Macerich Announces A 13% Increase In AFFO Per Share, Increased Earnings Guidance And Signs Deloitte For Tysons Office

A reconciliation of estimated EPS to FFO per share -diluted follows:

Estimated EPS range:

$2.07  to  $2.92

Less: estimated Gain on asset sales

-1.50  to  -2.25

Plus:  Real estate depreciation and amortization

2.78  to  2.78

Estimated range for FFO per share-diluted

$3.35  to  $3.45

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 March 31,

Ended March 31,

Ended March 31,

Unaudited

Unaudited

2013

2012

2013

2012

2013

2012

Minimum rents 

$149,157

$123,638

$0

($4,110)

$149,157

$119,528

Percentage rents   

4,377

3,994

-

(241)

4,377

3,753

Tenant recoveries

85,324

66,772

-

(2,077)

85,324

64,695

Management Companies' revenues

10,148

11,215

-

-

10,148

11,215

Other income

13,776

11,002

-

(250)

13,776

10,752

Total revenues

262,782

216,621

0

(6,678)

262,782

209,943

Shopping center and operating  expenses 

85,374

68,817

(2)

(3,319)

85,372

65,498

Management Companies' operating  expenses 

23,149

22,527

-

-

23,149

22,527

Income tax (benefit) provision

(243)

1,850

-

-

(243)

1,850

Depreciation and amortization 

93,160

76,964

-

(3,123)

93,160

73,841

REIT general and administrative expenses 

6,024

4,518

-

-

6,024

4,518

Interest expense  

53,696

47,123

-

(4,600)

53,696

42,523

Loss on extinguishment of debt, net

-

(344)

-

344

-

-

Gain (loss) on remeasurement, sale or write down of assets, net

4,834

(35,727)

(6)

55,224

4,828

19,497

Co-venture interests (b)

(2,041)

(1,092)

-

-

(2,041)

(1,092)

Equity in income of unconsolidated joint ventures 

18,115

30,618

-

-

18,115

30,618

Income (loss) from continuing operations

22,530

(11,723)

(4)

59,932

22,526

48,209

Discontinued operations:

   Gain (loss) on sale, disposition or write down of assets, net

-

-

6

(55,568)

6

(55,568)

   Loss from discontinued operations

-

-

(2)

(4,364)

(2)

(4,364)

Total gain (loss) from discontinued operations

-

-

4

(59,932)

4

(59,932)

Net income (loss)

22,530

(11,723)

-

-

22,530

(11,723)

Less net income attributable to noncontrolling interests

4,438

2,345

-

-

4,438

2,345

Net income (loss) attributable to the Company

$18,092

($14,068)

$0

$0

$18,092

($14,068)

Average number of shares outstanding - basic

137,538

132,273

137,538

132,273

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

147,745

143,452

147,745

143,452

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

147,823

143,452

147,823

143,452

Per share income - diluted before discontinued operations

-

-

$0.13

$0.31

Net income (loss) per share-basic 

$0.13

($0.11)

$0.13

($0.11)

Net income (loss) per share - diluted  

$0.13

($0.11)

$0.13

($0.11)

Dividend declared per share 

$0.58

$0.55

$0.58

$0.55

FFO - basic  (c) (d)

$126,975

$106,173

$126,975

$106,173

FFO - diluted (c) (d)

$126,975

$106,173

$126,975

$106,173

FFO per share- basic   (c) (d)

$0.86

$0.74

$0.86

$0.74

FFO per share- diluted  (c) (d)

$0.86

$0.74

$0.86

$0.74

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

$0.86

$0.76

$0.86

$0.76

THE MACERICH COMPANY

FINANCIAL HIGHLIGHTS

(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)

(a)

The Company has classified the results of operations on dispositions as discontinued operations for the three months ended March 31, 2013 and 2012.

(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, 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.

(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 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 months ended March 31, 2012. 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.

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 (loss) attributable to the Company to FFO and AFFO (d):

 For the Three Months  

 Ended March 31, 

 Unaudited 

2013

2012

Net income (loss) attributable to the Company

$18,092

($14,068)

Adjustments to reconcile net income (loss) attributable to the Company to FFO - basic

   Noncontrolling interests in OP

1,343

(1,188)

   (Gain) loss on remeasurement, sale or write down of consolidated assets, net

        plus gain on undepreciated asset sales - consolidated assets

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

           write down of consolidated joint ventures, net

(4,834)

35,727

2,248

-

3,172

3,555

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

                   unconsolidated entities (pro rata), net

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

19

(11,511)

(2)

-

   Depreciation and amortization on consolidated assets 

93,160

76,964

   Less depreciation and amortization allocable to noncontrolling interests

        on consolidated joint ventures

(4,534)

(4,850)

   Depreciation and amortization on joint ventures (pro rata) 

21,331

24,757

   Less: depreciation on personal property 

(3,020)

(3,213)

Total FFO - basic

126,975

106,173

Additional adjustment to arrive at FFO - diluted:

    Preferred units - dividends

-

-

Total FFO - diluted

$126,975

$106,173

Additional adjustments to arrive at AFFO - diluted (d):

    Shoppingtown Mall

-

360

    Valley View Center

-

2,629

Total AFFO- diluted

$126,975

$109,162

Reconciliation of EPS to FFO and AFFO per diluted share (d):

 For the Three Months  

 Ended March 31, 

 Unaudited 

2013

2012

Earnings per share - diluted

$0.13

($0.11)

   Per share impact of depreciation and amortization of real estate

0.72

0.66

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

0.01

0.19

FFO per share - diluted

$0.86

$0.74

   Per share impact - Shoppingtown Mall and Valley View Center 

0.00

0.02

AFFO per share - diluted

$0.86

$0.76

THE MACERICH COMPANY

FINANCIAL HIGHLIGHTS

(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)

 For the Three Months  

Reconciliation of Net income (loss) attributable to the Company to EBITDA:

 Ended March 31, 

 Unaudited 

2013

2012

Net income (loss) attributable to the Company

$18,092

($14,068)

   Interest expense - consolidated assets

53,696

47,123

   Interest expense - unconsolidated entities (pro rata)

18,872

26,722

   Depreciation and amortization - consolidated assets

93,160

76,964

   Depreciation and amortization - unconsolidated entities (pro rata)

21,331

24,757

   Noncontrolling interests in OP

1,343

(1,188)

   Less: Interest expense and depreciation and amortization

            allocable to noncontrolling interests on consolidated joint ventures

(7,294)

(7,776)

   Loss on extinguishment of debt - consolidated entities

-

344

   (Gain) loss on remeasurement, sale or write down of assets - consolidated assets, net

(4,834)

35,727

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

19

(11,511)

   Add: Non-controlling interests share of  gain on sale of consolidated assets, net

3,172

3,555

   Income tax (benefit) provision

(243)

1,850

   Distributions on preferred units

184

208

EBITDA   (e)

$197,498

$182,707

Reconciliation of EBITDA to Same Centers - Net Operating Income ("NOI"):

 For the Three Months  

 Ended March 31, 

 Unaudited 

2013

2012

EBITDA (e)

$197,498

$182,707

Add: REIT general and administrative expenses

6,024

4,518

        Management Companies' revenues

(10,148)

(11,215)

        Management Companies' operating  expenses 

23,149

22,527

        Lease termination income, straight-line and above/below market adjustments to minimum rents of comparable centers

(2,277)

(5,296)

        EBITDA of non-comparable centers

(33,854)

(18,746)

Same Centers - NOI (f)

$180,392

$174,495

(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.