UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 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) August 1, 2019
THE MACERICH COMPANY
(Exact Name of Registrant as Specified in Charter)
MARYLAND | 1-12504 | 95-4448705 | ||
(State or Other Jurisdiction of Incorporation) |
(Commission File Number) |
(IRS Employer Identification No.) |
401 Wilshire Boulevard, Suite 700, Santa Monica, California 90401
(Address of Principal Executive Offices) (Zip Code)
Registrants telephone number, including area code (310) 394-6000
N/A
(Former Name or Former Address, 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 (see General Instruction A.2. below):
☐ | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
☐ | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
☐ | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
☐ | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Securities registered pursuant to Section 12(b) of the Act:
Title of each class |
Trading symbol(s) |
Name of each exchange on which registered | ||
Common stock of The Macerich Company, $0.01 par value per share | MAC | The New York Stock Exchange |
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (17 CFR §230.405) or Rule 12b-2 of the Securities Exchange Act of 1934 (17 CFR §240.12b-2).
Emerging growth company ☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
ITEM 2.02 | RESULTS OF OPERATIONS AND FINANCIAL CONDITION. |
The Company issued a press release on August 1, 2019 (the Press Release) announcing results of operations for the Company for the quarter ended June 30, 2019 and such Press Release is furnished as Exhibit 99.1 hereto.
On August 1, 2019, 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 six months ended June 30, 2019 and such Supplemental Financial Information is furnished as Exhibit 99.2 hereto.
The Press Release and Supplemental Financial Information included as exhibits with this report are being furnished pursuant to Item 2.02 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. |
The Press Release and Supplemental Financial Information included as exhibits with this report are 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.
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EXHIBIT INDEX
EXHIBIT NUMBER |
NAME | |
99.1 | Press Release dated August 1, 2019 | |
99.2 | Supplemental Financial Information for the three and six months ended June 30, 2019 |
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, The Macerich Company has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
THE MACERICH COMPANY | ||||||
By: Scott W. Kingsmore | ||||||
August 1, 2019 Date |
/s/ Scott W. Kingsmore Executive Vice President, Chief Financial Officer and Treasurer |
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Exhibit 99.1
PRESS RELEASE
For: | THE MACERICH COMPANY MACERICH ANNOUNCES QUARTERLY RESULTS |
SANTA MONICA, CA, August 1, 2019. The Macerich Company (NYSE MAC) today announced results of operations for the quarter ended June 30, 2019, which included net income attributable to the Company of $15.7 million or $.11 per share-diluted for the quarter ended June 30, 2019 compared to net income attributable to the Company for the quarter ended June 30, 2018 of $7.8 million or $.05 per share-diluted. For the second quarter 2019, funds from operations (FFO)-diluted was $133.6 million or $.88 per share-diluted compared to $125.7 million or $.83 per share-diluted, for the quarter ended June 30, 2018. A description and reconciliation of earnings per share (EPS)-diluted to FFO per share-diluted is included within the financial tables accompanying this press release.
Results and Highlights
| Mall tenant annual sales per square foot for the portfolio increased by 12.1% to $776 for the twelve months ended June 30, 2019 compared to $692 for the twelve months ended June 30, 2018. |
| Re-leasing spreads for the twelve months ended June 30, 2019 were up 9.4%. |
| Mall portfolio occupancy was 94.1% at June 30, 2019 compared to 94.3% at June 30, 2018. |
| Average rent per square foot increased to $61.17 at June 30, 2019, up 4.0% from $58.84 at June 30, 2018. |
| The Company completed $476 million of loan financing at an average interest rate of 4.19% netting $112 million of excess loan proceeds. |
We are very pleased by a good second quarter, which continued to show strong tenant sales growth. The leasing environment remains strong with total leasing volume up 29% year to date compared to 2018, said the Companys Chief Executive Officer, Tom OHern. In addition, we are very excited to have recaptured former Sears boxes at some of our best centers, and to now be able to redevelop those boxes with more productive uses, which combined with the redevelopments at Scottsdale Fashion Square and Fashion District of Philadelphia will add significant enterprise value.
Development/Redevelopment:
The Company is progressing toward substantial completion of its multi-dimensional redevelopment of Scottsdale Fashion Square. Industrious and Apple are open and thriving within the former Barneys location. Excellent leasing momentum continues within the newly renovated luxury wing, as prominent new luxury brands continue to be added to this distinctive area of the property. The fully-leased 80,000 square foot expansion is the only portion of the property still under development. The new high-end and lifestyle restaurants including Oceans 44, Nobu, Farmhouse, Toca Madera, Tocaya Organica and Zinque are expected to open during the balance of 2019 and into early 2020. Both Equinox and Caesars Republic are anticipated to open during the first half of 2021. Project costs are expected to be in the range of $140 to $160 million (or $70 to $80 million at the Companys pro rata share). As a result of ownerships capital investment, consumer traffic has increased nearly 7% through June 2019, and our expectations continue to be surpassed as we continue to add new and exciting brands throughout this marquis, flagship retail destination.
Redevelopment continues on Fashion District Philadelphia, a four-level retail hub in Center City spanning over 800,000 square feet across three city blocks in the heart of downtown Philadelphia. The property is owned
1
in a 50/50 joint venture with Pennsylvania REIT. Tenant construction is proceeding in preparation for store openings, which will initially commence in September 2019. The joint venture has signed leases or is in active lease negotiations with tenants for 90% of the leasable area. Noteworthy commitments include Century 21, Burlington, H&M, Nike, Forever 21, AMC Theaters, Round One, City Winery, Wonderspaces, Ulta, American Eagle/Aerie, Hollister, Columbia Sportswear, Guess Factory and Skechers.
Horizontal site work continues to be performed by the Carson Reclamation Authority on Los Angeles Premium Outlets in Carson, CA, a state-of-the-art Premium Outlet center, which we own in a 50/50 joint venture with Simon Property Group. This extremely well-located shopping destination fronting Interstate-405 will include approximately 400,000 square feet in its first phase, and is currently scheduled to open in fall 2021, followed by an additional approximately 165,000 square feet in its second phase.
Construction has commenced on the Companys joint venture at One Westside. The entirety of this 584,000 square foot, Class A creative office campus in West Los Angeles will be occupied by Google. Estimated, remaining project costs for this coveted, well-located real estate are approximately $100 million at the Companys 25% pro-rata share.
During the second quarter, the Company recaptured ten Sears locations through formal lease rejections and lease terminations. These ten locations include seven that are owned by the Companys 50/50 joint venture with Seritage Growth Properties at Los Cerritos Center, Washington Square, Vintage Faire Mall, Chandler Fashion Center, Arrowhead Towne Center, Deptford Mall and South Plains Mall, and three that are wholly-owned by the Company at Wilton Mall, La Cumbre Mall and Towne Mall. The Company currently anticipates aggregate redevelopment investments at these locations of $250 to $300 million at the Companys share over the next several years. Exciting, new tenants are expected to open at several projects in late 2020, and entitlements are underway at Washington Square and Los Cerritos Center for unique and transformative densification projects. For more details on the Companys plans, refer to the Companys most recent supplemental filing for the quarter ended June 30, 2019.
Financing Activity:
On June 3, 2019, the Companys joint venture closed a $220 million, 10-year loan on San Tan Village in Gilbert, AZ with a fixed interest rate of 4.30%. This new loan repaid the existing $120 million loan securing the property, and the Companys share of incremental loan proceeds was $85 million.
On June 27, 2019, the Companys joint venture closed a $256 million, 5-year loan on Chandler Fashion Center in Chandler, AZ with a fixed interest rate of 4.10%. This new loan repaid the existing $200 million loan securing the property, and the Companys share of incremental loan proceeds was $28 million.
The Companys 50/50 joint venture in Tysons Tower (office) and Tysons Vita (multi-family) is engaged in financings on these two unencumbered properties totaling $190 million and $95 million, respectively. Both transactions are expected to close near the end of the third quarter of 2019.
Along with other loans either previously closed or pending, including a new construction loan on One Westside that is expected to close in the third quarter of 2019 and a refinance of the recently redeveloped Kings Plaza that is expected to close in the fourth quarter of 2019, the foregoing loan transactions are part of a financing plan for 2019 that we expect to exceed $2 billion (including our joint venture partners share). The 2019 financing plan is progressing extremely well, and is expected to generate excess loan proceeds exceeding $600 million (the Companys pro-rata share).
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2019 Earnings Guidance:
The Company is re-affirming its FFO per share-diluted guidance and is revising its previous estimate of EPS-diluted guidance to reflect its current expectation for 2019. A reconciliation of estimated EPS-diluted to FFO per share-diluted follows:
2019 range | ||||
EPS-diluted |
$ | 0.42 - $0.50 | ||
Plus: real estate depreciation and amortization |
3.17 - 3.17 | |||
Plus: loss on sale or write-down of depreciable assets |
0.09 - 0.09 | |||
Less: impact of financing expense in connection with ASC 606 (Chandler Freehold) |
0.18 - 0.18 | |||
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FFO per share-diluted |
$ | 3.50 - $3.58 | ||
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More details of the guidance assumptions are included in the Companys Form 8-K supplemental financial information.
Macerich, an S&P 500 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.
Macerich currently owns 51 million square feet of real estate consisting primarily of interests in 47 regional shopping centers. Macerich specializes in successful retail properties in many of the countrys most attractive, densely populated markets with significant presence in the West Coast, Arizona, Chicago, and the Metro New York to Washington, DC corridor. A recognized leader in sustainability, Macerich has earned Nareits prestigious Leader in the Light award every year from 2014-2018. For the fourth straight year in 2018 Macerich achieved the #1 GRESB ranking in the North American Retail Sector, among many other environmental accomplishments. Additional information about Macerich can be obtained from the Companys website 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 Companys website at www.macerich.com (Investors Section). The call begins on August 1, 2019 at 10:00 AM Pacific Time. To listen to the call, please go to the website 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 (Investors Section) 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 Investors 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 which can be identified by the use of words, such as expects, anticipates, assumes, projects, estimated and scheduled and similar expressions that do not relate to historical matters. 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, as well as national, regional and local 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, terms and payments, interest rate fluctuations, availability, terms and cost of financing and operating expenses; adverse changes in the real estate markets
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including, among other things, competition from other companies, retail formats and technology, risks of real estate development and redevelopment, acquisitions and dispositions; the liquidity of real estate investments, governmental actions and initiatives (including legislative and regulatory changes); environmental and safety requirements; and terrorist activities or other acts of violence which could adversely affect all of the above factors. The reader is directed to the Companys various filings with the Securities and Exchange Commission, including the Annual Report on Form 10-K for the year ended December 31, 2018, for a discussion of such risks and uncertainties, which discussion is incorporated herein by reference. The Company does not intend, and undertakes no obligation, to update any forward-looking information to reflect events or circumstances after the date of this release or to reflect the occurrence of unanticipated events unless required by law to do so.
(See attached tables)
##
4
THE MACERICH COMPANY
FINANCIAL HIGHLIGHTS
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
Results of Operations:
For the Three Months Ended June 30, |
For the Six Months Ended June 30, |
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Unaudited | Unaudited | |||||||||||||||
2019 | 2018 | 2019 | 2018 | |||||||||||||
Revenues: |
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Leasing revenue (a) |
$ | 211,022 | $ | 217,014 | $ | 422,030 | $ | 435,126 | ||||||||
Other income |
7,831 | 7,035 | 13,165 | 15,115 | ||||||||||||
Management Companies revenues |
9,119 | 10,496 | 19,299 | 21,038 | ||||||||||||
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Total revenues |
227,972 | 234,545 | 454,494 | 471,279 | ||||||||||||
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Expenses: |
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Shopping center and operating expenses |
64,092 | 68,072 | 133,696 | 142,582 | ||||||||||||
Management Companies operating expenses |
15,692 | 18,274 | 34,706 | 53,263 | ||||||||||||
Leasing expenses (a) |
7,677 | 2,692 | 15,182 | 6,026 | ||||||||||||
REIT general and administrative expenses |
4,589 | 4,956 | 11,550 | 12,975 | ||||||||||||
Costs related to shareholder activism |
| 19,369 | | 19,369 | ||||||||||||
Depreciation and amortization |
82,385 | 78,868 | 163,853 | 158,805 | ||||||||||||
Interest expense (b) |
37,109 | 38,915 | 75,466 | 91,550 | ||||||||||||
Loss on extinguishment of debt |
| | 351 | | ||||||||||||
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Total expenses |
211,544 | 231,146 | 434,804 | 484,570 | ||||||||||||
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Equity in income of unconsolidated joint ventures |
7,257 | 15,669 | 19,500 | 32,541 | ||||||||||||
Income tax (expense) benefit |
(679 | ) | (684 | ) | (1,025 | ) | 2,265 | |||||||||
Loss on sale or write down of assets, net |
(9,059 | ) | (9,518 | ) | (15,375 | ) | (47,030 | ) | ||||||||
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Net income (loss) |
13,947 | 8,866 | 22,790 | (25,515 | ) | |||||||||||
Less net (loss) income attributable to noncontrolling interests |
(1,787 | ) | 1,050 | (768 | ) | 242 | ||||||||||
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Net income (loss) attributable to the Company |
$ | 15,734 | $ | 7,816 | $ | 23,558 | ($ | 25,757 | ) | |||||||
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Weighted average number of shares outstandingbasic |
141,344 | 141,137 | 141,303 | 141,081 | ||||||||||||
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Weighted average shares outstanding, assuming full conversion of OP Units (c) |
151,760 | 151,535 | 151,718 | 151,426 | ||||||||||||
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Weighted average shares outstandingFunds From Operations (FFO)diluted (c) |
151,760 | 151,535 | 151,718 | 151,434 | ||||||||||||
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Earnings per share ("EPS")basic |
$ | 0.11 | $ | 0.05 | $ | 0.16 | ($ | 0.19 | ) | |||||||
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EPSdiluted |
$ | 0.11 | $ | 0.05 | $ | 0.16 | ($ | 0.19 | ) | |||||||
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Dividend declared per share |
$ | 0.75 | $ | 0.74 | $ | 1.50 | $ | 1.48 | ||||||||
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FFObasic (c) (d) |
$ | 133,641 | $ | 125,688 | $ | 255,575 | $ | 249,201 | ||||||||
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FFOdiluted (c) (d) |
$ | 133,641 | $ | 125,688 | $ | 255,575 | $ | 249,201 | ||||||||
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FFOdiluted, excluding loss on extinguishment of debt and costs related to shareholder activism (c) (d) |
$ | 133,641 | $ | 145,057 | $ | 255,926 | $ | 268,570 | ||||||||
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FFO per sharebasic (c) (d) |
$ | 0.88 | $ | 0.83 | $ | 1.68 | $ | 1.65 | ||||||||
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FFO per sharediluted (c) (d) |
$ | 0.88 | $ | 0.83 | $ | 1.68 | $ | 1.65 | ||||||||
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FFO per sharediluted, excluding loss on extinguishment of debt and costs related to shareholder activism (c) (d) |
$ | 0.88 | $ | 0.96 | $ | 1.69 | $ | 1.77 | ||||||||
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5
THE MACERICH COMPANY
FINANCIAL HIGHLIGHTS
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
(a) | In accordance with the adoption of ASC Topic 842, Leases (ASC 842) effective January 1, 2019, the Company is required to present all revenues related to its leases as a single line item. In addition, ASC 842 requires that the Company present lease revenues net of the Companys provision for bad debts (See the Companys Form 8-K supplemental financial information for further detail of the components of leasing revenue). For comparison purposes, the Company has reclassified minimum rents, percentage rents, tenant recoveries and the leasing portion of other revenues for the three and six months ended June 30, 2018. For the three and six months ended June 30, 2018, the Companys provision for bad debts is included in shopping center and operating expenses. |
In accordance with ASC 842, the Company has expensed all leasing costs that were not incremental and contingent to the execution of new leases or lease renewals. For comparison purposes, the Company has reclassified leasing expenses for the three and six months ended June 30, 2018 that were previously included in Management Companies operating expenses.
(b) | The Company accounts for its investment in the Chandler Fashion Center and Freehold Raceway Mall (Chandler Freehold) joint venture as a financing arrangement. As a result, the Company has included in interest expense (i) a credit of $17,257 and $31,521 to adjust for the change in the fair value of the financing arrangement obligation during the three and six months ended June 30, 2019, respectively; and a credit of $8,768 and $4,386 to adjust for the change in fair value of the financing arrangement obligation during the three and six months ended June 30, 2018, respectively, (ii) distributions of $1,982 and $3,879 to its partner representing the partners share of net income for the three and six months ended June 30, 2019, respectively; and $2,464 and $4,466 to its partner representing the partners share of net income for the three and six months ended June 30, 2018, respectively and (iii) distributions of $2,032 and $3,952 to its partner in excess of the partners share of net income for the three and six months ended June 30, 2019, respectively; and distributions of $1,411 and $3,049 to its partner in excess of the partners share of net income for the three and six months ended June 30, 2018, respectively. |
(c) | The Macerich Partnership, L.P. (the Operating Partnership or the OP) has operating partnership units (OP units). OP units can be converted into shares of Company common stock. Conversion of the OP units not owned by the Company has been assumed for purposes of calculating FFO per share and the weighted average number of shares outstanding. The computation of average shares for FFOdiluted includes the effect of share and unit-based compensation plans, stock warrants and convertible senior notes using the treasury stock method. It also assumes conversion of MACWH, LP preferred and common units to the extent they are dilutive to the calculation. |
(d) | 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. The National Association of Real Estate Investment Trusts (Nareit) defines FFO as net income (loss) (computed in accordance with GAAP), excluding gains (or losses) from sales of properties, plus real estate related depreciation and amortization, impairment write-downs of real estate and write-downs of investments in an affiliate where the write-downs have been driven by a decrease in the value of real estate held by the affiliate and after adjustments for unconsolidated joint ventures. As a result of changes in accounting standards effective January 1, 2018 (ASC 606), the Company began treating its joint venture in Chandler Freehold as a financing arrangement for accounting purposes. In connection with this treatment, the Company recognizes financing expense on (i) the changes in fair value of the financing arrangement, (ii) any payments to such joint venture partner equal to their pro rata share of net income and (iii) any payments to such joint venture partner less than or in excess of their pro rata share of net income. The Company excludes from its definition of FFO the noted expenses related to the changes in fair value and for the payments to such joint venture partner less than or in excess of their pro rata share of net income. Although the Nareit definition of FFO predates this guidance for accounting |
6
THE MACERICH COMPANY
FINANCIAL HIGHLIGHTS
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
for financing arrangements, the Company believes that excluding the noted expenses resulting from the financing arrangement is consistent with the key objective of FFO as a performance measure and it allows the Companys current FFO to be comparable with the Companys FFO from prior quarters. Adjustments for unconsolidated joint ventures are calculated to reflect FFO on the same basis. The Company also presents FFO excluding extinguishment of debt and costs related to shareholder activism. |
FFO and FFO on a 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. The Company believes that such a presentation also provides investors with a more meaningful measure of its operating results in comparison to the operating results of other real estate investment trusts (REITs). In addition, the Company believes that FFO excluding non-routine costs related to shareholder activism provides useful supplemental information regarding the Companys performance as it shows a more meaningful and consistent comparison of the Companys operating performance and allows investors to more easily compare the Companys results. The Company believes that FFO on a diluted basis is a measure investors find most useful in measuring the dilutive impact of outstanding convertible securities.
The Company further believes that FFO does not represent cash flow from operations as defined by GAAP, should not be considered as an alternative to net income (loss) as defined by GAAP, and is not indicative of cash available to fund all cash flow needs. The Company also cautions that FFO as presented, may not be comparable to similarly titled measures reported by other REITs.
7
THE MACERICH COMPANY
FINANCIAL HIGHLIGHTS
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
Reconciliation of net income (loss) attributable to the Company to FFO attributable to common stockholders and unit holdersbasic and diluted, excluding loss on extinguishment of debt and costs related to shareholder activism (d):
For the Three Months Ended June 30, |
For the Six Months Ended June 30, |
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Unaudited | Unaudited | |||||||||||||||
2019 | 2018 | 2019 | 2018 | |||||||||||||
Net income (loss) attributable to the Company |
$ | 15,734 | $ | 7,816 | $ | 23,558 | ($ | 25,757 | ) | |||||||
Adjustments to reconcile net income (loss) attributable to the Company to FFO attributable to common stockholders and unit holdersbasic and diluted: |
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Noncontrolling interests in the OP |
1,147 | 562 | 1,724 | (1,888 | ) | |||||||||||
Loss on sale or write down of consolidated assets, net |
9,059 | 9,518 | 15,375 | 47,030 | ||||||||||||
Add: gain on undepreciated asset sales from consolidated assets |
| 548 | 534 | 1,355 | ||||||||||||
Noncontrolling interests share of (loss) gain on sale or write-down of consolidated joint ventures |
(3,369 | ) | (10 | ) | (3,369 | ) | 580 | |||||||||
Loss (gain) on sale or write down of assets from unconsolidated joint ventures (pro rata), net |
313 | (203 | ) | 384 | (46 | ) | ||||||||||
Add: gain (loss) on sales or write down of undepreciated assets from unconsolidated joint ventures (pro rata), net |
| 307 | | (1,778 | ) | |||||||||||
Depreciation and amortization on consolidated assets |
82,385 | 78,868 | 163,853 | 158,805 | ||||||||||||
Less depreciation and amortization allocable to noncontrolling interests in consolidated joint ventures |
(3,676 | ) | (3,635 | ) | (7,321 | ) | (7,276 | ) | ||||||||
Depreciation and amortization on unconsolidated joint ventures (pro rata) |
51,207 | 42,596 | 96,205 | 86,180 | ||||||||||||
Less: depreciation on personal property |
(3,934 | ) | (3,322 | ) | (7,799 | ) | (6,667 | ) | ||||||||
Financing expense in connection with the adoption of ASC 606 (Chandler Freehold) |
(15,225 | ) | (7,357 | ) | (27,569 | ) | (1,337 | ) | ||||||||
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FFO attributable to common stockholders and unit holdersbasic and diluted |
133,641 | 125,688 | 255,575 | 249,201 | ||||||||||||
Loss on extinguishment of debt |
| | 351 | | ||||||||||||
Costs related to shareholder activism |
| 19,369 | | 19,369 | ||||||||||||
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FFO attributable to common stockholders and unit holders, excluding loss on extinguishment of debt and costs related to shareholder activismdiluted |
$ | 133,641 | $ | 145,057 | $ | 255,926 | $ | 268,570 | ||||||||
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8
THE MACERICH COMPANY
FINANCIAL HIGHLIGHTS
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
Reconciliation of EPS to FFO per sharediluted (d):
For the Three Months Ended June 30, |
For the Six Months Ended June 30, |
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Unaudited | Unaudited | |||||||||||||||
2019 | 2018 | 2019 | 2018 | |||||||||||||
EPSdiluted |
$ | 0.11 | $ | 0.05 | $ | 0.16 | ($ | 0.19 | ) | |||||||
Per share impact of depreciation and amortization of real estate |
0.83 | 0.76 | 1.61 | 1.53 | ||||||||||||
Per share impact of loss on sale or write down of assets, net |
0.04 | 0.07 | 0.09 | 0.31 | ||||||||||||
Per share impact of financing expense in connection with the adoption of ASC 606 (Chandler Freehold) |
(0.10 | ) | (0.05 | ) | (0.18 | ) | (0.01 | ) | ||||||||
|
|
|
|
|
|
|
|
|||||||||
FFO per sharediluted |
$ | 0.88 | $ | 0.83 | $ | 1.68 | $ | 1.64 | ||||||||
Per share impact of loss on extinguishment of debt |
| | 0.01 | | ||||||||||||
Per share impact of costs related to shareholder activism |
| 0.13 | | 0.13 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
FFO per sharediluted, excluding loss on extinguishment of debt and costs related to shareholder activism |
$ | 0.88 | $ | 0.96 | $ | 1.69 | $ | 1.77 | ||||||||
|
|
|
|
|
|
|
|
9
THE MACERICH COMPANY
FINANCIAL HIGHLIGHTS
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
Reconciliation of Net income (loss) attributable to the Company to Adjusted EBITDA:
For the Three Months Ended June 30, |
For the Six Months Ended June 30, |
|||||||||||||||
Unaudited | Unaudited | |||||||||||||||
2019 | 2018 | 2019 | 2018 | |||||||||||||
Net income (loss) attributable to the Company |
$ | 15,734 | $ | 7,816 | $ | 23,558 | ($ | 25,757 | ) | |||||||
Interest expenseconsolidated assets |
37,109 | 38,915 | 75,466 | 91,550 | ||||||||||||
Interest expenseunconsolidated joint ventures (pro rata) |
26,368 | 28,227 | 53,422 | 53,660 | ||||||||||||
Depreciation and amortizationconsolidated assets |
82,385 | 78,868 | 163,853 | 158,805 | ||||||||||||
Depreciation and amortizationunconsolidated joint ventures (pro rata) |
51,207 | 42,596 | 96,205 | 86,180 | ||||||||||||
Noncontrolling interests in the OP |
1,147 | 562 | 1,724 | (1,888 | ) | |||||||||||
Less: Interest expense and depreciation and amortization allocable to noncontrolling interests in consolidated joint ventures |
(8,842 | ) | (9,232 | ) | (17,479 | ) | (18,013 | ) | ||||||||
Loss on extinguishment of debt |
| | 351 | | ||||||||||||
Loss on sale or write down of assets, netconsolidated assets |
9,059 | 9,518 | 15,375 | 47,030 | ||||||||||||
Loss (gain) on sale or write down of assets, netunconsolidated joint ventures (pro rata) |
313 | (203 | ) | 384 | (46 | ) | ||||||||||
Add: Noncontrolling interests share of (loss) gain on sale or write down of consolidated joint ventures, net |
(3,369 | ) | (10 | ) | (3,369 | ) | 580 | |||||||||
Income tax expense (benefit) |
679 | 684 | 1,025 | (2,265 | ) | |||||||||||
Distributions on preferred units |
101 | 100 | 201 | 199 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Adjusted EBITDA (e) |
$ | 211,891 | $ | 197,841 | $ | 410,716 | $ | 390,035 | ||||||||
|
|
|
|
|
|
|
|
10
THE MACERICH COMPANY
FINANCIAL HIGHLIGHTS
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
Reconciliation of Adjusted EBITDA to Net Operating Income (NOI) and to NOISame Centers:
For the Three Months Ended June 30, |
For the Six Months Ended June 30, |
|||||||||||||||
Unaudited | Unaudited | |||||||||||||||
2019 | 2018 | 2019 | 2018 | |||||||||||||
Adjusted EBITDA (e) |
$ | 211,891 | $ | 197,841 | $ | 410,716 | $ | 390,035 | ||||||||
REIT general and administrative expenses |
4,589 | 4,956 | 11,550 | 12,975 | ||||||||||||
Costs related to shareholder activism |
| 19,369 | | 19,369 | ||||||||||||
Management Companies revenues |
(9,119 | ) | (10,496 | ) | (19,299 | ) | (21,038 | ) | ||||||||
Management Companies operating expenses |
15,692 | 18,274 | 34,706 | 53,263 | ||||||||||||
Leasing expenses, including joint ventures at pro rata |
8,552 | 2,692 | 17,023 | 6,026 | ||||||||||||
Straight-line and above/below market adjustments |
(8,677 | ) | (8,668 | ) | (14,688 | ) | (16,840 | ) | ||||||||
|
|
|
|
|
|
|
|
|||||||||
NOIAll Centers |
222,928 | 223,968 | 440,008 | 443,790 | ||||||||||||
NOI of non-Same Centers |
(7,592 | ) | (11,296 | ) | (15,021 | ) | (22,726 | ) | ||||||||
|
|
|
|
|
|
|
|
|||||||||
NOISame Centers (f) |
215,336 | 212,672 | 424,987 | 421,064 | ||||||||||||
Lease termination income of Same Centers |
(3,247 | ) | (2,394 | ) | (3,905 | ) | (5,273 | ) | ||||||||
|
|
|
|
|
|
|
|
|||||||||
NOISame Centers, excluding lease termination income (f) |
$ | 212,089 | $ | 210,278 | $ | 421,082 | $ | 415,791 | ||||||||
|
|
|
|
|
|
|
|
(e) | Adjusted EBITDA represents earnings before interest, income taxes, depreciation, amortization, noncontrolling interests in the OP, extraordinary items, loss (gain) on remeasurement, sale or write down of assets, loss (gain) on extinguishment of debt and preferred dividends and includes joint ventures at their pro rata share. Management considers Adjusted 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. The Company believes that Adjusted EBITDA should not be construed as an alternative to operating income as an indicator of the Companys operating performance, or to cash flows from operating activities (as determined in accordance with GAAP) or as a measure of liquidity. The Company also cautions that Adjusted EBITDA, as presented, may not be comparable to similarly titled measurements reported by other companies. |
(f) | 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 Adjusted EBITDA and eliminating the impact of the management companies revenues and operating expenses, leasing expenses (including joint ventures at pro rata), the Companys general and administrative expenses, costs related to shareholder activism and the straight-line and above/below market adjustments to minimum rents and subtracting out NOI from non-Same Centers. |
11
Exhibit 99.2
Supplemental Financial Information
For the three and six months ended June 30, 2019
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 |
1-4 | |||
Overview |
1-2 | |||
Capital Information and Market Capitalization |
3 | |||
Changes in Total Common and Equivalent Shares/Units |
4 | |||
Financial Data |
5-11 | |||
Consolidated Statements of Operations (Unaudited) |
5 | |||
Consolidated Balance Sheet (Unaudited) |
6 | |||
Non-GAAP Pro Rata Financial Information (Unaudited) |
7-9 | |||
2019 Guidance Range |
10 | |||
Supplemental FFO Information |
11 | |||
Capital Expenditures |
12 | |||
Operational Data |
13-27 | |||
Sales Per Square Foot |
13 | |||
Sales Per Square Foot by Property Ranking |
14-17 | |||
Occupancy |
18 | |||
Average Base Rent Per Square Foot |
19 | |||
Cost of Occupancy |
20 | |||
Percentage of Net Operating Income by State |
21 | |||
Property Listing |
22-25 | |||
Joint Venture List |
26-27 | |||
Debt Tables |
28-30 | |||
Debt Summary |
28 | |||
Outstanding Debt by Maturity Date |
29-30 | |||
Development Pipeline |
31-32 | |||
Corporate Information |
33 |
This Supplemental Financial Information should be read in connection with the Companys second quarter 2019 earnings announcement (included as Exhibit 99.1 of the Companys Current Report on 8-K, event date August 1, 2019) as certain disclosures, definitions and reconciliations in such announcement have not been included in this 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, management and leasing of regional shopping centers located in the United States in many of the countrys most attractive, densely populated markets with significant presence on the West Coast, Arizona, Chicago and the Metro New York to Washington, DC corridor.
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 June 30, 2019, the Operating Partnership owned or had an ownership interest in 51 million square feet of gross leasable area (GLA) consisting primarily of interests in 47 regional shopping centers and five community/power shopping centers. These 52 centers (which include any related office space) are referred to hereinafter as the Centers, unless the context requires otherwise.
A recognized leader in sustainability, Macerich has earned Nareits prestigious Leader in the Light award every year from 2014-2018. For the fourth straight year in 2018 Macerich achieved the #1 GRESB ranking in the North American Retail Sector, among many other environmental accomplishments.
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 Companys 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.
The Company presents certain measures in this Exhibit on a pro rata basis which represents (i) the measure on a consolidated basis, minus the Companys partners share of the measure from its consolidated joint ventures (calculated based upon the partners percentage ownership interest); plus (ii) the Companys share of the measure from its unconsolidated joint ventures (calculated based upon the Companys percentage ownership interest). Management believes that these measures provide useful information to investors regarding its financial condition and/or results of operations because they include the Companys share of the applicable amount from unconsolidated joint ventures and exclude the Companys partners share from consolidated joint ventures, in each case presented on the same basis. The Company has several significant joint ventures and the Company believes that presenting various measures in this manner can help investors better understand the Companys financial condition and/or results of operations after taking into account its economic interest in these joint ventures. Management also uses these measures to evaluate regional property level performance and to make decisions about resource allocations. The Companys economic interest (as distinct from its legal ownership interest) in certain of its joint ventures could fluctuate from time to time and may not wholly align with its legal ownership interests because of provisions in certain joint venture agreements regarding distributions of cash flow based on capital account balances, allocations of profits and losses, payments of preferred returns and control over major decisions. Additionally, the Company does not control its unconsolidated joint ventures and the presentation of certain items, such as assets, liabilities, revenues and expenses, from these unconsolidated joint ventures does not represent the Companys legal claim to such items.
This document contains information constituting forward-looking statements and includes expectations regarding the Companys future operational results as well as development, redevelopment and expansion activities. 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
1
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, terms and payments, interest rate fluctuations, availability, terms and cost of financing, operating expenses, and competition; adverse changes in the real estate markets, including the liquidity of real estate investments; and risks of real estate development, redevelopment, and expansion, including availability, terms and cost of financing, construction delays, environmental and safety requirements, budget overruns, sunk costs and lease-up; the inability to obtain, or delays in obtaining, all necessary zoning, land-use, building, and occupancy and other required governmental permits and authorizations; and governmental actions and initiatives (including legislative and regulatory changes) as well as terrorist activities or other acts of violence which could adversely affect all of the above factors. Furthermore, occupancy rates and rents at a newly completed property may not be sufficient to make the property profitable. The reader is directed to the Companys various filings with the Securities and Exchange Commission, including the Annual Report on Form 10-K for the year ended December 31, 2018, for a discussion of such risks and uncertainties, which discussion is incorporated herein by reference. The Company does not intend, and undertakes no obligation, to update any forward-looking information to reflect events or circumstances after the date of this document or to reflect the occurrence of unanticipated events unless required by law to do so.
2
The Macerich Company
Supplemental Financial and Operating Information (unaudited)
Capital Information and Market Capitalization
Period Ended | ||||||||||||
6/30/2019 | 12/31/2018 | 12/31/2017 | ||||||||||
dollars in thousands, except per share data | ||||||||||||
Closing common stock price per share |
$ | 33.49 | $ | 43.28 | $ | 65.68 | ||||||
52 week high |
$ | 60.95 | $ | 69.73 | $ | 73.34 | ||||||
52 week low |
$ | 32.04 | $ | 40.90 | $ | 52.12 | ||||||
Shares outstanding at end of period |
||||||||||||
Class A non-participating convertible preferred units |
90,619 | 90,619 | 90,619 | |||||||||
Common shares and partnership units |
151,780,084 | 151,655,147 | 151,253,557 | |||||||||
|
|
|
|
|
|
|||||||
Total common and equivalent shares/units outstanding |
151,870,703 | 151,745,766 | 151,344,176 | |||||||||
|
|
|
|
|
|
|||||||
Portfolio capitalization data |
||||||||||||
Total portfolio debt, including joint ventures at pro rata |
$ | 7,934,465 | $ | 7,850,669 | $ | 7,692,719 | ||||||
Equity market capitalization |
5,086,150 | 6,567,557 | 9,940,285 | |||||||||
|
|
|
|
|
|
|||||||
Total market capitalization |
$ | 13,020,615 | $ | 14,418,226 | $ | 17,633,004 | ||||||
|
|
|
|
|
|
|||||||
Debt as a percentage of total market capitalization |
60.9 | % | 54.5 | % | 43.6 | % |
Portfolio Capitalization at June 30, 2019
3
The Macerich Company
Supplemental Financial and Operating Information (unaudited)
Changes in Total Common and Equivalent Shares/Units
Partnership Units |
Company Common Shares |
Class A Non-Participating Convertible Preferred Units |
Total Common and Equivalent Shares/ Units |
|||||||||||||
Balance as of December 31, 2018 |
10,433,435 | 141,221,712 | 90,619 | 151,745,766 | ||||||||||||
Conversion of partnership units to cash |
(590 | ) | | | (590 | ) | ||||||||||
Conversion of partnership units to common shares |
(21,000 | ) | 21,000 | | | |||||||||||
Issuance of stock/partnership units from restricted stock issuance or other share or unit-based plans |
3,407 | 90,074 | | 93,481 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Balance as of March 31, 2019 |
10,415,252 | 141,332,786 | 90,619 | 151,838,657 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Conversion of partnership units to cash |
(244 | ) | | | (244 | ) | ||||||||||
Conversion of partnership units to common shares |
| | | | ||||||||||||
Issuance of stock/partnership units from restricted stock issuance or other share or unit-based plans |
508 | 31,782 | | 32,290 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Balance as of June 30, 2019 |
10,415,516 | 141,364,568 | 90,619 | 151,870,703 | ||||||||||||
|
|
|
|
|
|
|
|
4
The Macerich Company
Consolidated Statements of Operations (Unaudited)
(Dollars in thousands)
For the Three Months Ended June 30, 2019 |
For the Six Months Ended June 30, 2019 |
|||||||
Revenues: |
||||||||
Leasing revenue |
$ | 211,022 | $ | 422,030 | ||||
Other income |
7,831 | 13,165 | ||||||
Management Companies revenues |
9,119 | 19,299 | ||||||
|
|
|
|
|||||
Total revenues |
227,972 | 454,494 | ||||||
|
|
|
|
|||||
Expenses: |
||||||||
Shopping center and operating expenses |
64,092 | 133,696 | ||||||
Management Companies operating expenses |
15,692 | 34,706 | ||||||
Leasing expenses |
7,677 | 15,182 | ||||||
REIT general and administrative expenses |
4,589 | 11,550 | ||||||
Depreciation and amortization |
82,385 | 163,853 | ||||||
Interest expense |
37,109 | 75,466 | ||||||
Loss on extinguishment of debt |
| 351 | ||||||
|
|
|
|
|||||
Total expenses |
211,544 | 434,804 | ||||||
Equity in income of unconsolidated joint ventures |
7,257 | 19,500 | ||||||
Income tax expense |
(679 | ) | (1,025 | ) | ||||
Loss on sale or write down of assets, net |
(9,059 | ) | (15,375 | ) | ||||
|
|
|
|
|||||
Net income |
13,947 | 22,790 | ||||||
Less net loss attributable to noncontrolling interests |
(1,787 | ) | (768 | ) | ||||
|
|
|
|
|||||
Net income attributable to the Company |
$ | 15,734 | $ | 23,558 | ||||
|
|
|
|
5
The Macerich Company
Consolidated Balance Sheet (Unaudited)
As of June 30, 2019
(Dollars in thousands)
ASSETS: |
||||
Property, net (a) |
$ | 6,689,545 | ||
Cash and cash equivalents |
104,880 | |||
Restricted cash |
43,548 | |||
Tenant and other receivables, net |
124,051 | |||
Right-of-use assets, net |
153,156 | |||
Deferred charges and other assets, net |
300,143 | |||
Due from affiliates |
11,005 | |||
Investments in unconsolidated joint ventures |
1,517,771 | |||
|
|
|||
Total assets |
$ | 8,944,099 | ||
|
|
|||
LIABILITIES AND EQUITY: |
||||
Mortgage notes payable |
$ | 4,305,028 | ||
Bank and other notes payable |
809,356 | |||
Accounts payable and accrued expenses |
52,894 | |||
Lease liabilities |
119,785 | |||
Other accrued liabilities |
253,221 | |||
Distributions in excess of investments in unconsolidated joint ventures |
115,426 | |||
Financing arrangement obligation |
319,019 | |||
|
|
|||
Total liabilities |
5,974,729 | |||
|
|
|||
Commitments and contingencies |
||||
Equity: |
||||
Stockholders equity: |
||||
Common stock |
1,413 | |||
Additional paid-in capital |
4,578,620 | |||
Accumulated deficit |
(1,805,097 | ) | ||
Accumulated other comprehensive loss |
(10,792 | ) | ||
|
|
|||
Total stockholders equity |
2,764,144 | |||
Noncontrolling interests |
205,226 | |||
|
|
|||
Total equity |
2,969,370 | |||
|
|
|||
Total liabilities and equity |
$ | 8,944,099 | ||
|
|
(a) | Includes construction in progress of $189,264. |
6
The Macerich Company
Non-GAAP Pro Rata Financial Information (Unaudited)
(Dollars in thousands)
For the Three Months Ended June 30, 2019 |
For the Six Months Ended June 30, 2019 |
|||||||||||||||
Noncontrolling Interests of Consolidated Joint Ventures (a) |
Companys Share of Unconsolidated Joint Ventures |
Noncontrolling Interests of Consolidated Joint Ventures (a) |
Companys Share of Unconsolidated Joint Ventures |
|||||||||||||
Revenues: |
||||||||||||||||
Leasing revenue |
$ | (12,757 | ) | $ | 113,268 | $ | (25,634 | ) | $ | 227,009 | ||||||
Other income |
(79 | ) | 7,068 | (212 | ) | 13,847 | ||||||||||
|
|
|
|
|
|
|
|
|||||||||
Total revenues |
(12,836 | ) | 120,336 | (25,846 | ) | 240,856 | ||||||||||
|
|
|
|
|
|
|
|
|||||||||
Expenses: |
||||||||||||||||
Shopping center and operating expenses |
(3,367 | ) | 34,124 | (7,117 | ) | 69,131 | ||||||||||
Leasing expenses |
(192 | ) | 1,067 | (373 | ) | 2,214 | ||||||||||
Depreciation and amortization |
(3,676 | ) | 51,207 | (7,321 | ) | 96,205 | ||||||||||
Interest expense |
(5,166 | ) | 26,368 | (10,158 | ) | 53,422 | ||||||||||
|
|
|
|
|
|
|
|
|||||||||
Total expenses |
(12,401 | ) | 112,766 | (24,969 | ) | 220,972 | ||||||||||
Equity in income of unconsolidated joint ventures |
| (7,257 | ) | | (19,500 | ) | ||||||||||
Loss on sale or write down of assets, net |
3,369 | (313 | ) | 3,369 | (384 | ) | ||||||||||
|
|
|
|
|
|
|
|
|||||||||
Net loss |
2,934 | | 2,492 | | ||||||||||||
Less net loss attributable to noncontrolling interests |
2,934 | | 2,492 | | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Net loss attributable to the Company |
$ | | $ | | $ | | $ | | ||||||||
|
|
|
|
|
|
|
|
(a) | Represents the Companys partners share of consolidated joint ventures. |
7
The Macerich Company
Non-GAAP Pro Rata Financial Information (Unaudited)
(Dollars in thousands)
As of June 30, 2019 | ||||||||
Noncontrolling Interests of Consolidated Joint Ventures (a) |
Companys Share of Unconsolidated Joint Ventures |
|||||||
ASSETS: |
||||||||
Property, net (b) |
$ | (341,914 | ) | $ | 4,466,589 | |||
Cash and cash equivalents |
(9,578 | ) | 92,500 | |||||
Restricted cash |
(118 | ) | 7,840 | |||||
Tenant and other receivables, net |
(5,228 | ) | 59,099 | |||||
Right-of-use assets, net |
(765 | ) | 48,726 | |||||
Deferred charges and other assets, net |
(3,333 | ) | 151,893 | |||||
Due from affiliates |
236 | (3,396 | ) | |||||
Investments in unconsolidated joint ventures, at equity |
| (1,517,771 | ) | |||||
|
|
|
|
|||||
Total assets |
$ | (360,700 | ) | $ | 3,305,480 | |||
|
|
|
|
|||||
LIABILITIES AND EQUITY: |
||||||||
Mortgage notes payable |
$ | (359,001 | ) | $ | 2,996,627 | |||
Bank and other notes payable |
(1,625 | ) | 184,080 | |||||
Accounts payable and accrued expenses |
(1,727 | ) | 60,182 | |||||
Lease liabilities |
(765 | ) | 48,009 | |||||
Other accrued liabilities |
(8,199 | ) | 132,008 | |||||
Distributions in excess of investments in unconsolidated joint ventures |
| (115,426 | ) | |||||
Financing arrangement obligation |
(319,019 | ) | | |||||
|
|
|
|
|||||
Total liabilities |
(690,336 | ) | 3,305,480 | |||||
|
|
|
|
|||||
Equity: |
||||||||
Stockholders equity |
331,286 | | ||||||
Noncontrolling interests |
(1,650 | ) | | |||||
|
|
|
|
|||||
Total equity |
329,636 | | ||||||
|
|
|
|
|||||
Total liabilities and equity |
$ | (360,700 | ) | $ | 3,305,480 | |||
|
|
|
|
(a) | Represents the Companys partners share of consolidated joint ventures. |
(b) | This includes $7,068 of construction in progress relating to the Companys partners share from consolidated joint ventures and $308,614 of construction in progress relating to the Companys share from unconsolidated joint ventures. |
8
The Macerich Company
Non-GAAP Pro Rata Schedule of Leasing Revenue (Unaudited)
(Dollars in thousands)
For the Three Months Ended June 30, 2019 | ||||||||||||||||||||
Consolidated | Non- Controlling Interests (a) |
Company's Consolidated Share |
Company's Share of Unconsolidated Joint Ventures |
Company's Total Share |
||||||||||||||||
Revenues: |
||||||||||||||||||||
Minimum rents |
$ | 142,720 | $ | (8,381 | ) | $ | 134,339 | $ | 81,134 | $ | 215,473 | |||||||||
Percentage rents |
2,322 | (44 | ) | 2,278 | 851 | 3,129 | ||||||||||||||
Tenant recoveries |
61,716 | (3,998 | ) | 57,718 | 30,040 | 87,758 | ||||||||||||||
Other |
6,271 | (557 | ) | 5,714 | 2,227 | 7,941 | ||||||||||||||
Less: Bad debt expense |
(2,007 | ) | 223 | (1,784 | ) | (984 | ) | (2,768 | ) | |||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Total leasing revenue |
$ | 211,022 | $ | (12,757 | ) | $ | 198,265 | $ | 113,268 | $ | 311,533 | |||||||||
|
|
|
|
|
|
|
|
|
|
For the Six Months Ended June 30, 2019 | ||||||||||||||||||||
Consolidated | Non- Controlling Interests (a) |
Company's Consolidated Share |
Company's Share of Unconsolidated Joint Ventures |
Company's Total Share |
||||||||||||||||
Revenues: |
||||||||||||||||||||
Minimum rents |
$ | 283,761 | $ | (16,680 | ) | $ | 267,081 | $ | 162,026 | $ | 429,107 | |||||||||
Percentage rents |
4,448 | (107 | ) | 4,341 | 2,322 | 6,663 | ||||||||||||||
Tenant recoveries |
125,925 | (8,169 | ) | 117,756 | 59,893 | 177,649 | ||||||||||||||
Other |
11,729 | (919 | ) | 10,810 | 4,370 | 15,180 | ||||||||||||||
Less: Bad debt expense |
(3,833 | ) | 241 | (3,592 | ) | (1,602 | ) | (5,194 | ) | |||||||||||
|
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|
|
|
|||||||||||
Total leasing revenue |
$ | 422,030 | $ | (25,634 | ) | $ | 396,396 | $ | 227,009 | $ | 623,405 | |||||||||
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(a) Represents the Company's partners' share of consolidated joint ventures.
9
The Macerich Company
2019 Guidance Range (Unaudited)
The Company is re-affirming its FFO per share-diluted guidance and is revising its previous estimate of EPS-diluted guidance to reflect its current expectation for 2019. A reconciliation of estimated EPS to FFO per share-diluted follows:
Year 2019 Guidance |
||||
Earnings per sharediluted |
$0.42 - $0.50 | |||
Plus: real estate depreciation and amortization |
$3.17 - $3.17 | |||
Plus: loss on sale or write-down of depreciable assets |
$0.09 - $0.09 | |||
Less: Impact of financing expense in connection with ASC 606 (Chandler Freehold) |
$0.18 - $0.18 | |||
|
|
|||
FFO per sharediluted |
$3.50 - $3.58 | |||
|
|
|||
Underlying Assumptions to 2019 Guidance |
||||
Cash Same Center Net Operating Income (NOI) Growth(a) |
||||
Excluding lease termination income |
0.5% - 1.0% |
Year 2019 ($ millions)(b) |
Year 2019 FFO / Share Impact | |||||
Lease termination income |
$12 | $0.08 | ||||
Capitalized interest |
$30 | $0.20 | ||||
Bad debt expense |
($8) | ($0.05) | ||||
Dilutive impact on 2019 of assets sold in 2018 |
($4) | ($0.03) | ||||
Straight-line rental income |
$17 | $0.11 | ||||
Amortization of acquired above and below-market leases (net-revenue) |
$10 | $0.07 | ||||
Leasing expenses(c) |
$36 | $0.24 | ||||
Interest expense(d) |
$295 |
(a) | Excludes non-cash items of straight-line and above/below market adjustments to minimum rents. |
(b) | All joint venture amounts included at pro rata. |
(c) | In conjunction with the adoption of the new lease accounting standard, ASC 842, Leases (ASC 842), the Company estimates it will incur uncapitalized leasing expenses in 2019 of approximately $36 million. The Company incurred approximately $13 million of uncapitalized leasing expenses in 2018 prior to adoption of ASC 842. Therefore, the incremental impact of adopting ASC 842 is estimated at approximately $23 million. |
(d) | This amount represents the Companys pro rata share of interest expense, excluding any financing expense in accordance with ASC 606 (Chandler Freehold). |
10
The Macerich Company
Supplemental Financial and Operating Information (unaudited)
Supplemental FFO Information(a)
As of June 30, | ||||||||||||||||
2019 | 2018 | |||||||||||||||
dollars in millions | ||||||||||||||||
Straight-line rent receivable |
$ | 118.1 | $ | 104.2 | ||||||||||||
For the Three Months Ended June 30, |
For the Six Months Ended June 30, |
|||||||||||||||
2019 | 2018 | 2019 | 2018 | |||||||||||||
dollars in millions | ||||||||||||||||
Lease termination income |
$ | 3.2 | $ | 2.4 | $ | 3.9 | $ | 5.4 | ||||||||
Straight-line rental income |
$ | 2.4 | $ | 4.4 | $ | 6.0 | $ | 8.6 | ||||||||
Business development and parking income (b) |
$ | 15.2 | $ | 14.0 | $ | 28.5 | $ | 27.6 | ||||||||
Gain (loss) on sales or write down of undepreciated assets |
$ | | $ | 0.9 | $ | 0.5 | $ | (0.4 | ) | |||||||
Amortization of acquired above and below-market leases (net revenue) |
$ | 6.3 | $ | 4.2 | $ | 8.7 | $ | 8.2 | ||||||||
Amortization of debt premiums |
$ | 0.2 | $ | 0.2 | $ | 0.4 | $ | 0.4 | ||||||||
Bad debt expense (c) |
$ | 2.8 | $ | 1.9 | $ | 5.2 | $ | 3.6 | ||||||||
Leasing expenses |
$ | 8.5 | $ | 2.7 | $ | 17.0 | $ | 6.0 | ||||||||
Interest capitalized |
$ | 7.1 | $ | 7.2 | $ | 14.0 | $ | 13.9 | ||||||||
Chandler Freehold financing arrangement (d): |
||||||||||||||||
Distributions equal to partners share of net income |
$ | 2.0 | $ | 2.5 | $ | 3.9 | $ | 4.5 | ||||||||
Distributions in excess of partners share of net income (e) |
2.0 | 1.4 | 3.9 | 3.0 | ||||||||||||
Fair value adjustment (e) |
(17.2 | ) | (8.8 | ) | (31.5 | ) | (4.4 | ) | ||||||||
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|||||||||
Total interest (income) expense (d) |
$ | (13.2 | ) | $ | (4.9 | ) | $ | (23.7 | ) | $ | 3.1 | |||||
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(a) | All joint venture amounts included at pro rata. |
(b) | Included in leasing revenue and other income. |
(c) | Included in leasing revenue for the three and six months ended June 30, 2019 and included in shopping center and operating expenses for the three and six months ended June 30, 2018. |
(d) | Included in interest expense. |
(e) | The Company excludes from its definition of FFO the expenses related to changes in fair value of the financing arrangement and the payments to such joint venture partner less than or in excess of their pro rata share of net income. |
11
The Macerich Company
Supplemental Financial and Operating Information (unaudited)
Capital Expenditures(a)
For the Six Months Ended |
Year Ended 12/31/18 |
Year Ended 12/31/17 |
||||||||||||||
6/30/2019 | 6/30/2018 | |||||||||||||||
dollars in millions |
||||||||||||||||
Consolidated Centers |
||||||||||||||||
Acquisitions of property, building improvement and equipment |
$ | 17.4 | $ | 17.5 | $ | 53.4 | $ | 38.2 | ||||||||
Development, redevelopment, expansions and renovations of Centers |
|
45.2 |
|
|
82.3 |
|
173.3 | 152.1 | ||||||||
Tenant allowances |
8.3 | 6.6 | 12.6 | 11.5 | ||||||||||||
Deferred leasing charges |
1.8 | 9.3 | 17.3 | 26.5 | ||||||||||||
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|||||||||
Total |
$ | 72.7 | $ | 115.7 | $ | 256.6 | $ | 228.3 | ||||||||
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|||||||||
Unconsolidated Joint Venture Centers |
||||||||||||||||
Acquisitions of property, building improvement and equipment |
$ | 4.7 | $ | 4.5 | $ | 15.7 | $ | 16.0 | ||||||||
Development, redevelopment, expansions and renovations of Centers |
84.0 | 59.7 | 145.9 | 121.8 | ||||||||||||
Tenant allowances |
4.1 | 4.1 | 8.7 | 6.8 | ||||||||||||
Deferred leasing charges |
1.6 | 4.9 | 10.9 | 6.2 | ||||||||||||
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Total |
$ | 94.4 | $ | 73.2 | $ | 181.2 | $ | 150.8 | ||||||||
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(a) | All joint venture amounts at pro rata. |
12
The Macerich Company
Supplemental Financial and Operating Information (unaudited)
Regional Shopping Center Portfolio
Sales Per Square Foot(a)
Consolidated Centers |
Unconsolidated Joint Venture Centers |
Total Centers |
||||||||||
06/30/2019 |
$ | 632 | $ | 964 | $ | 776 | ||||||
06/30/2018 |
$ | 601 | $ | 818 | $ | 692 | ||||||
12/31/2018 |
$ | 612 | $ | 882 | $ | 726 | ||||||
12/31/2017 |
$ | 584 | $ | 765 | $ | 660 |
(a) | Sales are based on reports by retailers leasing mall and freestanding stores for the trailing 12 months for tenants that 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 shopping centers. Sales per square foot exclude Centers under development and redevelopment. |
13
The Macerich Company
Sales Per Square Foot by Property Ranking (Unaudited)
Sales per square foot | Occupancy | Cost of Occupancy for the trailing 12 months Ended 6/30/2019 (c) |
% of Portfolio 2019 Forecast Pro Rata Real Estate NOI (d) |
|||||||||||||||||||||||||||||
Properties |
6/30/2019 (a) |
12/31/2018 (a) |
6/30/2018 (a) |
6/30/2019 (b) |
12/31/2018 (b) |
6/30/2018 (b) |
||||||||||||||||||||||||||
Group 1: Top 10 |
||||||||||||||||||||||||||||||||
Corte Madera, Village at |
$ | 2,385 | $ | 2,166 | $ | 1,718 | 97.7 | % | 94.4 | % | 94.2 | % | ||||||||||||||||||||
Broadway Plaza |
$ | 2,057 | $ | 1,752 | $ | 1,320 | 97.6 | % | 99.4 | % | 99.0 | % | ||||||||||||||||||||
Queens Center |
$ | 1,542 | $ | 1,506 | $ | 1,480 | 99.2 | % | 99.7 | % | 99.0 | % | ||||||||||||||||||||
Washington Square |
$ | 1,484 | $ | 1,261 | $ | 1,174 | 97.1 | % | 98.8 | % | 96.9 | % | ||||||||||||||||||||
Kierland Commons |
$ | 1,352 | $ | 1,137 | $ | 716 | 98.3 | % | 97.8 | % | 97.0 | % | ||||||||||||||||||||
Scottsdale Fashion Square |
$ | 1,301 | $ | 1,159 | $ | 1,013 | 92.3 | % | 92.1 | % | 90.4 | % | ||||||||||||||||||||
Los Cerritos Center |
$ | 991 | $ | 1,003 | $ | 980 | 96.2 | % | 96.5 | % | 97.3 | % | ||||||||||||||||||||
Tysons Corner Center |
$ | 968 | $ | 986 | $ | 985 | 96.2 | % | 96.8 | % | 93.8 | % | ||||||||||||||||||||
Tucson La Encantada |
$ | 922 | $ | 856 | $ | 853 | 93.8 | % | 97.0 | % | 91.1 | % | ||||||||||||||||||||
Country Club Plaza |
n/a | n/a | n/a | n/a | n/a | n/a | ||||||||||||||||||||||||||
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Total Top 10: |
$ | 1,280 | $ | 1,160 | $ | 1,050 | 95.1 | % | 95.4 | % | 94.0 | % | 11.0 | % | 32.1 | % | ||||||||||||||||
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Group 2: Top 11-20 |
||||||||||||||||||||||||||||||||
North Bridge, The Shops at |
$ | 897 | $ | 881 | $ | 897 | 98.0 | % | 98.2 | % | 97.8 | % | ||||||||||||||||||||
Arrowhead Towne Center |
$ | 872 | $ | 808 | $ | 783 | 95.4 | % | 97.2 | % | 96.7 | % | ||||||||||||||||||||
Fashion Outlets of Chicago |
$ | 845 | $ | 839 | $ | 819 | 98.9 | % | 98.0 | % | 97.2 | % | ||||||||||||||||||||
Fresno Fashion Fair |
$ | 812 | $ | 750 | $ | 737 | 91.4 | % | 95.2 | % | 93.1 | % | ||||||||||||||||||||
Santa Monica Place |
$ | 776 | $ | 808 | $ | 798 | 93.8 | % | 93.4 | % | 86.3 | % | ||||||||||||||||||||
Twenty Ninth Street |
$ | 739 | $ | 712 | $ | 694 | 96.2 | % | 97.1 | % | 93.5 | % | ||||||||||||||||||||
Kings Plaza Shopping Center |
$ | 737 | $ | 701 | $ | 688 | 99.4 | % | 97.9 | % | 97.5 | % | ||||||||||||||||||||
Chandler Fashion Center |
$ | 733 | $ | 715 | $ | 693 | 96.5 | % | 97.6 | % | 97.6 | % | ||||||||||||||||||||
Vintage Faire Mall |
$ | 714 | $ | 709 | $ | 700 | 96.3 | % | 97.3 | % | 98.1 | % | ||||||||||||||||||||
Biltmore Fashion Park |
$ | 707 | $ | 670 | $ | 1,019 | 90.8 | % | 91.0 | % | 91.7 | % | ||||||||||||||||||||
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|||||||||||||||||
Total Top 11-20: |
$ | 784 | $ | 759 | $ | 760 | 96.1 | % | 96.7 | % | 95.5 | % | 13.0 | % | 25.7 | % | ||||||||||||||||
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14
The Macerich Company
Sales Per Square Foot by Property Ranking (Unaudited)
Sales per square foot | Occupancy | Cost of Occupancy for the trailing 12 months Ended 6/30/2019 (c) |
% of Portfolio 2019 Forecast Pro Rata Real Estate NOI (d) |
|||||||||||||||||||||||||||||
Properties |
6/30/2019 (a) |
12/31/2018 (a) |
6/30/2018 (a) |
6/30/2019 (b) |
12/31/2018 (b) |
6/30/2018 (b) |
||||||||||||||||||||||||||
Group 3: Top 21-30 |
||||||||||||||||||||||||||||||||
Stonewood Center |
$ | 685 | $ | 665 | $ | 665 | 92.7 | % | 91.9 | % | 93.3 | % | ||||||||||||||||||||
Oaks, The |
$ | 669 | $ | 654 | $ | 635 | 90.9 | % | 88.9 | % | 86.7 | % | ||||||||||||||||||||
Green Acres Mall |
$ | 653 | $ | 638 | $ | 645 | 96.2 | % | 98.0 | % | 97.4 | % | ||||||||||||||||||||
Danbury Fair Mall |
$ | 652 | $ | 627 | $ | 616 | 93.6 | % | 96.1 | % | 93.1 | % | ||||||||||||||||||||
Freehold Raceway Mall |
$ | 633 | $ | 639 | $ | 636 | 97.5 | % | 97.8 | % | 98.4 | % | ||||||||||||||||||||
SanTan Village Regional Center |
$ | 631 | $ | 588 | $ | 572 | 94.9 | % | 98.1 | % | 96.5 | % | ||||||||||||||||||||
FlatIron Crossing |
$ | 584 | $ | 579 | $ | 581 | 95.4 | % | 97.2 | % | 96.4 | % | ||||||||||||||||||||
Victor Valley, Mall of |
$ | 579 | $ | 565 | $ | 548 | 95.7 | % | 98.1 | % | 98.1 | % | ||||||||||||||||||||
Inland Center |
$ | 544 | $ | 541 | $ | 542 | 92.5 | % | 97.0 | % | 96.0 | % | ||||||||||||||||||||
Lakewood Center |
$ | 527 | $ | 491 | $ | 487 | 97.1 | % | 97.0 | % | 96.3 | % | ||||||||||||||||||||
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|
|||||||||||||||||
Total Top 21-30: |
$ | 616 | $ | 598 | $ | 592 | 95.2 | % | 96.3 | % | 95.4 | % | 13.2 | % | 26.3 | % | ||||||||||||||||
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Group 4: Top 31-40 |
||||||||||||||||||||||||||||||||
Deptford Mall |
$ | 523 | $ | 525 | $ | 529 | 96.2 | % | 97.4 | % | 96.9 | % | ||||||||||||||||||||
South Plains Mall |
$ | 503 | $ | 474 | $ | 458 | 90.3 | % | 92.0 | % | 92.3 | % | ||||||||||||||||||||
La Cumbre Plaza |
$ | 496 | $ | 488 | $ | 478 | 81.7 | % | 80.7 | % | 85.9 | % | ||||||||||||||||||||
Pacific View |
$ | 472 | $ | 450 | $ | 437 | 84.0 | % | 91.3 | % | 94.5 | % | ||||||||||||||||||||
Valley River Center |
$ | 457 | $ | 453 | $ | 447 | 92.9 | % | 95.7 | % | 94.8 | % | ||||||||||||||||||||
West Acres |
$ | 451 | $ | 467 | $ | 461 | 97.8 | % | 97.2 | % | 98.4 | % | ||||||||||||||||||||
Superstition Springs Center |
$ | 403 | $ | 366 | $ | 365 | 93.0 | % | 96.8 | % | 91.1 | % | ||||||||||||||||||||
Eastland Mall |
$ | 369 | $ | 360 | $ | 357 | 91.7 | % | 94.9 | % | 96.0 | % | ||||||||||||||||||||
Desert Sky Mall |
$ | 357 | $ | 346 | $ | 333 | 96.9 | % | 99.1 | % | 96.9 | % | ||||||||||||||||||||
Fashion Outlets of Niagara Falls USA |
$ | 335 | $ | 340 | $ | 348 | 91.1 | % | 93.9 | % | 92.2 | % | ||||||||||||||||||||
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|||||||||||||||||
Total Top 31-40: |
$ | 428 | $ | 420 | $ | 416 | 91.8 | % | 94.4 | % | 94.2 | % | 14.3 | % | 11.9 | % | ||||||||||||||||
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|||||||||||||||||
Total Top 40: |
$ | 804 | $ | 753 | $ | 717 | 94.7 | % | 95.7 | % | 94.8 | % | 12.2 | % | 96.0 | % | ||||||||||||||||
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15
The Macerich Company
Sales Per Square Foot by Property Ranking (Unaudited)
Sales per square foot | Occupancy | Cost of Occupancy for the trailing 12 months Ended 6/30/2019 (c) |
% of Portfolio 2019 Forecast Pro Rata Real Estate NOI (d) |
|||||||||||||||||||||||||||||
Properties |
6/30/2019 (a) |
12/31/2018 (a) |
6/30/2018 (a) |
6/30/2019 (b) |
12/31/2018 (b) |
6/30/2018 (b) |
||||||||||||||||||||||||||
Group 5: 41-45 |
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NorthPark Mall |
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SouthPark Mall |
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Towne Mall |
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Valley Mall |
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Wilton Mall |
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Total 41-45: |
$ | 291 | $ | 286 | $ | 285 | 86.9 | % | 90.8 | % | 88.5 | % | 11.0 | % | ||||||||||||||||||
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Centers under Redevelopment |
||||||||||||||||||||||||||||||||
Fashion District Philadelphia (e) (f) |
||||||||||||||||||||||||||||||||
Paradise Valley Mall (e) |
||||||||||||||||||||||||||||||||
47 REGIONAL SHOPPING CENTERS (g) |
$ | 776 | $ | 726 | $ | 692 | 94.1 | % | 95.4 | % | 94.3 | % | 12.2 | % | 98.3 | % | ||||||||||||||||
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Community / Power Centers and various other assets |
1.7 | % | ||||||||||||||||||||||||||||||
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|||||||||||||||||||||||||||||
TOTAL ALL PROPERTIES |
12.2 | % | 100.0 | % | ||||||||||||||||||||||||||||
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|
16
The Macerich Company
Notes to Sales Per Square Foot by Property Ranking (unaudited)
Footnotes
(a) | Sales are based on reports by retailers leasing mall and freestanding stores for the trailing 12 months for tenants that have occupied such stores for a minimum of 12 months. Sales per square foot are based on tenants 10,000 square feet and under. Properties are ranked by Sales per square foot as of June 30, 2019. |
(b) | Occupancy is the percentage of mall and freestanding GLA leased as of the last day of the reporting period. Occupancy excludes Centers under development and redevelopment. |
(c) | Cost of Occupancy represents Tenant Occupancy Costs divided by Tenant Sales. Tenant Occupancy Costs in this calculation are the amounts paid to the Company, including minimum rents, percentage rents and recoverable expenditures, which consist primarily of property operating expenses, real estate taxes and repair and maintenance expenditures. |
(d) | The percentage of Portfolio 2019 Forecast Pro Rata Real Estate NOI is based on the guidance range provided on August 1, 2019, see page 10. Real Estate NOI excludes straight-line and above/below market adjustments to minimum rents. Real Estate NOI also does not reflect REIT expenses and Management Company revenues and expenses. See the Companys forward-looking statements disclosure on pages 1 and 2 for factors that may affect the information provided in this column. |
(e) | These assets are under redevelopment including demolition and reconfiguration of the Centers and tenant spaces. Accordingly, the Sales per square foot and Occupancy during the periods of redevelopment are not included. |
(f) | On July 30, 2014, the Company formed a joint venture to redevelop and rebrand The Gallery in Philadelphia, Pennsylvania. |
(g) | Properties sold prior to June 30, 2019 are excluded in both current and prior periods above. |
17
The Macerich Company
Supplemental Financial and Operating Information (unaudited)
Occupancy(a)
Regional Shopping Centers: |
Consolidated Centers |
Unconsolidated Joint Venture Centers |
Total Centers |
|||||||||
06/30/2019 |
93.2 | % | 95.2 | % | 94.1 | % | ||||||
06/30/2018 |
94.0 | % | 94.7 | % | 94.3 | % | ||||||
12/31/2018 |
95.2 | % | 95.6 | % | 95.4 | % | ||||||
12/31/2017 |
94.4 | % | 95.6 | % | 95.0 | % |
(a) | Occupancy is the percentage of mall and freestanding GLA leased as of the last day of the reporting period. Occupancy excludes Centers under development and redevelopment. |
18
The Macerich Company
Supplemental Financial and Operating Information (unaudited)
Average Base Rent Per Square Foot(a)
Average Base Rent PSF(b) |
Average Base Rent PSF on Leases Executed during the trailing twelve months ended(c) |
Average Base Rent PSF on Leases Expiring(d) during the trailing twelve months ended |
||||||||||
Consolidated Centers |
||||||||||||
06/30/2019 |
$ | 58.93 | $ | 55.81 | $ | 51.54 | ||||||
06/30/2018 |
$ | 56.91 | $ | 55.61 | $ | 49.07 | ||||||
12/31/2018 |
$ | 56.82 | $ | 54.00 | $ | 49.07 | ||||||
12/31/2017 |
$ | 55.08 | $ | 57.36 | $ | 49.61 | ||||||
Unconsolidated Joint Venture Centers |
||||||||||||
06/30/2019 |
$ | 65.68 | $ | 69.28 | $ | 62.37 | ||||||
06/30/2018 |
$ | 62.87 | $ | 63.46 | $ | 58.12 | ||||||
12/31/2018 |
$ | 63.84 | $ | 66.95 | $ | 59.49 | ||||||
12/31/2017 |
$ | 60.99 | $ | 63.50 | $ | 55.50 | ||||||
All Regional Shopping Centers |
||||||||||||
06/30/2019 |
$ | 61.17 | $ | 59.60 | $ | 54.47 | ||||||
06/30/2018 |
$ | 58.84 | $ | 57.91 | $ | 51.57 | ||||||
12/31/2018 |
$ | 59.09 | $ | 57.55 | $ | 51.80 | ||||||
12/31/2017 |
$ | 56.97 | $ | 59.20 | $ | 51.39 |
(a) | Average base rent per square foot is based on spaces 10,000 square feet and under. All joint venture amounts are included at pro rata. Centers under development and redevelopment are excluded. |
(b) | Average base rent per square foot gives effect to the terms of each lease in effect, as of the applicable date, including any concessions, abatements and other adjustments or allowances that have been granted to the tenants. |
(c) | The average base rent per square foot on leases executed during the period represents the actual rent to be paid during the first twelve months. |
(d) | The average base rent per square foot on leases expiring during the period represents the final year minimum rent on a cash basis. |
19
The Macerich Company
Supplemental Financial and Operating Information (unaudited)
Cost of Occupancy
For the
trailing twelve months ended June 30, 2019 |
For Years Ended December 31, | |||||||||
2018 | 2017 | |||||||||
Consolidated Centers |
||||||||||
Minimum rents |
9.3% | 9.3% | 9.5% | |||||||
Percentage rents |
0.4% | 0.3% | 0.3% | |||||||
Expense recoveries(a) |
3.9% | 3.9% | 4.2% | |||||||
|
|
|
|
|
||||||
Total |
13.6% | 13.5% | 14.0% | |||||||
|
|
|
|
|
||||||
For the
trailing twelve months ended June 30, 2019 |
For Years Ended December 31, | |||||||||
2018 | 2017 | |||||||||
Unconsolidated Joint Venture Centers |
||||||||||
Minimum rents |
7.4% | 7.8% | 8.6% | |||||||
Percentage rents |
0.3% | 0.3% | 0.3% | |||||||
Expense recoveries(a) |
3.3% | 3.4% | 3.8% | |||||||
|
|
|
|
|
||||||
Total |
11.0% | 11.5% | 12.7% | |||||||
|
|
|
|
|
||||||
For the
trailing twelve months ended June 30, 2019 |
For Years Ended December 31, | |||||||||
2018 | 2017 | |||||||||
All Centers |
||||||||||
Minimum rents |
8.3% | 8.5% | 9.0% | |||||||
Percentage rents |
0.3% | 0.3% | 0.3% | |||||||
Expense recoveries(a) |
3.6% | 3.6% | 4.0% | |||||||
|
|
|
|
|
||||||
Total |
12.2% | 12.4% | 13.3% | |||||||
|
|
|
|
|
(a) | Represents real estate tax and common area maintenance charges. |
20
The Macerich Company
Supplemental Financial and Operating Information (unaudited)
Percentage of Net Operating Income by State
State |
% of Portfolio 2019 Forecast Real Estate Pro Rata NOI(a) |
|||
California |
27.5 | % | ||
New York |
22.9 | % | ||
Arizona |
15.9 | % | ||
Colorado, Illinois & Missouri |
9.3 | % | ||
Pennsylvania & Virginia |
9.1 | % | ||
New Jersey & Connecticut |
7.3 | % | ||
Oregon |
4.1 | % | ||
Other(b) |
3.9 | % | ||
|
|
|||
Total |
100.0 | % | ||
|
|
(a) | The percentage of Portfolio 2019 Forecast Pro Rata Real Estate NOI is based on guidance provided on August 1, 2019, see page 10. Real Estate NOI excludes straight-line and above/below market adjustments to minimum rents. Real Estate NOI also does not reflect REIT expenses and Management Company revenues and expenses. See the Companys forward-looking statements disclosure on pages 1 and 2 for factors that may affect the information provided in this column. |
(b) | Other includes Indiana, Iowa, Kentucky, North Dakota and Texas. |
21
The Macerich Company
Property Listing
June 30, 2019
The following table sets forth certain information regarding the Centers and other locations that are wholly owned or partly owned by the Company.
Count |
Companys Ownership(a) |
Name of |
Year of Original Construction/ Acquisition |
Year of Most Recent Expansion/ Renovation |
Total GLA(b) |
|||||||||||
CONSOLIDATED CENTERS: |
|
|||||||||||||||
1 | 50.1% | Chandler Fashion Center |
2001/2002 | | 1,318,000 | |||||||||||
2 | 100% | Danbury Fair Mall |
1986/2005 | 2016 | 1,268,000 | |||||||||||
3 | 100% | Desert Sky Mall |
1981/2002 | 2007 | 746,000 | |||||||||||
4 | 100% | Eastland Mall(c) |
1978/1998 | 1996 | 1,034,000 | |||||||||||
5 | 100% | Fashion Outlets of Chicago |
2013/ | | 537,000 | |||||||||||
6 | 100% | Fashion Outlets of Niagara Falls USA |
1982/2011 | 2014 | 689,000 | |||||||||||
7 | 50.1% | Freehold Raceway Mall |
1990/2005 | 2007 | 1,673,000 | |||||||||||
8 | 100% | Fresno Fashion Fair |
1970/1996 | 2006 | 991,000 | |||||||||||
9 | 100% | Green Acres Mall(c) |
1956/2013 | 2016 | 2,041,000 | |||||||||||
10 | 100% | Inland Center |
1966/2004 | 2016 | 870,000 | |||||||||||
11 | 100% | Kings Plaza Shopping Center(c) |
1971/2012 | 2018 | 1,137,000 | |||||||||||
12 | 100% | La Cumbre Plaza(c) |
1967/2004 | 1989 | 492,000 | |||||||||||
13 | 100% | NorthPark Mall |
1973/1998 | 2001 | 934,000 | |||||||||||
14 | 100% | Oaks, The |
1978/2002 | 2009 | 1,209,000 | |||||||||||
15 | 100% | Pacific View |
1965/1996 | 2001 | 1,061,000 | |||||||||||
16 | 100% | Queens Center(c) |
1973/1995 | 2004 | 964,000 | |||||||||||
17 | 100% | Santa Monica Place |
1980/1999 | 2015 | 526,000 | |||||||||||
18 | 84.9% | SanTan Village Regional Center |
2007/ | 2018 | 1,122,000 | |||||||||||
19 | 100% | SouthPark Mall |
1974/1998 | 2015 | 863,000 | |||||||||||
20 | 100% | Stonewood Center(c) |
1953/1997 | 1991 | 934,000 | |||||||||||
21 | 100% | Superstition Springs Center |
1990/2002 | 2002 | 917,000 | |||||||||||
22 | 100% | Towne Mall |
1985/2005 | 1989 | 350,000 |
22
The Macerich Company
Property Listing
June 30, 2019
Count |
Companys Ownership(a) |
Name of |
Year of Original Construction/ Acquisition |
Year of Most Recent Expansion/ Renovation |
Total GLA(b) |
|||||||||
23 |
100% | Tucson La Encantada |
2002/2002 | 2005 | 246,000 | |||||||||
24 |
100% | Valley Mall |
1978/1998 | 1992 | 506,000 | |||||||||
25 |
100% | Valley River Center |
1969/2006 | 2007 | 872,000 | |||||||||
26 |
100% | Victor Valley, Mall of |
1986/2004 | 2012 | 577,000 | |||||||||
27 |
100% | Vintage Faire Mall |
1977/1996 | 2008 | 1,139,000 | |||||||||
28 |
100% | Wilton Mall |
1990/2005 | 1998 | 734,000 | |||||||||
|
|
|||||||||||||
Total Consolidated Centers | 25,750,000 | |||||||||||||
|
|
|||||||||||||
UNCONSOLIDATED JOINT VENTURE CENTERS: |
|
|||||||||||||
29 |
60% | Arrowhead Towne Center |
1993/2002 | 2015 | 1,197,000 | |||||||||
30 |
50% | Biltmore Fashion Park |
1963/2003 | 2006 | 517,000 | |||||||||
31 |
50% | Broadway Plaza |
1951/1985 | 2016 | 926,000 | |||||||||
32 |
50.1% | Corte Madera, The Village at |
1985/1998 | 2005 | 460,000 | |||||||||
33 |
50% | Country Club Plaza |
1922/2016 | 2015 | 1,003,000 | |||||||||
34 |
51% | Deptford Mall |
1975/2006 | 1990 | 1,041,000 | |||||||||
35 |
51% | FlatIron Crossing |
2000/2002 | 2009 | 1,428,000 | |||||||||
36 |
50% | Kierland Commons |
1999/2005 | 2003 | 437,000 | |||||||||
37 |
60% | Lakewood Center |
1953/1975 | 2008 | 2,069,000 | |||||||||
38 |
60% | Los Cerritos Center |
1971/1999 | 2016 | 1,303,000 | |||||||||
39 |
50% | North Bridge, The Shops at(c) |
1998/2008 | | 669,000 | |||||||||
40 |
50% | Scottsdale Fashion Square |
1961/2002 | 2019 | 1,838,000 | |||||||||
41 |
60% | South Plains Mall |
1972/1998 | 2017 | 1,135,000 | |||||||||
42 |
51% | Twenty Ninth Street(c) |
1963/1979 | 2007 | 845,000 | |||||||||
43 |
50% | Tysons Corner Center |
1968/2005 | 2014 | 1,972,000 | |||||||||
44 |
60% | Washington Square |
1974/1999 | 2005 | 1,446,000 | |||||||||
45 |
19% | West Acres |
1972/1986 | 2001 | 667,000 | |||||||||
|
|
|||||||||||||
Total Unconsolidated Joint Venture Centers | 18,953,000 | |||||||||||||
|
|
23
The Macerich Company
Property Listing
June 30, 2019
Count |
Companys Ownership(a) |
Name of |
Year of Original Construction/ Acquisition |
Year of Most Recent Expansion/ Renovation |
Total GLA(b) |
|||||||||||
REGIONAL SHOPPING CENTERS UNDER REDEVELOPMENT: |
|
|||||||||||||||
46 |
50% | Fashion District Philadelphia(d) |
1977/2014 | ongoing | 850,000 | |||||||||||
47 |
100% | Paradise Valley Mall(e) |
1979/2002 | 2009 | 1,202,000 | |||||||||||
|
|
|||||||||||||||
Total Regional Shopping Centers | 46,755,000 | |||||||||||||||
|
|
|||||||||||||||
COMMUNITY / POWER CENTERS: |
|
|||||||||||||||
1 |
50% | Atlas Park, The Shops at(d) |
2006/2011 | 2013 | 369,000 | |||||||||||
2 |
50% | Boulevard Shops(d) |
2001/2002 | 2004 | 185,000 | |||||||||||
3 |
100% | Southridge Center(e) |
1975/1998 | 2013 | 848,000 | |||||||||||
4 |
100% | Superstition Springs Power Center(e) |
1990/2002 | | 206,000 | |||||||||||
5 |
100% | The Marketplace at Flagstaff(c)(e) |
2007/ | | 268,000 | |||||||||||
|
|
|||||||||||||||
Total Community / Power Centers | 1,876,000 | |||||||||||||||
|
|
|||||||||||||||
OTHER ASSETS: |
||||||||||||||||
100% | Various(e)(f) |
427,000 | ||||||||||||||
86.5% | Estrella Falls(e) |
79,000 | ||||||||||||||
50% | Scottsdale Fashion Square-Office(d) |
123,000 | ||||||||||||||
50% | Tysons Corner Center-Office(d) |
174,000 | ||||||||||||||
50% | Hyatt Regency Tysons Corner Center(d) |
290,000 | ||||||||||||||
50% | VITA Tysons Corner Center(d) |
510,000 | ||||||||||||||
50% | Tysons Tower(d) |
529,000 | ||||||||||||||
OTHER ASSETS UNDER REDEVELOPMENT: |
||||||||||||||||
25% | One Westside(d)(g) |
680,000 | ||||||||||||||
|
|
|||||||||||||||
Total Other Assets | 2,812,000 | |||||||||||||||
|
|
|||||||||||||||
Grand Total | 51,443,000 | |||||||||||||||
|
|
(a) | The Companys ownership interest in this table reflects its legal ownership interest. See footnotes (a) and (b) on pages 26 and 27 regarding the legal versus economic ownership of joint venture entities. |
(b) | Includes GLA attributable to anchors (whether owned or non-owned) and mall and freestanding stores. |
(c) | Portions of the land on which the Center is situated are subject to one or more long-term ground leases. With respect to 43 Centers, the underlying land controlled by the Company is owned in fee entirely by the Company, or, in the case of jointly-owned Centers, by the joint venture property partnership or limited liability company. |
24
The Macerich Company
Property Listing
June 30, 2019
(d) | Included in Unconsolidated Joint Venture Centers. |
(e) | Included in Consolidated Centers. |
(f) | The Company owns an office building and six stores located at shopping centers not owned by the Company. Of the six stores, one is leased to Kohls, two are vacant, and three have been leased for non-Anchor uses. With respect to the office building and three of the six stores, the underlying land is owned in fee entirely by the Company. With respect to the remaining three stores, the underlying land is owned by third parties and leased to the Company pursuant to long-term building or ground leases. |
(g) | Planning and approvals are underway to convert former Regional Shopping Center Westside Pavilion, which closed in January 2019, into an approximately 584,000 square foot Class A creative office campus called One Westside leased solely to Google, while maintaining approximately 96,000 square feet of adjacent entertainment and retail space at 10850 Pico Boulevard. |
25
The Macerich Company
Joint Venture List as of June 30, 2019
The following table sets forth certain information regarding the Centers and other operating properties that are not wholly owned by the Company. This list of properties includes unconsolidated joint ventures, consolidated joint ventures, and financing arrangements. The percentages shown are the effective legal ownership and economic ownership interests of the Company as of June 30, 2019.
Properties |
Legal Ownership(a) |
Economic Ownership(b) |
Joint Venture |
Total GLA(c) | ||||||||||
Arrowhead Towne Center(d) |
60 | % | 60 | % | New River Associates LLC | 1,197,000 | ||||||||
Atlas Park, The Shops at |
50 | % | 50 | % | WMAP, L.L.C. | 369,000 | ||||||||
Biltmore Fashion Park |
50 | % | 50 | % | Biltmore Shopping Center Partners LLC | 517,000 | ||||||||
Boulevard Shops |
50 | % | 50 | % | Propcor II Associates, LLC | 185,000 | ||||||||
Broadway Plaza(e) |
50 | % | 50 | % | Macerich HHF Broadway Plaza LLC | 926,000 | ||||||||
Chandler Fashion Center(d)(f) |
50.1 | % | 50.1 | % | Freehold Chandler Holdings LP | 1,318,000 | ||||||||
Corte Madera, The Village at |
50.1 | % | 50.1 | % | Corte Madera Village, LLC | 460,000 | ||||||||
Country Club Plaza |
50 | % | 50 | % | Country Club Plaza KC Partners LLC | 1,003,000 | ||||||||
Deptford Mall(d) |
51 | % | 51 | % | Macerich HHF Centers LLC | 1,041,000 | ||||||||
Estrella Falls |
86.5 | % | 86.5 | % | Westcor Goodyear RSC LLC | 79,000 | ||||||||
Fashion District Philadelphia |
50 | % | 50 | % | Various Entities | 850,000 | ||||||||
FlatIron Crossing |
51 | % | 51 | % | Macerich HHF Centers LLC | 1,428,000 | ||||||||
Freehold Raceway Mall(d)(f) |
50.1 | % | 50.1 | % | Freehold Chandler Holdings LP | 1,673,000 | ||||||||
Hyatt Regency Tysons Corner Center |
50 | % | 50 | % | Tysons Corner Hotel I LLC | 290,000 | ||||||||
Kierland Commons |
50 | % | 50 | % | Kierland Commons Investment LLC | 437,000 | ||||||||
Lakewood Center |
60 | % | 60 | % | Pacific Premier Retail LLC | 2,069,000 | ||||||||
Los Angeles Premium Outlets |
50 | % | 50 | % | CAM-CARSON LLC | | ||||||||
Los Cerritos Center(d) |
60 | % | 60 | % | Pacific Premier Retail LLC | 1,303,000 | ||||||||
North Bridge, The Shops at |
50 | % | 50 | % | North Bridge Chicago LLC | 669,000 | ||||||||
SanTan Village Regional Center |
84.9 | % | 84.9 | % | Westcor SanTan Village LLC | 1,122,000 | ||||||||
Scottsdale Fashion Square |
50 | % | 50 | % | Scottsdale Fashion Square Partnership | 1,838,000 | ||||||||
Scottsdale Fashion Square-Office |
50 | % | 50 | % | Scottsdale Fashion Square Partnership | 123,000 | ||||||||
Macerich Seritage Portfolio(g) |
50 | % | 50 | % | MS Portfolio LLC | 1,550,000 | ||||||||
South Plains Mall(d) |
60 | % | 60 | % | Pacific Premier Retail LLC | 1,135,000 | ||||||||
Twenty Ninth Street |
51 | % | 51 | % | Macerich HHF Centers LLC | 845,000 | ||||||||
Tysons Corner Center |
50 | % | 50 | % | Tysons Corner LLC | 1,972,000 | ||||||||
Tysons Corner Center-Office |
50 | % | 50 | % | Tysons Corner Property LLC | 174,000 | ||||||||
Tysons Tower |
50 | % | 50 | % | Tysons Corner Property LLC | 529,000 | ||||||||
VITA Tysons Corner Center |
50 | % | 50 | % | Tysons Corner Property LLC | 510,000 | ||||||||
Washington Square(d) |
60 | % | 60 | % | Pacific Premier Retail LLC | 1,446,000 | ||||||||
West Acres |
19 | % | 19 | % | West Acres Development, LLP | 677,000 | ||||||||
One Westside(h) |
25 | % | 25 | % | HPP-MAC WSP, LLC | 680,000 |
(a) | This column reflects the Companys legal ownership in the listed properties as of June 30, 2019. Legal ownership may, at times, not equal the Companys economic interest in the listed properties because of various provisions in certain joint venture agreements regarding distributions of cash flow based on capital account balances, allocations of profits and losses and payments of preferred returns. As a result, the Companys actual economic interest (as distinct from its legal ownership interest) in certain of the properties could fluctuate from time to time and may not wholly align with its legal ownership interests. Substantially all of the Companys joint venture agreements contain rights of first refusal, buy-sell provisions, exit rights, default dilution remedies and/or other break up provisions or remedies which are customary in real estate joint venture agreements and which may, positively or negatively, affect the ultimate realization of cash flow and/or capital or liquidation proceeds. |
26
The Macerich Company
Joint Venture List as of June 30, 2019
(b) | Economic ownership represents the allocation of cash flow to the Company as of June 30, 2019, except as noted below. In cases where the Company receives a current cash distribution greater than its legal ownership percentage due to a capital account greater than its legal ownership percentage, only the legal ownership percentage is shown in this column. The Companys economic ownership of these properties may fluctuate based on a number of factors, including mortgage refinancings, partnership capital contributions and distributions, and proceeds and gains or losses from asset sales, and the matters set forth in the preceding paragraph. |
(c) | Includes GLA attributable to anchors (whether owned or non-owned) and mall and freestanding stores as of June 30, 2019. |
(d) | These centers have a Sears store which is owned by MS Portfolio LLC, see footnote (g) below. The GLA of the Sears store at the seven centers indicated with footnote (d) in the table above is included in Total GLA at the center level. The GLA for the Sears store at these seven centers plus the GLA of the Sears store at two wholly owned centers, Danbury Fair Mall and Vintage Faire Mall, are also aggregated into the 1,550,000 square feet in the MS Portfolio LLC above. |
(e) | In October 2018, the Companys joint venture partner in Broadway Plaza sold its 50% interest to a third party investor. Thereafter, the joint venture restated its governing documents and changed its name to Macerich HHF Broadway Plaza LLC. |
(f) | The joint venture entity was formed in September 2009. Upon liquidation of the partnership, distributions are made in the following order: to the third-party partner until it receives a 13% internal rate of return on and of its aggregate unreturned capital contributions; to the Company until it receives a 13% internal rate of return on and of its aggregate unreturned capital contributions; and, thereafter, pro rata 35% to the third-party partner and 65% to the Company. |
(g) | On April 30, 2015 Sears Holdings Corporation (Sears) and the Company announced that they had formed a joint venture, MS Portfolio LLC. Sears contributed nine stores (located at Arrowhead Towne Center, Chandler Fashion Center, Danbury Fair Mall, Deptford Mall, Freehold Raceway Mall, Los Cerritos Center, South Plains Mall, Vintage Faire Mall and Washington Square) to the joint venture and the Company contributed $150 million in cash to the joint venture. The lease arrangements between Sears and the joint venture provide the ability to create additional value through recapturing certain space leased to Sears in these properties and re-leasing that space to third-party tenants. For example, Primark has leased space in portions of the Sears stores at Danbury Fair Mall and Freehold Raceway Mall. On July 7, 2015, Sears assigned its ownership interest in MS Portfolio LLC to Seritage MS Holdings LLC. |
(h) | Planning and approvals are underway to convert former Regional Shopping Center Westside Pavilion, which closed in January 2019, into an approximately 584,000 square foot Class A creative office campus called One Westside leased solely to Google, while maintaining approximately 96,000 square feet of adjacent entertainment and retail space at 10850 Pico Boulevard. The Company contributed the existing buildings and land valued at $190.0 million to the joint venture on August 31, 2018. |
27
The Macerich Company
Supplemental Financial and Operating Information (Unaudited)
Debt Summary (at Companys pro rata share) (a)
As of June 30, 2019 | ||||||||||||
Fixed Rate | Floating Rate |
Total | ||||||||||
(Dollars in thousands) | ||||||||||||
Mortgage notes payable |
$ | 3,879,119 | $ | 425,909 | $ | 4,305,028 | ||||||
Bank and other notes payable |
403,251 | 406,105 | 809,356 | |||||||||
|
|
|
|
|
|
|||||||
Total debt per Consolidated Balance Sheet |
4,282,370 | 832,014 | 5,114,384 | |||||||||
Adjustments: |
||||||||||||
Less: Noncontrolling interests or financing arrangement share of debt from consolidated joint ventures |
(360,626 | ) | | (360,626 | ) | |||||||
|
|
|
|
|
|
|||||||
Adjusted Consolidated Debt |
3,921,744 | 832,014 | 4,753,758 | |||||||||
Add: Companys share of debt from unconsolidated joint ventures |
2,951,945 | 228,762 | 3,180,707 | |||||||||
|
|
|
|
|
|
|||||||
Total Companys Pro Rata Share of Debt |
$ | 6,873,689 | $ | 1,060,776 | $ | 7,934,465 | ||||||
|
|
|
|
|
|
|||||||
Weighted average interest rate |
3.94 | % | 4.24 | % | 3.98 | % | ||||||
Weighted average maturity (years) |
5.22 |
(a) | The Companys pro rata share of debt represents (i) consolidated debt, minus the Companys partners share of the amount from consolidated joint ventures (calculated based upon the partners percentage ownership interest); plus (ii) the Companys share of debt from unconsolidated joint ventures (calculated based upon the Companys percentage ownership interest). Management believes that this measure provides useful information to investors regarding the Companys financial condition because it includes the Companys share of debt from unconsolidated joint ventures and, for consolidated debt, excludes the Companys partners share from consolidated joint ventures, in each case presented on the same basis. The Company has several significant joint ventures and presenting its pro rata share of debt in this manner can help investors better understand the Companys financial condition after taking into account the Companys economic interest in these joint ventures. The Companys pro rata share of debt should not be considered as a substitute to the Companys total debt determined in accordance with GAAP or any other GAAP financial measures and should only be considered together with and as a supplement to the Companys financial information prepared in accordance with GAAP. |
28
The Macerich Company
Supplemental Financial and Operating Information (Unaudited)
Outstanding Debt by Maturity Date
As of June 30, 2019 | ||||||||||||||||||||
Center/Entity (dollars in thousands) |
Maturity Date |
Effective Interest Rate (a) |
Fixed | Floating | Total Debt Balance (a) |
|||||||||||||||
I. Consolidated Assets: |
||||||||||||||||||||
Kings Plaza Shopping Center |
12/03/19 | 3.67 | % | $ | 431,895 | $ | | $ | 431,895 | |||||||||||
Danbury Fair Mall |
10/01/20 | 5.53 | % | 198,489 | | 198,489 | ||||||||||||||
Fashion Outlets of Niagara Falls USA |
10/06/20 | 4.89 | % | 108,033 | | 108,033 | ||||||||||||||
Green Acres Mall |
02/03/21 | 3.61 | % | 281,236 | | 281,236 | ||||||||||||||
Prasada (b) |
05/30/21 | 5.25 | % | 1,625 | | 1,625 | ||||||||||||||
The Macerich Partnership, L.P.Line of Credit (c)(d) |
07/06/21 | 4.30 | % | 400,000 | | 400,000 | ||||||||||||||
Tucson La Encantada |
03/01/22 | 4.23 | % | 64,531 | | 64,531 | ||||||||||||||
Pacific View |
04/01/22 | 4.08 | % | 119,798 | | 119,798 | ||||||||||||||
Oaks, The |
06/05/22 | 4.14 | % | 189,615 | | 189,615 | ||||||||||||||
Towne Mall |
11/01/22 | 4.48 | % | 20,509 | | 20,509 | ||||||||||||||
Chandler Fashion Center (e) |
07/05/24 | 4.18 | % | 127,774 | | 127,774 | ||||||||||||||
Victor Valley, Mall of |
09/01/24 | 4.00 | % | 114,704 | | 114,704 | ||||||||||||||
Queens Center |
01/01/25 | 3.49 | % | 600,000 | | 600,000 | ||||||||||||||
Vintage Faire |
03/06/26 | 3.55 | % | 255,311 | | 255,311 | ||||||||||||||
Fresno Fashion Fair |
11/01/26 | 3.67 | % | 323,559 | | 323,559 | ||||||||||||||
SanTan Village Regional Center (f) |
07/01/29 | 4.34 | % | 186,047 | | 186,047 | ||||||||||||||
Freehold Raceway Mall (e) |
11/01/29 | 3.94 | % | 199,546 | | 199,546 | ||||||||||||||
Fashion Outlets of Chicago |
02/01/31 | 4.61 | % | 299,072 | | 299,072 | ||||||||||||||
|
|
|
|
|
|
|
|
|||||||||||||
Total Fixed Rate Debt for Consolidated Assets |
4.02 | % | $ | 3,921,744 | $ | | $ | 3,921,744 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||||||
Green Acres Commons (d) |
03/29/21 | 5.15 | % | $ | | $ | 128,466 | $ | 128,466 | |||||||||||
The Macerich Partnership, L.P.Line of Credit (c)(d) |
07/06/21 | 4.06 | % | | 406,105 | 406,105 | ||||||||||||||
Santa Monica Place (d) |
12/09/22 | 3.99 | % | | 297,443 | 297,443 | ||||||||||||||
|
|
|
|
|
|
|
|
|||||||||||||
Total Floating Rate Debt for Consolidated Assets |
4.20 | % | $ | | $ | 832,014 | $ | 832,014 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||||||
Total Debt for Consolidated Assets |
4.05 | % | $ | 3,921,744 | $ | 832,014 | $ | 4,753,758 | ||||||||||||
|
|
|
|
|
|
|
|
29
The Macerich Company
Supplemental Financial and Operating Information (Unaudited)
Outstanding Debt by Maturity Date
As of June 30, 2019 | ||||||||||||||||||||
Center/Entity (dollars in thousands) |
Maturity Date |
Effective Interest Rate (a) |
Fixed | Floating | Total Debt Balance (a) |
|||||||||||||||
II. Unconsolidated Assets (At Companys pro rata share): |
|
|||||||||||||||||||
FlatIron Crossing (51%) |
01/05/21 | 2.81 | % | $ | 118,634 | $ | | $ | 118,634 | |||||||||||
One Westsidedefeased (25%) |
10/01/22 | 4.77 | % | 34,159 | | 34,159 | ||||||||||||||
Washington Square Mall (60%) |
11/01/22 | 3.65 | % | 330,000 | | 330,000 | ||||||||||||||
Deptford Mall (51%) |
04/03/23 | 3.55 | % | 91,773 | | 91,773 | ||||||||||||||
Scottsdale Fashion Square (50%) |
04/03/23 | 3.02 | % | 226,352 | | 226,352 | ||||||||||||||
Tysons Corner Center (50%) |
01/01/24 | 4.13 | % | 377,546 | | 377,546 | ||||||||||||||
South Plains Mall (60%) |
11/06/25 | 4.22 | % | 120,000 | | 120,000 | ||||||||||||||
Twenty Ninth Street (51%) |
02/06/26 | 4.10 | % | 76,500 | | 76,500 | ||||||||||||||
Country Club Plaza (50%) |
04/01/26 | 3.88 | % | 159,205 | | 159,205 | ||||||||||||||
Lakewood Center (60%) |
06/01/26 | 4.15 | % | 216,593 | | 216,593 | ||||||||||||||
Kierland Commons (50%) |
04/01/27 | 3.98 | % | 107,903 | | 107,903 | ||||||||||||||
Los Cerritos Center (60%) |
11/01/27 | 4.00 | % | 315,000 | | 315,000 | ||||||||||||||
Arrowhead Towne Center (60%) |
02/01/28 | 4.05 | % | 240,000 | | 240,000 | ||||||||||||||
North Bridge, The Shops at (50%) |
06/01/28 | 3.71 | % | 187,017 | | 187,017 | ||||||||||||||
Corte Madera, The Village at (50.1%) |
09/01/28 | 3.53 | % | 112,396 | | 112,396 | ||||||||||||||
Broadway Plaza (50%) |
04/01/30 | 4.19 | % | 224,435 | | 224,435 | ||||||||||||||
West Acres (19%) |
03/01/32 | 4.61 | % | 14,432 | | 14,432 | ||||||||||||||
|
|
|
|
|
|
|
|
|||||||||||||
Total Fixed Rate Debt for Unconsolidated Assets |
3.85 | % | $ | 2,951,945 | $ | | $ | 2,951,945 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||||||
Atlas Park (50%) (d) |
10/28/21 | 5.40 | % | $ | | $ | 35,448 | $ | 35,448 | |||||||||||
Pacific Premier Retail LLC (60%) |
10/31/22 | 3.64 | % | | 60,000 | 60,000 | ||||||||||||||
Fashion District Philadelphia (50%) |
01/22/23 | 4.44 | % | | 124,080 | 124,080 | ||||||||||||||
Boulevard Shops (50%) |
12/05/23 | 4.59 | % | | 9,234 | 9,234 | ||||||||||||||
|
|
|
|
|
|
|
|
|||||||||||||
Total Floating Rate Debt for Unconsolidated Assets |
4.38 | % | $ | | $ | 228,762 | $ | 228,762 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||||||
Total Debt for Unconsolidated Assets |
3.89 | % | $ | 2,951,945 | $ | 228,762 | $ | 3,180,707 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||||||
Total Debt |
3.98 | % | $ | 6,873,689 | $ | 1,060,776 | $ | 7,934,465 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||||||
Percentage to Total |
86.63 | % | 13.37 | % | 100.00 | % |
(a) | The debt balances include the unamortized debt premiums/discounts and loan finance costs. Debt premiums/discounts represent the excess of the fair value of debt over the principal value of debt assumed in various acquisitions. Debt premiums/discounts and loan finance costs 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 table represents the effective interest rate, including the debt premiums/discounts and loan finance costs. |
(b) | This property is owned by a consolidated joint venture. The above debt balance represents the Company's pro rata share of 50.0%. |
(c) | The revolving line of credit includes an interest rate swap that effectively converts $400 million of the outstanding balance to fixed rate debt through September 30, 2021. |
(d) | The maturity date assumes that all available extension options are fully exercised and that the Company and/or its affiliates do not opt to refinance the debt prior to these dates. |
(e) | This property is owned by a consolidated joint venture. The above debt balance represents the Company's pro rata share of 50.1%. |
(f) | This property is owned by a consolidated joint venture. The above debt balance represents the Company's pro rata share of 84.9%. |
30
The Macerich Company
Supplemental Financial and Operating Information (Unaudited)
Development Pipeline Forecast
(Dollars in millions)
as of June 30, 2019
In-Process Developments and Redevelopments:
Property |
Project Type |
Total Cost(a)(b) |
Ownership |
Total Cost(a)(b) |
Pro Rata Capitalized Costs(b) Incurred-to-date 6/30/2019 |
Expected |
Stabilized | |||||||||
Fashion District Philadelphia |
Redevelopment of The Gallery in downtown Philadelphia; includes Burlington, Century 21, H&M, AMC Theaters Round One, City Winery and other retail, entertainment and restaurant uses | $400 - $420(d) | 50.0% | $200 - $210(d) | $ | 163 | September 2019 | 7 - 7.5%(d) | ||||||||
Scottsdale Fashion Square |
Redevelopment of former Barneys anchor into a flagship Apple store and an Industrious co-working space; 80,000 sf exterior expansion with restaurants and fitness leading into a luxury wing | $140 - $160 | 50.0% | $70 - $80 | $ | 31 | 2019 | 6 - 6.5% | ||||||||
One Westside fka Westside Pavilion |
Redevelopment of an existing retail center into an approximately 584,000 sf Class A creative office campus leased solely to Google | $500 - $550(e) |
25.0% | $125 - $138(e) |
$ | 45 | Q3 2022(f) |
7.75% - 8.25%(e) | ||||||||
|
|
|
|
|||||||||||||
Total In-Process |
$1,040 - $1,130 |
$395 - $428 |
$ | 239 | ||||||||||||
|
|
|
|
(a) | Much of this information is estimated and may change from time to time. See the Companys forward-looking disclosure on pages 1 and 2 for factors that may affect the information provided in this table |
(b) | This excludes GAAP allocations of non cash and indirect costs. |
(c) | Stabilized Yield is calculated based on stabilized income after development divided by project direct costs excluding GAAP allocations of non cash and indirect costs. |
(d) | This reflects incremental project costs and income subsequent to the Companys $106.8 million investment in July 2014. Total Costs are net of $25 million of approved public financing grants that will be a reduction of costs. |
(e) | Includes $140 million ($35 million at the Companys share), which is an allocable share of the total $190 million purchase price paid by the joint venture in August 2018 for the existing buildings and land. |
(f) | Monthly base rent payments are anticipated to commence during the third quarter of 2022, with base rent abatements from the second through ninth month following rent commencement. |
31
The Macerich Company
Supplemental Financial and Operating Information (Unaudited)
Development Pipeline Forecast (Continued)
(Dollars in millions)
as of June 30, 2019
Pipeline of Former Sears Redevelopments
Project Type |
Ownership | Total Cost @ Pro rata(a)(b) |
Pro
rata Capitalized Costs 6/30/2019 Incurred-to-Date(b) |
Stabilized Yield(a)(b)(c) | ||||||||||
Retail Redevelopment | $80 - $95 | $ | 3 | 8.0% - 9.0% | ||||||||||
Mixed-Use Densification |
|
100 - 120 | 1 | 8.5% - 10.0% | ||||||||||
Future Phases | 70 - 85 | 0 | TBD | |||||||||||
|
|
|
||||||||||||
Total | various | $250 - $300 | $ | 4 | ||||||||||
|
|
|
Property |
Description |
Expected Delivery(a) | ||||||
Retail Redevelopment: | ||||||||
(d) | Arrowhead Towne Center | Redevelop existing store with retail uses | TBD | |||||
(d) | Chandler Fashion Center | Redevelop existing store with entertainment and additional retail uses | Q4-2020 to 1H-2021 | |||||
(d) | Deptford Mall | Redevelop existing store for Dicks Sporting Goods, Round 1 and additional retail uses | Q4-2020 to 1H-2021 | |||||
(d) | South Plains Mall | Demolish box; site densification with retail and restaurants uses | TBD | |||||
(d) | Vintage Faire Mall | Redevelop existing store for Dave & Busters and additional retail uses | Q4-2020 to 1H-2021 | |||||
Wilton Mall | Redevelop existing store with a medical center/medical office use | Q4-2019 | ||||||
Mixed-Use Densification: | ||||||||
(d) | Los Cerritos Center | Demolish box; site densification with residential, hotel and restaurant uses | Late 2022 | |||||
(d) | Washington Square | Demolish box; site densification with hotel, entertainment and restaurant uses | Late 2021 |
(a) | Much of this information is estimated and may change from time to time. See the Companys forward-looking disclosure on pages 1 and 2 for factors that may affect the information provided in this table. This estimated range of incremental redevelopment costs could increase if the Company and its joint ventures decide to expand the scope as the redevelopment plans get refined. |
(b) | This excludes GAAP allocations of non cash and indirect costs. |
(c) | Stabilized Yield represents estimated replacement net operating income at stabilization divided by direct redevelopment costs, excluding GAAP allocations of non cash and indirect costs. |
(d) | These former Sears stores are owned by a 50/50 joint venture between the Company and Seritage Growth Properties. |
Note: The following Sears leases in the Companys portfolio were assumed by the new owner of Sears and are part of the Sears go-forward plan: Danbury Fair Mall, Freehold Raceway Mall, Green Acres Mall, Stonewood Center and The Mall of Victor Valley. The Danbury Fair Mall and Freehold Raceway Mall stores are owned by a 50/50 joint venture between the Company and Seritage Growth Properties. The Sears store at Paradise Valley has been closed, however the lease was assumed by the new owner of Sears. |
32
The Macerich Company
Corporate Information
Stock Exchange Listing
New York Stock Exchange
Symbol: MAC
The following table shows high and low sales prices per share of common stock during each quarter in 2019, 2018 and 2017 and dividends per share of common stock declared and paid by quarter:
Market Quotation per Share |
Dividends | |||||||||||
Quarter Ended: |
High | Low | Declared and Paid |
|||||||||
March 31, 2017 |
$ | 73.34 | $ | 62.14 | $ | 0.71 | ||||||
June 30, 2017 |
$ | 67.18 | $ | 56.06 | $ | 0.71 | ||||||
September 30, 2017 |
$ | 61.55 | $ | 52.12 | $ | 0.71 | ||||||
December 31, 2017 |
$ | 67.53 | $ | 52.45 | $ | 0.74 | ||||||
March 31, 2018 |
$ | 69.73 | $ | 54.35 | $ | 0.74 | ||||||
June 30, 2018 |
$ | 60.00 | $ | 53.55 | $ | 0.74 | ||||||
September 30, 2018 |
$ | 60.95 | $ | 54.36 | $ | 0.74 | ||||||
December 31, 2018 |
$ | 55.54 | $ | 40.90 | $ | 0.75 | ||||||
March 31, 2019 |
$ | 47.05 | $ | 41.63 | $ | 0.75 | ||||||
June 30, 2019 |
$ | 44.73 | $ | 32.04 | $ | 0.75 |
Dividend Reinvestment Plan
Stockholders may automatically reinvest their dividends in additional common stock of the Company through the Direct Investment Program, which also provides for purchase by voluntary cash contributions. For additional information, please contact Computershare Trust Company, N.A. at 877-373-6374.
Corporate Headquarters The Macerich Company 401 Wilshire Boulevard, Suite 700 Santa Monica, California 90401 310-394-6000 www.macerich.com |
Transfer Agent Computershare P.O. Box 30170 College Station, TX 77842-3170 877-373-6374 www.computershare.com |
Macerich Website
For an electronic version of our annual report, our SEC filings and documents relating to Corporate Governance, please visit macerich.com.
Investor Relations
Jean Wood Vice President, Investor Relations Phone: 424-229-3366 jean.wood@macerich.com |
33