Item 1A.Item1A. Risk Factors

We are subject to certain business and legal risks including, but not limited to, the following:

Risks Related to Our Business and Operations

Adverse global market and economic conditions may impede our ability to generate sufficient income and maintain our properties.

Our properties consist primarily of open-air shopping centers and other retail properties. Our performance, therefore, is generally linked to economic conditions in the market for retail space. The economic performance and value of our properties is subject to all of the risks associated with owning and operating real estate, including but not limited to:

Competition may limit our ability to purchase new properties or generate sufficient income from tenants and may decrease the occupancy and rental rates for our properties.

Numerous commercial developers and real estate companies compete with us in seeking tenants for our existing properties and properties for acquisition. New regional malls, open-air lifestyle centers or other retail shopping centers with more convenient locations or better rents may attract tenants or cause them to seek more favorable lease terms at or prior to renewal. Retailers at our properties may face increasing competition from other retailers, e-commerce, outlet malls, discount shopping clubs, direct mail, telemarketing or home shopping networks, all of which could (i) reduce rents payable to us; (ii) reduce our ability to attract and retain tenants at our properties; or (iii) lead to increased vacancy rates at our properties. We may fail to anticipate the effects of changes in consumer buying practices, particularly of growing online sales and the resulting retailing practices and space needs of our tenants or a general downturn in our tenants’ businesses, which may cause tenants to close stores or default in payment of rent.

We face competition in the acquisition or development of real property from others engaged in real estate investment that could increase our costs associated with purchasing and maintaining assets. Some of these competitors may have greater financial resources than we do. This could result in competition for the acquisition of properties for tenants who lease or consider leasing space in our existing and subsequently acquired properties and for other real estate investment or development opportunities.

Our performance depends on our ability to collect rent from tenants, including anchor tenants, our tenants’ financial condition and our tenants maintaining leases for our properties.

At any time, our tenants may experience a downturn in their business that may significantly weaken their financial condition. As a result, our tenants may delay a number of lease commencements, decline to extend or renew leases upon expiration, fail to make rental payments when due, close stores or declare bankruptcy. Any of these actions could result in the termination of tenants’ leases and the loss of rental income attributable to these tenants’ leases. In the event of a default by a tenant, we may experience delays and costs in enforcing our rights as landlord under the terms of the leases.

In addition, multiple lease terminations by tenants, including anchor tenants, or a failure by multiple tenants to occupy their premises in a shopping center could result in lease terminations or significant reductions in rent by other tenants in the same shopping centers under the terms of some leases. In that event, we may be unable to re-lease the vacated space at attractive rents or at all, and our rental payments from our continuing tenants could significantly decrease. The occurrence of any of the situations described above, particularly involving a substantial tenant with leases in multiple locations, could have a material adverse effect on our financial condition, results of operations and cash flows.

A tenant that files for bankruptcy protection may not continue to pay us rent. A bankruptcy filing by, or relating to, one of our tenants or a lease guarantor would bar all efforts by us to collect pre-bankruptcy debts from the tenant or the lease guarantor, or their property, unless the bankruptcy court permits us to do so. A tenant bankruptcy could delay our efforts to collect past due balances under the relevant leases and could ultimately preclude collection of these sums. If a lease is rejected by a tenant in bankruptcy, we would have only a general unsecured claim for damages. As a result, it is likely that we would recover substantially less than the full value of any unsecured claims we hold, if at all.

We may be unable to sell our real estate property investments when appropriate or on termsfavorable to us.

Real estate property investments are illiquid and generally cannot be disposed of quickly. In addition, the Code restricts a REIT’s ability to dispose of properties that are not applicable to other types of real estate companies. Therefore, we may not be able to vary our portfolio in response to economic or other conditions promptly or on terms favorable to us within a timeframe that we would need.

We may acquire or develop properties or acquire other real estate related companies, and this may create risks.

We may acquire or develop properties or acquire other real estate related companies when we believe that an acquisition or development is consistent with our business strategies. We may not succeed in consummating desired acquisitions or in completing developments on time or within budget. When we do pursue a project or acquisition, we may not succeed in leasing newly developed or acquired properties at rents sufficient to cover the costs of acquisition or development and operations. Difficulties in integrating acquisitions may prove costly or time-consuming and could divert management’s attention from other activities. Acquisitions or developments in new markets or industries where we do not have the same level of market knowledge may result in poorer than anticipated performance. We may also abandon acquisition or development opportunities that management has begun pursuing and consequently fail to recover expenses already incurred and will have devoted management’s time to a matter not consummated. Furthermore, our acquisitions of new properties or companies will expose us to the liabilities of those properties or companies, some of which we may not be aware of at the time of the acquisition. In addition, development of our existing properties presents similar risks.

Newly acquired or re-developed properties may have characteristics or deficiencies currently unknown to us that affect their value or revenue potential. It is also possible that the operating performance of these properties may decline under our management. As we acquire additional properties, we will be subject to risks associated with managing new properties, including lease-up and tenant retention. In addition, our ability to manage our growth effectively will require us to successfully integrate our new acquisitions into our existing management structure. We may not succeed with this integration or effectively manage additional properties, particularly in secondary markets. Also, newly acquired properties may not perform as expected.

Unsuccessful real estate under development activities or a slowdown in real estate under development activities could have a direct impact on our growth, results of operations and cash flows.

Real estate under development is a component of our operating and investment strategy. We intend to continue pursuing select real estate under development opportunities for long-term investment and construction of retail and/or mixed-use properties as opportunities arise. We expect to phase in construction until sufficient preleasing is reached. Our real estate under development and construction activities include the following risks:

Additionally, new real estate under development activities typically require substantial time and attention from management, and the time frame required for development, construction and lease-up of these properties could require several years to realize any significant cash return. The foregoing risks could hinder our growth and have an adverse effect on our financial condition, results of operations and cash flows.

Construction and development projects are subject to risks that materially increase the costs of completion.

In the event that we decide to develop and construct new properties or redevelop existing properties, we will be subject to risks and uncertainties associated with construction and development. These risks include, but are not limited to, risks related to obtaining all necessary zoning, land-use, building occupancy and other governmental permits and authorizations, risks related to the environmental concerns of government entities or community groups, risks related to changes in economic and market conditions between development commencement and stabilization, risks related to construction labor disruptions, adverse weather, acts of God or shortages of materials which could cause construction delays and risks related to increases in the cost of labor and materials which could cause construction costs to be greater than projected and adversely impact the amount of our development fees or our financial condition, results of operations and cash flows.

We do not have exclusive control over our joint venture and preferred equity investments, such that we are unable to ensure that our objectives will be pursued.

We have invested in some properties as a co-venturer or partner, instead of owning directly. In these investments, we do not have exclusive control over the development, financing, leasing, management and other aspects of these investments. As a result, the co-venturer or partner might have interests or goals that are inconsistent with ours, take action contrary to our interests or otherwise impede our objectives. These investments involve risks and uncertainties. The co-venturer or partner may fail to provide capital or fulfill its obligations, which may result in certain liabilities to us for guarantees and other commitments. Conflicts arising between us and our partners may be difficult to manage and/or resolve and it could be difficult to manage or otherwise monitor the existing business arrangements. The co-venturer or partner also might become insolvent or bankrupt, which may result in significant losses to us.

In addition, joint venture arrangements may decrease our ability to manage risk and implicate additional risks, such as:

Our joint venture and preferred equity investments generally own real estate properties for which the economic performance and value is subject to all the risks associated with owning and operating real estate as described above.

We may not be able to recover our investments in mortgage receivables or other investments, which may result in significant losses to us.

In the event of a default by a borrower, it may be necessary for us to foreclose our mortgage or engage in costly negotiations. Delays in liquidating defaulted mortgage loans and repossessing and selling the underlying properties could reduce our investment returns. Furthermore, in the event of default, the actual value of the property securing the mortgage may decrease. A decline in real estate values will adversely affect the value of our loans and the value of the mortgages securing our loans.

Our mortgage receivables may be or become subordinated to mechanics' or materialmen's liens or property tax liens. In these instances, we may need to protect a particular investment by making payments to maintain the current status of a prior lien or discharge it entirely. Where that occurs, the total amount we recover may be less than our total investment, resulting in a loss. In the event of a major loan default or several loan defaults resulting in losses, our investments in mortgage receivables would be materially and adversely affected.

The economic performance and value of our other investments which we do not control and are in retail operations, are subject to risks associated with owning and operating retail businesses, including:

A decline in the value of our other investments may require us to recognize an other-than-temporary impairment (“OTTI”) against such assets. When the fair value of an investment is determined to be less than its amortized cost at the balance sheet date, we assess whether the decline is temporary or other-than-temporary. If we intend to sell an impaired asset, or it is more likely than not that we will be required to sell the impaired asset before any anticipated recovery, then we must recognize an OTTI through charges to earnings equal to the entire difference between the asset’s amortized cost and its fair value at the balance sheet date. When an OTTI is recognized through earnings, a new cost basis is established for the asset and the new cost basis may not be adjusted through earnings for subsequent recoveries in fair value.

We intend to continue to sell our non-strategic assets and may not be able to recover our investments, which may result in significant losses to us.

There can be no assurance that we will be able to recover the current carrying amount of all of our non-strategic properties and investments and those of our unconsolidated joint ventures in the future. Our failure to do so would require us to recognize impairment charges for the period in which we reached that conclusion, which could materially and adversely affect our financial condition, results of operations and cash flows.

We have substantially completed our efforts to exit our investments in Mexico, South America and Canada, however, we cannot predict the impact of laws and regulations affecting these international operations, including the United States Foreign Corrupt Practices Act, or the potential that we may face regulatory sanctions.

Our international operations have included properties in Canada, Mexico, Chile, Brazil and Peru and are subject to a variety of United States and foreign laws and regulations, including the United States Foreign Corrupt Practices Act (“FCPA”) and foreign tax laws and regulations. Although we have substantially completed our efforts to exit our investments in Mexico, South America and Canada, we cannot assure you that our past or any current international operations will continue to be found to be in compliance with such laws or regulations. In addition, we cannot predict the manner in which such laws or regulations might be administered or interpreted, or when, or the potential that we may face regulatory sanctions or tax audits as a result of our international operations.

We face risks relating to cybersecurity attacks which could adversely affect our business, cause loss of confidential information and disrupt operations.

A cyber incident is considered to be any adverse event that threatens the confidentiality, integrity, or availability of our information resources. More specifically, a cyber incident is an intentional attack or an unintentional event that can include gaining unauthorized access to systems to disrupt operations, corrupt data, or steal confidential information. We may face cyber incidents and security breaches through malware, computer viruses, attachments to e-mails, persons inside our organization or persons with access to systems inside our organization and other significant disruptions of our IT networks and related systems. The risk of a cybersecurity breach or disruption, particularly through a cyber incident, including by computer hackers, foreign governments and cyber terrorists, has generally increased as the number, intensity and sophistication of attempted attacks and intrusions from around the world have increased. Our IT networks and related systems are essential to the operation of our business and our ability to perform day-to-day operations and, in some cases, may be critical to the operations of certain of our tenants. Although we make efforts to maintain the security and integrity of these types of IT networks and related systems, and we have implemented various measures to manage the risk of a security breach or disruption, there can be no assurance that our security efforts and measures will be effective or that attempted security breaches or disruptions would not be successful or damaging.

While we maintain some of our own critical information technology systems, we also depend on third parties to provide important information technology services relating to several key business functions, such as payroll, human resources, electronic communications and certain finance functions. Our measures to prevent, detect and mitigate these threats, including password protection, firewalls, backup servers, threat monitoring and periodic penetration testing, may not be successful in preventing a data breach or limiting the effects of a breach. Furthermore, the security measures employed by third-party service providers may prove to be ineffective at preventing breaches of their systems.

The primary risks that could directly result from the occurrence of a cyber incident include operational interruption, damage to our relationship with our tenants, and private data exposure. Our financial results may be negatively impacted by such an incident or resulting negative media attention.

A cyber incident could:

Moreover, cyber incidents perpetrated against our tenants, including unauthorized access to customers’ credit card data and other confidential information, could diminish consumer confidence and consumer spending and negatively impact our business.

We may be subject to liability under environmental laws, ordinances and regulations.

Under various federal, state, and local laws, ordinances and regulations, we may be considered an owner or operator of real property and may be responsible for paying for the disposal or treatment of hazardous or toxic substances released on or in our property, as well as certain other potential costs relating to hazardous or toxic substances (including governmental fines and injuries to persons and property). This liability may be imposed whether or not we knew about, or were responsible for, the presence of hazardous or toxic substances.

Natural disasters and severe weather conditions could have an adverse impact on our financial condition, results of operations and cash flows.

Real estate properties are subject to natural disasters and severe weather conditions such as hurricanes, tornados, earthquakes, snow storms, floods and fires. The occurrence of natural disasters or severe weather conditions could cause substantial damages or losses to our properties which could exceed any applicable insurance coverage and could also cause delays in development projects, negatively impact tenant demand for our properties and result in increased costs for future property insurance.

Risks Related to Our Debt and Equity Securities

We may be unable to obtain financing through the debt and equities market, which would have a material adverse effect on our growth strategy, our results of operations and our financial condition.

We cannot assure you that we will be able to access the credit and/or equity markets to obtain additional debt or equity financing or that we will be able to obtain financing on terms favorable to us. The inability to obtain financing on a timely basis could have negative effects on our business, such as:

Adverse changes in our credit ratings could impair our ability to obtain additional debt and equity financing on terms favorable to us, if at all, and could significantly reduce the market price of our publicly traded securities.

We are subject to financial covenants that may restrict our operating and acquisition activities.

Our revolving credit facility and the indentures under which our senior unsecured debt is issued contain certain financial and operating covenants, including, among other things, certain coverage ratios and limitations on our ability to incur debt, make dividend payments, sell all or substantially all of our assets and engage in mergers and consolidations and certain acquisitions. These covenants may restrict our ability to pursue certain business initiatives or certain acquisition transactions that might otherwise be advantageous. In addition, failure to meet any of the financial covenants could cause an event of default under our revolving credit facility and the indentures and/or accelerate some or all of our indebtedness, which would have a material adverse effect on us.

Changes in market conditions could adversely affect the market price of our publicly traded securities.

The market price of our publicly traded securities depends on various market conditions, which may change from time-to-time. Among the market conditions that may affect the market price of our publicly traded securities are the following:

We may change the dividend policy for our common stock in the future.

The decision to declare and pay dividends on our common stock in the future, as well as the timing, amount and composition of any such future dividends, will be at the sole discretion of our Board of Directors and will depend on our earnings, operating cash flows, liquidity, financial condition, capital requirements, contractual prohibitions or other limitations under our indebtedness including preferred stock, the annual distribution requirements under the REIT provisions of the Code, state law and such other factors as our Board of Directors deems relevant or are requirements under the Code or state or federal laws. Any negative change in our dividend policy could have a material adverse effect on the market price of our common stock.

Risks Related to Our Status as a REIT and Related U.S. Federal Income Tax Matters

Loss of our tax status as aREITREITor changes in U.S. federal income tax laws, regulations, administrative interpretations or court decisions relating to REITscould have significant adverse consequences to us and the value of our securities.

We have elected to be taxed as a REIT forU.S. federal income tax purposes under the Code. We believe that we are organized and operate in a manner that has allowed us to qualify and will allow us to remain qualified as a REIT under the Code. However, there can be no assurance that we have qualified or will continue to qualify as a REIT for U.S. federal income tax purposes.

Qualification as a REIT involves the application of highly technical and complex Code provisions, for which there are only limited judicial and administrative interpretations. The determination of various factual matters and circumstances not entirely within our control may affect our ability to qualify as a REIT. The rules dealing with U.S. federal income taxation are constantly under review by persons involved in the legislative process and by the IRS and U.S. Department of the Treasury. We cannot predict how changes in the tax laws might affect our investors or us. New legislation, regulations, administrative interpretations or court decisions could significantly and negatively change the tax laws with respect to qualification as a REIT, the U.S. federal income tax consequences of such qualification or the desirability of an investment in a REIT relative to other investments.

In order to qualify as a REIT, we must satisfy a number of requirements, including requirements regarding the composition of our assets and a requirement that at least 95% of our gross income in any year be derived from qualifying sources, such as “rents from real property.” Also, we must make distributions to stockholders aggregating annually at least 90% of our REIT taxable income, excluding net capital gains. Furthermore, we own a direct or indirect interest in certain subsidiary REITs which elected to be taxed as REITs for U.S. federal income tax purposes under the Code. Provided that each subsidiary REIT qualifies as a REIT, our interest in such subsidiary REIT will be treated as a qualifying real estate asset for purposes of the REIT asset tests. To qualify as a REIT, the subsidiary REIT must independently satisfy all of the REIT qualification requirements. The failure of a subsidiary REIT to qualify as a REIT could have an adverse effect on our ability to comply with the REIT income and asset tests, and thus our ability to qualify as a REIT.

If we lose our REIT status, we will face serious tax consequences that will substantially reduce the funds available to pay dividends to stockholders for each of the years involved because:

AsMoreover, the Tax Cuts and Jobs Act, enacted on December 22, 2017, has significantly changed the U.S. federal income taxation of U.S. businesses and their owners, including REITs and their stockholders. Changes made by the legislation that could affect us and our stockholders include:

Many of these changes are effective immediately, without any transition periods or grandfathering forexisting transactions. The legislation is unclear in many respects and could be subject to potential amendmentsand technical corrections, as well as interpretations and implementing regulations by the Treasury and IRS, anyof which could lessen or increase certain adverse impacts of the legislation. In addition, it is unclear how theseU.S. federal income tax changes will affect state and local taxation, which often uses U.S. federal taxable income as a resultstarting point for computing state and local tax liabilities.

While some of the changes made by the tax legislation may adversely affect us in one or more reportingperiods and prospectively, other changes may be beneficial on a going forward basis. We continue to work withour tax advisors to determine the full impact that the recent tax legislation as a whole will have onus. We urge our investors to consult with their legal and tax advisors with respect to such legislation and thepotential tax consequences of investing in our common stock.

Our failure to qualify as a REIT or new legislation or changes in U.S. federal income tax laws (including interpretations and regulations with respect to the Tax Cuts and Jobs Act), and with respect to qualification as a REIT or the tax consequences of such qualification, could also impair our ability to expand our business or raise capital and have a materially adversely affectadverse effect on the value of our securities.

To maintain our REIT status, we may be forced to borrow funds during unfavorable market conditions, and theunavailability of such capital on favorable terms at the desired times, or at all, may cause us to curtail our investmentactivities and/or to dispose of assets at inopportune times, which could adversely affect ourfinancial condition, results ofoperations, cash flows and per share trading price of our common stock.

To qualify as a REIT, we generally must distribute to our stockholders at least 90% of our net taxable income each year, excluding net capital gains, and we will be subject to regular corporate income taxes on the amount we distribute that is less than 100% of our net taxable income each year, including capital gains. In addition, we will be subject to a 4% nondeductible excise tax on the amount, if any, by which distributions paid by us in any calendar year are less than the sum of 85% of our ordinary income, 95% of our capital gain net income and 100% of our undistributed income from prior years. While we have historically satisfied these distribution requirements by making cash distributions to our stockholders, a REIT is permitted to satisfy these requirements by making distributions of cash or other property, including, in limited circumstances, its own stock. Assuming we continue to satisfy these distribution requirements with cash, we may need to borrow funds to meet the REIT distribution requirements and avoid the payment of income and excise taxes even if the then prevailing market conditions are not favorable for these borrowings. These borrowing needs could result from differences in timing between the actual receipt of cash and inclusion of income for U.S. federal income tax purposes, or the effect of non-deductible capital expenditures, the creation of cash reserves or required debt or amortization payments. These sources, however, may not be available on favorable terms or at all. Our access to third-party sources of capital depends on a number of factors, including the market's perception of our growth potential, our current debt levels, the market price of our common stock, and our current and potential future earnings. We cannot assure you that we will have access to such capital on favorable terms at the desired times, or at all, which may cause us to curtail our investment activities and/or to dispose of assets at inopportune times, and could adversely affect our financial condition, results of operations, cash flowflows and per share trading price of our common stock.

The tax imposed on REITs engaging in “prohibited transactions” may limit our ability to engage in transactions which would be treated as sales for U.S. federal income tax purposes.

A REIT's net income from prohibited transactions is subject to a 100% penalty tax. In general, prohibited transactions are sales or other dispositions of property, other than foreclosure property, held primarily for sale to customers in the ordinary course of business. Although we do not intend to hold any properties that would be characterized as held for sale to customers in the ordinary course of our business, unless a sale or disposition qualifies under certain statutory safe harbors, such characterization is a factual determination and no guarantee can be given that the IRS would agree with our characterization of our properties or that we will always be able to make use of the available safe harbors.

Item Adverse global market and economic conditions may impede our ability to generate sufficient income and maintain our properties.

The economic performance and value of our properties is subject to all of the risks associated with owning and operating real estate, including but not limited to:

Competition may limit our ability to purchase new properties or generate sufficient income from tenants and may decrease the occupancy and rental rates for our properties.

Our properties consist primarily of open-air shopping centers and other retail properties. Our performance, therefore, is generally linked to economic conditions in the market for retail space. In the future, the market for retail space could be adversely affected by:

In addition, numerous commercial developers and real estate companies compete with us in seeking tenants for our existing properties and properties for acquisition. New regional malls, open-air lifestyle centers or other retail shopping centers with more convenient locations or better rents may attract tenants or cause them to seek more favorable lease terms at or prior to renewal. Retailers at our properties may face increasing competition from other retailers, e-commerce, outlet malls, discount shopping clubs, direct mail, telemarketing or home shopping networks, all of which could (i) reduce rents payable to us; (ii) reduce our ability to attract and retain tenants at our properties; or (iii) lead to increased vacancy rates at our properties. We may fail to anticipate the effects of changes in consumer buying practices, particularly of growing online sales and the resulting retailing practices and space needs of our tenants or a general downturn in our tenants’ businesses, which may cause tenants to close stores or default in payment of rent.

Our performance depends on our ability to collect rent from tenants, including anchor tenants, our tenants’ financial condition and our tenants maintaining leases for our properties.

At any time, our tenants may experience a downturn in their business that may significantly weaken their financial condition. As a result, our tenants may delay a number of lease commencements, decline to extend or renew leases upon expiration, fail to make rental payments when due, close stores or declare bankruptcy. Any of these actions could result in the termination of tenants’ leases and the loss of rental income attributable to these tenants’ leases. In the event of a default by a tenant, we may experience delays and costs in enforcing our rights as landlord under the terms of the leases.

In addition, multiple lease terminations by tenants, including anchor tenants, or a failure by multiple tenants to occupy their premises in a shopping center could result in lease terminations or significant reductions in rent by other tenants in the same shopping centers under the terms of some leases. In that event, we may be unable to re-lease the vacated space at attractive rents or at all, and our rental payments from our continuing tenants could significantly decrease. The occurrence of any of the situations described above, particularly if it involves a substantial tenant with leases in multiple locations, could have a material adverse effect on our financial condition, results of operations and cash flows.

A tenant that files for bankruptcy protection may not continue to pay us rent. A bankruptcy filing by, or relating to, one of our tenants or a lease guarantor would bar all efforts by us to collect pre-bankruptcy debts from the tenant or the lease guarantor, or their property, unless the bankruptcy court permits us to do so. A tenant bankruptcy could delay our efforts to collect past due balances under the relevant leases and could ultimately preclude collection of these sums. If a lease is rejected by a tenant in bankruptcy, we would have only a general unsecured claim for damages. As a result, it is likely that we would recover substantially less than the full value of any unsecured claims we hold, if at all.

We may be unable to sell our real estate property investments when appropriate or on termsfavorable to us.

Real estate property investments are illiquid and generally cannot be disposed of quickly. In addition, the Code restricts a REIT’s ability to dispose of properties that are not applicable to other types of real estate companies. Therefore, we may not be able to vary our portfolio in response to economic or other conditions promptly or on terms favorable to us within a timeframe that we would need.

We may acquireor develop properties or acquire other real estate related companies, and this may create risks.

We may acquire or develop properties or acquire other real estate related companies when we believe that an acquisition or development is consistent with our business strategies. We may not succeed in consummating desired acquisitions or in completing developments on time or within budget. When we do pursue a project or acquisition, we may not succeed in leasing newly developed or acquired properties at rents sufficient to cover the costs of acquisition or development and operations. Difficulties in integrating acquisitions may prove costly or time-consuming and could divert management’s attention from other activities. Acquisitions or developments in new markets or industries where we do not have the same level of market knowledge may result in poorer than anticipated performance. We may also abandon acquisition or development opportunities that management has begun pursuing and consequently fail to recover expenses already incurred and will have devoted management’s time to a matter not consummated. Furthermore, our acquisitions of new properties or companies will expose us to the liabilities of those properties or companies, some of which we may not be aware of at the time of the acquisition. In addition, development of our existing properties presents similar risks.

Newly acquired or re-developed properties may have characteristics or deficiencies currently unknown to us that affect their value or revenue potential. It is also possible that the operating performance of these properties may decline under our management. As we acquire additional properties, we will be subject to risks associated with managing new properties, including lease-up and tenant retention. In addition, our ability to manage our growth effectively will require us to successfully integrate our new acquisitions into our existing management structure. We may not succeed with this integration or effectively manage additional properties, particularly in secondary markets. Also, newly acquired properties may not perform as expected.

Unsuccessfulreal estate under development activities or a slowdown inreal estate under development activities could have a direct impact on our growth, results of operations and cash flows.

Real estate under development is a component of our operating and investment strategy. We intend to continue pursuing select real estate under development opportunities for long-term investment and construction of retail and/or mixed use properties as opportunities arise. We expect to phase in construction until sufficient preleasing is reached. Our real estate under development and construction activities include the following risks:

Additionally, new real estate under development activities typically require substantial time and attention from management, and the time frame required for development, construction and lease-up of these properties could require several years to realize any significant cash return. The foregoing risks could cause the development of properties to hinder the Company’s growth and have an adverse effect on its results of operations and cash flows.

Construction and development projects are subject to risks that materially increase the costs of completion.

In the event that we decide to develop and construct new properties or redevelop existing properties, we will be subject to risks and uncertainties associated with construction and development. These risks include, but are not limited to, risks related to obtaining all necessary zoning, land-use, building occupancy and other governmental permits and authorizations, risks related to the environmental concerns of government entities or community groups, risks related to changes in economic and market conditions between development commencement and stabilization, risks related to construction labor disruptions, adverse weather, acts of God or shortages of materials which could cause construction delays and risks related to increases in the cost of labor and materials which could cause construction costs to be greater than projected and adversely impact the amount of our development fees or our results of operations or financial condition.

We face competition in pursuing acquisition or development opportunities that could increase our costs.

We face competition in the acquisition, development, operation and sale of real property from others engaged in real estate investment that could increase our costs associated with purchasing and maintaining assets. Some of these competitors may have greater financial resources than we do. This could result in competition for the acquisition of properties for tenants who lease or consider leasing space in our existing and subsequently acquired properties and for other real estate investment opportunities.

We do not have exclusive control over our joint venture and preferred equity investments, such that we are unable to ensure that our objectives will be pursued.

We have invested in some properties as a co-venturer or partner, instead of owning directly. In these investments, we do not have exclusive control over the development, financing, leasing, management and other aspects of these investments. As a result, the co-venturer or partner might have interests or goals that are inconsistent with ours, take action contrary to our interests or otherwise impede our objectives. These investments involve risks and uncertainties. The co-venturer or partner may fail to provide capital or fulfill its obligations, which may result in certain liabilities to us for guarantees and other commitment. Conflicts arising between us and our partners may be difficult to manage and/or resolve and it could be difficult to manage or otherwise monitor the existing business arrangements. The co-venturer or partner also might become insolvent or bankrupt, which may result in significant losses to us. 

In addition, joint venture arrangements may decrease our ability to manage risk and implicate additional risks, such as:

Our joint venture and preferred equity investments generally own real estate properties for which the economic performance and value is subject to all the risks associated with owning and operating real estate as described above.

We intend tocontinue tosell ournon-strategicassets and may not be able to recover our investments, which may result in significant losses to us.

There can be no assurance that we will be able to recover the current carrying amount of all of our non-strategic properties and investments and those of our unconsolidated joint ventures in the future. Our failure to do so would require us to recognize impairment charges for the period in which we reached that conclusion, which could materially and adversely affect our business, financial condition, operating results and cash flows.

We have completed, or have nearly completed, our efforts to exit our investments in Mexico, South America and Canada, however, we cannot predict the impact of laws and regulations affecting these international operations, including the United States Foreign Corrupt Practices Act, or the potential that we may face regulatory sanctions.

Our international operations have included properties in Canada, Mexico, Chile, Brazil and Peru and are subject to a variety of United States and foreign laws and regulations, including the United States Foreign Corrupt Practices Act (“FCPA”) and foreign tax laws and regulations. Although we have completely, or have nearly completed, our efforts to exit our investments in Mexico, South America and Canada, we cannot assure you that our past or any current international operations will continue to be found to be in compliance with such laws or regulations. In addition, we cannot predict the manner in which such laws or regulations might be administered or interpreted, or when, or the potential that we may face regulatory sanctions or tax audits as a result of our international operations.

We have received a subpoena from the Enforcement Division of the SEC in connection with the SEC’s investigation, In the Matter of Wal-Mart Stores, Inc. (FW-3678), that the SEC Staff is currently conducting with respect to possible violations of the FCPA. We have cooperated, and will continue to cooperate, with the SEC and the U.S. Department of Justice (“DOJ”), which is conducting a parallel investigation. At this point, we are unable to predict the duration, scope or result of the SEC or DOJ investigations. See “Item 3. Legal Proceedings,” below. The DOJ and the SEC have a broad range of civil and criminal sanctions under the FCPA and other laws and regulations, which they may seek to impose against corporations and individuals in appropriate circumstances including, but not limited to, injunctive relief, disgorgement, fines, penalties and modifications to business practices and compliance programs. Any of these remedial measures, if applicable to us, could have a material adverse impact on our business, results of operations, financial condition and liquidity.

We face risks relating to cybersecurity attacks, loss of confidential information and other business disruptions.

Our business is at risk from and may be impacted by cybersecurity attacks, including attempts to gain unauthorized access to our confidential data and other electronic security breaches. Such cyber-attacks can range from individual attempts to gain unauthorized access to our information technology systems to more sophisticated security threats. There is no guarantee that the measures we employ to prevent, detect and mitigate these threats will be successful in preventing a cyber-attack. Cybersecurity incidents could compromise the confidential information of our tenants, employees and third party vendors and disrupt and effect the efficiency of our business operations.

We may be unable to obtain financing through the debt and equities market, which would have a material adverse effect on our growth strategy, our results of operations and our financial condition.

We cannot assure you that we will be able to access the credit and/or equity markets to obtain additional debt or equity financing or that we will be able to obtain financing on terms favorable to us. The inability to obtain financing on a timely basis could have negative effects on our business, such as:

Adverse changes in our credit ratings could impair our ability to obtain additional debt and equity financing on terms favorable to us, if at all, and could significantly reduce the market price of our publicly traded securities.

We are subject to financial covenantsthat may restrict our operating and acquisition activities.

Our revolving credit facility, term loan and the indentures under which our senior unsecured debt is issued contain certain financial and operating covenants, including, among other things, certain coverage ratios and limitations on our ability to incur debt, make dividend payments, sell all or substantially all of our assets and engage in mergers and consolidations and certain acquisitions. These covenants may restrict our ability to pursue certain business initiatives or certain acquisition transactions that might otherwise be advantageous. In addition, failure to meet any of the financial covenants could cause an event of default under our revolving credit facility, term loan and the indentures and/or accelerate some or all of our indebtedness, which would have a material adverse effect on us.

Changes in market conditions could adversely affect the market price of our publicly traded securities.

The market price of our publicly traded securities depends on various market conditions, which may change from time-to-time. Among the market conditions that may affect the market price of our publicly traded securities are the following:

We may change the dividend policy for our common stock in the future.

The decision to declare and pay dividends on our common stock in the future, as well as the timing, amount and composition of any such future dividends, will be at the sole discretion of our Board of Directors and will depend on our earnings, operating cash flows, liquidity, financial condition, capital requirements, contractual prohibitions or other limitations under our indebtedness including preferred stock, the annual distribution requirements under the REIT provisions of the Code, state law and such other factors as our Board of Directors deems relevant or are requirements under the Code or state or federal laws. Any negative change in our dividend policy could have a material adverse effect on the market price of our common stock.

We may not be able to recover our investments in mortgage receivables or other investments, which may result in significant losses to us.

In the event of a default by a borrower, it may be necessary for us to foreclose our mortgage or engage in costly negotiations. Delays in liquidating defaulted mortgage loans and repossessing and selling the underlying properties could reduce our investment returns. Furthermore, in the event of default, the actual value of the property securing the mortgage may decrease. A decline in real estate values will adversely affect the value of our loans and the value of the mortgages securing our loans.

Our mortgage receivables may be or become subordinated to mechanics' or materialmen's liens or property tax liens. In these instances, we may need to protect a particular investment by making payments to maintain the current status of a prior lien or discharge it entirely. Where that occurs, the total amount we recover may be less than our total investment, resulting in a loss. In the event of a major loan default or several loan defaults resulting in losses, our investments in mortgage receivables would be materially and adversely affected.

The economic performance and value of our other investments which we do not control and are in retail operations, are subject to risks associated with owning and operating retail businesses, including:

A decline in the value of our other investments may require us to recognize an other-than-temporary impairment (“OTTI”) against such assets. When the fair value of an investment is determined to be less than its amortized cost at the balance sheet date, we assess whether the decline is temporary or other-than-temporary. If we intend to sell an impaired asset, or it is more likely than not that we will be required to sell the impaired asset before any anticipated recovery, then we must recognize an OTTI through charges to earnings equal to the entire difference between the assets amortized cost and its fair value at the balance sheet date. When an OTTI is recognized through earnings, a new cost basis is established for the asset and the new cost basis may not be adjusted through earnings for subsequent recoveries in fair value.

We may be subject to liability under environmental laws, ordinances and regulations.

Under various federal, state, and local laws, ordinances and regulations, we may be considered an owner or operator of real property and may be responsible for paying for the disposal or treatment of hazardous or toxic substances released on or in our property, as well as certain other potential costs relating to hazardous or toxic substances (including governmental fines and injuries to persons and property). This liability may be imposed whether or not we knew about, or were responsible for, the presence of hazardous or toxic substances.

Item1B. Unresolved Staff Comments

None

Item2. Properties

Real Estate Portfolio.As of December 31, 2016,2017, the Company had interests in 525493 shopping center properties aggregating 85.483.2 million square feet of GLA located in 3429 states, Puerto Rico and Canada. In addition, the Company had 384372 other property interests, primarily through the Company’s preferred equity investments and other real estate investments, totaling 6.35.8 million square feet of GLA.  The Company’s portfolio includes noncontrolling interests.is used by its single reportable segment. Open-air shopping centers comprise the primary focus of the Company's current portfolio.  As of December 31, 2016,2017, the Company’s Combined Shopping Center Portfolio, including noncontrolling interests, was 95.4%96.0% leased.

The Company's open-air shopping center properties, which are generally owned and operated through subsidiaries or joint ventures, had an average size of 162,618168,433 square feet as of December 31, 2016.2017. The Company generally retains its shopping centers for long-term investment and consequently pursues a program of regular physical maintenance together with redevelopment, major renovations and refurbishing to preserve and increase the value of its properties. This includes renovating existing facades, installing uniform signage, resurfacing parking lots and enhancing parking lot lighting. During 2016,2017, the Company expended $143.5$206.8 million in connection with these property improvements and expensed to operations $34.3$32.6 million.

The Company's management believes its experience in the real estate industry and its relationships with numerous national and regional tenants gives it an advantage in an industry where ownership is fragmented among a large number of property owners. The Company's open-air shopping centers are usually "anchored" by a grocery store, national or regional discount department store, grocery store or drugstore. As one of the original participants in the growth of the shopping center industry and one of the nation's largest owners and operators of shopping centers, the Company has established close relationships with a large number of major national and regional retailers. Some of the major national and regional companies that are tenants in the Company's shopping center properties include TJX Companies, The Home Depot, Ahold Delhaize, Bed Bath & Beyond, Albertsons, Ross Stores, Petsmart, Kohl’s, Wal-Mart and Whole Foods.

The Company reduces its operating and leasing risks through diversification achieved by the geographic distribution of its properties and a large tenant base. As of December 31, 2017, no single open-air shopping center accounted for more than 1.8% of the Company's annualized base rental revenues, including the proportionate share of base rental revenues from properties in which the Company has less than a 100% economic interest, or more than 1.6% of the Company’s total shopping center GLA. At December 31, 2017, the Company’s five largest tenants were TJX Companies, The Home Depot, Ahold Delhaize, Bed Bath & Beyond and Albertsons, which represented 3.6%, 2.5%, 2.2%, 1.8% and 1.8%, respectively, of the Company’s annualized base rental revenues, including the proportionate share of base rental revenues from properties in which the Company has less than a 100% economic interest.

A substantial portion of the Company's income consists of rent received under long-term leases. Most of the leases provide for the payment of fixed-base rentals monthly in advance and for the payment by tenants of an allocable share of the real estate taxes, insurance, utilities and common area maintenance expenses incurred in operating the shopping centers. Although many of the leases require the Company to make roof and structural repairs as needed, a number of tenant leases place that responsibility on the tenant, and the Company's standard small store lease provides for roof repairs to be reimbursedreimbursements by the tenant as part of common area maintenance.

Minimum base rental revenuesrevenues and operating expense reimbursements accounted for 98%97% and other revenues, including percentage rents, accounted for 2%3% of the Company's total revenues from rental properties for the year ended December 31, 2016.2017. The Company's management believes that the base rent per leased square foot for many of the Company's existing leases is generally lower than the prevailing market-rate base rents in the geographic regions where the Company operates, reflecting the potential for future growth.

Approximately 29.8% of the Company's leases of consolidated properties also contain provisions requiring the payment of additional rent calculated as a percentage of tenants’ gross sales above predetermined thresholds.  Percentage rents accounted for less than 1% of the Company's revenues from rental properties for the year ended December 31, 2016. Additionally, a majority of the Company’s leases have provisions requiring contractual rent increases. The Company’s leases may also include escalation clauses, which provide for increases based upon changes in the consumer price index or similar inflation indices.

As of December 31, 2016,2017, the Company’s consolidated operating portfolio, comprised of 59.259.4 million square feet of GLA, was 95.2%95.9% leased. The consolidated operating portfolio consists entirely of properties located in the U.S., inclusive of Puerto Rico.  For the period January 1, 20162017 to December 31, 2016,2017, the Company increased the average base rent per leased square foot, which includes the impact of tenant concessions, in its U.S. consolidated portfolio of open-air shopping centers from $14.36$14.99 to $14.99,$15.43, an increase of $0.63.$0.44.  This increase primarily consists of (i) a $0.10 increase relating to acquisitions, (ii) a $0.19 increase relating to dispositions, and (iii) a $0.34$0.30 increase relating to new leases signed net of leases vacated and rent step-ups within the portfolio.portfolio, (ii) a $0.13 increase relating to dispositions and (iii) a $0.01 increase relating to acquisitions.

The Company has a total of 6,1206,089 leases in the U.S. consolidated operating portfolio. The following table sets forth the aggregate lease expirations for each of the next ten years, assuming no renewal options are exercised. For purposes of the table, the Total Annual Base Rent Expiring represents annualized rental revenue, excluding the impact of straight-line rent, for each lease that expires during the respective year. Amounts in thousands except for number of lease data:

During 2016,2017, the Company executed 9351,196 leases totaling over 6.88.9 million square feet in the Company’s consolidated operating portfolio comprised of 344451 new leases and 591745 renewals and options. The leasing costs associated with these leases are estimated to aggregate $58.4$75.7 million or $29.81$28.58 per square foot. These costs include $46.4$59.3 million of tenant improvements and $12.0$16.4 million of leasing commissions. The average rent per square foot on new leases was $18.85$18.83 and on renewals and options was $14.97.$15.86. The Company will seek to obtain rents that are higher than amounts within its expiring leases, however, there are many variables and uncertainties which can significantly affect the leasing market at any time; as such, the Company cannot guarantee that future leases will continue to be signed for rents that are equal to or higher than current amounts.

Ground-Leased Properties. The Company has interests in 4443 consolidated shopping center properties that are subject to long-term ground leases where a third party owns and has leased the underlying land to the Company to construct and/or operate a shopping center. The Company pays rent for the use of the land and generally is responsible for all costs and expenses associated with the building and improvements. At the end of these long-term leases, unless extended, the land together with all improvements reverts to the landowner.

MoreMore specific information with respect to each of the Company's property interests is set forth in Exhibit 99.1, which is incorporated herein by reference.

Item3. Legal Proceedings

The Company is not presently involved in any litigation nor, to its knowledge, is any litigation threatened against the Company or its subsidiaries that, in management's opinion, would result in any material adverse effect on the Company's ownership, management or operation of its properties taken as a whole, or which is not covered by the Company's liability insurance.

On January 28, 2013, the Company received a subpoena from the Enforcement Division of the SEC in connection with an investigation, In the Matter of Wal-Mart Stores, Inc. (FW-3678), that the SEC Staff is currently conducting with respect to possible violations of the Foreign Corrupt Practices Act. The Company has cooperated, and will continue to cooperate, with the SEC and the U.S. Department of Justice (“DOJ”), which is conducting a parallel investigation. At this point, we are unable to predict the duration, scope or result of the SEC or DOJ investigations. 

Item4. Mine Safety Disclosures

Not applicable.applicable.

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PART II

 

Item5. Market for the Registrant's Common Equity, Related StockholderMatters and Issuer Purchases of Equity Securities

 

Market Information:    

 

The table below sets forth, for the quarterly periods indicated, the high and low sales prices per share reported on the NYSE Composite Tape and declared dividends per share for the Company’sCompany’s common stock. The Company’s common stock is traded on the NYSE under the trading symbol "KIM".

 

		Stock Price													2017												2016
Period		High				Low				Dividends					High Price				Low Price				Dividends Declared				High Price				Low Price				Dividends Declared
2015:
First Quarter		$	28.54			$	25.20			$	0.24				$	26.16			$	21.46			$	0.27			$	29.11			$	24.75			$	0.255
Second Quarter		$	27.06			$	22.48			$	0.24				$	23.03			$	17.02			$	0.27			$	31.38			$	26.79			$	0.255
Third Quarter		$	25.70			$	22.07			$	0.24				$	21.24			$	17.60			$	0.27			$	32.24			$	28.34			$	0.255
Fourth Quarter		$	27.33			$	23.98			$	0.255	(a)			$	19.79			$	17.76			$	0.28	(a)		$	29.23			$	24.35			$	0.27	(b)
2016:
First Quarter		$	29.11			$	24.75			$	0.255
Second Quarter		$	31.38			$	26.79			$	0.255
Third Quarter		$	32.24			$	28.34			$	0.255
Fourth Quarter		$	29.23			$	24.35			$	0.27	(b)

 

(a)

Paid on January 15, 201616, 2018 to stockholders of record on January 4, 2016.2, 2018.

(b)

Paid on January 15, 2017 to stockholders of record on January 3, 2017.

 

Holders: The number of holders of record of the Company's common stock, par value $0.01 per share, was 2,2922,162 as of January 31, 2017.2018.

 

Dividends: Since the IPO, the Company has paid regular quarterly cash dividends to its stockholders. While the Company intends to continue paying regular quarterly cash dividends, future dividend declarations will be paid at the discretion of the Board of Directors and will depend on the actual cash flows of the Company, its financial condition, capital requirements, the annual distribution requirements under the REIT provisions of the Code and such other factors as the Board of Directors deems relevant. The Company’s Board of Directors will continue to evaluate the Company’s dividend policy on a quarterly basis as they monitor sources of capital and evaluate operating fundamentals. The Company is required by the Code to distribute at least 90% of its REIT taxable income. The actual cash flow available to pay dividends will be affected by a number of factors, including the revenues received from rental properties, the operating expenses of the Company, the interest expense on its borrowings, the ability of lessees to meet their obligations to the Company, the ability to refinance near-term debt maturities and any unanticipated capital expenditures.

 

The Company has determined that the $1.02 dividend per common share paid during 2016 consisted of 62% ordinary income, an 8% return of capital and 30% capital gain to its stockholders. The $0.96 dividend per common share paid during 2015 consisted of 100% capital gain to its stockholders.

		Year ended December 31,
		2017				2016
Dividend paid per share		$	1.08			$	1.02
Ordinary income			57	%			62	%
Capital gains			2	%			30	%
Return of capital			41	%			8	%

 

In addition to its common stock offerings, thethe Company has capitalized the growth in its business through the issuance of unsecured fixed and floating-rate medium-term notes, underwritten bonds, unsecured bank debt, mortgage debt and construction loans, convertible preferred stock and perpetual preferred stock. Borrowings under the Company's revolving credit facility have also been an interim source of funds to both finance the purchase of properties and other investments and meet any short-term working capital requirements. The various instruments governing the Company's issuance of its unsecured public debt, bank debt, mortgage debt and preferred stock impose certain restrictions on the Company with regard toregarding dividends, voting, liquidation and other preferential rights available to the holders of such instruments. See "Management's Discussion and Analysis of Financial Condition and Results of Operations" and Footnotes 12, 13 14 and 1716 of the Notes to Consolidated Financial Statements included in this Form 10-K.

 

The Company does not believe that the preferential rights available to the holders of its Class I Preferred Stock, Class J Preferred Stock, Class K Preferred Stock, Class L Preferred Stock and Class KM Preferred Stock, the financial covenants contained in its public bond indentures, as amended, its term loan, or its revolving credit agreements will have an adverse impact on the Company's ability to pay dividends in the normal course to its common stockholders or to distribute amounts necessary to maintain its qualification as a REIT.

 

The Company maintains a dividend reinvestment and direct stock purchase plan (the "Plan") pursuant to which common and preferred stockholders and other interested investors may elect to automatically reinvest their dividends to purchase shares of the Company’sCompany’s common stock or, through optional cash payments, purchase shares of the Company’s common stock. The Company may, from time-to-time, either (i) purchase shares of its common stock in the open market or (ii) issue new shares of its common stock for the purpose of fulfilling its obligations under the Plan.

 

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Recent Sales of Unregister Securities:

None.

 

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Issuer Purchases of Equity Securities: During the year ended December 31, 2016,2017, the Company repurchased 257,477232,304 shares in connection with common shares surrendered or deemed surrendered to the Company to satisfy statutory minimum tax withholding obligations in connection withrelating to the vesting of restricted stock awards under the Company’s equity-based compensation plans. The Company expended approximately $6.9$5.6 million to repurchase these shares.

 

Period				Total Number of Shares Purchased				Average Price Paid per Share				Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs				Approximate Dollar Value of Shares that May Yet Be Purchased Under the Plans or Programs (in millions)
January 1, 2016	–	January 31, 2016			35,768			$	26.46				-			$	-
February 1, 2016	–	February 29, 2016			186,476			$	26.37				-				-
March 1, 2016	–	March 31, 2016			621			$	27.78				-				-
April 1, 2016	–	April 30, 2016			-			$	-				-				-
May 1, 2016	–	May 31, 2016			16,069			$	28.61				-				-
June 1, 2016	–	June 30, 2016			1,110			$	29.66				-				-
July 1, 2016	–	July 31, 2016			-			$	-				-				-
August 1, 2016	–	August 31, 2016			11,858			$	31.27				-				-
September 1, 2016	–	September 30, 2016			2,056			$	28.64				-				-
October 1, 2016	–	October 31, 2016			3,519			$	27.71				-				-
November 1, 2016	–	November 30, 2016			-			$	-				-				-
December 1, 2016	–	December 31, 2016			-			$	-				-				-
Total					257,477			$	26.80				-			$	-

Period		Total Number of Shares Purchased				Average Price Paid per Share				Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs				Approximate Dollar Value of Shares that May Yet Be Purchased Under the Plans or Programs (in millions)
January 1, 2017 – January 31, 2017			12,364			$	25.34				-			$	-
February 1, 2017 - February 28, 2017			186,397			$	25.04				-				-
March 1, 2017 – March 31, 2017			452			$	23.38				-				-
April 1, 2017 – April 30, 2017			-			$	-				-				-
May 1, 2017 – May 31, 2017			15,625			$	18.90				-				-
June 1, 2017 – June 30, 2017			1,544			$	17.56				-				-
July 1, 2017 – July 31, 2017			1,824			$	19.51				-				-
August 1, 2017 – August 31, 2017			10,314			$	20.32				-				-
September 1, 2017 – September 30, 2017			916			$	19.62				-				-
October 1, 2017 – October 31, 2017			2,868			$	18.49				-				-
November 1, 2017 – November 30, 2017			-			$	-				-				-
December 1, 2017 – December 31, 2017			-			$	-				-				-
Total			232,304			$	24.23				-			$	-

 

Total Stockholder Return Performance: The following performance chart compares, over the five years ended December 31, 2016,2017, the cumulative total stockholder return on the Company’s common stock with the cumulative total return of the S&P 500 Index and the cumulative total return of the FTSE NAREIT All Equity REITs Index (the “FTSE NAREIT Equity REIT Total Return Index (the "NAREIT Equity Index"REITs”) prepared and published by the National Association of Real Estate Investment Trusts ("NAREIT"(“NAREIT”). The FTSE NAREIT Equity REITs is a free-float adjusted, market capitalization-weighted index of U.S. equity REITs. Constituents of the index include all tax-qualified REITs with more than 50% of total assets in qualifying real estate investment trusts are defined as those which derive moreassets other than 75%mortgages secured by real property.

17

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Table of their income from equity investments in real estate assets. The NAREIT Equity Index includes all tax qualified equity real estate investment trusts listed on the New York Stock Exchange, American Stock Exchange or the NASDAQ National Market System. Contents

Stockholder return performance, presented quarterlyannually for the five years ended December 31, 2016,2017, is not necessarily indicative of future results. All stockholder return performance assumes the reinvestment of dividends. The information in this paragraph and the following performance chart are deemed to be furnished, not filed.

 

		Dec-12				Dec-13				Dec-14				Dec-15				Dec-16				Dec-17
Kimco Realty Corporation		$	100			$	106.65			$	140.69			$	153.54			$	152.00			$	116.24
S&P 500		$	100			$	132.39			$	150.51			$	152.59			$	170.84			$	208.14
FTSE NAREIT Equity REITs		$	100			$	102.47			$	133.35			$	137.62			$	149.35			$	157.16

 

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Item6. Selected Financial Data

 

The following table sets forth selected, historical, consolidated financial data for the Company and should be read in conjunction with the Consolidated Financial Statements of the Company and Notes thereto and Management’s Discussion and Analysis of Financial Condition and Results of Operations included in this Form 10-K.

 

The Company believes that the book value of its real estate assets, which reflects the historical costs of such real estate assets less accumulated depreciation, is not indicative of the current market value of its properties. Historical operating results are not necessarily indicative of future operating performance.

 

		Year ended December 31,																				Year ended December 31,
		2016				2015				2014				2013				2012(2)				2017				2016				2015				2014				2013
		(in thousands, except per share information)																				(in thousands, except per share information)
Operating Data:
Revenues from rental properties (1)		$	1,152,401			$	1,144,474			$	958,888			$	825,210			$	755,851
Interest expense (2)		$	192,549			$	218,891			$	203,759			$	212,240			$	223,736
Revenues from rental properties (1)																						$	1,183,785			$	1,152,401			$	1,144,474			$	958,888			$	825,210
Interest expense (2)																						$	191,956			$	192,549			$	218,891			$	203,759			$	212,240
Early extinguishment of debt charges		$	45,674			$	-			$	-			$	-			$	-			$	1,753			$	45,674			$	-			$	-			$	-
Depreciation and amortization (2)		$	355,320			$	344,527			$	258,074			$	224,713			$	214,827
Gain on sale of operating properties, net (2)		$	92,823			$	132,908			$	618			$	2,798			$	8,475
Provision for income taxes, net (3)		$	78,583			$	67,325			$	22,438			$	32,654			$	15,603
Impairment charges (4)		$	93,266			$	45,383			$	39,808			$	32,247			$	10,289
Income from continuing operations (5)		$	378,850			$	894,190			$	375,133			$	276,884			$	172,760
Depreciation and amortization (2)																						$	360,811			$	355,320			$	344,527			$	258,074			$	224,713
Gain on sale of operating properties, net (2)																						$	93,538			$	92,823			$	132,908			$	618			$	2,798
Benefit/(provision) for income taxes, net (3)																						$	880			$	(78,583	)		$	(67,325	)		$	(22,438	)		$	(32,654	)
Impairment charges (4)																						$	67,331			$	93,266			$	45,383			$	39,808			$	32,247
Income from continuing operations (5)																						$	426,075			$	378,850			$	894,190			$	375,133			$	276,884
Income per common share, from continuing operations:
Basic		$	0.79			$	2.01			$	0.77			$	0.53			$	0.19			$	0.87			$	0.79			$	2.01			$	0.77			$	0.53
Diluted		$	0.79			$	2.00			$	0.77			$	0.53			$	0.19			$	0.87			$	0.79			$	2.00			$	0.77			$	0.53
Weighted average number of shares of common stock:
Basic			418,402				411,319				409,088				407,631				405,997				423,614				418,402				411,319				409,088				407,631
Diluted			419,709				412,851				411,038				408,614				406,689				424,019				419,709				412,851				411,038				408,614
Cash dividends declared per common share		$	1.035			$	0.975			$	0.915			$	0.855			$	0.78			$	1.090			$	1.035			$	0.975			$	0.915			$	0.855

 

		December 31,																				December 31,
		2016				2015				2014				2013				2012				2017				2016				2015				2014				2013
		(in thousands)																				(in thousands)
Balance Sheet Data:
Real estate, before accumulated depreciation		$	12,008,075			$	11,568,809			$	10,018,226			$	9,123,344			$	8,947,287			$	12,653,446			$	12,008,075			$	11,568,809			$	10,018,226			$	9,123,344
Total assets		$	11,230,600			$	11,344,171			$	10,261,400			$	9,644,247			$	9,731,928			$	11,763,726			$	11,230,600			$	11,344,171			$	10,261,400			$	9,644,247
Total debt		$	5,066,368			$	5,376,310			$	4,595,970			$	4,202,018			$	4,176,011			$	5,478,927			$	5,066,368			$	5,376,310			$	4,595,970			$	4,202,018
Total stockholders' equity		$	5,256,139			$	5,046,300			$	4,774,785			$	4,632,417			$	4,765,160			$	5,394,244			$	5,256,139			$	5,046,300			$	4,774,785			$	4,632,417
Cash flow provided by operations		$	592,096			$	493,701			$	629,343			$	570,035			$	479,054			$	614,181			$	592,096			$	493,701			$	629,343			$	570,035
Cash flow provided by/(used for) investing activities		$	165,383			$	21,365			$	126,705			$	72,235			$	(51,000	)
Cash flow (used for)/provided by investing activities																						$	(294,280	)		$	165,383			$	21,365			$	126,705			$	72,235
Cash flow used for financing activities		$	(804,527	)		$	(512,854	)		$	(717,494	)		$	(635,377	)		$	(399,061	)		$	(223,874	)		$	(804,527	)		$	(512,854	)		$	(717,494	)		$	(635,377	)

 

(1)	Does not include revenues from rental properties relating to (i) unconsolidated joint ventures and (ii) properties included in discontinued operations.

(2)	Does not include amounts reflected in discontinued operations.

(3)	Does not include amounts reflected in discontinued operations. Amounts include income taxes related to gain on sale of operating properties.

(4)	Amounts exclude noncontrolling interests and amounts reflected in discontinued operations.

(5)

(1)   Does not include revenues (i) from rental properties relating to unconsolidated joint ventures and (ii) from properties included in discontinued operations. (2)   Does not include amounts reflected in discontinued operations. (3)   Does not include amounts reflected in discontinued operations. Amounts include income taxes related to gain on sale of operating properties. (4)   Amounts exclude noncontrolling interests and amounts reflected in discontinued operations. (5)   Amounts include gain on sale of operating properties, net of tax and net of income attributable to noncontrolling interests.

 

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Item7. Management's Discussion and Analysis of Financial Conditionand Results of Operations

 

The following discussion should be read in conjunction with the Consolidated Financial Statements and Notes thereto included in this Form 10-K. Historical results and percentage relationships set forth in the Consolidated Statements of Income contained in the Consolidated Financial Statements, including trends, should not be taken as indicative of future operations.

Executive Summary

 

Kimco Realty Corporation is one of the nation’s largest publicly-traded owners and operators of open-air shopping centers. As of December 31, 2016, the Company had interests in 525 shopping center properties aggregating 85.4 million square feet of GLA located in 34 states, Puerto Rico and Canada. In addition, the Company had 384 other property interests, primarily through the Company’s preferred equity investments and other real estate investments, totaling 6.3 million square feet of GLA.

The executive officers are engaged in the day-to-day management and operation of real estate exclusively with the Company, with nearly all operating functions, including leasing, asset management, maintenance, construction, legal, finance and accounting, administered by the Company. 

The Company’s strategy is to be the premier owner and operator of open-air shopping centers through investments primarily in the U.S.  To achieve this strategy the Company is (i) continuing to transform the quality of its portfolio by disposing of lesser quality assets and acquiring larger higher quality properties in key markets identified by the Company, for which substantial progress has been achieved as of the end of 2016, (ii) simplifying its business by: (a) reducing the number of joint venture investments and (b) exiting Mexico, South America and Canada, for which the exit of South America has been completed, Mexico has been substantially completed and the Company essentially sold all operating properties in Canada, (iii) pursuing redevelopment opportunities within its portfolio to increase overall value and (iv) selectively acquiring land parcels in our key markets for real estate development projects for long-term investment. As part of the Company’s strategy each property is evaluated for its highest and best use, which may include residential and mixed-use components. In addition, the Company may consider other opportunistic investments related to retailer controlled real estate such as, repositioning underperforming retail locations, retail real estate financing and bankruptcy transaction support. The Company has an active capital recycling program which provides for the disposition of certain U.S. properties. If the Company accepts sales prices for any of these assets that are less than their net carrying values, the Company would be required to take impairment charges and such amounts could be material. In order to execute the Company’s strategy, the Company intends to continue to strengthen its balance sheet by pursuing deleveraging efforts over time, providing it the necessary flexibility to invest opportunistically and selectively, primarily focusing on U.S. open-air shopping centers.

The following highlights the Company’s significant transactions, events and results that occurred during the year ended December 31, 2016:

Financial and Portfolio Information:

●

Net income available to common shareholders was $332.6 million, or $0.79 per diluted share for the year ended December 31, 2016, as compared to $831.2 million, or $2.00 per diluted share for the corresponding period in 2015. This change was primarily attributable to lower gains on sales of operating properties (including joint ventures) of $378.9 million, net of tax and $49.9 million of higher impairments attributable to the sale or pending disposition of operating properties in 2016 (see “Results of Operations” for additional detail).

●

Funds from operations (“FFO”) decreased to $555.7 million or $1.32 per diluted share for the year ended December 31, 2016 from $643.2 million or $1.56 per diluted share for the year ended December 31, 2015, (see additional disclosure on FFO beginning on page 30).

●

FFO as adjusted increased to $629.4 million or $1.50 per diluted share for the year ended December 31, 2016 from $603.4 million or $1.46 per diluted share for the year ended December 31, 2015, (see additional disclosure on FFO beginning on page 30).

●

U.S. same property net operating income (“U.S. same property NOI”) increased 2.8% for the year ended December 31, 2016, as compared to the corresponding period in 2015 (see additional disclosure on U.S. same property NOI beginning on page 32).

●

Executed 935 new leases, renewals and options totaling approximately 6.8 million square feet in the Consolidated Operating Portfolio.

●

The Company’s consolidated operating portfolio occupancy at December 31, 2016 was 95.2%.

Acquisition Activity (see Footnotes 3, 4 and 8 of the Notes to Consolidated Financial Statements included in this Form 10-K):

●

Acquired 12 consolidated operating properties and two out-parcels comprising an aggregate 2.7 million square feet of GLA, for an aggregate purchase price of $645.6 million including the assumption of $284.7 million of non-recourse mortgage debt encumbering 10 of the properties. The Company acquired nine of these properties for an aggregate purchase price of $505.9 million from joint ventures in which the Company previously held noncontrolling ownership interests and recognized an aggregate gain on change in control of interests of $57.4 million from the fair value adjustment.

●

The Company acquired from its partner the remaining ownership interest in a development project that was held in a joint venture for a gross purchase price of $84.2 million. Additionally, during the year ended December 31, 2016, the Company acquired additional land parcels related to two existing development projects for $13.8 million.

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Disposition Activity (see Footnote 5 of the Notes to Consolidated Financial Statements included in this Form 10-K):

●

During 2016, the Company disposed of 30 consolidated operating properties and two out-parcels, in separate transactions, for an aggregate sales price of $378.7 million. These transactions resulted in (i) an aggregate gain of $86.8 million, after income tax expense, and (ii) aggregate impairment charges of $37.2 million, which were taken prior to sale, before income tax benefit of $10.0 million.

Capital Activity (for additional details see Liquidity and Capital Resources below):

During the years ended December 31, 2016 and 2015, the Company repaid the following notes (dollars in millions):

Type	Date Paid	Maturity Date				Amount Repaid (USD)				Interest Rate
Canadian Notes Payable	Aug-16	Apr-18	-	Aug-20		$	270.9			3.855%	-	5.99%
Senior Unsecured Note	Aug-16		May-17			$	290.9				5.70%
Medium Term Notes	Mar-16		Mar-16			$	300.0				5.783%

Also during 2016, the Company (i) repaid $400.0 million of the Company’s $650.0 million unsecured term loan, (ii) assumed $289.0 million of individual non-recourse mortgage debt relating to the acquisition of 10 properties, including $4.3 million associated with fair value debt adjustments, (iii) paid off $703.0 million of mortgage debt (including fair value of debt adjustment of $2.1 million) that encumbered 47 operating properties and (iv) disposed of an encumbered property through foreclosure with debt of $25.6 million (including fair value of debt adjustment of $0.4 million) .

As a result of the above activity the Company was able to extend its debt maturity profile, including extension options, as of December 31, 2016 as follows:

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Critical Accounting Policies

 

The Consolidated Financial Statements of the Company include the accounts of the Company, its wholly-owned subsidiaries and all entities in which the Company has a controlling interest, including where the Company has been determined to be a primary beneficiary of a variable interest entity in accordance with the consolidation guidance of the FASB Accounting Standards Codification (“ASC”). The Company applies these provisions to each of its joint venture investments to determine whether the cost, equity or consolidation method of accounting is appropriate. The preparation of financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions in certain circumstances that affect amounts reported in the accompanying Consolidated Financial Statements and related notes. In preparing these financial statements, management has made its best estimates and assumptions that affect the reported amounts of assets and liabilities. These estimates are based on, but not limited to, historical results, industry standards and current economic conditions, giving due consideration to materiality. The most significant assumptions and estimates relate to revenue recognition and the recoverability of trade accounts receivable, depreciable lives, valuation of real estate and intangible assets and liabilities, valuation of joint venture investments and other investments, realizability of deferred tax assets and uncertain tax positions. Application of these assumptions requires the exercise of judgment as to future uncertainties, and, as a result, actual results could materially differ from these estimates.

 

The Company is required to make subjective assessments as to whether there are impairments in the value of its real estate properties, investments in joint ventures, marketable securities and other investments. The Company’sCompany’s reported net earnings are directly affected by management’s estimate of impairments and/or valuation allowances.impairments.

 

Revenue Recognition and Accounts Receivable

 

Base rental revenues from rental propertiesproperties are recognized on a straight-line basis over the terms of the related leases. Certain of these leases also provide for percentage rents based upon the level of sales achieved by the lessee. These percentage rents are recorded once the required sales level is achieved. Operating expense reimbursements are recognized as earned. Rental income may also include payments received in connection with lease termination agreements. In addition, leases typically provide for reimbursement to the Company of common area maintenance, real estate taxes and other operating expenses.

 

The CompanyCompany makes estimates of the uncollectabilitycollectability/recoverability of its accounts receivable related to base rents, straight-line rent, expense reimbursements and other revenues. The Company analyzes accounts receivable and historical bad debt levels, customer credit-worthiness and current economic trends when evaluating the adequacy of the allowance for doubtful accounts. In addition, tenants in bankruptcy are analyzed and estimates are made in connection with the expected recovery of pre-petition and post-petition claims. The Company’s reported net earnings are directly affected by management’s estimate of the collectability of accounts receivable.

 

Real Estate

 

The Company’sCompany’s investments in real estate properties are stated at cost, less accumulated depreciation and amortization. Expenditures for maintenance and repairs are charged to operations as incurred. Significant renovations and replacements, which improve and extend the life of the asset, are capitalized.

 

Upon acquisition of real estate operating properties, the Company estimates the fair value of acquired tangible assets (consisting of land, building, building improvements and tenant improvements) and identified intangible assets and liabilities (consisting of above and below-market leases, in-place leases, and tenant relationships, where applicable), assumed debt and redeemable units issued at the date of acquisition, based on evaluation of information and estimates available at that date. Fair value is determined based on an exit pricea market approach, which contemplates the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. If, up to one year from the acquisition date, information regarding fair value of the assets acquired and liabilities assumed is received and estimates are refined, appropriate adjustments are recognized in the reporting period in which the adjustment is identified. The Company expenses transaction costs associated with business combinations in the period incurred. The Company has elected to early adopt ASU 2017-01, Business Combinations (Topic 805): Clarifying the Definition of a Business at the beginning of its fiscal year ended December 31, 2017, including its interim periods within the year, and will appropriately applyapplied the guidance to its prospective asset acquisitions of operating properties, which includesincluded the capitalization of acquisition costs.

 

Depreciation and amortization are provided on the straight-line method over the estimated useful lives of the assets, as follows:

 

Buildings and building improvements (in years)		15 to 50
Fixtures, leasehold and tenant improvements (including certain identified intangible assets)		Terms of leases or useful
(including certain identified intangible assets)		lives, whichever is shorter

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The Company is required to make subjective assessments as to the useful lives of its properties for purposes of determining the amount of depreciation to reflect on an annual basis with respect to those properties. These assessments have a direct impact on the Company’sCompany’s net earnings.

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On a continuous basis, management assesses whether there are any indicators, including property operating performance, changes in anticipated holding period and general market conditions, that the value of the real estate properties (including any related amortizable intangible assets or liabilities) may be impaired. A property value is considered impaired only if management’s estimate of current and projected operating cash flows (undiscounted and unleveraged) of the property over its anticipated hold period is less than the net carrying value of the property. Such cash flow projections consider factors such as expected future operating income, trends and prospects, as well as the effects of demand, competition and other factors. To the extent impairment has occurred, the carrying value of the property would be adjusted to reflect the estimated fair value of the property.

 

When a real estate asset is identified by management as held-for-sale, the Company ceases depreciation of the asset and estimates the sales price of such asset net of selling costs. If, in management’smanagement’s opinion, the net sales price of the asset is less than the net book value of such asset, an adjustment to the carrying value would be recorded to reflect the estimated fair value of the property.

 

Investments in Unconsolidated Joint Ventures

 

The Company accounts for its investments in unconsolidated joint ventures under the equity method of accounting as the Company exercises significant influence, but does not control, these entities. These investments are recorded initially at cost and are subsequently adjusted for cash contributions and distributions. Earnings for each investment are recognized in accordance with each respective investment agreement and, where applicable, are based upon an allocation of the investment’sinvestment’s net assets at book value as if the investment was hypothetically liquidated at the end of each reporting period.

 

The Company’sCompany’s joint ventures and other real estate investments primarily consist of co-investments with institutional and other joint venture partners in open-air shopping center properties, consistent with its core business. These joint ventures typically obtain non-recourse third-party financing on their property investments, thus contractually limiting the Company’s exposure to losses to the amount of its equity investment, and, due to the lender’s exposure to losses, a lender typically will require a minimum level of equity in order to mitigate its risk. From time to time the joint ventures will obtain unsecured debt, which may be guaranteed by the joint venture. The Company’s exposure to losses associated with its unconsolidated joint ventures is primarily limited to its carrying value in these investments.

 

On a continuous basis, management assesses whether there are any indicators, including property operating performance and general market conditions, that the value of the Company’sCompany’s investments in unconsolidated joint ventures may be impaired. An investment’s value is impaired only if management’s estimate of the fair value of the investment is less than the carrying value of the investment and such difference is deemed to be other-than-temporary. To the extent impairment has occurred, the loss shall be measured as the excess of the carrying amount of the investment over the estimated fair value of the investment.

 

The Company’sCompany’s estimated fair values are based upon a discounted cash flow model for each joint venture that includes all estimated cash inflows and outflows over a specified holding period and, where applicable, any estimated debt premiums. Capitalization rates, discount rates and credit spreads utilized in these models are based upon rates that the Company believes to be within a reasonable range of current market rates.

 

Realizability of Deferred Tax Assets and Uncertain Tax Positions

 

The Company is subject to federal, state and local income taxes on the income from its activities relating to its TRS activities and subject to local taxes on certain non-U.S. investments. The Company accounts for income taxes using the asset and liability method, which requires that deferred tax assets and liabilities be recognized based on future tax consequences of temporary differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax basis. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply in the years in which temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in earnings in the period when the changes are enacted.

 

A reduction of the carrying amounts of deferred tax assets by a valuation allowance is required, if based on the evidence available, it is more likely than not (a likelihood of more than 50 percent) that some portion or all of the deferred tax assets will not be realized. The valuation allowance, which requires significant judgement from management, should be sufficient to reduce the deferred tax asset to the amount that is more likely than not to be realized.

The Company considers all available evidence, both positive and negative, to determine whether, based on the weight of that evidence, a valuation allowance is needed. Information about an enterprise's current financial position and its results of operations for the current and preceding years is supplemented by all currently available information about future years. The Company must use judgment in considering the relative impact of negative and positive evidence. The Company’s reported net earnings are directly affected by management’s judgement in determining a valuation allowance.

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The Company recognizes and measures benefits for uncertain tax positions, which requires significant judgment from management. Although the Company believes it has adequately reserved for any uncertain tax positions, no assurance can be given that the final tax outcome of these matters will not be different. The Company adjusts these reserves in light of changing facts and circumstances, such as the closing of a tax audit or the refinement of an estimate. Changes in the recognition or measurement of uncertain tax positions could result in material increases or decreases in the Company’sCompany’s income tax expense in the period in which a change is made, which could have a material impact on operating results (see Footnote 2221 of the Notes to Consolidated Financial Statements included in this Form 10-K).

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Executive Overview

 

ResultsKimco Realty Corporation is one of OperationsNorth America’s largest publicly traded owners and operators of open-air shopping centers. As of December 31, 2017, the Company had interests in 493 shopping center properties aggregating 83.2 million square feet of GLA located in 29 states, Puerto Rico and Canada. In addition, the Company had 372 other property interests, primarily through the Company’s preferred equity investments and other real estate investments, totaling 5.8 million square feet of GLA.

 

The executive officers are engaged in the day-to-day management and operation of real estate exclusively with the Company, with nearly all operating functions, including leasing, asset management, maintenance, construction, legal, finance and accounting, administered by the Company.

The following highlights the Company’s significant transactions, events and results that occurred during the year ended December 31, 2017:

FinancialComparison 2016 and Portfolio to 2015Information:

		2016				2015				Change				% change
		(amounts in millions)
Revenues from rental properties (1)		$	1,152.4			$	1,144.5			$	7.9				0.7%
Rental property expenses: (2)
Rent		$	11.0			$	12.3			$	(1.3	)			(10.6%)
Real estate taxes			146.6				147.2				(0.6	)			(0.4%)
Operating and maintenance			140.9				145.0				(4.1	)			(2.8%)
		$	298.5			$	304.5			$	(6.0	)			(2.0%)
Depreciation and amortization (3)		$	355.3			$	344.5			$	10.8				3.1%

 

(1)●

RevenuesNet income available to the Company’s common shareholders was $372.5 million, or $0.87 per diluted share for the year ended December 31, 2017, as compared to $332.6 million, or $0.79 per diluted share for the corresponding period in 2016.

●

Funds from rental propertiesoperations (“FFO”) increased primarilyto $655.6 million or $1.55 per diluted share for the year ended December 31, 2017 from the combined effect of (i) the acquisition of operating properties during 2016 and 2015, providing incremental revenues$555.7 million or $1.32 per diluted share for the year ended December 31, 2016 of $57.4(see additional disclosure on FFO beginning on page 36).

●

FFO as adjusted increased to $644.2 million or $1.52 per diluted share for the year ended December 31, 2017 from $629.4 million or $1.50 per diluted share for the year ended December 31, 2016, (see additional disclosure on FFO beginning on page 36).

●

Same property net operating income (“Same property NOI”) increased 1.7% for the year ended December 31, 2017, as compared to the corresponding period in 20152016 (see additional disclosure on Same property NOI beginning on page 37).

●

Executed 1,196 new leases, renewals and (ii) the completion of certain redevelopment projects, tenant buyouts and net growthoptions totaling approximately 8.9 million square feet in the currentconsolidated operating portfolio.

●

The Company’s consolidated operating portfolio providing incremental revenues for the year endedoccupancy at December 31, 2016, of $17.4 million,2017 was 95.9% as compared to 95.2% at December 31, 2016.

Acquisition Activity (see Footnotes 3 and 7of the Notes to Consolidated Financial Statements included in this Form 10-K):

	●	Acquired four consolidated operating properties and six parcels comprising an aggregate 1.9 million square feet of GLA, for an aggregate purchase price of $368.2 million including the corresponding periodassumption of $43.0 million of non-recourse mortgage debt encumbering one property.
	●	Acquired the controlling interest, in 2015, partially offset by (iii) a decreaseseparate transactions, from joint ventures in revenueswhich, the Company previously held noncontrolling ownership interests, in three operating properties comprising an aggregate 0.9 million square feet of $66.9GLA, for an aggregate gross purchase price of $320.1 million, including the assumption of $206.0 million of non-recourse mortgage debt encumbering one of the properties. The Company recognized an aggregate gain on change in control of interests of $71.2 million from the fair value adjustment in connection with these transactions.

Disposition Activity (see Footnote 5 of the Notes to Consolidated Financial Statements included in this Form 10-K):

●

During 2017, the Company disposed of 25 consolidated operating properties soldand nine parcels, in separate transactions, for an aggregate sales price of $352.2 million. These transactions resulted in (i) an aggregate gain of $93.5 million and (ii) aggregate impairment charges of $17.1 million.

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Capital Activity (for additional details see Liquidity and Capital Resources below):

●

During the years ended December 31, 2017, the Company repaid the following notes (dollars in millions):

Type		Date Paid		Amount Repaid				Interest Rate			Maturity Date
Medium Term Notes		Aug-17 & Nov-17		$	300.0			4.30%			Feb-18
Term Loan		Jan-17		$	250.0			LIBOR + 0.95%			Jan-17

●

In February 2017, the Company closed on a $2.25 billion unsecured revolving credit facility (the “Credit Facility”) with a group of banks, which is scheduled to expire in March 2021, which accrues interest at a rate of LIBOR plus 87.5 basis points (2.28% as of December 31, 2017) with two additional six-month options to extend the maturity date, at the Company’s discretion, to March 2022.

●

Also during 20162017, the Company (i) assumed/consolidated $257.5 million of individual non-recourse mortgage debt (including a fair market value adjustment of $8.5 million) related to two operating properties, (ii) paid off $692.9 million of mortgage debt (including fair market value adjustments of $5.8 million) that encumbered 27 operating properties and 2015.(iii) obtained a $206.0 million non-recourse mortgage relating to one operating property.

 

(2)●

Rental property expenses include (i) rentAs a result of the above activity, the Company extended its debt maturity profile, including extension options, as follows:

●

As of December 31, 2017, the weighted average interest rate was 3.84% and the weighted average maturity profile was 10.7 years.

The Company faces external factors which may influence its future results from operations. The convenience and availability of e-commerce has continued to have an impact on the retail sector, which could affect our ability to increase or maintain rental rates and our ability to renew expiring leases and/or lease available space. To mitigate the effect of e-commerce on its business, the Company’s strategy has been to attract local area customers to its properties by providing a diverse and robust tenant base across a variety of retailers, including grocery stores, national or regional discount department stores or drugstores, which offer day-to-day necessities rather than high-priced luxury items. In addition, the Company’s strategy includes investing capital into high quality assets, which are concentrated in major metro markets, allowing our tenants to generate higher foot traffic resulting in higher sales volume while also disposing of lesser quality assets in more undesirable locations.  For a further discussion of these and other factors that could impact our future results, performance or transactions, see Item 1A. “Risk Factors.”

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As the Company moves forward, it intends to take steps to strengthen its portfolio in the rapidly changing retail environment. The Company intends to continue to dispose of assets outside its core markets, which will allow it to concentrate its presence in target coastal markets by completing development projects underway and continuing to invest in redevelopment, ultimately producing a stronger portfolio for sustained long-term growth.

Results of Operations

Comparison of Years Ended December 31, 2017 to 2016

The following table presents the comparative results from the Company’s Consolidated Statements of Income for the year ended December 31, 2017, as compared to the corresponding period in 2016 (in thousands, except per share data):

		Year Ended December 31,
		2017				2016				$ Change
Revenues
Revenues from rental properties		$	1,183,785			$	1,152,401			$	31,384
Management and other fee income			17,049				18,391				(1,342	)
Operating expenses
Rent (1)			(11,145	)			(10,993	)			(152	)
Real estate taxes			(157,196	)			(146,615	)			(10,581	)
Operating and maintenance (2)			(142,787	)			(140,910	)			(1,877	)
General and administrative (3)			(118,455	)			(117,302	)			(1,153	)
Provision for doubtful accounts			(5,630	)			(5,563	)			(67	)
Impairment charges			(67,331	)			(93,266	)			25,935
Depreciation and amortization			(360,811	)			(355,320	)			(5,491	)
Other income/(expense)
Interest, dividends and other investment income			2,809				1,478				1,331
Other (expense)/income, net			(250	)			3,947				(4,197	)
Interest expense			(191,956	)			(192,549	)			593
Early extinguishment of debt charges			(1,753	)			(45,674	)			43,921
Benefit/(provision) for income taxes, net			880				(72,545	)			73,425
Equity in income of joint ventures, net			60,763				218,714				(157,951	)
Gain on change in control of interests			71,160				57,386				13,774
Equity in income of other real estate investments, net			67,001				27,773				39,228
Gain on sale of operating properties, net, net of tax			93,538				86,785				6,753
Net income attributable to noncontrolling interests			(13,596	)			(7,288	)			(6,308	)
Preferred stock redemption charges			(7,014	)			-				(7,014	)
Preferred dividends			(46,600	)			(46,220	)			(380	)
Net income available to the Company's common shareholders		$	372,461			$	332,630			$	39,831
Net income available to the Company:
Diluted per common share		$	0.87			$	0.79			$	0.08

(1)

Rent expense relatingrelates to ground lease payments for which the Company is the lessee, (ii) real estate tax expense for consolidated properties for which the Company has a controlling ownership interest and (iii) operatinglessee.

(2)

Operating and maintenance expense which consists of property related costs including repairs and maintenance costs, roof repair, landscaping, parking lot repair, snow removal, utilities, property insurance costs, security and various other property related expenses. Rental property expenses decreased $6.0 million for the year ended December 31, 2016, as compared to the corresponding period in 2015, primarily due to the disposition of properties during 2016 and 2015, partially offset by the acquisition of properties during 2016 and 2015.

(3)

DepreciationGeneral and amortization increased for the year ended December 31, 2016, as compared to the corresponding period in 2015, primarily due to operating property acquisitions during 2016administrative costs include employee-related expenses (salaries, bonuses, equity awards, benefits, severance costs and 2015payroll taxes), professional fees, office rent, travel expense and write-offs relating to the Company’s redevelopment projects in 2016, partially offset by property dispositions.other company-specific expenses.

 

ManagementThe following describes the activity of certain line items from the Company’s Consolidated Statements of Income, which it believes represent items that significantly changed during the year ended December 31, 2017, as compared to the corresponding period in 2016:

Revenue from rental properties - The increase in Revenues from rental properties of $31.4 million is primarily from the combined effect of (i) the acquisition and consolidation of operating properties during 2017 and 2016, providing incremental revenues for the year ended December 31, 2017 of $57.5 million, as compared to the corresponding period in 2016, and (ii) the completion of certain redevelopment projects, tenant buyouts and net growth in the current portfolio, providing incremental revenues for the year ended December 31, 2017 of $5.2 million, as compared to the corresponding period in 2016, partially offset by (iii) a decrease in revenues of $31.3 million from properties sold during 2017 and 2016.

Real estate taxes- Real estate taxes increased $10.6 million primarily due to (i) an increase of $8.4 million related to the acquisition and consolidation of operating properties during 2017 and 2016, and (ii) an overall net increase of $5.0 million primarily due to refunds received during 2016, partially offset by (iii) a decrease of $2.8 million resulting from properties sold during 2017 and 2016.

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Impairment charges - During the years ended December 31, 2017 and 2016, the Company recognized impairment charges related to adjustments to property carrying values of $67.3 million and $93.3 million, respectively, for which the Company’s estimated fair values were primarily based upon (i) signed contracts or letters of intent from third party offers or (ii) discounted cash flow models. These adjustments to property carrying values were recognized in connection with the Company’s efforts to market certain properties and management’s assessment as to the likelihood and timing of such potential transactions. Also, the Company has re-evaluated its long-term plan for a property due to unfavorable local market conditions. Certain of the calculations to determine fair value utilized unobservable inputs and as such are classified as Level 3 of the fair value hierarchy. For additional disclosure, see Footnote 15 of the Notes to Consolidated Financial Statements included in this Form 10-K.

Depreciation and amortization - The increase in Depreciation and amortization of $5.5 million is primarily due to (i) an increase of $21.8 million related to the acquisition/consolidation of operating properties during 2017 and 2016, and (ii) an increase of $15.2 million related to write-offs relating to the Company’s redevelopment projects in 2017 and 2016, partially offset by (iii) a decrease of $31.5 million resulting from property dispositions and tenant vacates in 2017 and 2016.

Other (expense)/income, net - The change in Other (expense)/income, net of $4.2 million is primarily due to (i) the recognition of a gain on forgiveness of debt of $3.1 million resulting from the foreclosure of an encumbered property during 2016, and (ii) lower equity in income from retail store lease investments of $2.8 million resulting from a lease termination during 2016, partially offset by (iii) an increase in gains on land sales of $1.5 million.

Early extinguishment of debt charges - During 2017, the Company incurred early Extinguishment of debt charges aggregating $1.8 million in connection with the tender premium on Medium Term Notes that were partially tendered prior to maturity. During 2016, the Company incurred early extinguishment of debt charges aggregating $45.7 million in connection with the optional make-whole provisions of unsecured notes that were repaid prior to maturity and prepayment penalties on a mortgage encumbering 10 operating properties, which the Company also paid prior to the scheduled maturity date.

Benefit/(provision) for income taxes, net - The change in Benefit/(provision) for income taxes, net of $73.4 million is primarily due to (i) a decrease in tax expense of $63.5 million resulting from the recognition of a valuation allowance as a result of the Company’s merger of its taxable REIT subsidiary into a wholly owned LLC of the Company on August 1, 2016, and (ii) a decrease in foreign tax expense of $30.4 million primarily relating to the sale of certain unconsolidated properties during 2016 within the Company’s Canadian portfolio which were subject to foreign taxes at a consolidated reporting entity level, partially offset by (iii) a decrease in tax benefit of $17.1 million primarily related to impairment charges recognized during 2016, (iv) a tax refund during 2016 of $2.0 million resulting from the favorable settlement of a tax audit and (v) an increase in tax expense of $1.1 million due to effects of changes in U.S. tax law, which lowered corporate tax rates impacting the amounts relating to the Company’s deferred tax assets and liabilities within its TRS.

Equity in income of joint ventures, net - The decrease in Equity in income of joint ventures, net of $158.0 million is primarily due to (i) a decrease in net gains of $158.1 million resulting from fewer sales of properties and ownership interests within various joint venture investments during 2017 as compared to 2016, (ii) lower equity in income of $5.3 million primarily resulting from the sales of properties within various joint venture investments and the acquisition of partnership interests in joint ventures by the Company during 2017 and 2016, and (iii) the recognition of a cumulative foreign currency translation loss of $4.8 million as a result of the substantial liquidation of the Company’s investments in Canada during 2017, partially offset by (iv) a decrease in impairment charges of $10.2 million recognized during 2017 as compared to 2016.

Gain on change in control of interests - During 2017, the Company acquired, in separate transactions, a controlling interest in three operating properties from certain joint venture partners in which the Company had noncontrolling interests. As a result of these transactions, the Company recorded an aggregate gain on change in control of interests of $71.2 million related to the fair value adjustment associated with its previously held equity interest in these operating properties. During 2016, the Company acquired, in separate transactions, a controlling interest in nine operating properties and one development project from certain joint venture partners in which the Company had noncontrolling interests. As a result of these transactions, the Company recorded a gain on change in control of interests of $57.4 million related to the fair value adjustment associated with its previously held equity interest in these operating properties and the development project.

Equity in income from other real estate investments, net - The increase in Equity in income from other feereal estate investments, net of $39.2 million is primarily due to (i) an increase of $34.6 million in equity in income decreased $3.9from the Albertsons joint venture resulting from cash distributions received in excess of the Company’s carrying basis during 2017 and (ii) the recognition of cumulative foreign currency translation gain of $14.8 million as a result of the substantial liquidation of the Company’s investments in Canada during 2017, partially offset by (iii) a decrease in earnings and profit participation from capital transactions related to $18.4Company’s Preferred Equity Program of $10.1 million during 2017, as compared to the corresponding period in 2016.

Gain on sale of operating properties, net of tax - During 2017, the Company disposed of 25 consolidated operating properties and nine parcels, in separate transactions, for an aggregate sales price of $352.2 million. These transactions resulted in (i) an aggregate gain of $93.5 million and (ii) aggregate impairment charges of $17.1 million. During 2016, the Company disposed of 30 consolidated operating properties and two parcels, in separate transactions, for an aggregate sales price of $378.7 million. These transactions resulted in an aggregate gain of $86.8 million, after income tax expense, and aggregate impairment charges of $37.2 million, before income tax benefit of $10.0 million.

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Net income attributable to noncontrolling interests– The increase in Net income attributable to noncontrolling interests of $6.3 million is primarily due to (i) an increase of $10.9 million in equity in income attributable to the Company’s noncontrolling partners in the Albertsons joint venture during 2017, partially offset by (ii) lower equity in income of $4.4 million resulting from the redemption of certain noncontrolling interests, the sales of properties within various joint venture investments and/or acquisition/consolidation of ownership interests in joint ventures by the Company during 2017 and 2016.

Preferred stock redemption charges –During 2017, the Company partially redeemed its Class I Preferred Stock shares and as a result, the Company recorded a non-cash redemption charge of $7.0 million. This $7.0 million charge was subtracted from net income attributable to the Company to arrive at net income available to the Company’s common shareholders and used in the calculation of earnings per share for the year ended December 31, 2017.

Net income available to the company’s common shareholders and Diluted earnings per share - Net income available to the Company’s common shareholders was $372.5 million for the year ended December 31, 2017, as compared to $332.6 million for the year ended December 31, 2016. On a diluted per share basis, net income available to the Company for the year ended December 31, 2017 was $0.87 as compared to $0.79 for the year ended December 31, 2016. These changes are primarily attributable to (i) incremental earnings due to the acquisition of operating properties during 2017 and 2016, as well as increased profitability from the Company’s operating properties, (ii) a benefit for income taxes in 2017 as compared to a provision for income taxes in 2016, (iii) a decrease in early extinguishment of debt charges, (iv) an increase in equity in income of other real estate investments, net, (v) a decrease in impairment charges of operating properties, (vi) an increase from gain on change of control of interests and (vii) an increase in gains on sale of operating properties, partially offset by (viii) a decrease in equity in income of joint ventures, net, resulting from the sales of properties within various joint venture investments and the acquisition of partnership interests in joint ventures by the Company during 2017 and 2016, (ix) an increase in real estate taxes, (x) an increase in preferred stock redemption charges and (xi) an increase in net income attributable to noncontrolling interests.

Comparison of Years Ended December 31, 2016 to 2015

The following table presents the comparative results from the Company’s Consolidated Statements of Income for the year ended December 31, 2016, as compared to $22.3 million for the corresponding period in 2015 (in thousands, except per share data):

		Year Ended December 31,
		2016				2015				$ Change
Revenues
Revenues from rental properties		$	1,152,401			$	1,144,474			$	7,927
Management and other fee income			18,391				22,295				(3,904	)
Operating expenses
Rent			(10,993	)			(12,347	)			1,354
Real estate taxes			(146,615	)			(147,150	)			535
Operating and maintenance			(140,910	)			(144,980	)			4,070
General and administrative expenses			(117,302	)			(122,735	)			5,433
Provision for doubtful accounts			(5,563	)			(6,075	)			512
Impairment charges			(93,266	)			(45,383	)			(47,883	)
Depreciation and amortization			(355,320	)			(344,527	)			(10,793	)
Other income/(expense)
Interest, dividends and other investment income			1,478				39,061				(37,583	)
Other income, net			3,947				5,174				(1,227	)
Interest expense			(192,549	)			(218,891	)			26,342
Early extinguishment of debt charges			(45,674	)			-				(45,674	)
Provision for income taxes, net			(72,545	)			(60,230	)			(12,315	)
Equity in income of joint ventures, net			218,714				480,395				(261,681	)
Gain on change in control of interests			57,386				149,234				(91,848	)
Equity in income of other real estate investments, net			27,773				36,090				(8,317	)
Loss from discontinued operations			-				(75	)			75
Gain on sale of operating properties, net, net of tax			86,785				125,813				(39,028	)
Net income attributable to noncontrolling interests			(7,288	)			(6,028	)			(1,260	)
Preferred stock redemption charges			-				(5,816	)			5,816
Preferred dividends			(46,220	)			(57,084	)			10,864
Net income available to the Company's common shareholders		$	332,630			$	831,215			$	(498,585	)
Net income available to the Company:
Diluted per common share		$	0.79			$	2.00			$	(1.21	)

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The following describes the activity of certain line items from the Company’s Consolidated Statements of Income, which it believes represent items that significantly changed during the year ended December 31, 2016, as compared to the corresponding period in 2015:

Revenue from rental properties - The increase in Revenues from rental properties of $7.9 million is primarily from the combined effect of (i) the acquisition of operating properties during 2016 and 2015, providing incremental revenues for the year ended December 31, 2016, of $57.4 million, as compared to the corresponding period in 2015 and (ii) the completion of certain redevelopment projects, tenant buyouts and net growth in the current portfolio, providing incremental revenues for the year ended December 31, 2016, of $17.4 million, as compared to the corresponding period in 2015, partially offset by (iii) a decrease in revenues of $66.9 million from properties sold during 2016 and 2015. This

Management and other fee income - The decrease in Management and other fee income of $3.9 million is primarily attributable to (i) the sale of properties within various joint venture investments and the acquisition of partnership interests in joint ventures by the Company during 2016 and 2015, and (ii) the recognition of enhancement fee income related to the Company’s prior investment in InTown Suites of $1.2 million during 2015.

 

Operating and maintenance expense - Operating and maintenance expense consists of property related costs including repairs and maintenance costs, roof repair, landscaping, parking lot repair, snow removal, utilities, property insurance costs, security and various other property related expenses. Operating and maintenance expense decreased $4.1 million primarily due to the disposition of properties during 2016 and 2015, partially offset by the acquisition of properties during 2016 and 2015.

General and administrative expenses - General and administrative costs include employee-related expenses (salaries, bonuses, equity awards, benefits, severance costs and payroll taxes), professional fees, office rent, travel expense and other company-specific expenses. General and administrative expenses decreased $5.4 million for the year ended December 31, 2016, as compared to the corresponding period in 2015, primarily due to a decrease in severance costs and a reduction in professional fees.

 

Impairment charges - During the year ended December 31, 2016, the Company recognized impairment charges related solely to adjustments to property carrying values of $93.3 million for which the Company’s estimated fair value was primarily based on third party appraisals and third party offers through signed contracts, letters of intent or discounted cash flow models.million. During the year ended December 31, 2015, the Company recognized impairment charges of $45.5 million, before noncontrolling interests and income taxes, of which $0.1 million is included in discontinued operations. The 2015 impairment charges consisted of (i) $30.3 million related to adjustments to property carrying values, (ii) $9.0 million relating to a cost method investment, (iii) $5.3 million related to certain investments in other real estate investments and (iv) $0.8 million related to marketable debt securities investments. The adjustments to property carrying values for 2016 and 2015 were recognized in connection with the Company’s efforts to market for sale certain properties and management’s assessment as to the likelihood and timing of such potential transactions and the anticipated hold period for such properties. Certain of the calculations to determine fair value utilized unobservable inputs and as such are classified as Level 3 of the fair value hierarchy. For additional disclosure, see Footnote 1615 of the Notes to Consolidated Financial Statements included in this Form 10-K.

 

Depreciation and amortization - The increase in Depreciation and amortization of $10.8 million is primarily due to operating property acquisitions during 2016 and 2015 and write-offs relating to the Company’s redevelopment projects in 2016, partially offset by property dispositions.

Interest, dividends and other investment income - The decrease in Interest, dividends and other investment income decreasedof $37.6 million to $1.5 million for the year ended December 31, 2016, as compared to $39.1 million for the corresponding period in 2015. This decrease is primarily due to the sale of certain marketable securities during the year ended December 31, 2015, which resulted in an aggregate gain of $39.9 million.

 

Interest expense - The decrease in Interest expense decreasedof $26.4 million to $192.5 million for the year ended December 31, 2016, as compared to $218.9 million for the corresponding period in 2015.  This decrease is primarily the result of lower levels of borrowings and lower interest rates on borrowings during 2016, as compared to 2015.

 

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Early extinguishment of Contents

debt charges - During the year ended December 31, 2016, the Company incurred earlyEarly extinguishment of debt charges aggregating $45.7 million in connection with the optional make-whole provisions of unsecured notes that were repaid prior to maturity and prepayment penalties on a mortgage encumbering 10 operating properties, which the Company also paid prior to the scheduled maturity date. See “Liquidity and Capital Resources” for additional details.

 

Provision for income taxes, net - The increase in Provision for income taxes, net increasedof $12.3 million to $72.5 million for the year ended December 31, 2016, as compared to $60.2 million for the corresponding period in 2015. This increase is primarily due to (i) an increase in the Company’s valuation allowance of $63.5 million as a result of the Company’s merger of its taxable REIT subsidiary into a wholly owned LLC of the Company, partially offset by (ii) a decrease in foreign tax expense of $26.1 million primarily relating to fewer sales of unconsolidated properties within the Company’s Canadian portfolio which were subject to foreign taxes at a consolidated reporting entity level during 2016, as compared to 2015, (iii) an increase in tax benefit of $13.4 million related to impairment charges recognized during 2016, as compared to 2015, (iv) a decrease of $4.5 million in tax expense related to gains recognized during 2015, as compared to 2016, (v) a decrease of $3.0 million in tax expense on operations due to fewer properties in the taxable REIT subsidiary as a result of the TRS Merger, (vi) a decrease in tax expense of $2.0 million resulting from the favorable settlement of a tax audit during 2016 and (vii) a decrease in tax expense of $2.0 million relating to equity income recognized in connection with the Company’s Albertsons investment during 2015.

 

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Equity in income of joint ventures, net - The decrease in Equity in income of joint ventures, net decreasedof $261.7 million to $218.7 million for the year ended December 31, 2016, as compared to $480.4 million for the corresponding period in 2015. This decrease is primarily due to (i) a decrease in gains of $248.1 million resulting from fewer sales of properties and interests within various joint venture investments, including the Company’s Canadian Portfolio, during 2016, as compared to 2015 and (ii) lower equity in income of $26.0 million resulting from the sales of properties within various joint venture investments and the acquisition of partnership interests in joint ventures by the Company during 2016 and 2015, partially offset by (iii) a decrease in impairment charges of $7.2 million recognized during 2016, as compared to 2015.

 

Gain on change in control of interests - During 2016, the Company acquired nine operating properties and one development project from joint ventures in which the Company had a noncontrolling interest. The Company recorded a gain on change in control of interests of $57.4 million related to the fair value adjustment associated with its previously held equity interest in the operating properties.

During 2015, the Company acquired 43 properties from joint ventures in which the Company had noncontrolling interests.  The Company recorded a net gain on change in control of interests of $149.2 million related to the fair value adjustment associated with its previously held equity interests in these properties.

 

Equity in income from other real estate investments, net - The decrease in Equity in income from other real estate investments, net decreasedof $8.3 million to $27.8 million for the year ended December 31, 2016, as compared to $36.1 million for the corresponding period in 2015. This decrease is primarily due to (i) a decrease in equity in income of $4.9 million resulting from a cash distribution received in excess of the Company’s carrying basis in 2015, (ii) a decrease in income resulting from the sale of the Company’s leveraged lease portfolio of $3.8 million during 2015 and (iii) a decrease of $2.8 million in earnings from the Company’s Preferred Equity Program during the year ended December 31, 2016, primarily resulting from the sale of the Company’s interests in certain preferred equity investments during 2016 and 2015, partially offset by (iv) an increase of $3.3 million in profit participation from the Company’s Preferred Equity Program from capital transactions during the year ended December 31, 2016, as compared to the corresponding period in 2015.

 

Gain on sale of operating properties, net of tax - During 2016, the Company disposed of 30 consolidated operating properties and two out-parcels,parcels, in separate transactions, for an aggregate sales price of $378.7 million. These transactions resulted in an aggregate gain of $86.8 million, after income tax expense, and aggregate impairment charges of $37.2 million, which were taken prior to sale, before income tax benefit of $10.0 million.

During 2015, the Company disposed of 89 consolidated operating properties and eight out-parcels,parcels, in separate transactions, for an aggregate sales price of $492.5 million. These transactions resulted in an aggregate gain of $143.6 million, after income tax expense, and aggregate impairment charges of $10.2 million, before income tax expense of $2.3 million. Additionally, during 2015, the Company disposed of its remaining operating property in Chile for a sales price of $51.3 million. This transaction resulted in the release of a cumulative foreign currency translation loss of $19.6 million due to the Company’s liquidation of its investment in Chile, partially offset by a gain on sale of $1.8 million, after income tax expense.

 

Net income attributableavailable to the CompanyCompany’s common shareholders and Diluted earnings per share - Net income available to the Company’s common shareholders was $378.9$332.6 million for the year ended December 31, 2016, as compared to $894.1$831.2 million for the year ended December 31, 2015. On a diluted per share basis, net income available to the Company for the year ended December 31, 2016 was $0.79 as compared to $2.00 for the year ended December 31, 2015. These changes are primarily attributable to (i) a decrease in equity in income of joint ventures, net, resulting from gains on sales of properties within various joint venture investments during 2015, (ii) a decrease in gain on change in control of interests, net related to the fair value adjustment associated with the Company’s previously held equity interests in properties acquired from various joint ventures during 2016 and 2015, (iii) an increase in impairments of operating properties during 2016, (iv) an increase in early extinguishment of debt charges resulting from the prepayment of secured and unsecured debt by the Company, (v) a decrease in gains on sale of operating properties, (vi) a decrease in gain on sale of marketable securities during 2016, as compared to the corresponding period in 2015, (vii) an increase in provision for income taxes due to a valuation allowance on net deferred tax assets resulting from the merger of KRS into a wholly-owned LLC of the Company and (viii) a decrease in gains through the Company’s preferred equity program and other investments, partially offset by (ix) a decrease in interest expense, (x) a decrease in preferred dividends and (x) preferred stock redemption charges and (xi) incremental earnings due to the acquisition of operating properties during 2016 and 2015 and increased profitability from the Company’s operating properties.

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Results of Operations

 

Comparison 2015to 2014

		2015				2014				Change				% change
		(amounts in millions)
Revenues from rental properties (1)		$	1,144.5			$	958.9			$	185.6				19.4%
Rental property expenses: (2)
Rent		$	12.3			$	14.3			$	(2.0	)			(14.0%)
Real estate taxes			147.2				124.7				22.5				18.0%
Operating and maintenance			145.0				119.7				25.3				21.1%
		$	304.5			$	258.7			$	45.8				17.7%
Depreciation and amortization (3)		$	344.5			$	258.1			$	86.4				33.5%

(1)

Revenues from rental properties increased primarily from the combined effect of (i) the acquisition of operating properties during 2015 and 2014, providing incremental revenues for the year ended December 31, 2015, of $179.9 million, as compared to the corresponding period in 2014 and (ii) the completion of certain redevelopment projects, tenant buyouts and net growth in the current portfolio, providing incremental revenues for the year ended December 31, 2015, of $23.5 million, as compared to the corresponding period in 2014, partially offset by (iii) a decrease in revenues of $17.8 million from properties sold during 2015 and 2014.

(2)

Rental property expenses include (i) rent expense relating to ground lease payments for which the Company is the lessee, (ii) real estate tax expense for consolidated properties for which the Company has a controlling ownership interest and (iii) operating and maintenance expense, which consists of property related costs including repairs and maintenance costs, roof repair, landscaping, parking lot repair, snow removal, utilities, property insurance costs, security and various other property related expenses. Rental property expenses increased for the year ended December 31, 2015, as compared to the corresponding period in 2014, primarily due to the acquisitions of properties during 2015 and 2014, partially offset by the disposition of properties in 2015, which resulted in (i) a net increase in real estate taxes of $22.5 million, (ii) a net increase in repairs and maintenance costs of $9.7 million, (iii) a net increase in property services of $4.8 million, (iv) a net increase in snow removal costs of $3.6 million, (v) a net increase in professional fees of $2.4 million and (vi) a net increase in insurance expense of $3.1 million, due to an increase in insurance claims.

(3)

Depreciation and amortization increased for the year ended December 31, 2015, as compared to the corresponding period in 2014, primarily due to operating property acquisitions during 2015 and 2014 and amounts relating to the Company’s redevelopment projects in 2015, partially offset by property dispositions.

Management and other fee income decreased $12.7 million to $22.3 million for the year ended December 31, 2015, as compared to $35.0 million for the corresponding period in 2014. This decrease is primarily attributable to (i) the sale of properties within various joint venture investments and the acquisition of partnership interests in joint ventures by the Company during 2015 and 2014 and (ii) a decrease in enhancement fee income related to InTown Suites of $4.1 million for the year ended December 31, 2015, as compared to the corresponding period in 2014, resulting from the repayment of debt that was previously guaranteed by the Company. 

During the year ended December 31, 2015, the Company recognized impairment charges of $45.5 million, before noncontrolling interests and income taxes, of which $0.1 million is included in discontinued operations. These impairment charges consist of (i) $30.3 million related to adjustments to property carrying values, (ii) $9.0 million relating to a cost method investment, (iii) $5.3 million related to certain investments in other real estate investments and (iv) $0.8 million related to marketable debt securities investments. During the year ended December 31, 2014, the Company recognized impairment charges of $217.8 million, of which $178.0 million, before income tax benefits of $1.7 million, is included in discontinued operations. These impairment charges consist of (i) $118.4 million related to adjustments to property carrying values, (ii) the release of a cumulative foreign currency translation loss of $92.9 million relating to the substantial liquidation of the Company’s investment in Mexico, (iii) $4.8 million related to a cost method investment and (iv) $1.6 million related to a preferred equity investment. The adjustments to property carrying values were recognized in connection with the Company’s efforts to market certain properties and management’s assessment as to the likelihood and timing of such potential transactions and the anticipated hold period for such properties. Certain of the calculations to determine fair value utilized unobservable inputs and as such are classified as Level 3 of the fair value hierarchy. For additional disclosure, see Footnote 16 of the Notes to Consolidated Financial Statements included in this Form 10-K.

Interest, dividends and other investment income increased $38.1 million to $39.1 million for the year ended December 31, 2015, as compared to $1.0 million for the corresponding period in 2014. This increase is primarily due to the sale of certain marketable securities during 2015, which resulted in an aggregate gain of $39.9 million.

Other income/(expense), net changed $10.7 million to income of $2.2 million for the year ended December 31, 2015, as compared to an expense of $8.5 million for the corresponding period in 2014. This change is primarily due to (i) the release of contingent liabilities related to potential earn-out payments, for which the Company ultimately was not required to pay of $5.8 million, (ii) a decrease in acquisition related costs of $2.3 million and (iii) an increase in gains on land sales of $0.8 million.

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Interest expense increased $15.1 million to $218.9 million for the year ended December 31, 2015, as compared to $203.8 million for the corresponding period in 2014.  This increase is primarily the result of higher levels of borrowings during 2015, as compared to 2014, primarily relating to the acquisition of operating properties during 2015 and 2014. 

Provision for income taxes, net increased $37.8 million to $60.2 million for the year ended December 31, 2015, as compared to $22.4 million for the corresponding period in 2014. This increase is primarily due to (i) an increase in foreign tax expense of $33.6 million primarily resulting from the sale of certain Canadian investments during 2015, as compared to 2014 and (ii) an increase in tax expense of $4.3 million relating to equity in income recognized in connection with the Company’s Albertsons investment during 2015, as compared to 2014.

Equity in income of joint ventures, net increased $320.8 million to $480.4 million for the year ended December 31, 2015, as compared to $159.6 million for the corresponding period in 2014. This increase is primarily due to (i) an increase in gains of $316.1 million resulting from the sale of properties and sale of interests within various joint venture investments during the year ended December 31, 2015, as compared to the corresponding period in 2014 and (ii) the release of cumulative foreign currency translation loss of $47.3 million relating to the substantial liquidation of the Company’s investment in Mexico during 2014, partially offset by (iii) a decrease in equity in income of $15.6 million resulting from a cash distribution received in excess of the Company’s carrying basis in 2014, (iv) an increase in impairment charges of $14.9 million recognized during the year ended December 31, 2015, as compared to the corresponding period in 2014 and (v) lower equity in income resulting from the sales of properties within various joint venture investments and the acquisition of partnership interests in joint ventures by the Company during 2015 and 2014.

During 2015, the Company acquired 43 properties from joint ventures in which the Company had noncontrolling interests.  The Company recorded a net gain on change in control of interests of $149.2 million related to the fair value adjustment associated with its previously held equity interests in these properties.

During 2014, the Company acquired 34 properties from joint ventures in which the Company had noncontrolling interests. The Company recorded an aggregate net gain on change in control of interests of $107.2 million related to the fair value adjustment associated with its original ownership of these properties.

During 2015, the Company disposed of 89 consolidated operating properties and eight out-parcels, in separate transactions, for an aggregate sales price of $492.5 million. These transactions resulted in an aggregate gain of $143.6 million, after income tax expense, and aggregate impairment charges of $10.2 million, before income tax expense of $2.3 million. Additionally, during 2015, the Company disposed of its remaining operating property in Chile for a sales price of $51.3 million. This transaction resulted in the release of a cumulative foreign currency translation loss of $19.6 million due to the Company’s liquidation of its investment in Chile, partially offset by a gain on sale of $1.8 million, after income tax expense. 

During 2014, the Company disposed of 90 consolidated operating properties, in separate transactions, for an aggregate sales price of $833.5 million, including 27 operating properties in Latin America. These transactions, which are included in Discontinued Operations on the Company’s Consolidated Statements of Income, resulted in (i) an aggregate gain of $203.3 million, before income taxes of $12.0 million, (ii) the release of a cumulative foreign currency translation loss of $92.9 million relating to the substantial liquidation of the Company’s investment in Mexico and (iii) aggregate impairment charges of $85.1 million before income tax benefits of $1.7 million.

Net income attributable to the Company was $894.1 million for the year ended December 31, 2015. Net income attributable to the Company was $424.0 million for the year ended December 31, 2014. On a diluted per share basis, net income attributable to the Company was $2.00 for the year ended December 31, 2015, as compared to $0.89 for the year ended December 31, 2014. These changes are primarily attributable to (i) incremental earnings due to the acquisition of operating properties during 2015 and 2014 and increased profitability from the Company’s operating properties, (ii) an increase in equity in income of joint ventures, net, primarily from gains on sale of Canadian assets, (iii) an increase in gains on sale of marketable securities and (iv) an increase in gain on change in control of interests, net, partially offset by (v) an increase in depreciation and amortization, (vi) the disposition of operating properties during 2015 and 2014 and (vii) an increase in provision for income taxes, net.

Liquidity and Capital Resources

 

The Company’sCompany’s capital resources include accessing the public debt and equity capital markets, mortgage and construction loan financing, borrowings under term loans and immediate access to an unsecured revolving credit facility (the “Credit Facility”) with bank commitments of $1.75$2.25 billion at December 31, 2016, which were subsequentlycan be increased to $2.25$2.75 billion during February 2017.through an accordion feature.

 

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The Company’sCompany’s cash flow activities are summarized as follows (in millions)thousands):

 

		Year Ended December 31,												Year Ended December 31,
		2016				2015				2014				2017				2016
Cash and cash equivalents, beginning of year														$	142,486			$	189,534
Net cash flow provided by operating activities		$	592.1			$	493.7			$	629.3				614,181				592,096
Net cash flow provided by investing activities		$	165.4			$	21.4			$	126.7
Net cash flow (used for)/provided by investing activities															(294,280	)			165,383
Net cash flow used for financing activities		$	(804.5	)		$	(512.9	)		$	(717.5	)			(223,874	)			(804,527	)
Change in cash and cash equivalents															96,027				(47,048	)
Cash and cash equivalents, end of year														$	238,513			$	142,486

 

Operating Activities

 

The Company anticipates that cash on hand, cash flows from operations, borrowings under its revolving credit facility,Credit Facility, and the issuance of equity and public debt, as well as other debt and equity alternatives, will provide the necessary capital required by the Company.  

Cash flows provided by operating activities for the year ended December 31, 2016,2017, were $592.1$614.2 million, as compared to $493.7$592.1 million for the comparable period in 2015.2016. The increase of $98.4$22.1 million is primarily attributable to:

●

the acquisition of operating properties during 2017 and 2016;

●

new leasing, expansion and re-tenanting of core portfolio properties;

	●	a decrease in interest expense; and
	●	changes in operating assets and liabilities due to timing of receipts and payments; partially offset by

●

a decrease in operational distributions from the Company’s joint venture programs due to the sale of certain joint venture properties during 2017 and 2016.

       During the years ended December 31, 2017 and 2016, the Company capitalized personnel costs of $16.1 million and $15.4 million, respectively, relating to (i) the acquisition of operating properties during 2016 and 2015, (ii) newdeferred leasing expansion and re-tenanting of core portfolio properties and (iii) changes in operating assets and liabilities due to timing of receipts and payments, partially offset by (iv) a decrease in operational distributions from the Company’s joint venture programs due to the sale of certain joint venture properties during 2016 and 2015.costs.

 

Investing Activities

 

Cash flows used for investing activities was $294.3 million for 2017, as compared to cash flows provided by investing activities for the year ended December 31, 2016, wasof $165.4 million as compared to $21.4 million for the comparable period in 2015. This increase of $144.0 million resulted2016. Investing activities during 2017 consisted primarily from (i) a decrease of:

Cash outflows:

●

$367.1 million for improvements to operating real estate related to the Company’s active redevelopment pipeline and improvements to real estate under development;

●

$163.9 million for acquisition of operating real estate and other related net assets, including seven consolidated operating properties and six parcels, and acquisition of real estate under development related to one development project;

●

$35.3 million for investments in and advances to real estate joint ventures, primarily related to a redevelopment project in one joint venture and the repayment of a mortgage in another joint venture; and

●

$9.8 million for investment in marketable securities.

Cash in acquisition of operating real estate and other related net assets of $458.2 million, (ii) a decrease in investment in other investments of $190.3 million related to the Company’s KRS AB Acquisition, LLC joint venture investment in Safeway Inc.flows:

●

$181.3 million in proceeds from the sale of operating properties, including 25 consolidated operating properties and nine parcels; and

●

$96.5 million in reimbursements of investments and advances to real estate joint ventures, primarily related to disposition of properties within the joint venture portfolio, and reimbursements of investments and advances to other real estate investments, primarily related to a distribution received from the Company’s Albertsons investment.

Investing activities during 2015, (iii) an increase in return of investment from liquidation of real estate joint ventures of $103.2 million2016 consisted primarily due to the liquidation of certain Canadian joint ventures in 2016, as compared to the corresponding period in 2015, and (iv) a decrease in improvements to operating real estate of $23.2 million, partially offset by (v) a decrease in distributions from liquidation of real estate joint ventures of $235.4 million, (vi) a decrease in proceeds from the sale of operating properties of $132.4 million, (vii) a decrease in proceeds from sale/repayments of marketable securities of $74.2 million, (viii) an increase in improvements to real estate under development of $55.9 million, (ix) a decrease in collection of mortgage loan receivables of $54.2 million, (x) a decrease in reimbursements of investments and advances to real estate joint ventures and other real estate investments of $51.9 million and (xi) an increase in acquisition of real estate under development of $35.2 million.of:

Cash inflows:

●

$330.4 million in proceeds from distributions and return of investments from liquidation of real estate joint ventures, primarily due to the liquidation of certain Canadian joint ventures in 2016;

●

$304.6 million in proceeds from the sale of operating properties related to 30 consolidated operating properties and two parcels; and

●

$82.7 million in reimbursements of investments and advances to real estate joint ventures, primarily related the refinancing of certain property mortgages within various joint ventures, and reimbursements of investments and advances to other real estate investments, primarily related to the sale of one preferred equity investment.

Cash outflows:

●

$254.8 million for acquisition of operating real estate and other related net assets, including 12 consolidated operating properties and two parcels, and acquisition of real estate under development related to two development projects;

●

$216.2 million for improvements to operating real estate, including expenditures related to the Company’s active redevelopment pipeline and improvements to real estate under development; and

●

$86.5 million for investments in and advances to real estate joint ventures, primarily related to the acquisition of a property within one joint venture, redevelopment projects with the Company’s joint ventures, the purchase of additional ownership in certain joint ventures and the repayment of debt in certain joint ventures.

 

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Acquisitions of Operating Real Estateand Other Related Net Assets

 

During the years ended December 31, 20162017 and 2015,2016, the Company expended $203.2$153.9 million and $661.4$203.2 million, respectively, towards the acquisition of operating real estate properties. The Company continues to transform the quality of its operating portfolio through its capital recycling program by acquiring what the Company believes are high quality U.S. retail properties and disposing of lesser quality assets.assets and acquiring larger, higher quality properties in key markets identified by the Company. The Company anticipates acquiringspending up to approximately $300.0$50.0 million to $400.0 milliontowards the acquisition of operating properties during 2017.2018. The Company intends to fund these acquisitions with proceeds from property dispositions, cash flow from operating activities assumption of mortgage debt, if applicable, and availability under the Company’s revolving line of credit.its Credit Facility.

 

Improvements to Operating Real Estate

 

During the years ended December 31, 20162017 and 2015,2016, the Company expended $143.5$206.8 million and $166.7$143.5 million, respectively, towards improvements to operating real estate. These amounts consist of the following (in thousands):

 

		Year Ended December 31,								Year Ended December 31,
		2016				2015				2017				2016
Redevelopment/renovations		$	96,319			$	125,994
Tenant improvements/tenant allowances			39,016				30,127
Redevelopment and renovations										$	177,840			$	96,319
Tenant improvements and tenant allowances											16,995				39,016
Other			8,154				10,549				11,965				8,154
Total (1)		$	143,489			$	166,670
Total (1)										$	206,800			$	143,489

 

(1)

During the years ended December 31, 20162017 and 2015,2016, the Company capitalized interest of $2.4$3.5 million and $3.0$2.4 million, respectively, and capitalized payroll of $2.1$3.1 million and $3.0$2.1 million, respectively, in connection with the Company’s improvements to operating real estate.

During the years ended December 31, 2016 and 2015, the Company capitalized personnel costs of $15.4 million and $13.9 million, respectively, relating to deferred leasing costs.

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The Company has an ongoing program to redevelop and re-tenant its properties to maintain or enhance its competitive position in the marketplace. The Company is actively pursuing redevelopment opportunities within its operating portfolio which it believes will increase the overall value by bringing in new tenants and improving the assets’assets’ value. The Company has identified three categories of redevelopment, (i) large scale redevelopment, which involves demolishing and building new square footage, (ii) value creation redevelopment, which includes the subdivision of large anchor spaces into multiple tenant layouts, and (iii) creation of out-parcels and pads which are located in the front of the shopping center properties. The Company anticipates its capital commitment toward these redevelopment projects and re-tenanting efforts during 20172018 will be approximately $250.0$225.0 million to $300.0 million. The funding of these capital requirements will be provided by proceeds from property dispositions, cash flow from operating activities and availability under the Company’s revolving line of credit.Credit Facility.

 

Improvements to Real Estate UnderDevelopment

 

The Company is engaged in select real estate development projects, which are expected to be held as long-term investments by the Company. investments. As of December 31, 2016,2017, the Company had in progress a total of six consolidatedfour active real estate development projects locatedand two additional projects held for future development. During the years ended December 31, 2017 and 2016, the Company expended $160.3 million and $72.8 million, respectively, towards improvements to real estate under development. The Company capitalized (i) interest of $11.0 million and $6.9 million, (ii) real estate taxes, insurance and legal costs of $5.7 million and $5.2 million and (iii) payroll of $3.3 million and $1.8 million during the years ended December 31, 2017 and 2016, respectively, in connection with these real estate development projects. The Company anticipates the U.S.total remaining costs to complete these four active projects to be approximately $200.0 million to $250.0 million. The Company anticipates its capital commitment toward these development projects during 20172018 will be approximately $150.0$175.0 million to $200.0$225.0 million. The funding of these capital requirements will be provided by proceeds from property dispositions, cash flow from operating activities and availability under the Company’s revolving line of credit. The Company anticipates remaining costs to complete for these projects to be approximately $225.0 million to $275.0 million. Additionally, during the year ended December 31, 2016, the Company capitalized interest of $6.9 million, real estate taxes and insurance of $4.3 million and payroll of $1.8 million, in connection with these real estate development projects.Credit Facility.

 

Financing Activities

 

Cash flow used for financing activities was $223.9 million for the year ended December 31, 2016, was $804.5 million,2017, as compared to $512.9$804.5 million for 2016. Financing activities during 2017 primarily consisted of the comparable period in 2015. This changefollowing:

Cash outflows:

●

$702.3 million for principal payments on debt, including normal amortization on rental property debt;

●

$550.0 million for repayments under unsecured term loan/notes, including $300.0 million Medium Term Notes and payoff of $250.0 million Term Loan;

●

$17.1 million for repayments under unsecured revolving credit facility, net;

●

$506.2 million of dividends paid;

●

$225.0 million for the partial redemption of Class I Preferred Stock;

●

$96.6 million for conversion/distribution of noncontrolling interests, primarily related to the redemption of certain partnership units by consolidated subsidiaries; and

●

$23.3 million for financing origination costs, primarily related to costs associated with the issuance of Senior Unsecured Notes and the Credit Facility.

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Table of $291.6 million resultedContents

Cash inflows:

●

$1.3 billion in proceeds from issuance of unsecured notes, including $500.0 million, $350.0 million and $400.0 million of Senior Unsecured Notes, issued separately;

●

$440.9 million in proceeds from issuance of stock, net, including the issuances of Class L Preferred Stock and Class M Preferred Stock; and

●

$206.0 million in proceeds from mortgage loan financing.

Financing activities during 2016 primarily from (i) an increase consisted of:

Cash outflows:

●

$1.26 billion for repayments under unsecured term loan/notes, including paydown of $400.0 million Term Loan, $300.0 million Medium Term Notes, $290.0 million Senior Unsecured Notes and $270.9 million Canadian Notes Payable;

●

$719.9 million for principal payments on debt, including normal amortization on rental property debt;

●

$474.0 million of dividends paid;

●

$45.7 million for payment of early extinguishment of debt charges related to the optional make-whole provisions on unsecured notes that were repaid prior to maturity and prepayment penalties on a mortgage encumbering 10 operating properties;

●

$25.7 million for financing origination costs, primarily related to costs associated with the issuance of Senior Unsecured Notes; and

●

$12.6 million for conversion/distribution of noncontrolling interests.

Cash in repayments under unsecured term loan/notes of $511.9 million, (ii) an increase in principal payments of $135.6 million, (iii) a decrease in contributions from noncontrolling interests, net of $106.2 million, primarily relating to the joint venture investment in Safeway, (iv) a decrease in proceeds from issuance of unsecured term loan/notes of $100.0 million, (v) an increase in early extinguishment of debt charges of $45.7 million and (vi) an increase in dividends paid of $18.2 million, partially offset by (vii) an increase in proceeds from issuance of stock of $288.7 million, (viii) a decrease in redemption of preferred stock of $175.0 million, (ix) an increase in proceeds from unsecured revolving credit facility, net of $126.4 million and (x) a decrease in redemption of noncontrolling interests of $43.2 million.flows:

●

$1.4 billion in proceeds from issuance of unsecured notes, including $500.0 million, $400.0 million, $350.0 million and $150.0 million of Senior Unsecured Notes, issued separately;

●

$307.4 million in proceeds from issuance of stock, including common stock issued under the Company's ATM program; and

●

$26.4 million in proceeds from unsecured revolving credit facility, net.

 

The Company continually evaluates its debt maturities, and, based on management’smanagement’s current assessment, believes it has viable financing and refinancing alternatives that will not materially adversely impact its expected financial results. The Company continues to pursue borrowing opportunities with large commercial U.S. and global banks, select life insurance companies and certain regional and local banks. The Company has noticed a continuing trend that, although pricing remains dependent on specific deal terms, generally spreads for non-recourse mortgage financing had been widening due to global economic issues, but have recently stabilized. However,has stabilized and the unsecured debt markets are functioning well and credit spreads are at manageable levels.

 

Debt maturities for 20172018 consist of: $451.6$73.0 million of consolidated debt; $358.2$203.7 million of unconsolidated joint venture debt; and $59.3$6.1 million of debt on properties included in the Company’s Preferred Equity Program, assuming the utilization of extension options where available.  Subsequent to December 31, 2016, the Company paid off the remaining $250.0 million outstanding balance on the Company’s unsecured term loan. The 20172018 consolidated debt maturities are anticipated to be repaid with operating cash flows, borrowings from the Company’s revolving credit facility (which at December 31, 2016, had $1.725 billion available and was subsequently increased to $2.25 billion)Credit Facility and debt refinancing where applicable.  In addition, the Company has $12.4 million of consolidated debt related to one non-recourse mortgage that is currently in default for which the Company is working with the special servicers on a resolution.  The 20172018 debt maturities on properties in the Company’s unconsolidated joint ventures and Preferred Equity Program are anticipated to be repaid through operating cash flows, debt refinancing, unsecured credit facilities, proceeds from sales and partner capital contributions, as deemed appropriate.

 

The Company intends to maintain strong debt service coverage and fixed charge coverage ratios as part of its commitment to maintain its investment-grade senior, unsecured debt ratings.   The Company may, from time-to-time, seek to obtain funds through additional common and preferred equity offerings, unsecured debt financings and/or mortgage/construction loan financings and other capital alternatives.

 

Since the completion of the Company’sCompany’s IPO in 1991, the Company has utilized the public debt and equity markets as its principal source of capital for its expansion needs. Since the IPO, the Company has completed additional offerings of its public unsecured debt and equity, raising in the aggregate over $12.2$13.8 billion.  Proceeds from public capital market activities have been used for the purposes of, among other things, repaying indebtedness, acquiring interests in open-air shopping centers, funding real estate under development projects, expanding and improving properties in the portfolio and other investments.

 

During February 2015, the Company filed a shelf registration statement on Form S-3, which is effective for a term of three years, for the future unlimited offerings, from time-to-time, of debt securities, preferred stock, depositary shares, common stock and common stock warrants. The Company, pursuant to this shelf registration statement may, from time-to-time, offer for sale its senior unsecured debt for any general corporate purposes, including (i) funding specific liquidity requirements in its business, including property acquisitions, development and redevelopment costs and (ii) managing the Company’sCompany’s debt maturities. (See Footnote 1312 of the Notes to Consolidated Financial Statements included in this Form 10-K.)

 

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Preferred Stock-

 

AtDuring August 2017, the Market Continuous Offering Program (“ATM program”Company issued 9,000,000 Depositary Shares (the "Class L Depositary Shares"), each representing a one-thousandth fractional interest in a share of the Company's 5.125% Class L Cumulative Redeemable Preferred Stock, $1.00 par value per share. Dividends on the Class L Depositary Shares are cumulative and payable quarterly in arrears at the rate of 5.125% per annum based on the $25.00 per share initial offering price, or $1.28125 per annum.  The Class L Depositary Shares are redeemable, in whole or part, for cash on or after August 16, 2022, at the option of the Company, at a redemption price of $25.00 per depositary share, plus any accrued and unpaid dividends thereon.  The Class L Depositary Shares are not convertible or exchangeable for any other property or securities of the Company.  The net proceeds received from this offering of $218.1 million, before legal costs, were used for general corporate purposes, including the reduction of borrowings outstanding under the Company’s revolving credit facility and the redemption of shares of the Company’s preferred stock.

On August 7, 2017, the Company called for the partial redemption of 9,000,000 of its outstanding depositary shares of the Company’s 6.00% Class I Cumulative Redeemable Preferred Stock, $1.00 par value per share (the "Class I Preferred Stock"), representing 56.25% of the issued and outstanding Class I Preferred Stock. The aggregate redemption amount of $225.0 million plus accumulated and unpaid dividends of $1.9 million, was paid on September 6, 2017. Upon partial redemption, the Company recorded a charge of $7.0 million resulting from the difference between the redemption amount and the carrying amount of the Class I Preferred Stock on the Company’s Consolidated Balance Sheets in accordance with the FASB’s guidance on Distinguishing Liabilities from Equity. This $7.0 million charge was subtracted from net income attributable to the Company to arrive at net income available to the Company’s common shareholders and used in the calculation of earnings per share for the year ended December 31, 2017.

During December 2017, the Company issued 9,200,000 Depositary Shares (the "Class M Depositary Shares"), each representing a one-thousandth fractional interest in a share of the Company's 5.250% Class M Cumulative Redeemable Preferred Stock, $1.00 par value per share. Dividends on the Class M Depositary Shares are cumulative and payable quarterly in arrears at the rate of 5.250% per annum based on the $25.00 per share initial offering price, or $1.3125 per annum.  The Class M Depositary Shares are redeemable, in whole or part, for cash on or after December 20, 2022, at the option of the Company, at a redemption price of $25.00 per depositary share, plus any accrued and unpaid dividends thereon.  The Class M Depositary Shares are not convertible or exchangeable for any other property or securities of the Company.  The net proceeds received from this offering of $222.8 million, before legal costs, were used for general corporate purposes, including the reduction of borrowings outstanding under the Company’s revolving credit facility. Additionally, during January 2018, the underwriters exercised the over-allotment option for the issuance of an additional 1,380,000 Class M Depositary Shares each representing a one-thousandth fractional interest in a share of the Company's 5.250% Class M Cumulative Redeemable Preferred Stock, $1.00 par value per share. The net proceeds from the issuance of these shares were $33.4 million, before legal costs, which were used for general corporate purposes, including the reduction of borrowings outstanding under the Company’s Credit Facility.

Common Stock

During February 2018, the Company’s Board of Directors authorized a share repurchase program, pursuant to which the Company may repurchase shares of its common stock, par value $0.01 per share, with an aggregate gross purchase price of up to $300.0 million.

 

During February 2015, the Company established an At the Market Continuous Offering Program (“ATM program,program”), which is effective for a term of three years, pursuant to which the Company may offer and sell shares of its common stock, par value $0.01 per share, with an aggregate gross sales price of up to $500.0 million through a consortium of banks acting as sales agents. Sales of the shares of common stock may be made, as needed, from time to time in “at the market” offerings as defined in Rule 415 of the Securities Act of 1933, including by means of ordinary brokers’ transactions on the NYSE or otherwise (i) at market prices prevailing at the time of sale, (ii) at prices related to prevailing market prices or (iii) as otherwise agreed to with the applicable sales agent. DuringThe Company did not offer for sale any shares of common stock under the ATM program during the year ended December 31, 2016, the Company issued 9,806,377 shares and received proceeds of $285.2 million, net of commissions and fees of $2.9 million.2017. As of December 31, 2016,2017, the Company had $211.9 million available under this ATM program.

 

Medium Term Notes (“MTN”) and Senior Notes

The Company’sCompany’s supplemental indenture governing its MTN and senior notes contains the following covenants, all of which the Company is compliant with:

 

Covenant		Must Be		As of 12/31/1617
Consolidated Indebtedness to Total Assets		<65%		38%	39%
Consolidated Secured Indebtedness to Total Assets		<40%		8%	6%
Consolidated Income Available for Debt Service to Maximum Annual Service Charge		>1.50x		6.0x4.9x
Unencumbered Total Asset Value to Consolidated Unsecured Indebtedness		>1.50x		2.8x2.6x

 

For a full description of the various indenture covenants refer to the Indenture dated September 1, 1993; the First Supplemental Indenture dated August 4, 1994; the Second Supplemental Indenture dated April 7, 1995; the Third Supplemental Indenture dated June 2, 2006; the Fourth Supplemental Indenture dated April 26, 2007; the Fifth Supplemental Indenture dated as of September 24, 2009; the Sixth Supplemental Indenture dated as of May 23, 2013; and the Seventh Supplemental Indenture dated as of April 24, 2014, each as filed with the SEC.See the Exhibits Index for specific filing information.

 

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During the year ended December 31, 2016,2017, the Company issued the following Senior Unsecured Notes(dollars (dollars in millions):

 

	Date Issued	Maturity Date		Amount Issued	Interest Rate
	Nov-16	Mar-24	$	400.0	2.7%
	Nov-16	Dec-46	$	350.0	4.125%
	Aug-16	Oct-26	$	500.0	2.8%
	May-16	Apr-45	$	150.0	4.25%

Date Issued		Maturity Date		Amount Issued				Interest Rate
Aug-17		Feb-25		$	500.0				3.30%
Aug-17		Sep-47		$	350.0				4.45%
Mar-17		Apr-27		$	400.0				3.80%

 

Interest on these senior unsecured notes is payable semi-annually in arrears. The Company used the net proceeds from these issuances, after the underwriting discounts and related offering costs, for general corporate purposes, including to pre-fund near-term debt maturities or to reduce borrowings under the Company’s revolving credit facility.Credit Facility.

 

During the year ended December 31, 2016,On August 1, 2017, the Company repaid (i)made a tender offer to purchase any and all of its $300.0 million 5.783% medium term4.30% MTN notes which matured in March 2016 and (ii)outstanding. As a result, the Company accepted the tender of $211.0 million of its $290.9$300.0 million 5.70% senior unsecuredoutstanding MTN notes which were scheduled to mature in Mayon August 10, 2017. TheIn connection with this tender offer, the Company recorded an early extinguishmenta tender premium of debt charge of $10.2$1.8 million resulting from the earlypartial repayment of its $290.9this note. In addition, in November 2017, the Company redeemed the remaining $89.0 million 5.70% notes.

Canadian Notes Payable4.30% MTN notes outstanding.

 

During August 2016, Kimco North Trust III, a wholly-owned subsidiary ofCredit Facility

In February 2017, the Company repaid (i) its CAD $150.0 million (USD $116.1 million) 5.99% notes, which were scheduled to mature in April 2018 and (ii) its CAD $200.0 million (USD $154.8 million) 3.855% notes, which were scheduled to mature in August 2020. The Company recorded aggregate early extinguishment of debt charges of CAD $34.1 million (USD $26.3 million) resulting from the early repayment of these notes.

Credit Facility

The Company hadclosed on a $1.75$2.25 billion unsecured revolving credit facility (the “Credit Facility”) with a group of banks, which wasis scheduled to expire in March 20182021, with two additional six monthsix-month options to extend the maturity date, at the Company’s discretion, to March 2019. The2022. This Credit Facility, which could be increased to $2.25 billion through an accordion feature, accruedaccrues interest at a rate of LIBOR plus 92.587.5 basis points (1.67%(2.28% as of December 31, 2016) on drawn funds.2017), can be increased to $2.75 billion through an accordion feature. The Credit Facility replaced the Company’s $1.75 billion unsecured revolving credit facility that was scheduled to mature in March 2018. In addition, the Credit Facility includedincludes a $500$500.0 million sub-limit which providedprovides the Company the opportunity to borrow in alternative currencies including Canadian Dollars (“CAD”), British Pounds Sterling, Japanese Yen or Euros. Pursuant to the terms of the Credit Facility, the Company, among other things, wasis subject to covenants requiring the maintenance of (i) maximum leverage ratios on both unsecured and secured debt and (ii) minimum interest and fixed coverage ratios. As of December 31, 2016,2017, the Credit Facility had a balance of $25.0CAD 10.0 million (USD $8.0 million) outstanding and $0.7$0.5 million appropriated for letters of credit.

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In February 2017, the Company closed on a new $2.25 billion unsecured revolving credit facility (the “New Credit Facility”) with a group of banks, which is scheduled to expire in March 2021 with two additional six month options to extend the maturity date, at the Company’s discretion, to March 2022. The New Credit Facility could be increased to $2.75 billion through an accordion feature. The New Credit Facility replaces the Company’s Credit Facility discussed above, that was scheduled to mature in March 2018. The New Credit Facility accrues interest at a rate of LIBOR plus 87.5 basis points on drawn funds. In addition, there is a $500.0 million sub-limit which provides the company the opportunity to borrow in alternative currencies including Canadian Dollars, British Pounds Sterling, Japanese Yen or Euros. Pursuant to the terms of the New Credit Facility, the Company continues to be subject to the covenants under the Credit Facility. For a full description of the New Credit Facility’s covenants refer to the Amended and Restated Credit Agreement dated as of February 1, 2017, filed as Exhibit 10.1 to the Company’s Current Report on Form 8-K dated January 30, 2017.

 

Pursuant to the terms of the Credit Facility, the Company, among other things, is subject to maintenance of various covenants. The Company is currently in compliance with these covenants. The financial covenants for the Credit Facility are as follows:

 

CoCovenantvenant		Must Be		As of 12/31/1617
Total Indebtedness to Gross Asset Value (“GAV”)		<60%		41%40%
Total Priority Indebtedness to GAV		<35%		8%5%
Unencumbered Asset Net Operating Income to Total Unsecured Interest Expense		>1.75x1.75x		4.90x4.4x
Fixed Charge Total Adjusted EBITDA to Total Debt Service		>1.50x1.50x		2.84x2.8x

 

For a full description of the New Credit Facility’sFacility’s covenants refer to the Amended and Restated Credit Agreement dated as of March 17, 2014,February 1, 2017, filed as Exhibit 10.1 to the Company’s Current Report on Form 8-K dated March 20, 2014.January 30, 2017.

 

Term Loan

 

The Company hadhad a $650.0 million unsecured term loan (“Term Loan’Loan”) which was scheduled to mature in January 2017, with three one-year extension options at the Company’s discretion, anddiscretion. The Term Loan accrued interest at a spread (95LIBOR plus 95 basis points at December 31, 2016) to LIBOR or at the Company’s option at a base rate as defined per the agreement (1.60% at December 31, 2016).points. During November 2016, the Company repaid $400.0 million of borrowings under the Company’s Term Loan. As of December 31, 2016, the Term Loan had a balance of $250.0 million. Pursuant to the terms of the credit agreement for the Term Loan, the Company, among other things, is subject to covenants requiring the maintenance of (i) maximum indebtedness ratios and (ii) minimum interest and fixed charge coverage ratios. The Term Loan covenants are similar to the Credit Facility covenants described above. Duringin January 2017, the Company repaid the remaining $250.0 million balance on the Term Loan and terminated the agreement.

 

Mortgages Payable

 

During 2016,2017, the Company (i) assumed $289.0assumed/consolidated $257.5 million of individual non-recourse mortgage debt relating(including a fair market value adjustment of $8.5 million) related to the acquisition of 10two operating properties, including $4.3 million associated with fair value debt adjustments and (ii) paid off $703.0$692.9 million of mortgage debt (including fair market value adjustmentadjustments of $2.1$5.8 million) that encumbered 4727 operating properties. In connection with the early prepayment of certain of these mortgages, the Company recorded an early extinguishment of debt charge of $9.2 million.

Additionally, during 2016, the Company disposed of an encumbered property through foreclosure. This transaction resulted inproperties and (iii) obtained a net decrease in$206.0 million non-recourse mortgage debt of $25.6 million (including fair market value adjustment of $0.4 million) and a gain on forgiveness of debt of $3.1 million, which is included in Other income/(expense), net in the Company’s Consolidated Statements of Income.relating to one operating property. 

 

In addition to the public equity and debt markets as capital sources, the Company may, from time-to-time, obtain mortgage financing on selected properties and construction loans to partially fund the capital needs of its real estate under development projects. As of December 31, 2016,2017, the Company had over 360365 unencumbered property interests in its portfolio.

 

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Dividends

 

In connection with its intention to continue to qualify as a REIT for federal income tax purposes, the Company expects to continue paying regular dividends to its stockholders. These dividends will be paid from operating cash flows. The Company’sCompany’s Board of Directors will continue to evaluate the Company’s dividend policy on a quarterly basis as the Board of Directors monitors sources of capital and evaluates the impact of the economy and capital markets availability on operating fundamentals.  Since cash used to pay dividends reduces amounts available for capital investment, the Company generally intends to maintain a conservative dividend payout ratio, reserving such amounts as it considers necessary for the expansion and renovation of shopping centers in its portfolio, debt reduction, the acquisition of interests in new properties and other investments as suitable opportunities arise and such other factors as the Board of Directors considers appropriate.  Cash dividends paid were $506.2 million in 2017, $474.0 million in 2016, and $455.8 million in 2015 and $427.9 million in 2014.2015.

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Although the Company receives substantially all of its rental payments on a monthly basis, it generally intends to continue paying dividends quarterly. Amounts accumulated in advance of each quarterly distribution will be invested by the Company in short-term money market or other suitable instruments. On October 25, 2016,24, 2017, the Company’s Board of Directors declared an increased quarterly cash dividend of $0.27$0.28 per common share, an annualized increase of 5.9%3.7%, payable to shareholders of record on January 3, 2017,2, 2018, which was paid on January 15, 2017.16, 2018. Additionally, on February 2, 2017,January 30, 2018, the Company’s Board of Directors declared a quarterly cash dividend of $0.27$0.28 per common share payable to shareholders of record on April 5, 2017,3, 2018, which is scheduled to be paid on April 17, 2017.16, 2018.

 

The Board of Directors also declared quarterly dividends with respect to the Company’s various seriesclasses of cumulative redeemable preferred shares (Class I, Class J, Class K and Class K).L) and an initial dividend with respect to the Company’s Class M cumulative redeemable preferred shares, representing the period beginning on December 20, 2017. All dividends on the preferred shares are scheduled to be paid on April 17, 2017,16, 2018 to shareholders of record on April 4, 2017, with an ex-dividend date of March 31, 2017.3, 2018.

 

Hurricane Impact

The impact of Hurricanes Harvey, which struck Texas on August 25, 2017, and Irma, which struck Florida on September 10, 2017, resulted in minimal damage to the Company’s properties located in Texas and Florida, with the majority of the impact related to debris removal.

On September 20, 2017, Hurricane Maria struck Puerto Rico as a Category 4 hurricane which resulted in widespread damage, flooding, and power outages. The Company has interests in seven operating properties located throughout Puerto Rico, aggregating 2.2 million square feet of GLA, which were variously impacted by the hurricane.  The Company maintains a comprehensive property insurance policy on these properties with total coverage of up to $62.0 million, as well as business interruption insurance with coverage up to $39.3 million in the aggregate, subject to a collective deductible of $1.2 million.

As of December 31, 2017, the Company’s assessment of the damages sustained to its properties from Hurricane Maria resulted in a write-off to depreciation expense of $16.0 million, representing the estimated net book value of damaged assets. The Company also recorded a corresponding receivable and credit to depreciation expense of $16.0 million for estimated property insurance recoveries related to the write-off. As such, there was no impact to net income during 2017 resulting from these adjustments. The Company expects to collect property insurance proceeds (net of deductible) equal to the replacement cost of its damaged property, currently estimated to be approximately $26.0 million. As of December 31, 2017, the Company received property insurance proceeds of $4.0 million and has a remaining receivable balance of $12.0 million which is included in Other assets on the Company’s Consolidated Balance Sheets. The Company expects that the final replacement cost claim will exceed the amount written off due to property damage and that this excess amount will be recorded, net of the deductible, as income by the Company upon full settlement and collection of the casualty insurance claim.

The Company’s business interruption insurance covers lost revenues as a result of the hurricane for a period of up to one year. After the expiration of one year following the loss, the policy has 365 days of extended period of indemnity which provides business interruption coverage in the event the properties have not fully recovered from the storm. For the year ended December 31, 2017, the Company had a reduction in revenues from rental properties of $3.4 million related to lost tenant revenue and rent abatements resulting from the impact of Hurricane Maria. During December 2017, the Company received $1.6 million from its insurance provider for business interruption claims. The Company is still in the process of assessing current and future business interruption insurance losses and will submit insurance claims for its estimated losses under its business interruption insurance policy. 

OtherIncome Taxes

On December 22, 2017, the Tax Cuts and Jobs Act was signed into law, making significant changes to taxation of corporations and individuals. Effective for tax years beginning on January 1, 2018, this tax reform law reduces the federal statutory income tax rate from 35% to 21% for corporations and changed other certain tax provisions and deductions. ASC 740, Income Taxes, requires the effects of changes in tax rates and laws on deferred tax balances to be recognized in the period in which the legislation is enacted. As a result, the Company remeasured its deferred tax assets and liabilities and recorded a tax provision of $1.1 million during 2017.

 

The Company is subject to taxes on its activities in Canada, Puerto Rico and Mexico.  In general, under local country law applicable to the structures the Company has in place and applicable treaties, the repatriation of cash to the Company from its subsidiaries and joint ventures in Canada, Puerto Rico and Mexico generally are not subject to withholding tax. The Company is subject to and also includes in its tax provision non-U.S. income taxes on certain investments located in jurisdictions outside the U.S. These investments are held by the Company at the REIT level and not in the Company’s taxable REIT subsidiary. Accordingly, the Company does not expect a U.S. income tax impact associated with the repatriation of undistributed earnings from the Company’s foreign subsidiaries.

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Contractual Obligations and Other Commitments

 

The Company has debt obligations relating to its revolving credit facility, Term Loan, MTNs,Credit Facility, unsecured senior notes and mortgages with maturities ranging from less than one year to 30 years. As of December 31, 2016,2017, the Company’s total debt had a weighted average term to maturity of 8.710.7 years. In addition, the Company has non-cancelable operating leases pertaining to its shopping center portfolio. As of December 31, 2016,2017, the Company had 4443 consolidated shopping center properties that are subject to long-term ground leases where a third party owns and has leased the underlying land to the Company to construct and/or operate a shopping center. The following table summarizes the Company’s debt maturities (excluding extension options, unamortized debt issuance costs of $50.8$65.4 million and fair market value of debt adjustments aggregating $27.7$19.2 million) and obligations under non-cancelable operating leases as of December 31, 2016 (in millions):2017:

 

		Payments due by period																												Payments due by period (in millions)
Contractual Obligations:		2017				2018				2019				2020				2021				Thereafter				Total				2018				2019				2020				2021				2022				Thereafter				Total
Long-Term Debt-Principal (1)		$	712.4			$	449.4			$	415.9			$	101.2			$	645.4			$	2,765.2			$	5,089.5
Long-Term Debt-Interest (2)		$	181.3			$	152.4			$	140.5			$	122.7			$	107.3			$	979.7			$	1,683.9
Long-Term Debt- Principal (1)																														$	98.4			$	415.7			$	136.4			$	653.3			$	640.6			$	3,580.7			$	5,525.1
Long-Term Debt- Interest (2)																														$	209.0			$	198.6			$	180.7			$	163.3			$	145.3			$	1,437.4			$	2,334.3
Operating Leases:
Ground Leases (3)		$	8.7			$	8.7			$	8.8			$	8.3			$	8.3			$	143.0			$	185.8			$	9.1			$	9.1			$	8.6			$	8.6			$	8.5			$	138.5			$	182.5

 

(1)

Maturities utilized do not reflect extension options, which range from one to three years.

(2)

For loans which have interest at floating rates, future interest expense was calculated using the rate as of December 31, 2016.2017.

(3)

For leases which have inflationary increases,increases, future ground rent expense was calculated using the rent as of December 31, 2016.2017.

 

The Company had a $250.0 million unsecured term loan and $462.4has $73.0 million of secured debt scheduled to mature in 2017. Subsequent to December 31, 2016, the Company paid off the $250.0 million unsecured term loan.2018. The Company anticipates satisfying the remaining maturities with a combination of operating cash flows, its unsecured revolving credit facility,Credit Facility, exercise of extension options, where available, and new debt issuances. In addition, the Company has $12.4 million of consolidated debt related to one non-recourse mortgage that is currently in default for which the Company is working with the special servicers on a resolution. 

 

The Company has issued letters of credit in connection with completion and repayment guarantees for loans encumbering certain of the Company’sCompany’s development and redevelopment projects and guarantee of payment related to the Company’s insurance program. As of December 31, 2016,2017, these letters of credit aggregated $40.8$40.4 million.

 

In connection with the construction of its development/development/redevelopment projects and related infrastructure, certain public agencies require posting of performance and surety bonds to guarantee that the Company’s obligations are satisfied. These bonds expire upon the completion of the improvements and infrastructure. As of December 31, 2016,2017, the Company had $30.1$20.0 million in performance and surety bonds outstanding.

 

The Company has accrued $5.0$4.0 million of non-current uncertain tax positions and related interest under the provisions of the authoritative guidance that addresses accounting for income taxes, which are included in Other liabilities on the Company’s Consolidated Balance Sheets at December 31, 2016.2017. These amounts are not included in the table above because a reasonably reliable estimate regarding the timing of settlements with the relevant tax authorities, if any, cannot be made.

 

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Off-Balance Sheet Arrangements

 

Unconsolidated Real Estate Joint Ventures

 

The Company has investments in various unconsolidated real estate joint ventures with varying structures. These joint ventures primarily operate shopping center properties. Such arrangements are generally with third-party institutional investors and individuals. The properties owned by the joint ventures are primarily financed with individual non-recourse mortgage loans, however, the Company, on a selective basis, has obtained unsecured financing for certain joint ventures. As of December 31, 2016,2017, the Company did not guarantee any joint venture unsecured debt. Non-recourse mortgage debt is generally defined as debt whereby the lenders’ sole recourse with respect to borrower defaults is limited to the value of the property collateralized by the mortgage. The lender generally does not have recourse against any other assets owned by the borrower or any of the constituent members of the borrower, except for certain specified exceptions listed in the particular loan documents (see Footnote 87 of the Notes to Consolidated Financial Statements included in this Form 10-K). As of December 31, 2016,2017, these investments include the following joint ventures:

 

Venture		Kimco Ownership Interest				Number of Properties				Non- Recourse Mortgages Payable (in millions)				Number of Encumbered Properties				Weighted Average Interest Rate				Weighted Average Term (months)*
KimPru and KimPru II (a)		15.0%					48			$	448.6				16			3.31%					73.0
KIR (b)		48.6%					45			$	730.7				38			4.69%					55.4
CPP (c)		55.0%					5			$	84.8				1			2.17%					16.0

Venture		Kimco Ownership Interest				Number of Properties				Non-Recourse Mortgages Payable (in millions)				Number of Encumbered Properties				Weighted Average Interest Rate				Weighted Average Term (months)*
KimPru and KimPru II (a)			15.0	%			46			$	426.5				15				3.72	%			67.7
KIR (b)			48.6	%			42			$	668.1				35				4.67	%			47.0
CPP (c)			55.0	%			4			$	84.9				1				2.91	%			4.0

* Average remaining term includes extensions

(a)

Represents the Company’sCompany’s joint ventures with Prudential Global Investment Management. As of December 31, 2016,2017, KimPru also has an unsecured term loan with an outstanding balance of $200.0 million (excluding deferred financing costs of $0.8 million), which is scheduled to mature in August 2019, with two one-year extension options at the joint venture’s discretion, and bears interest at a rate equal to LIBOR plus 1.75% (2.52%(3.31% at December 31, 2016)2017).

(b)

Represents the Company’sCompany’s joint ventures with certain institutional investors. As of December 31, 2016,2017, KIR also has ana $170.0 million unsecured revolving credit facility with an outstanding balance at December 31, 2017 of $16.0$34.4 million(excluding deferred financing costs of $0.5 million), which is scheduled to mature in June 2018,September 2020, with two one-year extension options at the joint venture’s discretion, and bears interest at a rate equal to LIBOR plus 1.75% (2.52%(3.31% at December 31, 2016)2017).

(c)

Represents the Company’sCompany’s joint ventures with Canada Pension Plan Investment Board (CPPIB).

 

The Company has various other unconsolidated real estate joint ventures with varying structures. As of December 31, 2016,2017, these other unconsolidated joint ventures had individual non-recourse mortgage loans aggregating $584.3$287.6 million. The aggregate debt as of December 31, 2016,2017, of all of the Company’s unconsolidated real estate joint ventures is $2.1$1.7 billion. As of December 31, 2016,2017, these loans had scheduled maturities ranging from one month to 10nine years and bore interest at rates ranging from 2.01%2.91% to 7.25%. Approximately $358.2$203.7 million of the aggregate outstanding loan balance matures in 2017.2018. These maturing loans are anticipated to be repaid with, operating cash flows, debt refinancing, unsecured credit facilities, proceeds from sales and partner capital contributions, as deemed appropriate (see Footnote 87 of the Notes to Consolidated Financial Statements included in this Form 10-K).

Other Real Estate Investments

 

The Company previously provided capital to owners and developers of real estate properties through its Preferred Equity Program. As of December 31, 2016,2017, the Company’s net investment under the Preferred Equity Program was $193.7$201.9 million relating to 365357 properties, including 346344 net leased properties. As of December 31, 2016,2017, these preferred equity investment properties had individual non-recourse mortgage loans aggregating $427.4$361.0 million. These loans have scheduled maturities ranging from one montheight months to eightseven years and bear interest at rates ranging from 4.19% to 10.47%. Due to the Company’s preferred position in these investments, the Company’s share of each investment is subject to fluctuation and is dependent upon property cash flows. The Company’s maximum exposure to losses associated with its preferred equity investments is limited to its invested capital.

 

FundsFrom Operations

 

Funds From Operations (“FFO”) is a supplemental non-GAAP financial measure utilized to evaluate the operating performance of real estate companies. The National Association of Real Estate Investment Trusts (“NAREIT”) defines FFO as net income/(loss) attributableavailable to the Company’s common shareholders computed in accordance with generally accepted accounting principles in the United States (“GAAP”), excluding (i) gains or losses from sales of operating real estate assets and change in control of interests, plus (ii) depreciation and amortization of operating properties and (iii) impairment of depreciable real estate and in substance real estate equity investments and (iv) after adjustments for unconsolidated partnerships and joint ventures calculated to reflect funds from operationsFFO on the same basis.

 

The Company presents FFO available to the Company’s common shareholders as it considers it an important supplemental measure of our operating performance and believes it is frequently used by securities analysts, investors and other interested parties in the evaluation of REITs, many of which present FFO available to the Company’s common shareholders when reporting results. Comparison of our presentation of FFO available to the Company’s common shareholders to similarly titled measures for other REITs may not necessarily be meaningful due to possible differences in the application of the NAREIT definition used by such REITs.

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The Company also presents FFO available to the Company’s common shareholders as adjusted as an additional supplemental measure as it believes it is more reflective of the Company’sits core operating performance. The Company believes FFO as adjustedperformance and provides investors and analysts an additional measure in comparingto compare the Company’s performance across reporting periods on a consistent basis by excluding items that we do not believe are indicative of our core operating performance. FFO available to the Company’s common shareholders as adjusted is generally calculated by the Company as FFO available to the Company’s common shareholders excluding certain transactional income and expenses and non-operating impairments which management believes are not reflective of the results within the Company’s operating real estate portfolio.

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FFO is a supplemental non-GAAP financial measure of real estate companies’companies’ operating performances, which does not represent cash generated from operating activities in accordance with GAAP and therefore should not be considered an alternative for net income as a measure of liquidity.  Our method of calculating FFO available to the Company’s common shareholders and FFO available to the Company’s common shareholders as adjusted may be different from methods used by other REITs and, accordingly, may not be comparable to such other REITs.

 

The Company’sCompany’s reconciliation of net income available to the Company’s common shareholders to FFO available to the Company’s common shareholders and FFO available to the Company’s common shareholders as adjusted for the three months and years ended December 31, 20162017 and 20152016 is as follows (in thousands, except per share data):

 

		Three Months Ended December 31,								Year Ended December 31,								Three Months Ended								Year Ended
		2016				2015				2016				2015				December 31,								December 31,
Net income available to common shareholders		$	66,718			$	360,020			$	332,630			$	831,215
Gain on disposition of operating property			(10,950	)			(43,347	) (4)			(92,824	)			(131,844	) (4)
																		2017				2016				2017				2016
Net income available to the Company’s common shareholders																		$	73,465			$	66,718			$	372,461			$	332,630
Gain on disposition of operating properties																			(31,436	)			(10,950	)			(92,830	)			(92,824	)
Gain on disposition of joint venture operating properties and change in control of interests			(14,880	)			(327,933	) (4)			(217,819	)			(557,744	) (4)			(6,849	)			(14,880	)			(79,034	)			(217,819	)
Depreciation and amortization - real estate related			89,476				82,732				347,315				333,840				83,959				89,476				356,191				347,315
Depreciation and amortization - real estate jointventures			9,477				14,552				45,098				68,556
Depreciation and amortization - real estate joint ventures																			9,835				9,477				39,248				45,098
Impairment of operating properties			24,125				8,545				101,928				52,021				32,854				24,125				65,148				101,928
(Benefit)/provision for income taxes (2)			(1,227	)			51,849				39,570				53,792				-				(1,227	)			(39	)			39,570
Noncontrolling interests (2)			245				(3,239	)			(182	)			(6,591	)			(1,688	)			245				(5,583	)			(182	)
FFO			162,984				143,179				555,716				643,245
Transactional (income)/expense:
FFO available to the Company’s common shareholders																			160,140				162,984				655,562				555,716
Transactional (income)/expense:
Profit participation from other real estate investments			(830	)			(48	)			(10,883	)			(11,399	)			(379	)			(830	)			(34,952	)			(10,883	)
Transactional losses from other real estate investments			-				-				461				-
Gains from land sales			(1,255	)			(798	)			(3,607	)			(7,621	)			(2,362	)			(1,255	)			(3,422	)			(3,607	)
Acquisition costs			1,133				2,546				5,023				4,430
Prepayment penalties			-				-				45,674				-
Severance costs – Canada			-				1,974				-				1,974
Acquisition and demolition costs																			3,589				1,133				4,686				5,023
Gain on forgiveness of debt			(7,357	)			-				(7,357	)			-				(380	)			(7,357	)			(380	)			(7,357	)
Distributions in excess of Company’s investment basis			-				(303	)			(845	)			(5,553	)
Gain on sale of marketable securities			-				(1,365	)			-				(39,853	)
Early extinguishment of debt charges																			-				-				1,753				45,674
Severance costs																			5,190				-				5,190				-
Gain on liquidation of a foreign entity																			-				-				(14,822	)			-
Impairments on other investments			5,300				9,012				6,358				17,860				423				5,300				11,766				6,358
Preferred stock redemption charge			-				5,816				-				5,816				-				-				7,014				-
Other expense/(income), net			62				(5,101	)			22				(5,505	)
Provision/(benefit) for income taxes (3)			257				(1,841	)			38,433				(227	)
Other, net																			170				62				494				(362	)
Provision for income taxes (3)																			-				257				8				38,433
Noncontrolling interests (3)			125				-				410				270				-				125				11,338				410
Total transactional (income)/expense, net			(2,565	)			9,892				73,689				(39,808	)
FFO as adjusted		$	160,419			$	153,071			$	629,405			$	603,437
Total transactional expense/(income), net																			6,251				(2,565	)			(11,327	)			73,689
FFO available to the Company’s common shareholders as adjusted																		$	166,391			$	160,419			$	644,235			$	629,405
Weighted average shares outstanding for FFO calculations:
Basic			423,087				411,667				418,402				411,319				423,734				423,087				423,614				418,402
Units			841				860				853				791				961				841				852				853
Dilutive effect of equity awards			1,162				1,481				1,307				1,414				354				1,162				405				1,307
Diluted			425,090	(1)			414,008	(1)			420,562	(1)			413,524	(1)			425,049	(1)			425,090	(1)			424,871	(1)			420,562	(1)
FFO per common share – basic		$	0.39			$	0.35			$	1.33			$	1.56			$	0.38			$	0.39			$	1.55			$	1.33
FFO per common share – diluted		$	0.38	(1)		$	0.35	(1)		$	1.32	(1)		$	1.56	(1)		$	0.38	(1)		$	0.38	(1)		$	1.55	(1)		$	1.32	(1)
FFO as adjusted per common share – basic		$	0.38			$	0.37			$	1.50			$	1.47			$	0.39			$	0.38			$	1.52			$	1.50
FFO as adjusted per common share – diluted		$	0.38	(1)		$	0.37	(1)		$	1.50	(1)		$	1.46	(1)		$	0.39	(1)		$	0.38	(1)		$	1.52	(1)		$	1.50	(1)

 

(1)

Reflects the potential impact if certain units were converted to common stock at the beginning of the period, which would have a dilutive effect on FFO. FFO would be increased by $229$274 and $217$229 for the three months ended December 31, 20162017 and 2015,2016, respectively, and $881$923 and $781$881 for the years ended December 31, 20162017 and 2015,2016, respectively. The effect of other certain convertible units would have an anti-dilutive effect upon the calculation of Income from continuing operations per share. Accordingly, the impact of such conversion has not been included in the determination of diluted earnings per share calculations.

(2)	Related to gains, impairment and deprecation on operating properties, where applicable.

(3)	Related to transaction (income)/expense, where applicable.

(4)

Includes cumulative foreign currency translation net loss of $18.8 million due to the liquidation of the Company's Chilean Portfolio as follows: (i) $19.6 million of loss in Gain on disposition of operating property, net, partially offset by (ii) $0.8 million of gain in Gain on disposition of joint venture operating properties and change in control of interests.

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U.S. Same Property Net Operating Income (“U.S. sameSame property NOI”)

 

U.S. sameSame property NOI is a supplemental non-GAAP financial measure of real estate companies’companies’ operating performance and should not be considered an alternative to net income in accordance with GAAP or as a measure of liquidity. U.S. sameThe Company considers Same property NOI is considered by management to beas an important operating performance measure of the Company’s operations and management believes thatbecause it is frequently used by securities analysts and investors as ato measure of the Company’s operating performance because it includes only the net operating income of U.S. properties that have been owned by the Company for the entire current and prior year reporting periods including thoseperiods. It excludes properties under redevelopment, and excludes properties under development and pending stabilization. Propertiesstabilization; properties are deemed stabilized at the earlier of (i) reaching 90% leased or (ii) one year following a project’s inclusion in operating real estate. U.S. sameSame property NOI assists in eliminating disparities in net income due to the development, acquisition or disposition of properties during the particular period presented, and thus provides a more consistent performance measure for the comparison of the Company's properties.

 

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U.S. same

Same property NOI is calculated using revenues from rental properties (excluding straight-line rent adjustments, lease termination fees and amortization of above/below market rents and includesrents) less charges for bad debt) lessdebt, operating and maintenance expense, real estate taxes and rent expense plus the Company’sCompany’s proportionate share of U.S. sameSame property NOI from U.S. unconsolidated real estate joint ventures, calculated on the same basis. The Company’s method of calculating U.S. sameSame property NOI available to the Company’s common shareholders may differ from methods used by other REITs and, accordingly, may not be comparable to such other REITs.

 

The following is a reconciliation of Net income available to the Company’s Income from continuing operationsCompany’s common shareholders to U.S. sameSame property NOI (in thousands):

 

		Three Months Ended December 31,								Year Ended December 31,								Three Months Ended December 31,								Year Ended December 31,
		2016				2015				2016				2015				2017				2016				2017				2016
Income from continuing operations		$	69,836			$	339,117			$	299,353			$	774,405
Net income available to the Company’s common shareholders																		$	73,465			$	66,718			$	372,461			$	332,630
Adjustments:
Management and other fee income			(4,117	)			(4,369	)			(18,391	)			(22,295	)			(4,593	)			(4,117	)			(17,049	)			(18,391	)
General and administrative expenses			27,462				33,413				117,302				122,735
General and administrative																			32,060				27,462				118,455				117,302
Impairment charges			25,140				17,475				93,266				45,383				33,051				25,140				67,331				93,266
Depreciation and amortization			90,884				86,095				355,320				344,527				85,024				90,884				360,811				355,320
Interest and other expense, net			40,818				52,525				232,798				174,656				53,380				40,818				191,150				232,798
(Benefit)/provision for income taxes, net			(747	)			48,297				72,545				60,230
Gain on change in control of interests, net			(4,290	)			(3,091	)			(57,386	)			(149,234	)
Provision/(benefit) for income taxes, net																			1,344				(747	)			(880	)			72,545
Gain on change in control of interests																			-				(4,290	)			(71,160	)			(57,386	)
Equity in income of other real estate investments, net			(5,241	)			(4,854	)			(27,773	)			(36,090	)			(5,049	)			(5,241	)			(67,001	)			(27,773	)
Gain on sale of operating properties, net of tax																			(31,436	)			(10,850	)			(93,538	)			(86,785	)
Net (loss)/income attributable to noncontrolling interests																			(330	)			2,413				13,596				7,288
Preferred stock redemption charge																			-				-				7,014				-
Preferred stock dividends																			11,431				11,555				46,600				46,220
Non same property net operating income			(16,194	)			(41,218	)			(88,070	)			(173,189	)			(27,390	)			(20,555	)			(85,681	)			(108,248	)
Non-operational expense/(income) from joint ventures, net			8,474				(297,488	)			(58,563	)			(245,380	)			9,360				8,474				72,970				(58,563	)
U.S. same property NOI		$	232,025			$	225,902			$	920,401			$	895,748
Same property NOI																		$	230,317			$	227,664			$	915,079			$	900,223

 

U.S. sameSame property NOI increased by $6.1$2.7 million or 2.7%1.2% for the three months ended December 31, 2016,2017, as compared to the corresponding period in 2015.2016. This increase is primarily the result of (i) an increase of $4.5$3.0 million related to lease-up and rent commencements in the portfolio and (ii) an increase of $1.6 million in other property income net of $0.9 million, partially offset by (iii) an increase of $1.2 million of credit losses. The percentage increase in Same property expenses.NOI for the three months ended December 31, 2017 was negatively impacted by 120 basis points due to the impact of Hurricane Maria on the Company’s Puerto Rico properties.

 

U.S. sameSame property NOI increased by $24.7$14.9 million or 2.8%1.7% for the year ended December 31, 2016,2017, as compared to the corresponding period in 2015.2016. This increase is primarily the result of (i) an increase of $13.1$11.7 million related to lease-up and rent commencements in the portfolio, and(ii) an increase of $11.6 million in other property income net of $1.8 million and (iii) a decrease of $1.4 million of credit losses. The percentage increase in Same property expenses.NOI for the year ended December 31, 2017 was negatively impacted by 30 basis points due to the impact of Hurricane Maria on the Company’s Puerto Rico properties.

 

Effects of Inflation

 

Many of the Company's long-term leases contain provisions designed to mitigate the adverse impact of inflation.  Such provisions include clauses enabling the Company to receive payment of additional rent calculated as a percentage of tenants' gross sales above pre-determined thresholds, which generally increase as prices rise, and/or escalation clauses, which generally increase rental rates during the terms of the leases. Such escalation clauses often include increases based upon changes in the consumer price index or similar inflation indices.  In addition, many of the Company's leases are for terms of less than 10 years, which permits the Company to seek to increase rents to market rates upon renewal. Most of the Company's leases include escalation clauses or require the tenant to pay an allocable share of operating expenses, including common area maintenance costs, real estate taxes and insurance, thereby reducing the Company's exposure to increases in costs and operating expenses resulting from inflation.  The Company periodically evaluates its exposure to short-term interest rates and foreign currency exchange rates and will, from time-to-time, enter into interest rate protection agreements and/or foreign currency hedge agreements which mitigate, but do not eliminate, the effect of changes in interest rates on its floating-rate debt and fluctuations in foreign currency exchange rates.

 

New Accounting Pronouncements

 

See FootnoteFootnote 1 of theNotesthe Notes to Consolidated Financial Statements included in this Form 10-K.

 

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Item7A. Quantitative and Qualitative Disclosures About Market Risk

 

The Company’sCompany’s primary market risk exposures are interest rate risk and foreign currency exchange rate risk. The following table presents the Company’s aggregate fixed rate and variable rate debt obligations outstanding, including fair market value adjustments and unamortized deferred financing costs, as of December 31, 2016,2017, with corresponding weighted-average interest rates sorted by maturity date. The table does not include extension options where available. The instruments’ actual cash flow amounts areavailable (amounts in millions.millions).

 

		2017				2018				2019				2020				2021				Thereafter				Total				Fair Value				2018				2019				2020				2021				2022				Thereafter				Total				Fair Value
Secured Debt
Fixed Rate		$	451.5			$	96.2			$	2.7			$	103.9			$	161.3			$	204.1			$	1,019.7			$	1,022.2			$	85.4			$	2.4			$	136.9			$	156.1			$	155.6			$	246.4			$	782.8			$	781.8
Average Interest Rate			5.68	%			4.72	%			5.29	%			5.39	%			5.39	%			4.46	%			5.27	%							5.63	%			5.29	%			5.31	%			5.39	%			4.05	%			4.43	%			4.83	%
Variable Rate		$	-			$	19.4			$	100.0			$	-			$	-			$	-			$	119.4			$	118.8			$	-			$	100.0			$	-			$	-			$	-			$	-			$	100.0			$	99.6
Average Interest Rate			-				3.37	%			1.91	%			-				-				-				2.15	%							-				2.60	%			-				-				-				-				2.60	%
Unsecured Debt
Fixed Rate		$	-			$	299.5			$	299.2			$	-			$	496.8			$	2,559.1			$	3,654.6			$	3,618.3			$	-			$	299.5			$	-			$	497.6			$	494.9			$	3,302.4			$	4,594.4			$	4,599.6
Average Interest Rate			-				4.30	%			6.88	%			-				3.20	%			3.40	%			3.73	%							-				6.88	%			-				3.20	%			3.40	%			3.54	%			3.71	%
Variable Rate		$	250.0			$	22.7			$	-			$	-			$	-			$	-			$	272.7			$	272.5			$	-			$	-			$	-			$	1.7							$	-			$	1.7			$	1.9
Average Interest Rate			1.60	%			1.67	%			-				-				-				-				1.61	%							-				-				-				2.28	%							-				2.28	%

 

Based on the Company’sCompany’s variable-rate debt balances, interest expense would have increased by $3.9$1.0 million for the year ended December 31, 2016,2017, if short-term interest rates were 1.0% higher.

The following table presents the Company’s foreign investments and respective cumulated translation adjustments (“CTA”) as of December 31, 2016. Investment amounts are shown in their respective local currencies and the U.S. dollar equivalents, CTA balances are shown in U.S. dollars:

Foreign Investment (in millions)
Country		Local Currency				U.S. Dollars				CTA Gain
Mexican real estate investments (MXN)			181.4			$	14.3			$	-
Canadian real estate investments (CAD)			47.5			$	35.3			$	6.3

The Company has not, and does not plan to, enter into any derivative financial instruments for trading or speculative purposes.

The Company’s revenues and equity in income (including gains on sales and impairment losses) from its foreign investments in U.S. dollar equivalents and their respective local currencies are as follows (in millions):

		2017				2016				2015
Revenues from consolidated in USD:
Mexico		$	0.3			$	0.6			$	1.9
Chile		$	-			$	-			$	6.7
Revenues from consolidated in local currencies:
Mexico (Mexican Pesos “MXN”)			5.7				11.3				28.2
Chile (Chilean Pesos “CLP”)			-				-				4,264.9
Equity in income/(loss) from unconsolidated joint ventures and preferred equity investments in USD:
Canada (1)		$	(1.3	)		$	152.6			$	409.1
Mexico (2)		$	(0.3	)		$	(3.6	)		$	(1.6	)
Chile (3)		$	-			$	-			$	0.9
Equity in income/(loss) from unconsolidated joint ventures and preferred equity investments in local currencies:
Canada (CAD) (1)			(1.7	)			199.5				540.1
Mexico (MXN)			(6.3	)			29.2				(24.0	)
Chile (CLP)			-				-				-

(1)

Includes impairment charge of $3.4 million (CAD 4.3 million) related to the pending sale of a property for the year ended December 31, 2017. In addition, includes gains of $141.9 million (CAD 185.9 million) and $373.8 million (CAD 439.9 million) on disposition of equity interests for the years ended December 31, 2016 and 2015, respectively.

(2)

Includes equity losses of $5.2 million and $0.8 million for the years ended December 31, 2016 and 2015, respectively, related to foreign investments for which the reporting currency is denominated in USD and not subject to foreign translation exposure.

(3)

Included in the year ended December 31, 2015 is the release of CTA of $0.8 million in equity income.

The following table presents the Company’s foreign investments in their respective local currencies and the U.S. dollar equivalents:

Foreign Investment (in millions)
Country		Local Currency				U.S. Dollars
Mexican real estate investments (MXN)			53.4			$	4.8
Canadian investments (CAD)			18.2			$	14.6

 

Currency fluctuations between local currency and the U.S. dollar, for investments for which the Company hashad determined that the local currency iswas the functional currency, for the period in which the Company held its investment resulted in a CTA.cumulative translation adjustment (“CTA”). This CTA iswas recorded as a component of Accumulated other comprehensive income (“AOCI”) on the Company’s Consolidated Balance Sheets. The CTA amounts are subject to future changes resulting from ongoing fluctuationsDuring the year ended December 31, 2017, the Company substantially liquidated its investments in the respectiveCanada and as such, recognized a net cumulative foreign currency exchange rates. Changestranslation gain of $10.0 million. The Company had previously substantially liquidated its investments in exchange rates are impacted by many factors that cannot be forecasted with reliable accuracy. Any changeMexico.  As a result of the substantial liquidation of the Company’s foreign investments, any future currency changes, which could have a favorable or unfavorable impact, onwill be recognized in Other (expense)/income, net in the Company’s CTA balance. The Company’s aggregate CTA gain balance at December 31, 2016, is $6.3 million.Consolidated Statements of Income.

 

Under GAAP, the Company is required to release CTA balances into earnings when the Company has substantially liquidated its investment in a foreign entity. The Company may, in the near term, substantially liquidate its remaining investment in Canada, which will require the then unrealized gain on foreign currency translation to be recognized as earnings. 

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Item8. Financial Statements and Supplementary Data

 

The response to this Item 8 is included in our audited Consolidated Financial Statements and Notes to Consolidated Financial Statements, which are contained in Part IV Item 15 of this Form 10-K.

 

Item9. Changes in and Disagreements With Accountants on Accounting and Financial Disclosure

 

None.

 

Item 9A.Item9A. Controls and Procedures

 

Evaluation of Disclosure Controls and Procedures

 

The Company’sCompany’s management, with the participation of the Company’s Chief Executive Officer and Chief Financial Officer, has evaluated the effectiveness of the Company’s disclosure controls and procedures (as such term is defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended (the "Exchange Act")) as of the end of the period covered by this report. Based on such evaluation, the Company’s Chief Executive Officer and Chief Financial Officer have concluded that, as of the end of such period, the Company’s disclosure controls and procedures are effective.

 

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Changes in Internal Control OverOver Financial Reporting

 

There have not been any changes in the Company’sCompany’s internal control over financial reporting (as such term is defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) during the fourth fiscal quarter ended December 31, 2016,2017, that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.

 

ManagementManagement’s’s Report on Internal Control Over Financial Reporting

 

Our management is responsible for establishing and maintaining adequate internal control over financial reporting, as such term is defined in Exchange Act Rule 13a-15(f) and 15d-15(f). Under the supervision and with the participation of our management, including our Chief Executive Officer and Chief Financial Officer, we conducted an evaluation of the effectiveness of our internal control over financial reporting based on the framework in theInternal Control - Integrated Framework (2013)2013)issued by the Committee of Sponsoring Organizations of the Treadway Commission. Based on our evaluation under the framework inInternal Control-Integrated Framework (2013)(2013), our management concluded that our internal control over financial reporting was effective as of December 31, 2016.2017.

 

TheThe effectiveness of our internal control over financial reporting as of December 31, 2016,2017, has been audited by PricewaterhouseCoopers LLP, an independent registered public accounting firm, as stated in their report which is included herein.

Item9B. Other Information

 

None.

Item 9B.PART III Other Information

 

None.

PART III

Item10. Directors, Executive Officers and Corporate Governance

 

The information required by this item is incorporated by reference to “Proposal 1—Election of Directors,” “Corporate Governance,” “Committees of the Board of Directors,” “Executive Officers” and “Other Matters” in our definitive proxy statement to be filed with respect to the Annual Meeting of Stockholders expected to be held on April 25, 201724, 2018 (“Proxy Statement”).

 

We have adopted a Code of Business Conduct and Ethics that applies to all employees (the “Code of Ethics”). The Code of Ethics is available at the Investors/Governance/Governance Documents section of our website at www.kimcorealty.com. A copy of the Code of Ethics is available in print, free of charge, to stockholders upon request to us at the address set forth in Item 1 of this Annual Report on Form 10-K under the section “Business - Background.” We intend to satisfy the disclosure requirements under the Securities and Exchange Act of 1934, as amended, regarding an amendment to or waiver from a provision of our Code of Ethics by posting such information on our web site.web-site.

 

Item11. Executive Compensation

 

The information required by this item is incorporated by reference to “Compensation Discussion and Analysis,” “Executive Compensation Committee Report,” “Compensation Tables,” “Compensation of Directors” and “Other Matters” in our Proxy Statement.

 

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Item12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters

 

The information required by this item is incorporated by reference to “Security Ownership of Certain Beneficial Owners and Management” and “Compensation Tables” in our Proxy Statement.

 

Item13. Certain Relationships and Related Transactions, and Director Independence

 

The information required by this item is incorporated by reference to “Certain Relationships and Related Transactions” and “Corporate Governance” in our Proxy Statement.

 

Item14. Principal Accounting Fees and Services

 

The information required by this item is incorporated by reference to “Independent Registered Public Accountants” in our Proxy Statement.

 

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PART IV

 

Item15. Exhibits, Financial Statement Schedules

 

			Form 10-K Report Page
(a)   1.   1	. Financial Statements –  The following consolidated financial information is included as a separate section of this annual report on Form 10-K.		Form 10-K Report Page
	Report of Independent Registered Public Accounting Firm		4047
	Consolidated Financial Statements
	Consolidated Balance Sheets as of December 31, 20162017 and 20152016		4148
	Consolidated Statements of Income for the years ended December 31, 2017, 2016 2015 and 20142015		4249
	Consolidated Statements of Comprehensive Income for the years ended December 31, 2017, 2016 2015 and 20142015		4350
	Consolidated Statements of Changes in Equity for the years ended December 31, 2017, 2016 2015 and 20142015		4451
	Consolidated Statements of Cash Flows for the years ended December 31, 2017, 2016 2015 and 20142015		4552
	Notes to Consolidated Financial Statements		4653
2	. Financial Statement Schedules -
	Schedule II -	Valuation and Qualifying Accounts for the years ended December 31, 2017, 2016 and 2015	8795
	Schedule III -	Real Estate and Accumulated Depreciation as of December 31, 2017	8896
	Schedule IV -	Mortgage Loans on Real Estate as of December 31, 2017	9098
	All other schedules are omitted since the required information is not present or is not present in amounts sufficient to require submission of the schedule.
3.3	. Exhibits -
	The exhibits listed on the accompanying Index to Exhibits are filed as part of this report.		3643

 

Item16. Form 10-K Summary

 

None

 

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INDEXTO EXHIBITS

 

			Incorporated by Reference
Exhibit Number	Exhibit Description		Form		File No.		Date of Filing		Exhibit Number			Filed/ Furnished  Herewith		Page Number
3.1(a)	Articles of Restatement of Kimco Realty Corporation, dated January 14, 2011		10-K		1-10899		02/28/11		3.1(a)
3.1(b)	Amendment to Articles of Restatement of Kimco Realty Corporation, dated May 8, 2014											*		91
3.1(c)	Articles Supplementary of Kimco Realty Corporation, dated November 8, 2010		10-K		1-10899		02/28/11		3.1(b)
3.1(d)	Articles Supplementary of Kimco Realty Corporation, dated March 12, 2012		8-A12B		1-10899		03/13/12		3.2
3.1(e)	Articles Supplementary of Kimco Realty Corporation, dated July 17, 2012		8-A12B		1-10899		07/18/12		3.2
3.1(f)	Articles Supplementary of Kimco Realty Corporation, dated November 30, 2012		8-A12B		1-10899		12/03/12		3.2
3.2	Amended and Restated Bylaws of Kimco Realty Corporation, dated February 25, 2009		10-K		1-10899		02/27/09		3.2
4.1	Agreement of Kimco Realty Corporation pursuant to Item 601(b)(4)(iii)(A) of Regulation S-K		S-11		333-42588		09/11/91		4.1
4.2	Form of Certificate of Designations for the Preferred Stock		S-3		333-67552		09/10/93		4(d)
4.3	Indenture dated September 1, 1993, between Kimco Realty Corporation and Bank of New York (as successor to IBJ Schroder Bank and Trust Company)		S-3		333-67552		09/10/93		4(a)
4.4	First Supplemental Indenture, dated August 4, 1994, between Kimco Realty Corporation and Bank of New York (as successor to IBJ Schroder Bank and Trust Company)		10-K		1-10899		03/28/96		4.6
4.5	Second Supplemental Indenture, dated April 7, 1995, between Kimco Realty Corporation and Bank of New York (as successor to IBJ Schroder Bank and Trust Company)		8-K		1-10899		04/07/95		4(a)
4.6	Third Supplemental Indenture, dated June 2, 2006, between Kimco Realty Corporation and The Bank of New York, as trustee		8-K		1-10899		06/05/06		4.1
4.7	Fourth Supplemental Indenture, dated April 26, 2007, between Kimco Realty Corporation and The Bank of New York, as trustee		8-K		1-10899		04/26/07		1.3
4.8	Fifth Supplemental Indenture, dated September 24, 2009, between Kimco Realty Corporation and The Bank of New York Mellon, as trustee		8-K		1-10899		09/24/09		4.1
4.9	Sixth Supplemental Indenture, dated May 23, 2013, between Kimco Realty Corporation and The Bank of New York Mellon, as trustee		8-K		1-10899		05/23/13		4.1
4.10	Seventh Supplemental Indenture, dated April 24, 2014, between Kimco Realty Corporation and The Bank of New York Mellon, as trustee		8-K		1-10899		04/24/14		4.1
10.1	Amended and Restated Stock Option Plan		10-K		1-10899		03/28/95		10.3
10.2	Second Amended and Restated 1998 Equity Participation Plan of Kimco Realty Corporation (restated February 25, 2009)		10-K		1-10899		02/27/09		10.9
10.3	Form of Indemnification Agreement		10-K		1-10899		02/27/09		99.1
10.4	Agency Agreement, dated July 17, 2013, by and among Kimco North Trust III, Kimco Realty Corporation and Scotia Capital Inc., RBC Dominion Securities Inc., CIBC World Markets Inc. and National Bank Financial Inc.		10-Q		1-10899		08/02/13		99.1
10.5	Kimco Realty Corporation Executive Severance Plan, dated March 15, 2010		8-K		1-10899		03/19/10		10.5
10.6	Restated Kimco Realty Corporation 2010 Equity Participation Plan		-		-		-		-			*		93
10.7	Form of Performance Share Award Grant Notice and Performance Share Award Agreement		8-K		1-10899		03/19/10		10.8
10.8	First Amendment to the Kimco Realty Corporation Executive Severance Plan, dated March 20, 2012		10-Q		1-10899		05/10/12		10.3

		Incorporated by Reference
Exhibit Number	Exhibit Description	Form		File No.	Date of Filing	Exhibit Number	Filed/ Furnished  Herewith
3.1(a)	Articles of Restatement of Kimco Realty Corporation, dated January 14, 2011	10-K		1-10899	02/28/11	3.1(a)
3.1(b)	Amendment to Articles of Restatement of Kimco Realty Corporation, dated May 8, 2014	10-K		1-10899	02/27/17	3.1(b)
3.1(c)	Articles Supplementary of Kimco Realty Corporation, dated November 8, 2010	10-K		1-10899	02/28/11	3.1(b)
3.1(d)	Articles Supplementary of Kimco Realty Corporation, dated March 12, 2012	8-A12B		1-10899	03/13/12	3.2
3.1(e)	Articles Supplementary of Kimco Realty Corporation, dated July 17, 2012	8-A12B		1-10899	07/18/12	3.2
3.1(f)	Articles Supplementary of Kimco Realty Corporation, dated November 30, 2012	8-A12B		1-10899	12/03/12	3.2
3.1(g)	Articles Supplementary of Kimco Realty Corporation, dated August 8, 2017	8-A12B		1-10899	08/08/17	3.3
3.1(h)	Articles Supplementary of Kimco Realty Corporation, dated December 12, 2017	8-A12B		1-10899	12/12/17	3.3
3.2	Amended and Restated Bylaws of Kimco Realty Corporation, dated February 25, 2009	10-K		1-10899	02/27/09	3.2
4.1	Agreement of Kimco Realty Corporation pursuant to Item 601(b)(4)(iii)(A) of Regulation S-K	S-11		333-42588	09/11/91	4.1
4.2	Indenture dated September 1, 1993, between Kimco Realty Corporation and Bank of New York (as successor to IBJ Schroder Bank and Trust Company)	S-3		333-67552	09/10/93	4(a)
4.3	First Supplemental Indenture, dated August 4, 1994, between Kimco Realty Corporation and Bank of New York (as successor to IBJ Schroder Bank and Trust Company)	10-K		1-10899	03/28/96	4.6
4.4	Second Supplemental Indenture, dated April 7, 1995, between Kimco Realty Corporation and Bank of New York (as successor to IBJ Schroder Bank and Trust Company)	8-K		1-10899	04/07/95	4(a)
4.5	Third Supplemental Indenture, dated June 2, 2006, between Kimco Realty Corporation and The Bank of New York, as trustee	8-K		1-10899	06/05/06	4.1
4.6	Fourth Supplemental Indenture, dated April 26, 2007, between Kimco Realty Corporation and The Bank of New York, as trustee	8-K		1-10899	04/26/07	1.3
4.7	Fifth Supplemental Indenture, dated September 24, 2009, between Kimco Realty Corporation and The Bank of New York Mellon, as trustee	8-K		1-10899	09/24/09	4.1
4.8	Sixth Supplemental Indenture, dated May 23, 2013, between Kimco Realty Corporation and The Bank of New York Mellon, as trustee	8-K		1-10899	05/23/13	4.1
4.9	Seventh Supplemental Indenture, dated April 24, 2014, between Kimco Realty Corporation and The Bank of New York Mellon, as trustee	8-K		1-10899	04/24/14	4.1
10.1	Amended and Restated Stock Option Plan	10-K		1-10899	03/28/95	10.3
10.2	Second Amended and Restated 1998 Equity Participation Plan of Kimco Realty Corporation (restated February 25, 2009)	10-K		1-10899	02/27/09	10.9
10.3	Form of Indemnification Agreement	10-K		1-10899	02/27/09	99.1
10.4	Agency Agreement, dated July 17, 2013, by and among Kimco North Trust III, Kimco Realty Corporation and Scotia Capital Inc., RBC Dominion Securities Inc., CIBC World Markets Inc. and National Bank Financial Inc.	10-Q		1-10899	08/02/13	99.1
10.5	Kimco Realty Corporation Executive Severance Plan, dated March 15, 2010	8-K		1-10899	03/19/10	10.5
10.6	Restated Kimco Realty Corporation 2010 Equity Participation Plan	10-K		1-10899	02/27/17	10.6
10.7	Amendment No. 1 to the Kimco Realty Corporation 2010 Equity Participation Plan	—		—	—	—	*

 

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		Incorporated by Reference
Exhibit Number	Exhibit Description	Form	File No.	Date of Filing	Exhibit Number	Filed/ Furnished  Herewith	Page Number
10.9	$1.75 Billion Amended and Restated Credit Agreement, dated March 17, 2014, among Kimco Realty Corporation, the subsidiaries of Kimco party thereto, the lenders party thereto, and JPMorgan Chase Bank, N.A., as administrative agent	8-K	1-10899	03/20/14	10.1
10.10	$2.25 Billion Amended and Restated Credit Agreement, dated February 1, 2017, among Kimco Realty Corporation, the subsidiaries of Kimco party thereto, the lenders party thereto, and JPMorgan Chase Bank, N.A., as administrative agent	8-K	1-10899	02/02/17	10.1
10.11	Credit Agreement, dated January 30, 2015, among Kimco Realty Corporation and each of the parties named therein	8-K	1-10899	02/05/15	10.1
10.12	Consulting Agreement, dated June 11, 2015, between Kimco Realty Corporation and David B. Henry	8-K	1-10899	06/12/15	10.1
12.1	Computation of Ratio of Earnings to Fixed Charges	—	—	—	—	*	116
12.2	Computation of Ratio of Earnings to Combined Fixed Charges and Preferred Stock Dividends	—	—	—	—	*	117
21.1	Significant Subsidiaries of the Company	—	—	—	—	*	118
23.1	Consent of PricewaterhouseCoopers LLP	—	—	—	—	*	119
31.1	Certification of the Company’s Chief Executive Officer, Conor C. Flynn, pursuant to Section 302 of the Sarbanes-Oxley Act of 2002	—	—	—	—	*	120
31.2	Certification of the Company’s Chief Financial Officer, Glenn G. Cohen, pursuant to Section 302 of the Sarbanes-Oxley Act of 2002	—	—	—	—	*	121
32.1	Certification of the Company’s Chief Executive Officer, Conor C. Flynn, and the Company’s Chief Financial Officer, Glenn G. Cohen, pursuant to Section 906 of the Sarbanes-Oxley Act of 2002	—	—	—	—	**	122
99.1	Property Chart	—	—	—	—	*	123
101.INS	XBRL Instance Document	—	—	—	—	*
101.SCH	XBRL Taxonomy Extension Schema	—	—	—	—	*
101.CAL	XBRL Taxonomy Extension Calculation Linkbase	—	—	—	—	*
101.DEF	XBRL Taxonomy Extension Definition Linkbase	—	—	—	—	*
101.LAB	XBRL Taxonomy Extension Label Linkbase	—	—	—	—	*
101.PRE	XBRL Taxonomy Extension Presentation Linkbase	—	—	—	—	*

		Incorporated by Reference
Exhibit Number	Exhibit Description	Form		File No.	Date of Filing	Exhibit Number	Filed/ Furnished  Herewith
10.8	Form of Performance Share Award Grant Notice and Performance Share Award Agreement	8-K		1-10899	03/19/10	10.8
10.9	First Amendment to the Kimco Realty Corporation Executive Severance Plan, dated March 20, 2012	10-Q		1-10899	05/10/12	10.3
10.10	$1.75 Billion Amended and Restated Credit Agreement, dated March 17, 2014, among Kimco Realty Corporation, the subsidiaries of Kimco party thereto, the lenders party thereto, and JPMorgan Chase Bank, N.A., as administrative agent	8-K		1-10899	03/20/14	10.1
10.11	$2.25 Billion Amended and Restated Credit Agreement, dated February 1, 2017, among Kimco Realty Corporation, the subsidiaries of Kimco party thereto, the lenders party thereto, and JPMorgan Chase Bank, N.A., as administrative agent	8-K		1-10899	02/02/17	10.1
10.12	Credit Agreement, dated January 30, 2015, among Kimco Realty Corporation and each of the parties named therein	8-K		1-10899	02/05/15	10.1
10.13	Consulting Agreement, dated June 11, 2015, between Kimco Realty Corporation and David B. Henry	8-K		1-10899	06/12/15	10.1
12.1	Computation of Ratio of Earnings to Fixed Charges	—		—	—	—	*
12.2	Computation of Ratio of Earnings to Combined Fixed Charges and Preferred Stock Dividends	—		—	—	—	*
21.1	Significant Subsidiaries of the Company	—		—	—	—	*
23.1	Consent of PricewaterhouseCoopers LLP	—		—	—	—	*
31.1	Certification of the Company’s Chief Executive Officer, Conor C. Flynn, pursuant to Section 302 of the Sarbanes-Oxley Act of 2002	—		—	—	—	*
31.2	Certification of the Company’s Chief Financial Officer, Glenn G. Cohen, pursuant to Section 302 of the Sarbanes-Oxley Act of 2002	—		—	—	—	*
32.1	Certification of the Company’s Chief Executive Officer, Conor C. Flynn, and the Company’s Chief Financial Officer, Glenn G. Cohen, pursuant to Section 906 of the Sarbanes-Oxley Act of 2002	—		—	—	—	*
99.1	Property Chart	—		—	—	—	*
101.INS	XBRL Instance Document	—		—	—	—	*
101.SCH	XBRL Taxonomy Extension Schema	—		—	—	—	*
101.CAL	XBRL Taxonomy Extension Calculation Linkbase	—		—	—	—	*
101.DEF	XBRL Taxonomy Extension Definition Linkbase	—		—	—	—	*
101.LAB	XBRL Taxonomy Extension Label Linkbase	—		—	—	—	*
101.PRE	XBRL Taxonomy Extension Presentation Linkbase	—		—	—	—	*

 

* Filed herewith

** Furnished herewith

 

3744

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SIGNATURES

 

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

 

	KIMCO REALTY CORPORATION
	By:	/s/ Conor C. Flynn
	Conor C. Flynn
	Chief Executive Officer

 

Dated:     February 24, 201723, 2018

 

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the datesdates indicated.

 

Signature		Title	Date
/s/ Milton Cooper		Executive Chairman of the Board of Directors	February 24, 201723, 2018
Milton Cooper
/s/ Conor C. Flynn		President - Chief Executive Officer and Director	February 24, 201723, 2018
Conor C. Flynn		and Director
/s/ Richard G. Dooley		Director	February 24, 201723, 2018
Richard G. Dooley
/s/ Joe Grills		Director	February 24, 201723, 2018
Joe Grills
/s/ Frank Lourenso		Director	February 24, 201723, 2018
Frank Lourenso
/s/ Richard Saltzman		Director	February 24, 201723, 2018
Richard Saltzman
/s/ Philip Coviello		Director	February 24, 201723, 2018
Philip Coviello
/s/ Colombe Nicholas		Director	February 24, 201723, 2018
Colombe Nicholas
/s/ Mary Hogan Preusse		Director	February 24, 201723, 2018
Mary Hogan Preusse
/s/ Glenn G. Cohen		Executive Vice President -	February 24, 201723, 2018
Glenn G. Cohen		Chief Financial Officer and
		Treasurer Treasurer
/s/ Paul Westbrook		Vice President -	February 24, 201723, 2018
Paul Westbrook		Chief Accounting Officer

 

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ANNUAL REPORT ON FORM 10-K

 

ITEM 8, ITEM 15 (a) (1) and (2)

 

INDEX TO FINANCIAL STATEMENTS

 

AND

 

FINANCIAL STATEMENT SCHEDULES

 

		Form 10-K Page
KIMCO REALTY CORPORATION AND SUBSIDIARIES
Report of Independent Registered Public Accounting Firm		4047
Consolidated Financial Statements and Financial Statement Schedules:
Consolidated Balance Sheets as of December 31, 20162017 and 20152016		4148
Consolidated Statements of Income for the years ended December 31, 2017, 2016 2015 and 20142015		4249
Consolidated Statements of Comprehensive Income for the years ended December 31, 2017, 2016 2015 and 20142015		4350
Consolidated Statements of Changes in Equity for the years ended December 31, 2017, 2016 2015 and 20142015		4451
Consolidated Statements of Cash Flows for the years ended December 31, 2017, 2016 2015 and 20142015		4552
Notes to Consolidated Financial Statements		4653
Financial Statement Schedules:
II.	Valuation and Qualifying Accounts years ended December 31, 2017, 2016 and 2015	8795
III.	Real Estate and Accumulated Depreciation as of December 31, 2017	8896
IV.	Mortgage Loans on Real Estate as of December 31, 2017	9098

 

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Reportof Independent Registered Public Accounting Firm

 

To the Board of Directors and Stockholders

of Kimco Realty Corporation:

 

In our opinion,

Opinions on the Financial Statements and Internal Control over Financial Reporting

We have audited the consolidated financial statements, including the related notes, as listed in the index appearing under Item 15(a)(1), and the financial statement schedules listed in the index appearing under Item 15(a)(2), of Kimco Realty Corporation and its subsidiaries (collectively referred to as the “consolidated financial statements”). We also have audited the Company's internal control over financial reporting as of December 31, 2017, based on criteria established in Internal Control - Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). 

In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of Kimco Realty Corporation and its subsidiaries atthe Company as of December 31, 20162017 and 2015,2016, and the results of their operations and their cash flows for each of the three years in the period ended December 31, 20162017 in conformity with accounting principles generally accepted in the United States of America. In addition, in our opinion, the financial statement schedules listed in the index appearing under Item 15(a)(2) present fairly, in all material respects, the information set forth therein when read in conjunction with the related consolidated financial statements.  Also in our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of December 31, 2016,2017 based on criteria established in Internal Control - Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). COSO.

Basis for Opinions

The Company's management is responsible for these consolidated financial statements, and financial statement schedules, for maintaining effective internal control over financial reporting, and for its assessment of the effectiveness of internal control over financial reporting, included in Management's Report on Internal Control over Financial Reporting appearing under Item 9A.  Our responsibility is to express opinions on these the Company’s consolidatedfinancial statements on the financial statement schedules, and on the Company's internal control over financial reporting based on our integrated audits.  We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) ("PCAOB") and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States).PCAOB. Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud, and whether effective internal control over financial reporting was maintained in all material respects. 

Our audits of the consolidated financial statements included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks.  Such procedures included examining, on a test basis, evidence supportingregarding the amounts and disclosures in the consolidated financial statements, assessingstatements.  Our audits also included evaluating the accounting principles used and significant estimates made by management, andas well as evaluating the overall presentation of the consolidated financial statement presentation.statements.  Our audit of internal control over financial reporting included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk.  Our audits also included performing such other procedures as we considered necessary in the circumstances. We believe that our audits provide a reasonable basis for our opinions.

Definition and Limitations of Internal Control over Financial Reporting

 

A company’scompany’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles.  A company’s internal control over financial reporting includes those policies and procedures that (i) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (ii) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (iii) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.

 

Because of its inherent limitations, internal control over financialfinancial reporting may not prevent or detect misstatements.  Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

 

/s/PricewaterhouseCoopers LLP

New York, New York

February 24, 201723, 2018

We have served as the Company’s auditor since at least 1992.  We have not determined the specific year we began serving as auditor of the Company.

 

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KIMCOREALTY CORPORATION AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

(in (in thousands, except share information)

 

		December 31, 2016				December 31, 2015
										December 31, 2017				December 31, 2016
Assets:
Real Estate									Real Estate
Rental property									Rental property
Land		$	2,845,186			$	2,728,257			$	3,019,284			$	2,845,186
Building and improvements			8,827,861				8,661,362				9,231,644				8,827,861
			11,673,047				11,389,619				12,250,928				11,673,047
Less: accumulated depreciation and amortization			(2,278,292	)			(2,115,320	)			(2,433,053	)			(2,278,292	)
			9,394,755				9,274,299				9,817,875				9,394,755
Real estate under development			335,028				179,190				402,518				335,028
Real estate, net			9,729,783				9,453,489				10,220,393				9,729,783
Investments and advances in real estate joint ventures			504,209				742,559
Investments in and advances in real estate joint ventures											483,861				504,209
Other real estate investments			209,146				215,836				217,584				209,146
Mortgages and other financing receivables			23,197				23,824				21,838				23,197
Cash and cash equivalents			142,486				189,534				238,513				142,486
Marketable securities			8,101				7,565				13,265				8,101
Accounts and notes receivable, net			181,823				175,252				189,757				181,823
Deferred charges and prepaid expenses			147,694				152,349				155,472				147,694
Other assets			284,161				383,763				223,043				284,161
Total assets		$	11,230,600			$	11,344,171
Total assets (1)										$	11,763,726			$	11,230,600
Liabilities:
Notes payable		$	3,927,251			$	3,761,328
Mortgages payable			1,139,117				1,614,982
Notes payable, net										$	4,596,140			$	3,927,251
Mortgages payable, net											882,787				1,139,117
Accounts payable and accrued expenses			145,751				150,059				185,702				145,751
Dividends payable			124,517				115,182				128,892				124,517
Other liabilities			404,137				433,960				431,915				404,137
Total liabilities			5,740,773				6,075,511
Total liabilities (2)											6,225,436				5,740,773
Redeemable noncontrolling interests			86,953				86,709				16,143				86,953
Commitments and Contingencies									Commitments and Contingencies
Stockholders' equity:									Stockholders' equity:
Preferred stock, $1.00 par value, authorized 6,029,100 shares,32,000 shares issued and outstanding (in series)
Aggregate liquidation preference $800,000			32				32
Common stock, $.01 par value, authorized 750,000,000 shares issued and outstanding425,034,113 and 413,430,756 shares, respectively			4,250				4,134
Preferred stock, $1.00 par value, authorized 5,996,240 and 6,029,100 shares, respectively, 41,200 and 32,000 shares issued and outstanding (in series), respectively; Aggregate liquidation preference $1,030,000 and $800,000, respectively											41				32
Common stock, $.01 par value, authorized 750,000,000 shares issued and outstanding 425,646,380 and 425,034,113 shares, respectively											4,256				4,250
Paid-in capital			5,922,958				5,608,881				6,152,764				5,922,958
Cumulative distributions in excess of net income			(676,867	)			(572,335	)			(761,337	)			(676,867	)
Accumulated other comprehensive income			5,766				5,588
Accumulated other comprehensive (loss)/income											(1,480	)			5,766
Total stockholders' equity			5,256,139				5,046,300				5,394,244				5,256,139
Noncontrolling interests			146,735				135,651				127,903				146,735
Total equity			5,402,874				5,181,951				5,522,147				5,402,874
Total liabilities and equity		$	11,230,600			$	11,344,171			$	11,763,726			$	11,230,600

(1)	Includes restricted assets of consolidated variable interest entities (“VIEs”) at December 31, 2017 and December 31, 2016 of $644,990 and $333,705, respectively.  See Footnote 9 of the Notes to Consolidated Financial Statements.
(2)	Includes non-recourse liabilities of consolidated VIEs at December 31, 2017 and December 31, 2016 of $417,688 and $176,216, respectively.  See Footnote 9 of the Notes to Consolidated Financial Statements.

 

The accompanying notes are an integral part of these consolidated financial statements.

 

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KIMCOREALTY CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF INCOME

(in thousands, except per share information) data)

		Year Ended December 31,
		2016				2015				2014				Year Ended December 31,
														2017				2016				2015
Revenues
Revenues from rental properties		$	1,152,401			$	1,144,474			$	958,888			$	1,183,785			$	1,152,401			$	1,144,474
Management and other fee income			18,391				22,295				35,009				17,049				18,391				22,295
Total revenues			1,170,792				1,166,769				993,897				1,200,834				1,170,792				1,166,769
Operating expenses													Operating expenses
Rent			10,993				12,347				14,250				11,145				10,993				12,347
Real estate taxes			146,615				147,150				124,670				157,196				146,615				147,150
Operating and maintenance			140,910				144,980				119,697				142,787				140,910				144,980
General and administrative expenses			117,302				122,735				122,201
General and administrative															118,455				117,302				122,735
Provision for doubtful accounts			5,563				6,075				4,882				5,630				5,563				6,075
Impairment charges			93,266				45,383				39,808				67,331				93,266				45,383
Depreciation and amortization			355,320				344,527				258,074				360,811				355,320				344,527
Total operating expenses			869,969				823,197				683,582				863,355				869,969				823,197
Operating income			300,823				343,572				310,315				337,479				300,823				343,572
Other income/(expense)													Other income/(expense)
Mortgage financing income			1,634				2,940				3,129
Interest, dividends and other investment income			1,478				39,061				966				2,809				1,478				39,061
Other income/(expense), net			2,313				2,234				(8,544	)
Other (expense)/income, net															(250	)			3,947				5,174
Interest expense			(192,549	)			(218,891	)			(203,759	)			(191,956	)			(192,549	)			(218,891	)
Early extinguishment of debt charges			(45,674	)			-				-				(1,753	)			(45,674	)			-
Income from continuing operations before income taxes, equity in income ofjoint ventures, gain on change in control of interests andequity in income from other real estate investments			68,025				168,916				102,107
Income from continuing operations before income taxes, net, equity in income of joint ventures, net, gain on change in control of interests and equity in income from other real estate investments, net															146,329				68,025				168,916
Provision for income taxes, net			(72,545	)			(60,230	)			(22,438	)
Benefit/(provision) for income taxes, net															880				(72,545	)			(60,230	)
Equity in income of joint ventures, net			218,714				480,395				159,560				60,763				218,714				480,395
Gain on change in control of interests, net			57,386				149,234				107,235
Gain on change in control of interests															71,160				57,386				149,234
Equity in income of other real estate investments, net			27,773				36,090				38,042				67,001				27,773				36,090
Income from continuing operations			299,353				774,405				384,506				346,133				299,353				774,405
Discontinued operations													Discontinued operations
(Loss)/income from discontinued operating properties, net of tax			-				(15	)			36,780
Loss from discontinued operating properties, net of tax															-				-				(15	)
Impairment/loss on operating properties, net of tax			-				(60	)			(176,315	)			-				-				(60	)
Gain on disposition of operating properties, net of tax			-				-				190,520
(Loss)/income from discontinued operations			-				(75	)			50,985
Loss from discontinued operations															-				-				(75	)
Gain on sale of operating properties, net, net of tax			86,785				125,813				389				93,538				86,785				125,813
Net income			386,138				900,143				435,880				439,671				386,138				900,143
Net income attributable to noncontrolling interests			(7,288	)			(6,028	)			(11,879	)			(13,596	)			(7,288	)			(6,028	)
Net income attributable to the Company			378,850				894,115				424,001				426,075				378,850				894,115
Preferred stock redemption charges			-				(5,816	)			-
Preferred stock redemption charge															(7,014	)			-				(5,816	)
Preferred dividends			(46,220	)			(57,084	)			(58,294	)			(46,600	)			(46,220	)			(57,084	)
Net income available to the Company's common shareholders		$	332,630			$	831,215			$	365,707			$	372,461			$	332,630			$	831,215
Per common share:													Per common share:
Income from continuing operations:													Income from continuing operations:
-Basic		$	0.79			$	2.01			$	0.77			$	0.87			$	0.79			$	2.01
-Diluted		$	0.79			$	2.00			$	0.77			$	0.87			$	0.79			$	2.00
Net income available to the Company:													Net income available to the Company:
-Basic		$	0.79			$	2.01			$	0.89			$	0.87			$	0.79			$	2.01
-Diluted		$	0.79			$	2.00			$	0.89			$	0.87			$	0.79			$	2.00
Weighted average shares:													Weighted average shares:
-Basic			418,402				411,319				409,088				423,614				418,402				411,319
-Diluted			419,709				412,851				411,038				424,019				419,709				412,851
Amounts available to the Company's common shareholders:													Amounts available to the Company's common shareholders:
Income from continuing operations		$	332,630			$	831,290			$	316,839			$	372,461			$	332,630			$	831,290
(Loss)/income from discontinued operations			-				(75	)			48,868
Loss from discontinued operations															-				-				(75	)
Net income		$	332,630			$	831,215			$	365,707			$	372,461			$	332,630			$	831,215

 

The accompanying notes are an integral part of these consolidated financial statements.

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KIMCOREALTY CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(in thousands)

		Year Ended December 31,
		2017				2016				2015
Net income		$	439,671			$	386,138			$	900,143
Other comprehensive income:
Change in unrealized gains/losses related to available-for-sale securities			(1,542	)			8				(45,799	)
Change in unrealized losses on interest rate swaps			631				451				(22	)
Change in foreign currency translation adjustments			(6,335	)			(281	)			6,287
Other comprehensive (loss)/income			(7,246	)			178				(39,534	)
Comprehensive income			432,425				386,316				860,609
Comprehensive income attributable to noncontrolling interests			(13,596	)			(7,288	)			(6,028	)
Comprehensive income attributable to the Company		$	418,829			$	379,028			$	854,581

The accompanying notes are an integral part of these consolidated financial statements.

50

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KIMCO REALTY CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY

For the Years Ended December 31, 2017, 2016 and 2015

(in thousands) 

		Year Ended December 31,
		2016				2015				2014
Net income		$	386,138			$	900,143			$	435,880
Other comprehensive income:
Change in unrealized gain on marketable securities			8				(45,799	)			20,202
Change in unrealized loss on interest rate swaps			451				(22	)			(1,404	)
Change in foreign currency translation adjustment			(281	)			6,287				96,895
Other comprehensive income/(loss)			178				(39,534	)			115,693
Comprehensive income			386,316				860,609				551,573
Comprehensive income attributable to noncontrolling interests			(7,288	)			(6,028	)			(17,468	)
Comprehensive income attributable to the Company		$	379,028			$	854,581			$	534,105

		Cumulative				Accumulated
		Distributions				Other																								Total
		in Excess of				Comprehensive				Preferred Stock								Common Stock								Paid-in				Stockholders'				Noncontrolling				Total
		Net Income				Income				Issued				Amount				Issued				Amount				Capital				Equity				Interests				Equity
Balance, January 1, 2015		$	(1,006,578	)		$	45,122				102			$	102				411,820			$	4,118			$	5,732,021			$	4,774,785			$	126,980			$	4,901,765
Contributions/deemed contributions from noncontrolling interests			-				-				-				-				-				-				-				-				66,163				66,163
Comprehensive income:
Net income			894,115				-				-				-				-				-				-				894,115				6,028				900,143
Other comprehensive income, net of tax:
Change in unrealized gains related to available-for-sale securities			-				(45,799	)			-				-				-				-				-				(45,799	)			-				(45,799	)
Change in unrealized losses on interest rate swaps			-				(22	)			-				-				-				-				-				(22	)			-				(22	)
Change in foreign currency translation adjustments			-				6,287				-				-				-				-				-				6,287				-				6,287
Redeemable noncontrolling interests income			-				-				-				-				-				-				-				-				(7,061	)			(7,061	)
Dividends ($0.975 per common share; $1.485 per
Class H Depositary Share, $1.5000 per
Class I Depositary Share, $1.3750 per
Class J Depositary Share, and $1.40625 per
Class K Depositary Share, respectively)			(459,872	)			-				-				-				-				-				-				(459,872	)			-				(459,872	)
Distributions to noncontrolling interests			-				-				-				-				-				-				-				-				(8,539	)			(8,539	)
Issuance of common stock			-				-				-				-				824				8				485				493				-				493
Surrender of restricted stock			-				-				-				-				(232	)			(2	)			(5,680	)			(5,682	)			-				(5,682	)
Exercise of common stock options			-				-				-				-				1,019				10				18,698				18,708				-				18,708
Sale of interests in investments, net of tax of $16.0 million			-				-				-				-				-				-				23,993				23,993				-				23,993
Acquisition of noncontrolling interests			-				-				-				-				-				-				262				262				(47,920	)			(47,658	)
Amortization of equity awards			-				-				-				-				-				-				14,032				14,032				-				14,032
Redemption of preferred stock			-				-				(70	)			(70	)			-				-				(174,930	)			(175,000	)			-				(175,000	)
Balance, December 31, 2015			(572,335	)			5,588				32				32				413,431				4,134				5,608,881				5,046,300				135,651				5,181,951
Contributions/deemed contributions from noncontrolling interests			-				-				-				-				-				-				-				-				16,667				16,667
Comprehensive income:
Net income			378,850				-				-				-				-				-				-				378,850				7,288				386,138
Other comprehensive income, net of tax:
Change in unrealized gains related to available-for-sale securities			-				8				-				-				-				-				-				8				-				8
Change in unrealized losses on interest rate swaps			-				451				-				-				-				-				-				451				-				451
Change in foreign currency translation adjustments			-				(281	)			-				-				-				-				-				(281	)			-				(281	)
Redeemable noncontrolling interests income			-				-				-				-				-				-				-				-				(4,349	)			(4,349	)
Dividends ($1.035 per common share; $1.5000 per
Class I Depositary Share, $1.3750 per
Class J Depositary Share, and $1.40625 per
Class K Depositary Share, respectively)			(483,382	)			-				-				-				-				-				-				(483,382	)			-				(483,382	)
Distributions to noncontrolling interests			-				-				-				-				-				-				-				-				(8,522	)			(8,522	)
Issuance of common stock			-				-				-				-				10,711				107				286,314				286,421				-				286,421
Surrender of restricted stock			-				-				-				-				(276	)			(3	)			(7,005	)			(7,008	)			-				(7,008	)
Exercise of common stock options			-				-				-				-				1,168				12				21,048				21,060				-				21,060
Amortization of equity awards			-				-				-				-				-				-				13,720				13,720				-				13,720
Balance, December 31, 2016			(676,867	)			5,766				32				32				425,034				4,250				5,922,958				5,256,139				146,735				5,402,874
Contributions/deemed contributions from noncontrolling interests			-				-				-				-				-				-				-				-				48,877				48,877
Comprehensive income:
Net income			426,075				-				-				-				-		��		-				-				426,075				13,596				439,671
Other comprehensive income, net of tax:
Change in unrealized gains/losses related to available-for-sale securities			-				(1,542	)			-				-				-				-				-				(1,542	)			-				(1,542	)
Change in unrealized losses on interest rate swaps			-				631				-				-				-				-				-				631				-				631
Change in foreign currency translation adjustments			-				(6,335	)			-				-				-				-				-				(6,335	)			-				(6,335	)
Redeemable noncontrolling interests income			-				-				-				-				-				-				-				-				(1,297	)			(1,297	)
Dividends ($1.09 per common share; $1.5000 per
Class I Depositary Share, $0.9625 per
Class I Depositary Share Redeemed, $1.3750 per
Class J Depositary Share, $1.40625 per
Class K Depositary Share, $0.48047 per
Class L Depositary Share, and $0.0401 per
Class M Depositary Share, respectively)			(510,545	)			-				-				-				-				-				-				(510,545	)			-				(510,545	)
Distributions to noncontrolling interests			-				-				-				-				-				-				-				-				(13,995	)			(13,995	)
Issuance of common stock			-				-				-				-				776				8				(8	)			-				-				-
Issuance of preferred stock			-				-				18				18				-				-				439,401				439,419				-				439,419
Surrender of restricted stock			-				-				-				-				(248	)			(2	)			(5,697	)			(5,699	)			-				(5,699	)
Exercise of common stock options			-				-				-				-				84				-				1,526				1,526				-				1,526
Amortization of equity awards			-				-				-				-				-				-				18,983				18,983				-				18,983
Redemption of preferred stock			-				-				(9	)			(9	)			-				-				(224,991	)			(225,000	)			-				(225,000	)
Redemption/conversion of noncontrolling interests			-				-				-				-				-				-				592				592				(66,013	)			(65,421	)
Balance, December 31, 2017		$	(761,337	)		$	(1,480	)			41			$	41				425,646			$	4,256			$	6,152,764			$	5,394,244			$	127,903			$	5,522,147

 

The accompanying notes are an integral part of these consolidated financial statements.

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Table of Contents

 

KIMCO REALTY CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY CASH FLOWS

For the Years Ended December 31, 2016, 2015 and 2014

(in thousands)

 

		Cumulative				Accumulated
		Distributions in Excess				Other Comprehensive				Preferred Stock								Common Stock												Total
		of Net Income				Income				Issued				Amount				Issued				Amount				Paid-in Capital				Stockholders' Equity				Noncontrolling Interests				Total Equity
Balance, January 1, 2014		$	(996,058	)		$	(64,982	)			102			$	102				409,731			$	4,097			$	5,689,258			$	4,632,417			$	137,109			$	4,769,526
Contributions from noncontrolling interests			-				-				-				-				-				-				-				-				6,259				6,259
Comprehensive income:
Net income			424,001				-				-				-				-				-				-				424,001				11,879				435,880
Other comprehensive income, net of tax:
Change in unrealized gain on marketable securities			-				20,202				-				-				-				-				-				20,202				-				20,202
Change in unrealized loss on interest rate swaps			-				(1,404	)			-				-				-				-				-				(1,404	)			-				(1,404	)
Change in foreign currency translation adjustment			-				91,306				-				-				-				-				-				91,306				5,589				96,895
Redeemable noncontrolling interests income			-				-				-				-				-				-				-				-				(6,335	)			(6,335	)
Dividends ($0.915 per common share; $1.725 per
Class H Depositary Share, $1.5000 per
Class I Depositary Share, $1.3750 per
Class J Depositary Share, and $1.40625 per
Class K Depositary Share, respectively)			(434,521	)			-				-				-				-				-				-				(434,521	)			-				(434,521	)
Distributions to noncontrolling interests			-				-				-				-				-				-				-				-				(26,755	)			(26,755	)
Issuance of common stock			-				-				-				-				805				8				14,039				14,047				-				14,047
Surrender of restricted stock			-				-				-				-				(190	)			(2	)			(4,049	)			(4,051	)			-				(4,051	)
Exercise of common stock options			-				-				-				-				1,474				15				23,859				23,874				-				23,874
Acquisition of noncontrolling interests			-				-				-				-				-				-				(294	)			(294	)			(766	)			(1,060	)
Amortization of equity awards			-				-				-				-				-				-				9,208				9,208				-				9,208
Balance, December 31, 2014			(1,006,578	)			45,122				102				102				411,820				4,118				5,732,021				4,774,785				126,980				4,901,765
Contributions from noncontrolling interests			-				-				-				-				-				-				-				-				66,163				66,163
Comprehensive income:
Net income			894,115				-				-				-				-				-				-				894,115				6,028				900,143
Other comprehensive income, net of tax:
Change in unrealized gain on marketable securities			-				(45,799	)			-				-				-				-				-				(45,799	)			-				(45,799	)
Change in unrealized loss on interest rate swaps			-				(22	)			-				-				-				-				-				(22	)			-				(22	)
Change in foreign currency translation adjustment			-				6,287				-				-				-				-				-				6,287				-				6,287
Redeemable noncontrolling interests income			-				-				-				-				-				-				-				-				(7,061	)			(7,061	)
Dividends ($0.975 per common share; $1.485 per
Class H Depositary Share, $1.5000 per
Class I Depositary Share, $1.3750 per
Class J Depositary Share, and $1.40625 per
Class K Depositary Share, respectively)			(459,872	)			-				-				-				-				-				-				(459,872	)			-				(459,872	)
Distributions to noncontrolling interests			-				-				-				-				-				-				-				-				(8,539	)			(8,539	)
Issuance of common stock			-				-				-				-				824				8				485				493				-				493
Surrender of restricted stock			-				-				-				-				(232	)			(2	)			(5,680	)			(5,682	)			-				(5,682	)
Exercise of common stock options			-				-				-				-				1,019				10				18,698				18,708				-				18,708
Sale of interests in investments, net of tax of $16.0 million			-				-				-				-				-				-				23,993				23,993				-				23,993
Acquisition of noncontrolling interests			-				-				-				-				-				-				262				262				(47,920	)			(47,658	)
Amortization of equity awards			-				-				-				-				-				-				14,032				14,032				-				14,032
Redemption of preferred stock			-				-				(70	)			(70	)			-				-				(174,930	)			(175,000	)			-				(175,000	)
Balance, December 31, 2015			(572,335	)			5,588				32				32				413,431				4,134				5,608,881				5,046,300				135,651				5,181,951
Contributions from noncontrolling interests			-				-				-				-				-				-				-				-				16,667				16,667
Comprehensive income:
Net income			378,850				-				-				-				-				-				-				378,850				7,288				386,138
Other comprehensive income, net of tax:
Change in unrealized gain on marketable securities			-				8				-				-				-				-				-				8				-				8
Change in unrealized loss on interest rate swaps			-				451				-				-				-				-				-				451				-				451
Change in foreign currency translation adjustment			-				(281	)			-				-				-				-				-				(281	)			-				(281	)
Redeemable noncontrolling interests income			-				-				-				-				-				-				-				-				(4,349	)			(4,349	)
Dividends ($1.035 per common share; $1.5000 per
Class I Depositary Share, $1.3750 per
Class J Depositary Share, and $1.40625 per
Class K Depositary Share, respectively)			(483,382	)			-				-				-				-				-				-				(483,382	)			-				(483,382	)
Distributions to noncontrolling interests			-				-				-				-				-				-				-				-				(8,522	)			(8,522	)
Issuance of common stock			-				-				-				-				10,711				107				286,314				286,421				-				286,421
Surrender of restricted stock			-				-				-				-				(276	)			(3	)			(7,005	)			(7,008	)			-				(7,008	)
Exercise of common stock options			-				-				-				-				1,168				12				21,048				21,060				-				21,060
Amortization of equity awards			-				-				-				-				-				-				13,720				13,720				-				13,720
Balance, December 31, 2016		$	(676,867	)		$	5,766				32			$	32				425,034			$	4,250			$	5,922,958			$	5,256,139			$	146,735			$	5,402,874

		Year Ended December 31,
		2017				2016				2015
Cash flow from operating activities:
Net income		$	439,671			$	386,138			$	900,143
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization			360,811				355,320				344,527
Impairment charges			67,331				93,266				45,464
Deferred taxes			807				55,068				4,498
Early extinguishment of debt charges			1,753				45,674				-
Equity award expense			21,563				19,071				18,465
Gain on sale of operating properties, net, net of tax			(93,538	)			(92,823	)			(132,907	)
Gain on sale of marketable securities			-				-				(39,852	)
Gain on change in control of interests			(71,160	)			(57,386	)			(149,234	)
Equity in income of joint ventures, net			(60,763	)			(218,714	)			(480,395	)
Equity in income from other real estate investments, net			(67,001	)			(27,773	)			(36,090	)
Distributions from joint ventures and other real estate investments			58,189				90,589				126,263
Change in accounts and notes receivable			(7,934	)			(6,571	)			(2,867	)
Change in accounts payable and accrued expenses			4,417				(7,886	)			164
Change in Canadian withholding tax receivable			12,996				23,571				(37,040	)
Change in other operating assets and liabilities			(52,961	)			(65,448	)			(67,438	)
Net cash flow provided by operating activities			614,181				592,096				493,701
Cash flow from investing activities:
Acquisition of operating real estate and other related net assets			(153,854	)			(203,190	)			(661,423	)
Improvements to operating real estate			(206,800	)			(143,489	)			(166,670	)
Acquisition of real estate under development			(10,010	)			(51,588	)			(16,355	)
Improvements to real estate under development			(160,257	)			(72,759	)			(16,861	)
Investment in marketable securities			(9,822	)			(2,466	)			(257	)
Proceeds from sale/repayments of marketable securities			3,146				1,937				76,170
Investments in and advances to real estate joint ventures			(35,291	)			(86,453	)			(91,609	)
Reimbursements of investments and advances to real estate joint ventures			55,839				71,656				94,053
Distributions from liquidation of real estate joint ventures			-				138,475				373,833
Return of investment from liquidation of real estate joint ventures			-				191,902				88,672
Investment in other real estate investments			(666	)			(233	)			(641	)
Reimbursements of investments and advances to other real estate investments			40,709				11,019				40,556
Collection of mortgage loans receivable			1,405				921				55,145
Investment in other investments			-				-				(190,278	)
Reimbursements of other investments			-				500				-
Proceeds from sale of operating properties			181,321				304,600				437,030
Proceeds from sale of development properties			-				4,551				-
Net cash flow (used for)/provided by investing activities			(294,280	)			165,383				21,365
Cash flow from financing activities:
Principal payments on debt, excluding normal amortization of rental property debt			(687,117	)			(700,853	)			(555,627	)
Principal payments on rental property debt			(15,186	)			(19,039	)			(28,632	)
Proceeds from mortgage loan financings			206,000				-				-
(Repayments)/proceeds under the unsecured revolving credit facility, net			(17,143	)			26,445				(100,000	)
Proceeds from issuance of unsecured term loan/notes			1,250,000				1,400,000				1,500,030
Repayments under unsecured term loan/notes			(550,000	)			(1,261,850	)			(750,000	)
Financing origination costs			(23,305	)			(25,679	)			(19,017	)
Payment of early extinguishment of debt charges			(2,631	)			(45,674	)			-
Change in tenants' security deposits			911				1,367				2,116
Contributions from noncontrolling interests			1,422				-				106,154
Conversion/distribution of noncontrolling interests			(96,599	)			(12,594	)			(55,753	)
Dividends paid			(506,172	)			(474,045	)			(455,833	)
Proceeds from issuance of stock, net			440,946				307,395				18,708
Redemption of preferred stock			(225,000	)			-				(175,000	)
Net cash flow used for financing activities			(223,874	)			(804,527	)			(512,854	)
Net change in cash and cash equivalents			96,027				(47,048	)			2,212
Cash and cash equivalents, beginning of year			142,486				189,534				187,322
Cash and cash equivalents, end of year		$	238,513			$	142,486			$	189,534
Interest paid during the year (net of capitalized interest of $14,480, $9,247 and $5,618, respectively)		$	192,155			$	252,482			$	232,950
Income taxes (received)/paid during the year (net of refunds received of $16,118, $113,934 and $0, respectively)		$	(14,456	)		$	6,090			$	100,366

 

The accompanying notes are an integral part of these consolidated financial statements.

4452

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Table of Contents

 

KIMCOREALTY CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

(in thousands)

		Year Ended December 31,
		2016				2015				2014
Cash flow from operating activities:
Net income		$	386,138			$	900,143			$	435,880
Adjustments to reconcile net income to net cash providedby operating activities:
Depreciation and amortization			355,320				344,527				273,093
Impairment charges			93,266				45,464				217,858
Deferred taxes			55,068				4,498				15,128
Early extinguishment of debt charges			45,674				-				-
Equity award expense			19,071				18,465				17,879
Gain on sale of operating properties			(92,823	)			(132,907	)			(203,889	)
Gain on sale of marketable securities			-				(39,852	)			-
Gain on change in control of interests, net			(57,386	)			(149,234	)			(107,235	)
Equity in income of joint ventures, net			(218,714	)			(480,395	)			(159,560	)
Equity in income from other real estate investments, net			(27,773	)			(36,090	)			(38,042	)
Distributions from joint ventures and other real estate investments			90,589				126,263				255,532
Change in accounts and notes receivable			(6,571	)			(2,867	)			(8,060	)
Change in accounts payable and accrued expenses			(7,886	)			164				(1,095	)
Change in Canadian withholding tax receivable			23,571				(37,040	)			-
Change in other operating assets and liabilities			(65,448	)			(67,438	)			(68,146	)
Net cash flow provided by operating activities			592,096				493,701				629,343
Cash flow from investing activities:
Acquisition of operating real estate and other related net assets			(203,190	)			(661,423	)			(384,828	)
Improvements to operating real estate			(143,489	)			(166,670	)			(131,795	)
Acquisition of real estate under development			(51,588	)			(16,355	)			(65,724	)
Improvements to real estate under development			(72,759	)			(16,861	)			(418	)
Investment in marketable securities			(2,466	)			(257	)			(11,445	)
Proceeds from sale/repayments of marketable securities			1,937				76,170				3,780
Investments and advances to real estate joint ventures			(86,453	)			(91,609	)			(93,845	)
Reimbursements of investments and advances to real estate joint ventures			71,656				94,053				222,590
Distributions from liquidation of real estate joint ventures			138,475				373,833				-
Return of investment from liquidation of real estate joint ventures			191,902				88,672				-
Investment in other real estate investments			(233	)			(641	)			(4,338	)
Reimbursements of investments and advances to other real estate investments			11,019				40,556				16,312
Investment in mortgage loans receivable			-				-				(50,000	)
Collection of mortgage loans receivable			921				55,145				8,302
Investment in other investments			-				(190,278	)			-
Reimbursements of other investments			500				-				-
Proceeds from sale of operating properties			304,600				437,030				612,748
Proceeds from sale of development properties			4,551				-				5,366
Net cash flow provided by investing activities			165,383				21,365				126,705
Cash flow from financing activities:
Principal payments on debt, excluding normal amortization			(700,853	)			(555,627	)			(327,963	)
Principal payments on rental property debt			(19,039	)			(28,632	)			(22,841	)
Proceeds from mortgage loan financings			-				-				15,700
Proceeds/(repayments) under the unsecured revolving credit facility, net			26,445				(100,000	)			(94,354	)
Proceeds from issuance of unsecured term loan/notes			1,400,000				1,500,030				500,000
Repayments under unsecured term loan/notes			(1,261,850	)			(750,000	)			(370,842	)
Financing origination costs			(25,679	)			(19,017	)			(11,911	)
Payment of early extinguishment of debt charges			(45,674	)			-				-
Change in tenants' security deposits			1,367				2,116				-
Contributions from noncontrolling interests			-				106,154				1,917
Conversion/distribution of noncontrolling interests			(12,594	)			(55,753	)			(3,201	)
Dividends paid			(474,045	)			(455,833	)			(427,873	)
Proceeds from issuance of stock			307,395				18,708				23,874
Redemption of preferred stock			-				(175,000	)			-
Net cash flow used for financing activities			(804,527	)			(512,854	)			(717,494	)
Change in cash and cash equivalents			(47,048	)			2,212				38,554
Cash and cash equivalents, beginning of year			189,534				187,322				148,768
Cash and cash equivalents, end of year		$	142,486			$	189,534			$	187,322
Interest paid during the year including payment of early extinguishmentof debt charges of $45,674, $0 and $0, respectively (net of capitalized interestof $9,247, $5,618 and $2,383, respectively)		$	252,482			$	232,950			$	207,632
Income taxes paid during the year (net of refunds receivedof $113,934, $0 and $0, respectively)		$	6,090			$	100,366			$	23,292

The accompanying notes are an integral part of these consolidated financial statements.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

 

Amounts relating to the number of buildings, square footage, tenant and occupancy data, joint venture debt average interest rates and terms and estimated project costs are unaudited.

 

1.	Summary of Significant Accounting Policies:Policies:

 

BusinessBusiness and Organization

 

Kimco Realty Corporation and its subsidiaries (the "Company" or "Kimco"), affiliatesoperate as a Real Estate Investment Trust (“REIT”) and related real estate joint ventures are engaged principally in the ownership, management, development and operation of open-air shopping centers, which are anchored generally by grocery stores, discount department stores, grocery stores or drugstores. Additionally, the Company provides complementary services that capitalize on the Company’s established retail real estate expertise. The Company evaluates performance on a property specific or transactional basis and does not distinguish its principal business or group its operations on a geographical basis for purposes of measuring performance. Accordingly, the Company believes it has a single reportable segment for disclosure purposes in accordance with accounting principles generally accepted in the United States of America ("GAAP").

 

The Company has elected statusto be taxed as a Real Estate Investment Trust (“REIT”)REIT for federal income tax purposes beginning in its taxable year January 1, 1992 and operates in a manner that enables the Company to maintain its status as a REIT. Additionally, in connection with the Tax Relief Extension Act of 1999 (the "RMA"), which became effective January 1, 2001, the Company is permitted to participate in activities which it was precluded from previously in order to maintain its qualification as a REIT, so long as these activities are conducted in entities which elect to be treated as taxable subsidiaries under the Internal Revenue Code, as amended (the "Code"), subject to certain limitations. As such, the Company, through its wholly-owned taxable REIT subsidiaries (“TRS”), has been engaged in various retail real estate related opportunities including retail real estate management and disposition services which primarily focuses on leasing and disposition strategies of retail real estate controlled by both healthy and distressed and/or bankrupt retailers.. The Company may consider other investments through its TRS should suitable opportunities arise.is organized and operates in a manner that enables it to qualify as a REIT under the Code.

 

Effective August 1, 2016, the Company merged Kimco Realty Services Inc. ("KRS"), a TRS, into a wholly-owned Limited Liability Company (“LLC”)Basis of the Company (the “Merger”) and no longer operates KRS as a TRS. The Company analyzed the individual assets of KRS and determined that substantially all of KRS’s assets constitute real estate assets and investments that can be directly owned by the Company without adversely affecting the Company’s status as a REIT.  Any non-REIT qualifying assets or activities were transferred to a newly formed TRS (see Footnote 22 of the Notes to Consolidated Financial Statements).

Principles of Consolidation and EstimatesPresentation

 

The accompanying Consolidated Financial Statements include the accounts of the Company.Company. The Company’s subsidiaries include subsidiaries which are wholly-owned and all entities inor which the Company has a controlling interest, including where the Company has been determined to be a primary beneficiary of a variable interest entity (“VIE”) in accordance with the Consolidation guidance of the Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”). All inter-company balances and transactions have been eliminated in consolidation.

Use of Estimates

 

GAAP requires the Company's management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities and the reported amounts of revenues and expenses during a reporting period. The most significant assumptions and estimates relate to the valuation of real estate and related intangible assets and liabilities, equity method investments, other investments, including the assessment of impairments, as well as, depreciable lives, revenue recognition, the collectability of trade accounts receivable, realizability of deferred tax assets and the assessment of uncertain tax positions. Application of these assumptions requires the exercise of judgment as to future uncertainties, and, as a result, actual results could differ from these estimates.

 

Subsequent Events

 

The Company has evaluated subsequent events and transactions for potential recognition or disclosure in its consolidated financial statements (see Footnote 13Footnotes 8 and 16 of the Notes to Consolidated Financial Statements).

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Real Estate

 

Real estate assets are stated at cost, less accumulated depreciation and amortization. Upon acquisition of real estate operating properties, the Company estimates the fair value of acquired tangible assets (consisting of land, building, building improvements and tenant improvements) and identified intangible assets and liabilities (consisting of above-marketabove-market and below-market leases, in-place leases and tenant relationships, where applicable), assumed debt and redeemable units issued at the date of acquisition, based on evaluation of information and estimates available at that date. Fair value is determined based on an exit pricea market approach, which contemplates the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. If, up to one year fromEffective January 1, 2017, the acquisition date for an acquisition qualifying as a business combination, information regarding fair value of the assets acquired and liabilities assumed is received and estimates are refined, appropriate adjustments are recognized in the reporting period in which the adjustment is identified. The Company expenses transaction costs associated with business combinations in the period incurred. The Company has elected to early adopt ASU adopted Accounting Standard Update (“ASU”) 2017-01, Business Combinations (Topic 805): Clarifying the Definition of a Business, at the beginning of its fiscal year ended December 31, 2017, including its interim periods within the year, and will appropriately applyapplied the guidance to its prospective asset acquisitions of operating properties, which includesincluding the capitalization of acquisition costs.costs, which was previously expensed prior to the adoption of this standard.

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In allocating the purchase price to identified intangible assets and liabilities of an acquired property, the value of above-market and below-market leases is estimated based on the present value of the difference between the contractual amounts, including fixed rate below-market lease renewal options, to be paid pursuant to the leases and management’s estimate of the market lease rates and other lease provisions (i.e., expense recapture, base rental changes, etc.) measured over a period equal to the estimated remaining term of the lease. The capitalized above-market or below-market intangible is amortized to rental income over the estimated remaining term of the respective leases, which includes the expected renewal option period for below-market leases. Mortgage debt discounts or premiums are amortized into interest expense over the remaining term of the related debt instrument.

In determining the value of in-place leases, management considers current market conditions and costs to execute similar leases in arriving at an estimate of the carrying costs during the expected lease-up period from vacant to existing occupancy. In estimating carrying costs, management includes real estate taxes, insurance, other operating expenses, estimates of lost rental revenue during the expected lease-up periods and costs to execute similar leases including leasing commissions, legal and other related costs based on current market demand. The value assigned to in-place leases and tenant relationships is amortized over the estimated remaining term of the leases. If a lease were to be terminated prior to its scheduled expiration, all unamortized costs relating to that lease would be written off.

 

Depreciation and amortization are provided on the straight-line method over the estimated useful lives of the assets, as follows:

 

Buildings and building improvements (in years)			15	to	50			15	to	50
Fixtures, leasehold and tenant improvements (including certain identified intangible assets)			Terms of leases or usefullives, whichever is shorter					Terms of leases or useful lives, whichever is shorter

 

The Company periodically assesses the useful lives of its depreciable real estate assets, including those expected to be redeveloped in future periods, and accounts for any revisions prospectively. Expenditures for maintenance, repairs and demolition costs are charged to operations as incurred. Significant renovations and replacements, which improve or extend the life of the asset, are capitalized. The useful lives of amortizable intangible assets are evaluated each reporting period with any changes in estimated useful lives being accounted for over the revised remaining useful life.

 

When a real estate asset is identified by management as held-for-sale, the Company ceases depreciation of the asset and estimates the fair value. If the fair value of the asset is less than the net book value of the asset, an adjustment to the carrying value would be recorded to reflect the estimated fair value of the property, less estimated costs of sale and the asset is classified as other assets.

 

On a continuous basis, management assesses whether there are any indicators, including property operating performance, changes in anticipated holding period and general market conditions, that the value of the real estate properties (including any related amortizable intangible assets or liabilities) may be impaired. A property value is considered impaired only if management’s estimate of current and projected operating cash flows (undiscounted and unleveraged) of the property over its remaining hold period is less than the net carrying value of the property. Such cash flow projections consider factors such as expected future operating income, trends and prospects, as well as the effects of demand, competition and other factors. To the extent impairment has occurred, the carrying value of the property would be adjusted to an amount to reflect the estimated fair value of the property.

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Real Estate Under Development

 

Real estate under development represents the development of open-air shopping center projects, which may include residential and mixed-use components, that the Company plans to hold as long-term investments. These properties are carried at cost. The cost of land and buildings under development includes specifically identifiable costs. The capitalizedCapitalized costs include pre-construction costs essential to the development of the property, development costs, construction costs, interest costs, real estate taxes, insurance, legal costs, salaries and related costs of personnel directly involved and other costs incurred during the period of development. The Company ceases cost capitalization when the property is held available for occupancy and placed into service. This usually occurs upon substantial completion of all costs necessary to bring the property to the condition needed for its intended use, but no later than one year from the completion of major construction activity. However, the Company may continue to capitalize costs even though a project is substantially completed if construction is still ongoing at the site. If, in management’s opinion, the current and projected undiscounted cash flows of these assets to be held as long-term investments is less than the net carrying value plus estimated costs to complete the development, the carrying value would be adjusted to an amount that reflects the estimated fair value of the property.

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Investments in Unconsolidated Joint Ventures

 

The Company accounts for its investments in unconsolidated joint ventures under the equity method of accounting as the Company exercises significant influence, but does not control these entities. These investments are recorded initially at cost and subsequently adjusted for cash contributions, distributions and our share of earnings and losses. Earnings or losses for each investment are recognized in accordance with each respective investment agreement and where applicable, based upon an allocation of the investment’s net assets at book value as if the investment was hypothetically liquidated at the end of each reporting period.

 

The Company’sCompany’s joint ventures and other real estate investments primarily consist of co-investments with institutional and other joint venture partners in open-air shopping center properties, consistent with its core business. These joint ventures typically obtain non-recourse third-party financing on their property investments, thus contractually limiting the Company’s exposure to losses primarily to the amount of its equity investment; and due to the lender’s exposure to losses, a lender typically will require a minimum level of equity in order to mitigate its risk. The Company, on a limited selective basis, has obtained unsecured financing for certain joint ventures. These unsecured financings may be guaranteed by the Company with guarantees from the joint venture partners for their proportionate amounts of any guaranty payment the Company is obligated to make. As of December 31, 2016,2017, the Company did not guaranty any unsecured joint venture debt.

 

To recognize the character of distributions from equity investees within its consolidated statements of cash flows, all distributions received are presumed to be returns on investment and classified as cash inflows from operating activities unless the Company’s cumulative distributions received less distributions received in prior periods that were determined to be returns of investment exceed its cumulative equity in earnings recognized by the investor (as adjusted for amortization of basis differences). When such an excess occurs, the current-period distribution up to this excess is considered a return of investment and classified as cash inflows from investing.

 

On a continuous basis, management assesses whether there are any indicators, including the underlying investment property operating performance and general market conditions, that the value of the Company’sCompany’s investments in unconsolidated joint ventures may be impaired. An investment’s value is impaired only if management’s estimate of the fair value of the investment is less than the carrying value of the investment and such difference is deemed to be other-than-temporary. To the extent impairment has occurred, the loss shall be measured as the excess of the carrying amount of the investment over the estimated fair value of the investment.

 

The Company’sCompany’s estimated fair values are based upon a discounted cash flow model for each joint venture that includes all estimated cash inflows and outflows over a specified holding period. Capitalization rates, discount rates and credit spreads utilized in these models are based upon rates that the Company believes to be within a reasonable range of current market rates.

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Other Real Estate Investments

 

Other real estate investments primarily consist of preferred equity investments for which the Company provides capital to owners and developers of real estate. The Company typically accounts for its preferred equity investments on the equity method of accounting, whereby earnings for each investment are recognized in accordance with each respective investment agreement and based upon an allocation of the investment’s net assets at book value as if the investment was hypothetically liquidated at the end of each reporting period.

 

On a continuous basis, management assesses whether there are any indicators, including the underlying investment property operating performance and general market conditions, that the value of the Company’sCompany’s Other real estate investments may be impaired. An investment’s value is impaired only if management’s estimate of the fair value of the investment is less than the carrying value of the investment and such difference is deemed to be other-than-temporary. To the extent impairment has occurred, the loss shall be measured as the excess of the carrying amount of the investment over the estimated fair value of the investment.

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The Company’sCompany’s estimated fair values are based upon a discounted cash flow model for each investment that includes all estimated cash inflows and outflows over a specified holding period and, where applicable, any estimated debt premiums. Capitalization rates, discount rates and credit spreads utilized in these models are based upon rates that the Company believes to be within a reasonable range of current market rates.

 

Mortgages and Other Financing Receivables

 

Mortgages and other financing receivables consist of loans acquired and loans originated by the Company. Borrowers of these loans are primarily experienced owners, operators or developers of commercial real estate. The Company’sCompany’s loans are primarily mortgage loans that are collateralized by real estate. Mortgages and other financing receivables are recorded at stated principal amounts, net of any discount or premium or deferred loan origination costs or fees. The related discounts or premiums on mortgages and other loans purchased are amortized or accreted over the life of the related loan receivable. The Company defers certain loan origination and commitment fees, net of certain origination costs and amortizes them as an adjustment of the loan’s yield over the term of the related loan. On a quarterly basis, the Company reviews credit quality indicators such as (i) payment status to identify performing versus non-performing loans, (ii) changes affecting the underlying real estate collateral and (iii) national and regional economic factors.

 

Interest income on performing loans is accrued as earned. A non-performing loan is placed on non-accrual status when it is probable that the borrower may be unable to meet interest payments as they become due. Generally, loans 90 days or more past due are placed on non-accrual status unless there is sufficient collateral to assure collectability of principal and interest. Upon the designation of non-accrual status, all unpaid accrued interest is reserved and charged against current income. Interest income on non-performing loans is generally recognized on a cash basis. Recognition of interest income on non-performing loans on an accrual basis is resumed when it is probable that the Company will be able to collect amounts due according to the contractual terms.

 

The Company has determined that it has one portfolio segment, primarily represented by loans collateralized by real estate, whereby it determines, as needed, reserves for loan losses on an asset-specific basis. The reserve for loan losses reflects management's estimate of loan losses as of the balance sheet date. The reserve is increased through loan loss expense and is decreased by charge-offs when losses are confirmed through the receipt of assets such as cash or via ownership control of the underlying collateral in full satisfaction of the loan upon foreclosure or when significant collection efforts have ceased.

 

The Company considers a loan to be impaired when, based upon current information and events, it is probable that the Company will be unable to collect all amounts due under the existing contractual terms. A reserve allowance is established for an impaired loan when the estimated fair value of the underlying collateral (for collateralized loans) or the present value of expected future cash flows is lower than the carrying value of the loan. An internal valuation is performed generally using the income approach to estimate the fair value of the collateral at the time a loan is determined to be impaired. The model is updated if circumstances indicate a significant change in value has occurred. The Company does not provide for an additional allowance for loan losses based on the grouping of loans as the Company believes the characteristics of the loans are not sufficiently similar to allow an evaluation of these loans as a group for a possible loan loss allowance. As such, all of the Company’sCompany’s loans are evaluated individually for impairment purposes.

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Cash and Cash Equivalents

 

Cash and cash equivalents include demand deposits in banks, commercial paper and certificates of deposit with original maturities of three months or less. Cash and cash equivalent balances may, at a limited number of banks and financial institutions, exceed insurable amounts. The Company believes it mitigates risk by investing in or through major financial institutions and primarily in funds that are currently U.S. federal government insured up to applicable account limits. Recoverability of investments is dependent upon the performance of the issuers.

 

Marketable Securities

 

The Company classifies its marketable equity securities as available-for-sale in accordance with the FASB’sFASB’s Investments-Debt and Equity Securities guidance. These securities are carried at fair market value with unrealized gains and losses reported in stockholders’ equity as a component of Accumulated other comprehensive income ("AOCI").  Effective January 1, 2018, in accordance with the adoption of ASU 2016-01, Financial Instruments—Overall (Subtopic 825-10): Recognition and Measurement of Financial Assets and Financial Liabilities, the Company will recognize changes in fair value of equity investments with readily determinable fair values in net income.  Gains or losses on securities sold are based on the specific identification method and are recognized in Interest, dividends and other investment income on the Company’s Consolidated Statements of Income.

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All debt securities are generally classified as held-to-maturity because the Company has the positive intent and ability to hold the securities to maturity.maturity. It is more likely than not that the Company will not be required to sell the debt security before its anticipated recovery and the Company expects to recover the security’s entire amortized cost basis even if the entity does not intend to sell. Held-to-maturity securities are stated at amortized cost, adjusted for amortization of premiums and accretion of discounts to maturity. Debt securities which contain conversion features generally are classified as available-for-sale.

 

On a continuous basis, management assesses whether there are any indicators that the value of the Company’sCompany’s marketable securities may be impaired, which includes reviewing the underlying cause of any decline in value and the estimated recovery period, as well as the severity and duration of the decline. In the Company’s evaluation, the Company considers its ability and intent to hold these investments for a reasonable period of time sufficient for the Company to recover its cost basis. A marketable security is impaired if the fair value of the security is less than the carrying value of the security and such difference is deemed to be other-than-temporary. To the extent impairment has occurred, the loss shall be measured as the excess of the carrying amount of the security over the estimated fair value in the security.

 

Deferred Leasing Costs

 

Costs incurred in obtaining tenant leases, included in deferred charges and prepaid expenses in the accompanying Consolidated Balance Sheets, are amortized on a straight-line basis, over the terms of the related leases, as applicable. Such capitalized costs include salaries, lease incentives and related costs of personnel directly involved in successful leasing efforts. Deferred leasing costs are classified as operating activities on the Company’s Consolidated Statements of Cash Flows.

 

Software Development Costs

 

Expenditures for major software purchases and software developed for internal use are capitalized and amortized on a straight-line basis generally over a three to five-year period. The Company’s policy provides for the capitalization of external direct costs of materials and services associated with developing or obtaining internal use computer software. In addition, the Company also capitalizes certain payroll and payroll-related costs for employees who are directly associated with internal use computer software projects. The amount of payroll costs that can be capitalized with respect to these employees is limited to the time directly spent on such projects. Costs associated with preliminary project stage activities, training, maintenance and all other post-implementation stage activities are expensed as incurred.  As of December 31, 20162017 and 2015,2016, the Company had unamortized software development costs of $10.2$6.2 million and $16.1$10.2 million, respectively, which is included in Other assets on the Company’s Consolidated Balance Sheets.  The Company expensed $4.6 million, $8.0 million $10.7 million and $9.2$10.7 million in amortization of software development costs during the years ended December 31, 2017, 2016 and 2015, and 2014, respectively.

 

Deferred Financing Costs

 

Costs incurred in obtaining long-term financing, included in Notes Payablepayable, net and Mortgages Payablepayable, net in the accompanying Consolidated Balance Sheets, are amortized on a straight-line basis, which approximates the effective interest method, over the terms of the related debt agreements, as applicable.

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Revenue, GainRecognition and Accounts Receivable

 

Base rental revenues from rental propertiesproperties are recognized on a straight-line basis over the terms of the related leases. Certain of these leases also provide for percentage rents based upon the level of sales achieved by the lessee.  These percentage rents are recognized once the required sales level is achieved.  Rental income may also include payments received in connection with lease termination agreements.  In addition, leases typically provide for reimbursement to the Company of common area maintenance costs, real estate taxes and other operating expenses.  Operating expense reimbursements are recognized as earned.

 

Management and other fee income consists of property management fees, leasing fees, property acquisition and disposition fees, development fees and asset management fees. These fees arise from contractual agreements with third parties or with entities in which the Company has a noncontrolling interest. Management and other fee income, including acquisition and disposition fees, are recognized as earned under the respective agreements. Management and other fee income related to partially owned entities are recognized to the extent attributable to the unaffiliated interest.

 

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Gains and losses from the sale of depreciated operating property and real estate under development projects are recognized using the full accrual method in accordance with the FASB’s real estate sales guidance, provided that various criteria relating to the terms of sale and subsequent involvement by the Company with the properties are met.

 

Gains and losses on transfers of operating properties result from the sale of a partial interest in properties to unconsolidated joint ventures and are recognized using the partial sale provisions of the FASB’sFASB’s real estate sales guidance.

 

The Company makes estimates of the uncollectable accounts receivables related to base rents, straight-line rent, expense reimbursements and other revenues. The Company analyzes accounts receivable and historical bad debt levels, customer credit worthiness and current economic trends when evaluating the adequacy of the allowance for doubtful accounts. In addition, tenants in bankruptcy are analyzed and estimates are made in connection with the expected recovery of pre-petition and post-petition claims. The Company’s reported net earnings are directly affected by management’s estimate of the collectability of accounts receivable.

 

Accounts and notes receivable in the accompanying Consolidated Balance Sheets are net of estimated unrecoverable amounts of $12.3$9.2 million and $13.9$12.3 million of billed accounts receivable at December 31, 20162017 and 2015,2016, respectively. Additionally, Accounts and notes receivable in the accompanying Consolidated Balance Sheets are net of estimated unrecoverable amounts of $11.9$7.9 million and $17.9$11.9 million of straight-line rent receivable at December 31, 2017 and 2016, and 2015, respectively.

 

Income Taxes

 

The Company has made an election to qualify, and believes it is operating so as to qualify,elected status as a REIT for federal income tax purposes.purposes beginning in its taxable year January 1, 1992 and operates in a manner that enables the Company to qualify and maintain its status as a REIT. Accordingly, the Company generally will not be subject to federal income tax, provided that distributions to its stockholders equal at least the amount of its REIT taxable income as defined under Section 856 through 860 of the Code. Most states, where the Company holds investments in real estate, conform to the federal rules recognizing REITs.  

 

InAdditionally, in connection with the RMA,Tax Relief Extension Act of 1999 (the "RMA"), which became effective January 1, 2001, the Company is permitted to participate in certain activities which it was previously precluded from previously in order to maintain its qualification as a REIT, so long as these activities are conducted byin entities which elect to be treated as taxable REIT subsidiaries (“TRSs”TRS”) under the Code.Code, subject to certain limitations. Certain subsidiaries of the Company have made a joint election with the Company to be treated as TRSs.  A TRS is subject to federal and state income taxes on its income, and the Company includes a provision for taxes in its consolidated financial statements.  As such, the Company, through its wholly-owned TRS, has been engaged in various retail real estate related opportunities including retail real estate management and disposition services which primarily focuses on leasing and disposition strategies of retail real estate controlled by both healthy and distressed and/or bankrupt retailers. The Company may consider other investments through its TRS should suitable opportunities arise. The Company is subject to and also includes in its tax provision non-U.S. income taxes on certain investments located in jurisdictions outside the U.S. These investments are held by the Company at the REIT level and not in the Company’s taxable REIT subsidiaries. Accordingly, the Company does not expect a U.S. income tax impact associated with the repatriation of undistributed earnings from the Company’s foreign subsidiaries.

 

Income taxes are accounted for under the asset and liability method. Deferred tax assets and liabilities are recognized for the estimated future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases and operating loss and tax credit carry-forwards. Deferred tax assets and liabilities are measured using enacted tax rates in effect for the year in which those temporary differences are expected to be recovered or settled. The Company provides a valuation allowance for deferred tax assets for which it does not consider realization of such assets to be more likely than not.

 

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The Company reviews the need to establish a valuation allowance against deferred tax assets on a quarterly basis. The review includes an analysis of various factors, such as future reversals of existing taxable temporary differences, the capacity for the carryback or carryforward of any losses, the expected occurrence of future income or loss and available tax planning strategies.

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The Company applies the FASB’s guidance relating to uncertainty in income taxes recognized in a Company’s financial statements. Under this guidance the Company may recognize the tax benefit from an uncertain tax position only if it is more likely than not that the tax position will be sustained on examination by taxing authorities, based on the technical merits of the position. The tax benefits recognized in the financial statements from such a position are measured based on the largest benefit that has a greater than fifty percent likelihood of being realized upon ultimate settlement. The guidance on accounting for uncertainty in income taxes also provides guidance on de-recognition, classification, interest and penalties on income taxes, and accounting in interim periods.

 

Foreign Currency Translation and Transactions

 

Assets and liabilities of the Company’sCompany’s foreign operations, where it has been determined that the local currency is the functional currency, are translated using year-end exchange rates, and revenues and expenses are translated using exchange rates as determined throughout the year. Gains or losses resulting from translation are included in AOCI, as a separate component of the Company’s stockholders’ equity. Gains or losses resulting from foreign currency transactions are translated to local currency at the rates of exchange prevailing at the dates of the transactions. The effect of the transaction’s gain or loss is included in the caption Other income/(expense),/income, net in the Consolidated Statements of Income. The Company is required to release cumulative translation adjustment (“CTA”) balances into earnings when the Company has substantially liquidated its investment in a foreign entity. As of December 31, 2017, the Company has exited South America and substantially liquidated its investments in Mexico and Canada.

 

Derivative/Financial Instruments

 

The Company is exposed to certain risksrisks arising from both its business operations and economic conditions. The Company principally manages its exposures to a wide variety of business and operational risk through management of its core business activities. The Company manages economic risks, including interest rate, liquidity, and credit risk primarily by managing the amount, sources, and duration of its debt funding and the use of derivative financial instruments. Specifically, the Company may use derivatives to manage exposures that arise from changes in interest rates, foreign currency exchange rate fluctuations and market value fluctuations of equity securities. The Company limits these risks by following established risk management policies and procedures including the use of derivatives.

 

The Company measures its derivative instruments at fair value and records them in the Consolidated Balance Sheet as an asset or liability, depending on the Company’sCompany’s rights or obligations under the applicable derivative contract.  The accounting for changes in the fair value of the derivatives depends on the intended use of the derivative, whether the Company has elected to designate a derivative in a hedging relationship and apply hedge accounting and whether the hedging relationship has satisfied the criteria necessary to apply hedge accounting. Derivatives designated and qualifying as a hedge of the exposure to changes in the fair value of an asset, liability, or firm commitment attributable to a particular risk, such as interest rate risk, are considered fair value hedges. Derivatives designated and qualifying as a hedge of the exposure to variability in expected future cash flows, or other types of forecasted transactions, are considered cash flow hedges. Derivatives may also be designated as hedges of the foreign currency exposure of a net investment in a foreign operation. Hedge accounting generally provides for the matching of the timing of gain or loss recognition on the hedging instrument with the recognition of the changes in the fair value of the hedged asset or liability that are attributable to the hedged risk in a fair value hedge or the earnings effect of the hedged forecasted transactions in a cash flow hedge. The Company may enter into derivative contracts that are intended to economically hedge certain of its risk, even though hedge accounting does not apply or the Company elects not to apply hedge accounting under the Derivatives and Hedging guidance issued by the FASB.

 

The effective portion of the changes in fair value of derivatives designated and that qualify as cash flow hedges is recorded in AOCI and is subsequently reclassified into earnings in the period that the hedged forecasted transaction affects earnings. Any ineffective portion of the change in fair value of the derivatives is recognized directly in earnings. During 2017, 2016 2015 and 2014,2015, the Company had no hedge ineffectiveness.

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Noncontrolling Interests

 

The Company accounts for noncontrolling interests in accordance with the Consolidation guidance and the Distinguishing Liabilities from Equity guidance issued by the FASB. Noncontrolling interests represent the portion of equity that the Company does not own in those entities it consolidates. The Company identifies its noncontrolling interests separately within the equity section on the Company’sCompany’s Consolidated Balance Sheets. The amounts of consolidated net earnings attributable to the Company and to the noncontrolling interests are presented separately on the Company’s Consolidated Statements of Income. 

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, continued

 

Noncontrolling interests also includes amounts related to partnership units issued by consolidated subsidiaries of the Company in connection with certain property acquisitions. These units have a stated redemption value or a defined redemption amount based upon the trading price of the Company’sCompany’s common stock and provides the unit holders various rates of return during the holding period. The unit holders generally have the right to redeem their units for cash at any time after one year from issuance. For convertible units, the Company typically has the option to settle redemption amounts in cash or common stock.

 

The Company evaluates the terms of the partnership units issued in accordance with the FASB’sFASB’s Distinguishing Liabilities from Equity guidance.  Units which embody an unconditionala conditional obligation requiring the Company to redeem the units for cash after a specified or determinable date (or dates) or upon the occurrence of an event that is not solely within the control of the issuer are determined to be contingently redeemable under this guidance and are included as Redeemable noncontrolling interest and classified within the mezzanine section between Total liabilities and Stockholders’ equity on the Company’s Consolidated Balance Sheets.  Convertible units for which the Company has the option to settle redemption amounts in cash or Common Stockcommon stock are included in the caption Noncontrolling interest within the equity section on the Company’s Consolidated Balance Sheets.

Earnings Per Share

 

The following table sets forth the reconciliation of earnings and the weighted-average number of shares used in the calculation of basic and diluted earnings per share (amounts presented in thousands, except per share data):

		For the year ended December 31,
		2016				2015				2014
Computation of Basic Earnings Per Share:
Income from continuing operations		$	299,353			$	774,405			$	384,506
Gain on sale of operating properties, net, net of tax			86,785				125,813				389
Net income attributable to noncontrolling interests			(7,288	)			(6,028	)			(11,879	)
Discontinued operations attributable to noncontrolling interests			-				-				2,117
Preferred stock redemption charges			-				(5,816	)			-
Preferred stock dividends			(46,220	)			(57,084	)			(58,294	)
Income from continuing operations available to the commonShareholders			332,630				831,290				316,839
Earnings attributable to participating securities			(2,018	)			(4,134	)			(1,749	)
Income from continuing operations available to commonShareholders			330,612				827,156				315,090
(Loss)/income from discontinued operations attributable to theCompany			-				(75	)			48,868
Net income available to the Company’s common shareholdersfor basic earnings per share		$	330,612			$	827,081			$	363,958
Weighted average common shares outstanding – basic			418,402				411,319				409,088
Basic Earnings Per ShareAvailable to the Company’s CommonShareholders:
Income from continuing operations		$	0.79			$	2.01			$	0.77
Income from discontinued operations			-				-				0.12
Net income		$	0.79			$	2.01			$	0.89
Computation of Diluted Earnings Per Share:
Income from continuing operations available to commonshareholders		$	330,612			$	827,156			$	315,090
(Loss)/income from discontinued operations attributable to theCompany			-				(75	)			48,868
Distributions on convertible units			-				192				529
Net income available to the Company’s common shareholdersfor diluted earnings per share		$	330,612			$	827,273			$	364,487
Weighted average common shares outstanding – basic			418,402				411,319				409,088
Effect of dilutive securities (a):Equity awards			1,307				1,414				1,227
Assumed conversion of convertible units			-				118				723
Shares for diluted earnings per common share			419,709				412,851				411,038
Diluted Earnings Per ShareAvailable to the Company’s CommonShareholders:
Income from continuing operations		$	0.79			$	2.00			$	0.77
Income from discontinued operations			-				-				0.12
Net income		$	0.79			$	2.00			$	0.89

(a)

The effect of the assumed conversion of certain convertible units had an anti-dilutive effect upon the calculation of Income from continuing operations per share. Accordingly, the impact of such conversions has not been included in the determination of diluted earnings per share calculations. Additionally, there were 3,490,400, 5,300,680 and 7,137,120 stock options that were not dilutive as of December 31, 2016, 2015 and 2014, respectively.

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The Company's unvested restricted share awards contain non-forfeitable rights to distributions or distribution equivalents. The impact of the unvested restricted share awards on earnings per share has been calculated using the two-class method whereby earnings are allocated to the unvested restricted share awards based on dividends declared and the unvested restricted shares' participation rights in undistributed earnings.

Stock Compensation

 

The Company maintains two equity participation plans, the Second Amended and Restated 1998 Equity Participation Plan (the “Prior Plan”) and the 2010 Equity Participation Plan (the “2010 Plan”) (collectively, the “Plans”). The Prior Plan provides for a maximum of 47,000,000 shares of the Company’sCompany’s common stock to be issued for qualified and non-qualified stock options and restricted stock grants. Effective May 1, 2012, the 2010 Plan provides for a maximum of 10,000,000 shares of the Company’s common stock to be issued for qualified and non-qualified stock options and other awards, plus the number of shares of common stock which are or become available for issuance under the Prior Plan and which are not thereafter issued under the Prior Plan, subject to certain conditions. Unless otherwise determined by the Board of Directors at its sole discretion, stock options granted under the Plans generally vest ratably over a range of three to five years, expire ten years from the date of grant and are exercisable at the market price on the date of grant. Restricted stock grants generally vest (i) 100% on the fourth or fifth anniversary of the grant, (ii) ratably over three, four and five years or (iii) over ten years at 20% per year commencing after the fifth year. Performance share awards, which vest over a period of one to three years, may provide a right to receive shares of the Company’s common stock or restricted stock based on the Company’s performance relative to its peers, as defined, or based on other performance criteria as determined by the Board of Directors. In addition, the Plans provide for the granting of certain stock options and restricted stock to each of the Company’s non-employee directors (the “Independent Directors”) and permit such Independent Directors to elect to receive deferred stock awards in lieu of directors’ fees.

 

The Company accounts for equity awards in accordance with the FASB’s Stock Compensation guidance which requires that all share based payments to employees, be recognized in the Statement of Income over the service period based on their fair values. Fair value is determined, depending on the type of award, using either the Black-Scholes option pricing formula or the Monte Carlo method, both of which are intended to estimate the fair value of the awards at the grant date (see Footnote 2120 of the Notes to Consolidated Financial Statements for additional disclosure on the assumptions and methodology).

 

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, continued

New Accounting Pronouncements

 

In January 2017,The following table represents ASUs to the FASB issued ASU 2017-01, Business Combinations (Topic 805): Clarifying the Definition of a Business’s Accounting Standards Codification (“ASU 2017-01”ASC”). The update clarifies the definition of a business with the objective of adding guidance to assist entities with evaluating whether transactions should be accounted for that, as acquisitions (or disposals) of assets or businesses. The definition of a business affects many areas of accounting including acquisitions, disposals, goodwill, and consolidation. The standard is effective for annual reporting periods beginning after December 15, 2017, including interim periods within those fiscal years, with early application of the guidance permitted. The Company has elected to early adopt ASU 2017-01 at the beginning of its fiscal year ended December 31, 2017, including its interim periods withinare not yet effective for the year,Company and appropriately applyfor which the guidance to its prospective asset acquisitions of operating properties. Under this amendment, the Company’s prospective operating property acquisitions will qualify for asset acquisition treatment under ASC 360, Property, Plant, and Equipment, rather than business combination treatment under ASC 805 Business Combinations, and will result in capitalization of asset acquisition costs instead of directly expensing these costs.Company has not elected early adoption, where permitted:

 

	In August 2016, the FASB issued ASU 2016-15, Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments, a consensus of the FASB’s Emerging Issues Task Force (“ASU 2016-15”). The new guidance addresses eight specific cash flow issues with the objective of reducing the existing diversity in practice. One identified cash flow issue relates to distributions received from equity method investees whereby the reporting entity should make an accounting policy election to classify distributions received from equity method investees using either the cumulative earnings approach or the nature of the distribution approach. Another issue relates to the classification of cash payments for debt prepayment or debt extinguishment costs. The standard is retrospectively effective for public companies on January 1, 2018, with early adoption permitted. The Company elected to early adopt ASU 2016-15 beginning in its quarter ended September 30, 2016. In connection with the adoption of ASU 2016-15, the Company made a policy election to classify distributions received from equity method investees using the cumulative earnings approach. This election did not have a material impact on the presentation in the Company’s Consolidated Statements of Cash Flows. During the quarter ended September 30, 2016, the Company incurred early extinguishment of debt charges and in accordance with the adoption of ASU 2016-15 has included these charges in cash flows used for financing activities on the Company’s Consolidated Statements of Cash Flows. The adoption of the remaining cash flow issues addressed in ASU 2016-15 did not have a material impact on the Company’s Consolidated Statements of Cash Flows. In June 2016, the FASB issued ASU 2016-13, Financial Instruments – Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments (“ASU 2016-13”). The new guidance introduces a new model for estimating credit losses for certain types of financial instruments, including loans receivable, held-to-maturity debt securities, and net investments in direct financing leases, amongst other financial instruments. ASU 2016-13 also modifies the impairment model for available-for-sale debt securities and expands the disclosure requirements regarding an entity’s assumptions, models, and methods for estimating the allowance for losses. The standard is effective for annual reporting periods beginning after December 15, 2019, including interim periods within those fiscal years, with early application of the guidance permitted. The adoption of ASU 2016-13 is not expected to have a material effect on the Company’s financial position and/or results of operations. In March 2016, the FASB issued ASU 2016-09, Compensation – Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting ("ASU 2016-09"). The update simplifies several aspects of accounting for employee share-based payment transactions for both public and nonpublic entities, including the accounting for income taxes, forfeitures, and statutory tax withholding requirements, as well as classification in the statement of cash flows. The ASU is effective for annual reporting periods beginning after December 15, 2016, including interim periods within those annual reporting periods. Early adoption is permitted. The adoption of ASU 2016-09 is not expected to have a material effect on the Company’s financial position and/or results of operations.			Description		Effective Date			Effect on the financial statements or other significant matters
	ASU 2017-09, Compensation – Stock Compensation (Topic 718): Scope of Modification Accounting			The amendment provides guidance about which changes to the terms or conditions of a share-based payment award require an entity to apply modification accounting in Topic 718. Under the new guidance, modification accounting is required only if the fair value, the vesting conditions, or the classification of the award (as equity or liability) changes as a result of the change in terms or conditions. The new guidance will be applied prospectively to awards modified on or after the adoption date.		January 1, 2018; Early adoption permitted			The adoption is not expected to have a material effect on the Company’s financial position and/or results of operations.
	ASU 2017-05, Other Income – Gains and Losses from the Derecognition of Nonfinancial Assets (“Subtopic 610-20”): Clarifying the Scope of Asset Derecognition Guidance and Accounting for Partial Sales of Nonfinancial Assets			The amendment clarifies that a financial asset is within the scope of Subtopic 610-20 if it meets the definition of an in substance nonfinancial asset and defines the term in substance nonfinancial asset. ASU 2017-05 also clarifies that nonfinancial assets within the scope of Subtopic 610-20 may include nonfinancial assets transferred within a legal entity to a counterparty.  Subtopic 610-20, which was issued in May 2014 as part of ASU 2014-09, discussed below, provides guidance for recognizing gains and losses from the transfer of nonfinancial assets in contracts with noncustomers. An entity is required to apply the amendments in ASU 2017-05 at the same time it applies the amendments in ASU 2014-09 discussed below. An entity may elect to apply the amendments in ASU 2017-05 either retrospectively to each period presented in the financial statements in accordance with the guidance on accounting changes in ASC Topic 250, Accounting Changes and Error Corrections, paragraphs 10-45-5 through 10-45-10 (i.e. the retrospective approach) or retrospectively with a cumulative-effect adjustment to retained earnings as of the beginning of the fiscal year of adoption (i.e. the modified retrospective approach). An entity may elect to apply all of the amendments in ASU 2017-05 and ASU 2014-09 using the same transition method, or alternatively may elect to use different transition methods.		January 1, 2018; Early adoption is permitted if adopted with ASU 2014-09			The Company will adopt the provisions of Subtopic 610-20 in the first quarter of fiscal 2018, using the modified retrospective approach. Upon adoption, the Company will appropriately apply the guidance to prospective disposals of nonfinancial assets within the scope of Subtopic 610-20.
	ASU 2016-13, Financial Instruments – Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments			The new guidance introduces a new model for estimating credit losses for certain types of financial instruments, including loans receivable, held-to-maturity debt securities, and net investments in direct financing leases, amongst other financial instruments. ASU 2016-13 also modifies the impairment model for available-for-sale debt securities and expands the disclosure requirements regarding an entity’s assumptions, models, and methods for estimating the allowance for losses.		January 1, 2020; Early adoption permitted			The Company is still assessing the impact on its financial position and/or results of operations.

 

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ASU 2014-09, Revenue from Contracts with Customers (Topic 606) ASU 2015-14, Revenue from Contracts with Customers (Topic 606): Deferral of the Effective Date ASU 2016-08, Revenue from Contracts with Customers (Topic 606): Principal versus Agent Considerations ASU 2016-10, Revenue from Contracts with Customers (Topic 606): Identifying performance obligations and licensing ASU 2016-12, Revenue from Contracts with Customers (Topic 606): Narrow-scope improvements and practical expedients

ASU 2014-09 is a comprehensive new revenue recognition model requiring a company to recognize revenue to depict the transfer of goods or services to a customer at an amount reflecting the consideration it expects to receive in exchange for those goods or services. In adopting ASU 2014-09, companies may use either a full retrospective or a modified retrospective approach. ASU 2014-09 was anticipated to be effective for the first interim period within annual reporting periods beginning after December 15, 2016, and early adoption was not permitted. In August 2015, the FASB issued ASU 2015-14, which delayed the effective date of ASU 2014-09 by one year making it effective for the first interim period within annual reporting periods beginning after December 15, 2017. Subsequently, in March 2016, the FASB issued ASU 2016-08, which further clarifies the implementation guidance on principal versus agent considerations, and in April 2016, the FASB issued ASU 2016-10, an update on identifying performance obligations and accounting for licenses of intellectual property. Additionally, in May 2016, the FASB issued ASU 2016-12, which includes amendments for enhanced clarification of the guidance. Early adoption is permitted as of the original effective date.

January 1, 2018; Early adoption permitted as of original effective date, which was January 1, 2017

The Company’s revenue-producing contracts are primarily leases that are not within the scope of this standard, except for the lease component relating to common area maintenance (“CAM”) reimbursement revenue, which will be within the scope of this standard upon the effective date of ASU 2016-02, Leases (Topic 842) discussed below. The revenues which will be within the scope of this standard include other ancillary income earned through the Company’s operating properties as well as fees for services performed at various unconsolidated joint ventures which the Company manages. These fees primarily include property and asset management fees, leasing fees, development fees and property acquisition/disposition fees. These revenues represented approximately 3% of the Company’s consolidated revenue for both the years ended December 31, 2017 and 2016. The Company believes the timing of recognition and amount of these revenues will be generally consistent with the current recognition and measurement. The Company plans to adopt this standard effective January 1, 2018, using the modified retrospective approach, which requires a cumulative effect adjustment, if any, as of the date of adoption. The Company has determined that the adoption of this standard will not require any material adjustments to the consolidated financial statements but will result in additional disclosures related to disaggregation of revenue streams beginning in the first quarter of 2018.

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ASU 2016-02, Leases (Topic 842)

This ASU sets out the principles for the recognition, measurement, presentation and disclosure of leases for both parties to a contract (i.e. lessees and lessors). The new standard requires lessees to apply a dual approach, classifying leases as either finance or operating leases based on the principle of whether or not the lease is effectively a financed purchase by the lessee. This classification will determine whether lease expense is recognized based on an effective interest method or on a straight-line basis over the term of the lease. A lessee is also required to record a right-of-use asset and a lease liability for all leases with a term of greater than 12 months regardless of their classification. Leases with a term of 12 months or less will be accounted for similar to existing guidance for operating leases today. The new standard requires lessors to account for leases using an approach that is substantially equivalent to existing guidance for sales-type leases, direct financing leases and operating leases. ASU 2016-02 supersedes the previous leases standard, Leases (Topic 840).

January 1, 2019; Early adoption permitted

The Company continues to evaluate the effect the adoption will have on the Company’s financial position and/or results of operations. However, the Company currently believes that the adoption will not have a material impact for operating leases where it is a lessor and will continue to record revenues from rental properties for its operating leases on a straight-line basis. However, for leases where the Company is a lessee, primarily for the Company’s ground leases and administrative office leases, the Company will be required to record a lease liability and a right of use asset on its Consolidated Balance Sheets at fair value upon adoption. In addition, direct internal leasing costs will continue to be capitalized, however, indirect internal leasing costs previously capitalized will be expensed. Within the terms of the Company’s leases where the Company is the lessor, the Company is entitled to receive reimbursement amounts from tenants for operating expenses such as real estate taxes, insurance and other CAM. Upon adoption of this ASU, CAM reimbursement revenue will be accounted for in accordance with ASU 2016-12 Revenue from Contracts with Customers (Topic 606). The Company continues to evaluate the effect the adoption will have on this source of revenue. However, the Company currently does not believe the adoption will significantly affect the timing of the recognition of the Company’s CAM reimbursement revenue.

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ASU 2016-01, Financial Instruments—Overall (Subtopic 825-10): Recognition and Measurement of Financial Assets and Financial Liabilities

The amendment addresses certain aspects of recognition, measurement, presentation and disclosure of financial instruments, including the following:  (i) Requires equity investments (excluding those investments accounted for under the equity method of accounting or those that result in consolidation of the investee) with readily determinable fair values to be measured at fair value with the changes in fair value recognized in net income; however, an entity may choose to measure equity investments that do not have readily determinable fair values at cost minus impairment, if any, plus or minus changes resulting from observable price changes in orderly transactions for the identical or a similar investment of the same issuer. (ii) Simplifies the impairment assessment of those equity investments without readily determinable fair values by requiring a qualitative assessment to identify impairment (iii) Eliminates the disclosure of the method(s) and significant assumptions used to estimate the fair value for financial instruments measured at amortized cost and changes the fair value calculation for those investments (iv) Changes the disclosure in other comprehensive income for financial liabilities that are measured at fair value in accordance with the fair value options for financial instruments (v) Clarifies that a deferred asset related to available-for-sale securities should be included in an entity's evaluation for a valuation allowance.

January 1, 2018; Early adoption permitted for certain disclosure requirements

Currently, changes in fair value of these equity investments with readily determinable fair values are recognized in AOCI. This ASU states that these changes will be recognized in net income. The Company anticipates the implementation of this guidance will affect how changes in the fair value of available-for-sale marketable securities are presented in the Company’s consolidated financial statements. In addition, the Company will record a cumulative-effect adjustment to beginning retained earnings in the year of adoption (effective as of January 1, 2018) to reclassify unrealized gains and losses previously reported in AOCI for available-for-sale marketable securities. As of December 31, 2017, the Company had unrealized losses related to its available-for-sale marketable securities of $1.1 million.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, continued

 

The following ASUs to the FASB’s ASC have been adopted by the Company during the year ended December 31, 2017:

	ASU			Description			Adoption Date			Effect on the financial statements or other significant matters
	ASU 2017-01, Business Combinations (Topic 805): Clarifying the Definition of a Business			The update clarifies the definition of a business with the objective of adding guidance to assist entities with evaluating whether transactions should be accounted for as acquisitions (or disposals) of assets or businesses. The definition of a business affects many areas of accounting including acquisitions, disposals, goodwill, and consolidation.			January 1, 2017; Elected early adoption			The Company’s operating property acquisitions during 2017 qualified for asset acquisition treatment under ASC 360, Property, Plant, and Equipment, rather than business combination treatment under ASC 805 Business Combinations, and resulted in the capitalization of asset acquisition costs rather than directly expensing these costs.
	ASU 2016-09, Compensation – Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting			The update simplifies several aspects of accounting for employee share-based payment transactions for both public and nonpublic entities, including the accounting for income taxes, forfeitures, and statutory tax withholding requirements, as well as classification in the statement of cash flows.			January 1, 2017			The adoption did not have a material effect on the Company’s financial position and/or results of operations.

2.	Real Estate:

The Company’s components of Rental property consist of the following (in thousands):

		December 31,
		2017				2016
Land		$	2,971,020			$	2,786,255
Undeveloped land			48,264				58,931
Buildings and improvements:
Buildings			6,047,413				5,790,681
Building improvements			1,653,581				1,562,439
Tenant improvements			753,501				733,993
Fixtures and leasehold improvements			45,795				47,199
Above-market leases			153,484				150,207
In-place leases and tenant relationships			577,870				543,342
			12,250,928				11,673,047
Accumulated depreciation and amortization (1)			(2,433,053	)			(2,278,292	)
Total		$	9,817,875			$	9,394,755

(1)

At December 31, 2017 and 2016, the Company had accumulated amortization relating to in-place leases, tenant relationships and above-market leases aggregating $459,211 and $409,062, respectively.

In Februaryaddition, at December 31, 2017 and 2016, the FASB issued ASU 2016-02, Leases (Topic 842) (“ASU 2016-02”), which sets outCompany had intangible liabilities relating to below-market leases from property acquisitions of $329.3 million and $292.6 million, respectively, net of accumulated amortization of $184.5 million and $193.9 million, respectively. These amounts are included in the principles for the recognition, measurement, presentation and disclosure of leases for both parties to a contract (i.e. lessees and lessors). The new standard requires lessees to apply a dual approach, classifying leases as either finance or operating leases based on the principle of whether or not the lease is effectively a financed purchase by the lessee. This classification will determine whether lease expense is recognized based on an effective interest method or on a straight-line basis over the term of the lease. A lessee is also required to record a right-of-use asset and a lease liability for all leases with a term of greater than 12 months regardless of their classification. Leases with a term of 12 months or less will be accounted for similar to existing guidance for operating leases today. The new standard requires lessors to account for leases using an approach that is substantially equivalent to existing guidance for sales-type leases, direct financing leases and operating leases. ASU 2016-02 supersedes the previous leases standard, Leases (Topic 840). The standard is effective for the Company on January 1, 2019, with early adoption permitted. The Company continues to evaluate the effect the adoption of ASU 2016-02 will havecaption Other liabilities on the Company’s financial position and/or results of operations. However, theConsolidated Balance Sheets.  

The Company currently believes that the adoption of ASU 2016-02 will not have a material impact for operating’s amortization associated with above-market and below-market leases where it is a lessor and will continue to record revenues from rental properties for its operating leases on a straight-line basis. However, for leases where the Company is a lessee, primarily for the years ended December 31, 2017, 2016 and 2015, resulted in net increases to revenue of $15.5 million, $21.4 million and $18.5 million, respectively. The Company’s groundamortization expense associated with in-place leases and administrative office leases,tenant relationships, which is included in depreciation and amortization, for the Company will be required to record a lease liabilityyears ended December 31, 2017, 2016 and a right of use asset on its Consolidated Balance Sheets at fair value upon adoption. In addition, direct internal leasing overhead costs will continue to be capitalized, however, indirect internal leasing overhead costs previously capitalized will be expensed under the ASU 2016-02.2015 was $62.7 million, $66.6 million and $68.3 million, respectively.

 

In February 2015, the FASB issued ASU 2015-02, Consolidation (Topic 810): Amendments to the Consolidation Analysis (“ASU 2015-02”). ASU 2015-02 focuses to minimize situations under previously existing guidance in which a reporting entity was required to consolidate another legal entity in which that reporting entity did not have: (1) the ability through contractual rights to act primarily on its own behalf; (2) ownership of the majority of the legal entity's voting rights; or (3) the exposure to a majority of the legal entity's economic benefits. ASU 2015-02 affects reporting entities that are required to evaluate whether they should consolidate certain legal entities. Legal entities are subject to reevaluation under the revised consolidation model. ASU 2015-02 is effective for periods beginning after December 15, 2015. The adoption of ASU 2015-02 did not have a material effect onestimated net amortization income/(expense) associated with the Company’s financial position or results of operations.

In August 2014, the FASB issued ASU 2014-15, Presentation of Financial Statements - Going Concern (Subtopic 205-40): Disclosure of Uncertainties about an Entity’s Ability to Continue as a Going Concern (“ASU 2014-15”), which requires management to evaluate, at each annualabove-market and interim reporting period, whether there are conditions or events that raise substantial doubt about the entity’s ability to continue as a going concern within one year after the date the financial statements are issuedbelow-market leases, tenant relationships and provide related disclosures. ASU 2014-15 is effective for annual periods ending after December 15, 2016 and interim periods thereafter, early adoption is permitted. The adoption of ASU 2014-15 did not have a material effect on the Company’s consolidated financial statements.  

In May 2014, the FASB issued ASU 2014-09, Revenue from Contracts with Customers (Topic 606) ("ASU 2014-09"). ASU 2014-09 is a comprehensive new revenue recognition model requiring a company to recognize revenue to depict the transfer of goods or services to a customer at an amount reflecting the consideration it expects to receive in exchange for those goods or services. In adopting ASU 2014-09, companies may use either a full retrospective or a modified retrospective approach. ASU 2014-09 was anticipated to be effectivein-place leases for the first interim period within annual reporting periods beginning after December 15, 2016, and early adoption was not permitted. In August 2015, the FASB issued ASU 2015-14, Revenue from Contracts with Customers (Topic 606): Deferral of the Effective Date (“ASU 2015-14”), which delayed the effective date of ASU 2014-09 by one year making it effective for the first interim period within annual reporting periods beginning after December 15, 2017. Subsequently, in March 2016, the FASB issued ASU 2016-08, “Revenue from Contracts with Customers (Topic 606): Principal versus Agent Considerations,” which further clarifies the implementation guidance on principal versus agent considerations, and in April 2016, the FASB issued ASU 2016-10, “Revenue from Contracts with Customers (Topic 606): Identifying performance obligations and licensing,” an update on identifying performance obligations and accounting for licenses of intellectual property. Additionally, in May 2016, the FASB issued ASU 2016-12, “Revenue from Contracts with Customers (Topic 606): Narrow-scope improvements and practical expedients,” which includes amendments for enhanced clarification of the guidance. Early adoption is permittednext five years are as of the original effective date. The Company’s revenue-producing contracts are primarily leases that are not within the scope of this standard. As a result, the Company does not expect the adoption of ASU 2014-09 to have a material impact on the Company’s rental income. The Company continues to evaluate the effect the adoption of ASU 2014-09 will have on the Company’s other sources of revenue. These include management and other fee income and reimbursement amounts the Company receives from tenants for operating expenses such as real estate taxes, insurance and other common area maintenance. However, the Company currently does not believe the adoption of ASU 2014-09 will significantly affect the timing of the recognition of the Company’s management and other fee income and reimbursement revenue.

follows (in millions):

 

		2018				2019				2020				2021				2022
Above-market and below-market leases amortization, net		$	13.2			$	14.0			$	14.1			$	14.3			$	13.4
In-place leases and tenant relationships amortization		$	(43.7	)		$	(34.6	)		$	(26.5	)		$	(20.7	)		$	(15.9	)

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3.	Property Acquisitions, Developments and Other Investments:

Acquisition/Consolidation of Operating Properties

During the year ended December 31, 2017, the Company acquired the following operating properties, in separate transactions, through direct asset purchases or consolidation due to change in control resulting from the purchase of additional interests or obtaining control through the modification of a joint venture investment:

						Purchase Price (in thousands)
Property Name		Location		Month Acquired/ Consolidated		Cash*				Debt				Other Consideration**				Total				GLA***
Plantation Commons		Plantation, FL (1) (3)		Jan-17		$	-			$	-			$	12,300			$	12,300				60
Gordon Plaza		Woodbridge, VA (1) (3)		Jan-17			-				-				3,100				3,100				184
Plaza del Prado		Glenview, IL		Jan-17			39,063				-				-				39,063				142
Columbia Crossing Parcel		Columbia Crossing, MD		Jan-17			5,100				-				-				5,100				25
The District at Tustin Legacy		Tustin, CA (2) (3)		Apr-17			-				206,000				98,698				304,698				688
Jantzen Beach Center		Portland, OR		Jul-17			131,927				-				-				131,927				722
Del Monte Plaza Parcel		Reno, NV		Jul-17			24,152				-				-				24,152				83
Gateway Station Phase II		Burleson, TX		Aug-17			15,355				-				-				15,355				79
Jantzen Beach Center Parcel		Portland, OR		Sep-17			6,279				-				-				6,279				25
Webster Square Outparcel		Nashua, NH		Sep-17			4,985				-				-				4,985				22
Whittwood Town Center		Whittier, CA		Oct-17			80,397				43,000				-				123,397				783
123 Coulter Avenue Parcel		Ardmore, PA		Oct-17			4,808				-				-				4,808				1
Fulton Marketplace Parcel		Santa Rosa, CA		Nov-17			13,162				-				-				13,162				61
						$	325,228			$	249,000			$	114,098			$	688,326				2,875

* The Company utilized an aggregate $162.4 million associated with Internal Revenue Code §1031 sales proceeds.

** Includes the Company’s previously held equity interest investment.

*** Gross leasable area ("GLA")

(1)

The Company acquired from its partners, their ownership interest in properties that were held in joint ventures in which the Company had noncontrolling interests. The Company now has a controlling interest in these properties and has deemed these entities to be VIEs for which the Company is the primary beneficiary and now consolidates these assets.

(2)

Effective April 1, 2017, the Company and its partner amended its joint venture agreement relating to the Company’s investment in this property. As a result of this amendment, the Company now controls the entity and consolidates the property. This entity is deemed to be a VIE for which the Company is the primary beneficiary.

(3)

The Company evaluated these transactions pursuant to the FASB’s Consolidation guidance and as a result, recognized gains on change in control of interests resulting from the fair value adjustments associated with the Company’s previously held equity interests, which are included in the purchase price above in Other Consideration. The Company’s current ownership interests and gains on change in control of interests recognized as a result of these transactions are as follows (in thousands):

Property Name		Previous Ownership Interest				Gain on change in control of interests
Plantation Commons			76.25	%		$	9,793
Gordon Plaza			40.62	%			395
The District at Tustin Legacy				(a)			60,972
						$	71,160

(a)

The Company’s share of this investment is subject to change and is based upon a cash flow waterfall provision within the partnership agreement (54.27% as of date of consolidation).

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, continued

 

2.    Real Estate:

The Company’s components of Rental property consist of the following (in thousands):

		December 31,
		2016				2015
Land		$	2,786,255			$	2,660,722
Undeveloped land			58,931				67,535
Buildings and improvements:
Buildings			5,790,681				5,643,629
Building improvements			1,562,439				1,559,652
Tenant improvements			733,993				727,036
Fixtures and leasehold improvements			47,199				47,055
Above-market leases			150,207				155,451
In-place leases and tenant relationships			543,342				528,539
			11,673,047				11,389,619
Accumulated depreciation and amortization (1)			(2,278,292	)			(2,115,320	)
Total		$	9,394,755			$	9,274,299

(1)

At December 31, 2016 and 2015, the Company had accumulated amortization relating to in-place leases, tenant relationships and above-market leases aggregating $409,062 and $357,581, respectively.

In addition, at December 31, 2016 and 2015, the Company had intangible liabilities relating to below-market leases from property acquisitions of $292.6 million and $291.7 million, respectively, net of accumulated amortization of $193.9 million and $193.7 million, respectively. These amounts are included in the caption Other liabilities on the Company’s Consolidated Balance Sheets.  

The Company’s amortization associated with above-market and below-market leases for the years ended December 31, 2016, 2015 and 2014, resulted in net increases to revenue of $21.4 million, $18.5 million and $13.5 million, respectively. The Company’s amortization expense associated with leases in place and tenant relationships, which is included in depreciation and amortization, for the years ended December 31, 2016, 2015 and 2014 was $66.6 million, $68.3 million and $41.2 million, respectively.

The estimated net amortization income/(expense) associated with the Company’s above-market and below-market leases, tenant relationships and leases in place for the next five years are as follows (in millions):

		2017				2018				2019				2020				2021
Above-market and below-market leases amortization, net		$	10.7			$	10.8			$	11.3			$	11.5			$	11.5
In-place leases and tenant relationships amortization		$	(46.5	)		$	(34.1	)		$	(26.3	)		$	(19.3	)		$	(15.4	)

3.    Property Acquisitions, Developments and Other Investments:

Acquisition of Operating Properties

During the year ended December 31, 2016,2016, the Company acquired the following operating properties, in separate transactions (in thousands):transactions:

 

				Purchase Price																								Purchase Price (in thousands)
Property Name	Location	Month Acquired		Cash*				Debt Assumed				Other**				Total				GLA***				Location		Month Acquired		Cash*				Debt				Other Consideration **				Total				GLA
Jericho Atrium	Jericho, NY	Apr-16		$	29,750			$	-			$	-			$	29,750				147			Jericho, NY		Apr-16		$	29,750			$	-			$	-			$	29,750				147
Oakwood Plaza	Hollywood, FL (1)	Apr-16			53,412				100,000				61,588				215,000				899			Hollywood, FL (1)		Apr-16			53,412				100,000				61,588				215,000				899
Webster Square North	Nashua, NH	Jul-16			8,200				-				-				8,200				21			Nashua, NH		Jul-16			8,200				-				-				8,200				21
Gateway Plaza	Mill Creek, WA (1)	Jul-16			493				17,500				-				17,993				97			Mill Creek, WA (1)		Jul-16			493				17,500				-				17,993				97
Kentlands Market Square	Gaithersburg, MD	Aug-16			61,826				33,174				-				95,000				221			Gaithersburg, MD		Aug-16			61,826				33,174				-				95,000				221
GEPT Portfolio (4 properties)	Various (1)	Sep-16			79,974				76,989				10,882				167,845				681			Various (1)		Sep-16			79,974				76,989				10,882				167,845				681
Coulter Avenue (2 parcels)	Ardmore, PA	Various			6,750				-				-				6,750				20			Ardmore, PA		Various			6,750				-				-				6,750				20
KimPru Portfolio (2 properties)	Various (1)	Oct-16			15,505				35,700				3,218				54,423				234			Various (1)		Oct-16			15,505				35,700				3,218				54,423				234
Hamden Mart	Hamden, CT (1)	Nov-16			-				21,369				29,294				50,663				345			Hamden, CT (1)		Nov-16			-				21,369				29,294				50,663				345
				$	255,910			$	284,732			$	104,982			$	645,624				2,665							$	255,910			$	284,732			$	104,982			$	645,624				2,665

 

* The Company utilizedan aggregate $66.0 million associated with Internal Revenue Code §1031 sales proceeds.

** Includes the Company’sCompany’s previously held equity interest investment.

*** Gross leasable area ("GLA")

 

(1)

The Company acquired from its partners their ownership interest in properties that were held in joint ventures in which the Company had noncontrolling interests. The Company evaluated these transactions pursuant to the FASB’sFASB’s Consolidation guidance and as a result, recognized gains on change in control of interests resulting from the fair value adjustments associated with the Company’s previously held equity interests, which are included in the purchase price above in Other.Other Consideration. The Company’s previous ownership interests and gains on change in control of interests recognized as a result of these transactions are as follows (in millions)thousands):

 

Property Name		Previous Ownership Interest				Gain on change in control of interests
Oakwood Plaza			55.0	%		$	46,512
Gateway Plaza			15.0	%			-
GEPT Portfolio (4 properties)			15.0	%			6,583
KimPru Portfolio (2 properties)			15.0	%			832
Hamden Mart			47.95	%			3,459
						$	57,386

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Property Name						Previous Ownership Interest				Gain on change in control of interests, net
Oakwood Plaza							55.0	%		$	46.5
Gateway Plaza							15.0	%			-
GEPT Portfolio (4 properties)							15.0	%			6.6
KimPru Portfolio (2 properties)							15.0	%			0.8
Hamden Mart							47.95	%			3.5
										$	57.4

During the year ended December 31, 2015, the Company acquired the following properties, in separate transactions (in thousands):

				Purchase Price
Property Name	Location	Month Acquired		Cash*				Debt  Assumed				Other **				Total				GLA***
Elmont Plaza	Elmont, NY (1)	Jan-15		$	2,400			$	-			$	3,358			$	5,758				13
Garden State Pavilion Parcel	Cherry Hill, NJ	Jan-15			16,300				-				-				16,300				111
Kimstone Portfolio (39 properties)	Various (1)	Feb-15			513,513				637,976				236,011				1,387,500				5,631
Copperfield Village	Houston, TX	Feb-15			18,700				20,800				-				39,500				165
Snowden Square Parcel	Columbia, MD	Mar-15			4,868				-				-				4,868				25
Dulles Town Crossing Parcel	Sterling, VA	Mar-15			4,830				-				-				4,830				9
Flagler Park S.C.	Miami, FL	Mar-15			1,875				-				-				1,875				5
West Farms Parcel	New Britain, CT	Apr-15			6,200				-				-				6,200				24
Milleridge Inn	Jericho, NY	Apr-15			7,500				-				-				7,500				-
Woodgrove Festival (2 Parcels)	Woodridge, IL	Jun-15			5,611				-				-				5,611				12
Montgomery Plaza	Fort Worth, TX (1)	Jul-15			34,522				29,311				9,044				72,877				291
125 Coulter Avenue Parcel	Ardmore, PA	Sep-15			1,925				-				-				1,925				6
Conroe Marketplace	Conroe, TX (1)	Oct-15			18,546				42,350				3,104				64,000				289
Laurel Plaza	Laurel, MD	Oct-15			1,200				-				-				1,200				4
District Heights	District Heights, MD (1)	Nov-15			13,140				13,255				950				27,345				91
Village on the Park	Aurora, CO	Nov-15			824				-				-				824				10
Christown Mall	Phoenix, AZ	Nov-15			51,351				63,899				-				115,250				833
Washington St. Plaza Parcels	Brighton, MA	Dec-15			8,750				-				-				8,750				-
				$	712,055			$	807,591			$	252,467			$	1,772,113				7,519

*   The Company utilized $89.5 million associated with Internal Revenue Code §1031 sales proceeds.

** Includes the Company’s previously held equity interest investment.

*** Gross leasable area ("GLA")

(1)

The Company acquired from its partners their ownership interest in properties that were held in joint ventures in which the Company had noncontrolling interests. The Company evaluated these transactions pursuant to the FASB’s Consolidation guidance and as a result, recognized gains on change in control of interests resulting from the fair value adjustments associated with the Company’s previously held equity interests, which are included in the purchase price above in Other. The Company’s previous ownership interests and gains on change in control of interests recognized as a result of these transactions are as follows (in millions):

Property Name		Previous Ownership Interest				Gain on change in control of interests, net
Elmont Plaza			50.0	%		$	(0.2	)
Kimstone Portfolio (39 properties)			33.3	%			140.0
Montgomery Plaza			20.0	%			6.3
Conroe Marketplace			15.0	%			2.4
District Heights			15.0	%			0.7
						$	149.2

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Included in the Company’sCompany’s Consolidated Statements of Income are $31.0 million, $23.8 million $112.2 million and $75.3$112.2 million in revenues from rental properties from the date of acquisition through December 31, 2017, 2016 2015 and 2014,2015, respectively, for operating properties acquired during each of the respective years.

 

Purchase Price Allocations

 

The Company adopted ASU 2017-01 effective January 1, 2017 and applied the guidance to its operating property acquisitions during the year ended December 31, 2017. The purchase price for these acquisitions is preliminarily allocated to real estate and related intangible assets acquired and liabilities assumed, as applicable, in accordance with our accounting policies for business combinations.asset acquisitions. The purchase price allocations and related accounting is finalized upon completion of the Company’s valuation studies. Accordingly, the fair values allocated to these assets and liabilities are subject to revision. The Company records allocation adjustments, where applicable, when purchase price allocations are finalized.

The preliminary allocations, allocation adjustments and revised allocations for properties acquiredacquired/consolidated during the year ended December 31, 2016,2017, are as follows (in thousands):

		Preliminary Allocation				Allocation Adjustments				Revised Allocation as of December 31, 2016				Weighted-Average Amortization Period (in Years)
Land		$	179,150			$	(13,352	)		$	165,798				-
Buildings			309,493				69,581				379,074				50.0
Above-market leases			11,982				(4,304	)			7,678				8.1
Below-market leases			(31,903	)			(4,327	)			(36,230	)			19.1
In-place leases			44,094				(4,162	)			39,932				6.4
Building improvements			124,105				(40,194	)			83,911				45.0
Tenant improvements			12,788				(2,548	)			10,240				7.1
Mortgage fair value adjustment			(4,292	)			(694	)			(4,986	)			4.1
Other assets			234				-				234				-
Other liabilities			(27	)			-				(27	)			-
Net assets acquired		$	645,624			$	-			$	645,624

The allocation adjustments and revised allocations for properties acquired during the year ended December 31, 2015, are as follows (in thousands):

		Allocation as of December 31, 2015				Allocation Adjustments				Revised Allocation as of December 31, 2016				Weighted-Average Amortization Period (in Years)
Land		$	444,626			$	33,918			$	478,544				-
Buildings			1,063,124				(7,980	)			1,055,144				50.0
Above-market leases			34,182				(2,133	)			32,049				7.2
Below-market leases			(74,997	)			(6,306	)			(81,303	)			17.7
In-place leases			125,993				1,425				127,418				4.7
Building improvements			169,116				(20,724	)			148,392				45.0
Tenant improvements			34,814				1,800				36,614				6.1
Mortgage fair value adjustment			(27,615	)			-				(27,615	)			3.0
Other assets			3,058				-				3,058				-
Other liabilities			(188	)			-				(188	)			-
Net assets acquired		$	1,772,113			$	-			$	1,772,113

Other Investments

 

During the year ended December 31, 2015, the Company entered into an agreement to acquire the remaining 50.0% interest in a property previously held in a joint venture in which the Company had a noncontrolling interest for a gross purchase price of $23.0 million. Upon signing this contract, which closed in January 2016, the Company effectively gained control of the entity and is entitled to all economics and risk of loss and as such, the Company consolidated this property pursuant to the FASB’s Consolidation guidance. Additionally, as the Company was required to purchase the partners interest at a fixed and determinable price in January 2016, the Company recognized $11.5 million within Other liabilities in the Company’s Consolidated Balance Sheets at December 31, 2015. Based upon the Company’s intent to redevelop a portion of the property, the Company allocated $8.4 million of the gross purchase price to Real estate under development on the Company’s Consolidated Balance Sheets and the remaining $14.6 million was allocated to Operating real estate on the Company’s Consolidated Balance Sheets.

		Allocation as of December 31, 2017				Weighted-Average Amortization Period (in Years)
Land		$	255,715				n/a
Buildings			379,148				50.0
Building improvements			46,613				41.5
Tenant improvements			14,520				7.2
In-place leases			56,200				7.2
Above-market leases			12,197				7.8
Below-market leases			(77,027	)			29.5
Mortgage fair value adjustment			(8,521	)			1.3
Tax increment financing (TIF) contracts			8,342				19.0
Other assets			5,090				n/a
Other liabilities			(3,951	)			n/a
Net assets acquired/consolidated		$	688,326

 

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, continued

 

DuringAs of December 31, 2017, the allocation adjustments and revised allocations for properties accounted for as business combinations during the year ended December 31, 2015,2016, are as follows (in thousands):

		Allocation as of December 31, 2016				Allocation Adjustments				Revised Allocation as of December 31, 2017				Weighted-Average Amortization Period (in Years)
Land		$	179,150			$	(5,150	)		$	174,000				n/a
Buildings			309,493				(30,696	)			278,797				50.0
Building improvements			124,105				41,895				166,000				45.0
Tenant improvements			12,788				(1,155	)			11,633				7.1
In-place leases			44,094				(1,063	)			43,031				6.4
Above-market leases			11,982				885				12,867				8.1
Below-market leases			(31,903	)			(4,716	)			(36,619	)			19.1
Mortgage fair value adjustment			(4,292	)			-				(4,292	)			4.1
Other assets			234				-				234				n/a
Other liabilities			(27	)			-				(27	)			n/a
Net assets acquired		$	645,624			$	-			$	645,624

Hurricane Impact

The impact of Hurricanes Harvey, which struck Texas on August 25, 2017, and Irma, which struck Florida on September 10, 2017, resulted in minimal damage to the Company acquired three land parcels,’s properties located in separate transactions, for anTexas and Florida, with the majority of the impact related to debris removal.

On September 20, 2017, Hurricane Maria struck Puerto Rico as a Category 4 hurricane which resulted in widespread damage, flooding, and power outages. The Company has interests in seven operating properties located throughout Puerto Rico, aggregating 2.2 million square feet of GLA, which were variously impacted by the hurricane. The Company maintains a comprehensive property insurance policy on these properties with total coverage of up to $62.0 million, as well as business interruption insurance with coverage up to $39.3 million in the aggregate, purchase pricesubject to a collective deductible of $30.0$1.2 million.

 

As of December 31, 2017, the CompanyPro Forma Financial Information (Unaudited)’s assessment of the damages sustained to its properties from Hurricane Maria resulted in a write-off to depreciation expense of $16.0 million, representing the estimated net book value of damaged assets. The Company also recorded a corresponding receivable and credit to depreciation expense of $16.0 million for estimated property insurance recoveries related to the write-off.  As such, there was no impact to net income during 2017 resulting from these adjustments.  The Company expects to collect property insurance proceeds (net of deductible) equal to the replacement cost of its damaged property, currently estimated to be approximately $26.0 million. As of December 31, 2017, the Company received property insurance proceeds of $4.0 million and has a remaining receivable balance of $12.0 million which is included in Other assets on the Company’s Consolidated Balance Sheets.

 

As discussed above,The Company’s business interruption insurance covers lost revenues as a result of the Company and certainhurricane for a period of its subsidiaries acquired interestsup one year. After the expiration of one year following the loss, the policy has 365 days of extended period of indemnity which provides business interruption coverage in certain operatingthe event the properties during 2016 and 2015. The pro forma financial information set forth below is based uponhave not fully recovered from the Company's historical Consolidated Statements of Income forstorm. For the yearsyear ended December 31, 20162017, the Company had a reduction in revenues from rental properties of $3.4 million related to lost tenant revenue and 2015, adjusted to give effect to properties acquired duringrent abatements resulting from the years endedimpact of Hurricane Maria. During December 31, 20162017, the Company received $1.6 million from its insurance provider for business interruption claims. The Company is still in the process of assessing current and 2015, as if they were acquired at the beginning of 2014future business interruption insurance losses and 2013. The pro forma financial information is presentedwill submit insurance claims for informational purposes only and may not be indicative of what actual results of income would have been, nor does it purport to represent the results of income for future periods. (Amounts presented in millions, except per share figures).its estimated losses under its business interruption insurance policy.

 

		Year ended December 31,
		2016				2015				2014
Revenues from rental properties		$	1,174.9			$	1,198.6			$	1,097.8
Net income		$	397.7			$	921.6			$	521.9
Net income available to the Company		$	344.2			$	852.6			$	451.7
Net income available to the Company per common share:
Basic		$	0.82			$	2.07			$	1.10
Diluted		$	0.82			$	2.07			$	1.10

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4.   Real Estate Under Development:KIMCO REALTY CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, continued

4.	Real Estate Under Development:

   

The Company is engaged in various real estate under development projects which will be held asfor long-term investments by the Company.investment. As of December 31, 2016,2017, the Company had in progress a total of sixfour real estate under development projects located in the U.S. Theseand two additional projects will be developed into open-air shopping centers aggregating 2.2 million square feet of GLA with a total estimated aggregate project cost of $514.0 million.

held for future development. The costs incurred to date for these real estate under development projects are as follows (in thousands):

 

				December 31,										December 31,
Property Name	Location			2016				2015				Location		2017				2016
Grand Parkway Marketplace(1)	Spring, TX			$	94,841			$	42,032			Spring, TX		$	43,403			$	94,841
Dania Pointe (1)	Dania Beach, FL				107,113				-			Dania Beach, FL			152,841				107,113
Promenade at Christiana	New Castle, DE				25,521				16,063
Owings Mills	Owings Mills, MD				25,119				8,640
Mill Station												Owings Mills, MD			34,347				25,119
Lincoln Square (2)												Philadelphia, PA			90,479				-
Avenues Walk(3)	Jacksonville, FL				73,048				77,544			Jacksonville, FL			48,573				73,048
Staten Island Plaza (2)	Staten Island, NY				9,386				-
Shoppes at Wynnewood (3)	Lower Merion, PA				-				34,911
Promenade at Christiana (4)												New Castle, DE			32,875				25,521
Staten Island Plaza (5)												Staten Island, NY			-				9,386
				$	335,028			$	179,190					$	402,518			$	335,028

 

(1)

During the year ended December 31, 2016,2017, the Company acquired from its partnersold a land parcel at this development project for a sales price of $2.9 million. Additionally, effective as of September 30, 2017, certain aspects of this development project, aggregating $91.0 million, were placed in service and reclassified into Land and Building and improvements on the Company’s Consolidated Balance Sheets. The remaining ownership interest inportion relates to the second phase of this project which is under development.

(2)

During 2017, KIM Lincoln, LLC (“KIM Lincoln”), a property that was held inwholly owned subsidiary of the Company, and Lincoln Square Property, LP (“Lincoln Member”) entered into a joint venture in which the Companyagreement wherein KIM Lincoln has a 55.0%90% controlling interest and Lincoln Member has a 10% noncontrolling interestinterest. The joint venture acquired land parcels in Philadelphia, PA to be held for development for a gross purchase price of $84.2$10.0 million. The Company evaluated this transaction pursuant to the FASB’s Consolidation guidance and as a result, no gain on change in control of interest was recognized as there was no fair value adjustment associated with the Company’s previously held equity interest. Based upon the Company’sCompany’s intent to develop the property, the Company allocated the gross purchase price to Real estate under development on the Company’s Consolidated Balance Sheets.

(2)

Land held This joint venture is accounted for future development.as a consolidated VIE (see Footnote 9).

(3)

During the year ended December 31, 2016,Effective April 1, 2017, certain aspects of this development project, aggregating $38.0$24.5 million, was completedwere placed in service and reclassified into Land and Building and improvements on the Company’s Consolidated Balance Sheets. The remaining portion of the project consists of a mixed-use project to be developed in the future.

(4)

The Company is assessing the development model for this asset, which may include a mixed-use component, and anticipates a near term delay in the timing of development. As such, the Company considers this project as land held for future development effective December 31, 2017.

(5)

During 2017, the Company reclassified this project to undeveloped land on the Company’s Consolidated Balance Sheets, as it is no longer anticipated to be developed by the Company.

 

During the years ended December 31, 2017 and 2016, the Company capitalized (i) interest of $11.0 million and $6.9 million, (ii) real estate taxes, insurance and legal costs of $5.7 million and $5.2 million and (iii) payroll of $3.3 million and $1.8 million, respectively, in connection with these real estate development projects.

During 2016, the Company acquired from its partner the remaining ownership interest in Dania Pointe, which was held in a joint venture in which the Company has a 55.0% noncontrolling interest for a gross purchase price of $84.2 million. The Company evaluated this transaction pursuant to the FASB’s Consolidation guidance and 2015,as a result, no gain on change in control of interest was recognized as there was no fair value adjustment associated with the Company’s previously held equity interest. Based upon the Company’s intent to develop the property, the Company allocated the gross purchase price to Real estate under development on the Company’s Consolidated Balance Sheets.

During 2016, the Company acquired, in separate transactions, three additional land parcels adjacent to two existing development projects and two additional land parcels adjacent to existing development projects for an aggregate purchase price of $13.8 million and $20.7 million, respectively.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, continued

5.    Dispositions of Real Estateand Assets Held-for-Sale:million.

 

5.	Dispositions of Real Estateand Assets Held-for-Sale:

Operating Real Estate

 

During 2016,The table below summarizes the Company disposed of 30Company's disposition activity relating to consolidated operating properties and two out-parcels,parcels, in separate transactions for an aggregate sales price of $378.7 million. These transactions resulted(dollars in an aggregate gain of $86.8 million, after income tax expense, and aggregate impairment charges of $37.2 million, which were taken prior to sale, before income tax benefit of $10.0 million.millions):

 

During 2015, the Company disposed of 89 consolidated operating properties and eight out-parcels, in separate transactions, for an aggregate sales price of $492.5 million. These transactions resulted in an aggregate gain of $143.6 million, after income tax expense, and aggregate impairment charges of $10.2 million, before income tax benefit of $2.3 million.

		Year Ended December 31,
		2017				2016				2015
Aggregate sales price		$	352.2			$	378.7			$	492.5
Gain on sale, net of tax		$	93.5			$	86.8			$	143.6
Impairment charges		$	17.1			$	37.2			$	10.2
Number of operating properties sold			25				30				89
Number of parcels/out-parcels sold			9				2				8

 

Additionally, during 2015, the Company disposed of its remaining operating property in Chile for a sales price of $51.3 million. This transaction resulted in the release of a cumulative foreign currency translation loss of $19.6 million due to the Company’sCompany’s liquidation of its investment in Chile, offset by a gain on sale of $1.8 million, after income tax expense.

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During 2014, the Company disposed of 90 consolidated operating properties, in separate transactions, for an aggregate sales price of $833.5 million, including 27 operating properties in Latin America. These transactions, which are included in Discontinued operations on the Company’s Consolidated Statements of Income, resulted in an aggregate gain of $203.3 million, before income taxes and noncontrolling interests and aggregate impairment charges of $178.0 million, before income taxes and noncontrolling interests, including $92.9 million related to the release of a cumulative foreign currency translation loss due to the Company’s substantial liquidation of its investment in Mexico. The Company provided financing aggregating $52.7 million on three of these transactions which bore interest at rates ranging from LIBOR plus 250 basis points to 7% per annum, which matured and were repaid in full during 2015. The Company evaluated these transactions pursuant to the FASB’s real estate guidance to determine sale and gain recognition.NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, continued

 

Land SalesSales

 

During 2016 2015 and 2014,2015, the Company sold six 13 and three13 land parcels, respectively, for an aggregate sales price of $3.9 million $31.5 million and $5.1$31.5 million, respectively. These transactions resulted in an aggregate gain of $1.9 million $4.3 million and $3.5$4.3 million, before income taxes expense and noncontrolling interest for the years ended December 31, 2016 2015 and 2014,2015, respectively. The gains from these transactions are recorded as other income, which is included in Other income/(expense),/income, net, in the Company’s Consolidated Statements of Income.

 

Held-for-Sale

 

At December 31, 2016,2017, the Company had twothree consolidated property interests in Mexicoproperties classified as held-for-sale at an aggregate carrying amount of Mexican peso (“MXN”) 121.9$22.4 million, (USD $9.2 million), net of accumulated depreciation of MXN 51.1$16.8 million, (USD $3.5 million), which are included in Other assets on the Company’s Consolidated Balance Sheets. The Company’s determination of the fair value of the properties was based upon executed contracts of sale with third parties. The book valueparties, which are in excess of onethe carrying values of these properties exceeded its estimated fair value, less costs to sell, and as such an impairment charge of MXN 25.8 million (USD $1.3 million) was recognized.

6.   Discontinued Operations:the properties.

 

The components of Income from discontinued operations for the years ended December 31, 2015 and 2014 are shown below. These include the results of income through the date of each respective sale for properties sold during 2014, and the operations for the applicable periods for those assets classified as held-for-sale as of December 31, 2014 (in thousands):

		2015				2014
Discontinued operations:
Revenues from rental properties		$	124			$	71,906
Rental property expenses			(49	)			(16,657	)
Depreciation and amortization			-				(15,019	)
Provision for doubtful accounts			(57	)			(719	)
Interest expense			-				(1,823	)
Income from other real estate investments			-				680
Other expense, net			(12	)			(756	)
Income from discontinued operating properties, before income taxes			6				37,612
Impairment of property carrying value, before income taxes (1)			(82	)			(178,048	)
Gain on disposition of operating properties, before income taxes			-				203,271
Benefit/(provision) for income taxes			1				(11,850	)
(Loss)/income from discontinued operating properties			(75	)			50,985
Net income attributable to noncontrolling interests			-				(2,117	)
(Loss)/income from discontinued operations attributable to the Company		$	(75	)		$	48,868

6.	Impairments:

   

(1) The year ended December 31, 2014, includes $92.9 million related to the release of a cumulative foreign currency translation loss due to the Company’s substantial liquidation of its investment in Mexico.

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M7.    Impairments:

Managementanagement assesses on a continuous basis whether there are any indicators, including property operating performance, changes in anticipated holding period and general market conditions, that the value of the Company’s assets (including any related amortizable intangible assets or liabilities) may be impaired. To the extent impairment has occurred, the carrying value of the asset would be adjusted to an amount to reflect the estimated fair value of the asset.

 

During 2014, theThe Company implemented a plan to acceleratehas an active capital recycling program which provides for the disposition of certain U.S. properties and substantially liquidated its investment, typically of lesser quality assets in Mexico, which resulted inmore undesirable locations. The Company has adjusted the release of a cumulative foreign currency translation loss. These disposition plans effectively shortened the Company’s anticipated hold period for these properties and as a result the Company recognized impairment charges on variouscertain consolidated operating properties (see Footnote 1615 of the Notes to Consolidated Financial Statements for fair value disclosure).

 

The Company’s efforts to market certain assets and management’s assessment as to the likelihood and timing of such potential transactions and/or the property hold period resulted in the Company recognizing impairment charges for the years ended December 31, 2017, 2016 2015 and 20142015 as follows (in millions):

 

		2016				2015				2014
Impairment of property carrying values* (1) (2) (3)		$	93.3			$	30.3			$	33.3
Impairment of investments in other real estate investments* (4)			-				5.3				1.7
Impairment of marketable securities and other investments* (5)			-				9.8				4.8
Total Impairment charges included in operating expenses			93.3				45.4				39.8
Cumulative foreign currency translation loss included in discontinuedoperations (6)			-				-				92.9
Impairment of property carrying values included in discontinued operations**			-				0.1				85.1
Total gross impairment charges			93.3				45.5				217.8
Noncontrolling interests			(0.4	)			(5.6	)			(0.4	)
Income tax benefit included in discontinued operations			-				-				(1.7	)
Income tax benefit			(21.1	)			(9.0	)			(6.1	)
Total net impairment charges		$	71.8			$	30.9			$	209.6

		2017				2016				2015
Impairment of property carrying values* (1) (2) (3)		$	67.3			$	93.3			$	30.3
Impairment of investments in other real estate investments (4)			-				-				5.3
Impairment of marketable securities and other investments (5)			-				-				9.8
Total Impairment charges included in operating expenses			67.3				93.3				45.4
Impairment of property carrying values included in discontinued operations			-				-				0.1
Total gross impairment charges			67.3				93.3				45.5
Noncontrolling interests			-				(0.4	)			(5.6	)
Income tax benefit			-				(21.1	)			(9.0	)
Total net impairment charges		$	67.3			$	71.8			$	30.9

* See Footnote 1615 of the Notes to Consolidated Financial Statements for additional disclosure on fair value

**See Footnotes 5 & 6of the Notes to Consolidated Financial Statements above for additional disclosure

 

(1)

During 2017, the Company recognized aggregate impairment charges of $67.3 million. These impairment charges consist of (i) $34.0 million related to adjustments to property carrying values for properties which the Company has marketed for sale as part of its active capital recycling program and as such has adjusted the anticipated hold periods for such properties, (ii) $17.1 million related to the sale of certain operating properties (as discussed in Footnote 5 of the Notes to Consolidated Financial Statements) and (iii) $16.2 million related to a property for which the Company has re-evaluated its long-term plan for the property due to unfavorable local market conditions.

(2)

During 2016, the Company recognized aggregate impairment charges of $93.3$93.3 million, before an income tax benefit of $21.1 million and noncontrolling interests of $0.4 million, primarily related to sale of certain operating properties, certain properties maintained in the Company’s TRS for which the hold period was re-evaluated in connection with the Merger (see Footnote 2221 of the Notes to Consolidated Financial Statements for additional disclosure) and adjustments to property carrying values in connection with the Company’s efforts to market certain properties and management’s assessment as to the likelihood and timing of such potential transactions and the anticipated hold period for such properties.

(2)(3)

During 2015, the Company recognized aggregate impairment charges of $30.3 million, before an income tax benefit of $5.4$5.4 million and noncontrolling interests of $5.6 million.

(3)	During 2014, the Company recognized aggregate impairment charges of $33.3 million, before an income tax benefit of $6.1 million and noncontrolling interests of $0.3 million.

(4)

Impairment charges were primarily based upon a review of residual values, sales prices and debt maturity status and the likelihood of foreclosure of certain underlying properties within the Company’s preferred equity investments during 2015 and 2014.2015. The Company believesbelieved it willwould not recover its investment in certain preferred equity investments and as such recorded full impairments on these investments.

(5)

During 2015, and 2014, the Company reviewed the underlying cause of the decline in value of certain cost method investments, as well as the severity and the duration of the decline and determined that the decline was other-than-temporary. Impairment charges were recognized based upon the calculation of the investments’ estimated fair value.

(6)	Due to the substantial liquidation of its investment in Mexico, the Company recognized a loss from foreign currency translation related to consolidated properties in the amount of $92.9 million, before noncontrolling interest of $5.8 million.

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In addition to the impairment charges above, the Company recognized pretax impairment charges during 2017, 2016 and 2015 and 2014 of $4.8 million, $15.0 million, and $22.2 million, and $54.5 million (including $47.3 million in cumulative foreign currency translation loss relating to the Company’s substantial liquidation of its investment in Mexico), respectively, relating to certain properties held by various unconsolidated joint ventures in which the Company holds noncontrolling interests. These impairment charges are included in Equity in income of joint ventures, net in the Company’s Consolidated Statements of Income (see Footnote 87 of the Notes to Consolidated Financial Statements).

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The Company will continue to assess the value of its assets on an on-going basis. Based on these assessments, the Company may determine that one or more of its assets may be impaired and would therefore write-down its carrying basis accordingly.

 

8.   Investment and Advances in Real Estate Joint Ventures:

7.	Investment in and Advances to Real Estate Joint Ventures:

   

The Company and its subsidiaries have investments in and advances into various real estate joint ventures. These joint ventures are engaged primarily in the operation of shopping centers which are either owned or held under long-term operating leases. The Company and the joint venture partners have joint approval rights for major decisions, including those regarding property operations. As such, the Company holds noncontrolling interests in these joint ventures and accounts for them under the equity method of accounting.

As of December 31, 2016 and 2015, the Company’s had interests in 135 and 191 shopping center properties, respectively, aggregating 26.2 million and 35.4 million square feet of GLA, respectively, held in joint venture investments. The table below presents unconsolidated joint venture investments for which the Company held an ownership interest at December 31, 20162017 and 20152016 (in millions, except number of properties):

 

		As of December 31, 2016												As of December 31, 2015
Venture		Ownership Interest				Numberof Properties				The Company's Investment				Ownership Interest				Number of Properties				The Company's Investment
Prudential Investment Program (“KimPru” and “KimPru II”) (1) (2)			15.0%				48			$	182.5				15.0%				53			$	175.5
Kimco Income Opportunity Portfolio (“KIR”) (2)			48.6%				45				145.2				48.6%				47				131.0
Canada Pension Plan Investment Board(“CPP”) (2) (3)			55.0%				5				111.8				55.0%				7				195.6
Other Institutional Programs (2)			Various				2				0.4				Various				9				5.2
Other Joint Venture Programs (4)			Various				34				60.4				Various				40				64.0
Canadian Properties			50.0%				1				3.9				Various				35				171.3
Total							135			$	504.2								191			$	742.6

		December 31, 2017											December 31, 2016
Venture		Ownership Interest			Number of Properties				The Company's Investment				Ownership Interest			Number of Properties				The Company's Investment
Prudential Investment Program (“KimPru” and “KimPru II”) (1) (2)		15.0%				46			$	179.5			15.0%				48			$	182.5
Kimco Income Opportunity Portfolio (“KIR”) (2)		48.6%				42				154.1			48.6%				45				145.2
Canada Pension Plan Investment Board (“CPP”) (2) (3)		55.0%				4				105.0			55.0%				5				111.8
Other Joint Venture Programs		Various				26				45.3			Various				37				64.7
Total*						118			$	483.9							135			$	504.2

*	Representing 23.5 million and 26.2 million square feet of GLA as of December 31, 2017 and 2016, respectively.

 

(1)	Represents four separate joint ventures, with four separate accounts managed by Prudential Global Investment Management, (“PGIM”), three of these ventures are collectively referred to as KimPru and the remaining venture is referred to as KimPru II.

(2)	The Company manages these joint venture investments and, where applicable, earns acquisition fees, leasing commissions, property management fees, asset management fees and construction management fees.

(3)	During the year ended December 31, 2016, the CPP joint venture acquired a property interest adjacent to an existing operating property in Temecula, CA for a gross purchase price of $27.5 million.

The table below presents the Company’s share of net income for these investments which is included in Equity in income of joint ventures, net on the Company’s Consolidated Statements of Income (in millions):

		Year Ended December 31,
		2017				2016				2015
KimPru and KimPru II		$	13.0			$	16.4			$	7.1
KIR			36.7				44.0				41.0
CPP			7.2				7.7				9.6
Other Joint Venture Programs (1) (2)			3.9				150.6				422.7
Total		$	60.8			$	218.7			$	480.4

(4)(1)

Includes five land parcels locatedDuring the year ended December 31, 2017, the Company recognized a cumulative foreign currency translation loss of $4.8 million due to the substantial liquidation of the Company’s investments in Mexico.Canada during 2017.

(2)	During the year ended December 31, 2017, a joint venture recognized an impairment charge related to the pending sale of a property, of which the Company’s share was $3.4 million.

 

During the year ended December 31, 2017, the Company’s real estate joint ventures disposed of or transferred interest to joint venture partners in 13 operating properties and a portion of one property, in separate transactions, for an aggregate sales price of $180.8 million. These transactions resulted in an aggregate net gain to the Company of $7.5 million, before income taxes. In addition, during 2017, the Company acquired a controlling interest in three operating properties from certain joint ventures, in separate transactions, with an aggregate gross fair value of $320.1 million. See Footnote 3 of the Notes to Consolidated Financial Statements for the operating properties acquired by the Company.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, continued

 

The table below presents During the Company’s share of net income for these investments which is included in the Company’s Consolidated Statements of Income under Equity in income of joint ventures, net for the yearsyear ended December 31, 2016, 2015 and 2014 (in millions):

		Year Ended December 31,
		2016				2015				2014
KimPru and KimPru II		$	16.4			$	7.1			$	8.1
KIR			44.0				41.0				26.5
CPP			7.7				9.6				7.1
Other Institutional Programs			1.1				4.7				28.8
Other Joint Venture Programs			3.9				14.2				49.7
Canadian Properties			145.6				403.8				39.4
Total		$	218.7			$	480.4			$	159.6

During 2016, the Company’s real estate joint ventures disposed of or transferred interest to joint venture partners in 45 operating properties and one land parcel, in separate transactions, for an aggregate sales price of $1.1 billion. These transactions resulted in an aggregate net gain to the Company of $151.2 million, before income taxes, for the year ended December 31, 2016.taxes. In addition, during 2016, the Company acquired the remaininga controlling interest in nine operating properties and one development project from variouscertain joint ventures, in separate transactions, for awith an aggregate gross purchase pricefair value of $590.1 million. See Footnotes 3 and 4 of the Notes to Consolidated Financial Statements for the operating properties and development projects acquired by the Company.

 

Duringthe year ended December 31, 2015, the Company’s real estate joint ventures disposed of or transferred interest to joint venture partners in 98 operating properties and 11 land parcels, in separate transactions, for an aggregate sales price of $1.8 billion. These transactions resulted in an aggregate net gain to the Company of $380.6 million, before income taxes, for the year ended December 31, 2015.taxes. In addition, during 2015, the Company acquired the remaininga controlling interest in 43 operating properties from variouscertain joint ventures, in separate transactions for awith an aggregate gross purchase pricefair value of $1.6 billion. See Footnote 3 of the Notes to Consolidated Financial Statements for the operating properties acquired by the Company.

During 2014, the Company’s real estate joint ventures disposed of or transferred interest to joint venture partners 37 operating properties, in separate transactions, for an aggregate sales price of $811.7 million. These transactions resulted in an aggregate net gain to the Company of $96.0 million, before income taxes, for the year ended December 31, 2014. In addition, during 2014, the Company acquired the remaining interest in 34 operating properties from various joint ventures, in separate transactions for a gross purchase price of $1.0 billion.

 

The table below presents debt balances within the Company’sCompany’s unconsolidated joint venture investments for which the Company held noncontrolling ownership interests at December 31, 20162017 and 20152016 (dollars in millions):

 

			As ofDecember 31, 2016												As of December 31, 2015												December 31, 2017												December 31, 2016
Venture			Mortgages and Notes Payable				Weighted Average Interest Rate				Weighted Average Remaining Term (months)*				Mortgages and Notes Payable				Weighted Average Interest Rate				Weighted Average Remaining Term (months)*				Mortgages and Notes Payable				Weighted Average Interest Rate				Weighted Average Remaining Term (months)*				Mortgages and Notes Payable				Weighted Average Interest Rate				Weighted Average Remaining Term (months)*
KimPru and KimPru II			$	647.4				3.07	%			67.5			$	777.1				5.54	%			12.6			$	625.7				3.59	%			59.8			$	647.4				3.07	%			67.5
KIR				746.5				4.64	%			54.9				811.6				4.64	%			62.3				702.0				4.60	%			47.5				746.5				4.64	%			54.9
CPP				84.8				2.17	%			16.0				109.9				5.25	%			3.5				84.9				2.91	%			4.0				84.8				2.17	%			16.0
Other Institutional Programs				94.7				4.09	%			19.0				218.5				4.92	%			20.5
Other Joint Venture Programs				482.1				5.67	%			24.5				540.7				5.61	%			36.1				287.6				4.41	%			27.2				584.3				5.40	%			23.4
Canadian Properties				7.5				4.70	%			9.1				341.3				4.64	%			56.4
Total			$	2,063.0											$	2,799.1											$	1,700.2											$	2,063.0

 

* Average remaining term includes extensions

Summarized financial information for the Company’s investment and advances in real estate joint ventures is as follows (in millions):

 

		December 31,
		2017				2016
Assets:
Real estate, net		$	3,402.1			$	3,741.9
Other assets			208.9				224.6
		$	3,611.0			$	3,966.5
Liabilities and Partners’/Members’ Capital:
Notes payable, net		$	233.1			$	214.5
Mortgages payable, net			1,467.1				1,848.5
Other liabilities			52.5				82.3
Noncontrolling interests			15.5				15.9
Partners’/Members’ capital			1,842.8				1,805.3
		$	3,611.0			$	3,966.5

		Year Ended December 31,
		2017				2016				2015
Revenues from rental properties		$	516.0			$	597.5			$	842.5
Operating expenses			(150.7	)			(178.1	)			(265.9	)
Impairment charges			(12.9	)			(38.6	)			(63.4	)
Depreciation and amortization			(116.1	)			(138.1	)			(191.9	)
Interest expense			(81.9	)			(117.3	)			(202.8	)
Other (expense)/income, net			(3.0	)			20.1				4.4
Income from continuing operations			151.4				145.5				122.9
Gain on sale of operating properties, net			26.0				296.2				1,166.7
Net income		$	177.4			$	441.7			$	1,289.6

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, continued

 

Summarized financial information for the Company’s investment and advances in real estate joint ventures is as follows (in millions):

		December 31,
		2016				2015
Assets:
Real estate, net		$	3,741.9			$	4,855.5
Other assets			224.6				279.3
		$	3,966.5			$	5,134.8
Liabilities and Partners’/Members’ Capital:
Notes payable		$	214.5			$	29.7
Mortgages payable and construction loans			1,848.5				2,769.4
Other liabilities			82.3				119.6
Noncontrolling interests			15.9				16.2
Partners’/Members’ capital			1,805.3				2,199.9
		$	3,966.5			$	5,134.8

		Year Ended December 31,
		2016				2015				2014
Revenues from rental properties		$	597.5			$	842.5			$	1,059.9
Operating expenses			(178.1	)			(265.9	)			(333.5	)
Interest expense			(117.3	)			(202.8	)			(247.3	)
Depreciation and amortization			(138.1	)			(191.9	)			(260.0	)
Impairment charges			(38.6	)			(63.4	)			(23.1	)
Other income/(expense), net		20.1					4.4				(14.4	)
			(452.0	)			(719.6	)			(878.3	)
Income from continuing operations			145.5				122.9				181.6
Discontinued Operations:
Income from discontinued operations			-				-				2.8
Impairment on dispositions of properties			-				-				(3.8	)
Gain on dispositions of properties			-				-				471.1
			-				-				470.1
Gain on sale of operating properties			296.2				1,166.7				-
Net income		$	441.7			$	1,289.6			$	651.7

Other liabilities included in the Company’sCompany’s accompanying Consolidated Balance Sheets include accounts with certain real estate joint ventures totaling $11.0$2.1 million and $12.6$11.0 million at December 31, 20162017 and 2015,2016, respectively. The Company and its subsidiaries have varying equity interests in these real estate joint ventures, which may differ from their proportionate share of net income or loss recognized in accordance with GAAP.

 

The Company’sCompany’s maximum exposure to losses associated with its unconsolidated joint ventures is primarily limited to its carrying value in these investments. Generally, such investments contain operating properties and the Company has determined these entities do not contain the characteristics of a VIE. As of December 31, 20162017 and 2015,2016, the Company’s carrying value in these investments iswas $483.9 million and $504.2 million, and $742.6 million, respectively.

 

8.	Other Real Estate Investments and Other Assets:

9.   

Other Real Estate Investments:Investments

 

Preferred Equity Capital –Capital-

 

The Company previously provided capital to owners and developers of real estate properties through its Preferred Equity program.program. The Company’s maximum exposure to losses associated with its preferred equity investments is primarily limited to its net investment. As of December 31, 2017, the Company’s net investment under the Preferred Equity program was $201.9 million relating to 357 properties, including 344 net leased properties which are accounted for as direct financing leases. For the year ended December 31, 2017, the Company earned $32.2 million from its preferred equity investments, including $14.8 million of cumulative foreign currency translation gain recognized as a result of the substantial liquidation of the Company’s investments in Canada during 2017. As of December 31, 2016, the Company’s net investment under the Preferred Equity program was $193.7 million relating to 365 properties, including 346 net leased properties which are accounted for as direct financing leases. For the year ended December 31, 2016, the Company earned $27.5 million from its preferred equity investments, including $10.5 million in profit participation earned from five capital transactions. As of December 31, 2015, the Company’s net investment under the Preferred Equity program was $199.9 million relating to 421 properties, including 385 net leased properties. For the year ended December 31, 2015, the Company earned $27.0 million from its preferred equity investments, including $9.3 million in profit participation earned from nine capital transactions.

 

As of December 31, 2016,2017, these preferred equity investment properties had non-recourse mortgage loans aggregating $427.4$361.0 million. These loans have scheduled maturities ranging from one montheight months to eightseven years and bear interest at rates ranging from 4.19% to 10.47%. Due to the Company’s preferred position in these investments, the Company’s share of each investment is subject to fluctuation and is dependent upon property cash flows. The Company’s maximum exposure to losses associated with its preferred equity investments is limited to its invested capital.

Summarized financial information relating to the Company’s preferred equity investments is as follows (in millions):

 

		December 31,
		2017				2016
Assets:
Real estate, net		$	142.3			$	187.0
Other assets			581.2				587.1
		$	723.5			$	774.1
Liabilities and Partners’/Members’ Capital:
Mortgages payable, net		$	381.9			$	454.7
Other liabilities			6.0				8.3
Partners’/Members’ capital			335.6				311.1
		$	723.5			$	774.1

		Year Ended December 31,
		2017				2016				2015
Revenues from rental properties		$	75.4			$	102.6			$	122.1
Operating expenses			(14.7	)			(27.4	)			(35.6	)
Depreciation and amortization			(4.6	)			(6.7	)			(11.4	)
Interest expense			(20.4	)			(26.7	)			(35.7	)
Other expense, net			(5.9	)			(11.5	)			(9.2	)
Income from continuing operations			29.8				30.3				30.2
Gain on sale of properties, net			4.3				5.3				6.0
Net income		$	34.1			$	35.6			$	36.2

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, continued

 

Summarized financial information relating to the Company’s preferred equity investments is as follows (in millions):Other Assets

 

		December 31,
		2016				2015
Assets:
Real estate, net		$	187.0			$	258.0
Other assets			587.1				628.3
		$	774.1			$	886.3
Liabilities and Partners’/Members’ Capital:
Notes and mortgages payable		$	454.7			$	563.7
Other liabilities			8.3				12.9
Partners’/Members’ capital			311.1				309.7
		$	774.1			$	886.3

		Year Ended December 31,
		2016				2015				2014
Revenues from rental properties		$	102.6			$	122.1			$	146.0
Operating expenses			(27.4	)			(35.6	)			(47.0	)
Interest expense			(26.7	)			(35.7	)			(47.1	)
Depreciation and amortization			(6.7	)			(11.4	)			(19.2	)
Other expense, net			(11.5	)			(9.2	)			(7.2	)
Income from continuing operations			30.3				30.2				25.5
Discontinued Operations:
Gain on disposition of properties			-				-				31.5
			-				-				31.5
Gain on sale of operating properties			5.3				6.0				-
Net income		$	35.6			$	36.2			$	57.0

Kimsouth (Albertsons) –

 

Kimsouth Realty Inc. (“Kimsouth”) is a wholly-owned subsidiary of the Company. KRS AB Acquisition, LLC (the “ABS Venture”) iswas a subsidiary of Kimsouth that hashad a combined 14.35% noncontrolling interest (of which the Company held 9.8% and the two other noncontrolling members in the partnership, including Colony NorthStar, Inc. (“Colony NorthStar”) held a 4.3% ownership interest), in AB Acquisition, LLC (“AB Acquisition”),. AB Acquisition was a joint venture which ownsowned grocery operators Albertsons Inc.LLC (“Albertsons”) and, NAI Group Holdings Inc. (“NAI”) and Safeway Inc. (“Safeway”).  The Company holdsheld a controlling interest in the ABS Venture and consolidatesconsolidated this entity.

During January 2015, two new noncontrolling members were admitted into the ABS Venture, including Colony Capital, Inc. and affiliates (“Colony”), after which the Company contributed $85.3 million and the two noncontrolling members contributed an aggregate $105.0 million, of which Colony contributed $100.0 million, to the ABS Venture, which was subsequently contributed to AB Acquisition to facilitate the acquisition of all of the outstanding shares of Safeway Inc. (“Safeway”). In January 2017, Colony Capital, Inc. merged with NorthStar Asset Management Group Inc. and NorthStar Realty Finance Corp. to form Colony NorthStar, Inc. (“Colony NorthStar”). As a result, the ABS Venture now holds a combined 14.35% interest in AB Acquisition, of which the Company holds a combined 9.8% ownership interest and Colony NorthStar holds a 4.3% ownership interest. Richard B. Saltzman, a member of the Board of Directors of the Company, is the chief executive officer and president of Colony NorthStar. TheAs of December 31, 2016, the ABS Venture was reflected on the Company’s Consolidated Balance Sheets as a gross investment of $205.1 million which was included in Other assets and $64.9 million which was included in noncontrolling interest.

During June 2017, the Company and ABS Venture received an aggregate cash distribution of $34.6 million from Albertsons, of which the Company’s combined companyshare was $23.7 million with the remaining $10.9 million distributed to the two noncontrolling interest members in the ABS Venture. This distribution exceeded the Company’s carrying basis in its Albertson’s investment and as such was recognized as income and is included in Equity in income from other real estate investments, net on the Company’s Consolidated Statements of Income.

During December 2017, Albertsons, NAI and Safeway operates over 2,200 grocery stores across 33 states. Thewere merged into a single corporate entity Albertsons Companies, Inc. (“ACI”).  In addition, the Company continues to consolidateliquidated the ABS Venture, as there was no changeits consolidated partnership with Colony NorthStar and its other noncontrolling member, which held investments in control followingAlbertsons, NAI and Safeway.  As a result of these transactions, the admissionCompany now owns 9.74% of the members described above. As such,common stock of ACI through two newly formed wholly-owned partnerships and accounts for this investment on the Company recorded (i)cost method.  The liquidation of the grossABS Venture resulted in the elimination of the previous noncontrolling member’s, including Colony NorthStar’s noncontrolling interest of $64.9 million, and a corresponding reduction in other assets to reflect the Company’s net investment in SafewayACI of $190.3 million$140.2 million.  The Company’s net investment in ACI is included in Other assets on the Company’s Consolidated Balance SheetsSheets. The previous two noncontrolling members now own their respective interests in ACI directly and accounts for this investment underare no longer in a joint venture partnership with the cost method of accounting (ii) a noncontrolling interest of $65.0 million and (iii) an increase in Paid-in capital of $24.0 million, net of a deferred tax effect of $16.0 million, representing the amount contributed by the newly admitted members in excess of their proportionate share of the historic book value of the net assets of ABS Venture.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, continued

10.  Variable Interest Entities:Company.

 

Consolidated Operating PropertiesOn February 20, 2018, ACI announced the execution of a definitive merger agreement under which ACI will acquire all the outstanding shares of Rite Aid Corp. (NYSE: RAD). This agreement is subject to customary closing conditions.

9.	Variable Interest Entities (“VIE”):

Included within the Company’sCompany’s consolidated operating properties at December 31, 2016,2017, are 2124 consolidated entities that are VIEs, for which the Company is the primary beneficiary. These entities have been established to own and operate real estate property. The Company’s involvement with these entities is through its majority ownership and management of the properties. The entities were deemed VIEs primarily based on the fact thatbecause the unrelated investors do not have substantialsubstantive kick-out rights to remove the general or managing partner by a vote of a simple majority or less and they do not have substantive participating rights. The Company determined that it was the primary beneficiary of these VIEs as a result of its controlling financial interest.

At December 31, 2016,2017, total assets of these VIEs were $902.0 million$1.2 billion and total liabilities were $174.2$383.5 million. The classification of these assets are primarily within operating real estate, cash and cash equivalents and accounts and notes receivable and the classification of these liabilities are primarily within other liabilities and mortgages payable on the Company’s Consolidated Balance Sheets.

 

The majority of the operations of these VIEs are funded with cash flows generated from the properties. The Company has not provided financial support to any of these VIEs that it was not previously contractually required to provide, which consists primarily of funding any capital expenditures, including tenant improvements, which are deemed necessary to continue to operate the entity and any operating cash shortfalls that the entityentity may experience.

ConsolidatedReal Estate Under Development Projects

 

IncludedAdditionally, included within the Company’sCompany’s real estate under development projects at December 31, 2016,2017, are twothree consolidated entities that are VIEs, for which the Company is the primary beneficiary. These entities have been established to develop real estate properties to hold as long-term investments. The Company’s involvement with these entities is through its majority ownership and management of the properties. These entities were deemed VIEs primarily based on the fact thatbecause the equity investments at risk are not sufficient to permit the entities to finance their activities without additional financial support. The initial equity contributed to these entities was not sufficient to fully finance the real estate construction as development costs are funded by the partners throughout the construction period. The Company determined that it was the primary beneficiary of these VIEs as a result of its controlling financial interest.

At December 31, 2016,2017, total assets of these real estate under development VIEs were $183.1$307.9 million and total liabilities were $2.3$34.2 million. The classification of these assets is primarily within Real estate under development in the Company’s Consolidated Balance Sheets and the classification of these liabilities are primarily within Accounts payable and accrued expenses on the Company’s Consolidated Balance Sheets.

 

Substantially all of the projectedremaining development costs to be funded for these real estate development projects, aggregating $68.7$147.7 million, will be funded with capital contributions from the Company, when contractually obligated. The Company has not provided financial support to these VIEs that it was not previously contractually required to provide.

Unconsolidated Redevelopment Investment

Included in the Company’s joint venture investments at December 31, 2016, is an unconsolidated joint venture, which is a VIE for which the Company is not the primary beneficiary. This joint venture was primarily established to develop real estate property for long-term investment and was deemed a VIE primarily based on the fact that the equity investment at risk was not sufficient to permit the entity to finance its activities without additional financial support. The initial equity contributed to this entity was not sufficient to fully finance the real estate construction as development costs are funded by the partners throughout the construction period. The Company determined that it was not the primary beneficiary of this VIE based on the fact that the Company has shared control of this entity along with the entity’s partners and therefore does not have a controlling financial interest.

  

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, continued

 

AsAll liabilities of December 31, 2016, the Company’s investment in this VIE was a negative $7.4 million, duethese VIEs are non-recourse to the fact thatCompany (“VIE Liabilities”). Of the Company had a27 total VIEs, 22 are unencumbered and the assets of these VIEs are not restricted for use to settle only the obligations of these VIEs. The remaining capital commitment obligation, which is included in Otherfive VIEs are encumbered by third party non-recourse mortgage debt. The assets associated with these encumbered VIEs (“Restricted Assets”) are collateral under the respective mortgages and are therefore restricted and can only be used to settle the corresponding liabilities of the VIE. The classification of the Restricted Assets and VIE Liabilities on the Company’s Consolidated Balance Sheets. The Company’s maximum exposure to lossSheets are as a result of its involvement with this VIE is estimated to be $7.4 million, which is the remaining capital commitment obligation. The Company has not provided financial support to this VIE that it was not previously contractually required to provide. All future costs of redevelopment will be funded with capital contributions from the Company and the outside partner in accordance with their respective ownership percentages.follows (in millions):

 

		December 31, 2017				December 31, 2016
Restricted Assets:
Real estate, net		$	627.5			$	326.9
Cash and cash equivalents			9.8				3.8
Accounts and notes receivable, net			3.2				1.6
Other assets			4.5				1.4
Total Restricted Assets		$	645.0			$	333.7
VIE Liabilities:
Mortgages payable, net		$	340.9			$	138.6
Other liabilities			76.8				37.6
Total VIE Liabilities		$	417.7			$	176.2

11.  Mortgages and Other Financing Receivables:

10.	Mortgages and Other Financing Receivables:

   

The Company has various mortgages and other financing receivables which consist of loans acquired and loans originated by the Company. For a complete listing of the Company’sCompany’s mortgages and other financing receivables at December 31, 2016,2017, see Financial Statement Schedule IV included in this annual report on Form 10-K.

 

The following table reconciles mortgage loans and other financing receivables from January 1, 20142015 to December 31, 20162017 (in thousands):

 

		2016				2015				2014				2017				2016				2015
Balance at January 1,		$	23,824			$	74,013			$	30,243
Balance at January 1,														$	23,197			$	23,824			$	74,013
Additions:
New mortgage loans			-				5,730				52,728				-				-				5,730
Write-off of loan discounts			-				-				286
Foreign currency translation			397				-				-				385				397				-
Amortization of loan discounts			112				112				126				112				112				112
Deductions:
Loan repayments			-				(53,646	)			(7,330	)			-				-				(53,646	)
Charge off/foreign currency translation			(213	)			(884	)			(1,066	)			(449	)			(213	)			(884	)
Collections of principal			(921	)			(1,499	)			(972	)			(1,405	)			(921	)			(1,499	)
Amortization of loan costs			(2	)			(2	)			(2	)			(2	)			(2	)			(2	)
Balance at December 31,		$	23,197			$	23,824			$	74,013
Balance at December 31,														$	21,838			$	23,197			$	23,824

 

The Company reviews payment status to identify performing versus non-performing loans. As of December 31, 2016,2017, the Company had a total of 1211 loans, all of which were identified as performing loans.

12.  Marketable Securities:

The amortized cost and gross unrealized gains/(losses) of securities available-for-sale and held-to-maturity at December 31, 2016 and 2015, are as follows (in thousands):

		December 31, 2016
		Amortized Cost				Gross Unrealized Gains				Total
Available-for-sale:
Equity securities		$	6,096			$	406			$	6,502
Held-to-maturity:
Debt securities			1,599				-				1,599
Total marketable securities		$	7,695			$	406			$	8,101

		December 31, 2015
		Amortized Cost				Gross Unrealized Gains/(Losses)				Total
Available-for-sale:
Equity securities		$	5,511			$	398			$	5,909
Held-to-maturity:
Debt securities			1,656				(1	)			1,655
Total marketable securities		$	7,167			$	397			$	7,564

During 2015, the Company received $76.2 million in proceeds from the sale or redemption of certain marketable securities. In connection with these transactions, the Company recognized $39.9 million of realizable gains.

 

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, continued

 

11.	Marketable Securities:

The amortized cost and gross unrealized gains/(losses) of securities available-for-sale and held-to-maturity at December 31, 2017 and 2016, are as follows (in thousands):

		December 31, 2017
		Amortized Cost				Gross Unrealized Losses				Total
Available-for-sale:
Equity securities		$	13,072			$	(1,136	)		$	11,936
Held-to-maturity:
Debt securities			1,329				-				1,329
Total marketable securities		$	14,401			$	(1,136	)		$	13,265

		December 31, 2016
		Amortized Cost				Gross Unrealized Gains				Total
Available-for-sale:
Equity securities		$	6,096			$	406			$	6,502
Held-to-maturity:
Debt securities			1,599				-				1,599
Total marketable securities		$	7,695			$	406			$	8,101

During 2017, the Company acquired available-for-sale marketable equity securities for an aggregate purchase price of $9.8 million. 

During 2015, the Company received $76.2 million in proceeds from the sale or redemption of certain marketable securities and recognized $39.9 million of realizable gains.

As of December 31, 2016,2017, the contractual maturities of debt securities classified as held-to-maturity are within the next five years. Actual maturities may differ from contractual maturities as issuers may have the right to prepay debt obligations with or without prepayment penalties.

 

13.  Notes Payable:

12.	Notes Payable:

   

As of December 31, 20162017 and 20152016 the Company’s Notes payable, net consisted of the following (dollars in millions):

 

																						Carrying Amount at December 31,								Interest Rate at December 31,										Maturity Date at
		Balance at 12/31/16				Interest Rate Range (Low)				InterestRate Range (High)				Maturity Date Range (Low)				Maturity Date Range (High)				2017				2016				2017					2016					December 31, 2017
Senior Unsecured Notes		$	3,400.0				2.70%				6.88%				Oct-2019				Dec-2046			$	4,650.0			$	3,400.0			2.70%	-	6.88%			2.70%	-	6.88%			Oct-2019	–	Sep-2047
Medium Term Notes (“MTN”)			300.0				4.30%				4.30%				Feb-2018				Feb-2018
Term Loan (a)			250.0				(a)				(a)				Jan-2017				Jan-2017
Credit Facility (b)			25.0				(b)				(b)				Mar-2018 (b)				Mar-2018 (b)
Deferred financing costs, net			(47.7	)			-				-				-				-
Credit Facility																							8.0				25.0				(a)					(a)					Mar-2021
Medium Term Notes (“MTN”)																							-				300.0				-					4.30%					n/a
Term Loan																							-				250.0				-					(b)					n/a
Deferred financing costs, net																							(61.9	)			(47.7	)			n/a					n/a					n/a
		$	3,927.3																			$	4,596.1			$	3,927.3				3.70%*					3.58%*

			Balance at 12/31/15				Interest Rate Range (Low)				Interest Rate Range (High)				Maturity Date Range (Low)				Maturity Date Range (High)
Senior Unsecured Notes			$	2,290.9				3.13%				6.88%				May-2017				Apr-2045
MTN				600.0				4.30%				5.78%				Mar-2016				Feb-2018
Term Loan (a)				650.0				(a)				(a)				Jan-2017				Jan-2017
Canadian Notes Payable				251.8				3.86%				5.99%				Apr-2018				Aug-2020
Credit Facility (b)				-				(b)				(b)				Mar-2018 (b)				Mar-2018 (b)
Deferred financing costs, net				(31.4	)			-				-				-				-
			$	3,761.3

* Weighted-average interest rate

(a)

Interest rate is equal to LIBOR + 0.95% (1.60% and 1.37% at December 31, 2016 and 2015, respectively). During January 2017, the Company repaid the $250.0 million outstanding balance on the Term Loan and terminated the agreement.

(b)

Interest rate is equal to LIBOR + 0.925% (1.67% and 1.35% at December 31, 2016 and 2015, respectively). During February 2017, the Company repaid the outstanding balance on the Credit FacilityCompany’s $1.75 billion credit facility and terminated the agreement. Interest rate was equal to LIBOR plus 0.925% (1.67% at December 31, 2016). The Company then closed on a new $2.25 billion unsecured revolving credit facility which is scheduled to mature in March 2021, with two additional six-month extension options to extend the maturity date, and accrues interest at an interesta rate of LIBOR plus 87.5 basis points.0.875% (2.28% at December 31, 2017).

(b)	During January 2017, the Company repaid the remaining $250.0 million balance and terminated the agreement. Interest rate was equal to LIBOR plus 0.95% (1.60% at December 31, 2016).

 

The weighted-average interest rate for all unsecured notes payable is 3.58% as ofDuring the years ended December 31, 2016. The scheduled maturities2017 and 2016, the Company issued the following Senior Unsecured Notes (dollars in millions):

Date Issued		Maturity Date		Amount Issued				Interest Rate
Aug-17		Feb-25		$	500.0				3.30%
Aug-17		Sep-47		$	350.0				4.45%
Mar-17		Apr-27		$	400.0				3.80%
Nov-16		Mar-24		$	400.0				2.70%
Nov-16		Dec-46		$	350.0				4.125%
Aug-16		Oct-26		$	500.0				2.80%
May-16		Apr-45		$	150.0				4.25%

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Table of all unsecured notes payable excluding unamortized debt issuance costs of $47.7 million, as of December 31, 2016, were as follows (in millions): 2017, $250.0; 2018, $325.0; 2019, $300.0; 2020, $0.0; 2021, $500.0 and thereafter, $2,600.0.Contents

KIMCO REALTY CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, continued

 

During the years ended December 31, 20162017 and 2015,2016, the Company repaid the following notes (dollars in millions):

 

Type	Date Paid		Maturity Date				Amount Repaid (USD)				Interest Rate					Date Paid			Amount Repaid (USD)				Interest Rate			Maturity Date
Canadian Notes Payable (1)	Aug-16		(1)				$	270.9				(1)
Senior Unsecured Note (2)	Aug-16		May-17				$	290.9				5.70%
MTN (1)																Aug-17 & Nov-17			$	300.0			4.300%			Feb-18
Term Loan																Jan-17			$	250.0			LIBOR + 0.95%			Jan-17
Canadian Notes Payable (2)																Aug-16			$	270.9			(2)			(2)
Senior Unsecured Note (3)																Aug-16			$	290.9			5.700%			May-17
MTN	Mar-16		Mar-16				$	300.0				5.783%				Mar-16			$	300.0			5.783%			Mar-16
MTN	Nov-15		Nov-15				$	150.0				5.584%
Senior Unsecured Note	Sep-15		Sep-15				$	100.0				5.25%
MTN	Feb-15		Feb-15				$	100.0				4.904%

 

(1)

On August 1, 2017, the Company made a tender offer to purchase any and all of these MTN notes outstanding. As a result, the Company accepted the tender of $211.0 million of its $300.0 million outstanding MTN notes on August 10, 2017. In connection with this tender offer, the Company recorded a tender premium of $1.8 million resulting from the partial repayment of the MTN notes. In addition, in November 2017, the Company redeemed the remaining $89.0 million outstanding MTN notes.

(2)

On August 26, 2016, the redemption date, the Company repaid (i) its Canadian denominated (“CAD”) $150.0 million 5.99% notes, which were scheduled to mature in April 2018 and (ii) its CAD $200.0 million 3.855% notes, which were scheduled to mature in August 2020. The Company recorded aggregate early extinguishment of debt charges of CAD $34.1 million (USD $26.3 million) resulting from the early repayment of these notes.

(2)(3)

The Company recorded an early extinguishment of debt charge of $10.2 million resulting from the early repayment of this note.

 

The scheduled maturities of all unsecured notes payable excluding unamortized debt issuance costs of $61.9 million, as of December 31, 2017, were as follows (in millions):

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		2018				2019				2020				2021				2022				Thereafter				Total
Principal payments		$	-			$	300.0			$	-			$	508.0			$	500.0			$	3,350.0			$	4,658.0

 

KIMCO REALTY CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, continued

TSenior Unsecured Notes / MTN –

Thehe Company’s supplemental indentures governing its MTN andSeniorSenior Unsecured Notes contain covenants whereby the CompanyisCompany is subject to maintaining (a) certain maximum leverage ratios on both unsecured senior corporate and secured debt, minimum debt service coverage ratios and minimum equity levels, (b) certain debt service ratios and (c) certain asset to debt ratios. In addition, the Company is restricted from paying dividends in amounts that exceed by more than $26.0 million the funds from operations, as defined, generated through the end of the calendar quarter most recently completed prior to the declaration of such dividend; however, this dividend limitation does not apply to any distributions necessary to maintain the Company's qualification as a REIT providing the Company is in compliance with its total leverage limitations. The Company was in compliance with all of the covenants as of December 31, 2016.   2017.   

 

Interest on the Company’s fixed-rate senior unsecured notes and medium term notesSenior Unsecured Notes is payable semi-annually in arrears. Proceeds from these issuances were primarily used for the acquisition of shopping centers, the expansion and improvement of properties in the Company’s portfolio and the repayment of certain debt obligations of the Company.

The Company had a MTN program pursuant to which it offered for sale its senior unsecured debt for any general corporate purposes, including (i) funding specific liquidity requirements in its business, including property acquisitions, development and redevelopment costs and (ii) managing the Company's debt maturities.

During the years ended December 31, 2016 and 2015, the Company issued the following Senior Unsecured Notes (dollars in millions):

Date Issued	Maturity Date		Amount Issued				Interest Rate
Nov-16	Mar-24		$	400.0				2.7%
Nov-16	Dec-46		$	350.0				4.125%
Aug-16	Oct-26		$	500.0				2.8%
May-16	Apr-45		$	150.0				4.25%
Oct-15	Nov-22		$	500.0				3.40%
Mar-15	Apr-45		$	350.0				4.25%

The Company used the net proceeds from these issuances, after the underwriting discounts and related offering costs, for general corporate purposes, including to pre-fund near-term debt maturities or to reduce borrowings under the Company’s revolving credit facility.

Credit Facility –

 

TheCredit Facility

In February 2017, the Company hadclosed on a $1.75$2.25 billion unsecured revolving credit facility (the “Credit Facility”) with a group of banks, which wasis scheduled to expire in March 20182021, with two additional six monthsix-month options to extend the maturity date, at the Company’s discretion, to March 2019. The2022. This Credit Facility, which could be increased to $2.25 billion through an accordion feature, accruedaccrues interest at a rate of LIBOR plus 92.587.5 basis points (1.67%(2.28% as of December 31, 2016) on drawn funds.2017), can be increased to $2.75 billion through an accordion feature. The Credit Facility replaced the Company’s $1.75 billion unsecured revolving credit facility that was scheduled to mature in March 2018. In addition, the Credit Facility includedincludes a $500$500.0 million sub-limit which providedprovides the Company the opportunity to borrow in alternative currencies including Canadian Dollars, British Pounds Sterling, Japanese Yen or Euros. Pursuant to the terms of the Credit Facility, the Company, among other things, wasis subject to covenants requiring the maintenance of (i) maximum leverage ratios on both unsecured and secured debt and (ii) minimum interest and fixed coverage ratios. The Company was in compliance with all of the covenants as of December 31, 2016. As of December 31, 2016,2017, the Credit Facility had a balance of $25.0CAD 10.0 million (USD $8.0 million) outstanding and $0.7$0.5 million appropriated for letters of credit.

In February 2017, the Company closed on a new $2.25 billion unsecured revolving credit facility with a group of banks, which is scheduled to expire in March 2021, with two additional six month options to extend the maturity date, at the Company’s discretion, to March 2022. This new credit facility, which accrues interest at a rate of LIBOR plus 87.5 basis points, could be increased to $2.75 billion through an accordion feature. The new credit facility replaces the Company’s $1.75 billion Credit Facility that was scheduled to mature in March 2018. In addition, the facility includes a $500.0 million sub-limit which provides the company the opportunity to borrow in alternative currencies including Canadian Dollars, British Pounds Sterling, Japanese Yen or Euros. Under this new credit facility, the Company continues to be subject to certain covenants as in the Credit Facility described above.

 

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, continued

 

Term Loan -

 

During January 2015, theThe Company entered intohad a $650.0 million unsecured term loan (“Term Loan”) which had an initial maturity datewas scheduled to mature in January 2017, (withwith three one-year extension options at the Company’s discretion) and accrued interest at a spread (95 basis points at December 31, 2016) to LIBOR or at the Company’s option at a base rate as defined per the agreement (1.60% at December 31, 2016).discretion. The proceeds from the Term Loan were used to repay the Company’s $400.0 million term loan, which was scheduled to mature in April 2015 (with two additional one-year extension options) and boreaccrued interest at LIBOR plus 10595 basis points, and for general corporate purposes.points. During November 2016, the Company repaid $400.0 million of borrowings under the Company’s Term Loan.Loan and in January 2017, the Company repaid the remaining $250.0 million balance and terminated the agreement.

13.	Mortgages Payable:

Mortgages payable, collateralized by certain shopping center properties (see Financial Statement Schedule III included in this annual report on Form 10-K) and related tenants' leases, are generally due in monthly installments of principal and/or interest. As of December 31, 2017 and 2016, the Term Loan had a balance of $250.0 million. Pursuant to the termsCompany’s Mortgages payable, net consisted of the credit agreement for the Term Loan, the Company, among other things, was subject to covenants requiring the maintenance of (i) maximum indebtedness ratios and (ii) minimumfollowing (in millions):

		Carrying Amount at December 31,								Interest Rate at December 31,										Maturity Date at
		2017				2016				2017					2016					December 31, 2017
Mortgages payable		$	867.1			$	1,114.4			2.60%	-	9.75%			1.91%	-	9.41%			Jan-2018	–	Aug-2031
Fair value debt adjustments, net			19.3				27.7				n/a					n/a					n/a
Deferred financing costs, net			(3.6	)			(3.0	)			n/a					n/a					n/a
		$	882.8			$	1,139.1				4.57%*					4.94%*

* Weighted-average interest and fixed charge coverage ratios. The Company was in compliance with all of the covenants as of December 31, 2016. rate

During January 2017, the Company (i) assumed/consolidated $257.5 million of individual non-recourse mortgage debt (including a fair market value adjustment of $8.5 million) related to two operating properties, (ii) paid the remaining $250.0off $692.9 million outstanding balance on the Company’s Term Loanof mortgage debt (including fair market value adjustments of $5.8 million) that encumbered 27 operating properties and terminated the agreement.

14.  Mortgages Payable:(iii) obtained a $206.0 million non-recourse mortgage relating to one operating property.

 

During 2016, the Company (i) assumed $289.0 million of individual non-recourse mortgage debt relating to the acquisition of 10 properties, including $4.3 million associated with fair value debt adjustments and (ii) paid off $703.0 million of mortgage debt (including fair market value adjustment of $2.1 million) that encumbered 47 operating properties. In connection with the early prepayment of certain of these mortgage debts,s, the Company recorded an early extinguishment of debt charge of $9.2 million.

 

Additionally, during 2016, the Company disposed of an encumbered property through foreclosure. This transaction resulted in a net decrease in mortgage debt of $25.6 million (including fair market value adjustment of $0.4 million) and a gain on forgiveness of debt of $3.1 million, which is included in Other income/(expense),/income, net in the Company’s Consolidated Statements of Income.

 

During 2015, the Company (i) assumed $835.2 million of individual non-recourse mortgage debt relating to the acquisition of 38 operating properties, including an increase of $27.6 million associated with fair value debt adjustments and (ii) repaid $557.0 million of mortgage debt (including fair market value adjustment of $1.4 million) that encumbered 27 operating properties.

Mortgages payable, collateralized by certain shopping center properties (see Financial Statement Schedule III included in this annual report on Form 10-K) and related tenants' leases, are generally due in monthly installments of principal and/or interest, which mature at various dates through 2031. Interest rates range from LIBOR plus 135 basis points (1.91% as of December 31, 2016) to 9.75% (weighted-average interest rate of 4.94% as of December 31, 2016). The scheduled principal payments (excluding any extension options available to the Company) of all mortgages payable, excluding unamortized fair value debt adjustments of $27.7 million and unamortized debt issuance costs, of $3.0 million, as of December 31, 2016,2017, were as follows (in millions): 2017, $462.4; 2018, $124.4; 2019, $115.9; 2020, $101.2; 2021, $145.4 and thereafter, $165.1.

 

		2018				2019				2020				2021				2022				Thereafter				Total
Principal payments		$	98.4			$	115.7			$	136.4			$	145.4			$	140.6			$	230.6			$	867.1

15.  Noncontrolling Interests:

14.	Noncontrolling Interests:

 

Noncontrolling interests represent the portion of equity that the Company does not own in those entities it consolidates as a result of having a controlling interest or determined that the Company was the primary beneficiary of a VIE in accordance with the provisions of the FASB’sFASB’s Consolidation guidance.  

The Company accounts and reports for noncontrolling interests in accordance with the Consolidation guidance and the Distinguishing Liabilities from Equity guidance issued by the FASB. The Company identifies its noncontrolling interests separately within the equity section on the Company’s Consolidated Balance Sheets. Units that are determined to be contingently redeemable are classified as Redeemable noncontrolling interests and presented in the mezzanine section between Total liabilities and Stockholder’s equity on the Company’s Consolidated Balance Sheets. The amounts of consolidated net income attributable to the Company and to the noncontrolling interests are presented separately on the Company’s Consolidated Statements of Income.  During the year ended December 31, 2017, there were various acquisitions and dispositions/liquidations of entities that had an impact on noncontrolling interest. See Footnotes 3, 4, and 8 of the Notes to Consolidated Financial Statements for additional information regarding specific transactions.

 

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Included within noncontrolling interests are units that were determined to be contingently redeemable that are classified as Redeemable noncontrolling interests and presented in the mezzanine section between Total liabilities and Stockholder’s equity on the Company’s Consolidated Balance Sheets.

The following table presents the change in the redemption value of the Redeemable noncontrolling interests for the years ended December 31, 2017 and 2016 (in thousands):

		2017				2016
Balance at January 1,		$	86,953			$	86,709
Issuance of redeemable partnership interests (1)			10,000				-
Income (2)			1,297				4,349
Redemption/conversion of redeemable units (3)			(79,569	)			-
Distributions			(2,538	)			(4,105	)
Balance at December 31,		$	16,143			$	86,953

(1)

During 2017, KIM Lincoln, a wholly owned subsidiary of the Company, and Lincoln Member entered into a joint venture agreement wherein KIM Lincoln has a 90% controlling interest and Lincoln Member has a 10% noncontrolling interest (See Footnote 4 of the Notes to Consolidated Financial Statements).

(2)

Includes $1.0 million in fair market value remeasurement for the year ended December 31, 2017.

(3)

During 2017, the Company redeemed the remaining 79,642,697 Preferred A Units for a total redemption price of $79.9 million, including an accrued preferred return of $0.4 million. These units, which had a par value of $1.00 and return per annum of 5.0%, were issued along with Puerto Rico shopping center acquisitions discussed below.

The Company owns seven shopping center properties located throughout Puerto Rico. These properties were acquired partially through the issuance of $158.6 million of non-convertible units and $45.8 million of convertible units. Noncontrolling interests related to these acquisitions totaled $233.0 million of units, including premiums of $13.5 million and a fair market value adjustment of $15.1 million (collectively, the "Units"). Noncontrolling interests relating to the remaining units was $86.2were $5.2 million and $88.9$86.2 million as of December 31, 20162017 and 2015,2016, respectively. The Units, related annual cash distribution rates and related conversion features consisted of the following as of December 31, 2016 and 2015:2017:

 

Type			Par Value Per Unit				Number of Units Remaining				Return Per Annum
Preferred A Units (1)			$	1.00				79,642,697				5.0%
Class B-1 Preferred Units (2)			$	10,000				189				7.0%
Class B-2 Preferred Units (1)			$	10,000				42				7.0%
Class C DownReit Units (2)			$	30.52				52,797			Equal to the Company’s common stock dividend

Type		Par Value Per Unit				Number of Units Remaining				Return Per Annum
Class B-1 Preferred Units (1)		$	10,000				189			7.0%
Class B-2 Preferred Units (2)		$	10,000				42			7.0%
Class C DownReit Units (1)		$	30.52				52,797			Equal to the Company’s common stock dividend

 

(1)

These units are redeemable for cash by the holder or callable byat the Company and are included in Redeemable noncontrolling interests on the Company’s Consolidated Balance Sheets.

(2)

These units are redeemable for cash by the holder or at the Company’s’s option, shares of the Company’s common stock, based upon the conversion calculation as defined in the agreement. These units are included in Noncontrolling interests on the Company’s Consolidated Balance Sheets.

(2)

These units are redeemable for cash by the holder or callable by the Company and are included in Redeemable noncontrolling interests on the Company’s Consolidated Balance Sheets.

 

TheThe Company owns a shopping center located in Bay Shore, NY, which was acquired in 2006 with the issuance of 647,758 redeemable Class B Units at a par value of $37.24 per unit. The units accrue a return equal to the Company’s common stock dividend and are redeemable for cash by the holder or at the Company’s option, shares of the Company’s common stock at a ratio of 1:1. These units are callable by the Company any time after April 3, 2026, and are included in Noncontrolling interests on the Company’s Consolidated Balance Sheets. During 2007, 30,000 units, or $1.1 million par value, of the Class B Units were redeemed and at the Company’s option settled in cash. In addition, during 2017, 25,000 units, or $0.9 million par value, of the Class B Units were redeemed and at the Company’s option settled in cash. As of both December 31, 20162017 and 2015,2016, noncontrolling interest relating to the remaining Class B Units was $25.4 million and $26.5 million.million, respectively.

 

Noncontrolling interests also includes 138,015 convertible units issued during 2006 by the Company, which were valued at $5.3 million, including a fair market value adjustment of $0.3 million, related to an interest acquired in an office building located in Albany, NY. These units are currently redeemable at the option of the holder for cash or at the option of the Company for the Company’s common stock at a ratio of 1:1. The holder is entitled to a distribution equal to the dividend rate of the Company’s common stock. The Company iswas restricted from disposing of these assets, other than through a tax freetax-free transaction, through January 2017.

The following table presents the change in the redemption value of the Redeemable noncontrolling interests for the years ended December 31, 2016 and 2015 (in thousands):

		2016				2015
Balance at January 1,		$	86,709			$	91,480
Income (1)			4,349				7,061
Distribution			(4,105	)			(5,922	)
Conversion of redeemable units			-				(5,910	)
Balance at December 31,		$	86,953			$	86,709

(1)

Includes $1.0 million in fair market value remeasurement for the year ended December 31, 2015.

During the year ended December 31, 2015, the Company acquired its partner’s interest in three previously consolidated joint ventures for $31.6 million. The Company continues to consolidate these entities as there was no change in control from these transactions. The purchase of the remaining interests resulted in an aggregate decrease in noncontrolling interest of $25.2 million for the year ended December 31, 2015, and a net decrease of $6.4 million to the Company’s Paid-in capital, during 2015.

 

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, continued

 

16.  Fair Value Disclosure of Financial Instruments:

15.	Fair Value Disclosure of Financial Instruments:

 

All financial instruments of the Company are reflected in the accompanying Consolidated Balance Sheets at amounts which, in management’s estimation, based upon an interpretation of available market information and valuation methodologies, reasonably approximate their fair values except those listed below, for which fair values are disclosed. The valuation method used to estimate fair value for fixed-rate and variable-rate debt is based on discounted cash flow analyses, with assumptions that include credit spreads, market yield curves, trading activity, loan amounts and debt maturities. The fair values for marketable securities are based on published values, securities dealers’ estimated market values or comparable market sales. Such fair value estimates are not necessarily indicative of the amounts that would be realized upon disposition.

 

As a basis for considering market participant assumptions in fair value measurements, the FASB’sFASB’s Fair Value Measurements and Disclosures guidance establishes a fair value hierarchy that distinguishes between market participant assumptions based on market data obtained from sources independent of the reporting entity (observable inputs that are classified within Levels 1 and 2 of the hierarchy) and the reporting entity’s own assumptions about market participant assumptions (unobservable inputs classified within Level 3 of the hierarchy).

 

The following are financial instruments for which the Company’sCompany’s estimate of fair value differs from the carrying amounts (in thousands):

 

		December 31,
		2016								2015
		Carrying Amounts				Estimated Fair Value				Carrying Amounts				Estimated Fair Value
Marketable securities (1)		$	8,101			$	8,101			$	7,565			$	7,564
Notes payable (2)		$	3,927,251			$	3,890,797			$	3,761,328			$	3,820,205
Mortgages payable (3)		$	1,139,117			$	1,141,047			$	1,614,982			$	1,629,760

		December 31,
		2017								2016
		Carrying Amounts				Estimated Fair Value				Carrying Amounts				Estimated Fair Value
Notes payable (1)		$	4,596,140			$	4,601,479			$	3,927,251			$	3,890,797
Mortgages payable (2)		$	882,787			$	881,427			$	1,139,117			$	1,141,047

 

(1)

As of December 31, 2016 and 2015, theThe Company determined that $6.5 millionthe valuation of its Senior Unsecured Notes and $5.9 million, respectively, of the Marketable securities estimated fair valueMTN notes were classified within Level 12 of the fair value hierarchy and the remaining $1.6 millionits Term Loan and $1.7 million, respectively,Credit Facility were classified within Level 3 of the fair value hierarchy. The estimated fair value amounts classified as Level 2 as of December 31, 2017 and 2016, were $4.6 billion and $3.6 billion, respectively. The estimated fair value amounts classified as Level 3 as of December 31, 2017 and 2016, were $1.9 million and $272.5 million, respectively.

(2)

The Company determined that its valuation of the Senior Unsecured Notes and MTNs were classified within Level 2 of the fair value hierarchy and the Term Loan and Credit Facility were classified within Level 3 of the fair value hierarchy.

(3)

The Company determined that its valuation of these Mortgages payable was classified within Level 3 of the fair value hierarchy.

 

The Company has certain financial instruments that must be measured under the FASB’sFASB’s Fair Value Measurements and Disclosures guidance, including available for sale securities. The Company currently does not have non-financial assets and non-financial liabilities that are required to be measured at fair value on a recurring basis.

 

In instances where the determination of the fair value measurement is based on inputs from different levels of the fair value hierarchy, the level in the fair value hierarchy within which the entire fair value measurement falls is based on the lowest level input that is significant to the fair value measurement in its entirety. The Company’sCompany’s assessment of the significance of a particular input to the fair value measurement in its entirety requires judgment, and considers factors specific to the asset or liability.

 

The Company from time to time has used interest rate swaps to manage its interest rate risk. The fair values of interest rate swaps are determined using the market standard methodology of netting the discounted future fixed cash receipts (or payments) and the discounted expected variable cash payments (or receipts).  The variable cash payments (or receipts) are based on an expectation of future interest rates (forward curves) derived from observable market interest rate curves.  Based on these inputs, the Company has determined that interest rate swap valuations are classified within Level 2 of the fair value hierarchy.

The tables below present the Company’s financial assets and liabilities measured at fair value on a recurring basis as of December 31, 2016 and 2015, aggregated by the level in the fair value hierarchy within which those measurements fall (in thousands):

		Balance at December 31, 2016				Level 1				Level 2				Level 3
Assets:
Marketable equity securities		$	6,502			$	6,502			$	-			$	-
Liabilities:
Interest rate swaps		$	975			$	-			$	975			$	-

 

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, continued

 

		Balance at December 31, 2015				Level 1				Level 2				Level 3
Assets:
Marketable equity securities		$	5,909			$	5,909			$	-			$	-
Liabilities:
Interest rate swaps		$	1,426			$	-			$	1,426			$	-

The tables below present the Company’s financial assets and liabilities measured at fair value on a recurring basis as of December 31, 2017 and 2016, aggregated by the level in the fair value hierarchy within which those measurements fall (in thousands):

		Balance at December 31, 2017				Level 1				Level 2				Level 3
Assets:
Marketable equity securities		$	11,936			$	11,936			$	-			$	-
Liabilities:
Interest rate swaps		$	344			$	-			$	344			$	-

		Balance at December 31, 2016				Level 1				Level 2				Level 3
Assets:
Marketable equity securities		$	6,502			$	6,502			$	-			$	-
Liabilities:
Interest rate swaps		$	975			$	-			$	975			$	-

 

Assets measured at fair value on a non-recurring basis at December 31, 20162017 and 20152016 are as follows (in thousands):

 

		Balance at December 31, 2016				Level 1				Level 2				Level 3
Real estate		$	117,930			$	-			$	-			$	117,930

		Balance at December 31, 2017				Level 1				Level 2				Level 3
Real estate		$	108,313			$	-			$	-			$	108,313

 

		Balance at December 31, 2015				Level 1				Level 2				Level 3
Real estate		$	52,439			$	-			$	-			$	52,439

		Balance at December 31, 2016				Level 1				Level 2				Level 3
Real estate		$	117,930			$	-			$	-			$	117,930

During the year ended December 31, 2017, the Company recognized impairment charges related to adjustments to property carrying values of $67.3 million. The Company’s estimated fair values of these properties were primarily based upon estimated sales prices from (i) signed contracts or letters of intent from third party offers or (ii) discounted cash flow models. The Company does not have access to the unobservable inputs used to determine the estimated fair values of third party offers. For the discounted cash flow models, the capitalization rates primarily range from 8.50% to 9.50% and discount rates primarily range from 9.00% to 10.50% which were utilized in the models based upon unobservable rates that the Company believes to be within a reasonable range of current market rates for each respective investment. Based on these inputs, the Company determined that its valuation of these investments was classified within Level 3 of the fair value hierarchy.

 

During the year ended December 31, 2016, the Company recognized impairment charges related solely to adjustments to property carrying values of $93.3 million. The Company’s estimated fair values were primarily based upon estimated sales prices from third party offers that were based on signed contracts, appraisals or letters of intent for which the Company does not have access to the unobservable inputs used to determine these estimated fair values. For the appraisals, the capitalization rates primarily range from 7.75% to 9.00% and discount rates primarily range from 9.25% to 12.17% which were utilized in the models based upon unobservable rates that the Company believes to be within a reasonable range of current market rates for each respective investment. Based on these inputs, the Company determined that its valuation of these investments was classified within Level 3 of the fair value hierarchy.

 

During the year ended December 31, 2015, the Company recognized impairment charges of $45.5 million, of which $0.1 million, before noncontrolling interests and income taxes, is included in discontinued operations. These impairment charges consist of (i) $20.2 million related to adjustments to property carrying values, (ii) $10.2 million related to the sale of operating properties, (iii) $9.0 million related to a cost method investment, (iv) $5.3 million related to certain investments in other real estate investments and (v) $0.8 million related to marketable debt securities investments.

The Company’s estimated fair values for the year ended December 31, 2015, as it relates to property carrying values were primarily based upon (i) estimated sales prices from third party offers based on signed contracts or letters of intent (this method was used to determine $5.7 million of the $20.2 million in impairments recognized during the year ended December 31, 2015), for which the Company does not have access to the unobservable inputs used to determine these estimated fair values, (ii) third party appraisals (this method was used to determine $8.9 million of the $20.2 million in impairments recognized during the year ended December 31, 2015) and (iii) discounted cash flow models (this method was used to determine $5.6 million of the $20.2 million in impairments recognized during the year ended December 31, 2015). The discounted cash flow models include all estimated cash inflows and outflows over a specified holding period. These cash flows were comprised of unobservable inputs which include forecasted revenues and expenses based upon market conditions and expectations for growth. The capitalization rates primarily ranging from 8.25% to 8.5% and discount rates primarily ranging from 9.25% to 9.75% which were utilized in the models were based upon observable rates that the Company believes to be within a reasonable range of current market rates for each respective investment.

Based on these inputs the Company determined that its valuation of these investments was classified within Level 3 of the fair value hierarchy. The property carrying value impairment charges resulted from the Company’sCompany’s efforts to market certain assets and management’s assessment as to the likelihood and timing of such potential transactions.

 

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, continued

 

17.  Preferred Stock, Common Stock and Convertible Unit Transactions:

16.	Preferred Stock, Common Stock and Convertible Unit Transactions:

 

Preferred Stock

 

The Company’sCompany’s outstanding Preferred Stock is detailed below (in thousands, except share information and par values):

 

As of December 31, 2017
Class of Preferred Stock		Shares Authorized				Shares Issued and Outstanding				Liquidation Preference (in thousands)				Dividend Rate			Annual Dividend per Depositary Share				Par Value			Optional Redemption Date
Class I			18,400				7,000			$	175,000			6.000%			$	1.50000			$	1.00		3/20/2017
Class J			9,000				9,000				225,000			5.500%			$	1.37500			$	1.00		7/25/2017
Class K			8,050				7,000				175,000			5.625%			$	1.40625			$	1.00		12/7/2017
Class L			10,350				9,000				225,000			5.125%			$	1.28125			$	1.00		8/16/2022
Class M			10,580				9,200				230,000			5.250%			$	1.31250			$	1.00		12/20/2022
							41,200			$	1,030,000

 

As of December 31,2016 and2015
Series of  Preferred Stock		Shares Authorized				Shares Issued and Outstanding				Liquidation Preference				Dividend Rate				Annual Dividend per Depositary Share				Par Value
Series I			18,400				16,000			$	400,000				6.00	%		$	1.50000			$	1.00
Series J			9,000				9,000				225,000				5.50	%		$	1.37500			$	1.00
Series K			8,050				7,000				175,000				5.625	%		$	1.40625			$	1.00
			35,450				32,000			$	800,000

Series of Preferred Stock		Date Issued		Depositary Shares Issued			Fractional Interest per Share		Net Proceeds, After Expenses (in millions)				Offering/ Redemption Price			Optional Redemption Date
Series I		3/20/2012			16,000,000		1/1000		$	387.2			$	25.00		3/20/2017
Series J		7/25/2012			9,000,000		1/1000		$	217.8			$	25.00		7/25/2017
Series K		12/7/2012			7,000,000		1/1000		$	169.1			$	25.00		12/7/2017

As of December 31, 2016
Class of Preferred Stock		Shares Authorized				Shares Issued and Outstanding				Liquidation Preference (in thousands)				Dividend Rate			Annual Dividend per Depositary Share				Par Value			Optional Redemption Date
Class I			18,400				16,000			$	400,000			6.000%			$	1.50000			$	1.00		3/20/2017
Class J			9,000				9,000				225,000			5.500%			$	1.37500			$	1.00		7/25/2017
Class K			8,050				7,000				175,000			5.625%			$	1.40625			$	1.00		12/7/2017
							32,000			$	800,000

 

The following Preferred Stock series was redeemedclasses were issued during the year ended December 31, 2015:2017:

 

Series of  Preferred Stock

Date Issued

Depositary Shares Issued

Redemption Amount (in millions)

Offering/ Redemption Price

Optional Redemption Date

Actual Redemption Date

Series H (1)

8/30/2010

7,000,000

$

175.0

$

25.00

8/30/2015

11/25/2015

Class of Preferred Stock			Date Issued			Depositary Shares Issued			Fractional Interest per Share			Net Proceeds, Before Expenses (in millions)				Offering Price
Class L			8/16/2017			9,000,000			1/1000			$	218.1				25.00
Class M			12/20/2017			9,200,000			1/1000			$	222.8				25.00

During January 2018, the underwriting financial institutions for the Class M issuance elected to exercise the over-allotment option and as a result, the Company issued an additional 1,380,000 Class M Depositary Shares, each representing a one-thousandth fractional interest in a share of the Company's 5.250% Class M Cumulative Redeemable Preferred Stock, $1.00 par value per share. The Company received net proceeds before expenses of $33.4 million from this offering.

The following Preferred Stock classes were redeemed or partially redeemed during the years ended December 31, 2017, 2016 and 2015:

Classes of Preferred Stock			Redemption Date			Depositary Shares Redeemed			Redemption Price				Redemption Amount (in millions)				Redemption Charges (in millions) (1)
Class I (2)			9/6/2017			9,000,000			$	25.00			$	225.0			$	7.0
Class H			11/25/2015			7,000,000			$	25.00			$	175.0			$	5.8

 

(1)

In connection with this redemption the Company recorded a non-cash charge of $5.8 million Redemption charges resulting from the difference between the redemption amount and the carrying amount of the Class H Preferred Stockrespective preferred stock class on the Company’s Consolidated Balance Sheets are accounted for in accordance with the FASB’s guidance on Distinguishing Liabilities from Equity. The $5.8 million wasThese charges were subtracted from net incomeincome/(loss) attributable to the Company to arrive at net incomeincome/(loss) available to the Company’s common shareholders and is used in the calculation of earnings per share forshare.

(2)	The Company partially redeemed 9,000,000 depositary shares of its issued and outstanding Class I Preferred Stock, representing 56.25% of the year ended December 31, 2015.issued and outstanding Class I Preferred Stock.

 

The Company’sCompany’s Preferred Stock Depositary Shares for all seriesclasses are not convertible or exchangeable for any other property or securities of the Company. 

 

Voting Rights - The Class I, Preferred Stock, Class J, Preferred StockK, L and Class KM Preferred Stock rank pari passu as to voting rights, priority for receiving dividends and liquidation preference as set forth below.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, continued

 

As to any matter on which the Class I, J, K, L or KM Preferred Stock may vote, including any actions by written consent, each share of the Class I, J, K, L or KM Preferred Stock shall be entitled to 1,000 votes, each of which 1,000 votes may be directed separately by the holder thereof. With respect to each share of Class I, J, K, L or KM Preferred Stock, the holder thereof may designate up to 1,000 proxies, with each such proxy having the right to vote a whole number of votes (totaling 1,000 votes per share of Class I, J, K, L, or KM Preferred Stock). As a result, each Class I, J, K, L or KM Depositary Share is entitled to one vote.

 

Liquidation Rights

 

In the event of any liquidation, dissolution or winding up of the affairs of the Company, preferred stock holders are entitled to be paid, out of the assets of the Company legally available for distribution to its stockholders, a liquidation preference of $25,000.00 Class I Preferred Stock per share, $25,000.00 Class J Preferred Stock per share, $25,000.00 Class K Preferred Stock per share, $25,000.00 Class L Preferred Stock per share and $25,000.00 Class KM Preferred Stock per share ($25.00 per each Class I, Class J, Class K, Class L and Class KM Depositary Share), plus an amount equal to any accrued and unpaid dividends to the date of payment, before any distribution of assets is made to holders of the Company’s common stock or any other capital stock that ranks junior to the preferred stock as to liquidation rights.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, continuedCommon Stock

 

During Common StockFebruary 2018, the Company’s Board of Directors authorized a share repurchase program, pursuant to which the Company may repurchase shares of its common stock, par value $0.01 per share, with an aggregate gross purchase price of up to $300.0 million.

 

During February 2015, the Company established an at the market continuous offering program (the “ATM program”), which is effective for a term of three years, pursuant to which the Company may offer and sell shares of its common stock, par value $0.01 per share, with an aggregate gross sales price of up to $500.0 million through a consortium of banks acting as sales agents. Sales of the shares of common stock may be made, as needed, from time to time in “at the market” offerings as defined in Rule 415 of the Securities Act of 1933, including by means of ordinary brokers’ transactions on the New York Stock Exchange (the “NYSE”) or otherwise (i) at market prices prevailing at the time of sale, (ii) at prices related to prevailing market prices or (iii) as otherwise agreed to with the applicable sales agent. During the year ended December 31, 2016, the Company issued 9,806,377 shares and received proceeds of $285.2 million, net of commissions and fees of $2.9 million. The Company did not offer for sale any shares of common stock under the ATM program during the year ended December 31, 2017. As of December 31, 20162017, the Company had $211.9 million available under this ATM program.

 

The Company, from time to time, repurchases shares of its common stock in amounts that offset new issuances of common shares in connection withrelating to the exercise of stock options or the issuance of restricted stock awards. These share repurchases may occur in open market purchases, privately negotiated transactions or otherwise subject to prevailing market conditions, the Company’s liquidity requirements, contractual restrictions and other factors. During 2017, 2016 2015 and 2014,2015, the Company repurchased 232,304 shares, 257,477 shares and 179,696 shares, and 128,147 shares, respectively, in connection withrelating to common shares surrendered to the Company to satisfy statutory minimum tax withholding obligations in connection withrelating to the vesting of restricted stock awards under the Company’s equity-based compensation plans.

 

Convertible Units

 

The Company has various types of convertible units that were issued in connection with the purchase of operating properties (see Footnote 1514 of the Notes to Consolidated Financial Statements). The amount of consideration that would be paid to unaffiliated holders of units issued from the Company’s consolidated subsidiaries which are not mandatorily redeemable, as if the termination of these consolidated subsidiaries occurred on December 31, 2016,2017, is $24.1$18.3 million. The Company has the option to settle such redemption in cash or shares of the Company’s common stock. If the Company exercised its right to settle in Common Stock,common stock, the unit holders would receive 0.91.0 million shares of Common Stock.   common stock.   

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18.  Supplemental Schedule of Non-Cash Investing/Financing Activities:NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, continued

17.	Supplemental Schedule of Non-Cash Investing/Financing Activities:

 

The following schedule summarizes the non-cash investing and financing activities of the Company for the years ended December 31, 2017, 2016 2015 and 20142015 (in thousands):

 

		2016				2015				2014				2017				2016				2015
Acquisition of real estate interests by assumption of mortgage debt		$	33,174			$	84,699			$	210,232			$	45,299			$	33,174			$	84,699
Acquisition of real estate interests by issuance of redeemable units		$	-			$	-			$	8,219
Acquisition of real estate interests through proceeds held in escrow		$	66,044			$	89,504			$	179,387			$	162,396			$	66,044			$	89,504
Proceeds held in escrow through sale of real estate interests		$	66,044			$	71,623			$	197,270
Disposition of real estate interests by assignment of debt		$	-			$	47,742			$	-
Proceeds deposited in escrow through sale of real estate interests														$	162,396			$	66,044			$	71,623
Disposition of real estate interests by assignment of debt														$	-			$	-			$	47,742
Disposition of real estate interests through the issuance of mortgage receivable		$	-			$	5,730			$	2,728			$	-			$	-			$	5,730
Disposition of real estate interests by foreclosure of debt		$	22,080			$	-			$	-			$	-			$	22,080			$	-
Forgiveness of debt due to foreclosure		$	26,000			$	-			$	-			$	-			$	26,000			$	-
Investment in real estate joint venture through contribution of real estate		$	-			$	-			$	35,080
Decrease of noncontrolling interests through sale of real estate		$	-			$	-			$	17,650
Increase in capital expenditures accrual		$	15,078			$	8,581			$	12,622
Capital expenditures accrual														$	74,123			$	38,044			$	22,967
Issuance of common stock		$	85			$	493			$	14,047			$	-			$	85			$	493
Surrender of common stock		$	(7,008	)		$	(5,682	)		$	(4,051	)
Surrender of restricted common stock														$	(5,699	)		$	(7,008	)		$	(5,682	)
Declaration of dividends paid in succeeding period		$	124,517			$	115,182			$	111,143			$	128,892			$	124,517			$	115,182
Change in noncontrolling interest due to liquidation of partnership														$	64,948			$	-			$	-
Deemed contribution from noncontrolling interest														$	10,000			$	-			$	-
Consolidation of Joint Ventures:
Increase in real estate and other assets		$	407,813			$	1,039,335			$	687,538			$	325,981			$	407,813			$	1,039,335
Increase in mortgages payable, other liabilities and noncontrolling interests		$	268,194			$	750,135			$	492,318
Increase in mortgages payable, other liabilities and noncontrolling interests														$	258,626			$	268,194			$	750,135

 

19.  Transactions with Related Parties:

18.	Transactions with Related Parties:

 

The Company provides management services for shopping centers owned principally by affiliated entities and various real estate joint ventures in which certain stockholders of the Company have economic interests. Such services are performed pursuant to management agreements which provide for fees based upon a percentage of gross revenues from the properties and other direct costs incurred in connection with management of the centers.centers. Substantially all of the Management and other fee income on the Company’s Consolidated Statements of Income constitute fees earned from affiliated entities. Reference is made to Footnotes 3, 87 and 98 of the Notes to Consolidated Financial Statements for additional information regarding transactions with related parties.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, continued Ripco

 

Ripco Real Estate Corp. (“Ripco”) business activities include serving as a leasing agent and representative for national and regional retailers including Target, Best Buy, Kohl’sKohl’s and many others, providing real estate brokerage services and principal real estate investing. Mr. Todd Cooper, an officer and 50% shareholder of Ripco, is a son of Mr. Milton Cooper, Executive Chairman of the Board of Directors of the Company. During 2017, 2016 2015 and 2014,2015, the Company paid brokerage commissions of $0.4 million, $0.2 million $0.6 million and $0.3$0.6 million, respectively, to Ripco for services rendered primarily as leasing agent for various national tenants in shopping center properties owned by the Company.

ProHEALTH

 

ProHEALTH is a multi-specialty physician group practice offering one-stop health care. ProHEALTH’s CEO, Dr. David Cooper, M.D. is a son of Milton Cooper, Executive Chairman of the Company.Board of Directors of the Company, and the father of Ross Cooper, President and Chief Investment Officer of the Company.  ProHEALTH and/or its affiliates (“ProHEALTH”) have leasing arrangements with the Company whereby two consolidated property locations are currently under lease. Total annual base rent for these properties leased to ProHEALTH for each of the years ended December 31, 2017, 2016 2015 and 20142015 aggregated to $0.4 million, $0.4 million and $0.1 million, respectively.million.

Colony NorthStar

 

During January 2015, Colony Capital, Inc. (predecessor to Colony NorthStar) and affiliates contributed $100.0 million, to the ABS Venture, which was subsequently contributed to AB Acquisition to facilitate the acquisition of all of the outstanding shares of Safeway. The ABS Venture now holdsheld a combined 14.35% interest in AB Acquisition, of which the Company holdsheld a combined 9.8% ownership interest, Colony NorthStar holdsheld a 4.3% ownership interest and an unrelated third party holdsheld a 0.25% ownership interest. Richard B. Saltzman, a member of the Board of Directors of the Company, is the chief executive officer and president of Colony NorthStar.

During December 2017, the AB Acquisition structure was reorganized such that all interests in Albertsons, NAI and Safeway are owned by a single new corporation, ACI. In connection with this transaction, the ABS Venture was dissolved and the equity interests were distributed to the owning entities. As such, the Company now owns 9.74% of the common stock of ACI through two newly formed, wholly-owned partnerships. The Company’s previous two noncontrolling members, including Colony NorthStar, now own their respective interests directly and are no longer in a joint venture with the Company (see Footnote 98 of the Notes to Consolidated Financial Statements).

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20.  Commitments and Contingencies:NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, continued

19.	Commitments and Contingencies:

Operations

 

The Company and its subsidiaries are primarily engaged in the operation of shopping centers that are either owned or held under long-term leases that expire at various dates through 2115.2109. The Company and its subsidiaries, in turn, lease premises in these centers to tenants pursuant to lease agreements which provide for terms ranging generally from 5 to 25 years and for annual minimum rentals plus incremental rents based on operating expense levels and tenants' sales volumes. Annual minimum rentals plus incremental rents based on operating expense levels and percentage rents comprised 98% of total revenues from rental properties for each of the three years ended December 31, 2017, 2016 2015 and 2014.2015.

 

The minimum revenues from rental propertiesproperties under the terms of all non-cancelable tenant leases for future years, assuming no new or renegotiated leases are executed for such premises, are as follows (in millions): 2017, $834.6; 2018, $755.9; 2019, $664.1; 2020, $567.7; 2021, $471.5 and thereafter; $1,971.7.

		2018				2019				2020				2021				2022				Thereafter
Minimum revenues		$	875.5			$	820.3			$	735.4			$	643.6			$	536.3			$	2,683.2

 

Base rental revenues from rental propertiesproperties are recognized on a straight-line basis over the terms of the related leases. The difference between the amount of rental income contracted through leases and rental income recognized on a straight-line basis before allowances for the years ended December 31, 2017, 2016 and 2015 and 2014 was $15.7 million, $16.5 million and $14.8 million, and $8.4 million, respectively.

 

Minimum rental payments to be made by the Company under the terms of all non-cancelable operating ground leases for future years are as follows (in millions): 2017, $10.3; 2018, $9.9; 2019, $9.2; 2020, $8.6; 2021, $8.3 and thereafter, $143.0.

		2018				2019				2020				2021				2022				Thereafter
Minimum rental payments		$	9.1			$	9.1			$	8.6			$	8.6			$	8.5			$	138.5

 

Letters of Credit

 

The Company has issued letters of credit in connection with the completion and repayment guarantees for loans encumbering certain of the Company’sCompany’s development and redevelopment projects and guaranty of payment related to the Company’s insurance program. At December 31, 2016,2017, these letters of credit aggregated $40.8$40.4 million.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, continued

Other

 

In connection with the construction of its development and redevelopment projects and related infrastructure, certain public agencies require posting of performance and surety bonds to guarantee that the Company’s obligations are satisfied. These bonds expire upon the completion of the improvements and infrastructure. As of December 31, 2016,2017, there were $30.1$20.0 million in performance and surety bonds outstanding.

On January 28, 2013, the Company received a subpoena from the Enforcement Division of the SEC in connection with an investigation, In the Matter of Wal-Mart Stores, Inc. (FW-3678), that the SEC Staff is currently conducting with respect to possible violations of the Foreign Corrupt Practices Act. The Company has cooperated, and will continue to cooperate, with the SEC and the U.S. Department of Justice (“DOJ”), which is conducting a parallel investigation. At this point, we are unable to predict the duration, scope or result of the SEC or DOJ investigations.

 

The Company is subject to various other legal proceedings and claims that arise in the ordinary course of business. Management believes that the final outcome of such matters will not have a material adverse effect on the financial position, results of operations or liquidity of the Company as of December 31, 2016.2017.

 

21.  Incentive Plans:

20.	Incentive Plans:

 

The Company accounts for equity awards in accordance with FASB’s Compensation – Stock Compensation guidance which requires that all share based payments to employees, including grants of employee stock options, restricted stock and performance shares, be recognized in the Statement of Income over the service period based on their fair values. Fair value is determined, depending on the type of award, using either the Black-Scholes option pricing formula or the Monte Carlo method for performance shares or the Black-Scholes option pricing formula, both of which are intended to estimate the fair value of the awards at the grant date. Fair value of restricted shares is calculated based on the price on the date of grant.

 

The Company recognized expense associated with its equity awards of $21.6 million, $19.1 million $18.5 million and $17.9$18.5 million, for the years ended December 31, 2017, 2016 2015 and 2014,2015, respectively.  As of December 31, 2016,2017, the Company had $31.1$27.5 million of total unrecognized compensation cost related to unvested stock compensation granted under the Plans.  That cost is expected to be recognized over a weighted averageweighted-average period of 3.32.7 years. The Company had 10,410,343, 10,015,040 9,095,416 and 9,251,021,9,095,416 shares of the Company’s common stock available for issuance under the Plans at December 31, 2017, 2016 and 2015, and 2014, respectively.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, continued

Stock Options

 

During 2017, 2016 2015 and 2014,2015, the Company did not grant any stock options. Information with respect to stock options outstanding under the Plan for the years ended December 31, 2017, 2016 2015 and 20142015 are as follows:

 

		Shares				Weighted-Average Exercise Price Per Share				Aggregate Intrinsic Value (in millions)
Options outstanding, January 1, 2014			15,374,145			$	28.79			$	13.1
Exercised			(1,474,432	)		$	16.19			$	9.4
Forfeited			(2,005,952	)		$	28.68
Options outstanding, December 31, 2014			11,893,761			$	30.23			$	29.8
Exercised			(1,019,240	)		$	18.36			$	7.4
Forfeited			(1,862,080	)		$	32.55
Options outstanding, December 31, 2015			9,012,441			$	31.09			$	27.4
Exercised			(1,167,819	)		$	18.03			$	12.4
Forfeited			(1,830,893	)		$	39.69
Options outstanding, December 31, 2016			6,013,729			$	32.09			$	12.1
Options exercisable (fully vested) -
December 31, 2014			10,159,570			$	31.96			$	19.9
December 31, 2015			7,617,882			$	32.90			$	20.0
December 31, 2016			5,144,416			$	32.56			$	11.3

		Shares				Weighted-Average Exercise Price Per Share				Aggregate Intrinsic Value (in millions)
Options outstanding, January 1, 2015			11,893,761			$	30.23			$	29.8
Exercised			(1,019,240	)		$	18.36			$	7.4
Forfeited			(1,862,080	)		$	32.55
Options outstanding, December 31, 2015			9,012,441			$	31.09			$	27.4
Exercised			(1,167,819	)		$	18.03			$	12.4
Forfeited			(1,830,893	)		$	39.69
Options outstanding, December 31, 2016			6,013,729			$	32.09			$	12.1
Exercised			(83,863	)		$	18.20			$	3.4
Forfeited			(2,464,920	)		$	35.91
Options outstanding, December 31, 2017			3,464,946			$	27.81			$	-
Options exercisable (fully vested) -
December 31, 2015			7,617,882			$	32.90			$	20.0
December 31, 2016			5,144,416			$	32.56			$	11.3
December 31, 2017			3,464,946			$	27.81			$	4.0

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, continued

 

The exercise pricesprice per share for options outstanding as of December 31, 2016, range2017 ranges from $11.54 to $53.14 per share.$40.79. The Company estimates forfeitures based on historical data. The weighted-average remaining contractual life for options outstanding as of December 31, 20162017 was 2.42.3 years. The weighted-average remaining contractual term of options currently exercisable as of December 31, 2016,2017, was 2.3 years. The weighted-average remaining contractual term of options expected to vest as of December 31, 2016, was 6.2 years. As of December 31, 2016,2017, all of the Company had 225,695Company’s outstanding options expected to vest, with a weighted-average exercise price per share of $21.54 and an aggregate intrinsic value of $0.8 million.were vested. Cash received from options exercised under the Plan was $1.5 million, $21.1 million $18.7 million and $23.9$18.7 million for the years ended December 31, 2017, 2016 and 2015, and 2014, respectively.

 

Restricted Stock

 

Information with respect to restricted stock under the Plan for the years ended December 31, 2017, 2016 2015 and 20142015 are as follows:

 

		2016				2015				2014				2017				2016				2015
Restricted stock outstanding as of January 1,			1,712,534				1,911,145				1,591,082				1,930,732				1,712,534				1,911,145
Granted(1)			756,530				729,160				804,465				646,142				756,530				729,160
Vested			(520,539	)			(875,202	)			(418,309	)			(783,872	)			(520,539	)			(875,202	)
Forfeited			(17,793	)			(52,569	)			(66,093	)			(15,573	)			(17,793	)			(52,569	)
Restricted stock outstanding as of December 31,			1,930,732				1,712,534				1,911,145				1,777,429				1,930,732				1,712,534

 

(1)   The weighted-average grant date fair value for restricted stock issued during the years ended December 31, 2017, 2016 and 2015 were $25.04, $26.15 and $25.98, respectively.

Restricted shares have the same voting rights as the Company’sCompany’s common stock and are entitled to a cash dividend per share equal to the Company’s common dividend which is taxable as ordinary income to the holder. TheFor the years ended December 31, 2017, 2016 and 2015, the dividends paid on unvested restricted shares were $2.4 million, $2.2 million, and $1.8 million, and $1.5 millionrespectively.

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Performance Shares

Information with respect to performance share awards under the Plan for the years ended December 31, 2017, 2016 and 2015 and 2014, respectively. The weighted-average grant date fair value for restricted stock issued during the years ended December 31, 2016, 2015 and 2014 were $26.15, $25.98 and $21.60, respectively.are as follows:

 

Performance Shares

	2017		2016		2015
Performance share award outstanding as of January 1,	197,249		202,754		114,268
Granted (1)	135,780		100,170		145,620
Vested (2)	(97,079)		(105,675)		(57,134)
Performance share award outstanding as of December 31,	235,950		197,249		202,754

 

As of December 31, 2016, 2015 and 2014, the Company had performance share awards outstanding of 197,249, 202,754 and 171,400, respectively.(1)   The weighted-average grant date fair value for performance shares issued during the years ended December 31, 2017, 2016 and 2015 were $23.35, $28.60 and 2014$27.87, respectively.

(2)   For the years ended December 31, 2017, 2016 and 2015, the corresponding common stock equivalent of these vested awards were $28.60, $27.870, 130,080 and $22.65,91,862, respectively.

The more significant assumptions underlying the determination of fair values for these awards granted during 2017, 2016 2015 and 20142015 were as follows:

 

		2016				2015						2014						2017				2016				2015
Stock price		$	26.29			$			26.83			$			21.49			$	24.91			$	26.29			$	26.83
Dividend yield (1)			0	%					0	%					0	%			0	%			0	%			0	%
Risk-free rate			0.87	%					0.98	%					0.65	%			1.45	%			0.87	%			0.98	%
Volatility(2)			18.80	%					16.81	%					25.93	%			18.93	%			18.80	%			16.81	%
Term of the award (years)			2.88					1.88,	2.88				0.88,	1.88,	2.88				2.88				2.88				1.88, 2.88

 

	(1)	Total Shareholder Returns, as used in the performance share awards computation, are measured based on cumulative dividend stock prices, as such a zero percent dividend yield is utilized.
(2)	Volatility is based on the annualized standard deviation of the daily logarithmic returns on dividend-adjusted closing prices over the look-back period based on the term of the award.

 

Other

 

The Company maintains a 401(k) retirement-retirement plan covering substantially all officers and employees, which permits participants to defer up to the maximum allowable amount determined by the Internal Revenue Service of their eligible compensation. This deferred compensation, together with Company matching contributions, which generally equal employee deferrals up to a maximum of 5% of their eligible compensation, is fully vested and funded as of December 31, 2016.2017. The Company’s contributions to the plan were $2.1 million, $2.0 million $2.1 million and $2.2$2.1 million for the years ended December 31, 2017, 2016 and 2015, and 2014, respectively.

 

The Company recognized severance costs associated with employee terminations during the years ended December 31, 2017, 2016 and 2015, and 2014, of $5.5 million, $1.7 million and $4.8 million, and $6.3 million, respectively.

 

 

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22.  Income Taxes:

21.	Income Taxes:

 

The Company elected to qualify as a REIT in accordance with the Code commencing with its taxable year which began January 1, 1992. To qualify as a REIT, the Company must meet several organizational and operational requirements, including a requirement that it currently distribute at least 90% of its REIT taxable income to its stockholders. Management intends to adhere to these requirements and maintain the Company’s REIT status. As a REIT, the Company generally will not be subject to corporate federal income tax, provided that dividends to its stockholders equal at least the amount of its REIT taxable income. If the Company failed to qualify as a REIT in any taxable year, it would be subject to federal income taxes at regular corporate rates (including any applicable alternative minimum tax) and may not be permitted to elect REIT status for four subsequent taxable years. Even if the Company qualifies for taxation as a REIT, the Company is subject to certain state and local taxes on its income and property, and federal income and excise taxes on its undistributed taxable income. In addition, taxable income from non-REIT activities managed through TRSs is subject to federal, state and local income taxes. The Company is also subject to local taxes on certain Non-U.S. investments.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, continued

Reconciliation between GAAP Net Income and Federal Taxable Income

 

The following table reconciles GAAP net income to taxable income for the years ended December 31, 2017, 2016 2015 and 20142015 (in thousands):

 

		2016				2015				2014				2017				2016				2015
		(Estimated)				(Actual)				(Actual)				(Estimated)				(Actual)				(Actual)
GAAP net income attributable to the Company		$	378,850			$	894,115			$	424,001			$	426,075			$	378,850			$	894,115
GAAP net loss/(income) of taxable REIT Subsidiaries			2,414				(6,073	)			(13,110	)
GAAP net (income)/loss attributable to TRSs															(12,164	)			12,708				(6,073	)
GAAP net income from REIT operations (a)			381,264				888,042				410,891				413,911				391,558				888,042
Net book depreciation in excess of tax depreciation			73,409				21,515				24,890				116,106				65,194				21,515
Capitalized leasing/legal commissions			(11,894	)			(14,246	)			(13,576	)			-				(11,984	)			(14,246	)
Deferred/prepaid/above-market and below-market rents, net			(35,230	)			(32,848	)			(17,967	)			(30,303	)			(34,097	)			(32,848	)
Fair market value debt amortization			(15,953	)			(19,723	)			(6,236	)			(8,495	)			(15,901	)			(19,723	)
Restricted stock			(4,490	)			(3,094	)			(1,078	)
Book/tax differences from restricted stock															676				(4,490	)			(3,094	)
Book/tax differences from non-qualified stock options			(11,301	)			(4,786	)			(5,144	)			(172	)			(11,301	)			(4,786	)
Book/tax differences from investments in real estate joint ventures			(4,205	)			(294	)			8,614
Book/tax differences from investments in and advances to real estate joint ventures															(15,196	)			(20,739	)			(294	)
Book/tax difference on sale of properties			(75,445	)			(64,270	)			(146,173	)			(85,856	)			(93,704	)			(64,270	)
Foreign income tax from capital gains			-				5,873				-				-				3,976				5,873
Cumulative foreign currency translation adjustment & deferred tax adjustment			3,267				-				139,976
Cumulative foreign currency translation adjustment and deferred tax adjustment															(1,300	)			-				-
Book adjustment to property carrying values and marketable equity securities			29,042				4,484				62,817				53,893				11,161				4,484
Taxable currency exchange loss, net			(6,775	)			(47,297	)			(100,602	)
Tangible property regulations deduction (b)			(58,000	)			(126,957	)			-
Dividends from taxable REIT subsidiaries			-				647				67,590
GAAP change in control gain			(57,386	)			(149,407	)			(107,235	)
Valuation allowance against net deferred tax assets (see discussion below)			40,097				-				-
Taxable currency exchange gains/(losses), net															221				(8,962	)			(47,297	)
Tangible property regulation deduction (b)															(52,237	)			(28,954	)			(126,957	)
GAAP gain on change in control of interests															(71,160	)			(57,385	)			(149,407	)
Valuation allowance against net deferred tax assets															-				51,939				-
Other book/tax differences, net			(9,505	)			(3,618	)			(16,100	)			(6,893	)			542				(2,971	)
Adjusted REIT taxable income		$	236,895			$	454,021			$	300,667			$	313,195			$	236,853			$	454,021

 

Certain amounts in the prior periods have been reclassified to conform to the current year presentation, in the table above.

 

(a)

All adjustments to "GAAP net income from REIT operations" are net of amounts attributable to noncontrolling interest and taxable REIT subsidiaries.TRSs.

(b)

In September 2013, the Internal Revenue Service released final Regulations governing when taxpayers must capitalize and depreciate costs for acquiring, maintaining, repairing and replacing tangible property and when taxpayers must deduct such costs as repairs. Pursuant to these Regulations the Company deducted certain expenditures that would previously have been capitalized for tax purposes. The Regulations also allowed the Company to make an election to immediately deduct certain amounts that were capitalized in previous years but qualify as repairs under the new Regulations. The Company made such election in 2015 and deducted approximately $85.9 million.

 

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Characterization of Distributions

 

The following characterizes distributions paid for tax purposes for the years ended December 31, 2017, 2016 and 2015, and 2014, (in(amounts in thousands):

 

		2016								2015								2014								2017								2016								2015
Preferred H Dividends
Ordinary income		$	-				-			$	-				-			$	6,762				56	%		$	-				-			$	-				-			$	-				-
Capital gain			-				-				13,417				100	%			5,313				44	%			-				-				-				-				13,417				100	%
		$	-				-			$	13,417				100	%		$	12,075				100	%		$	-				-			$	-				-			$	13,417				100	%
Preferred I Dividends
Ordinary income		$	16,320				68	%		$	-				-			$	13,440				56	%		$	21,636				96	%		$	16,320				68	%		$	-				-
Capital gain			7,680				32	%			24,000				100	%			10,560				44	%			902				4	%			7,680				32	%			24,000				100	%
		$	24,000				100	%		$	24,000				100	%		$	24,000				100	%		$	22,538				100	%		$	24,000				100	%		$	24,000				100	%
Preferred J Dividends
Ordinary income		$	8,415				68	%		$	-				-			$	6,930				56	%		$	11,880				96	%		$	8,415				68	%		$	-				-
Capital gain			3,960				32	%			12,375				100	%			5,445				44	%			495				4	%			3,960				32	%			12,375				100	%
		$	12,375				100	%		$	12,375				100	%		$	12,375				100	%		$	12,375				100	%		$	12,375				100	%		$	12,375				100	%
Preferred K Dividends
Ordinary income		$	6,694				68	%		$	-				-			$	5,513				56	%		$	9,450				96	%		$	6,694				68	%		$	-				-
Capital gain			3,150				32	%			9,844				100	%			4,331				44	%			394				4	%			3,150				32	%			9,844				100	%
		$	9,844				100	%		$	9,844				100	%		$	9,844				100	%		$	9,844				100	%		$	9,844				100	%		$	9,844				100	%
Preferred L Dividends
Ordinary income																										$	1,814				96	%		$	-				-			$	-				-
Capital gain																											76				4	%			-				-				-				-
																										$	1,890				100	%		$	-				-			$	-				-
Common Dividends
Ordinary income		$	263,892				62	%		$	-				-			$	132,498				36	%		$	260,573				57	%		$	263,892				62	%		$	-				-
Capital gain			127,689				30	%			394,400				100	%			103,054				28	%			9,143				2	%			127,689				30	%			394,400				100	%
Return of capital			34,050				8	%			-				-				132,498				36	%			187,430				41	%			34,050				8	%			-				-
		$	425,631				100	%		$	394,400				100	%		$	368,050				100	%		$	457,146				100	%		$	425,631				100	%		$	394,400				100	%
Total dividends distributed for tax purposes		$	471,850							$	454,036							$	426,344							$	503,793							$	471,850							$	454,036

 

For the years ended December 31, 2017, 2016 2015 and 20142015 cash dividends paid for tax purposes were equivalent to, or in excess of, the dividends paid deduction.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, continued

Taxable REIT Subsidiariesand Taxable Entities

 

The Company is subject to federal, state and local income taxes on income reported through its TRS activities, which include wholly-owned subsidiaries of the Company. The Company’s TRSs included KRS, FNC Realty Corporation, Kimco Insurance Company (collectively “KRS Consolidated”) and the consolidated entity, Blue Ridge Real Estate Company/Big Boulder Corporation. As part of the Company’s overall strategy to simplify its business model, the Company merged KRS, a TRS holding REIT-qualifying real estate and the Company’s investment in Albertsons, into a wholly-owned LLC and KRS was dissolved effective August 1, 2016. Any non-REIT-qualifyingnon-REIT qualifying assets or activities received by the Company in the Merger were transferred to a newly formed TRS, Kimco Realty Services II, Inc.

On December 22, 2017, the Tax Cuts and Jobs Act was signed into law, making significant changes to taxation of corporations and individuals. Effective for tax years beginning on January 1, 2018, this tax reform law reduces the federal statutory income tax rate from 35% to 21% for corporations and changed other certain tax provisions and deductions. ASC 740, Income Taxes, requires the effects of changes in tax rates and laws on deferred tax balances to be recognized in the period in which the legislation is enacted. As a result, the Company remeasured its deferred tax assets and liabilities and recorded a tax provision of $1.1 million during 2017.

 

The Company is also subject to local non-U.S. taxes on certain investments located outside the U.S.  In general, under local country law applicable to the entity ownership structures the Company has in place and applicable tax treaties, the repatriation of cash to the Company from its subsidiaries and joint ventures in Canada, Puerto Rico and Mexico generally is not subject to withholding tax. The Company is subject to and includes in its tax provision non-U.S. income taxes on certain investments located in jurisdictions outside the U.S. These investments are primarily held by the Company at the REIT level and not in the Company’s taxable REIT subsidiary. Accordingly, the Company does not expect a U.S. income tax impact associated with the repatriation of undistributed earnings from the Company’s foreign subsidiaries.

 

Income taxes have been provided for on the asset and liability method as required by the FASB’sFASB’s Income Tax guidance. Under the asset and liability method, deferred income taxes are recognized for the temporary differences between the financial reporting basis and the tax basis of taxable assets and liabilities.

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The Company’sCompany’s pre-tax book income/(loss)/income and benefit/(provision)/benefit for income taxes relating to the Company’s TRS and taxable entities which have been consolidated for accounting reporting purposes, for the years ended December 31, 2017, 2016 2015 and 2014,2015, are summarized as follows (in thousands):

 

		2016				2015				2014					2017				2016				2015
(Loss)/income before income taxes – U.S.		$	(23,810	)		$	23,729			$	22,176
Benefit/(provision) for income taxes, net:
Income/(loss) before income taxes – U.S.													Income/(loss) before income taxes – U.S.		$	1,487			$	(23,810	)		$	23,729
(Provision)/benefit for income taxes, net:													(Provision)/benefit for income taxes, net:
Federal:													Federal:
Current			2,199				(638	)			(522	)	Current			(704	)			2,199				(638	)
Deferred			(45,097	)			(7,355	)			(7,156	)	Deferred			(632	)			(45,097	)			(7,355	)
Federal tax provision			(42,898	)			(7,993	)			(7,678	)	Federal tax provision			(1,336	)			(42,898	)			(7,993	)
State and local:													State and local:
Current			1,057				(2,535	)			(165	)	Current			(66	)			1,057				(2,535	)
Deferred			(8,812	)			(1,474	)			(1,223	)	Deferred			(190	)			(8,812	)			(1,474	)
State tax provision			(7,755	)			(4,009	)			(1,388	)	State tax provision			(256	)			(7,755	)			(4,009	)
Total tax provision – U.S.			(50,653	)			(12,002	)			(9,066	)	Total tax provision – U.S.			(1,592	)			(50,653	)			(12,002	)
Net (loss)/income from U.S. taxable REIT subsidiaries		$	(74,463	)		$	11,727			$	13,110
Net (loss)/income from U.S. TRSs													Net (loss)/income from U.S. TRSs		$	(105)			$	(74,463	)		$	11,727
Income before taxes – Non-U.S.		$	138,253			$	381,999			$	116,184
(Provision)/benefit for Non-U.S. income taxes:
(Loss)/income before taxes – Non-U.S.													(Loss)/income before taxes – Non-U.S.		$	(11,483)			$	138,253			$	381,999
Benefit/(provision) for Non-U.S. income taxes:													Benefit/(provision) for Non-U.S. income taxes:
Current (1)		$	(24,393	)		$	(58,365	)		$	(18,131	)	Current (1)		$	2,425			$	(24,393	)		$	(58,365	)
Deferred			(3,537	)			4,331				(6,749	)	Deferred			47				(3,537	)			4,331
Non-U.S. tax provision		$	(27,930	)		$	(54,034	)		$	(24,880	)
Non-U.S. tax benefit/(provision)													Non-U.S. tax benefit/(provision)		$	2,472			$	(27,930	)		$	(54,034	)

 

(1)

For the yearsThe year ended December 31, 2016 and 2015 includes $24.9 million, and $53.5 million, respectively, in expense related to the sale of interests in properties located in Canada.

 

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(Provision)/ benefit

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, continued

Provision differs from the amounts computed by applying the statutory federal income tax rate to taxable income before income taxes as follows (in thousands):

		2016				2015				2014
Federal provision at statutory tax rate (35%) (1)		$	(47,155	)		$	(8,304	)		$	(7,762	)
State and local provision, net of federal benefit (2)			(3,498	)			(3,698	)			(1,304	)
Total tax provision – U.S.		$	(50,653	)		$	(12,002	)		$	(9,066	)

(1) For the year ended December 31, 2016, includes a $55.6 million charge related to the recording of a deferred tax valuation allowance.

(2) For the year ended December 31, 2016, includes a $7.9 million charge related to the recording of a deferred tax valuation allowance.

 

		2017				2016				2015
Federal provision at statutory tax rate (35%) (1)		$	(520	)		$	(47,155	)		$	(8,304	)
State and local provision, net of federal benefit (2)			(1,072	)			(3,498	)			(3,698	)
Total tax provision – U.S.		$	(1,592	)		$	(50,653	)		$	(12,002	)

(1)	The year ended December 31, 2016, includes a $55.6 million charge related to the recording of a deferred tax valuation allowance.

(2)	The year ended December 31, 2016, includes a $7.9 million charge related to the recording of a deferred tax valuation allowance.

Deferred Tax Assets,Liabilities and Valuation Allowances

 

The Company’sCompany’s deferred tax assets and liabilities at December 31, 20162017 and 2015,2016, were as follows (in thousands):

 

		2016				2015				2017				2016
Deferred tax assets:
Tax/GAAP basis differences		$	63,167			$	49,601			$	35,839			$	63,167
Net operating losses (1)			44,833				40,100				22,137				44,833
Related party deferred losses			952				1,549
Tax credit carryforwards (2)			5,368				5,304				6,064				5,368
Capital loss carryforwards			3,659				4,593				4,648				3,659
Related party deferred losses											619				952
Charitable contribution carryforwards			35				22				23				35
Non-U.S. tax/GAAP basis differences			513				4,555				-				513
Valuation allowance – U.S.			(95,126	)			(25,045	)			(54,155	)			(95,126	)
Valuation allowance – Non-U.S.			-				(2,860	)
Total deferred tax assets			23,401				77,819				15,175				23,401
Deferred tax liabilities – U.S.			(19,599	)			(19,326	)			(12,739	)			(19,599	)
Deferred tax liabilities – Non-U.S.			(559	)			(3,493	)			-				(559	)
Net deferred tax assets		$	3,243			$	55,000			$	2,436			$	3,243

 

(1)

Expiration dates ranging from 2021 to 2033.2032.

(2)

Expiration dates ranging from 2027 to 20342035 and includes alternative minimum tax credit carryovers of $3.1$3.5 million that do not expire.

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The major differences between the GAAP basis of accounting and the basis of accounting used for federal and state income tax reporting consist of impairment charges recorded for GAAP purposes, but not recognized for tax purposes, depreciation and amortization, rental revenue recognized on the straight linestraight-line method for GAAP, reserves for doubtful accounts, above-market and below-market lease amortization, differences in GAAP and tax basis of assets sold, and the period in which certain gains were recognized for tax purposes, but not yet recognized under GAAP.

 

Deferred tax assets and deferred tax liabilities are included in the captionscaptions Other assets and Other liabilities on the accompanying Consolidated Balance Sheets at December 31, 20162017 and 2015.2016. Operating losses and the valuation allowance are related primarily to the Company’s consolidation of its taxable REIT subsidiaries for accounting and reporting purposes. For the tax year ended August 1, 2016, KRS Consolidated produced $20.6$8.1 million of taxable income and utilized $20.6$8.1 million of its $44.0 million of available net operating loss carryovers. For the year ended December 31, 2015, KRS Consolidated produced $19.7 million of taxable income and utilized $19.7 million of its $70.3 million of available net operating loss carryovers.

 

Under GAAP a reduction of the carrying amounts of deferred tax assets by a valuation allowance is required, if, based on the evidence available, it is more likely than not (a likelihood of more than 50 percent) that some portion or all of the deferred tax assets will not be realized.  The valuation allowance should be sufficient to reduce the deferred tax asset to the amount that is more likely than not to be realized. As a result of the Merger, the Company determined that the realization of $63.5 million of its net deferred tax assets was not deemed more likely than not and as such, the Company recorded a full valuation allowance against these net deferred tax assets that existed at the time of the Merger.

 

TheThe Company prepared an analysis of the tax basis built-in tax gain or built-in loss inherent in each asset acquired from KRS in the Merger. Assets of a TRS that become REIT assets in a merger transaction of the type entered into by the Company and KRS are subject to corporate tax on the aggregate net built-in gain (built-in gains in excess of built-in losses) during a recognition period. Accordingly, the Company is subject to corporate-level taxation on the aggregate net built-in gain from the sale of KRS assets within 60 months from the Merger date (the recognition period). The maximum taxable amount with respect to all merged assets disposed within 60 months of the Merger is limited to the aggregate net built-in gain at the Merger date. The Company compared fair value to tax basis for each property or asset to determine its built-in gain (value over basis) or built-in loss (basis over value) which could be subject to corporate level taxes if the Company disposed of the asset previously held by KRS during the 60 months following the Merger date. In the event that sales of KRS assets during the recognition period result in corporate level tax, the unrecognized tax benefits reported as deferred tax assets from KRS will be utilized to reduce the corporate level tax for GAAP purposes.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, continued

Uncertain Tax Positions

 

The Company is subject to income tax in certain jurisdictions outside the U.S., principally Canada and Mexico. The statute of limitations on assessment of tax varies from three to seven years depending on the jurisdiction and tax issue. Tax returns filed in each jurisdiction are subject to examination by local tax authorities. The Company is currently under audit by the Canadian Revenue Agency and Mexican Tax Authority.Authority. The resolution of these audits are not expected to have a material effect on the Company’s financial statements. The Company does not believe that the total amount of unrecognized tax benefits as of December 31, 2016,2017, will significantly increase or decrease within the next 12 months.

 

The liability for uncertain tax benefits principally consists of estimated foreign, federal and state income tax liabilities in years for which the statute of limitations is open. Open years range from 20102011 through 20162017 and vary by jurisdiction and issue. The aggregate changes in the balance of unrecognized tax benefits for the years ended December 31, 20162017 and 20152016 were as follows (in thousands):

 

		2016				2015				2017				2016
Balance at January 1,		$	4,263			$	4,649			$	4,962			$	4,263
Increases for tax positions related to current year(1)			41				1,084				339				41
Increase for tax position due to ASU 2013-11			4,930				-				-				4,930
Decreases relating to settlements with taxing authorities			(2,000	)			-				-				(2,000	)
Reductions due to lapsed statute of limitations			(2,272	)			(1,470	)			(1,310	)			(2,272	)
Balance at December 31,		$	4,962			$	4,263			$	3,991			$	4,962

 

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      (1)     Amounts relate to increases resulting from foreign currency translation adjustments.

 

KIMCO REALTY CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, continued

The Company previously had unrecognized tax benefits reported as deferred tax assets primarily related to book to tax timing differences for depreciation expense on its Canadian real estate operating properties. With respect to the Company’s uncertain tax positions in Canada and in accordance with ASU 2013-11 "Income Taxes (Topic 740): Presentation of an Unrecognized Tax Benefit When a Net Operating Loss Carryforward, a Similar Tax Loss, or a Tax Credit Carryforward Exists," (“ASU 2013-11”), the uncertain tax position liabilities in Canada were netted against these deferred tax assets. As of December 31, 2016, the Company, due to the sale of certain operating real estate properties in Canada, no longer had these related deferred tax assets to net against the related deferred tax liability and thus, the amount of its liability increased for uncertain tax positions associated with its Canadian operations. As of December 31, 2017 and 2016, the Company’s Canadian uncertain tax positions aggregated $4.9 million.$4.0 million and $5.0 million, respectively.

 

The Company and its subsidiaries had been under audit by the U.S. Internal Revenue Service (“IRS”) with respect to taxable years 2004-2009. The IRS proposed, pursuant to Section 482 of the Code, to disallow a capital loss claimed by KRS on the disposition of common shares of Valad Property Ltd., an Australian publicly listed company, and to assert a 100 percent “penalty” tax on the Company pursuant to Section 857(b)(7) of the Code in the amount of $40.9 million with respect to its 2009 taxable year. InDuring 2016, the Company and its subsidiaries favorably settled all matters relating to the audit, agreeing to a net refund of $0.1 million. Inmillion, and in connection with this favorable settlement, the Company released its uncertain tax position liability of $2.0 million.

 

InDuring August 2016, the Mexican Tax Authority issued tax assessments for various wholly-owned entities of the Company that had previously held interests in operating properties in Mexico. These assessments relate to certain interest expense and withholding tax items subject to the United States-Mexico Income Tax Convention (the “Treaty”). The assessments are for the 2010 tax year and include amounts for taxes aggregating $33.7 million, interest aggregating $16.5 million and penalties aggregating $11.4 million. The Company believes that it has operated in accordance with the Treaty provisions and has therefore concluded that no amounts are payable with respect to this matter. The Company has submitted appeals for these assessments and the U.S. Competent Authority (Department of Treasury) is representing the Company regarding this matter with the Mexican Competent Authority. The Company intends to vigorously defend its position and believes it will prevail, however this outcome cannot be assured.

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23.Accumulated Other Comprehensive Income:NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, continued

22.	Accumulated Other Comprehensive Income:

 

The following table displays the change in the components of AOCI for the years ended December 31, 20162017 and 2015:2016:

 

		Foreign Currency Translation Adjustments				Unrealized Gains on Available-for- Sale Investments				Unrealized Gain/(Loss) on Interest Rate Swaps				Total
Balance as of January 1, 2016		$	6,616			$	398			$	(1,426	)		$	5,588
Other comprehensive income before reclassifications			(281	)			8				451				178
Amounts reclassified from AOCI			-				-				-				-
Net current-period other comprehensive income			(281	)			8				451				178
Balance as of December 31, 2016		$	6,335			$	406			$	(975	)		$	5,766

		Foreign Currency Translation Adjustments				Unrealized Gains on Available-for- Sale Investments				Unrealized Gain/(Loss) on Interest Rate Swaps				Total				Foreign Currency Translation Adjustments				Unrealized Gains/(Losses) Related to Available-for-Sale Securities				Unrealized Gains/(Losses) on Interest Rate Swaps				Total
Balance as of January 1, 2015		$	329			$	46,197			$	(1,404	)		$	45,122
Balance as of January 1, 2016																		$	6,616			$	398			$	(1,426	)		$	5,588
Other comprehensive income before reclassifications			(12,493	)			(5,946	)			(22	)			(18,461	)			(281	)			8				451				178
Amounts reclassified from AOCI			18,780	(1)			(39,853	)(2)			-				(21,073	)			-				-				-				-
Net current-period other comprehensive income			6,287				(45,799	)			(22	)			(39,534	)			(281	)			8				451				178
Balance as of December 31, 2015		$	6,616			$	398			$	(1,426	)		$	5,588
Balance as of December 31, 2016																		$	6,335			$	406			$	(975	)		$	5,766
Other comprehensive income before reclassifications																			3,711				(1,542	)			631				2,800
Amounts reclassified from AOCI (1)																			(10,046	)			-				-				(10,046	)
Net current-period other comprehensive income																			(6,335	)			(1,542	)			631				(7,246	)
Balance as of December 31, 2017																		$	-			$	(1,136	)		$	(344	)		$	(1,480	)

 

(1)

During 2015, the Company began selling properties within its Canadian portfolio and has continued to liquidate its investments over the last two years. During the year ended December 31, 2017, the Company was deemed to have substantially liquidated its investment in Canada, triggered primarily by the receipt of various tax refunds, and as a result, recognized a net cumulative foreign currency translation loss as a result of the liquidation of the Company’s investment in Chile.gain. Amounts were reclassified onto the Company’s Consolidated Statements of Income as follows (i) $19.6 million of loss was reclassified to Gain on sale of operating properties, net of tax, offset by (ii) $0.8$14.8 million of gain was reclassified to Equity in income of other real estate investments, net, and (ii) $4.8 million of loss was reclassified to Equity in income of joint ventures, net.

23.	Earnings Per Share:

The following table sets forth the reconciliation of earnings and the weighted-average number of shares used in the calculation of basic and diluted earnings per share (amounts presented in thousands, except per share data):

		For the Year Ended December 31,
		2017				2016				2015
Computation of Basic and Diluted Earnings Per Share:
Income from continuing operations		$	346,133			$	299,353			$	774,405
Gain on sale of operating properties, net, net of tax			93,538				86,785				125,813
Net income attributable to noncontrolling interests			(13,596	)			(7,288	)			(6,028	)
Preferred stock redemption charge			(7,014	)			-				(5,816	)
Preferred dividends			(46,600	)			(46,220	)			(57,084	)
Earnings attributable to participating securities			(2,132	)			(2,018	)			(4,134	)
Income from continuing operations available to the Company’s common shareholders		$	370,329			$	330,612			$	827,156
Loss from discontinued operations available to the Company’s common shareholders			-				-				(75	)
Net income available to the Company’s common shareholders for basic earnings per share		$	370,329			$	330,612				827,081
Distributions on convertible units			-				-				192
Net income available to the Company’s common shareholders for diluted earnings per share		$	370,329			$	330,612			$	827,273
Weighted-average common shares outstanding – basic			423,614				418,402				411,319
Effect of dilutive securities (1):
Equity awards			405				1,307				1,414
Assumed conversion of convertible units			-				-				118
Weighted-average common shares outstanding – diluted			424,019				419,709				412,851
Basic Earnings Per Share:
Income from continuing operations		$	0.87			$	0.79			$	2.01
Net income available to the Company’s common shareholders		$	0.87			$	0.79			$	2.01
Diluted Earnings Per Share:
Income from continuing operations		$	0.87			$	0.79			$	2.00
Net income available to the Company’s common shareholders		$	0.87			$	0.79			$	2.00

(2)(1)

Amounts reclassified to Interest, dividendsThe effect of the assumed conversion of certain convertible units had an anti-dilutive effect upon the calculation of Income from continuing operations per share. Accordingly, the impact of such conversions has not been included in the determination of diluted earnings per share calculations. Additionally, there were 3,082,106, 3,490,400 and other investment income on the Company’s Consolidated Statements5,300,680 stock options that were not dilutive as of Income.December 31, 2017, 2016 and 2015, respectively.

 

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, continued

 

At December 31, 2016,The Company's unvested restricted share awards contain non-forfeitable rights to distributions or distribution equivalents. The impact of the Company had a net $6.3 million of unrealized cumulative foreign currency translation adjustment (“CTA”) gains relatingunvested restricted share awards on earnings per share has been calculated using the two-class method whereby earnings are allocated to its foreign entity investments in Canada. CTA results from currency fluctuations between local currencythe unvested restricted share awards based on dividends declared and the U.S. dollar during the periodunvested restricted shares' participation rights in which the Company held its investment. CTA amounts are subject to future changes resulting from ongoing fluctuations in the respective foreign currency exchange rates. Under U.S. GAAP, the Company is required to release CTA balances into earnings when the Company has substantially liquidated its investment in a foreign entity. During 2015, the Company began selling properties within its Canadian portfolio and as such, the Company may, in the near term, substantially liquidate its remaining investment in Canada, which will require the then unrealized gain on foreign currency translation to be recognized as a benefit toundistributed earnings.

 

24.  Supplemental Financial Information:

24.	Supplemental Financial Information (Unaudited):

 

The following represents the quarterly results of income,operations, expressed in thousands except per share amounts, for each quarter during the years 2016ended December 31, 2017 and 2015:2016:

 

		2016 (Unaudited)																2017
		Mar. 31				Jun. 30				Sept. 30				Dec. 31				First Quarter				Second Quarter				Third Quarter				Fourth Quarter
Revenues from rental properties		$	293,091			$	287,115			$	279,286			$	292,909			$	289,391			$	292,843			$	290,919			$	310,632
Net income/(loss) attributable to the Company		$	140,713			$	203,409			$	(43,545	)		$	78,273
Net income/(loss) per common share:
Net income attributable to the Company																		$	76,733			$	143,416			$	121,030			$	84,566
Net income per common share:
Basic		$	0.31			$	0.46			$	(0.13	)		$	0.16			$	0.15			$	0.31			$	0.24			$	0.17
Diluted		$	0.31			$	0.46			$	(0.13	)		$	0.16			$	0.15			$	0.31			$	0.24			$	0.17

 

		2015 (Unaudited)																2016
		Mar. 31				Jun. 30				Sept. 30				Dec. 31				First Quarter				Second Quarter				Third Quarter				Fourth Quarter
Revenues from rental properties		$	275,506			$	289,080			$	283,387			$	296,501			$	293,091			$	287,115			$	279,286			$	292,909
Net income attributable to the Company		$	310,342			$	127,000			$	77,572			$	379,201			$	140,713	��		$	203,409			$	(43,545	)		$	78,273
Net income per common share:
Basic		$	0.72			$	0.27			$	0.15			$	0.87			$	0.31			$	0.46			$	(0.13	)		$	0.16
Diluted		$	0.71			$	0.27			$	0.15			$	0.87			$	0.31			$	0.46			$	(0.13	)		$	0.16

 

25.  Captive Insurance Company:

25.	Captive Insurance Company:

 

In October 2007, the Company formed a wholly-owned captive insurance company, KIC, which provides general liability insurance coverage for all losses below the deductible under the Company’sCompany’s third-party liability insurance policy. The Company created KIC as part of its overall risk management program and to stabilize its insurance costs, manage exposure and recoup expenses through the functions of the captive program. The Company capitalized KIC in accordance with the applicable regulatory requirements. KIC established annual premiums based on projections derived from the past loss experience of the Company’s properties. KIC has engaged an independent third party to perform an actuarial estimate of future projected claims, related deductibles and projected expenses necessary to fund associated risk management programs. Premiums paid to KIC may be adjusted based on this estimate. Like premiums paid to third-party insurance companies, premiums paid to KIC may be reimbursed by tenants pursuant to specific lease terms.

 

KIC assumes occurrence basis general liability coverage (not including casualty loss or business interruption) for the Company and its affiliates under the terms of a reinsurance agreement entered into by KIC and the reinsurance provider.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, continued

 

From October 1, 2007 through October 1, 2017,2018, KIC assumes 100% of the first $250,000 per occurrence risk layer. This coverage is subject to annual aggregates ranging between $7.8 million and $11.5 million per policy year. The annual aggregate is adjustable based on the amount of audited square footage of the insureds’insureds’ locations and can be adjusted for subsequent program years. Defense costs erode the stated policy limits. KIC is required to pay the reinsurance provider for unallocated loss adjustment expenses an amount ranging between 9.5%8.0% and 12.2% of incurred losses for the policy periods ending September 30, 2008 through September 30, 2017.2018. These amounts do not erode the Company’s per occurrence or aggregate limits.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, continued

 

As of December 31, 20162017 and 2015,2016, the Company maintained a letter of credit in the amount of $23.0 million issued in favor of the reinsurance provider to provide security for the Company’s obligations under its agreement with the reinsurance provider. The letter of credit maintained as of December 31, 2016,2017, has an expiration date of February 15, 2018, with automatic renewals for one year.

 

Activity in the liability for unpaid losses and loss adjustment expenses for the years ended December 31, 20162017 and 2015,2016, is summarized as follows (in thousands):

 

		2016				2015				2017				2016
Balance at the beginning of the year		$	20,046			$	18,078			$	19,515			$	20,046
Incurred related to:
Current year			6,247				7,469				5,915				6,247
Prior years			(67	)			652				(727	)			(67	)
Total incurred			6,180				8,121				5,188				6,180
Paid related to:
Current year			(962	)			(1,214	)			(742	)			(962	)
Prior years			(5,749	)			(4,939	)			(4,996	)			(5,749	)
Total paid			(6,711	)			(6,153	)			(5,738	)			(6,711	)
Balance at the end of the year		$	19,515			$	20,046			$	18,965			$	19,515

 

For the years ended December 31, 20162017 and 2015,2016, the changes in estimates in insured events in the prior years, incurred losses and loss adjustment expenses resulted in a decrease of $0.1$0.7 million and an increase of $0.7$0.1 million, respectively, which was primarily due to continued regular favorable loss development on the general liability coverage assumed.

 

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KIMCOREALTY CORPORATION AND SUBSIDIARIESSUBSIDIARIES

 

SCHEDULE II – VALUATION AND QUALIFYING ACCOUNTS

 

For Years Ended December 31, 2017, 2016 2015 and 20142015

(in thousands)thousands)

 

		Balance at beginning of period				Charged to expenses				Adjustments to valuation accounts				Deductions				Balance at end of period
Year Ended December 31, 2016
Allowance for uncollectable accounts		$	13,918			$	5,249			$	-			$	(6,894	)		$	12,273
Allowance for deferred tax asset		$	27,905			$	-			$	67,221			$	-			$	95,126
Year Ended December 31, 2015
Allowance for uncollectable accounts		$	10,368			$	7,333			$	-			$	(3,783	)		$	13,918
Allowance for deferred tax asset		$	34,302			$	-			$	(6,397	)		$	-			$	27,905
Year Ended December 31, 2014
Allowance for uncollectable accounts		$	10,771			$	3,886			$	-			$	(4,289	)		$	10,368
Allowance for deferred tax asset		$	63,712			$	-			$	(29,410	)		$	-			$	34,302

		Balance at beginning of period				Charged to expenses				Adjustments to valuation accounts				Deductions				Balance at end of period
Year Ended December 31, 2017
Allowance for uncollectable accounts (1)		$	24,175			$	6,641			$	-			$	(13,750	)		$	17,066
Allowance for deferred tax asset		$	95,126			$	-			$	(40,971	)		$	-			$	54,155
Year Ended December 31, 2016
Allowance for uncollectable accounts (1)		$	31,820			$	7,982			$	-			$	(15,627	)		$	24,175
Allowance for deferred tax asset		$	27,905			$	-			$	67,221			$	-			$	95,126
Year Ended December 31, 2015
Allowance for uncollectable accounts (1)		$	32,509			$	11,174			$	-			$	(11,863	)		$	31,820
Allowance for deferred tax asset		$	34,302			$	-			$	(6,397	)		$	-			$	27,905

(1)     Includes allowances on accounts receivable and straight-line rents.

 

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KIMCO

KIMCO REALTY CORPORATION AND SUBSIDIARIES SCHEDULE III - REAL ESTATE AND ACCUMULATED DEPRECIATION December 31, 2016

SCHEDULE III - REAL ESTATE AND ACCUMULATED DEPRECIATION

December 31, 2017

 

			INITIAL COST								COST																				TOTAL COST,
							BUILDING				CAPTIALIZED SUBSEQUENT																				TOTAL COST,
DESCRIPTION	SUBSEQUENTState		BUILDINGLAND			ACCUMULATED	NET OF ACCUMULATEDBUILDING AND IMPROVEMENTS				DATE OFTO ACQUISITION (1)		DATE OF
	LAND				& IMPROVEMENTBUILDING AND IMPROVEMENTS				TO ACQUISITIONTOTAL				LANDACCUMULATED DEPRECIATION				& IMPROVEMENTNET OF ACCUMULATED DEPRECIATION				TOTALENCUMBRANCES (2)				DEPRECIATIONDATE OF ACQUISITION(A)				DEPRECIATIONDATE OF CONSTRUCTION(C)		ENCUMBRANCES	ACQUISITION(A)	CONSTRUCTION(C)
KEY BANK BUILDINGSHOPPING CENTERS
DISTRICT AT TUSTIN	1,500,000CA	40,486,755	(12,256,024)	672,719 $106,128,741	29,058,012	29,730,731	18,250,563	11,480,168 $208,876,066	-	2006		$724,025				$106,128,741				$209,600,091				$315,728,832				$8,983,313				$306,745,519				$204,468,426				2017
THE GROVE	18,951,763	6,403,809	2,321,874	6,793,454	20,883,992	27,677,446	6,572,921	21,104,525	-AL		2007
EL MIRAGE	6,786,441	503,987	130,064	6,786,441	634,051	7,420,492	73,155	7,347,337	- 18,951,763		2008		6,403,809				3,070,025				6,793,454				21,632,143				28,425,597				6,959,991				21,465,606				-								2007
TALAVI TOWN CENTER	8,046,677AZ	17,291,542	394,536	8,046,677	17,686,078	25,732,755	10,390,068	15,342,687 17,291,542	-			(25,338,219	)			-				-				-				-				-				-				2007
MESA PAVILIONS NORTH	6,060,018AZ	35,955,005	24,517	6,060,018	35,979,522	42,039,540	7,909,208	34,130,332 35,955,005	-			867,624				6,060,018				36,822,629				42,882,647				8,815,702				34,066,945				-				2009
MESA RIVERVIEW	15,000,000	-	139,963,982	307,992	154,655,990	154,963,982	48,059,971	106,904,011	-AZ			15,000,000				-				142,768,268				307,992				157,460,276				157,768,268				53,514,318				104,253,950				-								2005
MESA PAVILLIONS - SOUTH	-AZ	148,508	99,649	-	248,157	248,157	96,454	151,703 148,508	-			100,577				-				249,085				249,085				118,929				130,156				-				2011
METRO SQUARE	4,101,017AZ	16,410,632	1,249,341	4,101,017	17,659,973	21,760,990	8,377,898	13,383,092 16,410,632	-			1,357,963				4,101,017				17,768,595				21,869,612				8,875,277				12,994,335				-				1998
HAYDEN PLAZA NORTH	2,015,726AZ	4,126,509	5,114,019	2,015,726	9,240,528	11,256,254	4,030,084	7,226,170 4,126,509	-			(5,588,937	)			122,085				431,213				553,298				197,517				355,781				-				1998
PLAZA DEL SOL	5,324,502AZ	21,269,943	2,164,169	4,577,870 5,324,501	24,180,744	28,758,614	8,268,728	20,489,886 21,269,943	-			2,030,572				4,577,869				24,047,147				28,625,016				8,739,179				19,885,837				-				1998
PLAZA @AT MOUNTAINSIDE	2,450,341AZ	9,802,046	1,809,711	2,450,341	11,611,757	14,062,098	5,707,659	8,354,439 9,802,046	-			2,092,808				2,450,341				11,894,854				14,345,195				6,103,826				8,241,369				-				1997
VILLAGE CROSSROADS	5,662,554AZ	24,981,223	607,424	5,662,554	25,588,647	31,251,201	4,248,058	27,003,143 24,981,223	-			688,411				5,662,554				25,669,634				31,332,188				4,876,413				26,455,775				-				2011
NORTH VALLEY	6,861,564AZ	18,200,901	6,140,408	3,861,272 6,861,564	27,341,601	31,202,873	4,277,047	26,925,826 18,200,901	-			6,384,423				3,861,272				27,585,616				31,446,888				4,969,361				26,477,527				-				2011
CHRISTOWN SPECTRUM	33,831,349	91,004,070	12,655,279	76,638,512	60,852,186	137,490,698	5,027,963	132,462,735	63,919,515	2015
ASANTE RETAIL CENTER	8,702,635	3,405,683	2,866,807	11,039,471	3,935,654	14,975,125	422,495	14,552,630	-AZ		2004
SURPRISE SPECTRUM	4,138,760	94,572	1,035	4,138,760	95,607	4,234,367	11,331	4,223,036	- 33,831,348		2008		91,004,070				15,350,895				76,638,511				63,547,802				140,186,313				8,849,280				131,337,033				61,850,278				2015
BELL CAMINO CENTER	2,427,465AZ	6,439,065	209,620	2,427,465	6,648,685	9,076,150	1,662,105	7,414,045 6,439,065	-			449,983				2,427,465				6,889,048				9,316,513				1,826,375				7,490,138				-				2012
COLLEGE PARK SHOPPING CENTER	3,276,952AZ	7,741,323	937,255	3,276,952 3,276,951	8,678,578	11,955,530	2,032,716	9,922,814 7,741,323	-			1,112,006				3,276,951				8,853,329				12,130,280				2,316,908				9,813,372				-				2011
COSTCO PLAZA - 541	4,995,639CA	19,982,557	454,041	4,995,639	20,436,598	25,432,237	9,919,333	15,512,904 19,982,557	-			534,161				4,995,639				20,516,718				25,512,357				10,476,795				15,035,562				-				1998
BROOKHURST CENTER	10,492,714CA	31,357,513	-	10,492,715 10,492,714	31,357,512	41,850,227	170,330	41,679,897 31,357,512	-			838,456				22,299,852				20,388,830				42,688,682				1,737,221				40,951,461				-				2016
LAKEWOOD PLAZA	1,294,176CA	3,669,266	(90,654)	- 1,294,176	4,872,788	4,872,788	1,253,991	3,618,797 3,669,266	-			50,291				-				5,013,733				5,013,733				1,686,188				3,327,545				-				2014
MADISON PLAZA	5,874,396CA	23,476,190	2,639,269	5,874,395 5,874,396	26,115,460	31,989,855	11,883,068	20,106,787 23,476,190	-			2,128,333				5,874,396				25,604,523				31,478,919				12,534,740				18,944,179				-				1998
BROADWAY PLAZA - 544	6,460,743CA	25,863,153	12,015,147	6,460,743	37,878,300	44,339,043	15,834,816	28,504,227 25,863,153	-			12,142,497				6,460,743				38,005,650				44,466,393				16,786,365				27,680,028				-				1998
CORONA HILLS PLAZA	13,360,965CA	53,373,453	7,747,951	13,360,965	61,121,404	74,482,369	30,140,783	44,341,586 53,373,453	-			8,024,150				13,360,965				61,397,603				74,758,568				32,234,761				42,523,807				-				1998
280 METRO CENTER	38,734,566CA	94,903,404	978,329	38,734,567 38,734,566	95,881,732	134,616,299	8,594,553	126,021,746 94,903,403	-			1,922,348				38,734,566				96,825,751				135,560,317				10,563,254				124,997,063				-				2015
LABAND VILLAGE SHOPPING CENTER	5,600,000CA	13,289,347	161,263	5,607,237 5,600,000	13,443,373	19,050,610	7,224,966	11,825,644 13,289,347	8,089,040			450,236				5,607,237				13,732,346				19,339,583				7,289,456				12,050,127				-				2008
CUPERTINO VILLAGE	19,886,099CA	46,534,919	21,651,908	19,886,099	68,186,827	88,072,926	18,539,471	69,533,455 46,534,919	-			24,291,806				19,886,099				70,826,725				90,712,824				19,498,273				71,214,551				-				2006
NORTH COUNTY PLAZA	10,205,305CA	28,934,219	(1,428,787)	20,894,811 10,205,305	16,815,926	37,710,737	2,511,204	35,199,533 28,934,219	-			(1,000,334	)			20,894,811				17,244,379				38,139,190				3,159,099				34,980,091				-				2014
CHICO CROSSROADS	9,975,810CA	30,534,524	1,278,945	9,985,651 9,975,810	31,803,628	41,789,279	8,872,060	32,917,219 30,534,524	-			1,363,692				9,985,652				31,888,374				41,874,026				9,649,420				32,224,606				-				2008
CHICO EAST & ESPLANADE(RALEYS)ESPLANADE	2,508,716CA	12,886,184	(1,312,384)	2,284,856 2,508,716	11,797,660	14,082,516	687,471	13,395,045 12,886,184	3,994,238			(1,312,383	)			2,508,716				11,573,801				14,082,517				1,046,152				13,036,365				3,544,259				2015
CORONA HILLS MARKETPLACE	9,727,446	24,778,390	667,593	9,727,446	25,445,983	35,173,429	8,199,536	26,973,893	-	2007CA
RIVER PARK CROSSING	4,324,000 9,727,446	18,018,653	1,136,480	4,324,000	19,155,133 24,778,390	23,479,133	3,859,696	19,619,437	- 703,539	2009			9,727,446				25,481,929				35,209,375				8,709,352				26,500,023				-				2007
CREEKSIDE CENTER	3,870,823CA	11,562,580	-	3,870,823	11,562,580	15,433,403	62,601	15,370,802 11,562,580	-			(477,027	)			5,154,061				9,802,315				14,956,376				577,653				14,378,723				-				2016
GOLD COUNTRY CENTER	3,272,212CA	7,864,878	29,687	3,278,290 3,272,212	7,888,487	11,166,777	3,425,408	7,741,369 7,864,878	-			29,687				3,278,290				7,888,487				11,166,777				3,737,079				7,429,698				-				2008
LA MIRADA THEATRE CENTER	8,816,741CA	35,259,965	(3,469,732)	6,888,680 8,816,741	33,718,294	40,606,974	14,838,975	25,767,999 35,259,965	-			(3,325,358	)			6,888,680				33,862,668				40,751,348				15,984,250				24,767,098				-				1998
KENNETH HAHN PLAZA	4,114,863CA	7,660,855	880,557	4,114,863	8,541,412	12,656,275	3,046,335	9,609,940 7,660,855	-			1,478,281				4,114,863				9,139,136				13,253,999				3,158,669				10,095,330				-				2010
LA VERNE TOWN CENTER	8,414,328CA	23,856,418	10,840,420	16,362,169 8,414,328	26,748,997	43,111,166	2,401,901	40,709,265 23,856,418	-			10,759,800				16,362,169				26,668,377				43,030,546				3,263,071				39,767,475				-				2014
LINCOLN HILLS TOWN CENTER	8,228,587CA	26,127,322	28,378	8,228,586 8,228,587	26,155,701	34,384,287	2,281,415	32,102,872 26,127,322	24,416,451			132,829				8,228,587				26,260,151				34,488,738				3,199,334				31,289,404				-				2015
NOVATO FAIR S.C.	9,259,778CA	15,599,790	723,259	9,259,778	16,323,049	25,582,827	5,779,281	19,803,546 15,599,790	-			997,511				9,259,778				16,597,301				25,857,079				6,336,610				19,520,469				-				2009
SOUTH NAPA MARKET PLACE	1,100,000CA	22,159,086	20,615,121	23,119,071 1,100,000	20,755,136	43,874,207	9,867,595	34,006,612 22,159,086	-			20,615,121				23,119,071				20,755,136				43,874,207				10,843,098				33,031,109				-				2006
PLAZA DI NORTHRIDGE	12,900,000CA	40,574,842	892,428	12,900,000	41,467,270	54,367,270	14,601,761	39,765,509 40,574,842	-			1,665,373				12,900,000				42,240,215				55,140,215				15,177,905				39,962,310				-				2005
LINDA MAR SHPPING CENTER	16,548,592CA	37,521,194	1,418,767	16,548,592	38,939,961	55,488,553	5,972,288	49,516,265 37,521,194	-			1,776,093				16,548,592				39,297,287				55,845,879				7,472,546				48,373,333				-				2014
POWAY CITY CENTRE	5,854,585CA	13,792,470	8,378,985	7,247,813 5,854,585	20,778,227	28,026,040	8,030,783	19,995,257 13,792,470	-			8,516,118				7,247,814				20,915,359				28,163,173				8,448,941				19,714,232				-				2005
REDWOOD CITY PLAZA	2,552,000CA	6,215,168	5,900,877	2,552,000	12,116,045	14,668,045	1,083,976	13,584,069 6,215,168	-			5,900,877				2,552,000				12,116,045				14,668,045				1,463,911				13,204,134				-				2009
STANFORD RANCH	10,583,764CA	30,007,231	(1,670,000)	9,982,626 10,583,764	28,938,369	38,920,995	2,938,618	35,982,377 30,007,231	14,751,853			3,430,053				9,982,626				34,038,422				44,021,048				3,539,167				40,481,881				14,191,062				2014
TYLER STREET PLAZA	3,020,883CA	7,811,339	(12,456)	3,200,516 3,020,883	7,619,250	10,819,766	2,612,860	8,206,906 7,811,339	-			83,425				3,200,516				7,715,131				10,915,647				2,746,206				8,169,441				-				2008
CROCKER RANCH	7,526,146CA	24,877,611	16,984	7,526,146	24,894,595	32,420,741	1,545,850	30,874,891 24,877,611	11,237,112			104,542				7,526,146				24,982,153				32,508,299				2,355,316				30,152,983				10,445,001				2015
HOME DEPOT PLAZA	4,592,364CA	18,345,258	-	4,592,365 4,592,364	18,345,257	22,937,622	8,870,544	14,067,078 18,345,257	-			-				4,592,364				18,345,257				22,937,621				9,354,408				13,583,213				-				1998
SANTEE TROLLEY SQUARE	40,208,683CA	62,963,757	535,614	40,208,683	63,499,371	103,708,054	13,018,268	90,689,786 62,963,757	-			292,910				40,208,683				63,256,667				103,465,350				15,500,852				87,964,498				-				2015
SAN/DIEGO CARMEL MOUNTAIN	5,322,600CA	8,873,991	88,334	5,322,600	8,962,325	14,284,925	2,125,865	12,159,060 8,873,991	-			121,022				5,322,600				8,995,013				14,317,613				2,307,020				12,010,593				-				2009
FULTON MARKET PLACE	2,966,018	6,920,710	1,237,558	2,966,018	8,158,268	11,124,286	2,988,086	8,136,200	-	2005CA
MARIGOLD SHOPPING CENTER	15,300,000	25,563,978	4,183,111	15,300,000	29,747,089	45,047,089	14,620,807	30,426,282	-	2005 2,966,018
CANYON SQUARE PLAZA	2,648,112	13,876,095 6,920,710	978,581	2,648,112	14,854,676	17,502,788 16,305,019	2,484,006	15,018,782	-	2013 6,518,924				19,672,823				26,191,747				3,192,067				22,999,680				-				2005
BLACK MOUNTAIN VILLAGE	4,678,015CA	11,913,344	684,763	4,678,014 4,678,015	12,598,108	17,276,122	4,228,513	13,047,609 11,913,344	-			756,865				4,678,015				12,670,209				17,348,224				4,508,096				12,840,128				-				2007
RANCHO PENASQUITOS TOWNE CTR I	14,851,595CA	20,342,165	304,024	14,851,595	20,646,189	35,497,784	1,745,657	33,752,127 20,342,165	14,384,811			247,359				14,851,595				20,589,524				35,441,119				2,374,587				33,066,532				13,884,779				2015
RANCHO PENASQUITOS TWN CTR.CTR II	12,944,972CA	20,323,961	177,977	12,944,972	20,501,938	33,446,910	1,794,662	31,652,248 20,323,961	11,038,466			608,243				12,944,972				20,932,204				33,877,176				2,445,136				31,432,040				10,654,756				2015
CITY HEIGHTS	10,687,472CA	28,324,896	(752,643)	13,908,563 10,687,472	24,351,162	38,259,725	2,778,412	35,481,313 28,324,896	-			(732,313	)			13,908,563				24,371,492				38,280,055				3,404,559				34,875,496				-				2012
TRUCKEE CROSSROADS	2,140,000CA	8,255,753	1,146,729	2,140,000	9,402,482	11,542,482	5,382,067	6,160,415 8,255,753	2,340,536			1,619,484				2,140,000				9,875,237				12,015,237				5,557,970				6,457,267				2,074,100				2006
GATEWAY AT DONNER PASS	4,515,688CA	8,318,667	226,813	4,515,688	8,545,480	13,061,168	997,166	12,064,002 8,318,667	2,719,649			237,945				4,515,688				8,556,612				13,072,300				1,156,392				11,915,908				2,356,820				2015
WESTLAKE SHOPPING CENTER	16,174,307CA	64,818,562	99,467,618	16,174,307	164,286,180	180,460,487	48,298,485	132,162,002 64,818,562	-			100,795,455				16,174,307				165,614,017				181,788,324				52,777,883				129,010,441				-				2002
LAKEWOOD VILLAGE	CA			8,597,100				24,374,615				(1,119,844	)			11,683,364				20,168,507				31,851,871				3,499,437				28,352,434				-				2014
WHITTWOOD TOWN CENTER	24,374,615CA	(1,241,442)	11,683,364	20,046,909 57,135,695	31,730,273	2,648,966	29,081,307	- 105,814,560	2014			79,752				57,137,989				105,892,018				163,030,007				1,408,261				161,621,746				45,117,369				2017
SAVI RANCH	7,295,646CA	29,752,511	126,568	7,295,646	29,879,079	37,174,725	4,753,605	32,421,120 29,752,511	-			(188,067	)			7,295,646				29,564,444				36,860,090				5,529,067				31,331,023				-				2012
VILLAGE ON THE PARK	2,194,463CO	8,885,987	9,224,144	3,018,391 2,194,463	17,286,203	20,304,594	5,791,482	14,513,112 8,885,987	-			9,895,270				3,018,391				17,957,329				20,975,720				7,731,431				13,244,289				-				1998
QUINCY PLACE S.C.	1,148,317CO	4,608,249	1,611,804	1,148,318 1,148,317	6,220,052	7,368,370	2,869,681	4,498,689 4,608,249	-			1,645,217				1,148,317				6,253,466				7,401,783				3,132,940				4,268,843				-				1998
EAST BANK S.C.	1,500,568CO	6,180,103	1,873,781	1,500,568	8,053,884	9,554,452	3,620,475	5,933,977 6,180,103	-			2,359,399				1,500,568				8,539,502				10,040,070				3,945,851				6,094,219				-				1998
NORTHRIDGE SHOPPING CENTER	4,932,690CO	16,496,176	1,722,954	8,934,385 4,932,690	14,217,435	23,151,820	1,758,919	21,392,901 16,496,175	-			1,865,017				8,934,385				14,359,497				23,293,882				2,274,998				21,018,884				-				2013
SPRING CREEK S.C.	1,423,260CO	5,718,813	(1,654,650)	603,270 1,423,260	4,884,153	5,487,423	3,549,720	1,937,703 5,718,813	-			(1,539,783	)			592,896				5,009,394				5,602,290				3,734,127				1,868,163				-				1998
DENVER WEST 38TH STREET	161,167CO	646,983	69	161,167	647,052	808,219	313,795	494,424 646,983	-			41,853				161,167				688,836				850,003				330,384				519,619				-				1998
ENGLEWOOD PLAZA	805,837CO	3,232,650	442,081	805,836 805,837	3,674,732	4,480,568	1,798,011	2,682,557 3,232,650	-			564,167				805,837				3,796,817				4,602,654				1,925,245				2,677,409				-				1998
FORT COLLINS S.C.	1,253,497CO	7,625,278	1,599,607	1,253,496 1,253,497	9,224,886	10,478,382	3,647,392	6,830,990 7,625,278	-			1,599,608				1,253,497				9,224,886				10,478,383				3,882,582				6,595,801				-				2000
GREELEY COMMONS	3,313,095CO	20,069,559	104,137	3,313,095	20,173,696	23,486,791	3,605,618	19,881,173 20,069,559	-			104,137				3,313,095				20,173,696				23,486,791				4,108,294				19,378,497				-				2012
HIGHLANDS RANCH VILLAGE S.C.	8,135,427CO	21,579,936	(659,420)	5,337,081 8,135,427	23,718,862	29,055,943	3,641,248	25,414,695 21,579,936	-			(544,584	)			5,337,081				23,833,698				29,170,779				4,184,418				24,986,361				-				2011
VILLAGE CENTER WEST	2,010,519CO	8,361,085	60,687	2,010,520 2,010,519	8,421,771	10,432,291	1,248,737	9,183,554 8,361,084	5,503,328			203,885				2,010,519				8,564,969				10,575,488				1,448,222				9,127,266				-				2011
HIGHLANDS RANCH II	3,514,837CO	11,755,916	204,961	3,514,837	11,960,877	15,475,714	2,272,093	13,203,621 11,755,916	-			354,284				3,514,837				12,110,200				15,625,037				2,729,678				12,895,359				-				2013
HIGHLANDSVILLAGE CENTER - HIGHLAND RANCH PARCEL	1,140,000CO	2,660,000	64,239	1,140,000	2,724,239	3,864,239	120,726	3,743,513 2,660,000	-			277,159				1,140,000				2,937,159				4,077,159				184,584				3,892,575				-				2014
HERITAGE WEST S.C.	1,526,576CO	6,124,074	1,126,064	1,526,576	7,250,138	8,776,714	3,320,154	5,456,560 6,124,074	-			1,702,094				1,526,576				7,826,168				9,352,744				3,555,249				5,797,495				-				1998
MARKET AT SOUTHPARK	9,782,769CO	20,779,522	264,140	9,782,769	21,043,662	30,826,431	3,881,881	26,944,550 20,779,522	-			541,956				9,782,769				21,321,478				31,104,247				4,557,442				26,546,805				-				2011
NEWTOWN S.C.	-CT	15,635,442	-	-	15,635,442	15,635,442	1,421,090	14,214,352 15,635,442	8,502,201			-				-				15,635,442				15,635,442				1,763,731				13,871,711				7,889,936				2014
WEST FARM SHOPPING CENTER	5,805,969CT	23,348,024	14,403,752	7,585,116 5,805,969	35,972,629	43,557,745	13,063,627	30,494,118 23,348,024	-			15,727,758				7,585,116				37,296,635				44,881,751				14,349,914				30,531,837				-				1998
HAMDEN MART	13,668,167CT	40,890,166	-	13,668,167	40,890,166	54,558,333	221,050	54,337,283 40,890,166	22,404,073			4,224,199				14,225,573				44,556,959				58,782,532				2,984,228				55,798,304				21,498,278				2016
HOME DEPOT PLAZA	7,704,968CT	30,797,640	2,712,557	7,704,968	33,510,197	41,215,165	13,564,341	27,650,824 30,797,640	-			3,061,389				7,704,968				33,859,029				41,563,997				14,718,770				26,845,227				-				1998
WILTON RIVER PARK SHOPPING CTR	7,154,585CT	27,509,279	(224,537)	7,154,585	27,284,742	34,439,327	3,581,639	30,857,688 27,509,279	-			(56,109	)			7,154,584				27,453,171				34,607,755				4,329,368				30,278,387				-				2012
BRIGHT HORIZONS	1,211,748CT	4,610,610	9,499	1,211,748	4,620,109	5,831,857	684,714	5,147,143 4,610,610	-			9,499				1,211,748				4,620,109				5,831,857				839,744				4,992,113				-				2012
WILTON CAMPUS	10,168,872CT	31,893,016	254,233	10,168,872	32,147,249	42,316,121	6,500,963	35,815,158 31,893,016	-			317,485				10,168,872				32,210,501				42,379,373				7,466,715				34,912,658				-				2013
CAMDEN SQUARE	122,741DE	66,738	4,309,722	3,024,375 122,741	1,474,826	4,499,201	155,208	4,343,993 66,738	-			4,502,409				3,024,375				1,667,513				4,691,888				181,042				4,510,846				-				2003
PROMENADE AT CHRISTIANA (3)	14,371,686	-	11,148,877	25,520,563	-	25,520,563	-	25,520,563	-DE			14,371,686				-				18,503,592				32,875,278				-				32,875,278				-				32,875,278				-								2014
BRANDYWINE COMMONS	-DE	36,057,487	(505,731)	-	35,551,756	35,551,756	3,276,507	32,275,249 36,057,487	-			1,823,593				-				37,881,080				37,881,080				4,486,979				33,394,101				-				2014
CAMINO SQUARE	573,875FL	2,295,501	2,665,024	733,875 573,875	4,800,525	5,534,400	3,636,784	1,897,616 2,295,501	-			2,714,483				733,875				4,849,984				5,583,859				3,872,616				1,711,243				-				1992
BONITA GRANDE CROSSINGS	3,370,941FL	8,179,481	52,500	3,370,941	8,231,981	11,602,922	668,033	10,934,889 8,179,481	-			234,356				3,370,941				8,413,837				11,784,778				993,508				10,791,270				-				2015
HOLLYWOOD VIDEO BONITA GRANDE	341,958FL	771,935	-	341,958	771,935	1,113,893	68,673	1,045,220 771,935	-			-				341,958				771,935				1,113,893				93,941				1,019,952				-				2015
CORAL SQUARE PROMENADE	710,000FL	2,842,907	3,993,496	710,000	6,836,403	7,546,403	3,565,857	3,980,546 2,842,907	-			4,023,496				710,000				6,866,403				7,576,403				3,791,207				3,785,196				-				1994
MAPLEWOOD PLAZA	1,649,000FL	6,626,301	1,161,119	1,649,000	7,787,420	9,436,420	3,541,619	5,894,801 6,626,301	-			1,306,059				1,649,000				7,932,360				9,581,360				3,792,560				5,788,800				-				1997
CURLEW CROSSING SHOPPING CTR	5,315,955FL	12,529,467	2,107,472	5,315,954 5,315,955	14,636,940	19,952,894	5,461,751	14,491,143 12,529,467	-			2,393,045				5,315,955				14,922,512				20,238,467				5,962,584				14,275,883				-				2005
SHOPS AT SANTA BARBARA PHASE 1	743,463FL	5,373,994	-	743,463	5,373,994	6,117,457	462,609	5,654,848 5,373,994	-			80,505				743,463				5,454,499				6,197,962				647,135				5,550,827				-				2015
SHOPS AT SANTA BARBARA PHASE 2	331,692FL	2,488,832	-	331,692	2,488,832	2,820,524	200,524	2,620,000 2,488,832	-			-				331,692				2,488,832				2,820,524				303,632				2,516,892				-				2015
SHOPS AT SANTA BARBARA PHASE 3	329,726FL	2,358,700	(12,082)	329,726	2,346,618	2,676,344	217,112	2,459,232 2,358,700	-			61,618				329,726				2,420,318				2,750,044				276,810				2,473,234				-				2015
CORAL POINTE S.C.	2,411,608FL	20,507,735	(25,164)	2,411,608	20,482,571	22,894,179	1,580,664	21,313,515 20,507,735	-			213,166				2,411,608				20,720,901				23,132,509				2,362,743				20,769,766				-				2015
PUBLIX AT ADDISON	3,211,156FL	6,747,895	��                                  -	3,211,156	6,747,895	9,959,051	350,697	9,608,354 6,747,895	-			-				3,211,156				6,747,895				9,959,051				533,669				9,425,382				-				2015
ADDISON CENTER PROF.BUILDING	802,789FL	1,310,012	(45,779)	802,789	1,264,233	2,067,022	75,322	1,991,700 1,310,012	-			(61,362	)			802,789				1,248,650				2,051,439				105,019				1,946,420				-				2015
DANIA POINTE (3)	105,113,024FL	-	2,000,000	107,113,024 105,113,024	-	107,113,024	-	107,113,024 -	-			47,727,558				152,840,582				-				152,840,582				-				152,840,582				-				2016				2016
FT.LAUDERDALE/CYPRESS CREEK	14,258,760FL	28,042,390	2,415,038	14,258,760	30,457,428	44,716,188	9,171,140	35,545,048 28,042,390	-			1,982,805				14,258,760				30,025,195				44,283,955				9,170,634				35,113,321				-				2009
HOMESTEAD-WACHTEL LAND LEASE	150,000FL	-	-	150,000	-	150,000	-	150,000 -	-			-				150,000				-				150,000				-				150,000				-				2013
OAKWOOD PLAZA NORTH	35,300,961FL	141,731,019	-	35,300,961	141,731,019	177,031,980	4,333,815	172,698,165 141,731,019	100,000,000			162,764				35,300,961				141,893,783				177,194,744				9,869,863				167,324,881				100,000,000				2016
OAKWOOD PLAZA SOUTH	11,126,610FL	40,592,103	-	11,126,610 11,126,609	40,592,103	51,718,713	1,487,871	50,230,842 40,592,103	-			200,905				11,126,609				40,793,008				51,919,617				3,187,414				48,732,203				-				2016
OAKWOOD BUSINESS CTR-BLDG 1	6,792,500FL	18,662,565	3,027,668	6,792,500	21,690,233	28,482,733	5,592,134	22,890,599 18,662,565	-			3,065,679				6,792,500				21,728,244				28,520,744				6,216,521				22,304,223				-				2009
AMELIA CONCOURSE	7,600,000	-	2,508,435	676,791	9,431,644	10,108,435	2,819,327	7,289,108	-FL			7,600,000				-				2,279,068				498,680				9,380,388				9,879,068				3,063,630				6,815,438				-								2003
KIMCO AVENUES WALK, LLC (3)	26,984,546	-	47,260,955	29,784,056	44,461,445	74,245,501	63,344	74,182,157	-FL			26,984,546				-				21,588,299				-				48,572,845				48,572,845				-				48,572,845				-								2005
2005AVENUES WALK	FL			8,169,933				20,173,468				(18,870,745	)			2,711,057				6,761,599				9,472,656				395,121				9,077,535				-				2017
DUVAL STATION S.C.	1,807,792FL	11,863,692	114,840	1,807,792	11,978,532	13,786,324	828,285	12,958,039 11,863,692	-			114,840				1,807,792				11,978,532				13,786,324				1,244,732				12,541,592				-				2015
RIVERPLACE SHOPPING CTR.	7,503,282FL	31,011,027	1,375,379	7,200,050 7,503,282	32,689,638	39,889,688	8,655,946	31,233,742 31,011,027	-			1,662,341				7,200,050				32,976,600				40,176,650				9,409,835				30,766,815				-				2010
MERCHANTS WALK	2,580,816FL	10,366,090	6,496,524	2,580,816	16,862,614	19,443,430	7,283,589	12,159,841 10,366,090	-			6,681,476				2,580,816				17,047,566				19,628,382				8,173,678				11,454,704				-				2001
WAL-MART PLAZACENTER AT MISSOURI AVENUE	293,686	792,119	1,726,636	293,686	2,518,755	2,812,441	2,210,865	601,576	��             -FL		1968
LEESBURG SHOPS	-	171,636	193,651	-	365,287	365,287	365,287	-	- 293,686		1969		792,119				6,291,221				293,686				7,083,340				7,377,026				1,647,444				5,729,582				-								1968
TRI-CITY PLAZA	2,832,296FL	11,329,185	19,606,325	2,832,296	30,935,510	33,767,806	2,730,210	31,037,596 11,329,185	-			20,422,836				2,832,296				31,752,021				34,584,317				3,569,889				31,014,428				-				1992
FT LAUDERDALE #1, FL	1,002,733	2,602,415	12,831,516	1,774,443	14,662,221	16,436,664	9,613,856	6,822,808	-FL		1974
LAKE WALES S.C.	601,052 1,002,733	-	-	601,052	- 2,602,415	601,052	-	601,052	- 13,141,950	2009			1,774,443				14,972,655				16,747,098				9,967,674				6,779,424				-								1974
NASA PLAZA	-	1,754,000	2,653,265	-	4,407,265	4,407,265	3,243,997	1,163,268	-FL			-				1,754,000				3,347,355				-				5,101,355				5,101,355				3,941,287				1,160,068				-								1968
GROVE GATE S.C.	365,893	1,049,172	1,207,100	365,893	2,256,272	2,622,165	1,959,640	662,525	-FL			365,893				1,049,172				792,700				365,893				1,841,872				2,207,765				1,567,731				640,034				-								1968
CHEVRON OUTPARCEL	530,570FL	1,253,410	-	530,570	1,253,410	1,783,980	334,762	1,449,218 1,253,410	-			-				530,570				1,253,410				1,783,980				356,499				1,427,481				-				2010
IVES DAIRY CROSSING	732,914FL	4,080,460	11,065,138	732,914	15,145,598	15,878,512	9,101,199	6,777,313 4,080,460	-			11,183,306				720,852				15,275,828				15,996,680				9,421,495				6,575,185				-				1985
MILLER ROAD S.C.	1,138,082FL	4,552,327	4,535,416	1,138,082	9,087,743	10,225,825	5,760,824	4,465,001 4,552,327	-			4,560,187				1,138,082				9,112,514				10,250,596				5,883,832				4,366,764				-				1986
TRI-CITIES SHOPPING PLAZA	1,011,000FL	4,062,890	3,190,909	1,011,000	7,253,799	8,264,799	596,772	7,668,027 4,062,890	-			3,202,734				1,011,000				7,265,624				8,276,624				796,633				7,479,991				-				1997
KENDALE LAKES PLAZA	18,491,461	28,496,001	(2,055,786)	15,362,227	29,569,449	44,931,676	6,605,625	38,326,051	-	2009
PLANTATION CROSSING	7,524,800	-	(5,003,280)	2,008,617	512,903	2,521,520	91,054	2,430,466	-FL		2005	18,491,461				28,496,001				(1,996,609	)			15,362,227				29,628,626				44,990,853				7,300,120				37,690,733				-				2009
CENTRE OF MERRITT	1,806,275FL	9,592,435	-	1,806,275	9,592,435	11,398,710	623,343	10,775,367 9,592,435	-			-				1,806,275				9,592,435				11,398,710				939,539				10,459,171				-				2015
MILLER WEST PLAZA	6,725,660FL	10,661,420	-	6,725,660	10,661,420	17,387,080	774,598	16,612,482 10,661,419	-			228,663				6,725,660				10,890,082				17,615,742				1,159,951				16,455,791				-				2015
CORSICA SQUARE S.C.	7,225,100	10,757,386	112,000	7,225,100	10,869,386	18,094,486	918,110	17,176,376	10,840,743	2015FL
MILTON, FL	1,275,593 7,225,100	-	-	1,275,593	- 10,757,386	1,275,593	-	1,275,593	- 129,489	2007			7,225,100				10,886,875				18,111,975				1,263,335				16,848,640				-				2015
FLAGLER PARK	26,162,980FL	80,737,041	3,482,952	26,725,480 26,162,980	83,657,493	110,382,973	20,442,791	89,940,182 80,737,041	-			3,628,420				26,725,480				83,802,961				110,528,441				22,448,579				88,079,862				-				2007
PARK HILL PLAZA	10,763,612FL	19,264,248	187,262	10,763,612	19,451,510	30,215,122	3,784,223	26,430,899 19,264,248	-			262,118				10,763,612				19,526,366				30,289,978				4,215,691				26,074,287				-				2011
WINN DIXIE-MIAMI	2,989,640FL	9,410,360	(51,872)	3,544,297 2,989,640	8,803,831	12,348,128	677,157	11,670,971 9,410,360	-			(51,872	)			3,544,297				8,803,831				12,348,128				896,776				11,451,352				-				2013
MARATHON SHOPPING CENTER	2,412,929FL	8,069,450	1,013,493	1,514,731 2,412,929	9,981,141	11,495,872	1,112,710	10,383,162 8,069,450	-			1,045,327				1,514,731				10,012,975				11,527,706				1,505,904				10,021,802				-				2013
SODO S.C.	-FL	68,139,271	8,283,273	142,195 -	76,280,349	76,422,544	16,306,907	60,115,637 68,139,271	-			8,516,523				142,195				76,513,599				76,655,794				18,774,702				57,881,092				-				2008
RENAISSANCE CENTER	9,104,379FL	36,540,873	14,913,118	9,122,758 9,104,379	51,435,612	60,558,370	17,171,361	43,387,009 36,540,873	-			14,919,342				9,122,758				51,441,836				60,564,594				18,762,491				41,802,103				-				1998
MILLENIA PLAZA PHASE II	7,711,000FL	20,702,992	1,650,193	7,698,200 7,711,000	22,365,985	30,064,185	7,880,425	22,183,760 20,702,992	-			1,506,264				7,698,200				22,222,056				29,920,256				8,248,249				21,672,007				-				2009
RIVERSIDE LANDINGS S.C.	3,512,202FL	14,439,668	96,924	3,512,202	14,536,592	18,048,794	1,012,519	17,036,275 14,439,668	-			276,235				3,512,202				14,715,903				18,228,105				1,495,774				16,732,331				-				2015
GRAND OAKS VILLAGE	7,409,319FL	19,653,869	(627,365)	5,846,339 7,409,319	20,589,484	26,435,823	3,451,536	22,984,287 19,653,869	-			(683,921	)			5,846,339				20,532,928				26,379,267				3,936,281				22,442,986				-				2011
LOWES S.C.PLANTATION CROSSING	1,620,203FL	-	40,689	954,876 2,782,030	706,016	1,660,892	125,514	1,535,378 8,077,260	-	2007		3,606,250				2,782,030				11,683,510				14,465,540				351,464				14,114,076				-				2017
POMPANO POINTE S.C.	10,516,500FL	10,469,592	530,900	10,516,500	11,000,492	21,516,992	456,268	21,060,724 14,078,456	-			530,900				10,516,500				14,609,356				25,125,856				726,848				24,399,008				-				2012
UNIVERSITY TOWN CENTER	5,515,265FL	13,041,400	426,693	5,515,265	13,468,093	18,983,358	2,378,907	16,604,451 13,041,400	-			477,832				5,515,265				13,519,232				19,034,497				2,831,595				16,202,902				-				2011
PALM BEACH GARDENS	2,764,953FL	11,059,812	668,875	2,764,953	11,728,687	14,493,640	1,551,717	12,941,923 11,059,812	-			826,309				2,764,953				11,886,121				14,651,074				1,776,729				12,874,345				-				2009
OAK TREE PLAZA	-	917,360	1,562,941	-	2,480,301	2,480,301	1,264,152	1,216,149	-FL			-				917,360				1,562,194				-				2,479,554				2,479,554				1,345,760				1,133,794				-								1968
TUTTLEBEE PLAZA	254,961FL	828,465	2,142,270	254,961	2,970,735	3,225,696	2,193,861	1,031,835 828,465	-			1,676,908				254,961				2,505,373				2,760,334				1,805,032				955,302				-				2008
SOUTH MIAMI S.C.	1,280,440FL	5,133,825	3,121,059	1,280,440	8,254,884	9,535,324	4,254,038	5,281,286 5,133,825	-			3,452,430				1,280,440				8,586,255				9,866,695				4,492,631				5,374,064				-				1995
CARROLLWOOD COMMONS	5,220,445FL	16,884,228	2,339,166	5,220,445	19,223,394	24,443,839	8,996,615	15,447,224 16,884,228	-			2,855,466				5,220,445				19,739,694				24,960,139				9,563,475				15,396,664				-				1997
VILLAGE COMMONS SHOPPING CENT.	2,192,331FL	8,774,158	2,760,666	2,192,331	11,534,824	13,727,155	5,417,404	8,309,751 8,774,158	-			4,605,195				2,192,331				13,379,353				15,571,684				5,647,685				9,923,999				-				1998
MISSION BELL SHOPPING CENTER	5,056,426FL	11,843,119	8,634,466	5,067,033 5,056,426	20,466,978	25,534,011	6,509,898	19,024,113 11,843,119	-			8,681,231				5,067,033				20,513,743				25,580,776				6,924,869				18,655,907				-				2004
VILLAGE COMMONS S.C.	2,026,423FL	5,106,476	1,923,704	2,026,423	7,030,180	9,056,603	1,236,632	7,819,971 5,106,476	-			2,031,564				2,026,423				7,138,040				9,164,463				1,408,765				7,755,698				-				2013
BELMART PLAZA	1,656,097	3,394,420	5,585,602	1,656,097	8,980,022	10,636,119	403,154	10,232,965	-	2014FL
AUGUSTA SQUARE	1,482,564 1,656,097	5,928,122	2,007,334	1,482,564	7,935,456 3,394,420	9,418,020	4,260,861	5,157,159	- 5,648,437	1995			1,656,097				9,042,857				10,698,954				665,211				10,033,743				-				2014
MARKET AT HAYNES BRIDGE	4,880,659GA	21,549,424	1,238,043	4,889,863 4,880,659	22,778,263	27,668,126	6,751,969	20,916,157 21,549,424	-			1,168,508				4,889,863				22,708,728				27,598,591				7,296,311				20,302,280				-				2008
EMBRY VILLAGE	18,147,054GA	33,009,514	908,584	18,160,525 18,147,054	33,904,627	52,065,152	17,260,605	34,804,547 33,009,514	-			1,143,200				18,160,525				34,139,243				52,299,768				24,236,617				28,063,151				-				2008
PERIMETER EXPO PROPERTY	14,770,275GA	44,295,457	-	14,770,275	44,295,457	59,065,732	477,748	58,587,984 44,295,457	40,983,821			(867,262	)			16,142,152				42,056,318				58,198,470				2,323,047				55,875,423				-				2016
RIVERWALK MARKETPLACE	3,512,202GA	18,862,571	-	3,512,202	18,862,571	22,374,773	995,324	21,379,449 18,862,571	-			(25,121	)			3,512,202				18,837,450				22,349,652				1,407,453				20,942,199				-				2015
VILLAGE SHOPPES-FLOWERY BRANCH	4,444,148GA	10,510,657	303,983	4,444,148	10,814,640	15,258,788	2,395,174	12,863,614 10,510,657	-			361,219				4,444,148				10,871,876				15,316,024				2,865,087				12,450,937				-				2011
LAWRENCEVILLE MARKET	8,878,266GA	29,691,191	(44,182)	9,060,436 8,878,266	29,464,839	38,525,275	4,125,715	34,399,560 29,691,191	-			297,965				9,060,436				29,806,986				38,867,422				5,116,031				33,751,391				-				2013
FIVE FORKS CROSSING	2,363,848GA	7,906,257	372,465	2,363,848	8,278,722	10,642,570	1,646,665	8,995,905 7,906,257	-			391,047				2,363,848				8,297,304				10,661,152				1,801,564				8,859,588				-				2013
BRAELINN VILLAGE	7,314,719GA	20,738,792	1,149,049	6,342,926 7,314,719	22,859,634	29,202,560	2,185,264	27,017,296 20,738,792	-			1,684,923				6,342,926				23,395,508				29,738,434				2,948,266				26,790,168				-				2014
SAVANNAH CENTER	2,052,270GA	8,232,978	3,599,399	2,052,270	11,832,377	13,884,647	6,520,291	7,364,356 8,232,978	-			4,034,349				2,052,270				12,267,327				14,319,597				6,940,835				7,378,762				-				1993
CHATHAM PLAZA	13,390,238GA	35,115,882	2,092,634	13,403,262 13,390,238	37,195,492	50,598,754	12,496,124	38,102,630 35,115,882	-			969,942				13,403,262				36,072,800				49,476,062				12,411,308				37,064,754				-				2008
CLIVE PLAZA	500,525IA	2,002,101	-	500,525	2,002,101	2,502,626	1,073,777	1,428,849 2,002,101	-			-				500,525				2,002,101				2,502,626				1,125,113				1,377,513				-				1996
DUBUQUE CENTER	-	2,152,476	239,217	-	2,391,693	2,391,693	1,516,782	874,911	-	1997
TREASURE VALLEY	6,501,240	-	(4,284,637)	1,110,530	1,106,073	2,216,603	127,733	2,088,870	-IA		2005
BLOOMINGTON COMMONS	805,521	2,222,353	4,494,864	805,521	6,717,217	7,522,738	4,816,390	2,706,348	-		1972		2,152,476				239,217				-				2,391,693				2,391,693				1,778,184				613,509				-				1997
87TH STREET CENTER	-IL	2,687,046	8,092,727	6,992,648 -	3,787,125	10,779,773	2,284,313	8,495,460 2,687,046	-			11,446,720				6,992,648				7,141,118				14,133,766				2,620,820				11,512,946				-				1997
ELSTON CHICAGO	1,010,374IL	5,692,212	498,828	1,010,374	6,191,040	7,201,414	2,763,188	4,438,226 5,692,212	-			498,828				1,010,374				6,191,040				7,201,414				2,930,108				4,271,306				-				1997
DOWNERS PARK PLAZA	2,510,455IL	10,164,494	1,967,032	2,510,455	12,131,526	14,641,981	5,418,098	9,223,883 10,164,494	-			2,025,382				2,510,455				12,189,876				14,700,331				5,738,993				8,961,338				-				1999
DOWNERS PARK PLAZA	811,778IL	4,322,956	3,348,460	811,778	7,671,416	8,483,194	3,600,499	4,882,695 4,322,956	-			3,475,523				811,778				7,798,479				8,610,257				3,908,642				4,701,615				-				1997
TOWN & COUNTRY S.C.	842,555	2,108,674	2,767,311	500,927	5,217,613	5,718,540	3,320,591	2,397,949	-IL			842,555				2,108,674				3,902,011				500,927				6,352,313				6,853,240				4,456,553				2,396,687				-								1972
FAIRVIEW CITY CENTRE	IL			-				11,866,880				16,189,869				1,900,000				26,156,749				28,056,749				2,424,561				25,632,188				-				1998
PLAZA DEL PRADO	11,866,880IL	12,943,654	1,900,000	22,910,534 10,203,960	24,810,534	1,853,323	22,957,211	- 28,409,786	1998			1,032,958				10,203,960				29,442,744				39,646,704				2,027,639				37,619,065				-				2017
SHOPS AT KILDEER	5,259,542IL	28,141,501	2,486,761	5,259,542	30,628,262	35,887,804	4,422,498	31,465,306 28,141,501	-			2,673,272				5,259,542				30,814,773				36,074,315				5,575,517				30,498,798				-				2013
MOUNT PROSPECT CENTER	1,017,345IL	6,572,176	4,047,329	1,017,345	10,619,505	11,636,850	5,762,647	5,874,203 6,572,176	-			4,100,013				1,017,345				10,672,189				11,689,534				6,096,302				5,593,232				-				1997
MUNDELEIN SHOPPING CENTER	1,127,720	5,826,129	136,968	1,129,634	5,961,183	7,090,817	2,800,456	4,290,361	-	1998IL
MARKETPLACE OF OAKLAWN	- 1,127,720	678,668	108,483	-	787,151 5,826,129	787,151	714,718	72,433	- (2,606,024	)			366,184				3,981,641				4,347,825				2,954,890				1,392,935				-				1998
OAK LAWN CENTER	1,530,111IL	8,776,631	666,590	1,530,111	9,443,221	10,973,332	4,656,435	6,316,897 8,776,631	-			709,090				1,530,111				9,485,721				11,015,832				4,920,379				6,095,453				-				1997
22ND STREET PLAZA	1,527,188	8,679,108	4,081,004	1,527,188	12,760,112	14,287,300	5,611,968	8,675,332	-	1997IL
ROCKFORD CROSSINGS	4,575,990 1,527,188	11,654,022	(2,628,093)	3,816,080	9,785,839 8,679,108	13,601,919	3,208,253	10,393,666	- 4,880,654	2008			1,527,188				13,559,762				15,086,950				5,954,279				9,132,671				-				1997
SKOKIE POINTE	-IL	2,276,360	9,487,443	2,628,440 -	9,135,363	11,763,803	3,686,787	8,077,016 2,276,360	-			9,564,305				2,628,440				9,212,225				11,840,665				3,925,602				7,915,063				-				1997
HAWTHORN HILLS SQUARE	6,783,928IL	33,033,624	4,028,883	6,783,928	37,062,507	43,846,435	6,266,665	37,579,770 33,033,624	19,375,231			2,814,620				6,783,928				35,848,244				42,632,172				6,962,156				35,670,016				-				2012
WOODGROVE FESTIVAL	5,049,149IL	20,822,993	5,130,768	4,805,866 5,049,149	26,197,044	31,002,910	12,562,704	18,440,206 20,822,993	-			5,345,619				4,805,866				26,411,895				31,217,761				13,423,088				17,794,673				-				1998
GROVE PARCEL	907,291IL	2,240,810	-	907,291	2,240,810	3,148,101	216,402	2,931,699 2,240,810	-			134,130				907,291				2,374,940				3,282,231				307,428				2,974,803				-				2016
WOODRIDGE PAD	702,757IL	1,746,223	-	702,757	1,746,223	2,448,980	81,704	2,367,276 1,746,223	-			-				702,757				1,746,223				2,448,980				136,201				2,312,779				-				2016
GREENWOOD S.C.	423,371	1,883,421	10,388,475	1,801,822	10,893,445	12,695,267	4,145,861	8,549,406	-IN			423,371				1,883,421				12,488,773				1,640,748				13,154,817				14,795,565				7,376,514				7,419,051				-								1970
SOUTH PARK S.C.	1,675,031	6,848,209	6,362,777	1,551,079	13,334,938	14,886,017	7,913,763	6,972,254	-	1993KY
CENTRE AT WESTBANK	9,554,230	24,401,082	1,070,226	9,329,880	25,695,658	35,025,538	8,296,073	26,729,465	18,533,743	2008 1,675,031
AMBASSADOR PLAZA	1,803,672	4,260,966	251,561	1,796,972	4,519,227	6,316,199	1,186,224	5,129,975	4,374,638	2010
EAST SIDE PLAZA 6,848,209	3,295,799	7,785,942	180,773	3,295,635 6,546,359	7,966,879	11,262,514	2,197,127	9,065,387 1,551,079	-	2010		13,518,520				15,069,599				8,250,684				6,818,915				-				1993
ABINGTON PLAZA	10,457,183MA	494,652	-	10,457,183	494,652	10,951,835	89,429	10,862,406 494,652	4,387,721			-				10,457,183				494,652				10,951,835				122,964				10,828,871				3,990,344				2014
WASHINGTON ST.PLAZA	11,007,593MA	5,652,368	8,851,085	12,957,593 11,007,593	12,553,453	25,511,046	878,925	24,632,121 5,652,368	5,914,448			8,961,280				12,957,593				12,663,648				25,621,241				1,482,715				24,138,526				5,733,076				2014
MEMORIAL PLAZA	16,411,388MA	27,553,908	323,380	16,411,388	27,877,288	44,288,676	2,467,356	41,821,320 27,553,908	16,309,360			743,083				16,411,388				28,296,991				44,708,379				3,059,584				41,648,795				15,809,216				2014
MAIN ST. PLAZA	555,898MA	2,139,494	-	555,898	2,139,494	2,695,392	215,377	2,480,015 2,139,494	1,375,084			-				555,898				2,139,494				2,695,392				296,143				2,399,249				1,324,212				2014
MORRISSEY PLAZA	4,097,251MA	3,751,068	-	4,097,251	3,751,068	7,848,319	505,455	7,342,864 3,751,068	3,150,546			-				4,097,251				3,751,068				7,848,319				695,001				7,153,318				3,033,988				2014
GLENDALE SQUARE	4,698,891MA	7,141,090	133,070	4,698,891	7,274,160	11,973,051	920,547	11,052,504 7,141,090	5,647,196			276,270				4,698,891				7,417,360				12,116,251				1,140,566				10,975,685				5,474,019				2014
FALMOUTH PLAZA	2,361,071MA	13,065,817	334,684	2,361,071	13,400,501	15,761,572	1,276,155	14,485,417 13,065,817	7,946,761			847,281				2,361,071				13,913,098				16,274,169				1,696,974				14,577,195				7,703,065				2014
WAVERLY PLAZA	1,215,005	3,622,911	5,426	1,203,205	3,640,137	4,843,342	443,908	4,399,434	2,317,720	2014MA
BARRINGTON PLAZA S.C.	642,170 1,215,005	2,547,830	7,667,513	751,124	10,106,389 3,622,911	10,857,513	4,923,540	5,933,973	- 60,809	1994			1,203,205				3,695,520				4,898,725				611,406				4,287,319				2,231,974				2014
FESTIVAL OF HYANNIS S.C.	15,038,197MA	40,682,853	948,247	15,038,197	41,631,100	56,669,297	5,524,945	51,144,352 40,682,853	-			1,488,072				15,038,197				42,170,925				57,209,122				7,155,488				50,053,634				-				2014
FELLSWAY PLAZA	5,300,388MA	11,013,543	92,558	5,300,388	11,106,101	16,406,489	1,145,971	15,260,518 11,013,543	6,742,131			127,563				5,300,388				11,141,106				16,441,494				1,536,348				14,905,146				6,535,377				2014
DEL ALBA PLAZA	3,163,033MA	8,967,874	19,995	3,163,033	8,987,869	12,150,902	665,099	11,485,803 8,967,874	7,942,609			19,995				3,163,033				8,987,869				12,150,902				908,085				11,242,817				7,628,034				2014
NORTH QUINCY PLAZA	6,332,542MA	17,954,110	(782,383)	3,894,436 6,332,542	19,609,833	23,504,269	1,591,805	21,912,464 17,954,110	-			(991,929	)			3,894,436				19,400,287				23,294,723				2,035,103				21,259,620				-				2014
ADAMS PLAZA	2,089,363MA	3,226,648	248,359	2,089,363	3,475,007	5,564,370	307,934	5,256,436 3,226,648	1,870,765			(40,155	)			2,089,363				3,186,493				5,275,856				391,361				4,884,495				1,813,396				2014
BROADWAY PLAZA	6,485,065	343,422	-	6,485,065	343,422	6,828,487	67,420	6,761,067	2,870,966	2014MA
SHREWSBURY S.C.	1,284,168 6,485,065	5,284,853	5,466,855	1,284,168	10,751,708 343,422	12,035,876	4,277,257	7,758,619	-	2000			6,485,065				343,422				6,828,487				92,703				6,735,784				2,782,925				2014
VINNIN SQUARE PLAZA	5,545,425MA	16,324,060	(214,252)	5,545,425	16,109,808	21,655,233	2,032,293	19,622,940 16,324,060	9,173,706			(150,434	)			5,545,425				16,173,626				21,719,051				2,699,267				19,019,784				8,834,315				2014
PARADISE PLAZA	4,183,038MA	12,194,885	536,224	4,183,038	12,731,109	16,914,147	1,470,800	15,443,347 12,194,885	8,865,650			1,151,422				4,183,038				13,346,307				17,529,345				2,027,671				15,501,674				8,537,656				2014
BELMONT PLAZA	11,104,983MA	848,844	-	11,104,983	848,844	11,953,827	112,244	11,841,583 848,844	5,237,954			-				11,104,983				848,844				11,953,827				154,335				11,799,492				5,044,171				2014
VINNIN SQUARE IN-LINE	582,228MA	2,094,560	(109,616)	582,228	1,984,944	2,567,172	196,341	2,370,831 2,094,560	-			(38,716	)			582,228				2,055,844				2,638,072				234,248				2,403,824				-				2014
LINDEN PLAZA	4,628,215MA	3,535,431	437,334	4,628,215	3,972,765	8,600,980	555,369	8,045,611 3,535,431	3,527,131			655,320				4,628,215				4,190,751				8,818,966				759,317				8,059,649				3,418,968				2014
NORTH AVE. PLAZA	1,163,875MA	1,194,673	15,933	1,163,875	1,210,606	2,374,481	149,740	2,224,741 1,194,673	897,489			15,933				1,163,875				1,210,606				2,374,481				205,892				2,168,589				869,967				2014
WASHINGTON ST. S.C.	7,380,918MA	9,987,119	391,907	7,380,918	10,379,026	17,759,944	887,059	16,872,885 9,987,119	6,286,514			1,786,055				7,380,918				11,773,174				19,154,092				1,233,520				17,920,572				6,053,938				2014
MILL ST. PLAZA	4,195,024MA	6,203,410	205,071	4,195,024	6,408,481	10,603,505	821,636	9,781,869 6,203,410	4,110,675			136,079				4,195,024				6,339,489				10,534,513				914,061				9,620,452				3,958,596				2014
FULLERTON PLAZA	14,237,901MD	6,743,980	(352,777)	14,237,901	6,391,203	20,629,104	855,593	19,773,511 6,743,980	12,551,399			524,940				14,237,901				7,268,920				21,506,821				1,006,841				20,499,980				-				2014
GREENBRIER S.C.	8,891,468MD	30,304,760	(48,812)	8,891,468	30,255,948	39,147,416	2,842,793	36,304,623 30,304,760	12,488,817			149,632				8,891,468				30,454,392				39,345,860				3,668,094				35,677,766				-				2014
INGLESIDE S.C.	10,416,726MD	17,889,235	(156,601)	10,416,726	17,732,634	28,149,360	2,186,844	25,962,516 17,889,235	19,320,814			(2,058	)			10,416,726				17,887,177				28,303,903				2,712,912				25,590,991				-				2014
ROLLING ROAD PLAZA	2,510,395MD	11,930,217	(82,994)	2,508,715 2,510,395	11,848,903	14,357,618	904,646	13,452,972 11,930,217	-			(4,309,151	)			1,694,305				8,437,156				10,131,461				1,239,336				8,892,125				-				2015
SECURITY SQUARE SHOPPING CTR.	5,342,463MD	15,147,024	(3,355,446)	4,572,639 5,342,463	12,561,402	17,134,041	1,269,556	15,864,485 15,147,024	16,221,870			(3,326,568	)			4,550,533				12,612,386				17,162,919				1,779,927				15,382,992				-				2014
WILKENS BELTWAY PLAZA	9,948,235MD	22,125,942	147,794	9,948,235	22,273,736	32,221,971	2,730,525	29,491,446 22,125,942	-			280,251				9,948,235				22,406,193				32,354,428				5,095,879				27,258,549				-				2014
YORK ROAD PLAZA	4,276,715MD	37,205,757	29,473	4,276,715	37,235,230	41,511,945	3,247,427	38,264,518 37,205,757	-			80,167				4,276,715				37,285,924				41,562,639				4,110,990				37,451,649				-				2014
PUTTY HILL PLAZA	4,192,152MD	11,112,111	456,319	4,192,152	11,568,430	15,760,582	2,153,516	13,607,066 11,112,111	-			555,260				4,192,152				11,667,371				15,859,523				2,728,389				13,131,134				-				2013
SNOWDEN SQUARE S.C.	1,929,402MD	4,557,934	5,155,349	3,326,422 1,929,402	8,316,263	11,642,685	1,213,234	10,429,451 4,557,934	-			5,155,349				3,326,422				8,316,263				11,642,685				1,577,155				10,065,530				-				2012
COLUMBIA CROSSING	3,612,550MD	34,344,509	159,554	3,612,550	34,504,063	38,116,613	2,323,495	35,793,118 34,344,509	-			336,277				3,612,550				34,680,786				38,293,336				3,391,814				34,901,522				-				2015
DORSEY'S SEARCH VILLAGE CENTER	6,321,963MD	27,996,087	(33,532)	6,321,963	27,962,555	34,284,518	1,673,230	32,611,288 27,996,087	-			83,766				6,321,963				28,079,853				34,401,816				2,501,718				31,900,098				-				2015
HICKORY RIDGE	7,183,646MD	26,947,776	469,483	7,183,646	27,417,259	34,600,905	2,333,408	32,267,497 26,947,776	-			486,138				7,183,646				27,433,914				34,617,560				3,037,925				31,579,635				-				2015
HICKORY RIDGE (SUNOCO)	543,197MD	2,122,234	-	543,197	2,122,234	2,665,431	174,802	2,490,629 2,122,234	-			-				543,197				2,122,234				2,665,431				266,003				2,399,428				-				2015
KINGS CONTRIVANCE	9,308,349MD	31,759,940	289,751	9,308,349	32,049,691	41,358,040	2,880,736	38,477,304 31,759,940	23,036,820			503,400				9,308,349				32,263,340				41,571,689				3,907,886				37,663,803				-				2014
HARPER'S CHOICE	8,429,284MD	18,373,994	246,478	8,429,284	18,620,472	27,049,756	1,475,298	25,574,458 18,373,994	-			434,377				8,429,284				18,808,371				27,237,655				2,194,028				25,043,627				-				2015
WILDE LAKE	1,468,038MD	5,869,862	22,579,270	2,577,073 1,468,038	27,340,097	29,917,170	8,351,586	21,565,584 5,869,862	-			25,718,069				2,577,073				30,478,896				33,055,969				8,989,662				24,066,307				-				2002
RIVERHILL VILLAGE CENTER	16,825,496MD	23,282,222	156,233	16,825,496	23,438,455	40,263,951	2,955,172	37,308,779 23,282,222	22,686,843			171,904				16,825,496				23,454,126				40,279,622				4,064,952				36,214,670				-				2014
OLD BRANCH PLAZA	39,779MD	130,716	2,026,165	121,747 39,779	2,074,913	2,196,660	246,706	1,949,954 130,716	-			2,117,165				121,747				2,165,913				2,287,660				431,151				1,856,509				-				2003
COLUMBIA CROSSING OUTPARCELS	1,279,200MD	2,870,800	13,977,613	4,597,200 1,279,200	13,530,413	18,127,613	1,993,683	16,133,930 2,870,800	-			19,241,721				6,147,248				17,244,473				23,391,721				2,576,298				20,815,423				-				2011
COLUMBIA CROSSING II SHOP.CTR.	3,137,628MD	19,868,075	2,625,989	3,137,628	22,494,064	25,631,692	3,667,910	21,963,782 19,868,075	-			2,632,554				3,137,628				22,500,629				25,638,257				4,218,320				21,419,937				-				2013
SHOPS AT DISTRICT HEIGHTS	8,165,638MD	21,970,661	(1,396,775)	7,298,215 8,165,638	21,441,309	28,739,524	754,538	27,984,986 21,970,661	14,005,190			(1,272,892	)			7,298,215				21,565,192				28,863,407				1,442,361				27,421,046				13,604,533				2015
ENCHANTED FOREST S.C.	20,123,946MD	34,345,102	145,118	20,123,946	34,490,220	54,614,166	4,157,739	50,456,427 34,345,102	-			400,985				20,123,946				34,746,087				54,870,033				5,046,478				49,823,555				-				2014
SHOPPES AT EASTON	6,523,713MD	16,402,204	93,697	6,523,713	16,495,901	23,019,614	1,549,799	21,469,815 16,402,204	-			(2,576,752	)			5,687,500				14,661,665				20,349,165				2,061,372				18,287,793				-				2014
VILLAGES AT URBANA	3,190,074MD	6,067	13,493,944	4,828,774 3,190,074	11,861,311	16,690,085	1,531,750	15,158,335 6,067	-			18,075,503				4,828,774				16,442,870				21,271,644				1,717,904				19,553,740				-				2003
GAITHERSBURG S.C.	244,890MD	6,787,534	384,231	244,890	7,171,765	7,416,655	3,110,363	4,306,292 6,787,534	-			1,549,116				244,890				8,336,650				8,581,540				3,411,441				5,170,099				-				1999
KENTLANDS MARKET SQUARE	20,167,048MD	84,615,052	-	20,167,048	84,615,052	104,782,100	1,569,436	103,212,664 84,615,052	34,521,793			359,626				20,167,048				84,974,678				105,141,726				6,980,403				98,161,323				33,484,213				2016
SHAWAN PLAZA	4,466,000MD	20,222,367	(1,451,885)	4,466,000	18,770,482	23,236,482	10,346,400	12,890,082 20,222,367	4,270,079			(571,103	)			4,466,000				19,651,264				24,117,264				11,145,763				12,971,501				2,998,379				2008
LAUREL PLAZA	349,562MD	1,398,250	3,704,961	1,571,288 349,562	3,881,485	5,452,773	1,731,567	3,721,206 1,398,250	-			4,277,983				1,571,288				4,454,507				6,025,795				1,904,201				4,121,594				-				1995
LAUREL PLAZA	274,580	1,100,968	173,969	274,580	1,274,937	1,549,517	1,156,349	393,168	-MD		1972
NORTH EAST STATION	8,219,613 274,580	9,536,990	(4,446,037)	5,593,160	7,717,406 1,100,968	13,310,566	1,127,040	12,183,526	8,276,083 173,969	2014			274,580				1,274,937				1,549,517				1,173,495				376,022				-								1972
OWINGS MILLSMILL STATION THEATER/RSTRNTS (3)	23,378,543MD	1,089,760	16,500,314	39,856,836 23,378,543	1,111,781	40,968,617	67,754	40,900,863 1,089,760	-			25,751,974				49,084,509				1,135,768				50,220,277				119,049				50,101,228				-				2015				2016
CENTRE COURT-RETAIL/BANK	1,035,359MD	7,785,830	(76,204)	1,035,359	7,709,626	8,744,985	1,175,696	7,569,289 7,785,830	1,907,905			65,996				1,035,359				7,851,826				8,887,185				1,332,233				7,554,952				1,705,341				2011
CENTRE COURT-GIANT	3,854,099MD	12,769,628	-	3,854,099	12,769,628	16,623,727	2,045,590	14,578,137 12,769,628	6,208,957			-				3,854,099				12,769,628				16,623,727				2,396,262				14,227,465				5,827,854				2011
CENTRE COURT-OLD COURT/COURTYD	2,279,177MD	5,284,577	(177)	2,279,177	5,284,400	7,563,577	913,182	6,650,395 5,284,577	-			(177	)			2,279,177				5,284,400				7,563,577				1,037,897				6,525,680				-				2011
RADCLIFFE CENTER	12,042,713MD	21,187,946	-	12,042,713	21,187,946	33,230,659	2,067,536	31,163,123 21,187,946	-			-				12,042,713				21,187,946				33,230,659				2,746,518				30,484,141				-				2014
TIMONIUM CROSSING	2,525,377MD	14,862,817	339,960	2,525,377	15,202,777	17,728,154	1,626,614	16,101,540 14,862,817	14,623,506			540,195				2,525,377				15,403,012				17,928,389				2,144,459				15,783,930				-				2014
TIMONIUM SQUARE	6,000,000MD	24,282,998	14,483,175	7,331,195 6,000,000	37,434,978	44,766,173	15,649,683	29,116,490 24,282,998	-			14,432,527				7,331,195				37,384,330				44,715,525				15,963,855				28,751,670				-				2003
TOWSON PLACE	43,886,876	101,764,931	613,012	43,270,792	102,994,027	146,264,819	16,147,159	130,117,660	-	2012MD
MALLSIDE PLAZA	6,930,996 43,886,876	18,148,727	(1,781,449)	5,956,485	17,341,789 101,764,931	23,298,274	6,672,789	16,625,485	- 1,168,691	2008			43,270,792				103,549,706				146,820,498				19,056,834				127,763,664				-				2012
WHITE LAKE COMMONS	2,300,050MI	9,249,607	3,264,058	2,300,050	12,513,665	14,813,715	6,292,985	8,520,730 9,249,607	-			2,569,183				2,300,050				11,818,790				14,118,840				6,805,501				7,313,339				-				1996
DOWNTOWN FARMINGTON CENTER	1,098,426	4,525,723	4,277,242	1,098,426	8,802,965	9,901,391	3,010,957	6,890,434	-	1993MI
FLINT - VACANT LAND	101,424 1,098,426	-	-	101,424	- 4,525,723	101,424	-	101,424	- 5,620,128	2012			1,098,426				10,145,851				11,244,277				3,285,643				7,958,634				-				1993
CENTURY PLAZA	178,785	925,818	1,224,093	178,785	2,149,911	2,328,696	1,593,653	735,043	-MI			178,785				925,818				893,501				178,785				1,819,319				1,998,104				1,391,481				606,623				-								1968
CROSS CREEK S.C.	1,451,397MI	5,806,263	647,769	1,451,397	6,454,032	7,905,429	3,662,287	4,243,142 5,806,263	-			653,261				1,451,397				6,459,524				7,910,921				3,862,120				4,048,801				-				1993
GREEN ORCHARD SHOPPING CENTER	3,682,478MI	14,730,060	5,711,459	3,682,478	20,441,519	24,123,997	9,908,388	14,215,609 14,730,060	-			5,961,459				3,682,478				20,691,519				24,373,997				10,568,412				13,805,585				-				1993
THE FOUNTAINS AT ARBOR LAKES	28,585,296MN	66,699,024	13,287,679	29,485,296 28,585,296	79,086,703	108,571,999	24,480,182	84,091,817 66,699,024	-			13,518,386				29,485,296				79,317,410				108,802,706				27,021,705				81,781,001				-				2006
ROSEVILLE PLAZA	132,842MN	957,340	9,736,267	1,675,667 132,842	9,150,782	10,826,449	1,457,654	9,368,795 957,340	-			9,881,853				1,675,667				9,296,368				10,972,035				1,826,063				9,145,972				-				2005
CREVE COUER SHOPPING CENTER	1,044,598	5,475,623	896,084	960,814	6,455,491	7,416,305	2,959,637	4,456,668	-	1998MO
NORTH POINT SHOPPING CENTER	1,935,380 1,044,598	7,800,746	933,471	1,935,380	8,734,217 5,475,623	10,669,597	4,077,420	6,592,177	- 1,095,602				960,814				6,655,009				7,615,823				3,135,156				4,480,667				-				1998
KIRKWOOD CROSSING	-MO	9,704,005	14,512,599	-	24,216,604	24,216,604	14,603,879	9,612,725 9,704,005	-			14,520,796				-				24,224,801				24,224,801				15,172,754				9,052,047				-				1998
LEMAY S.C.	125,879	503,510	3,846,838	451,155	4,025,072	4,476,227	1,662,327	2,813,900	-MO			125,879				503,510				3,673,917				451,155				3,852,151				4,303,306				1,562,794				2,740,512				-								1974
GRAVOIS PLAZA	1,032,416	4,455,514	11,033,266	1,032,413	15,488,783	16,521,196	9,021,664	7,499,532	-	2008MO
HOME DEPOT PLAZA	431,960 1,032,416	-	758,855	431,960	758,855 4,455,514	1,190,815	307,406	883,409	- 11,398,264	1998			1,032,413				15,853,781				16,886,194				9,612,922				7,273,272				-				2008
PRIMROSE MARKET PLACE	2,745,595MO	10,985,778	8,433,741	2,904,022 2,745,595	19,261,092	22,165,114	10,101,312	12,063,802 10,985,778	-			8,738,775				2,904,022				19,566,126				22,470,148				10,835,691				11,634,457				-				1994
PRIMROSE MARKETPLACE	905,674MO	3,666,386	5,261,809	905,674	8,928,195	9,833,869	3,206,994	6,626,875 3,666,386	127,225			5,324,000				905,674				8,990,386				9,896,060				3,457,177				6,438,883				-				2002
CENTER POINT S.C.	-MO	550,204	-	-	550,204	550,204	357,716	192,488 550,204	-			-				-				550,204				550,204				423,712				126,492				-				1998
KINGS HIGHWAY S.C.	809,087MO	4,430,514	2,781,299	809,087	7,211,813	8,020,900	3,372,037	4,648,863 4,430,514	-			2,776,341				809,087				7,206,855				8,015,942				3,564,339				4,451,603				-				1998
OVERLAND CROSSING	-MO	4,928,677	759,896	-	5,688,573	5,688,573	3,156,042	2,532,531 4,928,677	-			740,346				-				5,669,023				5,669,023				3,479,162				2,189,861				-				1997
CAVE SPRINGS S.C.	1,182,194	7,423,459	7,110,186	1,563,694	14,152,145	15,715,839	10,167,687	5,548,152	-	1997MO
SPRINGFIELD S.C.	-	608,793	11,012,797	8,800,000	2,821,590	11,621,590	1,260,636	10,360,954	-	1998 1,182,194
OVERLOOK VILLAGE	8,276,500	17,249,587 7,423,459	212,226	8,276,500	17,461,813	25,738,313 7,112,686	3,204,115	22,534,198	-	2012 1,563,694				14,154,645				15,718,339				10,368,503				5,349,836				-				1997
WOODLAWN MARKETPLACE	919,251NC	3,570,981	2,621,647	919,251	6,192,628	7,111,879	3,174,870	3,937,009 3,570,981	-			2,740,450				919,251				6,311,431				7,230,682				3,476,390				3,754,292				-				2008
TYVOLA SQUARE	-NC	4,736,345	6,968,268	-	11,704,613	11,704,613	8,870,713	2,833,900 4,736,345	-			7,612,562				-				12,348,907				12,348,907				9,299,343				3,049,564				-				1986
CROSSROADS PLAZA	767,864NC	3,098,881	1,233,350	767,864	4,332,231	5,100,095	1,574,024	3,526,071 3,098,881	-			1,233,350				767,864				4,332,231				5,100,095				1,744,160				3,355,935				-				2000
JETTON VILLAGE SHOPPES	3,875,224NC	10,292,231	263,116	2,143,695 3,875,224	12,286,876	14,430,571	1,761,917	12,668,654 10,292,231	-			444,020				2,143,695				12,467,780				14,611,475				2,121,243				12,490,232				-				2011
MOUNTAIN ISLAND MARKETPLACE	3,318,587NC	7,331,413	736,014	3,818,587 3,318,587	7,567,427	11,386,014	1,291,311	10,094,703 7,331,413	-			749,369				3,818,587				7,580,782				11,399,369				1,452,069				9,947,300				-				2012
WOODLAWN SHOPPING CENTER	2,010,725NC	5,833,626	1,550,109	2,010,725	7,383,735	9,394,460	946,605	8,447,855 5,833,626	-			1,691,133				2,010,725				7,524,759				9,535,484				1,204,350				8,331,134				-				2012
CROSSROADS PLAZA	13,405,529NC	86,455,763	(540,910)	13,405,529	85,914,853	99,320,382	11,613,154	87,707,228 86,455,763	70,739,527			(198,549	)			13,405,529				86,257,214				99,662,743				13,895,239				85,767,504				-				2014
QUAIL CORNERS	7,318,321NC	26,675,644	1,326,080	7,318,321	28,001,724	35,320,045	2,468,557	32,851,488 26,675,644	16,975,639			1,361,806				7,318,321				28,037,450				35,355,771				3,168,511				32,187,260				16,323,912				2014
OAKCREEK VILLAGE	1,882,800NC	7,551,576	2,333,493	1,882,800	9,885,069	11,767,869	5,331,393	6,436,476 7,551,576	-			(9,434,376	)			-				-				-				-				-				-				1996
DAVIDSON COMMONS	2,978,533	12,859,867	194,020	2,978,533	13,053,887	16,032,420	1,849,478	14,182,942	-	2012NC
SENATE/HILLSBOROUGH CROSSI	519,395 2,978,533	-	-	519,395	- 12,859,867	519,395	-	519,395	- 633,088	2003			2,978,533				13,492,955				16,471,488				2,287,031				14,184,457				-				2012
PARK PLACE SC	5,461,478NC	16,163,494	320,144	5,469,809 5,461,478	16,475,307	21,945,116	6,841,674	15,103,442 16,163,494	-			(484,835	)			5,469,809				15,670,328				21,140,137				6,444,538				14,695,599				-				2008
MOORESVILLE CROSSING	12,013,727NC	30,604,173	109,598	11,625,801 12,013,727	31,101,697	42,727,498	10,220,209	32,507,289 30,604,173	-			193,886				11,625,801				31,185,985				42,811,786				11,327,237				31,484,549				-				2007
PLEASANT VALLEY PROMENADE	5,208,885	20,885,792	13,796,952	5,208,885	34,682,744	39,891,629	19,390,497	20,501,132	-	1993
WAKEFIELD COMMONS III	6,506,450	-	(5,120,646)	1,843,341	(457,537)	1,385,804	221,296	1,164,508	-NC		2001
WAKEFIELD CROSSINGS	3,413,932	-	(3,017,959)	336,236	59,737	395,973	6,960	389,013	- 5,208,885		2001		20,885,792				13,481,663				5,208,885				34,367,455				39,576,340				19,878,739				19,697,601				-				1993
BRENNAN STATION	7,749,751NC	20,556,891	(700,646)	6,321,923 7,749,751	21,284,073	27,605,996	4,474,520	23,131,476 20,556,891	-			(637,688	)			6,321,923				21,347,031				27,668,954				5,245,854				22,423,100				-				2011
BRENNAN STATION OUTPARCEL	627,906NC	1,665,576	(93,482)	450,232 627,906	1,749,768	2,200,000	347,904	1,852,096 1,665,576	-			(162,856	)			450,232				1,680,394				2,130,626				333,323				1,797,303				-				2011
CLOVERDALE PLAZA	540,667	719,655	6,879,635	540,667	7,599,290	8,139,957	3,978,961	4,160,996	-NC			540,667				719,655				6,293,580				540,667				7,013,235				7,553,902				3,506,463				4,047,439				-								1969
WEBSTER SQUARE	NH			11,683,145				41,708,383				5,103,293				11,683,145				46,811,676				58,494,821				6,511,086				51,983,735				-				2014
WEBSTER SQUARE - DSW	41,708,383NH	5,174,840	11,683,145	46,883,223 1,346,391	58,566,368	5,143,811	53,422,557	- 3,638,397	2014			124,707				1,346,391				3,763,104				5,109,495				48,056				5,061,439				-				2017
WEBSTER SQUARE NORTH	2,163,138NH	6,511,424	-	2,163,138	6,511,424	8,674,562	199,146	8,475,416 6,511,424	-			3,574				2,163,138				6,514,998				8,678,136				577,393				8,100,743				-				2016
ROCKINGHAM PLAZA-SHAWS PARCELPLAZA	2,660,915NH	10,643,660	14,302,905	3,148,715 2,660,915	24,458,765	27,607,480	11,447,997	16,159,483 10,643,660	-			15,108,605				3,148,715				25,264,465				28,413,180				12,080,600				16,332,580				-				2008
SHOP RITE PLAZA	2,417,583	6,364,094	1,599,403	2,417,583	7,963,497	10,381,080	7,151,851	3,229,229	-NJ			2,417,583				6,364,094				1,646,439				2,417,583				8,010,533				10,428,116				7,207,932				3,220,184				-								1985
MARLTON PLAZA	-NJ	4,318,534	114,215	-	4,432,749	4,432,749	2,269,505	2,163,244 4,318,534	-			105,215				-				4,423,749				4,423,749				2,376,127				2,047,622				-				1996
HILLVIEW SHOPPING CENTER	16,007,647NJ	32,607,423	(1,517,229)	16,007,647	31,090,194	47,097,841	3,404,107	43,693,734 32,607,423	25,096,230			(1,255,385	)			16,007,647				31,352,038				47,359,685				4,765,750				42,593,935				-				2014
GARDEN STATE PAVILIONS	7,530,709NJ	10,801,949	20,360,667	12,203,841 7,530,709	26,489,484	38,693,325	5,290,027	33,403,298 10,801,949	-			20,648,695				12,203,841				26,777,512				38,981,353				6,391,860				32,589,493				-				2011
CLARK SHOPRITE 70 CENTRAL AVE	3,496,673NJ	11,693,769	994,829	13,959,593 3,496,673	2,225,678	16,185,271	515,706	15,669,565 11,693,769	-			994,829				13,959,593				2,225,678				16,185,271				678,560				15,506,711				-				2013
COMMERCE CENTER WEST	385,760NJ	1,290,080	160,534	793,595 385,760	1,042,779	1,836,374	218,405	1,617,969 1,290,080	-			160,534				793,595				1,042,779				1,836,374				236,451				1,599,923				-				2013
COMMERCE CENTER EAST	1,518,930NJ	5,079,690	1,753,865	7,235,196 1,518,930	1,117,289	8,352,485	270,427	8,082,058 5,079,690	-			1,753,865				7,235,196				1,117,289				8,352,485				355,825				7,996,660				-				2013
CENTRAL PLAZA	3,170,465NJ	10,602,845	(186,938)	5,145,167 3,170,465	8,441,205	13,586,372	1,389,217	12,197,155 10,602,845	-			(52,188	)			5,145,167				8,575,955				13,721,122				1,835,056				11,886,066				-				2013
EAST WINDSOR VILLAGE	9,335,011NJ	23,777,978	(728,416)	9,335,011	23,049,562	32,384,573	5,463,964	26,920,609 23,777,978	-			112,050				9,335,011				23,890,028				33,225,039				6,110,077				27,114,962				-				2008
HOLMDEL TOWNE CENTER	10,824,624NJ	43,301,494	7,797,435	10,824,624	51,098,929	61,923,553	18,456,550	43,467,003 43,301,494	-			9,397,795				10,824,624				52,699,289				63,523,913				19,878,655				43,645,258				-				2002
COMMONS AT HOLMDEL	16,537,556NJ	38,759,952	3,395,971	16,537,556	42,155,923	58,693,479	16,134,863	42,558,616 38,759,952	-			3,475,560				16,537,556				42,235,512				58,773,068				16,945,466				41,827,602				-				2004
PLAZA AT HILLSDALE	7,601,596NJ	6,994,196	544,603	7,601,596	7,538,799	15,140,395	782,960	14,357,435 6,994,196	6,021,151			1,432,319				7,601,596				8,426,515				16,028,111				1,088,251				14,939,860				5,836,506				2014
MAPLE SHADE	-NJ	9,957,611	(845,234)	-	9,112,377	9,112,377	916,239	8,196,138 9,957,611	-			(845,233	)			-				9,112,378				9,112,378				1,084,452				8,027,926				-				2009
PLAZA AT SHORT HILLS	20,155,471NJ	11,061,984	36,110	20,155,471	11,098,094	31,253,565	1,615,234	29,638,331 11,061,984	9,721,798			501,894				20,155,471				11,563,878				31,719,349				1,955,992				29,763,357				9,362,130				2014
NORTH BRUNSWICK PLAZA	3,204,978NJ	12,819,912	27,813,346	3,204,978	40,633,258	43,838,236	17,565,395	26,272,841 12,819,912	-			25,982,405				3,204,978				38,802,317				42,007,295				18,853,759				23,153,536				-				1994
PISCATAWAY TOWN CENTER	3,851,839NJ	15,410,851	1,216,192	3,851,839	16,627,043	20,478,882	7,981,590	12,497,292 15,410,851	-			1,251,418				3,851,839				16,662,269				20,514,108				8,445,408				12,068,700				-				1998
RIDGEWOOD S.C.	450,000NJ	2,106,566	1,068,571	450,000	3,175,137	3,625,137	1,651,823	1,973,314 2,106,566	-			1,124,923				450,000				3,231,489				3,681,489				1,737,901				1,943,588				-				1993
UNION CRESCENT III-BEST BUYIII	7,895,483NJ	3,010,640	28,918,367	8,696,579 7,895,483	31,127,911	39,824,490	12,610,403	27,214,087 3,010,640	-			28,918,367				8,696,579				31,127,911				39,824,490				14,324,046				25,500,444				-				2007
WESTMONT PLAZA	601,655NJ	2,404,604	11,025,881	601,655	13,430,485	14,032,140	6,132,664	7,899,476 2,404,604	-			12,309,854				601,655				14,714,458				15,316,113				6,544,416				8,771,697				-				1994
WILLOWBROOK PLAZA	15,320,436NJ	40,996,874	3,368,891	15,320,436	44,365,765	59,686,201	5,917,315	53,768,886 40,996,874	-			5,392,418				15,320,436				46,389,292				61,709,728				6,087,587				55,622,141				-				2009
DEL MONTE PLAZA	NV			2,489,429				5,590,415				624,647				2,210,000				6,494,491				8,704,491				3,368,154				5,336,337				2,303,167				2006
DEL MONTE PLAZA ANCHOR PARCEL	5,590,415NV	561,061	2,210,000	6,430,905 6,512,745	8,640,905	3,033,951	5,606,954	2,598,997 17,599,602	2006			43,051				6,520,017				17,635,381				24,155,398				306,920				23,848,478				-				2017
REDFIELD PROMENADE	4,415,339NV	32,035,192	81,095	4,415,339	32,116,287	36,531,626	3,116,035	33,415,591 32,035,192	-			216,060				4,415,339				32,251,252				36,666,591				4,692,954				31,973,637				-				2015
MCQUEEN CROSSINGS	5,017,431NV	20,779,024	193,820	5,017,431	20,972,844	25,990,275	2,026,006	23,964,269 20,779,024	-			230,274				5,017,431				21,009,298				26,026,729				3,063,391				22,963,338				-				2015
GALENA JUNCTION	8,931,027NV	17,503,387	(14,107)	8,931,027	17,489,280	26,420,307	1,715,262	24,705,045 17,503,387	19,862,619			130,381				8,931,027				17,633,768				26,564,795				2,425,512				24,139,283				-				2015
D'ANDREA MARKETPLACE	11,556,067NV	29,435,364	183,997	11,556,067	29,619,361	41,175,428	7,252,367	33,923,061 29,435,364	11,828,709			317,620				11,556,067				29,752,984				41,309,051				8,059,654				33,249,397				11,101,966				2007
SPARKS MERCANTILE	6,221,614NV	17,069,172	35,957	6,221,614	17,105,129	23,326,743	1,639,300	21,687,443 17,069,172	19,162,216			(118,794	)			6,221,614				16,950,378				23,171,992				2,263,396				20,908,596				-				2015
BRIDGEHAMPTON COMMONS-W&E SIDE	1,811,752	3,107,232	27,119,033	1,858,188	30,179,829	32,038,017	19,471,600	12,566,417	-NY			1,811,752				3,107,232				30,455,727				1,858,188				33,516,523				35,374,711				20,217,516				15,157,195				-								1972
OCEAN PLAZA	564,097NY	2,268,768	8,468	564,097	2,277,236	2,841,333	802,290	2,039,043 2,268,768	-			8,468				564,097				2,277,236				2,841,333				860,895				1,980,438				-				2003
KINGS HIGHWAY	2,743,820NY	6,811,268	1,841,513	2,743,820	8,652,781	11,396,601	3,199,221	8,197,380 6,811,268	-			1,841,513				2,743,820				8,652,781				11,396,601				3,442,272				7,954,329				-				2004
RALPH AVENUE PLAZA	4,414,466NY	11,339,857	3,567,551	4,414,467 4,414,466	14,907,407	19,321,874	4,905,187	14,416,687 11,339,857	-			3,659,611				4,414,467				14,999,467				19,413,934				5,210,918				14,203,016				-				2004
BELLMORE S.C.	1,272,269NY	3,183,547	1,590,605	1,272,269	4,774,152	6,046,421	1,531,268	4,515,153 3,183,547	-			1,590,605				1,272,269				4,774,152				6,046,421				1,723,088				4,323,333				-				2004
MARKET AT BAY SHORE	12,359,621NY	30,707,802	2,883,868	12,359,621	33,591,670	45,951,291	11,418,553	34,532,738 30,707,802	11,899,751			2,944,895				12,359,621				33,652,697				46,012,318				12,244,461				33,767,857				11,915,580				2006
KEY FOOD - ATLANTIC AVE	2,272,500NY	5,624,589	509,260	4,808,822 2,272,500	3,597,527	8,406,349	471,685	7,934,664 5,624,589	-			509,458				4,808,822				3,597,725				8,406,547				589,607				7,816,940				-				2012
KING KULLENVETERANS MEMORIAL PLAZA	5,968,082NY	23,243,404	6,064,033	5,980,130 5,968,082	29,295,389	35,275,519	13,498,533	21,776,986 23,243,404	-			7,173,073				5,980,130				30,404,429				36,384,559				14,525,614				21,858,945				-				1998
BIRCHWOOD PLAZA COMMACK	3,630,000NY	4,774,791	1,073,476	3,630,000	5,848,267	9,478,267	1,743,532	7,734,735 4,774,791	-			1,145,649				3,630,000				5,920,440				9,550,440				1,878,367				7,672,073				-				2007
ELMONT S.C.	3,011,658	7,606,066	2,770,293	3,011,658	10,376,359	13,388,017	3,327,198	10,060,819	-	2004NY
NORTHPORT LAND PARCEL	- 3,011,658	14,460	-	-	14,460 7,606,066	14,460	-	14,460	- 5,972,835	2012			3,011,658				13,578,901				16,590,559				3,517,433				13,073,126				-				2004
ELMONT PLAZA	-NY	5,119,714	-	-	5,119,714	5,119,714	371,728	4,747,986 5,119,714	-			-				-				5,119,714				5,119,714				574,489				4,545,225				-				2015
ELMSFORD CENTER 1	4,134,273NY	1,193,084	-	4,134,273	1,193,084	5,327,357	118,420	5,208,937 1,193,084	-			-				4,134,273				1,193,084				5,327,357				153,946				5,173,411				-				2013
ELMSFORD CENTER 2	4,076,403NY	15,598,504	949,902	4,076,403	16,548,406	20,624,809	1,872,113	18,752,696 15,598,504	-			949,902				4,076,403				16,548,406				20,624,809				2,454,445				18,170,364				-				2013
FRANKLIN SQUARE S.C.	1,078,541NY	2,516,581	3,937,137	1,078,541	6,453,718	7,532,259	2,216,400	5,315,859 2,516,581	-			3,937,137				1,078,541				6,453,718				7,532,259				2,455,482				5,076,777				-				2004
AIRPORT PLAZA	22,711,189NY	107,011,500	3,764,964	22,711,189	110,776,464	133,487,653	10,317,734	123,169,919 107,011,500	-			4,104,309				22,711,189				111,115,809				133,826,998				15,307,408				118,519,590				-				2015
KISSENA BOULEVARD SHOPPING CTR	11,610,000NY	2,933,487	147,329	11,610,000	3,080,816	14,690,816	1,012,304	13,678,512 2,933,487	-			203,655				11,610,000				3,137,142				14,747,142				1,064,757				13,682,385				-				2007
HAMPTON BAYS PLAZA	1,495,105NY	5,979,320	3,533,406	1,495,105	9,512,726	11,007,831	6,950,371	4,057,460 5,979,320	-			3,267,379				1,495,105				9,246,699				10,741,804				7,108,782				3,633,022				-				1989
HICKSVILLE PLAZA	3,542,739NY	8,266,375	3,095,524	3,542,739	11,361,899	14,904,638	3,700,135	11,204,503 8,266,375	-			3,173,411				3,542,739				11,439,786				14,982,525				4,059,222				10,923,303				-				2004
WOODBURY CENTRE	4,314,991NY	32,585,508	1,661,793	4,314,991	34,247,301	38,562,292	2,699,939	35,862,353 32,585,508	-			2,118,687				4,314,991				34,704,195				39,019,186				4,055,102				34,964,084				-				2015
TURNPIKE PLAZA	2,471,832NY	5,839,416	583,236	2,471,832	6,422,652	8,894,484	1,669,509	7,224,975 5,839,416	-			569,888				2,471,832				6,409,304				8,881,136				1,823,043				7,058,093				-				2011
JERICHO COMMONS SOUTH	12,368,330NY	33,071,495	721,082	12,368,330	33,792,577	46,160,907	9,612,581	36,548,326 33,071,495	9,006,205			3,069,537				12,368,330				36,141,032				48,509,362				10,614,231				37,895,131				8,072,228				2007
501 NORTH BROADWAY	-	1,175,543	197,738	-	1,373,281	1,373,281	672,031	701,250	-	2007NY
MERRY LANE (PARKING LOT)	1,485,531 -	1,749	(1,749)	1,485,531	- 1,175,543	1,485,531	-	1,485,531	- 228,522				-				1,404,065				1,404,065				696,458				707,607				-				2007
MILLERIDGE INN	7,500,330	481,316	69,437	7,500,000	551,083	8,051,083	14,430	8,036,653	-	2015NY
JERICHO ATRIUM	10,624,099 7,500,330	20,065,496	-	10,624,099	20,065,496 481,316	30,689,595	1,816,983	28,872,612	- 11,226	2016			7,500,000				492,872				7,992,872				23,088				7,969,784				-				2015
FAMILY DOLLAR UNION TURNPIKE	909,000NY	2,249,775	258,033	1,056,709 909,000	2,360,099	3,416,808	413,009	3,003,799 2,249,775	-			258,033				1,056,709				2,360,099				3,416,808				461,119				2,955,689				-				2012
LITTLE NECK PLAZA	3,277,254NY	13,161,218	5,837,212	3,277,253 3,277,254	18,998,431	22,275,684	6,285,079	15,990,605 13,161,218	-			5,969,866				3,277,253				19,131,085				22,408,338				6,807,167				15,601,171				-				2003
KEY FOOD - 21ST STREET	1,090,800NY	2,699,730	(159,449)	1,669,153 1,090,800	1,961,928	3,631,081	210,207	3,420,874 2,699,730	-			(159,449	)			1,669,153				1,961,928				3,631,081				262,759				3,368,322				-				2012
MANHASSET CENTER	4,567,003NY	19,165,808	29,214,394	3,471,939 4,567,003	49,475,266	52,947,205	21,514,253	31,432,952 19,165,808	-			29,319,555				3,471,939				49,580,427				53,052,366				23,360,482				29,691,884				-				1999
MANHASSET CENTER(residential)	950,000NY	-	-	950,000	-	950,000	-	950,000 -	-			-				950,000				-				950,000				-				950,000				-				2012
MASPETH QUEENS-DUANE READE	1,872,013NY	4,827,940	1,036,886	1,872,013	5,864,826	7,736,839	1,957,523	5,779,316 4,827,940	1,677,019			1,036,886				1,872,013				5,864,826				7,736,839				2,060,806				5,676,033				1,698,785				2004
NORTH MASSAPEQUA S.C.	1,880,816NY	4,388,549	699,203	1,623,601 1,880,816	5,344,967	6,968,568	2,000,668	4,967,900 4,388,549	-			(895,655	)			1,623,601				3,750,109				5,373,710				2,132,828				3,240,882				-				2004
MINEOLA CROSSINGS	4,150,000	7,520,692	224,517	4,150,000	7,745,209	11,895,209	1,943,416	9,951,793	-	2007NY
BIRCHWOOD PARK	3,507,162 4,150,000	4,126	(1,510,445)	2,000,000	843 7,520,692	2,000,843	843	2,000,000	- 213,964				4,150,000				7,734,656				11,884,656				2,188,151				9,696,505				-				2007
SMITHTOWN PLAZA	3,528,000NY	7,364,098	414,233	3,528,000	7,778,331	11,306,331	2,258,789	9,047,542 7,364,098	-			458,948				3,528,000				7,823,046				11,351,046				2,608,077				8,742,969				-				2009
MANETTO HILL PLAZA	263,693	584,031	10,227,903	263,693	10,811,934	11,075,627	6,176,092	4,899,535	-NY			263,693				584,031				10,728,178				263,693				11,312,209				11,575,902				6,444,252				5,131,650				-								1969
SYOSSET S.C.	106,655	76,197	1,781,201	106,655	1,857,398	1,964,053	1,047,980	916,073	-NY			106,655				76,197				2,068,924				106,655				2,145,121				2,251,776				1,093,703				1,158,073				-								1990
RICHMOND S.C.	2,280,000NY	9,027,951	12,459,766	2,280,000	21,487,717	23,767,717	12,038,465	11,729,252 9,027,951	-			19,898,449				2,280,000				28,926,400				31,206,400				12,926,031				18,280,369				-				1989
GREENRIDGE - OUT PARCELPLAZA	2,940,000NY	11,811,964	6,268,972	3,148,424 2,940,000	17,872,512	21,020,936	6,833,007	14,187,929 11,811,964	-			6,443,810				3,148,424				18,047,350				21,195,774				7,549,862				13,645,912				-				1997
STATEN ISLAND PLAZATHE BOULEVARDE	5,600,744	6,788,460	(3,003,049)	9,386,155	-	9,386,155	-	9,386,155	-	2005NY
HYLAN PLAZA	28,723,536	38,232,267	36,986,741	28,723,536	75,219,008 38,232,267	103,942,544	38,896,894	65,045,650	- 505,997				28,723,536				38,738,264				67,461,800				13,948,276				53,513,524				-				2006
FOREST AVENUE PLAZA	4,558,592NY	10,441,408	155,848	4,558,592	10,597,256	15,155,848	3,701,092	11,454,756 10,441,408	-			157,648				4,558,592				10,599,056				15,157,648				3,886,146				11,271,502				-				2005
INDEPENDENCE PLAZA	12,279,093NY	34,813,852	215,399	16,131,632 12,279,093	31,176,712	47,308,344	5,877,127	41,431,217 34,813,852	31,490,535			(2,029,722	)			16,131,632				28,931,591				45,063,223				6,069,593				38,993,630				27,966,942				2014
KEY FOOD - CENTRAL AVE.	2,787,600NY	6,899,310	(394,910)	2,603,321 2,787,600	6,688,679	9,292,000	749,341	8,542,659 6,899,310	-			(394,910	)			2,603,321				6,688,679				9,292,000				936,676				8,355,324				-				2012
WHITE PLAINS S.C.	1,777,775NY	4,453,894	2,471,597	1,777,775	6,925,491	8,703,266	2,246,846	6,456,420 4,453,894	-			2,469,097				1,777,775				6,922,991				8,700,766				2,400,611				6,300,155				-				2004
CHAMPION FOOD SUPERMARKET	757,500NY	1,874,813	(24,388)	2,241,118 757,500	366,807	2,607,925	107,809	2,500,116 1,874,813	-			(24,388	)			2,241,118				366,807				2,607,925				134,761				2,473,164				-				2012
SHOPRITE S.C.	871,977NY	3,487,909	-	871,977	3,487,909	4,359,886	2,144,278	2,215,608 3,487,909	-			-				871,977				3,487,909				4,359,886				2,236,943				2,122,943				-				1998
ROMAINE PLAZA	NY			782,459				1,825,737				588,133				782,459				2,413,870				3,196,329				701,315				2,495,014				-				2005
OREGON TRAIL CENTER	1,825,737OR			5,802,422				12,622,879				596,890				5,802,422				13,219,769				19,022,191				5,044,777				13,977,414				-				2009
POWELL VALLEY JUNCTION	588,133OR			5,062,500				3,152,982				(2,508,712	)			2,035,125				3,671,645				5,706,770				1,497,193				4,209,577				-				2009
JANTZEN BEACH CENTER	782,459OR			57,575,244				102,844,429				94,230				57,578,800				102,935,103				160,513,903				2,421,022				158,092,881				-				2017
SUBURBAN SQUARE	2,413,870PA			70,679,871				166,351,381				36,662,888				71,279,871				202,414,269				273,694,140				48,095,352				225,598,788				-				2007
CHIPPEWA PLAZA	3,196,329PA			2,881,525				11,526,101				(2,900,632	)			1,917,139				9,589,855				11,506,994				5,435,992				6,071,002				-				2000
CARNEGIE PLAZA	616,916PA			-				3,298,908				17,747				-				3,316,655				3,316,655				1,530,764				1,785,891				-				1999
CENTER SQUARE SHOPPING CENTER	2,579,413PA			731,888				2,927,551				1,200,573				691,297				4,168,715				4,860,012				2,740,132				2,119,880				-				1996
WAYNE PLAZA	PA			6,127,623				15,605,012				677,938				6,135,670				16,274,903				22,410,573				4,466,242				17,944,331				-				2008
DEVON VILLAGE	PA			4,856,379				25,846,910				4,044,439				4,856,379				29,891,349				34,747,728				6,192,928				28,554,800				-				2012
POCONO PLAZA	PA			1,050,000				2,372,628				1,539,736				1,050,000				3,912,364				4,962,364				3,219,610				1,742,754				-								1973
RIDGE PIKE PLAZA	PA			1,525,337				4,251,732				(2,602,921	)			914,299				2,259,849				3,174,148				1,002,912				2,171,236				-				2008
WHITELAND - HOBBY LOBBY	PA			176,666				4,895,360				1,447,703				176,666				6,343,063				6,519,729				2,463,869				4,055,860				-				1999
WHITELAND TOWN CENTER	PA			731,888				2,927,551				59,067				731,888				2,986,618				3,718,506				1,601,396				2,117,110				-				1996
HARRISBURG EAST SHOPPING CTR.	PA			452,888				6,665,238				10,257,296				3,002,888				14,372,534				17,375,422				7,041,882				10,333,540				-				2002
TOWNSHIP LINE S.C.	PA			731,888				2,927,551				-				731,888				2,927,551				3,659,439				1,601,396				2,058,043				-				1996
HORSHAM POINT	PA			3,813,247				18,189,450				133,911				3,813,247				18,323,361				22,136,608				1,704,650				20,431,958				-				2015
HOLIDAY CENTER	PA			7,726,844				20,014,243				(4,612,312	)			6,165,085				16,963,690				23,128,775				2,883,114				20,245,661				-				2015
NORRITON SQUARE	PA			686,134				2,664,535				3,940,037				774,084				6,516,622				7,290,706				4,817,076				2,473,630				-				1984
NEW KENSINGTON S.C	PA			521,945				2,548,322				862,730				521,945				3,411,052				3,932,997				3,169,521				763,476				-				1986
SEARS HARDWARE	PA			10,000				-				-				10,000				-				10,000				-				10,000				-								2015
FRANKFORD AVENUE S.C.	PA			731,888				2,927,551				-				731,888				2,927,551				3,659,439				1,601,396				2,058,043				-				1996
WEXFORD PLAZA	PA			6,413,635				9,774,600				10,074,686				6,299,299				19,963,622				26,262,921				4,282,319				21,980,602				-				2010
LINCOLN SQUARE (3)	PA			90,478,522				-				-				90,478,522				-				90,478,522				-				90,478,522				-				2017				2017
CRANBERRY TOWNSHIP-PARCEL 1&2	PA			10,270,846				30,769,592				(905,158	)			6,070,254				34,065,026				40,135,280				1,950,427				38,184,853				-				2016
CROSSROADS PLAZA	PA			788,761				3,155,044				12,878,677				976,439				15,846,043				16,822,482				9,924,589				6,897,893				-				1986
SPRINGFIELD S.C.	PA			919,998				4,981,589				12,875,672				920,000				17,857,259				18,777,259				9,743,110				9,034,149				-				1983
SHREWSBURY SQUARE S.C.	PA			8,066,107				16,997,997				(1,696,030	)			6,534,966				16,833,108				23,368,074				2,199,516				21,168,558				-				2014
WHITEHALL MALL	PA			-				5,195,577				-				-				5,195,577				5,195,577				2,842,026				2,353,551				-				1996
WHOLE FOODS AT WYNNEWOOD	PA			15,042,165				-				11,770,283				13,772,394				13,040,054				26,812,448				326,435				26,486,013				-								2014
SHOPPES AT WYNNEWOOD	PA			7,478,907				-				3,605,920				7,478,907				3,605,920				11,084,827				153,010				10,931,817				-								2015
WEST MARKET ST. PLAZA	PA			188,562				1,158,307				41,712				188,562				1,200,019				1,388,581				1,173,254				215,327				-				1986
REXVILLE TOWN CENTER	PR			24,872,982				48,688,161				7,302,027				25,678,064				55,185,106				80,863,170				33,091,221				47,771,949				-				2006
PLAZA CENTRO - COSTCO	PR			3,627,973				10,752,213				1,564,471				3,866,206				12,078,451				15,944,657				6,657,483				9,287,174				-				2006
PLAZA CENTRO - MALL	PR			19,873,263				58,719,179				5,962,924				19,408,112				65,147,254				84,555,366				34,622,838				49,932,528				-				2006
PLAZA CENTRO - RETAIL	PR			5,935,566				16,509,748				480,595				6,026,070				16,899,839				22,925,909				9,827,855				13,098,054				-				2006
PLAZA CENTRO - SAM'S CLUB	PR			6,643,224				20,224,758				2,375,805				6,520,090				22,723,697				29,243,787				21,967,992				7,275,795				-				2006
LOS COLOBOS - BUILDERS SQUARE	PR			4,404,593				9,627,903				1,387,483				4,461,145				10,958,834				15,419,979				9,669,563				5,750,416				-				2006
LOS COLOBOS - KMART	PR			4,594,944				10,120,147				752,678				4,402,338				11,065,431				15,467,769				10,058,014				5,409,755				-				2006
LOS COLOBOS I	PR			12,890,882				26,046,669				1,071,029				13,613,375				26,395,205				40,008,580				15,815,395				24,193,185				-				2006
LOS COLOBOS II	PR			14,893,698				30,680,556				5,395,942				15,142,300				35,827,896				50,970,196				19,767,195				31,203,001				-				2006
WESTERN PLAZA - MAYAQUEZ ONE	PR			10,857,773				12,252,522				1,308,357				11,241,993				13,176,659				24,418,652				9,284,389				15,134,263				-				2006
WESTERN PLAZA - MAYAGUEZ TWO	PR			16,874,345				19,911,045				2,174,474				16,872,647				22,087,217				38,959,864				15,126,846				23,833,018				-				2006
MANATI VILLA MARIA SC	PR			2,781,447				5,673,119				344,813				2,606,588				6,192,791				8,799,379				3,866,240				4,933,139				-				2006
PONCE TOWN CENTER	PR			14,432,778				28,448,754				4,768,662				14,903,024				32,747,170				47,650,194				16,750,683				30,899,511				-				2006
TRUJILLO ALTO PLAZA	PR			12,053,673				24,445,858				2,591,978				12,289,288				26,802,221				39,091,509				16,210,974				22,880,535				-				2006
ST. ANDREWS CENTER	SC			730,164				3,132,092				19,199,359				730,164				22,331,451				23,061,615				10,681,625				12,379,990				-								1978
WESTWOOD PLAZA	SC			1,744,430				6,986,094				9,204,220				1,726,833				16,207,911				17,934,744				4,720,254				13,214,490				-				1995
CHERRYDALE POINT	SC			5,801,948				32,055,019				1,947,764				5,801,948				34,002,783				39,804,731				8,648,264				31,156,467				-				2009
WOODRUFF SHOPPING CENTER	SC			3,110,439				15,501,117				1,146,585				3,465,199				16,292,942				19,758,141				3,332,158				16,425,983				-				2010
FOREST PARK	SC			1,920,241				9,544,875				214,354				1,920,241				9,759,229				11,679,470				1,693,776				9,985,694				-				2012
OLD TOWNE VILLAGE	TN			-				4,133,904				4,046,503				-				8,180,407				8,180,407				6,050,033				2,130,374				-								1978
CENTER OF THE HILLS	TX			2,923,585				11,706,145				1,337,767				2,923,585				13,043,912				15,967,497				5,613,606				10,353,891				-				2008
DOWLEN TOWN CENTER-II	TX			2,244,581				-				(722,251	)			484,828				1,037,502				1,522,330				194,761				1,327,569				-								2002
GATEWAY STATION	TX			1,373,692				28,145,158				1,105,295				1,374,880				29,249,265				30,624,145				3,945,577				26,678,568				-				2011
LAS TIENDAS PLAZA	TX			8,678,107				-				27,150,696				7,943,925				27,884,878				35,828,803				5,860,115				29,968,688				-								2005
GATEWAY STATION PHASE II	TX			4,140,176				12,020,460				75,694				4,143,385				12,092,945				16,236,330				130,258				16,106,072				-				2017
ISLAND GATE PLAZA	TX			-				944,562				1,903,963				-				2,848,525				2,848,525				1,124,081				1,724,444				-				1997
ISLAND GATE PLAZA	TX			4,343,000				4,723,215				3,659,997				4,292,636				8,433,576				12,726,212				2,403,829				10,322,383				-				2011
CONROE MARKETPLACE	TX			18,869,087				50,756,554				(2,993,250	)			10,841,611				55,790,780				66,632,391				6,209,948				60,422,443				-				2015
MONTGOMERY PLAZA	TX			10,739,067				63,065,333				(385,751	)			10,738,796				62,679,853				73,418,649				8,479,431				64,939,218				28,105,799				2015
PRESTON LEBANON CROSSING	TX			13,552,180				-				26,071,137				12,163,694				27,459,623				39,623,317				6,909,545				32,713,772				-								2006
LAKE PRAIRIE TOWN CROSSING	TX			7,897,491				-				28,638,126				6,783,464				29,752,153				36,535,617				5,767,928				30,767,689				-								2006
CENTER AT BAYBROOK	TX			6,941,017				27,727,491				10,958,643				6,928,120				38,699,031				45,627,151				16,641,823				28,985,328				-				1998
CYPRESS TOWNE CENTER	TX			6,033,932				-				1,692,407				2,251,666				5,474,673				7,726,339				1,054,421				6,671,918				-								2003
CYPRESS TOWNE CENTER	TX			12,329,195				36,836,381				1,247,724				8,644,145				41,769,155				50,413,300				2,253,375				48,159,925				-				2016
CYPRESS TOWNE CENTER (PHASE II)	TX			2,061,477				6,157,862				(1,361,233	)			270,374				6,587,732				6,858,106				431,425				6,426,681				-				2016
THE CENTRE AT COPPERFIELD	TX			6,723,267				22,524,551				535,094				6,723,357				23,059,555				29,782,912				2,669,083				27,113,829				-				2015
COPPERWOOD VILLAGE	TX			13,848,109				84,183,731				794,874				13,848,109				84,978,605				98,826,714				11,166,622				87,660,092				-				2015
ATASCOCITA COMMONS SHOP.CTR.	TX			16,322,636				54,587,066				625,724				16,099,004				55,436,422				71,535,426				8,061,999				63,473,427				28,528,637				2013
TOMBALL CROSSINGS	TX			8,517,427				28,484,450				573,139				7,964,894				29,610,122				37,575,016				4,373,334				33,201,682				-				2013
COPPERFIELD VILLAGE SHOP.CTR.	TX			7,827,639				34,864,441				429,207				7,827,639				35,293,648				43,121,287				4,112,160				39,009,127				-				2015
SHOPS AT VISTA RIDGE	TX			3,257,199				13,029,416				2,315,052				3,257,199				15,344,468				18,601,667				7,331,260				11,270,407				-				1998
VISTA RIDGE PLAZA	TX			2,926,495				11,716,483				2,600,033				2,926,495				14,316,516				17,243,011				7,236,985				10,006,026				-				1998
VISTA RIDGE PLAZA	TX			2,276,575				9,106,300				1,399,033				2,276,575				10,505,333				12,781,908				5,372,115				7,409,793				-				1998
KROGER PLAZA	TX			520,340				2,081,356				1,444,953				520,340				3,526,309				4,046,649				1,898,157				2,148,492				-				1995
ACCENT PLAZA	TX			500,414				2,830,835				-				500,414				2,830,835				3,331,249				1,537,166				1,794,083				-				1996
SOUTHLAKE OAKS PHASE II-480 W.	TX			3,011,260				7,703,844				103,968				3,016,617				7,802,455				10,819,072				2,779,262				8,039,810				-				2008
WOODBRIDGE SHOPPING CENTER	TX			2,568,705				6,813,716				107,746				2,568,705				6,921,462				9,490,167				1,374,785				8,115,382				-				2012
GRAND PARKWAY MARKETPLACE	TX			25,363,548				-				60,529,604				21,937,009				63,956,143				85,893,152				372,156				85,520,996				-								2014
GRAND PARKWAY MARKET PLACE II (3)	TX			13,436,447				-				29,966,997				43,403,444				-				43,403,444				-				43,403,444				-								2015
TEMPLE TOWNE CENTER	TX			609,317				2,983,262				(89,332	)			609,317				2,893,930				3,503,247				305,746				3,197,501				-				2015
TEMPLE TOWNE CENTER	TX			4,909,857				25,882,414				(4,385,108	)			4,105,739				22,301,424				26,407,163				4,017,296				22,389,867				-				2015
BURKE TOWN PLAZA	VA			-				43,240,068				83,175				-				43,323,243				43,323,243				6,042,467				37,280,776				-				2014
OLD TOWN PLAZA	VA			4,500,000				41,569,735				(15,697,554	)			3,052,800				27,319,381				30,372,181				5,498,436				24,873,745				-				2007
SKYLINE VILLAGE	VA			10,145,283				28,764,045				225,352				10,573,875				28,560,805				39,134,680				3,390,576				35,744,104				-				2014
SUDLEY TOWNE PLAZA	VA			4,114,293				15,988,465				(9,023,711	)			2,204,943				8,874,104				11,079,047				1,317,102				9,761,945				-				2015
BURLINGTON COAT CENTER	VA			670,500				2,751,375				2,661,127				670,500				5,412,502				6,083,002				1,784,315				4,298,687				-				1995
TOWNE SQUARE	VA			8,499,373				24,302,141				1,908,469				8,858,432				25,851,551				34,709,983				3,137,543				31,572,440				-				2014
POTOMAC RUN PLAZA	VA			27,369,515				48,451,209				(2,332,371	)			27,369,515				46,118,838				73,488,353				13,090,432				60,397,921				-				2008
DULLES TOWN CROSSING	VA			53,285,116				104,175,738				(355,523	)			53,285,116				103,820,215				157,105,331				14,810,943				142,294,388				-				2015
DOCSTONE COMMONS	VA			3,839,249				11,468,264				441,201				3,903,963				11,844,751				15,748,714				540,782				15,207,932				-				2016
DOCSTONE O/P - STAPLES	VA			1,425,307				4,317,552				(883,709	)			1,167,588				3,691,562				4,859,150				210,701				4,648,449				-				2016
STAFFORD MARKETPLACE	VA			26,893,429				86,449,614				36,364				26,893,429				86,485,978				113,379,407				9,382,013				103,997,394				-				2015
GORDON PLAZA	VA			-				3,330,621				40,921				-				3,371,542				3,371,542				108,863				3,262,679				-				2017
AUBURN NORTH	WA			7,785,841				18,157,625				7,542,304				7,785,841				25,699,929				33,485,770				7,113,252				26,372,518				-				2007
THE MARKETPLACE AT FACTORIA	WA			60,502,358				92,696,231				4,443,162				60,502,358				97,139,393				157,641,751				18,626,509				139,015,242				56,189,197				2013
FRONTIER VILLAGE SHOPPING CTR.	WA			10,750,863				35,671,801				96,299				10,750,863				35,768,100				46,518,963				6,231,338				40,287,625				-				2012
GATEWAY SHOPPING CENTER	WA			6,937,929				11,270,322				303,983				6,937,929				11,574,305				18,512,234				689,626				17,822,608				-				2016
OLYMPIA WEST OUTPARCEL	WA			360,000				799,640				100,360				360,000				900,000				1,260,000				125,262				1,134,738				-				2012
FRANKLIN PARK COMMONS	WA			5,418,825				11,988,657				1,031,639				5,418,825				13,020,296				18,439,121				1,691,466				16,747,655				-				2015
SILVERDALE PLAZA	WA			3,875,013				32,894,027				86,051				3,755,613				33,099,478				36,855,091				5,485,432				31,369,659				-				2012
OTHER PROPERTY INTERESTS
KEY BANK BUILDING	NY			1,500,000				40,486,755				(11,999,846	)			655,798				29,331,111				29,986,909				19,024,009				10,962,900				-				2006
EL MIRAGE	AZ			6,786,441				503,987				130,064				6,786,441				634,051				7,420,492				86,961				7,333,531				-								2008
ASANTE RETAIL CENTER	AZ			8,702,635				3,405,683				2,866,808				11,039,472				3,935,654				14,975,126				501,713				14,473,413				-								2004
SURPRISE SPECTRUM	AZ			4,138,760				94,572				1,035				4,138,760				95,607				4,234,367				13,456				4,220,911				-								2008
LAKE WALES S.C.	FL			601,052				-				-				601,052				-				601,052				-				601,052				-				2009
PLANTATION CROSSING	FL			7,524,800				-				(5,516,183	)			2,008,617				-				2,008,617				-				2,008,617				-								2005
MILTON, FL	FL			1,275,593				-				(423,450	)			852,143				-				852,143				-				852,143				-				2007
LOWES S.C.	FL			1,620,203				-				(406,657	)			507,530				706,016				1,213,546				706,016				507,530				-				2007
TREASURE VALLEY	ID			6,501,240				-				(4,426,611	)			962,721				1,111,908				2,074,629				1,106,073				968,556				-								2005
TOWN & COUNTRY S.C.	IL			315,387				422,905				(85,154	)			230,233				422,905				653,138				386,014				267,124				-				1972
22ND STREET PLAZA OUTPARCEL	IL			-				99,640				1,071,530				-				1,171,170				1,171,170				81,873				1,089,297				-				2001
MARKETPLACE OF OAKLAWN	IL			-				678,668				108,483				-				787,151				787,151				748,798				38,353				-				1998
LINWOOD-INDIANAPOLIS	IN			31,045				-				-				31,045				-				31,045				-				31,045				-				1991
BAYOU WALK	LA			4,586,895				10,836,007				(4,291,095	)			2,993,728				8,138,079				11,131,807				2,830,013				8,301,794				12,414,563				2010
FLINT - VACANT LAND	MI			101,424				-				-				101,424				-				101,424				-				101,424				-				2012
CHARLOTTE SPORTS & FITNESS CTR	NC			500,754				1,858,643				479,046				500,754				2,337,689				2,838,443				1,760,102				1,078,341				-				1986
SENATE/HILLSBOROUGH CROSSI	NC			519,395				-				-				519,395				-				519,395				-				519,395				-				2003
WAKEFIELD COMMONS III	NC			6,506,450				-				(5,397,400	)			1,475,214				(366,164	)			1,109,050				197,785				911,265				-								2001
WAKEFIELD CROSSINGS	NC			3,413,932				-				(3,017,959	)			336,236				59,737				395,973				8,287				387,686				-								2001
HILLSBOROUGH PROMENADE	NJ			11,886,809				-				(6,632,045	)			5,006,054				248,710				5,254,764				30,796				5,223,968				-								2001
NORTHPORT LAND PARCEL	NY			-				14,460				49,179				-				63,639				63,639				-				63,639				-				2012
MERRY LANE (PARKING LOT)	NY			1,485,531				1,749				288,651				1,485,531				290,400				1,775,931				-				1,775,931				-				2007
JERICHO ATRIUM	NY			10,624,099				20,065,496				364,026				10,624,099				20,429,522				31,053,621				3,284,297				27,769,324				-				2016
BIRCHWOOD PARK	NY			3,507,162				4,126				(1,510,445	)			2,000,000				843				2,000,843				843				2,000,000				-				2007
STATEN ISLAND PLAZA	NY			5,600,744				6,788,460				(2,981,672	)			9,407,532				-				9,407,532				-				9,407,532				-				2005
KENT CENTER	2,261,530OH	-	(1,826,497)	435,033 2,261,530	-	435,033	-	435,033 -	-			(1,826,497	)			435,033				-				435,033				-				435,033				-				1995
HIGH PARK CTR RETAIL	3,783,875	-	(2,778,460)	921,704	83,711	1,005,415	24,910	980,505	-OH		2001
OREGON TRAIL CENTER	5,802,422 3,783,875	12,622,879	590,069	5,802,422	13,212,948 -	19,015,370	4,770,972	14,244,398	- (2,778,460	2009 )			921,704				83,711				1,005,415				37,907				967,508				-								2001
POWELL VALLEY JUNCTIONMCMINNVILLE PLAZA	5,062,500OR	3,152,982	(2,508,712)	2,035,125 4,062,327	3,671,645	5,706,770	1,406,074	��  4,300,696 -	-	2009		991,482				4,062,327				991,482				5,053,809				96,213				4,957,596				-								2006
HOSPITAL GARAGE & MED. OFFICE	-	30,061,177	59,094	-	30,120,271	30,120,271	8,509,839	21,610,432	-	2004PA
SUBURBAN SQUARE	70,679,871 -	166,351,381	10,146,149	71,279,871	175,897,530 30,061,177	247,177,401	44,800,084	202,377,317	- 59,094	2007			-				30,120,271				30,120,271				9,096,746				21,023,525				-				2004
COULTER AVE. PARCEL	577,630PA	1,348,019	6,720,666	8,645,796 577,630	519	8,646,315	-	8,646,315 1,348,019	-			11,877,439				13,444,154				358,934				13,803,088				10,436				13,792,652				-				2015
CHIPPEWA PLAZAMORRISVILLE S.C.	2,881,525	11,526,101	153,290	2,881,525	11,679,391	14,560,916	5,133,586	9,427,330	1,931,697	2000
CARNEGIE PLAZA	-	3,298,908	17,747	-	3,316,655	3,316,655	1,445,722	1,870,933	-	1999
CENTER SQUARE SHOPPING CENTER	731,888	2,927,551	1,342,103	731,888	4,269,654	5,001,542	2,661,695	2,339,847	-	1996
WAYNE PLAZA	6,127,623	15,605,012	400,438	6,135,670	15,997,403	22,133,073	3,985,695	18,147,378	-	2008
DEVON VILLAGE	4,856,379	25,846,910	3,995,839	4,856,379	29,842,749	34,699,128	5,029,943	29,669,185	-	2012
POCONO PLAZA	1,050,000	2,372,628	1,431,729	1,050,000	3,804,357	4,854,357	3,174,132	1,680,225	-PA		1973
RIDGE PIKE PLAZA	1,525,337	4,251,732	(2,602,946)	914,299	2,259,824	3,174,123	938,226	2,235,897	-	2008
WHITELAND - HOBBY LOBBY	176,666	4,895,360	1,447,703	176,666	6,343,063	6,519,729	2,192,866	4,326,863	-	1999
WHITELAND TOWN CENTER	731,888	2,927,551	-	731,888	2,927,551	3,659,439	1,526,331	2,133,108	-	1996
EASTWICK WELLNESS CENTER	889,001	2,762,888	3,074,728	889,001	5,837,616	6,726,617	2,869,745	3,856,872	-	1997
HARRISBURG EAST SHOPPING CTR.	452,888	6,665,238	6,889,185	3,002,888	11,004,423	14,007,311	6,690,361	7,316,950	-	2002
TOWNSHIP LINE S.C.	731,888	2,927,551	-	731,888	2,927,551	3,659,439	1,526,331	2,133,108	-	1996
HORSHAM POINT	3,813,247	18,189,450	45,820	3,813,247	18,235,270	22,048,517	1,141,314	20,907,203	-	2015
HOLIDAY CENTER	7,726,844	20,014,243	50,582	7,726,844	20,064,825	27,791,669	2,002,263	25,789,406	-	2015
NORRITON SQUARE	686,134	2,664,535	3,817,458	774,084	6,394,043	7,168,127	4,679,752	2,488,375	-	1984
NEW KENSINGTON S.C	521,945	2,548,322	862,730	521,945	3,411,052	3,932,997	3,125,467	807,530	-	1986
SEARS HARDWARE	10,000	-	-	10,000	-	10,000	-	10,000	- 340,000		2015
FRANKFORD AVENUE S.C.	731,888	2,927,551	-	731,888	2,927,551	3,659,439	1,526,331	2,133,108	-	1996
WEXFORD PLAZA	6,413,635	9,774,600	9,955,083	6,299,299	19,844,019	26,143,318	3,657,982	22,485,336	-	2010
CRANBERRY TOWNSHIP-PARCEL 1&2	10,270,846	30,769,592	-	10,270,846	30,769,592	41,040,438	333,570	40,706,868	21,636,092	2016
CROSSROADS PLAZA	788,761	3,155,044	12,759,977	976,439	15,727,343	16,703,782	9,633,622	7,070,160	-	1986
SPRINGFIELD S.C.	919,998	4,981,589	12,704,250	920,000	17,685,837	18,605,837	9,073,040	9,532,797	-	1983
SHREWSBURY SQUARE S.C.	8,066,107	16,997,997	(1,648,173)	6,534,966	16,880,965	23,415,931	1,804,686	21,611,245	-	2014
WHITEHALL MALL	-	5,195,577	-	-	5,195,577	5,195,577	2,708,806	2,486,771	-	1996
WHOLE FOODS AT WYNNEWOOD	15,042,165	-	11,598,520	13,772,394	12,868,291	26,640,685	66,430	26,574,255	-		2014
SHOPPES AT WYNNEWOOD	7,478,907	-	3,768,083	7,478,907	3,768,083	11,246,990	62,308	11,184,682	- 1,360,000		2015
WEST MARKET ST. PLAZA	188,562	1,158,307	41,712	188,562	1,200,019	1,388,581	1,169,083	219,498	-	1986
REXVILLE TOWN CENTER	24,872,981	48,688,161	8,014,056	25,678,064	55,897,134	81,575,198	32,302,168	49,273,030	-	2006
PLAZA CENTRO - COSTCO	3,627,973	10,752,212	1,535,656	3,866,206	12,049,635	15,915,841	6,391,287	9,524,554	-	2006
PLAZA CENTRO - MALL	19,873,263	58,719,179	7,545,697	19,408,112	66,730,027	86,138,139	35,105,932	51,032,207	-	2006
PLAZA CENTRO - RETAIL	5,935,566	16,509,748	2,695,750	6,026,070	19,114,994	25,141,064	9,984,894	15,156,170	-	2006
PLAZA CENTRO - SAM'S CLUB	6,643,224	20,224,758	2,321,593	6,520,090	22,669,485	29,189,575	21,610,984	7,578,591	-	2006
LOS COLOBOS - BUILDERS SQUARE	4,404,593	9,627,903	1,361,338	4,461,145	10,932,689	15,393,834	9,024,387	6,369,447	-	2006
LOS COLOBOS - KMART	4,594,944	10,120,147	726,279	4,402,338	11,039,032	15,441,370	9,386,129	6,055,241	-	2006
LOS COLOBOS I	12,890,882	26,046,669	3,697,161	13,613,375	29,021,337	42,634,712	15,652,923	26,981,789	-	2006
LOS COLOBOS II	14,893,698	30,680,556	5,857,364	15,142,300	36,289,318	51,431,618	18,829,986	32,601,632	-	2006
WESTERN PLAZA - MAYAQUEZ ONE	10,857,773	12,252,522	1,347,575	11,241,993	13,215,877	24,457,870	8,562,000	15,895,870	-	2006
WESTERN PLAZA - MAYAGUEZ TWO	16,874,345	19,911,045	1,964,632	16,872,647	21,877,375	38,750,022	14,087,431	24,662,591	-	2006
MANATI VILLA MARIA SC	2,781,447	5,673,119	1,699,755	2,606,588	7,547,733	10,154,321	3,953,428	6,200,893	-	2006
PONCE TOWN CENTER	14,432,778	28,448,754	4,875,507	14,903,024	32,854,015	47,757,039	15,091,421	32,665,618	-	2006
TRUJILLO ALTO PLAZA	12,053,673	24,445,858	3,942,389	12,289,288	28,152,632	40,441,920	16,021,971	24,419,949	-	2006
MARSHALL PLAZA	1,886,600	7,575,302	1,797,067	1,886,600	9,372,369	11,258,969	4,569,037	6,689,932	-	1998
ST. ANDREWS CENTER	730,164	3,132,092	19,122,683	730,164	22,254,775	22,984,939	9,949,662	13,035,277	-		1978
WESTWOOD PLAZA (1,669,238	1,744,430	6,986,094	6,970,136	1,726,833	13,973,827	15,700,660	4,352,208	11,348,452	-	1995
CHERRYDALE POINT	5,801,948	32,055,019	1,885,250	5,801,948	33,940,269	39,742,217	7,869,993	31,872,224	-	2009
WOODRUFF SHOPPING CENTER	3,110,439	15,501,117	1,146,035	3,465,199	16,292,392	19,757,591	2,847,116	16,910,475	-	2010
FOREST PARK	1,920,241	9,544,875	186,314	1,920,241	9,731,189	11,651,430	1,398,248	10,253,182	-	2012
OLD TOWNE VILLAGE	-	4,133,904	4,003,667	-	8,137,571	8,137,571	5,935,218	2,202,353	- )		1978	30,762				-				30,762				-				30,762				-				1996
HICKORY RIDGE COMMONS	596,347	2,545,033	(2,457,560)	683,820	-	683,820	-	683,820	-	2000
CENTER OF THE HILLS	2,923,585	11,706,145	1,186,149	2,923,585	12,892,294	15,815,879	6,288,060	9,527,819	-	2008
DOWLEN TOWN CENTER-II	2,244,581	-	(722,251)	484,828	1,037,502	1,522,330	173,357	1,348,973	-TN		2002
GATEWAY STATION	1,373,692	28,145,158	137,320	1,374,880	28,281,290	29,656,170	3,653,199	26,002,971	-	2011
BAYTOWN VILLAGE S.C.	500,422	2,431,651	818,249	500,422	3,249,900	3,750,322	1,433,566	2,316,756	-	1996
LAS TIENDAS PLAZA	8,678,107	-	27,525,578	7,943,925	28,259,760	36,203,685	5,068,574	31,135,111	- 596,347		2005
ISLAND GATE PLAZA	-	944,562	1,864,189	-	2,808,751	2,808,751	976,939	1,831,812	-	1997
ISLAND GATE PLAZA	4,343,000	4,723,215	3,434,004	4,292,636	8,207,583	12,500,219	2,159,227	10,340,992	-	2011
CONROE MARKETPLACE	18,869,087	50,756,554	(3,309,577)	10,841,611	55,474,453	66,316,064	4,351,300	61,964,764	-	2015
MONTGOMERY PLAZA	10,739,067	63,065,333	(281,830)	10,738,796	62,783,774	73,522,570	6,158,788	67,363,782	28,821,667	2015
PRESTON LEBANON CROSSING	13,552,180	-	26,717,900	12,163,694	28,106,386	40,270,080	5,930,870	34,339,210	-		2006
LAKE PRAIRIE TOWN CROSSING	7,897,491	-	28,539,296	6,783,464	29,653,323	36,436,787	5,059,248	31,377,539	- 2,545,033		2006
CENTER AT BAYBROOK	6,941,017	27,727,491	8,890,735	6,928,120	36,631,123	43,559,243	15,483,311	28,075,932	-	1998
CYPRESS TOWNE CENTER	6,033,932	-	1,636,605	2,251,666	5,418,871	7,670,537	882,419	6,788,118	-		2003
CYPRESS TOWNE CENTER (2,457,560	12,329,195	36,836,381	-	12,329,195	36,836,381	49,165,576	398,790	48,766,786	-	2016
CYPRESS TOWNE CENTER(PHASE II)	2,061,477	6,157,862	-	2,061,477	6,157,862	8,219,339	66,679	8,152,660	-	2016
THE CENTRE AT COPPERFIELD	6,723,267	22,524,551	147,681	6,723,357	22,672,142	29,395,499	��     1,765,721	27,629,778	-	2015
COPPERWOOD VILLAGE	13,848,109	84,183,731	488,670	13,848,109	84,672,401	98,520,510	8,574,685	89,945,825	-	2015
ATASCOCITA COMMONS SHOP.CTR.	16,322,636	54,587,066	640,629	16,099,004	55,451,327	71,550,331	6,426,983	65,123,348	28,723,371	2013
TOMBALL CROSSINGS	8,517,427	28,484,450	(22,511)	7,964,894	29,014,472	36,979,366	3,597,691	33,381,675	-	2013
COPPERFIELD VILLAGE SHOP.CTR.	7,827,639	34,864,441	140,205	7,827,639	35,004,646	42,832,285	2,785,358	40,046,927	-	2015
SHOPS AT VISTA RIDGE	3,257,199	13,029,416	2,198,969	3,257,199	15,228,385	18,485,584	6,908,102	11,577,482	-	1998
VISTA RIDGE PLAZA	2,926,495	11,716,483	2,584,098	2,926,495	14,300,581	17,227,076	6,722,152	10,504,924	-	1998
VISTA RIDGE PLAZA	2,276,575	9,106,300	1,355,098	2,276,575	10,461,398	12,737,973	4,969,800	7,768,173	-	1998
KROGER PLAZA	520,340	2,081,356	1,359,284	520,340	3,440,640	3,960,980	1,790,106	2,170,874	-	1995
ACCENT PLAZA	500,414	2,830,835	-	500,414	2,830,835	3,331,249	1,464,554	1,866,695	-	1996
SOUTHLAKE OAKS PHASE II-480 W.	3,011,260	7,703,844	103,968	3,016,617	7,802,455	10,819,072	2,611,864	8,207,208	-	2008
WOODBRIDGE SHOPPING CENTER	2,568,705	6,813,716	60,806	2,568,705	6,874,522	9,443,227	1,137,926	8,305,301	-	2012
GRAND PARKWAY MARKETPLACE	25,363,548	-	49,662,448	75,025,996	-	75,025,996	-	75,025,996	- )		2014
GRAND PARKWAY MARKET PLACE II	13,436,447	-	6,378,376	19,814,823	-	19,814,823	-	19,814,823	- 683,820		2015
TEMPLE TOWNE CENTER	609,317	2,983,262	1	609,317	2,983,263	3,592,580	258,770	3,333,810	-	2015
TEMPLE TOWNE CENTER	4,909,857	25,882,414	24,910	4,909,857	25,907,324	30,817,181	3,096,902	27,720,279	-	2015
BURKE TOWN PLAZA	-	43,240,068	(77,919)	-	43,162,149	43,162,149	4,705,503	38,456,646	-	2014
OLD TOWN PLAZA	4,500,000	41,569,735	(13,561,193)	3,087,520	29,421,022	32,508,542	5,331,198	27,177,344	-	2007 683,820
SKYLINE VILLAGE	10,145,283	28,764,045	119,265	10,573,875	28,454,718	39,028,593	2,408,808	36,619,785	28,540,865	2014
SUDLEY TOWNE PLAZA	4,114,293	15,988,465	(2,870)	4,114,293	15,985,595	20,099,888	1,223,448	18,876,440	-	2015
BURLINGTON COAT CENTER	670,500	2,751,375	1,666,127	670,500	4,417,502	5,088,002	1,555,483	3,532,519	-	1995
TOWNE SQUARE	8,499,373	24,302,141	1,558,230	8,858,432	25,501,312	34,359,744	2,148,027	32,211,717	24,915,548	2014 683,820
POTOMAC RUN PLAZA	27,369,515	48,451,209	(1,609,051)	27,369,515	46,842,158	74,211,673	12,954,070	61,257,603	-	2008
DULLES TOWN CROSSING	53,285,116	104,175,738	(400,522)	53,285,116	103,775,216	157,060,332	11,215,337	145,844,995	-	2015
DOCSTONE COMMONS	3,839,249	11,468,264	-	3,839,249	11,468,264	15,307,513	124,181	15,183,332	11,123,972	2016
DOCSTONE O/P - STAPLES	1,425,307	4,317,552	-	1,425,307	4,317,552	5,742,859	46,102	5,696,757	-	2016 2000
STAFFORD MARKETPLACE	26,893,429	86,449,614	71,698	26,893,429	86,521,312	113,414,741	6,751,401	106,663,340	-	2015
AUBURN NORTH	7,785,841	18,157,625	1,466,041	7,785,841	19,623,666	27,409,507	6,662,844	20,746,663	-	2007
THE MARKETPLACE AT FACTORIA	60,502,358	92,696,231	2,554,967	60,502,358	95,251,198	155,753,556	15,307,136	140,446,420	56,633,213	2013
FRONTIER VILLAGE SHOPPING CTR.	10,750,863	35,649,111	96,299	10,750,863	35,745,410	46,496,273	5,383,855	41,112,418	-	2012
GATEWAY SHOPPING CENTER	6,937,929	11,270,322	-	6,937,929	11,270,322	18,208,251	241,160	17,967,091	-	2016
OLYMPIA WEST OUTPARCEL	360,000	799,640	100,360	360,000	900,000	1,260,000	102,255	1,157,745	-	2012
FRANKLIN PARK COMMONS	5,418,825	11,988,657	977,979	5,418,825	12,966,636	18,385,461	1,277,370	17,108,091	-	2015
SILVERDALE PLAZA	3,875,013	32,272,736	86,050	3,755,613	32,478,186	36,233,799	4,689,699	31,544,100	-	2012
BLUE RIDGE	12,346,900Various	71,529,796	(35,751,174)	6,158,426 12,346,900	41,967,096	48,125,522	19,367,363	28,758,159 71,529,796	6,870,989			(35,874,424	)			6,069,109				41,933,163				48,002,272				20,764,707				27,237,565				6,595,242				2005
MICROPROPERTIES	24,206,390	56,481,576	(74,328,657)	2,038,463	4,320,846	6,359,309	904,208	5,455,101	-	2012Various
KRC NORTH LOAN IV, INC.	23,516,663 528,534	-	(5,308,827)	18,207,836	- 1,090,980	18,207,836	-	18,207,836	-	2013			528,534				1,090,980				1,619,514				211,709				1,407,805				-				2012
BALANCE OF PORTFOLIO (4)	1,907,178Various	65,127,203	6,458,145	13,419,726 1,907,182	60,072,800	73,492,526	37,230,123	36,262,403 65,127,208	11,608,413			(9,296,277	)			(99,898	)			57,838,011				57,738,113				30,663,071				27,075,042				-
TOTALS		2,988,153,342	7,590,553,397	1,429,368,409 $3,232,368,780	3,130,217,410	8,877,857,738	12,008,075,148	2,278,291,645 $7,876,947,274	9,729,783,503	1,139,117,399		$1,544,128,944				$3,366,655,421				$9,286,789,577				$12,653,444,998				$2,433,052,747				$10,220,392,251				$882,787,275

(1) The negative balance for costs capitalized subsequent to acquisition could include parcels/out-parcels sold, assets held-for-sale, provision for losses and/or demolition of part of a property for redevelopment.

(2) Includes fair market value of debt adjustments, net and deferred financing costs, net.

(3) Shopping center includes active real estate under development project or land held for development.

(4) Includes fixtures, leasehold improvements and other costs capitalized.

 

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KIMCO REALTY CORPORATION AND SUBSIDIARIES

SCHEDULE III - REAL ESTATE AND ACCUMULATED DEPRECIATION

December 31, 2017

Depreciation and amortization are provided on the straight-line method over the estimated useful lives of the assets as follows:

Buildings and building improvements (in years)		15	to	50
Fixtures, building and leasehold improvements (including certain identified intangible assets)		Terms of leases or useful lives, whichever is shorter

The aggregate cost for Federal income tax purposes was approximately $10.3 billion at December 31, 2017.

The changes in total real estate assets for the years ended December 31, 2017, 2016 and 2015 are as follows:

		2017				2016				2015		��
Balance, beginning of period		$	12,008,075,148			$	11,568,809,126			$	10,018,225,775
Additions during period:
Acquisitions			438,125,265				181,719,189				278,401,182
Improvements			414,955,609				217,668,292				191,662,698
Transfers from unconsolidated joint ventures			329,194,717				615,511,560				1,673,542,610
Change in exchange rate			1,035,816				598,744				-
Deductions during period:
Sales			(315,954,464	)			(391,758,149	)			(507,185,370	)
Assets held for sale			(56,187,719	)			(12,608,829	)			(587,007	)
Adjustment of fully depreciated assets			(107,660,366	)			(80,660,536	)			(56,774,522	)
Adjustment of property carrying values			(58,139,008	)			(91,204,249	)			(18,432,226	)
Change in exchange rate			-				-				(10,044,014	)
Balance, end of period		$	12,653,444,998			$	12,008,075,148			$	11,568,809,126

The changes in accumulated depreciation for the years ended December 31, 2017, 2016 and 2015 are as follows:

		2017				2016				2015
Balance, beginning of period		$	2,278,291,645			$	2,115,319,888			$	1,955,405,720
Additions during period:
Depreciation for year			368,919,387				344,179,201				333,948,605
Change in exchange rate			-				366,068				-
Deductions during period:
Sales			(86,798,173	)			(97,888,608	)			(116,864,875	)
Assets held for sale			(19,699,746	)			(3,482,974	)			-
Adjustment of fully depreciated assets			(107,660,366	)			(80,660,536	)			(56,774,522	)
Change in exchange rate			-				-				(395,040	)
Balance, end of period		$	2,433,052,747			$	2,278,291,645			$	2,115,319,888

Reclassifications:

Certain Amounts in the Prior Period Have Been Reclassified in Order to Conform with the Current Period's Presentation.

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KIMCO REALTY CORPORATION AND SUBSIDIARIES

SCHEDULE IV - MORTGAGE LOANS ON REAL ESTATE

As of December 31, 2017

(in thousands)

Description		Interest Rate		Final Maturity Date	Periodic Payment Terms (a)		Prior Liens				Original Face Amount of Mortgages (b)				Carrying Amount of Mortgages (b) (c)				Principal Amount of Loans Subject to Delinquent Principal or Interest
Mortgage Loans:
Retail
Toronto, ON		7.00%		May-18	P& I		$	-			$	5,319			$	5,058			$	-
Westport, CT		6.50%		Mar-33	I			-				5,014				5,014				-
Las Vegas, NV		12.00%		May-33	I			-				3,075				3,075				-
Miami, FL		7.57%		Jun-19	P& I			-				3,966				1,919				-
Miami, FL		7.57%		Jun-19	P& I			-				4,201				1,850				-
Miami, FL		7.57%		Jun-19	P& I			-				3,678				1,775				-
Nonretail
Oakbrook Terrace, IL		6.00%		Dec-24	I			-				1,950				1,950				-
Individually < 3% (d)		(e)		(f)	P&I			-				2,475				828				-
							$	-			$	29,678			$	21,469			$	-
Other Financing Loans:
Nonretail
Individually < 3%		2.28%		Apr-27	P&I		$	-			$	600			$	369			$	-
							$	-			$	30,278			$	21,838			$	-

(a)	I = Interest only; P&I = Principal & Interest.
(b)	The instruments actual cash flows are denominated in U.S. dollars and Canadian dollars as indicated by the geographic location above
(c)	The aggregate cost for Federal income tax purposes was approximately $21.8 million as of December 31, 2017.
(d)	Comprised of three separate loans with original loan amounts ranging from $0.1 million to $0.4 million.
(e)	Interest rates range from 6.88% to 7.41%.
(f)	Maturity dates range from October 2019 to December 2030.

For a reconciliation of mortgage and other financing receivables from January 1, 2015 to December 31, 2017, see Footnote 10 of the Notes to Consolidated Financial Statements included in this Form 10-K.

December 31, 2016

The Company feels it is not practicable to estimate the fair value of each receivable as quoted market prices are not available.

The cost of obtaining an independent valuation on these assets is deemed excessive considering the materiality of the total receivables.

 

Depreciation and amortization are provided on the straight-line method over the estimated useful lives of the assets, as follows:98

 

Buildings and building improvements (in years)			15	to	50
Fixtures, building and leasehold improvements			Terms of leases or useful lives, whichever is shorter
(including certain identified intangible assets)

The aggregate cost for Federal income tax purposes was approximately $9.6 billion at December 31, 2016.

The changes in total real estate assets for the years ended December 31, 2016, 2015, and 2014 are as follows:

		2016				2015				2014
Balance, beginning of period		$	11,568,809,126			$	10,018,225,775			$	9,123,343,869
Acquisitions			181,719,189				278,401,182				548,553,619
Improvements			217,668,292				191,662,698				134,921,993
Transfers from (to) unconsolidated joint ventures			615,511,560				1,673,542,610				1,065,330,540
Sales			(391,758,149	)			(507,185,370	)			(781,200,981	)
Assets held for sale			(12,608,829	)			(587,007	)			-
Adjustment of fully depreciated asset			(80,660,536	)			(56,774,522	)			(8,628,954	)
Adjustment of property carrying values			(91,204,249	)			(18,432,226	)			(32,935,408	)
Change in exchange rate			598,744				(10,044,014	)			(31,158,903	)
Balance, end of period		$	12,008,075,148			$	11,568,809,126			$	10,018,225,775

The changes in accumulated depreciation for the years ended December 31, 2016, 2015, and 2014 are as follows:

		2016				2015				2014
Balance, beginning of period		$	2,115,319,888			$	1,955,405,720			$	1,878,680,836
Depreciation for year			344,179,201				333,948,605				256,088,382
Transfers from (to) unconsolidated joint ventures			-				-				-
Sales			(97,063,934	)			(116,864,875	)			(167,458,882	)
Adjustment of fully depreciated asset			(80,660,536	)			(56,774,522	)			(8,628,954	)
Assets held for sale			(3,482,974	)			-				-
Change in exchange rate			-				(395,040	)			(3,275,662	)
Balance, end of period		$	2,278,291,645			$	2,115,319,888			$	1,955,405,720

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KIMCOREALTY CORPORATION AND SUBSIDIARIES

Schedule IV - Mortgage Loans on Real Estate

As of December 31, 2016

(in thousands)

Type of Loan/Borrower	Description	Location (c)		Interest Accrual Rates				Interest Payment Rates			Final Maturity Date		Periodic Payment Terms (a)		Prior Liens				Face Amount of Mortgages or Maximum Available Credit (b)				Carrying Amount of Mortgages (b) (c)
Mortgage Loans:
Borrower A	Retail	Toronto, ON			5.00%				5.00%		7/31/2017		P& I			-			$	5,730			$	5,314
Borrower B	Retail	Westport, CT			6.50%				6.50%		3/4/2033		I			-			$	5,014			$	5,014
Borrower C	Retail	Las Vegas, NV			12.00%				12.00%		5/14/2033		I			-			$	3,075			$	3,075
Borrower D	Retail	Miami, FL			7.57%				7.57%		6/1/2019		P& I			-			$	3,966			$	2,078
Borrower E	Retail	Miami, FL			7.57%				7.57%		6/1/2019		P& I			-			$	4,201			$	2,037
Borrower F	Retail	Miami, FL			7.57%				7.57%		6/1/2019		P& I			-			$	3,678			$	1,923
Borrower G	Nonretail	Oakbrook Terrace, IL			6.00%				6.00%		12/9/2024		I			-			$	1,950			$	1,950
																				-
Individually < 3%	(d)				(e)				(e)		(f)					-				2,922				1,393
																				30,536				22,784
Other:
Individually < 3%	Nonretail				2.28%				2.28%		4/1/2027									600				407
Capitalized loan costs																				-				6
Total																			$	31,136			$	23,197

(a) I = Interest only; P&I = Principal & Interest

(b) The instruments actual cash flows are denominated in U.S. dollars and Canadian dollars as indicated by the geographic location above

(c) The aggregate cost for Federal income tax purposes is $23.2 million

(d) Comprised of four separate loans with original loan amounts ranging between $0.2 million and $0.4 million

(e) Interest rates range from 6.88% to 9.00%

(f) Maturity dates range from October 19, 2019 to December 1, 2030

For a reconciliation of mortgage and other financing receivables from January 1, 2014 to December 31, 2016 see Footnote 11 of the Notes to Consolidated Financial Statements included in this Form 10-K.

The Company feels it is not practicable to estimate the fair value of each receivable as quoted market prices are not available.

The cost of obtaining an independent valuation on these assets is deemed excessive considering the materiality of the total receivables.

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