SANTA MONICA, Calif., Aug 12, 2002 /PRNewsire-FirstCall via Comtex/ -- The Macerich Company (NYSE: MAC) today announced results of operations for the quarter and six months ended June 30, 2002 which included funds from operations ("FFO") per share - diluted increasing to $.67 from $.66 for the second quarter of 2001 and FFO per share - diluted for the six months ended June 30, 2002 increasing to $1.37 compared to $1.31 for the comparable period in 2001.
Net income to common stockholders for the six months ended June 30, 2002 was $16.1 million or $.45 per share compared to $13.2 million or $.39 per share for the six months ended June 30, 2001. Net loss to common stockholders for the three months ended June 30, 2002 was $1.277 million, or ($.04) per share compared to net income of $6.8 million or $.20 per share for the three months ended June 30, 2001. These results include the second quarter write- off of the Company's investment in MerchantWired.
During the quarter fundamentals improved:
- Macerich signed 225,000 square feet of specialty store leases at average initial rents of $35.74 per square foot. First year rents on mall and freestanding store leases signed during the quarter were 31% higher than expiring rents on a comparable space basis.
- Portfolio occupancy increased to 92.9% up from 92.4% at June 30, 2001.
- Total tenant sales for the quarter ended June 30, 2002 were up 2.9% compared to the second quarter of 2001.
Commenting on results and recent events, Arthur Coppola, President and Chief Executive Officer of Macerich stated, "The quarter was highlighted by our acquisition of The Oaks, in Thousand Oaks, California and our agreement to acquire Westcor. Adding The Oaks and Westcor significantly upgrades our portfolio in terms of sales productivity, market dominance and from a human capital viewpoint the integration of the talented Westcor development and operating team further strengthens our stellar Macerich organization. The Westcor portfolio, plus The Oaks, will significantly expand our platform for growth in the Western United States."
Acquisition Activity
The Oaks-
On June 12, 2002, the Company announced the acquisition of The Oaks, a 1.1 million square foot super regional mall in Thousand Oaks. The mall has annual tenant shop sales of $437 per square foot and is anchored by Macy's, Macy's Men and Home Store, JC Penney, Robinsons-May and Robinsons-May Men's and Home Store. The purchase price was $152.5 million and was funded by a $108 million mortgage bearing interest at LIBOR plus 1.15%, plus cash and borrowings under the Company's line of credit.
Westcor-
On July 26, 2002, the Company completed the acquisition of Westcor Realty Limited Partnership and its affiliated entities ("Westcor"). The purchase price was $1.475 billion including the assumption of $733 million of debt and the issuance of approximately $72 million of convertible preferred operating partnership units at a price of $36.55. The balance of the purchase price was paid in cash which was provided primarily from a $380 million interim loan with a term of up to 18 months bearing interest at an average rate of LIBOR plus 3.25% and a $250 million term loan with a maturity of up to five years with an interest rate ranging from LIBOR plus 2.75% to LIBOR plus 3.00% depending on the Company's overall leverage.
The assets acquired include some of the leading retail assets in the country, including Scottsdale Fashion Square and Chandler Fashion Center in the Phoenix area and FlatIron Crossing in Colorado's Denver-Boulder area. The gross leasable area in the Westcor portfolio totals 15.6 million square feet. In addition, the Westcor portfolio includes two retail properties in Arizona that recently broke ground, as well as option rights for over 1,000 acres of valuable, well-situated undeveloped land.
Redevelopment Activity
At Queens Center the redevelopment and expansion continued with the ground breaking in June. The project will increase the size of the center from 620,000 square feet to approximately 1 million square feet. Completion is estimated in phases through late 2004.
At Lakewood Center Target commenced the demolition of the former Montgomery Wards location. Target plans to build a two-level Target store with a fall 2003 opening.
Bon Marche began construction of a new department store at Redmond Town Center.
At Southern Hills Mall, construction commenced for the addition of a new 60,000 square foot Scheel's Sporting goods Store scheduled to open in March 2003.
Financing Activity
Concurrent with the closing of Westcor, the Company replaced its $200 million line of credit with a new $425 million revolving line of credit. This increased line of credit has a three-year term plus a one-year extension. The interest rate fluctuates from LIBOR plus 1.75% to LIBOR plus 3.00% depending on the Company's overall leverage level. At closing the interest rate was 4.82%.
The Company is writing off its remaining investment in Merchant Wired of $8.9 million which is reflected in the net loss from unconsolidated entities on the Company's statement of operations.
2002 Earnings Estimates
The Company previously provided year 2002 FFO per share guidance in the range of $3.11 to $3.18. The Company is currently revising guidance upward to a range of $3.14 to $3.25.
Accounting for Stock Options
Effective January 1, 2002, the Company will be expensing the fair value of stock options granted under the Company's employee and director stock incentive plans. The Company will record the expense over the option vesting period, using the fair value at the date of the grant. The Company currently expects the impact to be approximately $.01 per share for 2002.
The Macerich Company is a fully integrated self-managed and self- administered real estate investment trust, which focuses on the acquisition, leasing, management and redevelopment of regional malls and community centers throughout the United States. The Company is the sole general partner and owns a 78% ownership interest in The Macerich Partnership, L.P. Macerich now owns interests in 56 regional malls and 21 community centers totaling approximately 58 million square feet. Additional information about The Macerich Company can be obtained from the Company's web site at www.macerich.com .
Investor Conference Call
The Company will provide an online Web simulcast and rebroadcast of its quarterly earnings conference call. The call will be available on The Macerich Company's website at www.macerich.com , through Vcall at www.vcall.com , and CCBN at www.ccbn.com . The call begins today, August 12, 2002 at 10:30 AM Pacific Time. To listen to the call, please go to any of these web sites at least 15 minutes prior to the call in order to register and download audio software if needed. An online replay will be available for 90 days after the call.
Note:
This release contains statements that constitute forward-looking
statements. Stockholders are cautioned that any such forward-looking statements
are not guarantees of future performance and involve risks, uncertainties and
other factors that may cause actual results, performance or achievements of the
Company to vary materially from those anticipated, expected or projected. Such
factors include, among others, general industry, economic and business
conditions, which will, among other things, affect demand for retail space or
retail goods, availability and creditworthiness of current and prospective
tenants, tenant bankruptcies, lease rates and terms, availability and cost of
financing and operating expenses; adverse changes in the real estate markets
including, among other things, competition from other companies, retail formats
and technology, risks of real estate development and redevelopment, acquisitions
and dispositions; governmental actions and initiatives; environmental and safety
requirements; and terrorist activities which could adversely affect all of the
above factors. The reader is directed to the Company's various filings with the
Securities and Exchange Commission, for a discussion of such risks and
uncertainties.
THE MACERICH COMPANY FINANCIAL HIGHLIGHTS (IN THOUSANDS, EXCEPT PER SHARE AMOUNTS) Results before SFAS 144 Impact of SFAS 144 Results of Operations: For the Three Months For the Three Months Ended June 30 Ended June 30 Unaudited 2002 2001 2002 2001 Minimum Rents 49,597 49,553 (10) (548) Percentage Rents 991 1,140 -- (35) Tenant Recoveries 26,313 27,364 -- (90) Other Income 2,217 2,634 -- (5) Total Revenues 79,118 80,691 (10) (678) Shopping center and operating expenses (c) 27,660 27,825 (6) (149) Depreciation and amortization 17,126 16,387 (87) General, administrative and other expenses 2,012 1,832 Interest expense 25,036 27,497 Gain (loss) on sale or writedown of assets (3,041) 132 508 Pro rata income (loss) of unconsolidated entities (c) (900) 6,625 Income before minority interest & extraordinary items 3,343 13,907 504 (442) Extraordinary loss on early extinguishment of debt -- 1 -- -- Income (loss) of the Operating Partnership from continuing operations 3,343 13,906 504 (442) Discontinued Operations: Gain (loss) on sale of asset -- -- (508) -- Income from discontinuing operations -- -- 4 442 Income before minority interest 3,343 13,906 -- -- Income (loss) allocated to minority interests (393) 2,249 -- -- Net income before preferred dividends 3,736 11,657 -- -- Dividends earned by preferred stockholders 5,013 4,831 -- -- Net income < loss > to common stockholders (1,277) 6,826 -- -- Average # of shares outstanding - basic 36,241 33,771 Average shares outstanding, - basic, assuming full conversion of OP Units (d) 47,393 44,924 Average shares outstanding - diluted for FFO (d)(e) 60,529 58,886 Per share income - diluted before extraordinary item (0.04) 0.20 Net income per share - basic (0.04) 0.20 Net income per share - diluted (0.04) 0.20 Dividend declared per share 0.55 0.53 Funds from operations "FFO" (b)(d) - basic 33,172 30,918 Funds from operations "FFO" (a)(b)(d) - diluted 40,547 38,704 FFO per share - basic (b)(d) 0.70 0.69 FFO per share - diluted (a)(b)(d) 0.67 0.66 % change in FFO - diluted 1.92% Results after SFAS 144 Results of Operations: For the Three Months Ended June 30 Unaudited 2002 2001 Minimum Rents 49,587 49,005 Percentage Rents 991 1,105 Tenant Recoveries 26,313 27,274 Other Income 2,217 2,629 -- -- Total Revenues 79,108 80,013 Shopping center and operating expenses (c) 27,654 27,676 Depreciation and amortization 17,126 16,300 General, administrative and other expenses 2,012 1,832 Interest expense 25,036 27,497 Gain (loss) on sale or writedown of assets (2,533) 132 Pro rata income (loss) of unconsolidated entities (c) (900) 6,625 Income before minority interest & extraordinary items 3,847 13,465 Extraordinary loss on early extinguishment of debt -- 1 Income (loss) of the Operating Partnership from continuing operations 3,847 13,464 Discontinued Operations: -- Gain (loss) on sale of asset (508) -- Income from discontinuing operations 4 442 Income before minority interest 3,343 13,906 Income (loss) allocated to minority interests (393) 2,249 Net income before preferred dividends 3,736 11,657 Dividends earned by preferred stockholders 5,013 4,831 Net income < loss > to common stockholders (1,277) 6,826 Average # of shares outstanding - basic 36,241 33,771 Average shares outstanding, - basic, assuming full conversion of OP Units (d) 47,393 44,924 Average shares outstanding - diluted for FFO (d)(e) 60,529 58,886 Per share income - diluted before extraordinary item (0.04) 0.20 Net income per share - basic (0.04) 0.20 Net income per share - diluted (0.04) 0.20 Dividend declared per share 0.55 0.53 Funds from operations "FFO" (b)(d) - basic 33,172 30,918 Funds from operations "FFO" (a)(b)(d) - diluted 40,547 38,704 FFO per share - basic (b) (d) 0.70 0.69 FFO per share- diluted (a)(b)(d) 0.67 0.66 % change in FFO - diluted 1.92% THE MACERICH COMPANY FINANCIAL HIGHLIGHTS (IN THOUSANDS, EXCEPT PER SHARE AMOUNTS) Results before SFAS 144 Impact of SFAS 144 Results of Operations: For the Six Months For the Six Months Ended June 30 Ended June 30 Unaudited 2002 2001 2002 2001 Minimum Rents 98,138 98,219 (415) (927) Percentage Rents 2,288 2,988 -- (40) Tenant Recoveries 51,439 52,166 (59) (173) Other Income 4,663 5,081 4 (12) Total Revenues 156,528 158,454 (470) (1,152) Shopping center and operating expenses (c) 53,416 51,977 (63) (250) Depreciation and amortization 33,750 32,491 (115) (174) General, administrative and other expenses 3,544 3,515 -- -- Interest expense 50,159 55,493 -- -- Gain < loss > on sale or writedown of assets 10,215 (188) (13,916) -- Pro rata income of unconsolidated entities (c) 5,406 12,681 -- -- Income before minority interest & extraordinary items 31,280 27,471 (14,208) (728) Extraordinary loss on early extinguishment of debt -- 187 -- -- Income of the Operating Partnership from continuing operations 31,280 27,284 (14,208) (728) Discontinued Operations: Gain on sale of asset -- -- 13,916 -- Income from discontinuing operations -- -- 292 728 Income before minority interest 31,280 27,284 -- -- Income allocated to minority interests 5,180 4,377 -- -- Net income before preferred dividends 26,100 22,907 -- -- Dividends earned by preferred stockholders 10,026 9,662 -- -- Net income < loss > to common stockholders 16,074 13,245 -- -- Average # of shares outstanding - basic 35,498 33,706 Average shares outstanding, - basic, assuming full conversion of OP Units (d) 46,651 44,860 Average shares outstanding - diluted for FFO (d)(e) 59,787 58,823 Per share income - diluted before extraordinary item 0.45 0.39 Net income per share - basic 0.45 0.39 Net income per share - diluted 0.45 0.39 Dividend declared per share 1.10 1.06 Funds from operations "FFO" (b)d) - basic 66,847 61,291 Funds from operations "FFO" (a)(b)(d) - diluted 81,680 76,812 FFO per share - basic(b) (d) 1.43 1.37 FFO per share - diluted(a)(b)(d) 1.37 1.31 % change in FFO - diluted 4.62% Results after SFAS 144 Results of Operations: For the Six Months Ended June 30 Unaudited 2002 2001 Minimum Rents 97,723 97,292 Percentage Rents 2,288 2,948 Tenant Recoveries 51,380 51,993 Other Income 4,667 5,069 Total Revenues 156,058 157,302 Shopping center and operating expenses ( c) 53,353 51,727 Depreciation and amortization 33,635 32,317 General, administrative and other expenses 3,544 3,515 Interest expense 50,159 55,493 Gain < loss > on sale or writedown of assets (3,701) (188) Pro rata income of unconsolidated entities (c) 5,406 12,681 Income before minority interest & extraordinary items 17,072 26,743 Extraordinary loss on early extinguishment of debt -- 187 Income of the Operating Partnership from continuing operations 17,072 26,556 Discontinued Operations: -- Gain on sale of asset 13,916 -- Income from discontinuing operations 292 728 Income before minority interest 31,280 27,284 Income allocated to minority interests 5,180 4,377 Net income before preferred dividends 26,100 22,907 Dividends earned by preferred stockholders 10,026 9,662 Net income < loss > to common stockholders 16,074 13,245 Average # of shares outstanding - basic 35,498 33,706 Average shares outstanding, - basic, assuming full conversion of OP Units (d) 46,651 44,860 Average shares outstanding - diluted for FFO (d)(e) 59,787 58,823 Per share income - diluted before extraordinary item 0.45 0.39 Net income per share - basic 0.45 0.39 Net income per share - diluted 0.45 0.39 Dividend declared per share 1.10 1.06 Funds from operations "FFO" (b)(d) - basic 66,847 61,291 Funds from operations "FFO" (a)(b)(d) - diluted 81,680 76,812 FFO per share - basic (b) (d) 1.43 1.37 FFO per share - diluted (a)(b)(d) 1.37 1.31 % change in FFO - diluted 4.62% (a) The Company issued $161,400 of convertible debentures in June and July, 1997. The debentures are convertible into common shares at a conversion price of $31.125 per share. On February 25, 1998 the Company sold $100,000 of convertible preferred stock and on June 17, 1998 another $150,000 of convertible preferred stock was issued. The convertible preferred shares can be converted on a 1 for 1 basis for common stock. These preferred shares are not assumed converted for purposes of net income per share as it would be antidilutive to that calculation. The weighted average preferred shares outstanding are assumed converted for purposes of FFO per diluted share as they are dilutive to that calculation. (b) Funds from Operations ("FFO") is defined as: "net income (computed in accordance with GAAP) excluding gains or losses from debt restructuring and sales of property, plus depreciation and amortization (excluding depreciation on personal property and amortization of loan and financial instrument cost) and after adjustments for unconsolidated entities. Adjustments for unconsolidated entities are calculated on the same basis." In accordance with the National Association of Real Estate Investment Trusts' (NAREIT) white paper on Funds from Operations, dated October, 1999, excluded from FFO are the earnings impact of cumulative effects of accounting changes and results of discontinued operations, both as defined by GAAP. (c) This includes, using the equity method of accounting, the Company's prorata share of the equity in income or loss of its unconsolidated joint ventures and for Macerich Management Company for all periods presented and for The Macerich Property Management Company through March 28, 2001. Effective March 28, 2001, the Macerich Property Management Company was converted from an unconsolidated preferred stock subsidiary into a taxable reit subsidiary ("TRS") and as of that date the results of the Macerich Property Management Company are now included in the consolidated results of The Macerich Company. (d) The Company has operating partnership units ("OP units"). Each OP unit can be converted into a share of Company stock. Conversion of the OP units has been assumed for purposes of calculating the FFO per share and the weighted average number of shares outstanding. June 30 Dec 31 Summarized Balance Sheet Information 2002 2001 (UNAUDITED) Cash and cash equivalents $59,605 $26,470 Investment in real estate, net (h) $2,024,896 $1,887,329 Investments in unconsolidated entities (i) $260,985 $278,526 Total Assets $2,442,001 $2,294,502 Mortgage and notes payable $1,515,767 $1,398,512 Convertible debentures $125,148 $125,148 June 30 June 30 Additional financial data as of: 2002 2001 Occupancy of centers (f) 92.90% 92.40% Comparable quarter change in same center sales (f) (g) 2.90% -1.00% Additional financial data for the six months ended: Acquisitions of property and equipment - including joint ventures prorata $160,216 $6,810 Redevelopment and expansions of centers - including joint ventures prorata $13,516 $19,216 Renovations of centers - including joint ventures at prorata $1,526 $3,960 Tenant allowances - including joint ventures at prorata $5,818 $8,266 Deferred leasing costs - including joint ventures at prorata $7,063 $6,043 (f) excludes redevelopment properties - Crossroads Mall - Boulder, and Parklane Mall. (g) includes mall and freestanding stores. (h) includes construction in process on wholly owned assets of $79,551 at June 30, 2002 and $71,161 at December 31, 2001. (i) the Company's prorata share of construction in process on unconsolidated entities of $7,242 at June 30, 2002 and $3,110 at December 31, 2001. THE MACERICH COMPANY FINANCIAL HIGHLIGHTS (IN THOUSANDS, EXCEPT PER SHARE AMOUNTS) For the Three Months For the Six Months PRORATA SHARE OF Ended June 30, Ended June 30, JOINT VENTURES Unaudited Unaudited (Unaudited) (All amounts in thousands)(All amounts in thousands) 2002 2001 2002 2001 Revenues: Minimum rents $26,955 $25,774 $53,372 $51,380 Percentage rents 617 675 1,760 1,979 Tenant recoveries 10,794 10,613 21,456 21,208 Management fee (c) 2,181 2,326 4,315 5,224 Other 572 1,029 1,331 1,820 Total revenues 41,119 40,417 82,234 81,611 Expenses: Shopping center expenses 13,347 13,427 26,707 26,164 Interest expense 10,616 11,680 21,388 23,901 Management company expense (c) 1,966 1,922 3,849 5,668 Depreciation and amortization 7,090 6,800 14,465 13,320 Total operating expenses 33,019 33,829 66,409 69,053 Gain (loss) on sale or writedown of assets (9,000) 37 (10,419) 123 Extraordinary gain < loss > on early extinguishment of debt -- -- -- -- Net income < loss > ($900) $6,625 $5,406 $12,681 For the Three Months For the Six Months RECONCILIATION OF Ended June 30, Ended June 30, NET INCOME TO FFO (All amounts in thousands)(All amounts in thousands) (UNAUDITED) (UNAUDITED) 2002 2001 2002 2001 Net income < loss > - available to common stockholders ($1,277) $6,826 $16,074 $13,245 Adjustments to reconcile net income to FFO - basic Minority interest (393) 2,249 5,180 4,377 Loss on early extinguishment of debt -- 1 -- 187 (Gain ) loss on sale of wholly owned assets 3,041 (132) (10,215) 188 (Gain) loss on sale or write-down of assets from unconsolidated entities (pro rata) 9,000 (37) 10,419 (123) Depreciation and amortization on wholly owned centers 17,126 16,387 33,750 32,491 Depreciation and amortization on joint ventures and from the management companies (pro rata) 7,090 6,800 14,465 13,320 Less: depreciation on personal property and amortization of loan costs and interest rate caps (1,415) (1,176) (2,826) (2,394) Total FFO - basic 33,172 30,918 66,847 61,291 Weighted average shares outstanding - basic (d) 47,393 44,924 46,651 44,860 Additional adjustment to arrive at FFO - diluted Interest expense and amortization of loan costs on the debentures (e) 2,362 2,955 4,807 5,859 Preferred stock dividends earned 5,013 4,831 10,026 9,662 Effect of employee/ director stock incentive plans FFO - diluted 40,547 38,704 81,680 76,812 Weighted average shares outstanding - diluted (d)(e) 60,529 58,886 59,787 58,823SOURCE:
The Macerich Company
CONTACT:
press, Arthur Coppola, President and Chief Executive Officer,
or Thomas E. O'Hern, Executive Vice President and Chief Financial Officer of
The Macerich Company, +1-310-394-6000
URL:
http://www.prnewswire.com
http://www.vcall.com
http://www.ccbn.com
http://www.macerich.com
Copyright (C) 2002 PR Newswire. All rights reserved.