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SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

QUARTERLY REPORT

PURSUANT TO SECTION 13 OR 15(d)

OF THE SECURITIES AND EXCHANGE ACT OF 1934

For the quarterly period ended March 31, 2004

Commission File Number: 001-13243

PAN PACIFIC RETAIL PROPERTIES, INC.

(Exact Name of Registrant as Specified in Its Charter)

Registrant’s telephone number, including area code: (760) 727-1002

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the Registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    Yes  x    No  ¨.

Indicate by check mark whether the registrant is an accelerated filer (as defined in Rule 12b-2 of the Exchange Act).    Yes  x    No  ¨.

As of April 30, 2004, the number of shares of the registrant’s common stock outstanding was [40,288,507].

PAN PACIFIC RETAIL PROPERTIES, INC.

CONSOLIDATED BALANCE SHEETS

(In thousands, except share data)

See accompanying notes to consolidated financial statements.

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PAN PACIFIC RETAIL PROPERTIES, INC.

CONSOLIDATED STATEMENTS OF INCOME

(In thousands, except share data)

See accompanying notes to consolidated financial statements.

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PAN PACIFIC RETAIL PROPERTIES, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(In thousands)

(Continued)

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PAN PACIFIC RETAIL PROPERTIES, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS (Continued)

(In thousands)

See accompanying notes to consolidated financial statements.

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PAN PACIFIC RETAIL PROPERTIES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

As of March 31, 2004 (unaudited) and December 31, 2003,

and for the three months ended March 31, 2004 and 2003 (unaudited)

(Tabular amounts are in thousands, except option and share data)

1. Management statement and general

The consolidated financial statements of Pan Pacific Retail Properties, Inc. and subsidiaries (the “Company”) were prepared from the books and records of the Company without audit and in the opinion of management include all adjustments (consisting of only normal recurring accruals) necessary to present a fair statement of results for the interim periods presented. Readers of this quarterly report should refer to the audited consolidated financial statements of the Company for the year ended December 31, 2003, which are included in the Company’s 2003 Annual Report on Form 10-K, as certain disclosures which would substantially duplicate those contained in the audited consolidated financial statements have been omitted from this report.

The Company consolidates each entity it controls. Control is determined, where applicable, by the sufficiency of equity invested and the rights of the equity holders, and by the ownership of a majority of the voting interests, with consideration given to the existence of approval or veto rights granted to the minority shareholder. If the minority shareholder holds substantive participation rights, it overcomes the presumption of control by the majority voting interest holder. In contrast, if the minority shareholder simply holds protective rights (such as consent rights over certain actions), it does not overcome the presumption of control by the majority voting interest holder. With respect to the partnerships and limited liability companies, the Company determines control through a consideration of each parties’ financial interests in profits and losses and the ability to participate in major decisions such as the acquisition, sale or refinancing of principal assets.

As a result of the disclosure requirements of the Financial Accounting Standards Board’s SFAS No. 148, Accounting for Stock-Based Compensation - Transition and Disclosure, the following table shows the Company’s pro forma net income had the Company determined compensation cost based on the fair value at the grant date for its stock options under SFAS No. 123, Accounting for Stock-Based Compensation:

Pro forma net income reflects options granted since adoption of the 1997 Plan and the 2000 Plan.

2. Stock plans

In February 2004, the Company granted 46,250 shares of restricted stock and awarded 1,000 shares of stock under the 2000 Stock Incentive Plan of Pan Pacific Retail Properties, Inc. As a result an additional $2,342,000 was added to deferred compensation.

In July 2003, the Company granted 110,000 shares of restricted stock under the 2000 Stock Incentive Plan of Pan Pacific Retail Properties, Inc. As a result of the grant an additional $4,631,000 was added to deferred compensation.

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PAN PACIFIC RETAIL PROPERTIES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

As of March 31, 2004 (unaudited) and December 31, 2003,

and for the three months ended March 31, 2004 and 2003 (unaudited)

(Tabular amounts are in thousands, except option and share data)

2. Stock plans (continued)

In March 2003, the Company granted 53,000 shares of restricted stock under the 2000 Stock Incentive Plan of Pan Pacific Retail Properties, Inc. and the 1997 Stock Option and Incentive Plan. As a result of the grant an additional $1,998,000 was added to deferred compensation.

For the three months ended March 31, 2004 and 2003, $920,000 and $320,000, respectively, was recognized in general and administrative expense.

3. Earnings per share

The following is a reconciliation of the numerator and denominator for the calculation of basic and diluted earnings per share for the three months ended March 31, 2004 and 2003:

For the three months ended March 31, 2004, all stock options, both vested and unvested, and operating subsidiary units were dilutive and included in the calculation of diluted weighted-average shares. For the three months ended March 31, 2003, 272,338 operating subsidiary units were excluded from the calculation of diluted weighted-average shares because they were anti-dilutive.

4. Operating subsidiary

In February 2004, a non-managing member of Pan Pacific (Portland), LLC tendered 50,000 units in exchange for $2,532,000 cash, or $50.64 per share.

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PAN PACIFIC RETAIL PROPERTIES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

As of March 31, 2004 (unaudited) and December 31, 2003,

and for the three months ended March 31, 2004 and 2003 (unaudited)

(Tabular amounts are in thousands, except option and share data)

5. Line of credit

In March 2003, the Company entered into a $300,000,000 revolving credit agreement which bears interest, at the Company’s option, at either LIBOR plus 0.70% or a reference rate and expires in March 2006. At March 31, 2004, the amount drawn on this line of credit was $157,750,000 and the interest rate was 1.78%. The credit facility requires a quarterly fee of 0.20% per annum on the total aggregate commitment. The Company, at its sole option, may increase the amount of the commitment up to $400,000,000 and extend the maturity date to March 2007, assuming satisfaction of certain conditions.

6. Senior notes

On February 17, 2004, the Company repaid $50,000,000 in aggregate principal amount of 7.88% senior notes which was the original maturity date of the notes. The Company borrowed on its credit line to fund the repayment.

7. Discontinued operations

We report each individual property as a component for determining discontinued operations. The operations of one non-strategic asset sold during the first quarter of 2004 were reported as income from discontinued operations in 2004, and its respective 2003 results of operations were reclassified to income from discontinued operations. The operations of eight properties sold during 2003 are reported as income from discontinued operations in 2003. The following is a summary of our income from discontinued operations for the three months ended March 31, 2004 and 2003:

8. Financial instruments subject to mandatory redemption

The Company is the general partner in a consolidated limited partnership which owns a shopping center. The limited partnership has a defined termination date of December 31, 2074. The limited partner is entitled to receive 25% of the liquidation proceeds after debts and creditor obligations of the partnership have been satisfied. If termination of the partnership occurred on March 31, 2004, the amount payable to the limited partner is estimated to be $3,062,000.

The Company is a general partner in a general partnership and a limited partnership which collectively own a shopping center. The general partnership has a defined termination date of April 1, 2070. The limited partnership has a defined termination date of December 31, 2069. The other general partner and the limited partner are entitled to receive 66% of the liquidation proceeds after debts and creditor obligations of the partnerships have been satisfied. If termination of the partnership occurred on March 31, 2004, the amounts payable to the other general partner and the limited partner are estimated to be $9,810,000.

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MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL

CONDITION AND RESULTS OF OPERATIONS

Revision of Consolidated Statements of Income and Consolidated Statements of Cash Flows

Our consolidated statements of income and consolidated statements of cash flows have been revised, pursuant to SFAS No. 144, from those originally reported for the three months ended March 31, 2003 to separately reflect the results of discontinued operations for properties that have since been sold. The revision had no impact on our consolidated balance sheets. The revision had no impact on net income or net income per share of common stock for the three months ended March 31, 2003. See the discussions of discontinued operations in the “Results of Operations” section below.

Cautionary Language

The discussions in “Management’s Discussion and Analysis of Financial Condition and Results of Operations” contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 which reflect management’s current views with respect to future events and financial performance. Forward-looking statements are subject to risks and uncertainties. Factors that could cause actual results to differ materially from expectations include market valuations of our stock, financial performance and operations of our shopping centers, real estate conditions, execution of shopping center development programs, successful completion of renovations, completion of pending acquisitions, integration of completed acquisitions, changes in the availability of additional acquisitions, changes in local or national economic conditions, acts of terrorism or war and other risks detailed from time to time in reports filed with the Securities and Exchange Commission.

Critical Accounting Policies

The following discussion and analysis of financial condition and results of operations are based upon our consolidated financial statements, and the notes thereto, which have been prepared in accordance with accounting principles generally accepted in the United States of America. The preparation of these consolidated financial statements requires us to make a number of estimates and assumptions that affect the reported amounts and disclosures in the consolidated financial statements. On an ongoing basis, we evaluate our estimates and assumptions based upon historical experience and various other factors and circumstances. We believe that our estimates and assumptions are reasonable for our current circumstances; however, actual results may differ from these estimates and assumptions under different future conditions.

We believe that the estimates and assumptions that are most important to the portrayal of our financial condition and results of operations, in that they require our most subjective judgments, form the basis for the accounting policies deemed to be most critical. These critical accounting policies include our estimates of useful lives in calculating depreciation expense on our shopping center properties and the ultimate recoverability, or impairment, of each shopping center asset. If actual useful lives are different from our estimates this could result in changes to the results of our operations. Future adverse changes in market conditions or poor operating results of our shopping center properties could result in losses or an inability to recover the carrying value of the properties that may not be reflected in the properties’ current carrying value, thereby possibly requiring an impairment charge in the future.

Overview

We receive income primarily from rental revenue from shopping center properties, including recoveries from tenants, offset by operating and overhead expenses. Primarily as a result of our acquisition program, including the acquisition of Center Trust described below, the financial data shows increases in total revenue and total expenses from period to period.

During the three months ended March 31, 2004, one non-strategic asset was sold. The cash proceeds were used to pay down our revolving credit facility. During the three months ended March 31, 2003, four non-strategic assets were sold. The cash proceeds were used toward the purchase of a shopping center asset and to pay down our revolving credit facility.

On November 5, 2002, we entered into an Agreement and Plan of Merger with Center Trust, Inc., a Maryland corporation. The transaction, which closed January 17, 2003, included interests in 27 shopping centers, two regional malls and two single tenant assets. The transaction was a stock for stock exchange, including assumption

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of $362,257,000 of debt, whereby each share of Center Trust common stock was exchanged for 0.218 newly issued shares of our common stock. As a result, we issued 6,084,499 shares of our common stock to Center Trust stockholders and as of March 31, 2004, we may issue up to 250,298 shares of our common stock to limited partners of CT Operating Partnership, L.P. upon the exchange of operating partnership units held by them.

We expect that the more significant part of our growth in the next year or two will come from rent increases from the lease-up and re-tenanting initiatives of the assets acquired in the Center Trust acquisition, from the stabilization of two other properties acquired during 2003 and a property acquired in the first quarter of 2004 as well as from additional acquisitions.

Results of Operations

Comparison of the Three Months Ended March 31, 2004 to the Three Months Ended March 31, 2003

Total revenue increased by $7,489,000, or 12.1%, to $69,527,000 for the three months ended March 31, 2004, from $62,038,000 for the three months ended March 31, 2003.

Rental revenue, which includes base rent and percentage rent, increased by $5,624,000, or 11.6%, to $54,268,000 for the three months ended March 31, 2004, from $48,644,000 for the three months ended March 31, 2003. The increase in rental revenue resulted principally from the acquisition of the Center Trust portfolio and the addition of Olympia Place as an operating property which had been under development in 2003.

Recoveries from tenants, which represents reimbursements from tenants for property operating expenses and property taxes, increased by $1,211,000, or 9.7%, to $13,717,000 for the three months ended March 31, 2004, from $12,506,000 for the three months ended March 31, 2003. This increase resulted primarily from the acquisition of the Center Trust portfolio. In addition, recoveries from tenants increased because recoverable expenses increased. Recoveries from tenants were 89.1% for the three months ended March 31, 2004 compared to 82.3% for the three months ended March 31, 2003. The increase in recovery percentage compared to the prior year period reflects the impact of the lease-up and re-leasing of the Center Trust portfolio. We expect that the recovery percentage will continue to increase over time due to additional re-leasing and as occupancy is increased in the acquired assets.

Other income increased by $543,000, or 65.4%, to $1,373,000 for the three months ended March 31, 2004, from $830,000 for the three months ended March 31, 2003. The increase resulted primarily from greater termination fee and other miscellaneous income from operating properties in 2004 over the same period in 2003.

Property operating expenses decreased by $120,000, or 1.2%, to $9,686,000 for the three months ended March 31, 2004, from $9,806,000 for the three months ended March 31, 2003. The decrease was primarily the result of greater bad debt expense in the first quarter of 2003. Property taxes increased by $309,000, or 5.7%, to $5,703,000 for the three months ended March 31, 2004, from $5,394,000 for the three months ended March 31, 2003. The increase in property taxes was primarily the result of the acquisition of the Center Trust portfolio.

Depreciation and amortization increased by $1,856,000, or 20.4%, to $10,960,000 for the three months ended March 31, 2004, from $9,104,000 for the three months ended March 31, 2003. This was primarily due to the acquisition of the Center Trust portfolio.

Interest expense increased by $1,424,000, or 10.3%, to $15,250,000 for the three months ended March 31, 2004, from $13,826,000 for the three months ended March 31, 2003. The increase was primarily the result of the debt we assumed in the Center Trust acquisition as well as amounts we borrowed on our revolving credit facility to repay Center Trust’s line of credit and to pay off certain notes payable. The increase was also a result of additional amounts drawn on our revolving credit facility to finance properties acquired during 2003 and 2004. Interest expense also increased as a result of our issuance of $75,000,000 in aggregate principal amount of senior notes in June 2003. The stated interest rate of 4.70% on the senior note issuances is higher than our cost to borrow funds under our revolving credit facility which was paid down with the net proceeds of the note offering. These increases were partially offset by a decrease in interest expense resulting from the payoff of $50,000,000 of 7.88% senior notes in February 2004 with a borrowing on our credit line which had a weighted average interest rate of 1.78% at March 31, 2004.

General and administrative expenses decreased by $874,000, or 20.9%, to $3,306,000 for the three months ended March 31, 2004, from $4,180,000 for the three months ended March 31, 2003. This decrease resulted

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primarily from a decrease in accrued compensation for bonuses. As a percentage of total revenue, general and administrative expenses were 4.8% for the three months ended March 31, 2004 as compared to 6.7% for the three months ended March 31, 2003.

Discontinued operations for the three months ended March 31, 2004 of $206,000 reflects the operating results of one non-strategic asset that was sold during the quarter. Included in this amount is gain on sale of $178,000. Discontinued operations for the three months ended March 31, 2003 of $7,079,000 reflects the operating results of one non-strategic asset that was sold during the three months ended March 31, 2004 and was owned in 2003 and eight of the nine non-strategic assets that were sold during 2003. Included in this amount is gain on sale of $2,771,000.

Funds from Operations

The White Paper on Funds from Operations approved by the Board of Governors of the National Association of Real Estate Investment Trusts (“NAREIT”) in April 2002 (the “White Paper”) defines Funds from Operations as net income (computed in accordance with accounting principles generally accepted in the United States of America, “GAAP”), excluding gains (or losses) on sales of property, plus depreciation and amortization and after adjustments for unconsolidated partnerships and joint ventures. We believe that Funds from Operations (FFO) is an important supplemental measure of operating performance for a real estate investment trust. Because the historical cost accounting convention used for real estate assets requires straight-line depreciation (except on land), such accounting presentation implies that the value of real estate assets diminishes predictably over time. Since real estate values instead have historically risen and fallen with market conditions, presentations of operating results for a real estate investment trust that uses historical cost accounting for depreciation could be less informative. The term FFO was designed by the real estate investment trust industry to address this issue. We compute Funds from Operations in accordance with standards established by the White Paper. Our computation of Funds from Operations may, however, differ from the methodology for calculating Funds from Operations used by other equity REITs and, therefore, may not be comparable to these other REITs. FFO does not represent cash generated from operating activities in accordance with generally accepted accounting principles, is not necessarily indicative of cash available to fund cash needs and should not be considered as an alternative to net income. FFO, as defined by us, may not be comparable to similarly entitled items reported by other real estate investment trusts that do not define it exactly as the NAREIT definition.

The following table presents our Funds from Operations:

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Cash Flows

Comparison of the Three Months Ended March 31, 2004 to the Three months ended March 31, 2003

Net cash provided by operating activities decreased by $1,617,000 to $36,222,000 for the three months ended March 31, 2004, as compared to $37,839,000 for the three months ended March 31, 2003. The decrease was primarily the result of an increase in income from continuing operations due to the acquisition of Center Trust and a decrease in accounts receivable offset by an increase in prepaid expenses and a change in the increase in accounts payable, accrued expenses and other liabilities.

Net cash used in investing activities increased by $151,100,000 to $59,427,000 for the three months ended March 31, 2004, as compared to net cash provided by investing activities of $91,673,000 for the three months ended March 31, 2003. The increase was primarily the result of a decrease in proceeds from the sale of real estate and an increase in funds held in escrow pending property acquisition offset by a decrease in acquisitions of and additions to properties and a decrease in cash used in the acquisition of Center Trust.

Net cash provided by financing activities increased by $148,452,000 to $23,917,000 for the three months ended March 31, 2004, as compared to net cash used in financing activities of $124,535,000 for the three months ended March 31, 2003. The increase primarily resulted from a decrease in notes payable payments and an increase in line of credit proceeds offset by an increase in line of credit payments, an increase in repayment of senior notes and an increase in distributions paid.

Liquidity and Capital Resources

Our total market capitalization at March 31, 2004 was approximately $3,087,149,000, based on the market closing price of our common stock at March 31, 2004 of $52.10 per share (assuming the conversion of 770,762 operating subsidiary units to common stock) and our debt outstanding of approximately $942,216,000 (exclusive of accounts payable and accrued expenses). As a result, our debt to total market capitalization ratio was approximately 30.5% at March 31, 2004. Our board of directors adopted a policy of limiting our indebtedness to approximately 50% of our total market capitalization. However, our board of directors may from time to time modify our debt policy in light of current economic or market conditions including, but not limited to, the relative costs of debt and equity capital, market conditions for debt and equity securities and fluctuations in the market price of our common stock. Accordingly, we may increase or decrease our debt to market capitalization ratio beyond the limit described above.

In March 2003, we entered into a new $300,000,000 revolving credit facility with a maturity date of March 2006. At March 31, 2004, we had $157,750,000 drawn on our revolving credit facility leaving $142,250,000 available to borrow. At our option, amounts borrowed under our revolving credit facility bear interest at either LIBOR plus 0.70% or a reference rate. The weighted average interest rate for short-term LIBOR contracts under our revolving credit facility at March 31, 2004 was 1.78%. We will continue to use our revolving credit facility to take advantage of select acquisition opportunities as well as to provide funds for general corporate purposes.

In June 2003, we issued $75,000,000 of 4.70% senior notes due June 1, 2013. The net proceeds from the offering were used to repay borrowings under our revolving credit facility.

During 2003, nine non-strategic assets were sold, including two regional malls that were acquired as part of the Center Trust acquisition, which generated net cash proceeds of approximately $190,000,000 which were used primarily to repay borrowings under our revolving credit facility.

We may in the future enter into derivative financial instruments such as interest rate swaps, caps and treasury locks in order to mitigate our interest rate risk on a related financial instrument; however we are not a party to any derivative financial instruments at March 31, 2004. Further, we do not enter into derivative or interest rate transactions for speculative or trading purposes nor do we enter into energy or commodity contracts.

We expect to make distributions from net cash provided by operations. Operating cash flows in excess of amounts to be used for distributions will be invested primarily in short-term investments such as collateralized securities of the United States government or its agencies, high-grade commercial paper and bank deposits or be used to pay down outstanding balances on our revolving credit facility, if any.

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The following table provides recent historical distribution information:

We expect to meet our short-term liquidity requirements generally through our current working capital and net cash provided by operations. We believe that our net cash provided by operations will be sufficient to allow us to make the distributions necessary to enable us to continue to qualify as a REIT. We also believe that the foregoing sources of liquidity will be sufficient to fund our short-term liquidity needs for the foreseeable future.

We expect to meet our long-term liquidity requirements such as property acquisitions and developments, scheduled debt maturities, renovations, expansions and other non-recurring capital improvements through long-term secured and unsecured indebtedness, the issuance of additional equity or debt securities and the use of net proceeds from the disposition of non-strategic assets. We also expect to use funds available under our revolving credit facility to finance acquisition and development activities and capital improvements on an interim basis.

Off-Balance Sheet Arrangements

On September 30, 2002, Plaza Escuela Holding Co., LLC completed a financing transaction with an initial funding of $38,087,000, bearing interest at 6.8%, wherein we received a partial payoff of $36,754,000 on our note receivable of $44,349,000 on the Plaza Escuela property in Walnut Creek, California. The remaining balance of our note of $7,595,000 was converted to a 49% non-managing member interest in Plaza Escuela Holding Co., LLC, the entity that owns the property. In January 2003, we received a return of capital of $3,990,000. In May 2003, we received a return of capital of $800,000. In August 2003, we received a return of capital of $1,000,000. In February 2004 we received a return of capital of $600,000. Our remaining equity position of $1,205,000 continues to earn a preferred return of 12%. In addition, we are entitled to receive 25% of the operating cash flows from the property through November 2008. Proceeds from the returns of capital and cash flow participation were used primarily to repay borrowings under our revolving credit facility. At March 31, 2004, the balance of the Plaza Escuela Holding Co., LLC loan was $41,421,000. The loan is secured by the property and is not guaranteed by us. We account for this joint venture under the equity method. This unconsolidated debt is one of two off-balance-sheet financings to which we are a party.

We are a 50% general partner of a joint venture that owns North Coast Health Center, a medical office building in Encinitas, California. During the second quarter of 2002, the joint venture entered into a loan agreement for $18,000,000, bearing interest at 7%, to purchase the building on the property. At March 31, 2004, the balance of the loan was $17,691,000. The loan is secured by the property and is not guaranteed by us. We account for this joint venture under the equity method. This unconsolidated debt is one of two off-balance sheet financings to which we are a party.

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Contractual Obligations and Contingent Liabilities

Our indebtedness outstanding at March 31, 2004, which includes regularly scheduled principal reductions, balloon payments, scheduled senior note redemptions and amounts due on our revolving credit facility, is as follows:

Payments due in the year 2006 include the balance drawn on our revolving credit facility at March 31, 2004 of $157,750,000 and senior note redemptions of $25,000,000. Payments due in 2007, 2008, 2010, 2011 and 2013 include senior note redemptions of $55,000,000, $25,000,000, $25,000,000, $150,000,000 and $175,000,000, respectively. In 2015, property level bonds of $6,000,000 are due. With regard to the payments noted above, it is likely that we will not have sufficient funds on hand to repay these amounts at maturity. Therefore, we expect to refinance this debt either through additional debt financings secured by individual properties or groups of properties, by unsecured private or public debt offerings or by additional equity offerings.

Inflation

Substantially all of our leases provide for the recovery of real estate taxes and operating expenses we incur. In addition, many of the leases provide for fixed base rent increases or indexed escalations (based on the consumer price index or other measures) and percentage rent. We believe that inflationary increases in expenses will be substantially offset by expense reimbursements, contractual rent increases and percentage rent.

Our revolving credit facility bears interest at a variable rate, which will be influenced by changes in short-term interest rates, and will be sensitive to inflation.

Quantitative and Qualitative Disclosure about Market Risk

Market risk is the exposure to loss resulting from changes in interest rates, foreign currency exchange rates, commodity prices and equity prices. The primary market risk to which we are exposed is interest rate risk, which is sensitive to many factors, including governmental monetary and tax policies, domestic and international economic and political considerations and other factors that are beyond our control.

Interest Rate Risk

As of March 31, 2004, we had $163,750,000 of outstanding floating rate debt under our revolving credit facility and our property secured bonds. In order to modify and manage the interest characteristics of outstanding debt and limit the effects of changes in interest rates on operations, we may use a variety of financial instruments. We were not a party to any hedging agreements with respect to our floating rate debt as of March 31, 2004. We do not enter into any transactions for speculative or trading purposes. We do not believe that our weighted average interest rate of 7.0% on our fixed rate debt is materially different from current fair market interest rates for debt instruments with similar risks and maturities. Additionally, we do not believe that the interest rate risk represented by our floating rate debt is material as of that date in relation to total assets of $1,912,638,000 and a market capitalization of $2,144,933,000 of our common stock and operating subsidiary units.

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Controls and Procedures

Evaluation of Disclosure Controls and Procedures

We maintain disclosure controls and procedures that are designed to ensure that information required to be disclosed in our Exchange Act reports is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission’s rules and forms, and that such information is accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure. In designing and evaluating the disclosure controls and procedures, management recognized that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives, and management necessarily was required to apply its judgment in evaluating the cost-benefit relationship of possible controls and procedures. Also, we have investments in certain unconsolidated entities. As we do not control or manage these entities, our disclosure controls and procedures with respect to such entities are necessarily substantially more limited than those we maintain with respect to our consolidated subsidiaries.

As required by Rule 13a-15(b) under the Securities Exchange Act of 1934, we carried out an evaluation, under the supervision and with the participation of management, including our Chief Executive Officer and Chief Financial Officer, of the effectiveness of the design and operation of our disclosure controls and procedures. Based on the foregoing, our Chief Executive Officer and Chief Financial Officer concluded that, as of the end of the period covered by this report, our disclosure controls and procedures were effective and were operating at the reasonable assurance level.

There have been no significant changes in our internal controls or in other factors that could significantly affect these controls subsequent to the date of their evaluation.

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ITEM 6. Exhibits and Reports on Form 8-K

(a) Exhibits

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(b) Reports on Form 8-K.

None.

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SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized on May 4, 2004.

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