(Former name, former address and former fiscal year, if changed since last report)

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

As of ~~October 26, 2017,~~July 25, 2018, the registrant had ~~368,464,703~~184,657,459 outstanding common shares, $0.10 par value per share.

	September 30, 2017			December 31, 2016			June 30, 2018			December 31, 2017
Assets
Land	$	1,903,805		$	1,990,406		$	1,667,258		$	1,738,792
Buildings		6,002,788			6,412,532			5,439,822			5,733,451
Fixtures and tenant improvements		673,738			735,685			701,439			693,280
		8,580,331			9,138,623			7,808,519			8,165,523
Less: Accumulated depreciation		(1,942,051	)		(1,996,176	)		(1,970,100	)		(1,953,479	)
		6,638,280			7,142,447			5,838,419			6,212,044
Construction in progress and land		116,746			105,435			83,348			82,480
Total real estate assets, net		6,755,026			7,247,882			5,921,767			6,294,524
Investments in and advances to joint ventures, net		434,952			454,131			321,104			383,813
Cash and cash equivalents		18,268			30,430			32,067			92,611
Restricted cash		1,826			8,795			74,730			2,113
Accounts receivable, net		176,561			121,367			103,781			108,695
Property insurance receivable								49,202			58,583
Notes receivable, net		19,591			49,503			19,670			19,675
Other assets, net		234,473			285,410			182,068			210,059
	$	7,640,697		$	8,197,518		$	6,704,389		$	7,170,073
Liabilities and Equity
Unsecured indebtedness:
Senior notes	$	2,809,404		$	2,913,217		$	1,918,263		$	2,810,100
Unsecured term loan		397,858			398,399			198,461			398,130
Revolving credit facilities		60,000			—			45,000			—
		3,267,262			3,311,616			2,161,724			3,208,230
Secured indebtedness:
Secured term loan		—			199,843
Mortgage indebtedness		750,269			982,509			1,428,025			641,082
		750,269			1,182,352			1,428,025			641,082
Total indebtedness		4,017,531			4,493,968			3,589,749			3,849,312
Accounts payable and other liabilities		355,731			382,293			343,612			344,774
Dividends payable		78,419			75,245			78,690			78,549
Total liabilities		4,451,681			4,951,506			4,012,051			4,272,635
Commitments and contingencies
DDR Equity
Class A—6.375% cumulative redeemable preferred shares, without par value, $500 liquidation value; 750,000 shares authorized; 350,000 shares issued and outstanding at September 30, 2017		175,000			—
Class J—6.5% cumulative redeemable preferred shares, without par value, $500 liquidation value; 750,000 shares authorized; 400,000 shares issued and outstanding at September 30, 2017 and December 31, 2016		200,000			200,000
Class K—6.25% cumulative redeemable preferred shares, without par value, $500 liquidation value; 750,000 shares authorized; 300,000 shares issued and outstanding at September 30, 2017 and December 31, 2016		150,000			150,000
Common shares, with par value, $0.10 stated value; 600,000,000 shares authorized; 367,823,362 and 366,298,335 shares issued at September 30, 2017 and December 31, 2016, respectively		36,782			36,630
Class A—6.375% cumulative redeemable preferred shares, without par value, $500 liquidation value; 750,000 shares authorized; 350,000 shares issued and outstanding at June 30, 2018 and December 31, 2017								175,000			175,000
Class J—6.5% cumulative redeemable preferred shares, without par value, $500 liquidation value; 750,000 shares authorized; 400,000 shares issued and outstanding at June 30, 2018 and December 31, 2017								200,000			200,000
Class K—6.25% cumulative redeemable preferred shares, without par value, $500 liquidation value; 750,000 shares authorized; 300,000 shares issued and outstanding at June 30, 2018 and December 31, 2017								150,000			150,000
Common shares, with par value, $0.10 stated value; 300,000,000 shares authorized; 184,652,419 and 184,256,205 shares issued at June 30, 2018 and December 31, 2017, respectively								18,465			18,426
Additional paid-in capital		5,505,855			5,487,212			5,543,006			5,531,249
Accumulated distributions in excess of net income		(2,886,547	)		(2,632,327	)		(3,397,993	)		(3,183,134	)
Deferred compensation obligation		10,381			15,149			7,718			8,777
Accumulated other comprehensive loss		(1,471	)		(4,192	)		(1,457	)		(1,106	)
Less: Common shares in treasury at cost: 676,419 and 947,893 shares at September 30, 2017 and December 31, 2016, respectively		(9,907	)		(14,957	)
Less: Common shares in treasury at cost: 262,713 and 306,314 shares at June 30, 2018 and December 31, 2017, respectively								(7,304	)		(8,280	)
Total DDR shareholders' equity		3,180,093			3,237,515			2,687,435			2,890,932
Non-controlling interests		8,923			8,497			4,903			6,506
Total equity		3,189,016			3,246,012			2,692,338			2,897,438
	$	7,640,697		$	8,197,518		$	6,704,389		$	7,170,073

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

	Three Months						Three Months
	Ended September 30,						Ended June 30,
	2017			2016			2018			2017
Revenues from operations:
Minimum rents	$	153,925		$	177,844		$	141,678		$	164,623
Percentage and overage rents		1,016			1,193			1,453			1,823
Recoveries from tenants		51,368			59,743			50,558			55,633
Fee and other income		21,115			15,020			14,727			14,108
Business interruption income								3,100			—
		227,424			253,800			211,516			236,187
Rental operation expenses:
Operating and maintenance		28,950			32,012			31,149			32,150
Real estate taxes		30,618			36,157			30,478			33,744
Impairment charges		10,284			104,877			18,060			28,096
Hurricane casualty and impairment loss		6,089			—
Hurricane property loss								224			—
General and administrative		16,425			18,785			20,187			22,756
Depreciation and amortization		85,210			95,451			72,462			90,276
		177,576			287,282			172,560			207,022
Other income (expense):
Interest income		6,807			9,304			5,016			7,166
Interest expense		(46,296	)		(53,940	)		(44,913	)		(48,908	)
Other income (expense), net		(64,340	)		(384	)		(36,255	)		(954	)
		(103,829	)		(45,020	)		(76,152	)		(42,696	)
Loss before earnings from equity method investments and other items		(53,981	)		(78,502	)		(37,196	)		(13,531	)
Equity in net income (loss) of joint ventures		4,811			(1,457	)		3,821			(717	)
Adjustment of preferred equity interests		15,377			—			1,625			—
Loss on sale and change in control of interests, net		—			(1,087	)
Loss before tax expense		(33,793	)		(81,046	)		(31,750	)		(14,248	)
Tax expense of taxable REIT subsidiaries and state franchise and income taxes		(9,267	)		(398	)		(391	)		(473	)
Loss from continuing operations		(43,060	)		(81,444	)		(32,141	)		(14,721	)
Gain on disposition of real estate, net		44,291			21,368			29,508			44,599
Net income (loss)	$	1,231		$	(60,076	)
Net (loss) income							$	(2,633	)	$	29,878
Income attributable to non-controlling interests, net		(248	)		(284	)		(696	)		(267	)
Net income (loss) attributable to DDR	$	983		$	(60,360	)
Net (loss) income attributable to DDR							$	(3,329	)	$	29,611
Preferred dividends		(8,383	)		(5,594	)		(8,383	)		(6,399	)
Net loss attributable to common shareholders	$	(7,400	)	$	(65,954	)
Net (loss) income attributable to common shareholders							$	(11,712	)	$	23,212

Per share data:
Basic	$	(0.02	)	$	(0.18	)	$	(0.07	)	$	0.13
Diluted	$	(0.02	)	$	(0.18	)	$	(0.07	)	$	0.13

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

	Six Months
	Ended June 30,
	2018			2017
Revenues from operations:
Minimum rents	$	288,565		$	331,852
Percentage and overage rents		3,261			3,522
Recoveries from tenants		101,912			113,109
Fee and other income		27,746			28,125
Business interruption income		5,100			—
		426,584			476,608
Rental operation expenses:
Operating and maintenance		60,906			65,141
Real estate taxes		62,501			68,073
Impairment charges		48,504			50,069
Hurricane property loss		974			—
General and administrative		36,302			53,828
Depreciation and amortization		146,886			181,160
		356,073			418,271
Other income (expense):
Interest income		10,357			15,558
Interest expense		(88,953	)		(100,735	)
Other income (expense), net		(97,862	)		(958	)
		(176,458	)		(86,135	)
Loss before earnings from equity method investments and other items		(105,947	)		(27,798	)
Equity in net income (loss) of joint ventures		12,607			(2,382	)
Reserve of preferred equity interests, net		(2,336	)		(76,000	)
Loss before tax expense		(95,676	)		(106,180	)
Tax expense of taxable REIT subsidiaries and state franchise and income taxes		(373	)		(696	)
Loss from continuing operations		(96,049	)		(106,876	)
Gain on disposition of real estate, net		39,519			82,726
Net loss	$	(56,530	)	$	(24,150	)
Income attributable to non-controlling interests, net		(952	)		(480	)
Net loss attributable to DDR	$	(57,482	)	$	(24,630	)
Preferred dividends		(16,766	)		(11,993	)
Net loss attributable to common shareholders	$	(74,248	)	$	(36,623	)

Per share data:
Basic	$	(0.41	)	$	(0.20	)
Diluted	$	(0.41	)	$	(0.20	)

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

	Three Months						Six Months
	Ended June 30,						Ended June 30,
	2018			2017			2018			2017
Net (loss) income	$	(2,633	)	$	29,878		$	(56,530	)	$	(24,150	)
Other comprehensive (loss) income:
Foreign currency translation, net		(314	)		345			(713	)		537
Change in fair value of interest-rate contracts		(4	)		354			(1	)		789
Change in cash flow hedges reclassed to earnings		117			199			234			377
Total other comprehensive (loss) income		(201	)		898			(480	)		1,703
Comprehensive (loss) income	$	(2,834	)	$	30,776		$	(57,010	)	$	(22,447	)
Comprehensive income attributable to non-controlling interests:
Allocation of net income		(696	)		(267	)		(952	)		(480	)
Foreign currency translation, net		55			(98	)		129			(143	)
Total comprehensive income attributable to non-controlling interests		(641	)		(365	)		(823	)		(623	)
Total comprehensive (loss) income attributable to DDR	$	(3,475	)	$	30,411		$	(57,833	)	$	(23,070	)

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

	DDR Equity

	Preferred Shares		Common Shares		Additional Paid-in Capital		Accumulated Distributions in Excess of Net Income			Deferred Compensation Obligation			Accumulated Other Comprehensive Loss			Treasury Stock at Cost			Non- Controlling Interests			Total
Balance, December 31, 2017	$	525,000	$	18,426	$	5,531,249	$	(3,183,134	)	$	8,777		$	(1,106	)	$	(8,280	)	$	6,506		$	2,897,438
Issuance of common shares related to stock plans		—		39		5,891		—			—			—			—			—			5,930
Stock-based compensation, net		—		—		4,986		—			(1,059	)		—			976			—			4,903
Distributions to non-controlling interests		—		—		—		—			—			—			—			(837	)		(837	)
Redemption of OP Units		—		—		880		—			—			—			—			(1,589	)		(709	)
Dividends declared-common shares		—		—		—		(140,611	)		—			—			—			—			(140,611	)
Dividends declared-preferred shares		—		—		—		(16,766	)		—			—			—			—			(16,766	)
Comprehensive (loss) income		—		—		—		(57,482	)		—			(351	)		—			823			(57,010	)
Balance, June 30, 2018	$	525,000	$	18,465	$	5,543,006	$	(3,397,993	)	$	7,718		$	(1,457	)	$	(7,304	)	$	4,903		$	2,692,338

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

Nine Months

Ended September 30,

2017

2016

Revenues from operations:

Minimum rents
$
485,777

$
533,275

Percentage and overage rents

4,538

4,783

Recoveries from tenants

164,477

182,718

Fee and other income

49,240

44,768

704,032

765,544

Rental operation expenses:

Operating and maintenance

94,091

104,600

Real estate taxes

98,691

108,475

Impairment charges

60,353

104,877

Hurricane casualty and impairment loss

6,089

—

General and administrative

70,253

55,160

Depreciation and amortization

266,370

290,051

595,847

663,163

Other income (expense):

Interest income

22,365

27,800

Interest expense

(147,031
)

(165,849
)
Other income (expense), net

(65,298
)

3,470

(189,964
)

(134,579
)
Loss before earnings from equity method investments and other items

(81,779
)

(32,198
)
Equity in net income of joint ventures

2,429

14,081

Reserve of preferred equity interests, net

(60,623
)

—

Loss on sale and change in control of interests, net

—

(1,087
)
Loss before tax expense

(139,973
)

(19,204
)
Tax expense of taxable REIT subsidiaries and state franchise and income taxes

(9,963
)

(1,101
)
Loss from continuing operations

(149,936
)

(20,305
)
Gain on disposition of real estate, net

127,017

47,470

Net (loss) income
$
(22,919
)

$
27,165

Income attributable to non-controlling interests, net

(728
)

(894
)
Net (loss) income attributable to DDR
$
(23,647
)

$
26,271

Preferred dividends

(20,376
)

(16,781
)
Net (loss) income attributable to common shareholders
$
(44,023
)

$
9,490

Per share data:

Basic
$
(0.12
)

$
0.02

Diluted
$
(0.12
)

$
0.02

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

Three Months

Nine Months

Ended September 30,

Ended September 30,

2017

2016

2017

2016

Net income (loss)
$
1,231

$
(60,076
)

$
(22,919
)

$
27,165

Other comprehensive income:

Foreign currency translation

802

(103
)

1,339

572

Change in fair value of interest-rate contracts

206

574

995

950

Change in cash flow hedges reclassed to earnings

335

172

712

516

Total other comprehensive income

1,343

643

3,046

2,038

Comprehensive income (loss)
$
2,574

$
(59,433
)

$
(19,873
)

$
29,203

Comprehensive income attributable to non-controlling interests:

Allocation of net income

(248
)

(284
)

(728
)

(894
)
Foreign currency translation

(182
)

29

(325
)

(239
)
Total comprehensive income attributable to non-controlling
interests

(430
)

(255
)

(1,053
)

(1,133
)
Total comprehensive income (loss) attributable to DDR
$
2,144

$
(59,688
)

$
(20,926
)

$
28,070

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

DDR Equity

Preferred Shares

Common Shares

Additional
Paid-in
Capital

Accumulated Distributions
in Excess of
Net Income
��

Deferred Compensation Obligation

Accumulated Other Comprehensive Loss

Treasury
Stock at
Cost

Non-
Controlling
Interests

Total

Balance, December 31, 2016
$
350,000

$
36,630

$
5,487,212

$
(2,632,327
)

$
15,149

$
(4,192
)

$
(14,957
)

$
8,497

$
3,246,012

Issuance of common shares related
   to stock plans

—

152

17,529

—

—

—

—

—

17,681

Issuance of preferred shares

175,000

—

(6,118
)

—

—

—

—

—

168,882

Stock-based compensation, net

—

—

7,232

—

(4,768
)

—

5,050

—

7,514

Distributions to non-controlling
   interests

—

—

—

—

—

—

—

(627
)

(627
)
Dividends declared-common shares

—

—

—

(209,763
)

—

—

—

—

(209,763
)
Dividends declared-preferred shares

—

—

—

(20,810
)

—

—

—

—

(20,810
)
Comprehensive (loss) income

—

—

—

(23,647
)

—

2,721

—

1,053

(19,873
)
Balance, September 30, 2017
$
525,000

$
36,782

$
5,505,855

$
(2,886,547
)

$
10,381

$
(1,471
)

$
(9,907
)

$
8,923

$
3,189,016

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

	Nine Months						Six Months
	Ended September 30,						Ended June 30,
	2017			2016			2018			2017
Cash flow from operating activities:
Net (loss) income	$	(22,919	)	$	27,165
Adjustments to reconcile net (loss) income to net cash flow provided by operating activities:
Net loss							$	(56,530	)	$	(24,150	)
Adjustments to reconcile net loss to net cash flow provided by operating activities:
Depreciation and amortization		266,370			290,051			146,886			181,160
Stock-based compensation		9,537			5,444			4,722			7,976
Amortization and write-off of debt issuance costs and fair market value of debt adjustments		5,959			1,605			14,235			1,896
Loss on extinguishment of debt		63,204			—			49,016			596
Equity in net income of joint ventures		(2,429	)		(14,081	)
Equity in net (income) loss of joint ventures								(12,607	)		2,382
Reserve of preferred equity interests, net		60,623			—			2,336			76,000
Net loss on sale and change in control of interests		—			1,087
Operating cash distributions from joint ventures		6,235			5,921			3,768			3,446
Gain on disposition of real estate		(127,017	)		(47,470	)
Gain on disposition of real estate, net								(39,519	)		(82,726	)
Impairment charges		65,453			104,877			48,504			50,069
Valuation allowance of prepaid tax asset		8,777			—
Assumption of buildings due to lease terminations		(8,585	)		—
Interest rate hedging activities								(4,538	)		—
Assumption of building due to ground lease termination								(2,150	)		—
Change in notes receivable accrued interest		(3,168	)		(7,937	)		968			(3,131	)
Net change in accounts receivable		(190	)		81			(1,747	)		3,519
Net change in accounts payable and accrued expenses		2,514			(3,045	)		13,805			2,443
Net change in other operating assets and liabilities		(22,131	)		(12,676	)		(5,394	)		(9,742	)
Total adjustments		325,152			323,857			218,285			233,888
Net cash flow provided by operating activities		302,233			351,022			161,755			209,738
Cash flow from investing activities:
Real estate acquired, net of liabilities and cash assumed		(86,079	)		(145,975	)		—			(86,066	)
Real estate developed and improvements to operating real estate		(89,753	)		(134,810	)		(68,108	)		(56,431	)
Proceeds from disposition of real estate		454,715			296,224			301,545			300,474
Hurricane property insurance advance proceeds								20,193			—
Equity contributions to joint ventures		(69,149	)		(1,452	)		(108	)		(69,068	)
Distributions from unconsolidated joint ventures		21,781			22,307			25,141			7,025
Repayment of joint venture advances, net		7,476			—
Issuance of notes receivable		—			(6,801	)
Repayment of joint venture advances								46,400			1,190
Repayment of notes receivable		31,068			4,934			—			31,068
Net cash flow provided by investing activities		270,059			34,427			325,063			128,192
Cash flow from financing activities:
Proceeds from revolving credit facilities, net		60,000			100,000			45,000			—
Proceeds from issuance of senior notes, net of offering expenses		791,220			—			—			445,271
Repayment of senior notes		(958,509	)		(240,000	)		(924,751	)		(300,000	)
Repayment of term loan and mortgage debt		(434,240	)		(33,089	)		(758,937	)		(74,071	)
Payment of debt issuance costs		(6,704	)		(41	)		(32,825	)		(532	)
Proceeds from issuance of preferred shares, net of offering expenses		168,881			—			—			168,903
Proceeds from mortgages payable								1,350,000			—
Issuance of common shares in conjunction with equity award plans and dividend reinvestment plan		15,953			8,105			5,148			9,884
Redemption of operating partnership units								(736	)		—
Distributions to non-controlling interests and redeemable operating partnership units		(626	)		(830	)		(406	)		(423	)
Dividends paid		(227,399	)		(218,762	)		(157,236	)		(150,655	)
Net cash flow used for financing activities		(591,424	)		(384,617	)
Net cash flow (used for) provided by financing activities								(474,743	)		98,377

Effect of foreign exchange rate changes on cash and cash equivalents		1			2			(2	)		4
Net (decrease) increase in cash, cash equivalents and restricted cash		(19,132	)		832
Net increase in cash, cash equivalents and restricted cash								12,075			436,307
Cash, cash equivalents and restricted cash, beginning of period		39,225			32,520			94,724			39,225
Cash, cash equivalents and restricted cash, end of period	$	20,094		$	33,354		$	106,797		$	475,536

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

DDR Corp. and its related consolidated real estate subsidiaries (collectively, the “Company” or “DDR”) and unconsolidated joint ventures are primarily engaged in the business of acquiring, owning, developing, redeveloping, expanding, leasing, financing and managing shopping centers. Unless otherwise provided, references herein to the Company or DDR include DDR Corp. and its wholly-owned subsidiaries and consolidated joint ventures. The Company’s tenant base primarily includes national and regional retail chains and local retailers. Consequently, the Company’s credit risk is concentrated in the retail industry.

On July 1, 2018, the Company completed a spin-off of 48 shopping centers, representing $2.7 billion of gross book asset value and $1.27 billion of mortgage debt, as of June 30, 2018, composed of 36 continental U.S. assets and all 12 of DDR’s shopping centers in Puerto Rico, into a separate, publicly-traded real estate investment trust (“REIT”), Retail Value Inc. (“RVI”). DDR has retained a preferred stock investment in RVI of $190 million and expects to continue to manage the RVI assets pursuant to management agreements. At June 30, 2018, RVI was a wholly-owned subsidiary of DDR Corp.

The preparation of financial statements in conformity with generally accepted accounting principles (“GAAP”) requires 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 the year. Actual results could differ from those estimates.

~~Certain reclassifications have been made to the Company’s 2016 financial statements to conform to the 2017 presentation.~~

These financial statements have been prepared by the Company in accordance with GAAP for interim financial information and the applicable rules and regulations of the Securities and Exchange Commission. Accordingly, they do not include all information and footnotes required by GAAP for complete financial statements. However, in the opinion of management, the interim financial statements include all adjustments, consisting of only normal recurring adjustments, necessary for a fair statement of the results of the periods presented. The results of operations for the three and ~~nine~~six months ended ~~September~~June 30, ~~2017~~2018 and ~~2016,~~2017, are not necessarily indicative of the results that may be expected for the full year. These condensed consolidated financial statements should be read in conjunction with the Company’s audited financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, ~~2016~~2017.

The consolidated financial statements include the results of the Company and all entities in which the Company has a controlling interest or has been determined to be the primary beneficiary of a variable interest entity (“VIE”). All significant inter-company balances and transactions have been eliminated in consolidation. Investments in real estate joint ventures in which the Company has the ability to exercise significant influence, but does not have financial or operating control, are accounted for using the equity method of accounting. Accordingly, the Company’s share of the earnings (or loss) of these joint ventures is included in consolidated net income (loss).

The Company has two unconsolidated joint ventures included in the Company’s joint venture investments that are considered VIEs for which the Company is not the primary beneficiary. The Company’s maximum exposure to losses associated with these VIEs is limited to its aggregate investment, which was ~~$334.0~~$230.3 million and ~~$405.4~~$284.1 million as of ~~September~~June 30, ~~2017~~2018 and December 31, ~~2016,~~2017, respectively.

Statements of Cash Flows and Supplemental Disclosure of Non-Cash Investing and Financing Information

Non-cash investing and financing activities are summarized as follows (in millions):

	Nine Months				Six Months
	Ended September 30,				Ended June 30,
	2017		2016		2018		2017
Accounts payable related to construction in progress	$	11.4	$	15.8	$	16.7	$	15.7
Assumption of buildings due to lease termination		8.6		—
Receivable and reduction of real estate assets, net related to hurricane casualty		59.7		—
Receivable and reduction of real estate assets, net - related to hurricane						7.8		—
Assumption of building due to ground lease termination						2.2	—
Dividends declared		78.4		75.2		78.7		76.7
Conversion of Operating Partnership Units						0.9	—

The Company declared common share dividends of ~~$0.19 per share and $0.57~~$0.38 per share for ~~both~~each of the three ~~and nine~~ months ended ~~September~~June 30, 2018 and 2017 and ~~2016, respectively.~~ $0.76 per share for the six months ended June 30, 2018 and 2017.

~~Fee and other income was composed~~In May 2018, the Board of Directors of the ~~following (in thousands):~~Company, pursuant to authority granted by the shareholders, approved a one-for-two reverse stock split of the Company’s common shares as of May 18, 2018. All share and per share data included in these unaudited condensed consolidated financial statements give retroactive effect to the reverse stock split for all periods presented.

In ~~September 2015,~~May 2014, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. ~~2015-16,~~2014-09, ~~Business Combinations (Topic 805)~~Revenue from Contracts with Customers. The objective of ASU No. ~~2015-16 provides~~2014-09 is to establish a single, comprehensive, five-step model for entities to use in accounting for revenue arising from contracts with customers that will supersede most of the existing revenue recognition guidance, ~~pertaining~~including industry-specific guidance. The core principle of this standard is that an entity recognizes revenue to ~~entities~~depict the transfer of promised goods or services to customers in an amount that ~~have reported provisional amounts for items in a business combination for~~reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. ASU No. 2014-09 applies to all contracts with customers except those that are within the scope of other topics in the FASB Accounting Standards Codification (“ASC”). The new guidance was effective for public companies for annual reporting periods (including interim periods within those periods) beginning after December 15, 2017. The Company has adopted the new accounting ~~is incomplete by~~guidance for revenue from contracts with customers (“Topic 606”) on January 1, 2018 using the ~~end~~modified retrospective approach and therefore, the comparative information has not been adjusted. The guidance has been applied to contracts that are not completed as of the ~~reporting period~~date of initial application and the impact of the adoption was not material (Note 2).

In February 2017, the FASB issued ASU 2017-05, Other Income-Gains and Losses from Derecognition of Nonfinancial Assets (Subtopic 610-20): Clarifying the Scope of Asset Derecognition Guidance and Accounting for Partial Sales of Nonfinancial Assets (“Topic 610”) for gains and losses from the sale and/or transfer of real estate property. Topic 610 eliminates guidance specific to real estate sales in ~~which~~ASC 360-20. As such, sales and partial sales of real estate assets will now be subject to the ~~combination occurs and during the measurement period~~ have an adjustment to provisional amounts recognized. The guidance requires that an acquirer recognize adjustments to provisional amounts that are identified during the measurement period in the reporting period in which the adjustment amounts are determined. Any adjustments should be calculatedsame derecognition model as ~~if the accounting had been completed at the acquisition date.~~all other nonfinancial assets. The guidance is effective for ~~public companies for fiscal years~~annual periods beginning after December 15, ~~2016. In addition,~~2017, including interim periods within that reporting period. The effective date of this guidance coincides with revenue recognition guidance discussed in Note 2. On January ~~2017,~~1, 2018, the ~~FASB issued ASU No. 2017-01,~~ ~~Business Combinations (Topic 805) - Clarifying~~Company adopted Topic 610 using the ~~Definition of a Business~~. ASU No. 2017-01 clarifies the definition and provides a more robust framework to use in determining when a set of assets and activities constitutes a business. ASU No. 2017-01 is intended to provide guidance when evaluating whether transactions should be accountedmodified retrospective approach for contracts that are not completed as acquisitions (or disposals) of assets or businesses. The guidance is effective for public companies for fiscal years beginning after December 15, 2017. Early adoption is permitted for both standards. Application of the ~~guidance is prospective.~~

date of initial application. The Company ~~adopted~~has determined that the ~~standards effective January 1, 2017, with respect to its asset acquisitions. Under these new standards, the Company’s purchase~~adoption of a shopping center is expected to be classified as an acquisition of an asset and not classified as an acquisition of a business. Transaction costs from the acquisition of a business are expensed as incurred, in contrast to transaction costs from the acquisition of an asset, which are capitalized to real estate assets upon acquisition. As a result of these new standards, the majority of the transaction costs incurred related to the acquisition of shopping centers are capitalized to real estate assets (Note 3). ~~This change~~this standard did not have a material impact on the Company’s consolidated financial statements.

~~In August 2016, the FASB issued ASU No. 2016-15,~~ ~~Statement of Cash Flows: Classification of Certain Cash Receipts and Cash Payments.~~ ASU No. 2016-15 provides guidance on certain specific cash flow issues, including, but not limited to, debt prepayment or extinguishment costs, contingent consideration payments made after a business combination and distributions received from equity method investees. In addition, in November 2016, the FASB issued ASU No. 2016-18, ~~Statement of Cash Flows (Topic 230: Restricted Cash~~. ASU No. 2016-18 clarifies certain existing principles in Accounting Standards Codification (“ASC”) 230, including providing additional guidance related to transfers between cash and restricted cash and how entities present, in their statements of cash flows, the cash receipts and cash payments that directly affect the restricted cash accounts. These standards are effective for periods beginning after December 15, 2017, and shall be applied retrospectively where practicable. Early adoption is permitted.

The Company adopted the updated standards effective January 1, 2017. The adoption of these standards modified the Company's 2017 presentation of certain activities within the consolidated statements of cash flows and related disclosures.

~~In May 2014, the FASB issued ASU No. 2014-09,~~ ~~Revenue from Contracts with Customers~~. The objective of ASU No. 2014-09 is to establish a single comprehensive five-step model for entities to use in accounting for revenue arising from contracts with customers that will supersede most of the existing revenue recognition guidance, including industry-specific guidance. The core principle of this standard is that an entity recognizes revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. ASU No. 2014-09 applies to all contracts with customers except those that are within the scope of other topics in the ASC. The new guidance is effective for public companies for annual reporting periods (including interim periods within those periods) beginning after December 15, 2017. Entities have the option of using either a full retrospective or modified retrospective approach to adopt ASU No. 2014-09. The Company plans to adopt using the modified retrospective approach for financial statements issued after January 1, 2018.

Most significantly for the real estate industry, leasing transactions are not within the scope of the new standard. A majority of the Company’s tenant-related revenue is recognized pursuant to lease agreements and will be governed by the recently issued leasing guidance discussed below. The Company completed its assessment of ASU No. 2014-09 and has concluded that the guidance will not have a material impact on the method of revenue recognition, excluding tenant-related revenue with respect to leasing transactions. The Company anticipates that upon adoption of ASU No. 2014-09, the recognition of lease commission income earned pursuant to its management agreements with unconsolidated joint ventures most likely will be accelerated into an earlier quarter than recognized in current GAAP. The majority of the Company’s lease commission income is recognized 50% upon lease execution and 50% upon tenant rent commencement. Under the new standard, the Company anticipates that a lease commission will be recognized in its entirety upon lease execution. This revenue is not considered material to the Company’s consolidated financial statements.

In February 2016, the FASB issued ASU No. 2016-02, Leases (Topic 842). The amendments in this update govern a number of areas including, but not limited to, accounting for leases, replacing the existing guidance in ASC No. 840, Leases. Under this standard, among other changes in practice, a lessee’s rights and obligations under most leases, including existing and new arrangements, would be recognized as assets and liabilities, respectively, on the balance sheet. Other significant provisions of this standard include (i) defining the “lease term” to include the ~~noncancellable~~non-cancelable period together with periods for which there is a significant economic incentive for the lessee to extend or not terminate the lease, (ii) defining the initial lease liability to be recorded on the balance sheet to contemplate only those variable lease payments that depend on an index or that are in substance “fixed,” (iii) a dual approach for determining whether lease expense is recognized on a straight-line or accelerated basis, depending on whether the lessee is expected to consume more than an insignificant portion of the leased asset’s economic benefits and (iv) a requirement to bifurcate certain lease and non-lease components. The lease standard is effective for fiscal years beginning after December 15, 2018 (including interim periods within those fiscal years), with early adoption permitted. The Company ~~has not yet selected~~will adopt the ~~method of adoption.~~standard using the modified retrospective approach for financial statements issued after January 1, 2019.

The Company is in the process of evaluating the impact that the adoption of ASU No. 2016-02 will have on its consolidated financial statements and disclosures. The Company has currently identified several areas within its accounting policies it believes could be impacted by the new ~~standard.~~standard, including where the Company is a lessor under its tenant lease agreements and a lessee under its ground leases. The Company may have a change in presentation on its consolidated ~~statement~~statements of operations with regards to Recoveries from Tenants, which includes reimbursements from tenants for certain operating expenses, real estate taxes and insurance. ~~Tenant expense reimbursements with a service obligation are not covered within the scope of ASU No. 2016-02.~~

The Company also has certain lease arrangements with its tenants for space at its shopping centers in which the contractual amounts due under the lease by the lessee are not allocated between the rental and expense reimbursement components (“Gross Leases”). The aggregate revenue earned under Gross Leases is presented as Minimum Rents in the consolidated statements of operations. AsIn July 2018, the FASB approved targeted improvements to the Leases standard that provides lessors with a ~~result,~~practical expedient by class of underlying asset, to avoid separating the non-lease components from the lease component of certain contracts. Such practical expedient is limited to circumstances in which (i) the timing and pattern of transfer are the same for the non-lease component and the related lease component and (ii) the stand alone lease component would be classified as an operating lease if accounted for separately. The Company will elect the practical expedient which would allow the Company ~~anticipates it will be required~~the ability to ~~bifurcate~~account for the ~~presentation of certain expense reimbursements as well as allocate~~combined component based on its predominate characteristics if the ~~fair value of~~underlying asset meets the embedded revenue associated with these reimbursements for Gross Leases, which represent an immaterial portion of the Company’s lease portfolio, and separately present such amounts in its consolidated statements of operations based upon materiality. The Company intends to adopt the practicable expedient method in applying this standard to Gross Leases entered into or modified after the effective date of the standard. two criteria defined above.

In addition, the Company has ground lease agreements in which the Company is the lessee for land ~~underneath~~beneath all or a portion of the buildings at ~~five~~three shopping centers. Currently, the Company accounts for these arrangements as operating leases. Under the new standard, the Company will record its rights and obligations under these leases as ana right of use asset and lease liability on its consolidated balance sheets. The Company is currently in the process of evaluating the inputs required to calculate the amount that will be recorded on its balance sheet for each ground lease. Lastly, this standard impacts the lessor’s ability to capitalize

initial direct costs related to the leasing of vacant space. However, the Company does not believe this change regarding capitalization will have a material impact on its consolidated financial statements.

In June 2016, the FASB issued an amendment on measurement of credit losses on financial assets held by a reporting entity at each reporting date. The guidance requires the use of a new current expected credit loss ("CECL") model in estimating allowances for doubtful accounts with respect to accounts receivable, straight-line rents receivable and notes receivable. The CECL model requires that the Company estimate its lifetime expected credit loss with respect to these receivables and record allowances that, when deducted from the balance of the receivables, represent the estimated net amounts expected to be collected. This guidance is effective for fiscal years, and for interim reporting periods within those fiscal years, beginning after December 15, 2019. The Company is in the process of evaluating the impact of this guidance.

The Company has adopted the new accounting guidance for revenue from contracts with customers (“Topic 606”) on January 1, 2018 using the modified retrospective approach and therefore, the comparative information has not been adjusted. The guidance has been applied to contracts that are not completed as of the date of initial application. Most significantly for the real estate industry, leasing transactions are not within the scope of the new standard. A majority of the Company’s tenant-related revenue is recognized pursuant to lease agreements and will be governed by the leasing guidance discussed in Note 1.

Historically, the majority of the Company’s lease commission revenue has been recognized 50% upon lease execution and 50% upon tenant rent commencement. Upon adoption of Topic 606, lease commission revenue will generally be recognized in its entirety upon lease execution. The impact of adopting Topic 606 on the Company’s consolidated financial statements with respect to the change in revenue recognition as related to lease commissions revenue at January 1, 2018 and for the three and six months ended June 30, 2018 was not material.

Minimum rents from tenants in shopping centers generally range from one month to 30 years and are recognized on a straight-line basis over the noncancelable term of the lease, which include the effects of applicable rent steps and abatements. Percentage and overage rents are recognized after a tenant’s reported sales have exceeded the applicable sales breakpoint set forth in the applicable lease.

Revenues associated with expense reimbursements from tenants for common area maintenance, taxes, insurance and other property operating expenses, based upon the tenant’s lease provisions, are recognized in the period the related expenses are incurred.

Lease termination fees are recognized upon the effective termination of a tenant’s lease when the Company has no further obligations under the lease.

Ancillary and other property-related income, primarily composed of leasing vacant space to temporary tenants, kiosk income, parking and theatre income, is recognized in the period earned.

The Company will record revenue for covered business interruption in the period it determines that it is probable it will be compensated. This income recognition criteria will likely result in business interruption insurance recoveries being recorded in a period subsequent to the period the Company experiences lost revenue from the damaged properties.

Sales of nonfinancial assets, such as real estate, are to be recognized when control of the asset transfers to the buyer, which will occur when the buyer has the ability to direct the use of, or obtain substantially all of the remaining benefits from, the asset. This generally occurs when the transaction closes and consideration is exchanged for control of the asset.

The Company’s revenues from contracts with customers generally relate to asset and property management fees, leasing commission, and development fees. These revenues are derived from the Company’s management agreements with unconsolidated joint ventures and is recognized to the extent attributable to the unaffiliated ownership in the unconsolidated joint venture to which it relates. These contracts are generally five years in duration with ongoing one-year extension options by the Company. Termination rights under these contracts vary by contract, but generally include termination for cause by either party or due to sale of the property.

Asset and property management services include property maintenance, tenant coordination, accounting and financial services. Asset and Property management services represent a series of distinct daily services. Accordingly, the Company satisfies the performance obligation as services are rendered over time.

The Company is compensated for property management services through a monthly management fee earned based on a specified percentage of the monthly rental receipts generated from the property under management. The Company is compensated for asset management services through a fee that is billed to the customer quarterly in arrears and recognized as revenue monthly as the services are rendered, based on a percentage of aggregate capital contributions for assets under management at the end of the quarter.

The Company provides strategic advice and execution to its unconsolidated joint ventures in connection with the leasing of retail space. The Company is compensated for services in the form of a commission. The commission is paid upon the occurrence of certain contractual events which may be contingent. For example, a portion of the commission may be paid upon execution of the lease by the tenant, with the remaining paid upon occurrence of another future contingent event (e.g. payment of first month’s rent or tenant move-in). The Company typically satisfies its performance obligation at a point in time when control is transferred; generally, at the time of the first contractual event where there is a present right to payment. The Company looks to history, experience with a customer, and deal specific considerations, to support its judgement that the second contingency will be met. Therefore, the Company typically accelerates the recognition of revenue associated with the second contingent event (if any) to the point in time when control of its service is transferred.

Development services consist of construction management oversight services such as hiring general contractors, reviewing plans and specification, performing inspections, reviewing documentation and accounting services. These services represent a series of distinct services and are recognized over time as services are rendered. The Company is compensated monthly for services based on percentage of aggregate amount spent on the construction during the month.

Contract assets represent assets for revenue that has been recognized in advance of billing the customer and for which the right to bill is contingent upon something other than the passage of time. This is common for contingent portions of commissions. The portion of payments retained by the customer until the second contingent event is not considered a significant financing component because the right to payment is expected to become unconditional within one year or less. Contract assets are transferred to receivables when the right to payment becomes unconditional.

Revenue from contracts with customers is included in Fee and Other Income on the consolidated statement of operations and was composed of the following (in thousands):

	Three Months				Six Months
	Ended June 30,				Ended June 30,
	2018		2017		2018		2017
Revenue from contracts with customers:
Asset and property management fees	$	4,886	$	6,017	$	10,482	$	12,190
Leasing commissions		1,312		1,461		2,934		3,328
Development fees		303		450		628		1,034
Total revenue from contracts with customers		6,501		7,928		14,044		16,552
Other fee income:
Ancillary and other property income		4,817		4,660		9,160		8,992
Lease termination fees		2,695		630		3,216		808
Other		714		890		1,326		1,773
Total fee and other income	$	14,727	$	14,108	$	27,746	$	28,125

The aggregate amount of receivables from contracts with customers was $1.7 million and $1.9 million as of June 30, 2018 and December 31, 2017, respectively.

Contract assets are included in Other Assets, net on the consolidated balance sheets. The significant changes in the contract asset balances during the six months ended June 30, 2018 are as follows (in thousands):

All revenue from contracts with customers meets the exemption criteria for variable consideration directly allocable to wholly unsatisfied performance obligations or unsatisfied promise within a series and, therefore, the Company does not disclose the value of transaction price allocated to unsatisfied performance obligations. There is no fixed consideration included in the transaction price for any of these revenues.

At ~~September~~June 30, ~~2017~~2018 and December 31, ~~2016,~~2017, the Company had ownership interests in various unconsolidated joint ventures that had an investment in ~~142~~114 and ~~151~~136 shopping center properties, respectively. Condensed combined financial information of the Company’s unconsolidated joint venture investments is as follows (in thousands):

	September 30, 2017			December 31, 2016			June 30, 2018			December 31, 2017
Condensed Combined Balance Sheets
Land	$	1,250,276		$	1,287,675		$	1,008,195		$	1,126,703
Buildings		3,238,956			3,376,720			2,748,883			3,057,072
Fixtures and tenant improvements		212,529			203,824			208,000			213,989
		4,701,761			4,868,219			3,965,078			4,397,764
Less: Accumulated depreciation		(957,207	)		(884,356	)		(947,136	)		(962,038	)
		3,744,554			3,983,863			3,017,942			3,435,726
Construction in progress and land		56,381			56,983			54,151			53,928
Real estate, net		3,800,935			4,040,846			3,072,093			3,489,654
Cash and restricted cash		117,211			50,378			96,207			155,894
Receivables, net		53,199			50,685			47,081			51,396
Other assets, net		205,436			248,664			138,678			174,832
	$	4,176,781		$	4,390,573		$	3,354,059		$	3,871,776

Mortgage debt	$	2,698,105		$	3,034,399		$	2,189,888		$	2,501,163
Notes and accrued interest payable to the Company		2,626			1,584			2,156			1,365
Other liabilities		195,817			206,949			136,926			156,076
		2,896,548			3,242,932			2,328,970			2,658,604
Redeemable preferred equity – DDR		392,479			393,338			300,757			345,149
Accumulated equity		887,754			754,303			724,332			868,023
	$	4,176,781		$	4,390,573		$	3,354,059		$	3,871,776

Company's share of accumulated equity	$	134,001		$	97,977		$	115,644		$	132,710
Redeemable preferred equity, net(A)		327,309			393,338			228,077			277,776
Basis differentials		(26,103	)		(36,117	)		(21,882	)		(24,973	)
Deferred development fees, net of portion related to the Company's interest		(2,881	)		(2,651	)		(2,891	)		(3,065	)
Amounts payable to the Company		2,626			1,584			2,156			1,365
Investments in and Advances to Joint Ventures, net	$	434,952		$	454,131		$	321,104		$	383,813

Three Months

Nine Months

Ended September 30,

Ended September 30,

2017

2016

2017

2016

Condensed Combined Statements of Operations

Revenues from operations
$
126,992

$
127,676

$
380,568

$
384,476

Expenses from operations:

Operating expenses

36,041

35,547

110,400

110,176

Impairment charges

2,160

13,598

82,667

13,598

Depreciation and amortization

45,291

47,955

137,976

146,011

Interest expense

24,276

33,567

83,410

100,208

Preferred share expense

8,307

8,438

24,674

25,007

Other (income) expense, net

6,577

5,829

22,204

17,959

122,652

144,934

461,331

412,959

Income (loss) from continuing operations

4,340

(17,258
)

(80,763
)

(28,483
)
Gain on disposition of real estate, net

31,740

658

30,764

54,255

Net income (loss) attributable to unconsolidated joint ventures
$
36,080

$
(16,600
)

$
(49,999
)

$
25,772

Company's share of equity in net income (loss) of joint ventures
$
3,819

$
(1,755
)

$
(2,570
)

$
10,336

Basis differential adjustments^(A)

992

298

4,999

3,745

Equity in net income (loss) of joint ventures
$
4,811

$
(1,457
)

$
2,429

$
14,081

(A)	Includes PIK that has accrued since March 2017 of $9.3 million and $6.3 million, which was fully reserved at June 30, 2018 and December 31, 2017, respectively.

	Three Months					Six Months
	Ended June 30,					Ended June 30,
	2018		2017			2018			2017
Condensed Combined Statements of Operations
Revenues from operations^(A)	$	107,759	$	126,528		$	222,284		$	253,576
Expenses from operations:
Operating expenses		32,314		37,691			66,695			74,359
Impairment charges		—		27,850			16,910			80,507
Depreciation and amortization		37,299		47,589			76,976			92,685
Interest expense		24,946		29,004			49,189			59,134
Preferred share expense		6,317		8,239			12,825			16,367
Other (income) expense, net		6,616		9,054			14,037			15,627
		107,492		159,427			236,632			338,679
Income (loss) from continuing operations		267		(32,899	)		(14,348	)		(85,103	)
Gain (loss) on disposition of real estate, net		12,356		(803	)		50,376			(976	)
Net income (loss) attributable to unconsolidated joint ventures	$	12,623	$	(33,702	)	$	36,028		$	(86,079	)
Company's share of equity in net income (loss) of joint ventures	$	3,506	$	(1,090	)	$	11,979		$	(6,383	)
Basis differential adjustments^(B)		315		373			628			4,001
Equity in net income (loss) of joint ventures	$	3,821	$	(717	)	$	12,607		$	(2,382	)

Service fees and income earned by the Company through management, ~~financing,~~ leasing and development activities performed related to all of the Company’s unconsolidated joint ventures and interest income on its preferred interests in the BRE DDR Retail Holdings joint ventures are as follows (in millions):

	Three Months				Nine Months				Three Months				Six Months
	Ended September 30,				Ended September 30,				Ended June 30,				Ended June 30,
	2017		2016		2017		2016		2018		2017		2018		2017
Management and other fees	$	5.3	$	6.3	$	18.9	$	22.2
Revenue from contracts with customers:
Asset and property management fees									$	4.9	$	6.0	$	10.5	$	12.2
Development fees and leasing commissions										1.6		1.9		3.5		4.4
Total revenue from contracts with customers										6.5		7.9		14.0		16.6
Other:
Interest income		6.3		8.4		20.1		25.0		4.8		6.3		9.8		13.8
Development fees and leasing commissions		1.8		2.2		6.2		5.9
Other										0.7		0.7		1.2		1.4
Total fee and other income									$	12.0	$	14.9	$	25.0	$	31.8

The Company’s joint venture agreements generally include provisions whereby each partner has the right to trigger a purchase or sale of its interest in the joint venture or to initiate a purchase or sale of the properties after a certain number of years or if either party is in default of the joint venture agreements. The Company is not obligated to purchase the interests of its outside joint venture partners under these provisions.

The Company’s two unconsolidated investments with The Blackstone Group L.P. (“Blackstone”), BRE DDR Retail Holdings III (“BRE DDR III”) and BRE DDR Retail Holdings IV (“BRE DDR IV” and, together with BRE DDR III, the “BRE DDR Joint Ventures”), have substantially similar terms and are summarized as follows (in millions, except properties owned):

		Common Equity		Preferred Investment (Principal)						Properties Owned					Common Equity		Preferred Investment (Principal)						Properties Owned
	Formation	Initial		Initial		September 30, 2017		Net of Reserve		Inception		September 30, 2017		Formation	Initial		Initial		June 30, 2018		Net of Reserve		Inception		June 30, 2018
BRE DDR III	Oct 2014	$	19.6	$	300.0	$	314.5	$	262.7		70		42	Oct 2014	$	19.6	$	300.0	$	219.9	$	171.2		70		28
BRE DDR IV	Dec 2015		12.9		82.6		67.1		58.3		6		6	Dec 2015		12.9		82.6		66.7		52.0		6		5
				$	382.6	$	381.6	$	321.0								$	382.6	$	286.6	$	223.2

An affiliate of Blackstone is the managing member and effectively owns 95% of the common equity of each of the two BRE DDR Joint Ventures, and consolidated affiliates of DDR effectively own the remaining 5%. The Company provides leasing and property management services to all of the joint venture properties. The Company cannot be removed as the property and leasing manager until the preferred equity, as discussed below, is redeemed in full (except for certain specified events).

The Company reassessed the aggregate valuation allowance at June 30, 2018, with respect to its preferred investments in BRE DDR III and BRE DDR IV. Based upon actual timing and values of recent property sales, as well as current market assumptions, the Company adjusted the aggregate valuation allowance by a reduction of $1.6 million and an increase of $2.3 million for the three- and six-month periods ending June 30, 2018, respectively, resulting in a net valuation allowance of $63.4 million. The valuation allowance is recorded as Reserve of Preferred Equity Interests on the Company’s consolidated statements of operations. The Company will continue to monitor the investments and related valuation allowance which could be increased or decreased in future periods, as appropriate.

The Company’s preferred interests are entitled to certain preferential cumulative distributions payable out of operating cash flows and certain capital proceeds pursuant to the terms and conditions of the preferred investments. The preferred distributions are recognized as Interest Income within the Company’s consolidated statements of operations and are classified as a note receivable in Investments in and Advances to Joint Ventures on the Company’s consolidated balance sheets. ~~Blackstone has the right to defer up to 23.5% of the preferred fixed distributions as a payment in kind distribution or “PIK.”~~ The preferred investments have an annual distribution rate of 8.5% including any deferred and unpaid preferred distributions. Blackstone has the right to defer up to 2.0% of the 8.5% preferred fixed distributions as a payment in kind distribution or “PIK.” Blackstone has made this PIK deferral election since the formation of both joint ventures. The cash portion of the preferred fixed distributions is generally payable first out of operating cash flows and is current for both BRE DDR Joint Ventures. The Company has no expectation that the cash portion of the preferred fixed distribution will become impaired.

~~The unpaid preferred~~ investment (and any accrued distributions) is payable (1) at Blackstone’s option, in whole or in part, subject to early redemption premiums in certain circumstances during the first three years of the joint ventures; (2) at varying equity sharing levels with the common members under certain circumstances including specified financial covenants, upon a sale of properties over a certain threshold; (3) at DDR’s option after seven years (2021 for BRE DDR III and 2022 for BRE DDR IV); and (4) upon the incurrence of additional indebtedness by the joint ventures in excess of a certain threshold. Specifically, for BRE DDR III as of September 30, 2017, based upon the cumulative asset sales, net asset sale proceeds will be allocated at 51.9% to the preferred member. For BRE DDR IV, the preferred investment is collateralized by assets in which DDR has a 5% common equity interest for 95% of the value and by an additional three assets in which DDR has a nominal interest. The repayment of the BRE DDR IV preferred investment prior to 2022 is first subject to a remaining minimum net asset sales threshold of $4.9 million, of which $1.1 million is allocated to the preferred member. The net asset sale proceeds generated thereafter are expected to be available to repay the preferred member.

In the first quarter of 2017, the Company recorded a valuation allowance on each of the BRE DDR III and BRE DDR IV preferred investment interests of $70.0 million and $6.0 million, respectively, or $76.0 million in the aggregate. The valuation allowances were triggered late in the first quarter by an increase in the estimated market capitalization rates for the underlying real estate collateral of the investments. The values of open air shopping centers anchored by big box national retailers, particularly in secondary markets, have been under increasing pressure and most recently decreased due to the continued perceived threat of internet retail competition and recent tenant bankruptcies. Several large national retailers filed for bankruptcy in March and April 2017. A majority of the shopping centers collateralizing the preferred investments are those which have been most impacted by the rising capitalization rates. These factors have also reduced the number of potential investors and well-capitalized buyers for these types of assets. The managing member of the two joint ventures exercises significant influence over the timing of asset sales. Due to the Company’s expectation regarding the likely timing of asset sales, the valuation of the Company’s investments considers how management believes a third-party market participant would value the securities in the current higher capitalization rate environment. As a result, the investments were impaired to reflect the risk that the securities are not repaid in full in advance of the Company’s redemption rights in 2021 and 2022. The Company reassessed the aggregate valuation allowance at September 30, 2017, and based upon actual timing and values of recent property sales as well as current market assumptions, the Company adjusted the allowance on each of the BRE DDR III and BRE DDR IV preferred investment interests by a reduction of $18.1 million and an increase of $2.7 million, respectively, or $15.4 million in the aggregate, resulting in a net valuation allowance of $60.6 million. The valuation allowance is recorded as Reserve/Adjustment of Preferred Equity Interests on the Company’s consolidated statements of operations. The Company will continue to monitor the investments and related valuation allowance which could be increased or decreased in future periods, as appropriate.

~~As discussed above, the preferred 8.5% distribution rate has two components, a cash interest rate of 6.5% and an accrued PIK of 2.0%.~~ As a result of the valuation allowances recorded, ~~effective in March 2017,~~ the Company no longer recognizes as interest income the 2.0% ~~PIK (aggregating $4.5 million at September 30, 2017).~~PIK. Although Blackstone has the right to change its payment election, the Company expects future preferred distributions to continue to include the PIK component. The recognition of the PIK interest income will be reevaluated based upon any future adjustments to the aggregate valuation allowance, as appropriate.

In June 2017, the Company and an affiliate of Madison International Realty (“Madison”) recapitalized a joint venture with 52 shopping centers previously owned by the Company and various partners through the DDR Domestic Retail Fund I, totaling $1.05 billion. Madison International Real Estate Liquidity Fund VI, an investment fund managed by Madison, acquired 80% of the common equity and an affiliate of the Company retained its 20% interest. This ownership structure is consistent with the structure of the joint venture prior to the recapitalization. In addition, the Company will continue to provide leasing and management services. The recapitalization included the repayment of all outstanding mortgage debt previously held by the joint venture, a majority of which was scheduled to mature in July 2017. The joint venture obtained new mortgage loan financing aggregating $706.7 million (of which the Company’s pro rata share is $141.3 million) collateralized by the 52 assets with a maturity date of July 2022, including extensions. The Company contributed $46.9 million in cash to fund its pro rata share of the recapitalization and related debt refinancing.

The remaining three assets not involved in the recapitalization were distributed to the existing partners of DDR Domestic Retail Fund I at the aggregate book value of $74.0 million (of which the Company’s pro rata share was $14.8 million) and contributed to a new joint venture with the same ownership structure, DDR Manatee Liquidating Holdco I. The Company retained a 20% interest in the joint venture and will continue to provide leasing and management services. The assets in the joint venture are unencumbered.

From January 1, ~~2017~~2018 to ~~September~~June 30, ~~2017,~~2018, the DDRM Properties joint venture sold 12 assets for $191.8 million, the BRE DDR ~~Retail Holdings~~ III joint venture sold ~~eight~~nine assets for ~~an aggregate sales price of $164.3~~$193.9 million and ~~recorded a gain on sale of $30.9 million. The DDRTC Core Retail Fund~~the BRE DDR IV joint venture sold one asset for ~~$17.7~~$40.0 million. The Company’s ~~prorate~~pro rata share of the aggregate gain ~~form~~from these sales was ~~$2.0~~$9.3 million.

In January 2017, the Company acquired one shopping center in Chicago, Illinois, for $81.0 million. This acquisition was accounted for as an asset acquisition and the fair value was allocated as follows (in thousands):

Total consideration for the acquisition was paid in cash. The costs related to the acquisition of this asset were capitalized to real estate assets (Note 1). Included in the Company’s consolidated statements of operations are $5.1 million in total revenues from the date of acquisition through September 30, 2017, for the acquired property.

The Company has notes receivable, including accrued interest, that are collateralized by certain rights in development projects, partnership interests, sponsor guaranties and/or real estate assets, some of which are subordinate to other financings. At September 30, 2017, the Company’s loans outstanding had maturity dates ranging from June 2019 to June 2023 at an interest rate of 9.0%. At September 30, 2017, the Company did not have any loans outstanding that were past due. The following table reconciles the loans receivable on real estate (in thousands):

	September 30, 2017		December 31, 2016		June 30, 2018		December 31, 2017
Intangible assets:
In-place leases, net	$	79,257	$	99,600	$	57,059	$	71,809
Above-market leases, net		16,100		20,405		10,978		14,391
Lease origination costs		10,976		12,931		8,048		10,029
Tenant relations, net		93,153		108,662		73,811		86,178
Total intangible assets, net^(A)		199,486		241,598		149,896		182,407
Other assets:
Prepaid expenses^(B)		18,870		26,842		12,086		10,806
Other assets(C)		1,992		6,274		8,321		3,869
Deposits		5,766		5,965		4,931		5,076
Deferred charges, net		8,359		4,731		6,834		7,901
Total other assets, net	$	234,473	$	285,410	$	182,068	$	210,059

The following table discloses certain information regarding the Company’s Revolving Credit Facilities (as defined below) (in millions):

Carrying Value at

September 30, 2017

Weighted-Average

Interest Rate (A) at

September 30, 2017

Maturity Date

Carrying Amount at

June 30, 2018

Weighted-Average

Interest Rate (A) at

June 30, 2018

Maturity Date

Unsecured Credit Facility

60.0

2.2%

September 2021

45.0

3.3%

September 2021

PNC Facility

—

N/A

September 2021

—

N/A

September 2021

The Company also maintains ~~a $50 million~~an unsecured revolving credit facility with PNC Bank, National Association (the “PNC Facility” and, together with the Unsecured Credit Facility, the “Revolving Credit Facilities”). The PNC Facility ~~was also amended in September 2017 to reflect~~terms are substantially ~~the same terms as amended~~consistent with those contained in the Unsecured Credit Facility. In July 2018, the Company permanently reduced the borrowing capacity under the PNC Facility to $20 million (Note 13).

The Company’s borrowings under the Revolving Credit Facilities bear interest at variable rates at the Company’s election, based on either LIBOR, plus a specified spread ~~(1.0%~~(1.2% at ~~September~~June 30, ~~2017)~~2018) or the ~~Prime~~Alternative Base Rate, plus a specified spread (0.20% at June 30, 2018), as defined in the respective facility. The specified spreads vary depending on the Company’s long-term senior unsecured debt rating from Moody’s Investors Service, Inc. and S&P Global Ratings and their successors. The Company is required to comply with certain covenants under the Revolving Credit Facilities relating to total outstanding indebtedness, secured indebtedness, value of unencumbered real estate assets and fixed charge coverage. The Company was in compliance with these financial covenants at ~~September~~June 30, ~~2017.~~

On February 14, 2018, certain wholly-owned subsidiaries of RVI (collectively, the “Borrowers”), entered into a Loan Agreement (the “Loan Agreement”) which provides for a secured loan facility with an initial aggregate principal amount of $1.35 billion (the “Loan Facility”) in connection with the spin-off of RVI. The Borrowers’ obligations to pay principal, interest and other amounts under the Loan Facility are evidenced by certain promissory notes executed by the Borrowers (collectively, the “Notes”) which are secured by, among other things: (i) certain mortgages encumbering the Borrowers’ respective continental U.S. properties (a total of 36 properties); (ii) a pledge of the direct equity interest in the RVI subsidiaries that own the 12 Puerto Rico properties and a pledge of rents and other cash flows, insurance proceeds and condemnation awards in connection with the 12 Puerto Rico properties and (iii) a pledge of certain reserves and accounts of the Borrowers. Subsequent to closing, the originating lenders placed the Notes into a securitization trust which issued and sold mortgage-backed securities to investors.

The Loan Facility will mature on February 9, 2021, subject to two successive one-year extensions at Borrowers’ option conditioned upon, among other items, (i) an event of default shall not be continuing, (ii) in the case of the first one-year extension option, evidence that the debt yield (as defined and calculated in accordance with the Loan Agreement, but which is the ratio of net operating income of the continental U.S. properties to the outstanding principal amount of the Loan Facility) (the “Debt Yield”) equals or exceeds 11% and the ratio of the outstanding principal amount of the Notes to the value of the continental U.S. properties (based on appraisal values determined at the time of the initial closing) (the “Loan-to-Value Ratio”) is less than or equal to 50%, and (iii) in the case of the second one-year extension option, evidence that the Debt Yield equals or exceeds 12% and the Loan-to-Value Ratio is less than or equal to 45%.

The initial weighted-average interest rate applicable to the Notes is equal to one-month LIBOR plus a spread of 3.15% per annum, provided that such spread is subject to an increase of 0.25% per annum in connection with any exercise of the first extension option and an additional increase of 0.25% per annum in connection with any exercise of the second extension option. Borrowers are required to maintain an interest rate cap with respect to the principal amount of the Notes having (i) during the initial term of the Loan Facility, a LIBOR strike rate equal to 3.0% and (ii) with respect to any extension period, a LIBOR strike rate that would result in a

debt service coverage ratio of 1.20x based on the continental U.S. properties. Mortgage-backed securities securitized by the Notes were sold by the lenders to investors at a blended rate (prior to exercise of any extension option) of one-month LIBOR plus a spread of 2.91% per annum; the spread paid increased to 3.15% per annum based on terms included in the originating lenders’ initial financing commitment to Borrowers. Application of voluntary prepayments as described below may cause the weighted-average interest rate to increase over time.

The Loan Facility is structured as an interest only loan throughout the initial three-year term and any exercised extension options. As a result, so long as no Amortization Period (as described below) or event of default exists, any property cash flows available following payment of debt service and funding of certain required reserve accounts (including reserves for payment of real estate taxes, insurance premiums, ground rents, tenant improvements and capital expenditures), will be available to the Borrowers for general corporate purposes. An Amortization Period will be deemed to commence in the event the Borrowers fail to achieve a Debt Yield of 10.8%, 11.9%, 14.1% and 19.2% as of March 31, 2019, September 30, 2019, March 31, 2020 and September 30, 2020, respectively. In the event an Amortization Period occurs, any property cash flows available following payment of debt service and the funding of certain reserve accounts (including the reserve accounts referenced above and additional reserves established for payment of approved operating expenses, DDR management fees, certain public company costs, certain taxes and the minimum cash portion of required REIT distributions) shall be applied to the repayment of the Notes. During an Amortization Period, cash flow from the Borrowers’ operations will only be made available to RVI to pay required REIT distributions in an amount equal to the minimum portion of required REIT distributions allowed by law to be paid in cash (currently 20%), with the remainder of required REIT distributions during an Amortization Period likely to be paid by RVI in shares of its common stock.

Subject to certain conditions described in the Loan Agreement, the Borrowers may prepay principal amounts outstanding under the Loan Facility in whole or in part by providing (i) advance notice of prepayment to the lenders and (ii) remitting the prepayment premium described in the Loan Agreement. No prepayment premium is required with respect to any prepayments made after March 9, 2019. Additionally, no prepayment premium will apply to prepayments made in connection with permitted property sales. Each continental U.S. property has a portion of the original principal amount of the Loan Facility allocated to it (the “Allocated Loan Amount”). The amount of proceeds from the sale of an individual continental U.S. property required to be applied towards prepayment of the Notes (i.e., the property’s “release price”) will depend upon the Debt Yield at the time of the sale as follows:

Once the aggregate principal amount of the Notes is less than $270.0 million, 100% of net proceeds from the sales of continental U.S. properties must be applied towards prepayment of the Notes. Properties in Puerto Rico do not have Allocated Loan Amounts or minimum release prices; all proceeds from sales of Puerto Rico properties are required to be used to prepay the Notes, except that the Borrowers can obtain a release of all of the Puerto Rico properties for a minimum release price of $350.0 million.

Voluntary prepayments made by the Borrowers (including prepayments made with proceeds from asset sales) up to $337.5 million in the aggregate will be applied ratably to the senior and junior tranches of the Notes. All other prepayments (including prepayments made with property cash flows following commencement of any Amortization Period) will be applied to tranches of Notes (i) absent an event of default, in descending order of seniority (i.e., such prepayments will first be applied to the most senior tranches of Notes) and (ii) following any event of default, in such order as the loan servicer determines in its sole discretion. As a result, it is expected that the weighted average interest rate of the Notes will increase during the term of the Loan Facility.

In ~~August 2017,~~the event of a default, the contract rate of interest on the Notes will increase to the lesser of (i) the maximum rate allowed by law, or (ii) the greater of (A) 4% above the interest rate otherwise applicable and (B) the Prime Rate (as defined in the Loan Agreement) plus 1.0%. The Notes contain other terms and provisions that are customary for instruments of this nature.

In addition, a certain Environmental Indemnity Agreement and a certain Guaranty Agreement was executed in favor of the lenders under which RVI, a wholly-owned subsidiary of DDR at June 30, 2018, agreed to indemnify the lenders for certain environmental risks and guaranty the Borrowers’ obligations under the exceptions to the non-recourse provisions in the Loan Agreement. The Loan Agreement includes representations, warranties, affirmative and restrictive covenants and other provisions customary for agreements of this nature. The Loan Agreement also includes customary events of default, including, among others, principal and interest payment defaults, and breaches of affirmative or negative covenants; the Loan Agreement does not contain any financial maintenance covenants. Upon the occurrence of an event of default, the lenders may avail themselves of various customary

remedies under the Loan Agreement and other agreements executed in connection therewith or applicable law, including accelerating the Loan Facility and realizing on the real property collateral or pledged collateral.

At June 30, 2018, the mortgage balance outstanding was $1.27 billion. This mortgage was assumed by RVI in connection with the spin-off of RVI on July 1, 2018 (Note 13).

In the first quarter of 2018, in connection with the $1.35 billion mortgage loan and asset sales, the Company ~~issued $350.0~~repaid $900.0 million aggregate principal amount of ~~3.900%~~ senior unsecured notes ~~due August 2024. An effective discount~~with maturity dates ranging from July 2018 to February 2025 through a tender offer, $452.5 million of ~~$1.0~~mortgage debt and $200.0 million ~~was recorded. Total fees, including underwriting discounts, incurred by the Company were $2.9 million. In May 2017, the Company issued $450.0 million aggregate principal amount~~ of ~~4.700% senior~~an unsecured notes due June 2027. An effective discount of $0.8 million was recorded. Total fees, including underwriting discounts, incurred by the Company were $4.0 million. In September 2017, the Company repaid all of its 7.875% senior unsecured notes due September 2020 with an aggregate principal amount outstanding of $300.0 million.term loan. In connection with the redemption of the senior unsecured notes, ~~due September 2020,~~ the Company paid a make-whole amount of $51.2 million. In July 2017, the Company repaid all of its 4.75% senior unsecured notes due April 2018 with an aggregate principal amount outstanding of $300.0 million. In connection with the redemption of the senior unsecured notes due April 2018, the Company paid a make-whole amount of $7.3amounts totaling $28.4 million. These ~~make-whole~~make whole amounts are included in Other ~~income (expense)~~Income (Expense), net in the Company’s consolidated statements of operations.

In September 2017, the Company amended its $400 million unsecured term loan with Wells Fargo Bank, National Association, as administrative agent, and PNC Bank, National Association and KeyBank National Association, as syndication agents (the “Unsecured Term Loan”). As a result, the maturity date of $200 million of Tranche A loans under the Unsecured Term Loan was extended to January 2018, with two one-year extension options upon the Company’s request, provided certain conditions are satisfied and the maturity date for the remaining $200 million of Tranche B loans under the facility was extended to January 2023. The Company may increase the amount of the facility provided that lenders agree to certain terms. The interest rate remains unchanged at variable rates based on LIBOR as defined in the loan agreements, plus a specified spread based on the Company’s long-term senior unsecured debt rating (1.1% at September 30, 2017).

The ~~Company’s~~ scheduled principal ~~repayments, after reflecting~~payments of the ~~2017 refinancings~~Revolving Credit Facilities (Note 5) and ~~repayments,~~unsecured and secured indebtedness, excluding extension options, as of June 30, 2018, are ~~presented in Liquidity, Capital Resources and Financing Activities section of Management’s Discussion and Analysis included herein.~~as follows (in thousands):

The following methods and assumptions were used by the Company in estimating fair value disclosures of financial instruments:

The fair value is estimated using a discounted cash flow analysis in which the Company uses unobservable inputs such as market interest rates determined by the loan to value and market capitalization rates related to the underlying collateral at which management believes similar loans would be made and classified as Level 3 in the fair value hierarchy. The fair value of these notes was approximately ~~$348.7~~$249.1 million and ~~$445.2~~$299.0 million at ~~September~~June 30, ~~2017~~2018 and December 31, ~~2016,~~2017, respectively, as compared to the carrying amounts of ~~$347.3~~$248.2 million and ~~$443.3~~$297.9 million, respectively.

The fair market value of senior notes is determined using the trading price of the Company’s public debt. The fair market value for all other debt is estimated using a discounted cash flow technique that incorporates future contractual interest and principal payments and a market interest yield curve with adjustments for duration, optionality and risk profile, including the Company’s non-performance risk and loan to value. The Company’s senior notes and all other debt are classified as Level 2 and Level 3, respectively, in the fair value hierarchy.

Considerable judgment is necessary to develop estimated fair values of financial instruments. Accordingly, the estimates presented are not necessarily indicative of the amounts the Company could realize on disposition of the financial instruments.

Debt instruments with carrying values that are different than estimated fair values are summarized as follows (in thousands):

	September 30, 2017				December 31, 2016				June 30, 2018				December 31, 2017
	Carrying Amount		Fair Value		Carrying Amount		Fair Value		Carrying Amount		Fair Value		Carrying Amount		Fair Value
Senior Notes	$	2,809,404	$	2,896,258	$	2,913,217	$	3,056,896	$	1,918,263	$	1,916,271	$	2,810,100	$	2,884,272
Revolving Credit Facilities and term loans		457,858		460,782		598,242		601,131		243,461		245,202		398,130		400,119
Mortgage Indebtedness		750,269		771,052		982,509		1,012,869		1,428,025		1,458,654		641,082		653,185
	$	4,017,531	$	4,128,092	$	4,493,968	$	4,670,896	$	3,589,749	$	3,620,127	$	3,849,312	$	3,937,576

In March 2018, the Company entered into a $1.35 billion interest rate cap, in connection with entering into the RVI mortgage (Note 6). At June 30, 2018, the notional amount of the interest rate cap was $1.27 billion. The fair value of the interest rate cap was $4.8 million at June 30, 2018, and was included in Other Assets. Changes in fair value are marked to market to earnings in Other Income (Expense). For the three and six months ended June 30, 2018, the Company recorded income of $0.4 million and $0.2 million, respectively.

The Company’s objective in using interest rate derivatives is to manage its exposure to interest rate movements. To accomplish this objective, the Company generally uses interest rate instruments as part of its interest rate risk management strategy. The Company is exposed to credit risk in the event of non-performance by the counterparties. The Company believes it mitigates its credit risk by entering into these arrangements with major financial institutions. The Company continually monitors and actively manages interest costs on its variable-rate debt portfolio and may enter into additional interest rate positions or other derivative interest rate instruments based on market conditions. The Company has not entered, and does not plan to enter, into any derivative financial instruments for trading or speculative purposes.

At ~~September~~June 30, ~~2017,~~2018, the Company owned 12 assets in Puerto Rico, aggregating 4.4 million square feet of Company-owned GLA. One of the 12 assets (Plaza Palma Real, consisting of approximately 0.4 million of Company-owned GLA) was severely ~~damaged; it~~damaged and is currently not operational, except for one anchor tenant and ~~is not expected to open for the foreseeable future.~~a few other tenants representing a minimal amount of Company-owned GLA. The other 11 assets ~~incurred~~sustained varying degrees of damage, ~~including some tenant spaces currently untenantable. The damage consisted~~consisting primarily of roof and HVAC system damage and water intrusion. As of October 31, 2017, nine of these assets had partial to full utility power and were available for occupancy by some tenants, although due to the damage, portions of these properties remain unavailable for occupancy. With respect to the Company’s anchor spaces comprising greater than 25,000 square feet of GLA in Puerto Rico, ~~24,~~27, or ~~73%~~82% of such tenants, ~~had utility or generator power and~~ were open as of ~~October 31, 2017,~~July 25, 2018, including ~~six of~~all seven Walmart stores, a Sam's Club, both Home Depot stores, all three Sears/Kmart stores and all five grocery stores (including Pueblo, Econo and Selectos Supermarket). Although some tenant spaces remain untenantable, as of July 25, 2018, 86% of leased GLA was open for business, excluding Plaza Palma Real (or 82% including Plaza Palma Real).

The Company has ~~completed debris removal, roof repairs, interior building mitigation, repairs~~engaged various consultants to ~~building exteriors~~assist with the damage scoping assessment. The Company continues to work with its consultants to finalize the scope and ~~repairs~~schedule of work to ~~mechanical systems to prevent further water intrusion and related damages~~be performed. Restoration work is underway at ~~its Puerto Rico~~all of the shopping centers, ~~and continues to assess~~including Plaza Palma Real. The Company anticipates that repairs will be substantially complete at all 12 properties by the ~~scope~~third quarter of ~~necessary repairs.~~2019. The timing and schedule of additional repair work to be completed are highly dependent upon any changes in the scope of work as well as ~~the ability to turn over space to tenants, is highly dependent on the full restoration of utilities at all of its shopping centers in Puerto Rico, and~~ the availability of building materials, supplies and skilled labor. The Company does not currently know when full utility service will be restored at the shopping centers with partial or no service, or the extent of the services that will be provided in the interim, if any. As such, the Company is unable to estimate when repair work will be completed or when the remaining tenants will reopen for business.

As of ~~September~~June 30, ~~2017,~~2018, the estimated net book value of the property damage written off for damage to the Company’s Puerto Rico assets was ~~$64.8~~$78.8 million. However, the Company ~~is still assessing~~continues to assess the impact of the hurricane on its properties, and the final net

book value write-offs could vary significantly from this estimate. Any changes to this estimate will be recorded in the periods in which they are determined.

The ~~Company recorded a corresponding receivable of $59.7~~Company’s Property Insurance Receivable was $49.2 million ~~for~~at June 30, 2018, which represents estimated insurance recoveries related to the net book value of the property damage written off as well as other expenses, as the Company believes it is probable that the insurance recovery, net of the deductible, will exceed the net book value of the damaged property. The outstanding receivable is recorded ~~within Accounts~~as Property Insurance Receivable on the Company’s consolidated balance ~~sheet~~sheets as of ~~September~~June 30, ~~2017.~~ 2018. The ~~net impact of $5.1~~Company received an additional $20.2 million ~~representing~~toward the property damage portion of its insurance

~~deductible is reflected as a hurricane casualty and impairment loss~~ claim in the ~~Company’s consolidated statements~~second quarter of operations for the three and nine months ended September 30, 2017. Based on current replacement cost estimates, insurance proceeds are expected to equal or exceed the net book value of the impacted assets; therefore, the Company does not expect to record a loss after insurance proceeds, excluding the impact of the deductible. 2018.

The Company’s business interruption insurance covers lost revenue through the period of property restoration and for up to 365 days following completion of restoration. ~~The Company recorded a reduction in~~For the three and six months ended June 30, 2018, rental revenues of ~~$2.6~~$2.8 million ~~for Hurricanes Irma~~ and ~~Maria for the three and nine months ended September 30, 2017, related to~~$6.6 million, respectively, were not recorded because of lost tenant revenue attributable to Hurricane Maria that ~~is expected to be~~has been partially defrayed by insurance proceeds. ~~The Company estimates the waiting period deductible for the business interruption claim to be $0.9 million for the period ended September 30, 2017.~~ The Company will record revenue for covered business interruption in the period it determines that it is probable it will be compensated. This income recognition criteria will likely result in business interruption insurance ~~recoveries~~proceeds being recorded in a period subsequent to the period that the Company experiences lost revenue from the damaged properties. ~~In October 2017,~~For the three and six months ended June 30, 2018, the Company received ~~an advance~~insurance proceeds of approximately $2$3.1 million ~~of insurance proceeds~~and $5.1 million, respectively, related to business interruption ~~insurance claims. This advance has not been reflected in the third-quarter financial statements because it was received after the end of the period.~~

At September 30, 2017, six of the Puerto Rico assets were encumbered by mortgage notes aggregating $264.8 million at a weighted-average interest rate of 4.9%. The Company has contacted the mortgage holders andclaims, which is ~~complying with all lender requirements and mortgage covenants.~~

~~The Company~~ recorded separation charges aggregating $16.6 million for the nine months ended September 30, 2017. The aggregate charge included $9.4 million related to the March 2, 2017, executive management transition, which was the result of the termination without cause of several of the Company’s executives under the terms of their respective employment agreements. The remaining $7.2 million related to the elimination of 65 positions, including nine officer level roles, in April 2017 as part of organization changes to further centralize key operational decision-making. The total nine-month charge included stock-based compensation expense of approximately $4.5 million related to the acceleration of expense associated with the grant date fair value of the unvested stock-based awards. At September 30, 2017, approximately $1.4 million was included in accounts payable and accrued expenses related to the aggregate charges inon the Company’s consolidated ~~balance sheet.~~ statements of operations as Business Interruption Income.

In June 2017, the Company issued $175.0 million aggregate liquidation preference of its newly designated 6.375% Class A cumulative redeemable preferred shares at a price of $500.00 per share (or $25.00 per depositary share) and incurred $6.1 million in issuance costs reflected in paid-in capital.

The changes in accumulated other comprehensive loss by component are as follows (in thousands):

Gains on
Cash Flow
Hedges

Foreign
Currency
Items

Total

Balance, December 31, 2016
$
(3,930
)

$
(262
)

$
(4,192
)
Other comprehensive income before reclassifications

995

1,014

2,009

Change in cash flow hedges reclassed to earnings^(A)

712

—

712

Net current-period other comprehensive income

1,707

1,014

2,721

Balance, September 30, 2017
$
(2,223
)

$
752

$
(1,471
)

	Gains and Losses on Cash Flow Hedges			Foreign Currency Items			Total
Balance, December 31, 2017	$	(2,100	)	$	994		$	(1,106	)
Other comprehensive loss before reclassifications		(1	)		(584	)		(585	)
Change in cash flow hedges reclassed to earnings^(A)		234			—			234
Net current-period other comprehensive income (loss)		233			(584	)		(351	)
Balance, June 30, 2018	$	(1,867	)	$	410		$	(1,457	)

~~In 2017, the~~The Company recorded impairment charges and reserves based on the difference between the carrying value of the assets or investments and the estimated fair market value as follows (in millions):

	Three Months					Nine Months				Three Months					Six Months
	Ended September 30,					Ended September 30,				Ended June 30,					Ended June 30,
	2017			2016		2017		2016		2018			2017		2018		2017
Assets marketed for sale^(A)	$	8.5		$	104.9	$	49.5	$	104.9	$	18.1		$	19.0	$	48.5	$	41.0
Undeveloped land previously held for development^(A)		1.8			—		10.9		—
Total continuing operations	$	10.3		$	104.9	$	60.4	$	104.9
Undeveloped land										—				9.1	—			9.1
(Adjustment) reserve of preferred equity interests^(B)		(15.4	)		—		60.6		—		(1.6	)		—		2.3		76.0
Total impairment charges	$	(5.1	)	$	104.9	$	121.0	$	104.9	$	16.5		$	28.1	$	50.8	$	126.1

The Company is required to assess the fair value of certain impaired consolidated and unconsolidated joint venture investments. The valuation of impaired real estate assets and investments is determined using widely accepted valuation techniques including discounted cash flow analysis on the expected cash flows of each asset, as well as the income capitalization approach considering prevailing market capitalization rates, analysis of recent comparable sales transactions, actual sales negotiations and bona fide

purchase offers received from third parties and/or consideration of the amount that currently would be required to replace the asset, as adjusted for obsolescence. In general, the Company considers multiple valuation techniques when measuring fair value of an investment. However, in certain circumstances, a single valuation technique may be appropriate.

For operational real estate assets, the significant valuation assumptions included the capitalization rate used in the income capitalization valuation as well as the projected property net operating income. For projects under development or not at stabilization, the significant valuation assumptions included the discount rate, the timing and the estimated costs for the construction completion and project stabilization, projected net operating income and the exit capitalization rate. For the valuation of the preferred equity interests, the significant assumptions used in the discounted cash flow analysis included the discount rate, projected net operating income, the timing of the expected redemption and the exit capitalization rates. For investments in unconsolidated joint ventures, the Company also considered the valuation of any underlying joint venture debt. These valuations were calculated based on market conditions and assumptions made by management at the time the valuation adjustments and impairments were recorded, which may differ materially from actual results if market conditions or the underlying assumptions change.

The following table presents information about the Company’s impairment charges on both financial and nonfinancial assets that were measured on a fair value basis for the ~~nine~~six months ended ~~September~~June 30, ~~2017.~~2018. The table also indicates the fair value hierarchy of the valuation techniques used by the Company to determine such fair value (in millions).

	Fair Value Measurements										Fair Value Measurements
	Level 1		Level 2		Level 3		Total		Total Losses		Level 1		Level 2		Level 3		Total		Total Losses
September 30, 2017
June 30, 2018
Long-lived assets held and used	$	—	$	—	$	141.0	$	141.0	$	60.4	$	—	$	—	$	403.4	$	403.4	$	48.5
Preferred equity interests		—		—		327.3		327.3		60.6		—		—		223.2		223.2		2.3

The following table presents quantitative information about the significant unobservable inputs used by the Company to determine the fair value of non-recurring items (in ~~millions, except price per acre (in thousands))~~millions):

Quantitative Information about Level 3 Fair Value Measurements

Fair Value at

Range

Fair Value at

Range

Description

September 30, 2017

Valuation Technique

Unobservable Inputs

2017

June 30, 2018

Valuation Technique

Unobservable Inputs

2018

Impairment of consolidated assets

44.1

Indicative Bid^(A)/

Contracted Price

Indicative Bid^(A)/

Contracted Price

N/A

162.4

Indicative Bid^(A)

N/A

74.7

Income Capitalization Approach/

Sales Comparison Approach

Market Capitalization

Rate

9.75%–10%

241.0

Income Capitalization Approach

Market Capitalization

Rate

7.4% - 9.3%

14.8

Discounted Cash Flow

Discount Rate

Terminal Capitalization Rate

10%

7.4

Sales Comparison Approach

Price per Acre

$50–$218

Reserve of preferred equity interests

327.3

Discounted Cash Flow

Discount Rate

8.2%–8.8%

223.2

Discounted Cash Flow

Discount Rate

8.4% - 8.9%

Terminal Capitalization

Rate

4.6%–11.2%

Terminal Capitalization

Rate

7.9% - 8.4%

NOI Growth Rate

The following table provides a reconciliation of net ~~(loss) income~~loss from continuing operations and the number of common shares used in the computations of “basic” earnings per share (“EPS”), which utilizes the weighted-average number of common shares outstanding without regard to dilutive potential common shares, and “diluted” EPS, which includes all such shares (in thousands, except per share amounts):. Further, all per share amounts and average shares outstanding have been restated to reflect the May 2018 reverse stock split described in Note 1.

	Three Months						Nine Months						Three Months						Six Months
	Ended September 30,						Ended September 30,						Ended June 30,						Ended June 30,
	2017			2016			2017			2016			2018			2017			2018			2017
Numerators – Basic and Diluted
Loss from continuing operations	$	(43,060	)	$	(81,444	)	$	(149,936	)	$	(20,305	)	$	(32,141	)	$	(14,721	)	$	(96,049	)	$	(106,876	)
Plus: Gain on disposition of real estate		44,291			21,368			127,017			47,470			29,508			44,599			39,519			82,726
Plus: Income attributable to non-controlling interests		(248	)		(284	)		(728	)		(894	)		(696	)		(267	)		(952	)		(480	)
Less: Preferred dividends		(8,383	)		(5,594	)		(20,376	)		(16,781	)		(8,383	)		(6,399	)		(16,766	)		(11,993	)
Less: Earnings attributable to unvested shares and operating partnership units		(241	)		(167	)		(743	)		(581	)		(650	)		(251	)		(852	)		(502	)
Net (loss) income attributable to common shareholders after allocation to participating securities	$	(7,641	)	$	(66,121	)	$	(44,766	)	$	8,909		$	(12,362	)	$	22,961		$	(75,100	)	$	(37,125	)
Denominators – Number of Shares
Basic—Average shares outstanding		367,686			365,508			367,039			365,062			184,634			183,493			184,595			183,355
Effect of dilutive securities—Stock options		—			—			—			320
Assumed conversion of diluted securities														—			22			—			—
Diluted—Average shares outstanding		367,686			365,508			367,039			365,382			184,634			183,515			184,595			183,355
(Loss) Earnings Per Share:
Loss Per Share:
Basic	$	(0.02	)	$	(0.18	)	$	(0.12	)	$	0.02		$	(0.07	)	$	0.13		$	(0.41	)	$	(0.20	)
Diluted	$	(0.02	)	$	(0.18	)	$	(0.12	)	$	0.02		$	(0.07	)	$	0.13		$	(0.41	)	$	(0.20	)

Shares subject to issuance under the Company’s 2016 VSEP were not considered in the computation of diluted EPS for the three and nine months ended September 30, 2017 and 2016, as the calculation was anti-dilutive.

The tables below present information about the Company’s reportable operating segments (in thousands):

	Three Months Ended September 30, 2017											Three Months Ended June 30, 2018
	Shopping Centers			Loan Investments		Other			Total			Shopping Centers			Loan Investments		Other			Total
Lease revenue and other property revenue												$	205,001		$	14				$	205,015
Revenue from contracts with customers													6,501		—						6,501
Total revenues	$	227,409		$	15				$	227,424			211,502			14					211,516
Rental operation expenses		(59,571	)		3					(59,568	)		(61,627	)		—					(61,627	)
Net operating income		167,838			18					167,856			149,875			14					149,889
Impairment charges		(10,284	)							(10,284	)		(18,060	)							(18,060	)
Depreciation and amortization		(85,210	)							(85,210	)		(72,462	)							(72,462	)
Interest income					6,807					6,807						5,016					5,016
Other income (expense), net						$	(64,340	)		(64,340	)						$	(36,255	)		(36,255	)
Unallocated expenses^(A)							(71,988	)		(71,988	)							(65,491	)		(65,491	)
Hurricane casualty and impairment loss		(6,089	)							(6,089	)
Hurricane property loss													(224	)							(224	)
Equity in net income of joint ventures		4,811								4,811			3,821								3,821
Adjustment of preferred equity interests					15,377					15,377						1,625					1,625
Loss from continuing operations									$	(43,060	)									$	(32,141	)

	Three Months Ended June 30, 2017
	Shopping Centers			Loan Investments			Other			Total
Lease revenue and other property revenue	$	228,245		$	14					$	228,259
Revenue from contracts with customers		7,928		—							7,928
Total revenues		236,173			14						236,187
Rental operation expenses		(65,880	)		(14	)					(65,894	)
Net operating income		170,293			—						170,293
Impairment charges		(28,096	)								(28,096	)
Depreciation and amortization		(90,276	)								(90,276	)
Interest income					7,166						7,166
Other income (expense), net							$	(954	)		(954	)
Unallocated expenses^(A)								(72,137	)		(72,137	)
Equity in net loss of joint ventures		(717	)								(717	)
Loss from continuing operations										$	(14,721	)

Three Months Ended September 30, 2016

Shopping
Centers

Loan
Investments

Other

Total

Total revenues
$
253,787

$
13

$
253,800

Rental operation expenses

(68,107
)

(62
)

(68,169
)
Net operating income (loss)

185,680

(49
)

185,631

Impairment charges

(104,877
)

(104,877
)
Depreciation and amortization

(95,451
)

(95,451
)
Interest income

9,304

9,304

Other income (expense), net

$
(384
)

(384
)
Unallocated expenses^(A)

(73,123
)

(73,123
)
Equity in net loss of joint ventures

(1,457
)

(1,457
)
Loss on sale and change in control of interests, net

(1,087
)

(1,087
)
Loss from continuing operations

$
(81,444
)

	Nine Months Ended September 30, 2017												Six Months Ended June 30, 2018
	Shopping Centers			Loan Investments			Other			Total			Shopping Centers			Loan Investments			Other			Total
Lease revenue and other property revenue													$	412,511		$	29					$	412,540
Revenue from contracts with customers														14,044		—							14,044
Total revenues	$	703,989		$	43					$	704,032			426,555			29						426,584
Rental operation expenses		(192,772	)		(10	)					(192,782	)		(123,407	)		—						(123,407	)
Net operating income		511,217			33						511,250			303,148			29						303,177
Impairment charges		(60,353	)								(60,353	)		(48,504	)								(48,504	)
Depreciation and amortization		(266,370	)								(266,370	)		(146,886	)								(146,886	)
Interest income					22,365						22,365						10,357						10,357
Other income (expense), net							$	(65,298	)		(65,298	)							$	(97,862	)		(97,862	)
Unallocated expenses^(A)								(227,247	)		(227,247	)								(125,628	)		(125,628	)
Hurricane casualty and impairment loss		(6,089	)								(6,089	)
Hurricane property loss														(974	)								(974	)
Equity in net income of joint ventures		2,429									2,429			12,607									12,607
Reserve of preferred equity interests					(60,623	)					(60,623	)
Reserve of preferred equity interest, net																	(2,336	)					(2,336	)
Loss from continuing operations										$	(149,936	)										$	(96,049	)
As of September 30, 2017:
As of June 30, 2018:
Total gross real estate assets	$	8,697,077								$	8,697,077		$	7,891,867								$	7,891,867
Notes receivable, net^(B)				$	346,888		$	(327,297	)	$	19,591					$	247,747		$	(228,077	)	$	19,670

	Nine Months Ended September 30, 2016												Six Months Ended June 30, 2017
	Shopping Centers			Loan Investments			Other			Total			Shopping Centers			Loan Investments			Other			Total
Lease revenue and other property revenue													$	460,028		$	28					$	460,056
Revenue from contracts with customers														16,552		—							16,552
Total revenues	$	765,514		$	30					$	765,544			476,580			28						476,608
Rental operation expenses		(212,857	)		(218	)					(213,075	)		(133,201	)		(13	)					(133,214	)
Net operating income (loss)		552,657			(188	)					552,469
Net operating income														343,379			15						343,394
Impairment charges		(104,877	)								(104,877	)		(50,069	)								(50,069	)
Depreciation and amortization		(290,051	)								(290,051	)		(181,160	)								(181,160	)
Interest income					27,800						27,800						15,558						15,558
Other income (expense), net							$	3,470			3,470								$	(958	)		(958	)
Unallocated expenses^(A)								(222,110	)		(222,110	)								(155,259	)		(155,259	)
Equity in net income of joint ventures		14,081									14,081
Loss on sale and change in control of interests, net		(1,087	)								(1,087	)
Equity in net loss of joint ventures														(2,382	)								(2,382	)
Reserve of preferred equity interests																	(76,000	)					(76,000	)
Loss from continuing operations										$	(20,305	)										$	(106,876	)
As of September 30, 2016:
As of June 30, 2017:
Total gross real estate assets	$	9,911,432								$	9,911,432		$	8,972,219								$	8,972,219
Notes receivable, net^(B)				$	447,070		$	(402,247	)	$	44,823					$	337,761		$	(318,171	)	$	19,590

On July 1, 2018, the Company completed the spin-off of RVI. At the time of the spin-off, RVI owned 48 shopping centers, comprised of 36 continental U.S. assets and all 12 of DDR’s shopping centers in Puerto Rico, representing $2.7 billion of gross book asset value and $1.27 billion of mortgage debt.

In connection with the spin-off, on July 1, 2018, the Company and RVI entered into a separation and distribution agreement, pursuant to which, among other things, the Company agreed to transfer the properties and certain related assets, liabilities and obligations to RVI and to distribute 100% of the outstanding common shares of RVI to holders of record of DDR’s common shares as of the close of business on June 26, 2018, the record date. On the spin-off date, holders of DDR’s common shares received one common share of RVI for every ten shares of DDR common stock held on the record date. In connection with the spin-off, the Company retained 1,000 shares of RVI’s series A preferred stock having an aggregate preference equal to $190 million, which amount may increase by up to an additional $10 million depending on the amount of aggregate gross proceeds generated by RVI asset sales.

On July 1, 2018, the Company and RVI also entered into an external management agreement, which, together with various property management agreements, governs the fees, terms and conditions pursuant to which DDR will manage RVI and its properties. Pursuant to these management agreements, the Company will provide RVI with day-to-day management, subject to supervision and certain discretionary limits and authorities granted by the RVI Board, and RVI is not expected to have any employees. In general, either the Company or RVI may terminate the management agreements on December 31, 2019 or at the end of any six-month renewal period thereafter. The Company and RVI also entered into a tax matters agreement, which governs the rights and responsibilities of the parties following the spin-off with respect to various tax matters and provides for the allocation of tax-related assets, liabilities and obligations.

On July 2, 2018, the Company permanently reduced the availability under the PNC Facility (Note 5) from $50 million to $20 million. In addition, on July 2, 2018, DDR provided an unconditional guaranty to PNC Bank, National Association (“PNC”) with respect to any obligations of RVI outstanding from time to time under a $30 million revolving credit agreement entered into by RVI with PNC. RVI has agreed to reimburse DDR for any amounts paid to PNC pursuant to the guaranty plus interest at a contracted rate.

Management’s Discussion and Analysis of Financial Condition and Results of Operations (“MD&A”) provides readers with a perspective from management on the Company’s financial condition, results of operations, liquidity and other factors that may affect the Company’s future results. The Company believes it is important to read the MD&A in conjunction with its Annual Report on Form 10-K for the year ended December 31, ~~2016,~~2017, as well as other publicly available information.

The Company is a self-administered and self-managed ~~Real Estate Investment Trust~~real estate investment trust (“REIT”) in the business of acquiring, owning, developing, redeveloping, expanding, leasing, financing and managing shopping centers. As of ~~September~~June 30, ~~2017,~~2018, the Company’s portfolio consisted of ~~286~~241 shopping centers (including ~~143~~115 shopping centers owned through joint ventures) ~~aggregating~~. These properties consisted of 229 shopping centers owned in the continental United States and 12 in Puerto Rico. At June 30, 2018, the Company owned and managed approximately 9784.1 million total square feet of gross leasable area (“GLA”) through all its properties (wholly-owned and joint venture). ~~These properties consist of 274 shopping centers owned in the United States and 12 in Puerto Rico.~~ At ~~September~~June 30, ~~2017,~~2018, the aggregate occupancy of the Company’s operating shopping ~~center portfolio~~center-portfolio was ~~91.5%~~90.8%, and the average annualized base rent per occupied square foot was ~~$15.53.~~

For the nine months ended September 30, 2017, net income attributable to common shareholders decreased compared to the prior year, primarily due to a $60.6 million valuation allowance recorded on the Company’s preferred investments in two joint ventures, a $66.4 million loss on debt retirement, a $16.6 million aggregate charge associated with the executive management transition and staff restructuring and a $6.1 million hurricane casualty and impairment loss, which were partially offset by an increase in gain on sale of real estate assets and lower impairment charges.$15.93.

The following provides an overview of the Company’s key financial metrics (see Non-GAAP Financial Measures described later in this section) (in thousands, except per share amounts):

	Three Months						Nine Months					Three Months					Six Months
	Ended September 30,						Ended September 30,					Ended June 30,					Ended June 30,
	2017			2016			2017			2016		2018			2017		2018			2017
Net (loss) income attributable to common shareholders	$	(7,400	)	$	(65,954	)	$	(44,023	)	$	9,490	$	(11,712	)	$	23,212	$	(74,248	)	$	(36,623	)
FFO attributable to common shareholders	$	46,340		$	120,137		$	161,677		$	355,000	$	51,572		$	93,125	$	81,089		$	115,337
Operating FFO attributable to common shareholders	$	111,236		$	120,636		$	328,538		$	357,306	$	90,492		$	108,770	$	188,242		$	217,303
(Loss) earnings per share – Diluted	$	(0.02	)	$	(0.18	)	$	(0.12	)	$	0.02
(Loss) income per share – Diluted												$	(0.07	)	$	0.13	$	(0.41	)	$	(0.20	)

~~In March 2017,~~For the six months ended June 30, 2018, net loss attributable to common shareholders increased compared to the prior year, primarily due to debt extinguishment charges and spin-off transaction costs and lower gain on sale of assets recorded in 2018, partially offset by a higher reserve on preferred equity investments in 2017.

On July 1, 2018, the Company ~~named~~completed the spin-off of Retail Value Inc. (“RVI”), which is composed of a ~~new executive team, including David Lukes as president~~portfolio of 48 assets that includes 36 continental U.S. assets and ~~chief executive officer, Michael Makinen as chief operating officer and Matthew Ostrower as chief financial officer. The management team, led by~~ ~~Mr. Lukes, completed several key strategic objectives in 2017, which included the streamlining~~all 12 of the Company’s ~~organizational structure, executing several balance sheet improvements,~~Puerto Rico assets. By owning, operating and ~~completing~~redeveloping only continental U.S. assets with higher risk-adjusted growth profiles, DDR is expected to provide a ~~portfolio review process.~~more compelling and competitive investment opportunity to public real estate investors. The RVI assets had a combined gross book value of approximately $2.7 billion and mortgage debt of $1.27 billion as of June 30, 2018. DDR retained a preferred stock investment in RVI of $190 million and is expected to continue to manage the RVI assets pursuant to management agreements.

On May 18, 2018, in anticipation of the spin-off transaction, the Company ~~made several organizational changes~~effected a reverse stock split of its outstanding common shares at a ratio of one-for-two.

In February 2018, in connection with the spin-off transaction, the Company completed $1.35 billion of mortgage financing and repaid $452.5 million of mortgage debt, $900 million aggregate principal amount of senior unsecured debt and $200 million of an ~~effort to centralize decision-making~~unsecured term loan using proceeds from the new financing, along with asset sale proceeds.

After the completion of the spin-off, growth opportunities within the Company’s core property operations include rental increases and ~~lower operating costs, which resulted~~continued lease-up of the portfolio. Additional growth opportunities include a renewed focus on redevelopment of strong assets remaining in the ~~elimination~~DDR portfolio and opportunistic investments. Other opportunities include expansion and reformatting to accommodate high-credit-quality tenants and downsizing or reconfiguring junior anchors to enhance the merchandising mix of ~~65 positions, including nine officer roles, and are expected to generate an annualized stabilized reduction to general and administrative expenses~~shopping centers, both of ~~approximately $6 million. As outlined below,~~which the Company ~~also took several steps~~believes will generate higher blended rental rates and operating cash flows. In addition to strengthen its balance sheet, extend its debt maturity profile and reduce its overall risk profile. Furthermore, the Company made progress toward, and remains committed to lowering leverage and improving overall liquidity. One of the keys to achieving this objective is to recycle asset disposition proceeds toward its deleveraging ~~effort. The Company completed a portfolio review process~~efforts, management intends to ~~not only identify asset disposition targets but also support its capital allocation strategy. Looking forward,~~use proceeds from the ~~Company seeks~~sale of lower growth assets to ~~create shareholder value through disciplined capital allocation~~fund redevelopment and ~~best-in-class operations that it believes should~~ ~~translate into net asset value growth over time.~~ opportunistic investing.

The following is a summary of the Company’s ~~significant~~operational and transactional ~~and operational~~ activity ~~execution~~executed in the first ~~nine months~~half of ~~2017:~~

~~Third Quarter 2017 - Hurricane Casualty Loss~~

~~In September 2017, Hurricane Irma made landfall~~The aggregate occupancy of New DDR was 91.3% and the total portfolio average annualized base rent per square foot was $16.14 at June 30, 2018. For leases executed in ~~both Puerto Rico~~the first half of 2018, New DDR generated positive leasing spreads on a pro rata basis of 23.2% for new leases and ~~Florida, and Hurricane Maria made landfall in Puerto Rico. The Company’s Florida assets were minimally impacted by Hurricane Irma. However,~~5.9% for renewals. “New DDR” represents the Company’s 12 shopping centers in Puerto Rico and 36 employees based on the island were significantly impacted by Hurricane Maria. Management’s first priority has been to account for and provide necessary resources to our Puerto Rico-based team. Second, the Company has been working diligently to make all properties physically safe and protected from further water intrusion. Third, the Company has worked to remove debris and provide generator power where possible so that tenants can open as soon as possible. Finally, the Company has been working with its insurance company to assess damage, arrange for advances on business interruption insurance, and begin to make permanent repairs to assets wherever possible. One of the Company’s 12 shopping centers was severely damaged; except for one tenant, it is currently not operational and is not expected to open for the foreseeable future. The other 11 assets incurred varying degrees of damage, including some tenant spaces currently untenantable. As of November 1, 2017, nineresults of the assets ~~had partial to full utility power and were available for occupancy by some tenants, although, due to~~that remain in DDR after the ~~damage, portions~~completion of ~~these properties remain unavailable for occupancy. The Company estimates its aggregate casualty insurance claim to be in~~ the ~~range~~spin-off of ~~$125 – $150 million, which includes the costs to clean up, repair and rebuild as well as lost revenue estimated through December 31, 2017. The Company maintains insurance~~RVI on its assets in Puerto Rico with policy limits of approximately $330 million for both property damage and business interruption. See further discussion in both “Contractual Obligations and Other Commitments” and Note 9, “Commitments and Contingencies,” to the Company’s consolidated financial statements included herein.July 1, 2018.

RESULTS OF OPERATIONS

Shopping center properties owned as of January 1, ~~2016,~~2017, but excluding properties under development or redevelopment and those sold by the Company, are referred to herein as the “Comparable Portfolio Properties.”

Revenues from Operations (in thousands)

	Three Months							Three Months
	Ended September 30,							Ended June 30,
	2017		2016		$ Change			2018		2017		$ Change
Base and percentage rental revenues	$	154,941	$	179,037	$	(24,096	)	$	143,131	$	166,446	$	(23,315	)
Recoveries from tenants		51,368		59,743		(8,375	)		50,558		55,633		(5,075	)
Fee and other income		21,115		15,020		6,095			14,727		14,108		619
Business interruption income									3,100		—		3,100
Total revenues	$	227,424	$	253,800	$	(26,376	)	$	211,516	$	236,187	$	(24,671	)

	Nine Months							Six Months
	Ended September 30,							Ended June 30,
	2017		2016		$ Change			2018		2017		$ Change
Base and percentage rental revenues^(A)	$	490,315	$	538,058	$	(47,743	)	$	291,826	$	335,374	$	(43,548	)
Recoveries from tenants^(B)		164,477		182,718		(18,241	)		101,912		113,109		(11,197	)
Fee and other income^(C)		49,240		44,768		4,472			27,746		28,125		(379	)
Total revenues	$	704,032	$	765,544	$	(61,512	)
Business interruption income^(D)									5,100		—		5,100
Total revenues^(E)								$	426,584	$	476,608	$	(50,024	)

	Increase (Decrease)			Increase (Decrease)
Comparable Portfolio Properties⁽¹⁾	$	5.6		$	(10.3	)
Acquisition of shopping centers		8.1			0.1
Development or redevelopment properties		0.7			(2.4	)
Disposition of shopping centers		(58.1	)		(30.1	)
Straight-line rents		(4.0	)		(0.8	)
Total	$	(47.7	)	$	(43.5	)

The following tables present the statistics for the Company’s portfolio affecting base and percentage rental revenues summarized by the following portfolios: combined shopping center portfolio, wholly-owned shopping center portfolio and joint venture shopping center portfolio.

	Combined Shopping Center Portfolio September 30,						Wholly-Owned Shopping Centers September 30,						Joint Venture Shopping Centers September 30,						Combined Shopping Center Portfolio June 30,						Wholly-Owned Shopping Centers June 30,						Joint Venture Shopping Centers June 30,
	2017			2016			2017			2016			2017			2016			2018			2017			2018			2017			2018			2017
Centers owned		286			343			143			187			143			156			241			298			126			148			115			150
Aggregate occupancy rate		91.5	%		93.0	%		91.1	%		92.8	%		92.1	%		93.4	%		90.8	%		91.5	%		90.5	%		91.3	%		91.4	%		92.0	%
Average annualized base rent per occupied square foot⁽²⁾	$	15.53		$	14.72		$	16.30		$	15.08		$	14.42		$	14.10		$	15.93		$	15.46		$	16.76		$	16.24		$	14.63		$	14.34

	Three Months							Three Months
	Ended September 30,							Ended June 30,
	2017		2016		$ Change			2018		2017		$ Change
Operating and maintenance	$	28,950	$	32,012	$	(3,062	)	$	31,149	$	32,150	$	(1,001	)
Real estate taxes		30,618		36,157		(5,539	)		30,478		33,744		(3,266	)
Impairment charges		10,284		104,877		(94,593	)		18,060		28,096		(10,036	)
Hurricane casualty and impairment loss		6,089		—		6,089
Hurricane property loss									224		—		224
General and administrative		16,425		18,785		(2,360	)		20,187		22,756		(2,569	)
Depreciation and amortization		85,210		95,451		(10,241	)		72,462		90,276		(17,814	)
	$	177,576	$	287,282	$	(109,706	)	$	172,560	$	207,022	$	(34,462	)


	Nine Months							Six Months
	Ended September 30,							Ended June 30,
	2017		2016		$ Change			2018		2017		$ Change
Operating and maintenance^(A)	$	94,091	$	104,600	$	(10,509	)	$	60,906	$	65,141	$	(4,235	)
Real estate taxes^(A)		98,691		108,475		(9,784	)		62,501		68,073		(5,572	)
Impairment charges^(B)		60,353		104,877		(44,524	)		48,504		50,069		(1,565	)
Hurricane casualty and impairment loss^(C)		6,089		—		6,089
Hurricane property loss^(C)									974		—		974
General and administrative^(D)		70,253		55,160		15,093			36,302		53,828		(17,526	)
Depreciation and amortization^(A)		266,370		290,051		(23,681	)		146,886		181,160		(34,274	)
	$	595,847	$	663,163	$	(67,316	)	$	356,073	$	418,271	$	(62,198	)

	Operating and Maintenance			Real Estate Taxes			Depreciation and Amortization			Operating and Maintenance			Real Estate Taxes			Depreciation and Amortization
Comparable Portfolio Properties	$	0.3		$	0.5		$	(8.6	)	$	0.1		$	(0.1	)	$	(13.5	)
Acquisition of shopping centers		1.5			1.8			6.0		—				0.3		—
Development or redevelopment properties		(0.2	)		0.1			0.3			0.3			(0.4	)		(2.3	)
Disposition of shopping centers		(12.1	)		(12.3	)		(21.4	)		(4.6	)		(5.4	)		(18.5	)
	$	(10.5	)	$	(9.8	)	$	(23.7	)	$	(4.2	)	$	(5.6	)	$	(34.3	)

Depreciation expense for Comparable Portfolio Properties was lower in ~~2017,~~2018, primarily as a result of ~~accelerated depreciation~~assets that were fully amortized in 2017 and the impact of impairment charges in ~~2016 related to changes in the useful lives of certain assets.~~ previous periods.

The Company continues to expense certain internal leasing salaries, legal salaries and related expenses associated with leasing and re-leasing of existing space. However, the Company expects that upon adoption of the leasing standard in 2019, certain general and administrative expenses that are currently capitalized may be required to be expensed.

	Three Months									Three Months
	Ended September 30,									Ended June 30,
	2017			2016			$ Change			2018			2017			$ Change
Interest income	$	6,807		$	9,304		$	(2,497	)	$	5,016		$	7,166		$	(2,150	)
Interest expense		(46,296	)		(53,940	)		7,644			(44,913	)		(48,908	)		3,995
Other income (expense), net		(64,340	)		(384	)		(63,956	)		(36,255	)		(954	)		(35,301	)
	$	(103,829	)	$	(45,020	)	$	(58,809	)	$	(76,152	)	$	(42,696	)	$	(33,456	)

	Nine Months									Six Months
	Ended September 30,									Ended June 30,
	2017			2016			$ Change			2018			2017			$ Change
Interest income^(A)	$	22,365		$	27,800		$	(5,435	)	$	10,357		$	15,558		$	(5,201	)
Interest expense^(B)		(147,031	)		(165,849	)		18,818			(88,953	)		(100,735	)		11,782
Other income (expense), net^(C)		(65,298	)		3,470			(68,768	)		(97,862	)		(958	)		(96,904	)
	$	(189,964	)	$	(134,579	)	$	(55,385	)	$	(176,458	)	$	(86,135	)	$	(90,323	)

The weighted-average loan receivable outstanding and weighted-average interest rate, including loans to affiliates, are as follows:

	Nine Months						Six Months
	Ended September 30,						Ended June 30,
	2017			2016			2018			2017
Weighted-average loan receivable outstanding (in millions)	$	418.5		$	438.6		$	316.4		$	374.6
Weighted-average interest rate		7.2	%		8.5	%		6.7	%		8.5	%

	Nine Months						Six Months
	Ended September 30,						Ended June 30,
	2017			2016			2018			2017
Weighted-average debt outstanding (in billions)	$	4.4		$	5.0		$	3.7		$	4.6
Weighted-average interest rate		4.4	%		4.4	%		4.6	%		4.4	%

The reduction in the weighted average debt outstanding from the comparable prior-year period is a result of the Company’s overall strategy to reduce leverage. The weighted-average interest rate (based on contractual rates and excluding fair market value of adjustments and debt issuance costs) was ~~4.0%~~4.6% and 4.3% ~~for the comparable periods.~~at June 30, 2018 and June 30, 2017, respectively.

Interest costs capitalized in conjunction with development and redevelopment projects and unconsolidated development and redevelopment joint venture interests were ~~$0.5~~$0.3 million and ~~$1.4~~$0.7 million for the three and ~~nine~~six months ended ~~September~~June 30, ~~2017,~~2018, respectively, compared to ~~$0.7~~$0.5 million and ~~$2.6~~$0.9 million, respectively, for the comparable periods in ~~2016. The decrease in the amount of interest costs capitalized is a result of a change in the mix of active development projects year over year.~~2017.

Debt extinguishment costs are primarily a result of make-whole amounts, the write-off of unamortized deferred financing costs and other costs incurred from the redemption of senior unsecured notes and other mortgage debt repaid in connection with the Company entering into the $1.35 billion mortgage financing agreement. In addition, the Company recorded $36.5 million of costs related to the RVI spin-off transaction.

	Three Months									Three Months
	Ended September 30,									Ended June 30,
	2017			2016			$ Change			2018			2017			$ Change
Equity in net income (loss) of joint ventures	$	4,811		$	(1,457	)	$	6,268		$	3,821		$	(717	)	$	4,538
Adjustment of preferred equity interests		15,377			—			15,377
Loss on sale and change in control of interests, net		—			(1,087	)		1,087
Adjustment to preferred equity interests											1,625			—			1,625
Tax expense of taxable REIT subsidiaries and state franchise and income taxes		(9,267	)		(398	)		(8,869	)		(391	)		(473	)		82

	Nine Months									Six Months
	Ended September 30,									Ended June 30,
	2017			2016			$ Change			2018			2017			$ Change
Equity in net income of joint ventures^(A)	$	2,429		$	14,081		$	(11,652	)
Equity in net income (loss) of joint ventures^(A)										$	12,607		$	(2,382	)	$	14,989
Reserve of preferred equity interests^(B)		(60,623	)		—			(60,623	)		(2,336	)		(76,000	)		73,664
Loss on sale and change in control of interests, net		—			(1,087	)		1,087
Tax expense of taxable REIT subsidiaries and state franchise and income taxes		(9,963	)		(1,101	)		(8,862	)		(373	)		(696	)		323

Disposition of Real Estate, Non-Controlling Interests and Net ~~(Loss) Income~~Loss (in thousands)

	Three Months									Three Months
	Ended September 30,									Ended June 30,
	2017			2016			$ Change			2018			2017			$ Change
Gain on disposition of real estate, net	$	44,291		$	21,368		$	22,923		$	29,508		$	44,599		$	(15,091	)
Income attributable to non-controlling interests, net		(248	)		(284	)		36			(696	)		(267	)		(429	)
Net income (loss) attributable to DDR		983			(60,360	)		61,343
Net (loss) income attributable to DDR											(3,329	)		29,611			(32,940	)

	Nine Months									Six Months
	Ended September 30,									Ended June 30,
	2017			2016			$ Change			2018			2017			$ Change
Gain on disposition of real estate, net^(A)	$	127,017		$	47,470		$	79,547		$	39,519		$	82,726		$	(43,207	)
Income attributable to non-controlling interests, net		(728	)		(894	)		166			(952	)		(480	)		(472	)
Net (loss) income attributable to DDR^(B)		(23,647	)		26,271			(49,918	)
Net loss attributable to DDR^(B)											(57,482	)		(24,630	)		(32,852	)

The Company believes that Funds from Operations (“FFO”) and Operating FFO, both non-GAAP financial measures, provide additional and useful means to assess the financial performance of REITs. FFO and Operating FFO are frequently used by the real estate industry, as well as securities analysts, investors and other interested parties, to evaluate the performance of REITs.

FFO excludes GAAP historical cost depreciation and amortization of real estate and real estate investments, which assume that the value of real estate assets diminishes ratably over time. Historically, however, real estate values have risen or fallen with market conditions, and many companies use different depreciable lives and methods. Because FFO excludes depreciation and amortization unique to real estate and gains and losses from depreciable property dispositions, it can provide a performance measure that, when compared year over year, reflects the impact on operations from trends in occupancy rates, rental rates, operating costs, interest costs and acquisition, disposition and development activities. This provides a perspective of the Company’s financial performance not immediately apparent from net income determined in accordance with GAAP.

FFO is generally defined and calculated by the Company as net income (loss) (computed in accordance with GAAP), adjusted to exclude (i) preferred share dividends, (ii) gains and losses from disposition of depreciable real estate property and related investments, which are presented net of taxes, (iii) impairment charges on depreciable real estate property and related investments and (iv) certain non-cash items. These non-cash items principally include real property depreciation and amortization of intangibles, equity income (loss) from joint ventures and equity income (loss) from non-controlling interests and adding the Company’s proportionate share of FFO from its unconsolidated joint ventures and non-controlling interests, determined on a consistent basis. The Company’s calculation of FFO is consistent with the definition of FFO provided by the National Association of Real Estate Investment Trusts (“NAREIT”).

The Company believes that certain gains and charges recorded in its operating results are not comparable or reflective of its core operating performance. As a result, the Company also computes Operating FFO and discusses it with the users of its financial statements, in addition to other measures such as net income (loss) determined in accordance with GAAP and FFO. Operating FFO is generally defined and calculated by the Company as FFO excluding certain charges and gains that management believes are not comparable and indicative of the results of the Company’s operating real estate portfolio. Such adjustments include gains on the sale of and/or change in control of interests, gains/losses on the sale of non-depreciable real estate, impairments of non-depreciable real

estate, gains/losses on the early extinguishment of debt, transaction costs, hurricane property loss and other restructuring type costs. The disclosure of these charges and gains is regularly requested by users of the Company’s financial statements. The adjustment for these charges and gains may not be comparable to how other REITs or real estate companies calculate their results of operations, and the Company’s calculation of Operating FFO differs from NAREIT’s definition of FFO. Additionally, the Company provides no assurances that these charges and gains are non-recurring. These charges and gains could be reasonably expected to recur in future results of operations.

These measures of performance are used by the Company for several business purposes and by other REITs. The Company uses FFO and/or Operating FFO in part (i) as a disclosure to improve the understanding of the Company’s operating results among the investing public, (ii) as a measure of a real estate asset’s performance, (iii) to influence acquisition, disposition and capital investment strategies and (iv) to compare the Company’s performance to that of other publicly traded shopping center REITs.

For the reasons described above, management believes that FFO and Operating FFO provide the Company and investors with an important indicator of the Company’s operating performance. They provide recognized measures of performance other than GAAP net income, which may include non-cash items (often significant). Other real estate companies may calculate FFO and Operating FFO in a different manner.

Management recognizes the limitations of FFO and Operating FFO when compared to GAAP’s net income. FFO and Operating FFO do not represent amounts available for dividends, capital replacement or expansion, debt service obligations or other commitments and uncertainties. Management does not use FFO or Operating FFO as an indicator of the Company’s cash obligations and funding requirements for future commitments, acquisitions or development activities. Neither FFO nor Operating FFO represents cash generated from operating activities in accordance with GAAP, and neither is necessarily indicative of cash available to fund cash needs. Neither FFO nor Operating FFO should be considered an alternative to net income (computed in accordance with GAAP) or as an alternative to cash flow as a measure of liquidity. FFO and Operating FFO are simply used as additional indicators of the Company’s operating performance. The Company believes that to further understand its performance, FFO and Operating FFO should be compared with the Company’s reported net income (loss) and considered in addition to cash flows determined in accordance with GAAP, as presented in its consolidated financial statements. Reconciliations of these measures to their most directly comparable GAAP measure of net income (loss) have been provided below.

FFO and Operating FFO attributable to common shareholders were as follows (in thousands):

	Three Months							Three Months
	Ended September 30,							Ended June 30,
	2017		2016		$ Change			2018		2017		$ Change
FFO attributable to common shareholders	$	46,340	$	120,137	$	(73,797	)	$	51,572	$	93,125	$	(41,553	)
Operating FFO attributable to common shareholders		111,236		120,636		(9,400	)		90,492		108,770		(18,278	)

	Nine Months							Six Months
	Ended September 30,							Ended June 30,
	2017		2016		$ Change			2018		2017		$ Change
FFO attributable to common shareholders^(A)	$	161,677	$	355,000	$	(193,323	)	$	81,089	$	115,337	$	(34,248	)
Operating FFO attributable to common shareholders^(B)		328,538		357,306		(28,768	)		188,242		217,303		(29,061	)

The Company’s reconciliation of net ~~(loss) income~~loss attributable to common shareholders computed in accordance with GAAP to FFO attributable to common shareholders and Operating FFO attributable to common shareholders is as follows (in thousands). The Company provides no assurances that these charges and gains are non-recurring. These charges and gains could reasonably be expected to recur in future results of operations.

	Three Months						Nine Months						Three Months						Six Months
	Ended September 30,						Ended September 30,						Ended June 30,						Ended June 30,
	2017			2016			2017			2016			2018			2017			2018			2017
Net (loss) income attributable to common shareholders	$	(7,400	)	$	(65,954	)	$	(44,023	)	$	9,490		$	(11,712	)	$	23,212		$	(74,248	)	$	(36,623	)
Depreciation and amortization of real estate investments		81,064			93,334			258,137			283,814			70,895			88,423			143,755			177,073
Equity in net (income) loss of joint ventures		(4,811	)		1,457			(2,429	)		(14,081	)		(3,821	)		717			(12,607	)		2,382
Joint ventures' FFO^(A)		8,268			6,581			21,062			19,157			6,641			6,212			13,811			12,794
Non-controlling interests (OP Units)		76			76			227			227			506			76			559			152
Impairment of depreciable real estate assets		13,620			104,877			54,603			104,877			18,060			19,010			48,504			40,982
Gain on disposition of depreciable real estate		(44,477	)		(20,234	)		(125,900	)		(48,484	)		(28,997	)		(44,525	)		(38,685	)		(81,423	)
FFO attributable to common shareholders		46,340			120,137			161,677			355,000			51,572			93,125			81,089			115,337
(Adjustment) reserve of preferred equity interests		(15,377	)		—			60,623			—			(1,625	)		—			2,336			76,000
Hurricane casualty^(B)		3,616			—			3,616			—
Hurricane property loss^(B)														(89	)		—			2,445			—
Impairment charges – non-depreciable assets		1,764			—			10,850			—			—			9,086			—			9,086
Separation charges		—			—			16,552			—			4,641			5,081			4,641			16,552
Debt extinguishment and other, net		65,835			540			66,782			179
Other (income) expense, net^(C)														36,255			948			97,862			947
Joint ventures – debt extinguishment and other		95			6			778			26			249			604			703			684
Valuation allowance of Puerto Rico prepaid tax asset		8,777			—			8,777			—
Loss (gain) on disposition of non-depreciable real estate, net		186			(47	)		(1,117	)		2,101
Gain on disposition of non-depreciable real estate, net														(511	)		(74	)		(834	)		(1,303	)
Non-operating items, net		64,896			499			166,861			2,306			38,920			15,645			107,153			101,966
Operating FFO attributable to common shareholders	$	111,236		$	120,636		$	328,538		$	357,306		$	90,492		$	108,770		$	188,242		$	217,303

FFO at DDR ownership interests considers the impact of basis differentials. Joint ventures’ FFO and Operating FFO are summarized as follows (in ~~thousands):~~

	Three Months						Nine Months						Three Months						Six Months
	Ended September 30,						Ended September 30,						Ended June 30,						Ended June 30,
	2017			2016			2017			2016			2018			2017			2018			2017
Net income (loss) attributable to unconsolidated joint ventures	$	36,080		$	(16,600	)	$	(49,999	)	$	25,772		$	12,623		$	(33,702	)	$	36,028		$	(86,079	)
Depreciation and amortization of real estate investments		45,291			47,955			137,976			146,011			37,299			47,589			76,976			92,685
Impairment of depreciable real estate assets		2,160			13,598			82,667			13,598			—			27,850			16,910			80,507
Gain on disposition of depreciable real estate, net		(31,740	)		(658	)		(30,764	)		(54,255	)
(Gain) loss on disposition of depreciable real estate, net														(12,356	)		803			(50,376	)		976
FFO	$	51,791		$	44,295		$	139,880		$	131,126		$	37,566		$	42,540		$	79,538		$	88,089
FFO at DDR's ownership interests	$	8,268		$	6,581		$	21,062		$	19,157		$	6,641		$	6,212		$	13,811		$	12,794
Operating FFO at DDR's ownership interests	$	8,363		$	6,587		$	21,840		$	19,183		$	6,890		$	6,816		$	14,515		$	13,478

	Three and Nine Months		Three Months			Six Months
	Ended September 30,		Ended June 30,			Ended June 30,
	2017		2018			2018
Lost tenant revenue	$	2,571	$	2,787		$	6,570
Business interruption income				(3,100	)		(5,100	)
Clean up costs and other uninsured expenses		1,045		224			975
	$	3,616	$	(89	)	$	2,445

The Company uses Net Operating Income (“NOI”), which is a non-GAAP financial measure, as a supplemental performance measure. NOI is calculated as property revenues less property-related expenses. The Company believes NOI provides useful information to investors regarding the Company’s financial condition and results of operations because it reflects only those income and expense items that are incurred at the property level and, when compared across periods, reflects the impact on operations from trends in occupancy rates, rental rates, operating costs and acquisition and disposition activity on an unleveraged basis.

The Company also presents NOI information on a same store basis, or Same Store Net Operating Income (“SSNOI”). The Company defines SSNOI as property revenues less property-related expenses, which exclude straight-line rental income and expenses, lease termination income, management fee expense, fair market value of leases and expense recovery adjustments. SSNOI also excludes activity associated with development and major redevelopment and includes assets owned in comparable periods (15 months for quarter comparisons). In addition, due to the impact of Hurricane Maria on its properties in Puerto Rico in 2017, as discussed in “Contractual Obligations and Other Commitments,” the Company also excludes its Puerto Rico NOI from SSNOI. SSNOI excludes all non-property and corporate level revenue and expenses. Other real estate companies may calculate NOI and SSNOI in a different manner. The Company believes SSNOI provides investors with additional information regarding the operating performances of comparable assets because it excludes certain non-cash and non-comparable items as noted above. SSNOI is frequently used by the real estate industry, as well as securities analysts, investors and other interested parties, to evaluate the performance of REITs.

The Company believes that SSNOI is not, and is not intended to be, a presentation in accordance with GAAP. SSNOI information has its limitations as it excludes any capital expenditures associated with the re-leasing of tenant space or as needed to operate the assets. SSNOI does not represent amounts available for dividends, capital replacement or expansion, debt service obligations or other commitments and uncertainties. Management does not use SSNOI as an indicator of the Company’s cash obligations and funding requirements for future commitments, acquisitions or development activities. SSNOI does not represent cash generated from operating activities in accordance with GAAP and is not necessarily indicative of cash available to fund cash needs. SSNOI should not be considered as an alternative to net income (computed in accordance with GAAP) or as an alternative to cash flow as a measure of liquidity. A reconciliation of NOI and SSNOI to their most directly comparable GAAP measure of net income (loss) has been provided:

The Company’s reconciliation of net loss computed in accordance with GAAP to NOI and SSNOI for the Company at 100% and at its effective ownership interest of the assets is as follows (in thousands):

	At 100%						At the Company's Interest
	For the Six Months Ended June 30,
	2018			2017			2018			2017
Net loss attributable to DDR	$	(57,482	)	$	(24,630	)	$	(57,482	)	$	(24,630	)
Fee income		(15,306	)		(18,226	)		(15,306	)		(18,226	)
Interest income		(10,357	)		(15,558	)		(10,357	)		(15,558	)
Interest expense		88,953			100,735			88,953			100,735
Depreciation and amortization		146,886			181,160			146,886			181,160
General and administrative		36,302			53,828			36,302			53,828
Other expense, net		97,862			958			97,862			958
Impairment charges		48,504			50,069			48,504			50,069
Hurricane property loss		974			—			974			—
Equity in net (income) loss of joint ventures		(12,607	)		2,382			(12,607	)		2,382
Reserve of preferred equity interests		2,336			76,000			2,336			76,000
Tax expense		373			696			373			696
Gain on disposition of real estate		(39,519	)		(82,726	)		(39,519	)		(82,726	)
Income from non-controlling interests		952			480			952			480
Consolidated NOI	$	287,871		$	325,168		$	287,871		$	325,168
DDR's consolidated joint venture		—			—			(782	)		(806	)
Consolidated NOI, net of non-controlling interests	$	287,871		$	325,168		$	287,089		$	324,362

Net income (loss) from unconsolidated joint ventures	$	36,028		$	(86,079	)	$	11,981		$	(33,702	)
Interest expense		49,189			59,134			7,555			29,004
Depreciation and amortization		76,976			92,685			10,138			47,589
Impairment charges		16,910			80,507			846			27,850
Preferred share expense		12,825			16,367			641			8,239
Other expense, net		14,037			15,627			2,333			9,054
(Gain) loss on disposition of real estate, net		(50,376	)		976			(9,325	)		803
Unconsolidated NOI	$	155,589		$	179,217		$	24,169		$	88,837

Total Consolidated + Unconsolidated NOI	$	443,460		$	504,385		$	311,258		$	413,199
Less: Non-Same Store NOI adjustments and Puerto Rico NOI		(76,767	)		(141,048	)		(66,286	)		(171,425	)
Total SSNOI	$	366,693		$	363,337		$	244,972		$	241,774

SSNOI % Change		0.9	%					1.3	%

The increase in SSNOI for the first half of 2018 as compared to 2017 primarily is due to rental increases, favorable net recoveries, as well as favorable bad debt expense and related tenant settlements.

The Company remains committed to strengthening its balance sheet, improving liquidity and lowering leverage, as well as lowering its overall risk profile. As a result, the Company periodically evaluates opportunities to issue and sell additional debt or equity securities, obtain credit facilities from lenders, or repurchase or refinance long-term debt ~~for strategic reasons or~~as part of this overall strategy to further strengthen ~~the~~its financial position of the Company. In the first nine months of 2017, the Company completed two public debt offerings and an issuance of preferred shares in order to refinance maturing debt and improve duration.position.

The Company’s consolidated and unconsolidated debt obligations generally require monthly or semi-annual payments of principal and/or interest over the term of the obligation. While the Company currently believes it has several viable sources to obtain capital and fund its business, including capacity under its credit facilities described below, no assurance can be provided that these obligations will be refinanced or repaid as currently anticipated.

The Company has historically accessed capital sources through both the public and private markets. Acquisitions, developments and redevelopments are generally financed through cash provided from operating activities, Revolving Credit Facilities (as defined

below), mortgages assumed, secured debt, unsecured debt, common and preferred equity offerings, joint venture capital and asset sales. Total consolidated debt outstanding was ~~$4.0~~$3.6 billion at June 30, 2018, compared to $3.9 billion at December 31, 2017.

On July 1, 2018, the Company completed the spin-off of RVI, which consisted of 48 assets that included 36 continental U.S. assets and 12 Puerto Rico assets. These properties comprised 16.0 million square feet of Company-owned GLA and are located in 17 states and Puerto Rico. The RVI assets had a combined gross book asset value of $2.7 billion and ~~$4.5~~mortgage debt of $1.27 billion as of June 30, 2018. DDR has retained a $190 million preferred stock investment as noted below and expects to continue to manage the RVI assets.

On June 30, 2018, RVI issued 1,000 shares of its series A preferred stock (the “RVI Preferred Shares”) to DDR, which, are noncumulative and have no mandatory dividend rate. The RVI Preferred Shares rank, with respect to dividend rights and rights upon liquidation, dissolution or winding up of RVI, senior in preference and priority to RVI’s common shares and any other class or series of RVI capital stock. Subject to the requirement that RVI distribute to its common shareholders the minimum amount required to be distributed with respect to any taxable year in order for RVI to maintain its status as a REIT and to avoid U.S. federal income taxes, the RVI Preferred Shares will be entitled to a dividend preference for all dividends declared on RVI’s capital stock at ~~September~~any time up to a “preference amount” equal to $190 million in the aggregate, which amount may increase by up to an additional $10 million if the aggregate gross proceeds of RVI asset sales subsequent to July 1, 2018 exceeds $2.0 billion. Notwithstanding the foregoing, the RVI Preferred Shares are only entitled to receive dividends when, as and if declared by the board of directors of RVI, and RVI’s ability to pay dividends is subject to any restrictions set forth in the terms of its indebtedness.

RVI may redeem the RVI Preferred Shares, or any part thereof, at any time at a price payable per share calculated by dividing the number of RVI Preferred Shares outstanding on the redemption date into the difference of (x) $200 million minus (y) the aggregate amount of dividends previously distributed on the RVI Preferred Shares to be redeemed.

In February 2018, RVI entered into a $1.35 billion mortgage loan in connection with the Company’s spin-off plan (“RVI Mortgage Loan”). The RVI Mortgage Loan matures in February 2021 and is subject to two one-year extension options, at the RVI’s option, provided certain conditions are met. At June 30, ~~2017~~2018, the RVI Mortgage Loan was secured by (i) 36 properties owned by RVI in the continental U.S., (ii) a pledge of the equity of RVI’s subsidiaries that own 12 properties in Puerto Rico and ~~December~~a pledge of rents and other cash flows, insurance proceeds and condemnation awards in connection with the 12 Puerto Rico properties and (iii) a pledge of any reserves and accounts of any Borrowers. The RVI Mortgage Loan bears interest at an annual rate of one-month LIBOR plus 315 basis points, provided that such spread is subject to defined increases during each extension period. In connection with this financing, the RVI entered into an interest rate cap agreement for a notional amount of $1.35 billion having a LIBOR strike rate of 3.0%. The RVI Mortgage Loan is structured as an interest only loan subject to certain amortization requirements in the event RVI’s continental U.S. properties fail to meet certain debt yield thresholds on or after March 31, ~~2016, respectively.~~2019. This mortgage was assumed by RVI in connection with the spin-off.

Proceeds from the RVI Mortgage Loan and asset sales in 2018 were used by the Company to repay $452.5 million of outstanding mortgage debt, $900.0 million aggregate principal amount of senior unsecured notes with maturity dates ranging from July 2018 to February 2025 and $200 million of an unsecured term loan. The Company incurred $56.4 million of aggregate debt extinguishment costs, which include $28.4 million of make-whole amounts for the redemption of senior unsecured notes included in Other Expense on the Company’s consolidated statement of operations.

~~In September 2017, the~~The Company ~~amended and restated its~~maintains an unsecured revolving credit facility with a syndicate of financial institutions, arranged by J.P. Morgan Chase Bank, N.A., Wells Fargo Securities, LLC, Citizens Bank, N.A., RBC Capital Markets and U.S. Bank National Association (the “Unsecured Credit Facility”). The Unsecured Credit Facility ~~was amended to increase the maximum amount available to be drawn under the facility from $750 million~~provides for borrowings of up to $950 million ~~extend the maturity date to September 2021, add two six-month options to extend the maturity to September 2022 upon the Company’s request~~ and ~~increase the~~includes an accordion feature for expansion of availability up to $1.45 billion ~~from $1.25 billion upon the Company’s request,~~ provided that new or existing lenders agree to the existing terms of the facility and increase their commitment level. The Company also ~~amended its~~maintains an unsecured revolving credit facility with PNC Bank, National Association ~~which provides for maximum borrowing availability of $50 million (together~~(the “PNC Facility” together with the Unsecured Credit Facility, the “Revolving Credit Facilities”)~~, to reflect~~. The PNC Facility terms are substantially ~~the same terms as~~consistent with those contained in the Unsecured Credit Facility. On July 2, 2018, the Company permanently reduced the availability under the PNC Facility from $50 million to $20 million. The Company’s borrowings under the Revolving Credit Facilities bear interest at variable rates at the Company’s election, based on either LIBOR, plus a specified spread ~~(1.0%~~(1.2% at ~~September~~June 30, ~~2017)~~2018), or the ~~Prime~~Alternate Base Rate, as defined in the respective ~~facility.~~facility plus a specified spread (0.20% at June 30, 2018). The Company also pays an annual facility fee (0.25% at June 30, 2018) on the aggregate commitments applicable to each Revolving Credit Facility. The specified spreads and commitment fees vary depending on the Company’s long-term senior unsecured debt ratings from Moody’s Investors Service, Inc. (“Moody’s”) and S&P Global Ratings and their successors (“S&P”).

The Revolving Credit Facilities and the indentures under which the Company’s senior and subordinated unsecured indebtedness are, or may be, issued contain certain financial and operating covenants including, among other things, leverage ratios and debt service coverage and fixed charge coverage ratios, as well as limitations on the Company’s ability to incur secured and unsecured indebtedness, sell all or substantially all of the Company’s assets and engage in mergers and certain acquisitions. These credit facilities and indentures also contain customary default provisions including the failure to make timely payments of principal and interest payable thereunder, the failure to comply with the Company’s financial and operating covenants, the occurrence of a material adverse effect on the Company and the failure of the Company or its majority-owned subsidiaries (i.e., entities in which the Company has a greater than 50% interest) to pay, when due, certain indebtedness in excess of certain thresholds beyond applicable grace and cure periods. In the event the Company’s lenders or note holders declare a default, as defined in the applicable agreements governing the debt, the Company may be unable to obtain further funding, and/or an acceleration of any outstanding borrowings may occur. As of ~~September~~June 30, ~~2017,~~2018, the Company was in compliance with all of its financial covenants in the agreements governing its debt. Although the Company intends to operate in compliance with these covenants, if the Company were to violate these covenants, the Company may be subject to higher finance costs and fees or accelerated maturities. The Company believes it will continue to operate in compliance with these covenants in 2018 and beyond.

On July 2, 2018, DDR provided an unconditional guaranty to PNC Bank with respect to any obligations of the Company’s credit facilities and indentures permit the acceleration of the maturity of the underlying debt in the event certain other debt of the Company has been accelerated. Furthermore, a defaultRVI outstanding from time to time under a ~~loan~~$30 million revolving credit agreement entered into by RVI with PNC Bank. RVI has agreed to reimburse DDR for any amounts paid to PNC Bank pursuant to the ~~Company or its affiliates,~~guaranty plus interest at a foreclosure on a mortgaged property owned by the Company or its affiliates or the inability to refinance existing indebtedness may have a negative impact on the Company’s financial condition, cash flows and results of operations. These facts, and an inability to predict future economic conditions, have led the Company to continue to increase financial flexibility.

In August 2017, the Company issued $350.0 million aggregate principal amount of 3.900% senior unsecured notes due August 2024. Net proceeds from the issuance were used to repay all of the Company’s $300.0 million aggregate principal amount of 7.875% senior unsecured notes due September 2020. In connection with this repayment, the Company paid $51.2 million in make-whole premiums.

In May 2017, the Company issued $450.0 million aggregate principal amount of 4.700% senior unsecured notes due June 2027. Net proceeds from the issuance were used to repay amounts outstanding under the Revolving Credit Facilities and for general corporate purposes. In July 2017, the Company repaid all of its $300.0 million aggregate principal amount of 4.75% senior unsecured notes due April 2018 in part with a portion of the net proceeds of the 4.700% senior unsecured notes due June 2027 and the net proceeds from its $175.0 million aggregate liquidation preference of 6.375% Class A cumulative redeemable preferred shares as described below. In connection with this repayment, the Company paid $7.3 million in make-whole premiums.contracted rate.

In June 2017, the Company issued $175.0 million aggregate liquidation preference, of its newly designated 6.375% Class A cumulative redeemable preferred shares at a price of $500.00 per share (or $25.00 per depositary share).

On May 18, 2018, in anticipation of the RVI spin-off transaction, the Company effected a reverse stock split of its outstanding common shares, as well as those held in treasury, at a ratio of one-for-two.

The Company has a $250 million continuous equity program. At ~~November 1, 2017,~~July 25, 2018, the Company had all $250.0 million available for the future issuance of common shares under that ~~program.~~program, subject to certain conditions.

The Company expects to fund its obligations from available cash, current operations and utilization of its Revolving Credit Facilities; however, the Company may issue long-term debt and/or equity securities in lieu of, or in addition to, borrowing under its Revolving Credit Facilities. The Company intends to continue to maintain a long-term financing strategy with limited reliance on short-term debt. The Company believes its Revolving Credit Facilities are sufficient for its liquidity strategy and longer-term capital structure needs. Part of the Company’s overall strategy includes refinancing short-term debt maturities in order to increase the weighted-average duration of its indebtedness and scheduling future debt maturities in a balanced manner over the ~~long-term.~~

long term. The following depicts the Company’s consolidated debt ~~maturities~~outstanding at ~~September~~June 30, ~~2017, and forecasted thirteen months (October 2018)~~2018, which matures within the subsequent 13-month period (ending July 2019), ~~after deducting debt that has refinancing options,~~ and compares that amount to the cash and restricted cash available to fund debt repayments and availability ofunder the Revolving Credit Facilities. Furthermore, the following shows the Company’s cash and availability under the Revolving Credit Facilities on a pro forma basis (in millions):

As a result of the refinancings and repayments through November 1, 2017, the scheduled principal payments of the Revolving Credit Facilities and unsecured and secured indebtedness, excluding extension options, are as follows (in thousands):

At ~~November 1, 2017,~~July 2, 2018, the Company’s borrowing capacity on the Revolving Credit Facilities and cash on hand ~~were~~was sufficient to repay debt maturities through ~~2018. The~~July 2019. As discussed above, the Company is looking to strengthen its balance sheet and reduce leverage, and as a result, the Company may utilize net asset sale proceeds to repay debt. No assurance can be provided that these obligations will be refinanced or repaid as currently anticipated. These sources of funds could be affected by various risks and uncertainties (see Item 1A. Risk Factors in the Company’s Annual Report on Form 10-K for the year ended December 31, ~~2016)~~2017).

The Company has addressed ~~all of its 2017 consolidated debt maturities, as well as~~ all of its 2018 consolidated mortgage debt maturities. Management believes the scheduled debt maturities in future years are manageable. The Company continually evaluates its debt maturities and, based on management’s assessment, believes it has viable financing and refinancing alternatives. The Company seeks to manage its debt maturities through executing a strategy to extend debt duration, increase liquidity, lower leverage and improve the Company’s credit profile with the focus of lowering the Company's balance sheet risk and cost of capital. ~~The result of the unsecured debt and preferred share offerings in the second and third quarters of 2017 and the application of the proceeds therefrom was to extend the Company’s debt duration.~~

Unconsolidated Joint Ventures Mortgage Indebtedness – as of ~~September~~June 30, ~~2017~~2018

~~The debt maturities~~Indebtedness of the Company’s unconsolidated joint ventures at ~~September~~June 30, ~~2017, and forecasted thirteen months (October 2018)~~2018, which matures within the subsequent 13-month period (ending July 2019), ~~are~~is as follows (in millions):

It is expected that the joint ventures will fund these obligations from refinancing opportunities, including extension options or possible asset sales. No assurance can be provided that these obligations will be refinanced or repaid as currently anticipated.

The Company’s core business of leasing space to well-capitalized retailers continues to generate consistent and predictable cash flow after expenses, interest payments and preferred share dividends. This capital is available for use at the Company’s discretion for investment, debt repayment and the payment of dividends on common and preferred shares.

	Nine Months						Six Months
	Ended September 30,						Ended June 30,
	2017			2016			2018			2017
Cash flow provided by operating activities	$	302,233		$	351,022		$	161,755		$	209,738
Cash flow provided by investing activities		270,059			34,427			325,063			128,192
Cash flow used for financing activities		(591,424	)		(384,617	)
Cash flow (used for) provided by financing activities								(474,743	)		98,377

Changes in cash flow for the ~~nine months~~year ended ~~September~~June 30, ~~2017,~~2018, compared to the prior year ~~comparable period~~ are described as follows:

Operating Activities: Cash provided by operating activities decreased ~~$48.8~~$48.0 million primarily due to the ~~following:~~

Investing Activities: Cash provided by investing activities increased ~~$235.6~~$196.9 million primarily due to the following:

Financing Activities: Cash used for financing activities increased ~~$206.8~~$573.1 million primarily due to ~~the following:~~

The Company satisfied its REIT requirement of distributing at least 90% of ordinary taxable income with declared common and preferred share cash dividends of ~~$230.6~~$157.4 million and ~~$225.3~~$152.2 million for the ~~nine~~six months ended ~~September~~June 30, ~~2017~~2018 and ~~2016,~~2017, respectively. Because actual distributions were greater than 100% of taxable income, federal income taxes were not incurred by the Company in the first ~~nine months~~half of ~~2017.~~2018.

The Company declared a quarterly dividend of ~~$0.19~~$0.38 per common share for each of the first ~~three~~two quarters of ~~2017.~~2018, adjusted to reflect the reverse stock split. The Board of Directors of the Company ~~expects~~intends to ~~continue to monitor~~adjust the ~~2017~~2018 dividend policy ~~and provide for adjustments as~~in light of the recently completed spin-off of RVI at a level determined to be in the best interests of the Company and its shareholders in order to maximize the Company’s free cash flow while still adhering to REIT payout requirements.

The Company remains committed to strengthening the balance sheet, improving liquidity and lowering leverage, as well as lowering its overall risk profile. Asset sales continue to represent a potential source of proceeds to be used to achieve these objectives.

On July 1, 2018, the Company completed the spin-off of 48 assets into a separate, publicly-traded company, RVI. See further discussion in the “Executive Summary” and “Liquidity, Capital Resources and Financing Activities” sections surrounding the capital structure and related financing.

In connection with the spin-off, on July 1, 2018, the Company and RVI entered into a separation and distribution pursuant to which, among other things, the Company agreed to transfer the properties and certain related assets, liabilities and obligations to RVI and to distribute 100% of the outstanding common shares of RVI to holders of record of DDR’s common shares as of the close of business on June 26, 2018, the record date. On the spin-off date, holders of DDR’s common shares received one common share of RVI for every ten shares of DDR common stock held on the record date. In connection with the spin-off, the Company retained 1,000 shares of RVI’s series A preferred stock having an aggregate dividend preference equal to $190 million, which amount may increase by up to an additional $10 million depending on the amount of aggregate gross proceeds generated by RVI asset sales. In addition, pursuant to the terms of the separation and distribution agreement, RVI will have a repayment obligation to DDR primarily for certain cash balances held in restricted cash accounts on the separation date in connection with the RVI Mortgage Loan. RVI is obligated to repay DDR as soon as reasonably possible out of its operating cash flow but in no event later than March 31, 2020.

On July 1, 2018, the Company and RVI also entered into an external management agreement, which, together with various property management agreements, governs the fees, terms and conditions pursuant to which DDR will manage RVI and its properties. Pursuant to these management agreements, the Company will provide RVI with day-to-day management, subject to supervision and certain discretionary limits and authorities granted by the RVI Board, and RVI is not expected to have any employees. In general, either the Company or RVI may terminate the management agreement on December 31, 2019 or at the end of any six-month renewal period thereafter. The Company and RVI also entered into a tax matters agreement which governs the rights and responsibilities of the parties following the spin-off with respect to various tax matters and provides for the allocation of tax-related assets, liabilities and obligations.

~~As part~~During the six months ended June 30, 2018, the Company sold 10 shopping center properties, aggregating 2.1 million square feet, which together with land sales generated proceeds totaling $314.9 million. The Company recorded a net gain of $39.5 million. The 2018 sales activity includes two RVI shopping centers sold prior to consummation of the spin-off at an aggregate sales price of $105.8 million. In addition, three of the Company’s ~~overall deleveraging strategy,~~unconsolidated joint ventures sold 22 shopping center assets, aggregating 2.6 million square feet, for a gross sales price of $425.7 million, of which the Company’s proportionate share of the gain was $9.3 million. In addition, from July 1, 2018 through July 25, 2018, the Company ~~had been marketing less strategic~~sold two assets owned by two joint ventures, for ~~sale.~~an aggregate sales price of $33.8 million, $4.1 million at the Company’s share. The ~~new executive management team has evaluated~~asset sales from the ~~portfolio on an asset-by-asset basis to determine~~joint ventures with Blackstone resulted in preferred equity repayments received by the ~~most prudent investment decisions.~~ Company of $46.4 million from January 1, 2018 through July 25, 2018.

Changes in investment strategies for assets may impact the Company’s ~~impairment~~hold-period assumptions for those properties. The disposition of certain assets, including those assets that were placed into RVI, could result in a loss or impairment recorded in future periods. Immediately prior to the RVI spin-off, the Company expects that the separation of these assets may cause additional impairments of up to $15 million in the third quarter of 2018. The Company evaluates all potential sale opportunities taking into account the long-term growth prospects of the assets, the use of proceeds and the impact to the Company’s balance sheet, in addition to the impact on operating results.

During the nine months ended September 30, 2017, the Company sold 25 shopping center properties, aggregating 4.1 million square feet, which, together with land sales and loan repayments, generated proceeds totaling $506.3 million. The shopping center sales include two assets in Puerto Rico in June 2017, aggregating 0.4 million square feet, for an aggregate sales price of $57.3 million. The Company recorded a net gain of $127.0 million. In addition, two of the Company’s unconsolidated joint ventures sold nine shopping center assets for a gross sales price of $182.0 million. In October 2017, one asset was sold by the Company and one by the Company’s unconsolidated joint venture for an aggregate price of $190.0 million. In addition, the Company received $48.6 million in preferred equity repayments from the unconsolidated joint venture asset sale.

DRF I, including the Company. In addition, the Company will continue to provide leasing and management services. The recapitalization included the repayment of all outstanding mortgage debt previously held by the joint venture, a majority of which was scheduled to mature in July 2017. The joint venture obtained new mortgage loan financing collateralized by the 52 assets aggregating $706.7 million (of which the Company’s pro rata share was $141.3 million) that with extension options matures in July 2022. DDR contributed $46.9 million in cash to fund its pro rata share of the recapitalization and related debt refinancing.

In January 2017, the Company acquired 3030 North Broadway in Chicago, Illinois, a 131,748 square foot Company-owned GLA grocery-anchored shopping center, for $81.0 million. The contract for this acquisition was initially executed in mid-2016, but closing was delayed due to the completion of construction.

One of the important benefits of the Company’s asset class is the ability to phase ~~development and~~ redevelopment projects over time until appropriate leasing levels can be achieved. To maximize the return on capital spending, the Company ~~has~~ generally ~~adhered~~adheres to strict investment criteria thresholds. A key component to the Company’s strategic plan will be the evaluation of additional redevelopment

potential within the portfolio, particularly as it relates to the efficient use of the real estate and the Company’s ratio of big box tenants versus small shop ~~tenant~~ space.

The Company will generally commence construction on various ~~developments and~~ redevelopments only after substantial tenant leasing has occurred. The Company will continue to closely monitor its expected spending in ~~2017~~2018 for redevelopments, as the Company considers this funding to be discretionary spending. The Company does not anticipate expending significant funds on joint venture redevelopment projects in ~~2017.~~2018.

The Company’s consolidated land holdings are classified in two separate line items on the Company’s consolidated balance sheets included ~~herein:~~herein, (i) Land and (ii) Construction in Progress and Land. At ~~September~~June 30, ~~2017,~~2018, the ~~$1.9~~$1.7 billion of Land primarily consisted of land that is part of the Company’s shopping center portfolio. However, this amount also includes a small portion of vacant land composed primarily of outlots or expansion pads adjacent to the shopping center properties. Approximately ~~135~~151 acres of this land, which has a recorded cost basis of approximately ~~$17~~$22 million, is available for future development.

Included in Construction in Progress and Land at ~~September~~June 30, ~~2017,~~2018, was ~~$25~~$21 million of recorded costs related to undeveloped land being marketed for sale for which active construction never commenced or was previously ceased. The Company evaluates these assets each reporting period and records an impairment charge equal to the difference between the current carrying value and fair value when the expected undiscounted cash flows are less than the asset’s carrying value.

As part of its strategy to ~~develop,~~ expand, improve and re-tenant various properties, at ~~September~~June 30, ~~2017,~~2018, the Company has invested approximately ~~$152~~$115 million in various consolidated active redevelopment ~~projects and expects to bring at least $80 million of development into service in 2017 on a net basis, after deducting sales proceeds from outlot sales.~~

~~At September 30, 2017, the Company had no significant consolidated development~~ projects.

The Company’s major redevelopment projects are typically substantially ~~complete~~completed within ~~a year~~two years of the construction commencement date. At ~~September~~June 30, ~~2017,~~2018, the Company’s significant consolidated redevelopment projects were as follows (in thousands):

Location	Estimated Stabilized Quarter	Estimated Gross Cost		Cost Incurred at September 30, 2017		Estimated Stabilized Quarter	Estimated Gross Cost		Cost Incurred at June 30, 2018
Belgate Shopping Center (expansion) (Charlotte, North Carolina)	4Q17	$	25,788	$	20,682
Kenwood Square (Cincinnati, Ohio)	2Q18		31,171		23,575
Plaza del Sol (expansion) (San Juan, Puerto Rico)	1Q18		11,818		9,105
Lee Vista Promenade (Orlando, Florida)	1Q19		39,342		28,521	1Q19	$	39,241	$	30,033
West Bay Plaza (Cleveland, Ohio)	3Q19		27,792		2,208	3Q19		27,792		13,677
Kmart Shopping Center (Tampa, Florida)						4Q20		27,732		2,205
Shoppers World (Boston, Massachusetts)						TBD		20,426		1,338
Sandy Plains Village (Atlanta, Georgia)						TBD		8,556		1,009
Perimeter Pointe (Atlanta, Georgia)						TBD		9,833	—
Total		$	135,911	$	84,091		$	133,580	$	48,262

For redevelopment assets completed in ~~2017,~~2018, the assets placed in service were completed at a cost of approximately ~~$114~~$130 per square foot.

The Company has a number of off-balance sheet joint ventures with varying economic structures. Through these interests, the Company has investments in operating properties and one development project. Such arrangements are generally with institutional investors located throughout the United States.

The Company’s unconsolidated joint ventures had aggregate outstanding indebtedness to third parties of $2.2 billion and $2.7 billion at June 30, 2018 and ~~$3.1 billion at September 30,~~ 2017, ~~and 2016,~~ respectively (see Item 3. Quantitative and Qualitative Disclosures About Market Risk). Such mortgages are generally non-recourse to the Company and its partners; however, certain mortgages may have recourse to the Company and its partners in certain limited situations, such as misuse of funds and material misrepresentations.

At ~~September~~June 30, ~~2017,~~2018, the Company’s capitalization consisted of ~~$4.0~~$3.6 billion of debt, $525.0 million of preferred shares and ~~$3.4~~$2.7 billion of market equity (market equity is defined as common shares and OP Units outstanding multiplied by ~~$9.16,~~$14.78, the closing price of the Company’s common shares on the New York Stock Exchange at ~~September 30, 2017)~~June 29, 2018, the last trading day of June), resulting in a debt to total market capitalization ratio of ~~0.51~~0.53 to 1.0, as compared to the ratio of ~~0.43~~0.54 to 1.0 at ~~September~~June 30, ~~2016.~~2017. The closing price of the common shares on the New York Stock Exchange was ~~$17.43~~$18.14 at ~~September~~June 30, ~~2016. The~~2017, which reflects the reverse stock split. At June 30,

2018 and 2017, the Company’s total debt consisted of ~~the following (in billions):~~$2.1 billion and $4.0 billion of fixed-rate debt, respectively, and $1.5 billion and $0.6 billion of variable-rate debt, respectively.

It is management’s strategy to have access to the capital resources necessary to manage the Company’s balance sheet and to repay upcoming maturities. Accordingly, the Company may seek to obtain funds through additional debt or equity financings and/or joint venture capital in a manner consistent with its intention to operate with a conservative debt capitalization policy and to reduce the Company’s cost of capital by maintaining an investment grade rating with Moody’s, S&P and Fitch Ratings, Inc. ~~The~~A security rating is not a recommendation to buy, sell or hold securities, as it may be subject to revision or withdrawal at any time by the rating organization. Each rating should be evaluated independently of any other rating. The Company may not be able to obtain financing on favorable terms, or at all, which may negatively affect future ratings.

The Company’s credit facilities and the indentures under which the Company’s senior and subordinated unsecured indebtedness ~~is,~~are, or may be, issued contain certain financial and operating covenants, including, among other things, debt service coverage and fixed charge coverage ratios, as well as limitations on the Company’s ability to incur secured and unsecured indebtedness, sell all or substantially all of the Company’s assets, ~~and~~ engage in mergers and certain ~~acquisitions.~~acquisitions and make distribution to its shareholders. Although the Company intends to operate in compliance with these covenants, if the Company were to violate these covenants, the Company may be subject to higher finance costs and fees or accelerated maturities. In addition, certain of the Company’s credit facilities and indentures ~~may~~ permit the acceleration of maturity in the event certain other debt of the Company has been accelerated. Foreclosure on mortgaged properties or an inability to refinance existing indebtedness would have a negative impact on the Company’s financial condition and results of operations.

~~As of November 1, 2017, the~~The Company ~~had~~has addressed all of its ~~2017 and~~ 2018 consolidated ~~mortgage~~ debt maturities. ~~As the Company’s strategy is to repay debt and extend maturity, the Company’ s scheduled principal payments as of~~ ~~November 1, 2017, is presented herein in “Liquidity, Capital Markets and Financing Activities.”~~ The Company expects to fund future maturities ~~through the~~from utilization of its Revolving Credit Facilities, proceeds from asset sales, cash flow from operations and/or additional debt or equity financings. No assurance can be provided that these obligations will be repaid as currently anticipated or refinanced. The Company’s scheduled principal payments as of June 30, 2018 are presented in Note 6, “Indebtedness,” to the Company’s consolidated financial statements included herein, and reflect the refinancings and repayments in the first half of 2018, as discussed in the Liquidity Section included earlier in this section.

In conjunction with the ~~development and~~ redevelopment of shopping centers, the Company had entered into commitments with general contractors aggregating approximately ~~$19.0~~$29.3 million for its consolidated properties at ~~September~~June 30, ~~2017.~~2018. These obligations, composed principally of construction contracts, are generally due within 12 to 24 months, as the related construction costs are incurred, and are expected to be financed through operating cash flow, new ~~or existing~~ construction loans, asset sales or borrowings under the Revolving Credit Facilities.

The Company routinely enters into contracts for the maintenance of its properties. These contracts typically can be canceled upon 30 to 60 days’ notice without penalty. ~~The Company’s~~At June 30, 2018, the Company had purchase order obligations, typically payable within one year, aggregating approximately $9.0 million related to the maintenance of its properties and general and administrative ~~expenses are typically payable within one year~~expenses. The Company has entered into agreements with general contractors related to the repair and ~~are not~~restoration work for its properties in Puerto Rico. See further discussion below.

On July 2, 2018, DDR provided an unconditional guaranty to PNC Bank with respect to any obligations of RVI outstanding from time to time under a ~~material amount.~~$30 million revolving credit agreement entered into by RVI with PNC Bank. RVI has agreed to reimburse DDR for any amounts paid to PNC Bank pursuant to the guaranty plus interest at a contracted rate.

In ~~September~~ 2017, ~~Hurricane Irma made landfall in both Puerto Rico and Florida, and~~ Hurricane Maria made landfall in Puerto Rico. ~~The Company’s Florida assets were minimally impacted by Hurricane Irma, with the majority of repair costs related to debris removal. However,~~At June 30, 2018, the Company’s 12 assets in Puerto Rico, aggregating 4.4 million square feet of Company-owned GLA, were significantly impacted. One of ~~the 12~~these assets (Plaza Palma Real, consisting of approximately 0.4 million of Company-owned GLA) was severely ~~damaged; it~~damaged and is currently not operational, except for one anchor tenant and ~~is not expected to open for the foreseeable future.~~a few other tenants representing a minimal amount of Company-owned GLA. The other 11 assets ~~incurred~~sustained varying degrees of damage, ~~including~~consisting primarily of roof, and HVAC system damage and water intrusion. Although some tenant spaces ~~currently untenantable. Such damage consisted primarily~~remain untenantable, as of ~~roof, HVAC system and water intrusion.~~

AsJuly 25, 2018, 86% of ~~November 1, 2017, nine of the assets had partial to full utility power and were available~~leased GLA in Puerto Rico was open for ~~occupancy by some tenants, although due to the damage, portions of these properties remain unavailable for occupancy.~~ ~~Three of the assets (Plaza Escorial,~~business, excluding Plaza Palma Real ~~and~~(or 82% including Plaza ~~Walmart) are without power.~~ Palma Real).

the end of ~~necessary repairs.~~ the third quarter of 2019. The timing and schedule of additional repair work to be completed are highly dependent upon any changes in the scope of work, as well as ~~the ability to turn over space to tenants, is highly dependent on the full restoration of utilities at all of its shopping centers in Puerto Rico, and~~ the availability of building materials, supplies and skilled labor. The Company does not currently know when full utility service will be restored at the shopping centers with partial or no service, or the extent of the services that will be provided in the interim, if any. As such, the Company is unable to estimate when repair work will be completed or when the remaining tenants will reopen for business.

The Company maintains insurance on its assets in Puerto Rico with policy limits of approximately $330 million for both property damage and business interruption. The Company's insurance policies are subject to various terms and conditions, including a combined property damage and business interruption deductible of approximately $6.0 million. The Company estimates its aggregate ~~casualty~~property insurance claim, ~~to be in the range of $125 – $150 million,~~ which includes costs to repair and rebuild, will approximate $150 million. This amount excludes insurance proceeds due from certain continental-U.S.-based anchor tenants who maintain their own property insurance on their Company-owned premises and are expected to make the required repairs to their stores at their own expense. In addition, the Company estimates that its business interruption claim, which includes costs to clean up ~~repair~~ and ~~rebuild~~mitigate tenant losses as well as lost revenue, estimated through December 31, 2017. The amount also includes casualty insurance proceeds due from certain U.S.-based anchor tenants that maintain property insurance of their Company-owned premises. This estimate does not take into accountJune 30, 2018, to be approximately $25 million. These estimates are subject to change as the ~~increased~~Company continues to assess the costs ~~associated with resource constraints in Puerto Rico relating~~ to ~~building materials, supplies and labor.~~repair damage. The Company’s ability to repair its properties, and the cost of such repairs, could be negatively impacted by circumstances and events beyond the Company’s control, such as access to building materials and changes in the ~~restoration~~scope of ~~utility service.~~work to be performed. Therefore, there can be no assurance that the Company’s ~~ability to prepare~~ estimates of property damage and lost rental revenue are accurate. The Company believes it maintains adequate insurance coverage on each of its properties and is working closely with the insurance carriers to obtain the maximum amount of insurance recovery provided under the policies. However, the Company can give no assurances as to the amounts of such claims, timing of payments and resolution of the claims. The Company received an additional $20.2 million toward the property damage portion of its insurance claim in the second quarter of 2018.

The Company’s business interruption insurance covers lost revenue through the period of property restoration and for up to 365 days following completion of restoration. For the ~~three and nine~~six months ended ~~September~~June 30, ~~2017,~~2018, rental revenues of ~~$2.6~~$6.6 million ~~for Hurricanes Irma and Maria~~ were not recorded ~~related to~~because of lost tenant revenue attributable to Hurricane Maria that ~~is expected to be~~has been partially defrayed by insurance proceeds. The Company will record revenue for covered business interruption claims in the period it determines that it is probable it will be compensated. As such, there could be a delay between the rental period and the recording of revenue. The amount of any future lost revenue depends on when properties are ~~reopened~~fully available for ~~tenants,~~tenants’ re-occupancy which, in turn, is highly dependent upon the timing and progress of repairs. In the first half of 2018, the Company received insurance proceeds of $5.1 million related to business interruption claims, which is recorded on the Company’s consolidated statement of operations as Business Interruption Income. The Company expects to make ~~a claim under its business interruption insurance~~claims in future periods for ~~this~~revenues lost ~~revenue.~~prior to the completion of the spin-off. However, there can be no assurance that insurance claims will be resolved favorably to the Company or in a timely manner.

See further discussion in Note 9,8, “Commitments and Contingencies,” ofto the Company’s consolidated financial statements included herein. Note that pursuant to the terms of the Separation and Distribution Agreement in connection with the RVI spin-off as discussed in the section “Sources and Uses of Capital,” DDR will be entitled to insurance claim proceeds for unreimbursed restoration costs incurred through June 30, 2018, as well as business interruption losses for the same period. Business interruption proceeds will continue to be recorded to revenue in the period that it is determined that DDR will be compensated.

Most 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 additional rental income from escalation clauses that generally increase rental rates during the terms of the leases and/or percentage rentals based on tenants’ gross sales. Such escalations are determined by negotiation, increases 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, permitting the Company to seek increased rents at market rates upon renewal. Most of the Company’s leases require the tenants to pay their share of operating expenses, including common area maintenance, real estate taxes, insurance and utilities, thereby reducing the Company’s exposure to increases in costs and operating expenses resulting from inflation.

Despite the recent tenant bankruptcies and increases in e-commerce, the Company continues to believe there is retailer demand for quality locations within well-positioned shopping centers. ~~ECONOMIC CONDITIONS~~Further, the Company continues to see demand from a broad range of retailers for its space, particularly in the off-price sector, which the Company believes is a reflection of the general outlook of consumers who are demanding more value for their dollars. Many of these retailers have store opening plans for 2018 and 2019. This is evidenced by the continued stable volume of leasing activity, which was almost three million square feet of space for new leases and renewals for the first half of 2018, as well as almost seven million square feet of space for new leases and renewals for the year ended December 31, 2017. The Company also benefits from a diversified tenant base, with only two tenants whose annualized rental revenue equals or exceeds 3% of the Company’s annualized consolidated revenues plus the Company’s proportionate share of unconsolidated joint venture revenues (TJX Companies which include T.J. Maxx, Marshalls, Sierra Trading Post, HomeGoods and HomeSense at 4.7% and Bed Bath & Beyond which includes Bed Bath & Beyond, World Market, buybuy Baby and Christmas Tree Shops at 3.3%). Other significant tenants include Walmart/Sam’s Club, Target, Five Below, Dick’s Sporting Goods, Ross Stores, Lowe’s and Ulta, all of which have relatively strong credit ratings, remain well-capitalized and have outperformed other retail categories on a relative basis over time. In addition, several of the Company’s big box tenants (Walmart/Sam’s Club, Dick’s Sporting

Goods, Best Buy and Target) have been adapting to an omni-channel retail environment, creating positive overall sales growth over the last few years. The Company believes these tenants will continue providing a stable revenue base for the foreseeable future, given the long-term nature of these leases. Moreover, the majority of the tenants in the Company’s shopping centers provide day-to-day consumer necessities with a focus toward value and convenience, versus high-priced, discretionary luxury items, which the Company believes will enable many of its tenants to outperform even in a challenging economic environment.

The retail shopping sector continues to be affected by the competitive nature of the retail business, including the impact of internet shopping and the competition for market share, as well as general economic conditions, where stronger retailers have out-positioned some of the weaker retailers. These shifts can force some market share away from weaker retailers, which could require them to downsize and close stores and/or declare bankruptcy. In many cases, the loss of a weaker tenant or downsizing of space creates a value-add opportunity to re-lease space at higher rents to a stronger retailer. ~~Overall, the Company believes its portfolio remained stable at September 30, 2017, as evidenced by the consistency in the occupancy rate as further described below. However, there~~There can be no assurance that the loss of a tenant or downsizing of space will not adversely affect the Company in the future (see Item 1A. Risk Factors in the Company’s Annual Report on Form 10-K for the year ended December 31, ~~2016)~~2017).

~~Despite the recent tenant bankruptcies, the Company continues to believe there is retailer demand for quality locations within well-positioned shopping centers.~~ ~~Further, the Company continues~~ to see strong demand from a broad range of retailers for its space, particularly in the off-price sector, which the Company believes is a reflection of the general outlook of consumers who are demanding more value for their dollars. Many of these retailers have store opening ~~plans for 2017 and 2018.~~ This is evidenced by the continued stable volume of leasing activity, which was 5.5 million square feet of space for new leases and renewals for the first nine months of 2017, as well as approximately nine million square feet of space for new leases and renewals for the year ended December 31, 2016. The Company also benefits from a diversified tenant base, with only two tenants whose annualized rental revenue equals or exceeds 3% of the Company’s annualized consolidated revenues plus the Company’s proportionate share of unconsolidated joint venture revenues (TJX Companies at 4.0% and Bed Bath & Beyond at 3.5%). Other significant tenants include Walmart, Target, PetSmart, Dick’s Sporting Goods, Ross Stores, AMC Theatres, Lowe’s, Ulta and Publix, all of which have relatively strong credit ratings, remain well-capitalized and have outperformed other retail categories on a relative basis over time. In addition, several of the Company’s big box tenants (Walmart, Dick’s Sporting Goods, TJX Companies and Target) have been adapting to an omni-channel retail environment, creating positive overall sales growth over the prior few years. The Company believes these tenants will continue providing it with a stable revenue base for the foreseeable future, given the long-term nature of these leases. Moreover, the majority of the tenants in the Company’s shopping centers provide day-to-day consumer necessities with a focus toward value and convenience, versus high-priced discretionary luxury items, which the Company believes will enable many of its tenants to outperform even in a challenging economic environment.

The Company believes that the quality of its shopping center portfolio is strong, as evidenced by the high historical occupancy rates and consistent growth in the average annualized base rent per occupied square foot. ~~Historical occupancy has generally ranged from 92% to 96% since the Company’s initial public offering in 1993.~~ The shopping center portfolio occupancy was ~~91.5%~~90.8% at ~~September~~June 30, ~~2017, 93.3%~~2018, 91.1% at December 31, ~~2016~~2017 and ~~93.0%~~91.5% at ~~September~~June 30, 2016. The net decrease in occupancy in the first nine months of 2017 primarily was attributed to expiring anchor leases that were not renewed and tenant bankruptcies, as well as the impact of asset sales with rates that were slightly above the portfolio average occupancy.2017. The total portfolio average annualized base rent per occupied square foot was ~~$15.53~~$15.93 at ~~September~~June 30, ~~2017, as compared to $15.00~~2018, $15.77 at December 31, ~~2016,~~2017 and ~~$14.72~~$15.46 at ~~September~~June 30, ~~2016.~~2017. The increase primarily was due to ~~the sale of lower quality assets and the acquisition of shopping centers with higher growth potential, as well as~~ continued lease up and renewal of the existing portfolio at positive rental spreads. ~~Moreover,~~Due largely to a number of recent anchor tenant bankruptcies, the Company has had to invest a substantial amount of capital to re-lease those units; however, the per square foot cost to do so has been ~~able to achieve these results without significant capital investment in tenant improvements or leasing commissions.~~predominantly consistent with the Company’s historical trends. The weighted-average cost of tenant improvements and lease commissions estimated to be incurred over the expected lease term for new leases executed during ~~the first nine months of 2017~~2018 was ~~only $4.88~~$7.30 per rentable square foot. The Company generally does not expend a significant amount of capital on lease renewals. The quality of the property revenue stream is high and consistent, as it is generally derived from retailers with good credit profiles under long-term leases, with very little reliance on overage rents generated by tenant sales performance. The Company ~~understands~~recognizes the risks posed by the economy, but believes that the position of its portfolio and the general diversity and credit quality of its tenant base should enable it to successfully navigate through a potentially challenging ~~economic times.~~

As disclosed above in “Contractual Obligations and Commitments,” at September 30, 2017, the Company owned 12 assets on the island of Puerto Rico aggregating 4.4 million square feet of Company-owned GLA. The Company sold two assets in Puerto Rico in June 2017 for a gross sales price aggregating $57.3 million. The 12 owned assets represent 11.4% of the Company’s total consolidated revenue and 11.3% of the Company’s consolidated revenue less operating expenses (i.e., net operating income) for the nine months ended September 30, 2017. These assets account for 6.2% of Company-owned GLA, including the unconsolidated joint ventures at September 30, 2017. There is continued concern about the status of the Puerto Rican economy, the ability of the government of Puerto Rico to meet its financial obligations and the impact of any government default on the economy of Puerto Rico. The impact of Hurricane Maria has further exacerbated these concerns. The Company’s assets experienced varying degrees of damage due to Hurricane Maria. The Company has been actively working with its insurer relating to both the property damage and business interruption claims. See Note 9, “Commitments and Contingencies,” to the Company’s consolidated financial statements included herein. The Company believes that the tenants in these assets (many of which are Continental U.S. retailers such as Walmart and TJX Companies) typically cater to the local consumer’s desire for value and convenience and often provide consumers with day-

to-day necessities and should withstand redevelopment pressures and reopen their locations in Puerto Rico. The Company further believes that these tenants represent a source of stable, high-quality cash flow for the Company’s assets. Nonetheless, the Company’s Board of Directors and management continue to evaluate its investment in the 12 assets and may determine to dispose of all or a portion of these assets. There can be no assurance that the hurricane relief efforts will be completed in a timely manner, or at all, or that the economic conditions in Puerto Rico will not deteriorate further, which could materially and negatively impact consumer spending and ultimately adversely affect the Company’s assets in Puerto Rico or its ability to dispose of the properties on commercially reasonable terms, or at all (see Item 1A. Risk Factors in the Company’s Annual Report on Form 10-K for the year ended December 31, 2016).retail environment.

New Accounting Standards are more fully described in Note 1, “Nature of Business and Financial Statement Presentation,” ofto the Company’s consolidated financial statements included herein.

Management’s ~~discussion~~Discussion and ~~analysis~~Analysis of Financial Condition and Results of Operations should be read in conjunction with the Company’s consolidated financial statements and the notes thereto appearing elsewhere in this report. Historical results and percentage relationships set forth in the Company’s consolidated financial statements, including trends that might appear, should not be taken as indicative of future operations. The Company considers portions of this information to be “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934, both as amended, with respect to the Company’s expectations for future periods. Forward-looking statements include, without limitation, statements related to acquisitions (including any related pro forma financial information) and other business development activities, future capital expenditures, financing sources and availability and the effects of environmental and other regulations. Although the Company believes that the expectations reflected in these forward-looking statements are based upon reasonable assumptions, it can give no assurance that its expectations will be achieved. For this purpose, any statements contained herein that are not statements of historical fact should be deemed to be forward-looking statements. Without limiting the foregoing, the words “will,” “believes,” “anticipates,” “plans,” “expects,” “seeks,” “estimates” and similar expressions are intended to identify forward-looking statements. Readers should exercise caution in interpreting and relying on forward-looking statements because such statements involve known and unknown risks, uncertainties and other factors that are, in some cases, beyond the Company’s control and that could cause actual results to differ materially from those expressed or implied in the forward-looking statements and that could materially affect the Company’s actual results, performance or achievements. For additional factors that could cause the results of the Company to differ materially from those indicated in the forward-looking statements ~~please refer to~~(see Item 1A. Risk Factors in the Company’s Annual Report on Form 10-K for the year ended December 31, ~~2016.~~2017).

Factors that could cause actual results, performance or achievements to differ materially from those expressed or implied by forward-looking statements include, but are not limited to, the following:

The Company’s primary market risk exposure is interest rate risk. The Company’s debt, excluding unconsolidated joint venture debt, ~~(adjusted to reflect the $76.9 million of variable-rate debt that LIBOR was swapped to at a fixed rate of 2.8% at December 31, 2016),~~ is summarized as follows:

	September 30, 2017										December 31, 2016										June 30, 2018										December 31, 2017
	Amount (Millions)		Weighted- Average Maturity (Years)		Weighted- Average Interest Rate			Percentage of Total			Amount (Millions)		Weighted- Average Maturity (Years)		Weighted- Average Interest Rate			Percentage of Total			Amount (Millions)		Weighted- Average Maturity (Years)		Weighted- Average Interest Rate			Percentage of Total			Amount (Millions)		Weighted- Average Maturity (Years)		Weighted- Average Interest Rate			Percentage of Total
Fixed-Rate Debt	$	3,481.9		5.8		4.3	%		86.7	%	$	3,869.5		4.5		4.9	%		86.1	%	$	2,104.4		6.2		4.3	%		58.6	%	$	3,451.2		5.6		4.2	%		89.7	%
Variable-Rate Debt	$	535.6		2.6		2.4	%		13.3	%	$	624.5		0.3		1.9	%		13.9	%	$	1,485.3		2.9		4.9	%		41.4	%	$	398.1		2.7		2.9	%		10.3	%

The Company’s unconsolidated joint ventures’ indebtedness at its carrying value, adjusted to reflect the $42.0 million of variable-rate debt ($2.1 million at the Company’s proportionate share) that LIBOR was swapped to at a fixed rate of 1.9% at ~~September~~June 30, ~~2017~~2018 and December 31, ~~2016,~~2017, is summarized as follows:

	September 30, 2017									December 31, 2016									June 30, 2018									December 31, 2017
	Joint Venture Debt (Millions)		Company's Proportionate Share (Millions)		Weighted- Average Maturity (Years)		Weighted- Average Interest Rate			Joint Venture Debt (Millions)		Company's Proportionate Share (Millions)		Weighted- Average Maturity (Years)		Weighted- Average Interest Rate			Joint Venture Debt (Millions)		Company's Proportionate Share (Millions)		Weighted- Average Maturity (Years)		Weighted- Average Interest Rate			Joint Venture Debt (Millions)		Company's Proportionate Share (Millions)		Weighted- Average Maturity (Years)		Weighted- Average Interest Rate
Fixed-Rate Debt	$	1,048.1	$	159.5		5.0		4.2	%	$	1,808.1	$	298.3		1.6		5.4	%	$	859.3	$	150.0		5.4		4.1	%	$	953.6	$	154.6		5.3		4.2	%
Variable-Rate Debt	$	1,650.0	$	206.4		1.4		3.0	%	$	1,226.3	$	114.6		1.9		2.6	%	$	1,330.6	$	172.0		1.0		3.8	%	$	1,547.6	$	200.2		1.3		3.3	%

The Company intends to use retained cash flow, proceeds from asset sales, equity and debt financing and variable-rate indebtedness available under its Revolving Credit Facilities to repay indebtedness and fund capital expenditures of the Company’s shopping centers. Thus, to the extent the Company incurs additional variable-rate indebtedness, its exposure to increases in interest rates in an inflationary period could increase. The Company does not believe, however, that increases in interest expense as a result of inflation will significantly impact the Company’s distributable cash flow.

The interest rate risk on a portion of the Company’s and its unconsolidated joint ventures’ variable-rate debt described above has been mitigated through the use of interest rate swap agreements (the “Swaps”) with major financial institutions. The Company is exposed to credit risk in the event of nonperformance by the counterparties to the Swaps. The Company believes it mitigates its credit risk by entering into Swaps with major financial institutions.

The carrying value and the fair value of the Company’s fixed-rate debt isare adjusted to ~~(i) include the Swaps reflected in the carrying value and (ii)~~ include the Company’s proportionate share of the joint venture fixed-rate debt. An estimate of the effect of a 100 basis-point increase at ~~September~~June 30, ~~2017~~2018 and December 31, ~~2016,~~2017, is summarized as follows (in millions):

	September 30, 2017						December 31, 2016						June 30, 2018						December 31, 2017
	Carrying Value		Fair Value		100 Basis-Point Increase in Market Interest Rate		Carrying Value		Fair Value		100 Basis-Point Increase in Market Interest Rate		Carrying Value		Fair Value		100 Basis-Point Increase in Market Interest Rate		Carrying Value		Fair Value		100 Basis-Point Increase in Market Interest Rate
Company's fixed-rate debt	$	3,481.9	$	3,589.2	$	3,418.9	$	3,869.5	$	4,044.2	$	3,895.0	$	2,104.4	$	2,103.0	$	1,996.3	$	3,451.2	$	3,537.5	$	3,372.7
Company's proportionate share of joint venture fixed-rate debt	$	159.5	$	156.9	$	150.1	$	298.3	$	305.1	$	300.8	$	150.0	$	144.5	$	138.9	$	154.6	$	150.3	$	144.1

The sensitivity to changes in interest rates of the Company’s fixed-rate debt was determined using a valuation model based upon factors that measure the net present value of such obligations that arise from the hypothetical estimate as discussed above.

~~Further,~~Certain wholly-owned subsidiaries are party to a $1.27 billion interest rate cap to fix the interest rate on a $1.27 billion mortgage for the RVI assets. As such, a 100 basis-point increase in short-term market interest rates on variable-rate debt at ~~September~~June 30, ~~2017,~~2018, would result in an increase in interest expense of approximately ~~$4.0~~$1.7 million for the Company and ~~$1.6~~$0.9 million representing the Company’s proportionate share of the joint ventures’ interest expense relating to variable-rate debt outstanding for the ~~nine~~six months ended ~~September~~June 30, ~~2017.~~2018. The estimated increase in interest expense does not give effect to possible changes in the daily balance of the Company’s or joint ventures’ outstanding variable-rate debt.

The Company and its joint ventures intend to continually monitor and actively manage interest costs on their variable-rate debt portfolio and may enter into swap positions based on market fluctuations. In addition, the Company believes it has the ability to obtain funds through additional equity and/or debt offerings and joint venture capital. Accordingly, the cost of obtaining such protection agreements ~~in relation to~~versus the Company’s access to capital markets will continue to be evaluated. The Company has not entered, and does not plan to enter, into any derivative financial instruments for trading or speculative purposes. As of ~~September~~June 30, ~~2017,~~2018, the Company had no other material exposure to market risk.

The Company’s management, with the participation of the Chief Executive Officer (“CEO”) and Chief Financial Officer (“CFO”), conducted an evaluation, pursuant to Securities Exchange Act of 1934 Rules 13a-15(b) and 15d-15(b), of the effectiveness of our disclosure controls and procedures. Based on their evaluation as required, the CEO and CFO have concluded that the Company’s disclosure controls and procedures (as defined in Securities Exchange Act Rules 13a-15(e) and 15d-15(e)) were effective as of the end of the period covered by this Quarterly Report on Form 10-Q to ensure that information required to be disclosed by the Company in reports that it files or submits under the Securities Exchange Act is recorded, processed, summarized and reported within the time periods specified in Securities and Exchange Commission rules and forms and were effective as of the end of such period to ensure that information required to be disclosed by the Company in reports that it files or submits under the Securities Exchange Act is accumulated and communicated to the Company’s management, including its CEO and CFO, or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosure.

During the three months ended ~~September~~June 30, ~~2017,~~2018, there were no changes in the Company’s internal control over financial reporting that materially affected or are reasonably likely to materially affect the Company’s internal control over financial reporting.

The Company and its subsidiaries are subject to various legal proceedings, which, taken together, are not expected to have a material adverse effect on the Company. The Company is also subject to a variety of legal actions for personal injury or property damage arising in the ordinary course of its business, most of which are covered by insurance. While the resolution of all matters cannot be predicted with certainty, management believes that the final outcome of such legal proceedings and claims will not have a material adverse effect on the Company’s liquidity, financial position or results of operations.

~~The Company will continue to experience business disruptions at its properties in Puerto Rico until it makes necessary repairs and reopens such properties.~~

Recent severe weather conditions, including Hurricane Maria, caused substantial damage to property and infrastructure in Puerto Rico, including many of the Company’s shopping centers located there. The Company has made preliminary assessments of the scope of damages to its properties, but the costs ultimately associated with such damages may exceed initial estimates. Furthermore, the Company will continue to experience business disruptions at its properties until it makes necessary repairs and reopens such properties. The timing of such repairs will be highly dependent upon factors beyond the Company’s control, such as access to utilities and the availability of building materials, supplies and labor, all of which have been seriously diminished in the wake of Hurricane Maria. Additionally, any failure of civil authorities to ensure public safety and maintain order may also interfere with the Company’s efforts to reopen properties. Such delays could increase the duration of business disruptions, as well as the related costs, beyond the Company’s expectations. Any insurance coverage for losses due to damage or business disruption may prove to be inadequate or unavailable.None.

(a)

(b)

(c)

(d)

Total
Number of
Shares
Purchased⁽¹⁾

Average
Price Paid
per Share

Total Number
of Shares Purchased
as Part of
Publicly Announced
Plans or Programs

Maximum Number
(or Approximate
Dollar Value) of
Shares that May Yet
Be Purchased Under
the Plans or Programs

July 1–31, 2017

5,849

$
9.01

—

—

August 1–31, 2017

213

9.89

—

—

September 1–30, 2017

59

9.68

—

—

Total

6,121

$
9.05

—

—

	(a)		(b)		(c)		(d)
	Total Number of Shares Purchased⁽¹⁾		Average Price Paid per Share		Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs		Maximum Number (or Approximate Dollar Value) of Shares that May Yet Be Purchased Under the Plans or Programs
April 1–30, 2018		1,471	$	14.81		—		—
May 1–31, 2018		27		14.51		—		—
June 1–30, 2018		1,131		17.84		—		—
Total		2,629	$	16.11		—		—

Attached as Exhibit 101 to this report are the following formatted in XBRL (Extensible Business Reporting Language): (i) Consolidated Balance Sheets as of ~~September~~June 30, ~~2017~~2018 and December 31, ~~2016,~~2017, (ii) Consolidated Statements of Operations for the Three and ~~Nine~~Six Months Ended ~~September~~June 30, ~~2017~~2018 and ~~2016,~~2017, (iii) Consolidated Statements of Comprehensive (Loss) Income ~~(Loss)~~ for the Three and ~~Nine~~Six Months Ended ~~September~~June 30, ~~2017~~2018 and ~~2016,~~2017, (iv) Consolidated Statement of Equity for the ~~Nine~~Six Months Ended ~~September~~June 30, ~~2017,~~2018, (v) Consolidated Statements of Cash Flows for the ~~Nine~~Six Months Ended ~~September~~June 30, ~~2017~~2018 and ~~2016~~2017 and (vi) Notes to Condensed Consolidated Financial Statements.

Exhibit No.
Under Reg. S-K
Item 601

Form 10-Q
Exhibit No.

Description

Filed or Furnished Herewith or
Incorporated Herein by
Reference

4

4.1

Twenty-first Supplemental Indenture, dated as of August 16, 2017, by and between the Company and U.S. Bank National Association (as successor to U.S. Bank Trust National Association (as successor to National City Bank))

Current Report on Form 8-K (Filed with the SEC on August 16, 2017; File No. 001-11690)

4

4.2

Second Amended and Restated Credit Agreement, dated as of September 13, 2017, among DDR Corp., DDR PR Ventures LLC, S.E., the lenders party thereto and JPMorgan Chase Bank, N.A., as administrative agent

Current Report on Form 8-K (Filed with the SEC on September 14, 2017; File No. 001-11690)

31

31.1

Certification of principal executive officer pursuant to Rule 13a-14(a) of the Securities Exchange Act of 1934

Submitted electronically herewith

31

31.2

Certification of principal financial officer pursuant to Rule 13a-14(a) of the Securities Exchange Act of 1934

Submitted electronically herewith

32

32.1

Certification of chief executive officer pursuant to Rule 13a-14(b) of the Securities Exchange Act of 1934 and 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of this report pursuant to the Sarbanes-Oxley Act of 2002

Submitted electronically herewith

32

32.2

Certification of chief financial officer pursuant to Rule 13a-14(b) of the Securities Exchange Act of 1934 and 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of this report pursuant to the Sarbanes-Oxley Act of 2002

Submitted electronically herewith

101

101.INS

XBRL Instance Document

Submitted electronically herewith

101

101.SCH

XBRL Taxonomy Extension Schema Document

Submitted electronically herewith

101

101.CAL

XBRL Taxonomy Extension Calculation Linkbase Document

Submitted electronically herewith

101

101.DEF

XBRL Taxonomy Extension Definition Linkbase Document

Submitted electronically herewith

101

101.LAB

XBRL Taxonomy Extension Label Linkbase Document

Submitted electronically herewith

101

101.PRE

XBRL Taxonomy Extension Presentation Linkbase Document

Submitted electronically herewith

Pursuant to the requirements 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.

Ohio		34-1723097
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)

PART I. FINANCIAL INFORMATION
Item 1.	Financial Statements - Unaudited
	Consolidated Balance Sheets as of ~~September~~June 30, ~~2017~~2018 and December 31, ~~2016~~2017	2
	Consolidated Statements of Operations for the Three Months Ended ~~September~~June 30, ~~2017~~2018 and ~~2016~~2017	3
	Consolidated Statements of Operations for the ~~Nine~~Six Months Ended ~~September~~June 30, ~~2017~~2018 and ~~2016~~2017	4
	Consolidated Statements of Comprehensive (Loss) Income ~~(Loss)~~ for the Three and ~~Nine~~Six Months Ended ~~September~~June 30, ~~2017~~2018 and ~~2016~~2017	5
	Consolidated Statement of Equity for the ~~Nine~~Six Months Ended ~~September~~June 30, ~~2017~~2018	6
	Consolidated Statements of Cash Flows for the ~~Nine~~Six Months Ended ~~September~~June 30, ~~2017~~2018 and ~~2016~~2017	7
	Notes to Condensed Consolidated Financial Statements	8
Item 2.	Management's Discussion and Analysis of Financial Condition and Results of Operations	2325
Item 3.	Quantitative and Qualitative Disclosures about Market Risk	4245
Item 4.	Controls and Procedures	4346

PART II. OTHER INFORMATION
Item 1.	Legal Proceedings	4447
Item 1A.	Risk Factors	4447
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	4447
Item 3.	Defaults Upon Senior Securities	4447
Item 4.	Mine Safety Disclosures	4447
Item 5.	Other Information	4447
Item 6.	Exhibits	4548

SIGNATURES		4749

Balance as of January 1, 2018	$	1,371
Contract assets recognized		1,191
Contract assets billed		(1,180	)
Balance as of June 30, 2018	$	1,382

	2017			2016
Balance at January 1	$	49,488		$	41,988
Additions:
New mortgage loans		—			6,802
Interest		1,826			2,306
Accretion of discount		269			773
Deductions:
Collections of principal and interest^(A)		(32,004	)		(7,090	)
Balance at September 30	$	19,579		$	44,779

	DDR Equity

	Preferred Shares		Common Shares		Additional Paid-in Capital			Accumulated Distributions in Excess of Net Income		��	Deferred Compensation Obligation			Accumulated Other Comprehensive Loss			Treasury Stock at Cost			Non- Controlling Interests			Total
Balance, December 31, 2016	$	350,000	$	36,630	$	5,487,212		$	(2,632,327	)	$	15,149		$	(4,192	)	$	(14,957	)	$	8,497		$	3,246,012
Issuance of common shares related to stock plans		—		152		17,529			—			—			—			—			—			17,681
Issuance of preferred shares		175,000		—		(6,118	)		—			—			—			—			—			168,882
Stock-based compensation, net		—		—		7,232			—			(4,768	)		—			5,050			—			7,514
Distributions to non-controlling interests		—		—		—			—			—			—			—			(627	)		(627	)
Dividends declared-common shares		—		—		—			(209,763	)		—			—			—			—			(209,763	)
Dividends declared-preferred shares		—		—		—			(20,810	)		—			—			—			—			(20,810	)
Comprehensive (loss) income		—		—		—			(23,647	)		—			2,721			—			1,053			(19,873	)
Balance, September 30, 2017	$	525,000	$	36,782	$	5,505,855		$	(2,886,547	)	$	10,381		$	(1,471	)	$	(9,907	)	$	8,923		$	3,189,016

				Weighted-Average Amortization Period (in Years)
Land	$	23,588		N/A
Buildings		35,659		(A)
Tenant improvements		8,565		(A)
In-place leases (including lease origination costs and fair market value of leases)		7,051			16.0
Tenant relations		6,934			16.3
Other assets		419		N/A
		82,216
Less: Below-market leases		(1,872	)		20.0
Less: Other liabilities assumed		(581	)	N/A
Net assets acquired	$	79,763

Year	Amount
2018	$	24,487
2019		97,241
2020		41,684
2021^(A)		1,332,140
2022		481,068
Thereafter		1,653,894
		3,630,514
Unamortized fair market value of assumed debt		2,042
Net unamortized debt issuance costs		(42,807	)
Total indebtedness	$	3,589,749

	Gains on Cash Flow Hedges			Foreign Currency Items			Total
Balance, December 31, 2016	$	(3,930	)	$	(262	)	$	(4,192	)
Other comprehensive income before reclassifications		995			1,014			2,009
Change in cash flow hedges reclassed to earnings^(A)		712			—			712
Net current-period other comprehensive income		1,707			1,014			2,721
Balance, September 30, 2017	$	(2,223	)	$	752		$	(1,471	)

	Three Months Ended September 30, 2016
	Shopping Centers			Loan Investments			Other			Total
Total revenues	$	253,787		$	13					$	253,800
Rental operation expenses		(68,107	)		(62	)					(68,169	)
Net operating income (loss)		185,680			(49	)					185,631
Impairment charges		(104,877	)								(104,877	)
Depreciation and amortization		(95,451	)								(95,451	)
Interest income					9,304						9,304
Other income (expense), net							$	(384	)		(384	)
Unallocated expenses^(A)								(73,123	)		(73,123	)
Equity in net loss of joint ventures		(1,457	)								(1,457	)
Loss on sale and change in control of interests, net		(1,087	)								(1,087	)
Loss from continuing operations										$	(81,444	)

July 2018 Senior Note maturity	$	82.2
April 2018 Unsecured Term Loan maturity^(A)		200.0
January–October 2018 mortgage debt maturities		104.2
		386.4
Less Mortgage Indebtedness repaid through November 1, 2017		(104.2	)
Less Unsecured Term Loan extension option^(A)		(200.0	)
Pro forma debt maturities at November 1, 2017	$	82.2

Cash and cash equivalents at September 30, 2017	$	18.3
Borrowing capacity available on Revolving Credit Facilities at September 30, 2017		1,000.0
Pro forma cash and Revolving Credit Facilities available at October 1, 2017	$	1,018.3

July 2018 Senior Note maturity	$	22.2
February 2019 mortgage debt maturities		96.0
		118.2
Less: Senior Note repayment		(22.2	)
Pro forma debt maturities at June 30, 2018	$	96.0

Cash and cash equivalents at June 30, 2018	$	32.1
Borrowing capacity available on Revolving Credit Facilities at July 2, 2018		925.0
Pro forma cash and Revolving Credit Facilities available at July 2, 2018	$	957.1

	Outstanding at September 30, 2017		At DDR Share
DDR – SAU Retail Fund, LLC^(A)		59.5		11.9
BRE DDR Retail Holdings IV^(A)		34.0		1.7
DDRTC Core Retail Fund, LLC^(B)		185.6		27.8
BRE DDR Retail Holdings III^(B)		606.2		30.3
Total debt maturities through October 2018	$	885.3	$	71.7

	Outstanding at June 30, 2018		At DDR Share
BRE DDR Retail Holdings III^(A)	$	415.3	$	20.8
BRE DDR Retail Holdings IV^(B)		92.1		4.6
DDRTC Core Retail Fund, LLC^(B)		513.5		77.0
DDR Domestic Retail Fund I^(C)		368.4		73.7
Total debt maturities through July 2019	$	1,389.3	$	176.1

	September 30,
	2017		2016
Fixed-rate debt^(A)	$	3.5	$	4.0
Variable-rate debt		0.5		1.0
	$	4.0	$	5.0

2.1		Separation and Distribution Agreement, dated July 1, 2018, by and between DDR Corp. and Retail Value Inc.

3.1		Third Amended and Restated Articles of Incorporation of the Company, as amended, effective May 18, 2018

3.2		Amended and Restated Code of Regulations of the Company

4.1		~~Twenty-first Supplemental Indenture, dated as of August 16, 2017, by and between the Company and U.S. Bank National Association (as successor~~Waiver to ~~U.S. Bank Trust National Association (as successor to National City Bank))~~

~~4.2~~		Second Amended and Restated Credit Agreement, dated as of ~~September 13, 2017,~~June 28, 2018, among DDR Corp., DDR PR Ventures LLC, S.E., the lenders party thereto and JPMorgan Chase Bank, N.A., as administrative agent²

10.1		External Management Agreement, dated July 1, 2018, by and between Retail Value Inc. and DDR Asset Management LLC

10.2		Form of Performance-Based Restricted Share Units Adjustment Memorandum²

31.1		Certification of principal executive officer pursuant to Rule 13a-14(a) of the Securities Exchange Act of 1934²

31.2		Certification of principal financial officer pursuant to Rule 13a-14(a) of the Securities Exchange Act of 1934²

32.1		Certification of chief executive officer pursuant to Rule 13a-14(b) of the Securities Exchange Act of 1934 and 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of this report pursuant to the Sarbanes-Oxley Act of 2002 ¹²

32.2		Certification of chief financial officer pursuant to Rule 13a-14(b) of the Securities Exchange Act of 1934 and 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of this report pursuant to the Sarbanes-Oxley Act of 2002¹²

101.INS		XBRL Instance Document²

101.SCH		XBRL Taxonomy Extension Schema Document²

101.CAL		XBRL Taxonomy Extension Calculation Linkbase Document²

101.DEF		XBRL Taxonomy Extension Definition Linkbase Document²

101.LAB		XBRL Taxonomy Extension Label Linkbase Document²

101.PRE		XBRL Taxonomy Extension Presentation Linkbase Document²

Large accelerated filer

Accelerated filer

Non-accelerated filer

☐ (Do not check if a smaller reporting company)

Smaller reporting company

Emerging growth company