##### Table of Contents



UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
 WASHINGTON, D.C. 20549
 FORM 10-Q
 þ
    
    QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
 FOR THE QUARTERLY PERIOD ENDED MARCH 31, 2009
 OR
 o
    
    TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
 COMMISSION FILE NUMBER: 001-31817
 CEDAR SHOPPING CENTERS, INC.
 (Exact name of registrant as specified in its charter)
 Maryland
    
    42-1241468(State or other jurisdiction of
    
    (I.R.S. Employerincorporation or organization)
    
    Identification No.)44 South Bayles Avenue, Port Washington, New York
    
    11050-3765(Address of principal executive offices)
    
    (Zip Code)
 (516) 767-6492  (Registrants telephone number, including area code)
 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 þ No o
 Indicate by check mark whether the registrant has submitted electronically and posted on its
corporate Web site, if any, every Interactive Data File required to be submitted and posted
pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12
months (or for such shorter period that the registrant was required to submit and post such
files). o No o
 Indicate by check mark whether the registrant is a large accelerated filer, an accelerated
filer, a non-accelerated filer, or a smaller reporting company. See the definitions of large
accelerated filer, accelerated filer, and smaller reporting company in Rule 12b-2 of the
Exchange Act. (Check one):
 Large accelerated filer o
    
    Accelerated filer þ
    
    Non-accelerated filer o
    
    Smaller reporting companyo(Do not check if a smaller reporting company)
 Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes o No þ
 Indicate the number of shares outstanding of each of the issuers classes of common stock, as of
the latest practicable date: At April 30, 2009, there were 45,062,472 shares of Common Stock,
$0.06 par value, outstanding.




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##### 



CEDAR SHOPPING CENTERS, INC.
 INDEX
 Forward-Looking Statements
    
    
    3Part I. Financial InformationItem 1. Financial StatementsConsolidated Balance Sheets  March 31, 2009 (unaudited) and
December 31, 2008
    
    
    4Consolidated Statements of Income (unaudited)  Three months
ended March 31, 2009 and 2008
    
    
    5Consolidated Statement of Equity (unaudited)  Three months
ended March 31, 2009
    
    
    6Consolidated Statements of Cash Flows (unaudited)  Three months
ended March 31, 2009 and 2008
    
    
    7Notes to Consolidated Financial Statements (unaudited) -
March 31, 2009
    
    
    8-26Item 2. Managements Discussion and Analysis of Financial Condition
And Results of Operations
    
    
    27-37Item 3. Quantitative and Qualitative Disclosures About Market Risk
    
    
    37Item 4. Controls and
Procedures
    
    
    38Part II. Other InformationItem 6. Exhibits
    
    
    40Signatures
    
    
    40EX-31EX-32




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Forward-Looking Statements
  3




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CEDAR
SHOPPING CENTERS, INC.
 
 Consolidated Balance Sheets
 March 31,
    
    
    December 31,2009
    
    
    2008(unaudited)AssetsReal estate:Land
    
    $
    394,209,000
    
    
    $
    379,780,000Buildings and improvements
    
    
    1,480,256,000
    
    
    
    1,402,198,0001,874,465,000
    
    
    
    1,781,978,000Less accumulated depreciation
    
    
    (158,418,000
    )
    
    
    (146,997,000
    )Real estate, net
    
    
    1,716,047,000
    
    
    
    1,634,981,000Land held for sale
    
    
    2,266,000
    
    
    
    2,266,000Investment in unconsolidated joint venture
    
    
    5,385,000
    
    
    
    4,976,000Cash and cash equivalents
    
    
    14,327,000
    
    
    
    8,231,000Restricted cash
    
    
    13,877,000
    
    
    
    14,004,000Rents and other receivables, net
    
    
    8,125,000
    
    
    
    5,818,000Straight-line rents receivable
    
    
    14,962,000
    
    
    
    14,322,000Other assets
    
    
    9,851,000
    
    
    
    9,403,000Deferred charges, net
    
    
    32,977,000
    
    
    
    33,127,000Total assets
    
    $
    1,817,817,000
    
    
    $
    1,727,128,000Liabilities and shareholders equityMortgage loans payable
    
    $
    758,379,000
    
    
    $
    708,983,000Secured revolving credit facilities
    
    
    336,925,000
    
    
    
    304,490,000Accounts payable and accrued expenses
    
    
    43,699,000
    
    
    
    46,548,000Unamortized intangible lease liabilities
    
    
    61,233,000
    
    
    
    61,384,000Total liabilities
    
    
    1,200,236,000
    
    
    
    1,121,405,000Limited partners interest in Operating Partnership
    
    
    14,279,000
    
    
    
    14,271,000Commitments and contingenciesEquity:Cedar Shopping Centers, Inc. shareholders equity:Preferred stock ($.01 par value, $25.00 per share
liquidation value, 12,500,000 shares authorized, 3,550,000
shares issued and outstanding)
    
    
    88,750,000
    
    
    
    88,750,000Common stock ($.06 par value, 150,000,000 shares authorized
45,062,000 and 44,468,000 shares, respectively, issued and
outstanding)
    
    
    2,704,000
    
    
    
    2,668,000Treasury stock (989,000 and 713,000 shares, respectively, at cost)
    
    
    (9,864,000
    )
    
    
    (9,175,000
    )Additional paid-in capital
    
    
    577,203,000
    
    
    
    576,083,000Cumulative distributions in excess of net income
    
    
    (128,090,000
    )
    
    
    (127,043,000
    )Accumulated other comprehensive loss
    
    
    (6,354,000
    )
    
    
    (7,256,000
    )Total Cedar Shopping Centers, Inc. shareholders equity
    
    
    524,349,000
    
    
    
    524,027,000Noncontrolling interests:Minority interests in consolidated joint ventures
    
    
    69,672,000
    
    
    
    58,150,000Limited partners interest in Operating Partnership
    
    
    9,281,000
    
    
    
    9,275,000Total noncontrolling interests
    
    
    78,953,000
    
    
    
    67,425,000Total equity
    
    
    603,302,000
    
    
    
    591,452,000Total liabilities and equity
    
    $
    1,817,817,000
    
    
    $
    1,727,128,000
  4




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CEDAR
SHOPPING CENTERS, INC.
 
 Consolidated Statements of Income
 (unaudited)
 Three months ended March 31,2009
    
    
    2008Revenues:Rents
    
    $
    36,070,000
    
    
    $
    34,380,000Expense recoveries
    
    
    10,563,000
    
    
    
    9,048,000Other
    
    
    262,000
    
    
    
    207,000Total revenues
    
    
    46,895,000
    
    
    
    43,635,000Expenses:Operating, maintenance and management
    
    
    9,301,000
    
    
    
    8,210,000Real estate and other property-related taxes
    
    
    5,371,000
    
    
    
    4,701,000General and administrative
    
    
    2,964,000
    
    
    
    2,191,000Depreciation and amortization
    
    
    12,400,000
    
    
    
    11,529,000Total expenses
    
    
    30,036,000
    
    
    
    26,631,000Operating income
    
    
    16,859,000
    
    
    
    17,004,000Non-operating income and expense:Interest expense, including amortization of
deferred financing costs
    
    
    (11,592,000
    )
    
    
    (11,384,000
    )Interest income
    
    
    14,000
    
    
    
    158,000Equity in income of unconsolidated joint venture
    
    
    259,000
    
    
    
    150,000Gain on sale of land parcel
    
    
    239,000
    
    
    
    Total non-operating income and expense
    
    
    (11,080,000
    )
    
    
    (11,076,000
    )Net income
    
    
    5,779,000
    
    
    
    5,928,000Less, net loss (income) attributable to noncontrolling interests:Minority interests in consolidated joint ventures
    
    
    354,000
    
    
    
    (706,000
    )Limited partners interest in Operating Partnership
    
    
    (180,000
    )
    
    
    (143,000
    )Total net loss (income) attributable to noncontrolling interests
    
    
    174,000
    
    
    
    (849,000
    )Net income attributable to Cedar Shopping Centers, Inc.
    
    
    5,953,000
    
    
    
    5,079,000Preferred distribution requirements
    
    
    (1,954,000
    )
    
    
    (1,967,000
    )Net income attributable to common shareholders
    
    $
    3,999,000
    
    
    $
    3,112,000Per common share (basic and diluted) attributable to common
shareholders
    
    $
    0.09
    
    
    $
    0.07Dividends to common shareholders
    
    $
    5,046,000
    
    
    $
    10,004,000Per common share
    
    $
    0.1125
    
    
    $
    0.2250Weighted average number of common shares outstanding
    
    
    44,880,000
    
    
    
    44,458,000
  5




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CEDAR SHOPPING CENTERS, INC.
 
 Consolidated Statement of Equity
 Three months ended March 31, 2009
 (unaudited)
 Cedar Shopping Centers, Inc. Shareholders
    
    
    Noncontrolling InterestsLimitedPreferred stock
    
    
    Common stock
    
    
    
    
    
    
    
    
    
    
    Cumulative
    
    
    Accumulated
    
    
    
    
    
    
    
    
    
    
    Minority
    
    
    partners$25.00
    
    
    
    
    
    
    
    
    
    
    Treasury
    
    
    Additional
    
    
    distributions
    
    
    other
    
    
    
    
    
    
    
    
    
    
    interests in
    
    
    interest inTotal
    
    
    
    
    
    
    Liquidation
    
    
    
    
    
    
    $0.06
    
    
    stock,
    
    
    paid-in
    
    
    in excess of
    
    
    comprehensive
    
    
    
    
    
    
    
    
    
    
    consolidated
    
    
    Operatingequity
    
    
    Shares
    
    
    value
    
    
    Shares
    
    
    Par value
    
    
    at cost
    
    
    capital
    
    
    net income
    
    
    (loss) income
    
    
    Total
    
    
    Total
    
    
    joint ventures
    
    
    PartnershipBalance, December 31, 2008
    
    $
    591,452,000
    
    
    
    3,550,000
    
    
    $
    88,750,000
    
    
    
    44,468,000
    
    
    $
    2,668,000
    
    
    $
    (9,175,000
    )
    
    $
    576,083,000
    
    
    $
    (127,043,000
    )
    
    $
    (7,256,000
    )
    
    $
    524,027,000
    
    
    $
    67,425,000
    
    
    $
    58,150,000
    
    
    $
    9,275,000Net income
    
    
    5,670,000
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    5,953,000
    
    
    
    
    
    
    
    5,953,000
    
    
    
    (283,000
    )
    
    
    (354,000
    )
    
    
    71,000Unrealized gain on change in fair value of cash flow hedges
    
    
    918,000
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    902,000
    
    
    
    902,000
    
    
    
    16,000
    
    
    
    
    
    
    
    16,000Total other comprehensive income
    
    
    6,588,000
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    6,855,000
    
    
    
    (267,000
    )
    
    
    (354,000
    )
    
    
    87,000Deferred compensation activity, net
    
    
    487,000
    
    
    
    
    
    
    
    
    
    
    
    594,000
    
    
    
    36,000
    
    
    
    (689,000
    )
    
    
    1,140,000
    
    
    
    
    
    
    
    
    
    
    
    487,000Preferred distribution requirements
    
    
    (1,954,000
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (1,954,000
    )
    
    
    
    
    
    
    (1,954,000
    )Distributions to common shareholders/noncontrolling
interests
    
    
    (5,135,000
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (5,046,000
    )
    
    
    
    
    
    
    (5,046,000
    )
    
    
    (89,000
    )
    
    
    
    
    
    
    (89,000
    )Reallocation adjustment of limited partners interest
    
    
    (12,000
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (20,000
    )
    
    
    
    
    
    
    
    
    
    
    (20,000
    )
    
    
    8,000
    
    
    
    
    
    
    
    8,000Contributions, net, from minority interest partners
    
    
    11,876,000
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    11,876,000
    
    
    
    11,876,000Balance, March 31, 2009
    
    $
    603,302,000
    
    
    
    3,550,000
    
    
    $
    88,750,000
    
    
    
    45,062,000
    
    
    $
    2,704,000
    
    
    $
    (9,864,000
    )
    
    $
    577,203,000
    
    
    $
    (128,090,000
    )
    
    $
    (6,354,000
    )
    
    $
    524,349,000
    
    
    $
    78,953,000
    
    
    $
    69,672,000
    
    
    $
    9,281,000
  6




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CEDAR SHOPPING CENTERS, INC.
 
 Consolidated Statements of Cash Flows
 (unaudited)
 Three months ended March 31,2009
    
    
    2008Cash flow from operating activities:Net income
    
    $
    5,779,000
    
    
    $
    5,928,000Adjustments to reconcile net income to net cash provided by operating
activities:Non-cash provisions:Equity in income of unconsolidated joint venture
    
    
    (259,000
    )
    
    
    (150,000
    )Distributions from unconsolidated joint venture
    
    
    200,000
    
    
    
    132,000Straight-line rents receivable
    
    
    (640,000
    )
    
    
    (711,000
    )Depreciation and amortization
    
    
    12,400,000
    
    
    
    11,529,000Amortization of intangible lease liabilities
    
    
    (3,416,000
    )
    
    
    (3,400,000
    )Amortization/market price adjustments relating to stock-based compensation
    
    
    (936,000
    )
    
    
    734,000Amortization of deferred financing costs
    
    
    637,000
    
    
    
    403,000Increases/decreases in operating assets and liabilities:Rents and other receivables, net
    
    
    (2,307,000
    )
    
    
    (1,509,000
    )Other
    
    
    (942,000
    )
    
    
    (272,000
    )Accounts payable and accrued expenses
    
    
    (1,446,000
    )
    
    
    (86,000
    )Net cash provided by operating activities
    
    
    9,070,000
    
    
    
    12,598,000Cash flow from investing activities:Expenditures for real estate and improvements
    
    
    (35,656,000
    )
    
    
    (29,956,000
    )Purchase of consolidated joint venture minority interests
    
    
    
    
    
    
    (17,454,000
    )Investment in unconsolidated joint venture
    
    
    (350,000
    )
    
    
    Construction escrows and other
    
    
    (397,000
    )
    
    
    (1,062,000
    )Net cash (used in) investing activities
    
    
    (36,403,000
    )
    
    
    (48,472,000
    )Cash flow from financing activities:Net advances from revolving lines of credit
    
    
    32,435,000
    
    
    
    36,300,000Proceeds from mortgage financings
    
    
    8,000,000
    
    
    
    27,500,000Mortgage repayments
    
    
    (11,520,000
    )
    
    
    (25,147,000
    )Payments/refund of deferred financing costs
    
    
    (101,000
    )
    
    
    200,000Noncontrolling interests:Contributions from consolidated joint venture minority interests, net
    
    
    11,857,000
    
    
    
    3,993,000Distributions to consolidated joint venture minority interests
    
    
    
    
    
    
    (266,000
    )Distributions to limited partners
    
    
    (227,000
    )
    
    
    (457,000
    )Preferred stock distributions
    
    
    (1,969,000
    )
    
    
    (1,970,000
    )Distributions to common shareholders
    
    
    (5,046,000
    )
    
    
    (10,004,000
    )Net cash provided by financing activities
    
    
    33,429,000
    
    
    
    30,149,000Net increase (decrease) in cash and cash equivalents
    
    
    6,096,000
    
    
    
    (5,725,000
    )Cash and cash equivalents at beginning of period
    
    
    8,231,000
    
    
    
    23,289,000Cash and cash equivalents at end of period
    
    $
    14,327,000
    
    
    $
    17,564,000
  7




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Cedar Shopping Centers, Inc.
 
 Notes to Consolidated Financial Statements
 March 31, 2009
 (unaudited)
 Note 1. Organization and Basis of Preparation
     8




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Cedar Shopping Centers, Inc.
Notes to Consolidated Financial Statements
March 31, 2009
(unaudited)
      Note 2. Summary of Significant Accounting Policies
  9




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Cedar Shopping Centers, Inc.
Notes to Consolidated Financial Statements
March 31, 2009
(unaudited)
 Real Estate Investments and Discontinued Operations
     10




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Cedar Shopping Centers, Inc.
Notes to Consolidated Financial Statements
March 31, 2009
(unaudited)
   Intangible Lease Asset/Liability
    11




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Cedar Shopping Centers, Inc.
Notes to Consolidated Financial Statements
March 31, 2009
(unaudited)
    Cash and Cash Equivalents
  Restricted Cash
  Rents and Other Receivables
  12




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Cedar Shopping Centers, Inc.
Notes to Consolidated Financial Statements
March 31, 2009
(unaudited)
   Concentration of Credit Risk
  Other Assets
  Mar 31,
    
    Dec 31,2009
    
    2008Prepaid expenses
    
    $
    4,607,000
    
    
    $
    4,643,000Deposits
    
    
    1,856,000
    
    
    
    2,795,000Other
    
    
    3,388,000
    
    
    
    1,965,000$
    9,851,000
    
    
    $
    9,403,000
 13




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Cedar Shopping Centers, Inc.
Notes to Consolidated Financial Statements
March 31, 2009
(unaudited)
 Deferred Charges, Net
  Mar 31,
    
    Dec 31,2009
    
    2008Lease origination costs (i)
    
    $
    20,076,000
    
    
    $
    19,464,000Financing costs (ii)
    
    
    10,629,000
    
    
    
    11,168,000Other
    
    
    2,272,000
    
    
    
    2,495,000$
    32,977,000
    
    
    $
    33,127,000
 
 (i)
    
    Lease origination costs include the amortized balance of intangible lease assets
resulting from purchase accounting allocations of $13,440,000 and $13,091,000, respectively.(ii)
    
    Financing costs are incurred in connection with the Companys credit facilities and
other long-term debt.  Income Taxes
  Derivative Financial Instruments
  14




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Cedar Shopping Centers, Inc.
Notes to Consolidated Financial Statements
March 31, 2009
(unaudited)
   Notional values
    
    
    
    
    
    Balance
    
    Fair valueDesignation/
    
    
    
    
    
    
    
    
    
    Mar 31,
    
    Dec 31,
    
    Expiration
    
    sheet
    
    Mar 31,
    
    Dec 31,Cash flow
    
    Derivative
    
    Count
    
    2009
    
    2008
    
    dates
    
    location
    
    2009
    
    2008Qualifying
    
    Interest rate swaps
    
    
    9
    
    
    $
    69,910,000
    
    
    $
    61,796,000
    
    
    
    2010 - 2020
    
    
    Accounts payable and  accrued expenses
    
    $
    9,623,000
    
    
    $
    10,590,000
   15




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Cedar Shopping Centers, Inc.
Notes to Consolidated Financial Statements
March 31, 2009
(unaudited)
 Amount of gain (loss)
    
    Amount of gain (loss)recognized in other
    
    recognized incomprehensive loss
    
    interest expense(effective portion)
    
    (ineffective portion)Three months ended Mar 31,
    
    Three months ended Mar 31,Derivative
    
    2009
    
    2008
    
    2009
    
    2008Interest rate swaps
    
    $
    918,000
    
    
    $
    (193,000
    )
    
    $
    24,000
    
    
    $
    
 Earnings Per Share
  Stock-Based Compensation
   16




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Cedar Shopping Centers, Inc.
Notes to Consolidated Financial Statements
March 31, 2009
(unaudited)
   17




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Cedar Shopping Centers, Inc.
Notes to Consolidated Financial Statements
March 31, 2009
(unaudited)
 Three months ended Mar 31,2009
    
    
    2008Restricted share grants
    
    
    594,000
    
    
    
    219,000Average per-share grant price
    
    $
    4.91
    
    
    $
    9.11Recorded as deferred compensation, net
    
    $
    2,917,000
    
    
    $
    2,001,000Charged to operations:Amortization relating to stock-based compensation
    
    $
    699,000
    
    
    $
    588,000Adjustments to reflect changes in market price of
Companys common stock
    
    
    (1,635,000
    )
    
    
    146,000Total charged to operations
    
    $
    (936,000
    )
    
    $
    734,000Non-vested shares:Non-vested, beginning of period
    
    
    508,000
    
    
    
    380,000Grants
    
    
    594,000
    
    
    
    219,000Vested during period
    
    
    
    
    
    
    Forfeitures
    
    
    
    
    
    
    Non-vested, end of period
    
    
    1,102,000
    
    
    
    599,000Average value of non-vested shares (based on
grant price)
    
    $
    8.30
    
    
    $
    12.58Value of shares vested during the
period (based on grant price)
    
    $
    
    
    
    $
    
    18




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##### Table of Contents



Cedar Shopping Centers, Inc.
Notes to Consolidated Financial Statements
March 31, 2009
(unaudited)
 Supplemental consolidated statement of cash flows information
 Three months ended Mar 31,2009
    
    2008Supplemental disclosure of cash activities:Interest paid
    
    $
    12,059,000
    
    
    $
    12,278,000Supplemental disclosure of non-cash activities:Additions to deferred compensation plans
    
    
    2,917,000
    
    
    
    2,001,000Issuance of non-interest-bearing purchase money mortgage (a)
    
    
    
    
    
    
    (13,851,000
    )Assumption of mortgage loans payable
    
    
    (54,565,000
    )
    
    
    Conversion of OP Units into common stock
    
    
    
    
    
    
    41,000Purchase accounting allocations:Intangible lease assets
    
    
    7,174,000
    
    
    
    1,832,000Intangible lease liabilities
    
    
    (3,265,000
    )
    
    
    (43,000
    )Net valuation (increase) in assumed mortgage loan
payable (b)
    
    
    (1,649,000
    )
    
    
    Other non-cash investing and financing activities:Accrued interest rate swap liabilities
    
    
    967,000
    
    
    
    (358,000
    )Accrued real estate improvement costs
    
    
    (629,000
    )
    
    
    (3,052,000
    )Accrued construction escrows
    
    
    1,028,000
    
    
    
    16,000Accrued financing costs and other
    
    
    (22,000
    )
    
    
    (48,000
    )Capitalization of deferred financing costs
    
    
    264,000
    
    
    
    111,000
 
 (a)
    
    A $14,575,000 non-interest-bearing mortgage was issued in connection with a purchase of land,
and was valued at a net amount of $13,851,000. This reflected a valuation decrease of $724,000 to a
market rate of 9.25% per annum(b)
    
    The net valuation (increase) in an assumed mortgage loan payable resulted from adjusting the
contract rate of interest (4.9% per annum) to a market rate of interest (6.1% per annum). Fair Value Measurements
  19




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##### Table of Contents



Cedar Shopping Centers, Inc.
Notes to Consolidated Financial Statements
March 31, 2009
(unaudited)
  
    
    Level 1  Inputs to the valuation methodology are quoted prices (unadjusted) for
identical assets or liabilities in active markets.
    
    Level 2  Inputs to the valuation methodology include quoted prices for similar
assets and liabilities in active markets, and inputs that are observable for the asset
or liability, either directly or indirectly, for substantially the full term of the
financial instrument.
    
    Level 3  Inputs to the valuation methodology are unobservable and significant to
the fair value measurement.
   Recently-Issued Accounting Pronouncements
  20




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Cedar Shopping Centers, Inc.
Notes to Consolidated Financial Statements
March 31, 2009
(unaudited)
    21




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Cedar Shopping Centers, Inc.
Notes to Consolidated Financial Statements
March 31, 2009
(unaudited)
    Note 3. Real Estate
  Joint Venture Activities
  22




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Cedar Shopping Centers, Inc.
Notes to Consolidated Financial Statements
March 31, 2009
(unaudited)
   Real Estate Pledged
  Pro Forma Financial Information (unaudited)
  23




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Cedar Shopping Centers, Inc.
Notes to Consolidated Financial Statements
March 31, 2009
(unaudited)
 Three months ended Mar 31,2009
    
    2008Revenues
    
    $
    47,662,000
    
    
    $
    46,609,000Net income attributable to common shareholders
    
    $
    4,004,000
    
    
    $
    3,129,000Per common share (basic and diluted)
    
    $
    0.09
    
    
    $
    0.07Weighted average number of common shares outstanding
    
    
    44,880,000
    
    
    
    44,458,000
 Note 4. Mortgage Loans Payable and Secured Revolving Credit Facilities
  At March 31, 2009
    
    At December 31, 2008Interest rates
    
    
    
    
    
    
    Interest ratesBalance
    
    
    Weighted
    
    
    
    
    
    Balance
    
    
    WeightedDescription
    
    outstanding
    
    
    average
    
    Range
    
    outstanding
    
    
    average
    
    RangeFixed-rate mortgages
    
    $
    700,198,000
    
    
    
    
    5.8
    %
    
    
    4.8% - 8.5
    %
    
    $
    655,681,000
    
    
    
    
    5.8
    %
    
    
    4.8% - 8.5
    %Variable-rate mortgages
    
    
    58,181,000
    
    
    
    
    3.9
    %
    
    
    2.5% - 5.9
    %
    
    
    53,302,000
    
    
    
    
    4.4
    %
    
    
    2.5% - 5.9
    %Total property-specific mortgages
    
    
    758,379,000
    
    
    
    
    5.6
    %
    
    
    
    
    
    
    708,983,000
    
    
    
    
    5.7
    %Stabilized property credit facility
    
    
    276,035,000
    
    
    
    
    1.8
    %
    
    
    
    
    
    
    250,190,000
    
    
    
    
    2.7
    %Development property credit
facility
    
    
    60,890,000
    
    
    
    
    2.8
    %
    
    
    
    
    
    
    54,300,000
    
    
    
    
    3.4
    %$
    1,095,304,000
    
    
    
    
    4.5
    %
    
    
    
    
    
    $
    1,013,473,000
    
    
    
    
    4.8
    %
 Mortgage loans payable
   24




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Cedar Shopping Centers, Inc.
Notes to Consolidated Financial Statements
March 31, 2009
(unaudited)
  Secured Revolving Stabilized Property Credit Facility
   Secured Revolving Development Property Credit Facility
  25




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Cedar Shopping Centers, Inc.
Notes to Consolidated Financial Statements
March 31, 2009
(unaudited)
  Note 5. Subsequent Events
  26




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Item 2. Managements Discussion and Analysis of Financial Condition and Results of Operations
  Executive Summary
     27




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Summary of Critical Accounting Policies
   Revenue Recognition
   Real Estate Investments
  28




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29




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Stock-Based Compensation
   30




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Results of Operations
  31




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Comparison of the three months ended March 31, 2009 to the three months ended March 31,
2008
 PropertiesThree months ended Mar 31,
    
    
    
    
    
    Percentage
    
    Acquisitions
    
    held in2009
    
    2008
    
    Increase
    
    change
    
    and other (ii)
    
    both periodsTotal revenues
    
    $
    46,895,000
    
    
    $
    43,635,000
    
    
    $
    3,260,000
    
    
    
    7
    %
    
    $
    2,408,000
    
    
    $
    852,000Property operating expenses
    
    
    14,672,000
    
    
    
    12,911,000
    
    
    
    1,761,000
    
    
    
    14
    %
    
    
    (87,000
    )
    
    
    1,848,000Depreciation and amortization
    
    
    12,400,000
    
    
    
    11,529,000
    
    
    
    871,000
    
    
    
    8
    %
    
    
    1,148,000
    
    
    
    (277,000
    )General and administrative
    
    
    2,964,000
    
    
    
    2,191,000
    
    
    
    773,000
    
    
    
    35
    %
    
    
    n/a
    
    
    
    n/aNon-operating income and
expense, net (i)
    
    
    11,080,000
    
    
    
    11,076,000
    
    
    
    4,000
    
    
    
    0
    %
    
    
    n/a
    
    
    
    n/a
 
 (i)
    
    Non-operating income and expense consists principally of interest expense (including
amortization of deferred financing costs),
equity in income of an unconsolidated joint venture, and gain on sale of a land parcel.(ii)
    
    Includes principally the results of properties acquired after January 1, 2008. Amounts also
include (a) unallocated property and
construction management compensation and benefits (including stock-based compensation), and (b)
results of a property in Wyoming,
Michigan that was demolished in the second quarter of 2008 as part of the redevelopment plans for
the property. Properties held in both periods.
 Total revenues
 Property operating expenses
 General and administrative expenses
 Non-operating income and expenses, net
 32




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Liquidity and Capital Resources
      33




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34




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Net Cash Flows
 Operating Activities
  Investing Activities
  35




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Financing Activities
  Funds From Operations
    36




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##### Table of Contents



Three months ended Mar 31,2009
    
    2008Net income attributable to the Companys common shareholders
    
    $
    3,999,000
    
    
    $
    3,112,000Add (deduct):Real estate depreciation and amortization
    
    
    12,391,000
    
    
    
    11,461,000Noncontrolling interests:Limited partners interest
    
    
    180,000
    
    
    
    143,000Minority interests in consolidated joint ventures
    
    
    (354,000
    )
    
    
    706,000Minority interests share of FFO applicable to
consolidated joint ventures
    
    
    (832,000
    )
    
    
    (1,781,000
    )Equity in income of unconsolidated joint venture
    
    
    (259,000
    )
    
    
    (150,000
    )FFO from unconsolidated joint venture
    
    
    359,000
    
    
    
    226,000Funds From Operations
    
    $
    15,484,000
    
    
    $
    13,717,000FFO per common share (assuming conversion of OP Units):Basic
    
    $
    0.33
    
    
    $
    0.30Diluted
    
    $
    0.33
    
    
    $
    0.30Weighted average number of common shares:Shares used in determination of basic earnings per share
    
    
    44,880,000
    
    
    
    44,458,000Additional shares assuming conversion of OP Units (basic)
    
    
    2,017,000
    
    
    
    2,030,000Shares used in determination of basic FFO per share
    
    
    46,897,000
    
    
    
    46,488,000Shares used in determination of diluted earnings per share
    
    
    44,880,000
    
    
    
    44,459,000Additional shares assuming conversion of OP Units (diluted)
    
    
    2,017,000
    
    
    
    2,030,000Shares used in determination of diluted FFO per share
    
    
    46,897,000
    
    
    
    46,489,000
 Inflation
  
 Item 3. Quantitative and Qualitative Disclosures About Market Risk
   37




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Item 4. Controls and Procedures
  38




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39




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##### Table of Contents



Part II Other Information
 
 Item 6. Exhibits
 Exhibit 31
    
    Section 302 CertificationsExhibit 32
    
    Section 906 Certifications
 
 SIGNATURES
   By: /s/ LEO S. ULLMAN
    
    By: /s/ LAWRENCE E. KREIDER, JR.Leo S. Ullman
    
    Lawrence E. Kreider, Jr.Chairman of the Board, Chief
    
    Chief Financial OfficerExecutive Officer and President
    
    (Principal financial officer)(Principal executive officer)
 
 40