Macerich(US:MAC)2025-05-12 19:58Part I: Financial Information Financial Statements (Unaudited) Q1 2025 saw a reduced net loss and improved cash flow, driven by revenue growth and lower equity losses from joint ventures Consolidated Financial Highlights (Q1 2025 vs. Q1 2024) | Financial Metric | Q1 2025 (in millions) | Q1 2024 (in millions) | Change | | :--- | :--- | :--- | :--- | | Total Revenues | $249.2 | $208.8 | +19.4% | | Net Loss | $(51.2) | $(131.4) | +61.1% | | Net Loss Attributable to the Company | $(50.1) | $(126.7) | +60.4% | | Diluted Loss Per Share | $(0.20) | $(0.59) | +66.1% | | Net Cash from Operating Activities | $88.5 | $61.1 | +44.8% | Consolidated Balance Sheet Summary | Balance Sheet Item | March 31, 2025 | December 31, 2024 | Change | | :--- | :--- | :--- | :--- | | Total Assets | $8.68 billion | $8.57 billion | +1.3% | | Cash and cash equivalents | $253.2 million | $89.9 million | +181.8% | | Mortgage notes payable | $5.23 billion | $4.89 billion | +6.9% | | Total Liabilities | $5.94 billion | $5.72 billion | +3.7% | | Total Equity | $2.74 billion | $2.84 billion | -3.5% | Notes to Consolidated Financial Statements Notes detail significant corporate activities including JV acquisitions, asset dispositions, the Santa Monica Place loan default, and financing activities - The company acquired the remaining 40% ownership in Arrowhead Towne Center and South Plains Mall in May 2024, and the remaining 40% of the Pacific Premier Retail LLC portfolio (including Los Cerritos Center, Washington Square, and Lakewood Center) in October 2024, with these properties now fully consolidated383945 - The loan on Santa Monica Place went into default effective April 9, 2024, with a court-appointed receiver assuming control of the property on March 18, 2025, anticipating asset disposition through foreclosure or other means77 - In Q1 2024, the company recorded an other-than-temporary impairment by writing off its entire $57.7 million investment in the Los Angeles Premium Outlets development project37 - On March 27, 2025, the company sold Wilton Mall for $24.8 million, resulting in a loss of $2.9 million109 - A dividend of $0.17 per share was announced on April 28, 2025, payable on June 17, 2025130 Management's Discussion and Analysis (MD&A) Management discusses performance, highlighting the positive impact of JV consolidations on revenue, mixed operating metrics, and the "Path Forward Plan" to deleverage the balance sheet Outlook and Strategy The company focuses on its "Path Forward Plan" to improve the balance sheet and operational efficiency, anticipating positive cash flow in 2025 despite market challenges - The "Path Forward Plan" aims to: - Deleverage the capital structure by reducing the Net Debt to Adjusted EBITDA ratio - Invest in and fortify key assets - Proactively consolidate selected joint ventures - Deliver a post-deleveraging FFO launch point goal in 3-4 years - Achieve outstanding operational results and position for future acquisitions187194 - In 2025, one major tenant bankruptcy filing (Forever 21) affected 20 leases, approximately 734,000 sq. ft., and about $5.2 million in annual leasing revenue at the company's share195 - The company expects to generate positive cash flow in 2025 after recurring operating capital expenditures, leasing capital, and dividends, which can be used for development or deleveraging196 Results of Operations (Q1 2025 vs. Q1 2024) The company's net loss significantly decreased due to increased leasing revenue from consolidated JV properties and reduced equity losses, partially offset by higher interest expense - Leasing Revenue: Increased by $44.0 million (23.0%), primarily due to a $47.1 million contribution from newly consolidated JV Transition Centers200 - Interest Expense: Increased by $16.9 million, driven by JV Transition Centers ($19.7 million) and default interest on Santa Monica Place ($3.0 million), partially offset by the cessation of financing arrangement expenses ($4.4 million)205 - Equity in Loss of Unconsolidated JVs: Decreased by $72.5 million, mainly because Q1 2024 included a $57.7 million write-down of the company's investment in Los Angeles Premium Outlets206 - Loss on Sale or Write Down of Assets: Decreased by $22.1 million, as Q1 2024 included a $36.0 million impairment loss on Santa Monica Place, compared to a $13.3 million impairment in Q1 2025 on other properties207 Liquidity and Capital Resources The company maintains strong liquidity with substantial cash and an undrawn revolving credit facility, actively managing its $6.80 billion pro rata debt through financing transactions - As of March 31, 2025, the company had cash and cash equivalents of $253.2 million230 - The company has a $650 million revolving loan facility, with no borrowings outstanding and $649.8 million available as of March 31, 2025229 - Total outstanding loan indebtedness at March 31, 2025, was $6.80 billion on a pro rata basis, including the company's share of unconsolidated JV debt224 - Projected capital expenditures for development, redevelopment, expansion, and renovations for 2025 are estimated to be between $250.0 million and $300.0 million216 Funds From Operations (FFO) The company's FFO attributable to common stockholders increased to $81.0 million in Q1 2025, with adjusted FFO rising 17.1% to $87.4 million FFO Reconciliation (in millions) | Metric | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Net loss attributable to the Company | $(50.1) | $(126.7) | | FFO attributable to common stockholders and unit holders—basic and diluted | $81.0 | $66.5 | | Financing expense in connection with Chandler Freehold | — | $3.6 | | Accrued default interest expense | $3.0 | $(1.0) | | Loss on non-real estate investments | $3.4 | $5.5 | | Adjusted FFO —basic and diluted | $87.4 | $74.6 | Market Risk Disclosures The company's primary market risk is interest rate risk, with most of its $5.32 billion consolidated debt being fixed-rate Debt Summary as of March 31, 2025 (in billions) | Debt Category | Fixed Rate | Floating Rate | Total | | :--- | :--- | :--- | :--- | | Consolidated Centers | $5.02 | $0.30 | $5.32 | | Unconsolidated JVs (Pro Rata) | $1.56 | $0.05 | $1.61 | - A hypothetical 1% increase in interest rates would decrease future earnings and cash flows by approximately $3.5 million annually, based on the $346.7 million of floating rate debt outstanding at March 31, 2025245 Controls and Procedures Management concluded that the company's disclosure controls and procedures were effective as of March 31, 2025, with no material changes to internal control over financial reporting - The CEO and CFO concluded that the company's disclosure controls and procedures were effective as of March 31, 2025247 - No changes in internal control over financial reporting occurred during the quarter that materially affected, or are reasonably likely to materially affect, these controls248 Part II: Other Information Legal Proceedings The company is not currently involved in any material legal proceedings - The company and its affiliates are not currently involved in any material legal proceedings250 Risk Factors There have been no material changes to the risk factors previously disclosed in the company's Annual Report on Form 10-K for the year ended December 31, 2024 - No material changes to risk factors from the Annual Report on Form 10-K for the year ended December 31, 2024251 Unregistered Sales of Equity Securities and Use of Proceeds In Q1 2025, the company issued 6,100 shares of common stock in a private placement upon the redemption of Operating Partnership units, with no equity repurchases during the quarter - On March 4, 2025, the company issued 6,100 shares of common stock upon the redemption of 6,100 common partnership units of the Operating Partnership in a private placement253 - No shares were repurchased under the company's stock buyback program during the first quarter of 2025254