SANTA MONICA, Calif.,
May 5, 2011 /PRNewswire/ -- The
Macerich Company (NYSE Symbol: MAC) today announced results of
operations for the quarter ended March 31,
2011 which included total funds from operations ("FFO")
diluted of $73.7 million or
$.52 per share-diluted, compared to
$.66 per share-diluted for the
quarter ended March 31, 2010. Net
income available to common stockholders for the quarter ended
March 31, 2011 was $34,000 or $.00 per
share-diluted compared to net loss available to common stockholders
of $6.4 million or $.08 per share-diluted for the quarter ended
March 31, 2010. Negatively impacting
net income and FFO during the quarter ended March 31, 2011 was a $9.1
million, or $.064 per share
prepayment penalty on the early debt extinguishment of the 9.1%
participating loan on Chesterfield Towne Center. 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 or loss to FFO and
net income or loss per common share-diluted ("EPS") to FFO per
share-diluted is included in the financial tables accompanying this
press release.
Recent Highlights
- Mall occupancy increased to 92.5% at March 31, 2011, up from 91.1% at March 31, 2010.
- Annual mall tenant sales per square foot were $449 per foot, a 7.9% increase compared to the
twelve months ended March 31,
2010.
- The Company closed three acquisitions during the quarter.
- The Company entered into a new $1.5
billion line of credit at a current rate of LIBOR +
2.00%.
Commenting on results, Arthur
Coppola chairman and chief executive officer of Macerich
stated, "We are optimistic about our operating performance and
continue to see strong operating results, with occupancies up
significantly, good leasing activity and a continued trend of solid
retail sales growth."
Acquisition Activity
Kierland Commons - On February 24,
2011, Macerich along with its joint venture partner bought
an additional 51% interest in Kierland Commons from Dallas-based Woodbine Development Corporation
and the Herberger Interests of Phoenix/Scottsdale. This transaction effectively
increased Macerich's ownership interest in Kierland Commons from
24.5% up to 50% and the Company's pro rata share of the purchase
price included $34.2 million of cash,
in addition to assuming debt of $18.6
million.
Kierland Commons, which opened in 2000, is a 38 acre mixed-use
retail anchored development that produces annual shop tenant sales
of $625 per square foot. Occupancy
for the project's 316,000 square feet of retail space is 98%.
Atlas Park - On January 28,
2011, Macerich and an affiliate of private investment firm
Walton Street Capital, LLC submitted the successful bid at a
foreclosure auction of The Shops at Atlas Park. The acquisition was
completed on February 28, 2011. The
50/50 joint venture acquired ownership of the property at auction
for $53.75 million. Macerich
will manage and lease the property.
The Shops at Atlas Park is an approximately 400,000 square-foot
mixed-used neighborhood center that opened in 2006 in Queens, New York. The Shops at Atlas
Park includes approximately 216,000 square feet of inline retail
space, 142,000 square feet of major and anchor retail space, and
approximately 41,000 square feet of office space. Tenants include
Regal Cinemas, California Pizza Kitchen, Chico's, Coldwater Creek, Gymboree, J. Jill
and Joseph A. Bank.
Desert Sky Mall – On February 28,
2011, Macerich purchased the remaining 50% ownership
interest in Desert Sky Mall, increasing its ownership of the asset
to 100%. The total purchase price was $27.6 million which included the assumption of a
pro rata share of the property debt. Concurrent with the
purchase of the partnership interest, the $51.5 million loan on the property was paid off.
Desert Sky Mall is a 900,000 square-foot, classic indoor
shopping center located in West
Phoenix that features a unique merchandise mix geared toward
Hispanic consumers. Key retailers include La Curacao, a
Latin-focused department store, and Cinema Latino, a multi-screen
theater complex, plus Sears, Dillard's and Burlington Coat
Factory.
Financing Activity
On February 1, 2011, the Company
successfully completed the early extinguishment of the $50.3 million loan on Chesterfield Towne Center.
The loan had an interest rate of 9.1% with a maturity date of
January 1, 2024. The prepayment cost
associated with that early extinguishment of debt, including the
participation feature, was $9.1
million and was reflected as a charge to net income and FFO
during the quarter.
The Company has also obtained a commitment for a $200 million loan on Los Cerritos Center.
The loan will have a fixed interest rate of 4.46% and has a
term of seven years and is expected to close in early June.
On May 2, 2011, the Company closed
on a new $1.5 billion unsecured line
of credit facility. Based on the Company's current leverage
level, the facility has an interest rate of LIBOR + 2.00%.
The line of credit has a four year term, extendable to five
years, and can be expanded up to a total facility of $2.0 billion.
Dividend
On April 28, 2011, the Board of
Directors of the Company declared a quarterly cash dividend of
$.50 per share of common stock.
The dividend is payable on June 8,
2011 to stockholders of record at the close of business on
May 10, 2011.
Earnings Guidance
Management is reconfirming its previously issued FFO guidance
range of $2.78 to $2.94.
A reconciliation of FFO to EPS follows:
Estimated range for FFO per
share:
|
$2.78 to
$2.94
|
|
Less: real estate
depreciation and amortization
|
$2.40 -
$2.40
|
|
Estimated EPS range:
|
$ .38 to $
.54
|
|
|
|
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 owns approximately 72 million square feet
of gross leaseable area consisting primarily of interests in 70
regional malls. 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
(Investing Section) and through CCBN at www.earnings.com. The
call begins today, May 5, 2011 at
10:30 AM Pacific Time. To listen to
the call, please go to any of these websites 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 (Investing 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
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 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, 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 Securities and Exchange
Commission, including the Annual Report on Form 10-K for the year
ended December 31, 2010, 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.
THE MACERICH
COMPANY
|
|
FINANCIAL
HIGHLIGHTS
|
|
(IN
THOUSANDS, EXCEPT PER SHARE AMOUNTS)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Results of
Operations:
|
|
|
|
|
|
|
|
|
Results
before
|
Impact
of
|
Results
after
|
|
|
Discontinued
Operations (a)
|
Discontinued
Operations (a)
|
Discontinued
Operations (a)
|
|
|
For the
Three Months
|
For the
Three Months
|
For the
Three Months
|
|
|
Ended March
31,
|
Ended March
31,
|
Ended March
31,
|
|
|
Unaudited
|
Unaudited
|
|
|
2011
|
2010
|
2011
|
2010
|
2011
|
2010
|
|
Minimum rents
|
$109,521
|
$101,976
|
-
|
$4
|
$109,521
|
$101,980
|
|
Percentage rents
|
2,954
|
2,987
|
-
|
-
|
2,954
|
2,987
|
|
Tenant recoveries
|
61,672
|
61,009
|
-
|
-
|
61,672
|
61,009
|
|
Management Companies'
revenues
|
10,584
|
10,221
|
-
|
-
|
10,584
|
10,221
|
|
Other income
|
6,338
|
5,917
|
-
|
-
|
6,338
|
5,917
|
|
Total revenues
|
191,069
|
182,110
|
0
|
4
|
191,069
|
182,114
|
|
|
|
|
|
|
|
|
|
Shopping center and operating
expenses
|
62,775
|
60,930
|
-
|
(109)
|
62,775
|
60,821
|
|
Management Companies' operating
expenses
|
25,855
|
22,187
|
-
|
-
|
25,855
|
22,187
|
|
Income tax benefit
|
(2,478)
|
(1,215)
|
-
|
-
|
(2,478)
|
(1,215)
|
|
Depreciation and
amortization
|
64,626
|
59,215
|
-
|
-
|
64,626
|
59,215
|
|
REIT general and administrative
expenses
|
7,644
|
7,518
|
-
|
-
|
7,644
|
7,518
|
|
Interest expense
|
51,997
|
55,411
|
-
|
-
|
51,997
|
55,411
|
|
Loss on early extinguishment of
debt
|
(9,101)
|
-
|
-
|
-
|
(9,101)
|
-
|
|
Loss on sale or write down of
assets, net
|
(437)
|
-
|
-
|
-
|
(437)
|
-
|
|
Co-venture interests
(b)
|
(1,296)
|
(1,384)
|
-
|
-
|
(1,296)
|
(1,384)
|
|
Equity in income of
unconsolidated joint ventures
|
30,275
|
16,459
|
-
|
-
|
30,275
|
16,459
|
|
|
|
|
|
|
|
|
|
Income (loss) from continuing
operations
|
91
|
(6,861)
|
0
|
113
|
91
|
(6,748)
|
|
Discontinued
operations:
|
|
|
|
|
|
|
|
Loss on sale or write
down of assets
|
-
|
-
|
-
|
-
|
-
|
-
|
|
(Loss) income from
discontinued operations
|
-
|
-
|
-
|
(113)
|
-
|
(113)
|
|
Total loss from discontinued
operations
|
-
|
-
|
-
|
(113)
|
-
|
(113)
|
|
Net income (loss)
|
91
|
(6,861)
|
-
|
-
|
91
|
(6,861)
|
|
Less net income (loss)
attributable to noncontrolling interests
|
57
|
(504)
|
-
|
-
|
57
|
(504)
|
|
Net income (loss) available to
common stockholders
|
$34
|
($6,357)
|
$0
|
$0
|
$34
|
($6,357)
|
|
|
|
|
|
|
|
|
|
Average number of shares
outstanding - basic
|
130,574
|
96,951
|
|
|
130,574
|
96,951
|
|
Average shares outstanding,
assuming full conversion of OP Units (c)
|
142,477
|
109,118
|
|
|
142,477
|
109,118
|
|
Average shares outstanding -
Funds From Operations ("FFO") - diluted (c)
|
142,477
|
109,118
|
|
|
142,477
|
109,118
|
|
|
|
|
|
|
|
|
|
Per share income (loss) -
diluted before discontinued operations
|
-
|
-
|
|
|
$0.00
|
($0.08)
|
|
Net income (loss) per
share-basic
|
$0.00
|
($0.08)
|
|
|
$0.00
|
($0.08)
|
|
Net income (loss) per share -
diluted (c)
|
$0.00
|
($0.08)
|
|
|
$0.00
|
($0.08)
|
|
Dividend declared per
share
|
$0.50
|
$0.60
|
|
|
$0.50
|
$0.60
|
|
FFO - basic (c)
(d)
|
$73,681
|
$71,597
|
|
|
$73,681
|
$71,597
|
|
FFO - diluted (c) (d)
|
$73,681
|
$71,597
|
|
|
$73,681
|
$71,597
|
|
FFO per share- basic (c)
(d)
|
$0.52
|
$0.66
|
|
|
$0.52
|
$0.66
|
|
FFO per share- diluted (c)
(d)
|
$0.52
|
$0.66
|
|
|
$0.52
|
$0.66
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
THE MACERICH
COMPANY
|
|
FINANCIAL
HIGHLIGHTS
|
|
(IN
THOUSANDS, EXCEPT PER SHARE AMOUNTS)
|
|
|
|
|
|
(a) The
Company has classified the results of operations on any
dispositions as discontinued operations for the three months ended
March 31, 2010.
|
|
|
|
(b) This
represents the outside partners' allocation of net income in the
Chandler Fashion Center/Freehold Raceway Mall joint
venture.
|
|
|
|
(c) The
Macerich Partnership, L.P. (the "Operating Partnership" or the
"OP") has operating partnership units ("OP units"). OP units can be
converted
|
|
into shares of Company common stock. Conversion of the OP
units not owned by the Company has been assumed for purposes of
calculating 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
of MACWH, LP preferred
|
|
and common units to the extent they are dilutive to the
calculation.
|
|
|
|
(d) The
Company uses FFO in addition to net income to report its operating
and financial results and considers FFO and FFO-diluted
as
|
|
supplemental measures for the real estate industry and a
supplement to Generally Accepted Accounting Principles ("GAAP")
measures.
|
|
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 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
|
|
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
(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 real estate investment trusts.
|
|
|
|
Gains or losses on sales of undepreciated assets and the
impact of amortization of above/below market leases have been
included in FFO.
|
|
The inclusion of gains on sales of undepreciated assets
increased FFO for the three months ended March 31, 2011 and 2010 by
$0.6 million
|
|
and $0.0 million, respectively, or by $0.00 per share and
$0.00 per share, respectively.
|
|
Additionally, amortization of above/below market leases
increased FFO for the three months ended March 31, 2011 and 2010 by
$2.9 million
|
|
and $2.9 million, respectively, or by $0.02 per share and
$0.03 per share, respectively.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
THE MACERICH
COMPANY
|
|
FINANCIAL
HIGHLIGHTS
|
|
(IN
THOUSANDS, EXCEPT PER SHARE AMOUNTS)
|
|
|
|
|
|
|
|
|
|
|
|
Pro rata share of unconsolidated
joint ventures:
|
|
|
|
|
|
|
For the
Three Months
|
|
|
|
Ended March
31,
|
|
|
|
Unaudited
|
|
|
|
2011
|
2010
|
|
Revenues:
|
|
|
|
|
Minimum
rents
|
|
$74,901
|
$74,051
|
|
Percentage
rents
|
|
2,215
|
1,896
|
|
Tenant
recoveries
|
|
36,352
|
37,314
|
|
Other
|
|
5,219
|
4,183
|
|
Total
revenues
|
|
118,687
|
117,444
|
|
|
|
|
|
|
Expenses:
|
|
|
|
|
Shopping center
and operating expenses
|
|
41,954
|
41,816
|
|
Interest
expense
|
|
30,583
|
31,092
|
|
Depreciation and
amortization
|
|
28,525
|
27,455
|
|
Total operating
expenses
|
|
101,062
|
100,363
|
|
Gain (loss) on sale,
remeasurement or write down of assets, net
|
|
12,550
|
(62)
|
|
Loss on early extinguishment of
debt
|
|
-
|
(689)
|
|
Equity in income of joint
ventures
|
|
100
|
129
|
|
Net
income
|
|
$30,275
|
$16,459
|
|
|
|
|
|
|
|
|
|
|
|
Reconciliation of Net income
(loss) to FFO (d):
|
|
|
|
|
|
|
For the
Three Months
|
|
|
|
Ended March
31,
|
|
|
|
Unaudited
|
|
|
|
2011
|
2010
|
|
Net income (loss) - available to
common stockholders
|
|
$34
|
($6,357)
|
|
|
|
|
|
|
Adjustments to reconcile net
income (loss) to FFO - basic
|
|
|
|
|
Noncontrolling interests
in OP
|
|
3
|
(798)
|
|
Loss on sale or write
down of consolidated assets , net
|
|
437
|
-
|
|
plus
gain on undepreciated asset sales - consolidated assets
|
|
542
|
-
|
|
(Gain) loss on sale,
remeasurement or write-down of assets from
|
|
|
|
|
unconsolidated entities (pro
rata), net
|
|
(12,550)
|
62
|
|
plus
gain (loss) on undepreciated asset sales - unconsolidated entities
(pro rata share)
|
|
40
|
(31)
|
|
less
write down of assets - unconsolidated entities (pro rata
share)
|
|
-
|
(32)
|
|
Depreciation and
amortization on consolidated assets
|
|
64,626
|
59,215
|
|
Less depreciation and
amortization allocable to noncontrolling interests
|
|
|
|
|
on
consolidated joint ventures
|
|
(4,494)
|
(5,093)
|
|
Depreciation and
amortization on joint ventures (pro rata)
|
|
28,525
|
27,455
|
|
Less: depreciation on
personal property
|
|
(3,482)
|
(2,824)
|
|
|
|
|
|
|
Total FFO - basic
|
|
73,681
|
71,597
|
|
|
|
|
|
|
Additional adjustment to arrive
at FFO - diluted:
|
|
|
|
|
Preferred units -
dividends
|
|
-
|
-
|
|
Total FFO - diluted
|
|
$73,681
|
$71,597
|
|
|
|
|
|
|
|
|
|
|
|
Reconciliation of EPS to FFO per
diluted share:
|
|
|
|
|
|
|
For the
Three Months
|
|
|
|
Ended March
31,
|
|
|
|
Unaudited
|
|
|
|
2011
|
2010
|
|
Earnings per share -
diluted
|
|
$0.00
|
($0.08)
|
|
Per share impact of
depreciation and amortization of real estate
|
|
0.60
|
0.74
|
|
Per share impact of loss
(gain) on sale, remeasurement or write-down of assets
|
|
(0.08)
|
0.00
|
|
FFO per share -
diluted
|
|
$0.52
|
$0.66
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
THE MACERICH
COMPANY
|
|
FINANCIAL
HIGHLIGHTS
|
|
(IN
THOUSANDS, EXCEPT PER SHARE AMOUNTS)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For the
Three Months
|
|
Reconciliation of Net income
(loss) to EBITDA:
|
|
Ended March
31,
|
|
|
|
Unaudited
|
|
|
|
2011
|
2010
|
|
|
|
|
|
|
Net income (loss) - available to
common stockholders
|
|
$34
|
($6,357)
|
|
|
|
|
|
|
Interest expense -
consolidated assets
|
|
51,997
|
55,411
|
|
Interest expense -
unconsolidated entities (pro rata)
|
|
30,583
|
31,092
|
|
Depreciation and
amortization - consolidated assets
|
|
64,626
|
59,215
|
|
Depreciation and
amortization - unconsolidated entities (pro rata)
|
|
28,525
|
27,455
|
|
Noncontrolling interests
in OP
|
|
3
|
(798)
|
|
Less: Interest expense
and depreciation and amortization
|
|
|
|
|
allocable to noncontrolling interests on consolidated
joint ventures
|
|
(7,479)
|
(7,999)
|
|
Loss on early
extinguishment of debt - consolidated entities
|
|
9,101
|
-
|
|
Loss on early
extinguishment of debt - unconsolidated entities (pro
rata)
|
|
-
|
689
|
|
Loss on sale or write
down of assets - consolidated assets
|
|
437
|
-
|
|
(Gain) loss on sale,
remeasurement or write down of assets - unconsolidated entities
(pro rata)
|
|
(12,550)
|
62
|
|
Income tax
benefit
|
|
(2,478)
|
(1,215)
|
|
Distributions on
preferred units
|
|
207
|
208
|
|
|
|
|
|
|
EBITDA (e)
|
|
$163,006
|
$157,763
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reconciliation of EBITDA to Same
Centers - Net Operating Income ("NOI"):
|
|
|
|
|
|
|
|
|
|
|
|
For the
Three Months
|
|
|
|
Ended March
31,
|
|
|
|
Unaudited
|
|
|
|
2011
|
2010
|
|
EBITDA (e)
|
|
$163,006
|
$157,763
|
|
|
|
|
|
|
Add: REIT general and
administrative expenses
|
|
7,644
|
7,518
|
|
Management Companies' revenues
|
|
(10,584)
|
(10,221)
|
|
Management Companies' operating expenses
|
|
25,855
|
22,187
|
|
Lease
termination income, straight-line and above/below market
adjustments
|
|
|
|
|
to minimum rents of comparable centers
|
|
(3,037)
|
(3,447)
|
|
EBITDA of non-comparable centers
|
|
(15,410)
|
(10,471)
|
|
|
|
|
|
|
Same Centers - NOI
(f)
|
|
$167,474
|
$163,329
|
|
|
|
|
|
|
|
|
|
|
|
(e) EBITDA represents earnings
before interest, income taxes, depreciation, amortization,
noncontrolling interests, extraordinary items, gain (loss) on
sale,
|
|
remeasurement or write down 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.
|
|
|
|
(f) The Company presents
same-center NOI because the Company believes it is useful for
investors to evaluate the operating performance of
|
|
comparable
centers. Same-center NOI is calculated using total 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 lease
|
|
termination
income, straight-line and above/below market adjustments to minimum
rents.
|
|
|
|
|
|
|
SOURCE Macerich Company