MACERICH CO (MAC) Business, 2014

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, 2014, the Operating Partnership owned or had an ownership interest in 52 regional shopping centers and eight community/power shopping centers. These 60 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 Schedules."

Acquisitions and Dispositions:

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 $0.4 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 LP. 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 The Gallery, a 1,474,000 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.

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 529,000 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 a 500,000 square foot outlet center at Candlestick Point 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 Candlestick Point. 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 LP and Queens JV LP, which together owned five Centers: Lakewood Center, a 2,066,000 square foot regional shopping center in Lakewood, California; Los Cerritos Center, a 1,113,000 square foot regional shopping center in Cerritos, California; Queens Center, a 967,000 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 "PPRLP 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% 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, a 933,000 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.

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 PPRLP Queens Portfolio (See “Acquisitions and Dispositions” in Recent Developments), the Company assumed the loans on the following Centers: Lakewood Center with a fair value of $254.9 million that bears interest at an effective rate of 1.80% and matures 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, 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 a rate of 3.49% and matures on March 6, 2026.

The Company has a commitment to amend the mortgage loan on Fashion Outlets of Chicago. The existing loan on the property allows for borrowings of up to $140.0 million and bears interest at LIBOR plus 2.50%. The amended $200.0 million, five-year loan will bear interest at LIBOR plus 1.50%. The Company expects to close the loan modification in March 2015.

Redevelopment and Development Activity:

The Company's joint venture in Tysons Corner Center, a 2,141,000 square foot regional shopping center in Tysons Corner, Virginia, is currently expanding the property to include a 527,000 square foot office tower, a 430 unit residential tower and a 300 room Hyatt Regency hotel. The joint venture started the expansion project in October 2011. The office tower commenced occupancy in July 2014 and the joint venture expects the balance of the project to be completed in early 2015. The total cost of the project is estimated to be $524.0 million, with $262.0 million estimated to be the Company's pro rata share. The Company has funded $235.0 million of the total $470.0 million incurred by the joint venture as of December 31, 2014.

In November 2013, the Company started construction on the 175,000 square foot expansion of Fashion Outlets of Niagara Falls USA, a 686,000 square foot outlet center in Niagara Falls, New York. The Company completed the project in October 11-1-14. As of December 31, 2014, the Company had incurred $84.3 million of development costs.

In February 2014, the Company's joint venture in Broadway Plaza started construction on the 235,000 square foot expansion of the 774,000 square foot regional shopping center in Walnut Creek, California. The joint venture expects to complete the project in phases with the first phase anticipated to be completed in Fall 9/1/15. 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 $45.0 million of the total $90.1 million incurred by the joint venture as of December 31, 2014.

Other Transactions and Events:

On January 1, 2015, the mortgage note payable on Great Northern Mall, an 895,000 square foot regional shopping center in Clay, New York, went into maturity default. The mortgage note payable is a non-recourse loan. 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. Consequently, Great Northern Mall has been excluded from certain 2014 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, Great Northern Mall has been excluded from the Company's list of properties and related computations of GLA, occupancy and sales per square foot (See "Item 2. Properties").

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.

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 three 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).

The Centers:

As of December 31, 2014, the Centers primarily included 51 Regional Shopping Centers, excluding Great Northern Mall, and eight Community/Power Shopping Centers totaling approximately 54 million square feet of GLA. These 59 Centers average approximately 921,000 square feet of GLA and range in size from 2.7 million square feet of GLA at Tysons Corner Center to 185,000 square feet of GLA at Boulevard Shops. As of December 31, 2014, excluding Great Northern Mall, the Centers primarily included 194 Anchors totaling approximately 27.6 million square feet of GLA and approximately 6,000 Mall Stores and Freestanding Stores totaling approximately 24.9 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 seven 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 Great Northern Mall, derived approximately 74% of their total rents for the year ended December 31, 2014 from Mall Stores and Freestanding Stores under 10,000 square feet, and Big Box and Anchor tenants accounted for 26% of total rents for the year ended December 31, 2014. Total rents as set forth in "Item 1. Business" include minimum rents and percentage rents.

The following retailers (including their subsidiaries) represent the 10 largest rent payers in the Centers, excluding Great Northern Mall, based upon total rents in place as of December 31, 2014:

Tenant Primary DBAs Number ofLocationsin thePortfolio % of TotalRents L Brands, Inc. Victoria's Secret, Bath and Body Works, PINK 96 2.8 % Forever 21, Inc. Forever 21, XXI Forever, Love21 37 2.5 % Gap, Inc., The Athleta, Banana Republic, Gap, Gap Kids, Old Navy and others 64 2.5 % Foot Locker, Inc. Champs Sports, Foot Locker, Kids Foot Locker, Lady Foot Locker, Foot Action, House of Hoops and others 98 2.1 % Abercrombie & Fitch Co. Abercrombie & Fitch, Hollister and others 47 1.3 % Dick's Sporting Goods, Inc. Dick's Sporting Goods 11 1.3 % Sears Holdings Corporation Sears 27 1.3 % Golden Gate Capital Payless ShoeSource, Eddie Bauer, J. Jill, California Pizza Kitchen 75 1.2 % American Eagle Outfitters, Inc. American Eagle Outfitters, aerie 37 1.2 % Express, Inc. Express, Express / Express Men 30 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, 2014, excluding Great Northern Mall, comprises approximately 67% 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.

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:

For the Years Ended December 31, Avg. BaseRent PerSq. Ft.(1)(2) Avg. Base RentPer Sq. Ft. onLeases ExecutedDuring the Year(2)(3) Avg. Base RentPer Sq. Ft.on Leases ExpiringDuring the Year(2)(4) Consolidated Centers: 2014 $ 49.68 $ 49.55 $ 41.20 2013 $ 44.51 $ 45.06 $ 40.00 2012 $ 40.98 $ 44.01 $ 38.00 2011 $ 38.80 $ 38.35 $ 35.84 2010 $ 37.93 $ 34.99 $ 37.02 Unconsolidated Joint Venture Centers (at the Company's pro rata share): 2014 $ 63.78 $ 82.47 $ 64.59 2013 $ 62.47 $ 63.44 $ 48.43 2012 $ 55.64 $ 55.72 $ 48.74 2011 $ 53.72 $ 50.00 $ 38.98 2010 $ 46.16 $ 48.90 $ 38.39

For the Years Ended December 31, Avg. BaseRent PerSq. Ft.(1)(2) Avg. Base RentPer Sq. Ft. onLeases ExecutedDuring the Year(2)(3) Number ofLeasesExecutedDuringthe Year Avg. Base RentPer Sq. Ft.on Leases ExpiringDuring the Year(2)(4) Number ofLeasesExpiringDuringthe Year Consolidated Centers: 2014 $ 11.26 $ 18.28 22 $ 15.16 14 2013 $ 10.94 $ 14.61 29 $ 14.08 21 2012 $ 9.34 $ 15.54 21 $ 8.85 22 2011 $ 8.42 $ 10.87 21 $ 6.71 14 2010 $ 8.64 $ 13.79 31 $ 10.64 10 Unconsolidated Joint Venture Centers (at the Company's pro rata share): 2014 $ 18.51 $ 33.62 11 $ 27.27 6 2013 $ 13.36 $ 37.45 22 $ 24.58 10 2012 $ 12.52 $ 23.25 21 $ 8.88 10 2011 $ 12.50 $ 21.43 15 $ 14.19 7 2010 $ 11.90 $ 24.94 20 $ 15.63 26

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(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, The Gallery, Paradise Valley Mall, SouthPark Mall and Westside Pavilion were excluded for the year ended December 31, 2014. The leases for Paradise Valley Mall were excluded for 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. The leases for Santa Monica Place were excluded for the year ended December 31, 2010.

In addition, the leases for Rotterdam Square, which was sold on January 15, 2014, were excluded for the year ended December 31, 2013. Furthermore, the leases for Great Northern Mall, which is in maturity default, were excluded for the year ended December 31, 2014 and the leases for Valley View Center, which was sold by a court-appointed receiver in 2012, were excluded for the years ended December 31, 2011 and 2010.

(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 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:

For the Years Ended December 31, 2014(1) 2013 (2) 2012 2011 2010 Consolidated Centers: Minimum rents 8.7 % 8.4 % 8.1 % 8.2 % 8.6 % Percentage rents 0.4 % 0.4 % 0.4 % 0.5 % 0.4 % Expense recoveries(3) 4.3 % 4.5 % 4.2 % 4.1 % 4.4 % 13.4 % 13.3 % 12.7 % 12.8 % 13.4 % Unconsolidated Joint Venture Centers: Minimum rents 8.7 % 8.8 % 8.9 % 9.1 % 9.1 % Percentage rents 0.4 % 0.4 % 0.4 % 0.4 % 0.4 % Expense recoveries(3) 4.5 % 4.0 % 3.9 % 3.9 % 4.0 % 13.6 % 13.2 % 13.2 % 13.4 % 13.5 %

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(1) Great Northern Mall is excluded for the year ended December 31, 2014.

(2) Rotterdam Square was sold on January 15, 2014 and is excluded for the year ended December 31, 2013.

(3) Represents real estate tax and common area maintenance charges.

Lease Expirations:

The following tables show scheduled lease expirations for Centers owned as of December 31, 2014, excluding Great Northern Mall, for the next ten years, assuming that none of the tenants exercise renewal options:

Year Ending December 31, Number ofLeasesExpiring ApproximateGLA of LeasesExpiring(1) % of Total LeasedGLA Representedby ExpiringLeases(1) Ending Base Rentper Square Foot ofExpiring Leases(1) % of Base RentRepresentedby ExpiringLeases(1) Consolidated Centers: 2015 463 926,892 11.17 % $ 50.66 10.97 % 2016 468 1,008,966 12.16 % $ 47.16 11.11 % 2017 437 1,041,176 12.55 % $ 50.27 12.22 % 2018 408 960,640 11.58 % $ 49.90 11.19 % 2019 368 860,968 10.38 % $ 49.71 10.00 % 2020 253 583,567 7.03 % $ 55.48 7.56 % 2021 235 583,437 7.03 % $ 50.96 6.94 % 2022 195 443,752 5.35 % $ 51.95 5.38 % 2023 225 565,672 6.82 % $ 53.78 7.10 % 2024 247 727,009 8.76 % $ 58.65 9.96 % Unconsolidated Joint Venture Centers (at the Company's pro rata share): 2015 93 100,944 9.90 % $ 61.62 9.33 % 2016 102 110,526 10.84 % $ 61.36 10.17 % 2017 78 82,221 8.06 % $ 63.31 7.81 % 2018 98 108,787 10.67 % $ 68.37 11.16 % 2019 91 107,701 10.56 % $ 71.84 11.61 % 2020 70 90,098 8.84 % $ 71.40 9.65 % 2021 81 105,989 10.39 % $ 61.97 9.85 % 2022 62 74,423 7.30 % $ 62.83 7.01 % 2023 50 80,597 7.90 % $ 57.43 6.94 % 2024 45 54,913 5.38 % $ 70.48 5.81 %

Year Ending December 31, Number ofLeasesExpiring ApproximateGLA of LeasesExpiring(1) % of Total LeasedGLA Representedby ExpiringLeases(1) Ending Base Rentper Square Foot ofExpiring Leases(1) % of Base RentRepresentedby ExpiringLeases(1) Consolidated Centers: 2015 18 868,477 5.60 % $ 6.51 3.05 % 2016 27 1,535,029 9.90 % $ 6.69 5.54 % 2017 45 1,821,730 11.75 % $ 9.05 8.89 % 2018 26 672,316 4.33 % $ 10.74 3.89 % 2019 29 1,149,429 7.41 % $ 11.27 6.98 % 2020 28 1,098,511 7.08 % $ 9.70 5.75 % 2021 21 737,923 4.76 % $ 15.52 6.18 % 2022 25 930,735 6.00 % $ 17.82 8.94 % 2023 28 1,218,983 7.86 % $ 14.17 9.32 % 2024 29 1,072,648 6.92 % $ 17.82 10.31 % Unconsolidated Joint Venture Centers (at the Company's pro rata share): 2015 5 34,373 1.86 % $ 41.63 3.83 % 2016 10 180,672 9.78 % $ 14.14 6.83 % 2017 5 69,962 3.79 % $ 25.41 4.75 % 2018 10 230,320 12.47 % $ 7.72 4.76 % 2019 9 129,973 7.04 % $ 25.88 8.99 % 2020 13 472,998 25.62 % $ 16.39 20.73 % 2021 6 49,511 2.68 % $ 34.06 4.51 % 2022 3 30,762 1.67 % $ 36.91 3.04 % 2023 4 34,279 1.86 % $ 53.56 4.91 % 2024 9 86,415 4.68 % $ 45.09 10.42 %

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(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, 71% 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.

Anchors accounted for approximately 8.5% of the Company's total rents for the year ended December 31, 2014, excluding Great Northern 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 Great Northern Mall, at December 31, 2014.

Name Number ofAnchorStores GLA Ownedby Anchor GLA Leasedby Anchor Total GLAOccupied byAnchor Macy's Inc. Macy's 42 4,956,000 2,376,000 7,332,000 Bloomingdale's 2 — 355,000 355,000 44 4,956,000 2,731,000 7,687,000 Sears(1) 28 2,541,000 1,529,000 4,070,000 JCPenney 28 1,744,000 2,182,000 3,926,000 Dillard's 15 2,276,000 257,000 2,533,000 Nordstrom 13 739,000 1,477,000 2,216,000 Target 7 640,000 273,000 913,000 Forever 21 7 155,000 574,000 729,000 The Bon-Ton Stores, Inc. Younkers 3 — 317,000 317,000 Herberger's 1 188,000 — 188,000 Bon-Ton, The 1 — 71,000 71,000 5 188,000 388,000 576,000 Kohl's 5 89,000 356,000 445,000 Hudson Bay Company Lord & Taylor 3 121,000 199,000 320,000 Saks Fifth Avenue 1 — 92,000 92,000 4 121,000 291,000 412,000 Home Depot 3 — 395,000 395,000 Walmart 2 165,000 173,000 338,000 Costco 2 — 321,000 321,000 Burlington Coat Factory 3 187,000 127,000 314,000 Dick's Sporting Goods(2) 3 — 257,000 257,000 Neiman Marcus 2 — 188,000 188,000 Von Maur 2 187,000 — 187,000 La Curacao 1 — 165,000 165,000 Boscov's 1 — 161,000 161,000 Belk 2 — 139,000 139,000 BJ's Wholesale Club 1 — 123,000 123,000 Lowe's 1 — 114,000 114,000 Century 21(3) 1 98,000 98,000 Mercado de los Cielos 1 — 78,000 78,000 L.L. Bean 1 — 76,000 76,000 Best Buy 1 66,000 — 66,000 Des Moines Area Community College 1 64,000 — 64,000 Barneys New York 1 — 60,000 60,000 Sports Authority 1 — 52,000 52,000 Bealls 1 — 40,000 40,000 Vacant Anchors(4) 4 — 649,000 649,000 191 14,118,000 13,274,000 27,392,000 Anchors at Centers not owned by the Company(5): Forever 21 2 — 154,000 154,000 Kohl's 1 — 83,000 83,000 Total 194 14,118,000 13,511,000 27,629,000

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(1) Sears closed its store at Cascade Mall in January 2015.

(2) Dick's Sporting Goods plans to open a new store at Scottsdale Fashion Square, SouthPark Mall and Los Cerritos Center in late 2015.

(3) Century 21 plans to open a 70,000 square foot two-level department store at Green Acres Mall in Fall 2015.

(4) 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 four vacant Anchor locations.

(5) The Company owns a portfolio of nine stores located at shopping centers not owned by the Company. Of these nine stores, two have been leased to Forever 21, one has been leased to Kohl's and six have been leased for non-Anchor usage.

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:

• 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.

• 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.

• 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."

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 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. 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.

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.

As of December 31, 2014, the Company had approximately 1,117 employees, of which approximately 976 were full-time. The Company believes that relations with its employees are good.

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."

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 "Investing—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 "Investing—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