Macerich Announces Quarterly Results

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

Estimated EPS range:                         

$2.04   -   $2.12

Less: Gain on asset sales                    

-.98   -      -.98

Plus:  Impairment on real estate             

.39   -       .39

Plus:  Real estate depreciation and amortization 

$2.43   -   $2.43

Estimated range for FFO per share-diluted           

$3.88  to  $3.96

Less:  Net FFO impact of Valley View

        and Prescott Gateway dispositions              

   - .82  -      -.82

Estimated AFFO 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 June 30,

Ended June 30,

Ended June 30,

Unaudited

Unaudited

2012

2011

2012

2011

2012

2011

Minimum rents 

$120,186

$111,285

($2,296)

($6,834)

$117,890

$104,451

Percentage rents   

2,872

3,139

(103)

(278)

2,769

2,861

Tenant recoveries

66,013

61,081

(1,308)

(3,059)

64,705

58,022

Management Companies' revenues

9,657

8,119

-

-

9,657

8,119

Other income

9,736

8,161

(212)

(315)

9,524

7,846

Total revenues

208,464

191,785

(3,919)

(10,486)

204,545

181,299

Shopping center and operating  expenses 

66,791

64,442

(1,721)

(5,375)

65,070

59,067

Management Companies' operating  expenses 

23,734

20,921

-

-

23,734

20,921

Income tax benefit

(3,075)

(1,768)

-

-

(3,075)

(1,768)

Depreciation and amortization 

73,003

65,834

(1,516)

(4,908)

71,487

60,926

REIT general and administrative expenses 

5,655

3,742

-

-

5,655

3,742

Interest expense  

45,068

49,032

(1,771)

(4,966)

43,297

44,066

Gain (loss) on extinguishment of debt, net

120,356

(32)

(120,356)

-

-

(32)

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

9,512

(34,466)

(10,371)

35,753

(859)

1,287

Co-venture interests (b)

(1,304)

(1,202)

-

-

(1,304)

(1,202)

Equity in income of unconsolidated joint ventures 

18,691

25,207

-

-

18,691

25,207

Income (loss) from continuing operations

144,543

(20,911)

(129,638)

40,516

14,905

19,605

Discontinued operations:

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

-

-

130,727

(35,753)

130,727

(35,753)

   Loss from discontinued operations

-

-

(1,089)

(4,763)

(1,089)

(4,763)

Total income (loss) from discontinued operations

-

-

129,638

(40,516)

129,638

(40,516)

Net income (loss) 

144,543

(20,911)

-

-

144,543

(20,911)

Less net income (loss) attributable to noncontrolling interests

11,189

(1,695)

-

-

11,189

(1,695)

Net income (loss) available to common stockholders

$133,354

($19,216)

$0

$0

$133,354

($19,216)

Average number of shares outstanding - basic

132,768

131,691

132,768

131,691

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

144,030

143,140

144,030

143,140

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

144,139

143,140

144,139

143,140

Per share income - diluted before discontinued operations

-

-

$0.10

$0.13

Net income (loss) per share-basic 

$1.00

($0.15)

$1.00

($0.15)

Net income (loss) per share - diluted  

$1.00

($0.15)

$1.00

($0.15)

Dividend declared per share 

$0.55

$0.50

$0.55

$0.50

FFO - basic  (c) (d)

$226,212

$102,893

$226,212

$102,893

FFO - diluted (c) (d)

$226,212

$102,893

$226,212

$102,893

FFO per share- basic   (c) (d)

$1.57

$0.72

$1.57

$0.72

FFO per share- diluted  (c) (d)

$1.57

$0.72

$1.57

$0.72

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

$0.74

$0.74

$0.74

$0.74

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 Six Months 

For the Six Months 

For the Six Months 

Ended June 30,

Ended June 30,

Ended June 30,

Unaudited

Unaudited

2012

2011

2012

2011

2012

2011

Minimum rents 

$243,823

$220,802

($6,407)

($13,667)

$237,416

$207,135

Percentage rents   

6,864

6,090

(342)

(490)

6,522

5,600

Tenant recoveries

132,785

122,753

(3,385)

(6,502)

129,400

116,251

Management Companies' revenues

20,872

18,702

-

-

20,872

18,702

Other income

20,738

14,499

(463)

(611)

20,275

13,888

Total revenues

425,082

382,846

(10,597)

(21,270)

414,485

361,576

Shopping center and operating  expenses 

135,607

127,209

(5,036)

(11,043)

130,571

116,166

Management Companies' operating  expenses 

46,259

46,777

-

-

46,259

46,777

Income tax benefit

(1,225)

(4,246)

-

-

(1,225)

(4,246)

Depreciation and amortization 

149,968

130,459

(4,640)

(9,825)

145,328

120,634

REIT general and administrative expenses 

10,174

11,386

-

-

10,174

11,386

Interest expense  

92,191

101,029

(6,370)

(8,362)

85,821

92,667

Gain (loss) on extinguishment of debt, net

120,012

(9,133)

(120,012)

-

-

(9,133)

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

(26,215)

(34,903)

44,853

37,991

18,638

3,088

Co-venture interests (b)

(2,395)

(2,498)

-

-

(2,395)

(2,498)

Equity in income of unconsolidated joint ventures 

49,309

55,482

-

-

49,309

55,482

Income (loss) from continuing operations

132,819

(20,820)

(69,710)

45,951

63,109

25,131

Discontinued operations:

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

-

-

75,159

(37,991)

75,159

(37,991)

   Loss from discontinued operations

-

-

(5,449)

(7,960)

(5,449)

(7,960)

Total income (loss) from discontinued operations

-

-

69,710

(45,951)

69,710

(45,951)

Net income (loss)

132,819

(20,820)

-

-

132,819

(20,820)

Less net income (loss) attributable to noncontrolling interests

13,533

(1,638)

-

-

13,533

(1,638)

Net income (loss) available to common stockholders

$119,286

($19,182)

$0

$0

$119,286

($19,182)

Average number of shares outstanding - basic

132,520

131,136

132,520

131,136

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

143,741

142,810

143,741

142,810

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

143,832

142,810

143,832

142,810

Per share income - diluted before discontinued operations

-

-

$0.42

$0.17

Net income (loss) per share-basic 

$0.90

($0.15)

$0.90

($0.15)

Net income (loss) per share - diluted  

$0.90

($0.15)

$0.90

($0.15)

Dividend declared per share 

$1.10

$1.00

$1.10

$1.00

FFO - basic  (c) (d)

$332,385

$176,574

$332,385

$176,574

FFO - diluted (c) (d)

$332,385

$176,574

$332,385

$176,574

FFO per share- basic   (c) (d)

$2.31

$1.24

$2.31

$1.24

FFO per share- diluted  (c) (d)

$2.31

$1.24

$2.31

$1.24

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

$1.50

$1.26

$1.50

$1.26

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 and six months ended June 30, 2012 and 2011.

(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 and six months ended June 30, 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 $16.4 million. AFFO excludes the gain on extinguishment of debt on Prescott Gateway for the three and six months ended June 30, 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 the 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)

Pro rata share of unconsolidated joint ventures:

 For the Three Months  

 For the Six Months  

 Ended June 30, 

 Ended June 30, 

 Unaudited 

 Unaudited 

2012

2011

2012

2011

Revenues:

    Minimum rents

$66,980

$75,205

$136,465

$150,106

    Percentage rents

1,980

2,106

4,249

4,321

    Tenant recoveries

33,498

37,153

66,835

73,505

    Other

5,871

5,640

11,111

10,859

    Total revenues

108,329

120,104

218,660

238,791

Expenses:

     Shopping center and operating expenses

37,675

42,615

77,420

84,569

     Interest expense

26,056

29,864

52,778

60,447

     Depreciation and amortization

25,553

30,181

50,310

58,706

     Total operating expenses

89,284

102,660

180,508

203,722

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

(354)

10

11,157

12,560

Gain on extinguishment of debt

-

7,753

-

7,753

Equity in income of joint ventures

-

-

-

100

     Net income 

$18,691

$25,207

$49,309

$55,482

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

 For the Three Months  

 For the Six Months  

 Ended June 30, 

 Ended June 30, 

 Unaudited 

 Unaudited 

2012

2011

2012

2011

Net income (loss) available to common stockholders

$133,354

($19,216)

$119,286

($19,182)

Adjustments to reconcile net income (loss) to FFO - basic

   Noncontrolling interests in OP

11,294

(1,710)

10,106

(1,707)

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

(9,512)

34,466

26,215

34,903

        plus gain on undepreciated asset sales - consolidated assets

-

1,734

-

2,277

        plus non-controlling interests share of (loss) gain on remeasurement, sale or write down of consolidated joint ventures, net

(17)

(4)

3,538

(4)

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

354

(10)

(11,157)

(12,560)

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

-

10

-

50

   Depreciation and amortization on consolidated assets 

73,003

65,834

149,968

130,459

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

(4,578)

(4,492)

(9,428)

(8,986)

   Depreciation and amortization on joint ventures (pro rata) 

25,553

30,181

50,310

58,706

   Less: depreciation on personal property 

(3,239)

(3,900)

(6,453)

(7,382)

Total FFO - basic

226,212

102,893

332,385

176,574

Additional adjustment to arrive at FFO - diluted:

    Preferred units - dividends

-

-

-

-

Total FFO - diluted

$226,212

$102,893

$332,385

$176,574

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

    Shoppingtown Mall

36

2

396

22

    Valley View Center

(103,745)

2,425

(101,116)

3,216

    Prescott Gateway

(16,350)

-

(16,350)

-

Total AFFO- diluted

$106,153

$105,320

$215,315

$179,812

Reconciliation of EPS to FFO and AFFO per diluted share:

 For the Three Months  

 For the Six Months  

 Ended June 30, 

 Ended June 30, 

 Unaudited 

 Unaudited 

2012

2011

2012

2011

Earnings per share - diluted

$1.00

($0.15)

$0.90

($0.15)

   Per share impact of depreciation and amortization of real estate

0.63

0.61

1.28

1.21

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

(0.06)

0.26

0.13

0.18

FFO per share - diluted

$1.57

$0.72

$2.31

$1.24

   Per share impact - Shoppingtown Mall, Valley View Center and Prescott Gateway

(0.83)

0.02

(0.81)

0.02

AFFO per share - diluted

$0.74

$0.74

$1.50

$1.26

THE MACERICH COMPANY

FINANCIAL HIGHLIGHTS

(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)

 For the Three Months  

 For the Six Months  

Reconciliation of Net income (loss) to EBITDA:

 Ended June 30, 

 Ended June 30, 

 Unaudited 

 Unaudited 

2012

2011

2012

2011

Net income (loss) available to common stockholders

$133,354

($19,216)

$119,286

($19,182)

   Interest expense - consolidated assets

45,068

49,032

92,191

101,029

   Interest expense - unconsolidated entities (pro rata)

26,056

29,864

52,778

60,447

   Depreciation and amortization - consolidated assets

73,003

65,834

149,968

130,459

   Depreciation and amortization - unconsolidated entities (pro rata)

25,553

30,181

50,310

58,706

   Noncontrolling interests in OP

11,294

(1,710)

10,106

(1,707)

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

(7,503)

(7,465)

(15,279)

(14,944)

   (Gain) loss on extinguishment of debt - consolidated entities

(120,356)

32

(120,012)

9,133

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

-

(7,753)

-

(7,753)

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

(9,512)

34,466

26,215

34,903

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

354

(10)

(11,157)

(12,560)

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

(17)

(4)

3,538

(4)

   Income tax benefit

(3,075)

(1,768)

(1,225)

(4,246)

   Distributions on preferred units

208

207

416

416

EBITDA   (e)

$174,427

$171,690

$357,135

$334,697

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

 For the Three Months  

 For the Six Months  

 Ended June 30, 

 Ended June 30, 

 Unaudited 

 Unaudited 

2012

2011

2012

2011

EBITDA (e)

$174,427

$171,690

$357,135

$334,697

Add: REIT general and administrative expenses

5,655

3,742

10,174

11,386

        Management Companies' revenues

(9,657)

(8,119)

(20,872)

(18,702)

        Management Companies' operating  expenses 

23,734

20,921

46,259

46,777

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

(3,207)

(5,206)

(7,498)

(8,454)

        EBITDA of non-comparable centers

(29,543)

(26,142)

(62,136)

(52,532)

Same Centers - NOI (f)

$161,409

$156,886

$323,062

$313,172

(e)

EBITDA represents earnings before interest, income taxes, depreciation, amortization, noncontrolling interests, extraordinary items, gain (loss) onremeasurement, 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 ofcomparable 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