SOURCE: Developers Diversified Realty

April 24, 2008 18:23 ET

Developers Diversified Realty Reports FFO per Diluted Share of $0.83 for the Quarter Ended March 31, 2008

CLEVELAND, OH--(Marketwire - April 24, 2008) - Developers Diversified Realty Corporation (NYSE: DDR), the nation's leading owner, manager and developer of market-dominant shopping centers, today reported operating results for the first quarter ended March 31, 2008.

--  Funds From Operations ("FFO") per diluted share was $0.83 and net
    income per diluted share was $0.28 for the three-month period ended March
    31, 2008, as compared to the prior-year comparable period of $0.91 and
    $0.42, respectively.  The decrease in FFO and net income per share for the
    three-month period ended March 31, 2008, is primarily related to the
    release of certain tax reserves in the first quarter of 2007 and a
    reduction in the amount of transactional income offset by a full three
    months of operating results as a result of the merger with Inland Retail
    Real Estate Trust, Inc.("IRRETI").
    
--  Executed leases during the first quarter totaled approximately 2.9
    million square feet, including 144 new leases and 329 renewals.
    
--  On a cash basis, base rental rates increased 27.8% on new leases, 7.0%
    on renewals and 10.7% overall.
    
--  Core portfolio leased percentage at March 31, 2008 was 95.8%.
    
--  Same store net operating income ("NOI") for the quarter increased 2.0%
    over the prior-year comparable period.
    

Scott Wolstein, Developers Diversified's Chairman and Chief Executive Officer, commented, "We're pleased to report this quarter's financial results, which demonstrate the strength of our portfolio and consistency in our performance, despite challenges in the broader economy. We expect property fundamentals in our portfolio to remain strong as our largest tenant relationships continue to benefit from market share gains due to solid balance sheets and price-sensitive consumers."

"We're pleased with the progress we've made in addressing our 2008 debt and loan maturities and we remain focused on our balance sheet in order to minimize our risk profile while allowing us to pursue opportunities created by the credit market dislocation," Mr. Wolstein continued.

Financial Results:

Net income applicable to common shareholders was $32.9 million, or $0.28 per share (diluted and basic), for the three-month period ended March 31, 2008, as compared to $48.7 million, or $0.42 per share (diluted and basic), for the prior-year comparable period. The decrease in net income for the three-month period ended March 31, 2008, is primarily related to the release of certain tax reserves in the first quarter of 2007 and a reduction in the amount of transactional income offset by a full three months of operating results as a result of the merger with IRRETI.

For the three-month periods ended March 31, 2008 and 2007, FFO per share was $0.83 (diluted and basic) and $0.91 (diluted and basic), respectively. FFO applicable to common shareholders was $99.6 million for the three-month period ended March 31, 2008, as compared to $106.2 million for the three-month period ended March 31, 2007. The decrease in FFO for the three-month period ended March 31, 2008, is a result of the same factors impacting net income as described above.

FFO is a supplemental non-GAAP financial measurement used as a standard in the real estate industry and a widely accepted measure of real estate investment trust ("REIT") performance. Management believes that FFO provides an additional indicator of the financial performance of a REIT. The Company also believes that FFO more appropriately measures the core operations of the Company and provides a benchmark to its peer group. FFO does not represent cash generated from operating activities in accordance with generally accepted accounting principles ("GAAP"), is not necessarily indicative of cash available to fund cash needs and should not be considered as an alternative to net income computed in accordance with GAAP as an indicator of the Company's operating performance or as an alternative to cash flow as a measure of liquidity. FFO is defined and calculated by the Company as net income, adjusted to exclude: (i) preferred share dividends, (ii) gains from disposition of depreciable real estate property, except for those sold through the Company's merchant building program, which are presented net of taxes, (iii) extraordinary items and (v) certain non-cash items. These non-cash items principally include real property depreciation and amortization of intangibles, equity income from joint ventures and equity income from minority equity investments and adding the Company's proportionate share of FFO from its unconsolidated joint ventures and minority equity investments, determined on a consistent basis. Other real estate companies may calculate FFO in a different manner. A reconciliation of net income to FFO is presented in the financial highlights section.

Leasing:

The following results from the first quarter ended March 31, 2008 highlight continued strong leasing activity throughout the portfolio:

--  Executed 144 new leases aggregating 0.8 million square feet and 329
    renewals aggregating 2.1 million square feet.
    
--  On a cash basis, rental rates on new leases increased 27.8% and rental
    rates on renewals increased 7.0%.  Overall, rental rates for new leases and
    renewals increased 10.7%.
    
--  Total portfolio average annualized base rent per occupied square foot,
    excluding Brazil, as of March 31, 2008 was $12.38, as compared to $12.36 at
    March 31, 2007.
    
--  Core portfolio leased rate was 95.8% as of March 31, 2008, as compared
    to 96.0% at March 31, 2007.
    

The Company and its joint ventures (at 100%) estimate total annual recurring leasing capital expenditures to be approximately $25 million ($0.21 per square foot of owned GLA) in 2008.

Acquisitions:

In January 2008, through a 50% consolidated joint venture interest with Holborn Brampton Limited Partnership, the Company acquired 43 acres of land in Brampton, Ontario, Canada, for approximately $32.6 million to develop a retail shopping center.

Dispositions:

In the first quarter of 2008, the Company sold two shopping centers, including one which was considered held for sale at December 31, 2007, aggregating approximately 0.1 million square feet for an aggregate sales price of $8.0 million.

Macquarie DDR Trust Share Purchase:

In February 2008, the Company began purchasing units of Macquarie DDR Trust ("MDT"), an Australian Based Listed Property Trust sponsored by Macquarie Bank Limited (ASX: MBL), an international investment bank, advisor and manager of specialized real estate funds. MDT is DDR's joint venture partner in the DDR Macquarie Fund LLC joint venture ("the Fund"). Through the combination of its purchase of the units in MDT and its direct and indirect ownership of the Fund, DDR is entitled to an approximate 17.2% of the economic interest in the Fund at March 31, 2008. Through April 21, 2008, the Company has purchased 59.7 million MDT units in open market transactions at an aggregate cost of approximately $27.5 million, which reflects a weighted-average price per unit of $0.46.

Wholly-Owned and Consolidated Joint Venture Development:

The Company currently has the following wholly-owned and consolidated joint venture shopping center projects under construction:

                                                      Estimated
                                            Expected   Initial
                                            Net Cost   Anchor
Location                        Owned GLA ($ Millions) Opening* Description
                                --------- ----------- --------- -----------
Ukiah (Mendocino),                                               Community
 California **                    409,900 $     101.4     1H 10     Center
                                                                 Community
Miami (Homestead), Florida        275,839        74.9     2H 08     Center
Miami, Florida                    400,685       142.6     2H 06  Mixed Use
                                                                 Community
Tampa (Brandon), Florida          241,700        55.5     2H 09     Center
                                                                 Community
Tampa (Wesley Chapel), Florida     73,360        13.7     2H 09     Center
                                                                 Community
Boise (Nampa), Idaho              450,855       123.1     2H 07     Center
Boston, Massachusetts                                            Community
 (Seabrook, New Hampshire)        210,180        50.1     2H 09     Center
                                                                 Community
Elmira (Horseheads), New York     350,987        53.0     1H 07     Center
Raleigh (Apex), North Carolina                                   Community
 (Promenade)                       81,780        17.9     2H 09     Center
Raleigh (Apex), North Carolina
 (Beaver Creek Crossing, Phase                                   Community
 II)                              162,270        50.8     2H 10     Center
                                                                 Community
Austin (Kyle), Texas **           325,005        60.0     2H 09     Center
                                --------- -----------
Total                           2,982,561 $     743.0
                                ========= ===========

    *     1H = First Half, 2H = Second Half
    **    Consolidated 50% Joint Venture

At March 31, 2008, $430.3 million of costs were incurred in relation to the Company's 11 development projects under construction.

In addition to these current developments, the Company and its Joint Ventures are scheduled to commence construction on various other developments, including several international projects. The Company has also identified several additional potential development opportunities reflecting an aggregate estimated cost of over $1 billion. While there are no assurances any of these projects will be undertaken, they provide a source of potential development projects over the next several years. As of March 31, 2008, the projected unleveraged GAAP return on the Company's aggregate development and redevelopment pipeline is approximately 10%.

Unconsolidated Joint Venture Development:

The Company's unconsolidated joint ventures have the following shopping center projects under construction. At March 31, 2008, $283.7 million of costs had been incurred in relation to these development projects.

                        DDR's                         Estimated
                      Effective             Expected   Initial
                      Ownership     Owned   Net Cost   Anchor
Location              Percentage     GLA  ($ Millions) Opening* Description
                      ----------  --------- --------- --------- -----------
Kansas City                                                       Community
 (Merriam), Kansas          20.0%   202,116 $    46.8     2H 08      Center
Detroit (Bloomfield                                               Lifestyle
 Hills), Michigan           10.0%   882,197     192.5     2H 09      Center
                                                                  Lifestyle
Dallas (Allen), Texas       10.0%   797,665     171.2     1H 08      Center
                                                                   Enclosed
Manaus, Brazil              47.4%   477,630      82.6     1H 09        Mall
                                  --------- ---------
Total                             2,359,608 $   493.1
                                  ========= =========

    * 1H = First Half, 2H = Second Half

Wholly-Owned and Consolidated Joint Venture Redevelopments and Expansions:

The Company is currently expanding/redeveloping the following wholly-owned and consolidated joint venture shopping centers at a projected aggregate net cost of approximately $152.5 million. At March 31, 2008, approximately $99.6 million of costs had been incurred in relation to these projects.

Property                       Description
----------------------------   -------------------------------------------
Miami (Plantation), Florida    Redevelop shopping center to include Kohl's
                                and additional junior tenants
Chesterfield, Michigan         Construct 25,400 sf of small shop space and
                                retail space
Olean, New York                Wal-Mart expansion and tenant relocation
Fayetteville, North Carolina   Redevelop 18,000 sf of small shop space and
                                construct an outparcel building
Akron (Stow), Ohio             Redevelop former K-Mart space and develop
                                new outparcels
Dayton (Huber Heights), Ohio   Construct 45,000 sf junior tenant

Unconsolidated Joint Venture Redevelopments and Expansions:

The Company's unconsolidated joint ventures are currently expanding/redeveloping the following shopping centers at a projected net cost of $458.9 million, which includes original acquisition costs related to assets acquired for development. At March 31, 2008, approximately $404.4 million of costs had been incurred in relation to these projects. The following is a summary of these joint venture redevelopment and expansion projects:

                          DDR's
                        Effective
                        Ownership
Property                Percentage            Description
----------------------  ---------  ---------------------------------------
Buena Park, California     20.0%   Large-scale redevelopment of enclosed
                                    mall to open-air format
Los Angeles (Lancaster),           Relocate Wal-Mart and redevelop former
 California                21.0%    Wal-Mart space
Chicago (Deer Park),               Re-tenant former retail shop space with
 Illinois                 25.75%    junior tenant and construct 13,500 sf
                                    multi-tenant outparcel building
Benton Harbor, Michigan    20.0%   Construct 89,000 sf of anchor space and
                                    retail shops
Kansas City, Missouri      20.0%   Relocate retail shops and re-tenant
                                    former retail shop space
Cincinnati, Ohio           18.0%   Redevelop former JCPenney space

Financing:

In March 2008, the Company entered into mortgage loans with Metropolitan Life Insurance Company on six of its shopping center assets, four of which are located in the continental U.S. and two of which are located in Puerto Rico, for an aggregate of $350.0 million with a maturity date of April 2013. The loans have a fixed interest rate of 5.0% and provide for interest-only debt service payments with a balloon payment at maturity. The Company used the proceeds from the loans to repay scheduled 2008 debt maturities and the remaining balance to repay revolving credit facilities.

Other loan closings during the quarter included a $71 million construction loan on our Homestead, Florida development and the refinancing of $72 million of joint venture debt. In addition, our 50% joint venture with Sonae Sierra, which owns and develops retail real estate in Brazil, closed on a R$50 million Reais credit facility in late February.

In January 2008, the Company repaid unsecured notes aggregating $100.0 million through borrowings on the Company's revolving credit facilities.


Developers Diversified Realty Corporation currently owns and manages over 740 retail operating and development properties in 45 states, plus Puerto Rico, Brazil, Russia and Canada, totaling approximately 162 million square feet. Developers Diversified Realty Corporation is a self-administered and self-managed REIT operating as a fully integrated real estate company which acquires, develops, leases and manages shopping centers.

A copy of the Company's Supplemental Financial/Operational package is available to all interested parties upon request at our corporate office to Michelle M. Dawson, Vice President of Investor Relations, Developers Diversified Realty Corporation, 3300 Enterprise Parkway, Beachwood, OH 44122 or on our Web site which is located at http://www.ddr.com.

Developers Diversified Realty Corporation considers portions of this information to be forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21 E of the Securities Exchange Act of 1934, both as amended, with respect to the Company's expectation for future periods. Although the Company believes that the expectations reflected in such forward-looking statements are based upon reasonable assumptions, it can give no assurance that its expectations will be achieved. For this purpose, any statements contained herein that are not historical fact may be deemed to be forward-looking statements. There are a number of important factors that could cause the results of the Company to differ materially from those indicated by such forward-looking statements, including, among other factors, local conditions such as oversupply of space or a reduction in demand for real estate in the area, competition from other available space, dependence on rental income from real property, the loss of a major tenant, constructing properties or expansions that produce a desired yield on investment or inability to enter into definitive agreements with regard to our financing arrangements or our failure to satisfy conditions to the completion of these arrangements. For more details on the risk factors, please refer to the Company's Form 10-K as of December 31, 2007.




                DEVELOPERS DIVERSIFIED REALTY CORPORATION
                           Financial Highlights
                  (In thousands - except per share data)



                                                      Three-Month Periods
                                                        Ended March 31,
Revenues:                                               2008       2007
                                                      ---------  ---------
   Minimum rents (A)                                  $ 160,852  $ 149,825
   Percentage and overage rents (A)                       3,006      2,005
   Recoveries from tenants                               53,602     45,722
   Ancillary and other property income                    4,662      4,702
   Management, development and other fee income          16,287      9,082
   Other (B)                                              3,487      7,709
                                                      ---------  ---------
                                                        241,896    219,045
                                                      ---------  ---------
Expenses:
   Operating and maintenance                             36,869     27,342
   Real estate taxes                                     27,675     25,810
   General and administrative (C)                        20,715     21,518
   Depreciation and amortization                         57,139     52,096
                                                      ---------  ---------
                                                        142,398    126,766
                                                      ---------  ---------
Other income (expense):
   Interest income                                          582      3,682
   Interest expense                                     (62,214)   (60,471)
   Other expense (D)                                       (497)      (225)
                                                      ---------  ---------
                                                        (62,129)   (57,014)
                                                      ---------  ---------
Income before equity in net income of joint ventures,
 minority equity interests, income tax (expense)
 benefit of taxable REIT subsidiaries and franchise
 taxes, discontinued operations and gain on
 disposition of real estate, net of tax                  37,369     35,265
Equity in net income of joint ventures (E)                7,388      6,281
Minority equity interests (F)                            (2,371)    (5,839)
Income tax (expense) benefit of taxable REIT
 subsidiaries and franchise taxes (G)                    (1,045)    15,061
                                                      ---------  ---------
Income from continuing operations                        41,341     50,768
(Loss) income from discontinued operations (H)             (284)     5,758
                                                      ---------  ---------
Income before gain on disposition of real estate         41,057     56,526
Gain on disposition of real estate, net of tax            2,367      6,010
                                                      ---------  ---------
Net income                                            $  43,424  $  62,536
                                                      =========  =========
Net income applicable to common shareholders          $  32,857  $  48,744
                                                      =========  =========
Funds From Operations ("FFO"):
   Net income applicable to common shareholders       $  32,857  $  48,744
   Depreciation and amortization of real estate
    investments                                          54,362     52,449
   Equity in net income of joint ventures (E)            (7,388)    (6,281)
   Joint ventures' FFO (E)                               19,181     13,559
   Minority equity interests (OP Units) (F)                 595        569
   Gain on disposition of depreciable real estate           (19)    (2,857)
                                                      ---------  ---------
   FFO applicable to common shareholders                 99,588    106,183
   Preferred dividends                                   10,567     13,792
                                                      ---------  ---------
   FFO                                                $ 110,155  $ 119,975
                                                      =========  =========
   Per share data:
      Earnings per common share
         Basic                                        $    0.28  $    0.42
                                                      =========  =========
         Diluted                                      $    0.28  $    0.42
                                                      =========  =========
   Dividends Declared                                 $    0.69  $    0.66
                                                      =========  =========
   Funds From Operations -  Basic  (I)                $    0.83  $    0.91
                                                      =========  =========
   Funds From Operations - Diluted  (I)               $    0.83  $    0.91
                                                      =========  =========
   Basic - average shares outstanding (I)               119,148    114,851
                                                      =========  =========
   Diluted - average shares outstanding (I)             119,349    115,661
                                                      =========  =========


(A) Increases in base and percentage rental revenues for the three-month
    period ended March 31, 2008, as compared to the prior-year comparable
    period, aggregated $12.1 million, consisting of $3.2 million related to
    leasing of core portfolio properties (an increase of 2.5% from 2007),
    $17.8 million from the acquisition of assets and the merger with
    IRRETI, $1.4 million related to developments and redevelopments and
    $0.4 million from an increase in occupancy at the business centers.
    These amounts were offset by a decrease of $10.7 million due to the
    disposition of properties in 2007 and 2008.  Included in the rental
    revenues for the three-month periods ended March 31, 2008 and 2007, is
    approximately $2.8 million and $3.1 million, respectively, of revenue
    resulting from the recognition of straight-line rents.

(B) Other income for the three-month periods ended March 31, 2008 and 2007
    was comprised of the following (in millions):


                                       Three-Month Periods
                                         Ended March 31,
                                         2008       2007
                                      ---------- ----------
    Acquisition fees                  $        - $      6.3
    Lease termination fees                   3.3        1.3
    Other miscellaneous                      0.2        0.1
                                      ---------- ----------
                                      $      3.5 $      7.7
                                      ========== ==========


(C) General and administrative expenses include internal leasing salaries,
    legal salaries and related expenses associated with the releasing of
    space, which are charged to operations as incurred.  For the
    three-month periods ended March 31, 2008 and 2007, general and
    administrative expenses were approximately 4.3% and 5.7%, respectively,
    of total revenues, including joint venture revenues.  For the
    three-month period ended March 31, 2007, the Company recorded a charge
    of approximately $4.1 million to general and administrative expense in
    connection with the Company's former president's departure as an
    executive officer.  Excluding this charge, general and administrative
    expenses were 4.6% of total revenues for the three-month period ended
    March 31, 2007.

(D) Other income/expense primarily relates to abandoned acquisition and
    development project costs.

(E) The following is a summary of the combined operating results of the
    Company's joint ventures:


                                                       Three-Month Periods
                                                         Ended March 31,
                                                        2008       2007
                                                      ---------  ---------
     Revenues from operations (a)                     $ 238,187  $ 145,258
                                                      ---------  ---------

     Operating expense                                   80,918     48,443
     Depreciation and amortization of
      real estate investments                            56,604     30,502
     Interest expense                                    77,295     45,669
                                                      ---------  ---------
                                                        214,817    124,614
                                                      ---------  ---------
     Income from operations before tax
      expense and discontinued operations                23,370     20,644
     Income tax expense                                  (3,780)    (2,249)
     Loss from discontinued operations,
      net of tax                                              -       (157)
     Loss on disposition of discontinued
      operations, net of tax                                 (2)      (341)
     Other gain, net                                      6,439          -
                                                      ---------  ---------
     Net income                                       $  26,027  $  17,897
                                                      =========  =========
     DDR ownership interests (b)                      $   7,489  $   6,511
                                                      =========  =========

     FFO from joint ventures are summarized
      as follows:
       Net income                                     $  26,027  $  17,897
       Loss on disposition of real estate,
        including discontinued operations                     2          -
       Depreciation and amortization of
        real estate investments                          56,604     30,963
                                                      ---------  ---------
                                                      $  82,633  $  48,860
                                                      =========  =========
       DDR ownership interests (b)                    $  19,181  $  13,559
                                                      =========  =========
       DDR joint venture distributions
        received, net (c)                             $  13,700  $  10,218
                                                      =========  =========


    (a) Revenues for the three-month periods ended March 31, 2008 and 2007
        included approximately $2.3 million and $1.3 million, respectively,
        resulting from the recognition of straight-line rents of which the
        Company's proportionate share was $0.3 million and $0.2 million,
        respectively.

    (b) The Company's share of joint venture net income decreased by $0.1
        million and $0.3 million for the three-month periods ended March
        31, 2008 and 2007, respectively.  These adjustments reflect basis
        differences impacting amortization and depreciation and gain on
        dispositions.

        At March 31, 2008 and 2007, the Company owned joint venture
        interests, excluding consolidated joint ventures, in 273 and 212
        shopping center properties, respectively.  In addition, at March
        31, 2008 and 2007, the Company owned 44 and 48 shopping center
        sites formerly owned by Service Merchandise, respectively, through
        its 20% owned joint venture with Coventry II.

    (c) Distributions may include funds received from asset sales and
        refinancings in addition to ongoing operating distributions.


(F) Minority equity interests are comprised of the following:
                                         Three-Month Periods
                                           Ended March 31,
                                          2008       2007
                                        ---------- ----------
      Minority equity interests         $    1,776 $    1,488
      Operating partnership units              595        569
      Preferred operating partnership
       units                                     -      3,782
                                        ---------- ----------
                                        $    2,371 $    5,839
                                        ========== ==========

    The preferred operating partnership units were redeemed in June 2007.

(G) During the first quarter of 2007, the Company released to income
    approximately $15.0 million of previously established valuation
    allowances against certain deferred tax assets as management had
    determined, due to several factors, that it is more likely than not
    that the deferred tax asset will be realized. The release was primarily
    due to the Company's increased use of its taxable REIT subsidiaries
    relating to its merchant building program.

(H) The operating results relating to assets classified as discontinued
    operations are summarized as follows:

                                        Three-Month Periods
                                          Ended March 31,
                                          2008       2007
                                        ---------  ----------
      Revenues                          $     119  $   11,916
                                        ---------  ----------

      Expenses:
         Operating                            134       3,257
         Interest, net                         10       3,220
         Depreciation                          68       2,500
                                        ---------  ----------
            Total expenses                    212       8,977
                                        ---------  ----------
         (Loss) income before (loss)
          gain on  disposition of real
          estate                              (93)      2,939
         (Loss) gain on disposition of
          real estate                        (191)      2,819
                                        ---------  ----------
         Net (loss) income              $    (284) $    5,758
                                        =========  ==========

(I) For purposes of computing FFO per share (basic), the weighted average
    shares outstanding were adjusted to reflect the conversion of
    approximately 0.9 million Operating Partnership Units (OP Units)
    outstanding at March 31, 2008 and 2007, into 0.9 million common shares
    of the Company for both of the three-month periods ended March 31, 2008
    and 2007, respectively, on a weighted average basis.  The weighted
    average diluted shares and OP Units outstanding, for purposes of
    computing FFO, were approximately 120.6 million and 116.9 million for
    the three-month periods ended March 31, 2008 and 2007, respectively.




                DEVELOPERS DIVERSIFIED REALTY CORPORATION
                           Financial Highlights
                              (In thousands)


Selected Balance Sheet Data:
                                                   March 31,   December 31,
                                                     2008 (A)     2007 (A)
                                                  -----------  -----------
Assets:
Real estate and rental property:
   Land                                           $ 2,103,771  $ 2,142,942
   Buildings                                        5,945,652    5,933,890
   Fixtures and tenant improvements                   245,980      237,117
                                                  -----------  -----------
                                                    8,295,403    8,313,949
Less: Accumulated depreciation                     (1,077,841)  (1,024,048)
                                                  -----------  -----------
                                                    7,217,562    7,289,901
   Construction in progress                           782,534      664,926
Assets held for sale                                        -        5,796
                                                  -----------  -----------
Real estate, net                                    8,000,096    7,960,623

Investments in and advances to joint ventures         646,627      638,111
Cash                                                   70,964       49,547
Restricted cash                                        49,635       58,958
Notes receivable                                       19,076       18,557
Receivables, including straight-line rent, net        197,552      199,354
Other assets, net                                     169,793      164,666
                                                  -----------  -----------
                                                  $ 9,153,743  $ 9,089,816
                                                  ===========  ===========

Liabilities:
Indebtedness:
   Revolving credit facilities                    $   741,818  $   709,459
   Unsecured debt                                   2,522,431    2,622,219
   Mortgage and other secured debt                  2,445,552    2,259,336
                                                  -----------  -----------
                                                    5,709,801    5,591,014
   Dividends payable                                   89,606       85,851
   Other liabilities                                  281,835      285,245
                                                  -----------  -----------
                                                    6,081,242    5,962,110
Minority equity interests                             130,857      128,881
Shareholders' equity                                2,941,644    2,998,825
                                                  -----------  -----------
                                                  $ 9,153,743  $ 9,089,816
                                                  ===========  ===========

(A) Amounts include the consolidation of Mervyns, a 50% owned joint
    venture, which includes $405.8 million of real estate assets at March
    31, 2008 and December 31, 2007, $258.5 million of mortgage debt at
    March 31, 2008 and December 31, 2007, and $73.4 million and $74.6
    million of minority equity interest at March 31, 2008 and December 31,
    2007, respectively.




                DEVELOPERS DIVERSIFIED REALTY CORPORATION
                           Financial Highlights
                              (in thousands)


Selected Balance Sheet Data (Continued):

Combined condensed balance sheets relating to the Company's joint ventures
are as follows:

                                                   March 31,   December 31,
                                                      2008         2007
                                                  -----------  -----------

Land                                              $ 2,386,799  $ 2,384,069
Buildings                                           6,269,832    6,253,167
Fixtures and tenant improvements                      113,309      101,115
                                                  -----------  -----------
                                                    8,769,940    8,738,351
Less: Accumulated depreciation                       (463,607)    (412,806)
                                                  -----------  -----------
                                                    8,306,333    8,325,545
Construction in progress                              260,845      207,387
                                                  -----------  -----------
Real estate, net                                    8,567,178    8,532,932
Receivables, including straight-line rent, net        119,732      124,540
Leasehold interests                                    13,634       13,927
Other assets                                          439,253      365,925
                                                  -----------  -----------
                                                  $ 9,139,797  $ 9,037,324
                                                  ===========  ===========

Mortgage debt (a)                                 $ 5,581,082  $ 5,551,839
Notes and accrued interest payable to DDR               8,196        8,492
Other liabilities                                     269,393      201,083
                                                  -----------  -----------
                                                    5,858,671    5,761,414
Accumulated equity                                  3,281,126    3,275,910
                                                  -----------  -----------
                                                  $ 9,139,797  $ 9,037,324
                                                  ===========  ===========

(a) The Company's proportionate share of joint venture debt aggregated
    approximately $1,070.9 million and $1,034.1 million at March 31, 2008
    and December 31, 2007, respectively.

Contact Information

  • Contact:
    Scott A. Wolstein
    Chairman and
    Chief Executive Officer
    216-755-5500

    Michelle M. Dawson
    Vice President of Investor Relations
    216-755-5500
    Email Contact