SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
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FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES AND EXCHANGE ACT OF 1934
Date of report (Date of earliest event reported) February 18, 1998
(February 17, 1998)
THE MACERICH COMPANY
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(Exact Name of Registrant as Specified in Charter)
Maryland 1-12504 95-4448705
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(State or Other Jurisdiction (Commission (IRS Employer
of Incorporation) File Number) Identification No.)
233 Wilshire Boulevard, Suite 700, Santa Monica, CA 90401
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(Address of Principal Executive Offices)
Registrant's telephone number, including area code (310) 394-6911
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N/A
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(Former Name or Former Address, if Changed Since Last Report)
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Item 5. Other Events
The Macerich Company, a Maryland corporation (the
"Registrant"), issued a press release on February 17, 1998 announcing fourth
quarter 1997 earnings, which included the following information:
(Santa Monica, CA), February 17, 1998--The Macerich Company
(NYSE Symbol:MAC) announced today a 26% increase in Funds From Operations (FFO)
per share to $.62 for the 4th quarter of 1997 compared to $.49 for the 4th
quarter of 1996. FFO per share for the twelve months ended December 31, 1997 was
$2.21 per share compared to $1.90 per share for the same period in 1996
representing a 16% increase for the year.
Total revenues for the quarter increased to $61.5 million from $43.9
million in the 4th quarter of 1996 representing a 40% increase. Total revenues
for the twelve months ended December 31, 1997 increased to $221.2 million from
$155.1 million for the same period in 1996. Net income for the quarter ended
December 31, 1997 was $7.3 million compared to $5.5 million for the 4th quarter
of 1996. Net income for the twelve months ended December 31, 1997 was $22.0
million or $.85 per share compared to $18.9 million or $.91 per share for the
same period in 1996.
Same center tenant sales increased 5.8% in the 4th quarter of 1997 and
the occupancy level at December 31, 1997 was 91.8% compared to 91.6% at December
31, 1996. Same center sales for calendar 1997 were up 4.4%. Weighted average
sales for the entire portfolio of mall and freestanding stores for 1997 were
$308 per square foot compared to $290 per square foot for the year ended
December 31, 1996. There were approximately 190,810 square feet of mall and
freestanding store leases signed in the 4th quarter at initial rents of $28.07
per square foot, approximately 15% higher than expiring rent on comparable
space.
The Macerich Company is a fully-integrated, self-administered and
self-managed real estate investment trust which focuses on the acquisition and
redevelopment of regional malls throughout the United States. The company is the
sole general partner of, and holds a 68% ownership interest in, The Macerich
Partnership, L.P. Macerich owns interests in 26 malls and four community centers
with total gross leaseable area of 22.3 million square feet. Additional
information can be obtained by accessing the company's website @
www.macerich.com (see attached tables).
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THE MACERICH COMPANY
FINANCIAL HIGHLIGHTS
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
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Results of Operations: for the three months ended for the year ended
December 31 December 31
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(UNAUDITED) (UNAUDITED)
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1997 1996 1997 1996
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Total Revenues 61,529 43,924 221,214 155,059
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Shopping Center Expenses 19,062 14,716 70,901 50,792
Depreciation and amortization 11,720 8,793 41,535 32,591
General, administrative and other expenses 660 516 2,759 2,378
Interest expense 19,006 11,863 66,407 42,353
Gain (loss) on sale of assets 0 0 1,619 0
Pro rata income (loss) of unconsolidated entities (c) (455) 381 (8,063) 3,256
Income before minority interest & extraordinary items 10,626 8,417 33,168 30,201
Income allocated to minority interests 3,373 2,878 10,567 10,975
Extraordinary loss on early extinguishment of debt 0 0 555 315
Net income 7,253 5,539 22,046 18,911
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Average # of shares outstanding during the period 25,992 23,342 25,891 20,828
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Average shares outstanding, assuming full
conversion of OP units (d) 38,083 35,447 37,982 32,934
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Average shares outstanding, assuming conversion
of OP units and convertible debentures (e) 43,268 35,447 40,646 32,934
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Basic Net income per share $0.28 $0.24 $0.85 $0.91
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Dividend declared per share $0.46 $0.44 $1.78 $1.70
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Funds from operations "FFO" (a) (d) $23,444 $17,267 $83,187 $62,428
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FFO per share (a) (d) $0.62 $0.49 $2.19 $1.90
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Percentage change in FFO per Share (b) 26.38% 15.54%
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FFO per share after conversion of debentures (e) $0.62 $2.21
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(a) Funds from Operations ("FFO") is defined as: "net income (computed
in accordance with GAAP) excluding gains or losses from debt
restructuring and sales of property, plus depreciation and
amortization (excluding depreciation on personal property and
amortization of loan and financial instrument cost) and after
adjustments for unconsolidated entities. Adjustments for
unconsolidated entities are calculated on the same basis.
(b) Percentage change in FFO/ share is based on the comparison to the
same period in 1996
(c) Includes a write-down of the historical carrying value of the
Company's joint venture interest on North Valley Plaza of
$9,138 in the quarter ended September 30, 1997 and $1, 357 in
the quarter ended December 31, 1997. North Valley Plaza was sold in
December, 1997.
(d) The Company has operating partnership units ("OP units"). Each
OP unit can be converted into a share of Company stock.
Conversion of the OP units has been assumed for purposes of
calculating the FFO per share and the weighted average number
of shares outstanding. Convertible debentures have not been
included in the calculation of Funds from Operations, FFO per share
or weighted average number of shares.
(e) The Company issued $161.4 million of convertible debenture in
June and July , 1997. The debentures are convertible into
common shares at a conversion price of $31.125 per share.
Conversion is assumed above for calculation of FFO per share -
after conversion of debentures.
Dec 31 Dec. 31,
Summarized Balance Sheet Information 1997 1996
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(UNAUDITED)
Cash and cash equivalents 25,154 15,643
Investment in real estate, net 1,407,179 1,108,668
Total Assets 1,505,002 1,187,753
Mortgage and notes payable 961,559 789,239
Convertible debentures 161,400 0
Additional financial data as of December 31, 1997
Occupancy of centers (f) 91.80%
Year to date increase in same center sales (f) (g) 4.40%
Debt as a percentage of total market capitalization (h) 51.50%
(f) excludes redevelopment properties- Huntington Center and Buenaventura
Mall- acquired in December , 1996.
(g) includes mall and freestanding stores
(h) includes joint ventures at pro rata and is based on the closing stock
price on December 31, 1997 of $28.5
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THE MACERICH COMPANY
FINANCIAL HIGHLIGHTS
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
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Reconciliation of Net Income to FFO: for the three months ended for the twelve months ended
December 31, December 31,
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(UNAUDITED) (UNAUDITED)
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1997 1996 1997 1996
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Net income 7,253 5,539 22,046 18,911
Adjustments to reconcile net income to FFO- before
conversion of debentures
Minority interest 3,373 2,878 10,567 10,975
Loss on early extinguishment of debt 0 0 555 315
( Gain) on sale of assets from wholly owned centers 0 0 (1,619) 0
( Gain) loss on sale or write-down of assets from
joint ventures (pro rata) 1,328 (57) 10,400 (110)
Depreciation and amortization on wholly owned centers 11,720 8,793 41,535 32,591
Depreciation and amortization on joint ventures and
from the management companies (pro rata) 611 572 2,311 2,096
Less: depreciation on personal property and
amortization of loan costs and interest rate caps (841) (458) (2,608) (2,350)
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Total FFO 23,444 17,267 83,187 62,428
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Weighted average shares outstanding- before
conversion of debentures (d) 38,083 35,447 37,982 32,934
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Additional adjustment to arrive at FFO after conversion of debentures:
Interest expense and amortization of loan 3,420 0 6,468 0
costs on the debentures
FFO after conversion of debentures: 26,864 17,267 89,655 62,428
Weighted average shares outstanding - after
conversion of debentures (e) 43,268 35,447 40,646 32,934
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Pursuant to the requirements of the Securities and Exchange Act of
1934, the Registrant has duly caused this report to be signed on its behalf by
the undersigned, hereunto duly authorized.
Date: February 18, 1998
THE MACERICH COMPANY
By: /s/RICHARD A. BAYER
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Richard A. Bayer
General Counsel
and Secretary