SANTA MONICA, Calif.,
Results included:
-- During the quarter,
-- Mall tenant sales per square foot decreased 6.0% to
-- Mall occupancy at
-- FFO per share-diluted for the quarter ended
-- The Company has closed on loans or has commitments for over
Commenting on results,
Other factors impacting the quarter included
Financing Activity
Transactions completed in 2009 include the recent closing of a
During the quarter, the Company obtained a commitment for a
Upon completion of the above transactions, the Company will have
Earnings Guidance
Management is amending its prior FFO-per share guidance to reflect the
impact of issuing 90% of its dividend in stock. The new FFO guidance range
assumes the same total FFO but factors in new shares issued for the dividend.
The per-share FFO range is modified to
For the year ending December 31, 2009 Low End High End ------------------------------------- ------- -------- Estimated EPS $.50 $.80 Depreciation and amortization including pro rata share of joint ventures 3.75 3.75 ---- ---- Estimated diluted FFO per share $4.25 $4.55 ----- -----
The Company's 2009 earnings guidance is based upon its internal forecasting and planning process and on many assumptions including management's current view of market and economic conditions, including those specifically impacting the regional mall business. Due to the uncertainty in the timing and economics of dispositions and acquisitions of assets and joint venture interests, the guidance ranges do not include any potential impact from such dispositions or acquisitions.
The
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
The Company will publish a supplemental financial information package which will be available at www.macerich.com in the Investing Section. It will also be furnished to the SEC as part of a Current Report on Form 8-K.
Note: This release contains statements that constitute forward-looking
statements. Stockholders are cautioned that any such forward-looking
statements are not guarantees of future performance and involve risks,
uncertainties and other factors that may cause actual results, performance or
achievements of the Company to vary materially from those anticipated,
expected or projected. Such factors include, among others, general industry,
economic and business conditions, which will, among other things, affect
demand for retail space or retail goods, availability and creditworthiness of
current and prospective tenants, anchor or tenant bankruptcies, closures,
mergers or consolidations, lease rates and terms, interest rate fluctuations,
availability, 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, acquisitions and dispositions; the liquidity of
real estate investments, governmental actions and initiatives (including
legislative and regulatory changes); environmental and safety requirements;
and terrorist activities which could adversely affect all of the above
factors. The reader is directed to the Company's various filings with the
(See attached tables) THE MACERICH COMPANY FINANCIAL HIGHLIGHTS (IN THOUSANDS, EXCEPT PER SHARE AMOUNTS) Results of Operations: -------------- ------------- -------------- Results before Impact of Results after SFAS 144 (a) SFAS 144 (a) SFAS 144 (a) -------------- ------------- -------------- For the Three For the Three For the Three Months Months Months Ended March 31, Ended March 31, Ended March 31, --------------- --------------- --------------- Unaudited Unaudited --------- --------- 2009 2008 (b) 2009 2008 2009 2008 (b) ---- -------- ---- ---- ---- -------- Minimum rents $127,473 $132,087 $0 ($936) $127,473 $131,151 Percentage rents 2,801 2,704 - - 2,801 2,704 Tenant recoveries 64,910 67,831 - (175) 64,910 67,656 Management Companies' revenues 8,541 9,691 - - 8,541 9,691 Other income 7,054 6,613 - (284) 7,054 6,329 ----- ----- --- ---- ----- ----- Total revenues $210,779 $218,926 $0 ($1,395) $210,779 $217,531 -------------- -------- -------- -- ------- -------- -------- Shopping center and operating expenses 70,780 70,953 (10) (329) 70,770 70,624 Management Companies' operating expenses 23,431 18,344 - - 23,431 18,344 Income tax (benefit) provision (801) 301 - - (801) 301 Depreciation and amortization 64,911 61,127 - (473) 64,911 60,654 REIT general and administrative expenses 5,258 4,403 - - 5,258 4,403 Interest expense (b) 69,939 74,369 - - 69,939 74,369 Gain on early extinguishment of debt 22,474 - - - 22,474 - Gain on sale or write-down of assets 756 99,937 17 (99,263) 773 674 Equity in income of unconsolidated joint ventures (c) 15,926 22,298 - - 15,926 22,298 Income from continuing operations 16,417 111,664 27 (99,856) 16,444 11,808 Discontinued Operations: (Loss) gain on sale or disposition of assets - - (17) 99,263 (17) 99,263 (Loss) income from discontinued operations - - (6) 590 (6) 590 Total (loss) income from discontinued operations - - (23) 99,853 (23) 99,853 Net income 16,417 111,664 4 (3) 16,421 111,661 Less net income attributable to non-controlling interests 2,401 16,600 4 (3) 2,405 16,597 Net income attributable to The Macerich Company 14,016 95,064 - - 14,016 95,064 Less preferred dividends (d) - 2,454 - - - 2,454 Net income available to common stockholders 14,016 92,610 - - 14,016 92,610 -------------------- ------ ------ - - ------ ------ Average number of shares outstanding - basic 76,897 72,342 76,897 72,342 --------------------- ------ ------ ------ ------ Average shares outstanding, assuming full conversion of OP Units (e) 88,551 88,290 88,551 88,290 ------ ------ ------ ------ Average shares outstanding -Funds From Operations ("FFO") -diluted (d) (e) 88,551 88,290 88,551 88,290 ------------------- ------ ------ ------ ------ Per share income- diluted before discontinued operations - - $0.18 $0.12 ----------------- - - ----- ----- Net income per share-basic (b) $0.18 $1.27 $0.18 $1.27 ---------------- ----- ----- ----- ----- Net income per share-diluted (b) (d) (e) $0.18 $1.25 $0.18 $1.25 ------------------ ----- ----- ----- ----- Dividend declared per share $0.80 $0.80 $0.80 $0.80 ----------------- ----- ----- ----- ----- FFO - basic (b) (e) (f) $102,839 $90,011 $102,839 $90,011 -------------------- -------- ------- -------- ------- FFO - diluted (b) (d) (e) (f) $102,839 $92,465 $102,839 $92,465 --------------------- -------- ------- -------- ------- FFO per share- basic (b) (e) (f) $1.16 $1.06 $1.16 $1.06 ------------------ ----- ----- ----- ----- FFO per share- diluted (b) (d) (e) (f) $1.16 $1.05 $1.16 $1.05 ---------------- ----- ----- ----- ----- (a) SFAS No. 144, "Accounting for the Impairment or Disposal of Long-Lived Assets" ("SFAS 144") addresses financial accounting and reporting for the impairment or disposal of long-lived assets. The following dispositions impacted the results for the three months endedMarch 31, 2009 and 2008: OnApril 25, 2005 , in connection with the acquisition ofWilmorite Holdings, L.P. and its affiliates, the Company issued as part of the consideration participating and non-participating convertible preferred units in MACWH, LP. On January 1, 2008, a subsidiary of the Company, at the election of the holders, redeemed approximately 3.4 million participating convertible preferred units in exchange for the distribution of the interests in the entity which held that portion of the Wilmorite portfolio that consisted of Eastview Commons, Eastview Mall, Greece Ridge Center, Marketplace Mall and Pittsford Plaza ("Rochester Properties"). This exchange is referred to as the "Rochester Redemption." As a result of the Rochester Redemption, the Company recorded a gain of$99.3 million for the period endedMarch 31, 2008 and classified the gain to discontinued operations. OnDecember 19, 2008 , the Company sold the fee simple and/or ground leasehold interests in three freestandingMervyn's buildings to thePacific Premier Retail Trust joint venture for$43.4 million . As a result of the sale, the Company has classified the results of operations to discontinued operations for all periods presented. (b) OnJanuary 1, 2009 , the Company adopted FASB Staff Position APB 14-1, "Accounting for Convertible Debt Instruments That May Be Settled Upon Conversion (Including Partial Cash Settlement)" (FSP APB 14-1"). As a result, the Company retrospectively applied FSP APB 14-1 to the three months endedMarch 31, 2008 resulting in an increase to interest expense of$3.5 million and a decrease to net income available to common stockholders of$3.0 million , or$0.04 per share. Additionally, the impact of FSP APB 14-1 decreased FFO for the three months endedMarch 31, 2008 by$3.5 million , or$0.04 per share. (c) This includes, using the equity method of accounting, the Company's pro rata share of the equity in income or loss of its unconsolidated joint ventures for all periods presented. (d) OnFebruary 25, 1998 , the Company sold$100 million of convertible preferred stock representing 3.627 million shares. The convertible preferred shares were convertible on a 1 for 1 basis for common stock. The preferred shares were assumed converted for purposes of net income per share - diluted for the three months endedMarch 31, 2008 . The weighted average preferred shares are assumed converted for purposes of FFO per share - diluted for 2008. OnOctober 18, 2007 , 560,000 shares of convertible preferred stock were converted to common shares. Additionally, onMay 6, 2008 ,May 8, 2008 andSeptember 18, 2008 , 684,000, 1,338,860 and 1,044,271 shares of convertible preferred stock were converted to common shares, respectively. As ofMarch 31, 2009 , there was no convertible preferred stock outstanding. (e)The Macerich Partnership, LP (the "Operating Partnership" or the "OP") has operating partnership units ("OP units"). Each OP unit can be converted into a share of Company common stock. Conversion of the OP units not owned by the Company has been assumed for purposes of calculating the FFO per share and the weighted average number of shares outstanding. The computation of average shares for FFO - diluted includes the effect of share and unit-based compensation plans and convertible senior notes using the treasury stock method. It also assumes conversion ofMACWH, LP preferred and common units to the extent they are dilutive to the calculation. (f) The Company uses FFO in addition to net income to report its operating and financial results and considers FFO and FFO-diluted as supplemental measures for the real estate industry and a supplement to Generally Accepted Accounting Principles (GAAP) measures. NAREIT defines FFO as net income (loss) (computed in accordance with GAAP), excluding gains (or losses) from extraordinary items and sales of depreciated operating properties, plus real estate related depreciation and amortization and after adjustments for unconsolidated partnerships and joint ventures. Adjustments for unconsolidated partnerships and joint ventures are calculated to reflect FFO on the same basis. FFO and FFO on a fully diluted basis are useful to investors in comparing operating and financial results between periods. This is especially true since FFO excludes real estate depreciation and amortization, as the Company believes real estate values fluctuate based on market conditions rather than depreciating in value ratably on a straight-line basis over time. FFO on a fully diluted basis is one of the measures investors find most useful in measuring the dilutive impact of outstanding convertible securities. FFO does not represent cash flow from operations as defined by GAAP, should not be considered as an alternative to net income as defined by GAAP and is not indicative of cash available to fund all cash flow needs. FFO as presented may not be comparable to similarly titled measures reported by other real estate investment trusts. Gains or losses on sales of undepreciated assets and the impact of SFAS 141 have been included in FFO. The inclusion of gains on sales of undepreciated assets increased FFO for the three months endedMarch 31, 2009 and 2008 by$1.3 million and$1.6 million , respectively, or by$0.01 per share and$0.02 per share, respectively. Additionally, SFAS 141 increased FFO for the three months endedMarch 31, 2009 and 2008 by$4.1 million and$4.6 million , respectively, or by$0.05 per share and$0.05 per share, respectively. THE MACERICH COMPANY FINANCIAL HIGHLIGHTS (IN THOUSANDS, EXCEPT PER SHARE AMOUNTS) Pro rata share of joint ventures: -------------------- For the Three Months Ended March 31, -------------------- Unaudited ----------- 2009 2008 ---- ---- Revenues: Minimum rents $67,036 $66,310 Percentage rents 1,397 2,262 Tenant recoveries 32,055 32,596 Other 3,435 4,158 ----- ----- Total revenues $103,923 $105,326 -------- -------- Expenses: Shopping center and operating expenses 35,979 35,925 Interest expense 25,502 26,259 Depreciation and amortization 26,501 22,279 ------ ------ Total operating expenses 87,982 84,463 ------ ------ Gain on sale or write-down of assets 8 1,319 Equity in (loss) income of joint ventures (23) 116 --- --- Net income $15,926 $22,298 ------- ------- Reconciliation of Net Income to FFO (f): -------------------- For the Three Months Ended March 31, ------------------- Unaudited ----------- 2009 2008 ---- ---- Net income - available to common stockholders $14,016 $92,610 Adjustments to reconcile net income to FFO - basic Non-controlling interests in OP 2,124 16,074 Gain on sale or write-down of consolidated assets (756) (99,937) plus gain on undepreciated asset sales- consolidated assets 1,354 333 plus non-controlling interests share of gain on sale or write-down of consolidated joint ventures - 341 less write-down of consolidated assets (582) - Gain on sale or write-down of assets from unconsolidated entities (pro rata share) (8) (1,319) plus gain on undepreciated asset sales- unconsolidated entities (pro rata share) - 1,319 Depreciation and amortization on consolidated assets 64,911 61,127 Less depreciation and amortization allocable to non-controlling interests on consolidated joint ventures (1,067) (573) Depreciation and amortization on joint ventures (pro rata) 26,501 22,279 Less: depreciation on personal property (3,654) (2,243) ------ ------ Total FFO - basic 102,839 90,011 Additional adjustment to arrive at FFO - diluted Preferred stock dividends earned - 2,454 - ----- Total FFO - diluted $102,839 $92,465 -------- ------- Reconciliation of EPS to FFO per diluted share: -------------------- For the Three Months Ended March 31, -------------------- Unaudited ----------- 2009 2008 ---- ---- Earnings per share - diluted $0.18 $1.25 Per share impact of depreciation and amortization of real estate 0.98 0.95 Per share impact of (gain) loss on sale or write- down of depreciated assets - (1.17) Per share impact of preferred stock not dilutive to EPS - 0.02 --- ---- FFO per share - diluted $1.16 $1.05 ----- ----- THE MACERICH COMPANY FINANCIAL HIGHLIGHTS (IN THOUSANDS, EXCEPT PER SHARE AMOUNTS) -------------------- Reconciliation of Net Income to EBITDA: For the Three Months Ended March 31, -------------------- Unaudited ----------- 2009 2008 ---- ---- Net income - available to common stockholders $14,016 $92,610 Interest expense - consolidated assets 69,939 74,369 Interest expense - unconsolidated entities (pro rata) 25,502 26,259 Depreciation and amortization - consolidated assets 64,911 61,127 Depreciation and amortization - unconsolidated entities (pro rata) 26,501 22,279 Non-controlling interests in OP 2,124 16,074 Less: Interest expense and depreciation and amortization allocable to non-controlling interests on consolidated joint ventures (1,488) (759) Gain on early extinguishment of debt (22,474) - Gain on sale or write-down of assets - consolidated assets (756) (99,937) Gain on sale or write-down of assets - unconsolidated entities (pro rata) (8) (1,319) Add: Non-controlling interests share of gain on sale of consolidated joint ventures - 341 Income tax expense (benefit) (801) 301 Distributions on preferred units 243 276 Preferred dividends - 2,454 -------- -------- EBITDA (g) $177,709 $194,075 -------- -------- Reconciliation of EBITDA to Same Centers - Net Operating Income ("NOI"): -------------------- For the Three Months Ended March 31, -------------------- Unaudited ----------- 2009 2008 ---- ---- EBITDA (g) $177,709 $194,075 Add: REIT general and administrative expenses 5,258 4,403 Management Companies' revenues (8,541) (9,691) Management Companies' operating expenses 23,431 18,344 Lease termination income of comparable centers (1,557) (2,523) EBITDA of non-comparable centers (22,060) (30,155) -------- -------- Same Centers - NOI (h) $174,240 $174,453 -------- -------- (g) EBITDA represents earnings before interest, income taxes, depreciation, amortization, minority interest, extraordinary items, gain (loss) on sale of assets and preferred dividends and includes joint ventures at their pro rata share. Management considers EBITDA to be an appropriate supplemental measure to net income because it helps investors understand the ability of the Company to incur and service debt and make capital expenditures. EBITDA should not be construed as an alternative to operating income as an indicator of the Company's operating performance, or to cash flows from operating activities (as determined in accordance with GAAP) or as a measure of liquidity. EBITDA, as presented, may not be comparable to similarly titled measurements reported by other companies. (h) The Company presents same-center NOI because the Company believes it is useful for investors to evaluate the operating performance of comparable centers. Same-center NOI is calculated using total EBITDA and subtracting out EBITDA from non-comparable centers and eliminating the management companies and the Company's general and administrative expenses. Same center NOI excludes the impact of straight-line and SFAS 141 adjustments to minimum rents.
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