8-K
MACERICH CO MD false 0000912242 0000912242 2020-08-11 2020-08-11

 

 

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 11, 2020

 

 

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)

Registrant’s 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 11, 2020 (the “Press Release”) announcing results of operations for the Company for the quarter ended June 30, 2020 and such Press Release is furnished as Exhibit 99.1 hereto.

On August 11, 2020, 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, 2020 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.

2


EXHIBIT INDEX

EXHIBIT

NUMBER

   

NAME

         
 

99.1

   

Press Release dated August 11, 2020

         
 

99.2

   

Supplemental Financial Information for the three and six months ended June 30, 2020

         
 

104

   

Cover Page Interactive Data File (embedded within the Inline XBRL document)

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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 11, 2020

Date

 

 

 

/s/ Scott W. Kingsmore

Senior Executive Vice President,

Chief Financial Officer

and Treasurer

4

EX-99.1

Exhibit 99.1

PRESS RELEASE

 

 

For:                                                                                   THE MACERICH COMPANY

MACERICH ANNOUNCES QUARTERLY RESULTS

SANTA MONICA, CA, August 11, 2020. The Macerich Company (NYSE: MAC) today announced results of operations for the quarter ended June 30, 2020, which included net loss attributable to the Company of $25.1 million or $0.18 per share-diluted for the quarter ended June 30, 2020 compared to net income of $15.7 million or $0.11 per share-diluted attributable to the Company for the quarter ended June 30, 2019. For the second quarter 2020, funds from operations (“FFO”)-diluted, excluding financing expense in connection with Chandler Freehold and loss on extinguishment of debt was $60.5 million or $0.39 per share-diluted compared to $133.6 million or $0.88 per share-diluted for the quarter ended June 30, 2019. A description and reconciliation of earnings per share (“EPS”)-diluted to FFO per share-diluted, excluding financing expense in connection with Chandler Freehold and loss on extinguishment of debt is included within the financial tables accompanying this press release.

Results and Highlights:

 

   

The majority of the properties in the portfolio have resumed operations, with the exception of two malls in New York City and nine indoor malls in California that were recently closed for a second time pursuant to a statewide mandate.

 

   

Mall portfolio occupancy, including closed centers, was 91.3% at June 30, 2020, compared to 94.1% at June 30, 2019.

 

   

Mall tenant annual sales per square foot for the portfolio decreased to $774 for the twelve months ended June 30, 2020, compared to $776 for the twelve months ended June 30, 2019. This sales metric excludes the period of COVID-19 closure for each tenant.

 

   

Average rent per square foot increased 2.1% to $62.48 at June 30, 2020, compared to $61.17 at June 30, 2019.

“We continued to make progress re-opening our properties and partnering with our tenants to prioritize the health and safety of employees, tenants, service providers and shoppers. Communities are responding positively to the return of our centers, with pent-up demand for the in-store retail experience driving steady traffic and increased customer conversion rates that are exceeding expectations,” said the Company’s Chief Executive Officer, Thomas O’Hern. “As we look ahead, we are encouraged by the pipeline of new store openings for the remainder of 2020 and into 2021 and believe retailers will continue to prioritize store operations in highly productive town centers, positioning Macerich for success. We are confident that the quality and scale of our portfolio, along with our financial resources, will provide us the flexibility to successfully navigate the current environment.”

COVID-19 Update:

The majority of the Company’s properties are now open, the exceptions being Queens Center and Kings Plaza in New York City, which have been closed since March 2020, and nine indoor California malls that had previously opened in May and early June, but were closed for a second time in July pursuant to a statewide mandate. Those nine California malls include Fresno Fashion Fair, Inland Center, Lakewood Center, Los Cerritos Center, Stonewood Mall, The Mall at Victor Valley, The Oaks, Pacific View and Vintage Faire Mall. The duration of the nine recent California center closures is yet undetermined.

 

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The Company is making meaningful progress in its negotiations with national and local tenants to secure rental payments. As a result of this progress, cash receipts continue to improve with approximately 58% and 66% of billings collected in June and July, respectively.

Store Openings:

Despite the unprecedented disruption from COVID-19, plans for new retail stores and other openings continue with leases for over 90 new locations in nearly 570,000 square feet targeted for the second half of 2020, including the following: Restoration Hardware Gallery at Village of Corte Madera; Round One and Dicks Sporting Goods in a portion of the former Sears building at Deptford Mall; Ardene, DSW and Industrious at Fashion District of Philadelphia; Tesla in a two level flagship store at Santa Monica Place; Gucci in a relocated and expanded store at Fashion Outlets of Chicago; Tory Burch and Adidas at Fashion Outlets of Niagara; X Lanes Bowling at Fresno Fashion Fair; lululemon athletica at Twenty Ninth Street; Capital One Café, Bulgari and Francine’s at Scottsdale Fashion Square; and West Elm and Madewell at La Encantada. In total, the Company has entered into numerous leases for new stores and concepts totaling nearly 1.3 million square feet, for planned openings in primarily 2020 and 2021.

Redevelopment:

While the Company has reduced its planned 2020 development expenditures by approximately $90 million, work continues on select projects. Notably, One Westside in Los Angeles, a 584,000 square foot creative office redevelopment continues on schedule with a planned delivery to Google in early 2022. Redevelopment of the former Sears store at Deptford Mall in Deptford, NJ is on schedule, with expected openings of Round One and Dicks Sporting Goods this fall. This will be an exciting addition to the property, adding to an ever-growing relationship with both companies.    

Dividend:

The Company’s Board of Directors declared a quarterly cash dividend of $0.15 per share of common stock. The dividend is payable on September 8, 2020 to stockholders of record at the close of business on August 19, 2020. The Board’s decision to reduce the dividend allows the Company to preserve liquidity and financial flexibility given the continued uncertain economic environment resulting from the COVID-19 pandemic.

Guidance:

On March 27, 2020, given the complex and rapidly evolving circumstances surrounding the COVID-19 pandemic, the Company withdrew its previously published 2020 Guidance, and is not providing an updated outlook at this time as a result of continued uncertainties.

Macerich 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 country’s 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 achieved the #1 GRESB ranking in the North American Retail Sector for five straight years (2015 – 2019). Additional information about Macerich can be obtained from the Company’s 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 Company’s website at www.macerich.com (Investors Section). The

 

2


call begins on August 11, 2020 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 including, among other things, competition from other companies, retail formats and technology, risks of real estate development and redevelopment, and acquisitions and dispositions; the adverse impact of the novel coronavirus (COVID-19) on the U.S., regional and global economies and the financial condition and results of operations of the Company and its tenants; 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 Company’s various filings with the Securities and Exchange Commission, including the Annual Report on Form 10-K for the year ended December 31, 2019 and our Quarterly Report on Form 10-Q for the quarter ended June 30, 2020 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)

##

 

3


THE MACERICH COMPANY

FINANCIAL HIGHLIGHTS

(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)

Results of Operations:

 

     For the Three Months     For the Six Months  
     Ended June 30,     Ended June 30,  
     Unaudited     Unaudited  
     2020     2019     2020     2019  

Revenues:

        

Leasing revenue

   $ 168,754     $ 211,022     $ 379,475     $ 422,030  

Other income

     3,003       7,831       12,261       13,165  

Management Companies' revenues

     6,830       9,119       13,803       19,299  
  

 

 

   

 

 

   

 

 

   

 

 

 

Total revenues

     178,587       227,972       405,539       454,494  
  

 

 

   

 

 

   

 

 

   

 

 

 

Expenses:

        

Shopping center and operating expenses

     57,133       64,092       127,858       133,696  

Management Companies' operating expenses

     16,442       15,692       32,666       34,706  

Leasing expenses

     6,653       7,677       14,078       15,182  

REIT general and administrative expenses

     8,242       4,589       15,063       11,550  

Depreciation and amortization

     80,294       82,385       162,507       163,853  

Interest expense (a)

     20,034       37,109       28,108       75,466  

Loss on extinguishment of debt

     —         —         —         351  
  

 

 

   

 

 

   

 

 

   

 

 

 

Total expenses

     188,798       211,544       380,280       434,804  
  

 

 

   

 

 

   

 

 

   

 

 

 

Equity in (loss) income of unconsolidated joint ventures

     (14,173     7,257       (4,475     19,500  

Income tax benefit (expense)

     1,524       (679     1,790       (1,025

Loss on sale or write down of assets, net

     (3,867     (9,059     (40,570     (15,375
  

 

 

   

 

 

   

 

 

   

 

 

 

Net (loss) income

     (26,727     13,947       (17,996     22,790  

Less net loss attributable to noncontrolling interests

     (1,611     (1,787     (402     (768
  

 

 

   

 

 

   

 

 

   

 

 

 

Net (loss) income attributable to the Company

   ($ 25,116   $ 15,734     ($ 17,594   $ 23,558  
  

 

 

   

 

 

   

 

 

   

 

 

 

Weighted average number of shares outstanding—basic

     144,102       141,344       142,769       141,303  
  

 

 

   

 

 

   

 

 

   

 

 

 

Weighted average shares outstanding, assuming full conversion of OP Units (b)

     154,606       151,760       153,260       151,718  
  

 

 

   

 

 

   

 

 

   

 

 

 

Weighted average shares outstanding—Funds From Operations ("FFO")—diluted (b)

     154,606       151,760       153,260       151,718  
  

 

 

   

 

 

   

 

 

   

 

 

 

Earnings per share ("EPS")—basic

   ($ 0.18   $ 0.11     ($ 0.13   $ 0.16  
  

 

 

   

 

 

   

 

 

   

 

 

 

EPS—diluted

   ($ 0.18   $ 0.11     ($ 0.13   $ 0.16  
  

 

 

   

 

 

   

 

 

   

 

 

 

Dividend paid per share

   $ 0.50     $ 0.75     $ 1.25     $ 1.50  
  

 

 

   

 

 

   

 

 

   

 

 

 

FFO—basic and diluted (b) (c)

   $ 93,161     $ 148,866     $ 261,550     $ 283,144  
  

 

 

   

 

 

   

 

 

   

 

 

 

FFO—basic and diluted, excluding financing expense in connection with Chandler Freehold (b) (c)

   $ 60,535     $ 133,641     $ 183,217     $ 255,575  
  

 

 

   

 

 

   

 

 

   

 

 

 

FFO—basic and diluted, excluding financing expense in connection with Chandler Freehold and loss on extinguishment of debt (b) (c)

   $ 60,535     $ 133,641     $ 183,217     $ 255,926  
  

 

 

   

 

 

   

 

 

   

 

 

 

FFO per share—basic and diluted (b) (c)

   $ 0.60     $ 0.98     $ 1.71     $ 1.87  
  

 

 

   

 

 

   

 

 

   

 

 

 

FFO per share—basic and diluted, excluding financing expense in connection with Chandler Freehold (b) (c)

   $ 0.39     $ 0.88     $ 1.20     $ 1.68  
  

 

 

   

 

 

   

 

 

   

 

 

 

FFO per share—basic and diluted, excluding financing expense in connection with Chandler Freehold and loss on extinguishment of debt (b) (c)

   $ 0.39     $ 0.88     $ 1.20     $ 1.69  
  

 

 

   

 

 

   

 

 

   

 

 

 

 

4


THE MACERICH COMPANY

FINANCIAL HIGHLIGHTS

(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)

 

(a)

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 $32,907 and $81,291 to adjust for the change in the fair value of the financing arrangement obligation during the three and six months ended June 30, 2020, respectively; and a credit of $17,258 and $31,522 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; (ii) distributions of ($181) and $1,283 to its partner representing the partner's share of net (loss) income for the three and six months ending June 30, 2020, respectively; and $1,982 and $3,879 to its partner representing the partner's share of net income for the three and six months ended June 30, 2019, respectively; and (iii) distributions of $281 and $2,958 to its partner in excess of the partner's share of net income for the three and six months ended June 30, 2020, respectively; and $2,033 and $3,953 to its partner in excess of the partner's share of net income for the three and six months ended June 30, 2019, respectively.

 

(b)

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 FFO—diluted 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.

 

(c)

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. Adjustments for unconsolidated joint ventures are calculated to reflect FFO on the same basis. Beginning in the first quarter of 2018, the Company revised its definition of FFO so that FFO excluded the impact of the financing expense in connection with Chandler Freehold.

Beginning in the third quarter of 2019, the Company presented a separate non-GAAP measure—FFO excluding financing expense in connection with Chandler Freehold. The Company has revised the FFO presentation for the three and six months ended June 30, 2019 to conform to the current presentation. The Company accounts for its joint venture in Chandler Freehold as a financing arrangement. 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 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.

The Company also presents FFO excluding financing expense in connection with Chandler Freehold and loss on extinguishment of debt.

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 financing expense in connection with Chandler Freehold and non-routine costs associated with extinguishment of debt provide useful supplemental information regarding the Company's performance as they show a more meaningful and consistent comparison of the Company's operating performance and allows investors to more easily compare the Company's 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.

 

5


THE MACERICH COMPANY

FINANCIAL HIGHLIGHTS

(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)

 

Reconciliation of net (loss) income attributable to the Company to FFO attributable to common stockholders and unit holders—basic and diluted, excluding financing expense inconnection with Chandler Freehold and loss on extinguishment of debt (c):

 

     For the Three
Months
    For the Six Months  
   Ended June 30,     Ended June 30,  
   Unaudited     Unaudited  
   2020     2019     2020     2019  

Net (loss) income attributable to the Company

   ($ 25,116   $ 15,734     ($ 17,594   $ 23,558  

Adjustments to reconcile net (loss) income attributable to the Company to FFO attributable to common stockholders and unit holders—basic and diluted:

        

Noncontrolling interests in the OP

     (1,851     1,147       (1,294     1,724  

Loss on sale or write down of consolidated assets, net

     3,867       9,059       40,570       15,375  

Add: gain on undepreciated asset sales from consolidated assets

     40       —         40       534  

Loss on write-down of consolidated non-real estate assets

     (2,793     —         (2,793     —    

Noncontrolling interests share of loss on sale or write-down of consolidated joint ventures, net

     —         (3,369     —         (3,369

Loss on sale or write down of assets from unconsolidated joint ventures (pro rata), net

     6       313       6       384  

Depreciation and amortization on consolidated assets

     80,294       82,385       162,507       163,853  

Less depreciation and amortization allocable to noncontrolling interests in consolidated joint ventures

     (3,828     (3,676     (7,617     (7,321

Depreciation and amortization on unconsolidated joint ventures (pro rata)

     46,418       51,207       95,927       96,205  

Less: depreciation on personal property

     (3,876     (3,934     (8,202     (7,799
  

 

 

   

 

 

   

 

 

   

 

 

 

FFO attributable to common stockholders and unit holders—basic and diluted

     93,161       148,866       261,550       283,144  

Financing expense in connection with Chandler Freehold

     (32,626     (15,225     (78,333     (27,569
  

 

 

   

 

 

   

 

 

   

 

 

 

FFO attributable to common stockholders and unit holders, excluding financing expense in connection with Chandler Freehold—basic and diluted

     60,535       133,641       183,217       255,575  

Loss on extinguishment of debt

     —         —         —         351  
  

 

 

   

 

 

   

 

 

   

 

 

 

FFO attributable to common stockholders and unit holders, excluding financing expense in connection with Chandler Freehold and loss on extinguishment of debt—diluted

   $ 60,535     $ 133,641     $ 183,217     $ 255,926  
  

 

 

   

 

 

   

 

 

   

 

 

 

Reconciliation of EPS to FFO per share—diluted (c):

     For the Three
Months

Ended June 30,
    For the Six
Months

Ended June 30,
 
     Unaudited     Unaudited  
     2020     2019     2020     2019  

EPS—diluted

   ($ 0.18   $ 0.11     ($ 0.13   $ 0.16  

Per share impact of depreciation and amortization of real estate

     0.77       0.83       1.59       1.62  

Per share impact of loss on sale or write down of assets, net

     0.01       0.04       0.25       0.09  
  

 

 

   

 

 

   

 

 

   

 

 

 

FFO per share—basic and diluted

   $ 0.60     $ 0.98     $ 1.71     $ 1.87  

Per share impact of financing expense in connection with Chandler Freehold.

     (0.21     (0.10     (0.51     (0.19
  

 

 

   

 

 

   

 

 

   

 

 

 

FFO per share—basic and diluted, excluding financing expense in connection with Chandler Freehold

   $ 0.39     $ 0.88     $ 1.20     $ 1.68  

Per share impact of loss on extinguishment of debt

     —         —         —         0.01  
  

 

 

   

 

 

   

 

 

   

 

 

 

FFO per share—basic and diluted, excluding financing expense in connection with Chandler Freehold and loss on extinguishment of debt

   $ 0.39     $ 0.88     $ 1.20     $ 1.69  
  

 

 

   

 

 

   

 

 

   

 

 

 

 

6


THE MACERICH COMPANY

FINANCIAL HIGHLIGHTS

(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)

Reconciliation of Net (loss) income attributable to the Company to Adjusted EBITDA:

 

     For the Three Months     For the Six Months  
     Ended June 30,     Ended June 30,  
     Unaudited     Unaudited  
     2020     2019     2020     2019  

Net (loss) income attributable to the Company

   ($ 25,116   $ 15,734     ($ 17,594   $ 23,558  

Interest expense—consolidated assets

     20,034       37,109       28,108       75,466  

Interest expense—unconsolidated joint ventures (pro rata)

     26,329       26,368       53,317       53,422  

Depreciation and amortization—consolidated assets

     80,294       82,385       162,507       163,853  

Depreciation and amortization—unconsolidated joint ventures (pro rata)

     46,418       51,207       95,927       96,205  

Noncontrolling interests in the OP

     (1,851     1,147       (1,294     1,724  

Less: Interest expense and depreciation and amortization allocable to noncontrolling interests in consolidated joint ventures

     (7,491     (8,842     (16,454     (17,479

Loss on extinguishment of debt

     —         —         —         351  

Loss on sale or write down of assets, net—consolidated assets

     3,867       9,059       40,570       15,375  

Loss on sale or write down of assets, net—unconsolidated joint ventures (pro rata)

     6       313       6       384  

Add: Noncontrolling interests share of loss on sale or write-down of consolidated joint ventures, net

     —         (3,369     —         (3,369

Income tax (benefit) expense

     (1,524     679       (1,790     1,025  

Distributions on preferred units

     91       101       191       201  
  

 

 

   

 

 

   

 

 

   

 

 

 

Adjusted EBITDA (d)

   $ 141,057     $ 211,891     $ 343,494     $ 410,716  
  

 

 

   

 

 

   

 

 

   

 

 

 

Reconciliation of Adjusted EBITDA to Net Operating Income ("NOI") and to NOI—Same Centers:

 

     For the Three Months     For the Six Months  
     Ended June 30,     Ended June 30,  
     Unaudited     Unaudited  
     2020     2019     2020     2019  

Adjusted EBITDA (d)

   $ 141,057     $ 211,891     $ 343,494     $ 410,716  

REIT general and administrative expenses

     8,242       4,589       15,063       11,550  

Management Companies' revenues

     (6,830     (9,119     (13,803     (19,299

Management Companies' operating expenses

     16,442       15,692       32,666       34,706  

Leasing expenses, including joint ventures at pro rata

     7,174       8,552       15,389       17,023  

Straight-line and above/below market adjustments

     235       (8,677     (12,804     (14,688
  

 

 

   

 

 

   

 

 

   

 

 

 

NOI—All Centers

     166,320       222,928       380,005       440,008  

NOI of non-Same Centers

     (847     (7,670     (3,738     (16,671
  

 

 

   

 

 

   

 

 

   

 

 

 

NOI—Same Centers (e)

     165,473       215,258       376,267       423,337  

Lease termination income of Same Centers

     (2,485     (3,247     (3,727     (3,905
  

 

 

   

 

 

   

 

 

   

 

 

 

NOI—Same Centers, excluding lease termination income (e)

   $ 162,988     $ 212,011     $ 372,540     $ 419,432  
  

 

 

   

 

 

   

 

 

   

 

 

 

NOI—Same Centers percentage change, excluding lease termination income (e)

     -23.12       -11.18  

 

7


THE MACERICH COMPANY

FINANCIAL HIGHLIGHTS

(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)

(d)

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 Company's 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.

 

(e)

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 Company’s REIT general and administrative expenses and the straight-line and above/below market adjustments to minimum rents and subtracting out NOI from non-Same Centers.

 

8

EX-99.2

Exhibit 99.2

 

 

LOGO

Supplemental Financial Information

For the three and six months ended June 30, 2020

 

 

LOGO


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  

Supplemental FFO Information

     10  

Capital Expenditures

     11  

Operational Data

     12-22  

Sales Per Square Foot

     12  

Occupancy

     13  

Average Base Rent Per Square Foot

     14  

Cost of Occupancy

     15  

Percentage of Net Operating Income by State

     16  

Property Listing

     17-20  

Joint Venture List

     21-22  

Debt Tables

     23-25  

Debt Summary

     23  

Outstanding Debt by Maturity Date

     24-25  

Development Pipeline

     26-27  

Corporate Information

     28  

This Supplemental Financial Information should be read in connection with the Company’s second quarter 2020 earnings announcement (included as Exhibit 99.1 of the Company’s Current Report on 8-K, event date August 11, 2020, 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 country’s most attractive, densely populated markets with significant presence on the West Coast, Arizona, Chicago and the Metro New York to Washington, DC corridor. A recognized leader in sustainability, the Company has achieved the #1 GRESB ranking in the North American Retail Sector for five straight years 2015 – 2019.

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, 2020, 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.

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

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

The Company presents certain measures in this Exhibit on a pro rata basis which represents (i) the measure on a consolidated basis, minus the Company’s partners’ share of the measure from its consolidated joint ventures (calculated based upon the partners’ percentage ownership interest); plus (ii) the Company’s share of the measure from its unconsolidated joint ventures (calculated based upon the Company’s 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 Company’s share of the applicable amount from unconsolidated joint ventures and exclude the Company’s 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 Company’s 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 Company’s 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 Company’s legal claim to such items.

This document contains information constituting forward-looking statements and includes expectations regarding the Company’s 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 or the industry to differ materially from the Company’s future results, performance or achievements, or those of the industry, expressed or implied in such forward-looking statements. Such factors include, among others, general industry, as well as national, regional and local economic and

 

1


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 including, among other things, competition from other companies, retail formats and technology, risks of real estate development and redevelopment, and acquisitions and dispositions; the continuing adverse impact of the novel coronavirus (COVID-19) on the U.S., regional and global economies and the financial condition and results of operations of the Company and its tenants; 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. You are urged to carefully review the disclosures we make concerning risks and other factors that may affect our business and operating results, including those made in “Item 1A. Risk Factors” and of our Annual Report on Form 10-K for the year ended December 31, 2019, and our Quarterly Report on Form 10-Q for the quarter ended June 30, 2020 filed on August 10, 2020 as well as our other reports filed with the Securities and Exchange Commission (“SEC”), which disclosures are incorporated herein by reference. You are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date of this document. 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  
     6/30/2020     12/31/2019     12/31/2018  
     dollars in thousands, except per share data  

Closing common stock price per share

   $ 8.97     $ 26.92     $ 43.28  

52 week high

   $ 34.15     $ 47.05     $ 69.73  

52 week low

   $ 4.81     $ 25.53     $ 40.90  

Shares outstanding at end of period

      

Class A non-participating convertible preferred units

     103,235       90,619       90,619  

Common shares and partnership units

     160,502,421       151,892,138       151,655,147  
  

 

 

   

 

 

   

 

 

 

Total common and equivalent shares/units outstanding

     160,605,656       151,982,757       151,745,766  
  

 

 

   

 

 

   

 

 

 

Portfolio capitalization data

      

Total portfolio debt, including joint ventures at pro rata

   $ 8,705,200     $ 8,074,867     $ 7,850,669  

Equity market capitalization

     1,440,633       4,091,376       6,567,557  
  

 

 

   

 

 

   

 

 

 

Total market capitalization

   $ 10,145,833     $ 12,166,243     $ 14,418,226  
  

 

 

   

 

 

   

 

 

 

Debt as a percentage of total market capitalization

     85.8     66.4     54.5

Portfolio Capitalization at June 30, 2020

 

 

LOGO

 

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, 2019

     10,484,488       141,407,650        90,619        151,982,757  

Conversion of partnership units to cash

     (168     —          —          (168

Conversion of partnership units to common shares

     (83,722     83,722        —          —    

Issuance of stock/partnership units from restricted stock issuance or other share or unit-based plans

     3,408       80,917        —          84,325  
  

 

 

   

 

 

    

 

 

    

 

 

 

Balance as of March 31, 2020

     10,404,006       141,572,289        90,619        152,066,914  
  

 

 

   

 

 

    

 

 

    

 

 

 

Conversion of partnership units to cash

     (1,554     —          —          (1,554

Conversion of partnership units to common shares

     (82,856     82,856        —          —    

Issuance of stock/partnership units from restricted stock issuance or other share or unit-based plans

     570       186,789        —          187,309  

Issuance of stock/partnership units from stock dividends

     581,091       7,759,280        12,616        8,352,987  
  

 

 

   

 

 

    

 

 

    

 

 

 

Balance as of June 30, 2020

     10,901,257       149,601,164        103,235        160,605,656  
  

 

 

   

 

 

    

 

 

    

 

 

 

 

4


The Macerich Company

Consolidated Statements of Operations (unaudited)

(Dollars in thousands)

 

     For the Three
Months Ended
June 30, 2020
    For the Six
Months Ended
June 30, 2020
 

Revenues:

    

Leasing revenue

   $ 168,754     $ 379,475  

Other income

     3,003       12,261  

Management Companies’ revenues

     6,830       13,803  
  

 

 

   

 

 

 

Total revenues

     178,587       405,539  
  

 

 

   

 

 

 

Expenses:

    

Shopping center and operating expenses

     57,133       127,858  

Management Companies’ operating expenses

     16,442       32,666  

Leasing expenses

     6,653       14,078  

REIT general and administrative expenses

     8,242       15,063  

Depreciation and amortization

     80,294       162,507  

Interest expense

     20,034       28,108  
  

 

 

   

 

 

 

Total expenses

     188,798       380,280  

Equity in loss of unconsolidated joint ventures

     (14,173     (4,475

Income tax benefit

     1,524       1,790  

Loss on sale or write down of assets, net

     (3,867     (40,570
  

 

 

   

 

 

 

Net loss

     (26,727     (17,996

Less net loss attributable to noncontrolling interests

     (1,611     (402
  

 

 

   

 

 

 

Net loss attributable to the Company

   $ (25,116   $ (17,594
  

 

 

   

 

 

 

 

5


The Macerich Company

Consolidated Balance Sheet (unaudited)

As of June 30, 2020

(Dollars in thousands)

 

ASSETS:

  

Property, net (a)

   $ 6,501,519  

Cash and cash equivalents

     497,581  

Restricted cash

     10,083  

Tenant and other receivables, net

     237,595  

Right-of-use assets, net

     137,679  

Deferred charges and other assets, net

     264,740  

Due from affiliates

     10,273  

Investments in unconsolidated joint ventures

     1,568,878  
  

 

 

 

Total assets

   $ 9,228,348  
  

 

 

 

LIABILITIES AND EQUITY:

  

Mortgage notes payable

   $ 4,377,787  

Bank and other notes payable

     1,478,635  

Accounts payable and accrued expenses

     58,672  

Lease liabilities

     110,225  

Other accrued liabilities

     213,586  

Distributions in excess of investments in unconsolidated joint ventures

     108,275  

Financing arrangement obligation

     192,609  
  

 

 

 

Total liabilities

     6,539,789  
  

 

 

 

Commitments and contingencies

  

Equity:

  

Stockholders’ equity:

  

Common stock

     1,496  

Additional paid-in capital

     4,596,684  

Accumulated deficit

     (2,082,082

Accumulated other comprehensive loss

     (13,701
  

 

 

 

Total stockholders’ equity

     2,502,397  

Noncontrolling interests

     186,162  
  

 

 

 

Total equity

     2,688,559  
  

 

 

 

Total liabilities and equity

   $ 9,228,348  
  

 

 

 

 

 

(a)

Includes construction in progress of $89,245.

 

6


The Macerich Company

Non-GAAP Pro Rata Financial Information (unaudited)

(Dollars in thousands)

 

     For the Three Months
Ended June 30, 2020
    For the Six Months
Ended June 30, 2020
 
     Noncontrolling
Interests of
Consolidated
Joint Ventures (a)
    Company’s Share
of Unconsolidated
Joint Ventures
    Noncontrolling
Interests of
Consolidated
Joint Ventures (a)
    Company’s Share
of Unconsolidated
Joint Ventures
 

Revenues:

        

Leasing revenue

   $ (10,300   $ 92,327     $ (23,001   $ 213,192  

Other income

     (379     (2,075     (1,151     221  
  

 

 

   

 

 

   

 

 

   

 

 

 

Total revenues

     (10,679     90,252       (24,152     213,413  
  

 

 

   

 

 

   

 

 

   

 

 

 

Expenses:

        

Shopping center and operating expenses

     (2,870     31,073       (6,572     67,092  

Leasing expenses

     (78     599       (234     1,546  

Depreciation and amortization

     (3,828     46,418       (7,617     95,927  

Interest expense

     (3,663     26,329       (8,837     53,317  
  

 

 

   

 

 

   

 

 

   

 

 

 

Total expenses

     (10,439     104,419       (23,260     217,882  

Equity in loss of unconsolidated joint ventures

     —         14,173       —         4,475  

Loss on sale or write down of assets, net

     —         (6     —         (6
  

 

 

   

 

 

   

 

 

   

 

 

 

Net income

     (240     —         (892     —    

Less net income attributable to noncontrolling interests

     (240     —         (892     —    
  

 

 

   

 

 

   

 

 

   

 

 

 

Net income attributable to the Company

   $ —       $ —       $ —       $ —    
  

 

 

   

 

 

   

 

 

   

 

 

 

 

(a)

Represents the Company’s partners’ share of consolidated joint ventures.

 

7


The Macerich Company

Non-GAAP Pro Rata Financial Information (unaudited)

(Dollars in thousands)

 

     As of June 30, 2020  
     Noncontrolling
Interests of
Consolidated
Joint Ventures (a)
    Company’s Share
of Unconsolidated
Joint Ventures
 

ASSETS:

    

Property, net (b)

   $ (333,337   $ 4,534,851  

Cash and cash equivalents

     (4,006     64,339  

Restricted cash

     (991     6,262  

Tenant and other receivables, net

     (12,775     122,515  

Right-of-use assets, net

     (742     60,762  

Deferred charges and other assets, net

     (2,796     125,974  

Due from affiliates

     421       (4,864

Investments in unconsolidated joint ventures, at equity

     —         (1,568,878
  

 

 

   

 

 

 

Total assets

   $ (354,226   $ 3,340,961  
  

 

 

   

 

 

 

LIABILITIES AND EQUITY:

    

Mortgage notes payable

   $ (359,219   $ 3,024,931  

Bank and other notes payable

     —         183,066  

Accounts payable and accrued expenses

     (2,469     69,504  

Lease liabilities

     (3,049     60,060  

Other accrued liabilities

     (3,802     111,675  

Distributions in excess of investments in unconsolidated joint ventures

     —         (108,275

Financing arrangement obligation

     (192,609     —    
  

 

 

   

 

 

 

Total liabilities

     (561,148     3,340,961  
  

 

 

   

 

 

 

Equity:

    

Stockholders’ equity

     210,793       —    

Noncontrolling interests

     (3,871     —    
  

 

 

   

 

 

 

Total equity

     206,922       —    
  

 

 

   

 

 

 

Total liabilities and equity

   $ (354,226   $ 3,340,961  
  

 

 

   

 

 

 

 

(a)

Represents the Company’s partners’ share of consolidated joint ventures.

(b)

This includes $9,313 of construction in progress relating to the Company’s partners’ share from consolidated joint ventures and $383,341 of construction in progress relating to the Company’s 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, 2020  
     Consolidated     Non-
Controlling
Interests (a)
    Company’s
Consolidated
Share
    Company’s
Share of
Unconsolidated
Joint Ventures
    Company’s
Total
Share
 

Revenues:

          

Minimum rents

  

$

135,132

 

 

$

(7,347

 

$

127,785

 

 

$

74,697

 

 

$

202,482

 

Percentage rents

  

 

945

 

 

 

(12

 

 

933

 

 

 

(11

 

 

922

 

Tenant recoveries

  

 

57,131

 

 

 

(3,596

 

 

53,535

 

 

 

29,003

 

 

 

82,538

 

Other

  

 

3,323

 

 

 

(237

 

 

3,086

 

 

 

1,505

 

 

 

4,591

 

Less: Bad debt expense

  

 

(27,777

 

 

892

 

 

 

(26,885

 

 

(12,867

 

 

(39,752

  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total leasing revenue

  

$

168,754

 

 

$

(10,300

 

$

158,454

 

 

$

92,327

 

 

$

250,781

 

  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

 

     For the Six Months Ended June 30, 2020  
     Consolidated     Non-
Controlling
Interests (a)
    Company’s
Consolidated
Share
    Company’s
Share of
Unconsolidated
Joint Ventures
    Company’s
Total
Share
 

Revenues:

          

Minimum rents

  

$

275,346

 

 

$

(15,848

 

$

259,498

 

 

$

163,011

 

 

$

422,509

 

Percentage rents

  

 

3,724

 

 

 

(139

 

 

3,585

 

 

 

1,622

 

 

 

5,207

 

Tenant recoveries

  

 

119,601

 

 

 

(7,594

 

 

112,007

 

 

 

59,369

 

 

 

171,376

 

Other

  

 

9,494

 

 

 

(583

 

 

8,911

 

 

 

3,866

 

 

 

12,777

 

Less: Bad debt expense

  

 

(28,690

 

 

1,163

 

 

 

(27,527

 

 

(14,676

 

 

(42,203

  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total leasing revenue

  

$

379,475

 

 

$

(23,001

 

$

356,474

 

 

$

213,192

 

 

$

569,666

 

  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

 

(a)

Represents the Company’s partners’ share of consolidated joint ventures.

 

9


The Macerich Company

Supplemental Financial and Operating Information (unaudited)

Supplemental FFO Information(a)

 

     As of June 30,  
         2020              2019      
     dollars in millions  

Straight-line rent receivable

   $ 129.1      $ 118.1  

 

     For the
Three Months Ended
June 30,
    For the
Six Months Ended
June 30,
 
         2020             2019             2020             2019      
     dollars in millions  

Lease termination income

   $ 2.5     $ 3.2     $ 3.7     $ 3.9  

Straight-line rental income

   $ (1.7   $ 2.4     $ 1.3     $ 6.0  

Business development and parking income (b)

   $ 5.7     $ 15.2     $ 19.8     $ 28.5  

Gain (loss) on sales or write down of undepreciated assets

   $ —       $ —       $ —       $ 0.5  

Amortization of acquired above and below-market leases (net revenue)

   $ 1.5     $ 6.3     $ 11.5     $ 8.7  

Amortization of debt premiums

   $ 0.2     $ 0.2     $ 0.4     $ 0.4  

Bad debt expense (c)

   $ 39.8     $ 2.8     $ 42.2     $ 5.2  

Leasing expenses

   $ 7.2     $ 8.5     $ 15.4     $ 17.0  

Interest capitalized

   $ 5.9     $ 7.1     $ 11.4     $ 14.0  

Chandler Freehold financing arrangement (d):

        

Distributions equal to partners’ share of net (loss) income

   $ (0.2   $ 2.0     $ 1.3     $ 3.9  

Distributions in excess of partners’ share of net (loss) income (e)

     0.3       2.0       3.0     $ 3.9  

Fair value adjustment (e)

     (32.9     (17.2     (81.3   $ (31.5
  

 

 

   

 

 

   

 

 

   

 

 

 

Total Chandler Freehold financing arrangement (income) expense (d)

   $ (32.8   $ (13.2   $ (77.0   $ (23.7
  

 

 

   

 

 

   

 

 

   

 

 

 

 

(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, 2020 and 2019.

(d)

Included in interest expense.

(e)

The Company presents Funds from Operations (“FFO”) excluding 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.

 

10


The Macerich Company

Supplemental Financial and Operating Information (unaudited)

Capital Expenditures(a)

 

     For the Six Months Ended      Year Ended
12/31/2019
     Year Ended
12/31/2018
 
     6/30/2020      6/30/2019  
    

dollars in millions

 

Consolidated Centers

           

Acquisitions of property, building improvement and equipment

   $ 7.0      $ 17.4      $ 34.8      $ 53.4  

Development, redevelopment, expansions and renovations of Centers

     22.8        45.2        112.3        173.3  

Tenant allowances

     5.2        8.3        18.9        12.6  

Deferred leasing charges

     1.5        1.8        3.2        17.3  
  

 

 

    

 

 

    

 

 

    

 

 

 

Total

   $ 36.5      $ 72.7      $ 169.2      $ 256.6  
  

 

 

    

 

 

    

 

 

    

 

 

 

Unconsolidated Joint Venture Centers

           

Acquisitions of property, building improvement and equipment

   $ 3.8      $ 4.7      $ 12.3      $ 15.7  

Development, redevelopment, expansions and renovations of Centers

     54.2        84.0        210.6        145.9  

Tenant allowances

     0.6        4.1        9.3        8.7  

Deferred leasing charges

     0.9        1.6        3.4        10.9  
  

 

 

    

 

 

    

 

 

    

 

 

 

Total

   $ 59.5      $ 94.4      $ 235.6      $ 181.2  
  

 

 

    

 

 

    

 

 

    

 

 

 

 

(a)

All joint venture amounts at pro rata.

 

11


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
 

06/30/2020(b)

   $   647      $     931      $     774  

06/30/2019

   $ 632      $ 964      $ 776  

12/31/2019

   $ 646      $ 998      $ 801  

12/31/2018

   $ 612      $ 882      $ 726  

 

(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.

 

(b)

This sales metric is computed to exclude the period of COVID-19 closure for each tenant.

 

LOGO

 

12


The Macerich Company

Supplemental Financial and Operating Information (unaudited)

Occupancy(a)

 

Regional Shopping Centers:
Period Ended

   Consolidated
Centers
    Unconsolidated
Joint Venture
Centers
    Total
Centers
 

06/30/2020

     91.0     91.6     91.3

06/30/2019

     93.2     95.2     94.1

12/31/2019

     93.7     94.4     94.0

12/31/2018

     95.2     95.6     95.4

 

(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, and includes any Centers that were closed as of June 30, 2020 due to COVID-19.

 

13


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
during the trailing
twelve months
ended(d)
 

Consolidated Centers

        

06/30/2020

   $ 60.11      $ 52.02      $ 52.47  

06/30/2019

   $ 58.93      $ 55.81      $ 51.54  

12/31/2019

   $ 58.76      $ 53.29      $ 53.20  

12/31/2018

   $ 56.82      $ 54.00      $ 49.07  

Unconsolidated Joint Venture Centers

        

06/30/2020

   $ 67.19      $ 68.22      $ 58.00  

06/30/2019

   $ 65.68      $ 69.28      $ 62.37  

12/31/2019

   $ 65.67      $ 73.05      $ 65.22  

12/31/2018

   $ 63.84      $ 66.95      $ 59.49  

All Regional Shopping Centers

        

06/30/2020

   $ 62.48      $ 56.81      $ 54.03  

06/30/2019

   $ 61.17      $ 59.60      $ 54.47  

12/31/2019

   $ 61.06      $ 59.15      $ 56.50  

12/31/2018

   $ 59.09      $ 57.55      $ 51.80  

 

(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.

 

14


The Macerich Company

Supplemental Financial and Operating Information (unaudited)

Cost of Occupancy

 

                                                                                                        
    For the trailing
twelve  months
ended June 30, 2020(a)
   For Years Ended December 31,  
       2019        2018    

Consolidated Centers

       

Minimum rents

  9.1%    9.1%      9.3%  

Percentage rents

  0.4%    0.4%      0.3%  

Expense recoveries(b)

  3.6%    3.6%      3.9%  
 

 

  

 

  

 

 

 

Total

  13.1%    13.1%      13.5%  
 

 

  

 

  

 

 

 
    For the trailing
twelve  months
ended June 30, 2020(a)
   For Years Ended December 31,  
       2019        2018    

Unconsolidated Joint Venture Centers

       

Minimum rents

  7.5%    7.3%      7.8%  

Percentage rents

  0.3%    0.3%      0.3%  

Expense recoveries(b)

  3.3%    3.2%      3.4%  
 

 

  

 

  

 

 

 

Total

  11.1%    10.8%      11.5%  
 

 

  

 

  

 

 

 
    For the trailing
twelve  months
ended June 30, 2020(a)
   For Years Ended December 31,  
       2019        2018    

All Centers

       

Minimum rents

  8.2%    8.1%      8.5%  

Percentage rents

  0.3%    0.3%      0.3%  

Expense recoveries(b)

  3.4%    3.4%      3.6%  
 

 

  

 

  

 

 

 

Total

  11.9%    11.8%      12.4%  
 

 

  

 

  

 

 

 

 

(a)

The cost of occupancy metric is computed to exclude the period of COVID-19 closure for

each tenant.

 

(b)

Represents real estate tax and common area maintenance charges.

 

15


The Macerich Company

Supplemental Financial and Operating Information (unaudited)

Percentage of Net Operating Income by State

 

State

   % of Portfolio
2019
Real Estate
Pro Rata NOI(a)
 

California

     26.7

New York

     23.1

Arizona

     16.2

Pennsylvania & Virginia

     9.4

Colorado, Illinois & Missouri

     9.1

New Jersey & Connecticut

     7.3

Oregon

     4.3

Other(b)

     3.9
  

 

 

 

Total

     100.0
  

 

 

 

 

(a)

The percentage of Portfolio 2019 Real Estate Pro Rata NOI excludes lease termination revenue, straight-line and above/below market adjustments to minimum rents. Portfolio 2019 Real Estate Pro Rata NOI excludes REIT general and administrative expenses, management company revenues, management company expenses and leasing expenses (including joint ventures at pro rata).

(b)

“Other” includes Indiana, Iowa, Kentucky, North Dakota and Texas.

 

16


The Macerich Company

Property Listing

June 30, 2020

The following table sets forth certain information regarding the Centers and other locations that are wholly owned or partly owned by the Company.

 

Count

  

Company’s

Ownership(a)

  

Name of
Center/Location

   Year of
Original
Construction/
Acquisition
     Year of Most
Recent
Expansion/
Renovation
     Total
GLA(b)
 
   CONSOLIDATED CENTERS:

 

     
1    50.1%   

Chandler Fashion Center
Chandler, Arizona

     2001/2002        ongoing        1,318,000  
2    100%   

Danbury Fair Mall
Danbury, Connecticut

     1986/2005        2016        1,271,000  
3    100%   

Desert Sky Mall
Phoenix, Arizona

     1981/2002        2007        746,000  
4    100%   

Eastland Mall(c)
Evansville, Indiana

     1978/1998        1996        1,034,000  
5    100%   

Fashion Outlets of Chicago
Rosemont, Illinois

     2013/—               537,000  
6    100%   

Fashion Outlets of Niagara Falls USA
Niagara Falls, New York

     1982/2011        2014        689,000  
7    50.1%   

Freehold Raceway Mall
Freehold, New Jersey

     1990/2005        2007        1,673,000  
8    100%   

Fresno Fashion Fair
Fresno, California

     1970/1996        2006        995,000  
9    100%   

Green Acres Mall(c)
Valley Stream, New York

     1956/2013        2016        2,063,000  
10    100%   

Inland Center
San Bernardino, California

     1966/2004        2016        605,000  
11    100%   

Kings Plaza Shopping Center(c)
Brooklyn, New York

     1971/2012        2018        1,137,000  
12    100%   

La Cumbre Plaza(c)
Santa Barbara, California

     1967/2004        1989        492,000  
13    100%   

NorthPark Mall
Davenport, Iowa

     1973/1998        2001        934,000  
14    100%   

Oaks, The
Thousand Oaks, California

     1978/2002        2017        1,209,000  
15    100%   

Pacific View
Ventura, California

     1965/1996        2001        900,000  
16    100%   

Queens Center(c)
Queens, New York

     1973/1995        2004        965,000  
17    100%   

Santa Monica Place
Santa Monica, California

     1980/1999        2015        526,000  
18    84.9%   

SanTan Village Regional Center
Gilbert, Arizona

     2007/—        2018        1,124,000  
19    100%   

SouthPark Mall
Moline, Illinois

     1974/1998        2015        863,000  
20    100%   

Stonewood Center(c)
Downey, California

     1953/1997        1991        935,000  
21    100%   

Superstition Springs Center
Mesa, Arizona

     1990/2002        2002        922,000  
22    100%   

Towne Mall
Elizabethtown, Kentucky

     1985/2005        1989        350,000  

 

17


The Macerich Company

Property Listing

June 30, 2020

 

Count

  

Company’s

Ownership(a)

  

Name of
Center/Location

   Year of
Original
Construction/
Acquisition
     Year of Most
Recent
Expansion/
Renovation
   Total
GLA(b)
 

23

   100%   

Tucson La Encantada
Tucson, Arizona

     2002/2002      2005      246,000  

24

   100%   

Valley Mall
Harrisonburg, Virginia

     1978/1998      1992      505,000  

25

   100%   

Valley River Center
Eugene, Oregon

     1969/2006      2007      871,000  

26

   100%   

Victor Valley, Mall of
Victorville, California

     1986/2004      2012      577,000  

27

   100%   

Vintage Faire Mall
Modesto, California

     1977/1996      ongoing      984,000  

28

   100%   

Wilton Mall
Saratoga Springs, New York

     1990/2005      1998      709,000  
              

 

 

 
      Total Consolidated Centers            25,180,000  
              

 

 

 
UNCONSOLIDATED JOINT VENTURE CENTERS:

 

     

29

   60%   

Arrowhead Towne Center
Glendale, Arizona

     1993/2002      2015      1,197,000  

30

   50%   

Biltmore Fashion Park
Phoenix, Arizona

     1963/2003      2020      597,000  

31

   50%   

Broadway Plaza
Walnut Creek, California

     1951/1985      2016      927,000  

32

   50.1%   

Corte Madera, The Village at
Corte Madera, California

     1985/1998      2020      501,000  

33

   50%   

Country Club Plaza
Kansas City, Missouri

     1922/2016      2015      947,000  

34

   51%   

Deptford Mall
Deptford, New Jersey

     1975/2006      ongoing      1,040,000  

35

   51%   

FlatIron Crossing
Broomfield, Colorado

     2000/2002      2009      1,428,000  

36

   50%   

Kierland Commons
Scottsdale, Arizona

     1999/2005      2003      437,000  

37

   60%   

Lakewood Center
Lakewood, California

     1953/1975      2008      2,069,000  

38

   60%   

Los Cerritos Center
Cerritos, California

     1971/1999      2016      1,023,000  

39

   50%   

North Bridge, The Shops at(c)
Chicago, Illinois

     1998/2008           670,000  

40

   50%   

Scottsdale Fashion Square
Scottsdale, Arizona

     1961/2002      2019      1,835,000  

41

   60%   

South Plains Mall
Lubbock, Texas

     1972/1998      2017      1,136,000  

42

   51%   

Twenty Ninth Street(c)
Boulder, Colorado

     1963/1979      2007      845,000  

43

   50%   

Tysons Corner Center
Tysons Corner, Virginia

     1968/2005      2014      1,971,000  

44

   60%   

Washington Square
Portland, Oregon

     1974/1999      2005      1,296,000  

45

   19%   

West Acres
Fargo, North Dakota

     1972/1986      2001      691,000  
              

 

 

 
      Total Unconsolidated Joint Venture Centers            18,610,000  
              

 

 

 

 

18


The Macerich Company

Property Listing

June 30, 2020

 

Count

  

Company’s

Ownership(a)

  

Name of
Center/Location

   Year of
Original
Construction/
Acquisition
     Year of Most
Recent
Expansion/
Renovation
     Total
GLA(b)
 
REGIONAL SHOPPING CENTERS UNDER REDEVELOPMENT:

 

  

46

   50%   

Fashion District Philadelphia(c)(d)(e)
Philadelphia, Pennsylvania

     1977/2014        2019        899,000  

47

   100%   

Paradise Valley Mall(f)
Phoenix, Arizona

     1979/2002        2009        1,202,000  
              

 

 

 
      Total Regional Shopping Centers            45,891,000  
              

 

 

 

COMMUNITY / POWER CENTERS:

 

     

1

   50%   

Atlas Park, The Shops at(d)
Queens, New York

     2006/2011        2013        369,000  

2

   50%   

Boulevard Shops(d)
Chandler, Arizona

     2001/2002        2004        184,000  

3

   100%   

Southridge Center(f)
Des Moines, Iowa

     1975/1998        2013        848,000  

4

   100%   

Superstition Springs Power Center(f)
Mesa, Arizona

     1990/2002               206,000  

5

   100%   

The Marketplace at Flagstaff(c)(f)
Flagstaff, Arizona

     2007/—               268,000  
              

 

 

 
      Total Community / Power Centers            1,875,000  
              

 

 

 

OTHER ASSETS:

        
   100%   

Various(f)(g)

                   427,000  
   83.2%   

Estrella Falls(f)
Goodyear, Arizona

     2016        2016        79,000  
   50%   

Scottsdale Fashion Square-Office(d)
Scottsdale, Arizona

     1984/2002        2016        124,000  
   50%   

Tysons Corner Center-Office(d)
Tysons Corner, Virginia

     1999/2005        2012        174,000  
   50%   

Hyatt Regency Tysons Corner Center(d)
Tysons Corner, Virginia

     2015        2015        290,000  
   50%   

VITA Tysons Corner Center(d)
Tysons Corner, Virginia

     2015        2015        510,000  
   50%   

Tysons Tower(d)
Tysons Corner, Virginia

     2014        2014        529,000  

OTHER ASSETS UNDER REDEVELOPMENT:

        
   25%   

One Westside(d)(h)
Los Angeles, California

     1985/1998        ongoing        680,000  
              

 

 

 
      Total Other Assets            2,813,000  
              

 

 

 
      Grand Total            50,579,000  
              

 

 

 

 

(a)

The Company’s ownership interest in this table reflects its legal ownership interest. See footnotes (a) and (b) on pages 21 and 22 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 42 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.

(d)

Included in Unconsolidated Joint Venture Centers.

 

19


The Macerich Company

Property Listing

June 30, 2020

 

(e)

On September 19, 2019, the Company’s joint venture opened Fashion District Philadelphia in downtown Philadelphia.

(f)

Included in Consolidated Centers.

(g)

The Company owns an office building and five stores located at shopping centers not owned by the Company. Of the five stores, one is leased to Kohl’s, one is vacant, and three have been leased for non-Anchor uses. With respect to the office building and two of the five 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.

(h)

Construction is 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.

 

20


The Macerich Company

Joint Venture List as of June 30, 2020

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, 2020.

 

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      597,000  

Boulevard Shops

     50     50   Propcor II Associates, LLC      184,000  

Broadway Plaza(e)

     50     50   Macerich HHF Broadway Plaza LLC      927,000  

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      501,000  

Country Club Plaza

     50     50   Country Club Plaza KC Partners LLC      947,000  

Deptford Mall(d)

     51     51   Macerich HHF Centers LLC      1,040,000  

Estrella Falls

     83.2     83.2   Westcor Goodyear RSC LLC      79,000  

Fashion District Philadelphia

     50     50   Various Entities      899,000  

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      1,023,000  

North Bridge, The Shops at

     50     50   North Bridge Chicago LLC      670,000  

SanTan Village Regional Center

     84.9     84.9   Westcor SanTan Village LLC      1,124,000  

Scottsdale Fashion Square

     50     50   Scottsdale Fashion Square Partnership      1,835,000  

Scottsdale Fashion Square-Office

     50     50   Scottsdale Fashion Square Partnership      124,000  

Macerich Seritage Portfolio(g)

     50     50   MS Portfolio LLC      1,060,000  

South Plains Mall(d)

     60     60   Pacific Premier Retail LLC      1,136,000  

Twenty Ninth Street

     51     51   Macerich HHF Centers LLC      845,000  

Tysons Corner Center

     50     50   Tysons Corner LLC      1,971,000  

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      1,296,000  

West Acres

     19     19   West Acres Development, LLP      691,000  

One Westside(h)

     25     25   HPP-MAC WSP, LLC      680,000  

 

(a)

This column reflects the Company’s legal ownership in the listed properties as of June 30, 2020. Legal ownership may, at times, not equal the Company’s 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 Company’s 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 Company’s 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.

 

21


The Macerich Company

Joint Venture List as of June 30, 2020

 

(b)

Economic ownership represents the allocation of cash flow to the Company as of June 30, 2020, 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 Company’s 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, 2020.

(d)

These centers have a former Sears store which is owned by MS Portfolio LLC, see footnote (g) below. The GLA of the former Sears store, or tenant replacing the former 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 former Sears store at these seven centers plus the GLA of the former Sears store at two wholly owned centers, Danbury Fair Mall and Vintage Faire Mall, are also aggregated into the 1,060,000 square feet in the MS Portfolio LLC above.

(e)

In October 2018, the Company’s 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. On July 7, 2015, Sears assigned its ownership interest in MS Portfolio LLC to Seritage MS Holdings LLC. The Company expects to create additional value through re-leasing the former Sears boxes. For example, Primark has leased space in portions of the Sears stores at Danbury Fair Mall and Freehold Raceway Mall. Refer to the Development Pipeline Forecast on page 27 for details of the Former Sears Redevelopments at these properties.

(h)

Construction is 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.

 

22


The Macerich Company

Supplemental Financial and Operating Information (Unaudited)

Debt Summary (at Company’s pro rata share) (a)

 

     As of June 30, 2020  
     Fixed Rate     Floating
Rate
    Total  
     (Dollars in thousands)  

Mortgage notes payable

   $ 3,950,208     $ 427,579     $ 4,377,787  

Bank and other notes payable

     400,000       1,078,635       1,478,635  
  

 

 

   

 

 

   

 

 

 

Total debt per Consolidated Balance Sheet

     4,350,208       1,506,214       5,856,422  

Adjustments:

      

Less: Noncontrolling interests or financing arrangement share of debt from consolidated joint ventures

     (359,219     —         (359,219
  

 

 

   

 

 

   

 

 

 

Adjusted Consolidated Debt

     3,990,989       1,506,214       5,497,203  

Add: Company’s share of debt from unconsolidated joint ventures

     3,012,494       195,503       3,207,997  
  

 

 

   

 

 

   

 

 

 

Total Company’s Pro Rata Share of Debt

   $ 7,003,483     $ 1,701,717     $ 8,705,200  
  

 

 

   

 

 

   

 

 

 

Weighted average interest rate

     3.94     2.01     3.56

Weighted average maturity (years)

         4.60  

 

(a)

The Company’s pro rata share of debt represents (i) consolidated debt, minus the Company’s partners’ share of the amount from consolidated joint ventures (calculated based upon the partners’ percentage ownership interest); plus (ii) the Company’s share of debt from unconsolidated joint ventures (calculated based upon the Company’s percentage ownership interest). Management believes that this measure provides useful information to investors regarding the Company’s financial condition because it includes the Company’s share of debt from unconsolidated joint ventures and, for consolidated debt, excludes the Company’s 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 Company’s financial condition after taking into account the Company’s economic interest in these joint ventures. The Company’s pro rata share of debt should not be considered as a substitute to the Company’s 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 Company’s financial information prepared in accordance with GAAP.

 

23


The Macerich Company

Supplemental Financial and Operating Information (Unaudited)

Outstanding Debt by Maturity Date

 

    As of June 30, 2020  

Center/Entity (dollars in thousands)

  Maturity
Date
    Effective
Interest
Rate (a)
    Fixed     Floating     Total Debt
Balance (a)
 

I. Consolidated Assets:

         

Danbury Fair Mall

    10/01/20       5.53   $ 191,499       —       $ 191,499  

Fashion Outlets of Niagara Falls USA

    10/06/20       4.89     104,727       —         104,727  

Green Acres Mall

    02/03/21       3.61     274,193       —         274,193  

The Macerich Partnership, L.P.—Line of Credit (b)

    07/06/21       4.30     400,000       —         400,000  

Tucson La Encantada

    03/01/22       4.23     62,962       —         62,962  

Pacific View

    04/01/22       4.08     116,572       —         116,572  

Oaks, The

    06/05/22       4.14     185,048       —         185,048  

Towne Mall

    11/01/22       4.48     20,052       —         20,052  

Chandler Fashion Center (d)

    07/05/24       4.18     127,889       —         127,889  

Victor Valley, Mall of

    09/01/24       4.00     114,762       —         114,762  

Queens Center

    01/01/25       3.49     600,000       —         600,000  

Vintage Faire

    03/06/26       3.55     249,412       —         249,412  

Fresno Fashion Fair

    11/01/26       3.67     323,758       —         323,758  

SanTan Village Regional Center (e)

    07/01/29       4.34     186,177       —         186,177  

Freehold Raceway Mall (d)

    11/01/29       3.94     199,629       —         199,629  

Kings Plaza Shopping Center

    01/01/30       3.71     535,156       —         535,156  

Fashion Outlets of Chicago

    02/01/31       4.61     299,153       —         299,153  
   

 

 

   

 

 

   

 

 

   

 

 

 

Total Fixed Rate Debt for Consolidated Assets

      4.01 %    $ 3,990,989     $ —       $ 3,990,989  
   

 

 

   

 

 

   

 

 

   

 

 

 

Green Acres Commons

    03/29/21       2.88   $ —       $ 129,387     $ 129,387  

The Macerich Partnership, L.P.—Line of Credit (b)

    07/06/21       1.90     —         1,078,635       1,078,635  

Santa Monica Place (c)

    12/09/22       1.79     —         298,192       298,192  
   

 

 

   

 

 

   

 

 

   

 

 

 

Total Floating Rate Debt for Consolidated Assets

      1.96 %    $ —       $ 1,506,214     $ 1,506,214  
   

 

 

   

 

 

   

 

 

   

 

 

 

Total Debt for Consolidated Assets

      3.45 %    $ 3,990,989     $ 1,506,214     $ 5,497,203  
   

 

 

   

 

 

   

 

 

   

 

 

 

II. Unconsolidated Assets (At Company’s pro rata share):

 

       

FlatIron Crossing (51%)

    01/05/21       2.81   $ 113,278     $ —       $ 113,278  

One Westside — defeased (25%)

    10/01/22       4.77     33,347       —         33,347  

Washington Square Mall (60%)

    11/01/22       3.65     326,942       —         326,942  

Deptford Mall (51%)

    04/03/23       3.55     89,238       —         89,238  

Scottsdale Fashion Square (50%)

    04/03/23       3.02     221,068       —         221,068  

Tysons Corner Center (50%)

    01/01/24       4.13     369,197       —         369,197  

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     156,589       —         156,589  

Lakewood Center (60%)

    06/01/26       4.15     212,681       —         212,681  

Kierland Commons (50%)

    04/01/27       3.98     105,933       —         105,933  

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     187,072       —         187,072  

Corte Madera, The Village at (50.1%)

    09/01/28       3.53     112,405       —         112,405  

West Acres — Development (19%)

    10/10/29       3.72     337       —         337  

Tysons Tower (50%)

    11/11/29       3.38     94,410       —         94,410  

Broadway Plaza (50%)

    04/01/30       4.19     224,488       —         224,488  

West Acres (19%)

    03/01/32       4.61     14,009       —         14,009  
   

 

 

   

 

 

   

 

 

   

 

 

 

Total Fixed Rate Debt for Unconsolidated Assets

      3.84 %    $ 3,012,494     $ —       $ 3,012,494  
   

 

 

   

 

 

   

 

 

   

 

 

 

 

24


The Macerich Company

Supplemental Financial and Operating Information (Unaudited)

Outstanding Debt by Maturity Date

 

    As of June 30, 2020  

Center/Entity (dollars in thousands)

  Maturity
Date
    Effective
Interest
Rate (a)
    Fixed     Floating     Total Debt
Balance (a)
 

Atlas Park (50%) (c)

    10/28/21       3.13   $ —       $ 36,036     $ 36,036  

Fashion District Philadelphia (50%)

    01/22/23       2.17     —         149,719       149,719  

Boulevard Shops (50%)

    12/05/23       2.36     —         9,563       9,563  

One Westside — Development (25%) (c)

    12/18/24       2.38     —         185       185  
   

 

 

   

 

 

   

 

 

   

 

 

 

Total Floating Rate Debt for Unconsolidated Assets

      2.36 %    $ —       $ 195,503     $ 195,503  
   

 

 

   

 

 

   

 

 

   

 

 

 

Total Debt for Unconsolidated Assets

      3.75 %    $ 3,012,494     $ 195,503     $ 3,207,997  
   

 

 

   

 

 

   

 

 

   

 

 

 

Total Debt

      3.56 %    $ 7,003,483     $ 1,701,717     $ 8,705,200  
   

 

 

   

 

 

   

 

 

   

 

 

 

Percentage to Total

        80.45 %      19.55 %      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)

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.

(c)

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.

(d)

This property is owned by a consolidated joint venture. The above debt balance represents the Company’s pro rata share of 50.1%.

(e)

This property is owned by a consolidated joint venture. The above debt balance represents the Company’s pro rata share of 84.9%.

 

25


The Macerich Company

Supplemental Financial and Operating Information (Unaudited)

Development Pipeline Forecast

(Dollars in millions)

as of June 30, 2020

In-Process Developments and Redevelopments:

 

Property

 

Project Type

 

Total Cost(a)(b)
at 100%

 

Ownership
%

 

Total Cost(a)(b)
Pro Rata

  Pro Rata
Capitalized Costs(b)

Incurred-to-date
6/30/2020
   

Expected
Delivery(a)

 

Stabilized
Yield(a)(b)(c)

One Westside fka Westside Pavilion
Los Angeles, CA

  Redevelopment of an existing retail center into an approximately 584,000 sf Class A creative office campus leased solely to Google  

$500 - $550(d)

  25.0%  

$125 - $138(d)

  $ 62    

Q3 2022(e)

  7.50% - 8.00%(d)

 

(a)

Much of this information is estimated and may change from time to time. See the Company’s 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)

Includes $140 million ($35 million at the Company’s 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.

(e)

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.

 

26


The Macerich Company

Supplemental Financial and Operating Information (Unaudited)

Development Pipeline Forecast (Continued)

(Dollars in millions)

as of June 30, 2020

Pipeline of Former Sears Redevelopments:

   

Project Type

   Ownership      Total Cost (a)(b)
Pro rata
   Pro rata
Capitalized Costs
6/30/20
Incurred-to-Date(b)
     Stabilized
Yield(a)(b)(c)
  Retail Redevelopment       $75 - $90    $ 31      8.0% - 9.0%
  Mixed-Use Densification

 

   55 - 70      3      9.0% - 10.5%

(d)

  Future Phases       TBD      0      TBD
       

 

  

 

 

    
  Total      various      $130 - $160    $ 34     
       

 

  

 

 

    

 

   

Property

  

Description

   Expected
Delivery(e)
 
  Retail Redevelopment:   
(f)   Arrowhead Towne Center    Redevelop existing store with retail uses      TBD  
(f)   Chandler Fashion Center    Redevelop existing store for a Harkins entertainment concept and additional retail uses      TBD  
(f)   Deptford Mall    Redevelop existing store for Crunch Fitness, Dick’s Sporting Goods, Round 1 and additional retail uses      TBD  
(f)   South Plains Mall    Demolish box; site densification with retail and restaurants uses      TBD  
(f)   Vintage Faire Mall    Redevelop existing store for Dave & Busters, Dick’s Sporting Goods and additional retail uses      TBD  
  Wilton Mall    Redevelop existing store with a medical center/medical office use      Q1-2020  
  Mixed-Use Densification:   
(f)   Los Cerritos Center    Demolish box; site densification with residential, hotel and restaurant uses      TBD  
(f)   Washington Square    Demolish box; site densification with hotel, entertainment and restaurant uses      TBD  

 

 

(a)

Much of this information is estimated and may change from time to time. See the Company’s 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)

Future demand-driven development phases are possible at Los Cerritos Center and Washington Square.

(e)

Given the uncertainties resulting from the COVID-19 pandemic, the expected delivery dates for these projects are not currently determinable.

(f)

These former Sears stores are owned by a 50/50 joint venture between the Company and Seritage Growth Properties.

 

27


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 2020, 2019 and 2018 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, 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  

September 30, 2019

   $ 34.15      $ 27.54      $ 0.75  

December 31, 2019

   $ 31.77      $ 25.53      $ 0.75  

March 31, 2020

   $ 26.98      $ 5.49      $ 0.75  

June 30, 2020

   $ 13.18      $ 4.81      $ 0.50 (a) 

 

(a)

The dividend of $0.50 per share of the Company’s common stock declared on March 16, 2020, consisted of a combination of 80% shares of common stock and 20% in cash.

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
  

 

28