Real Estate Central

SANTA MONICA, Calif., May 8 /PRNewswire-FirstCall/ — The Macerich
Company (NYSE: MAC) today announced results of operations for the quarter
ended March 31, 2008, which included total funds from operations (”FFO”)
diluted of $96.0 million or $1.09 per share-diluted compared to $85.1
million or $.96 per share-diluted for the quarter ended March 31, 2007. Net
income available to common stockholders for the quarter ended March 31,
2008 was $95.6 million or $1.30 per share-diluted compared to $3.5 million
or $.05 per share-diluted for the quarter ended March 31, 2007. 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 336,000 square feet of specialty
store leases at average initial rents of $44.71 per square foot.
Starting base rent on new lease signings was 24.3% higher than the
expiring base rent.
— Mall tenant sales per square foot for the trailing twelve month period
increased 3.0% to $468 in the first quarter of 2008 compared to $454
for the first quarter of 2007.
— Portfolio occupancy at March 31, 2008 was 92.7% compared to 92.8% at
March 31, 2007.
— FFO per share-diluted increased 13% to $1.09 for the quarter ended
March 31, 2008 compared to $.96 for the quarter ended March 31, 2007.
— Construction began on the

65 million redevelopment of Santa Monica
Place.

Commenting on the quarter, Arthur Coppola president and chief executive
officer of Macerich stated “It is encouraging that in light of the global
economic downturn, for us it was another quarter of strong fundamentals
including, high occupancy, wide releasing spreads and solid same center net
operating income growth. The quarter was also highlighted by significant
progress on our three major redevelopments: The Oaks, Santa Monica Place
and Scottsdale Fashion Square.”

Redevelopment and Development Activity

The expansion of The Oaks, a 1.1 million square-foot super regional
mall in Thousand Oaks, California, continues on schedule toward a
multi-phased opening beginning with a 138,000-square-foot Nordstrom
Department Store slated to open in fall 2008. Construction on the
two-level, open-air retail, dining and entertainment venue, and a complete
interior renovation continues. New additions to the center’s interior
retail lineup include the first-to-markets Bare Escentuals, Fruits and
Passions, kate spade, Marciano and Teavana.

On April 17, Macerich marked the construction start of an expansive
redevelopment of Santa Monica Place. Plans for the property are expected to
transform the center into an open-air shopping and dining destination. The
center closed for redevelopment on January 31 and is projected to re-open
in fall 2009.

Construction of the underground parking structure for the first phase
of a new luxury wing at Scottsdale Fashion Square began in early 2008.
Anchored by a first-to-market 60,000-square-foot Barneys New York, the
expansion will introduce up to 110,000 square feet of luxury shops and
restaurants and is expected to begin opening in fall 2009. New tenants that
opened this quarter include Bottega Veneta, Jimmy Choo and Marciano.

Construction on the Market at Estrella Falls, the power center phase of
a 330-acre mixed-use development is underway. The 500,000-square-foot power
center will begin opening in phases in fall 2008. Old Navy joins previously
announced large-format retailers Bashas’, Staples, Shoe Pavilion, Razmataz
and Petco. The project’s future phases include a department-store anchored
super regional shopping center and additional parcels for commercial and
potential mixed-use opportunities.

Acquisitions and Dispositions

Effective January 1, 2008, the former owner of the Wilmorite portfolio
exercised its right to exchange 3.4 million preferred units (redeemable
into 2.9 million common units) in exchange for the Company’s interest in
Eastview Mall, Greece Ridge Center, Pittsford Plaza and Marketplace Mall
(together known as the “Rochester Assets”). The Rochester Assets were
transferred with pro rata mortgage debt of approximately

18 million. The
total square footage of the Rochester Assets is 4.7 million square feet of
GLA and the average sales per square foot were $360. A non cash gain on
redemption of $99 million was recorded in the first quarter as a result of
the disposition of these non-core assets.

On January 10, 2008, Macerich and its partner, the Alaska Permanent
Fund Corporation (APFC), announced the acquisition of The Shops at North
Bridge. The Shops at North Bridge is a 680,933-square-foot mixed-use retail
development anchoring the south end of Chicago’s primary retail district
known as “The Magnificent Mile.” The Shops at North Bridge is home to one
of the top five performing Nordstrom Department Stores in the country.
Located on Chicago’s famed Michigan Avenue, the center has a 94.9%
occupancy level and annual shop tenant sales of $839 per square foot.

Macerich and APFC acquired the property for $515 million. Macerich and
APFC assumed the

05 million existing loan at an interest rate of 4.67%
maturing in July 2009. This is the second joint venture for the two
entities: Macerich and APFC co-own another of the country’s top-performing
regional shopping centers, Tysons Corner Center.

Financing Activity

In March, the Company placed a $101 million construction loan on Cactus
Power Center. The three year construction loan has an initial interest rate
of 3.95%.

On May 6, 2008, a new $100 million floating rate loan was placed on The
Mall at Victor Valley. The initial interest rate is 4.33%.

On May 14, 2008, an $82 million construction loan is expected to close
on the Market at Estrella Falls. The loan is a three year loan, extendable
to five years and has an initial interest rate of approximately 4.30%.

The Company has received a $150 million loan commitment for the
currently unencumbered SanTan Village regional mall. The five year loan is
expected to fund in June.

The Company has also reached agreement on a $170 million seven year,
6.76% fixed rate loan on Fresno Fashion Fair. The new loan will pay off a
$63 million maturing loan. The loan is expected to close in July.

2008 Earnings Guidance

Management is reaffirming its guidance for 2008 full year FFO per share
in the range of $5.00 to $5.15.

This guidance is based on management’s current view of the current
market conditions in the regional mall business. Due to the uncertainty in
the timing and economics of acquisitions and dispositions, the guidance
range does not include any potential property acquisitions or dispositions.
The Company is not able to assess at this time the potential impact of such
exclusions on future FFO. FFO does not include gains or losses on sales of
depreciated operating assets.

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 85%
ownership interest in The Macerich Partnership, L.P. Macerich now owns
approximately 77 million square feet of gross leaseable area consisting
primarily of interests in 72 regional malls. Additional information about
Macerich can be obtained from the Company’s Web site at
http://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 http://www.macerich.com (Investing section)
and through CCBN at http://www.earnings.com. The call begins today, May 8,
2008 at 10:30 AM Pacific Time. To listen to the call, please go to any 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
http://www.macerich.com (Investing section) will be available for one year
after the call.

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, 2007, for a discussion of such
risks and uncertainties, which discussion is incorporated herein by
reference. The Company does not intend, and undertakes no obligation, to
update any forward- looking information to reflect events or circumstances
after the date of this release or to reflect the occurrence of
unanticipated events.



(See attached tables)



THE MACERICH COMPANY
FINANCIAL HIGHLIGHTS
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)

Results of Operations:
Results before Impact of Results after
SFAS 144 (e) SFAS 144 (e) SFAS 144 (e)
For the For the For the
Three Months Three Months Three Months
Ended March 31, Ended March 31, Ended March 31,
Unaudited Unaudited
2008 2007 2008 2007 2008 2007
Minimum rents $132,087 $123,995 ($6,256) ($11,035) $125,831 $112,960
Percentage
rents 2,704 3,784 - (120) 2,704 3,664
Tenant
recoveries 67,831 67,783 (1,442) (6,918) 66,389 60,865
Management
Companies’
revenues 9,691 8,754 - - 9,691 8,754
Other income 6,613 7,592 (284) (1,037) 6,329 6,555
Total revenues

18,926

11,908 ($7,982) ($19,110)

10,944 $192,798

Shopping center
and operating
expenses 70,953 68,680 (2,036) (6,664) 68,917 62,016
Management
Companies’
operating
expenses 18,343 17,755 - - 18,343 17,755
Income tax
expense (benefit) 301 (120) - - 301 (120)
Depreciation and
amortization 61,128 55,974 (421) (4,595) 60,707 51,379
REIT general and
administrative
expenses 4,403 5,373 - - 4,403 5,373
Interest expense 70,827 67,555 - (3,535) 70,827 64,020
Loss on early
extinguishment
of debt - 878 - - - 878
Gain on sale or
disposition of
assets 99,937 1,463 (99,263) 289 674 1,752
Equity in
income of
unconsolidated
joint
ventures (c) 22,298 14,483 - - 22,298 14,483
Minority
interests in
consolidated
joint ventures (526) (5,038) - 3,820 (526) (1,218)

Income (loss)
from continuing
operations 114,680 6,721 (104,788) (207) 9,892 6,514

Discontinued Operations:
Gain (loss)
on sale or
disposition
of assets - - 99,263 (289) 99,263 (289)
Income from
discontinued
operations - - 5,525 496 5,525 496
Income before
minority interests
of OP 114,680 6,721 - - 114,680 6,721
Income allocated
to minority
interests of OP 16,598 638 - - 16,598 638
Net income before
preferred
dividends 98,082 6,083 - - 98,082 6,083
Preferred
dividends (a) 2,454 2,575 - - 2,454 2,575
Net income
to common
stockholders $95,628 $3,508 $0 $0 $95,628 $3,508

Average number
of shares
outstanding -
basic 72,342 71,669 72,342 71,669
Average shares
outstanding,
assuming full
conversion of
OP Units
(d) (e) 88,290 85,034 88,290 85,034
Average shares
outstanding -
diluted for FFO
(a) (d) (e) 88,290 88,661 88,290 88,661

Per share
income - diluted
before
discontinued
operations - - $0.11 $0.05
Net income
per share
- basic $1.32 $0.05 $1.32 $0.05
Net income per
share - diluted
(a) (e) $1.30 $0.05 $1.30 $0.05
Dividend
declared per
share $0.80 $0.71 $0.80 $0.71
Funds from
operations
“FFO” (b)
(d) - basic $93,554 $82,493 $93,554 $82,493
Funds from
operations
“FFO” (a) (b)
(d) (e) -
diluted $96,008 $85,068 $96,008 $85,068
FFO per
share - basic
(b) (d) $1.10 $0.97 $1.10 $0.97
FFO per
share - diluted
(a) (b) (d) (e) $1.09 $0.96 $1.09 $0.96



THE MACERICH COMPANY
FINANCIAL HIGHLIGHTS
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)


(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 assumed converted for purposes of
net income per share - diluted for 2008 and they are not assumed
converted for 2007 as they would be antidilutive to the calculation.
The weighted average preferred shares outstanding are assumed
converted for purposes of FFO per share - diluted as they are
dilutive to those calculations for all periods presented. On October
18, 2007, 560,000 shares of convertible preferred stock were
converted to common shares.

On March 16, 2007, the Company issued $950 million of convertible
senior notes. These notes are not dilutive for purposes of net income
per share - diluted or FFO - diluted for 2008 and 2007.

(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 sales of undepreciated
assets and the impact of SFAS 141 have been included in FFO. The
inclusion of gains on sales of undepreciated assets increased FFO for
the three months ended March 31, 2008 and 2007 by $1.6 million and
$0.9 million, respectively, or by $.02 per share and $.01 per share,
respectively.

Additionally, SFAS 141 increased FFO for the three months ended March
31, 2008 and 2007 by $4.6 million and $4.0 million, respectively, or
by $.05 per share and $0.045 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 share and unit-based compensation plans and
convertible senior notes using the treasury stock method. It also
assumes conversion of MACWH, LP preferred and common units to the
extent they are dilutive to the calculation. For the three months
ended March 31, 2008 and 2007, the MACWH, LP preferred 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 December 17, 2007, the Company, as part of a sale/leaseback
transaction involving Mervyn’s sites, identified certain locations
available for sale. The Company has classified the results of
operations from these sites to discontinued operations.

On April 25, 2005, in connection with the acquisition of Wilmorite
Holdings, L.P. and its affiliates, the Company issued as part of the
consideration participating and non-participating convertible
preferred units in MACWH, LP. The participating units are not assumed
converted for purposes of net income per share and FFO - diluted per
share for all periods presented as they would be antidilutive to the
calculation. On January 1, 2008, a subsidiary of the Company, at the
election of the holders, redeemed approximately 3.4 million
participating convertible preferred units in exchange for the
distribution of the interests in the entity which held that portion of
the Wilmorite portfolio that consisted of Eastview Mall, Greece Ridge
Center, Marketplace Mall and Pittsford Plaza (”Rochester Properties”).
This exchange is referred to as the “Rochester Redemption.”
As a result of the Rochester Redemption , the Company has classified
the results of operations from the Rochester Properties to
discontinued operations and recorded a gain of $99.3 million for the
period ended March 31, 2008.



THE MACERICH COMPANY
FINANCIAL HIGHLIGHTS
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)

Pro rata share of joint ventures:
For the Three Months
Ended March 31,
Unaudited
2008 2007
Revenues:
Minimum rents $66,310 $61,890
Percentage rents 2,262 2,287
Tenant recoveries 32,596 29,189
Other 4,158 2,663
Total revenues $105,326 $96,029

Expenses:
Shopping center expenses 35,925 30,588
Interest expense 26,259 24,317
Depreciation and amortization 22,279 24,388
Total operating expenses 84,463 79,293
Gain (loss) on sale of assets 1,319 (2,382)
Equity in income of joint ventures 116 129
Net income

2,298 $14,483



Reconciliation of Net Income to FFO (b):

For the Three Months
Ended March 31,
Unaudited
2008 2007
Net income - available to common stockholders $95,628 $3,508

Adjustments to reconcile net income to FFO - basic
Minority interest in OP 16,598 638
Gain on sale or disposition of consolidated
assets (99,937) (1,463)
plus gain on undepreciated asset
sales- consolidated assets 333 881
plus minority interest share of gain on
sale of consolidated joint ventures 341 837
(Gain) loss on sale of assets from
unconsolidated entities (pro rata share) (1,319) 2,382
plus gain on undepreciated asset sales-
unconsolidated entities (pro rata share) 1,319 -
Depreciation and amortization on
consolidated assets (f) 61,128 55,974
Less depreciation and amortization
allocable to minority interests
on consolidated joint ventures (573) (994)
Depreciation and amortization on joint
ventures (pro rata) (f) 22,279 24,388
Less: depreciation on personal property and
amortization of loan costs (f) (2,243) (3,658)

Total FFO - basic 93,554 82,493

Additional adjustment to arrive at FFO - diluted
Preferred stock dividends earned 2,454 2,575
Total FFO - diluted $96,008 $85,068

(f) In 2008, amortization of loan costs is included in interest expense.



Reconciliation of EPS to FFO per diluted share:

For the Three Months
Ended March 31,
Unaudited
2008 2007
Earnings per share - diluted $1.30 $0.05
Per share impact of depreciation and
amortization of real estate 0.95 0.90
Per share impact of (gain) loss on sale or
disposition of depreciated assets (1.17) 0.03
Per share impact of preferred stock not
dilutive to EPS 0.01 (0.02)
Fully diluted FFO per share $1.09 $0.96



THE MACERICH COMPANY
FINANCIAL HIGHLIGHTS
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)

For the Three Months
Reconciliation of Net Income to EBITDA: Ended March 31,
Unaudited
2008 2007

Net income - available to common stockholders $95,628 $3,508

Interest expense 70,827 67,555
Interest expense - unconsolidated
entities (pro rata) 26,259 24,317
Depreciation and amortization - consolidated
assets 61,128 55,974
Depreciation and amortization - unconsolidated
entities (pro rata) 22,279 24,388
Minority interest 16,598 638
Less: Interest expense and depreciation and
amortization allocable to minority interests
on consolidated joint ventures (759) (1,435)
Loss on early extinguishment of debt - 878
Gain on sale or disposition of assets -
consolidated assets (99,937) (1,463)
(Gain) loss on sale of assets -
unconsolidated entities (pro rata) (1,319) 2,382
Add: Minority interest share of gain on sale
of consolidated joint ventures 341 837
Income tax expense (benefit) 301 (120)
Distributions on preferred units 276 3,547
Preferred dividends 2,454 2,575

EBITDA (g) $194,076 $183,581



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

For the Three Months
Ended March 31,
Unaudited
2008 2007
EBITDA (g) $194,076 $183,581

Add: REIT general and administrative expenses 4,403 5,373
Management Companies’ revenues (9,691) (8,754)
Management Companies’ operating expenses 18,343 17,755
Lease termination income of comparable centers (2,523) (3,354)
EBITDA of non-comparable centers (28,151) (23,211)

Same Centers - net operating income (”NOI”) (h) $176,457 $171,390

(g) 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.

(h) 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.


See Also

• Rodobens 1Q08 Earnings Release
• Newest Hospital Opens in Costa Rica to the Joy of Expats in the Southern Pacific
• Ideal Living Magazine Survey Reveals What Baby Boomers Want in Retirement

Source: Real Estate Newswire