Westfield America, Inc.(NYSE:WEA) announces fourth quater and year-end earnings – sales per square foot increased 4.7% for the year ended December 31, 2000
23 January 2001
Countries: United States
Los Angeles, CA, January 23, 2001 — Westfield America, Inc. (NYSE: WEA) today announced its financial results for the fourth quarter and year ended December 31, 2000.
Funds From Operations (FFO) was $52.8 million or $0.49 per share in the fourth quarter of 2000, as compared to $49.7 million or $0.47 per share for the same period last year, representing a 4.3% increase on a per share basis. Revenues for the quarter were $141.0 million compared to $131.3 million last year.
FFO was $195.2 million or $1.83 per share for the year ended December 31, 2000, as compared to $177.0 million or $1.73 per share for the same period last year, representing a 5.8% increase on a per share basis. Mall shop sales per square foot increased 4.7% on a comparative basis for the year ended December 31, 2000. Regionally, sales performance for the year increased as follows: for the East an increase of 1.8 percent; in the Midwest 2.2 percent; and in the West 6.5 percent. In the fourth quarter, sales increased 2.2%, with regional sales in the East decreasing by 0.9 percent, increasing 0.4 percent in the Midwest, and increasing 3.9 percent on the West coast.
“Westfield America’s sales increase of 4.7 percent for the year reflected the slowdown in sales over the last quarter which increased 2.2 percent. This illustrates the decline in consumer confidence, higher energy costs and severe weather that was experienced in the East and Midwest,” said CEO Peter Lowy.
HIGHLIGHTS FOR THE QUARTER
FFO was $52.8 million or $0.49 per share in the quarter, representing a 4.3% increase on a per share basis.
Total mall shop sales for the quarter were $1.2 billion, representing an increase of 2.2% on a comparable square foot basis over the same period last year.
Mall shop space was 94% leased at the end of the quarter, consistent with the fourth quarter last year.
Mall shop leases totaling 315,740 square feet were signed during the quarter at rents averaging $48.40 per square foot.
The Company’s pro rata share of consolidated and unconsolidated debt at December 31, 2000, was $2,894.2 million (of which 93% was fixed rate debt), with a weighted average interest rate of 7.45%. Debt to total market capitalization ratio was 58.3%.
The Company’s EBITDA (earnings before interest, taxes, depreciation and amortization) interest coverage ratio for the quarter ended December 31, 2001 was 2.0 times.
HIGHLIGHTS FOR THE YEAR ENDED DECEMBER 31, 2000
- Funds From Operations (FFO) were $195.2 million, or $1.83 per share for the year ended December 31, 2000, a 5.8% increase on a per share basis.
- Total mall shop sales for the year ended December 31, 2000 were $ 3.4 billion, representing a 4.7% increase on a comparable square foot basis over the same period last year.
- For the year, mall shop leases totaling 1,566,997 square feet were signed at rents averaging $38.00 per square foot, representing a 20.1% increase over expiring rents. Additionally, the Company entered into 249,807 square feet of big box leases at rents averaging $17.52 per square foot.
- Average mall shop rents are $32.83 per square foot. Excluding the acquisition of Westfield Shoppingtown Garden State Plaza, average mall shop rents increased 3.5%. Average lease rents including spaces in excess of 20,000 square feet were $29.57 per square foot.
The fourth quarter dividend, which was declared on December 19, 2000, is payable to shareholders of record on December 29, 2000 at the rate of $0.37 per common share, which is $1.48 on an annualized basis. The dividend will be paid on January 31, 2001.
Dividends for 2001 are to be increased from $1.48 to $1.49 per common share on an annual basis or from $0.37 to $0.3725 per share on a quarterly basis. The increase in the 2001 dividend is consistent with our policy of rewarding shareholders while continuing to reduce our payout ratio.
WESTFIELD SHOPPINGTOWN GARDEN STATE PLAZA, On June 1, 2000, the Company acquired a 50% interest in Garden State Plaza, a super-regional mall located in Paramus, New Jersey for non-cash consideration of $52.5 million plus the assumption of debt. Garden State Plaza has a gross leasable area of approximately two million square feet and is anchored by five department stores: Macy’s, Nordstrom, JCPenney, Neiman Marcus and Lord & Taylor. The center is regarded as one of the most successful shopping centers on the East Coast, with specialty store sales of approximately $515 per square foot.
WESTFIELD SHOPPINGTOWN VANCOUVER, On October 7, 2000 the Company acquired a 49.5% interest in Westfield Shoppingtown Vancouver in addition to the 50% previously owned by the Company for $24.5 million plus the assumption of $15.1 million of debt.
During the quarter, construction was completed or is currently underway at the following Westfield Shoppingtowns:
ANNAPOLIS, Annapolis, Maryland, has opened a new 52,000 square foot Crown Theater. An additional 32,000 square feet of new and reconfigured mall shops and restaurants will open progressively in 2001. The total project cost is approximately $23 million.
INDEPENDENCE, Wilmington, North Carolina, broke ground May 4, 2000 on its $55 million redevelopment. The new Dillard’s and 164,000 square feet of mall shops are under construction, and are progressing on schedule for a Summer 2001 opening.
MONTGOMERY, Bethesda, Maryland, is currently anchored by Nordstrom, Hecht’s and Sears. The May Company acquired the top level of the former JCPenney Store, allowing Hecht’s to relocate its Home Store and facilitate the expansion and remodeling of its existing store. The Company acquired the lower level of the JCPenney store, enabling the addition of 63,500 square feet of GLA, including a 25,000 square foot Old Navy, to enhance the Shoppingtown’s merchandise mix. The total project cost is approximately $19 million with an estimated completion date in the Summer of 2001.
SOUTH COUNTY, St. Louis, Missouri, launched its $54 million redevelopment on July 20, 2000. The project consists of a new Sears Department Store and two levels of new and reconfigured mall shops totaling 180,000 square feet, along with a new food court and comprehensive renovation of the existing center. Construction is on schedule for a Fall, 2001 opening.
WEST COUNTY, St. Louis, Missouri, commenced its $232 million redevelopment with an official ground breaking ceremony on June 12, 2000. Currently, the new flagship Famous Barr is under construction and the existing center will cease trading at the end of January to allow for the demolition and redevelopment of the site. Upon completion, scheduled for the Fall of 2002, the redeveloped Westfield Shoppingtown West County will re-emerge as a new super-regional mall of more than 1.2 million square feet, including the only Nordstrom in St. Louis, flagship Lord & Taylor and Famous Barr stores and a renovated JCPenney.
PARKWAY, El Cajon, California, is completing its $14 million redevelopment of the community retail strip center, on the eastern edge of the property. This redevelopment includes a new Office Depot, which is currently open. Best Buy and Borders Books, along with additional shops will open in the first quarter of 2001.
PROMENADE, Woodland Hills, California, broke ground in August for the center’s $35 million redevelopment. The project will transform the center into an entertainment/retail center by redesigning the lower level and adding five new destination tenants and restaurants. The second level will be designed and re-merchandized to complement the new lower level tenants and the existing, highly successful AMC Theatre. Upon completion in the Summer of 2001, the new entertainment venues are expected to establish the center as a leading lifestyle and entertainment destination in the West San Fernando Valley.
VALLEY FAIR, San Jose, California is progressing with its $165 million redevelopment. Two new parking structures are open and the new 225,000 square foot Nordstrom is under construction, with a planned opening of Spring, 2001. New and reconfigured mall shops totaling 320,000 square feet will open in two phases. Phase one, consisting of 160,000 square feet, will open in conjunction with Nordstrom and is currently 91% leased. Phase two, the reconfiguration of the existing Nordstrom building into mall shops, is planned for completion in Spring 2002.
Construction is planned to commence on the following Shoppingtowns during 2001:
ENFIELD,Enfield Connecticut, is a regional mall with approximately 662,000 square feet of gross leaseable space and is anchored by Sears, Filene’s and Hoyts multiplex cinema. The $11 million redevelopment plan incorporates a new 126,000 square foot Target store, a new entrance court and revised mall connection to the center court as well as off site road improvements. The redevelopment is scheduled to be completed in Spring 2002.
PALM DESERT,is a super-regional shopping center located in Palm Desert, California with approximately 870,000 square feet of gross leaseable area anchored by two Robinsons-May stores, a JC Penney store, and two Macy’s stores. The $30 million redevelopment, including a new Sears, expanded Macy’s and Robinsons May, and a comprehensive renovation, will competitively reposition the center in its market.
PLAZA BONITA, is a super-regional shopping center located in National City, California, approximately seven miles south of San Diego. The center has gross leaseable area of approximately 873,000 square feet and is anchored by Robinsons-May, Mervyn’s, Montgomery Ward and JC Penney. The $5 million redevelopment plan consists of the renovation of the enclosed mall and food court and the addition of two 6,500 square foot peripheral restaurant pads. The redevelopment is scheduled to be completed in Fall 2001.
- At December 31, 2000, Westfield America had $217 million of unused capacity under its $450 million secured revolving corporate line of credit. Through its hedging activities, the Company has fixed borrowings under the secured credit facility at average interest rates ranging from 7.97% to 8.51%.
The following is a summary of the significant financings completed during 2000:
On May 16, 2000, the Company refinanced Westfield Shoppingtown Plaza Camino Real with Lehman Brothers. The proceeds totaling $36 million were used to replace an existing loan. The refinanced loan requires interest only payments at 7.65% and matures in June 2010.
On May 22, 2000, the Company refinanced the mortgage debt on Westfield Shoppingtown Trumbull totaling $130.5 million through the Company’s secured credit facility.
On June 6, 2000, the Company refinanced Westfield Shoppingtown Independence and obtained a construction loan with PNC Bank totaling $93 million at a blended interest rate of LIBOR +1.62%. The loan matures in August 2003.
On August 31, 2000, the Company obtained a $150 million unsecured facility with interest at LIBOR + 1.75% through UBS Warburg. This facility is expected to be retired with excess proceeds from the refinancing of the Capital Company of America (CCA) facility, which matures in December 2001.
On September 28, 2000, the Company refinanced the mortgage debt on Westfield Shoppingtown South County and obtained a term and construction loan totaling $94 million with PNC Bank at a blended interest rate of LIBOR + 1.70%.
On October 6, 2000, the Company refinanced Westfield Shoppingtown Vancouver with Lehman Brothers. Proceeds from the loan were used to acquire an additional 49.5% interest in the property. The new mortgage is a three-year facility with interest at LIBOR +1.55%.
On November 15, 2000, the Company obtained a construction loan from Bank of America to finance the Westfield Shoppingtown West County redevelopment in the amount of $170 million with interest at LIBOR +2.00%.
On December 14, 2000, the Company refinanced the mortgage debt on Westfield Shoppingtown Meriden totaling $98.5 million with Lehman Brothers and UBS Warburg. The interest on the new debt, which matures in January 2011, is fixed at 7.45%.