##### 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, 2010
 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 
incorporation or organization)
    
    (I.R.S. Employer
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).
Yes 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.
 Large accelerated filer o
    
    Accelerated filer þ
    
    Non-accelerated filer o
    
    Smaller reporting company o(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, 2010, there were 64,755,491 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, 2010 (unaudited) and
December 31, 2009
    
    
    4Consolidated Statements of Operations (unaudited)  Three months ended March 31, 2010 and
2009
    
    
    5Consolidated Statement of Equity (unaudited)  Three months
ended March 31, 2010
    
    
    6Consolidated Statements of Cash Flows (unaudited)  Three months
ended March 31, 2010 and 2009
    
    
    7Notes to Consolidated Financial Statements (unaudited) 
March 31, 2010
    
    
    8-30Item 2. Managements Discussion and Analysis of Financial Condition
And Results of Operations
    
    
    31-43Item 3. Quantitative and Qualitative Disclosures About Market Risk
    
    
    43-44Item 4. Controls and
Procedures
    
    
    44-45Part II. Other InformationItem 6. Exhibits
    
    
    46Signatures
    
    
    46EX-31EX-32
  2




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Forward-Looking Statements
  3




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CEDAR SHOPPING CENTERS, INC.
 
 Consolidated Balance Sheets
 March 31,
    
    
    December 31,2010
    
    
    2009(unaudited)AssetsReal estate:Land
    
    $
    354,842,000
    
    
    $
    358,087,000Buildings and improvements
    
    
    1,333,858,000
    
    
    
    1,325,015,0001,688,700,000
    
    
    
    1,683,102,000Less accumulated depreciation
    
    
    (175,533,000
    )
    
    
    (165,075,000
    )Real estate, net
    
    
    1,513,167,000
    
    
    
    1,518,027,000Real estate to be transferred to a joint venture
    
    
    60,203,000
    
    
    
    139,743,000Real estate held for sale  discontinued operations
    
    
    1,850,000
    
    
    
    11,967,000Investment in unconsolidated joint ventures
    
    
    23,655,000
    
    
    
    14,113,000Cash and cash equivalents
    
    
    15,783,000
    
    
    
    17,164,000Restricted cash
    
    
    13,061,000
    
    
    
    14,075,000Receivables:Rents and other tenant receivables, net
    
    
    10,663,000
    
    
    
    7,423,000Straight-line rents
    
    
    15,389,000
    
    
    
    14,602,000Joint venture settlements
    
    
    7,330,000
    
    
    
    2,322,000Other assets
    
    
    7,710,000
    
    
    
    9,315,000Deferred charges, net
    
    
    35,149,000
    
    
    
    36,367,000Total assets
    
    $
    1,703,960,000
    
    
    $
    1,785,118,000Liabilities and equityMortgage loans payable
    
    $
    688,880,000
    
    
    $
    692,979,000Mortgage loans payable  real estate to be
transferred to a joint venture
    
    
    33,590,000
    
    
    
    94,018,000Mortgage loans payable  real estate held for sale
- discontinued operations
    
    
    
    
    
    
    7,765,000Secured revolving credit facilities
    
    
    207,091,000
    
    
    
    257,685,000Accounts payable and accrued liabilities
    
    
    27,797,000
    
    
    
    46,902,000Unamortized intangible lease liabilities
    
    
    54,819,000
    
    
    
    55,072,000Liabilities  real estate held for sale and real
estate to be
transferred to a joint venture
    
    
    3,916,000
    
    
    
    4,295,000Total liabilities
    
    
    1,016,093,000
    
    
    
    1,158,716,000Limited partners interest in Operating Partnership
    
    
    11,610,000
    
    
    
    12,638,000Commitments and contingencies
    
    
    
    
    
    
    Equity: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
62,911,000 and 52,139,000 shares, respectively,
issued and
outstanding)
    
    
    3,774,000
    
    
    
    3,128,000Treasury stock (1,135,000 and 981,000
shares, respectively, at cost)
    
    
    (10,629,000
    )
    
    
    (9,688,000
    )Additional paid-in capital
    
    
    688,870,000
    
    
    
    621,299,000Cumulative distributions in excess of net income
    
    
    (165,531,000
    )
    
    
    (162,041,000
    )Accumulated other comprehensive loss
    
    
    (3,989,000
    )
    
    
    (2,992,000
    )Total Cedar Shopping Centers, Inc. shareholders
equity
    
    
    601,245,000
    
    
    
    538,456,000Noncontrolling interests:Minority interests in consolidated joint ventures
    
    
    67,704,000
    
    
    
    67,229,000Limited partners interest in Operating Partnership
    
    
    7,308,000
    
    
    
    8,079,000Total noncontrolling interests
    
    
    75,012,000
    
    
    
    75,308,000Total equity
    
    
    676,257,000
    
    
    
    613,764,000Total liabilities and equity
    
    $
    1,703,960,000
    
    
    $
    1,785,118,000
  4




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CEDAR SHOPPING CENTERS, INC.
 
 Consolidated Statements of Operations
 (unaudited)
 Three months ended March 31,2010
    
    
    2009Revenues:Rents
    
    $
    34,684,000
    
    
    $
    35,332,000Expense recoveries
    
    
    10,118,000
    
    
    
    10,269,000Other
    
    
    128,000
    
    
    
    262,000Total revenues
    
    
    44,930,000
    
    
    
    45,863,000Expenses:Operating, maintenance and management
    
    
    10,775,000
    
    
    
    9,190,000Real estate and other property-related taxes
    
    
    5,430,000
    
    
    
    5,155,000General and administrative
    
    
    2,211,000
    
    
    
    1,439,000Impairments
    
    
    1,555,000
    
    
    
    Terminated projects and acquisition transaction costs, net
    
    
    1,320,000
    
    
    
    1,525,000Depreciation and amortization
    
    
    11,380,000
    
    
    
    12,179,000Total expenses
    
    
    32,671,000
    
    
    
    29,488,000Operating income
    
    
    12,259,000
    
    
    
    16,375,000Non-operating income and expense:Interest expense, including amortization of
deferred financing costs
    
    
    (13,842,000
    )
    
    
    (11,341,000
    )Interest income
    
    
    14,000
    
    
    
    14,000Equity in income of unconsolidated joint ventures
    
    
    356,000
    
    
    
    259,000Gain on sales of land parcels
    
    
    
    
    
    
    239,000Total non-operating income and expense
    
    
    (13,472,000
    )
    
    
    (10,829,000
    )(Loss) income before discontinued operations
    
    
    (1,213,000
    )
    
    
    5,546,000(Loss) income from discontinued operations
    
    
    (122,000
    )
    
    
    180,000Gain on sale of discontinued operations
    
    
    175,000
    
    
    
    Total discontinued operations
    
    
    53,000
    
    
    
    180,000Net (loss) income
    
    
    (1,160,000
    )
    
    
    5,726,000Less, net (income) loss attributable to noncontrolling interests:Minority interests in consolidated joint ventures
    
    
    (475,000
    )
    
    
    354,000Limited partners interest in Operating Partnership
    
    
    114,000
    
    
    
    (178,000
    )Total net (income) loss attributable to noncontrolling interests
    
    
    (361,000
    )
    
    
    176,000Net (loss) income attributable to Cedar Shopping Centers, Inc.
    
    
    (1,521,000
    )
    
    
    5,902,000Preferred distribution requirements
    
    
    (1,969,000
    )
    
    
    (1,954,000
    )Net (loss) income attributable to common shareholders
    
    $
    (3,490,000
    )
    
    $
    3,948,000Per common share attributable to common shareholders (basic
and diluted):Continuing operations
    
    $
    (0.06
    )
    
    $
    0.09Discontinued operations
    
    
    
    
    
    
    $
    (0.06
    )
    
    $
    0.09Amounts attributable to Cedar Shopping Centers, Inc.
common shareholders, net of limited partners interest:(Loss) income from continuing operations
    
    $
    (3,542,000
    )
    
    $
    4,118,000(Loss) income from discontinued operations
    
    
    (118,000
    )
    
    
    (170,000
    )Gain on sale of discontinued operations
    
    
    170,000
    
    
    
    Net (loss) income
    
    $
    (3,490,000
    )
    
    $
    3,948,000Dividends to common shareholders
    
    $
    
    
    
    $
    5,046,000Per common share
    
    $
    
    
    
    $
    0.1125Weighted average number of common shares outstanding
    
    
    58,728,000
    
    
    
    44,880,000
  5




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CEDAR SHOPPING CENTERS, INC.





Consolidated Statement of Equity
Three months ended March 31, 2010
(unaudited)
 Cedar Shopping Centers, Inc. ShareholdersPreferred stock
    
    
    Common stock
    
    
    
    
    
    
    
    
    
    
    Cumulative
    
    
    Accumulated$25.00
    
    
    
    
    
    
    
    
    
    
    Treasury
    
    
    Additional
    
    
    distributions
    
    
    otherLiquidation
    
    
    
    
    
    
    $0.06
    
    
    stock,
    
    
    paid-in
    
    
    in excess of
    
    
    comprehensiveShares
    
    
    value
    
    
    Shares
    
    
    Par value
    
    
    at cost
    
    
    capital
    
    
    net income
    
    
    loss
    
    
    TotalBalance, December 31, 2009
    
    
    3,550,000
    
    
    $
    88,750,000
    
    
    
    52,139,000
    
    
    $
    3,128,000
    
    
    $
    (9,688,000
    )
    
    $
    621,299,000
    
    
    $
    (162,041,000
    )
    
    $
    (2,992,000
    )
    
    $
    538,456,000Net (loss) income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (1,521,000
    )
    
    
    
    
    
    
    (1,521,000
    )Unrealized loss on change in fair
value
of cash flow hedges
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (997,000
    )
    
    
    (997,000
    )Total other comprehensive loss
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (2,518,000
    )Deferred compensation activity, net
    
    
    
    
    
    
    
    
    
    
    490,000
    
    
    
    29,000
    
    
    
    (941,000
    )
    
    
    1,346,000
    
    
    
    
    
    
    
    
    
    
    
    434,000Net proceeds from sale of common
stock
    
    
    
    
    
    
    
    
    
    
    10,266,000
    
    
    
    616,000
    
    
    
    
    
    
    
    64,611,000
    
    
    
    
    
    
    
    
    
    
    
    65,227,000Conversion of OP units into common
stock
    
    
    
    
    
    
    
    
    
    
    16,000
    
    
    
    1,000
    
    
    
    
    
    
    
    162,000
    
    
    
    
    
    
    
    
    
    
    
    163,000Preferred distribution requirements
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (1,969,000
    )
    
    
    
    
    
    
    (1,969,000
    )Reallocation adjustment of limited
partners interest
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1,452,000
    
    
    
    
    
    
    
    
    
    
    
    1,452,000Balance, March 31, 2010
    
    
    3,550,000
    
    
    $
    88,750,000
    
    
    
    62,911,000
    
    
    $
    3,774,000
    
    
    $
    (10,629,000
    )
    
    $
    688,870,000
    
    
    $
    (165,531,000
    )
    
    $
    (3,989,000
    )
    
    $
    601,245,000
 Noncontrolling InterestsLimitedMinority
    
    
    partnersinterests in
    
    
    interest inconsolidated
    
    
    Operating
    
    
    
    
    
    
    Totaljoint ventures
    
    
    Partnership
    
    
    Total
    
    
    equityBalance, December 31, 2009
    
    $
    67,229,000
    
    
    $
    8,079,000
    
    
    $
    75,308,000
    
    
    $
    613,764,000Net (loss) income
    
    
    475,000
    
    
    
    (44,000
    )
    
    
    431,000
    
    
    
    (1,090,000
    )Unrealized loss on change in fair
value
of cash flow hedges
    
    
    
    
    
    
    (2,000
    )
    
    
    (2,000
    )
    
    
    (999,000
    )Total other comprehensive loss
    
    
    475,000
    
    
    
    (46,000
    )
    
    
    429,000
    
    
    
    (2,089,000
    )Deferred compensation activity, net
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    434,000Net proceeds from sale of common
stock
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    65,227,000Conversion of OP units into common
stock
    
    
    
    
    
    
    (163,000
    )
    
    
    (163,000
    )
    
    
    Preferred distribution requirements
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (1,969,000
    )Reallocation adjustment of limited
partners interest
    
    
    
    
    
    
    (562,000
    )
    
    
    (562,000
    )
    
    
    890,000Balance, March 31, 2010
    
    $
    67,704,000
    
    
    $
    7,308,000
    
    
    $
    75,012,000
    
    
    $
    676,257,000
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CEDAR SHOPPING CENTERS, INC.


Consolidated Statements of Cash Flows
(unaudited)
 Three months ended March 31,2010
    
    
    2009Cash flow from operating activities:Net (loss) income
    
    $
    (1,160,000
    )
    
    $
    5,726,000Adjustments to reconcile net (loss) income to net cash provided by operating activities:Non-cash provisions:Equity in income of unconsolidated joint ventures
    
    
    (356,000
    )
    
    
    (259,000
    )Distributions from unconsolidated joint ventures
    
    
    120,000
    
    
    
    200,000Impairments
    
    
    1,555,000
    
    
    
    Terminated projects
    
    
    1,271,000
    
    
    
    252,000Impairment  discontinued operations
    
    
    248,000
    
    
    
    Gain on sales of real estate
    
    
    (175,000
    )
    
    
    (239,000
    )Straight-line rents
    
    
    (787,000
    )
    
    
    (640,000
    )Provision for doubtful accounts
    
    
    678,000
    
    
    
    584,000Depreciation and amortization
    
    
    11,380,000
    
    
    
    12,453,000Amortization of intangible lease liabilities
    
    
    (2,335,000
    )
    
    
    (3,416,000
    )Amortization/market price adjustments relating to stock-based compensation
    
    
    1,215,000
    
    
    
    (936,000
    )Amortization of deferred financing costs
    
    
    1,207,000
    
    
    
    637,000Increases/decreases in operating assets and liabilities:Rents and other receivables, net
    
    
    (3,918,000
    )
    
    
    (2,891,000
    )Joint
venture settlements
    
    
    (1,473,000
    )
    
    
    Prepaid expenses and other
    
    
    (1,029,000
    )
    
    
    (942,000
    )Accounts payable and accrued expenses
    
    
    (2,754,000
    )
    
    
    (1,446,000
    )Net cash provided by operating activities
    
    
    3,687,000
    
    
    
    9,083,000Cash flow from investing activities:Expenditures for real estate and improvements
    
    
    (8,029,000
    )
    
    
    (35,974,000
    )Net proceeds from sales of real estate
    
    
    2,056,000
    
    
    
    305,000Net proceeds from transfers to unconsolidated joint venture, less
working capital at dates of transfer
    
    
    11,379,000
    
    
    
    Investment in unconsolidated joint ventures
    
    
    (4,302,000
    )
    
    
    (350,000
    )Construction escrows and other
    
    
    1,040,000
    
    
    
    (397,000
    )Net cash provided by (used in) investing activities
    
    
    2,144,000
    
    
    
    (36,416,000
    )Cash flow from financing activities:Net (repayments)/advances (to)/from revolving credit facilities
    
    
    (50,594,000
    )
    
    
    32,435,000Proceeds from mortgage financings
    
    
    6,699,000
    
    
    
    8,000,000Mortgage repayments
    
    
    (10,913,000
    )
    
    
    (11,520,000
    )Payments of debt financing costs
    
    
    (243,000
    )
    
    
    (101,000
    )Termination payments related to interest rate swaps
    
    
    (5,476,000
    )
    
    
    Noncontrolling interests:Contributions from consolidated joint venture minority interests, net
    
    
    
    
    
    
    11,857,000Redemption of Operating Partnership Units
    
    
    (67,000
    )
    
    
    Distributions to limited partners
    
    
    (180,000
    )
    
    
    (227,000
    )Net proceeds from the sales of common stock
    
    
    60,227,000
    
    
    
    Preferred stock distributions
    
    
    (1,969,000
    )
    
    
    (1,969,000
    )Distributions to common shareholders
    
    
    (4,696,000
    )
    
    
    (5,046,000
    )Net cash (used in) provided by financing activities
    
    
    (7,212,000
    )
    
    
    33,429,000Net (decrease) increase in cash and cash equivalents
    
    
    (1,381,000
    )
    
    
    6,096,000Cash and cash equivalents at beginning of period
    
    
    17,164,000
    
    
    
    8,231,000Cash and cash equivalents at end of period
    
    $
    15,783,000
    
    
    $
    14,327,000
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Cedar Shopping Centers, Inc.

Notes to Consolidated Financial Statements
March 31, 2010
(unaudited)
 Note 1. Organization and Basis of Preparation
     8




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Cedar Shopping Centers, Inc.
Notes to Consolidated Financial Statements
March 31, 2010
(unaudited)
     9




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Cedar Shopping Centers, Inc.
Notes to Consolidated Financial Statements
March 31, 2010
(unaudited)
  Note 2. Summary of Significant Accounting Policies
     10




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Cedar Shopping Centers, Inc.
Notes to Consolidated Financial Statements
March 31, 2010
(unaudited)
   December 31, 2009As reported
    
    
    Adjustment
    
    
    As revised (a)Real estate
    
    $
    1,675,322,000
    
    
    $
    8,429,000
    
    
    $
    1,683,751,000Less accumulated depreciation
    
    
    (164,615,000
    )
    
    
    (741,000
    )
    
    
    (165,356,000
    )Real estate, net
    
    $
    1,510,707,000
    
    
    $
    7,688,000
    
    
    $
    1,518,395,000Unamortized intangible lease liabilities
    
    $
    46,643,000
    
    
    $
    8,429,000
    
    
    $
    55,072,000Limited partners interest in Operating
Partnership
    
    $
    12,656,000
    
    
    $
    (18,000
    )
    
    $
    12,638,000Total equity
    
    $
    614,487,000
    
    
    $
    (723,000
    )
    
    $
    613,764,000
 Three months ended March 31, 2009As reported
    
    
    Adjustment
    
    
    As revised (a)Depreciation
and amortization expense
    
    $
    12,400,000
    
    
    $
    53,000
    
    
    $
    12,453,000Net income attributable to common
shareholders
    
    $
    3,999,000
    
    
    $
    (51,000)
    (b)
    
    $
    3,948,000
 
 (a)
    
    Does not include revisions for other retroactive adjustments such as the sales of properties, where
the applicable net assets
and results of operations have been treated as held for
sale and income (loss) from discontinued
operations, respectively.(b)
    
    Net of noncontrolling interests (limited partners
interest). 11




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##### Table of Contents



Cedar Shopping Centers, Inc.
Notes to Consolidated Financial Statements
March 31, 2010
(unaudited)
 Real Estate Investments and Discontinued Operations
     12




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##### Table of Contents



Cedar Shopping Centers, Inc.
Notes to Consolidated Financial Statements
March 31, 2010
(unaudited)
     13




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##### Table of Contents



Cedar Shopping Centers, Inc.
Notes to Consolidated Financial Statements
March 31, 2010
(unaudited)
 Three months ended March 31,2010
    
    
    2009Revenues:Rents
    
    $
    251,000
    
    
    $
    738,000Expense recoveries
    
    
    26,000
    
    
    
    294,000Total revenues
    
    
    277,000
    
    
    
    1,032,000Expenses:Operating, maintenance and management
    
    
    57,000
    
    
    
    111,000Real estate and other property-related taxes
    
    
    42,000
    
    
    
    216,000Depreciation and amortization
    
    
    
    
    
    
    274,000Interest expense
    
    
    52,000
    
    
    
    251,000151,000
    
    
    
    852,000Income from discontinued operations before
impairment charges
    
    
    126,000
    
    
    
    180,000Impairment charges
    
    
    (248,000
    )
    
    
    (Loss) income from discontinued operations
    
    $
    (122,000
    )
    
    $
    180,000Gain on sale of discontinued operations
    
    $
    175,000
    
    
    $
    
 Conditional asset retirement obligation
  Intangible Lease Asset/Liability
  14




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##### Table of Contents



Cedar Shopping Centers, Inc.
Notes to Consolidated Financial Statements
March 31, 2010
(unaudited)
      Cash and Cash Equivalents
  15




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##### Table of Contents



Cedar Shopping Centers, Inc.
Notes to Consolidated Financial Statements
March 31, 2010
(unaudited)
  Restricted Cash
  Rents and Other Receivables
   Concentration of Credit Risk
  16




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##### Table of Contents



Cedar Shopping Centers, Inc.
Notes to Consolidated Financial Statements
March 31, 2010
(unaudited)
 Other Assets
  March 31,
    
    
    December 31,2010
    
    
    2009Cumulative mark-to-market adjustments
related to stock-based compensation
    
    $
    1,440,000
    
    
    $
    2,100,000Prepaid expenses
    
    
    5,283,000
    
    
    
    5,279,000Other
    
    
    987,000
    
    
    
    1,936,000$
    7,710,000
    
    
    $
    9,315,000
 Deferred Charges, Net
  March 31,
    
    
    December 31,2010
    
    
    2009Lease origination costs (i)
    
    $
    17,848,000
    
    
    $
    17,787,000Financing costs (ii)
    
    
    15,909,000
    
    
    
    16,873,000Other
    
    
    1,392,000
    
    
    
    1,707,000$
    35,149,000
    
    
    $
    36,367,000
 
 (i)
    
    Lease origination costs include the amortized balance of intangible lease assets resulting from purchase
accounting allocations of $9,620,000 and $10,067,000, respectively.(ii)
    
    Financing costs are incurred in connection with the Companys credit facilities and other long-term debt.  Income Taxes
  17




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##### Table of Contents



Cedar Shopping Centers, Inc.
Notes to Consolidated Financial Statements
March 31, 2010
(unaudited)
  Derivative Financial Instruments
   18




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##### Table of Contents



Cedar Shopping Centers, Inc.
Notes to Consolidated Financial Statements
March 31, 2010
(unaudited)
 Notional values
    
    
    
    
    Balance
    
    Fair valueDesignation/
    
    
    
    
    
    March 31,
    
    
    
    
    December 31,
    
    
    Expiration
    
    sheet
    
    March 31,
    
    
    December 31,Cash flow
    
    Derivative
    
    Count
    
    2010
    
    
    Count
    
    2009
    
    
    dates
    
    location
    
    2010
    
    
    2009Accounts payableNon-qualifying
    
    Interest
    
    
    
    $
    
    
    
    1
    
    $
    23,891,000
    
    
    2011
    
    and
    
    $
    
    
    
    $
    1,297,000Qualifying
    
    rate swaps
    
    2
    
    $
    20,380,000
    
    
    8
    
    $
    56,925,000
    
    
    2010 - 2020
    
    accrued expenses
    
    $
    1,587,000
    
    
    $
    4,655,000
  Amount of gain (loss) recognized in othercomprehensive (loss) income (effective portion)Designation/
    
    
    
    March 31,Cash flow
    
    Derivative
    
    2010
    
    
    2009Interest rateQualifying
    
    swaps
    
    $
    (997,000
    )
    
    $
    918,000
 Amount of gain (loss) recognized in interest expense(ineffectve portion)Interest rateQualifying
    
    swaps
    
    $
    
    
    
    $
    24,000
 Earnings Per Share
  19




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##### Table of Contents



Cedar Shopping Centers, Inc.
Notes to Consolidated Financial Statements
March 31, 2010
(unaudited)
 Stock-Based Compensation
     20




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##### Table of Contents



Cedar Shopping Centers, Inc.
Notes to Consolidated Financial Statements
March 31, 2010
(unaudited)
  March 31,2010
    
    
    2009Restricted share grants
    
    
    501,000
    
    
    
    594,000Average per-share grant price
    
    $
    6.55
    
    
    $
    4.91Recorded as deferred compensation, net
    
    $
    3,275,000
    
    
    $
    2,917,000Charged to operations:Amortization relating to stock-based compensation
    
    $
    706,000
    
    
    $
    699,000Adjustments to reflect changes in market price of
Companys common stock
    
    
    509,000
    
    
    
    (1,635,000
    )Total charged to operations
    
    $
    1,215,000
    
    
    $
    (936,000
    )Non-vested shares:Non-vested, beginning of period
    
    
    980,000
    
    
    
    508,000Grants
    
    
    501,000
    
    
    
    594,000Vested during period
    
    
    (113,000
    )
    
    
    Forfeitures/cancellations
    
    
    
    
    
    
    Non-vested, end of period
    
    
    1,368,000
    
    
    
    1,102,000Average value of non-vested shares (based on
grant price)
    
    $
    6.49
    
    
    $
    8.30Value of shares vested during the
period (based on grant price)
    
    $
    1,790,000
    
    
    $
    
   21




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##### Table of Contents



Cedar Shopping Centers, Inc.
Notes to Consolidated Financial Statements
March 31, 2010
(unaudited)
    22




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##### Table of Contents



Cedar Shopping Centers, Inc.
Notes to Consolidated Financial Statements
March 31, 2010
(unaudited)
 Supplemental consolidated statements of cash flows information
 Three months ended March 31,2010
    
    
    2009Supplemental disclosure of cash activities:Interest paid
    
    $
    13,620,000
    
    
    $
    12,059,000Supplemental disclosure of non-cash activities:Additions to deferred compensation plans
    
    
    3,275,000
    
    
    
    2,917,000Assumption of mortgage loans payable  acquisitions
    
    
    
    
    
    
    (54,565,000
    )Assumption of mortgage loans payable  disposition
    
    
    (7,740,000
    )
    
    
    Conversion of OP Units into common stock
    
    
    163,000
    
    
    
    Purchase accounting allocations:Intangible lease assets
    
    
    
    
    
    
    7,174,000Intangible lease liabilities
    
    
    (2,130,000
    )
    
    
    (3,265,000
    )Net valuation decrease in assumed mortgage loan
payable (a)
    
    
    
    
    
    
    (1,649,000
    )Other non-cash investing and financing activities:Accrued interest rate swap liabilities
    
    
    (1,110,000
    )
    
    
    967,000Accrued real estate improvement costs
    
    
    
    
    
    
    (629,000
    )Accrued construction escrows
    
    
    (2,190,000
    )
    
    
    1,028,000Accrued financing costs and other
    
    
    
    
    
    
    (22,000
    )Capitalization of deferred financing costs
    
    
    293,000
    
    
    
    264,000Deconsolidation of properties transferred to joint venture:Real estate, net
    
    
    79,542,000
    
    
    
    Other assets/liabilties, net
    
    
    (60,366,000
    )
    
    
    Investment in and advances to unconsolidated joint venture
    
    
    4,504,000
    
    
    
    Settlement
receiveable from unconsolidated joint venture
    
    
    3,705,000
    
    
    
    
 
 (a)
    
    The net valuation decrease 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
   23




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##### Table of Contents



Cedar Shopping Centers, Inc.
Notes to Consolidated Financial Statements
March 31, 2010
(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.
   24




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##### Table of Contents



Cedar Shopping Centers, Inc.
Notes to Consolidated Financial Statements
March 31, 2010
(unaudited)
  Recently-Issued Accounting Pronouncements
  Note 3. Real Estate
  Joint Venture Activities
  25




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##### Table of Contents



Cedar Shopping Centers, Inc.
Notes to Consolidated Financial Statements
March 31, 2010
(unaudited)
   Real Estate Pledged
  Note 4. Mortgage Loans Payable and Secured Revolving Credit Facilities
  26




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##### Table of Contents



Cedar Shopping Centers, Inc.
Notes to Consolidated Financial Statements
March 31, 2010
(unaudited)
 March 31, 2010
    
    
    December 31, 2009Interest rates
    
    
    
    
    
    
    Interest ratesBalance
    
    
    Weighted
    
    
    
    
    
    
    Balance
    
    
    WeightedDescription
    
    outstanding
    
    
    average
    
    
    Range
    
    
    outstanding
    
    
    average
    
    
    RangeFixed-rate mortgages (a)
    
    $
    605,610,000
    
    
    
    5.8
    %
    
    
    5.0% - 7.5
    %
    
    $
    610,798,000
    
    
    
    5.8
    %
    
    
    5.0% - 8.5
    %Variable-rate mortgages
    
    
    83,270,000
    
    
    
    3.3
    %
    
    
    2.5% - 5.9
    %
    
    
    82,181,000
    
    
    
    3.4
    %
    
    
    2.5% - 5.9
    %Total property-specific mortgages
    
    
    688,880,000
    
    
    
    5.5
    %
    
    
    
    
    
    
    692,979,000
    
    
    
    5.6
    %Stabilized property credit facility
    
    
    116,335,000
    
    
    
    5.5
    %
    
    
    
    
    
    
    187,985,000
    
    
    
    5.5
    %Development property credit facility
    
    
    90,756,000
    
    
    
    2.5
    %
    
    
    
    
    
    
    69,700,000
    
    
    
    2.5
    %$
    895,971,000
    
    
    
    5.2
    %
    
    
    
    
    
    $
    950,664,000
    
    
    
    5.3
    %Fixed-rate mortgages related to:Real estate transferred or to be transferred
to a joint venture
    
    $
    33,590,000
    
    
    
    6.5
    %
    
    
    6.2% - 7.2
    %
    
    $
    94,018,000
    
    
    
    5.8
    %
    
    
    4.8% - 7.2
    %Real estate held for sale  discontinued
operations
    
    $
    
    
    
    
    
    
    
    
    
    
    
    $
    7,765,000
    
    
    
    5.4
    %
    
    
    5.2% - 5.6
    %
 
 (a)
    
    Restated to reflect the reclassifications of properties transferred or to be transferred
to the RioCan joint venture and properties treated as discontinued operations.  Secured Revolving Stabilized Property Credit Facility
  27




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##### Table of Contents



Cedar Shopping Centers, Inc.
Notes to Consolidated Financial Statements
March 31, 2010
(unaudited)
   Secured Revolving Development Property Credit Facility
  Note 5. Preferred and Common Stock
  28




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##### Table of Contents



Cedar Shopping Centers, Inc.
Notes to Consolidated Financial Statements
March 31, 2010
(unaudited)
      Note 6. Subsequent Events
  29




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##### Table of Contents



Cedar Shopping Centers, Inc.
Notes to Consolidated Financial Statements
March 31, 2010
(unaudited)
   30




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##### Table of Contents



Item 2. Managements Discussion and Analysis of Financial Condition and Results of Operations
  Executive Summary
    31




---



##### Table of Contents



Summary of Critical Accounting Policies
   Revenue Recognition
   32




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Real Estate Investments
     33




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##### Table of Contents



Stock-Based Compensation
  34




---



##### Table of Contents



Results of Operations
  35




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##### Table of Contents



Comparison of the three months ended March 31,
2010 to 2009
 Properties(Decrease)
    
    
    Percent
    
    
    Acquisitions
    
    
    held in2010
    
    
    2009
    
    
    increase
    
    
    change
    
    
    and other (ii)
    
    
    both periodsTotal revenues
    
    $
    44,930,000
    
    
    $
    45,863,000
    
    
    $
    (933,000
    )
    
    
    -2
    %
    
    $
    1,431,000
    
    
    
    (2,364,000
    )Property operating expenses
    
    
    16,205,000
    
    
    
    14,345,000
    
    
    
    1,860,000
    
    
    
    13
    %
    
    
    1,492,000
    
    
    
    368,000Depreciation and amortization
    
    
    11,380,000
    
    
    
    12,179,000
    
    
    
    (799,000
    )
    
    
    -7
    %
    
    
    147,000
    
    
    
    (946,000
    )General and administrative
    
    
    2,211,000
    
    
    
    1,439,000
    
    
    
    772,000
    
    
    
    54
    %
    
    
    n/a
    
    
    
    n/aImpairments
    
    
    1,555,000
    
    
    
    
    
    
    
    1,555,000
    
    
    
    n/a
    
    
    
    n/a
    
    
    
    n/aTerminated projects and acquisition
transaction costs
    
    
    1,320,000
    
    
    
    1,525,000
    
    
    
    (205,000
    )
    
    
    n/a
    
    
    
    n/a
    
    
    
    n/aNon-operating income and
expense, net (i)
    
    
    13,472,000
    
    
    
    10,829,000
    
    
    
    2,643,000
    
    
    
    24
    %
    
    
    n/a
    
    
    
    n/aDiscontinued operations:Income from discontinued
operations
    
    
    126,000
    
    
    
    180,000
    
    
    
    (54,000
    )
    
    
    n/a
    
    
    
    n/a
    
    
    
    n/aImpairment charge
    
    
    248,000
    
    
    
    
    
    
    
    248,000
    
    
    
    n/a
    
    
    
    n/a
    
    
    
    n/aGain on sale of discontinued
operations
    
    
    175,000
    
    
    
    
    
    
    
    175,000
    
    
    
    n/a
    
    
    
    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 unconsolidated joint ventures, and gain on sales of land parcels.(ii)
    
    Includes principally (a) the results of properties acquired after January 1, 2009, (b) properties transferred or to be transferred to the
RioCan joint venture, (c) unallocated property and construction management compensation and benefits (including stock-based
compensation) and (d) results of ground-up development and re-development properties recently placed into service. Properties held in both periods.
 Total revenues
 36




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##### Table of Contents



Property operating expenses
 General and administrative expenses
 Impairments
 Terminated projects and acquisition transaction costs
 Non-operating income and expense, net
 Discontinued operations
 Liquidity and Capital Resources
  37




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##### Table of Contents



38




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##### Table of Contents



39




---



##### Table of Contents



40




---



##### Table of Contents



Net Cash Flows
 Operating Activities
  Investing Activities
  Financing Activities
  41




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##### Table of Contents



Funds From Operations
    42




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##### Table of Contents



2010
    
    
    2009Net (loss) income attributable to common shareholders
    
    $
    (3,490,000
    )
    
    $
    3,948,000Add (deduct):Real estate depreciation and amortization
    
    
    11,328,000
    
    
    
    12,444,000Noncontrolling interests:Limited partners interest
    
    
    (114,000
    )
    
    
    178,000Minority interests in consolidated joint ventures
    
    
    475,000
    
    
    
    (354,000
    )Minority interests share of FFO applicable to consolidated joint ventures
    
    
    (1,691,000
    )
    
    
    (832,000
    )Equity in income of unconsolidated joint ventures
    
    
    (356,000
    )
    
    
    (259,000
    )FFO from unconsolidated joint ventures
    
    
    586,000
    
    
    
    359,000Gain on sale of discontinued operations
    
    
    (175,000
    )
    
    
    Funds From Operations
    
    $
    6,563,000
    
    
    $
    15,484,000FFO per common share (assuming conversion of OP Units)Basic and diluted
    
    $
    0.11
    
    
    $
    0.33Weighted average number of common shares (basic):Shares used in determination of basic earnings per share
    
    
    58,728,000
    
    
    
    44,880,000Additional shares assuming conversion of OP Units
    
    
    1,986,000
    
    
    
    2,017,000Shares used in determination of basic FFO per share
    
    
    60,714,000
    
    
    
    46,897,000Weighted average number of common shares (dilutive):Shares used in determination of diluted earnings per share
    
    
    58,752,000
    
    
    
    44,880,000Additional shares assuming conversion of OP Units
    
    
    1,986,000
    
    
    
    2,017,000Shares used in determination of diluted FFO per share
    
    
    60,738,000
    
    
    
    46,897,000
 Inflation
  
 Item 3. Quantitative and Qualitative Disclosures About Market Risk
   43




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##### Table of Contents



Item 4. Controls and Procedures
  44




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##### Table of Contents



45




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##### Table of Contents



Part II Other Information
 
 Item 6. Exhibits
 Exhibit 31
    
    Section 302 CertificationsExhibit 32
    
    Section 906 Certifications
 
 SIGNATURES
  CEDAR SHOPPING CENTERS, INC.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)May 10, 2010
 46