SECURITIES AND EXCHANGE
COMMISSION
Washington, D.C. 20549
FORM 10-Q
QUARTERLY
REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended September 30, 2006
Commission File No. 1-12504
MARYLAND |
|
95-4448705 |
(State or other
jurisdiction of incorporation |
|
(I.R.S. Employer Identification Number) |
401
Wilshire Boulevard, Suite 700, Santa Monica, California 90401
(Address of principal executive office, including zip code)
(310) 394-6000
(Registrants telephone number, including area code)
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding twelve (12) months (or such shorter period that the Registrant was required to file such report) and (2) has been subject to such filing requirements for the past ninety (90) days.
YES x |
|
NO o |
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, or a non-accelerated filer. See definition of accelerated filer and large accelerated filer in Rule 12b-2 of the Exchange Act.
Large accelerated filer x |
|
Accelerated filer o |
|
Non-accelerated filer o |
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).
YES o |
|
NO x |
Number of shares outstanding of the registrants common stock, as of November 02, 2006 Common Stock, par value $.01 per share: 71,810,172 shares
THE MACERICH COMPANY
FORM 10-Q
INDEX
Part I |
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Financial Information |
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Item 1. |
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Financial Statements |
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Consolidated Balance Sheets of the Company as of September 30, 2006 and December 31, 2005 |
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Managements Discussion and Analysis of Financial Condition and Results of Operations |
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2
THE
MACERICH COMPANY
CONSOLIDATED
BALANCE SHEETS
(Dollars in
thousands, except share amounts)
|
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September 30, |
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December 31, |
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2006 |
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2005 |
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(Unaudited) |
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ASSETS: |
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Property, net |
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$ |
5,675,959 |
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$ |
5,438,496 |
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Cash and cash equivalents |
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62,047 |
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155,113 |
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||
Restricted cash |
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72,808 |
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54,659 |
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||
Marketable securities |
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30,188 |
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Tenant receivables, net |
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103,697 |
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89,165 |
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Deferred charges and other assets, net |
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329,440 |
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360,217 |
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Loans to unconsolidated joint ventures |
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815 |
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1,415 |
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Due from affiliates |
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4,518 |
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4,258 |
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Investments in unconsolidated joint ventures |
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1,001,051 |
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1,075,621 |
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Total assets |
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$ |
7,280,523 |
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$ |
7,178,944 |
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LIABILITIES, PREFERRED STOCK AND COMMON STOCKHOLDERS EQUITY: |
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Mortgage notes payable: |
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Related parties |
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$ |
152,146 |
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$ |
154,531 |
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Others |
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3,222,563 |
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3,088,199 |
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Total |
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3,374,709 |
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3,242,730 |
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Bank and other notes payable |
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1,477,927 |
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2,182,000 |
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Accounts payable and accrued expenses |
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74,569 |
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75,121 |
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Other accrued liabilities |
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207,447 |
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226,985 |
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Preferred stock dividend payable |
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6,199 |
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5,970 |
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Total liabilities |
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5,140,851 |
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5,732,806 |
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Minority interest |
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369,004 |
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284,809 |
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Commitments and contingencies |
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Class A participating convertible preferred units |
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213,786 |
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213,786 |
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Class A non-participating convertible preferred units |
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21,501 |
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21,501 |
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Series A cumulative convertible redeemable preferred stock, $.01 par value, 3,627,131 shares authorized, issued and outstanding at September 30, 2006 and December 31, 2005 |
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98,934 |
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98,934 |
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Common stockholders equity: |
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Common stock, $.01 par value, 145,000,000 shares authorized, 71,482,074 and 59,941,552 shares issued and outstanding at September 30, 2006 and December 31, 2005, respectively |
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715 |
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599 |
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Additional paid-in capital |
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1,709,982 |
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1,050,891 |
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Accumulated deficit |
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(275,435 |
) |
(209,005 |
) |
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Accumulated other comprehensive income |
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1,185 |
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87 |
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Unamortized restricted stock |
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(15,464 |
) |
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Total common stockholders equity |
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1,436,447 |
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827,108 |
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Total liabilities, preferred stock and common stockholders equity |
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$ |
7,280,523 |
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$ |
7,178,944 |
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The accompanying notes are an integral part of these financial statements.
3
THE
MACERICH COMPANY
CONSOLIDATED STATEMENTS OF OPERATIONS
(Dollars in
thousands, except per share amounts)
(Unaudited)
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For the Three Months |
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For the Nine Months |
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Ended September 30, |
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Ended September 30, |
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2006 |
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2005 |
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2006 |
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2005 |
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Revenues: |
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Minimum rents |
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$ |
122,419 |
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$ |
120,001 |
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$ |
374,069 |
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$ |
321,015 |
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Percentage rents |
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4,866 |
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5,304 |
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10,353 |
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10,733 |
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Tenant recoveries |
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67,355 |
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64,060 |
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196,925 |
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164,632 |
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Management Companies |
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8,023 |
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6,921 |
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22,650 |
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18,362 |
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Other |
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9,443 |
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5,304 |
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22,407 |
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16,167 |
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Total revenues |
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212,106 |
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201,590 |
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626,404 |
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530,909 |
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Expenses: |
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Shopping center and operating expenses |
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70,958 |
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68,271 |
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203,706 |
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171,205 |
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Management Companies operating expenses |
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14,455 |
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12,914 |
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41,295 |
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37,291 |
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REIT general and administrative expenses |
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2,551 |
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3,420 |
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9,540 |
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9,937 |
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Depreciation and amortization |
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55,843 |
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56,211 |
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175,974 |
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144,916 |
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143,807 |
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140,816 |
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430,515 |
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363,349 |
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Interest expense: |
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Related parties |
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2,730 |
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2,548 |
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8,142 |
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6,940 |
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Other |
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67,425 |
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67,512 |
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203,031 |
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165,195 |
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70,155 |
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70,060 |
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211,173 |
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172,135 |
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Total expenses |
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213,962 |
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210,876 |
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641,688 |
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535,484 |
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Minority interest in consolidated joint ventures |
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(870 |
) |
(78 |
) |
(1,872 |
) |
(644 |
) |
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Equity in income of unconsolidated joint ventures |
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18,490 |
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18,831 |
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57,367 |
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46,416 |
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Income tax (expense) benefit |
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(535 |
) |
1,166 |
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(219 |
) |
2,205 |
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Gain on sale of assets |
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538 |
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10 |
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37 |
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1,177 |
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Loss on early extinguishment of debt |
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(29 |
) |
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(1,811 |
) |
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Income from continuing operations |
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15,738 |
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10,643 |
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38,218 |
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44,579 |
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Discontinued operations: |
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Gain on sale of assets |
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46,214 |
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72,167 |
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297 |
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Income from discontinued operations |
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116 |
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1,101 |
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2,977 |
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4,360 |
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Total income from discontinued operations |
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46,330 |
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1,101 |
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75,144 |
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4,657 |
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Income before minority interest and preferred dividends |
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62,068 |
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11,744 |
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113,362 |
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49,236 |
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Less: minority interest in Operating Partnership |
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8,901 |
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1,406 |
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15,131 |
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7,085 |
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Net income |
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53,167 |
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10,338 |
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98,231 |
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42,151 |
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Less: preferred dividends |
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6,199 |
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6,274 |
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18,139 |
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13,197 |
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Net income available to common stockholders |
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$ |
46,968 |
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$ |
4,064 |
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$ |
80,092 |
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$ |
28,954 |
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Earnings per common share - basic: |
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Income from continuing operations |
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$ |
0.11 |
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$ |
0.05 |
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$ |
0.23 |
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$ |
0.43 |
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Discontinued operations |
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0.55 |
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0.02 |
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0.90 |
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0.06 |
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Net income |
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$ |
0.66 |
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$ |
0.07 |
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$ |
1.13 |
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$ |
0.49 |
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Earnings per common share - diluted: |
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Income from continuing operations |
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$ |
0.12 |
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$ |
0.06 |
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$ |
0.24 |
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$ |
0.43 |
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Discontinued operations |
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0.54 |
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0.01 |
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0.89 |
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0.06 |
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Net income |
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$ |
0.66 |
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$ |
0.07 |
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$ |
1.13 |
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$ |
0.49 |
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Weighted average number of common shares outstanding: |
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Basic |
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71,479,000 |
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59,247,000 |
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70,587,000 |
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59,073,000 |
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Diluted |
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85,021,000 |
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73,660,000 |
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84,216,000 |
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73,522,000 |
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The accompanying notes are an integral part of these financial statements.
4
THE
MACERICH COMPANY
CONSOLIDATED STATEMENT OF COMMON STOCKHOLDERS EQUITY
(Dollars in thousands, except per share data)
(Unaudited)
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Common Stock |
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Additional |
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Accumulated |
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Unamortized |
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Total |
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Shares |
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Par |
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Paid-in |
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Accumulated |
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Comprehensive |
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Restricted |
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Stockholders |
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Balance December 31, 2005 |
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59,941,552 |
|
$ |
599 |
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$ |
1,050,891 |
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$ |
(209,005 |
) |
$ |
87 |
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$ |
(15,464 |
) |
$ |
827,108 |
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Comprehensive income: |
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Net income |
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|
98,231 |
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|
98,231 |
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Reclassification of deferred losses |
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1,008 |
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|
1,008 |
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Interest rate swap/cap agreements |
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90 |
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90 |
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Total comprehensive income |
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|
98,231 |
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1,098 |
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|
99,329 |
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Amortization of share-based plans |
|
376,578 |
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4 |
|
9,490 |
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9,494 |
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Exercise of stock options |
|
12,101 |
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|
205 |
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|
205 |
|
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Employee stock purchases |
|
3,365 |
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|
|
203 |
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|
203 |
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Common stock offering, gross |
|
10,952,381 |
|
109 |
|
761,081 |
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|
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|
761,190 |
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Underwriting and offering costs |
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|
|
|
(14,706 |
) |
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|
|
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(14,706 |
) |
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Distributions paid ($2.04) per share |
|
|
|
|
|
|
|
(146,522 |
) |
|
|
|
|
(146,522 |
) |
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Preferred dividends |
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|
|
|
|
|
|
(18,139 |
) |
|
|
|
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(18,139 |
) |
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Conversion of Operating Partnership Units |
|
196,097 |
|
3 |
|
7,686 |
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|
|
|
|
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|
7,689 |
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Change in accounting principle due to adoption of SFAS No. 123(R) |
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(15,464 |
) |
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15,464 |
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Reclassification upon adoption of SFAS No. 123(R) |
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6,000 |
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6,000 |
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Adjustment to reflect minority interest on a pro rata basis per period end ownership percentage of Operating Partnership Units |
|
|
|
|
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(95,404 |
) |
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(95,404 |
) |
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Balance September 30, 2006 |
|
71,482,074 |
|
$ |
715 |
|
$ |
1,709,982 |
|
$ |
(275,435 |
) |
$ |
1,185 |
|
$ |
|
|
$ |
1,436,447 |
|
The accompanying notes are an integral part of these financial statements.
5
THE
MACERICH COMPANY
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Dollars in thousands)
(Unaudited)
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For the Nine Months |
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Ended September 30, |
|
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2006 |
|
2005 |
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Cash flows from operating activities: |
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|
|
|
|
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Net income available to common stockholders |
|
$ |
80,092 |
|
$ |
28,954 |
|
Preferred dividends |
|
18,139 |
|
13,197 |
|
||
Net income |
|
98,231 |
|
42,151 |
|
||
Adjustments to reconcile net income to net cash provided by operating activities: |
|
|
|
|
|
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Loss on early extinguishment of debt |
|
1,811 |
|
|
|
||
Gain on sale of assets |
|
(37 |
) |
(1,177 |
) |
||
Discontinued operations gain on sale of assets |
|
(72,167 |
) |
(297 |
) |
||
Depreciation and amortization |
|
179,070 |
|
149,767 |
|
||
Amortization of net premium on mortgage notes payable |
|
(9,014 |
) |
(6,830 |
) |
||
Amortization of share-based plans |
|
6,533 |
|
6,098 |
|
||
Minority interest in Operating Partnership |
|
15,131 |
|
7,085 |
|
||
Minority interest in consolidated joint ventures |
|
2,284 |
|
471 |
|
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Equity in income of unconsolidated joint ventures |
|
(57,367 |
) |
(46,416 |
) |
||
Distributions of income from unconsolidated joint ventures |
|
3,213 |
|
5,482 |
|
||
Changes in assets and liabilities, net of acquisitions and dispositions: |
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|
|
|
|
||
Tenant receivables, net |
|
(5,982 |
) |
5,913 |
|
||
Other assets |
|
(466 |
) |
31,341 |
|
||
Accounts payable and accrued expenses |
|
(5,653 |
) |
4,658 |
|
||
Due from affiliates |
|
(260 |
) |
(10,778 |
) |
||
Other accrued liabilities |
|
(16,422 |
) |
(2,490 |
) |
||
Net cash provided by operating activities |
|
138,905 |
|
184,978 |
|
||
Cash flows from investing activities: |
|
|
|
|
|
||
Acquisitions of property and property improvements |
|
(492,578 |
) |
(110,290 |
) |
||
Issuance of note receivable |
|
(10,000 |
) |
|
|
||
Purchase of marketable securities |
|
(30,307 |
) |
|
|
||
Maturities of marketable securities |
|
184 |
|
|
|
||
Deferred leasing charges |
|
(20,359 |
) |
(16,007 |
) |
||
Distributions from unconsolidated joint ventures |
|
162,519 |
|
123,043 |
|
||
Contributions to unconsolidated joint ventures |
|
(24,681 |
) |
(91,715 |
) |
||
Repayments of loans to unconsolidated joint ventures |
|
600 |
|
2,423 |
|
||
Proceeds from sale of assets |
|
237,938 |
|
7,158 |
|
||
Restricted cash |
|
(7,769 |
) |
(9,945 |
) |
||
Net cash used in investing activities |
|
(184,453 |
) |
(95,333 |
) |
||
Cash flows from financing activities: |
|
|
|
|
|
||
Proceeds from mortgages and bank notes payable |
|
1,451,321 |
|
189,132 |
|
||
Payments on mortgages and bank notes payable |
|
(2,013,456 |
) |
(128,121 |
) |
||
Deferred financing costs |
|
(6,559 |
) |
(1,520 |
) |
||
Proceeds from share-based plans |
|
408 |
|
4,369 |
|
||
Net proceeds from stock offering |
|
746,804 |
|
|
|
||
Dividends and distributions |
|
(208,126 |
) |
(147,886 |
) |
||
Dividends to preferred stockholders / preferred unit holders |
|
(17,910 |
) |
(9,516 |
) |
||
Net cash used in financing activities |
|
(47,518 |
) |
(93,542 |
) |
||
Net decrease in cash |
|
(93,066 |
) |
(3,897 |
) |
||
Cash and cash equivalents, beginning of period |
|
155,113 |
|
72,114 |
|
||
Cash and cash equivalents, end of period |
|
$ |
62,047 |
|
$ |
68,217 |
|
Supplemental cash flow information: |
|
|
|
|
|
||
Cash payments for interest, net of amounts capitalized |
|
$ |
230,547 |
|
$ |
170,351 |
|
Non-cash transactions: |
|
|
|
|
|
||
Reclassification from other accrued liabilities to additional paid-in capital upon adoption of SFAS No. 123(R) |
|
$ |
6,000 |
|
$ |
|
|
Acquisition of property by issuance of bank notes payable |
|
$ |
|
|
$ |
1,198,503 |
|
Acquisition of property by assumption of mortgage notes payable |
|
$ |
|
|
$ |
809,542 |
|
Acquisition of property by issuance of convertible preferred units and common units |
|
$ |
|
|
$ |
241,103 |
|
The accompanying notes are an integral part of these financial statements.
6
THE
MACERICH COMPANY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Dollars in thousands, except per share
amounts)
(Unaudited)
1. Organization:
The Macerich Company (Company) is involved in the acquisition, ownership, development, redevelopment, management and leasing of regional and community shopping centers located throughout the United States. The Company was organized as a Maryland corporation in September 1993.
The Company is the sole general partner of, and owns or has a majority of the ownership interests in, The Macerich Partnership, L.P., a Delaware limited partnership (the Operating Partnership). As of September 30, 2006, the Operating Partnership owned or had an ownership interest in 73 regional shopping centers, 18 community shopping centers and two development properties aggregating approximately 79 million square feet of gross leasable area. These 93 regional, community and development shopping centers are referred to hereinafter as the Centers, unless the context otherwise requires.
The Company is a self-administered and self-managed real estate investment trust (REIT) and conducts all of its operations through the Operating Partnership and the Companys management companies, Macerich Property Management Company, LLC, a Delaware limited liability company, Macerich Management Company, a California corporation (MMC), Westcor Partners, L.L.C., an Arizona limited liability company, Macerich Westcor Management LLC, a Delaware limited liability company and Westcor Partners of Colorado, LLC, a Colorado limited liability company. As part of the Wilmorite closing (See Note 13 Acquisitions), the Company acquired MACW Mall Management, Inc., a New York corporation and MACW Property Management, LLC, a New York limited liability company. These two management companies are collectively referred to herein as the Wilmorite Management Companies. The three Westcor management companies are collectively referred to herein as the Westcor Management Companies. All seven of the management companies are collectively referred to herein as the Management Companies.
The Company was organized to qualify as a REIT under the Internal Revenue Code of 1986, as amended. As of September 30, 2006, the 16% limited partnership interest of the Operating Partnership not owned by the Company is reflected in these financial statements as minority interest.
2. Basis of Presentation:
The accompanying consolidated financial statements of the Company have been prepared in accordance with generally accepted accounting principles (GAAP) for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. They do not include all of the information and footnotes required by GAAP for complete financial statements and have not been audited by independent public accountants.
The accompanying consolidated financial statements include the accounts of the Company and the Operating Partnership. The interests in the Operating Partnership are known as OP units. OP units not held by the Company are redeemable, subject to certain restrictions, on a one-for-one basis for the Companys common stock or cash at the Companys option. Investments in entities that meet the definition of a variable interest entity in which an enterprise absorbs the majority of the entitys expected losses, receives a majority of the entitys expected residual returns, or both, as a result of ownership, contractual or other financial interests in the entity are consolidated; otherwise they are accounted for under the equity method and are reflected as Investments in Unconsolidated Joint Ventures.
7
The unaudited interim consolidated financial statements should be read in conjunction with the audited consolidated financial statements and related notes included in the Companys Annual Report on Form 10-K for the year ended December 31, 2005. In the opinion of management, all adjustments (consisting of normal recurring adjustments) necessary for a fair presentation of the financial statements for the interim periods have been made. The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. The accompanying consolidated balance sheet as of December 31, 2005 has been derived from the audited financial statements, but does not include all disclosures required by GAAP.
All intercompany accounts and transactions have been eliminated in the consolidated financial statements.
Accounting for Disposal of Long-Lived Assets:
On January 5, 2005, the Company sold Arizona Lifestyle Galleries for $4,300. The sale of this property resulted in a gain on sale of $297 and the impact on the results for the three and nine months ended September 30, 2005 were insignificant.
On June 9, 2006, the Company sold Scottsdale/101 for $117,600 resulting in a gain of $62,605. The Companys share of the gain was $25,789. Total revenues associated with Scottsdale/101 were $0 and $2,283 for the three months ended September 30, 2006 and 2005 and $4,632 and $7,080 for the nine months ended September 30, 2006 and 2005, respectively.
On July 13, 2006, the Company sold Park Lane Mall for $20,000 resulting in a gain of $5,911. Total revenues associated with Park Lane Mall were $106 and $760 for the three months ended September 30, 2006 and 2005 and $1,505 and $2,370 for the nine months ended September 30, 2006 and 2005, respectively.
On July 27, 2006, the Company sold the centers at Holiday Village and Greeley Mall in a combined sale for $86,800, resulting in a gain of $28,591. Concurrent with the sale, the Company defeased the mortgage note payable on Greeley Mall. As a result of the defeasance, the lenders secured interest in the property was replaced with a secured interest in marketable securities (See Note 6 Marketable Securities). This transaction did not meet the criteria for debt extinguishment under FAS 140, Accounting for Transfers and Servicing of Financial Assets and Extinguishment of Liabilities. Total revenues associated with Holiday Village were $353 and $1,276 for the three months ended September 30, 2006 and 2005 and $2,824 and $3,830 for the nine months ended September 30, 2006 and 2005, respectively. Total revenues associated with Greeley Mall were $442 and $1,544 for the three months ended September 30, 2006 and 2005 and $4,345 and $5,218 for the nine months ended September 30, 2006 and 2005, respectively.
On August 11, 2006, the Company sold Great Falls Marketplace for $27,500 resulting in a gain of $11,876. Total revenues associated with Great Falls Marketplace were $231 and $647 for the three months ended September 30, 2006 and 2005 and $1,559 and $2,005 for the nine months ended September 30, 2006 and 2005, respectively.
The proceeds from the sale of properties during the three months ended September 30, 2006 were used in part to fund the Companys pro rata share of the purchase price of the Federated acquisition (See Note 13 Acquisitions) and pay down the line of credit (See Note 9 Bank and Other Notes Payable).
Recent Accounting Pronouncements:
In December 2004, the Financial Accounting Standards Board (FASB) issued Statement of Financial Accounting Standards (SFAS) No. 123 (revised), Share-Based Payment SFAS No. 123(R) requires that all share-based payments to employees, including grants of employee awards and stock options, be recognized in the income statement based on their fair values. The Company adopted this statement at January 1, 2006. See Note 16 Share-Based Plans, for the impact of the adoption of SFAS No. 123 (R) on the results of operations.
8
In March 2005, FASB issued Interpretation No. 47 (FIN 47), Accounting for Conditional Asset Retirement Obligations an interpretation of SFAS No. 143. FIN 47, requires that a liability be recognized for the fair value of a conditional asset retirement obligation if the fair value can be reasonably estimated. As a result of the Companys adoption of FIN 47, the Company recorded an additional liability of $615 in 2005. As of September 30, 2006 and December 31, 2005, the Companys liability for retirement obligations was $292 and $1,163, respectively.
In June 2005, a consensus was reached by FASB related to Issue No. 04-5, Determining Whether a General Partner, or the General Partners as a Group, controls a Limited Partnership or Similar Entity When the Limited Partners have Certain Rights. The adoption of this pronouncement did not have a material effect on the Companys results of operations or financial condition.
In February 2006, the FASB issued SFAS No. 155, Accounting for Certain Hybrid Financial Instruments An Amendment of FASB Statements No. 133 and 140. This statement amended SFAS No. 133, Accounting for Derivative Instruments and Hedging Activities, and No. 140, Accounting for Transfers and Servicing of Financial Assets and Extinguishments of Liabilities. SFAS No. 155 permits fair value remeasurement for any hybrid financial instrument that contains an embedded derivative that otherwise would require bifurcation. This statement also established a requirement to evaluate interests in securitized financial assets to identify interests that are freestanding derivatives or that are hybrid financial instruments that contain an embedded derivative requiring bifurcation. The Company is required to adopt SFAS No. 155 for fiscal year 2007 and does not expect its adoption to have a material effect on the Companys results of operations or financial condition.
In June 2006, the FASB issued Interpretation No. 48, Accounting for Uncertainty in Income Taxes an interpretation of FASB Statement No. 109 (FIN 48). This interpretation clarifies the accounting for uncertainty in income taxes recognized in an enterprises financial statements in accordance with SFAS No. 109, Accounting for Income Taxes. This Interpretation prescribes a recognition threshold and measurement attribute for the financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. This Interpretation also provides guidance on derecognition of previously recognized income tax benefits, classification, interest and penalties, accounting in interim periods, disclosure, and transition. FIN 48 is effective for fiscal years beginning after December 15, 2006. The Company is currently evaluating the impact of FIN 48 on its consolidated results of operations and financial condition.
In September 2006, the FASB issued SFAS No. 157, Fair Value Measurements. SFAS No. 157 defines fair value, establishes a framework for measuring fair value, and expands disclosures about fair value measurements. The Company is required to adopt SFAS No. 157 for fiscal year 2008 and does not expect its adoption to have a material effect on the Companys results of operations or financial condition.
In September 2006, the Securities and Exchange Commission issued Staff Accounting Bulletin (SAB) No. 108. SAB No. 108 establishes a framework for quantifying materiality of financial statement misstatements. SAB No. 108 is effective for fiscal years ending after November 16, 2006. The Company is currently evaluating the impact of SAB No. 108 on its consolidated results of operations and financial condition.
Fair Value of Financial Instruments
The Company calculates the fair value of financial instruments and includes this additional information in the notes to consolidated financial statements when the fair value is different than the carrying value of those financial instruments. When the fair value reasonably approximates the carrying value, no additional disclosure is made. The estimated fair value amounts have been determined by the Company using available market information and appropriate valuation methodologies. However, considerable judgment is required in interpreting market data to develop the estimates of fair value. Accordingly, the estimates presented herein are not necessarily indicative of the amounts that the Company could realize in a current market exchange. The use of different market assumptions and/or estimation methodologies may have a material effect on the estimated fair value amounts.
9
Earnings per Share (EPS):
The computation of basic earnings per share is based on net income and the weighted average number of common shares outstanding for the three and nine months ended September 30, 2006 and 2005. The computation of diluted earnings per share includes the effect of dilutive securities calculated using the treasury stock method. The OP units not held by the Company have been included in the diluted EPS since they may be redeemable on a one-for-one basis for common stock, at the Companys option. The following table computes the basic and diluted earnings per share calculation (dollars and shares in thousands):
|
For the Three Months Ended September 30, |
|
|||||||||||||||
|
|
2006 |
|
2005 |
|
||||||||||||
|
|
Net Income |
|
Shares |
|
Per Share |
|
Net Income |
|
Shares |
|
Per Share |
|
||||
Net income |
|
$ |
53,167 |
|
|
|
|
|
$ |
10,338 |
|
|
|
|
|
||
Less: Preferred dividends (1) |
|
6,199 |
|
|
|
|
|
6,274 |
|
|
|
|
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Basic EPS: |
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Net income available to common stockholders |
|
46,968 |
|
71,479 |
|
$ |
0.66 |
|
4,064 |
|
59,247 |
|
$ |
0.07 |
|
||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Diluted EPS: |
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Conversion of OP units |
|
8,901 |
|
13,247 |
|
|
|
1,406 |
|
14,132 |
|
|
|
||||
Employee stock options |
|
|
|
295 |
|
|
|
|
|
281 |
|
|
|
||||
Net income available to common stockholders |
|
$ |
55,869 |
|
85,021 |
|
$ |
0.66 |
|
$ |
5,470 |
|
73,660 |
|
$ |
0.07 |
|
|
For the Nine Months Ended September 30, |
|
|||||||||||||||
|
|
2006 |
|
2005 |
|
||||||||||||
|
|
Net Income |
|
Shares |
|
Per Share |
|
Net Income |
|
Shares |
|
Per Share |
|
||||
Net income |
|
$ |
98,231 |
|
|
|
|
|
$ |
42,151 |
|
|
|
|
|
||
Less: Preferred dividends (1) |
|
18,139 |
|
|
|
|
|
13,197 |
|
|
|
|
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Basic EPS: |
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Net income available to common stockholders |
|
80,092 |
|
70,587 |
|
$ |
1.13 |
|
28,954 |
|
59,073 |
|
$ |
0.49 |
|
||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Diluted EPS: |
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Conversion of OP units |
|
15,131 |
|
13,337 |
|
|
|
7,085 |
|
14,114 |
|
|
|
||||
Employee stock options |
|
|
|
292 |
|
|
|
|
|
335 |
|
|
|
||||
Net income available to common stockholders |
|
$ |
95,223 |
|
84,216 |
|
$ |
1.13 |
|
$ |
36,039 |
|
73,522 |
|
$ |
0.49 |
|
(1) Preferred dividends include convertible preferred unit dividends of $3,624 and $3,771 for the three months ended September 30, 2006 and 2005 and $10,631 and $5,979 for the nine months ended September 30, 2006 and 2005, respectively (See Note 13 Acquisitions).
The minority interest in the Operating Partnership as reflected in the Companys consolidated statements of operations has been allocated for EPS calculations as follows:
|
For the Three Months Ended |
|
For the Nine Months Ended |
|
|||||||||
|
|
2006 |
|
2005 |
|
2006 |
|
2005 |
|
||||
Income from continuing operations |
|
$ |
1,656 |
|
$ |
1,194 |
|
$ |
3,191 |
|
$ |
6,187 |
|
Discontinued operations: |
|
|
|
|
|
|
|
|
|
||||
Gain on sale of assets |
|
7,227 |
|
|
|
11,467 |
|
57 |
|
||||
Income from discontinued operations |
|
18 |
|
212 |
|
473 |
|
841 |
|
||||
Total |
|
$ |
8,901 |
|
$ |
1,406 |
|
$ |
15,131 |
|
$ |
7,085 |
|
10
3. Investments in Unconsolidated Joint Ventures:
The following are the Companys investments in unconsolidated joint ventures. The Operating Partnerships interest in each joint venture property as of September 30, 2006 is as follows:
|
|
Partnerships |
|
Joint Venture |
|
Ownership % |
|
SDG Macerich Properties, L.P. |
|
50.0 |
% |
|
|
|
|
Pacific Premier Retail Trust |
|
51.0 |
% |
|
|
|
|
Westcor Joint Ventures: |
|
|
|
Camelback Colonnade SPE LLC |
|
75.0 |
% |
Chandler Festival SPE, LLC |
|
50.0 |
% |
Chandler Gateway SPE LLC |
|
50.0 |
% |
Coolidge Holding LLC |
|
37.5 |
% |
Desert Sky MallTenants in Common |
|
50.0 |
% |
East Mesa Land, L.L.C. |
|
50.0 |
% |
East Mesa Mall, L.L.C.Superstition Springs Center |
|
33.3 |
% |
Jaren Associates #4 |
|
12.5 |
% |
New River AssociatesArrowhead Towne Center |
|
33.3 |
% |
Propcor II Associates, LLCBoulevard Shops |
|
50.0 |
% |
Russ Lyon Realty/Westcor Venture I |
|
50.0 |
% |
SanTan Village Phase 2 LLC |
|
34.9 |
% |
Scottsdale Fashion Square Partnership |
|
50.0 |
% |
The Market at Estrella Falls LLC |
|
35.1 |
% |
Westcor/Gilbert, L.L.C. |
|
50.0 |
% |
Westcor/Goodyear, L.L.C. |
|
50.0 |
% |
Westcor/Queen Creek LLC |
|
37.5 |
% |
Westcor/Queen Creek Residential LLC |
|
37.5 |
% |
Westcor/Surprise LLC |
|
33.3 |
% |
Westlinc AssociatesHilton Village |
|
50.0 |
% |
Westpen Associates |
|
50.0 |
% |
|
|
|
|
Other Joint Ventures: |
|
|
|
Biltmore Shopping Center Partners LLC |
|
50.0 |
% |
Chandler Village Center, LLC |
|
50.0 |
% |
Corte Madera Village, LLC |
|
50.1 |
% |
Kierland Tower Lofts, LLC |
|
15.0 |
% |
Macerich Northwestern Associates |
|
50.0 |
% |
MetroRising AMS Holding LLC |
|
15.0 |
% |
NorthPark Land Partners, LP |
|
50.0 |
% |
NorthPark Partners, LP |
|
50.0 |
% |
PHXAZ/Kierland Commons, L.L.C. |
|
24.5 |
% |
Propcor Associates |
|
25.0 |
% |
Tysons Corner Holdings LLC |
|
50.0 |
% |
Tysons Corner Property Holdings LLC |
|
50.0 |
% |
Tysons Corner LLC |
|
50.0 |
% |
Tysons Corner Property Holdings II LLC |
|
50.0 |
% |
Tysons Corner Property LLC |
|
50.0 |
% |
Westcor/Queen Creek Commercial LLC |
|
37.6 |
% |
Westcor/Queen Creek Medical LLC |
|
37.6 |
% |
Westcor/Surprise Auto Park LLC |
|
33.3 |
% |
West Acres Development, LLP |
|
19.0 |
% |
W.M. Inland, L.L.C. |
|
50.0 |
% |
WM Ridgmar, L.P. |
|
50.0 |
% |
11
The Company accounts for unconsolidated joint ventures using the equity method of accounting. Although the Company has a greater than 50% interest in Pacific Premier Retail Trust, Camelback Colonnade SPE LLC and Corte Madera Village, LLC, the Company shares management control with these joint venture partners and accounts for these joint ventures using the equity method of accounting.
On January 11, 2005, the Company became a 15% owner in a joint venture that acquired Metrocenter, a 1.3 million square foot super-regional mall in Phoenix, Arizona. The total purchase price was $160,000 and concurrently with the acquisition, the joint venture placed a $112,000 floating rate loan on the property. The Companys share of the purchase price, net of the debt, was $7,200 which was funded by cash and borrowings under the Companys line of credit. The results of Metrocenter are included below for the period subsequent to its date of acquisition.
On January 21, 2005, the Company formed a 50/50 joint venture with a private investment company. The joint venture acquired a 49% interest in Kierland Commons, a 437,000 square foot mixed use center in Phoenix, Arizona. The joint ventures purchase price for the interest in the center was $49,000. The Company assumed its share of the underlying property debt and funded the remainder of its share of the purchase price with cash and borrowings under the Companys line of credit. The results of Kierland Commons are included below for the period subsequent to its date of acquisition.
On April 8, 2005, the Company formed a 50/50 joint venture with an affiliate of Walton Street Capital, LLC, and acquired Ridgmar Mall, a 1.3 million square foot super-regional mall in Fort Worth, Texas. The total purchase price was $71,075 and concurrently with the transaction, the joint venture placed a $57,400 fixed rate loan on the property with an annual interest rate of 6.0725%. The balance of the Companys pro rata share, $6,838, of the purchase price was funded by borrowings under the Companys line of credit. The results of Ridgmar Mall are included below for the period subsequent to its date of acquisition.
On April 25, 2005, as part of the Wilmorite acquisition (See Note 13 Acquisitions), the Company became a 50% joint venture partner in Tysons Corner, a 2.2 million super-regional mall in McLean, Virginia. The results of Tysons Corner below are included for the period subsequent to its date of acquisition.
Combined and Condensed Balance Sheets of Unconsolidated Joint Ventures
|
September 30, |
|
December 31, |
|
|||
|
|
2006 |
|
2005 |
|
||
Assets: |
|
|
|
|
|
||
Properties, net |
|
$ |
4,237,506 |
|
$ |
4,127,540 |
|
Other assets |
|
412,025 |
|
333,022 |
|
||
Total assets |
|
$ |
4,649,531 |
|
$ |
4,460,562 |
|
|
|
|
|
|
|
||
Liabilities and partners capital: |
|
|
|
|
|
||
Mortgage notes payable(1) |
|
$ |
3,469,793 |
|
$ |
3,077,018 |
|
Other liabilities |
|
170,877 |
|
169,253 |
|
||
The Companys capital(2) |
|
550,455 |
|
618,803 |
|
||
Outside partners capital |
|
458,406 |
|
595,488 |
|
||
Total liabilities and partners capital |
|
$ |
4,649,531 |
|
$ |
4,460,562 |
|
(1) Certain joint ventures have debt that could become recourse debt to the Company should the joint venture be unable to discharge the obligations of the related debt. As of September 30, 2006 and December 31, 2005, the total amount of debt that could become recourse to the Company was $10,246 and $21,630, respectively.
(2) The Companys investment in unconsolidated joint ventures was $450,596 and $456,818 more than the underlying equity as reflected in the joint ventures financial statements as of September 30, 2006 and December 31, 2005, respectively. This represents the difference between the cost of the investment and the book value of the underlying equity of the joint venture. The Company is amortizing this difference into income on a straight-line basis, consistent with the depreciable lives on property. The amortization of this difference was $5,024 and $4,424 for the three months ended September 30, 2006 and 2005, and $12,039 and $10,226 for the nine months ended September 30, 2006 and 2005, respectively.
12
Combined and Condensed Statements of Operations of Unconsolidated Joint Ventures
|
|
SDG |
|
Pacific |
|
Westcor |
|
Other |
|
|
|
|||||
|
|
Macerich |
|
Premier |
|
Joint |
|
Joint |
|
|
|
|||||
|
|
Properties |
|
Retail Trust |
|
Ventures |
|
Ventures |
|
Total |
|
|||||
Three Months Ended September 30, 2006 |
|
|
|
|
|
|
|
|
|
|
|
|||||
Revenues: |
|
|
|
|
|
|
|
|
|
|
|
|||||
Minimum rents |
|
$ |
23,063 |
|
$ |
30,482 |
|
$ |
23,838 |
|
$ |
54,189 |
|
$ |
131,572 |
|
Percentage rents |
|
796 |
|
1,429 |
|
1,488 |
|
3,590 |
|
7,303 |
|
|||||
Tenant recoveries |
|
12,732 |
|
12,532 |
|
11,099 |
|
25,649 |
|
62,012 |
|
|||||
Other |
|
1,218 |
|
1,047 |
|
1,691 |
|
4,587 |
|
8,543 |
|
|||||
Total revenues |
|
37,809 |
|
45,490 |
|
38,116 |
|
88,015 |
|
209,430 |
|
|||||
Expenses: |
|
|
|
|
|
|
|
|
|
|
|
|||||
Shopping center and operating expenses |
|
14,149 |
|
13,896 |
|
12,029 |
|
31,078 |
|
71,152 |
|
|||||
Interest expense |
|
11,869 |
|
12,742 |
|
9,811 |
|
19,210 |
|
53,632 |
|
|||||
Depreciation and amortization |
|
7,195 |
|
7,385 |
|
6,870 |
|
20,794 |
|
42,244 |
|
|||||
Total operating expenses |
|
33,213 |
|
34,023 |
|
28,710 |
|
71,082 |
|
167,028 |
|
|||||
Gain (loss) on sale or write-down of assets |
|
2 |
|
|
|
(4 |
) |
|
|
(2 |
) |
|||||
Net income |
|
$ |
4,598 |
|
$ |
11,467 |
|
$ |
9,402 |
|
$ |
16,933 |
|
$ |
42,400 |
|
Companys equity in net income |
|
$ |
2,300 |
|
$ |
5,838 |
|
$ |
2,517 |
|
$ |
7,835 |
|
$ |
18,490 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Three Months Ended September 30, 2005 |
|
|
|
|
|
|
|
|
|
|
|
|||||
Revenues: |
|
|
|
|
|
|
|
|
|
|
|
|||||
Minimum rents |
|
$ |
22,945 |
|
$ |
28,746 |
|
$ |
22,606 |
|
$ |
35,926 |
|
$ |
110,223 |
|
Percentage rents |
|
760 |
|
1,225 |
|
1,305 |
|
1,701 |
|
4,991 |
|
|||||
Tenant recoveries |
|
11,600 |
|
11,000 |
|
10,532 |
|
16,961 |
|
50,093 |
|
|||||
Other |
|
687 |
|
841 |
|
1,605 |
|
3,078 |
|
6,211 |
|
|||||
Total revenues |
|
35,992 |
|
41,812 |
|
36,048 |
|
57,666 |
|
171,518 |
|
|||||
Expenses: |
|
|
|
|
|
|
|
|
|
|
|
|||||
Shopping center and operating expenses |
|
14,199 |
|
11,496 |
|
11,616 |
|
22,810 |
|
60,121 |
|
|||||
Interest expense |
|
8,552 |
|
12,659 |
|
8,277 |
|
10,355 |
|
39,843 |
|
|||||
Depreciation and amortization |
|
7,177 |
|
6,977 |
|
6,975 |
|
10,789 |
|
31,918 |
|
|||||
Total operating expenses |
|
29,928 |
|
31,132 |
|
26,868 |
|
43,954 |
|
131,882 |
|
|||||
Gain (loss) on sale of assets |
|
|
|
|
|
5,858 |
|
(12 |
) |
5,846 |
|
|||||
Loss on early extinguishment of debt |
|
|
|
(13 |
) |
|
|
|
|
(13 |
) |
|||||
Net income |
|
$ |
6,064 |
|
$ |
10,667 |
|
$ |
15,038 |
|
$ |
13,700 |
|
$ |
45,469 |
|
Companys equity in net income |
|
$ |
3,032 |
|
$ |
5,433 |
|
$ |
5,261 |
|
$ |
5,105 |
|
$ |
18,831 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Nine Months Ended September 30, 2006 |
|
|
|
|
|
|
|
|
|
|
|
|||||
Revenues: |
|
|
|
|
|
|
|
|
|
|
|
|||||
Minimum rents |
|
$ |
70,296 |
|
$ |
92,376 |
|
$ |
72,557 |
|
$ |
136,050 |
|
$ |
371,279 |
|
Percentage rents |
|
2,405 |
|
4,085 |
|
3,478 |
|
6,688 |
|
16,656 |
|
|||||
Tenant recoveries |
|
35,371 |
|
36,598 |
|
32,057 |
|
70,896 |
|
174,922 |
|
|||||
Other |
|
2,830 |
|
2,915 |
|
4,695 |
|
12,311 |
|
22,751 |
|
|||||
Total revenues |
|
110,902 |
|
135,974 |
|
112,787 |
|
225,945 |
|
585,608 |
|
|||||
Expenses: |
|
|
|
|
|
|
|
|
|
|
|
|||||
Shopping center and operating expenses |
|
43,179 |
|
38,146 |
|
35,622 |
|
80,889 |
|
197,836 |
|
|||||
Interest expense |
|
32,312 |
|
38,426 |
|
28,865 |
|
46,665 |
|
146,268 |
|
|||||
Depreciation and amortization |
|
21,719 |
|
21,876 |
|
21,989 |
|
49,289 |
|
114,873 |
|
|||||
Total operating expenses |
|
97,210 |
|
98,448 |
|
86,476 |
|
176,843 |
|
458,977 |
|
|||||
Gain on sale or write-down of assets |
|
2 |
|
|
|
576 |
|
325 |
|
903 |
|
|||||
Net income |
|
$ |
13,694 |
|
$ |
37,526 |
|
$ |
26,887 |
|
$ |
49,427 |
|
$ |
127,534 |
|
Companys equity in net income |
|
$ |
6,847 |
|
$ |
19,030 |
|
$ |
8,785 |
|
$ |
22,705 |
|
$ |
57,367 |
|
13
|
|
SDG |
|
Pacific |
|
Westcor |
|
Other |
|
|
|
|||||
|
|
Macerich |
|
Premier |
|
Joint |
|
Joint |
|
|
|
|||||
|
|
Properties |
|
Retail Trust |
|
Ventures |
|
Ventures |
|
Total |
|
|||||
Nine Months Ended September 30, 2005 |
|
|
|
|
|
|
|
|
|
|
|
|||||
Revenues: |
|
|
|
|
|
|
|
|
|
|
|
|||||
Minimum rents |
|
$ |
68,765 |
|
$ |
85,611 |
|
$ |
66,534 |
|
$ |
87,143 |
|
$ |
308,053 |
|
Percentage rents |
|
2,620 |
|
3,531 |
|
2,319 |
|
3,690 |
|
12,160 |
|
|||||
Tenant recoveries |
|
33,913 |
|
31,271 |
|
29,449 |
|
42,871 |
|
137,504 |
|
|||||
Other |
|
3,191 |
|
2,744 |
|
3,809 |
|
8,578 |
|
18,322 |
|
|||||
Total revenues |
|
108,489 |
|
123,157 |
|
102,111 |
|
142,282 |
|
476,039 |
|
|||||
Expenses: |
|
|
|
|
|
|
|
|
|
|
|
|||||
Shopping center and operating expenses |
|
42,466 |
|
34,767 |
|
33,585 |
|
55,700 |
|
166,518 |
|
|||||
Interest expense |
|
25,375 |
|
36,787 |
|
24,998 |
|
31,915 |
|
119,075 |
|
|||||
Depreciation and amortization |
|
21,564 |
|
20,871 |
|
23,494 |
|
27,068 |
|
92,997 |
|
|||||
Total operating expenses |
|
89,405 |
|
92,425 |
|
82,077 |
|
114,683 |
|
378,590 |
|
|||||
Gain (loss) on sale of assets |
|
|
|
|
|
7,317 |
|
(12 |
) |
7,305 |
|
|||||
Loss on early extinguishment of debt |
|
|
|
(13 |
) |
|
|
|
|
(13 |
) |
|||||
Net income |
|
$ |
19,084 |
|
$ |
30,719 |
|
$ |
27,351 |
|
$ |
27,587 |
|
$ |
104,741 |
|
Companys equity in net income |
|
$ |
9,542 |
|
$ |
15,644 |
|
$ |
9,940 |
|
$ |
11,290 |
|
$ |
46,416 |
|
Significant accounting policies used by the unconsolidated joint ventures are similar to those used by the Company. Included in mortgage notes payable are amounts due to affiliates of Northwestern Mutual Life (NML) of $133,659 and $137,954 as of September 30, 2006 and December 31, 2005, respectively. NML is considered a related party because they are a joint venture partner with the Company in Macerich Northwestern Associates. Interest expense incurred on these borrowings amounted to $2,285 and $2,372 for the three months ended September 30, 2006 and 2005 and $6,830 and $7,097 for the nine months ended September 30, 2006 and 2005, respectively.
4. Derivative Instruments and Hedging Activities
The Company recognizes all derivatives in the consolidated financial statements and measures the derivatives at fair value. The Company uses derivative financial instruments in the normal course of business to manage or reduce its exposure to adverse fluctuations in interest rates. The Company designs its hedges to be effective in reducing the risk exposure that they are designated to hedge. Any instrument that meets the cash flow hedging criteria, in SFAS 133, Accounting for Derivative Instruments and Hedging Activities, is formally designated as a cash flow hedge at the inception of the derivative contract. On an ongoing quarterly basis, the Company adjusts its balance sheet to reflect the current fair value of its derivatives. To the extent they are effective, changes in the fair value of derivatives are recorded each period in comprehensive income. Ineffective portions if any, are included in net income. No ineffectiveness was recorded in net income during the three and nine months ended September 30, 2006 and 2005. If any derivative instrument used for risk management does not meet the hedging criteria, it is marked-to-market each period in the consolidated statements of operations. As of September 30, 2006, five of the Companys derivative instruments were not designated as cash flow hedges.
As of September 30, 2006 and December 31, 2005, the Company had $1,754 and $2,762, respectively, reflected in comprehensive income related to treasury rate locks settled in prior years. The Company reclassified $339 and $330 for the three months ended September 30, 2006 and 2005 and $1,008 and $1,008 for the nine months ended September 30, 2006 and 2005, respectively, related to treasury rate lock transactions settled in prior years from accumulated other comprehensive income to earnings. It is anticipated that an additional $1,344 will be reclassified during the following year.
Interest rate swap and cap agreements are purchased by the Company from third parties to manage the risk of interest rate changes on some of the Companys floating rate debt. Payments received as a result of these agreements are recorded as a reduction of interest expense. The fair value of the instrument is included in deferred charges and other assets. The Company recorded other comprehensive income (loss) of $90 and ($1,358) related to the marking-to-market of interest rate swap/cap agreements for the nine months ended September 30, 2006 and 2005, respectively.
14
5. Property:
Property consists of the following:
|
September 30, |
|
December 31, |
|
|||
|
|
2006 |
|
2005 |
|
||
Land |
|
$ |
1,178,821 |
|
$ |
1,095,180 |
|
Building improvements |
|
4,661,734 |
|
4,604,803 |
|
||
Tenant improvements |
|
223,632 |
|
222,619 |
|
||
Equipment and furnishings |
|
82,535 |
|
75,836 |
|
||
Construction in progress |
|
295,852 |
|
162,157 |
|
||
|
|
6,442,574 |
|
6,160,595 |
|
||
Less accumulated depreciation |
|
(766,615 |
) |
(722,099 |
) |
||
|
|
$ |
5,675,959 |
|
$ |
5,438,496 |
|
The Company had a loss of $600 from the sale of assets and a $637 gain from the sale of land, during the nine months ended September 30, 2006 and a loss of $131 from the sale of assets and a gain on sale of land of $1,308 for the nine months ended September 30, 2005.
6. Marketable Securities:
The Company accounts for its investments in marketable securities as held-to maturity debt securities under the provisions of SFAS No. 115, Accounting for Certain Investments in Debt and Equity Securities as the Company has the intent and ability to hold these securities to maturity. Accordingly, investments in marketable securities are carried at their amortized cost. The discount on marketable securities will be amortized into interest income on a straight-line basis over the term of the notes, which approximates the effective interest method.
Marketable securities consist of the following:
|
September 30, |
|
December 31, |
|
|||
|
|
2006 |
|
2005 |
|
||
Government debt securities, at par value |
|
$ |
32,126 |
|
$ |
|
|
Less discount |
|
(1,938 |
) |
|
|
||
|
|
30,188 |
|
|
|
||
Unrealized gain |
|
644 |
|
|
|
||
Fair value |
|
$ |
30,832 |
|
$ |
|
|
Future contractual maturities of marketable securities are as follows:
1 year or less |
|
$ |
1,172 |
|
1 to 5 years |
|
6,595 |
|
|
5 to 10 year |
|
24,359 |
|
|
|
|
$ |
32,126 |
|
The proceeds from maturities and interest receipts from the marketable securities are restricted to the service of the $28,427 note on which the Company remains obligated following the sale of Greeley Mall on July 27, 2006 (See Note 9 Bank and Other Notes Payable).
15
7. Deferred Charges And Other Assets:
Deferred charges and other assets are summarized as follows:
|
September 30, |
|
December 31, |
|
|||
|
|
2006 |
|
2005 |
|
||
Leasing |
|
$ |
119,562 |
|
$ |
117,060 |
|
Financing |
|
41,388 |
|
39,323 |
|
||
Intangible assets resulting from SFAS No. 141 allocations: |
|
|
|
|
|
||
In-place lease values |
|
207,580 |
|
218,488 |
|
||
Leasing commissions and legal costs |
|
36,237 |
|
36,732 |
|
||
|
|
404,767 |
|
411,603 |
|
||
Less accumulated amortization |
|
(165,562 |
) |
(142,747 |
) |
||
|
|
239,205 |
|
268,856 |
|
||
Other assets |
|
90,235 |
|
91,361 |
|
||
|
|
$ |
329,440 |
|
$ |
360,217 |
|
Additionally, as it relates to SFAS No. 141, a deferred credit representing the allocated value to below market leases of $77,513 and $84,241 is recorded in Other accrued liabilities of the Company, as of September 30, 2006 and December 31, 2005, respectively. Included in Other assets of the Company is an allocated value of above market leases of $32,264 and $28,660, as of September 30, 2006 and December 31, 2005, respectively. The allocated values of below and above market leases will be amortized into minimum rents revenue on a straight-line basis over the individual remaining lease terms.
16
8. Mortgage Notes Payable:
Mortgage notes payable consist of the following:
|
|
Carrying Amount of Mortgage Notes (a) |
|
|
|
|
|
|
|
|||||||||||
|
|
September 30, 2006 |
|
December 31, 2005 |
|
|
|
Monthly |
|
|
|
|||||||||
Property Pledged as Collateral |
|
Other |
|
Related |
|
Other |
|
Related |
|
Interest |
|
Payment |
|
Maturity |
|
|||||
Borgata |
|
$ |
15,022 |
|
$ |
|
|
$ |
15,422 |
|
$ |
|
|
5.39 |
% |
$ |
115 |
|
2007 |
|
Capitola Mall |
|
|
|
41,404 |
|
|
|
42,573 |
|
7.13 |
% |
380 |
|
2011 |
|
|||||
Carmel Plaza |
|
26,776 |
|
|
|
27,064 |
|
|
|
8.18 |
% |
202 |
|
2009 |
|
|||||
Casa Grande (c) |
|
4,984 |
|
|
|
|
|
|
|
6.73 |
% |
28 |
|
2009 |
|
|||||
Chandler Fashion Center |
|
173,656 |
|
|
|
175,853 |
|
|
|
5.48 |
% |
1,043 |
|
2012 |
|
|||||
Chesterfield Towne Center (d) |
|
57,498 |
|
|
|
58,483 |
|
|
|
9.07 |
% |
548 |
|
2024 |
|
|||||
Citadel, The |
|
62,598 |
|
|
|
64,069 |
|
|
|
7.20 |
% |
544 |
|
2008 |
|
|||||
Crossroads Mall (e) |
|
61,200 |
|
|
|
|
|
|
|
6.26 |
% |
319 |
|
2016 |
|
|||||
Danbury Fair Mall |
|
184,474 |
|
|
|
189,137 |
|
|
|
4.64 |
% |
1,225 |
|
2011 |
|
|||||
Eastview Commons |
|
9,192 |
|
|
|
9,411 |
|
|
|
5.46 |
% |
66 |
|
2010 |
|
|||||
Eastview Mall |
|
103,329 |
|
|
|
104,654 |
|
|
|
5.10 |
% |
592 |
|
2014 |
|
|||||
Fiesta Mall |
|
84,000 |
|
|
|
84,000 |
|
|
|
4.88 |
% |
346 |
|
2015 |
|
|||||
Flagstaff Mall |
|
37,000 |
|
|
|
37,000 |
|
|
|
4.97 |
% |
155 |
|
2015 |
|
|||||
FlatIron Crossing |
|
191,847 |
|
|
|
194,188 |
|
|
|
5.23 |
% |
1,102 |
|
2013 |
|
|||||
Freehold Raceway Mall |
|
184,942 |
|
|
|
189,161 |
|
|
|
4.68 |
% |
1,184 |
|
2011 |
|
|||||
Fresno Fashion Fair |
|
64,838 |
|
|
|
65,535 |
|
|
|
6.52 |
% |
437 |
|
2008 |
|
|||||
Great Northern Mall |
|
41,109 |
|
|
|
41,575 |
|
|
|
5.19 |
% |
224 |
|
2013 |
|
|||||
Greece Ridge Center (f) |
|
72,000 |
|
|
|
72,012 |
|
|
|
5.98 |
% |
305 |
|
2007 |
|
|||||
Greeley Mall |
|
|
|
|
|
28,849 |
|
|
|
6.18 |
% |
|
|
(g) |
|
|||||
La Cumbre Plaza (h) |
|
30,000 |
|
|
|
30,000 |
|
|
|
6.21 |
% |
133 |
|
2007 |
|
|||||
La Encantada (i) |
|
51,000 |
|
|
|
45,905 |
|
|
|
7.08 |
% |
248 |
|
2008 |
|
|||||
Marketplace Mall |
|
40,746 |
|
|
|
41,545 |
|
|
|
5.30 |
% |
267 |
|
2017 |
|
|||||
Northridge Mall (j) |
|
82,852 |
|
|
|
83,840 |
|
|
|
4.84 |
% |
453 |
|
2009 |
|
|||||
Northwest Arkansas Mall |
|
53,252 |
|
|
|
54,442 |
|
|
|
7.33 |
% |
434 |
|
2009 |
|
|||||
Oaks, The (k) |
|
92,000 |
|
|
|
108,000 |
|
|
|
6.03 |
% |
487 |
|
2007 |
|
|||||
Pacific View |
|
90,560 |
|
|
|
91,512 |
|
|
|
7.15 |
% |
648 |
|
2011 |
|
|||||
Panorama Mall (l) |
|
50,000 |
|
|
|