Macerich (MAC) Financials

Macerich (NYSE: MAC) Financial Summary and Trend Analysis (Q3 2022 - Q4 2024):

Over the past two years, Macerich's financial performance has exhibited volatility with significant swings in profitability and cash flow, reflecting broader economic and sector-specific factors impacting real estate investment trusts (REITs).

• In Q2 2024, Macerich recorded a notable net income of $252.0 million attributable to common shareholders, representing a strong rebound from preceding quarters showing losses.
• Total revenues generally increased from around $168 million in early 2023 to $213.7 million in Q4 2024, demonstrating some revenue growth over the period.
• Operating cash flows remained positive for most quarters, with $100 million generated in Q3 2024 and a solid $54.9 million in Q4 2024, underscoring Macerich’s ability to generate cash from operations despite net losses on the income statement in recent quarters.
• Macerich has maintained a consistent dividend payment at $0.17 per share throughout 2023 and 2024, signaling commitment to shareholder returns during a challenging period.
• Total assets remained substantial above $7.5 billion, with common equity around $2.5 billion to $2.7 billion in late 2024, indicating a strong asset base despite equity fluctuations.
• Depreciation and amortization expenses have consistently been a large part of non-interest expenses, averaging around $70 million to $84 million quarterly, reflecting the nature of the real estate business.
• Macerich’s net interest expense increased significantly, from $25 million in Q4 2023 to $70.9 million in Q4 2024, which may impact future profitability due to higher borrowing costs.
• Net income has been negative in the last five consecutive quarters including a loss of $211.2 million in Q4 2024 with large impairments or other losses notably -$225.7 million in "Other Gains / (Losses)" in the same quarter impacting earnings severely.
• Long-term debt increased to approximately $4.34 billion by Q3 2024, slightly down from over $4.5 billion in previous quarters but still representing a high leverage level, which poses financial risk especially with rising interest expenses.
• The company experienced large swings in other gains/losses and volatility in non-cash adjustments, contributing to unpredictable net income results and potentially masking true operating performance.

Analysis Summary:

Macerich has shown signs of operational resilience with stable revenues and positive operating cash flows in recent quarters despite suffering substantial net losses primarily from non-operating impairments or other losses. The rising interest expense and significant leverage raise concerns about debt servicing capacity if operating performance does not improve. Nevertheless, continued dividend payments reflect management’s confidence in future cash generation.

Investors should monitor Macerich’s ability to control expenses, manage its debt load, and the impact of any further non-operating charges on profitability. The recovery in net income in mid-2024 suggests potential positive momentum, but risks remain due to interest expense escalation and volatile impairments.