##### 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 SEPTEMBER 30, 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 
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 oAccelerated filer þNon-accelerated filer o(Do not check if a smaller reporting company)Smaller reporting company o 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 October 31, 2009, there were 51,902,810 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  September 30, 2009 (unaudited) and
December 31, 2008
    
    
    4Consolidated Statements of Income (unaudited)  Three and nine
months ended September 30, 2009 and 2008
    
    
    5Consolidated Statement of Equity (unaudited)  Nine months
ended September 30, 2009
    
    
    6Consolidated Statements of Cash Flows (unaudited)  Nine months
ended September 30, 2009 and 2008
    
    
    7Notes to Consolidated Financial Statements (unaudited) 
September 30, 2009
    
    
    8-30Item 2. Managements Discussion and Analysis of Financial Condition
And Results of Operations
    
    
    31-45Item 3. Quantitative and Qualitative Disclosures About Market Risk
    
    
    45-46Item 4. Controls and Procedures
    
    
    46-47Part II. Other InformationItem 6. Exhibits
    
    
    48Signatures
    
    
    48EXHIBIT 31EXHIBIT 32
  2




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Forward-Looking Statements
  3




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CEDAR SHOPPING CENTERS, INC.  Consolidated Balance Sheets
 September 30,
    
    
    December 31,2009
    
    
 2008(unaudited)AssetsReal estate:Land
    
    $
    393,757,000
    
    
    $
    378,069,000Buildings and improvements
    
    
    1,521,992,000
    
    
    
    1,397,508,0001,915,749,000
    
    
    
    1,775,577,000Less accumulated depreciation
    
    
    (181,045,000
    )
    
    
    (146,401,000
    )Real estate, net
    
    
    1,734,704,000
    
    
    
    1,629,176,000Real estate held for sale
    
    
    2,270,000
    
    
    
    8,230,000Investment in unconsolidated joint venture
    
    
    5,412,000
    
    
    
    4,976,000Cash and cash equivalents
    
    
    9,526,000
    
    
    
    8,231,000Restricted cash
    
    
    14,104,000
    
    
    
    14,004,000Rents and other receivables, net
    
    
    8,156,000
    
    
    
    5,818,000Straight-line rents receivable
    
    
    16,328,000
    
    
    
    14,297,000Other assets
    
    
    11,286,000
    
    
    
    9,403,000Deferred charges, net
    
    
    33,363,000
    
    
    
    32,993,000Total assets
    
    $
    1,835,149,000
    
    
    $
    1,727,128,000Liabilities and equityMortgage loans payable
    
    $
    795,476,000
    
    
    $
    706,700,000Mortgage loan payable  real estate held for sale
    
    
    
    
    
    
    2,283,000Secured revolving credit facilities
    
    
    323,479,000
    
    
    
    304,490,000Accounts payable and accrued expenses
    
    
    41,018,000
    
    
    
    46,548,000Unamortized intangible lease liabilities
    
    
    54,029,000
    
    
    
    61,384,000Total liabilities
    
    
    1,214,002,000
    
    
    
    1,121,405,000Limited partners interest in Operating Partnership
    
    
    14,458,000
    
    
    
    14,271,000Commitments 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
45,084,000 and 44,468,000 shares, respectively, issued and
outstanding)
    
    
    2,705,000
    
    
    
    2,668,000Treasury
stock (987,000 and 713,000 shares, respectively, at cost
    
    
    (9,768,000
    )
    
    
    (9,175,000
    )Additional paid-in capital
    
    
    578,509,000
    
    
    
    576,083,000Cumulative distributions in excess of net income
    
    
    (126,959,000
    )
    
    
    (127,043,000
    )Accumulated other comprehensive loss
    
    
    (4,391,000
    )
    
    
    (7,256,000
    )Total Cedar Shopping Centers, Inc. shareholders equity
    
    
    528,846,000
    
    
    
    524,027,000Noncontrolling interests:Minority interests in consolidated joint ventures
    
    
    68,536,000
    
    
    
    58,150,000Limited partners interest in Operating Partnership
    
    
    9,307,000
    
    
    
    9,275,000Total noncontrolling interests
    
    
    77,843,000
    
    
    
    67,425,000Total equity
    
    
    606,689,000
    
    
    
    591,452,000Total liabilities and equity
    
    $
    1,835,149,000
    
    
    $
    1,727,128,000
  4




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CEDAR SHOPPING CENTERS, INC.  Consolidated Statements of Income
(unaudited)
 Three months ended September 30,
    
    Nine months ended September 30,2009
    
    2008
    
    2009
    
    2008Revenues:Rents
    
    $
    37,761,000
    
    
    $
    34,879,000
    
    
    $
    110,098,000
    
    
    $
    103,648,000Expense recoveries
    
    
    7,942,000
    
    
    
    7,741,000
    
    
    
    26,659,000
    
    
    
    24,747,000Other
    
    
    147,000
    
    
    
    511,000
    
    
    
    450,000
    
    
    
    893,000Total revenues
    
    
    45,850,000
    
    
    
    43,131,000
    
    
    
    137,207,000
    
    
    
    129,288,000Expenses:Operating, maintenance and management
    
    
    8,452,000
    
    
    
    6,963,000
    
    
    
    25,507,000
    
    
    
    22,269,000Real estate and other property-related taxes
    
    
    5,324,000
    
    
    
    4,939,000
    
    
    
    16,023,000
    
    
    
    14,278,000General and administrative
    
    
    2,521,000
    
    
    
    2,649,000
    
    
    
    6,813,000
    
    
    
    7,163,000Terminated projects and acquisition transaction costs
    
    
    
    
    
    
    5,000
    
    
    
    3,948,000
    
    
    
    5,000Depreciation and amortization
    
    
    12,730,000
    
    
    
    11,951,000
    
    
    
    37,705,000
    
    
    
    37,399,000Total expenses
    
    
    29,027,000
    
    
    
    26,507,000
    
    
    
    89,996,000
    
    
    
    81,114,000Operating income
    
    
    16,823,000
    
    
    
    16,624,000
    
    
    
    47,211,000
    
    
    
    48,174,000Non-operating income and expense:Interest expense, including amortization of
deferred financing costs
    
    
    (12,728,000
    )
    
    
    (11,211,000
    )
    
    
    (36,375,000
    )
    
    
    (33,810,000
    )Interest income
    
    
    10,000
    
    
    
    35,000
    
    
    
    28,000
    
    
    
    270,000Equity in income of unconsolidated joint venture
    
    
    260,000
    
    
    
    310,000
    
    
    
    802,000
    
    
    
    682,000Gain on sale of land parcel
    
    
    
    
    
    
    
    
    
    
    236,000
    
    
    
    Total non-operating income and expense
    
    
    (12,458,000
    )
    
    
    (10,866,000
    )
    
    
    (35,309,000
    )
    
    
    (32,858,000
    )Income before discontinued operations
    
    
    4,365,000
    
    
    
    5,758,000
    
    
    
    11,902,000
    
    
    
    15,316,000(Loss) income from discontinued operations
    
    
    (551,000
    )
    
    
    48,000
    
    
    
    (622,000
    )
    
    
    151,000Gain on sale of discontinued operations
    
    
    
    
    
    
    
    
    
    
    277,000
    
    
    
    Total discontinued operations
    
    
    (551,000
    )
    
    
    48,000
    
    
    
    (345,000
    )
    
    
    151,000Net income
    
    
    3,814,000
    
    
    
    5,806,000
    
    
    
    11,557,000
    
    
    
    15,467,000Less, net income attributable to noncontrolling interests:Minority interests in consolidated joint ventures
    
    
    (332,000
    )
    
    
    (412,000
    )
    
    
    (287,000
    )
    
    
    (1,600,000
    )Limited partners interest in Operating Partnership
    
    
    (66,000
    )
    
    
    (148,000
    )
    
    
    (233,000
    )
    
    
    (347,000
    )Total net income attributable to noncontrolling interests
    
    
    (398,000
    )
    
    
    (560,000
    )
    
    
    (520,000
    )
    
    
    (1,947,000
    )Net income attributable to Cedar Shopping Centers, Inc.
    
    
    3,416,000
    
    
    
    5,246,000
    
    
    
    11,037,000
    
    
    
    13,520,000Preferred distribution requirements
    
    
    (1,969,000
    )
    
    
    (1,969,000
    )
    
    
    (5,907,000
    )
    
    
    (5,907,000
    )Net income attributable to common shareholders
    
    $
    1,447,000
    
    
    $
    3,277,000
    
    
    $
    5,130,000
    
    
    $
    7,613,000Per common share (basic and diluted) attributable to common
shareholders:Continuing operations
    
    $
    0.04
    
    
    $
    0.07
    
    
    $
    0.12
    
    
    $
    0.17Discontinued operations
    
    
    (0.01
    )
    
    
    
    
    
    
    (0.01
    )
    
    
    $
    0.03
    
    
    $
    0.07
    
    
    $
    0.11
    
    
    $
    0.17Amounts attributable to Cedar Shopping Centers, Inc.
common shareholders, net of limited partners interest:Income from continuing operations
    
    $
    1,974,000
    
    
    $
    3,231,000
    
    
    $
    5,460,000
    
    
    $
    7,469,000Income from discontinued operations
    
    
    (527,000
    )
    
    
    46,000
    
    
    
    (595,000
    )
    
    
    144,000Gain on sale of discontinued operations
    
    
    
    
    
    
    
    
    
    
    265,000
    
    
    
    Net income
    
    $
    1,447,000
    
    
    $
    3,277,000
    
    
    $
    5,130,000
    
    
    $
    7,613,000Dividends to common shareholders
    
    $
    
    
    
    $
    10,010,000
    
    
    $
    5,046,000
    
    
    $
    30,017,000Per common share
    
    $
    
    
    
    $
    0.2250
    
    
    $
    0.1125
    
    
    $
    0.6750Weighted average number of common shares outstanding
    
    
    45,066,000
    
    
    
    44,488,000
    
    
    
    45,003,000
    
    
    
    44,470,000
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CEDAR SHOPPING CENTERS, INC.  Consolidated Statement of Equity
Nine months ended September 30, 2009
(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) income
    
    
    TotalBalance, December 31, 2008
    
    
    3,550,000
    
    
    $
    88,750,000
    
    
    
    44,468,000
    
    
    $
    2,668,000
    
    
    $
    (9,175,000
    )
    
    $
    576,083,000
    
    
    $
    (127,043,000
    )
    
    $
    (7,256,000
    )
    
    $
    524,027,000Net income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    11,037,000
    
    
    
    
    
    
    
    11,037,000Unrealized gain on change in fair
value
of cash flow hedges
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    2,865,000
    
    
    
    2,865,000Total other comprehensive income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    13,902,000Deferred compensation activity, net
    
    
    
    
    
    
    
    
    
    
    608,000
    
    
    
    37,000
    
    
    
    (593,000
    )
    
    
    2,510,000
    
    
    
    
    
    
    
    
    
    
    
    1,954,000Preferred distribution requirements
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (5,907,000
    )
    
    
    
    
    
    
    (5,907,000
    )Distributions to common shareholders/
noncontrolling interests
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (5,046,000
    )
    
    
    
    
    
    
    (5,046,000
    )Reallocation adjustment of limited
partners interest
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (174,000
    )
    
    
    
    
    
    
    
    
    
    
    (174,000
    )Conversion of OP Units to shares
    
    
    
    
    
    
    
    
    
    
    8,000
    
    
    
    
    
    
    
    
    
    
    
    90,000
    
    
    
    
    
    
    
    
    
    
    
    90,000Contributions, net, from minority
interest partnersBalance, September 30, 2009
    
    
    3,550,000
    
    
    $
    88,750,000
    
    
    
    45,084,000
    
    
    $
    2,705,000
    
    
    $
    (9,768,000
    )
    
    $
    578,509,000
    
    
    $
    (126,959,000
    )
    
    $
    (4,391,000
    )
    
    $
    528,846,000
 (continued)
 Noncontrolling InterestsLimitedMinority
    
    partnersinterests in
    
    interest inconsolidated
    
    Operating
    
    
    
    
    
    Totaljoint ventures
    
    Partnership
    
    Total
    
    equityBalance, December 31, 2008
    
    $
    58,150,000
    
    
    $
    9,275,000
    
    
    $
    67,425,000
    
    
    $
    591,452,000Net income
    
    
    287,000
    
    
    
    91,000
    
    
    
    378,000
    
    
    
    11,415,000Unrealized gain on change in fair value
of cash flow hedges
    
    
    
    
    
    
    52,000
    
    
    
    52,000
    
    
    
    2,917,000Total other comprehensive income
    
    
    287,000
    
    
    
    143,000
    
    
    
    430,000
    
    
    
    14,332,000Deferred compensation activity, net
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1,954,000Preferred distribution requirements
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (5,907,000
    )Distributions to common shareholders/noncontrolling interests
    
    
    (2,113,000
    )
    
    
    (89,000
    )
    
    
    (2,202,000
    )
    
    
    (7,248,000
    )Reallocation adjustment of limited
partners interest
    
    
    
    
    
    
    68,000
    
    
    
    68,000
    
    
    
    (106,000
    )Conversion of OP Units to shares
    
    
    
    
    
    
    (90,000
    )
    
    
    (90,000
    )
    
    
    Contributions, net, from minority
interest partners
    
    
    12,212,000
    
    
    
    
    
    
    
    12,212,000
    
    
    
    12,212,000Balance, September 30, 2009
    
    $
    68,536,000
    
    
    $
    9,307,000
    
    
    $
    77,843,000
    
    
    $
    606,689,000
  6




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##### Table of Contents



CEDAR SHOPPING CENTERS, INC.  Consolidated Statements of Cash Flows
(unaudited)
 Nine months ended September 30,2009
    
    
    2008Cash flow from operating activities:Net income
    
    $
    11,557,000
    
    
    $
    15,467,000Adjustments to reconcile net income to net cash provided by operating
activities:Non-cash provisions:Equity in income of unconsolidated joint venture
    
    
    (802,000
    )
    
    
    (682,000
    )Distributions from unconsolidated joint venture
    
    
    716,000
    
    
    
    634,000Terminated projects and acquisition transaction costs
    
    
    3,139,000
    
    
    
    Gain on sales of real estate
    
    
    (513,000
    )
    
    
    Straight-line rents receivable
    
    
    (2,048,000
    )
    
    
    (2,136,000
    )Depreciation and amortization
    
    
    37,805,000
    
    
    
    37,532,000Amortization of intangible lease liabilities
    
    
    (10,620,000
    )
    
    
    (10,377,000
    )Amortization/market price adjustments relating to stock-based compensation
    
    
    1,713,000
    
    
    
    2,238,000Amortization of deferred financing costs
    
    
    2,410,000
    
    
    
    1,227,000Increases/decreases in operating assets and liabilities:Rents and other receivables, net
    
    
    (2,338,000
    )
    
    
    (221,000
    )Prepaid expenses and other
    
    
    (4,718,000
    )
    
    
    (3,035,000
    )Accounts payable and accrued expenses
    
    
    (2,098,000
    )
    
    
    (204,000
    )Net cash provided by operating activities
    
    
    34,203,000
    
    
    
    40,443,000Cash flow from investing activities:Expenditures for real estate and improvements
    
    
    (86,049,000
    )
    
    
    (71,001,000
    )Net proceeds from sales of real estate
    
    
    3,472,000
    
    
    
    Purchase of consolidated joint venture minority interests
    
    
    
    
    
    
    (17,454,000
    )Investment in unconsolidated joint venture
    
    
    (350,000
    )
    
    
    (1,097,000
    )Construction escrows and other
    
    
    (901,000
    )
    
    
    (755,000
    )Net cash (used in) investing activities
    
    
    (83,828,000
    )
    
    
    (90,307,000
    )Cash flow from financing activities:Net advances from revolving credit facilities
    
    
    18,989,000
    
    
    
    84,250,000Proceeds from mortgage financings
    
    
    51,588,000
    
    
    
    80,947,000Mortgage repayments
    
    
    (15,753,000
    )
    
    
    (90,840,000
    )Net payments of debt financing costs
    
    
    (2,821,000
    )
    
    
    (4,412,000
    )Noncontrolling interests:Contributions from consolidated joint venture minority interests, net
    
    
    12,212,000
    
    
    
    4,260,000Distributions to consolidated joint venture minority interests
    
    
    (2,113,000
    )
    
    
    (27,000
    )Redemption of Operating Partnership Units
    
    
    
    
    
    
    (122,000
    )Distributions to limited partners
    
    
    (229,000
    )
    
    
    (1,368,000
    )Preferred stock distributions
    
    
    (5,907,000
    )
    
    
    (5,907,000
    )Distributions to common shareholders
    
    
    (5,046,000
    )
    
    
    (30,017,000
    )Net cash provided by financing activities
    
    
    50,920,000
    
    
    
    36,764,000Net increase (decrease) in cash and cash equivalents
    
    
    1,295,000
    
    
    
    (13,100,000
    )Cash and cash equivalents at beginning of period
    
    
    8,231,000
    
    
    
    23,050,000Cash and cash equivalents at end of period
    
    $
    9,526,000
    
    
    $
    9,950,000
  7




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##### Table of Contents



Cedar Shopping Centers, Inc.
Notes to Consolidated Financial Statements
September 30, 2009
(unaudited)
 Note 1. Organization and Basis of Preparation
     8




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##### Table of Contents



Cedar Shopping Centers, Inc.
Notes to Consolidated Financial Statements
September 30, 2009
(unaudited)
    9




---



##### Table of Contents



Cedar Shopping Centers, Inc.
Notes to Consolidated Financial Statements
September 30, 2009
(unaudited)
    Note 2. Summary of Significant Accounting Policies
   10




---



##### Table of Contents



Cedar Shopping Centers, Inc.
Notes to Consolidated Financial Statements
September 30, 2009
(unaudited)
 Real Estate Investments and Discontinued Operations
     11




---



##### Table of Contents



Cedar Shopping Centers, Inc.
Notes to Consolidated Financial Statements
September 30, 2009
(unaudited)
    Three months ended Sep 30,
    
    Nine months ended Sep 30,2009
    
    2008
    
    2009
    
    2008Revenues:Rents
    
    $
    38,000
    
    
    $
    132,000
    
    
    $
    297,000
    
    
    $
    395,000Expense recoveries
    
    
    24,000
    
    
    
    59,000
    
    
    
    137,000
    
    
    
    189,000Total revenues
    
    
    62,000
    
    
    
    191,000
    
    
    
    434,000
    
    
    
    584,000Expenses:Operating, maintenance and management
    
    
    3,000
    
    
    
    11,000
    
    
    
    24,000
    
    
    
    29,000Impairment charges
    
    
    552,000
    
    
    
    
    
    
    
    722,000
    
    
    
    Real estate and other property-related taxes
    
    
    24,000
    
    
    
    55,000
    
    
    
    128,000
    
    
    
    175,000Depreciation and amortization
    
    
    16,000
    
    
    
    45,000
    
    
    
    102,000
    
    
    
    133,000Interest expense
    
    
    18,000
    
    
    
    32,000
    
    
    
    80,000
    
    
    
    96,000613,000
    
    
    
    143,000
    
    
    
    1,056,000
    
    
    
    433,000(Loss) income from discontinued operations
    
    $
    (551,000
    )
    
    $
    48,000
    
    
    $
    (622,000
    )
    
    $
    151,000Gain on sale of discontinued operations
    
    $
    
    
    
    $
    
    
    
    $
    277,000
    
    
    $
    
 12




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##### Table of Contents



Cedar Shopping Centers, Inc.
Notes to Consolidated Financial Statements
September 30, 2009
(unaudited)
  Intangible Lease Asset/Liability
    13




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##### Table of Contents



Cedar Shopping Centers, Inc.
Notes to Consolidated Financial Statements
September 30, 2009
(unaudited)
   Cash and Cash Equivalents
  Restricted Cash
  Rents and Other Receivables
  14




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##### Table of Contents



Cedar Shopping Centers, Inc.
Notes to Consolidated Financial Statements
September 30, 2009
(unaudited)
   Concentration of Credit Risk
  Other Assets
  Sep 30,
    
    Dec 31,2009
    
    2008Cumulative mark-to-market adjustments
related to stock-based compensation
    
    $
    2,237,000
    
    
    $
    1,965,000Prepaid expenses
    
    
    8,038,000
    
    
    
    4,643,000Deposits
    
    
    1,011,000
    
    
    
    2,795,000$
    11,286,000
    
    
    $
    9,403,000
 15




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##### Table of Contents



Cedar Shopping Centers, Inc.
Notes to Consolidated Financial Statements
September 30, 2009
(unaudited)
 Deferred Charges, Net
  Sep 30,
    
    Dec 31,2009
    
    2008Lease origination costs (i)
    
    $
    19,838,000
    
    
    $
    19,348,000Financing costs (ii)
    
    
    11,560,000
    
    
    
    11,150,000Other
    
    
    1,965,000
    
    
    
    2,495,000$
    33,363,000
    
    
    $
    32,993,000
 
 (i)
    
    Lease origination costs include the amortized balance of intangible lease assets
resulting from purchase accounting allocations of $12,083,000 and $12,977,000 as of
September 30, 2009 and December 31, 2008, respectively.(ii)
    
    Financing costs are incurred in connection with the Companys credit facilities and
other long-term debt.  Income Taxes
  Derivative Financial Instruments
  16




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##### Table of Contents



Cedar Shopping Centers, Inc.
Notes to Consolidated Financial Statements
September 30, 2009
(unaudited)
   Notional values
    
    
    
    
    
    Balance
    
    Fair valueDesignation/
    
    
    
    
    
    
    
    
    
    Sep 30,
    
    Dec 31,
    
    Expiration
    
    sheet
    
    Sep 30,
    
    Dec 31,Cash flow
    
    Derivative
    
    Count
    
    2009
    
    2008
    
    dates
    
    location
    
    2009
    
    2008Accounts payableInterest
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    andQualifying
    
    rate swaps
    
    
    9
    
    
    $
    80,959,000
    
    
    $
    61,796,000
    
    
    
    2010-2020
    
    
    accrued expenses
    
    $
    7,526,000
    
    
    $
    10,590,000
   17




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##### Table of Contents



Cedar Shopping Centers, Inc.
Notes to Consolidated Financial Statements
September 30, 2009
(unaudited)
 Amount of gain (loss) recognized in other comprehensive (loss) income(effective portion)Three months ended Sep 30,
    
    Nine months ended Sep 30,Derivative
    
    2009
    
    2008
    
    2009
    
    2008Interest rate
swaps
    
    $
    (983,000
    )
    
    $
    (783,000
    )
    
    $
    2,917,000
    
    
    $
    (230,000
    )
 Amount of gain (loss) recognized in interest expense(ineffective portion)Three months ended Sep 30,
    
    Nine months ended Sep 30,Derivative
    
    2009
    
    2008
    
    2009
    
    2008Interest rate
swaps
    
    $
    (48,000
    )
    
    $
    
    
    
    $
    67,000
    
    
    $
    
 Earnings Per Share
  Stock-Based Compensation
  18




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##### Table of Contents



Cedar Shopping Centers, Inc.
Notes to Consolidated Financial Statements
September 30, 2009
(unaudited)
    19




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##### Table of Contents



Cedar Shopping Centers, Inc.
Notes to Consolidated Financial Statements
September 30, 2009
(unaudited)
 Three months ended Sep 30,
    
    Nine months ended Sep 30,2009
    
    2008
    
    2009
    
    2008Restricted share grants
    
    
    20,000
    
    
    
    
    
    
    
    614,000
    
    
    
    247,000Average per-share grant price
    
    $
    6.00
    
    
    $
    
    
    
    $
    4.94
    
    
    $
    9.39Recorded as deferred compensation, net
    
    $
    120,000
    
    
    $
    
    
    
    $
    3,036,000
    
    
    $
    2,312,000Charged to operations:Amortization relating to
stock-based compensation
    
    $
    850,000
    
    
    $
    595,000
    
    
    $
    2,271,000
    
    
    $
    1,851,000Adjustments to reflect changes in
market price of Companys common
stock
    
    
    517,000
    
    
    
    302,000
    
    
    
    (558,000
    )
    
    
    387,000Total charged to operations
    
    $
    1,367,000
    
    
    $
    897,000
    
    
    $
    1,713,000
    
    
    $
    2,238,000Non-vested shares:Non-vested, beginning of period
    
    
    1,090,000
    
    
    
    627,000
    
    
    
    508,000
    
    
    
    380,000Grants
    
    
    20,000
    
    
    
    
    
    
    
    614,000
    
    
    
    247,000Vested during period
    
    
    (38,000
    )
    
    
    (74,000
    )
    
    
    (49,000
    )
    
    
    (74,000
    )Forfeitures
    
    
    
    
    
    
    (1,000
    )
    
    
    (1,000
    )
    
    
    (1,000
    )Non-vested, end of period
    
    
    1,072,000
    
    
    
    552,000
    
    
    
    1,072,000
    
    
    
    552,000Average value of non-vested shares
(based on grant price)
    
    $
    8.11
    
    
    $
    12.28
    
    
    $
    8.11
    
    
    $
    12.28Value of shares vested during the
period (based on grant price)
    
    $
    398,000
    
    
    $
    1,071,000
    
    
    $
    564,000
    
    
    $
    1,071,000
    20




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##### Table of Contents



Supplemental consolidated statement of cash flows information
 Cedar Shopping Centers, Inc.
Notes to Consolidated Financial Statements
September 30, 2009
(unaudited)
 Nine months ended Sep 30,2009
    
    2008Supplemental disclosure of cash activities:Interest paid
    
    $
    37,785,000
    
    
    $
    36,292,000Supplemental disclosure of non-cash activities:Additions to deferred compensation plans
    
    
    3,034,000
    
    
    
    2,312,000Issuance of non-interest-bearing purchase money mortgage (a)
    
    
    
    
    
    
    (13,851,000
    )Assumption of mortgage loans payable  acquisitions
    
    
    (54,565,000
    )
    
    
    (18,156,000
    )Assumption of mortgage loan payable  disposition
    
    
    2,258,000
    
    
    
    Assumption of interest rate swap liabilities
    
    
    
    
    
    
    (2,288,000
    )Conversion of OP Units into common stock
    
    
    90,000
    
    
    
    54,000Purchase accounting allocations:Intangible lease assets
    
    
    7,174,000
    
    
    
    7,593,000Intangible lease liabilities
    
    
    (3,265,000
    )
    
    
    (4,469,000
    )Net valuation decrease in assumed mortgage loan
payable (b)
    
    
    1,649,000
    
    
    
    Other non-cash investing and financing activities:Accrued interest rate swap liabilities
    
    
    3,064,000
    
    
    
    (2,711,000
    )Accrued real estate improvement costs
    
    
    1,349,000
    
    
    
    (3,230,000
    )Accrued construction escrows
    
    
    1,026,000
    
    
    
    (387,000
    )Accrued financing costs and other
    
    
    22,000
    
    
    
    (48,000
    )Capitalization of deferred financing costs
    
    
    1,242,000
    
    
    
    592,000
 
 (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 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
   21




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##### Table of Contents



Cedar Shopping Centers, Inc.
Notes to Consolidated Financial Statements
September 30, 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.
    22




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##### Table of Contents



Cedar Shopping Centers, Inc.
Notes to Consolidated Financial Statements
September 30, 2009
(unaudited)
 Recently-Issued Accounting Pronouncements
   23




---



##### Table of Contents



Cedar Shopping Centers, Inc.
Notes to Consolidated Financial Statements
September 30, 2009
(unaudited)
      24




---



##### Table of Contents



Cedar Shopping Centers, Inc.
Notes to Consolidated Financial Statements
September 30, 2009
(unaudited)
  Note 3. Real Estate
  Joint Venture Activities
   25




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##### Table of Contents



Cedar Shopping Centers, Inc.
Notes to Consolidated Financial Statements
September 30, 2009
(unaudited)
  Real Estate Pledged
  Pro Forma Financial Information (unaudited)
  Three months ended Sep 30,
    
    Nine months ended Sep 30,2009
    
    2008
    
    2009
    
    2008Revenues
    
    $
    45,850,000
    
    
    $
    45,808,000
    
    
    $
    137,981,000
    
    
    $
    137,806,000Net income attributable to common shareholders
    
    $
    1,975,000
    
    
    $
    3,194,000
    
    
    $
    5,737,000
    
    
    $
    7,144,000Per common share (basic and diluted)
    
    $
    0.04
    
    
    $
    0.07
    
    
    $
    0.13
    
    
    $
    0.16Weighted average number of common shares outstanding
    
    
    45,066,000
    
    
    
    44,488,000
    
    
    
    45,003,000
    
    
    
    44,470,000
 26




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##### Table of Contents



Note 4. Mortgage Loans Payable and Secured Revolving Credit Facilities
 Cedar Shopping Centers, Inc.
Notes to Consolidated Financial Statements
September 30, 2009
(unaudited)
  At Sep 30, 2009
    
    At Dec 31, 2008Interest rates
    
    
    
    
    
    
    Interest ratesBalance
    
    
    Weighted
    
    
    
    
    
    Balance
    
    
    WeightedDescription
    
    outstanding
    
    
    average
    
    Range
    
    outstanding
    
    
    average
    
    RangeFixed-rate mortgages (a)
    
    $
    716,964,000
    
    
    
    
    5.8
    %
    
    
    4.8% - 8.5
    %
    
    $
    655,681,000
    
    
    
    
    5.8
    %
    
    
    4.8% - 8.5
    %Variable-rate mortgages
    
    
    78,512,000
    
    
    
    
    3.4
    %
    
    
    2.5% - 5.9
    %
    
    
    53,302,000
    
    
    
    
    4.4
    %
    
    
    2.5% - 5.9
    %Total property-specific mortgages
    
    
    795,476,000
    
    
    
    
    5.6
    %
    
    
    
    
    
    
    708,983,000
    
    
    
    
    5.7
    %Stabilized property credit facility
    
    
    238,985,000
    
    
    
    
    1.6
    %
    
    
    
    
    
    
    250,190,000
    
    
    
    
    2.7
    %Development property credit facility
    
    
    84,494,000
    
    
    
    
    2.5
    %
    
    
    
    
    
    
    54,300,000
    
    
    
    
    3.4
    %$
    1,118,955,000
    
    
    
    
    4.5
    %
    
    
    
    
    
    $
    1,013,473,000
    
    
    
    
    4.8
    %
 
 (a)
    
    Fixed-rate mortgages at December 31, 2008 include a $2,283,000 mortgage loan payable
related to real estate held for sale. Mortgage loans payable
    27




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##### Table of Contents



Cedar Shopping Centers, Inc.
Notes to Consolidated Financial Statements
September 30, 2009
(unaudited)
 Secured Revolving Stabilized Property Credit Facility
    28




---



##### Table of Contents



Cedar Shopping Centers, Inc.
Notes to Consolidated Financial Statements
September 30, 2009
(unaudited)
 Secured Revolving Development Property Credit Facility
  Note 5. Standby Equity Purchase Agreement
   29




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##### Table of Contents



Cedar Shopping Centers, Inc.
Notes to Consolidated Financial Statements
September 30, 2009
(unaudited)
   Note 6. Subsequent Events
    30




---



##### 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




---



##### Table of Contents



Real Estate Investments
     33




---



##### Table of Contents



Stock-Based Compensation
  34




---



##### Table of Contents



Results of Operations
  35




---



##### Table of Contents



Comparison of the three months ended September 30, 2009 to the three months ended September 30,
2008
 PropertiesThree months ended Sep 30,
    
    Increase
    
    Percentage
    
    Acquisitions
    
    held in2009
    
    2008
    
    (decrease)
    
    change
    
    and other (ii)
    
    both periodsTotal revenues
    
    $
    45,850,000
    
    
    $
    43,131,000
    
    
    $
    2,719,000
    
    
    
    6
    %
    
    $
    3,274,000
    
    
    $
    (555,000
    )Property operating expenses
    
    
    13,776,000
    
    
    
    11,902,000
    
    
    
    1,874,000
    
    
    
    16
    %
    
    
    1,575,000
    
    
    
    299,000Depreciation and amortization
    
    
    12,730,000
    
    
    
    11,951,000
    
    
    
    779,000
    
    
    
    7
    %
    
    
    1,037,000
    
    
    
    (258,000
    )General and administrative
    
    
    2,521,000
    
    
    
    2,649,000
    
    
    
    (128,000
    )
    
    
    -5
    %
    
    
    n/a
    
    
    
    n/aNon-operating income and expense, net (i)
    
    
    12,458,000
    
    
    
    10,866,000
    
    
    
    1,592,000
    
    
    
    15
    %
    
    
    n/a
    
    
    
    n/aDiscontinued operations:Income from discontinued operations
    
    
    1,000
    
    
    
    48,000
    
    
    
    (47,000
    )
    
    
    -98
    %
    
    
    n/a
    
    
    
    n/aImpairment charge
    
    
    (552,000
    )
    
    
    
    
    
    
    (552,000
    )
    
    
    100
    %
    
    
    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), (b) results of a property in Wyoming, Michigan where the then existing building
improvements were demolished in the second quarter of 2008 as part of the redevelopment plans for the property and (c) results of ground-up development
and re-development properties recently placed into service. Properties held in both periods.
 Total revenues
 Property operating expenses
 36




---



##### Table of Contents



General and administrative expenses
 Non-operating income and expense, net
 Discontinued operations
 37




---



##### Table of Contents



Comparison of the nine months ended September 30, 2009 to the nine months ended September 30, 2008
 PropertiesNine months ended Sep 30,
    
    Increase
    
    Percentage
    
    Acquisitions
    
    held in2009
    
    2008
    
    (decrease)
    
    change
    
    and other (ii)
    
    both periodsTotal revenues
    
    $
    137,207,000
    
    
    $
    129,288,000
    
    
    $
    7,919,000
    
    
    
    6
    %
    
    $
    8,127,000
    
    
    $
    (208,000
    )Property operating expenses
    
    
    41,530,000
    
    
    
    36,547,000
    
    
    
    4,983,000
    
    
    
    14
    %
    
    
    2,550,000
    
    
    
    2,433,000Depreciation and amortization
    
    
    37,705,000
    
    
    
    37,399,000
    
    
    
    306,000
    
    
    
    1
    %
    
    
    1,207,000
    
    
    
    (901,000
    )General and administrative
    
    
    6,813,000
    
    
    
    7,163,000
    
    
    
    (350,000
    )
    
    
    -5
    %
    
    
    n/a
    
    
    
    n/aTerminated projects and acquisition
transaction costs
    
    
    3,948,000
    
    
    
    5,000
    
    
    
    3,943,000
    
    
    
    100
    %
    
    
    n/a
    
    
    
    n/aNon-operating income and
expense, net (i)
    
    
    35,309,000
    
    
    
    32,858,000
    
    
    
    2,451,000
    
    
    
    7
    %
    
    
    n/a
    
    
    
    n/aDiscontinued operations:Income from discontinued operations
    
    
    100,000
    
    
    
    151,000
    
    
    
    (51,000
    )
    
    
    -34
    %
    
    
    n/a
    
    
    
    n/aImpairment charges
    
    
    (722,000
    )
    
    
    
    
    
    
    (722,000
    )
    
    
    100
    %
    
    
    n/a
    
    
    
    n/aGain on sale of discontinued
operations
    
    
    277,000
    
    
    
    
    
    
    
    277,000
    
    
    
    100
    %
    
    
    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), (b) results of a property in Wyoming, Michigan where the then existing
building improvements were demolished in the second quarter of 2008 as part of the redevelopment
plans for the property and (c) results of ground-up development and re-development properties
recently placed into service. Properties held in both periods.
 Total revenues
 Property operating expenses
 38




---



##### Table of Contents



General and administrative expenses
 Terminated projects and acquisition transaction costs
 Non-operating income and expense, net
 Discontinued operations
 Liquidity and Capital Resources
  39




---



##### Table of Contents



40




---



##### Table of Contents



41




---



##### Table of Contents



Net Cash Flows
 Operating Activities
  42




---



##### Table of Contents



Investing Activities
  Financing Activities
  Funds From Operations
  43




---



##### Table of Contents



44




---



##### Table of Contents



Three months ended Sep 30,
    
    Nine months ended Sep 30,2009
    
    2008
    
    2009
    
    2008Net income attributable to common shareholders
    
    $
    1,447,000
    
    
    $
    3,277,000
    
    
    $
    5,130,000
    
    
    $
    7,613,000Add (deduct):Real estate depreciation and amortization
    
    
    12,671,000
    
    
    
    11,921,000
    
    
    
    37,655,000
    
    
    
    37,321,000Noncontrolling interests:Limited partners interest
    
    
    66,000
    
    
    
    148,000
    
    
    
    233,000
    
    
    
    347,000Minority interests in consolidated joint ventures
    
    
    332,000
    
    
    
    412,000
    
    
    
    287,000
    
    
    
    1,600,000Minority interests share of FFO applicable to
consolidated joint ventures
    
    
    (1,661,000
    )
    
    
    (1,368,000
    )
    
    
    (4,131,000
    )
    
    
    (4,566,000
    )Equity in income of unconsolidated joint venture
    
    
    (260,000
    )
    
    
    (310,000
    )
    
    
    (802,000
    )
    
    
    (682,000
    )FFO from unconsolidated joint venture
    
    
    377,000
    
    
    
    360,000
    
    
    
    1,113,000
    
    
    
    941,000Gain on sale of discontinued operations
    
    
    
    
    
    
    
    
    
    
    (277,000
    )
    
    
    Funds From Operations
    
    $
    12,972,000
    
    
    $
    14,440,000
    
    
    $
    39,208,000
    
    
    $
    42,574,000FFO per common share (assuming conversion of OP Units):Basic
    
    $
    0.28
    
    
    $
    0.31
    
    
    $
    0.83
    
    
    $
    0.92Diluted
    
    $
    0.28
    
    
    $
    0.31
    
    
    $
    0.83
    
    
    $
    0.92Weighted average number of common shares:Shares used in determination of basic earnings per share
    
    
    45,066,000
    
    
    
    44,488,000
    
    
    
    45,003,000
    
    
    
    44,470,000Additional shares assuming conversion of OP Units (basic)
    
    
    2,014,000
    
    
    
    2,019,000
    
    
    
    2,016,000
    
    
    
    2,026,000Shares used in determination of basic FFO per share
    
    
    47,080,000
    
    
    
    46,507,000
    
    
    
    47,019,000
    
    
    
    46,496,000Shares used in determination of diluted earnings per share
    
    
    45,066,000
    
    
    
    44,490,000
    
    
    
    45,003,000
    
    
    
    44,472,000Additional shares assuming conversion of OP Units (diluted)
    
    
    2,014,000
    
    
    
    2,020,000
    
    
    
    2,016,000
    
    
    
    2,026,000Shares used in determination of diluted FFO per share
    
    
    47,080,000
    
    
    
    46,510,000
    
    
    
    47,019,000
    
    
    
    46,498,000
 Inflation
  
 Item 3. Quantitative and Qualitative Disclosures About Market Risk
   45




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Item 4. Controls and Procedures
  46




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47




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Part II Other Information
 
 Item 6. Exhibits
 
 
 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)
  48