MAC Macerich Co

SANTA MONICA, Calif., Aug. 3 /PRNewswire-FirstCall/ -- The Macerich Company (NYSE:MAC) today announced results of operations for the quarter ended June 30, 2006 which included net income available to common stockholders of $25.7 million or $.36 per share-diluted compared to $6.7 million or $.11 per share-diluted for the quarter ended June 30, 2005. For the six months ended June 30, 2006, net income increased to $33.1 million compared to $24.9 million for the six months ended June 30, 2005. Funds from operations ("FFO") diluted was $85.3 million or $.96 per share compared to $77.0 million or $1.00 per share for the quarter ended June 30, 2005. For the six months ended June 30, 2006, FFO-diluted was $175.4 million compared to $153.0 million for the six months ended June 30, 2005. The Company's definition of FFO is in accordance with the definition provided by the National Association of Real Estate Investment Trusts ("NAREIT"). A reconciliation of net income to FFO and net income per common share-diluted ("EPS") to FFO per share-diluted is included in the financial tables accompanying this press release. Recent Highlights: * During the quarter, Macerich signed 398,000 square feet of specialty store leases at average initial rents of $41.14 per square foot. Starting base rent on new lease signings was 24.5% higher than the expiring base rent. * Total same center tenant sales, for the quarter ended June 30, 2006, were up 4.4% compared to sales for the quarter ended June 30, 2005. * Portfolio occupancy at June 30, 2006 was 92.1% compared to 92.3% at June 30, 2005. On a same center basis, occupancy was 92.1% at June 30, 2006 compared to 92.6% at June 30, 2005. * In June, Macerich sold Scottsdale 101 for a total price of $117.6 million. In late July, Greeley Mall, Holiday Village Mall, and Parklane Mall were also sold for a combined sale price of $105 million. The Macerich share of total gain on sale of these assets is in excess of $60 million. * In July, Macerich upsized its line of credit from $1.0 billion to $1.5 billion. The average borrowing rate was reduced by .25% to 1.15% over LIBOR and the maturity was extended to 2010. Commenting on results, Arthur Coppola president and chief executive officer of Macerich stated, "The quarter was highlighted by improvement of our balance sheet through continued refinancing activity and sale of non-core assets. The recent sale of four such non-core assets continues our strategy of recycling and redeploying our capital. The strengthening of our balance sheet leaves us very well positioned to take advantage of the pipeline of development and redevelopment opportunities in our existing portfolio. Although our results were adversely impacted by the increase in short term interest rates compared to a year ago, our core operations continue to be strong. Occupancy remained high, leasing spreads and the volume of leasing were excellent and mall tenant sales growth continues at a healthy level. " Redevelopment and Development Activity The opening of the first phase of Twenty-Ninth Street, an 877,000 square foot shopping district in Boulder, Colorado, is planned for October 12 with the balance of the project scheduled for completion in the spring 2007. The project is 75% leased with another 15% of the space committed. Tenants include Ann Taylor Loft, Apple, Bath and Body Works, Borders, California Pizza Kitchen, Century Theatres, Coldwater Creek, Home Depot, J. Jill, Macy's, Muttropolis, Puma, Purple Martini, Victoria's Secret and Wild Oats Market. Construction began on the 435,000 square foot Village at Flagstaff Mall, a 45 acre large format and lifestyle expansion of Flagstaff Mall. The project is expected to be completed in phases starting in the fall of 2007. At Westside Pavilion in Los Angeles, construction continues on the redevelopment of the western portion of the center that will include a 104,000 square foot state of the art Landmark Theatre, a Barnes & Noble and restaurants. The estimated completion of the redevelopment is Fall 2007. In February, construction began on the SanTan Village regional shopping center in Gilbert, Arizona. The center is an outdoor open air streetscape project planned to contain in excess of 1.2 million square feet on 120 acres. The center will be anchored by Dillard's, Harkins Theatres and will contain a lifestyle shopping district featuring retail, office and restaurants. Additional tenants include American Eagle Outfitters, Ann Taylor Loft, Borders, Charlotte Russe, Chico's, Coldwater Creek, J. Jill, Lucy, Pac Sun and Soma. The project is scheduled to open in phases starting in the fall of 2007, with the retail phases expected to be completed by late 2008. Asset Sales Macerich continued its strategy of selling non-core assets with the June sale of Scottsdale 101, a power center located in Phoenix, Arizona, for $117.6 million. Macerich owned 46% of the asset. The center was developed by the Westcor subsidiary of Macerich with completion in 2004. In July, Holiday Village Mall, Greeley Mall and Parklane Mall were sold for an aggregate total purchase price of $105 million. In addition, the sale of Great Falls Marketplace is scheduled to close in August. It is anticipated that the gain on the sale of these four assets will exceed $48 million. These centers totaled 1.6 million square feet and averaged $239 per square foot in annual tenant sales. The average capitalization rate for the above sales is approximately 7.5%. Financing Activity The Company's line of credit was upsized from $1.0 billion to $1.5 billion in July. The borrowing spread was reduced by .25% to 1.15% over LIBOR at the current leverage level. The maturity was extended from July 2007 to April 2010. In July, a $61 million, 6.625% fixed rate, 10-year loan was placed on Crossroads Mall. On April 19, a $115 million loan was placed on the Centre at Salisbury. The loan is a ten-year fixed rate loan bearing interest at 5.789%. The proceeds of the above loans were used primarily to pay-down floating rate debt. At the Twenty-Ninth Street development, a $115 million floating rate construction loan closed in June. The initial floating interest rate is LIBOR plus 1.25% for a term of up to three years. Earnings Guidance Management is revising upward its guidance for EPS and reducing its guidance range for FFO per share for 2006. Revised guidance for 2006 and reconciliation of EPS to FFO per share and to EBITDA per share: Range per share: Fully Diluted EPS $1.73 - $1.83 Plus: Real Estate Depreciation and Amortization 3.71 - 3.71 Less: gain on sales of depreciated assets (.89) - (.89) Less: impact of preferred stock (dilutive to FFO) (.10) - (.10) Fully Diluted FFO per share $4.45 - $4.55 Plus: Interest Expense per share 4.32 - 4.32 Plus: Effect of preferred stock dividends .39 - .39 Plus: other items .13 - .13 EBITDA per share $9.29 - $9.39 This range is based on many assumptions, including the following: Management expects 2006 same center EBITDA to grow at a 3.0% to 3.5% rate compared to 2005 results. 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's original guidance was based on the forward LIBOR curve at the date of the original guidance and assumed short-term LIBOR interest rates would increase to 5.00% by year-end 2006. The new guidance range assumes LIBOR will reach 5.70% by year-end 2006. The above guidance also reflects the impact on EPS and FFO of the sale of Holiday Village, Greeley Mall, Great Falls Marketplace, Parklane Mall and Scottsdale 101. The guidance is based on management's current view of the current market conditions in the regional mall business. Due to the uncertainty in the timing and economics of acquisitions and dispositions, the guidance ranges do not include any potential mall acquisitions or dispositions other than those that have closed or are under contract as of August 3, 2006. The Company is not able to assess at this time the potential impact of such exclusions on future EPS and FFO. The Macerich Company is a fully integrated self-managed and self-administered real estate investment trust, which focuses on the acquisition, leasing, management, development and redevelopment of regional malls throughout the United States. The Company is the sole general partner and owns an 84% ownership interest in The Macerich Partnership, L.P. Macerich now owns approximately 79 million square feet of gross leaseable area consisting primarily of interests in 73 regional malls. Additional information about The Macerich Company can be obtained from the Company's web site at http://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 http://www.macerich.com/ and through CCBN at http://www.earnings.com/. The call begins today, August 3, 2006 at 10:30 AM Pacific Time. To listen to the call, please go to any of these web sites at least 15 minutes prior to the call in order to register and download audio software if needed. An online replay at http://www.macerich.com/ will be available for one year after the call. Note: This release contains statements that constitute forward-looking statements. Stockholders are cautioned that any such forward-looking statements are not guarantees of future performance and involve risks, uncertainties and other factors that may cause actual results, performance or achievements of the Company to vary materially from those anticipated, expected or projected. Such factors include, among others, general industry, economic and business conditions, which will, among other things, affect demand for retail space or retail goods, availability and creditworthiness of current and prospective tenants, anchor or tenant bankruptcies, closures, mergers or consolidations, lease rates and terms, interest rate fluctuations, availability and cost of financing and operating expenses; adverse changes in the real estate markets including, among other things, competition from other companies, retail formats and technology, risks of real estate development and redevelopment, acquisitions and dispositions; governmental actions and initiatives (including legislative and regulatory changes); environmental and safety requirements; and terrorist activities which could adversely affect all of the above factors. The reader is directed to the Company's various filings with the Securities and Exchange Commission, including the Annual Report on Form 10-K for the year ended December 31, 2005, for a discussion of such risks and uncertainties. (See attached tables) THE MACERICH COMPANY FINANCIAL HIGHLIGHTS (IN THOUSANDS, EXCEPT PER SHARE AMOUNTS) Results before Impact of SFAS 144(e) SFAS 144(e) Results of Operations: For the Three Months For the Three Months Ended June 30, Ended June 30, Unaudited 2006 2005 2006 2005 Minimum Rents $127,483 $116,657 ($1,554) ($1,937) Percentage Rents 2,754 3,068 -- -- Tenant Recoveries 65,932 57,172 (400) (577) Management Companies Revenues 7,369 6,164 -- -- Other Income 6,341 6,034 (91) (75) Total Revenues 209,879 189,095 (2,045) (2,589) Shopping center and operating expenses 70,151 59,687 (721) (971) Management Companies' operating expenses 12,125 13,329 -- -- Income tax expense < benefit > 218 (529) -- -- Depreciation and amortization 59,411 54,173 -- (808) General, administrative and other expenses 3,292 3,865 -- -- Interest expense 71,188 61,718 (666) (930) Loss on early extinguishment of debt -- -- -- -- Gain (loss) on sale or writedown of assets 62,961 (141) (62,961) -- Pro rata income (loss) of unconsolidated entities (c) 17,861 16,338 -- -- Minority interests in consolidated joint ventures 37,904 255 (37,363) 56 Income (loss) of the Operating Partnership from continuing operations 36,412 12,794 (26,256) 64 Discontinued Operations: Gain (loss) on sale of asset -- -- 25,952 -- Income from discontinued operations -- -- 304 (64) Income before minority interests of OP 36,412 12,794 -- -- Income allocated to minority interests of OP 4,770 1,480 -- -- Net income before preferred dividends 31,642 11,314 -- -- Preferred dividends and distributions (a) 5,970 4,566 -- -- Net income to common stockholders $25,672 $6,748 $0 $0 Average number of shares outstanding - basic 71,458 59,099 Average shares outstanding, assuming full conversion of OP Units (d) 85,023 73,616 Average shares outstanding - diluted for FFO (d) 88,650 77,244 Per share income - diluted before discontinued operations -- -- Net income per share - basic $0.36 $0.11 Net income per share - diluted $0.36 $0.11 Dividend declared per share $0.68 $0.65 Funds from operations "FFO" (b)(d) - basic $82,860 $74,707 Funds from operations "FFO" (a)(b)(d) - diluted $85,327 $77,065 FFO per share - basic (b)(d) $0.98 $1.02 FFO per share - diluted (a)(b)(d) $0.96 $1.00 THE MACERICH COMPANY FINANCIAL HIGHLIGHTS (IN THOUSANDS, EXCEPT PER SHARE AMOUNTS) Results after SFAS 144 (e) Results of Operations: For the Three Months Ended June 30, Unaudited 2006 2005 Minimum Rents $125,929 $114,720 Percentage Rents 2,754 3,068 Tenant Recoveries 65,532 56,595 Management Companies Revenues 7,369 6,164 Other Income 6,250 5,959 Total Revenues 207,834 186,506 Shopping center and operating expenses 69,430 58,716 Management Companies' operating expenses 12,125 13,329 Income tax expense < benefit > 218 (529) Depreciation and amortization 59,411 53,365 General, administrative and other expenses 3,292 3,865 Interest expense 70,522 60,788 Loss on early extinguishment of debt -- -- Gain (loss) on sale or writedown of assets -- (141) Pro rata income (loss) of unconsolidated entities (c) 17,861 16,338 Minority interests in consolidated joint ventures 541 311 Income (loss) of the Operating Partnership from continuing operations 10,156 12,858 Discontinued Operations: Gain (loss) on sale of asset 25,952 -- Income from discontinued operations 304 (64) Income before minority interests of OP 36,412 12,794 Income allocated to minority interests of OP 4,770 1,480 Net income before preferred dividends 31,642 11,314 Preferred dividends and distributions(a) 5,970 4,566 Net income to common stockholders $25,672 $6,748 Average number of shares outstanding - basic 71,458 59,099 Average shares outstanding, assuming full conversion of OP Units (d) 85,023 73,616 Average shares outstanding - diluted for FFO (d) 88,650 77,244 Per share income - diluted before discontinued operations $0.05 $0.11 Net income per share - basic $0.36 $0.11 Net income per share - diluted $0.36 $0.11 Dividend declared per share $0.68 $0.65 Funds from operations "FFO" (b)(d) - basic $82,860 $74,707 Funds from operations "FFO" (a)(b)(d) - diluted $85,327 $77,065 FFO per share- basic (b)(d) $0.98 $1.02 FFO per share- diluted (a)(b)(d) $0.96 $1.00 Results before Impact of SFAS 144 (e) SFAS 144(e) Results of Operations: For the Six Months For the Six Months Ended June 30, Ended June 30, Unaudited 2006 2005 2006 2005 Minimum Rents $261,069 $211,453 ($3,623) ($3,717) Percentage Rents 5,720 5,873 (6) (4) Tenant Recoveries 133,338 103,365 (849) (949) Management Companies Revenues 14,626 11,441 -- -- Other Income 13,289 11,180 (163) (126) Total Revenues 428,042 343,312 (4,641) (4,796) Shopping center and operating expenses 138,278 108,345 (1,589) (1,700) Management Companies' operating expenses 26,839 24,377 -- -- Income tax (benefit) expense (315) (1,039) -- -- Depreciation and amortization 122,951 91,826 (866) (1,623) General, administrative and other expenses 6,990 6,517 -- -- Interest expense 143,153 104,282 (1,481) (1,537) Loss on early extinguishment of debt 1,782 -- -- -- Gain (loss) on sale or writedown of assets 62,460 1,464 (62,961) (297) Pro rata income (loss) of unconsolidated entities (c) 38,877 27,584 -- -- Minority interests in consolidated joint ventures 38,407 561 (37,403) 5 Income (loss) of the Operating Partnership from continuing operations 51,294 37,491 (26,263) (238) Discontinued Operations: Gain (loss) on sale of asset -- -- 25,952 297 Income from discontinued operations -- -- 311 (59) Income before minority interests of OP 51,294 37,491 -- -- Income allocated to minority interests of OP 6,230 5,679 -- -- Net income before preferred dividends 45,064 31,812 -- -- Preferred dividends and distributions (a) 11,939 6,923 -- -- Net income to common stockholders $33,125 $24,889 $0 $0 Average number of shares outstanding - basic 70,152 58,984 Average shares outstanding, assuming full conversion of OP Units (d) 83,807 73,452 Average shares outstanding - diluted for FFO (d) 87,434 77,080 Per share income - diluted before discontinued operations -- -- Net income per share - basic $0.47 $0.42 Net income per share - diluted $0.47 $0.42 Dividend declared per share $1.36 $1.30 Funds from operations "FFO" (b)(d)- basic $170,504 $148,303 Funds from operations "FFO" (a)(b)(d) - diluted $175,437 $153,018 FFO per share - basic (b)(d) $2.04 $2.03 FFO per share - diluted (a)(b)(d) $2.01 $1.99 Results after SFAS 144 (e) Results of Operations: For the Six Months Ended June 30, Unaudited 2006 2005 Minimum Rents $257,446 $207,736 Percentage Rents 5,714 5,869 Tenant Recoveries 132,489 102,416 Management Companies Revenues 14,626 11,441 Other Income 13,126 11,054 Total Revenues 423,401 338,516 Shopping center and operating expenses 136,689 106,645 Management Companies' operating expenses 26,839 24,377 Income tax (benefit) expense (315) (1,039) Depreciation and amortization 122,085 90,203 General, administrative and other expenses 6,990 6,517 Interest expense 141,672 102,745 Loss on early extinguishment of debt 1,782 -- Gain (loss) on sale or writedown of assets (501) 1,167 Pro rata income (loss) of unconsolidated entities (c) 38,877 27,584 Minority interests in consolidated joint ventures 1,004 566 Income (loss) of the Operating Partnership from continuing operations 25,031 37,253 Discontinued Operations: Gain (loss) on sale of asset 25,952 297 Income from discontinued operations 311 (59) Income before minority interests of OP 51,294 37,491 Income allocated to minority interests of OP 6,230 5,679 Net income before preferred dividends 45,064 31,812 Preferred dividends and distributions (a) 11,939 6,923 Net income to common stockholders $33,125 $24,889 Average number of shares outstanding - basic 70,152 58,984 Average shares outstanding, assuming full conversion of OP Units (d) 83,807 73,452 Average shares outstanding - diluted for FFO (d) 87,434 77,080 Per share income - diluted before discontinued operations $0.16 $0.42 Net income per share - basic $0.47 $0.42 Net income per share - diluted $0.47 $0.42 Dividend declared per share $1.36 $1.30 Funds from operations "FFO" (b)(d) - basic $170,504 $148,303 Funds from operations "FFO" (a)(b)(d) - diluted $175,437 $153,018 FFO per share - basic (b)(d) $2.04 $2.03 FFO per share - diluted (a)(b)(d) $2.01 $1.99 (a) On February 25, 1998, the Company sold $100,000 of convertible preferred stock representing 3.627 million shares. 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 for 2006 and 2005 as they would be antidilutive to those calculations. The weighted average preferred shares outstanding are assumed converted for purposes of FFO per diluted share as they are dilutive to that calculation for all periods presented. (b) The Company uses FFO in addition to net income to report its operating and financial results and considers FFO and FFO-diluted as supplemental measures for the real estate industry and a supplement to Generally Accepted Accounting Principles (GAAP) measures. NAREIT defines FFO as net income (loss) (computed in accordance with GAAP), excluding gains (or losses) from extraordinary items and sales of depreciated operating properties, plus real estate related depreciation and amortization and after adjustments for unconsolidated partnerships and joint ventures. Adjustments for unconsolidated partnerships and joint ventures are calculated to reflect FFO on the same basis. FFO and FFO on a fully diluted basis are useful to investors in comparing operating and financial results between periods. This is especially true since FFO excludes real estate depreciation and amortization, as the Company believes real estate values fluctuate based on market conditions rather than depreciating in value ratably on a straight-line basis over time. FFO on a fully diluted basis is one of the measures investors find most useful in measuring the dilutive impact of outstanding convertible 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. Effective January 1, 2003, gains or losses on sale 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 and six months ended June 30, 2006 and 2005 by $3.5 million, $3.6 million, $0.3 million and $1.8 million, respectively, or by $.04 per share, $.04 per share, $.00 per share and $.02 per share, respectively. Additionally, SFAS 141 increased FFO for the three and six months ended June 30, 2006 and 2005 by $4.3 million, $8.9 million, $3.7 million and $6.1 million, respectively or by $.05 per share, $.10 per share, $.05 per share and $.08 per share, respectively. (c) This includes, using the equity method of accounting, the Company's prorata share of the equity in income or loss of its unconsolidated joint ventures for all periods presented. (d) 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 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 outstanding stock options and restricted stock using the treasury method. Also assumes conversion of MACWH, LP units to the extent they are dilutive to the calculation. For the three and six months ended June 30, 2006 and 2005, the MACWH, LP units were antidilutive to FFO. (e) In October 2001, the FASB issued SFAS No. 144, "Accounting for the Impairment or Disposal of Long-Lived Assets" ("SFAS 144"). SFAS 144 addresses financial accounting and reporting for the impairment or disposal of long-lived assets. The Company adopted SFAS 144 on January 1, 2002. On January 5, 2005, the Company sold Arizona Lifestyle Galleries. The sale of this property resulted in a gain on sale of $0.3 million. On June 9, 2006, Scottsdale 101 in Arizona was sold. The sale of this property resulted in a gain on sale, at the Company's prorata share, of $26.0 million. Additionally, the Company reclassified the results of operations for the three and six months ended June 30, 2006 and 2005 to discontinued operations. THE MACERICH COMPANY FINANCIAL HIGHLIGHTS (IN THOUSANDS, EXCEPT PER SHARE AMOUNTS) Summarized Balance Sheet Information June 30, Dec 31, 2006 2005 (UNAUDITED) Cash and cash equivalents $45,489 $155,113 Investment in real estate, net (h) $5,644,885 $5,438,496 Investments in unconsolidated entities (i) $995,374 $1,075,621 Total Assets $7,185,246 $7,178,944 Mortgage and notes payable $4,764,177 $5,424,730 Pro rata share of debt on unconsolidated entities $1,591,938 $1,438,960 Total common shares outstanding at quarter end: 71,459 59,942 Total preferred shares outstanding at quarter end: 3,627 3,627 Total partnership/preferred units outstanding at quarter end: 16,404 16,647 June 30, June 30, Additional financial data as of: 2006 2005 Occupancy of centers (f) 92.10% 92.30% Comparable quarter change in same center sales (f)(g) 4.40% 6.00% Additional financial data for the six months ended: Acquisitions of property and equipment - including joint ventures prorata $265,455 $2,457,446 Redevelopment and expansions of centers - including joint ventures prorata $80,864 $60,377 Renovations of centers - including joint ventures at prorata $26,070 $19,609 Tenant allowances - including joint ventures at prorata $13,624 $14,347 Deferred leasing costs - including joint ventures at prorata $13,606 $12,690 (f) excludes redevelopment properties -- 29th Street Center, Parklane Mall and Santa Monica Place (g) includes mall and freestanding stores. (h) includes construction in process on wholly owned assets of $206,929 at June 30, 2006 and $162,157 at December 31, 2005. (i) the Company's prorata share of construction in process on unconsolidated entities of $115,286 at June 30, 2006 and $98,180 at December 31, 2005. PRORATA SHARE OF JOINT VENTURES For the Three Months For the Six Months Ended June 30, Ended June 30, (UNAUDITED) (UNAUDITED) (All amounts in (All amounts in (Unaudited) thousands) thousands) 2006 2005 2006 2005 Revenues: Minimum rents $59,100 $51,254 $117,470 $95,819 Percentage rents 1,894 1,644 4,522 3,551 Tenant recoveries 26,403 22,777 54,006 41,937 Other 3,139 2,936 6,676 5,755 Total revenues 90,536 78,611 182,674 147,062 Expenses: Shopping center expenses 29,286 24,930 60,444 48,249 Interest expense 23,292 20,484 42,753 37,305 Depreciation and amortization 20,585 17,253 41,164 34,748 Total operating expenses 73,163 62,667 144,361 120,302 Gain on sale or writedown of assets 244 254 244 540 Equity in income of joint ventures 244 140 320 284 Net income $17,861 $16,338 $38,877 $27,584 THE MACERICH COMPANY FINANCIAL HIGHLIGHTS (IN THOUSANDS EXCEPT PER SHARE AMOUNTS) RECONCILIATION OF NET INCOME TO FFO (b)(e) For the Three Months For the Six Months Ended June 30, Ended June 30, (UNAUDITED) (UNAUDITED) (All amounts in (All amounts in thousands) thousands) 2006 2005 2006 2005 Net income - available to common stockholders $25,672 $6,748 $33,125 $24,889 Adjustments to reconcile net income to FFO - basic Minority interest in OP 4,770 1,480 6,230 5,679 (Gain ) loss on sale of consolidated assets (62,961) 141 (62,460) (1,464) plus gain on undepreciated asset sales - consolidated assets 3,255 -- 3,376 1,308 plus minority interest share of gain on sale of consolidated joint ventures 37,008 -- 37,008 -- (Gain) loss on sale of assets from unconsoli- dated entities (prorata share) (244) (254) (244) (540) plus gain on undepreciated asset sales - unconsoli- dated assets 244 258 244 543 Depreciation and amortization on consolidated assets 59,411 54,173 122,951 91,826 Less depreciation and amortization allocable to minority interests on consolidated joint ventures (1,247) (1,404) (3,222) (1,825) Depreciation and amortization on joint ventures (prorata) 20,585 17,253 41,164 34,748 Less: depreciation on personal property and amortization of loan costs and interest rate caps (3,633) (3,688) (7,668) (6,861) Total FFO - basic 82,860 74,707 170,504 148,303 Additional adjustment to arrive at FFO - diluted Preferred stock dividends earned 2,467 2,358 4,933 4,715 Non-participating preferred units - dividends n/a - antidilutive n/a - antidilutive Participating preferred units - dividends n/a - antidilutive n/a - antidilutive FFO - diluted $85,327 $77,065 $175,437 $153,018 Reconciliation of EPS to FFO per diluted share: For the Three Months For the Six Months Ended June 30, Ended June 30, (UNAUDITED) (UNAUDITED) (All amounts in (All amounts in thousands) thousands) 2006 2005 2006 2005 Earnings per share $0.36 $0.11 $0.47 $0.42 Per share impact of depreciation and amortization real estate $0.89 $0.91 $1.83 $1.62 Per share impact of gain on sale of depreciated assets ($0.26) $0.00 ($0.27) ($0.01) Per share impact of preferred stock not dilutive to EPS ($0.03) ($0.02) ($0.02) ($0.04) Fully Diluted FFO per share $0.96 $1.00 $2.01 $1.99 THE MACERICH COMPANY RECONCILIATION OF NET INCOME TO EBITDA For the Three Months For the Six Months Ended June 30, Ended June 30, (UNAUDITED) (UNAUDITED) (All amounts in (All amounts in thousands) thousands) 2006 2005 2006 2005 Net income - available to common stockholders $25,672 $6,748 $33,125 $24,889 Interest expense 71,188 61,718 143,153 104,282 Interest expense - unconsolidated entities (pro rata) 23,292 20,484 42,753 37,305 Depreciation and amortization - consolidate 59,411 54,173 122,951 91,826 Depreciation and amortization - unconsolidated entities (pro rata) 20,585 17,253 41,164 34,748 Minority interests 4,770 1,480 6,230 5,679 Less: Interest expense and depreciation and amortization allocable to minority interests on consolidated joint ventures (2,500) (2,066) (4,927) (2,604) Loss on early extinguishment of debt -- -- 1,782 -- Loss (gain) on sale of assets - consolidated assets (62,961) 141 (62,460) (1,464) Loss (gain) on sale of assets - unconsolidated entities (pro rata) (244) (254) (244) (540) Add: Minority interest share of gain on sale of consolidated joint ventures 37,008 -- 37,008 -- Income tax expense (benefit) 218 (529) (315) (1,039) Preferred dividends 5,970 4,566 11,939 6,923 EBITDA (j) $182,409 $163,714 $372,159 $300,005 THE MACERICH COMPANY FINANCIAL HIGHLIGHTS (IN THOUSANDS, EXCEPT PER SHARE AMOUNTS) THE MACERICH COMPANY RECONCILIATION OF EBITDA TO SAME CENTERS - NET OPERATING INCOME ("NOI") For the Three Months For the Six Months Ended June 30, Ended June 30, (UNAUDITED) (UNAUDITED) (All amounts in (All amounts in thousands) thousands) 2006 2005 2006 2005 EBITDA (j) $182,409 $163,714 $372,159 $300,005 Add: REIT general and administrative expenses 3,292 3,865 6,990 6,517 Management Companies' revenues (c) (7,369) (6,164) (14,626) (11,441) Management Companies' operating expenses (c) 12,125 13,329 26,839 24,377 EBITDA of non- comparable centers (50,938) (38,883) (107,208) (49,121) SAME CENTERS - Net operating income ("NOI") (k) $139,519 $135,861 $284,154 $270,337 (j) 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. (k) 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. DATASOURCE: Macerich Company CONTACT: Arthur Coppola, President and Chief Executive Officer, or Thomas E. O'Hern, Executive Vice President and Chief Financial Officer, both of The Macerich Company, +1-310-394-6000 Web site: http://www.macerich.com/

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