##### 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, 2007
 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 is a large accelerated filer, an accelerated
filer, or a non-accelerated filer. See definition of accelerated filer and large accelerated
filer in Rule 12b-2 of the Exchange Act (Check one):
 Large accelerated filer o Accelerated filer þ Non-accelerated filer 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 May 4, 2007, there were 44,188,181 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, 2007 (unaudited) and
December 31, 2006
    
    
    4Consolidated Statements of Income (unaudited)  Three months
ended March 31, 2007 and 2006
    
    
    5Consolidated Statement of Shareholders Equity (unaudited)  Three
months ended March 31, 2007
    
    
    6Consolidated Statements of Cash Flows (unaudited)  Three months
ended March 31, 2007 and 2006
    
    
    7Notes to Consolidated Financial Statements (unaudited) 
March 31, 2007
    
    
    8-21Item 2. Managements Discussion and Analysis of Financial Condition
And Results of Operations
    
    
    22-30Item 3. Quantitative and Qualitative Disclosures About Market Risk
    
    
    30Item 4. Controls and Procedures
    
    
    31Part II. Other InformationItem 6. Exhibits
    
    
    32Signatures
    
    
    33Section 302 CertificationsSection 906 Certifications
  2




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Forward-Looking Statements
  3




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CEDAR SHOPPING CENTERS, INC.
 
 Consolidated Balance Sheets
 March 31,
    
    
    December 31,2007
    
    
    2006(unaudited)AssetsReal estate:Land
    
    $
    254,642,000
    
    
    $
    250,460,000Buildings and improvements
    
    
    1,020,930,000
    
    
    
    991,517,0001,275,572,000
    
    
    
    1,241,977,000Less accumulated depreciation
    
    
    (73,861,000
    )
    
    
    (64,838,000
    )Real estate, net
    
    
    1,201,711,000
    
    
    
    1,177,139,000Investment in unconsolidated joint venture
    
    
    3,676,000
    
    
    
    3,644,000Cash and cash equivalents
    
    
    14,774,000
    
    
    
    17,885,000Restricted cash
    
    
    11,460,000
    
    
    
    11,507,000Rents and other receivables, net
    
    
    14,671,000
    
    
    
    12,182,000Other assets
    
    
    7,604,000
    
    
    
    6,921,000Deferred charges, net
    
    
    23,871,000
    
    
    
    22,441,000Total assets
    
    $
    1,277,767,000
    
    
    $
    1,251,719,000Liabilities and shareholders equityMortgage loans payable
    
    $
    497,581,000
    
    
    $
    499,603,000Secured revolving credit facility
    
    
    92,570,000
    
    
    
    68,470,000Accounts payable, accrued expenses, and other
    
    
    19,980,000
    
    
    
    17,435,000Unamortized intangible lease liabilities
    
    
    56,507,000
    
    
    
    53,160,000Total liabilities
    
    
    666,638,000
    
    
    
    638,668,000Minority interests in consolidated joint ventures
    
    
    9,228,000
    
    
    
    9,132,000Limited partners interest in Operating Partnership
    
    
    25,880,000
    
    
    
    25,969,000Shareholders equity:Preferred stock ($.01 par value, $25.00 per share
liquidation value, 5,000,000 shares authorized, 3,550,000
shares issued and outstanding)
    
    
    88,750,000
    
    
    
    88,750,000Common stock ($.06 par value, 50,000,000 shares
authorized, 44,188,000 and 43,773,000 shares, respectively,
issued and outstanding)
    
    
    2,651,000
    
    
    
    2,626,000Treasury stock (591,000 and 502,000 shares, respectively, at cost)
    
    
    (7,824,000
    )
    
    
    (6,378,000
    )Additional paid-in capital
    
    
    570,417,000
    
    
    
    564,637,000Cumulative distributions in excess of net income
    
    
    (78,105,000
    )
    
    
    (71,831,000
    )Accumulated other comprehensive income
    
    
    132,000
    
    
    
    146,000Total shareholders equity
    
    
    576,021,000
    
    
    
    577,950,000Total liabilities and shareholders equity
    
    $
    1,277,767,000
    
    
    $
    1,251,719,000
  4




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CEDAR SHOPPING CENTERS, INC.
 
 Consolidated Statements of Income
 (unaudited)
 Three months ended March 31,2007
    
    
    2006Revenues:Rents
    
    $
    28,564,000
    
    
    $
    24,172,000Expense recoveries
    
    
    7,275,000
    
    
    
    5,614,000Other
    
    
    352,000
    
    
    
    206,000Total revenues
    
    
    36,191,000
    
    
    
    29,992,000Expenses:Operating, maintenance and management
    
    
    7,077,000
    
    
    
    6,168,000Real estate and other property-related taxes
    
    
    3,577,000
    
    
    
    2,936,000General and administrative
    
    
    1,998,000
    
    
    
    1,379,000Depreciation and amortization
    
    
    9,883,000
    
    
    
    8,597,000Total expenses
    
    
    22,535,000
    
    
    
    19,080,000Operating income
    
    
    13,656,000
    
    
    
    10,912,000Non-operating income and expense:Interest expense
    
    
    (7,568,000
    )
    
    
    (7,357,000
    )Amortization of deferred financing costs
    
    
    (352,000
    )
    
    
    (329,000
    )Interest income
    
    
    275,000
    
    
    
    116,000Equity in income (loss) of unconsolidated joint ventures
    
    
    156,000
    
    
    
    (25,000
    )Total non-operating income and expense
    
    
    (7,489,000
    )
    
    
    (7,595,000
    )Income before minority and limited partners interests
    
    
    6,167,000
    
    
    
    3,317,000Minority interests in consolidated joint ventures
    
    
    (395,000
    )
    
    
    (310,000
    )Limited partners interest in Operating Partnership
    
    
    (163,000
    )
    
    
    (53,000
    )Net income
    
    
    5,609,000
    
    
    
    2,954,000Preferred distribution requirements
    
    
    (1,954,000
    )
    
    
    (1,954,000
    )Net income applicable to common shareholders
    
    $
    3,655,000
    
    
    $
    1,000,000Per common share:Basic
    
    $
    0.08
    
    
    $
    0.03Diluted
    
    $
    0.08
    
    
    $
    0.03Dividends to common shareholders
    
    $
    9,929,000
    
    
    $
    6,701,000Per common share
    
    $
    0.225
    
    
    $
    0.225Weighted average number of common shares outstandingBasic
    
    
    44,112,000
    
    
    
    29,878,000Diluted
    
    
    44,119,000
    
    
    
    30,139,000
  5




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CEDAR SHOPPING CENTERS, INC.
 
 Condolidated Statement of Shareholders Equity
 Three months ended March 31, 2007
 (unaudited)
 Preferred stock
    
    
    Common stock
    
    
    
    
    
    
    
    
    
    
    Cumulative
    
    
    Accumulated$25.00
    
    
    
    
    
    
    
    
    
    
    Treasury
    
    
    Additional
    
    
    distributions
    
    
    other
    
    
    TotalLiquidation
    
    
    
    
    
    
    $0.06
    
    
    stock,
    
    
    paid-in
    
    
    in excess of
    
    
    comprehensive
    
    
    shareholdersShares
    
    
    value
    
    
    Shares
    
    
    Par value
    
    
    at cost
    
    
    capital
    
    
    net income
    
    
    income
    
    
    equityBalance, December 31, 2006
    
    
    3,550,000
    
    
    $
    88,750,000
    
    
    
    43,773,000
    
    
    $
    2,626,000
    
    
    $
    (6,378,000
    )
    
    $
    564,637,000
    
    
    $
    (71,831,000
    )
    
    $
    146,000
    
    
    $
    577,950,000Net income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    5,609,000
    
    
    
    
    
    
    
    5,609,000Unrealized gain (loss) on change in fair value
of cash flow hedges
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (14,000
    )
    
    
    (14,000
    )Total comprehensive income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    5,595,000Deferred compensation activity, net
    
    
    
    
    
    
    
    
    
    
    140,000
    
    
    
    8,000
    
    
    
    (1,446,000
    )
    
    
    1,839,000
    
    
    
    
    
    
    
    
    
    
    
    401,000Net proceeds from common stock sales
    
    
    
    
    
    
    
    
    
    
    275,000
    
    
    
    17,000
    
    
    
    
    
    
    
    4,115,000
    
    
    
    
    
    
    
    
    
    
    
    4,132,000Preferred distribution requirements
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (1,954,000
    )
    
    
    
    
    
    
    (1,954,000
    )Dividends to common shareholders
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (9,929,000
    )
    
    
    
    
    
    
    (9,929,000
    )Reallocation adjustment of limited partners
interest
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (174,000
    )
    
    
    
    
    
    
    
    
    
    
    (174,000
    )Balance, March 31, 2007
    
    
    3,550,000
    
    
    $
    88,750,000
    
    
    
    44,188,000
    
    
    $
    2,651,000
    
    
    $
    (7,824,000
    )
    
    $
    570,417,000
    
    
    $
    (78,105,000
    )
    
    $
    132,000
    
    
    $
    576,021,000
  6




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CEDAR SHOPPING CENTERS, INC.
 
 Consolidated Statements of Cash Flows
 (unaudited)
 Three months ended March 31,2007
    
    
    2006Cash flow from operating activities:Net income
    
    $
    5,609,000
    
    
    $
    2,954,000Adjustments to reconcile net income to net cash
provided by operating activities:Non-cash provisions:Earnings in excess of distributions of consolidated joint venture
minority interests
    
    
    129,000
    
    
    
    40,000Equity in (income) loss of unconsolidated joint ventures
    
    
    (156,000
    )
    
    
    25,000Distributions from unconsolidated joint venture
    
    
    132,000
    
    
    
    Limited partners interest
    
    
    163,000
    
    
    
    53,000Straight-line rents
    
    
    (967,000
    )
    
    
    (900,000
    )Depreciation and amortization
    
    
    9,883,000
    
    
    
    8,597,000Amortization of intangible lease liabilities
    
    
    (2,589,000
    )
    
    
    (2,628,000
    )Other non-cash provisions
    
    
    792,000
    
    
    
    442,000Increases/decreases in operating assets and liabilities:Cash at consolidated joint ventures
    
    
    25,000
    
    
    
    504,000Rents and other receivables
    
    
    (1,522,000
    )
    
    
    (2,023,000
    )Other assets
    
    
    (709,000
    )
    
    
    (1,241,000
    )Accounts payable and accrued expenses
    
    
    (685,000
    )
    
    
    (345,000
    )Net cash provided by operating activities
    
    
    10,105,000
    
    
    
    5,478,000Cash flow from investing activities:Expenditures for real estate and improvements
    
    
    (26,942,000
    )
    
    
    (23,596,000
    )Investment in unconsolidated joint ventures
    
    
    (8,000
    )
    
    
    (6,000
    )Construction escrows and other
    
    
    63,000
    
    
    
    (1,933,000
    )Net cash (used in) investing activities
    
    
    (26,887,000
    )
    
    
    (25,535,000
    )Cash flow from financing activities:Net advances (repayments) from line of credit
    
    
    24,100,000
    
    
    
    12,000,000Proceeds from sales of common stock
    
    
    4,132,000
    
    
    
    8,988,000Proceeds from mortgage financings
    
    
    
    
    
    
    13,637,000Mortgage repayments
    
    
    (2,022,000
    )
    
    
    (1,937,000
    )Distributions in excess of earnings from consolidated joint venture
minority interests
    
    
    
    
    
    
    (122,000
    )Distributions to limited partners
    
    
    (443,000
    )
    
    
    (348,000
    )Preferred distribution requirements
    
    
    (1,969,000
    )
    
    
    (1,969,000
    )Distributions to common shareholders
    
    
    (9,929,000
    )
    
    
    (6,701,000
    )Payment of deferred financing costs
    
    
    (198,000
    )
    
    
    (197,000
    )Net cash provided by financing activities
    
    
    13,671,000
    
    
    
    23,351,000Net (decrease) increase in cash and cash equivalents
    
    
    (3,111,000
    )
    
    
    3,294,000Cash and cash equivalents at beginning of period
    
    
    17,885,000
    
    
    
    8,601,000Cash and cash equivalents at end of period
    
    $
    14,774,000
    
    
    $
    11,895,000
  7




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Cedar Shopping Centers, Inc.
 
 Notes to Consolidated Financial Statements
 March 31, 2007
 (unaudited)
 Note 1. Organization and Basis of Preparation
     8




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Cedar Shopping Centers, Inc.
Notes to Consolidated Financial Statements
March 31, 2007
(unaudited)
   Note 2. Summary of Significant Accounting Policies
  Real Estate Investments
   9




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##### Table of Contents



Cedar Shopping Centers, Inc.
Notes to Consolidated Financial Statements
March 31, 2007
(unaudited)
   Intangible Lease Asset/Liability
   10




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##### Table of Contents



Cedar Shopping Centers, Inc.
Notes to Consolidated Financial Statements
March 31, 2007
(unaudited)
    Cash and Cash Equivalents
  Restricted Cash
  11




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##### Table of Contents



Cedar Shopping Centers, Inc.
Notes to Consolidated Financial Statements
March 31, 2007
(unaudited)
 Rents and Other Receivables
   Concentration of Credit Risk
  Deferred Charges, Net
  12




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Cedar Shopping Centers, Inc.
Notes to Consolidated Financial Statements
March 31, 2007
(unaudited)
 Mar 31,
    
    Dec 31,2007
    
    2006Deferred lease origination costs (1)
    
    $
    14,984,000
    
    
    $
    15,050,000Deferred financing costs (2)
    
    
    5,785,000
    
    
    
    5,939,000Other deferred charges
    
    
    3,102,000
    
    
    
    1,452,000$
    23,871,000
    
    
    $
    22,441,000
 
 (1)
    
    Deferred lease origination costs include intangible lease assets resulting from purchase
accounting allocations of $11,047,000 and $11,523,000, respectively.(2)
    
    Deferred financing costs are incurred in connection with the Companys secured revolving
credit facility and other long-term debt.  Income Taxes
   Fair Value of Financial Assets and Liabilities
  13




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##### Table of Contents



Cedar Shopping Centers, Inc.
Notes to Consolidated Financial Statements
March 31, 2007
(unaudited)
   Earnings Per Share
  Stock-Based Compensation
   14




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Cedar Shopping Centers, Inc.
Notes to Consolidated Financial Statements
March 31, 2007
(unaudited)
  Three months ended March 31,2007
    
    2006Restricted share grants
    
    
    140,000
    
    
    
    Average fair value per share
    
    $
    14.56
    
    
    $
    Recorded as deferred compensation
    
    $
    2,044,000
    
    
    $
    Total charged to operations
    
    $
    440,000
    
    
    $
    113,000Non-vested shares:Non-vested, beginning of period
    
    
    203,000
    
    
    
    96,000Grants
    
    
    140,000
    
    
    
    Vested during period
    
    
    
    
    
    
    Forfeitures
    
    
    
    
    
    
    Non-vested, end of period
    
    
    343,000
    
    
    
    96,000Value of shares vested during the
period (based on grant price)
    
    $
    
    
    
    $
    
   15




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##### Table of Contents



Cedar Shopping Centers, Inc.
Notes to Consolidated Financial Statements
March 31, 2007
(unaudited)
   SAB 108
  16




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##### Table of Contents



Cedar Shopping Centers, Inc.
Notes to Consolidated Financial Statements
March 31, 2007
(unaudited)
 Supplemental consolidated statement of cash flows information
 Three months ended March 31,2007
    
    
    2006Supplemental disclosure of cash activities:Interest paid (including interest capitalized of
$880,000 and $678,000, respectively)
    
    $
    8,579,000
    
    
    $
    7,166,000Supplemental disclosure of non-cash activities:Additions to deferred compensation plans
    
    
    2,044,000
    
    
    
    Assumption of mortgage loans payable
    
    
    
    
    
    
    (33,643,000
    )Issuance of OP Units
    
    
    (18,000
    )
    
    
    (287,000
    )Purchase accounting allocations:Intangible lease assets
    
    
    5,518,000
    
    
    
    16,875,000Intangible lease liabilities
    
    
    (5,936,000
    )
    
    
    (23,060,000
    )Net valuation increases in assumed mortgage
loans payable (a)
    
    
    
    
    
    
    (601,000
    )Deconsolidation of Red Lion joint venture:Real estate, net
    
    
    
    
    
    $
    18,365,000Mortgage loans payable
    
    
    
    
    
    
    (16,310,000
    )Other assets/liabilities, net
    
    
    
    
    
    
    1,721,000Minority interest
    
    
    
    
    
    
    (2,411,000
    )Investment in and advances to unconsolidated
joint venture, as of January 1, 2006
    
    
    
    
    
    $
    1,365,000
 
 (a)
    
    The net valuation increases in assumed mortgage loans payable result from adjusting the
contract rates of interest (7.0% per annum in 2006) to market rates of interest (5.8% per annum in
2006). Note 3. Common/Preferred Stock Issuances
   17




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Cedar Shopping Centers, Inc.
Notes to Consolidated Financial Statements
March 31, 2007
(unaudited)
  Note 4. Real Estate
    Pro Forma Financial Information (unaudited)
  18




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Cedar Shopping Centers, Inc.
Notes to Consolidated Financial Statements
March 31, 2007
(unaudited)
 Three months ended March 31,2007
    
    2006Revenues
    
    $
    36,276,000
    
    
    $
    34,568,000Net income applicable to common shareholders
    
    $
    3,655,000
    
    
    $
    967,000Per common share:Basic
    
    $
    0.08
    
    
    $
    0.03Diluted
    
    $
    0.08
    
    
    $
    0.03Weighted average number of common shares outstanding:Basic
    
    
    44,112,000
    
    
    
    29,878,000Diluted
    
    
    44,119,000
    
    
    
    30,139,000
 Note 5. Mortgage Loans Payable and Secured Revolving Credit Facility
  At March 31, 2007
    
    At December 31, 2006Interest rates
    
    
    
    
    
    Interest ratesBalance
    
    Weighted
    
    
    
    
    
    Balance
    
    WeightedDescription
    
    outstanding
    
    average
    
    Range
    
    outstanding
    
    average
    
    RangeFixed-rate mortgages
    
    $
    492,763,000
    
    
    
    5.7
    %
    
    
    4.8% - 7.6
    %
    
    $
    494,764,000
    
    
    
    5.7
    %
    
    
    4.8% - 7.6
    %Variable-rate mortgages
    
    
    4,818,000
    
    
    
    8.1
    %
    
    
    8.1%
    
    
    
    4,839,000
    
    
    
    8.1
    %
    
    
    8.1%497,581,000
    
    
    
    5.7
    %
    
    
    
    
    
    
    499,603,000
    
    
    
    5.7
    %Secured revolving credit facility
    
    
    92,570,000
    
    
    
    6.4
    %
    
    
    
    
    
    
    68,470,000
    
    
    
    6.6
    %$
    590,151,000
    
    
    
    5.8
    %
    
    
    
    
    
    $
    568,073,000
    
    
    
    5.8
    %
 Secured Revolving Credit Facility
  19




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##### Table of Contents



Cedar Shopping Centers, Inc.
Notes to Consolidated Financial Statements
March 31, 2007
(unaudited)
  Note 10. Subsequent Events
    20




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##### Table of Contents



Cedar Shopping Centers, Inc.
Notes to Consolidated Financial Statements
March 31, 2007
(unaudited)
   21




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##### Table of Contents



Item 2. Managements Discussion and Analysis of Financial Condition and Results of Operations
  Executive Summary
     22




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##### Table of Contents



Summary of Critical Accounting Policies
   Revenue Recognition
   23




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##### Table of Contents



Real Estate Investments
     24




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Stock-Based Compensation
   25




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##### Table of Contents



Results of Operations
  Comparison of the quarter ended March 31, 2007 to the quarter ended March 31, 2006
 PropertiesheldThree months ended March 31,
    
    Increase
    
    Percentage
    
    Acquisitions/
    
    throughout2007
    
    2006
    
    (decrease)
    
    change
    
    dispositions
    
    both periodsRents and expense recoveries
    
    $
    35,839,000
    
    
    $
    29,786,000
    
    
    $
    6,053,000
    
    
    
    20
    %
    
    $
    5,267,000
    
    
    $
    786,000Property operating expenses
    
    
    10,654,000
    
    
    
    9,104,000
    
    
    
    1,550,000
    
    
    
    17
    %
    
    
    1,245,000
    
    
    
    305,000Depreciation and amortization
    
    
    9,883,000
    
    
    
    8,597,000
    
    
    
    1,286,000
    
    
    
    15
    %
    
    
    1,609,000
    
    
    
    (323,000
    )General and administrative
    
    
    1,998,000
    
    
    
    1,379,000
    
    
    
    619,000
    
    
    
    45
    %
    
    
    n/a
    
    
    
    n/aNon-operating (income) and
expense, net (1)
    
    
    7,489,000
    
    
    
    7,595,000
    
    
    
    (106,000
    )
    
    
    -1
    %
    
    
    n/a
    
    
    
    n/a
 
 (1)
    
    Non-operating income and expense consists principally of interest expense,
amortization of deferred financing costs, and equity in income (loss) of unconsolidated joint ventures. Properties held throughout both periods
 General and administrative expenses.
 Non-operating income and expense.
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Liquidity and Capital Resources
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Net Cash Flows
 Operating Activities
  Investing Activities
  Financing Activities
  Funds From Operations
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Three months ended March 31,2007
    
    2006Net income applicable to common
shareholders
    
    $
    3,655,000
    
    
    $
    1,000,000Add (deduct):Real estate depreciation and amortization
    
    
    9,830,000
    
    
    
    8,571,000Limited partners interest
    
    
    163,000
    
    
    
    53,000Minority interests in consolidated joint ventures
    
    
    395,000
    
    
    
    310,000Minority interests share of FFO applicable to
consolidated joint ventures
    
    
    (491,000
    )
    
    
    (466,000
    )Equity in (income) loss of unconsolidated
joint ventures
    
    
    (156,000
    )
    
    
    25,000FFO from unconsolidated joint ventures
    
    
    234,000
    
    
    
    (3,000
    )Funds from operations
    
    $
    13,630,000
    
    
    $
    9,490,000FFO per common share (assuming conversion
of OP Units):Basic
    
    $
    0.30
    
    
    $
    0.30Diluted
    
    $
    0.30
    
    
    $
    0.30Weighted average number of common shares:Shares used in determination of basic earnings
per share
    
    
    44,112,000
    
    
    
    29,878,000Additional shares assuming conversion
of OP Units (basic)
    
    
    1,985,000
    
    
    
    1,556,000Shares used in determination of basic FFO per share
    
    
    46,097,000
    
    
    
    31,434,000Shares used in determination of diluted earnings
per share
    
    
    44,119,000
    
    
    
    30,139,000Additional shares assuming conversion
of OP Units (diluted)
    
    
    1,999,000
    
    
    
    1,564,000Shares used in determination of diluted FFO per share
    
    
    46,118,000
    
    
    
    31,703,000
 Inflation
  
 Item 3. Quantitative and Qualitative Disclosures About Market Risk
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Item 4. Controls and Procedures
   31




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##### Table of Contents



Part II            Other Information
 
 Item 6. Exhibits
 
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SIGNATURES
   /s/ LEO S. ULLMAN

Leo S. Ullman
    
    
    
    /s/ THOMAS J. OKEEFFE

Thomas J. OKeeffeChairman of the Board, Chief
    
    
    
    Chief Financial OfficerExecutive Officer and President
    
    
    
    (Principal financial officer)(Principal executive officer)
  33