C E L E B R AT I N G T H E
PAST
2
0
1
5
A
N
N
U
A
L
R
E
P
O
R
T
|
F
O
R
M
1
0
-
K
C R E AT I N G T H E
FUTURE
2 0 1 5 A N N U A L R E P O R T | F O R M 1 0 - K
o
r
M A C E R I C H
S I N C E 1
h
t
m o
e m i
t
n
e m
e
d
p
o
o l i
d
t i
s
r t f
s t i
b
u l t i
n
i
s t
b
i
t i
a
t i
a
i
t
o
r i
t i
e
i
p
r
r
e
n
o
y
n
t
g
g
g
d
a
p
a
a
p
o
o
o
h
h
h
n
n
n
n
h
h
n
n
r
r
r
r
e
e
e
u
y
c
c
s
s
v
v
C
e
t
a
e
r
4
c
.
n
o
o
6
r
e
i
n
v
n
t
t i
t i m e
v
o
n
a
9
FINANCIAL HIGHLIGHTS
(All amounts in thousands, except share data and per square foot amounts)
OPERATING DATA
2
2015
2014
2013
2012
2011
Total Revenues
$1,288,149
$1,105,247
$1,029,475
$797,517
$684,744
Shopping center and operating expenses
$379,815
$353,505
$329,795
$251,923
$213,832
Management companies’ operating expenses
$92,340
$88,424
$93,461
$85,610
$86,587
REIT general and administrative expenses
$29,870
$29,412
$27,772
$20,412
$21,113
Gain (loss) on remeasurement, sale or write down of assets, net
$400,337
$1,496,576
($26,852)
$228,690
($22,037)
Net income attributable to the Company
$487,562
$1,499,042
$420,090
$337,426
$156,866
Net income per share attributable to common stockholders -
$3.08
$10.45
$3.00
$2.51
$1.18
diluted
OTHER DATA
Regional shopping centers portfolio occupancy
96.1%
95.8%
Regional shopping centers portfolio sales per square foot
Distributions declared per common share
$635
$6.63
$587
$2.51
2015
2014
2013
94.6%
$562
$2.36
2012
93.8%
$517
$2.23
2011
92.7%
$489
$2.05
BALANCE SHEET DATA
2015
2014
2013
2012
2011
Investment in real estate (before accumulated depreciation)
$10,689,656
$12,777,882
$9,181,338
$9,012,706
$7,489,735
Total assets
$11,258,576
$13,121,778
$9,075,250
$9,311,209
$7,938,549
Total mortgage and notes payable
$5,283,742
$6,292,400
$4,582,727
$5,261,370
$4,206,074
Equity
$5,071,239
$6,039,849
$3,718,717
$3,416,251
$3,164,651
Common shares outstanding
154,404,986
158,201,996
140,733,683
137,507,010
132,153,444
See “Item 6 - Selected Financial Data” in our Form 10-K included herein for additional information regarding the data presented in this table.
See our Company’s forward-looking statements disclosure under “Important Factors Related to Forward-Looking Statements” in our Form 10-K included herein.
FRONT COVER left to right:
Santa Monica Place, Queens Center, Tysons Corner Center, Broadway Plaza
BACK COVER left to right:
Twenty Ninth Street, Green Acres Mall, Lakewood Center, Country Club Plaza
o
n it y
r t u
s f, m u lti
p
n
p
o
n
a ti o
1 . 3 m illi o
r
e
n
a
e
e -i n - a - g
g
p i n
e l o
0 1 5 .
v
2
i n
n
c
e
d
o
r- d
e
n
a
s t e
e
p
s
d
e
e i z
m a
y
b
a t
t h
o
e
h
r i c
c
M a
r
n t e
r
e
c
n it y
g
r m i n
o m m u
e
s
c
e
n
r
T y s o n s
e
d
t o
a w a
e
C e n t
r f o
e
p - p
d - u
m i x
r
C o r n e
t o
e
t h
y
s if
g
n i n
d - w i n
U N I Q U E L Y M A C E R I C H
r
g
d i n
e w H a
k
r
m a
w it h
s
e t a il
s
k i n
r
c
y
0 1 5 .
a l,
e
e
a t r
g i n
a t e
e t-l e
a
it s
r i e
k
2
p
e
g
g
p
a
a
a
p
o
h
n
r
e
e
e
x
L
T
s
s
v
e
S q u a r
i n
F a s h i o n
d
e
d
n
i n
a
d
e
o
r
G o
n t e
r ti n
o
p
g
e
S
S
s d a l e
t
c
c o t
n i c
o
i c
k ’ s
e
t h
D i c
d
n
a
4
Dear Fellow Stockholders:
Celebrating the Past, Creating the Future
On the cover and throughout this annual report you will find “before and after” photographs of
several iconic Macerich retail properties. These photos, some of which span more than 50 years,
demonstrate the timeless nature of our highly unique retail destinations.
The retail industry is Darwinian by nature and has been throughout history. Retail concepts come
and go, but great retail locations like ours are resilient.
Skeptics regularly point to macro trends to predict the demise, or as it is euphemistically referred to,
the disruption of the retail industry. Some believe that online shopping will ultimately replace brick
and mortar retailers, but we are highly confident that they are misguided and have reached the
wrong conclusion. The properties in our portfolio have met every challenge thrown their way, from
competing projects and department store upheaval to online shopping, catalog shopping, television
home shopping networks and more. Despite these challenges, they have grown and flourished over
the past five decades.
In the hands of an experienced developer with unmatched redevelopment expertise, solid ties to the
retail industry, a strong capital base and a vision for the future, great retail destinations continue to
stand the test of time.
Let me give you a few examples of our properties that underscore their resilient, increasingly valuable
and enduring nature:
• After admiring Country Club Plaza in Kansas City, Missouri, for more than 40 years, we acquired
the property in conjunction with Taubman Centers on March 1, 2016. Opened in 1928, this
historic property has only changed ownership once prior to our acquisition. We are excited
about the opportunities that lie ahead at this location now that it is in the hands of two top-tier,
experienced major retail property owners.
• Lakewood Center and Broadway Plaza, both located in vibrant California markets, opened in
1951. After Macerich acquired Lakewood Center in 1975 and Broadway Plaza in 1985, our
stewardship and vision have allowed each property to realize their full potential. Broadway
Plaza is currently undergoing a major redevelopment where we are more than doubling the small
shop retail offerings over the next year.
• Located in Valley Stream, New York, near JFK airport, Green Acres Mall opened in 1956. We
acquired the property in 2013 and have driven significant increases to its operating income in
our first three years of ownership. This past year we added Century 21 to the enclosed mall, and
we are now constructing a 335,000 square-foot open-air expansion featuring junior anchors
and entertainment options.
• In 1961, Crossroads Mall, the precursor to Twenty Ninth Street, opened in Boulder, Colorado.
The enclosed mall portion was expanded in 1986 under our ownership, and in 2006 we
completely transformed the property into an open-air retail location. Sales and net operating
income (“NOI“) are currently at the highest levels in Twenty Ninth Street’s history.
FUGA. ERO IDIS ID QUATEM RERIOS REST QUAS ET FUGITA CUS,
QUUNTORE CONE VELIBUSAM,
a l i n
r ti n
o
g
e
p
p
S
p
a
k ’ s
n t
a
c
, D i c
n i fi
s
e
s i g
a t r
d
e
d
s
r
r
r
v
s
T
T
c
F
L
u
e
e
e
e
e
r
h
h
o
a
a
d
e
e
k
d
e
r
a
d
a
k i n
e
s
u
H a
h
r
o m e
b
u
e l o
c t o
a
b
r
p m e
y
r
C e n t
e t e
g
r
t a
s
e
C h
o w e
p
L A
w e l c
n
n t t o
.
e
r
m o
d
n
i t o s
C e
a
o s
0 1 5 w it h
2
G o
L O S C E R R I T O S C E N T E R ,
C E R R I T O S , C A
,
d
o
h
e
T
s
• Scottsdale Fashion Square also
• Kings Plaza in Brooklyn and Queens
6
of Macerich’s unique retail locations as
well as the vision we saw for the future
of each center.
Breaking Ground and Breaking
Rules
Macerich has a strong history of driving
value and innovation in developing
and redeveloping key retail properties
in the nation’s gateway markets. Here
is some additional color about how
we broke the rules in approaching the
transformations of four of our major
projects:
5
3
6
$
Center in Queens both opened
in the early 1970s. We acquired
Queens Center in 1995, and after
completing a remerchandising of the
center, we expanded it over a public
street, which included the relocation
of JCPenney. Queens Center now
generates sales in excess of $1,100
per square foot and anchors our
significant New York retail portfolio.
We were fortunate to acquire
Kings Plaza in 2012 in conjunction
with Green Acres. We recently
remerchandised and remodeled the
mall, and are currently finalizing
plans to recycle the Sears box into
two full line anchors and two junior
anchors.
These nine properties are iconic
within their individual trade
areas and all illustrate
the timeless
nature
7
8
5
$
2
6
5
$
*
T
e
n
a
n
t
s
1
0
,
0
0
0
s
q
u
a
r
e
f
e
e
t
a
n
d
u
n
d
e
r
.
opened in 1961 and was expanded
numerous times prior to our
acquisition of the property in 2002.
We recently completed the addition
of two junior anchors to the property,
increasing its size to more than 2
million square feet. We are currently
exploring an additional 15-acre
expansion with mixed-use.
• In 1968, Tysons Corner Center
opened, and in 2005 Macerich
acquired the property. Upon our
purchase, we replaced JCPenney
with an entertainment expansion
wing. This past year, we completed
the initial mixed-use expansion of
the property, which included the
1.3 million square-foot addition
• 1.3 million square-foot addition
of an award-winning office tower,
a residential tower and a Hyatt
Regency Hotel. These enhancements
have been great additions, and sales
are now nearing $1 billion on an
annual basis. Like the aforementioned
Scottsdale Fashion Square, Tysons
Corner is one of the most
successful centers
in the United
States.
7
1
5
$
9
8
4
$
3
1
1
0
2
0
1
0
2
S A L E S P E R
S Q U A R E F O O T *
3
7
6
4
$
1
4
4
$
4
$
7
0
4
$
2
5
4
$
8
0
0
2
9
0
0
0
1
2
0
2
7
0
0
2
6
0
0
2
5
1
0
2
4
1
0
2
3
1
0
2
2
1
0
2
Chicago
FASHION
OUTLETS OF
CHICAGO, NIAGARA
FALLS USA,
PHILADELPHIA,
SAN FRANCISCO
Outlets Building on its leadership in upscale outlets, in
2015 Macerich advanced plans with PREIT for Fashion
Outlets of Philadelphia, and also forwarded development
of Fashion Outlets of San Francisco.
Santa Monica Place Recently introduced major third-level attractions for
visitors and locals in 2015 include the city’s first new theater in 20 years,
ArcLight Cinemas, and The Cheesecake Factory.
8
Philadelphia
SANTA MONICA PLACE,
SANTA MONICA, CA
• Tysons Corner Center: Many people were
skeptical when we first announced the $500
million mixed-use expansion of Tysons Corner
Center in Virginia four years ago. However,
with the addition of the new metro rail at Tysons
Corner, which connects the area to the nation’s
capital and will soon connect the center to
Washington Dulles Airport, we began to create
a transit-oriented development that has become
the precursor of a mixed-use Central Business
District that is unrivaled in the industry. The
three towers on this property offer residential,
office, and lodging opportunities and are open
and performing well. Each of these towers has
received awards from industry organizations as
best in class in their respective market categories.
Most importantly, the mixed-use development is
driving new customers into the shopping center.
• Santa Monica Place: We closed Santa Monica
Place in 2008 for redevelopment, despite the
fact that it was a moderately successful center
with sales of $400 per square foot. Over the
next two years, we completely gutted and
reinvented the property. We replaced moderate
department stores Macy’s and Robinsons-May
with Bloomingdale’s and Nordstrom. We took an
enclosed mall, turned it inside out, and opened it
up to the vibrant Santa Monica streetscape. Since
the re-imagined Santa Monica Place opened in
August of 2010, the property is an all-around
success. In addition to sales exceeding $780
per square foot, the center received the coveted
International Council of Shopping Centers VIVA
Best of the Best Award in 2013 as best retail
project development in the world.
• Fashion Outlets of Chicago: This ground-up
development is unique in that it is an urban
outlet center located in the heart of a major
metropolitan area. It is an enclosed property
with two levels and deck parking. This project
has been extremely successful from a sales
productivity and net asset value (“NAV”) creation
viewpoint, and has received many awards.
Sales now exceed $730 per square foot. In
2014, Fashion Outlets of Chicago received
the MAPIC Award for Best Outlet Centre in the
6
FUGA. ERO IDIS ID QUATEM RERIOS REST QUAS ET FUGITA CUS,
QUUNTORE CONE VELIBUSAM,
s
c
u
e
z
r
s
c
n
h
o
o
a
a
a
a
o
,
n
K
n
r
s
r
e
o f
p t u
c
a
r i c
e
P l a
o t h
n
a
n
o
r
p
C o
a m a
g
r i n
u i r
q
a l e
r t y , M a
e
b
p
C l u
y
n t r
M a ll.
y C l u b P l a z a C a
d
e - o f- a - k i n
n i c
n
o
i c
’ s
C it y
o
P
e t
s
a
e
C O U N T R Y C L U B P L A Z A
G R E E N A C R E S M A L L
K A N S A S C I T Y , M O
V A L L E Y S T R E A M , N Y
n A c
C e
d
e
n
x
o
b
b i g
s M a ll
0
0
5 , 0
3
C o u n t
a m e
t e
y
c
e
b m a
u
a
T
p it a l f r
s i n
a
e
1 D e
.
n
s i o
s , G r
b
a
e
t h
w it h
d
c
g
c li n
a l f o
e
S t o
n t
t o
n
o m t h
r
A c
n t,
e
p
p
a
r t m e
I n
y
r
p
s
e
n t u
x
e
e
e
d j a
a f fl
e
k
G r
o
n t
u
o
e
p
s f
r
e
2
n
r
n
e
3
e
r
u
d
n
c
e
e
a
g
g
p
a
a
a
a
d
b
b
b
o
o
r
r
r
r
r
n
n
n
e
e
u
u
y
s
c
s
r
r
10
improvement. In terms of leasing, 2015
was another strong year for us with our
portfolio occupancy reaching 96.1%,
the highest in Macerich’s history.
Releasing spreads in our portfolio
continued strong at 14.2%, which is
consistent with our 10-year average
releasing spread of 17.4%.
Average base rent in our portfolio at
year end 2015 was $54.32(per sf) up
from $51.15 in December 2014.
Sales per square foot at year end 2015
were $635, which is up from $587
the year before and up from $489 five
years ago. All of these activities led
to a sector-leading same center net
operating income growth for 2015
of 6.5%. There is clearly
opportunity for us
to continue
world. The success of Fashion Outlets
of Chicago led us to pursue other
urban fashion outlet locations, which
we look forward to delivering in the
coming years.
• Broadway Plaza: Three years ago,
we announced that we were going
to tear down the majority of the
small shop area of Broadway Plaza,
located in San Francisco’s affluent
East Bay. At that time, the center
was generating $700 per square
foot and was anchored by a brand
new Neiman Marcus, a high-volume
Nordstrom and a flagship Macy’s.
We tore down 150,000 square
feet of retail space plus a one-level
parking structure. We will complete
the expansion of the small shop
offering from 210,000 square feet to
420,000 square feet over the next 18
months. From a retailer perspective,
demand has been outstanding and
we expect sales per square foot to be
among the top in our portfolio when
the project is complete.
• We have also been successful in
converting what were
either B or C malls
to what
$524.5
are now clearly market-dominant A
malls with Vintage Faire in Modesto,
California, and Fashion Fair in
Fresno, California. We acquired each
of these properties in 1996, and at
the time both averaged about $280
per square foot. Through a variety
of merchandising enhancements
and expansions, both now currently
exceed sales per square foot of
$640. While these are not urban
locations compared to the balance
of our portfolio, they are in strong
regional economies and, with our
retail expertise and vision, we were
able to turn them into what are
clearly considered to be A malls in
the industry today.
2015 Operating Highlights
The year 2015 was another tremendous
year for us on the operating front.
We were successful in improving our
operating margins by 247 basis
points and are focused
on driving further
$666.0
$552.3
$460.9
$414.6
FFO
DILUTED*
$ in millions
*FFO-diluted represents funds from operations on a diluted basis, excluding the
early extinguishment of debt and costs related to an unsolicited takeover offer in
2015. This also adjusts for certain items in 2012 and 2011 relating to three disposed
properties. For the definition of FFO-diluted and a reconciliation of FFO-diluted
to net income attributable to common stockholders-diluted, see “Management’s
Discussion and Analysis of Financial Condition and Results of Operations – Funds from
Operations and Adjusted Funds from Operations” in our Form 10-K included herein.
2011
2012
2013
2014
2015
B R O A D W A Y P L A Z A
W A L N U T C R E E K , C A
n
s t o
m il e
a
o m i n
e t- d
e t
s
s t
fi
e
2
i n
a
o
r
B
e w t e
n
h it
o f m a
g
n i n
e
0 1 5
d w a
a
n
t h
n
P l a
.
s
e
n t
o f
r i c
e
n
s i o
d
k
r
t h
y
n t s
,
a
p
o
o
h
r
e
z
e
y
c
k
P l a z a M a
e
d
a t e
e t a il e
a
a
x
r
p
s
n
n
B r o a d w a y
n ti c i p
h - a
5 r
c
4
g
a m i n
m u
n
achieving above average same center
NOI growth in the foreseeable future.
This is a function of having a “must
have” and high demand retail portfolio,
both from our existing retail base
and new and emerging retailers, and
driven by our efforts over the past five
years in culling our weaker assets and
redeploying that capital into higher
quality assets.
Balance Sheet
The year 2015 was another very active
and productive year for us in terms of
our balance sheet. We completed more
than $2.3 billion in new financings at
average interest rates of 3.50% and
average terms of more than 9 years
resulting in debt to market cap at year
end of 34.4%. After reflecting our loan
closings in January 2016, our weighted
average year to maturity is now 6.5
years.
Portfolio Composition and
Management
We have significantly improved our
portfolio over the past five years with
dispositions exceeding $1.5 billion
that were generally lower productivity
assets in secondary or tertiary noncore
markets for us. Today 90% of our NOI
comes from our top 40 assets, which
currently average $664 per square foot
in sales. We have become a bicoastal
owner of retail centers with 28% of our
NOI coming from California, 36% from
the New York to DC corridor, and 17%
from Arizona.
2015 Major Transactions
In recognition of the substantial
disparity between private market
valuations and public market values, we
sold interests in eight regional malls in
2015 and early 2016. Those eight malls
were representative of our portfolio’s
average composition with sales per
square foot of $669. The total gross
asset value offered for the joint venture
was $5.4 billion. The introduction of
new joint venture partners, which own
between 40-49% of these ventures,
generated $2.3 billion of liquidity for
the company.
We elected to return $680 million of
these proceeds as a special dividend
to our stockholders. We also elected
to capitalize on the disparity between
private market valuations and our public
market share price by announcing a
$1.2 billion share repurchase plan. Of
that plan, $400 million was completed
at year end and we contracted
in February 2016 to repurchase
12
another $400
million under
an accelerated
share repurchase
agreement. Shares
repurchased
to date have
averaged
approximately $78 per share, which
is substantially below management
and our board of directors’ view of the
underlying value of our portfolio.
Also during 2015 we sold Panorama
Mall and redeployed that equity to
fund our purchase of a 50% interest in
Country Club Plaza in partnership with
Taubman.
Commitment to Sustainability
Macerich remains committed to
sustainability and the environment,
marked by our achievements in
environmental stewardship across
our irreplaceable portfolio of unique
and high-performing properties in the
country’s top gateway markets. We
have set ambitious goals to build on the
great strides we have already made
in reducing our carbon footprint and
environmental impacts. These efforts
have been recognized by the industry.
In 2015, Macerich received the Leader
CUMULATIVE TOTAL
STOCKHOLDER RETURNS
2015
(One Year)
2013-2015
(Three Year)
2011-2015
(Five Year)
2006-2015
(Ten Year)
1996-2015
(Twenty Year)
FTSE NAREIT All Equity REITs Index
2.8%
35.4%
75.5%
103.8%
689.1%
S&P 500
MAC
1.4%
52.6%
80.8%
102.4%
382.5%
4.9%
62.1%
116.0%
125.5%
1422.1%
in the Light award from NAREIT as
Retail Leader for the second year in a
row. This award is given to companies
that have demonstrated superior
portfolio-wide sustainability practices.
our 20 plus years as a publicly traded
company. In fact, on a relative basis,
we have ranked in the top 20% of the
RMZ REIT index over the past 3, 5 and
20 year periods.
Additionally, we have been placed
on the Climate “A List,” as ranked by
CDP (formerly the Carbon Disclosure
Project). This is awarded to companies
that have received an A grade for their
actions to mitigate climate change, and
we are globally ranked in the top 5% of
all companies.
In 2015, after an evaluation by GRESB
(Global Real Estate Benchmark) of
the sustainability performance of our
company versus other REITS, real estate
companies and funds on a portfolio-
wide basis, GRESB ranked Macerich
as the #1 company in the North
American retail sector. GRESB is widely
recognized as the global standard for
portfolio level sustainability reporting in
the real estate sector.
Delivering Substantial Returns to
Stockholders
Macerich common stock has
substantially outperformed the S&P
500 and the RMZ REIT indices during
We are committed to continuing
this strong performance, as Total
Stockholder Return (“TSR“) is without
question our primary measurement of
success. We believe that by continuing
to increase our net asset values and
delivering strong same-center NOI,
positive TSR results will follow, a belief
that has been demonstrated over the
past 20 years.
Our commitment to delivering above
average and outstanding TSR is
exhibited in our compensation of our
senior executives. More than 50%
of the compensation packages for
the named executive officers and the
CEO of Macerich is directly tied to our
relative performance as measured by
TSR over rolling three-year periods of
time.
Redevelopments and
Developments
We firmly believe that reinvesting in
our strong portfolio of assets through
well-conceived expansions and
remerchandising efforts will deliver the
highest stockholder returns on a risk
adjusted basis. This guiding principle
has been evident over our entire
corporate history. During the past year,
we were successful in completing the
delivery of redevelopment projects
including our mixed-use expansion of
Tysons Corner Center and the addition
of junior anchors to Los Cerritos Center
and Scottsdale Fashion Square.
As noted previously in this letter, we
are in the middle of delivering upon
the major demolition and expansion
project at Broadway Plaza, as well as
the construction of the 335,000 square-
foot, two-story open-air junior anchor
and entertainment expansion at Green
Acres Mall.
Likewise, we recently started the
complete reconstruction of Fashion
Outlets of Philadelphia, which is
located in the heart of the city, in
conjunction with our joint venture
partner Pennsylvania Real Estate
Investment Trust.
We have a number of strong
opportunities in our shadow pipeline,
OCCUPANCY
AT YEAR END
93.4%
93.1%
93.1%
92.7%
92.3%
91.3%
95.8%
96.1%
94.6%
93.8%
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
including the complete recycling of the
330,000 square-foot Sears location
at Kings Plaza, and a ground-up
development at the site of Candlestick
Park, to be named Fashion Outlets of
San Francisco.
Looking Forward
We are extremely bullish on our
prospects going forward, which reflects
our mark to market opportunities in
releasing our portfolio as well as the
delivery of our redevelopment and
development pipeline.
We have successfully repositioned
our property collection to be a series
of “must have” timeless retail centers
in urban market-dominant locations.
Great centers stand the test of time,
and when you combine the right mix of
professional management skills, vision
and capitalization with great locations,
as Macerich does, you deliver strong
NAV growth, robust same-center
NOI growth and superior TSR to
stockholders.
As discussed above, while there has
been speculation about the possible
disruption of retail centers by online
shopping, we see this as an opportunity
for our portfolio of well-situated trophy
properties, not a threat. Over the
next five years, we expect to see a
TODAY 90%
OF OUR NOI
COMES FROM
OUR TOP
40 ASSETS.
convergence of online and brick and
mortar shopping in our malls, which will
result in new retailers and enhanced
shopping experiences. For Macerich,
40% of our current NOI is generated
from our top 50 retail tenants. However,
by embracing emerging e-tailers, we
will have access to the hundreds of
other retail concepts that will migrate
from online-only venues to omni-
channel businesses, including brick
and mortar. Approximately 92% of all
retail sales are generated at brick and
mortar locations. We are committed to
adapting to the current environment by
becoming an omni-channel owner that
will service the needs
of our brick and mortar
retailers and our
shoppers and provide
a home for the e-tailers
of today and tomorrow
as they migrate to our
locations.
14
In closing, I want to thank all of our
stockholders for their support over a
challenging and extremely productive
2015. Through the guidance of our
board of directors, we have set
the course for a very bright future
for Macerich. We look forward to
reporting to you the results of our efforts
over the upcoming year and years to
come.
Sincerely,
Arthur M. Coppola
Chairman and Chief Executive Officer
RELEASING
SPREAD %
28.6%
24.1%
18.5%
13.9%
15.4%
13.7%
6.8%
22.0%
17.2%
14.2%
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
THE MACERICH COMPANY
SALES PER SQUARE FOOT BY PROPERTY RANKING
(UNAUDITED)
Properties
Group 1: Top 10
1
2
3
4
5
6
7
8
9
Corte Madera, Village at
Queens Center
Washington Square
North Bridge, The Shops at
Tysons Corner Center
Los Cerritos Center
Biltmore Fashion Park
Santa Monica Place
Tucson La Encantada
10
Broadway Plaza (d)
Total Top 10:
Group 2: Top 11-20
11
12
13
14
15
16
17
18
19
20
Scottsdale Fashion Square
Arrowhead Towne Center
Fashion Outlets of Chicago
Kings Plaza Shopping Center
Vintage Faire Mall
Kierland Commons
Chandler Fashion Center
Green Acres Mall
Fresno Fashion Fair
Country Club Plaza (e)
Total Top 11-20:
Group 3: Top 21-30
21
22
23
24
25
26
27
28
29
30
Danbury Fair Mall
Twenty Ninth Street
Freehold Raceway Mall
Deptford Mall
Oaks, The
FlatIron Crossing
Stonewood Center
SanTan Village Regional Center
Victor Valley, Mall of
Inland Center
Total Top 21-30:
Sales PSF
12/31/15
(a)
$1,475
$1,134
$1,125
$856
$851
$843
$835
$786
$767
n/a
$957
$745
$741
$734
$720
$677
$670
$649
$643
$642
n/a
$696
$633
$626
$610
$580
$580
$551
$544
$525
$520
$510
$575
Total
Occupancy %
12/31/15
(b)
% of Portfolio
Forecast 2016
Pro Rata NOI
(c)
97.9%
98.2%
98.4%
99.8%
98.9%
97.2%
99.0%
90.5%
94.8%
n/a
97.7%
97.8%
95.4%
97.9%
92.3%
96.7%
98.3%
96.9%
93.2%
98.1%
n/a
96.3%
97.4%
99.3%
98.7%
95.3%
97.6%
93.7%
98.5%
96.5%
97.9%
99.0%
97.2%
28.0%
28.2%
19.6%
16
% of Portfolio
Forecast 2016
Pro Rata NOI
(c)
Sales PSF
12/31/15
(a)
Total
Occupancy %
12/31/15
(b)
$501
$467
$465
$454
$452
$448
$431
$369
$364
n/a
$443
$664
n/a
$349
$347
$339
$338
$325
$308
$295
n/a
n/a
$325
$635
N/A
99.8%
96.3%
97.4%
95.3%
93.5%
95.0%
93.1%
94.1%
96.8%
n/a
95.9%
$96.8%
n/a
89.2%
93.2%
79.4%
97.0%
88.0%
85.9%
95.2%
n/a
n/a
90.0%
96.1%
N/A
14.3%
90.1%
7.6%
97.7%
2.3%
100.0%
Properties
Group 4: Top 31-40
31
32
33
34
35
36
37
38
39
40
West Acres
Lakewood Center
Valley River Center
Northgate Mall
South Plains Mall
Pacific View
La Cumbre Plaza
Superstition Springs Center
Eastland Mall
Fashion Outlets of Niagara Falls USA (d)
Total Top 31-40:
Top 40:
Group 5: 41-50
41
42
43
44
45
46
47
48
49
50
Westside Pavilion (d)
Towne Mall
Capitola Mall
Cascade Mall
Desert Sky Mall
Valley Mall
NorthPark Mall
Wilton Mall
SouthPark Mall (d)
Paradise Valley Mall (d)
Total 41-50:
REGIONAL SHOPPING CENTERS (f)
Fashion Outlets of Philadelphia (d)(g)
OTHER NON-REGIONAL MALL ASSETS
TOTAL ALL PROPERTIES
(a) Sales are based on reports by retailers leasing mall and freestanding stores for the trailing 12 months for tenants which have occupied such stores for a minimum of 12
months. Sales per square foot (“PSF”) are based on tenants 10,000 square feet and under.
(b) Occupancy is the percentage of mall and freestanding gross leaseable area (“GLA”) leased as of December 31, 2015. Occupancy excludes Centers under development
and redevelopment.
(c) The percent of Portfolio 2016 Forecast Pro Rata Net Operating Income (‘‘NOI’’) is based on guidance provided on February 3, 2016. NOI excludes: straight-line and
above/below market adjustments to minimum rents. It does not reflect REIT expenses and net Management Company expenses.
See our Company’s forward-looking statements disclosure under “Important Factors Related to Forward-Looking Statements” in our Form 10-K included herein for factors
that may affect the information provided in this column.
(d) These assets are under redevelopment including demolition and reconfiguration of the Centers and tenant spaces, accordingly the Sales PSF and Occupancy during the
periods of redevelopment are not included.
(e) On March 1, 2016, the Company purchased Country Club Plaza located in Kansas City, Missouri in a 50/50 joint venture. The pro rata NOI from this Center is
included in the percentage of Portfolio 2016 Forecast Pro Rata Real Estate NOI in the table above.
(f) Flagstaff Mall is excluded from the table above because the Center is being transitioned to the loan servicer.
(g) On July 30, 2014, the Company formed a joint venture to redevelop and rebrand The Gallery in Philadelphia, Pennsylvania as Fashion Outlets of Philadelphia.
DIRECTORS
Arthur M. Coppola
Chairman and Chief Executive Officer
Edward C. Coppola
President and Director
John H. Alschuler
Director
Steven R. Hash
Director
Fred S. Hubbell
Director
Diana M. Laing
Director
Mason G. Ross
Director
Steven L. Soboroff
Director
Andrea M. Stephen
Director
John M. Sullivan
Director
EXECUTIVE
OFFICERS
Thomas J. Leanse
Senior Executive Vice President,
Chief Legal Officer and Secretary
Thomas E. O’Hern
Senior Executive Vice President,
Chief Financial Officer and Treasurer
Robert D. Perlmutter
Senior Executive Vice President
and Chief Operating Officer
Randy L. Brant
Executive Vice President, Real Estate
Eric V. Salo
Executive Vice President
and Chief Strategy Officer
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
FOR THE FISCAL YEAR ENDED DECEMBER 31, 2015
Commission File No. 1-12504
THE MACERICH COMPANY
(Exact name of registrant as specified in its charter)
MARYLAND
(State or other jurisdiction of
incorporation or organization)
95-4448705
(I.R.S. Employer
Identification Number)
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
Securities registered pursuant to Section 12(b) of the Act
Title of each class
Name of each exchange on which registered
Common Stock, $0.01 Par Value
New York Stock Exchange
Securities registered pursuant to Section 12(g) of the Act: None
Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities
Act YES (cid:1) NO (cid:2)
Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the
Act YES (cid:2) NO (cid:1)
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of
the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was
required to file such reports) and (2) has been subject to such filing requirements for the past 90 days. YES (cid:1) NO (cid:2)
Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if
any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§ 232.405
of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit
and post such files). YES (cid:1) NO (cid:2)
Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained
herein, and will not be contained, to the best of registrant’s knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment on to this Form 10-K. (cid:2)
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated
filer, or a smaller reporting company. See definitions of ‘‘large accelerated filer,’’ ‘‘accelerated filer,’’ and ‘‘smaller
reporting company’’ in Rule 12b-2 of the Exchange Act. (Check one):
Large accelerated filer (cid:1)
Accelerated filer (cid:2)
Smaller reporting company (cid:2)
Non-accelerated filer (cid:2)
(Do not check if a
smaller reporting company)
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).
YES (cid:2) NO (cid:1)
The aggregate market value of voting and non-voting common equity held by non-affiliates of the registrant was
approximately $11.8 billion as of the last business day of the registrant’s most recently completed second fiscal quarter
based upon the price at which the common shares were last sold on that day.
Number of shares outstanding of the registrant’s common stock, as of February 22, 2016: 149,149,560 shares
Portions of the proxy statement for the annual stockholders meeting to be held in 2016 are incorporated by
reference into Part III of this Form 10-K.
DOCUMENTS INCORPORATED BY REFERENCE
THE MACERICH COMPANY
ANNUAL REPORT ON FORM 10-K
FOR THE YEAR ENDED DECEMBER 31, 2015
INDEX
Part I
Item 1.
Business . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Item 1A. Risk Factors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Item 1B. Unresolved Staff Comments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Properties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Item 2.
Item 3.
Legal Proceedings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Item 4. Mine Safety Disclosures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Part II
Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer
Purchases of Equity Securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Selected Financial Data . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Item 6.
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of
Operations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Item 7A. Quantitative and Qualitative Disclosures About Market Risk . . . . . . . . . . . . . . . . . . .
Financial Statements and Supplementary Data . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Item 8.
Changes in and Disagreements with Accountants on Accounting and Financial
Item 9.
Disclosure . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Item 9A. Controls and Procedures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Item 9B. Other Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Part III
Item 10. Directors and Executive Officers and Corporate Governance . . . . . . . . . . . . . . . . . . .
Item 11. Executive Compensation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Item 12.
Security Ownership of Certain Beneficial Owners and Management and Related
Stockholder Matters . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Item 13. Certain Relationships and Related Transactions, and Director Independence . . . . . . .
Item 14.
Principal Accountant Fees and Services . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Part IV
Item 15. Exhibits and Financial Statement Schedule . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Signatures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Page
4
20
30
31
37
37
38
41
47
70
71
71
71
73
73
73
73
73
74
75
134
2
PART I
IMPORTANT FACTORS RELATED TO FORWARD-LOOKING STATEMENTS
This Annual Report on Form 10-K of The Macerich Company (the ‘‘Company’’) contains
statements that constitute forward-looking statements within the meaning of the federal securities laws.
Any statements that do not relate to historical or current facts or matters are forward-looking
statements. You can identify some of the forward-looking statements by the use of forward-looking
words, such as ‘‘may,’’ ‘‘will,’’ ‘‘could,’’ ‘‘should,’’ ‘‘expects,’’ ‘‘anticipates,’’ ‘‘intends,’’ ‘‘projects,’’
‘‘predicts,’’ ‘‘plans,’’ ‘‘believes,’’ ‘‘seeks,’’ ‘‘estimates,’’ ‘‘scheduled’’ and variations of these words and
similar expressions. Statements concerning current conditions may also be forward-looking if they imply
a continuation of current conditions. Forward-looking statements appear in a number of places in this
Form 10-K and include statements regarding, among other matters:
(cid:127) expectations regarding the Company’s growth;
(cid:127) the Company’s beliefs regarding its acquisition, redevelopment, development, leasing and
operational activities and opportunities, including the performance of its retailers;
(cid:127) the Company’s acquisition, disposition and other strategies;
(cid:127) regulatory matters pertaining to compliance with governmental regulations;
(cid:127) the Company’s capital expenditure plans and expectations for obtaining capital for expenditures;
(cid:127) the Company’s expectations regarding income tax benefits;
(cid:127) the Company’s expectations regarding its financial condition or results of operations; and
(cid:127) the Company’s expectations for refinancing its indebtedness, entering into and servicing debt
obligations and entering into joint venture arrangements.
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 or the industry to differ materially from the Company’s
future results, performance or achievements, or those of the industry, expressed or implied in such
forward-looking statements. Such factors include, among others, general industry, as well as national,
regional and local 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, terms and payments, interest
rate fluctuations, availability, terms 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; the
liquidity of real estate investments, governmental actions and initiatives (including legislative and
regulatory changes); environmental and safety requirements; and terrorist activities or other acts of
violence which could adversely affect all of the above factors. You are urged to carefully review the
disclosures we make concerning risks and other factors that may affect our business and operating
results, including those made in ‘‘Item 1A. Risk Factors’’ of this Annual Report on Form 10-K, as well
as our other reports filed with the Securities and Exchange Commission (‘‘SEC’’). You are cautioned
not to place undue reliance on these forward-looking statements, which speak only as of the date of
this document. 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 document or to reflect the
occurrence of unanticipated events, unless required by law to do so.
3
ITEM 1. BUSINESS
General
The Company is involved in the acquisition, ownership, development, redevelopment, management
and leasing of regional and community/power shopping centers located throughout the United States.
The Company is the sole general partner of, and owns a majority of the ownership interests in, The
Macerich Partnership, L.P., a Delaware limited partnership (the ‘‘Operating Partnership’’). As of
December 31, 2015, the Operating Partnership owned or had an ownership interest in 51 regional
shopping centers and seven community/power shopping centers. These 58 regional and community/
power shopping centers (which include any related office space) consist of approximately 55 million
square feet of gross leasable area (‘‘GLA’’) and are referred to herein as the ‘‘Centers’’. The Centers
consist of consolidated Centers (‘‘Consolidated Centers’’) and unconsolidated joint venture Centers
(‘‘Unconsolidated Joint Venture Centers’’) as set forth in ‘‘Item 2. Properties,’’ unless the context
otherwise requires.
The Company is a self-administered and self-managed real estate investment trust (‘‘REIT’’) and
conducts all of its operations through the Operating Partnership and the Company’s management
companies, Macerich Property Management Company, LLC, a single member Delaware limited liability
company, Macerich Management Company, a California corporation, Macerich Arizona Partners LLC,
a single member Arizona limited liability company, Macerich Arizona Management LLC, a single
member Delaware limited liability company, Macerich Partners of Colorado LLC, a single member
Colorado limited liability company, MACW Mall Management, Inc., a New York corporation, and
MACW Property Management, LLC, a single member New York limited liability company. All seven of
the management companies are collectively referred to herein as the ‘‘Management Companies.’’
The Company was organized as a Maryland corporation in September 1993. All references to the
Company in this Annual Report on Form 10-K include the Company, those entities owned or
controlled by the Company and predecessors of the Company, unless the context indicates otherwise.
Financial information regarding the Company for each of the last three fiscal years is contained in
the Company’s Consolidated Financial Statements included in ‘‘Item 15. Exhibits and Financial
Statement Schedule.’’
Recent Developments
Acquisitions and Dispositions:
On February 17, 2015, the Company acquired the remaining 50% ownership interest in Inland
Center, an 866,000 square foot regional shopping center in San Bernardino, California, that it did not
previously own for $51.3 million. The purchase price was funded by a cash payment of $26.3 million
and the assumption of the third party’s share of the mortgage note payable on the property of
$25.0 million. Concurrent with the purchase of the joint venture interest, the Company paid off the
$50.0 million loan on the property. The cash payment was funded by borrowings under the Company’s
line of credit. As a result of the acquisition, the Company recognized a gain on the remeasurement of
assets of $22.1 million.
On April 30, 2015, the Company entered into a 50/50 joint venture with Sears to own nine
freestanding stores located at Arrowhead Towne Center, Chandler Fashion Center, Danbury Fair Mall,
Deptford Mall, Freehold Raceway Mall, Los Cerritos Center, South Plains Mall, Vintage Faire Mall
and Washington Square. The Company invested $150.0 million for a 50% ownership interest in the
joint venture, which was funded by borrowings under the Company’s line of credit.
On October 30, 2015, the Company sold a 40% ownership interest in Pacific Premier Retail LLC
(the ‘‘PPR Portfolio’’), which owns Lakewood Center, a 2,075,000 square foot regional shopping center
4
in Lakewood, California; Los Cerritos Center, a 1,292,000 square foot regional shopping center in
Cerritos, California; South Plains Mall, a 1,127,000 square foot regional shopping center in Lubbock,
Texas; and Washington Square, a 1,441,000 square foot regional shopping center in Portland, Oregon,
for a total sales price of $1.3 billion, resulting in a gain on the sale of assets of $311.2 million. The
sales price was funded by a cash payment of $545.6 million and the assumption of the pro rata share of
the mortgage notes payable on the properties of $713.0 million. The Company used the cash proceeds
from the sale to pay down its line of credit and for general corporate purposes, which included funding
the ASR and Special Dividend (See ‘‘Other Events and Transactions’’ in Recent Developments).
On November 19, 2015, the Company sold Panorama Mall, a 312,000 square foot community
center in Panorama City, California, for $98.0 million, resulting in a gain on the sale of assets of
$73.7 million. The Company used the proceeds from the sale to pay down its line of credit and for
general corporate purposes.
On January 4, 2016, the Company announced that it had reached an agreement with Taubman
Centers, Inc. to form a 50/50 joint venture, to acquire Country Club Plaza, a 1,300,000 square foot
regional shopping center in Kansas City, Missouri for a total purchase price of $660.0 million. The
Company anticipates that it will fund its pro rata share of $330.0 million with borrowings under its line
of credit. The Company expects the purchase of Country Club Plaza, which is subject to usual and
customary closing conditions, will be completed in the first quarter of 2016.
On January 6, 2016, the Company sold a 40% ownership interest in Arrowhead Towne Center, a
1,197,000 square foot regional shopping center in Glendale, Arizona for $284.0 million. The sales price
was funded by a cash payment of $124.0 million and the assumption of the pro rata share of the
mortgage note payable on the property of $160.0 million. The Company used the cash proceeds from
the sale to pay down its line of credit and for general corporate purposes, which included funding the
Special Dividend (See ‘‘Other Events and Transactions’’ in Recent Developments).
On January 14, 2016, the Company formed a joint venture, whereby the Company sold a 49%
ownership interest in Deptford Mall, a 1,040,000 square foot regional shopping center in Deptford,
New Jersey; FlatIron Crossing, a 1,430,000 square foot regional shopping center in Broomfield,
Colorado; and Twenty Ninth Street, an 850,000 square foot regional shopping center in Boulder,
Colorado (the ‘‘MAC Heitman Portfolio’’) for $751.0 million. The sales price was funded by a cash
payment of $458.1 million and the assumption of a pro rata share of the mortgage note payable on the
properties of $292.9 million. The Company used the cash proceeds from the sale to pay down its line of
credit and for general corporate purposes.
Financing Activity:
On February 3, 2015, the Company’s joint venture in The Market at Estrella Falls replaced the
existing loan on the property with a new $26.5 million loan that bears interest at LIBOR plus 1.70%
and matures on February 5, 2020, including the exercise of a one-year extension option.
On February 19, 2015, the Company placed a $280.0 million loan on Vintage Faire Mall that bears
interest at an effective interest rate of 3.55% and matures on March 6, 2026.
On March 2, 2015, the Company paid off in full the loan on Lakewood Center, which resulted in a
gain of $2.2 million on the early extinguishment of debt as a result of writing off the related debt
premium. On May 12, 2015, the Company placed a new $410.0 million loan on the property that bears
interest at an effective rate of 4.15% and matures on June 1, 2026. On October 30, 2015, a 40%
interest in the loan was assumed by a third party in connection with the sale of a 40% ownership
interest in the PPR Portfolio (See ‘‘Acquisitions and Dispositions’’ in Recent Developments).
On March 3, 2015, the Company amended the loan on Fashion Outlets of Chicago. The amended
$200.0 million loan bears interest at LIBOR plus 1.50% and matures on March 31, 2020.
5
On October 5, 2015, the Company paid off in full the existing loan on Washington Square. On
October 29, 2015, the Company placed a new $550.0 million loan on the property that bears interest at
an effective rate of 3.65% and matures on November 1, 2022. On October 30, 2015, a 40% interest in
the loan was assumed by a third party in connection with the sale of a 40% ownership interest in the
PPR Portfolio (See ‘‘Acquisitions and Dispositions’’ in Recent Developments).
On October 23, 2015, the Company placed a $200.0 million loan on South Plains Mall that bears
interest at an effective rate of 4.22% and matures on November 6, 2025. On October 30, 2015, a 40%
interest in the loan was assumed by a third party in connection with the sale of a 40% ownership
interest in the PPR Portfolio (See ‘‘Acquisitions and Dispositions’’ in Recent Developments).
On October 28, 2015, the Company’s joint venture in The Shops at Atlas Park placed a
$57.8 million loan on the property that bears interest at LIBOR plus 2.25% and matures on
October 22, 2020, including two one-year extension options.
On October 30, 2015, the Company replaced the existing loan on Los Cerritos Center with a new
$525.0 million loan that bears interest at an effective rate of 4.00% and matures on November 1, 2027,
which resulted in a loss of $0.9 million on the early extinguishment of debt. Concurrently, a 40%
interest in the loan was assumed by a third party in connection with the sale of a 40% ownership
interest in the PPR Portfolio (See ‘‘Acquisitions and Dispositions’’ in Recent Developments).
On October 30, 2015, the Company obtained a $100.0 million term loan (‘‘PPR Term Loan’’) that
bears interest at LIBOR plus 1.20% and matures on October 31, 2022. Concurrently, a 40% interest in
the loan was assumed by a third party in connection with the sale of a 40% ownership interest in the
PPR Portfolio (See ‘‘Acquisitions and Dispositions’’ in Recent Developments).
On January 6, 2016, the Company replaced the existing loan on Arrowhead Towne Center with a
new $400.0 million loan that bears interest at an effective rate of 4.05% and matures on February 1,
2028. Concurrently, a 40% interest in the loan was assumed by a third party in connection with the sale
of a 40% ownership interest in the underlying property (See ‘‘Acquisitions and Dispositions’’ in Recent
Developments).
On January 14, 2016, the Company placed a $150.0 million loan on Twenty Ninth Street that bears
interest at an effective rate of 4.10% and matures on February 6, 2026. Concurrently, a 49% interest in
the loan was assumed by a third party in connection with the sale of a 49% ownership interest in the
MAC Heitman Portfolio (See ‘‘Acquisitions and Dispositions’’ in Recent Developments).
Redevelopment and Development Activity:
In February 2014, the Company’s joint venture in Broadway Plaza started construction on the
235,000 square foot expansion of the 761,000 square foot regional shopping center in Walnut Creek,
California. The joint venture completed a portion of the first phase of the project in November 2015
and expects the remaining portion of the first phase to be completed in the second quarter of 2016.
The second phase will be completed through Summer 2018. The total cost of the project is estimated
to be $270.0 million, with $135.0 million estimated to be the Company’s pro rata share. The Company
has funded $98.9 million of the total $197.8 million incurred by the joint venture as of December 31,
2015.
The Company is currently expanding Green Acres Mall, a 1,799,000 square foot regional center in
Valley Stream, New York to include a 335,000 square foot power center. The project started in July
2015 and is expected to be completed in late 2016. As of December 31, 2015, the Company has
incurred $47.7 million in costs and estimates that the total cost of the project to be approximately
$110.0 million.
6
The Company’s joint venture is proceeding with the development of Fashion Outlets of
Philadelphia, a redevelopment of the 850,000 square foot shopping center in Philadelphia, Pennsylvania.
The project is expected to be completed in 2018 and 2019. The total cost of the project is estimated to
be between $275.0 million and $335.0 million, with $137.5 million to $167.5 million estimated to be the
Company’s pro rata share. The Company has funded $30.6 million of the total $61.3 million incurred
by the joint venture as of December 31, 2015.
Other Transactions and Events:
On March 9, 2015, the Company received an unsolicited, conditional proposal from Simon
Property Group, Inc. (‘‘Simon’’) to acquire the Company. The Company’s Board of Directors, after
consulting with its financial, real estate and legal advisors, unanimously determined that the Simon
proposal substantially undervalued the Company and was not in the best interests of the Company and
its stockholders. On March 20, 2015, the Company received a revised, unsolicited proposal to acquire
the Company from Simon, which Simon described as its best and final proposal. The Company’s Board
of Directors carefully reviewed the revised proposal with the assistance of its financial, real estate and
legal advisors, and determined that the revised proposal continued to substantially undervalue the
Company and that pursuing the proposed transaction at that time was not in the best interests of the
Company and its stockholders.
On June 30, 2015, the Company conveyed Great Northern Mall, an 895,000 square foot regional
shopping center in Clay, New York, to the mortgage lender by a deed-in-lieu of foreclosure and was
discharged from the mortgage note payable. The mortgage note payable was a non-recourse loan. As a
result, the Company recognized a loss of $1.6 million on the extinguishment of debt.
On September 30, 2015, the Company’s Board of Directors authorized the repurchase of up to
$1.2 billion of the Company’s outstanding common shares over the period ending September 30, 2017,
as market conditions warrant. On November 12, 2015, the Company entered into an accelerated share
repurchase program (‘‘ASR’’) to repurchase $400.0 million of the Company’s common stock. In
accordance with the ASR, the Company made a prepayment of $400.0 million and received an initial
share delivery of 4,140,788 shares. On January 20, 2016, the ASR was completed and the Company
received an additional delivery of 970,609 shares. The average price of the 5,111,397 shares repurchased
under the ASR was $78.26 per share. The ASR was funded from proceeds in connection with the
financing and sale of the ownership interest in the PPR Portfolio (See ‘‘Acquisitions and Dispositions’’
and ‘‘Financing Activity’’ in Recent Developments).
On October 30, 2015, the Company declared two special dividends/distributions (‘‘Special
Dividend’’), each of $2.00 per share of common stock and per Operating Partnership Unit (‘‘OP
Unit’’). The first Special Dividend was paid on December 8, 2015 to stockholders and OP Unit holders
of record on November 12, 2015. The second Special Dividend was paid on January 6, 2016 to common
stockholders and OP Unit holders of record on November 12, 2015. The Special Dividends were
funded from proceeds in connection with the financing and sale of ownership interests in the PPR
Portfolio and Arrowhead Towne Center (See ‘‘Acquisitions and Dispositions’’ and ‘‘Financing Activity’’
in Recent Developments).
On November 1, 2015, the mortgage note payable on Flagstaff Mall, a 347,000 square foot regional
shopping center in Flagstaff, Arizona, went into maturity default. The mortgage note payable is a
non-recourse loan. The Company is negotiating with the loan servicer, which will likely result in a
transition of the property to the loan servicer or a receiver. Consequently, Flagstaff Mall has been
excluded from certain 2015 performance metrics and related discussions in this ‘‘Item 1. Business’’,
including major tenants, average base rents, cost of occupancy, lease expirations and anchors (See
‘‘Major Tenants’’, ‘‘Mall Stores and Freestanding Stores’’, ‘‘Cost of Occupancy’’, ‘‘Lease Expirations’’,
and ‘‘Anchors’’ below). In addition, Flagstaff Mall has been excluded from the Company’s list of
7
properties and related computations of GLA, occupancy and sales per square foot (See ‘‘Item 2.
Properties’’).
On February 17, 2016, the Company entered into an ASR to repurchase $400.0 million of the
Company’s common stock. In accordance with the ASR, the Company made a prepayment of
$400.0 million and received an initial share delivery of 4,222,193 shares. The Company expects to
complete the ASR on or before April 22, 2016. The ASR was funded from borrowings under the
Company’s line of credit, which had been recently paid down from the proceeds from the recently
completed financings and sale of ownership interests (See ‘‘Acquisitions and Dispositions’’ and
‘‘Financing Activity’’ in Recent Developments).
The Shopping Center Industry
General:
There are several types of retail shopping centers, which are differentiated primarily based on size
and marketing strategy. Regional shopping centers generally contain in excess of 400,000 square feet of
GLA and are typically anchored by two or more department or large retail stores (‘‘Anchors’’) and are
referred to as ‘‘Regional Shopping Centers’’ or ‘‘Malls.’’ Regional Shopping Centers also typically
contain numerous diversified retail stores (‘‘Mall Stores’’), most of which are national or regional
retailers typically located along corridors connecting the Anchors. ‘‘Strip centers’’, ‘‘urban villages’’ or
‘‘specialty centers’’ (‘‘Community/Power Shopping Centers’’) are retail shopping centers that are
designed to attract local or neighborhood customers and are typically anchored by one or more
supermarkets, discount department stores and/or drug stores. Community/Power Shopping Centers
typically contain 100,000 to 400,000 square feet of GLA. Outlet Centers generally contain a wide
variety of designer and manufacturer stores, often located in an open-air center, and typically range in
size from 200,000 to 850,000 square feet of GLA (‘‘Outlet Centers’’). In addition, freestanding retail
stores are located along the perimeter of the shopping centers (‘‘Freestanding Stores’’). Mall Stores and
Freestanding Stores over 10,000 square feet of GLA are also referred to as ‘‘Big Box.’’ Anchors, Mall
Stores, Freestanding Stores and other tenants typically contribute funds for the maintenance of the
common areas, property taxes, insurance, advertising and other expenditures related to the operation of
the shopping center.
Regional Shopping Centers:
A Regional Shopping Center draws from its trade area by offering a variety of fashion
merchandise, hard goods and services and entertainment, often in an enclosed, climate controlled
environment with convenient parking. Regional Shopping Centers provide an array of retail shops and
entertainment facilities and often serve as the town center and a gathering place for community,
charity, and promotional events.
Regional Shopping Centers have generally provided owners with relatively stable income despite
the cyclical nature of the retail business. This stability is due both to the diversity of tenants and to the
typical dominance of Regional Shopping Centers in their trade areas.
Regional Shopping Centers have different strategies with regard to price, merchandise offered and
tenant mix, and are generally tailored to meet the needs of their trade areas. Anchors are located along
common areas in a configuration designed to maximize consumer traffic for the benefit of the Mall
Stores. Mall GLA, which generally refers to GLA contiguous to the Anchors for tenants other than
Anchors, is leased to a wide variety of smaller retailers. Mall Stores typically account for the majority
of the revenues of a Regional Shopping Center.
8
Business of the Company
Strategy:
The Company has a long-term four-pronged business strategy that focuses on the acquisition,
leasing and management, redevelopment and development of Regional Shopping Centers.
Acquisitions. The Company principally focuses on well-located, quality Regional Shopping Centers
that can be dominant in their trade area and have strong revenue enhancement potential. In addition,
the Company pursues other opportunistic acquisitions of property that include retail and will
complement the Company’s portfolio such as Outlet Centers. The Company subsequently seeks to
improve operating performance and returns from these properties through leasing, management and
redevelopment. Since its initial public offering, the Company has acquired interests in shopping centers
nationwide. The Company believes that it is geographically well positioned to cultivate and maintain
ongoing relationships with potential sellers and financial institutions and to act quickly when acquisition
opportunities arise (See ‘‘Acquisitions and Dispositions’’ in Recent Developments).
Leasing and Management. The Company believes that the shopping center business requires
specialized skills across a broad array of disciplines for effective and profitable operations. For this
reason, the Company has developed a fully integrated real estate organization with in-house acquisition,
accounting, development, finance, information technology, leasing, legal, marketing, property
management and redevelopment expertise. In addition, the Company emphasizes a philosophy of
decentralized property management, leasing and marketing performed by on-site professionals. The
Company believes that this strategy results in the optimal operation, tenant mix and drawing power of
each Center, as well as the ability to quickly respond to changing competitive conditions of the Center’s
trade area.
The Company believes that on-site property managers can most effectively operate the Centers.
Each Center’s property manager is responsible for overseeing the operations, marketing, maintenance
and security functions at the Center. Property managers focus special attention on controlling operating
costs, a key element in the profitability of the Centers, and seek to develop strong relationships with
and be responsive to the needs of retailers.
The Company generally utilizes regionally located leasing managers to better understand the
market and the community in which a Center is located. The Company continually assesses and fine
tunes each Center’s tenant mix, identifies and replaces underperforming tenants and seeks to optimize
existing tenant sizes and configurations.
On a selective basis, the Company provides property management and leasing services for third
parties. The Company currently manages two regional shopping centers and three community centers
for third party owners on a fee basis.
Redevelopment. One of the major components of the Company’s growth strategy is its ability to
redevelop acquired properties. For this reason, the Company has built a staff of redevelopment
professionals who have primary responsibility for identifying redevelopment opportunities that they
believe will result in enhanced long-term financial returns and market position for the Centers. The
redevelopment professionals oversee the design and construction of the projects in addition to
obtaining required governmental approvals (See ‘‘Redevelopment and Development Activity’’ in Recent
Developments).
Development. The Company pursues ground-up development projects on a selective basis. The
Company has supplemented its strong acquisition, operations and redevelopment skills with its
ground-up development expertise to further increase growth opportunities (See ‘‘Redevelopment and
Development Activity’’ in Recent Developments).
9
The Centers:
As of December 31, 2015, the Centers primarily included 50 Regional Shopping Centers, excluding
Flagstaff Mall, and seven Community/Power Shopping Centers totaling approximately 55 million square
feet of GLA. These 57 Centers average approximately 903,000 square feet of GLA and range in size
from 3.5 million square feet of GLA at Tysons Corner Center to 185,000 square feet of GLA at
Boulevard Shops. As of December 31, 2015, excluding Flagstaff Mall, the Centers primarily included
204 Anchors totaling approximately 27.7 million square feet of GLA and approximately 5,800 Mall
Stores and Freestanding Stores totaling approximately 24.3 million square feet of GLA.
Competition:
Numerous owners, developers and managers of malls, shopping centers and other retail-oriented
real estate compete with the Company for the acquisition of properties and in attracting tenants or
Anchors to occupy space. There are eight other publicly traded mall companies, a number of publicly
traded shopping center companies and several large private mall companies in the United States, any of
which under certain circumstances could compete against the Company for an Anchor or a tenant. In
addition, these companies as well as other REITs, private real estate companies or investors compete
with the Company in terms of property acquisitions. This results in competition both for the acquisition
of properties or centers and for tenants or Anchors to occupy space. Competition for property
acquisitions may result in increased purchase prices and may adversely affect the Company’s ability to
make suitable property acquisitions on favorable terms. The existence of competing shopping centers
could have a material adverse impact on the Company’s ability to lease space and on the level of rents
that can be achieved. There is also increasing competition from other retail formats and technologies,
such as lifestyle centers, power centers, outlet centers, Internet shopping, home shopping networks,
catalogs, telemarketing and discount shopping clubs that could adversely affect the Company’s
revenues.
In making leasing decisions, the Company believes that retailers consider the following material
factors relating to a center: quality, design and location, including consumer demographics; rental rates;
type and quality of Anchors and retailers at the center; and management and operational experience
and strategy of the center. The Company believes it is able to compete effectively for retail tenants in
its local markets based on these criteria in light of the overall size, quality and diversity of its Centers.
Major Tenants:
The Centers, excluding Flagstaff Mall, derived approximately 75% of their total rents for the year
ended December 31, 2015 from Mall Stores and Freestanding Stores under 10,000 square feet, and Big
Box and Anchor tenants accounted for 25% of total rents for the year ended December 31, 2015. Total
rents as set forth in ‘‘Item 1. Business’’ include minimum rents and percentage rents.
10
The following retailers (including their subsidiaries) represent the 10 largest tenants in the Centers,
excluding Flagstaff Mall, based upon total rents in place as of December 31, 2015:
Tenant
Primary DBAs
L Brands, Inc.
. . . . . . . . . . . . . . . . . . Victoria’s Secret, Bath and Body
Works, PINK
Forever 21, Inc.
. . . . . . . . . . . . . . . . . Forever 21, XXI Forever, Love21
The Gap, Inc.
. . . . . . . . . . . . . . . . . . Athleta, Banana Republic, Gap, Gap
Kids, Old Navy and others
Foot Locker, Inc. . . . . . . . . . . . . . . . . Champs Sports, Foot Locker, Kids
Foot Locker, Lady Foot Locker, Foot
Action, House of Hoops and others
Sears Holdings Corporation . . . . . . . .
Sears
Signet Jewelers Limited . . . . . . . . . . . Kay Jewelers, Zales, Piercing Pagoda
and others
American Eagle Outfitters, Inc.
. . . . . American Eagle Outfitters, aerie
Ascena Retail Group, Inc.
. . . . . . . . . Ann Taylor, Loft, Lou & Grey, Lane
Bryant, Justice, Dress Barn and others
Express, Inc.
. . . . . . . . . . . . . . . . . . . Express, Express / Express Men
Dick’s Sporting Goods, Inc.
. . . . . . . . Dick’s Sporting Goods, Chelsea
Collective
Number of
Locations
in the
Portfolio
98
35
60
99
26
106
37
83
30
14
% of Total
Rents
2.8%
2.5%
2.1%
2.0%
1.8%
1.7%
1.2%
1.2%
1.1%
1.1%
Mall Stores and Freestanding Stores:
Mall Store and Freestanding Store leases generally provide for tenants to pay rent comprised of a
base (or ‘‘minimum’’) rent and a percentage rent based on sales. In some cases, tenants pay only
minimum rent, and in other cases, tenants pay only percentage rent. The Company generally enters
into leases for Mall Stores and Freestanding Stores that also require tenants to pay a stated amount for
operating expenses, generally excluding property taxes, regardless of the expenses the Company actually
incurs at any Center. However, certain leases for Mall Stores and Freestanding Stores contain
provisions that only require tenants to pay their pro rata share of maintenance of the common areas,
property taxes, insurance, advertising and other expenditures related to the operations of the Center.
Tenant space of 10,000 square feet and under in the Company’s portfolio at December 31, 2015,
excluding Flagstaff Mall, comprises approximately 76% of all Mall Store and Freestanding Store space.
The Company uses tenant spaces of 10,000 square feet and under for comparing rental rate activity
because this space is more consistent in terms of shape and configuration and, as such, the Company is
able to provide a meaningful comparison of rental rate activity for this space. Mall Store and
Freestanding Store space greater than 10,000 square feet is inconsistent in size and configuration
throughout the Company’s portfolio and as a result does not lend itself to a meaningful comparison of
rental rate activity with the Company’s other space. Most of the non-Anchor space over 10,000 square
feet is not physically connected to the mall, does not share the same common area amenities and does
not benefit from the foot traffic in the mall. As a result, space greater than 10,000 square feet has a
unique rent structure that is inconsistent with mall space under 10,000 square feet.
11
The following tables set forth the average base rent per square foot for the Centers, as of
December 31 for each of the past five years:
Mall Stores and Freestanding Stores under 10,000 square feet:
For the Years Ended December 31,
Consolidated Centers:
2015 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2014 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2013 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2012 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2011 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Unconsolidated Joint Venture Centers (at the
Company’s pro rata share):
2015 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2014 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2013 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2012 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2011 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Big Box and Anchors:
Avg. Base
Rent Per
Sq. Ft.(1)(2)
Avg. Base Rent
Per Sq. Ft. on
Leases Executed
During the Year(2)(3)
Avg. Base Rent
Per Sq. Ft.
on Leases Expiring
During the Year(2)(4)
$52.64
$49.68
$44.51
$40.98
$38.80
$60.74
$63.78
$62.47
$55.64
$53.72
$53.99
$49.55
$45.06
$44.01
$38.35
$80.18
$82.47
$63.44
$55.72
$50.00
$49.02
$41.20
$40.00
$38.00
$35.84
$60.85
$64.59
$48.43
$48.74
$38.98
Avg. Base Rent
For the Years Ended December 31,
Consolidated Centers:
2015 . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2014 . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2013 . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2012 . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2011 . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Unconsolidated Joint Venture Centers (at
the Company’s pro rata share):
2015 . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2014 . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2013 . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2012 . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2011 . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Avg. Base Rent Number of Per Sq. Ft. on Number of
Per Sq. Ft. on
Leases
Avg. Base
Rent Per
Sq. Ft.(1)(2)
Leases Executed Executed
During
the Year
During the
Year(2)(3)
Leases
Expiring
During the
Year(2)(4)
Leases
Expiring
During
the Year
$12.72
$11.26
$10.94
$ 9.34
$ 8.42
$14.48
$18.51
$13.36
$12.52
$12.50
$19.87
$18.28
$14.61
$15.54
$10.87
$33.00
$33.62
$37.45
$23.25
$21.43
19
22
29
21
21
14
11
22
21
15
$ 8.96
$15.16
$14.08
$ 8.85
$ 6.71
$ 9.30
$27.27
$24.58
$ 8.88
$14.19
14
14
21
22
14
8
6
10
10
7
(1) Average base rent per square foot is based on spaces occupied as of December 31 for each of the
Centers and gives effect to the terms of each lease in effect, as of such date, including any
concessions, abatements and other adjustments or allowances that have been granted to the
tenants.
(2) Centers under development and redevelopment are excluded from average base rents. As a result,
the leases for Broadway Plaza, Fashion Outlets of Niagara Falls USA, Fashion Outlets of
Philadelphia, Paradise Valley Mall, SouthPark Mall and Westside Pavilion were excluded for the
years ended December 31, 2015 and 2014. The leases for Paradise Valley Mall were excluded for
12
the year ended December 31, 2013. The leases for The Shops at Atlas Park and Southridge Center
were excluded for the years ended December 31, 2012 and 2011.
Flagstaff Mall is excluded for the year ended December 31, 2015. In addition, the leases for
Rotterdam Square, which was sold on January 15, 2014, were excluded for the year ended
December 31, 2013. On June 30, 2015, Great Northern Mall was conveyed to the mortgage lender
by a deed-in-lieu of foreclosure. Consequently, Great Northern Mall is excluded for the year ended
December 31, 2014. The leases for Valley View Center, which was sold by a court-appointed
receiver in 2012, were excluded for the year ended December 31, 2011.
(3) The average base rent per square foot on leases executed during the year represents the actual
rent paid on a per square foot basis during the first twelve months of the lease.
(4) The average base rent per square foot on leases expiring during the year represents the actual rent
to be paid on a per square foot basis during the final twelve months of the lease.
Cost of Occupancy:
A major factor contributing to tenant profitability is cost of occupancy, which consists of tenant
occupancy costs charged by the Company. Tenant expenses included in this calculation are minimum
rents, percentage rents and recoverable expenditures, which consist primarily of property operating
expenses, real estate taxes and repair and maintenance expenditures. These tenant charges are
collectively referred to as tenant occupancy costs. These tenant occupancy costs are compared to tenant
sales. A low cost of occupancy percentage shows more potential capacity for the Company to increase
rents at the time of lease renewal than a high cost of occupancy percentage. The following table
summarizes occupancy costs for Mall Store and Freestanding Store tenants in the Centers as a
percentage of total Mall Store sales for the last five years:
Consolidated Centers:
Minimum rents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Percentage rents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Expense recoveries(4) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Unconsolidated Joint Venture Centers:
Minimum rents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Percentage rents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Expense recoveries(4) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
For the Years Ended December 31,
2015(1)
2014(2)
2013(3)
2012
2011
9.0% 8.7% 8.4% 8.1% 8.2%
0.4% 0.4% 0.4% 0.4% 0.5%
4.5% 4.3% 4.5% 4.2% 4.1%
13.9% 13.4% 13.3% 12.7% 12.8%
8.1% 8.7% 8.8% 8.9% 9.1%
0.4% 0.4% 0.4% 0.4% 0.4%
4.0% 4.5% 4.0% 3.9% 3.9%
12.5% 13.6% 13.2% 13.2% 13.4%
(1) Flagstaff Mall is excluded for the year ended December 31, 2015.
(2) On June 30, 2015, Great Northern Mall was conveyed to the mortgage lender by a deed-in-lieu of
foreclosure. Consequently, Great Northern Mall is excluded for the year ended December 31,
2014.
(3) Rotterdam Square was sold on January 15, 2014 and is excluded for the year ended December 31,
2013.
(4) Represents real estate tax and common area maintenance charges.
13
Lease Expirations:
The following tables show scheduled lease expirations for Centers owned as of December 31, 2015,
excluding Flagstaff Mall, for the next ten years, assuming that none of the tenants exercise renewal
options:
Mall Stores and Freestanding Stores under 10,000 square feet:
Year Ending December 31,
Consolidated Centers:
2016 . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2017 . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2018 . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2019 . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2020 . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2021 . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2022 . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2023 . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2024 . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2025 . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Unconsolidated Joint Venture Centers (at
the Company’s pro rata share):
2016 . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2017 . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2018 . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2019 . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2020 . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2021 . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2022 . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2023 . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2024 . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2025 . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
% of Base Rent
Represented
by Expiring
Leases(1)
10.49%
12.62%
11.46%
10.46%
9.52%
8.04%
5.88%
6.66%
9.28%
8.69%
10.90%
11.03%
11.34%
9.13%
9.64%
8.80%
5.77%
8.18%
7.64%
9.01%
% of Total Ending Base
Leased GLA
Rent per
Number of Approximate Represented Square Foot
of Expiring
GLA of Leases by Expiring
Leases(1)
Leases(1)
Leases
Expiring
Expiring(1)
731,849
824,590
772,130
702,569
611,689
536,588
390,142
426,900
539,346
457,029
185,299
218,004
181,029
139,910
167,101
159,557
105,232
159,188
129,629
147,929
11.34% $48.78
12.78% $52.12
11.97% $50.53
10.89% $50.72
9.48% $52.97
8.32% $50.99
6.05% $51.28
6.62% $53.14
8.36% $58.58
7.08% $64.77
10.75% $61.93
12.64% $53.28
10.50% $65.98
8.11% $68.74
9.69% $60.73
9.25% $58.10
6.10% $57.76
9.23% $54.14
7.52% $62.11
8.58% $64.11
393
357
345
303
280
227
174
185
194
186
170
143
147
123
119
116
82
86
80
86
14
Big Boxes and Anchors:
Year Ending December 31,
Consolidated Centers:
2016 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2017 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2018 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2019 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2020 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2021 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2022 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2023 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2024 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2025 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Unconsolidated Joint Venture Centers (at the
Company’s pro rata share):
2016 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2017 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2018 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2019 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2020 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2021 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2022 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2023 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2024 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2025 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Number of
Leases
Expiring
Approximate
GLA of
Leases
Expiring(1)
Rent per
Represented Square Foot Represented
by Expiring
of Expiring
by Expiring
Leases(1)
Leases(1)
Leases(1)
Rent
Ending Base % of Base
% of Total
Leased
GLA
8
34
21
23
25
30
19
23
26
27
1
15
14
10
19
13
6
8
14
17
170,312
1,056,393
870,474
954,599
890,746
1,271,153
866,638
709,662
924,534
1,218,896
30,000
511,735
242,725
120,855
846,975
214,310
74,051
172,496
183,173
746,305
1.32% $19.12
8.16% $12.39
6.72% $12.42
7.37% $ 9.27
6.88% $10.15
9.82% $ 9.67
6.69% $14.82
5.48% $13.82
7.14% $19.61
9.41% $19.25
0.75% $28.00
12.82% $ 7.62
6.08% $ 9.72
3.03% $31.63
21.22% $11.01
5.37% $15.52
1.86% $28.22
4.32% $20.75
4.59% $34.73
18.70% $13.62
1.83%
7.35%
6.06%
4.96%
5.07%
6.90%
7.21%
5.50%
10.17%
13.16%
1.43%
6.65%
4.02%
6.52%
15.89%
5.67%
3.56%
6.10%
10.84%
17.32%
(1) The ending base rent per square foot on leases expiring during the period represents the final year
minimum rent, on a cash basis, for tenant leases expiring during the year. Currently, 65% of leases
have provisions for future consumer price index increases that are not reflected in ending base
rent. The leases for Centers currently under development and redevelopment are excluded from
this table.
Anchors:
Anchors have traditionally been a major factor in the public’s identification with Regional
Shopping Centers. Anchors are generally department stores whose merchandise appeals to a broad
range of shoppers. Although the Centers receive a smaller percentage of their operating income from
Anchors than from Mall Stores and Freestanding Stores, strong Anchors play an important part in
maintaining customer traffic and making the Centers desirable locations for Mall Store and
Freestanding Store tenants.
Anchors either own their stores, the land under them and in some cases adjacent parking areas, or
enter into long-term leases with an owner at rates that are lower than the rents charged to tenants of
Mall Stores and Freestanding Stores. Each Anchor that owns its own store and certain Anchors that
lease their stores enter into reciprocal easement agreements with the owner of the Center covering,
among other things, operational matters, initial construction and future expansion.
15
Anchors accounted for approximately 8.5% of the Company’s total rents for the year ended
December 31, 2015, excluding Flagstaff Mall.
The following table identifies each Anchor, each parent company that owns multiple Anchors and
the number of square feet owned or leased by each such Anchor or parent company in the Company’s
portfolio, excluding Flagstaff Mall, at December 31, 2015.
Name
Macy’s Inc.
Macy’s . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Bloomingdale’s . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
JCPenney(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Sears . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Dillard’s . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Nordstrom . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Target(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Dick’s Sporting Goods(3)
. . . . . . . . . . . . . . . . . . . . . . . . . . .
Forever 21 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
The Bon-Ton Stores, Inc.
Younkers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Bon-Ton, The . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Herberger’s . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Kohl’s . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Hudson Bay Company
Lord & Taylor . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Saks Fifth Avenue . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Home Depot
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Costco . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Burlington Coat Factory(4)
. . . . . . . . . . . . . . . . . . . . . . . . . .
Neiman Marcus . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Von Maur . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Sports Authority . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Walmart
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Century 21 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
La Curacao . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Boscov’s . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Belk . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Primark(5) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
BJ’s Wholesale Club . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Lowe’s . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Mercado de los Cielos
. . . . . . . . . . . . . . . . . . . . . . . . . . . . .
L.L. Bean . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Best Buy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Des Moines Area Community College . . . . . . . . . . . . . . . . . . .
Barneys New York(6) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Bealls . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Vacant Anchors(7) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Number of
Anchor
Stores
Total GLA
GLA Owned GLA Leased Occupied by
by Anchor
by Anchor
Anchor
41
2
43
28
26
14
13
7
13
7
3
1
1
5
5
3
1
4
3
2
3
2
2
4
1
2
1
1
2
2
1
1
1
1
1
1
1
1
2
5,013,000
—
5,013,000
1,744,000
926,000
2,205,000
739,000
640,000
—
155,000
—
—
188,000
188,000
89,000
121,000
—
121,000
—
—
187,000
—
187,000
—
—
—
—
—
—
—
—
—
66,000
64,000
—
—
—
2,306,000
355,000
2,661,000
2,253,000
2,868,000
257,000
1,477,000
273,000
839,000
574,000
317,000
71,000
—
388,000
356,000
199,000
92,000
291,000
395,000
321,000
127,000
188,000
—
177,000
173,000
171,000
165,000
161,000
139,000
137,000
123,000
114,000
78,000
75,000
—
—
60,000
40,000
200,000
7,319,000
355,000
7,674,000
3,997,000
3,794,000
2,462,000
2,216,000
913,000
839,000
729,000
317,000
71,000
188,000
576,000
445,000
320,000
92,000
412,000
395,000
321,000
314,000
188,000
187,000
177,000
173,000
171,000
165,000
161,000
139,000
137,000
123,000
114,000
78,000
75,000
66,000
64,000
60,000
40,000
200,000
Anchors at Centers not owned by the Company(8):
Forever 21 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Kohl’s . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Sports Authority . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2
1
1
—
—
—
154,000
83,000
41,000
154,000
83,000
41,000
Total
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
204
12,324,000
15,359,000
27,683,000
200
12,324,000
15,081,000
27,405,000
(1)
JCPenney plans to open a new store at Inland Center in Fall 2016.
(2) Target closed its store at Promenade at Casa Grande in January 2016.
(3) Dick’s Sporting Goods plans to open a new store at The Oaks in Fall 2016.
16
(4) Burlington Coat Factory plans to open a store at The Market at Estrella Falls in Fall 2016.
(5)
Primark plans to open stores at Danbury Fair Mall and Freehold Raceway Mall in Summer 2016.
(6) Barneys New York plans to close its store at Scottsdale Fashion Square in Spring 2016.
(7) The Company is seeking replacement tenants and/or contemplating redevelopment opportunities for these vacant sites. The
Company continues to collect rent under the terms of an agreement regarding one of these two vacant Anchor locations.
(8) The Company owns a portfolio of eight stores located at shopping centers not owned by the Company. Of these eight
stores, two have been leased to Forever 21, one has been leased to Kohl’s, one has been leased to Sports Authority and
four have been leased for non-Anchor usage.
Environmental Matters
Each of the Centers has been subjected to an Environmental Site Assessment—Phase I (which
involves review of publicly available information and general property inspections, but does not involve
soil sampling or ground water analysis) completed by an environmental consultant.
Based on these assessments, and on other information, the Company is aware of the following
environmental issues, which may result in potential environmental liability and cause the Company to
incur costs in responding to these liabilities or in other costs associated with future investigation or
remediation:
(cid:127) Asbestos. The Company has conducted asbestos-containing materials (‘‘ACM’’) surveys at various
locations within the Centers. The surveys indicate that ACMs are present or suspected in certain
areas, primarily vinyl floor tiles, mastics, roofing materials, drywall tape and joint compounds.
The identified ACMs are generally non-friable, in good condition, and possess low probabilities
for disturbance. At certain Centers where ACMs are present or suspected, however, some
ACMs have been or may be classified as ‘‘friable,’’ and ultimately may require removal under
certain conditions. The Company has developed and implemented an operations and
maintenance (‘‘O&M’’) plan to manage ACMs in place.
(cid:127) Underground Storage Tanks. Underground storage tanks (‘‘USTs’’) are or were present at certain
Centers, often in connection with tenant operations at gasoline stations or automotive tire,
battery and accessory service centers located at such Centers. USTs also may be or have been
present at properties neighboring certain Centers. Some of these tanks have either leaked or are
suspected to have leaked. Where leakage has occurred, investigation, remediation, and
monitoring costs may be incurred by the Company if responsible current or former tenants, or
other responsible parties, are unavailable to pay such costs.
(cid:127) Chlorinated Hydrocarbons. The presence of chlorinated hydrocarbons such as perchloroethylene
(‘‘PCE’’) and its degradation byproducts have been detected at certain Centers, often in
connection with tenant dry cleaning operations. Where PCE has been detected, the Company
may incur investigation, remediation and monitoring costs if responsible current or former
tenants, or other responsible parties, are unavailable to pay such costs.
See ‘‘Item 1A. Risk Factors—Possible environmental liabilities could adversely affect us.’’
Insurance
Each of the Centers has comprehensive liability, fire, extended coverage and rental loss insurance
with insured limits customarily carried for similar properties. The Company does not insure certain
types of losses (such as losses from wars), because they are either uninsurable or not economically
insurable. In addition, while the Company or the relevant joint venture, as applicable, carry specific
earthquake insurance on the Centers located in California, the policies are subject to a deductible
equal to 5% of the total insured value of each Center, a $100,000 per occurrence minimum and a
combined annual aggregate loss limit of $150 million on these Centers. The Company or the relevant
17
joint venture, as applicable, carry specific earthquake insurance on the Centers located in the Pacific
Northwest and in the New Madrid Seismic Zone. However, the policies are subject to a deductible
equal to 2% of the total insured value of each Center, a $50,000 per occurrence minimum and a
combined annual aggregate loss limit of $200 million on these Centers. While the Company or the
relevant joint venture also carries standalone terrorism insurance on the Centers, the policies are
subject to a $50,000 deductible and a combined annual aggregate loss limit of $1 billion. Each Center
has environmental insurance covering eligible third-party losses, remediation and non-owned disposal
sites, subject to a $100,000 deductible and a $50 million three-year aggregate loss limit, with the
exception of one Center, which has a $5 million ten-year aggregate loss limit. Some environmental
losses are not covered by this insurance because they are uninsurable or not economically insurable.
Furthermore, the Company carries title insurance on substantially all of the Centers for generally less
than their full value.
Qualification as a Real Estate Investment Trust
The Company elected to be taxed as a REIT under the Internal Revenue Code of 1986, as
amended (the ‘‘Code’’), commencing with its first taxable year ended December 31, 1994, and intends
to conduct its operations so as to continue to qualify as a REIT under the Code. As a REIT, the
Company generally will not be subject to federal and state income taxes on its net taxable income that
it currently distributes to stockholders. Qualification and taxation as a REIT depends on the
Company’s ability to meet certain dividend distribution tests, share ownership requirements and various
qualification tests prescribed in the Code.
Supplemental Tax Disclosures—Updates to REIT Rules
The ‘‘Protecting Americans from Tax Hikes Act of 2015’’ (the ‘‘PATH Act’’) was enacted on
December 18, 2015 and contains several provisions pertaining to REIT qualification and taxation, which
are briefly summarized below:
(cid:127) For taxable years beginning before January 1, 2018, no more than 25% of the value of the
Company’s assets may consist of stock or securities of one or more TRSs. For taxable years
beginning after December 31, 2017, the Act reduces this limit to 20%.
(cid:127) For purposes of the REIT asset tests, the PATH Act provides that debt instruments issued by
publicly offered REITs will constitute ‘‘real estate assets.’’ However, unless such a debt
instrument is secured by a mortgage or otherwise would have qualified as a real estate asset
under prior law, (i) interest income and gain from such a debt instrument is not qualifying
income for purposes of the 75% gross income test and (ii) all such debt instruments may
represent no more than 25% of the value of the Company’s total assets.
(cid:127) For taxable years beginning after December 31, 2015, certain obligations secured by a mortgage
on both real property and personal property will be treated as a qualifying real estate asset and
give rise to qualifying income for purposes of the 75% gross income test if the fair market value
of such personal property does not exceed 15% of the total fair market value of all such
property.
(cid:127) A 100% excise tax is imposed on ‘‘redetermined TRS service income,’’ which is income of a
TRS attributable to services provided to, or on behalf of its associated REIT and which would
otherwise be increased on distribution, apportionment, or allocation under Section 482 of the
Code.
(cid:127) For distributions made in taxable years beginning after December 31, 2014, the preferential
dividend rules no longer apply to the Company.
18
(cid:127) Additional exceptions to the rules under the Foreign Investment in Real Property Act
(‘‘FIRPTA’’) were introduced for non-U.S. persons that constitute ‘‘qualified shareholders’’
(within the meaning of Section 897(k)(3) of the Code) or ‘‘qualified foreign pension funds’’
(within the meaning of Section 897(l)(2) of the Code).
(cid:127) After February 16, 2016, the FIRPTA withholding rate under Section 1445 of the Code for
dispositions of U.S. real property interests is increased from 10% to 15%.
(cid:127) The PATH Act increases from 5% to 10% the maximum stock ownership of the REIT that a
non-U.S. shareholder may have held to avail itself of the FIRPTA exception for shares regularly
traded on an established securities market.
In addition, the IRS recently issued guidance delaying the imposition of withholding under FATCA
to the gross proceeds from a disposition of property that can produce U.S. source interest or dividends.
Such withholding will apply only to dispositions occurring after December 31, 2018.
Employees
As of December 31, 2015, the Company had approximately 997 employees, of which
approximately 976 were full-time. The Company believes that relations with its employees are good.
Seasonality
For a discussion of the extent to which the Company’s business may be seasonal, see ‘‘Item 7.
Management’s Discussion and Analysis of Financial Condition and Results of Operations—
Management’s Overview and Summary—Seasonality.’’
Available Information; Website Disclosure; Corporate Governance Documents
The Company’s corporate website address is www.macerich.com. The Company makes available
free-of-charge through this website its reports on Forms 10-K, 10-Q and 8-K and all amendments
thereto, as soon as reasonably practicable after the reports have been filed with, or furnished to, the
SEC. These reports are available under the heading ‘‘Investors—Financial Information—SEC Filings’’,
through a free hyperlink to a third-party service. Information provided on our website is not
incorporated by reference into this Form 10-K.
The following documents relating to Corporate Governance are available on the Company’s
website at www.macerich.com under ‘‘Investors—Corporate Governance’’:
Guidelines on Corporate Governance
Code of Business Conduct and Ethics
Code of Ethics for CEO and Senior Financial Officers
Audit Committee Charter
Compensation Committee Charter
Executive Committee Charter
Nominating and Corporate Governance Committee Charter
You may also request copies of any of these documents by writing to:
Attention: Corporate Secretary
The Macerich Company
401 Wilshire Blvd., Suite 700
Santa Monica, CA 90401
19
ITEM 1A. RISK FACTORS
The following factors could cause our actual results to differ materially from those contained in
forward-looking statements made in this Annual Report on Form 10-K and presented elsewhere by our
management from time to time. This list should not be considered to be a complete statement of all
potential risks or uncertainties as it does not describe additional risks of which we are not presently aware or
that we do not currently consider material. We may update our risk factors from time to time in our future
periodic reports. Any of these factors may have a material adverse effect on our business, financial
condition, operating results and cash flows. For purposes of this ‘‘Risk Factor’’ section, Centers wholly
owned by us are referred to as ‘‘Wholly Owned Centers’’ and Centers that are partly but not wholly owned
by us are referred to as ‘‘Joint Venture Centers.’’
RISKS RELATED TO OUR BUSINESS AND PROPERTIES
We invest primarily in shopping centers, which are subject to a number of significant risks that are beyond
our control.
Real property investments are subject to varying degrees of risk that may affect the ability of our
Centers to generate sufficient revenues to meet operating and other expenses, including debt service,
lease payments, capital expenditures and tenant improvements, and to make distributions to us and our
stockholders. A number of factors may decrease the income generated by the Centers, including:
(cid:127) the national economic climate;
(cid:127) the regional and local economy (which may be negatively impacted by rising unemployment,
declining real estate values, increased foreclosures, higher taxes, plant closings, industry
slowdowns, union activity, adverse weather conditions, natural disasters and other factors);
(cid:127) local real estate conditions (such as an oversupply of, or a reduction in demand for, retail space
or retail goods, decreases in rental rates, declining real estate values and the availability and
creditworthiness of current and prospective tenants);
(cid:127) decreased levels of consumer spending, consumer confidence, and seasonal spending (especially
during the holiday season when many retailers generate a disproportionate amount of their
annual sales);
(cid:127) increasing use by customers of e-commerce and online store sites and the impact of internet
sales on the demand for retail space;
(cid:127) negative perceptions by retailers or shoppers of the safety, convenience and attractiveness of a
Center;
(cid:127) acts of violence, including terrorist activities; and
(cid:127) increased costs of maintenance, insurance and operations (including real estate taxes).
Income from shopping center properties and shopping center values are also affected by applicable
laws and regulations, including tax, environmental, safety and zoning laws.
A significant percentage of our Centers are geographically concentrated and, as a result, are sensitive to local
economic and real estate conditions.
A significant percentage of our Centers are located in California and Arizona. Nine Centers in the
aggregate are located in New York, New Jersey and Connecticut. To the extent that weak economic or
real estate conditions or other factors affect California, Arizona, New York, New Jersey or Connecticut
(or their respective regions) more severely than other areas of the country, our financial performance
could be negatively impacted.
20
We are in a competitive business.
Numerous owners, developers and managers of malls, shopping centers and other retail-oriented
real estate compete with us for the acquisition of properties and in attracting tenants or Anchors to
occupy space. There are eight other publicly traded mall companies, a number of publicly traded
shopping center companies and several large private mall companies in the United States, any of which
under certain circumstances could compete against us for an Anchor or a tenant. In addition, these
companies as well as other REITs, private real estate companies or investors compete with us in terms
of property acquisitions. This results in competition both for the acquisition of properties or centers
and for tenants or Anchors to occupy space. Competition for property acquisitions may result in
increased purchase prices and may adversely affect our ability to make suitable property acquisitions on
favorable terms. The existence of competing shopping centers could have a material adverse impact on
our ability to lease space and on the level of rents that can be achieved. There is also increasing
competition from other retail formats and technologies, such as lifestyle centers, power centers, outlet
centers, Internet shopping, home shopping networks, catalogs, telemarketing and discount shopping
clubs that could adversely affect our revenues.
We may be unable to renew leases, lease vacant space or re-let space as leases expire on favorable terms or at
all, which could adversely affect our financial condition and results of operations.
There are no assurances that our leases will be renewed or that vacant space in our Centers will
be re-let at net effective rental rates equal to or above the current average net effective rental rates or
that substantial rent abatements, tenant improvements, early termination rights or below-market
renewal options will not be offered to attract new tenants or retain existing tenants. If the rental rates
at our Centers decrease, if our existing tenants do not renew their leases or if we do not re-let a
significant portion of our available space and space for which leases will expire, our financial condition
and results of operations could be adversely affected.
If Anchors or other significant tenants experience a downturn in their business, close or sell stores or declare
bankruptcy, our financial condition and results of operations could be adversely affected.
Our financial condition and results of operations could be adversely affected if a downturn in the
business of, or the bankruptcy or insolvency of, an Anchor or other significant tenant leads them to
close retail stores or terminate their leases after seeking protection under the bankruptcy laws from
their creditors, including us as lessor. In recent years a number of companies in the retail industry,
including some of our tenants, have declared bankruptcy or have gone out of business. We may be
unable to re-let stores vacated as a result of voluntary closures or the bankruptcy of a tenant.
Furthermore, certain department stores and other national retailers have experienced, and may
continue to experience, decreases in customer traffic in their retail stores, increased competition from
alternative retail options such as those accessible via the Internet and other forms of pressure on their
business models. If the store sales of retailers operating at our Centers decline significantly due to
adverse economic conditions or for any other reason, tenants might be unable to pay their minimum
rents or expense recovery charges. In the event of a default by a lessee, the affected Center may
experience delays and costs in enforcing its rights as lessor.
In addition, Anchors and/or tenants at one or more Centers might terminate their leases as a
result of mergers, acquisitions, consolidations or dispositions in the retail industry. The sale of an
Anchor or store to a less desirable retailer may reduce occupancy levels, customer traffic and rental
income. Depending on economic conditions, there is also a risk that Anchors or other significant
tenants may sell stores operating in our Centers or consolidate duplicate or geographically overlapping
store locations. Store closures by an Anchor and/or a significant number of tenants may allow other
Anchors and/or certain other tenants to terminate their leases, receive reduced rent and/or cease
operating their stores at the Center or otherwise adversely affect occupancy at the Center.
21
Our real estate acquisition, development and redevelopment strategies may not be successful.
Our historical growth in revenues, net income and funds from operations has been in part tied to
the acquisition, development and redevelopment of shopping centers. Many factors, including the
availability and cost of capital, our total amount of debt outstanding, our ability to obtain financing on
attractive terms, if at all, interest rates and the availability of attractive acquisition targets, among
others, will affect our ability to acquire, develop and redevelop additional properties in the future. We
may not be successful in pursuing acquisition opportunities, and newly acquired properties may not
perform as well as expected. Expenses arising from our efforts to complete acquisitions, develop and
redevelop properties or increase our market penetration may have a material adverse effect on our
business, financial condition and results of operations. We face competition for acquisitions primarily
from other REITs, as well as from private real estate companies or investors. Some of our competitors
have greater financial and other resources. Increased competition for shopping center acquisitions may
result in increased purchase prices and may impact adversely our ability to acquire additional properties
on favorable terms. We cannot guarantee that we will be able to implement our growth strategy
successfully or manage our expanded operations effectively and profitably.
We may not be able to achieve the anticipated financial and operating results from newly acquired
assets. Some of the factors that could affect anticipated results are:
(cid:127) our ability to integrate and manage new properties, including increasing occupancy rates and
rents at such properties;
(cid:127) the disposal of non-core assets within an expected time frame; and
(cid:127) our ability to raise long-term financing to implement a capital structure at a cost of capital
consistent with our business strategy.
Our business strategy also includes the selective development and construction of retail properties.
Any development, redevelopment and construction activities that we may undertake will be subject to
the risks of real estate development, including lack of financing, construction delays, environmental
requirements, budget overruns, sunk costs and lease-up. Furthermore, occupancy rates and rents at a
newly completed property may not be sufficient to make the property profitable. Real estate
development activities are also subject to risks relating to the inability to obtain, or delays in obtaining,
all necessary zoning, land-use, building, and occupancy and other required governmental permits and
authorizations. If any of the above events occur, our ability to pay dividends to our stockholders and
service our indebtedness could be adversely affected.
Real estate investments are relatively illiquid and we may be unable to sell properties at the time we desire and
on favorable terms.
Investments in real estate are relatively illiquid, which limits our ability to adjust our portfolio in
response to changes in economic, market or other conditions. Moreover, there are some limitations
under federal income tax laws applicable to REITs that limit our ability to sell assets. In addition,
because our properties are generally mortgaged to secure our debts, we may not be able to obtain a
release of a lien on a mortgaged property without the payment of the associated debt and/or a
substantial prepayment penalty, which restricts our ability to dispose of a property, even though the sale
might otherwise be desirable. Furthermore, the number of prospective buyers interested in purchasing
shopping centers is limited. Therefore, if we want to sell one or more of our Centers, we may not be
able to dispose of it in the desired time period and may receive less consideration than we originally
invested in the Center.
22
Our success depends, in part, on our ability to attract and retain talented employees, and the loss of any one
of our key personnel could adversely impact our business.
The success of our business depends, in part, on the leadership and performance of our executive
management team and key employees, and our ability to attract, retain and motivate talented
employees could significantly impact our future performance. Competition for these individuals is
intense, and we cannot assure you that we will retain our executive management team and key
employees or that we will be able to attract and retain other highly qualified individuals for these
positions in the future. Losing any one or more of these persons could have a material adverse effect
on our results of operations, financial condition and cash flows.
Possible environmental liabilities could adversely affect us.
Under various federal, state and local environmental laws, ordinances and regulations, a current or
previous owner or operator of real property may be liable for the costs of removal or remediation of
hazardous or toxic substances on, under or in that real property. These laws often impose liability
whether or not the owner or operator knew of, or was responsible for, the presence of hazardous or
toxic substances. The costs of investigation, removal or remediation of hazardous or toxic substances
may be substantial. In addition, the presence of hazardous or toxic substances, or the failure to remedy
environmental hazards properly, may adversely affect the owner’s or operator’s ability to sell or rent
affected real property or to borrow money using affected real property as collateral.
Persons or entities that arrange for the disposal or treatment of hazardous or toxic substances may
also be liable for the costs of removal or remediation of hazardous or toxic substances at the disposal
or treatment facility, whether or not that facility is owned or operated by the person or entity arranging
for the disposal or treatment of hazardous or toxic substances. Laws exist that impose liability for
release of asbestos containing materials (‘‘ACMs’’) into the air, and third parties may seek recovery
from owners or operators of real property for personal injury associated with exposure to ACMs. In
connection with our ownership, operation, management, development and redevelopment of the
Centers, or any other centers or properties we acquire in the future, we may be potentially liable under
these laws and may incur costs in responding to these liabilities.
Some of our properties are subject to potential natural or other disasters.
Some of our Centers are located in areas that are subject to natural disasters, including our
Centers in California or in other areas with higher risk of earthquakes, our Centers in flood plains or
in areas that may be adversely affected by tornados, as well as our Centers in coastal regions that may
be adversely affected by increases in sea levels or in the frequency or severity of hurricanes, tropical
storms or other severe weather conditions. The occurrence of natural disasters can delay redevelopment
or development projects, increase investment costs to repair or replace damaged properties, increase
future property insurance costs and negatively impact the tenant demand for lease space. If insurance is
unavailable to us or is unavailable on acceptable terms, or our insurance is not adequate to cover losses
from these events, our financial condition and results of operations could be adversely affected.
Uninsured losses could adversely affect our financial condition.
Each of our Centers has comprehensive liability, fire, extended coverage and rental loss insurance
with insured limits customarily carried for similar properties. We do not insure certain types of losses
(such as losses from wars), because they are either uninsurable or not economically insurable. In
addition, while we or the relevant joint venture, as applicable, carry specific earthquake insurance on
the Centers located in California, the policies are subject to a deductible equal to 5% of the total
insured value of each Center, a $100,000 per occurrence minimum and a combined annual aggregate
loss limit of $150 million on these Centers. We or the relevant joint venture, as applicable, carry
23
specific earthquake insurance on the Centers located in the Pacific Northwest and in the New Madrid
Seismic Zone. However, the policies are subject to a deductible equal to 2% of the total insured value
of each Center, a $50,000 per occurrence minimum and a combined annual aggregate loss limit of
$200 million on these Centers. While we or the relevant joint venture also carries standalone terrorism
insurance on the Centers, the policies are subject to a $50,000 deductible and a combined annual
aggregate loss limit of $1 billion. Each Center has environmental insurance covering eligible third-party
losses, remediation and non-owned disposal sites, subject to a $100,000 deductible and a $50 million
three-year aggregate loss limit, with the exception of one Center, which has a $5 million ten-year
aggregate loss limit. Some environmental losses are not covered by this insurance because they are
uninsurable or not economically insurable. Furthermore, we carry title insurance on substantially all of
the Centers for generally less than their full value.
If an uninsured loss or a loss in excess of insured limits occurs, we could lose all or a portion of
the capital we have invested in a property, as well as the anticipated future revenue from the property,
but may remain obligated for any mortgage debt or other financial obligations related to the property.
We face risks associated with security breaches through cyber attacks, cyber intrusions or otherwise, as well as
other significant disruptions of our information technology (IT) networks and related systems.
We face risks associated with security breaches, whether through cyber attacks or cyber intrusions
over the Internet, malware, computer viruses, attachments to e-mails, persons inside our organization
or persons with access to systems inside our organization, and other significant disruptions of our
IT networks and related systems. The risk of a security breach or disruption, particularly through cyber
attack or cyber intrusion, including by computer hackers, foreign governments and cyber terrorists, has
generally increased as the number, intensity and sophistication of attempted attacks and intrusions from
around the world have increased. Our IT networks and related systems are essential to the operation of
our business and our ability to perform day-to-day operations and, in some cases, may be critical to the
operations of certain of our tenants. Although we make efforts to maintain the security and integrity of
these types of IT networks and related systems, and we have implemented various measures to manage
the risk of a security breach or disruption, there can be no assurance that our security efforts and
measures will be effective or that attempted security breaches or disruptions would not be successful or
damaging. A security breach or other significant disruption involving our IT networks and related
systems could disrupt the proper functioning of our networks and systems; result in misstated financial
reports, violations of loan covenants and/or missed reporting deadlines; result in our inability to
properly monitor our compliance with the rules and regulations regarding our qualification as a REIT;
result in the unauthorized access to, and destruction, loss, theft, misappropriation or release of
proprietary, confidential, sensitive or otherwise valuable information of ours or others, which others
could use to compete against us or for disruptive, destructive or otherwise harmful purposes and
outcomes; require significant management attention and resources to remedy any damages that result;
subject us to claims for breach of contract, damages, credits, penalties or termination of leases or other
agreements; or damage our reputation among our tenants and investors generally. Moreover, cyber
attacks perpetrated against our Anchors and tenants, including unauthorized access to customers’ credit
card data and other confidential information, could diminish consumer confidence and consumer
spending and negatively impact our business.
Inflation may adversely affect our financial condition and results of operations.
If inflation increases in the future, we may experience any or all of the following:
(cid:127) Difficulty in replacing or renewing expiring leases with new leases at higher rents;
24
(cid:127) Decreasing tenant sales as a result of decreased consumer spending which could adversely affect
the ability of our tenants to meet their rent obligations and/or result in lower percentage rents;
and
(cid:127) An inability to receive reimbursement from our tenants for their share of certain operating
expenses, including common area maintenance, real estate taxes and insurance.
Inflation also poses a risk to us due to the possibility of future increases in interest rates. Such
increases would adversely impact us due to our outstanding floating-rate debt as well as result in higher
interest rates on new fixed-rate debt. In certain cases, we may limit our exposure to interest rate
fluctuations related to a portion of our floating-rate debt by the use of interest rate cap and swap
agreements. Such agreements, subject to current market conditions, allow us to replace floating-rate
debt with fixed-rate debt in order to achieve our desired ratio of floating-rate to fixed-rate debt.
However, in an increasing interest rate environment the fixed rates we can obtain with such
replacement fixed-rate cap and swap agreements or the fixed-rate on new debt will also continue to
increase.
We have substantial debt that could affect our future operations.
Our total outstanding loan indebtedness at December 31, 2015 was $7.0 billion (consisting of
$5.3 billion of consolidated debt, less $0.2 billion attributable to noncontrolling interests, plus
$1.9 billion of our pro rata share of unconsolidated joint venture mortgage notes and $60.0 million of
our pro rata share of the PPRT Term Loan). Approximately $229.0 million of such indebtedness (at our
pro rata share) matures in 2016. As a result of this substantial indebtedness, we are required to use a
material portion of our cash flow to service principal and interest on our debt, which limits the amount
of cash available for other business opportunities. We are also subject to the risks normally associated
with debt financing, including the risk that our cash flow from operations will be insufficient to meet
required debt service and that rising interest rates could adversely affect our debt service costs. In
addition, our use of interest rate hedging arrangements may expose us to additional risks, including that
the counterparty to the arrangement may fail to honor its obligations and that termination of these
arrangements typically involves costs such as transaction fees or breakage costs. Furthermore, most of
our Centers are mortgaged to secure payment of indebtedness, and if income from the Center is
insufficient to pay that indebtedness, the Center could be foreclosed upon by the mortgagee resulting
in a loss of income and a decline in our total asset value. Certain Centers also have debt that could
become recourse debt to us if the Center is unable to discharge such debt obligation and, in certain
circumstances, we may incur liability with respect to such debt greater than our legal ownership.
We are obligated to comply with financial and other covenants that could affect our operating activities.
Our unsecured credit facilities contain financial covenants, including interest coverage
requirements, as well as limitations on our ability to incur debt, make dividend payments and make
certain acquisitions. These covenants may restrict our ability to pursue certain business initiatives or
certain transactions that might otherwise be advantageous. In addition, failure to meet certain of these
financial covenants could cause an event of default under and/or accelerate some or all of such
indebtedness which could have a material adverse effect on us.
We depend on external financings for our growth and ongoing debt service requirements.
We depend primarily on external financings, principally debt financings and, in more limited
circumstances, equity financings, to fund the growth of our business and to ensure that we can meet
ongoing maturities of our outstanding debt. Our access to financing depends on the willingness of
banks, lenders and other institutions to lend to us based on their underwriting criteria which can
fluctuate with market conditions and on conditions in the capital markets in general. In addition, levels
25
of market disruption and volatility could materially adversely impact our ability to access the capital
markets for equity financings. There are no assurances that we will continue to be able to obtain the
financing we need for future growth or to meet our debt service as obligations mature, or that the
financing will be available to us on acceptable terms, or at all. Any debt refinancing could also impose
more restrictive terms.
RISKS RELATED TO OUR ORGANIZATIONAL STRUCTURE
Certain individuals have substantial influence over the management of both us and the Operating Partnership,
which may create conflicts of interest.
Under the limited partnership agreement of the Operating Partnership, we, as the sole general
partner, are responsible for the management of the Operating Partnership’s business and affairs. Two of
the principals of the Operating Partnership serve as our executive officers and as members of our
board of directors. Accordingly, these principals have substantial influence over our management and
the management of the Operating Partnership. As a result, certain decisions concerning our operations
or other matters affecting us may present conflicts of interest for these individuals.
Outside partners in Joint Venture Centers result in additional risks to our stockholders.
We own partial interests in property partnerships that own 24 Joint Venture Centers as well as
several development sites. We may acquire partial interests in additional properties through joint
venture arrangements. Investments in Joint Venture Centers involve risks different from those of
investments in Wholly Owned Centers.
We have fiduciary responsibilities to our joint venture partners that could affect decisions
concerning the Joint Venture Centers. Third parties in certain Joint Venture Centers (notwithstanding
our majority legal ownership) share control of major decisions relating to the Joint Venture Centers,
including decisions with respect to sales, refinancings and the timing and amount of additional capital
contributions, as well as decisions that could have an adverse impact on us.
In addition, we may lose our management and other rights relating to the Joint Venture Centers if:
(cid:127) we fail to contribute our share of additional capital needed by the property partnerships; or
(cid:127) we default under a partnership agreement for a property partnership or other agreements
relating to the property partnerships or the Joint Venture Centers.
Our legal ownership interest in a joint venture vehicle may, at times, not equal our economic
interest in the entity because of various provisions in certain joint venture agreements regarding
distributions of cash flow based on capital account balances, allocations of profits and losses and
payments of preferred returns. As a result, our actual economic interest (as distinct from our legal
ownership interest) in certain of the Joint Venture Centers could fluctuate from time to time and may
not wholly align with our legal ownership interests. Substantially all of our joint venture agreements
contain rights of first refusal, buy-sell provisions, exit rights, default dilution remedies and/or other
break up provisions or remedies which are customary in real estate joint venture agreements and which
may, positively or negatively, affect the ultimate realization of cash flow and/or capital or liquidation
proceeds.
Our holding company structure makes us dependent on distributions from the Operating Partnership.
Because we conduct our operations through the Operating Partnership, our ability to service our
debt obligations and pay dividends to our stockholders is strictly dependent upon the earnings and cash
flows of the Operating Partnership and the ability of the Operating Partnership to make distributions to
us. Under the Delaware Revised Uniform Limited Partnership Act, the Operating Partnership is
26
prohibited from making any distribution to us to the extent that at the time of the distribution, after
giving effect to the distribution, all liabilities of the Operating Partnership (other than some
non-recourse liabilities and some liabilities to the partners) exceed the fair value of the assets of the
Operating Partnership. An inability to make cash distributions from the Operating Partnership could
jeopardize our ability to maintain qualification as a REIT.
An ownership limit and certain of our Charter and bylaw provisions could inhibit a change of control or
reduce the value of our common stock.
The Ownership Limit.
In order for us to maintain our qualification as a REIT, not more than 50%
in value of our outstanding stock (after taking into account certain options to acquire stock) may be
owned, directly or indirectly or through the application of certain attribution rules, by five or fewer
individuals (as defined in the Internal Revenue Code to include some entities that would not ordinarily
be considered ‘‘individuals’’) at any time during the last half of a taxable year. To assist us in
maintaining our qualification as a REIT, among other purposes, our Charter restricts ownership of
more than 5% (the ‘‘Ownership Limit’’) of the lesser of the number or value of our outstanding shares
of stock by any single stockholder or a group of stockholders (with limited exceptions). In addition to
enhancing preservation of our status as a REIT, the Ownership Limit may:
(cid:127) have the effect of delaying, deferring or preventing a change in control of us or other
transaction without the approval of our board of directors, even if the change in control or other
transaction is in the best interests of our stockholders; and
(cid:127) limit the opportunity for our stockholders to receive a premium for their common stock or
preferred stock that they might otherwise receive if an investor were attempting to acquire a
block of stock in excess of the Ownership Limit or otherwise effect a change in control of us.
Our board of directors, in its sole discretion, may waive or modify (subject to limitations and upon
any conditions as it may direct) the Ownership Limit with respect to one or more of our stockholders,
if it is satisfied that ownership in excess of this limit will not jeopardize our status as a REIT.
Selected Provisions of our Charter, Bylaws and Maryland Law. Some of the provisions of our
Charter, bylaws and Maryland law may have the effect of delaying, deferring or preventing a third party
from making an acquisition proposal for us and may inhibit a change in control that holders of some,
or a majority, of our shares might believe to be in their best interests or that could give our
stockholders the opportunity to realize a premium over the then-prevailing market prices for our
shares. These provisions include the following:
(cid:127) advance notice requirements for stockholder nominations of directors and stockholder proposals
to be considered at stockholder meetings;
(cid:127) the obligation of our directors to consider a variety of factors with respect to a proposed
business combination or other change of control transaction;
(cid:127) the authority of our directors to classify or reclassify unissued shares and cause the Company to
issue shares of one or more classes or series of common stock or preferred stock;
(cid:127) the authority of our directors to create and cause the Company to issue rights entitling the
holders thereof to purchase shares of stock or other securities from us; and
(cid:127) limitations on the amendment of our Charter and bylaws, the change in control of us, and the
liability of our directors and officers.
In addition, the Maryland General Corporation Law prohibits business combinations between a
Maryland corporation and an interested stockholder (which includes any person who beneficially holds
10% or more of the voting power of the corporation’s outstanding voting stock or any affiliate or
27
associate of ours who was the beneficial owner, directly or indirectly, of 10% or more of the voting
power of the corporation’s outstanding stock at any time within the two-year period prior to the date in
question) or its affiliates for five years following the most recent date on which the interested
stockholder became an interested stockholder and, after the five-year period, requires the
recommendation of the board of directors and two supermajority stockholder votes to approve a
business combination unless the stockholders receive a minimum price determined by the statute. As
permitted by Maryland law, our Charter exempts from these provisions any business combination
between us and the principals and their respective affiliates and related persons. Maryland law also
allows the board of directors to exempt particular business combinations before the interested
stockholder becomes an interested stockholder. Furthermore, a person is not an interested stockholder
if the transaction by which he or she would otherwise have become an interested stockholder is
approved in advance by the board of directors.
The Maryland General Corporation Law also provides that the acquirer of certain levels of voting
power in electing directors of a Maryland corporation (one-tenth or more but less than one-third,
one-third or more but less than a majority and a majority or more) is not entitled to vote the shares in
excess of the applicable threshold, unless voting rights for the shares are approved by holders of
two-thirds of the disinterested shares or unless the acquisition of the shares has been specifically or
generally approved or exempted from the statute by a provision in our Charter or bylaws adopted
before the acquisition of the shares. Our Charter exempts from these provisions voting rights of shares
owned or acquired by the principals and their respective affiliates and related persons. Our bylaws also
contain a provision exempting from this statute any acquisition by any person of shares of our common
stock. There can be no assurance that this bylaw will not be amended or eliminated in the future. The
Maryland General Corporation Law and our Charter also contain supermajority voting requirements
with respect to our ability to amend certain provisions of our Charter, merge, or sell all or substantially
all of our assets. Furthermore, the Maryland General Corporation Law permits our board of directors,
without stockholder approval and regardless of what is currently provided in our Charter or bylaws, to
adopt certain Charter and bylaw provisions, such as a classified board, that may have the effect of
delaying or preventing a third party from making an acquisition proposal for us.
FEDERAL INCOME TAX RISKS
The tax consequences of the sale of some of the Centers and certain holdings of the principals may create
conflicts of interest.
The principals will experience negative tax consequences if some of the Centers are sold. As a
result, the principals may not favor a sale of these Centers even though such a sale may benefit our
other stockholders. In addition, the principals may have different interests than our stockholders
because they are significant holders of limited partnership units in the Operating Partnership.
If we were to fail to qualify as a REIT, we would have reduced funds available for distributions to our
stockholders.
We believe that we currently qualify as a REIT. No assurance can be given that we will remain
qualified as a REIT. Qualification as a REIT involves the application of highly technical and complex
Internal Revenue Code provisions for which there are only limited judicial or administrative
interpretations. The complexity of these provisions and of the applicable income tax regulations is
greater in the case of a REIT structure like ours that holds assets in partnership form. The
determination of various factual matters and circumstances not entirely within our control, including
determinations by our partners in the Joint Venture Centers, may affect our continued qualification as
a REIT. In addition, legislation, new regulations, administrative interpretations or court decisions could
significantly change the tax laws with respect to our qualification as a REIT or the U.S. federal income
tax consequences of that qualification.
28
In addition, we currently hold certain of our properties through subsidiaries that have elected to be
taxed as REITs and we may in the future determine that it is in our best interests to hold one or more
of our other properties through one or more subsidiaries that elect to be taxed as REITs. If any of
these subsidiaries fails to qualify as a REIT for U.S. federal income tax purposes, then we may also fail
to qualify as a REIT for U.S. federal income tax purposes.
If in any taxable year we were to fail to qualify as a REIT, we will suffer the following negative
results:
(cid:127) we will not be allowed a deduction for distributions to stockholders in computing our taxable
income; and
(cid:127) we will be subject to U.S. federal income tax on our taxable income at regular corporate rates.
In addition, if we were to lose our REIT status, we would be prohibited from qualifying as a REIT
for the four taxable years following the year during which the qualification was lost, absent relief under
statutory provisions. As a result, net income and the funds available for distributions to our
stockholders would be reduced for at least five years and the fair market value of our shares could be
materially adversely affected. Furthermore, the Internal Revenue Service could challenge our REIT
status for past periods. Such a challenge, if successful, could result in us owing a material amount of
tax for prior periods. It is possible that future economic, market, legal, tax or other considerations
might cause our board of directors to revoke our REIT election.
Even if we remain qualified as a REIT, we might face other tax liabilities that reduce our cash
flow. Further, we might be subject to federal, state and local taxes on our income and property. Any of
these taxes would decrease cash available for distributions to stockholders.
Complying with REIT requirements might cause us to forego otherwise attractive opportunities.
In order to qualify as a REIT for U.S. federal income tax purposes, we must satisfy tests
concerning, among other things, our sources of income, the nature of our assets, the amounts we
distribute to our stockholders and the ownership of our stock. We may also be required to make
distributions to our stockholders at disadvantageous times or when we do not have funds readily
available for distribution. Thus, compliance with REIT requirements may cause us to forego
opportunities we would otherwise pursue.
In addition, the REIT provisions of the Internal Revenue Code impose a 100% tax on income
from ‘‘prohibited transactions.’’ Prohibited transactions generally include sales of assets that constitute
inventory or other property held for sale in the ordinary course of business, other than foreclosure
property. This 100% tax could impact our desire to sell assets and other investments at otherwise
opportune times if we believe such sales could be considered prohibited transactions.
Complying with REIT requirements may force us to borrow or take other measures to make distributions to
our stockholders.
As a REIT, we generally must distribute 90% of our annual taxable income (subject to certain
adjustments) to our stockholders. From time to time, we might generate taxable income greater than
our net income for financial reporting purposes, or our taxable income might be greater than our cash
flow available for distributions to our stockholders. If we do not have other funds available in these
situations, we might be unable to distribute 90% of our taxable income as required by the REIT rules.
In that case, we would need to borrow funds, liquidate or sell a portion of our properties or
investments (potentially at disadvantageous or unfavorable prices), in certain limited cases distribute a
combination of cash and stock (at our stockholders’ election but subject to an aggregate cash limit
established by the Company) or find another alternative source of funds. These alternatives could
increase our costs or reduce our equity. In addition, to the extent we borrow funds to pay distributions,
29
the amount of cash available to us in future periods will be decreased by the amount of cash flow we
will need to service principal and interest on the amounts we borrow, which will limit cash flow
available to us for other investments or business opportunities.
We may face risks in connection with Section 1031 Exchanges.
If a transaction intended to qualify as a Section 1031 Exchange is later determined to be taxable,
we may face adverse consequences, and if the laws applicable to such transactions are amended or
repealed, we may not be able to dispose of properties on a tax deferred basis.
Tax legislative or regulatory action could adversely affect us or our investors.
In recent years, numerous legislative, judicial and administrative changes have been made to the
U.S. federal income tax laws applicable to investments similar to an investment in our stock. Additional
changes to tax laws are likely to continue in the future, and we cannot assure you that any such
changes will not adversely affect the taxation of us or our stockholders. Any such changes could have
an adverse effect on an investment in our stock or on the market value or the resale potential of our
properties.
ITEM 1B. UNRESOLVED STAFF COMMENTS
None.
30
ITEM 2. PROPERTIES
The following table sets forth certain information regarding the Centers and other locations that
are wholly owned or partly owned by the Company as of December 31, 2015, excluding Flagstaff Mall.
Company’s
Count Ownership(1)
Name of
Center/Location(2)
CONSOLIDATED CENTERS:
Year of
Year of
Original Most Recent
Construction/ Expansion/
Renovation
Acquisition
Total
GLA(3)
Mall and
Percentage
of Mall and
Freestanding Freestanding
GLA Leased
GLA
Non-Owned
Anchors(3)
Company-
Owned
Anchors(3)
Sales
PSF(4)
Arrowhead Towne Center(5)
Glendale, Arizona
1993/2002
2015
1,197,000
389,000
95.4% Dillard’s,
Dick’s Sporting
JCPenney, Macy’s Goods, Forever
$ 741
100%
100%
100%
50.1%
100%
100%
100%
100%
100%
100%
50.1%
Capitola Mall(6)
Capitola, California
Cascade Mall(7)
Burlington, Washington
Chandler Fashion Center
Chandler, Arizona
Danbury Fair Mall(8)
Danbury, Connecticut
Deptford Mall(9)
Deptford, New Jersey
Desert Sky Mall
Phoenix, Arizona
Eastland Mall(6)
Evansville, Indiana
Fashion Outlets of Chicago
Rosemont, Illinois
FlatIron Crossing(9)
Broomfield, Colorado
Freehold Raceway Mall(8)
Freehold, New Jersey
1
2
3
4
5
6
7
8
9
10
11
12
1977/1995
1988
586,000
196,000
93.2% Macy’s, Sears,
Target
1989/1999
1998
589,000
265,000
79.4% Target
$ 347
$ 339
21, Sears
Kohl’s
JCPenney,
Macy’s, Macy’s
Men’s,
Children’s &
Home
2001/2002
— 1,319,000
634,000
96.9% Dillard’s, Macy’s,
Sears
$ 649
1986/2005
2010
1,270,000
525,000
Nordstrom
97.4% JCPenney, Macy’s Dick’s Sporting
Goods, Forever
21, Lord &
Taylor,
Primark, Sears
$ 633
1975/2006
1990
1,040,000
343,000
95.3% JCPenney, Macy’s Boscov’s, Sears
$ 580
1981/2002
2007
893,000
282,000
97.0% Burlington Coat
La Curacao,
$ 338
Factory, Dillard’s, Mercado de los
Sears
Cielos
1978/1998
1996
1,044,000
555,000
96.8% Dillard’s, Macy’s
JCPenney
$ 364
2013/—
—
537,000
537,000
97.9% —
—
$ 734
2000/2002
2009
1,430,000
787,000
93.7% Dillard’s, Macy’s, Dick’s Sporting
$ 551
Nordstrom
Goods
1990/2005
2007
1,669,000
771,000
98.7% JCPenney, Lord & Dick’s Sporting
$ 610
Taylor, Macy’s,
Nordstrom
Goods,
Primark, Sears
Home
98.1% Macy’s Women’s & Forever 21,
JCPenney,
Macy’s
Men’s &
Children’s
$ 642
$ 643
100%
Fresno Fashion Fair
Fresno, California
1970/1996
2006
963,000
402,000
13
100%
Green Acres Mall(6)
Valley Stream, New York
1956/2013
2015
1,799,000
681,000
93.2% —
BJ’s Wholesale
Club, Century
21, JCPenney,
Kohl’s, Macy’s,
Macy’s Men’s/
Furniture
Gallery, Sears,
Walmart
14
15
16
17
18
19
20
21
100%
100%
100%
100%
100%
100%
100%
100%
Inland Center(6)(10)
San Bernardino, California
Kings Plaza Shopping Center(6)
Brooklyn, New York
La Cumbre Plaza(6)
Santa Barbara, California
Northgate Mall
San Rafael, California
NorthPark Mall
Davenport, Iowa
Oaks, The(11)
Thousand Oaks, California
Pacific View
Ventura, California
Queens Center(6)
Queens, New York
1966/2004
2004
866,000
204,000
99.0% Macy’s, Sears
Forever 21, JC $ 510
Penney
1971/2012
2002
1,192,000
463,000
92.3% Macy’s
Lowe’s, Sears
$ 720
1967/2004
1989
491,000
174,000
93.1% Macy’s
Sears
$ 431
1964/1986
2010
750,000
279,000
95.3% —
Kohl’s, Macy’s,
Sears
$ 454
1973/1998
2001
1,051,000
401,000
85.9% Dillard’s,
Younkers
$ 308
JCPenney, Sears,
Von Maur
1978/2002
2009
1,145,000
587,000
97.6% JCPenney, Macy’s, Nordstrom
$ 580
Macy’s Men’s &
Home
1965/1996
2001
1,021,000
372,000
95.0% JCPenney, Sears, Macy’s
$ 448
Target
1973/1995
2004
966,000
409,000
98.2% JCPenney, Macy’s —
$1,134
31
Company’s
Count Ownership(1)
Name of
Center/Location(2)
22
23
24
25
26
27
28
29
30
31
100%
84.9%
100%
100%
100%
100%
100%
100%
100%
100%
Santa Monica Place
Santa Monica, California
SanTan Village Regional Center
Gilbert, Arizona
Stonewood Center(6)
Downey, California
Superstition Springs Center
Mesa, Arizona
Towne Mall
Elizabethtown, Kentucky
Tucson La Encantada
Tucson, Arizona
Twenty Ninth Street(6)(9)
Boulder, Colorado
Valley Mall
Harrisonburg, Virginia
Valley River Center(7)
Eugene, Oregon
Victor Valley, Mall of
Victorville, California
32
100%
Vintage Faire Mall
Modesto, California
Year of
Year of
Original Most Recent
Construction/ Expansion/
Renovation
Acquisition
Total
GLA(3)
Mall and
Percentage
of Mall and
Freestanding Freestanding
GLA Leased
GLA
Non-Owned
Anchors(3)
Company-
Owned
Anchors(3)
Sales
PSF(4)
1980/1999
2010
517,000
294,000
90.5% —
2007/—
2009
1,031,000
624,000
96.5% Dillard’s, Macy’s
1953/1997
1991
932,000
358,000
98.5% —
Bloomingdale’s, $ 786
Nordstrom
Dick’s Sporting
Goods
$ 525
JCPenney,
Kohl’s, Macy’s,
Sears
$ 544
1990/2002
2002
1,040,000
388,000
94.1% Dillard’s,
Sports
$ 369
JCPenney, Macy’s, Authority
Sears
1985/2005
1989
350,000
179,000
89.2% —
Belk,
JCPenney,
Sears
$ 349
2002/2002
2005
243,000
243,000
94.8% —
—
$ 767
1963/1979
2007
850,000
559,000
99.3% Macy’s
Home Depot
$ 626
1978/1998
1992
506,000
191,000
88.0% Target
1969/2006
2007
921,000
345,000
97.4% Macy’s
1986/2004
2012
577,000
254,000
97.9% Macy’s
$ 325
$ 465
$ 520
Belk, Dick’s
Sporting
Goods,
JCPenney
JCPenney,
Sports
Authority
Dick’s Sporting
Goods,
JCPenney,
Sears
1977/1996
2008
1,141,000
408,000
96.7% Forever 21, Macy’s Dick’s Sporting
$ 677
Women’s &
Children’s
33
100%
Wilton Mall
Saratoga Springs, New York
1990/2005
1998
736,000
451,000
95.2% JCPenney
Total Consolidated Centers
30,662,000
13,550,000
95.3%
UNCONSOLIDATED JOINT VENTURE CENTERS:
1963/2003
2006
516,000
211,000
99.0% —
34
35
36
37
38
39
40
50%
50.1%
50%
60%
60%
50%
50%
Biltmore Fashion Park
Phoenix, Arizona
Corte Madera, Village at
Corte Madera, California
Kierland Commons
Scottsdale, Arizona
Lakewood Center
Lakewood, California
Los Cerritos Center(6)
Cerritos, California
North Bridge, The Shops at(6)
Chicago, Illinois
Scottsdale Fashion Square(12)
Scottsdale, Arizona
1985/1998
2005
460,000
224,000
97.9% Macy’s, Nordstrom —
1999/2005
2003
439,000
439,000
98.3% —
—
1953/1975
2008
2,075,000
967,000
96.3% —
Costco,
Forever 21,
Home Depot,
JCPenney,
Macy’s, Sports
Authority,
Target
1971/1999
2015
1,292,000
532,000
97.2% Macy’s, Nordstrom Dick’s Sporting
Goods, Forever
21, Sears
$ 843
1998/2008
—
660,000
400,000
99.8% —
Nordstrom
$ 856
1961/2002
2015
1,811,000
790,000
97.8% Dillard’s
Goods,
JCPenney,
Macy’s
Men’s &
Home, Sears
Bon-Ton,
Dick’s Sporting
Goods, Sears
Macy’s, Saks
Fifth Avenue
$ 295
$ 579
$ 835
$1,475
$ 670
$ 467
$ 745
$ 452
Barneys New
York, Dick’s
Sporting
Goods, Macy’s,
Neiman
Marcus,
Nordstrom
Bealls,
Dillard’s (two),
JCPenney,
Sears
41
60%
South Plains Mall
Lubbock, Texas
1972/1998
1995
1,127,000
468,000
93.5% —
32
Company-
Owned
Anchors(3)
Sales
PSF(4)
Bloomingdale’s, $ 851
L.L. Bean,
Lord & Taylor,
Macy’s,
Nordstrom
Dick’s Sporting
Goods,
JCPenney,
Nordstrom,
Sears
JCPenney,
Sears
$1,125
$ 501
$ 763
Neiman
Marcus,
Nordstrom
—
Burlington
Coat Factory,
Century 21
(14)
(14)
(14)
Company’s
Count Ownership(1)
Name of
Center/Location(2)
42
50%
Tysons Corner Center
Tysons Corner, Virginia
Year of
Year of
Original Most Recent
Construction/ Expansion/
Renovation
Acquisition
Total
GLA(3)
Mall and
Percentage
of Mall and
Freestanding Freestanding
GLA Leased
GLA
Non-Owned
Anchors(3)
1968/2005
2014
1,967,000
1,082,000
98.9% —
43
60%
Washington Square
Portland, Oregon
1974/1999
2005
1,441,000
506,000
98.4% Macy’s
44
19%
West Acres
Fargo, North Dakota
1972/1986
2001
971,000
418,000
99.8% Herberger’s,
Macy’s
Total Unconsolidated Joint Ventures
12,759,000
6,037,000
97.8%
REGIONAL SHOPPING CENTERS UNDER REDEVELOPMENT
45
46
47
48
49
50
50
1
2
3
4
5
6
7
7
50%
Broadway Plaza(6)(13)
Walnut Creek, California
100%
50%
100%
100%
Fashion Outlets of Niagara Falls
USA(15)
Niagara Falls, New York
Fashion Outlets of
Philadelphia(6)(13)
Philadelphia, Pennsylvania
Paradise Valley Mall(15)
Phoenix, Arizona
SouthPark Mall(15)
Moline, Illinois
100%
Westside Pavilion(15)
Los Angeles, California
1951/1985
ongoing
761,000
211,000
(14)
Macy’s
1982/2011
2014
686,000
686,000
(14) —
1977/2014
ongoing
850,000
624,000
(14) —
1979/2002
2009
1,150,000
370,000
1974/1998
2015
856,000
341,000
(14)
(14)
Dillard’s,
JCPenney, Macy’s
Dillard’s, Von
Maur
Costco, Sears
(14)
(14)
Dick’s Sporting
Goods,
JCPenney,
Younkers
1985/1998
2007
755,000
397,000
(14)
Macy’s
Nordstrom
(14)
Total Regional Shopping Centers
48,479,000
22,216,000
96.1%
$ 635
COMMUNITY/POWER SHOPPING CENTERS
50%
50%
40.1%
89.4%
Atlas Park, The Shops at(13)
Queens, New York
Boulevard Shops(13)
Chandler, Arizona
Estrella Falls, The Market at(13)(16)
Goodyear, Arizona
Promenade at Casa Grande(15)(17)
Casa Grande, Arizona
100%
Southridge Center(15)
Des Moines, Iowa
100.0%
Superstition Springs Power
Center(15)
Mesa, Arizona
2006/2011
2013
372,000
372,000
71.6% —
2001/2002
2004
185,000
185,000
96.4% —
2009/—
2009
219,000
219,000
95.0% —
—
—
—
2007/—
2009
909,000
431,000
90.2% Dillard’s,
Sports
JCPenney, Kohl’s, Authority
Target
1975/1998
2013
823,000
434,000
76.5% Des Moines Area
Community
College
Sears, Target,
Younkers
1990/2002
—
206,000
53,000
100.0% Best Buy,
—
Burlington Coat
Factory
100%
The Marketplace at Flagstaff(6)(15)
Flagstaff, Arizona
Total Community/Power Shopping Centers
57
Total before Other Assets
OTHER ASSETS:
100%
Various(15)(18)
100%
50%
100%
100%
500 North Michigan Avenue(15)
Chicago, Illinois
Fashion Outlets of Philadelphia-
Offices(6)(13)
Philadelphia, Pennsylvania
Paradise Village Ground Leases(15)
Phoenix, Arizona
Paradise Village Office Park II(15)
Phoenix, Arizona
2007/—
—
268,000
146,000
100.0% —
Home Depot
2,982,000
1,840,000
51,461,000
24,056,000
477,000
199,000
100.0% —
326,000
526,000
58,000
46,000
—
—
—
—
64.2% —
100.0% —
65.5% —
—
—
33
Forever 21,
Kohl’s, Sports
Authority
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
Company’s
Count Ownership(1)
Name of
Center/Location(2)
50%
50%
50%
50%
50%
Scottsdale Fashion Square-Office(13)
Scottsdale, Arizona
Tysons Corner Center-Office(13)
Tysons Corner, Virginia
Hyatt Regency Tysons Corner
Center(13)
Tysons Corner, Virginia
VITA Tysons Corner Center(13)
Tysons Corner, Virginia
Tysons Tower(13)
Tysons Corner, Virginia
Total Other Assets
Grand Total
Year of
Year of
Original Most Recent
Construction/ Expansion/
Renovation
Acquisition
Total
GLA(3)
122,000
175,000
290,000
510,000
527,000
Mall and
Percentage
of Mall and
Freestanding Freestanding
GLA Leased
GLA
Non-Owned
Anchors(3)
Company-
Owned
Anchors(3)
Sales
PSF(4)
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
3,057,000
199,000
54,518,000
24,255,000
(1)
(2)
(3)
(4)
(5)
(6)
(7)
(8)
(9)
The Company’s ownership interest in this table reflects its direct or indirect legal ownership interest. Legal ownership may, at times, not equal the Company’s economic
interest in the listed properties because of various provisions in certain joint venture agreements regarding distributions of cash flow based on capital account balances,
allocations of profits and losses and payments of preferred returns. As a result, the Company’s actual economic interest (as distinct from its legal ownership interest) in
certain of the properties could fluctuate from time to time and may not wholly align with its legal ownership interests. Substantially all of the Company’s joint venture
agreements contain rights of first refusal, buy-sell provisions, exit rights, default dilution remedies and/or other break up provisions or remedies which are customary in real
estate joint venture agreements and which may, positively or negatively, affect the ultimate realization of cash flow and/or capital or liquidation proceeds. See ‘‘Item 1A.-Risks
Related to Our Organizational Structure-Outside partners in Joint Venture Centers result in additional risks to our stockholders.’’
With respect to 43 Centers, the underlying land controlled by the Company is owned in fee entirely by the Company or, in the case of Joint Venture Centers, by the joint
venture property partnership or limited liability company. With respect to the remaining 14 Centers, portions of the underlying land controlled by the Company is owned by
third parties and leased to the Company, or the joint venture property partnership or limited liability company, pursuant to long-term ground leases. Under the terms of a
typical ground lease, the Company, or the joint venture property partnership or limited liability company, has an option or right of first refusal to purchase the land. The
termination dates of the ground leases range from 2016 to 2098.
Total GLA includes GLA attributable to Anchors (whether owned or non-owned) and Mall and Freestanding Stores as of December 31, 2015. ‘‘Non-owned Anchors’’ is space
not owned by the Company (or, in the case of Joint Venture Centers, by the joint venture property partnership or limited liability company) which is occupied by Anchor
tenants. ‘‘Company-owned Anchors’’ is space owned (or leased) by the Company (or, in the case of Joint Venture Centers, by the joint venture property partnership or limited
liability company) and leased (or subleased) to Anchor tenants.
Sales per square foot are based on reports by retailers leasing Mall Stores and Freestanding Stores for the trailing twelve months for tenants which have occupied such stores
for a minimum of twelve months. Sales per square foot are also based on tenants 10,000 square feet and under for Regional Shopping Centers.
On January 6, 2016, the Company sold a 40% ownership interest in the property (See ‘‘Item 1. Business—Recent Developments—Acquisitions and Dispositions’’).
Portions of the land on which the Center is situated are subject to one or more long-term ground leases.
These Centers have a vacant Anchor location. The Company is seeking replacement tenants and/or contemplating redevelopment opportunities for these vacant sites. The
Company continues to collect rent under the terms of an agreement regarding one of these two vacant Anchor locations.
Primark plans to open stores at Danbury Fair Mall and Freehold Raceway Mall in Summer 2016.
On January 14, 2016, the Company sold a 49% ownership interest in the property (See ‘‘Item 1. Business—Recent Developments—Acquisitions and Dispositions’’).
(10)
JCPenney plans to open a new store at Inland Center in Fall 2016.
(11) Dick’s Sporting Goods plans to open a new store at The Oaks in Fall 2016.
(12)
(13)
(14)
(15)
(16)
(17)
(18)
Barneys New York plans to close its store at Scottsdale Fashion Square in Spring 2016.
Included in Unconsolidated Joint Venture Centers.
Tenant spaces have been intentionally held off the market and remain vacant because of redevelopment plans. As a result, the Company believes the percentage of mall and
freestanding GLA leased and the sales per square foot at this redevelopment property are not meaningful data.
Included in Consolidated Centers.
Burlington Coat Factory plans to open a store at The Market at Estrella Falls in Fall 2016.
Target closed its store at Promenade at Casa Grande in January 2016.
The Company owns a portfolio of eight stores located at shopping centers not owned by the Company. Of these eight stores, two have been leased to Forever 21, one has
been leased to Kohl’s, one has been leased to Sports Authority and four have been leased for non-Anchor usage. With respect to five of the eight stores, the underlying land
is owned in fee entirely by the Company. With respect to the remaining three stores, the underlying land is owned by third parties and leased to the Company pursuant to
long-term building or ground leases. Under the terms of a typical building or ground lease, the Company pays rent for the use of the building or land and is generally
responsible for all costs and expenses associated with the building and improvements. In some cases, the Company has an option or right of first refusal to purchase the land.
The termination dates of the ground leases range from 2018 to 2027.
34
Mortgage Debt
The following table sets forth certain information regarding the mortgages encumbering the
Centers, including those Centers in which the Company has less than a 100% interest. The information
set forth below is as of December 31, 2015 (dollars in thousands):
Property Pledged as Collateral
Consolidated Centers:
Arrowhead Towne Center(5)
. . . . . . .
Chandler Fashion Center(6) . . . . . . . .
Danbury Fair Mall(7) . . . . . . . . . . . .
Deptford Mall(8) . . . . . . . . . . . . . . .
Deptford Mall(9) . . . . . . . . . . . . . . .
Fashion Outlets of Chicago(10) . . . . . .
Fashion Outlets of Niagara Falls USA .
Flagstaff Mall(11) . . . . . . . . . . . . . . .
FlatIron Crossing(8) . . . . . . . . . . . . .
Freehold Raceway Mall(6) . . . . . . . . .
Green Acres Mall . . . . . . . . . . . . . . .
Kings Plaza Shopping Center . . . . . . .
Northgate Mall(12) . . . . . . . . . . . . . .
Oaks, The . . . . . . . . . . . . . . . . . . . .
Pacific View . . . . . . . . . . . . . . . . . . .
Queens Center . . . . . . . . . . . . . . . . .
Santa Monica Place . . . . . . . . . . . . . .
SanTan Village Regional Center . . . . .
. . . . . . . . . . . . . .
Stonewood Center
Superstition Springs Center(13) . . . . . .
Towne Mall
. . . . . . . . . . . . . . . . . . .
Tucson La Encantada(14) . . . . . . . . . .
. . . . . . . . . . . .
Victor Valley, Mall of
Vintage Faire Mall(15)
. . . . . . . . . . .
Westside Pavilion . . . . . . . . . . . . . . .
Fixed or
Maturity Due on
Floating Amount(1) Rate(2) Service(3) Date(4) Maturity
Carrying
Effective
Interest
Annual
Debt
Earliest Date
Balance Notes Can Be
Defeased or
Be Prepaid
Fixed
Fixed
Fixed
Fixed
Fixed
Floating
Fixed
Fixed
Fixed
Fixed
Fixed
Fixed
Floating
Fixed
Fixed
Fixed
Fixed
Fixed
Fixed
Floating
Fixed
Fixed
Fixed
Fixed
Fixed
$ 221,194
200,000
222,497
193,861
14,001
200,000
118,615
37,000
254,733
225,094
306,954
470,627
64,000
205,986
130,458
600,000
225,089
130,898
105,494
67,763
22,200
70,070
115,000
276,117
146,961
$4,624,612
2.76% $13,572
3.77% 7,500
7/1/19
5.53% 18,456
10/1/20
3.76% 11,364
4/3/23
6.46% 1,212
6/1/16
1.84% 3,492
3/31/20
4.89% 8,724
10/6/20
8.97% 1,836
11/1/15
3.90% 16,716
1/5/21
4.20% 13,584
1/1/18
3.61% 17,364
2/3/21
3.67% 26,748
12/3/19
3.30% 1,716
3/1/17
4.14% 12,768
6/5/22
4.08% 8,016
4/1/22
3.49% 20,928
1/1/25
2.99% 12,048
1/3/18
3.14% 7,068
6/1/19
11/1/17
1.80% 7,680
2.17% 1,788 10/28/16
11/1/22
4.48% 1,404
3/1/22
4.23% 4,416
9/1/24
4.00% 4,560
3/6/26
3.55% 15,060
10/1/22
4.49% 9,396
10/5/18 $199,487 Any Time
200,000 Any Time
188,854 Any Time
160,294 Any Time
13,877 Any Time
200,000 Any Time
103,810 Any Time
37,000 Any Time
216,740 Any Time
216,258 Any Time
269,922 Any Time
427,423 Any Time
64,000 Any Time
174,311 Any Time
110,597
4/12/2017
600,000 Any Time
214,118 Any Time
120,238 Any Time
94,471 Any Time
67,500 Any Time
18,886 Any Time
59,788 Any Time
10/22/16
115,000
211,507
3/26/2017
125,489 Any Time
35
Property Pledged as Collateral
Unconsolidated Joint Venture Centers
(at Company’s Pro Rata Share):
Atlas Park, The Shops at(50.0%)(16) .
Boulevard Shops(50.0%)(17) . . . . . .
Corte Madera, The Village at(50.1%)
Estrella Falls, The Market
at(40.1%)(18) . . . . . . . . . . . . . . .
Kierland Commons(50.0%)(19) . . . . .
Lakewood Center(60.0%)(20) . . . . . .
Los Cerritos Center(60.0%)(21) . . . .
North Bridge, The Shops
at(50.0%)(14) . . . . . . . . . . . . . . .
Scottsdale Fashion Square(50.0%) . . .
South Plains Mall(60.0%)(22) . . . . . .
Tysons Corner Center(50.0%)(23) . . .
Washington Square(60.0%)(24) . . . . .
West Acres(19.0%) . . . . . . . . . . . . .
Fixed or
Floating Amount(1) Rate(2) Service(3)
Carrying
Effective
Interest
Annual
Debt
Earliest Date
Balance Notes Can Be
Defeased or
Maturity
Due on
Be Prepaid
Date(4) Maturity
Floating
Floating
Fixed
Floating
Floating
Fixed
Fixed
Fixed
Fixed
Fixed
Fixed
Fixed
Fixed
24,146
9,772
37,198
602
2.56%
2.12%
379
7.27% 3,265
10/22/2020
12/16/2018
11/1/2016
24,146 Any Time
9,133 Any Time
36,696 Any Time
10,420
66,205
228,953
315,000
94,884
247,823
120,000
408,017
330,000
10,613
210
2.34%
2.38% 2,356
4.15% 13,144
4.00% 12,600
7.52% 8,601
3.02% 13,281
4.22% 5,065
4.13% 24,643
3.65% 12,045
6.41% 1,069
$1,903,031
10,087 Any Time
64,281 Any Time
2/5/2020
1/2/2018
6/1/2026 185,306
11/1/2027 278,711
8/6/17
11/1/21
6/15/2016
94,258 Any Time
4/3/2023 201,331 Any Time
10/23/18
1/1/2024 333,233 Any Time
11/6/2025 120,000
11/1/2022 311,348
10/1/2016
10,315 Any Time
11/1/18
(1) The mortgage notes payable balances include the unamortized debt premiums (discounts). Debt premiums
(discounts) represent the excess (deficiency) of the fair value of debt over (under) the principal value of debt
assumed in various acquisitions. The debt premiums (discounts) are being amortized into interest expense
over the term of the related debt in a manner which approximates the effective interest method.
The debt premiums (discounts) as of December 31, 2015 consisted of the following:
Property Pledged as Collateral
Consolidated Centers
Arrowhead Towne Center . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Deptford Mall . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Fashion Outlets of Niagara Falls USA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Stonewood Center . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Superstition Springs Center . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$ 8,494
(3)
4,486
5,168
263
$ 18,408
Unconsolidated Joint Venture Center (at Company’s Pro Rata Share)
Lakewood Center . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$(14,750)
(2) The interest rate disclosed represents the effective interest rate, including the debt premiums (discounts) and
deferred finance costs.
(3) The annual debt service represents the annual payment of principal and interest.
(4) The maturity date assumes that all extension options are fully exercised and that the Company does not opt
to refinance the debt prior to these dates. These extension options are at the Company’s discretion, subject to
certain conditions, which the Company believes will be met.
(5) On January 6, 2016, the Company replaced the existing loan on the property with a new $400,000 loan that
bears interest at an effective rate of 4.05% and matures on February 1, 2028. Concurrently, a 40% interest in
the loan was assumed by a third party in connection with the sale of a 40% ownership interest in the
underlying property (See ‘‘Item 1. Business—Recent Developments—Acquisitions and Dispositions’’).
(6) A 49.9% interest in the loan has been assumed by a third party in connection with a co-venture arrangement.
(7) Northwestern Mutual Life (‘‘NML’’) is the lender of 50% of the loan. NML is considered a related party as it
is a joint venture partner with the Company in Broadway Plaza.
36
(8) On January 14, 2016, a 49% interest in the loan was assumed by a third party in connection with the sale of a
49% ownership interest in the MAC Heitman Portfolio (See ‘‘Item 1. Business—Recent Developments—
Acquisitions and Dispositions’’).
(9) The Company expects to pay off this loan on March 1, 2016.
(10) On March 3, 2015, the Company amended the loan on the property. The amended $200,000 loan bears
interest at LIBOR plus 1.50% and matures on March 31, 2020.
(11) On November 1, 2015, this nonrecourse loan went into maturity default. The Company is working with the
loan servicer, which is expected to result in a transition of the property to the loan servicer or a receiver.
(12) The loan bears interest at LIBOR plus 2.25% and matures on March 1, 2017.
(13) The loan bears interest at LIBOR plus 2.30% and matures on October 28, 2016.
(14) NML is the lender of this loan.
(15) On February 19, 2015, the Company placed a $280,000 loan on the property that bears interest at an effective
rate of 3.55% and matures on March 6, 2026.
(16) On October 28, 2015, the Company’s joint venture in The Shops at Atlas Park placed a $57,751 loan on the
property that bears interest at LIBOR plus 2.25% and matures on October 22, 2020, including two one-year
extension options.
(17) The loan bears interest at LIBOR plus 1.75% and matures on December 16, 2018, including two one-year
extension options.
(18) On February 3, 2015, the Company’s joint venture in The Market at Estrella Falls replaced the existing loan
on the property with a new $26,500 loan that bears interest at LIBOR plus 1.70% and matures on February 5,
2020, including a one-year extension option.
(19) The loan bears interest at LIBOR plus 1.9% and matures on January 2, 2018, including a one-year extension
option.
(20) On March 2, 2015, the Company paid off in full the loan on the property. On May 12, 2015, the Company
placed a new $410,000 loan on the property that bears interest at an effective rate of 4.15% and matures on
June 1, 2026. On October 30, 2015, a 40% interest in the loan was assumed by a third party in connection
with the sale of a 40% ownership interest in the PPR Portfolio (See ‘‘Item 1. Business—Recent
Developments—Acquisitions and Dispositions’’).
(21) On October 30, 2015, the Company replaced the existing loan on the property with a new $525,000 loan that
bears interest at an effective rate of 4.00% and matures on November 1, 2027. Concurrently, a 40% interest
in the loan was assumed by a third party in connection with the sale of a 40% ownership interest in the PPR
Portfolio (See ‘‘Item 1. Business—Recent Developments—Acquisitions and Dispositions’’).
(22) On October 23, 2015, the Company placed a $200,000 loan on the property that bears interest at an effective
rate of 4.22% and matures on November 6, 2025, On October 30, 2015, a 40% interest in the loan was
assumed by a third party in connection with the sale of a 40% ownership interest in the PPR Portfolio (See
‘‘Item 1. Business—Recent Developments—Acquisitions and Dispositions’’).
(23) NML is the lender of 33.3% of the loan.
(24) On October 5, 2015, the Company paid off in full the existing loan on the property. On October 29, 2015, the
Company placed a new $550,000 loan on the property that bears interest at an effective rate of 3.65% and
matures on November 1, 2022. On October 30, 2015, a 40% interest in the loan was assumed by a third party
in connection with the sale of a 40% ownership interest in the PPR Portfolio (See ‘‘Item 1. Business—Recent
Developments—Acquisitions and Dispositions’’).
ITEM 3. LEGAL PROCEEDINGS
None of the Company, the Operating Partnership, the Management Companies or their respective
affiliates is currently involved in any material legal proceedings.
ITEM 4. MINE SAFETY DISCLOSURES
Not applicable.
37
PART II
ITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER
MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES
The common stock of the Company is listed and traded on the New York Stock Exchange under
the symbol ‘‘MAC’’. The common stock began trading on March 10, 1994 at a price of $19 per share.
In 2015, the Company’s shares traded at a high of $95.93 and a low of $71.98.
As of February 12, 2016, there were approximately 533 stockholders of record. The following table
shows high and low sales prices per share of common stock during each quarter in 2015 and 2014 and
dividends per share of common stock declared and paid by the Company during each quarter:
Quarter Ended
Market Quotation
Per Share
Dividends(1)
High
Low
Declared
Paid
March 31, 2015 . . . . . . . . . . . . . . . . . . . . . . . . .
June 30, 2015 . . . . . . . . . . . . . . . . . . . . . . . . . .
September 30, 2015 . . . . . . . . . . . . . . . . . . . . . .
December 31, 2015 . . . . . . . . . . . . . . . . . . . . . .
March 31, 2014 . . . . . . . . . . . . . . . . . . . . . . . . .
June 30, 2014 . . . . . . . . . . . . . . . . . . . . . . . . . .
September 30, 2014 . . . . . . . . . . . . . . . . . . . . . .
December 31, 2014 . . . . . . . . . . . . . . . . . . . . . .
$95.93
$86.31
$81.52
$86.29
$62.41
$68.28
$68.81
$85.55
$81.61
$74.51
$71.98
$74.55
$55.21
$61.66
$62.62
$63.25
$0.65
$0.65
$0.65
$4.68
$0.62
$0.62
$0.62
$0.65
$0.65
$0.65
$0.65
$2.68
$0.62
$0.62
$0.62
$0.65
(1) The dividends declared for the quarter ended December 31, 2015 include a special
dividend/distribution of $2.00 per share of common stock and per OP Unit that was paid
on January 6, 2016 (See ‘‘Item 1. Business—Recent Developments—Other Events and
Transactions’’).
To maintain its qualification as a REIT, the Company is required each year to distribute to
stockholders at least 90% of its net taxable income after certain adjustments. The Company paid all of
its 2015 and 2014 quarterly dividends in cash. The timing, amount and composition of future dividends
will be determined in the sole discretion of the Company’s board of directors and will depend on actual
and projected cash flow, financial condition, funds from operations, earnings, capital requirements,
annual REIT distribution requirements, contractual prohibitions or other restrictions, applicable law
and such other factors as the board of directors deems relevant. For example, under the Company’s
existing financing arrangements, the Company may pay cash dividends and make other distributions
based on a formula derived from funds from operations (See ‘‘Item 7. Management’s Discussion and
Analysis of Financial Condition and Results of Operations—Funds From Operations (‘‘FFO’’) and
Adjusted Funds From Operations (‘‘AFFO’’)’’) and only if no default under the financing agreements
has occurred, unless, under certain circumstances, payment of the distribution is necessary to enable the
Company to continue to qualify as a REIT under the Code.
Stock Performance Graph
The following graph provides a comparison, from December 31, 2010 through December 31, 2015,
of the yearly percentage change in the cumulative total stockholder return (assuming reinvestment of
dividends) of the Company, the Standard & Poor’s (‘‘S&P’’) 500 Index, the S&P Midcap 400 Index and
the FTSE NAREIT All Equity REITs Index, an industry index of publicly-traded REITs (including the
Company).
The graph assumes that the value of the investment in each of the Company’s common stock and
the indices was $100 at the close of the market on December 31, 2010.
38
Upon written request directed to the Secretary of the Company, the Company will provide any
stockholder with a list of the REITs included in the FTSE NAREIT All Equity REITs Index. The
historical information set forth below is not necessarily indicative of future performance.
Data for the FTSE NAREIT All Equity REITs Index, the S&P 500 Index and the S&P Midcap
400 Index were provided by Research Data Group.
e
u
l
a
V
x
e
d
n
I
$240
$220
$200
$180
$160
$140
$120
$100
$80
2010
2011
2012
2013
2014
2015
Period Ended
The Macerich Company
S&P 500 Index
S&P Midcap 400 Index
FTSE NAREIT All Equity REITs Index
23FEB201617205711
Copyright(cid:3) 2016 S&P, a division of The McGraw-Hill Companies Inc. All rights reserved.
The Macerich Company . . . . . . . . . . . . . .
S&P 500 Index . . . . . . . . . . . . . . . . . . . .
S&P Midcap 400 Index . . . . . . . . . . . . . .
FTSE NAREIT All Equity REITs Index . .
$100.00
100.00
100.00
100.00
$111.26
102.11
98.27
108.28
$133.23
118.45
115.84
129.62
$139.89
156.82
154.64
133.32
$205.92
178.29
169.75
170.68
$216.24
180.75
166.05
175.51
12/31/10
12/31/11
12/31/12
12/31/13
12/31/14
12/31/15
Recent Sales of Unregistered Securities
None.
39
Issuer Purchases of Equity Securities
Period
October 1, 2015 to October 31, 2015 . . . .
November 1, 2015 to November 30, 2015 .
December 1, 2015 to December 31, 2015 .
Total Number
of Shares
Purchased
Average Price
Paid per
Share(1)
—
4,140,788(3)
—
4,140,788
$ —
78.26
—
$78.26
Total Number of
Shares Purchased
as Part of Publicly
Announced Plans
or Programs
Approximate
Dollar Value of
Shares That May
Yet Be Purchased
Under the Plans
or Programs(2)
—
$
—
4,140,788(3)
800,000,000(4)
—
—
4,140,788
$800,000,000
(1) The average price paid per share is calculated on a trade date basis.
(2) On September 30, 2015, the Company’s Board of Directors authorized the repurchase of up to
$1.2 billion of the Company’s outstanding common shares over the period ending September 30,
2017, as market conditions warrant. Repurchases may be made through open market purchases,
privately negotiated transactions, structured or derivative transactions, including accelerated stock
repurchase transactions, or other methods of acquiring shares from time to time as permitted by
securities law and other legal requirements.
(3) On November 12, 2015, the Company entered into an ASR to repurchase $400.0 million of the
Company’s common stock. In accordance with the ASR (See ‘‘Item 1. Business—Recent
Developments—Other Events and Transactions’’), the Company made a prepayment of
$400.0 million and received an initial share delivery of 4,140,788 shares. On January 20, 2016, the
ASR was completed and the Company received an additional delivery of 970,609 shares.
(4) On February 17, 2016, the Company entered into another ASR to repurchase $400.0 million of the
Company’s common stock. In accordance with the ASR (See ‘‘Item 1. Business—Recent
Developments—Other Events and Transactions’’), the Company made a prepayment of
$400.0 million and received an initial share delivery of 4,222,193 shares, resulting in an
approximate dollar value that may be purchased under the program of $400.0 million.
40
ITEM 6. SELECTED FINANCIAL DATA
The following sets forth selected financial data for the Company on a historical basis. The
following data should be read in conjunction with the consolidated financial statements (and the notes
thereto) of the Company and ‘‘Management’s Discussion and Analysis of Financial Condition and
Results of Operations,’’ each included elsewhere in this Form 10-K. All dollars and share amounts are
in thousands, except per share data.
Years Ended December 31,
2015
2014
2013
2012
2011
OPERATING DATA:
Revenues:
Minimum rents(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Percentage rents
. . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Tenant recoveries . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Management Companies . . . . . . . . . . . . . . . . . . . . . . . .
$ 759,603
25,693
415,129
61,470
26,254
$ 633,571
24,350
361,119
52,226
33,981
$ 578,113
23,156
337,772
50,242
40,192
$447,321
21,388
247,593
39,980
41,235
$381,274
16,818
215,872
30,376
40,404
Total revenues . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
1,288,149
1,105,247
1,029,475
797,517
684,744
Expenses:
Shopping center and operating expenses . . . . . . . . . . . . . .
Management Companies’ operating expenses . . . . . . . . . . .
REIT general and administrative expenses . . . . . . . . . . . . .
Costs related to unsolicited takeover offer(2) . . . . . . . . . . .
Depreciation and amortization . . . . . . . . . . . . . . . . . . . .
Interest expense . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . .
(Gain) loss on early extinguishment of debt, net(3)
Total expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Equity in income of unconsolidated joint ventures(4) . . . . . . . .
Co-venture expense . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Income tax benefit(5) . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Gain (loss) on sale or write down of assets, net(6)
. . . . . . . . .
Gain on remeasurement of assets(7) . . . . . . . . . . . . . . . . . .
379,815
92,340
29,870
25,204
464,472
211,943
(1,487)
1,202,157
45,164
(11,804)
3,223
378,248
22,089
353,505
88,424
29,412
—
378,716
190,689
9,551
1,050,297
60,626
(9,490)
4,269
73,440
1,423,136
329,795
93,461
27,772
—
357,165
197,247
(1,432)
1,004,008
167,580
(8,864)
1,692
(78,057)
51,205
251,923
85,610
20,412
—
277,621
164,392
—
799,958
79,281
(6,523)
4,159
28,734
199,956
213,832
86,587
21,113
—
227,980
167,249
1,485
718,246
294,677
(5,806)
6,110
(25,639)
3,602
Income from continuing operations
. . . . . . . . . . . . . . . . .
522,912
1,606,931
159,023
303,166
239,442
Discontinued operations:(8)
Gain (loss) on disposition of assets, net . . . . . . . . . . . . . . .
Income (loss) from discontinued operations . . . . . . . . . . . .
Total income (loss) from discontinued operations . . . . . . . . .
—
—
—
—
—
—
Net income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Less net income attributable to noncontrolling interests . . . . . .
522,912
35,350
1,606,931
107,889
286,414
3,522
289,936
448,959
28,869
50,811
12,412
63,223
366,389
28,963
(67,333)
(3,034)
(70,367)
169,075
12,209
Net income attributable to the Company . . . . . . . . . . . . . . .
$ 487,562
$1,499,042
$ 420,090
$337,426
$156,866
Earnings per common share (‘‘EPS’’) attributable to the
Company—basic:
Income from continuing operations
Discontinued operations
. . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . .
Net income attributable to common stockholders . . . . . . . . .
EPS attributable to the Company—diluted:(9)(10)
Income from continuing operations
Discontinued operations
. . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . .
Net income attributable to common stockholders . . . . . . . . .
$
$
$
$
3.08
—
3.08
3.08
—
3.08
$
$
$
$
10.46
—
10.46
10.45
—
10.45
$
$
$
$
1.07
1.94
3.01
1.06
1.94
3.00
$
$
$
$
2.07
0.44
2.51
2.07
0.44
2.51
$
$
$
$
1.67
(0.49)
1.18
1.67
(0.49)
1.18
41
BALANCE SHEET DATA:
Investment in real estate (before accumulated
depreciation) . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total assets
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total mortgage and notes payable . . . . . . . . . . . . . . . .
Equity(11) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
OTHER DATA:
Funds from operations (‘‘FFO’’)—diluted(12) . . . . . . . . .
Cash flows provided by (used in):
Operating activities . . . . . . . . . . . . . . . . . . . . . . . .
Investing activities . . . . . . . . . . . . . . . . . . . . . . . . .
Financing activities . . . . . . . . . . . . . . . . . . . . . . . .
Number of Centers at year end . . . . . . . . . . . . . . . . . .
Regional Shopping Centers portfolio occupancy(13) . . . . .
Regional Shopping Centers portfolio sales per square
As of December 31,
2015
2014
2013
2012
2011
$10,689,656
$11,258,576
$ 5,283,742
$ 5,071,239
$12,777,882
$13,121,778
$ 6,292,400
$ 6,039,849
$9,181,338
$9,075,250
$4,582,727
$3,718,717
$9,012,706
$9,311,209
$5,261,370
$3,416,251
$7,489,735
$7,938,549
$4,206,074
$3,164,651
$
642,268
$
542,754
$ 527,574
$ 577,862
$ 399,559
$
540,377
$ (101,024)
$ (437,750)
58
96.1%
$
400,706
$ (255,791)
$ (129,723)
60
95.8%
$ 422,035
$ 271,867
$ (689,980)
64
94.6%
$ 351,296
$ (963,374)
$ 610,623
70
93.8%
$ 237,285
$ (212,086)
$ (403,596)
79
92.7%
foot(14) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$
635
$
587
$
562
$
517
$
489
Weighted average number of shares outstanding—EPS
basic . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
157,916
143,144
139,598
134,067
131,628
Weighted average number of shares outstanding—EPS
diluted(10) . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Distributions declared per common share(15) . . . . . . . . .
158,060
6.63
$
143,291
2.51
139,680
2.36
$
134,148
2.23
$
131,628
2.05
$
$
(1) Minimum rents were increased by amortization of above and below-market leases of $16.5 million, $9.1 million,
$6.6 million, $5.2 million and $9.3 million for the years ended December 31, 2015, 2014, 2013, 2012 and 2011, respectively.
(2) Costs related to unsolicited takeover offer from Simon. See ‘‘Item 1. Business—Recent Developments—Other Events and
Transactions’’.
(3) The Company repurchased $180.3 million of its convertible senior notes (‘‘Senior Notes’’) during the year ended
December 31, 2011 that resulted in a loss of $1.5 million on the early extinguishment of debt. The (gain) loss on early
extinguishment of debt, net for the year ended December 31, 2015 includes the loss on the extinguishment of a term loan
of $0.6 million. The (gain) loss on early extinguishment of debt, net for the years ended December 31, 2015, 2014 and 2013
also includes the (gain) loss on the extinguishment of mortgage notes payable of $(2.1) million, $9.6 million and $(1.4)
million, respectively.
(4) On February 24, 2011, the Company’s joint venture in Kierland Commons Investment LLC (‘‘KCI’’) acquired an additional
ownership interest in PHXAZ/Kierland Commons, L.L.C. (‘‘Kierland Commons’’) for $105.6 million. The Company’s share
of the purchase price consisted of a cash payment of $34.2 million and the assumption of a pro rata share of debt of
$18.6 million. As a result of this transaction, KCI increased its ownership interest in Kierland Commons from 49% to
100%. KCI accounted for the acquisition as a business combination achieved in stages and recognized a remeasurement
gain of $25.0 million based on the acquisition date fair value and its previously held investment in Kierland Commons. As a
result of this transaction, the Company’s ownership interest in KCI increased from 24.5% to 50%. The Company’s pro rata
share of the gain recognized by KCI was $12.5 million and was included in equity in income from unconsolidated joint
ventures.
On February 28, 2011, the Company, in a 50/50 joint venture, acquired The Shops at Atlas Park for a total purchase price
of $53.8 million. The Company’s share of the purchase price was $26.9 million.
On February 28, 2011, the Company acquired the remaining 50% ownership interest in Desert Sky Mall that it did not
previously own for $27.6 million. The purchase price was funded by a cash payment of $1.9 million and the assumption of
the third party’s pro rata share of the mortgage note payable on the property of $25.8 million. Prior to the acquisition, the
Company had accounted for its investment in Desert Sky Mall under the equity method. As of the date of acquisition, the
Company has included Desert Sky Mall in its consolidated financial statements.
On April 1, 2011, the Company’s joint venture in SDG Macerich Properties, L.P. (‘‘SDG Macerich’’) conveyed Granite Run
Mall to the mortgage note lender by a deed-in-lieu of foreclosure. The mortgage note was non-recourse. The Company’s
pro rata share of the gain on the extinguishment of debt was $7.8 million.
On December 31, 2011, the Company and its joint venture partner reached agreement for the distribution and conveyance
of interests in SDG Macerich that owned 11 regional shopping centers in a 50/50 partnership. Six of the 11 assets were
distributed to the Company on December 31, 2011. The Company received 100% ownership of Eastland Mall, Lake Square
42
Mall, SouthPark Mall, Southridge Center, NorthPark Mall and Valley Mall. These wholly-owned assets were recorded at
fair value at the date of transfer, which resulted in a gain of $188.3 million. The gain reflected the fair value of the net
assets received in excess of the book value of the Company’s interest in SDG Macerich.
On March 30, 2012, the Company sold its 50% ownership interest in Chandler Village Center for a total sales price of
$14.8 million, resulting in a gain on the sale of assets of $8.2 million. The sales price was funded by a cash payment of
$6.0 million and the assumption of the Company’s share of the mortgage note payable on the property of $8.8 million. The
Company used the cash proceeds from the sale to pay down its line of credit and for general corporate purposes.
On March 30, 2012, the Company sold its 50% ownership interest in Chandler Festival for a total sales price of
$31.0 million, resulting in a gain on the sale of assets of $12.3 million. The sales price was funded by a cash payment of
$16.2 million and the assumption of the Company’s share of the mortgage note payable on the property of $14.8 million.
The Company used the cash proceeds from the sale to pay down its line of credit and for general corporate purposes.
On March 30, 2012, the Company’s joint venture in SanTan Village Power Center sold the property for $54.8 million,
resulting in a gain on the sale of assets of $23.3 million for the joint venture. The Company’s pro rata share of the gain
recognized was $7.9 million, net of noncontrolling interests of $3.6 million. The Company used its share of the proceeds
from the sale to pay down its line of credit and for general corporate purposes.
On May 31, 2012, the Company sold its 50% ownership interest in Chandler Gateway for a total sales price of
$14.3 million, resulting in a gain on the sale of assets of $3.4 million. The sales price was funded by a cash payment of
$4.9 million and the assumption of the Company’s share of the mortgage note payable on the property of $9.4 million. The
Company used the cash proceeds from the sale to pay down its line of credit and for general corporate purposes.
On August 10, 2012, the Company was bought out of its ownership interest in NorthPark Center for $118.8 million,
resulting in a gain on the sale of assets of $24.6 million. The Company used the cash proceeds from the sale to pay down
its line of credit.
On October 3, 2012, the Company acquired the remaining 75% ownership interest in FlatIron Crossing that it did not
previously own for $310.4 million. The purchase price was funded by a cash payment of $195.9 million and the assumption
of the third party’s pro rata share of the mortgage note payable on the property of $114.5 million. As a result of this
transaction, the Company recognized a remeasurement gain of $84.2 million.
On October 26, 2012, the Company acquired the remaining 33.3% ownership interest in Arrowhead Towne Center that it
did not previously own for $144.4 million. The purchase price was funded by a cash payment of $69.0 million and the
assumption of the third party’s pro rata share of the mortgage note payable on the property of $75.4 million. As a result of
this transaction, the Company recognized a remeasurement gain of $115.7 million.
On May 29, 2013, the Company’s joint venture in Pacific Premier Retail LLC sold Redmond Town Center Office for
$185.0 million, resulting in a gain on the sale of assets of $89.2 million to the joint venture. The Company’s share of the
gain was $44.4 million. The Company used its share of the proceeds from the sale to pay down its line of credit and for
general corporate purposes.
On June 12, 2013, the Company’s joint venture in Pacific Premier Retail LLC sold Kitsap Mall for $127.0 million, resulting
in a gain on the sale of assets of $55.2 million to the joint venture. The Company’s share of the gain was $28.1 million. The
Company used its share of the proceeds from the sale to pay down its line of credit and for general corporate purposes.
On August 1, 2013, the Company’s joint venture in Pacific Premier Retail LLC sold Redmond Town Center for
$127.0 million, resulting in a gain on the sale of assets of $38.4 million to the joint venture. The Company’s share of the
gain was $18.3 million. The Company used its share of the proceeds from the sale to pay down its line of credit and for
general corporate purposes.
On September 17, 2013, the Company’s joint venture in Camelback Colonnade was restructured. As a result of the
restructuring, the Company’s ownership interest in Camelback Colonnade decreased from 73.2% to 67.5%. Prior to the
restructuring, the Company had accounted for its investment in Camelback Colonnade under the equity method of
accounting due to substantive participation rights held by the outside partners. Upon completion of the restructuring, these
substantive participation rights were terminated and the Company obtained voting control of the joint venture. As a result
of this transaction, the Company recognized a remeasurement gain of $36.3 million. Since the date of the restructuring, the
Company included Camelback Colonnade in its consolidated financial statements until it was sold on December 29, 2014.
On October 8, 2013, the Company’s joint venture in Ridgmar Mall sold the property for $60.9 million, which resulted in a
gain on the sale of assets of $6.2 million to the joint venture. The Company’s share of the gain was $3.1 million. The cash
proceeds from the sale were used to pay off the $51.7 million mortgage loan on the property and the remaining
$9.2 million net of closing costs was distributed to the partners. The Company used its share of the proceeds from the sale
to pay down its line of credit and for general corporate purposes.
43
On October 24, 2013, the Company acquired the remaining 33.3% ownership interest in Superstition Springs Center that it
did not previously own for $46.2 million. The purchase price was funded by a cash payment of $23.7 million and the
assumption of the third party’s pro rata share of the mortgage note payable on the property of $22.5 million. Prior to the
acquisition, the Company had accounted for its investment in Superstition Springs Center under the equity method of
accounting. As a result of this transaction, the Company recognized a remeasurement gain of $14.9 million. Since the date
of acquisition, the Company has included Superstition Springs Center in its consolidated financial statements.
On June 4, 2014, the Company acquired the remaining 49.0% ownership interest in Cascade Mall that it did not previously
own for a cash payment of $15.2 million. The Company purchased Cascade Mall from its joint venture in Pacific Premier
Retail LLC. Prior to the acquisition, the Company had accounted for its investment in Cascade Mall under the equity
method of accounting. Since the date of acquisition, the Company has included Cascade Mall in its consolidated financial
statements.
On July 30, 2014, the Company formed a joint venture with Pennsylvania Real Estate Investment Trust to redevelop
Fashion Outlets of Philadelphia. The Company invested $106.8 million for a 50% ownership interest in the joint venture,
which was funded by borrowings under its line of credit.
On August 28, 2014, the Company sold its 30% ownership interest in Wilshire Boulevard for a total sales price of
$17.1 million, resulting in a gain on the sale of assets of $9.0 million. The sales price was funded by a cash payment of
$15.4 million and the assumption of the Company’s share of the mortgage note payable on the property of $1.7 million.
The Company used the cash proceeds from the sale to pay down its line of credit and for general corporate purposes.
On November 14, 2014, the Company acquired the remaining 49% ownership interest that it did not previously own in two
separate joint ventures, Pacific Premier Retail LLC and Queens JV LP, which together owned five Centers: Lakewood
Center, Los Cerritos Center, Queens Center, Stonewood Center and Washington Square (collectively referred to herein as
the ‘‘PPR Queens Portfolio’’). The total consideration of approximately $1.8 billion was funded by the direct issuance of
approximately $1.2 billion of common stock of the Company and the assumption of the third party’s pro rata share of the
mortgage notes payable on the properties of $672.1 million.
On February 17, 2015, the Company acquired the remaining 50% ownership interest in Inland Center that it did not
previously own for $51.3 million. The purchase price was funded by a cash payment of $26.3 million and the assumption of
the third party’s share of the mortgage note payable on the property of $25.0 million. Concurrent with the purchase of the
joint venture interest, the Company paid off the $50.0 million mortgage note payable on the property. The cash payment
was funded by borrowings under the Company’s line of credit.
On April 30, 2015, the Company entered into a 50/50 joint venture with Sears to own nine freestanding stores located at
Arrowhead Towne Center, Chandler Fashion Center, Danbury Fair Mall, Deptford Mall, Freehold Raceway Mall, Los
Cerritos Center, South Plains Mall, Vintage Faire Mall and Washington Square. The Company invested $150.0 million for a
50% interest in the joint venture, which was funded by borrowings under the Company’s line of credit.
On October 30, 2015, the Company sold a 40% ownership interest in Pacific Premier Retail LLC (the ‘‘PPR Portfolio’’),
which owns Lakewood Center, Los Cerritos Center, South Plains Mall and Washington Square for a total sales price of
$1.3 billion, resulting in a gain on sale of assets of $311.2 million. The sales price was funded by a cash payment of
$545.6 million and the assumption of the pro rata share of the mortgage notes payable on the properties of $713.0 million.
The Company used the cash proceeds from the sale to pay down its line of credit and for general corporate purposes,
which included funding the ASR and Special Dividend (See ‘‘Item 1. Business—Recent Developments—Other Events and
Transactions’’).
(5) The Company’s taxable REIT subsidiaries are subject to corporate level income taxes (See Note 20—Income Taxes in the
Company’s Notes to the Consolidated Financial Statements).
(6) Gain (loss) on sale or write down of assets includes the gain of $311.2 million from the sale of a 40% ownership interest in
the PPR Portfolio and $73.7 million from the sale of Panorama Mall during the year ended December 31, 2015 and the
gain of $121.9 million from the sale of South Towne Center during the year ended December 31, 2014.
(7) Gain on remeasurement of assets includes $22.1 million from the acquisition of Inland Center during the year ended
December 31, 2015, $1.4 billion from the acquisition of the PPR Queens Portfolio during the year ended December 31,
2014, $36.3 million from the acquisition of Camelback Colonnade and $14.9 million from the acquisition of Superstition
Springs Center during the year ended December 31, 2013, $84.2 million from the acquisition of FlatIron Crossing and
$115.7 million from the acquisition of Arrowhead Towne Center during the year ended December 31, 2012, and $1.9 million
from the acquisition of Desert Sky Mall and $1.7 million from the acquisition of Superstition Springs Land during the year
ended December 31, 2011.
(8) Discontinued operations include the following:
On March 4, 2011, the Company sold a former Mervyn’s store in Santa Fe, New Mexico for $3.7 million, resulting in a loss
44
on the sale of assets of $1.9 million. The proceeds from the sale were used for general corporate purposes.
In June 2011, the Company recorded an impairment charge of $35.7 million related to Shoppingtown Mall. As a result of
the maturity default on the mortgage note payable and the corresponding reduction of the expected holding period, the
Company wrote down the carrying value of the long-lived assets to its estimated fair value of $39.0 million. On
December 30, 2011, the Company conveyed Shoppingtown Mall to the lender by a deed-in-lieu of foreclosure. As a result,
the Company recognized a $3.9 million additional loss on the disposal of the asset.
On October 14, 2011, the Company sold a former Mervyn’s store in Salt Lake City, Utah for $8.1 million, resulting in a
gain on the sale of assets of $3.8 million. The proceeds from the sale were used for general corporate purposes.
On November 30, 2011, the Company sold a former Mervyn’s store in West Valley City, Utah for $2.3 million, resulting in a
loss on the sale of assets of $0.2 million. The proceeds from the sale were used for general corporate purposes.
In March 2012, the Company recorded an impairment charge of $54.3 million related to Valley View Center. As a result of
the sale of the property on April 23, 2012, the Company wrote down the carrying value of the long-lived assets to their
estimated fair value of $33.5 million, which was equal to the sales price of the property. On April 23, 2012, the property
was sold by a court appointed receiver, which resulted in a gain on the extinguishment of debt of $104.0 million.
On April 30, 2012, the Company sold The Borgata for $9.2 million, resulting in a loss on the sale of assets of $1.3 million.
The Company used the proceeds from the sale to pay down its line of credit and for general corporate purposes.
On May 11, 2012, the Company sold a former Mervyn’s store in Montebello, California for $20.8 million, resulting in a loss
on the sale of assets of $0.4 million. The proceeds from the sale were used for general corporate purposes.
On May 17, 2012, the Company sold Hilton Village for $24.8 million, resulting in a gain on the sale of assets of
$3.1 million. The Company used the proceeds from the sale to pay down its line of credit and for general corporate
purposes.
On May 31, 2012, the Company conveyed Prescott Gateway to the mortgage note lender by a deed-in-lieu of foreclosure.
As a result of the conveyance, the Company recognized a gain on the extinguishment of debt of $16.3 million.
On June 28, 2012, the Company sold Carmel Plaza for $52.0 million, resulting in a gain on the sale of assets of
$7.8 million. The Company used the proceeds from the sale to pay down its line of credit.
On May 31, 2013, the Company sold Green Tree Mall for $79.0 million, resulting in a gain on the sale of assets of
$59.8 million. The Company used the proceeds from the sale to pay down its line of credit and for general corporate
purposes.
On June 4, 2013, the Company sold Northridge Mall and Rimrock Mall in a combined transaction for $230.0 million,
resulting in a gain on the sale of assets of $82.2 million. The Company used the proceeds from the sale to pay down its line
of credit and for general corporate purposes.
On September 11, 2013, the Company sold a former Mervyn’s store in Milpitas, California for $12.0 million, resulting in a
loss on the sale of assets of $2.6 million. The Company used the proceeds from the sale to pay down its line of credit and
for general corporate purposes.
On September 30, 2013, the Company conveyed Fiesta Mall to the mortgage note lender by a deed-in-lieu of foreclosure.
The mortgage loan was non-recourse. As a result of the conveyance, the Company recognized a gain on the extinguishment
of debt of $1.3 million.
On October 15, 2013, the Company sold a former Mervyn’s store in Midland, Texas for $5.7 million, resulting in a loss on
the sale of assets of $2.0 million. The Company used the proceeds from the sale to pay down its line of credit and for
general corporate purposes.
On October 23, 2013, the Company sold a former Mervyn’s store in Grand Junction, Colorado for $5.4 million, resulting in
a gain on the sale of assets of $1.7 million. The Company used the proceeds from the sale to pay down its line of credit
and for general corporate purposes.
On December 4, 2013, the Company sold a former Mervyn’s store in Livermore, California for $10.5 million, resulting in a
loss on the sale of assets of $5.3 million. The Company used the proceeds from the sale to pay down its line of credit and
for general corporate purposes.
On December 11, 2013, the Company sold Chesterfield Towne Center and Centre at Salisbury in a combined transaction
for $292.5 million, resulting in a gain on the sale of assets of $151.5 million. The sales price was funded by a cash payment
of $67.8 million, the assumption of the $109.7 million mortgage note payable on Chesterfield Towne Center and the
assumption of the $115.0 million mortgage note payable on Centre at Salisbury. The Company used the proceeds from the
sale to pay down its line of credit and for general corporate purposes.
45
The Company has classified the results of operations and gain or loss on sale for all of the above dispositions as
discontinued operations for all years presented. On April 10, 2014, the Financial Accounting Standards Board issued
Accounting Standards Update (‘‘ASU’’) 2014-08, which amended the definition of discontinued operations and requires
additional disclosures for disposal transactions that do not meet the revised discontinued operations criteria. The Company
adopted this pronouncement on January 1, 2014. As a result, properties sold after 2013 have been included in gain (loss) on
sale or write down of assets, net, in continuing operations.
(9) Assumes the conversion of Operating Partnership units to the extent they are dilutive to the EPS computation. It also
assumes the conversion of MACWH, LP common and preferred units to the extent that they are dilutive to the EPS
computation.
(10) Includes the dilutive effect, if any, of share and unit-based compensation plans and the Senior Notes then outstanding
calculated using the treasury stock method and the dilutive effect, if any, of all other dilutive securities calculated using the
‘‘if converted’’ method.
(11) Equity includes the noncontrolling interests in the Operating Partnership, nonredeemable noncontrolling interests in
consolidated joint ventures and common and non-participating convertible preferred units of MACWH, LP.
(12) See ‘‘Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations—Funds From
Operations (‘‘FFO’’) and Adjusted Funds From Operations (‘‘AFFO’’)’’.
(13) Occupancy is the percentage of Mall and Freestanding GLA leased as of the last day of the reporting period. Centers
under development and redevelopment are excluded from occupancy. As a result, occupancy for the years ended
December 31, 2015 and 2014 excluded Broadway Plaza, Fashion Outlets of Niagara Falls USA, Fashion Outlets of
Philadelphia, Paradise Valley Mall, SouthPark Mall and Westside Pavilion. Occupancy for the year ended December 31,
2013 excluded Paradise Valley Mall. Occupancy for the years ended December 31, 2012 and 2011 excluded The Shops at
Atlas Park and Southridge Center.
In addition, occupancy for the year ended December 31, 2015 excluded Flagstaff Mall, which is in maturity default and is
expected to be transitioned to the loan servicer or receiver. Occupancy for the year ended December 31, 2014 excluded
Great Northern Mall, which was conveyed to the mortgage lender by a deed-in-lieu of foreclosure in 2015. Occupancy for
the year ended December 31, 2013 excluded Rotterdam Square, which was sold on January 15, 2014. Furthermore,
occupancy for the year ended December 31, 2011 excluded Valley View Center, which was sold by a court-appointed
receiver in 2012.
(14) Sales per square foot are based on reports by retailers leasing Mall Stores and Freestanding Stores for the trailing twelve
months for tenants which have occupied such stores for a minimum of twelve months. Sales per square foot also are based
on tenants 10,000 square feet and under for Regional Shopping Centers. The sales per square foot exclude Centers under
development and redevelopment. As a result, sales per square foot for the years ended December 31, 2015 and 2014
excluded Broadway Plaza, Fashion Outlets of Niagara Falls USA, Fashion Outlets of Philadelphia, Paradise Valley Mall,
SouthPark Mall and Westside Pavilion. Sales per square foot for the year ended December 31, 2013 excluded Paradise
Valley Mall.
In addition, sales per square foot for the year ended December 31, 2015 excluded Flagstaff Mall, which is in maturity
default and is expected to be transitioned to the loan servicer or receiver. Sales per square foot for the year ended
December 31, 2014 excluded Great Northern Mall, which was conveyed to the mortgage lender by a deed-in-lieu of
foreclosure in 2015. Sales per square foot for the year ended December 31, 2013 excluded Rotterdam Square, which was
sold on January 15, 2014. Furthermore, sales per square foot for the year ended and sales per square foot for the year
ended December 31, 2011 excluded Valley View Center, which was sold by a court-appointed receiver in 2012.
(15) On October 30, 2015, the Company declared two special dividends/distributions (‘‘Special Dividend’’), each of $2.00 per
share of common stock and per OP Unit. The first Special Dividend was paid on December 8, 2015 to stockholders and OP
Unit holders of record on November 12, 2015. The second Special Dividend was paid on January 6, 2016 to common
stockholders and OP Unit holders of record on November 12, 2015. The Special Dividends were funded from proceeds in
connection with the financing and sale of ownership interests in the PPR Portfolio and Arrowhead Towne Center.
46
ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
Management’s Overview and Summary
The Company is involved in the acquisition, ownership, development, redevelopment, management
and leasing of regional and community/power shopping centers located throughout the United States.
The Company is the sole general partner of, and owns a majority of the ownership interests in, the
Operating Partnership. As of December 31, 2015, the Operating Partnership owned or had an
ownership interest in 51 regional shopping centers and seven community/power shopping centers. These
58 regional and community/power shopping centers (which include any related office space) consist of
approximately 55 million square feet of gross leasable area (‘‘GLA’’) and are referred to herein as the
‘‘Centers’’. The Centers consist of consolidated Centers (‘‘Consolidated Centers’’) and unconsolidated
joint venture Centers (‘‘Unconsolidated Joint Venture Centers’’) as set forth in ‘‘Item 2. Properties,’’
unless the context otherwise requires. The Company is a self-administered and self-managed REIT and
conducts all of its operations through the Operating Partnership and the Management Companies.
The following discussion is based primarily on the consolidated financial statements of the
Company for the years ended December 31, 2015, 2014 and 2013. It compares the results of operations
and cash flows for the year ended December 31, 2015 to the results of operations and cash flows for
the year ended December 31, 2014. Also included is a comparison of the results of operations and cash
flows for the year ended December 31, 2014 to the results of operations and cash flows for the year
ended December 31, 2013. This information should be read in conjunction with the accompanying
consolidated financial statements and notes thereto.
Acquisitions and Dispositions:
The financial statements reflect the following acquisitions, dispositions and changes in ownership
subsequent to the occurrence of each transaction.
On January 24, 2013, the Company acquired Green Acres Mall, a 1,799,000 square foot regional
shopping center in Valley Stream, New York, for a purchase price of $500.0 million. The purchase price
was funded from the placement of a $325.0 million mortgage note on the property and $175.0 million
from borrowings under the Company’s line of credit.
On April 25, 2013, the Company acquired a 19 acre parcel of land adjacent to Green Acres Mall
for $22.6 million. The payment was funded by borrowings from the Company’s line of credit.
On May 29, 2013, the Company’s joint venture in Pacific Premier Retail LLC sold Redmond Town
Center Office, a 582,000 square foot office building in Redmond, Washington, for $185.0 million,
resulting in a gain on the sale of assets of $89.2 million to the joint venture. The Company’s share of
the gain was $44.4 million. The Company used its share of the proceeds from the sale to pay down its
line of credit and for general corporate purposes.
On May 31, 2013, the Company sold Green Tree Mall, a 793,000 square foot regional shopping
center in Clarksville, Indiana, for $79.0 million, resulting in a gain on the sale of assets of $59.8 million.
The Company used the proceeds from the sale to pay down its line of credit and for general corporate
purposes.
On June 4, 2013, the Company sold Northridge Mall, an 890,000 square foot regional shopping
center in Salinas, California, and Rimrock Mall, a 603,000 square foot regional shopping center in
Billings, Montana. The properties were sold in a combined transaction for $230.0 million, resulting in a
gain on the sale of assets of $82.2 million. The Company used the proceeds from the sale to pay down
its line of credit and for general corporate purposes.
47
On June 12, 2013, the Company’s joint venture in Pacific Premier Retail LLC sold Kitsap Mall, an
846,000 square foot regional shopping center in Silverdale, Washington, for $127.0 million, resulting in
a gain on the sale of assets of $55.2 million to the joint venture. The Company’s share of the gain was
$28.1 million. The Company used its share of the proceeds from the sale to pay down its line of credit
and for general corporate purposes.
On August 1, 2013, the Company’s joint venture in Pacific Premier Retail LLC sold Redmond
Town Center, a 695,000 square foot community center in Redmond, Washington, for $127.0 million,
resulting in a gain on the sale of assets of $38.4 million to the joint venture. The Company’s share of
the gain was $18.3 million. The Company used its share of the proceeds from the sale to pay down its
line of credit and for general corporate purposes.
On September 11, 2013, the Company sold a former Mervyn’s store in Milpitas, California for
$12.0 million, resulting in a loss on the sale of assets of $2.6 million. The Company used the proceeds
from the sale to pay down its line of credit and for general corporate purposes.
On September 17, 2013, the Company’s joint venture in Camelback Colonnade, a 619,000 square
foot community center in Phoenix, Arizona, was restructured. As a result of the restructuring, the
Company’s ownership interest in Camelback Colonnade decreased from 73.2% to 67.5%. Prior to the
restructuring, the Company had accounted for its investment in Camelback Colonnade under the equity
method of accounting due to substantive participation rights held by the outside partners. Upon
completion of the restructuring, these substantive participation rights were terminated and the
Company obtained voting control of the joint venture. As a result of the restructuring, the Company
recognized a gain on remeasurement of assets of $36.3 million. This transaction is referred to herein as
the ‘‘Camelback Colonnade Restructuring.’’ Since the date of the restructuring, the Company included
Camelback Colonnade in its consolidated financial statements until it was sold on December 29, 2014.
On October 8, 2013, the Company’s joint venture in Ridgmar Mall, a 1,273,000 square foot
regional shopping center in Fort Worth, Texas, sold the property for $60.9 million, resulting in a gain
on the sale of assets of $6.2 million to the joint venture. The Company’s share of the gain was
$3.1 million. The proceeds from the sale were used to pay off the $51.7 million mortgage loan on the
property and the remaining $9.2 million, net of closing costs, was distributed to the partners. The
Company used its share of the proceeds from the sale to pay down its line of credit and for general
corporate purposes.
On October 15, 2013, the Company sold a former Mervyn’s store in Midland, Texas for
$5.7 million, resulting in a loss on the sale of assets of $2.0 million. The Company used the proceeds
from the sale to pay down its line of credit and for general corporate purposes.
On October 23, 2013, the Company sold a former Mervyn’s store in Grand Junction, Colorado for
$5.4 million, resulting in a gain on the sale of assets of $1.7 million. The Company used the proceeds
from the sale to pay down its line of credit and for general corporate purposes.
On October 24, 2013, the Company acquired the remaining 33.3% ownership interest in
Superstition Springs Center that it did not previously own for $46.2 million. The purchase price was
funded by a cash payment of $23.7 million and the assumption of the third party’s pro rata share of the
mortgage note payable on the property of $22.5 million. As a result of the acquisition, the Company
recognized a gain on remeasurement of assets of $14.9 million.
On December 4, 2013, the Company sold a former Mervyn’s store in Livermore, California for
$10.5 million, resulting in a loss on the sale of assets of $5.3 million. The Company used the proceeds
from the sale to pay down its line of credit and for general corporate purposes.
On December 11, 2013, the Company sold Chesterfield Towne Center, a 1,016,000 square foot
regional shopping center in Richmond, Virginia, and Centre at Salisbury, an 862,000 square foot
48
regional shopping center in Salisbury, Maryland. The properties were sold in a combined transaction
for $292.5 million, resulting in a gain on the sale of assets of $151.5 million. The sales price was funded
by a cash payment of $67.8 million, the assumption of the $109.7 million mortgage note payable on
Chesterfield Towne Center and the assumption of the $115.0 million mortgage note payable on Centre
at Salisbury. The Company used the cash proceeds from the sale to pay down its line of credit and for
general corporate purposes.
On January 15, 2014, the Company sold Rotterdam Square, a 585,000 square foot regional
shopping center in Schenectady, New York, for $8.5 million, resulting in a loss on the sale of assets of
$0.5 million. The Company used the proceeds from the sale to pay down its line of credit and for
general corporate purposes.
On February 14, 2014, the Company sold Somersville Towne Center, a 348,000 square foot regional
shopping center in Antioch, California, for $12.3 million, resulting in a loss on the sale of assets of
$0.3 million. The Company used the proceeds from the sale to pay down its line of credit and for
general corporate purposes.
On March 17, 2014, the Company sold Lake Square Mall, a 559,000 square foot regional shopping
center in Leesburg, Florida, for $13.3 million, resulting in a loss on the sale of assets of $0.9 million.
The sales price was funded by a cash payment of $3.7 million and the issuance of two notes receivable
totaling $9.6 million. The Company used the cash proceeds from the sale to pay down its line of credit
and for general corporate purposes.
On June 4, 2014, the Company acquired the remaining 49% ownership interest in Cascade Mall, a
589,000 square foot regional shopping center in Burlington, Washington, that it did not previously own
for a cash payment of $15.2 million. The Company purchased Cascade Mall from its joint venture
partner in Pacific Premier Retail LLC. The cash payment was funded by borrowings under the
Company’s line of credit.
On July 7, 2014, the Company sold a former Mervyn’s store in El Paso, Texas for $3.6 million,
resulting in a loss on the sale of assets of $0.2 million. The Company used the proceeds from the sale
to pay down its line of credit and for general corporate purposes.
On July 30, 2014, the Company formed a joint venture with Pennsylvania Real Estate Investment
Trust to redevelop Fashion Outlets of Philadelphia, a 1,376,000 square foot regional shopping center in
Philadelphia, Pennsylvania. The Company invested $106.8 million for a 50% interest in the joint
venture, which was funded by borrowings under its line of credit.
On August 28, 2014, the Company sold a former Mervyn’s store in Thousand Oaks, California for
$3.5 million, resulting in a loss on the sale of assets of $0.1 million. The Company used the proceeds
from the sale to pay down its line of credit and for general corporate purposes.
On August 28, 2014, the Company sold its 30% ownership interest in Wilshire Boulevard, a
40,000 square foot freestanding store in Santa Monica, California, for a total sales price of
$17.1 million, resulting in a gain on the sale of assets of $9.0 million. The sales price was funded by a
cash payment of $15.4 million and the assumption of the Company’s share of the mortgage note
payable on the property of $1.7 million. The Company used the cash proceeds from the sale to pay
down its line of credit and for general corporate purposes.
On September 11, 2014, the Company sold a leasehold interest in a former Mervyn’s store in
Laredo, Texas for $1.2 million, resulting in a gain on the sale of assets of $0.3 million. The Company
used the proceeds from the sale to pay down its line of credit and for general corporate purposes.
On October 10, 2014, the Company sold a former Mervyn’s store in Marysville, California for
$1.9 million. The Company used the proceeds from the sale to pay down its line of credit and for
general corporate purposes.
49
On October 31, 2014, the Company sold South Towne Center, a 1,278,000 square foot regional
shopping center in Sandy, Utah, for $205.0 million, resulting in a gain on the sale of assets of
$121.9 million. The Company used the proceeds from the sale to pay down its line of credit and for
general corporate purposes.
On October 31, 2014, the Company acquired the remaining 40% ownership interest in Fashion
Outlets of Chicago, a 537,000 square foot outlet center in Rosemont, Illinois, that it did not previously
own for $70.0 million. The purchase price was funded by a cash payment of $55.9 million and the
settlement of $14.1 million in notes receivable. The cash payment was funded by borrowings under the
Company’s line of credit.
On November 13, 2014, the Company formed a joint venture to develop Fashion Outlets of San
Francisco, a 500,000 square foot outlet center, in San Francisco, California. In connection with the
formation of the joint venture, the Company issued a note receivable for $65.1 million to its joint
venture partner that bears interest at LIBOR plus 2.0% and matures upon the completion of certain
milestones in connection with the development of Fashion Outlets of San Francisco. The note
receivable was funded by borrowings under the Company’s line of credit.
On November 14, 2014, the Company acquired the remaining 49% ownership interest that it did
not previously own in two separate joint ventures, Pacific Premier Retail LLC and Queens JV LP,
which together owned five Centers: Lakewood Center, a 2,075,000 square foot regional shopping center
in Lakewood, California; Los Cerritos Center, a 1,292,000 square foot regional shopping center in
Cerritos, California; Queens Center, a 966,000 square foot regional shopping center in Queens,
New York; Stonewood Center, a 932,000 square foot regional shopping center in Downey, California;
and Washington Square, a 1,441,000 square foot regional shopping center in Portland, Oregon
(collectively referred to herein as the ‘‘PPR Queens Portfolio’’). The total consideration of
approximately $1.8 billion was funded by the direct issuance of approximately $1.2 billion of common
stock of the Company and the assumption of the third party’s pro rata share of the mortgage notes
payable on the properties of $672.1 million. As a result of the acquisition, the Company recognized a
gain on remeasurement of assets of $1.4 billion.
On November 20, 2014, the Company purchased a 45% ownership interest in 443 North Wabash
Avenue, a 65,000 square foot undeveloped site adjacent to the Company’s joint venture in The Shops
at North Bridge in Chicago, Illinois, for a cash payment of $18.9 million. The cash payment was funded
by borrowings under the Company’s line of credit.
On December 29, 2014, the Company sold its 67.5% ownership interest in its consolidated joint
venture in Camelback Colonnade, a 619,000 square foot community center in Phoenix, Arizona, for
$92.9 million, resulting in a gain on the sale of assets of $24.6 million. The sales price was funded by a
cash payment of $61.2 million and the assumption of the Company’s share of the mortgage note
payable on the property of $31.7 million. The Company used the cash proceeds from the sale to pay
down its line of credit and for general corporate purposes.
On February 17, 2015, the Company acquired the remaining 50% ownership interest in Inland
Center, an 866,000 square foot regional shopping center in San Bernardino, California, that it did not
previously own for $51.3 million. The purchase price was funded by a cash payment of $26.3 million
and the assumption of the third party’s share of the mortgage note payable on the property of
$25.0 million. Concurrent with the purchase of the joint venture interest, the Company paid off the
$50.0 million loan on the property. The cash payment was funded by borrowings under the Company’s
line of credit. As a result of the acquisition, the Company recognized a gain on the remeasurement of
assets of $22.1 million.
On April 30, 2015, the Company entered into a 50/50 joint venture with Sears to own nine
freestanding stores located at Arrowhead Towne Center, Chandler Fashion Center, Danbury Fair Mall,
50
Deptford Mall, Freehold Raceway Mall, Los Cerritos Center, South Plains Mall, Vintage Faire Mall
and Washington Square. The Company invested $150.0 million for a 50% ownership interest in the
joint venture, which was funded by borrowings under the Company’s line of credit.
On October 30, 2015, the Company sold a 40% ownership interest in Pacific Premier Retail LLC
(the ‘‘PPR Portfolio’’), which owns Lakewood Center, a 2,075,000 square foot regional shopping center
in Lakewood, California; Los Cerritos Center, a 1,292,000 square foot regional shopping center in
Cerritos, California; South Plains Mall, a 1,127,000 square foot regional shopping center in Lubbock,
Texas; and Washington Square, a 1,441,000 square foot regional shopping center in Portland, Oregon,
for a total sales price of $1.3 billion, resulting in a gain on the sale of assets of $311.2 million. The
sales price was funded by a cash payment of $545.6 million and the assumption of a pro rata share of
the mortgage notes payable on the properties of $713.0 million. The Company used the cash proceeds
from the sale to pay down its line of credit and for general corporate purposes, which included funding
the ASR and Special Dividend (See ‘‘Other Events and Transactions’’).
On November 19, 2015, the Company sold Panorama Mall, a 312,000 square foot community
center in Panorama City, California, for $98.0 million, resulting in a gain on the sale of assets of
$73.7 million. The Company used the proceeds from the sale to pay down its line of credit and for
general corporate purposes.
On January 4, 2016, the Company announced that it had reached an agreement with Taubman
Centers, Inc. to form a 50/50 joint venture to acquire Country Club Plaza, a 1,300,000 square foot
regional shopping center in Kansas City, Missouri for a total purchase price of $660.0 million. The
Company anticipates that it will fund its pro rata share of $330.0 million with borrowings under its line
of credit. The Company expects the purchase of Country Club Plaza, which is subject to usual and
customary closing conditions, will be completed in the first quarter of 2016.
On January 6, 2016, the Company sold a 40% ownership interest in Arrowhead Towne Center, a
1,197,000 square foot regional shopping center in Glendale, Arizona for $284.0 million. The sales price
was funded by a cash payment of $124.0 million and the assumption of a pro rata share of the
mortgage note payable on the property of $160.0 million. The Company used the cash proceeds from
the sale to pay down its line of credit and for general corporate purposes, which included funding the
Special Dividend (See ‘‘Other Events and Transactions’’).
On January 14, 2016, the Company formed a joint venture, whereby the Company sold a 49%
ownership interest in Deptford Mall, a 1,040,000 square foot regional shopping center in Deptford,
New Jersey; FlatIron Crossing, a 1,430,000 square foot regional shopping center in Broomfield,
Colorado; and Twenty Ninth Street, an 850,000 square foot regional shopping center in Boulder,
Colorado (the MAC Heitman Portfolio’’), for $751.0 million. The sales price was funded by a cash
payment of $458.1 million and the assumption of a pro rata share of the mortgage note payable on the
properties of $292.9 million. The Company used the cash proceeds from the sale to pay down its line of
credit and for general corporate purposes.
Financing Activity:
On August 28, 2014, the Company replaced the existing loan on Mall of Victor Valley with a new
$115.0 million loan that bears interest at an effective rate of 4.00% and matures on September 1, 2024.
On November 14, 2014, in connection with the acquisition of the PPR Queens Portfolio
(See ‘‘Acquisitions and Dispositions’’), the Company assumed the loans on the following Centers:
Lakewood Center with a fair value of $254.9 million that bore interest at an effective rate of 1.80%
and was to mature on June 1, 2015, Los Cerritos Center with a fair value of $207.5 million that bears
interest at an effective rate of 1.65% and matures on July 1, 2018, Queens Center with a fair value of
$600.0 million that bears interest at an effective rate of 3.49% and matures on January 1, 2025,
51
Stonewood Center with a fair value of $111.9 million that bears interest at an effective rate of 1.80%
and matures on November 1, 2017, and Washington Square with a fair value of $240.3 million that
bears interest at an effective rate of 1.65% and matures on January 1, 2016.
On December 22, 2014, the Company prepaid a total of $254.2 million of mortgage debt on Fresno
Fashion Fair and Vintage Faire Mall with a weighted average interest rate of 6.4%. The Company
incurred a charge of $9.0 million in connection with the early extinguishment of debt.
On February 3, 2015, the Company’s joint venture in The Market at Estrella Falls replaced the
existing loan on the property with a new $26.5 million loan that bears interest at LIBOR plus 1.70%
and matures on February 5, 2020, including the exercise of a one-year extension option.
On February 19, 2015, the Company placed a $280.0 million loan on Vintage Faire Mall that bears
interest at an effective rate of 3.55% and matures on March 6, 2026.
On March 2, 2015, the Company paid off in full the loan on Lakewood Center, which resulted in
gain of $2.2 million on the early extinguishment of debt as a result of writing off the related debt
premium. On May 12, 2015, the Company placed a new $410.0 million loan on the property that bears
interest at an effective rate of 4.15% and matures on June 1, 2026. On October 30, 2015, a 40%
interest in the loan was assumed by a third party in connection with the sale of a 40% ownership
interest in the PPR Portfolio (See ‘‘Acquisitions and Dispositions’’).
On March 3, 2015, the Company amended the loan on Fashion Outlets of Chicago. The amended
$200.0 million loan bears interest at LIBOR plus 1.50% and matures on March 31, 2020.
On October 5, 2015, the Company paid off in full the existing loan on Washington Square. On
October 29, 2015, the Company placed a new $550.0 million loan on the property that bears interest at
an effective rate of 3.65% and matures on November 1, 2022. On October 30, 2015, a 40% interest in
the loan was assumed by a third party in connection with the sale of a 40% ownership interest in the
PPR Portfolio (See ‘‘Acquisitions and Dispositions’’).
On October 23, 2015, the Company placed a $200.0 million loan on South Plains Mall that bears
interest at an effective rate of 4.22% and matures on November 6, 2025. On October 30, 2015, a 40%
interest in the loan was assumed by a third party in connection with the sale of a 40% ownership
interest in the PPR Portfolio (See ‘‘Acquisitions and Dispositions’’).
On October 28, 2015, the Company’s joint venture in The Shops at Atlas Park placed a
$57.8 million loan on the property that bears interest at LIBOR plus 2.25% and matures on
October 22, 2020, including two one-year extension options.
On October 30, 2015, the Company replaced the existing loan on Los Cerritos Center with a new
$525.0 million loan that bears interest at an effective rate of 4.00% and matures on November 1, 2027,
which resulted in a loss of $0.9 million on the early extinguishment of debt. Concurrently, a 40%
interest in the loan was assumed by a third party in connection with the sale of a 40% ownership
interest in the PPR Portfolio (See ‘‘Acquisitions and Dispositions’’).
On October 30, 2015, the Company obtained a $100.0 million term loan (‘‘PPR Term Loan’’) that
bears interest at LIBOR plus 1.20% and matures on October 31, 2022. Concurrently, a 40% interest in
the loan was assumed by a third party in connection with the sale of a 40% ownership interest in the
PPR Portfolio (See ‘‘Acquisitions and Dispositions’’).
On January 6, 2016, the Company replaced the existing loan on Arrowhead Towne Center with a
new $400.0 million loan that bears interest at an effective rate of 4.05% and matures on February 1,
2028. Concurrently, a 40% interest in the loan was assumed by a third party in connection with the sale
of a 40% ownership interest in the underlying property (See ‘‘Acquisitions and Dispositions’’).
52
On January 14, 2016, the Company placed a $150.0 million loan on Twenty Ninth Street that bears
interest at an effective rate of 4.10% and matures on February 6, 2026. Concurrently, a 49% interest in
the loan was assumed by a third party in connection with the sale of a 49% ownership interest in the
MAC Heitman Portfolio (See ‘‘Acquisitions and Dispositions’’).
The sale of ownership interests in the PPR Portfolio, Arrowhead Towne Center and
MAC Heitman Portfolio are collectively referred to herein as the Joint Venture Transactions.
Redevelopment and Development Activity:
In February 2014, the Company’s joint venture in Broadway Plaza started construction on the
235,000 square foot expansion of the 761,000 square foot regional shopping center in Walnut Creek,
California. The joint venture completed a portion of the first phase of the project in November 2015
and expects the remaining portion of the first phase to be completed in the second quarter of 2016.
The second phase will be completed through Summer 2018. The total cost of the project is estimated
to be $270.0 million, with $135.0 million estimated to be the Company’s pro rata share. The Company
has funded $98.9 million of the total $197.8 million incurred by the joint venture as of December 31,
2015.
The Company is currently expanding Green Acres Mall, a 1,799,000 square foot regional center in
Valley Stream, New York to include a 335,000 square foot power center. The project started in July
2015 and is expected to be completed in late 2016. As of December 31, 2015, the Company has
incurred $47.7 million in costs and estimates that the total cost of the project to be approximately
$110.0 million.
The Company’s joint venture is proceeding with the development of Fashion Outlets of
Philadelphia, a redevelopment of the 850,000 square foot shopping center in Philadelphia, Pennsylvania.
The project is expected to be completed in 2018 and 2019. The total cost of the project is estimated to
be between $275.0 million and $335.0 million, with $137.5 million to $167.5 million estimated to be the
Company’s pro rata share. The Company has funded $30.6 million of the total $61.3 million incurred
by the joint venture as of December 31, 2015.
Other Transactions and Events:
On September 30, 2013, the Company conveyed Fiesta Mall, a 933,000 square foot regional
shopping center in Mesa, Arizona, to the mortgage note lender by a deed-in-lieu of foreclosure. The
mortgage loan was non-recourse. As a result of the conveyance, the Company recognized a gain on the
extinguishment of debt of $1.3 million.
On March 9, 2015, the Company received an unsolicited, conditional proposal from Simon
Property Group, Inc. (‘‘Simon’’) to acquire the Company. The Company’s Board of Directors, after
consulting with its financial, real estate and legal advisors, unanimously determined that the Simon
proposal substantially undervalued the Company and was not in the best interests of the Company and
its stockholders. On March 20, 2015, the Company received a revised, unsolicited proposal to acquire
the Company from Simon, which Simon described as its best and final proposal. The Company’s Board
of Directors carefully reviewed the revised proposal with the assistance of its financial, real estate and
legal advisors, and determined that the revised proposal continued to substantially undervalue the
Company and that pursuing the proposed transaction at that time was not in the best interests of the
Company and its stockholders.
On June 30, 2015, the Company conveyed Great Northern Mall, an 895,000 square foot regional
shopping center in Clay, New York, to the mortgage lender by a deed-in-lieu of foreclosure and was
discharged from the mortgage note payable. The mortgage note payable was a non-recourse loan. As a
result, the Company recognized a loss of $1.6 million on the extinguishment of debt.
53
On September 30, 2015, the Company’s Board of Directors authorized the repurchase of up to
$1.2 billion of the Company’s outstanding common shares over the period ending September 30, 2017,
as market conditions warrant. On November 12, 2015, the Company entered into an accelerated share
repurchase program (‘‘ASR’’) to repurchase $400.0 million of the Company’s common stock. In
accordance with the ASR, the Company made a prepayment of $400.0 million and received an initial
share delivery of 4,140,788 shares. On January 20, 2016, the ASR was completed and the Company
received an additional delivery of 970,609 shares. The average price of the 5,111,397 shares repurchased
under the ASR was $78.26 per share. The ASR was funded from proceeds in connection with the
financing and sale of the ownership interest in the PPR Portfolio (See ‘‘Acquisitions and Dispositions’’
and ‘‘Financing Activity’’).
On October 30, 2015, the Company declared two special dividends/distributions (‘‘Special
Dividend’’), each of $2.00 per share of common stock and per OP Unit. The first Special Dividend was
paid on December 8, 2015 to stockholders and OP Unit holders of record on November 12, 2015. The
second Special Dividend was paid on January 6, 2016 to common stockholders and OP Unit holders of
record on November 12, 2015. The Special Dividends were funded from proceeds in connection with
the financing and sale of ownership interests in the PPR Portfolio and Arrowhead Towne Center
(See ‘‘Acquisitions and Dispositions’’ and ‘‘Financing Activity’’).
On November 1, 2015, the mortgage note payable on Flagstaff Mall, a 347,000 square foot regional
shopping center in Flagstaff, Arizona, went into maturity default. The mortgage note payable is a
non-recourse loan. The Company is negotiating with the loan servicer, which will likely result in a
transition of Flagstaff Mall to the loan servicer or a receiver. Consequently, Flagstaff Mall has been
excluded from certain 2015 performance metrics and related discussions, including tenant sales per
square foot, occupancy rates and releasing spreads (See ‘‘Results of Operations’’).
On February 17, 2016, the Company entered into an ASR to repurchase $400.0 million of the
Company’s common stock. In accordance with the ASR, the Company made a prepayment of
$400.0 million and received an initial share delivery of 4,222,193 shares. The Company expects to
complete the ASR on or before April 22, 2016. The ASR was funded from borrowings under the
Company’s line of credit, which had been recently paid down from the proceeds from the recently
completed Joint Venture Transactions (See ‘‘Acquisitions and Dispositions’’ and ‘‘Financing Activity’’).
Inflation:
In the last five years, inflation has not had a significant impact on the Company because of a
relatively low inflation rate. Most of the leases at the Centers have rent adjustments periodically
throughout the lease term. These rent increases are either in fixed increments or based on using an
annual multiple of increases in the Consumer Price Index (‘‘CPI’’). In addition, approximately 6% to
13% of the leases for spaces 10,000 square feet and under expire each year, which enables the
Company to replace existing leases with new leases at higher base rents if the rents of the existing
leases are below the then existing market rate. The Company has generally entered into leases that
require tenants to pay a stated amount for operating expenses, generally excluding property taxes,
regardless of the expenses actually incurred at any Center, which places the burden of cost control on
the Company. Additionally, certain leases require the tenants to pay their pro rata share of operating
expenses.
Seasonality:
The shopping center industry is seasonal in nature, particularly in the fourth quarter during the
holiday season when retailer occupancy and retail sales are typically at their highest levels. In addition,
shopping malls achieve a substantial portion of their specialty (temporary retailer) rents during the
54
holiday season and the majority of percentage rent is recognized in the fourth quarter. As a result of
the above, earnings are generally higher in the fourth quarter.
Critical Accounting Policies
The preparation of financial statements in conformity with generally accepted accounting principles
(‘‘GAAP’’) in the United States of America requires management to make estimates and assumptions
that affect the reported amounts of assets and liabilities and disclosure of contingent assets and
liabilities at the date of the financial statements and the reported amounts of revenues and expenses
during the reporting period. Actual results could differ from those estimates.
Some of these estimates and assumptions include judgments on revenue recognition, estimates for
common area maintenance and real estate tax accruals, provisions for uncollectible accounts,
impairment of long-lived assets, the allocation of purchase price between tangible and intangible assets,
capitalization of costs and fair value measurements. The Company’s significant accounting policies are
described in more detail in Note 2—Summary of Significant Accounting Policies in the Company’s
Notes to the Consolidated Financial Statements. However, the following policies are deemed to be
critical.
Revenue Recognition:
Minimum rental revenues are recognized on a straight-line basis over the term of the related lease.
The difference between the amount of rent due in a year and the amount recorded as rental income is
referred to as the ‘‘straight line rent adjustment.’’ Currently, 65% of the Mall Store and Freestanding
Store leases contain provisions for CPI rent increases periodically throughout the term of the lease.
The Company believes that using an annual multiple of CPI increases, rather than fixed contractual
rent increases, results in revenue recognition that more closely matches the cash revenue from each
lease and will provide more consistent rent growth throughout the term of the leases. Percentage rents
are recognized when the tenants’ specified sales targets have been met. Estimated recoveries from
certain tenants for their pro rata share of real estate taxes, insurance and other shopping center
operating expenses are recognized as revenues in the period the applicable expenses are incurred.
Other tenants pay a fixed rate and these tenant recoveries are recognized as revenues on a straight-line
basis over the term of the related leases.
Property:
Maintenance and repair expenses are charged to operations as incurred. Costs for major
replacements and betterments, which includes HVAC equipment, roofs, parking lots, etc., are
capitalized and depreciated over their estimated useful lives. Gains and losses are recognized upon
disposal or retirement of the related assets and are reflected in earnings.
Property is recorded at cost and is depreciated using a straight-line method over the estimated
useful lives of the assets as follows:
Buildings and improvements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Tenant improvements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Equipment and furnishings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
5 - 40 years
5 - 7 years
5 - 7 years
Capitalization of Costs:
The Company capitalizes costs incurred in redevelopment, development, renovation and
improvement of properties. The capitalized costs include pre-construction costs essential to the
development of the property, development costs, construction costs, interest costs, real estate taxes,
salaries and related costs and other costs incurred during the period of development. These capitalized
55
costs include direct and certain indirect costs clearly associated with the project. Indirect costs include
real estate taxes, insurance and certain shared administrative costs. In assessing the amounts of direct
and indirect costs to be capitalized, allocations are made to projects based on estimates of the actual
amount of time spent on each activity. Indirect costs not clearly associated with specific projects are
expensed as period costs. Capitalized indirect costs are allocated to development and redevelopment
activities based on the square footage of the portion of the building not held available for immediate
occupancy. If costs and activities incurred to ready the vacant space cease, then cost capitalization is
also discontinued until such activities are resumed. Once work has been completed on a vacant space,
project costs are no longer capitalized. For projects with extended lease-up periods, the Company ends
the capitalization when significant activities have ceased, which does not exceed the shorter of a
one-year period after the completion of the building shell or when the construction is substantially
complete.
Acquisitions:
The Company allocates the estimated fair value of acquisitions to land, building, tenant
improvements and identified intangible assets and liabilities, based on their estimated fair values. In
addition, any assumed mortgage notes payable are recorded at their estimated fair values. The
estimated fair value of the land and buildings is determined utilizing an ‘‘as if vacant’’ methodology.
Tenant improvements represent the tangible assets associated with the existing leases valued on a fair
value basis at the acquisition date prorated over the remaining lease terms. The tenant improvements
are classified as an asset under property and are depreciated over the remaining lease terms.
Identifiable intangible assets and liabilities relate to the value of in-place operating leases which come
in three forms: (i) leasing commissions and legal costs, which represent the value associated with ‘‘cost
avoidance’’ of acquiring in-place leases, such as lease commissions paid under terms generally
experienced in the Company’s markets; (ii) value of in-place leases, which represents the estimated loss
of revenue and of costs incurred for the period required to lease the ‘‘assumed vacant’’ property to the
occupancy level when purchased; and (iii) above or below-market value of in-place leases, which
represents the difference between the contractual rents and market rents at the time of the acquisition,
discounted for tenant credit risks. Leasing commissions and legal costs are recorded in deferred charges
and other assets and are amortized over the remaining lease terms. The value of in-place leases are
recorded in deferred charges and other assets and amortized over the remaining lease terms plus any
below-market fixed rate renewal options. Above or below-market leases are classified in deferred
charges and other assets or in other accrued liabilities, depending on whether the contractual terms are
above or below-market, and the asset or liability is amortized to minimum rents over the remaining
terms of the leases. The remaining lease terms of below-market leases may include certain below-
market fixed-rate renewal periods. In considering whether or not a lessee will execute a below-market
fixed-rate lease renewal option, the Company evaluates economic factors and certain qualitative factors
at the time of acquisition such as tenant mix in the Center, the Company’s relationship with the tenant
and the availability of competing tenant space. The initial allocation of purchase price is based on
management’s preliminary assessment, which may change when final information becomes available.
Subsequent adjustments made to the initial purchase price allocation are made within the allocation
period, which does not exceed one year. The purchase price allocation is described as preliminary if it
is not yet final. The use of different assumptions in the allocation of the purchase price of the acquired
assets and liabilities assumed could affect the timing of recognition of the related revenues and
expenses.
The Company immediately expenses costs associated with business combinations as period costs.
Remeasurement gains are recognized when the Company obtains control of an existing equity
method investment to the extent that the fair value of the existing equity investment exceeds the
carrying value of the investment.
56
Asset Impairment:
The Company assesses whether an indicator of impairment in the value of its properties exists by
considering expected future operating income, trends and prospects, as well as the effects of demand,
competition and other economic factors. Such factors include projected rental revenue, operating costs
and capital expenditures as well as estimated holding periods and capitalization rates. If an impairment
indicator exists, the determination of recoverability is made based upon the estimated undiscounted
future net cash flows, excluding interest expense. The amount of impairment loss, if any, is determined
by comparing the fair value, as determined by a discounted cash flows analysis, with the carrying value
of the related assets. The Company generally holds and operates its properties long-term, which
decreases the likelihood of their carrying values not being recoverable. Properties classified as held for
sale are measured at the lower of the carrying amount or fair value less cost to sell.
The Company reviews its investments in unconsolidated joint ventures for a series of operating
losses and other factors that may indicate that a decrease in the value of its investments has occurred
which is other-than-temporary. The investment in each unconsolidated joint venture is evaluated
periodically, and as deemed necessary, for recoverability and valuation declines that are
other-than-temporary.
Fair Value of Financial Instruments:
The fair value hierarchy distinguishes between market participant assumptions based on market
data obtained from sources independent of the reporting entity and the reporting entity’s own
assumptions about market participant assumptions.
Level 1 inputs utilize quoted prices in active markets for identical assets or liabilities that the
Company has the ability to access. Level 2 inputs are inputs other than quoted prices included in
Level 1 that are observable for the asset or liability, either directly or indirectly. Level 2 inputs may
include quoted prices for similar assets and liabilities in active markets, as well as inputs that are
observable for the asset or liability (other than quoted prices), such as interest rates, foreign exchange
rates and yield curves that are observable at commonly quoted intervals. Level 3 inputs are
unobservable inputs for the asset or liability, which is typically based on an entity’s own assumptions, as
there is little, if any, related market activity. In instances where the determination of the fair value
measurement is based on inputs from different levels of the fair value hierarchy, the level in the fair
value hierarchy within which the entire fair value measurement falls is based on the lowest level input
that is significant to the fair value measurement in its entirety. The Company’s assessment of the
significance of a particular input to the fair value measurement in its entirety requires judgment, and
considers factors specific to the asset or liability.
The Company calculates the fair value of financial instruments and includes this additional
information in the notes to consolidated financial statements when the fair value is different than the
carrying value of those financial instruments. When the fair value reasonably approximates the carrying
value, no additional disclosure is made.
Deferred Charges:
Costs relating to obtaining tenant leases are deferred and amortized over the initial term of the
agreement using the straight-line method. As these deferred leasing costs represent productive assets
incurred in connection with the Company’s provision of leasing arrangements at the Centers, the
related cash flows are classified as investing activities within the Company’s consolidated statements of
cash flows. Costs relating to financing of shopping center properties are deferred and amortized over
57
the life of the related loan using the straight-line method, which approximates the effective interest
method. The ranges of the terms of the agreements are as follows:
Deferred lease costs . . . . . . . . . . . . . . .
Deferred financing costs . . . . . . . . . . . .
1 - 15 years
1 - 15 years
Results of Operations
Many of the variations in the results of operations, discussed below, occurred because of the
transactions affecting the Company’s properties described above, including those related to the
Acquisition Properties and the Redevelopment Properties as defined below.
For purposes of the discussion below, the Company defines ‘‘Same Centers’’ as those Centers that
are substantially complete and in operation for the entirety of both periods of the comparison.
Non-Same Centers for comparison purposes include recently acquired properties (‘‘Acquisition
Properties’’), those Centers or properties that are going through a substantial redevelopment often
resulting in the closing of a portion of the Center (‘‘Redevelopment Properties’’), those properties that
have recently transitioned to or from equity method joint ventures to consolidated assets (‘‘Joint
Venture Centers’’) and properties that have been disposed of after 2013 (‘‘Disposition Properties’’). The
Company moves a Center in and out of Same Centers based on whether the Center is substantially
complete and in operation for the entirety of both periods of the comparison. Accordingly, the Same
Centers consist of all consolidated Centers, excluding the Acquisition Properties, the Redevelopment
Properties, the Joint Venture Centers and the Disposition Properties for the periods of comparison.
For comparison of the year ended December 31, 2014 to the year ended December 31, 2013, the
Acquisition Properties include Green Acres Mall and Green Acres Adjacent (See ‘‘Acquisitions and
Dispositions’’ in Management’s Overview and Summary).
For the comparison of the year ended December 31, 2015 to the year ended December 31, 2014,
the Redevelopment Properties are Paradise Valley Mall, the expansion portion of Fashion Outlets of
Niagara Falls USA, SouthPark Mall and Westside Pavilion. For the comparison of the year ended
December 31, 2014 to the year ended December 31, 2013, the Redevelopment Properties are Fashion
Outlets of Chicago, Paradise Valley Mall, SouthPark Mall, Fashion Outlets of Niagara Falls USA and
Westside Pavilion. The change in revenues and expenses at the Redevelopment Properties for the
comparison of the year ended December 31, 2014 to the year ended December 31, 2013 is primarily
due to the opening of Fashion Outlets of Chicago on August 1, 2013.
For the comparison of the year ended December 31, 2015 to the year ended December 31, 2014,
the Joint Venture Centers are Inland Center, Lakewood Center, Los Cerritos Center, South Plains
Mall, Washington Square, Stonewood Center, Queens Center and Cascade Mall. For the comparison of
the year ended December 31, 2014 to the year ended December 31, 2013, the Joint Venture Centers
are Lakewood Center, Los Cerritos Center, Washington Square, Stonewood Center, Queens Center
and Cascade Mall. The change in revenues and expenses at the Joint Venture Centers for the
comparison of the year ended December 31, 2015 to the year ended December 31, 2014 and the
comparison of the year ended December 31, 2014 to the year ended December 31, 2013 is primarily
due to the conversion of the PPR Queens Portfolio from unconsolidated joint ventures to consolidated
Centers in 2014.
For comparison of the year ended December 31, 2015 to the year ended December 31, 2014, the
Disposition Properties are Panorama Mall, Great Northern Mall, Rotterdam Square, Somersville Towne
Center, Lake Square Mall, South Towne Center and Camelback Colonnade. For the comparison of the
year ended December 31, 2014 to the year ended December 31, 2013, the Disposition Properties are
Rotterdam Square, Somersville Towne Center, Lake Square Mall, South Towne Center and Camelback
58
Colonnade. Properties disposed of prior to January 1, 2014 have been included in discontinued
operations.
Unconsolidated joint ventures are reflected using the equity method of accounting. The Company’s
pro rata share of the results from these Centers is reflected in the consolidated statements of
operations as equity in income of unconsolidated joint ventures.
The Company considers tenant annual sales per square foot (for tenants in place for a minimum
of 12 months or longer and 10,000 square feet and under) for regional shopping centers, occupancy
rates (excluding large retail stores or ‘‘Anchors’’) for the Centers and releasing spreads (i.e. a
comparison of initial average base rent per square foot on leases executed during the trailing twelve
months to average base rent per square foot at expiration for the leases expiring during the year based
on the spaces 10,000 square feet and under) to be key performance indicators of the Company’s
internal growth.
Tenant sales per square foot increased from $587 for the twelve months ended December 31, 2014
to $635 for the twelve months ended December 31, 2015. Occupancy rate increased from 95.8% at
December 31, 2014 to 96.1% at December 31, 2015. Releasing spreads increased 14.2% for the twelve
months ended December 31, 2015. These calculations exclude Centers under development or
redevelopment and property dispositions (See ‘‘Acquisitions and Dispositions’’ in Management’s
Overview and Summary). As discussed above, Flagstaff Mall was excluded for the twelve months ended
December 31, 2015 (See ‘‘Other Transactions and Events’’ in Management’s Overview and Summary).
Releasing spreads remained positive as the Company was able to lease available space at average
higher rents than the expiring rental rates, resulting in a releasing spread of $7.12 per square foot
($57.41 on new and renewal leases executed compared to $50.29 on leases expiring), representing a
14.2% increase for the trailing twelve months ended December 31, 2015. The Company expects that
releasing spreads will continue to be positive for 2016 as it renews or relets leases that are scheduled to
expire. These leases that are scheduled to expire represent 931,000 square feet of the Centers,
accounting for 11.3% of the GLA of mall stores and freestanding stores, for spaces 10,000 square feet
and under, as of December 31, 2015.
During the trailing twelve months ended December 31, 2015, the Company signed 328 new leases
and 342 renewal leases comprising approximately 1.2 million square feet of GLA, of which 1.1 million
square feet related to the consolidated Centers. The annual initial average base rent for new and
renewal leases was $57.41 per square foot for the trailing twelve months ended December 31, 2015 with
an average tenant allowance of $15.45 per square foot.
Comparison of Years Ended December 31, 2015 and 2014
Revenues:
Minimum and percentage rents (collectively referred to as ‘‘rental revenue’’) increased by
$127.4 million, or 19.4%, from 2014 to 2015. The increase in rental revenue is attributed to an increase
of $150.4 million from the Joint Venture Centers, $2.4 million from the Redevelopment Properties and
$0.3 million from the Same Centers offset in part by a decrease of $25.7 million from the Disposition
Properties.
Rental revenue includes the amortization of above and below-market leases, the amortization of
straight-line rents and lease termination income. The amortization of above and below-market leases
increased from $9.1 million in 2014 to $16.5 million in 2015 primarily due to the Joint Venture Centers.
The amortization of straight-line rents increased from $5.8 million in 2014 to $7.2 million in 2015.
Lease termination income increased from $9.1 million in 2014 to $9.7 million in 2015.
59
Tenant recoveries increased $54.0 million, or 15.0%, from 2014 to 2015. The increase in tenant
recoveries is attributed to an increase of $63.8 million from the Joint Venture Centers and $4.8 million
from the Same Centers offset in part by a decrease of $13.3 million from the Disposition Properties
and $1.3 million from the Redevelopment Properties.
Other revenues increased $9.2 million from 2014 to 2015. The increase in other revenues is
attributed to an increase of $12.5 million from the Joint Venture Centers offset in part by a decrease of
$1.7 million from the Same Centers, $1.1 million from the Disposition Properties and $0.5 million from
the Redevelopment Properties.
Management Companies’ revenue decreased from $34.0 million in 2014 to $26.3 million in
2015.The decrease in Management Companies’ revenue is primarily due to a reduction in management
fees as a result of the conversion from unconsolidated joint ventures to consolidated Centers of
Cascade Mall and the PPR Queens Portfolio in 2014 and Inland Center in 2015 (See ‘‘Acquisitions and
Dispositions’’ in Management’s Overview and Summary).
Shopping Center and Operating Expenses:
Shopping center and operating expenses increased $26.3 million, or 7.4%, from 2014 to 2015. The
increase in shopping center and operating expenses is attributed to an increase of $59.9 million from
the Joint Venture Centers offset in part by a decrease of $18.0 million from the Same Centers,
$14.3 million from the Disposition Properties and $1.3 million from the Redevelopment Properties. The
decrease in shopping center and operating expenses at the Same Centers is primarily due to a
reduction in maintenance and utility costs offset in part by an increase in property tax expense.
Management Companies’ Operating Expenses:
Management Companies’ operating expenses increased $3.9 million from 2014 to 2015 due to an
increase in share and unit-based compensation costs.
REIT General and Administrative Expenses:
REIT general and administrative expenses increased by $0.5 million from 2014 to 2015.
Costs related to Unsolicited Takeover Offer:
The Company incurred $25.2 million in costs in 2015 related to evaluating and responding to an
unsolicited takeover offer (See ‘‘Other Transactions and Events’’ in Management’s Overview and
Summary).
Depreciation and Amortization:
Depreciation and amortization increased $85.8 million from 2014 to 2015. The increase in
depreciation and amortization is primarily attributed to an increase of $99.5 million from the Joint
Venture Centers and $4.0 million from the Redevelopment Properties offset in part by a decrease of
$12.5 million from the Disposition Properties and $5.2 million from the Same Centers.
Interest Expense:
Interest expense increased $21.3 million from 2014 to 2015. The increase in interest expense is
primarily attributed to an increase of $27.5 million from the Joint Venture Centers, $8.6 million from
borrowings under the line of credit and $3.0 million from the Redevelopment Properties offset in part
by a decrease of $16.1 million from the Same Centers, $1.5 million from the Disposition Properties and
$0.2 million from the term loan. The decrease in interest at the Same Centers is due to the early payoff
of the mortgage notes payable on Fresno Fashion Fair in 2014 and Valley River Center in 2015.
60
The above interest expense items are net of capitalized interest, which increased from $12.6 million
in 2014 to $13.1 million in 2015.
(Gain) Loss on Early Extinguishment of Debt, net:
The change in (gain) loss on early extinguishment of debt was $11.0 million from 2014 to 2015,
resulting from a gain on early extinguishment of debt of $1.5 million in 2015 compared to a loss on
early extinguishment of debt of $9.6 million in 2014. This change is primarily due to the one-time
charge of $9.0 million in connection with the early extinguishment of the mortgage notes payable on
Fresno Fashion Fair and Vintage Faire Mall in 2014 (See ‘‘Financing Activities’’ in Management’s
Overview and Summary).
Equity in Income of Unconsolidated Joint Ventures:
Equity in income of unconsolidated joint ventures decreased $15.5 million from 2014 to 2015. The
decrease is primarily due to the conversion of the PPR Queens Portfolio from unconsolidated joint
ventures to consolidated Centers in 2014 offset in part by the acquisition of the Sears Portfolio in 2015
(See ‘‘Acquisitions and Dispositions’’ in Management’s Overview and Summary).
Gain (Loss) on Sale or Write down of Assets, net:
The gain (loss) on sale or write down of assets, net increased $304.8 million from 2014 to 2015.
This increase is primarily attributed to the gain on sale of the 40% interest in the PPR Portfolio of
$311.2 million in 2015, the gain on the sale of Panorama Mall of $73.7 million in 2015, a decrease in
development write down of $40.3 million in 2015 and a decrease in impairment losses of $30.6 million
in 2015 offset in part by the gain on the sale of South Towne Center of $121.9 million in 2014 (See
‘‘Acquisitions and Dispositions’’ in Management’s Overview and Summary).
Gain on Remeasurement of Assets:
Gain on remeasurement of assets decreased $1.4 billion from 2014 to 2015. The decrease is due to
the remeasurement gain of $1.4 billion from the acquisition of the PPR Queens Portfolio in 2014 offset
in part by the remeasurement gain of $22.1 million from the acquisition of the remaining 50%
ownership interest in Inland Center in 2015 (See ‘‘Acquisitions and Dispositions’’ in Management’s
Overview and Summary).
Net Income:
Net income decreased $1.1 billion from 2014 to 2015. The decrease in net income is primarily
attributed to a decrease of$1.4 billion from gain on remeasurement of assets offset in part by an
increase of $304.8 million from gain on sale or write down of assets as discussed above.
Funds From Operations (‘‘FFO’’):
Primarily as a result of the factors mentioned above, FFO—diluted increased 18.3% from
$542.8 million in 2014 to $642.3 million in 2015. For a reconciliation of FFO and FFO—diluted to net
income available to common stockholders, the most directly comparable GAAP financial measure, see
‘‘Funds From Operations (‘‘FFO’’) and Adjusted Funds From Operations (‘‘AFFO’’)’’ below.
Operating Activities:
Cash provided by operating activities increased from $400.7 million in 2014 to $540.4 million in
2015. The increase was primarily due to changes in assets and liabilities and the results as discussed
above.
61
Investing Activities:
Cash used in investing activities decreased $154.8 million from 2014 to 2015. The decrease in cash
used in investing activities was primarily due to an increase in proceeds from the sale of assets of
$326.8 million offset in part by an increase in contributions to unconsolidated joint ventures of
$89.6 million and an increase in development, redevelopment and renovations of $86.9 million.
The increase in cash proceeds from the sale of assets is primarily attributed to the sale of a 40%
interest in the PPR Portfolio and the sale of Panorama Mall in 2015 (See ‘‘Acquisitions and
Dispositions’’ in Management’s Overview and Summary). The increase in contributions to
unconsolidated joint ventures is primarily due to the acquisition of the 50% ownership interest in the
Sears Portfolio in 2015 (See ‘‘Acquisitions and Dispositions’’ in Management’s Overview and Summary).
Financing Activities:
Cash used in financing activities increased $308.0 million from 2014 to 2015. The increase in cash
used in financing activities was primarily due to an increase in payments on mortgages, bank and other
notes payable of $2.4 billion, an increase in dividends and distributions of $401.4 million and the
repurchase of the Company’s common stock of $400.1 million (See ‘‘Other Transactions and Events’’ in
Management’s Overview and Summary) offset in part by an increase in proceeds from mortgages, bank
and other notes payable of $2.9 billion.
Comparison of Years Ended December 31, 2014 and 2013
Revenues:
Rental revenue increased by $56.7 million, or 9.4%, from 2013 to 2014. The increase in rental
revenue is attributed to an increase of $38.0 million from the Joint Venture Centers, $14.7 million from
the Redevelopment Properties, $7.1 million from the Same Centers and $3.3 million from the
Acquisition Properties offset in part by a decrease of $6.4 million from the Disposition Properties. The
increase at the Same Centers is primarily attributed to an increase in releasing spreads and an increase
in tenant occupancy.
The amortization of above and below-market leases increased from $6.6 million in 2013 to
$9.1 million in 2014. The amortization of straight-line rents decreased from $7.5 million in 2013 to
$5.8 million in 2014. Lease termination income increased from $3.3 million in 2013 to $9.1 million in
2014.
Tenant recoveries increased $23.3 million, or 6.9%, from 2013 to 2014. The increase in tenant
recoveries is attributed to an increase of $16.1 million from the Joint Venture Centers, $7.5 million
from the Redevelopment Properties, $1.8 million from the Acquisition Properties and $0.7 million from
the Same Centers offset in part by a decrease of $2.8 million from the Disposition Properties.
Management Companies’ revenue decreased from $40.2 million in 2013 to $34.0 million in 2014.
The decrease is primarily due to a reduction in management fees from the sale of Kitsap Mall,
Redmond Town Center and Ridgmar Mall in 2013, the conversion of Superstition Springs Center to a
consolidated Center in 2013 and the conversions of Cascade Mall and the PPR Queens Portfolio to
consolidated Centers in 2014 (See ‘‘Acquisitions and Dispositions’’ in Management’s Overview and
Summary).
Shopping Center and Operating Expenses:
Shopping center and operating expenses increased $23.7 million, or 7.2%, from 2013 to 2014. The
increase in shopping center and operating expenses is attributed to an increase of $18.0 million from
the Joint Venture Centers, $13.4 million from the Redevelopment Properties and $1.7 million from the
62
Acquisition Properties offset in part by a decrease of $6.8 million from the Disposition Properties and
$2.6 million from the Same Centers.
Management Companies’ Operating Expenses:
Management Companies’ operating expenses decreased $5.0 million from 2013 to 2014 due to a
decrease in compensation costs.
REIT General and Administrative Expenses:
REIT general and administrative expenses increased by $1.6 million from 2013 to 2014 primarily
due to the transaction costs in connection with the acquisition of Cascade Mall, Fashion Outlets of
Philadelphia and the PPR Queens Portfolio in 2014.
Depreciation and Amortization:
Depreciation and amortization increased $21.6 million from 2013 to 2014. The increase in
depreciation and amortization is primarily attributed to an increase of $28.0 million from the Joint
Venture Centers, $6.6 million from the Redevelopment Properties and $0.5 million from the
Acquisition Properties offset in part by a decrease of $12.0 million from the Same Centers and
$1.5 million from the Disposition Properties.
Interest Expense:
Interest expense decreased $6.6 million from 2013 to 2014. The decrease in interest expense is
primarily attributed to a decrease of $5.6 million from reduced borrowings under the line of credit,
$5.2 million from the Same Centers, $1.3 million from the Disposition Properties and $0.4 million from
the term loan offset in part by an increase of $5.2 million from the Joint Venture Centers, $0.6 million
from the Acquisition Properties and $0.1 million from the Redevelopment Properties.
The above interest expense items are net of capitalized interest, which increased from $10.8 million
in 2013 to $12.6 million in 2014.
Loss (Gain) on Early Extinguishment of Debt, net:
The change in loss (gain) on early extinguishment of debt was $11.0 million from 2013 to 2014,
resulting from a loss on early extinguishment of debt of $9.6 million in 2014 compared to a gain on
early extinguishment of debt of $1.4 million in 2013. This change is primarily due to the one-time
charge of $9.0 million in connection with the early extinguishment of the mortgage notes payable on
Fresno Fashion Fair and Vintage Faire Mall in 2014 (See ‘‘Financing Activities’’ in Management’s
Overview and Summary).
Equity in Income of Unconsolidated Joint Ventures:
Equity in income of unconsolidated joint ventures decreased $107.0 million from 2013 to 2014. The
decrease is primarily attributed to the Company’s share of the gain on the sales in 2013 of Redmond
Town Center Office of $44.4 million, Kitsap Mall of $28.1 million, Redmond Town Center of
$18.3 million and Ridgmar Mall of $3.1 million (See ‘‘Acquisitions and Dispositions’’ in Management’s
Overview and Summary).
Gain (Loss) on Sale or Write down of Assets, net:
The change in gain (loss) on sale or write down of assets, net was $151.5 million from 2013 to
2014, resulting from a loss of $78.1 million in 2013 to a gain of $73.4 million in 2014. This change is
primarily attributed to the gain on the sales of Wilshire Boulevard of $9.0 million, South Towne Center
63
of $121.9 million and Camelback Colonnade of $24.6 million in 2014 (See ‘‘Acquisitions and
Dispositions’’ in Management’s Overview and Summary).
Gain on Remeasurement of Assets:
Gain on remeasurement of assets increased $1.4 billion from 2013 to 2014. The increase is due to
the remeasurement gain of $1.4 billion from the acquisition of the PPR Queens Portfolio in 2014 offset
in part by the remeasurement gain of $36.3 million from the acquisition of Camelback Colonnade and
$14.9 million from the acquisition of Superstition Springs Center in 2013 (See ‘‘Acquisitions and
Dispositions’’ in Management’s Overview and Summary).
Total Income from Discontinued Operations:
Total income from discontinued operations of $289.9 million in 2013 was primarily due to the gain
on sales of Green Tree Mall of $59.8 million, Northridge Mall and Rimrock Mall of $82.2 million and
Chesterfield Towne Center and Centre at Salisbury of $151.5 million (See ‘‘Acquisitions and
Dispositions’’ in Management’s Overview and Summary). Due to the adoption of ASU 2014-08 on
January 1, 2014, there was no income from discontinued operations in 2014.
Net Income:
Net income increased $1.2 billion from 2013 to 2014. The increase in net income is primarily
attributed to an increase of$1.4 billion from gain on remeasurement of assets offset in part by a
decrease of $289.9 million of total income from discontinued operations as discussed above.
Funds From Operations (‘‘FFO’’):
Primarily as a result of the factors mentioned above, FFO—diluted increased 2.9% from
$527.6 million in 2013 to $542.8 million in 2014. For a reconciliation of FFO and FFO—diluted to net
income available to common stockholders, the most directly comparable GAAP financial measure, see
‘‘Funds From Operations (‘‘FFO’’) and Adjusted Funds From Operations (‘‘AFFO’’)’’ below.
Operating Activities:
Cash provided by operating activities decreased from $422.0 million in 2013 to $400.7 million in
2014. The decrease was primarily due to changes in assets and liabilities and the results as discussed
above.
Investing Activities:
Cash used in investing activities increased $527.7 million from 2013 to 2014. The increase in cash
used in investing activities was primarily due to a decrease in distributions from unconsolidated joint
ventures of $539.8 million, an increase in contributions to unconsolidated joint ventures of
$238.7 million, a decrease in proceeds from the sale of assets of $96.0 million and a decrease in
restricted cash of $64.0 million offset in part by a decrease in the acquisitions of property of
$501.0 million.
The decrease in distributions from unconsolidated joint ventures is primarily attributed to the
distribution of the Company’s share of net proceeds from the refinancing of the mortgage note payable
on Tysons Corner Center in 2013 and the Company’s share of cash proceeds from the sales of
Kitsap Mall, Redmond Town Center and Redmond Town Center Office in 2013 (See ‘‘Acquisitions and
Dispositions’’ and ‘‘Other Transactions and Events’’ in Management’s Overview and Summary). The
increase in contributions to unconsolidated joint ventures is due to the acquisition of Fashion Outlets of
Philadelphia and the Company’s share of the development costs at Tysons Corner Center and
Broadway Plaza in 2014. The decrease in acquisitions of property is due to the acquisition of Green
Acres Mall in 2013.
64
Financing Activities:
Cash used in financing activities decreased $560.3 million from 2013 to 2014. The decrease in cash
used in financing activities was primarily due to a decrease in payments on mortgages, bank and other
notes payable of $2.2 billion offset in part by a decrease in proceeds from mortgages, bank and other
notes payable of $1.4 billion, a decrease in proceeds from stock offerings of $173.0 million, an increase
in dividends and distributions of $30.2 million and the purchase of the remaining noncontrolling
interest in Fashion Outlets of Chicago for $55.9 million in 2014 (See ‘‘Acquisitions and Dispositions’’ in
Management’s Overview and Summary).
Liquidity and Capital Resources
The Company anticipates meeting its liquidity needs for its operating expenses and debt service
and dividend requirements for the next twelve months through cash generated from operations,
working capital reserves and/or borrowings under its unsecured line of credit.
The following tables summarize capital expenditures and lease acquisition costs incurred at the
Centers for the years ended December 31:
(Dollars in thousands)
Consolidated Centers:
Acquisitions of property and equipment(1) . . . . . . . . . . . . . . . . . . . .
Development, redevelopment, expansion and renovation of Centers . .
Tenant allowances . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Deferred leasing charges . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Joint Venture Centers (at Company’s pro rata share):
Acquisitions of property and equipment . . . . . . . . . . . . . . . . . . . . . .
Development, redevelopment, expansion and renovation of Centers . .
Tenant allowances . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Deferred leasing charges . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2015
2014
2013
$ 79,753
218,741
30,368
26,835
$ 97,919
197,934
30,464
26,605
$591,565
164,340
20,949
23,926
$355,697
$352,922
$800,780
$160,001
132,924
6,285
3,348
$158,792
201,843
4,847
2,965
$
8,182
118,764
8,086
3,331
$302,558
$368,447
$138,363
(1) Acquisitions of property and equipment excludes the acquisition of the PPR Queens Portfolio in 2014, which was
funded by the direct issuance of approximately $1.2 billion of common stock of the Company and the assumption of
the third party’s pro rata share of the mortgage notes payable on the properties of $672.1 million (See ‘‘Acquisitions
and Dispositions’’ in Management’s Overview and Summary).
The Company expects amounts to be incurred during the next twelve months for tenant allowances
and deferred leasing charges to be comparable or less than 2015 and that capital for those expenditures
will be available from working capital, cash flow from operations, borrowings on property specific debt
or unsecured corporate borrowings. The Company expects to incur between $300 million and
$400 million during the next twelve months for development, redevelopment, expansion and
renovations. Capital for these major expenditures, developments and/or redevelopments has been, and
is expected to continue to be, obtained from a combination of debt or equity financings, which are
expected to include borrowings under the Company’s line of credit and construction loans.
The Company has also generated liquidity in the past through equity offerings and issuances,
property refinancings, joint venture transactions and the sale of non-core assets. For example, the
Company recently completed the Joint Venture Transactions to which the Company contributed eight
properties with total cash proceeds to the Company of approximately $2.3 billion (See ‘‘Acquisitions
and Dispositions’’ in Management’s Overview and Summary), which included new debt or refinancings
of existing debt on these properties with excess financing proceeds of approximately $1.1 billion (See
65
‘‘Financing Activity’’ in Management’s Overview and Summary). The Company used these proceeds to
pay down its line of credit, fund the Special Dividend (See ‘‘Other Transactions and Events’’ in
Management’s Overview and Summary) and for other general corporate purposes, which included the
repurchases of the Company’s common stock under the recently authorized stock buyback program
(See ‘‘Other Transactions and Events’’ in Management’s Overview and Summary). Furthermore, the
Company has filed a shelf registration statement, which registered an unspecified amount of common
stock, preferred stock, depositary shares, debt securities, warrants, rights, stock purchase contracts and
units that may be sold from time to time by the Company.
The capital and credit markets can fluctuate and, at times, limit access to debt and equity financing
for companies. As demonstrated by the Company’s recent activity as discussed below and its $1.5 billion
line of credit, the Company has been able to access capital; however, there is no assurance the
Company will be able to do so in future periods or on similar terms and conditions. Many factors
impact the Company’s ability to access capital, such as its overall debt level, interest rates, interest
coverage ratios and prevailing market conditions. In the event that the Company has significant tenant
defaults as a result of the overall economy and general market conditions, the Company could have a
decrease in cash flow from operations, which could result in increased borrowings under its line of
credit. These events could result in an increase in the Company’s proportion of floating rate debt,
which would cause it to be subject to interest rate fluctuations in the future.
The Company has an equity distribution agreement with a number of sales agents (the ‘‘2014 ATM
Program’’) to issue and sell, from time to time, shares of common stock, par value $0.01 per share,
having an aggregate offering price of up to $500 million (the ‘‘2014 ATM Shares’’). Sales of the 2014
ATM Shares can be made in privately negotiated transactions and/or any other method permitted by
law, including sales deemed to be an ‘‘at the market’’ offering, which includes sales made directly on
the New York Stock Exchange or sales made to or through a market maker other than on an exchange.
The Company did not sell any shares under the 2014 ATM Program during the year ended
December 31, 2015.
As of December 31, 2015, $500 million of the 2014 ATM Shares were available to be sold under
the 2014 ATM Program. Actual future sales of the 2014 ATM Shares will depend upon a variety of
factors including but not limited to market conditions, the trading price of the Company’s common
stock and the Company’s capital needs. The Company has no obligation to sell the 2014 ATM Shares
under the 2014 ATM Program.
The Company’s total outstanding loan indebtedness at December 31, 2015 was $7.0 billion
(consisting of $5.3 billion of consolidated debt, less $0.2 billion of noncontrolling interests, plus
$1.9 billion of its pro rata share of unconsolidated joint venture mortgage notes and $60.0 million of its
pro rata share of the PPRT Term Loan (See ‘‘Financing Activity’’ in Management’s Overview and
Summary). The majority of the Company’s debt consists of fixed-rate conventional mortgage notes
collateralized by individual properties. The Company expects that all of the maturities during the next
twelve months, except for the loan on Flagstaff Mall, will be refinanced, restructured, extended and/or
paid off from the Company’s line of credit or cash on hand.
The Company has a $1.5 billion revolving line of credit facility that provides for an interest rate of
LIBOR plus a spread of 1.38% to 2.0%, depending on the Company’s overall leverage levels, and
matures on August 6, 2018. Based on the Company’s leverage level as of December 31, 2015, the
borrowing rate on the facility was LIBOR plus 1.50%. In addition, the line of credit can be expanded,
depending on certain conditions, up to a total facility of $2.0 billion. All obligations under the facility
are unconditionally guaranteed only by the Company. At December 31, 2015, total borrowings under
the line of credit were $0.7 billion with an average effective interest rate of 1.95%.
The Company had a $125.0 million unsecured term loan under the Company’s line of credit that
bore interest at LIBOR plus a spread of 1.95% to 3.20%, depending on the Company’s overall leverage
66
levels, and was to mature on December 8, 2018. On October 23, 2015, the Company paid off in full the
term loan.
Cash dividends and distributions for the year ended December 31, 2015 were $787.1 million, which
included $337.7 million of the Special Dividend (See ‘‘Other Transactions and Events’’ in
Management’s Overview and Summary). A total of $540.4 million was funded by operations. The
remaining $246.7 million was funded from proceeds from the sale of assets, which were included in
cash flows from investing activities section in the Company’s Consolidated Statement of Cash Flows.
At December 31, 2015, the Company was in compliance with all applicable loan covenants under
its agreements.
At December 31, 2015, the Company had cash and cash equivalents of $86.5 million.
Off-Balance Sheet Arrangements:
The Company accounts for its investments in joint ventures that it does not have a controlling
interest or is not the primary beneficiary using the equity method of accounting and those investments
are reflected on the consolidated balance sheets of the Company as investments in unconsolidated joint
ventures.
In addition, one joint venture has secured debt that could become recourse debt to the Company
in excess of the Company’s pro rata share, should the joint venture be unable to discharge the
obligation of the related debt. At December 31, 2015, the balance of the debt that could become
recourse to the Company was $5.0 million offset in part by an indemnity agreement from a joint
venture partner for $2.5 million. The maturity of the recourse debt, net of indemnification, is
$2.5 million in 2019.
Additionally, as of December 31, 2015, the Company is contingently liable for $62.8 million in
letters of credit guaranteeing performance by the Company of certain obligations relating to the
Centers. The Company does not believe that these letters of credit will result in a liability to the
Company.
Contractual Obligations:
The following is a schedule of contractual obligations as of December 31, 2015 for the
consolidated Centers over the periods in which they are expected to be paid (in thousands):
Contractual Obligations
Long-term debt obligations (includes
expected interest payments)(1) . . . . . .
Operating lease obligations(2) . . . . . . . .
Purchase obligations(2) . . . . . . . . . . . . .
Other long-term liabilities(3) . . . . . . . . .
Payment Due by Period
Total
Less than
1 year
1 - 3 years
3 - 5 years
More than
five years
$6,306,548
344,996
32,006
690,191
$177,879
15,695
32,006
653,163
$1,633,578
26,881
—
3,470
$2,235,603
19,266
—
3,842
$2,259,488
283,154
—
29,716
$7,373,741
$878,743
$1,663,929
$2,258,711
$2,572,358
(1) Interest payments on floating rate debt were based on rates in effect at December 31, 2015.
(2) See Note 16—Commitments and Contingencies in the Company’s Notes to the Consolidated
Financial Statements.
(3) Includes $337.7 million accrued Special Dividend (See Note 12—Stockholders’ Equity in the
Company’s Notes to the Consolidated Financial Statements).
67
Funds From Operations (‘‘FFO’’) and Adjusted Funds From Operations (‘‘AFFO’’)
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. The National
Association of Real Estate Investment Trusts (‘‘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, impairment
write-downs of real estate and write-downs of investments in an affiliate where the write-downs have
been driven by a decrease in the value of real estate held by the affiliate and after adjustments for
unconsolidated joint ventures. Adjustments for unconsolidated joint ventures are calculated to reflect
FFO on the same basis.
Adjusted FFO (‘‘AFFO’’) excludes the FFO impact of Shoppingtown Mall and Valley View Center
for the years ended December 31, 2012 and 2011. In December 2011, the Company conveyed
Shoppingtown Mall to the lender by a deed-in-lieu of foreclosure. In July 2010, a court-appointed
receiver assumed operational control of Valley View Center and responsibility for managing all aspects
of the property. Valley View Center was sold by the receiver on April 23, 2012, and the related
non-recourse mortgage loan obligation was fully extinguished on that date, resulting in a gain on
extinguishment of debt of $104.0 million. On May 31, 2012, the Company conveyed Prescott Gateway
to the lender by a deed-in-lieu of foreclosure and the debt was forgiven resulting in a gain on
extinguishment of debt of $16.3 million. AFFO excludes the gain on extinguishment of debt on Prescott
Gateway for the twelve months ended December 31, 2012.
FFO and FFO on a 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. The Company believes that such a
presentation also provides investors with a more meaningful measure of its operating results in
comparison to the operating results of other REITs. The Company believes that AFFO and AFFO on
a diluted basis provide useful supplemental information regarding the Company’s performance as they
show a more meaningful and consistent comparison of the Company’s operating performance and allow
investors to more easily compare the Company’s results without taking into account non-cash credits
and charges on properties controlled by either a receiver or loan servicer. The Company believes that
FFO and AFFO on a diluted basis are measures investors find most useful in measuring the dilutive
impact of outstanding convertible securities.
The Company believes that FFO and AFFO do 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 are not
indicative of cash available to fund all cash flow needs. The Company also cautions that FFO and
AFFO, as presented, may not be comparable to similarly titled measures reported by other real estate
investment trusts.
Management compensates for the limitations of FFO and AFFO by providing investors with
financial statements prepared according to GAAP, along with this detailed discussion of FFO and
AFFO and a reconciliation of FFO and AFFO and FFO and AFFO-diluted to net income available to
common stockholders. Management believes that to further understand the Company’s performance,
FFO and AFFO should be compared with the Company’s reported net income as presented in the
Company’s consolidated financial statements.
68
The following reconciles net income attributable to the Company to FFO and FFO-diluted for the
years ended December 31, 2015, 2014, 2013, 2012 and 2011 and FFO and FFO—diluted to AFFO and
AFFO—diluted for the same periods (dollars and shares in thousands):
Net income attributable to the Company . . . . . . . . . . . . . . .
Adjustments to reconcile net income attributable to the
Company to FFO attributable to common stockholders and
unit holders—basic:
Noncontrolling interests in the Operating Partnership . . . . .
(Gain) loss on sale or write down of consolidated assets, net .
Gain on remeasurement of consolidated assets . . . . . . . . . .
Add: gain (loss) on undepreciated assets—consolidated assets
Add: noncontrolling interests share of gain (loss) on sale of
2015
2014
2013
2012
2011
$ 487,562
$ 1,499,042
$ 420,090
$ 337,426
$ 156,866
32,615
(378,248)
(22,089)
1,326
105,584
(73,440)
(1,423,136)
1,396
29,637
(207,105)
(51,205)
2,546
27,359
40,381
(199,956)
(390)
13,529
79,940
(3,602)
2,277
assets—consolidated joint ventures . . . . . . . . . . . . . . . .
481
146
(2,082)
1,899
(1,441)
(Gain) loss on sale or write down of assets—unconsolidated
joint ventures(1) . . . . . . . . . . . . . . . . . . . . . . . . . . .
(4,392)
1,237
(94,372)
(2,019)
(200,828)
Add: gain on sale of undepreciated assets—unconsolidated
joint ventures(1) . . . . . . . . . . . . . . . . . . . . . . . . . . .
Depreciation and amortization on consolidated assets . . . . .
Less: noncontrolling interests in depreciation and
4,395
464,472
2,621
378,716
602
374,425
1,163
307,193
51
269,286
amortization—consolidated joint ventures
. . . . . . . . . . .
(14,962)
(20,700)
(19,928)
(18,561)
(18,022)
Depreciation and amortization—unconsolidated joint
ventures(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Less: depreciation on personal property . . . . . . . . . . . . . .
84,160
(13,052)
82,570
(11,282)
86,866
(11,900)
96,228
(12,861)
115,431
(13,928)
FFO attributable to common stockholders and unit holders—
basic and diluted . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(Gain) loss on early extinguishment of debt, net—
642,268
542,754
527,574
577,862
399,559
consolidated assets . . . . . . . . . . . . . . . . . . . . . . . . . .
(1,487)
9,551
(2,684)
Gain on early extinguishment of debt, net—unconsolidated
joint ventures(1) . . . . . . . . . . . . . . . . . . . . . . . . . . .
—
—
(352)
—
—
10,588
(7,852)
FFO attributable to common stockholders and unit holders
excluding early extinguishment of debt, net—diluted . . . . . .
. . . . . . . . . . . .
Costs related to unsolicited takeover offer
640,781
25,204
552,305
—
524,538
—
577,862
—
402,295
—
FFO attributable to common stockholders and unit holders
excluding early extinguishment of debt, net and costs related
to unsolicited takeover offer—diluted . . . . . . . . . . . . . . .
Shoppingtown Mall . . . . . . . . . . . . . . . . . . . . . . . . . . .
Valley View Center . . . . . . . . . . . . . . . . . . . . . . . . . . .
Prescott Gateway . . . . . . . . . . . . . . . . . . . . . . . . . . . .
AFFO and AFFO attributable to common stockholders and
665,985
—
—
—
552,305
—
—
—
524,538
—
—
—
577,862
422
(101,105)
(16,296)
402,295
3,491
8,786
—
unit holders—diluted . . . . . . . . . . . . . . . . . . . . . . . . . .
$ 665,985
$
552,305
$ 524,538
$ 460,883
$ 414,572
Weighted average number of FFO shares outstanding for:
FFO attributable to common stockholders and unit holders—
basic(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
168,478
153,224
149,444
144,937
142,986
Adjustments for the impact of dilutive securities in computing
FFO—diluted:
Share and unit-based compensation . . . . . . . . . . . . . . . . .
FFO attributable to common stockholders and unit holders—
144
147
82
—
—
diluted(3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
168,622
153,371
149,526
144,937
142,986
(1) Unconsolidated assets are presented at the Company’s pro rata share.
(2) Calculated based upon basic net income as adjusted to reach basic FFO. During the years ended December 31, 2015, 2014,
2013, 2012 and 2011, there were 10.6 million, 10.1 million, 9.8 million, 10.9 million and 11.4 million OP Units outstanding,
respectively.
(3) The computation of FFO and AFFO—diluted shares outstanding includes the effect of share and unit-based compensation
plans and the convertible senior notes using the treasury stock method. It also assumes the conversion of MACWH, LP
common and preferred units to the extent that they are dilutive to the FFO and AFFO-diluted computation.
69
ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
The Company’s primary market risk exposure is interest rate risk. The Company has managed and
will continue to manage interest rate risk by (1) maintaining a ratio of fixed rate, long-term debt to
total debt such that floating rate exposure is kept at an acceptable level, (2) reducing interest rate
exposure on certain long-term floating rate debt through the use of interest rate caps and/or swaps with
matching maturities where appropriate, (3) using treasury rate locks where appropriate to fix rates on
anticipated debt transactions, and (4) taking advantage of favorable market conditions for long-term
debt and/or equity.
The following table sets forth information as of December 31, 2015 concerning the Company’s long
term debt obligations, including principal cash flows by scheduled maturity, weighted average interest
rates and estimated fair value (dollars in thousands):
Expected Maturity Date
For the years ending December 31,
2016
2017
2018
2019
2020
Thereafter
Total
Fair Value
CONSOLIDATED CENTERS:
Long term debt:
Fixed rate . . . . . . . . . . . . .
Average interest rate . . . . . .
Floating rate . . . . . . . . . . .
Average interest rate . . . . . .
$104,444
$177,767
$ 698,800
$810,012
$335,632
$2,175,324
$4,301,979
$4,318,020
4.03%
2.61%
3.38%
67,763
64,000
650,000
2.17%
3.30%
1.95%
3.64%
—
—%
5.15%
200,000
1.84%
3.87%
—
—%
3.80%
981,763
960,189
2.03%
Total debt—Consolidated Centers
$172,207
$241,767
$1,348,800
$810,012
$535,632
$2,175,324
$5,283,742
$5,278,209
UNCONSOLIDATED JOINT
VENTURE CENTERS:
Long term debt (at Company’s
pro rata share):
Fixed rate . . . . . . . . . . . . .
Average interest rate . . . . . .
Floating rate . . . . . . . . . . .
Average interest rate . . . . . .
Total debt—Unconsolidated Joint
. . . . . . . . .
Venture Centers
$159,861
$ 17,893
$
18,603
$ 19,845
$ 26,049
$1,550,237
$1,792,488
$1,814,610
7.02%
1,131
2.30%
4.09%
1,299
2.39%
4.09%
73,756
2.35%
4.06%
114
2.63%
3.97%
37,993
2.39%
3.88%
56,250
1.44%
4.13%
170,543
169,012
2.06%
$160,992
$ 19,192
$
92,359
$ 19,959
$ 64,042
$1,606,487
$1,963,031
$1,983,622
The Consolidated Centers’ total fixed rate debt at December 31, 2015 and 2014 was $4.3 billion
and $5.2 billion, respectively. The average interest rate on such fixed rate debt at December 31, 2015
and 2014 was 3.80% and 3.63%, respectively. The Consolidated Centers’ total floating rate debt at
December 31, 2015 and 2014 was $1.0 billion and $1.1 billion, respectively. The average interest rate on
such floating rate debt at December 31, 2015 and 2014 was 2.03% and 2.11%, respectively.
The Company’s pro rata share of the Unconsolidated Joint Venture Centers’ fixed rate debt at
December 31, 2015 and 2014 was $1.8 billion and $0.9 billion, respectively. The average interest rate on
such fixed rate debt at December 31, 2015 and 2014 was 4.13% and 4.50%, respectively. The
Company’s pro rata share of the Unconsolidated Joint Venture Centers’ floating rate debt at
December 31, 2015 and 2014 was $170.5 million and $115.4 million, respectively. The average interest
rate on such floating rate debt at December 31, 2015 and 2014 was 2.06% and 2.59%, respectively.
The Company has used derivative financial instruments in the normal course of business to
manage or hedge interest rate risk and records all derivatives on the balance sheet at fair value.
Interest rate cap agreements offer protection against floating rates on the notional amount from
exceeding the rates noted in the above schedule, and interest rate swap agreements effectively replace a
floating rate on the notional amount with a fixed rate as noted above. As of December 31, 2015, the
Company did not have any interest rate cap or swap agreements in place.
70
In addition, the Company has assessed the market risk for its floating rate debt and believes that a
1% increase in interest rates would decrease future earnings and cash flows by approximately
$11.5 million per year based on $1.2 billion of floating rate debt outstanding at December 31, 2015.
The fair value of the Company’s long-term debt is estimated based on a present value model
utilizing interest rates that reflect the risks associated with long-term debt of similar risk and duration.
In addition, the method of computing fair value for mortgage notes payable included a credit value
adjustment based on the estimated value of the property that serves as collateral for the underlying
debt (See Note 8—Mortgage Notes Payable and Note 9—Bank and Other Notes Payable in the
Company’s Notes to the Consolidated Financial Statements).
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
Refer to the Financial Statements and Financial Statement Schedules for the required information
appearing in Item 15.
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE
None.
ITEM 9A. CONTROLS AND PROCEDURES
Conclusion Regarding Effectiveness of Disclosure Controls and Procedures
As required by Rule 13a-15(b) under the Securities and Exchange Act of 1934, as amended (the
‘‘Exchange Act’’), management carried out an evaluation, under the supervision and with the
participation of the Company’s Chief Executive Officer and Chief Financial Officer, of the effectiveness
of the Company’s disclosure controls and procedures as of the end of the period covered by this
Annual Report on Form 10-K. Based on their evaluation as of December 31, 2015, the Company’s
Chief Executive Officer and Chief Financial Officer have concluded that the Company’s disclosure
controls and procedures (as defined in Rule 13a-15(e) and 15d-15(e) under the Exchange Act) were
effective to ensure that the information required to be disclosed by the Company in the reports that it
files or submits under the Exchange Act is (a) recorded, processed, summarized, and reported within
the time periods specified in the SEC’s rules and forms and (b) accumulated and communicated to the
Company’s management, including its Chief Executive Officer and Chief Financial Officer, or persons
performing similar functions, as appropriate to allow timely decisions regarding required disclosure.
Management’s Report on Internal Control Over Financial Reporting
The Company’s management is responsible for establishing and maintaining adequate internal
control over financial reporting (as defined in Rule 13a-15(f) under the Exchange Act). The Company’s
management assessed the effectiveness of the Company’s internal control over financial reporting as of
December 31, 2015. In making this assessment, the Company’s management used the criteria set forth
by the Committee of Sponsoring Organizations of the Treadway Commission in Internal Control—
Integrated Framework (2013). The Company’s management concluded that, as of December 31, 2015,
its internal control over financial reporting was effective based on this assessment.
KPMG LLP, the independent registered public accounting firm that audited the Company’s 2015,
2014 and 2013 consolidated financial statements included in this Annual Report on Form 10-K, has
issued a report on the Company’s internal control over financial reporting which follows below.
Changes in Internal Control over Financial Reporting
There were no changes in the Company’s internal control over financial reporting during the
quarter ended December 31, 2015 that have materially affected, or are reasonably likely to materially
affect, the Company’s internal control over financial reporting.
71
Report of Independent Registered Public Accounting Firm
The Board of Directors and Stockholders of
The Macerich Company:
We have audited The Macerich Company’s (the Company) internal control over financial reporting
as of December 31, 2015, based on criteria established in Internal Control—Integrated Framework (2013)
issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). The
Company’s management is responsible for maintaining effective internal control over financial reporting
and for its assessment of the effectiveness of internal control over financial reporting, included in the
accompanying Management’s Report on Internal Control over Financial Reporting. Our responsibility is
to express an opinion on the Company’s internal control over financial reporting based on our audit.
We conducted our audit in accordance with the standards of the Public Company Accounting
Oversight Board (United States). Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether effective internal control over financial reporting was maintained
in all material respects. Our audit included obtaining an understanding of internal control over
financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the
design and operating effectiveness of internal control based on the assessed risk. Our audit also
included performing such other procedures as we considered necessary in the circumstances. We believe
that our audit provides a reasonable basis for our opinion.
A company’s internal control over financial reporting is a process designed to provide reasonable
assurance regarding the reliability of financial reporting and the preparation of financial statements for
external purposes in accordance with generally accepted accounting principles. A company’s internal
control over financial reporting includes those policies and procedures that (1) pertain to the
maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and
dispositions of the assets of the company; (2) provide reasonable assurance that transactions are
recorded as necessary to permit preparation of financial statements in accordance with generally
accepted accounting principles, and that receipts and expenditures of the company are being made only
in accordance with authorizations of management and directors of the company; and (3) provide
reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or
disposition of the company’s assets that could have a material effect on the financial statements.
Because of its inherent limitations, internal control over financial reporting may not prevent or
detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject
to the risk that controls may become inadequate because of changes in conditions, or that the degree
of compliance with the policies or procedures may deteriorate.
In our opinion, The Macerich Company maintained, in all material respects, effective internal
control over financial reporting as of December 31, 2015, based on criteria established in Internal
Control—Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the
Treadway Commission.
We also have audited, in accordance with the standards of the Public Company Accounting
Oversight Board (United States), the consolidated balance sheets of the Company as of December 31,
2015 and 2014, and the related consolidated statements of operations, equity and cash flows for each of
the years in the three-year period ended December 31, 2015, and our report dated February 23, 2016
expressed an unqualified opinion on those consolidated financial statements. Our report refers to a
change in method of reporting discontinued operations.
/s/ KPMG LLP
Los Angeles, California
February 23, 2016
72
ITEM 9B. OTHER INFORMATION
None.
PART III
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE
There is hereby incorporated by reference the information which appears under the captions
‘‘Information Regarding our Director Nominees,’’ ‘‘Executive Officers,’’ ‘‘Section 16(a) Beneficial
Ownership Reporting Compliance’’ and ‘‘Audit Committee Matters’’ in the Company’s definitive proxy
statement for its 2016 Annual Meeting of Stockholders that is responsive to the information required
by this Item.
The Company has adopted a Code of Business Conduct and Ethics that provides principles of
conduct and ethics for its directors, officers and employees. This Code complies with the requirements
of the Sarbanes-Oxley Act of 2002 and applicable rules of the Securities and Exchange Commission and
the New York Stock Exchange. In addition, the Company has adopted a Code of Ethics for CEO and
Senior Financial Officers which supplements the Code of Business Conduct and Ethics applicable to all
employees and complies with the additional requirements of the Sarbanes-Oxley Act of 2002 and
applicable rules of the Securities and Exchange Commission for those officers. To the extent required
by applicable rules of the Securities and Exchange Commission and the New York Stock Exchange, the
Company intends to promptly disclose future amendments to certain provisions of these Codes or
waivers of such provisions granted to directors and executive officers, including the Company’s principal
executive officer, principal financial officer, principal accounting officer or persons performing similar
functions, on the Company’s website at www.macerich.com under ‘‘Investors—Corporate
Governance-Code of Ethics.’’ Each of these Codes of Conduct is available on the Company’s website at
www.macerich.com under ‘‘Investors—Corporate Governance.’’
During 2015, there were no material changes to the procedures described in the Company’s proxy
statement relating to the 2015 Annual Meeting of Stockholders by which stockholders may recommend
director nominees to the Company.
ITEM 11. EXECUTIVE COMPENSATION
There is hereby incorporated by reference the information which appears under the captions
‘‘Compensation of Directors,’’ ‘‘Compensation Committee Report,’’ ‘‘Compensation Discussion and
Analysis,’’ ‘‘Executive Compensation’’ and ‘‘Compensation Committee Interlocks and Insider
Participation’’ in the Company’s definitive proxy statement for its 2016 Annual Meeting of Stockholders
that is responsive to the information required by this Item.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
AND RELATED STOCKHOLDER MATTERS
There is hereby incorporated by reference the information which appears under the captions
‘‘Principal Stockholders,’’ ‘‘Information Regarding Our Director Nominees,’’ ‘‘Executive Officers’’ and
‘‘Equity Compensation Plan Information’’ in the Company’s definitive proxy statement for its 2016
Annual Meeting of Stockholders that is responsive to the information required by this Item.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR
INDEPENDENCE
There is hereby incorporated by reference the information which appears under the captions
‘‘Certain Transactions’’ and ‘‘The Board of Directors and its Committees’’ in the Company’s definitive
73
proxy statement for its 2016 Annual Meeting of Stockholders that is responsive to the information
required by this Item.
ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES
There is hereby incorporated by reference the information which appears under the captions
‘‘Principal Accountant Fees and Services’’ and ‘‘Audit Committee Pre-Approval Policy’’ in the
Company’s definitive proxy statement for its 2016 Annual Meeting of Stockholders that is responsive to
the information required by this Item.
74
ITEM 15. EXHIBITS AND FINANCIAL STATEMENT SCHEDULE
PART IV
(a) and (c)
1 Financial Statements
Report of Independent Registered Public Accounting Firm . . . . . . . . . . . . . . .
Consolidated balance sheets as of December 31, 2015 and 2014 . . . . . . . . . . . .
Consolidated statements of operations for the years ended December 31, 2015,
2014 and 2013 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Consolidated statements of equity for the years ended December 31, 2015, 2014
and 2013 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Consolidated statements of cash flows for the years ended December 31, 2015,
2014 and 2013 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Notes to consolidated financial statements . . . . . . . . . . . . . . . . . . . . . . . . . . .
Page
76
77
78
79
82
84
2 Financial Statement Schedule
Schedule III—Real estate and accumulated depreciation . . . . . . . . . . . . . . . . .
131
75
Report of Independent Registered Public Accounting Firm
The Board of Directors and Stockholders of
The Macerich Company:
We have audited the accompanying consolidated balance sheets of The Macerich Company and
subsidiaries (the ‘‘Company’’) as of December 31, 2015 and 2014, and the related consolidated
statements of operations, equity and cash flows for each of the years in the three-year period ended
December 31, 2015. In connection with our audits of the consolidated financial statements, we have
also audited the financial statement schedule III—Real Estate and Accumulated Depreciation. These
consolidated financial statements and the financial statement schedule are the responsibility of the
Company’s management. Our responsibility is to express an opinion on these consolidated financial
statements and financial statement schedule based on our audits.
We conducted our audits in accordance with the standards of the Public Company Accounting
Oversight Board (United States). Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material misstatement. An
audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the
financial statements. An audit also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial statement presentation. We
believe that our audits provide a reasonable basis for our opinion.
In our opinion, the consolidated financial statements referred to above present fairly, in all
material respects, the financial position of The Macerich Company and subsidiaries as of December 31,
2015 and 2014, and the results of their operations and their cash flows for each of the years in the
three-year period ended December 31, 2015, in conformity with U.S. generally accepted accounting
principles. Also, in our opinion, the related financial statement schedule III—Real Estate and
Accumulated Depreciation, when considered in relation to the basic consolidated financial statements
taken as a whole, presents fairly, in all material respects, the information set forth therein.
As discussed in note 2 to the consolidated financial statements, the Company changed its method
for reporting discontinued operations in 2014 due to the adoption of FASB Accounting Standards
Update No. 2014-08, Presentation of Financial Statements (Topic 205) and Property, Plant and Equipment
(Topic 360): Reporting discontinued Operations and Disclosures of Disposals of Components of an Entity.
We also have audited, in accordance with the standards of the Public Company Accounting
Oversight Board (United States), the Company’s internal control over financial reporting as of
December 31, 2015, based on criteria established in Internal Control—Integrated Framework (2013)
issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO), and our
report dated February 23, 2016, expressed an unqualified opinion on the effectiveness of the Company’s
internal control over financial reporting.
/s/ KPMG LLP
Los Angeles, California
February 23, 2016
76
THE MACERICH COMPANY
CONSOLIDATED BALANCE SHEETS
(Dollars in thousands, except par value)
December 31,
2015
2014
ASSETS:
Property, net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Cash and cash equivalents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Restricted cash . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Tenant and other receivables, net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Deferred charges and other assets, net . . . . . . . . . . . . . . . . . . . . . . . . . . .
Due from affiliates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Investments in unconsolidated joint ventures . . . . . . . . . . . . . . . . . . . . . . .
$ 8,796,912
86,510
41,389
130,002
587,283
83,928
1,532,552
$11,067,890
84,907
13,530
132,026
759,061
80,232
984,132
Total assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$11,258,576
$13,121,778
LIABILITIES AND EQUITY:
Mortgage notes payable:
Related parties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Others . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$
181,318
4,443,294
$
289,039
5,115,482
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Bank and other notes payable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Accounts payable and accrued expenses . . . . . . . . . . . . . . . . . . . . . . . . . .
Accrued dividend . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other accrued liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Distributions in excess of investments in unconsolidated joint ventures . . . .
Co-venture obligation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
4,624,612
659,130
74,398
337,703
403,281
24,457
63,756
5,404,521
887,879
115,406
—
568,716
29,957
75,450
Total liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
6,187,337
7,081,929
Commitments and contingencies
Equity:
Stockholders’ equity:
Common stock, $0.01 par value, 250,000,000 shares authorized,
154,404,986 and 158,201,996 shares issued and outstanding at
December 31, 2015 and 2014, respectively . . . . . . . . . . . . . . . . . . . .
Additional paid-in capital
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(Accumulated deficit) retained earnings . . . . . . . . . . . . . . . . . . . . . . .
Total stockholders’ equity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Noncontrolling interests . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
1,544
4,926,630
(212,760)
4,715,414
355,825
1,582
5,041,797
596,741
5,640,120
399,729
Total equity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
5,071,239
6,039,849
Total liabilities and equity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$11,258,576
$13,121,778
The accompanying notes are an integral part of these consolidated financial statements.
77
THE MACERICH COMPANY
CONSOLIDATED STATEMENTS OF OPERATIONS
(Dollars in thousands, except per share amounts)
For The Years Ended December 31,
2015
2014
2013
Revenues:
Minimum rents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Percentage rents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Tenant recoveries . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Management Companies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$
759,603
25,693
415,129
61,470
26,254
$
633,571
24,350
361,119
52,226
33,981
$
578,113
23,156
337,772
50,242
40,192
Total revenues . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
1,288,149
1,105,247
1,029,475
Expenses:
. . . . . . . . . . . . . . . . . . . . .
Shopping center and operating expenses
Management Companies’ operating expenses
. . . . . . . . . . . . . . . . . .
REIT general and administrative expenses . . . . . . . . . . . . . . . . . . . .
Costs related to unsolicited takeover offer . . . . . . . . . . . . . . . . . . . .
Depreciation and amortization . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Interest expense:
Related parties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(Gain) loss on early extinguishment of debt, net
. . . . . . . . . . . . . . . .
Total expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Equity in income of unconsolidated joint ventures . . . . . . . . . . . . . . . . .
Co-venture expense . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Income tax benefit
Gain (loss) on sale or write down of assets, net
. . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . . .
Gain on remeasurement of assets
379,815
92,340
29,870
25,204
464,472
991,701
10,515
201,428
211,943
(1,487)
1,202,157
45,164
(11,804)
3,223
378,248
22,089
353,505
88,424
29,412
—
378,716
850,057
15,134
175,555
190,689
9,551
1,050,297
60,626
(9,490)
4,269
73,440
1,423,136
329,795
93,461
27,772
—
357,165
808,193
15,016
182,231
197,247
(1,432)
1,004,008
167,580
(8,864)
1,692
(78,057)
51,205
Income from continuing operations . . . . . . . . . . . . . . . . . . . . . . . . . .
522,912
1,606,931
159,023
Discontinued operations:
Gain on disposition of assets, net . . . . . . . . . . . . . . . . . . . . . . . . . .
Income from discontinued operations . . . . . . . . . . . . . . . . . . . . . . .
Total income from discontinued operations . . . . . . . . . . . . . . . . . . . . .
Net income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Less net income attributable to noncontrolling interests . . . . . . . . . . . . .
Net income attributable to the Company . . . . . . . . . . . . . . . . . . . . . . .
Earnings per common share attributable to Company—basic:
Income from continuing operations . . . . . . . . . . . . . . . . . . . . . . . . .
Discontinued operations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Net income attributable to common stockholders . . . . . . . . . . . . . . . .
Earnings per common share attributable to Company—diluted:
Income from continuing operations . . . . . . . . . . . . . . . . . . . . . . . . .
Discontinued operations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Net income attributable to common stockholders . . . . . . . . . . . . . . . .
$
$
$
$
$
—
—
—
—
—
—
522,912
35,350
1,606,931
107,889
487,562
$ 1,499,042
3.08
—
3.08
3.08
—
3.08
$
$
$
$
10.46
—
10.46
10.45
—
10.45
$
$
$
$
$
286,414
3,522
289,936
448,959
28,869
420,090
1.07
1.94
3.01
1.06
1.94
3.00
Weighted average number of common shares outstanding:
Basic . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
157,916,000
143,144,000
139,598,000
Diluted . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
158,060,000
143,291,000
139,680,000
The accompanying notes are an integral part of these consolidated financial statements.
78
THE MACERICH COMPANY
CONSOLIDATED STATEMENTS OF EQUITY
(Dollars in thousands, except per share data)
Stockholders’ Equity
Common Stock
Shares
Par
Value
Additional
Paid-in
Capital
Total
Accumulated Stockholders’ Noncontrolling
Equity
Interests
Deficit
Total
Equity
Balance at January 1, 2013 . . . . . . . 137,507,010 $1,375 $3,715,895
Net income . . . . . . . . . . . . . . . . .
—
Amortization of share and unit-based
—
—
plans . . . . . . . . . . . . . . . . . . . .
Exercise of stock options . . . . . . . . .
Employee stock purchases . . . . . . . .
Stock offering, net . . . . . . . . . . . . .
Distributions paid ($2.36) per share . .
Distributions to noncontrolling
interests . . . . . . . . . . . . . . . . . .
Contributions from noncontrolling
interests . . . . . . . . . . . . . . . . . .
Other . . . . . . . . . . . . . . . . . . . . .
Conversion of noncontrolling interests
. . . . . . . . . . .
to common shares
Redemption of noncontrolling
interests . . . . . . . . . . . . . . . . . .
Adjustment of noncontrolling interests
in Operating Partnership . . . . . . .
88,039
2,700
22,112
2,456,956
—
—
—
—
656,866
—
—
—
—
—
25
—
—
—
—
7
—
—
28,122
99
1,089
171,077
—
—
—
(3,561)
12,977
(733)
(18,817)
$(639,741)
420,090
$3,077,529
420,090
$338,722
28,869
$3,416,251
448,959
—
—
—
—
(329,155)
28,122
99
1,089
171,102
(329,155)
—
—
—
—
—
28,122
99
1,089
171,102
(329,155)
—
—
—
—
—
—
—
(31,202)
(31,202)
—
(3,561)
18,079
—
18,079
(3,561)
12,984
(12,984)
—
(733)
(333)
(1,066)
(18,817)
18,817
—
Balance at December 31, 2013 . . . . . 140,733,683 $1,407 $3,906,148
$(548,806)
$3,358,749
$359,968
$3,718,717
The accompanying notes are an integral part of these consolidated financial statements.
79
THE MACERICH COMPANY
CONSOLIDATED STATEMENTS OF EQUITY (Continued)
(Dollars in thousands, except per share data)
Stockholders’ Equity
Common Stock
Shares
Par
Value
Additional
Paid-in
Capital
Retained
Earnings
Total
(Accumulated Stockholders’ Noncontrolling
Equity
Interests
Deficit)
Total
Equity
Balance at December 31, 2013 . . . . 140,733,683 $1,407 $3,906,148
Net income . . . . . . . . . . . . . . . . .
—
Amortization of share and unit-based
plans . . . . . . . . . . . . . . . . . . .
Employee stock purchases . . . . . . .
Stock issued to acquire properties
. .
Distributions paid ($2.51) per share .
Distributions to noncontrolling
168,379
25,007
17,140,845
—
34,871
1,231
1,161,102
—
2
—
172
—
—
—
$ (548,806)
1,499,042
$3,358,749
1,499,042
$359,968
107,889
$3,718,717
1,606,931
—
—
—
(353,495)
34,873
1,231
1,161,274
(353,495)
—
—
—
—
34,873
1,231
1,161,274
(353,495)
interests . . . . . . . . . . . . . . . . .
—
—
—
Change in noncontrolling interests
due to acquisition/disposition of
consolidated entities . . . . . . . . . .
Conversion of noncontrolling
—
interests to common shares . . . . .
134,082
Redemption of noncontrolling
interests . . . . . . . . . . . . . . . . .
Adjustment of noncontrolling
interests in Operating Partnership .
—
—
—
1
—
—
(3,858)
2,409
(157)
(59,949)
—
—
—
—
—
—
(32,230)
(32,230)
(3,858)
(93,358)
(97,216)
2,410
(2,410)
—
(157)
(79)
(236)
(59,949)
59,949
—
Balance at December 31, 2014 . . . . 158,201,996 $1,582 $5,041,797
$ 596,741
$5,640,120
$399,729
$6,039,849
The accompanying notes are an integral part of these consolidated financial statements.
80
THE MACERICH COMPANY
CONSOLIDATED STATEMENTS OF EQUITY (Continued)
(Dollars in thousands, except per share data)
Stockholders’ Equity
Common Stock
Shares
Par
Value
Additional
Paid-in
Capital
Retained
Earnings
Total
(Accumulated Stockholders’ Noncontrolling
Equity
Interests
Deficit)
Total
Equity
Balance at December 31, 2014 . . . . 158,201,996 $1,582 $5,041,797
Net income . . . . . . . . . . . . . . . .
—
Amortization of share and
—
—
$
596,741
487,562
$ 5,640,120
487,562
$399,729
35,350
$ 6,039,849
522,912
241,186
23,036
(4,140,788)
2
—
(41)
34,373
1,512
(153,602)
—
—
(246,501)
34,375
1,512
(400,144)
— (1,050,562)
(1,050,562)
—
—
—
—
34,375
1,512
(400,144)
(1,050,562)
unit-based plans . . . . . . . . . . . .
Employee stock purchases . . . . . . .
Stock repurchase . . . . . . . . . . . . .
Distributions declared ($6.63) per
share . . . . . . . . . . . . . . . . . . .
Distributions to noncontrolling
interests . . . . . . . . . . . . . . . . .
Contributions from noncontrolling
interests . . . . . . . . . . . . . . . . .
Other . . . . . . . . . . . . . . . . . . . .
Conversion of noncontrolling
interests to common shares . . . . .
79,556
Redemption of noncontrolling
interests . . . . . . . . . . . . . . . . .
Adjustment of noncontrolling
interests in Operating Partnership
—
—
—
—
—
—
—
—
—
—
1
—
—
—
—
(1,593)
1,558
(343)
2,928
—
—
—
—
—
—
—
(74,677)
(74,677)
—
(1,593)
23
—
1,559
(1,559)
(343)
(113)
2,928
(2,928)
23
(1,593)
—
(456)
—
Balance at December 31, 2015 . . . . 154,404,986 $1,544 $4,926,630
$ (212,760)
$ 4,715,414
$355,825
$ 5,071,239
The accompanying notes are an integral part of these consolidated financial statements.
81
THE MACERICH COMPANY
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Dollars in thousands)
Cash flows from operating activities:
Net income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 522,912 $ 1,606,931 $ 448,959
Adjustments to reconcile net income to net cash provided by operating
For the Years Ended December 31,
2015
2014
2013
activities:
(Gain) loss on early extinguishment of debt, net . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . .
(Gain) loss on sale or write down of assets, net
Gain on remeasurement of assets . . . . . . . . . . . . . . . . . . . . . . . . .
Gain on disposition of assets, net from discontinued operations . . . .
Depreciation and amortization . . . . . . . . . . . . . . . . . . . . . . . . . . .
Amortization of net premium on mortgage notes payable . . . . . . . .
Amortization of share and unit-based plans . . . . . . . . . . . . . . . . . .
Straight-line rent adjustment . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Amortization of above and below-market leases . . . . . . . . . . . . . . .
Provision for doubtful accounts . . . . . . . . . . . . . . . . . . . . . . . . . . .
Income tax benefit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Equity in income of unconsolidated joint ventures . . . . . . . . . . . . . .
Co-venture expense . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Distributions of income from unconsolidated joint ventures . . . . . . .
Changes in assets and liabilities, net of acquisitions and dispositions:
Tenant and other receivables . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Due from affiliates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Accounts payable and accrued expenses . . . . . . . . . . . . . . . . . . .
Other accrued liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(16,066)
(378,248)
(22,089)
—
471,320
(20,232)
28,367
(7,192)
(16,510)
4,698
(3,223)
(45,164)
11,804
4,541
1,908
13,892
(7,025)
(4,014)
698
526
(73,440)
(1,423,136)
(1,432)
78,057
(51,205)
— (286,414)
383,002
(6,822)
24,207
(7,987)
(6,726)
4,150
(1,692)
(167,580)
8,864
8,538
387,785
(8,906)
29,463
(5,825)
(9,083)
3,962
(4,269)
(60,626)
9,490
2,412
(12,356)
(15,594)
(1,770)
(123)
(24,735)
(5,482)
7,761
266
(747)
(5,682)
Net cash provided by operating activities . . . . . . . . . . . . . . . . . . . . . .
540,377
400,706
422,035
Cash flows from investing activities:
Acquisition of properties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Development, redevelopment, expansion and renovation of properties .
Property improvements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Cash acquired from acquisitions . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Proceeds from note receivable . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Issuance of notes receivable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Proceeds from maturities of marketable securities . . . . . . . . . . . . . . .
Deposit on acquisition of property . . . . . . . . . . . . . . . . . . . . . . . . . .
Deferred leasing costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Distributions from unconsolidated joint ventures . . . . . . . . . . . . . . . .
Contributions to unconsolidated joint ventures . . . . . . . . . . . . . . . . . .
Collections of loans to unconsolidated joint ventures, net . . . . . . . . . .
Proceeds from sale of assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Restricted cash . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(26,250)
(272,334)
(53,335)
—
1,833
—
—
(12,500)
(33,902)
105,640
(426,186)
—
646,898
(30,888)
(15,233)
(185,412)
(66,718)
28,890
4,825
(65,130)
—
—
(28,019)
78,222
(336,621)
2,756
320,123
6,526
(516,239)
(158,682)
(51,683)
—
8,347
(13,330)
23,769
—
(27,669)
618,048
(97,898)
589
416,077
70,538
Net cash (used in) provided by investing activities . . . . . . . . . . . . . . .
(101,024)
(255,791)
271,867
The accompanying notes are an integral part of these consolidated financial statements.
82
THE MACERICH COMPANY
CONSOLIDATED STATEMENTS OF CASH FLOWS (Continued)
(Dollars in thousands)
Cash flows from financing activities:
For the Years Ended December 31,
2015
2014
2013
4,080,671
Proceeds from mortgages, bank and other notes payable . . . . . . . . . . .
Payments on mortgages, bank and other notes payable . . . . . . . . . . . . . (3,284,213)
(11,805)
Deferred financing costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(11,138)
Payment of finance deposits, net of refunds received . . . . . . . . . . . . . .
1,512
Proceeds from share and unit-based plans . . . . . . . . . . . . . . . . . . . . . .
—
Proceeds from stock offerings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Payment of stock issuance costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
—
(400,144)
Stock repurchases
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(456)
Redemption of noncontrolling interests . . . . . . . . . . . . . . . . . . . . . . .
23
Contributions from noncontrolling interests
. . . . . . . . . . . . . . . . . . . .
(1,593)
. . . . . . . . . . . . . . . . . . . . . . . . . .
Purchase of noncontrolling interest
Payment of contingent consideration . . . . . . . . . . . . . . . . . . . . . . . . .
Dividends and distributions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Distributions to co-venture partner . . . . . . . . . . . . . . . . . . . . . . . . . .
2,572,764
1,204,946
(853,080) (3,051,072)
(11,966)
—
1,188
— 173,011
(1,909)
—
(1,066)
4,140
—
—
(355,506)
(19,564)
(5,503)
—
(236)
—
(55,867)
— (18,667)
(385,725)
(15,555)
(1,267)
—
1,231
(787,109)
(23,498)
Net cash used in financing activities . . . . . . . . . . . . . . . . . . . . . . . . . .
(437,750)
(129,723)
(689,980)
Net increase in cash and cash equivalents . . . . . . . . . . . . . . . . . . . . . .
Cash and cash equivalents, beginning of year . . . . . . . . . . . . . . . . . . . . .
1,603
84,907
15,192
69,715
3,922
65,793
Cash and cash equivalents, end of year . . . . . . . . . . . . . . . . . . . . . . . . . $
86,510 $
84,907 $
69,715
Supplemental cash flow information:
Cash payments for interest, net of amounts capitalized . . . . . . . . . . . . . $ 231,106 $ 186,877 $ 195,129
Non-cash investing and financing activities:
Accrued development costs included in accounts payable and accrued
expenses and other accrued liabilities . . . . . . . . . . . . . . . . . . . . . . . $
52,983 $
83,108 $
41,334
Acquisition of property by issuance of common stock . . . . . . . . . . . . . . $
— $1,166,777 $
—
Conversion of Operating Partnership Units to common stock . . . . . . . . $
1,559 $
2,410 $
12,984
Accrued dividend . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 337,703 $
— $
—
Acquisition of properties by assumption of mortgage note payable and
other accrued liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
— $1,414,659 $ 257,064
Mortgage notes payable settled in deed-in-lieu of foreclosure . . . . . . . . $
34,149 $
— $
84,000
Mortgage notes payable assumed by buyers in sales of properties . . . . . $
— $
31,725 $ 224,737
Mortgage notes payable assumed by buyer in exchange for investment
in unconsolidated joint venture . . . . . . . . . . . . . . . . . . . . . . . . . . . . $1,782,455 $
— $
Note receivable issued in connection with sale of property . . . . . . . . . . $
— $
9,603 $
Acquisition of property in exchange for settlement of notes receivable . . $
— $
14,120 $
Acquisition of property in exchange for investment in unconsolidated
joint venture . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
76,250 $
15,767 $
Contingent consideration in acquisition of property . . . . . . . . . . . . . . . $
— $
10,012 $
—
—
—
—
—
Assumption of mortgage notes payable and other liabilities from
unconsolidated joint ventures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
50,000 $
— $
54,271
Application of deposit to acquire property . . . . . . . . . . . . . . . . . . . . . $
— $
— $
30,000
The accompanying notes are an integral part of these consolidated financial statements.
83
THE MACERICH COMPANY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Dollars in thousands, except per share amounts)
1. Organization:
The Macerich Company (the ‘‘Company’’) is involved in the acquisition, ownership, development,
redevelopment, management and leasing of regional and community/power shopping centers (the
‘‘Centers’’) located throughout the United States.
The Company commenced operations effective with the completion of its initial public offering on
March 16, 1994. As of December 31, 2015, the Company was the sole general partner of and held a
93% ownership interest in The Macerich Partnership, L.P. (the ‘‘Operating Partnership’’). The Company
was organized to qualify as a real estate investment trust (‘‘REIT’’) under the Internal Revenue Code
of 1986, as amended (the ‘‘Code’’).
The property management, leasing and redevelopment of the Company’s portfolio is provided by
the Company’s management companies, Macerich Property Management Company, LLC, a single
member Delaware limited liability company, Macerich Management Company, a California corporation,
Macerich Arizona Partners LLC, a single member Arizona limited liability company, Macerich Arizona
Management LLC, a single member Delaware limited liability company, Macerich Partners of
Colorado, LLC, a single member Colorado limited liability company, MACW Mall Management, Inc., a
New York corporation, and MACW Property Management, LLC, a single member New York limited
liability company. All seven of the management companies are collectively referred to herein as the
‘‘Management Companies.’’
2. Summary of Significant Accounting Policies:
Basis of Presentation:
These consolidated financial statements have been prepared in accordance with generally accepted
accounting principles (‘‘GAAP’’) in the United States of America. The accompanying consolidated
financial statements include the accounts of the Company and the Operating Partnership. Investments
in entities in which the Company has a controlling financial interest or entities that meet the definition
of a variable interest entity in which the Company has, as a result of ownership, contractual or other
financial interests, both the power to direct activities that most significantly impact the economic
performance of the variable interest entity and the obligation to absorb losses or the right to receive
benefits that could potentially be significant to the variable interest entity are consolidated; otherwise
they are accounted for under the equity method of accounting and are reflected as investments in
unconsolidated joint ventures. All intercompany accounts and transactions have been eliminated in the
consolidated financial statements.
Cash and Cash Equivalents and Restricted Cash:
The Company considers all highly liquid investments with an original maturity of three months or
less when purchased to be cash equivalents, for which cost approximates fair value. Restricted cash
includes impounds of property taxes and other capital reserves required under loan agreements.
Revenues:
Minimum rental revenues are recognized on a straight-line basis over the terms of the related
leases. The difference between the amount of rent due in a year and the amount recorded as rental
income is referred to as the ‘‘straight-line rent adjustment.’’ Minimum rents were increased by $7,192,
84
THE MACERICH COMPANY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Dollars in thousands, except per share amounts)
2. Summary of Significant Accounting Policies: (Continued)
$5,825 and $7,498 due to the straight-line rent adjustment during the years ended December 31, 2015,
2014 and 2013, respectively. Percentage rents are recognized and accrued when tenants’ specified sales
targets have been met.
Estimated recoveries from certain tenants for their pro rata share of real estate taxes, insurance
and other shopping center operating expenses are recognized as revenues in the period the applicable
expenses are incurred. Other tenants pay a fixed rate and these tenant recoveries are recognized as
revenues on a straight-line basis over the term of the related leases.
The Management Companies provide property management, leasing, corporate, development,
redevelopment and acquisition services to affiliated and non-affiliated shopping centers. In
consideration for these services, the Management Companies receive monthly management fees
generally ranging from 1.5% to 5% of the gross monthly rental revenue of the properties managed.
Property:
Maintenance and repair expenses are charged to operations as incurred. Costs for major
replacements and betterments, which includes HVAC equipment, roofs, parking lots, etc., are
capitalized and depreciated over their estimated useful lives. Gains and losses are recognized upon
disposal or retirement of the related assets and are reflected in earnings.
Property is recorded at cost and is depreciated using a straight-line method over the estimated
useful lives of the assets as follows:
Buildings and improvements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Tenant improvements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Equipment and furnishings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
5 - 40 years
5 - 7 years
5 - 7 years
Capitalization of Costs:
The Company capitalizes costs incurred in redevelopment, development, renovation and
improvement of properties. The capitalized costs include pre-construction costs essential to the
development of the property, development costs, construction costs, interest costs, real estate taxes,
salaries and related costs and other costs incurred during the period of development. These capitalized
costs include direct and certain indirect costs clearly associated with the project. Indirect costs include
real estate taxes, insurance and certain shared administrative costs. In assessing the amounts of direct
and indirect costs to be capitalized, allocations are made to projects based on estimates of the actual
amount of time spent on each activity. Indirect costs not clearly associated with specific projects are
expensed as period costs. Capitalized indirect costs are allocated to development and redevelopment
activities based on the square footage of the portion of the building not held available for immediate
occupancy. If costs and activities incurred to ready the vacant space cease, then cost capitalization is
also discontinued until such activities are resumed. Once work has been completed on a vacant space,
project costs are no longer capitalized. For projects with extended lease-up periods, the Company ends
the capitalization when significant activities have ceased, which does not exceed the shorter of a
one-year period after the completion of the building shell or when the construction is substantially
complete.
85
THE MACERICH COMPANY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Dollars in thousands, except per share amounts)
2. Summary of Significant Accounting Policies: (Continued)
Investment in Unconsolidated Joint Ventures:
The Company accounts for its investments in joint ventures using the equity method of accounting
unless the Company has a controlling financial interest in the joint venture or the joint venture meets
the definition of a variable interest entity in which the Company is the primary beneficiary through
both its power to direct activities that most significantly impact the economic performance of the
variable interest entity and the obligation to absorb losses or the right to receive benefits that could
potentially be significant to the variable interest entity. Although the Company has a greater than 50%
interest in Corte Madera Village, LLC, Candlestick Center LLC and Pacific Premier Retail LLC, the
Company does not have controlling financial interests in these joint ventures as it shares management
control with the partners in these joint venture and, therefore, accounts for its investments in these
joint ventures using the equity method of accounting.
Equity method investments are initially recorded on the balance sheet at cost and are subsequently
adjusted to reflect the Company’s proportionate share of net earnings and losses, distributions received,
additional contributions and certain other adjustments, as appropriate. The Company separately reports
investments in joint ventures when accumulated distributions have exceeded the Company’s investment,
as distributions in excess of investments in unconsolidated joint ventures. The net investment of certain
joint ventures is less than zero because of financing or operating distributions that are usually greater
than net income, as net income includes charges for depreciation and amortization.
Acquisitions:
The Company allocates the estimated fair value of acquisitions to land, building, tenant
improvements and identified intangible assets and liabilities, based on their estimated fair values. In
addition, any assumed mortgage notes payable are recorded at their estimated fair values. The
estimated fair value of the land and buildings is determined utilizing an ‘‘as if vacant’’ methodology.
Tenant improvements represent the tangible assets associated with the existing leases valued on a fair
value basis at the acquisition date prorated over the remaining lease terms. The tenant improvements
are classified as an asset under property and are depreciated over the remaining lease terms.
Identifiable intangible assets and liabilities relate to the value of in-place operating leases which come
in three forms: (i) leasing commissions and legal costs, which represent the value associated with ‘‘cost
avoidance’’ of acquiring in-place leases, such as lease commissions paid under terms generally
experienced in the Company’s markets; (ii) value of in-place leases, which represents the estimated loss
of revenue and of costs incurred for the period required to lease the ‘‘assumed vacant’’ property to the
occupancy level when purchased; and (iii) above or below-market value of in-place leases, which
represents the difference between the contractual rents and market rents at the time of the acquisition,
discounted for tenant credit risks. Leasing commissions and legal costs are recorded in deferred charges
and other assets and are amortized over the remaining lease terms. The value of in-place leases are
recorded in deferred charges and other assets and amortized over the remaining lease terms plus any
below-market fixed rate renewal options. Above or below-market leases are classified in deferred
charges and other assets or in other accrued liabilities, depending on whether the contractual terms are
above or below-market, and the asset or liability is amortized to minimum rents over the remaining
terms of the leases. The remaining lease terms of below-market leases may include certain below-
market fixed-rate renewal periods. In considering whether or not a lessee will execute a below-market
86
THE MACERICH COMPANY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Dollars in thousands, except per share amounts)
2. Summary of Significant Accounting Policies: (Continued)
fixed-rate lease renewal option, the Company evaluates economic factors and certain qualitative factors
at the time of acquisition such as tenant mix in the Center, the Company’s relationship with the tenant
and the availability of competing tenant space. The initial allocation of purchase price is based on
management’s preliminary assessment, which may change when final information becomes available.
Subsequent adjustments made to the initial purchase price allocation are made within the allocation
period, which does not exceed one year. The purchase price allocation is described as preliminary if it
is not yet final. The use of different assumptions in the allocation of the purchase price of the acquired
assets and liabilities assumed could affect the timing of recognition of the related revenues and
expenses.
The Company immediately expenses costs associated with business combinations as period costs.
Remeasurement gains are recognized when the Company obtains control of an existing equity
method investment to the extent that the fair value of the existing equity investment exceeds the
carrying value of the investment.
Deferred Charges:
Costs relating to obtaining tenant leases are deferred and amortized over the initial term of the
lease agreement using the straight-line method. As these deferred leasing costs represent productive
assets incurred in connection with the Company’s leasing arrangements at the Centers, the related cash
flows are classified as investing activities within the accompanying Consolidated Statements of Cash
Flows. Costs relating to financing of shopping center properties are deferred and amortized over the
life of the related loan using the straight-line method, which approximates the effective interest
method.
The range of the terms of the agreements is as follows:
Deferred lease costs . . . . . . . . . . . . . . .
Deferred financing costs . . . . . . . . . . . .
1 - 15 years
1 - 15 years
Accounting for Impairment:
The Company assesses whether an indicator of impairment in the value of its properties exists by
considering expected future operating income, trends and prospects, as well as the effects of demand,
competition and other economic factors. Such factors include projected rental revenue, operating costs
and capital expenditures as well as estimated holding periods and capitalization rates. If an impairment
indicator exists, the determination of recoverability is made based upon the estimated undiscounted
future net cash flows, excluding interest expense. The amount of impairment loss, if any, is determined
by comparing the fair value, as determined by a discounted cash flows analysis, with the carrying value
of the related assets. The Company generally holds and operates its properties long-term, which
decreases the likelihood of their carrying values not being recoverable. Properties classified as held for
sale are measured at the lower of the carrying amount or fair value less cost to sell.
The Company reviews its investments in unconsolidated joint ventures for a series of operating
losses and other factors that may indicate that a decrease in the value of its investments has occurred
which is other-than-temporary. The investment in each unconsolidated joint venture is evaluated
87
THE MACERICH COMPANY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Dollars in thousands, except per share amounts)
2. Summary of Significant Accounting Policies: (Continued)
periodically, and as deemed necessary, for recoverability and valuation declines that are
other-than-temporary.
Derivative Instruments and Hedging Activities:
The Company recognizes all derivatives in the consolidated financial statements and measures the
derivatives at fair value. The Company uses interest rate swap and cap agreements (collectively,
‘‘interest rate agreements’’) in the normal course of business to manage or reduce its exposure to
adverse fluctuations in interest rates. The Company designs its hedges to be effective in reducing the
risk exposure that they are designated to hedge. Any instrument that meets the cash flow hedging
criteria is formally designated as a cash flow hedge at the inception of the derivative contract. On an
ongoing quarterly basis, the Company adjusts its balance sheet to reflect the current fair value of its
derivatives. To the extent they are effective, changes in fair value are recorded in comprehensive
income. Ineffective portions, if any, are included in net income (loss).
Amounts paid (received) as a result of interest rate agreements are recorded as an addition
(reduction) to (of) interest expense.
If any derivative instrument used for risk management does not meet the hedging criteria, it is
marked-to-market each period with the change in value included in the consolidated statements of
operations.
Share and Unit-based Compensation Plans:
The cost of share and unit-based compensation awards is measured at the grant date based on the
calculated fair value of the awards and is recognized on a straight-line basis over the requisite service
period, which is generally the vesting period of the awards. For market-indexed LTIP awards,
compensation cost is recognized under the graded attribution method.
Income Taxes:
The Company elected to be taxed as a REIT under the Code commencing with its taxable year
ended December 31, 1994. To qualify as a REIT, the Company must meet a number of organizational
and operational requirements, including a requirement that it distribute at least 90% of its taxable
income to its stockholders. It is management’s current intention to adhere to these requirements and
maintain the Company’s REIT status. As a REIT, the Company generally will not be subject to
corporate level federal income tax on taxable income it distributes currently to its stockholders. If the
Company fails to qualify as a REIT in any taxable year, then it will be subject to federal income taxes
at regular corporate rates (including any applicable alternative minimum tax) and may not be able to
qualify as a REIT for four subsequent taxable years. Even if the Company qualifies for taxation as a
REIT, the Company may be subject to certain state and local taxes on its income and property and to
federal income and excise taxes on its undistributed taxable income, if any.
Each partner is taxed individually on its share of partnership income or loss, and accordingly, no
provision for federal and state income tax is provided for the Operating Partnership in the consolidated
financial statements. The Company’s taxable REIT subsidiaries (‘‘TRSs’’) are subject to corporate level
income taxes, which are provided for in the Company’s consolidated financial statements.
88
THE MACERICH COMPANY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Dollars in thousands, except per share amounts)
2. Summary of Significant Accounting Policies: (Continued)
Deferred tax assets and liabilities are recognized for the expected future tax consequences of
events that have been included in the financial statements or tax returns. Under this method, deferred
tax assets and liabilities are determined based on the differences between the financial reporting and
tax bases of assets and liabilities using enacted tax rates in effect for the year in which the differences
are expected to reverse. The deferred tax assets and liabilities of the TRSs relate primarily to
differences in the book and tax bases of property and to operating loss carryforwards for federal and
state income tax purposes. A valuation allowance for deferred tax assets is provided if the Company
believes it is more likely than not that all or some portion of the deferred tax assets will not be
realized. Realization of deferred tax assets is dependent on the Company generating sufficient taxable
income in future periods.
Segment Information:
The Company currently operates in one business segment, the acquisition, ownership,
development, redevelopment, management and leasing of regional and community shopping centers.
Additionally, the Company operates in one geographic area, the United States.
Fair Value of Financial Instruments:
The fair value hierarchy distinguishes between market participant assumptions based on market
data obtained from sources independent of the reporting entity and the reporting entity’s own
assumptions about market participant assumptions.
Level 1 inputs utilize quoted prices in active markets for identical assets or liabilities that the
Company has the ability to access. Level 2 inputs are inputs other than quoted prices included in
Level 1 that are observable for the asset or liability, either directly or indirectly. Level 2 inputs may
include quoted prices for similar assets and liabilities in active markets, as well as inputs that are
observable for the asset or liability (other than quoted prices), such as interest rates, foreign exchange
rates and yield curves that are observable at commonly quoted intervals. Level 3 inputs are
unobservable inputs for the asset or liability, which are typically based on an entity’s own assumptions,
as there is little, if any, related market activity. In instances where the determination of the fair value
measurement is based on inputs from different levels of the fair value hierarchy, the level in the fair
value hierarchy within which the entire fair value measurement falls is based on the lowest level input
that is significant to the fair value measurement in its entirety. The Company’s assessment of the
significance of a particular input to the fair value measurement in its entirety requires judgment, and
considers factors specific to the asset or liability.
The Company calculates the fair value of financial instruments and includes this additional
information in the notes to consolidated financial statements when the fair value is different than the
carrying value of those financial instruments. When the fair value reasonably approximates the carrying
value, no additional disclosure is made.
The fair values of interest rate agreements are determined using the market standard methodology
of discounting the future expected cash receipts that would occur if variable interest rates fell below or
rose above the strike rate of the interest rate agreements. The variable interest rates used in the
calculation of projected receipts on the interest rate agreements are based on an expectation of future
89
THE MACERICH COMPANY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Dollars in thousands, except per share amounts)
2. Summary of Significant Accounting Policies: (Continued)
interest rates derived from observable market interest rate curves and volatilities. The Company
incorporates credit valuation adjustments to appropriately reflect both its own nonperformance risk and
the respective counterparty’s nonperformance risk in the fair value measurements. In adjusting the fair
value of its derivative contracts for the effect of nonperformance risk, the Company has considered the
impact of netting and any applicable credit enhancements, such as collateral postings, thresholds,
mutual puts and guarantees.
Concentration of Risk:
The Company maintains its cash accounts in a number of commercial banks. Accounts at these
banks are guaranteed by the Federal Deposit Insurance Corporation (‘‘FDIC’’) up to $250. At various
times during the year, the Company had deposits in excess of the FDIC insurance limit.
No Center or tenant generated more than 10% of total revenues during the years ended
December 31, 2015, 2014 or 2013.
Management Estimates:
The preparation of financial statements in conformity with GAAP requires management to make
estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of
contingent assets and liabilities at the date of the financial statements and the reported amounts of
revenues and expenses during the reporting period. Actual results could differ from those estimates.
Recent Accounting Pronouncements:
In May 2014, the Financial Accounting Standards Board (‘‘FASB’’) issued Accounting Standards
Update (‘‘ASU’’) 2014-09, ‘‘Revenue From Contracts With Customers,’’ which outlines a comprehensive
model for entities to use in accounting for revenue arising from contracts with customers. ASU 2014-09
states that ‘‘an entity recognizes revenue to depict the transfer of promised goods or services to
customers in an amount that reflects the consideration to which the entity expects to be entitled in
exchange for those goods or services.’’ While ASU 2014-09 specifically references contracts with
customers, it may apply to certain other transactions such as the sale of real estate or equipment. In
July 2015, the FASB voted to defer the effective date of ASU 2014-09 by one year. Accordingly,
ASU 2014-09 is effective for the Company beginning January 1, 2018, with early adoption permitted
beginning January 1, 2017. The Company does not expect the adoption of this standard to have a
significant impact on the consolidated financial statements.
In February 2015, the FASB issued ASU 2015-02, ‘‘Consolidation (Topic 810): Amendments to the
Consolidation Analysis,’’ which makes certain changes to both the variable interest model and the
voting model, including changes to (1) the identification of variable interests (fees paid to a decision
maker or service provider), (2) the variable interest entity characteristics for a limited partnership or
similar entity and (3) the primary beneficiary determination. ASU 2015-02 is effective for the Company
beginning January 1, 2016. Early adoption is permitted. The Company does not expect the adoption of
this standard to have a significant impact on the consolidated financial statements.
In April 2015, the FASB issued ASU 2015-03, ‘‘Simplifying the Presentation of Debt Issuance
Costs,’’ which requires that debt issuance costs related to a recognized debt liability be presented in the
90
THE MACERICH COMPANY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Dollars in thousands, except per share amounts)
2. Summary of Significant Accounting Policies: (Continued)
balance sheet as a direct deduction from the carrying amount of that debt liability, consistent with debt
discounts. The recognition and measurement guidance for debt issuance costs are not affected.
ASU 2015-03 is effective for the Company beginning January 1, 2016. Early adoption is permitted.
Upon adoption, the Company will apply the new standard on a retrospective basis and adjust the
balance sheet of each individual period to reflect the period-specific effects of applying the new
standard. The Company does not expect the adoption of this standard to have a significant impact on
the consolidated financial statements.
In September 2015, the FASB issued ASU 2015-16, ‘‘Simplifying the Accounting for Measurement-
Period Adjustments,’’ which requires adjustments to provisional amounts used in business combinations
during the measurement period to be recognized in the reporting period in which the adjustment
amounts are determined. It also requires the disclosure of the impact on changes in estimates on
earnings, depreciation, amortization and other income effects. ASU 2015-16 is effective for the
Company beginning January 1, 2016. The Company does not expect the adoption of this standard to
have a significant impact on the consolidated financial statements.
91
THE MACERICH COMPANY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Dollars in thousands, except per share amounts)
3. Earnings Per Share (‘‘EPS’’):
The following table reconciles the numerator and denominator used in the computation of
earnings per share for the years ended December 31 (shares in thousands):
2015
2014
2013
Numerator
Income from continuing operations . . . . . . . . . . . . . . . . . . . . . . . .
Income from discontinued operations . . . . . . . . . . . . . . . . . . . . . . .
Net income attributable to noncontrolling interests . . . . . . . . . . . . .
$522,912
—
(35,350)
$1,606,931
$159,023
— 289,936
(28,869)
(107,889)
Net income attributable to the Company . . . . . . . . . . . . . . . . . . . .
Allocation of earnings to participating securities . . . . . . . . . . . . . . .
487,562
(1,493)
1,499,042
(1,576)
420,090
(397)
Numerator for basic and diluted earnings per share—net income
attributable to common stockholders . . . . . . . . . . . . . . . . . . . . .
$486,069
$1,497,466
$419,693
Denominator
Denominator for basic earnings per share—weighted average
number of common shares outstanding . . . . . . . . . . . . . . . . . . . .
157,916
143,144
139,598
Effect of dilutive securities(1)
Share and unit based compensation . . . . . . . . . . . . . . . . . . . . . .
144
147
82
Denominator for diluted earnings per share—weighted average
number of common shares outstanding . . . . . . . . . . . . . . . . . . . .
158,060
143,291
139,680
Earnings per common share—basic:
Income from continuing operations . . . . . . . . . . . . . . . . . . . . . .
Discontinued operations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Net income attributable to common stockholders . . . . . . . . . . . .
Earnings per common share—diluted:
Income from continuing operations . . . . . . . . . . . . . . . . . . . . . .
Discontinued operations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Net income attributable to common stockholders . . . . . . . . . . . .
$
$
$
$
3.08
—
3.08
3.08
—
3.08
$
$
$
$
10.46
—
10.46
10.45
—
10.45
$
$
$
$
1.07
1.94
3.01
1.06
1.94
3.00
(1) Diluted EPS excludes 139,186, 179,667 and 184,304 convertible preferred units for the years ended
December 31, 2015, 2014 and 2013, respectively, as their impact was antidilutive.
Diluted EPS excludes 10,562,154 and 10,079,935 and 9,845,602 Operating Partnership units (‘‘OP
Units’’) for the years ended December 31, 2015, 2014 and 2013, respectively, as their effect was
antidilutive.
92
THE MACERICH COMPANY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Dollars in thousands, except per share amounts)
4. Investments in Unconsolidated Joint Ventures:
The following are the Company’s direct or indirect investments in various joint ventures with third
parties. The Company’s direct or indirect ownership interest in each joint venture as of December 31,
2015 was as follows:
Joint Venture
Ownership %(1)
443 Wabash MAB LLC . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
AM Tysons LLC . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Biltmore Shopping Center Partners LLC . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Candlestick Center LLC—Fashion Outlets of San Francisco . . . . . . . . . . . . . . . . . . . . .
Coolidge Holding LLC . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Corte Madera Village, LLC . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Fashion Outlets of Philadelphia—Various Entities . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Jaren Associates #4 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Kierland Commons Investment LLC . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Macerich Northwestern Associates—Broadway Plaza . . . . . . . . . . . . . . . . . . . . . . . . . .
MS Portfolio LLC . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
North Bridge Chicago LLC . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
One Scottsdale Investors LLC . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Pacific Premier Retail LLC—Various Properties . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Propcor II Associates, LLC—Boulevard Shops . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Scottsdale Fashion Square Partnership . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
The Market at Estrella Falls LLC . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Tysons Corner LLC . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Tysons Corner Hotel I LLC . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Tysons Corner Property Holdings II LLC . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Tysons Corner Property LLC . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
West Acres Development, LLP . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Westcor/Gilbert, L.L.C.
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Westcor/Queen Creek LLC . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Westcor/Surprise Auto Park LLC . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
WMAP, L.L.C.—Atlas Park . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
45.0%
50.0%
50.0%
50.1%
37.5%
50.1%
50.0%
12.5%
50.0%
50.0%
50.0%
50.0%
50.0%
60.0%
50.0%
50.0%
40.1%
50.0%
50.0%
50.0%
50.0%
19.0%
50.0%
38.0%
33.3%
50.0%
(1) The Company’s ownership interest in this table reflects its direct or indirect legal ownership
interest. Legal ownership may, at times, not equal the Company’s economic interest in the listed
entities because of various provisions in certain joint venture agreements regarding distributions of
cash flow based on capital account balances, allocations of profits and losses and payments of
preferred returns. As a result, the Company’s actual economic interest (as distinct from its legal
ownership interest) in certain of the properties could fluctuate from time to time and may not
wholly align with its legal ownership interests. Substantially all of the Company’s joint venture
agreements contain rights of first refusal, buy-sell provisions, exit rights, default dilution remedies
and/or other break up provisions or remedies which are customary in real estate joint venture
agreements and which may, positively or negatively, affect the ultimate realization of cash flow
and/or capital or liquidation proceeds.
93
THE MACERICH COMPANY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Dollars in thousands, except per share amounts)
4. Investments in Unconsolidated Joint Ventures: (Continued)
The Company has made the following investments and dispositions in unconsolidated joint
ventures during the years ended December 31, 2015, 2014 and 2013:
On May 29, 2013, the Company’s joint venture in Pacific Premier Retail LLC sold Redmond Town
Center Office, a 582,000 square foot office building in Redmond, Washington, for $185,000, resulting in
a gain on the sale of assets of $89,157 to the joint venture. The Company’s share of the gain was
$44,424, which was included in equity in income of unconsolidated joint ventures during the year ended
December 31, 2013. The Company used its share of the proceeds from the sale to pay down its line of
credit and for general corporate purposes.
On June 12, 2013, the Company’s joint venture in Pacific Premier Retail LLC sold Kitsap Mall, an
846,000 square foot regional shopping center in Silverdale, Washington, for $127,000, resulting in a gain
on the sale of assets of $55,150 to the joint venture. The Company’s share of the gain was $28,127,
which was included in equity in income of unconsolidated joint ventures during the year ended
December 31, 2013. The Company used its share of the proceeds from the sale to pay down its line of
credit and for general corporate purposes.
On August 1, 2013, the Company’s joint venture in Pacific Premier Retail LLC sold Redmond
Town Center, a 695,000 square foot community center in Redmond, Washington, for $127,000, resulting
in a gain on the sale of assets of $38,447 to the joint venture. The Company’s share of the gain was
$18,251, which was included in equity in income of unconsolidated joint ventures during the year ended
December 31, 2013. The Company used its share of the proceeds from the sale to pay down its line of
credit and for general corporate purposes.
On September 17, 2013, the Company’s joint venture in Camelback Colonnade, a 619,000 square
foot community center in Phoenix, Arizona, was restructured. As a result of the restructuring, the
Company’s ownership interest in Camelback Colonnade decreased from 73.2% to 67.5%. Prior to the
restructuring, the Company had accounted for its investment in Camelback Colonnade under the equity
method of accounting due to substantive participation rights held by the outside partners. Upon
completion of the restructuring, these substantive participation rights were terminated and the
Company obtained voting control of the joint venture. This transaction is referred to herein as the
‘‘Camelback Colonnade Restructuring.’’ Since the date of the restructuring, the Company included
Camelback Colonnade in its consolidated financial statements (See Note 13—Acquisitions) until its sale
on December 29, 2014 (See Note 14—Dispositions).
On October 8, 2013, the Company’s joint venture in Ridgmar Mall, a 1,273,000 square foot
regional shopping center in Fort Worth, Texas, sold the property for $60,900, resulting in a gain of
$6,243 to the joint venture. The Company’s share of the gain was $3,121, which was included in equity
in income from joint ventures for the year ended December 31, 2013. The cash proceeds from the sale
were used to pay off the $51,657 mortgage loan on the property and the remaining $9,243, net of
closing costs, was distributed to the partners. The Company used its share of the proceeds from the
sale to pay down its line of credit and for general corporate purposes.
On October 24, 2013, the Company acquired the remaining 33.3% ownership interest in
Superstition Springs Center that it did not previously own for $46,162. The purchase price was funded
by a cash payment of $23,662 and the assumption of the third party’s pro rata share of the mortgage
note payable on the property of $22,500. Prior to the acquisition, the Company had accounted for its
94
THE MACERICH COMPANY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Dollars in thousands, except per share amounts)
4. Investments in Unconsolidated Joint Ventures: (Continued)
investment in Superstition Springs Center under the equity method of accounting. Since the date of
acquisition, the Company has included Superstition Springs Center in its consolidated financial
statements (See Note 13—Acquisitions).
On June 4, 2014, the Company acquired the remaining 49% ownership interest in Cascade Mall, a
589,000 square foot regional shopping center in Burlington, Washington, that it did not previously own
for a cash payment of $15,233. The Company purchased Cascade Mall from its joint venture in Pacific
Premier Retail LLC. The cash payment was funded by borrowings under the Company’s line of credit.
Prior to the acquisition, the Company had accounted for its investment in Cascade Mall under the
equity method of accounting. Since the date of acquisition, the Company has included Cascade Mall in
its consolidated financial statements (See Note 13—Acquisitions).
On July 30, 2014, the Company formed a joint venture with Pennsylvania Real Estate Investment
Trust to redevelop Fashion Outlets of Philadelphia, a 1,376,000 square foot regional shopping center in
Philadelphia, Pennsylvania. The Company invested $106,800 for a 50% interest in the joint venture,
which was funded by borrowings under its line of credit.
On August 28, 2014, the Company sold its 30% ownership interest in Wilshire Boulevard, a 40,000
square foot freestanding store in Santa Monica, California, for a total sales price of $17,100, resulting
in a gain on the sale of assets of $9,033, which was included in gain (loss) on sale or write down of
assets, net. The sales price was funded by a cash payment of $15,386 and the assumption of the
Company’s share of the mortgage note payable on the property of $1,714. The Company used the cash
proceeds from the sale to pay down its line of credit and for general corporate purposes.
On November 13, 2014, the Company formed a joint venture to develop Fashion Outlets of San
Francisco, a 500,000 square foot outlet center in San Francisco, California. In connection with the
formation of the joint venture, the Company issued a note receivable for $65,130 to its joint venture
partner that bears interest at LIBOR plus 2.0% and matures upon the completion of certain milestones
in connection with the development of Fashion Outlets of San Francisco (See Note 17—Related Party
Transactions).
On November 14, 2014, the Company acquired the remaining 49% ownership interest that it did
not previously own in two separate joint ventures, Pacific Premier Retail LLC and Queens JV LP,
which together owned five Centers: Lakewood Center, a 2,075,000 square foot regional shopping center
in Lakewood, California; Los Cerritos Center, a 1,292,000 square foot regional shopping center in
Cerritos, California; Queens Center, a 966,000 square foot regional shopping center in Queens, New
York; Stonewood Center, a 932,000 square foot regional shopping center in Downey, California; and
Washington Square, a 1,441,000 square foot regional shopping center in Portland, Oregon (collectively
referred to herein as the ‘‘PPR Queens Portfolio’’). The total consideration of $1,838,886 was funded
by the direct issuance of $1,166,777 of common stock of the Company (See Note 12—Stockholders’
Equity) and the assumption of the third party’s pro rata share of the mortgage notes payable on the
properties of $672,109. Prior to the acquisition, the Company had accounted for its investment in these
joint ventures under the equity method of accounting. Since the date of acquisition, the Company has
included the PPR Queens Portfolio in its consolidated financial statements (See Note 13—
Acquisitions).
95
THE MACERICH COMPANY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Dollars in thousands, except per share amounts)
4. Investments in Unconsolidated Joint Ventures: (Continued)
On November 20, 2014, the Company purchased a 45% interest in 443 North Wabash Avenue, a
65,000 square foot undeveloped site adjacent to the Company’s joint venture in The Shops at North
Bridge in Chicago, Illinois, for a cash payment of $18,900. The cash payment was funded by borrowings
under the Company’s line of credit.
On February 17, 2015, the Company acquired the remaining 50% ownership interest in Inland
Center, an 866,000 square foot regional shopping center in San Bernardino, California, that it did not
previously own for $51,250. The purchase price was funded by a cash payment of $26,250 and the
assumption of the third party’s share of the mortgage note payable on the property of $25,000.
Concurrent with the purchase of the joint venture interest, the Company paid off the $50,000 mortgage
note payable on the property. The cash payment was funded by borrowings under the Company’s line
of credit. Prior to the acquisition, the Company had accounted for its investment in Inland Center
under the equity method of accounting. Since the date of acquisition, the Company has included Inland
Center in its consolidated financial statements (See Note 13—Acquisitions).
On April 30, 2015, the Company entered into a 50/50 joint venture with Sears to own nine
freestanding stores located at Arrowhead Towne Center, Chandler Fashion Center, Danbury Fair Mall,
Deptford Mall, Freehold Raceway Mall, Los Cerritos Center, South Plains Mall, Vintage Faire Mall
and Washington Square. The Company invested $150,000 for a 50% ownership interest in the joint
venture, which was funded by borrowings under the Company’s line of credit.
On October 30, 2015, the Company sold a 40% ownership interest in Pacific Premier Retail LLC
(the ‘‘PPR Portfolio’’), which owns Lakewood Center, a 2,075,000 square foot regional shopping center
in Lakewood, California; Los Cerritos Center, a 1,292,000 square foot regional shopping center in
Cerritos, California; South Plains Mall, a 1,127,000 square foot regional shopping center in Lubbock,
Texas; and Washington Square, a 1,441,000 square foot regional shopping center in Portland, Oregon,
for a total sales price of $1,258,643, resulting in a gain on sale of assets of $311,194. The sales price
was funded by a cash payment of $545,643 and the assumption of a pro rata share of the mortgage
notes payable on the properties of $713,000. The Company used the cash proceeds from the sales to
pay down its line of credit and for general corporate purposes, which included funding the ASR and
Special Dividend (See Note 12—Stockholders’ Equity).
On January 6, 2016, the Company sold a 40% ownership interest in Arrowhead Towne Center, a
1,197,000 square foot regional shopping center in Glendale, Arizona; for $284,000 (See Note 22—
Subsequent Events). The sales price was funded by a cash payment of $124,000 and the assumption of
a pro rata share of the mortgage note payable on the property of $160,000. The Company used the
cash proceeds from the sales to pay down its line of credit and for general corporate purposes, which
included funding the Special Dividend (See Note 12—Stockholders’ Equity).
On January 14, 2016, the Company formed a joint venture, whereby the Company sold a 49%
ownership interest in Deptford Mall, a 1,040,000 square foot regional shopping center in Deptford,
New Jersey; FlatIron Crossing, a 1,430,000 square foot regional shopping center in Broomfield,
Colorado; and Twenty Ninth Street, an 850,000 square foot regional shopping center in Boulder,
Colorado for $750,980. The sales price was funded by a cash payment of $458,110 and the assumption
of a pro rata share of the mortgage note payable on the properties of $292,870. (See Note 22—
Subsequent Events). The Company used the cash proceeds from the sale to pay down its line of credit
and for general corporate purposes.
96
THE MACERICH COMPANY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Dollars in thousands, except per share amounts)
4. Investments in Unconsolidated Joint Ventures: (Continued)
Combined and condensed balance sheets and statements of operations are presented below for all
unconsolidated joint ventures.
Combined and Condensed Balance Sheets of Unconsolidated Joint Ventures as of December 31:
2015
2014
Assets(1):
Properties, net
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$6,334,442
517,053
$2,967,878
208,726
Total assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$6,851,495
$3,176,604
Liabilities and partners’ capital(1):
Mortgage and other notes payable(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Company’s capital . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Outside partners’ capital
$3,614,401
358,156
1,585,796
1,293,142
$2,038,379
195,766
489,349
453,110
Total liabilities and partners’ capital . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$6,851,495
$3,176,604
Investment in unconsolidated joint ventures:
Company’s capital . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Basis adjustment(3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$1,585,796
(77,701)
$ 489,349
464,826
Assets—Investments in unconsolidated joint ventures . . . . . . . . . . . . . . . .
Liabilities—Distributions in excess of investments in unconsolidated joint
$1,508,095
$ 954,175
$1,532,552
$ 984,132
ventures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(24,457)
(29,957)
$1,508,095
$ 954,175
(1) These amounts include the assets of $3,283,702 and liabilities of $1,938,241 of Pacific Premier
Retail LLC as of December 31, 2015.
(2) Certain mortgage notes payable could become recourse debt to the Company should the joint
venture be unable to discharge the obligations of the related debt. As of December 31, 2015 and
2014, a total of $5,000 and $33,540, respectively, could become recourse debt to the Company. As
of December 31, 2015 and 2014, the Company has an indemnity agreement from a joint venture
partner for $2,500 and $16,770, respectively, of the guaranteed amount.
Included in mortgage notes payable are amounts due to affiliates of Northwestern Mutual Life
(‘‘NML’’) of $461,778 and $606,263 as of December 31, 2015 and 2014, respectively. NML is
considered a related party because it is a joint venture partner with the Company in Macerich
Northwestern Associates—Broadway Plaza. Interest expense incurred on these borrowings
amounted to $29,372, $38,113 and $31,549 for the years ended December 31, 2015, 2014 and 2013,
respectively.
(3) The Company amortizes the difference between the cost of its investments in unconsolidated joint
ventures and the book value of the underlying equity into income on a straight-line basis consistent
97
THE MACERICH COMPANY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Dollars in thousands, except per share amounts)
4. Investments in Unconsolidated Joint Ventures: (Continued)
with the lives of the underlying assets. The amortization of this difference was $5,619, $5,109 and
$10,734 for the years ended December 31, 2015, 2014 and 2013, respectively.
Combined and Condensed Statements of Operations of Unconsolidated Joint Ventures:
Pacific
Premier
Retail LLC(1)
Other
Joint
Ventures
Total
Year Ended December 31, 2015
Revenues:
Minimum rents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Percentage rents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Tenant recoveries . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$ 21,172
2,569
8,408
1,182
$293,921
13,188
129,059
33,931
$315,093
15,757
137,467
35,113
Total revenues . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
33,331
470,099
503,430
Expenses:
Shopping center and operating expenses . . . . . . . . . . . . . . . . . .
Interest expense . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Depreciation and amortization . . . . . . . . . . . . . . . . . . . . . . . . .
Total operating expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Gain on sale of assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Loss on early extinguishment of debt . . . . . . . . . . . . . . . . . . . . . .
Net income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Company’s equity in net income . . . . . . . . . . . . . . . . . . . . . . . . . .
6,852
10,448
16,919
34,219
—
—
165,795
78,279
133,707
172,647
88,727
150,626
377,781
412,000
9,850
(3)
9,850
(3)
$
$
(888)
$102,165
$101,277
1,409
$ 43,755
$ 45,164
Year Ended December 31, 2014
Revenues:
Minimum rents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Percentage rents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Tenant recoveries . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$ 88,831
2,652
40,118
4,090
$299,532
14,509
146,623
36,615
$388,363
17,161
186,741
40,705
Total revenues . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
135,691
497,279
632,970
Expenses:
Shopping center and operating expenses . . . . . . . . . . . . . . . . . .
Interest expense . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Depreciation and amortization . . . . . . . . . . . . . . . . . . . . . . . . .
37,113
34,113
29,688
178,299
102,974
114,715
215,412
137,087
144,403
Total operating expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
100,914
395,988
496,902
(Loss) gain on sale of assets
. . . . . . . . . . . . . . . . . . . . . . . . . . . .
(7,044)
10,687
3,643
Net income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$ 27,733
$111,978
$139,711
Company’s equity in net income . . . . . . . . . . . . . . . . . . . . . . . . . .
$
9,743
$ 50,883
$ 60,626
98
THE MACERICH COMPANY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Dollars in thousands, except per share amounts)
4. Investments in Unconsolidated Joint Ventures: (Continued)
Pacific
Premier
Retail LLC(1)
Other Joint
Ventures
Total
Year Ended December 31, 2013
Revenues:
Minimum rents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Percentage rents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Tenant recoveries . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$118,164
4,586
52,470
5,882
$300,560
15,003
151,701
39,745
$418,724
19,589
204,171
45,627
Total revenues . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
181,102
507,009
688,111
Expenses:
Shopping center and operating expenses . . . . . . . . . . . . . . . . . .
Interest expense . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Depreciation and amortization . . . . . . . . . . . . . . . . . . . . . . . . .
Total operating expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Gain on sale of assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Gain on early extinguishment of debt . . . . . . . . . . . . . . . . . . . . .
53,039
43,445
39,616
136,100
182,754
—
176,779
101,877
107,693
229,818
145,322
147,309
386,349
522,449
7,772
14
190,526
14
Net income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$227,756
$128,446
$356,202
Company’s equity in net income . . . . . . . . . . . . . . . . . . . . . . . . .
$110,798
$ 56,782
$167,580
(1) These amounts exclude the results of operations from November 14, 2014 to October 29, 2015, as
Pacific Premier Retail LLC became wholly-owned as a result of the PPR Queens Portfolio
acquisition. Pacific Premier Retail LLC was converted from wholly-owned to an unconsolidated
joint venture effective October 30, 2015, as a result of the PPR Portfolio transaction, as discussed
above.
Significant accounting policies used by the unconsolidated joint ventures are similar to those used
by the Company.
99
THE MACERICH COMPANY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Dollars in thousands, except per share amounts)
5. Property, net:
Property at December 31, 2015 and 2014 consists of the following:
Land . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Buildings and improvements . . . . . . . . . . . . . . . . . . . . .
Tenant improvements . . . . . . . . . . . . . . . . . . . . . . . . . .
Equipment and furnishings . . . . . . . . . . . . . . . . . . . . . .
Construction in progress . . . . . . . . . . . . . . . . . . . . . . . .
$ 1,894,717
7,752,892
637,355
169,841
234,851
$ 2,242,291
9,479,337
600,436
152,554
303,264
2015
2014
Less accumulated depreciation . . . . . . . . . . . . . . . . . . .
10,689,656
(1,892,744)
12,777,882
(1,709,992)
$ 8,796,912
$11,067,890
Depreciation expense for the years ended December 31, 2015, 2014 and 2013 was $354,977,
$289,178 and $269,790, respectively.
The gain on sale or write down of assets, net for the year ended December 31, 2015 includes the
gain of $311,194 on the sale of a 40% ownership interest in the PPR Portfolio (See Note 4—
Investments in Unconsolidated Joint Ventures), $73,726 on the sale of Panorama Mall (See Note 14—
Dispositions), $2,336 on the sale of assets and $1,807 on the sale of land offset in part by a loss of
$10,633 on impairment and $182 on the write-off of development costs. The loss on impairment was
due to the reduction of the estimated holding periods of Flagstaff Mall (See Note 8—Mortgage Notes
Payable) and a freestanding store.
The gain on sale or write down of assets, net for the year ended December 31, 2014 includes the
gain of $144,927 on the sales of Rotterdam Square, Somersville Towne Center, Lake Square Mall,
South Towne Center, Camelback Colonnade and four former Meryvns’ stores (See Note 14—
Dispositions), $9,033 on the sale of Wilshire Boulevard (See Note 4—Investments in Unconsolidated
Joint Ventures) and $1,257 on the sale of assets offset in part by a loss of $41,216 on impairment and
$40,561 on the write-off of development costs. The loss on impairment was due to the reduction in the
estimated holding periods of the long-lived assets of several properties including Great Northern Mall,
Cascade Mall, a property adjacent to Fiesta Mall and three former Mervyn’s stores sold in 2014 (See
Note 14—Dispositions).
The loss on sale or write down of assets, net for the year ended December 31, 2013 includes a loss
of $82,197 on impairment and $1,250 on the write-off of development costs offset in part by a gain of
$5,390 on the sale of assets. The loss on impairment was due to the reduction in the estimated holding
periods of the long-lived assets of Promenade at Casa Grande, Rotterdam Square, Lake Square Mall
and Somersville Towne Center.
6. Tenant and Other Receivables, net:
Included in tenant and other receivables, net is an allowance for doubtful accounts of $3,072 and
$3,234 at December 31, 2015 and 2014, respectively. Also included in tenant and other receivables, net
are accrued percentage rents of $10,940 and $13,436 at December 31, 2015 and 2014, respectively, and
100
THE MACERICH COMPANY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Dollars in thousands, except per share amounts)
6. Tenant and Other Receivables, net: (Continued)
a deferred rent receivable due to straight-line rent adjustments of $60,790 and $57,278 at December 31,
2015 and 2014, respectively.
On March 17, 2014, in connection with the sale of Lake Square Mall (See Note 14—Dispositions),
the Company issued a note receivable for $6,500 that bears interest at an effective rate of 6.5% and
matures on March 17, 2018 (‘‘LSM Note A’’) and a note receivable for $3,103 that bore interest at
5.0% and was to mature on December 31, 2014 (‘‘LSM Note B’’). On September 2, 2014, the balance
of LSM Note B was paid in full. The balance of LSM Note A at December 31, 2015 was $6,351 and is
collateralized by a trust deed on Lake Square Mall.
7. Deferred Charges and Other Assets, net:
Deferred charges and other assets, net at December 31, 2015 and 2014 consist of the following:
Leasing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Financing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Intangible assets:
In-place lease values(1) . . . . . . . . . . . . . . . . . . . . . . . . .
Leasing commissions and legal costs(1) . . . . . . . . . . . . . .
Above-market leases . . . . . . . . . . . . . . . . . . . . . . . . . . .
Deferred tax assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Deferred compensation plan assets . . . . . . . . . . . . . . . . . . .
Other assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Less accumulated amortization(2) . . . . . . . . . . . . . . . . . . .
2015
2014
$ 248,709
45,874
$ 239,955
47,171
196,969
52,000
220,847
38,847
37,341
70,070
298,825
72,432
250,810
35,625
35,194
66,246
910,657
(323,374)
1,046,258
(287,197)
$ 587,283
$ 759,061
(1) The estimated amortization of these intangible assets for the next five years and
thereafter is as follows:
Year Ending December 31,
2016 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2017 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2018 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2019 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2020 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Thereafter . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$ 36,275
23,415
18,002
14,874
11,373
35,577
$139,516
(2) Accumulated amortization includes $109,453 and $103,361 relating to in-place lease
values, leasing commissions and legal costs at December 31, 2015 and 2014, respectively.
101
THE MACERICH COMPANY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Dollars in thousands, except per share amounts)
7. Deferred Charges and Other Assets, net: (Continued)
Amortization expense for in-place lease values, leasing commissions and legal costs was
$69,460, $52,668 and $53,139 for the years ended December 31, 2015, 2014 and 2013,
respectively.
The allocated values of above-market leases and below-market leases consist of the following:
Above-Market Leases
Original allocated value . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Less accumulated amortization . . . . . . . . . . . . . . . . . . . . . . .
Below-Market Leases(1)
Original allocated value . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Less accumulated amortization . . . . . . . . . . . . . . . . . . . . . . .
2015
2014
$ 220,847
(73,520)
$250,810
(59,696)
$ 147,327
$191,114
$ 227,063
(101,872)
$375,033
(93,511)
$ 125,191
$281,522
(1) Below-market leases are included in other accrued liabilities.
The allocated values of above and below-market leases will be amortized into minimum rents on a
straight-line basis over the individual remaining lease terms. The estimated amortization of these values
for the next five years and thereafter is as follows:
Year Ending December 31,
Above
Market
Below
Market
2016 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2017 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2018 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2019 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2020 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Thereafter . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$ 18,360
15,456
13,045
10,708
9,176
80,582
$ 20,309
16,838
15,054
13,380
10,649
48,961
$147,327
$125,191
102
THE MACERICH COMPANY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Dollars in thousands, except per share amounts)
8. Mortgage Notes Payable:
Mortgage notes payable at December 31, 2015 and 2014 consist of the following:
Property Pledged as Collateral
Carrying Amount of Mortgage Notes(1)
2015
2014
Related
Party
Other
Related
Party
Other
Effective Monthly
Interest
Maturity
Debt
Rate(2) Service(3) Date(4)
Arrowhead Towne Center(5) . . . . . . . . . . . . . $
Chandler Fashion Center(6) . . . . . . . . . . . . .
Danbury Fair Mall
. . . . . . . . . . . . . . . . . . .
Deptford Mall(7) . . . . . . . . . . . . . . . . . . . .
Deptford Mall . . . . . . . . . . . . . . . . . . . . . .
Eastland Mall(8)
. . . . . . . . . . . . . . . . . . . .
Fashion Outlets of Chicago(9) . . . . . . . . . . . .
Fashion Outlets of Niagara Falls USA . . . . . .
Flagstaff Mall(10) . . . . . . . . . . . . . . . . . . . .
FlatIron Crossing(7) . . . . . . . . . . . . . . . . . .
Freehold Raceway Mall(6) . . . . . . . . . . . . . .
Great Northern Mall(11) . . . . . . . . . . . . . . .
Green Acres Mall . . . . . . . . . . . . . . . . . . . .
Kings Plaza Shopping Center . . . . . . . . . . . .
Lakewood Center(12) . . . . . . . . . . . . . . . . .
Los Cerritos Center(13) . . . . . . . . . . . . . . . .
Northgate Mall(14) . . . . . . . . . . . . . . . . . . .
Oaks, The . . . . . . . . . . . . . . . . . . . . . . . . .
Pacific View . . . . . . . . . . . . . . . . . . . . . . .
Queens Center . . . . . . . . . . . . . . . . . . . . . .
Santa Monica Place . . . . . . . . . . . . . . . . . .
SanTan Village Regional Center
. . . . . . . . . .
Stonewood Center . . . . . . . . . . . . . . . . . . .
Superstition Springs Center(15) . . . . . . . . . . .
Towne Mall . . . . . . . . . . . . . . . . . . . . . . . .
Tucson La Encantada . . . . . . . . . . . . . . . . .
Valley Mall(16)
. . . . . . . . . . . . . . . . . . . . .
Valley River Center(17) . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . .
Victor Valley, Mall of
. . . . . . . . . . . . . . . .
Vintage Faire Mall(18)
Washington Square(19) . . . . . . . . . . . . . . . .
Westside Pavilion . . . . . . . . . . . . . . . . . . . .
111,248
—
114,265
— $ 228,703
— $ 221,194 $
— 200,000
— 200,000
114,264
111,249
— 197,815
— 193,861
14,285
—
14,001
—
— 168,000
—
—
— 119,329
— 200,000
— 121,376
— 118,615
—
37,000
—
37,000
— 261,494
— 254,733
— 229,244
— 225,094
—
34,494
—
—
— 313,514
— 306,954
— 480,761
— 470,627
— 253,708
—
—
103,274
— 103,274
—
—
—
64,000
64,000
— 210,197
— 205,986
— 133,200
— 130,458
— 600,000
— 600,000
— 230,344
— 225,089
— 133,807
— 130,898
— 111,297
— 105,494
68,079
—
67,763
—
22,607
—
22,200
—
— 71,500
70,070
—
—
—
41,368
— 120,000
—
—
— 115,000
— 115,000
—
— 276,117
— 238,696
—
—
— 149,626
— 146,961
2.76% $1,131
3.77%
625
5.53% 1,538
947
3.76%
101
6.46%
—
—
291
1.84%
727
4.89%
8.97%
153
3.90% 1,393
4.20% 1,132
—
3.61% 1,447
3.67% 2,229
—
—
—
—
3.30%
143
4.14% 1,064
4.08%
668
3.49% 1,744
2.99% 1,004
589
3.14%
640
1.80%
149
2.17%
117
4.48%
368
— 4.23%
—
—
380
— 3.55% 1,255
—
783
—
—
4.00%
—
4.49%
2018
2019
2020
2023
2016
—
2020
2020
2015
2021
2018
—
2021
2019
—
—
2017
2022
2022
2025
2018
2019
2017
2016
2022
2022
—
—
2024
2026
—
2022
$181,318 $4,443,294 $289,039 $5,115,482
(1) The mortgage notes payable balances include the unamortized debt premiums (discounts). Debt premiums
(discounts) represent the excess (deficiency) of the fair value of debt over (under) the principal value of debt
assumed in various acquisitions and are amortized into interest expense over the remaining term of the related debt
in a manner that approximates the effective interest method.
103
THE MACERICH COMPANY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Dollars in thousands, except per share amounts)
8. Mortgage Notes Payable: (Continued)
The debt premiums (discounts) as of December 31, 2015 and 2014 consist of the following:
Property Pledged as Collateral
Arrowhead Towne Center . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Deptford Mall
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Fashion Outlets of Niagara Falls USA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Lakewood Center . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Los Cerritos Center . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Stonewood Center . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Superstition Springs Center . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Valley Mall
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Washington Square . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2015
2014
$ 8,494
$11,568
(3)
(8)
4,486
5,414
3,708
—
— 17,965
7,980
579
(132)
9,847
5,168
263
—
—
$18,408
$56,921
(2) The interest rate disclosed represents the effective interest rate, including the debt premiums (discounts) and
deferred finance costs.
(3) The monthly debt service represents the payment of principal and interest.
(4) The maturity date assumes that all extension options are fully exercised and that the Company does not opt to
refinance the debt prior to these dates. These extension options are at the Company’s discretion, subject to certain
conditions, which the Company believes will be met.
(5) On January 6, 2016, the Company replaced the existing loan on the property with a new $400,000 loan that bears
interest at an effective rate of 4.05% and matures on February 1, 2028. Concurrently, a 40% interest in the loan was
assumed by a third party in connection with the sale of a 40% ownership interest in the underlying property (See
Note 22—Subsequent Events).
(6) A 49.9% interest in the loan has been assumed by a third party in connection with a co-venture arrangement (See
Note 10—Co-Venture Arrangement).
(7) On January 14, 2016, a 49% interest in the loan was assumed by a third party in connection with the sale of a 49%
ownership interest in the MAC Heitman Portfolio (See Note 22—Subsequent Events).
(8) On December 1, 2015, the Company paid off in full the loan on the property.
(9) On March 3, 2015, the Company amended the loan on the property. The amended $200,000 loan bears interest at
LIBOR plus 1.50% and matures on March 31, 2020. At December 31, 2015 and 2014, the total interest rate was
1.84% and 2.97%, respectively.
(10) On November 1, 2015, this non-recourse loan went into maturity default. The Company is negotiating with the loan
servicer, which will likely result in a transition of the property to the loan servicer or a receiver.
(11) On June 30, 2015, the Company conveyed the property to the mortgage lender by a deed-in-lieu of foreclosure,
which resulted in a loss of $1,627 on the extinguishment of debt (See Note 14—Dispositions).
(12) On March 2, 2015, the Company paid off in full the loan on the property, which resulted in a gain of $2,245 on the
early extinguishment of debt as a result of writing off the related debt premium. On May 12, 2015, the Company
placed a new $410,000 loan on the property that bears interest at an effective rate of 3.46% and matures on June 1,
2026. On October 30, 2015, a 40% interest in the loan was assumed by a third party in connection with the sale of a
40% ownership interest in the PPR Portfolio (See Note 4—Investments in Unconsolidated Joint Ventures).
(13) On October 30, 2015, the Company replaced the existing loan on the property with a new $525,000 loan that bears
interest at an effective rate of 4.00% and matures on November 1, 2027, which resulted in a loss of $859 on the
early extinguishment of debt. Concurrently, a 40% interest in the loan was assumed by a third party in connection
104
THE MACERICH COMPANY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Dollars in thousands, except per share amounts)
8. Mortgage Notes Payable: (Continued)
with the sale of a 40% ownership interest in the PPR Portfolio (See Note 4—Investments in Unconsolidated Joint
Ventures).
(14) The loan bears interest at LIBOR plus 2.25% and matures on March 1, 2017. At December 31, 2015 and 2014, the
total interest rate was 3.30% and 3.05%, respectively.
(15) The loan bears interest at LIBOR plus 2.30% and matures on October 28, 2016. At December 31, 2015 and 2014,
the total interest rate was 2.17% and 1.98%, respectively.
(16) On December 1, 2015, the Company paid off in full the loan on the property, which resulted in a loss of $52 on the
early extinguishment of debt.
(17) On July 31, 2015, the Company paid off in full the loan on the property, which resulted in a loss of $9 on the early
extinguishment of debt.
(18) On February 19, 2015, the Company placed a $280,000 loan on the property that bears interest at an effective rate
of 3.55% and matures on March 6, 2026.
(19) On October 5, 2015, the Company paid off in full the existing loan on the property, which resulted in a gain of
$2,367 on the early extinguishment of debt as a result of writing off the related debt premium. On October 29, 2015,
the Company placed a new $550,000 loan on the property that bears interest at an effective rate of 3.65% and
matures on November 1, 2022. On October 30, 2015, a 40% interest in the loan was assumed by a third party in
connection with the sale of a 40% ownership interest in the PPR Portfolio (See Note 4—Investments in
Unconsolidated Joint Ventures).
Most of the mortgage loan agreements contain a prepayment penalty provision for the early
extinguishment of the debt.
Most of the Company’s mortgage notes payable are secured by the properties on which they are
placed and are non-recourse to the Company. As of December 31, 2015 and 2014, a total of $13,500
and $73,165, respectively, of the mortgage notes payable could become recourse to the Company.
The Company expects all loan maturities during the next twelve months, except Flagstaff Mall, will
be refinanced, restructured, extended and/or paid-off from the Company’s line of credit or with cash on
hand. The mortgage note payable on Flagstaff Mall, which went into maturity default on November 1,
2015, is a non-recourse loan. The Company is working with the loan servicer and expects the property
will be transferred to the loan servicer or a receiver.
Total interest expense capitalized during the years ended December 31, 2015, 2014 and 2013 was
$13,052, $12,559 and $10,829, respectively.
Related party mortgage notes payable are amounts due to affiliates of NML. See Note 17—
Related Party Transactions for interest expense associated with loans from NML.
The estimated fair value (Level 2 measurement) of mortgage notes payable at December 31, 2015
and 2014 was $4,628,781 and $5,455,453, respectively, based on current interest rates for comparable
loans. Fair value was determined using a present value model and an interest rate that included a credit
value adjustment based on the estimated value of the property that serves as collateral for the
underlying debt.
105
THE MACERICH COMPANY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Dollars in thousands, except per share amounts)
8. Mortgage Notes Payable: (Continued)
The future maturities of mortgage notes payable are as follows:
Year Ending December 31,
2016 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2017 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2018 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2019 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2020 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Thereafter . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Debt premium, net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$ 155,977
235,501
695,439
809,077
534,886
2,175,324
4,606,204
18,408
$4,624,612
The future maturities reflected above reflect the extension options that the Company believes will
be exercised.
9. Bank and Other Notes Payable:
Bank and other notes payable at December 31, 2015 and 2014 consist of the following:
Line of Credit:
The Company has a $1,500,000 revolving line of credit that bears interest at LIBOR plus a spread
of 1.38% to 2.0%, depending on the Company’s overall leverage levels, and matures on August 6, 2018.
Based on the Company’s leverage level as of December 31, 2015, the borrowing rate on the facility was
LIBOR plus 1.50%. As of December 31, 2015 and 2014, borrowings under the line of credit were
$650,000 and $752,000, respectively, at an average interest rate of 1.95% and 1.89%, respectively. The
estimated fair value (Level 2 measurement) of the line of credit at December 31, 2015 and 2014 was
$640,260 and $713,989, respectively, based on a present value model using a credit interest rate spread
offered to the Company for comparable debt.
Term Loan:
On December 8, 2011, the Company obtained a $125,000 unsecured term loan under the line of
credit that bore interest at LIBOR plus a spread of 1.95% to 3.20%, depending on the Company’s
overall leverage level, and was to mature on December 8, 2018. On October 23, 2015, the Company
paid off in full the term loan, which resulted in a loss of $578 on the early extinguishment of debt. As
of December 31, 2014, the total interest rate was 2.25%. The estimated fair value (Level 2
measurement) of the term loan at December 31, 2014 was $119,780, based on a present value model
using a credit interest rate spread offered to the Company for comparable debt.
Prasada Note:
On March 29, 2013, the Company issued a $13,330 note payable that bears interest at 5.25% and
matures on March 29, 2016. The note payable is collateralized by a portion of a development
106
THE MACERICH COMPANY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Dollars in thousands, except per share amounts)
9. Bank and Other Notes Payable: (Continued)
reimbursement agreement with the City of Surprise, Arizona. At December 31, 2015 and 2014, the note
had a balance of $9,130 and $10,879, respectively. The estimated fair value (Level 2 measurement) of
the note at December 31, 2015 and 2014 was $9,168 and $11,178, respectively, based on current interest
rates for comparable notes. Fair value was determined using a present value model and an interest rate
that included a credit value adjustment based on the estimated value of the collateral for the
underlying debt.
As of December 31, 2015 and 2014, the Company was in compliance with all applicable financial
loan covenants.
The future maturities of bank and other notes payable are as follows:
Year Ending December 31,
2016 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2018 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$ 9,130
650,000
$659,130
10. Co-Venture Arrangement:
On September 30, 2009, the Company formed a joint venture, whereby a third party acquired a
49.9% interest in Freehold Raceway Mall, a 1,669,000 square foot regional shopping center in Freehold,
New Jersey, and Chandler Fashion Center, a 1,319,000 square foot regional shopping center in
Chandler, Arizona. As part of this transaction, the Company issued a warrant in favor of the third
party to purchase 935,358 shares of common stock of the Company at an exercise price of $46.68 per
share (See ‘‘Stock Warrants’’ in Note 12—Stockholders’ Equity). The Company received approximately
$174,650 in cash proceeds for the overall transaction, of which $6,496 was attributed to the warrants.
The Company used the proceeds from this transaction to pay down its line of credit and for general
corporate purposes.
As a result of the Company having certain rights under the agreement to repurchase the assets
after the seventh year of the venture formation, the transaction did not qualify for sale treatment. The
Company, however, is not obligated to repurchase the assets. The transaction has been accounted for
as a profit-sharing arrangement, and accordingly the assets, liabilities and operations of the properties
remain on the books of the Company and a co-venture obligation was established for the amount of
$168,154, representing the net cash proceeds received from the third party less costs allocated to the
warrant. The co-venture obligation is increased for the allocation of income to the co-venture partner
and decreased for distributions to the co-venture partner. The co-venture obligation was $63,756 and
$75,450 at December 31, 2015 and 2014, respectively.
11. Noncontrolling Interests:
The Company allocates net income of the Operating Partnership based on the weighted-average
ownership interest during the period. The net income of the Operating Partnership that is not
attributable to the Company is reflected in the consolidated statements of operations as noncontrolling
interests. The Company adjusts the noncontrolling interests in the Operating Partnership periodically to
107
THE MACERICH COMPANY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Dollars in thousands, except per share amounts)
11. Noncontrolling Interests: (Continued)
reflect its ownership interest in the Company. The Company had a 93% and 94% ownership interest in
the Operating Partnership as of December 31, 2015 and 2014, respectively. The remaining 7% and 6%
limited partnership interest as of December 31, 2015 and 2014, respectively, was owned by certain of
the Company’s executive officers and directors, certain of their affiliates, and other third party investors
in the form of OP Units. The OP Units may be redeemed for shares of registered or unregistered stock
or cash, at the Company’s option. The redemption value for each OP Unit as of any balance sheet date
is the amount equal to the average of the closing price per share of the Company’s common stock, par
value $0.01 per share, as reported on the New York Stock Exchange for the ten trading days ending on
the respective balance sheet date. Accordingly, as of December 31, 2015 and 2014, the aggregate
redemption value of the then-outstanding OP Units not owned by the Company was $870,625 and
$877,184, respectively.
The Company issued common and cumulative preferred units of MACWH, LP in April 2005 in
connection with the acquisition of the Wilmorite portfolio. The common and preferred units of
MACWH, LP are redeemable at the election of the holder, the Company may redeem them for cash or
shares of the Company’s stock at the Company’s option, and they are classified as permanent equity.
Included in permanent equity are outside ownership interests in various consolidated joint
ventures. The joint ventures do not have rights that require the Company to redeem the ownership
interests in either cash or stock.
12. Stockholders’ Equity:
Stock Buyback Program:
On September 30, 2015, the Company’s Board of Directors authorized the repurchase of up to
$1,200,000 of the Company’s outstanding common shares over the period ending September 30, 2017,
as market conditions warrant. Repurchases may be made through open market purchases, privately
negotiated transactions, structured or derivative transactions, including accelerated stock repurchase
transactions, or other methods of acquiring shares and pursuant to Rule 10b5-1 of the Securities
Exchange Act of 1934, from time to time as permitted by securities laws and other legal requirements.
On November 12, 2015, the Company entered into an accelerated share repurchase program
(‘‘ASR’’) to repurchase $400,000 of the Company’s common stock. In accordance with the ASR, the
Company made a prepayment of $400,000 and received an initial share delivery of 4,140,788 shares. On
January 20, 2016, the ASR was completed and the Company received an additional delivery of 970,609
shares. The average price of the 5,111,397 shares repurchased under the ASR was $78.26 per share.
The ASR was funded from proceeds in connection with the financing and sale of the ownership interest
in the PPR Portfolio (See Note 4—Investments in Unconsolidated Joint Ventures and Note 22—
Subsequent Events).
Special Dividends:
On October 30, 2015, the Company declared two special dividends/distributions (‘‘Special
Dividend’’), each of $2.00 per share of common stock and per OP Unit. The first Special Dividend was
paid on December 8, 2015 to stockholders and OP Unit holders of record on November 12, 2015. The
second Special Dividend was paid on January 6, 2016 to common stockholders and OP Unit holders of
108
THE MACERICH COMPANY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Dollars in thousands, except per share amounts)
12. Stockholders’ Equity: (Continued)
record on November 12, 2015. The Special Dividends were funded from proceeds in connection with
the financing and sale of ownership interests in the PPR Portfolio and Arrowhead Towne Center (See
Note 4—Investments in Unconsolidated Joint Ventures and Note 22—Subsequent Events).
At-The-Market Stock Offering Program (‘‘ATM Program’’):
On August 17, 2012, the Company entered into an equity distribution agreement (‘‘2012
Distribution Agreement’’) with a number of sales agents (the ‘‘2012 ATM Program’’) to issue and sell,
from time to time, shares of common stock, par value $0.01 per share, having an aggregate offering
price of up to $500,000 (the ‘‘2012 ATM Shares’’). Sales of the 2012 ATM Shares, could have been
made in privately negotiated transactions and/or any other method permitted by law, including sales
deemed to be an ‘‘at the market’’ offering, which includes sales made directly on the New York Stock
Exchange or sales made to or through a market maker other than on an exchange. The Company
agreed to pay each sales agent a commission that was not to exceed, but could have been lower than,
2% of the gross proceeds of the 2012 ATM Shares sold through such sales agent under the 2012
Distribution Agreement.
During the year ended December 31, 2012, the Company sold 2,961,903 shares of common stock
under the 2012 ATM Program in exchange for aggregate gross proceeds of $177,896 and net proceeds
of $175,649 after commissions and other transaction costs. During the year ended December 31, 2013,
the Company sold 2,456,956 shares of common stock under the 2012 ATM Program in exchange for
aggregate gross proceeds of $173,011 and net proceeds of $171,102 after commissions and other
transaction costs. The proceeds from the sales were used to pay down the Company’s line of credit.
On August 20, 2014, the Company terminated and replaced the 2012 ATM Program with a new
ATM Program (the ‘‘2014 ATM Program’’) to sell, from time to time, shares of common stock, par
value $0.01 per share, having an aggregate offering price of up to $500,000 (the ‘‘ATM Shares’’). The
terms of the 2014 ATM Program are substantially the same as the 2012 ATM Program. The Company
did not sell any shares under the 2014 ATM Program during the year ended December 31, 2015.
As of December 31, 2015, $500,000 of the ATM Shares were available to be sold under the 2014
ATM Program. The unsold 2012 ATM Shares are no longer available for issuance. Actual future sales
of the ATM Shares under the 2014 ATM Program will depend upon a variety of factors including but
not limited to market conditions, the trading price of the Company’s common stock and the Company’s
capital needs. The Company has no obligation to sell the ATM Shares under the 2014 ATM Program.
Stock Issued to Acquire Property:
On November 14, 2014, the Company issued 17,140,845 shares of common stock in connection
with the acquisition of the PPR Queens Portfolio (See Note 13—Acquisitions) for a value of
$1,166,777, based on the closing price of the Company’s common stock on the date of the transaction.
109
THE MACERICH COMPANY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Dollars in thousands, except per share amounts)
13. Acquisitions:
Green Acres Mall:
On January 24, 2013, the Company acquired Green Acres Mall, a 1,799,000 square foot regional
shopping center in Valley Stream, New York, for a purchase price of $500,000. A purchase deposit of
$30,000 was funded during the year ended December 31, 2012, and the remaining $470,000 was funded
upon closing of the acquisition. The cash payment made at the time of closing was provided by the
placement of a mortgage note payable on the property that allowed for borrowings of up to $325,000
and from borrowings under the Company’s line of credit. Concurrent with the acquisition, the
Company borrowed $100,000 on the loan. On January 31, 2013, the Company exercised its option to
borrow the remaining $225,000 on the loan. The acquisition was completed to acquire another
prominent shopping center in the New York metropolitan area.
The following is a summary of the allocation of the fair value of Green Acres Mall:
Property . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Deferred charges . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$477,673
45,130
19,125
Total assets acquired . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
541,928
Other accrued liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total liabilities assumed . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
41,928
41,928
Fair value of acquired net assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$500,000
The Company determined that the purchase price represented the fair value of the assets acquired
and liabilities assumed.
Since the date of acquisition, the Company has included Green Acres Mall in its consolidated
financial statements.
Green Acres Adjacent:
On April 25, 2013, the Company acquired a 19 acre parcel of land adjacent to Green Acres Mall
for $22,577. The payment was provided by borrowings from the Company’s line of credit. The
acquisition was completed to allow for future expansion of Green Acres Mall.
Camelback Colonnade Restructuring:
On September 17, 2013, the Company’s joint venture in Camelback Colonnade was restructured.
As a result of the restructuring, the Company’s ownership interest in Camelback Colonnade decreased
from 73.2% to 67.5%. Prior to the restructuring, the Company had accounted for its investment in
Camelback Colonnade under the equity method of accounting due to substantive participation rights
held by the outside partners. Upon completion of the restructuring, these substantive participation
rights were terminated and the Company obtained voting control of the joint venture (See Note 4—
Investments in Unconsolidated Joint Ventures).
110
THE MACERICH COMPANY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Dollars in thousands, except per share amounts)
13. Acquisitions: (Continued)
The following is a summary of the allocation of the fair value of Camelback Colonnade:
Property . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Deferred charges . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Cash and cash equivalents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Restricted cash . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Tenant receivables . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$ 98,160
8,284
1,280
1,139
615
380
Total assets acquired . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
109,858
Mortgage note payable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Accounts payable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other accrued liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total liabilities assumed . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
49,465
54
4,752
54,271
Fair value of acquired net assets (at 100% ownership) . . . . . . . . . . . . .
$ 55,587
The Company recognized the following remeasurement gain on the Camelback Colonnade
Restructuring:
Fair value of existing ownership interest (at 73.2% ownership) . . . . . . . . . .
Carrying value of investment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$41,690
(5,349)
Gain on remeasurement of assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$36,341
Since the date of the restructuring, the Company included Camelback Colonnade in its
consolidated financial statements until its sale on December 29, 2014 (See Note 14—Dispositions).
Superstition Springs Center:
On October 24, 2013, the Company acquired the remaining 33.3% ownership interest in
Superstition Springs Center that it did not previously own for $46,162. The purchase price was funded
by a cash payment of $23,662 and the assumption of the third party’s share of the mortgage note
payable on the property of $22,500. Prior to the acquisition, the Company had accounted for its
investment under the equity method of accounting (See Note 4—Investments in Unconsolidated Joint
Ventures). As a result of this transaction, the Company obtained 100% ownership of Superstition
Springs Center. The acquisition was completed in order to gain 100% ownership and control over this
asset.
111
THE MACERICH COMPANY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Dollars in thousands, except per share amounts)
13. Acquisitions: (Continued)
The following is a summary of the allocation of the fair value of Superstition Springs Center:
Property . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Deferred charges . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Cash and cash equivalents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Tenant receivables . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$114,373
12,353
8,894
51
11,535
Total assets acquired . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
147,206
Mortgage note payable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Accounts payable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other accrued liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total liabilities assumed . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
68,448
119
7,637
76,204
Fair value of acquired net assets (at 100% ownership) . . . . . . . . . . . . .
$ 71,002
The Company determined that the purchase price represented the fair value of the additional
ownership interest in Superstition Springs Center that was acquired.
Fair value of existing ownership interest (at 66.7% ownership) . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Carrying value of investment
$ 47,340
(32,476)
Gain on remeasurement of assets . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$ 14,864
The following is the reconciliation of the purchase price to the fair value of the acquired net
assets:
Purchase price . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Less debt assumed . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Carrying value of investment
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Remeasurement gain . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$ 46,162
(22,500)
32,476
14,864
Fair value of acquired net assets (at 100% ownership) . . . . . . . . . . . . .
$ 71,002
Since the date of acquisition, the Company has included Superstition Springs Center in its
consolidated financial statements.
Cascade Mall:
On June 4, 2014, the Company acquired the remaining 49% ownership interest in Cascade Mall
that it did not previously own for $15,233. Prior to the acquisition, the Company had accounted for its
investment under the equity method of accounting (See Note 4—Investments in Unconsolidated Joint
Ventures). As a result of this transaction, the Company obtained 100% ownership of Cascade Mall.
The acquisition was completed in order to obtain 100% ownership and control over this asset.
112
THE MACERICH COMPANY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Dollars in thousands, except per share amounts)
13. Acquisitions: (Continued)
The following is a summary of the allocation of the fair value of Cascade Mall:
Property . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Deferred charges . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$28,924
6,660
202
Total assets acquired . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
35,786
Other accrued liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total liabilities assumed . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
4,786
4,786
Fair value of acquired net assets (at 100% ownership) . . . . . . . . . . . . . .
$31,000
The Company determined that the purchase price represented the fair value of the additional
ownership interest in Cascade Mall that was acquired.
The following is the reconciliation of the purchase price to the fair value of the acquired net
assets:
Purchase price . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . . . .
Distributions in excess of investment
$15,233
15,767
Fair value of acquired net assets (at 100% ownership) . . . . . . . . . . . . . .
$31,000
Since the date of acquisition, the Company has included Cascade Mall in its consolidated financial
statements.
Fashion Outlets of Chicago:
On October 31, 2014, the Company purchased AWE/Talisman’s ownership interest in its
consolidated joint venture in Fashion Outlets of Chicago, for $69,987. The purchase price was funded
by a cash payment of $55,867 and the settlement of the balance on the Talisman Notes of $14,120 (See
Note 17—Related Party Transactions). The cash payment was funded by borrowings under the
Company’s line of credit. The purchase agreement includes contingent consideration based on the
financial performance of Fashion Outlets of Chicago at an agreed upon date in 2016. The Company
estimated the fair value of the contingent consideration as of December 31, 2015 to be $10,953, which
has been included in other accrued liabilities. As a result of this acquisition, the noncontrolling interest
of $76,141 was reversed.
PPR Queens Portfolio:
On November 14, 2014, the Company acquired the remaining 49% ownership interest in the PPR
Queens Portfolio that it did not previously own for $1,838,886. The acquisition was completed in order
to gain 100% ownership and control over this portfolio of prominent shopping centers. The purchase
price was funded by the assumption of the third party’s pro rata share of the mortgage notes payable
on the property of $672,109 and the issuance of $1,166,777 in common stock of the Company. Prior to
the acquisition, the Company had accounted for its investment under the equity method of accounting
113
THE MACERICH COMPANY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Dollars in thousands, except per share amounts)
13. Acquisitions: (Continued)
(See Note 4—Investments in Unconsolidated Joint Ventures). As a result of this transaction, the
Company obtained 100% ownership of the PPR Queens Portfolio.
The following is a summary of the allocation of the fair value of the PPR Queens Portfolio:
Property . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Deferred charges . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Cash and cash equivalents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Restricted cash . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Tenant receivables . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$3,711,819
155,892
28,890
5,113
5,438
127,244
Total assets acquired . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
4,034,396
Mortgage notes payable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Accounts payable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Due to affiliates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other accrued liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
1,414,659
5,669
2,680
230,210
Total liabilities assumed . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
1,653,218
Fair value of acquired net assets (at 100% ownership) . . . . . . . . . . . .
$2,381,178
The Company determined that the purchase price represented the fair value of the additional
ownership interest in the PPR Queens Portfolio that was acquired.
Fair value of existing ownership interest (at 51% ownership) . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . .
Distributions in excess of investment
$1,214,401
208,735
Gain on remeasurement of assets . . . . . . . . . . . . . . . . . . . . . . . . . . .
$1,423,136
The following is the reconciliation of the purchase price to the fair value of the acquired net
assets:
Purchase price . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Less debt assumed . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Distributions in excess of investment
. . . . . . . . . . . . . . . . . . . . . . . . . .
Gain on remeasurement of assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$1,838,886
(672,109)
(208,735)
1,423,136
Fair value of acquired net assets (at 100% ownership) . . . . . . . . . . . .
$2,381,178
The Company included Lakewood Center, Los Cerritos Center and Washington Square in its
consolidated financial statements until the Company sold a 40% ownership interest in the PPR
Portfolio on October 30, 2015 (See Note 4—Investments in Unconsolidated Joint Ventures). The
remaining properties of the PPR Queens Portfolio have been included in the Company’s consolidated
financial statements from the date of acquisition.
114
THE MACERICH COMPANY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Dollars in thousands, except per share amounts)
13. Acquisitions: (Continued)
Inland Center:
On February 17, 2015, the Company acquired the remaining 50% ownership interest in Inland
Center that it did not previously own for $51,250. The purchase price was funded by a cash payment of
$26,250 and the assumption of the third party’s share of the mortgage note payable on the property of
$25,000. Prior to the acquisition, the Company had accounted for its investment in Inland Center under
the equity method of accounting (See Note 4—Investments in Unconsolidated Joint Ventures). As a
result of this transaction, the Company obtained 100% ownership of Inland Center. The acquisition was
completed in order to obtain 100% ownership and control over this asset.
The following is a summary of the allocation of the fair value of Inland Center:
Property . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Deferred charges . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$ 91,871
9,752
5,782
Total assets acquired . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
107,405
Mortgage note payable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other accrued liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total liabilities assumed . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
50,000
4,905
54,905
Fair value of acquired net assets (at 100% ownership) . . . . . . . . . . . . .
$ 52,500
The Company determined that the purchase price represented the fair value of the additional
ownership interest in Inland Center that was acquired.
Fair value of existing ownership interest (at 50% ownership) . . . . . . . . . . .
Carrying value of investment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$26,250
(4,161)
Gain on remeasurement of assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$22,089
The following is the reconciliation of the purchase price to the fair value of the acquired net
assets:
Purchase price . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Less debt assumed . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Carrying value of investment
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Gain on remeasurement of assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$ 51,250
(25,000)
4,161
22,089
Fair value of acquired net assets (at 100% ownership) . . . . . . . . . . . . .
$ 52,500
Since the date of acquisition, the Company has included Inland Center in its consolidated financial
statements. The property has generated incremental revenue of $12,829 and incremental net income of
$1,892 during the year ended December 31, 2015.
115
THE MACERICH COMPANY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Dollars in thousands, except per share amounts)
13. Acquisitions: (Continued)
Pro Forma Results of Operations:
The following unaudited pro forma total revenue and income from continuing operations for 2015
and 2014:
Total
revenue
Income from
continuing
operations
Supplemental pro forma for the year ended December 31, 2015(1) . . . . . . . .
Supplemental pro forma for the year ended December 31, 2014(1) . . . . . . . .
$1,287,084
$1,371,988
$502,184
$199,287
(1) This unaudited pro forma supplemental information does not purport to be indicative of what the
Company’s operating results would have been had the 2015 and 2014 acquisitions occurred on
January 1, 2014 and may not be indicative of future operating results. The Company has excluded
remeasurement gains and acquisition costs from these pro forma results as they are considered
significant non-recurring adjustments directly attributable to the acquisitions.
14. Dispositions:
On May 31, 2013, the Company sold Green Tree Mall, a 793,000 square foot regional shopping
center in Clarksville, Indiana, for $79,000, resulting in a gain on the sale of assets of $59,767. The
Company used the proceeds from the sale to pay down its line of credit and for general corporate
purposes.
On June 4, 2013, the Company sold Northridge Mall, an 890,000 square foot regional shopping
center in Salinas, California, and Rimrock Mall, a 603,000 square foot regional shopping center in
Billings, Montana. The properties were sold in a combined transaction for $230,000, resulting in a gain
on the sale of assets of $82,151. The Company used the cash proceeds from the sale to pay down its
line of credit and for general corporate purposes.
On September 11, 2013, the Company sold a former Mervyn’s store in Milpitas, California for
$12,000, resulting in a loss on the sale of assets of $2,633. The Company used the proceeds from the
sale to pay down its line of credit and for general corporate purposes.
On September 30, 2013, the Company conveyed Fiesta Mall, a 933,000 square foot regional
shopping center in Mesa, Arizona, to the mortgage note lender by a deed-in-lieu of foreclosure. The
mortgage loan was non-recourse. As a result of the conveyance, the Company recognized a gain on the
extinguishment of debt of $1,252.
On October 15, 2013, the Company sold a former Mervyn’s store in Midland, Texas for $5,700,
resulting in a loss on the sale of assets of $2,031. The Company used the proceeds from the sale to pay
down its line of credit and for general corporate purposes.
On October 23, 2013, the Company sold a former Mervyn’s store in Grand Junction, Colorado for
$5,430, resulting in a gain on the sale of assets of $1,695. The Company used the proceeds from the
sale to pay down its line of credit and for general corporate purposes.
116
THE MACERICH COMPANY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Dollars in thousands, except per share amounts)
14. Dispositions: (Continued)
On December 4, 2013, the Company sold a former Mervyn’s store in Livermore, California for
$10,475, resulting in a loss on the sale of assets of $5,257. The Company used the proceeds from the
sale to pay down its line of credit and for general corporate purposes.
On December 11, 2013, the Company sold Chesterfield Towne Center, a 1,016,000 square foot
regional shopping center in Richmond, Virginia, and Centre at Salisbury, an 862,000 square foot
regional shopping center in Salisbury, Maryland in a combined transaction for $292,500, resulting in a
gain on the sale of assets of $151,467. The sales price was funded by a cash payment of $67,763, the
assumption of the $109,737 mortgage note payable on Chesterfield Towne Center and the assumption
of the $115,000 mortgage note payable on Centre at Salisbury. The Company used the cash proceeds
from the sale to pay down its line of credit and for general corporate purposes.
The Company has classified the results of operations and gain or loss on sale for all of the above
dispositions as discontinued operations for the year ended December 31, 2013. Revenues and income
from discontinued operations were $54,752 and $289,936, respectively, for the year ended December 31,
2013. On January 1, 2014, the Company adopted ASU 2014-08, which amended the definition of
discontinued operations and the disclosure for the disposal transactions. The Company determined that
none of the disposals during the years ended December 31, 2015 and 2014 represented discontinued
operations. As a result, the following dispositions during the year ended December 31, 2015 and 2014
have been included in continuing operations:
On January 15, 2014, the Company sold Rotterdam Square, a 585,000 square foot regional
shopping center in Schenectady, New York, for $8,500, resulting in a loss on the sale of assets of $472.
The Company used the proceeds from the sale to pay down its line of credit and for general corporate
purposes.
On February 14, 2014, the Company sold Somersville Towne Center, a 348,000 square foot regional
shopping center in Antioch, California, for $12,337, resulting in a loss on the sale of assets of $263. The
Company used the proceeds from the sale to pay down its line of credit and for general corporate
purposes.
On March 17, 2014, the Company sold Lake Square Mall, a 559,000 square foot regional shopping
center in Leesburg, Florida, for $13,280, resulting in a loss on the sale of assets of $876. The sales price
was funded by a cash payment of $3,677 and the issuance of two notes receivable totaling $9,603 (See
Note 6—Tenant and Other Receivables, net). The Company used the cash proceeds from the sale to
pay down its line of credit and for general corporate purposes.
On July 7, 2014, the Company sold a former Mervyn’s store in El Paso, Texas for $3,560, resulting
in a loss on the sale of assets of $158. The Company used the proceeds from the sale to pay down its
line of credit and for general corporate purposes.
On August 28, 2014, the Company sold a former Mervyn’s store in Thousand Oaks, California for
$3,500, resulting in a loss on the sale of assets of $80. The Company used the proceeds from the sale
to pay down its line of credit and for general corporate purposes.
On September 11, 2014, the Company sold a leasehold interest in a former Mervyn’s store in
Laredo, Texas for $1,200, resulting in a gain on the sale of assets of $315. The Company used the
proceeds from the sale to pay down its line of credit and for general corporate purposes.
117
THE MACERICH COMPANY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Dollars in thousands, except per share amounts)
14. Dispositions: (Continued)
On October 10, 2014, the Company sold a former Mervyn’s store in Marysville, California for
$1,900, resulting in a loss on the sale of assets of $3. The Company used the proceeds from the sale to
pay down its line of credit and for general corporate purposes.
On October 31, 2014, the Company sold South Towne Center, a 1,278,000 square foot regional
shopping center in Sandy, Utah, for $205,000, resulting in a gain on the sale of assets of $121,873. The
Company used the proceeds from the sale to pay down its line of credit and for general corporate
purposes.
On December 29, 2014, the Company sold its 67.5% ownership interest in its consolidated joint
venture in Camelback Colonnade, a 619,000 square foot community center in Phoenix, Arizona, for
$92,898, resulting in a gain on the sale of assets of $24,554. The sales price was funded by a cash
payment of $61,173 and the assumption of the Company’s share of the mortgage note payable on the
property of $31,725. The Company used the cash proceeds from the sale to pay down its line of credit
and for general corporate purposes. As a result of the sale, the Company was discharged of the $47,946
mortgage note payable on the property and $17,217 of noncontrolling interest was reversed.
On June 30, 2015, the Company conveyed Great Northern Mall, an 895,000 square foot regional
shopping center in Clay, New York, to the mortgage lender by a deed-in-lieu of foreclosure and was
discharged from the mortgage note payable. The loan was nonrecourse to the Company. As a result,
the Company recognized a loss on the extinguishment of debt of $1,627 (See Note 8—Mortgage Notes
Payable).
On November 19, 2015, the Company sold Panorama Mall, a 312,000 square foot community
center in Panorama City, California, for $98,000, resulting in a gain on the sale of assets of $73,726.
The Company used the proceeds from the sale to pay down its line of credit and for general corporate
purposes.
15. Future Rental Revenues:
Under existing non-cancelable operating lease agreements, tenants are committed to pay the
following minimum rental payments to the Company:
Year Ending December 31,
2016 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2017 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2018 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2019 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2020 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Thereafter . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$ 496,683
423,057
369,999
319,535
275,105
969,731
$2,854,110
16. Commitments and Contingencies:
The Company has certain properties subject to non-cancelable operating ground leases. The leases
expire at various times through 2098, subject in some cases to options to extend the terms of the lease.
118
THE MACERICH COMPANY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Dollars in thousands, except per share amounts)
16. Commitments and Contingencies: (Continued)
Certain leases provide for contingent rent payments based on a percentage of base rental income, as
defined in the lease. Ground lease rent expenses were $11,870, $10,968 and $10,579 for the years ended
December 31, 2015, 2014 and 2013, respectively. No contingent rent was incurred for the years ended
December 31, 2015, 2014 or 2013.
Minimum future rental payments required under the leases are as follows:
Year Ending December 31,
2016 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2017 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2018 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2019 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2020 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Thereafter . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$ 15,695
15,632
11,249
9,629
9,637
283,154
$344,996
As of December 31, 2015, the Company was contingently liable for $62,788 in letters of credit
guaranteeing performance by the Company of certain obligations relating to the Centers. The Company
does not believe that these letters of credit will result in a liability to the Company.
The Company has entered into a number of construction agreements related to its redevelopment
and development activities. Obligations under these agreements are contingent upon the completion of
the services within the guidelines specified in the relevant agreement. At December 31, 2015, the
Company had $32,006 in outstanding obligations, which it believes will be settled in the next twelve
months.
17. Related Party Transactions:
Certain unconsolidated joint ventures have engaged the Management Companies to manage the
operations of the Centers. Under these arrangements, the Management Companies are reimbursed for
compensation paid to on-site employees, leasing agents and project managers at the Centers, as well as
insurance costs and other administrative expenses. The following are fees charged to unconsolidated
joint ventures for the years ended December 31:
Management fees . . . . . . . . . . . . . . . . . . . . . . . . . . .
Development and leasing fees . . . . . . . . . . . . . . . . . .
$10,064
9,615
$16,751
10,528
$19,726
9,936
2015
2014
2013
$19,679
$27,279
$29,662
Certain mortgage notes on the properties are held by NML (See Note 8—Mortgage Notes
Payable). Interest expense in connection with these notes was $10,515, $15,134 and $15,016 for the
years ended December 31, 2015, 2014 and 2013, respectively. Included in accounts payable and accrued
expenses is interest payable to this related party of $756 and $1,125 at December 31, 2015 and 2014,
respectively.
119
THE MACERICH COMPANY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Dollars in thousands, except per share amounts)
17. Related Party Transactions: (Continued)
During the years ended December 31, 2014 and 2013, the Company had loans to unconsolidated
joint ventures to fund development stage projects prior to construction loan funding. Correspondingly,
loan payables in the same amount have been accrued as an obligation by the various joint ventures.
Interest income associated with these notes was $164 and $281 for the years ended December 31, 2014
and 2013, respectively.
Due from affiliates includes $7,467 and $3,869 of unreimbursed costs and fees due from
unconsolidated joint ventures under management agreements at December 31, 2015 and 2014,
respectively.
Due from affiliates at December 31, 2013 also included two notes receivable from principals of
AWE/Talisman (‘‘Talisman Notes’’) that bore interest at 5.0% and were to mature based on the
refinancing or sale of Fashion Outlets of Chicago, a 537,000 square foot outlet center in Rosemont,
Illinois, or certain other specified events. AWE/Talisman was considered a related party because it had
a 40% noncontrolling ownership interest in Fashion Outlets of Chicago. On October 31, 2014, in
connection with the Company’s acquisition of AWE/Talisman’s ownership interest in Fashion Outlets of
Chicago, the balance of the Talisman Notes were settled (See Note 13—Acquisitions). Interest income
earned on these notes was $516 and $625 for the years ended December 31, 2014 and 2013,
respectively.
In addition, due from affiliates at December 31, 2015 and 2014 includes a note receivable from
RED/303 LLC (‘‘RED’’) that bears interest at 5.25% and matures on March 29, 2016. Interest income
earned on this note was $520, $614 and $525 for the years ended December 31, 2015, 2014 and 2013,
respectively. The balance on this note receivable was $9,252 and $11,027 at December 31, 2015 and
2014, respectively. RED is considered a related party because it is a partner in a joint venture
development project. The note is collateralized by RED’s membership interest in a development
agreement.
Also included in due from affiliates is a note receivable from Lennar Corporation that bears
interest at LIBOR plus 2% and matures upon the completion of certain milestones in connection with
the development of Fashion Outlets of San Francisco (See Note 4—Investments in Unconsolidated
Joint Ventures). Interest income earned on this note was $1,872 and $206 for the years ended
December 31, 2015 and 2014, respectively. The balance on this note was $67,209 and $65,336 at
December 31, 2015 and 2014, respectively. Lennar Corporation is considered a related party because it
has an ownership interest in Fashion Outlets of San Francisco.
18. Share and Unit-based Plans:
The Company has established share and unit-based compensation plans for the purpose of
attracting and retaining executive officers, directors and key employees.
2003 Equity Incentive Plan:
The 2003 Equity Incentive Plan (‘‘2003 Plan’’) authorizes the grant of stock awards, stock options,
stock appreciation rights, stock units, stock bonuses, performance-based awards, dividend equivalent
rights and OP Units or other convertible or exchangeable units. As of December 31, 2015, stock
awards, stock units, LTIP Units (as defined below), stock appreciation rights (‘‘SARs’’) and stock
120
THE MACERICH COMPANY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Dollars in thousands, except per share amounts)
18. Share and Unit-based Plans: (Continued)
options have been granted under the 2003 Plan. All stock options or other rights to acquire common
stock granted under the 2003 Plan have a term of 10 years or less. These awards were generally
granted based on the performance of the Company and the employees. None of the awards have
performance requirements other than a service condition of continued employment unless otherwise
provided. All awards are subject to restrictions determined by the Company’s compensation committee.
The aggregate number of shares of common stock that may be issued under the 2003 Plan is 13,825,428
shares. As of December 31, 2015, there were 2,285,318 shares available for issuance under the 2003
Plan.
Stock Awards:
The value of the stock awards was determined by the market price of the Company’s common
stock on the date of the grant. The following table summarizes the activity of non-vested stock awards
during the years ended December 31, 2015, 2014 and 2013:
Balance at beginning of year . . . . . . . . .
Granted . . . . . . . . . . . . . . . . . . . . . .
Vested . . . . . . . . . . . . . . . . . . . . . . .
Shares
9,189
—
(7,577)
Balance at end of year . . . . . . . . . . . . .
1,612
Stock Units:
2015
2014
2013
Weighted
Average
Grant Date
Fair Value
$59.25
—
58.67
$62.01
Weighted
Average
Grant Date
Fair Value
$56.77
—
54.45
$59.25
Shares
19,001
—
(9,812)
9,189
Weighted
Average
Grant Date
Fair Value
$49.36
61.84
46.70
$56.77
Shares
20,924
8,963
(10,886)
19,001
The stock units represent the right to receive upon vesting one share of the Company’s common
stock for one stock unit. The value of the stock units was determined by the market price of the
Company’s common stock on the date of the grant. The following table summarizes the activity of
non-vested stock units during the years ended December 31, 2015, 2014 and 2013:
2015
2014
2013
Balance at beginning of year . . . . . . .
Granted . . . . . . . . . . . . . . . . . . . .
Vested . . . . . . . . . . . . . . . . . . . . .
Forfeited . . . . . . . . . . . . . . . . . . .
Units
144,374
77,282
(86,761)
(2,809)
Balance at end of year . . . . . . . . . . .
132,086
Weighted
Average
Grant Date
Fair Value
$59.94
86.53
61.29
86.72
$74.58
Weighted
Average
Grant Date
Fair Value
$57.24
60.50
55.14
—
$59.94
Weighted
Average
Grant Date
Fair Value
$52.19
62.01
51.59
—
$57.24
Units
114,677
67,920
(45,279)
—
137,318
Units
137,318
75,309
(68,253)
—
144,374
121
THE MACERICH COMPANY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Dollars in thousands, except per share amounts)
18. Share and Unit-based Plans: (Continued)
SARs:
The executives have up to 10 years from the grant date to exercise the SARs. Upon exercise, the
executives will receive unrestricted common shares for the appreciation in value of the SARs from the
grant date to the exercise date.
The Company determined the value of each SAR awarded during the year ended December 31,
2012 to be $9.67 using the Black-Scholes Option Pricing Model based upon the following assumptions:
volatility of 25.85%, dividend yield of 3.69%, risk free rate of 1.20%, current value of $59.57 and an
expected term of 8 years. The value of each of the other outstanding SARs was determined at the
grant date to be $7.68 based upon the following assumptions: volatility of 22.52%, dividend yield of
5.23%, risk free rate of 3.15%, current value of $61.17 and an expected term of 8 years. The
assumptions for volatility and dividend yield were based on the Company’s historical experience as a
publicly traded company, the current value was based on the closing price on the date of grant and the
risk free rate was based upon the interest rate of the 10-year Treasury bond on the date of grant.
In connection with the payment of the Special Dividend of $2.00 per share of common stock on
December 8, 2015 (See Note 12—Stockholders’ Equity), the compensation committee approved an
adjustment to all outstanding SARs. The exercise price and number of outstanding SARs were adjusted
such that each SAR had the same fair value to the holder before and after giving effect to the payment
of the special dividend. As a result, the 407,823 outstanding SARs with a weighted-average price of
$56.49 were adjusted to 417,783 outstanding SARs with a weighted average price of $55.13.
The following table summarizes the activity of SARs awards during the years ended December 31,
2015, 2014 and 2013:
Balance at beginning of year . . . . . . . .
Granted . . . . . . . . . . . . . . . . . . . . .
Exercised . . . . . . . . . . . . . . . . . . . .
Special dividend adjustment . . . . . . .
2015
2014
2013
Weighted
Average
Exercise
Price
$56.67
—
56.86
55.13
Units
772,639
—
(364,807)
9,951
Weighted
Average
Exercise
Price
$56.66
—
56.63
—
Units
1,070,991
—
(298,352)
—
Weighted
Average
Exercise
Price
$56.66
—
56.63
—
Units
1,164,185
—
(93,194)
—
Balance at end of year . . . . . . . . . . . .
417,783
$55.13
772,639
$56.67
1,070,991
$56.66
Long-Term Incentive Plan Units:
Under the Long-Term Incentive Plan (‘‘LTIP’’), each award recipient is issued a form of operating
partnership units (‘‘LTIP Units’’) in the Operating Partnership. Upon the occurrence of specified events
and subject to the satisfaction of applicable vesting conditions, LTIP Units (after conversion into OP
Units) are ultimately redeemable for common stock of the Company, or cash at the Company’s option,
on a one-unit for one-share basis. LTIP Units receive cash dividends based on the dividend amount
paid on the common stock of the Company. The LTIP may include both market-indexed awards and
service-based awards.
122
THE MACERICH COMPANY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Dollars in thousands, except per share amounts)
18. Share and Unit-based Plans: (Continued)
The market-indexed LTIP Units vest over the service period of the award based on the percentile
ranking of the Company in terms of total return to stockholders (the ‘‘Total Return’’) per common
stock share relative to the Total Return of a group of peer REITs, as measured at the end of the
measurement period.
The fair value of the market-indexed LTIP Units are estimated on the date of grant using a Monte
Carlo Simulation model. The stock price of the Company, along with the stock prices of the group of
peer REITs (for market-indexed awards), is assumed to follow the Multivariate Geometric Brownian
Motion Process. Multivariate Geometric Brownian Motion is a common assumption when modeling in
financial markets, as it allows the modeled quantity (in this case, the stock price) to vary randomly
from its current value and take any value greater than zero. The volatilities of the returns on the share
price of the Company and the peer group REITs were estimated based on a look-back period. The
expected growth rate of the stock prices over the ‘‘derived service period’’ is determined with
consideration of the risk free rate as of the grant date.
On February 15, 2013, the Company granted 332,189 market-indexed LTIP Units (‘‘2013 LTIP
Units’’) at a grant date fair value of $66.58 per LTIP Unit that vested over a service period ending
December 31, 2013. On January 16, 2014, the compensation committee determined that the 2013 LTIP
Units had vested at the 96% level, based on the Company’s percentile ranking in terms of Total Return
per common stock share compared to the Total Return of a group of peer REITs during the period of
January 1, 2013 to December 31, 2013. As a result, 318,900 LTIP Units vested and 13,289 LTIP Units
were forfeited as of December 31, 2013.
On January 1, 2014, the Company granted 70,042 LTIP Units with a grant date fair value of $58.89
that will vest in equal annual installments over a service period ending December 31, 2016.
Concurrently, the Company granted 272,930 market-indexed LTIP Units (‘‘2014 LTIP Units’’) at a grant
date fair value of $45.34 per LTIP Unit that vested over a service period ending December 31, 2014.
The 2014 LTIP Units were equally divided between two types of awards. The terms of both types of
awards were the same, except one award had an additional 3% absolute Total Return requirement,
which if it was not met, then such LTIP Units would not have vested. On January 12, 2015, the
compensation committee determined that the 2014 LTIP Units had vested at a 150% level, based on
the Company’s percentile ranking in terms of Total Return per common stock share compared to the
Total Return of a group of peer REITs during the period of January 1, 2014 to December 31, 2014. In
addition, the compensation committee determined that the applicable 3% absolute Total Return
requirement was exceeded. As a result, an additional 136,465 fully-vested LTIP Units were granted on
December 31, 2014.
On March 7, 2014, the Company granted 246,471 LTIP Units at a fair value of $60.25 per LTIP
Unit that were fully vested on the grant date.
On January 1, 2015, the Company granted 49,451 LTIP Units with a grant date fair value of $83.41
per LTIP Unit that will vest in equal annual installments over a service period ending December 31,
2017. Concurrently, the Company granted 186,450 market-indexed LTIP Units (‘‘2015 LTIP Units’’) at a
grant date fair value of $66.37 per LTIP Unit that vested over a service period ending December 31,
2015. The 2015 LTIP Units were equally divided between two types of awards. The terms of both types
of awards were the same, except one award has an additional 3% absolute total stockholder return
123
THE MACERICH COMPANY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Dollars in thousands, except per share amounts)
18. Share and Unit-based Plans: (Continued)
requirement, which if it is not met, then such LTIP Units will not vest. The grant date fair value of the
2015 LTIP Units assumed a risk free interest rate of 0.25% and an expected volatility of 16.81%. On
January 7, 2016, the compensation committee determined that the 2015 LTIP Units had vested at a
130% level, based on the Company’s percentile ranking in terms of Total Return per common stock
share compared to the Total Return of a group of peer REITs during the period of January 1, 2015 to
December 31, 2015. In addition, the compensation committee determined that the applicable 3%
absolute Total Return requirement was exceeded. As a result, an additional 55,934 fully-vested LTIP
Units were granted on December 31, 2015.
On March 6, 2015, the Company granted 132,607 LTIP Units at a fair value of $86.72 per LTIP
Unit that were fully vested on the grant date.
The following table summarizes the activity of the non-vested LTIP Units during the years ended
December 31, 2015, 2014 and 2013:
2015
2014
2013
Balance at beginning of year . . . . .
Granted . . . . . . . . . . . . . . . . . .
Vested . . . . . . . . . . . . . . . . . . .
Forfeited . . . . . . . . . . . . . . . . .
Units
46,695
424,442
(414,822)
—
Balance at end of year . . . . . . . . .
56,315
Stock Options:
Weighted
Average
Grant Date
Fair Value
$58.89
74.71
73.13
—
$73.24
Weighted
Average
Grant Date
Fair Value
Units
— $ —
51.71
51.22
—
725,908
(679,213)
—
Weighted
Average
Grant Date
Fair Value
$38.63
66.58
55.81
66.58
Units
200,000
332,189
(518,900)
(13,289)
46,695
$58.89
— $ —
The Company measured the value of each option awarded during the year ended December 31,
2012 to be $9.67 using the Black-Scholes Option Pricing Model based upon the following assumptions:
volatility of 25.85%, dividend yield of 3.69%, risk free rate of 1.20%, current value of $59.57 and an
expected term of 8 years. The assumptions for volatility and dividend yield were based on the
Company’s historical experience as a publicly traded company, the current value was based on the
closing price on the date of grant and the risk free rate was based upon the interest rate of the 10-year
Treasury bond on the date of grant.
In connection with the payment of the Special Dividend of $2.00 per share of common stock on
December 8, 2015 (See Note 12—Stockholders’ Equity), the compensation committee approved an
adjustment to all outstanding stock options. The exercise price and number of outstanding stock
options were adjusted such that each stock option had the same fair value to the holder before and
after giving effect to the payment of the special dividend. As a result, the 10,068 outstanding stock
options with a weighted-average price of $59.57 were adjusted to 10,314 outstanding stock options with
a weighted average price of $58.15.
124
THE MACERICH COMPANY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Dollars in thousands, except per share amounts)
18. Share and Unit-based Plans: (Continued)
The following table summarizes the activity of stock options for the years ended December 31,
2015, 2014 and 2013:
Balance at beginning of year . . . . . . . . . . . . .
Granted . . . . . . . . . . . . . . . . . . . . . . . . . .
Exercised . . . . . . . . . . . . . . . . . . . . . . . . .
Special dividend adjustment . . . . . . . . . . . .
2015
2014
2013
Weighted
Average
Exercise
Price
$59.57
—
—
58.15
Weighted
Average
Exercise
Price
Options
12,768
$59.57
—
—
— (2,700)
—
—
Weighted
Average
Exercise
Price
$54.69
—
36.51
—
Options
10,068
—
—
—
Options
10,068
—
—
246
Balance at end of year . . . . . . . . . . . . . . . . . .
10,314
$58.15
10,068
$59.57
10,068
$59.57
Directors’ Phantom Stock Plan:
The Directors’ Phantom Stock Plan offers non-employee members of the board of directors
(‘‘Directors’’) the opportunity to defer their cash compensation and to receive that compensation in
common stock rather than in cash after termination of service or a predetermined period.
Compensation generally includes the annual retainers payable by the Company to the Directors.
Deferred amounts are generally credited as units of phantom stock at the beginning of each three-year
deferral period by dividing the present value of the deferred compensation by the average fair market
value of the Company’s common stock at the date of award. Compensation expense related to the
phantom stock awards was determined by the amortization of the value of the stock units on a
straight-line basis over the applicable service period. The stock units (including dividend equivalents)
vest as the Directors’ services (to which the fees relate) are rendered. Vested phantom stock units are
ultimately paid out in common stock on a one-unit for one-share basis. To the extent elected by a
Director, stock units receive dividend equivalents in the form of additional stock units based on the
dividend amount paid on the common stock. The aggregate number of phantom stock units that may
be granted under the Directors’ Phantom Stock Plan is 500,000. As of December 31, 2015, there were
199,603 stock units available for grant under the Directors’ Phantom Stock Plan.
The following table summarizes the activity of the non-vested phantom stock units for the years
ended December 31, 2015, 2014 and 2013:
2015
2014
2013
Balance at beginning of year . . . . . . .
Granted . . . . . . . . . . . . . . . . . . . . .
Vested . . . . . . . . . . . . . . . . . . . . . .
Forfeited . . . . . . . . . . . . . . . . . . . .
Weighted
Average
Grant Date
Fair Value
$58.35
78.72
72.17
55.62
Stock
Units
9,269
13,351
(20,162)
(2,458)
Stock
Units
17,575
10,747
(19,053)
—
Balance at end of year . . . . . . . . . . . .
— $ —
9,269
Weighted
Average
Grant Date
Fair Value
Stock
Units
Weighted
Average
Grant Date
Fair Value
$58.66
65.54
62.69
—
$58.35
— $ —
59.04
59.44
—
34,266
(16,691)
—
17,575
$58.66
125
THE MACERICH COMPANY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Dollars in thousands, except per share amounts)
18. Share and Unit-based Plans: (Continued)
Employee Stock Purchase Plan (‘‘ESPP’’):
The ESPP authorizes eligible employees to purchase the Company’s common stock through
voluntary payroll deductions made during periodic offering periods. Under the ESPP common stock is
purchased at a 15% discount from the lesser of the fair value of common stock at the beginning and
end of the offering period. A maximum of 750,000 shares of common stock is available for purchase
under the ESPP. The number of shares available for future purchase under the plan at December 31,
2015 was 517,285.
Compensation:
The following summarizes the compensation cost under the share and unit-based plans for the
years ended December 31, 2015, 2014 and 2013:
Stock awards . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Stock units . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
LTIP units . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Stock options . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Phantom stock units . . . . . . . . . . . . . . . . . . . . . . . . .
$
252
6,041
26,622
16
1,444
$
365
4,689
28,598
16
1,205
$
497
3,839
22,778
16
992
2015
2014
2013
$34,375
$34,873
$28,122
The Company capitalized share and unit-based compensation costs of $6,008, $5,410 and $3,915 for
the years ended December 31, 2015, 2014 and 2013, respectively.
The fair value of the stock awards and stock units that vested during the years ended
December 31, 2015, 2014 and 2013 was $8,794, $4,685 and $3,516, respectively. Unrecognized
compensation costs of share and unit-based plans at December 31, 2015 consisted of $4,128 from LTIP
Units, $20 from stock awards, $3,488 from stock units and $27 from stock options.
19. Employee Benefit Plans:
401(k) Plan:
The Company has a defined contribution retirement plan that covers its eligible employees (the
‘‘Plan’’). The Plan is a defined contribution retirement plan covering eligible employees of the
Macerich Property Management Company LLC and participating affiliates. The Plan is qualified in
accordance with section 401(a) of the Code. Effective January 1, 1995, the Plan was amended to
constitute a qualified cash or deferred arrangement under section 401(k) of the Code, whereby
employees can elect to defer compensation subject to Internal Revenue Service withholding rules. This
Plan was further amended effective as of February 1, 1999 to add The Macerich Company Common
Stock Fund as a new investment alternative under the Plan. A total of 150,000 shares of common stock
were reserved for issuance under the Plan, which was subsequently increased by an additional 500,000
shares in February 2013. On January 1, 2004, the Plan adopted the ‘‘Safe Harbor’’ provision under
Sections 401(k)(12) and 401(m)(11) of the Code. In accordance with adopting these provisions, the
Company makes matching contributions equal to 100 percent of the first three percent of compensation
126
THE MACERICH COMPANY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Dollars in thousands, except per share amounts)
19. Employee Benefit Plans: (Continued)
deferred by a participant and 50 percent of the next two percent of compensation deferred by a
participant. During the years ended December 31, 2015, 2014 and 2013, these matching contributions
made by the Company were $3,299, $3,253 and $3,017, respectively. Contributions and matching
contributions to the Plan by the plan sponsor and/or participating affiliates are recognized as an
expense of the Company in the period that they are made.
Deferred Compensation Plans:
The Company has established deferred compensation plans under which key executives of the
Company may elect to defer receiving a portion of their cash compensation otherwise payable in one
calendar year until a later year. The Company may, as determined by the Board of Directors in its sole
discretion prior to the beginning of the plan year, credit a participant’s account with a matching
amount equal to a percentage of the participant’s deferral. The Company contributed $933, $845 and
$843 to the plans during the years ended December 31, 2015, 2014 and 2013, respectively.
Contributions are recognized as compensation in the periods they are made.
20. Income Taxes:
For income tax purposes, distributions paid to common stockholders consist of ordinary income,
capital gains, unrecaptured Section 1250 gain and return of capital or a combination thereof. The
following table details the components of the distributions, on a per share basis, for the years ended
December 31, 2015, 2014 and 2013 are as follows:
Ordinary income . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Capital gains . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Unrecaptured Section 1250 gain . . . . . . . . . . . . . . . . . .
Return of capital . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$1.20
3.64
—
—
24.8% $1.92
75.2% 0.16
—% 0.05
—% 0.38
76.5% $1.02
6.4% 1.24
2.0% 0.10
15.1% —
43.3%
52.5%
4.2%
—%
Dividends paid . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$4.84
100.0% $2.51
100.0% $2.36
100.0%
2015(1)
2014
2013
(1) During the year ended December 31, 2015, the Company paid cash dividends of $4.63 per
common share. In addition, the Company declared a $2.00 special cash dividend to shareholders of
record as of November 12, 2015 which was paid on January 6, 2016 (See Note 12—Stockholders’
Equity). Pursuant to relevant U.S. tax rules, $0.21 per common share of this dividend is treated as
having been paid by the Company on December 31, 2015, and received by each shareholder of
record as of November 12, 2015 on December 31, 2015.
The Company has made Taxable REIT Subsidiary elections for all of its corporate subsidiaries
other than its Qualified REIT Subsidiaries. The elections, effective for the year beginning January 1,
2001 and future years, were made pursuant to Section 856(l) of the Code.
127
THE MACERICH COMPANY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Dollars in thousands, except per share amounts)
20. Income Taxes: (Continued)
The income tax benefit of the TRSs for the years ended December 31, 2015, 2014 and 2013 are as
follows:
Current . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Deferred . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$ — $ — $ (142)
1,834
4,269
3,223
Income tax benefit . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$3,223
$4,269
$1,692
2015
2014
2013
Income tax benefit of the TRSs for the years ended December 31, 2015, 2014 and 2013 are
reconciled to the amount computed by applying the Federal Corporate tax rate as follows:
2015
2014
2013
Book loss for TRSs . . . . . . . . . . . . . . . . . . . . . . . . . .
$10,681
$10,785
$11,709
Tax at statutory rate on earnings from continuing
operations before income taxes . . . . . . . . . . . . . . . .
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$ 3,632
(409)
$ 3,667
602
$ 3,981
(2,289)
Income tax benefit . . . . . . . . . . . . . . . . . . . . . . . . . . .
$ 3,223
$ 4,269
$ 1,692
The net operating loss carryforwards are currently scheduled to expire through 2035, beginning in
2024. Net deferred tax assets of $38,847 and $35,625 were included in deferred charges and other
assets, net at December 31, 2015 and 2014, respectively.
The tax effects of temporary differences and carryforwards of the TRSs included in the net
deferred tax assets at December 31, 2015 and 2014 are summarized as follows:
Net operating loss carryforwards . . . . . . . . . . . . . . . . . . . . . . . .
Property, primarily differences in depreciation and amortization,
the tax basis of land assets and treatment of certain other
costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2015
2014
$25,340
$24,698
10,600
2,907
8,201
2,726
Net deferred tax assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$38,847
$35,625
For the years ended December 31, 2015, 2014 and 2013 there were no unrecognized tax benefits.
The tax years 2011 through 2015 remain open to examination by the taxing jurisdictions to which
the Company is subject. The Company does not expect that the total amount of unrecognized tax
benefit will materially change within the next 12 months.
128
THE MACERICH COMPANY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Dollars in thousands, except per share amounts)
21. Quarterly Financial Data (Unaudited):
The following is a summary of quarterly results of operations for the years ended December 31,
2015 and 2014:
Revenues
Net income attributable to the
. . . . . . . . . . . . . . . . . . . .
2015 Quarter Ended
2014 Quarter Ended
Dec 31
Sep 30
Jun 30 Mar 31
Dec 31
Sep 30
Jun 30 Mar 31
$320,758
$326,262
$322,794
$318,335
$ 322,909
$263,491
$254,336
$264,511
Company(1) . . . . . . . . . . . . . . . . .
$414,959
$ 33,597
$ 14,395
$ 24,611
$1,429,221
$ 35,914
$ 16,088
$ 17,819
Net income attributable to common
stockholders per share-basic . . . . . . .
Net income attributable to common
stockholders per share-diluted . . . . . .
$
$
2.65
2.65
$
$
0.21
0.21
$
$
0.09
0.09
$
$
0.15
0.15
$
$
9.52
9.51
$
$
0.25
0.25
$
$
0.11
0.11
$
$
0.13
0.13
(1) Net income attributable to the Company for the quarter ended December 31, 2015 includes the gain on sale of assets of
$311,194 from the sale of the PPR Portfolio transaction (See Note 4—Investments in Unconsolidated Joint Ventures) and
$73,726 from the sale of Panorama Mall (See Note 14—Dispositions). Net income attributable to the Company for the
quarter ended December 31, 2014 includes the gain on remeasurement of assets of $1,423,136 from the acquisition of the
PPR Queens Portfolio (See Note 13—Acquisitions).
22. Subsequent Events:
On January 4, 2016, the Company announced that it had reached an agreement with Taubman
Centers, Inc. to form a 50/50 joint venture, to acquire Country Club Plaza, a 1,300,000 square foot
regional shopping center in Kansas City, Missouri for a total purchase price of $660,000. The Company
anticipates that it will fund its pro rata share of $330,000 with borrowings under its line of credit. The
Company expects the purchase of Country Club Plaza, which is subject to usual and customary closing
conditions, will be completed in the first quarter of 2016.
On January 6, 2016, the Company replaced the existing loan on Arrowhead Towne Center with a
new $400,000 loan that bears interest at 4.05% and matures on February 1, 2028. Concurrent with the
refinancing, the Company sold a 40% ownership interest in Arrowhead Towne Center for $284,000. The
sales price was funded by a cash payment of $124,000 and the assumption of a pro rata share of the
mortgage note payable on the property of $160,000. The Company used the cash proceeds from the
sale to pay down its line of credit and for general corporate purposes, which included funding the
Special Dividend (See Note 12—Stockholders’ Equity).
On January 14, 2016, the Company placed a $150,000 loan on Twenty Ninth Street that bears
interest at an effective rate of 4.10% and matures on February 6, 2026. The Company used the cash
proceeds from the sales to pay down its line of credit and for general corporate purposes.
On January 14, 2016, the Company formed a joint venture, whereby the Company sold a 49%
ownership interest in Deptford Mall, a 1,040,000 square foot regional shopping center in Deptford,
New Jersey; FlatIron Crossing, a 1,430,000 square foot regional shopping center in Broomfield,
Colorado; and Twenty Ninth Street, an 850,000 square foot regional shopping center in Boulder,
Colorado (the ‘‘MAC Heitman Portfolio’’), for $750,980. The sales price was funded by a cash payment
of $458,110 and the assumption of a pro rata share of the mortgage note payable on the properties of
$292,870. The Company used the cash proceeds from the sale to pay down its line of credit and for
general corporate purposes.
129
THE MACERICH COMPANY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Dollars in thousands, except per share amounts)
22. Subsequent Events: (Continued)
On January 20, 2016, the Company completed its ASR program and took delivery of an additional
970,609 shares. Upon the Completion of the ASR, the Company had repurchased a total of 5,111,397
shares with an average price of $78.26 (See Note 12—Stockholders’ Equity).
On January 29, 2016, the Company announced a dividend/distribution of $0.68 per share for
common stockholders and OP Unit holders of record on February 19, 2016. All dividends/distributions
will be paid 100% in cash on March 4, 2016.
On February 17, 2016, the Company entered into an ASR to repurchase $400,000 of the
Company’s common stock. In accordance with the ASR, the Company made a prepayment of $400,000
and received an initial share delivery of 4,222,193 shares. The Company expects to complete the ASR
on or before April 22, 2016. The ASR was funded from borrowings under the Company’s line of credit,
which had been recently paid down from the proceeds from the recently completed financings and sale
of ownership interests (See Note 4—Investments in Unconsolidated Joint Ventures).
130
Y
N
A
P
M
O
C
H
C
I
R
E
C
A
M
E
H
T
n
o
i
t
a
i
c
e
r
p
e
D
d
e
t
a
l
u
m
u
c
c
A
d
n
a
e
t
a
t
s
E
l
a
e
R
—
I
I
I
e
l
u
d
e
h
c
S
5
1
0
2
,
1
3
r
e
b
m
e
c
e
D
)
s
d
n
a
s
u
o
h
t
n
i
s
r
a
l
l
o
D
(
t
s
o
C
l
a
t
o
T
f
o
t
e
N
d
e
t
a
l
u
m
u
c
c
A
n
o
i
t
a
i
c
e
r
p
e
D
d
e
t
a
l
u
m
u
c
c
A
n
o
i
t
a
i
c
e
r
p
e
D
l
a
t
o
T
n
o
i
t
c
u
r
t
s
n
o
C
s
s
e
r
g
o
r
P
n
i
t
n
e
m
p
i
u
q
E
d
n
a
s
g
n
i
h
s
i
n
r
u
F
d
n
a
g
n
i
d
l
i
u
B
s
t
n
e
m
e
v
o
r
p
m
I
t
s
o
C
d
e
z
i
l
a
t
i
p
a
C
t
n
e
u
q
e
s
b
u
S
o
t
t
n
e
m
p
i
u
q
E
d
n
a
d
o
i
r
e
P
f
o
e
s
o
l
C
t
a
d
e
i
r
r
a
C
h
c
i
h
W
t
a
t
n
u
o
m
A
s
s
o
r
G
y
n
a
p
m
o
C
o
t
t
s
o
C
l
a
i
t
i
n
I
d
n
a
L
n
o
i
t
i
s
i
u
q
c
A
s
g
n
i
h
s
i
n
r
u
F
d
n
a
g
n
i
d
l
i
u
B
s
t
n
e
m
e
v
o
r
p
m
I
d
n
a
L
s
e
i
t
i
t
n
E
/
s
r
e
t
n
e
C
g
n
i
p
p
o
h
S
6
6
3
,
0
3
2
6
8
,
9
5
6
9
6
,
7
2
4
4
9
,
2
7
1
2
8
8
,
9
2
4
2
2
0
,
4
3
2
6
2
0
,
3
4
6
1
8
,
1
6
1
7
0
0
,
6
7
8
4
3
,
9
2
2
9
1
2
,
2
3
9
9
1
,
4
3
5
3
4
,
7
9
2
7
2
6
,
5
2
4
8
7
6
,
8
7
4
8
1
3
,
3
8
1
0
5
,
2
3
5
9
8
1
,
1
9
6
3
9
,
9
1
7
9
9
5
,
2
4
1
0
5
,
5
2
8
5
0
,
5
3
1
1
9
,
0
8
6
3
3
,
0
8
9
9
3
,
7
8
8
8
8
,
2
8
2
6
9
9
,
9
2
1
6
7
1
,
4
0
0
1
,
4
3
5
1
,
4
6
—
9
6
7
2
4
8
,
2
3
6
4
3
,
0
9
0
0
3
,
7
1
1
3
0
9
,
6
3
1
0
,
0
6
5
7
5
,
8
1
—
1
2
1
,
4
2
6
6
6
,
7
3
3
8
2
,
8
1
3
3
6
,
8
1
5
7
7
,
7
3
8
4
6
,
8
4
1
5
6
3
,
5
5
2
7
2
,
8
3
0
2
5
,
3
6
8
2
,
3
5
9
2
6
,
1
2
9
8
4
,
6
4
0
0
7
,
7
9
9
6
,
6
6
3
8
9
,
0
1
4
4
0
,
9
5
9
6
1
,
3
6
2
3
6
,
3
1
1
7
1
3
3
9
2
,
2
8
4
0
,
5
3
6
6
3
,
0
3
4
0
7
,
2
9
5
6
4
,
8
2
0
9
2
,
3
6
2
2
8
1
,
7
4
5
5
3
0
,
4
9
2
9
2
9
,
9
4
1
9
3
,
0
8
1
7
0
0
,
6
7
9
6
4
,
3
5
2
2
0
5
,
0
5
2
3
8
,
2
5
1
0
1
,
5
3
3
2
0
4
,
3
6
4
6
2
3
,
7
2
6
3
8
6
,
8
3
1
3
7
7
,
0
7
5
9
0
7
,
4
9
2
2
2
,
3
7
7
8
2
2
,
4
6
0
9
9
,
1
7
8
5
7
,
2
4
9
1
3
,
1
9
0
1
6
,
7
4
1
0
2
5
,
6
9
3
3
4
4
,
6
4
1
5
6
1
,
3
9
1
3
9
4
,
4
3
9
3
,
6
1
0
2
,
9
9
7
1
3
9
2
—
—
3
7
8
—
2
7
3
2
5
7
2
0
6
,
6
6
4
8
2
,
1
—
—
—
2
9
1
1
6
1
7
9
9
,
1
8
8
1
,
2
5
9
4
7
,
0
1
5
2
2
4
8
0
,
4
6
4
7
,
3
5
8
5
1
2
6
6
,
3
8
3
9
4
6
—
—
—
—
2
0
1
0
2
2
,
1
5
4
2
,
5
4
0
1
,
6
4
8
5
,
2
3
5
0
,
1
—
4
7
8
8
0
3
,
2
2
8
3
6
9
5
0
,
2
7
4
2
,
1
8
1
4
,
4
3
2
7
,
1
3
5
9
,
5
6
1
9
5
3
5
1
4
,
3
2
4
9
2
,
8
5
—
8
5
4
7
2
1
3
,
4
5
6
,
2
6
7
4
,
2
7
1
3
,
2
—
9
0
5
4
7
—
4
6
6
,
9
9
9
7
,
0
7
7
5
8
,
3
3
2
4
5
2
,
8
9
3
4
1
4
,
0
3
2
4
9
7
,
9
3
9
7
0
,
7
5
1
—
4
3
8
,
9
0
2
2
8
9
,
4
4
0
3
8
,
2
5
5
9
7
,
8
0
3
2
1
1
,
2
5
3
0
1
8
,
4
5
4
3
3
8
,
8
1
1
2
9
9
,
5
5
3
6
1
4
,
4
8
9
8
0
,
2
3
5
5
3
0
,
8
4
6
3
,
6
4
5
5
4
,
7
2
1
6
9
,
2
8
4
8
9
,
0
3
1
7
7
6
,
4
3
3
5
7
0
,
6
3
1
8
7
2
,
4
5
1
3
2
6
4
8
5
,
3
1
4
5
,
0
9
0
8
8
,
1
1
4
$
0
3
7
,
2
3
$
0
1
6
,
4
4
4
$
0
7
3
,
6
1
$
2
0
5
,
2
$
2
8
1
,
0
9
3
$
6
5
5
,
5
3
9
4
3
,
0
3
2
9
3
,
0
2
9
9
6
,
8
1
8
8
1
,
4
2
2
8
0
,
9
9
2
0
,
1
6
6
6
0
,
2
2
5
0
4
,
9
5
7
5
,
0
4
1
5
7
,
2
4
1
—
2
8
8
,
4
3
6
9
,
2
2
1
5
8
,
9
0
1
8
9
0
,
8
6
1
6
6
9
,
7
1
0
4
6
,
6
5
1
0
8
2
,
8
9
6
9
,
6
0
2
7
7
5
,
1
0
8
2
,
7
1
7
5
5
,
1
1
4
1
4
,
3
1
5
8
8
,
7
7
2
5
,
5
5
4
5
8
,
7
1
2
9
,
5
3
0
7
8
,
3
0
0
3
,
2
6
8
5
,
8
$
)
9
5
4
(
6
6
7
,
9
1
6
2
,
1
2
8
8
0
,
3
1
9
5
9
,
5
1
4
6
8
,
9
9
5
1
4
,
1
5
5
2
2
,
3
6
3
7
,
6
7
5
4
,
5
6
9
6
4
,
3
5
2
1
8
3
,
6
0
1
9
4
2
,
3
1
2
3
8
,
2
5
1
1
0
,
0
2
9
9
4
,
9
9
3
2
5
,
8
4
9
9
0
,
3
9
8
3
8
,
2
3
3
6
,
8
5
4
1
6
,
4
2
3
4
7
,
6
3
7
8
9
,
6
1
2
1
9
,
8
4
0
5
,
3
0
1
4
6
0
,
7
4
2
0
5
0
,
9
2
1
)
6
7
8
,
6
(
4
0
6
,
2
4
3
5
4
,
3
2
1
1
,
4
8
$
—
—
—
—
—
—
—
2
1
—
—
—
—
—
—
—
—
—
—
—
—
1
4
8
—
0
0
0
,
0
2
2
6
5
,
6
2
—
—
—
—
—
—
—
$
2
6
6
,
6
8
3
$
—
1
7
6
,
9
1
2
2
,
9
5
3
4
1
,
3
2
2
1
5
9
,
6
1
3
0
5
2
,
4
9
1
5
4
2
,
7
3
5
0
6
,
1
5
1
—
—
—
3
7
7
,
1
3
9
3
1
,
0
1
2
0
4
5
,
3
3
3
1
4
8
,
2
6
3
4
9
1
,
2
7
4
3
0
,
1
2
3
0
5
5
,
3
8
8
4
5
,
5
8
4
5
8
6
,
8
2
9
4
,
1
2
1
7
7
,
5
2
5
6
8
,
4
3
1
6
6
,
4
7
6
9
6
,
8
6
5
1
,
7
1
1
6
9
9
,
5
2
1
—
9
8
4
,
2
0
9
7
,
1
7
8
6
,
6
3
0
0
6
,
0
2
5
9
3
,
0
2
3
5
2
,
9
1
8
8
1
,
4
2
—
7
4
4
,
9
0
7
3
,
8
4
0
5
0
,
2
2
0
5
5
,
0
1
7
6
3
,
0
3
1
—
0
8
4
,
5
1
8
5
,
8
1
1
5
8
,
9
0
1
6
8
9
,
4
6
1
6
6
9
,
7
1
0
4
6
,
6
5
1
1
2
3
,
8
2
2
1
,
8
1
1
4
0
,
9
0
2
—
—
0
0
4
,
8
6
4
7
,
7
7
9
6
,
8
0
0
3
,
2
3
5
6
5
,
4
2
0
8
8
,
8
0
5
1
,
1
9
8
0
,
5
1
$
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
m
r
i
f
g
n
i
t
n
u
o
c
c
a
c
i
l
b
u
p
d
e
r
e
t
s
i
g
e
r
t
n
e
d
n
e
p
e
d
n
i
f
o
t
r
o
p
e
r
g
n
i
y
n
a
p
m
o
c
c
a
e
e
S
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
A
S
U
l
l
a
M
f
f
a
t
s
g
a
l
F
f
f
a
t
s
g
a
l
F
t
a
e
c
a
l
p
t
e
k
r
a
M
e
h
T
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
g
n
i
s
s
o
r
C
n
o
r
I
t
a
l
F
l
l
a
M
y
a
w
e
c
a
R
d
o
h
e
e
r
F
l
.
.
.
.
.
.
r
i
a
F
n
o
i
h
s
a
F
o
n
s
e
r
F
.
.
l
l
a
M
s
e
r
c
A
n
e
e
r
G
.
.
.
r
e
t
n
e
C
d
n
a
l
n
I
r
e
t
n
e
C
g
n
i
p
p
o
h
S
a
z
a
l
P
s
g
n
i
K
.
.
.
.
.
.
.
.
.
.
.
.
a
z
a
l
P
e
r
b
m
u
C
a
L
.
o
C
t
n
e
m
e
g
a
n
a
M
h
c
i
r
e
c
a
M
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
P
L
,
H
W
C
A
M
l
l
a
M
e
t
a
g
h
t
r
o
N
l
l
a
M
k
r
a
P
h
t
r
o
N
.
.
.
.
.
e
h
T
,
s
k
a
O
w
e
i
V
c
i
f
i
c
a
P
l
l
a
M
y
e
l
l
a
V
e
s
i
d
a
r
a
P
s
e
s
a
e
L
d
n
u
o
r
G
e
g
a
l
l
i
V
e
s
i
d
a
r
a
P
I
I
k
r
a
P
e
c
i
f
f
O
e
g
a
l
l
i
V
e
s
i
d
a
r
a
P
.
.
e
d
n
a
r
G
a
s
a
C
t
a
e
d
a
n
e
m
o
r
P
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
r
e
t
n
e
C
e
n
w
o
T
d
a
e
h
w
o
r
r
A
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
n
o
y
n
a
C
k
c
a
l
B
l
l
a
M
a
l
o
t
i
p
a
C
l
l
a
M
e
d
a
c
s
a
C
r
e
t
n
e
C
n
o
i
h
s
a
F
r
e
l
d
n
a
h
C
s
l
l
a
F
a
r
a
g
a
i
N
o
g
a
c
i
h
C
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
l
l
a
M
r
i
a
F
y
r
u
b
n
a
D
.
.
.
.
.
.
.
l
l
a
M
y
k
S
t
r
e
s
e
D
l
l
a
M
d
r
o
f
t
p
e
D
.
.
l
l
a
M
d
n
a
l
t
s
a
E
s
l
l
a
F
a
l
l
e
r
t
s
E
f
o
f
o
s
t
e
l
t
u
O
n
o
i
h
s
a
F
s
t
e
l
t
u
O
n
o
i
h
s
a
F
131
Y
N
A
P
M
O
C
H
C
I
R
E
C
A
M
E
H
T
)
d
e
u
n
i
t
n
o
C
(
n
o
i
t
a
i
c
e
r
p
e
D
d
e
t
a
l
u
m
u
c
c
A
d
n
a
e
t
a
t
s
E
l
a
e
R
—
I
I
I
e
l
u
d
e
h
c
S
5
1
0
2
,
1
3
r
e
b
m
e
c
e
D
)
s
d
n
a
s
u
o
h
t
n
i
s
r
a
l
l
o
D
(
t
s
o
C
l
a
t
o
T
f
o
t
e
N
d
e
t
a
l
u
m
u
c
c
A
n
o
i
t
a
i
c
e
r
p
e
D
d
e
t
a
l
u
m
u
c
c
A
n
o
i
t
a
i
c
e
r
p
e
D
l
a
t
o
T
n
o
i
t
c
u
r
t
s
n
o
C
s
s
e
r
g
o
r
P
n
i
t
n
e
m
p
i
u
q
E
d
n
a
s
g
n
i
h
s
i
n
r
u
F
d
n
a
g
n
i
d
l
i
u
B
s
t
n
e
m
e
v
o
r
p
m
I
t
s
o
C
d
e
z
i
l
a
t
i
p
a
C
t
n
e
u
q
e
s
b
u
S
o
t
t
n
e
m
p
i
u
q
E
d
n
a
d
n
a
L
n
o
i
t
i
s
i
u
q
c
A
s
g
n
i
h
s
i
n
r
u
F
d
n
a
g
n
i
d
l
i
u
B
s
t
n
e
m
e
v
o
r
p
m
I
d
n
a
L
d
o
i
r
e
P
f
o
e
s
o
l
C
t
a
d
e
i
r
r
a
C
h
c
i
h
W
t
a
t
n
u
o
m
A
s
s
o
r
G
y
n
a
p
m
o
C
o
t
t
s
o
C
l
a
i
t
i
n
I
7
0
3
,
6
3
8
8
6
,
4
7
3
5
2
4
,
7
2
1
2
8
0
,
2
6
3
5
5
,
3
2
0
4
5
,
8
9
2
7
5
4
,
1
2
1
6
4
6
,
4
9
8
2
,
9
6
2
9
,
6
2
7
3
1
,
9
2
5
8
9
,
9
4
6
9
2
,
7
4
1
2
2
,
6
5
1
0
0
1
,
4
4
1
6
6
0
,
3
0
1
2
0
1
,
0
7
0
4
2
,
7
4
1
9
4
1
,
4
8
4
9
4
,
8
6
3
5
9
,
4
6
8
9
2
,
6
6
2
,
1
$
4
0
2
,
1
3
4
2
3
,
0
8
—
8
8
0
,
6
7
8
8
2
,
6
2
6
6
,
2
2
2
5
,
7
5
9
5
,
1
0
3
5
,
0
1
—
4
9
6
,
1
1
6
7
,
2
1
0
9
7
,
7
3
1
6
8
,
4
9
6
6
5
,
4
3
4
5
,
9
4
7
7
1
,
9
3
3
7
7
,
1
6
6
5
9
,
4
9
3
0
6
,
7
2
5
1
3
,
7
2
3
8
,
0
2
$
2
0
5
,
7
9
2
,
1
$
7
0
3
,
6
3
2
1
0
,
5
5
4
3
1
5
,
3
0
2
0
7
3
,
8
6
5
1
2
,
6
2
0
7
0
,
9
0
3
9
7
9
,
8
2
1
1
4
2
,
6
6
2
9
,
6
2
3
8
9
,
0
1
8
9
8
,
1
4
5
7
7
,
7
8
2
6
8
,
1
5
2
8
0
,
1
5
2
3
4
6
,
3
9
1
3
4
2
,
2
4
1
5
7
8
,
1
3
1
6
9
1
,
2
4
2
2
5
7
,
1
1
1
9
0
8
,
5
7
5
8
7
,
5
8
4
8
2
0
9
3
,
2
1
0
8
,
5
$
—
4
1
8
1
—
—
3
9
3
4
0
0
,
0
1
0
6
1
—
0
1
6
9
2
1
5
—
—
4
1
—
1
8
2
0
1
,
1
0
4
7
,
3
1
4
3
4
,
1
8
5
0
,
8
—
1
6
3
6
3
3
,
1
8
9
5
4
3
8
—
0
6
1
3
2
8
,
0
1
1
9
4
0
3
5
6
2
3
3
0
6
,
1
5
9
8
,
1
8
2
0
,
2
6
1
3
,
1
7
8
7
,
5
6
2
1
,
1
8
6
1
2
4
4
$
8
9
9
,
8
3
0
,
1
$
6
8
7
,
6
5
2
$
6
0
1
,
6
$
—
0
9
1
,
6
9
3
6
1
5
,
0
6
5
8
5
,
9
1
3
3
8
,
5
9
1
0
4
5
,
4
7
9
6
,
3
0
3
1
9
8
,
7
1
1
—
—
0
3
5
,
4
3
5
3
4
,
4
7
9
6
8
,
5
3
4
8
5
,
5
2
2
4
9
8
,
6
6
1
5
3
1
,
0
2
1
8
9
8
,
2
1
1
7
0
2
,
1
0
2
5
3
7
,
0
9
7
0
9
,
0
5
9
4
2
,
5
7
4
7
3
,
8
4
6
0
5
,
0
3
4
4
3
,
6
9
7
4
,
7
4
1
5
,
6
5
3
9
,
4
—
8
2
9
,
0
1
8
1
6
,
1
2
2
9
,
6
1
7
7
8
,
6
0
0
8
,
2
1
9
9
5
,
3
2
6
1
6
,
5
1
4
5
8
,
4
2
0
8
0
,
0
2
7
4
6
,
7
1
0
0
1
,
4
3
0
1
8
,
9
1
4
9
9
,
0
1
4
9
0
,
0
1
3
9
8
,
6
2
1
0
,
3
2
3
6
8
6
,
5
9
1
0
2
1
,
3
2
1
5
4
,
9
1
5
9
5
,
1
3
3
3
,
5
3
0
2
)
2
3
2
,
9
(
9
4
4
,
8
2
6
0
,
4
6
7
2
,
5
5
5
7
1
,
3
1
2
9
1
7
,
9
4
7
0
,
1
2
3
1
3
,
1
5
1
4
4
,
6
5
7
7
2
,
1
7
4
5
1
,
4
2
0
0
6
,
7
1
3
0
,
7
0
9
8
,
1
7
0
1
6
,
1
0
0
5
,
3
7
1
3
9
,
6
3
—
1
4
2
,
4
8
2
3
,
2
3
7
8
5
,
3
2
—
—
—
—
—
—
—
—
—
—
—
—
—
4
6
—
—
—
—
—
—
—
—
—
$
2
2
9
,
9
3
0
,
1
$
4
7
4
,
1
5
2
$
—
—
0
0
6
,
5
0
1
—
5
1
2
,
8
3
0
2
4
,
4
7
2
5
,
2
0
3
8
1
7
,
2
1
1
—
4
3
5
,
2
4
8
1
,
1
3
9
9
6
,
9
1
3
4
8
,
7
3
8
9
0
,
6
2
5
1
7
,
7
4
1
0
3
2
,
5
7
2
3
5
,
0
6
9
1
8
,
6
3
1
5
5
8
,
7
6
8
5
3
,
5
5
0
6
6
,
8
6
—
0
0
4
,
6
2
4
1
4
,
9
2
7
2
8
,
7
5
3
0
,
7
4
6
7
,
6
8
4
9
,
4
—
8
1
6
,
1
8
2
9
,
0
1
8
5
1
,
6
3
2
5
6
,
6
0
0
8
,
2
1
—
5
4
0
,
6
1
4
5
8
,
4
2
0
0
7
,
5
1
2
0
9
,
4
1
0
0
1
,
4
3
3
4
7
,
9
1
1
5
8
,
2
1
4
9
0
,
0
1
3
1
9
,
9
4
2
1
9
,
6
9
7
,
8
$
4
4
7
,
2
9
8
,
1
$
6
5
6
,
9
8
6
,
0
1
$
1
5
8
,
4
3
2
$
1
4
8
,
9
6
1
$
7
4
2
,
0
9
3
,
8
$
7
1
7
,
4
9
8
,
1
$
8
3
3
,
0
5
8
,
2
$
9
7
4
,
7
4
$
7
9
8
,
3
3
0
,
6
$
2
4
9
,
7
5
7
,
1
$
.
m
r
i
f
g
n
i
t
n
u
o
c
c
a
c
i
l
b
u
p
d
e
r
e
t
s
i
g
e
r
t
n
e
d
n
e
p
e
d
n
i
f
o
t
r
o
p
e
r
g
n
i
y
n
a
p
m
o
c
c
a
e
e
S
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
r
e
t
n
e
C
s
n
e
e
u
Q
e
c
a
l
P
a
c
i
n
o
M
a
t
n
a
S
d
n
a
L
t
n
e
c
a
j
d
A
n
a
T
n
a
S
r
e
t
n
e
C
l
a
n
o
i
g
e
R
e
g
a
l
l
i
V
n
a
T
n
a
S
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
l
l
a
M
k
r
a
P
h
t
u
o
S
r
e
t
n
e
C
e
g
d
i
r
h
t
u
o
S
r
e
t
n
e
C
d
o
o
w
e
n
o
t
S
r
e
t
n
e
C
s
g
n
i
r
p
S
n
o
i
t
i
t
s
r
e
p
u
S
r
e
t
n
e
C
r
e
w
o
P
s
g
n
i
r
p
S
n
o
i
t
i
t
s
r
e
p
u
S
t
a
s
p
o
h
S
e
h
T
,
)
a
n
a
r
a
M
(
e
n
i
r
e
g
n
a
T
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
P.
L
.
,
p
i
h
s
r
e
n
t
r
a
P
h
c
i
r
e
c
a
M
e
h
T
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
l
l
a
M
e
n
w
o
T
a
d
a
t
n
a
c
n
E
a
L
n
o
s
c
u
T
.
.
.
t
e
e
r
t
S
h
t
n
i
N
y
t
n
e
w
T
.
.
.
.
.
l
l
a
M
y
e
l
l
a
V
r
e
t
n
e
C
r
e
v
i
R
y
e
l
l
a
V
f
o
l
l
a
M
,
y
e
l
l
a
V
r
o
t
c
i
V
.
.
.
.
.
.
l
l
a
M
e
r
i
a
F
e
g
a
t
n
i
V
.
.
.
.
l
l
a
M
n
o
t
l
i
W
n
o
i
l
i
v
a
P
e
d
i
s
t
s
e
W
e
u
n
e
v
A
n
a
g
i
h
c
i
M
h
t
r
o
N
0
0
5
)
s
n
o
i
t
a
c
o
l
r
e
m
r
o
f
(
s
’
n
y
v
r
e
M
t
n
e
m
p
o
l
e
v
e
d
d
n
a
d
n
a
l
r
e
h
t
O
.
.
.
.
.
.
.
.
.
.
s
e
i
t
r
e
p
o
r
p
s
e
i
t
i
t
n
E
/
s
r
e
t
n
e
C
g
n
i
p
p
o
h
S
132
THE MACERICH COMPANY
Schedule III—Real Estate and Accumulated Depreciation (Continued)
December 31, 2015
(Dollars in thousands)
Depreciation of the Company’s investment in buildings and improvements reflected in the
consolidated statements of operations are calculated over the estimated useful lives of the asset as
follows:
Buildings and improvements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Tenant improvements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Equipment and furnishings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
5 - 40 years
5 - 7 years
5 - 7 years
The changes in total real estate assets for the three years ended December 31, 2015 are as follows:
Balances, beginning of year . . . . . . . . . . . .
Additions . . . . . . . . . . . . . . . . . . . . . . . . .
Dispositions and retirements . . . . . . . . . . .
$12,777,882
392,575
(2,480,801)
$ 9,181,338
4,042,409
(445,865)
$9,012,706
943,159
(774,527)
Balances, end of year . . . . . . . . . . . . . . . . .
$10,689,656
$12,777,882
$9,181,338
2015
2014
2013
The aggregate gross cost of the property included in the table above for federal income tax
purposes was $7,440,059 (unaudited) at December 31, 2015.
The changes in accumulated depreciation for the three years ended December 31, 2015 are as
follows:
Balances, beginning of year . . . . . . . . . . . . . .
Additions . . . . . . . . . . . . . . . . . . . . . . . . . . .
Dispositions and retirements . . . . . . . . . . . . .
$1,709,992
354,977
(172,225)
$1,559,572
289,178
(138,758)
$1,533,160
284,500
(258,088)
Balances, end of year . . . . . . . . . . . . . . . . . .
$1,892,744
$1,709,992
$1,559,572
2015
2014
2013
See accompanying report of independent registered public accounting firm.
133
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly
authorized, on February 23, 2016.
SIGNATURES
THE MACERICH COMPANY
By
/s/ ARTHUR M. COPPOLA
Arthur M. Coppola
Chairman and Chief Executive Officer
Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed
below by the following persons on behalf of the registrant and in the capacities and on the dates
indicated.
Signature
Capacity
Date
/s/ ARTHUR M. COPPOLA
Arthur M. Coppola
Chairman and Chief Executive Officer
and Director (Principal Executive
Officer)
February 23, 2016
/s/ EDWARD C. COPPOLA
Edward C. Coppola
/s/ JOHN H. ALSCHULER
John H. Alschuler
/s/ STEVEN R. HASH
Steven R. Hash
/s/ FREDERICK S. HUBBELL
Frederick S. Hubbell
/s/ DIANA M. LAING
Diana M. Laing
/s/ MASON G. ROSS
Mason G. Ross
/s/ STEVEN L. SOBOROFF
Steven L. Soboroff
President and Director
February 23, 2016
Director
Director
Director
Director
Director
Director
134
February 23, 2016
February 23, 2016
February 23, 2016
February 23, 2016
February 23, 2016
February 23, 2016
Signature
Capacity
Date
/s/ ANDREA M. STEPHEN
Andrea M. Stephen
/s/ JOHN M. SULLIVAN
John M. Sullivan
/s/ THOMAS E. O’HERN
Thomas E. O’Hern
Director
Director
February 23, 2016
February 23, 2016
Senior Executive Vice President,
Treasurer and Chief Financial and
Accounting Officer (Principal Financial
and Accounting Officer)
February 23, 2016
135
Exhibit
Number
EXHIBIT INDEX
Description
2.1 Master Agreement, dated November 14, 2014, by and among Pacific Premier Retail LLC,
MACPT LLC, Macerich PPR GP LLC, Queens JV LP, Macerich Queens JV LP, Queens
JV GP LLC, 1700480 Ontario Inc. and the Company (incorporated by reference as an
exhibit to the Company’s Current Report on Form 8-K, event date November 14, 2014).
3.1 Articles of Amendment and Restatement of the Company (incorporated by reference as an
exhibit to the Company’s Registration Statement on Form S-11, as amended
(No. 33-68964)).
3.1.1 Articles Supplementary of the Company (incorporated by reference as an exhibit to the
Company’s Current Report on Form 8-K, event date May 30, 1995).
3.1.2 Articles Supplementary of the Company (with respect to the first paragraph) (incorporated
by reference as an exhibit to the Company’s 1998 Form 10-K).
3.1.3 Articles Supplementary of the Company (Series D Preferred Stock) (incorporated by
reference as an exhibit to the Company’s Current Report on Form 8-K, event date July 26,
2002).
3.1.4 Articles Supplementary of the Company (incorporated by reference as an exhibit to the
Company’s Registration Statement on Form S-3, as amended (No. 333-88718)).
3.1.5 Articles of Amendment of the Company (declassification of Board) (incorporated by
reference as an exhibit to the Company’s 2008 Form 10-K).
3.1.6 Articles Supplementary of the Company (incorporated by reference as an exhibit to the
Company’s Current Report on Form 8-K, event date February 5, 2009).
3.1.7 Articles of Amendment of the Company (increased authorized shares) (incorporated by
reference as an exhibit to the Company’s Quarterly Report on Form 10-Q for the quarter
ended June 30, 2009).
3.1.8 Articles of Amendment of the Company (to eliminate the supermajority vote requirement
to amend the charter and to clarify a reference in Article NINTH) (incorporated by
reference as an exhibit to the Company’s Current Report on Form 8-K, event date
May 30, 2014).
3.1.9 Articles Supplementary (election to be subject to Section 3-803 of the Maryland General
Corporation Law) (incorporated by reference as an exhibit to the Company’s Current
Report on Form 8-K, event date March 17, 2015).
3.1.10 Articles Supplementary (designation of Series E Preferred Stock) (incorporated by
reference as an exhibit to the Company’s Current Report on Form 8-K, event date
March 18, 2015).
3.1.11 Articles Supplementary (reclassification of Series E Preferred Stock to preferred stock)
(incorporated by reference as an exhibit to the Company’s Current Report on Form 8-K,
event date May 7, 2015).
3.1.12 Articles Supplementary (repeal of election to be subject to Section 3-803 of the Maryland
General Corporation Law (incorporated by reference as an exhibit to the Company’s
Current Report on Form 8-K, event date May 28, 2015).
136
Exhibit
Number
Description
3.2 Amended and Restated Bylaws of the Company (incorporated by reference as an exhibit
to the Company’s Current Report on Form 8-K, event date January 29, 2014).
4.1 Form of Common Stock Certificate (incorporated by reference as an exhibit to the
Company’s Current Report on Form 8-K, as amended, event date November 10, 1998).
4.2 Form of Preferred Stock Certificate (Series D Preferred Stock) (incorporated by reference
as an exhibit to the Company’s Registration Statement on Form S-3 (No. 333-107063)).
10.1 Amended and Restated Limited Partnership Agreement for the Operating Partnership
dated as of March 16, 1994 (incorporated by reference as an exhibit to the Company’s
1996 Form 10-K).
10.1.1 Amendment to Amended and Restated Limited Partnership Agreement for the Operating
Partnership dated June 27, 1997 (incorporated by reference as an exhibit to the Company’s
Current Report on Form 8-K, event date June 20, 1997).
10.1.2 Amendment to Amended and Restated Limited Partnership Agreement for the Operating
Partnership dated November 16, 1997 (incorporated by reference as an exhibit to the
Company’s 1997 Form 10-K).
10.1.3 Fourth Amendment to Amended and Restated Limited Partnership Agreement for the
Operating Partnership dated February 25, 1998 (incorporated by reference as an exhibit to
the Company’s 1997 Form 10-K).
10.1.4 Fifth Amendment to Amended and Restated Limited Partnership Agreement for the
Operating Partnership dated February 26, 1998 (incorporated by reference as an exhibit to
the Company’s 1997 Form 10-K).
10.1.5
10.1.6
Sixth Amendment to Amended and Restated Limited Partnership Agreement for the
Operating Partnership dated June 17, 1998 (incorporated by reference as an exhibit to the
Company’s 1998 Form 10-K).
Seventh Amendment to Amended and Restated Limited Partnership Agreement for the
Operating Partnership dated December 23, 1998 (incorporated by reference as an exhibit
to the Company’s 1998 Form 10-K).
10.1.7 Eighth Amendment to Amended and Restated Limited Partnership Agreement for the
Operating Partnership dated November 9, 2000 (incorporated by reference as an exhibit to
the Company’s 2000 Form 10-K).
10.1.8 Ninth Amendment to Amended and Restated Limited Partnership Agreement for the
Operating Partnership dated July 26, 2002 (incorporated by reference as an exhibit to the
Company’s Current Report on Form 8-K event date July 26, 2002).
10.1.9 Tenth Amendment to Amended and Restated Limited Partnership Agreement for the
Operating Partnership dated October 26, 2006 (incorporated by reference as an exhibit to
the Company’s 2006 Form 10-K).
10.1.10 Eleventh Amendment to Amended and Restated Limited Partnership Agreement for the
Operating Partnership dated as of March 16, 2007 (incorporated by reference as an exhibit
to the Company’s Current Report on Form 8-K, event date March 16, 2007).
10.1.11 Twelfth Amendment to the Amended and Restated Limited Partnership Agreement of the
Operating Partnership dated as of April 30, 2009 (incorporated by reference as an exhibit
to the Company’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2009).
137
Exhibit
Number
Description
10.1.12 Thirteenth Amendment to the Amended and Restated Limited Partnership Agreement of
the Operating Partnership dated as of October 29, 2009 (incorporated by reference as an
exhibit to the Company’s 2009 Form 10-K).
10.1.13 Form of Fourteenth Amendment to Amended and Restated Limited Partnership
Agreement for the Operating Partnership (incorporated by reference as an exhibit to the
Company’s Current Report on Form 8-K, event date April 25, 2005).
10.2
[Intentionally omitted]
10.3
[Intentionally omitted]
10.4
[Intentionally omitted]
10.5* Amended and Restated Deferred Compensation Plan for Executives (2003) (incorporated
by reference as an exhibit to the Company’s 2003 Form 10-K).
10.5.1* Amendment Number 1 to Amended and Restated Deferred Compensation Plan for
Executives (October 30, 2008) (incorporated by reference as an exhibit to the Company’s
2008 Form 10-K).
10.5.2* Amendment Number 2 to Amended and Restated Deferred Compensation Plan for
Executives (May 1, 2011) (incorporated by reference as an exhibit to the Company’s
Quarterly Report on Form 10-Q for the quarter ended June 30, 2011).
10.5.3* Amendment Number 3 to Amended and Restated Deferred Compensation Plan for
Executives (September 27, 2012) (incorporated by reference as an exhibit to the
Company’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2012).
10.6* Amended and Restated Deferred Compensation Plan for Senior Executives (2003)
(incorporated by reference as an exhibit to the Company’s 2003 Form 10-K).
10.6.1* Amendment Number 1 to Amended and Restated Deferred Compensation Plan for Senior
Executives (October 30, 2008) (incorporated by reference as an exhibit to the Company’s
2008 Form 10-K).
10.6.2* Amendment Number 2 to Amended and Restated Deferred Compensation Plan for Senior
Executives (May 1, 2011) (incorporated by reference as an exhibit to the Company’s
Quarterly Report on Form 10-Q for the quarter ended June 30, 2011).
10.6.3* Amendment Number 3 to Amended and Restated Deferred Compensation Plan for Senior
Executives (September 27, 2012) (incorporated by reference as an exhibit to the
Company’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2012).
10.7* Eligible Directors’ Deferred Compensation/Phantom Stock Plan (as amended and restated
as of January 1, 2013) (incorporated by reference as an exhibit to the Company’s Quarterly
Report on Form 10-Q for the quarter ended June 30, 2013).
10.8* Amended and Restated 2013 Deferred Compensation Plan for Executives effective
(January 1, 2016).
10.9 Deferred Compensation Plan Rabbi Trust between the Company and Wilmington Trust,
National Association, effective as of October 1, 2012 (incorporated by reference as an
exhibit to the Company’s Quarterly Report on Form 10-Q for the quarter ended
September 30, 2012).
138
Exhibit
Number
Description
10.10 Registration Rights Agreement, dated as of March 16, 1994, among the Company and
Mace Siegel, Dana K. Anderson, Arthur M. Coppola and Edward C. Coppola
(incorporated by reference as an exhibit to the Company’s 1996 Form 10-K).
10.11 Registration Rights Agreement, dated as of March 16, 1994, between the Company and
The Northwestern Mutual Life Insurance Company (incorporated by reference as an
exhibit to the Company’s 1996 Form 10-K).
10.12 Registration Rights Agreement dated as of December 18, 2003 by the Operating
Partnership, the Company and Taubman Realty Group Limited Partnership (Registration
rights assigned by Taubman to three assignees) (incorporated by reference as an exhibit to
the Company’s 2003 Form 10-K).
10.13
10.14
10.15
10.16
Incidental Registration Rights Agreement dated March 16, 1994 (incorporated by
reference as an exhibit to the Company’s 1996 Form 10-K).
Incidental Registration Rights Agreement dated as of July 21, 1994 (incorporated by
reference as an exhibit to the Company’s 1997 Form 10-K).
Incidental Registration Rights Agreement dated as of August 15, 1995 (incorporated by
reference as an exhibit to the Company’s 1997 Form 10-K).
Incidental Registration Rights Agreement dated as of December 21, 1995 (incorporated by
reference as an exhibit to the Company’s 1997 Form 10-K).
10.17 List of Omitted Incidental/Demand Registration Rights Agreements (incorporated by
reference as an exhibit to the Company’s 1997 Form 10-K).
10.18 Redemption, Registration Rights and Lock-Up Agreement dated as of July 24, 1998
between the Company and Harry S. Newman, Jr. and LeRoy H. Brettin (incorporated by
reference as an exhibit to the Company’s 1998 Form 10-K).
10.19 Form of Indemnification Agreement between the Company and its executive officers and
directors (incorporated by reference as an exhibit to the Company’s 2008 Form 10-K).
10.20 Form of Registration Rights Agreement with Series D Preferred Unit Holders
(incorporated by reference as an exhibit to the Company’s Current Report on Form 8-K,
event date July 26, 2002).
10.20.1 List of Omitted Registration Rights Agreements (incorporated by reference as an exhibit
to the Company’s Current Report on Form 8-K, event date July 26, 2002).
10.21 Registration Rights Agreement between the Company and 1700480 Ontario Inc. dated as
of November 14, 2014 (incorporated by reference as an exhibit to the Company’s Current
Report on Form 8-K, event date November 14, 2014).
10.22
$1,500,000,000 Revolving Loan Facility and $125,000,000 Term Loan Facility Amended and
Restated Credit Agreement, dated as of August 6, 2013, by and among the Company, The
Macerich Partnership, L.P., Deutsche Bank Trust Company Americas, as administrative
agent; Deutsche Bank Securities Inc., J.P. Morgan Securities LLC and Wells Fargo
Securities, LLC as joint lead arrangers and joint bookrunning managers; JP Morgan Chase
Bank, N.A. and Wells Fargo Bank, N.A. as co-syndication agents, and various lenders party
thereto (incorporated by reference as an exhibit to the Company’s Current Report on
Form 8-K, event date August 6, 2013).
139
Exhibit
Number
Description
10.23 Amended and Restated Unconditional Guaranty, dated as of August 6, 2013, by the
Company in favor of Deutsche Bank Trust Company Americas, as administrative agent
(incorporated by reference as an exhibit to the Company’s Current Report on Form 8-K,
event date August 6, 2013).
10.24 Tax Matters Agreement (Wilmorite) (incorporated by reference as an exhibit to the
Company’s Current Report on Form 8-K, event date April 25, 2005).
10.25
[Intentionally omitted]
10.26
[Intentionally omitted]
10.27* 2003 Equity Incentive Plan, as amended and restated as of May 30, 2014 (incorporated by
reference as an exhibit to the Company’s Current Report on Form 8-K, event date
May 30, 2014).
10.27.1* Amended and Restated Cash Bonus/Restricted Stock/Stock Unit and LTIP Unit Award
Program under the 2003 Equity Incentive Plan (incorporated by reference as an exhibit to
the Company’s 2010 Form 10-K).
10.27.2* Form of Restricted Stock Award Agreement under 2003 Equity Incentive Plan
(incorporated by reference as an exhibit to the Company’s 2008 Form 10-K).
10.27.3* Form of Stock Unit Award Agreement under 2003 Equity Incentive Plan (incorporated by
reference as an exhibit to the Company’s 2014 Form 10-K).
10.27.4* Form of Employee Stock Option Agreement under 2003 Equity Incentive Plan
(incorporated by reference as an exhibit to the Company’s 2008 Form 10-K).
10.27.5* Form of Non-Qualified Stock Option Grant under 2003 Equity Incentive Plan
(incorporated by reference as an exhibit to the Company’s 2008 Form 10-K).
10.27.6* Form of Restricted Stock Award Agreement for Non-Management Directors (incorporated
by reference as an exhibit to the Company’s 2008 Form 10-K).
10.27.7* Form of Stock Unit Award Agreement under 2003 Equity Incentive Plan for
Non-Employee Directors.
10.27.8* Form of Stock Appreciation Right under 2003 Equity Incentive Plan (incorporated by
reference as an exhibit to the Company’s 2008 Form 10-K).
10.27.9* Form of LTIP Unit Award Agreement under 2003 Equity Incentive Plan (service-based)
(incorporated by reference as an exhibit to the Company’s Quarterly Report on Form 10-Q
for the quarter ended March 31, 2014).
10.27.10* Form of LTIP Unit Award Agreement under 2003 Equity Incentive Plan (performance-
based) (incorporated by reference as an exhibit to the Company’s Quarterly Report on
Form 10-Q for the quarter ended March 31, 2014).
10.27.11* Form of LTIP Unit Award Agreement under 2003 Equity Incentive Plan (fully-vested)
(incorporated by reference as an exhibit to the Company’s Quarterly Report on Form 10-Q
for the quarter ended March 31, 2014).
10.27.12* Form of LTIP Unit Award Agreement under 2003 Equity Incentive Plan (performance-
based/outperformance) (incorporated by reference as an exhibit to the Company’s 2014
Form 10-K).
140
Exhibit
Number
Description
10.28* Amendment and Restatement of the Employee Stock Purchase Plan (as amended and
restated as of June 1, 2013) (incorporated by reference as an exhibit to the Company’s
Quarterly Report on Form 10-Q for the quarter ended June 30, 2013).
10.28.1* First Amendment to Amended and Restated Employee Stock Purchase Plan (October 23,
2014) (incorporated by reference as an exhibit to the Company’s Quarterly Report on
Form 10-Q for the quarter ended September 30, 2014).
10.29* Management Continuity Agreement between the Company and Thomas J. Leanse,
effective January 1, 2013 (incorporated by reference as an exhibit to the Company’s
Quarterly Report on Form 10-Q for the quarter ended September 30, 2012).
10.30
2005 Amended and Restated Agreement of Limited Partnership of MACWH, LP dated as
of April 25, 2005 (incorporated by reference as an exhibit to the Company’s Current
Report on Form 8-K, event date April 25, 2005).
10.31 Registration Rights Agreement dated as of April 25, 2005 among the Company and the
persons names on Exhibit A thereto (incorporated by reference as an exhibit to the
Company’s Current Report on Form 8-K, event date April 25, 2005).
21.1 List of Subsidiaries
23.1 Consent of Independent Registered Public Accounting Firm (KPMG LLP)
31.1
Section 302 Certification of Arthur Coppola, Chief Executive Officer
31.2
Section 302 Certification of Thomas O’Hern, Chief Financial Officer
32.1
Section 906 Certifications of Arthur Coppola and Thomas O’Hern
101.INS XBRL Instance Document
101.SCH XBRL Taxonomy Extension Schema Document
101.CAL XBRL Taxonomy Extension Calculation Linkbase Document
101.LAB XBRL Taxonomy Extension Label Linkbase Document
101.PRE XBRL Taxonomy Extension Presentation Linkbase Document
101.DEF XBRL Taxonomy Extension Definition Linkbase Document
* Represents a management contract, or compensatory plan, contract or arrangement required to be
filed pursuant to Regulation S-K.
141
Exhibit 21.1
LIST OF SUBSIDIARIES
1010-1016 MARKET STREET REALTY GP, LLC, a Pennsylvania limited liability company
1010-1016 MARKET STREET REALTY, LP, a Pennsylvania limited partnership
1018 MARKET STREET REALTY GP, LLC, a Pennsylvania limited liability company
1018 MARKET STREET REALTY, LP , a Pennsylvania limited partnership
1020-1024 MARKET STREET REALTY GP, LLC, a Pennsylvania limited liability company
1020-1024 MARKET STREET REALTY, LP, a Pennsylvania limited partnership
2013 BRONX VENTURE LLC, a Delaware limited liability company
443 WABASH MAB LLC, a Delaware limited liability company
443 WABASH MA OWNER LLC, a Delaware limited liability company
801 4-6 FEE OWNER GP LLC, a Delaware limited liability company
801 4-6 FEE OWNER LP, a Delaware limited partnership
801 4-6 MEZZ GP LLC, a Delaware limited liability company
801 4-6 MEZZ LP, a Delaware limited partnership
801 C-3 FEE OWNER GP LLC, a Delaware limited liability company
801 C-3 FEE OWNER LP, a Delaware limited partnership
801 C-3 MEZZ GP LLC, a Delaware limited liability company
801 C-3 MEZZ LP, a Delaware limited partnership
801-GALLERY ASSOCIATES, L.P., a Pennsylvania limited partnership
801-GALLERY C-3 ASSOCIATES, L.P., a Pennsylvania limited partnership
801-GALLERY C-3 GP, LLC, a Pennsylvania limited liability company
801-GALLERY C-3 MT, L.P., a Pennsylvania limited partnership
801-GALLERY GP, LLC, a Pennsylvania limited liability company
801-GALLERY OFFICE ASSOCIATES, L.P., a Pennsylvania limited partnership
801-GALLERY OFFICE GP, LLC, a Pennsylvania limited liability company
801-GALLERY OFFICE MT, L.P., a Pennsylvania limited partnership
801 MARKET VENTURE GP LLC, a Delaware limited liability company
801 MARKET VENTURE LP, a Delaware limited partnership
801-TENANT C-3 MANAGER, LLC, a Pennsylvania limited liability company
801-TENANT OFFICE MANAGER, LLC, a Pennsylvania limited liability company
AM TYSONS LLC, a Delaware limited liability company
ARROWHEAD REIT LLC, a Delaware limited liability company
ARROWHEAD TOWNE CENTER LLC, a Delaware limited liability company
142
BILTMORE SHOPPING CENTER PARTNERS LLC, an Arizona limited liability company
BROAD RAFAEL ASSOCIATES (LIMITED PARTNERSHIP), a Pennsylvania limited partnership
BROAD RAFAEL PROPERTIES CORP., a Delaware corporation
BROOKLYN KINGS PLAZA LLC, a Delaware limited liability company
CAM CANDLESTICK LLC, a Delaware limited liability company
CAM-CARSON LLC, a Delaware limited liability company
CAMELBACK SHOPPING CENTER LIMITED PARTNERSHIP, an Arizona limited partnership
CAM NY 2013 LLC, a Delaware limited liability company
CANDLESTICK CENTER LLC, a Delaware limited liability company
CAPITOLA MALL LLC, a Delaware limited liability company
CCP 1998 BONDS LLC, a Delaware limited liability company
CCP VALENCIA LLC, a Delaware limited liability company
CHANDLER SOLAR LLC, a Delaware limited liability company
CHICAGO 500 NORTH MICHIGAN LLC, a Delaware limited liability company
COOLIDGE HOLDING LLC, an Arizona limited liability company
CORTE MADERA VILLAGE, LLC, a Delaware limited liability company
COUNTRY CLUB PLAZA JV LLC, a Delaware limited liability company
COUNTRY CLUB PLAZA KC PARTNERS LLC, a Delaware limited liability company
DANBURY MALL, LLC, a Delaware limited liability company
DB HOLDINGS LLC, a Delaware limited liability company
DELIV, INC., a Delaware corporation
DEPTFORD MALL ASSOCIATES L.L.C., a New Jersey limited liability company
DESERT SKY MALL LLC, a Delaware limited liability company
EAST MESA ADJACENT LLC, a Delaware limited liability company
EAST MESA LAND, L.L.C., a Delaware limited liability company
EAST MESA MALL, L.L.C., a Delaware limited liability company
FASHION OUTLETS II LLC, a Delaware limited liability company
FASHION OUTLETS OF CHICAGO LLC, a Delaware limited liability company
FLAGSTAFF MALL ASSOCIATES LLC, a Delaware limited liability company
FLAGSTAFF MALL SPE LLC, a Delaware limited liability company
FLATIRON PROPERTY HOLDING, L.L.C., a Delaware limited liability company
FOC ADJACENT LLC, a Delaware limited liability company
FREE RACE MALL REST., L.P., a New Jersey limited partnership
FREEHOLD I, LLC, a Delaware limited liability company
143
FREEHOLD I SPC, INC., a Delaware corporation
FREEHOLD CHANDLER HOLDINGS LP, a Delaware limited partnership
FREEHOLD CHANDLER TRUST LLC, a Delaware limited liability company
FREEMALL ASSOCIATES, LLC, a Delaware limited liability company
FREEMALL ASSOCIATES, L.P., a New Jersey limited partnership
FRMR B LLC, a Delaware limited liability company
FRMR, INC., a New Jersey corporation
GPM GP LLC, a Delaware limited liability company
GRANITE MALL GP, LLC, a Delaware limited liability company
GREAT NORTHERN HOLDINGS, LLC, a Delaware limited liability company
GREAT NORTHERN SPE, LLC, a Delaware limited liability company
GREEN ACRES ADJACENT LLC, a Delaware limited liability company
GREEN TREE MALL LLC, a Delaware limited liability company
HUDSON PROPERTIES, L.P., a Delaware limited partnership
HUDWIL I, LLC, a Delaware limited liability company
HUDWIL I SPC, INC., a Delaware corporation
HUDWIL IV, LLC, a Delaware limited liability company
HUDWIL IV SPC, INC., a Delaware corporation
INLAND SOLAR LLC, a Delaware limited liability company
JAREN ASSOCIATES #4, an Arizona general partnership
KEYSTONE PHILADELPHIA PROPERTIES, L.P., a Pennsylvania limited partnership
KIERLAND COMMONS INVESTMENT LLC, a Delaware limited liability company
KIERLAND COMMONS TRADENAME LLC, a Delaware limited liability company
KIERLAND GREENWAY, LLC, a Delaware limited liability company
KIERLAND TOWER LOFTS, LLC, a Delaware limited liability company
KINGS PLAZA ENERGY LLC, a Delaware limited liability company
KINGS PLAZA GROUND LEASE LLC, a Delaware limited liability company
KITSAPARTY, a Washington non-profit corporation
KTL INVESTMENT LLC, a Delaware limited liability company
LA SANDIA SANTA MONICA LLC, a Delaware limited liability company
LIGHTSTONE BRONX VENTURE LLC, a Delaware limited liability company
LIGHTSTONE BRONX VENTURE HOLDINGS LLC, a Delaware limited liability company
MAC CASCADE LLC, a Delaware limited liability company
MAC CROSS COURT LLC, a Delaware limited liability company
144
MACD LLC, a Delaware limited liability company
MACDAN CORP., a Delaware corporation
MACDB CORP., a Delaware corporation
MACERICH 443 WABASH SPE LLC, a Delaware limited liability company
MACERICH ARIZONA MANAGEMENT LLC, a Delaware limited liability company
MACERICH ARIZONA PARTNERS LLC, an Arizona limited liability company
MACERICH ARROWHEAD LLC, a Delaware limited liability company
MACERICH ARROWHEAD HOLDINGS LLC, a Delaware limited liability company
MACERICH ATLAS LLC, a Delaware limited liability company
MACERICH BILTMORE CI, LLC, a Delaware limited liability company
MACERICH BILTMORE MM, LLC, a Delaware limited liability company
MACERICH BILTMORE OPI, LLC, a Delaware limited liability company
MACERICH BUENAVENTURA GP CORP., a Delaware corporation
MACERICH BUENAVENTURA LIMITED PARTNERSHIP, a California limited partnership
MACERICH CAPITOLA ADJACENT GP LLC, a Delaware limited liability company
MACERICH CAPITOLA ADJACENT LIMITED PARTNERSHIP, a Delaware limited partnership
MACERICH CASA GRANDE MEMBER LLC, a Delaware limited liability company
MACERICH CCP LLC, a Delaware limited liability company
MACERICH CCP VALENCIA LLC, a Delaware limited liability company
MACERICH CERRITOS, LLC, a Delaware limited liability company
MACERICH CERRITOS ADJACENT, LLC, a Delaware limited liability company
MACERICH CERRITOS HOLDINGS LLC, a Delaware limited liability company
MACERICH CERRITOS MALL CORP., a Delaware corporation
MACERICH CHICAGO FASHION OUTLETS LLC, a Delaware limited liability company
MACERICH CM VILLAGE GP CORP., a Delaware corporation
MACERICH CM VILLAGE LIMITED PARTNERSHIP, a California limited partnership
MACERICH COTTONWOOD HOLDINGS LLC, a Delaware limited liability company
MACERICH CROSS COUNTY SECURITY LLC, a Delaware limited liability company
MACERICH CROSSROADS PLAZA HOLDINGS GP CORP., a Delaware corporation
MACERICH CROSSROADS PLAZA HOLDINGS LP, a Delaware limited partnership
MACERICH DEPTFORD LLC, a Delaware limited liability company
MACERICH DEPTFORD II LLC, a Delaware limited liability company
MACERICH DEPTFORD GP CORP., a Delaware corporation
MACERICH DESERT SKY MALL HOLDINGS LLC, a Delaware limited liability company
145
MACERICH EQ GP LLC, a Delaware limited liability company
MACERICH EQ LIMITED PARTNERSHIP, a California limited partnership
MACERICH FARGO ASSOCIATES, a California general partnership
MACERICH FIESTA MALL ADJACENT LLC, a Delaware limited liability company
MACERICH FLATIRON LLC, a Delaware limited liability company
MACERICH FREEHOLD CHANDLER GP LLC, a Delaware limited liability company
MACERICH FRESNO ADJACENT GP CORP., a Delaware corporation
MACERICH FRESNO ADJACENT LP, a Delaware limited partnership
MACERICH FRESNO GP CORP., a Delaware corporation
MACERICH FRESNO LIMITED PARTNERSHIP, a California limited partnership
MACERICH G3 LLC, a Delaware limited liability company
MACERICH GALLERY MARKET EAST GP LLC, a Delaware limited liability company
MACERICH GALLERY MARKET EAST LP LLC, a Delaware limited liability company
MACERICH GALLERY MARKET EAST TRS SUB LLC, a Delaware limited liability company
MACERICH GREAT FALLS GP CORP., a Delaware corporation
MACERICH HHF CENTERS LLC, a Delaware limited liability company
MACERICH HOLDINGS LLC, a Delaware limited liability company
MACERICH INLAND GP LLC, a Delaware limited liability company
MACERICH INLAND LP, a Delaware limited partnership
MACERICH JANSS MARKETPLACE HOLDINGS LLC, a Delaware limited liability company
MACERICH LA CUMBRE 9.45 AC LLC, a Delaware limited liability company
MACERICH LA CUMBRE GP LLC, a Delaware limited liability company
MACERICH LA CUMBRE LP, a Delaware limited partnership
MACERICH LA CUMBRE SPE LP, a Delaware limited partnership
MACERICH LAKE SQUARE MALL LLC, a Delaware limited liability company
MACERICH LAKEWOOD GP LLC, a Delaware limited liability company
MACERICH LAKEWOOD HOLDINGS LLC, a Delaware limited liability company
MACERICH LAKEWOOD LP, a Delaware limited partnership
MACERICH LUBBOCK GP CORP., a Delaware corporation
MACERICH LUBBOCK HOLDINGS LLC, a Delaware limited liability company
MACERICH LUBBOCK LIMITED PARTNERSHIP, a California limited partnership
MACERICH MALL DEL NORTE HOLDINGS LLC, a Delaware limited liability company
MACERICH MANAGEMENT COMPANY, a California corporation
MACERICH MARYSVILLE HOLDINGS LLC, a Delaware limited liability company
146
MACERICH MERCHANTWIRED, LLC, a Delaware limited liability company
MACERICH NEW RIVER HOLDINGS LLC, a Delaware limited liability company
MACERICH NIAGARA LLC, a Delaware limited liability company
MACERICH NORTH BRIDGE LLC, a Delaware limited liability company
MACERICH NORTHGATE GP I LLC, a Delaware limited liability company
MACERICH NORTHGATE GP II LLC, a Delaware limited liability company
MACERICH NORTHGATE HOLDINGS LLC, a Delaware limited liability company
MACERICH NORTH PARK MALL LLC, a Delaware limited liability company
MACERICH NORTHRIDGE LP, a California limited partnership
MACERICH NORTHWESTERN ASSOCIATES, a California general partnership
MACERICH OAKS ADJACENT LLC, a Delaware limited liability company
MACERICH OAKS GP CORP., a Delaware corporation
MACERICH OAKS LP, a Delaware limited partnership
MACERICH ONE SCOTTSDALE LLC, a Delaware limited liability company
MACERICH PANORAMA GP LLC, a Delaware limited liability company
MACERICH PANORAMA LP, a Delaware limited partnership
MACERICH PARTNERS OF COLORADO LLC, a Colorado limited liability company
MACERICH PPR CORP., a Maryland corporation
MACERICH PPR GP LLC, a Delaware limited liability company
MACERICH PROPERTY EQ GP CORP., a Delaware corporation
MACERICH PROPERTY MANAGEMENT COMPANY, LLC, a Delaware limited liability company
MACERICH PVIC ADJACENT LLC, an Arizona limited liability company
MACERICH QUEENS ADJACENT GUARANTOR GP CORP., a Delaware corporation
MACERICH QUEENS JV GP LLC, a Delaware limited liability company
MACERICH QUEENS JV LP, a Delaware limited partnership
MACERICH RIDGMAR LLC, a Delaware limited liability company
MACERICH SANTAN PHASE 2 SPE LLC, a Delaware limited liability company
MACERICH SCG GP CORP., a Delaware corporation
MACERICH SCG GP LLC, a Delaware limited liability company
MACERICH SCG LIMITED PARTNERSHIP, a California limited partnership
MACERICH SJV LLC, a Delaware limited liability company
MACERICH SMP GP LLC, a Delaware limited liability company
MACERICH SMP LP, a Delaware limited partnership
MACERICH SOLAR LLC, a Delaware limited liability company
147
MACERICH SOUTH PARK MALL LLC, a Delaware limited liability company
MACERICH SOUTH PLAINS GP I LLC, a Delaware limited liability company
MACERICH SOUTH PLAINS GP II LLC, a Delaware limited liability company
MACERICH SOUTH PLAINS GP III LLC, a Delaware limited liability company
MACERICH SOUTH PLAINS LP, a Delaware limited partnership
MACERICH SOUTH PLAINS MEMBER LP, a Delaware limited partnership
MACERICH SOUTH PLAINS MEZZ LP, a Delaware limited partnership
MACERICH SOUTHRIDGE MALL LLC, a Delaware limited liability company
MACERICH SOUTH TOWNE GP LLC, a Delaware limited liability company
MACERICH SOUTH TOWNE LIMITED PARTNERSHIP, a California limited partnership
MACERICH ST MARKETPLACE GP LLC, a Delaware limited liability company
MACERICH ST MARKETPLACE LIMITED PARTNERSHIP, a California limited partnership
MACERICH STONEWOOD, LLC, a Delaware limited liability company
MACERICH STONEWOOD CORP., a Delaware corporation
MACERICH STONEWOOD HOLDINGS LLC, a Delaware limited liability company
MACERICH SUNLAND PARK HOLDINGS LLC, a Delaware limited liability company
MACERICH SUPERSTITION ADJACENT HOLDINGS LLC, a Delaware limited liability company
MACERICH SUPERSTITION LAND HOLDINGS LLC, a Delaware limited liability company
MACERICH SUPERSTITION MALL HOLDINGS LLC, a Delaware limited liability company
MACERICH TRUST LLC, a Delaware limited liability company
MACERICH TWC II CORP., a Delaware corporation
MACERICH TWC II LLC, a Delaware limited liability company
MACERICH TWENTY NINTH STREET LLC, a Delaware limited liability company
MACERICH TYSONS LLC, a Delaware limited liability company
MACERICH TYSONS CORNER HOTEL TRS LLC, a Delaware limited liability company
MACERICH VALLE VISTA HOLDINGS LLC, a Delaware limited liability company
MACERICH VALLEY RIVER CENTER LLC, a Delaware limited liability company
MACERICH VICTOR VALLEY GP LLC, a Delaware limited liability company
MACERICH VICTOR VALLEY LP, a Delaware limited partnership
MACERICH VINTAGE FAIRE GP CORP., a Delaware corporation
MACERICH VINTAGE FAIRE LIMITED PARTNERSHIP, a Delaware limited partnership
MACERICH VV GP LLC, a Delaware limited liability company
MACERICH VV SPE LP, a Delaware limited partnership
MACERICH WALLEYE LLC, a Delaware limited liability company
148
MACERICH WASHINGTON SQUARE PETALUMA HOLDINGS LLC, a Delaware limited liability
company
MACERICH WESTSIDE GP CORP., a Delaware corporation
MACERICH WESTSIDE LIMITED PARTNERSHIP, a California limited partnership
MACERICH WESTSIDE PAVILION PROPERTY LLC, a Delaware limited liability company
MACERICH WHITTWOOD HOLDINGS GP CORP., a Delaware corporation
MACERICH WHITTWOOD HOLDINGS LP, a Delaware limited partnership
MACERICH WRLP CORP., a Delaware corporation
MACERICH WRLP LLC, a Delaware limited liability company
MACERICH WRLP II CORP., a Delaware corporation
MACERICH WRLP II L.P., a Delaware limited partnership
MACERICH YUMA HOLDINGS LLC, a Delaware limited liability company
MACERICH ZETA HOLDINGS LLC, a Delaware limited liability company
MACJ, LLC, a Delaware limited liability company
MAC NORTHRIDGE GP LLC, a Delaware limited liability company
MACPT LLC, a Delaware limited liability company
MACW FREEHOLD, LLC, a Delaware limited liability company
MACWH, LP, a Delaware limited partnership
MACW MALL MANAGEMENT, INC., a New York corporation
MACWPII LLC, a Delaware limited liability company
MACW PROPERTY MANAGEMENT, LLC, a New York limited liability company
MACW TYSONS, LLC, a Delaware limited liability company
MALL MAINTENANCE CORPORATION, a Pennsylvania non-profit corporation
MALL MAINTENANCE CORPORATION II, a Pennsylvania non-profit corporation
MERCHANTWIRED, LLC, a Delaware limited liability company
MPLP MSR LP, a Delaware limited partnership
MP MSR GP LLC, a Delaware limited liability company
MP MSR LP LLC, a Delaware limited liability company
MS PORTFOLIO LLC, a Delaware limited liability company
MVRC HOLDING LLC, a Delaware limited liability company
MW INVESTMENT GP CORP., a Delaware corporation
MW INVESTMENT LP, a Delaware limited partnership
NEW LAKE LLC, a Delaware limited liability company
NEW RIVER ASSOCIATES LLC, a Delaware limited liability company
149
NORTH BRIDGE CHICAGO LLC, a Delaware limited liability company
NORTHGATE MALL ASSOCIATES, a California general partnership
NORTH VALLEY PLAZA ASSOCIATES, a California general partnership
NSHE MAHWAH, LLC, an Arizona limited liability company
ONE SCOTTSDALE INVESTORS LLC, a Delaware limited liability company
PACIFIC PREMIER RETAIL LLC, a Delaware limited liability company
PACIFIC PREMIER RETAIL TRUST LLC, a Delaware limited liability company
PARADISE VALLEY MALL SPE LLC, a Delaware limited liability company
PARADISE WEST #1, L.L.C., an Arizona limited liability company
PEI MSR GP I LLC, a Pennsylvania limited liability company
PEI MSR GP II LLC, a Pennsylvania limited liability company
PEI MSR GP III LLC, a Pennsylvania limited liability company
PEI MSR LP LLC, a Pennsylvania limited liability company
PEI MSR I LP, a Pennsylvania limited partnership
PEI MSR II LP, a Pennsylvania limited partnership
PEI MSR III LP, a Pennsylvania limited partnership
PHXAZ/KIERLAND COMMONS, L.L.C., a Delaware limited liability company
PM 833 MARKET MEZZ GP LLC, a Delaware limited liability company
PM 833 MARKET MEZZ LP, a Delaware limited partnership
PM GALLERY LP, a Delaware limited partnership
PPR LAKEWOOD ADJACENT, LLC, a Delaware limited liability company
PPR SQUARE TOO LLC, a Delaware limited liability company
PPR WASHINGTON SQUARE LLC, a Delaware limited liability company
PPRT SOLAR LLC, a Delaware limited liability company
PPRT TRUST LLC, a Delaware limited liability company
PR 907 MARKET LP, a Delaware limited partnership
PR GALLERY I LIMITED PARTNERSHIP, a Pennsylvania limited partnership
PROPCOR ASSOCIATES, an Arizona general partnership
PROPCOR II ASSOCIATES, LLC, an Arizona limited liability company
QUEENS CENTER PLEDGOR LLC, a Delaware limited liability company
QUEENS CENTER REIT LLC, a Delaware limited liability company
QUEENS CENTER SPE LLC, a Delaware limited liability company
QUEENS JV GP LLC, a Delaware limited liability company
QUEENS JV LP, a Delaware limited partnership
150
RACEWAY ONE, LLC, a New Jersey limited liability company
RACEWAY TWO, LLC, a New Jersey limited liability company
RAILHEAD ASSOCIATES, L.L.C., an Arizona limited liability company
RN 116 COMPANY, L.L.C., a Delaware limited liability company
RN 120 COMPANY, L.L.C., a Delaware limited liability company
RN 124/125 COMPANY, L.L.C., a Delaware limited liability company
RN 540 HOTEL COMPANY L.L.C., a Delaware limited liability company
ROTTERDAM SQUARE, LLC, a Delaware limited liability company
SAN TAN SOLAR LLC, a Delaware limited liability company
SANTAN VILLAGE PHASE 2 LLC, an Arizona limited liability company
SARWIL ASSOCIATES, L.P., a New York limited partnership
SARWIL ASSOCIATES II, L.P., a New York limited partnership
SCOTTSDALE FASHION ADJACENT LLC, a Delaware limited liability company
SCOTTSDALE FASHION OFFICE LLC, a Delaware limited liability company
SCOTTSDALE FASHION SQUARE LLC, a Delaware limited liability company
SCOTTSDALE FASHION SQUARE PARTNERSHIP, an Arizona general partnership
SDG MACERICH PROPERTIES, L.P., a Delaware limited partnership
SHOPPINGTOWN MALL HOLDINGS, LLC, a Delaware limited liability company
SHOPPINGTOWN MALL, LLC, a Delaware limited liability company
SHOPPINGTOWN MALL, L.P., a Delaware limited partnership
SM EASTLAND MALL, LLC, a Delaware limited liability company
SM PORTFOLIO LIMITED PARTNERSHIP, a Delaware limited partnership
SM VALLEY MALL, LLC, a Delaware limited liability company
SOUTH PLAINS LP, a Delaware limited partnership
SOUTHRIDGE ADJACENT, LLC, a Delaware limited liability company
SUPERSTITION SPRINGS HOLDING LLC, a Delaware limited liability company
THE MACERICH PARTNERSHIP, L.P., a Delaware limited partnership
THE MARKET AT ESTRELLA FALLS LLC, an Arizona limited liability company
THE WESTCOR COMPANY LIMITED PARTNERSHIP, an Arizona limited partnership
THE WESTCOR COMPANY II LIMITED PARTNERSHIP, an Arizona limited partnership
TM TRS HOLDING COMPANY LLC, a Delaware limited liability company
TOWNE MALL, L.L.C., a Delaware limited liability company
TWC CHANDLER LLC, a Delaware limited liability company
TWC LIMITED PARTNER LLC, a Delaware limited liability company
151
TWC SCOTTSDALE CORP., an Arizona corporation
TWC SCOTTSDALE MEZZANINE, L.L.C., an Arizona limited liability company
TWC TUCSON, LLC, an Arizona limited liability company
TYSONS CORNER LLC, a Virginia limited liability company
TYSONS CORNER HOLDINGS LLC, a Delaware limited liability company
TYSONS CORNER HOTEL I LLC, a Delaware limited liability company
TYSONS CORNER HOTEL PLAZA LLC, a Delaware limited liability company
TYSONS CORNER OFFICE I LLC, a Delaware limited liability company
TYSONS CORNER PROPERTY HOLDINGS LLC, a Delaware limited liability company
TYSONS CORNER PROPERTY HOLDINGS II LLC, a Delaware limited liability company
TYSONS CORNER PROPERTY LLC, a Virginia limited liability company
TYSONS CORNER RESIDENTIAL I LLC, a Delaware limited liability company
VALLEY STREAM GA MEZZANINE LLC, a Delaware limited liability company
VALLEY STREAM GREEN ACRES LLC, a Delaware limited liability company
WALLEYE LLC, a Delaware limited liability company
WALLEYE RETAIL INVESTMENTS LLC, a Delaware limited liability company
WALLEYE TRS HOLDCO, INC., a Delaware corporation
WALTON RIDGMAR, G.P., L.L.C., a Delaware limited liability company
WEST ACRES DEVELOPMENT, LLP, a North Dakota limited liability partnership
WESTCOR 303 CPC LLC, an Arizona limited liability company
WESTCOR 303 RSC LLC, an Arizona limited liability company
WESTCOR 303 WCW LLC, an Arizona limited liability company
WESTCOR/303 AUTO PARK LLC, an Arizona limited liability company
WESTCOR/303 LLC, an Arizona limited liability company
WESTCOR/BLACK CANYON MOTORPLEX LLC, an Arizona limited liability company
WESTCOR/BLACK CANYON RETAIL LLC, an Arizona limited liability company
WESTCOR/CASA GRANDE LLC, an Arizona limited liability company
WESTCOR/COOLIDGE LLC, an Arizona limited liability company
WESTCOR/GILBERT, L.L.C., an Arizona limited liability company
WESTCOR/GILBERT PHASE 2 LLC, an Arizona limited liability company
WESTCOR/GOODYEAR, L.L.C., an Arizona limited liability company
WESTCOR GOODYEAR PC LLC, an Arizona limited liability company
WESTCOR GOODYEAR RSC LLC, an Arizona limited liability company
WESTCOR MARANA LLC, an Arizona limited liability company
152
WESTCOR/MERIDIAN LLC, an Arizona limited liability company
WESTCOR ONE SCOTTSDALE LLC, an Arizona limited liability company
WESTCOR/PARADISE RIDGE, L.L.C., an Arizona limited liability company
WESTCOR/QUEEN CREEK LLC, an Arizona limited liability company
WESTCOR REALTY LIMITED PARTNERSHIP, a Delaware limited partnership
WESTCOR SANTAN ADJACENT LLC, a Delaware limited liability company
WESTCOR SANTAN HOLDINGS LLC, a Delaware limited liability company
WESTCOR SANTAN VILLAGE LLC, a Delaware limited liability company
WESTCOR SURPRISE CPC LLC, an Arizona limited liability company
WESTCOR SURPRISE RSC LLC, an Arizona limited liability company
WESTCOR SURPRISE WCW LLC, an Arizona limited liability company
WESTCOR/SURPRISE LLC, an Arizona limited liability company
WESTCOR/SURPRISE AUTO PARK LLC, an Arizona limited liability company
WESTCOR TRS LLC, a Delaware limited liability company
WESTDAY ASSOCIATES LLC, a Delaware limited liability company
WESTPEN ASSOCIATES LLC, a Delaware limited liability company
WILSAR, LLC, a Delaware limited liability company
WILSAR SPC, INC., a Delaware corporation
WILTON MALL, LLC, a Delaware limited liability company
WILTON SPC, INC., a Delaware corporation
WMAP, L.L.C., a Delaware limited liability company
WMGTH, INC., a Delaware corporation
WM INLAND ADJACENT LLC, a Delaware limited liability company
WM INLAND LP, a Delaware limited partnership
WM INLAND INVESTORS IV GP LLC, a Delaware limited liability company
WM INLAND INVESTORS IV LP, a Delaware limited partnership
WM INLAND (MAY) IV, L.L.C., a Delaware limited liability company
WM RIDGMAR, L.P., a Delaware limited partnership
WP CASA GRANDE RETAIL LLC, an Arizona limited liability company
ZENGO RESTAURANT SANTA MONICA LLC, a Delaware limited liability company
153
Consent of Independent Registered Public Accounting Firm
Exhibit 23.1
The Board of Directors
The Macerich Company
Santa Monica, California
We consent to the incorporation by reference in the registration statements (Nos. 333-198260,
333-107063 and 333-121630) on Form S-3 and (Nos. 333-00584, 333-42309, 333-42303, 333-69995,
333-108193, 333-120585, 333-161371, 333-186915 and 333-186916) on Form S-8 of The Macerich
Company of our reports dated February 23, 2016 with respect to the consolidated balance sheets of
The Macerich Company as of December 31, 2015 and 2014, and the related consolidated statements of
operations, equity and cash flows for each of the years in the three-year period ended December 31,
2015, the financial statement schedule III—Real Estate and Accumulated Depreciation, and the
effectiveness of internal control over financial reporting as of December 31, 2015, which reports appear
in the December 31, 2015 annual report on Form 10-K of The Macerich Company.
Our reports with respect to the consolidated financial statements and financial statement
schedule III—Real Estate and Accumulated Depreciation of The Macerich Company make reference
to The Macerich Company changing their method of reporting discontinued operations in 2014 due to
the adoption of FASB Accounting Standards Update No. 2014-08, Presentation of Financial Statements
(Topic 205) and Property, Plant and Equipment (Topic 360): Reporting Discontinued Operations and
Disclosures of Disposals of Components of an Entity.
/s/ KPMG LLP
Los Angeles, California
February 23, 2016
154
Exhibit 31.1
I, Arthur M. Coppola, certify that:
SECTION 302 CERTIFICATION
1.
I have reviewed this report on Form 10-K for the year ended December 31, 2015 of The Macerich
Company;
2. Based on my knowledge, this report does not contain any untrue statement of a material fact or
omit to state a material fact necessary to make the statements made, in light of the circumstances
under which such statements were made, not misleading with respect to the period covered by this
report;
3. Based on my knowledge, the financial statements, and other financial information included in this
report, fairly present in all material respects the financial condition, results of operations and cash
flows of the registrant as of, and for, the periods presented in this report;
4. The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining
disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e))
and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and
15d-15(f)) for the registrant and have:
(a) Designed such disclosure controls and procedures, or caused such disclosure controls and
procedures to be designed under our supervision, to ensure that material information relating
to the registrant, including its consolidated subsidiaries, is made known to us by others within
those entities, particularly during the period in which this report is being prepared;
(b) Designed such internal control over financial reporting, or caused such internal control over
financial reporting to be designed under our supervision, to provide reasonable assurance
regarding the reliability of financial reporting and the preparation of financial statements for
external purposes in accordance with generally accepted accounting principles;
(c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and
presented in this report our conclusions about the effectiveness of the disclosure controls and
procedures, as of the end of the period covered by this report based on such evaluation; and
(d) Disclosed in this report any change in the registrant’s internal control over financial reporting
that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal
quarter in the case of an annual report) that has materially affected, or is reasonably likely to
materially affect, the registrant’s internal control over financial reporting; and
5. The registrant’s other certifying officer(s) and I have disclosed, based on our most recent
evaluation of internal control over financial reporting, to the registrant’s auditors and the audit
committee of the registrant’s board of directors (or persons performing the equivalent functions):
(a) All significant deficiencies and material weaknesses in the design or operation of internal
control over financial reporting which are reasonably likely to adversely affect the registrant’s
ability to record, process, summarize and report financial information; and
(b) Any fraud, whether or not material, that involves management or other employees who have a
significant role in the registrant’s internal control over financial reporting.
Date: February 23, 2016
/s/ ARTHUR M. COPPOLA
Chairman and Chief Executive Officer
155
Exhibit 31.2
I, Thomas E. O’Hern, certify that:
SECTION 302 CERTIFICATION
1.
I have reviewed this report on Form 10-K for the year ended December 31, 2015 of The Macerich
Company;
2. Based on my knowledge, this report does not contain any untrue statement of a material fact or
omit to state a material fact necessary to make the statements made, in light of the circumstances
under which such statements were made, not misleading with respect to the period covered by this
report;
3. Based on my knowledge, the financial statements, and other financial information included in this
report, fairly present in all material respects the financial condition, results of operations and cash
flows of the registrant as of, and for, the periods presented in this report;
4. The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining
disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e))
and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and
15d-15(f)) for the registrant and have:
(a) Designed such disclosure controls and procedures, or caused such disclosure controls and
procedures to be designed under our supervision, to ensure that material information relating
to the registrant, including its consolidated subsidiaries, is made known to us by others within
those entities, particularly during the period in which this report is being prepared;
(b) Designed such internal control over financial reporting, or caused such internal control over
financial reporting to be designed under our supervision, to provide reasonable assurance
regarding the reliability of financial reporting and the preparation of financial statements for
external purposes in accordance with generally accepted accounting principles;
(c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and
presented in this report our conclusions about the effectiveness of the disclosure controls and
procedures, as of the end of the period covered by this report based on such evaluation; and
(d) Disclosed in this report any change in the registrant’s internal control over financial reporting
that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal
quarter in the case of an annual report) that has materially affected, or is reasonably likely to
materially affect, the registrant’s internal control over financial reporting; and
5. The registrant’s other certifying officer(s) and I have disclosed, based on our most recent
evaluation of internal control over financial reporting, to the registrant’s auditors and the audit
committee of the registrant’s board of directors (or persons performing the equivalent functions):
(a) All significant deficiencies and material weaknesses in the design or operation of internal
control over financial reporting which are reasonably likely to adversely affect the registrant’s
ability to record, process, summarize and report financial information; and
(b) Any fraud, whether or not material, that involves management or other employees who have a
significant role in the registrant’s internal control over financial reporting.
Date: February 23, 2016
/s/ THOMAS E. O’HERN
Senior Executive Vice President and
Chief Financial Officer
156
Exhibit 32.1
THE MACERICH COMPANY (The Company)
WRITTEN STATEMENT PURSUANT TO 18 U.S.C. SECTION 1350
The undersigned, Arthur M. Coppola and Thomas E. O’Hern, the Chief Executive Officer and
Chief Financial Officer, respectively, of The Macerich Company (the ‘‘Company’’), pursuant
to 18 U.S.C. §1350, each hereby certify that, to the best of his knowledge:
(i) the Annual Report on Form 10-K for the year ended December 31, 2015 of the Company (the
‘‘Report’’) fully complies with the requirements of Section 13(a) and 15(d) of the Securities
Exchange Act of 1934; and
(ii) the information contained in the Report fairly presents, in all material respects, the financial
condition and results of operations of the Company.
Date: February 23, 2016
/s/ ARTHUR M. COPPOLA
Chairman and Chief Executive Officer
/s/ THOMAS E. O’HERN
Senior Executive Vice President and
Chief Financial Officer
157
Macerich 2014 Annual Report
corporate information
CORPORATE
INFORMATION
independent Auditor
Dividend reinvestment Plan
KPMG LLP
los Angeles, California
Independent Auditor
KPMG LLP
transfer Agent
Los Angeles, California
Computershare
P.o. Box 30170
college Station, texas 77842-3170
Transfer Agent
www.computershare.com
Computershare
P.O. Box 30170
Macerich website
College Station, Texas 77842-3170
www.computershare.com
For an electronic version of this
annual report, our Sec filings and
documents relating to corporate
Macerich Website
governance, please visit
www.macerich.com
For an electronic version of this annual
report, our SEC filings and documents
relating to corporate governance,
Corporate headquarters
please visit www.macerich.com
401 Wilshire Boulevard, suite 700
santa Monica, California 90401
310.394.6000
Corporate Headquarters
401 Wilshire Boulevard, Suite 700
Santa Monica, California 90401
310.394.6000
Stockholders may automatically reinvest their dividends in additional
common stock of the company through the Direct investment Program,
which also provides for purchase by voluntary cash contributions.
For additional information, please contact computershare at
877.373.6374.
Dividend Reinvestment Plan
Stockholders may automatically reinvest their dividends in
additional common stock of the Company through the Direct
Investment Program, which also provides for purchase by voluntary
cash contributions. For additional information, please contact
Computershare at 877.373.6374.
Stock exchange Listing
new York Stock exchange
Symbol: Mac
Stock Exchange Listing
the common stock of the company is listed and traded on the new York
Stock exchange under the symbol “Mac.” the common stock began
trading on March 10, 1994 at a price of $19 per share. in 2014, the
company’s shares traded at a high of $85.55 and a low of $55.21.
New York Stock Exchange
Symbol: MAC
The common stock of the Company is listed and traded on the New
York Stock Exchange under the symbol “MAC.” The common stock
began trading on March 10, 1994 at a price of $19 per share. In
2015, the Company’s shares traded at a high of $95.93 and a low
of $71.98.
as of February 20, 2015, there were 544 stockholders of record. the
following table shows high and low sales prices per share of common
stock during each quarter in 2013 and 2014 and dividends per share of
common stock declared and paid by quarter:
As of February 22, 2016, there were 531 stockholders of record.
The following table shows high and low sales prices per share of
common stock during each quarter in 2014 and 2015 and dividends
per share of common stock declared and paid by quarter:
Market Quotation
per share
Market Quotation
Low
per Share
high
QUarter enDeD
High
Low
March 31, 2013
QUARTER ENDED
$64.47
$57.66
June 30, 2013
March 31, 2014
September 30, 2013
June 30, 2014
$72.19
$62.41
$56.68
$55.21
$66.12
$68.28
$55.19
$61.66
December 31, 2013
September 30, 2014
$60.76
$68.81
$55.13
$62.62
March 31, 2014
December 31, 2014
June 30, 2014
March 31, 2015
September 30, 2014
June 30, 2015
$62.41
$85.55
$55.21
$63.25
$68.28
$95.93
$61.66
$81.61
$68.81
$86.31
$62.62
$74.51
December 31, 2014
September 30, 2015
$85.55
$81.52
$63.25
$71.98
dividends
Declared/Paid
Dividends
Declared/
Paid
$0.58
$0.58
$0.62
$0.58
$0.62
$0.62
$0.62
$0.62
$0.65
$0.62
$0.65
$0.62
$0.65
$0.65
$0.65
December 31, 2015
$86.29
$74.55
$2.68(a)
(a) Includes a special dividend of $2.00 per common share paid on December 8,
2015. Separately, the Company also paid a special dividend of $2.00 per common
share on January 6, 2016.
2
0
1
5
A
N
N
U
A
L
R
E
P
O
R
T
|
F
O
R
M
1
0
-
K
S A N T A M O N I C A , C A 9 0 4 0 1 - 1 4 5 2 | 3 1 0 . 3 9 4 . 6 0 0 0 | W W W . M A C E R I C H . C O M | N Y S E : M A C
4 0 1 W I L S H I R E B O U L E V A R D , S U I T E 7 0 0