SANTA MONICA, Calif.,
Feb. 5, 2018 /PRNewswire/ -- The
Macerich Company (NYSE: MAC) today announced results of operations
for the quarter ended December 31,
2017, which included net income attributable to the Company
of $32.8 million or $.23 per share-diluted for the quarter ended
December 31, 2017 compared to net
income attributable to the Company for the quarter ended
December 31, 2016 of $37.1 million or $.26 per share-diluted. For the fourth quarter,
2017, funds from operations ("FFO") diluted was $155.6 million or $1.03 per share-diluted compared to $180.6 million or $1.17 per share-diluted for the quarter ended
December 31, 2016. Net income
and FFO for the quarter ended December 31,
2017 included a $14.5 million
re-valuation reduction of a deferred tax asset as a result of the
lower federal corporate income tax rates adopted by Congress in
December, 2017. A description and reconciliation of EPS per
share-diluted to FFO per share-diluted is included in the financial
tables accompanying this press release.
Results and Capital Highlights
- Mall tenant annual sales per square foot for the portfolio
increased by 4.8% to $660 for the
year ended December 31, 2017 compared
to $630 for the year ended
December 31, 2016.
- The re-leasing spreads for the year ended December 31, 2017 were up 15.2%.
- Mall portfolio occupancy was 95.0% at December 31, 2017 compared to 95.4% at
December 31, 2016 and 94.3% at
September 30, 2017.
- Average rent per square foot increased to $56.97, up 3.8% from $54.87 at December 31,
2016.
"During the quarter our portfolio continued to perform
well. We achieved solid re-leasing spreads and tenant sales
growth plus we saw good occupancy gains on a sequential quarter
over quarter basis," said the Company's chairman and chief
executive officer, Arthur
Coppola. "We remain excited about the leasing
opportunities we see as the digitally native, vertically integrated
brands expand into brick and mortar locations in our dominant top
quality regional malls."
Financing Activity:
The Company has arranged for a
$450 million, 12-year fixed rate loan
on the recently expanded and renovated Broadway Plaza. The
loan is expected to close in the first quarter of 2018.
The Company and its joint venture partner have closed on a
$250 million five year loan on
Fashion District Philadelphia. The loan has a 5 year term and an
initial interest rate of 3.56%.
In December, 2017 the Company closed on a refinancing of Santa
Monica Place with a new five year floating rate loan of
$300 million with an initial rate of
3.13%. The former loan of $215
million was paid off at closing of the new
loan.
2018 Earnings Guidance:
Management is issuing its
diluted EPS and FFO per share guidance for 2018. A
reconciliation of estimated EPS to FFO per share-diluted
follows:
|
2018
range
|
Diluted
EPS
|
$ .77 - $
.87
|
Plus: real estate
depreciation and amortization
|
3.15 -
3.15
|
Less: gain on sale of
dispositions
|
.00
- .00
|
Diluted FFO per
share
|
$3.92 -
$4.02
|
The guidance assumes no asset sales or acquisitions. It
assumes a same center net operating income growth rate in a range
of 2.0 to 2.5%. More details of the guidance assumptions are
included in the Company's Form 8-K supplemental financial
information.
Macerich, an S&P 500 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.
Macerich currently owns 53 million square feet of real estate
consisting primarily of interests in 48 regional shopping centers.
Macerich specializes in successful retail properties in many of the
country's most attractive, densely populated markets with
significant presence in the Pacific
Rim, Arizona, Chicago, and the New
York Metro area to Washington
DC corridor. A recognized leader in sustainability, Macerich
has earned NAREIT's prestigious "Leader in the Light" award every
year from 2014-2017. For the third straight year in 2017 Macerich
achieved the #1 GRESB ranking in the North American Retail Sector,
among many other environmental accomplishments. 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 (Investors Section). The
call begins February 6, 2018 at
11:00 AM Pacific Time. To listen to
the call, please go to the website 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 (Investors 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
Investors 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 or other acts of violence
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,
2016, 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.
(See attached tables)
THE MACERICH
COMPANY
|
FINANCIAL
HIGHLIGHTS
|
(IN THOUSANDS,
EXCEPT PER SHARE AMOUNTS)
|
|
|
|
|
|
|
|
|
|
|
Results of
Operations:
|
|
|
|
|
|
For the Three
Months
|
For the Twelve
Months
|
|
Ended December
31,
|
Ended December
31,
|
|
Unaudited
|
Unaudited
|
|
2017
|
2016
|
2017
|
2016
|
Revenues:
|
|
|
|
|
Minimum
rents
|
$150,591
|
$158,781
|
$594,030
|
$616,295
|
Percentage
rents
|
10,340
|
11,623
|
17,124
|
20,902
|
Tenant
recoveries
|
69,038
|
74,714
|
283,295
|
305,282
|
Other
income
|
15,335
|
16,343
|
55,819
|
59,328
|
Management Companies'
revenues
|
11,439
|
10,539
|
43,394
|
39,464
|
|
|
|
|
|
Total revenues
|
256,743
|
272,000
|
993,662
|
1,041,271
|
|
|
|
|
|
Expenses:
|
|
|
|
|
Shopping center and
operating expenses
|
72,663
|
78,079
|
295,190
|
307,623
|
Management Companies'
operating expenses
|
23,342
|
22,839
|
100,121
|
98,323
|
REIT general and
administrative expenses
|
7,032
|
4,977
|
28,240
|
28,217
|
Depreciation and
amortization
|
85,968
|
89,391
|
335,431
|
348,488
|
Interest
expense
|
44,889
|
42,721
|
171,776
|
163,675
|
Gain on
extinguishment of debt, net
|
-
|
-
|
-
|
(1,709)
|
|
|
|
|
|
Total expenses
|
233,894
|
238,007
|
930,758
|
944,617
|
|
|
|
|
|
Equity in income of
unconsolidated joint ventures
|
28,774
|
19,404
|
85,546
|
56,941
|
Co-venture expense
(a)
|
(2,479)
|
(3,875)
|
(13,629)
|
(13,382)
|
Income tax (expense)
benefit
|
(15,772)
|
2,014
|
(15,594)
|
(722)
|
Gain (loss) on sale
or write down of assets, net
|
5,212
|
(10,702)
|
42,446
|
415,348
|
|
|
|
|
|
Net income
|
38,584
|
40,834
|
161,673
|
554,839
|
Less net income
attributable to noncontrolling interests
|
5,833
|
3,706
|
15,543
|
37,844
|
Net income attributable to
the Company
|
$32,751
|
$37,128
|
$146,130
|
$516,995
|
|
|
|
|
|
Weighted average
number of shares outstanding - basic
|
140,952
|
143,904
|
141,877
|
146,599
|
Weighted average
shares outstanding, assuming full conversion of OP Units
(b)
|
151,180
|
154,470
|
152,293
|
157,320
|
Weighted average
shares outstanding - Funds From Operations ("FFO") - diluted
(b)
|
151,213
|
154,542
|
152,329
|
157,432
|
|
|
|
|
|
Earnings per share
("EPS") - basic
|
$0.23
|
$0.26
|
$1.02
|
$3.52
|
EPS -
diluted
|
$0.23
|
$0.26
|
$1.02
|
$3.52
|
|
|
|
|
|
Dividend declared per
share
|
$0.74
|
$0.71
|
$2.87
|
$2.75
|
|
|
|
|
|
FFO - basic (b)
(c)
|
$155,594
|
$180,633
|
$582,878
|
$642,304
|
FFO - diluted (b)
(c)
|
$155,594
|
$180,633
|
$582,878
|
$642,304
|
FFO - diluted,
excluding extinguishment of debt, net
|
$155,594
|
$180,633
|
$582,878
|
$640,595
|
|
|
|
|
|
FFO per share -
basic (b) (c)
|
$1.03
|
$1.17
|
$3.83
|
$4.08
|
FFO per share -
diluted (b) (c)
|
$1.03
|
$1.17
|
$3.83
|
$4.08
|
FFO per share -
diluted, excluding extinguishment of debt, net
|
$1.03
|
$1.17
|
$3.83
|
$4.07
|
|
|
|
|
|
THE MACERICH
COMPANY
|
FINANCIAL
HIGHLIGHTS
|
(IN THOUSANDS,
EXCEPT PER SHARE AMOUNTS)
|
|
|
|
|
(a)
|
This represents the
outside partners' allocation of net income in the Chandler Fashion
Center/Freehold Raceway Mall joint venture.
|
|
|
(b)
|
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 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, stock warrants and convertible senior notes
using the treasury stock method. It also assumes conversion
ofMACWH, LP preferred and common units to the extent they are
dilutive to the calculation.
|
|
|
(c)
|
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. The National
Association of Real Estate Investment Trusts ("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, impairment write-downs
of real estate and write-downs of investments in an affiliate where
the write-downs have been driven by a decrease in the value of
real estate held by the affiliate and after adjustments for
unconsolidated joint ventures. Adjustments for unconsolidated 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. The Company believes that such a presentation also
provides investors with a more meaningful measure of its operating
results in comparison to the operating results of other real
estate investment trusts ("REITs"). The Company believes that
FFO on a diluted basis is a measure investors find most useful in
measuring the dilutive impact of outstanding convertible
securities. The Company further believes that 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 REITs.
|
THE MACERICH
COMPANY
|
FINANCIAL
HIGHLIGHTS
|
(IN THOUSANDS,
EXCEPT PER SHARE AMOUNTS)
|
|
|
|
|
|
|
|
|
|
|
|
|
Reconciliation of
net income attributable to the Company to FFO attributable to
common
|
|
|
|
|
|
stockholders and
unit holders - basic and diluted (c):
|
|
For the
Three Months
|
For the
Twelve Months
|
|
|
Ended
December 31,
|
Ended
December 31,
|
|
|
Unaudited
|
Unaudited
|
|
|
2017
|
2016
|
2017
|
2016
|
Net income
attributable to the Company
|
|
$32,751
|
$37,128
|
$146,130
|
$516,995
|
Adjustments to
reconcile net income attributable to the Company to FFO
attributable to common
|
|
|
|
|
stockholders and unit holders - basic and diluted:
|
|
|
|
|
|
Noncontrolling interests in the OP
|
|
2,378
|
2,713
|
10,729
|
37,780
|
(Gain)
loss on sale or write down of consolidated assets, net
|
|
(5,212)
|
10,702
|
(42,446)
|
(415,348)
|
Add:
Gain on undepreciated asset sales from consolidated
assets
|
|
837
|
785
|
1,564
|
3,717
|
Loss on
write-down of consolidated non-real estate assets
|
|
-
|
-
|
(10,138)
|
-
|
Non-controlling interests share of gain (loss) on sale or
write-down of consolidated joint ventures, net
|
|
1,209
|
544
|
1,209
|
(1,662)
|
(Gain)
loss on sale or write down of assets from unconsolidated joint
ventures (pro rata), net
|
|
(5,802)
|
16
|
(14,783)
|
189
|
Add:
Gain (loss) on undepreciated asset sales from unconsolidated joint
ventures (pro rata)
|
|
5,984
|
-
|
6,644
|
(2)
|
Depreciation and amortization on consolidated
assets
|
|
85,968
|
89,391
|
335,431
|
348,488
|
Less
depreciation and amortization allocable to noncontrolling
interests on consolidated joint
ventures
|
|
(3,801)
|
(3,839)
|
(15,126)
|
(15,023)
|
Depreciation and amortization on unconsolidated joint ventures (pro
rata)
|
|
44,566
|
46,281
|
177,274
|
179,600
|
Less:
depreciation on personal property
|
|
(3,284)
|
(3,088)
|
(13,610)
|
(12,430)
|
|
|
|
|
|
|
FFO attributable to
common stockholders and unit holders - basic and diluted
|
|
155,594
|
180,633
|
582,878
|
642,304
|
Gain on
extinguishment of debt, net - consolidated assets
|
|
-
|
-
|
-
|
(1,709)
|
FFO attributable to
common stockholders and unit holders excluding extinguishment of
debt, net - diluted
|
$155,594
|
$180,633
|
$582,878
|
$640,595
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reconciliation of
EPS to FFO per diluted share (c):
|
|
|
|
|
|
|
|
For the
Three Months
|
For the
Twelve Months
|
|
|
Ended
December 31,
|
Ended
December 31,
|
|
|
Unaudited
|
Unaudited
|
|
|
2017
|
2016
|
2017
|
2016
|
EPS -
diluted
|
|
$0.23
|
$0.26
|
$1.02
|
$3.52
|
Per
share impact of depreciation and amortization of real
estate
|
|
0.82
|
0.83
|
3.19
|
3.18
|
Per
share impact of (gain) loss on sale or write down of assets,
net
|
|
(0.02)
|
0.08
|
(0.38)
|
(2.62)
|
FFO per share -
diluted
|
|
$1.03
|
$1.17
|
$3.83
|
$4.08
|
Per
share impact of gain on extinguishment of debt, net
|
|
-
|
-
|
-
|
(0.01)
|
FFO per share -
diluted, excluding extinguishment of debt, net
|
|
$1.03
|
$1.17
|
$3.83
|
$4.07
|
|
|
|
|
|
|
THE MACERICH
COMPANY
|
FINANCIAL
HIGHLIGHTS
|
(IN THOUSANDS,
EXCEPT PER SHARE AMOUNTS)
|
|
|
|
|
|
|
|
|
|
|
|
|
Reconciliation of
Net income attributable to the Company to Adjusted
EBITDA:
|
|
|
|
|
|
|
|
For the
Three Months
|
For the
Twelve Months
|
|
|
Ended
December 31,
|
Ended
December 31,
|
|
|
Unaudited
|
Unaudited
|
|
|
2017
|
2016
|
2017
|
2016
|
|
|
|
|
|
|
Net income
attributable to the Company
|
|
$32,751
|
$37,128
|
$146,130
|
$516,995
|
Interest
expense - consolidated assets
|
|
44,889
|
42,721
|
171,776
|
163,675
|
Interest
expense - unconsolidated joint ventures (pro rata)
|
|
25,252
|
25,247
|
101,487
|
97,246
|
Depreciation and amortization - consolidated assets
|
|
85,968
|
89,391
|
335,431
|
348,488
|
Depreciation and amortization - unconsolidated joint ventures (pro
rata)
|
|
44,566
|
46,281
|
177,274
|
179,600
|
Noncontrolling interests in the OP
|
|
2,378
|
2,713
|
10,729
|
37,780
|
Less:
Interest expense and depreciation and amortization
allocable to noncontrolling interests on
consolidated joint ventures
|
|
(6,792)
|
(6,139)
|
(25,007)
|
(24,326)
|
Gain on
extinguishment of debt, net - consolidated assets
|
|
-
|
-
|
-
|
(1,709)
|
(Gain)
loss on sale or write down of assets, net - consolidated
assets
|
|
(5,212)
|
10,702
|
(42,446)
|
(415,348)
|
(Gain)
loss on sale or write down of assets, net - unconsolidated joint
ventures (pro rata)
|
|
(5,802)
|
16
|
(14,783)
|
189
|
Add:
Non-controlling interests share of gain (loss) on sale or
write down of consolidated joint ventures, net
|
|
1,209
|
544
|
1,209
|
(1,662)
|
Income
tax expense (benefit)
|
|
15,772
|
(2,014)
|
15,594
|
722
|
Distributions on preferred units
|
|
98
|
146
|
387
|
575
|
Adjusted EBITDA
(d)
|
|
$235,077
|
$246,736
|
$877,781
|
$902,225
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reconciliation of
Adjusted EBITDA to Net Operating Income ("NOI") and to NOI - Same
Centers:
|
|
|
|
|
|
|
For the
Three Months
|
For the
Twelve Months
|
|
|
Ended
December 31,
|
Ended
December 31,
|
|
|
Unaudited
|
Unaudited
|
|
|
2017
|
2016
|
2017
|
2016
|
Adjusted EBITDA
(d)
|
|
$235,077
|
$246,736
|
$877,781
|
$902,225
|
REIT
general and administrative expenses
|
|
7,032
|
4,977
|
28,240
|
28,217
|
Management Companies' revenues
|
|
(11,439)
|
(10,539)
|
(43,394)
|
(39,464)
|
Management Companies' operating expenses
|
|
23,342
|
22,839
|
100,121
|
98,323
|
Straight-line and above/below market adjustments
|
|
(4,545)
|
(11,284)
|
(29,531)
|
(38,309)
|
NOI - All
Centers
|
|
249,467
|
252,729
|
933,217
|
950,992
|
NOI of
non-Same Centers
|
|
(9,521)
|
(18,326)
|
(57,606)
|
(98,657)
|
NOI - Same Centers
(e)
|
|
$239,946
|
$234,403
|
$875,611
|
$852,335
|
|
|
|
|
|
|
|
|
(d)
|
Adjusted EBITDA
represents earnings before interest, income taxes, depreciation,
amortization, noncontrolling interests in the OP, extraordinary
items, loss (gain) on remeasurement, sale or write down of assets,
loss (gain) on extinguishment of debt and preferred dividends and
includes joint ventures at their pro rata share. Management
considers Adjusted 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. The Company believes that Adjusted 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. The Company also cautions that
Adjusted EBITDA, as presented, may not be comparable to similarly
titled measurementsreported by other companies.
|
|
|
(e)
|
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 Adjusted
EBITDA and eliminating the impact of the management companies'
revenues and operating expenses, the Company's general and
administrative expenses and the straight-line and above/below
market adjustments to minimum rents and subtracting out NOI
from non-Same Centers.
|
View original content with
multimedia:http://www.prnewswire.com/news-releases/macerich-announces-quarterly-results-300593691.html
SOURCE Macerich Company