Macerich Announces Quarterly Results SANTA MONICA, Calif., Aug. 5
/PRNewswire-FirstCall/ -- The Macerich Company (NYSE:MAC) today
announced results of operations for the quarter and six months
ended June 30, 2004 which included funds from operations ("FFO")
per share-diluted increasing 5% to $.89 compared to $.85 for the
quarter ended June 30, 2003 and increasing to $1.79 for the six
months ended June 30, 2004 compared to $1.69 for the comparable
period in 2003. Total FFO-diluted increased by 6.7% to $68 million
for the quarter compared to $63.8 million for the quarter ended
June 30, 2003 and to $136.7 million for the six months ended June
30, 2004 compared to $127.0 million for the comparable period in
2003. 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 per
common share-diluted ("EPS") to FFO per share-diluted is included
in the financial tables accompanying this press release. Net income
available to common stockholders for the quarter ended June 30,
2004 was $17.1 million or $.29 per share-diluted compared to $28.6
million or $.55 per share-diluted for the quarter ended June 30,
2003. Net income in the quarter ended June 30, 2003 was positively
impacted by net gain on sales of consolidated assets of $11.6
million or $.18 per share compared to a net gain on asset sales of
$1.1 million or $.01 per share for the quarter ended June 30, 2004.
For the six months ended June 30, 2004 net income was $35.2 million
or $.60 per share-diluted compared to $48 million or $.92 per
share-diluted for the six months ended June 30, 2003. A
reconciliation of net income to FFO is included in the financial
highlights section of this press release. Recent highlights: *
During the quarter, Macerich signed 367,000 square feet of
specialty store leases at average initial rents of $39.82 per
square foot. First year rents on mall and freestanding store leases
signed during the quarter were 38% higher than average expiring
rents. * Total same center tenant sales, for the quarter ended June
30, 2004, were up 6.0% compared to sales levels for the quarter
ended June 30, 2003. * Portfolio occupancy at June 30, 2004 was
91.7% compared to 92.4% at June 30, 2003. On a same center basis
occupancy was 92.0% at June 30, 2004 compared to 92.4% at June 30,
2003. * The Company acquired two California malls; La Cumbre Plaza
and The Mall of Victor Valley and also a 50% interest in NorthPark
Center in Dallas. * The Company completed an upsizing of its line
of credit to $1 billion from $425 million. Commenting on results
and recent events, Arthur Coppola, President and Chief Executive
Officer of Macerich stated, "The quarter was highlighted by
excellent leasing activity including positive releasing spreads in
excess of 35%. In addition we continued to make excellent progress
on the expansion of Queens Center which is currently 98% leased. It
has also been an active time for accretive, strategic acquisitions.
Including three recently announced acquisitions, we have acquired
over 21 million square feet since June 2002. Included in the
acquisitions were 16 malls, located primarily in California and
Arizona. These acquisitions along with our development and
redevelopment pipeline will help fuel our continued FFO growth."
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. Phase I
recently opened and project completion and stabilization is
expected in early 2005. Leasing activity has been robust with 98%
of the total shop expansion space already leased. In Boulder,
Colorado, the Company has received unanimous approval from the City
of Boulder's Planning Board for its proposal to transform
Crossroads Mall into "Twenty Ninth Street" -- an open-air retail,
entertainment, restaurant and office district. Boulder's City
Council subsequently passed a resolution supporting the Planning
Board's decision, finalizing the extended regulatory process and
bringing final approval to the project. Macerich has reached
agreement with two anchors, Century Theatres and Wild Oats Market.
Wild Oats and Century will join existing anchor Foley's which is
the remaining retailer from the original mall. In addition to
building a flagship, 35,000-square-foot Wild Oats Natural
Marketplace, the Boulder-based Wild Oats agreed to relocate from
its current 50,000-square-foot headquarters elsewhere in the city
to 80,000 square feet of newly-constructed office space in the
center's former Sears building -- bringing 275 employees to the
site. Acquisitions In July, the Company acquired La Cumbre Plaza in
Santa Barbara, California and the Mall of Victor Valley in
Victorville, California. La Cumbre Plaza is a 494,000 square foot
Mediterranean themed, open-air regional mall anchored by Sears and
Robinson-May. The specialty tenant annual sales per square foot are
$369. The Mall of Victor Valley is a 507,000 square foot regional
mall anchored by JC Penney, Harris, Sears and Mervyn's. The mall is
located in the Inland Empire, one of California's fastest growing
regions. Specialty tenant annual sales per square foot are $370.
The combined total purchase price for both properties was $151.3
million. Projected first year net operating income from the two
properties combined is $10.9 million. In May, a 50% interest in
NorthPark Center in Dallas, Texas was acquired. NorthPark is a 1.4
million square foot enclosed mall anchored by Neiman Marcus,
Foley's and Dillard's. Plans are underway to expand the center by
adding specialty shops and Nordstrom. Tenant average annual sales
per square foot exceed $550. Financing Activity In June, an $85
million fixed rate loan was placed on Northridge Mall in Salinas,
California. The five-year loan bears interest at 4.94%. In July,
Redmond Town Center was refinanced with a $75 million fixed rate
loan at 4.81%. The proceeds were used to pay off the existing $58
million, 6.5% loan. The Company's line of credit was amended and
upsized to $ 1 billion from $425 million. The term was extended two
years to 2007 and the borrowing spread was reduced by 100 basis
points to LIBOR plus 1.50% based on the Company's current leverage
level. The 23 participating banks closed the transaction on July
30. Concurrently with the line of credit closing, a $196 million
term loan bearing interest at LIBOR plus 2.75% was paid off.
Earnings Guidance The Company is raising the lower end of its year
2004 FFO per share guidance range and revising its EPS guidance as
follows: Range per share: Fully Diluted EPS $1.65........$1.71
Plus: Real Estate Depreciation and Amortization $2.26........$2.26
Less: impact of preferred shares (not dilutive to EPS)
($.08).......($.08) Less: Gain on Sale of depreciated Assets
($.01).......($.01) Fully Diluted FFO per share $3.82........$3.88
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
property acquisitions or dispositions other than those that have
closed through August 5, 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
and redevelopment of regional malls throughout the United States.
The Company is the sole general partner and owns an 81% ownership
interest in The Macerich Partnership, L.P. Macerich now owns
approximately 61 million square feet of gross leaseable area
consisting primarily of interests in 62 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.fulldisclosure.com/. The call begins today, August 5,
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, 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, for a
discussion of such risks and uncertainties. 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 June 30 Ended June 30 Ended
June 30 Unaudited Unaudited 2004 2003 2004 2003 2004 2003 Minimum
Rents (e) $80,126 $73,029 ($26) ($1,035) $80,100 $71,994 Percentage
Rents 2,400 1,261 -- -- $2,400 1,261 Tenant Recoveries 41,519
39,638 -- (185) $41,519 39,453 Other Income 4,854 3,784 (77) (19)
$4,777 3,765 Total Revenues 128,899 117,712 (103) (1,239) 128,796
116,473 Shopping center and operating expenses (c) 47,544 42,846
(11) (256) 47,533 42,590 Depreciation and amortization 35,311
24,575 (179) 35,311 24,396 General, administrative and other
expenses (c) 2,271 2,719 -- 2,271 2,719 Interest expense 34,755
32,981 -- 34,755 32,981 Gain (loss) on sale or writedown of assets
1,068 11,591 (288) 19 780 11,610 Equity in income of unconsolidated
entities (c) 13,310 15,141 -- 13,310 15,141 Income of the Operating
Partnership from continuing operations 23,396 41,323 (380) (785)
23,016 40,538 Discontinued Operations: Gain (loss) on sale of asset
-- -- 288 (19) 288 (19) Income from discontinued operations -- --
92 804 92 804 Income before minority interests 23,396 41,323 -- --
23,396 41,323 Income (loss) allocated to minority interests 4,070
7,554 -- -- 4,070 7,554 Net income before preferred dividends
19,326 33,769 -- -- 19,326 33,769 Dividends earned by preferred
stockholders (a) 2,213 5,195 -- -- 2,213 5,195 Net income to common
stockholders $17,113 $28,574 $0 $0 $17,113 $28,574 Average # of
shares outstanding -- basic 58,612 51,874 58,612 51,874 Average
shares outstanding,-- basic, assuming full conversion of OP Units
(d) 72,827 65,586 72,827 65,586 Average shares outstanding --
diluted for FFO (d) 76,830 75,203 76,830 75,203 Per share
income-diluted before discontinued operations -- -- $0.28 $0.54 Net
income per share-basic $0.29 $0.55 $0.29 $0.55 Net income per
share-diluted $0.29 $0.55 $0.29 $0.55 Dividend declared per share
$0.61 $0.57 $0.61 $0.57 Funds from operations "FFO" (b) (d)-- basic
$65,836 $58,566 $65,836 $58,566 Funds from operations "FFO" (a) (b)
(d) -- diluted $68,049 $63,761 $68,049 $63,761 FFO per share- basic
(b) (d) $0.90 $0.89 $0.90 $0.89 FFO per share- diluted (a) (b) (d)
$0.89 $0.85 $0.89 $0.85 % change in FFO -- diluted 4.47% 4.47% 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 Six Months Six Months Six Months Ended June 30 Ended June
30 Ended June 30 Unaudited Unaudited 2004 2003 2004 2003 2004 2003
Minimum Rents (e) $156,073 $145,167 ($170) ($2,117) $155,903
$143,050 Percentage Rents 4,827 2,971 -- -- 4,827 2,971 Tenant
Recoveries 82,840 76,655 -- (303) 82,840 76,352 Other Income 8,909
7,877 (159) (25) 8,750 7,852 Total Revenues 252,649 232,670 (329)
(2,445) 252,320 230,225 Shopping center and operating expenses (c)
90,380 82,208 (11) (642) 90,369 81,566 Depreciation and
amortization 69,612 48,489 (44) (373) 69,568 48,116 General,
administrative and other expenses (c) 5,294 5,055 -- -- 5,294 5,055
Interest expense 68,088 66,989 -- -- 68,088 66,989 Loss on early
extinguishment of debt (405) -- -- -- (405) -- Gain on sale or
writedown of assets 1,094 11,553 (313) 169 781 11,722 Equity in
income of unconsolidated entities (c) 28,160 29,607 -- -- 28,160
29,607 Income of the Operating Partnership from continuing
operations 48,124 71,089 (587) (1,261) 47,537 69,828 Discontinued
Operations: Gain (loss) on sale of asset -- -- 313 (169) 313 (169)
Income from discontinued operations -- -- 274 1,430 274 1,430
Income before minority interests 48,124 71,089 -- -- 48,124 71,089
Income allocated to minority interests 8,470 12,699 -- -- 8,470
12,699 Net income before preferred dividends 39,654 58,390 -- --
39,654 58,390 Dividends earned by preferred stockholders (a) 4,425
10,391 -- -- 4,425 10,391 Net income to common stockholders $35,229
$47,999 $0 $0 $35,229 $47,999 Average # of shares outstanding --
basic 58,354 51,733 58,354 51,733 Average shares outstanding,--
basic, assuming full conversion of OP Units (d) 72,569 65,446
72,569 65,446 Average shares outstanding -- diluted for FFO (d)
76,595 75,030 76,595 75,030 Per share income-diluted before
discontinued operations -- -- $0.59 $0.90 Net income per
share-basic $0.60 $0.93 $0.60 $0.93 Net income per share-diluted
$0.60 $0.92 $0.60 $0.92 Dividend declared per share $1.22 $1.14
$1.22 $1.14 Funds from operations "FFO" (b) (d) -- basic $132,306
$116,657 $132,306 $116,657 Funds from operations "FFO" (a) (b) (d)
-- diluted $136,731 $127,048 $136,731 $127,048 FFO per share-basic
(b) (d) $1.82 $1.78 $1.82 $1.78 FFO per share-diluted (a) (b) (d)
$1.79 $1.69 $1.79 $1.69 % change in FFO -- diluted 5.42% 5.42% THE
MACERICH COMPANY FINANCIAL HIGHLIGHTS (IN THOUSANDS, EXCEPT PER
SHARE AMOUNTS) (a) 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 one for one basis for common
stock. These preferred shares are not assumed converted for
purposes of net income per share for the three and six months
ending June 30, 2004 and 2003 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 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 peripheral land and the impact of SFAS 141 have been
included in FFO. The inclusion of gains on sales of peripheral land
increased FFO for the three and six months ended June 30, 2004 by
$1,001 and $2,417, respectively, or by $.01 per share and $.03 per
share, respectively. Additionally, the impact of SFAS No. 141
increased FFO for the three and six months ended June 30, 2004 by
$1.9 million and $3.8 million, respectively, or by $.024 per share
and $.049 per share, respectively. The inclusion of gains on sales
of peripheral land increased FFO for the three and six months ended
June 30, 2003 by $64 and $588, respectively, or by $.00 per share
and $.01 per share, respectively. Additionally, the impact of SFAS
141 increased FFO for the three and six months ended June 30, 2003
by $1.3 million and $2.4 million, respectively, or by $.017 per
share and $.032 per share, respectively. The Company adopted SFAS
No. 141 (see Note (e) below) effective October 1, 2002. (c) This
includes, using the equity method of accounting, the Company's
prorata share of the equity in income or loss of its unconsolidated
joint ventures for all periods presented and for Macerich
Management Company through June 30, 2003. Effective July 1, 2003,
the Company has consolidated Macerich Management Company. Certain
reclassifications have been made in the 2003 financial highlights
to conform to the 2004 financial highlights presentation. (d) The
Company has operating partnership units ("OP units"). Each OP unit
may be converted into a share of Company stock. Conversion of the
OP units has been assumed for purposes of calculating the FFO per
share and the weighted average number of shares outstanding. (e)
Effective October 1, 2002, the Company adopted SFAS No. 141,
Business Combinations, which requires companies that have acquired
assets subsequent to June 2001 to reflect the discounted net
present value of market rents in excess of rents in place at the
date of acquisition as a deferred credit to be amortized into
income over the average remaining life of the acquired leases.
Additionally, depreciation and amortization reflects the impact of
SFAS 141. The impact on EPS for the three and six months ending
June 30, 2004 was approximately ($.06) per share and ($.14) per
share, respectively. The impact on EPS for the three and six months
ending June 30, 2003 was approximately $.02 per share and $.03 per
share, respectively. (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 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 discontinued operations. Additionally, the
Company sold Bristol Center on August 4, 2003, and the results for
the period January 1, 2003 to June 30, 2003 and the results for the
period January 1, 2004 to June 30, 2004 have been reclassified to
discontinued operations. The sale of Bristol Center resulted in a
gain on sale of asset of $22.2 million. THE MACERICH COMPANY
FINANCIAL HIGHLIGHTS (IN THOUSANDS, EXCEPT PER SHARE AMOUNTS) June
30 Dec 31 Summarized Balance Sheet Information 2004 2003
(UNAUDITED) Cash and cash equivalents $93,382 $47,160 Investment in
real estate, net (i) $3,236,521 $3,186,725 Investments in
unconsolidated entities (j) $609,038 $577,908 Total Assets
$4,277,108 $4,145,593 Mortgage and notes payable $2,865,346
$2,682,599 Pro rata share of debt on unconsolidated entities
$1,114,253 $1,046,042 June 30 June 30 Additional financial data as
of: 2004 2003 Occupancy of centers (g): consolidated assets 91.20%
91.50% unconsolidated assets 92.10% 93.10% total portfolio 91.70%
92.40% Comparable quarter change in same center sales (g) (h):
consolidated assets 4.20% 0.20% unconsolidated assets 7.70% 2.70%
total portfolio 6.00% 1.50% Sales per square foot (h): consolidated
assets $359 $352 unconsolidated assets $390 $360 total portfolio
$375 $356 Additional financial data for the six months ended:
Acquisitions of property and equipment -- including joint ventures
prorata $40,910 $9,303 Redevelopment and expansions of centers --
including joint ventures prorata $84,740 $73,132 Renovations of
centers -- including joint ventures at prorata $16,711 $5,508
Tenant allowances -- including joint ventures at prorata $5,774
$3,939 Deferred leasing costs -- including joint ventures at
prorata $9,576 $8,972 (g) excludes redevelopment properties --
Crossroads Mall-Boulder, Parklane Mall, Queens expansion,
Scottsdale 101 and La Encantada. (h) includes mall and freestanding
stores. (i) includes construction in process on wholly owned assets
of $158,179 at June 30, 2004 and $268,810 at December 31, 2003. (j)
the Company's prorata share of construction in process on
unconsolidated entities of $9,759 at June 30, 2004 and $8,188 at
December 31, 2003. THE MACERICH COMPANY FINANCIAL HIGHLIGHTS (IN
THOUSANDS, EXCEPT PER SHARE AMOUNTS) For the Three Months For the
Six Months PRORATA SHARE OF Ended June 30, Ended June 30, JOINT
VENTURES Unaudited Unaudited (Unaudited) (All amounts in thousands)
(All amounts in thousands) 2004 2003 2004 2003 Revenues: Minimum
rents $42,931 $38,904 $82,992 $78,675 Percentage rents 1,221 901
2,729 2,288 Tenant recoveries 18,566 16,814 36,455 32,957
Management fee (c) -- 2,666 -- 5,250 Other 1,286 1,221 3,276 2,303
Total revenues 64,004 60,506 125,452 121,473 Expenses: Shopping
center expenses 23,513 19,083 44,212 38,199 Interest expense 15,074
13,753 30,030 27,916 Management company expense (c) -- 1,003 --
3,013 Depreciation and amortization 12,775 11,282 25,133 22,940
Total operating expenses 51,362 45,121 99,375 92,068 Gain (loss) on
sale or writedown of assets 668 (244) 2,083 202 Net income $13,310
$15,141 $28,160 $29,607 For the Three Months For the Six Months
RECONCILIATION OF Ended June 30, Ended June 30, NET INCOME TO FFO
(All amounts in thousands) (All amounts in thousands) (UNAUDITED)
(UNAUDITED) 2004 2003 2004 2003 Net income -- available to common
stockholders $17,113 $28,574 $35,229 $47,999 Adjustments to
reconcile net income to FFO-basic Minority interest 4,070 7,554
8,470 12,699 (Gain) loss on sale of consolidated assets (1,068)
(11,591) (1,094) (11,553) plus gain on land sales -- consolidated
assets 334 27 334 155 (Gain) loss on sale or write-down of assets
from unconsolidated entities (pro rata) (668) 244 (2,083) (202)
plus gain on land sales -- unconsolidated entities (pro rata) 668
38 2,083 433 Depreciation and amortization on consolidated centers
35,311 24,575 69,612 48,489 Depreciation and amortization on joint
ventures and from the management companies (pro rata) 12,775 11,282
25,133 22,940 Less: depreciation on personal property and
amortization of loan costs and interest rate caps (2,699) (2,137)
(5,378) (4,303) Total FFO -- basic 65,836 58,566 132,306 116,657
Additional adjustment to arrive at FFO-diluted Preferred stock
dividends earned 2,213 5,195 4,425 10,391 Effect of
employee/director stock incentive plans FFO-diluted $68,049 $63,761
$136,731 $127,048 Weighted average shares outstanding -- diluted
(d) (e) 76,830 75,203 76,595 75,030 For the Three Months For the
Six Months Ended June 30, Ended June 30, (All amounts in thousands)
(All amounts in thousands) (UNAUDITED) (UNAUDITED) Reconciliation
of EPS 2004 2003 2004 2003 to FFO per diluted share: Earnings per
share $0.29 $0.55 $0.60 $0.92 Per share impact of depreciation and
amortization real estate $0.62 $0.51 $1.23 $1.03 Per share impact
of gain on sale of depreciated assets ($0.01) ($0.17) ($0.01)
($0.17) Per share impact of preferred stock not dilutive to EPS
($0.01) ($0.04) ($0.03) ($0.09) Fully Diluted FFO per share $0.89
$0.85 $1.79 $1.69 THE MACERICH COMPANY FINANCIAL HIGHLIGHTS (IN
THOUSANDS, EXCEPT PER SHARE AMOUNTS) THE MACERICH For the Three
Months For the Six Months COMPANY Ended June 30, Ended June 30,
RECONCILIATION (All amounts in thousands) (All amounts in
thousands) OF NET INCOME (UNAUDITED) (UNAUDITED) TO EBITDA 2004
2003 2004 2003 Net income -- available to common stockholders
$17,113 $28,574 $35,229 $47,999 Interest expense 34,755 32,981
68,088 66,989 Depreciation and amortization 35,311 24,575 69,612
48,489 Equity in income of unconsolidated entities (pro rata)
(13,310) (15,141) (28,160) (29,607) Minority interest 4,070 7,554
8,470 12,699 Loss on early extinguishment of debt -- -- 405 -- Loss
(gain) on sale of assets (1,068) (11,591) (1,094) (11,553)
Preferred dividends 2,213 5,195 4,425 10,391 EBITDA -- Consolidated
centers (k) $79,084 $72,147 $156,975 $145,407 Equity in income of
unconsolidated entities (pro rata) $13,310 $15,141 $28,160 $29,607
Interest expense -- unconsolidated entities (pro rata) 15,074
13,753 30,030 27,916 Depreciation and amortization --
unconsolidated entities (pro rata) 12,775 11,282 25,133 22,940 Loss
(gain) on sale of assets -- unconsolidated entities (pro rata)
(668) 244 (2,083) (202) EBITDA -- Unconsolidated entities (pro
rata) (k) $40,491 $40,420 $81,240 $80,261 EBITDA -- Total (k)
$119,575 $112,567 $238,215 $225,668 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, (All amounts in thousands) (All amounts in
thousands) (UNAUDITED) (UNAUDITED) 2004 2003 2004 2003 EBITDA --
Consolidated centers (k) $79,084 $72,147 $156,975 $145,407 Add:
REIT general and administrative expenses 2,271 2,719 5,294 5,055
Management Company expenses 4,752 4,134 5,598 6,357 EBITDA of
non-comparable centers (10,664) (5,514) (17,287) (9,224)
Consolidated Same Centers -- NOI -- (l) $75,443 $73,486 $150,580
$147,595 EBITDA -- Unconsolidated entities (k) $40,491 $40,420
$81,240 $80,261 EBITDA of non-comparable centers (4,239) (3,976)
(8,261) (7,921) Unconsolidated entities -- Same Centers -- NOI --
(l) $36,252 $36,444 $72,979 $72,340 Total Same Centers -- NOI (l)
$111,695 $109,930 $223,559 $219,935 (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 of
liquidity. 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: The 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.fulldisclosure.com/ Web site: http://www.macerich.com/
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