SECURITIES AND EXCHANGE COMMISSION

Washington, D.C.  20549

FORM 8-K

CURRENT REPORT

PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934

Date of report (Date of earliest event reported) November 3, 2006

THE MACERICH COMPANY

(Exact Name of Registrant as Specified in its Charter)

 

401 Wilshire Boulevard, Suite 700, Santa Monica, California 90401

(Address of principal executive office, including zip code)

Registrant’s telephone number, including area code  (310) 394-6000

N/A

(Former name, former address and former fiscal year, if changed since last report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

o  Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

o  Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

o  Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

o  Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

 

ITEM 2.02             RESULTS OF OPERATIONS AND FINANCIAL CONDITION.

The Company issued a press release on November 3, 2006, announcing results of operations for the Company for the quarter ended September 30, 2006 and such press release is furnished as Exhibit 99.1 hereto.

The press release included as an exhibit with this report is being furnished pursuant to Item 2.02 and Item 7.01 of Form 8-K and shall not be deemed to be “filed” with the SEC or incorporated by reference into any other filing with the SEC.

ITEM 7.01             REGULATION FD DISCLOSURE.

On November 3, 2006, the Company made available on its website a quarterly financial supplement containing financial and operating information of the Company (“Supplemental Financial Information”) for the three and nine months ended September 30, 2006 and such Supplemental Financial Information is furnished as Exhibit 99.2 hereto.

The Supplemental Financial Information included as an exhibit with this report is being furnished pursuant to Item 7.01 of Form 8-K and shall not be deemed to be “filed” with the SEC or incorporated by reference into any other filing with the SEC.

ITEM 9.01             FINANCIAL STATEMENTS AND EXHIBITS.

Listed below are the financial statements, pro forma financial information and exhibits furnished as part of this report:

(a), (b) and (c) Not applicable.

(d) Exhibits.

Exhibit Index attached hereto and incorporated herein by reference.

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, The Macerich Company has duly caused this report to be signed by the undersigned, hereunto duly authorized, in the City of Santa Monica, State of California, on November 3, 2006.

	THE MACERICH COMPANY
	By: THOMAS E. O’HERN
	/s/ Thomas E. O’Hern
	Executive Vice President,
	Chief Financial Officer
	and Treasurer

 

3

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EXHIBIT INDEX

EXHIBIT
NUMBER		NAME
99.1		Press Release dated November 3, 2006
99.2		Supplemental Financial and Operating Information for the three and nine months ended  September 30, 2006

 

4

Exhibit 99.1

PRESS RELEASE

For:	THE MACERICH COMPANY
Press Contact:	Arthur Coppola, President and Chief Executive Officer
	or
	Thomas E. O’Hern, Executive Vice President and
	Chief Financial Officer
	(310) 394-6000

 

MACERICH ANNOUNCES THIRD QUARTER RESULTS

Santa Monica, CA (11/03/06) - - The Macerich Company (NYSE: MAC) today announced results of operations for the quarter ended September 30, 2006 which included net income available to common stockholders of $47.0 million or $.66 per share-diluted compared to $4.1 million or $.07 per share-diluted for the quarter ended September 30, 2005.  For the nine months ended September 30, 2006, net income increased to $80.1 million compared to $28.9 million for the nine months ended September 30, 2005.  Funds from operations (“FFO”) diluted was $86.6 million or $.98 per share compared to $81.1 million or $1.04 per share for the quarter ended September 30, 2005. For the nine months ended September 30, 2006, FFO-diluted was $262.0 million compared to $234.1 million for the nine months ended September 30, 2005.  The Company’s definition of FFO is in accordance with the definition provided by the National Association of Real Estate Investment Trusts (“NAREIT”). A reconciliation of net income to FFO and net income per common share-diluted (“EPS”) to FFO per share-diluted is included in the financial tables accompanying this press release.

Recent Highlights:

·                  During the quarter, Macerich signed 326,000 square feet of specialty store leases at average initial rents of $40.88 per square foot.  Starting base rent on new lease signings was 23.7% higher than the expiring base rent.

·                  Total same center tenant sales, for the quarter ended September 30, 2006, were up 5.3% compared to sales for the quarter ended September 30, 2005.

·                  Portfolio occupancy at September 30, 2006 was 93.0% compared to 93.4% at September 30, 2005.  On a same center basis, occupancy was 93.0% at September 30, 2006 compared to 93.6% at September 30, 2005.

·                  During the third quarter, Great Falls Marketplace, Greeley Mall, Holiday Village Mall, and Parklane Mall were sold for a combined sale price of approximately $132 million.  The Macerich total gain on sale of these assets recognized during the quarter was in excess of $46 million.

Commenting on results, Arthur Coppola president and chief executive officer of Macerich stated, “The quarter was highlighted by continued strong core operations.  Occupancy remained high, leasing spreads were excellent and mall tenant sales growth continued at a healthy level.

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In addition during the quarter we were active in selling non-core assets and improving our balance sheet. The ultimate use of the sale proceeds will be for our upcoming developments and redevelopments which is a very effective recycling of our capital.  The strengthening of our balance sheet leaves us well positioned to take advantage of the pipeline of development and redevelopment opportunities in our existing portfolio.”

Redevelopment and Development Activity

The grand opening of the first phase of Twenty-Ninth Street, an 805,000 square foot shopping district in Boulder, Colorado, took place on October 13.  The balance of the project is scheduled for completion in the summer 2007.  Phase I of the project is 87% leased with another 7% of the space in negotiation.  Tenants include Ann Taylor Loft, Apple, Bath and Body Works, Borders, California Pizza Kitchen, Century Theatres, Coldwater Creek, Home Depot, J. Jill, Macy’s, Muttropolis, Puma, Purple Martini, Victoria’s Secret and Wild Oats Market.

The grand re-opening of Carmel Plaza took place on October 21.  The center underwent an $11 million renovation which included the reconfiguring of a former department store space.  New high-profile luxury tenants include San Francisco based Wilkes Bashford, Tiffany & Co., Cos Bar and Anthropologie.

On November 1, we received City Council approval for our application to add up to four or five mixed use towers of up to 165 feet at Biltmore Fashion Park.  Biltmore Fashion Park is an established luxury destination for first-to-market, high-end and luxury tenants in the metropolitan Phoenix market.  The mixed use towers are planned to be built over time based upon demand.

In Thousand Oaks, California, the planning commission voted on October 23 to approve the first comprehensive renovation and expansion plan of The Oaks Mall since it was first opened in 1978.  The expansion will add 230,000 square feet of building area to the approximately 1 million square feet of space that currently exists.  Construction is projected to start in January 2007.  The expansion, including a new 144,000 square foot Nordstrom is scheduled to open at the center in fall 2008.

At Westside Pavilion in Los Angeles, construction continues on the redevelopment of the western portion of the center that will include a 12 screen, state of the art Landmark Theatre, a Barnes & Noble and restaurants.  The estimated completion of the redevelopment is fall 2007.

In February, construction began on the SanTan Village regional shopping center in Gilbert, Arizona.  The center is an outdoor open air streetscape project planned to contain in excess of 1.2 million square feet on 120 acres.  The center is currently 70% leased and will be anchored by Dillard’s, Harkins Theatres and will contain a lifestyle shopping district featuring retail, office and restaurants.  Additional tenants include American Eagle Outfitters, Ann Taylor Loft, Borders, Charlotte Russe, Chico’s, Coldwater Creek, J. Jill, Lucy, Pac Sun and Soma.  The project is scheduled to open in phases starting in the fall of 2007, with the retail phases expected to be completed by late 2008.

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Asset Sales

Macerich continued its strategy of selling non-core assets with the third quarter sales of Great Falls Marketplace, Greeley Mall, Holiday Village Mall and Parklane Mall.  The aggregate total purchase price was approximately $132 million.  The gain on the sale of these four assets was in excess of $46 million.  These centers totaled 1.0 million square feet and averaged $239 per square foot in annual tenant sales.

Financing Activity

In July, the Company’s line of credit was upsized from $1.0 billion to $1.5 billion.  The borrowing spread was reduced by .25% to 1.15% over LIBOR at the current leverage level.  The maturity was extended from July 2007 to April 2010.  In September, Macerich swapped $400 million of the line to a fixed rate of 5.08% plus the applicable line of credit borrowing spread.

In July, a $61 million, 6.26% fixed rate, 10-year loan was placed on Crossroads Mall.   The loan proceeds were used primarily to pay-down floating rate debt.

Primarily as a result of the above transactions and the application of the asset sale proceeds to reduce the line of credit indebtedness, the percentage of unhedged floating rate debt to total debt was reduced to 18.65%.

Macerich is a fully integrated self-managed and self-administered real estate investment trust, which focuses on the acquisition, leasing, management, development and redevelopment of regional malls throughout the United States.  The Company is the sole general partner and owns an 84% ownership interest in The Macerich Partnership, L.P.  Macerich now owns approximately 79 million square feet of gross leaseable area consisting primarily of interests in 73 regional malls.  Additional information about The Macerich Company can be obtained from the Company’s web site at www.macerich.com.

Investor Conference Call

The Company will provide an online Web simulcast and rebroadcast of its quarterly earnings conference call.  The call will be available on The Macerich Company’s website at www.macerich.com and through CCBN at www.earnings.com.  The call begins today, November 3, 2006 at 10:30 AM Pacific Time. To listen to the call, please go to either of these web sites at least 15 minutes prior to the call in order to register and download audio software if needed. An online replay at www.macerich.com will be available for one year after the call.

The Company will publish a supplemental financial information package which will be available at www.macerich.com in the Investing Section.  It will also be furnished to the SEC as part of a Current Report on Form 8-K.

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Note:  This release contains statements that constitute forward-looking statements. Stockholders are cautioned that any such forward-looking statements are not guarantees of future performance and involve risks, uncertainties and other factors that may cause actual results, performance or achievements of the Company to vary materially from those anticipated, expected or projected.  Such factors include, among others, general industry, economic and business conditions, which will, among other things, affect demand for retail space or retail goods, availability and creditworthiness of current and prospective tenants, anchor or tenant bankruptcies, closures, mergers or consolidations, lease rates and terms, interest rate fluctuations, availability and cost of financing and operating expenses; adverse changes in the real estate markets including, among other things, competition from other companies, retail formats and technology, risks of real estate development and redevelopment, acquisitions and dispositions; governmental actions and initiatives (including legislative and regulatory changes); environmental and safety requirements; and terrorist activities which could adversely affect all of the above factors.  The reader is directed to the Company’s various filings with the Securities and Exchange Commission, including the Annual Report on Form 10-K for the year ended December 31, 2005, for a discussion of such risks and uncertainties, which discussion is incorporated herein by reference.

(See attached tables)

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THE MACERICH COMPANY

FINANCIAL HIGHLIGHTS

(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)

				Results before SFAS 144 (e)				Impact of SFAS 144 (e)				Results after SFAS 144 (e)
				For the Three Months				For the Three Months				For the Three Months
				Ended September 30,				Ended September 30,				Ended September 30,
				Unaudited								Unaudited
Results of Operations:				2006		2005		2006		2005		2006		2005
Minimum rents				$    123,314		$    124,738		$          (895	)	$       (4,737	)	$    122,419		$    120,001
Percentage rents				4,880		5,291		(14	)	13		4,866		5,304
Tenant recoveries				67,541		65,645		(186	)	(1,585	)	67,355		64,060
Management Companies’ revenues				8,023		6,921		—		—		8,023		6,921
Other income				9,469		5,505		(26	)	(201	)	9,443		5,304
Total revenues				213,227		208,100		(1,121	)	(6,510	)	212,106		201,590
Shopping center and operating expenses				71,553		70,824		(595	)	(2,553	)	70,958		68,271
Management Companies’ operating expenses				14,455		12,914		—		—		14,455		12,914
Income tax expense (benefit)				535		(1,166	)	—		—		535		(1,166	)
Depreciation and amortization				56,120		57,941		(277	)	(1,730	)	55,843		56,211
General, administrative and other expenses				2,551		3,420		—		—		2,551		3,420
Interest expense				70,272		71,354		(117	)	(1,294	)	70,155		70,060
Loss on early extinguishment of debt				29		—		—		—		29		—
Gain (loss) on sale or writedown of assets				46,560		10		(46,022	)	—		538		10
Pro rata income (loss) of unconsolidated entities (c)				18,490		18,831		—		—		18,490		18,831
Minority interests in consolidated joint ventures				(694	)	90		(176	)	(168	)	(870	)	(78	)
Income (loss) from continuing operations				62,068		11,744		(46,330	)	(1,101	)	15,738		10,643
Discontinued Operations:
Gain (loss) on sale of asset				—		—		46,214		—		46,214		—
Income from discontinued operations				—		—		116		1,101		116		1,101
Income before minority interests of OP				62,068		11,744						62,068		11,744
Income allocated to minority interests of OP				8,901		1,406		—		—		8,901		1,406
Net income before preferred dividends				53,167		10,338		—		—		53,167		10,338
Preferred dividends and distributions (a)				6,199		6,274		—		—		6,199		6,274
Net income to common stockholders				$      46,968		$        4,064		$               0		$               0		$      46,968		$        4,064
Average number of shares outstanding - basic				71,479		59,247						71,479		59,247
Average shares outstanding, assuming full conversion of OP Units (d)				85,021		73,660						85,021		73,660
Average shares outstanding - diluted for FFO (d)				88,648		77,633						88,648		77,633
Per share income- diluted before discontinued operations				—		—						$          0.12		$          0.06
Net income per share-basic				$          0.66		$          0.07						$          0.66		$          0.07
Net income per share- diluted (a)				$          0.66		$          0.07						$          0.66		$          0.07
Dividend declared per share				$          0.68		$          0.65						$          0.68		$          0.65
Funds from operations “FFO” (b) (d)- basic				$      84,020		$      78,264						$      84,020		$      78,264
Funds from operations “FFO” (a) (b) (d) - diluted				$      86,595		$      81,090						$      86,595		$      81,090
FFO per share- basic (b) (d)				$          0.99		$          1.07						$          0.99		$          1.07
FFO per share- diluted (a) (b) (d)				$          0.98		$          1.04						$          0.98		$          1.04

 

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				Results before SFAS 144 (e)				Impact of SFAS 144 (e)				Results after SFAS 144 (e)
				For the Nine Months				For the Nine Months				For the Nine Months
				Ended September 30,				Ended September 30,				Ended September 30,
				Unaudited								Unaudited
Results of Operations:				2006		2005		2006		2005		2006		2005
Minimum rents				$     384,383		$     335,391		$     (10,314	)	$     (14,376	)	$     374,069		$     321,015
Percentage rents				10,601		11,164		(248	)	(431	)	10,353		10,733
Tenant recoveries				200,879		169,811		(3,954	)	(5,179	)	196,925		164,632
Management Companies’ revenues				22,650		18,362		—		—		22,650		18,362
Other income				22,756		16,684		(349	)	(517	)	22,407		16,167
Total revenues				641,269		551,412		(14,865	)	(20,503	)	626,404		530,909
Shopping center and operating expenses				209,831		179,169		(6,125	)	(7,964	)	203,706		171,205
Management Companies’ operating expenses				41,295		37,291		—		—		41,295		37,291
Income tax expense (benefit)				219		(2,205	)	—		—		219		(2,205	)
Depreciation and amortization				179,071		149,767		(3,097	)	(4,851	)	175,974		144,916
General, administrative and other expenses				9,540		9,937		—		—		9,540		9,937
Interest expense				213,426		175,636		(2,253	)	(3,501	)	211,173		172,135
Loss on early extinguishment of debt				1,811		—		—		—		1,811		—
Gain (loss) on sale or writedown of assets				109,020		1,474		(108,983	)	(297	)	37		1,177
Pro rata income (loss) of unconsolidated entities (c)				57,367		46,416		—		—		57,367		46,416
Minority interests in consolidated joint ventures				(39,101	)	(471	)	37,229		(173	)	(1,872	)	(644	)
Income (loss) from continuing operations				113,362		49,236		(75,144	)	(4,657	)	38,218		44,579
Discontinued Operations:
Gain (loss) on sale of asset				—		—		72,167		297		72,167		297
Income from discontinued operations				—		—		2,977		4,360		2,977		4,360
Income before minority interests of OP				113,362		49,236		—		—		113,362		49,236
Income allocated to minority interests of OP				15,131		7,085		—		—		15,131		7,085
Net income before preferred dividends				98,231		42,151		—		—		98,231		42,151
Preferred dividends and distributions (a)				18,139		13,197		—		—		18,139		13,197
Net income to common stockholders				$       80,092		$       28,954		$                0		$                0		$       80,092		$       28,954
Average number of shares outstanding - basic				70,587		59,073						70,587		59,073
Average shares outstanding, assuming full conversion of OP Units (d)				84,216		73,522						84,216		73,522
Average shares outstanding - diluted for FFO (d)				87,843		77,349						87,843		77,349
Per share income- diluted before discontinued operations				—		—						$           0.24		$           0.43
Net income per share-basic				$           1.13		$           0.49						$           1.13		$           0.49
Net income per share- diluted (a)				$           1.13		$           0.49						$           1.13		$           0.49
Dividend declared per share				$           2.04		$           1.95						$           2.04		$           1.95
Funds from operations “FFO” (b) (d)- basic				$     254,523		$     226,569						$     254,523		$     226,569
Funds from operations “FFO” (a) (b) (d) - diluted				$     262,031		$     234,110						$     262,031		$     234,110
FFO per share- basic (b) (d)				$           3.03		$           3.10						$           3.03		$           3.10
FFO per share- diluted (a) (b) (d)				$           2.98		$           3.03						$           2.98		$           3.03

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(a) On February 25, 1998, the Company sold $100,000 of convertible preferred stock representing 3.627 million shares. The convertible preferred shares can be converted on a 1 for 1 basis for common stock. These preferred shares are not assumed converted for purposes of net income per share-diluted for 2006 and 2005 as they would be antidilutive to those calculations. The weighted average preferred shares outstanding are assumed converted for purposes of FFO per diluted share as they are dilutive to that calculation for all periods presented.

(b) 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 and after adjustments for unconsolidated partnerships and joint ventures. Adjustments for unconsolidated partnerships and joint ventures are calculated to reflect FFO on the same basis. FFO and FFO on a fully 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. FFO on a fully diluted basis is one of the measures investors find most useful in measuring the dilutive impact of outstanding convertible securities. FFO does not represent cash flow from operations as defined by GAAP, should not be considered as an alternative to net income as defined by GAAP and is not indicative of cash available to fund all cash flow needs. FFO as presented may not be comparable to similarly titled measures reported by other real estate investment trusts.

Effective January 1, 2003, gains or losses on sale of undepreciated assets and the impact of SFAS 141 have been included in FFO. The inclusion of gains on sales of of undepreciated assets increased FFO for the three and nine months ended September 30, 2006 and 2005 by $2.3 million, $6.0 million, $1.3 million and $3.2 million, respectively, or by $.03 per share, $.07 per share, $.02 per share and $.04 per share, respectively. Additionally, SFAS 141 increased FFO for the three and nine months ended September 30, 2006 and 2005 by $4.0 million, $12.9 million, $4.8 million and $10.9 million, respectively or by $.04 per share, $.15 per share, $.06 per share and $.14 per share, respectively.

(c) This includes, using the equity method of accounting, the Company’s prorata share of the equity in income or loss of its unconsolidated joint ventures for all periods presented.

(d) The Macerich Partnership, LP (the “Operating Partnership” or the “OP”) has operating partnership units (“OP units”). Each OP unit can be converted into a share of Company stock. Conversion of the OP units not owned by the Company has been assumed for purposes of calculating the FFO per share and the weighted average number of shares outstanding. The computation of average shares for FFO - diluted includes the effect of outstanding stock options and restricted stock using the treasury method. Also assumes conversion of MACWH, LP units to the extent they are dilutive to the calculation. For the three and nine months ended September 30, 2006 and 2005, the MACWH, LP units were antidilutive to FFO.

(e) In October 2001, the FASB issued SFAS No. 144, “Accounting for the Impairment or Disposal of Long-Lived Assets” (“SFAS 144”). SFAS 144 addresses financial accounting and reporting for the impairment or disposal of long-lived assets. The Company adopted SFAS 144 on January 1, 2002.

On January 5, 2005, the Company sold Arizona Lifestyle Galleries. The sale of this property resulted in a gain on sale of $0.3 million.

On June 9, 2006, Scottsdale 101 in Arizona was sold. The sale of this property resulted in a gain on sale, at the Company’s prorata share, of $25.8 million. Additionally, the Company reclassified the results of operations for the three and nine months ended September 30, 2006 and 2005 to discontinued operations.

On July 13, 2006, Parklane Mall in Nevada was sold. The sale of this property resulted in a gain on sale of $5.9 million. The Company reclassified the results of operations for the three and nine months ended September 30, 2006 and 2005 to discontinued operations.

On July 27, 2006, Greeley Mall in Colorado and Holiday Village in Montana were sold. The sale of these properties resulted in gains on sale of $21.3 million and $7.3 million, respectively. The Company reclassified the results of operations for the three and nine months ended September 30, 2006 and 2005 to discontinued operations.

On August 11, 2006, Great Falls Marketplace in Montana was sold. The sale of this property resulted in a gain on sale of $11.9 million. The Company reclassified the results of operations for the three and nine months ended September 30, 2006 and 2005 to discontinued operations.

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				September 30,		Dec 31
Summarized Balance Sheet Information				2006		2005
				(UNAUDITED)
Cash and cash equivalents				$        62,047		$      155,113
Investment in real estate, net (h)				$   5,675,959		$   5,438,496
Investments in unconsolidated entities (i)				$   1,001,051		$   1,075,621
Total Assets				$   7,280,523		$   7,178,944
Mortgage and notes payable				$   4,852,636		$   5,424,730
Pro rata share of debt on unconsolidated entities				$   1,644,727		$   1,438,960
Total common shares outstanding at quarter end:				71,482		59,942
Total preferred shares outstanding at quarter end:				3,627		3,627
Total partnership/preferred units outstanding at quarter end:				16,387		16,647

 

				September 30,		September 30,
Additional financial data as of :				2006		2005
Occupancy of centers (f)				93.00	%	93.40	%
Comparable quarter change in same center sales (f) (g)				5.30	%	7.00	%

 

Additional financial data for the nine months ended:
Acquisitions of property and equipment - including joint ventures at prorata				$      359,213		$   2,476,820
Redevelopment and expansions of centers- including joint ventures at prorata				$      141,039		$      114,648
Renovations of centers- including joint ventures at prorata				$        44,546		$        44,916
Tenant allowances- including joint ventures at prorata				$        28,794		$        22,074
Deferred leasing costs- including joint ventures at prorata				$        20,473		$        19,939

 

(f)	excludes redevelopment properties.
(g)	includes mall and freestanding stores.
(h)	includes construction in process on wholly owned assets of $295,852 at September 30, 2006 and $162,157 at December 31, 2005.
(i)	the Company’s prorata share of construction in process on unconsolidated entities of $148,800 at September 30, 2006 and $98,180 at December 31, 2005.

 

 

		For the Three Months				For the Nine Months
PRORATA SHARE OF JOINT VENTURES		Ended September 30,				Ended September 30,
		(UNAUDITED)				(UNAUDITED)
(Unaudited)		(All amounts in thousands)				(All amounts in thousands)
		2006		2005		2006		2005
Revenues:
Minimum rents		$          59,760		$          54,310		$        177,230		$        150,130
Percentage rents		2,784		2,391		7,306		5,942
Tenant recoveries		28,674		23,909		82,680		65,846
Other		3,931		2,910		10,607		8,665
Total revenues		95,149		83,520		277,823		230,583
Expenses:
Shopping center expenses		32,425		28,818		92,869		77,067
Interest expense		23,507		16,823		66,260		54,128
Depreciation and amortization		21,045		20,495		62,209		55,243
Total operating expenses		76,977		66,136		221,338		186,438
Gain on sale or writedown of assets		1		1,321		245		1,861
Equity in income of joint ventures		317		126		637		410
Net income		$          18,490		$          18,831		$          57,367		$          46,416

 

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RECONCILIATION OF NET INCOME TO FFO(b)(e)

				For the Three Months				For the Nine Months
				Ended September 30,				Ended September 30,
				(UNAUDITED)				(UNAUDITED)
				(All amounts in thousands)				(All amounts in thousands)
				2006		2005		2006		2005
Net income - available to common stockholders				$       46,968		$         4,064		$       80,092		$       28,954
Adjustments to reconcile net income to FFO- basic
Minority interest in OP				8,901		1,406		15,131		7,085
(Gain) loss on sale of consolidated assets				(46,560	)	(10	)	(109,020	)	(1,474	)
plus gain on undepreciated asset sales- consolidated assets				2,339		—		5,715		1,307
plus minority interest share of gain on sale of consolidated joint ventures				(192	)	—		36,816		—
(Gain) loss on sale of assets from unconsolidated entities (pro rata share)				(1	)	(1,321	)	(245	)	(1,861	)
plus gain on undepreciated asset sales- unconsolidated assets				—		1,323		244		1,867
Depreciation and amortization on consolidated assets				56,120		57,941		179,071		149,767
Less depreciation and amortization allocable to minority interests on consolidated joint ventures				(1,128	)	(1,787	)	(4,351	)	(3,612	)
Depreciation and amortization on joint ventures (pro rata)				21,045		20,495		62,209		55,243
Less: depreciation on personal property and amortization of loan costs and interest rate caps				(3,472	)	(3,847	)	(11,139	)	(10,707	)
Total FFO - basic				84,020		78,264		254,523		226,569
Additional adjustment to arrive at FFO - diluted
Preferred stock dividends earned				2,575		2,503		7,508		7,218
Non-participating preferred units - dividends						323				323
Participating preferred units - dividends				n/a - antidilutive				n/a - antidilutive
FFO - diluted				86,595		81,090		262,031		234,110

 

		For the Three Months				For the Nine Months
		Ended September 30,				Ended September 30,
		(UNAUDITED)				(UNAUDITED)
		(All amounts in thousands)				(All amounts in thousands)
		2006		2005		2006		2005
Reconciliation of EPS to FFO per diluted share:
Earnings per share		$         0.66		$         0.07		$         1.13		$         0.49
Per share impact of depreciation and amortization real estate		$         0.86		$         0.99		$         2.69		$         2.60
Per share impact of gain on sale of depreciated assets		$        (0.52	)	$         0.00		$        (0.79	)	$         0.00
Per share impact of preferred stock not dilutive to EPS		$        (0.02	)	$        (0.02	)	$        (0.05	)	$        (0.06	)
Fully Diluted FFO per share		$         0.98		$         1.04		$         2.98		$         3.03

 

THE MACERICH COMPANY
RECONCILIATION OF NET INCOME TO EBITDA

		For the Three Months				For the Nine Months
		Ended September 30,				Ended September 30,
		(UNAUDITED)				(UNAUDITED)
		(All amounts in thousands)				(All amounts in thousands)
		2006		2005		2006		2005
Net income - available to common stockholders		$     46,968		$       4,064		$     80,092		$     28,954
Interest expense		70,272		71,354		213,426		175,636
Interest expense - unconsolidated entities (pro rata)		23,507		16,823		66,260		54,128
Depreciation and amortization - consolidated assets		56,120		57,941		179,071		149,767
Depreciation and amortization - unconsolidated entities (pro rata)		21,045		20,495		62,209		55,243
Minority interest		8,901		1,406		15,131		7,085
Less: Interest expense and depreciation and amortization allocable to minority interests on consolidated joint ventures		(1,264	)	(2,559	)	(6,191	)	(5,163	)
Loss on early extinguishment of debt		29		—		1,811		—
Loss on early extinguishment of debt- unconsolidated entities (pro rata)		—		7		—		7
Loss (gain) on sale of - consolidated assets		(46,560	)	(10	)	(109,020	)	(1,474	)
Loss (gain) on sale of assets - unconsolidated entities (pro rata)		(1	)	(1,321	)	(245	)	(1,861	)
Add: Minority interest share of gain on sale of consolidated joint ventures		(192	)	—		36,816		—
Income tax expense (benefit)		535		(1,166	)	219		(2,205	)
Preferred dividends		6,199		6,274		18,139		13,197
EBITDA (j)		$   185,559		$   173,308		$   557,718		$   473,314

 

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THE MACERICH COMPANY

RECONCILIATION OF EBITDA TO SAME CENTERS -

NET OPERATING INCOME (“NOI”)

		For the Three Months				For the Nine Months
		Ended September 30,				Ended September 30,
		(UNAUDITED)				(UNAUDITED)
		(All amounts in thousands)				(All amounts in thousands)
		2006		2005		2006		2005
EBITDA (j)		$   185,559		$   173,308		$   557,718		$   473,314
Add: REIT general and administrative expenses		2,551		3,420		9,540		9,937
Management Companies’ revenues (c)		(8,023	)	(6,921	)	(22,650	)	(18,362	)
Management Companies’ operating expenses (c)		14,455		12,914		41,295		37,291
EBITDA of non-comparable centers		(13,017	)	(5,898	)	(120,501	)	(55,679	)
SAME CENTERS - Net operating income (“NOI”) (k)		$   181,525		$   176,823		$   465,402		$   446,501

 

(j) EBITDA represents earnings before interest, income taxes, depreciation, amortization, minority interest, extraordinary items, gain (loss) on sale 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.

(k) The Company presents same-center NOI because the Company believes it is useful for investors to evaluate the operating performance of comparable centers. Same-center NOI is calculated using total EBITDA and subtracting out EBITDA from non-comparable centers and eliminating the management companies and the Company’s general and administrative expenses.

 

Exhibit 99.2

 

 

 

Supplemental Financial and Operating Information (unaudited)

 

For the three and nine months ended September 30, 2006

 

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The Macerich Company

Supplemental Financial and Operating Information

Table of Contents
For the three and nine months ended September 30, 2006

All information included in this supplemental financial package is unaudited, unless otherwise indicated.

				Page No.
		Corporate overview
		Overview		1
		Capital information and market capitalization		2
		Changes in total common and equivalent shares		3
		Financial data
		Supplemental FFO information		4
		Capital expenditures		5
		Operational data
		Sales per square foot		6
		Occupancy		7
		Rent table		8
		Cost of occupancy		9
		Balance sheet information
		Debt summary		10
		Outstanding debt by maturity		11

 

This supplemental financial information should be read in connection with the Company’s third quarter 2006 earnings announcement (included as Exhibit 99.1 of the Company’s Current Report on 8-K, event date November 3, 2006) as certain disclosures, definitions and reconciliations in such announcement have not been included in the supplemental financial information.