 

$

361

 

 


(a) Sales are based on reports by retailers leasing mall and freestanding stores for the trailing 12 months for tenants which have occupied such stores for a minimum of 12 months.  Sales per square foot are based on tenants, 10,000 square feet and under, for regional malls.

 

6




The Macerich Company

Supplemental Financial and Operating Information (unaudited)

Occupancy (a)

 

Period Ended

 

Consolidated
Centers

 

Unconsolidated
Centers

 

Total Centers

 

12/31/06

 

93.1

%

93.7

%

93.6

%

12/31/05

 

93.4

%

93.2

%

93.5

%

12/31/04

 

92.6

%

92.5

%

92.5

%

12/31/03

 

92.6

%

93.6

%

93.3

%

 


(a) Occupancy data excludes space under development and redevelopment.

7




The Macerich Company

Supplemental Financial and Operating Information (unaudited)

Rent

 

 

 

Average Base Rent
PSF (a)

 

Average Base Rent
PSF on Leases
Commencing During
the Period (b)

 

Average Base Rent
PSF on Leases
Expiring (c)

 

Consolidated Centers

 

 

 

 

 

 

 

12/31/06

 

$

37.55

 

$

38.40

 

$

31.92

 

12/31/05

 

$

34.23

 

$

35.60

 

$

30.71

 

12/31/04

 

$

32.60

 

$

35.31

 

$

28.84

 

12/31/03

 

$

31.71

 

$

36.77

 

$

29.93

 

 

 

 

 

 

 

 

 

Joint Venture Centers

 

 

 

 

 

 

 

12/31/06

 

$

37.94

 

$

41.43

 

$

36.19

 

12/31/05

 

$

36.35

 

$

39.08

 

$

30.18

 

12/31/04

 

$

33.39

 

$

36.86

 

$

29.32

 

12/31/03

 

$

31.29

 

$

37.00

 

$

27.83

 

 


(a) Average base rent per square foot is based on mall and freestanding GLA for spaces, 10,000 square feet and under, occupied as of the applicable date.  Leases for La Encantada and the expansion area of Queens Center were excluded in Years 2003, 2004 and 2005.

(b) The average base rent on lease signings commencing during the period represents the actual rent to be paid on a per square foot basis during the first twelve months for tenant leases 10,000 square feet and under.  Lease signings for La Encantada and the expansion area of Queens Center were excluded in Years 2003, 2004 and 2005.

(c) The average base rent on leases expiring during the period represents the final year minimum rent, on a cash basis, for all tenant leases 10,000 square feet and under expiring during the year.  Leases for La Encantada and the expansion area of Queens Center were excluded in Years 2003, 2004 and 2005.

8




The Macerich Company

Supplemental Financial and Operating Information (unaudited)

Cost of Occupancy

 

 

 

For years ended December 31,

 

Consolidated Centers

 

2006

 

2005

 

2004

 

2003

 

Minimum rents

 

8.1

%

8.3

%

8.3

%

8.7

%

Percentage rents

 

0.4

%

0.5

%

0.4

%

0.3

%

Expense recoveries (a)

 

3.7

%

3.6

%

3.7

%

3.8

%

Total

 

12.2

%

12.4

%

12.4

%

12.8

%

 

 

 

 

 

 

 

 

 

 

 

 

 

For years ended December 31,

 

Joint Venture Centers

 

2006

 

2005

 

2004

 

2003

 

Minimum rents

 

7.2

%

7.4

%

7.7

%

8.1

%

Percentage rents

 

0.6

%

0.5

%

0.5

%

0.4

%

Expense recoveries (a)

 

3.1

%

3.0

%

3.2

%

3.2

%

Total

 

10.9

%

10.9

%

11.4

%

11.7

%

 


(a) Represents real estate tax and common area maintenance charges.

9




The Macerich Company

Supplemental Financial and Operating Information (unaudited)

Debt Summary

 

dollars in thousands

 

Fixed Rate

 

Variable Rate (a)

 

Total

 

Consolidated debt

 

$

3,778,498

 

$

1,177,326

 

$

4,955,824

 

Unconsolidated debt

 

1,466,016

 

198,431

 

1,664,447

 

Total debt

 

$

5,244,514

 

$

1,375,757

 

$

6,620,271

 

 

 

 

 

 

 

 

 

Weighted average interest rate

 

5.96

%

6.56

%

6.09

%

 

 

 

 

 

 

 

 

Weighted average maturity (years)

 

 

 

 

 

4.81

 

 


(a) Excludes swapped floating rate debt.  Swapped debt is included in fixed debt category.

10




The Macerich Company

Supplemental Financial and Operating Information (unaudited)

Outstanding Debt by Maturity

 

dollars in thousands

 

Center/Entity

 

Maturity
Date

 

Interest
Rate

 

Fixed

 

Floating

 

Total Debt
Balance (a)

 

 

 

 

 

 

 

 

 

 

 

 

 

I. Consolidated Assets:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Paradise Valley Mall (b)

 

01/01/07

 

5.39

%

$

74,990

 

$

 

$

74,990

 

Borgata

 

10/11/07

 

5.39

%

14,885

 

 

14,885

 

Victor Valley, Mall of

 

03/01/08

 

4.60

%

52,429

 

 

52,429

 

Westside Pavilion

 

07/01/08

 

6.67

%

93,513

 

 

93,513

 

Village Fair North

 

07/15/08

 

5.89

%

11,210

 

 

11,210

 

Fresno Fashion Fair

 

08/10/08

 

6.52

%

64,595

 

 

64,595

 

South Towne Center

 

10/10/08

 

6.61

%

64,000

 

 

64,000

 

Queens Center

 

03/01/09

 

6.88

%

92,039

 

 

92,039

 

South Plains Mall

 

03/01/09

 

8.22

%

59,681

 

 

59,681

 

Carmel Plaza

 

05/01/09

 

8.18

%

26,674

 

 

26,674

 

Paradise Valley Mall

 

05/01/09

 

5.89

%

22,154

 

 

22,154

 

Northridge

 

07/01/09

 

4.84

%

82,514

 

 

82,514

 

Wilton Mall

 

11/01/09

 

4.79

%

46,604

 

 

46,604

 

Macerich Partnership Term Loan (c)

 

04/25/10

 

6.30

%

450,000

 

 

450,000

 

Macerich Partnership Line of Credit (d)

 

04/25/10

 

6.23

%

400,000

 

 

400,000

 

Vintage Faire Mall

 

09/01/10

 

7.89

%

65,363

 

 

65,363

 

Eastview Commons

 

09/30/10

 

5.46

%

9,117

 

 

9,117

 

Santa Monica Place

 

11/01/10

 

7.70

%

80,073

 

 

80,073

 

Valley View Center

 

01/01/11

 

5.72

%

125,000

 

 

125,000

 

Danbury Fair Mall

 

02/01/11

 

4.64

%

182,877

 

 

182,877

 

Shoppingtown Mall

 

05/11/11

 

5.01

%

46,217

 

 

46,217

 

Capitola Mall

 

05/15/11

 

7.13

%

40,999

 

 

40,999

 

Freehold Raceway

 

07/07/11

 

4.68

%

183,505

 

 

183,505

 

Pacific View

 

08/31/11

 

7.16

%

83,511

 

 

83,511

 

Pacific View

 

08/31/11

 

7.00

%

6,720

 

 

6,720

 

Rimrock Mall

 

10/01/11

 

7.45

%

43,452

 

 

43,452

 

Prescott Gateway

 

12/01/11

 

5.78

%

60,000

 

 

60,000

 

Chandler Fashion Center

 

11/01/12

 

5.14

%

104,400

 

 

104,400

 

Chandler Fashion Center

 

11/01/12

 

6.00

%

68,504

 

 

68,504

 

Towne Mall

 

11/01/12

 

4.99

%

15,291

 

 

15,291

 

Pittsford Plaza (e)

 

01/01/13

 

5.02

%

16,077

 

 

16,077

 

Deptford

 

01/15/13

 

5.44

%

100,000

 

 

100,000

 

Queens Center

 

03/01/13

 

7.00

%

220,625

 

 

220,625

 

Greeley - Defeaseance

 

09/01/13

 

6.18

%

28,281

 

 

28,281

 

FlatIron Crossing

 

12/01/13

 

5.23

%

191,046

 

 

191,046

 

Great Northern

 

12/01/13

 

5.19

%

40,947

 

 

40,947

 

Eastview Mall

 

01/18/14

 

5.10

%

102,873

 

 

102,873

 

Fiesta Mall

 

01/01/15

 

4.88

%

84,000

 

 

84,000

 

Flagstaff Mall

 

11/01/15

 

4.97

%

37,000

 

 

37,000

 

Valley River Center (f)

 

02/01/16

 

5.58

%

100,000

 

 

100,000

 

Salisbury, Center at

 

05/01/16

 

5.79

%

115,000

 

 

115,000

 

Marketplace Mall (g)

 

12/10/17

 

5.30

%

15,177

 

 

15,177

 

Chesterfield Towne Center

 

01/01/24

 

9.07

%

57,155

 

 

57,155

 

Total Fixed Rate Debt for Consolidated Assets

 

 

 

5.99

%

$

3,778,498

 

$

 

$

3,778,498

 

 

 

 

 

 

 

 

 

 

 

 

 

Macerich Partnership Term Loan

 

05/13/07

 

6.94

%

$

 

$

250,000

 

$

250,000

 

Twenty Ninth Street

 

06/15/07

 

6.67

%

 

94,080

 

94,080

 

Oaks, The (h)

 

07/01/07

 

6.05

%

 

92,000

 

92,000

 

La Cumbre

 

08/09/07

 

6.23

%

 

30,000

 

30,000

 

Greece Ridge

 

11/06/07

 

6.00

%

 

72,000

 

72,000

 

La Encantada

 

08/01/08

 

7.08

%

 

51,000

 

51,000

 

Casa Grande (i)

 

08/16/09

 

6.75

%

 

3,746

 

3,746

 

Panorama Mall

 

02/28/10

 

6.23

%

 

50,000

 

50,000

 

Macerich Partnership Line of Credit

 

04/25/10

 

6.60

%

 

534,500

 

534,500

 

Total Floating Rate Debt for Consolidated Assets

 

 

 

6.59

%

$

 

$

1,177,326

 

$

1,177,326

 

Total Debt for Consolidated Assets

 

 

 

6.14

%

$

3,778,498

 

$

1,177,326

 

$

4,955,824

 

 

11




 

Center/Entity

 

Maturity
Date

 

Interest
Rate

 

Fixed

 

Floating

 

Total Debt
Balance (a)

 

II. Unconsolidated Joint Ventures (at Company's pro rata share):

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Hilton Village (50%) (j)

 

01/01/07

 

5.39

%

$

3,996

 

$

 

$

3,996

 

Scottsdale Fashion Square I (50%)

 

08/31/07

 

5.39

%

78,768

 

 

78,768

 

Scottsdale Fashion Square II (50%)

 

08/31/07

 

5.39

%

33,774

 

 

33,774

 

Metrocenter (15%) (k)

 

02/09/08

 

4.80

%

16,800

 

 

16,800

 

Broadway Plaza (50%)

 

08/01/08

 

6.68

%

31,012

 

 

31,012

 

Chandler Festival (50%)

 

10/01/08

 

4.37

%

15,157

 

 

15,157

 

Chandler Gateway (50%)

 

10/01/08

 

5.19

%

9,548

 

 

9,548

 

Washington Square (51%)

 

02/01/09

 

6.70

%

51,577

 

 

51,577

 

Inland Center (50%)

 

02/11/09

 

4.64

%

27,000

 

 

27,000

 

Biltmore Fashion Park (50%)

 

07/10/09

 

4.68

%

39,790

 

 

39,790

 

Redmond Office (51%)

 

07/10/09

 

6.77

%

35,774

 

 

35,774

 

Redmond Retail (51%)

 

08/01/09

 

4.81

%

37,415

 

 

37,415

 

West Acres (19%)

 

09/30/09

 

6.41

%

13,264

 

 

13,264

 

Corte Madera, The Village at (50.1%)

 

11/01/09

 

7.75

%

33,201

 

 

33,201

 

Ridgmar (50%)

 

04/11/10

 

6.07

%

28,700

 

 

28,700

 

Kitsap Mall/Place (51%)

 

06/01/10

 

8.06

%

29,592

 

 

29,592

 

Cascade (51%)

 

07/01/10

 

5.10

%

20,424

 

 

20,424

 

Stonewood Mall  (51%)

 

12/11/10

 

7.41

%

38,180

 

 

38,180

 

Arrowhead Towne Center (33.3%)

 

10/01/11

 

6.38

%

27,096

 

 

27,096

 

Northpark Center (50%)

 

05/10/12

 

5.41

%

94,782

 

 

94,782

 

NorthPark Center  (50%)

 

05/10/12

 

8.33

%

82,881

 

 

82,881

 

Kierland Greenway (24.5%)

 

01/01/13

 

5.85

%

16,231

 

 

16,231

 

Kierland Main Street (24.5%)

 

01/02/13

 

4.99

%

3,821

 

 

3,821

 

Tyson's Corner (50%)

 

02/17/14

 

5.22

%

172,021

 

 

172,021

 

Lakewood  (51%)

 

06/01/15

 

5.41

%

127,500

 

 

127,500

 

Eastland (50%)

 

06/01/16

 

5.79

%

84,000

 

 

84,000

 

Empire Mall (50%)

 

06/01/16

 

5.79

%

88,150

 

 

88,150

 

Granite Run (50%)

 

06/01/16

 

5.83

%

60,595

 

 

60,595

 

Mesa Mall (50%)

 

06/01/16

 

5.79

%

43,625

 

 

43,625

 

Rushmore (50%)

 

06/01/16

 

5.79

%

47,000

 

 

47,000

 

Southern Hills (50%)

 

06/01/16

 

5.79

%

50,750

 

 

50,750

 

Valley Mall (50%)

 

06/01/16

 

5.83

%

23,592

 

 

23,592

 

Total Fixed Rate Debt for Unconsolidated Assets

 

 

 

5.89

%

$

1,466,016

 

$

 

$

1,466,016

 

 

 

 

 

 

 

 

 

 

 

 

 

NorthPark Center (50%)

 

08/30/07

 

8.25

%

$

 

$

3,500

 

$

3,500

 

Camelback Colonnade (75%)

 

10/09/07

 

6.04

%

 

31,125

 

31,125

 

SanTan Village Phase 2 (34.9%) (l)

 

11/02/07

 

7.36

%

 

8,978

 

8,978

 

Boulevard Shops (50%)

 

12/16/07

 

6.60

%

 

10,700

 

10,700

 

Chandler Village Center (50%)

 

12/19/07

 

7.01

%

 

8,578

 

8,578

 

Metrocenter (15%)

 

02/09/08

 

8.74

%

 

1,868

 

1,868

 

Desert Sky Mall (50%)

 

03/06/08

 

6.45

%

 

25,750

 

25,750

 

Superstition Springs (33.3%)

 

09/09/08

 

5.72

%

 

22,498

 

22,498

 

Kierland Tower Lofts (15%)

 

12/14/08

 

7.13

%

 

2,146

 

2,146

 

Washington Square (51%)

 

02/01/09

 

7.35

%

 

16,988

 

16,988

 

Los Cerritos Center (51%)

 

07/01/11

 

5.91

%

 

66,300

 

66,300

 

Total Floating Rate Debt for Unconsolidated Assets

 

 

 

6.33

%

$

 

$

198,431

 

$

198,431

 

Total Debt for Unconsolidated Assets

 

 

 

5.95

%

$

1,466,016

 

$

198,431

 

$

1,664,447

 

 

 

 

 

 

 

 

 

 

 

 

 

Total Debt

 

 

 

6.09

%

$

5,244,514

 

$

1,375,757

 

$

6,620,271

 

Percentage to Total

 

 

 

 

 

79.22

%

20.78

%

100.00

%

 


(a)          The debt balances include the unamortized debt premiums (discounts). Debt premiums (discounts) represent the excess of the fair value of debt over the principal value of debt assumed in various acquisitions and are amortized into interest expense over the remaining term of the related debt in a manner that approximates the effective interest method. The annual interest rate in the above table represents the effective interest rate, including the debt premiums (discounts).

(b)         This loan was paid off in full on January 2, 2007.

(c)          This debt has an interest rate swap agreement which effectively fixed the interest rate from December 1, 2005 to April 25, 2010.

(d)         This debt has an interest rate swap agreement which effectively fixed the interest rate from September 12, 2006 to April 25, 2011.

(e)          This property is a consolidated joint venture. The above debt balance represents the Company's pro rata share of 63.6%.

(f)            An additional $20.0 million was borrowed under this mortgage in January 2007 at a fixed rate of 5.64%. The weighted average interest rate on the total $120.0 million is 5.59%.

(g)         This property is a consolidated joint venture. The above debt balance represents the Company's pro rata share of 37.5%.

(h)         This loan was paid off in full on February 2, 2007.

(i)             This property is a consolidated joint venture. The above debt balance represents the Company's pro rata share of 51.3%.

(j)             This loan was refinanced in January 2007 with an $8.6 million fixed rate loan at 5.21%, maturing February 1, 2012.

(k)          This debt has an interest rate swap agreement which effectively fixed the interest rate from January 15, 2005 to February 15, 2008.

(l)             This debt was refinanced in January 2007 with a $45.0 million fixed rate loan at 5.33%, maturing March 1, 2012.

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