SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-K (Mark one) / X / ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended December 31, 1998. OR / / TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934 (NO FEE REQUIRED) For the transition period from__________________ to ______________ Commission File Number 1-12504 THE MACERICH COMPANY (Exact Name of Registrant as Specified in Its Charter) Maryland 95-4448705 (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification No.) 401 Wilshire Boulevard, # 700 Santa Monica, California 90401 (Address of principal executive office) (Zip Code) Registrant's telephone number, including area code: (310) 394-6000 SECURITIES REGISTERED PURSUANT TO SECTION 12(b) OF THE ACT: NAME OF EACH EXCHANGE TITLE OF EACH CLASS ON WHICH REGISTERED ------------------- ----------------------- Common Stock, $0.01 Par Value New York Stock Exchange Preferred Share New York Stock Exchange Purchase Rights SECURITIES REGISTERED PURSUANT TO SECTION 12(g) OF THE ACT: NONE INDICATE BY CHECK MARK WHETHER THE REGISTRANT (1) HAS FILED ALL REPORTS REQUIRED TO BE FILED BY SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934 DURING THE PRECEDING 12 MONTHS (OR FOR SUCH SHORTER PERIODS THAT THE REGISTRANT WAS REQUIRED TO FILE SUCH REPORT(S)) AND (2) HAS BEEN SUBJECT TO SUCH FILING REQUIREMENTS FOR THE PAST 90 DAYS. YES X NO . ---- ---- Indicate by a check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of the registrant's knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to the Form 10-K. _ As of February 18, 1999, the aggregate market value of the 25,586,863 shares of Common Stock held by non-affiliates of the registrant was $598 million based upon the closing price ($23.375) on the New York Stock Exchange composite tape on such date. (For this computation, the registrant has excluded the market value of all shares of its Common Stock reported as beneficially owned by executive officers and directors of the registrant and certain other shareholders; such exclusion shall not be deemed to constitute an admission that any such person is an "affiliate" of the registrant.) As of February 18, 1999, there were 33,944,863 shares of Common Stock outstanding. DOCUMENTS INCORPORATED BY REFERENCE Portions of the proxy statement for the annual stockholders meeting to be held in 1999 are incorporated by reference into Part III. THE MACERICH COMPANY ANNUAL REPORT ON FORM 10-K FOR THE YEAR ENDED DECEMBER 31, 1998 TABLE OF CONTENTS Item No. Page No. - -------- -------- PART I 1. Business......................................................................... 1-10 2. Properties....................................................................... 11-17 3. Legal Proceedings................................................................ 17 4. Submission of Matters to a Vote of Security Holders.............................. 17 PART II 5. Market for the Registrant's Common Equity and Related Stockholder Matters........ 18 6. Selected Financial Data.......................................................... 19-22 7. Management's Discussion and Analysis of Financial Condition and Results of Operations..................................... 23-34 7A. Quantitative and Qualitative Disclosures About Market Risk....................................................... 34-35 8. Financial Statements and Supplementary Data...................................... 35 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure..................................... 35 PART III 10. Directors and Executive Officers of the Company.................................. 36 11. Executive Compensation........................................................... 36 12. Security Ownership of Certain Beneficial Owners and Management................... 36 13. Certain Relationships and Related Transactions.................................. 36 PART IV 14. Exhibits, Financial Statements, Financial Statement Schedules and Reports on Form 8-K............................................................................... 37-72 SIGNATURES PART I ITEM I. BUSINESS GENERAL The Macerich Company (the "Company") is involved in the acquisition, ownership, redevelopment, management and leasing of regional and community 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"). The Operating Partnership owns or has an ownership interest in 46 regional shopping centers and seven community shopping centers aggregating approximately 40 million square feet of gross leasable area. These 53 regional and community shopping centers are referred to hereinafter as the "Centers", 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 three management companies, Macerich Property Management Company, a California corporation, Macerich Manhattan Management Company, a California corporation, and Macerich Management Company, a California corporation (collectively, the "Management Companies"). The Company was organized as a Maryland corporation in September 1993 to continue and expand the shopping center operations of Mace Siegel, Arthur M. Coppola, Dana K. Anderson and Edward C. Coppola and certain of their business associates. All references to the Company in this Form 10-K include the Company, those entities owned or controlled by the Company and predecessors of the Company, unless the context indicates otherwise. RECENT DEVELOPMENTS A. EQUITY OFFERINGS The Company sold 7,920,181 shares of its common stock in six offerings during 1998, raising $203.8 million of net proceeds. On February 25, 1998, the Company issued 3,627,131 shares of its Series A cumulative convertible redeemable preferred stock ("Series A Preferred Stock") for net proceeds totaling $99.0 million. On June 17, 1998, the Company issued 5,487,471 shares of its Series B cumulative convertible redeemable preferred stock ("Series B Preferred Stock") for net proceeds totaling $148.5 million. The total net proceeds from the 1998 common and preferred stock offerings totaled $451.3 million. These proceeds were used for the 1998 acquisitions, reducing borrowings under the Company's line of credit and general corporate purposes. B. ACQUISITIONS On February 27, 1998, the Company, through a 50/50 joint venture with an affiliate of Simon Property Group, Inc., acquired the ERE Yarmouth portfolio of twelve regional malls. The properties in the portfolio comprise 10.7 million square feet and are located in eight states. The total purchase price was $974.5 million, which included $485.0 million of assumed debt, at market value. The Company's share of the cash component of the purchase price was funded by issuing $100.0 million of Series A Preferred Stock, $80.0 million of common stock and borrowing the balance from the Company's line of credit. South Plains Mall was acquired on June 19, 1998. South Plains Mall is a 1,140,574 square foot super regional mall located in Lubbock, Texas. The purchase price was $115.5 million, consisting of $29.3 million of assumed debt, at fair market value, and $86.2 million of cash. The cash portion was funded with a portion of the proceeds from the Company's Series B Preferred Stock offering. Westside Pavilion was acquired on July 1, 1998 for $170.5 million. Westside Pavilion is a 755,759 square foot regional mall located in Los Angeles, California. The purchase price was funded with a portion of the proceeds from the Company's Series B Preferred Stock offering, borrowings under the Company's line of credit and the placement of a ten year $100.0 million mortgage secured by the property. 1 B. ACQUISITIONS, CONTINUED: The Village at Corte Madera is a 428,398 square foot regional mall in Corte Madera, California, which the Company acquired in two phases: (i) 40% on June 16, 1998 and (ii) the remaining 60% on July 24, 1998. In addition, Carmel Plaza, a 115,215 square foot community shopping center in Carmel, California was acquired on August 10, 1998. The combined purchase price was $165.5 million, consisting of $40.0 million of assumed debt, the issuance of $7.9 million of limited partnership interests in the Operating Partnership ("OP Units") and $117.6 million in cash. The cash component was funded by borrowings under the Company's line of credit. Northwest Arkansas Mall was acquired on December 15, 1998. Northwest Arkansas Mall is a 780,237 square foot regional mall located in Fayetteville, Arkansas. The purchase price of $94.0 million was funded by a concurrently placed loan of $63.0 million and borrowings of $31.0 million under the Company's line of credit. On February 18, 1999, through a 51/49 joint venture with Ontario Teachers' Pension Plan Board, the Company closed on the first phase of a two phase acquisition of a portfolio of properties. The phase one closing included the acquisition of three regional malls, the retail component of a mixed-use development, five contiguous properties and two non-contiguous community shopping centers