Exhibit 99.2

 

Quarterly Financial Supplement FOR THE QUARTER ENDED SEPTEMBER 30, 2014

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DDR Corp.

Table of Contents

 

Section		Page
Earnings Release & Financial Statements
Press Release			1 - 9
Joint Ventures
Summary			10
Income Statement			11
Balance Sheet			12
Investments
Transactions			13
Developments			14
Asset Summary
Portfolio Summary			15
Portfolio Detail			16
Leasing Summary			17 - 18
Top 50 Tenants			19
Balance Sheet Summary
Capital Structure			20
Debt / EBITDA			21
Debt Summary			22
Consolidated Debt Detail			23 - 25
Unconsolidated Debt Detail			26 - 27
Analyst Information and Reporting Policies
Analyst Coverage			28
Notable Policies			29 - 30

Property list available online at http://www.ddr.com

DDR considers portions of this information to be forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934, both as amended, with respect to the Company’s expectations 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, significant downsizing of or bankruptcy of a major tenant; constructing properties or expansions that produce a desired yield on investment; ability to sell assets on commercially reasonable terms; ability to secure equity or debt financing on commercially acceptable terms or at all; or ability to enter into definitive agreements with regard to our financing and joint venture arrangements or our failure to satisfy conditions to the completion of these arrangements; and the finalization of the financial statements for the three month period ended September 30, 2014. For additional factors that could cause the results of the Company to differ materially from these indicated in the forward-looking statements, please refer to the Company’s Form 10-K for the year ended December 31, 2013, as amended. The Company undertakes no obligation to publicly revise these forward-looking statements to reflect events or circumstances that arise after the date hereof.

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For immediate release:

 

Media Contact:		Investor Contact:
Matt Schuler		Matt Lougee
mschuler@ddr.com		mlougee@ddr.com
216.755.5500		216.755.5500

DDR REPORTS OPERATING FFO PER DILUTED SHARE OF $0.29

FOR THE QUARTER ENDED SEPTEMBER 30, 2014

BEACHWOOD, OHIO, October 27, 2014 – DDR Corp. (NYSE: DDR) today announced operating results for the third quarter ended September 30, 2014.

Significant Third Quarter Activity

 

•

Generated Operating FFO of $0.29 per diluted share, a 3.6% increase from the third quarter of 2013

 

•

Executed 342 new leases and renewals for 2.7 million square feet

 

•

Increased the U.S. portfolio leased rate by 30 basis points to 95.6% from 95.3% at June 30, 2014 and by 80 basis points from 94.8% at September 30, 2013

 

•

Generated positive new leasing spreads of 23.6% on a pro rata basis, and positive renewal leasing spreads of 8.2% on a pro rata basis

 

•

Generated same store net operating income growth of 3.1% at 100% ownership and on a pro rata basis compared to the prior year

 

•

Acquired sole ownership of eight prime power centers, including seven from an existing joint venture with Blackstone, for $409 million at DDR’s share

 

•

Sold $297 million of assets; DDR’s pro rata gross proceeds were $290 million

 

•

In October, closed on a new unconsolidated joint venture with Blackstone that acquired a portfolio of 71 shopping centers with a total cost of $1.93 billion

“The continued execution of our strategic plan has resulted in another consistently strong quarter,” commented Daniel B. Hurwitz, DDR’s chief executive officer. “Our portfolio and operating platform continue to perform at a high level and the outlook for our business remains robust.”

Financial Highlights

 

•

Third quarter operating funds from operations attributable to common shareholders (“Operating FFO”) increased $16.2 million to $106.2 million, or $0.29 per diluted share, compared to $90.0 million, or $0.28 per diluted share, for the prior-year comparable period.

 

•

Third quarter net income attributable to common shareholders was $63.0 million, or $0.17 per diluted share, which compares to net loss of $7.0 million, or $0.02 per diluted share, for the prior-year comparable period.

Significant Third Quarter Operating Activity

 

•

Executed 148 new leases totaling 0.7 million square feet at positive spreads of 23.6% on a pro rata basis

 

•

Executed 194 renewal leases totaling 2.0 million square feet at positive spreads of 8.2% on a pro rata basis

 

•

Increased the annualized base rent per occupied square foot to $13.65 at September 30, 2014 as compared to $13.19 at September 30, 2013

Significant Third Quarter Transactional Activity

 

•

Acquired sole ownership of a portfolio of seven prime power centers totaling 2.3 million square feet that were previously owned in a joint venture with Blackstone for $377 million at DDR’s share. The investment was funded through a combination of preferred equity repayment, the assumption of existing mortgage debt and cash.

 

•

Acquired one consolidated prime power center totaling 0.2 million square feet for $31.5 million.

 

•

Sold seven consolidated operating shopping centers totaling 2.0 million square feet and two land parcels generating gross proceeds of $263 million. A net gain of $59.4 million was recorded related to these sales. One of the land parcels sold was the entire remaining acreage of land held for development in Russia. The Company no longer has any real estate investments in Russia.

 

1

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•

In October, acquired (through a joint venture with partner, Blackstone) a portfolio of 71 shopping centers from American Realty Capital Properties, Inc. The joint venture assumed approximately $437 million of senior non-recourse debt and has also originated an additional $800 million non-recourse loan facility. The Company’s investment includes $20 million of common equity and $300 million in preferred equity with a fixed dividend rate of 8.5% and the Company will provide customary leasing and management services. An affiliate of Blackstone owns 95% of the common equity of the joint venture and an affiliate of DDR owns the remaining 5%. DDR has the right of first offer to acquire ten of the assets under specified conditions consistent with past transactions with Blackstone.

CEO Succession

 

•

As previously announced, Daniel B. Hurwitz, chief executive officer, and the Board of Directors agreed not to renew Mr. Hurwitz’s employment agreement, which expires December 31, 2015. The Board of Directors has retained an executive search firm to assist in the process of securing Mr. Hurwitz’s successor.

2014 Guidance

 

•

The Company is revising its 2014 guidance for Operating FFO to a range between $1.15 to $1.17 per diluted share from $1.14 to $1.18 per diluted share.

Non-GAAP Disclosures

FFO is a supplemental non-GAAP financial measurement used as a standard in the real estate industry and a widely accepted measure of real estate investment trust (“REIT”) performance. Management believes that FFO and Operating FFO provide additional indicators of the financial performance of a REIT. The Company also believes that FFO and Operating FFO more appropriately measure the core operations of the Company and provide benchmarks to its peer group. Neither FFO nor Operating FFO represents cash generated from operating activities in accordance with generally accepted accounting principles (“GAAP”), is necessarily indicative of cash available to fund cash needs and should be considered as an alternative to net income computed in accordance with GAAP as an indicator of the Company’s operating performance or as an alternative to cash flow as a measure of liquidity.

FFO is defined and calculated by the Company as net income, adjusted to exclude: (i) preferred share dividends, (ii) gains and losses from disposition of depreciable real estate property, which are presented net of taxes, (iii) impairment charges on depreciable real estate property and related investments, (iv) extraordinary items and (v) 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 non-controlling interests and the Company’s proportionate share of FFO from its unconsolidated joint ventures and non-controlling interests, determined on a consistent basis. The Company calculates Operating FFO by excluding the non-operating charges and gains described below. The Company computes FFO in accordance with the NAREIT definition. Other real estate companies may calculate FFO and Operating FFO in a different manner. Operating FFO is useful to investors as the Company removes these charges and gains to analyze the results of its operations and assess performance of the core operating real estate portfolio. A reconciliation of net income (loss) to FFO and Operating FFO is presented herein.

Safe Harbor

DDR Corp. considers portions of the information in this press release to be forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E 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 our results 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, significant downsizing of or bankruptcy of a major tenant; constructing properties or expansions that produce a desired yield on investment; our ability to buy or sell assets on commercially reasonable terms; our ability to complete acquisitions or dispositions of assets under contract; our ability to secure equity or debt financing on commercially acceptable terms or at all; our ability to enter into definitive agreements with regard to our financing and joint venture arrangements or our failure to satisfy conditions to the completion of these arrangements; the success of our capital recycling strategy; and the finalization of the financial statements for the three-month period ended September 30, 2014. For additional factors that could cause the results of the Company to differ materially from those indicated in the forward-looking statements, please refer to the Company’s Form 10-K for the year ended December 31, 2013, as amended. The Company undertakes no obligation to publicly revise these forward-looking statements to reflect events or circumstances that arise after the date hereof.

 

2

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About DDR Corp.

DDR is an owner and manager of 456 value-oriented shopping centers representing 125 million square feet in 42 states and Puerto Rico. The Company’s assets are concentrated in high barrier-to-entry markets with stable populations and high growth potential and its portfolio is actively managed to create long-term shareholder value. DDR is a self-administered and self-managed REIT operating as a fully integrated real estate company, and is publicly traded on the New York Stock Exchange under the ticker symbol DDR. Additional information about the Company is available at www.ddr.com, as well as on Twitter, LinkedIn and Facebook.

Conference Call and Supplemental Information

A copy of the Company’s Supplemental package is available upon request to Brooke Vanek at the Company’s corporate office, 3300 Enterprise Parkway, Beachwood, Ohio 44122 or at www.ddr.com.

The Company will hold its quarterly conference call tomorrow, October 28, 2014, at 10:00 a.m. Eastern Time. To participate, please dial 866.318.8614 (domestic) or 617.399.5133 (international) at least ten minutes prior to the scheduled start of the call. When prompted, provide the passcode: 73809437. The conference call webcast will be recorded and available for replay beginning at 12:00 p.m. ET on October 28, 2014 through the Investors portion of DDR’s website, http://ir.ddr.com/events.cfm.

 

3

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DDR Corp.

Income Statement: Consolidated Interests

 

$ in thousands, except per share
		3Q14				3Q13				9M14				9M13
Revenues:
Minimum rents (1)		$	175,771			$	140,389			$	518,838			$	406,274
Percentage rent			519				854				2,810				3,116
Recoveries			59,261				45,963				175,353				133,234
Ancillary income			6,476				7,795				18,829				20,698
Other revenues (2)			922				1,116				5,403				6,626
			242,949				196,117				721,233				569,948
Expenses (3):
Operating and maintenance			37,311				33,107				109,448				96,257
Real estate taxes			35,681				26,694				106,132				77,434
			72,992				59,801				215,580				173,691
Net operating income			169,957				136,316				505,653				396,257
Other income (expense):
Fee income			7,594				10,283				23,696				31,195
Interest income			2,652				6,692				8,937				20,365
Interest expense (4)			(58,115	)			(54,740	)			(179,908	)			(157,346	)
Depreciation and amortization			(99,480	)			(70,015	)			(302,901	)			(198,609	)
General and administrative (5)			(19,540	)			(19,246	)			(58,878	)			(59,123	)
Other income (expense), net (6)			(2,758	)			(2,282	)			(11,881	)			(3,287	)
Impairment charges (7)			(1,813	)			(9,260	)			(18,898	)			(22,902	)
(Loss) income before earnings from equity method investments and other items			(1,503	)			(2,252	)			(34,180	)			6,550
Equity in net income of joint ventures			3,620				3,780				10,241				5,543
Impairment of joint venture investments			0				0				(9,100	)			0
Gain on sale and change in control of interests, net			3,984				0				87,814				1,066
Income (loss) from discontinued operations (8)			57,906				(3,258	)			68,697				(27,872	)
Tax benefit (expense)			212				(404	)			(1,120	)			(2,463	)
Gain on disposition of real estate, net of tax			2,262				1,929				2,645				347
Net income (loss)			66,481				(205	)			124,997				(16,829	)
Income (loss) attributable to non-controlling interests			2,125				(170	)			2,985				(556	)
Net income (loss) attributable to DDR			68,606				(375	)			127,982				(17,385	)
Write-off of preferred share original issuance costs			0				0				(1,943	)			(5,246	)
Preferred dividends			(5,594	)			(6,608	)			(18,460	)			(21,113	)
Net income (loss) attributable to Common Shareholders			63,012				(6,983	)			107,579				(43,744	)
FFO:
Net income (loss) attributable to common shareholders			63,012				(6,983	)			107,579				(43,744	)
Depreciation and amortization of real estate investments			99,542				72,421				304,286				207,560
Equity in net income of joint ventures			(3,620	)			(3,780	)			(10,241	)			(5,543	)
Joint ventures’ FFO			8,387				12,731				24,507				37,103
Non-controlling interests (OP units)			223				54				509				162
Impairment of depreciable real estate			365				24,136				11,856				64,237
Gain on disposition of depreciable real estate, net			(57,105	)			(8,701	)			(159,753	)			(7,417	)
FFO attributable to Common Shareholders			110,804				89,878				278,743				252,358
Non-operating items, net (9)			(4,589	)			147				29,445				9,814
Operating FFO		$	106,215			$	90,025			$	308,188			$	262,172
FFO per share – Diluted (10)		$	0.31			$	0.28			$	0.77			$	0.79
Operating FFO per share – Diluted (10)		$	0.29			$	0.28			$	0.85			$	0.82

 

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DDR Corp.

Balance Sheet: Consolidated Interests

 

$ in thousands		At Quarter End
		3Q14				4Q13
Assets:
Land		$	2,251,513			$	2,209,970
Buildings			7,167,118				6,949,440
Fixtures and tenant improvements			628,407				599,221
			10,047,038				9,758,631
Less: Accumulated depreciation			(1,893,315	)			(1,823,199	)
			8,153,723				7,935,432
Land held for development and construction in progress			449,822				452,980
Real estate held for sale, net			0				12,670
Real estate, net			8,603,545				8,401,082
Investments in and advances to joint ventures			161,737				448,008
Cash			134,320				86,664
Restricted cash			8,250				33,476
Notes receivable, net			57,645				78,338
Receivables, including straight-line rent, net			128,414				129,513
Other assets, net (11)			531,780				515,992
Total Assets			9,625,691				9,693,073
Liabilities and Equity:
Revolving credit facilities			23,457				29,133
Unsecured debt			2,762,893				2,754,120
Unsecured term loan			350,000				350,000
Mortgage and other secured debt			2,099,694				2,161,421
			5,236,044				5,294,674
Dividends payable			61,323				55,107
Other liabilities (12)			459,787				415,413
Total Liabilities			5,757,154				5,765,194
Preferred shares			350,000				405,000
Common shares			36,034				35,938
Paid-in-capital			5,434,217				5,417,363
Accumulated distributions in excess of net income			(1,975,043	)			(1,915,638	)
Deferred compensation obligation			17,057				16,702
Accumulated other comprehensive income			(8,445	)			(36,493	)
Less: Common shares in treasury at cost			(18,475	)			(18,211	)
Non-controlling interests			33,192				23,218
Total Equity			3,868,537				3,927,879
Total Liabilities and Equity		$	9,625,691			$	9,693,073

 

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DDR Corp.

Income Statement: Unconsolidated Interests at 100%

 

$ in thousands
		3Q14				3Q13				9M14				9M13
Revenues:
Minimum rents		$	87,526			$	127,576			$	286,974			$	383,650
Percentage rent			315				393				1,090				1,451
Recoveries			24,056				31,288				72,668				93,817
Other revenues			8,076				16,744				31,791				48,881
			119,973				176,001				392,523				527,799
Expenses:
Operating and maintenance			25,535				40,750				94,260				120,884
Real estate taxes			14,489				20,349				43,527				61,246
			40,024				61,099				137,787				182,130
Net operating income			79,949				114,902				254,736				345,669
Other income (expense):
Interest expense			(41,764	)			(56,453	)			(141,776	)			(169,935	)
Depreciation and amortization			(35,579	)			(56,502	)			(119,641	)			(173,333	)
Impairment charges			(11,093	)			(13,390	)			(11,693	)			(51,713	)
Tax expense			0				(6,446	)			(6,565	)			(20,299	)
Other expense, net			(188	)			(1,916	)			(3,024	)			(2,229	)
			(88,624	)			(134,707	)			(282,699	)			(417,509	)
Loss from continuing operations			(8,675	)			(19,805	)			(27,963	)			(71,840	)
Loss from discontinued operations			(55	)			(11,196	)			(844	)			(22,604	)
Gain (loss) on disposition of discontinued operations, net			4,713				(21,228	)			28,224				(27,133	)
Gain on disposition of real estate, net			3,833				151				3,833				794
Net (loss) income			(184	)			(52,078	)			3,250				(120,783	)
Loss attributable to non-controlling interests			0				(5,800	)			(2,023	)			(19,715	)
Net (loss) income attributable to unconsolidated joint ventures			(184	)			(57,878	)			1,227				(140,498	)
Depreciation and amortization of real estate investments			35,574				58,544				118,020				180,909
Impairment of depreciable real estate			11,093				21,874				11,693				66,437
(Gain) loss on disposition of depreciable real estate, net			(8,546	)			21,228				(31,965	)			26,655
FFO			37,937				43,768				98,975				133,503
FFO at DDR’s ownership interests			8,387				12,731				24,507				37,103
Operating FFO at DDR’s ownership interests			8,387				12,331				24,643				36,413
Net income at DDR’s ownership interests			3,316				2,800				9,483				4,328
Basis differences			304				980				758				1,215
Equity in net income of joint ventures		$	3,620			$	3,780			$	10,241			$	5,543

 

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DDR Corp.

Balance Sheet: Unconsolidated Interests at 100%

 

$ in thousands		At Quarter End
		3Q14				4Q13
Assets:
Land		$	1,080,086			$	1,275,232
Buildings			2,917,565				3,940,806
Fixtures and tenant improvements			168,575				266,851
			4,166,226				5,482,889
Less: Accumulated depreciation			(814,365	)			(839,867	)
			3,351,861				4,643,022
Land held for development and construction in progress			56,713				116,088
Real estate, net			3,408,574				4,759,110
Cash and restricted cash			95,768				282,866
Receivables, including straight-line rent, net			68,951				101,003
Other assets, net			97,959				196,615
Total Assets			3,671,252				5,339,594
Liabilities and Equity:
Mortgage debt			2,572,521				3,282,643
Notes and accrued interest payable to DDR			142,502				127,679
Other liabilities			142,521				245,368
Total Liabilities			2,857,544				3,655,690
Redeemable preferred equity			38,635				71,771
Accumulated equity			775,073				1,612,133
Total Liabilities and Equity		$	3,671,252			$	5,339,594

 

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DDR Corp.

Financial Statements: Footnotes

 

$ in millions, except per share
Includes discontinued operations				3Q14				3Q13				9M14				9M13
(1)		Minimum rents:
		Straight-line rent, net		$	1.5			$	1.2			$	4.0			$	4.3
		Below-market rent, net			0.3				0.3				0.8				0.2
		Ground lease revenue			8.5				6.5				24.5				18.1
(2)		Other revenues:
		Lease termination fees			0.7				1.0				4.1				6.2
		Other miscellaneous			0.2				0.1				1.3				0.4
(3)		Operating expenses:
		Recoverable expenses (excludes discontinued operations)			(65.5	)			(51.3	)			(193.5	)			(148.6	)
		Non-recoverable expenses (excludes discontinued operations)			(7.5	)			(8.5	)			(22.1	)			(25.1	)
		Straight-line ground rent expense			(0.2	)			(0.3	)			(0.8	)			(0.9	)
		Expensed costs of suspended developments			(0.1	)			(0.6	)			(0.8	)			(1.7	)
(4)		Non-cash interest expense:
		Convertible debt accretion			(2.9	)			(2.7	)			(8.5	)			(8.0	)
		Debt fair value amortization			4.1				1.3				12.5				2.5
		Loan cost amortization			(3.1	)			(3.0	)			(9.5	)			(9.0	)
		Interest expense (capitalized)			2.7				2.0				6.6				6.8
(5)		General and administrative expenses:
		Stock compensation expenses			(1.9	)			(1.9	)			(5.8	)			(5.6	)
		Internal leasing expenses			(1.7	)			(1.8	)			(5.6	)			(5.7	)
		Construction administrative costs (capitalized)			2.5				2.4				7.3				6.9
(6)		Other income (expense):
		Transactions and other			(1.6	)			(1.9	)			(9.7	)			(2.4	)
		Litigation expenses			(1.2	)			(0.4	)			(2.2	)			(1.2	)
		Debt extinguishment, net			0.0				0.0				0.0				0.3
(7)		Impairment charges:
		Land held for development			0.0				0.0				13.2				0.0
		Undeveloped land			1.4				0.0				1.8				2.6
		Assets marketed for sale			0.4				9.2				3.9				20.3
(8)		Discontinued operations:
		Revenues			5.6				15.1				21.2				50.9
		Expenses			(4.8	)			(12.2	)			(18.7	)			(42.1	)
		Impairments			(0.0	)			(14.9	)			(8.1	)			(43.9	)
		Gain on disposition of real estate, net			57.1				8.7				74.3				7.2
		Net income (loss)			57.9				(3.3	)			68.7				(27.9	)

 

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DDR Corp.

Financial Statements: Footnotes

 

$ in millions, except per share
Includes discontinued operations				3Q14				3Q13				9M14				9M13
(9)		Non-operating items excluded from Operating FFO:
		Non-cash impairment charges – non-depreciable assets		$	1.4			$	0.0			$	24.2			$	2.6
		Transaction, litigation, debt extinguishment costs, other			2.8				2.4				12.1				4.0
		Joint ventures – currency, other			0.0				(0.4	)			0.1				(0.7	)
		Non-cash gain on sale of non-depreciable real estate, net of non-controlling interests and foreign currency			(4.8	)			(1.9	)			(4.9	)			(0.2	)
		Non-cash gain on sale and change in control of interests, net			(4.0	)			0.0				(4.0	)			(1.1	)
		Non-cash write-off of preferred share original issuance costs			0.0				0.0				1.9				5.2
					(4.6	)			0.1				29.4				9.8
(10)		Outstanding per share information:
		Common shares (at quarter end)			360.2				324.1				360.2				324.1
		OP units (at quarter end)			1.4				0.4				1.4				0.4
		Total shares and units (at quarter end)			361.6				324.5				361.6				324.5
		Weighted average shares and units – Basic – EPS			358.0				318.2				357.8				316.1
		Assumed conversion of dilutive securities			0.5				0.0				0.5				0.0
		Weighted average shares and units – Diluted – EPS			358.5				318.2				358.3				316.1
		Weighted average shares and units – Basic – FFO & OFFO			361.0				320.6				360.2				318.7
		Assumed conversion of dilutive securities			0.5				0.5				0.5				0.5
		Weighted average shares and units – Diluted – FFO & OFFO			361.5				321.1				360.7				319.2
		Earnings per common share – Basic		$	0.17			$	(0.02	)		$	0.30			$	(0.14	)
		Earnings per common share – Diluted		$	0.17			$	(0.02	)		$	0.30			$	(0.14	)
		FFO per share – Basic		$	0.31			$	0.28			$	0.77			$	0.79
		FFO per share – Diluted		$	0.31			$	0.28			$	0.77			$	0.79
		Operating FFO per share – Diluted		$	0.29			$	0.28			$	0.85			$	0.82
		Common stock dividends declared, per share		$	0.155			$	0.135			$	0.465			$	0.405
(11)		Intangible assets, net (at quarter and year end)											428.1				409.6
(12)		Below-market leases, net (at quarter and year end)											139.6				123.9
Additional financial information:
		Capital expenditures (DDR share):
		Leasing		$	9.8			$	9.2			$	30.5			$	29.5
		Maintenance – total			6.0				2.9				9.2				5.4
		Maintenance PSF of owned GLA – non reimbursable											0.16				0.10
		Miscellaneous (DDR share):
		Est. value of land owned adjacent to existing centers (at 12/31/13)										$	35.0
		Cost basis of headquarters (non-income producing, at quarter end)											40.0

 

9

---

DDR Corp.

Unconsolidated Joint Ventures

 

$, GLA in millions																				Gross
				DDR				Operating				Owned								Book
		Partner		Own %				Properties				GLA				ABR				Value				Debt
DDRTC Core Retail Fund		TIAA-CREF			15	%			26				8.4			$	103.6			$	1,544.5			$	815.0
DDR Domestic Retail Fund I		Various			20	%			57				8.0				89.1				1,401.9				920.3
DDR-SAU Retail Fund		State of Utah			20	%			27				2.4				25.4				311.4				177.7
DDR Markaz II		Kuwait Financial Centre			20	%			11				1.4				15.1				186.5				135.4
BRE DDR Retail Holdings I		Blackstone Real Estate Partners VII			5	%			13				1.9				17.8				160.1				110.8
Other		Various			Various				13				2.0				20.1				246.5				141.0
Coventry II (1)		Coventry II Fund			10% - 20%				21				3.1				29.6				372.0				272.3
Total									168				27.2			$	300.7			$	4,222.9			$	2,572.5

 

(1)	Includes 18 assets in which the Company does not have an economic interest.

 

10

---

DDR Corp.

Joint Venture Income Statement

 

		At 100%								At DDR Share
		9M14				3Q14				3Q14
Revenues:
Minimum rents (1)		$	287.0			$	87.5			$	15.7
Percentage rent			1.1				0.3				0.1
Recoveries			72.6				24.1				4.4
Other revenues			31.8				8.1				1.6
			392.5				120.0				21.8
Expenses:
Operating and maintenance			94.3				25.5				4.2
Real estate taxes			43.5				14.5				2.7
			137.8				40.0				6.9
Net operating income			254.7				80.0				14.9
Other income (expense):
Interest expense (2)			(141.8	)			(41.8	)			(6.5	)
Depreciation and amortization			(119.6	)			(35.6	)			(5.7	)
Impairment charges			(11.7	)			(11.1	)			(0.8	)
Tax expense			(6.6	)			0.0				0.0
Other expense, net			(3.0	)			(0.2	)			0.0
			(282.7	)			(88.7	)			(13.0	)
(Loss) income from continuing operations			(28.0	)			(8.7	)			1.9
Loss from discontinued operations			(0.8	)			0.0				0.0
Gain on disposition of discontinued operations, net			28.2				4.7				0.9
Gain on disposition of real estate, net			3.8				3.8				0.5
Net income (loss)			3.2				(0.2	)			3.3
Loss attributable to non-controlling interests			(2.0	)			0.0				0.0
Net income (loss) attributable to unconsolidated joint ventures			1.2				(0.2	)			3.3
Depreciation and amortization of real estate investments			118.0				35.5				5.7
Impairment of depreciable real estate			11.7				11.1				0.8
Gain on disposition of depreciable real estate, net			(31.9	)			(8.5	)			(1.4	)
Funds From Operations:		$	99.0			$	37.9			$	8.4
Net income at DDR ownership interests		$	9.5			$	3.3			$	3.3
Basis differences			0.7				0.3				0.3
Equity in net income of joint ventures			10.2				3.6				3.6
FFO at DDR's ownership interests		$	24.5			$	8.4
Operating FFO at DDR's ownership interests		$	24.6			$	8.4
(1)       Straight-line rent, net			2.4				0.3				0.0
(2)       Non-cash interest expense			(2.9	)			(1.0	)			(0.1	)

 

11

---

DDR Corp.

Joint Venture Balance Sheet (1)

 

		At 100%
		3Q14				4Q13
Land		$	1,080.1			$	1,275.2
Buildings			2,917.6				3,940.8
Fixtures and tenant improvements			168.6				266.9
			4,166.3				5,482.9
Less: Accumulated depreciation			(814.4	)			(839.9	)
			3,351.9				4,643.0
Land held for development and construction in progress			56.7				116.1
Real estate, net			3,408.6				4,759.1
Cash and restricted cash (2)			95.8				282.9
Receivables, including straight-line rent, net			68.9				101.0
Other assets, net			97.9				196.6
			3,671.2				5,339.6
Mortgage debt			2,572.5				3,282.6
Notes and accrued interest payable to DDR			142.5				127.7
Other liabilities			142.5				245.4
			2,857.5				3,655.7
Redeemable preferred equity			38.6				71.8
Accumulated equity			775.1				1,612.1
		$	3,671.2			$	5,339.6
		At DDR Share
		3Q14				4Q13
Land		$	193.5			$	234.1
Buildings			537.3				800.8
Fixtures and tenant improvements			31.0				64.4
			761.8				1,099.3
Less: Accumulated depreciation			(158.2	)			(174.5	)
			603.6				924.8
Land held for development and construction in progress			5.9				25.4
Real estate, net			609.5				950.2
Cash and restricted cash			18.8				81.0
Receivables, including straight-line rent, net			14.8				27.5
Other assets, net (3)			14.5				32.3
Disproportionate share of equity (4)			34.6				63.4
			692.2				1,154.4
Mortgage debt (5) (6)			479.4				630.1
Notes and accrued interest payable to DDR			14.6				13.0
Other liabilities			24.4				57.2
			518.4				700.3
Redeemable preferred equity			38.6				71.8
			557.0				772.1
Accumulated equity			137.3				387.0
Disproportionate share of equity (4)			(2.1	)			(4.7	)
		$	692.2			$	1,154.4
(1)       Exchange rate of BRL / USD at year end 2013			N/A				2.35
(2)       Amount attributable to SSB BV Sarl at year end 2013			N/A				191.9
(3)       Intangible assets at DDR share			6.2				12.1
(4)       Adjustments represent promoted equity and minority interests
(5)       Fair market value of debt adjustment at DDR's share			0.1				0.6
(6)       Non-recourse mortgage debt with a zero basis at DDR's share		$	18.8			$	20.9

 

12

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DDR Corp.

Transactions

 

$ in millions, GLA in thousands
				DDR				Total				At 100%								At DDR Share
Date		Location		Own. %				GLA				Price				Debt				Price				Debt				Anchors
Acquisitions
4/14		Colorado Springs, CO			100	%			225.1			$	30.6			$	12.9			$	30.6			$	12.9			Natural Grocers, Ross Dress for Less, PetSmart, Golfsmith, 24 Hour Fitness, Sports Authority
5/14		Cincinnati, OH			100	%			429.7				29.5				0.0				29.5				0.0			Costco, Target, Barnes & Noble, Best Buy, Michaels
5/14		Sacramento, CA			100	%			275.2				86.3				0.0				86.3				0.0			REI, Bed Bath & Beyond, buybuy Baby, Cost Plus World Market, Macy's Furniture Gallery
6/14		Chicago, IL			100	%			240.1				118.4				35.5				118.4				35.5			Nordstrom Rack, Dick's Sporting Goods, T.J. Maxx, Burlington
8/14		Philadelphia, PA			100	%			167.7				31.5				0.0				31.5				0.0			Bed Bath & Beyond, Stein Mart, PetSmart, AFC Fitness
9/14		Portfolio of 7 former Blackstone Assets (1)			100	%			2,288.1				397.2				205.3				377.3				205.3			Target, Walmart, Wegmans, Kohl's, Dick's Sporting Goods, T.J. Maxx, Ross Dress For Less, Bed Bath & Beyond
									3,625.9			$	693.5			$	253.7			$	673.6			$	253.7
Dispositions
1/14		Norcross, GA			100	%			83.4			$	10.0			$	0.0			$	10.0			$	0.0			Ingles
1/14		Tonawanda, NY			100	%			121.8				5.0				0.0				5.0				0.0			Best Fitness
1/14		Camp Hill, PA			100	%			62.9				3.0				0.0				3.0				0.0			Michaels
1/14		Hagerstown, MD			100	%			89.9				12.7				0.0				12.7				0.0			Hobby Lobby
2/14		Longview, TX			20	%			40.5				3.9				3.7				0.8				0.7			—
2/14		Charleston, SC			100	%			236.3				16.0				0.0				16.0				0.0			Home Décor Liquidators, Northern Tool
2/14		Fenton, MO			100	%			100.4				10.3				0.0				10.3				0.0			Aldi
2/14		Riverdale, UT			93	%			427.8				54.3				0.0				50.5				0.0			Best Buy, Gordman's, Jo-Ann
3/14		Victor, NY			100	%			55.9				5.5				0.0				5.5				0.0			—
3/14		Greensboro, NC			100	%			151.4				7.2				0.0				7.2				0.0			Food Lion, Staples
3/14		San Antonio, TX			20	%			230.7				49.7				20.0				9.9				4.0			Ross Dress for Less, PetSmart, Office Depot
3/14		Goodlettsville, TN			20	%			84.4				7.4				6.4				1.5				1.3			Kroger
3/14		Oxford, MS			20	%			71.9				4.7				0.0				0.9				0.0			Kroger
4/14		St. John, MO			100	%			94.2				12.8				0.0				12.8				0.0			Shop 'N Save
4/14		Dunkirk, NY			100	%			10.9				1.4				0.0				1.4				0.0			—
4/14		Houston, TX			100	%			131.6				14.7				0.0				14.7				0.0			Lowe's
4/14		Erie, PA			100	%			10.9				1.1				0.0				1.1				0.0			—
4/14		Cheektowaga, NY			5	%			170.5				3.3				0.0				0.2				0.0			—
5/14		Olympia, WA			100	%			35.8				3.7				0.0				3.7				0.0			Big Lots
5/14		Highland Ranch, CO			100	%			43.5				4.8				0.0				4.8				0.0			Savers
5/14		Orlando, FL			20	%			52.0				1.2				1.9				0.2				0.4			—
6/14		Lake Wales, FL			20	%			116.0				17.9				0.0				3.6				0.0			Publix
6/14		Davie, FL			20	%			70.3				11.6				5.9				2.3				1.2			Publix
6/14		Westland, MI			100	%			13.9				3.1				0.0				3.1				0.0			—
7/14		Worcester, MA			100	%			107.9				3.2				0.0				3.2				0.0			—
7/14		Lakeland, FL			100	%			77.6				7.5				0.0				7.5				0.0			Bealls
8/14		Starkville, MS			100	%			133.7				9.2				0.0				9.2				0.0			JCPenney, Kroger
9/14		Boiling Springs, SC			100	%			102.3				5.8				0.0				5.8				0.0			Ingles
9/14		Utah Portfolio			100	%			1,618.8				222.7				0.0				222.7				0.0			Walmart, Dick’s Sporting Goods, Babies "R" Us, Bed Bath & Beyond, Jo-Ann
		Land sales							0.0				30.1				0.0				23.6				0.0			—
Total Dispositions									4,547.2			$	543.8			$	37.9			$	453.2			$	7.6
Total Dispositions - Q3 2014									2,040.3			$	267.3			$	0.0			$	260.7			$	0.0
JV Interest Disposition (SSB) - Q2 2014												$	409.8

 

(1)	DDR acquired its partner's 95% ownership interest in these assets.

 

13

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DDR Corp.

Developments

 

$ in millions, GLA in thousands		At Quarter End												YTD Activity
														Net				Placed
		Land				CIP				Total				Spend				in Service
Consolidated
Ground up Projects in Progress		$	35.6			$	67.9			$	103.5			$	40.5			$	101.3
Land Held for Development (1)			107.5				55.6				163.1				(13.9	)			0.0
Substantially Completed Pending Lease Up			26.0				34.0				60.0				(0.1	)			0.1
Redevelopment Projects			31.2				86.0				117.2				82.0				56.3
Leasing Capital Expenditures			0.0				6.0				6.0				28.1				26.6
		$	200.3			$	249.5			$	449.8			$	136.6			$	184.3
Unconsolidated at 100%
Land Held for Development		$	50.2			$	4.5			$	54.7			$	1.7			$	0.0
Redevelopment Projects			0.0				0.7				0.7				8.4				8.2
Leasing Capital Expenditures			0.0				1.3				1.3				14.2				14.3
		$	50.2			$	6.5			$	56.7			$	24.3			$	22.5

 

		Estimated
		Anchor				Total				Owned				Net				Incurred				Placed
		Opening				GLA (2)				GLA (2)				Cost (3)				to Date				in Service				Anchors
Development
Chicago, IL			2Q14				240.1				240.1			$	118.4			$	115.9			$	107.2			Dick's Sporting Goods, Nordstrom Rack, T.J. Maxx
Orlando, FL			4Q15				402.9				367.1				100.8				28.0				0.0			Epic Theater
Seabrook, NH			2Q14				368.4				173.2				89.5				76.9				49.6			Walmart, Dick's Sporting Goods, PetSmart, Michaels, Ulta
New Haven, CT			4Q15				130.2				130.2				62.7				25.1				0.0
Kansas City, KS			3Q14				419.0				60.0				20.2				15.9				1.5			IKEA, Hobby Lobby
							1,560.6				970.6			$	391.6			$	261.8			$	158.3
Redevelopment
San Juan, PR							88.5				88.5			$	27.7			$	26.7			$	21.5			Food court, Victoria's Secret, Aeropostale
Tampa, FL							126.9				119.9				17.4				11.8				9.5			Ross Dress for Less, Marshalls, Michaels, PetSmart, Five Below
Phoenix, AZ							203.6				203.6				14.4				9.3				7.9			Sprouts, Michaels, Marshalls, PetSmart
Richmond, VA							129.5				62.8				13.7				4.6				0.5			Martin's, Petco
Fajardo, PR							36.3				36.3				8.8				8.2				8.0			PetSmart, Shoe Carnival
Columbia, SC							47.1				47.1				8.6				5.8				0.2			Nordstrom Rack
Chicago, IL							12.7				12.7				5.0				4.8				1.5			Trader Joe's
Tampa, FL							35.7				35.7				2.8				1.9				0.3			Nordstrom Rack
							680.3				606.6			$	98.4			$	73.1			$	49.4

 

		DDR's				Total				DDR Share						DDR's				Total				DDR Share
Land Held (1)		Own. %				Acreage				Acreage				Land Held (1)		Own. %				Acreage				Acreage
Chicago, IL			50	%			106				53			Toronto, CAN			50	%			31				15
Gulfport, MS			100	%			86				86			Toronto, CAN			50	%			29				14
Ukiah, CA			50	%			66				33			Isabela, PR			80	%			11				9
Raleigh, NC			100	%			38				38

 

(1)	Basis at DDR share is $131.5 million.

(2)	Includes only the expansion or redevelopment GLA.

(3)	Includes receipts and expected future reductions from land sales and reimbursements.

 

14

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DDR Corp.

Portfolio Summary

$, GLA in millions, except PSF

 

		Total				Prime				Puerto Rico
At 100%
Operating Centers			385				283				15
Owned GLA			75.7				64.8				4.1
Ground Lease GLA			5.9				5.5				0.7
Additional Unowned			24.7				22.4				0.3
Base Rent PSF		$	13.65			$	14.14				$19.62
Leased Rate			95.6	%			96.3	%			96.0	%
Commenced Rate			94.4	%			95.5	%			95.6	%
Metrics at DDR Share
Owned GLA			56.8				50.3				4.1
Ground Lease GLA			5.0				4.8				0.7
Base Rent PSF		$	13.98			$	14.34				$19.62
Leased Rate			96.0	%			96.6	%			96.0	%
% of NOI			—				93.8	%			13.5	%

 

		Same Store NOI at 100%														Same Store NOI at DDR Share
		3Q14				3Q13				Change						3Q14				3Q13				Change
Same Store Leased Rate			95.5	%			95.3	%			0.2	%					96.0	%			96.0	%			0.0	%
Revenues:
Base Rents		$	218.0			$	212.7				2.5	%				$	165.1			$	160.9				2.6	%
Recoveries			71.8				69.3				3.5	%					56.4				54.7				3.1	%
Other			5.4				5.2				3.6	%					4.5				4.4				2.7	%
			295.2				287.2				2.7	%					226.0				220.0				2.7	%
Expenses:
Operating			(51.3	)			(50.5	)			1.5	%					(39.1	)			(38.5	)			1.3	%
Real Estate Taxes			(42.0	)			(40.8	)			3.1	%					(32.8	)			(31.9	)			2.8	%
			(93.3	)			(91.3	)			2.2	%					(71.8	)			(70.4	)			2.0	%
Same Store NOI		$	201.9			$	195.9				3.1	%				$	154.2			$	149.6				3.1	%
Non-Same Store NOI (1)			48.0				55.3										30.3				8.9
		$	249.9			$	251.2									$	184.5			$	158.5
Same Store NOI Reconciliation to Income Statement
Consolidated at 100%:														Consolidated at DDR Share:
Revenues		$	243.0			$	196.1							DDR Share		$	170.0			$	136.3
Expenses			(73.0	)			(59.8	)						JV Share			(0.4	)			(0.4	)
		$	170.0			$	136.3									$	169.6			$	135.9
Unconsolidated at 100%:														Unconsolidated at DDR Share:
Revenues		$	119.9			$	176.0							Revenues		$	21.8			$	32.6
Expenses			(40.0	)			(61.1	)						Expenses			(6.9	)			(10.0	)
		$	79.9			$	114.9									$	14.9			$	22.6
Total		$	249.9			$	251.2							Total		$	184.5			$	158.5

 

(1)	Brazil is excluded from the same-store pool.

 

15

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DDR Corp.

Portfolio Detail (at 100%)

 

Lease Expiration Schedule
		Greater than 10,000 SF																Less than 10,000 SF
						ABR				Rent				% of								ABR				Rent				% of
Year		Leases				(mil)				PSF				ABR				Leases				(mil)				PSF				ABR
2014			12			$	2.9			$	10.51				0.3	%			190			$	9.5			$	20.72				1.0	%
2015			134				42.5				10.44				4.5	%			855				46.8				21.84				5.0	%
2016			218				74.2				11.18				7.9	%			909				54.1				22.26				5.8	%
2017			217				82.9				10.68				8.8	%			853				50.1				22.09				5.3	%
2018			214				76.5				11.09				8.2	%			796				55.4				23.36				5.9	%
2019			215				84.9				10.79				9.0	%			537				36.2				22.76				3.9	%
2020			131				46.7				11.08				5.0	%			166				13.0				22.34				1.4	%
2021			102				41.9				10.55				4.5	%			167				13.9				25.06				1.5	%
2022			98				42.0				11.04				4.5	%			189				16.4				25.11				1.7	%
2023			103				38.1				10.82				4.1	%			175				16.5				23.02				1.8	%
2014-2023			1,444			$	532.6			$	10.82				56.8	%			4,837			$	311.9			$	22.86				33.2	%
Total Rent Roll			1,587			$	598.0			$	11.07				63.7	%			5,234			$	340.2			$	22.67				36.3	%

 

 

16

---

DDR Corp.

Leasing Summary

3Q14

GLA in thousands

 

										New				Prior
		# of								Rent				Rent								Wtd Avg				TA
		Leases				GLA				PSF				PSF				Spread				Term (Yrs)				PSF
Current Quarter at 100%
New Leases
Comparable			79				349			$	19.12			$	15.91				20.2	%			8.4			$	18.25
Non-comp			69				402				15.57				N/A				N/A				11.1				13.46
New Leases - Total			148				751				17.22				N/A				20.2	%			9.8				15.71
Renewals			194				1,959				13.91				12.88				8.0	%			5.6				0.34
Total			342				2,710			$	14.83			$	13.34				10.2	%			6.8			$	4.85
Current Quarter at DDR Share
New Leases
Comparable			79				286			$	20.00			$	16.18				23.6	%			8.7			$	20.67
Non-comp			69				291				17.51				N/A				N/A				11.2				8.22
New Leases - Total			148				577				18.74				N/A				23.6	%			9.9				14.46
Renewals			194				1,610				14.05				12.98				8.2	%			5.8				0.40
Total			342				2,187			$	15.28			$	13.46				11.0	%			6.9			$	4.35

 

Net Effective Rents		New				Renewals
		3Q14				3Q14
Square footage			751				1,959
Base rent		$	18.54			$	14.04
Tenant allowance			(1.61	)			(0.06	)
Landlord work			(1.09	)			0.00
Third party leasing commissions			(0.18	)			0.00
Equivalent net effective rent		$	15.66			$	13.98
Weighted average term in years			9.5				5.4

 

17

---

DDR Corp.

Leasing Summary

9M14

GLA in thousands

 

										New				Prior
		# of								Rent				Rent								Wtd Avg				TA
		Leases				GLA				PSF				PSF				Spread				Term (Yrs)				PSF
YTD at 100%
New Leases
Comparable			214				936			$	17.75			$	15.15				17.2	%			8.3			$	17.03
Non-comp			222				1,295				15.05				N/A				N/A				10.0				15.10
New Leases - Total			436				2,231				16.18				N/A				17.2	%			9.3				15.87
Renewals			648				6,606				13.62				12.70				7.2	%			5.6				0.21
Total			1,084				8,837			$	14.27			$	13.01				8.7	%			6.5			$	4.61
YTD at DDR Share
New Leases
Comparable			214				753			$	18.14			$	14.98				21.1	%			8.5			$	19.36
Non-comp			222				938				16.39				N/A				N/A				10.5				14.27
New Leases - Total			436				1,691				17.21				N/A				21.1	%			9.6				16.52
Renewals			648				4,818				14.18				13.16				7.8	%			5.6				0.21
Total			1,084				6,509			$	14.96			$	13.41				9.8	%			6.7			$	4.93

 

Net Effective Rents		New				Renewals
		9M14				9M14
Square footage			2,231				6,606
Base rent		$	17.15			$	13.76
Tenant allowance			(1.71	)			(0.04	)
Landlord work			(1.45	)			0.00
Third party leasing commissions			(0.20	)			0.00
Equivalent net effective rent		$	13.79			$	13.72
Weighted average term in years			9.0				5.6

 

18

---

DDR Corp.

Top 50 Tenants

$, GLA in millions

 

				# of Units								Base Rent												GLA												Credit Ratings
		Tenant		Owned				Total				at 100%				% of Total				Pro Rata				at 100%				% of Total				Pro Rata				(S&P/Moody's/Fitch)
1		TJX Companies (1)			95				96			$	31.9				3.2	%		$	26.2				3.0				3.7	%			2.4			A+ / A3 / NR
2		Bed Bath & Beyond (2)			78				79				27.8				2.8	%			22.5				2.2				2.7	%			1.7			A- / Baa1 / NR
3		Walmart (3)			28				68				27.1				2.7	%			24.8				4.3				5.3	%			4.0			AA / Aa2 / AA
4		PetSmart			84				85				25.7				2.6	%			21.1				1.8				2.2	%			1.4			BB+ / NR / NR
5		Kohl's			36				45				22.6				2.3	%			17.4				3.2				3.9	%			2.5			BBB+ / Baa1 / BBB+
6		Dick's Sporting Goods (4)			32				32				19.0				1.9	%			13.5				1.5				1.8	%			1.1			NR
7		Best Buy			31				36				18.7				1.9	%			15.5				1.3				1.6	%			1.1			BB / Baa2 / BB-
8		Ross Stores (5)			58				58				18.5				1.9	%			13.7				1.7				2.1	%			1.2			A- / NR / NR
9		Michaels			62				63				17.7				1.8	%			13.9				1.4				1.7	%			1.1			NR / B3 / NR
10		Office Depot (6)			60				63				17.0				1.7	%			13.5				1.4				1.7	%			1.1			B- / B2 / NR
11		AMC Theatres			9				10				16.4				1.7	%			11.5				0.7				0.9	%			0.5			B / NR / NR
12		Publix			37				40				15.4				1.6	%			4.0				1.8				2.2	%			0.5			NR
13		Gap (7)			58				58				14.8				1.5	%			12.4				0.9				1.1	%			0.8			BBB- / Baa3 / BBB-
14		Kroger (8)			31				32				13.5				1.4	%			5.5				1.6				2.0	%			0.6			BBB / Baa2 / BBB
15		Ascena (9)			104				104				11.5				1.2	%			9.1				0.6				0.7	%			0.5			NR
16		Lowe's			13				30				11.1				1.1	%			10.4				1.7				2.1	%			1.6			A- / A3 / NR
17		Jo-Ann			36				36				10.7				1.1	%			8.9				1.0				1.2	%			0.8			B / Caa1 / NR
18		Regal Cinemas			12				13				10.5				1.1	%			8.1				0.7				0.9	%			0.6			B+ / B1 / B+
19		Ulta			43				44				10.3				1.0	%			8.4				0.5				0.6	%			0.4			NR
20		Barnes & Noble			24				26				10.0				1.0	%			8.3				0.6				0.7	%			0.5			NR
21		Cinemark			12				12				9.9				1.0	%			8.0				0.7				0.9	%			0.5			BB- / NR / NR
22		Sports Authority			17				18				9.5				1.0	%			9.5				0.7				0.9	%			0.7			NR / B3 / NR
23		Home Depot			10				37				9.2				0.9	%			9.0				1.1				1.3	%			1.0			A / A2 / A-
24		Dollar Tree Stores			84				86				8.9				0.9	%			6.4				0.8				1.0	%			0.6			NR
25		Toys "R" Us (10)			25				29				8.7				0.9	%			7.8				1.0				1.2	%			0.9			B- / B3 / CCC
26		Tops Markets (11)			12				12				8.7				0.9	%			4.5				0.8				1.0	%			0.4			B / NR / NR
27		Staples			30				31				8.5				0.9	%			6.5				0.6				0.7	%			0.5			BBB- / Baa2 / BBB-
28		Petco			33				35				8.1				0.8	%			6.7				0.5				0.6	%			0.4			B / B2 / NR
29		Party City			40				41				7.8				0.8	%			6.2				0.5				0.6	%			0.4			B / B3 / NR
30		DSW			20				20				7.6				0.8	%			6.1				0.5				0.6	%			0.4			NR
31		Pier 1 Imports			34				37				7.1				0.7	%			5.5				0.3				0.4	%			0.3			NR
32		Hobby Lobby			16				19				6.3				0.6	%			4.6				0.9				1.1	%			0.7			NR
33		hhgregg			19				19				6.1				0.6	%			4.9				0.6				0.7	%			0.5			NR
34		Sears (12)			15				16				5.7				0.6	%			4.5				1.4				1.7	%			1.1			CCC+ / Caa1 / CCC
35		Burlington			11				11				5.6				0.6	%			5.0				0.9				1.1	%			0.7			B / B2 / NR
36		LA Fitness			9				10				5.6				0.6	%			5.3				0.4				0.5	%			0.4			NR
37		Nordstrom Rack			8				9				5.4				0.5	%			4.4				0.3				0.4	%			0.2			A- / Baa1 / A-
38		Whole Foods			5				5				5.3				0.5	%			4.6				0.3				0.4	%			0.2			BBB- / NR / NR
39		Famous Footwear			38				38				5.2				0.5	%			4.3				0.3				0.4	%			0.2			B+ / B1 / BB+
40		Five Below			39				39				5.2				0.5	%			4.1				0.3				0.4	%			0.3			NR
41		Beall's			17				17				5.1				0.5	%			2.6				0.7				0.9	%			0.4			NR
42		Royal Ahold (13)			7				7				4.9				0.5	%			2.8				0.4				0.5	%			0.2			BBB / Baa3 / BBB
43		Gamestop			97				97				4.7				0.5	%			3.8				0.2				0.2	%			0.1			NR
44		Shoe Carnival			30				30				4.7				0.5	%			3.2				0.4				0.5	%			0.2			NR
45		AT&T			49				49				4.6				0.5	%			4.0				0.1				0.1	%			0.1			A- / A3 / A
46		Panera			34				34				4.5				0.5	%			3.4				0.2				0.2	%			0.1			NR
47		Rainbow Apparel (14)			38				38				4.4				0.4	%			4.0				0.2				0.2	%			0.2			NR
48		Stein Mart			17				17				4.3				0.4	%			2.6				0.6				0.7	%			0.3			NR
49		Giant Eagle			5				5				4.2				0.4	%			3.1				0.4				0.5	%			0.3			NR
50		Hallmark			45				45				4.1				0.4	%			3.0				0.2				0.2	%			0.2			NR
		Top 50 Total			1,747				1,881			$	540.1				54.4	%		$	419.1				48.2				59.1	%			36.9
		Total Portfolio										$	993.1				100.0	%		$	771.0				81.6				100.0	%			61.8

 

 

19

---

DDR Corp.

Capital Structure

$, shares and units in millions, except per share

 

		September 30, 2014								September 30, 2013
		Amount				% of Total				Amount				% of Total
Capital Structure
Common Shares Equity		$	6,050.4				52	%		$	5,097.8				50	%
Perpetual Preferred Stock			350.0				3	%			405.0				4	%
			6,400.4				55	%			5,502.8				54	%
Unsecured Credit Facilities			23.5				0	%			42.9				0	%
Unsecured Term Loan			350.0				3	%			350.0				4	%
Unsecured Public Debt			2,775.8				24	%			2,477.4				25	%
Secured Term Loan			400.0				3	%			400.0				4	%
Fixed Rate Mortgage Debt			1,568.6				14	%			1,237.2				12	%
Variable Rate Mortgage Debt			95.5				1	%			97.1				1	%
			5,213.4				45	%			4,604.6				46	%
Total		$	11,613.8				100	%		$	10,107.4				100	%
Capital Structure Detail
Debt to Market Capitalization			44.9	%							45.6	%
Common Shares Outstanding			360.2								324.1
Operating Partnership Units			1.4								0.4
Market Value per Share		$	16.73							$	15.71
Accretion on Convertible Notes (excluded above)		$	12.9							$	24.1
Partners' Share of Consolidated Debt (included above)		$	9.9							$	19.6
DDR Share of Unconsolidated Debt (excluded above)		$	479.4							$	692.8

 

Credit Ratings

Covenants

Covenant

Actual

Debt Rating

Outlook

Threshold

Covenant

Moody's

Baa2

Stable

Total Debt to Real Estate Assets Ratio

£ 65

%

49

%

S&P

BBB-

Stable

Secured Debt to Assets Ratio

£ 40

%

18

%

Fitch

BBB-

Stable

Unencumbered Assets to Unsecured Debt

³ 135

%

222

%

Fixed Charge Coverage Ratio

³ 1.5x

2.1x

 

20

---

DDR Corp.

Debt / EBITDA

 

$ in millions
		3Q14				3Q13
Consolidated
Net income (loss) to DDR		$	68.6			($	0.4	)
Impairments			1.8				9.3
Depreciation and amortization			99.5				70.0
Interest expense			58.1				54.7
Gain on change in control of interests, net			(4.0	)			0.0
Other expenses (income), net			2.8				2.5
Equity in net income of JVs			(3.6	)			(3.8	)
Income tax (benefit) expense			(0.2	)			0.4
EBITDA adjustments from discontinued operations			(53.5	)			14.4
Gain on disposition of real estate, net			(2.3	)			(1.9	)
Adjustments for non-controlling interests			(2.7	)			(0.2	)
JV FFO (at DDR share)			8.4				12.7
Other JV adjustments (at DDR share)			0.0				(0.4	)
EBITDA - current quarter			172.9				157.3
EBITDA - annualized			691.6				629.2
Consolidated debt			5,236.1				4,596.1
Partner share of consolidated debt			(9.9	)			(19.6	)
Face value adjustments			(22.7	)			8.5
Cash and restricted cash			(141.7	)			(60.3	)
Net adjusted debt		$	5,061.8			$	4,524.7
Debt / EBITDA - Consolidated (1)			7.32x				7.19x
Pro rata including JVs
EBITDA - current quarter			179.3				168.9
EBITDA - annualized			717.2				675.6
Consolidated net debt			5,061.8				4,524.7
JV debt (at DDR share)			479.4				691.5
Cash and restricted cash			(18.8	)			(97.6	)
Net adjusted debt		$	5,522.4			$	5,118.6
Debt / EBITDA - Pro rata (1)			7.70x				7.58x

 

(1)	Acquisition of partner’s interest in joint venture that owned seven assets occurred on September 30, 2014, contributing zero EBITDA for 3Q14.

 

21

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DDR Corp.

Debt Summary

 

$ in millions
		Consolidated												Unconsolidated
										Interest												Interest
		Total				Total				Rate				Total				Total				Rate
		100%				DDR Share				DDR Share				100%				DDR Share				DDR Share
Debt Composition
Unsecured Credit Facilities		$	23.5			$	23.5				2.37	%
Unsecured Term Loan			350.0				350.0				3.05	%
Unsecured Public Debt			2,762.9				2,762.9				5.26	%
Secured Term Loan			400.0				400.0				1.60	%
Fixed Rate Mortgage Loans			1,568.6				1,558.7				5.38	%		$	2,027.3			$	394.0				5.49	%
Variable Rate Mortgage Loans			95.5				95.5				2.05	%			543.9				85.3				3.61	%
Subtotal			5,200.5				5,190.6				4.79	%			2,571.2				479.3				5.16	%
Fair Market Value Adjustment			35.6				35.6								1.3				0.1
Total		$	5,236.1			$	5,226.2				4.79	%		$	2,572.5			$	479.4				5.16	%
		Scheduled				Secured				Unsecured												Interest
		Principal				Debt				Debt				Total				Total				Rate
		Payments				Maturities				Maturities				100%				Pro Rata				Pro Rata
Consolidated Maturity Schedule (1)
2014		$	8.1			$	0.0			$	0.0			$	8.1			$	8.1				0.00	%
2015			36.7				429.1				503.0				968.8				968.8				4.51	%
2016			30.7				140.1				240.0				410.8				410.8				7.99	%
2017			29.7				216.9				373.5				620.1				620.1				6.17	%
2018			22.7				487.6				382.2				892.5				892.5				3.60	%
2019			16.5				169.3				300.0				485.8				485.8				4.05	%
2020			7.3				280.2				300.0				587.5				587.5				6.11	%
2021			4.4				126.5				300.0				430.9				430.9				3.93	%
2022			0.1				42.8				450.0				492.9				483.0				4.67	%
2023 and beyond			0.0				15.4				300.0				315.4				315.4				3.23	%
Unsecured debt discount											(12.3	)			(12.3	)			(12.3	)
		$	156.2			$	1,907.9			$	3,136.4			$	5,200.5			$	5,190.6				4.79	%
Unconsolidated Maturity Schedule (1)
2014		$	2.5			$	196.6			$	0.0			$	199.1			$	35.5				6.69	%
2015			9.0				120.4				0.0				129.4				26.0				6.45	%
2016			7.6				133.1				0.0				140.7				12.4				6.00	%
2017			7.3				1,361.8				0.0				1,369.1				264.7				5.50	%
2018			4.4				143.2				0.0				147.6				29.8				4.60	%
2019			4.0				382.3				0.0				386.3				58.5				2.24	%
2020			4.2				19.9				0.0				24.1				6.2				5.25	%
2021			3.4				80.5				0.0				83.9				31.7				5.41	%
2022			2.2				0.0				0.0				2.2				0.4				0.00	%
2023 and beyond			2.4				86.4				0.0				88.8				14.1				4.43	%
Total		$	47.0			$	2,524.2			$	0.0			$	2,571.2			$	479.3				5.16	%
% of Total		Consolidated												Unconsolidated
Fixed			91.9	%											78.8	%
Variable			8.1	%											21.2	%
Recourse to DDR			69.5	%											0.0	%
Non-recourse to DDR			30.5	%											100.0	%

 

(1)	Assumes borrower extension options are exercised.

 

22

---

DDR Corp.

Consolidated Debt Detail

 

$ in millions		Balance				Balance				Maturity				Interest
		100%				DDR Share				Date (1)				Rate (2) (3)
Senior Debt:
Unsecured Revolver ($750m)		$	23.5			$	23.5				04/18				L + 115
Unsecured Revolver ($65m)			0.0				0.0				04/18				L + 115
Unsecured Term Loan ($50m)			50.0				50.0				01/17				L + 150
Unsecured Term Loan ($300m)			300.0				300.0				01/19				L + 190
Secured Term Loan ($400m)			400.0				400.0				04/18				L + 135
		$	773.5			$	773.5
Public Debt:
Unsecured Notes		$	153.0			$	153.0				05/15				5.50	%
Convertible Notes (4)			337.1				337.1				11/15				1.75	%
Unsecured Notes			239.7				239.7				03/16				9.63	%
Unsecured Notes			300.0				300.0				04/17				7.50	%
Unsecured Notes			299.0				299.0				04/18				4.75	%
Unsecured Notes			82.2				82.2				07/18				7.50	%
Unsecured Notes			298.5				298.5				09/20				7.88	%
Unsecured Notes			298.2				298.2				01/21				3.50	%
Unsecured Notes			456.8				456.8				07/22				4.63	%
Unsecured Notes			298.4				298.4				05/23				3.38	%
		$	2,762.9			$	2,762.9
Mortgage Debt:
Hamilton Commons, NJ			1.9				1.9				09/15				4.70	%
Woodfield Village Green, IL			65.6				65.6				09/15				6.40	%
Carillon Place, FL			25.7				25.7				09/15				6.40	%
Fairfax Towne Center, VA			39.0				39.0				09/15				6.40	%
Shoppers World, MA			127.9				127.9				09/15				6.40	%
Winter Garden Village, FL			104.1				104.1				10/15				6.10	%
Cumming Town Center, GA			33.8				33.8				10/15				6.10	%
Silver Spring Square, PA			38.0				38.0				10/15				6.35	%
Tops Plaza, NY			2.4				2.4				01/16				8.00	%
The Maxwell, IL			51.1				51.1				08/16				L + 285
Freedom Plaza, NY			0.9				0.9				09/16				7.85	%
Sycamore Crossing, OH			63.7				63.7				12/16				5.81	%
Falcon Ridge Town Center, CA			43.5				43.5				01/17				5.68	%
Vista Village, CA			33.2				33.2				04/17				5.71	%
Walmart Supercenter, NC			3.7				3.7				08/17				6.00	%
Connecticut Commons, CT			47.6				47.6				10/17				5.01	%
Riverdale Village, MN			26.1				26.1				10/17				5.01	%
Riverdale Village Perimeter, MN			32.7				32.7				10/17				5.01	%
Lake Brandon Village, FL			9.4				9.4				10/17				5.01	%

 

23

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DDR Corp.

Consolidated Debt Detail

 

$ in millions		Balance				Balance				Maturity				Interest
		100%				DDR Share				Date (1)				Rate (2) (3)
Shoppers World Brookfield, WI			5.9				5.9				10/17				5.01	%
Marketplace Of Brown Deer, WI			4.2				4.2				10/17				5.01	%
Brown Deer Center, WI			7.9				7.9				10/17				5.01	%
Thruway Plaza (Walmart), NY			1.7				1.7				10/17				6.78	%
Tops Plaza, NY			7.1				7.1				01/18				7.05	%
Falcon Ridge Town Center, CA			14.8				14.8				01/18				5.91	%
Walmart Supercenter, SC			3.8				3.8				01/18				6.00	%
Fortuna Center, VA			12.1				12.1				02/18				6.18	%
Johns Creek Town Center, GA			24.6				24.6				03/18				5.06	%
Southland Crossings, OH			24.6				24.6				03/18				5.06	%
The Promenade at Brentwood, MO			31.2				31.2				03/18				5.06	%
DDR Headquarters, OH			29.1				29.1				03/18				L + 105
Mohawk Commons, NY			10.3				10.3				12/18				5.75	%
Lowes, TN			4.2				4.2				01/19				7.66	%
Nassau Park Pavilion, NJ			57.0				57.0				02/19				3.40	%
Bandera Pointe, TX			24.8				24.8				02/19				3.40	%
Presidential Commons, GA			21.2				21.2				02/19				3.40	%
Plaza Cayey, PR			21.0				21.0				06/19				7.59	%
Plaza Fajardo, PR			25.2				25.2				06/19				7.59	%
Plaza Isabela, PR			22.2				22.2				06/19				7.59	%
Plaza Walmart, PR			11.8				11.8				06/19				7.59	%
Mariner Square, FL			2.7				2.7				09/19				9.75	%
Northland Square, IA			5.3				5.3				01/20				9.38	%
Plaza Rio Hondo, PR			125.7				125.7				01/20				3.95	%
Easton Marketplace, OH			50.2				50.2				01/20				3.95	%
The Fountains, FL			45.8				45.8				01/20				3.95	%
Perimeter Pointe, GA			43.3				43.3				01/20				3.95	%
Polaris Towne Center, OH			43.8				43.8				04/20				6.76	%
Chapel Hills West, CO			12.7				12.7				06/21				5.49	%
West Valley Marketplace, PA			10.3				10.3				07/21				6.95	%
Plaza Escorial, PR			74.7				74.7				07/21				3.59	%
Wrangleboro Consumer Sq, NJ			61.1				61.1				10/21				5.41	%
Chapel Hills East, CO			8.6				8.6				12/21				5.24	%
Paradise Village Gateway, AZ			30.0				20.1				01/22				4.65	%
Macedonia Commons, OH			19.5				19.5				02/22				5.71	%

 

24

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DDR Corp.

Consolidated Debt Detail

 

$ in millions		Balance				Balance				Maturity				Interest
		100%				DDR Share				Date (1)				Rate (2) (3)
Gulfport Promenade, MS			15.4				15.4				12/37				S + 41
		$	1,664.1			$	1,654.2
FMV adjustment - assumed debt			35.6				35.6
Total		$	1,699.7			$	1,689.8
Rate Type
Fixed		$	4,781.5			$	4,771.6				4.2 years				5.07	%
Variable			419.0				419.0				4.0 years				1.68	%
		$	5,200.5			$	5,190.6				4.2 years				4.79	%
Perpetual Preferred Stock
Class J		$	200.0			$	200.0				Perpetual				6.500	%
Class K			150.0				150.0				Perpetual				6.250	%
Interest Rate Swaps
Underlying Debt Hedged:		Notional Amount				Rate Hedged				Fixed Rate				Termination Date
Unsecured Term Loan		$	50.0				1 mo. LIBOR				0.56	%			6/1/15
Secured Term Loan			100.0				1 mo. LIBOR				0.53	%			7/1/15
Mortgage Portfolio			80.4				1 mo. LIBOR				2.81	%			9/1/17
Unsecured Term Loan			100.0				1 mo. LIBOR				0.88	%			1/2/18
Unsecured Term Loan			200.0				1 mo. LIBOR				1.54	%			2/1/19

 

(1)	Assumes borrower extension options are exercised.

(2)	L = LIBOR, S = SIFMA.

(3)	Does not include discounts or premiums.

(4)

May be net settled prior to November 2015 with DDR's common stock once the price rises above 125% of $14.96 at 9/30/2014. The conversion price is subject to future adjustments in the quarterly dividend. The balance is to be settled in cash. Included in this amount is a $12.9 million reduction as compared to the face value of the convertible notes.

 

25

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DDR Corp.

Unconsolidated Debt Detail

 

$ in millions		Balance				Balance				Maturity				Interest
		100%				DDR Share				Date (1)				Rate (2) (3)
DDR Domestic Retail Fund I
Village Center, WI		$	10.3			$	2.1				04/15				4.21	%
West Falls Plaza, NJ			10.0				2.0				04/15				4.21	%
52 Additional Assets			883.5				176.7				07/17				5.60	%
Heather Island, FL			4.5				0.9				02/18				3.56	%
Hilliard Rome, OH			12.0				2.4				02/18				3.56	%
		$	920.3			$	184.1
DDRTC Core Retail Fund
Pool 1 (9 assets)		$	350.2			$	52.5				03/17				5.45	%
Pool 5 (11 assets) (3)			217.0				32.6				02/19				L + 180
Pool 3 (6 assets) (3)			165.3				24.8				03/19				L + 225
Birkdale Village, NC			82.5				12.4				04/24				4.30	%
		$	815.0			$	122.3
Coventry II
Bloomfield Park, MI (4)		$	21.9			$	0.0				12/08				P + 300
DDR SM (10 assets) (4)			6.6				1.4				09/14				L + 350
DDR SM (10 assets) (4)			32.7				6.5				09/14				L + 525
Totem Lake Mall, WA (4)			27.5				5.5				06/15				L + 650
Buena Park, CA (3)			73.0				14.6				06/15				L + 625
DDR SM (7 assets) (4)			27.1				5.4				09/16				6.75	%
Christown Spectrum Mall, AZ			65.2				13.0				04/18				4.80	%
Fairplain Plaza, MI			18.3				3.7				05/23				4.85	%
		$	272.3			$	50.1
DDR-SAU Retail Fund
DDR-SAU Retail Fund (18 assets)		$	106.6			$	21.3				09/17				4.74	%
DDR-SAU Retail Fund (9 assets)			71.1				14.2				04/18				4.65	%
		$	177.7			$	35.5
Other Joint Ventures
DDR Markaz II (11 assets)		$	135.4			$	27.1				11/14				7.15	%
BRE DDR Retail Holdings I (12 Assets)			109.5				5.5				04/16				5.25	%
Lennox Town Center Limited, OH			1.0				0.5				07/17				6.44	%
Lennox Town Center Limited, OH			26.0				13.0				07/17				5.64	%
RO & SW Realty (9 assets)			19.9				5.0				10/20				5.25	%
Sun Center Limited, OH			22.5				17.8				05/21				5.99	%
RVIP IIIB, Deer Park, IL			71.6				18.4				09/21				4.84	%
		$	385.9			$	87.3

 

26

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DDR Corp.

Unconsolidated Debt Detail

 

$ in millions		Balance				Balance				Maturity				Interest
		100%				DDR Share				Date (1)				Rate (2) (3)
Subtotal		$	2,571.2			$	479.3
FMV Adjustment - Assumed Debt			1.3				0.1
Total		$	2,572.5			$	479.4
Rate Type
Fixed		$	2,027.3			$	394.0				3.2 years				5.49	%
Variable			543.9				85.3				3.1 years				3.61	%
		$	2,571.2			$	479.3				3.2 years				5.16	%

 

(1)	Assumes borrower extension options are exercised.

(2)	L = LIBOR, P = Prime

 

(3)     Loans with floor interest rates:		Floor:
DDRTC Holdings Pool 5 (11 assets)		1 mo. LIBOR of 0.25%
DDRTC Holdings Pool 3 (6 assets)		1 mo. LIBOR of 0.25%
Buena Park, CA		1 mo. LIBOR of 0.75%

 

(4)	Includes $115.8 million of non-recourse debt ($18.8 million at DDR's share) associated with joint ventures for which the Company has written its investment down to zero and is recovering no allocation of income.

 

27

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DDR Corp.

Analyst Coverage

 

Corporate Headquarters				Investor Relations
DDR Corp.				Matt Lougee
3300 Enterprise Parkway				Toll Free: (877) 225-5337
Beachwood, Ohio 44122				Main: (216) 755-5500
Website: www.ddr.com				Email: mlougee@ddr.com
Equity Research
Bank of America Merrill Lynch		Craig Schmidt		craig.schmidt@baml.com		(646) 855-3640
		Katharine Hutchins		katharine.hutchins@baml.com		(646) 855-1681
Capital One		Chris Lucas		christopher.lucas@capitalone.com		(571) 633-8151
Citigroup		Michael Bilerman		michael.bilerman@citi.com		(212) 816-1383
		Christy McElroy		christy.mcelroy@citi.com		(212) 816-6981
Cowen & Company		Jim Sullivan		james.sullivan@cowen.com		(646) 562-1380
Deutsche Bank		Vincent Chao		vincent.chao@db.com		(212) 250-6799
DISCERN		Dave Wigginton		dwigginton@discern.com		(646) 863-4177
Goldman Sachs		Andrew Rosivach		andrew.rosivach@gs.com		(212) 902-2796
		Caitlin Burrows		caitlin.burrows@gs.com		(212) 902-4736
Green Street Advisors		Cedrik Lachance		clachance@greenstreetadvisors.com		(949) 640-8780
		Jason White		jwhite@greenstreetadvisors.com		(949) 640-8780
Hilliard Lyons		Carol Kemple		ckemple@hilliard.com		(502) 588-1839
ISI Group		Steve Sakwa		ssakwa@isigrp.com		(212) 446-9462
		Samir Khanal		skhanal@isigrp.com		(212) 888-3796
Janney Montgomery Scott		Mike Gorman		mgorman@janney.com		(215) 665-6224
Jefferies and Company		Tayo Okusanya		tokusanya@jefferies.com		(212) 336-7076
J.P. Morgan		Michael Mueller		michael.w.mueller@jpmorgan.com		(212) 622-6689
KeyBanc Capital Markets		Jordan Sadler		jsadler@keybanccm.com		(917) 368-2280
		Todd Thomas		tthomas@keybanccm.com		(917) 368-2286
MLV & Co.		Paul Morgan		pmorgan@mlvco.com		(415) 325-4187
Morgan Stanley		Haendel St. Juste		haendel.stjuste@morganstanley.com		(212) 761-0071
		Catherine Klinchuch		catherine.klinchuch@morganstanley.com		(212) 296-8581
RBC Capital Markets		Rich Moore		rich.moore@rbccm.com		(440) 715-2646
Sandler O'Neill		Alex Goldfarb		agoldfarb@sandleroneill.com		(212) 466-7937
		Andrew Schaffer		aschaffer@sandleroneill.com		(212) 466-8062
SunTrust Robinson Humphrey		Ki Bin Kim		kibin.kim@suntrust.com		(212) 303-4124
UBS		Ross Nussbaum		ross.nussbaum@ubs.com		(212) 713-2484
		Jeremy Metz		jeremy.metz@ubs.com		(212) 713-2429
Wells Fargo		Jeff Donnelly		jeff.donnelly@wellsfargo.com		(617) 603-4262
		Tamara Fique		tamara.fique@wellsfargo.com		(443) 263-6568
Fixed Income Research
Barclays		Peter Troisi		peter.troisi@barclays.com		(212) 412-3695
Citigroup		Tom Cook		thomas.n.cook@citigroup.com		(212) 723-1112
J.P. Morgan		Mark Streeter		mark.streeter@jpmorgan.com		(212) 834-5086
Wells Fargo		Thierry Perrein		thierry.perrein@wachovia.com		(704) 715-8455

 

28

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DDR Corp.

Notable Accounting and Supplemental Policies

Revenues

 

•

Percentage and overage rents are recognized after the tenants’ reported sales have exceeded the applicable sales breakpoint.

 

•

Tenant reimbursements are recognized in the period in which the expenses are incurred.

 

•

Lease termination fees are recognized upon termination of a tenant’s lease when the Company has no further obligations under the lease.

General and Administrative Expenses

 

•

General and administrative expenses include certain internal leasing salaries, legal salaries and related expenses associated with the leasing of space which are charged to operations as incurred.

 

•

All internal and external acquisition costs are expensed as incurred.

 

•

The Company does not capitalize any executive officer compensation.

 

•

General and administrative expenses include executive property management compensation and related expenses. Property management services’ direct compensation is reflected in operating and maintenance expenses.

Deferred Financing Costs

 

•

Costs incurred in obtaining financing are included in deferred charges and amortized on a straight-line basis over the term of the related debt agreement; such amortization is reflected as interest expense in the consolidated statements of operations.

Real Estate

 

•

Real estate assets are stated at cost less accumulated depreciation, which, in the opinion of management, is not in excess of the individual property’s estimated undiscounted future cash flows, including estimated proceeds from disposition.

 

•

Construction in progress includes shopping center developments and significant expansions and redevelopments.

 

•

Acquisitions of a partner’s interest in an unconsolidated joint venture in which a change of control has occurred are recorded at fair value.

 

•

Depreciation and amortization are provided on a straight-line basis over the estimated useful lives of the assets as follows:

 

		Buildings		20 to 40 years
		Building Improvements		5 to 20 years
		Furniture/Fixtures/Tenant Improvements		Shorter of economic life or lease terms

 

29

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DDR Corp.

Notable Accounting and Supplemental Policies

Capitalization

 

•

Expenditures for maintenance and repairs are charged to operations as incurred. Renovations and expenditures that improve or extend the life of the asset are capitalized.

 

•

The Company capitalizes interest on funds used for the construction or expansion of shopping centers and certain construction administration costs. Capitalization of interest and administration costs ceases when construction activities are completed and the property is available for occupancy by tenants or when activities are suspended.

 

•

Interest expense and real estate taxes incurred during construction are capitalized and depreciated over the building life.

Gains on Sales of Real Estate

 

•

Gains on sales of real estate generally related to the sale of outlots and land adjacent to existing shopping centers are recognized at closing when the earnings process is deemed to be complete.

 

•

Gains or losses on the sales of operating shopping centers are generally reflected as discontinued operations.

Leasing Spreads

 

•

Leasing spreads are calculated by comparing the prior tenant’s annual base rent in the final year of the old lease to the new tenant’s annual base rent in the first year of the new lease. The reported calculation, “Comparable”, only includes deals executed within one year of the date that the prior tenant vacated. “Non-comp” deals consist of deals not executed within one year of the date the prior tenant vacated, deals which resulted in a significant difference in size, or deals for space which was vacant at acquisition.

Same Store NOI (“SSNOI”)

 

•

Excludes development, redevelopment, straight-line rental income and expenses, lease termination income, FMV of leases and provisions for uncollectible amounts and/or recoveries thereof; includes assets owned in comparable periods (15 months for quarter comparisons).

Net Effective Rents

 

•

Net effective rents are calculated as a weighted average per rentable square foot over the lease term with full consideration for all costs associated with leasing the space rather than pro rata costs. Landlord work represents property level improvements associated with the lease transactions; however, those improvements are attributed to the landlord’s property value and typically extend the life of the asset in excess of the lease term.

 

30

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ddr listed NYSE Investor Relations Department | 3300 Enterprise Parkway Beachwood, Ohio 44122 | P. 216.755.5500 | F. 216.755.1500 | www.ddr.com