Macerich Announces Quarterly Results and Increases 2004 Guidance
SANTA MONICA, Calif., Nov. 5 /PRNewswire-FirstCall/ -- The Macerich
Company (NYSE:MAC) today announced results of operations for the
quarter and nine months ended September 30, 2004 which included
funds from operations ("FFO") per share -- diluted increasing 12%
to $.95 compared to $.85 for the quarter ended September 30, 2003
and increasing to $2.73 for the nine months ended September 30,
2004 compared to $2.54 for the comparable period in 2003. Total FFO
-- diluted increased by 14% to $73 million for the quarter compared
to $64 million for the quarter ended September 30, 2003 and to $210
million for the nine months ended September 30, 2004 compared to
$191 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 September 30, 2004 was
$17.3 million or $.29 per share-diluted compared to $39.7 million
or $.69 per share-diluted for the quarter ended September 30, 2003.
Net income in the quarter ended September 30, 2003 was positively
impacted by net gain on sales of consolidated assets of $23 million
or $.31 per share-diluted compared to a net loss on asset sales of
$.1 million or $.00 per share for the quarter ended September 30,
2004. The gain on sale of assets was primarily due to the sale of
Bristol Center in August 2003. For the nine months ended September
30, 2004 net income was $52 million or $.89 per share-diluted
compared to $88 million or $1.64 per share-diluted for the nine
months ended September 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
404,000 square feet of specialty store leases at average initial
rents of $34.39 per square foot. First year rents on mall and
freestanding store leases signed during the quarter were 19% higher
than average expiring rents. * Total same center tenant sales, for
the quarter ended September 30, 2004, were up 5.5% compared to
sales levels for the quarter ended September 30, 2003. * Portfolio
occupancy at September 30, 2004 was 91.8% compared to 92.9% at
September 30, 2003. On a same center basis occupancy was 92.0% at
September 30, 2004 compared to 92.4% at September 30, 2003. * The
Company announced an increased quarterly dividend of $.65 per share
payable on December 9, 2004 to stockholders of record on November
15, 2004. This represents the 10th consecutive year that Macerich
has increased its dividend. Commenting on results and recent
events, Arthur Coppola, President and Chief Executive Officer of
Macerich stated, "The quarter was highlighted by continued strong
leasing activity including very positive releasing spreads.
Occupancy continues to be strong. "We are very near final
completion on the Queens Center renovation and expansion and expect
to see a 12% return on cost. That project will help fuel strong FFO
growth in 2005 and beyond. In addition, we continue to make
significant progress on our other development and redevelopment
projects which provide a very strong internal pipeline for growth."
Redevelopment and Development Activity At Queens Center, the
multi-phased $275 million redevelopment and expansion nears
completion. The grand opening is set for the weekend of November
19th. The project increases the size of the center from 620,000
square feet to approximately one million square feet. As part of
the redevelopment, Macy's has added a fifth level to their store
increasing their size to approximately 365,000 square feet and JC
Penney has expanded their presence from 137,000 to 202,000 square
feet by building a new store. During the course of the last 12
months, 92 new or expanded stores have opened at Queens Center. New
tenants recently opened include Banana Republic, Godiva, Guess,
Coach, Aldo Shoes, Club Monaco, Benetton, American Eagle
Outfitters, and Bostonian. Tenants who have recently expanded their
presence at Queens Center include, The Gap, H & M, Victoria's
Secret and Forever 21. Tenants which are expected to open shortly
after the Grand Opening include Urban Outfitters, Applebee's
Neighbor Bar & Grill, GNC and Queens Diner. Leasing activity
has been robust as the overall property is 98% leased. By December
31, 2004, 91% of all spaces are expected to be open and operating
with the remaining 7% of leased spaces expected to open during the
first and second quarter of 2005. At Fresno Fashion Fair, the
Company is pursuing entitlements for the addition of a 92,780
square foot lifestyle retail center. Subject to the timing of
entitlements, the planned opening of this expansion is late 2005.
At Washington Square in suburban Portland the Company is proceeding
with an expansion project which consists of the addition of 80,000
square feet of shop space. The expansion is scheduled to start in
January 2005 with substantial completion earmarked for the fourth
quarter of 2005. During the quarter, the Company unveiled its plans
for San Tan Village. The 500 acre master planned Gilbert project
will unfold during several phases of development which will be
driven by market and retailers' needs. Upon full completion, San
Tan Village will represent 3,000,000 square feet of retail space.
Phase I, featuring a 29 acre full service power center, will open a
Wal-Mart in 2005 followed by a Sam's Club later in the year. Phase
II represents an additional 308,000 square feet of gross leaseable
area. Leases have been signed with OfficeMax, Jo-Ann Superstore,
Bed Bath & Beyond, Marshall's and DSW Designer Shoes
representing 157,000 square feet. Phase II is projected to open
September 2005. The regional shopping center component of San Tan
Village sits on 120 acres representing 1.3 million square feet. The
center's multi-faceted design will incorporate the very best
elements from other retail formats including the successful
traditional enclosed mall anchored by Dillard's and May Co.'s
Robinsons-May, an open-air lifestyle center and an 18-screen
Harkins Theatre entertainment district. Infrastructure improvements
are underway. The entertainment district could open as early as
2006 followed by a projected Fall 2007 opening for the majority of
the balance of the center. 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.
Fiesta Mall is under contract for acquisition, with the closing
expected in November. The acquisition of Fiesta will further
solidify Macerich's dominance in the Phoenix market. Fiesta is a
1,000,000 square foot super regional mall. It is anchored by
Dillard's, Macy, Sears, Robinson May. The malls shops have annual
sales of $362. The purchase price is $135 million. Concurrent with,
or shortly after the planned November closing, the Company expects
to place a 10 year $84 million fixed rate loan at 4.87%. Financing
Activity 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 its year 2004 FFO per share
guidance range and revising its EPS guidance as follows: Range per
share: Fully Diluted EPS $1.71 .........$1.78 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 $3.88..........$3.95 In addition management
is also providing guidance for 2005. Management currently estimates
that FFO per share for 2005 will be in the range of $4.20 to $4.30
and EPS is estimated to be in the range of $2.05 to $2.15. Guidance
for 2005 and reconciliation of EPS to FFO per share and to EBITDA
per share: Range per share: Fully Diluted EPS $2.05.........$2.15
Plus: Real Estate Depreciation and Amortization $2.25.........$2.25
Less: impact of preferred shares (not dilutive to EPS)
($.10)........($.10) Less: Gain on Sale of Assets $.00..........
$.00 Fully Diluted FFO per share $4.20.........$4.30 Plus: Interest
Expense per share $3.15.........$3.25 Plus: Non real estate
depreciation, income taxes and ground rent expense per share
$.16...........$.16 EBITDA per share $7.51.........$7.71 Less:
management company expenses, REIT General and administrative
expenses and EBITDA of non-comparable centers ($1.00)......($1.10)
Same center EBITDA per share $6.51.........$6.61 This range is
based on many assumptions, including the following: Management
expects 2005 same center EBITDA to grow at a 2.5% to 3.0% rate
compared to 2004 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 has assumed short-term LIBOR interest rates will
increase to 3.0% by year-end 2005. 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 or are under contract as of
November 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,
November 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) For the For the For the Results Three Months Three
Months Three Months of Operations: Ended Sept. 30 Ended Sept. 30
Ended Sept. 30 Unaudited Unaudited 2004 2003 2004 2003 2004 2003
Minimum Rents (e) 84,028 71,720 (44) (435) 83,984 71,285 Percentage
Rents 3,338 2,071 -- -- 3,338 2,071 Tenant Recoveries 37,194 39,574
(2) (34) 37,192 39,540 Other Income 3,858 4,356 (9) (33) 3,849
4,323 Total Revenues 128,418 117,721 (55) (502) 128,363 117,219
Shopping center and operating expenses (c) 39,395 42,940 (4) (208)
39,391 42,732 Depreciation and amortization 35,644 25,364 (3) (87)
35,641 25,277 General, administrative and other expenses (c) 2,788
1,687 -- -- 2,788 1,687 Interest expense 37,507 31,858 -- -- 37,507
31,858 Loss on early extinguishment of debt 1,237 126 -- -- 1,237
126 Gain (loss) on sale or writedown of assets (101) 23,015 21
(22,289) (80) 726 Pro rata income (loss) of unconsolidated entities
(c) 12,090 13,252 -- -- 12,090 13,252 Income (loss) of the
Operating Partnership from continuing operations 23,836 52,013
(27)(22,496) 23,809 29,517 Discontinued Operations: Gain (loss) on
sale of asset -- -- (21) 22,289 (21) 22,289 Income from
discontinued operations -- -- 48 207 48 207 Income before minority
interests 23,836 52,013 -- -- 23,836 52,013 Income allocated to
minority interests 4,180 10,214 -- -- 4,180 10,214 Net income
before preferred dividends 19,656 41,799 -- -- 19,656 41,799
Dividends earned by preferred stockholders (a) 2,358 2,067 -- --
2,358 2,067 Net income to common stockholders 17,298 39,732 -- --
17,298 39,732 Average # of shares outstanding - basic 58,673 53,396
58,673 53,396 Average shares outstanding,- basic, assuming full
conversion of OP Units (d) 72,851 67,042 72,851 67,042 Average
shares outstanding - diluted for FFO (d) 76,837 75,307 76,837
75,307 Per share income-diluted before discontinued operations --
-- 0.29 0.39 Net income per share-basic 0.29 0.74 0.29 0.74 Net
income per share-diluted 0.29 0.69 0.29 0.69 Dividend declared per
share 0.61 0.57 0.61 0.57 Funds from operations "FFO" (b) (d)-
basic 70,529 61,696 70,529 61,696 Funds from operations "FFO" (a)
(b) (d) - diluted 72,887 63,763 72,887 63,763 FFO per share- basic
(b) (d) 0.97 0.92 0.97 0.92 FFO per share- diluted (a) (b) (d) 0.95
0.85 0.95 0.85 percentage change from prior year - same period:
12.03% 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) For the For the For the
Results Nine Months Nine Months Nine Months of Operations: Ended
Sept. 30 Ended Sept. 30 Ended Sept. 30 Unaudited Unaudited 2004
2003 2004 2003 2004 2003 Minimum Rents (e) 240,101 217,788 (212)
(2,551) 239,889 215,237 Percentage Rents 8,165 5,041 -- -- 8,165
5,041 Tenant Recoveries 120,035 115,329 (4) (336) 120,031 114,993
Other Income 12,767 12,233 (168) (58) 12,599 12,175 Total Revenues
(e) 381,068 350,391 (384) (2,945) 380,684 347,446 Shopping center
and operating expenses ( c) 129,774 125,150 (16) (856) 129,758
124,294 Depreciation and amortization 105,256 73,853 (48) (460)
105,208 73,393 General, administrative and other expenses (c) 8,084
6,742 -- -- 8,084 6,742 Interest expense 105,595 98,847 -- --
105,595 98,847 Loss on early extinguishment of debt 1,642 126 -- --
1,642 126 Gain on sale or writedown of assets 994 34,567
(295)(22,119) 699 12,448 Pro rata income of unconsolidated entities
(c) 40,250 42,859 -- -- 40,250 42,859 Income (loss) of the
Operating Partnership from continuing operations 71,961 123,099
(615)(23,748) 71,346 99,351 Discontinued Operations: Gain on sale
of asset -- -- 295 22,119 295 22,119 Income from discontinued
operations -- -- 320 1,629 320 1,629 Income before minority
interest 71,961 123,099 -- -- 71,961 123,099 Income allocated to
minority interests 12,650 22,913 -- -- 12,650 22,913 Net income
before preferred dividends 59,311 100,186 -- -- 59,311 100,186
Dividends earned by preferred stockholders (a) 6,783 12,458 -- --
6,783 12,458 Net income to common stockholders 52,528 87,728 -- --
52,528 87,728 Average # of shares outstanding - basic 58,479 52,305
58,479 52,305 Average shares outstanding, -basic, assuming full
conversion of OP Units (d) 72,669 65,995 72,669 65,995 Average
shares outstanding - diluted for FFO (d) 76,681 75,124 76,681
75,124 Per share income-diluted before discontinued operations --
-- 0.88 1.32 Net income per share- basic 0.90 1.68 0.90 1.68 Net
income per share-diluted 0.89 1.64 0.89 1.64 Dividend declared per
share 1.83 1.71 1.83 1.71 Funds from operations "FFO" (b) (d)-
basic 202,835 178,351 202,835 178,351 Funds from operations "FFO"
(a) (b) (d) - diluted 209,618 190,809 209,618 190,809 FFO per
share- basic (b) (d) 2.79 2.70 2.79 2.70 FFO per share- diluted (a)
(b) (d) 2.73 2.54 2.73 2.54 percentage change from prior year -
same period: 7.63% (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 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 2004 as it would
be antidilutive to those calculations. 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
nine months ended September 30, 2004 by $537 and $2,955
respectively, or by $.01 per share and $.04 per share,
respectively. Additionally, the impact of SFAS No. 141 increased
FFO for the three and nine months ended September 30, 2004 by $4.2
million and $7.9 million, respectively, or by $.05 per share and
approximately $.10 per share, respectively. The inclusion of gains
on sales of peripheral land increased FFO for the 3 and 9 months
ended September 30, 2003 by $663 and $1,252, respectively, or by
approximately $.01 per share and $.02 per share, respectively.
Additionally, the impact of SFAS 141 increased FFO for the three
and nine months ended September 30, 2003 by $1.2 million and $3.5
million, respectively, or by $.015 per share and $.047 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 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 can 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. The impact on diluted EPS for the three and nine
months ended September 30, 2004 was approximately $.06 and $.11 per
share respectively. The impact on diluted EPS for the three and
nine months periods ending September 30, 2003 was approximately
$.02 per share and $.05 per share, respectively. In accordance with
the NAREIT definition of FFO, the impact of this accounting
treatment is included in FFO. (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 September 30,
2003 and the results for the period July 1 to September 30, 2003
have been reclassified to discontinued operations. The sale of
Bristol Center resulted in a gain on sale of asset of $22.3
million. Sept. 30 Dec. 31 Summarized Balance Sheet Information 2004
2003 (UNAUDITED) Cash and cash equivalents $52,706 $47,160
Investment in real estate, net (i) $3,382,285 $3,186,725
Investments in unconsolidated entities (j) $614,728 $577,908 Total
Assets $4,400,373 $4,145,593 Mortgage and notes payable $2,993,430
$2,682,599 Pro rata share of debt on unconsolidated entities
$1,161,043 $1,046,042 Sept. 30 Sept. 30 Additional financial data
as of: 2004 2003 Additional financial data as of: Occupancy of
centers (g): consolidated assets 91.40% 91.60% unconsolidated
assets 92.10% 93.90% total portfolio 91.80% 92.90% Comparable
quarter change in same center sales (g) (h): consolidated assets
3.90% 0.00% unconsolidated assets 7.00% 3.50% total portfolio 5.50%
1.90% Sales per square foot (h): consolidated assets $364 $345
unconsolidated assets $392 $366 total portfolio $378 $356
Additional financial data for the nine months ended: Acquisitions
of property and equipment - including joint ventures prorata
$197,313 $152,370 Redevelopment and expansions of centers -
including joint ventures prorata $118,545 $121,377 Renovations of
centers - including joint ventures at prorata $22,847 $12,016
Tenant allowances - including joint ventures at prorata $11,437
$5,675 Deferred leasing costs - including joint ventures at prorata
$13,825 $14,074 (g) excludes redevelopment properties - Crossroads
Mall - Boulder, Queens, Scottsdale 101, La Encantada, Santa Monica
Place and Parklane Mall. (h) includes mall and freestanding stores.
(i) includes construction in process on wholly owned assets of
$160,872 at September 30, 2004 and $268,810 at December 31, 2003.
(j) the Company's prorata share of construction in process on
unconsolidated entities of $26,468 at September 30, 2004 and $8,188
at December 31, 2003. For the Three Months For the Nine Months
PRORATA SHARE OF Ended Sept. 30, Ended Sept. 30, JOINT VENTURES
Unaudited Unaudited (Unaudited) (All amounts in thousands) (All
amounts in thousands) 2004 2003 2004 2003 Revenues: Minimum rents
$45,794 $38,978 $128,786 $117,655 Percentage rents 1,725 1,250
4,454 3,538 Tenant recoveries 19,544 17,048 55,999 50,005
Management fee ( c ) -- -- -- 5,250 Other 1,496 1,077 4,772 3,381
Total revenues 68,559 58,353 194,011 179,829 Expenses: Shopping
center expenses 23,046 19,425 67,257 57,625 Interest expense 17,906
14,395 47,936 42,311 Management company expense ( c ) -- -- --
3,014 Depreciation and amortization 15,854 11,240 40,988 34,180
Total operating expenses 56,806 45,060 156,181 137,130 Gain (loss)
on sale or writedown of assets 498 (41) 2,581 160 Loss on early
extinguishment of debt (161) -- (161) -- Net income 12,090 13,252
40,250 42,859 RECONCILIATION OF For the Three Months For the Nine
Months NET INCOME Ended Sept. 30, Ended Sept. 30, TO FFO (All
amounts in thousands)(All amounts in thousands) (UNAUDITED)
(UNAUDITED) 2004 2003 2004 2003 Net income - available to common
stockholders $17,298 $39,732 $52,528 $87,728 Adjustments to
reconcile net income to FFO- basic Minority interest 4,180 10,214
12,650 22,913 (Gain) loss on sale of wholly owned assets 101
(23,015) (994) (34,567) Add Gain (loss) on land sales -
consolidated assets 5 705 339 859 (Gain) loss on sale or write-down
of assets from unconsolidated entities (pro rata) (498) 41 (2,581)
(160) Add Gain (loss) on land sales - unconsolidated assets 533
(41) 2,616 392 Depreciation and amortization on wholly owned
centers 35,644 25,364 105,256 73,853 Depreciation and amortization
on joint ventures and from the management companies (pro rata)
15,854 11,240 40,988 34,180 Less: depreciation on personal property
and amortization of loan costs and interest rate caps (2,588)
(2,544) (7,967) (6,847) Total FFO - basic 70,529 61,696 202,835
178,351 Additional adjustment to arrive at FFO - diluted Preferred
stock dividends earned 2,358 2,067 6,783 12,458 Effect of
employee/director stock incentive plans -- -- -- -- FFO - diluted
72,887 63,763 209,618 190,809 Weighted average shares outstanding -
diluted (d) 76,837 75,307 76,681 75,124 For the Three Months For
the Nine Months Ended Sept. 30 Ended Sept. 30 (All amounts in
thousands) (All amounts in thousands) (UNAUDITED) (UNAUDITED)
Reconciliation of EPS to FFO per diluted share: 2004 2003 2004 2003
Earnings per share $0.29 $0.69 $0.89 $1.64 Per share impact of
depreciation and amortization real estate $0.67 $0.46 $1.90 $1.35
Per share impact of gain on sale of depreciated assets $0.00
($0.30) ($0.01) ($0.45) Per share impact of preferred stock not
dilutive to EPS ($0.01) $0.00 ($0.05) $0.00 Fully Diluted FFO per
share $0.95 $0.85 $2.73 $2.54 THE MACERICH COMPANY RECONCILIATION
OF NET INCOME For the Three Months For the Nine Months TO EBITDA
Ended Sept. 30, Ended Sept. 30, (All amounts in thousands) (All
amounts in thousands) (UNAUDITED) (UNAUDITED) 2004 2003 2004 2003
Net income - available to common stockholders 17,298 39,732 52,528
87,728 Interest expense 37,507 31,858 105,595 98,847 Interest
expense - unconsolidated entities (pro rata) 17,906 14,395 47,936
42,311 Depreciation and amortization - wholly-owned centers 35,644
25,364 105,256 73,853 Depreciation and amortization -
unconsolidated entities (pro rata) 15,854 11,240 40,988 34,180
Minority interest 4,180 10,214 12,650 22,913 Loss on early
extinguishment of debt 1,237 126 1,642 126 Loss on early
extinguishment of debt - unconsolidated entities (pro rata) 161 --
161 -- Loss (gain) on sale of assets - wholly-owned centers 101
(23,015) (994) (34,567) Loss (gain) on sale of assets -
unconsolidated entities (pro rata) (498) 41 (2,581) (160) Preferred
dividends 2,358 2,067 6,783 12,458 EBITDA (k) $131,748 $112,022
$369,964 $337,689 THE MACERICH COMPANY RECONCILIATION OF EBITDA TO
SAME CENTERS - NET OPERATING INCOME ("NOI") For the Three Months
For the Nine Months Ended Sept. 30, Ended Sept. 30, (All amounts in
thousands) (All amounts in thousands) (UNAUDITED) (UNAUDITED) 2004
2003 2004 2003 EBITDA (k) $131,748 $112,022 $369,964 $337,689 Add:
REIT general and administrative expenses 2,788 1,687 8,084 6,742
Management Company expenses (317) 2,960 5,280 7,768 EBITDA of
non-comparable centers (25,383) (9,135) (53,992) (29,944) SAME
CENTERS - Net operating income ("NOI") (l) $108,836 $107,534
$329,336 $322,255 (k) EBITDA represents earnings before interest,
income taxes, depreciation, amortization, minority interest,
extraordinary items, gain (loss) on sale of assets, gain (loss) on
early extinguishment of debt 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: Macerich Company CONTACT:
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.fulldisclosure.com/ Web site: http://www.macerich.com/
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