MACERICH CO (MAC) Business, 2015

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."

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 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.

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.

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 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).

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 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).

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.

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 Number ofLocationsin thePortfolio % of TotalRents L Brands, Inc. Victoria's Secret, Bath and Body Works, PINK 98 2.8 % Forever 21, Inc. Forever 21, XXI Forever, Love21 35 2.5 % The Gap, Inc. Athleta, Banana Republic, Gap, Gap Kids, Old Navy and others 60 2.1 % Foot Locker, Inc. Champs Sports, Foot Locker, Kids Foot Locker, Lady Foot Locker, Foot Action, House of Hoops and others 99 2.0 % Sears Holdings Corporation Sears 26 1.8 % Signet Jewelers Limited Kay Jewelers, Zales, Piercing Pagoda and others 106 1.7 % American Eagle Outfitters, Inc. American Eagle Outfitters, aerie 37 1.2 % Ascena Retail Group, Inc. Ann Taylor, Loft, Lou & Grey, Lane Bryant, Justice, Dress Barn and others 83 1.2 % Express, Inc. Express, Express / Express Men 30 1.1 % Dick's Sporting Goods, Inc. Dick's Sporting Goods, Chelsea Collective 14 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.

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: 2015 $ 52.64 $ 53.99 $ 49.02 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 Unconsolidated Joint Venture Centers (at the Company's pro rata share): 2015 $ 60.74 $ 80.18 $ 60.85 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

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: 2015 $ 12.72 $ 19.87 19 $ 8.96 14 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 Unconsolidated Joint Venture Centers (at the Company's pro rata share): 2015 $ 14.48 $ 33.00 14 $ 9.30 8 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

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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, 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 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:

For the Years Ended December 31, 2015 (1) 2014 (2) 2013 (3) 2012 2011 Consolidated Centers: Minimum rents 9.0 % 8.7 % 8.4 % 8.1 % 8.2 % Percentage rents 0.4 % 0.4 % 0.4 % 0.4 % 0.5 % Expense recoveries(4) 4.5 % 4.3 % 4.5 % 4.2 % 4.1 % 13.9 % 13.4 % 13.3 % 12.7 % 12.8 % Unconsolidated Joint Venture Centers: Minimum rents 8.1 % 8.7 % 8.8 % 8.9 % 9.1 % Percentage rents 0.4 % 0.4 % 0.4 % 0.4 % 0.4 % Expense recoveries(4) 4.0 % 4.5 % 4.0 % 3.9 % 3.9 % 12.5 % 13.6 % 13.2 % 13.2 % 13.4 %

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(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.

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:

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: 2016 393 731,849 11.34 % $ 48.78 10.49 % 2017 357 824,590 12.78 % $ 52.12 12.62 % 2018 345 772,130 11.97 % $ 50.53 11.46 % 2019 303 702,569 10.89 % $ 50.72 10.46 % 2020 280 611,689 9.48 % $ 52.97 9.52 % 2021 227 536,588 8.32 % $ 50.99 8.04 % 2022 174 390,142 6.05 % $ 51.28 5.88 % 2023 185 426,900 6.62 % $ 53.14 6.66 % 2024 194 539,346 8.36 % $ 58.58 9.28 % 2025 186 457,029 7.08 % $ 64.77 8.69 % Unconsolidated Joint Venture Centers (at the Company's pro rata share): 2016 170 185,299 10.75 % $ 61.93 10.90 % 2017 143 218,004 12.64 % $ 53.28 11.03 % 2018 147 181,029 10.50 % $ 65.98 11.34 % 2019 123 139,910 8.11 % $ 68.74 9.13 % 2020 119 167,101 9.69 % $ 60.73 9.64 % 2021 116 159,557 9.25 % $ 58.10 8.80 % 2022 82 105,232 6.10 % $ 57.76 5.77 % 2023 86 159,188 9.23 % $ 54.14 8.18 % 2024 80 129,629 7.52 % $ 62.11 7.64 % 2025 86 147,929 8.58 % $ 64.11 9.01 %

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: 2016 8 170,312 1.32 % $ 19.12 1.83 % 2017 34 1,056,393 8.16 % $ 12.39 7.35 % 2018 21 870,474 6.72 % $ 12.42 6.06 % 2019 23 954,599 7.37 % $ 9.27 4.96 % 2020 25 890,746 6.88 % $ 10.15 5.07 % 2021 30 1,271,153 9.82 % $ 9.67 6.90 % 2022 19 866,638 6.69 % $ 14.82 7.21 % 2023 23 709,662 5.48 % $ 13.82 5.50 % 2024 26 924,534 7.14 % $ 19.61 10.17 % 2025 27 1,218,896 9.41 % $ 19.25 13.16 % Unconsolidated Joint Venture Centers (at the Company's pro rata share): 2016 1 30,000 0.75 % $ 28.00 1.43 % 2017 15 511,735 12.82 % $ 7.62 6.65 % 2018 14 242,725 6.08 % $ 9.72 4.02 % 2019 10 120,855 3.03 % $ 31.63 6.52 % 2020 19 846,975 21.22 % $ 11.01 15.89 % 2021 13 214,310 5.37 % $ 15.52 5.67 % 2022 6 74,051 1.86 % $ 28.22 3.56 % 2023 8 172,496 4.32 % $ 20.75 6.10 % 2024 14 183,173 4.59 % $ 34.73 10.84 % 2025 17 746,305 18.70 % $ 13.62 17.32 %

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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, 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.

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 Number ofAnchorStores GLA Ownedby Anchor GLA Leasedby Anchor Total GLAOccupied byAnchor Macy's Inc. Macy's 41 5,013,000 2,306,000 7,319,000 Bloomingdale's 2 — 355,000 355,000 43 5,013,000 2,661,000 7,674,000 JCPenney(1) 28 1,744,000 2,253,000 3,997,000 Sears 26 926,000 2,868,000 3,794,000 Dillard's 14 2,205,000 257,000 2,462,000 Nordstrom 13 739,000 1,477,000 2,216,000 Target(2) 7 640,000 273,000 913,000 Dick's Sporting Goods(3) 13 — 839,000 839,000 Forever 21 7 155,000 574,000 729,000 The Bon-Ton Stores, Inc. Younkers 3 — 317,000 317,000 Bon-Ton, The 1 — 71,000 71,000 Herberger's 1 188,000 — 188,000 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 Costco 2 — 321,000 321,000 Burlington Coat Factory(4) 3 187,000 127,000 314,000 Neiman Marcus 2 — 188,000 188,000 Von Maur 2 187,000 — 187,000 Sports Authority 4 — 177,000 177,000 Walmart 1 — 173,000 173,000 Century 21 2 171,000 171,000 La Curacao 1 — 165,000 165,000 Boscov's 1 — 161,000 161,000 Belk 2 — 139,000 139,000 Primark(5) 2 137,000 137,000 BJ's Wholesale Club 1 — 123,000 123,000 Lowe's 1 — 114,000 114,000 Mercado de los Cielos 1 — 78,000 78,000 L.L. Bean 1 — 75,000 75,000 Best Buy 1 66,000 — 66,000 Des Moines Area Community College 1 64,000 — 64,000 Barneys New York(6) 1 — 60,000 60,000 Bealls 1 — 40,000 40,000 Vacant Anchors(7) 2 — 200,000 200,000 200 12,324,000 15,081,000 27,405,000 Anchors at Centers not owned by the Company(8): Forever 21 2 — 154,000 154,000 Kohl's 1 — 83,000 83,000 Sports Authority 1 — 41,000 41,000 Total 204 12,324,000 15,359,000 27,683,000

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(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.

(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.

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, 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.

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.

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:

• 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%.

• 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.

• 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.

• 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.

• For distributions made in taxable years beginning after December 31, 2014, the preferential dividend rules no longer apply to the Company.

• 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).

• 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%.

• 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.

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.

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 "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