Developers Diversified Realty Reports a 31.3% Increase in FFO Per
Share for the Three Month Period Ended June 30, 2004 CLEVELAND,
July 29 /PRNewswire-FirstCall/ -- Developers Diversified Realty
Corporation (NYSE:DDR), a real estate investment trust ("REIT"),
today announced that second quarter 2004 Funds From Operations
("FFO"), a widely accepted measure of REIT performance, on a per
share basis was $0.84 (diluted) and $0.85 (basic) as compared to
$0.64 (diluted) and $0.65 (basic) per share for the same period in
the previous year (as adjusted down by $0.03 per share to reflect a
prior impairment charge previously not included in FFO in
accordance with a recent SEC comment letter), a per share increase
of 31.3% diluted and 30.8% basic. FFO available to common
shareholders reached $81.6 million for the quarter ended June 30,
2004, as compared to $55.9 million for 2003, an increase of 46.0%.
Net income available to common shareholders for the three month
period ended June 30, 2004 increased 30.1% to $74.3 million
compared to second quarter 2003 net income of $57.1 million, or
$0.77 per share (diluted) and $0.78 (basic) in 2004 compared to
$0.66 per share (diluted) and $0.67 (basic) for the same period in
2003. The increase in net income for the quarter ended June 30,
2004 is primarily related to the results from operations
attributable to the acquisition of the assets from Benderson
Development Company, Inc. ("Benderson"), and an increase in gain on
sales of real estate assets offset, to some extent, by the sale of
assets to the joint venture with MDT in the fourth quarter of 2003
and the second quarter of 2004. (Logo:
http://www.newscom.com/cgi-bin/prnh/19990826/DDRLOGO ) On a per
share basis, FFO (diluted) was $1.55 and $1.25 for the six month
periods ended June 30, 2004 and 2003, respectively, an increase of
24.0%. FFO available to common shareholders for the six months
ended June 30, 2004 was $144.4 million compared to FFO available to
common shareholders for the six month period ended June 30, 2003 of
$100.2 million. Net income available to common shareholders for the
six month period ended June 30, 2004 was $114.5 million, or $1.24
per share (diluted) and $1.26 (basic) in 2004, compared to net
income of $83.7 million, or $1.06 per share (diluted) and $1.08
(basic) for the prior comparable period. The increase in net income
is primarily attributable to the merger with JDN on March 13, 2003,
the acquisition of the assets from Benderson, an increase in gain
on sales of real estate assets, and a reduction in minority
interest expense associated with preferred operating partnership
units, which were redeemed in 2003. This increase is offset by the
sale of assets to the joint venture with MDT in the fourth quarter
of 2003 and second quarter of 2004. Scott Wolstein, DDR's Chairman
and Chief Executive Officer stated, "I am pleased to report this
quarter's financial results and earnings growth. Our portfolio
continues to generate strong and consistent cash flows and we
continue to structure and execute transactions that create
substantial long- term shareholder value, including our $2.3
billion acquisition from Benderson Development and our $538 million
sale of assets to Macquarie DDR Trust." 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 more 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 and 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, (v) cumulative
effect of changes in accounting standards and (vi) certain non-cash
items. These non-cash items principally include real property
depreciation and amortization of intangibles, 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 second quarter of 2004, the Company executed 109 new
leases aggregating approximately 754,000 square feet and 146
renewals aggregating approximately 798,000 square feet. Rental
rates on new leases increased by 17.5% to $14.02 per square foot
and rental rates on renewals increased by 7.6% to $10.20 per square
foot. On a blended basis, rental rates for new leases and renewals
increased by 10.7% to $12.05 per square foot. At June 30, 2004, the
average annualized base rent per occupied square foot, including
those properties owned through joint ventures, was $10.67.
Excluding the impact of the properties acquired from Benderson, the
average annualized base rent per occupied square foot for the
portfolio was $10.89, as compared to $10.49 at June 30, 2003. At
June 30, 2004, the portfolio was 94.9% leased. Excluding the impact
of the properties acquired from Benderson, the portfolio was 95.0%
leased, as compared to 94.3% at June 30, 2003. 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 June 30, 2004, the portfolio was
94.4% occupied. Excluding the impact of the properties acquired
from Benderson, the portfolio was 94.4% occupied, as compared to
93.8% at June 30, 2003. Same store tenant sales performance over
the trailing 12 month period within the Company's portfolio, for
those tenants required to report, remained strong at approximately
$227 per square foot in 2004 compared to $224 per square foot in
2003, an increase of 1.3%. Aggregate base and percentage rental
revenues relating to Core Portfolio Properties (i.e., shopping
center properties owned since January 1, 2003 and since April 1
with regard to JDN assets, excluding properties under
redevelopment) increased approximately $2.2 million (or 1.3%) for
the six month period ended June 30, 2004, compared to the same
period in 2003. Strategic Real Estate Transactions: Benderson
Transaction In March 2004, the Company announced that it entered
into an agreement to purchase interests in 110 retail real estate
assets with approximately 18.8 million square feet of GLA, from
Benderson. One of those properties was subject to a right of first
refusal, which has been exercised, so the Company expects to
acquire interests in 109 assets. The purchase price of the assets,
including associated expenses, is expected to be approximately $2.3
billion, less assumed debt and the value of a 2% equity interest of
approximately $16.2 million that Benderson will retain as set forth
below. Benderson is transferring to us 100% ownership in certain
assets or entities owning certain assets. The remaining assets are
held by a joint venture in which the Company holds a 98.0% interest
and Benderson holds a 2.0% interest. Through July 29, 2004, the
Company completed the purchase of 102 properties, including 14
purchased directly by our MDT joint venture and 52 held by the
joint venture with Benderson. With respect to the joint venture
with Benderson, after 20 months from the initial acquisition,
Benderson will have the right to cause the joint venture to redeem
its 2.0% interest for a price equal to the agreed value of the
interest on the closing date of approximately $16.2 million,
increased or decreased to reflect changes in the price of the
Company's common shares during the period in which Benderson holds
the 2.0% interest, less certain distributions Benderson receives
from the joint venture. If Benderson exercises the foregoing right,
the Company will have the right to satisfy the joint venture's
obligation by purchasing Benderson's interest for cash or by
issuing DDR common shares to Benderson. If Benderson does not elect
to exercise its right to have its interest redeemed, the Company
will have the right after 30 months from the initial acquisition to
purchase that 2.0% interest for cash or common shares for a price
determined in the same manner as if Benderson had elected to cause
such redemption. The Company funded the transaction through a
combination of assumed debt, new debt financing, the issuance of
cumulative preferred shares and the issuance of common shares (see
"Financing") and asset transfers to the MDT joint venture (See "MDT
Joint Venture"). With respect to assumed debt, the fair value of
existing indebtedness that we have assumed or intend to assume upon
closing is approximately $408.0 million, which includes an
adjustment of approximately $30.0 million to fair value, based on
rates for debt with similar terms and remaining maturities as of
May 2004. The Benderson assets are located in eleven states, with
over 80.0% of the GLA in New York and New Jersey. The Benderson
assets are approximately 94.6% leased as of June 30, 2004, and the
largest tenants, based on revenues, include Tops Markets (Ahold
USA), Wal-Mart/Sam's Club, Home Depot and Dick's Sporting Goods.
Prior to the transaction, the Company owned less than 100,000
square feet of GLA in New York and approximately 2.7 million square
feet of GLA in New Jersey. Benderson has entered into a five-year
master lease for vacant space that is either covered by a letter of
intent as of the closing date or a new lease with respect to which
the tenant has not begun to pay rent as of the closing date. During
the five-year master lease, Benderson has agreed to pay the rent
for such vacant space until each applicable tenant's rent
commencement date. MDT Joint Venture In May 2004, MDT acquired an
indirect ownership interest in 23 retail properties, which consists
of over 5.6 million square feet of GLA. The aggregate purchase
price of the properties was approximately $538.0 million. The
Company indirectly holds an effective 14.5% interest in those
properties. Eight of the properties sold to MDT were owned by the
Company and one of the properties was held by the Company through a
joint venture. Fourteen of the properties sold to MDT were owned by
Benderson. Coventry II In July 2004, the Company, through its joint
venture with Coventry II, acquired an effective 10% interest in a
development partnership with David Berndt Interests to develop a
new shopping center in San Antonio, Texas, known as Westover
Marketplace. The joint venture partnership acquired approximately
63 acres of land for $10.6 million and sold approximately 16 acres
for $2.5 million to Target. DDR anticipates that this shopping
center will be completed in Fall 2005. Expansions: For the six
month period ended June 30, 2004, the Company completed four
expansion and redevelopment projects located in North Little Rock,
Arkansas; Aurora, Ohio; Tiffin, Ohio and Monaca, Pennsylvania at an
aggregate cost of approximately $21.5 million. The Company is
currently expanding/redeveloping nine shopping centers located in
Gadsden, Alabama; Brandon, Florida; Tallahassee, Florida; Suwanee,
Georgia; Starkville, Mississippi; Hendersonville, North Carolina;
Princeton, New Jersey; Brentwood, Tennessee and Chattanooga,
Tennessee at a projected incremental cost of approximately $27.0
million. The Company is also scheduled to commence an additional
expansion project at Allentown, Pennsylvania. For the six month
period ended June 30, 2004, a joint venture of the Company
completed the expansion of its shopping center located in Deer
Park, Illinois at an aggregate cost of $13.9 million. The Company's
joint ventures are currently expanding/redeveloping a shopping
center located in Merriam, Kansas at a projected incremental cost
of approximately $1.1 million. The Company is also scheduled to
commence four additional expansion/redevelopment projects at
shopping centers located in Phoenix, Arizona; Lancaster,
California; Kansas City, Missouri and Kirkland, Washington.
Development (Consolidated): During the six month period ended June
30, 2004, the Company substantially completed the construction of a
506,000 square foot shopping center located in Hamilton, New Jersey
and a 312,000 square foot shopping center located in Irving, Texas.
The Company currently has eleven shopping center projects under
construction. These projects are located in Long Beach, California;
Fort Collins, Colorado; Miami, Florida; Overland Park, Kansas;
Chesterfield, Michigan; Lansing, Michigan; St. Louis, Missouri;
Apex, North Carolina; Mount Laurel, New Jersey; Pittsburgh,
Pennsylvania and Mesquite, Texas. These projects are scheduled for
completion from 2004 through 2006 at a projected aggregate cost of
approximately $411.3 million and will create an additional 3.2
million square feet of retail space. The Company anticipates
commencing construction in 2004 on three additional shopping
centers located in Norwood, Massachusetts; Freehold, New Jersey and
McKinney, Texas. Development (Joint Ventures): The Company has
joint venture development agreements for four shopping center
projects. These projects have an aggregate projected cost of
approximately $105.6 million. These projects are located in
Jefferson County (St. Louis, Missouri); Apex, North Carolina
(Phases III and IV), adjacent to a wholly-owned development
project; and San Antonio, Texas. The project located in Jefferson
County (St. Louis, Missouri) will be substantially completed in
2004. The remaining projects are scheduled for completion in 2005.
At June 30, 2004, approximately $7.4 million of costs were incurred
in relation to these development projects. Financings: In
conjunction with the Company's acquisition of assets from
Benderson, the following capital transactions aggregating $1.1
billion in net proceeds, in addition to the MDT joint venture
discussed above, were completed: * In May 2004, the Company entered
into an agreement with Bank One, Wachovia and Wells Fargo for a
$200 million three-year term loan with two one-year extension
options at an interest rate of LIBOR plus 75 basis points. * In May
2004, the Company issued and sold 15,000,000 of DDR common shares.
Net proceeds from the sale of the common shares were approximately
$491 million. * In May 2004, the Company issued and sold 6,800,000
depository shares, each representing 1/20 of a share of 7.50% Class
I Cumulative Redeemable Preferred Shares. Net proceeds from the
sale of the depository shares were approximately $164.5 million. *
In April 2004, the Company issued $250 million, 5.25% seven-year
notes through a private placement. In July 2004, the Company
expanded it unsecured revolving credit facility from $650 million
to $1.0 billion. Developers Diversified Realty Corporation
currently owns and manages over 460 retail operating and
development properties in 44 states comprising of approximately 102
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 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, the loss of a major tenant or inability to enter into
definitive agreements with regard to our financing arrangements or
our failure to satisfy conditions to the completion of these
arrangements. For more details on the risk factors, please refer to
the Company's Form on 10-K as of December 31, 2003. DEVELOPERS
DIVERSIFIED REALTY CORPORATION Financial Highlights (In thousands -
except per share data) Three Month Period Six Month Period Ended
June 30, Ended June 30, Revenues: 2004 2003 2004 2003 Minimum rent
(A) $ 104,800 $91,229 $193,759 $164,868 Percentage and overage
rents (A) 1,400 1,292 3,128 2,477 Recoveries from tenants 30,040
23,109 55,831 42,790 Ancillary income 618 434 1,383 782 Other
property related income 1,167 233 2,073 307 Management fee income
3,592 2,528 6,702 5,132 Development fees 604 344 795 673 Other (B)
6,504 2,858 10,023 5,921 148,725 122,027 273,694 222,950 Expenses:
Operating and maintenance 16,049 15,068 32,314 28,210 Real estate
taxes 19,902 14,270 35,772 26,400 General and administrative (C)
11,050 11,189 21,494 18,913 Depreciation and amortization 31,930
23,970 57,031 43,733 78,931 64,497 146,611 117,256 Other
income/(expense) Interest income 998 1,156 2,358 2,759 Interest
expense (30,734) (23,042) (55,669) (41,945) (29,736) (21,886)
(53,311) (39,186) Income before equity in net income of joint
ventures, minority equity interests, income tax of taxable REIT
subsidiaries and franchise taxes, discontinued operations, gain on
sales of real estate and real estate investments and cumulative
effect of adoption of a new accounting standard 40,058 35,644
73,772 66,508 Equity in net income of joint ventures (D) 6,943
6,797 25,164 16,896 Minority equity interests (E) (966) (873)
(2,110) (3,938) Income tax of taxable REIT subsidiaries and
franchise taxes (221) - (892) - Income from continuing operations
45,814 41,568 95,934 79,466 Loss from discontinued operations (F) -
(1,212) (703) (924) Income before gain on sales of real estate and
real estate investments and cumulative effect of adoption of a new
accounting standard 45,814 40,356 95,231 78,542 Gain on sales of
real estate and real estate investments, net of tax 40,998 28,046
45,368 28,245 Income before cumulative effect of adoption of a new
accounting standard 86,812 68,402 140,599 106,787 Cumulative effect
of adoption of a new accounting standard (H) - - (3,001) - Net
income $86,812 $68,402 $137,598 $106,787 Net income, applicable to
common shareholders $74,295 $57,140 $114,476 $83,650 Funds From
Operations ("FFO"): Net income applicable to common shareholders
$74,295 $57,140 $114,476 $83,650 Depreciation and amortization of
real estate investments 31,208 23,973 55,966 43,694 Equity in net
income of joint ventures (6,943) (6,797) (25,164) (16,896) Joint
ventures' FFO (D) 11,065 8,149 23,741 15,943 Minority equity
interests (OP Units) 625 482 1,197 859 Gain on sales of depreciable
real estate and real estate investments, net (G) (28,639) (27,017)
(28,799) (27,017) Cumulative effect of adoption of a new accounting
standard (H) - - 3,001 - FFO available to common shareholders
81,611 55,930 144,418 100,233 Preferred dividends 12,517 11,262
23,122 23,137 FFO $94,128 $67,192 $167,540 $123,370 Per share data:
Earnings per common share Basic $0.78 $0.67 $1.26 $1.08 Diluted
$0.77 $0.66 $1.24 $1.06 Dividends Declared $0.46 $0.41 $0.92 $0.82
Funds From Operations - Basic (I) $0.85 $0.65 $1.57 $1.27 Funds
From Operations - Diluted (I) $0.84 $0.64 $1.55 $1.25 Basic -
average shares outstanding (thousands) (I) 95,018 85,031 90,682
77,626 Diluted - average shares outstanding (thousands) (I) 97,415
87,667 93,104 79,981 (A) Increases in base and percentage rental
revenues for the six month period ended June 30, 2004 as compared
to 2003, aggregated $28.9 million consisting of $1.0 million
related to leasing of core portfolio properties (an increase of
0.9% from 2003), $6.7 million from the acquisition of four shopping
centers in 2003 and 2004, $15.9 million from the properties
acquired from Benderson, $18.9 million from the JDN merger and $1.5
million from the consolidation of a joint venture interest due to
the adoption of FIN 46. These amounts were offset by a decrease of
$0.3 million relating to the business center properties, and $14.6
million due to the sale of properties to joint ventures in 2003 and
2004 and $0.2 million related to developments and redevelopments.
Included in the rental revenues for the six month periods ended
June 30, 2004 and 2003 is approximately $3.5 million and $3.0
million, respectively, of revenue resulting from the recognition of
straight line rents. (B) Other income for the six month periods
ended June 30, 2004 and 2003 was comprised of the following (in
millions): Three Month Period Six Month Period Ended June 30, Ended
June 30, 2004 2003 2004 2003 Lease termination and bankruptcy
settlements $3.5 $2.5 $7.0 $2.8 Acquisition and finance fees 3.0 -
3.0 - Settlement of call option (1) - - - 2.4 Sale of option rights
and other miscellaneous - 0.4 - 0.7 $6.5 $2.9 $10.0 $5.9 (1)
Settlement of a call option on March 31, 2003 relating to the
MOPPRS debt assumed from JDN, principally arising from an increase
in interest rates from the date of acquisition, March 13, 2003, to
the date of settlement. (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 six month periods ended June 30,
2004 and 2003, general and administrative expenses were
approximately 4.9% and 5.3%, respectively, of total revenues,
including joint venture revenues, for each period. (D) 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 Six Month Period Ended June 30, Ended June 30,
2004 2003 2004 2003 Revenues from operations (a) $82,902 $59,358
$159,177 $119,230 Operating expense 29,712 22,884 55,958 44,884
Depreciation and amortization of real estate investments 14,260
9,214 25,152 19,488 Interest expense 17,814 18,244 36,471 38,312
61,786 50,342 117,581 102,684 Income from operations before gain on
sale of real estate and real estate investments and discontinued
operations 21,116 9,016 41,596 16,546 Gain (loss) on sale of real
estate and real estate investments 5 588 (8) 2,331 (Loss) income
from discontinued operations, net of tax 377 (449) 50 2,229 (Loss)
gain on sale of discontinued operations, net of tax (132) 7,699
23,777 40,887 Net income $21,366 $16,854 $65,415 $61,993 DDR
Ownership interests (b) $7,064 $7,094 $25,365 $17,531 Funds From
Operations from joint ventures are summarized as follows: Net
income $21,366 $16,854 $65,415 $61,993 Loss (gain) on sale of real
estate and real estate investments, including discontinued
operations 126 (5,125) (23,988) (40,815) Depreciation and
amortization of real estate investments 14,260 10,068 25,038 21,481
$35,752 $21,797 $66,465 $42,659 DDR Ownership interests (b) $11,065
$8,149 $23,741 $15,943 DDR Partnership distributions received, net
$20,738 $12,669 $49,054 $34,110 (a) Revenues for the three month
periods ended June 30, 2004 and 2003 included approximately $1.6
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 $0.1 million, respectively.
Revenues for the six month periods ended June 30, 2004 and 2003
included approximately $2.7 million and $1.6 million, respectively,
resulting from the recognition of straight line rents of which the
Company's proportionate share is $0.5 million and $0.4 million,
respectively. (b) Included in equity in net income of joint
ventures for the six months ended June 30, 2004, is approximately
$3.2 million of previously deferred gain related to the sale of
joint venture property at the end of 2003. This amount was deferred
until certain construction and leasing obligations were achieved.
The Company's share of joint venture net income has been reduced by
$0.1 million and $0.3 million for the three month periods ended
June 30, 2004 and 2003, respectively, and by $0.2 million and $0.7
million for the six month periods ended June 30, 2004 and 2003,
respectively, to reflect additional basis depreciation. At June 30,
2004 and 2003, the Company owned joint venture interests relating
to 74 and 54 shopping center properties, respectively. In addition,
at June 30, 2004 and 2003, respectively, the Company, through a
joint venture, owned an interest of approximately 25% in 69 and 80
shopping center sites formerly owned by Service Merchandise,
respectively. (E) Minority Equity Interests are comprised of the
following (in thousands): Three Month Period Six Month Ended June
30, Ended June 30, 2004 2003 2004 2003 Minority interests $342 $391
$914 $843 Preferred Operating Partnership Units - - - 2,236
Operating Partnership Units 624 482 1,196 859 $966 $873 $2,110
$3,938 (F) The operating results relating to assets classified as
discontinued operations are summarized as follows (in thousands):
Three Month Period Six Month Period Ended June 30, Ended June 30,
2004 2003 2004 2003 Revenues $- $988 $145 $1,853 Expenses:
Operating - 2,852 94 2,975 Interest - 177 19 356 Depreciation - 377
38 652 - 3,406 151 3,983 - (2,418) (6) (2,130) Minority interests -
- (4) - Gain (loss) on sales of real estate - 1,206 (693) 1,206 $-
$(1,212) $(703) $(924) (G) For the three and six month periods
ended June 30, 2003, the Company previously reported an impairment
charge of $2.6 million which was reflected as an add back to FFO
similar to a loss on sale of real estate. In accordance with
comments recently received from the SEC, this charge has been
reflected in FFO available to common shareholders for 2003 which
resulted in the previously reported FFO of $58.6 million and $102.9
million or $0.68 per share (basic) and $0.67 per share (diluted)
and $1.30 per share (basic) and $1.28 per share (diluted) for the
three and six month periods ended June 30, 2003 being adjusted as
reflected on the FFO calculation disclosed. (H) The cumulative
effect of adoption of a new accounting standard (FIN 46) of
approximately $3.0 million is attributable to the consolidation of
a 50% owned shopping center property in Martinsville, Virginia and
the minority partner's share of cumulative losses. (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 1.4 million and 1.1 million Operating Partnership
Units (OP Units) outstanding at June 30, 2004 and 2003 into 1.3
million and 1.1 million common shares of the Company for the three
month periods ended June 30, 2004 and 2003, respectively and 1.2
million and 1.0 million for the six month periods ended June 30,
2004 and 2003. The weighted average diluted shares and OP Units
outstanding were 97.6 million and 87.8 million for the three month
periods ended June 30, 2004 and 2003, respectively and 93.2 million
and 80.1 million for the six month periods ended June 30, 2004 and
2003, respectively. DEVELOPERS DIVERSIFIED REALTY CORPORATION
Financial Highlights (In thousands) Selected Balance Sheet Data:
June 30, 2004 December 31, 2003 Assets: Real estate and rental
property: Land $1,372,811 $821,893 Buildings 4,116,399 2,719,764
Fixtures and tenant improvements 95,726 90,384 Construction in
progress 288,388 252,870 5,873,324 3,884,911 Less accumulated
depreciation (518,399) (458,213) Real estate, net 5,354,925
3,426,698 Cash 21,520 11,693 Restricted cash - 99,340 Advances to
and investments in joint ventures 260,182 260,143 Notes receivable
18,133 11,741 Receivables, including straight line rent, net 92,543
76,509 Other assets, net 87,333 55,027 $5,834,636 $3,941,151
Liabilities: Indebtedness: Revolving credit facilities $449,500
$186,500 Variable rate unsecured term debt 350,000 300,000
Unsecured debt 1,360,322 838,996 Mortgage and other secured debt
1,075,292 757,635 3,235,114 2,083,131 Dividends payable 53,063
43,520 Other liabilities 180,998 152,992 3,469,175 2,279,643
Minority interests 57,671 47,438 Shareholders' equity 2,307,790
1,614,070 $5,834,636 $3,941,151 Combined condensed balance sheets
relating to the Company's joint ventures are as follows: June 30,
December 31, 2004 2003 Land $697,755 $519,846 Buildings 1,915,782
1,692,367 Fixtures and tenant improvements 35,834 24,985
Construction in progress 38,102 38,018 2,687,473 2,275,216
Accumulated depreciation (114,148) (118,755) Real estate, net
2,573,325 2,156,461 Receivables, including straight line rent, net
44,877 47,165 Leasehold interests 27,656 28,895 Other assets
102,906 83,776 $2,748,764 $2,316,297 Mortgage debt (a) $1,593,210
$1,321,117 Notes and accrued interest payable to DDRC 18,360 31,683
Amounts payable to other partners 42,026 32,121 Other liabilities
67,051 80,681 1,720,647 1,465,602 Accumulated equity 1,028,117
850,695 $2,748,764 $2,316,297 (a) The Company's proportionate share
of joint venture debt aggregated approximately $381.2 million and
$368.5 million at June 30, 2004 and December 31, 2003,
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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