Macerich Announces Fourth Quarter Results And Earnings Guidance For 2013 PR Newswire SANTA MONICA, Calif., Feb. 6, 2013 SANTA MONICA, Calif., Feb. 6, 2013 /PRNewswire/ --The Macerich Company (NYSE Symbol: MAC) today announced results of operations for the quarter ended December 31, 2012 which included funds from operations ("FFO") diluted of $132.6 million or $.90 per share-diluted compared to $118.8 million or $.83 per share-diluted for the quarter ended December 31, 2011. Adjusted FFO ("AFFO") diluted was $.90 per share-diluted for the quarter ended December 31, 2012 compared to $.87 per share-diluted for the quarter ended December 31, 2011.Net income attributable to the Company was $174.2 million or $1.27 per share-diluted for the quarter ended December 31, 2012 compared to net income attributable to the Company for the quarter ended December 31, 2011 of $163.1 million or $1.23 per share-diluted. A description and reconciliation of FFO per share-diluted and AFFO per share-diluted to EPS-diluted is included in the financial tables accompanying this press release. Recent Highlights: oMall tenant annual sales per square foot increased 5.7% to $517 for the year ended December 31, 2012 compared to $489 for the year ended December 31, 2011. oThe releasing spreads for the year ended December 31, 2012 were up 15.4%. oMall portfolio occupancy was 93.8% at December 31, 2012 compared to 92.7% at December 31, 2011. oAFFO per share-diluted for the year was $3.18, a 10.4% increase over 2011. oDuring the quarter, the Company completed over $1.2 billion of financings with an average term of over eight years and an average interest rate of 3.4%. Commenting on the quarter, Arthur Coppola chairman and chief executive officer of Macerich stated, "It was another good quarter with improving fundamentals highlighted by strong leasing, occupancy gains and continued tenant sales growth. In addition, during the quarter we saw very positive leasing progress on our two major developments, Fashion Outlets of Chicago and Tysons Corner. We were also pleased with our recent capital activity including the acquisition of Kings Plaza and Green Acres Mall and the completion of four major financings which significantly extended our maturity schedule and reduced our floating rate debt." Developments: Construction continues at Fashion Outlets of Chicago, a 526,000 square foot fashion outlet center near O'Hare International Airport scheduled for completion in August 2013. The center is anchored by Bloomingdale's Outlet, Saks Off Fifth, Neiman Marcus Last Call and Forever 21. The project is currently 87% leased with deals in process for another 10%. At Tysons Corner, adjacent to the Company's 2.1 million square foot super regional mall, the Company is building a mixed use project which includes a 524,000 square foot office building, a 430 key luxury residential tower and a 300 room Hyatt Regency hotel. The office tower has a signed lease of 188,000 square feet with Intelsat who has the option to take up to 217,000 square feet in total. The office building is scheduled to open in mid-2014. Financing Activity: During the quarter, the Company closed on over $1.2 billion of financings (at its pro rata share). The financings are summarized below: Prior Loan (in New Loan (in 000's) 000's) MAC Loan Balance Interest Balance Balance Interest Term Maturity Property Ownership Closing @ Rate @ 100% @ Rate in Date Date Pro-Rata Pro-Rata years Kings 100.00% 11/28/2012 - - 500,000 500,000 3.44% 7 12/03/19 Plaza Deptford 100.00% 12/5/2012 172,500 5.41% 205,000 205,000 3.73% 10.3 04/03/23 Mall Queens 51.00% 12/24/2012 161,905 7.30% 600,000 306,000 3.49% 12 01/01/25 Center Santa Monica 100.00% 12/28/2012 - - 240,000 240,000 2.94% 5 01/03/18 Place Total 334,405 1,545,000 1,251,000 3.40% 8.4 Acquisition Activity: On November 28, 2012, the Company closed on the $756 million acquisition of Kings Plaza. The Company has placed a $500 million, seven year fixed rate loan on the property. The loan has an interest rate of 3.44%. The mall tenants' annual sales per square foot are $680. Kings Plaza is anchored by Macy's, Lowe's and Sears and is the only enclosed super regional mall in Brooklyn, New York. The center is currently 96% occupied and has a tenant line-up that includes Aeropostale, American Eagle, Armani Exchange, Forever 21, H&M, MAC, Pink, Swarovski and Victoria's Secret. On January 25, 2013, the Company closed on the acquisition of Green Acres Mall. Green Acres Mall is a 1.8 million square foot super regional mall located in Valley Stream, New York. Green Acres is anchored by Macy's, Macy's Men's, Sears, Kohl's, jcpenney, BJ's Wholesale Club and Walmart. The purchase price was $500 million.The acquisition was funded with a $325 million, eight-year, loan with a fixed interest rate of 3.43%.The balance of the purchase price was funded from cash on hand, and from the Company's line of credit.The mall is 94% occupied and the mall tenants' annual sales per square foot exceed $535. 2013 Earnings Guidance: Management is issuing an estimated 2013 FFO per share-diluted guidance range of $3.32 to $3.42. A reconciliation of estimated EPS to FFO per share -diluted follows: Estimated EPS range: $1.17 to $1.77 Less: estimated Gain on asset sales - .50 to - 1.00 Plus: Real estate depreciation and amortization 2.65 to 2.65 Estimated range for FFO per share-diluted $3.32 to $3.42 This guidance assumes asset sales in the range of $500 million to $1.0 billion during mid-year 2013 with the proceeds used to pay off debt. The FFO per share dilution from the asset sales assumption ranges from $.07 to $.14 for 2013. The above guidance range reflects same center EBITDA growth of 2.75% to 3.25%. There have been no future acquisitions factored into the guidance and there has not been any gain or loss on early extinguishment of debt included in the guidance estimate.| Macerich is a fully integrated self-managed and self-administered real estate investment trust, which focuses on the acquisition, leasing, management, development and redevelopment of regional malls throughout the United States. Macerich now owns approximately 65 million square feet of gross leaseable area consisting primarily of interests in 62 regional shopping centers. Additional information about Macerich can be obtained from the Company's website at www.macerich.com. Investor Conference Call The Company will provide an online Web simulcast and rebroadcast of its quarterly earnings conference call. The call will be available on The Macerich Company's website at www.macerich.com (Investing Section) and through CCBN at www.earnings.com. The call begins today, February 6, 2013 at 10:30 AM Pacific Time. To listen to the call, please go to any of these websites at least 15 minutes prior to the call in order to register and download audio software if needed. An online replay at www.macerich.com (Investing Section) will be available for one year after the call. The Company will publish a supplemental financial information package which will be available at www.macerich.com in the Investing Section. It will also be furnished to the SEC as part of a Current Report on Form 8-K. Note: This release contains statements that constitute forward-looking statements which can beidentified by the use of words, such as "expects," "anticipates," "assumes," "projects,""estimated" and"scheduled"and similar expressions that do not relate to historical matters. Stockholders are cautioned that any such forward-looking statements are not guarantees of future performance and involve risks, uncertainties and other factors that may cause actual results, performance or achievements of the Company to vary materially from those anticipated, expected or projected. Such factors include, among others, general industry, as well as national, regional and local economic and business conditions, which will, among other things, affect demand for retail space or retail goods, availability and creditworthiness of current and prospective tenants, anchor or tenant bankruptcies, closures, mergers or consolidations, lease rates, terms and payments, interest rate fluctuations, availability, terms and cost of financing and operating expenses; adverse changes in the real estate markets including, among other things, competition from other companies, retail formats and technology, risks of real estate development and redevelopment, acquisitions and dispositions; the liquidity of real estate investments, governmental actions and initiatives (including legislative and regulatory changes); environmental and safety requirements; and terrorist activities which could adversely affect all of the above factors. The reader is directed to the Company's various filings with the Securities and Exchange Commission, including the Annual Report on Form 10-K for the year ended December 31, 2011, 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: Results before Impact of Results after Discontinued Discontinued Discontinued Operations (a) Operations (a) Operations (a) For the Three Months For the Three For the Three Months Months Ended December 31, Ended December Ended December 31, 31, Unaudited Unaudited 2012 2011 2012 2011 2012 2011 Minimum rents $140,157 $118,751 $0 ($5,335) $140,157 $113,416 Percentage rents 12,451 10,489 - (691) 12,451 9,798 Tenant recoveries 75,518 64,842 4 (2,853) 75,522 61,989 Management Companies' 10,505 11,942 - - 10,505 11,942 revenues Other income 12,534 11,743 (4) (409) 12,530 11,334 Total revenues 251,165 217,767 0 (9,288) 251,165 208,479 Shopping center and 82,275 67,882 (9) (4,834) 82,266 63,048 operating expenses Management Companies' 18,657 19,560 - - 18,657 19,560 operating expenses Income tax benefit (1,999) (298) - - (1,999) (298) Depreciation and 85,004 70,831 - (3,672) 85,004 67,159 amortization REIT general and administrative 5,187 5,237 - - 5,187 5,237 expenses Interest expense 48,335 47,843 - (4,562) 48,335 43,281 Loss on extinguishment (32) (5,378) 32 3,929 - (1,449) of debt, net Gain (loss) on remeasurement, sale or 164,025 (42,823) 40 16,653 164,065 (26,170) write down of assets, net Co-venture interests (2,061) (2,027) - - (2,061) (2,027) (b) Equity in income of unconsolidated joint 10,657 219,156 - - 10,657 219,156 ventures Income from continuing 186,295 175,640 81 24,362 186,376 200,002 operations Discontinued operations: (Loss) gain on sale, disposition or - - (72) (20,582) (72) (20,582) write down of assets, net Loss from discontinued - - (9) (3,780) (9) (3,780) operations Total loss from discontinued - - (81) (24,362) (81) (24,362) operations Net income 186,295 175,640 - - 186,295 175,640 Less net income attributable to 12,048 12,533 - - 12,048 12,533 noncontrolling interests Net income attributable to the $174,247 $163,107 $0 $0 $174,247 $163,107 Company Average number of shares outstanding - 136,975 132,128 136,975 132,128 basic Average shares outstanding, assuming 147,254 143,165 147,254 143,165 full conversion of OP Units (c) Average shares outstanding - Funds 147,254 143,165 147,254 143,165 From Operations ("FFO") - diluted (c) Per share income - diluted before - - $1.27 $1.40 discontinued operations Net income per $1.27 $1.23 $1.27 $1.23 share-basic Net income per share - $1.27 $1.23 $1.27 $1.23 diluted Dividend declared per $0.58 $0.55 $0.58 $0.55 share FFO - basic (c) (d) $132,577 $118,783 $132,577 $118,783 FFO - diluted (c) (d) $132,577 $118,783 $132,577 $118,783 FFO per share- basic $0.90 $0.83 $0.90 $0.83 (c) (d) FFO per share- $0.90 $0.83 $0.90 $0.83 diluted (c) (d) Adjusted FFO ("AFFO") per share- diluted $0.90 $0.87 $0.90 $0.87 (c)(d) THE MACERICH COMPANY FINANCIAL HIGHLIGHTS (IN THOUSANDS, EXCEPT PER SHARE AMOUNTS) Results of Operations: Results before Impact of Results after Discontinued Discontinued Discontinued Operations (a) Operations (a) Operations (a) For the Twelve For the Twelve For the Twelve Months Months Months Ended December 31, Ended December 31, Ended December 31, Unaudited Unaudited 2012 2011 2012 2011 2012 2011 Minimum rents $503,130 $453,439 ($6,422) ($24,432) $496,708 $429,007 Percentage rents 24,731 20,721 (342) (1,546) 24,389 19,175 Tenant recoveries 276,827 254,380 (3,382) (12,604) 273,445 241,776 Management 41,235 40,404 - - 41,235 40,404 Companies' revenues Other income 46,000 34,357 (454) (1,348) 45,546 33,009 Total revenues 891,923 803,301 (10,600) (39,930) 881,323 763,371 Shopping center and 285,589 263,341 (5,058) (21,043) 280,531 242,298 operating expenses Management Companies' 85,610 86,587 - - 85,610 86,587 operating expenses Income tax benefit (4,159) (6,110) - - (4,159) (6,110) Depreciation and 307,193 269,286 (4,640) (17,211) 302,553 252,075 amortization REIT general and administrative 20,412 21,113 - - 20,412 21,113 expenses Interest expense 183,148 198,025 (6,370) (18,317) 176,778 179,708 Gain (loss) on extinguishment of 119,926 (14,517) (119,926) 3,929 - (10,588) debt, net Gain (loss) on remeasurement, sale 159,575 (76,338) 45,093 54,301 204,668 (22,037) or write down of assets, net Co-venture interests (6,523) (5,806) - - (6,523) (5,806) (b) Equity in income of unconsolidated joint 79,281 294,677 - - 79,281 294,677 ventures Income from continuing 366,389 169,075 (69,365) 74,871 297,024 243,946 operations Discontinued operations: Gain (loss) on sale, disposition or - - 74,833 (58,230) 74,833 (58,230) write down of assets, net Loss from discontinued - - (5,468) (16,641) (5,468) (16,641) operations Total income (loss) from discontinued - - 69,365 (74,871) 69,365 (74,871) operations Net income 366,389 169,075 - - 366,389 169,075 Less net income attributable to 28,963 12,209 - - 28,963 12,209 noncontrolling interests Net income attributable to the $337,426 $156,866 $0 $0 $337,426 $156,866 Company Average number of shares outstanding - 134,067 131,628 134,067 131,628 basic Average shares outstanding, assuming full 144,937 142,986 144,937 142,986 conversion of OP Units (c) Average shares outstanding - Funds From Operations 144,937 142,986 144,937 142,986 ("FFO") - diluted (c) Per share income - diluted before - - $2.03 $1.70 discontinued operations Net income per $2.51 $1.18 $2.51 $1.18 share-basic Net income per share $2.51 $1.18 $2.51 $1.18 - diluted Dividend declared $2.23 $2.05 $2.23 $2.05 per share FFO - basic (c) (d) $577,862 $399,559 $577,862 $399,559 FFO - diluted (c) $577,862 $399,559 $577,862 $399,559 (d) FFO per share- $3.99 $2.79 $3.99 $2.79 basic (c) (d) FFO per share- $3.99 $2.79 $3.99 $2.79 diluted (c) (d) Adjusted FFO ("AFFO") per share- $3.18 $2.88 $3.18 $2.88 diluted (c)(d) THE MACERICH COMPANY FINANCIAL HIGHLIGHTS (IN THOUSANDS, EXCEPT PER SHARE AMOUNTS) The Company has classified the results of operations on dispositions as (a) discontinued operations for the three and twelve months ended December 31, 2012 and 2011. (b) This represents the outside partners' allocation of net income in the Chandler Fashion Center/Freehold Raceway Mall joint venture. 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 (c) 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 of MACWH, LP preferred and common units to the extent they are dilutive to the calculation. 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 (d) 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. Adjusted FFO ("AFFO") excludes the FFO impact of Shoppingtown Mall and Valley View Center for the three and twelve months ended December 31, 2012 and 2011. In December 2011, the Company conveyed Shoppingtown Mall to the lender by a deed-in-lieu of foreclosure. In July 2010, a court-appointed receiver assumed operational control of Valley View Center and responsibility for managing all aspects of the property. Valley View Center was sold by the receiver on April 23, 2012, and the related non-recourse mortgage loan obligation was fully extinguished on that date. On May 31, 2012, the Company conveyed Prescott Gateway to the lender by a deed-in-lieu of foreclosure and the debt was forgiven resulting in a gain on extinguishment of debt of $16.3 million. AFFO excludes the gain on extinguishment of debt on Prescott Gateway for the twelve months ended December 31, 2012. 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 AFFO and AFFO on a diluted basis provide useful supplemental information regarding the Company's performance as they show a more meaningful and consistent comparison of the Company's operating performance and allow investors to more easily compare the Company's results without taking into account non-cash credits and charges on properties controlled by either a receiver or loan servicer. FFO and AFFO on a diluted basis are measures investors find most useful in measuring the dilutive impact of outstanding convertible securities. FFO and AFFO do 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 are not indicative of cash available to fund all cash flow needs. The Company also cautions that FFO and AFFO as presented, may not be comparable to similarly titled measures reported by other real estate investment trusts. THE MACERICH COMPANY FINANCIAL HIGHLIGHTS (IN THOUSANDS, EXCEPT PER SHARE AMOUNTS) Reconciliation of Net income attributable to the Company to FFO and AFFO (d): For the Three Months For the Twelve Months Ended December 31, Ended December 31, Unaudited Unaudited 2012 2011 2012 2011 Net income attributable to $174,247 $163,107 $337,426 $156,866 the Company Adjustments to reconcile net income attributable to the Company to FFO - basic Noncontrolling interests 13,784 14,073 27,359 13,529 in OP (Gain) loss on remeasurement, sale or write (164,025) 42,823 (159,575) 76,338 down of consolidated assets, net plus (loss) gain on undepreciated asset sales - (390) - (390) 2,277 consolidated assets plus non-controlling interests share of (loss) gain on remeasurement, sale (1,636) (1,437) 1,899 (1,441) or write down of consolidated joint ventures, net Loss (gain) on remeasurement, sale or write down of assets from 9,273 (188,245) (2,019) (200,828) unconsolidated entities (pro rata), net plus gain (loss) on undepreciated asset sales - 1,163 (19) 1,163 51 unconsolidated entities (pro rata) Depreciation and amortization on consolidated 85,004 70,831 307,193 269,286 assets Less depreciation and amortization allocable to (4,609) (4,503) (18,561) (18,022) noncontrolling interests on consolidated joint ventures Depreciation and amortization on joint 22,991 25,370 96,228 115,431 ventures (pro rata) Less: depreciation on (3,225) (3,217) (12,861) (13,928) personal property Total FFO - basic 132,577 118,783 577,862 399,559 Additional adjustment to arrive at FFO - diluted: Preferred units - - - - - dividends Total FFO - diluted $132,577 $118,783 $577,862 $399,559 Additional adjustments to arrive at AFFO - diluted (d): Shoppingtown Mall 25 3,179 422 3,491 Valley View Center 11 2,684 (101,105) 8,786 Prescott Gateway - - (16,296) - Total AFFO- diluted $132,613 $124,646 $460,883 $411,836 Reconciliation of EPS to FFO and AFFO per diluted share (d): For the Three Months For the Twelve Months Ended December 31, Ended December 31, Unaudited Unaudited 2012 2011 2012 2011 Earnings per share - diluted $1.27 $1.23 $2.51 $1.18 Per share impact of depreciation and 0.68 0.62 2.57 2.47 amortization of real estate Per share impact of gain on remeasurement, sale or (1.05) (1.02) (1.09) (0.86) write down of assets FFO per share - diluted $0.90 $0.83 $3.99 $2.79 Per share impact - Shoppingtown Mall, Valley 0.00 0.04 (0.81) 0.09 View Center and Prescott Gateway AFFO per share - diluted $0.90 $0.87 $3.18 $2.88 THE MACERICH COMPANY FINANCIAL HIGHLIGHTS (IN THOUSANDS, EXCEPT PER SHARE AMOUNTS) For the Three Months For the Twelve Months Reconciliation of Net income attributable to the Company Ended December 31, Ended December 31, to EBITDA: Unaudited Unaudited 2012 2011 2012 2011 Net income attributable to $174,247 $163,107 $337,426 $156,866 the Company Interest expense - 48,335 47,843 183,148 198,025 consolidated assets Interest expense - unconsolidated entities (pro 21,419 32,175 97,978 123,713 rata) Depreciation and amortization - consolidated 85,004 70,831 307,193 269,286 assets Depreciation and amortization - 22,991 25,370 96,228 115,431 unconsolidated entities (pro rata) Noncontrolling interests 13,784 14,073 27,359 13,529 in OP Less: Interest expense and depreciation and amortization allocable to (7,408) (7,446) (30,019) (29,877) noncontrolling interests on consolidated joint ventures Loss (gain) on extinguishment of debt - 32 5,378 (119,926) 14,517 consolidated entities Gain on extinguishment of debt - unconsolidated - (60) - (7,852) entities (pro rata) (Gain) loss on remeasurement, sale or write (164,025) 42,823 (159,575) 76,338 down of assets - consolidated assets, net Loss (gain) on remeasurement, sale or write down of assets - 9,273 (188,245) (2,019) (200,828) unconsolidated entities (pro rata), net Add: Non-controlling interests share of (loss) (1,636) (1,437) 1,899 (1,441) gain on sale of consolidated assets, net Income tax benefit (1,999) (298) (4,159) (6,110) Distributions on 184 208 783 832 preferred units EBITDA (e) $200,201 $204,322 $736,316 $722,429 Reconciliation of EBITDA to Same Centers - Net Operating Income ("NOI"): For the Three Months For the Twelve Months Ended December 31, Ended December 31, Unaudited Unaudited 2012 2011 2012 2011 EBITDA (e) $200,201 $204,322 $736,316 $722,429 Add: REIT general and 5,187 5,237 20,412 21,113 administrative expenses Management (10,505) (11,942) (41,235) (40,404) Companies' revenues Management Companies' operating 18,657 19,560 85,610 86,587 expenses Lease termination income, straight-line and above/below market (4,515) (7,214) (15,400) (23,324) adjustments to minimum rents of comparable centers EBITDA of (28,479) (34,291) (119,233) (118,831) non-comparable centers Same Centers - NOI (f) $180,546 $175,672 $666,470 $647,570 EBITDA represents earnings before interest, income taxes, depreciation, amortization, noncontrolling interests, extraordinary items, gain (loss) on remeasurement, sale or write down of assets and preferred dividends and includes joint ventures at their pro rata share. Management considers EBITDA to be an appropriate supplemental measure to net income because it (e) 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. 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 (f) out EBITDA from non-comparable centers and eliminating the management companies and the Company's general and administrative expenses. Same center NOI excludes the impact of lease termination income, straight-line and above/below market adjustments to minimum rents. SOURCE Macerich Company Website: http://www.macerich.com Contact: Tom O'Hern, +1-310-899-6331
Macerich Announces Fourth Quarter Results And Earnings Guidance For 2013
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