SANTA MONICA, Calif., 2016-May-06 — /EPR Retail News/ — The Macerich Company (NYSE Symbol: MAC) today announced results of operations for the quarter ended March 31, 2016, which included funds from operations (“FFO”) diluted of $141.0 million or $.87 per share-diluted compared to $133.5 million or $.79 per share-diluted for the quarter ended March 31, 2015.
Net income attributable to the Company was $421 million or $2.76 per share-diluted for the quarter ended March 31, 2016 compared to net income attributable to the Company for the quarter ended March 31, 2015 of $24.6 million or $.15 per share-diluted. Included in net income in the first quarter of 2016 results is a $434 million or $2.67 per share of gain, primarily from the sale of joint venture interests in four malls during the quarter.
A description and reconciliation of FFO per share-diluted to EPS-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 were $625 for the year ended March 31, 2016 compared to $607 for the year ended March 31, 2015.
- The releasing spreads for the year ended March 31, 2016 were up 15.4%.
- Mall portfolio occupancy was 95.1% at March 31, 2016 compared to 95.4% at March 31, 2015.
- On March 1, 2016 the Company, in a 50/50 joint venture, closed on the purchase of Country Club Plaza in Kansas City, MO. The total purchase price was $660 million and the Company’s pro rata share of the purchase price was $330 million.
- On April 13, 2016 the Company sold Capitola Mall for $93 million.
- On April 19, 2016 the Company completed an accelerated stock repurchase program resulting in the retirement of 5.1 million shares of the Company at an average cost of $78.69.
“The first quarter reflected continued strong performance, as evidenced by the strength of our portfolio’s key operating metrics,” said Arthur Coppola, chairman and chief executive officer of Macerich.
“Furthermore, we were able to return capital to stockholders and continue to reinvest in our best assets at what we firmly believe is a significant discount to underlying property value through stock repurchases.
Looking ahead, the Company remains keenly focused on driving strong same-center net operating income growth, executing on its value-add redevelopment pipeline and achieving superior stockholder returns.”
Joint Ventures, Special Dividends and Stock Repurchase
In October, 2015 and January, 2016 the Company closed on previously announced joint ventures that included contributing eight properties, valued at$5.4 billion (at 100%), into separate joint ventures with GIC (40% interest in five assets) and Heitman (49% interest in three assets).
Cash proceeds to Macerich from the transactions totaled $2.3 billion, which included $1.1 billion of excess financing proceeds. Part of the cash proceeds from the joint ventures was used in December, 2015 and January, 2016 to pay two special dividends of $2.00 each.
In addition, the Company has used a portion of the joint venture proceeds to complete a total of $800 million of share repurchases under the Company’s recently authorized $1.2 billion share repurchase program.
During a period from November 13, 2015 to January 19, 2016 the Company repurchased 5.11 million shares of Macerich common stock at an average share price of $78.26. From the period of February 18, 2016 to April 19, 2016 the Company retired 5.08 million shares at an average price of $78.69.
Financing Activity:
Subsequent to the closing of the purchase of Country Club Plaza, a $320 million 10 year fixed rate loan with an interest rate of 3.85% was placed on the asset.
The Company has committed to a $375 million loan on The Shops at North Bridge. The loan is a 12 year fixed rate loan with an interest rate of 3.68% that is expected to close in May, 2016. It will pay off the existing loan of $189 million that has an interest rate of 7.50%.
2016 Earnings Guidance:
Management is reaffirming its previous estimate of diluted EPS and FFO per share guidance for 2016. A reconciliation of estimated EPS to FFO per share-diluted follows:
The only major assumption that changed in the guidance is that the sale of Capitola Mall in April and its dilutive impact on FFO has now been considered in the above guidance range.
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 55 million square feet of real estate consisting primarily of interests in 50 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.
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 Wednesday, May 4, 2016 at 10:30 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, 2015, 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.
Contact:
Jean Wood
VP of Investor Relations,
310-394-6000
Source: The Macerich Company