Kimco Realty Annual Report 2008

Plain-text annual report

K I M C O™ INTEGRITY | CREATIVITY | STABIL ITY 20 08 AN NUAL R EP ORT Our vision is to be the premier owner and manager of neighborhood and community shopping centers in North America. (cid:115) Equity Interests in: More than 900 shopping centers 80 million square feet Letter from the Chairman ........................................................ Q & A Dave Henry ..................................................................... Q & A David Lukes ..................................................................... Q & A Mike Pappagallo .............................................................. 1 6 8 12 Closing Statement....................................................................... Financials on Form 10K ............................................................. Board of Directors, Corporate Directory, Shareholder Information......................................................... 16 17 IBC Milton Cooper Chairman & Chief Executive Oﬃcer Dear Fellow Shareholders, Partners and Associates: In Kimco’s long business history we have endured many retail bankruptcies, credit crunches, business cycles and recessions, but none of these moved upon us with the velocity of what I will refer to as the Economic Tsunami of 2008. Begin- ning last fall, consumers signiﬁcantly reduced spending and ﬁnancial institutions, pressured by loan losses and declining investment values, reduced lending. Housing prices have de- clined virtually everywhere in the United States. All businesses now seem to have two priorities: (1) to monitor and bolster liquidity; and (2) to reduce costs. These circumstances point to a poor environment for the retailer and, consequently, chal- lenging times for the owner of retail real estate. Despite the ominous clouds that gathered during much of 2008 and the sharp contraction of business activity, we were able to deliver steady ﬁnancial results from our core operating activities. Funds From Operations (“FFO”), a widely accepted measure of REIT performance, were $522.9 million, or $2.02 per diluted share. This compares to $669.8 million, or $2.59 per diluted share, in 2007. Over three-quarters of the decline can be traced to non-cash valuation reserves for a reduction in the value of certain of our assets, mostly related to our stock holdings in other public companies. Excluding these charges, our FFO per diluted share was $2.46 and $2.59 for 2008 and 2007, respectively. We maintained solid occupancy levels of 93.7% at year end, despite retailer bankruptcies and a declining economic environment. The tireless and enthusiastic work of our leasing organization yielded positive re-leasing spreads of over 10% and an average quarterly increase in same-site net operating income of a solid 2.4%. We kept our balance sheet ﬂexibility intact with over $1 billion of credit availability as of year end. Our ﬁnance team was able to raise over $1.8 billion of debt and equity, includ- ing over $400 million of common equity prior to the rapid deterioration of the markets that began in September. In the balance of this letter I would like to share Kimco’s strategy for dealing with the present diﬃcult environment, beginning with some historical perspective, and address a few other issues. In the comments that follow mine, Dave Henry, our President, Mike Pappagallo, our Chief Financial Oﬃcer, and David Lukes, our Chief Operating Oﬃcer, will review our business in more detail, as well as discuss for you our strategy for further strengthening our ﬁnancial position. The Background In 1991, we concluded that the REIT model was a good one and that Kimco should become a public REIT. Our ini- tial public oﬀering (IPO) occurred in November 1991. For a few years thereafter, real estate prices were such that we could 1 acquire shopping centers at entry yields and generate total returns well in excess of our cost of capital. Over time, as additional REITs became public, capital ﬂowed continuously into commercial real estate, and cap rates compressed to the extent that attractive accretive purchase opportunities in the U.S. were not widely available. As a result, Kimco began to acquire shopping centers outside of the U.S. – in Canada and Mexico – and we even diversiﬁed into non-shopping cen- ter properties where we believed value could be added, e.g., extended stay residential, urban residential and net leased industrial properties. We also formed joint ventures with institutional investors with a low cost of capital who were looking for well-leased retail properties and stable cash ﬂows. In 2001 the REIT Modernization Act was passed. This law allowed REITs to create taxable subsidiaries that were per- mitted to engage in a wide range of business activities that are carried on daily by non-REIT organizations, provided the REIT paid corporate income taxes on proﬁts from these activities. Kimco leapt at the opportunity to engage in various real estate-related businesses where we had expertise, such as the merchant building of shopping centers and investments to provide liquidity for the real estate assets of various retailers like Montgomery Ward, Strawbridge and Clothier, and Ames. Over the years, these business activities produced substantial additional income for our shareholders. However, competi- tion, armed with cheap capital and ample liquidity, pursued the same or related opportunities. Our competitors were other REITs, hedge funds, investment banks and other capital providers. In some cases we became partners with other funds and investment banks (e.g. Albertsons, Konover and others). However, as competition increased, our income from these business activities tapered downward. The Strategy And then came the Economic Tsunami of 2008 which reversed everything with lightning speed. Capital became very tight and expensive, while risk aversion spiked. A major recession was at hand. This current environment compels us to refocus our eﬀorts on maintaining and enhancing our position as the premier owner and manager of neighborhood and community shopping centers in North America, and to grow our beneﬁcial ownership of over 900 shopping centers containing 80 million square feet of leasable space. This must be our predominant focus. Our core business, defen- sive in nature, should provide the best risk-adjusted returns for our shareholders in these challenging times. In addition, our strategy will position us to seize, and take advantage of, opportunities that normally become available in economic downturns. This strategy has always been part of our DNA. The Execution We have moved to reduce our exposure to development risk substantially. While development has historically been a prof- itable activity for Kimco, we anticipated last year that retail demand for U.S. development projects in new suburbs would decline as housing starts declined. (A rising tide of rooftops being built for potential shoppers is the primary driver of retailers’ demand for space in new developments.) Our institutional joint venture program has been quite successful for us, as it marries our property acquisition and management expertise with the investment capital of major institutions. We continue our eﬀorts to expand this business. Many institutions may ﬁnd that some of their real estate 2 holdings will be subject to economic stress in this diﬃcult environment. Our institutional joint venture platform oﬀers new investment capital for Kimco and draws on our proven managerial expertise in turning around properties under stress. ments. The net proceeds will augment our liquidity through debt reduction and will be used to acquire shopping centers opportunistically. The Preferred Equity business provided good returns when opportunities to invest capital in Kimco’s core business were limited. These returns have consisted of a ﬁxed return of 8-10% plus a portion of the upside, usually 25-50%. In the current environments, we will curtail Preferred Equity invest- ments and focus on transactions that provide Kimco with 100% of the upside. In addition, capital deployed by Retailer Services will be limited to short-term investments that generate high risk-adjusted yields. This year Retailer Services was a participant in a group that liquidated the inventory of Mervyn’s, Linens-N-Things and Fortunoﬀ. As part of the refocusing strategy, we will emphasize mon- etizing assets that do not ﬁt within these core businesses. Our investments in non-core activities totaled $1.2 billion at the end of 2008, and we plan to monetize these invest- The Core Portfolio Kimco owns approximately 80 million square feet of gross leasable area (GLA), of which 58 million square feet is owned 100% and 22 million square feet represents our percent- age interest in various joint ventures. The portfolio is diverse geographically and by tenant, and largely consists of neighbor- hood shopping centers and retail outlets that sell consumer necessities. The schedule below lists all of the retailers in our portfolio that account for more than 1% of our annualized base rent. We believe that the average base rents in our portfolio are below market, which provides defensive characteristics to our cash ﬂows and enables us to re-lease vacant space, over time, without signiﬁcant revenue declines. For instance, Kmart rent averages $5.48 per square foot, substantially below market rent. In many cases, Home Depot has leased our land TENANT NAME Home Depot TJX Companies Kmart Kohl’s Wal-Mart Royal Ahold Best Buy Bed Bath & Beyond Costco Petsmart Michaels Safeway CREDIT RATINGS (S&P/Moody’s) BBB+/Baa1 A/A3 BB-/Ba1 BBB+/Baa1 AA/Aa2 BBB-/Baa3 BBB-/Baa2 BBB/NR A/A2 BB/NR B-/Caa1 BBB/Baa2 NUMBER OF LOCATIONS ANNUALIZED BASE RENT (in thousands) % OF ANNUALIZED BASE RENT LEASED GLA (in thousands) % OF LEASED GLA 41 128 54 38 38 35 44 52 17 59 66 52 $26,063 $22,459 $19,562 $17,407 $14,386 $12,675 $12,162 $9,761 $9,015 $8,921 $8,615 $8,503 3.3% 2.8% 2.5% 2.2% 1.8% 1.6% 1.5% 1.2% 1.1% 1.1% 1.1% 1.1% 3,297 2,276 3,568 2,539 2,067 1,151 1,092 879 1,296 686 685 833 4.7% 3.3% 5.1% 3.6% 3.0% 1.7% 1.6% 1.3% 1.9% 1.0% 1.0% 1.2% 3 and used their funds to build improvements. As I have stated on prior occasions, these are very defensive assets that have meaningful growth potential when the U.S. economy begins to expand again. We believe that few new projects will be built in the near term, and the lack of new competing devel- opments should allow market rents eventually to rise. Deﬂation Concerns The Economic Tsunami of 2008 may result in deﬂation. Historically, a deﬂationary environment, once started, is not easily or quickly reversed. While retailers will suﬀer as a result, deﬂation tends to increase the value of safe, long-term streams of income; this is perhaps one reason that the U.S. 10-year Treasury note is yielding less than 3% despite mas- sive stimulus from the U.S. government. Thus, the secure long-term leases charted on page 3 (much of which are below market), should also increase in value. There is no doubt that the retail environment will be very diﬃcult for some time to come. Most retail segments are experiencing sales declines, particularly in discretionary retail such as furniture, apparel, department store and luxury items. On the other hand, warehouse clubs, supercenters, health and personal care stores, pharmacies, and food and beverage stores which sell items that the consumer needs, rather than wants, have enjoyed modest increases in sales. We continue to believe that there is substantial value inherent in our core portfolio. To replace 80 million square feet of buildings and land would cost, on a conservative basis, at least $150 per square foot, or $12 billion. This is substantially higher than the amount of our present equity and debt capitalization. In Memoriam In April of last year our co-founder, Martin Kimmel, passed away. It was a great honor and privilege for me to be associ- ated with Mr. Kimmel for over 50 years. I met Marty for the ﬁrst time when I was an associate at a law ﬁrm in which his brother, Ed, was a partner. Clients of the law ﬁrm were con- sidering the purchase of a property. I was asked to review the ﬁnancial numbers, and Marty was asked to look at the real es- tate and advise on the soundness of the project. The property was located in Sackets Harbor, New York. Sackets Harbor is west of Watertown on Lake Ontario. It was a bitter cold and freezing March day, but Marty inspected the buildings, the basements and the roofs, and on our return I was absolutely amazed at his grasp and recall of construction issues, leasing issues and assessment of the market. In 1958, I was involved in developing a shopping center in Miami, Florida. The construction and leasing problems were a nightmare. I remembered Marty from the Sackets Harbor trip. At that time, Marty was living in California. I called him and said, “When you get back to New York, I would like to discuss our developing a shopping center in Florida.” There was a long silence on the phone, and then Marty said, “I will be on a plane tomorrow.” We met the day after he arrived and very quickly shook hands on a partnership - and that handshake was all that was ever needed between us. The two of us, Kimmel and Cooper, became “Kimco.” Marty took charge of the shopping center construction and rented an apartment in Florida. He was just a ball of ﬁre. He had enormous energy and worked so hard. Everyone liked Marty, including the subcontractors, leasing agents, retailers and other developers. That shopping center was the genesis of Kimco. All of the associates at Kimco enjoyed being with Marty and listening to his wit and wisdom, including his stories and jokes. Marty’s knowledge of real estate and his insights into people were a vital part of Kimco’s growth. You would never hear Marty say, “Well, that’s business!” Fair deal- ing and keeping your word were at the spine of his being. In July of 1980, Marty was diagnosed with metastatic prostate cancer. He visited four diﬀerent physicians and all of them had a limited projection of his longevity. Marty would not 4 accept the forecasts and survived all four of the physicians by ﬁfteen years. All of us at Kimco will miss him very much. A Bit of Perspective Finally, please allow me to oﬀer a bit of perspective. The U.S. economy is now contending with several major problems, including rising unemployment, a falling stock market, de- clining home prices, and a credit market that’s more troubled than it’s been in decades. This, of course, has greatly impacted retailers and retail real estate. On a personal note, please permit me to acknowledge one more debt of gratitude. My friend and my partner for over 40 years at Kimco, Michael Flynn, retired from his day-to-day responsibilities at Kimco on December 31. His contributions over the years to the growth of Kimco, and to me personally are innumerable and I am very pleased that Mike has agreed to continue to serve as a strategic advisor and a full member of our Investment Committee. Fortunately, for all of us here at Kimco, Mike’s wisdom will remain embedded in the fabric of our ﬁrm. We are well aware of these issues, and are managing through them. Our free cash ﬂows, like those of other retail REITs, will be negatively aﬀected for a period of time, and we know that our cost of capital has become very expensive. But Kimco’s assets, for the most part, provide consumer necessi- ties, and our tenants, while suﬀering declining sales, are gen- erally healthy ﬁnancially. We have very strong relationships within the retail world, in-ﬁll locations that tend to be more resistant to economic weakness, and a substantial portion of our leases at below-market rents. We are conﬁdent that we can get past this diﬃcult period, while also looking for external growth opportunities. We continue to be blessed at Kimco with a wonderful team of enormous talent that, in times like these, is a particularly valuable asset. Dave Henry has 37-years of experience in real estate, has been through many cycles, and is very equipped to deal with the present perturbation in the marketplace. David Lukes, our Chief Operating Oﬃcer, is creative, energetic and enthusiastic about our shopping center business, and has the ability, with our associates, to maximize its value while minimizing risk. We are so lucky to have Mike Pappagallo as our Chief Financial Oﬃcer and the watchdog of our balance sheet. Mike will be instrumental in helping us to navigate the shoals and sandbars of today’s roiled credit markets. We should keep in mind that the population of the U.S. grows by three million each year, or 30 million of increased population over 10 years – more than the population of Canada or Australia. As a consequence of this population growth and resulting demand for retail space, our portfolio should substantially increase in value over time – notwith- standing the retailer retrenchment that’s occurring today. We have a long-term horizon and believe that, during most peri- ods in America, the wind will be at our backs. Patience and conﬁdence are in short supply these days, but Americans are a resilient people and these attributes will soon be restored. We have been through many cycles in our 50-year business history and each time we have weathered the storms and have emerged stronger with a team ready to sail forward. We are passionate and prepared to do everything within our power to achieve the success to which our shareholders are entitled. Sincerely, Milton Cooper Chairman & Chief Executive Oﬃcer 5 Q: Kimco has been in business since 1958, and was one of the earliest REITs to go public in 1991. During that time, the company pursued diﬀerent strategies to maximize shareholder value. In the current environment, Milton has described a “back-to-basics” approach. Can you explain how management made its decision? Dave Henry: It’s important to emphasize the fact that we have been in busi- ness for over 50 years and during that time, we have experienced many economic and real estate cycles. Perhaps none has been as dramatic as this one, but the experience of working through those cycles is built into our culture. For the better part of this decade, the real estate markets were ﬂooded with liquidity. Competition for retail shopping centers was ﬁerce and expensive. As Milton noted in his letter, we responded to those conditions by pursuing a variety of investment strategies to generate returns well above our cost of capital. Some of those investments were not in the form of owning and operating shopping centers. In particular, during the period of 2003-2007, we aggressively invested in a series of opportunities outside of our retail real estate core – investments that generated a return of approximately 71% as they were monetized. We made a signiﬁcant amount of money from these opportunities, which con- tributed to an earnings growth of 77% over that ﬁve-year period. However, we do not believe that the value captured by these prof- itable transactions found its way into our stock price. The excess returns generated above a steady and determinable run rate were not valued as they were outside our core competencies and were perceived to be unpredictable. Since we are in business to create and increase shareholder value, we have concluded that Kimco shareholders would be best served by refocusing our strategy solely on the shopping center business – capitalizing on the beneﬁts of our 50 years of experience and expertise in retail shopping centers. D’Andrea Marketplace Sparks, NV 6 David B. Henry President & Chief Investment Oﬃcer Vice Chairman Q: What exactly does this mean? What types of investments will Kimco make? Also, the Company still has a number of investments that do not seem to ﬁt that model. What happens with those investments? Dave Henry: We have simpliﬁed our business model. Our approach is to acquire, own, and manage neighborhood and community shop- ping centers. Either through direct ownership or through eq- uity investments in joint ventures with numerous institutional partners, Kimco currently has interests in 800 shopping centers in the United States, and more than 50 each in Canada and Mexico. These assets represent the core of our business operations, and will serve as the springboard for future growth over the long term. We will seek to add to our shopping center holdings as opportunities arise in the current market conditions, and also to capture ad- ditional value from our current asset base through internal growth and redevelopment. We will also continue to pursue investments that leverage our vast relationships with retailers, providing solu- tions and expertise in managing retail real estate. As we move to this “back to basics” strategy, we recognize that we must also manage, and ultimately dispose of, those existing invest- ments that do not ﬁt into our business model, which represent about $1.2 billion of our asset base. There are two basic types of investments: approximately $400 million related to ﬁnancial instruments, such as loans and securities of other companies and approximately $800 million, representing non–retail real estate investments. Our investments in ﬁnancial instruments are varied, with the largest being a convertible note issued by Valad Property Group, an Australian public real estate company. We will seek to monetize these investments as market conditions allow and as scheduled amounts mature. The largest position of non-retail real estate is a $150 million in- vestment in a portfolio of 140+ extended stay properties with the Westmont Hospitality group. These assets generate double-digit returns and solid cash ﬂow. An additional $300 million is invested in a series of urban mixed-use assets in New York, Philadelphia, Boston and Chicago, with the expectation of redeveloping and re- positioning the assets. These plans remain viable over the long run; however, we may elect to exit these assets before these strategies are executed. The remaining non-core assets consist primarily of approximately $135 million in preferred equity positions that are not part of our retail focus, and various other mixed-use projects and land holdings. Our goal is to monetize these non-retail assets eﬃciently to increase overall company liquidity and to reinvest in our core operations. 7 Q: The Kimco shopping center portfolio currently has over 900 operating properties. What are the key attributes of your portfolio? David Lukes: his letter, no tenant accounts for more than 3.3% of our total an- Whether located in the U.S., Canada or Mexico, Kimco’s shop- nualized base rent and the top 50 tenants account for a little over ping centers cater to a consumer’s daily needs. Grocery stores, 40%. Over 90% of our properties contain an anchor component. discount stores, home improvement centers, drug stores, nail Half of these contain a grocery component while the other half are salons and dry cleaners are just a few of the merchants that service anchored by a discounter. Daily sales from these two categories thousands of patrons daily in communities where we lease, manage of anchors provide the basis for customer traﬃc and help generate and invest for long-term growth and stability. From an Economics proﬁts for the adjacent shops and sub-anchors. 101 perspective, we are at the point where supply meets demand. Despite a troubling economic environment where bad news is a Whether national or international, our approach to leasing is daily event, Kimco’s shopping center portfolio is well-positioned locally driven. Knowledge of local communities and speciﬁc to support the neighborhoods and communities that have come to markets is a key to our operating success. We have 28 regional rely on them. oﬃces throughout the United States, Puerto Rico, Canada, Mexico and Chile that serve leasing, property management, marketing, Overall, Kimco’s shopping centers are built around more than 13,000 leases representing a wide variety of goods and services that cover more than 140 retail categories. As Milton noted in Center at Hobbs Brook Sturbridge, MA 8 David Lukes Executive Vice President Chief Operating Oﬃcer Knowledge of local communities and speciﬁc markets is a key to our operating success. redevelopment and construction functions. The relationships deals. Why is this important? Simply put, the investment from we have with our national tenants and the creative approach our the landlord (or tenant allowance) is factored in when establishing leasing team takes with the small and midsize tenants combine to base rent; the higher the allowance, the higher the rent. Higher create shopping centers where customers want to visit. Our leasing rents appear to be a wonderful growth vehicle; however, when approach is also conservative. We rarely custom build space for tenants or invest signiﬁcant capital in their start-up. Even when those rents are above the competition and cannot be replaced, they can become a liability. We believe that the rent we receive is capital was easier to access, it’s notable that our tenant improve- for our real estate and not an investment in the tenant’s concept. ment allowances averaged $9 per square foot in the U.S. and In diﬃcult times, such as the one we face today, sales from many have not grown substantially over the past year as credit became tenants decline and this can have a troubling eﬀect when operating scarce. In fact, we have a culture that thrives on low-investment costs are too high, margins shrink, proﬁts fall and the viability of 9 Grocery stores, discount stores, home improvement centers, drug stores, nail salons and dry cleaners are just a few of the merchants that service thousands of patrons daily in communities where we lease, manage and invest for long-term growth and stability. (cid:136)(cid:3)(cid:55)(cid:76)(cid:83)(cid:84)(cid:84)(cid:73)(cid:86)(cid:87)(cid:3)(cid:90)(cid:77)(cid:87)(cid:77)(cid:88)(cid:3)(cid:83)(cid:89)(cid:86)(cid:3)(cid:71)(cid:73)(cid:82)(cid:88)(cid:73)(cid:86)(cid:87)(cid:3)(cid:72)(cid:69)(cid:77)(cid:80)(cid:93) (cid:136)(cid:3)(cid:51)(cid:89)(cid:86)(cid:3)(cid:80)(cid:73)(cid:69)(cid:87)(cid:73)(cid:87)(cid:3)(cid:80)(cid:69)(cid:87)(cid:88)(cid:3)(cid:93)(cid:73)(cid:69)(cid:86)(cid:87) (cid:136)(cid:3)(cid:51)(cid:89)(cid:86)(cid:3)(cid:70)(cid:89)(cid:77)(cid:80)(cid:72)(cid:77)(cid:82)(cid:75)(cid:87)(cid:3)(cid:80)(cid:69)(cid:87)(cid:88)(cid:3)(cid:75)(cid:73)(cid:82)(cid:73)(cid:86)(cid:69)(cid:88)(cid:77)(cid:83)(cid:82)(cid:87) (cid:136)(cid:3)(cid:51)(cid:89)(cid:86)(cid:3)(cid:84)(cid:86)(cid:83)(cid:84)(cid:73)(cid:86)(cid:88)(cid:93)(cid:3)(cid:77)(cid:87)(cid:3)(cid:77)(cid:86)(cid:86)(cid:73)(cid:84)(cid:80)(cid:69)(cid:71)(cid:73)(cid:69)(cid:70)(cid:80)(cid:73) 10 Strawberry Hill, British Columbia, Canada Grocery Anchored Big-Box Anchored with Grocery Component 7.0% Power Center with Grocery Component 3.1% Power Center 16.9% Big-Box Anchored Junior Anchored 12.8% 11.9% Outparcel 6.9% Unanchored 5.0% Drug Store Anchored 3.0% 33.5% Power Center 30.5% 30.6% Grocery Anchored Unanchored 1.6% Outparcel 0.5% Junior Anchored 7.7% Drug Store Anchored 1.4% Big-Box Anchored 10.2% 12.1% Big-Box Anchored with Grocery Component 5.5% Power Center with Grocery Component 0.0% 5.0% 10.0% 15.0% 20.0% 25.0% 30.0% 35.0% Discount 52% Grocery 48% Percentages are based on U.S. shopping centers Percentages are based on annual base rent KIMCO COR E BUSINESS – U.S . SHOPPI NG CE NTE R CHARACTERIZ ATION 11 Q: In the fourth quarter of 2008, the capital markets shut down. How did this aﬀect Kimco? How does Kimco plan to fund its business operations? Does the company still have access to debt? Mike Pappagallo: The severe dislocation in the banking and capital markets has ad- The approach to managing these debt maturities and our overall capital requirements is straightforward: 1) U.S. dollar mortgage versely impacted all industries – but it has been particularly acute ﬁnancing on a portion of our unencumbered asset pool, using for real estate companies. REITs, by their nature, require capital conservative leverage points and strong debt service coverage levels to sustain and grow. Debt ﬁnancing has, and will always be, an that reﬂect the more stringent requirements in the current lending integral part of real estate ﬁnance. It is therefore not surprising that markets; 2) peso denominated ﬁnancing on certain projects in our REIT stock price performances, including Kimco’s, have suﬀered under the dual stresses of economic and capital market troubles. Mexico shopping center portfolio, both to access cash and recycle our investment capital in that market; 3) selected asset sales, with a particular emphasis on our non-core assets as well as net lease and In the face of these issues, we believe our balance sheet philosophy other retail properties with limited growth prospects; and of conservative debt levels, well staggered maturities and a large 4) term loan facilities from those ﬁnancial institutions with long pool of unencumbered properties will position us to navigate and well established relationships with Kimco. In addition, a variety through these diﬃcult times. of our institutional relationships have expressed interest in our Latin American asset base, which can serve as an additional source Our annual debt maturities range from $378 million to $451 of capital. million over each of the next three years, representing roughly 8%- 10% of our total debt obligations. Westlake Shopping Center Daly City, CA 12 Michael V. Pappagallo Executive Vice President Chief Financial Oﬃcer Chief Administrative Oﬃcer REITs, by their nature, require capital to sustain and grow, and debt ﬁnancing has and will always be, an integral part of real estate ﬁnance. So far, the results have been encouraging—commitments for new In addition to our corporate funding needs, we are actively capital representing almost 90% of the scheduled 2009 maturities managing debt maturities and capital needs for our joint venture have been received as of the date of this writing, and we are conﬁ- programs. We recognize signiﬁcant attention has been given to dent that the balance will be done by the middle of the year. this area by our investors, and rightly so. However, most of our existing programs are of a long-term nature and over 75% of the We recently announced that we would recommend to the Board debt outstanding matures after 2011. With respect to our immedi- to reduce our 2009 dividend payout to match the estimated ate reﬁnancing needs, the Company’s exposure is buﬀeted by the minimum amounts necessary to comply with IRS requirements underlying design of the programs: to maintain REIT status. While we recognize the importance of the dividend to our shareholders, the current environment (cid:136)(cid:3)(cid:3)(cid:56)(cid:76)(cid:73)(cid:3)(cid:82)(cid:83)(cid:82)(cid:17)(cid:86)(cid:73)(cid:71)(cid:83)(cid:89)(cid:86)(cid:87)(cid:73)(cid:3)(cid:82)(cid:69)(cid:88)(cid:89)(cid:86)(cid:73)(cid:3)(cid:83)(cid:74)(cid:3)(cid:88)(cid:76)(cid:73)(cid:3)(cid:81)(cid:83)(cid:86)(cid:88)(cid:75)(cid:69)(cid:75)(cid:73)(cid:87)(cid:16)(cid:3) demands preservation of capital, and will enable us to retain over (cid:75)(cid:73)(cid:82)(cid:73)(cid:86)(cid:69)(cid:80)(cid:80)(cid:93)(cid:3)(cid:80)(cid:77)(cid:81)(cid:77)(cid:88)(cid:77)(cid:82)(cid:75)(cid:3)(cid:86)(cid:77)(cid:87)(cid:79)(cid:3)(cid:88)(cid:83)(cid:3)(cid:77)(cid:82)(cid:72)(cid:77)(cid:90)(cid:77)(cid:72)(cid:89)(cid:69)(cid:80)(cid:3)(cid:69)(cid:87)(cid:87)(cid:73)(cid:88)(cid:87)(cid:18) $140 million to further strengthen the balance sheet. This action will enhance ﬂexibility and help position us to build balance sheet (cid:136)(cid:3)(cid:3)(cid:56)(cid:76)(cid:73)(cid:3)(cid:76)(cid:77)(cid:75)(cid:76)(cid:3)(cid:85)(cid:89)(cid:69)(cid:80)(cid:77)(cid:88)(cid:93)(cid:3)(cid:82)(cid:69)(cid:88)(cid:89)(cid:86)(cid:73)(cid:3)(cid:83)(cid:74)(cid:3)(cid:88)(cid:76)(cid:73)(cid:3)(cid:84)(cid:86)(cid:83)(cid:84)(cid:73)(cid:86)(cid:88)(cid:93)(cid:3)(cid:70)(cid:69)(cid:87)(cid:73)(cid:16)(cid:3) capacity for future growth in earnings and dividends. (cid:84)(cid:69)(cid:86)(cid:88)(cid:77)(cid:71)(cid:89)(cid:80)(cid:69)(cid:86)(cid:80)(cid:93)(cid:3)(cid:88)(cid:76)(cid:73)(cid:3)(cid:73)(cid:74)(cid:74)(cid:73)(cid:71)(cid:88)(cid:3)(cid:83)(cid:74)(cid:3)(cid:69)(cid:3)(cid:87)(cid:88)(cid:86)(cid:83)(cid:82)(cid:75)(cid:3)(cid:88)(cid:73)(cid:82)(cid:69)(cid:82)(cid:88)(cid:3)(cid:70)(cid:69)(cid:87)(cid:73)(cid:3) (cid:91)(cid:77)(cid:88)(cid:76)(cid:3)(cid:80)(cid:83)(cid:82)(cid:75)(cid:17)(cid:88)(cid:73)(cid:86)(cid:81)(cid:3)(cid:80)(cid:73)(cid:69)(cid:87)(cid:73)(cid:87). 13 ...our prudent balance sheet management and well structured joint venture programs position us to emerge from the current crisis intact... 14 Holmdel Commons II Holmdel, NJ 15 Our Commitment Integrity – Creativity – Stability 16 UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 (Mark One) FORM 10-K (cid:95) ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 [NO FEE REQUIRED] For the fiscal year ended December 31, 2008 OR (cid:134) TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 [NO FEE REQUIRED] For the transition period from ___________ to ___________ Commission file number 1-10899 KIMCO REALTY CORPORATION (Exact name of registrant as specified in its charter) Maryland (State of incorporation) 3333 New Hyde Park Road, New Hyde Park, NY (Address of principal executive offices) 13-2744380 (I.R.S. Employer Identification No.) 11042-0020 Zip Code Registrant’s telephone number, including area code: (516) 869-9000 Securities registered pursuant to Section 12(g) of the Act: Title of each class Common Stock, par value $.01 per share. Depositary Shares, each representing one-tenth of a share of 6.65% Class F Cumulative Redeemable Preferred Stock, par value $1.00 per share. Depositary Shares, each representing one-hundredth of a share of 7.75% Class G Cumulative Redeemable Preferred Stock, par value $1.00 per share. Name of each exchange on which registered New York Stock Exchange New York Stock Exchange New York Stock Exchange Securities registered pursuant to Section 12(g) of the Act: None Indicate by check mark if the Registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes (cid:95) No (cid:134) Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes (cid:134) No (cid:95) Indicate by check mark whether the Registrant (i) 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 period that the registrant was required to file such reports), and (ii) has been subject to such filing requirements for the past 90 days. Yes (cid:95) No (cid:134) Indicate by 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 Registrant’s knowledge, in the definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. (cid:95) Indicate by check mark whether the Registrant is a large accelerated filer, an accelerated filer or a non-accelerated filer. See definition of “accelerated filer and large accelerated filer” in Rule 12-b of the Exchange Act. Large Accelerated Filer (cid:95) Accelerated Filer (cid:134) Non-Accelerated Filer (cid:134) Smaller Reporting Company (cid:134) Indicate by check mark whether the Registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes (cid:134) No (cid:95) The aggregate market value of the voting stock held by non-affiliates of the Registrant was approximately $8.3 billion based upon the closing price on the New York Stock Exchange for such stock on June 30, 2008. Indicate the number of shares outstanding of each of the Registrant’s classes of common stock, as of the latest practicable date. 271,084,295 shares as of February 19, 2009. (APPLICABLE ONLY TO CORPORATE REGISTRANTS) Part III incorporates certain information by reference to the Registrant’s definitive proxy statement to be filed with respect to the Annual Meeting of Stockholders DOCUMENTS INCORPORATED BY REFERENCE expected to be held on May 12, 2009. Index to Exhibits begins on page 71. Item No. TABLE OF CONTENTS PART I 1. Business . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1A. Risk Factors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1B. Unresolved Staff Comments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2. Properties. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3. Legal Proceedings. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4. Submission of Matters to a Vote of Security Holders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Executive Officers of the Registrant . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . PART II 5. Market for Registrant’s Common Equity, Related Shareholder Matters and Issuer Purchases of Equity Securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6. Selected Financial Data . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations . . . . . . . . . . . . . 7A. Quantitative and Qualitative Disclosures About Market Risk . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8. Financial Statements and Supplementary Data . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure . . . . . . . . . . . . . 9A. Controls and Procedures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9B. Other Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . PART III 10. Directors, Executive Officers and Corporate Governance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11. Executive Compensation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters . . . 13. Certain Relationships and Related Transactions, and Director Independence. . . . . . . . . . . . . . . . . . . . . . . . . 14. Principal Accountant Fees and Services . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . PART IV Form 10-K Report Page 3 12 17 17 19 19 42 43 45 46 65 66 66 66 66 69 69 69 69 69 15. Exhibits Financial Statements and Schedules . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 70 FORWARD-LOOKING STATEMENTS PART I This annual report on Form 10-K, together with other statements and information publicly disseminated by Kimco Realty Corporation (the “Company” or “Kimco”) contains certain forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. The Company intends such forward-looking statements to be covered by the safe harbor provisions for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995 and includes this statement for purposes of complying with these safe harbor provisions. Forward-looking statements, which are based on certain assumptions and describe the Company’s future plans, strategies and expectations, are generally identifiable by use of the words “believe,” “expect,” “intend,” “anticipate,” “estimate,” “project” or similar expressions. You should not rely on forward-looking statements since they involve known and unknown risks, uncertainties and other factors which are, in some cases, beyond the Company’s control and which could materially affect actual results, performances or achievements. Factors which may cause actual results to differ materially from current expectations include, but are not limited to, (i) general economic and local real estate conditions, including real estate values, (ii) the inability of major tenants to continue paying their rent obligations due to bankruptcy, insolvency or general downturn in their business, (iii) financing risks, such as the inability to obtain equity, debt or other sources of financing on favorable terms, (iv) changes in governmental laws and regulations, (v) the level and volatility of interest rates and foreign currency exchange rates, (vi) the availability of suitable acquisition opportunities, (vii) valuation of joint venture investments, (viii) valuation of marketable securities and other investments and (ix) increases in operating costs. Accordingly, there is no assurance that the Company’s expectations will be realized. ITEM 1. BUSINESS GENERAL Kimco Realty Corporation, a Maryland corporation, is one of the nation’s largest owners and operators of neighborhood and community shopping centers. The terms “Kimco”, the “Company”, “we”, “our” and “us” each refer to Kimco Realty Corporation and our subsidiaries unless the context indicates otherwise. The Company is a self-administered real estate investment trust (“REIT”) and its management has owned and operated neighborhood and community shopping centers for over 50 years. The Company has not engaged, nor does it expect to retain, any REIT advisors in connection with the operation of its properties. As of December 31, 2008, the Company had interests in 1,950 properties, totaling approximately 182.2 million square feet of gross leasable area (“GLA”) located in 45 states, Puerto Rico, Canada, Mexico, Chile, Brazil and Peru. The Company’s ownership interests in real estate consist of its consolidated portfolio and in portfolios where the Company owns an economic interest, such as properties in the Company’s investment management programs, where the Company partners with institutional investors and also retains management (See Note 7 of the Notes to Consolidated Financial Statements included in this annual report on Form 10-K). The Company believes its portfolio of neighborhood and community shopping center properties is the largest (measured by GLA) currently held by any publicly traded REIT. The Company’s executive offices are located at 3333 New Hyde Park Road, New Hyde Park, New York 11042-0020 and its telephone number is (516) 869-9000. The Company’s web site is located at http://www.kimcorealty.com. The information contained on our web site does not constitute part of this annual report on Form 10-K. On the Company’s web site you can obtain, free of charge, a copy of our annual report on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K and amendments to those reports filed or furnished pursuant to Section 13(a) or 15(d) of the Exchange Act of 1934, as amended, as soon as reasonably practicable, after we file such material electronically with, or furnish it to, the Securities and Exchange Commission (the “SEC”). HISTORY The Company began operations through its predecessor, The Kimco Corporation, which was organized in 1966 upon the contribution of several shopping center properties owned by its principal stockholders. In 1973, these principals formed the Company as a Delaware corporation, and, in 1985, the operations of The Kimco Corporation were merged into the Company. The Company completed its initial public stock offering (the “IPO”) in November 1991, and, commencing 3 with its taxable year which began January 1, 1992, elected to qualify as a REIT in accordance with Sections 856 through 860 of the Internal Revenue Code of 1986, as amended (the “Code”). In 1994, the Company reorganized as a Maryland corporation. The Company’s growth through its first 15 years resulted primarily from the ground-up development and construction of its shopping centers. By 1981, the Company had assembled a portfolio of 77 properties that provided an established source of income and positioned the Company for an expansion of its asset base. At that time, the Company revised its growth strategy to focus on the acquisition of existing shopping centers and creating value through the redevelopment and re-tenanting of those properties. As a result of this strategy, a majority of the operating shopping centers added to the Company’s portfolio since 1981 have been through the acquisition of existing shopping centers. During 1998, the Company, through a merger transaction, completed the acquisition of The Price REIT, Inc., a Maryland corporation, (the “Price REIT”). Prior to the merger, Price REIT was a self-administered and self-managed equity REIT that was primarily focused on the acquisition, development, management and redevelopment of large retail community shopping center properties concentrated in the western part of the United States. In connection with the merger, the Company acquired interests in 43 properties, located in 17 states. With the completion of the Price REIT merger, the Company expanded its presence in certain western states including Arizona, California and Washington. In addition, Price REIT had strong ground-up development capabilities. These development capabilities, coupled with the Company’s own construction management expertise, provide the Company the ability to pursue ground-up development opportunities on a selective basis. Also during 1998, the Company formed Kimco Income REIT (“KIR”), an entity in which the Company held a 99.99% limited partnership interest. KIR was established for the purpose of investing in high-quality properties financed primarily with individual non-recourse mortgages. The Company believed that these properties were appropriate for financing with greater leverage than the Company traditionally used. At the time of formation, the Company contributed 19 properties to KIR, each encumbered by an individual non-recourse mortgage. During 1999, KIR sold a significant interest in the partnership to institutional investors, thus establishing the Company’s investment management program. The Company holds a 45.0% non-controlling limited partnership interest in KIR and accounts for its investment in KIR under the equity method of accounting. (See Note 7 of the Notes to Consolidated Financial Statements included in this annual report on Form 10-K.) The Company has expanded its investment management program through the establishment of other various institutional joint venture programs in which the Company has non-controlling interests ranging generally from 5% to 45%. The Company’s largest joint venture, Kimco Prudential Joint Venture (“KimPru”), was formed in 2006, in connection with the Pan Pacific Retail Properties Inc. (“Pan Pacific”) merger transaction, with Prudential Real Estate Investors (“PREI”), which holds approximately $3.4 billion in undepreciated real estate assets at book value. The Company earns management fees, acquisition fees, disposition fees and promoted interests based on value creation. (See Note 7 of the Notes to Consolidated Financial Statements included in this annual report on Form 10-K.) In connection with the Tax Relief Extension Act of 1999 (the “RMA”), which became effective January 1, 2001, the Company is permitted to participate in activities from which it was previously precluded in order to maintain its qualification as a REIT, so long as these activities are conducted in entities which elect to be treated as taxable subsidiaries under the Code, subject to certain limitations. As such, the Company, through its taxable REIT subsidiaries, is engaged in various retail real estate related opportunities, including (i) merchant building through its wholly-owned taxable REIT subsidiaries, which are primarily engaged in the ground-up development of neighborhood and community shopping centers and subsequent sale thereof upon completion (see Recent Developments - Ground-Up Development), (ii) retail real estate advisory and disposition services, which primarily focus on leasing and disposition strategies for real estate property interests of both healthy and distressed retailers and (iii) acting as an agent or principal in connection with tax- deferred exchange transactions. The Company will consider other investments through taxable REIT subsidiaries should suitable opportunities arise. The Company has continued its geographic expansion with investments in Canada, Mexico, Puerto Rico, Chile, Brazil and Peru. During October 2001, the Company formed the RioCan Venture (“RioCan Venture”) with RioCan Real Estate Investment Trust (“RioCan”, Canada’s largest publicly traded REIT measured by GLA) in which the Company has a 50% non-controlling interest, to acquire retail properties and development projects in Canada. The Company accounts for this investment under the equity method of accounting. The Company has expanded its presence in Canada with the establishment of other joint venture arrangements. During 2002, the Company, along with various strategic co-investment partners, began acquiring operating and development properties located in Mexico. During 2006, the 4 Company acquired interests in shopping center properties located in Puerto Rico through joint ventures in which the Company holds controlling ownership interests. During 2007, the Company acquired an interest in four shopping center properties located in Chile through a joint venture in which the Company holds a non-controlling ownership interest. During 2008, the Company acquired interests in two shopping center properties in Brazil through a joint venture in which the Company holds a controlling ownership interest and a land parcel for ground-up development located in Peru through a joint venture in which the Company holds a controlling interest. (See Notes 3 and 7 of the Notes to Consolidated Financial Statements included in this annual report on Form 10-K.) In addition, the Company continues to capitalize on its established expertise in retail real estate by establishing other ventures in which the Company owns a smaller equity interest and provides management, leasing and operational support for those properties. The Company also provides preferred equity capital for real estate entrepreneurs and provides real estate capital and advisory services to both healthy and distressed retailers. The Company also makes selective investments in secondary market opportunities where a security or other investment is, in management’s judgment, priced below the value of the underlying assets, however these investments are subject to volatility within the equity and debt markets. INVESTMENT AND OPERATING STRATEGY The Company’s investment objective has been to increase cash flow, current income and, consequently, the value of its existing portfolio of properties and to seek continued growth through (i) the strategic re-tenanting, renovation and expansion of its existing centers and (ii) the selective acquisition of established income-producing real estate properties and properties requiring significant re-tenanting and redevelopment, primarily in neighborhood and community shopping centers in geographic regions in which the Company presently operates. The Company has and will continue to consider investments in other real estate sectors and in geographic markets where it does not presently operate should suitable opportunities arise. The Company’s neighborhood and community shopping center properties are designed to attract local area customers and typically are anchored by a discount department store, a supermarket or a drugstore tenant offering day- to-day necessities rather than high-priced luxury items. The Company may either purchase or lease income-producing properties in the future and may also participate with other entities in property ownership through partnerships, joint ventures or similar types of co-ownership. Equity investments may be subject to existing mortgage financing and/or other indebtedness. Financing or other indebtedness may be incurred simultaneously or subsequently in connection with such investments. Any such financing or indebtedness would have priority over the Company’s equity interest in such property. The Company may make loans to joint ventures in which it may or may not participate. In addition to property or equity ownership, the Company provides property management services for fees relating to the management, leasing, operation, supervision and maintenance of real estate properties. While the Company has historically held its properties for long-term investment and accordingly has placed strong emphasis on its ongoing program of regular maintenance, periodic renovation and capital improvement, it is possible that properties in the portfolio may be sold, in whole or in part, as circumstances warrant, subject to REIT qualification rules. The Company seeks to reduce its operating and leasing risks through diversification achieved by the geographic distribution of its properties and a large tenant base. As of December 31, 2008, the Company’s single largest neighborhood and community shopping center accounted for only 1.0% of the Company’s annualized base rental revenues and only 0.9% of the Company’s total shopping center GLA. At December 31, 2008, the Company’s five largest tenants were The Home Depot, TJX Companies, Sears Holdings, Kohl’s and Wal-Mart, which represent approximately 3.3%, 2.8%, 2.5%, 2.2% and 1.8%, respectively, of the Company’s annualized base rental revenues, including the proportionate share of base rental revenues from properties in which the Company has less than a 100% economic interest. In connection with the RMA, which became effective January 1, 2001, the Company has expanded its investment and operating strategy to include new real estate-related opportunities which the Company was precluded from previously in order to maintain its qualification as a REIT. As such, the Company established a merchant building business through its wholly owned taxable REIT subsidiaries, which make selective acquisitions of land parcels for the ground-up development primarily of neighborhood and community shopping centers and subsequent sale thereof upon completion. Additionally, the Company has developed a business which specializes in providing capital, real estate advisory services and disposition services of real estate controlled by both healthy and distressed and/or bankrupt retailers. These services may include assistance with inventory and fixture liquidation in connection with going-out-of-business sales. The Company may 5 participate with other entities in providing these advisory services through partnerships, joint ventures or other co- ownership arrangements. The Company, as part of its investment strategy, will selectively seek investments for its taxable REIT subsidiaries as suitable opportunities arise. The Company emphasizes equity real estate investments including preferred equity investments, but may, at its discretion, invest in mortgages, other real estate interests and other investments. The mortgages in which the Company may invest may be either first mortgages, junior mortgages or other mortgage-related securities. The Company provides mortgage financing to retailers with significant real estate assets, in the form of leasehold interests or fee-owned properties, where the Company believes the underlying value of the real estate collateral is in excess of its loan balance. In addition, the Company will acquire debt instruments at a discount in the secondary market where the Company believes the asset value of the enterprise is greater than the current value, however these investments are subject to volatility within the equity and debt markets. The Company may legally invest in the securities of other issuers, for the purpose, among others, of exercising control over such entities, subject to the gross income and asset tests necessary for REIT qualification. The Company may, on a selective basis, acquire all or substantially all securities or assets of other REITs or similar entities where such investments would be consistent with the Company’s investment policies. In any event, the Company does not intend that its investments in securities will require it to register as an “investment company” under the Investment Company Act of 1940. The Company has authority to offer shares of capital stock or other senior securities in exchange for property and to repurchase or otherwise reacquire its common stock or any other securities and may engage in such activities in the future. At all times, the Company intends to make investments in such a manner as to be consistent with the requirements of the Code to qualify as a REIT unless, because of circumstances or changes in the Code (or in Treasury Regulations), the Board of Directors determines that it is no longer in the best interests of the Company to qualify as a REIT. CAPITAL STRATEGY AND RESOURCES The Company intends to maintain strong debt service coverage and fixed charge coverage ratios as part of its commitment to maintaining its investment-grade debt ratings. It is management’s intention that the Company continually have access to the capital resources necessary to expand and develop its business. Accordingly, the Company may, from time-to-time, seek to obtain funds through additional common and preferred equity offerings, unsecured debt financings and/or mortgage/construction loan financings and other capital alternatives in a manner consistent with its intention to operate with a conservative debt structure. Since the completion of the Company’s IPO in 1991, the Company has utilized the public debt and equity markets as its principal source of capital for its expansion needs. Since the IPO, the Company has completed additional offerings of its public unsecured debt and equity, raising in the aggregate over $6.1 billion. Proceeds from public capital market activities have been used for repaying indebtedness, acquiring interests in neighborhood and community shopping centers, funding ground-up development projects, expanding and improving properties in the portfolio and other investments, among other things. The Company also has revolving credit facilities totaling approximately $1.7 billion available for general corporate purposes. At December 31, 2008 the Company had approximately $707.7 million outstanding on these facilities. Capital markets have experienced extreme volatility and deterioration since the third quarter 2008. As available, the Company will continue to access these markets. In addition to capital markets, the Company had over 390 unencumbered property interests in its portfolio as of December 31, 2008. The Company has capacity within its bond and other debt covenants to raise up to $1.3 billion in secured financing on these unencumbered properties. In March 2006, the Company was added to the S & P 500 Index, an index containing the stock of 500 Large Cap companies, most of which are U.S. corporations. For further discussion regarding capital strategy and resources, see Management’s Discussion and Analysis of Results of Operations and Financial Condition - Financing Activities. COMPETITION As one of the original participants in the growth of the shopping center industry and one of the nation’s largest owners and operators of neighborhood and community shopping centers, the Company has established close relationships with a large number of major national and regional retailers and maintains a broad network of industry contacts. Management is associated with and/or actively participates in many shopping center and REIT industry organizations. Notwithstanding 6 these relationships, there are numerous regional and local commercial developers, real estate companies, financial institutions and other investors who compete with the Company for the acquisition of properties and other investment opportunities and in seeking tenants who will lease space in the Company’s properties. OPERATING PRACTICES Nearly all operating functions, including leasing, legal, construction, data processing, maintenance, finance and accounting, are administered by the Company from its executive offices in New Hyde Park, New York and supported by the Company’s regional offices. The Company believes it is critical to have a management presence in its principal areas of operation and, accordingly, the Company maintains regional offices in various cities throughout the United States. As of December 31, 2008, a total of 680 persons are employed at the Company’s executive and regional offices. The Company’s regional offices are generally staffed by a regional business leader and the operating personnel necessary to both function as local representatives for leasing and promotional purposes, to complement the corporate office’s administrative and accounting efforts and to ensure that property inspection and maintenance objectives are achieved. The regional offices are important in reducing the time necessary to respond to the needs of the Company’s tenants. Leasing and maintenance personnel from the corporate office also conduct regular inspections of each shopping center. As of December 31, 2008, the Company also employs a total of 54 persons at several of its larger properties in order to more effectively administer its maintenance and security responsibilities. QUALIFICATION AS A REIT The Company has elected, commencing with its taxable year which began January 1, 1992, to qualify as a REIT under the Code. If, as the Company believes, it is organized and operates in such a manner so as to qualify and remain qualified as a REIT under the Code, the Company generally will not be subject to federal income tax, provided that distributions to its stockholders equal at least the amount of its REIT taxable income as defined under the Code. In connection with the RMA, the Company’s taxable subsidiaries may participate in activities from which the Company was previously precluded, subject to certain limitations. The primary activities of the Company’s taxable REIT subsidiaries during 2008 included, but were not limited to, (i) the ground-up development of shopping center properties and subsequent sale thereof upon completion (see Recent Developments - Ground-Up Development), (ii) real estate advisory and disposition services, including the Company’s investment in Albertson’s described below and (iii) acting as an agent or principal in connection with tax deferred exchange transactions. The Company was subject to federal and state income taxes on the income from these activities. RECENT DEVELOPMENTS The following describes the Company’s significant transactions completed during the year ended December 31, 2008. (See Notes 3, 4, 5, 7 and 10 of the Notes to Consolidated Financial Statements included in this annual report on Form 10-K.) Operating Properties Acquisitions During 2008, the Company acquired, in separate transactions, eight operating properties, comprising an aggregate 1.0 million square feet of GLA for an aggregate purchase price of approximately $194.5 million, including the assumption of approximately $96.2 million of non-recourse mortgage debt encumbering four of the properties. Dispositions During 2008, the Company disposed of seven operating properties and a portion of four operating properties, in separate transactions, for an aggregate sales price of approximately $73.0 million, which resulted in an aggregate gain of approximately $20.0 million. In addition, the Company partially recognized deferred gains of approximately $1.2 million on three properties relating to their transfer and partial sale in connection with the Kimco Income Fund II transaction described below. 7 During 2007, the Company transferred 11 operating properties to a wholly-owned consolidated entity, Kimco Income Fund II (“KIF II”), for an aggregate purchase price of approximately $278.2 million, including non-recourse mortgage debt of $180.9 million, encumbering 11 of the properties. During 2008, the Company transferred an additional three properties for $73.9 million, including $50.6 million in non-recourse mortgage debt. During 2008, the Company sold a 26.4% non-controlling ownership interest in the entity to third parties for approximately $32.5 million, which approximated the Company’s cost. The Company continues to consolidate this entity. Redevelopments The Company has an ongoing program to reformat and re-tenant its properties to maintain or enhance its competitive position in the marketplace. During 2008, the Company substantially completed the redevelopment and re-tenanting of various operating properties. The Company expended approximately $68.9 million in connection with these major redevelopments and re-tenanting projects during 2008. The Company is currently involved in redeveloping several other shopping centers in the existing portfolio. The Company anticipates its capital commitment toward these and other redevelopment projects will be approximately $50.0 million to $80.0 million during 2009. Ground-Up Development The Company is engaged in ground-up development projects which consist of (i) merchant building through the Company’s wholly-owned taxable REIT subsidiaries, which develop neighborhood and community shopping centers and the subsequent sale after completion, (ii) U.S. ground-up development projects which will be held as long-term investments by the Company and (iii) various ground-up development projects located in Latin America for long-term investment (see Recent Developments - International Real Estate Investments and Note 3 of the Notes to Consolidated Financial Statements included in this annual report on Form 10-K). The ground-up development projects generally have significant pre-leasing prior to the commencement of construction. As of December 31, 2008, the Company had in progress a total of 47 ground-up development projects, consisting of 11 merchant building projects, of which seven are anticipated to be substantially completed during the first half of 2009, one U.S. ground-up development project, 29 ground-up development projects located throughout Mexico, three ground-up development projects located in Chile, two ground-up development projects located in Brazil and one ground-up development project located in Peru. Merchant Building As of December 31, 2008, the Company had in progress 11 merchant building projects, of which seven are anticipated to be substantially complete during the first half of 2009, located in six states. During 2008, the Company expended approximately $111.9 million in connection with construction costs and the purchase of land related to these projects and those sold during 2008. As part of the Company’s ongoing analysis of its merchant building projects, the Company has determined that for two of its projects, located in Miramar, FL and Middleburg, FL, the estimated recoverable value will not exceed their estimated cost. This is primarily due to adverse changes in local market conditions and the uncertainty of their recovery in the future. As a result, the Company has recorded an aggregate pre-tax adjustment of property carrying value on these projects for the year ended December 31, 2008, of $7.9 million, representing the excess of the carrying values of the projects over their estimated fair values. The Company anticipates its capital commitment toward its merchant building projects will be approximately $70.0 million to $75.0 million during 2009. The proceeds from the sale of completed ground-up development projects during 2009, proceeds from construction loans and availability under the Company’s revolving lines of credit are expected to be sufficient to fund these anticipated capital requirements. Acquisitions During 2008, the Company acquired three land parcels, in separate transactions, for an aggregate purchase price of approximately $9.7 million. During 2008, the Company obtained individual construction loans on three merchant building projects. Additionally, the Company repaid a construction loan on one merchant building project. At December 31, 2008, total loan commitments on the Company’s 16 outstanding construction loans aggregated approximately $364.2 million of which approximately $268.3 million has been funded. These loans have scheduled maturities ranging from two months to 42 months and bear interest at rates ranging from 1.81% to 3.19% at December 31, 2008. Approximately $194.0 million of the outstanding loan balance matures in 2009. These maturing loans are anticipated to be repaid with operating cash flows, borrowings under the Company’s credit facilities and additional debt financings. In addition, the Company may pursue or exercise existing extension options with lenders where available. 8 Dispositions During 2008, the Company sold, in separate transactions, (i) two completed merchant building projects, (ii) 21 out-parcels, (iii) a partial sale of one project and (iv) a partnership interest in one project for aggregate proceeds of approximately $73.5 million and received approximately $4.1 million of proceeds from completed earn-out requirements on three previously sold merchant building projects. These sales resulted in gains of approximately $21.9 million, net of income taxes of $14.6 million. U.S. Long-Term Investment Projects As of December 31, 2008, the Company had in progress one U.S. long-term investment project. The Company anticipates its capital commitment towards this project will be up to $8 million, before reimbursements, during 2009. Kimsouth During June 2006, Kimsouth, a consolidated taxable REIT subsidiary in which the Company holds a 92.5% controlling interest, contributed approximately $51.0 million to fund its 15% non-controlling interest in a newly formed joint venture with an investment group to acquire a portion of Albertson’s Inc. During 2008, the Albertson’s joint venture disposed of 121 operating properties for an aggregate sales price of approximately $564.0 million, resulting in a gain of approximately $552.3 million, of which Kimsouth’s share was approximately $73.1 million. During 2008, Kimsouth recognized equity in income, net from the Albertson’s joint venture of approximately $64.4 million before income taxes, including the $73.1 million in gains and $15.0 million from cash received in excess of the Company’s investment. As a result of these transactions, Kimsouth fully reduced its deferred tax asset valuation allowance and utilized all of its remaining net operating loss (“NOL”)carry-forwards, which provided a tax benefit of approximately $3.1 million. (See Notes 3 and 22 of the Notes to Consolidated Financial Statements included in this annual report on Form 10-K.) Additionally, during 2008, the Albertson’s joint venture acquired six operating properties and four leasehold properties for approximately $26.0 million, including the assumption of approximately $5.8 million in non-recourse mortgage debt encumbering one of the properties. Investment and Advances in Real Estate Joint Ventures The Company has various institutional and non-institutional joint venture programs in which the Company has various non-controlling interests, which are accounted for under the equity method of accounting. (See Note 7 of the Notes to Consolidated Financial Statements included in this annual report on Form 10-K.) Acquisitions During 2008, the Company acquired 2 operating properties, and one leasehold interest through joint ventures in which the Company has non-controlling interests for an aggregate purchase price of approximately $13.8 million. The Company’s aggregate investment resulting from these transactions was approximately $7.9 million. Dispositions During 2008, KimPru sold, in separate transactions, four operating properties for an aggregate sales price of approximately $45.3 million, which approximated their carrying values. Proceeds from these property sales were used to repay a portion of the outstanding balance on its credit facility. Also during 2008, KIR disposed of one operating property for a sales price of approximately $1.9 million. This sale resulted in an aggregate loss of approximately $0.6 million of which the Company’s share was approximately $0.3 million. Financings During August 2008, KimPru entered into a new $650.0 million credit facility which matures in August 2009, with the option to extend for one year, and bears interest at a rate of LIBOR plus 1.25%. KimPru is obligated to pay down a minimum of $165.0 million, among other requirements, in order to exercise the one-year extension option. The required pay down is expected to be sourced from property sales, other debt financings and/or capital contributions by the partners. This facility is guaranteed by the Company with a guarantee from PREI to the Company for 85% of any 9 guaranty payment the Company is obligated to make. Proceeds from this new credit facility were used to repay the outstanding balance of $658.7 million under an existing $1.2 billion credit facility, which was scheduled to mature in October 2008 and bore interest at a rate of LIBOR plus 0.45%. During the year ended December 31, 2008, KIR repaid 16 non-recourse mortgages aggregating approximately $209.6 million, which were scheduled to mature in 2008 and bore interest at rates ranging from 6.57% to 7.28%. Proceeds from eight individual non-recourse mortgages obtained during 2008, aggregating approximately $218.3 million, bearing interest at rates ranging from 6.0% to 6.5% with maturity dates ranging from 2015 to 2018 were used to fund these repayments. In addition, during 2008, two joint venture investments in which the Company holds a 50% interest in each obtained individual non-recourse mortgages totaling $77.0 million. These mortgages have interest rates ranging from 6.38% to 6.47% and maturities ranging from 2018 to 2019. Proceeds from these mortgages were used to retire $36.0 million of mortgage debt encumbering two properties held by the joint ventures. International Real Estate Investments Canadian Investments During 2008, the Company acquired, in separate transactions, 12 operating properties located in Canada, through three newly formed joint ventures in which the Company has non-controlling interests. These properties were acquired for an aggregate purchase price of approximately CAD $193.7 million (approximately USD $187.2 million), including CAD $105.6 million (approximately USD $101.7 million) of non-recourse mortgage debt encumbering all 12 of the properties. The Company’s aggregate investment in these joint ventures was approximately CAD $46.1 million (approximately USD $37.7 million). During 2008, the Company provided, through three separate Canadian preferred equity investments, an aggregate of approximately CAD $15.3 million (approximately USD $12.5 million) to developers and owners of 11 real estate properties. The Company recognized equity in income from its unconsolidated Canadian investments in real estate joint ventures of approximately $18.6 million, $22.5 million and $21.1 million during 2008, 2007 and 2006, respectively. In addition, income from its Canadian preferred equity investments was approximately $23.2 million, $35.1 million and $13.9 million during 2008, 2007 and 2006, respectively. Latin American Investments During 2008, the Company acquired, in separate transactions, one operating property located in Valinhos, Brazil for a purchase price of 29.0 million Brazilian Real (“BRL”) (approximately USD $17.4 million) comprising 121,000 square feet of GLA and one operating property in Santiago, Chile, for a purchase price of 1.5 billion Chilean Pesos (“CLP”) (approximately USD $4.0 million), comprising 26,000 square feet. (See Note 3 of the Notes to Consolidated Financial Statements included in this annual report on Form 10-K). During 2008, the Company acquired (i) 5 land parcels located throughout Mexico for an aggregate purchase price of approximately 368.2 million Mexican Pesos (“MXP”) (approximately USD $33.3 million), (ii) one land parcel located in Lima, Peru for a purchase price of approximately 1.9 million Peruvian Nuevo Sol (“PEN”) (approximately USD $0.7 million), (iii) two land parcels located in Chile for a purchase price of approximately 7.9 billion CLP (approximately USD $16.1 million) and (iv) one land parcel located in Hortolandia, Brazil for a purchase price of approximately 7.4 BRL (approximately USD $3.2 million). These nine land parcels will be developed into retail centers aggregating approximately 1.7 million square feet of gross leasable area with a total estimated aggregate project cost of approximately USD $195.5 million. These projects are inline with budget and on or close to schedule. During 2008, the Company acquired, through an unconsolidated joint venture investment, 11 land parcels, in separate transactions, located throughout Mexico for an aggregate purchase price of approximately 554.9 million MXP (approximately USD $48.5 million) which will be held for investment or possible future development. In addition, during 2008 the Company acquired, in separate transactions, two land parcels located in Chihuahua and San Luis Potosi, Mexico, and one operating property located in Monterrey, Mexico for an aggregate purchase price of approximately $10.9 million through an existing joint venture in which the Company has non-controlling interests. The Company’s aggregate investment in these joint ventures was approximately $5.5 million. 10 During 2008, the Company acquired four operating properties located in Santiago, Chile, through a joint venture in which the Company has a non-controlling interest. These properties were acquired for an aggregate purchase price of approximately 2.5 billion CLP (approximately USD $3.8 million). The Company’s aggregate investment in this joint venture is approximately CLP 1.3 billion (approximately USD $1.9 million). The Company recognized equity in income from its unconsolidated Mexican investments in real estate joint ventures of approximately $17.1 million, $5.2 million and $11.8 million during 2008, 2007 and 2006, respectively. The Company recognized equity in income from its unconsolidated Chilean investments in real estate joint ventures of approximately $0.2 million and $0.1 million during 2008 and 2007, respectively. The Company’s revenues from its consolidated Mexican subsidiaries aggregated approximately $20.3 million, $8.5 million and $2.4 million during 2008, 2007 and 2006, respectively. The Company’s revenues from its consolidated Brazilian subsidiaries aggregated approximately $0.4 million during 2008. Other Real Estate Investments Preferred Equity Capital The Company maintains a Preferred Equity program, which provides capital to developers and owners of real estate properties. During 2008, the Company provided, in separate transactions, an aggregate of approximately $51.9 million in investment capital to developers and owners of 28 real estate properties, including the Canadian investments described above. For the year ended December 31, 2008, the Company earned approximately $66.8 million, including $24.6 million of profit participation earned from 10 capital transactions from these investments. Mortgages and Other Financing Receivables During 2008, the Company provided financing to six borrowers for an aggregate amount of up to approximately $86.3 million, of which $72.9 million was outstanding as of December 31, 2008. As of December 31, 2008, the Company had 35 loans with total commitments of up to $208.5 million, of which approximately $181.2 million has been funded. Availability under the Company’s revolving credit facilities are expected to be sufficient to fund these commitments. (See Note 9 of the Notes to Consolidated Financial Statements included in this annual report on Form 10-K.) Asset Impairments Recent market and economic conditions have been unprecedented and challenging with tighter credit conditions and slower growth throughout 2008. For the year ended December 31, 2008, continued concerns about the systemic impact of the availability and cost of credit, the U.S. mortgage market, inflation, energy costs, geopolitical issues and declining equity and real estate markets have contributed to increased market volatility and diminished expectations for the U.S. economy. These conditions, combined with volatile oil prices, declining business and consumer confidence and increased unemployment have contributed to volatility of unprecedented levels and has led to the unprecedented deterioration of U.S. and international equity markets during the fourth quarter of 2008. Historically, real estate has been subject to a wide range of cyclical economic conditions that affect various real estate markets and geographic regions with differing intensities and at different times. Different regions of the United States have and may continue to experience varying degrees of economic growth or distress. The decline in market conditions has also had a negative effect on real estate transactional activity as it relates to the acquisition and sale of real estate assets. As a result of the volatility and declining market conditions described above, the Company for the year ended December 31, 2008, recognized non-cash impairment charges of approximately $114.8 million, net of income tax benefit of approximately $31.1 million, of which approximately $105.1 million of these charges where taken in the fourth quarter of 2008. Approximately $92.7 million of the total non-cash impairment charges for the year ended December 31, 2008, were due to the decline in value of certain marketable equity securities and other investments that were deemed to be other- than-temporary. Of the $92.7 million, approximately $83.1 million of these impairment charges were taken at the end of the fourth quarter of 2008 resulting from the unprecedented deterioration of the equity markets during the fourth quarter and the uncertainty of their future recoverability. 11 The Company recognized non-cash impairment charges of $15.5 million against the carrying value of its investment in its unconsolidated joint ventures with PREI, reflecting an other-than-temporary decline in the fair value of its investment resulting from further significant declines in the real estate markets during the fourth quarter of 2008. Also, impairments of approximately $6.6 million, net of income tax benefit, were recognized on real estate development projects including Plantations Crossing located in Middleburg, FL and Miramar Town Center located in Miramar, FL, previously described. These development project impairment charges are the result of adverse changes in local market conditions and the uncertainty of their recovery in the future. (See Notes 5, 7 and 10 of the Notes to Consolidated Financial Statements included in this annual report on Form 10-K.) In addition to the impairment charges above, the Company recognized impairment charges during 2008 of approximately $11.2 million, before income tax benefit of approximately $4.5 million, relating to certain properties held by an unconsolidated joint venture within the KimPru joint venture that are deemed held-for-sale or were transitioned from held-for-sale to held-for-use properties. These impairment charges are included in Equity in income of joint ventures, net in the Company’s Consolidated Statements of Income. Financing Transactions During September 2008, the Company completed a primary public stock offering of 11,500,000 shares of the Company’s common stock (“Common Stock”). The net proceeds from this sale of Common Stock, totaling approximately $409.4 million (after related transaction costs of $0.6 million) were used to partially repay the outstanding balance under the Company’s U.S. revolving credit facility. For discussion regarding financing transactions relating to the Company’s unsecured notes, credit facilities, non- recourse mortgage debt and construction loans, see Management’s Discussion and Analysis of Results of Operations and Financial Condition - Financing Activities and Contractual Obligations and Other Commitments. (See Notes 11, 12, 13 and 17 of the Notes to Consolidated Financial Statement included in this annual report on Form 10-K.) Exchange Listings The Company’s common stock, Class F Depositary Shares and Class G Depositary Shares are traded on the NYSE under the trading symbols “KIM”, “KIMprF” and “KIMprG”, respectively. ITEM 1A. RISK FACTORS We are subject to certain business and legal risks including, but not limited to, the following: Risks Related to Our Status as a Real Estate Investment Trust Loss of our tax status as a real estate investment trust could have significant adverse consequences to us and the value of our securities. We have elected to be taxed as a REIT for federal income tax purposes under the Code. We currently intend to operate so as to qualify as a REIT and believe that our current organization and method of operation complies with the rules and regulations promulgated under the federal income tax code to enable us to qualify as a REIT. Qualification as a REIT involves the application of highly technical and complex federal income tax code provisions for which there are only limited judicial and administrative interpretations. The determination of various factual matters and circumstances not entirely within our control may affect our ability to qualify as a REIT. New legislation, regulations, administrative interpretations or court decisions could significantly change the tax laws with respect to qualification as a REIT, the federal income tax consequences of such qualification or the desirability of an investment in a REIT relative to other investments. There can be no assurance that we have qualified or will continue to qualify as a REIT for tax purposes. If we lose our REIT status, we will face serious tax consequences that will substantially reduce the funds available to pay dividends to stockholders. If we fail to qualify as a REIT: (cid:135)(cid:3) we would not be allowed a deduction for distributions to stockholders in computing our taxable income and would be subject to federal income tax at regular corporate rates; (cid:135)(cid:3) we could be subject to the federal alternative minimum tax and possibly increased state and local taxes; 12 (cid:135)(cid:3) unless we were entitled to relief under statutory provisions, we could not elect to be subject to tax as a REIT for four taxable years following the year during which we were disqualified; and (cid:135)(cid:3) we would not be required to make distributions to stockholders. As a result of all these factors, our failure to qualify as a REIT could impair our ability to expand our business and raise capital and could adversely affect the value of our securities. Risks Related to Adverse Global Market and Economic Conditions Recent market and economic conditions have been unprecedented and challenging with slower growth and tighter credit conditions through the end of 2008. These adverse market conditions and competition may impede our ability to generate sufficient income to pay expenses, maintain properties, pay dividends and refinance debt. The economic performance and value of our properties is subject to all of the risks associated with owning and operating real estate including: (cid:135)(cid:3) (cid:135)(cid:3) (cid:135)(cid:3) (cid:135)(cid:3) (cid:135)(cid:3) (cid:135)(cid:3) (cid:135)(cid:3) (cid:135)(cid:3) (cid:135)(cid:3) (cid:135)(cid:3) changes in the national, regional and local economic climate; local conditions, including an oversupply of, or a reduction in demand for, space in properties like those that we own; the attractiveness of our properties to tenants; the ability of tenants to pay rent; competition from other available properties; changes in market rental rates; the need to periodically pay for costs to repair, renovate and re-let space; changes in operating costs, including costs for maintenance, insurance and real estate taxes; the fact that the expenses of owning and operating properties are not necessarily reduced when circumstances such as market factors and competition cause a reduction in income from the properties; and changes in laws and governmental regulations, including those governing usage, zoning, the environment and taxes. The retail shopping sector has been negatively affected by recent economic conditions. Adverse economic conditions have forced some weaker retailers, in some cases, to declare bankruptcy and close stores. Certain retailers have announced store closings even though they have not filed for bankruptcy protection. These downturns in the retailing industry likely will have a direct impact on our performance. Continued store closings or declarations of bankruptcy by our tenants may have a material adverse effect on the Company’s overall performance. Adverse general or local economic conditions could result in the inability of some tenants of the Company to meet their lease obligations and could otherwise adversely affect the Company’s ability to attract or retain tenants. Our properties consist primarily of community and neighborhood shopping centers and other retail properties. Our performance therefore is generally linked to economic conditions in the market for retail space. In the future, the market for retail space could be adversely affected by: ongoing consolidation in the retail sector; the adverse financial condition of some large retailing companies; (cid:135)(cid:3) weakness in the national, regional and local economies; (cid:135)(cid:3) (cid:135)(cid:3) (cid:135)(cid:3) (cid:135)(cid:3) Failure by any anchor tenant with leases in multiple locations to make rental payments to us because of a deterioration increasing consumer purchases through catalogues and the internet. the excess amount of retail space in a number of markets; and of its financial condition or otherwise could impact our performance. 13 Our performance depends on our ability to collect rent from tenants. At any time, our tenants may experience a downturn in their business that may significantly weaken their financial condition. As a result, our tenants may delay a number of lease commencements, decline to extend or renew leases upon expiration, fail to make rental payments when due, close stores or declare bankruptcy. Any of these actions could result in the termination of the tenants’ leases and the loss of rental income attributable to these tenants’ leases. In the event of a default by a tenant, we may experience delays and costs in enforcing our rights as landlord under the terms of our leases. In addition, multiple lease terminations by tenants or a failure by multiple tenants to occupy their premises in a shopping center could result in lease terminations or significant reductions in rent by other tenants in the same shopping centers under the terms of some leases. In that event, we may be unable to re-lease the vacated space at attractive rents or at all, and our rental payments from our continuing tenants could significantly decrease. The occurrence of any of the situations described above, particularly if it involves a substantial tenant with leases in multiple locations, could have a material adverse effect on our performance. We may be unable to collect balances due from tenants in bankruptcy. A tenant that files for bankruptcy protection may not continue to pay us rent. A bankruptcy filing by or relating to one of our tenants or a lease guarantor would bar all efforts by us to collect pre-bankruptcy debts from the tenant or the lease guarantor, or their property, unless the bankruptcy court permits us to do so. A tenant or lease guarantor bankruptcy could delay our efforts to collect past due balances under the relevant leases and could ultimately preclude collection of these sums. If a lease is rejected by a tenant in bankruptcy, we would have only a general unsecured claim for damages. As a result, it is likely that we would recover substantially less than the full value of any unsecured claims it holds, if at all. Risks Related to Our Acquisition, Development, Operation, and Sale of Real Property We may be unable to sell our real estate property investments when appropriate or on favorable terms. Real estate property investments are illiquid and generally cannot be disposed of quickly. In addition, the federal tax code imposes restrictions on a REIT’s ability to dispose of properties that are not applicable to other types of real estate companies. Therefore, we may not be able to vary its portfolio in response to economic or other conditions promptly or on favorable terms. We may acquire or develop properties or acquire other real estate related companies and this may create risks. We may acquire or develop properties or acquire other real estate related companies when we believe that an acquisition or development is consistent with our business strategies. We may not succeed in consummating desired acquisitions or in completing developments on time or within budget. We face competition in pursuing these acquisition or development opportunities that could increase our costs. When we do pursue a project or acquisition, we may not succeed in leasing newly developed or acquired properties at rents sufficient to cover the costs of acquisition or development and operations. Difficulties in integrating acquisitions may prove costly or time-consuming and could divert management’s attention. Acquisitions or developments in new markets or industries where we do not have the same level of market knowledge may result in poorer than anticipated performance. We may also abandon acquisition or development opportunities that management has begun pursuing and consequently fail to recover expenses already incurred and have devoted management time to a matter not consummated. Furthermore, our acquisitions of new properties or companies will expose us to the liabilities of those properties or companies, some of which we may not be aware at the time of acquisition. In addition, development of our existing properties presents similar risks. There is a lack of operating history with respect to our recent acquisitions and development of properties and we may not succeed in the integration or management of additional properties. These properties may have characteristics or deficiencies currently unknown to us that affect their value or revenue potential. It is also possible that the operating performance of these properties may decline under our management. As we acquire additional properties, we will be subject to risks associated with managing new properties, including lease-up and tenant retention. In addition, our ability to manage our growth effectively will require us to successfully integrate our new acquisitions into our existing management structure. We may not succeed with this integration or effectively manage additional properties. Also, newly acquired properties may not perform as expected. We face competition in leasing or developing properties. 14 We face competition in the acquisition, development, operation and sale of real property from others engaged in real estate investment. Some of these competitors may have greater financial resources than we do. This could result in competition for the acquisition of properties for tenants who lease or consider leasing space in our existing and subsequently acquired properties and for other real estate investment opportunities. Risks Related to Our Joint Venture and Preferred Equity Investments We do not have exclusive control over our joint venture and preferred equity investments, such that we are unable to ensure that our objectives will be pursued. We have invested in some cases as a co-venturer or partner in properties instead of owning directly. In these investments, we do not have exclusive control over the development, financing, leasing, management and other aspects of these investments. As a result, the co-venturer or partner might have interests or goals that are inconsistent with us, take action contrary to our interests or otherwise impede our objectives. If the co-venturer or partner defaults on their obligations, we may be required to fulfill their obligation ourselves. The co-venturer or partner also might become insolvent or bankrupt, which may result in significant losses to us. We may not be able to recover our investments in our joint venture or preferred equity investments, which may result in significant losses to us. Our joint venture and preferred equity investments generally own real estate properties for which the economic performance and value is subject to all the risks associated with owning and operating real estate as described above. Risks Related to Our International Operations We have significant international operations that carry additional risks. We invest in and conduct operations outside the United States. The risks we face in international business operations include, but are not limited to: potential adverse tax burdens; currency risks, including currency fluctuations; obstacles to the repatriation of earnings and cash; unexpected changes in legislative and regulatory requirements; burdens of complying with different permitting standards, labor laws and a wide variety of foreign laws; (cid:135)(cid:3) (cid:135)(cid:3) (cid:135)(cid:3) (cid:135)(cid:3) (cid:135)(cid:3) (cid:135)(cid:3) (cid:135)(cid:3) (cid:135)(cid:3) (cid:135)(cid:3) Each of these risks might impact our cash flow or impair our ability to borrow funds, which ultimately could difficulties in staffing and managing international operations; and reduced protection for intellectual property in some countries. economic slowdown and/or downturn in foreign markets; regional, national and local political uncertainty; adversely affect our business, financial condition, operating results and cash flows. Risks Related to Our Financing Activities We may be unable to obtain financing through the debt and equities market, which would have a material adverse effect on our growth strategy, our results of operations and our financial condition. The capital and credit markets have become increasingly volatile and constrained as a result of adverse conditions that have caused the failure and near failure of a number of large financial services companies. We cannot assure you that we will be able to access the capital and credit markets to obtain additional debt or equity financing or that we will be able to obtain financing on favorable terms. The inability to obtain financing could have negative effects on our business, such as: (cid:135)(cid:3) we could have great difficulty acquiring or developing properties, which would materially adversely affect our business strategy; 15 our liquidity could be adversely affected; (cid:135)(cid:3) (cid:135)(cid:3) we may be unable to repay or refinance our indebtedness; (cid:135)(cid:3) we may need to make higher interest and principal payments or sell some of our assets on unfavorable terms to fund our indebtedness; and (cid:135)(cid:3) we may need to issue additional capital stock, which could further dilute the ownership of our existing shareholders. Financial covenants to which we are subject may restrict our operating and acquisition activities. Our revolving credit facilities and the indentures under which our senior unsecured debt is issued contain certain financial and operating covenants, including, among other things, certain coverage ratios, as well as limitations on our ability to incur debt, make dividend payments, sell all or substantially all of our assets and engage in mergers and consolidations and certain acquisitions. These covenants may restrict our ability to pursue certain business initiatives or certain acquisition transactions that might otherwise be advantageous. In addition, failure to meet any of the financial covenants could cause an event of default under and/or accelerate some or all of our indebtedness, which would have a material adverse effect on us. Adverse changes in our credit ratings could impair our ability to obtain additional debt and equity financing on favorable terms, if at all, and could significantly reduce the market price of our publicly traded securities. Risks Related to the Market Price of Our Publicly Traded Securities Changes in market conditions could adversely affect the market price of our publicly traded securities. As with other publicly traded securities, the market price of our publicly traded securities depends on various market conditions, which may change from time-to-time. Among the market conditions that may affect the market price of our publicly traded securities are the following: (cid:135)(cid:3) (cid:135)(cid:3) (cid:135)(cid:3) (cid:135)(cid:3) (cid:135)(cid:3) (cid:135)(cid:3) (cid:135)(cid:3) the extent of institutional investor interest in us; the reputation of REITs generally and the reputation of REITs with portfolios similar to us; the attractiveness of the securities of REITs in comparison to securities issued by other entities (including securities issued by other real estate companies); our financial condition and performance; the market’s perception of our growth potential and potential future cash dividends; an increase in market interest rates, which may lead prospective investors to demand a higher distribution rate in relation to the price paid for our shares; and general economic and financial market conditions. Risks Related to Our Marketable Securities and Mortgage Receivables We may not be able to recover our investments in marketable securities or mortgage receivables, which may result in significant losses to us. Our investments in marketable securities are subject to specific risks relating to the particular issuer of the securities, including the financial condition and business outlook of the issuer, which may result in significant losses to us. Marketable securities are generally unsecured and may also be subordinated to other obligations of the issuer. As a result, investments in marketable securities are subject to risks of: (cid:135)(cid:3) (cid:135)(cid:3) (cid:135)(cid:3) (cid:135)(cid:3) limited liquidity in the secondary trading market; substantial market price volatility resulting from changes in prevailing interest rates; subordination to the prior claims of banks and other senior lenders to the issuer; the possibility that earnings of the issuer may be insufficient to meet its debt service and distribution obligations; and 16 (cid:135)(cid:3) the declining creditworthiness and potential for insolvency of the issuer during periods of rising interest rates and economic downturn. The issuers of our marketable securities also might become insolvent or bankrupt, which may result in significant losses to us. These risks may adversely affect the value of outstanding marketable securities and the ability of the issuers to make distribution payments. We invest in mortgage receivables. Our investments in mortgage receivables normally are not insured or otherwise guaranteed by any institution or agency. In the event of a default by a borrower, it may be necessary for us to foreclose our mortgage or engage in costly negotiations. Delays in liquidating defaulted mortgage loans and repossessing and selling the underlying properties could reduce our investment returns. Furthermore, in the event of default, the actual value of the property securing the mortgage may decrease. A decline in real estate values will adversely affect the value of our loans and the value of the mortgages securing our loans. Our mortgage receivables may be or become subordinated to mechanics’ or materialmen’s liens or property tax liens. In these instances we may need to protect a particular investment by making payments to maintain the current status of a prior lien or discharge it entirely. In these cases, the total amount we recover may be less than our total investment, resulting in a loss. In the event of a major loan default or several loan defaults resulting in losses, our investments in mortgage receivables would be materially and adversely affected. Risks Related to Environmental Regulations We may be subject to environmental regulations. Under various federal, state, and local laws, ordinances and regulations, we may be considered an owner or operator of real property and may be responsible for paying for the disposal or treatment of hazardous or toxic substances released on or in our property, as well as certain other potential costs which could relate to hazardous or toxic substances (including governmental fines and injuries to persons and property). This liability may be imposed whether or not we knew about, or were responsible for, the presence of hazardous or toxic substances. ITEM 1B. UNRESOLVED STAFF COMMENTS None ITEM 2. PROPERTIES REAL ESTATE PORTFOLIO As of December 31, 2008, the Company’s real estate portfolio was comprised of interests in approximately 160.8 million square feet of GLA in 1,407 operating properties primarily consisting of neighborhood and community shopping centers, and 16 retail store leases located in 45 states, Puerto Rico, Canada, Mexico, Chile, Brazil, and Peru. This 160.8 million square feet of GLA does not include 16 properties under development comprising 1.2 million square feet of GLA related to the Preferred Equity program, 29 property interests comprising 0.6 million square feet of GLA related to FNC Realty, 402 property interests comprising 2.3 million square feet of GLA related to a net lease portfolio, 49 property interests comprising 2.4 million square feet of GLA related to the NewKirk Portfolio and 13.3 million square feet of planned GLA for 47 ground-up development projects. The Company’s portfolio includes interests ranging from 5% to 50% in 481 shopping center properties comprising approximately 73.5 million square feet of GLA relating to the Company’s investment management programs and other joint ventures. Neighborhood and community shopping centers comprise the primary focus of the Company’s current portfolio. As of December 31, 2008, the Company’s total shopping center portfolio, comprised of total GLA of 126.9 million from 893 properties, was approximately 93.9% leased. The Company’s neighborhood and community shopping center properties, which are generally owned and operated through subsidiaries or joint ventures, had an average size of approximately 142,000 square feet as of December 31, 2008. The Company generally retains its shopping centers for long-term investment and consequently pursues a program of regular physical maintenance together with major renovations and refurbishing to preserve and increase the value of its properties. These projects usually include renovating existing facades, installing uniform signage, resurfacing parking lots and enhancing parking lot lighting. During 2008, the Company capitalized approximately $16.1 million in connection with these property improvements and expensed to operations approximately $21.4 million. 17 The Company’s neighborhood and community shopping centers are usually “anchored” by a national or regional discount department store, supermarket or drugstore. As one of the original participants in the growth of the shopping center industry and one of the nation’s largest owners and operators of shopping centers, the Company has established close relationships with a large number of major national and regional retailers. Some of the major national and regional companies that are tenants in the Company’s shopping center properties include The Home Depot, TJX Companies, Sears Holdings, Kohl’s, Wal-Mart, Royal Ahold, Best Buy, Bed Bath and Beyond and Costco. A substantial portion of the Company’s income consists of rent received under long-term leases. Most of the leases provide for the payment of fixed-base rentals monthly in advance and for the payment by tenants of an allocable share of the real estate taxes, insurance, utilities and common area maintenance expenses incurred in operating the shopping centers. Although many of the leases require the Company to make roof and structural repairs as needed, a number of tenant leases place that responsibility on the tenant, and the Company’s standard small store lease provides for roof repairs to be reimbursed by the tenant as part of common area maintenance. The Company’s management places a strong emphasis on sound construction and safety at its properties. Approximately 22.8% of the Company’s leases also contain provisions requiring the payment of additional rent calculated as a percentage of tenants’ gross sales above predetermined thresholds. Percentage rents accounted for less than 1% of the Company’s revenues from rental property for the year ended December 31, 2008. Additionally, a majority of the Company’s leases have built in contractual rent increases as well as escalation clauses. Such escalation clauses often include increases based upon changes in the consumer price index or similar inflation indices. Minimum base rental revenues and operating expense reimbursements accounted for approximately 99% of the Company’s total revenues from rental property for the year ended December 31, 2008. The Company’s management believes that the base rent per leased square foot for many of the Company’s existing leases is generally lower than the prevailing market-rate base rents in the geographic regions where the Company operates, reflecting the potential for future growth. As of December 31, 2008, the Company’s consolidated portfolio, comprised of 53.4 million of GLA, was 93.2% leased. For the period January 1, 2008 to December 31, 2008, the Company increased the average base rent per leased square foot in its consolidated portfolio of neighborhood and community shopping centers from $10.35 to $10.69, an increase of $0.34. This increase primarily consists of (i) a $0.01 increase relating to acquisitions, (ii) a $0.12 increase relating to dispositions or the transfer of properties to various joint venture entities and (iii) a $0.21 increase relating to new leases signed net of leases vacated and rent step-ups within the portfolio. The Company seeks to reduce its operating and leasing risks through geographic and tenant diversity. No single neighborhood and community shopping center accounted for more than 0.9% of the Company’s total shopping center GLA or more than 1.0% of total annualized base rental revenues as of December 31, 2008. The Company’s five largest tenants at December 31, 2008, were The Home Depot, TJX Companies, Sears Holdings, Kohl’s and Wal-Mart, which represent approximately 3.3%, 2.8%, 2.5%, 2.2% and 1.8%, respectively, of the Company’s annualized base rental revenues, including the proportionate share of base rental revenues from properties in which the Company has less than a 100% economic interest. The Company maintains an active leasing and capital improvement program that, combined with the high quality of the locations, has made, in management’s opinion, the Company’s properties attractive to tenants. The Company’s management believes its experience in the real estate industry and its relationships with numerous national and regional tenants gives it an advantage in an industry where ownership is fragmented among a large number of property owners. RETAIL STORE LEASES In addition to neighborhood and community shopping centers, as of December 31, 2008, the Company had interests in retail store leases totaling approximately 1.5 million square feet of anchor stores in 16 neighborhood and community shopping centers located in 11 states. As of December 31, 2008, approximately 95.9% of the space in these anchor stores had been sublet to retailers that lease the stores under net lease agreements providing for average annualized base rental payments of $4.12 per square foot. The average annualized base rental payments under the Company’s retail store leases to the landowners of such subleased stores are approximately $2.13 per square foot. The average remaining primary term of the retail store leases (and, similarly, the remaining primary term of the sublease agreements with the tenants currently leasing such space) is approximately four years, excluding options to renew the leases for terms which generally range from five years to 20 years. The Company’s investment in retail store leases is included in the caption Other real estate investments in the Company’s Consolidated Balance Sheets. 18 GROUND-LEASED PROPERTIES The Company has interests in 48 consolidated shopping center properties and interests in 26 shopping center properties in unconsolidated joint ventures that are subject to long-term ground leases where a third party owns and has leased the underlying land to the Company (or an affiliated joint venture) to construct and/or operate a shopping center. The Company or the joint venture pays rent for the use of the land and generally is responsible for all costs and expenses associated with the building and improvements. At the end of these long-term leases, unless extended, the land together with all improvements revert to the landowner. GROUND-UP DEVELOPMENT PROPERTIES The Company is engaged in ground-up development projects, which consist of (i) merchant building through the Company’s wholly-owned taxable REIT subsidiaries, which develop neighborhood and community shopping centers and the subsequent sale thereof upon completion, (ii) U.S. ground-up development projects which will be held as long-term investments by the Company and (iii) various ground-up development projects located in Latin America for long-term investment (see Recent Developments - International Real Estate Investments and Note 3 of the Notes to Consolidated Financial Statements included in this annual report on Form 10-K). The ground-up development projects generally have significant pre-leasing prior to the commencement of the construction. As of December 31, 2008, the Company had in progress a total of 47 ground-up development projects, consisting of 11 merchant building projects, of which seven are anticipated to be substantially complete during the first half of 2009, one U.S. ground-up development project, 29 ground- up development projects located throughout Mexico, three ground-up development projects located in Chile, two ground- up development projects located in Brazil and one ground-up development project located in Peru. As of December 31, 2008, the Company had in progress 11 merchant building projects located in six states, which are expected to be sold upon completion. These projects had significant pre-leasing prior to the commencement of construction. As of December 31, 2008, the average annual base rent per leased square foot for the merchant building portfolio was $14.87 and the average annual base rent per leased square foot for new leases executed in 2008 was $17.58. UNDEVELOPED LAND The Company owns certain unimproved land tracts and parcels of land adjacent to certain of its existing shopping centers that are held for possible expansion. At times, should circumstances warrant, the Company may develop or dispose of these parcels. The table on pages 20 through 41 sets forth more specific information with respect to each of the Company’s property interests. ITEM 3. LEGAL PROCEEDINGS The Company is not presently involved in any litigation nor, to its knowledge, is any litigation threatened against the Company or its subsidiaries that, in management’s opinion, would result in any material adverse effect on the Company’s ownership, management or operation of its properties taken as a whole, or which is not covered by the Company’s liability insurance. ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS None. 19 Location Year Developed or Acquired Ownership Interest/ (Expiration)(2) Land Area (Acres) Leasable Area (Sq. Ft.) Percent Leased (1) Tenant Name Lease Expiration Option Expiration Tenant Name Lease Expiration Option Expiration Tenant Name Lease Expiration Option Expiration Major Leases 2 0 ALABAMA HOOVER (11) MOBILE (8) ALASKA ANCHORAGE (11) KENAI ARIZONA GLENDALE GLENDALE (4) GLENDALE (6) MARANA MESA MESA MESA (6) NORTH PHOENIX PHOENIX PHOENIX PHOENIX PHOENIX PHOENIX (3) TUCSON CALIFORNIA ALHAMBRA ANAHEIM ANAHEIM (3) ANAHEIM (3) ANAHEIM (3) ANGEL’S CAMP (3) ANTELOPE (3) BELLFLOWER (3) CALSBAD (3) CARMICHAEL CHICO CHICO CHICO (5) CHINO (3) CHINO (3) CHINO HILLS CHINO HILLS (3) CHULA VISTA COLMA (5) CORONA CORONA COVINA (4) CUPERTINO DALY CITY DOWNEY (3) DUBLIN (3) EL CAJON EL CAJON (6) ELK GROVE ELK GROVE 2007 1986 2006 2003 2007 1998 2004 2003 2005 1998 2004 1998 1998 1997 1998 1998 2006 2003 1998 1995 2006 2006 2006 2006 2006 2006 2006 1998 2008 2006 2007 2006 2006 2008 2006 1998 2006 2007 1998 2000 2006 2002 2006 2006 2003 2004 2006 2006 JOINT VENTURE JOINT VENTURE JOINT VENTURE JOINT VENTURE FEE JOINT VENTURE FEE FEE GROUND LEASE (2078)/JOINT VENTURE FEE FEE FEE JOINT VENTURE FEE FEE FEE FEE JOINT VENTURE FEE FEE FEE FEE FEE FEE FEE GROUND LEASE (2032)/JOINT VENTURE FEE FEE JOINT VENTURE FEE JOINT VENTURE FEE FEE JOINT VENTURE FEE FEE JOINT VENTURE FEE FEE GROUND LEASE (2054)/JOINT VENTURE FEE FEE GROUND LEASE (2009) FEE JOINT VENTURE FEE FEE FEE 163.90 48.81 24.63 14.67 16.52 40.50 6.42 18.18 177.80 19.83 29.44 17.00 1.64 17.50 26.60 13.40 9.43 17.80 18.40 1.04 8.52 19.10 36.14 5.06 13.09 9.11 21.10 18.50 26.43 1.34 7.30 13.12 32.99 7.17 11.84 18.95 6.41 12.28 48.09 26.00 11.45 25.64 9.78 12.35 10.94 10.35 0.82 2.31 457,000 299,730 256,000 146,759 86,504 333,388 70,428 191,008 1,051,731 145,452 307,375 230,164 16,410 131,621 334,265 153,180 94,379 190,174 195,455 15,396 105,085 185,247 347,236 77,967 119,998 113,511 160,928 213,721 264,336 19,560 69,812 168,264 341,577 73,352 128,082 356,335 213,532 148,815 491,998 269,433 68.9 94.9 38.3 100.0 98.6 84.5 97.6 100.0 96.8 71.0 82.6 100.0 100.0 91.9 95.0 98.1 56.3 100.0 99.1 100.0 100.0 98.0 93.9 98.1 88.5 100.0 88.3 94.6 97.2 91.7 100.0 100.0 92.3 91.3 61.0 100.0 98.9 92.9 87.8 99.3 BOOKS-A-MILLION ACADEMY SPORTS & OUTDOORS MICHAELS HOME DEPOT MOR FURNITURE FOR LESS COSTCO SAFEWAY LOWE’S HOME CENTER WAL-MART ROSS DRESS FOR LESS SPORTS AUTHORITY BURLINGTON COAT FACTORY CHAPMAN BMW SAFEWAY COSTCO HOME DEPOT DOLLAR TREE LOWE’S HOME CENTER COSTCO NORTHGATE GONZALEZ MARKETS STATER BROTHERS RALPHS MERVYN’S SAVE MART FOOD MAXX STATER BROTHERS MARSHALLS HOME DEPOT FOOD MAXX RALEY’S DOLLAR TREE LA CURACAO STATER BROTHERS FRESH & EASY COSTCO MARSHALLS VONS COSTCO HOME DEPOT 114,533 600,346 92.0 87.9 99 RANCH MARKET HOME DEPOT 114,722 100.0 WAL-MART 154,728 128,343 98,396 7,880 30,130 100.0 100.0 94.2 100.0 96.0 ORCHARD SUPPLY HARDWARE KOHL’S RITE AID 2020 2021 2017 2018 2016 2011 2016 2019 2027 2010 2016 2013 2016 2014 2011 2020 2012 2019 2027 2022 2011 2016 2012 2022 2009 2017 2013 2013 2014 2024 2013 2021 2022 2028 2029 2012 2013 2012 2009 2012 2026 2009 2011 2024 2018 2035 2031 2037 2048 PETCO ROSS DRESS FOR LESS 2019 2015 2029 2035 SHOE CARNIVAL MARSHALLS 2019 2010 2029 2017 BED BATH & BEYOND 2019 2039 OLD NAVY 2012 2018 MICHAELS 2046 FLOOR & DECOR 2013 2015 2018 ANNA’S LINENS 2025 THE $99 FURNITURE STORE 2015 2016 2025 2026 BASS PRO SHOPS OUTDOOR WORLD CINE MANIA CIRCUIT CITY GUITAR CENTER TRADER JOE’S PHOENIX RANCH MARKET JO-ANN FABRICS 2027 2057 HOME DEPOT 2028 2058 2014 2016 2017 2014 2021 2010 2019 2036 2027 2029 2041 2025 BLACK ANGUS MICHAELS MICHAELS 2010 2010 2012 2015 2025 2022 FAMSA 2022 2032 COSTCO 2027 2057 JO-ANN FABRICS 2009 2019 2022 2025 2033 2031 2029 2024 2024 2019 DOLLAR STORE OFFICEMAX 2009 2011 2014 2026 KIDS ‘R’ US LONGS DRUGS BED, BATH & BEYOND 2027 2033 RITE AID DD’S DISCOUNT 2086 2034 2029 NAVCARE BED BATH & BEYOND ANNA’S LINENS BALLY TOTAL FITNESS PETSMART 2018 2013 2014 2010 2016 2009 2011 2012 2013 2010 2027 2033 2029 2020 2036 2026 2027 2018 2028 2012 2016 2023 2011 2014 2012 2014 2009 2009 2012 2013 2025 2017 2014 2010 2011 CVS RITE AID EL SUPER RITE AID GOODWILL INDUSTRIES STAPLES DOLLAR TREE SPORTS AUTHORITY ASHLEY FURNITURE HOMESTORE PETSMART ROSS DRESS FOR LESS WAL-MART NORDSTROM RACK PETSMART HOME DEPOT STAPLES BURLINGTON COAT FACTORY MARSHALLS 2012 2022 SAFEWAY 2014 2024 2010 2015 2014 2025 ROSS DRESS FOR LESS 2013 2023 2035 2024 PETCO 2009 2014 2053 2043 MICHAELS ROSS DRESS FOR LESS 2046 2069 2077 2015 2046 2023 2031 2039 2041 2050 2017 2069 2057 2032 2026 2046 2022 2048 2022 2032 2018 2022 2024 2039 2023 2041 2052 2043 2079 2038 2042 2034 2027 2056 Year Developed or Acquired Ownership Interest/ (Expiration)(2) Land Area (Acres) Leasable Area (Sq. Ft.) Tenant Name Lease Expiration Option Expiration Tenant Name Lease Expiration Option Expiration Tenant Name Lease Expiration Option Expiration Major Leases 2 1 Location ELK GROVE (3) ELK GROVE (3) ENCINITAS (3) ESCONDIDO (3) FAIR OAKS (3) FOLSOM FREMONT (3) FREMONT (3) FRESNO (3) FRESNO (6) FULLERTON (3) GARDENA (3) GRANITE BAY (3) GRASS VALLEY (3) HACIENDA HEIGHTS (3) HAYWARD (3) HUNTINGTON BEACH (3) JACKSON LA MIRADA LA VERNE (3) LAGUNA HILLS LINCOLN (5) LIVERMORE (3) LOS ANGELES (3) LOS ANGELES (3) MANTECA MANTECA (3) MERCED MODESTO (3) MONTEBELLO (4) MORAGA (3) MORGAN HILL NAPA NORTHRIDGE NOVATO (3) OCEANSIDE (3) OCEANSIDE (3) OCEANSIDE (3) ORANGEVALE (3) OXNARD (4) PACIFICA (3) PACIFICA (7) PLEASANTON PORTERVILLE (3) POWAY RANCHO CUCAMONGA (3) RANCHO CUCAMONGA (3) RANCHO MIRAGE (3) RED BLUFF REDDING REDWOOD CITY (6) Percent Leased (1) 90.2 94.4 89.7 96.8 97.6 100.0 99.1 96.1 90.4 100.0 96.4 98.6 84.9 97.1 34,015 89,216 119,738 231,157 98,625 108,255 131,239 504,666 102,581 121,107 270,647 65,987 140,184 217,525 BEL AIR MARKET ALBERTSONS LA FITNESS RALEY’S KOHL’S SAVE MART SAFEWAY SAVE MART BED BATH & BEYOND TOYS “R” US/CHUCK E.CHEESE TAWA MARKET RALEY’S RALEY’S 135,012 85.9 ALBERTSONS 80,911 148,756 67,665 266,572 92.3 97.9 100.0 96.1 99 CENTS ONLY STORES VONS RALEY’S TOYS “R” US 229,252 98.0 TARGET 160,000 119,559 104,363 169,744 100.0 97.6 89.5 99.1 MACY’S SAFEWAY ROSS DRESS FOR LESS KMART 165,195 94.7 RALPHS/FOOD 4 LESS 19,455 96,393 27,350 214,772 251,489 163,630 103,362 349,530 158,812 133,862 88,363 92,378 94.4 88.8 86.0 95.8 98.8 90.2 100.0 100.0 74.6 94.6 84.8 90.4 PAK ‘N SAVE GOTTSCHALKS SEARS TJ MAXX HOME DEPOT TARGET DSW SHOE WAREHOUSE SAFEWAY SMART & FINAL TRADER JOE’S 366,775 96.4 STEIN MART 160,811 171,580 104,281 168,871 175,000 81,010 121,977 56,019 95.4 100.0 95.0 95.9 100.0 93.2 93.4 91.0 SAVE MART TARGET SAVE MART SAFEWAY MACY’S VALLARTA SUPERMARKET STEIN MART CVS 308,846 86.8 FOOD 4 LESS 165,156 84.9 VONS 2006 2006 2006 2006 2006 2003 2006 2007 2006 2004 2006 2006 2006 2006 2006 2006 2006 2008 1998 2006 2007 2007 2006 2006 2006 2006 2006 2006 2006 2000 2006 2003 2006 2005 2003 2006 2006 2006 2007 1998 2006 2004 2007 2006 2005 2006 2006 2006 2006 2006 2004 FEE FEE FEE FEE FEE JOINT VENTURE FEE JOINT VENTURE FEE FEE GROUND LEASE (2042) FEE FEE FEE FEE FEE FEE JOINT VENTURE FEE GROUND LEASE (2059) JOINT VENTURE JOINT VENTURE FEE GROUND LEASE (2070) GROUND LEASE (2050) FEE FEE FEE FEE JOINT VENTURE FEE JOINT VENTURE GROUND LEASE (2073) FEE FEE FEE GROUND LEASE (2048) FEE JOINT VENTURE JOINT VENTURE FEE JOINT VENTURE JOINT VENTURE FEE FEE FEE GROUND LEASE (2042) FEE FEE FEE FEE 5.04 8.05 9.14 23.11 9.58 9.46 11.94 51.70 9.90 10.81 20.29 6.52 11.48 29.96 12.10 7.22 12.00 9.23 31.20 20.11 — 13.06 8.08 0.03 14.57 1.05 7.21 1.60 17.86 25.44 33.74 8.12 34.47 9.25 11.29 10.15 9.50 42.69 17.33 14.40 7.50 13.60 — 8.10 8.33 5.16 17.14 16.85 4.59 1.75 6.38 23,200 21,876 49,429 89.4 77.0 100.0 ORCHARD SUPPLY HARDWARE 2019 2029 2025 2011 2017 2011 2018 2013 2025 2014 2010 2017 2010 2018 2018 2016 2010 2016 2024 2012 2009 2014 2026 2014 2012 2012 2013 2013 2012 2011 2024 2020 2016 2025 2024 2016 2009 2024 2013 2009 2018 2012 2029 2013 2011 2014 2010 2050 2031 2032 2021 2048 2038 2050 2034 2025 2042 2020 2033 TOTAL WOMAN GYM AND ATMOSPHERE VONS LONGS DRUGS BED BATH & BEYOND RITE AID SPORTMART AMC THEATRES RITE AID JCPENNEY 2071 VIVO DANCE 2025 2036 2049 2032 BIG LOTS CVS U.S. POSTAL SERVICE 2034 VONS 2050 2066 2024 2018 LONGS DRUGS RICHARD CRAFTS SUPERIOR MARKETS 2037 FACTORY 2-U BIG 5 SPORTING GOODS RALEY’S TOYS “R” US LONGS DRUGS HOME DEPOT GELSON’S MARKET RITE AID LONGS DRUGS LAMPS PLUS ROSS DRESS FOR LESS LONGS DRUGS FOOD 4 LESS RITE AID ROSS DRESS FOR LESS COUNTY OF TULARE HOME GOODS 2027 2062 2026 2054 2040 2028 2060 2034 2026 2024 2064 2032 2038 2040 2049 2028 2026 2034 SPORTS CHALET 2039 LONGS DRUGS 2019 2009 2011 2010 2014 2013 2012 2015 2013 2012 2011 2015 2015 2010 2027 2013 2023 2011 2018 2009 2018 2010 2018 2017 2013 2013 2011 2014 2022 2013 2012 2010 2025 2014 2010 2010 2021 2025 2044 2023 2037 2035 2033 2021 2030 2020 2055 2057 2018 2038 2029 2034 CVS 2009 2034 BALLY TOTAL FITNESS MARSHALLS ROSS DRESS FOR LESS AMC THEATERS 2014 2015 2011 2012 2029 2030 2031 2037 COURTHOUSE ATHLETIC CLUB 2009 2014 MOVIES 7 DOLLAR THEATRE 2013 2018 BIG 5 SPORTING GOODS CVS 2016 RITE AID 2024 2043 2035 GOTTSCHALKS AMC THEATRES U.S. POSTAL SERVICE 2040 RALEY’S 2012 2011 2010 2012 2012 2011 2020 2022 2016 2025 2026 2032 2031 2045 BIG LOTS 2010 2020 BARNES & NOBLE U.S. POSTAL SERVICE 24 HOUR FITNESS RITE AID 2013 2012 2010 2021 2028 2020 2027 2023 2033 2052 2042 2020 2045 2034 OFFICE DEPOT 2013 2028 2020 PETSMART 2009 2029 2029 Year Developed or Acquired Ownership Interest/ (Expiration)(2) Land Area (Acres) Leasable Area (Sq. Ft.) Percent Leased (1) Lease Expiration Option Expiration Tenant Name Lease Expiration Option Expiration Tenant Name Lease Expiration Option Expiration Major Leases 2 2 Location RIVERSIDE ROSEVILLE (5) ROSEVILLE (6) SACRAMENTO (3) SACRAMENTO (3) SAN DIEGO SAN DIEGO SAN DIEGO (3) SAN DIEGO (4) SAN DIEGO (5) SAN DIEGO (5) SAN DIEGO (6) SAN DIEGO (6) SAN DIMAS (3) SAN JOSE (3) SAN LEANDRO (3) SAN LUIS OBISPO SAN RAMON (4) SANTA ANA SANTA CLARITA (3) SANTA ROSA SANTEE SIGNAL HILL (6) STOCKTON TEMECULA (3) TEMECULA (4) TEMECULA (6) TORRANCE (3) TORRANCE (4) TRUCKEE TRUCKEE (5) TURLOCK (3) TUSTIN TUSTIN TUSTIN (3) TUSTIN (3) UKIAH (3) UPLAND (3) VALENCIA (3) VALLEJO (3) VALLEJO (3) VISALIA VISALIA (3) VISTA (3) WALNUT CREEK (3) WESTMINSTER (3) WINDSOR (3) WINDSOR (3) YREKA (3) COLORADO AURORA AURORA AURORA COLORADO SPRINGS DENVER ENGLEWOOD 2008 2007 2004 2006 2006 2007 2007 2006 2000 2007 2007 2004 2004 2006 2006 2006 2005 1999 1998 2006 2005 2003 2004 1999 2006 1999 2004 2007 2000 2006 2007 2006 2007 2003 2006 2006 2006 2006 2006 2006 2006 2007 2006 2006 2006 2006 2006 2006 2006 1998 1998 1998 1998 1998 1998 JOINT VENTURE JOINT VENTURE FEE FEE FEE JOINT VENTURE FEE GROUND LEASE (2023) JOINT VENTURE JOINT VENTURE JOINT VENTURE FEE FEE FEE FEE FEE FEE JOINT VENTURE FEE FEE FEE JOINT VENTURE FEE FEE FEE JOINT VENTURE FEE JOINT VENTURE JOINT VENTURE FEE GROUND LEASE (2016)/JOINT VENTURE FEE JOINT VENTURE JOINT VENTURE FEE FEE FEE FEE FEE FEE FEE JOINT VENTURE FEE FEE FEE FEE GROUND LEASE (2054) FEE FEE FEE FEE FEE FEE FEE FEE 5.02 8.97 20.29 23.12 13.15 — 13.40 16.36 11.24 5.94 12.80 5.91 42.12 13.42 16.84 6.23 17.55 5.30 12.00 14.10 3.63 44.45 14.97 14.63 17.93 40.00 47.38 6.75 26.68 3.17 4.92 10.11 51.98 9.10 12.90 15.70 11.08 22.53 13.63 14.15 6.79 — 4.24 12.00 3.23 16.36 13.08 9.81 13.97 13.90 9.92 13.81 10.74 1.45 6.48 86,108 81,171 188,493 188,874 120,893 225,919 49,080 210,621 117,410 59,414 57,406 35,000 411,375 154,000 183,180 95,255 174,428 41,913 134,400 96,662 41,565 311,637 181,250 152,919 139,130 342,336 345,113 67,504 266,847 26,553 41,149 111,612 685,330 108,413 138,348 210,743 110,565 271,867 143,333 150,766 66,000 136,726 46,460 136,672 114,733 97.7 98.3 77.0 91.0 90.2 100.0 100.0 91.3 100.0 98.4 100.0 76.0 100.0 89.6 94.5 100.0 91.2 95.4 100.0 88.7 91.4 97.8 97.7 87.2 91.1 93.1 100.0 82.9 99.3 88.9 100.0 94.1 98.6 100.0 93.6 88.7 90.8 85.2 90.0 92.4 100.0 100.0 80.5 87.2 92.9 Tenant Name BURLINGTON COAT FACTORY SAFEWAY SPORTS AUTHORITY SEAFOOD CITY UNITED ARTISTS THEATRE NORDSTROM CIRCUIT CITY ALBERTSONS CLAIM JUMPER PRICE SELF STORAGE OFFICEMAX WAL-MART ROSS DRESS FOR LESS VON’S PETCO HOME DEPOT ALBERTSONS ACE HARDWARE 24 HOUR FITNESS HOME DEPOT SUPER UNITED FURNITURE ALBERTSONS KMART WAL-MART ACE HARDWARE HL TORRANCE RALEY’S TARGET KMART RALPHS VONS RALEY’S HOME DEPOT RALPHS RALEY’S SAFEWAY REGAL SEQUOIA MALL 12 CHUCK E CHEESE ALBERTSONS CENTURY THEATRES 208,660 98.8 PAVILIONS 126,187 86.4 SAFEWAY 107,769 126,614 152,490 44,174 154,055 107,310 18,405 80,330 98.7 97.8 82.6 75.8 83.3 76.2 100.0 93.5 RALEY’S RALEY’S ALBERTSONS ROSS DRESS FOR LESS RANCHO LIBORIO SAVE-A-LOT HOBBY LOBBY 2009 2030 2016 2018 2016 2017 2010 2012 2013 2035 2011 2011 2018 2017 2012 2015 2012 2009 2017 2014 2014 2015 2017 2028 2013 2011 2018 2033 2018 2013 2021 2016 2014 2023 2017 2015 2016 2013 2011 2023 2017 2014 2012 2014 2011 2017 2018 2012 2013 2028 2060 2031 2033 2028 2037 ROSS DRESS FOR LESS BIG 5 SPORTING GOODS 24 HOUR FITNESS 2020 TJ MAXX SPORTMART 2023 2026 2041 2042 2022 2035 2042 2019 2034 2019 2045 2032 2058 2023 2033 2048 2023 2041 2031 2029 2053 2032 2045 2041 2053 2047 2054 2027 2029 COSTCO ROSS DRESS FOR LESS WALGREENS MICHAELS MICHAELS BED BATH & BEYOND PETSMART COSTCO LONGS DRUGS FOOD 4 LESS KOHL’S COOKIN’ STUFF LINENS N THINGS DECHINA 1 BUFFET, INC. AMC THEATERS LONGS DRUGS RITE AID PAVILIONS LONGS DRUGS 24 HOUR FITNESS MARSHALLS CVS COST PLUS NEW WORLD AUDIO/ VIDEO LONGS DRUGS THE 24 HOUR CLUB JCPENNEY 2051 DOLLAR TREE TJ MAXX 2037 2043 2027 2023 2013 2012 2012 2010 2013 2014 2013 2030 2013 2013 2013 2014 2013 2016 2010 2024 2012 2010 2014 2027 2022 2009 2013 2013 2013 2010 2010 2014 2012 2018 2018 2011 2012 2012 2028 STAPLES 2013 2028 2022 2027 2015 CVS 2013 2023 2044 2023 CHARLOTTE RUSSE PETCO 2010 2012 2027 2028 CVS 2017 2047 2028 2024 2033 2041 2030 2044 TJ MAXX 2012 2027 TRISTONE THEATRES ROSS DRESS FOR LESS 2013 2014 2018 2034 2020 MARSHALLS 2014 2019 WHOLE FOODS MARKET 2027 MICHAELS KRAGEN AUTO PARTS STAPLES AARON RENTS BED BATH & BEYOND 2024 2032 2029 2043 2023 2025 2024 2048 DOLLAR TREE 2027 CROWN LIQUORS SPACE AGE FEDERAL CU 2013 2011 2013 2013 2011 2013 2015 2016 2016 2028 2023 2026 OLD COUNTRY BUFFET 2009 2019 2 3 Location FORT COLLINS GREELEY (9) GREENWOOD VILLAGE LAKEWOOD PUEBLO CONNECTICUT BRANFORD (4) DERBY ENFIELD (4) FARMINGTON HAMDEN NORTH HAVEN WATERBURY DELAWARE ELSMERE WILMINGTON (7) FLORIDA ALTAMONTE SPRINGS ALTAMONTE SPRINGS BOCA RATON BONITA SPRINGS (5) BOYNTON BEACH (4) BRADENTON BRADENTON BRANDON (4) CAPE CORAL (5) CAPE CORAL (5) CLEARWATER CORAL SPRINGS CORAL SPRINGS CORAL WAY CUTLER RIDGE DELRAY BEACH (5) EAST ORLANDO FERN PARK FORT LAUDERDALE (6) FORT MEYERS (5) HIALEAH HOLLYWOOD HOLLYWOOD (6) HOLLYWOOD (6) HOMESTEAD JACKSONVILLE JACKSONVILLE JACKSONVILLE (11) JACKSONVILLE (5) JENSEN BEACH JENSEN BEACH (8) KEY LARGO (4) KISSIMMEE LAKELAND LAKELAND Year Developed or Acquired Ownership Interest/ (Expiration)(2) Land Area (Acres) Leasable Area (Sq. Ft.) Lease Expiration Option Expiration FEE JOINT VENTURE JOINT VENTURE FEE JOINT VENTURE JOINT VENTURE JOINT VENTURE JOINT VENTURE FEE JOINT VENTURE FEE FEE GROUND LEASE (2076) GROUND LEASE (2052)/JOINT VENTURE FEE FEE FEE JOINT VENTURE JOINT VENTURE JOINT VENTURE FEE JOINT VENTURE 11.58 14.39 21.00 7.55 3.26 19.07 20.67 14.85 16.90 31.69 31.70 13.10 17.14 25.85 19.40 5.58 9.85 0.50 18.00 6.20 19.63 29.70 Percent Leased (1) 100.0 100.0 100.0 84.3 0.0 98.6 100.0 98.7 76.4 90.7 98.1 100.0 Tenant Name KOHL’S BED BATH & BEYOND HOME DEPOT SAFEWAY KOHL’S LOWE’S HOME CENTER KOHL’S SPORTS AUTHORITY WAL-MART HOME DEPOT RAYMOUR & FLANIGAN FURNITURE 115,862 138,818 196,726 82,581 30,809 190,738 141,258 148,517 184,572 345,196 331,919 141,443 106,530 100.0 VALUE CITY 165,805 100.0 SHOPRITE 233,817 94,193 73,549 79,676 84.3 71.4 90.2 88.0 BAER’S FURNITURE ORIENTAL MARKET WINN DIXIE PUBLIX 194,028 98.6 BEALLS 30,938 162,997 143,785 86.1 89.5 100.0 GRAND CHINA BUFFET PUBLIX BED BATH & BEYOND JOINT VENTURE — 125,110 96.9 PUBLIX JOINT VENTURE FEE FEE FEE JOINT VENTURE JOINT VENTURE JOINT VENTURE GROUND LEASE (2068) FEE FEE JOINT VENTURE JOINT VENTURE JOINT VENTURE FEE FEE GROUND LEASE (2093)/JOINT VENTURE JOINT VENTURE FEE JOINT VENTURE JOINT VENTURE FEE JOINT VENTURE JOINT VENTURE FEE FEE FEE 2.32 20.73 9.80 5.90 8.73 3.76 — 11.63 12.00 22.88 7.42 2.36 5.00 10.45 98.93 21.00 5.10 18.62 147.50 — 20.67 19.77 21.50 18.42 10.42 22.93 42,030 207,071 86,342 55,597 87,305 37,640 50,906 90.4 91.3 98.5 35.2 100.0 100.0 100.0 HOME DEPOT TJ MAXX WINN DIXIE POTAMKIN CHEVROLET PUBLIX 131,981 94.8 SPORTS AUTHORITY 131,646 229,034 74,286 23,625 50,000 141,097 871,723 209,214 51,002 205,696 121,000 72,840 173,319 205,672 207,332 90,840 86,022 36.8 98.5 79.4 100.0 100.0 87.4 99.3 98.9 100.0 99.5 62.0 96.2 79.9 86.4 97.9 80.5 100.0 ALDI REGAL CINEMAS PUBLIX POTAMKIN CHEVROLET HOME GOODS AZOPHARMA HOME DEPOT PUBLIX MICHAELS BURLINGTON COAT FACTORY HHGREGG PUBLIX SERVICE MERCHANDISE HOME DEPOT KMART OFFICEMAX SPORTS AUTHORITY 229,383 82.4 STEIN MART 2020 2016 2019 2012 2012 2029 2021 2018 2019 2014 2017 2013 2014 2024 2012 2013 2022 2011 2009 2012 2010 2022 2023 2012 2011 2015 2025 2010 2018 2017 2023 2015 2010 2014 2019 2014 2013 2013 2018 2053 2010 2025 2014 2012 2011 2011 2000 2005 2003 1998 2006 2000 2005 2000 1998 1967 1998 1993 1979 2004 1998 1995 1967 2006 1999 1968 1998 2001 2006 2006 2005 1997 1994 1992 1998 2006 1971 1968 2004 2006 1998 2002 2004 2004 1972 2002 1999 2005 2006 1994 2006 2000 1996 2006 2001 Major Leases Lease Expiration Option Expiration Tenant Name Lease Expiration Option Expiration 2017 2015 2016 2016 2018 2012 2011 2013 2027 2035 2038 2031 2063 2041 2043 CIRCUIT CITY 2016 2031 TJ MAXX BOB’S STORES XPECT DISCOUNT 2010 2016 2013 2015 2036 Tenant Name GUITAR CENTER MICHAELS SUPER FOODMART BEST BUY BORDERS BOOKS BON-TON BJ’S STOP & SHOP 2070 2036 2069 2032 2022 2069 2041 2063 2039 2029 2037 2038 2044 SPORTS AUTHORITY 2013 2023 RAYMOUR & FLANIGAN FURNITURE 2019 2044 DSW SHOE WAREHOUSE THOMASVILLE HOME 2012 2011 2032 2021 MICHAELS 2012 2022 2034 2022 2033 2052 2056 ALBERTSONS 2015 2040 2014 2032 2020 2052 2068 2017 2036 2050 2055 TJ MAXX ROSS DRESS FOR LESS ROSS DRESS FOR LESS JO-ANN FABRICS ANNA’S LINENS STAPLES 2020 OFFICE DEPOT 2038 2057 2053 2050 2025 2020 2069 2034 2033 2018 DEAL$ OFFICE DEPOT MICHAELS AZOPHARMA KMART MARSHALLS HOME GOODS OFFICEMAX 2033 HAVERTY’S 2070 2030 2064 2027 2026 2026 MARSHALLS JO-ANN FABRICS PUBLIX DEAL$ LAKELAND SQUARE 10 THEATRE ROSS DRESS FOR LESS 2014 2015 2013 2014 2012 2016 2010 2014 2011 2018 2014 2019 2011 2010 2012 2013 2010 2020 2014 2013 2009 2012 2019 2025 JO-ANN FABRICS THOMASVILLE HOME 2033 STAPLES STAPLES PARTY SUPERMARKET 2034 2027 2031 2014 2010 2013 2014 2011 2024 2020 2033 2034 2016 2025 C-TOWN 2013 2028 JUST FOR SPORTS 2017 2023 2029 2026 2030 2020 2069 2026 2020 2032 C’EST PAPIER, INC. BJ’S OFFICEMAX TJ MAXX 2023 FOREVER 21 2020 2035 2029 2028 DOLLAR TREE BEALLS OUTLET CHUCK E CHEESE MARSHALLS 2012 2019 2013 2012 2022 2013 2011 2016 2021 2017 2069 2028 2017 2037 2028 2026 2036 2 4 Location LARGO LARGO LAUDERDALE LAKES LAUDERHILL LEESBURG MARGATE MELBOURNE MELBOURNE MERRITT ISLAND (5) MIAMI MIAMI MIAMI MIAMI MIAMI MIAMI MIAMI MIAMI MIAMI (5) MIAMI (5) MIAMI (6) MIDDLEBURG (11) MIRAMAR (11) MOUNT DORA NORTH LAUDERDALE (3) NORTH MIAMI BEACH OCALA ORANGE PARK ORLANDO ORLANDO ORLANDO ORLANDO ORLANDO (4) ORLANDO (6) OVIEDO (5) PLANTATION POMPANO BEACH POMPANO BEACH POMPANO BEACH (9) PORT RICHEY (4) RIVIERA BEACH SANFORD SARASOTA SARASOTA SARASOTA (5) ST. AUGUSTINE ST. PETERSBURG TALLAHASSEE TAMPA TAMPA TAMPA (4) TAMPA (9) WEST PALM BEACH WEST PALM BEACH WEST PALM BEACH (6) Year Developed or Acquired Ownership Interest/ (Expiration)(2) Land Area (Acres) Leasable Area (Sq. Ft.) Percent Leased (1) Tenant Name Lease Expiration Option Expiration Tenant Name Lease Expiration Option Expiration Tenant Name Lease Expiration Option Expiration Major Leases 1992 1968 1968 1978 1969 1993 1968 1998 2006 1962 1998 1998 1998 1995 2007 1986 1968 2007 2006 2004 2005 2005 1997 2007 1985 1997 2003 1968 1968 1996 1994 2000 2004 2006 1974 2007 1968 2004 1998 1968 1989 1970 1989 2006 2005 1968 1998 2004 1997/2004 2001 2007 1967 1995 2004 FEE FEE JOINT VENTURE FEE GROUND LEASE (2017) FEE GROUND LEASE (2022) FEE JOINT VENTURE JOINT VENTURE JOINT VENTURE JOINT VENTURE JOINT VENTURE FEE FEE FEE FEE JOINT VENTURE JOINT VENTURE FEE JOINT VENTURE JOINT VENTURE FEE JOINT VENTURE FEE FEE JOINT VENTURE GROUND LEASE (2047)/JOINT VENTURE JOINT VENTURE FEE FEE JOINT VENTURE FEE JOINT VENTURE JOINT VENTURE JOINT VENTURE JOINT VENTURE JOINT VENTURE JOINT VENTURE JOINT VENTURE FEE FEE FEE JOINT VENTURE JOINT VENTURE GROUND LEASE (2084)/JOINT VENTURE FEE FEE FEE JOINT VENTURE JOINT VENTURE JOINT VENTURE FEE FEE 29.44 11.98 10.04 17.79 1.25 34.07 11.53 13.23 — 13.98 8.69 1.71 2.91 5.44 33.35 7.78 8.23 7.50 — 31.16 36.30 36.70 12.44 28.85 15.92 27.17 5.02 7.75 10.00 11.70 28.00 18.00 14.02 7.80 4.59 10.31 6.55 18.60 14.34 5.06 40.90 10.00 11.98 — 1.45 9.01 12.79 22.42 23.86 73.00 10.02 7.57 7.93 33.03 215,916 149,472 115,341 181,416 13,468 260,729 168,737 144,399 60,103 79,273 86,900 17,117 29,166 63,604 349,873 83,380 104,908 59,880 63,595 402,801 82,000 156,000 120,430 250,209 108,795 260,435 50,299 113,367 113,262 132,856 236,486 179,065 154,356 78,093 60,414 103,173 66,613 140,312 103,294 46,390 195,689 102,455 129,700 65,320 62,000 118,574 105,655 197,181 205,634 340,460 100,200 81,073 79,904 357,537 95.2 100.0 98.9 92.3 88.9 66.1 95.9 100.0 100.0 92.4 100.0 100.0 100.0 91.8 88.8 98.7 100.0 100.0 96.5 96.7 34.1 34.6 100.0 95.2 94.9 88.5 100.0 100.0 59.4 100.0 80.4 99.4 92.6 100.0 95.6 94.4 98.2 89.4 62.0 92.2 89.8 100.0 94.0 88.5 91.9 100.0 58.7 96.2 97.0 95.7 92.9 98.4 93.8 83.3 PUBLIX WAL-MART SAVE-A-LOT BABIES R US SAM ASH MUSIC SUBMITTORDER CO JO-ANN FABRICS PUBLIX BABIES R US POTAMKIN CHEVROLET LEHMAN TOYOTA LEHMAN TOYOTA PETCO PUBLIX PUBLIX HOME DEPOT PUBLIX PUBLIX KMART DOLLAR TREE 24 HOUR FITNESS KMART HOME DEPOT PUBLIX KMART BED BATH & BEYOND 24 HOUR FITNESS HSN ROSS DRESS FOR LESS OLD TIME POTTERY KMART MARSHALLS PUBLIX WHOLE FOODS MARKET KMART SAVE-A-LOT WINN DIXIE CIRCUIT CITY FURNITURE KINGDOM ARBY’S TJ MAXX SWEETBAY PUBLIX HOBBY LOBBY KASH N’ KARRY STEIN MART LOWE’S HOME CENTER AMERICAN SIGNATURE BEST BUY PUBLIX WINN DIXIE BABIES R US KMART 2014 2012 2012 2014 2011 2010 2016 2023 2011 2015 2015 2015 2016 2011 2009 2029 2027 2023 2012 2013 2023 2013 2019 2019 2011 2015 2023 2009 2013 2010 2014 2013 2020 2014 2012 2015 2018 2011 2009 2027 2012 2020 2063 2019 2017 2018 2026 2019 2016 2011 2010 2011 2018 2029 2027 2017 2022 2031 2053 2021 2050 2050 2050 2021 2031 2029 2059 2062 2053 2042 2028 2038 2063 2049 2039 2021 2025 2038 2028 2020 2064 2028 2050 2019 2017 2030 2043 2031 2014 2047 2017 2040 2032 2037 2033 2066 2044 2031 2026 2030 2021 2068 EL DORADO FURNITURE 2017 2032 SYMS 2011 2041 OFFICE DEPOT 2009 2019 99CENT STUFF 2013 2018 DOLLAR TREE GOODWILL INDUSTRIES 2028 MARSHALLS 2020 2010 2012 2010 2017 2015 MICHAELS 2010 2015 2016 PUBLIX 2011 2031 SERVICE MERCHANDISE 2012 2032 AMC THEATRES ALDI THINK THRIFT STAPLES OFFICE DEPOT WALGREENS BED BATH & BEYOND FIRESTONE TIRE PARTY CITY OFFICE DEPOT WALGREENS WALGREENS 2011 2018 2012 2017 2010 2045 2013 2009 2012 2010 2018 2009 CHANCELLOR ACADEMY WALGREENS BEST BUY MICHAELS TJ MAXX PARTY CITY BIG LOTS SPORTS AUTHORITY PUBLIX OFF BROADWAY SHOES 2011 2058 2019 2010 2018 2012 2014 2011 2012 2013 2036 2038 2017 2037 2025 2034 2030 2038 2017 2031 2037 2023 ALDI USA BABY GOLFSMITH GOLF CENTER WHOLE FOODS MARKET 2014 2019 CVS STAPLES GOODWILL INDUSTRIES ROSS DRESS FOR LESS OFFICEMAX ACE HARDWARE 2020 2011 2013 2012 2014 2013 2040 2026 2032 OFFICE DEPOT 2024 2023 DOLLAR TREE ANTHONY’S LADIES WEAR 2018 2013 2014 2009 2012 2012 2038 2018 2024 2019 2032 2017 TJ MAXX 2012 2014 YOU FIT 2018 2028 STAPLES JO-ANN FABRICS 2013 2016 2018 2031 ROSS DRESS FOR LESS BED BATH & BEYOND 2012 2015 2022 2030 WINN DIXIE 2019 2049 ROSS DRESS FOR LESS 2014 2029 Location WINTER HAVEN YULEE (11) GEORGIA ALPHARETTA ATLANTA ATLANTA (9) AUGUSTA AUGUSTA (4) DULUTH (5) SAVANNAH SAVANNAH SAVANNAH SNELLVILLE (4) VALDOSTA HAWAII KIHEI ILLINOIS AURORA AURORA (5) BATAVIA (4) BELLEVILLE BLOOMINGTON BLOOMINGTON BRADLEY CALUMET CITY CHAMPAIGN CHAMPAIGN (4) CHICAGO CHICAGO COUNTRYSIDE CRESTWOOD CRYSTAL LAKE DOWNERS GROVE DOWNERS GROVE DOWNERS GROVE ELGIN FAIRVIEW HEIGHTS FOREST PARK GENEVA KILDEER (5) MATTESON MOUNT PROSPECT MUNDELIEN NAPERVILLE NORRIDGE 2 5 Year Developed or Acquired Ownership Interest/ (Expiration)(2) Land Area (Acres) Leasable Area (Sq. Ft.) Percent Leased (1) Tenant Name Lease Expiration Option Expiration Tenant Name Lease Expiration Option Expiration Major Leases 1973 2003 2008 2008 2007 1995 2001 2006 2008 1995 1993 2001 2004 2006 1998 2005 2002 1998 2003 1972 1996 1997 1998 2001 1997 1997 1997 1997 1998 1998 1997 1999 1972 1998 1997 1996 2006 1997 1997 1998 1997 1997 JOINT VENTURE JOINT VENTURE JOINT VENTURE JOINT VENTURE JOINT VENTURE FEE JOINT VENTURE JOINT VENTURE JOINT VENTURE GROUND LEASE (2045) FEE JOINT VENTURE JOINT VENTURE FEE FEE JOINT VENTURE JOINT VENTURE GROUND LEASE (2057) JOINT VENTURE FEE FEE FEE FEE JOINT VENTURE GROUND LEASE (2040) FEE FEE GROUND LEASE (2051) FEE GROUND LEASE (2062) FEE FEE FEE GROUND LEASE (2054) GROUND LEASE (2021) FEE JOINT VENTURE FEE FEE FEE FEE GROUND LEASE (2047) FEE GROUND LEASE (2049) FEE FEE GROUND LEASE (2031) JOINT VENTURE 13.90 82.10 15.42 31.02 10.09 11.32 52.61 7.80 18.01 8.46 22.22 35.60 17.53 4.55 17.89 34.73 31.71 20.34 10.95 16.09 5.35 16.98 9.04 9.29 17.48 6.04 27.67 36.75 6.13 5.00 12.04 24.76 18.69 19.05 9.29 8.18 23.30 17.01 16.80 7.62 9.00 11.69 15.43 15.59 18.83 8.97 20.45 8.90 95,188 98.7 BIG LOTS 76,000 63.2 PETCO 130,515 354,214 175,835 95.7 88.4 82.7 KROGER DAYS INN MARSHALLS 112,537 87.1 TJ MAXX 531,815 78,025 197,957 80,378 187,076 311,033 175,396 99.0 92.3 81.4 84.9 97.2 93.9 100.0 SPORTS AUTHORITY WHOLE FOODS MARKET ROSS DRESS FOR LESS PUBLIX BED BATH & BEYOND KOHL’S LOWE’S HOME CENTER 17,897 83.3 91,182 361,991 272,410 100,160 73,951 188,250 80,535 159,647 111,985 111,720 102,011 86,894 117,005 79,903 80,390 100,000 141,906 145,153 186,432 100.0 78.0 87.2 100.0 100.0 100.0 100.0 97.9 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 92.7 99.3 CERMAK PRODUCE AURORA BEST BUY KOHL’S KMART JEWEL-OSCO SCHNUCK MARKETS CARSON PIRIE SCOTT MARSHALLS HOBBY LOBBY BEST BUY BURLINGTON COAT FACTORY KMART HOME DEPOT SEARS HOBBY LOBBY HOME DEPOT EXPO TJ MAXX DOMINICK’S ELGIN MALL 192,073 100.0 KMART 98,371 100.0 KMART 110,188 167,477 157,885 192,547 89,692 102,327 116,914 176,037 176,263 131,546 60,000 156,067 100.0 97.6 81.2 100.0 100.0 100.0 100.0 100.0 83.0 13.2 0.0 100.0 GANDER MOUNTAIN BED BATH & BEYOND SPORTMART KOHL’S BURLINGTON COAT FACTORY BURLINGTON COAT FACTORY KMART KMART HOME DEPOT VALUE CITY KMART 89,047 61.8 BEST BUY 2010 2018 2020 2014 2014 2010 2012 2027 2016 2028 2013 2022 2019 2022 2011 2019 2024 2014 2014 2014 2014 2017 2016 2020 2024 2023 2024 2014 2022 2014 2009 2013 2024 2021 2013 2012 2014 2024 2018 2013 2012 2024 2024 2012 2014 2016 Tenant Name BUDDY’S HOME FURNISHINGS Lease Expiration Option Expiration 2015 2025 2020 JO-ANN FABRICS 2011 2016 2028 2050 2034 2034 2015 2027 2057 2036 2063 2028 2062 2069 2042 2026 2049 2054 2039 2029 2034 2029 2027 2031 2035 2054 2053 2051 2024 2062 2024 2019 2023 2054 2028 2032 2029 2054 2033 2033 2047 2054 2044 2022 2021 2031 KROGER BEST BUY ROSS DRESS FOR LESS HHGREGG COST PLUS STAPLES TJ MAXX BELK VALUE CITY HOBBY LOBBY WESTFIELD PLAZA ASSOCIATES TOYS “R” US BEST BUY CARLE CLINIC DICK’S SPORTING GOODS RAINBOW SHOPS 2021 2014 2013 2017 2016 2015 2010 2015 2014 2009 2009 2015 2012 2013 2016 2011 2056 2029 2033 GOODYEAR TIRE OFF BROADWAY SHOE WAREHOUSE RUGGED WEARHOUSE 2027 BED BATH & BEYOND 2031 2030 2015 2035 2019 2019 2052 DOLLAR TREE MARSHALLS HHGREGG GOLFSMITH OFFICEMAX 2045 BARNES & NOBLE 2032 2028 2031 2021 BED BATH & BEYOND MICHAELS BEAUTY ONE MONKEY JOE’S 2019 2029 BEST BUY DOLLAR TREE ELGIN FARMERS PRODUCTS OFFICEMAX CIRCUIT CITY MARSHALLS HOBBY LOBBY 2015 2013 2020 2015 2017 2010 2016 2030 2023 2030 2025 BEST BUY WALGREENS AARON SALES & LEASE OWNERSHIP WALGREENS 2042 2025 2026 OLD NAVY BORDERS BOOKS POOL-A-RAMA 2010 2013 2013 2013 2013 2013 2019 2016 2014 2010 2014 2010 2010 2012 2022 2012 2010 2011 2024 2011 2030 2019 2018 2028 2028 2022 2034 2031 2034 2015 2024 2025 2015 2032 2022 2029 2016 2039 2018 CHUCK E CHEESE LOYOLA UNIV. MEDICAL CENTER 2016 2011 2026 2016 POMPEI BAKERY 2011 2021 MARSHALLS 2009 2024 OAK LAWN OAKBROOK TERRACE 1997 1997/2001 ORLAND PARK OTTAWA PEORIA ROCKFORD 1997 1970 1997 2008 Location ROLLING MEADOWS SCHAUMBURG SCHAUMBURG SKOKIE STREAMWOOD WOODRIDGE INDIANA EVANSVILLE GREENWOOD GRIFFITH INDIANAPOLIS LAFAYETTE LAFAYETTE MISHAWAKA SOUTH BEND SOUTH BEND CLIVE COUNCIL BLUFFS (11) DAVENPORT DES MOINES DUBUQUE IOWA 2 6 SOUTHEAST DES MOINES WATERLOO KANSAS EAST WICHITA (4) OVERLAND PARK WICHITA (4) KENTUCKY BELLEVUE FLORENCE (7) HINKLEVILLE LEXINGTON LOUISIANA BATON ROUGE BATON ROUGE HARVEY HOUMA LAFAYETTE MAINE BANGOR S. PORTLAND MARYLAND BALTIMORE (10) BALTIMORE (10) BALTIMORE (10) BALTIMORE (5) BALTIMORE (7) BALTIMORE (8) BALTIMORE (9) BEL AIR (9) CLARKSVILLE (10) CLINTON Year Developed or Acquired Ownership Interest/ (Expiration)(2) Land Area (Acres) Leasable Area (Sq. Ft.) Percent Leased (1) Tenant Name Lease Expiration Option Expiration Tenant Name Lease Expiration Option Expiration Tenant Name Lease Expiration Option Expiration Major Leases 2003 1998 2003 1997 1998 1998 1986 1970 1997 1963 1997 1971 1998 1997 1998 1996 2006 1997 1999 1997 1996 1996 1996 2006 1998 1976 2004 1994 1993 2005 1997 2008 1999 1997 2001 2008 2007 2007 2007 2005 2004 2005 2004 2004 2007 2003 FEE JOINT VENTURE JOINT VENTURE FEE FEE FEE FEE FEE FEE JOINT VENTURE FEE FEE FEE JOINT VENTURE FEE FEE JOINT VENTURE GROUND LEASE (2028) FEE GROUND LEASE (2019) FEE FEE JOINT VENTURE FEE JOINT VENTURE FEE JOINT VENTURE GROUND LEASE (2039) FEE CJV FEE JOINT VENTURE FEE FEE FEE JOINT VENTURE JOINT VENTURE JOINT VENTURE JOINT VENTURE JOINT VENTURE JOINT VENTURE JOINT VENTURE JOINT VENTURE FEE JOINT VENTURE GROUND LEASE (2069) 3.72 7.30 62.99 5.84 5.61 13.10 14.20 25.68 10.57 17.42 24.34 12.37 7.47 14.59 1.82 8.80 56.20 9.10 23.00 6.50 9.56 8.97 6.50 14.48 13.50 6.04 8.18 1.96 33.80 9.43 18.58 14.90 10.10 21.94 8.64 12.46 7.31 10.60 18.37 5.78 7.59 10.73 7.45 19.68 15.19 2.62 37,225 100.0 FAIR LANES ROLLING MEADOWS — 628,752 58,455 81,000 172,436 192,933 168,577 114,684 165,255 238,288 90,500 80,523 145,992 81,668 90,000 303,000 #DIV/0! 98.5 100.0 100.0 86.7 82.8 86.4 100.0 96.7 74.4 92.9 100.0 97.1 100.0 100.0 48.8 GALYAN’S TRADING COMPANY MARSHALLS VALUE CITY WOODGROVE THEATERS, INC BURLINGTON COAT FACTORY BABY SUPERSTORE KMART KROGER HOME DEPOT KROGER HHGREGG BED BATH & BEYOND MENARD KMART HOBBY LOBBY 91,035 100.0 KMART 149,059 82,979 111,847 104,074 96,011 120,164 133,771 53,695 99,578 85,229 83.4 100.0 100.0 100.0 100.0 100.0 100.0 100.0 67.7 0.0 BEST BUY SHOPKO HOME DEPOT HOBBY LOBBY DICK’S SPORTING GOODS HOME DEPOT BEST BUY KROGER DICK’S SPORTING GOODS 234,943 93.6 BEST BUY 67,755 349,907 181,660 98,586 244,768 90.6 98.4 77.5 100.0 85.3 WAL-MART BURLINGTON COAT FACTORY BEST BUY OLD NAVY STEIN MART 86,422 100.0 98,401 89.2 BURLINGTON COAT FACTORY DSW SHOE WAREHOUSE 77,287 112,722 152,834 58,879 79,497 90,830 90,903 125,927 105,907 5,589 100.0 100.0 100.0 100.0 100.0 87.9 98.1 100.0 98.3 100.0 SUPER FRESH SAFEWAY KMART CORT FURNITURE RENTAL GIANT FOOD GIANT FOOD GIANT FOOD SAFEWAY GIANT FOOD 2013 2013 2010 2015 2012 2012 2011 2024 2026 2026 2026 2018 2015 2010 2021 2023 2024 2013 2018 2020 2014 2018 2010 2010 2010 2018 2014 2024 2009 2017 2009 2010 2012 2012 2021 2016 2010 2012 2016 2011 2026 2030 2017 2021 2054 2066 2056 2056 2038 2040 2030 2051 2038 2054 2022 2019 2065 2024 2038 CARSON PIRIE SCOTT 2025 2030 2022 OLD NAVY KOHL’S 2027 OFFICEMAX TOYS “R” US AJ WRIGHT JO-ANN FABRICS 2021 2010 2010 2012 2011 2012 2014 2071 LOEWS THEATRES 2019 2039 2015 2030 SHOE CARNIVAL 2014 2019 2027 FAMOUS FOOTWEAR 2056 TJ MAXX 2027 2020 CVS 2010 2015 2021 2025 2031 DSW SHOE WAREHOUSE 2020 2035 PETSMART 2015 2030 BED BATH & BEYOND 2019 2039 PETSMART 2018 2043 OFFICEMAX 2013 2018 PETSMART 2017 2042 TJ MAXX 2033 GORDMANS 2014 2012 2024 SHOE CARNIVAL 2015 2025 2032 TJ MAXX 2010 2020 MICHAELS 2010 2025 2050 2025 2035 2033 2024 BED BATH & BEYOND 2013 2038 TOYS “R” US 2013 2038 2034 2024 2032 2014 2020 2032 STEIN MART LINENS N THINGS OFFICEMAX TJ MAXX 2011 2012 2013 2014 2016 K&G MEN’S COMPANY 2032 2028 2019 BARNES & NOBLE MICHAELS PETSMART 2017 2012 2014 2014 2032 2022 2019 2039 2027 DOLLAR TREE 2015 2025 GUITAR CENTER 2016 2026 2061 2046 2055 2022 2031 2036 2051 2060 2027 RITE AID SALVO AUTO PARTS 2011 2009 2026 2019 DOLLAR TREE 2013 2028 CVS 2021 2041 DOLLAR TREE 2018 2028 Location Year Developed or Acquired Ownership Interest/ (Expiration)(2) Land Area (Acres) Leasable Area (Sq. Ft.) Percent Leased (1) Tenant Name Lease Expiration Option Expiration Tenant Name Lease Expiration Option Expiration Tenant Name Lease Expiration Option Expiration Major Leases 2 7 CLINTON COLUMBIA COLUMBIA COLUMBIA COLUMBIA (10) COLUMBIA (5) COLUMBIA (5) COLUMBIA (5) COLUMBIA (9) EASTON (7) ELLICOTT CITY (3) ELLICOTT CITY (5) ELLICOTT CITY (7) FREDRICK COUNTY GAITHERSBURG GAITHERSBURG (3) GLEN BURNIE (9) HAGERSTOWN HUNT VALLEY LAUREL LAUREL LINTHICUM NORTH EAST (10) OWINGS MILLS (9) PASADENA PERRY HALL PERRY HALL (7) TIMONIUM TIMONIUM (10) TOWSON (7) TOWSON (9) WALDORF WALDORF MASSACHUSETTS GREAT BARRINGTON HYANNIS (7) MARLBOROUGH PITTSFIELD (7) QUINCY (9) SHREWSBURY STURBRIDGE (5) MICHIGAN CLARKSTON CLAWSON FARMINGTON KALAMAZOO LIVONIA MUSKEGON NOVI TAYLOR TROY (9) WALKER MINNESOTA ARBOR LAKES HASTINGS (3) MAPLE GROVE (4) MINNETONKA (4) 2003 2002 2002 2002 2007 2006 2006 2006 2005 2004 2007 2006 2004 2003 1999 2007 2004 1973 2008 1972 1964 2003 2007 2004 2003 2003 2004 2003 2007 2004 2004 2003 2003 1994 2004 2004 2004 2005 2000 2006 1996 1993 1993 2002 1968 1985 2003 1993 2005 1993 2006 2007 2001 1998 GROUND LEASE (2024) JOINT VENTURE FEE FEE JOINT VENTURE JOINT VENTURE JOINT VENTURE JOINT VENTURE JOINT VENTURE JOINT VENTURE JOINT VENTURE JOINT VENTURE JOINT VENTURE FEE FEE JOINT VENTURE JOINT VENTURE FEE FEE FEE FEE FEE JOINT VENTURE JOINT VENTURE GROUND LEASE (2030) FEE JOINT VENTURE FEE JOINT VENTURE JOINT VENTURE JOINT VENTURE FEE FEE FEE JOINT VENTURE JOINT VENTURE JOINT VENTURE JOINT VENTURE FEE JOINT VENTURE FEE FEE FEE JOINT VENTURE FEE FEE JOINT VENTURE FEE JOINT VENTURE FEE FEE JOINT VENTURE JOINT VENTURE JOINT VENTURE 2.62 5.00 2.50 7.30 12.17 12.34 16.36 7.32 — 11.06 42.47 15.50 31.80 8.38 8.70 6.60 21.88 10.48 9.05 10.00 8.06 — 17.52 11.03 2.72 15.67 8.15 17.20 5.97 9.08 43.12 — — 14.14 23.16 16.11 12.97 7.96 12.19 23.11 20.00 13.47 2.78 60.00 4.53 12.20 6.00 13.00 24.00 41.78 44.40 10.18 63.00 12.10 2,544 50,000 14,384 32,075 98,399 91,165 100,803 73,299 6,780 113,330 433,467 86,456 143,548 86,968 88,277 71,329 265,116 121,985 94,653 81,550 75,924 1,926 80,190 116,303 38,727 149,641 65,059 201,380 59,799 88,405 679,926 4,500 26,128 131,235 231,622 104,125 72,014 80,510 108,418 231,197 148,973 130,424 96,915 279,343 33,121 79,215 60,000 141,549 223,050 338,928 474,062 97,535 466,325 120,231 100.0 100.0 100.0 93.7 100.0 100.0 100.0 93.1 100.0 98.9 93.1 100.0 100.0 98.3 100.0 100.0 100.0 99.1 91.3 100.0 97.7 100.0 100.0 95.8 81.0 98.3 100.0 90.6 89.2 20.0 99.8 100.0 100.0 94.0 94.6 100.0 100.0 100.0 100.0 87.5 85.5 93.6 91.6 93.5 100.0 100.0 100.0 100.0 100.0 97.0 97.3 100.0 92.3 98.5 MICHAELS DAVID’S NATURAL MARKET HARRIS TEETER SAFEWAY GIANT FOOD OLD NAVY GIANT FOOD TARGET GIANT FOOD SAFEWAY GIANT FOOD GREAT BEGINNINGS FURNITURE RUGGED WEARHOUSE LOWE’S HOME CENTER ZEYNA FURNITURE GIANT FOOD ROOMSTORE VILLAGE THRIFT STORE FOOD LION GIANT FOOD BRUNSWICK (LEISERV) BOWLING SUPER FRESH GIANT FOOD AMERICAN RADIOLOGY CVS WAL-MART FAIR LANES WALDORF KMART SHAW’S SUPERMARKET BEST BUY STOP & SHOP HANNAFORD BOB’S STORES STOP & SHOP FARMER JACK STAPLES OFFICE DEPOT HOBBY LOBBY CVS MICHAELS KOHL’S WAL-MART RUBLOFF DEVELOPMENT LOWE’S HOME CENTER CUB FOODS BYERLY’S TOYS “R” US 2013 2014 2028 2018 2012 2013 2024 2016 2014 2012 2026 2011 2013 2019 2018 2013 2014 2010 2018 2020 2010 2022 2029 2012 2016 2020 2012 2011 2018 2019 2014 2009 2018 2019 2015 2011 2016 2013 2033 2016 2022 2021 2016 2025 2023 2020 2016 2033 2019 2058 2043 2022 2054 2046 2019 2042 2056 2021 2018 2059 2028 2033 2038 2045 2062 2079 2027 2046 2005 2017 2016 2028 2034 2044 2034 2033 2049 2045 2026 2031 2023 2083 2036 2042 2051 2051 2075 2053 2035 2031 HOME GOODS 2011 2021 FASHION BUG KOHL’S PETCO FURNITURE 4 LESS HANCOCK FABRICS GIANT FOOD SUPER SHOE 2012 2018 2011 2010 2011 2015 2011 2038 SAFEWAY 2016 2046 2021 2016 2025 2016 OLD COUNTRY BUFFET ALDI 2011 2016 2021 2031 DOLLAR TREE 2010 2015 OLD COUNTRY BUFFET 2014 2019 MERRITT ATHLETIC CLUB 2010 2015 RITE AID 2010 2035 ACE HARDWARE 2016 2031 STAPLES 2020 2045 TARGET 2014 2049 SUPER FRESH 2019 2049 PRICE CHOPPER TOYS “R” US DSW SHOE WAREHOUSE BROOKS PHARMACY BED BATH & BEYOND MARSHALLS OFFICE DEPOT ALDI ACE HARDWARE VALUE CITY HOME GOODS BABIES R US MARSHALLS KOHL’S 2016 2019 2014 2017 2012 2011 2016 2028 2017 2020 2011 2017 2012 2017 2036 2029 2034 2047 2032 2026 2031 2043 2027 2040 2026 2043 2027 2037 HOME GOODS BORDERS BOOKS STAPLES STAPLES CVS RITE AID FITNESS 19 MARSHALLS PARTY AMERICA LOEKS THEATRES DICK’S SPORTING GOODS 2017 2037 CIRCUIT CITY BEST BUY GOLFSMITH GOLF CENTER 2015 2013 2030 2018 JO-ANN FABRICS OFFICEMAX 2010 2019 2011 2016 2010 2026 2015 2010 2009 2012 2017 2010 2011 2020 2034 2021 2031 2020 2046 2025 2030 2042 2037 2030 2 8 Location MISSOURI BRIDGETON CRYSTAL CITY ELLISVILLE INDEPENDENCE JOPLIN JOPLIN (4) KANSAS CITY KIRKWOOD LEMAY MANCHESTER (4) SPRINGFIELD SPRINGFIELD SPRINGFIELD ST. CHARLES ST. CHARLES ST. LOUIS ST. LOUIS ST. LOUIS ST. LOUIS ST. LOUIS ST. LOUIS ST. PETERS MISSISSIPPI HATTIESBURG (11) HATTIESBURG (11) JACKSON NEBRASKA OMAHA (11) NEVADA CARSON CITY (3) ELKO (3) HENDERSON HENDERSON (3) LAS VEGAS (3) LAS VEGAS (3) LAS VEGAS (3) LAS VEGAS (3) LAS VEGAS (3) LAS VEGAS (3) LAS VEGAS (3) RENO RENO RENO (3) RENO (3) RENO (5) RENO (5) RENO (5) SPARKS SPARKS (5) WINNEMUCCA (3) Year Developed or Acquired Ownership Interest/ (Expiration)(2) Land Area (Acres) Leasable Area (Sq. Ft.) Percent Leased (1) Tenant Name Lease Expiration Option Expiration Tenant Name Lease Expiration Option Expiration Tenant Name Lease Expiration Option Expiration Major Leases 1997 1997 1970 1998 1998 1998 1997 1990 1974 1998 1998 2002 1994 1998 1998 1972 1997 1997 1997 1998 1998 1997 2007 2004 2002 2005 2006 2006 1999 2006 2007 2007 2006 2006 2006 2007 2006 2006 2006 2006 2006 2007 2007 2007 2007 2007 2006 GROUND LEASE (2040) GROUND LEASE (2032) FEE FEE FEE JOINT VENTURE FEE GROUND LEASE (2069) FEE JOINT VENTURE GROUND LEASE (2087) FEE FEE GROUND LEASE (2039) FEE FEE GROUND LEASE (2056) GROUND LEASE (2040) GROUND LEASE (2035) FEE FEE GROUND LEASE (2094) JOINT VENTURE JOINT VENTURE JOINT VENTURE JOINT VENTURE FEE FEE JOINT VENTURE FEE JOINT VENTURE JOINT VENTURE FEE FEE FEE JOINT VENTURE FEE FEE FEE FEE FEE JOINT VENTURE JOINT VENTURE JOINT VENTURE FEE JOINT VENTURE FEE 27.29 10.07 18.37 21.03 12.57 9.45 17.84 19.75 9.79 9.55 18.50 8.49 41.50 8.44 36.87 13.11 19.66 16.33 37.71 17.54 11.39 14.77 3.50 49.40 5.00 55.30 9.38 31.28 32.10 10.49 16.10 34.45 16.40 21.08 9.35 34.81 6.97 3.05 2.68 10.42 12.28 15.52 13.20 14.52 10.31 10.31 4.82 101,592 100.0 KOHL’S 100,724 100.0 KMART 118,080 100.0 SHOP N SAVE 184,870 155,416 80,524 150,381 100.0 76.6 100.0 100.0 KMART HASTINGS BOOKS SHOPKO HOME DEPOT 251,524 100.0 HOBBY LOBBY 79,747 89,305 203,384 84,916 282,619 84,460 8,000 129,093 151,540 100.0 100.0 100.0 100.0 92.1 100.0 100.0 93.4 100.0 SHOP N SAVE KOHL’S KMART BED BATH & BEYOND BEST BUY KOHL’S SHOP N SAVE HOME DEPOT 128,765 100.0 KMART 172,165 100.0 KMART 176,273 113,781 175,121 30,000 272,000 100.0 100.0 98.6 50.0 94.9 50,000 100.0 BURLINGTON COAT FACTORY KOHL’S HOBBY LOBBY ASHLEY FURNITURE HOMESTORE MICHAELS 334,000 42.2 MARSHALLS 114,258 170,756 166,499 130,773 160,842 333,234 169,160 228,279 111,245 86.2 96.5 87.1 80.3 53.2 85.0 85.9 81.5 91.1 RALEY’S RALEY’S COLLEEN’S CLASSIC CONSIGNMENT ALBERTSONS OFFICEMAX VONS FOOD 4 LESS UA THEATRES VONS 361,486 96.4 WAL-MART 77,650 36,627 31,317 139,554 113,376 120,004 104,319 146,501 119,601 113,743 65,424 98.7 87.9 83.5 98.4 93.6 95.0 97.2 100.0 97.1 92.4 100.0 ALBERTSONS PIER 1 IMPORTS SAK ‘N SAVE SCOLARI’S WAREHOUSE MARKET RALEY’S RALEY’S BED BATH & BEYOND SAFEWAY RALEY’S RALEY’S 2010 2024 2017 2024 2009 2018 2010 2014 2020 2018 2024 2013 2011 2019 2017 2026 2024 2024 2009 2018 2014 2016 2014 2016 2012 2017 2013 2009 2011 2011 2011 2017 2009 2012 2021 2019 2022 2021 2022 2030 2015 2028 2023 2015 2020 2032 2032 2054 2014 2038 2050 2024 2065 2038 2054 2028 2026 2039 2082 2056 2040 2ND WIND EXERCISE EQUIPMENT THE TILE SHOP OFFICEMAX THE LEATHER COLLECTION HEMISPHERES DOLLAR GENERAL OFFICE DEPOT MARSHALLS JCPENNEY 2011 2014 2010 2013 2014 2009 2020 2012 2015 2016 2024 2025 2019 OFFICE DEPOT PETSMART 2012 2009 2032 2034 2024 SPORTS AUTHORITY 2014 2029 2030 PACE-BATTLEFIELD, LLC 2027 2020 BORDERS BOOKS TJ MAXX 2017 2023 2011 2047 2038 2021 OFFICE DEPOT 2015 2025 2035 K&G MEN’S COMPANY 2024 BIG LOTS 2038 2024 CLUB FITNESS SPORTS AUTHORITY 2026 2034 ROSS DRESS FOR LESS MARSHALLS 2036 OFFICEMAX 2027 2032 2023 2039 2021 2041 2036 2037 2034 2037 2046 2029 BUILDERS MART BIG LOTS DOLLAR DISCOUNT CENTER CARPETS-N-MORE HOLLYWOOD VIDEO OFFICEMAX DOLLAR TREE COLLEENS CLASSICS CONSIGNMENT 2017 2015 2014 2014 2016 2014 2017 2011 2016 2015 2015 2011 2012 2011 2010 2027 2030 OFFICE DEPOT 2010 2019 2024 2029 OFFICE DEPOT 2019 2041 BED BATH & BEYOND 2016 2041 2024 2032 PETSMART 2017 2042 2016 2036 CINEMA 4 THEATRES SAVERS 2025 2025 2016 2032 2016 TJ MAXX BARNES & NOBLE FURNITURE MAXX FACTORY OUTLET 24 HOUR FITNESS 2012 2016 2010 2012 2013 2012 2036 2020 2027 2018 2022 2052 WENDY’S 2009 2023 SHELL OIL WILD OATS MARKETS LONGS DRUGS 2012 2023 2054 2037 2060 2030 2058 2038 2035 2022 2038 BORDERS BOOKS 2014 2034 Location Year Developed or Acquired Ownership Interest/ (Expiration)(2) Land Area (Acres) Leasable Area (Sq. Ft.) Tenant Name Lease Expiration Option Expiration Tenant Name Lease Expiration Option Expiration Tenant Name Lease Expiration Option Expiration Major Leases NEW HAMPSHIRE MILFORD NASHUA (7) NEW LONDON SALEM NEW JERSEY BAYONNE BRIDGEWATER (4) CHERRY HILL CHERRY HILL CHERRY HILL (10) CINNAMINSON DELRAN (4) DELRAN (4) EAST WINDSOR EDGEWATER (3) HILLSBOROUGH HOLMDEL HOLMDEL LINDEN LITTLE FERRY MOORESTOWN (6) NORTH BRUNSWICK 2 9 PISCATAWAY RIDGEWOOD UNION COUNTY WAYNE (6) WESTMONT NEW MEXICO ALBUQUERQUE ALBUQUERQUE ALBUQUERQUE LAS CRUCES NEW YORK AMHERST BAYSHORE BELLMORE BRIDGEHAMPTON BRONX BRONX BROOKLYN BROOKLYN BROOKLYN BROOKLYN BROOKLYN BROOKLYN (4) BUFFALO CENTEREACH CENTEREACH CENTRAL ISLIP (11) COMMACK COMMACK COPIAGUE (4) ELMONT ELMONT FARMINGDALE (5) FLUSHING 2008 2004 2005 1994 2004 2001 1985 1996 2007 1996 2005 2000 2008 2007 2005 2007 2007 2002 2008 2004 1994 1998 1994 2007 2004 1994 1998 1998 1998 2006 1988 2006 2004 1973 1990 2005 2005 2004 2004 2003 2003 2000 1988 1993 2006 2004 1998 2007 1998 2007 2004 2006 2007 JOINT VENTURE JOINT VENTURE FEE FEE FEE JOINT VENTURE JOINT VENTURE GROUND LEASE (2036) JOINT VENTURE FEE JOINT VENTURE JOINT VENTURE FEE JOINT VENTURE LP FEE FEE FEE LSH GROUND LEASE (2066)/JOINT VENTURE FEE FEE FEE JOINT VENTURE FEE FEE FEE FEE FEE JOINT VENTURE JOINT VENTURE FEE FEE FEE JOINT VENTURE FEE FEE FEE FEE FEE FEE JOINT VENTURE JOINT VENTURE JOINT VENTURE FEE GROUND LEASE (2101)/JOINT VENTURE GROUND LEASE (2085) FEE JOINT VENTURE JOINT VENTURE FEE JOINT VENTURE FEE 17.28 18.23 9.53 39.80 0.64 16.57 18.58 15.20 48.04 13.67 9.50 10.46 34.77 45.65 5.04 38.82 48.58 0.88 14.42 22.74 38.12 9.60 2.71 3.52 19.21 17.39 4.77 26.00 4.70 3.90 7.50 15.90 1.36 30.20 19.50 0.10 0.18 2.92 0.24 0.42 0.17 5.13 9.19 40.68 10.50 11.80 35.70 2.46 15.40 1.29 1.81 56.51 — Percent Leased (1) 94.9 95.6 97.7 100.0 100.0 100.0 93.9 100.0 100.0 84.1 45.4 100.0 98.1 100.0 100.0 84.0 92.9 100.0 27.7 100.0 148,802 182,348 106,470 344,069 23,901 378,567 120,340 129,809 209,185 121,852 37,679 77,583 249,029 423,315 55,552 234,557 299,922 13,340 144,262 201,351 SHAW’S SUPERMARKET DSW SHOE WAREHOUSE HANNAFORD BROS. KOHL’S DOLLAR TREE COSTCO STOP & SHOP KOHL’S KOHL’S VF OUTLET PETSMART TARGET TARGET KMART BEST BUY A&P STRAUSS DISCOUNT AUTO HAR SUPERMARKETS LOWE’S HOME CENTER 425,362 100.0 WAL-MART 97,348 24,280 95,225 331,528 168,719 59,722 183,736 37,442 30,686 101,066 176,622 24,802 287,587 232,683 3,720 5,200 41,076 29,671 10,000 7,500 80,708 141,010 377,584 105,851 58,000 97.2 100.0 100.0 100.0 87.9 95.0 91.1 96.7 0.0 100.0 98.6 100.0 99.5 92.9 100.0 100.0 100.0 100.0 100.0 100.0 100.0 94.6 99.6 100.0 100.0 SHOPRITE WHOLE FOODS MARKET BEST BUY COSTCO SUPER FRESH PAGE ONE MOVIES WEST PETSMART TOPS SUPERMARKET BEST BUY RITE AID KMART NATIONAL AMUSEMENTS DUANE READE DUANE READE RITE AID HOME DEPOT TOPS SUPERMARKET WAL-MART PATHMARK 265,409 78.5 KING KULLEN 24,617 163,999 12,900 27,078 415,469 22,416 100.0 100.0 100.0 100.0 98.6 100.0 DEAL$ HOME DEPOT CVS DUANE READE HOME DEPOT FRUIT VALLEY PRODUCE 2022 2011 2025 2013 2014 2019 2016 2016 2018 2009 2016 2027 2022 2012 2018 2013 2023 2009 2026 2018 2014 2015 2024 2009 2017 2009 2011 2017 2013 2016 2014 2019 2011 2014 2014 2019 2022 2012 2015 2020 2017 2018 2011 2033 2014 2030 2011 2052 2031 2050 2049 2036 2036 2068 2019 2026 2067 2042 2047 2033 2043 2033 2014 2066 2058 2024 2030 2039 2044 2081 2013 2021 2037 2033 2031 2039 2036 RITE AID BED BATH & BEYOND FIRST COLONIAL SHAW’S SUPERMARKET BED BATH & BEYOND RETROFITNESS PLANET FITNESS SPORTS AUTHORITY ACME MARKETS OFFICE DEPOT GENUARDI’S PATHMARK MICHAELS MARSHALLS 2014 2012 2028 2018 2010 2013 2017 2019 2047 2016 2026 2016 2013 2013 2029 2032 2038 2030 2020 2027 MICHAELS MACKENNA’S BOB’S STORES 2012 2012 2011 2027 2017 2021 MARSHALLS 2009 2024 2034 BABIES R US 2013 2033 2026 2056 2041 2033 2028 SLEEPY’S TJ MAXX TJ MAXX BARNES & NOBLE LA FITNESS 2012 2011 2012 2017 2021 2022 2026 2022 2032 2036 SPORTS AUTHORITY 2013 2033 BALLY TOTAL FITNESS 2012 2022 BURLINGTON COAT FACTORY WHOLE FOODS MARKET LACKLAND STORAGE SUPER FITNESS WALGREENS ROSS DRESS FOR LESS TOYS “R” US KING KULLEN WALDBAUMS 2012 2028 2012 2009 2027 2011 2013 2015 2011 MARSHALLS 2012 2027 2058 2032 SPORTS AUTHORITY JO-ANN FABRICS 2012 2012 2032 2021 VALLEY FURNITURE 2017 2043 OFFICE DEPOT 2035 2046 TJ MAXX OFFICE OF HEARING 2011 2012 2009 2026 2017 PC RICHARD & SON 2018 2028 2051 2037 2044 2050 WALGREENS PETSMART BIG LOTS ACE HARDWARE 2030 2017 2011 2017 2032 2021 2027 FASHION BUG MODELL’S 2010 2019 2025 2029 2047 SPORTS AUTHORITY 2017 2037 BABIES R US 2023 2043 2028 2056 2040 BALLY TOTAL FITNESS 2009 2018 2075 DAVE & BUSTER’S 2010 2025 PETSMART 2018 2028 3 0 Location FRANKLIN SQUARE FREEPORT (4) GLEN COVE (4) HAMPTON BAYS HARRIMAN (5) HEMPSTEAD (4) HICKSVILLE HOLTSVILLE HUNTINGTON JAMAICA JERICHO JERICHO JERICHO JERICHO LATHAM (4) LAURELTON LEVITTOWN LITTLE NECK MANHASSET MASPETH MERRICK (4) MIDDLETOWN (4) MINEOLA MUNSEY PARK (4) NESCONSET (6) NORTH MASSAPEQUA OCEANSIDE PLAINVIEW POUGHKEEPSIE QUEENS VILLAGE ROCHESTER STATEN ISLAND STATEN ISLAND STATEN ISLAND STATEN ISLAND STATEN ISLAND (4) SYOSSET WESTBURY (6) WHITE PLAINS YONKERS YONKERS NORTH CAROLINA CARY CARY CARY (4) CHARLOTTE CHARLOTTE CHARLOTTE DURHAM DURHAM (4) FRANKLIN KNIGHTDALE (11) MOORSEVILLE MORRISVILLE PINEVILLE (9) RALEIGH RALEIGH (11) RALEIGH (11) WINSTON-SALEM Year Developed or Acquired Ownership Interest/ (Expiration)(2) Land Area (Acres) Leasable Area (Sq. Ft.) Percent Leased (1) Tenant Name Lease Expiration Option Expiration Tenant Name Lease Expiration Option Expiration Tenant Name Lease Expiration Option Expiration Major Leases 2004 2000 2000 1989 2007 2000 2004 2007 2007 2005 2007 2007 2007 2007 1999 2005 2006 2003 1999 2004 2000 2000 2007 2000 2004 2004 2003 1969 1972 2005 1993/1988 1997 2005 2006 1989 2000 1967 2004 2004 2005 1995 1998 2000 2001 1968 1986 1993 1996 2002 1998 2005 2007 2008 2003 1993 2003 2006 1969 FEE JOINT VENTURE JOINT VENTURE FEE JOINT VENTURE JOINT VENTURE FEE FEE FEE FEE GROUND LEASE (2045) FEE FEE FEE JOINT VENTURE FEE JOINT VENTURE FEE FEE FEE JOINT VENTURE JOINT VENTURE FEE JOINT VENTURE FEE GROUND LEASE (2033) FEE GROUND LEASE (2070) FEE FEE FEE GROUND LEASE (2072) FEE FEE FEE JOINT VENTURE FEE FEE FEE FEE FEE FEE FEE JOINT VENTURE FEE GROUND LEASE (2048) FEE FEE JOINT VENTURE JOINT VENTURE JOINT VENTURE FEE JOINT VENTURE JOINT VENTURE FEE JOINT VENTURE JOINT VENTURE FEE 1.37 9.60 2.97 8.17 52.90 1.40 2.50 0.80 0.91 0.32 — 2.51 5.70 6.39 89.41 0.23 4.72 3.54 9.60 1.05 7.78 10.10 2.67 6.00 5.88 2.00 0.28 6.98 20.03 0.50 18.55 7.00 5.49 23.90 16.70 14.44 2.49 30.14 2.45 0.88 4.10 10.90 10.60 40.31 13.50 18.47 13.96 13.12 39.50 2.63 24.70 29.32 24.22 39.10 35.94 35.40 8.80 13.15 17,864 173,031 49,346 70,990 227,939 13,905 35,581 1,595 9,900 5,770 2,085 105,851 57,013 63,998 616,130 7,435 47,214 48,275 188,608 22,500 107,871 80,000 26,780 72,748 55,580 29,610 100.0 97.6 100.0 100.0 86.4 100.0 100.0 100.0 100.0 100.0 100.0 100.0 97.4 100.0 99.5 100.0 100.0 100.0 78.7 100.0 98.9 56.3 79.5 100.0 48.6 100.0 DUANE READE STOP & SHOP STAPLES MACY’S KOHL’S WALGREENS DUANE READE MILLERIDGE INN W.R. GRACE WHOLE FOODS MARKET SAM’S CLUB FILENE’S BASEMENT FILENE’S DUANE READE WALDBAUMS BEST BUY CVS BED BATH & BEYOND BOB’S FURNITURE DUANE READE — 88,422 #DIV/0! 98.7 FAIRWAY STORES 167,668 14,649 185,153 101,337 47,270 341,719 210,825 190,131 32,124 398,602 24,277 10,329 43,560 102,787 86,015 315,797 110,300 233,759 95.6 100.0 32.0 97.1 100.0 97.8 98.3 95.8 96.3 100.0 100.0 100.0 100.0 83.4 100.0 100.0 56.5 94.7 STOP & SHOP STRAUSS DISCOUNT AUTO TOPS SUPERMARKET KING KULLEN STAPLES KMART KMART TJ MAXX NEW YORK SPORTS CLUB COSTCO DUANE READE STRAUSS DISCOUNT AUTO SHOPRITE LOWES FOOD BED BATH & BEYOND BJ’S TJ MAXX ROSS DRESS FOR LESS 139,269 89.9 BI-LO 116,186 408,292 26,326 186,000 172,161 169,901 269,710 362,945 103,000 10,000 132,190 92.4 92.2 100.0 99.5 100.0 98.5 91.5 91.6 91.3 90.0 84.5 TJ MAXX WAL-MART BILL HOLT FORD ROSS DRESS FOR LESS BEST BUY CARMIKE CINEMAS KMART GOLFSMITH GOLF & TENNIS FOOD LION HARRIS TEETER 2014 2025 2014 2015 2023 2059 2014 2022 2014 2025 2013 2021 2011 2014 2013 2016 2011 2012 2019 2014 2017 2020 2015 2009 2011 2013 2012 2011 2010 2016 2009 2014 2015 2013 2017 2010 2020 2012 2015 2009 2019 2015 2016 2017 2018 2017 2017 2017 2023 2016 2042 2019 2040 2043 2041 2031 2026 2022 2029 2037 2049 2025 2024 2031 2018 2017 2025 2021 2029 2025 2003 TOYS “R” US ANNIE SEZ PETCO STAPLES DOLLAR TREE WAL-MART DSW SHOE WAREHOUSE KING KULLEN ANNIE SEZ 2020 2011 2018 2013 2018 2013 2021 2024 2011 MARSHALLS 2011 2016 MICHAELS 2012 2027 2040 2026 2028 2028 2028 2043 HOME DEPOT 2031 2071 2036 2052 MICHAELS 2014 2029 2021 WHOLE FOODS MARKET 2011 2021 BIG LOTS 2012 2017 KING KULLEN PATHMARK NATIONAL WHOLESALE LIQUIDATORS 2012 2011 2010 2037 2021 2030 TOYS “R” US MICHAELS 2015 2011 2031 2043 WAL-MART 2019 2069 MARSHALLS 2014 2024 2025 2028 2037 2014 2040 2017 2035 DICK’S SPORTING GOODS KOHL’S CVS K&G MEN’S COMPANY 2029 RUGGED WEARHOUSE 2029 2035 2041 2037 2038 2027 2067 2027 JO-ANN FABRICS BEST BUY BED BATH & BEYOND BED BATH & BEYOND FOOD LION STEIN MART BED BATH & BEYOND 2043 ACE HARDWARE 2041 DOLLAR TREE 2014 2022 2015 2013 2013 2010 2011 2017 2018 2019 2012 2016 2022 2011 PETSMART OFFICEMAX DECORATORS WAREHOUSE MARSHALLS MICHAELS STAPLES STEIN MART TJ MAXX ROSS DRESS FOR LESS 2029 2001 2035 2018 2018 2020 2026 2037 2038 2039 2036 2037 2016 2016 2009 2012 2011 2016 2022 2017 2013 2016 2036 2024 2022 2026 2036 2037 2037 2018 2036 Location Year Developed or Acquired Ownership Interest/ (Expiration)(2) Land Area (Acres) Leasable Area (Sq. Ft.) Percent Leased (1) Tenant Name Lease Expiration Option Expiration Tenant Name Lease Expiration Option Expiration Tenant Name Lease Expiration Option Expiration Major Leases PAT CATANS CRAFTS 2013 ESSENCE BEAUTY MART 2014 3 1 OHIO AKRON AKRON BARBERTON BEAVERCREEK BRUNSWICK CAMBRIDGE CANTON CENTERVILLE CINCINNATI CINCINNATI CINCINNATI CINCINNATI CINCINNATI CINCINNATI (4) COLUMBUS COLUMBUS COLUMBUS COLUMBUS COLUMBUS (4) COLUMBUS (4) DAYTON DAYTON DAYTON HUBER HEIGHTS (4) KENT MENTOR MENTOR MIAMISBURG MIDDLEBURG HEIGHTS NORTH OLMSTEAD SHARONVILLE SPRINGDALE (4) TROTWOOD UPPER ARLINGTON WESTERVILLE WICKLIFFE WILLOUGHBY HILLS OKLAHOMA OKLAHOMA CITY OKLAHOMA CITY OREGON ALBANY ALBANY (3) CANBY (3) CLACKAMAS (3) GRESHAM (3) GRESHAM (3) GRESHAM (3) GRESHAM (3) HILLSBORO (3) HILLSBORO (3) HOOD RIVER (3) MEDFORD (3) 1988 1975 1972 1986 1975 1997 1972 1988 1988 1999 2000 1988 1988 2000 1988 1988 1988 1988 1998 2002 1988 1984 1969 1999 1988/1995 1988 1987 1999 1988 1988 1977 2000 1988 1969 1993 1995 1988 1998 1997 2006 2006 2006 2007 2006 2006 2006 2006 2008 2006 2006 2006 FEE FEE FEE FEE FEE FEE FEE FEE GROUND LEASE (2054) FEE FEE FEE FEE JOINT VENTURE FEE FEE FEE FEE JOINT VENTURE JOINT VENTURE FEE FEE FEE JOINT VENTURE FEE FEE FEE FEE FEE FEE GROUND LEASE (2076)/JOINT VENTURE JOINT VENTURE FEE FEE FEE FEE FEE FEE FEE JOINT VENTURE FEE FEE JOINT VENTURE FEE FEE FEE FEE FEE FEE FEE FEE 24.50 6.91 9.97 18.19 20.00 13.08 19.60 15.20 8.80 16.70 8.83 29.20 11.60 36.65 12.40 17.90 13.70 12.40 12.13 36.48 11.21 32.06 22.82 40.00 17.60 25.00 20.59 0.60 8.20 11.70 14.99 21.96 16.86 13.28 11.20 10.00 28.30 19.80 9.75 3.81 13.27 9.11 23.66 7.98 0.70 19.82 25.56 20.00 20.00 8.32 30.14 138,363 75,866 101,801 97,307 171,223 78,065 172,419 125,058 121,242 89,742 88,317 308,277 223,731 410,010 135,650 129,008 142,743 191,089 112,862 269,201 116,374 213,853 163,131 318,468 106,500 235,577 103,910 6,000 104,342 99,862 121,105 253,510 141,616 160,702 83,848 128,180 295,653 233,797 103,027 22,700 109,891 115,701 236,672 92,711 100.0 100.0 95.1 94.2 96.6 88.7 87.1 100.0 100.0 92.1 100.0 100.0 99.3 92.4 100.0 100.0 100.0 100.0 87.9 98.3 7.3 86.9 80.4 93.6 97.2 95.9 97.6 57.5 100.0 100.0 92.6 74.8 100.0 77.8 100.0 95.6 100.0 97.2 100.0 100.0 83.0 94.0 100.0 79.3 GABRIEL BROTHERS GIANT EAGLE GIANT EAGLE KROGER KMART TRACTOR SUPPLY CO. BURLINGTON COAT FACTORY BED BATH & BEYOND BIGGS FOODS HOBBY LOBBY LOWE’S HOME CENTER WAL-MART KOHL’S KOHL’S KOHL’S KOHL’S BORDERS BOOKS LOWE’S HOME CENTER VICTORIA’S SECRET BEST BUY ELDER BEERMAN TOPS SUPERMARKET GIANT EAGLE GABRIEL BROTHERS TOPS SUPERMARKET GABRIEL BROTHERS WAL-MART TJ MAXX MARC’S GABRIEL BROTHERS VF OUTLET HOME DEPOT ACADEMY SPORTS & OUTDOORS GROCERY OUTLET RITE AID SAFEWAY SPORTS AUTHORITY DOLLAR TREE 107,583 100.0 FOOD 4 LESS 208,276 264,765 210,992 260,954 108,554 335,043 99.2 91.5 88.3 95.0 100.0 91.7 WILD OATS MARKETS G.I. JOE’S SAFEWAY SAFEWAY ROSAUERS SEARS 2010 2021 2027 2018 2010 2010 2018 2017 2016 2011 2022 2028 2011 2011 2011 2011 2018 2016 2009 2010 2014 2026 2019 2013 2026 2012 2015 2011 2015 2013 2012 2014 2014 2016 2013 2023 2014 2011 2009 2020 2037 2010 2014 2021 2014 DOLLAR GENERAL MARC’S 2043 TJ MAXX 2032 THE TILE SHOP URBAN ACTIVE FITNESS BIG LOTS HOBBY LOBBY CIRCUIT CITY GRANT/RIVERSIDE METHODIST HOSP STAPLES KROGER PIER 1 IMPORTS KROGER KROGER BIG LOTS KOHL’S BURLINGTON COAT FACTORY BIG LOTS 2025 2041 2052 2048 2050 2020 2031 2021 2052 2031 2031 2031 2031 2038 2046 2019 2028 2044 2096 2029 2028 2096 2032 2009 2017 2012 2014 2017 2014 2015 2019 2011 2010 2031 2012 2022 2012 2013 2015 2014 2014 2027 2017 HOMETOWN BUFFET 2024 HOME 2 HOME 2010 2013 2020 2018 2027 2019 2025 2039 2020 2071 2017 2042 2038 2018 2035 2034 AJ WRIGHT DICK’S SPORTING GOODS 2014 2016 2034 2031 TOYS “R” US 2015 2040 CARDINAL FITNESS JO-ANN FABRICS MARSHALLS JO-ANN FABRICS 2017 2012 2014 2014 2027 2024 2019 KROGER 2013 2028 UNITED ART AND EDUCATION 2016 2026 2045 HHGREGG 2021 2025 2028 2022 2044 2024 2030 2053 2083 2034 2021 2019 2033 2087 2045 2044 2039 2044 HONG KONG BUFFET BIG LOTS KOHL’S GORDMANS DOLLAR TREE RITE AID NORDSTROM RACK VOLUNTEERS OF AMERICA CASCADE ATHLETIC CLUB OFFICE DEPOT PETSMART RITE AID STAPLES WALGREENS TINSELTOWN 2012 2011 2010 2016 2013 2013 2014 2013 2012 2013 2012 2013 2010 2013 2032 2017 2017 GUITAR CENTER 2016 CVS 2036 DOLLAR GENERAL MARCS DRUGS 2033 BEST BUY 2023 2044 2018 2017 2018 2017 2028 2040 2052 2037 AARON’S SALES & LEASING CANBY ACE HARDWARE OLD NAVY BIG LOTS ROSS DRESS FOR LESS TRADER JOE’S RITE AID DOLLAR TREE 24 HOUR FITNESS 2019 2019 2009 2012 2013 2009 2015 2010 2012 2018 2017 2014 2011 2015 2029 2039 2017 2023 2019 2030 2017 2032 2044 2021 2026 3 2 Location MILWAUKIE (3) PORTLAND (3) PORTLAND (3) SPRINGFIELD (3) TROUTDALE (3) PENNSYLVANIA ARDMORE BLUE BELL CARLISLE (5) CHAMBERSBURG CHAMBERSBURG CHIPPEWA EAGLEVILLE EAST NORRITON EAST STROUDSBURG EASTWICK EXTON EXTON FEASTERVILLE GETTYSBURG GREENSBURG HAMBURG HARRISBURG HAVERTOWN HORSHAM (5) LANDSDALE MONROEVILLE (5) MONTGOMERY (4) MORRISVILLE NEW KENSINGTON PHILADELPHIA PHILADELPHIA PHILADELPHIA PHILADELPHIA PHILADELPHIA PHILADELPHIA PHILADELPHIA PITTSBURGH PITTSBURGH (3) PITTSBURGH (9) POTTSTOWN (8) RICHBORO SCOTT TOWNSHIP SHREWSBURY (9) SPRINGFIELD UPPER DARBY WEST MIFFLIN WHITEHALL WHITEHALL YORK YORK PUERTO RICO BAYAMON CAGUAS CAROLINA MANATI MAYAGUEZ Year Developed or Acquired Ownership Interest/ (Expiration)(2) Land Area (Acres) Leasable Area (Sq. Ft.) Percent Leased (1) Tenant Name Lease Expiration Option Expiration Tenant Name Lease Expiration Option Expiration Tenant Name Lease Expiration Option Expiration Major Leases 16.34 185,859 95.3 ALBERTSONS 2007 2006 2006 2006 2006 2007 1996 2005 2008 2006 2000 2008 1984 1973 1997 1996 1999 1996 1986 2002 2000 1972 1996 2005 1996 2005 2002 1996 1986 2006 1995 1983 1998 1996 2005 1996 2004 2007 2007 2004 1986 1999 2004 1983 1996 1986 2005 1996 1986 1986 2006 2006 2006 2006 2006 GROUND LEASE (2041)/JOINT VENTURE FEE FEE FEE FEE FEE FEE JOINT VENTURE JOINT VENTURE FEE FEE FEE FEE FEE FEE FEE FEE FEE FEE JOINT VENTURE FEE FEE FEE JOINT VENTURE GROUND LEASE (2037) FEE JOINT VENTURE FEE FEE JOINT VENTURE JOINT VENTURE JOINT VENTURE JOINT VENTURE GROUND LEASE (2035) FEE FEE GROUND LEASE (2095) JOINT VENTURE JOINT VENTURE JOINT VENTURE FEE GROUND LEASE (2052) JOINT VENTURE FEE JOINT VENTURE FEE JOINT VENTURE GROUND LEASE (2081) FEE FEE FEE CJV FEE FEE CJV 10.55 2.12 8.74 9.75 18.82 17.72 12.20 12.88 37.31 22.39 15.20 12.52 15.33 3.40 9.78 6.06 4.60 2.39 5.00 3.00 17.00 9.01 8.32 1.39 13.74 45.00 14.38 12.53 18.00 22.55 8.12 7.53 6.82 0.41 6.30 46.8 19.30 37.02 15.72 14.47 — 21.17 19.66 16.34 8.33 15.14 6.00 3.32 13.65 16.53 19.76 28.23 6.68 39.32 115,673 38,363 96,027 90,137 320,525 120,211 90,289 131,623 271,411 215,206 165,385 131,794 168,218 36,511 85,184 60,685 86,575 14,584 50,000 15,400 175,917 80,938 75,206 84,470 143,200 257,565 2,437 108,950 294,309 332,583 195,440 75,303 133,309 9,343 82,345 467,927 133,697 166,786 161,727 111,982 69,288 94,706 212,188 4,808 84,279 151,418 84,524 35,500 58,244 186,400 576,348 570,610 69,640 354,830 95.6 98.3 96.1 60.6 96.4 100.0 88.4 93.2 98.8 100.0 98.1 82.4 100.0 100.0 100.0 100.0 7.9 100.0 100.0 100.0 100.0 100.0 97.6 100.0 92.9 88.8 0.0 100.0 97.2 98.2 100.0 100.0 100.0 100.0 100.0 100.0 78.9 75.8 95.5 100.0 100.0 100.0 98.1 100.0 100.0 100.0 100.0 100.0 95.2 92.3 96.3 97.1 95.7 99.0 SAFEWAY QFC SAFEWAY LAMBS THRIFTWAY MACY’S KOHL’S GIANT FOOD GIANT FOOD KOHL’S KMART KMART SHOPRITE KMART MERCY HOSPITAL KOHL’S ACME MARKETS RITE AID TJ MAXX LEHIGH VALLEY HEALTH GANDER MOUNTAIN KOHL’S GIANT FOOD KOHL’S PETSMART GIANT FOOD GIANT EAGLE SEARS TARGET JCPENNEY NORTHEAST AUTO OUTLET KMART 2013 2017 2019 2013 2021 2012 2016 2016 2040 2028 2018 2009 2022 2012 2017 2016 2015 2026 2010 2016 2013 2016 2022 2012 2019 2020 2016 2019 2030 2012 2015 2010 2047 2044 2043 2031 2032 2036 2046 2040 2058 2068 2019 2037 2022 2022 2036 2045 2046 2020 2026 2028 2036 2052 2034 2050 2033 2039 2080 2037 2050 2035 RITE AID 2015 JO-ANN FABRICS 2013 2018 DOLLAR TREE 2012 2017 BANANA REPUBLIC HOME GOODS WINE & SPIRITS SHOPPE GIANT FOOD HOME DEPOT GENUARDI’S JO-ANN FABRICS WEIS MARKETS 2010 2013 2011 2027 2018 2011 2012 2009 2033 2016 2067 2068 2026 MICHAELS DOLLAR TREE 2017 2019 2037 2029 MICHAELS 2010 2020 AMERICAN SIGNATURE 2022 2032 SUPERPETZ 2012 2021 BED BATH & BEYOND BED BATH & BEYOND SUPER FRESH TOYS “R” US 2020 2016 2022 2012 2034 2030 MICHAELS PETSMART 2009 2021 2029 2041 2047 2052 PEP BOYS 2028 2038 KOHL’S 2016 2036 ECKERD TJ MAXX GIANT FOOD SUPER FRESH WAL-MART GIANT FOOD VALUE CITY BIG LOTS GIANT FOOD KOHL’S GIANT FOOD SAVE-A-LOT AMIGO SUPERMARKET SAM’S CLUB KMART GRANDE SUPERMARKET HOME DEPOT 2013 2010 2014 2018 2032 2023 2013 2012 2014 2016 2012 2014 2027 2019 2019 2009 2026 2018 2020 2049 2058 2052 2053 2043 2032 2036 2017 2029 2047 2070 2069 STAPLES TRACTOR SUPPLY CO. 2015 2012 2030 2027 PETSMART TJ MAXX 2015 2009 2040 2019 STAPLES 2013 2023 JO-ANN FABRICS 2012 BARNES & NOBLE 2011 ADVANCE AUTO PARTS OFFICEMAX COSTCO HOME DEPOT 2012 2015 2026 2026 2017 YALE ELECTRIC 2030 2046 2046 CHUCK E CHEESE JCPENNEY PUEBLO INTERNATIONAL 2010 2013 2020 2015 2011 2023 2050 2045 2046 SAM’S CLUB 2019 2069 CARIBBEAN CINEMA 2028 2038 Year Developed or Acquired Ownership Interest/ (Expiration)(2) Land Area (Acres) Leasable Area (Sq. Ft.) Percent Leased (1) Tenant Name Lease Expiration Option Expiration Tenant Name Lease Expiration Option Expiration Tenant Name Lease Expiration Option Expiration Major Leases Location PONCE TRUJILLO ALTO RHODE ISLAND CRANSTON PROVIDENCE SOUTH CAROLINA CHARLESTON CHARLESTON FLORENCE GREENVILLE GREENVILLE (6) 2006 2006 1998 2003 1978 1995 1997 1997 2004 NORTH CHARLESTON 2000/1997 TENNESSEE CHATTANOOGA CHATTANOOGA MADISON MADISON MADISON (4) MEMPHIS MEMPHIS MEMPHIS (3) MEMPHIS (4) NASHVILLE 3 3 NASHVILLE NASHVILLE (4) TEXAS ALLEN AMARILLO (4) AMARILLO (4) ARLINGTON AUSTIN AUSTIN AUSTIN (3) AUSTIN (3) AUSTIN (3) AUSTIN (4) BAYTOWN BROWNSVILLE (11) COLLEYVILLE COPPELL CORPUS CHRISTI DALLAS DALLAS (3) DALLAS (4) EAST PLANO FORT WORTH (11) FRISCO (11) GRAND PRAIRIE (11) 2002 1973 1978 2004/2005 1999 1991 2000 2007 2001 1998 1998 1999 2006 2003 1997 1997 2003 1998 2007 2007 2007 1998 1996 2005 2006 2006 1997 1969 2007 1998 1996 2003 2006 2006 FEE FEE FEE GROUND LEASE (2072)/JOINT VENTURE FEE FEE FEE FEE FEE FEE JOINT VENTURE GROUND LEASE (2074) GROUND LEASE (2039) FEE JOINT VENTURE FEE FEE JOINT VENTURE JOINT VENTURE FEE FEE JOINT VENTURE JOINT VENTURE JOINT VENTURE JOINT VENTURE FEE JOINT VENTURE FEE JOINT VENTURE JOINT VENTURE JOINT VENTURE JOINT VENTURE FEE JOINT VENTURE JOINT VENTURE JOINT VENTURE GROUND LEASE (2065) JOINT VENTURE JOINT VENTURE JOINT VENTURE FEE JOINT VENTURE JOINT VENTURE JOINT VENTURE 12.08 19.47 11.02 16.99 17.60 17.15 21.00 20.35 31.77 27.16 5.00 7.63 14.49 25.35 21.14 14.71 8.79 5.52 3.90 16.93 10.20 9.34 2.11 10.63 9.30 8.00 10.80 15.36 4.57 20.80 20.93 18.20 8.68 27.60 2.01 2.04 12.54 75.00 12.07 6.80 9.03 45.50 35.80 53.10 192,701 88.7 2000 CINEMA CORP. 199,513 100.0 KMART 129,907 71,735 93.7 86.5 BOB’S STORES STOP & SHOP 161,514 186,740 113,922 148,532 295,928 94.1 100.0 95.8 96.6 83.0 HARRIS TEETER TJ MAXX HAMRICKS STEVE & BARRY’S INGLES MARKETS 266,588 91.3 SPORTS AUTHORITY 50,000 50,588 100.0 75.3 HOME GOODS SAVE-A-LOT 175,593 99.5 OLD TIME POTTERY 240,318 189,401 167,243 87,962 55,297 40,000 172,135 109,012 99,909 21,162 142,647 343,875 96,127 108,028 157,852 45,791 138,422 213,853 191,760 98,623 243,000 20,188 20,425 125,454 29,769 171,988 83,867 100,598 316,000 286,000 302,000 90.7 70.9 62.3 100.0 79.3 100.0 86.9 95.6 57.8 100.0 94.2 99.6 100.0 100.0 98.9 100.0 98.7 98.7 45.1 100.0 52.3 100.0 100.0 100.0 100.0 86.4 100.0 100.0 77.8 62.6 64.2 JO-ANN FABRICS DICK’S SPORTING GOODS TOYS “R” US OLD TIME POTTERY BED BATH & BEYOND HHGREGG TREES N TRENDS BEST BUY CREME DE LA CREME ROSS DRESS FOR LESS HOME DEPOT HOBBY LOBBY FRY’S ELECTRONICS HEB GROCERY PRIMITIVES RANDALLS FOOD & DRUGS BED BATH & BEYOND BABIES R US HOBBY LOBBY TJ MAXX CREME DE LA CREME CREME DE LA CREME BEST BUY BIG TOWN BOWLANES CVS PHARMACY, INC. ROSS DRESS FOR LESS HOME DEPOT EXPO MARSHALLS HOBBY LOBBY/ MARDELS 24 HOUR FITNESS 2032 2009 2013 2022 2027 2014 2011 2010 2021 2013 2010 2014 2013 2014 2017 2017 2010 2012 2018 2013 2014 2026 2012 2019 2013 2018 2011 2012 2009 2011 2012 2019 2016 2026 2026 2016 2022 2024 2012 2024 2015 2028 2022 2052 2054 2028 2072 2057 2076 2027 2029 2036 2046 2046 2030 2054 2017 2054 2035 SUPERMERCADOS MAXIMO PUEBLO SUPERMARKET 2026 2014 2046 DAVID’S BRIDAL 2024 FARMACIAS EL AMAL 2021 2011 2015 MARSHALLS 2011 2021 DOLLAR TREE 2013 2028 STEIN MART OFFICE DEPOT STAPLES BABIES R US TJ MAXX 2033 CIRCUIT CITY 2020 MICHAELS 2023 WAL-MART 2024 2032 2042 2025 2027 2028 2018 2029 2046 2037 2069 2018 2048 2026 2017 2019 SAM ASH BEST BUY KIDS R US ASHLEY FURNITURE HOMESTORE OAK FACTORY OUTLET BED BATH & BEYOND KOHL’S BROKERS NATIONAL LIFE JO-ANN FABRICS 2021 BUY BUY BABY WORLD MARKET ROSS DRESS FOR LESS MICHAELS 2011 2011 2010 2012 2010 2019 2017 2014 2014 2014 2019 2012 2012 2012 2025 2013 2010 2018 2011 2012 2017 TUESDAY MORNING MARSHALLS DOLLAR TREE ROSS DRESS FOR LESS MARSHALLS 2021 2018 2032 2015 2011 2013 2012 2013 TJ MAXX OLD NAVY 2010 2009 2020 2019 2016 2016 2035 2022 2025 2029 2037 2039 2019 2029 2044 2022 BED BATH & BEYOND OLD COUNTRY BUFFET 2032 JO-ANN FABRICS 2055 CIRCUIT CITY 2013 2011 2012 2010 2028 2016 2032 2035 2029 2026 2032 ROSS DRESS FOR LESS MATTRESS FIRM 2013 2015 2023 2020 2032 PETSMART 2016 2041 ROSS DRESS FOR LESS 2011 2030 BED BATH & BEYOND 2018 2033 ULTA 3 OFFICEMAX ROSS DRESS FOR LESS HEMISPHERES 2047 ROSS DRESS FOR LESS 2014 2009 2017 2023 2019 2024 2024 BIG LOTS 2012 2032 2042 OFFICE DEPOT SPROUTS FARMERS MARKET MARSHALLS 2039 2021 2023 2017 2041 2037 Location Year Developed or Acquired Ownership Interest/ (Expiration)(2) Land Area (Acres) Leasable Area (Sq. Ft.) Percent Leased (1) Tenant Name Lease Expiration Option Expiration Tenant Name Lease Expiration Option Expiration Tenant Name Lease Expiration Option Expiration Major Leases HARRIS COUNTY (5) HOUSTON HOUSTON HOUSTON (5) HOUSTON (9) LEWISVILLE LEWISVILLE LEWISVILLE LUBBOCK MESQUITE MESQUITE N. BRAUNFELS NORTH CONROE (9) PASADENA (4) PASADENA (4) PLANO RICHARDSON (4) SOUTHLAKE TEMPLE (5) 3 4 WEBSTER UTAH OGDEN VERMONT MANCHESTER VIRGINIA BURKE (7) COLONIAL HEIGHTS DUMFRIES (9) FAIRFAX (3) FAIRFAX (4) FREDERICKSBURG (9) FREDERICKSBURG (9) FREDERICKSBURG (9) FREDERICKSBURG (9) FREDERICKSBURG (9) FREDERICKSBURG (9) FREDERICKSBURG (9) FREDERICKSBURG (9) FREDERICKSBURG (9) FREDERICKSBURG (9) FREDERICKSBURG (9) FREDERICKSBURG (9) FREDERICKSBURG (9) FREDERICKSBURG (9) FREDERICKSBURG (9) FREDERICKSBURG (9) FREDERICKSBURG (9) FREDERICKSBURG (9) FREDERICKSBURG (9) FREDERICKSBURG (9) FREDERICKSBURG (9) FREDERICKSBURG (9) FREDERICKSBURG (9) FREDERICKSBURG (9) FREDERICKSBURG (9) FREDERICKSBURG (9) FREDERICKSBURG (9) 2005 1996 2004 2006 2006 1998 1998 1998 1998 2006 1974 2003 2006 2001 1999 2005 1998 2008 2005 2006 1967 2004 2004 1999 2005 2007 1998 2005 2005 2005 2005 2005 2005 2005 2005 2005 2005 2005 2005 2005 2005 2005 2005 2005 2005 2005 2005 2005 2005 2005 2005 2005 2005 2005 JOINT VENTURE FEE FEE FEE JOINT VENTURE FEE FEE FEE FEE FEE FEE JOINT VENTURE JOINT VENTURE JOINT VENTURE JOINT VENTURE FEE JOINT VENTURE JOINT VENTURE JOINT VENTURE FEE FEE FEE GROUND LEASE (2076)/JOINT VENTURE FEE JOINT VENTURE JOINT VENTURE JOINT VENTURE JOINT VENTURE JOINT VENTURE JOINT VENTURE JOINT VENTURE JOINT VENTURE JOINT VENTURE JOINT VENTURE JOINT VENTURE JOINT VENTURE JOINT VENTURE JOINT VENTURE JOINT VENTURE JOINT VENTURE JOINT VENTURE JOINT VENTURE JOINT VENTURE JOINT VENTURE JOINT VENTURE FEE JOINT VENTURE JOINT VENTURE JOINT VENTURE JOINT VENTURE JOINT VENTURE JOINT VENTURE JOINT VENTURE JOINT VENTURE 2015 2019 2017 2011 2015 2019 2012 2012 2015 2014 2012 2014 2022 2012 2015 2027 2011 2021 2017 2033 2011 2020 2018 2021 2011 2023 2019 2022 2035 BARNES & NOBLE 2014 2029 PETSMART 2019 2034 2034 2022 2026 2035 2024 BED BATH & BEYOND ROSS DRESS FOR LESS DSW SHOE WAREHOUSE 2027 BED BATH & BEYOND $6 FASHION OUTLETS OFFICEMAX ASHLEY FURNITURE HOMESTORE TJ MAXX ROSS DRESS FOR LESS OFFICEMAX BALLY TOTAL FITNESS ROSS DRESS FOR LESS OSHMAN SPORTING 2020 2040 2024 2037 2064 2042 2027 2030 2057 2026 2036 2027 2073 2012 2016 2018 2018 2013 2009 2012 2016 2012 2014 2009 2012 2011 2032 2036 OFFICEMAX BED BATH & BEYOND 2028 PETLAND 2033 2018 2029 2017 2036 2032 BROYHILL HOME COLLECTIONS BARNES & NOBLE PETSMART ROSS DRESS FOR LESS MARSHALLS 2029 MICHAELS 2019 FOX & HOUND 2037 MARSHALLS 2021 BEL FURNITURE 2014 2016 2009 2015 2010 2009 2017 2012 2009 2012 2011 2010 2034 2041 2019 2025 2025 2026 2037 2027 2024 2022 2026 2015 2050 CVS 2021 2041 2028 BOOKS-A-MILLION 2041 2046 TJ MAXX HOME DEPOT 2011 2014 2013 2024 2033 SPORTS AUTHORITY 2013 2039 2042 11.36 8.18 8.04 31.96 23.76 9.36 7.60 11.20 9.58 14.97 9.03 8.64 27.57 24.58 15.13 — 11.70 4.13 27.47 40.00 11.36 9.48 144,055 78.1 BEST BUY 96,500 100.0 113,831 350,398 237,634 93,668 123,560 74,837 108,326 209,766 79,550 86,479 283,463 50.7 95.1 97.0 95.3 96.9 73.4 98.0 100.0 100.0 100.0 96.5 BURLINGTON COAT FACTORY PALAIS ROYAL MARSHALLS TJ MAXX FACTORY DIRECT FURNITURE BABIES R US TALBOTS OUTLET PETSMART BEST BUY KROGER KOHL’S FINGERS FURNITURE 240,907 99.3 BEST BUY 169,190 149,343 115,579 37,447 274,799 100.0 100.0 79.5 88.2 83.9 PETSMART HOME DEPOT OFFICEMAX HOBBY LOBBY 408,899 97.9 HOBBY LOBBY 142,628 100.0 COSTCO 54,352 96.7 PRICE CHOPPERS 12.46 124,148 100.0 SAFEWAY 6.09 — 10.13 37.00 — — — — — — — — — — — — — — — — — — — — — — — — — — — 60,909 1,702 101,332 343,180 10,125 7,993 1,762 7,200 2,170 10,125 10,125 7,000 4,352 3,028 3,822 33,179 3,000 4,828 7,256 5,020 5,892 3,076 7,241 5,540 6,100 8,027 7,200 11,097 6,000 2,909 4,800 100.0 100.0 97.5 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 ASHLEY HOME STORES WALGREENS COSTCO SHONEY’S CVS CVS CIRCUIT CITY 2018 2038 NTB TIRES 2017 2037 Year Developed or Acquired Ownership Interest/ (Expiration)(2) Land Area (Acres) Leasable Area (Sq. Ft.) Percent Leased (1) Tenant Name Lease Expiration Option Expiration Tenant Name Lease Expiration Option Expiration Tenant Name Lease Expiration Option Expiration Major Leases CRACKER BARREL CHUCK E CHEESE 2014 2014 2034 2024 3 5 Location FREDERICKSBURG (9) FREDERICKSBURG (9) FREDERICKSBURG (9) FREDERICKSBURG (9) FREDERICKSBURG (9) FREDERICKSBURG (9) FREDERICKSBURG (9) FREDERICKSBURG (9) FREDERICKSBURG (9) FREDERICKSBURG (9) FREDERICKSBURG (9) HARRISONBURG (10) LEESBURG (3) MANASSAS MANASSAS (5) PENTAGON CITY (6) RICHMOND RICHMOND RICHMOND (9) ROANOKE ROANOKE (10) STAFFORD (5) STAFFORD (9) STAFFORD (9) STAFFORD (9) STAFFORD (9) STERLING STERLING (5) WOODBRIDGE WOODBRIDGE (4) WASHINGTON AUBURN BELLEVUE BELLINGHAM (3) BELLINGHAM (4) FEDERAL WAY (4) KENT (3) KENT (3) LAKE STEVENS (3) MILL CREEK (3) OLYMPIA (3) OLYMPIA (3) SEATTLE (3) SILVERDALE (3) SILVERDALE (3) SPOKANE (5) TACOMA (3) TUKWILA (4) VANCOUVER (3) WEST VIRGINIA CHARLES TOWN HUNTINGTON SOUTH CHARLESTON CANADA ALBERTA BRENTWOOD GRANDE PRAIRIE III 2005 2005 2005 2005 2005 2005 2005 2005 2005 2005 2005 2007 2007 1997 2005 2004 1995 1999 2005 2004 2007 2005 2005 2005 2005 2005 2008 2006 1973 1998 2007 2004 2007 1998 2000 2006 2006 2006 2006 2006 2007 2006 2006 2006 2005 2006 2003 2006 1985 1991 1999 2002 2002 JOINT VENTURE JOINT VENTURE JOINT VENTURE JOINT VENTURE JOINT VENTURE JOINT VENTURE JOINT VENTURE JOINT VENTURE JOINT VENTURE JOINT VENTURE JOINT VENTURE JOINT VENTURE JOINT VENTURE FEE JOINT VENTURE FEE FEE FEE JOINT VENTURE FEE JOINT VENTURE JOINT VENTURE JOINT VENTURE JOINT VENTURE JOINT VENTURE JOINT VENTURE FEE JOINT VENTURE GROUND LEASE (2072)/JOINT VENTURE JOINT VENTURE FEE JOINT VENTURE JOINT VENTURE JOINT VENTURE JOINT VENTURE FEE FEE FEE FEE FEE JOINT VENTURE GROUND LEASE (2083) FEE GROUND LEASE (2059) JOINT VENTURE FEE JOINT VENTURE FEE FEE FEE FEE JOINT VENTURE JOINT VENTURE — — — — — — — — — — — 19.01 27.90 13.50 8.94 16.80 11.47 8.46 — 7.66 35.70 30.83 9.86 — — 1.22 38.05 103.27 19.63 54.00 13.73 41.59 30.53 20.00 17.00 7.19 23.10 18.60 12.43 6.71 15.00 3.22 5.10 14.74 8.31 14.50 45.90 6.33 22.00 19.49 14.75 31.2 6.3 6,818 5,126 8,000 10,002 10,578 3,000 4,261 3,650 2,454 32,000 4,842 187,534 316,586 117,525 107,233 330,467 128,612 84,683 3,060 81,789 298,162 331,730 101,042 7,310 4,400 4,211 361,043 737,503 144,793 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 94.6 99.4 95.6 100.0 89.7 100.0 100.0 100.0 100.0 90.9 98.8 100.0 100.0 100.0 100.0 93.7 95.1 100.0 BASSETT FURNITURE KOHL’S SHOPPERS FOOD SUPER FRESH BURLINGTON COAT FACTORY COSTCO BURLINGTON COAT FACTORY ROOMSTORE DICK’S SPORTING GOODS MICHAELS SHOPPERS FOOD GIANT FOOD TOYS “R” US WAL-MART CAMPOS FURNITURE 493,193 97.7 SHOPPERS FOOD 171,032 407,812 376,023 188,885 200,126 69,020 86,909 195,932 113,641 69,212 167,117 99.1 94.6 98.5 98.6 92.9 98.4 100.0 100.0 94.7 73.4 85.7 ALBERTSONS TARGET KMART MACY’S QFC RITE AID ROSS DRESS FOR LESS SAFEWAY SAFEWAY BARNES & NOBLE ALBERTSONS 146,819 87.1 SAFEWAY 67,287 170,406 129,785 134,839 459,071 69,790 208,888 2,400 148,059 87.7 99.3 100.0 99.2 97.4 94.1 99.2 100.0 99.3 ROSS DRESS FOR LESS SAFEWAY BED BATH & BEYOND TJ MAXX THE BON MARCHE SUPERMAX WAL-MART KROGER 311,609 63,413 95.8 100.0 CANADA SAFEWAY MICHAELS 2044 DICK’S SPORTING GOODS 2019 2039 BEST BUY 2019 2024 2015 2011 2009 2009 2010 2013 2019 2009 2023 2027 2012 2021 2009 2014 2018 2012 2009 2012 2015 2015 2011 2032 2015 2010 2013 2012 2016 2024 2011 2019 2009 2016 2017 2011 2012 2011 2039 2064 2060 2026 2030 2044 2035 2023 MARTIN’S STEIN MART JO-ANN FABRICS AUTOZONE MARSHALLS 2034 CIRCUIT CITY 2019 2053 2072 2037 2091 MARSHALLS TJ MAXX STAPLES MICHAELS LOWE’S HOME CENTER SALVATION ARMY 2027 2011 2011 2010 2010 2020 2013 2016 2017 2011 2021 2009 2038 2037 2049 2022 2045 2035 2026 2077 2045 2015 2043 2037 2026 OFFICE DEPOT NORDSTROM RACK COST CUTTERS BEST BUY JO-ANN FABRICS G.I. JOE’S PENNZOIL TEN MINUTE OIL CHANGE PETCO ROSS DRESS FOR LESS PRUDENTIAL NORTHWEST REALTY 2059 JO-ANN FABRICS 2026 2019 2026 ROSS DRESS FOR LESS GALAXY THEATRES BEST BUY ACE HARDWARE 2047 STAPLES 2041 TJ MAXX 2027 2031 SEARS WHOLE HOME WINNERS (TJ MAXX) 2009 2012 2009 2017 2010 2018 2018 2013 2010 2009 2012 2014 2009 2016 2012 2016 2011 2010 2011 2067 2031 2025 ROSS DRESS FOR LESS 2013 2023 2025 BEST BUY 2014 2024 2040 2033 2036 2032 2026 2061 2014 ROSS DRESS FOR LESS ROSS DRESS FOR LESS PETCO SUPPLIES & FISH CIRCUIT CITY SAM’S CLUB WEDGEWOOD ANTIQUES & AUCTION 2029 2032 2044 2032 2030 RITE AID SAFEWAY JO-ANN FABRICS BED BATH & BEYOND BARNES & NOBLE 2016 2015 2012 2017 2021 2009 2010 2013 2012 2010 2012 2011 2036 2035 2027 2037 2091 2025 2028 2027 2025 2027 2026 2038 BARTELL DRUGS 2013 2018 2023 2015 2018 BARTELL DRUGS 2012 2022 2032 RITE AID 2019 2031 RITE AID OFFICE DEPOT SPORTS AUTHORITY 2011 2009 2012 2014 2041 2039 2029 2021 2020 2026 LINEN N THINGS JYSK LINEN 2016 2012 2031 2022 Year Developed or Acquired Ownership Interest/ (Expiration)(2) Land Area (Acres) Leasable Area (Sq. Ft.) Percent Leased (1) Lease Expiration Option Expiration Tenant Name Lease Expiration Option Expiration Major Leases 2024 LINEN N THINGS 2015 2025 Tenant Name BUSINESS DEPOT (STAPLES) Lease Expiration Option Expiration 2013 2028 3 6 Location SHAWNESSY CENTRE SHOPPES @ SHAWNESSEY SOUTH EDMONTON COMMON BRITISH COLUMBIA ABBOTSFORD CLEARBROOK LANGLEY GATE LANGLEY POWER CENTER MISSION PRINCE GEORGE PRINCE GEORGE STRAWBERRY HILL SURREY TILLICUM NOVA SCOTIA DARTMOUTH HALIFAX ONTARIO 404 TOWN CENTRE BELLEVILLE BOULEVARD CENTRE III CHATHAM CLARKSON CROSSING DONALD PLAZA FERGUS GREEN LANE CENTRE HAWKESBURY HAWKESBURY KENDALWOOD LEASIDE LINCOLN FIELDS LONDON MARKETPLACE TORONTO OTTAWA RIOCAN GRAND PARK SCARBOROUGH SCARBOROUGH SHOPPERS WORLD ALBION SHOPPERS WORLD DANFORTH ST. LAURANT SUDBURY SUDBURY THICKSON RIDGE TORONTO WALKER PLACE WINDSOR PRINCE EDWARD ISLAND CHARLOTTETOWN QUEBEC CHATEAUGUAY GATINEAU 2002 2002 2002 2002 2001 2002 2003 2001 2001 2008 2002 2001 2002 2008 2008 2002 2008 2004 2008 2004 2002 2008 2003 2008 2008 2002 2002 2002 2008 2002 2008 2003 2005 2005 2002 2002 2002 2002 2004 2002 2007 2002 2007 2002 2002 2008 JOINT VENTURE JOINT VENTURE JOINT VENTURE JOINT VENTURE JOINT VENTURE JOINT VENTURE JOINT VENTURE JOINT VENTURE JOINT VENTURE JOINT VENTURE JOINT VENTURE JOINT VENTURE JOINT VENTURE JOINT VENTURE JOINT VENTURE JOINT VENTURE JOINT VENTURE JOINT VENTURE JOINT VENTURE JOINT VENTURE JOINT VENTURE JOINT VENTURE JOINT VENTURE JOINT VENTURE JOINT VENTURE JOINT VENTURE JOINT VENTURE JOINT VENTURE JOINT VENTURE JOINT VENTURE JOINT VENTURE JOINT VENTURE JOINT VENTURE JOINT VENTURE JOINT VENTURE JOINT VENTURE JOINT VENTURE JOINT VENTURE JOINT VENTURE JOINT VENTURE JOINT VENTURE JOINT VENTURE JOINT VENTURE JOINT VENTURE JOINT VENTURE JOINT VENTURE 30.6 16.3 42.9 22.0 18.8 15.2 22.8 27.1 37.3 7.0 33.8 17.1 47.3 18.6 13.8 24.4 7.2 8.3 7.1 21.3 9.1 10.6 16.0 5.5 1.7 15.9 13.3 29.0 9.0 17.1 12.7 11.9 2.3 1.8 38.0 32.8 12.6 23.4 17.0 36.3 0.5 7.0 6.6 39.4 21.1 28.4 306,010 162,988 428,745 219,688 188,253 151,802 228,314 271,462 372,725 69,821 337,931 170,725 472,587 186,315 138,094 100.0 100.0 100.0 99.0 86.5 100.0 100.0 98.8 93.0 96.5 100.0 96.5 100.0 93.1 100.0 Tenant Name FUTURE SHOP (BEST BUY) ZELLERS HOME OUTFITTERS ZELLERS SAFEWAY SEARS WINNERS (TJ MAXX) OVERWAITEE OVERWAITEE BRICK WAREHOUSE HOME DEPOT CANADA SAFEWAY ZELLERS SOBEY’S WAL-MART 244,379 98.0 ZELLERS 71,925 82,942 71,423 213,051 91,462 105,955 160,195 54,950 17,032 158,833 133,035 289,711 90,212 171,088 127,416 118,637 20,506 13,433 380,295 328,298 125,984 234,299 169,524 363,039 46,986 69,857 58,147 95.1 98.3 91.5 100.0 95.9 100.0 100.0 100.0 100.0 97.7 100.0 83.8 90.3 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 A&P FOOD BASICS FOOD BASICS CANADIAN TIRE WINNERS (TJ MAXX) ZELLERS LINEN N THINGS PRICE CHOPPER SHOPPERS DRUG MART PRICE CHOPPER CANADIAN TIRE WAL MART TALIZE WINNERS (TJ MAXX) LOEB CANADA INC SHOPPERS DRUG MART AGINCOURT NISSAN LIMITED MORNINGSIDE NISSAN LIMITED CANADIAN TIRE ZELLERS ZELLERS FAMOUS PLAYERS WINNERS (TJ MAXX) WINNERS (TJ MAXX) TRANSWORLD FINE CARS COMMISSO’S PERFORMANCE FORD SALES, INC. 393,656 98.8 ZELLERS 211,288 283,565 97.0 98.9 SUPER C WAL-MART 2009 2011 2016 2052 2012 2013 2012 2018 2018 2022 2016 2011 2013 2039 2016 2014 2014 2025 2017 2023 2014 2022 2014 2016 2020 2013 2011 2010 2015 2014 2022 2018 2020 2020 2014 2014 2017 2019 2015 2013 2027 2012 2027 2019 2013 2015 LONDON DRUGS 2020 2057 MICHAELS 2011 2026 PETSMART STAPLES PETSMART MICHAELS FAMOUS PLAYERS THE BAY CINEPLEX ODEON LONDON DRUGS SAFEWAY 2013 2012 2014 2011 2010 2013 2014 2011 2023 2033 2022 2039 2021 2030 2083 2024 2021 2053 WINNERS (TJ MAXX) WINNERS (TJ MAXX) FUTURE SHOP (BEST BUY) LONDON DRUGS LONDON DRUGS WINNERS (TJ MAXX) WINNERS (TJ MAXX) 2013 2012 2012 2019 2017 2010 2013 2030 2017 2022 2046 2027 2025 2023 2096 2031 2082 2037 2018 2027 2028 2028 2041 2061 2098 2041 2024 A & P 2012 2027 NATIONAL GYM CLOTHING 2019 2024 A & P 2023 2048 MICHAELS 2013 2033 PETSMART 2014 2039 2039 2055 2037 2043 2024 2027 2029 2036 2040 2038 2036 2025 2025 2029 2042 2038 2029 2029 2046 2039 2030 2023 2032 VALUE VILLAGE FUTURE SHOP (BEST BUY) LOEB (GROUND) MARK’S WORK WEARHOUSE BEST BUY WINNERS (TJ MAXX) FORTINO’S DOMINION LOEB BUSINESS DEPOT (STAPLES) LINEN N THINGS FUTURE SHOP (BEST BUY) 2079 WINNERS (TJ MAXX) 2028 2035 HART CANADIAN TIRE 2013 2011 2014 2015 2013 2014 2010 2018 2013 2014 2016 2011 2010 2015 2015 SHOPPERS DRUG MART PETSMART 2028 2021 2024 2025 SEARS APPLIANCE 2033 2024 LINEN N THINGS BUSINESS DEPOT (STAPLES) 2011 2012 2015 2014 2011 2021 2037 2025 2029 2021 2030 2028 2023 2024 2031 2016 BUSINESS DEPOT (STAPLES) CHAPTERS MICHAELS SEARS WHOLE HOME 2015 2030 2010 2015 2012 2030 2035 2022 2020 WEST ROYALTY FITNESS 2010 2015 2025 2035 SUPER C 2017 2037 Year Developed or Acquired Ownership Interest/ (Expiration)(2) Land Area (Acres) Leasable Area (Sq. Ft.) Percent Leased (1) Tenant Name Lease Expiration Option Expiration 364,301 80.6 WINNERS (TJ MAXX) GUZZO CINEMA ZELLERS MAGAZINE LUIZA RUSSI GROCERY 2021 2040 2103 2011 2010 2028 2020 2021 Major Leases Tenant Name BUREAU EN GROS (STAPLES) VALUE VILLAGE Lease Expiration Option Expiration Tenant Name Lease Expiration Option Expiration 2012 2013 2022 GUZZO CINEMA 2028 IGA 2019 2012 2039 2022 216,116 116,147 133,000 129,000 8,000 27,715 50,492 13,487 6,684 21,086 9,045 91,572 36,177 20,000 275,000 121,239 352,000 547,000 567,000 193,000 455,000 95.2 100.0 100.0 100.0 75.0 78.5 89.9 87.1 100.0 78.4 70.3 95.0 97.4 5.0 66.5 100.0 73.0 70.2 86.9 66.3 36.3 3 7 Location GREENFIELD PARK JACQUES CARTIER LAVAL BRAZIL HORTOLANDIA (11) VALINHOS (11) CHILE QUILICURA (11) SANTIAGO SANTIAGO SANTIAGO SANTIAGO SANTIAGO SANTIAGO SANTIAGO SANTIAGO SANTIAGO (11) VINA DEL MAR (11) MEXICO BAJA CALIFORNIA MEXICALI MEXICALI (11) ROSARITO (11) TIJUANA (11) TIJUANA (11) TIJUANA (11) BAJA CALIFORNIA SUR LOS CABOS (11) CAMPECHE CIUDAD DEL CARMEN (11) CHIAPAS TAPACHULA (11) CHIHUAHUA JUAREZ JUAREZ (11) COAHUILA CIUDAD ACUNA SABINAS SALTILLO (11) SALTILLO PLAZA DURANGO DURANGO GUERRERO ACAPULCO HIDALGO PACHUCA (11) PACHUCA (11) JALISCO GUADALAJARA GUADALAJARA GUADALAJARA (11) GUADALAJARA (11) LAGOS DE MORENO PUERTO VALLARTA MEXICO HUEHUETOCA HUEHUETOCA (11) TECAMAC (11) OJO DE AUGUA (11) MEXICO CITY INTERLOMAS IXTAPALUCA MEXICO CITY TLALNEPANTLA 2002 2002 2008 2008 2008 2008 2007 2007 2007 2007 2008 2008 2008 2008 2008 2008 2006 2006 2007 2005 2007 2007 2007 2007 2007 2003 2006 2007 2007 2005 2002 2007 2005 2005 2005 2005 2006 2005 2006 2007 2006 2004 2007 2006 2008 2007 2007 2005 2005 JOINT VENTURE JOINT VENTURE JOINT VENTURE JOINT VENTURE FEE JOINT VENTURE JOINT VENTURE JOINT VENTURE JOINT VENTURE JOINT VENTURE JOINT VENTURE JOINT VENTURE JOINT VENTURE JOINT VENTURE JOINT VENTURE JOINT VENTURE FEE JOINT VENTURE JOINT VENTURE JOINT VENTURE JOINT VENTURE JOINT VENTURE FEE JOINT VENTURE FEE JOINT VENTURE JOINT VENTURE FEE FEE FEE JOINT VENTURE FEE FEE JOINT VENTURE FEE JOINT VENTURE FEE JOINT VENTURE FEE FEE JOINT VENTURE JOINT VENTURE FEE JOINT VENTURE FEE JOINT VENTURE FEE FEE JOINT VENTURE 36.4 21.6 11.6 13.3 12.9 0.8 2.8 5.0 1.3 0.7 2.1 0.9 9.2 3.6 2.0 27.5 12.1 35.2 41.4 38.7 12.3 50.5 24.8 24.7 29.7 23.8 18.6 3.2 1.0 25.8 17.3 1.2 42.1 13.7 11.2 13.0 10.0 24.0 73.2 1.6 8.8 17.0 7.9 19.8 22.9 24.6 1.4 0.7 14.7 LIDER 2025 2040 SODIMAC 2025 2040 CINEPOLIS WAL-MART HOME DEPOT WAL-MART COMERCIAL MEXICANA WAL-MART 684,000 - US FOODS 308,000 54.2 CHEDRAUI GROCERY 369,000 33.6 WAL-MART 238,135 186,000 31,699 10,147 445,000 173,375 89.4 75.3 95.6 100.0 87.2 97.4 SORIANA WAL-MART COPPEL WALDO’S HEB HEB 11,911 100.0 421,239 96.6 WAL-MART 202,000 188,000 129,705 99,717 654,000 732,000 15,645 87,547 170,275 126,000 198,000 229,000 246,139 13,702 30,684 398,911 72.3 78.7 89.5 100.0 81.0 29.2 100.0 98.3 94.0 0.0 74.2 65.5 90.6 100.0 100.0 95.6 HOME DEPOT WAL-MART WAL-MART CINEPOLIS WAL-MART WAL-MART SORIANA WAL-MART COPPEL WAL-MART CHEDRAUI GROCERY GAMEWORKS WAL-MART 2038 2020 2022 2023 2021 2023 2019 2013 2024 2024 2023 2027 2021 2015 2020 2042 2019 2021 2024 2026 2019 2025 2021 2021 2014 2023 2023 2023 2011 2026 CINEPOLIS MM CINEMA CINEPOLIS 2023 2016 2024 WAL-MART COPELL 2022 2016 ZARA CINEPOLIS CINEPOLIS 2011 2022 2024 ZARA 2018 Year Developed or Acquired Ownership Interest/ (Expiration)(2) Land Area (Acres) Leasable Area (Sq. Ft.) Percent Leased (1) Tenant Name Lease Expiration Option Expiration Tenant Name Lease Expiration Option Expiration Tenant Name Lease Expiration Option Expiration Major Leases Location MORELOS CUAUTLA (11) NAYARIT NEUVO VALLARTA (11) NUEVO LEON ESCOBEDO (11) MONTERREY MONTERREY (11) MONTERREY (11) OAXACA TUXTEPEC TUXTEPEC (11) QUERETARO SAN JUAN DEL RIO (11) QUINTANA ROO CANCUN CANCUN CANCUN (11) SAN LUIS POTOSI SAN LUIS SONORA LOS MOCHIS (11) HERMOSILLO (11) TAMAULIPAS ALTAMIRA MATAMOROS MATAMOROS MATAMOROS NUEVO LAREDO NUEVO LAREDO NUEVO LAREDO (11) REYNOSA REYNOSA REYNOSA REYNOSA RIO BRAVO RIO BRAVO (11) TAMPICO VERACRUZ MINATITLAN PERU LIMA (11) 3 8 2006 2007 2006 2002 2006 2008 2005 2007 2006 2004 2007 2008 2004 2007 2008 2007 2007 2007 2007 2007 2007 2006 2004 2007 2007 2007 2007 2008 2007 2007 2008 JOINT VENTURE FEE JOINT VENTURE JOINT VENTURE FEE FEE JOINT VENTURE JOINT VENTURE FEE FEE FEE FEE JOINT VENTURE FEE FEE FEE FEE FEE FEE FEE FEE FEE JOINT VENTURE FEE FEE FEE FEE FEE FEE FEE FEE 58.9 19.7 34.7 27.3 38.1 18.3 9.7 10.0 22.3 9.1 28.4 25.0 12.1 9.9 9.9 2.4 15.4 1.1 1.1 0.9 1.1 44.2 38.0 11.5 1.0 1.8 1.0 22.0 1.6 2.0 589,000 53.8 WAL-MART 301,000 42.9 WAL-MART 347,000 272,864 381,000 183,000 96,919 136,000 69.2 98.0 78.2 37.7 98.5 37.5 HEB HEB HEB HEB WAL-MART MM CINEMA 223,000 37.7 WAL-MART 91,130 284,145 250,000 100.0 92.1 52.0 WAL-MART SUBURBIA CHEDRAUI GROCERY 121,334 97.8 HEB 152,000 379,000 24,479 153,774 10,900 10,835 8,565 10,760 442,000 380,036 115,093 9,684 17,603 9,673 220,000 16,162 67.1 37.7 WAL-MART SEARS 100.0 97.3 100.0 100.0 100.0 100.0 75.1 96.9 100.0 100.0 91.9 100.0 41.8 100.0 FAMSA CINEPOLIS WALDOS WALDOS WALDOS WAL-MART HEB GIGANTE WALDOS HEB 19,847 100.0 WALDOS 0.9 9,000 — TOTAL 946 SHOPPING CENTER PROPERTY INTERESTS 14,784 141,114,254 OTHER PROPERTY INTERESTS US PREFERRED EQUITY INVESTMENTS (RETAIL ASSETS ONLY) ALASKA ANCHORAGE (12) ARIZONA TUSCON CALIFORNIA CHATSWORTH HAWTHORNE MALIBU MALIBU FLORIDA APOPKA AUBURNDALE 2006 2006 2003 2004 2007 2007 2007 2006 JOINT VENTURE 5.86 84,463 90.2 BED, BATH & BEYOND JOINT VENTURE 57.30 504,010 93.2 JOINT VENTURE JOINT VENTURE JOINT VENTURE JOINT VENTURE JOINT VENTURE JOINT VENTURE 6.80 — 1.86 1.25 7.90 4.00 75,875 21,507 22,279 15,148 71,615 10,000 100.0 100.0 87.6 91.8 100.0 54.4 LOEWS/CINEPLEX ODEON KAHOOTS OFFICE DEPOT WINN DIXIE 2013 2038 2023 2019 2042 2042 2047 2029 2025 2018 2013 2018 2025 2023 2019 2018 2020 2020 2014 2012 2012 2012 2022 2029 2012 2012 2028 2016 2018 2017 2014 2019 CINEPOLIS 2021 2050 GIGANTE 2009 OFFICE DEPOT 2015 2047 HOME DEPOT 2028 2043 CINEPOLIS 2023 2038 2037 BARNES & NOBLE 2012 2022 ROSS STORES INC 2013 2028 2024 2038 SMART & FINAL 2014 2034 TRADER JOE’S COMPANY 2014 2029 Year Developed or Acquired Ownership Interest/ (Expiration)(2) Land Area (Acres) Leasable Area (Sq. Ft.) Tenant Name Lease Expiration Option Expiration Tenant Name Lease Expiration Option Expiration Tenant Name Lease Expiration Option Expiration Major Leases 3 9 Location BRANDON CLEARWATER CLEARWATER (12) DELRAY BEACH (12) DELTONA JACKSONVILLE LAKE WALES LOXAHATCHEE MIAMI PEMBROKE PINES SARASOTA SPRING HILL TAMPA WELLINGTON GEORGIA MOULTRIE ILLINOIS LANSING IOWA WEST DES MOINES KENTUCKY LOUISVILLE LOUISIANA LAFAYETTE LAKE CHARLES SHREVEPORT SHREVEPORT MASSACHUSETTS HAVERHILL MISSISSIPPI RIDGELAND RIDGELAND RIDGELAND NEW HAMPSHIRE LANCASTER LITTLETON NEWPORT WOODSVILLE WOODSVILLE NEW JERSEY WHITING NEW YORK PORT JEFFERSON STATION TENNESSEE COOKEVILLE TEXAS AUSTIN AUSTIN AUSTIN AUSTIN AUSTIN AUSTIN AUSTIN CARROLLTON GEORGETOWN KILLEEN (11) LAKE JACKSON (11) RICHARDSON SAN ANTONIO SAN MARCOS SOUTHLAKE 2006 2004 2007 2007 2004 2006 2007 2003 2004 2008 2005 2003 2004 2002 2006 2005 2006 2006 2007 2007 2005 2006 2006 2005 2005 2005 2006 2006 2006 2006 2006 2007 2007 2007 2006 2006 2004 2005 2006 2006 2006 2006 2005 2006 2006 2007 2003 2005 2005 JOINT VENTURE JOINT VENTURE JOINT VENTURE JOINT VENTURE JOINT VENTURE JOINT VENTURE JOINT VENTURE JOINT VENTURE JOINT VENTURE JOINT VENTURE JOINT VENTURE JOINT VENTURE JOINT VENTURE JOINT VENTURE JOINT VENTURE JOINT VENTURE JOINT VENTURE JOINT VENTURE JOINT VENTURE JOINT VENTURE JOINT VENTURE JOINT VENTURE JOINT VENTURE JOINT VENTURE JOINT VENTURE JOINT VENTURE JOINT VENTURE JOINT VENTURE JOINT VENTURE JOINT VENTURE JOINT VENTURE JOINT VENTURE JOINT VENTURE JOINT VENTURE JOINT VENTURE JOINT VENTURE JOINT VENTURE JOINT VENTURE JOINT VENTURE JOINT VENTURE JOINT VENTURE JOINT VENTURE JOINT VENTURE JOINT VENTURE JOINT VENTURE JOINT VENTURE JOINT VENTURE JOINT VENTURE JOINT VENTURE 1.69 8.38 3.13 18.00 7.00 1.50 0.83 8.50 49.97 29.20 12.56 7.34 11.40 18.70 22.37 52.80 7.60 36.31 12.93 17.28 18.40 8.40 6.94 3.35 3.75 6.01 10.80 43.00 20.00 1.74 3.50 26.70 7.00 37.64 19.75 10.94 19.99 15.61 4.15 10.20 4.78 1.97 12.13 3.00 8.00 4.80 8.10 16.99 15.07 Percent Leased (1) 0.0 97.0 0.0 78.3 91.0 0.0 0.0 96.8 94.0 92.2 95.2 95.3 89.0 91.8 10,000 84,441 31,729 118,175 80,567 — — 75,194 651,011 273,459 148,348 69,917 100,538 171,955 KASH N KARRY PUBLIX SUPERMARKETS, INC. WINN DIXIE WINN DIXIE HOME DEPOT SEDANO’S OFFICE DEPOT WINN DIXIE KASH N KARRY ACE HARDWARE 196,589 94.5 WAL MART 320,339 87.9 WAL-MART 44,123 100.0 2014 2011 2014 2019 2028 2014 2015 2010 2015 2018 2017 2020 2034 WALGREEN’S DELRAY SQUARE CINEMAS INC. PET SUPERMARKET TIGER DIRECT NAVARRO’S PHARMACY PETSMART US POSTAL SERVICE BEALL’S 2021 2029 2054 2058 2034 2025 2035 2035 2033 2047 2014 2011 2009 2010 2010 2013 2010 2018 2011 2024 2020 2025 2033 AMC CINEMA TIGER DIRECT JO-ANN FABRIC 2033 WALGREEN’S 2009 2034 2018 2009 2019 2013 2029 2070 OFFICE DEPOT 2012 2037 CITI TRENDS INC 2011 2020 151,369 100.0 TOYS R US 2011 2046 TJ MAXX 2011 2021 GOODY’S 2014 2029 29,405 126,601 93,669 78,591 75.3 99.1 100.0 95.5 63,203 94.8 MARSHALL’S OFFICE MAX MICHAELS 41,759 61,753 81,626 50,080 34,583 116,828 11,180 39,000 91.9 96.9 100.0 100.0 100.0 94.5 100.0 100.0 PARTY CITY ACADEMY SPORTS SHAW’S SUPERMARKET STAPLES OCEAN STATE JOB LOT RITE AID SHAW’S SUPERMARKET 95,848 98.9 STOP ‘N SHOP 65,083 95.1 GIUNTA’S MEAT FARM SUPERMARKET 211,483 97.6 FOOD LION 207,614 100.0 ACADEMY SPORTS 131,039 97,784 178,700 40,000 88,829 54,651 18,740 117,018 14,576 26,157 52,039 103,123 185,092 95.0 90.2 79.0 100.0 100.0 100.0 80.7 91.6 100.0 100.0 79.7 99.0 100.0 24 HOUR FITNESS OSHMAN’S GOLD’S TEXAS HOLDINGS, L.P. DAVE AND BUSTERS BARNES & NOBLE CONN’S ELECTRIC DOLLAR TREE HOBBY LOBBY 132,609 94.0 HOBBY LOBBY 2012 2012 2014 2014 2019 2018 2015 2011 2017 2015 2026 2016 2028 2012 2024 2014 2014 2019 2014 2010 2010 2013 2021 2027 2032 2034 ROSS STORES INC BARNES & NOBLE DOLLAR TREE 2014 2013 2010 2029 2028 2025 BED, BATH & BEYOND OLD NAVY 2014 2012 2034 2012 2019 2029 2048 2020 2031 2042 2030 2046 2016 SHAW’S SUPERMARKET 2015 2031 2048 GOODY’S PACIFIC RESOURCES ASSOCIATION GAITTLAND BED BATH & BEYOND MONARCH EVENTS 2022 2034 2029 2019 2034 2029 2020 PETCO 2011 2021 2013 2011 2011 2014 2017 2023 TJ MAXX 2031 2026 2029 2027 GOLD’S TEXAS HOLDINGS, L.P. DOLLAR TREE HEB GROCERY COMPANY, LP 2014 2012 2011 2009 2034 2022 2025 2011 2025 CVS 2014 2019 GEORGETOWN FITNESS 2011 2011 2023 2031 HASTINGS ENTERTAINMENT INC 2009 2019 TRACTOR SUPPLY COMPANY 2013 2013 Location Year Developed or Acquired Ownership Interest/ (Expiration)(2) Land Area (Acres) Leasable Area (Sq. Ft.) Percent Leased (1) CANADA PREFERRED EQUITY INVESTMENTS (RETAIL ASSETS ONLY) Tenant Name Lease Expiration Option Expiration Tenant Name Lease Expiration Option Expiration Tenant Name Lease Expiration Option Expiration Major Leases ALBERTA CALGARY CALGARY CALGARY EDMONTON (12) HINTON LETHBRIDGE LETHBRIDGE LETHBRIDGE BRITISH COLUMBIA 100 MILE HOUSE BURNABY COURTENAY GIBSONS KAMLOOPS (11) LANGLEY PORT ALBERNI PRINCE GEORGE SURREY TRAIL VANCOUVER WESTBANK WESTBANK (11) 4 0 MANITOBA WINNIPEG NEW BRUNSWICK FREDERICTON MONCTON NEWFOUNDLAND ST. JOHN’S ONTARIO BARRIE BARRIE BARRIE BRANTFORD BURLINGTON CAMBRIDGE CORNWALL GUELPH HAMILTON HAMILTON HAMILTON KITCHENER KITCHENER LONDON LONDON LONDON MILTON (11) MISSISSAUGA NORTH BAY OTTAWA OTTAWA OTTAWA OTTAWA OTTAWA OTTAWA OTTAWA OTTAWA OTTAWA ST. CATHERINES ST. CATHERINES 2005 2004 2004 2007 2004 2005 2005 2006 2004 2005 2005 2004 2005 2004 2004 2004 2004 2004 2004 2004 2006 2005 2005 2005 2006 2005 2005 2005 2005 2005 2005 2005 2005 2005 2005 2005 2006 2006 2005 2005 2004 2007 2005 2005 2005 2007 2007 2007 2007 2007 2007 2007 2007 2005 2005 JOINT VENTURE JOINT VENTURE JOINT VENTURE JOINT VENTURE JOINT VENTURE JOINT VENTURE JOINT VENTURE JOINT VENTURE JOINT VENTURE JOINT VENTURE JOINT VENTURE JOINT VENTURE JOINT VENTURE JOINT VENTURE JOINT VENTURE JOINT VENTURE JOINT VENTURE JOINT VENTURE JOINT VENTURE JOINT VENTURE JOINT VENTURE JOINT VENTURE JOINT VENTURE JOINT VENTURE 0.27 9.01 10.00 17.90 18.51 0.32 0.22 25.61 7.19 0.57 0.29 10.26 9.71 7.58 2.46 8.00 8.00 15.90 2.97 9.66 25.92 0.39 0.60 0.36 6,308 172,021 127,598 101,997 137,735 7,226 4,000 370,525 69,051 8,788 4,024 141,393 106,687 34,832 32,877 83,405 104,191 181,291 35,954 111,431 15,730 100.0 96.0 98.8 94.4 90.7 66.4 100.0 96.4 97.7 100.0 100.0 78.1 100.0 100.0 100.0 100.0 98.6 92.3 94.5 96.9 100.0 4,200 100.0 6,742 4,655 100.0 0.0 WINNERS APPAREL LTD. BEST BUY CANADA LTD. LONDON DRUGS LTD. WAL-MART CANADA CORP. 2012 2009 2015 2011 2022 2034 2035 2036 THE HOUSE OF TOOLS WINNERS MERCHANTS INT. LP 2010 2014 2015 2025 DOLLAR GIANT STORE NOVA SCOTIA COMPANY 2016 2015 2026 2035 CANADA SAFEWAY 2010 2045 ZELLERS 2023 2078 CANADIAN TIRE SAVE ON FOOD & DRUGS 2015 2035 D & W MANAGEMENT LONDON DRUGS LTD. WINNERS BUY-LOW FOODS SAVE ON FOOD & DRUGS SAFEWAY STORE #184 ZELLERS SAVE ON FOOD & DRUGS STAPLES 2021 2016 2012 2011 2012 2009 2017 2022 2031 2031 2027 2033 2033 2019 2037 2037 SUPER VALU JYSK SHOPPERS REALTY INC. NEW HOLLYWOOD THEATRE EXTRA FOODS SHOPPER’S DRUGMART 2009 2013 2012 2016 2014 2013 2014 2015 2029 SAVE ON FOOD & DRUGS 2011 2031 2018 2012 2034 CHEVRON CANADA LTD. BANK OF MONTREAL 2017 2017 2022 2032 2044 2023 2044 2045 G&G HARDWARE 2011 2021 JOINT VENTURE 25.80 429,297 73.1 LABELS 2018 2027 CONVERGYS CALL CENTRE 2016 2019 GOODLIFE FITNESS CENTRES 2018 2027 JOINT VENTURE JOINT VENTURE JOINT VENTURE JOINT VENTURE JOINT VENTURE JOINT VENTURE JOINT VENTURE JOINT VENTURE JOINT VENTURE JOINT VENTURE JOINT VENTURE JOINT VENTURE JOINT VENTURE JOINT VENTURE JOINT VENTURE JOINT VENTURE JOINT VENTURE JOINT VENTURE JOINT VENTURE JOINT VENTURE JOINT VENTURE JOINT VENTURE JOINT VENTURE JOINT VENTURE JOINT VENTURE JOINT VENTURE JOINT VENTURE JOINT VENTURE JOINT VENTURE JOINT VENTURE 1.10 1.62 1.62 0.84 0.76 1.28 0.26 0.79 0.28 0.54 0.30 2.00 5.00 0.41 0.56 6.94 36.48 1.75 0.50 0.27 1.48 4.95 2.60 9.10 0.56 2.67 1.10 0.15 3.02 0.34 4,748 1,680 6,897 12,894 9,126 15,730 4,000 3,600 6,500 10,441 4,125 13,450 66,460 8,152 5,700 86,612 — 31,091 6,666 4,448 26,331 46,400 39,840 3,400 11,133 31,001 12,287 11,265 38,934 5,418 100.0 100.0 63.9 58.0 100.0 97.1 100.0 100.0 0.0 81.7 100.0 100.0 93.6 100.0 100.0 98.7 0.0 100.0 100.0 100.0 68.3 90.0 100.0 100.0 68.6 100.0 100.0 100.0 100.0 100.0 VALUE VILLAGE SOBEY’S EMPIRE THEATRES ESTATE HARDWOOD 2011 2012 2015 2010 2026 2037 2035 2015 ORMES FURNITURE 2010 2015 LOEB CANADA INC 2012 2027 Year Developed or Acquired Ownership Interest/ (Expiration)(2) Land Area (Acres) Leasable Area (Sq. Ft.) Tenant Name Lease Expiration Option Expiration Tenant Name Lease Expiration Option Expiration Tenant Name Lease Expiration Option Expiration Major Leases Location ST. THOMAS SUDBURY SUDBURY WATERLOO WATERLOO (11) QUEBEC ALMA CHANDLER GASPE JONQUIERE LAMALBAIE LAURIER STATION MONTREAL (11) ROBERVAL SAGUENAY ST. AUGUSTIN-DE- DESMAURES ST. JEROME STE. EUSTACHE STE. EUSTACHE VICTORIAVILLE 2005 2005 2006 2005 2005 2004 2004 2004 2004 2006 2006 2006 2004 2004 2006 2007 2005 2005 2008 JOINT VENTURE JOINT VENTURE JOINT VENTURE JOINT VENTURE JOINT VENTURE JOINT VENTURE JOINT VENTURE JOINT VENTURE JOINT VENTURE JOINT VENTURE JOINT VENTURE JOINT VENTURE JOINT VENTURE JOINT VENTURE JOINT VENTURE JOINT VENTURE JOINT VENTURE JOINT VENTURE JOINT VENTURE 0.24 0.62 5.36 0.59 10.00 36.08 20.08 15.21 25.24 9.24 3.20 232.00 3.68 13.52 4.72 5.96 6.62 2.39 30.79 1,497 TOTAL 131 PREFERRED EQUITY INTERESTS (RETAIL ASSETS ONLY) OTHER REAL ESTATE INVESTMENTS 4 1 RETAIL STORE LEASES (13) AI PORTFOLIO (VARIOUS CITIES) NON-RETAIL 259 ASSETS OTHER 36 PROPERTY INTERESTS 1995/1997 LEASEHOLD — 1,468,000 2005 JOINT VENTURE 206.49 9,013,450 VARIOUS VARIOUS 252.45 11,019,605 VARIOUS VARIOUS 34.83 1,520,285 GRAND TOTAL 1470 PROPERTY INTERESTS 16,774.97 175,295,576 (14) Percent Leased (1) 100.0 42.8 100.0 100.0 100.0 3,595 9,643 40,128 5,274 18,380 PRICE CHOPPER SHOPPER’S DRUG MART 323,641 91.1 ZELLERS 114,078 152,285 247,404 118,593 36,366 447,135 127,251 284,620 93.0 99.7 94.1 91.8 94.3 100.0 99.4 94.3 HART STORES CANADIAN TIRE ZELLERS HART STORES ZELLERS IGA ZELLERS 52,565 98.3 PROVIGO 82,391 51,195 26,694 207,143 11,159,982 MAXI (PROVIGO) MAXI (PROVIGO) CANADIAN TIRE 100.0 100.0 87.1 85.3 95.9 87.0 100.0 100.0 2022 LIQUIDATION WORLD 2012 2012 2012 2022 2009 2009 2021 2009 2010 2021 2021 2013 2009 2012 2022 2015 2037 2094 SEARS MCDONALD’S SOBEYS STORES LTD SUPER C GROCERIES METRO RICHELIEU THE BRICK ROSSY WINNERS 2024 2046 2094 2010 2056 2046 2013 2024 2022 2027 2011 2015 2015 2009 2016 2026 2010 2011 2026 2025 2030 2020 2026 2036 2015 2026 IGA (COOP DES CONSUMMAT) METRO HART STORES ROSSY CANADIAN TIRE TOYS R US L’AUBAINERIE CONCEPT MODE 2015 2010 2011 2016 2013 2021 2016 2035 2020 2021 2019 2013 2041 2026 PHARMACIE BRUNET 2013 2023 DOLLARAMA 2009 2009 2035 METRO 2023 JEAN DEPOT 2009 2009 (1) (2) (3) (4) (5) (6) (7) (8) (9) (10) (11) (12) (13) (14) Percent leased information as of December 31, 2008 or date of acquisition if acquired subsequent to December 31, 2008. The term “joint venture” indicates that the company owns the property in conjunction with one or more joint venture partners. The date indicated is the expiration date of any ground lease after giving affect to all renewal periods. Denotes property interest in Kimpru. Denotes property interest in Kimco Income REIT (“KIR”). Denotes property interest in UBS. Denotes property interest in PL Realty LLC. Denotes property interest in Kimco Income Fund I. Denotes property interest in Kimco Retail Opportunity Portfolio (“KROP”). Denotes property interest in other institutional programs. Denotes property interest in Seb Immobilien Denotes ground-up development project. This includes properties that are currently under construction, completed projects awaiting stabilization and or available for sale. The square footage shown represents the completed leaseable area and area held available for sale Denotes redevelopment project. The company holds interests in 19 retail store leases related to the anchor store premises in neighborhood and community shopping centers. Does not include 29 FNC Realty properties comprised of 559K square feet, 49 Newkirk properties consisting of 2.5 million square feet, 402 net leased properties with 2.3 million square feet and 1.6 million square feet of projected leaseable area related to the preferred equity ground-up development projects. EXECUTIVE OFFICERS OF THE REGISTRANT The following table sets forth information with respect to the executive officers of the Company as of February 26, 2009. Name Milton Cooper . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Age 79 David B. Henry . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 59 David Lukes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Michael V. Pappagallo . . . . . . . . . . . . . . . . . . . . . . . . 39 49 Glenn G. Cohen . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44 Position Chairman of the Board of Directors and Chief Executive Officer President, Vice Chairman of the Board of Directors and Chief Investment Officer Chief Operating Officer Chief Administrative Officer Executive Vice President - Chief Financial Officer Senior Vice President - Chief Accounting Officer and Treasurer Since 1991 2008 2001 2008 2008 2005 1997 2008 1997 David Lukes has been with the Company since 2002. Prior to his promotion to Chief Operating Officer, Mr. Lukes had been Executive Vice President, through which he was responsible for the financial performance of the redevelopment program in the Northeast and Westcoast since August 2006. Prior to this role, he served as Vice President of Leasing, primarily responsible for leasing efforts within the Company’s redevelopment portfolio. The executive officers of the Company serve in their respective capacities for approximately one-year terms and are subject to re-election by the Board of Directors, generally at the time of the Annual Meeting of the Board of Directors following the Annual Meeting of Stockholders. 42 PART II ITEM 5. MARKET FOR THE REGISTRANT’S COMMON EQUITY, RELATED SHAREHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES MARKET INFORMATION The following sets forth the common stock offerings completed by the Company during the three-year period ended December 31, 2008. The Company’s common stock (“Common Stock”) was sold for cash at the following offering price per share: Offering Date March 2006 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . September 2008 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Offering Price $40.80 $37.10 In connection with the March 2006 Atlantic Realty Trust (“Atlantic Realty”) merger, the Company issued Atlantic Realty shareholders 1,274,420 shares of Common Stock, excluding 201,930 shares of Common Stock that were to be received by the Company and 546,580 shares of Common Stock that were to be received by the Company’s wholly owned TRS. During December 2008, the Company purchased the 546,580 shares from its TRS for a purchase price of $17.69 per share. The 546,580 shares had a carry-over basis from the Atlantic Realty share price of $17.10 per share. This purchase was not in connection with a publicly announced plan or program. The table below sets forth, for the quarterly periods indicated, the high and low sales prices per share reported on the NYSE Composite Tape and declared dividends per share for the Company’s common stock. The Company’s common stock is traded on the New York Stock Exchange under the trading symbol “KIM”. Stock Price Period High Low Dividends 2007: First Quarter . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Second Quarter . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Third Quarter . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Fourth Quarter . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2008: First Quarter . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Second Quarter . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Third Quarter . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Fourth Quarter . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $53.60 $50.36 $47.58 $47.69 $40.18 $42.30 $47.80 $37.06 $ 43.59 $ 36.92 $ 33.74 $ 34.74 $ 29.00 $ 34.20 $ 29.54 $ 9.56 $0.36 $0.36 $0.40 $0.40 (a) $0.40 $0.40 $0.44 $0.44 (b) (a) (b) Paid on January 15, 2008, to stockholders of record on January 2, 2008. Paid on January 15, 2009, to stockholders of record on January 2, 2009. HOLDERS The number of holders of record of the Company’s common stock, par value $0.01 per share, was 3,492 as of January 30, 2009. DIVIDENDS Since the IPO, the Company has paid regular quarterly dividends to its stockholders. While the Company intends to continue paying regular quarterly dividends, future dividend declarations will be at the discretion of the Board of Directors and will depend on the actual cash flow of the Company, its financial condition, capital requirements, the annual distribution requirements under the REIT provisions of the Code and such other factors as the Board of Directors deems relevant. The Company’s Board of Directors will continue to evaluate the Company’s dividend policy on a quarterly basis as they monitor sources of capital and evaluate the impact of the economy on operating fundamentals. The Company is required by the Internal Revenue Code of 1986, as amended, to distribute at least 90% of its REIT taxable income. The actual cash flow available to pay dividends will be affected by a number of factors, including the revenues received from rental properties, the operating expenses of the Company, the interest expense on its borrowings, the ability of lessees to meet their obligations to the Company, the ability to refinance near-term debt maturities and any unanticipated capital expenditures. 43 The Company has determined that the $1.64 dividend per common share paid during 2008 represented 69% ordinary income, 19% in capital gains and a 12% return of capital to its stockholders. The $1.48 dividend per common share paid during 2007 represented 56% ordinary income, 35% in capital gains and a 9% return of capital to its stockholders. In addition to its Common Stock offerings, the Company has capitalized the growth in its business through the issuance of unsecured fixed and floating-rate medium-term notes, underwritten bonds, mortgage debt and construction loans, convertible preferred stock and perpetual preferred stock. Borrowings under the Company’s revolving credit facilities have also been an interim source of funds to both finance the purchase of properties and other investments and meet any short-term working capital requirements. The various instruments governing the Company’s issuance of its unsecured public debt, bank debt, mortgage debt and preferred stock impose certain restrictions on the Company with regard to dividends, voting, liquidation and other preferential rights available to the holders of such instruments. See “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and Notes 11 and 17 of the Notes to Consolidated Financial Statements included in this annual report on Form 10-K. The Company does not believe that the preferential rights available to the holders of its Class F Preferred Stock and Class G Preferred Stock, the financial covenants contained in its public bond indentures, as amended, or its revolving credit agreements will have an adverse impact on the Company’s ability to pay dividends in the normal course to its common stockholders or to distribute amounts necessary to maintain its qualification as a REIT. The Company maintains a dividend reinvestment and direct stock purchase plan (the “Plan”) pursuant to which common and preferred stockholders and other interested investors may elect to automatically reinvest their dividends to purchase shares of the Company’s common stock or, through optional cash payments, purchase shares of the Company’s common stock. The Company may, from time-to-time, either (i) purchase shares of its common stock in the open market or (ii) issue new shares of its common stock for the purpose of fulfilling its obligations under the Plan. TOTAL STOCKHOLDER RETURN PERFORMANCE The following performance chart compares, over the five years ended December 31, 2008, the cumulative total stockholder return on the Company’s common stock with the cumulative total return of the S&P 500 Index and the cumulative total return of the NAREIT Equity REIT Total Return Index (the “NAREIT Equity Index”) prepared and published by the National Association of Real Estate Investment Trusts (“NAREIT”). Equity real estate investment trusts are defined as those which derive more than 75% of their income from equity investments in real estate assets. The NAREIT Equity Index includes all tax qualified equity real estate investment trusts listed on the New York Stock Exchange, American Stock Exchange or the NASDAQ National Market System. Stockholder return performance, presented quarterly for the five years ended December 31, 2008, is not necessarily indicative of future results. All stockholder return performance assumes the reinvestment of dividends. The information in this paragraph and the following performance chart are deemed to be furnished, not filed. ) 0 0 1 = 2 0 0 2 r e b m e c e D ( A R T d e x e d n I 350 300 250 200 150 100 50 0 D ec-0 3 NAREIT: 4.65% KIM: 1.31% S&P: -10.48% M ar-04 Ju n-0 4 S e p-0 4 D ec-0 4 M ar-05 Ju n-0 5 S e p-0 5 D ec-0 5 M ar-06 Ju n-0 6 S e p-0 6 D ec-0 6 M ar-07 Ju n-0 7 S e p-0 7 D ec-0 7 M ar-08 Ju n-0 8 S e p-0 8 D ec-0 8 Kimco S&P 500 NAREIT Equity 44 ITEM 6. SELECTED FINANCIAL DATA The following table sets forth selected, historical, consolidated financial data for the Company and should be read in conjunction with the Consolidated Financial Statements of the Company and Notes thereto and Management’s Discussion and Analysis of Financial Condition and Results of Operations included in this annual report on Form 10-K. The Company believes that the book value of its real estate assets, which reflects the historical costs of such real estate assets less accumulated depreciation, is not indicative of the current market value of its properties. Historical operating results are not necessarily indicative of future operating performance. Operating Data: Revenues from rental property (1) . . . . . . . . . . . Interest expense (3) . . . . . . . . . . . . . . . . . . . . . . . Depreciation and amortization (3) . . . . . . . . . . . Gain on sale of development properties (4) . . . . Gain on transfer/sale of operating properties, net (3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Benefit for income taxes (5) . . . . . . . . . . . . . . . . Provision for income taxes (6) . . . . . . . . . . . . . . Impairment charges (4) . . . . . . . . . . . . . . . . . . . . Income from continuing operations (7) . . . . . . . Income per common share, from continuing operations: Basic . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Diluted . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Weighted average number of shares of common stock: Basic . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Diluted . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Cash dividends declared per common share . . . 2008 $758,704 $212,591 $204,310 $ 36,565 1,782 $ $ 12,974 $ — $145,918 $225,186 Year ended December 31, (2) (8) 2006 2007 (in thousands, except per share information) 2005 $674,534 $213,086 $188,063 $ 40,099 2,708 $ $ 30,346 $ — $ 13,796 $358,991 $580,551 $170,079 $137,820 $ 37,276 2,460 $ $ — $ 17,253 $ — $342,790 $494,467 $125,825 $ 99,072 $ 33,636 2,833 $ $ — $ 10,989 $ — $321,646 2004 $ 482,248 $ 105,411 $ 93,684 $ 16,835 — $ — $ 8,320 $ $ — $ 270,692 $ $ 0.69 0.69 $ $ 1.35 1.32 $ $ 1.38 1.35 $ $ 1.37 1.34 $ $ 1.16 1.14 257,811 258,843 1.68 $ 252,129 257,058 1.52 $ 239,552 244,615 1.38 $ 226,641 230,868 1.27 $ 222,859 227,143 1.16 $ 2008 2007 December31, 2006 2005 2004 Balance Sheet Data: Real estate, before accumulated depreciation . . . . . . . . . . . . . . . . . . . . . . . . . . $ 7,818,916 Total assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 9,397,147 Total debt . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 4,556,646 Total stockholders’ equity . . . . . . . . . . . . . . . . . $ 3,975,346 $ 7,325,035 $ 9,097,816 $ 4,216,415 $ 3,894,574 $ 6,001,319 $ 7,869,280 $ 3,587,243 $ 3,366,959 $ 4,560,406 $ 5,534,636 $ 2,691,196 $ 2,387,214 $ 4,092,222 $ 4,749,597 $ 2,118,622 $ 2,236,400 Cash flow provided by operations . . . . . . . . . . . $ 365,176 Cash flow used for investing activities . . . . . . . $ (781,350) $ (1,507,611) $ (246,221) $ (716,015) $ (299,597) Cash flow provided by (used for) financing 455,569 665,989 567,599 410,797 $ $ $ $ activities . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 262,429 $ 584,056 $ 59,444 $ 343,271 $ (75,647) (1) Does not include (i) revenues from rental property relating to unconsolidated joint ventures, (ii) revenues relating to the investment in retail stores leases and (iii) revenues from properties included in discontinued operations. (2) All years have been adjusted to reflect the impact of operating properties sold during the years ended December 31, 2008, 2007, 2006, 2005 and 2004 and properties classified as held for sale as of December 31, 2008, which are reflected in discontinued operations in the Consolidated Statements of Income. (3) Does not include amounts reflected in discontinued operations. 45 (4) Amounts exclude effect for income taxes. (5) Does not include amounts reflected in discontinued operations and extraordinary gain. Amounts include income taxes related to gain on sale of development properties, gain on transfer/sale of operating properties, and impairments. (6) Amounts include income taxes related to gain on sale of development properties and gain on transfer/sale of operating properties. (7) Amounts include gain on transfer/sale of operating properties, net of tax. (8) As of August 23, 2005, the Company effected a two-for-one split (the “Stock Split”) of the Company’s common stock in the form of a stock dividend paid to stockholders of record on August 8, 2005. All common share and per common share data has been adjusted to reflect this Stock Split. ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS The following discussion should be read in conjunction with the Consolidated Financial Statements and Notes thereto included in this annual report on Form 10-K. Historical results and percentage relationships set forth in the Consolidated Statements of Income contained in the Consolidated Financial Statements, including trends which might appear, should not be taken as indicative of future operations. EXECUTIVE SUMMARY Kimco Realty Corporation is one of the nation’s largest publicly-traded owners and operators of neighborhood and community shopping centers. As of December 31, 2008, the Company had interests in 1,950 properties, totaling approximately 182.2 million square feet of GLA located in 45 states, Puerto Rico, Canada, Mexico, Chile, Brazil and Peru. The Company is self-administered and self-managed through present management, which has owned and managed neighborhood and community shopping centers for over 50 years. The executive officers are engaged in the day-to-day management and operation of real estate exclusively with the Company, with nearly all operating functions, including leasing, asset management, maintenance, construction, legal, finance and accounting, administered by the Company. In connection with the Tax Relief Extension Act of 1999 (the “RMA”), which became effective January 1, 2001, the Company is permitted to participate in activities which it was precluded from previously in order to maintain its qualification as a Real Estate Investment Trust (“REIT”), so long as these activities are conducted in entities which elect to be treated as taxable subsidiaries under the Code, subject to certain limitations. As such, the Company, through its taxable REIT subsidiaries, is engaged in various retail real estate-related opportunities including (i) merchant building, through its wholly owned taxable REIT subsidiaries, which are primarily engaged in the ground-up development of neighborhood and community shopping centers and the subsequent sale thereof upon completion, (ii) retail real estate advisory and disposition services, which primarily focus on leasing and disposition strategies of retail real estate controlled by both healthy and distressed and/or bankrupt retailers and (iii) acting as an agent or principal in connection with tax deferred exchange transactions. The Company will consider other investments through taxable REIT subsidiaries should suitable opportunities arise. In addition, the Company continues to capitalize on its established expertise in retail real estate by establishing other ventures in which the Company owns a smaller equity interest and provides management, leasing and operational support for those properties. The Company also provides preferred equity capital for real estate entrepreneurs and provides real estate capital and advisory services to both healthy and distressed retailers. The Company has made selective investments in secondary market opportunities where a security or other investment was, in management’s judgment, priced below the value of the underlying assets. However these investments are subject to volatility within the equity and debt markets. The Company’s strategy is to maintain a strong balance sheet providing it the necessary flexibility to invest opportunistically and selectively, primarily focusing on neighborhood and community shopping centers. The Company continually evaluates its debt maturities, and, based on management’s current assessment, believes it has viable financing and refinancing alternatives that will not materially adversely impact its expected financial results. Although the credit environment has become much more constrained since the third quarter of 2008, the Company continues to pursue opportunities with large commercial U.S. and global banks, select life insurance companies and 46 certain regional and local banks. The Company has noticed a trend that the approval process from lenders has slowed, while pricing and loan-to-value ratios remain dependent on specific deal terms, in general, spreads are higher and loan- to-values are lower, but the lenders are continuing to complete financing agreements. Moreover, the Company continues to assess 2009 and beyond to ensure the Company is prepared if the current credit market dislocation continues. The retail shopping sector has been negatively affected by recent economic conditions. These conditions have forced some weaker retailers, in some cases, to declare bankruptcy and/or close stores. Certain retailers have announced store closings even though they have not filed for bankruptcy protection. However, any of these particular store closings affecting the Company often represent a small percentage of the Company’s overall gross leasable area and the Company does not currently expect store closings to have a material adverse effect on the Company’s overall performance. The decline in market conditions has also had a negative effect on real estate transactional activity as it relates to the acquisition and sale of real estate assets. The Company believes that the lack of real estate transactions will continue throughout 2009 which will curtail the Company’s growth in the near term. CRITICAL ACCOUNTING POLICIES The Consolidated Financial Statements of the Company include the accounts of the Company, its wholly-owned subsidiaries and all entities in which the Company has a controlling interest, including where the Company has been determined to be a primary beneficiary of a variable interest entity in accordance with the provisions and guidance of Interpretation No. 46 (R), Consolidation of Variable Interest Entities, or meets certain criteria of a sole general partner or managing member in accordance with Emerging Issues Task Force (“EITF”) Issue 04-5, Investor’s Accounting for an Investment in a Limited Partnership when the Investor is the Sole General Partner and the Limited Partners have Certain Rights (“EITF 04-5”). The Company applies these provisions to each of its joint venture investments to determine whether the cost, equity or consolidation method of accounting is appropriate. The preparation of financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions in certain circumstances that affect amounts reported in the accompanying Consolidated Financial Statements and related notes. In preparing these financial statements, management has made its best estimates and assumptions that affect the reported amounts of assets and liabilities. These estimates are based on, but not limited to, historical results, industry standards and current economic conditions, giving due consideration to materiality. The most significant assumptions and estimates relate to revenue recognition and the recoverability of trade accounts receivable, depreciable lives, valuation of real estate and intangibles assets and liabilities, valuation of joint venture investments, marketable securities and other investments and realizability of deferred tax assets. Application of these assumptions requires the exercise of judgment as to future uncertainties, and, as a result, actual results could materially differ from these estimates. The Company is required to make subjective assessments as to whether there are impairments in the value of its real estate properties, investments in joint ventures, marketable securities and other investments. The Company’s reported net income is directly affected by management’s estimate of impairments and/or valuation allowances. Revenue Recognition and Accounts Receivable Base rental revenues from rental property are recognized on a straight-line basis over the terms of the related leases. Certain of these leases also provide for percentage rents based upon the level of sales achieved by the lessee. These percentage rents are recorded once the required sales level is achieved. Operating expense reimbursements are recognized as earned. Rental income may also include payments received in connection with lease termination agreements. In addition, leases typically provide for reimbursement to the Company of common area maintenance, real estate taxes and other operating expenses. The Company makes estimates of the uncollectability of its accounts receivable related to base rents, expense reimbursements and other revenues. The Company analyzes accounts receivable and historical bad debt levels, customer credit-worthiness and current economic trends when evaluating the adequacy of the allowance for doubtful accounts. In addition, tenants in bankruptcy are analyzed and estimates are made in connection with the expected recovery of pre- petition and post-petition claims. The Company’s reported net income is directly affected by management’s estimate of the collectability of accounts receivable. 47 Real Estate The Company’s investments in real estate properties are stated at cost, less accumulated depreciation and amortization. Expenditures for maintenance and repairs are charged to operations as incurred. Significant renovations and replacements, which improve and extend the life of the asset, are capitalized. Upon acquisition of operating real estate properties, the Company estimates the fair value of acquired tangible assets (primarily consisting of land, building, building improvements and tenant improvements) and identified intangible assets and liabilities (primarily consisting of above and below-market leases, in-place leases and tenant relationships), assumed debt and redeemable units issued in accordance with Statement of Financial Accounting Standards (“SFAS”) No. 141, Business Combinations. Based on these estimates, the Company allocates the purchase price to the applicable assets and liabilities. The Company utilizes methods similar to those used by independent appraisers in estimating the fair value of acquired assets and liabilities. The useful lives of amortizable intangible assets are evaluated each reporting period with any changes in estimated useful lives being accounted for over the revised remaining useful life. Depreciation and amortization are provided on the straight-line method over the estimated useful lives of the assets, as follows: Buildings and building improvements Fixtures, leasehold and tenant improvements (including certain identified intangible assets) 15 to 50 years Terms of leases or useful lives, whichever is shorter The Company is required to make subjective assessments as to the useful lives of its properties for purposes of determining the amount of depreciation to reflect on an annual basis with respect to those properties. These assessments have a direct impact on the Company’s net income. Real estate under development on the Company’s Consolidated Balance Sheets represents ground-up development of neighborhood and community shopping center projects which are subsequently sold upon completion and projects which the Company may hold as long-term investments. These assets are carried at cost. The cost of land and buildings under development includes specifically identifiable costs. The capitalized costs include pre-construction costs essential to the development of the property, development costs, construction costs, interest costs, real estate taxes, salaries and related costs of personnel directly involved and other costs incurred during the period of development. The Company ceases cost capitalization when the property is held available for occupancy upon substantial completion of tenant improvements, but no later than one year from the completion of major construction activity. If, in management’s opinion, the estimated net sales price of these assets is less than the net carrying value, an adjustment to the carrying value would be recorded to reflect the estimated fair value of the property. A gain on the sale of these assets is generally recognized using the full accrual method in accordance with the provisions of SFAS No. 66, Accounting for Real Estate Sales. On a continuous basis, management assesses whether there are any indicators, including property operating performance and general market conditions, that the value of the real estate properties (including any related amortizable intangible assets or liabilities) may be impaired. A property value is considered impaired only if management’s estimate of current and projected operating cash flows (undiscounted and without interest charges) of the property over its remaining useful life is less than the net carrying value of the property. Such cash flow projections consider factors such as expected future operating income, trends and prospects, as well as the effects of demand, competition and other factors. To the extent impairment has occurred, the carrying value of the property would be adjusted to an amount to reflect the estimated fair value of the property. When a real estate asset is identified by management as held-for-sale, the Company ceases depreciation of the asset and estimates the sales price of such asset net of selling costs. If, in management’s opinion, the net sales price of the asset is less than the net book value of such asset, an adjustment to the carrying value would be recorded to reflect the estimated fair value of the property. Investments in Unconsolidated Joint Ventures The Company accounts for its investments in unconsolidated joint ventures under the equity method of accounting as the Company exercises significant influence, but does not control, these entities. These investments are recorded initially at cost and are subsequently adjusted for cash contributions and distributions. Earnings for each investment are recognized in accordance with each respective investment agreement and, where applicable, are based upon an allocation of the investment’s net assets at book value as if the investment was hypothetically liquidated at the end of each reporting period. 48 The Company’s joint ventures and other real estate investments primarily consist of co-investments with institutional and other joint venture partners in neighborhood and community shopping center properties, consistent with its core business. These joint ventures typically obtain non-recourse third-party financing on their property investments, thus contractually limiting the Company’s exposure to losses to the amount of its equity investment, and, due to the lender’s exposure to losses, a lender typically will require a minimum level of equity in order to mitigate its risk. The Company’s exposure to losses associated with its unconsolidated joint ventures is primarily limited to its carrying value in these investments. The Company, on a selective basis, obtains unsecured financing for certain joint ventures. These unsecured financings are guaranteed by the Company with guarantees from the joint venture partners for their proportionate amounts of any guaranty payment the Company is obligated to make. On a continuous basis, management assesses whether there are any indicators, including property operating performance and general market conditions, that the value of the Company’s investments in unconsolidated joint ventures may be impaired. An investment’s value is impaired only if management’s estimate of the fair value of the investment is less than the carrying value of the investment and such difference is deemed to be other-than-temporary. To the extent impairment has occurred, the loss shall be measured as the excess of the carrying amount of the investment over the estimated fair value of the investment. The Company’s estimated fair values are based upon a discounted cash flow model for each specific property that includes all estimated cash inflows and outflows over a specified holding period. Capitalization rates and discount rates utilized in these models are based upon rates that the Company believes to be within a reasonable range of current market rates for each respective property. Marketable Securities The Company classifies its existing marketable equity securities as available-for-sale in accordance with the provisions of SFAS No. 115, Accounting for Certain Investments in Debt and Equity Securities. These securities are carried at fair market value with unrealized gains and losses reported in stockholders’ equity as a component of Accumulated other comprehensive income (“OCI”). Gains or losses on securities sold are based on the specific identification method. All debt securities are generally classified as held-to-maturity because the Company has the positive intent and ability to hold the securities to maturity. Held-to–maturity securities are stated at amortized cost, adjusted for amortization of premiums and accretion of discounts to maturity. Debt securities which contain conversion features are generally classified as available-for-sale. On a continuous basis, management assesses whether there are any indicators that the value of the Company’s marketable securities may be impaired. A marketable security is impaired if the fair value of the security is less than the carrying value of the security and such difference is deemed to be other-than-temporary. To the extent impairment has occurred, the loss shall be measured as the excess of the carrying amount of the security over the estimated fair value in the security. RESULTS OF OPERATIONS Comparison 2008 to 2007 2008 2007 Increase/ (Decrease) % change Revenues from rental property (1) . . . . . . . . . . . . . . $758.7 (all amounts in millions) $674.5 $84.2 Rental property expenses: (2) Rent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Real estate taxes . . . . . . . . . . . . . . . . . . . . . . . . . . Operating and maintenance . . . . . . . . . . . . . . . . . $ 13.4 98.0 104.7 $216.1 $ 12.1 82.5 89.1 $183.7 Depreciation and amortization (3) . . . . . . . . . . . . . . $204.3 $188.1 $ 1.3 15.5 15.6 $32.4 $16.2 12.5% 10.7% 18.8% 17.5% 17.6% 8.6% 49 (1) Revenues from rental property increased primarily from the combined effect of (i) the acquisition of operating properties during 2008 and 2007, providing incremental revenues of approximately $54.2 million, (ii) the completion of certain development and redevelopment projects and tenant buyouts providing incremental revenues of approximately $34.1 million for the year ended 2008 as compared to the corresponding period in 2007, partially offset by (iii) a decrease in revenues of approximately $4.1 million for the year ended December 31, 2008, as compared to the corresponding period in 2007, primarily resulting from the transfer of operating properties to various unconsolidated joint venture entities and the sale of certain properties during 2008 and 2007 and (iv) an overall occupancy decrease from the consolidated shopping center portfolio from 95.9% at December 31, 2007, to 93.2% at December 31, 2008. (2) Rental property expenses increased primarily due to operating property acquisitions during 2008 and 2007 which were partially offset by operating property dispositions including those transferred to various joint venture entities. (3) Depreciation and amortization increased primarily due to operating property acquisitions during 2008 and 2007 which were partially offset by operating property dispositions including those transferred to various joint venture entities. Mortgage and other financing income increased $4.1 million to $18.3 million for the year ended December 31, 2008, as compared to $14.2 million for the corresponding period in 2007. This increase is primarily due to an increase in interest income from new mortgage receivables entered into during 2008 and 2007. Management and other fee income decreased approximately $7.2 million for the year ended December 31, 2008, as compared to the corresponding period in 2007. This decrease is primarily due to a decrease in other transaction related fees of approximately $9.1 million, recognized during the year ended December 31, 2007, partially offset by an increase in property management fees of approximately $1.9 million for the year ended December 31, 2008. General and administrative expenses increased approximately $14.0 million for the year ended December 31, 2008, as compared to the corresponding period in 2007. This increase is primarily due to personnel-related costs, primarily due to the growth within the Company’s co-investment programs and the overall continued growth of the Company during 2008 and 2007. In addition, due to current economic conditions resulting in the lack of transactional activity within the real estate industry as a whole, the Company has accrued approximately $3.6 million at December 31, 2008, relating to severance costs associated with employees who have been terminated during January 2009. Interest, dividends and other investment income increased approximately $19.9 million for the year ended December 31, 2008, as compared to the corresponding period in 2007. This increase is primarily due to (i) an increase in realized gains of approximately $2.5 million resulting from the sale of certain marketable securities during 2008 as compared to the corresponding period in 2007, (ii) an increase in interest income of approximately $16.1 million, primarily resulting from interest earned on notes acquired in 2008 and (iii) an increase in dividend income of approximately $1.2 million primarily resulting from increased investments in marketable securities during 2008. Other expense, net decreased approximately $8.3 million to $2.2 million for the year ended December 31, 2008, as compared to $10.6 million for the corresponding period in 2007. This decrease is primarily due to (i) a reduction in Canadian withholding tax expense relating to a 2007 capital transaction from a Canadian preferred equity investment, partially offset by (ii) the receipt of fewer shares during 2008 as compared to 2007 of Sears Holding Corp. common stock received as partial settlement of Kmart pre-petition claims and (iii) the recognition of a $7.7 million unrealized decrease in the fair value of an embedded derivative instrument relating to the convertible option of certain debt securities. (Provision)/benefit for income taxes changed $45.9 million to a provision of $3.5 million for the year ended December 31, 2008, as compared to a benefit of $42.4 million for the corresponding period in 2007. This change is primarily due to (i) a tax provision of approximately $17.3 million, partially offset by a reduction of approximately $3.1 million in NOL valuation allowance from equity income recognized during 2008 in connection with the Albertson’s investment and (ii) a reduction of approximately $28.1 million of NOL valuation allowance during 2007. Income from other real estate investments increased $8.1 million for the year ended December 31, 2008, as compared to the corresponding period in 2007. This increase is primarily due to a gain of approximately $7.2 million during the year ended December 31, 2008, from the sale of the Company’s interest in a real estate company located in Mexico. Equity in income of real estate joint ventures, net for the year ended December 31, 2008, was approximately $132.2 million as compared to $173.4 million for the corresponding period in 2007. This reduction of approximately $41.2 million is primarily the result of (i) a decrease in equity in income of approximately $47.1 million from the Kimco Retail Opportunity Portfolio (“KROP”) joint venture investment primarily due to a decrease in profit participation from the 50 sale/transfer of operating properties for the year ended December 31, 2008, as compared to the corresponding period in 2007, (ii) a decrease in equity in income of approximately $25.2 million from the KIR joint venture investment primarily resulting from fewer gains on sales of operating properties during the year ended December 31, 2008, as compared to the corresponding period in 2007, (iii) impairment charges during 2008 of approximately $11.2 million, before income tax benefit, relating to certain joint venture properties held by the KimPru joint venture that are deemed held-for-sale or were transitioned to held-for-use properties, (iv) lower gains on sale of approximately $21.3 million for 2008 as compared to 2007, partially offset by (v) an increase in equity in income of approximately $67.4 million from the Albertson’s joint venture investment primarily resulting from gains on sale of 121 properties during 2008 as compared to 2007 and (vi) growth within the Company’s other various real estate joint ventures due to additional capital investments for the acquisition of additional operating properties by ventures throughout 2007 and the year ended December 31, 2008. During 2008, the Company sold, in separate transactions, (i) two completed merchant building projects, (ii) 21 out-parcels, (iii) a partial sale of one project and (iv) a partnership interest in one project for aggregate proceeds of approximately $73.5 million and received approximately $4.1 million of proceeds from completed earn-out requirements on three previously sold merchant building projects. These sales resulted in gains of approximately $21.9 million, after income taxes of $14.6 million. During 2007, the Company sold, in separate transactions, (i) four completed merchant building projects, (ii) 26 out- parcels, (iii) 74.3 acres of undeveloped land and (iv) completed partial sales of two projects, for aggregate total proceeds of approximately $310.5 million and approximately $3.3 million of proceeds from completed earn-out requirements on previously sold projects. These transactions resulted in gains of approximately $24.1 million, after income taxes of $16.0 million. For the year ended December 31, 2008, the Company recognized non-cash impairment charges of approximately $114.8 million, net of income tax benefit of approximately $31.1 million, of which approximately $105.1 million of these charges where taken in the fourth quarter of 2008. Approximately $92.7 million of the total non-cash impairment charges for the year ended December 31, 2008, were due to the decline in value of certain marketable equity securities and other investments that were deemed to be other- than-temporary. Of the $92.7 million, approximately $83.1 million of these impairment charges were taken at the end of the fourth quarter of 2008 resulting from the unprecedented deterioration of the equity markets during the fourth quarter and the uncertainty of their future recoverability. The Company recognized a non-cash impairment charge of $15.5 million against the carrying value of its investment in its unconsolidated joint ventures with PREI, reflecting an other-than-temporary decline in the fair value of its investment resulting from further significant declines in the real estate markets during the fourth quarter of 2008. Also, impairments of approximately $6.6 million were recognized on real estate development projects including Plantations Crossing located in Middleburg, FL and Miramar Town Center located in Miramar, FL. These development project impairment charges are the result of adverse changes in local market conditions and the uncertainty of their recovery in the future. The Company will continue to assess the value of all its assets on an on-going basis. Based on these assessments, the Company may determine that a decline in value for one or more of its investments may be other-than-temporary or permanent and would therefore write-down its cost basis accordingly. During 2008, the Company disposed of seven operating properties and a portion of four operating properties, in separate transactions, for an aggregate sales price of approximately $73.0 million, which resulted in an aggregate gain of approximately $20.0 million. In addition, the Company partially recognized deferred gains of approximately $1.2 million on three properties relating to their transfer and partial sale in connection with the Kimco Income Fund II transaction described below. During 2007 the Company transferred 11 operating properties to a wholly-owned consolidated entity, Kimco Income Fund II (“KIF II”), for an aggregate purchase price of approximately $278.2 million, including non-recourse mortgage debt of $180.9 million, encumbering 11 of the properties. During 2008, the Company transferred an additional three properties for $73.9 million, including $50.6 million in non-recourse mortgage debt. During 2008 the Company sold a 26.4% non-controlling ownership interest in the entity to third parties for approximately $32.5 million, which approximated the Company’s cost. The Company continues to consolidate this entity. Additionally, during 2008, the Company disposed of an operating property for approximately $21.4 million. The Company provided seller financing for approximately $3.6 million, which bears interest at 10% per annum and is scheduled to mature on May 1, 2011. Due to the terms of this financing the Company has deferred its gain of $3.7 million from this sale. 51 Additionally, during 2008, a consolidated joint venture in which the Company had a preferred equity investment disposed of a property for a sales price of approximately $35.0 million. As a result of this capital transaction, the Company received approximately $3.5 million of profit participation, before minority interest of approximately $1.1 million. This profit participation has been recorded as income from other real estate investments and is reflected in Income from discontinued operating properties in the Company’s Consolidated Statements of Income. During 2007, the Company (i) disposed of six operating properties and completed partial sales of three operating properties, in separate transactions, for an aggregate sales price of approximately $40.0 million, which resulted in an aggregate net gain of approximately $6.4 million, after income taxes of approximately $1.6 million and (ii) transferred one operating property, which was acquired in the first quarter of 2007, to a joint venture in which the Company holds a 15% non-controlling ownership interest for an aggregate price of approximately $4.5 million, which represented the net book value. Additionally, during 2007, two consolidated joint ventures in which the Company had preferred equity investments disposed of, in separate transactions, their respective properties for an aggregate sales price of approximately $66.5 million. As a result of these capital transactions, the Company received approximately $22.1 million of profit participation, before minority interest of approximately $5.6 million. This profit participation has been recorded as income from other real estate investments and is reflected in Income from discontinued operating properties in the Company’s Consolidated Statements of Income. Net income for the year ended December 31, 2008, was $249.9 million or $0.78 on a diluted per share basis as compared to $442.8 million or $1.65 on a diluted per share basis for the corresponding period in 2007. This change is primarily attributable to (i) the recognition of non-cash impairment charges aggregating approximately $121.5 million, net of income tax benefit, resulting from continuing declines in the equity securities and real estate markets, (ii) recognition of an extraordinary gain of approximately $50.3 million, net of income tax, in 2007, relating to the Albertson’s joint venture, (iii) a reduction of Equity in income of real estate joint ventures of approximately $41.2 million, primarily due to a decrease in profit participation and gain on sales of operating properties during 2008 as compared to 2007, (iv) a decrease in the reduction of NOL valuation allowance and the recording of a provision from equity in income recognized during 2008 in connection with the Albertson’s investment, partially offset by (v) an increase in revenues from rental properties primarily due to acquisitions of operating properties during 2008 and 2007. Comparison 2007 to 2006 2007 2006 Increase/ (Decrease) % change Revenues from rental property (1) . . . . . . . . . . . . . . $674.5 (all amounts in millions) $580.6 $93.9 Rental property expenses: (2) Rent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Real estate taxes . . . . . . . . . . . . . . . . . . . . . . . . . . Operating and maintenance . . . . . . . . . . . . . . . . . $ 12.1 82.5 89.1 $183.7 $ 11.5 73.6 72.0 $157.1 Depreciation and amortization (3) . . . . . . . . . . . . . . $188.1 $137.8 $ 0.6 8.9 17.1 $26.6 $50.3 16.2% 5.2% 12.1% 23.8% 16.9% 36.5% (1) Revenues from rental property increased primarily from the combined effect of (i) the acquisition of operating properties during 2007 and 2006, providing incremental revenues of approximately $85.5 million, (ii) an overall occupancy increase from the consolidated shopping center portfolio to 95.9% at December 31, 2007, as compared to 95.1% at December 31, 2006, due to growth in rental rates from renewing expiring leases, the completion of certain redevelopment and development projects and tenant buyouts providing incremental revenues of approximately $14.6 million for the year ended December 31, 2007, as compared to the corresponding period in 2006, offset by (iii) a decrease in revenues of approximately $6.2 million for the year ended December 31, 2007, as compared to the corresponding period in 2006, resulting from the transfer of operating properties to various unconsolidated joint venture entities, and the sale of certain properties during 2007 and 2006. (2) Rental property expenses increased primarily due to operating property acquisitions during 2007 and 2006, which were partially offset by operating property dispositions including those transferred to various joint venture entities. 52 (3) Depreciation and amortization increased primarily due to operating property acquisitions during 2007 and 2006, which were partially offset by operating property dispositions including those transferred to various joint venture entities. Mortgage and other financing income decreased $4.6 million to $14.2 million for the year ended December 31, 2007, as compared to $18.8 million for the corresponding period in 2006. This decrease is primarily due to the recognition of accretion income of approximately $6.2 million, resulting from the early prepayment of a mortgage receivable in 2006 partially offset by an overall increase in interest income on mortgage receivables entered into in 2007 and 2006. Management and other fee income increased approximately $14.2 million for the year ended December 31, 2007, as compared to the corresponding period in 2006. This increase is primarily due to increased property management fees and other transaction related fees related to the growth in the Company’s co-investment programs. General and administrative expenses increased approximately $27.4 million for the year ended December 31, 2007, as compared to the corresponding period in 2006. This increase is primarily due to personnel-related costs, primarily due to growth within the Company’s co-investment programs and the overall continued growth of the Company. Interest, dividends and other investment income decreased approximately $19.6 million for the year ended December 31, 2007, as compared to the corresponding period in 2006. This decrease is primarily due to a decrease in realized gains resulting from the sale of certain marketable securities during 2007 as compared to the corresponding period in 2006. Other (expense)/income, net decreased approximately $19.5 million to $10.6 million of an expense for the year ended December 31, 2007, as compared to $8.9 million in income for the corresponding period in 2006. This decrease is primarily due to (i) the receipt of fewer shares during 2007 as compared to 2006 of Sears Holding Corp. common stock received as partial settlement of Kmart pre-petition claims and (ii) an increase in Canadian withholding charges on profit participation proceeds received during 2007 relating to capital transactions from a Canadian preferred equity investment. Interest expense increased approximately $43.0 million for the year ended December 31, 2007, as compared to the corresponding period in 2006. This increase is due to higher interest rates and higher outstanding levels of debt during the year ended December 31, 2007, as compared to 2006. Benefit for income taxes increased $46.8 million for the year ended December 31, 2007, as compared to the corresponding period in 2006. This increase is primarily due to the reduction of approximately $31.2 million of NOL valuation allowance and a tax benefit of approximately $10.1 million from operating losses recognized in connection with the Albertson’s investment. Equity in income of real estate joint ventures, net increased $67.8 million to $173.4 million for the year ended December 31, 2007, as compared to $105.5 million for the corresponding period in 2006. This increase is primarily the result of (i) an increase in equity in income from the Kimco Realty Opportunity Portfolio (“KROP”) joint venture investment primarily resulting from profit participation of approximately $39.3 million and gains on sale/transfer of operating properties during 2007 of which the Company’s share of gains were $12.8 million for the year ended December 31, 2007, (ii) an increase in equity in income from the Kimco Income Opportunity Portfolio (“KIR”) joint venture investment primarily resulting from gains on sale of operating properties during 2007 of which the Company’s share of gains was $20.7 million for the year ended December 31, 2007, and (iii) the Company’s growth of its various other real estate joint ventures due to additional capital investments for the acquisition of additional operating properties by the ventures throughout 2007 and 2006, partially offset by net operating losses and excess cash distribution from the Albertson’s joint venture of approximately $7.9 million during 2007. During 2007, the Company sold, in separate transactions, (i) four completed merchant building projects, (ii) 26 out- parcels, (iii) 74.3 acres of undeveloped land and (iv) completed partial sales of two projects, for aggregate total proceeds of approximately $310.5 million and approximately $3.3 million of proceeds from completed earn-out requirements on previously sold projects. These transactions resulted in gains of approximately $24.1 million, after income taxes of $16.0 million. As part of the Company’s ongoing analysis of its merchant building projects, the Company has determined that for two of its projects, located in Jacksonville, FL and Anchorage, AK, the recoverable value will not exceed their estimated cost. This is primarily due to adverse changes in local market conditions and the uncertainty of their recovery in the future. As a result, the Company has recorded an aggregate pre-tax adjustment of property carrying value on these projects for the year ended December 31, 2007, of $8.5 million, representing the excess of the carrying value of the projects over their estimated fair value. 53 During 2006, the Company sold six recently completed merchant building projects, its partnership interest in one project and 30 out-parcels, in separate transactions, for approximately $260.0 million. These sales resulted in gains of approximately $25.1 million, after income taxes of $12.2 million. These gains exclude approximately $1.1 million of gain relating to one project, which was deferred due to the Company’s continued ownership interest. During 2007, the Company (i) disposed of six operating properties and completed partial sales of three operating properties, in separate transactions, for an aggregate sales price of approximately $40.0 million, which resulted in an aggregate net gain of approximately $6.4 million, after income tax of approximately $1.6 million and (ii) transferred one operating property, which was acquired in the first quarter of 2007, to a joint venture in which the Company holds a 15% non-controlling ownership interest for an aggregate price of approximately $4.5 million, which represented the net book value. Additionally, during 2007, two consolidated joint ventures in which the Company had preferred equity investments disposed of, in separate transactions, their respective properties for an aggregate sales price of approximately $66.5 million. As a result of these capital transactions, the Company received approximately $22.1 million of profit participation, before minority interest of approximately $5.6 million. This profit participation has been recorded as income from other real estate investments and is reflected in Income from discontinued operating properties in the Company’s Consolidated Statements of Income. During 2006, the Company disposed of (i) 28 operating properties and one ground lease for an aggregate sales price of $270.5 million, which resulted in an aggregate net gain of approximately $71.7 million, net of income taxes of $2.8 million relating to the sale of two properties, and (ii) transferred five operating properties, to joint ventures in which the Company has 20% non-controlling interests for an aggregate price of approximately $95.4 million, which resulted in a gain of approximately $1.4 million from one transferred property. Net income for the year ended December 31, 2007 was $442.8 million or $1.65 on a diluted per share basis as compared to $428.3 million or $1.70 on a diluted per share basis for the corresponding period in 2006. This change is primarily attributable to (i) an increase in revenues from rental properties primarily due to acquisitions of operating properties during 2007 and 2006, (ii) an increase in equity in income of real estate joint ventures achieved from profit participation and gains on sale of joint venture operating properties and additional capital investments in the Company’s joint venture programs for the acquisition of additional operating properties throughout 2007 and 2006, (iii) earnings of $75.5 million related to the Albertson’s investment monetization, partially offset by (iv) a decrease in income resulting from the sale of certain marketable securities during the corresponding period in 2006 and (v) a decrease in gains on sale of operating properties in 2007 as compared to 2006. TENANT CONCENTRATIONS The Company seeks to reduce its operating and leasing risks through diversification achieved by the geographic distribution of its properties, avoiding dependence on any single property and a large tenant base. At December 31, 2008, the Company’s five largest tenants were The Home Depot, TJX Companies, Sears Holdings, Kohl’s and Wal-Mart, which represented approximately 3.3%, 2.8%, 2.5%, 2.2% and 1.8%, respectively, of the Company’s annualized base rental revenues, including the proportionate share of base rental revenues from properties in which the Company has less than a 100% economic interest. LIQUIDITY AND CAPITAL RESOURCES The Company’s capital resources include accessing the public debt and equity capital markets, when available, mortgage and construction loan financing and immediate access to unsecured revolving credit facilities with aggregate bank commitments of approximately $1.7 billion. The Company’s cash flow activities are summarized as follows (in millions): Year Ended December 31, 2007 $ 666.0 $ (1,507.6) 584.1 $ 2008 $ 567.6 $ (781.4) $ 262.4 2006 $ 455.6 $ (246.2) $ 59.4 Net cash flow provided by operating activities . . . . . . . Net cash flow used for investing activities . . . . . . . . . . Net cash flow provided by financing activities . . . . . . . 54 OPERATING ACTIVITIES Cash flows provided from operating activities for the year ended December 31, 2008, were approximately $567.6 million, as compared to approximately $666.0 million for the comparable period in 2007. The change of approximately $98.4 million is primarily attributable to (i) a decrease in distributions from joint ventures resulting from a decrease of approximately $66.2 million in distributions from the Albertson’s investment during 2008 as compared to 2007 and a decrease of approximately $74.8 million in distributions from other joint venture investments, primarily from the KROP joint venture investment, which was due to a decrease in profit participation from the sale/transfer of operating properties for the year ended December 31, 2008, as compared to the corresponding period in 2007, partially offset by increased cash flows due to (ii) the acquisition of properties during 2008 and 2007 and (iii) growth in rental rates from lease renewals and the completion of certain re-development and development projects. Recently, the capital and credit markets have become increasingly volatile and constrained as a result of adverse conditions that have caused the failure and near failure of a number of large financial services companies. If the capital and credit markets continue to experience volatility and the availability of funds remains limited, the Company will incur increased costs associated with issuing or obtaining debt. In addition, it is possible that the Company’s ability to access the capital and credit markets may be limited by these or other factors. Notwithstanding the foregoing, at this time the Company anticipates that cash flows from operating activities will continue to provide adequate capital to fund its operating and administrative expenses, regular debt service obligations and dividend payments in accordance with REIT requirements in both the short term and long term. The Company continually evaluates its debt maturities, and, based on management’s current assessment, believes it has viable financing and refinancing alternatives that will not materially adversely impact its expected financial results. Although the credit environment has become much more constrained since the third quarter of 2008, the Company continues to pursue opportunities with large commercial U.S. and global banks, select life insurance companies and certain regional and local banks. The Company has noticed a trend that the approval process from lenders has slowed, while pricing and loan-to-value ratios remain dependent on specific deal terms, in general, spreads are higher and loan- to-values are lower, but the lenders are continuing to complete financing agreements. Moreover, the Company continues to assess 2009 and beyond to ensure the Company is prepared if the current credit market dislocation continues. Debt maturities for 2009 consist of: $451.9 million of consolidated debt; $756.1 million of unconsolidated joint venture debt; and $245.0 million of preferred equity debt, assuming the utilization of extension options where available. The 2009 consolidated debt maturities are anticipated to be repaid with operating cash flows, borrowings from the Company’s credit facilities, which at December 31, 2008, the Company had approximately $1.0 billion available under these credit facilities, and debt refinancings. The 2009 unconsolidated joint venture and preferred equity debt maturities are anticipated to be repaid through debt refinancing and partner capital contributions, as deemed appropriate. The Company anticipates that cash on hand, borrowings under its revolving credit facilities, issuance of equity and public debt, as well as other debt and equity alternatives, will provide the necessary capital required by the Company. Net cash flow provided by operating activities for the year ended December 31, 2008, was primarily attributable to (i) cash flow from the diverse portfolio of rental properties, (ii) the acquisition of operating properties during 2008 and 2007, (iii) new leasing, expansion and re-tenanting of core portfolio properties and (iv) contributions from the Company’s joint venture and Preferred Equity programs. INVESTING ACTIVITIES Cash flows used for investing activities for the year ended December 31, 2008, were approximately $781.4 million, as compared to approximately $1.5 billion for the comparable period in 2007. This decrease in cash utilization of approximately $726.3 million resulted primarily from decreases in (i) the acquisition of and improvements to operating real estate, (ii) the acquisition of and improvements to real estate under development and (iii) the Company’s investment and advances to joint ventures, partially offset by (iv) an increase in cash utilized for investments in marketable securities including the acquisition of the Valad convertible notes and equity securities during 2008 and (v) a decrease in proceeds from the sale of development properties during the 2008 as compared to the corresponding period in 2007. 55 Acquisitions of and Improvements to Operating Real Estate During the year ended December 31, 2008, the Company expended approximately $266.2 million towards acquisition of and improvements to operating real estate including $68.9 million expended in connection with redevelopments and re-tenanting projects as described below. (See Note 3 of the Notes to the Consolidated Financial Statements included in this annual report on Form 10-K.) The Company has an ongoing program to reformat and re-tenant its properties to maintain or enhance its competitive position in the marketplace. The Company anticipates its capital commitment toward these and other redevelopment projects during 2009 will be approximately $50.0 million to $80.0 million. The funding of these capital requirements will be provided by cash flow from operating activities and availability under the Company’s revolving lines of credit. Investments and Advances to Real Estate Joint Ventures During the year ended December 31, 2008, the Company expended approximately $219.9 million for investments and advances to real estate joint ventures and received approximately $118.7 million from reimbursements of advances to real estate joint ventures. (See Note 7 of the Notes to the Consolidated Financial Statements included in this annual report on Form 10-K.) Acquisitions of and Improvements to Real Estate Under Development The Company is engaged in ground-up development projects which consist of (i) merchant building through the Company’s wholly-owned taxable REIT subsidiaries, which develop neighborhood and community shopping centers and the subsequent sale thereof upon completion, (ii) U.S. ground-up development projects which will be held as long-term investments by the Company and (iii) various ground-up development projects located in Latin America for long-term investment (see Recent Developments - International Real Estate Investments and Note 3 of the Notes to Consolidated Financial Statements included in this annual report on Form 10-K). The ground-up development projects generally have significant pre-leasing prior to the commencement of construction. As of December 31, 2008, the Company had in progress a total of 47 ground-up development projects including 11 merchant building projects, one U.S. ground-up development project, 29 ground-up development projects located throughout Mexico, three ground-up development projects located in Chile, two ground-up development projects located in Brazil and one ground-up development project located in Peru. During the year ended December 31, 2008, the Company expended approximately $389.0 million in connection with construction costs and the purchase of land related to ground-up development projects. The Company anticipates its capital commitment during 2009 toward these and other development projects will be approximately $150.0 million to $200.0 million. The proceeds from the sales of completed ground-up development projects, proceeds from construction loans and availability under the Company’s revolving lines of credit are expected to be sufficient to fund these anticipated capital requirements. Dispositions and Transfers During the year ended December 31, 2008, the Company received net proceeds of approximately $176.3 million relating to the sale of various operating properties and ground-up development projects and approximately $32.4 million from the transfer of operating properties to various joint ventures. (See Notes 3 and 7 of the Notes to the Consolidated Financial Statements included in this annual report on Form 10-K.) FINANCING ACTIVITIES Cash flows provided from financing activities for the year ended December 31, 2008, were approximately $262.4 million, as compared to approximately $584.1 million for the comparable period in 2007. This decrease of approximately $321.7 million resulted primarily from the (i) decrease in proceeds provided by mortgage/construction loan financing of approximately $337.5 million, (ii) a decrease of $300.0 million in proceeds from the issuance of unsecured senior notes and (iii) the increase in dividends paid during 2008 as compared to the corresponding period in 2007, offset by (iv) an increase in borrowings under the Company’s unsecured revolving credit facilities of approximately $185.0 million and (v) a decrease in repayment of unsecured senior notes and repayments of borrowings under unsecured revolving credit facilities of approximately $187.5 million. 56 The Company intends to maintain strong debt service coverage and fixed charge coverage ratios as part of its commitment to maintaining its investment-grade debt ratings. The Company may, from time-to-time, seek to obtain funds through additional common and preferred equity offerings, unsecured debt financings and/or mortgage/construction loan financings and other capital alternatives in a manner consistent with its intention to operate with a conservative debt structure. Since the completion of the Company’s IPO in 1991, the Company has utilized the public debt and equity markets as its principal source of capital for its expansion needs. Since the IPO, the Company has completed additional offerings of its public unsecured debt and equity, raising in the aggregate over $6.1 billion. Proceeds from public capital market activities have been used for the purposes of, among other things, repaying indebtedness, acquiring interests in neighborhood and community shopping centers, funding ground-up development projects, expanding and improving properties in the portfolio and other investments. These markets have experienced extreme volatility and deterioration since the third quarter 2008. As available, the Company will continue to access these markets. In March 2006, the Company was added to the S & P 500 Index, an index containing the stock of 500 Large Cap corporations, most of which are U.S. corporations. The Company has a $1.5 billion unsecured U.S. revolving credit facility (the “U.S. Credit Facility”) with a group of banks, which is scheduled to expire in October 2011. The Company has a one-year extension option related to this facility. This credit facility has made available funds to finance general corporate purposes, including (i) property acquisitions, (ii) investments in the Company’s institutional management programs, (iii) development and redevelopment costs and (iv) any short-term working capital requirements, including managing the Company’s debt maturities. Interest on borrowings under the U.S. Credit Facility accrues at LIBOR plus 0.425% and fluctuates in accordance with changes in the Company’s senior debt ratings. As part of this U.S. Credit Facility, the Company has a competitive bid option whereby the Company may auction up to $750.0 million of its requested borrowings to the bank group. This competitive bid option provides the Company the opportunity to obtain pricing below the currently stated spread. A facility fee of 0.15% per annum is payable quarterly in arrears. As part of the U.S. Credit Facility, the Company has a $200.0 million sub-limit which provides it the opportunity to borrow in alternative currencies such as Pounds Sterling, Japanese Yen or Euros. As of December 31, 2008, there was $675.0 million outstanding and $23.5 million in letter of credit appropriations under this credit facility. Pursuant to the terms of the U.S. Credit Facility, the Company, among other things, is subject to maintenance of various covenants. The Company is currently not in violation of these covenants. The financial covenants for the U.S. Credit Facility are as follows: Covenant Total Indebtedness to Gross Asset Value (“GAV”) . . . . . . . . . . . . . . . Total Priority Indebtedness to GAV . . . . . . . . . . . . . . . . . . . . . . . . . . . Unencumbered Asset Net Operating Income to Total Unsecured Interest Expense . . . . . . . . . . . . . . . . . . . . . . . . . Fixed Charge Total Adjusted EBITDA to Total Debt Service . . . . . . . Limitation of Investments, Loans and Advances . . . . . . . . . . . . . . . . . Must Be <60% <35% As of 12/31/08 47% 11% >1.75x >1.50x <30% of GAV 2.77x 2.57x 18% of GAV For a full description of the US Credit Facility’s covenants refer to the Credit Agreement dated as of October 25, 2007 filed in the Company’s Current Report on Form 8-K dated October 25, 2007. The Company also has a three-year CAD $250.0 million unsecured credit facility with a group of banks. This facility bore interest at the CDOR Rate, as defined, plus 0.45%, and was scheduled to expire in March 2008. During October 2007, the facility was amended to modify the covenant package to conform to the Company’s U.S. Credit Facility. The facility was further amended in January 2008, to extend the maturity date to 2011, with an additional one-year extension option, at a reduced rate of CDOR plus 0.425%, subject to change in accordance with the Company’s senior debt ratings. This facility also permits U.S. dollar denominated borrowings. Proceeds from this facility are used for general corporate purposes, including the funding of Canadian denominated investments. As of December 31, 2008, there was CAD $40.0 million (approximately USD $32.7 million) outstanding balance under this credit facility. The Canadian facility covenants are the same as the U.S. Credit Facility covenants described above. Additionally, the Company had a three-year MXP 500.0 million unsecured revolving credit facility which bore interest at the TIIE Rate, as defined therein, plus 1.00%, subject to change in accordance with the Company’s senior debt ratings, and was scheduled to mature in May 2008. During March 2008, the Company obtained a MXP 1.0 billion term loan, which bears interest at a rate of 8.58%, subject to change in accordance with the Company’s senior debt ratings, and is scheduled to mature in March 2013. The Company utilized proceeds from this term loan to fully repay the outstanding balance of the MXP 500.0 million unsecured revolving credit facility, which has been terminated. Remaining proceeds 57 from this term loan were used for funding MXP denominated investments. As of December 31, 2008, the outstanding balance on this term loan was MXP 1.0 billion (approximately USD $73.9 million). The Mexican term loan covenants are the same as the U.S. and Canadian Credit Facilities covenants described above. The Company has a Medium Term Notes (“MTN”) program pursuant to which it may, from time-to-time, offer for sale its senior unsecured debt for any general corporate purposes, including (i) funding specific liquidity requirements in its business, including property acquisitions, development and redevelopment costs and (ii) managing the Company’s debt maturities. (See Note 11 of the Notes to Consolidated Financial Statements included in this annual report on Form 10-K.) The Company’s supplemental indenture governing its medium term notes and senior notes contains the following covenants, all of which the Company is compliant with: Covenant Consolidated Indebtedness to Total Assets . . . . . . . . . . . . . . . . . . . . . Consolidated Secured Indebtedness to Total Assets . . . . . . . . . . . . . . Consolidated Income Available for Debt Service to maximum Must Be <60% <40% As of 12/31/08 49% 11% Annual Service Charge . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . >1.50x Unencumbered Total Asset Value to Consolidated Unsecured Indebtedness . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . >1.50x 2.9x 2.1x For a full description of the Indenture’s covenants refer to the Indenture dated September 1, 1993, First Supplemental Indenture dated August 4, 1994, the Second Supplemental Indenture dated April 7, 1995, and the Third Supplemental Indenture dated June 2, 2006, as filed with the SEC. See Exhibits Index on page 70, for specific filing information. During the year ended December 31, 2008, the Company repaid its $100.0 million 3.95% medium term notes, which matured on August 5, 2008, and its $25.0 million 7.2% senior notes, which matured on September 15, 2008. In addition to the public equity and debt markets as capital sources, the Company may, from time-to-time, obtain mortgage financing on selected properties and construction loans to partially fund the capital needs of its ground-up development projects. As of December 31, 2008, the Company had over 390 unencumbered property interests in its portfolio. During 2008, the Company (i) obtained an aggregate of approximately $16.7 million of non-recourse mortgage debt on three operating properties, (ii) assumed approximately $101.1 million of individual non-recourse mortgage debt relating to the acquisition of five operating properties, including approximately $0.8 million of fair value debt adjustments and (iii) paid off approximately $73.4 million of individual non-recourse mortgage debt that encumbered 11 operating properties. During 2008, the Company obtained individual construction loans on three merchant building projects. Additionally, the Company repaid a construction loan on one merchant building project. At December 31, 2008, total loan commitments on the Company’s 16 outstanding construction loans aggregated approximately $364.2 million of which approximately $268.3 million has been funded. These loans have scheduled maturities ranging from two months to 42 months and bear interest at rates ranging from 1.81% to 3.19% at December 31, 2008. Approximately $194.0 million of the outstanding loan balance matures in 2009. These maturing loans are anticipated to be repaid with operating cash flows, borrowings under the Company’s credit facilities and additional debt financings. In addition, the Company may pursue or exercise existing extension options with lenders where available. During May 2006, the Company filed a shelf registration statement on Form S-3ASR, which is effective for a term of three-years, for unlimited future offerings, from time-to-time, of debt securities, preferred stock, depositary shares, common stock and common stock warrants. During September 2008, the Company completed a primary public stock offering of 11,500,000 shares of the Company’s common stock. The net proceeds from this sale of common stock, totaling approximately $409.4 million (after related transaction costs of $0.6 million) were used to partially repay the outstanding balance under the Company’s U.S. revolving credit facility. During 2008, the Company received approximately $38.3 million through employee stock option exercises and the dividend reinvestment program. 58 In connection with its intention to continue to qualify as a REIT for federal income tax purposes, the Company expects to continue paying regular dividends to its stockholders. These dividends will be paid from operating cash flows, The Company’s Board of Directors will continue to evaluate the Company’s dividend policy on a quarterly basis as they monitor sources of capital and evaluate the impact of the economy and capital markets availability on operating fundamentals. Since cash used to pay dividends reduces amounts available for capital investment, the Company generally intends to maintain a conservative dividend payout ratio, reserving such amounts as it considers necessary for the expansion and renovation of shopping centers in its portfolio, debt reduction, the acquisition of interests in new properties and other investments as suitable opportunities arise and such other factors as the Board of Directors considers appropriate. Cash dividends paid increased to $469.0 million in 2008, compared to $384.5 million in 2007 and $332.6 million in 2006. Although the Company receives substantially all of its rental payments on a monthly basis, it generally intends to continue paying dividends quarterly. Amounts accumulated in advance of each quarterly distribution will be invested by the Company in short-term money market or other suitable instruments. The Company’s Board of Directors declared a quarterly dividend of $0.44 per common share payable to shareholders of record on January 2, 2009, which was paid on January 15, 2009. In addition, the Board of Directors declared a regular quarterly cash dividend of $0.44 per common share payable April 15, 2009 to shareholders of record on April 6, 2009. CONTRACTUAL OBLIGATIONS AND OTHER COMMITMENTS The Company has debt obligations relating to its revolving credit facilities, MTNs, senior notes, mortgages and construction loans with maturities ranging from less than one year to 27 years. As of December 31, 2008, the Company’s total debt had a weighted average term to maturity of approximately 4.5 years. In addition, the Company has non- cancelable operating leases pertaining to its shopping center portfolio. As of December 31, 2008, the Company has 48 shopping center properties that are subject to long-term ground leases where a third party owns and has leased the underlying land to the Company to construct and/or operate a shopping center. In addition, the Company has 16 non- cancelable operating leases pertaining to its retail store lease portfolio. The following table summarizes the Company’s debt maturities, excluding extension options, and obligations under non-cancelable operating leases as of December 31, 2008 (in millions): Long-Term Debt- Principal(1). . . . . . . . . Long-Term Debt- Interest(2) . . . . . . . . . . Operating Leases . . . . . . . . . . . . . . . . . . Ground Leases . . . . . . . . . . . . . . . . . Retail Store Leases . . . . . . . . . . . . . . 2009 $566.7 $200.0 2010 $346.5 $183.4 2011 $ 1,112.8 $ 157.5 2012 $293.8 $141.2 2013 $599.7 $107.2 Thereafter $ 1,619.6 $ 134.5 Total $ 4,539.1 $ 923.8 $ 10.9 3.7 $ $ $ 8.9 3.7 $ $ 6.7 3.1 $ $ 6.0 2.1 $ $ 5.3 1.3 $ 108.7 0.5 $ $ 146.5 14.4 $ (1) maturities utilized do not reflect extension options, which range from six months to two years. (2) for loans which have interest at floating rates, future interest expense was calculated using the rate as of December 31, 2008. The Company has $50.0 million of medium term notes, $130.0 million of senior unsecured notes, $6.1 of unsecured notes payable, $173.6 million of mortgage debt and $194.0 million of construction loans scheduled to mature in 2009. The Company anticipates satisfying these maturities with a combination of operating cash flows, its unsecured revolving credit facilities, refinancing of debt, new debt issuances, when available, and the sale of completed ground-up development projects. The Company has issued letters of credit in connection with completion and repayment guarantees for construction loans encumbering certain of the Company’s ground-up development projects and guaranty of payment related to the Company’s insurance program. These letters of credit aggregate approximately $34.3 million. During August 2008, KimPru entered into a new $650.0 million credit facility which matures in August 2009, with the option to extend for one year, and bears interest at a rate of LIBOR plus 1.25%. KimPru is obligated to pay down a minimum of $165.0 million, among other requirements, in order to exercise the one-year extension option. The required pay down is expected to be sourced from property sales, other debt financings and/or capital contributions by the partners. This facility is guaranteed by the Company with a guarantee from PREI to the Company for 85% of any guaranty payment the Company is obligated to make. Proceeds from this new credit facility were used to repay the 59 outstanding balance of $658.7 million under an existing $1.2 billion credit facility, which was scheduled to mature in October 2008 and bore interest at a rate of LIBOR plus 0.45%. As of December 31, 2008, the outstanding balance on the new credit facility was $650.0 million. During September 2008, a joint venture in which the Company has a non-controlling ownership interest obtained a $37.0 million mortgage loan, which is jointly and severally guaranteed by the Company and the joint venture partner, with a commitment of up to $37.0 million of which $26.9 million was outstanding as of December 31, 2008. This loan bears interest at 6.375% and is scheduled to mature in October 2019. During October 2008, a joint venture in which the Company has a non-controlling ownership interest entered into an extension and modification agreement for a $28.0 million term loan. The loan is guaranteed by the Company, with a commitment of up to $28.0 million of which $28.0 million was outstanding as of December 31, 2008. This loan bears interest at LIBOR plus 1.65%, which was 2.09% at December 31, 2008, and is scheduled to mature in March 2009. The Company is currently negotiating with lenders regarding extending or refinancing this debt. During June 2007, the Company entered into a joint venture, in which the Company has a non-controlling ownership interest, and acquired all of the common stock of InTown Suites Management, Inc. This investment was funded with approximately $186.0 million of new cross-collateralized non-recourse mortgage debt with a fixed interest rate of 5.59%, encumbering 35 properties, a $153.0 million three-year unsecured credit facility, with two one-year extension options, which bears interest at LIBOR plus 0.375% and is guaranteed by the Company and the assumption of $278.6 million cross-collateralized non-recourse mortgage debt with fixed interest rates ranging from 5.19% to 5.89%, encumbering 86 properties. The joint venture partner has pledged its equity interest for any guaranty payment the Company is obligated to pay. The outstanding balance on the three-year unsecured credit facility was $147.5 million as of December 31, 2008. The joint venture obtained an interest rate swap at 5.37% on $128.0 million of this debt. The swap is designated as a cash flow hedge and is deemed highly effective; as such adjustments to the swaps fair value are recorded in Other comprehensive income. During November 2007, the Company entered into a joint venture, in which the Company has a non-controlling ownership interest, to acquire a property in Houston, Texas. This investment was funded with a $24.5 million unsecured credit facility scheduled to mature in November 2009, with a six-month extension option, which bears interest at LIBOR plus 0.375% and is guaranteed by the Company. The outstanding balance on this credit facility as of December 31, 2008, was $24.5 million. During April 2007, the Company entered into a joint venture, in which the Company has a 50% non-controlling ownership interest to acquire a property in Visalia, CA. Subsequent to this acquisition the joint venture obtained a $6.0 million three-year promissory note which bears interest at LIBOR plus 0.75% and has an extension option of two-years. This loan is jointly and severally guaranteed by the Company and the joint venture partner. As of December 31, 2008, the outstanding balance on this loan was $6.0 million. During 2006, an entity in which the Company has a preferred equity investment, located in Montreal, Canada, obtained a non-recourse construction loan, which is collateralized by the respective land and project improvements. Additionally, the Company has provided a guaranty to the lender and the developer partner has provided an indemnity to the Company for 25% of all debt. As of December 31, 2008, there was CAD $89.0 million (approximately USD $72.7 million) outstanding on this construction loan. In connection with the construction of its development projects and related infrastructure, certain public agencies require performance and surety bonds be posted to guarantee that the Company’s obligations are satisfied. These bonds expire upon the completion of the improvements and infrastructure. As of December 31, 2008, there were approximately $61.8 million bonds outstanding. Additionally, the RioCan Venture, an entity in which the Company holds a 50% non-controlling interest, has a CAD $7.0 million (approximately USD $5.7 million) letter of credit facility. This facility is jointly guaranteed by RioCan and the Company and had approximately CAD $4.6 million (approximately USD $3.8 million) outstanding as of December 31, 2008, relating to various development projects. During 2005, an entity in which the Company has a preferred equity investment obtained a CAD $24.3 million (approximately USD $19.8 million) credit facility to finance the construction of a 0.1 million square foot shopping center property located in Kamloops, B.C. This facility bears interest at Royal Bank Prime Rate (“RBP”) plus 0.5% per annum and was scheduled to mature in March 2008. During 2008, this facility was extended to expire on February 28, 2009. The Company and its partner in this entity each have a limited and several guarantee of CAD $7.5 million (approximately USD 60 $6.1 million) on this facility. As of December 31, 2008, there was CAD $22.3 million (approximately USD $18.2 million) outstanding on this facility. The Company and its partner are currently negotiating with lenders regarding extending or refinancing this debt. During 2005, PL Retail, a joint venture in which the Company holds a 15% non-controlling interest, entered into a $39.5 million unsecured revolving credit facility, which bears interest at LIBOR plus 0.50% and was scheduled to mature in February 2008. During 2008, the loan was extended to February 2009. This facility is guaranteed by the Company and the joint venture partner has guaranteed reimbursement to the Company of 85% of any guaranty payment the Company is obligated to make. As of December 31, 2008, there was $35.6 million outstanding under this facility. During February 2009, PL Retail made a principal payment of $5.6 million and obtained a one-year extension option at LIBOR plus 400 basis points for the remaining balance of $30.0 million. Additionally, during 2005, the Company acquired three operating properties and one land parcel, through joint ventures, in which the Company holds 50% non-controlling interests. Subsequent to these acquisitions, the joint ventures obtained four individual loans aggregating $20.4 million with interest rates ranging from LIBOR plus 1.00% to LIBOR plus 3.50%. During 2007, one of these properties was sold for a sales price of approximately $10.5 million, including the pay down of $5.0 million of debt. These loans are scheduled to mature in May 2009, October 2009 and December 2009. During 2008, one of the loans was increased by $2.0 million. As of December 31, 2008, there was an aggregate of $17.4 million outstanding on these loans. These loans are jointly and severally guaranteed by the Company and the joint venture partner. OFF-BALANCE SHEET ARRANGEMENTS Unconsolidated Real Estate Joint Ventures The Company has investments in various unconsolidated real estate joint ventures with varying structures. These joint ventures operate either shopping center properties or are established for development projects. Such arrangements are generally with third-party institutional investors, local developers and individuals. The properties owned by the joint ventures are primarily financed with individual non-recourse mortgage loans, however, the Company, on a selective basis, obtains unsecured financing for certain joint ventures. These unsecured financings are guaranteed by the Company with guarantees from the joint venture partners for their proportionate amounts of any guaranty payment the Company is obligated to make. Non-recourse mortgage debt is generally defined as debt whereby the lenders’ sole recourse with respect to borrower defaults is limited to the value of the property collateralized by the mortgage. The lender generally does not have recourse against any other assets owned by the borrower or any of the constituent members of the borrower, except for certain specified exceptions listed in the particular loan documents (See Note 7 of the Notes to Consolidated Financial Statements included in this annual report on Form 10-K). These investments include the following joint ventures: Venture Kimco Ownership Interest KimPru (c) . . . . . . . . . 15.00% KIR (d) . . . . . . . . . . . . 45.00% PL Retail (e) . . . . . . . . 15.00% KUBS (f) . . . . . . . . . . . 17.89% (a) RioCan Venture (g) . . . 50.00% Number of Properties 123 62 22 43 45 Total GLA (in thousands) 19,382 13,067 5,578 6,175 9,283 Non-Recourse Mortgage Payable (in millions) $ 2,075.7 $ 1,001.0 $ 649.0 $ 759.7 $ 767.8 Recourse Notes Payable (in millions) $650.0 (b) $ — $ 35.6 (b) $ — $ — Number of Encumbered Properties 92 49 22 43 45 Average Interest Rate 4.64% 5.74% 4.51% 5.62% 5.92% Weighted Average Term (months) 64.0 50.4 14.9 78.1 67.0 (a) Ownership % is a blended rate. (b) See Contractual Obligations and Other Commitments regarding guarantees by the Company and its joint venture partners. (c) Represents the Company’s joint ventures with Prudential Real Estate Investors. (d) Represents the Kimco Income REIT, formed in 1998. (e) Represents the Company’s joint venture formed from the acquisition of the Price Legacy Corporation. (f) Represents the Company’s joint ventures with UBS Wealth Management North American Property Fund Limited. (g) Represents the Company’s joint venture with RioCan Real Estate Investment Trust. 61 The Company has various other unconsolidated real estate joint ventures with varying structures. As of December 31, 2008, these unconsolidated joint ventures had individual non-recourse mortgage loans aggregating approximately $2.8 billion and unsecured notes payable aggregating approximately $189.4 million. The Company’s share of this debt was approximately $1.4 billion. These loans have scheduled maturities ranging from one month to 22 years and bear interest at rates ranging from 1.19% to 10.5% at December 31, 2008. Approximately $312.8 million of the outstanding loan balance matures in 2009. These maturing loans are anticipated to be repaid with operating cash flows, debt refinancing and partner capital contributions, as deemed appropriate. (See Note 7 of the Notes to Consolidated Financial Statements included in this annual report on Form 10-K.) Other Real Estate Investments The Company maintains a Preferred Equity program, which provides capital to developers and owners of real estate properties. The Company accounts for its preferred equity investments under the equity method of accounting. As of December 31, 2008, the Company’s net investment under the Preferred Equity Program was approximately $437.3 million relating to 231 properties. As of December 31, 2008, these preferred equity investment properties had individual non-recourse mortgage loans aggregating approximately $1.7 billion. Due to the Company’s preferred position in these investments, the Company’s share of each investment is subject to fluctuation and is dependent upon property cash flows. The Company’s maximum exposure to losses associated with its preferred equity investments is primarily limited to its invested capital. Additionally, during July 2007, the Company invested approximately $81.7 million of preferred equity capital in a portfolio comprised of 403 net leased properties which are divided into 30 master leased pools with each pool leased to individual corporate operators. These properties consist of a diverse array of free-standing restaurants, fast food restaurants, convenience and auto parts stores. As of December 31, 2008, these properties were encumbered by third party loans aggregating approximately $428.8 million with interest rates ranging from 5.08% to 10.47% with a weighted average interest rate of 9.3% and maturities ranging from 0.4 years to 14.2 years. During June 2002, the Company acquired a 90% equity participation interest in an existing leveraged lease of 30 properties. The properties are leased under a long-term bond-type net lease whose primary term expires in 2016, with the lessee having certain renewal option rights. The Company’s cash equity investment was approximately $4.0 million. This equity investment is reported as a net investment in leveraged lease in accordance with SFAS No. 13, Accounting for Leases (as amended). The net investment in leveraged lease reflects the original cash investment adjusted by remaining net rentals, estimated unguaranteed residual value, unearned and deferred income and deferred taxes relating to the investment. As of December 31, 2008, 18 of these leveraged lease properties were sold, whereby the proceeds from the sales were used to pay down the mortgage debt by approximately $31.2 million. As of December 31, 2008, the remaining 12 properties were encumbered by third-party non-recourse debt of approximately $42.8 million that is scheduled to fully amortize during the primary term of the lease from a portion of the periodic net rents receivable under the net lease. As an equity participant in the leveraged lease, the Company has no recourse obligation for principal or interest payments on the debt, which is collateralized by a first mortgage lien on the properties and collateral assignment of the lease. Accordingly, this debt has been offset against the related net rental receivable under the lease. EFFECTS OF INFLATION Many of the Company’s leases contain provisions designed to mitigate the adverse impact of inflation. Such provisions include clauses enabling the Company to receive payment of additional rent calculated as a percentage of tenants’ gross sales above pre-determined thresholds, which generally increase as prices rise, and/or escalation clauses, which generally increase rental rates during the terms of the leases. Such escalation clauses often include increases based upon changes in the consumer price index or similar inflation indices. In addition, many of the Company’s leases are for terms of less than 10 years, which permits the Company to seek to increase rents to market rates upon renewal. Most of the Company’s leases require the tenant to pay an allocable share of operating expenses, including common area maintenance costs, real estate taxes and insurance, thereby reducing the Company’s exposure to increases in costs and operating expenses resulting from inflation. The Company periodically evaluates its exposure to short-term interest rates and foreign currency exchange rates and will, from time-to-time, enter into interest rate protection agreements and/or foreign currency hedge agreements which mitigate, but do not eliminate, the effect of changes in interest rates on its floating-rate debt and fluctuations in foreign currency exchange rates. 62 GLOBAL MARKET AND ECONOMIC CONDITIONS; REAL ESTATE AND RETAIL SHOPPING SECTOR In the U.S., recent market and economic conditions have been unprecedented and challenging with tighter credit conditions and slower growth throughout 2008. For the year ended December 31, 2008, continued concerns about the systemic impact of the availability and cost of credit, the U.S. mortgage market, inflation, energy costs, geopolitical issues and declining equity and real estate markets have contributed to increased market volatility and diminished expectations for the U.S. economy. In the third quarter, added concerns fueled by the federal government conservatorship of the Federal Home Loan Mortgage Corporation and the Federal National Mortgage Association, the declared bankruptcy of Lehman Brothers Holdings Inc., the U.S. government provided loans to American International Group Inc. and other federal government interventions in the U.S. credit markets led to increased market uncertainty and instability in both U.S. and international capital and credit markets. These conditions, combined with volatile oil prices, declining business and consumer confidence and increased unemployment have contributed to volatility of unprecedented levels and has led to the unprecedented deterioration of the U.S. and international equity markets during the fourth quarter of 2008. Historically, real estate has been subject to a wide range of cyclical economic conditions that affect various real estate markets and geographic regions with differing intensities and at different times. Different regions of the United States have and may continue to experience varying degrees of economic growth or distress. Adverse changes in general or local economic conditions could result in the inability of some tenants of the Company to meet their lease obligations and could otherwise adversely affect the Company’s ability to attract or retain tenants. The Company’s shopping centers are typically anchored by two or more national tenants which generally offer day-to-day necessities, rather than high-priced luxury items. In addition, the Company seeks to reduce its operating and leasing risks through ownership of a portfolio of properties with a diverse geographic and tenant base. The Company monitors potential credit issues of its tenants, and analyzes the possible effects to the financial statements of the Company and its unconsolidated joint ventures. In addition to the collectability assessment of outstanding accounts receivable, the Company evaluates the related real estate for recoverability as well as any tenant related deferred charges for recoverability, which may include straight-line rents, deferred lease costs, tenant improvements, tenant inducements and intangible assets. The retail shopping sector has been negatively affected by recent economic conditions. These conditions may result in our tenants delaying lease commencements or declining to extend or renew leases upon expiration. These conditions also have forced some weaker retailers, in some cases, to declare bankruptcy and/or close stores. Certain retailers have announced store closings even though they have not filed for bankruptcy protection. However, any of these particular store closings affecting the Company often represent a small percentage of the Company’s overall gross leasable area and the Company does not currently expect store closings to have a material adverse effect on the Company’s overall performance. The decline in market conditions has also had a negative effect on real estate transactional activity as it relates to the acquisition and sale of real estate assets. The Company believes that the lack of real estate transactions will continue throughout 2009 which will curtail the Company’s growth in the near term. NEW ACCOUNTING PRONOUNCEMENTS In September 2006, the FASB issued Statement of Financial Accounting Standards (“SFAS”) No. 157, Fair Value Measurement (“SFAS No. 157”), which defines fair value, establishes a framework for measuring fair value and expands disclosures about fair value measurement. This statement is effective for financial statements issued for fiscal years beginning after November 15, 2007. During February 2008, the FASB issued two Staff Positions that (i) partially deferred the effective date of SFAS No. 157 for one year for certain nonfinancial assets and nonfinancial liabilities and (ii) removed certain leasing transactions from the scope of SFAS No. 157. The impact of partially adopting SFAS No. 157 did not have a material impact on the Company’s financial position or results of operations. (See footnote 15 for additional disclosure). In February 2007, the FASB issued SFAS No. 159, The Fair Value Option for Financial Assets and Financial Liabilities (“SFAS No. 159”). SFAS No. 159 permits entities to choose to measure many financial assets and financial liabilities at fair value. Unrealized gains and losses on items for which the fair value option has been elected are reported in earnings. SFAS No. 159 is effective for fiscal years beginning after November 15, 2007. The impact of adopting SFAS No. 159 did not have a material impact on the Company’s financial position or results of operations, as the Company did not elect the fair value option for its financial assets and liabilities. 63 In December 2007, the FASB issued SFAS No. 141 (revised 2007), Business Combinations (“SFAS No. 141(R)”). The objective of this statement is to improve the relevance, representational faithfulness and comparability of the information that a reporting entity provides in its financial reports about a business combination and its effects. To accomplish that, this statement establishes principles and requirements for how the acquirer: (i) recognizes and measures in its financial statements the identifiable assets acquired, the liabilities assumed and any non-controlling interest in the acquiree, (ii) recognizes and measures the goodwill acquired in the business combination or a gain from a bargain purchase, (iii) determines what information to disclose to enable users of the financial statements to evaluate the nature and financial effects of the business combination and (iv) requires expensing of transaction costs associated with a business combination. This statement applies prospectively to business combinations for which the acquisition date is on or after the first annual reporting period beginning on or after December 15, 2008. An entity may not apply it before that date. The impact the adoption of SFAS No. 141(R) will have on the Company’s financial position and results of operations will be dependent upon the volume of business combinations entered into by the Company. In December 2007, the FASB issued SFAS No. 160, “Non-controlling Interests in Consolidated Financial Statements” (“FAS 160”). FAS 160 establishes accounting and reporting standards that require the ownership interests in subsidiaries held by parties other than the parent be clearly identified, labeled and presented in the consolidated statement of financial position within equity, but separate from the parent’s equity; the amount of consolidated net income attributable to the parent and to the non-controlling interest be clearly identified and presented on the face of the consolidated statement of income; changes in a parent’s ownership interest while the parent retains its controlling financial interest in its subsidiary be accounted for consistently; when a subsidiary is deconsolidated, any retained non-controlling equity investment in the former subsidiary be initially measured at fair value; and entities provide sufficient disclosures that clearly identify and distinguish between the interests of the parent and the interests of the non-controlling owners. The objective of the guidance is to improve the relevance, comparability, and transparency of the financial information that a reporting entity provides in its consolidated financial statements. FAS 160 is effective for fiscal years beginning on or after December 15, 2008. Earlier adoption is prohibited. The impact the adoption of SFAS No. 160 will have on the Company’s financial position and results of operations will be dependent upon the volume of transactions which will specifically be impacted by this pronouncement. In March 2008, the FASB issued FAS 161, “Disclosures about Derivative Instruments and Hedging Activities an amendment of FASB Statement No. 133”, (“SFAS No. 161”) which amends and expands the disclosure requirements of FAS 133 to require qualitative disclosure about objectives and strategies for using derivatives, quantitative disclosures about fair value amounts of and gains and losses on derivative instruments and disclosures about credit-risk-related contingent features in derivative agreements. SFAS No. 161 is to be applied prospectively for the first annual reporting period beginning on or after November 15, 2008, with early application encouraged. SFAS No. 161 also encourages, but does not require, comparative disclosures for earlier periods at initial adoption. The adoption of SFAS No. 161 is not expected to have a material impact on the Company’s disclosures. In April 2008, the FASB issued FSP No. FAS 142-3, Determination of the Useful Life of Intangible Assets (“FSP 142-3”). FSP 142-3 removes the requirement under SFAS No. 142, Goodwill and Other Intangible Assets to consider whether an intangible asset can be renewed without substantial cost or material modifications to the existing terms and conditions and replaces it with a requirement that an entity consider its own historical experience in renewing similar arrangements, or a consideration of market participant assumptions in the absence of historical experience. FSP 142-3 also requires entities to disclose information that enables users of financial statements to assess the extent to which the expected future cash flows associated with the asset are affected by the entity’s intent and/or ability to renew or extend the arrangement. FSP 142-3 is effective for fiscal years beginning on or after December 15, 2008. Earlier adoption is prohibited. The adoption of FSP 142-3 is not expected to have a material impact on the Company’s financial position and results of operations. In June 2008, the FASB issued FASB Staff Position No. EITF 03-6-1, “Determining Whether Instruments Granted in Share-Based Payment Transactions Are Participating Securities,” (“EITF 03-6-1”), which classifies unvested share- based payment awards that contain non-forfeitable rights to dividends or dividend equivalents (whether paid or unpaid) as participating securities and requires them to be included in the computation of earnings per share pursuant to the two- class method described in SFAS No. 128, “Earnings per Share.” EITF 03-6-1 is effective for financial statements issued for fiscal years beginning after December 15, 2008. Earlier adoption is prohibited. All prior-period earnings per share data presented are to be adjusted retrospectively. The Company’s adoption of EITF 03-6-1 is not expected to have a material impact on the Company’s financial position and results of operations. 64 In December 2008, the FASB issued FSP FAS 140-4 and FIN46(R)-8, Disclosures by Public Entities (Enterprises) about Transfers of Financial Assets and Interests in Variable Interest Entities, which promptly improves disclosures by public companies until the pending amendments to FASB Statement No. 140, Accounting for Transfers and Servicing of Financial Assets and Extinguishments of Liabilities (“SFAS No. 140”), and FIN 46(R), are finalized and approved by the Board. The FSP amends SFAS No. 140 to require public companies to provide additional disclosures about transfers of financial assets and variable interests in qualifying special-purpose entities. It also amends FIN 46(R) to require public companies to provide additional disclosures about their involvement with variable interest entities. This FSP is effective for reporting periods ending after December 15, 2008. (See footnotes 3, 7 and 8 for additional disclosure). ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK The Company’s primary market risk exposure is interest rate risk. The following table presents the Company’s aggregate fixed rate and variable rate domestic and foreign debt obligations outstanding as of December 31, 2008, with corresponding weighted-average interest rates sorted by maturity date. The table does not include extension options where available. Amounts include purchase price allocation adjustments for assumed debt. The information is presented in U.S. dollar equivalents, which is the Company’s reporting currency. The instruments’ actual cash flows are denominated in U.S. dollars, Canadian dollars and Mexican pesos as indicated by geographic description ($USD equivalent in millions). 2009 2010 2011 2012 2013 2014+ Total Fair Value U.S. Dollar Denominated Secured Debt Fixed Rate . . . . . . . . . . . Average Interest Rate . . Variable Rate . . . . . . . . . Average Interest Rate . . $311.0 $107.0 2.01% 1.97% $ — $ — 4.3 2.44% $ — $ — $ 56.6 $ 17.2 $ 43.4 $ 61.3 $ 85.1 $ 429.7 $ 693.3 $ 689.6 7.01% 8.47% 7.43% 6.53% 6.16% 6.18% 0.2 3.25% 6.41% $ 422.5 $ 411.4 2.00% Unsecured Debt Fixed Rate . . . . . . . . . . . Average Interest Rate . . Variable Rate . . . . . . . . . Average Interest Rate . . Canadian Dollar Denominated Unsecured Debt $180.0 $ 75.7 $357.2 $217.0 $276.6 $ 1,250.9 $ 2,357.4 $ 1,778.9 $ 6.98% 6.1 2.94% $ 5.51% 9.8 2.74% 6.31% 6.00% 5.40% 5.49% 5.76% $675.0 $ — $ — $ 0.81% — — — $ 690.9 — 0.86% $ 610.9 Fixed Rate . . . . . . . . . . . Average Interest Rate . . Variable Rate . . . . . . . . . Average Interest Rate . . $ — $122.5 $ — $ — $163.4 $ — 4.45% — — 5.18% $ — $ — $ 32.7 $ — $ — $ — — 2.00% — — — $ 285.9 — 4.87% — $ — 32.7 2.00% $ 286.8 $ 24.5 Mexican Pesos Denominated Unsecured Debt Fixed Rate . . . . . . . . . . . Average Interest Rate . . $ — $ — $ — $ — $ 73.9 $ — — — — 8.58% — $ — 73.9 8.58% $ 65.0 Based on the Company’s variable-rate debt balances, interest expense would have increased by approximately $11.5 million in 2008 if short-term interest rates were 1.0% higher. As of December 31, 2008, the Company had (i) Canadian investments totaling CAD $444.5 million (approximately USD $363.2 million) comprised of real estate joint venture investments and marketable securities, (ii) Mexican real estate investments of approximately MXP 9.4 billion (approximately USD $695.9 million), (iii) Chilean real estate investments of approximately 15.2 billion Chilean Pesos (approximately USD $24.2 million), (iv) Peruvian real estate investments of approximately 37 million Peruvian Nuevo Sol (approximately USD $1.2 million), (v) Brazilian real estate investments of approximately 41.6 million Brazilian Real (“BRL”) (approximately USD $17.8 million) and (vi) Australian investments in marketable securities of approximately AUD 190.2 million (approximately USD $131.4 million). The foreign currency 65 exchange risk has been partially mitigated, but not eliminated, through the use of local currency denominated debt. The Company has not, and does not plan to, enter into any derivative financial instruments for trading or speculative purposes. As of December 31, 2008, the Company has no other material exposure to market risk. ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA The response to this Item 8 is included in our audited Notes to Consolidated Financial Statements, which are contained in a separate section of this annual report on Form 10-K. ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE None. ITEM 9A. CONTROLS AND PROCEDURES EVALUATION OF DISCLOSURE CONTROLS AND PROCEDURES The Company’s management, with the participation of the Company’s chief executive officer and chief financial officer, has evaluated the effectiveness of the Company’s disclosure controls and procedures (as such term is defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”)) as of the end of the period covered by this report. Based on such evaluation, the Company’s chief executive officer and chief financial officer have concluded that, as of the end of such period, the Company’s disclosure controls and procedures are effective. CHANGES IN INTERNAL CONTROL OVER FINANCIAL REPORTING There have not been any changes in the Company’s internal control over financial reporting (as such term is defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) during the fourth fiscal quarter to which this report relates that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting. MANAGEMENT’S REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING Our management is responsible for establishing and maintaining adequate internal control over financial reporting, as such term is defined in Exchange Act Rule 13a-15(f). Under the supervision and with the participation of our management, including our chief executive officer and chief financial officer, we conducted an evaluation of the effectiveness of our internal control over financial reporting based on the framework in Internal Control - Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission. Based on our evaluation under the framework in Internal Control-Integrated Framework, our management concluded that our internal control over financial reporting was effective as of December 31, 2008. The effectiveness of our internal control over financial reporting as of December 31, 2008, has been audited by PricewaterhouseCoopers LLP, an independent registered public accounting firm, as stated in their report which is included herein. ITEM 9B. OTHER INFORMATION BYLAW AMENDMENTS On February 25, 2009, our Board of Directors approved amendments to the Company’s Bylaws that became effective upon adoption. The following summarizes these amendments. Advance Notice and Indemnification Matters (cid:135)(cid:3) Article II, Section 12 of the Bylaws was amended with respect to the advance notice provisions for stockholder nominations for director and stockholder business proposals. The amendments expand the information required to be disclosed by the stockholder making the nomination or proposal including, among other items, 66 (a) information about persons controlling, or acting in concert with, such stockholder, (b) the proponent’s investment strategy or objective and any related disclosure document the proponent has provided to its investors and (c) information about the extent to which the proponent has hedged its interest in the Company. (cid:135)(cid:3) Article V was amended to further clarify that subsequent amendments to Article V do not alter a director or officer’s entitlement to indemnification and advance of expenses. Meetings of Stockholders (cid:135)(cid:3) Article II, Section 2 was amended to remove the reference to the month of the annual meeting of stockholders. (cid:135)(cid:3) Article II, Section 3 was amended to clarify the procedures for stockholders to request the calling of a special meeting of stockholders. (cid:135)(cid:3) Article II, Section 7 was amended to (a) provide for “householding” of notices of a meeting of stockholders, as permitted by the MGCL and the SEC’s rules applicable to delivery of stockholder proxy statements and (b) clarify the procedures for the postponement of a meeting. A copy of the Company’s Amended and Restated Bylaws was filed as Exhibit 3.2 to the Company’s Annual Report on Form 10-K for the year ended December 31, 2008. The foregoing is a brief description of the amendments to the Bylaws that is qualified in its entirety by reference to the text of the Company’s Amended and Restated Bylaws, which is incorporated by reference. INDEMNIFICATION AGREEMENT On February 25, 2009, our Board of Directors approved a form of Indemnification Agreement (the “Indemnification Agreement”) to be entered into between the Company and each of its executive officers, members of the Board of Directors and such other employees or consultants of the Company or any subsidiary as may be determined from time to time by our Chief Executive Officer in his discretion (each, an “Indemnitee”). The Indemnification Agreement provides that the Company will indemnify each Indemnitee against any and all expenses, judgments, penalties, fines and amounts paid in settlement (collectively, “Losses”) actually and necessarily incurred by the Indemnitee or on his behalf, to the fullest extent permitted by law, in connection with any present or future threatened, pending or completed proceeding based upon, arising from, relating to or by reason of the Indemnitee’s status as a director, officer, employee, agent or fiduciary of the Company or any other entity the Indemnitee serves at the request of the Company. The Indemnitee will also be indemnified against all expenses actually and reasonably incurred by him in connection with a proceeding if the Indemnitee is, by reason of his service to the Company or other entity at the Company’s request, a witness in any such proceeding to which he is not a party. No indemnification shall be made under the Indemnification Agreement on account of Indemnitee’s conduct in respect of any proceeding charging impersonal benefit to the Indemnitee, whether or not involving action in the Indemnitee’s official capacity, in which the Indemnitee was adjudged to be liable on the basis that personal benefit was improperly received. In addition to certain other exclusions set forth in the Indemnification Agreement, the Company will also not be obligated to make any indemnity or advance in connection with any claim made against the Indemnitee (a) for which payment has been made to the Indemnitee under any insurance policy or other indemnity provision, (b) for an accounting of short- swing profits made by Indemnitee from securities of the Company within the meaning of Section 16(b) of the Securities Exchange Act of 1934, as amended, or, subject to certain exceptions, (c) prior to a change in control of the Company, in connection with any proceeding initiated by Indemnitee against the Company or its directors, officers, employees or other Indemnitees. The Company will advance, to the extent not prohibited by law, the expenses incurred by the Indemnitee in connection with any proceeding. The Indemnification Agreement provides procedures for determining the Indemnitee’s entitlement to indemnification and advancement of expenses in the event of a claim. The Indemnitee is required to deliver to the Company a written affirmation of the Indemnitee’s good faith belief that the standard of conduct necessary for indemnification by the Company as authorized by law has been met and a written undertaking to reimburse any expenses if it shall ultimately be established that the standard of conduct has not been met. 67 To the fullest extent permitted by applicable law, if the indemnification provided for in the Indemnification Agreement is unavailable to the Indemnitee for any reason, then the Company, in lieu of indemnifying and holding harmless the Indemnitee, shall pay the entire amount of Losses incurred by the Indemnitee in connection with any proceeding without requiring the Indemnitee to contribute to such payment, and the Company further waives and relinquishes any right of contribution it may have at any time against the Indemnitee. The Company shall not enter into any settlement of any proceeding in which the Company is jointly liable with the Indemnitee (or would be if joined in such proceeding) unless such settlement provides for a full and final release of all claims asserted against the Indemnitee. Furthermore, the Company agrees to fully indemnify and hold harmless the Indemnitee from any claims for contribution which may be brought by officers, directors or employees of the Company other than the Indemnitee who may be jointly liable with the Indemnitee. A copy of the form of the Indemnification Agreement was filed as Exhibit 10.16 to the Company’s Annual Report on Form 10-K for the year ended December 31, 2008. The foregoing is a brief description of the terms and conditions of the Indemnification Agreement that are material to the Company and is qualified in its entirety by reference to Exhibit 10.16 which is incorporated by reference. 68 PART III ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE Incorporated herein by reference to the Company’s definitive proxy statement to be filed with respect to its Annual Meeting of Stockholders expected to be held on May 12, 2009. Information with respect to the Executive Officers of the Registrant follows Part I, Item 4 of this annual report on Form 10-K. On June 11, 2008, the Company’s Chief Executive Officer submitted to the New York Stock Exchange (the “NYSE”) the annual certification required by Section 303A.12 (a) of the NYSE Company Manual. In addition, the Company has filed with the Securities and Exchange Commission as exhibits to this Form 10-K the certifications, required pursuant to Section 302 of the Sarbanes-Oxley Act, of its Chief Executive Officer and Chief Financial Officer relating to the quality of its public disclosure. If the Company makes any substantive amendments to its Code of Business Conduct and Ethics or grant any waiver, including any implicit waiver, from a provision of the Code to the Chief Executive Officer, Chief Financial Officer or Chief Accounting Officer, the Company will disclose the nature of the amendment or waiver on its website or in a report on Form 8-K. ITEM 11. EXECUTIVE COMPENSATION Incorporated herein by reference to the Company’s definitive proxy statement to be filed with respect to its Annual Meeting of Stockholders expected to be held on May 12, 2009. ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS Incorporated herein by reference to the Company’s definitive proxy statement to be filed with respect to its Annual Meeting of Stockholders expected to be held on May 12, 2009. ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE Incorporated herein by reference to the Company’s definitive proxy statement to be filed with respect to its Annual Meeting of Stockholders expected to be held on May 12, 2009. ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES Incorporated herein by reference to the Company’s definitive proxy statement to be filed with respect to its Annual Meeting of Stockholders expected to be held on May 12, 2009. 69 ITEM 15. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES PART IV (a) 1. Financial Statements - Form 10-K Report Page The following consolidated financial information is included as a separate section of this annual report on Form 10-K. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Report of Independent Registered Public Accounting Firm. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Consolidated Financial Statements Consolidated Balance Sheets as of December 31, 2008 and 2007 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Consolidated Statements of Income for the years ended December 31, 2008, 2007 and 2006 . . . . . . . . Consolidated Statements of Comprehensive Income for the years ended December 31, 2008, 2007 and 2006 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Consolidated Statements of Stockholders’ Equity for the years ended December 31, 2008, 2007 and 2006 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Consolidated Statements of Cash Flows for the years ended December 31, 2008, 2007 and 2006 . . . . . Notes to Consolidated Financial Statements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2. Financial Statement Schedules - Schedule II - Valuation and Qualifying Accounts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Schedule III - Real Estate and Accumulated Depreciation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Schedule IV - Mortgage Loans on Real Estate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . All other schedules are omitted since the required information is not present or is not present in amounts sufficient to require submission of the schedule. 3. Exhibits - 75 76 77 78 79 80 81 82 129 130 141 The exhibits listed on the accompanying Index to Exhibits are filed as part of this report.. . . . . . . . . . . 142 70 Form 10-K Page INDEX TO EXHIBITS Exhibits 2.1 Form of Plan of Reorganization of Kimco Realty Corporation [Incorporated by reference to Exhibit 2.1 to the Company’s Registration Statement on Form S-11 No. 33-42588]. 2.2 Agreement and Plan of Merger by and between Kimco Realty Corporation, KRC CT Acquisition Limited Partnership, KRC PC Acquisition Limited Partnership, Pan Pacific Retail Properties, Inc., CT Operating Partnership L.P., and Western/PineCreek, Ltd. dated July 9, 2006. [Incorporated by reference to Exhibit 2.1 to the Company’s Form 10-Q filed July 28, 2006]. 2.3 Amendment No. 1 to Agreement and Plan of Merger, dated as of October 30, 2006, by and between Kimco Realty Corporation, KRC CT Acquisition Limited Partnership, KRC PC Acquisition Limited Partnership, Pan Pacific Retail Properties, Inc., CT Operating Partnership L.P., and Western/PineCreek, Ltd. [Incorporated by reference to Exhibit 2.1 to the Company’s Current Report on Form 8-K dated November 3, 2006]. 3.1 Articles of Amendment and Restatement of the Company, dated August 4, 1994 [Incorporated by reference to Exhibit 3.1 to the Company’s Annual Report on Form 10-K for the year ended December 31, 1994]. 3.1(ii) Articles Supplementary relating to the 8 1/2% Class B Cumulative Redeemable Preferred Stock, par value $1.00 per share, of the Company, dated July 25, 1995. [Incorporated by reference to Exhibit 3.3 to the Company’s Annual Report on Form 10-K for the year ended December 31, 1995 (file #1-10899) the “1995 Form 10-K”)]. 3.1(iii) Articles Supplementary relating to the 8 3/8% Class C Cumulative Redeemable Preferred Stock, 3.1(iv) par value $1.00 per share, of the Company, dated April 9, 1996 [Incorporated by reference to Exhibit 3.4 to the Company’s Annual Report on Form 10-K for the year ended December 31, 1996]. Articles Supplementary relating to the 7 1/2% Class D Cumulative Convertible Preferred Stock, par value $1.00 per share, of the Company [Incorporated by reference to Exhibit A of Annex A of the Company’s and The Price REIT, Inc.’s Joint Proxy Statement/Prospectus on Form S-4 filed May 14, 1998]. 3.1(v) Articles Supplementary relating to the Class E Floating Rate Cumulative Preferred Stock, par value $1.00 per share, of the Company [Incorporated by reference to Exhibit B of Exhibit 4(a) of the Company’s Current Report on Form 8-K dated June 4, 1998]. 3.1(vi) Articles Supplementary relating to the 6.65% Class F Cumulative Redeemable Preferred Stock, par value $1.00 per share, of the Company, dated May 7, 2003 [Incorporated by reference to the Company’s filing on Form 8-A dated June 3, 2003]. 3.1(vii) Articles Supplementary relating to the 7.75% Class G Cumulative Redeemable Preferred Stock, par value $1.00 per share, of the Company, dated October 2, 2007 [Incorporated by reference to the Company’s filing on Form 8-A12B dated October 9, 2007]. 3.2 Amended and Restated By-laws of the Company dated February 25, 2009. [Incorporated by reference to Exhibit 3.2 to the Company’s Annual Report on Form 10-K for the year ended December 31, 2008]. 4.1 Agreement of the Company pursuant to Item 601(b)(4)(iii)(A) of Regulation S-K [Incorporated by reference to Exhibit 4.1 to Amendment No. 3 to the Company’s Registration Statement on Form S-11 No. 33-42588]. 4.2 Certificate of Designations [Incorporated by reference to Exhibit 4(d) to Amendment No. 1 to the Registration Statement on Form S-3 dated September 10, 1993 (the “Registration Statement”, Commission File No. 33-67552)]. 4.3 Indenture dated September 1, 1993, between Kimco Realty Corporation and Bank of New York (as successor to IBJ Schroder Bank and Trust Company) [Incorporated by reference to Exhibit 4(a) to the Registration Statement]. 4.4 First Supplemental Indenture, dated as of August 4, 1994. [Incorporated by reference to Exhibit 4.6 to the 1995 Form 10-K.] 4.5 Second Supplemental Indenture, dated as of April 7, 1995 [Incorporated by reference to Exhibit 4(a) to the Company’s Current Report on Form 8-K dated April 7, 1995 (the “April 1995 8-K”)]. 71 Exhibits Form 10-K Page 4.6 Form of Medium-Term Note (Fixed Rate) [Incorporated by reference to Exhibit 4.6 to the Company’s Annual Report on Form 10-K for the year ended December 31, 2001 (the “2001 Form 10-K”)]. 4.7 Form of Medium-Term Note (Floating Rate) [Incorporated by reference to Exhibit 4.7 to the 2001 Form 10-K]. 4.8 Indenture dated April 1, 2005, between Kimco North Trust III, Kimco Realty Corporation, as Guarantor and BNY Trust Company of Canada, as Trustee [Incorporated by reference to Exhibit 4.1 to the Company’s Current Report on Form 8-K dated April 21, 2005]. 4.9 Third Supplemental Indenture dated as of June 2, 2006. [Incorporated by reference to Exhibit 4.1 to the Company’s Current Report on Form 8-K dated June 5, 2006]. 4.10 Fifth Supplemental Indenture, dated as of October 31, 2006, among Kimco Realty Corporation, Pan Pacific Retail Properties, Inc. and Bank of New York Trust Company, N.A., as trustee [Incorporated by reference to Exhibit 4.1 to the Company’s Current Report on Form 8-K dated November 3, 2006 (the “November 2006 8-K”)]. 4.11 First Supplemental Indenture, dated as of October 31, 2006, among Kimco Realty Corporation, Pan Pacific Retail Properties, Inc. and Bank of New York Trust Company, N.A., as trustee [Incorporated by reference to Exhibit 4.2 to the November 2006 8-K]. 4.12 First Supplemental Indenture, dated as of June 2, 2006, among Kimco North Trust III, Kimco Realty Corporation, as Guarantor and BNY Trust Company of Canada, as trustee. [Incorporated by reference to Exhibit 4.12 to the Company’s Annual Report on Form 10-K for the year ended December 31, 2006 (the “2006 Form 10-K”)]. 4.13 Second Supplemental Indenture, dated as of August 16, 2006, among Kimco North Trust III, Kimco Realty Corporation, as Guarantor and BNY Trust Company of Canada, as trustee. [Incorporated by reference to Exhibit 4.13 to the 2006 Form 10-K]. 10.1 Management Agreement between the Company and KC Holdings, Inc. [Incorporated by reference to Exhibit 10.2 to the Company’s Registration Statement on Form S-11 No. 33-47915]. 10.2 Amended and Restated Stock Option Plan [Incorporated by reference to Exhibit 10.3 to the 1995 Form 10-K]. 10.3 CAD $150,000,000 Credit Agreement dated September 21, 2004, among Kimco North Trust I, North Trust II, North Trust III, North Trust V, North Trust VI, Kimco North Loan Trust IV, Kimco Realty Corporation, the Several Lenders from Time-to-Time Parties Hereto, Royal Bank of Canada, as Issuing Lender and Administrative Agent, The Bank of Nova Scotia and Bank of America, N.A., as Syndication Agents, Canadian Imperial Bank of Commerce as Documentation Agent and RBC Capital Markets, as Bookrunner and Lead Arranger [Incorporated by reference to Exhibit 10.14 to the Company’s Current Report on Form 8-K dated September 21, 2004]. 10.4 CAD $250,000,000 Amended and Restated Credit Facility dated March 31, 2005, with Royal Bank of Canada, as Issuing Lender and Administrative Agent and various lenders [Incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K dated March 31, 2005]. 10.5 CAD $250,000,000 Amended and Restated Credit Facility dated January 25, 2006, with Royal Bank of Canada, as Issuing Lender and Administrative Agent and various lenders. 72 Exhibits Form 10-K Page 10.6 $1.5 Billion Credit Agreement, dated as of October 25, 2007, among Kimco Realty Corporation, the subsidiaries of Kimco from time-to-time parties thereto, the several banks, financial institutions and other entities from time-to-time parties thereto, Bank of America, N.A., the Bank of Nova Scotia, New York Agency, and Wachovia Bank, National Association, as Syndication Agents, UBS Securities LLC, Deutsche Bank Securities, Inc., Royal Bank of Canada and the Royal Bank of Scotland PLC, as Documentation Agents, the Bank of Tokyo- Mitsubishi UFJ, Ltd., Citicorp North America, Inc., Merrill Lynch Bank USA, Morgan Stanley Bank, Regions Bank, Sumitomo Mitsui Banking Corporation and U.S. Bank National Association, as Managing Agents, The Bank of New York, Barclays Bank PLC, Eurohypo AG New York Branch, Suntrust Bank and Wells Fargo Bank National Association, as Co- Agents, and JPMorgan Chase Bank, N.A., as Administrative Agent for the lenders thereunder. [Incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K dated October 25, 2007]. 10.7 Employment Agreement between Kimco Realty Corporation and David B. Henry, dated March 8, 2007. [Incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K dated March 21, 2007]. 10.8 CAD $250,000,000 Amended and Restated Credit Facility dated January 11, 2008, with Royal Bank of Canada as Issuing Lender and Administrative Agent and various lenders. [Incorporated by reference to Exhibit 10.17 to the Company’s 2007 Form 10-K]. 10.9 Second Amended and Restated 1998 Equity Participation Plan of Kimco Realty Corporation (restated February 25, 2009) [Incorporated by reference to Exhibit 10.9 to the Company’s Annual Report on Form 10-K for the year ended December 31, 2008]. 10.10 Employment Agreement between Kimco Realty Corporation and Michael V. Pappagallo dated November 3, 2008. [Incorporated by reference to Exhibit 10.1 to the Company’s Form 10-Q filed on November 10, 2008]. 10.11 Letter Agreement dated November 3, 2008 and Employment Agreement dated November 3, 2008 between Kimco Realty Corporation and David R. Lukes. [Incorporated by reference to Exhibit 10.2 to the Company’s Form 10-Q filed on November 10, 2008]. 10.12 Agreement and General Release between Kimco Realty Corporation and Jerald Friedman dated November 3, 2008. [Incorporated by reference to Exhibit 10.3 to the Company’s Form 10-Q filed on November 10, 2008]. 10.13 Amendment to Employment Agreement between Kimco Realty Corporation and David B. Henry dated December 17, 2008. [Incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K dated January 7, 2009 (the “January 2009 8-K”]. 10.14 Amendment to Employment Agreement between Kimco Realty Corporation and Michael V. Pappagallo dated December 17, 2008. [Incorporated by reference to Exhibit 10.2 to the January 2009 8-K]. 10.15 Amendment to Employment Agreement between Kimco Realty Corporation and David R. Lukes dated December 17, 2008. [Incorporated by reference to Exhibit 10.3 to the January 2009 8-K]. 10.16 Form of Indemnification Agreement [Incorporated by reference to Exhibit 99.1 to the Company’s Annual Report on Form 10-K for the year ended December 31, 2008]. 10.17 Employment Agreement between Kimco Realty Corporation and Glenn G. Cohen dated February 25, 2009 [Incorporated by reference to Exhibit 99.2 to the Company’s Annual Report on Form 10-K for the year ended December 31, 2008]. 10.18 $650 Million Credit Agreement, dated as of August 26, 2008, among PK Sale LLC, as borrower, PRK Holdings I LLC, PRK Holdings II LLC and PK Holdings III LLC, as guarantors, Kimco Realty Corporation, as guarantor, the lenders party hereto from time to time, JP Morgan Chase Bank, N.A., as Administrative Agent and Wachiovia Bank, National Association, The Bank Of Nova Scotia, as Syndication AgentsBank of America, N.A., as Co-Syndication Agents, Wells Fargo Bank, National Association and Royal Bank of Canada, as Co-Documentation Agents. [Incorporated by reference to Exhibit 99.3 to the Company’s Annual Report on Form 10-K for the year ended December 31, 2008]. 73 Exhibits 10.19 1 Billion MXP Credit Agreement, dated as of March 3, 2008, among KRC Mexico Acquisition, LLC, as borrower, Kimco Realty Corporation, as guarantor, and Scotiabank Inverlat, S.A., Institucio De Banca Multiple, Grupo Financiero Scotiabank Inverlat, as lender. [Incorporated by reference to Exhibit 99.4 to the Company’s Annual Report on Form 10-K for the year ended December 31, 2008]. *12.1 Computation of Ratio of Earnings to Fixed Charges *12.2 Computation of Ratio of Earnings to Combined Fixed Charges and Preferred Stock Dividends 21.1 Subsidiaries of the Company [Incorporated by reference to Exhibit 21.1 to the Company’s Annual Report on Form 10-K for the year ended December 31, 2008]. 23.1 Consent of PricewaterhouseCoopers LLP. [Incorporated by reference to Exhibit 23.1 to the Company’s Annual Report on Form 10-K for the year ended December 31, 2008]. *31.1 Certification of the Company’s Chief Executive Officer, Milton Cooper, pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 *31.2 Certification of the Company’s Chief Financial Officer, Michael V. Pappagallo, pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 *32.1 Certification of the Company’s Chief Executive Officer, Milton Cooper, and the Company’s Chief Financial Officer, Michael V. Pappagallo, pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 Form 10-K Page 142 143 144 145 146 * Filed herewith. 74 ANNUAL REPORT ON FORM 10-K ITEM 8, ITEM 15 (A) (1) AND (2) INDEX TO FINANCIAL STATEMENTS AND FINANCIAL STATEMENT SCHEDULES KIMCO REALTY CORPORATION AND SUBSIDIARIES Report of Independent Registered Public Accounting Firm. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Consolidated Financial Statements and Financial Statement Schedules: Consolidated Balance Sheets as of December 31, 2008 and 2007. . . . . . . . . . . . . . . . . . . . . . . . . . . Consolidated Statements of Income for the years ended December 31, 2008, 2007 and 2006 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Consolidated Statements of Comprehensive Income for the years ended December 31, 2008, 2007 and 2006 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Consolidated Statements of Stockholders’ Equity for the years ended December 31, 2008, 2007 and 2006 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Consolidated Statements of Cash Flows for the years ended December 31, 2008, 2007 and 2006 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Notes to Consolidated Financial Statements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Financial Statement Schedules: II. Valuation and Qualifying Accounts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . III. Real Estate and Accumulated Depreciation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . IV. Mortgage Loans on Real Estate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . FORM 10-K Page 76 77 78 79 80 81 82 129 130 141 75 REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM To the Board of Directors and Stockholders of Kimco Realty Corporation: In our opinion, the consolidated financial statements listed in the index appearing under Item 15(a)(1) present fairly, in all material respects, the financial position of Kimco Realty Corporation and its Subsidiaries (collectively, the “Company”) at December 31, 2008 and 2007, and the results of their operations and their cash flows for each of the three years in the period ended December 31, 2008, in conformity with accounting principles generally accepted in the United States of America. In addition, in our opinion, the financial statement schedules listed in the index appearing under Item 15(a)(2) present fairly, in all material respects, the information set forth therein when read in conjunction with the related consolidated financial statements. Also in our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of December 31, 2008, based on criteria established in Internal Control - Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). The Company’s management is responsible for these financial statements and financial statement schedules, for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting, included under Item 9A. Our responsibility is to express opinions on these financial statements, on the financial statement schedules, and on the Company’s internal control over financial reporting based on our integrated audits. We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the financial statements are free of material misstatement and whether effective internal control over financial reporting was maintained in all material respects. Our audits of the financial statements included 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. Our audit of internal control over financial reporting included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. Our audits also included performing such other procedures as we considered necessary in the circumstances. We believe that our audits provide a reasonable basis for our opinions. A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (i) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (ii) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (iii) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements. Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate. /s/ PricewaterhouseCoopers LLP New York, New York February 26, 2009 76 KIMCO REALTY CORPORATION AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS (in thousands, except share information) Assets: Real Estate Rental property Land . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Building and improvements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Less, accumulated depreciation and amortization . . . . . . . . . . . . . . . . . . . . . . . . . . Real estate under development . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Real estate, net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Investments and advances in real estate joint ventures . . . . . . . . . . . . . . . . . . . . . . . . . Other real estate investments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Mortgages and other financing receivables . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Cash and cash equivalents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Marketable securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Accounts and notes receivable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Deferred charges and prepaid expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Other assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Total assets. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Liabilities & Stockholders’ Equity: Notes payable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Mortgages payable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Construction loans payable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Accounts payable and accrued expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Dividends payable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Other liabilities. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Total liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Minority interests . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Commitments and contingencies Stockholders’ equity: Preferred Stock, $1.00 par value, authorized 3,232,000 shares Class F Preferred Stock, $1.00 par value, authorized 700,000 shares Issued and outstanding 700,000 shares Aggregate liquidation preference $175,000 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Class G Preferred Stock, $1.00 par value, authorized 184,000 shares Issued and Outstanding 184,000 shares Aggregate Liquidation Preference $460,000 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Common stock, $.01 par value, authorized 750,000,000 shares Issued 271,080,525 and 253,350,144 shares outstanding 271,080,525 and 252,803,564, respectively. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Paid-in capital. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Retained earnings/(cumulative distributions in excess of net income) . . . . . . . . . . . . . Accumulated other comprehensive income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Total stockholders’ equity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Total liabilities and stockholders’ equity. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . December 31, 2008 December 31, 2007 $ 1,395,645 5,454,296 6,849,941 1,159,664 5,690,277 968,975 6,659,252 1,161,382 566,324 181,992 136,177 258,174 97,702 122,481 213,663 $ 9,397,147 $ 3,440,818 847,491 268,337 151,241 131,097 237,577 5,076,561 345,240 $ 1,262,879 4,917,750 6,180,629 977,444 5,203,185 1,144,406 6,347,591 1,246,917 615,016 153,847 87,499 212,988 88,017 121,690 224,251 $ 9,097,816 $ 3,131,765 838,736 245,914 161,526 112,052 265,090 4,755,083 448,159 700 184 700 184 2,711 4,217,806 (58,162) 4,163,239 (187,893) 3,975,346 $ 9,397,147 2,528 3,677,509 180,005 3,860,926 33,648 3,894,574 $ 9,097,816 The accompanying notes are an integral part of these consolidated financial statements. 77 KIMCO REALTY CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF INCOME For the Years Ended 2008, 2007 and 2006 (in thousands, except per share data) Revenues from rental property . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Rental property expenses: Rent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Real estate taxes. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Operating and maintenance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Mortgage and other financing income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Management and other fee income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Depreciation and amortization . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . General and administrative expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Interest, dividends and other investment income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Other (expense)/income, net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Interest expense . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Income from continuing operations before income taxes, income from other real estate investments, equity in income of joint ventures, minority interests in income, gain on sale of development properties and impairments . . . . . . . . . . . . . . Benefit/(provision) for income taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Income from other real estate investments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Equity in income of joint ventures, net. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Minority interests in income, net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Gain on sale of development properties, 2008 $ 758,704 Year Ended December 31, 2007 $ 674,534 2006 $ 580,551 (13,367) (98,005) (104,698) 18,333 47,666 (204,310) (117,879) 56,119 (2,208) (212,591) 127,764 (3,542) 86,643 132,208 (26,832) (12,131) (82,508) (89,098) 14,197 54,844 (188,063) (103,882) 36,238 (10,550) (213,086) 80,495 42,372 78,524 173,362 (34,251) (11,531) (73,622) (71,974) 18,816 40,684 (137,820) (76,519) 55,817 8,932 (170,079) 163,255 (4,387) 77,062 105,525 (26,246) net of tax of $14,626, $16,040 and $12,155, respectively . . . . . . . . . . . . . . . . . . . . . 21,939 24,059 25,121 Impairments: Property carrying values, net of tax benefit of $5,445, $3,400 and $0, respectively and Minority Interests . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Marketable equity securities & other equity investments, net of tax benefit of $25,697, $2,118 and $0, respectively . . . . . . . . . . . . . . . . . Investments in real estate joint ventures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Income from continuing operations. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Discontinued operations: Income from discontinued operating properties . . . . . . . . . . . . . . . . . . . . . . . . . . . . Minority interests in income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Loss on operating properties held for sale/sold . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Gain on disposition of operating properties, net of tax . . . . . . . . . . . . . . . . . . . . . . . Income from discontinued operations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Gain on transfer of operating properties. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Gain on sale of operating properties, net of tax . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Total gain on transfer or sale of operating properties, net of tax . . . . . . . . . Income before extraordinary item. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Extraordinary gain from joint venture resulting from purchase price allocation, (6,557) (5,100) — (92,719) (15,500) 223,404 6,577 (1,281) (598) 20,018 24,716 1,195 587 1,782 249,902 (3,178) — 356,283 35,608 (5,740) (1,832) 5,538 33,574 — 2,708 2,708 392,565 — — 340,330 16,352 (1,504) (1,421) 72,042 85,469 1,394 1,066 2,460 428,259 net of tax and minority interest. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Net income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Preferred stock dividends . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Net income available to common shareholders . . . . . . . . . . . . . . . . . . . . . . . — 249,902 (47,288) $ 202,614 50,265 442,830 (19,659) $ 423,171 — 428,259 (11,638) $ 416,621 Per common share: Income from continuing operations: -Basic. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -Diluted . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Net income: -Basic. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -Diluted . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Weighted average shares: $ $ $ $ 0.69 0.69 0.79 0.78 $ $ $ $ 1.35 1.32 1.68 1.65 $ $ $ $ 1.38 1.35 1.74 1.70 -Basic. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -Diluted . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 257,811 258,843 252,129 257,058 239,552 244,615 The accompanying notes are an integral part of these consolidated financial statements. 78 KIMCO REALTY CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (in thousands) Net income. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Other comprehensive income: Year Ended December 31, 2008 2007 2006 $ 249,902 $ 442,830 $ 428,259 Change in unrealized loss on marketable securities. . . . . . . . . . . . . . . . . . . Change in unrealized loss on interest rate swaps . . . . . . . . . . . . . . . . . . . . . Change in unrealized gain/(loss) on foreign currency hedge agreements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Change in foreign currency translation adjustment . . . . . . . . . . . . . . . . . . . Other comprehensive income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (71,535) (170) — (149,836) (221,541) (25,803) (176) (1,294) 15,696 (11,577) (26,467) — 143 2,503 (23,821) Comprehensive income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 28,361 $ 431,253 $ 404,438 The accompanying notes are an integral part of these consolidated financial statements. 79 KIMCO REALTY CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY For the Years Ended December 31, 2008, 2007 and 2006 (in thousands, except per share information) Preferred Stock Issued Amount $ 700 700 Common Stock Issued Amount 228,059 $ 2,281 $2,255,332 Paid-in Capital 20,614 206 870,465 2,197 22 42,007 10,212 700 700 250,870 2,509 3,178,016 50 1,884 1 18 2,413 40,546 444,283 12,251 884 884 252,804 2,528 3,677,509 Balance, January 1, 2006. . . . . . . . . . . . . . Net income. . . . . . . . . . . . . . . . . . . . . . Dividends ($1.38 per common share; $1.6625 Class F Depositary Share, respectively) . . . . . . . . . . . . Issuance of common stock. . . . . . . . . . Exercise of common stock options . . . . . . . . . . . . . . . . . Amortization of stock option expense. . . . . . . . . . . . . . . . Other comprehensive income . . . . . . . Balance, December 31, 2006. . . . . . . . . . . Net income. . . . . . . . . . . . . . . . . . . . . . Dividends ($1.52 per common share; $1.6625 Class F Depositary Share, and $.4359 per Class G share, respectively) . . . . . . . . . . . . Issuance of common stock. . . . . . . . . . Exercise of common stock options . . . . . . . . . . . . . . . . . . . . . . Issuance of Class G Amortization of stock option expense. . . . . . . . . . . . . . . . Other comprehensive income . . . . . . . Balance, December 31, 2007 . . . . . . . . . . . Net income. . . . . . . . . . . . . . . . . . . . . . Dividends ($1.64 per common share; $1.6625 Class F Depositary Share, and $1.9375 per Class G share, respectively) . . . . . . . . . . . . Issuance of common stock. . . . . . . . . . Exercise of common stock options . . . . . . . . . . . . . . . . . Amortization of stock option expense. . . . . . . . . . . . . . . . Other comprehensive income . . . . . . . Balance, December 31, 2008 . . . . . . . . . . . Preferred Stock . . . . . . . . . . . . . . . 184 184 Retained Earnings / (Cumulative Distributions in Excess of Net Income) 59,855 $ 428,259 (347,605) 140,509 442,830 (403,334) 180,005 249,902 (488,069) Accumulated Other Comprehensive Income $ 69,046 Total Stockholders’ Equity $2,387,214 428,259 (23,821) 45,225 (11,577) 33,648 (347,605) 870,671 42,029 10,212 (23,821) 3,366,959 442,830 (403,334) 2,414 40,564 444,467 12,251 (11,577) 3,894,574 249,902 (488,069) 486,873 41,349 (221,541) $ (187,893) 12,258 (221,541) $3,975,346 16,391 164 486,709 1,886 19 41,330 12,258 884 $ 884 271,081 $ 2,711 $4,217,806 $ (58,162) The accompanying notes are an integral part of these consolidated financial statements. 80 KIMCO REALTY CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS (in thousands) Cash flow from operating activities: Net income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Adjustments to reconcile net income to net cash provided $ 249,902 $ 442,830 $ 428,259 Year Ended December 31, 2007 2006 2008 by operating activities: Depreciation and amortization . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Extraordinary item . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Loss on operating properties held for sale/sold/transferred . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Impairment charges. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Gain on sale of development properties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Gain on sale/transfer of operating properties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Minority interests in income of partnerships, net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Equity in income of joint ventures, net. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Income from other real estate investments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Distributions from joint ventures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Cash retained from excess tax benefits. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Change in accounts and notes receivable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Change in accounts payable and accrued expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Change in other operating assets and liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Net cash flow provided by operating activities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Cash flow from investing activities: Acquisition of and improvements to operating real estate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Acquisition of and improvements to real estate under development . . . . . . . . . . . . . . . . . . . . . . Investment in marketable securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Proceeds from sale of marketable securities. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Proceeds from transferred operating/development properties . . . . . . . . . . . . . . . . . . . . . . . . . . . Investments and advances to real estate joint ventures. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Reimbursements of advances to real estate joint ventures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Other real estate investments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Reimbursements of advances to other real estate investments . . . . . . . . . . . . . . . . . . . . . . . . . . . Investment in mortgage loans receivable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Collection of mortgage loans receivable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Other investments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Reimbursements of other investments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Settlement of net investment hedges . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Proceeds from sale of operating properties. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Proceeds from sale of development properties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Net cash flow used for investing activities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Cash flow from financing activities: Principal payments on debt, excluding normal amortization of rental property debt . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Principal payments on rental property debt . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Principal payments on construction loan financings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Proceeds from mortgage/construction loan financings. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Borrowings under unsecured credit facilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Repayment of borrowings under unsecured revolving credit facilities . . . . . . . . . . . . . . . . . . . . . . . Proceeds from issuance of unsecured senior notes. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Repayment of unsecured senior notes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Financing origination costs. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Redemption of minority interests in real estate partnerships . . . . . . . . . . . . . . . . . . . . . . . . . . . . Dividends paid . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Cash retained from excess tax benefits. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Proceeds from issuance of stock. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Net cash flow provided by financing activities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Change in cash and cash equivalents. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Cash and cash equivalents, beginning of year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Cash and cash equivalents, end of year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Interest paid during the year (net of capitalized interest 206,518 — 598 147,529 (36,565) (21,800) 26,502 (132,208) (79,099) 261,993 (1,958) (9,704) (1,983) (42,126) 567,599 (266,198) (388,991) (263,985) 52,427 32,400 (219,913) 118,742 (77,455) 71,762 (68,908) 54,717 (25,466) 23,254 — 120,729 55,535 (781,350) (88,841) (14,047) (30,814) 76,025 812,329 (281,056) — (125,000) (3,300) (66,803) (469,024) 1,958 451,002 262,429 48,678 87,499 $ 136,177 of $28,753, $25,505 and $22,741, respectively) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Income taxes paid during the year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 217,629 29,652 $ 191,270 (50,265) 1,832 8,500 (40,099) (9,800) 39,992 (173,363) (64,046) 403,032 (2,471) (4,876) 1,361 (77,908) 665,989 (1,077,202) (640,934) (55,235) 35,525 69,869 (413,172) 293,537 (192,890) 87,925 (97,592) 94,720 (26,688) 55,361 — 59,450 299,715 (1,507,611) (82,337) (14,014) (78,295) 413,488 627,369 (343,553) 300,000 (250,000) (10,819) (80,972) (384,502) 2,471 485,220 584,056 (257,566) 345,065 87,499 215,121 14,292 $ $ $ 144,767 — 1,421 — (37,276) (77,300) 27,751 (106,930) (54,494) 152,099 (2,926) (17,778) 38,619 (40,643) 455,569 (547,001) (619,083) (86,463) 83,832 1,186,851 (472,666) 183,368 (254,245) 74,677 (154,894) 125,003 (123,609) 16,113 (953) 110,404 232,445 (246,221) (61,758) (11,062) (79,399) 174,087 317,661 (653,219) 478,947 (185,000) (11,442) (31,554) (332,552) 2,926 451,809 59,444 268,792 76,273 345,065 153,664 9,350 $ $ $ The accompanying notes are an integral part of these consolidated financial statements. 81 KIMCO REALTY CORPORATION AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS Amounts relating to the number of buildings, square footage, tenant and occupancy data and estimated project costs are unaudited. 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES: Business Kimco Realty Corporation (the “Company” or “Kimco”), its subsidiaries, affiliates and related real estate joint ventures are engaged principally in the operation of neighborhood and community shopping centers which are anchored generally by discount department stores, supermarkets or drugstores. The Company also provides property management services for shopping centers owned by affiliated entities, various real estate joint ventures and unaffiliated third parties. Additionally, in connection with the Tax Relief Extension Act of 1999 (the “RMA”), which became effective January 1, 2001, the Company is permitted to participate in activities which it was precluded from previously in order to maintain its qualification as a Real Estate Investment Trust (“REIT”), so long as these activities are conducted in entities which elect to be treated as taxable subsidiaries under the Internal Revenue Code, as amended (the “Code”), subject to certain limitations. As such, the Company, through its taxable REIT subsidiaries, is engaged in various retail real estate related opportunities including (i) merchant building through its wholly-owned taxable REIT subsidiaries(“TRS”), which are primarily engaged in the ground-up development of neighborhood and community shopping centers and the subsequent sale thereof upon completion, (ii) retail real estate advisory and disposition services which primarily focuses on leasing and disposition strategies of retail real estate controlled by both healthy and distressed and/or bankrupt retailers and (iii) acting as an agent or principal in connection with tax deferred exchange transactions. The Company seeks to reduce its operating and leasing risks through diversification achieved by the geographic distribution of its properties, avoiding dependence on any single property and a large tenant base. At December 31, 2008, the Company’s single largest neighborhood and community shopping center accounted for only 1.0% of the Company’s annualized base rental revenues and only 0.9% of the Company’s total shopping center gross leasable area (“GLA”). At December 31, 2008, the Company’s five largest tenants were The Home Depot, TJX Companies, Sears Holdings, Kohl’s and Wal-Mart, which represented approximately 3.3%, 2.8%, 2.5%, 2.2% and 1.8%, respectively, of the Company’s annualized base rental revenues, including the proportionate share of base rental revenues from properties in which the Company has less than a 100% economic interest. The principal business of the Company and its consolidated subsidiaries is the ownership, development, management and operation of retail shopping centers, including complementary services that capitalize on the Company’s established retail real estate expertise. The Company does not distinguish its principal business or group its operations on a geographical basis for purposes of measuring performance. Accordingly, the Company believes it has a single reportable segment for disclosure purposes in accordance with accounting principles generally accepted in the United States of America (“GAAP”). Principles of Consolidation and Estimates The accompanying Consolidated Financial Statements include the accounts of the Company, its subsidiaries, all of which are wholly-owned, and all entities in which the Company has a controlling interest, including where the Company has been determined to be a primary beneficiary of a variable interest entity in accordance with the provisions and guidance of Interpretation No. 46(R), Consolidation of Variable Interest Entities (“FIN 46(R)”) or meets certain criteria of a sole general partner or managing member as identified in accordance with Emerging Issues Task Force (“EITF”) Issue 04-5, Investor’s Accounting for an Investment in a Limited Partnership when the Investor is the Sole General Partner and the Limited Partners have Certain Rights (“EITF 04-5”). All intercompany balances and transactions have been eliminated in consolidation. GAAP requires the Company’s management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities and the reported amounts of revenues and expenses during a reporting period. The most significant assumptions and estimates relate to the valuation of real estate and related intangible assets and liabilities, the assessment of impairments of real estate and related intangible assets and 82 KIMCO REALTY CORPORATION AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, CONTINUED liabilities, equity method investments, marketable securities and other investments, as well as, depreciable lives, revenue recognition, the collectability of trade accounts receivable and the realizability of deferred tax assets. Application of these assumptions requires the exercise of judgment as to future uncertainties, and, as a result, actual results could differ from these estimates. Minority Interests Minority interests represent the portion of equity that the Company does not own in those entities it consolidates as a result of having a controlling interest or determined that the Company was the primary beneficiary of a variable interest entity in accordance with the provisions and guidance of FIN 46(R). Minority interests also include partnership units issued from consolidated subsidiaries of the Company in connection with certain property acquisitions. These units have a stated redemption value or a redemption amount based upon the Adjusted Current Trading Price, as defined, of the Company’s common stock (“Common Stock”) and provide the unit holders various rates of return during the holding period. The unit holders generally have the right to redeem their units for cash at any time after one year from issuance. The Company typically has the option to settle redemption amounts in cash or Common Stock for the issuance of convertible units. The Company evaluates the terms of the partnership units issued in accordance with Statement of Financial Accounting Standards (“SFAS”) No. 150, Accounting for Certain Financial Instruments with Characteristics of Both Liabilities and Equity, and EITF D-98, Classification and Measurement of Redeemable Securities, to determine if the units are mandatorily redeemable and as such accounts for them accordingly. The acquisitions of minority interests, through the redemption of redeemable units, for shares of Common Stock are recorded under the purchase method at the fair market value of the Common Stock on the date of acquisition. The acquisition amounts are allocated to the underlying total assets of the Company based on their estimated fair values. Real Estate Real estate assets are stated at cost, less accumulated depreciation and amortization. If there is an event or a change in circumstances that indicates that the basis of a property (including any related amortizable intangible assets or liabilities) may not be recoverable, then management will assess any impairment in value by making a comparison of (i) the current and projected operating cash flows (undiscounted and without interest charges) of the property over its estimated holding period, and (ii) the net carrying amount of the property. If the current and projected operating cash flows (undiscounted and without interest charges) are less than the carrying value of the property, the carrying value would be adjusted to an amount to reflect the estimated fair value of the property. When a real estate asset is identified by management as held-for-sale, the Company ceases depreciation of the asset and estimates the sales price, net of selling costs. If, in management’s opinion, the net sales price of the asset is less than the net book value of the asset, an adjustment to the carrying value would be recorded to reflect the estimated fair value of the property. Upon acquisition of real estate operating properties, the Company estimates the fair value of acquired tangible assets (consisting of land, building, building improvements and tenant improvements) and identified intangible assets and liabilities (consisting of above and below-market leases, in-place leases and tenant relationships), assumed debt and redeemable units issued in accordance with SFAS No. 141, Business Combinations (“SFAS No. 141”), at the date of acquisition, based on evaluation of information and estimates available at that date. Based on these estimates, the Company allocates the initial purchase price to the applicable assets and liabilities. As final information regarding fair value of the assets acquired and liabilities assumed is received and estimates are refined, appropriate adjustments are made to the purchase price allocation. The allocations are finalized within twelve months of the acquisition date. The Company utilizes methods similar to those used by independent appraisers in estimating the fair value of acquired assets and liabilities. The fair value of the tangible assets of an acquired property considers the value of the property “as-if-vacant”. The fair value reflects the depreciated replacement cost of the permanent assets, with no trade fixtures included. 83 KIMCO REALTY CORPORATION AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, CONTINUED In allocating the purchase price to identified intangible assets and liabilities of an acquired property, the value of above-market and below-market leases is estimated based on the present value of the difference between the contractual amounts to be paid pursuant to the leases and management’s estimate of the market lease rates and other lease provisions (i.e., expense recapture, base rental changes, etc.) measured over a period equal to the estimated remaining term of the lease. The capitalized above-market or below-market intangible is amortized to rental income over the estimated remaining term of the respective leases. Mortgage debt premiums are amortized into interest expense over the remaining term of the related debt instrument. Unit discounts and premiums are amortized into Minority interest in income, net over the period from the date of issuance to the earliest redemption date of the units. In determining the value of in-place leases, management considers current market conditions and costs to execute similar leases in arriving at an estimate of the carrying costs during the expected lease-up period from vacant to existing occupancy. In estimating carrying costs, management includes real estate taxes, insurance, other operating expenses, estimates of lost rental revenue during the expected lease-up periods and costs to execute similar leases including leasing commissions, legal and other related costs based on current market demand. In estimating the value of tenant relationships, management considers the nature and extent of the existing tenant relationship, the expectation of lease renewals, growth prospects and tenant credit quality, among other factors. The value assigned to in-place leases and tenant relationships is amortized over the estimated remaining term of the leases. If a lease were to be terminated prior to its scheduled expiration, all unamortized costs relating to that lease would be written off. Depreciation and amortization are provided on the straight-line method over the estimated useful lives of the assets, as follows: Buildings and building improvements Fixtures, leasehold and tenant improvements (including certain identified intangible assets) 15 to 50 years Terms of leases or useful lives, whichever is shorter Expenditures for maintenance and repairs are charged to operations as incurred. Significant renovations and replacements, which improve and extend the life of the asset, are capitalized. The useful lives of amortizable intangible assets are evaluated each reporting period with any changes in estimated useful lives being accounted for over the revised remaining useful life. Real Estate Under Development Real estate under development represents both the ground-up development of neighborhood and community shopping center projects which are subsequently sold upon completion and projects which the Company may hold as long-term investments. These properties are carried at cost. The cost of land and buildings under development includes specifically identifiable costs. The capitalized costs include pre-construction costs essential to the development of the property, development costs, construction costs, interest costs, real estate taxes, salaries and related costs of personnel directly involved and other costs incurred during the period of development. The Company ceases cost capitalization when the property is held available for occupancy upon substantial completion of tenant improvements, but no later than one year from the completion of major construction activity. If, in management’s opinion, the net sales price of assets held for resale or the current and projected undiscounted cash flows of these assets to be held as long-term investments is less than the net carrying value, the carrying value would be adjusted to an amount to reflect the estimated fair value of the property. Investments in Unconsolidated Joint Ventures The Company accounts for its investments in unconsolidated joint ventures under the equity method of accounting as the Company exercises significant influence, but does not control these entities. These investments are recorded initially at cost and subsequently adjusted for cash contributions and distributions. Earnings for each investment are recognized in accordance with each respective investment agreement and where applicable, based upon an allocation of the investment’s net assets at book value as if the investment was hypothetically liquidated at the end of each reporting period. 84 KIMCO REALTY CORPORATION AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, CONTINUED The Company’s joint ventures and other real estate investments primarily consist of co-investments with institutional and other joint venture partners in neighborhood and community shopping center properties, consistent with its core business. These joint ventures typically obtain non-recourse third-party financing on their property investments, thus contractually limiting the Company’s exposure to losses primarily to the amount of its equity investment; and due to the lender’s exposure to losses, a lender typically will require a minimum level of equity in order to mitigate its risk. The Company’s exposure to losses associated with its unconsolidated joint ventures is primarily limited to its carrying value in these investments. The Company, on a selective basis, obtains unsecured financing for certain joint ventures. These unsecured financings are guaranteed by the Company with guarantees from the joint venture partners for their proportionate amounts of any guaranty payment the Company is obligated to make. On a continuous basis, management assesses whether there are any indicators, including the underlying investment property operating performance and general market conditions, that the value of the Company’s investments in unconsolidated joint ventures may be impaired. An investment’s value is impaired only if management’s estimate of the fair value of the investment is less than the carrying value of the investment and such difference is deemed to be other- than-temporary. To the extent impairment has occurred, the loss shall be measured as the excess of the carrying amount of the investment over the estimated fair value of the investment. The Company’s estimated fair values are based upon a discounted cash flow model for each specific property that includes all estimated cash inflows and outflows over a specified holding period. Capitalization rates and discount rates utilized in these models are based upon rates that the Company believes to be within a reasonable range of current market rates for each respective property. Other Real Estate Investments Other real estate investments primarily consist of preferred equity investments for which the Company provides capital to developers and owners of real estate. The Company typically accounts for its preferred equity investments on the equity method of accounting, whereby earnings for each investment are recognized in accordance with each respective investment agreement and based upon an allocation of the investment’s net assets at book value as if the investment was hypothetically liquidated at the end of each reporting period. On a continuous basis, management assesses whether there are any indicators, including the underlying investment property operating performance and general market conditions, that the value of the Company’s Other real estate investments may be impaired. An investment’s value is impaired only if management’s estimate of the fair value of the investment is less than the carrying value of the investment and such difference is deemed to be other-than-temporary. To the extent impairment has occurred, the loss shall be measured as the excess of the carrying amount of the investment over the estimated fair value of the investment. The Company’s estimated fair values are based upon a discounted cash flow model for each specific property that includes all estimated cash inflows and outflows over a specified holding period. Capitalization rates and discount rates utilized in these models are based upon rates that the Company believes to be within a reasonable range of current market rates for each respective property. Mortgages and Other Financing Receivables Mortgages and other financing receivables consist of loans acquired and loans originated by the Company. Loan receivables are recorded at stated principal amounts net of any discount or premium or deferred loan origination costs or fees. The related discounts or premiums on mortgages and other loans purchased are amortized or accreted over the life of the related loan receivable. The Company defers certain loan origination and commitment fees, net of certain origination costs and amortizes them as an adjustment of the loan’s yield over the term of the related loan. The Company evaluates the collectability of both interest and principal on each loan to determine whether it is impaired. A loan is considered to be impaired, when based upon current information and events, it is probable that the Company will be unable to collect all amounts due according to the existing contractual terms. When a loan is considered to be impaired, the amount of loss is calculated by comparing the recorded investment to the value determined by discounting the expected future cash flows at the loan’s effective interest rate or to the value of the underlying collateral if the loan is collateralized. Interest income on performing loans is accrued as earned. Interest income on impaired loans is recognized on a cash basis. 85 KIMCO REALTY CORPORATION AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, CONTINUED Cash and Cash Equivalents Cash and cash equivalents (demand deposits in banks, commercial paper and certificates of deposit with original maturities of three months or less) includes tenants’ security deposits, escrowed funds and other restricted deposits approximating $12.5 million and $6.7 million for the years ended December 31, 2008 and 2007, respectively. Cash and cash equivalent balances may, at a limited number of banks and financial institutions, exceed insurable amounts. The Company believes it mitigates risk by investing in or through major financial institutions and primarily in funds that are currently U.S. federal government insured. Recoverability of investments is dependent upon the performance of the issuers. Marketable Securities The Company classifies its existing marketable equity securities as available-for-sale in accordance with the provisions of SFAS No. 115, Accounting for Certain Investments in Debt and Equity Securities. These securities are carried at fair market value with unrealized gains and losses reported in stockholders’ equity as a component of Accumulated other comprehensive income (“OCI”). Gains or losses on securities sold are based on the specific identification method. All debt securities are generally classified as held-to-maturity because the Company has the positive intent and ability to hold the securities to maturity. Held-to-maturity securities are stated at amortized cost, adjusted for amortization of premiums and accretion of discounts to maturity. Debt securities which contain conversion features generally are classified as available-for-sale. On a continuous basis, management assesses whether there are any indicators that the value of the Company’s marketable securities may be impaired. A marketable security is impaired if the fair value of the security is less than the carrying value of the security and such difference is deemed to be other-than-temporary. To the extent impairment has occurred, the loss shall be measured as the excess of the carrying amount of the security over the estimated fair value in the security. Deferred Leasing and Financing Costs Costs incurred in obtaining tenant leases and long-term financing, included in deferred charges and prepaid expenses in the accompanying Consolidated Balance Sheets, are amortized over the terms of the related leases or debt agreements, as applicable. Such capitalized costs include salaries and related costs of personnel directly involved in successful leasing efforts. Revenue Recognition and Accounts Receivable Base rental revenues from rental property are recognized on a straight-line basis over the terms of the related leases. Certain of these leases also provide for percentage rents based upon the level of sales achieved by the lessee. These percentage rents are recognized once the required sales level is achieved. Rental income may also include payments received in connection with lease termination agreements. In addition, leases typically provide for reimbursement to the Company of common area maintenance costs, real estate taxes and other operating expenses. Operating expense reimbursements are recognized as earned. Management and other fee income consists of property management fees, leasing fees, property acquisition and disposition fees, development fees and asset management fees. These fees arise from contractual agreements with third parties or with entities in which the Company has a partial non-controlling interest. Management and other fee income, including acquisition and disposition fees, are recognized as earned under the respective agreements. Management and other fee income related to partially owned entities are recognized to the extent attributable to the unaffiliated interest. Gains and losses from the sale of depreciated operating property and ground-up development projects are generally recognized using the full accrual method in accordance with SFAS No. 66, Accounting for Sales of Real Estate (“SFAS No. 66”), provided that various criteria relating to the terms of sale and subsequent involvement by the Company with the properties are met. 86 KIMCO REALTY CORPORATION AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, CONTINUED Gains and losses on transfers of operating properties result from the sale of a partial interest in properties to unconsolidated joint ventures and are recognized using the partial sale provisions of SFAS No. 66. The Company makes estimates of the uncollectability of its accounts receivable related to base rents, expense reimbursements and other revenues. The Company analyzes accounts receivable and historical bad debt levels, customer credit worthiness and current economic trends when evaluating the adequacy of the allowance for doubtful accounts. In addition, tenants in bankruptcy are analyzed and estimates are made in connection with the expected recovery of pre- petition and post-petition claims. The Company’s reported net income is directly affected by management’s estimate of the collectability of accounts receivable. Income Taxes The Company has made an election to qualify, and believes it is operating so as to qualify, as a REIT for federal income tax purposes. Accordingly, the Company generally will not be subject to federal income tax, provided that distributions to its stockholders equal at least the amount of its REIT taxable income as defined under Section 856 through 860 of the Code. In connection with the RMA, which became effective January 1, 2001, the Company is permitted to participate in certain activities which it was previously precluded from in order to maintain its qualification as a REIT, so long as these activities are conducted in entities which elect to be treated as taxable subsidiaries under the Code. As such, the Company is subject to federal and state income taxes on the income from these activities. Income taxes are accounted for under the asset and liability method. Deferred tax assets and liabilities are recognized for the estimated future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases and operating loss and tax credit carry-forwards. Deferred tax assets and liabilities are measured using enacted tax rates in effect for the year in which those temporary differences are expected to be recovered or settled. The Company provides a valuation allowance for deferred tax assets for which it does not consider realization of such assets to be more likely than not. Foreign Currency Translation and Transactions Assets and liabilities of the Company’s foreign operations are translated using year-end exchange rates, and revenues and expenses are translated using exchange rates as determined throughout the year. Gains or losses resulting from translation are included in OCI, as a separate component of the Company’s stockholders’ equity. Gains or losses resulting from foreign currency transactions are translated to local currency at the rates of exchange prevailing at the dates of the transactions. The effect of the transactions gain or loss is included in the caption Other income, net in the Consolidated Statements of Income. Derivative/Financial Instruments The Company measures its derivative instruments at fair value and records them in the Consolidated Balance Sheet as an asset or liability, depending on the Company’s rights or obligations under the applicable derivative contract. In addition, the fair value adjustments will be recorded in either stockholders’ equity or earnings in the current period based on the designation of the derivative. The effective portions of changes in fair value of cash flow hedges are reported in OCI and are subsequently reclassified into earnings when the hedged item affects earnings. Changes in the fair value of foreign currency hedges that are designated and effective as net investment hedges are included in the cumulative translation component of OCI to the extent they are economically effective and are subsequently reclassified to earnings when the hedged investments are sold or otherwise disposed of. The changes in fair value of derivative instruments which are not designated as hedging instruments and the ineffective portions of hedges are recorded in earnings for the current period. The Company utilizes derivative financial instruments to reduce exposure to fluctuations in interest rates, foreign currency exchange rates and market fluctuations on equity securities. The Company has established policies and procedures for risk assessment and the approval, reporting and monitoring of derivative financial instrument activities. The Company has not entered, and does not plan to enter, into financial instruments for trading or speculative purposes. Additionally, the Company has a policy of only entering into derivative contracts with major financial institutions. 87 KIMCO REALTY CORPORATION AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, CONTINUED The principal financial instruments used by the Company are interest rate swaps, foreign currency exchange forward contracts, cross-currency swaps and warrant contracts. These derivative instruments were designated and qualified as cash flow, fair value or foreign currency hedges (see Note 16). Earnings Per Share The following table sets forth the reconciliation of earnings and the weighted average number of shares used in the calculation of basic and diluted earnings per share (amounts presented in thousands, except per share data): Computation of Basic Earnings Per Share: Income from continuing operations before extraordinary gain . . . . . . . . . . Gain on transfer of operating properties . . . . . . . . . . . . . . . . . . . . . . . . . . . Gain on sale of operating properties, net of tax . . . . . . . . . . . . . . . . . . . . . . Preferred stock dividends . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Income from continuing operations before extraordinary gain applicable to common shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Income from discontinued operations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Extraordinary gain . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Net income applicable to common shares . . . . . . . . . . . . . . . . . . . . . . . . . . Weighted average common shares outstanding . . . . . . . . . . . . . . . . . . . . . . Basic Earnings Per Share: Income from continuing operations before extraordinary gain . . . . . . . . . . Income from discontinued operations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Extraordinary gain . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Net income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Computation of Diluted Earnings Per Share: Income from continuing operations before extraordinary gain applicable to common shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Distributions on convertible units (a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Income from continuing operations for diluted earnings per share . . . . . . Income from discontinued operations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Extraordinary gain . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Net income for diluted earnings per common share . . . . . . . . . . . . . . . . . . Weighted average common shares outstanding – Basic . . . . . . . . . . . . . . . Effect of dilutive securities: Stock options/deferred stock awards . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Assumed conversion of convertible units (a) . . . . . . . . . . . . . . . . . . . . . . . . Shares for diluted earnings per common share . . . . . . . . . . . . . . . . . . . . . . Diluted Earnings Per Share: Income from continuing operations before extraordinary gain . . . . . . . . . . Income from discontinued operations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Extraordinary gain . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Net income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2008 2007 2006 $ 223,404 1,195 587 (47,288) $ 356,283 — 2,708 (19,659) $ 340,330 1,394 1,066 (11,638) 177,898 24,716 — $ 202,614 257,811 $ $ 0.69 0.10 — 0.79 $ 177,898 18 177,916 24,716 — $ 202,632 257,811 999 33 258,843 $ $ 0.69 0.09 — 0.78 339,332 33,574 50,265 $ 423,171 252,129 $ $ 1.35 0.13 0.20 1.68 $ 339,332 — 339,332 33,574 50,265 $ 423,171 252,129 4,929 — 257,058 $ $ 1.32 0.13 0.20 1.65 331,152 85,469 — $ 416,621 239,552 $ $ 1.38 0.36 — 1.74 $ 331,152 — 331,152 85,469 — $ 416,621 239,552 5,063 — 244,615 $ $ 1.35 0.35 — 1.70 (a) The effect of the assumed conversion of certain convertible units had an anti-dilutive effect upon the calculation of Income from continuing operations before extraordinary gain per share. Accordingly, the impact of such conversions has not been included in the determination of diluted earnings per share calculations. 88 KIMCO REALTY CORPORATION AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, CONTINUED In addition, there were approximately 13,731,767, 3,017,400, and 71,250, stock options that were anti-dilutive as of December 31, 2008, 2007 and 2006, respectively. Stock Compensation The Company maintains an equity participation plan (the “Plan”) pursuant to which a maximum of 47,000,000 shares of the Company’s common stock may be issued for qualified and non-qualified options and restricted stock grants. Unless otherwise determined by the Board of Directors at its sole discretion, options granted under the Plan generally vest ratably over a range of three to five years, expire ten years from the date of grant and are exercisable at the market price on the date of grant. Restricted stock grants vest 100% on the fourth or fifth anniversary of the grant. In addition, the Plan provides for the granting of certain options and restricted stock to each of the Company’s non-employee directors (the “Independent Directors”) and permits such Independent Directors to elect to receive deferred stock awards in lieu of directors’ fees. The Company accounts for stock options in accordance with SFAS No. 123 (revised 2004), “Share-Based Payment” (“SFAS No. 123R”). SFAS 123R requires that all share based payments to employees, including grants of employee stock options, be recognized in the statement of operations over the service period based on their fair values. Fair value is determined using the Black-Scholes option pricing formula, intended to estimate the fair value of the awards at the grant date. (See footnote 21 for additional disclosure on the assumptions and methodology.) New Accounting Pronouncements In September 2006, the FASB issued Statement of Financial Accounting Standards (“SFAS”) No. 157, Fair Value Measurement (“SFAS No. 157”), which defines fair value, establishes a framework for measuring fair value and expands disclosures about fair value measurement. This statement is effective for financial statements issued for fiscal years beginning after November 15, 2007. During February 2008, the FASB issued two Staff Positions that (i) partially deferred the effective date of SFAS No. 157 for one year for certain nonfinancial assets and nonfinancial liabilities and (ii) removed certain leasing transactions from the scope of SFAS No. 157. The impact of partially adopting SFAS No. 157 did not have a material impact on the Company’s financial position or results of operations. (See footnote 15 for additional disclosure). In February 2007, the FASB issued SFAS No. 159, The Fair Value Option for Financial Assets and Financial Liabilities (“SFAS No. 159”). SFAS No. 159 permits entities to choose to measure many financial assets and financial liabilities at fair value. Unrealized gains and losses on items for which the fair value option has been elected are reported in earnings. SFAS No. 159 is effective for fiscal years beginning after November 15, 2007. The impact of adopting SFAS No. 159 did not have a material impact on the Company’s financial position or results of operations, as the Company did not elect the fair value option for its financial assets and liabilities. In December 2007, the FASB issued SFAS No. 141 (revised 2007), Business Combinations (“SFAS No. 141(R)”). The objective of this statement is to improve the relevance, representational faithfulness and comparability of the information that a reporting entity provides in its financial reports about a business combination and its effects. To accomplish that, this statement establishes principles and requirements for how the acquirer: (i) recognizes and measures in its financial statements the identifiable assets acquired, the liabilities assumed, and any non-controlling interest in the acquiree, (ii) recognizes and measures the goodwill acquired in the business combination or a gain from a bargain purchase, (iii) determines what information to disclose to enable users of the financial statements to evaluate the nature and financial effects of the business combination and (iv) requires expensing of transaction costs associated with a business combination. This statement applies prospectively to business combinations for which the acquisition date is on or after the first annual reporting period beginning on or after December 15, 2008. An entity may not apply it before that date. The impact the adoption of SFAS No. 141(R) will have on the Company’s financial position and results of operations will be dependent upon the volume of business combinations entered into by the Company. In December 2007, the FASB issued SFAS No. 160, “Non-controlling Interests in Consolidated Financial Statements” (“FAS 160”). FAS 160 establishes accounting and reporting standards that require the ownership interests in subsidiaries held by parties other than the parent be clearly identified, labeled and presented in the consolidated statement of financial position within equity, but separate from the parent’s equity; the amount of consolidated net income attributable to the parent and to the non-controlling interest be clearly identified and presented on the face of the consolidated statement of 89 KIMCO REALTY CORPORATION AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, CONTINUED income; changes in a parent’s ownership interest while the parent retains its controlling financial interest in its subsidiary be accounted for consistently; when a subsidiary is deconsolidated, any retained non-controlling equity investment in the former subsidiary be initially measured at fair value; and entities provide sufficient disclosures that clearly identify and distinguish between the interests of the parent and the interests of the non-controlling owners. The objective of the guidance is to improve the relevance, comparability and transparency of the financial information that a reporting entity provides in its consolidated financial statements. FAS 160 is effective for fiscal years beginning on or after December 15, 2008. Earlier adoption is prohibited. The impact the adoption of SFAS No. 160 will have on the Company’s financial position and results of operations, will be dependent upon the volume of transactions which will specifically be impacted by this pronouncement. In March 2008, the FASB issued FAS 161, “Disclosures about Derivative Instruments and Hedging Activities an amendment of FASB Statement No. 133”, (“SFAS No. 161”) which amends and expands the disclosure requirements of FAS 133 to require qualitative disclosure about objectives and strategies for using derivatives, quantitative disclosures about fair value amounts of gains and losses on derivative instruments, and disclosures about credit-risk-related contingent features in derivative agreements. SFAS No. 161 is to be applied prospectively for the first annual reporting period beginning on or after November 15, 2008, with early application encouraged. SFAS No. 161 also encourages, but does not require, comparative disclosures for earlier periods at initial adoption. The adoption of SFAS No. 161 is not expected to have a material impact on the Company’s disclosures. In April 2008, the FASB issued FSP No. FAS 142-3, Determination of the Useful Life of Intangible Assets (“FSP 142-3”). FSP 142-3 removes the requirement under SFAS No. 142, Goodwill and Other Intangible Assets to consider whether an intangible asset can be renewed without substantial cost or material modifications to the existing terms and conditions, and replaces it with a requirement that an entity consider its own historical experience in renewing similar arrangements, or a consideration of market participant assumptions in the absence of historical experience. FSP 142-3 also requires entities to disclose information that enables users of financial statements to assess the extent to which the expected future cash flows associated with the asset are affected by the entity’s intent and/or ability to renew or extend the arrangement. FSP 142-3 is effective for fiscal years beginning on or after December 15, 2008. Earlier adoption is prohibited. The adoption of FSP 142-3 is not expected to have a material impact on the Company’s financial position and results of operations. In June 2008, the FASB issued FASB Staff Position No. EITF 03-6-1, “Determining Whether Instruments Granted in Share-Based Payment Transactions Are Participating Securities,” (“EITF 03-6-1”), which classifies unvested share- based payment awards that contain non-forfeitable rights to dividends or dividend equivalents (whether paid or unpaid) as participating securities and requires them to be included in the computation of earnings per share pursuant to the two-class method described in SFAS No. 128, “Earnings per Share.” EITF 03-6-1 is effective for financial statements issued for fiscal years beginning after December 15, 2008. Earlier adoption is prohibited. All prior-period earnings per share data presented are to be adjusted retrospectively. The Company adoption of EITF 03-6-1 is not expected to have a material impact on the Company’s financial position and results of operations. In December 2008, the FASB issued FSP FAS 140-4 and FIN46(R)-8, Disclosures by Public Entities (Enterprises) about Transfers of Financial Assets and Interests in Variable Interest Entities, which promptly improves disclosures by public companies until the pending amendments to FASB Statement No. 140, Accounting for Transfers and Servicing of Financial Assets and Extinguishments of Liabilities (“SFAS No. 140”), and FIN 46(R), are finalized and approved by the Board. The FSP amends SFAS No. 140 to require public companies to provide additional disclosures about transfers of financial assets and variable interests in qualifying special-purpose entities. It also amends FIN 46(R) to require public companies to provide additional disclosures about their involvement with variable interest entities. This FSP is effective for reporting periods ending after December 15, 2008. (See footnotes 3, 7 and 8 for additional disclosure). Reclassifications Certain reclassifications have been made to the 2007 balances to conform to the 2008 presentation. 90 KIMCO REALTY CORPORATION AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, CONTINUED 2. REAL ESTATE: The Company’s components of Rental property consist of the following (in thousands): Land . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Buildings and improvements Buildings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Building improvements . . . . . . . . . . . . . . . . . . . . Tenant improvements . . . . . . . . . . . . . . . . . . . . . . Fixtures and leasehold improvements . . . . . . . . . Other rental property (1) . . . . . . . . . . . . . . . . . . . Accumulated depreciation and amortization . . . . . . . Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . December 31, 2008 $ 1,395,645 2007 $ 1,262,879 3,847,544 692,040 633,883 35,377 245,452 6,849,941 (1,159,664) $ 5,690,277 3,559,465 566,720 549,490 33,932 208,143 6,180,629 (977,444) $ 5,203,185 (1) At December 31, 2008 and 2007, Other rental property consisted of intangible assets including $161,556 and $130,598 respectively, of in-place leases, $22,400 and $21,555 respectively, of tenant relationships, and $61,495 and $55,991 respectively, of above-market leases. In addition, at December 31, 2008 and 2007, the Company had intangible liabilities relating to below-market leases from property acquisitions of approximately $171.4 million and $182.3 million, respectively. These amounts are included in the caption Other liabilities in the Company’s Consolidated Balance Sheets. 3. PROPERTY ACQUISITIONS, DEVELOPMENTS AND OTHER INVESTMENTS: Operating property acquisitions, ground-up development costs and other investments have been funded principally through the application of proceeds from the Company’s public equity and unsecured debt issuances, proceeds from mortgage and construction financings, availability under the Company’s revolving lines of credit and issuance of various partnership units. Operating Properties Acquisition of Operating Properties During the year December 31, 2008, the Company acquired, in separate transactions, 10 operating properties, comprising an aggregate 1.2 million square feet of a GLA, for an aggregate purchase price of approximately $215.9 million including the assumption of approximately $96.2 million of non-recourse mortgage debt encumbering four of the properties. Details of these transactions are as follows (in thousands): Total GLA Property Name Location U.S. Acquisitions: 108 West Germania . . . . . . . . . . . . . . . . . . . 1429 Walnut St . . . . . . . . . . . . . . . . . . . . . . . 168 North Michigan Ave . . . . . . . . . . . . . . . 118 Market St . . . . . . . . . . . . . . . . . . . . . . . . Alison Building . . . . . . . . . . . . . . . . . . . . . . Lorden Plaza . . . . . . . . . . . . . . . . . . . . . . . . . Milford, NH East Windsor Village . . . . . . . . . . . . . . . . . . Potomac Run Plaza . . . . . . . . . . . . . . . . . . . . Chicago, IL Philadelphia, PA Chicago, IL Philadelphia, PA Philadelphia, PA East Windsor, NJ Sterling, VA Month Acquired Jan-08 Jan-08 Jan-08 (1) Feb-08 (1) Apr-08 (1) Apr-08 May-08 (2) Sep-08 (5) Purchase Price Debt Assumed $ — $ 6,400 — — — 26,000 19,780 44,046 96,226 $ Cash 9,250 22,100 13,000 600 15,875 5,650 10,370 21,430 98,275 9,250 28,500 13,000 600 15,875 31,650 30,150 65,476 194,501 Latin American Acquisitions: Valinhos . . . . . . . . . . . . . . . . . . . . . . . . . . . . Vicuna Mackenna . . . . . . . . . . . . . . . . . . . . . Total Acquisitions . . . . . . . . . . . . . . . . . . . . . Valinhos, Brazil Santiago, Chile Jun-08 (3) Aug-08 (4) 17,384 4,025 $ 119,684 — — $ 96,226 17,384 4,025 $ 215,910 91 41 76 74 1 58 149 249 361 1,009 121 26 1,156 KIMCO REALTY CORPORATION AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, CONTINUED (1) Property is scheduled for redevelopment. (2) The Company acquired this property from a joint venture in which the Company had an approximate 15% non- controlling ownership interest. (3) The Company provided $12.2 million as part of its 70% economic interest in this newly formed joint venture for the acquisition of this operating property and land parcel. The Company has determined, under the provisions of FIN 46(R), that this joint venture is a VIE and that the Company is the primary beneficiary. As such, the Company has consolidated this entity for accounting and reporting purposes. (4) The Company provided a $3.0 million equity investment to a newly formed joint venture in which the Company has a 75% economic interest for the acquisition of this operating property and has determined under the provisions of FIN 46(R) that this joint venture is a VIE and that the Company is the primary beneficiary. As such, the Company has consolidated this entity for accounting and reporting purposes. (5) The Company acquired this property from a joint venture in which the Company holds a 20% non-controlling interest. During the year ended December 31, 2007, the Company acquired, in separate transactions, 61 operating properties, comprising an aggregate 4.4 million square feet of GLA, for an aggregate purchase price of approximately $1.1 billion including the assumption of approximately $114.3 million of non-recourse mortgage debt encumbering nine of the properties. Details of these transactions are as follows (in thousands): Purchase Price Debt Assumed Total GLA Property Name Location Month Acquired Various U.S. Acquisitions: 3 Properties . . . . . . . . . . . . . . . . . . . . . . . . . . Embry Village. . . . . . . . . . . . . . . . . . . . . . . . Atlanta, GA Park Place . . . . . . . . . . . . . . . . . . . . . . . . . . . Morrisville, NC Philadelphia, PA 35 North Third Street . . . . . . . . . . . . . . . . . . Pittsburgh, PA Cranberry Commons II . . . . . . . . . . . . . . . . Lake Grove, NY Lake Grove . . . . . . . . . . . . . . . . . . . . . . . . . . Philadelphia, PA 1628 Walnut St . . . . . . . . . . . . . . . . . . . . . . . 2 Properties . . . . . . . . . . . . . . . . . . . . . . . . . . Various Flagler Park . . . . . . . . . . . . . . . . . . . . . . . . . . Miami, FL 2 Properties . . . . . . . . . . . . . . . . . . . . . . . . . . Suburban Square . . . . . . . . . . . . . . . . . . . . . 1701 Walnut St . . . . . . . . . . . . . . . . . . . . . . . 30 West 21st St . . . . . . . . . . . . . . . . . . . . . . . Chatham Plaza . . . . . . . . . . . . . . . . . . . . . . . 2 Properties . . . . . . . . . . . . . . . . . . . . . . . . . . Birchwood Portfolio (11 Properties). . . . . . . 493-497 Commonwealth Ave . . . . . . . . . . . . 3 Properties . . . . . . . . . . . . . . . . . . . . . . . . . . Highlands Square . . . . . . . . . . . . . . . . . . . . . Mooresville Crossings . . . . . . . . . . . . . . . . . Mooresville, NC Corona Hills Marketplace . . . . . . . . . . . . . . 127-129 Newbury St . . . . . . . . . . . . . . . . . . . Talavi . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Wayne Plaza . . . . . . . . . . . . . . . . . . . . . . . . . Rockford Crossing . . . . . . . . . . . . . . . . . . . . Center at Westbank . . . . . . . . . . . . . . . . . . . . Jan-07 (1) Feb-07 Mar-07 (2) Mar-07 Mar-07 (3) Apr-07 (4) Apr-07 Apr-07 (5) Apr-07 May-07 (6) May-07 May-07 May-07 June-07 June-07 (7) July-07 July-07 July-07 (8) July-07 (9) Aug-07 Aug-07 Corona, CA Oct-07 Boston, MA Nov-07 (10) Glendale, AZ Chambersburg, PA Nov-07 (2) Dec-07 (2) Rockford, IL Dec-07 (2) Harvey, LA Various Ardmore, PA Philadelphia, PA New York, NY Savannah, GA Various Long Island, NY Boston, MA Philadelphia, PA Clearwater, FL Cash $ 22,535 46,800 10,700 2,100 1,431 31,500 3,500 62,800 95,000 36,801 215,000 12,000 6,250 44,600 16,920 92,090 5,650 60,890 4,531 41,000 32,000 11,600 12,500 6,849 3,867 11,551 890,465 $ 19,480 — 10,700 — 3,108 — — — — 16,800 — — 18,750 — — — — — — — — — — 14,289 11,033 20,149 114,309 $ 42,015 46,800 21,400 2,100 4,539 31,500 3,500 62,800 95,000 53,601 215,000 12,000 25,000 44,600 16,920 92,090 5,650 60,890 4,531 41,000 32,000 11,600 12,500 21,138 14,900 31,700 1,004,774 Latin American Acquisitions: Waldo’s Mexico Portfolio (17 properties) . . Gran Plaza Cancun . . . . . . . . . . . . . . . . . . . . Mexico Total Acquisitions . . . . . . . . . . . . . . . . . . . . . Various, Mexico Mar-07 Dec-07 51,500 38,909 $ 980,874 — — $ 114,309 51,500 38,909 $1,095,183 92 240 215 170 2 17 158 2 436 350 169 359 15 5 199 22 280 20 68 76 155 149 9 109 132 89 182 3,628 488 273 4,389 KIMCO REALTY CORPORATION AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, CONTINUED (1) Three properties acquired in separate transactions, located in Alpharetta, GA, Southlake, TX and Apopka, FL. (2) The Company acquired these properties from a joint venture in which the Company holds a 20% non-controlling interest. (3) The Company acquired this property from a venture in which the Company had a preferred equity investment. (4) The Company provided a $31.0 million preferred equity investment to a newly formed joint venture in which the Company has a 98% economic interest for the acquisition of this operating property and has determined under the provisions of FIN 46(R) that this joint venture is a VIE and that the Company is the primary beneficiary. As such, the Company has consolidated this entity for accounting and reporting purposes. (5) The Company acquired, in separate transactions, these two properties located in Chico, CA and Auburn, WA from a joint venture in which the Company holds a 15% non-controlling interest. (6) Two properties acquired in separate transactions, located in Sparks, NV and San Diego, CA. (7) Two properties acquired in separate transactions, located in Boston, MA and Philadelphia, PA. (8) Three mixed use residential/retail properties acquired in separate transactions, located in Philadelphia, PA. (9) The Company provided a $4.3 million preferred equity investment to a newly formed joint venture in which the Company has a 94% economic interest for the acquisition of this operating property and has determined under the provisions of FIN 46(R) that this joint venture is a VIE and that the Company is the primary beneficiary. As such, the Company has consolidated this entity for accounting and reporting purposes. (10) The Company acquired an additional 50% ownership interest in this operating property, as such the Company now holds a 100% interest in this property and consolidates it for financial reporting purposes. The aggregate purchase price of the above mentioned 2008 and 2007 properties have been allocated to the tangible and intangible assets and liabilities of the properties in accordance with SFAS No. 141, at the date of acquisition, based on evaluation of information and estimates available at such date. As final information regarding the fair value of the assets acquired and liabilities assumed is received and estimates are refined, appropriate adjustments will be made to the purchase price allocation. The allocations are finalized no later than twelve months from the acquisition date. The total aggregate purchase price was allocated as follows (in thousands): Land . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Buildings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Below Market Rents . . . . . . . . . . . . . . . . . . . . . . . . . . Above Market Rents . . . . . . . . . . . . . . . . . . . . . . . . . . In-Place Leases . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Other Intangibles . . . . . . . . . . . . . . . . . . . . . . . . . . . . Building Improvements . . . . . . . . . . . . . . . . . . . . . . . Tenant Improvements . . . . . . . . . . . . . . . . . . . . . . . . . Mortgage Fair Value Adjustment . . . . . . . . . . . . . . . . $ 2008 55,323 121,927 (8,926) 2,167 6,879 2,739 28,589 7,147 65 $ 215,910 $ 2007 327,970 625,640 (62,802) 13,629 41,281 10,181 105,716 35,897 (2,329) $ 1,095,183 Included within the Company’s consolidated operating properties are 10 consolidated entities that are VIE’s and for which the Company is the primary beneficiary. All of these entities have been established to own and operate real estate property. The Company’s involvement with these entities is through its majority ownership and management of the properties. These entities were deemed VIE’s primarily based on the fact that the voting rights of the equity investors is not proportional to their obligation to absorb expected losses or receive the expected residual returns of the entity and substantially all of the entity’s activities are conducted on behalf of the investor which has disproportionately few voting rights. The Company determined that it was the primary beneficiary of these VIE’s as a result of its economic ownership percentage which provides that the Company would absorb a majority of the entity’s expected losses, receive a majority of the entity’s expected residual returns, or both. 93 KIMCO REALTY CORPORATION AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, CONTINUED At December 31, 2008, total assets of these VIE’s were approximately $1.0 billion and total liabilities were approximately $552.9 million, including $323.1 million of non-recourse mortgage debt. The classification of these assets is primarily within real estate and the classification of liabilities are primarily within mortgages payable and minority interests in the Company’s consolidated balance sheets. The majority of the operations of these VIE’s are funded with cash flows generated from the properties. Three of these entities are encumbered by third party non-recourse mortgage debt aggregating approximately $323.1 million. The Company has not provided financial support to any of these VIE’s that it was not previously contractually required to provide, which consists primarily of funding any capital expenditures, including tenant improvements, which are deemed necessary to continue to operate the entity and any operating cash shortfalls that the entity may experience. Ground-Up Development The Company is engaged in ground-up development projects which consist of (i) merchant building through the Company’s wholly-owned taxable REIT subsidiaries, which develop neighborhood and community shopping centers and the subsequent sale after completion, (ii) U.S. ground-up development projects which will be held as long-term investments by the Company and (iii) various ground-up development projects located in Latin America for long-term investment. The ground-up development projects generally have significant pre-leasing prior to the commencement of construction. As of December 31, 2008, the Company had in progress a total of 47 ground-up development projects, consisting of 11 merchant building projects, of which seven are anticipated to be substantially complete during the first half of 2009, one U.S. ground-up development project, 29 ground-up development projects located throughout Mexico, three ground-up development projects located in Chile, two ground-up development projects located in Brazil and one ground-up development project located in Peru. Merchant Building During the years 2008, 2007 and 2006, the Company expended approximately $111.9 million, $269.6 million, and $287.0 million, respectively, in connection with the purchase of land and construction costs related to its merchant building projects. These costs have been funded principally through proceeds from sales of completed projects and construction loans. Long-term Investment Projects During 2008, the Company acquired (i) 5 land parcels located throughout Mexico for an aggregate purchase price of approximately 368.2 million Mexican Pesos (“MXP”) (approximately USD $33.3 million), (ii) one land parcel located in Lima, Peru for a purchase price of approximately 1.9 million Peruvian Nuevo Sol (“PEN”) (approximately USD $0.7 million), (iii) two land parcels located in Chile for a purchase price of approximately 7.9 billion CLP (approximately USD $16.1 million) and (iv) one land parcel located in Hortolandia, Brazil for a purchase price of approximately 7.4 BRL (approximately USD$ 3.2 million). These nine land parcels will be developed into retail centers aggregating approximately 1.7 million square feet of gross leasable area with a total estimated aggregate project cost of approximately USD $195.5 million. During 2008, the Company acquired, through an unconsolidated joint venture investment, 11 land parcels, in separate transactions, located in various cities throughout Mexico for an aggregate purchase price of approximately 554.9 million MXP (approximately USD $48.5 million) which will be held for investment or possible future development. Additionally, during 2008, the Company acquired, through an existing consolidated joint venture, a redevelopment property in Bronx, NY, for a purchase price of approximately $5.2 million. The property will be redeveloped into a retail center with a total estimated project cost of approximately $17.7 million. During 2007, the Company expended approximately $7.7 million in connection with the purchase of undeveloped land in Union, NJ, which will be developed into a 0.2 million square foot retail center and approximately $21.5 million in connection with the purchase of three redevelopment properties located in Bronx, NY, which will be redeveloped into mixed-use residential/retail centers aggregating 0.1 million square feet. These projects have a total estimated project cost of approximately $71.5 million. 94 KIMCO REALTY CORPORATION AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, CONTINUED During 2007, the Company acquired, in separate transactions, seven land parcels located in various cities throughout Mexico, for an aggregate purchase price of approximately MXP 865.9 million (approximately USD $78.0 million). These land parcels will be developed into retail centers aggregating approximately 2.8 million square feet of GLA, with a total estimated aggregate project cost of approximately MXP 2.3 billion (approximately USD $210.2 million). During 2007, the Company acquired, through an unconsolidated joint venture investment, two land parcels, in separate transactions, located in Mexico for an aggregate purchase price of approximately 184.8 million MXP (approximately USD $16.8 million) which will be held for investment or possible future development. During 2007, the Company acquired, through a newly formed joint venture in which the Company has a controlling ownership interest, a 0.3 million square foot development project in Neuvo Vallarta, Mexico, for a purchase price of approximately MXP 119.5 million (approximately USD $11.0 million). Total estimated project costs are approximately USD $28.3 million. During 2007, the Company acquired, through a newly formed joint venture in which the Company has a non- controlling interest, a 0.1 million square foot development project in Tuxtepec, Mexico, for a purchase price of MXP 48.6 million (approximately USD $4.4 million). Total estimated project costs are approximately USD $14.4 million. Included within the Company’s ground-up development projects are 18 consolidated entities that are VIE’s and for which the Company is the primary beneficiary. These entities were established to develop real estate property to either hold as a long-term investment or sell after completion. The Company’s involvement with these entities is through its majority ownership and management of the properties. These entities were deemed VIE’s primarily based on the fact that the equity investment at risk is not sufficient to permit the entity to finance its activities without additional financial support. The initial equity contributed to these entities was not sufficient to fully finance the real estate construction as development costs are funded by the partners throughout the construction period. The Company determined that it was the primary beneficiary of these VIE’s as a result of its economic ownership percentage which provides that the Company would absorb a majority of the entity’s expected losses, receive a majority of the entity’s expected residual returns or both. At December 31, 2008, total assets of these VIE’s were approximately $353.0 million and total liabilities were approximately $95.0 million, including $46.1 million of construction loans encumbering three of these entities. The classification of these assets is primarily within real estate and the classification of liabilities are primarily within construction loans payable and minority interests in the Company’s consolidated balance sheets. The majority of the projected development costs to be funded to these VIE’s, aggregating approximately $82.0 million, will be funded with capital contributions from the Company and when contractually obligated, the outside partner. Three of these entities have third party construction loans aggregating approximately $46.1 million. The Company has not provided financial support to the VIE that it was not previously contractually required to provide. Also included within the Company’s ground-up developments are 10 unconsolidated joint ventures, which are VIE’s for which the Company is not the primary beneficiary. These joint ventures were primarily established to develop real estate property for long-term investment. These entities were deemed VIE’s primarily based on the fact that the equity investment at risk was not sufficient to permit the entity to finance its activities without additional financial support. The initial equity contributed to these entities was not sufficient to fully finance the real estate construction as development costs are funded by the partners throughout the construction period. The Company determined that it was not the primary beneficiary of these VIE’s based on the fact that Company would receive less than a majority of the entity’s expected residual returns or expected losses. The Company’s aggregate investment in these VIE’s was approximately $127.9 million as of December 31, 2008, which is included in Real estate under development in the Company’s Consolidated Balance Sheets. The Company’s maximum exposure to loss as a result of its involvement with these VIE’s is estimated to be $217.7 million, which primarily represents the Company’s current investment and estimated future funding commitments. The Company has not provided financial support to these VIE’s that it was not previously contractually required to provide. All future costs of development will be funded with capital contributions from the Company and the outside partner in accordance with their respective ownership percentages. 95 KIMCO REALTY CORPORATION AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, CONTINUED Kimsouth On May 12, 2006, the Company acquired an additional 48% interest in Kimsouth Realty Inc. (“Kimsouth”), a joint venture investment in which the Company had previously held a 44.5% non-controlling interest, for approximately $22.9 million. As a result of this transaction, the Company’s total ownership increased to 92.5% and the Company became the controlling shareholder. The Company commenced consolidation of Kimsouth upon the closing date. The acquisition of the additional 48% ownership interest has been accounted for as a step acquisition with the purchase price being allocated to the identified assets and liabilities of Kimsouth. As of May 12, 2006, Kimsouth consisted of five properties, all of which have been subsequently sold and/or transferred. As of May 12, 2006, Kimsouth had approximately $133.0 million of net operating loss (“NOL”) carry-forwards, which could be utilized to offset future taxable income of Kimsouth. The Company evaluated the need for a valuation allowance based on projected taxable income and determined that a valuation allowance of approximately $34.2 million was required. As such, a purchase price adjustment of $17.5 million was recorded. As of December 31, 2008, Kimsouth had fully utilized its NOLs. (See Note 22 for additional information). During June 2006, Kimsouth contributed approximately $51.0 million, of which $47.2 million or 92.5% was provided by the Company, to fund its 15% non-controlling interest in a newly formed joint venture with an investment group to acquire a portion of Albertson’s Inc. To maximize investment returns, the investment group’s strategy with respect to this joint venture, includes refinancing, selling selected stores and the enhancement of operations at the remaining stores. Kimsouth accounts for this investment under the equity method of accounting. During 2007, this joint venture completed the disposition of certain operating stores and a refinancing of the remaining assets in the joint venture. As a result of these transactions, Kimsouth received a cash distribution of approximately $148.6 million. Kimsouth had a remaining capital commitment obligation to fund up to an additional $15.0 million for general purposes. This amount was included in Other liabilities in the Consolidated Balance Sheets. During March 2008, the Albertson’s partnership agreement was amended to release the Company of its remaining capital commitment obligation, as a result the Company recognized pre-tax income of $15.0 million from cash received in excess of the Company’s investment. During 2008, the Albertson’s joint venture disposed of 121 operating properties for an aggregate sales price of approximately $564.0 million, resulting in a gain of approximately $552.3 million, of which Kimsouth’s share was approximately $73.1 million. During 2008, Kimsouth recognized equity in income from the Albertson’s joint venture of approximately $64.4 million before income taxes, including the $73.1 million of gain and $15.0 million from cash received in excess of the Company’s investment. As a result of these transactions, Kimsouth fully reduced its deferred tax asset valuation allowance and utilized all of its remaining NOL carryforwards, which provided a tax benefit of approximately $3.1 million. Additionally, during 2008, the Albertson’s joint venture acquired six operating properties and four leasehold properties for approximately $26.0 million, including the assumption of approximately $5.8 million in non-recourse mortgage debt encumbering one of the properties. During the year ended December 31, 2007, Kimsouth’s income from the Albertson’s joint venture aggregated approximately $49.6 million, net of income tax. This amount includes (i) an operating loss of approximately $15.1 million, net of an income tax benefit of approximately $10.1 million, (ii) distribution in excess of Kimsouth’s investment of approximately $10.4 million, net of income tax expense of approximately $6.9 million, and (iii) an extraordinary gain of approximately $54.3 million, net of income tax expense of approximately $36.2 million, resulting from purchase price allocation adjustments as determined in accordance with SFAS No. 141. In accordance with Accounting Principles Board Opinion 18, The Equity Method of Accounting for Investments in Common Stock, the Company has classified its 15% share of the extraordinary gain, net of income taxes, as a separate component on the Company’s Consolidated Statements of Income. During 2007, Kimsouth sold its remaining property for an aggregate sales price of approximately $9.1 million. This sale resulted in a gain of approximately $7.9 million, net of income taxes. During 2007, the Albertson’s joint venture acquired two operating properties for approximately $20.3 million, including the assumption of $18.5 million in non-recourse mortgage debt. 96 KIMCO REALTY CORPORATION AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, CONTINUED 4. DISPOSITIONS OF REAL ESTATE: Operating Real Estate During 2008, the Company disposed of seven operating properties and a portion of four operating properties, in separate transactions, for an aggregate sales price of approximately $73.0 million, which resulted in an aggregate gain of approximately $20.0 million. In addition, the Company partially recognized deferred gains of approximately $1.2 million on three properties relating to their transfer and partial sale in connection with the Kimco Income Fund II transaction described below. During 2007, the Company transferred 11 operating properties to a wholly-owned consolidated entity, Kimco Income Fund II (“KIF II”), for an aggregate purchase price of approximately $278.2 million, including non-recourse mortgage debt of $180.9 million, encumbering 11 of the properties. During 2008, the Company transferred an additional three properties for $73.9 million, including $50.6 million in non-recourse mortgage debt. During 2008 the Company sold a 26.4% non-controlling ownership interest in the entity to third parties for approximately $32.5 million, which approximated the Company’s cost. The Company continues to consolidate this entity. Additionally, during 2008, the Company disposed of an operating property for approximately $21.4 million. The Company provided seller financing for approximately $3.6 million, which bears interest at 10% per annum and is scheduled to mature on May 1, 2011. Due to the terms of this financing, the Company has deferred its gain of $3.7 million from this sale. Additionally, during 2008, a consolidated joint venture in which the Company had a preferred equity investment disposed of a property for a sales price of approximately $35.0 million. As a result of this capital transaction, the Company received approximately $3.5 million of profit participation, before minority interest of approximately $1.1 million. This profit participation has been recorded as income from other real estate investments and is reflected in Income from discontinued operating properties in the Company’s Consolidated Statements of Income. During 2008, FNC Realty Corporation (“FNC”), a consolidated entity in which the Company holds a 53% controlling ownership interest, disposed of a property for a sales price of approximately $3.3 million. This transaction resulted in a pre-tax profit of approximately $2.1 million, before minority interest of $1.0 million. This income has been recorded as Income from other real estate investments in the Company’s Consolidated Statements of Income. During 2007, the Company (i) disposed of six operating properties and completed partial sales of three operating properties, in separate transactions, for an aggregate sales price of approximately $40.0 million, which resulted in an aggregate net gain of approximately $6.4 million, after income taxes of approximately $1.6 million, and (ii) transferred one operating property, which was acquired in the first quarter of 2007, to a joint venture in which the Company holds a 15% non-controlling ownership interest for an aggregate price of approximately $4.5 million, which represented the net book value. During 2007, FNC disposed of, in separate transactions, seven properties and completed the partial sale of an additional property for an aggregate sales price of $10.4 million. These transactions resulted in pre-tax profits of approximately $4.7 million, before minority interest of $3.3 million. Additionally, during 2007, two consolidated joint ventures in which the Company had preferred equity investments disposed of, in separate transactions, their respective properties for an aggregate sales price of approximately $66.5 million. As a result of these capital transactions, the Company received approximately $22.1 million of profit participation, before minority interest of approximately $5.6 million. This profit participation has been recorded as income from other real estate investments and is reflected in Income from discontinued operating properties in the Company’s Consolidated Statements of Income. During 2006, the Company disposed of (i) 28 operating properties and one ground lease for an aggregate sales price of approximately $270.5 million, which resulted in an aggregate net gain of approximately $71.7 million, net of income taxes of $2.8 million relating to the sale of two properties, and (ii) transferred five operating properties, to joint ventures in which the Company has 20% non-controlling interests for an aggregate price of approximately $95.4 million, which resulted in a gain of approximately $1.4 million from one transferred property. 97 KIMCO REALTY CORPORATION AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, CONTINUED During November 2006, the Company disposed of a vacant land parcel located in Bel Air, MD, for approximately $1.8 million resulting in a $1.6 million gain on sale. This gain is included in Other income (expense), net on the Company’s Consolidated Statements of Income. Merchant Building During 2008, the Company sold, in separate transactions, (i) two completed merchant building projects, (ii) 21 out-parcels, (iii) a partial sale of one project and (iv) a partnership interest in one project for aggregate proceeds of approximately $73.5 million and received approximately $4.1 million of proceeds from completed earn-out requirements on three previously sold merchant building projects. These sales resulted in gains of approximately $21.9 million, after income taxes of $14.6 million. During 2007, the Company sold, in separate transactions, (i) four of its recently completed merchant building projects, (ii) 26 out-parcels, (iii) 74.3 acres of undeveloped land and (iv) completed partial sales of two projects, for an aggregate total proceeds of approximately $310.5 million and received approximately $3.3 million of proceeds from completed earn-out requirements on previously sold projects. These sales resulted in pre-tax gains of approximately $40.1 million. During 2006, the Company sold, in separate transactions, six of its recently completed projects, its partnership interest in one project and 30 out-parcels for approximately $260.0 million. These sales resulted in pre-tax gains of approximately $37.3 million. 5. ADJUSTMENT OF PROPERTY CARRYING VALUES: During 2008, as part of the Company’s ongoing analysis of its merchant building projects, the Company had determined that for two of its projects, located in Middelburg, FL and Miramar, FL, the estimated recoverable value will not exceed their estimated cost. This is primarily due to continued adverse changes in local market conditions and the uncertainty of their recovery in the future. As a result, the Company has recorded an aggregate pre-tax adjustment of property carrying value on these projects of $7.9 million, representing the excess of the carrying values of the projects over their estimated fair values. The Company’s estimated fair values are based upon a discounted cash flow model for each specific property that includes all estimated cash inflows and outflows over a specified holding period. Capitalization rates and discount rates utilized in these models are based upon rates that the Company believes to be within a reasonable range of current market rates for each respective property. During 2007, the Company’s analysis of its merchant building projects resulted in an aggregate pre-tax adjustment of property carrying value for two of its projects, located in Jacksonville, FL and Anchorage, AK, of $8.5 million, representing the excess of the carrying values of the projects over their estimated fair values. This adjustment was also due to adverse changes in local market conditions and the uncertainty of recovery in the future. 6. DISCONTINUED OPERATIONS AND ASSETS HELD FOR SALE: The Company reports as discontinued operations assets held-for-sale as of the end of the current period and assets sold during the period. All results of these discontinued operations are included in a separate component of income on the Consolidated Statements of Income under the caption Discontinued operations. This has resulted in certain reclassifications of 2008, 2007 and 2006 financial statement amounts. 98 KIMCO REALTY CORPORATION AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, CONTINUED The components of Income from discontinued operations for each of the three years in the period ended December 31, 2008, are shown below. These include the results of operations through the date of each respective sale for properties sold during 2008, 2007 and 2006 and a full year of operations for those assets classified as held-for-sale as of December 31, 2008 (in thousands): Discontinued operations: Revenues from rental property . . . . . . . . . . . . . . . . . . Rental property expenses . . . . . . . . . . . . . . . . . . . . . . Depreciation and amortization . . . . . . . . . . . . . . . . . . Interest expense . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Income from other real estate investments . . . . . . . . Other income/(expenses) . . . . . . . . . . . . . . . . . . . . . . Income from discontinued operating properties . . . . Provision for income taxes . . . . . . . . . . . . . . . . . . . . . Minority interest in income . . . . . . . . . . . . . . . . . . . . Loss on operating properties held for sale/sold . . . . . Gain on disposition of operating properties . . . . . . . . Income from discontinued operations . . . . . . . . . . . . 2008 2007 2006 $ 6,316 (1,031) (2,208) (116) 3,451 165 6,577 — (1,281) (598) 20,018 $24,716 $ 11,468 (3,783) (3,207) (597) 34,740 (3,013 ) 35,608 — (5,740) (1,832) 5,538 $ 33,574 $ 28,647 (7,092) (6,947) (3,188) 3,708 1,224 16,352 (2,096) (1,504) (1,421) 74,138 $ 85,469 During 2008, the Company classified as held-for-sale four shopping center properties comprising approximately 0.2 million square feet of GLA. The book value of each of these properties, aggregating approximately $16.2 million, net of accumulated depreciation of approximately $11.3 million, did not exceed each of their estimated fair value. As a result, no adjustment of property carrying value has been recorded. The Company’s determination of the fair value for these properties, aggregating approximately $28.6 million, is based upon executed contracts of sale with third parties less estimated selling costs. During 2008, the Company reclassified one property previously classified as held-for-sale into held-for-use and completed the sale of two of these properties. During 2007, the Company classified as held-for-sale ten shopping center properties comprising approximately 0.6 million square feet of GLA. The book value of each of these properties, aggregating approximately $80.7 million, net of accumulated depreciation of approximately $4.9 million, did not exceed each of their estimated fair values. As a result, no adjustment of property carrying value has been recorded. The Company’s determination of the fair value for each of these properties, aggregating approximately $116.8 million, is based primarily upon executed contracts of sale with third parties less estimated selling costs. During 2008 and 2007, the Company completed the sale of seven of these properties and reclassified three properties as held-for-use. During 2006, the Company reclassified as held-for-sale 13 operating properties comprising 0.8 million square feet of GLA. The aggregate book value of these properties was approximately $36.5 million, net of accumulated depreciation of approximately $5.9 million. The book value of one property exceeded its estimated fair value by approximately $0.6 million, and, as a result, the Company recorded a loss resulting from an adjustment of property carrying value of approximately $0.6 million. The remaining properties had fair values exceeding their book values, and, as a result, no adjustment of property carrying value was recorded. The Company’s determination of the fair value for each of these properties, aggregating approximately $50.0 million, is based primarily upon executed contracts of sale with third parties less estimated selling costs. The Company completed the sale of these operating properties during 2006 and 2007. 7. INVESTMENT AND ADVANCES IN REAL ESTATE JOINT VENTURES: Kimco Prudential Joint Ventures (“KimPru”) On October 31, 2006, the Company completed the merger of Pan Pacific Retail Properties Inc. (“Pan Pacific”), which had a total transaction value of approximately $4.1 billion, including Pan Pacific’s outstanding debt totaling approximately $1.1 billion. As of October 31, 2006, Pan Pacific owned interests in 138 operating properties, which comprised approximately 19.9 million square feet of GLA, located primarily in California, Oregon, Washington and Nevada. 99 KIMCO REALTY CORPORATION AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, CONTINUED Immediately following the merger, the Company commenced its joint venture agreements with Prudential Real Estate Investors (“PREI”) through three separate accounts managed by PREI. In accordance with the joint venture agreements, all Pan Pacific assets and respective non-recourse mortgage debt and a newly obtained $1.2 billion credit facility used to fund the transaction were transferred to the separate accounts. PREI contributed approximately $1.1 billion on behalf of institutional investors in three of its portfolios. The Company holds a 15% non-controlling ownership interest in each of the joint ventures, collectively, KimPru. The Company accounts for its investment in KimPru under the equity method of accounting. In addition, the Company manages the portfolios and earns acquisition fees, leasing commissions, property management fees and construction management fees. During August 2008, KimPru entered into a new $650.0 million credit facility which matures in August 2009, with the option to extend for one year and bears interest at a rate of LIBOR plus 1.25%. KimPru is obligated to pay down a minimum of $165.0 million, among other requirements, in order to exercise the one-year extension option. The required pay down is expected to be sourced from property sales, other debt financings and/or capital contributions by the partners. This facility is guaranteed by the Company with a guarantee from PREI to the Company for 85% of any guaranty payment the Company is obligated to make. Proceeds from this new credit facility were used to repay the outstanding balance of $658.7 million under the $1.2 billion credit facility, referred to above, which was scheduled to mature in October 2008 and bore interest at a rate of LIBOR plus 0.45%. As of December 31, 2008, the outstanding balance on the new credit facility was $650.0 million. During 2008, KimPru sold four operating properties for an aggregate sales price of approximately $45.3 million. Proceeds from this property sale were used to repay a portion of the outstanding balance on the $1.2 billion credit facility. During the fourth quarter of 2008, the Company recognized non-cash impairment charges of $15.5 million, against the carrying value of its investment in KimPru, reflecting an other-than-temporary decline in the fair value of its investment resulting from a significant decline in the real estate markets during the fourth quarter of 2008. In addition to the impairment charges above, the Company recognized impairment charges during 2008 of approximately $11.2 million, before income tax benefit of approximately $4.5 million, relating to certain properties held by an unconsolidated joint venture within the KimPru joint venture that are deemed held-for-sale or were transitioned from held-for-sale to held-for-use properties. The Company’s estimated fair values relating to the impairment assessments above are based upon discounted cash flow models that include all estimated cash inflows and outflows over a specified holding period. Capitalization rates and discount rates utilized in these models are based upon rates that the Company believes to be within a reasonable range of current market rates for the respective properties. During 2007, KimPru sold, in separate transactions, 27 operating properties, two of which were sold to the Company and one development property in separate transactions, for an aggregate sales price of approximately $517.0 million. These sales resulted in an aggregate loss of approximately $2.8 million, of which the Company’s share was approximately $0.4 million. Additionally, during January 2007, the Company and PREI entered into a new joint venture in which the Company holds a 15% non-controlling interest, which acquired 16 operating properties, aggregating 3.3 million square feet of GLA, for an aggregate purchase price of approximately $822.5 million, including the assumption of approximately $487.0 million in non-recourse mortgage debt. Six of these properties were transferred from a joint venture in which the Company held a 5% non-controlling ownership interest. One of the properties was transferred from a joint venture in which the Company held a 30% non-controlling ownership interest. As a result of this transaction, the Company recognized profit participation of approximately $3.7 million and recognized its share of the gain. The Company will manage these properties. As of December 31, 2008, the KimPru portfolio was comprised of 123 shopping center properties aggregating approximately 19.4 million square feet of GLA located in 13 states. 100 KIMCO REALTY CORPORATION AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, CONTINUED Kimco Income REIT (“KIR”) The Company has a non-controlling limited partnership interest in KIR and manages the portfolio. Effective July 1, 2006, the Company acquired an additional 1.7% limited partnership interest in KIR, which increased the Company’s total non-controlling interest to approximately 45.0%. During the year ended December 31, 2008, KIR repaid 16 non-recourse mortgages aggregating approximately $209.6 million, which were scheduled to mature in 2008 and bore interest at rates ranging from 6.57% to 7.28%. Proceeds from eight individual non-recourse mortgages obtained during 2008, aggregating approximately $218.3 million, bearing interest at rates ranging from 6.0% to 6.5% with maturity dates ranging from 2015 to 2018 were used to fund these repayments. During 2008, KIR disposed of one operating property for a sales price of approximately $1.9 million. This sale resulted in an aggregate loss of approximately $0.6 million of which the Company’s share was approximately $0.3 million. During 2007, KIR disposed of three operating properties, in separate transactions, for an aggregate sales price of approximately $149.3 million. These sales resulted in an aggregate gain of approximately $46.0 million of which the Company’s share was approximately $20.7 million. As of December 31, 2008, the KIR portfolio was comprised of 62 shopping center properties aggregating approximately 13.1 million square feet of GLA located in 18 states. RioCan Investments During October 2001, the Company formed a joint venture (the “RioCan Venture”) with RioCan Real Estate Investment Trust (“RioCan”), in which the Company has a 50% non-controlling interest, to acquire retail properties and development projects in Canada. The acquisition and development projects are to be sourced and managed by RioCan and are subject to review and approval by a joint oversight committee consisting of RioCan management and the Company’s management personnel. Capital contributions will only be required as suitable opportunities arise and are agreed to by the Company and RioCan. Additionally, during June 2008, the Company and RioCan entered into a new joint venture (“RioCan Venture II”) in which the Company holds a 50% non-controlling interest, which acquired 10 operating properties, aggregating 1.1 million square feet of GLA, for an aggregate purchase price of approximately $153.4 million, including the assumption of approximately $81.1 million in non-recourse mortgage debt. As of December 31, 2008, the RioCan Ventures were comprised of 45 operating properties and one joint venture investment consisting of approximately 9.3 million square feet of GLA. Kimco / G.E. Joint Venture (“KROP”) During 2001, the Company formed a joint venture (the “Kimco Retail Opportunity Portfolio” or “KROP”) with GE Capital Real Estate (“GECRE”), in which the Company has a 20% non-controlling interest and manages the portfolio. During August 2006, the Company and GECRE agreed to market for sale the properties within the KROP venture. During 2008, KROP transferred an operating property to the Company for a sales price of approximately $65.5 million, including the assumption of approximately $44.0 million in non-recourse mortgage debt. This sale resulted in a gain of $15.0 million of which the Company’s share was approximately $3.0 million. As a result of this transaction, the Company has deferred its share of the gain related to its remaining ownership interest in the properties. During 2007, KROP sold seven operating properties for an aggregate sales price of approximately $162.9 million. These sales resulted in an aggregate gain of $43.1 million of which the Company’s share was approximately $8.6 million. During 2007, KROP transferred ten operating properties for an aggregate sales price of approximately $267.8 million, including approximately $111.6 million of non-recourse mortgage debt, to a new joint venture in which the Company holds a 15% non-controlling ownership interest. As a result of this transaction, the Company has deferred its share of the gain related to its remaining ownership interest in the properties. The Company manages this joint venture and accounts for this investment under the equity method of accounting. 101 KIMCO REALTY CORPORATION AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, CONTINUED Additionally, during 2007, KROP sold four operating properties to the Company for an aggregate sales price of approximately $89.1 million, including the assumption of $41.9 million in non-recourse mortgage debt. The Company’s share of the gains related to these transactions has been deferred. Additionally during 2006, KROP obtained a one-year $15.0 million unsecured term loan, which bore interest at LIBOR plus 0.5%. This loan is guaranteed by the Company and GECRE has guaranteed reimbursement to the Company of 80% of any guaranty payment the Company is obligated to make. During 2007, this loan was fully paid off. As of December 31, 2008, the KROP portfolio was comprised of three operating properties aggregating approximately 0.3 million square feet of GLA located in two states. The Company’s equity in income from KROP for the year ended December 31, 2007, exceeded 10% of the Company’s income from continuing operations, as such the Company is providing summarized financial information for KROP as follows (in millions): Assets: Real estate, net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Other assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Liabilities and Members’ Capital: Mortgages payable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Other liabilities. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Minority interest. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Members’ capital . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . December 31, 2007 2008 $83.5 5.5 $89.0 $68.4 1.4 3.9 15.3 $89.0 $137.4 4.5 $141.9 $113.4 3.8 3.9 20.8 $141.9 Revenues from rental property . . . . . . . . . . . . . . . . . Operating expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . Interest . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Depreciation and amortization . . . . . . . . . . . . . . . . . Other, net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Income/(loss) from continuing operations . . . . . . . . . . Discontinued Operations: Income/(loss) from discontinued operations . . . . . . . . Gain on dispositions of properties . . . . . . . . . . . . . . . . Net income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Year Ended December 31, 2007 $ 17.1 (4.8) (7.2) (5.2) (0.7) (17.9) (0.8) 2006 $ 54.7 (14.5) (17.9) (15.8) (0.6) (48.8) 5.9 2008 $ 9.4 (3.0) (3.7) (3.0) 1.1 (8.6) 0.8 (1.7) 20.5 $ 19.6 3.1 147.8 $150.1 5.4 110.1 $121.4 Kimco/UBS Joint Ventures (“KUBS”) The Company has joint venture investments with UBS Wealth Management North American Property Fund Limited (“UBS”), in which the Company has non-controlling interests ranging from 15% to 20%. These joint ventures, (collectively “KUBS”), were established to acquire high quality retail properties primarily financed through the use of individual non-recourse mortgages. Capital contributions are only required as suitable opportunities arise and are agreed to by the Company and UBS. The Company manages the properties. During 2007, KUBS acquired twelve operating properties for an aggregate purchase price of approximately $354.3 million, which included approximately $94.6 million of assumed non-recourse debt encumbering eight properties and $73.5 million of new non-recourse debt encumbering four properties. These mortgage loans have combined maturities ranging from four to seventeen years and interest rates ranging from 5.29% to 8.39%. As of December 31, 2008, the KUBS portfolio was comprised of 43 operating properties aggregating approximately 6.2 million square feet of GLA located in 12 states. 102 KIMCO REALTY CORPORATION AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, CONTINUED PL Retail During December 2004, the Company acquired the Price Legacy Corporation through a newly formed joint venture, PL Retail LLC (“PL Retail”), in which the Company has a 15% non-controlling interest and manages the portfolio. In connection with this transaction, PL Retail acquired 33 operating properties aggregating approximately 7.6 million square feet of GLA located in ten states. To partially fund the acquisition, the Company provided PL Retail approximately $30.6 million of secured mezzanine financing. This interest-only loan bore interest at a fixed rate of 7.5% and was repaid during 2006. During 2007, PL Retail sold one operating property for a sales price of $40.1 million which resulted in a gain of approximately $13.5 million, of which the Company’s share was approximately $2.0 million. Proceeds from this sale were used to partially pay down the outstanding balance on PL Retail’s revolving credit facility described below. During 2007, PL Retail obtained two non-recourse mortgage loans for an aggregate total of $84.0 million on a previously unencumbered property, which bears interest at LIBOR plus 1.15% and 2.55%, respectively. These mortgage loans are scheduled to mature in May 2010. Additionally during 2007, PL Retail obtained a non-recourse mortgage loan for $48.9 million on three properties, which bears interest at 5.95% and is scheduled to mature in September 2012. During 2005, PL Retail entered into a $39.5 million unsecured revolving credit facility, which bore interest at LIBOR plus 0.675% and was scheduled to mature in February 2007. During 2008, the loan was extended to February 2009 at a reduced rate of LIBOR plus 0.50%. This facility is guaranteed by the Company and the joint venture partner has guaranteed reimbursement to the Company of 85% of any guaranty payment the Company is obligated to make. As of December 31, 2008, there was $35.6 million outstanding under this facility. During February 2009, PL Retail made a principal payment of $5.6 million and obtained a one-year extension option at LIBOR plus 400 basis points for the remaining balance of $30.0 million. As of December 31, 2008, PL Retail consisted of 22 operating properties aggregating approximately 5.6 million square feet of GLA located in seven states. Other Real Estate Joint Ventures The Company and its subsidiaries have investments in and advances to various other real estate joint ventures. These joint ventures are engaged primarily in the operation and development of shopping centers which are either owned or held under long-term operating leases. During 2008, the Company acquired nine operating properties, one leasehold interest and two land parcels through joint ventures in which the Company has non-controlling interests for an aggregate purchase price of approximately $62.2 million including the assumption of approximately $20.6 million of non-recourse mortgage debt encumbering two of the properties. The Company accounts for its investment in these joint ventures under the equity method of accounting. The Company’s aggregate investment resulting from these transactions was approximately $32.3 million. Details of these transactions are as follows (in thousands): Intown Suites (2 extended stay residential Property Name Location Purchase Price Month Acquired Cash Debt Total properties, 299 units) . . . . . . . . . . . . . . . . . . . . . . . Houston, TX Chihuahua, Mexico American Industries (land parcel) . . . . . . . . . . . . . . . . American Industries . . . . . . . . . . . . . . . . . . . . . . . . . . . Monterrey, Mexico Little Ferry (leasehold interest) . . . . . . . . . . . . . . . . . . Tacoma Plaza . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . American Industries (land parcel) . . . . . . . . . . . . . . . . River Point Shopping Center . . . . . . . . . . . . . . . . . . . . Patio-Portfolio II (4 properties) . . . . . . . . . . . . . . . . . . Total Acquisitions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Feb-08 Feb-08 Apr-08 June-08 Little Ferry, NJ Sept-08 Dartmouth, Canada Sept-08 San Luis Potosi, Mexico British Columbia, Canada Nov-08 Nov-08 Santiago, Chile $ 8,750 1,933 8,700 5,000 8,714 224 4,486 3,810 $41,617 $ — $ 8,750 1,933 8,700 5,000 17,740 224 16,092 3,810 $62,249 — — — 9,026 — 11,606 — $20,632 103 KIMCO REALTY CORPORATION AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, CONTINUED In addition, two joint venture investments in which the Company holds a 50% interest in each obtained individual non-recourse mortgages totaling $77.0 million. These mortgages have interest rates ranging from 6.38% to 6.47% and maturities ranging from 2018 to 2019. Proceeds from these mortgages were used to retire $36.0 million of mortgage debt encumbering two properties held by the joint ventures. During September 2008, a joint venture in which the Company has a non-controlling ownership interest obtained a $37.0 million mortgage loan, which is jointly and severally guaranteed by the Company and the joint venture partner, with a commitment of up to $37.0 million of which $26.9 million was outstanding as of December 31, 2008. This loan bears interest at 6.375% and is scheduled to mature in October 2019. During October 2008, a joint venture in which the Company has a non-controlling ownership interest entered into an extension and modification agreement for a $28.0 million term loan. The loan is guaranteed by the Company, with a commitment of up to $28.0 million of which $28.0 million was outstanding as of December 31, 2008. This loan bears interest at LIBOR plus 1.65%, or 2.09% at December 31, 2008, and is scheduled to mature in March 2009. The Company is currently negotiating with lenders regarding extending or refinancing this debt. During 2007, the Company acquired, in separate transactions, 177 operating properties, through joint ventures in which the Company has various non-controlling interests. These properties were acquired for an aggregate purchase price of approximately $1.3 billion, including the assumption of approximately $612.1 million of non-recourse mortgage debt encumbering 142 of the properties and $177.5 million in proceeds from unsecured credit facilities obtained by two joint ventures, which are guaranteed by the Company. The joint venture partners have pledged their respective equity interest for any guarantee payments the Company is obligated to pay. The Company accounts for its investment in these joint ventures under the equity method of accounting. The Company’s aggregate investment in these joint ventures was approximately $261.1 million. Details of these transactions are as follows (in thousands): Property Name Cypress Towne Center (Phase II) . . . . . . . . . . . . . . . Perimeter Expo . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Cranberry Commons (Phase I) . . . . . . . . . . . . . . . . . Westgate Plaza . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Sequoia Mall & Tower . . . . . . . . . . . . . . . . . . . . . . . . Patio (4 Properties) . . . . . . . . . . . . . . . . . . . . . . . . . . . Cranberry Commons (Phase II) . . . . . . . . . . . . . . . . . 550 Adelaide Street East . . . . . . . . . . . . . . . . . . . . . . . K-Mart Shopping Ctr . . . . . . . . . . . . . . . . . . . . . . . . . American Industries (2 Properties) . . . . . . . . . . . . . . Frederick 125th St . . . . . . . . . . . . . . . . . . . . . . . . . . . . In Town Suites (127 extended stay Location Houston, TX Atlanta, GA Pittsburgh, PA Tampa, FL Visalia, CA Santiago, Chile Pittsburgh, PA Toronto, Ontario Pompano Beach, FL Chihuahua, Mexico New York, NY Various residential properties,16,364 units) . . . . . . . . . . . American Industries (6 Properties) . . . . . . . . . . . . . . Various, Mexico 1150 Provincial Road . . . . . . . . . . . . . . . . . . . . . . . . . Windsor, Ontario In Town Suites (9 extended stay residential properties, 129 units) . . . . . . . . . . . . . 2 Properties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . American Industries . . . . . . . . . . . . . . . . . . . . . . . . . . California Portfolio (3 Properties) . . . . . . . . . . . . . . . In Town Suites (extended stay residential property, 129 units) . . . . . . . . . . . . . . American Industries (9 Properties) . . . . . . . . . . . . . . Harston Woods (1 Property, 411 residential units) . . . Willowick (1 Property, 171 residential units). . . . . . . American Industries . . . . . . . . . . . . . . . . . . . . . . . . . . Total Acquisitions . . . . . . . . . . . . . . . . . . . . . . . . . . . . Various Various, Mexico Reynosa, Mexico Various, CA (6) Louisville, KY Various, Mexico Euless, TX Houston, TX Chihuahua, Mexico Month Acquired Jan-07 (1) Mar-07 Mar-07 (2) Mar-07 (2) Apr-07 Apr-07 May-07 (3) May-07 Jun-07 Jun-07 Jun-07 (4) Jun-07 Jul-07 Jul-07 Jul-07 Jul-07 Aug-07 Oct-07 Oct-07 Oct-07 Nov-07 Nov-07 Dec-07 Purchase Price Cash Debt Total $ 2,175 62,150 9,961 4,000 29,550 5,374 4,539 9,900 7,800 3,968 5,000 155,800 13,300 11,346 1,156 57,729 3,579 7,900 $ $ 4,039 — 18,500 8,100 — 11,148 — — — — 25,000 6,214 62,150 28,461 12,100 29,550 16,522 4,539 9,900 7,800 3,968 30,000 617,607 (5) — — 773,407 13,300 11,346 39,744 — — 31,300 40,900 57,729 3,579 39,200 3,150 44,535 2,300 14,051 5,600 $ 464,863 — — 9,700 24,500 — $ 789,638 3,150 44,535 12,000 38,551 5,600 $ 1,254,501 104 KIMCO REALTY CORPORATION AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, CONTINUED (1) This property was transferred from KDI. (2) These properties were transferred from ventures in which the Company had preferred equity investments. (3) This property was transferred from the Company. (4) This property was purchased for redevelopment purposes. (5) Includes approximately $278.6 million of assumed cross-collateralized non-recourse mortgage debt with interest rates ranging from 5.19% to 5.89%, encumbering 86 properties, $186.0 million of new cross-collateralized non- recourse mortgage debt with an interest rate of 5.59%, encumbering 35 properties and a $153.0 million three-year unsecured credit facility, which bears interest at LIBOR plus 0.325% (5.55% as of December 31, 2007), and is guaranteed by the Company. The joint venture partner has pledged its equity interest for any guaranty payment the Company is obligated to pay. (6) Three properties acquired located in Pleasanton, CA, Laguna Hills, CA and San Diego, CA. During 2007, the Company transferred in separate transactions, 50% of its 100% interest in seven projects located in Juarez, Tecamac, Mexicali, Cuaulta, Ciudad Del Carmen, Tijuana and Rosarito, Mexico to a joint venture partner for approximately $48.3 million, which approximated their carrying values. As a result of these transactions, the Company has deconsolidated these entities and now accounts for its investments under the equity method of accounting. During 2007, joint ventures in which the Company has non-controlling interests disposed of, in separate transactions, (i) seven properties for an aggregate sales price of approximately $467.3 million resulting in an aggregate gain of approximately $42.7 million, of which the Company’s share was approximately $24.9 million and (ii) two vacant parcels of land for an aggregate sales price of $6.7 million, which resulted in no gain or loss. Summarized financial information for these real estate joint ventures (excluding KROP, which is presented separately above) is as follows (in millions): Assets: Real estate, net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Other assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Liabilities and Partners’/Members’ Capital: Mortgages payable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Notes payable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Construction loans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Other liabilities. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Minority interest. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Partners’/Members’ capital. . . . . . . . . . . . . . . . . . . . . . . . . . . . December 31, 2008 2007 $ 12,559.8 727.9 $ 13,287.7 $ 12,176.0 1,317.5 $ 13,493.5 $ 7,892.3 872.7 118.0 302.2 116.9 3,985.6 $ 13,287.7 $ 7,901.1 917.6 39.8 278.6 101.3 4,255.1 $ 13,493.5 Revenues from rental property . . . . . . . . . . . . . . . . . . Operating expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . Interest . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Depreciation and amortization . . . . . . . . . . . . . . . . . . Other, net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Income from continuing operations . . . . . . . . . . . . . . Discontinued Operations: Income/(loss) from discontinued operations . . . . . . . . Gain on dispositions of properties. . . . . . . . . . . . . . . . Net income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 105 Year Ended December 31, 2008 $ 1,645.8 (562.7) (514.7) (450.6) (96.0) (1,624.0) 21.8 2007 $ 1,452.2 (435.4) (497.9) (383.8) (18.8) (1,335.9) 116.3 (0.7) 13.4 34.5 2.6 164.5 283.4 $ $ 2006 $ 936.3 (268.9) (299.2) (204.8) (12.7) (785.6) 150.7 5.6 24.6 $ 180.9 KIMCO REALTY CORPORATION AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, CONTINUED Other liabilities included in the Company’s accompanying Consolidated Balance Sheets include accounts with certain real estate joint ventures totaling approximately $9.7 million and $16.9 million at December 31, 2008 and 2007, respectively. The Company and its subsidiaries have varying equity interests in these real estate joint ventures, which may differ from their proportionate share of net income or loss recognized in accordance with GAAP. The Company’s maximum exposure to losses associated with its unconsolidated joint ventures is primarily limited to its carrying value in these investments. Generally such investments contain operating properties and the Company has determined these entities do not contain the characteristics of a VIE. As of December 31, 2008 and 2007, the Company’s carrying value in these investments approximated $1.2 billion. 8. OTHER REAL ESTATE INVESTMENTS: Preferred Equity Capital The Company maintains a Preferred Equity program, which provides capital to developers and owners of real estate properties. During 2008, the Company provided, in separate transactions, an aggregate of approximately $51.9 million in investment capital to developers and owners of 28 real estate properties. During 2007, the Company provided, in separate transactions, an aggregate of approximately $103.6 million in investment capital to developers and owners of 61 real estate properties. As of December 31, 2008, the Company’s net investment under the Preferred Equity program was approximately $534.0 million relating to 633 properties including 402 net lease properties described below. For the years ended December 31, 2008, 2007 and 2006, the Company earned approximately $66.8 million, including $24.6 million of profit participation earned from 10 capital transactions, $67.1 million, including $30.5 million of profit participation earned from 18 capital transactions, and $40.1 million, including $12.2 million of profit participation earned from 16 capital transactions, respectively, from these investments. Included in the capital transactions described above for the year ended December 31, 2008, was the sale of the Company’s preferred equity investment in an operating property to its partner for approximately $29.5 million. The Company provided seller financing to the partner for approximately CAD $24.0 million (approximately USD $23.5 million), which bears interest at a rate of 8.5% per annum and has a maturity date of June 2013. The Company evaluated this transaction pursuant to the provisions of EITF 98-8, “Accounting for Transfers of Investments That are in Substance Real Estate” and FAS 66 and, accordingly, recognized profit participation of approximately $10.8 million. Two of the capital transactions described above for the year ended December 31, 2007, were the result of the transfer of two operating properties, in separate transactions, to a joint venture in which the Company holds a 15% non-controlling interest for an aggregate price of approximately $40.6 million, including the assumption of approximately $26.6 million in non-recourse debt. These sales resulted in an aggregate profit participation of approximately $1.4 million. Also, included in the capital transactions described above for the year ended December 31, 2007, was the transfer of an operating property to the Company for approximately $4.5 million, including the assumption of $3.1 million in non- recourse mortgage debt. As a result of the Company’s acquisition of this property, the Company did not recognize any profit participation. Additionally, during 2007, the Company invested approximately $81.7 million of preferred equity capital in a portfolio comprised of 403 net leased properties which are divided into 30 master leased pools with each pool leased to individual corporate operators. These properties consist of a diverse array of free-standing restaurants, fast food restaurants, convenience and auto parts stores. The entity was deemed to be a VIE based on the fact that certain non- equity holders have the right to receive expected residual returns from this entity. The Company determined that it was not the primary beneficiary of the VIE based on the fact that the Company is in a preferred position and would not absorb a majority of expected losses, nor would receive a majority of the entities expected residual returns. As of December 31, 2008, these properties were encumbered by third party loans aggregating approximately $428.8 million with interest rates ranging from 5.08% to 10.47% with a weighted average interest rate of 9.3% and maturities ranging from 0.4 years to 14.2 years. The Company’s investment in this VIE as of December 31, 2008 was $96.7 million. The Company has not provided financial support to the VIE that it was not previously contractually required to provide. 106 KIMCO REALTY CORPORATION AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, CONTINUED Summarized financial information relating to the Company’s preferred equity investments is as follows (in millions): Assets: Real estate, net . . . . . . . . . . . . . . . . . . . . . . . . . . . Other assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Liabilities and Partners’/Members’ Capital: Notes and mortgages payable. . . . . . . . . . . . . . . . Other liabilities. . . . . . . . . . . . . . . . . . . . . . . . . . . Partners’/Members’ capital. . . . . . . . . . . . . . . . . . December 31, 2008 2007 $ 2,012.3 791.3 $ 2,803.6 $ 2,223.3 701.3 $ 2,924.6 $ 2,089.3 65.3 649.0 $ 2,803.6 $ 2,157.7 86.2 680.7 $ 2,924.6 Revenues from Rental Property . . . . . . . . . . . . . . . . . Operating expenses . . . . . . . . . . . . . . . . . . . . . . . . . . Interest . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Depreciation and amortization . . . . . . . . . . . . . . . . . . Other, net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Gain on disposition of properties . . . . . . . . . . . . . . . . Net income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Year Ended December 31, 2007 $ 266.3 (87.5) (111.1) (60.3) (1.1) 6.3 90.5 $ 96.8 2008 $ 313.3 (100.1) (127.5) (63.7) 5.8 27.8 8.5 $ 36.3 2006 $177.6 (58.6) (61.6) (34.2) (4.4) 18.8 49.4 $ 68.2 In addition to the net leased portfolio VIE discussed above, the Company’s preferred equity investments include five additional investments that are VIE’s for which the Company is not the primary beneficiary. These joint ventures were primarily established to develop real estate property for long-term investment. These entities were deemed VIE’s primarily based on the fact that the equity investment at risk was not sufficient to permit the entity to finance its activities without additional financial support. The initial equity contributed to these entities was not sufficient to fully finance the real estate construction as development costs are funded by the partners throughout the construction period. The Company determined that it was not the primary beneficiary of these VIE’s based on the fact that the Company is in a preferred position and would not absorb a majority of expected losses, nor would it receive a majority of the entity’s expected residual returns. The Company’s aggregate investment in these VIE’s was approximately $14.0 million as of December 31, 2008, which is included in Other real estate investments in the Company’s Consolidated Balance Sheets. The Company’s maximum exposure to loss as a result of its involvement with these VIE’s is estimated to be $26.2 million, which primarily represents the Company’s current investment and estimated future funding commitments. Three of these entities are encumbered by third party debt aggregating $31.7 million. The Company has not provided financial support to the VIE that it was not previously contractually required to provide. All future costs of development will be funded with capital contributions from the Company and the outside partners in accordance with their respective ownership percentages. The Company’s maximum exposure to losses associated with its preferred equity investments is primarily limited to its invested capital. As of December 31, 2008 and 2007, the Company’s invested capital in its preferred equity investments approximated $534.0 million and $569.8 million, respectively. Other Additionally, during 2008, the Company sold its 18.7% interest in a real estate company located in Mexico for approximately $23.2 million resulting in a gain of approximately $7.2 million. 107 KIMCO REALTY CORPORATION AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, CONTINUED Investment in Retail Store Leases The Company has interests in various retail store leases relating to the anchor store premises in neighborhood and community shopping centers. These premises have been sublet to retailers who lease the stores pursuant to net lease agreements. Income from the investment in these retail store leases during the years ended December 31, 2008, 2007 and 2006, was approximately $2.7 million, $1.2 million and $1.3 million, respectively. These amounts represent sublease revenues during the years ended December 31, 2008, 2007 and 2006, of approximately $7.1 million, $7.7 million and $8.2 million, respectively, less related expenses of $4.4 million, $5.1 million and $5.7 million, respectively, and an amount which, in management’s estimate, reasonably provides for the recovery of the investment over a period representing the expected remaining term of the retail store leases. The Company’s future minimum revenues under the terms of all non-cancelable tenant subleases and future minimum obligations through the remaining terms of its retail store leases, assuming no new or renegotiated leases are executed for such premises, for future years are as follows (in millions): 2009, $5.6 and $3.8; 2010, $5.4 and $3.7; 2011, $4.5 and $3.1; 2012, $2.3 and $2.1; 2013, $1.0 and $1.3 and thereafter, $1.4 and $0.5, respectively. Leveraged Lease During June 2002, the Company acquired a 90% equity participation interest in an existing leveraged lease of 30 properties. The properties are leased under a long-term bond-type net lease whose primary term expires in 2016, with the lessee having certain renewal option rights. The Company’s cash equity investment was approximately $4.0 million. This equity investment is reported as a net investment in leveraged lease in accordance with SFAS No. 13, Accounting for Leases (as amended). From 2002 to 2007, 18 of these properties were sold, whereby the proceeds from the sales were used to pay down the mortgage debt by approximately $31.2 million. As of December 31, 2008, the remaining 12 properties were encumbered by third-party non-recourse debt of approximately $42.8 million that is scheduled to fully amortize during the primary term of the lease from a portion of the periodic net rents receivable under the net lease. As an equity participant in the leveraged lease, the Company has no recourse obligation for principal or interest payments on the debt, which is collateralized by a first mortgage lien on the properties and collateral assignment of the lease. Accordingly, this obligation has been offset against the related net rental receivable under the lease. At December 31, 2008 and 2007, the Company’s net investment in the leveraged lease consisted of the following (in millions): Remaining net rentals . . . . . . . . . . . . . . . . . . . . . . . . . Estimated unguaranteed residual value . . . . . . . . . . . Non-recourse mortgage debt . . . . . . . . . . . . . . . . . . . Unearned and deferred income . . . . . . . . . . . . . . . . . Net investment in leveraged lease . . . . . . . . . . . . . . . 2008 $ 53.8 31.7 (38.5) (43.0) $ 4.0 2007 $ 55.0 36.0 (43.9) (43.3) $ 3.8 9. MORTGAGES AND OTHER FINANCING RECEIVABLES: The Company has various mortgages and other financing receivables which consist of loans acquired and loans originated by the Company. For a complete listing of the Company’s mortgages and other financing receivables at December 31, 2008, see Financial Statement Schedule IV included on page 141 of this annual report on Form 10-K. Reconciliation of Mortgage loans and other financing receivables on Real Estate: 108 KIMCO REALTY CORPORATION AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, CONTINUED The following table reconciles Mortgage loans and other financing receivables on Real Estate from January 1, 2006 to December 31, 2008: Balance at January 1 . . . . . . . . . . . . . . . . . . . . . . . . . . 2008 $153,847 2007 $ 162,669 2006 $132,675 Additions: New mortgage loan . . . . . . . . . . . . . . . . . . . . . . . Additions under existing mortgage loans. . . . . . . Capitalized loan costs. . . . . . . . . . . . . . . . . . . . . . Amortization of discount . . . . . . . . . . . . . . . . . . . 86,247 8,268 605 247 62,362 38,122 675 271 104,892 54,815 1,305 673 Deductions: Collections of principal . . . . . . . . . . . . . . . . . . . . Charge Off/Foreign currency translation . . . . . . . Amortization of premium. . . . . . . . . . . . . . . . . . . Amortization of loan costs . . . . . . . . . . . . . . . . . . Balance at December 31 . . . . . . . . . . . . . . . . . . . . . . . (48,633) (15,630) (2,279) (680) $181,992 (105,277) (1,837) (2,298) (840) $ 153,847 (97,501) (609) (33,003) (578) $162,669 10. MARKETABLE SECURITIES: The amortized cost and estimated fair values of securities available-for-sale and held-to-maturity at December 31, 2008 and 2007, are as follows (in thousands): December 31, 2008 Gross Unrealized Losses Gross Unrealized Gains Amortized Cost Estimated Fair Value Available-for-sale: Equity and debt securities . . . . . . . . . . . . . . . . . . $220,560 $ 122 $ (60,518) $ 160,164 Held-to-maturity: Other debt securities. . . . . . . . . . . . . . . . . . . . . . . Total marketable securities 98,010 $318,570 2,177 $ 2,299 (41,565) $ (102,083) 58,622 $ 218,786 December 31, 2007 Gross Unrealized Losses Gross Unrealized Gains Amortized Cost Estimated Fair Value Available-for-sale: Equity securities . . . . . . . . . . . . . . . . . . . . . . . . . . $114,896 $ 24,846 $(13,706) $ 126,036 Held-to-maturity: Other debt securities. . . . . . . . . . . . . . . . . . . . . . . Total marketable securities . . . . . . . . . . . . . . . . . . . . . 86,952 $201,848 3,747 $ 28,593 (4,284) $(17,990) 86,415 $ 212,451 During February 2008, the Company acquired an aggregate $190 million Australian denominated (“AUD”) (approximately $170.1 million USD) convertible notes issued by a subsidiary of Valad Property Group (“Valad”), a publicly traded Australian company listed on the Australian stock exchange that is a diversified, property fund manager, investor, developer and property investment banker with property investments in Australia, Europe and Asia. The notes are guaranteed by Valad and bear interest at 9.5% payable semi-annually in arrears. The notes are repayable after five years with an option for Valad to extend up to 18 months, subject to certain interest rate and conversion price resets. The notes are convertible any time into publicly traded Valad securities at a price of AUD$1.33. In accordance with SFAS No. 133, Accounting for Derivative Instruments and Hedging Activities (“SFAS 133”), the Company has bifurcated the conversion option within the Valad convertible notes and will separately account for this option as an embedded derivative. The original host instrument is classified as an available-for-sale security at fair 109 KIMCO REALTY CORPORATION AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, CONTINUED value and is included in Marketable securities on the Company’s Consolidated Balance Sheets with changes in the fair value recorded through Stockholders’ equity as a component of other comprehensive income. At December 31, 2008, the Company had an unrealized loss associated with these notes of approximately $46.0 million. Interest payments on the notes are current and all amounts due in accordance with contractual terms are considered probable by the Company. The Company has the intent and ability to hold the notes to recover its investment, which may be to its maturity and therefore, does not believe that the decline in value at December 31, 2008, is other-than-temporary. The embedded derivative is recorded at fair value and is included in Other assets on the Company’s Consolidated Balance Sheets with changes in fair value recognized in the Company’s Consolidated Statements of Income. The value attributed to the embedded convertible option was approximately AUD $14.3 million, (approximately USD $13.8 million). As a result of the fair value remeasurement of this derivative instrument during 2008, there was an AUD $5.5 million (approximately USD $5.9 million) unrealized decrease in the fair value of the convertible option. This unrealized decrease is included in Other expense, net on the Company’s Consolidated Statements of Income. For each of the securities in the Company’s portfolio with unrealized losses, the Company reviews the underlying cause of the decline in value and the estimated recovery period, as well as the severity and duration of the decline. In the Company’s evaluation, the Company considers its ability and intent to hold these investments for a reasonable period of time sufficient for the Company to recover its cost basis. During 2008, the Company recorded non-cash impairment charges of approximately $92.7 million, net of approximately $25.7 million of income tax benefit, due to the decline in value of certain marketable equity and other investments that were deemed to be other-than-temporary. Of the $92.7 million approximately $83.1 million of these impairment charges were taken at the end of the fourth quarter of 2008 resulting from the unprecedented deterioration of the equity markets during the fourth quarter and the uncertainty of their future recoverability. Market value for these equity securities represents the closing price of each security as it appears on their respective stock exchange at the end of the period. Details of these impairment charges are as follows (in thousands): Valad, net of income tax benefit of $18,172 . . . . . . . . . . . . . . . . . . . . . . InnVest Real Estate Investment Trust . . . . . . . . . . . . . . . . . . . . . . . . . . Cost method investments, net of income tax benefit of $7,072 . . . . . . . Sears Holdings Corporation, net of income tax benefit of $190 . . . . . . Lexington Realty Trust . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Winthrop Realty Trust . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Other, net of income tax benefit of $262 . . . . . . . . . . . . . . . . . . . . . . . . For the year ended December 31, 2008 $27,258 24,164 10,609 8,601 7,526 5,440 9,120 $92,718 At December 31, 2008, the Company’s investment in marketable securities was approximately $258.2 million, which includes an aggregate unrealized loss of approximately $60.5 million related to marketable equity and debt securities investments. At December 31, 2008, marketable equity securities with unrealized loss positions for (i) less than twelve months had an aggregate unrealized loss of approximately $12.0 million and (ii) more than twelve months had an aggregate unrealized loss of approximately $2.5 million. The Company does not believe that the declines in value of any of its remaining securities with unrealized losses are other-than-temporary at December 31, 2008. During 2008, the Company received approximately $50.3 million in proceeds from the sale of certain marketable securities. The Company recognized gross realizable gains of approximately $15.9 million and gross realizable losses of approximately $1.9 million from its marketable securities during 2008. The Company will continue to assess declines in value of its marketable securities on an on going basis. Based on these assessments, the Company may determine that a decline in value for one or more of its investments may be other- than-temporary and would therefore write-down its cost basis accordingly. 110 KIMCO REALTY CORPORATION AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, CONTINUED As of December 31, 2008, the contractual maturities of Other debt securities classified as held-to-maturity are as follows: within one year, $ 6.1 million; after one year through five years, $65.6 million; after five years through 10 years, $ 10.8 million; and after 10 years, $ 15.5 million. Actual maturities may differ from contractual maturities as issuers may have the right to prepay debt obligations with or without prepayment penalties. 11. NOTES PAYABLE: Medium Term Notes The Company has implemented a medium-term notes (“MTN”) program pursuant to which it may, from time to time, offer for sale its senior unsecured debt for any general corporate purposes, including (i) funding specific liquidity requirements in its business, including property acquisitions, development and redevelopment costs and (ii) managing the Company’s debt maturities. During the year ended December 31, 2008, the Company repaid its $100.0 million 3.95% medium term notes, which matured on August 5, 2008 and its $25.0 million 7.2% senior notes, which matured on September 15, 2008. During the year ended December 31, 2007, the Company repaid the following Senior Unsecured Notes: (i) its $30.0 million 7.46% fixed rate notes, which matured on May 20, 2007, (ii) its $55.0 million 5.75% fixed rate notes, which matured on June 29, 2007, (iii) its $20.0 million 6.96% fixed rate notes, which matured on July 16, 2007, (iv) its $50.0 million 7.86% fixed rate notes, which matured on November 1, 2007, (v) its $50.0 million 7.90% fixed rate notes, which matured on December 7,2007 and (vi) its $10.0 million 6.70% fixed rate notes, which matured on December 14, 2007. Additionally, the Company repaid its $35.0 million 4.96% fixed rate Senior Unsecured Notes, which matured on November 30, 2007. As of December 31, 2008, a total principal amount of approximately $1.2 billion in senior fixed-rate MTNs was outstanding. These fixed-rate notes had maturities ranging from five months to seven years as of December 31, 2008, and bear interest at rates ranging from 4.62% to 7.56%. Interest on these fixed-rate senior unsecured notes is payable semi-annually in arrears. Proceeds from these issuances were primarily used for the acquisition of neighborhood and community shopping centers, the expansion and improvement of properties in the Company’s portfolio and the repayment of certain debt obligations of the Company. As of December 31, 2007, a total principal amount of approximately $1.3 billion in senior fixed-rate MTNs was outstanding. These fixed-rate notes had maturities ranging from seven months to eight years as of December 31, 2007, and bear interest at rates ranging from 3.95% to 7.56%. Interest on these fixed-rate senior unsecured notes is payable semi-annually in arrears. Proceeds from these issuances were primarily used for the acquisition of neighborhood and community shopping centers, the expansion and improvement of properties in the Company’s portfolio and the repayment of certain debt obligations of the Company. Senior Unsecured Notes During April 2007, the Company issued $300.0 million of ten-year Senior Unsecured Notes at an interest rate of 5.70% per annum payable semi-annually in arrears. These notes were sold at 99.984% of par value. Net proceeds from the issuance were approximately $297.8 million, after related transaction costs of approximately $2.2 million. The proceeds from this issuance were primarily used to repay a portion of the outstanding balance under the Company’s U.S. Credit Facility and for general corporate purposes. As of December 31, 2008, the Company had a total principal amount of $1.2 billion in fixed-rate unsecured senior notes. These fixed-rate notes had maturities ranging from one month to eight years as of December 31, 2008, and bear interest at rates ranging from 4.70% to 7.95%. Interest on these fixed-rate senior unsecured notes is payable semi-annually in arrears. As of December 31, 2007, the Company had a total principal amount of $1.2 billion in fixed-rate unsecured senior notes. These fixed-rate notes had maturities ranging from nine months to nine years as of December 31, 2007, and bear interest at rates ranging from 4.70% to 7.95%. Interest on these fixed-rate senior unsecured notes is payable semi-annually in arrears. 111 KIMCO REALTY CORPORATION AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, CONTINUED The scheduled maturities of all unsecured notes payable as of December 31, 2008, were approximately as follows (in millions): 2009, $186.1; 2010, $208.0; 2011, $1,064.9; 2012, $217.0; 2013, $513.9; and thereafter, $1,250.9. During April 2007, the Company entered into a fourth supplemental indenture, under the indenture governing its Medium Term Notes and Senior notes, which removed the financial covenants of future offerings under this indenture. In accordance with the terms of the Indenture, as amended, pursuant to which the Company’s senior unsecured notes, except for the $300.0 million issued under the fourth supplemental indenture, described above, have been issued, the Company is subject to maintaining (a) certain maximum leverage ratios on both unsecured senior corporate and secured debt, minimum debt service coverage ratios and minimum equity levels, (b) certain debt service ratios, (c) certain asset to debt ratios and (d) restricted from paying dividends in amounts that exceed by more than $26.0 million the funds from operations, as defined, generated through the end of the calendar quarter most recently completed prior to the declaration of such dividend; however, this dividend limitation does not apply to any distributions necessary to maintain the Company’s qualification as a REIT providing the Company is in compliance with its total leverage limitations. Credit Facilities During October 2007, the Company established a new $1.5 billion unsecured U.S. revolving credit facility (the “U.S. Credit Facility”) with a group of banks, which is scheduled to expire in October 2011, with a one-year extension option. This credit facility, which replaced the Company’s $850.0 million unsecured U.S. revolving facility which was scheduled to expire in July 2008, has made available funds to finance general corporate purposes, including (i) property acquisitions, (ii) investments in the Company’s institutional management programs, (iii) development and redevelopment costs, and (iv) any short-term working capital requirements. Interest on borrowings under the U.S. Credit Facility accrues at LIBOR plus 0.425% and fluctuates in accordance with changes in the Company’s senior debt ratings. As part of this U.S. Credit Facility, the Company has a competitive bid option whereby the Company may auction up to $750.0 million of its requested borrowings to the bank group. This competitive bid option provides the Company the opportunity to obtain pricing below the currently stated spread. A facility fee of 0.15% per annum is payable quarterly in arrears. As part of the U.S. Credit Facility, the Company has a $200.0 million sub-limit which provides it the opportunity to borrow in alternative currencies such as Pounds Sterling, Japanese Yen or Euros. Pursuant to the terms of the U.S. Credit Facility, the Company, among other things, is subject to covenants requiring the maintenance of (i) maximum leverage ratios on both unsecured and secured debt, and (ii) minimum interest and fixed coverage ratios. As of December 31, 2008, there was $675.0 million outstanding and $23.5 million letter of credit appropriations under this credit facility. During August 2007, the Company obtained a $200.0 million unsecured term loan that bore interest at LIBOR plus 0.325%. The term loan was scheduled to mature on December 14, 2007. The Company utilized these proceeds to partially repay the outstanding balance on the Company’s U.S. revolving credit facility. The term loan was fully repaid in October 2007. The Company also has a three-year CAD $250.0 million unsecured credit facility with a group of banks. This facility bore interest at the CDOR Rate, as defined, plus 0.45%, and was scheduled to expire in March 2008. During October 2007, the facility was amended to modify the covenant package to conform to the Company’s U.S. Credit Facility. The facility was further amended in January 2008, to extend the maturity date to 2011, with an additional one-year extension option, at a reduced rate of CDOR plus 0.425%, subject to change in accordance with the Company’s senior debt ratings. This facility also permits U.S. dollar borrowings. Proceeds from this facility are used for general corporate purposes, including the funding of Canadian denominated investments. As of December 31, 2008, the outstanding balance under this facility was approximately CAD $40.0 million (approximately USD $32.7 million). The Company had a three-year MXP 500.0 million unsecured revolving credit facility which bore interest at the TIIE Rate, as defined therein, plus 1.00%, subject to change in accordance with the Company’s senior debt ratings, and was scheduled to mature in May 2008. During March 2008, the Company obtained a MXP 1.0 billion term loan, which bears interest at a rate of 8.58%, subject to change in accordance with the Company’s senior debt ratings, and is scheduled to mature in March 2013. The Company utilized proceeds from this term loan to fully repay the outstanding balance of the MXP 500.0 million unsecured revolving credit facility, which had been terminated. Remaining proceeds from this term loan were used for funding MXP denominated investments. As of December 31, 2008, the outstanding balance on this term loan was MXP 1.0 billion (approximately USD $73.9 million). 112 KIMCO REALTY CORPORATION AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, CONTINUED 12. MORTGAGES PAYABLE: During 2008, the Company (i) obtained an aggregate of approximately $16.7 million of non-recourse mortgage debt on three operating properties, (ii) assumed approximately $101.1 million of individual non-recourse mortgage debt relating to the acquisition of five operating properties, including approximately $0.8 million of fair value debt adjustments and (iii) paid off approximately $73.4 million of individual non-recourse mortgage debt that encumbered 11 operating properties. During 2007, the Company (i) obtained an aggregate of approximately $285.8 million of individual non-recourse mortgage debt on 12 operating properties, (ii) assumed approximately $83.7 million of individual non-recourse mortgage debt relating to the acquisition of eight operating properties, including approximately $2.5 million of fair value debt adjustments, (iii) obtained approximately $3.2 million of additional funding on three previously encumbered properties and (iv) paid off approximately $81.6 million of individual non-recourse mortgage debt that encumbered 11 operating properties. Mortgages payable, collateralized by certain shopping center properties and related tenants’ leases, are generally due in monthly installments of principal and/or interest which mature at various dates through 2035. Interest rates range from approximately 3.70% to 10.50% (weighted-average interest rate of 4.73% as of December 31, 2008). The scheduled principal payments of all mortgages payable, excluding unamortized fair value debt adjustments of approximately $6.8 million, as of December 31, 2008, were approximately as follows (in millions): 2009, $204.5; 2010, $69.1; 2011, $55.1; 2012, $76.8; 2013, $87.5; and thereafter, $369.6. 13. CONSTRUCTION LOANS PAYABLE: During 2008, the Company obtained construction financing on three merchant building projects with total loan commitment amounts up to $35.4 million, of which $8.7 million was outstanding as of December 31, 2008. As of December 31, 2008, total loan commitments on the Company’s 16 outstanding construction loans aggregated approximately $364.2 million of which approximately $268.3 million has been funded. These loans have scheduled maturities ranging from two months to 42 months (excluding any extension options which may be available to the Company) and bear interest at rates ranging from 1.81% to 3.19% at December 31, 2008. These construction loans are collateralized by the respective projects and associated tenants’ leases. The scheduled maturities of all construction loans payable as of December 31, 2008, were approximately as follows (in millions): 2009, $194.0, 2010, $70.0, 2011, $0 and 2012, $4.3. During 2007, the Company obtained construction financing on five merchant building projects and assumed one loan associated with a separate project for an aggregate original loan commitment amount of up to $187.1 million, of which approximately $80.9 million was outstanding at December 31, 2007. As of December 31, 2007, the Company had a total of 15 construction loans with total commitments of up to $360.3 million, of which $245.9 million had been funded. These loans have scheduled maturities ranging from one month to 33 months (excluding any extension options which may be available to the Company) and bear interest at rates ranging from 6.60% to 7.48% at December 31, 2007. These construction loans are collateralized by the respective projects and associated tenants’ leases. The scheduled maturities of all construction loans payable as of December 31, 2007, were approximately as follows (in millions): 2008, $143.9, 2009, $66.1 and 2010, $35.9. 14. MINORITY INTERESTS: Minority interests represent the portion of equity that the Company does not own in those entities it consolidates as a result of having a controlling interest or determined that the Company was the primary beneficiary of a variable interest entity in accordance with the provisions and guidance of FIN 46(R). During 2006 the Company acquired seven shopping center properties located throughout Puerto Rico. The properties were acquired through the issuance of approximately $158.6 million of non-convertible units, approximately $45.8 million of convertible units, the assumption of approximately $131.2 million of non-recourse debt and $116.3 million in cash. Minority interests related to these acquisitions was approximately $233.0 million of units, including premiums of approximately $13.5 million and a fair market value adjustment of approximately $15.1 million (the “Units”). The Company is restricted from disposing of these assets, other than through a tax free transaction until November 2015. 113 KIMCO REALTY CORPORATION AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, CONTINUED The Units consisted of (i) approximately 81.8 million Preferred A Units par value $1.00 per unit, which pay the holder a return of 7.0% per annum on the Preferred A Par Value and are redeemable for cash by the holder at any time after one year or callable by the Company any time after six months and contain a promote feature based upon an increase in net operating income of the properties capped at a 10.0% increase, (ii) 2,000 Class A Preferred Units, par value $10,000 per unit, which pay the holder a return equal to LIBOR plus 2.0% per annum on the Class A Preferred Par Value and are redeemable for cash by the holder at any time after November 30, 2010, (iii) 2,627 Class B-1 Preferred Units, par value $10,000 per unit, which pay the holder a return equal to 7.0% per annum on the Class B-1 Preferred Par Value and are redeemable by the holder at any time after November 30, 2010, for cash or at the Company’s option, shares of the Company’s common stock, equal to the Cash Redemption Amount, as defined, (iv) 5,673 Class B-2 Preferred Units, par value $10,000 per unit, which pay the holder a return equal to 7.0% per annum on the Class B-2 Preferred par value and are redeemable for cash by the holder at any time after November 30, 2010, and (v) 640,001 Class C DownReit Units, valued at an issuance price of $30.52 per unit which pay the holder a return at a rate equal to the Company’s common stock dividend and are redeemable by the holder at any time after November 30, 2010, for cash or at the Company’s option, shares of the Company’s common stock equal to the Class C Cash Amount, as defined. During 2008, 4,462 units, or $44.6 million, of the Class B-2 Preferred Units were redeemed and 806 units, or $8.1 million, of the Class A Preferred Units were redeemed under the Loan provision of the Agreement. Additionally, 2.2 million, or $2.2 million, of the Preferred A Units were redeemed for cash. Minority interest relating to the units was $129.8 million and $187.6 million as of December 31, 2008 and 2007, respectively. During 2007, 2,438 units, or $24.4 million, of the Class B-1 Preferred Units were redeemed and 61,804 units, or $1.9 million, of the Class C DownREIT Units were redeemed under the Loan provision of the Agreement. The Company opted to settle these units in cash not stock. Additionally, 300 units, or $3.0 million, of the Class B-2 Preferred Units were redeemed through transfer to a charitable organization, as permitted under the provisions of the Agreement. During 2006, the Company acquired two shopping center properties located in Bay Shore and Centereach, NY during 2006. Included in Minority interests are approximately $41.6 million, including a discount of $0.3 million and a fair market value adjustment of $3.8 million, in redeemable units (the “Redeemable Units”), issued by the Company. The properties were acquired through the issuance of $24.2 million of Redeemable Units, which are redeemable at the option of the holder; approximately $14.0 million of fixed rate Redeemable Units and the assumption of approximately $23.4 million of non- recourse debt. The Redeemable Units consist of (i) 13,963 Class A Units, par value $1,000 per unit, which pay the holder a return of 5% per annum of the Class A par value and are redeemable for cash by the holder at any time after April 3, 2011, or callable by the Company any time after April 3, 2016, and (ii) 647,758 Class B Units, valued at an issuance price of $37.24 per unit, which pay the holder a return at a rate equal to the Company’s common stock dividend and are redeemable by the holder at any time after April 3, 2007, for cash or at the option of the Company for Common Stock at a ratio of 1:1, or callable by the Company any time after April 3, 2026. The Company is restricted from disposing of these assets, other than through a tax free transaction, until April 2016 and April 2026 for the Centereach, NY, and Bay Shore, NY, assets, respectively. During 2007, 30,000 units, or $1.1 million par value, of the Class B Units were redeemed by the holder in cash at the option of the Company. Minority interest relating to the units was $40.5 million and $40.4 million as of December 31, 2008 and 2007, respectively. Minority interests also includes 138,015 convertible units issued during 2006, by the Company, which are valued at approximately $5.3 million, including a fair market value adjustment of $0.3 million, related to an interest acquired in an office building located in Albany, NY. These units are redeemable at the option of the holder after one year for cash or at the option of the Company for the Company’s common stock at a ratio of 1:1. The holder is entitled to a distribution equal to the dividend rate of the Company’s common stock. The Company is restricted from disposing of these assets, other than through a tax free transaction, until January 2017. Minority interest had also included approximately 4.8 million convertible units (the “Convertible Units”) issued by the Company valued at $80.0 million related to an interest acquired in a shopping center property located in Daly City, CA, in 2002. The Convertible Units were convertible at a ratio of 1:1 into Common Stock and were entitled to a distribution equal to the dividend rate of the Company’s common stock multiplied by 1.1057. During 2008, all of these Convertible Units were redeemed. The Company elected to redeem these Convertible Units, at a ratio of one for one, for an aggregate of 4.8 million shares of Common Stock, of which 1.0 million shares were valued at $17.26 per share and 3.8 million shares were valued at $15.02 per share. As of December 31, 2008, there is no minority interest relating to these units. 114 KIMCO REALTY CORPORATION AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, CONTINUED 15. FAIR VALUE DISCLOSURE OF FINANCIAL INSTRUMENTS: All financial instruments of the Company are reflected in the accompanying Consolidated Balance Sheets at amounts which, in management’s estimation based upon an interpretation of available market information and valuation methodologies, reasonably approximate their fair values except those listed below, for which fair values are reflected. The valuation method used to estimate fair value for fixed-rate and variable-rate debt and minority interests relating to mandatorily redeemable non-controlling interests associated with finite-lived subsidiaries of the Company is based on discounted cash flow analyses, with assumptions that include credit spreads, loan amounts and debt maturities. The fair values for marketable securities are based on published or securities dealers’ estimated market values. Such fair value estimates are not necessarily indicative of the amounts that would be realized upon disposition. The following are financial instruments for which the Company’s estimate of fair value differs from the carrying amounts (in thousands): Marketable Securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Notes Payable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Mortgages Payable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Construction Payable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Mandatorily Redeemable Minority Interests December 31, 2008 2007 Carrying Amounts $ 318,570 $ 3,440,819 $ 847,491 $ 268,337 Estimated Fair Value $ 218,786 $ 2,766,187 $ 838,503 $ 262,485 Carrying Amounts $ 201,848 $ 3,131,765 $ 838,738 $ 245,914 Estimated Fair Value $ 212,451 $ 3,095,004 $ 824,609 $ 245,914 (termination dates ranging from 2019 – 2027) . . . . . . . . $ 2,895 $ 5,444 $ 3,070 $ 6,521 On January 1, 2008, the Company adopted the provisions required by SFAS No. 157 relating to financial assets and liabilities. SFAS No. 157 defines fair value, establishes a framework for measuring fair value, and expands disclosures about fair value measurements. SFAS No. 157 applies to reported balances that are required or permitted to be measured at fair value under existing accounting pronouncements; accordingly, the standard does not require any new fair value measurements of reported balances. SFAS No. 157 emphasizes that fair value is a market-based measurement, not an entity-specific measurement. Therefore, a fair value measurement should be determined based on the assumptions that market participants would use in pricing the asset or liability. As a basis for considering market participant assumptions in fair value measurements, SFAS No. 157 establishes a fair value hierarchy that distinguishes between market participant assumptions based on market data obtained from sources independent of the reporting entity (observable inputs that are classified within Levels 1 and 2 of the hierarchy) and the reporting entity’s own assumptions about market participant assumptions (unobservable inputs classified within Level 3 of the hierarchy). Level 1 inputs utilize quoted prices (unadjusted) in active markets for identical assets or liabilities that the Company has the ability to access. Level 2 inputs are inputs other than quoted prices included in Level 1 that are observable for the asset or liability, either directly or indirectly, such as interest rates, foreign exchange rates and yield curves that are observable at commonly quoted intervals. Level 3 inputs are unobservable inputs for the asset or liability, which are typically based on an entity’s own assumptions, as there is minimal, if any, related market activity. In instances where the determination of the fair value measurement is based on inputs from different levels of the fair value hierarchy, the level in the fair value hierarchy within which the entire fair value measurement falls is based on the lowest level input that is significant to the fair value measurement in its entirety. The Company’s assessment of the significance of a particular input to the fair value measurement in its entirety requires judgment, and considers factors specific to the asset or liability. The Company has certain financial instruments that must be measured under the new fair value standard including: available for sale securities, convertible notes and derivatives. The Company currently does not have non-financial assets and non-financial liabilities that are required to be measured at fair value on a recurring basis. 115 KIMCO REALTY CORPORATION AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, CONTINUED Available for sale securities are measured at fair value using quoted market prices and are classified within Level 1 of the valuation hierarchy. The Company has an investment in convertible notes for which it separately accounts for the conversion option as an embedded derivative. The convertible notes and conversion option are measured at fair value determined using widely accepted valuation techniques including pricing models. These models reflect the contractual terms of the convertible notes, including the term to maturity, and uses observable market-based inputs, including interest rate curves, implied volatilities, stock price, dividend yields and foreign exchange rates. Based on these inputs the Company has determined that its convertible notes and conversion option valuations are classified within Level 2 of the fair value hierarchy. The Company uses interest rate swaps to manage its interest rate risk. The fair values of interest rate swaps are determined using the market standard methodology of netting the discounted future fixed cash receipts (or payments) and the discounted expected variable cash payments (or receipts). The variable cash payments (or receipts) are based on an expectation of future interest rates (forward curves) derived from observable market interest rate curves. Based on these inputs the Company has determined that its interest rate swap valuations are classified within Level 2 of the fair value hierarchy. To comply with the provisions of SFAS No. 157, the Company incorporates credit valuation adjustments to appropriately reflect both its own nonperformance risk and the respective counterparty’s nonperformance risk in the fair value measurements. The credit valuation adjustments associated with its derivatives utilize Level 3 inputs, such as estimates of current credit spreads to evaluate the likelihood of default by itself and its counterparties. However, as of December 31, 2008, the Company has assessed the significance of the impact of the credit valuation adjustments on the overall valuation of its derivative positions and has determined that the credit valuation adjustments are not significant to the overall valuation of its derivatives. The table below presents the Company’s assets and liabilities measured at fair value on a recurring basis as of December 31, 2008, aggregated by the level in the fair value hierarchy within which those measurements fall. Assets and Liabilities Measured at Fair Value on a Recurring Basis at December 31, 2008 (in thousands): Balance at December 31, 2008 Level 1 Level 2 Level 3 Assets: Marketable equity securities. . . . . . . . . . . . . . . . . . . . . . Convertible notes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Conversion option . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 46,452 $113,713 6,063 $ Liabilities: $ $46,452 $ — $113,713 6,063 $ — $ — $ — $ — $ — Interest rate swaps . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 734 $ — $ 734 $ — During 2008, the Company recognized nonrecurring non-cash impairment charges of $15.5 million against the carrying value of its investment in its unconsolidated joint ventures with PREI, KimPru, reflecting an other-than- temporary decline in the fair value of its investment resulting from further significant declines in the real estate markets during the fourth quarter of 2008. The Company’s estimated fair values relating to these impairment assessments are based upon discounted cash flow models that include all estimated cash inflows and outflows over a specified holding period. These cash flows are comprised of unobservable inputs which include contractual rental revenues and forecasted rental revenues and expenses based upon current market conditions and expectations for growth. Capitalization rates and discount rates utilized in these models are based upon observable rates that the Company believes to be within a reasonable range of current market rates for the respective properties. Based on these inputs the Company has determined that its valuation of its KimPru investment is classified within Level 3 of the fair value hierarchy. 16. FINANCIAL INSTRUMENTS - DERIVATIVES AND HEDGING: The Company is exposed to the effect of changes in interest rates, foreign currency exchange rate fluctuations and market value fluctuations of equity securities. The Company limits these risks by following established risk management policies and procedures including the use of derivatives. 116 KIMCO REALTY CORPORATION AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, CONTINUED The principal financial instruments generally used by the Company are interest rate swaps, foreign currency exchange forward contracts, cross currency swaps and equity warrant contracts. The Company, from time to time, hedges the future cash flows of its floating-rate debt instruments to reduce exposure to interest rate risk principally through interest rate swaps with major financial institutions. The following tables summarize the notional values and fair values of the Company’s derivative financial instruments as of December 31, 2008 and 2007: As of December 31, 2008 Hedge Type Interest rate swaps – cash flow (a) . . . . . . . . . . . . . . . . . . . . . . . . . Interest rate swaps – un-designated . . . . . . . . . . . . . . . . . . . . . . . . Notional Value $18.75 million $ 2.96 million Rate 5.06% 6.35% Maturity 5/09 3/16 As of December 31, 2007 Hedge Type Interest rate swaps – cash flow . . . . . . . . . . . . . . . . . . . . . . . . . . . . Interest rate swaps – un-designated . . . . . . . . . . . . . . . . . . . . . . . . Notional Value $18.75 million $ 2.96 million Rate 5.06% 6.35% Maturity 5/09 3/16 Fair Value (in millions USD) ($0.3) ($0.5) Fair Value (in millions USD) ($0.2) ($0.1) (a) This interest rate swap was entered into during 2007 and is designated as a cash flow hedge. The swap is hedging the variability of floating rate interest payments on the debt of a consolidated subsidiary. No hedge ineffectiveness on this cash flow hedge was recognized during 2008 and 2007. As of December 31, 2008 and 2007, respectively, these derivative instruments were reported at their fair value as other liabilities of ($0.8 million) and ($0.3) million. The Company expects to reclassify to earnings less than $1.0 million of the current OCI balance during the next 12 months. 17. PREFERRED STOCK, COMMON STOCK AND CONVERTIBLE UNIT TRANSACTIONS: During September 2008, the Company completed a primary public stock offering of 11,500,000 shares of the Company’s common stock. The net proceeds from this sale of common stock, totaling approximately $409.4 million (after related transaction costs of $0.6 million) were used to partially repay the outstanding balance under the Company’s U.S. revolving credit facility. During October 2007, the Company issued 18,400,000 Depositary Shares (the “Class G Depositary Shares”), after the exercise of an over-allotment option, each representing a one-hundredth fractional interest in a share of the Company’s 7.75% Class G Cumulative Redeemable Preferred Stock, par value $1.00 per share (the “Class G Preferred Stock”). Dividends on the Class G Depositary Shares are cumulative and payable quarterly in arrears at the rate of 7.75% per annum based on the $25.00 per share initial offering price, or $1.9375 per annum. The Class G Depositary Shares are redeemable, in whole or part, for cash on or after October 10, 2012, at the option of the Company, at a redemption price of $25.00 per depositary share, plus any accrued and unpaid dividends thereon. The Class G Depositary Shares are not convertible or exchangeable for any other property or securities of the Company. Net proceeds from the sale of the Class G Depositary Shares, totaling approximately $444.5 million (after related transaction costs of $15.5 million) were used for general corporate purposes, including funding property acquisitions, investments in the Company’s institutional management programs and other investment activities. The Company also used a portion of the proceeds to partially repay amounts outstanding under its U.S. Credit Facility. The Class G Preferred Stock (represented by the Class G Depositary Shares outstanding) ranks pari passu with the Company’s Class F Preferred Stock as to voting rights, priority for receiving dividends and liquidation preference as set forth below. During June 2003, the Company issued 7,000,000 Depositary Shares (the “Class F Depositary Shares”), each such Class F Depositary Share representing a one-tenth fractional interest of a share of the Company’s 6.65% Class F Cumulative Redeemable Preferred Stock, par value $1.00 per share (the “Class F Preferred Stock”). Dividends on the Class F Depositary Shares are cumulative and payable quarterly in arrears at the rate of 6.65% per annum based on the $25.00 per share initial offering price, or $1.6625 per annum. The Class F Depositary Shares are redeemable, in whole 117 KIMCO REALTY CORPORATION AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, CONTINUED or part, for cash on or after June 5, 2008, at the option of the Company, at a redemption price of $25.00 per Depositary Share, plus any accrued and unpaid dividends thereon. The Class F Depositary Shares are not convertible or exchangeable for any other property or securities of the Company. The Class F Preferred Stock (represented by the Class F Depositary Shares outstanding) ranks pari passu with the Company’s Class F Preferred Stock as to voting rights, priority for receiving dividends and liquidation preference as set forth below. Voting Rights As to any matter on which the Class F Preferred Stock may vote, including any action by written consent, each share of Class F Preferred Stock shall be entitled to 10 votes, each of which 10 votes may be directed separately by the holder thereof. With respect to each share of Preferred Stock, the holder thereof may designate up to 10 proxies, with each such proxy having the right to vote a whole number of votes (totaling 10 votes per share of Class F Preferred Stock). As a result, each Class F Depositary Share is entitled to one vote. As to any matter on which the Class G Preferred Stock may vote, including any actions by written consent, each share of the Class G Preferred Stock shall be entitled to 100 votes, each of which 100 votes may be directed separately by the holder thereof. With respect to each share of Class G Preferred Stock, the holder thereof may designate up to 100 proxies, with each such proxy having the right to vote a whole number of votes (totaling 100 votes per share of Class G Preferred Stock). As a result, each Class G Depositary Share is entitled to one vote. Liquidation Rights In the event of any liquidation, dissolution or winding up of the affairs of the Company, the Preferred Stock holders are entitled to be paid, out of the assets of the Company legally available for distribution to its stockholders, a liquidation preference of $250.00 Class F Preferred per share and $2,500.00 Class G Preferred per share ($25.00 per Class F and Class G Depositary Share), plus an amount equal to any accrued and unpaid dividends to the date of payment, before any distribution of assets is made to holders of the Company’s common stock or any other capital stock that ranks junior to the Preferred Stock as to liquidation rights. During October 2002, the Company acquired an interest in a shopping center property located in Daly City, CA, valued at $80.0 million, through the issuance of approximately 4.8 million Convertible Units which are convertible at a ratio of 1:1 into the Company’s common stock. The unit holder has the right to convert the Convertible Units at any time after one year. In addition, the Company has the right to mandatorily require a conversion after ten years. If at the time of conversion the common stock price for the 20 previous trading days is less than $16.785 per share, the unit holder would be entitled to additional shares; however, the maximum number of additional shares is limited to 503,932 based upon a floor Common Stock price of $15.180. The Company has the option to settle the conversion in cash. Dividends on the Convertible Units are paid quarterly at the rate of the Company’s common stock dividend multiplied by 1.1057. During 2008, all of these Convertible Units were redeemed. The Company elected to redeem these Convertible Units, at a ratio of 1:1, for 4.8 million shares of Common Stock, of which 1.0 million shares were valued at $17.26 per share and 3.8 million shares were valued at $15.02 per share. During March 2006, the shareholders of Atlantic Realty Trust (“Atlantic Realty”) approved the proposed merger with the Company and the closing occurred on March 31, 2006. As consideration for this transaction, the Company issued Atlantic Realty shareholders 1,274,420 shares of Common Stock, excluding 201,930 shares of Common Stock that were to be received by the Company and 546,580 shares of Common Stock that were to be received by the Company’s wholly owned TRS, at a price of $40.41 per share. During December 2008, the Company purchased the 546,580 shares from its TRS for a purchase price of $17.69 per share. The 546,580 shares had a carry-over basis from the Atlantic Realty share price of $17.10 per share. These shares are no longer considered issued. During 2006, the Company acquired interests in seven shopping center properties located throughout Puerto Rico. The properties were acquired through the issuance of approximately $158.6 million of non-convertible units, approximately $45.8 million of convertible units, approximately $131.2 million of non-recourse debt and $116.3 million in cash. The convertible units consist of (i) 2,627 Class B-1 Preferred Units, par value $10,000 per unit and 640,001 Class C DownREIT Units, valued at an issuance price of $30.52 per unit. Both the Class B-1 Units and the Class C DownREIT Units are redeemable by the holder at any time after November 30, 2010, for cash, or at the Company’s option, shares of the Company’s common stock. During 2007, 2,438 units, or $24.4 million, of the Class B-1 Preferred Units were 118 KIMCO REALTY CORPORATION AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, CONTINUED redeemed and 61,804 units, or $1.9 million, of the Class C DownREIT Units were redeemed under the Loan provision of the Agreement. The Company opted to settle these units in cash. The number of shares of Common Stock issued upon conversion of the Class B-1 Preferred Units would be equal to the Class B-1 Cash Redemption Amount, as defined, which ranges from $6,000 to $14,000 per Class B-1 Preferred Unit depending on the Common Stock’s Adjusted Current Trading Price, as defined, divided by the average daily market price for the 20 consecutive trading days immediately preceding the redemption date. Prior to January 1, 2009, the number of shares of Common Stock issued upon conversion of the Class C DownREIT Units would be equal to the Class C Cash Amount which equals the number of Class C DownREIT Units being redeemed, multiplied by the Adjusted Current Trading Price, as defined. After January 1, 2009, if the Adjusted Current Trading Price is greater than $36.62 then the Class C Cash Amount shall be an amount equal to the Adjusted Current Trading Price per Class C DownREIT Unit. If the Adjusted Current Trading Price is greater than $24.41 but less than $36.62, then the Class C Cash Amount shall be an amount equal to $30.51 per Class C DownREIT Unit, or is less than $24.41, then the Class C Cash Amount shall be an amount per Class C DownREIT Unit equal to the Adjusted Current Trading Price multiplied by 1.25. During April 2006, the Company acquired interests in two shopping center properties, located in Bay Shore and Centereach, NY, valued at an aggregate $61.6 million. The properties were acquired through the issuance of units from a consolidated subsidiary and consist of approximately $24.2 million of Redeemable Units, which are redeemable at the option of the holder, approximately $14.0 million of fixed rate Redeemable Units and the assumption of approximately $23.4 million of non-recourse mortgage debt. The Company has the option to settle the redemption of the $24.2 million redeemable units with Common Stock, at a ratio of 1:1 or in cash. During 2007, 30,000 units, or $1.1 million par value, of the Redeemable Units were redeemed by the holder. The Company opted to settle these units in cash. During June 2006, the Company acquired an interest in an office property, located in Albany, NY, valued at approximately $39.9 million. The property was acquired through the issuance of approximately $5.0 million of redeemable units from a consolidated subsidiary, which are redeemable at the option of the holder after one year, and the assumption of approximately $34.9 million of non-recourse mortgage debt. The Company has the option to settle the redemption with Common Stock, at a ratio of 1:1 or in cash. 18. SUPPLEMENTAL SCHEDULE OF NON-CASH INVESTING/FINANCING ACTIVITIES: The following schedule summarizes the non-cash investing and financing activities of the Company for the years ended December 31, 2008, 2007 and 2006 (in thousands): 2008 2007 2006 Acquisition of real estate interests by issuance of Common Stock and/or assumption of debt . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Acquisition of real estate interest by issuance of redeemable units . . . . . . . . . . Exchange of downREIT units for Common Stock . . . . . . . . . . . . . . . . . . . . . . . Disposition/transfer of real estate interest by origination of mortgage debt . . . Acquisition of real estate interests through proceeds held in escrow. . . . . . . . . Disposition/transfer of real estate interests by assignment of mortgage debt . . Proceeds held in escrow through sale of real estate interest. . . . . . . . . . . . . . . . Acquisition of real estate through the issuance of an unsecured obligation. . . . Disposition of real estate through the issuance of an unsecured obligation. . . . Investment in real estate joint venture by contribution of property . . . . . . . . . . Deconsolidation of Joint Venture: Decrease in real estate and other assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Decrease in minority interest, construction loan and other liabilities . . . . . . Declaration of dividends paid in succeeding period . . . . . . . . . . . . . . . . . . . . . . Consolidation of Joint Venture: $ 82,614 — $ $ $ $ 96,226 $ $ 80,000 $ 27,175 $ $ $ $ $ $ 6,265 — $ 68,031 — $ — $ — $ $ — $ $ 1,627,058 247,475 — — 140,802 293,254 39,210 10,586 — — — $ — $ — $ $ — $ — $ — $ — $ $ 740 $ 55,453 $ 55,453 $ 131,097 $ 113,074 $ 113,074 $ 112,052 $ $ $ — — 93,222 Increase in real estate and other assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 68,360 $ — $ — Consolidation of Kimsouth: Increase in real estate and other assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Increase in mortgage payable and other liabilities . . . . . . . . . . . . . . . . . . . . . $ $ — $ — $ — $ — $ 28,377 28,377 119 KIMCO REALTY CORPORATION AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, CONTINUED 19. TRANSACTIONS WITH RELATED PARTIES: The Company provides management services for shopping centers owned principally by affiliated entities and various real estate joint ventures in which certain stockholders of the Company have economic interests. Such services are performed pursuant to management agreements which provide for fees based upon a percentage of gross revenues from the properties and other direct costs incurred in connection with management of the centers. Ripco Real Estate Corp. was formed in 1991 and employs approximately 40 professionals and serves numerous retailers, REITS and developers. Ripco’s business activities include serving as a leasing agent and representative for national and regional retailers including Target, Best Buy, Kohls and many others, providing real estate brokerage services and principal real estate investing. Mr. Todd Cooper, an officer and 50% shareholder of Ripco, is a son of Mr. Milton Cooper, Chief Executive Officer and Chairman of the Board of Directors of the Company. During 2008 and 2007, the Company paid brokerage commissions of $478,330 and $257,385, respectively, to Ripco for services rendered primarily as leasing agent for various national tenants in shopping center properties owned by the Company. The Company believes that the brokerage commissions paid were at or below the customary rates for such leasing services. Additionally, the Company has the following joint venture investments with Ripco. During 2005, the Company acquired three operating properties and one land parcel, through joint ventures, in which the Company and Ripco each hold 50% non-controlling interests for an aggregate purchase price of approximately $27.1 million, including the assumption of approximately $9.3 million of non-recourse mortgage debt encumbering two of the properties. The Company accounts for its investment in these joint ventures under the equity method of accounting. Subsequent to these acquisitions, the joint ventures obtained four individual one-year loans aggregating $20.4 million with interest rates ranging from LIBOR plus 1.00% to LIBOR plus 3.50%. During 2007, one of these properties was sold for a sales price of approximately $10.5 million, including the pay down of $5.0 million of debt. These loans are scheduled to mature in May 2009, October 2009 and December 2009. During 2008, one of the loans was increased by $2.0 million. As of December 31, 2008, there was an aggregate of $17.4 million outstanding on these loans. These loans are jointly and severally guaranteed by the Company and the joint venture partner. Reference is made to Note 7 for additional information regarding transactions with related parties. 20. COMMITMENTS AND CONTINGENCIES: The Company and its subsidiaries are primarily engaged in the operation of shopping centers which are either owned or held under long-term leases which expire at various dates through 2095. The Company and its subsidiaries, in turn, lease premises in these centers to tenants pursuant to lease agreements which provide for terms ranging generally from 5 to 25 years and for annual minimum rentals plus incremental rents based on operating expense levels and tenants’ sales volumes. Annual minimum rentals plus incremental rents based on operating expense levels comprised approximately 99% of total revenues from rental property for each of the three years ended December 31, 2008, 2007 and 2006. The future minimum revenues from rental property under the terms of all non-cancelable tenant leases, assuming no new or renegotiated leases are executed for such premises, for future years are approximately as follows (in millions): 2009, $528.5; 2010, $492.7; 2011, $441.5; 2012, $387.7; 2013, $326.4 and thereafter; $1,647.9. Minimum rental payments under the terms of all non-cancelable operating leases pertaining to the Company’s shopping center portfolio for future years are approximately as follows (in millions): 2009, $10.9; 2010, $8.9; 2011, $6.7; 2012, $6.0; 2013, $5.3; and thereafter, $108.7. In June 2006, the FASB issued Financial Interpretation No. 48, “Accounting for Uncertainty in Income Taxes” (“FIN 48”), which clarifies the accounting for uncertainty in income taxes recognized in a company’s financial statements in accordance with FASB Statement No. 109, “Accounting for Income Taxes”. The interpretation prescribes a recognition threshold and measurement attribute criteria for the financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. The interpretation also provides guidance on de-recognition, classification, interest and penalties, accounting in interim periods, disclosure and transition. The Company adopted the provisions of FIN 48 on January 1, 2007. The Company does not have any material unrecognized tax benefits, therefore, the adoption of FIN 48 did not have a material impact on the Company’s financial position or results of operations. 120 KIMCO REALTY CORPORATION AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, CONTINUED During September 2008, a joint venture in which the Company has a non-controlling ownership interest obtained a $37.0 million mortgage loan, which is jointly and severally guaranteed by the Company and the joint venture partner, with a commitment of up to $37.0 million of which $26.9 million was outstanding as of December 31, 2008. This loan bears interest at 6.375% and is scheduled to mature in October 2019. During October 2008, a joint venture in which the Company has a non-controlling ownership interest entered into an extension and modification agreement for a $28.0 million term loan. The loan is guaranteed by the Company, with a commitment of up to $28.0 million of which $28.0 million was outstanding as of December 31, 2008. This loan bears interest at LIBOR plus 1.65%, or 2.09% at December 31, 2008, and is scheduled to mature in March 2009. The Company is currently negotiating with lenders regarding extending or refinancing this debt. During June 2007, the Company entered into a joint venture, in which the Company has a non-controlling ownership interest, and acquired all of the common stock of InTown Suites Management, Inc. This investment was funded with approximately $186.0 million of new cross-collateralized non-recourse mortgage debt with a fixed interest rate of 5.59%, encumbering 35 properties, a $153.0 million three-year unsecured credit facility, with two one-year extension options, which bears interest at LIBOR plus 0.375% and is guaranteed by the Company and the assumption of $278.6 million cross-collateralized non-recourse mortgage debt with fixed interest rates ranging from 5.19% to 5.89%, encumbering 86 properties. The joint venture partner has pledged its equity interest for any guaranty payment the Company is obligated to pay. The outstanding balance on the three-year unsecured credit facility was $147.5 million as of December 31, 2008. The joint venture obtained an interest rate swap at 5.37% on $128.0 million of this debt. The swap is designated as a cash flow hedge and is deemed highly effective; as such adjustments to the swaps fair value are recorded in Other comprehensive income. During 2007, the Company entered into a joint venture, in which the Company has a non-controlling ownership interest to acquire a property in Houston, Texas. This investment was funded with a $24.5 million unsecured credit facility scheduled to mature in November 2009, with a six-month extension option available, which bears interest at LIBOR plus 0.375% and is guaranteed by the Company. The outstanding balance on this credit facility as of December 31, 2008 was $24.5 million. During April 2007, the Company entered into a joint venture, in which the Company has a 50% non-controlling ownership interest to acquire a property in Visalia, CA. Subsequent to this acquisition the joint venture obtained a $6.0 million three-year promissory note which bears interest at LIBOR plus 0.75%, and has an extension option of two-years. This loan is jointly and severally guaranteed by the Company and the joint venture partner. As of December 31, 2008, the outstanding balance on this loan was $6.0 million. In October 2007, the Company formed a wholly-owned captive insurance company, Kimco Insurance Company, Inc., (“KIC”), which provides general liability insurance coverage for all losses below the deductible under our third-party policy. The Company entered into the Insurance Captive as part of its overall risk management program and to stabilize its insurance costs, manage exposure and recoup expenses through the functions of the captive program. The Company capitalized KIC in accordance with the applicable regulatory requirements. KIC established annual premiums based on projections derived from the past loss experience of the Company’s properties. KIC has engaged an independent third party to perform an actuarial estimate of future projected claims, related deductibles and projected expenses necessary to fund associated risk management programs. Premiums paid to KIC may be adjusted based on this estimate, like premiums paid to third-party insurance companies, premiums paid to KIC may be reimbursed by tenants pursuant to specific lease terms. The Company believes that the addition of KIC will provide increased comprehensive insurance coverage at an overall lower cost than would otherwise be available in the market. During August 2008, KimPru entered into a new $650.0 million credit facility which matures in August 2009, with the option to extend for one year, and bears interest at a rate of LIBOR plus 1.25%. KimPru is obligated to pay down a minimum of $165.0 million, among other requirements, in order to exercise the one-year extension option. The required pay down is expected to be sourced from property sales, other debt financings and/or capital contributions by the partners. This facility is guaranteed by the Company with a guarantee from PREI to the Company for 85% of any guaranty payment the Company is obligated to make. Proceeds from this new credit facility were used to repay the 121 KIMCO REALTY CORPORATION AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, CONTINUED outstanding balance of $658.7 million under an existing $1.2 billion credit facility, which was scheduled to mature in October 2008, and bore interest at a rate of LIBOR plus 0.45%. As of December 31, 2008, the outstanding balance on the new credit facility was $650.0 million. During 2006, an entity in which the Company has a preferred equity investment, located in Montreal, Canada, obtained a non-recourse construction loan which is collateralized by the respective land and project improvements. Additionally, the Company has provided a guaranty to the lender and the developer partner has provided an indemnity to the Company for 25% of all debt. As of December 31, 2008, there was CAD $89.0 million (approximately USD $72.7 million) outstanding on this construction loan. Additionally, during 2006, KROP obtained a one-year $15.0 million unsecured term loan, which bore interest at LIBOR plus 0.5%. This loan was guaranteed by the Company and GECRE had guaranteed reimbursement to the Company of 80% of any guaranty payment the Company was obligated to make. During 2007, KROP paid down the remaining balance of the loan. The Company has issued letters of credit in connection with the completion and repayment guarantees for construction loans encumbering certain of the Company’s ground-up development projects and guaranty of payment related to the Company’s insurance program. These letters of credit aggregate approximately $34.3 million. In connection with the construction of its development projects and related infrastructure, certain public agencies require performance and surety bonds be posted to guarantee that the Company’s obligations are satisfied. These bonds expire upon the completion of the improvements and infrastructure. As of December 31, 2008, there were approximately $61.8 million bonds outstanding. Additionally, the RioCan Venture, an entity in which the Company holds a 50% non-controlling interest, has a CAD $7.0 million (approximately USD $5.7 million) letter of credit facility. This facility is jointly guaranteed by RioCan and the Company and had approximately CAD $4.6 million (approximately USD $3.8 million) outstanding as of December 31, 2008, relating to various development projects. During 2005, an entity in which the Company has a preferred equity investment obtained a CAD $24.3 million (approximately USD $19.8 million) credit facility to finance the construction of a 0.1 million square foot shopping center property located in Kamloops, B.C. This facility bears interest at Royal Bank Prime Rate (“RBP”) plus 0.5% per annum and was scheduled to mature in March 2008. During 2008 RioCan extended this facility to expire on February 28, 2009. The Company and its partner in this entity each have a limited and several guarantee of CAD $7.5 million (approximately USD $6.1 million) on this facility. As of December 31, 2008, there was CAD $22.3 million (approximately USD $18.2 million) outstanding on this facility. The Company and its partner are currently negotiating with lenders regarding extending or refinancing this debt. During 2005, PL Retail entered into a $39.5 million unsecured revolving credit facility, which bore interest at LIBOR plus 0.675% and was scheduled to mature in February 2007. During 2008, the loan was extended to February 2009 at a reduced rate of LIBOR plus 0.50%. This facility is guaranteed by the Company and the joint venture partner has guaranteed reimbursement to the Company of 85% of any guaranty payment the Company is obligated to make. As of December 31, 2008, there was $35.6 million outstanding under this facility. During February 2009, PL Retail made a principal payment of $5.6 million and obtained a one-year extension option at LIBOR plus 400 basis points for the remaining balance of $30.0 million. The Company is subject to various legal proceedings and claims that arise in the ordinary course of business. These matters are generally covered by insurance. Management believes that the final outcome of such matters will not have a material adverse effect on the financial position, results of operations or liquidity of the Company. The Company evaluated these guarantees in connection with the provisions of FASB Interpretation No. 45, Guarantor’s Accounting and Disclosure Requirements for Guarantees, Including Indirect Guarantees of Indebtedness of Others and determined that the impact did not have a material effect on the Company’s financial position or results of operations. 122 KIMCO REALTY CORPORATION AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, CONTINUED 21. INCENTIVE PLANS: The Company maintains a stock option plan (the “Plan”) pursuant to which a maximum of 47,000,000 shares of the Company’s common stock may be issued for qualified and non-qualified options. Options granted under the Plan generally vest ratably over a three to five-year term , expire ten years from the date of grant and are exercisable at the market price on the date of grant, unless otherwise determined by the Board at its sole discretion. In addition, the Plan provides for the granting of certain options to each of the Company’s non-employee directors (the “Independent Directors”) and permits such Independent Directors to elect to receive deferred stock awards in lieu of directors’ fees. The Company accounts for stock options in accordance with SFAS No. 123R which requires that all share based payments to employees, including grants of employee stock options, be recognized in the statement of operations over the service period based on their fair values. The fair value of each option award is estimated on the date of grant using the Black-Scholes option pricing formula. The assumption for expected volatility has a significant affect on the grant date fair value. Volatility is determined based on the historical equity of common stock for the most recent historical period equal to the expected term of the options. The more significant assumptions underlying the determination of fair values for options granted during 2008, 2007 and 2006 were as follows: Weighted average fair value of options granted . . . . . . . . . . . . . . . . . . . Weighted average risk-free interest rates . . . . . . . . . . . . . . . . . . . . . . . . Weighted average expected option lives (in years) . . . . . . . . . . . . . . . . Weighted average expected volatility . . . . . . . . . . . . . . . . . . . . . . . . . . . Weighted average expected dividend yield . . . . . . . . . . . . . . . . . . . . . . Year Ended December 31, 2007 $ 7.41 2006 $ 5.55 2008 $ 5.73 3.13% 6.38 26.16% 4.33% 4.50% 6.50 19.01% 3.77% 4.72% 6.50 17.70% 4.39% Information with respect to stock options under the Plan for the years ended December 31, 2008, 2007, and 2006 are as follows: Options outstanding, January 1, 2006. . . . . . . . . . . . . . . . Exercised . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Granted . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Forfeited . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Options outstanding, December 31, 2006 . . . . . . . . . . . . . Exercised . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Granted . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Forfeited . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Options outstanding, December 31, 2007 . . . . . . . . . . . . . Exercised . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Granted . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Forfeited . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Options outstanding, December 31, 2008 . . . . . . . . . . . . . Shares 14,551,296 (2,196,947) 2,805,650 (366,406) 14,793,593 (1,884,421) 2,971,900 (257,618) 15,623,454 (1,862,209) 2,903,475 (400,898) 16,263,822 Weighted-Average Exercise Price Per Share $ 22.06 $ 17.80 $ 39.91 $ 28.13 $ 25.93 $ 20.22 $ 41.41 $ 35.87 $ 29.39 $ 20.59 $ 37.29 $ 38.64 $ 31.58 Options exercisable (fully vested)- December 31, 2006. . . . . . . . . . . . . . . . . . . . . . . . . December 31, 2007. . . . . . . . . . . . . . . . . . . . . . . . . December 31, 2008. . . . . . . . . . . . . . . . . . . . . . . . . 8,826,881 9,307,184 9,011,677 $ 20.37 $ 23.10 $ 26.00 Aggregate Intrinsic value (in millions) $145.8 $281.4 $133.7 $ 7.6 $217.0 $123.8 7.6 $ 123 KIMCO REALTY CORPORATION AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, CONTINUED The exercise prices for options outstanding as of December 31, 2008, range from $10.67 to $46.00 per share. The Company estimates forfeitures based on historical data. The weighted-average remaining contractual life for options outstanding as of December 31, 2008, was approximately 6.9 years. The weighted average-remaining contractual term of options currently exercisable as of December 31, 2008, was approximately 5.5 years. Options to purchase 5,031,718, 2,996,321, and 5,969,396, shares of the Company’s common stock were available for issuance under the Plan at December 31, 2008, 2007 and 2006, respectively. As of December 31, 2008, the Company had 7,252,145 options expected to vest, with a weighted-average exercise price per share of $38.52 and an aggregate intrinsic value of $0. Cash received from options exercised under the Plan was approximately $38.3 million, $38.1 million, and $39.1 million for the years ended December 31, 2008, 2007 and 2006, respectively. The total intrinsic value of options exercised during 2008, 2007 and 2006 was approximately $35.0 million, $54.4 million and $42.2 million, respectively. The Company recognized stock options expense of $12.3 million, $12.2 million, and $10.2 million for the years ended December 31, 2008, 2007 and 2006, respectively. As of December 31, 2008, the Company had $33.8 million of total unrecognized compensation cost related to unvested stock compensation granted under the Company’s Plan. That cost is expected to be recognized over a weighted average period of approximately 3.3 years. The Company maintains a 401(k) retirement plan covering substantially all officers and employees, which permits participants to defer up to the maximum allowable amount determined by the Internal Revenue Service of their eligible compensation. This deferred compensation, together with Company matching contributions, which generally equal employee deferrals up to a maximum of 5% of their eligible compensation (capped at $170,000), is fully vested and funded as of December 31, 2008. The Company contributions to the plan were approximately $1.5 million, $1.5 million and $1.3 million for the years ended December 31, 2008, 2007 and 2006, respectively. Due to current economic conditions resulting in the lack of transactional activity within the real estate industry as a whole the Company has accrued approximately $3.6 million at December 31, 2008, relating to severance costs associated with employees that have been terminated during January 2009. 22. INCOME TAXES: The Company elected to qualify as a REIT in accordance with the Code commencing with its taxable year which began January 1, 1992. To qualify as a REIT, the Company must meet a number of organizational and operational requirements, including a requirement that it currently distribute at least 90% of its adjusted REIT taxable income to its stockholders. It is management’s intention to adhere to these requirements and maintain the Company’s REIT status. As a REIT, the Company generally will not be subject to corporate federal income tax, provided that distributions to its stockholders equal at least the amount of its REIT taxable income as defined under the Code. If the Company fails to qualify as a REIT in any taxable year, it will be subject to federal income taxes at regular corporate rates (including any applicable alternative minimum tax) and may not be able to qualify as a REIT for four subsequent taxable years. Even if the Company qualifies for taxation as a REIT, the Company is subject to certain state and local taxes on its income and property, and federal income and excise taxes on its undistributed taxable income. In addition, taxable income from non- REIT activities managed through taxable REIT subsidiaries is subject to federal, state and local income taxes. 124 KIMCO REALTY CORPORATION AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, CONTINUED Reconciliation between GAAP Net Income and Federal Taxable Income: The following table reconciles GAAP net income to taxable income for the years ended December 31, 2008, 2007 and 2006 (in thousands): GAAP net income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Less: GAAP net income of taxable REIT subsidiaries . . . . . . . . . . . . . . . . GAAP net income from REIT operations (a) . . . . . . . . . . . . . . . . . . . . . . . . . . Net book depreciation in excess of tax depreciation. . . . . . . . . . . . . . . . . . . . . Deferred/prepaid/above and below market rents, net . . . . . . . . . . . . . . . . . . . . Exercise of non-qualified stock options . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Book/tax differences from investments in real estate joint ventures . . . . . . . . Book/tax difference on sale of property . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Valuation adjustment of foreign currency contracts . . . . . . . . . . . . . . . . . . . . . Book adjustment to property carrying values and marketable 2008 (Estimated) $ 249,902 (9,002) 240,900 20,686 (25,755) (15,104) 53,176 20,529 (35) 2007 (Actual) $ 442,830 (98,542) 344,288 31,963 (12,879) (26,210) 5,740 (8,788) 308 equity securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Other book/tax differences, net. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Adjusted taxable income subject to 90% dividend requirements . . . . . . . . . . . 78,593 11,019 $ 384,009 — 23,911 $ 358,333 Certain amounts in the prior periods have been reclassified to conform to the current year presentation. 2006 (Actual) $ 428,259 (33,795) 394,464 23,826 (11,964) (26,822) (7,127) (49,003) 142 — (5,219) $ 318,297 (a) All adjustments to “GAAP net income from REIT operations” are net of amounts attributable to minority interest and taxable REIT subsidiaries. Reconciliation between Cash Dividends Paid and Dividends Paid Deductions (in thousands): For the years ended December 31, 2008, 2007 and 2006 cash dividends paid exceeded the dividends paid deduction and amounted to $469,024, $384,502 and $332,552, respectively. Characterization of Distributions: The following characterizes distributions paid for the years ended December 31, 2008, 2007 and 2006, (in thousands): Preferred F Dividends Ordinary income. . . . . . . . . . . . . . . . . . . . . . . . . Capital gain . . . . . . . . . . . . . . . . . . . . . . . . . . . . Preferred G Dividends Ordinary income. . . . . . . . . . . . . . . . . . . . . . . . . Capital gain . . . . . . . . . . . . . . . . . . . . . . . . . . . . Common Dividends Ordinary income. . . . . . . . . . . . . . . . . . . . . . . . . Capital gain . . . . . . . . . . . . . . . . . . . . . . . . . . . . Return of capital . . . . . . . . . . . . . . . . . . . . . . . . . Total dividends distributed . . . . . . . . . . . . . . . . . . . 2008 2007 2006 $ 9,079 2,559 $ 11,638 7,123 78% $ 22% 4,515 100% $ 11,638 8,200 61% $ 39% 3,438 100% $ 11,638 70% 30% 100% $ 28,197 7,948 $ 36,145 78% 22% 100% — — — — — — — — — $ 290,656 80,036 50,549 $ 421,241 $ 469,024 69% $ 207,587 131,558 19% 12% 33,719 100% $ 372,864 $ 384,502 56% $ 211,803 89,856 35% 19,255 9% 100% $ 320,914 $ 332,552 — — — 66% 28% 6% 100% 125 KIMCO REALTY CORPORATION AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, CONTINUED Taxable REIT Subsidiaries (“TRS”): The Company is subject to federal, state and local income taxes on the income from its TRS activities, which include Kimco Realty Services (“KRS”), a wholly owned subsidiary of the Company and the consolidated entities of FNC, Kimsouth and Blue Ridge Real Estate Company/Big Boulder Corporation. Income taxes have been provided for on the asset and liability method as required by SFAS No. 109, Accounting for Income Taxes. Under the asset and liability method, deferred income taxes are recognized for the temporary differences between the financial reporting basis and the tax basis of the TRS assets and liabilities. The Company’s taxable income for book purposes and provision for income taxes relating to the Company’s TRS and taxable entities which have been consolidated for accounting reporting purposes, for the years ended December 31, 2008, 2007, and 2006, are summarized as follows (in thousands): Income/(loss) before income taxes . . . . . . . . . . . . . . . . . . . . . . . . . . (Provision)/benefit for income taxes: Federal . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . State and local . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Total tax provision . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . GAAP net income from taxable REIT subsidiaries . . . . . . . . . . . . . 2008 $ (3,972) 2007 $ 109,057 2006 $ 54,522 11,026 1,948 12,974 $ 9,002 (6,565) (3,950) (10,515) $ 98,542 (17,581) (3,146) (20,727) $ 33,795 The Company’s deferred tax assets and liabilities at December 31, 2008 and 2007, were as follows (in thousands): Deferred tax assets: Operating losses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Other. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Valuation allowance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Total deferred tax assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Deferred tax liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Net deferred tax assets. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 48,863 71,747 (33,783) 86,827 (2,656) $ 84,171 $ 64,728 19,163 (36,826) 47,065 (11,663) $ 35,402 2008 2007 Deferred tax assets and deferred tax liabilities are included in the caption Other assets and Other liabilities on the accompanying Consolidated Balance Sheets at December 31, 2008 and 2007. Operating losses and the valuation allowance are due to the Company’s consolidation of FNC and Kimsouth for accounting and reporting purposes. At December 31, 2008, FNC had approximately $125.3 million of net operating loss (“NOL”) carry forwards that expire from 2022 through 2025, with a tax value of approximately $48.9 million. At December 31, 2007, FNC had approximately $128.1 million of NOL carry forwards, with a tax value of approximately $50.0 million. A valuation allowance of $33.8 million has been established for a portion of these deferred tax assets. At December 31, 2007, Kimsouth had approximately $37.9 million of NOL carry forwards that expire from 2021 to 2023, with a tax value of approximately $14.8 million. A valuation allowance for $3.1 million had been established for a portion of these deferred tax assets. During 2008, Kimsouth fully utilized its remaining NOL carry forwards as a result of the recognition of equity in income from the Albertson’s investment during 2008. Other deferred tax assets and deferred tax liabilities relate primarily to differences in the timing of the recognition of income/(loss) between the GAAP and tax basis of accounting for (i) real estate joint ventures, (ii) other real estate investments, and (iii) other deductible temporary differences. The Company believes that, based on its operating strategy and consistent history of profitability, it is more likely than not that the total deferred tax assets of $86.8 million will be realized on future tax returns, primarily from the generation of future taxable income and the implementation of tax planning strategies that include the potential disposition of certain real estate assets and equity securities. 126 KIMCO REALTY CORPORATION AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, CONTINUED The income tax provision/(benefit) differ from the amount computed by applying the statutory federal income tax rate to taxable income before income taxes were as follows (in thousands): Federal provision/(benefit) at statutory tax rate (35%) . . . . . . . . . . . State and local taxes, net of federal Benefit . . . . . . . . . . . . . . . . . . . . Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Valuation allowance decrease . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2008 $ (1,390) (258) (8,283) (3,043) $(12,974) 2007 $ 38,170 7,089 (3,552) (31,192) $ 10,515 2006 $19,083 3,544 (1,900) — $20,727 23. SUPPLEMENTAL FINANCIAL INFORMATION: The following represents the results of operations, expressed in thousands except per share amounts, for each quarter during the years 2008 and 2007: Revenues from rental property(1) . . . . . . . . . . . . . . . . . . Net income/(loss) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Net income/(loss) per common share: Mar. 31 $ 188,794 $ 98,467 2008 (Unaudited) Sept. 30 $ 189,951 $ 108,584 (a) June 30 $ 182,970 $ 94,374 Dec. 31 $ 196,989 $ (51,523) (a) Basic . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Diluted . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ $ .34 .34 $ $ .33 .32 $ $ .38 .37 $ $ (.24) (.24) Revenues from rental property(1) . . . . . . . . . . . . . . . . . . Net income. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Net income per common share: 2007 (Unaudited) Mar. 31 $ 156,290 $ 153,764 June 30 $ 168,448 $ 128,022 Sept. 30 $ 171,906 $ 78,005 Dec. 31 $ 177,889 $ 83,039 Basic . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Diluted . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ $ .60 .59 $ $ .50 .49 $ $ .30 .29 $ $ .28 .28 (1) All periods have been adjusted to reflect the impact of operating properties sold during 2008 and 2007 and properties classified as held for sale as of December 31, 2008, which are reflected in the caption Discontinued operations on the accompanying Consolidated Statements of Income. (a) Out-of-Period Adjustment - During the fourth quarter of 2008, the Company identified an out-of-period adjustment in its consolidated financial statements for the year ended December 31, 2008. This adjustment related to the accounting for cash distributions received in excess of the Company’s carrying value of its investment in an unconsolidated joint venture. During the third quarter of 2008, the Company recorded as income approximately $8.5 million from cash distributions received in excess of the Company’s carrying value of its investment resulting from mortgage refinancing proceeds from one of its unconsolidated joint ventures. The Company recorded the $8.5 million as income as the Company had no guaranteed obligations or was otherwise committed to provide further financial support to the joint venture. It was determined in the fourth quarter of 2008, that although the Company in substance does not have any further obligations, in form, the Company is the general partner in this joint venture and does have a legal obligation relating to the partnership. As such, the Company should not have recognized the $8.5 million as income in the third quarter. The Company has reversed this amount from income in the fourth quarter of 2008. As a result of this out-of-period adjustment, net income was overstated by $8.5 million in the third quarter of 2008 and understated by $8.5 million in the fourth quarter of 2008, but correctly stated for the year ended December 31, 2008. The Company concluded that the $8.5 million adjustment was not material to the quarter ended September 30, 2008 or the quarter ended December 31, 2008. As such, this adjustment was recorded in the Company’s consolidated statements of income for the three months ended December 31, 2008, rather than restating the third quarter 2008 period. 127 KIMCO REALTY CORPORATION AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, CONTINUED Accounts and notes receivable in the accompanying Consolidated Balance Sheets net of estimated unrecoverable amounts were approximately $9.0 million at December 31, 2008 and 2007. 24. PRO FORMA FINANCIAL INFORMATION (UNAUDITED): As discussed in Notes 3, 4 and 5, the Company and certain of its subsidiaries acquired and disposed of interests in certain operating properties during 2008. The pro forma financial information set forth below is based upon the Company’s historical Consolidated Statements of Income for the years ended December 31, 2008 and 2007, adjusted to give effect to these transactions at the beginning of each year. The pro forma financial information is presented for informational purposes only and may not be indicative of what actual results of operations would have been had the transactions occurred at the beginning of each year, nor does it purport to represent the results of operations for future periods. (Amounts presented in millions, except per share figures.) Year ended December 31, Revenues from rental property . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Income before extraordinary gain . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Net income. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Net income before extraordinary gain per common share: 2008 $773.9 $227.6 $227.6 Basic . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Diluted . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 0.70 $ 0.70 Net income per common share: Basic . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Diluted . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 0.70 $ 0.70 2007 $696.6 $361.0 $411.3 $ 1.35 $ 1.33 $ 1.55 $ 1.52 128 KIMCO REALTY CORPORATION AND SUBSIDIARIES SCHEDULE II - VALUATION AND QUALIFYING ACCOUNTS For years Ended December 31, 2008, 2007 and 2006 (in thousands) Year Ended December 31, 2008 Allowance for uncollectable accounts . . . . . . . . . . . . . . Allowance for deferred tax asset . . . . . . . . . . . . . . . . . . Year Ended December 31, 2007 Allowance for uncollectable accounts . . . . . . . . . . . . . . Allowance for deferred tax asset . . . . . . . . . . . . . . . . . . Year Ended December 31, 2006 Allowance for uncollectable accounts . . . . . . . . . . . . . . Allowance for deferred tax asset . . . . . . . . . . . . . . . . . . Balance at beginning of period Charged to expenses Adjustments to valuation accounts Deductions Balance at end of period $ 9,000 $ 36,826 $ 3,066 — $ — $ (3,043) $ $ (3,066) $ — $ 9,000 $33,783 614 — $ $ — $(31,192) $ 715 — $ $ — $ 34,235 $ (114) $ $ — $ 9,000 $36,826 (715) $ $ — $ 8,500 $68,018 $ 8,500 $ 68,018 $ 8,500 $ 33,783 129 KIMCO REALTY CORPORATION AND SUBSIDIARIES SCHEDULE III – REAL ESTATE AND ACCUMULATED DEPRECIATION December 31, 2008 INITIAL COST KDI-GLENN SQUARE KDI-THE GROVE KDI-CHANDLER AUTO MALLS DEV- EL MIRAGE TALAVI TOWN CENTER KIMCO MESA 679, INC. AZ MESA RIVERVIEW KDI-ANA MARIANA POWER CENTER METRO SQUARE HAYDEN PLAZA NORTH PHOENIX, COSTCO PHOENIX 1 3 0 KDI-ASANTE RETAIL CENTER DEV-SURPRISE II ALHAMBRA, COSTCO MADISON PLAZA CHULA VISTA, COSTCO LAND 3,306,779 18,951,763 9,318,595 6,786,441 8,046,677 2,915,000 15,000,000 30,043,645 4,101,017 2,015,726 5,324,501 2,450,341 8,702,635 4,138,760 4,995,639 5,874,396 6,460,743 CORONA HILLS, COSTCO 13,360,965 EAST AVENUE MARKET PLACE LABAND VILLAGE SC CUPERTINO VILLAGE CHICO CROSSROADS CORONA HILLS MARKET PLACE ELK GROVE VILLAGE WATERMAN PLAZA GOLD COUNTRY CENTER LA MIRADA THEATRE CENTER YOSEMITE NORTH SHOPPING CTR RALEY’S UNION SQUARE SOUTH NAPA MARKET PLACE PLAZA DI NORTHRIDGE POWAY CITY CENTRE NORTH POINT PLAZA RED BLUFF SHOPPING CTR TYLER STREET THE CENTRE SANTA ANA, HOME DEPOT FULTON MARKET PLACE MARIGOLD SC BLACK MOUNTAIN VILLAGE TRUCKEE CROSSROADS 1,360,457 5,600,000 19,886,099 9,975,810 9,727,446 1,770,000 784,851 3,272,212 8,816,741 2,120,247 1,185,909 1,100,000 12,900,000 5,854,585 1,299,733 1,410,936 3,020,883 3,403,724 4,592,364 2,966,018 15,300,000 4,678,015 2,140,000 WESTLAKE SHOPPING CENTER 16,174,307 BUILDING & IMPROVEMENT SUBSEQUENT TO ACQUISITION — 6,403,809 — 503,987 17,016,784 11,686,291 — — 16,410,632 4,126,509 21,269,943 9,802,046 3,405,683 94,572 19,982,557 23,476,190 25,863,153 53,373,453 3,055,127 13,289,347 46,534,919 30,534,524 24,778,390 7,470,136 1,762,508 7,864,878 41,366,240 18,133,075 (1,030,765) 60,409 189,093 1,678,931 137,595,062 5,050,857 1,043,805 5,448,097 8,515,422 724,907 2,336,837 — 73,926 309,125 11,674,917 4,412,164 233,550 0 5,228,716 (0) 301,276 633,682 122,050 0 35,259,965 (7,653,134) 4,761,355 2,663,149 22,159,086 40,574,842 13,792,470 2,918,760 3,168,485 7,811,339 13,625,899 18,345,257 6,920,710 25,563,978 11,913,344 8,255,753 64,818,562 564,711 215,617 6,828,973 6,602,477 7,607,360 246,929 292,310 (0) 264,121 — 835,389 3,527,840 — 477,340 90,133,148 BUILDING & IMPROVEMENT TOTAL ACCUMULATED DEPRECIATION TOTAL COST, NET OF ACCUMULATED DEPRECIATION 41,366,240 24,536,884 (559,641) 564,396 17,205,878 13,365,222 152,287,070 5,050,857 17,454,437 9,574,606 29,785,366 10,526,953 3,405,683 94,572 20,056,483 23,785,316 37,538,070 57,785,617 3,288,677 13,289,348 51,763,635 30,534,524 25,079,666 8,103,818 1,884,557 7,864,878 29,534,893 5,326,066 2,878,766 28,988,059 47,177,319 20,006,602 3,165,689 3,460,796 7,811,339 13,890,020 18,345,257 7,756,098 29,091,818 11,913,344 8,733,093 44,673,019 43,488,647 8,287,830 7,350,837 25,252,554 16,280,222 152,595,062 35,094,502 21,555,454 11,590,332 35,109,866 12,977,294 14,445,154 4,233,332 25,052,122 29,659,711 43,998,813 71,146,582 4,649,134 18,889,348 71,649,734 40,510,334 34,807,112 9,873,817 2,669,409 11,137,090 36,423,572 7,446,312 4,064,675 30,088,059 60,077,319 27,254,415 4,465,422 4,871,732 10,832,222 17,293,744 22,937,622 10,722,117 44,391,818 16,591,359 10,873,093 5,627,912 3,674,053 5,855,766 5,425,106 2,257,051 5,760,088 3,172,523 5,482,501 6,446,605 8,104,311 14,974,009 1,730,651 2,136,057 11,237,235 2,585,270 2,012,643 3,781,250 996,870 932,652 7,782,085 2,099,823 1,508,177 4,494,613 8,089,497 2,953,077 1,658,672 1,799,995 1,297,168 3,267,801 4,999,633 1,411,657 6,038,347 1,499,852 4,383,343 44,673,019 43,488,647 8,287,830 7,350,837 19,624,642 12,606,169 152,595,062 29,238,736 16,130,348 9,333,281 29,349,778 9,804,770 14,445,154 4,233,332 19,569,621 23,213,106 35,894,502 56,172,574 2,918,483 16,753,290 60,412,499 37,925,064 32,794,470 6,092,567 1,672,538 10,204,438 28,641,487 5,346,490 2,556,499 25,593,446 51,987,822 24,301,338 2,806,750 3,071,737 9,535,054 14,025,943 17,937,989 9,310,459 38,353,471 15,091,506 6,489,750 154,951,710 171,126,017 12,601,174 158,524,843 LAND 3,306,779 18,951,763 8,847,471 6,786,441 8,046,676 2,915,000 307,992 30,043,645 4,101,017 2,015,726 5,324,501 2,450,341 11,039,472 4,138,760 4,995,639 5,874,396 6,460,743 13,360,965 1,360,457 5,600,000 19,886,099 9,975,810 9,727,446 1,770,000 784,851 3,272,212 6,888,680 2,120,247 1,185,909 1,100,000 12,900,000 7,247,814 1,299,733 1,410,936 3,020,883 3,403,724 4,592,364 2,966,018 15,300,000 4,678,015 2,140,000 16,174,307 ENCUMBRANCES 34,810,586 24,626,211 10,612,252 2,080,189 8,999,015 36,485,292 25,372,802 2,193,614 1,498,914 7,144,447 28,478,446 6,877,365 17,159,907 3,996,316 DATE OF CONSTRUCTION(C) ACQUISITION(A) 2006(C) 2007(C) 2004(C) 2008(C) 2007(A) 1998(A) 2005(C) 2006(C) 1998(A) 1998(A) 1998(A) 1997(A) 2004(C) 2008(C) 1998(A) 1998(A) 1998(A) 1998(A) 2006(A) 2008(A) 2006(A) 2008(A) 2007(A) 2006(A) 2006(A) 2008(A) 1998(A) 2006(A) 2006(A) 2006(A) 2005(A) 2005(A) 2006(A) 2006(A) 2008(A) 1999(A) 1998(A) 2005(A) 2005(A) 2007(A) 2006(A) 2002(A) INITIAL COST LAND BUILDING & IMPROVEMENT SUBSEQUENT TO ACQUISITION LAND BUILDING & IMPROVEMENT TOTAL ACCUMULATED DEPRECIATION TOTAL COST, NET OF ACCUMULATED DEPRECIATION ENCUMBRANCES DATE OF CONSTRUCTION(C) ACQUISITION(A) 1 3 1 VILLAGE ON THE PARK AURORA QUINCY AURORA EAST BANK SPRING CREEK COLORADO DENVER WEST 38TH STREET ENGLEWOOD PHAR MOR FORT COLLINS HERITAGE WEST WEST FARM SHOPPING CENTER FARMINGTON PLAZA N.HAVEN, HOME DEPOT SOUTHINGTON PLAZA WATERBURY DOVER ELSMERE ALTAMONTE SPRINGS BOCA RATON BAYSHORE GARDENS, BRADENTON FL BRADENTON PLAZA CORAL SPRINGS CORAL SPRINGS CURLEW CROSSING S.C. CLEARWATER FL EAST ORLANDO FERN PARK REGENCY PLAZA SHOPPES AT AMELIA CONCOURSE AVENUES WALKS KISSIMMEE LAUDERDALE LAKES MERCHANTS WALK LARGO LEESBURG LARGO EAST BAY LAUDERHILL THE GROVES MELBOURNE GROVE GATE NORTH MIAMI MILLER ROAD MARGATE MT. DORA PLANTATION CROSSING MILTON, FL FLAGLER PARK ORLANDO SODO S.C. RENAISSANCE CENTER SAND LAKE ORLANDO OCALA POMPANO BEACH 2,194,463 1,148,317 1,500,568 1,423,260 161,167 805,837 1,253,497 1,526,576 5,805,969 433,713 7,704,968 376,256 2,253,078 122,741 — 770,893 573,875 2,901,000 527,026 710,000 1,649,000 5,315,955 3,627,946 491,676 225,000 2,410,000 7,600,000 26,984,546 1,328,536 342,420 2,580,816 293,686 — 2,832,296 1,002,733 1,676,082 — 365,893 732,914 1,138,082 2,948,530 1,011,000 7,524,800 1,275,593 26,162,980 923,956 — 9,104,379 3,092,706 560,800 1,980,000 97,169 8,885,987 4,608,249 6,180,103 5,718,813 646,983 3,232,650 7,625,278 6,124,074 23,348,024 1,211,800 30,797,640 1,055,168 9,017,012 66,738 3,185,642 3,083,574 2,295,501 11,738,955 765,252 2,842,907 6,626,301 12,529,467 918,466 1,440,000 902,000 9,671,160 — — 5,296,652 2,416,645 10,366,090 792,119 171,636 11,329,185 2,602,415 6,533,681 1,754,000 1,049,172 4,080,460 4,552,327 11,754,120 4,062,890 — — 80,737,041 3,646,904 68,139,271 36,540,873 12,370,824 2,268,112 7,927,484 874,442 5,394,916 323,297 480,170 1,257,438 (0) 208,712 1,599,608 155,612 661,091 1,635,657 676,173 292,292 690,607 4,902,532 (0) 167,155 1,730,262 711,732 115,619 3,340,370 425,304 1,241,120 (347,682) 2,978,953 4,759,179 458,044 8,922,803 46,061,771 (1,814,426) 3,244,181 995,118 1,581,445 193,651 1,788,569 12,234,118 944,919 3,099,675 1,207,100 10,846,346 1,877,964 3,874,810 163,571 10,673,728 — 78,957 1,990,167 — 4,989,546 1,881,304 3,173,597 8,229,712 1,837,248 2,194,463 1,148,317 1,500,568 1,423,260 161,167 805,837 1,253,497 1,526,576 5,805,969 433,713 7,704,968 376,256 2,253,078 3,024,375 — 770,893 733,875 2,901,000 527,026 710,000 1,649,000 5,315,955 3,527,149 1,007,882 225,000 2,410,000 1,138,216 33,535,828 1,328,536 342,420 2,580,816 293,686 — 2,832,296 1,774,442 2,606,246 — 365,893 732,914 1,138,082 2,948,530 1,011,000 7,153,784 1,275,593 26,162,980 1,172,119 — 9,122,758 3,092,706 580,030 1,980,000 97,169 14,280,903 16,475,366 4,931,546 6,660,273 6,976,251 646,983 3,441,362 9,224,886 6,279,686 24,009,115 2,847,457 31,473,813 1,347,460 9,707,619 2,067,636 3,185,642 3,250,729 3,865,763 12,450,687 880,872 6,183,277 7,051,605 13,770,588 671,580 3,902,747 5,661,179 10,129,204 15,384,587 39,510,489 3,482,226 5,660,825 11,361,208 2,373,564 365,287 13,117,754 14,064,823 6,548,436 4,853,675 2,256,272 14,926,806 6,430,291 15,628,930 4,226,461 11,044,744 80,815,998 5,388,907 68,139,271 41,512,040 14,252,128 5,422,478 16,157,196 2,711,690 6,079,863 8,160,841 8,399,511 808,150 4,247,199 10,478,382 7,806,262 29,815,084 3,281,170 39,178,781 1,723,716 11,960,697 5,092,011 3,185,642 4,021,622 4,599,638 15,351,687 1,407,897 6,893,277 8,700,605 19,086,542 4,198,729 4,910,629 5,886,179 12,539,204 16,522,803 73,046,317 4,810,762 6,003,246 13,942,025 2,667,250 365,287 15,950,050 15,839,266 9,154,682 4,853,675 2,622,165 15,659,720 7,568,373 18,577,460 5,237,461 18,198,528 1,275,593 106,978,978 6,561,027 68,139,271 50,634,798 17,344,834 6,002,509 18,137,196 2,808,859 2,822,589 1,334,834 1,832,984 1,624,242 181,079 932,196 1,765,876 1,743,610 6,368,346 227,973 8,411,628 66,964 3,590,934 1,900 3,185,642 1,051,715 1,596,223 3,393,909 46,536 1,958,945 1,937,624 1,671,820 22,980 2,424,735 2,238,658 2,390,172 2,361,276 3,871,968 2,195,539 1,775,672 291,132 6,188,680 7,642,737 900,365 2,553,579 1,779,725 6,709,490 5,157,804 5,572,625 1,216,034 5,435,890 1,894,536 1,804,038 12,670,384 5,142,735 1,513,149 3,384,609 1,612,608 13,652,777 4,745,029 6,327,857 6,775,269 627,071 3,315,003 8,712,506 6,062,652 23,446,738 3,053,197 30,767,153 1,656,752 8,369,763 5,090,111 0 2,969,908 3,003,415 11,957,777 1,361,361 4,934,332 6,762,981 17,414,722 4,175,749 2,485,894 3,647,521 10,149,032 16,522,803 73,046,317 2,449,486 2,131,278 11,746,485 891,577 74,155 9,761,370 8,196,529 8,254,317 2,300,096 842,441 8,950,230 2,410,568 13,004,835 4,021,427 18,198,528 1,275,593 101,543,089 4,666,491 66,335,233 37,964,413 12,202,099 4,489,360 14,752,587 1,196,251 2,499,018 865,214 1998(A) 1998(A) 1998(A) 1998(A) 1998(A) 1998(A) 2000(A) 1998(A) 1998(A) 2005(A) 1998(A) 2005(A) 1993(A) 2003(A) 1979(C) 1995(A) 1992(A) 1998(A) 2005(A) 1994(A) 1997(A) 2005(A) 2007(A) 1971(C) 1968(C) 1999(A) 2003(C) 2005(C) 1996(A) 1968(C) 2001(A) 1968(C) 1969(C) 1992(A) 1974(C) 2006(A) 1968(C) 1968(C) 1985(A) 1986(A) 1993(A) 1997(A) 2005(C) 2007(A) 2007(A) 1995(A) 2008(A) 1998(A) 1994(A) 1996(A) 1997(A) 1968(C) INITIAL COST LAND BUILDING & IMPROVEMENT SUBSEQUENT TO ACQUISITION LAND BUILDING & IMPROVEMENT TOTAL ACCUMULATED DEPRECIATION TOTAL COST, NET OF ACCUMULATED DEPRECIATION ENCUMBRANCES DATE OF CONSTRUCTION(C) ACQUISITION(A) GONZALEZ ST. PETERSBURG TUTTLE BEE SARASOTA SOUTH EAST SARASOTA SANFORD STUART SOUTH MIAMI TAMPA VILLAGE COMMONS S.C. MISSION BELL SHOPPING CENTER WEST PALM BEACH THE SHOPS AT WEST MELBOURNE AUGUSTA MARKET AT HAYNES BRIDGE EMBRY VILLAGE SAVANNAH SAVANNAH CHATHAM PLAZA KIHEI CENTER CLIVE KDI-METRO CROSSING SOUTHDALE SHOPPING CENTER 1 3 2 DES MOINES DUBUQUE WATERLOO NAMPA (HORSHAM) FUTURE DEV. AURORA, N. LAKE BLOOMINGTON BELLEVILLE, WESTFIELD PLAZA BRADLEY CALUMET CITY COUNTRYSIDE CHICAGO CHAMPAIGN, NEIL ST. ELSTON S. CICERO CRYSTAL LAKE, NW HWY 108 WEST GERMANIA PLACE 168 NORTH MICHIGAN AVENUE BUTTERFIELD SQUARE DOWNERS PARK PLAZA DOWNER GROVE ELGIN FOREST PARK FAIRVIEW HTS, BELLVILLE RD. GENEVA LAKE ZURICH PLAZA MATTERSON MT. PROSPECT MUNDELEIN, S. LAKE NORRIDGE NAPERVILLE 1,617,564 — 254,961 1,283,400 1,832,732 2,109,677 1,280,440 5,220,445 2,192,331 5,056,426 550,896 2,200,000 1,482,564 4,880,659 18,147,054 2,052,270 652,255 13,390,238 3,406,707 500,525 3,013,647 1,720,330 500,525 — 500,525 6,501,240 2,059,908 805,521 — 500,422 1,479,217 — — 230,519 1,010,375 — 179,964 2,393,894 3,373,318 1,601,960 2,510,455 811,778 842,555 — — 500,422 233,698 950,515 1,017,345 1,127,720 — 669,483 — 917,360 828,465 5,133,544 9,523,261 8,415,323 5,133,825 16,884,228 8,774,158 11,843,119 2,298,964 8,829,541 5,928,122 21,549,424 33,009,514 8,232,978 2,616,522 35,115,882 7,663,360 2,002,101 — 6,916,294 2,559,019 2,152,476 2,002,101 — 9,531,721 2,222,353 5,372,253 2,001,687 8,815,760 4,770,671 2,687,046 1,285,460 5,692,211 1,541,560 1,025,811 7,366,681 10,119,953 6,637,926 10,164,494 4,322,956 2,108,674 2,335,884 11,866,880 12,917,712 1,265,023 6,292,319 6,572,176 5,826,129 2,918,315 4,464,998 2,639 1,266,811 1,747,305 3,454,440 6,099,490 867,525 2,852,969 2,013,247 733,099 8,572,868 1,404,607 4,631,249 2,176,418 (0) 0 1,415,414 4,907,280 0 598,386 (0) 23,890,355 3,037,170 37,079 10,848 2,869,100 11,919,815 308,208 5,325,672 65,163 424,877 13,397,758 1,137,295 684,690 725,493 0 149,202 120,440 375,162 625,963 (3,480,427) 630,953 1,740,669 1,528,114 (0) 1,906,567 85,521 4,168,145 10,527,541 3,555,566 77,350 (0) 80,672 1,620,203 — 254,961 1,399,525 1,832,732 2,109,677 1,280,440 5,220,445 2,192,331 5,067,033 550,896 2,200,000 1,482,564 4,880,659 18,147,054 2,052,270 652,256 13,390,238 3,406,707 500,525 2,294,414 1,720,330 500,525 — 500,525 10,874,179 2,059,908 805,521 — 500,422 1,479,216 1,101,670 — 230,519 1,010,375 — 180,269 2,393,894 3,373,318 1,182,677 2,510,455 811,778 527,168 — — 500,422 233,698 950,514 1,017,345 1,129,634 — 669,483 2,184,171 2,575,770 8,471,859 15,622,750 9,282,848 7,986,794 18,897,475 9,507,257 20,405,380 3,703,571 13,460,790 8,104,540 21,549,424 33,009,514 9,648,392 7,523,801 35,115,882 8,261,745 2,002,101 24,609,588 9,953,464 2,596,098 2,163,324 4,871,201 7,546,876 9,839,929 7,548,025 5,437,416 2,426,564 22,213,519 4,806,296 3,371,736 2,010,953 5,692,211 1,690,762 1,145,946 7,741,844 10,745,915 3,576,782 10,795,448 6,063,624 3,952,174 2,335,884 13,773,447 13,003,233 5,433,168 16,819,861 10,127,741 5,901,565 2,918,315 4,545,670 1,620,203 2,184,171 2,830,731 9,871,384 17,455,483 11,392,525 9,267,234 24,117,920 11,699,588 25,472,413 4,254,467 15,660,790 9,587,104 26,430,082 51,156,569 11,700,662 8,176,057 48,506,121 11,668,453 2,502,626 26,904,002 11,673,794 3,096,623 2,163,324 5,371,726 18,421,055 11,899,837 8,353,546 5,437,416 2,926,986 23,692,735 5,907,966 3,371,736 2,241,472 6,702,586 1,690,762 1,326,215 10,135,737 14,119,233 4,759,459 13,305,903 6,875,403 4,479,343 2,335,884 13,773,447 13,503,655 5,666,866 17,770,375 11,145,087 7,031,199 2,918,315 5,215,153 871,764 1,901,640 3,876,721 7,537,306 3,307,348 2,509,321 4,668,738 2,407,020 3,362,371 1,011,859 3,379,173 2,401,480 2,048,989 2,403,704 3,765,654 1,042,365 2,889,084 4,354,641 663,090 2,047,026 838,040 617,610 5,520 1,649,342 2,562,752 4,547,862 1,435,123 775,980 3,576,521 1,341,823 914,007 382,149 1,508,051 486,232 297,828 1,043,546 2,843,030 1,630,658 2,658,847 674,191 3,468,512 3,583,761 3,783,376 2,743,788 1,571,136 836,663 1,253,873 1,620,203 1,312,407 929,091 5,994,664 9,918,177 8,085,178 6,757,913 19,449,182 9,292,568 22,110,042 3,242,608 12,281,617 7,185,624 24,381,093 48,752,865 7,935,007 7,133,692 45,617,036 7,313,811 1,839,536 26,904,002 9,626,768 2,258,583 1,545,714 5,366,206 16,771,713 9,337,085 3,805,684 4,002,293 2,151,006 20,116,214 4,566,143 2,457,729 1,859,323 5,194,535 1,204,530 1,028,387 10,135,737 14,119,233 3,715,912 10,462,873 5,244,744 1,820,496 1,661,692 10,304,935 9,919,894 5,666,866 13,986,998 8,401,298 5,460,064 2,081,652 3,961,280 2007(A) 1968(C) 2008(A) 1989(A) 1989(A) 1994(A) 1995(A) 1997(A) 1998(A) 2004(A) 1995(A) 1998(A) 1995(A) 2008(A) 2008(A) 1993(A) 1995(A) 2008(A) 2006(A) 1996(A) 2006(C) 1999(A) 1996(A) 1997(A) 1996(A) 2005(C) 1998(A) 1972(C) 1998(A) 1996(A) 1997(A) 1997(A) 1997(A) 1998(A) 1997(A) 1997(A) 1998(A) 2008(A) 2008(A) 1998(A) 1999(A) 1997(A) 1972(C) 1997(A) 1998(A) 1996(A) 2005(A) 1997(A) 1997(A) 1998(A) 1997(A) 1997(A) 15,727,304 31,081,683 29,779,657 19,829,047 2,847,162 12,092,632 8,568,108 2,483,687 INITIAL COST LAND BUILDING & IMPROVEMENT SUBSEQUENT TO ACQUISITION LAND BUILDING & IMPROVEMENT TOTAL ACCUMULATED DEPRECIATION TOTAL COST, NET OF ACCUMULATED DEPRECIATION ENCUMBRANCES DATE OF CONSTRUCTION(C) ACQUISITION(A) 1 3 3 OTTAWA ORLAND PARK, S. HARLEM OAK LAWN OAKBROOK TERRACE PEORIA FREESTATE BOWL ROCKFORD CROSSING ROUND LAKE BEACH PLAZA SKOKIE KRC STREAMWOOD WOODGROVE FESTIVAL WAUKEGAN PLAZA PLAZA EAST GREENWOOD GRIFFITH LAFAYETTE LAFAYETTE KRC MISHAWAKA 895 MERRILLVILLE PLAZA SOUTH BEND, S. HIGH ST. OVERLAND PARK BELLEVUE LEXINGTON PADUCAH MALL, KY HAMMOND AIR PLAZA KIMCO HOUMA 274, LLC CENTRE AT WESTBANK LAFAYETTE 111-115 NEWBURY 493-495 COMMONWEALTH AVENUE 127-129 NEWBURY LLC 497 COMMONWEALTH AVE. GREAT BARRINGTON SHREWSBURY SHOPPING CENTER WILDE LAKE LYNX LANE CLINTON BANK BUILDING CLINTON BOWL VILLAGES AT URBANA GAITHERSBURG HAGERSTOWN SHAWAN PLAZA LAUREL LAUREL LANDOVER CENTER SOUTHWEST MIXED USE PROPERTY NORTH EAST STATION OWINGS MILLS PLAZA PERRY HALL TIMONIUM SHOPPING CENTER WALDORF BOWL WALDORF FIRESTONE 137,775 476,972 1,530,111 1,527,188 — 252,723 4,575,990 790,129 — 181,962 5,049,149 349,409 1,236,149 423,371 — 230,402 812,810 378,088 197,415 183,463 1,183,911 405,217 1,675,031 — 3,813,873 1,980,000 9,554,230 2,115,000 3,551,989 1,151,947 2,947,063 405,007 642,170 1,284,168 1,468,038 1,019,035 82,967 39,779 3,190,074 244,890 541,389 4,466,000 349,562 274,580 — 403,034 869,385 303,911 3,339,309 6,000,000 225,099 57,127 784,269 2,764,775 8,776,631 8,679,108 5,081,290 998,099 11,654,021 1,634,148 2,276,360 1,057,740 20,822,993 883,975 4,944,597 1,883,421 2,495,820 1,305,943 3,252,269 1,999,079 765,630 1,070,401 6,335,308 1,743,573 6,848,209 924,085 15,260,609 7,945,784 24,401,082 8,508,218 10,819,763 5,798,705 8,841,188 1,196,594 2,547,830 5,284,853 5,869,862 4,091,894 362,371 130,716 6,067 6,787,534 2,165,555 20,222,367 1,398,250 1,100,968 — 1,325,126 — 1,370,221 12,377,339 24,282,998 739,362 221,621 700,540 1,138,940 428,262 2,984,607 2,403,560 (0) 0 534,312 9,488,382 216,585 2,540,473 2,202,841 3,197,217 1,980,964 981,912 169,272 4,039,886 3,956,694 276,701 196,857 142,374 218,844 5,413,088 0 1,913,436 313,024 0 9,501,396 380,408 (1,935,940) 369,792 628,194 7,255,207 4,574,613 101,365 76,423 (0) 4,247 10,538,379 230,545 3,380,081 5,925 1,023,918 283,421 57,007 306,510 — (160,247) 942,171 14,531,906 84,327 (0) 137,775 476,972 1,530,111 1,527,188 — 252,723 4,575,990 790,129 2,628,440 181,962 5,049,149 349,409 1,140,849 584,445 1,001,100 230,402 2,379,198 378,730 197,415 183,463 1,185,906 405,217 1,551,079 — 3,813,873 1,980,000 9,554,230 3,678,274 3,551,989 746,940 2,947,063 405,007 751,124 1,284,168 1,468,038 1,019,035 82,967 38,779 4,828,774 244,890 541,389 4,466,000 349,562 274,580 57,007 361,035 869,385 303,911 3,339,309 7,331,195 235,099 57,127 1,484,809 3,903,714 9,204,894 11,663,715 7,484,850 998,099 11,654,021 2,168,460 9,136,303 1,274,324 23,363,466 3,086,816 8,237,114 3,703,311 2,476,632 1,475,215 5,725,767 5,955,130 1,042,331 1,267,258 6,475,686 1,962,416 12,385,249 924,085 17,174,046 8,258,808 24,401,082 16,446,339 11,200,171 4,267,773 9,210,979 1,824,788 9,694,083 9,859,466 5,971,227 4,168,317 362,371 135,963 8,905,747 7,018,079 5,545,637 20,228,292 2,422,168 1,384,389 1,673,635 1,209,973 13,319,510 37,483,709 813,688 221,621 1,622,584 4,380,687 10,735,004 13,190,903 7,484,850 1,250,822 16,230,011 2,958,589 11,764,742 1,456,287 28,412,615 3,436,225 9,377,963 4,287,756 3,477,732 1,705,617 8,104,965 6,333,861 1,239,746 1,450,721 7,661,593 2,367,634 13,936,328 924,085 20,987,918 10,238,808 33,955,313 20,124,614 14,752,160 5,014,713 12,158,042 2,229,795 10,445,207 11,143,633 7,439,265 5,187,352 445,338 174,742 13,734,520 7,262,969 6,087,025 24,694,292 2,771,730 1,658,969 57,007 2,034,670 869,385 1,513,885 16,658,819 44,814,904 1,048,787 278,749 993,427 943,314 2,531,517 2,851,915 1,880,344 428,159 789,108 98,220 1,812,867 311,339 6,105,973 2,357,230 2,728,376 721,179 1,361,425 1,464,701 533,100 13,444 314,999 1,690,186 1,798,696 4,636,456 336,087 4,981,220 1,912,389 1,458,569 4,285,830 2,819,762 1,942,200 1,056,316 756,981 221,551 65,937 75,483 1,630,825 2,689,533 4,695,867 1,030,524 1,336,795 711,713 641 3,072,999 10,869,947 245,458 68,848 629,157 3,437,372 8,203,487 10,338,988 5,604,506 822,663 15,440,903 2,860,368 9,951,876 1,144,947 22,306,642 3,436,225 7,020,732 1,559,380 2,756,552 344,192 6,640,264 5,800,761 1,226,302 1,135,722 5,971,407 568,938 9,299,872 587,999 16,006,698 8,326,419 32,496,743 20,124,614 10,466,329 5,014,713 12,158,042 2,229,795 7,625,445 9,201,434 6,382,949 4,430,372 223,787 108,806 13,659,038 5,632,144 3,397,492 19,998,425 1,741,206 322,174 57,007 1,322,957 869,385 1,513,244 13,585,820 33,944,957 803,330 209,901 13,750,014 11,286,777 7,013,609 21,134,221 11,535,735 7,910,308 2008(A) 1998(A) 1997(A) 1997(A) 1997(A) 2003(A) 2008(A) 2005(A) 1997(A) 1998(A) 1998(A) 2005(A) 1995(A) 1970(C) 1997(A) 1971(C) 1997(A) 1998(A) 2005(A) 1998(A) 1998(A) 1976(A) 1993(A) 1998(A) 1997(A) 1999(A) 2008(A) 1997(A) 2007(A) 2008(A) 2007(A) 2008(A) 1994(A) 2000(A) 2002(A) 2002(A) 2003(A) 2003(A) 2003(A) 1999(A) 1973(C) 2008(A) 1995(A) 1972(C) 2003(A) 2003(A) 2008(A) 2005(A) 2003(A) 2003(A) 2003(A) 2003(A) INITIAL COST LAND BUILDING & IMPROVEMENT SUBSEQUENT TO ACQUISITION LAND BUILDING & IMPROVEMENT TOTAL ACCUMULATED DEPRECIATION 1 3 4 BANGOR, ME MALLSIDE PLAZA CLAWSON WHITE LAKE CANTON TWP PLAZA CLINTON TWP PLAZA DEARBORN HEIGHTS PLAZA FARMINGTON LIVONIA MUSKEGON OKEMOS PLAZA TAYLOR WALKER EDEN PRAIRIE PLAZA FOUNTAINS AT ARBOR LAKES ROSEVILLE PLAZA ST. PAUL PLAZA BRIDGETON 403,833 6,930,996 1,624,771 2,300,050 163,740 175,515 162,319 1,098,426 178,785 391,500 166,706 1,451,397 3,682,478 882,596 28,585,296 132,842 699,916 — CREVE COEUR, WOODCREST/OLIVE 1,044,598 CRYSTAL CITY, MI INDEPENDENCE, NOLAND DR. NORTH POINT SHOPPING CENTER KIRKWOOD KANSAS CITY LEMAY GRAVOIS ST. CHARLES-UNDERDEVELOPED LAND, MO SPRINGFIELD KMART PARCEL KRC ST. CHARLES ST. LOUIS, CHRISTY BLVD. OVERLAND ST. LOUIS ST. LOUIS ST. PETERS SPRINGFIELD, GLENSTONE AVE. KDI-TURTLE CREEK CHARLOTTE CHARLOTTE TYVOLA RD. CROSSROADS PLAZA KIMCO CARY 696, INC. LONG CREEK S.C. DURHAM HILLSBOROUGH CROSSING SHOPPES AT MIDWAY PLANTATION PARK PLACE MOORESVILLE CROSSING RALEIGH WAKEFIELD COMMONS II — 1,728,367 1,935,380 — 574,777 125,879 1,032,416 431,960 2,745,595 905,674 — 809,087 — — — 1,182,194 — 11,535,281 919,251 1,783,400 — 767,864 2,180,000 4,475,000 1,882,800 519,395 6,681,212 5,461,479 12,013,727 5,208,885 6,506,450 1,622,331 18,148,727 6,578,142 9,249,607 926,150 714,279 497,791 4,525,723 925,818 958,500 591,193 5,806,263 14,730,060 911,373 66,699,024 957,340 623,966 2,196,834 5,475,623 234,378 8,951,101 7,800,746 9,704,005 2,971,191 503,510 4,455,514 — 10,985,778 3,666,386 550,204 4,430,514 4,928,677 5,756,736 2,766,644 7,423,459 608,793 — 3,570,981 7,139,131 4,736,345 3,098,881 8,756,865 7,551,576 — — 16,163,494 30,604,173 20,885,792 — 93,752 0 8,567,622 2,078,887 5,249,730 1,195,597 (189,266) 3,172,458 1,160,112 825,035 1,122,060 275,289 2,073,718 559,411 8,157,765 4,676,301 170,050 (0) 615,905 0 23,846 333,350 11,311,158 274,976 3,767,981 10,964,528 758,854 5,973,003 4,933,942 — 2,041,041 723,008 849,684 143,298 7,008,779 1,815,983 32,252,199 1,074,184 989,689 5,917,962 34,566 441,126 2,263,532 1,602,386 (0) 18,973,916 (0) (882,021) 11,816,275 (2,708,102) 403,833 6,930,996 1,624,771 2,300,050 163,740 175,515 135,889 1,098,426 178,785 391,500 166,706 1,451,397 3,682,478 882,596 1,716,083 18,148,727 15,145,765 11,328,494 6,175,879 1,909,875 334,955 7,698,181 2,085,930 1,783,535 1,713,252 6,081,552 16,803,778 1,470,784 2,119,916 25,079,723 16,770,535 13,628,544 6,339,620 2,085,390 470,844 8,796,607 2,264,715 2,175,035 1,879,959 7,532,949 20,486,256 2,353,380 307,241 2,112,229 3,449,417 3,523,980 130,290 195,475 2,606,021 910,708 1,539,336 25,920 2,334,095 6,176,914 47,818 TOTAL COST, NET OF ACCUMULATED DEPRECIATION 1,812,675 22,967,494 13,321,118 10,104,564 6,209,330 1,889,915 470,844 6,190,586 1,354,007 635,700 1,854,038 5,198,855 14,309,342 2,305,561 ENCUMBRANCES 15,223,681 715,801 28,585,296 74,856,788 103,442,084 4,543,434 98,898,650 132,842 699,916 — 960,814 — 1,731,300 1,935,380 — 574,777 451,155 1,032,412 431,960 2,904,022 905,674 — 809,087 — — — 5,633,641 794,016 2,196,834 6,175,312 234,378 8,972,014 8,134,096 21,015,163 3,246,167 3,946,215 15,420,046 758,855 16,800,354 8,600,328 550,204 6,471,555 5,651,686 6,606,420 2,909,942 5,766,483 1,493,932 2,196,834 7,136,126 234,378 10,703,314 10,069,476 21,015,163 3,820,944 4,397,370 16,452,458 1,190,814 19,704,376 9,506,001 550,204 7,280,642 5,651,686 6,606,420 2,909,942 1,053,694 14,560,738 15,614,432 — 10,150,881 919,251 1,783,400 — 767,864 2,256,799 4,475,000 1,882,800 519,395 5,403,673 5,461,479 11,625,801 5,208,885 2,357,636 2,424,776 33,636,599 4,645,165 8,128,820 10,654,307 3,133,447 9,121,193 2,263,532 9,153,962 20,251,455 16,163,494 30,110,078 32,702,067 1,440,712 2,424,776 43,787,480 5,564,416 9,912,220 10,654,307 3,901,310 11,377,991 6,738,532 11,036,762 519,395 25,655,128 21,624,973 41,735,879 37,910,952 3,798,348 98,931 24,719 633,732 1,637,344 61,258 2,420,491 2,065,687 6,742,371 911,957 755,329 6,630,360 151,732 5,147,113 1,374,421 141,078 1,468,068 1,586,878 1,846,992 823,442 6,559,826 511,336 367,819 1,567,945 3,065,410 6,351,252 695,270 2,480,181 2,864,050 271,338 884,995 1,435,097 9,635,948 19,506 5,667,552 1,469,213 1,563,101 5,498,782 173,120 8,282,824 8,003,789 14,272,791 2,908,986 3,642,041 9,822,098 1,039,083 14,557,263 8,131,580 409,126 5,812,575 4,064,808 4,759,428 2,086,500 9,054,605 1,913,440 43,419,660 3,996,471 6,846,810 4,303,055 3,206,040 8,897,810 6,738,532 8,172,711 519,395 25,383,790 20,739,978 40,300,783 28,275,004 3,778,842 2,348,156 30,140,815 4,299,848 23,274,374 13,821,500 DATE OF CONSTRUCTION(C) ACQUISITION(A) 2001(A) 2008(A) 1993(A) 1996(A) 2005(A) 2005(A) 2005(A) 1993(A) 1968(C) 1985(A) 2005(A) 1993(A) 1993(A) 2005(A) 2006(A) 2005(A) 2005(A) 1997(A) 1998(A) 1997(A) 1998(A) 1998(A) 1998(A) 1997(A) 1974(C) 2008(A) 1998(A) 1994(A) 2002(A) 1998(A) 1998(A) 1997(A) 1997(A) 1997(A) 1997(A) 1998(A) 2004(C) 2008(A) 1993(A) 1986(A) 2000(A) 1998(A) 2008(A) 1996(A) 2003(A) 2005(C) 2008(A) 2007(A) 1993(A) 2001(C) INITIAL COST LAND BUILDING & IMPROVEMENT SUBSEQUENT TO ACQUISITION LAND BUILDING & IMPROVEMENT TOTAL ACCUMULATED DEPRECIATION TOTAL COST, NET OF ACCUMULATED DEPRECIATION ENCUMBRANCES DATE OF CONSTRUCTION(C) ACQUISITION(A) 1 3 5 WAKEFIELD CROSSINGS EDGEWATER PLACE WINSTON-SALEM SORENSON PARK PLAZA LORDEN PLAZA NEW LONDON CENTER ROCKINGHAM BRIDGEWATER NJ BAYONNE BROADWAY BRICKTOWN PLAZA BRIDGEWATER PLAZA CHERRY HILL MARLTON PIKE CINNAMINSON EASTWINDOR VILLAGE HILLSBOROUGH HOLMDEL TOWNE CENTER HOLMDEL COMMONS HOWELL PLAZA KENVILLE PLAZA STRAUSS DISCOUNT AUTO NORTH BRUNSWICK PISCATAWAY TOWN CENTER RIDGEWOOD SEA GIRT PLAZA UNION CRESCENT WESTMONT WEST LONG BRANCH PLAZA SYCAMORE PLAZA PLAZA PASEO DEL-NORTE JUAN TABO, ALBUQUERQUE COMP USA CENTER DEL MONTE PLAZA D’ANDREA MARKETPLACE KEY BANK BUILDING BRIDGEHAMPTON TWO GUYS AUTO GLASS GENOVESE DRUG STORE KINGS HIGHWAY HOMEPORT-RALPH AVENUE BELLMORE STRAUSS CASTLE HILL PLAZA STRAUSS UTICA AVENUE 3,413,932 3,150,000 540,667 5,104,294 8,872,529 4,323,827 2,660,915 1,982,481 1,434,737 344,884 350,705 2,417,583 — 652,123 9,335,011 11,886,809 10,824,624 16,537,556 311,384 385,907 1,225,294 3,204,978 3,851,839 450,000 457,039 7,895,483 601,655 64,976 1,404,443 4,653,197 1,141,200 2,581,908 2,489,429 11,556,067 1,500,000 1,811,752 105,497 564,097 2,743,820 4,414,466 1,272,269 310,864 347,633 MARKET AT BAY SHORE 12,359,621 BARNES AVE & GUN HILL ROAD 231 STREET 5959 BROADWAY KING KULLEN PLAZA KDI-CENTRAL ISLIP TOWN CENTER PATHMARK SC 6,795,371 3,565,239 6,035,726 5,968,082 13,733,950 6,714,664 — — 719,655 (3,020,914) 9,989,496 5,064,519 — 32,512,824 22,548,382 10,088,930 10,643,660 (3,666,959) 3,347,719 1,008,941 1,361,524 6,364,094 4,318,534 2,608,491 23,777,978 0 1,221,595 11,307,148 9,262,382 2,825,469 (307,857) 297,774 1,581,276 41,342 2,456,671 (0) — (6,880,755) 43,301,494 38,759,952 1,143,159 1,209,864 91,203 12,819,912 15,410,851 2,106,566 1,308,010 3,010,640 2,404,604 1,700,782 5,613,270 18,633,584 4,566,817 5,798,092 5,590,415 29,435,364 40,486,755 3,107,232 436,714 2,268,768 6,811,268 11,339,857 3,183,547 725,350 811,144 30,707,802 — — 23,243,404 1,266,050 17,359,161 3,148,676 3,725,471 4,870,779 94 1,552,740 15,816,956 532,195 1,015,675 311,526 22,916,200 9,269,829 183,794 258,750 693,707 337,499 401,504 525,605 — — 23,879,812 — — 1,346,027 3,155,773 381,803 241,828 270,431 590,385 2,730 — 890,683 1,053,452 550,768 426,939 336,236 3,062,768 540,667 4,145,628 8,872,529 4,323,827 3,148,715 1,982,481 1,434,737 344,884 350,705 2,417,583 — 652,123 9,335,011 5,006,054 10,824,624 16,537,556 311,384 385,907 1,228,794 3,204,978 3,851,839 450,000 457,039 8,696,579 601,655 64,976 1,404,443 4,653,197 1,141,200 2,581,908 2,210,000 11,556,067 1,500,000 1,858,188 105,497 564,097 2,743,820 4,414,467 1,272,269 310,864 347,633 12,359,621 6,798,101 3,565,239 6,035,726 5,980,130 5,088,852 6,714,664 56,783 10,076,728 5,784,174 33,471,490 22,548,382 11,310,525 21,463,008 5,595,423 6,173,188 701,084 1,659,298 7,945,370 4,359,876 5,065,162 23,777,978 46,450,170 42,485,423 6,013,938 1,209,958 1,640,443 28,636,868 15,943,046 3,122,241 1,619,536 25,125,744 11,674,433 1,884,576 5,872,020 19,327,291 4,904,316 6,199,596 6,395,449 29,435,364 40,486,755 26,940,607 436,714 2,268,768 8,157,294 14,495,630 3,565,350 967,178 1,081,575 31,298,187 890,683 24,284,808 10,461,916 17,786,100 393,019 13,139,496 6,324,841 37,617,118 31,420,911 15,634,352 24,611,723 7,577,904 7,607,924 1,045,968 2,010,003 10,362,953 4,359,876 5,717,285 33,112,989 5,006,054 57,274,794 59,022,979 6,325,322 1,595,865 2,869,237 31,841,846 19,794,885 3,572,241 2,076,575 33,822,323 12,276,088 1,949,552 7,276,463 23,980,488 6,045,516 8,781,504 8,605,450 40,991,432 41,986,755 28,798,796 542,211 2,832,865 10,901,115 18,910,097 4,837,619 1,278,042 1,429,208 43,657,808 6,798,101 3,565,239 6,926,409 30,264,938 15,550,768 24,500,764 167,536 2,564,550 586,979 1,323,847 6,672,900 2,891,728 735,246 5,111,744 1,367,194 1,901,715 455,966 6,983,919 7,248,515 61,326 72,473 229,118 8,529,050 4,280,309 984,769 42,327 108,983 3,488,781 1,691,739 5,247,984 1,310,594 3,279,385 757,924 1,267,798 4,454,488 12,318,665 64,408 335,047 1,255,837 1,728,967 512,523 105,878 118,401 4,504,766 7,063,980 82,858 1,611,137 393,019 12,971,960 3,760,291 37,617,118 30,833,932 14,310,505 17,938,823 4,686,176 6,872,678 1,045,968 2,010,003 5,251,209 2,992,682 3,815,570 32,657,023 5,006,054 50,290,875 51,774,464 6,263,997 1,523,392 2,640,119 23,312,795 15,514,576 2,587,472 2,034,248 33,713,340 8,787,307 1,949,552 5,584,724 18,732,503 4,734,923 5,502,119 7,847,526 39,723,634 37,532,267 16,480,131 477,802 2,497,818 9,645,277 17,181,130 4,325,095 1,172,164 1,310,808 39,153,042 6,798,101 3,565,239 6,926,409 23,200,958 15,467,911 22,889,627 10,430,000 23,704,437 19,762,615 3,366,462 4,439,386 16,350,652 28,936,115 5,788,539 732,512 4,875,000 9,380,000 7,217,824 2001(C) 2003(C) 1969(C) 2005(C) 2008(A) 2005(A) 2008(A) 1998(C) 2004(A) 2005(A) 2005(A) 1985(C) 1996(A) 1996(A) 2008(A) 2001(C) 2002(A) 2004(A) 2005(A) 2005(A) 2002(A) 1994(A) 1998(A) 1993(A) 2005(A) 2007(A) 1994(A) 2005(A) 1998(A) 1998(A) 1998(A) 2006(A) 2006(A) 2007(A) 2006(A) 1972(C) 2003(A) 2003(A) 2004(A) 2004(A) 2004(A) 2005(A) 2005(A) 2006(A) 2007(A) 2007(A) 2008(A) 1998(A) 2004(C) 2006(A) INITIAL COST 1 3 6 BIRCHWOOD PLAZA COMMACK ELMONT FRANKLIN SQUARE KISSENA BOULEVARD SC HAMPTON BAYS HICKSVILLE 100 WALT WHITMAN ROAD BP AMOCO GAS STATION STRAUSS LIBERTY AVENUE BIRCHWOOD PLAZA (NORTH & SOUTH) 501 NORTH BROADWAY MERRYLANE (P/L) DOUGLASTON SHOPPING CENTER STRAUSS MERRICK BLVD MANHASSET VENTURE LLC MASPETH QUEENS-DUANE READE MASSAPEQUA BIRCHWOOD PARK DRIVE (LAND LOT) 367-369 BLEEKER STREET 92 PERRY STREET 82 CHRISTOPHER STREET 387 BLEEKER STREET 19 GREENWICH STREET PREF. EQUITY 100 VANDAM PREF. EQUITY-30 WEST 21ST STREET MINEOLA SC 4452 BROADWAY AMERICAN MUFFLER SHOP PLAINVIEW POUGHKEEPSIE STRAUSS JAMAICA AVENUE SYOSSET, NY STATEN ISLAND STATEN ISLAND STATEN ISLAND PLAZA HYLAN PLAZA STOP N SHOP STATEN ISLAND WEST GATES WHITE PLAINS YONKERS STRAUSS ROMAINE AVENUE AKRON WATERLOO WEST MARKET ST. BARBERTON BRUNSWICK BEAVERCREEK CANTON CAMBRIDGE MORSE RD. HAMILTON RD. LAND 3,630,000 3,011,658 1,078,541 11,610,000 1,495,105 3,542,739 5,300,000 1,110,593 305,969 12,368,330 — 1,485,531 3,277,254 450,582 4,567,003 1,872,013 1,880,816 3,507,162 1,425,000 2,106,250 972,813 925,000 1,262,500 5,125,000 6,250,000 4,150,000 12,412,724 76,056 263,693 876,548 1,109,714 106,655 2,280,000 2,940,000 5,600,744 28,723,536 4,558,592 1,784,718 1,777,775 871,977 782,459 437,277 560,255 505,590 771,765 635,228 792,985 — 835,386 856,178 BUILDING & IMPROVEMENT SUBSEQUENT TO ACQUISITION LAND BUILDING & IMPROVEMENT TOTAL ACCUMULATED DEPRECIATION 4,774,791 7,606,066 2,516,581 2,933,487 5,979,320 8,266,375 8,167,577 — 713,927 33,071,495 1,175,543 1,749 13,161,218 1,051,359 26,302 2,204,704 2,641,095 1,519 1,464,586 1,142,648 1,968 539 238,695 235,087 607 539 3,127,094 351,513 19,165,808 25,677,593 4,827,940 4,388,549 4,126 4,958,097 6,318,750 2,974,676 3,056,933 3,930,801 16,143,321 21,974,274 7,520,692 — 325,567 584,031 4,695,659 2,589,333 76,197 9,027,951 11,811,964 6,788,460 38,232,267 10,441,408 9,721,970 4,453,894 3,487,909 1,825,737 1,912,222 3,909,430 1,948,135 6,058,560 3,024,722 1,459,031 1,848,195 2,097,600 2,195,520 933,480 964,761 782 (4,604,498) (4,294,055) 293,021 80,812 178,232 629,471 9,017,562 15,872 — — 9,795,918 12,728,791 596,178 1,551,676 5,287,500 1,095,437 (2,507,303) 33,501,521 155,848 323,455 2,010,606 — 610,420 4,131,997 379,484 3,430,702 2,116,611 3,053,468 4,764,073 1,016,068 2,793,362 3,844,830 3,630,000 3,011,658 1,078,541 11,610,000 1,495,105 3,542,739 5,300,000 1,110,593 305,969 12,368,330 — 1,485,531 3,277,254 450,582 4,421,939 1,872,013 1,880,816 3,507,406 368,147 614,302 925,000 925,000 1,262,500 6,419,540 6,250,000 4,150,000 12,412,724 76,056 263,693 876,547 1,109,714 106,655 2,280,000 3,148,424 5,600,744 28,723,536 4,558,592 1,784,718 1,777,775 871,977 782,459 437,277 560,255 505,590 771,765 635,228 792,985 473,060 835,386 856,178 4,801,093 9,810,769 5,157,676 2,935,006 7,443,906 9,409,023 8,169,545 539 952,623 33,306,582 1,176,150 2,288 16,288,312 1,402,872 44,988,465 5,761,419 5,353,310 4,665 1,410,451 3,516,643 3,315,509 3,137,745 4,109,032 8,431,093 12,822,428 6,236,217 14,545,006 8,939,011 12,951,762 13,469,545 1,111,131 1,258,591 45,674,912 1,176,150 1,487,819 19,565,566 1,853,454 49,410,404 7,633,432 7,234,126 3,512,071 1,778,599 4,130,945 4,240,509 4,062,745 5,371,532 15,478,253 21,897,793 30,991,837 7,536,565 325,567 10,379,949 17,424,450 3,185,511 1,627,873 14,315,451 12,698,977 4,281,157 71,733,789 10,597,256 10,045,425 6,464,500 3,487,909 2,436,158 6,044,219 4,288,914 5,378,837 8,175,171 6,078,190 6,223,104 2,391,204 4,890,963 6,040,351 37,241,837 11,686,565 12,412,724 401,624 10,643,642 18,300,998 4,295,225 1,734,528 16,595,451 15,847,401 9,881,901 100,457,325 15,155,848 11,830,143 8,242,274 4,359,886 3,218,616 6,481,496 4,849,169 5,884,427 8,946,936 6,713,418 7,016,089 2,864,263 5,726,348 6,896,528 385,939 1,360,297 605,584 440,214 3,715,894 1,315,825 656,332 103,540 1,839,369 181,471 50 1,953,406 153,574 10,549,444 754,878 824,760 117 99,998 260,740 271,325 228,488 240,520 948,229 691,814 47,948 4,314,265 7,265,984 346,160 829,512 7,508,091 3,551,974 13,721,604 2,237,642 4,435,364 1,061,940 1,402,965 266,688 2,656,944 2,559,248 2,973,677 5,985,101 4,242,297 4,351,082 2,037,448 2,851,707 3,394,934 TOTAL COST, NET OF ACCUMULATED DEPRECIATION 8,045,155 11,462,131 5,630,633 14,104,792 5,223,116 11,635,937 12,813,213 1,111,131 1,155,052 43,835,543 994,679 1,487,769 17,612,160 1,699,881 38,860,960 6,878,555 6,409,365 3,511,954 1,678,601 3,870,205 3,969,184 3,834,257 5,131,012 20,949,563 37,241,837 10,994,751 12,412,724 353,676 6,329,376 11,035,014 3,949,065 905,016 9,087,359 12,295,427 9,881,901 86,735,720 12,918,206 7,394,779 7,180,334 2,956,921 2,951,928 3,824,551 2,289,921 2,910,749 2,961,836 2,471,121 2,665,007 826,816 2,874,642 3,501,595 ENCUMBRANCES 3,313,818 2,632,896 3,007,062 2,933,897 4,038,855 16,400,000 20,713,296 8,700,000 3,364,888 DATE OF CONSTRUCTION(C) ACQUISITION(A) 2007(A) 2004(A) 2004(A) 2007(A) 1989(A) 2004(A) 2007(A) 2007(A) 2005(A) 2007(A) 2007(A) 2007(A) 2003(A) 2005(A) 1999(A) 2004(A) 2004(A) 2007(A) 2008(A) 2008(A) 2005(A) 2008(A) 2006(A) 2006(A) 2007(A) 2007(A) 2007(A) 2003(A) 1969(C) 1972(C) 2005(A) 1990(C) 1989(A) 1997(A) 2005(A) 2006(A) 2005(A) 1993(A) 2004(A) 1998(A) 2005(A) 1975(C) 1999(A) 1972(C) 1975(C) 1986(A) 1972(C) 1973(C) 1988(A) 1988(A) INITIAL COST LAND BUILDING & IMPROVEMENT SUBSEQUENT TO ACQUISITION LAND BUILDING & IMPROVEMENT TOTAL ACCUMULATED DEPRECIATION TOTAL COST, NET OF ACCUMULATED DEPRECIATION ENCUMBRANCES DATE OF CONSTRUCTION(C) ACQUISITION(A) 1 3 7 OLENTANGY RIVER RD. W. BROAD ST. RIDGE ROAD GLENWAY AVE SPRINGDALE GLENWAY CROSSING HIGHLAND RIDGE PLAZA HIGHLAND PLAZA MONTGOMERY PLAZA SHILOH SPRING RD. OAKCREEK SALEM AVE. KETTERING KENT, OH KENT MENTOR MIDDLEBURG HEIGHTS MENTOR ERIE COMMONS. MALLWOODS CENTER NORTH OLMSTED ORANGE OHIO UPPER ARLINGTON WICKLIFFE CHARDON ROAD WESTERVILLE EDMOND CENTENNIAL PLAZA KDI-MCMINNVILLE ALLEGHENY SUBURBAN SQUARE CHIPPEWA BROOKHAVEN PLAZA CARNEGIE CENTER SQUARE WAYNE PLAZA CHAMBERSBURG CROSSING EAST STROUDSBURG RIDGE PIKE PLAZA EXTON EXTON EASTWICK EXTON PLAZA FEASTERVILLE GETTYSBURG HARRISBURG, PA HAMBURG HAVERTOWN NORRISTOWN NEW KENSINGTON PHILADELPHIA GALLERY, PHILADELPHIA PA PHILADELPHIA PLAZA STRAUSS WASHINGTON AVENUE 764,517 982,464 1,285,213 530,243 3,205,653 699,359 1,540,000 702,074 530,893 — 1,245,870 665,314 1,190,496 6,254 2,261,530 503,981 639,542 2,234,474 294,232 626,818 3,783,875 504,256 610,991 481,167 1,050,431 477,036 4,650,634 4,062,327 — 70,679,871 2,881,525 254,694 — 731,888 6,127,623 9,090,288 1,050,000 1,525,337 176,666 731,888 889,001 294,378 520,521 74,626 452,888 439,232 731,888 686,134 521,945 731,888 — 209,197 424,659 1,833,600 3,929,856 4,712,358 3,788,189 14,619,732 3,112,047 6,178,398 667,463 1,302,656 1,735,836 4,339,637 347,818 4,761,984 3,028,914 — 2,455,926 3,783,096 9,648,000 — 3,712,045 2,340,830 3,177,920 10,644,217 527,010 4,814,341 1,247,339 918,079 76,380 3,225,406 3,283,247 4,168,866 5,443,143 716,243 — 0 2,258,691 29,683 5,395,316 1,184,543 35,000 — (2,358,060) 2,198,476 2,471,965 5,947,751 4,201,616 3,591,493 18,604,307 — 30,061,177 166,351,381 11,526,101 973,318 3,298,908 2,927,551 15,605,012 — 2,372,628 4,251,732 4,895,360 2,927,551 2,762,888 1,404,778 2,082,083 671,630 6,665,238 — 2,927,551 2,664,535 2,548,322 2,927,551 — 1,373,843 990,872 9,003,673 1,717,378 2,475,096 8,075,501 8,900 1,263,395 452,378 59,094 3,452,809 153,289 (61,414) 17,747 1,238,976 (0) 25,248,075 1,243,804 — — 0 3,074,728 1,064,664 38,691 101,519 3,961,636 2,023,428 0 3,355,299 676,040 0 42,000 14,888 468,821 764,517 969,804 1,285,213 530,243 3,205,653 699,359 1,540,000 702,074 530,893 1,105,183 1,149,622 665,314 1,190,496 6,254 2,261,530 371,295 639,542 2,234,474 294,232 626,818 921,704 1,255,544 713,518 481,167 947,904 477,036 4,650,634 4,062,327 — 71,279,871 2,881,525 254,694 — 731,888 6,127,623 8,790,288 1,050,000 1,525,337 176,666 731,888 889,001 294,378 520,521 74,626 452,888 494,982 731,888 774,084 521,945 731,888 — 209,197 424,659 4,174,430 7,120,436 15,356,575 4,315,198 19,434,073 4,359,386 7,096,477 743,843 4,528,062 3,913,901 8,604,751 5,790,961 5,478,227 3,028,914 4,847,303 3,812,779 15,043,316 1,184,543 3,747,045 504,111 10,450,861 4,086,816 8,422,846 12,379,644 3,600,393 19,867,702 452,378 30,120,271 169,204,190 11,679,391 911,903 3,316,655 4,166,527 15,605,012 25,548,075 3,616,432 4,251,732 4,895,360 2,927,551 5,837,616 2,469,442 2,120,774 773,149 4,938,947 8,090,240 16,641,788 4,845,441 22,639,726 5,058,745 8,636,477 1,445,917 5,058,955 5,019,083 9,754,373 6,456,275 6,668,723 3,035,168 2,261,530 5,218,598 4,452,321 17,277,790 1,478,775 4,373,862 1,425,815 11,706,405 4,800,334 8,904,014 13,327,548 4,077,429 24,518,336 4,514,705 30,120,271 240,484,061 14,560,916 1,166,598 3,316,655 4,898,415 21,732,635 34,338,364 4,666,432 5,777,069 5,072,026 3,659,439 6,726,617 2,763,820 2,641,295 847,775 10,626,874 11,079,762 1,967,677 2,927,551 5,931,884 3,224,362 2,927,551 42,000 1,388,731 1,459,693 2,462,660 3,659,439 6,705,968 3,746,307 3,659,439 42,000 1,597,928 1,884,352 2,923,058 3,933,513 4,732,364 2,664,482 9,555,236 830,163 1,487,402 28,367 46,613 2,625,413 5,338,066 3,074,028 3,309,846 1,577,413 2,524,254 2,262,619 7,077,536 187,635 2,172,951 6,604,670 1,277,373 3,808,952 5,548,329 1,003,989 5,686,083 3,538,019 10,957,887 2,687,860 3,510 765,382 1,483,557 441,928 655,197 2,844,993 171,256 1,129,699 925,807 1,672,285 23,845 657,623 747,005 5,786,684 341,125 925,807 3,817,006 2,846,157 925,807 11,308 159,853 2,015,889 4,156,728 11,909,424 2,180,959 13,084,490 4,228,582 7,149,075 1,417,550 5,012,342 2,393,671 4,416,307 3,382,247 3,358,877 1,457,755 2,261,530 2,694,344 2,189,702 10,200,254 1,291,140 2,200,911 1,425,815 5,101,735 3,522,961 5,095,062 7,779,219 3,073,441 18,832,253 4,514,705 26,582,252 229,526,174 11,873,056 1,163,087 2,551,273 3,414,858 21,290,707 33,683,167 1,821,439 5,605,813 3,942,328 2,733,632 5,054,332 2,739,976 1,983,672 100,770 5,293,077 2,121,535 2,733,632 2,888,962 900,150 2,733,632 30,692 1,597,928 1,724,499 117,000,000 8,911,011 14,288,894 4,465,434 2,349,818 1988(A) 1988(A) 1992(A) 1999(A) 1992(A) 2000(A) 1999(A) 2005(A) 2005(A) 1969(C) 1984(A) 1988(A) 1988(A) 1999(A) 1995(A) 1987(A) 1999(A) 1988(A) 1999(C) 1999(A) 2001(C) 2008(A) 1995(A) 1999(A) 1988(A) 1997(A) 1998(A) 2006(C) 2004(A) 2007(A) 2000(A) 2005(A) 1999(A) 1996(A) 2008(A) 2006(C) 1973(C) 2008(A) 1999(A) 1996(A) 1997(A) 2005(A) 1996(A) 1986(A) 2002(A) 2000(C) 1996(A) 1984(A) 1986(A) 1996(A) 1996(A) 2005(A) 2005(A) INITIAL COST BUILDING & IMPROVEMENT SUBSEQUENT TO ACQUISITION LAND BUILDING & IMPROVEMENT TOTAL ACCUMULATED DEPRECIATION TOTAL COST, NET OF ACCUMULATED DEPRECIATION ENCUMBRANCES DATE OF CONSTRUCTION(C) ACQUISITION(A) 35 NORTH 3RD LLC 1628 WALNUT STREET 1701 WALNUT STREET 120-122 MARKET STREET 242-244 MARKET STREET 1401 WALNUT ST LOWER ESTATE - UNIT A 1401 WALNUT ST LOWER ESTATE - UNIT B LAND 451,789 912,686 3,066,099 752,309 704,263 — — 1831-33 CHESTNUT STREET 1,982,143 1429 WALNUT STREET- COMMERCIAL 1805 WALNUT STREET UNIT A RICHBORO SPRINGFIELD UPPER DARBY WEST MIFFLIN WHITEHALL E. PROSPECT ST. W. MARKET ST. REXVILLE TOWN CENTER PLAZA CENTRO - COSTCO PLAZA CENTRO - MALL PLAZA CENTRO - RETAIL PLAZA CENTRO - SAM’S CLUB 1 3 8 LOS COLOBOS - BUILDERS SQUARE LOS COLOBOS - KMART LOS COLOBOS I LOS COLOBOS II 5,881,640 — 788,761 919,998 231,821 1,468,342 — 604,826 188,562 24,872,982 3,627,973 19,873,263 5,935,566 6,643,224 4,404,593 4,594,944 12,890,882 14,893,698 WESTERN PLAZA - MAYAQUEZ ONE 10,857,773 WESTERN PLAZA - MAYAGUEZ TWO 16,874,345 MANATI VILLA MARIA SC PONCE TOWN CENTER TRUJILLO ALTO PLAZA 2,781,447 14,432,778 12,053,673 MARSHALL PLAZA, CRANSTON RI 1,886,600 CHARLESTON CHARLESTON FLORENCE GREENVILLE NORTH CHARLESTON N. CHARLESTON MADISON HICKORY RIDGE COMMONS TROLLEY STATION RIVERGATE STATION MARKET PLACE AT RIVERGATE RIVERGATE, TN CENTER OF THE HILLS, TX ARLINGTON DOWLEN CENTER BURLESON BAYTOWN LAS TIENDAS PLAZA 730,164 1,744,430 1,465,661 2,209,812 744,093 2,965,748 — 596,347 3,303,682 7,135,070 2,574,635 3,038,561 2,923,585 3,160,203 2,244,581 9,974,390 500,422 8,678,107 3,089,294 2,747,260 9,558,521 2,707,474 2,117,182 915,421 83,106 2,397,736 709,276 24,654 7,001,199 9,928 32,081,992 5,982,231 17,796,661 17,311,529 3,155,044 4,981,589 927,286 — 5,195,577 2,755,314 1,158,307 48,688,161 10,752,213 58,719,179 16,509,748 20,224,758 9,627,903 10,120,147 26,046,669 30,680,556 12,252,522 19,911,045 5,673,119 28,448,754 24,445,858 7,575,302 3,132,092 6,986,094 6,011,013 8,850,864 2,974,990 11,895,294 4,133,904 2,545,033 13,218,740 19,091,078 10,339,449 12,157,408 11,706,145 2,285,378 — 810,314 2,431,651 2,595,890 127,689 521,682 — 11,839,007 1,796,548 5,046,838 — 0 1,038,043 0 6,023,070 1,566,477 6,225,903 2,473,680 2,379,589 1,389,309 754,523 3,252,954 3,274,083 1,310,001 1,640,234 444,641 3,773,843 3,023,973 1,683,456 10,179,956 4,204,305 153,208 3,045,524 257,733 1,330,622 2,753,096 21,750 634,568 2,019,812 1,239,080 4,373,995 769,510 — (820,897) (9,429,449) 553,066 — 24,818,594 451,789 912,686 3,066,099 912,076 704,263 — — 1,982,143 5,881,640 — 976,439 920,000 231,821 1,468,342 — 604,826 188,562 25,678,064 3,866,206 19,655,368 6,026,070 6,520,090 4,461,145 4,402,338 13,613,375 15,142,301 11,241,993 16,872,648 2,626,895 15,151,981 12,507,048 1,886,600 730,164 1,744,430 1,465,661 2,209,811 744,093 2,965,748 — 596,347 3,303,682 7,135,070 2,574,635 3,038,561 2,923,585 3,160,203 484,828 1,373,692 500,422 7,943,925 4,004,714 2,830,366 11,956,256 3,256,983 2,141,836 4,456,503 3,743,052 15,022,356 4,169,058 2,846,098 7,011,126 7,011,126 34,677,883 6,109,920 18,318,343 17,311,529 14,806,373 6,778,135 5,974,124 5,195,577 3,793,357 1,158,307 53,906,149 12,080,457 65,162,977 18,892,924 22,727,481 10,960,661 11,067,275 28,577,131 33,706,036 13,178,304 21,552,977 6,272,312 31,503,394 27,016,456 9,258,758 13,312,048 11,190,399 6,164,221 11,896,389 3,232,723 13,225,916 6,887,000 2,566,783 13,853,308 21,110,890 11,578,529 16,531,403 12,475,655 2,285,378 938,856 (18,436) 2,984,717 25,552,776 34,677,883 8,092,063 24,199,983 17,311,529 15,782,812 7,698,135 6,205,945 1,468,342 5,195,577 4,398,183 1,346,869 79,584,213 15,946,663 84,818,345 24,918,994 29,247,571 15,421,806 15,469,613 42,190,506 48,848,337 24,420,297 38,425,624 8,899,207 46,655,375 39,523,505 11,145,358 14,042,212 12,934,829 7,629,882 14,106,200 3,976,815 16,191,664 6,887,000 3,163,130 17,156,990 28,245,960 14,153,164 19,569,964 15,399,240 5,445,582 1,423,684 1,355,256 3,485,139 33,496,701 370,599 908,990 470,531 7,262,008 5,127,267 1,667,451 1,643,047 2,941,262 1,158,307 6,907,879 2,818,703 14,996,094 4,324,136 8,952,461 2,568,016 2,682,857 5,912,041 6,908,820 2,589,014 4,328,924 3,154,253 3,196,913 6,604,521 2,488,797 3,809,226 3,413,193 1,776,950 3,146,038 692,630 3,533,037 4,935,762 557,485 3,484,305 4,841,997 3,102,707 3,795,869 3,363,514 653,673 846,256 4,456,503 3,743,052 15,022,356 4,169,058 2,846,098 6,640,527 33,768,893 8,092,063 23,729,452 17,311,529 8,520,805 2,570,868 4,538,494 1,468,342 3,552,531 1,456,922 188,562 72,676,334 13,127,960 69,822,251 20,594,858 20,295,110 12,853,789 12,786,757 36,278,465 41,939,517 21,831,282 34,096,701 5,744,954 43,458,462 32,918,983 8,656,561 10,232,986 9,521,636 5,852,932 10,960,162 3,284,186 12,658,628 1,951,238 2,605,646 13,672,685 23,403,963 11,050,457 15,774,095 12,035,727 4,791,909 1,423,684 1,355,256 2,638,883 33,496,701 7,031,424 3,508,555 41,479,554 17,594,893 24,183,031 1,606,735 9,453,000 14,709,548 2007(A) 2007(A) 2007(A) 2007(A) 2007(A) 2008(A) 2008(A) 2007(A) 2008(A) 2008(A) 1986(A) 1983(A) 1996(A) 1986(A) 1996(A) 1986(A) 1986(A) 2006(A) 2006(A) 2006(A) 2006(A) 2006(A) 2006(A) 2006(A) 2006(A) 2006(A) 2006(A) 2006(A) 2006(A) 2006(A) 2006(A) 1998(A) 1978(C) 1995(A) 1997(A) 1997(A) 2000(A) 1997(A) 1978(C) 2000(A) 1998(A) 2004(A) 1998(A) 1998(A) 2008(A) 1997(A) 2002(C) 2000(C) 1996(A) 2005(C) INITIAL COST CORPUS CHRISTI, TX DALLAS MONTGOMERY PLAZA PRESTON LEBANON CROSSING KDI-LAKE PRAIRIE TOWN CROSSING CENTER AT BAYBROOK HARRIS COUNTY CYPRESS TOWNE CENTER SHOPS AT VISTA RIDGE VISTA RIDGE PLAZA VISTA RIDGE PHASE II SOUTH PLAINES PLAZA, TX MESQUITE MESQUITE TOWN CENTER NEW BRAUNSFELS KDI-HARMON TOWNE CROSSING PARKER PLAZA PLANO SOUTHLAKE OAKS WEST OAKS OGDEN COLONIAL HEIGHTS OLD TOWN VILLAGE MANASSAS RICHMOND RICHMOND 1 3 9 VALLEY VIEW SHOPPING CENTER POTOMAC RUN PLAZA MANCHESTER SHOPPING CENTER AUBURN NORTH CHARLES TOWN RIVERWALK PLAZA BLUE RIDGE VINA DEL MAR VICUNA MACKENA EKONO PERU MEXICO-GIGANTE ACQ MEXICO-HERMOSILLO MEXICO-HORTOLANDIA MEXICO-LINDAVISTA MEXICO-MOTOROLA MEXICO-MULTIPLAZA OJO DE AGUA LAND — 1,299,632 6,203,205 13,552,180 7,897,491 6,941,017 1,843,000 6,033,932 3,257,199 2,926,495 2,276,575 1,890,000 520,340 3,757,324 840,000 7,815,750 7,846,946 500,414 3,011,260 500,422 213,818 125,376 4,500,000 1,788,750 82,544 670,500 3,440,018 27,369,515 2,722,461 7,785,841 602,000 2,708,290 12,346,900 11,096,948 362,556 414,730 811,916 7,568,417 11,424,531 2,281,541 19,352,453 47,272,528 4,089,067 BUILDING & IMPROVEMENT SUBSEQUENT TO ACQUISITION 944,562 5,168,727 — — — 27,727,491 7,372,420 3,208,000 7,497,651 44,061,930 23,489,386 24,949,316 4,259,363 1,531,492 — (2,756,477) 13,029,416 11,716,483 9,106,300 7,555,099 2,081,356 15,061,644 3,360,000 187,300 — 2,830,835 7,703,844 2,001,687 855,275 3,476,073 378,116 2,234,831 182,154 27,777 897,593 1,918,308 — (1,857,498) 0 0 (0) 26,291 4,279,007 190,178 41,569,735 (2,715,719) 7,162,661 2,289,288 2,751,375 8,054,004 48,451,209 6,403,866 18,157,625 3,725,871 10,841,674 71,529,796 720,781 5,205,439 — — 360,474 280,600 (0) 733,871 (0) 639,555 60,221 11,026,315 179,405 6,512,770 — — — 443,699 19,878,026 (4,128,019) — — — — — 698,606 1,099,058 21,154,629 27,850,383 6,240,141 MEXICO-NON ADM GRAND PLZ CANCUN 13,976,402 35,593,236 (13,507,036) MEXICO-NON ADM LAGO REAL MEXICO-NON ADM LOS CABOS MEXICO-NON BUS ADM-MULT.CANCUN MEXICO-NUEVO LAREDO MEXICO-PACHUCA WAL-MART 11,336,743 — 406,608 10,873,070 1,257,517 6,972,267 4,471,987 10,627,540 3,621,985 — — — 1,927,493 18,848,888 4,371,071 LAND — 1,299,632 6,203,205 12,524,385 7,249,802 7,063,186 2,003,260 2,251,666 3,257,199 2,926,495 2,276,575 1,890,000 520,340 3,757,324 840,000 5,736,003 7,846,946 500,414 3,011,260 500,422 850,698 125,376 4,500,000 1,788,750 82,544 670,500 3,440,018 27,369,515 2,722,461 7,785,841 602,000 2,708,290 17,349,873 11,096,948 362,556 414,730 811,916 5,712,132 11,424,531 2,281,541 15,581,895 38,150,664 4,089,067 3,358,277 9,178,527 8,668,736 4,471,988 8,546,133 3,165,560 BUILDING & IMPROVEMENT TOTAL ACCUMULATED DEPRECIATION TOTAL COST, NET OF ACCUMULATED DEPRECIATION ENCUMBRANCES DATE OF CONSTRUCTION(C) ACQUISITION(A) 4,152,562 12,666,378 44,061,930 24,517,181 25,597,005 31,864,685 8,743,652 1,025,789 13,407,532 13,951,314 9,288,454 7,582,876 2,978,950 16,979,953 3,360,000 409,549 2,830,835 7,703,844 2,027,978 4,497,401 3,666,251 38,854,016 7,523,135 2,569,889 2,751,375 8,787,875 48,451,209 7,043,421 18,217,846 14,752,186 11,021,079 73,039,593 720,781 5,205,439 — 443,699 17,606,293 698,606 1,099,058 24,925,187 36,972,247 4,152,562 13,966,010 50,265,134 37,041,566 32,846,807 38,927,871 10,746,912 3,277,455 16,664,731 16,877,809 11,565,029 9,472,876 3,499,289 20,737,276 4,200,000 6,145,552 7,846,946 3,331,249 10,715,104 2,528,400 5,348,100 3,791,627 43,354,016 9,311,885 2,652,432 3,421,875 12,227,893 75,820,724 9,765,882 26,003,688 15,354,186 13,729,369 90,389,466 11,817,729 5,567,996 414,730 1,255,616 23,318,424 12,123,136 3,380,599 40,507,083 75,122,911 6,240,141 10,329,208 787,523 9,829,241 1,936,260 7,824,573 2,362,001 3,645,078 3,640,481 2,400,708 2,145,354 989,410 4,595,463 474,781 883,660 1,609,609 666,437 1,614,752 813,628 2,175,664 443,281 959,101 1,157,335 504,916 1,665,441 1,818,317 7,234,418 2,797,565 12,391,492 11,195 — — — 1,272,540 — — — — — 3,365,038 4,136,769 48,328,874 37,041,566 32,846,807 31,103,298 8,384,911 3,277,455 13,019,653 13,237,328 9,164,321 7,327,522 2,509,879 16,141,813 3,725,219 6,145,552 7,846,946 2,447,589 9,105,496 1,861,963 3,733,348 2,978,000 43,354,016 7,136,220 2,209,151 2,462,774 11,070,558 75,315,808 8,100,441 24,185,371 8,119,768 10,931,804 77,997,974 11,806,534 5,567,996 414,730 1,255,616 22,045,884 12,123,136 3,380,599 40,507,083 75,122,911 10,329,208 32,704,325 36,062,602 1,323,748 34,738,855 2,564,824 11,743,351 10,434,118 19,102,854 1,927,493 20,930,295 6,399,481 29,476,428 4,827,496 7,993,056 — — — — — 11,743,351 19,102,854 6,399,481 29,476,428 7,993,056 38,394,221 29,290,434 3,316,394 6,409,971 13,392,942 44,541,918 15,248,263 1997(A) 1969(C) 2003(C) 2006(C) 2006(C) 1998(A) 1997(A) 2003(C) 1998(A) 1998(A) 1998(A) 1998(A) 1995(A) 1998(A) 2003(A) 2007(C) 2005(C) 1996(A) 2008(A) 1996(A) 1967(C) 1999(A) 2007(A) 1997(A) 1999(A) 1995(A) 2004(A) 2008(A) 2004(A) 2007(A) 1985(A) 1999(A) 2005(A) 2008(A) 2008(A) 2008(A) 2008(A) 2007(A) 2008(A) 2008(A) 2006(C) 2006(C) 2008(A) 2007(A) 2007(A) 2007(A) 2008(A) 2006(C) 2005(C) MEXICO-PLAZA CENTENARIO MEXICO-PLAZA SAN JUAN MEXICO-PLAZA SORIANA MEXICO-RHODESIA MEXICO-RIO BRAVO HEB MEXICO-SALTILLO II MEXICO-SAN PEDRO MEXICO-TAPACHULA BRAZIL-VALINHOS MEXICO-WALDO ACQ LAND 3,388,861 9,631,035 2,639,975 3,924,464 2,970,663 11,150,023 3,309,654 13,716,428 5,204,507 8,929,278 BALANCE OF PORTFOLIO 133,248,688 TOTALS INITIAL COST BUILDING & IMPROVEMENT SUBSEQUENT TO ACQUISITION LAND BUILDING & IMPROVEMENT TOTAL ACCUMULATED DEPRECIATION TOTAL COST, NET OF ACCUMULATED DEPRECIATION ENCUMBRANCES DATE OF CONSTRUCTION(C) ACQUISITION(A) — — 346,945 — — — 13,238,616 — 14,997,200 16,888,627 4,492,127 2,741,650 (1,018,318) (125,257) 83,831 8,085,618 13,101,318 (4,201,751) 3,507,063 (67,275) (4,697,668) 72,145,780 2,601,664 7,699,029 2,103,630 3,924,464 2,970,663 9,110,533 3,330,479 10,731,554 5,204,507 6,917,666 137,610,601 3,528,848 913,687 758,032 83,831 8,085,618 15,140,808 9,016,040 6,491,937 14,929,925 14,202,571 72,275,994 6,130,511 8,612,716 2,861,663 4,008,295 11,056,281 24,251,341 12,346,519 17,223,490 20,134,432 21,120,237 209,886,595 — — — — — — 942,197 — — 674,913 25,370,314 6,130,511 8,612,716 2,861,663 4,008,295 11,056,281 24,251,341 11,404,322 17,223,490 20,134,432 20,445,323 184,516,281 $ 1,876,407,136 $ 5,942,508,984 $ 7,818,916,120 $ 1,159,664,489 $ 6,659,251,632 $ 1,115,828,000 2007(A) 2006(C) 2007(A) 2008(A) 2008(A) 2005(C) 2006(A) 2007(A) 2008(A) 2007(A) Depreciation and amortization are provided on the straight-line method over the estimated useful lives of the assets as follows: Buildings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15 to 50 years Fixtures, building and leasehold improvements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Terms of leases or useful lives, whichever is shorter (including certain identified intangible assets) The aggregate cost for Federal income tax purposes was approximately $7.0 billion at December 31, 2008. The changes in total real estate assets for the years ended December 31, 2008, 2007 and 2006 are as follows: 1 4 0 Balance, beginning of period . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 7,325,034,819 $ 6,001,319,025 $ 4,560,405,547 Acquisitions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Improvements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 194,097,146 242,545,745 1,113,409,534 2,719,840,791 497,102,382 505,353,494 2008 2007 2006 Transfers from (to) unconsolidated joint ventures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 194,579,632 67,572,307 (1,358,078,215) Sales Assets held for sale . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Adjustment of property carrying values . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (123,943,216) (312,051,273) (421,493,264) (5,498,006) (7,900,000) (33,817,156) (8,500,000) (4,709,328) — Balance, end of period . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 7,818,916,120 $ 7,325,034,819 $ 6,001,319,025 The changes in accumulated depreciation for the years ended December 31, 2008, 2007 and 2006 are as follows: Balance, beginning of period . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 977,443,829 $ 806,670,237 $ 740,127,307 Depreciation for year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 187,779,442 171,109,963 138,279,032 Transfers from (to) unconsolidated joint ventures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Sales Assets held for sale . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,899,587 (7,595,547) (862,822) 8,358,844 (7,474,603) (1,220,612) (331,447) (69,627,527) (1,777,128) Balance, end of period . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 1,159,664,489 $ 977,443,829 $ 806,670,237 2008 2007 2006 Reclassifications: Certain Amounts in the Prior Period Have Been Reclassified in Order to Conform with the Current Period’s Presentation. KIMCO REALTY CORPORATION AND SUBSIDIARIES SCHEDULE IV – MORTGAGE LOANS ON REAL ESTATE As of December 31, 2008 (in thousands) Type of Loan/Borrower Description Location (3) Interest Accrual Rates Interest Payment Rates Final Maturity Date Periodic Payment Terms (1) Prior Liens Face Amount of Mortgages or Maximum Available Credit (2) Carrying Amount of Mortgages (2) (3) Apartments Montreal, Quebec Retail Retail Boston, Massachusetts Palm Beach, FL Medical Center Bayonne, NJ Retail Development Ontario, Canada Commercial Medical Center Retail Retail Pennsylvania New York, NY Arboledas, Mexico Acapulco, Mexico 8.50% 12.00% 8.00% Libor + 6% 8.50% 8.50% 12.00% 8.00% Libor + 6% 8.50% LIBOR + 12.5% or Prime + 11.5% LIBOR + 12.5% or Prime + 11.5% LIBOR + 3.25% or Prime + 1.75% LIBOR + 3.25% or Prime + 1.75% 8.10% 10.00% 8.10% 10.00% 6/27/2013 9/11/2013 4/28/2013 4/17/2009 4/13/2009 4/18/2013 10/19/2012 12/31/2012 12/1/2016 I I I I I I I I I Mortgage Loans: Borrower A Borrower B Borrower C Borrower D Borrower E Borrower F Borrower G Borrower H Borrower I Individually < 3% Lines of Credit: Individually < 3% Other: Individually < 3% Capitalized loan costs 1 4 1 Total (1) (2) (3) I = Interest only The instruments actual cash flows are denominated in U.S. dollars, Canadian dollars and Mexican pesos as indicated by the geographic location above The aggregate cost for Federal income tax purposes is $181,992 — — — — — — — — — — — — $ 23,800 $ 19,489 18,000 14,500 17,500 16,906 21,875 18,000 13,000 9,900 75,300 228,781 18,000 17,320 16,000 13,648 13,430 9,000 6,487 5,626 56,733 175,733 7,067 5,416 5,000 45 798 $ 240,848 $ 181,992 The Company feels it is not practicable to estimate the fair value of each receivable as quoted market prices are not available. The cost of obtaining an independent valuation on these assets is deemed excessive considering the materiality of the total receivables. For a reconcilition of mortgage and other financing receivables from January 1, 2006 to December 31, 2008 see Note 9 of the Notes to Consolidated Financial Statements included in this annual report of Form 10K. Exhibit 12.1 KIMCO REALTY CORPORATION AND SUBSIDIARIES COMPUTATION OF RATIO OF EARNINGS TO FIXED CHARGES FOR THE YEAR ENDED DECEMBER 31, 2008 Pretax earnings from continuing operations before adjustment for minority interests or income loss from equity investees. . . . . . . . . . . . $ 47,418,852 Add: Interest on indebtedness (excluding capitalized interest). . . . . . . . . . . . Amortization of debt related expenses . . . . . . . . . . . . . . . . . . . . . . . . . . Portion of rents representative of the interest factor . . . . . . . . . . . . . . . 213,156,103 5,160,325 7,740,485 273,475,765 Distributed income from equity investees . . . . . . . . . . . . . . . . . . . . . . . . . 261,993,161 Pretax earnings from continuing operations, as adjusted . . . . . . . . . $535,468,926 Fixed charges - Interest on indebtedness (including capitalized interest) . . . . . . . . . . . . Amortization of debt related expenses . . . . . . . . . . . . . . . . . . . . . . . . . . Portion of rents representative of the interest factor . . . . . . . . . . . . . . . $241,850,328 2,163,271 7,740,485 Fixed charges . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $251,754,084 Ratio of earnings to fixed charges. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.1 142 KIMCO REALTY CORPORATION AND SUBSIDIARIES COMPUTATION OF RATIO OF EARNINGS TO COMBINED FIXED CHARGES AND PREFERRED STOCK DIVIDENDS FOR THE YEAR ENDED DECEMBER 31, 2008 Exhibit 12.2 Pretax earnings from continuing operations before adjustment for minority interests or income loss from equity investees. . . . . . . . . . . . $ 47,418,852 Add: Interest on indebtedness (excluding capitalized interest). . . . . . . . . . . . Amortization of debt related expenses . . . . . . . . . . . . . . . . . . . . . . . . . . Portion of rents representative of the interest factor . . . . . . . . . . . . . . . 213,156,103 5,160,325 7,740,485 273,475,765 Distributed income from equity investees . . . . . . . . . . . . . . . . . . . . . . . . . Pretax earnings from continuing operations, as adjusted . . . . . . . . . 261,993,161 $535,468,926 Combined fixed charges and preferred stock dividends - Interest on indebtedness (including capitalized interest) . . . . . . . . . . . . Preferred dividend factor . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Amortization of debt related expenses . . . . . . . . . . . . . . . . . . . . . . . . . . Portion of rents representative of the interest factor . . . . . . . . . . . . . . . $241,850,328 47,287,500 2,163,271 7,740,485 Combined fixed charges and preferred stock dividends. . . . . . . . . . $299,041,584 Ratio of Earnings to Combined Fixed Charges and Preferred Stock Dividends . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.8 143 Exhibit 31.1 CERTIFICATION PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002 I, Milton Cooper certify that: 1. I have reviewed this report on Form 10-K of Kimco Realty Corporation; 2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; 3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; 4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: a) designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; b) designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; c) evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and d) disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and 5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent function): a) all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and b) any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting. Date: February 26, 2009 /s/ Milton Cooper Milton Cooper Chief Executive Officer 144 Exhibit 31.2 CERTIFICATION PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002 I, Michael V. Pappagallo certify that: 1. I have reviewed this report on Form 10-K of Kimco Realty Corporation; 2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; 3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; 4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: a) designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; b) designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; c) evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and d) disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and 5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent function): a) all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and b) any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting. Date: February 26, 2009 /s/ Michael V. Pappagallo Michael V. Pappagallo Chief Financial Officer 145 Section 906 Certification Exhibit 32.1 Pursuant to 18 U.S.C. ss. 1350, as created by Section 906 of the Sarbanes-Oxley Act of 2002, each of the undersigned officers of Kimco Realty Corporation (the “Company”) hereby certifies, to such officer’s knowledge, that: (i) the accompanying Annual Report on Form 10-K of the Company for the year ended December 31, 2008 (the “Report”) fully complies with the requirements of Section 13 (a) or Section 15 (d), as applicable, of the Securities Exchange Act of 1934, as amended; and (ii) the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company. Date: February 26, 2009 Date: February 26, 2009 /s/ Milton Cooper Milton Cooper Chief Executive Officer /s/ Michael V. Pappagallo Michael V. Pappagallo Chief Financial Officer 146 (This page intentionally left blank.) Kimco Realty Corporation and Subsidiaries Shareholder Information Counsel Latham & Watkins New York, NY Auditors PricewaterhouseCoopers LLP New York, NY Registrar and Transfer Agent The Bank of New York Mellon P.O. Box 358015 Pittsburgh, PA 15252-8015 1-866-557-8695 Website: www.bnymellon/shareowner/isd Email: shrrelations@bnymellon.com Stock Listings NYSE—Symbols KIM, KIMprF, KIMprG On June 11, 2008, the Company’s Chief Executive Officer submitted to the New York Stock Exchange the annual certification required by Section 303A.12(a) of the NYSE Company Manual. In addition, the Company has filed with the Securities and Exchange Commission as exhibits to its Form 10-K for the fiscal year ended December 31, 2008, the certifications, required pursuant to Section 302 of the Sarbanes-Oxley Act, of its Chief Executive Officer and Chief Financial Officer relating to the quality of its public disclosure. Investor Relations A copy of the Company’s Annual Report to the U.S. Securities and Exchange Commission on Form 10-K may be obtained at no cost to stockholders by writing to: Barbara M. Pooley Senior Vice President, Finance and Investor Relations Kimco Realty Corporation 3333 New Hyde Park Road New Hyde Park, NY 11042 1-866-831-4297 E-mail: ir@kimcorealty.com Annual Meeting of Stockholders Stockholders of Kimco Realty Corporation are cordially invited to attend the 2009 Annual Meeting of Stockholders scheduled to be held on May 12, 2009, at 277 Park Avenue, New York, NY, Floor 17, at 10:00 a.m. Dividend Reinvestment and Common Stock Purchase Plan The Company’s Dividend Reinvestment and Common Stock Purchase Plan provides common and preferred stockholders with an opportunity to conveniently and economically acquire Kimco common stock. Stockholders may have their dividends automatically directed to our transfer agent to purchase common shares without paying any brokerage commissions. Requests for booklets describing the Plan, enrollment forms and any correspondence or questions regarding the Plan should be directed to: The Bank of New York Mellon P.O. Box 358015 Pittsburgh, PA 15252-8015 1-866-557-8695 Holders of Record Holders of record of the Company’s common stock, par value $.01 per share, totaled 3.469 as of March 18, 2009. Offices Executive Offices Regional Offices 3333 New Hyde Park Road New Hyde Park, NY 11042 516-869-9000 www.kimcorealty.com Mesa, AZ 480-461-0050 Daly City, CA 650-756-2162 Granite Bay, CA 916-791-0600 Irvine, CA 949-252-3880 Los Angeles, CA 310-284-6000 Vista, CA 760-727-1002 Walnut Creek, CA 925-977-9011 Hartford, CT 860-561-0545 Hollywood, FL 954-923-8444 Largo, FL 727-536-3287 Margate, FL 954-977-7340 Sanford, FL 407-302-4400 Rosemont, IL 847-299-1160 Columbia, MD 443-367-0110 147 Lutherville, MD 410-684-2000 Charlotte, NC 704-367-0131 Raleigh, NC 919-791-3650 Las Vegas, NV 702-258-4330 New York, NY 212-972-7456 Dayton, OH 937-434-5421 Portland, OR 503-574-3329 Austin, TX 512-323-0500 Dallas, TX 214-692-3581 Houston, TX 832-242-6913 White Plains, NY 914-328-8200 San Antonio, TX 210-566-7610 Canfield, OH 330-702-8000 Bellevue, WA 425-373-3500 Corporate Directory Board of Directors CMYK K I M C O ™ Milton Cooper Joe Grills F. Patrick Hughes Richard B. Saltzman Chairman of the Board of Direc- tors and Chief Executive Officer of the Company since November 1991. Director and President of the Company for more than five years prior to such date. Found- ing member of the Company’s predecessor in 1966. Director of the Company since January 1997. Chief Investment Officer for the IBM Retirement Funds from 1986 to 1993 and held various positions at IBM for more than five years prior to 1986. Director of the Company since October 2003. President, Hughes & Associates, LLC since October 2003. Previously served as Chief Executive Officer, President and Trustee of Mid-Atlantic Realty Trust from its formation in 1993 to 2003. ™ K I M C OR E A L T Y Director of the the Company since July 2003. President, Colony Capital LLC, (“Colony”) since May 2003. Prior to joining Colony, Managing Director and Vice Chair- man of Merrill Lynch’s investment banking division and held various other positions at Merrill Lynch for more than five years prior to that time. Richard G. Dooley David B. Henry Frank Lourenso Philip E. Coviello Director of the Company since December 1991. From 1993 to 2003 consultant to, and from 1978 to 1993, Executive Vice President and Chief Investment Officer of Massachusetts Mutual Life Insurance Company. Vice Chairman of the Board of Directors since May 2001, since December 2008, President of the Company, and since April 2001, Chief Investment Officer of the Company. Prior to joining the Company, Chief Investment Officer of GE Capital Real Estate since 1997 and held various positions at GE Capital for more than five years prior to 1997. Director of the Company since December 1991. Executive Vice President of J.P. Morgan Chase Bank (“J.P. Morgan”, and suc- cessor by merger to The Chase Manhattan Bank and Chemical Bank, N.A.) since 1990. Senior Vice President of J.P. Morgan Chase for more than five years prior to 1990. Director of the Company since May 2008. Partner of Latham & Watkins LLP, an international law firm, for 18 years until his retirement from that firm as of December 31, 2003. Latham & Watkins LLP provides legal services to the Company. Office of the Chairman Milton Cooper Chairman & Chief Executive Officer David B. Henry Vice Chairman, President & Chief Investment Officer Corporate Management Glenn G. Cohen Senior Vice President, Treasurer & Chief Accounting Officer Scott Onufrey Vice President, Managing Director Barbara M. Pooley Senior Vice President, Finance & Investor Relations Bruce Rubenstein Senior Vice President, General Counsel & Secretary Operations Management Michael V. Pappagallo Executive Vice President Chief Financial Officer & Chief Administrative Officer David R. Lukes Executive Vice President & Chief Operating Officer JoAnn Carpenter Vice President Raymond Edwards Vice President Fredrick Kurz Vice President Leah Landro Vice President, Human Resources Thomas Taddeo Vice President, Chief Information Officer William Brown President, Development Robert D. Nadler President, Central Region John Visconsi Senior Vice President, Western Region Paul Puma President, Florida/Southeast Region Conor Flynn Vice President, Western Region Tom Simmons President, Mid-Atlantic Region Joshua Weinkranz Vice President, Northeast Region Michael Melson Vice President, KRC Mexico Edward Boomer Managing Director, Canada (cid:28) (cid:22) (cid:31) (cid:10) (cid:34) (cid:202) (cid:44) (cid:13) (cid:1) (cid:29) (cid:47) (cid:57) (cid:202) (cid:85) (cid:202) (cid:211) (cid:228) (cid:228) (cid:110) (cid:202) (cid:1) (cid:32) (cid:32) (cid:49) (cid:1) (cid:29) (cid:202) (cid:44) (cid:13) (cid:42) (cid:34) (cid:44) (cid:47) K I M C OR E A L T Y ™ 3333 New Hyde Park Road New Hyde Park, NY 11042 Tel: 516-869-9000 Fax: 516-869-9001 www.kimcorealty.com

Continue reading text version or see original annual report in PDF format above