Macerich reports income available to common shareholders of US$34,000 in quarter ending March 31 from loss available to common stockholders of US$6.4M a year ago; CEO 'optimistic' about company's operating performance
SANTA MONICA, California
May 5, 2011
– The Macerich Company (NYSE Symbol: MAC) today announced results of operations for the quarter ended March 31, 2011 which included total funds from operations ("FFO") diluted of $73.7 million or $.52 per share-diluted, compared to $.66 per share-diluted for the quarter ended March 31, 2010. Net income available to common stockholders for the quarter ended March 31, 2011 was $34,000 or $.00 per share-diluted compared to net loss available to common stockholders of $6.4 million or $.08 per share-diluted for the quarter ended March 31, 2010. Negatively impacting net income and FFO during the quarter ended March 31, 2011 was a $9.1 million, or $.064 per share prepayment penalty on the early debt extinguishment of the 9.1% participating loan on Chesterfield Towne Center. 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 or loss to FFO and net income or loss per common share-diluted ("EPS") to FFO per share-diluted is included in the financial tables accompanying this press release.
Mall occupancy increased to 92.5% at March 31, 2011, up from 91.1% at March 31, 2010.
Annual mall tenant sales per square foot were $449 per foot, a 7.9% increase compared to the twelve months ended March 31, 2010.
The Company closed three acquisitions during the quarter.
The Company entered into a new $1.5 billion line of credit at a current rate of LIBOR + 2.00%.
Commenting on results, Arthur Coppola chairman and chief executive officer of Macerich stated, "We are optimistic about our operating performance and continue to see strong operating results, with occupancies up significantly, good leasing activity and a continued trend of solid retail sales growth."
Kierland Commons - On February 24, 2011, Macerich along with its joint venture partner bought an additional 51% interest in Kierland Commons from Dallas-based Woodbine Development Corporation and the Herberger Interests of Phoenix/Scottsdale. This transaction effectively increased Macerich's ownership interest in Kierland Commons from 24.5% up to 50% and the Company's pro rata share of the purchase price included $34.2 million of cash, in addition to assuming debt of $18.6 million.
Kierland Commons, which opened in 2000, is a 38 acre mixed-use retail anchored development that produces annual shop tenant sales of $625 per square foot. Occupancy for the project's 316,000 square feet of retail space is 98%.
Atlas Park - On January 28, 2011, Macerich and an affiliate of private investment firm Walton Street Capital, LLC submitted the successful bid at a foreclosure auction of The Shops at Atlas Park. The acquisition was completed on February 28, 2011. The 50/50 joint venture acquired ownership of the property at auction for $53.75 million. Macerich will manage and lease the property.
The Shops at Atlas Park is an approximately 400,000 square-foot mixed-used neighborhood center that opened in 2006 in Queens, New York. The Shops at Atlas Park includes approximately 216,000 square feet of inline retail space, 142,000 square feet of major and anchor retail space, and approximately 41,000 square feet of office space. Tenants include Regal Cinemas, California Pizza Kitchen, Chico's, Coldwater Creek, Gymboree, J. Jill and Joseph A. Bank.
Desert Sky Mall – On February 28, 2011, Macerich purchased the remaining 50% ownership interest in Desert Sky Mall, increasing its ownership of the asset to 100%. The total purchase price was $27.6 million which included the assumption of a pro rata share of the property debt. Concurrent with the purchase of the partnership interest, the $51.5 million loan on the property was paid off.
Desert Sky Mall is a 900,000 square-foot, classic indoor shopping center located in West Phoenix that features a unique merchandise mix geared toward Hispanic consumers. Key retailers include La Curacao, a Latin-focused department store, and Cinema Latino, a multi-screen theater complex, plus Sears, Dillard's and Burlington Coat Factory.
On February 1, 2011, the Company successfully completed the early extinguishment of the $50.3 million loan on Chesterfield Towne Center. The loan had an interest rate of 9.1% with a maturity date of January 1, 2024. The prepayment cost associated with that early extinguishment of debt, including the participation feature, was $9.1 million and was reflected as a charge to net income and FFO during the quarter.
The Company has also obtained a commitment for a $200 million loan on Los Cerritos Center. The loan will have a fixed interest rate of 4.46% and has a term of seven years and is expected to close in early June.
On May 2, 2011, the Company closed on a new $1.5 billion unsecured line of credit facility. Based on the Company's current leverage level, the facility has an interest rate of LIBOR + 2.00%. The line of credit has a four year term, extendable to five years, and can be expanded up to a total facility of $2.0 billion.
On April 28, 2011, the Board of Directors of the Company declared a quarterly cash dividend of $.50 per share of common stock. The dividend is payable on June 8, 2011 to stockholders of record at the close of business on May 10, 2011.
Management is reconfirming its previously issued FFO guidance range of $2.78 to $2.94.
A reconciliation of FFO to EPS follows:
Estimated range for FFO per share:
$2.78 to $2.94
Less: real estate depreciation and amortization
$2.40 - $2.40
Estimated EPS range:
$ .38 to $ .54
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 owns approximately 72 million square feet of gross leaseable area consisting primarily of interests in 70 regional malls. 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, May 5, 2011 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 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 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, 2010, 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.