Macerich Announces a 13% Increase in AFFO Per Share

A reconciliation of EPS to FFO per share and AFFO per share follows:

Estimated EPS range:

$1.93   -   $2.01

Less: Gain on asset sales

-.98   -     -.98

Plus:  real estate depreciation and amortization

$2.43   -   $2.43

Estimated range for FFO per share- diluted    

$3.38  to  $3.46

Less:  positive FFO impact of Valley View

- .32  -      -.32

Estimated Adjusted FFO per share-diluted:

$3.06  to   $3.14

THE MACERICH COMPANY

FINANCIAL HIGHLIGHTS

(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)

Results of Operations:

Results before

Impact of

Results after

Discontinued Operations (a)

Discontinued Operations (a)

Discontinued Operations (a)

For the Three Months

For the Three Months

For the Three Months

Ended December 31,

Ended December 31,

Ended December 31,

Unaudited

Unaudited

2011

2010

2011

2010

2011

2010

Minimum rents

$118,751

$112,052

(1,310)

($2,085)

$117,441

$109,967

Percentage rents  

10,489

8,454

(158)

(181)

10,331

8,273

Tenant recoveries

64,842

63,081

(909)

(1,201)

63,933

61,880

Management Companies' revenues

11,942

10,028

-

-

11,942

10,028

Other income

11,743

10,270

(75)

(84)

11,668

10,186

Total revenues

217,767

203,885

(2,452)

(3,551)

215,315

200,334

Shopping center and operating  expenses

67,882

64,021

(1,538)

(2,023)

66,344

61,998

Management Companies' operating  expenses

19,560

21,718

-

-

19,560

21,718

Income tax benefit

(298)

(3,950)

-

-

(298)

(3,950)

Depreciation and amortization

70,831

64,882

(361)

(1,710)

70,470

63,172

REIT general and administrative expenses

5,237

4,999

-

-

5,237

4,999

Interest expense  

47,843

53,507

(271)

(603)

47,572

52,904

(Loss) gain on early extinguishment of debt

(5,378)

2,053

3,929

-

(1,449)

2,053

Loss on remeasurement, sale or write down of assets, net

(42,823)

(77)

(3,584)

-

(46,407)

(77)

Co-venture interests (b)

(2,027)

(2,547)

-

-

(2,027)

(2,547)

Equity in income of unconsolidated joint ventures

219,156

27,621

-

-

219,156

27,621

Income from continuing operations

175,640

25,758

63

785

175,703

26,543

Discontinued operations:

  Loss on sale or disposition of assets, net

-

-

(345)

-

(345)

-

  Gain (loss) from discontinued operations

-

-

282

(785)

282

(785)

Total loss from discontinued operations

-

-

(63)

(785)

(63)

(785)

Net income

175,640

25,758

-

-

175,640

25,758

Less net income attributable to noncontrolling interests

12,533

2,200

-

-

12,533

2,200

Net income available to common stockholders

$163,107

$23,558

$0

$0

$163,107

$23,558

Average number of shares outstanding - basic

132,128

130,301

132,128

130,301

Average shares outstanding, assuming full conversion of OP Units  (c)

143,165

142,031

143,165

142,031

Average shares outstanding - Funds From Operations ("FFO") - diluted (c)

143,165

142,031

143,165

142,031

Per share income - diluted before discontinued operations

-

-

$1.23

$0.19

Net income per share-basic

$1.23

$0.18

$1.23

$0.18

Net income per share - diluted  

$1.23

$0.18

$1.23

$0.18

Dividend declared per share

$0.55

$0.50

$0.55

$0.50

FFO - basic  (c) (d)

$118,783

$108,921

$118,783

$108,921

FFO - diluted (c) (d)

$118,783

$108,921

$118,783

$108,921

FFO per share- basic   (c) (d)

$0.83

$0.77

$0.83

$0.77

FFO per share- diluted  (c) (d)

$0.83

$0.77

$0.83

$0.77

Adjusted FFO ("AFFO") per share- diluted  (c)(d)

$0.87

$0.77

$0.87

$0.77

THE MACERICH COMPANY

FINANCIAL HIGHLIGHTS

(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)

Results of Operations:

Results before

Impact of

Results after

Discontinued Operations (a)

Discontinued Operations (a)

Discontinued Operations (a)

For the Twelve Months

For the Twelve Months

For the Twelve Months

Ended December 31,

Ended December 31,

Ended December 31,

Unaudited

Unaudited

2011

2010

2011

2010

2011

2010

Minimum rents

$453,439

$423,151

(7,131)

($9,449)

$446,308

$413,702

Percentage rents  

20,721

18,411

(549)

(530)

20,172

17,881

Tenant recoveries

254,380

243,303

(4,154)

(4,888)

250,226

238,415

Management Companies' revenues

40,404

42,895

-

-

40,404

42,895

Other income

34,357

30,800

(217)

(300)

34,140

30,500

Total revenues

803,301

758,560

(12,051)

(15,167)

791,250

743,393

Shopping center and operating  expenses

263,341

246,066

(7,524)

(8,884)

255,817

237,182

Management Companies' operating  expenses

86,587

90,414

-

-

86,587

90,414

Income tax benefit

(6,110)

(9,202)

-

-

(6,110)

(9,202)

Depreciation and amortization

269,286

246,812

(3,955)

(6,731)

265,331

240,081

REIT general and administrative expenses

21,113

20,703

-

-

21,113

20,703

Interest expense  

198,025

212,818

(2,740)

(2,655)

195,285

210,163

(Loss) gain on early extinguishment of debt

(14,517)

3,661

3,929

-

(10,588)

3,661

(Loss) gain on remeasurement, sale or write down of assets, net

(76,338)

474

34,059

23

(42,279)

497

Co-venture interests (b)

(5,806)

(6,193)

-

-

(5,806)

(6,193)

Equity in income of unconsolidated joint ventures

294,677

79,529

-

-

294,677

79,529

Income from continuing operations

169,075

28,420

40,156

3,126

209,231

31,546

Discontinued operations:

  Loss on sale or disposition of assets, net

-

-

(37,988)

(23)

(37,988)

(23)

  Loss from discontinued operations

-

-

(2,168)

(3,103)

(2,168)

(3,103)

Total loss from discontinued operations

-

-

(40,156)

(3,126)

(40,156)

(3,126)

Net income

169,075

28,420

-

-

169,075

28,420

Less net income attributable to noncontrolling interests

12,209

3,230

-

-

12,209

3,230

Net income available to common stockholders

$156,866

$25,190

$0

$0

$156,866

$25,190

Average number of shares outstanding - basic

131,628

120,346

131,628

120,346

Average shares outstanding, assuming full conversion of OP Units  (c)

142,986

132,283

142,986

132,283

Average shares outstanding - Funds From Operations ("FFO") - diluted (c)

142,986

132,283

142,986

132,283

Per share income - diluted before discontinued operations

-

-

$1.46

$0.21

Net income per share-basic

$1.18

$0.19

$1.18

$0.19

Net income per share - diluted  

$1.18

$0.19

$1.18

$0.19

Dividend declared per share

$2.05

$2.10

$2.05

$2.10

FFO - basic  (c) (d)

$399,559

$351,308

$399,559

$351,308

FFO - diluted (c) (d)

$399,559

$351,308

$399,559

$351,308

FFO per share- basic   (c) (d)

$2.79

$2.66

$2.79

$2.66

FFO per share- diluted  (c) (d)

$2.79

$2.66

$2.79

$2.66

Adjusted FFO ("AFFO") per share- diluted  (c)(d)

$2.88

$2.66

$2.88

$2.66

THE MACERICH COMPANY

FINANCIAL HIGHLIGHTS

(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)

(a)  

The Company has classified the results of operations on any dispositions as discontinued operations for the three and twelve months ended December 31, 2011 and 2010.

(b)  

This represents the outside partners' allocation of net income in the Chandler Fashion Center/Freehold Raceway Mall joint venture.

(c)  

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 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.

(d)  

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, 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 partnerships and joint ventures. Adjustments for unconsolidated partnerships and joint ventures are calculated to reflect FFO on the same basis.

Adjusted FFO ("AFFO") excludes the negative FFO impact of Shoppingtown Mall and Valley View Center for the three and twelve months ended December 31, 2011. In December 2011, the Company conveyed Shoppingtown Mall to the lender by a deed in lieu of foreclosure and Valley View Center is in receivership.

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 the unrelated non-cash charges on properties controlled by either a receiver or loan servicer, which are non-routine items. 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.

NAREIT recently clarified that under NAREIT's definition of FFO, impairment write-downs of real estate should be added back to net income. Beginning with the three and twelve months ended December 31, 2011, the Company has revised its definition of FFO to add back impairment write-downs of real estate to its net income. Given that there were no impairment write-downs of real estate in the three months and year ended December 31, 2010, FFO for those periods was not impacted by the revised definition.

THE MACERICH COMPANY

FINANCIAL HIGHLIGHTS

(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)

Pro rata share of unconsolidated joint ventures:

For the Three Months

For the Twelve Months

Ended December 31,

Ended December 31,

Unaudited

Unaudited

2011

2010

2011

2010

Revenues:

   Minimum rents

$82,079

$78,143

$311,439

$300,637

   Percentage rents

7,476

6,650

15,433

13,458

   Tenant recoveries

40,196

36,868

151,938

149,357

   Other

7,323

6,685

24,400

21,418

   Total revenues

137,074

128,346

503,210

484,870

Expenses:

    Shopping center and operating expenses

48,678

43,983

178,169

170,221

    Interest expense

32,175

31,342

123,713

125,858

    Depreciation and amortization

25,370

25,721

115,431

109,906

    Total operating expenses

106,223

101,046

417,313

405,985

Gain on remeasurement, sale or write down of assets, net

188,245

124

200,828

823

Gain (loss) on early extinguishment of debt

60

-

7,852

(689)

Equity in income of joint ventures

-

197

100

510

    Net income

$219,156

$27,621

$294,677

$79,529

Reconciliation of Net income to FFO and AFFO (d):

For the Three Months

For the Twelve Months

Ended December 31,

Ended December 31,

Unaudited

Unaudited

2011

2010

2011

2010

Net income available to common stockholders

$163,107

$23,558

$156,866

$25,190

Adjustments to reconcile net income to FFO - basic

  Noncontrolling interests in OP

14,073

2,330

13,529

2,497

  Loss (gain) on remeasurement, sale or write down of consolidated assets, net

42,823

77

76,338

(474)

       plus gain on undepreciated asset sales - consolidated assets

-

-

2,277

-

       plus non-controlling interests share of  (loss) gain on remeasurement, sale or

          write down of consolidated joint ventures

(1,437)

-

(1,441)

2

  Gain on remeasurement, sale or write down of assets from unconsolidated entities (pro rata), net

(188,245)

(124)

(200,828)

(823)

       plus (loss) gain on undepreciated asset sales - unconsolidated entities (pro rata share)

(19)

124

51

613

  Depreciation and amortization on consolidated assets

70,831

64,882

269,286

246,812

  Less depreciation and amortization allocable to noncontrolling interests on consolidated joint ventures

(4,503)

(4,394)

(18,022)

(17,979)

  Depreciation and amortization on joint ventures (pro rata)

25,370

25,721

115,431

109,906

  Less: depreciation on personal property

(3,217)

(3,253)

(13,928)

(14,436)

Total FFO - basic

118,783

108,921

399,559

351,308

Additional adjustment to arrive at FFO - diluted:

   Preferred units - dividends

-

-

-

-

Total FFO - diluted

$118,783

$108,921

$399,559

$351,308

Additional adjustments to arrive at AFFO - diluted:

   Add: Shoppingtown Mall negative FFO

3,179

-

3,491

-

   Add: Valley View Center negative FFO

2,684

-

8,786

-

Total AFFO- diluted

$124,646

$108,921

$411,836

$351,308

Reconciliation of EPS to FFO and AFFO per diluted share:

For the Three Months

For the Twelve Months

Ended December 31,

Ended December 31,

Unaudited

Unaudited

2011

2010

2011

2010

Earnings per share - diluted

$1.23

$0.18

$1.18

$0.19

  Per share impact of depreciation and amortization of real estate

0.62

0.59

2.47

2.46

  Per share impact of (gain) loss on remeasurement, sale or write down of assets

(1.02)

0.00

(0.86)

0.01

FFO per share - diluted

$0.83

$0.77

$2.79

$2.66

  Per share impact of  Shoppingtown Mall and Valley View Center negative FFO

0.04

0.00

0.09

0.00

AFFO per share - diluted

$0.87

$0.77

$2.88

$2.66

THE MACERICH COMPANY

FINANCIAL HIGHLIGHTS

(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)

For the Three Months

For the Twelve Months

Reconciliation of Net income to EBITDA:

Ended December 31,

Ended December 31,

Unaudited

Unaudited

2011

2010

2011

2010

Net income available to common stockholders

$163,107

$23,558

$156,866

$25,190

  Interest expense - consolidated assets

47,843

53,507

198,025

212,818

  Interest expense - unconsolidated entities (pro rata)

32,175

31,342

123,713

125,858

  Depreciation and amortization - consolidated assets

70,831

64,882

269,286

246,812

  Depreciation and amortization - unconsolidated entities (pro rata)

25,370

25,721

115,431

109,906

  Noncontrolling interests in OP

14,073

2,330

13,529

2,497

  Less: Interest expense and depreciation and amortization allocable to noncontrolling

   interests on consolidated joint ventures

(7,446)

(7,224)

(29,877)

(28,715)

  Loss (gain) on early extinguishment of debt - consolidated entities

5,378

(2,053)

14,517

(3,661)

  (Gain) loss on early extinguishment of debt - unconsolidated entities (pro rata)

(60)

-

(7,852)

689

  Loss (gain) on remeasurement, sale or write down of assets - consolidated assets

42,823

77

76,338

(474)

  Gain on remeasurement, sale or write down of assets - unconsolidated entities (pro rata)

(188,245)

(124)

(200,828)

(823)

  Add: Non-controlling interests share of (loss) gain on sale of consolidated assets

(1,437)

-

(1,441)

2

  Add: Non-controlling interests share of gain on sale of unconsolidated assets

-

-

-

93

  Income tax benefit

(298)

(3,950)

(6,110)

(9,202)

  Distributions on preferred units

208

207

832

831

EBITDA   (e)

$204,322

$188,273

$722,429

$681,821

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

2011

2010

2011

2010

EBITDA (e)

$204,322

$188,273

$722,429

$681,821

Add: REIT general and administrative expenses

5,237

4,999

21,113

20,703

       Management Companies' revenues

(11,942)

(10,028)

(40,404)

(42,895)

       Management Companies' operating  expenses

19,560

21,718

86,587

90,414

       Lease termination income, straight-line and above/below market adjustments

         to minimum rents of comparable centers

(6,136)

(6,000)

(21,903)

(22,599)

       EBITDA of non-comparable centers

(23,883)

(14,976)

(85,040)

(61,178)

Same Centers - NOI (f)

$187,158

$183,986

$682,782

$666,266

(e)

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 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.

(f)

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. Same center NOI excludes the impact of lease termination income, straight-line and above/below market adjustments to minimum rents.