MAC Macerich Co

Macerich Announces Fourth Quarter Results SANTA MONICA, Calif., Feb. 10 /PRNewswire-FirstCall/ -- The Macerich Company today announced results of operations for the quarter and year ended December 31, 2003 which included net income to common stockholders for the three months ended December 31, 2003 of $25.5 million, or $.44 per share-diluted compared to net income of $33.2 million or $.75 per share-diluted for the three months ended December 31, 2002. Net income in the quarter ended December 31,2002 was positively impacted by net gain on sales of consolidated assets of $12.0 million or $.18 per share compared to $.00 per share gain on sales of consolidated assets in the quarter ended December 31, 2003. Net income to common stockholders for the year ended December 31, 2003 was $113.2 million or $2.09 per share-diluted compared to $61.0 million or $1.62 per share-diluted for the year ended December 31, 2002. Funds from operations ("FFO") per share -- diluted for the quarter ended December 31, 2003 was $1.04 compared to $1.05 for the comparable period in 2002 and FFO per share-diluted for the year ended December 31, 2003 increased to $3.58 compared to $3.06 for the comparable period in 2002. A reconciliation of net income to FFO is included in the financial highlights section of this press release. Highlights included: * During the fourth quarter, Macerich signed 340,000 square feet of specialty store leases at average initial rents of $37.34 per square foot. First yearrents on mall and freestanding store leases signed during the quarter were 18% higher than expiring rents on a comparable space basis. * Total same center tenant sales for the quarter ended December 31, 2003 were up 2.6% compared to the fourth quarter of 2002, comparable tenant sales were up 1.8% over the quarter ended December 31, 2002. * In November, the quarterly dividend was increased 7% from $.57 to $.61 per share. Macerich has increased its dividend each year since becoming a public company in 1994. * Portfolio occupancy remained high at 93.3%, up from 92.9% at September 30, 2003, and down from 93.9% at December 31, 2002. * On December 18, 2003 Macerich closed on the acquisition of Biltmore Fashion Park in Phoenix, Arizona. * On January 30, 2004 Macerich closed on the acquisition of Inland Center in San Bernardino, California. FFO per share -- diluted was $1.04 compared to $1.05 per share for the quarter ended December 31,2002 and $3.58 and $3.06 for the years ended December 31, 2003 and 2002 respectively, after reflecting the recent accounting rule changes and the FFO definition discussed below. In compliance with the Securities and Exchange Commission's Regulation G relating to non- GAAP financial measures, the Company has revised its FFO definition as of January 1, 2003 and for all prior periods presented, to include gain or loss on sales of peripheral land and the impact on rental revenue resulting from the acquisition of acquired below market leases in accordance with SFAS No. 141. The Company's revised definition is in accordance with the definition provided by the National Association of Real Estate Investment Trusts ("NAREIT"). The Company has also restated 2002 FFO to reflect the write-off of technology investments. Furthermore, effective January 1, 2003 and for all prior periods presented, loss on early extinguishment of debt is no longer considered to be an extraordinary item under GAAP and accordingly is included in FFO. The impact of these changes is identified below: All amounts per share For the 3 months ended: For the year ended: December 31: December 31: 2003 2002 2003 2002 FFO-diluted per share : $1.04 $1.05 $3.58 $3.06 Reflected in FFO/share is the impact of: Loss onearly extinguishments of debt $.00 ($.04) $.00 ($.06) Write-off of technology investments $.00 $.00 $.00 ($.21) Impact of SFAS 141 $.03 $.03 $.07 $.03 Gain on peripheral land sales $.00 $.00 $.02 $.04 Commenting on results, Arthur Coppola, President and Chief Executive Officer of Macerich stated, "Excluding the impact of thetemporary bridge financing on the Westcor acquisition which increased our leverage for the third quarter and part of the fourth quarter of 2002, the FFO growth per share was approximately 4% for the quarter. This growth rate also reflects the negativeearnings impact of decreasing our floating rate debt from 38% of total debt at October 1, 2002 down to 21% at December 31, 2003. During the quarter we saw the continuation of strong releasing spreads and good leasing activity. In addition, we made tremendous progress on our balance sheet and have reduced our floating rate debt exposure considerably. During the quarter we were also able to bring Arizona's two major fashion malls, Biltmore Fashion Park, acquired in December, and Scottsdale Fashion Square, which is only five miles away from Biltmore, under common ownership and create even greater opportunities. " Acquisition Activity On December 18, 2003, Macerich closed on the purchase of Biltmore Fashion Park in Phoenix, Arizona. Macy's and Saks Fifth Avenue anchor Biltmore. The center's annual tenant sales per square foot were $479. The $158.5 million purchase price included the assumption of $77.4 million of debt, the issuance of 705,636 partnership units of The Macerich Partnership L.P. and $51 million in cash. Leading specialty retailers in the center include Tommy Bahama, Allen-Edmonds, Polo by Ralph Lauren, Gucci, Escada, Stuart Weitzman, Cole-Hahn, Cartier and Elizabeth Arden Salon. Biltmore is owned in a 50/50 partnership with an institutional partner. On January 30, 2003, Macerich, in a 50/50 joint venture with a private investment company, acquired Inland Center, a 1 million square foot super-regional mall in San Bernardino, California. The purchase price was $63.3 million and concurrently with the acquisition the joint venture placed a $54 million fixed rate loan on the property bearing interest at 4.63%. The mall shop tenants at Inland are averaging $440 per square foot in annual sales. Sears, Robinson-May, Macy'sand Gottschalks anchor the mall. Redevelopment and Development Activity At Queens Center, the redevelopment and expansion continue. The project will increase the size of the center from 620,000 square feet to approximately one million square feet. Completion is planned in phases starting in the second quarter 2004 with stabilization expected in 2005. Leasing activity has been strong with over 88% of the total shop expansion space already leased or committed, including 93% for the phase one space. Construction continues at Scottsdale 101, a 600,000 square foot power center in North Phoenix. The power center is being built in phases through 2004. Circuit City, Borders and Bed Bath and Beyond recently opened. Progress also continues at La Encantada, a 258,000 square foot specialty center in Tucson, Arizona, which will feature Adrienne Vittadini, Ann Taylor, Apple Computer, Cache, Pottery Barn, Tommy Bahama and Williams-Sonoma. This project is planned to open in phases through 2004. At Sommersville Town Center in Antioch, California a new 105,000 square foot Macy's store is under construction and expected to open in the fall of 2004. Nordstrom announced plans to open a 144,000 square foot store at The Oaks Mall in Thousand Oaks, California. This store opening is planned in conjunction with an expansion of the existing mall tentatively scheduled to open in 2007. Financing Activity In November, the Company closed on the refinancing of a $180 million floating rate loan on FlatIron Crossing. The loan was paid off and refinanced with a $200 million, fixed rate 10-year loan bearing interest at 5.23%. Also, the Company has reached agreement on an $85 million, 5-year fixed rate loan with an interest rate of 4.63% on Northridge Mall. The rate on the loan is locked and this financing is expected to close in April 2004. Loan proceeds are expected to pay down the Company's unsecured floating rate debt. In addition, in connection with the Company's $250 million unsecured term loan, aninterest rate swap agreement was entered into to fix the interest rate at 4.45% from November 2003 to October 13, 2005. Earnings Guidance The Company is reaffirming its previously issued year 2004 FFO per share guidance and revising its EPS guidance in the following ranges: Range per share: Fully Diluted EPS $1.79..........$1.89 Plus: Real Estate Depreciation and Amortization $2.09..........$2.09 Less: impact of preferred shares (not dilutive to EPS) ($.10).........($.10) Less: Gain on Sale of Assets $.00...........$.00 Fully Diluted FFO per share $3.78..........$3.88 Plus: Interest Expense per share $2.60..........$2.60 Plus: Non real estate depreciation, income taxes and ground rent expense per share $.17...........$.17 EBITDA per share $6.55..........$6.65 Less: management company expenses, REIT General and administrative expenses and EBITDA of non-comparable centers ($.83).........($.83) Same center EBITDA per share $5.72..........$5.82 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 guidanceranges do not include any potential property acquisitions or dispositions other than those that have closed through January 31, 2004. The Company is not able to assess at this time the potential impact of such exclusions on future EPS and FFO. FFO does not include gains or losses on sales of depreciated operating assets. The Macerich Company is a fully integrated self-managed and self- administered real estate investment trust, which focuses on the acquisition, leasing, management, development andredevelopment of regional malls throughout the United States. The Company is the sole general partner and owns an 82% ownership interest in The Macerich Partnership, L.P. Macerich now owns approximately 60 million square feet of gross leaseable area consisting primarily of interests in 59 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 CBN at http://www.fulldisclosure.com/. The call begins today, February 10, 2004 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, tenant bankruptcies, 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; 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 discussionof such risks and uncertainties. (See attached tables) THE MACERICH COMPANY FINANCIAL HIGHLIGHTS (IN THOUSANDS, EXCEPT PER SHARE AMOUNTS) Results before Impact of Results after SFAS 144 (f) SFAS 144 (f) SFAS 144 (f) Results of Operations: For the For the For the Three Months Three Months Three Months Ended December 31 Ended December 31 Ended December 31 Unaudited Unaudited 2003 2002 2003 2002 2003 2002 Minimum Rents (e) 81,068 74,372 (9) (2,086) 81,059 72,286 Percentage Rents 7,958 6,943 (26) 7,958 6,917 Tenant Recoveries 43,535 36,109 (383) 43,535 35,726 Other Income 5,575 3,898 (1) 5,575 3,897 Total Revenues 138,136 121,322 (9) (2,496) 138,127 118,826 Shopping center and operating expenses (c) 49,455 40,486 14 (977) 49,469 39,509 Depreciation and amortization 35,176 23,608 (463) 35,176 23,145 General, administrative and other expenses (c) 1,892 2,875 1,892 2,875 Interest expense 33,665 36,520 (151) 33,665 36,369 Loss on early extinguishments of debt 29 2,734 29 2,734 Gain (loss) on sale or writedown of assets (117) 12,044 88 (12,150) (29) (106) Pro rata income (loss) of unconsolidated entities (c) 16,038 22,094 16,038 22,094 Income (loss) of the Operating Partnership from continuing operations 33,840 49,237 65 (13,055) 33,905 36,182 Discontinued Operations: Gain (loss) on sale of asset -- -- (88) 12,150 (88) 12,150 Income from discontinued operations -- -- 23 905 23 905 Income before minority interests 33,840 49,237 -- -- 33,840 49,237 Income allocated to minority interests 5,994 10,825 -- -- 5,994 10,825 Net income before preferred dividends 27,846 38,412 -- -- 27,846 38,412 Dividends earned by preferred stockholders (a) 2,357 5,195 -- -- 2,357 5,195 Net income to common stockholders 25,489 33,217 -- -- 25,489 33,217 Average # of shares outstanding - basic 57,745 42,077 57,745 42,077 Average shares outstanding, - basic, assuming full conversion of OP Units (d) 71,324 55,793 71,324 55,793 Average shares outstanding - diluted for FFO (d) 75,491 68,642 75,491 68,642 Per share income - diluted before discontinued operations -- -- 0.44 0.56 Net income per share - basic 0.44 0.79 0.44 0.79 Net income per share - diluted 0.44 0.75 0.44 0.75 Dividend declared per share 0.61 0.57 0.61 0.57 Funds from operations "FFO" (b) (d)- basic 75,963 65,099 75,963 65,099 Funds from operations "FFO" (a) (b)(d) - diluted 78,320 72,354 78,320 72,354 FFO per share - basic (b)(d) 1.07 1.17 1.07 1.17 FFO per share - diluted (a)(b)(d) 1.04 1.05 1.04 1.05 Results before Impact of Results after SFAS 144 (f) SFAS 144 (f) SFAS 144 (f) Results of Operations: For the Year For the Year For the Year Ended Ended Ended December 31 December 31 December 31 Unaudited Unaudited 2003 2002 2003 2002 2003 2002 Minimum Rents (e) 297,606 234,617 (2,119) (5,864) 295,487 228,753 Percentage Rents 12,999 11,193 (48) 12,999 11,145 Tenant Recoveries 160,114 121,547 (345) (973) 159,769 120,574 Other Income 17,808 12,062 (59) (34) 17,749 12,028 Total Revenues (e) 488,527 379,419 (2,523) (6,919) 486,004 372,500 Shopping center and operating expenses ( c) 172,515 130,339 (834) (3,259) 171,681 127,080 Depreciation and amortization 109,028 78,837 (333) (1,271) 108,695 77,566 General, administrative and other expenses (c) 10,724 7,435 10,724 7,435 Interest expense 132,512 122,934 (320) 132,512 122,614 Loss on early extinguishments of debt 155 3,605 155 3,605 Gain on sale or writedown of assets 34,451 22,253 (22,031) (26,073) 12,420 (3,820) Pro rata income of unconsolidated entities (c) 58,897 43,049 58,897 43,049 Income (loss) of the Operating Partnership from continuing operations 156,941 101,571 (23,387) (28,142) 133,554 73,429 Discontinued Operations: Gain on sale of asset -- -- 22,031 26,073 22,031 26,073 Income from discontinued operations -- -- 1,356 2,069 1,356 2,069 Income before minority interest 156,941 101,571 -- -- 156,941 101,571 Income allocated to minority interests 28,907 20,189 -- -- 28,907 20,189 Net income before preferred dividends 128,034 81,382 -- -- 128,034 81,382 Dividends earned by preferred stockholders (a) 14,816 20,417 -- -- 14,816 20,417 Net income to common stockholders 113,218 60,965 -- -- 113,218 60,965 Average # of shares outstanding - basic 53,669 37,348 53,669 37,348 Average shares outstanding, - basic, assuming full conversion of OP Units (d) 67,332 49,611 67,332 49,611 Average shares outstanding - diluted for FFO (d) 75,198 63,015 75,198 63,015 Per share income - diluted before discontinued operations 1.78 1.06 Net income per share - basic 2.11 1.63 2.11 1.63 Net income per share - diluted 2.09 1.62 2.09 1.62 Dividend declared per share 2.32 2.22 2.32 2.22 Funds from operations "FFO" (b) (d)- basic 254,316 164,916 254,316 164,916 Funds from operations "FFO" (a) (b) (d) - diluted 269,132 194,643 269,132 194,643 FFO per share - basic (b) (d) 3.78 3.32 3.78 3.32 FFO per share - diluted (a) (b) (d) 3.58 3.06 3.58 3.06 (a) The Company issued $161,400 of convertible debentures in June and July, 1997. The debentures were convertible into common shares at a conversion price of $31.125 per share. Thedebentures were paid off in full in December 2002. On February 25, 1998, the Company sold $100,000 of convertible preferred stock and on June 16, 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 assumed converted for purposes of net income per share for 2003 and are not assumed converted for purposes of net income per share for 2002 as it would be antidilutive to that calculation. On September 9, 2003, 5.487 million shares of Series B convertible preferred stock were converted into common shares. 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 a supplemental measure 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 is 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 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 peripheral land and the impact of SFAS 141 have been included in FFO. The inclusion of gains on sales of peripheral land increasedFFO for the three and twelve months ended December 31, 2003 by $190 and $1,441, respectively, or by $.00 per share and $.02 per share, respectively. During the three and twelve months ended December 31, 2002, there were ($121) and $2,531, respectively, of outparcel sales or $.00 and $.04 per share respectively. FFO for the quarter and year ended December 31, 2002 have been restated to reflect the Company's share of impairment of technology assets and losses on debt-related transactions previously reported as extraordinary items under GAAP, reducing FFO by a net $2,734, or $.04 per share during the quarter ended December 31, 2002 and $16,871 or $.27 per share for the year ended December 31, 2002. FFO has also been restated to include gain on land sales, including joint ventures at prorata, which increased FFO by $0 for the quarter and $2.5 million or $.04 per share for the year ended December 31, 2002. (c) Thisincludes, 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 and for Macerich Management Company through June 2003. Effective July 1, 2003, the Company has consolidated Macerich Management Company. Certain reclassifications have been made in the 2002 financial highlights to conform to the 2003 financial highlights presentation. (d) The Company has operating partnership units ("OP units"). Each OP unit may 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. Due to an equity issuance in November, 2002, calculation of the annual 2002 FFO per share using the weighted average number of shares outstanding during the year does not equal the sum of the actual FFO per share calculated by quarter. The sum of the quarterly results is reflected above. (e) Effective October 1, 2002, the Company adopted SFAS No. 141, Business Combinations, which requires companies that have acquired assets subsequent to June 2001 to reflect the discounted net present value of market rents in excess of rents in place at the date of acquisition as a deferred credit to be amortized into income over the average remaining life of the acquired leases. The FFO accretion from amortizing the net present value of the excess of market rent in excess of in place rents for the three and twelve months ending December 31, 2003 was approximately $.03 per share and $.07 per share, respectively. Additionally, the impact on FFO for the three and twelve months ending December 31, 2002 was $.03 per share. In accordance with the NAREIT definition of FFO, the impact of this accounting treatment is included in FFO. Also, as a result of SFAS141, during the fourth quarter of 2003, an additional $9.5 million of depreciation and amortization has been reflected based on a reclassification of the purchase price of recent acquisitions between buildings and into the valueof in-place leases, tenant improvements and lease commissions in accordance with independent third party evaluations and recent guidance regarding the SFAS 141 calculation methodology. (f) 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. The Company sold Boulder Plaza on March 19, 2002 and in accordance with SFAS 144 the results of Boulder Plaza for the periods from January 1, 2002 to March 19, 2002 have been reclassified into "discontinued operations" on the consolidated statements of operations. Additionally, the Company sold its 67% interest in Paradise Village Gateway on January 2, 2003 (acquired in July 2002), and the loss on sale of $0.2 million has been reclassified to discontinuedoperations. The Company sold Bristol Center on August 4, 2003, and the results for the period January 1, 2002 to December 31, 2002 and for the period January 1, 2003 to August 4, 2003 have been reclassified to discontinued operations.The sale of Bristol Center resulted in a gain on sale of asset of $22.2 million. Dec 31 Dec 31 Summarized Balance Sheet Information 2003 2002 (UNAUDITED) Cash and cash equivalents $47,160 $53,559 Investment in real estate, net (i) $3,317,055 $2,842,177 Investments in unconsolidated entities (j) $577,396 $617,205 Total Assets $4,121,802 $3,662,080 Mortgage and notes payable $2,682,599 $2,291,908 Dec 31 Dec 31 Additional financial data as of: 2003 2002 Occupancy of centers (g) 93.30% 93.90% Comparable quarter change in same center sales (g) (h) 2.60% 0.90% Additional financial data for the twelve months ended: Acquisitions of property and equipment - including joint ventures prorata $339,997 $1,661,227 Redevelopment and expansions of centers - including joint ventures prorata $183,896 $65,184 Renovations of centers - including joint ventures at prorata $24,468 $6,860 Tenant allowances- including joint ventures at prorata $12,043 $16,010 Deferred leasing costs - including joint ventures at prorata $18,486 $16,512 (g) excludes redevelopment properties-Crossroads Mall- Boulder, and Parklane Mall. (h) includes mall and freestanding stores. (i) includes construction in process on wholly owned assets of $268,810 at December 31, 2003 and $133,536 at December 31, 2002. (j) the Company's prorata share of construction in process on unconsolidated entities of $16,510 at December 31, 2003 and $16,147 atDecember 31, 2002. PRORATA SHARE OF JOINT For the Three Months For the Year VENTURES Ended December 31 Ended December 31 Unaudited Unaudited (Unaudited) (All amounts (All amounts in thousands) in thousands) 2003 2002 2003 2002 Revenues: Minimum rents $40,407 $45,565 $158,061 $137,059 Percentage rents 4,625 4,351 8,163 7,138 Tenant recoveries 16,881 17,627 66,886 55,130 Management fee (c) -- 2,758 5,250 9,646 Other 1,438 1,598 4,820 3,735 Total revenues 63,351 71,899 243,180 212,708 Expenses: Shopping center expenses 21,077 20,113 78,70264,581 Interest expense 14,739 14,330 57,049 50,116 Management company expense (c) 3,247 3,013 9,411 Depreciation and amortization 11,493 11,98845,674 37,530 Total operating expenses 47,309 49,678 184,438 161,638 Gain (loss) on sale or writedown of assets (4) (127) 155 (8,021) Net income 16,038 22,094 58,897 43,049 RECONCILIATION OF NET INCOME For the Three Months For the Year TO FFO (b)(e) Ended December 31 Ended December 31 (All amounts (All amounts in thousands) in thousands) (UNAUDITED) (UNAUDITED) 2003 2002 2003 2002 Net income - available to common stockholders $25,489 $33,217 $113,218 $60,965 Adjustments to reconcile net income to FFO- basic Minority interest 5,994 10,825 28,907 20,189 (Gain ) loss on saleof wholly owned assets 117 (12,044) (34,451) (22,253) plus gain on land sales - consolidated assets 195 -- 1,054 128 less impairment writedown of consolidated assets -- -- -- (3,029) (Gain) loss on sale or write-down of assets from unconsolidated entities (pro rata share) 4 127 (155) 8,021 plus gain on land sales - unconsolidated assets (5) (121) 387 2,403 less impairment writedown of unconsolidated assets -- -- -- (10,237) Depreciation and amortization on wholly owned centers 35,176 23,608 109,028 78,837 Depreciation and amortization on joint ventures and from the management companies (pro rata) 11,493 11,815 45,674 37,355 Less: depreciation on personal property and amortization of loan costs and interest rate caps (2,500) (2,328) (9,346) (7,463) Total FFO - basic 75,963 65,099 254,316 164,916 Additional adjustment to arrive at FFO - diluted Interest expense and amortization of loan costs on the debentures -- 2,060 -- 9,310 Preferred stock dividends earned 2,357 5,195 14,816 20,417 Effect of employee/director stock incentive plans FFO - diluted 78,320 72,354 269,132 194,643 THE MACERICH COMPANY RECONCILIATION OF For the Three Months For the Year NET INCOME TO EBITDA Ended December 31 Ended December 31 (All amounts in thousands) (All amounts in thousands) (UNAUDITED) (UNAUDITED) 2003 2002 2003 2002 Net income - available to common stockholders 25,489 33,217 113,218 60,965 Interest expense 33,665 36,520 132,512 122,934 Interest expense - unconsolidated entities (pro rata) 14,739 14,330 57,049 50,116 Depreciation and amortization - wholly-owned centers 35,176 23,608 109,028 78,837 Depreciation and amortization - unconsolidated entities (pro rata) 11,493 11,988 45,674 37,530 Minority interest 5,994 10,825 28,907 20,189 Loss on early extinguishments of debt 29 2,734 155 3,605 Loss (gain) on sale of assets - wholly-owned centers 117 (12,044) (34,451) (22,253) Loss (gain) on sale of assets - unconsolidated entities (pro rata) 4 127 (155) 8,021 Preferred dividends 2,357 5,195 14,816 20,417 EBITDA (k) $129,063 $126,500 $466,753 $380,361 THE MACERICH COMPANY RECONCILIATION OF EBITDA TO SAME CENTERS - NET OPERATING INCOME ("NOI") For the Three Months For the Year Ended December 31 Ended December 31 (All amounts in thousands) (All amounts in thousands) (UNAUDITED) (UNAUDITED) 2003 2002 2003 2002 EBITDA (k) $129,063 $126,500 $466,753 $380,361 Add: REIT general and administrative expenses 1,892 2,875 10,724 7,435 Management Company expenses 1,872 922 7,550 5,295 EBITDA of non-comparable centers (15,148) (13,181) (142,292) (56,943) SAME CENTERS - Net operating income ("NOI") (l) $117,679 $117,116 $342,735 $336,148 (k) 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 ofliquidity. EBITDA, as presented, may not be comparable to similarly titled measurements reported by other companies. (l) 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: Press, Arthur Coppola, President and Chief Executive Officer, or Thomas E. O'Hern, Executive Vice President and Chief Financial Officer, both of Macerich Company, +1-310-394-6000 Web site: http://www.macerich.com/

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