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		SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549
/x/		Annual Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 For the fiscal year ended December 31, 2000 or
/ /		Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
		For the transition period from to
		Commission File Number 1-12504

FORM 10-K
		(Exact name of registrant as specified in its charter)
		Maryland (State or other jurisdiction of incorporation or organization) 401 Wilshire Boulevard, # 700 Santa Monica, California 90401 (Address of principal executive offices and zip code)
		95-4448705 (I.R.S. Employer Identification No.)
		Registrant's telephone number, including area code: (310) 394-6000
		Securities registered pursuant to Section 12(b) of the Act:
		Title of each class Common Stock, $0.01 Par Value Preferred Share Purchase Rights
		Name of each exchange on which registered New York Stock Exchange New York Stock Exchange
		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 27, 2001, the aggregate market value of the 21,646,000 shares of Common Stock held by non-affiliates of the registrant was $450 million based upon the closing price ($20.81) 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 27, 2001, there were 33,630,270 shares of Common Stock outstanding.
		DOCUMENTS INCORPORATED BY REFERENCE
		Portions of the proxy statement for the annual stockholders meeting to be held in 2001 are incorporated by reference into Part III.

THE MACERICH COMPANY

Annual Report on Form 10-K

For The Year Ended December 31, 2000

Table of Contents

Item No.		Page No.

Part I

1.	Business	1-11

2.	Properties	12-18

3.	Legal Proceedings	18

4.	Submission of Matters to a Vote of Security Holders	18

Part II

5.	Market for the Registrant's Common Equity and Related Stockholder Matters	19-20

6.	Selected Financial Data	21-24

7.	Management's Discussion and Analysis of Financial Condition and Results of Operations	24-36

7A.	Quantitative and Qualitative Disclosures About Market Risk	37

8.	Financial Statements and Supplementary Data	37

9.	Changes in and Disagreements with Accountants on Accounting and Financial Disclosure	38

Part III

10.	Directors and Executive Officers of the Company	38

11.	Executive Compensation	38

12.	Security Ownership of Certain Beneficial Owners and Management	38

13.	Certain Relationships and Related Transactions	38

Part IV

14.	Exhibits, Financial Statements, Financial Statement Schedules and Reports on Form 8-K	39-101

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 five community shopping centers aggregating approximately 42 million square feet of gross leasable area ("GLA"). These 51 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. Stock Repurchase Program
On November 10, 2000, the Company's Board of Directors approved a stock repurchase program of up to 3.4 million shares of common stock. As of December 31, 2000, the Company repurchased 564,000 shares of its common stock at an average price of $19.02 per share.

B. Refinancings
On April 12, 2000, additional debt of $138.5 million was placed on the SDG Macerich Properties, L.P. portfolio. This debt, consisting of both fixed and floating interest rates, has a current average interest rate of 7.51% and matures May 15, 2006. The Company's share of the financing proceeds of $69.2 million was used to pay down the Company's line of credit.

On June 1, 2000, the Pacific Premier Retail Trust ("PPRT") joint venture refinanced the debt on Kitsap Mall. A $38.0 million loan at an effective interest rate of 8.60%, was paid in full and a new note was issued for $61.0 million bearing interest at a fixed rate of 8.06% and maturing June 1, 2010.

On August 31, 2000, the Company refinanced the debt on Vintage Faire Mall. The prior loan of $52.8 million, at a fixed interest rate of 7.65%, was paid in full and a new note was issued for $70.0 million bearing interest at a fixed rate of 7.89% and maturing September 1, 2010.

On October 2, 2000, the Company refinanced the debt on Santa Monica Place. An $85.0 million floating rate loan was paid in full and a new note was issued for $85.0 million bearing interest at a fixed rate of 7.70% and maturing November 1, 2010.

On December 1, 2000, the PPRT joint venture refinanced the debt on Stonewood Mall. A $75.0 million floating rate loan was paid in full and a new note was issued for $77.8 million bearing interest at a fixed rate of 7.41% and maturing December 11, 2010.

C. Other Events
On September 30, 2000, Manhattan Village, a 551,847 square foot regional shopping center, 10% of which was owned by the Operating Partnership, was sold. The joint venture sold the property for $89.0 million, including a note receivable from the buyer for $79.0 million at an interest rate of 8.75% payable monthly, until its maturity date of September 30, 2001.

During 2000, the Company entered into a ten-year energy management and procurement contract with Enron Energy Services ("Enron"). Enron will manage the supply of electricity and natural gas and provide energy management services to the majority of the Centers.

During 2000, the Company invested $4.3 million in and became a founding member of MerchantWired, LLC, ("MerchantWired"). MerchantWired is providing a broadband communications network to retail property owners and retailers.

THE SHOPPING CENTER INDUSTRY

General
There are several types of retail shopping centers, which are differentiated primarily based on size and marketing strategy. Regional shopping centers generally contain in excess of 400,000 square feet of GLA, 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. Community Shopping Centers, also referred to as "strip 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 Shopping Centers typically contain 100,000 square feet to 400,000 square feet of GLA. In addition, freestanding retail stores are located along the perimeter of the shopping centers ("Freestanding Stores"). Anchors, Mall and 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, generally 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 the preferred gathering place for community, charity, and promotional events.

The Company focuses on the acquisition, redevelopment, management and leasing of Regional Shopping Centers. Regional Shopping Centers have generally provided owners with relatively stable growth in 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 are difficult to develop because of the significant barriers to entry, including the limited availability of capital and suitable development sites, the presence of existing Regional Shopping Centers in most markets, a limited number of Anchors, and the associated development costs and risks. Consequently, the Company believes that few new Regional Shopping Centers will be built in the next five years.

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. Anchor tenants 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 gross leasable area 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.

Although a variety of retail formats compete for consumer purchases, the Company believes that Regional Shopping Centers will continue to be a preferred shopping destination. The combination of a climate controlled shopping environment, a dominant location, and a diverse tenant mix has resulted in Regional Shopping Centers generating higher tenant sales than are generally achieved at smaller retail formats. Further, the Company believes that department stores located in Regional Shopping Centers will continue to provide a full range of current fashion merchandise at a limited number of locations in any one market, allowing them to command the largest geographical trade area of any retail format.

Community Shopping Centers
Community Shopping Centers are designed to attract local and neighborhood customers and are typically open air shopping centers, with one or more supermarkets, drugstores or discount department stores. National retailers such as Kids-R-Us at Bristol Shopping Center, Saks Fifth Avenue at Carmel Plaza and The Gap, Victoria's Secret and Express/Bath and Body at Villa Marina, provide the Company's Community Shopping Centers with the opportunity to draw from a much larger trade area than a typical supermarket or drugstore anchored Community Shopping Center.

BUSINESS OF THE COMPANY

Management and Operating Philosophy
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, construction, finance, 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.

Property Management and Leasing. 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 to be responsive to the needs of retailers.

The Company believes strongly in decentralized leasing and accordingly, most of its leasing managers are located on-site to better understand the market and the community in which a Center is located. Leasing managers are charged with more than the responsibility of leasing space; they continually assess and fine tune each Center's tenant mix, identify and replace under performing tenants and seek to optimize existing tenant sizes and configurations.

Acquisitions. Since its initial public offering ("IPO"), the Company has acquired interests in shopping centers nationwide. These acquisitions were identified and consummated by the Company's staff of acquisition professionals who are strategically located in Santa Monica, Dallas, Denver, and Atlanta. 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. The Company focuses on assets that are or can be dominant in their trade area, have a franchise and where there is intrinsic value.

The Company made the following acquisitions in 1998: The Company along with a 50/50 joint venture partner, acquired a portfolio of twelve regional malls totaling 10.7 million square feet on February 27, 1998; South Plains Mall in Lubbock, Texas on June 19,1998; Westside Pavilion in Los Angeles, California on July 1, 1998; Village at Corte Madera in Corte Madera, California in June and July 1998; Carmel Plaza in Carmel, California on August 10, 1998; and Northwest Arkansas Mall in Fayetteville, Arkansas on December 15, 1998. Together, these properties are known as the "1998 Acquisition Centers."

On February 18, 1999, the Company, along with a joint venture partner, acquired a portfolio of three regional malls, the retail component of a mixed-use development, five contiguous properties and two non-contiguous community shopping centers totaling approximately 3.6 million square feet. The Company is a 51% owner of this portfolio. The second phase of this transaction, which closed on July 12, 1999, consisted of the acquisition of the office component of the mixed-use development. The two non-contiguous community shopping centers were subsequently sold in October and November of 1999. Additionally, the Company acquired Los Cerritos Center in Cerritos, California, on June 2, 1999 and Santa Monica Place in Santa Monica, California, on October 29, 1999. Together, these properties are known as the "1999 Acquisition Centers."

During 2000, market conditions, including the cost of capital and the lack of attractive opportunities, resulted in the first year subsequent to our IPO in which we had no acquisitions. Furthermore, management anticipates no acquisitions for 2001.

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 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.

The Centers. As of December 31, 2000, the Centers consist of 46 Regional Shopping Centers and five Community Shopping Centers aggregating approximately 42 million square feet of GLA. The 46 Regional Shopping Centers in the Company's portfolio average approximately 884,378 square feet of GLA and range in size from 2.1 million square feet of GLA at Lakewood Mall to 328,667 square feet of GLA at Panorama Mall. The Company's five Community Shopping Centers, Boulder Plaza, Bristol Shopping Center, Carmel Plaza, Great Falls Marketplace and Villa Marina Marketplace, have an average of 217,652 square feet of GLA. The 46 Regional Shopping Centers presently include 182 Anchors totaling approximately 23.1 million square feet of GLA and approximately 6,363 Mall and Freestanding Stores totaling approximately 18.7 million square feet of GLA.

Total revenues, including joint ventures at their pro rata share, increased to $486.1 million in 2000 from $461.2 million in 1999 primarily due to releasing space at higher rents. See "Management's Discussion and Analysis of Financial Condition and Results of Operations." No Center generated more than 10% of shopping center revenues during 1999 and 2000.

Cost of Occupancy
The Company's management believes that in order to maximize the Company's operating cash flow, the Centers' Mall Store tenants must be able to operate profitably. A major factor contributing to tenant profitability is cost of occupancy. The following table summarizes occupancy costs for Mall Store tenants in the Centers as a percentage of total Mall Store sales for the last three years:

	For the Years Ended December 31,

	1998(2)	1999(3)	2000

Minimum rents	7.7%	7.4%	7.3%
Percentage rents	0.4%	0.5%	0.5%
Expense recoveries(1)	3.0%	2.9%	3.0%

Mall tenant occupancy costs	11.1%	10.8%	10.8%

(1): Represents real estate tax and common area maintenance charges.
(2): Excludes 1998 Acquisition Centers.
(3): Excludes 1999 Acquisition Centers.

Competition
The 46 Regional Shopping Centers are generally located in developed areas in middle to upper income markets where there are relatively few other Regional Shopping Centers. In addition, 44 of the 46 Regional Shopping Centers contain more than 400,000 square feet of GLA. The Company intends to consider additional expansion and renovation projects to maintain and enhance the quality of the Centers and their competitive position in their trade areas.

There are numerous owners and developers of real estate that compete with the Company in its trade areas. There are eight other publicly traded mall companies and several large private mall companies,

any of which under certain circumstances, could compete against the Company for an acquisition, an Anchor or a tenant. This results in competition for both acquisition of centers and for tenants to occupy space. The existence of competing shopping centers could have a material impact on the Company's ability to lease space and on the level of rent that can be achieved. There is also increasing competition from other forms of retail, such as factory outlet centers, power centers, discount shopping clubs, mail-order services, internet shopping and home shopping networks that could adversely affect the Company's revenues.

Major Tenants
The Centers derived approximately 91.3% of their total rents for the year ended December 31, 2000 from Mall and Freestanding Stores. One tenant accounted for approximately 4.4% of annual base rents of the Company, and no other single tenant accounted for more than 3.0%, as of December 31, 2000.

The following tenants (including their subsidiaries) represent the 10 largest tenants in the Company's portfolio (including joint ventures) based upon minimum rents in place as of December 31, 2000:

Tenant	Number of Locations in the Portfolio	% of Total Minimum Rents as of December 31, 2000

The Limited, Inc.	142	4.4%
AT&T Wireless Services	4	3.0%
The Gap, Inc.	55	2.5%
Venator Group, Inc.	122	2.5%
J.C. Penney Co., Inc.	33	1.4%
The Musicland Group, Inc.	44	1.1%
Claire Stores, Inc.	84	1.0%
Barnes and Noble, Inc.	20	1.0%
Zale Corporation	59	1.0%
Federated Department Stores	23	1.0%

Mall and Freestanding Stores
Mall and Freestanding Store leases generally provide for tenants to pay rent comprised of a fixed base (or "minimum") rent and a percentage rent based on sales. In some cases, tenants pay only a fixed minimum rent, and in some cases, tenants pay only percentage rents. Most leases for Mall and Freestanding Stores contain provisions that allow the Centers to recover their costs for maintenance of the common areas, property taxes, insurance, advertising and other expenditures related to the operations of the Center.

The Company uses tenant spaces 10,000 square feet and under for comparing rental rate activity. Tenant space 10,000 square feet and under in the portfolio at December 31, 2000, comprises 69.2% of all Mall and Freestanding Store space. The Company believes that to include space over 10,000 square feet would provide a less meaningful comparison.

When an existing lease expires, the Company is often able to enter into a new lease with a higher base rent component. The average base rent for new Mall and Freestanding Store leases, 10,000 square feet

or under, commencing during 2000 was $32.95 per square foot, or 22% higher than the average base rent for all Mall and Freestanding Stores (10,000 square feet or under) at December 31, 2000 of $27.09 per square foot.

The following table sets forth for the Centers the average base rent per square foot of Mall and Freestanding GLA, for tenants 10,000 square feet and under, as of December 31 for each of the past three years:

December 31,	Average Base Rent Per Square Foot(1)	Average Base Rent Per Sq. Ft. on Leases Commencing During the Year(2)	Average Base Rent Per Sq. Ft. on Leases Expiring During the Year(3)

1998	$25.08	$28.58	$26.34
1999	$25.60	$29.76	$27.29
2000	$27.09	$32.95	$28.56

(1): Average base rent per square foot is based on Mall and Freestanding Store GLA for spaces 10,000 square feet or under occupied as of December 31 for each of the Centers owned by the Company in 1998 (excluding the 1998 Acquisition Centers), 1999 (excluding the 1999 Acquisition Centers), and 2000.
(2): The base rent on lease signings during the year represents the actual rent to be paid on a per square foot basis during the first twelve months. New Centers are excluded in the year of acquisition.
(3): The average base rent on leases expiring during the year represents the final year minimum rent, on a cash basis, for all tenant leases 10,000 square feet or under expiring during the year. On a comparable space basis, average initial rents, excluding the impact of straight lining of rent, on leases 10,000 square feet or under commencing in 2000 was $34.26 compared to expiring rents of $28.56. The average base rent on leases expiring in 1998 excludes the 1998 Acquisition Centers and the average for 1999 excludes the 1999 Acquisition Centers.

Bankruptcy and/or Closure of Retail Stores
The bankruptcy and/or closure of an Anchor, or its sale to a less desirable retailer, could adversely affect customer traffic in a Center and thereby reduce the income generated by that Center. Furthermore, the closing of an Anchor could, under certain circumstances, allow certain other Anchors or other tenants to terminate their leases or cease operating their stores at the Center or otherwise adversely affect occupancy at the Center.

Retail stores at the Centers other than Anchors may also seek the protection of the bankruptcy laws and/or close stores, which could result in the termination of such tenants' leases and thus cause a reduction in the cash flow generated by the Centers. Although no single retailer accounts for greater than 4.4% of total rents, the bankruptcy and/or closure of stores could result in decreased occupancy levels, reduced rental income or otherwise adversely impact the Centers. Although certain tenants have filed for bankruptcy, the Company does not believe such filings and any subsequent closures of their stores will have a material adverse impact on its operations.

Lease Expirations
The following table shows scheduled lease expirations (for Centers owned as of December 31, 2000) of Mall and Freestanding Stores 10,000 square feet or under for the next ten years, assuming that none of the tenants exercise renewal options:

Year Ending December 31,	Number of Leases Expiring	Approximate GLA of Expiring Leases(1)	% of Total Leased GLA Represented by Expiring Leases(2)	Ending Base Rent per Square Foot of Expiring Leases(1)

2001	564	873,175	11.37%	$25.93
2002	477	703,080	9.16%	$28.34
2003	506	801,462	10.44%	$26.05
2004	454	722,768	9.41%	$27.61
2005	472	817,205	10.64%	$28.49
2006	391	734,188	9.56%	$30.18
2007	382	737,321	9.60%	$29.67
2008	374	718,095	9.35%	$30.74
2009	275	534,180	6.96%	$30.83
2010	339	594,806	7.75%	$32.66

(1): Includes joint ventures at pro rata share
(2): For leases 10,000 square feet or under

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 and Freestanding Stores, strong Anchors play an important part in maintaining customer traffic and making the Centers desirable locations for Mall 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 and Freestanding Stores. Each Anchor which owns its own store, and certain Anchors which 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 8.7% of the Company's total rent for the year ended December 31, 2000.

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 at December 31, 2000:

Name			Number of Anchor Stores	GLA Owned By Anchor	GLA Leased By Anchor	Total GLA Occupied By Anchor

J.C. Penney(1)			33	1,229,034	3,184,378	4,413,412
Sears			30	2,197,192	1,631,297	3,828,489
Target Corp.
	Mervyn's		12	571,016	413,337	984,353
	Target		9	581,260	379,871	961,131
	Dayton's		2	115,193	100,790	215,983

		Total	23	1,267,469	893,998	2,161,467
Federated Department Stores
	Macy's		10	1,467,367	411,599	1,878,966
	Macy's Men's & Juniors		2	—	146,906	146,906
	Macy's Men's & Home		1	—	88,537	88,537
	The Bon Marche		2	—	181,000	181,000
	Lazarus		1	159,068	—	159,068

		Total	16	1,626,435	828,042	2,454,477
May Department Stores Co.
	Robinsons-May		6	676,928	494,102	1,171,030
	Foley's		4	725,316	—	725,316
	Hechts		2	140,000	143,426	283,426
	Famous Barr		1	180,000	—	180,000
	Meier & Frank		1	259,510	—	259,510
	Meier & Frank–ZCMI		1	—	200,000	200,000

		Total	15	1,981,754	837,528	2,819,282
Dillard's			15	1,372,330	662,735	2,035,065
Saks, Inc.
	Younker's		6	—	609,177	609,177
	Herberger's		5	269,969	202,778	472,747

		Total	11	269,969	811,955	1,081,924
Montgomery Ward(2)			7	180,431	853,745	1,034,176
Gottschalks			6	332,638	333,772	666,410
Nordstrom			5	226,853	503,369	730,222
Von Maur			3	186,686	59,563	246,249
Belk			2	—	127,950	127,950
Boscov's			2	—	314,717	314,717
Wal-Mart			2	281,455	—	281,455
Beall's			1	—	40,000	40,000
DeJong			1	—	43,811	43,811
Emporium			1	—	50,625	50,625
Gordman's			1	—	60,000	60,000
Home Depot			1	—	133,029	133,029
Kohl's			1	—	92,466	92,466
Peebles			1	—	42,090	42,090
Service Merchandise			1	—	60,000	60,000
Vacant			4	200,651	178,136	378,787

			182	11,352,897	11,743,206	23,096,103

(1): J.C. Penney closed their store at Crossroads-Boulder on January 31, 2001. The Company is contemplating various redevelopment opportunities for the vacant site.
(2): Montgomery Ward filed for bankruptcy on December 28, 2000 and announced the closing of all of its stores, including the seven located at the Centers.

ENVIRONMENTAL MATTERS

Under various federal, state and local laws, ordinances and regulations, a current or prior owner or operator of real estate may be liable for the costs of removal or remediation of certain hazardous or toxic substances on, under or in such property. Such laws often impose such liability without regard to whether the owner or operator knew of, or was responsible for, the presence of such hazardous or toxic substances. The costs of investigation, removal or remediation of such substances may be substantial, and the presence of such substances, or the failure to properly remediate such substances, may adversely affect the owner's or operator's ability to sell or rent such property or to borrow using such property as collateral. Persons or entities who arrange for the disposal or treatment of hazardous or toxic substances may also be liable for the costs of removal or remediation of a release of such substances at a disposal or treatment facility, whether or not such facility is owned or operated by such person or entity. Certain environmental laws impose liability for release of asbestos-containing materials ("ACMs") into the air and third parties may seek recovery from owners or operators of real properties for personal injury associated with exposure to ACMs. In connection with the ownership (direct or indirect), operation, management and development of real properties, the Company may be considered an owner or operator of such properties or as having arranged for the disposal or treatment of hazardous or toxic substances and therefore potentially liable for removal or remediation costs, as well as certain other related costs, including governmental fines and injuries to persons and property.

Each of the Centers has been subjected to a Phase I audit (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 audits, and on other information, the Company is aware of the following environmental issues that are reasonably possible to result in costs associated with future investigation or remediation, or in environmental liability:

•: Asbestos. The Company has conducted 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 of the 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 of the 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.

PCE has been detected in soil and groundwater in the vicinity of a dry cleaning establishment at North Valley Plaza, formerly owned by a joint venture of which the Company was a 50% member. The

property was sold on December 18, 1997. The California Department of Toxic Substances Control ("DTSC") advised the Company in 1995 that very low levels of Dichloroethylene ("1,2 DCE"), a degradation byproduct of PCE, had been detected in a municipal water well located 1/4 mile west of the dry cleaners, and that the dry cleaning facility may have contributed to the introduction of 1,2 DCE into the water well. According to DTSC, the maximum contaminant level ("MCL") for 1,2 DCE which is permitted in drinking water is 6 parts per billion ("ppb"). The 1,2 DCE was detected in the water well at a concentration of 1.2 ppb, which is below the MCL. The Company has retained an environmental consultant and has initiated extensive testing of the site. The joint venture agreed (between itself and the buyer) that it would be responsible for continuing to pursue the investigation and remediation of impacted soil and groundwater resulting from releases of PCE from the former dry cleaner. A total of $187,976 and $149,466 have already been incurred by the joint venture for remediation, and professional and legal fees for the years ending December 31, 2000 and 1999, respectively. An additional $70,590 remains reserved by the joint venture as of December 31, 2000. The joint venture has been sharing costs on a 50/50 basis with a former owner of the property and intends to look to additional responsible parties for recovery.

The Company acquired Fresno Fashion Fair in December 1996. Asbestos has been detected in structural fireproofing throughout much of the Center. Testing data conducted by professional environmental consulting firms indicates that the fireproofing is largely inaccessible to building occupants and is well adhered to the structural members. Additionally, airborne concentrations of asbestos were well within OSHA's permissible exposure limit ("PEL") of .1 fcc. The accounting for this acquisition includes a reserve of $3.3 million to cover future removal of this asbestos, as necessary. The Company incurred $25,939 and $90,876 in remediation costs for the years ending December 31, 2000 and 1999, respectively.

INSURANCE

The Company has comprehensive liability, fire, flood, extended coverage and rental loss insurance with respect to the Centers. The Company or the joint venture, as applicable, also currently carries earthquake insurance covering the Centers located in California. Management believes that such insurance provides adequate coverage.

QUALIFICATION AS A REAL ESTATE INVESTMENT TRUST

The Company elected to be taxed as a REIT under the Internal Revenue Code of 1986, as amended (the "Code"), commencing with its first taxable year ended December 31, 1994, and intends to conduct its operations so as to continue to qualify as a REIT under the Code. As a REIT, the Company generally will not be subject to federal and state income taxes on its net taxable income that it currently distributes to stockholders. Qualification and taxation as a REIT depends on the Company's ability to meet certain dividend distribution tests, share ownership requirements and various qualification tests prescribed in the Code.

EMPLOYEES

The Company and the Management Companies employ approximately 1,652 persons, including eight executive officers, personnel in the areas of acquisitions and business development (6), property management (263), leasing (76), redevelopment/construction (25), financial services (49) and legal affairs (33). In addition, in an effort to minimize operating costs, the Company generally maintains its own security staff (607) and maintenance staff (585). Approximately 14 of these employees are represented by a union. The Company believes that relations with its employees are good.

ITEM 2. PROPERTIES

The following table sets forth certain information about each of the Centers as of December 31, 2000:

Company's Ownership %	Name of Center/ Location(1)	Year of Original Construction/ Acquisition	Year of Most Recent Expansion/ Renovation	Total GLA(2)	Mall and Free-standing GLA	Percentage of Mall and Free-standing GLA Leased	Anchors	Sales Per Square Foot(3)

100%	Boulder Plaza Boulder, Colorado	1969/1989	1991	158,109	158,109	90.3%	—	$230
100%	Bristol Shopping Center(4) Santa Ana, California	1966/1986	1992	165,279	165,279	97.3%	—	342
50%	Broadway Plaza(4) Walnut Creek, California	1951/1985	1994	698,985	253,488	98.7%	Macy's, Nordstrom, Macy's Men's and Juniors	585
100%	Capitola Mall(4) Capitola, California	1977/1995	1988	583,899	204,182	97.5%	Gottschalks, Mervyn's, Sears(5)	360
100%	Carmel Plaza Carmel, California	1974/1998	1993	115,215	115,215	89.2%	—	410
100%	Chesterfield Towne Center Richmond, Virginia	1975/1994	1997	1,031,224	420,781	97.6%	Dillard's (two), Hechts, Sears, J.C. Penney	326
100%	Citadel, The Colorado Springs, Colorado	1972/1997	1995	1,042,027	446,687	85.3%	Dillard's, Foley's, J.C. Penney, Mervyn's	306
100%	Corte Madera, Village at Corte Madera, California	1985/1998	1994	428,267	210,267	92.2%	Macy's, Nordstrom	572
100%	County East Mall Antioch, California	1966/1986	1989	494,342	175,782	90.7%	Sears, Gottschalks, Mervyn's(5)	312
100%	Crossroads Mall Oklahoma City, Oklahoma	1974/1994	1991	1,269,067	529,379	84.7%	Dillards, Foley's, J.C. Penney, Montgomery Ward(6)	254
100%	Fresno Fashion Fair Fresno, California	1970/1996	1983	874,339	313,458	95.3%	Gottschalks, J.C. Penney, Macy's, Macy's Men's and Children	396
100%	Great Falls Marketplace Great Falls, Montana	1997/1997	—	201,395	201,395	100.0%	—	113
100%	Greeley Mall Greeley, Colorado	1973/1986	1987	574,433	231,071	81.9%	Dillard's (two), J.C. Penney, Sears, Montgomery Ward(6)	254
100%	Green Tree Mall(4) Clarksville, Indiana	1968/1975	1995	781,737	337,741	86.2%	Dillard's, J.C. Penney, Sears, Target	323
100%	Holiday Village Mall(4) Great Falls, Montana	1959/1979	1992	566,888	263,050	77.9%	Herberger's, J.C. Penney, Sears(5)	223
100%	Northgate Mall San Rafael, California	1964/1986	1987	743,267	272,936	93.5%	Macy's, Mervyns, Sears	322
100%	Northwest Arkansas Mall Fayetteville, Arkansas	1972/1998	1997	822,786	309,116	91.9%	Dillard's (two), J.C. Penney, Sears	322
50%	Panorama Mall Panorama, California	1955/1979	1980	328,667	163,667	96.0%	Wal-Mart	288
100%	Queens Center Queens, New York	1973/1995	1991	623,876	155,733	100.0%	J.C. Penney, Macy's	880
100%	Rimrock Mall Billings, Montana	1978/1996	1980	610,152	294,712	96.6%	Dillard's (two), Herbergers, J.C. Penney	295
100%	Salisbury, Centre at Salisbury, Maryland	1990/1995	1990	880,937	275,956	97.0%	Boscov's, J.C. Penney, Hechts, Montgomery Ward, Sears(6)	332

100%	Santa Monica Place Santa Monica, California	1980/1999	1990	560,421	277,171	93.3%	Macy's, Robinsons-May	$381
100%	South Plains Mall Lubbock, Texas	1972/1998	1995	1,145,726	403,939	90.6%	Beall's, Dillards (two), J.C. Penney, Meryvn's, Sears	350
100%	South Towne Center Sandy, Utah	1987/1997	1997	1,235,631	459,119	96.7%	Dillard's, J.C. Penney, Mervyn's, Target, Meier & Frank–ZCMI	317
100%	Valley View Center Dallas, Texas	1973/1996	1996	1,492,614	434,717	95.1%	Dillard's, Foleys, J.C. Penney, Sears	326
100%	Villa Marina Marketplace Marina Del Rey, California	1972/1996	1995	448,262	448,262	98.0%	—	358
100%	Vintage Faire Mall Modesto, California	1977/1996	—	1,029,557	329,638	93.5%	Gottschalks, J.C. Penney, Macy's, Macy's Men's & Home, Sears	361
19%	West Acres Fargo, North Dakota	1972/1986	1992	932,295	379,740	95.3%	Daytons, Herberger's, J.C. Penney, Sears	366
100%	Westside Pavilion Los Angeles, California	1985/1998	2000	756,236	398,108	92.1%	Nordstrom, Robinsons-May	431

	Total/Average at December 31, 2000(a)			20,595,633	8,628,698	92.7%		$366

	Pacific Premier Retail Trust Properties(b):

51%	Cascade Mall Burlington, Washington	1989/1999	1998	584,609	260,373	85.1%	The Bon Marche, Emporium, J.C. Penney, Sears, Target	$291
51%	Kitsap Mall Silverdale, Washington	1985/1999	1997	850,104	340,121	87.9%	The Bon Marche, J.C. Penney, Gottschalks, Mervyn's, Sears	369
51%	Lakewood Mall Lakewood, California	1953/1975	2000	2,098,004	944,038	97.1%	Home Depot, J.C. Penney, Macy's, Mervyn's, Montgomery Ward, Robinsons-May(6)	338
51%	Los Cerritos Center Cerritos, California	1971/1999	1998	1,302,374	501,093	99.7%	Macy's, Mervyn's, Nordstrom, Robinsons-May, Sears	435
51%	Redmond Town Center(4)(7) Redmond, Washington	1997/1999	2000	1,151,454	1,151,454	97.4%	—	333
51%	Stonewood Mall(4) Downey, California	1953/1997	1991	928,159	357,412	86.3%	J.C. Penney, Mervyn's, Robinsons-May, Sears	348
51%	Washington Square Tigard, Oregon	1974/1999	1995	1,374,617	423,276	99.2%	J.C. Penney, Meier & Frank, Mervyn's, Nordstrom, Sears	578

	Total/Average Pacific Premier Retail Trust Properties			8,289,321	3,977,767	95.2%		$394

	SDG Macerich Properties, L.P. Properties:

50%	Eastland Mall(4) Evansville, Indiana	1978/1998	1995	1,072,815	479,860	97.4%	DeJong, Famous Barr, J.C. Penney, Lazarus, Service Merchandise	$373
50%	Empire Mall(4) Sioux Falls, South Dakota	1975/1998	2000	1,305,336	615,229	95.5%	Daytons, J.C. Penney, Gordman's, Kohl's, Sears, Target, Younkers	353
50%	Granite Run Mall Media, Pennsylvania	1974/1998	1993	1,046,790	545,981	98.3%	Boscov's, J.C. Penney, Sears	304
50%	Lake Square Mall Leesburg, Florida	1980/1998	1992	560,968	264,931	86.0%	Belk, J.C. Penney, Sears, Target	262
50%	Lindale Mall Cedar Rapids, Iowa	1963/1998	1997	692,643	387,080	94.0%	Sears, Von Maur, Younkers	284
50%	Mesa Mall Grand Junction, Colorado	1980/1998	1991	855,241	429,424	88.3%	Herberger's, J.C. Penney, Mervyn's, Sears, Target	301
50%	NorthPark Mall Davenport, Iowa	1973/1998	1994	1,042,118	390,585	91.9%	J.C. Penney, Montgomery Ward, Sears, Von Maur, Younkers(6)	241
50%	Rushmore Mall Rapid City, South Dakota	1978/1998	1992	834,403	429,743	94.0%	Herberger's, J.C. Penney, Sears, Target	284
50%	Southern Hills Mall Sioux City, Iowa	1980/1998	—	752,515	438,938	91.9%	Sears, Target, Younkers	288
50%	SouthPark Mall Moline, Illinois	1974/1998	1990	1,034,687	456,631	90.0%	J.C. Penney, Sears, Younkers, Von Maur, Montgomery Ward(6)	217
50%	SouthRidge Mall Des Moines, Iowa	1975/1998	1998	1,008,543	510,737	88.5%	Sears, Younkers, J.C. Penney, Target(5)	214
50%	Valley Mall Harrisonburg, Virginia	1978/1998	1992	482,359	196,296	93.3%	Belk, J.C. Penney, Wal-Mart, Peeble's	288

	Total/Average SDG Macerich Properties, L.P. Properties			10,688,418	5,145,435	92.8%		287

	Grand Total/Average at December 31, 2000(c)			39,573,372	17,751,900	93.3%		$349

	Major Redevelopment Properties:

100%	Crossroads Mall(4) Boulder, Colorado	1963/1979	1998	569,500	251,063	(8)	Foley's, J.C. Penney, Sears(9)	(8)
100%	Pacific View Ventura, California	1965/1996	2000	1,249,233	422,759	(8)	J.C. Penney, Macy's, Montgomery Ward, Robinsons-May, Sears(6)	(8)
100%	Parklane Mall(4) Reno, Nevada	1967/1978	1998	377,561	247,841	(8)	Gottschalks	(8)

	Total Major Redevelopment Properties			2,196,294	921,663

	Grand Total at December 31, 2000			41,769,666	18,673,563

a): Excluding Pacific Premier Retail Trust Properties, SDG Macerich Properties, L.P. Properties and Major Redevelopment Properties
b): Includes five contiguous freestanding properties
c): Excluding Major Redevelopment Properties

(1): The land underlying forty of the Centers is owned in fee entirely by the Company or, in the case of jointly-owned Centers, by the joint venture property partnership or limited liability company. All or part of the land underlying the remaining Centers is owned by third parties and leased to the Company, property partnership or limited liability company pursuant to long-term ground leases. Under the terms of a typical ground lease, the Company, property partnership or limited liability company pays rent for the use of the land and is generally responsible for all costs and expenses associated with the building and improvements. In some cases, the Company, property partnership or limited liability company has an option or right of first refusal to purchase the land. The termination dates of the ground leases range from 2000 to 2070.
(2): Includes GLA attributable to Anchors (whether owned or non-owned) and Mall and Freestanding Stores as of December 31, 2000.
(3): Sales are based on reports by retailers leasing Mall and Freestanding Stores for the year ending December 31, 2000 for tenants which have occupied such stores for a minimum of twelve months. In prior years, this sales per square foot calculation included all non anchor tenants except theaters. In 2000, in order to move towards a consensus in industry practice, sales per square foot are based on tenants 10,000 square feet and under, excluding theaters, that occupied their space for the entire year.
(4): Portions of the land on which the Center is situated are subject to one or more ground leases.
(5): These properties have a vacant Anchor location. The Company is contemplating various replacement tenant/redevelopment opportunities for these vacant sites.
(6): Montgomery Ward filed for bankruptcy on December 28, 2000 and announced the closing of all of its stores including the seven located at the Centers.
(7): The office portion of this mixed-use development does not have retail sales.
(8): Certain spaces have been intentionally held off the market and remain vacant because of major redevelopment plans. As a result, the Company believes the percentage of Mall and Freestanding GLA leased and the sales per square foot at these major redevelopment properties is not meaningful data.
(9): J.C. Penney closed its store at Crossroads Mall in Boulder, Colorado on January 31, 2001. The Company is contemplating various redevelopment opportunities for this vacant site.

MORTGAGE DEBT

The following table sets forth certain information regarding the mortgages encumbering the Centers, including those Centers in which the Company has less than a 100% interest. All mortgage debt is nonrecourse to the Company. The information set forth below is as of December 31, 2000.

Property Pledged As Collateral			Fixed or Floating	Annual Interest Rate		Principal Balance (000's)		Annual Debt Service (000's)		Maturity Date	Balance Due on Maturity (000's)		Earliest Date on which all Notes Can Be Defeased or Be Prepaid

Wholly-Owned Centers:
Capitola Mall			Fixed	9.25	%	$	36,587	$	3,801	12/15/2001	$	36,193	Any Time
Carmel Plaza			Fixed	8.18	%		28,626		2,421	5/1/2009		25,642	5/26/2001
Chesterfield Towne Center(1)			Fixed	9.07	%		63,587		6,580	1/1/2024		1,087	1/1/2006
Citadel			Fixed	7.20	%		72,091		6,648	1/1/2008		59,962	1/1/2003
Corte Madera, Village at			Fixed	7.75	%		71,313		6,190	11/1/2009		62,941	10/4/2003
Crossroads Mall–Boulder			Fixed	7.08	%		34,476		3,948	12/15/2010		28,107	Any Time
Fresno Fashion Fair			Fixed	6.52	%		69,000		4,561	8/10/2008		62,890	Any Time
Greeley Mall			Fixed	8.50	%		15,328		2,245	9/15/2003		12,519	Any Time
Green Tree Mall/Crossroads–OK/Salisbury			Fixed	7.23	%		117,714		8,499	3/5/2004		117,714	Any Time
Holiday Village			Fixed	6.75	%		17,000		1,147	4/1/2001		17,000	Any Time
Northgate Mall			Fixed	6.75	%		25,000		1,688	4/1/2001		25,000	Any Time
Northwest Arkansas Mall			Fixed	7.33	%		61,011		5,209	1/10/2009		49,304	1/1/2004
Parklane Mall			Fixed	6.75	%		20,000		1,350	4/1/2001		20,000	Any Time
Queens Center			Fixed	6.88	%		99,300		7,595	3/1/2009		88,651	2/4/2002
Rimrock Mall			Fixed	7.70	%		29,845		2,924	1/1/2003		28,496	Any Time
Santa Monica Place(2)			Fixed	7.70	%		84,939		7,272	11/1/2010		75,439	10/1/2003
South Plains Mall			Fixed	8.22	%		64,077		5,448	3/1/2009		57,557	2/17/2002
South Towne Center			Fixed	6.61	%		64,000		4,289	10/10/2008		64,000	7/24/2001
Valley View Mall			Fixed	7.89	%		51,000		4,080	10/10/2006		51,000	Any Time
Villa Marina Marketplace			Fixed	7.23	%		58,000		4,249	10/10/2006		58,000	Any Time
Vintage Faire Mall(3)			Fixed	7.89	%		69,853		6,099	9/1/2010		61,372	Any Time
Westside Pavilion			Fixed	6.67	%		100,000		6,529	7/1/2008		91,133	Any Time

		Total–Wholly Owned Centers				$	1,252,747

Joint Venture Centers (at pro rata share):
Broadway Plaza (50%)(4)			Fixed	6.68	%		36,032		3,089	8/1/2008		29,315	Any Time
Pacific Premier Retail Trust (51%)(4):
	Cascade Mall		Fixed	6.50	%		13,261		1,461	8/1/2014		141	Any Time
	Kitsap Mall/Kitsap Place(5)		Fixed	8.06	%		31,110		2,755	6/1/2010		28,143	5/13/2001
	Lakewood Mall(6)		Fixed	7.20	%		64,770		4,661	8/10/2005		64,770	Any Time
	Lakewood Mall(7)		Floating	9.00	%		8,224		372	7/25/2002		8,224	Any Time
	Los Cerritos Center		Fixed	7.13	%		60,174		5,054	7/1/2006		54,955	6/1/2002
	North Point Plaza		Fixed	6.50	%		1,821		190	12/1/2015		47	2/7/2004
	Redmond Town Center–Retail		Fixed	6.50	%		32,176		2,686	2/1/2011		23,850	Any Time
	Redmond Town Center–Office(8)		Fixed	6.77	%		45,500		3,575	7/10/2009		26,223	6/1/2002
	Stonewood Mall(9)		Fixed	7.41	%		39,653		3,298	12/11/2010		36,192	12/1/2004
	Washington Square		Fixed	6.70	%		59,441		5,051	1/1/2009		48,289	3/1/2004
	Washington Square Too		Fixed	6.50	%		6,318		634	12/1/2016		116	2/17/2004
SDG Macerich Properties L.P. (50%)(4)(10)			Fixed	6.54	%		186,607		13,440	5/15/2006		150,000	Any Time
SDG Macerich Properties L.P. (50%)(4)(10)			Floating	7.21	%		92,250		6,568	5/15/2003		92,250	Any Time
SDG Macerich Properties L.P. (50%)(4)(10)			Floating	7.08	%		40,700		1,425	5/15/2006		40,700	Any Time
West Acres Center (19%)(4)			Fixed	6.52	%		7,600		495	1/1/2009		7,538	1/4/2002

		Total–Joint Venture Centers(4)				$	725,637

		Total–All Centers				$	1,978,384

Notes:

(1): The annual debt service payment represents the payment of principal and interest. In addition, contingent interest, as defined in the loan agreement, may be due to the extent that 35% of the gross receipts (as defined in the loan agreement) exceeds a base amount specified therein. Contingent interest recognized was $416,814, $385,556 and $387,101 for the years ended December 31, 2000, 1999 and 1998.
(2): On October 2, 2000, the Company refinanced this loan with a 10 year fixed rate $85.0 million loan bearing interest at 7.70%. The prior loan bore interest at LIBOR plus 1.75%.
(3): On August 31, 2000, the Company refinanced the debt on Vintage Faire. The prior loan was paid in full and a new note was issued for $70.0 million bearing interest at a fixed rate of 7.89% and maturing September 2010. The Company incurred a loss on early extinguishment of the prior debt in 2000 of $983,745.
(4): Reflects the Company's pro rata share of debt.
(5): In connection with the acquisition of this Center, the joint venture assumed $39.4 million of debt. At acquisition, this debt was recorded at the fair value of $41.5 million which included an unamortized premium of $2.1 million. This premium was being amortized as interest expense over the life of the loan using the effective interest method. The joint venture's monthly debt service was $349,000 and was calculated using an 8.60% interest rate. At December 31, 1999, the joint venture's unamortized premium was $1.4 million. On June 1, 2000, the joint venture paid off in full the old debt and a new note was issued for $61.0 million bearing interest at a fixed rate of 8.06% and maturing June 2010. The new loan is interest only until December 31, 2001. Effective January 1, 2002, monthly principal and interest of $450,150 will be payable through maturity. The new debt is cross-collateralized by Kitsap Mall and Kitsap Place.
(6): In connection with the acquisition of this property, the joint venture assumed $127.0 million of collateralized fixed rate notes (the "Notes"). The Notes bear interest at an average fixed rate of 7.20% and mature in August 2005. The Notes require the joint venture to deposit all cash flow from the property operations with a trustee to meet its obligations under the Notes. Cash in excess of the required amount, as defined, is released. Included in cash and cash equivalents is $750,000 of restricted cash deposited with the trustee at December 31, 2000 and at December 31, 1999.
(7): On July 28, 2000, the joint venture placed a $16.1 million floating rate note on the property bearing interest at LIBOR plus 2.25% and maturing July 2002. At December 31, 2000, the total interest rate was 9.0%.
(8): Concurrent with the acquisition, the joint venture placed $76.7 million of debt and obtained a construction loan for an additional $16.0 million. Principal is drawn on the construction loan as costs are incurred. As of December 31, 2000 and December 31, 1999, $15.0 million and $6.7 million, respectively; of principal has been drawn under the construction loan.
(9): On December 1, 2000, the joint venture refinanced the debt on Stonewood Mall. The prior loan was paid in full and a new note was issued for $77.8 million bearing interest at a fixed rate of 7.41% and maturing December 11, 2010. The joint venture incurred a loss on early extinguishment of the old debt in 2000 of $375,000.
(10): In connection with the acquisition of these Centers, the joint venture assumed $485.0 million of mortgage notes payable which are secured by the properties. At acquisition, the $300.0 million fixed rate portion of this debt reflected a fair value of $322.7 million, which included an unamortized premium of $22.7 million. This premium is being amortized as interest expense over the life of the loan using the effective interest method. At December 31, 2000 and December 31, 1999, the unamortized balance of the debt premium was $16.1 million and $18.6 million, respectively. This debt is due in May 2006 and requires monthly payments of $1.9 million. $184.5 million of this debt is due in May 2003 and requires monthly interest payments at a variable weighted average rate (based on LIBOR) of 7.21% and 6.96% at December 31, 2000 and December 31, 1999, respectively. This variable rate debt is covered by an interest rate cap

agreement which effectively prevents the interest rate from exceeding 11.53%. On April 12, 2000, the joint venture issued $138.5 million of additional mortgage notes which are secured by the properties and are due in May 2006. $57.1 million of this debt requires fixed monthly interest payments of $387,000 at a weighted average rate of 8.13% while the floating rate notes of $81.4 million require monthly interest payments at variable weighted average rate (based on LIBOR) of 7.08%. This variable rate debt is covered by an interest rate cap agreement which effectively prevents the interest rate from exceeding 11.83%.

The Company has a credit facility of $150 million with a maturity of May, 2002, bearing interest at LIBOR plus 1.15% at December 31, 2000. The line of credit was extended in March 2001 with the new interest rate on such credit facility fluctuating between 1.35% and 1.80% over LIBOR. As of December 31, 2000 and December 31, 1999, $59.0 million and $57.4 million of borrowings were outstanding under this line of credit at interest rates of 7.90% and 7.65%, respectively.

Additionally, as of December 31, 2000, the Company issued $10.8 million in letters of credit guaranteeing performance by the Company of certain obligations. The Company does not believe that these letters of credit will result in a liability to the Company.

During January 1999, the Company entered into a bank construction loan agreement to fund $89.2 million of costs related to the redevelopment of Pacific View. The loan bore interest at LIBOR plus 2.25% through 2000. In January 2001, the interest rate was reduced to LIBOR plus 1.75% and the loan matures in February 2002. Principal was drawn as construction costs were incurred. As of December 31, 2000 and 1999, $88.3 and $72.7 million, respectively, of principal has been drawn under the loan.

In addition, the Company had a note payable of $30.6 million due in February 2000 payable to the seller of the acquired portfolio. The note bore interest at 6.5%. The loan was paid in full on February 18, 2000.

During 1997, the Company issued and sold $161.4 million of convertible subordinated debentures (the "Debentures") due 2002. The Debentures, which were sold at par, bear interest at 7.25% annually (payable semi-annually) and are convertible into common stock at any time, on or after 60 days, from the date of issue at a conversion price of $31.125 per share. In November and December 2000, the Company purchased and retired $10.6 million of the Debentures. The Company recorded a gain on early extinguishment of debt of $1.0 million related to the transaction. The Debentures mature on December 15, 2002 and are callable by the Company after June 15, 2002 at par plus accrued interest.

ITEM 3. LEGAL PROCEEDINGS.

The Company, the Operating Partnership, the Management Companies and their respective affiliates are not currently involved in any material litigation nor, to the Company's knowledge, is any material litigation currently threatened against such entities or the Centers, other than routine litigation arising in the ordinary course of business, most of which is expected to be covered by liability insurance. For information about certain environmental matters, see "Business of the Company–Environmental Matters."

ITEM 4. SUBMISSION OF MATTER TO A VOTE OF SECURITY HOLDERS.

None.

Part II

ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS.

The common stock of the Company is listed and traded on the New York Stock Exchange ("NYSE") under the symbol "MAC". The common stock began trading on March 10, 1994 at a price of $19 per share. In 2000, the Company's shares traded at a high of $24³/4 and a low of $18⁷/16.

As of February 27, 2001, there were approximately 534 stockholders of record. The following table shows high and low closing prices per share of common stock during each quarter in 1999 and 2000 and dividends/distributions per share of common stock declared and paid by quarter:

	Market Quotation Per Share
	Market Quotation Per Share						Dividends/Distributions Declared and Paid
Quarters Ended	High			Low			Dividends/Distributions Declared and Paid

March 31, 1999	$	26	¹¹/16	$	22	⁷/16	$0.485
June 30, 1999		27	¹/16		22	¹/8	0.485
September 30, 1999		26	⁵/8		21	¹/2	0.485
December 31, 1999		22	⁵/8		17	¹³/16	0.51
March 31, 2000	$	23	¹⁵/16	$	19		$0.51
June 30, 2000		24			20	⁷/16	0.51
September 30, 2000		24	³/4		20	¹/4	0.51
December 31, 2000		20	³/4		18	⁷/16	0.53

The Company has issued 3,627,131 shares of its Series A cumulative convertible redeemable preferred stock ("Series A Preferred Stock"), and 5,487,471 shares of its Series B cumulative convertible redeemable preferred stock ("Series B Preferred Stock"). The Series A Preferred Stock and Series B Preferred Stock can be converted into shares of common stock on a one-to-one basis. There is no established public trading market for either the Series A Preferred Stock or the Series B Preferred Stock. All of the outstanding shares of the Series A Preferred Stock are held by Security Capital Preferred Growth Incorporated. All of the outstanding shares of the Series B Preferred Stock are held by Ontario Teachers' Pension Plan Board. The Series A Preferred Stock and Series B Preferred Stock were issued on February 25, 1998 and June 16, 1998, respectively. The following table shows the dividends per share of preferred stock declared and paid for each quarter in 1999 and 2000. Preferred stock dividends are accrued quarterly and paid in arrears. No dividends will be declared or paid on any class of common or other junior stock to the extent that dividends on Series A Preferred Stock and Series B Preferred Stock have not been declared and/or paid.

	Series A Preferred Stock Dividends		Series B Preferred Stock Dividends
Quarters Ended	Declared	Paid	Declared	Paid

March 31, 1999	$0.485	$0.485	$0.485	$0.485
June 30, 1999	0.485	0.485	0.485	0.485
September 30, 1999	0.510	0.485	0.510	0.485
December 31, 1999	0.510	0.510	0.510	0.510

Quarters Ended

March 31, 2000	$0.510	$0.510	$0.510	$0.510
June 30, 2000	0.510	0.510	0.510	0.510
September 30, 2000	0.530	0.510	0.530	0.510
December 31, 2000	0.530	0.530	0.530	0.530

ITEM 6. SELECTED FINANCIAL DATA.

The following sets forth selected financial data for the Company on a historical basis. The following data should be read in conjunction with the financial statements (and the notes thereto) of the Company and "Management's Discussion And Analysis of Financial Condition and Results of Operations" each included elsewhere in this Form 10-K.

The Selected Financial Data is presented on a consolidated basis. The limited partnership interests in the Operating Partnership (not owned by the REIT) are reflected as minority interest. Centers and entities in which the Company does not have a controlling ownership interest (Panorama Mall, North Valley Plaza, Broadway Plaza, Manhattan Village, MerchantWired, LLC, Pacific Premier Retail Trust, SDG Macerich Properties, L.P. and West Acres Shopping Center) are referred to as the "Joint Venture Centers", and along with the Management Companies, are reflected in the selected financial data under the equity method of accounting. Accordingly, the net income from the Joint Venture Centers and the Management Companies that is allocable to the Company is included in the statement of operations as "Equity in income (loss) of unconsolidated joint ventures and Management Companies."

(All amounts in thousands, except per share data)
			The Company
			2000			1999			1998			1997			1996

OPERATING DATA:
Revenues:
	Minimum rents		$	195,236		$	204,568		$	179,710		$	142,251		$	99,061
	Percentage rents			12,558			15,106			12,856			9,259			6,142
	Tenant recoveries			104,125			99,126			86,740			66,499			47,648
	Other			8,173			8,644			4,555			3,205			2,208

		Total revenues		320,092			327,444			283,861			221,214			155,059
Shopping center expenses				101,674			100,327			89,991			70,901			50,792
REIT general and administrative expenses				5,509			5,488			4,373			2,759			2,378
Depreciation and amortization				61,647			61,383			53,141			41,535			32,591
Interest expense				108,447			113,348			91,433			66,407			42,353

Income before minority interest, unconsolidated entities, extraordinary item and cumulative effect of change in accounting principle				42,815			46,898			44,923			39,612			26,945
Minority interest(1)				(12,168	)		(38,335	)		(12,902	)		(10,567	)		(10,975	)
Equity in income (loss) of unconsolidated joint ventures and management companies(2)				30,322			25,945			14,480			(8,063	)		3,256
(Loss) gain on sale of assets				(2,773	)		95,981			9			1,619			—
Extraordinary loss on early extinguishment of debt				(304	)		(1,478	)		(2,435	)		(555	)		(315	)
Cumulative effect of change in accounting principle(3)				(963	)		—			—			—			—

Net income				56,929			129,011			44,075			22,046			18,911
Less preferred dividends				18,958			18,138			11,547			—			—

Net income available to common stockholders			$	37,971		$	110,873		$	32,528		$	22,046		$	18,911

Earnings per share–basic:(4)
	Income before extraordinary item and cumulative effect of change in accounting principle		$	1.14		$	3.30		$	1.14		$	0.86		$	0.92
	Extraordinary item			(0.01	)		(0.04	)		(0.08	)		(0.01	)		(0.01	)
	Cumulative effect of change in accounting principle			(0.02	)		—			—			—			—

		Net income per share–basic	$	1.11		$	3.26		$	1.06		$	0.85		$	0.91

Earnings per share–diluted:(4)(7)(8)
	Income before extraordinary item and cumulative effect of change in accounting principle		$	1.14		$	3.01		$	1.11		$	0.86		$	0.90
	Extraordinary item			(0.01	)		(0.02	)		(0.05	)		(0.01	)		(0.01	)
	Cumulative effect of change in accounting principle			(0.02	)		—			—			—			—

Net income per share–diluted			$	1.11		$	2.99		$	1.06		$	0.85		$	0.89

OTHER DATA:
Funds from operations–diluted(5)			$	167,244		$	164,302		$	120,518		$	83,427		$	62,428
EBITDA(6)			$	212,909		$	221,629		$	189,497		$	147,554		$	101,889
EBITDA, including joint ventures at pro rata(6)			$	314,628		$	301,803		$	230,362		$	154,140		$	109,266
Cash flows provided by (used in):
	Operating activities		$	121,220		$	139,576		$	85,176		$	78,476		$	80,431
	Investing activities		$	1,698		$	(247,685	)	$	(761,147	)	$	(215,006	)	$	(296,675	)
	Financing activities		$	(127,100	)	$	123,421		$	675,960		$	146,041		$	216,317
Number of centers at year end				51			52			47			30			26
Weighted average number of shares outstanding–basic(7)				45,050			46,130			43,016			37,982			32,934
Weighted average number of shares outstanding–diluted(5)(7)(8)				59,319			60,893			43,628			38,403			33,320
Cash distributions declared per common share			$	2.06		$	1.965		$	1.865		$	1.78		$	1.70
FFO per share–diluted(5)			$	2.819		$	2.698		$	2.426		$	2.172		$	1.874

(All amounts in thousands)
	The Company
	December 31,
	2000		1999		1998		1997		1996

BALANCE SHEET DATA:
Investment in real estate (before accumulated depreciation)	$	2,228,468	$	2,174,535	$	2,213,125	$	1,607,429	$	1,273,085
Total assets	$	2,337,242	$	2,404,293	$	2,322,056	$	1,505,002	$	1,187,753
Total mortgage, notes and debentures payable	$	1,550,935	$	1,561,127	$	1,507,118	$	1,122,959	$	789,239
Minority interest(1)	$	120,500	$	129,295	$	132,177	$	100,463	$	112,242
Series A and Series B Preferred Stock	$	247,336	$	247,336	$	247,336		—		—
Common stockholders' equity	$	362,272	$	401,254	$	363,424	$	216,295	$	237,749

(1): "Minority Interest" reflects the ownership interest in the Operating Partnership not owned by the REIT.
(2): Unconsolidated joint ventures include all Centers and entities in which the Company does not have a controlling ownership interest and the Management Companies. The Management Companies have been reflected using the equity method.
(3): In December 1999, the Securities and Exchange Committee issued Staff Accounting Bulletin 101, "Revenue Recognition in Financial Statements" ("SAB 101"), which became effective for periods beginning after December 15, 1999. This bulletin modified the timing of revenue recognition for percentage rent received from tenants. This change will defer recognition of a significant amount of percentage rent for the first three calendar quarters into the fourth quarter. The Company applied this change in accounting principle as of January 1, 2000. The cumulative effect of this change in accounting principle at the adoption date of January 1, 2000, including the pro rata share of joint ventures, was approximately $1.8 million. If the Company had recorded percentage rent using the methodology prescribed in SAB 101, the Company's net income available to common stockholders would have been reduced by $1.3 million or $0.02 per diluted share for the year ended December 31, 1999.
(4): Earnings per share is based on SFAS No. 128 for all years presented.
(5): Funds from Operations ("FFO") represents net income (loss) (computed in accordance with generally accepted accounting principles ("GAAP")), excluding gains (or losses) from debt restructuring, sales or write-down of assets and cumulative effect of change in accounting principle, plus depreciation and amortization (excluding depreciation on personal property and amortization of loan and financial instrument costs), and after adjustments for unconsolidated entities. Adjustments for unconsolidated entities are calculated on the same basis. FFO does not represent cash flow from operations as defined by GAAP and is not necessarily indicative of cash available to fund all cash flow needs. The computation of FFO–diluted and diluted average number of shares outstanding includes the effect of outstanding common stock options and restricted stock using the treasury method. The convertible debentures are dilutive for the twelve month periods ending December 31, 2000 and 1999 and are included in the FFO calculation. On February 25, 1998, the Company sold $100 million of its Series A Preferred Stock. On June 17, 1998, the Company sold $150 million of its Series B Preferred Stock. The preferred stock can be converted on a one-for-one basis for common stock. The preferred stock was dilutive to FFO in 2000, 1999 and 1998 and the preferred stock and the convertible debentures were dilutive to net income in 1999.
(6): EBITDA represents earnings before interest, income taxes, depreciation, amortization, minority interest, equity in income (loss) of unconsolidated entities, extraordinary items, gain (loss) on sale of assets, preferred dividends and cumulative

effect of change in accounting principle. This data is relevant to an understanding of the economics of the shopping center business as it indicates cash flow available from operations to service debt and satisfy certain fixed obligations. EBITDA should not be construed by the reader as an alternative to operating income as an indicator of the Company's operating performance, or to cash flows from operating activities (as determined in accordance with GAAP) or as a measure of liquidity.

(7): Assumes that all OP Units are converted to common stock.
(8): Assumes issuance of common stock for in-the-money options and restricted stock calculated using the Treasury method in accordance with SFAS No. 128 for all years presented.

ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

GENERAL BACKGROUND AND PERFORMANCE MEASUREMENT

The Company believes that the most significant measures of its operating performance are Funds from Operations and EBITDA. Funds from Operations is defined as net income (loss) (computed in accordance with GAAP), excluding gains (or losses) from debt restructuring, sales or write-down of assets and cumulative effect of change in accounting principle, plus depreciation and amortization (excluding depreciation on personal property and amortization of loan and financial instrument costs), and after adjustments for unconsolidated entities. Adjustments for unconsolidated entities are calculated on the same basis. Funds from Operations does not represent cash flow from operations as defined by GAAP and is not necessarily indicative of cash available to fund all cash flow needs.

EBITDA represents earnings before interest, income taxes, depreciation, amortization, minority interest, equity in income (loss) of unconsolidated entities, extraordinary items, gain (loss) on sale of assets, preferred dividends and cumulative effect of change in accounting principle. This data is relevant to an understanding of the economics of the shopping center business as it indicates cash flow available from operations to service debt and satisfy certain fixed obligations. EBITDA should not be construed as an alternative to operating income as an indicator of the Company's operating performance, or to cash flows from operating activities (as determined in accordance with GAAP) or as a measure of liquidity. While the performance of individual Centers and the Management Companies determines EBITDA, the Company's capital structure also influences Funds from Operations. The most important component in determining EBITDA and Funds from Operations is Center revenues. Center revenues consist primarily of minimum rents, percentage rents and tenant expense recoveries. Minimum rents will increase to the extent that new leases are signed at market rents that are higher than prior rents. Minimum rents will also fluctuate up or down with changes in the occupancy level. Additionally, to the extent that new leases are signed with more favorable expense recovery terms, expense recoveries will increase.

Percentage rents generally increase or decrease with changes in tenant sales. As leases roll over, however, a portion of historical percentage rent is often converted to minimum rent. It is therefore common for percentage rents to decrease as minimum rents increase. Accordingly, in discussing financial performance, the Company combines minimum and percentage rents in order to better measure revenue growth.

The following discussion is based primarily on the consolidated financial statements of the Company for the years ended December 31, 2000, 1999 and 1998. The following discussion compares the activity for the year ended December 31, 2000 to results of operations for the year ended December 31, 1999.

Also included is a comparison of the activities for the year ended December 31, 1999 to the results for the year ended December 31, 1998. This information should be read in conjunction with the accompanying consolidated financial statements and notes thereto.

FORWARD-LOOKING STATEMENTS

This annual report on Form 10-K contains or incorporates statements that constitute forward-looking statements. Those statements appear in a number of places in this Form 10-K and include statements regarding, among other matters, the Company's growth and acquisition opportunities, the Company's acquisition strategy, regulatory matters pertaining to compliance with governmental regulations and other factors affecting the Company's financial condition or results of operations. Words such as "expects," "anticipates," "intends," "projects," "predicts," "plans," "believes," "seeks," "estimates," and "should" and variations of these words and similar expressions, are used in many cases to identify these forward-looking statements. Stockholders are cautioned that any such forward-looking statements are not guarantees of future performance and involve risks, uncertainties and other factors that may cause actual results, performance or achievements of the Company or industry to vary materially from the Company's future results, performance or achievements, or those of the industry, expressed or implied in such forward-looking statements. Such factors include, among others, general industry economic and business conditions, which will, among other things, affect demand for retail space or retail goods, availability and creditworthiness of current and prospective tenants, tenant bankruptcies, lease rates and terms, availability and cost of financing, interest rate fluctuations and operating expenses; adverse changes in the real estate markets including, among other things, competition from other companies, retail formats and technology, risks of real estate development, acquisitions and dispositions; governmental actions and initiatives and environmental and safety requirements. The Company will not update any forward-looking information to reflect actual results or changes in the factors affecting the forward-looking information.

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following table reflects the Company's acquisitions in 1998 and 1999. There were no acquisitions in 2000.

	Date Acquired	Location

"1998 Acquisition Centers":

SDG Macerich Properties, L.P.(*)	February 27, 1998	Twelve properties in eight states
South Plains Mall	June 19, 1998	Lubbock, Texas
Westside Pavilion	July 1, 1998	Los Angeles, California
Village at Corte Madera	June-July 1998	Corte Madera, California
Carmel Plaza	August 10, 1998	Carmel, California
Northwest Arkansas Mall	December 15, 1998	Fayetteville, Arkansas

"1999 Acquisition Centers":

Pacific Premier Retail Trust(*)	February 18, 1999	Three regional malls, retail component of a mixed-use development and five contiguous properties in Washington and Oregon. The office component of the mixed-used development was acquired July 12, 1999.
PPR Albany Plaza LLC() PPR Eastland Plaza LLC()	February 18, 1999	Two non-contiguous community shopping Centers located in Oregon and Ohio, respectively.
Los Cerritos Center(*)	June 2, 1999	Cerritos, California
Santa Monica Place	October 29, 1999	Santa Monica, California

(*): denotes the Company owns its interests in these Centers through an unconsolidated joint venture or through one of the Management Companies.

The financial statements include the results of these Centers for periods subsequent to their acquisition.

On February 18, 1999, the Company formed Pacific Premier Retail Trust ("PPRT"), a 51/49 joint venture with Ontario Teachers' Pension Plan Board ("Ontario Teachers"), which closed on the acquisition of three regional malls, the retail component of a mixed-use development, five contiguous properties and two non-contiguous community shopping centers comprising approximately 3.6 million square feet for a total purchase price of approximately $427.0 million. On July 12, 1999, the Company closed on the acquisition of the office component of the mixed-use development for a purchase price of approximately $111.0 million.

On June 2, 1999, Macerich Cerritos, LLC ("Cerritos"), a wholly-owned subsidiary of Macerich Management Company, acquired Los Cerritos Center, a 1,302,374 square foot super regional mall in Cerritos, California. The total purchase price was $188.0 million, which was funded with $120.0 million of debt placed concurrently with the closing and a $70.8 million loan from the Company.

On October 26, 1999, 49% of the membership interests of Macerich Stonewood, LLC ("Stonewood"), Cerritos and Macerich Lakewood, LLC ("Lakewood"), were sold to Ontario Teachers' and concurrently

Ontario Teachers' and the Company contributed their 99% collective membership interests in Stonewood and Cerritos and 100% of their collective membership interests in Lakewood to PPRT, a real estate investment trust, owned approximately 51% by the Company and 49% by Ontario Teachers. Lakewood, Stonewood, and Cerritos own Lakewood Mall, Stonewood Mall and Los Cerritos Center, respectively. The total value of the transaction was approximately $535.0 million. The properties were contributed to PPRT subject to existing debt of $322.0 million. The net cash proceeds to the Company were approximately $104.0 million, which were used for reduction of debt and for general corporate purposes. Lakewood and Stonewood are referred to herein as the "Contributed JV Assets."

On October 27, 1999, Albany Plaza, a 145,462 square foot community center, which was owned 51% by the Macerich Management Company, was sold.

On October 29, 1999, Macerich Santa Monica, LLC, a wholly-owned indirect subsidiary of the Company, acquired Santa Monica Place, a 560,421 square foot regional mall located in Santa Monica, California. The total purchase price was $130.8 million, which was funded with $80.0 million of debt placed concurrently with the closing with the balance funded from proceeds from the PPRT transaction described above. Santa Monica Place is referred to herein as the "1999 Acquisition Center."

On November 12, 1999, Eastland Plaza, a 65,313 square foot community center, which was 51% owned by the Macerich Management Company, was sold.

On November 16, 1999, the Company sold Huntington Center. Huntington Center is a shopping center located in Huntington Beach, California, that was purchased by the Company in December 1996. The Center was purchased as part of a package with Fresno Fashion Fair in Fresno, California, and Pacific View (formerly known as Buenaventura Mall) in Ventura, California. The Center was sold for $48.0 million and the net cash proceeds from the sale were used for general corporate purposes.

On September 30, 2000, Manhattan Village, a 551,847 square foot, regional shopping center, which was owned 10% by the Operating Partnership, was sold. The joint venture sold the property for $89.0 million, including a note receivable from the buyer for $79.0 million at an interest rate of 8.75% payable monthly, until its maturity date of September 30, 2001.

The properties acquired by SDG Macerich Properties, L.P., PPRT and the Management Companies ("Joint Venture Acquisitions") are reflected using the equity method of accounting. The results of these acquisitions are reflected in the consolidated results of operations of the Company in equity in income of unconsolidated joint ventures and the Management Companies.

Many of the variations in the results of operations, discussed below, occurred due to the Joint Venture Acquisition Centers, the 1999 and 1998 Acquisition Centers and the partial sale and contribution of the Contributed JV Assets to PPRT during 1999. Many factors impact the Company's ability to acquire additional properties; including the availability and cost of capital, the overall debt to market capitalization level, interest rates and availability of potential acquisition targets that meet the Company's criteria. There were no acquisitions in 2000 because of market conditions, including the cost of capital and the lack of attractive opportunities. Furthermore, management currently anticipates no acquisitions for 2001. Accordingly, management is uncertain whether in future years that there will be similar acquisitions and corresponding increases in equity in income of unconsolidated joint ventures

and the Management Companies and funds from operations that occurred as a result of the Joint Venture Acquisition Centers and the 1998 and 1999 Acquisition Centers. Pacific View (formerly known as Buenaventura Mall), Crossroads Mall-Boulder and Parklane Mall are currently under redevelopment and are referred to herein as the "Redevelopment Centers." All other Centers, excluding the 1999 and 1998 Acquisition Centers, the Joint Venture Acquisition Centers, the Contributed JV Assets and Redevelopment Centers, are referred to herein as the "Same Centers," unless the context otherwise requires.

Revenues include rents attributable to the accounting practice of straight lining of rents which requires rent to be recognized each year in an amount equal to the average rent over the term of the lease, including fixed rent increases over that period. The amount of straight lined rents, included in consolidated revenues, recognized in 2000 was $0.9 million compared to $2.6 million in 1999. Additionally, the Company recognized through equity in income of unconsolidated joint ventures, $2.2 million as its pro rata share of straight lined rents from joint ventures in 2000 compared to $2.3 million in 1999. These decreases resulted from the Company structuring the majority of its new leases using annual Consumer Price Index ("CPI") increases, which generally do not require straight lining treatment. The Company believes that using CPI increases, rather than fixed contractual rent increases, results in revenue recognition that more closely matches the cash revenue from each lease and will provide more consistent rent growth throughout the term of the leases.

The bankruptcy and/or closure of an Anchor, or its sale to a less desirable retailer, could adversely affect customer traffic in a Center and thereby reduce the income generated by that Center. Furthermore, the closing of an Anchor could, under certain circumstances, allow certain other Anchors or other tenants to terminate their leases or cease operating their stores at the Center or otherwise adversely affect occupancy at the Center. Other retail stores at the Centers may also seek the protection of bankruptcy laws and/or close stores, which could result in the termination of such tenants and thus cause a reduction in cash flow generated by the Centers.

In addition, the Company's success in the highly competitive real estate shopping center business depends upon many other factors, including general economic conditions, the ability of tenants to make rent payments, increases or decreases in operating expenses, occupancy levels, changes in demographics, competition from other centers and forms of retailing and the ability to renew leases or relet space upon the expiration or termination of leases.

ASSETS AND LIABILITIES

Total assets decreased to $2,337 million at December 31, 2000 compared to $2,404 million at December 31, 1999 and $2,322 million at December 31, 1998. During that same period, total liabilities increased from $1,579 million in 1998 to $1,626 million in 1999 and decreased to $1,607 million in 2000. These changes were primarily a result of the 1999 and 1998 Acquisition Centers, the partial sale and contribution of the Contributed JV Assets to PPRT and related debt transactions.

On June 1, 2000, the PPRT joint venture refinanced the debt on Kitsap Mall. A $38.0 million loan at an effective interest rate of 8.60%, was paid in full and a new note was issued for $61.0 million bearing interest at a fixed rate of 8.06% and maturing June 1, 2010.

C. Other Events
On September 30, 2000, Manhattan Village, a 551,847 square foot regional shopping center, 10% which was owned by the Operating Partnership, was sold. The joint venture sold the property for $89.0 million, including a note receivable from the buyer for $79.0 million at an interest rate of 8.75% payable monthly, until its maturity date of September 30, 2001.

During 2000, the Company entered into a ten-year energy management and procurement contract with Enron. Enron will manage the supply of electricity and natural gas and provide energy management services to a majority of the Company's Centers.

During 2000, the Company invested $4.3 million in and became a founding member of MerchantWired. MerchantWired is providing a broadband communications network to retail property owners and retailers.

Comparison of Years Ended December 31, 2000 and 1999

Revenues
Minimum and percentage rents decreased by 5.4% to $207.8 million in 2000 from $219.7 million in 1999. Approximately $24.6 million of the decrease related to the contribution of 100% and 99% of the membership interests of Lakewood Mall and Stonewood Mall, respectively, to the PPRT joint venture on October 26, 1999. The Company's pro rata share of results from those assets subsequent to the contribution to PPRT is reflected in Income from Unconsolidated Joint Ventures. The decreases due to the Contributed JV Assets are partially offset by revenue increases of $8.2 million relating to the 1999 acquisition of Santa Monica Place.

In December 1999, the Securities and Exchange Committee issued Staff Accounting Bulletin 101, "Revenue Recognition in Financial Statements" ("SAB 101"), which became effective for periods beginning after December 15, 1999. This bulletin modified the timing of revenue recognition for percentage rent received from tenants. This change will defer recognition of a significant amount of percentage rent for the first three calendar quarters into the fourth quarter. The Company applied this change in accounting principle as of January 1, 2000. The cumulative effect of this change in accounting principle at the adoption date of January 1, 2000, including pro rata share of joint ventures, was approximately $1.8 million.

Tenant recoveries increased to $104.1 million in 2000 from $99.1 million in 1999. The increase resulted from the impact of Santa Monica Place, Pacific View and from the Same Centers. These increases were partially offset by revenue decreases of $7.7 million resulting from the Contributed JV Assets.

Other income decreased to $8.2 million in 2000 from $8.6 million in 1999.

Expenses
Shopping center expenses increased to $101.7 million in 2000 compared to $100.3 million in 1999. Approximately $6.4 million of the increase resulted from the 1999 acquisition of Santa Monica Place, $3.4 million of the increase resulted from increased property taxes and recoverable expenses at the Same Centers. These increases were partially offset by a decrease of $8.1 million from the Contributed JV Assets.

Interest Expense
Interest expense decreased to $108.4 million in 2000 from $113.3 million in 1999. Approximately $7.5 million of the decrease is from the Contributed JV Assets. This decrease is partially offset by the acquisition activity in 1999, which was partially funded with secured debt and borrowings under the Company's line of credit.

Depreciation and Amortization
Depreciation and amortization increased to $61.6 million in 2000 from $61.4 million in 1999. Approximately $2.5 million of the increase relates primarily to the 1999 Acquisition Center, which is partially offset by a decrease of $4.6 million relating to the Contributed JV Assets.

Minority Interest
The minority interest represents the 24.3% weighted average interest of the Operating Partnership that was not owned by the Company during 2000. This compares to 26.3% not owned by the Company during 1999.

Income From Unconsolidated Joint Ventures and Management Companies
The income from unconsolidated joint ventures and the Management Companies was $30.3 million for 2000, compared to income of $25.9 million in 1999. A total of $8.2 million of the increase is attributable to the 1999 Joint Venture Acquisitions and the Contributed JV Assets. Additionally, $1.1 million is attributable to the gain from the sale of Manhattan Village on September 30, 2000. These increases are partially offset by the cumulative effect of the change in accounting principle for percentage rent required by SAB 101 of $0.8 million and additional interest expense from the debt restructuring at SDG Macerich Properties, L.P. of $4.8 million.

Gain (loss) on Sale of Assets
A loss of $2.8 million in 2000 compares to a gain of $96.0 million in 1999. The 1999 gain was a result of the Company selling approximately 49% of the membership interests of Stonewood and Lakewood to Ontario Teachers' in October of 1999 and the Company's sale of Huntington Center on November 16, 1999.

Extraordinary Loss from Early Extinguishment of Debt
In 2000, the Company recorded a loss from early extinguishment of debt of $0.3 million which was a result of write offs of $1.3 million of unamortized financing costs and is offset by a gain of $1.0 million relating to the Company's purchase and retirement of $10.6 million of the Debentures, compared to the write off of $1.5 million of unamortized financing costs in 1999.

Cumulative Effect of Change in Accounting Principle
A loss of $1.0 million in 2000 compared to no loss in 1999 is a result of implementation of SAB 101 at January 1, 2000.

Net Income Available to Common Stockholders
As a result of the foregoing, net income available to common stockholders decreased to $38.0 million in 2000 from $110.9 million in 1999.

Operating Activities
Cash flow from operations was $121.2 million in 2000 compared to $139.6 million in 1999. The decrease is primarily because of decreased net operating income from the factors mentioned above.

Investing Activities
Cash generated from investing activities was $1.7 million in 2000 compared to cash utilized by investing activities of $247.7 million in 1999. The change resulted primarily from the cash contributions for the joint venture acquisitions of $116.9 million in 1999 compared to $12.9 million in 2000. This is offset by increases in joint venture distributions of $113.0 million in 2000 compared to $30.0 million in 1999.

Financing Activities
Cash flow used in financing activities was $127.1 million in 2000 compared to cash provided by financing activities of $123.4 million in 1999. The change resulted primarily from the refinancing of Centers in 1999.

EBITDA and Funds From Operations
Primarily because of the factors mentioned above, EBITDA, including joint ventures at pro rata, increased 4.2% to $314.6 million in 2000 from $301.8 million in 1999 and Funds from Operations–Diluted increased 1.8% to $167.2 million in 2000 from $164.3 million in 1999.

Comparison of Years Ended December 31, 1999 and 1998

Revenues
Minimum and percentage rents increased by 14.1% to $219.7 million in 1999 from $192.6 million in 1998. Approximately $26.3 million of the increase resulted from the 1998 Acquisition Centers, $1.9 million from the 1999 acquisition of Santa Monica Place and $5.2 million of the increase was attributable to the Same Centers. These increases were partially offset by revenue decreases at the Redevelopment Centers of $2.1 million in 1999 and $4.2 million of the decrease related to the contribution of 100% and 99% of the membership interests of Lakewood Mall and Stonewood Mall, respectively, to the PPRT joint venture on October 26,1999.

Tenant recoveries increased to $99.1 million in 1999 from $86.7 million in 1998. The 1998 Acquisition Centers generated $12.9 million of this increase, $1.3 million was from the acquisition of Santa Monica Place, and $1.9 million of the increase was from the Same Centers. These increases were partially offset by revenue decreases at the Redevelopment Centers of $2.1 million in 1999 and $1.6 million of the decrease resulted from the contribution of Lakewood Mall and Stonewood Mall to the PPRT joint venture.

Other income increased to $8.6 million in 1999 from $4.5 million in 1998. Approximately $0.7 million of the increase related to the 1998 Acquisition Centers and the 1999 acquisition of Santa Monica Place, and $3.7 million of the increase was attributable to the Same Centers.

Expenses
Shopping center expenses increased to $100.3 million in 1999 compared to $90.0 million in 1998. Approximately $13.2 million of the increase resulted from the 1998 Acquisition Centers and the 1999 acquisition of Santa Monica Place and $1.1 million of the increase resulted from increased property taxes and recoverable expenses at the Same Centers. The Redevelopment Centers had a net decrease of $2.0 million in shopping center expenses resulting primarily from decreased property taxes and recoverable expenses. The contribution of Lakewood Mall and Stonewood Mall to the PPRT joint venture resulted in $2.0 million of this decrease.

General and administrative expenses increased to $5.5 million in 1999 from $4.4 million in 1998 primarily as a result of the accounting change required by EITF 97-11, "Accounting for Internal Costs Relating to Real Estate Property Acquisitions," which requires the expensing of internal acquisition costs. Previously, in accordance with GAAP, certain internal acquisition costs were capitalized. The increase is also attributable to higher executive and director compensation expense.

Interest Expense
Interest expense increased to $113.3 million in 1999 from $91.4 million in 1998. This increase of $22.1 million is primarily attributable to the acquisition activity in 1998 and 1999, which was partially funded with secured debt and borrowings under the Company's line of credit.

Depreciation and Amortization
Depreciation increased to $61.4 million from $53.1 million in 1998. This increase relates primarily to the 1998 and 1999 Acquisition Centers.

Minority Interest
The minority interest represents the 26.3% weighted average interest of the Operating Partnership that was not owned by the Company during 1999. This compares to 28.4% not owned by the Company during 1998.

Income From Unconsolidated Joint Ventures and Management Companies
The income from unconsolidated joint ventures and the Management Companies was $25.9 million for 1999, compared to income of $14.5 million in 1998. A total of $3.2 million of the change is attributable to the 1998 acquisitions of SDG Macerich Properties, L.P. and $7.9 million of the change is attributable to the 1999 acquisitions by Pacific Premier Retail Trust.

Gain on Sale of Assets
A gain on sale of assets of $96.0 million is a result of the Company selling approximately 49% of the membership interests of Stonewood and Lakewood to Ontario Teachers' in October 1999 and the Company's sale of Huntington Center on November 16, 1999.

Extraordinary Loss from Early Extinguishment of Debt
In 1999, the Company wrote off $1.5 million of unamortized financing costs, compared to $2.4 million written off in 1998.

Net Income Available to Common Stockholders
As a result of the foregoing, including the gain on sale of assets, net income available to common stockholders increased to $110.9 million in 1999 from $32.5 million in 1998.

Operating Activities
Cash flow from operations was $139.6 million in 1999 compared to $85.2 million in 1998. The increase is primarily because of increased net operating income from the 1998 and 1999 Acquisition Centers.

Investing Activities
Cash flow used in investing activities was $247.7 million in 1999 compared to $761.1 million in 1998. The change resulted primarily from the cash contributions required by the Company for the joint venture acquisitions of $240.2 million in 1998 compared to $116.9 million in 1999, and the proceeds from the sale of assets in 1999 of $106.9 million.

Financing Activities
Cash flow from financing activities was $123.4 million in 1999 compared to $676.0 million in 1998. The decrease resulted from no equity offerings in 1999 compared to 7,920,181 shares of common stock sold in 1998. Additionally, 9,114,602 shares of preferred stock were sold in the first and second quarters of 1998.

EBITDA and Funds From Operations
Primarily because of the factors mentioned above, EBITDA, including joint ventures at pro rata, increased 31.0% to $301.8 million in 1999 from $230.4 million in 1998 and Funds from Operations—Diluted increased 36.3% to $164.3 million from $120.5 million in 1998.

Liquidity and Capital Resources
The Company intends to meet its short term liquidity requirements through cash generated from operations and working capital reserves. The Company anticipates that revenues will continue to provide necessary funds for its operating expenses and debt service requirements, and to pay dividends to stockholders in accordance with REIT requirements. The Company anticipates that cash generated from operations, together with cash on hand, will be adequate to fund capital expenditures which will not be reimbursed by tenants, other than non-recurring capital expenditures. Capital for major expenditures or major redevelopments has been, and is expected to continue to be, obtained from equity or debt financings which include borrowings under the Company's line of credit and construction loans. However, many factors impact the Company's ability to access capital, such as its overall debt level, interest rates, interest coverage ratios and prevailing market conditions.

The Company believes that it will have access to the capital necessary to execute its share repurchase program and expand its business in accordance with its strategies for growth and maximizing Funds from Operations. The Company presently intends to obtain additional capital necessary to expand its business and execute its share repurchase program through a combination of debt financings, joint ventures and the sale of non-core assets. During 1998 and 1999, the Company acquired two portfolios through joint ventures and raised additional capital in 1999 from the sale of interests in two properties to one joint venture partner. The Company believes such joint venture arrangements provide an attractive alternative to other forms of financing whether for acquisitions or other business opportunities.

The Company's total outstanding loan indebtedness at December 31, 2000 was $2.3 billion (including its pro rata share of joint venture debt). This equated to a debt to Total Market Capitalization (defined as total debt of the Company, including its pro rata share of joint venture debt, plus aggregate market value of outstanding shares of common stock, assuming full conversion of OP Units and preferred stock into common stock) ratio of approximately 69% at December 31, 2000. The Company's debt consists primarily of fixed-rate conventional mortgages payable secured by individual properties.

The Company has filed a shelf registration statement, effective December 8, 1997, to sell securities. The shelf registration is for a total of $500 million of common stock, common stock warrants or common stock rights. During 1998, the Company sold a total of 7,920,181 shares of common stock under this shelf registration. The aggregate offering price of these transactions was approximately $212.9 million, leaving approximately $287.1 million available under the shelf registration statement.

The Company has an unsecured line of credit for up to $150.0 million. There were $59.0 million of borrowings outstanding at December 31, 2000. The line of credit has been extended to May 2002.

At December 31, 2000, the Company had cash and cash equivalents available of $36.3 million.

Funds From Operations
The Company believes that the most significant measure of its performance is FFO. FFO is defined by The National Association of Real Estate Investment Trusts ("NAREIT") to be: Net income (loss) (computed in accordance with GAAP), excluding gains (or losses) from debt restructuring, sales or write-down of assets and cumulative effect of change in accounting principle, plus depreciation and amortization (excluding depreciation on personal property and amortization of loan and financial instrument costs) and after adjustments for unconsolidated entities. Adjustments for unconsolidated entities are calculated on the same basis. FFO does not represent cash flow from operations, as defined by GAAP, and is not necessarily indicative of cash available to fund all cash flow needs. The following reconciles net income available to common stockholders to FFO:

(amounts in thousands)
		2000				1999
		Shares	Amount			Shares	Amount

Net income–available to common stockholders			$	37,971			$	110,873
Adjustments to reconcile net income to FFO–basic:
	Minority interest			12,168				38,335
	Loss on early extinguishment of debt			304				1,478
	(Gain) loss on sale of wholly-owned assets			2,773				(95,981	)
	(Gain) loss on sale or write-down of assets from unconsolidated entities (pro rata)			(235	)			193
	Depreciation and amortization on wholly owned centers			61,647				61,383
	Depreciation and amortization on joint ventures and from the management companies (pro rata)			24,472				19,715
	Cumulative effect of change in accounting principle–wholly owned centers			963				—
	Cumulative effect of change in accounting principle–prorata unconsolidated entities			787				—
Less: depreciation on personal property and amortization of loan costs and interest rate caps				(5,106	)			(4,271	)

FFO–basic(1)		45,050	$	135,744		46,130	$	131,725
Additional adjustment to arrive at FFO–diluted
	Impact of convertible preferred stock	9,115		18,958		9,115		18,138
	Impact of stock options and restricted stock using the treasury method	(n/a–antidilutive)				462		1,823
	Impact of convertible debentures	5,154		12,542		5,186		12,616

FFO–diluted(2)		59,319	$	167,244		60,893	$	164,302

(1): Calculated based upon basic net income as adjusted to reach basic FFO. Weighted average number of shares includes the weighted average shares of common stock outstanding for 2000 assuming the conversion of all outstanding OP Units. As of December 31, 2000, 11.2 million of OP Units were outstanding.
(2): The computation of FFO–diluted and diluted average number of shares outstanding includes the effect of outstanding common stock options and restricted stock using the treasury method. The debentures are dilutive at December 31, 2000 and 1999 and are included in the FFO calculation. On February 25, 1998, the Company sold $100 million of its Series A Preferred Stock. On June 17, 1998, the Company sold $150 million of its Series B Preferred Stock. The preferred stock can be converted on a one-for-one basis for common stock. The preferred shares are assumed converted for purposes of 1999 net income as they are dilutive to that calculation. The preferred shares are assumed converted for purposes of 2000 and 1999 FFO-diluted per share as they are dilutive to that calculation.

Included in minimum rents were rents attributable to the accounting practice of straight lining of rents. The amount of straight lining of rents that impacted minimum rents was $865,259 for 2000, $2,628,000 for 1999 and $3,814,000 for 1998. The decline in straight-lining of rents from 1999 to 2000 is due to the Company structuring its new leases using rent increases tied to the change in CPI rather than using contractually fixed rent increases. CPI increases do not generally require straight-lining of rent treatment.

Inflation
In the last three years, inflation has not had a significant impact on the Company because of a relatively low inflation rate. Most of the leases at the Centers have rent adjustments periodically through the lease term. These rent increases are either in fixed increments or based on increases in the CPI. In addition, many of the leases are for terms of less than ten years, which enables the Company to replace existing leases with new leases at higher base rents if the rents of the existing leases are below the then existing market rate. Additionally, most of the leases require the tenants to pay their pro rata share of operating expenses. This reduces the Company's exposure to increases in costs and operating expenses resulting from inflation.

Seasonality
The shopping center industry is seasonal in nature, particularly in the fourth quarter during the holiday season when retailer occupancy and retail sales are typically at their highest levels. In addition, shopping malls achieve a substantial portion of their specialty (temporary retailer) rents during the holiday season and the majority of percentage rent is recognized in the fourth quarter. As a result of the above, plus the change in accounting principle discussed below for percentage rent, earnings are generally higher in the fourth quarter of each year.

New Pronouncements Issued
In December 1999, the Securities and Exchange Committee issued Staff Accounting Bulletin 101, "Revenue Recognition in Financial Statements" ("SAB 101), which became effective for periods beginning after December 15, 1999. This bulletin modified the timing of revenue recognition for percentage rent received from tenants. This change will defer recognition of a significant amount of percentage rent for the first three calendar quarters into the fourth quarter. The Company applied this change in accounting principle as of January 1, 2000. The cumulative effect of this change in accounting principle at the adoption date of January 1, 2000, including the pro rata share of joint ventures, was approximately $1,750,000.

In June 1998, the FASB issued Statement of Financial Accounting Standard ("SFAS") 133, "Accounting for Derivative Instruments and Hedging Activities," ("SFAS 133") which requires companies to record derivatives on the balance sheet, measured at fair value. Changes in the fair values of those derivatives will be accounted for depending on the use of the derivative and whether it qualifies for hedge accounting. The key criterion for hedge accounting is that the hedging relationship must be highly effective in achieving offsetting changes in fair value or cash flows. In June 1999, the FASB issued SFAS 137, "Accounting for Derivative Instruments and Hedging Activities," which delays the implementation of SFAS 133 from January 1, 2000 to January 1, 2001. In June 2000, the FASB issued SFAS No. 138, "Accounting for Certain Derivative Instruments and Certain Hedging Activities–an Amendment of FASB Statement No. 133," ("SFAS 138") which amends the accounting and reporting standards of SFAS 133. The Company has determined the implementation of SFAS 133 and SFAS 138 will not have a material impact on its consolidated financial statements.

ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

The Company's primary market risk exposure is interest rate risk. The Company has managed and will continue to manage interest rate risk by (1) maintaining a conservative ratio of fixed rate, long-term debt to total debt such that variable rate exposure is kept at an acceptable level, (2) reducing interest rate exposure on certain long-term variable rate debt through the use of interest rate caps with appropriately matching maturities, (3) using treasury rate locks where appropriate to fix rates on anticipated debt transactions, and (4) taking advantage of favorable market conditions for long-term debt and/or equity.

The following table sets forth information as of December 31, 2000 concerning the Company's long term debt obligations, including principal cash flows by scheduled maturity, weighted average interest rates and estimated fair value ("FV"):

(dollars in thousands)
		For the Years Ended December 31,
		2001			2002			2003			2004			2005			Thereafter			Total			FV

Long term debt:
	Fixed rate	$	108,607		$	11,858		$	52,630		$	129,297		$	12,554		$	937,801		$	1,252,747		$	1,282,163
	Average interest rate		7.42	%		7.41	%		7.39	%		7.41	%		7.41	%		7.41	%		7.41	%		—
	Fixed rate–Debentures		—			150,848			—			—			—			—			150,848			148,132
	Average interest rate		—			7.25	%		—			—			—			—			7.25	%		—
	Variable rate		59,000			88,340			—			—			—			—			147,340			147,340
	Average interest rate		8.75	%		8.62	%		—			—			—			—			8.69	%		—

Total debt–Wholly owned Centers		$	167,607		$	251,046		$	52,630		$	129,297		$	12,554		$	937,801		$	1,550,935		$	1,577,635

Joint Venture Centers: (at Company's pro rata share)
	Fixed rate	$	6,812		$	7,538		$	8,410		$	8,977		$	74,468		$	478,258		$	584,463		$	586,595
	Average interest rate		6.86	%		6.86	%		6.86	%		6.87	%		6.83	%		6.83	%		6.85	%		—
	Variable rate		—			8,224			92,250			—			—			40,700			141,174			141,174
	Average interest rate		—			9.00	%		7.21	%		—			—			7.08	%		7.72	%		—

Total debt–Joint Ventures		$	6,812		$	15,762		$	100,660		$	8,977		$	74,468		$	518,958		$	725,637		$	727,769

Total debt–All Centers		$	174,419		$	266,808		$	153,290		$	138,274		$	87,022		$	1,456,759		$	2,276,572		$	2,305,404

The $59.0 million of variable debt maturing in 2001 represents the outstanding borrowings under the Company's credit facility. Subsequent to December 31, 2000, the line of credit was extended to May 2002.

In addition, the Company has assessed the market risk for its variable rate debt and believes that a 1% increase in interest rates would decrease future earnings and cash flows by approximately $2.9 million per year based on $288.5 million outstanding at December 31, 2000.

The fair value of the Company's long term debt is estimated based on discounted cash flows at interest rates that management believes reflects the risks associated with long term debt of similar risk and duration.

ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

Refer to the Index to Financial Statements and Financial Statement Schedules for the required information.

ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE.

None.

Part III

ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE COMPANY.

There is hereby incorporated by reference the information which appears under the captions "Election of Directors," "Executive Officers" and "Section 16 Reporting" in the Company's definitive proxy statement for its 2001 Annual Meeting of Stockholders.

ITEM 11. EXECUTIVE COMPENSATION.

There is hereby incorporated by reference the information which appears under the caption "Executive Compensation" in the Company's definitive proxy statement for its 2001 Annual Meeting of Stockholders; provided, however, that the Report of the Compensation Committee on executive compensation and the Stock Performance Graph set forth therein shall not be incorporated by reference herein, in any of the Company's prior or future filings under the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended, except to the extent the Company specifically incorporates such report or stock performance graph by reference therein and shall not be otherwise deemed filed under either of such Acts.

ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

There is hereby incorporated by reference the information which appears under the captions "Principal Stockholders," "Information Regarding Nominees and Directors" and "Executive Officers" in the Company's definitive proxy statement for its 2001 Annual Meeting of Stockholders.

ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

There is hereby incorporated by reference the information which appears under the captions "Certain Transactions" in the Company's definitive proxy statement for its 2001 Annual Meeting of Stockholders.

Part IV

ITEM 14. EXHIBITS, FINANCIAL STATEMENTS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K

			Page

(a)	1.	Financial Statements of the Company
		Report of Independent Accountants	41
		Consolidated balance sheets of the Company as of December 31, 2000 and 1999	42
		Consolidated statements of operations of the Company for the years ended December 31, 2000, 1999 and 1998	43-44
		Consolidated statements of common stockholders' equity of the Company for the years ended December 31, 2000, 1999 and 1998	45
		Consolidated statements of cash flows of the Company for the years ended December 31, 2000, 1999 and 1998	46
		Notes to consolidated financial statements	47-70
	2.	Financial Statements of Pacific Premier Retail Trust
		Report of Independent Accountants	71
		Consolidated balance sheets of Pacific Premier Retail Trust as of December 31, 2000 and 1999	72
		Consolidated statements of operations of Pacific Premier Retail Trust for the year ended December 31, 2000 and for the period from February 18, 1999 (Inception) through December 31, 1999	73
		Consolidated statements of stockholders' equity of Pacific Premier Retail Trust for the year ended December 31, 2000 and for the period from February 18, 1999 (Inception) through December 31, 1999	74
		Consolidated statements of cash flows of Pacific Premier Retail Trust for the year ended December 31, 2000 and for the period from February 18, 1999 (Inception) through December 31, 1999	75
		Notes to consolidated financial statements	76-84
	3.	Financial Statements of SDG Macerich Properties, L.P.
		Independent Auditors' Report	85
		Balance sheets of SDG Macerich Properties, L.P. as of December 31, 2000 and 1999	86
		Statements of operations of SDG Macerich Properties, L.P. for the years ended December 31, 2000, 1999 and 1998	87
		Statements of cash flows of SDG Macerich Properties, L.P. for the years ended December 31, 2000, 1999 and 1998	88
		Statements of partners' equity of SDG Macerich Properties, L.P. for years ended December 31, 2000, 1999 and 1998	89

		Notes to financial statements	90-94
	4.	Financial Statement Schedules
		Schedule III–Real estate and accumulated depreciation of the Company	95-96
		Schedule III–Real estate and accumulated depreciation of Pacific Premier Retail Trust	97-98
		Schedule III–Real estate and accumulated depreciation of SDG Macerich Properties, L.P	99-101
(b)	1.	Reports on Form 8-K
		None
(c)	1.	Exhibits
		The Exhibit Index attached hereto is incorporated by reference under this item

Report of Independent Accountants

To the Board of Directors and Stockholders of The Macerich Company:

In our opinion, based on our audits and the report of other auditors, the consolidated financial statements listed in the index appearing under Item 14(a)(1) on page 39 present fairly, in all material respects, the financial position of The Macerich Company (the "Company") at December 31, 2000 and 1999, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2000 in conformity with accounting principles generally accepted in the United States of America. In addition, in our opinion, the financial statement schedule listed in the index appearing under Item 14(a)(4) on page 40 presents fairly, in all material respects, the information set forth therein when read in conjunction with the related consolidated financial statements. These financial statements and financial statement schedule are the responsibility of the Company's management; our responsibility is to express an opinion on these financial statements and financial statement schedule based on our audits. We did not audit the financial statements of SDG Macerich Properties, L.P. (the "Partnership"), the investment in which is reflected in the accompanying consolidated financial statements using the equity method of accounting. The investment in the Partnership represents approximately 7.2 percent and 10.0 percent of the Company's consolidated total assets at December 31, 2000 and 1999, respectively, and the equity in income represents approximately 33.1%, 16.0% and 44.6% of the related consolidated net income for each of the three years in the period ended December 31, 2000. Those statements were audited by other auditors whose report thereon has been furnished to us, and our opinion expressed herein, insofar as it relates to the amounts included for the Partnership, is based solely on the report of the other auditors. We conducted our audits of these statements in accordance with auditing standards generally accepted in the United States of America, which require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. We believe that our audits and the report of other auditors provide a reasonable basis for our opinion.

As discussed in Note 2 to the consolidated financial statements, effective January 1, 2000, the Company adopted Staff Accounting Bulletin 101.

As discussed in Note 16 to the consolidated financial statements, the Company has revised its accounting for the Series A and Series B redeemable preferred stock to classify such securities outside of common stockholders' equity.

PricewaterhouseCoopers LLP

Los Angeles, CA
February 13, 2001

THE MACERICH COMPANY

CONSOLIDATED BALANCE SHEETS

(Dollars in thousands, except share data)

				December 31,
				2000	1999

ASSETS:
Property, net				$ 1,933,584	$ 1,931,415
Cash and cash equivalents				36,273	40,455
Tenant receivables, including accrued overage rents of $6,486 in 2000 and $7,367 in 1999				38,922	34,423
Deferred charges and other assets, net				55,323	55,065
Investments in joint ventures and the Management Companies				273,140	342,935

		Total assets		$ 2,337,242	$ 2,404,293

LIABILITIES, PREFERRED STOCK AND COMMON STOCKHOLDERS' EQUITY:
Mortgage notes payable:
	Related parties			$ 133,063	$ 133,876
	Others			1,119,684	1,105,180

	Total			1,252,747	1,239,056
Bank notes payable				147,340	160,671
Convertible debentures				150,848	161,400
Accounts payable and accrued expenses				24,681	27,815
Due to affiliates				8,800	6,969
Other accrued liabilities				17,887	25,849
Preferred stock dividend payable				4,831	4,648

		Total liabilities		1,607,134	1,626,408

Minority interest in Operating Partnership				120,500	129,295

Commitments and contingencies (Note 11)
Series A cumulative convertible redeemable preferred stock, $.01 par value, 3,627,131 shares authorized, issued and outstanding at December 31, 2000 and 1999				98,934	98,934
Series B cumulative convertible redeemable preferred stock, $.01 par value, 5,487,471 shares authorized, issued and outstanding at December 31, 2000 and 1999				148,402	148,402

				247,336	247,336

Common stockholders' equity:
	Common stock, $.01 par value, 100,000,000 shares authorized, 33,612,462 and 34,072,625 shares issued and outstanding at December 31, 2000 and 1999, respectively			338	338
	Additional paid in capital			359,306	363,896
	Accumulated earnings			10,314	43,514
	Unamortized restricted stock			(7,686)	(6,494)

		Total common stockholders' equity		362,272	401,254

			Total liabilities, preferred stock and common stockholders' equity	$ 2,337,242	$ 2,404,293

The accompanying notes are an integral part of these financial statements.

THE MACERICH COMPANY

CONSOLIDATED STATEMENTS OF OPERATIONS

(Dollars in thousands, except share and per share amounts)

			For the years ended December 31,
			2000		1999		1998

REVENUES:
	Minimum rents		$ 195,236		$ 204,568		$ 179,710
	Percentage rents		12,558		15,106		12,856
	Tenant recoveries		104,125		99,126		86,740
	Other		8,173		8,644		4,555

		Total revenues	320,092		327,444		283,861

EXPENSES:
	Shopping center expenses		101,674		100,327		89,991
	General and administrative expense		5,509		5,488		4,373

			107,183		105,815		94,364

	Interest expense:
		Related parties	10,106		10,170		10,224
		Others	98,341		103,178		81,209

		Total interest expense	108,447		113,348		91,433

	Depreciation and amortization		61,647		61,383		53,141
Equity in income of unconsolidated joint ventures and the management companies			30,322		25,945		14,480
(Loss) gain on sale of assets			(2,773	)	95,981		9

Income before minority interest, extraordinary item and cumulative effect of change in accounting principle			70,364		168,824		59,412
Extraordinary loss on early extinguishment of debt			(304	)	(1,478	)	(2,435	)
Cumulative effect of change in accounting principle			(963	)	—		—

Income of the Operating Partnership			69,097		167,346		56,977
Less minority interest in net income of the Operating Partnership			12,168		38,335		12,902

Net income			56,929		129,011		44,075
Less preferred dividends			18,958		18,138		11,547

Net income available to common stockholders			$ 37,971		$ 110,873		$ 32,528

The accompanying notes are an integral part of these financial statements.

		For the years ended December 31,
		2000		1999		1998

Earnings per common share–basic:
	Income before extraordinary item and cumulative effect of change in accounting principle	$ 1.14		$ 3.30		$ 1.14
	Extraordinary item	(0.01	)	(0.04	)	(0.08	)
	Cumulative effect of change in accounting principle	(0.02	)	—		—

Net income–available to common stockholders		$ 1.11		$ 3.26		$ 1.06

Weighted average number of common shares outstanding–basic		34,095,000		34,007,000		30,805,000

Weighted average number of common shares outstanding–basic, assuming full conversion of operating units outstanding		45,050,000		46,130,000		43,016,000

Earnings per common share–diluted:
	Income before extraordinary item and cumulative effect of change in accounting principle	$ 1.14		$ 3.01		$ 1.11
	Extraordinary item	(0.01	)	(0.02	)	(0.05	)
	Cumulative effect of change in accounting principle	(0.02	)	—		—

Net income–available to common stockholders		$ 1.11		$ 2.99		$ 1.06

Weighted average number of common shares outstanding–diluted for EPS		45,050,000		60,893,000		43,628,000

The accompanying notes are an integral part of these financial statements.

THE MACERICH COMPANY

CONSOLIDATED STATEMENTS OF COMMON STOCKHOLDERS' EQUITY

(Dollars in thousands, except share data)

		Common Stock (# shares)		Common Stock Par Value	Additional Paid In Capital		Accumulated Earnings		Unamortized Restricted Stock		Total Common Stockholders' Equity

Balance December 31, 1997		26,004,800		$ 260	$ 219,121		—		$ (3,086	)	$ 216,295
	Common stock issued to public	7,828,124		78	214,562						214,640
	Issuance costs				(11,149	)					(11,149	)
	Issuance of restricted stock	83,018			2,383						2,383
	Unvested restricted stock	(83,018	)						(2,383	)	(2,383	)
	Restricted stock vested in 1998	26,039							945		945
	Exercise of stock options	43,000			839						839
	Distributions paid ($1.865) per share				(24,464	)	$ (32,528	)			(56,992	)
	Net income						32,528				32,528
	Adjustment to reflect minority interest on a pro rata basis according to year end ownership percentage of Operating Partnership				(33,682	)					(33,682	)

Balance December 31, 1998		33,901,963		338	367,610		—		(4,524	)	363,424
	Issuance costs				(198	)					(198	)
	Issuance of restricted stock	176,600			4,007						4,007
	Unvested restricted stock	(176,600	)						(4,007	)	(4,007	)
	Restricted stock vested in 1999	51,675							2,037		2,037
	Exercise of stock options	88,250			1,705						1,705
	Distributions paid ($1.965) per share						(67,359	)			(67,359	)
	Net income						110,873				110,873
	Conversion of OP units to common stock	30,737			441						441
	Adjustment to reflect minority interest on a pro rata basis according to year end ownership percentage of Operating Partnership				(9,669	)					(9,669	)

Balance December 31, 1999		34,072,625		338	363,896		43,514		(6,494	)	401,254
	Issuance costs				(7	)					(7	)
	Issuance of restricted stock	169,556			3,412						3,412
	Unvested restricted stock	(169,556	)						(3,412	)	(3,412	)
	Restricted stock vested in 2000	82,733							2,220		2,220
	Exercise of stock options	20,704			388						388
	Common stock repurchase	(563,600	)		(10,739	)					(10,739	)
	Distributions paid ($2.06) per share						(71,171	)			(71,171	)
	Net income						37,971				37,971
	Adjustment to reflect minority interest on a pro rata basis according to year end ownership percentage of Operating Partnership				2,356						2,356

Balance December 31, 2000		33,612,462		$ 338	$ 359,306		$ 10,314		$ (7,686	)	$ 362,272

The accompanying notes are an integral part of these financial statements.

THE MACERICH COMPANY

CONSOLIDATED STATEMENTS OF CASH FLOWS

(Dollars in thousands)

					For the years ended December 31,
					2000		1999		1998

Cash flows from operating activities:
	Net income–available to common stockholders				$ 37,971		$ 110,873		$ 32,528
	Preferred dividends				18,958		18,138		11,547

	Net income				56,929		129,011		44,075
	Adjustments to reconcile net income to net cash provided by operating activities:
		Extraordinary loss on early extinguishment of debt			304		1,478		2,435
		Cumulative effect of change in accounting principle			963		—		—
		Loss (gain) on sale of assets			2,773		(95,981	)	(9	)
		Depreciation and amortization			61,647		61,383		53,141
		Amortization of net discount (premium) on trust deed note payable			33		191		(635	)
		Minority interest in the net income of the Operating Partnership			12,168		38,335		12,902
		Changes in assets and liabilities:
			Tenant receivables, net		(5,462	)	(3,174	)	(13,677	)
			Other assets		967		9,817		(19,772	)
			Accounts payable and accrued expenses		(3,134	)	2,407		10,366
			Due to affiliates		1,811		4,059		(12,156	)
			Other liabilities		(7,962	)	(8,178	)	4,086
			Accrued preferred stock dividend		183		228		4,420

				Total adjustments	64,291		10,565		41,101

	Net cash provided by operating activities				121,220		139,576		85,176

Cash flows from investing activities:
	Acquisitions of property and improvements				(5,639	)	(142,564	)	(481,735	)
	Renovations and expansions of centers				(44,808	)	(74,560	)	(40,545	)
	Tenant allowances				(5,913	)	(7,213	)	(5,383	)
	Deferred charges				(11,737	)	(17,352	)	(14,536	)
	Equity in income of unconsolidated joint ventures and the management companies				(30,322	)	(25,945	)	(14,480	)
	Distributions from joint ventures				113,047		29,989		32,623
	Contributions to joint ventures				(12,930	)	(116,944	)	(240,196	)
	Loans to affiliates				—		—		3,105
	Proceeds from sale of assets				—		106,904		—

	Net cash provided by (used in) investing activities				1,698		(247,685	)	(761,147	)

Cash flows from financing activities:
	Proceeds from mortgages, notes and debentures payable				295,672		584,270		480,348
	Payments on mortgages, notes and debentures payable				(305,897	)	(328,452	)	(165,671	)
	Net proceeds from equity offerings				—		—		450,828
	Dividends and distributions				(97,917	)	(114,259	)	(77,998	)
	Dividends to preferred shareholders				(18,958	)	(18,138	)	(11,547	)

	Net cash (used in) provided by financing activities				(127,100	)	123,421		675,960

	Net (decrease) increase in cash				(4,182	)	15,312		(11	)
Cash and cash equivalents, beginning of period					40,455		25,143		25,154

Cash and cash equivalents, end of period					$ 36,273		$ 40,455		$ 25,143

Supplemental cash flow information:
	Cash payment for interest, net of amounts capitalized				$ 108,003		$ 112,399		$ 89,543

Non-cash transactions:
		Acquisition of property by assumption of debt			—		—		$ 70,116

		Acquisition of property by issuance of OP Units			—		—		$ 7,917

		Contributions of liabilities in excess of assets to joint venture			—		$ 8,820		—

The accompanying notes are an integral part of these financial statements.

THE MACERICH COMPANY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Dollars in thousands, except per share amounts)

1. Organization and Basis of Presentation:

The Macerich Company (the "Company") commenced operations effective with the completion of its initial public offering (the "IPO") on March 16, 1994. The Company is the sole general partner of and, assuming conversion of the redeemable preferred stock, holds a 79% ownership interest in The Macerich Partnership, L. P. (the "Operating Partnership"). The interests in the Operating Partnership are known as OP Units. OP Units not held by the Company are redeemable, subject to certain restrictions, on a one-for-one basis, for the Company's common stock or cash at the Company's option.

The Company was organized to qualify as a real estate investment trust ("REIT") under the Internal Revenue Code of 1986, as amended. The 21% limited partnership interest of the Operating Partnership not owned by the Company is reflected in these financial statements as minority interest.

The property management, leasing and redevelopment of the Company's portfolio is provided by the Macerich Management Company, Macerich Property Management Company and Macerich Manhattan Management Company, all California corporations (together referred to hereafter as the "Management Companies"). The non-voting preferred stock of the Macerich Management Company and Macerich Property Management Company is owned by the Operating Partnership, which provides the Operating Partnership the right to receive 95% of the distributable cash flow from the Management Companies. Macerich Manhattan Management Company is a 100% subsidiary of Macerich Management Company.

Basis Of Presentation:
The consolidated financial statements of the Company include the accounts of the Company and the Operating Partnership. The properties in which the Operating Partnership does not have a controlling interest in, and the Management Companies, have been accounted for under the equity method of accounting. These entities are reflected on the Company's consolidated financial statements as "Investments in joint ventures and the Management Companies."

All significant intercompany accounts and transactions have been eliminated in the consolidated financial statements.

2. Summary of Significant Accounting Policies:

Cash And Cash Equivalents:
The Company considers all highly liquid investments with an original maturity of 90 days or less when purchased to be cash equivalents, for which cost approximates fair value. Included in cash is restricted cash of $1,464 at December 31, 2000 and $1,418 at December 31, 1999.

Tenant Receivables:
Included in tenant receivables are allowances for doubtful accounts of $700 and $1,752 at December 31, 2000 and 1999, respectively.

Revenues:
Minimum rental revenues are recognized on a straight-line basis over the terms of the related lease. The difference between the amount of rent due in a year and the amount recorded as rental income is referred to as the "straight lining of rent adjustment." Rental income was increased by $865 in 2000, $2,628 in 1999 and $3,814 in 1998 due to the straight lining of rent adjustment. Percentage rents are recognized on an accrual basis. Recoveries from tenants for real estate taxes, insurance and other shopping center operating expenses are recognized as revenues in the period the applicable costs are incurred.

The Management Companies provide property management, leasing, corporate, redevelopment and acquisition services to affiliated and non-affiliated shopping centers. In consideration for these services, the Management Companies receive monthly management fees generally ranging from 1.5% to 5% of the gross monthly rental revenue of the properties managed.

Property:
Costs related to the redevelopment, construction and improvement of properties are capitalized. Interest costs are capitalized until construction is substantially complete.

Expenditures for maintenance and repairs are charged to operations as incurred. Realized gains and losses are recognized upon disposal or retirement of the related assets and are reflected in earnings.

Property is recorded at cost and is depreciated using a straight-line method over the estimated useful lives of the assets as follows:


Buildings and improvements		5-40 years
Tenant improvements		initial term of related lease
Equipment and furnishings		5-7 years

The Company assesses whether there has been an impairment in the value of its long-lived assets by considering factors such as expected future operating income, trends and prospects, as well as the effects of demand, competition and other economic factors. Such factors include the tenants' ability to perform their duties and pay rent under the terms of the leases. The Company may recognize an impairment loss if the income stream is not sufficient to cover its investment. Such a loss would be determined between the carrying value and the fair value of a center. Management believes no such impairment has occurred in its net property carrying values at December 31, 2000 and 1999.

Deferred Charges:
Costs relating to financing of shopping center properties and obtaining tenant leases are deferred and amortized over the initial term of the agreement. The straight-line method is used to amortize all costs except financing, for which the effective interest method is used. The range of the terms of the agreements are as follows:


Deferred lease costs		1–15 years
Deferred financing costs		1–15 years

In March 1998, the Financial Accounting Standards Board ("FASB"), through its Emerging Issues Task Force ("EITF"), concluded based on EITF 97-11, "Accounting for Internal Costs Relating to Real Estate Property Acquisitions," that all internal costs to source, analyze and close acquisitions should be expensed as incurred. The Company had historically capitalized these costs, in accordance with generally accepted accounting principles ("GAAP"). The Company had adopted the FASB's interpretation effective March 19, 1998.

Deferred Acquisition Liability:
As part of the Company's total consideration to the seller of Capitola Mall, the Company issued $5,000 of OP Units five years after the acquisition date, which was December 21, 1995. The number of OP Units was determined based on the Company's common stock price at December 21, 2000. A total of 254,373 of OP Units were issued to these partners on December 21, 2000.

Income Taxes:
The Company has elected to be taxed as a REIT under the Internal Revenue Code of 1986, as amended. A REIT is generally not subject to income taxation on that portion of its income that qualifies as REIT taxable income as long as it distributes at least 95 percent of its taxable income to its stockholders and complies with other requirements. Accordingly, no provision has been made for income taxes in the consolidated financial statements.

On a tax basis, the distributions of $2.06 paid during 2000 represented $1.7304 of ordinary income and $0.3296 of return of capital. The distributions of $1.965 per share during 1999 represented $1.30 of ordinary income and $0.665 of capital gain. During 1998, the distributions were $1.865 per share of which $1.12 was ordinary income and $0.745 was return of capital.

Each partner is taxed individually on its share of partnership income or loss, and accordingly, no provision for federal and state income tax is provided for the Operating Partnership in the consolidated financial statements.

Reclassifications:
Certain reclassifications have been made to the 1998 and 1999 consolidated financial statements to conform to the 2000 consolidated financial statements presentation.

Accounting Pronouncements:
In December 1999, the Securities and Exchange Committee issued Staff Accounting Bulletin 101, "Revenue Recognition in Financial Statements" ("SAB 101"), which became effective for periods beginning after December 15, 1999. This bulletin modified the timing of revenue recognition for percentage rent received from tenants. This change will defer recognition of a significant amount of percentage rent for the first three calendar quarters into the fourth quarter. The Company applied this change in accounting principle as of January 1, 2000. The cumulative effect of this change in accounting principle at the adoption date of January 1, 2000, including the pro rata share of joint ventures, was approximately $1,750. If the Company had recorded percentage rent using the methodology prescribed in SAB 101, the Company's net income available to common stockholders would have been reduced by $1,290 or $0.02 per diluted share for the year ended December 31, 1999.

In June 1998, the FASB issued Statement of Financial Accounting Standard ("SFAS") 133, "Accounting for Derivative Instruments and Hedging Activities," ("SFAS 133") which requires companies to record derivatives on the balance sheet, measured at fair value. Changes in the fair values of those derivatives will be accounted for depending on the use of the derivative and whether it qualifies for hedge accounting. The key criterion for hedge accounting is that the hedging relationship must be highly effective in achieving offsetting changes in fair value or cash flows. In June 1999, the FASB issued SFAS 137, "Accounting for Derivative Instruments and Hedging Activities," which delays the implementation of SFAS 133 from January 1, 2000 to January 1, 2001. In June 2000, the FASB issued SFAS No. 138, Accounting for Certain Derivative Instruments and Certain Hedging Activities—an Amendment of FASB Statement No. 133," ("SFAS 138") which amends the accounting and reporting standards of SFAS 133. The Company has determined the implementation of SFAS 133 and SFAS 138 will not have a material impact on its consolidated financial statements.

Fair Value of Financial Instruments:
To meet the reporting requirement of SFAS No. 107, "Disclosures about Fair Value of Financial Instruments," the Company calculates the fair value of financial instruments and includes this additional information in the notes to consolidated financial statements when the fair value is different than the carrying value of those financial instruments. When the fair value reasonably approximates the carrying value, no additional disclosure is made. The estimated fair value amounts have been determined by the Company using available market information and appropriate valuation methodologies. However, considerable judgment is required in interpreting market data to develop the estimates of fair value. Accordingly, the estimates presented herein are not necessarily indicative of the

amounts that the Company could realize in a current market exchange. The use of different market assumptions and/or estimation methodologies may have a material effect on the estimated fair value amounts.

Interest rate cap agreements were purchased by the Company from third parties to hedge the risk of interest rate increases on some of the Company's variable rate debt. The cost of these cap agreements was amortized over the life of the cap agreement on a straight line basis. Payments received as a result of the cap agreements were recorded as a reduction of interest expense. The unamortized costs of the cap agreements were included in deferred charges. The fair value of these caps will vary with fluctuations in interest rates. The Company is exposed to credit loss in the event of nonperformance by these counter parties to the financial instruments; however, management does not anticipate nonperformance by the counter parties.

The Company periodically enters into treasury lock agreements in order to hedge its exposure to interest rate fluctuations on anticipated financings. Under these agreements, the Company pays or receives an amount equal to the difference between the treasury lock rate and the market rate on the date of settlement, based on the notional amount of the hedge. The realized gain or loss on the contracts is recorded on the balance sheet, in other assets, and amortized as interest expense over the period of the hedged loans.

Earnings Per Share ("EPS"):
The computation of basic earnings per share is based on net income and the weighted average number of common shares outstanding for the years ended December 31, 2000, 1999 and 1998. The computation of diluted earnings per share includes the effect of outstanding restricted stock and common stock options calculated using the Treasury stock method. The OP Units not held by the Company have been included in the diluted EPS calculation since they are redeemable on a one-for-one basis. The following table reconciles the basic and diluted earnings per share calculation:

(in thousands, except per share data)
		For the years ended
		2000			1999			1998
		Net Income	Shares	Per Share	Net Income	Shares	Per Share	Net Income	Shares	Per Share

	Net income	$ 56,929	34,095		$ 129,011	34,007		$ 44,075	30,805
	Less: Preferred stock dividends	18,958			18,138			11,547

Basic EPS

	Net income– available to common stockholders	$ 37,971	34,095	$ 1.11	$ 110,873	34,007	$ 3.26	$ 32,528	30,805	$ 1.06

Diluted EPS:

	Conversion of OP units	12,168	10,955		38,335	12,123		12,902	12,211
	Employee stock options and restricted stock	n/a–antidilutive			1,824	462		668	612
	Convertible preferred stock	n/a–antidilutive			18,138	9,115		n/a–antidilutive
	Convertible debentures	n/a–antidilutive			12,616	5,186		n/a–antidilutive

	Net income–available to common stockholders	$ 50,139	45,050	$ 1.11	$ 181,786	60,893	$ 2.99	$ 46,098	43,628	$ 1.06

Concentration of Risk:
The Company maintains its cash accounts in a number of commercial banks. Accounts at these banks are guaranteed by the Federal Deposit Insurance Corporation ("FDIC") up to $100. At various times during the year, the Company had deposits in excess of the FDIC insurance limit.

No Center generated more than 10% of shopping center revenues during 2000, 1999 or 1998.

The Centers derived approximately 91.3%, 90.2% and 89.9% of their total rents for the years ended December 31, 2000, 1999 and 1998, respectively, from Mall and Freestanding Stores. The Limited represented 4.4%, 5.2% and 6.1% of total minimum rents in place as of December 31, 2000, 1999 and 1998, respectively, and no other retailer represented more than 3.0%, 3.2% and 4.5% of total minimum rents as of December 31, 2000, 1999 and 1998, respectively.

Management Estimates:
The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

3. Investments in Joint Ventures and the Management Companies:

The following are the Company's investments in various joint ventures. The Operating Partnership's interest in each joint venture as of December 31, 2000 is as follows:

Joint Venture		The Operating Partnership's Ownership %

Macerich Northwestern Associates