SECURITIES AND EXCHANGE COMMISSION

Washington, D.C.  20549

 

FORM 8-K

 

CURRENT REPORT

 

PURSUANT TO SECTION 13 OR 15(d) OF THE

SECURITIES AND EXCHANGE ACT OF 1934

 

Date of report (Date of earliest event reported) May 7, 2004

 

THE MACERICH COMPANY

(Exact Name of Registrant as Specified in its Charter)

 

 

 

MARYLAND

 

1-12504

 

95-4448705

(State or Other Jurisdiction of
Incorporation)

 

(Commission File Number)

 

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

 

 

 

 

 

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)

 

 



 

ITEM 7.  FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS.

 

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

 

(a), (b) Not applicable.

 

(c) Exhibits.

 

Exhibit Index attached hereto and incorporated herein by reference.

 

ITEM 12.  RESULTS OF OPERATIONS AND FINANCIAL CONDITION.

 

The Company issued a press release on May 7, 2004, announcing results of operations for the Company for the quarter ended March 31, 2004, and such press release is filed as Exhibit 99.1 hereto and is hereby incorporated by reference in its entirety.

 

The press release included as an exhibit with this filing is being furnished pursuant to Item 9 and Item 12 of Form 8-K.

 

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 May 7, 2004.

 

 

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 May 7, 2004

 

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 FIRST QUARTER RESULTS

 

Santa Monica, CA  (5/07/04) - The Macerich Company (NYSE Symbol: MAC) today announced results of operations for the quarter ended March 31, 2004 which included net income to common stockholders for the three months ended March 31, 2004 of $18.1 million, or $.31 per share-diluted compared to net income of  $19.4 million or $.37 per share-diluted for the three months ended March 31, 2003.

 

Funds from operations (“FFO”) per share – diluted for the quarter ended March 31, 2004 increased to $.90 compared to $.84 for the comparable period in 2003.  A reconciliation of net income to FFO is included in the financial highlights section of this press release.

 

 

Highlights included:

 

Total same center tenant sales for the quarter ended March 31, 2004 were up 7.9% compared to the first quarter of 2003 and comparable tenant sales were up 6.8% over the quarter ended March 31, 2003.

 

 

Portfolio occupancy remained high at 91.8% at March 31, 2004.  On a comparable center basis occupancy was 92.0% compared to 92.4% at March 31, 2003.

 

 

On January 30, 2004, Macerich closed on the acquisition of Inland Center in San Bernardino, California.

 

 

Phase I of the Queens Center $275 million expansion opened on March 26, 2004

 

 

During the first quarter, Macerich signed 458,000 square feet of specialty store leases at average initial rents of $37.87 per square foot.

 

 

FFO per share – diluted for the quarter increased 7% to $ .90 compared to $ .84 per share for the quarter ended March 31, 2003.  The Company’s definition of FFO is in accordance with the definition provided by the National Association of Real Estate Investment Trusts (“NAREIT”). A reconciliation of net income per common share-

 



 

diluted (“EPS”) to FFO per share-diluted is included in the financial tables accompanying this press release.

 

Commenting on results, Arthur Coppola, President and Chief Executive Officer of Macerich stated, “We achieved strong FFO per share growth of 7% compared to the first quarter of last year, even after factoring in the impact of shifting a significant amount of our debt from floating to fixed rate.   During the quarter we saw strong retail sales growth and continued high occupancy levels.  Also during the quarter, we made tremendous progress on our $275 million expansion of Queens Center, where Phase-I of the project opened on March 26 and is 94% leased.  Our return on cost, now estimated at 12% at completion, is exceeding our project budget.”

 

Acquisition Activity

 

On January 30, 2004, Macerich, in a 50/50 joint venture with a private investment company, acquired Inland Center, a 1 million square foot super-regional mall in San Bernardino, California.  Sears, Robinson-May, Macy’s and Gottschalks anchor the mall.  The purchase price was $63.3 million and concurrently with the acquisition the joint venture placed a $54 million fixed rate loan on the property bearing interest at 4.64%.   The mall shop tenants at Inland are averaging over $450 per square foot in annual sales.  Comparable tenant sales were up 12.7% at Inland during the quarter ended March 31, 2004 compared to the same period in 2003.

 

 

Redevelopment and Development Activity

 

At Queens Center, the redevelopment and expansion continue.  The project will increase the size of the center from 620,000 square feet to approximately one million square feet.  Completion is planned in phases, with Phase I recently opened with project completion and stabilization expected in early 2005.   Leasing activity has been robust with 90% of the total shop expansion space already leased or committed, including 94% for the Phase I space.

 

Construction continues at Scottsdale 101, a 600,000 square foot power center in North Phoenix.  The power center is being built in phases through 2004 with approximately 70% of the development completed.  Circuit City, Borders and Bed Bath and Beyond, Sports Authority, Harkins Theatre and Expo Design Center have already opened.

 

Progress also continues at La Encantada, a 258,000 square foot lifestyle center in Tucson, Arizona, which will feature; Adrienne Vittadini, Ann Taylor, Apple Computer, Bebe, Bose, Cache, Pottery Barn, St. John, Tommy Bahama and Williams-Sonoma.  This project is open in phases through 2004.

 

In Boulder, at our 29th Street project (formerly known as Crossroads Mall and recently renamed based on community input) the redevelopment plan continues to progress.  We have submitted our final site review application to the City of Boulder.  We anticipate this process to culminate in final entitlements that will result in ground breaking for this 850,000 square foot mixed-use project this fall.

 



 

Earnings Guidance

 

The Company is reaffirming its previously issued year 2004 FFO per share guidance and revising its EPS guidance in the following ranges:

 

 

 

Range per share:

 

Fully Diluted EPS

 

$1.79…..$1.89

 

Plus: Real Estate Depreciation and Amortization

 

$2.09..…$2.09

 

Less: impact of preferred shares (not dilutive to EPS)

 

($.10).......($.10

)

Less:  Gain on Sale of Assets

 

$.00......…$.00

 

Fully Diluted FFO per share

 

$3.78..…$3.88

 

 

 

 

 

Plus:  Interest Expense per share

 

$2.60......$2.60

 

Plus: Non real estate depreciation, income taxes
and ground rent expense per share

 

$.17..........$.17

 

EBITDA  per share

 

$6.55......$6.65

 

Less:  management company expenses, REIT
General and administrative expenses and
EBITDA of non-comparable centers

 

($.83).......($.83

)

Same center EBITDA per share

 

$5.72......$5.82

 

 

The guidance is based on management’s current view of the current market conditions in the regional mall business.  Due to the uncertainty in the timing and economics of acquisitions and dispositions, the guidance ranges do not include any potential property acquisitions or dispositions other than those that have closed through May 6, 2004.  The Company is not able to assess at this time the potential impact of such exclusions on future EPS and FFO.  FFO does not include gains or losses on sales of depreciated operating assets.

 

The Macerich Company is a fully integrated self-managed and self-administered real estate investment trust, which focuses on the acquisition, leasing, management, development and redevelopment of regional malls throughout the United States.  The Company is the sole general partner and owns an 81% ownership interest in The Macerich Partnership, L.P.  Macerich now owns approximately 60 million square feet of gross leaseable area consisting primarily of interests in 59 regional malls.  Additional information about The Macerich Company can be obtained from the Company’s web site at www.macerich.com

 

Investor Conference Call

 

The Company will provide an online Web simulcast and rebroadcast of its quarterly earnings conference call.  The call will be available on The Macerich Company’s website at www.macerich.com and through CCBN at www.fulldisclosure.com.  The call begins today, May 7, 2004 at 10:30 AM Pacific Time. To listen to the call, please go to any of these web sites at least 15 minutes prior to the call in order to register and download

 



 

audio software if needed. An online replay at www.macerich.com will be available for one year after the call.

 

Note:  This release contains statements that constitute forward-looking statements. Stockholders are cautioned that any such forward-looking statements are not guarantees of future performance and involve risks, uncertainties and other factors that may cause actual results, performance or achievements of the Company to vary materially from those anticipated, expected or projected.  Such factors include, among others, general industry, economic and business conditions, which will, among other things, affect demand for retail space or retail goods, availability and creditworthiness of current and prospective tenants, anchor or tenant bankruptcies, closures, mergers or consolidations, lease rates and terms, interest rate fluctuations, availability and cost of financing and operating expenses; adverse changes in the real estate markets including, among other things, competition from other companies, retail formats and technology, risks of real estate development and redevelopment, acquisitions and dispositions; governmental actions and initiatives (including legislative and regulatory changes); environmental and safety requirements; and terrorist activities which could adversely affect all of the above factors.  The reader is directed to the Company’s various filings with the Securities and Exchange Commission, for a discussion of such risks and uncertainties.

(See attached tables)

##

 



 

THE MACERICH COMPANY

FINANCIAL HIGHLIGHTS

(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)

 

Results of Operations:

 

 

 

Results before SFAS 144 (f)

 

Impact of SFAS 144 (f)

 

Results after SFAS 144 (f)

 

 

 

For the Three Months
Ended March 31

 

For the Three Months
Ended March 31

 

For the Three Months
Ended March 31

 

 

 

Unaudited

 

Unaudited

 

 

 

2004

 

2003

 

2004

 

2003

 

2004

 

2003

 

Minimum Rents (e)

 

75,947

 

72,137

 

 

(937

)

75,947

 

71,200

 

Percentage Rents

 

2,427

 

1,710

 

 

 

2,427

 

1,710

 

Tenant Recoveries

 

41,322

 

37,018

 

 

(118

)

41,322

 

36,900

 

Other Income

 

4,054

 

4,092

 

(82

)

(7

)

3,972

 

4,085

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total Revenues

 

123,750

 

114,957

 

(82

)

(1,062

)

123,668

 

113,895

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Shopping center and operating expenses (c)

 

42,836

 

39,362

 

 

(386

)

42,836

 

38,976

 

Depreciation and amortization

 

34,301

 

23,914

 

 

(153

)

34,301

 

23,761

 

General, administrative and other expenses (c)

 

3,024

 

2,336

 

 

 

3,024

 

2,336

 

Interest expense

 

33,333

 

34,008

 

 

 

33,333

 

34,008

 

Loss on early extinguishment of debt

 

405

 

 

 

 

 

405

 

 

Gain (loss)  on sale or writedown of assets

 

27

 

(38

)

(27

)

166

 

 

128

 

Pro rata  income of unconsolidated entities (c)

 

14,850

 

14,466

 

 

 

 

14,850

 

14,466

 

Income (loss) of the Operating Partnership from continuing operations

 

24,728

 

29,765

 

(109

)

(357

)

24,619

 

29,408

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Discontinued Operations:

 

 

 

 

 

 

 

 

 

 

 

 

 

Gain (loss) on sale of asset

 

 

 

27

 

(166

)

27

 

(166

)

Income from discontinued operations

 

 

 

82

 

523

 

82

 

523

 

Income before minority interests

 

24,728

 

29,765

 

 

 

24,728

 

29,765

 

Income allocated to minority interests

 

4,400

 

5,145

 

 

 

4,400

 

5,145

 

Net income before preferred dividends

 

20,328

 

24,620

 

 

 

20,328

 

24,620

 

Dividends earned by preferred stockholders (a)

 

2,212

 

5,195

 

 

 

2,212

 

5,195

 

Net income to common stockholders

 

18,116

 

19,425

 

 

 

18,116

 

19,425

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Average # of shares outstanding - basic

 

58,390

 

51,773

 

 

 

 

 

58,390

 

51,773

 

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

 

72,987

 

65,923

 

 

 

 

 

72,987

 

65,923

 

Average shares outstanding - diluted for FFO (d)

 

76,614

 

75,038

 

 

 

 

 

76,614

 

75,038

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Per share income- diluted before discontinued operations

 

 

 

 

 

 

 

0.31

 

0.36

 

Net income per share-basic

 

0.31

 

0.38

 

 

 

 

 

0.31

 

0.38

 

Net income per share- diluted

 

0.31

 

0.37

 

 

 

 

 

0.31

 

0.37

 

Dividend declared per share

 

0.61

 

0.57

 

 

 

 

 

0.61

 

0.57

 

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

 

66,471

 

58,090

 

 

 

 

 

66,471

 

58,090

 

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

 

68,683

 

63,285

 

 

 

 

 

68,683

 

63,285

 

FFO per share- basic  (b) (d)

 

0.92

 

0.89

 

 

 

 

 

0.92

 

0.89

 

FFO per share- diluted  (a)  (b) (d)

 

0.90

 

0.84

 

 

 

 

 

0.90

 

0.84

 

 



 


(a)          On February 25, 1998, the Company sold $100,000 of convertible preferred stock and on  June 16, 1998 another $150,000 of convertible preferred stock was issued.   The convertible preferred shares can be converted on a one for one basis for common stock.  These preferred shares are not assumed converted for  purposes of net income per share for the period ending March 31, 2004 and 2003 as it would be antidilutive to that calculation. On September 9, 2003, 5.487 million shares of  Series B convertible preferred stock were converted into common shares. The weighted average preferred shares outstanding are assumed converted for purposes of FFO per diluted share as they are dilutive to that calculation for all periods presented.

 

(b)         The Company uses FFO in addition to net income to report its operating and financial results and considers FFO and FFO-diluted as supplemental measures for the real estate industry and a supplement to Generally Accepted Accounting Principles (GAAP) measures. NAREIT defines FFO as net income (loss) (computed in accordance with GAAP), excluding gains (or losses) from extraordinary items and sales of depreciated operating properties, plus real estate related depreciation and amortization and after adjustments for unconsolidated partnerships and joint ventures.  Adjustments for unconsolidated partnerships and joint ventures are calculated to reflect FFO on the same basis. FFO and FFO on a fully diluted basis are useful to investors in comparing operating and financial results between periods.  This is especially true since FFO excludes real estate depreciation and amortization, as the Company believes real estate values fluctuate based on market conditions rather than depreciating in value ratably on a straight-line basis over time.  FFO on a fully diluted basis is one of the measures investors find most useful in measuring the dilutive impact of outstanding convertible securites.  FFO does not represent cash flow from operations as defined by GAAP, should not be considered as an alternative to net income as defined by GAAP and is not indicative of cash available to fund all cash flow needs. FFO as presented may not be comparable to similarly titled measures reported by other real estate investment trusts.

 

Effective January 1, 2003, gains or losses on sale of peripheral land and the impact of SFAS 141 have been included in FFO. The inclusion of gains on sales of peripheral land increased FFO for the three months ended March 31, 2004 and 2003 by $1,417 and $524, respectively, or by $.02 per share and $.01 per share, respectively. Additionally, the impact of SFAS No. 141 increased FFO for the three months ended March 31, 2004 and 2003 by $1.9 million and $1.1 million, respectively, or by $.025 per share and $.015 per share, respectively. The Company adopted SFAS No. 141 (see Note (e) below) effective October 1, 2002.

 

(c)          This includes, using the equity method of accounting, the Company’s prorata share of the equity in income or loss of its unconsolidated joint ventures  for all periods presented and for Macerich Management Company through June 30, 2003. Effective July 1, 2003, the Company has consolidated Macerich Management Company. Certain reclassifications have been made in the 2003 financial highlights to conform to the 2004 financial highlights presentation.

 

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

 

(e)          Effective October 1, 2002, the Company adopted SFAS No. 141, Business Combinations, which requires companies that have acquired assets subsequent to June 2001 to reflect the discounted net present value of market rents in excess of rents in place at the date of acquisition as a deferred credit to be amortized into income over the average remaining life of the acquired leases. Additionally, depreciation and amortization reflects the impact  of SFAS 141. The impact on EPS for the three months ending March 31, 2004 and 2003 was approximately ($.08) per share and $.02 per share, respectively.

 

(f)            In October 2001, the FASB issued SFAS No. 144, “Accounting for the Impairment or Disposal of Long-Lived Assets” (“SFAS 144”). SFAS 144 addresses financial accounting and reporting for the impairment or disposal of long-lived assets. The Company adopted SFAS 144 on January 1, 2002. The Company sold its 67% interest in Paradise Village Gateway on January 2, 2003 (acquired in July 2002), and the loss on sale of $0.2 million has been reclassified to discontinued operations.  Additionally, the Company sold Bristol Center on August 4, 2003, and the results for the period January 1, 2003 to March 31, 2003 and the results for the period January 1, 2004 to March 31, 2004 have been reclassified to discontinued operations. The sale of Bristol Center resulted in a gain on sale of asset of $22.2 million.

 



 

Summarized Balance Sheet Information

 

 

 

Mar 31
2004

 

Dec 31
2003

 

 

 

(UNAUDITED)

 

Cash and cash equivalents

 

$

80,937

 

$

47,160

 

Investment in real estate, net (i)

 

$

3,226,656

 

$

3,186,725

 

Investments in unconsolidated entities (j)

 

$

581,958

 

$

577,908

 

Total Assets

 

$

4,207,064

 

$

4,145,593

 

Mortgage and notes payable

 

$

2,748,162

 

$

2,682,599

 

 

 

 

Mar 31
2004

 

Mar 31
2003

 

Additional financial data as of:

 

 

 

 

 

Occupancy of centers (g)

 

91.80

%

92.50

%

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

 

7.90

%

0.00

%

 

 

 

 

 

 

Additional financial data for the three months ended:

 

 

 

 

 

Acquisitions of property and equipment - including  joint ventures prorata

 

$

36,277

 

$

4,227

 

Redevelopment and expansions of centers- including joint ventures prorata

 

$

52,897

 

$

35,291

 

Renovations of centers-  including joint ventures at prorata

 

$

9,293

 

$

1,270

 

Tenant allowances- including joint ventures at prorata

 

$

2,419

 

$

1,470

 

Deferred leasing costs- including joint ventures at prorata

 

$

3,470

 

$

3,091

 

 


(g)         excludes redevelopment properties-  Crossroads Mall- Boulder, Parklane Mall, Queens expansion, Scottsdale 101 and La Encantada.

(h)         includes mall and freestanding stores.

(i)             includes construction in process on wholly owned assets of $175,731 at March 31, 2004 and $268,810 at December 31, 2003.

(j)             the Company’s prorata share of construction in process on unconsolidated entities of $7,143 at March 31, 2004 and $8,188 at December 31, 2003.

 



 

PRORATA SHARE OF JOINT VENTURES

 

 

 

For the Three Months
Ended March 31

 

 

 

Unaudited

 

(Unaudited)

 

(All amounts in thousands)

 

 

 

2004

 

2003

 

Revenues:

 

 

 

 

 

Minimum rents

 

$

40,061

 

$

39,773

 

Percentage rents

 

1,508

 

1,387

 

Tenant recoveries

 

17,889

 

16,143

 

Management fee  (c)

 

 

2,584

 

Other

 

1,989

 

1,081

 

Total revenues

 

61,447

 

60,968

 

 

 

 

 

 

 

Expenses:

 

 

 

 

 

Shopping center expenses

 

20,700

 

19,117

 

Interest expense

 

14,956

 

14,163

 

Management company expense (c)

 

 

2,012

 

Depreciation and amortization

 

12,358

 

11,657

 

Total operating expenses

 

48,014

 

46,949

 

 

 

 

 

 

 

Gain on sale or writedown of assets

 

1,417

 

447

 

 

 

 

 

 

 

Net income

 

14,850

 

14,466

 

 

RECONCILIATION OF NET INCOME TO FFO

 

 

 

For the Three Months
Ended March 31

 

 

 

(All amounts in thousands)

 

 

 

(UNAUDITED)

 

 

 

2004

 

2003

 

 

 

 

 

 

 

Net income - available to common stockholders

 

$

18,116

 

$

19,425

 

 

 

 

 

 

 

Adjustments to reconcile net income to FFO- basic

 

 

 

 

 

Minority interest

 

4,400

 

5,145

 

(Gain) loss on sale of wholly owned assets

 

(27

)

38

 

plus gain on land sales- consolidated assets

 

 

128

 

 

 

 

 

 

 

(Gain) loss on sale or write-down of assets from unconsolidated entities (pro rata share)

 

(1,417

)

(447

)

plus gain on land sales- unconsolidated assets

 

1,417

 

396

 

 

 

 

 

 

 

Depreciation and amortization on wholly owned centers

 

34,301

 

23,914

 

Depreciation and amortization on joint ventures and from the management companies (pro rata)

 

12,358

 

11,657

 

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

 

(2,677

)

(2,166

)

 

 

 

 

 

 

Total FFO - basic

 

66,471

 

58,090

 

 

 

 

 

 

 

Additional adjustment to arrive at FFO -diluted

 

 

 

 

 

Preferred stock dividends earned

 

2,212

 

5,195

 

Effect of employee/director stock incentive plans

 

antidilutive

 

antidilutive

 

FFO - diluted

 

68,683

 

63,285

 

Weighted average shares outstanding - diluted  (d)

 

76,614

 

75,038

 

 



 

THE MACERICH COMPANY

RECONCILIATION OF NET INCOME TO EBIDTA

 

 

 

For the Three Months
Ended March 31

 

 

 

(All amounts in thousands)

 

 

 

(UNAUDITED)

 

 

 

2004

 

2003

 

 

 

 

 

 

 

Net income - available to common stockholders

 

$

18,116

 

$

19,425

 

 

 

 

 

 

 

Interest expense

 

33,333

 

34,008

 

Interest expense - unconsolidated entitites (pro rata)

 

14,956

 

14,163

 

Depreciation and amortization - wholly-owned centers

 

34,301

 

23,914

 

Depreciation and amortization - unconsolidated entitites (pro rata)

 

12,358

 

11,657

 

Minority interest

 

4,400

 

5,145

 

Loss on early extinguishment of debt

 

405

 

 

Loss (gain) on sale of assets - wholly-owned centers

 

(27

)

38

 

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

 

(1,417

)

(447

)

Preferred dividends

 

2,212

 

5,195

 

 

 

 

 

 

 

EBITDA (k)

 

$

118,637

 

$

113,098

 

 

THE MACERICH COMPANY

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

 

 

 

For the Three Months
Ended March 31

 

 

 

(All amounts in thousands)

 

 

 

(UNAUDITED)

 

 

 

2004

 

2003

 

 

 

 

 

 

 

EBITDA (k)

 

$

118,637

 

$

113,098

 

 

 

 

 

 

 

Add: REIT general and administrative expenses

 

3,024

 

2,336

 

Management Company expenses

 

846

 

1,879

 

EBITDA of non-comparable centers

 

(10,644

)

(7,307

)

 

 

 

 

 

 

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

 

$

111,863

 

$

110,006

 

 


(k)          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.

 

(l)             The Company presents same-center NOI because the Company believes it is useful for investors to evaluate the operating performance of comparable centers. Same-center NOI is calculated using total EBITDA and subtracting out EBITDA from non-comparable centers and eliminating the management companies and the Company’s general and administrative expenses.