/C O R R E C T I O N -- Developers Diversified Realty Corporation/
In the news release, Developers Diversified Realty (NYSE: DDR)
Reports a 5.1% Increase in FFO Per Share for the Nine Month Period
Ended September 30, 2003, issued yesterday, Oct. 30, by Developers
Diversified Realty Corporation over PR Newswire, we are advised by
the company that in the tabular material, Financial Highlights, the
basic and diluted average shares outstanding for the three and nine
month periods ended Sept. 30, 2003 were incorrect as originally
issued inadvertently. The correct figures follow: CLEVELAND, Oct.
30 /PRNewswire-FirstCall/ -- Developers Diversified Realty
Corporation , a real estate investment trust ("REIT"), today
announced that third quarter 2003 Funds From Operations ("FFO"), a
widely accepted measure of REIT performance, on a per share basis
was $0.58 (diluted) and $0.59 (basic) as compared to $0.61
(diluted) and $0.62 (basic) per share for the same period in the
previous year, a per share decrease of 4.9% diluted and 4.8% basic.
The figures in 2003 include a $0.07 per share charge relating to
the original issuance costs associated with the redemption of
preferred shares during the third quarter 2003. Excluding this
non-cash charge, FFO, on a per share basis was $0.65 (diluted) and
$0.66 (basic), a per share increase of 6.6% diluted and 6.5% basic.
FFO reached $51.3 million for the quarter ended September 30, 2003,
as compared to $40.6 million for 2002. Net income for the three
months ended September 30, 2003 was $42.0 million compared to
second quarter 2002 net income of $25.2 million, or $0.28 per share
(diluted) and $0.29 (basic) for each quarter. (Logo:
http://www.newscom.com/cgi-bin/prnh/19990826/DDRLOGO ) On a per
share basis, FFO (diluted) was $1.86 and $1.77 for the nine month
periods ended September 30, 2003 and 2002, respectively, an
increase of 5.1%. Excluding the non-cash charges associated with
the redemption of preferred shares in 2003 and 2002, FFO, on a per
share basis was $1.99 diluted in 2003 compared to $1.86 (diluted)
in 2002, an increase of 7.0%. FFO for the nine months ended
September 30, 2003 was $154.2 million compared to FFO for the nine
months ended September 30, 2002 of $116.4 million. Net income for
the nine months ended September 30, 2003 was $148.8 million, or
$1.32 per share (diluted), compared to net income of $72.4 million,
or $0.72 per share (diluted) for the prior comparable period. An
increase in net income of $26.2 million is due to the net gain on
sale of real estate assets. The remainder of the increase in net
income is attributable to the merger with JDN Realty on March 13,
2003, core operations and a reduction in minority interest expense
associated with preferred operating partnership units which were
redeemed in 2003. Scott A. Wolstein, DDR's chairman and chief
executive officer stated, "We are pleased to announce this
quarter's financial results, which demonstrate strong earnings
growth and the Company's continued commitment to improving its
balance sheet. Furthermore, property level fundamentals remain
stable, driven by strong demand from our key tenants such as
Wal*Mart, Target and Kohl's; plus demand from other tenants
migrating from enclosed malls to open air centers. During the
quarter, Developers Diversified announced its $730 million joint
venture transaction to create an Australian investment entity. Not
only does this transaction tap the Australian public market's
overwhelming demand for institutional quality community centers,
but it also creates a long-term equity partner." FFO is a
supplemental non-GAAP financial measurement used as a standard in
the real estate industry. Management believes that FFO provides an
additional indicator of the financial performance of a REIT. The
Company also believes that FFO appropriately measures the core
operations of the Company and provides a benchmark to its peer
group. FFO does not represent cash generated from operating
activities in accordance with generally accepted accounting
principles and is not necessarily indicative of cash available to
fund cash needs and should not be considered as an alternative to
net income as an indicator of the Company's operating performance
or as an alternative to cash flow as a measure of liquidity. FFO
available to common shareholders is defined and calculated by the
Company as net income, adjusted to exclude: (i) preferred
dividends, (ii) gains (or losses) from sales of depreciable real
estate property, except for those sold through the Company's
merchant building program, which are presented net of taxes, (iii)
sales of securities, (iv) extraordinary items and (v) certain
non-cash items. These non-cash items principally include real
property depreciation, equity income from joint ventures and equity
income from minority equity investments and adding the Company's
proportionate share of FFO from its unconsolidated joint ventures
and minority equity investments, determined on a consistent basis.
Other real estate companies may calculate FFO in a different
manner. A reconciliation of net income to FFO is presented in the
financial highlights section. Leasing: Leasing activity continues
to be strong throughout the portfolio. During the third quarter of
2003, the Company executed 110 new leases aggregating approximately
633,000 square feet and 140 renewals aggregating approximately
494,000 square feet. Rental rates on new leases increased by 15.2%
to $11.83 per square foot and rental rates on renewals increased by
7.6% to $11.37 per square foot. On a blended basis, rental rates
for new leases and renewals increased by 10.1% to $11.63 per square
foot. At September 30, 2003, the average annualized base rent per
occupied square foot, including those properties owned through
joint ventures, was $10.65. Excluding the impact of the properties
acquired through the JDN merger, the average annualized base rent
per occupied square foot for the portfolio was $10.95, as compared
to $10.49 at September 30, 2002. As of September 30, 2003, the
portfolio was 94.6% leased. Excluding the impact of the properties
acquired through the JDN merger, the portfolio was 95.2% leased, as
compared to 95.9% at September 30, 2002. These percentages include
tenants for which signed leases have been executed and occupancy
has not occurred. Based on tenants in place and responsible for
paying rent as of September 30, 2003, the portfolio was 94.0%
occupied. Excluding the impact of the properties acquired through
the JDN merger, the portfolio was 94.6% occupied, as compared to
94.2% at September 30, 2002. Same store tenant sales performance
over the trailing 12 month period within the Company's portfolio
remained strong at approximately $234 per square foot for those
tenants required to report. Aggregate base and percentage rental
revenues relating to Core Portfolio Properties (i.e., shopping
center properties owned since January 1, 2002, excluding properties
under redevelopment) increased approximately $2.9 million (or 2.1%)
for the nine month period ended September 30, 2003, compared to the
same period in 2002. Strategic Transactions: Macquarie DDR Trust
The Company announced that it intends to form an Australian based
Listed Property Trust with Macquarie Bank Limited (ASX:MBL), an
international investment bank and leading advisor and manager of
specialized real estate funds in Australia. Macquarie DDR Trust
("MDT") will focus on acquiring ownership interests in
institutional-quality community center properties in the U.S. The
aggregate purchase value (assuming 100% ownership) of the initial
portfolio of eleven assets currently owned by DDR and DDR joint
ventures is approximately $730 million and MDT will operate with a
targeted leverage ratio of 50%. MDT, which is expected to be listed
on the Australian Stock Exchange during the fourth quarter, will
own an 81% interest in the 11 asset portfolio. DDR will retain a
14.5% effective ownership interest in the assets and MBL will own
the remaining 4.5%. DDR will be responsible for all day-to-day
operations of the properties and will receive fees for property
management, leasing, construction management, acquisitions, due
diligence, dispositions (including outparcel sales), and financing.
The Company will also receive base asset management fees and
incentive fees based on the performance of MDT. It is anticipated
that an additional asset in Minneapolis, MN (Coon Rapids -- Inner
Quadrant) will be sold to MDT after construction and leasing are
completed, subject to the satisfaction of MDT's investment criteria
and the availability of financing. MDT will have a two year right
of first offer on twenty pre-determined joint venture and wholly
owned assets currently in DDR's portfolio. MDT also is expected to
pursue acquisitions of additional stabilized, institutional-quality
community center properties. DDR is expected to receive
approximately $185 million in cash and retain a $53 million equity
investment in the joint venture, representing its 14.5% effective
ownership interest. The newly formed joint venture is expected to
carry approximately $374 million in debt, or approximately 50% of
total asset value. The interest rate for this debt will generally
be structured with 80% fixed and 20% floating. The new fixed rate
financing will have a weighted average interest rate of
approximately 4.40% and the floating rate debt will have an
estimated initial weighted average interest rate of 3.85%. A
portion of the initial outstanding floating rate debt reflects
financing to MDT under its anticipated $100 million secured
revolving credit facility. The aggregate size of the MDT portfolio
is approximately 5.4 million square feet of total GLA (of which 4.8
million is owned GLA), and the average size of the eleven
properties is approximately 490,000 square feet of total GLA. The
Company currently holds seven of the MDT portfolio assets in
existing joint ventures. These properties are located in Boston
(Framingham), Massachusetts; Chicago (Schaumburg), Illinois;
Minneapolis (Coon Rapids), Minnesota; Atlanta, Georgia; Washington,
D.C. (Fairfax, Virginia); Atlanta (Marietta), Georgia and Naples,
Florida. The remaining four assets are wholly owned by DDR and
located in St. Paul, Minnesota; Kansas City (Independence),
Missouri; Canton, Ohio and Cleveland (N. Olmsted), Ohio. MDT will
be governed by a board of directors that include three members from
DDR, three members from MBL and two independent members to be
selected after the listing of MDT. Expansions: For the nine month
period ended September 30, 2003, the Company completed expansions
and redevelopments at nine shopping centers located in Birmingham,
Alabama; Bayonet Point, Florida; Brandon, Florida; Tucker, Georgia;
Fayetteville, North Carolina; North Canton, Ohio; Erie,
Pennsylvania; Riverdale, Utah and Taylorsville, Utah at an
aggregate cost of approximately $26.8 million. The Company is
currently expanding/redeveloping four shopping centers located in
North Little Rock, Arkansas; Aurora, Ohio; Tiffin, Ohio and Monaca,
Pennsylvania at a projected incremental cost of approximately $22.9
million. The Company is also scheduled to commence two additional
expansion projects at the Princeton, New Jersey and Starkville,
Mississippi shopping centers. For the nine month period ended
September 30, 2003, the Company's joint ventures completed
expansions and redevelopments at three shopping centers located in
San Ysidro, California; Shawnee, Kansas and North Olmsted, Ohio at
an aggregate cost of approximately $9.7 million. The Company's
joint ventures are currently expanding/redeveloping a shopping
center located in Deer Park, Illinois at a projected incremental
cost of approximately $13.9 million. Development (Consolidated):
During the nine month period ended September 30, 2003, the Company
completed the construction of ten shopping centers located in
Fayetteville, Arkansas; Aurora, Colorado; Parker, Colorado; Parker
South, Colorado; Lithonia, Georgia; McDonough, Georgia; Coon Rapids
(Minneapolis) Minnesota; St. John's, Missouri; Erie, Pennsylvania
and Frisco, Texas. The Company currently has 15 shopping center
projects under construction, 10 of which resulted from the merger
with JDN. These projects are located in Meridian, Idaho (Phase II
of the existing shopping center); Long Beach, California;
Sacramento, California; Fort Collins, Colorado; Overland Park,
Kansas; Chesterfield, Michigan; Grandville, Michigan; Lansing,
Michigan; St. Louis, Missouri; Apex, North Carolina; Hamilton, New
Jersey; Mount Laurel, New Jersey; Pittsburgh, Pennsylvania; Irving,
Texas and Mesquite, Texas. These projects are scheduled for
completion during 2003 and 2004 and will create an additional 3.6
million square feet of retail space. The Company anticipates
commencing construction in 2004 on two additional shopping centers
located in Norwood, Massachusetts and McKinney, Texas. Development
(Joint Ventures): The Company has joint venture development
agreements for three shopping center projects. These three projects
have an aggregate projected cost of approximately $97.8 million and
are currently scheduled for completion during 2003 and 2004. At
September 30, 2003, approximately $90.3 million of costs were
incurred in relation to these development projects. The projects
located in Long Beach, California (City Place) and Austin, Texas
are being financed through the Prudential/DDR Retail Value Fund.
The other project is located in St. Louis, Missouri. Dispositions:
In September 2003, one of the Company's RVIP joint ventures sold
two west coast shopping centers, a 103,000 square foot shopping
center located in suburban Sacramento, California for approximately
$19.3 million and a 109,000 square foot shopping center located in
Fullerton, California for approximately $15.0 million and
recognized a gain of approximately $12.5 million of which the
Company's proportionate share was $2.5 million. In October 2003,
this joint venture also sold a 208,000 square foot shopping center
located in Bellingham, Washington for approximately $23.5 million.
In September 2003, the Company sold a 57,000 square foot shopping
center located in Nacogdoches, Texas for approximately $5.7 million
and in October 2003, the Company sold a 123,000 square foot
shopping center located in Decatur, Alabama for approximately $6.9
million. The Company acquired both of these properties in the
merger with JDN Realty in March 2003. Additionally, in October
2003, the Company sold a 92,000 square foot shopping center located
in St. Louis, Missouri for approximately $3.3 million. Financings:
In July 2003, the Company sold $205 million of Class H Cumulative
Redeemable Preferred Shares with an annual dividend coupon of
7.375%. In addition, the Company called all outstanding shares of
its 8.375% Class C Depositary Cumulative Preferred Shares
aggregating $100 million in July 2003, all outstanding shares of
its 8.68% Class D Depositary Cumulative Preferred Shares
aggregating $54 million in August 2003 and all outstanding shares
of its 9.375% Voting Preferred Shares aggregating $50 million in
September 2003. In July 2003, the Company issued $300 million of
seven-year senior unsecured notes with a coupon rate of 4.625%.
These notes are due August 1, 2010 and were offered at 99.843% of
par. Proceeds from this offering were used to repay borrowings
under the Company's unsecured credit facility and to selectively
prepay secured mortgage financing. Developers Diversified Realty
Corporation currently owns and manages over 360 retail operating
and development properties in 44 states comprising approximately 82
million square feet of real estate. DDR is a self- administered and
self-managed real estate investment trust (REIT) operating as a
fully integrated real estate company which acquires, develops,
leases and manages shopping centers. A copy of the Company's
Supplemental Financial/Operational package is available to all
interested parties upon written request at our corporate office to
Michelle A. Mahue, Vice President of Investor Relations, Developers
Diversified Realty Corporation, 3300 Enterprise Parkway, Beachwood,
OH 44122 or on our Website which is located at http:/www.ddr.com .
Developers Diversified Realty Corporation considers portions of
this information to be forward-looking statements within the
meaning of Section 27A of the Securities Exchange Act of 1933 and
Section 21 E of the Securities Exchange Act of 1934, both as
amended, with respect to the Company's expectation for future
periods. Although the Company believes that the expectations
reflected in such forward-looking statements are based upon
reasonable assumptions, it can give no assurance that its
expectations will be achieved. For this purpose, any statements
contained herein that are not historical fact may be deemed to be
forward looking statements. There are a number of important factors
that could cause the results of the Company to differ materially
from those indicated by such forward-looking statements, including,
among other factors, local conditions such as oversupply of space
or a reduction in demand for real estate in the area, competition
from other available space, dependence on rental income from real
property or the loss of a major tenant. For more details on the
risk factors, please refer to the Company's Form on 10-K as of
December 31, 2002. DEVELOPERS DIVERSIFIED REALTY CORPORATION
Financial Highlights (In thousands - except per share data) Three
Month Period Nine Month Period Ended September 30, Ended September
30, 2003 (F) 2002 2003 (F) 2002 Revenues: Minimum rent (A) $89,894
$65,934 $255,267 $187,198 Percentage and overage rents (A) 769 812
3,247 2,282 Recoveries from tenants 24,972 18,446 67,878 50,723
Ancillary income 537 502 1,333 1,167 Other property related income
369 615 677 1,189 Management fee income 2,601 2,427 7,733 7,789
Development fees 303 1,236 976 2,042 Interest income 1,133 1,496
3,892 4,056 Other (B) 3,599 155 9,520 4,895 124,177 91,623 350,523
261,341 Expenses: Operating and maintenance 15,653 10,810 43,962
29,942 Real estate taxes 15,987 11,294 42,491 32,041 General and
administrative (C) 9,088 6,632 28,001 20,012 Interest 23,515 19,700
65,620 57,588 Impairment charge (D) - - 2,640 - Depreciation and
amortization 24,760 18,415 68,840 56,645 89,003 66,851 251,554
196,228 Income before equity in net income of joint ventures,
minority equity interests, income tax expense, discontinued
operations and gain on sales of real estate and real estate
investments 35,174 24,772 98,969 65,113 Equity in net income of
joint ventures (E) 6,852 4,781 23,748 22,398 Minority equity
interests (F) (864) (5,570) (4,802) (16,770) Income tax expense of
taxable REIT subsidiary (130) - (130) - Income from continuing
operations 41,032 23,983 117,785 70,741 Income (loss) from
discontinued operations (G) 59 1,035 1,848 (1,377) Income before
gain on sales of real estate and real estate Investments 41,091
25,018 119,633 69,364 Gain on sales of real estate and real estate
investments, net of tax 897 159 29,142 2,988 Net income $41,988
$25,177 $148,775 $72,352 Net income, applicable to common
shareholders (H) $24,525 $18,687 $108,175 $46,241 Funds From
Operations ("FFO"): Net income applicable to common shareholders
(H) $24,525 $18,687 $108,175 $46,241 Depreciation and amortization
of real estate investments 24,319 18,029 68,013 56,237 Equity in
net income of joint ventures (6,852) (4,781) (23,748) (22,398)
Joint ventures' FFO (E) 8,872 8,794 24,815 32,145 Minority equity
interests (OP Units) 444 342 1,303 1,104 (Gain) loss on sales and
impairment charge on depreciable real estate and real estate
investments, net - (468) (24,377) 3,058 FFO available to common
shareholders 51,308 40,603 154,181 116,387 Preferred dividends (H)
17,463 6,490 40,600 26,111 FFO (H) $68,771 $47,093 $194,781 $
142,498 Per share data: (H) Earnings per common share Basic $0.29
$0.29 $1.34 $0.73 Diluted $0.28 $0.28 $1.32 $0.72 Dividends
Declared $0.41 $0.38 $1.23 $1.14 Funds From Operations - Basic (I),
(H) $0.59 $0.62 $1.89 $1.80 Funds From Operations - Diluted (I),
(H) $0.58 $0.61 $1.86 $1.77 Basic - average shares outstanding
(thousands) 85,997 64,712 80,447 63,395 Diluted - average shares
outstanding (thousands) 87,066 65,761 82,756 64,451 DEVELOPERS
DIVERSIFIED REALTY CORPORATION Financial Highlights (In thousands -
except per share data) (A) Increases in base and percentage rental
revenues for the nine month period ended September 30, 2003 as
compared to 2002, aggregated $67.3 million consisting of $2.9
million related to leasing of core portfolio properties (an
increase of 2.1% from 2002), $20.2 million from the acquisition of
thirteen shopping centers in 2002 and 2003, $49.1 million is
attributed to the JDN merger and $2.0 million related to
developments and redevelopments. These amounts were offset by a
decrease of $0.9 million relating to the business center properties
and $6.0 million due to the transfer of eight properties to joint
ventures in 2002 and 2003. Included in the rental revenues for the
nine month period ended September 30, 2003 and 2002 is
approximately $4.8 million and $3.1 million, respectively, of
revenue resulting from the recognition of straight line rents. (B)
Other income for the three month period ended September 30, 2003
and 2002 included approximately $3.7 million and $0.2 million,
respectively, in lease termination revenue. Other income for the
nine month period ended September 30, 2003 and 2002 included
approximately $6.5 million and $3.0 million in lease termination
revenue, respectively. Other income for the nine month period ended
September 30, 2003 includes approximately $2.4 million of income
from the settlement of a call option relating to the MOPPRS debt
assumed from JDN. Included in other income for the nine month
period ended September 30, 2003 and 2002 was approximately $1.1
million and $2.4 million, respectively, primarily associated with
the sale of certain option rights (2003), the sale of development
rights to the Wilshire project in Los Angeles, California (2002),
financing and other miscellaneous fees. Offsetting these revenues
for the nine months ended September 30, 2003 and 2002 was a charge
of $0.5 million relating to the write-off of abandoned development
projects in each year. (C) General and administrative expenses
include internal leasing salaries, legal salaries and related
expenses associated with the releasing of space, which are charged
to operations as incurred. For the nine month periods ended
September 30, 2003 and 2002, general and administrative expenses
were approximately 5.1% and 4.4%, respectively, of total revenues,
including joint venture revenues, for each period. In addition to
increases attributable to the merger with JDN in March 2003,
included in the nine month period ended September 30, 2003 general
and administrative expense is approximately $2.8 million of
non-cash executive management incentive compensation primarily
associated with performance unit grants which compares to $1.1
million in 2002. The increase of $1.7 million is attributed to the
increase in the Company's stock price in 2003. Excluding this
additional non-cash incentive compensation, general and
administrative expense, as a percentage of total revenues,
including joint venture revenues, was approximately 4.8%. (D)
Impairment charge relates to the potential sale of two shopping
center assets, aggregating 150,000 square feet of GLA, in 2003 with
a projected loss of approximately $2.6 million. One of these
properties sold in October 2003. DEVELOPERS DIVERSIFIED REALTY
CORPORATION Financial Highlights (In thousands - except per share
data) (E) The following is a summary of the Company's share of the
combined operating results relating to its joint ventures (in
thousands): Three Month Period Nine Month Period ended September
30, ended September 30, 2003(b) 2002(b) 2003(b) 2002(b) Revenues
from operations (a) $64,933 $55,588 $ 190,778 $ 166,498 Operating
expense 21,526 18,998 68,601 57,883 Depreciation and amortization
of real estate investments 11,536 7,686 32,226 23,180 Interest
expense 19,848 16,521 59,777 49,639 52,910 43,205 160,604 130,702
Income from operations before gain on sale of real estate and real
estate investments and discontinued operations 12,023 12,383 30,174
35,796 Gain on sale of real estate and real estate investments
1,603 2,420 3,935 13,697 Income from discontinued operations (227)
2,013 396 7,427 Gain on sale of discontinued operations 12,446 -
53,333 15,596 Net income $25,845 $16,816 $87,838 $72,516 DDR
Ownership interests (b) $7,148 $4,775 $24,678 $24,103 Funds From
Operations from joint ventures are summarized as follows: Net
income $25,845 $16,816 $87,838 $72,516 (Gain) loss on sale of real
estate and real estate investments, including discontinued
operations (12,181) 273 (53,069) (15,075) Depreciation and
amortization of real estate investments 11,627 8,537 33,109 26,822
$25,291 $25,626 $67,878 $84,263 DDRC Ownership interests (b) $8,872
$8,794 $24,815 $32,145 DDRC Partnership distributions received, net
$19,940 $9,700 $54,149 $47,854 (a) Revenues for the three month
periods ended September 30, 2003 and 2002 included approximately
$0.9 million and $0.7 million, respectively, resulting from the
recognition of straight line rents of which the Company's
proportionate share is $0.3 million and $0.2 million, respectively.
Revenues for the nine month periods ended September 30, 2003 and
2002 included approximately $2.5 million in each year resulting
from the recognition of straight line rents, of which the Company's
proportionate share is $0.6 million and $0.9 million, respectively.
(b) At September 30, 2003 and 2002, the Company owned joint venture
interests relating to 52 and 49 shopping center properties,
respectively. In addition, at September 30, 2003 and 2002,
respectively, the Company owned through its approximately 25% owned
joint venture, 75 and 117 shopping center sites formerly owned by
Service Merchandise. (c) The Company's share of joint venture net
income has been reduced by $0.9 million and $1.9 million for the
nine month periods ended September 30, 2003 and 2002, respectively,
to reflect additional basis depreciation and the elimination of
gain on sale in relation to a property acquired by the Company from
a joint venture. DEVELOPERS DIVERSIFIED REALTY CORPORATION
Financial Highlights (In thousands - except per share data) (F)
Minority Equity Interests are comprised of the following: Three
Month Period Nine Month Period Ended September 30, Ended September
30, 2003 2002 2003 2002 Minority interests $420 $458 $1,263 $1,355
Preferred Operating Partnership Units - 4,770 2,236 14,311
Operating Partnership Units 444 342 1,303 1,104 $864 $5,570 $4,802
$16,770 The financial statement amounts presented herein do not
reflect the adoption of SFAS 150, "Accounting for Certain Financial
Instruments with Characteristics of Both Liabilities and Equity"
("SFAS 150") with respect to minority interests in entities that
are considered mandatorily redeemable financial instruments. It is
our understanding that the Financial Accounting Standards Board
("FASB") voted to defer the adoption of the provisions in SFAS 150
that relate to mandatorily redeemable noncontrolling interests at
its meeting on October 29, 2003. We will incorporate a discussion
in the Company's Form 10-Q for the period ended September 30, 2003
reflecting the decisions reached in the FASB Staff Position
regarding this matter. (G) The operating results relating to assets
classified as discontinued operations are summarized as follows in
thousands): Three Month Period Nine Month Period Ended September
30, Ended September 30, 2003 2002 2003 2002 Revenues $133 $1,289
$1,351 $4,239 Expenses: Operating 44 331 178 1,026 Interest 13 180
209 591 Depreciation 17 211 322 941 74 722 709 2,558 59 567 642
1,681 Gain on sales of real estate and (impairment charge), net -
468 1,206 (3,058) $59 $1,035 $1,848 $(1,377) (H) As previously
announced, DDR has complied with the Security and Exchange
Commission ("SEC") July 31, 2003's Staff Policy statement that
clarifies EITF Topic No. D-42, "The Effect on the Calculation of
Earnings per Share for the Redemption or Induced Conversion of
Preferred Stock," and restated net income available to common
shareholders for fiscal year 2002 and recorded the charges related
to the 2003 transactions. As a result of this change in accounting
principle, the Company has recorded a charge of $5.7 million for
the three months ended September 30, 2003 and $10.7 million and
$5.5 million for the nine months ended September 30, 2003 and 2002,
respectively, to net income available to common shareholders and
FFO. (I) For purposes of computing FFO per share (basic), the
weighted average shares outstanding were adjusted to reflect the
conversion, on a weighted average basis of 1.1 million and 0.9
million Operating Partnership Units (OP Units) outstanding at
September 30, 2003 and 2002 into 1.1 million and 1.0 million common
shares of the Company for the three and nine month periods ended
September 30, 2003 and 2002, respectively. The weighted average
diluted shares and OP Units outstanding were 88.3 million and 66.9
million for the three month periods ended September 30, 2003 and
2002, respectively, and 82.9 million and 65.6 million for the nine
month periods ended September 30, 2003 and 2002, respectively.
DEVELOPERS DIVERSIFIED REALTY CORPORATION Financial Highlights (In
thousands) Selected Balance Sheet Data: September 30, 2003 (A)
December 31, 2002 Assets: Real estate and rental property: Land
$843,376 $488,292 Buildings 2,676,442 2,109,675 Fixtures and tenant
improvements 81,863 72,674 Land under development 71,180 20,028
Construction in progress 188,148 113,387 3,861,009 2,804,056 Less
accumulated depreciation (457,610) (408,792) Real estate, net
3,403,399 2,395,264 Cash 18,474 16,371 Advances to and investments
in joint ventures 325,825 258,610 Notes receivable 10,985 11,662
Receivables, including straight line rent 77,562 60,074 Other
assets 81,948 34,871 $ 3,918,193 $2,776,852 Liabilities:
Indebtedness: Revolving credit facilities $148,500 $446,000
Variable rate unsecured term debt 300,000 22,120 Unsecured debt
839,822 404,900 Mortgage and other secured debt 830,454 625,778
2,118,776 1,498,798 Dividends payable 38,688 25,378 Other
liabilities 145,029 92,070 2,302,493 1,616,246 Minority interests
44,499 215,045 Shareholders' equity 1,571,201 945,561 $3,918,193
$2,776,852 (A) See Footnote F on previous page. DEVELOPERS
DIVERSIFIED REALTY CORPORATION Financial Highlights (in thousands)
Selected Balance Sheet Data (Continued): Combined condensed balance
sheets relating to the Company's joint ventures are as follows:
September 30, December 31, 2003 2002 Land $442,706 368,520
Buildings 1,331,606 1,219,947 Fixtures and tenant improvements
29,730 24,356 Construction in progress 147,932 91,787 1,951,974
1,704,610 Accumulated depreciation (158,929) (153,537) Real estate,
net 1,793,045 1,551,073 Receivables, including straight line rent,
net 57,365 64,642 Investment in joint ventures 14,283 12,147
Leasehold interests 25,472 26,677 Other assets 87,705 80,285
$1,977,870 $1,734,824 Mortgage debt (a) $1,238,499 $ 1,129,310
Notes and accrued interest payable to DDRC 129,627 106,485 Amounts
payable to other partners 44,533 71,153 Other liabilities 78,004
61,898 1,490,663 1,368,846 Accumulated equity 487,207 365,978
$1,977,870 $1,734,824 (a) The Company's proportionate share of
joint venture debt aggregated approximately $396.4 million and
$387.1 million at September 30, 2003 and December 31, 2002,
respectively. http://www.newscom.com/cgi-bin/prnh/19990826/DDRLOGO
http://photoarchive.ap.org/ DATASOURCE: Developers Diversified
Realty Corporation CONTACT: Scott A. Wolstein, Chairman, Chief
Executive Officer, +1-216-755-5500, or Michelle A. Mahue, Vice
President of Investor Relations, +1-216-755-5455, both of
Developers Diversified Realty Corporation Web site:
http://www.ddr.com/
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