31 March 2006 Westfield Group Level 24, Westfield Towers 100 William Street Sydney NSW 2011 GPO Box 4004 Sydney NSW 2001 Australia The Manager Telephone 02 9358 7000 Company Announcements Office Facsimile 02 9358 7077 Australian Stock Exchange Limited Internet www.westfield.com Level 4, Exchange Centre 20 Bridge Street SYDNEY NSW 2000 Dear Sir/Madam RE: WESTFIELD GROUP (ASX:WDC) Annual Financial Reports for Westfield Holdings Limited, Westfield Trust and Westfield America Trust The following documents are attached: 1. Annual Financial Report for the Westfield Group comprising Westfield Holdings Limited and its Controlled Entities for the financial year ended 31 December 2005; 2. Annual Financial Report for the Westfield Trust for the financial year ended 31 December 2005; and 3. Annual Financial Report for the Westfield America Trust for the financial year ended 31 December 2005. Yours faithfully WESTFIELD GROUP Simon Tuxen Company Secretary encl Westfield Holdings Limited ABN 66 001 671 496 Westfield Management Limited ABN 41 001 670 579 AFS Licence 230329 as responsible entity for Westfield Trust ABN 55 191 750 378 ARSN 090 849 746 Westfield America Management Limited ABN 66 072 780 619 AFS Licence 230324 as responsible entity for Westfield America Trust ABN 27 374 714 905 ARSN 092 058 449 Westfield Group Annual Report 31 December 2005 All amounts quoted in Australian dollars unless otherwise stated Westfield Holdings Limited ABN 66 001 671 496 Westfield Management Limited ABN 41 001 670 579 AFS Licence 230329 as responsible entity for Westfield Trust ABN 55 191 750 378 ARSN 090 849 746 Westfield America Management Limited ABN 66 072 780 619 AFS Licence 230324 as responsible entity for Westfield America Trust ABN 27 374 714 905 ARSN 092 058 449 Contents 02 Chairman’s Review 04 Portfolio Overview 06 Group Managing Directors’ Review 18 Environment and Community 20 Human Resources 20 Senior Executive Team 22 Property Portfolio 26 Board of Directors 29 Financial Report IBC Corporate Directory The Westfield Group 128 shopping centres in four countries 22,500 retail outlets 10.6 million square metres of lettable area $31.6 billion market capitalisation 2005 FINANCIal HIghlIghtS — Net profit after taX of $4.2 billion — DistribUtion of $1.8 billion (106.57 cents per secUritY) — Assets Under management of $52.5 billion (25% increase for the Year) The Westfield Group is a single focussed, fully integrated, internally managed, owner of regional shopping centre assets globally World’s largest listed retail property group by market capitalisation More than 60% of the Group’s net property income is based outside of Australia The quality and market penetration of the regional shopping centre portfolio is a unique feature of the Group’s business Intensive management at an operational level is a key driver for income growth from existing assets Extensive development program at high yields generates incremental income, improves asset quality and creates significant value WESTFIELD GROUP ANNUAL Report 2005 01 Chairman’s Review I am pleased to report to you on the Group’s performance during our first full-year of operations since the merger some 18 months ago. Westfield is now well established as the leading retail property group in the world and our operating statistics confirm the underlying strength of our business as well as the prospects for future growth. The primary rationale for merging The business philosophy of the Over the past decade we have the three entities – Westfield Group has always been focussed nurtured a stable core of experienced Holdings, Westfield Trust and on shareholder returns and leaders from within Westfield Westfield America Trust – was growth in both income and value and blended them with senior to create a better platform for of our portfolio. appointments not only from the growth. This report highlights how shopping centre industry but from we are achieving that growth. With current cap rates for new other fields that can add new acquisitions being as low as they are ideas and energy to the Group. Our business model allows the Group and the returns from redevelopment to create internally-generated growth being far higher, it is clear that Corporate governance and through the redevelopment of our our redevelopment pipeline will environmental standards remain $52.5 billion portfolio of 128 regional be the engine for superior growth important to the Group. We shopping centres. Currently 18 of in the current environment. continue to review our structure those regional shopping centres and processes to meet the high are under redevelopment at a cost Even so, our redevelopment focus standards set by regulatory of $6.8 billion and we plan to start and basic business model has authorities and expected by the between $1.5 and $2 billion of new not changed. Regional shopping community. This report contains redevelopments from the portfolio centres as an asset class require an overview of just some of the each year for the next three years. constant management and measures we are taking in this area. This self-sustaining real estate reinvestment of capital to stay model will allow us to generate relevant in their marketplace and To continue to maintain the 6% operational earnings growth ahead of the competition. flexibility and financial capacity to (on a constant currency basis) for invest in opportunities with strong Westfield has demonstrated an returns the Board has decided on the foreseeable future. This growth ability to reinvest capital in its assets is derived from the underlying a change to the distribution policy while obtaining a superior return for adopted at the time of the merger. growth in property income from that investment. In fact, when buying the existing portfolio as well as an asset, a portfolio or company, From July 1 2006 project profits incremental property income from it is this ability that sets Westfield will no longer be distributed from the redevelopment program. apart because the reinvestment of capital. The policy in future will We have a globally recognised brand capital through redevelopment is a be to distribute no more than and continue to outperform in all major factor in our decision-making 100% of Operational Segment markets with occupancy levels at process. The current portfolio that earnings adjusted for realised an all-time high, strong growth in fuels the pipeline has been put gains or losses from hedging the rental income and very good returns together over more than 40 years in Group’s non-Australian income. the normal course of our business. from our redevelopment pipeline. I am pleased to be able to report Net profit for the year was $4.2 Improving the knowledge and skill on yet another strong result for billion and distributions to security of all our people is a priority for the the Group. This year has seen holders was $1.8 billion, or 106.57 business. I regard Westfield’s senior the Westfield Group cement its cents per security in line with the executive team as one of our most place as the largest listed retail Group’s forecast. Total returns to valued assets, but to keep it that property group in the world security holders were 16.8% for way requires continual evolution and amongst the 10 largest the year inclusive of distributions. of our existing executives and Australian listed companies. targeted recruitment of new talent. This was well ahead of the Property I am confident in restating the Trust Index (of which the Group distribution forecast for 2006 of represents 34%) total return of 12.5%. 106.5 cents per security and look forward to another strong year in which we continue to achieve high income returns and capital growth for all Westfield investors. Frank Lowy, AC Chairman WESTFIELD GROUP ANNUAL Report 2005 02/03 Portfolio Overview WASHINGTON ASSETS OWNED & GROSS LETTABLE AREA UNDER MANAGEMENT NET PROPERTY INCOME INDIANA CONNECTICUT AUSTRALIA ILLINOIS NEW YORK 7% NEW ZEALAND NEBRASKA OHIO 3% 13% COLORADO NEW JERSEY UNITED STATES OF AMERICA NORTHERN CALIFORNIA MARYLAND 32% 39% UNITED KINGDOM 39% MISSOURI SOUTHERN CALIFORNIA NORTH CAROLINA 62% 48% 3% 44% 4% 6% UNITED UNITED NEW AS at 31 DECEMBER 2005 StatES aUSTRALIA KINGDOM ZEALAND tOtal FLORIDA CENTRES 67 43 7 11 128 usa RETAIL OUTLETS 9,400 10,900 800 1,400 22,500 GLA (MILLION SQM) 6.6 3.4 0.3 0.3 10.6 67 ASSET UNDER MANAGEMENT (BILLION) (2) US$16.9 A$20.4 £3.0 NZ$2.2 A$52.5 (1) centres (1) Includes Work In Progress and redevelopment projects (2) Based on exchange rates as at 31 December 2005: AUD/USD 0.7327, AUD/GBP 0.4245, AUD/NZD 1.0712 aus 54centres QUEENSLAND WESTERN NEW SOUTH WALES AUSTRALIA SOUTH ACT uk AUSTRALIA VICTORIA AUCKLAND NORTHERN IRELAND HAMILTON 7 DERBY centres BELFAST NOTTINGHAM WELLINGTON nz CHRISTCHURCH LONDON TUNBRIDGE WELLS GUILDFORD BIRMINGHAM WASHINGTON ASSETS OWNED & GROSS LETTABLE AREA UNDER MANAGEMENT NET PROPERTY INCOME INDIANA CONNECTICUT AUSTRALIA ILLINOIS NEW YORK 7% NEW ZEALAND NEBRASKA OHIO 3% 13% COLORADO NEW JERSEY UNITED STATES OF AMERICA NORTHERN CALIFORNIA MARYLAND 32% 39% UNITED KINGDOM 39% MISSOURI SOUTHERN CALIFORNIA NORTH CAROLINA 62% 48% 3% 44% 4% 6% usa FLORIDA centr67es aus 54centres QUEENSLAND WESTERN NEW SOUTH WALES AUSTRALIA SOUTH ACT uk AUSTRALIA VICTORIA AUCKLAND NORTHERN IRELAND HAMILTON 7 DERBY centres BELFAST NOTTINGHAM WELLINGTON nz CHRISTCHURCH LONDON TUNBRIDGE WELLS GUILDFORD BIRMINGHAM WESTFIELD GROUP ANNUAL Report 2005 04/05 Group Managing Directors’ It is now a little over 18 months Review since the merger to create the Westfield Group. In this time the value of the Group’s regional shopping centre portfolio has grown by 43.9% as a result of the Group’s intensive management of its centres, the ongoing redevelopment of its portfolio, the acquisition of new properties and upward revaluations of existing centres.