SITE Centers (SITC) 8-K Developers Diversified Realty Corporation

Exhibit 99.1

DEVELOPERS DIVERSIFIED REALTY CORPORATION

For Immediate Release:

Contact:	Scott A. Wolstein	Michelle M. Dawson
	Chairman and	Vice President of Investor Relations
	Chief Executive Officer	216-755-5455
	216-755-5500

DEVELOPERS DIVERSIFIED REALTY REPORTS AN INCREASE OF 27.3%
IN DILUTED FFO PER SHARE FOR THE QUARTER ENDED JUNE 30, 2007

CLEVELAND, OHIO, July 24, 2007- Developers Diversified Realty Corporation (NYSE: DDR), the nation’s leading owner, manager and developer of market-dominant community centers, today reported operating results for the second quarter ended June 30, 2007.

• Funds From Operations (“FFO”) per diluted share increased 27.3% to $1.26 and net income per diluted share increased 50.8% to $0.89 for the three-months ended June 30, 2007, as compared to the prior year.

• Executed leases during the second quarter totaled approximately 1.9 million square feet, including 140 new leases and 264 renewals.

• On a cash basis, base rental rates increased 30.3% on new leases, 7.4% on renewals and 11.3% overall.

• Core portfolio leased percentage at June 30, 2007 was 95.9%.

• Same store net operating income (“NOI”) for the six-month period increased 2.2% over the prior-year comparable period.

Scott Wolstein, DDR’s Chairman and Chief Executive Officer stated, “We’re pleased to announce this quarter’s results, which reflect the consistent performance of our core portfolio and the successful execution of several strategic transactions. Now, five months after closing the IRRETI acquisition, we have completed all of the major objectives we previously announced to the market, which, in turn, have accomplished our primary goal: to complete a large, accretive transaction in a manner that improves portfolio quality and overall leverage ratios.”

Financial Results:
For the three-months ended June 30, 2007, FFO, a widely accepted measure of a Real Estate Investment Trust (“REIT”) performance, on a per share basis was $1.26 (diluted) and $1.27 (basic) as compared to $0.99 (basic and diluted) for the same period in the previous year. FFO available to common shareholders was $159.3 million, as compared to $109.8 million for the three-months ended June 30, 2007 and 2006, respectively, an increase of 45.1%. Net income available to common shareholders was $111.4 million or $0.89 per share (diluted) and $0.90 per share (basic) for the three-months ended June 30, 2007, as compared to $64.9 million, or $0.59 per share (diluted and basic) for the prior-year comparable period. The increase in net income and FFO for the three-months ended June 30, 2007, is primarily related to an increase in the gain on sale of assets including those recognized through the Company’s merchant build program, promoted income of approximately $13.6 million earned from one of the Company’s joint ventures in the second quarter and a full quarter of operating results from the merger with Inland Retail Real Estate Trust, Inc. (“IRRETI”).

For the six-months ended June 30, 2007, FFO, on a per share basis was $2.18 (diluted) and $2.19 (basic) as compared to $1.76 (diluted) and $1.77 (basic) for the same period in the previous year, an increase of 23.9% on a diluted basis. FFO available to common shareholders was $265.4 million, as compared to $196.0 million for the six-months ended June 30, 2007 and 2006, respectively, an increase of 35.4%. Net income available to common shareholders was $160.2 million or $1.33 per share (diluted) and $1.34 per share (basic) for the six-months ended June 30, 2007, as compared to $100.9 million, or $0.92 per share (diluted and basic) for the prior-year comparable period. The increase in net income for the six-months ended June 30, 2007, is primarily related to the merger with IRRETI, the release of certain valuation reserves and an increase in the gain on sale of assets including those recognized through the Company’s merchant build program and promoted income of approximately $13.6 million earned from one of the Company’s joint ventures in the second quarter of 2007.

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

Leasing:
The following results from the second quarter ended June 30, 2007, highlight continued strong leasing activity throughout the portfolio:

• Executed 140 new leases aggregating 713,318 square feet and 264 renewals aggregating 1,172,733 square feet.

• On a cash basis, rental rates on new leases increased 30.3% and rental rates on renewals increased 7.4%. Overall, rental rates for new leases and renewals increased 11.3%.

• Total portfolio average annualized base rent per occupied square foot as of June 30, 2007 was $12.46, as compared to $11.62 at June 30, 2006.

• Portfolio leased rate was 96.0% as of June 30, 2007 as compared to 96.2% at June 30, 2006.

The Company currently estimates its total annual recurring capital expenditures, including tenant improvements and tenant allowances, to be approximately $24.0 million ($0.21 psf of owned GLA) in 2007. This figure includes aggregate expenditures anticipated at properties held in joint ventures.

Strategic Real Estate Transactions:

DDR Domestic Retail Fund I
In the second quarter of 2007, the Company formed DDR Domestic Retail Fund I (“the Fund”), a sponsored, fully-seeded commingled fund. The Fund acquired 63 shopping center assets aggregating 8.3 million square feet (“the Portfolio”) from the Company and a joint venture for approximately $1.5 billion. The Portfolio is comprised of 54 assets recently acquired by the Company through its acquisition of IRRETI, seven assets formerly held in a joint venture with Kuwait Financial Centre (“KFC I”), and two assets from the Company’s wholly-owned portfolio. The Company recognized a non-FFO gain of approximately $9.6 million, net of its 20% retained interest, from the sale of the two wholly-owned assets. The KFC I joint venture recorded a gain of approximately $90.2 million. The Company’s proportionate share of approximately $18.0 million of the joint venture gain was deferred as the Company retained an effective 20% ownership interest in these assets. The Company remains responsible for all day-to-day operations of the properties and receives fees for asset management and property management, leasing, construction management and ancillary income in addition to a promoted interest. Due to the sale of the assets from the KFC I joint venture, the Company recognized a promote of approximately $13.6 million, which is included in the Company’s second quarter 2007 net income and FFO.

Dividend Capital Total Realty Trust Joint Venture
In the second quarter of 2007, the Company formed a $161.5 million joint venture with Dividend Capital Total Realty Trust. The Company contributed three recently developed assets aggregating 0.7 million of Company-owned square feet to the joint venture. The Company recorded an after-tax merchant build gain, net of its 10% retained interest, of approximately $45.6 million, which is included in the Company’s second quarter FFO. The Company retained an effective 10% ownership and receives asset management and property management fees, plus fees on leasing and ancillary income. In addition, the Company will receive a promoted interest above a 9.5% leveraged threshold return.

Dispositions:
In addition to the sale of assets to the two joint ventures discussed above, the Company sold 52 shopping center properties, aggregating 5.4 million square feet for approximately $448.7 million and recognized a non-FFO gain of approximately $10.8 million in the second quarter of 2007. An additional 11 assets associated with this transaction are expected to sell in the third quarter of 2007 for approximately $154.3 million.

Common Share Repurchase Program:
During the second quarter of 2007, the Company’s Board of Directors authorized a common share repurchase program. Under the terms of the program, the Company may purchase up to a maximum value of $500 million of its common shares during the next two years.

Development (Wholly-Owned and Consolidated Joint Ventures):
The Company currently has the following shopping center projects under construction.

Wholly-Owned and Consolidated Joint Venture Developments
Currently in Progress

					Substantial
	Total		Gross Cost		Completion
Property	GLA		($Millions)		Date	Description
Ukiah (Mendocino), California		669,406	$	113.5	2009	Community Center
Miami, Florida		644,999		155.7	2006-2009	Mixed Use
Tampa (Brandon), Florida		370,700		70.7	2008	Community Center
Douglasville, Georgia		124,200		22.4	2008	Community Center
Nampa, Idaho		829,975		147.0	2007-2008	Community Center
Chicago (McHenry), Illinois		454,378		73.3	2007	Community Center
Boston, Massachusetts (Seabrook, New Hampshire)		461,825		74.5	2009	Community Center
Elmira (Horseheads), New York		668,619		77.1	2007-2008	Community Center
Raleigh (Apex), North Carolina (Promenade)		87,780		20.2	2008	Community Center
Raleigh (Apex), North Carolina Beaver Creek Crossing, (Phase II)		283,217		52.3	2009	Community Center
San Antonio (Stone Oak), Texas		665,229		93.4	2007	Hybrid Center
Total		5,260,328	$	900.1

The Company anticipates commencing construction in 2007 on the following additional shopping centers:

Wholly-Owned and Consolidated Joint Venture Developments
to Commence Construction in 2007

					Substantial
	Total		Gross Cost		Completion
Property	GLA_		($Millions)		Date	Description
Homestead, Florida		398,759	$	95.2	2008	Community Center
Tampa (Wesley Chapel), Florida		95,408		17.4	2008	Community Center
Atlanta (Union City), Georgia		200,000		47.5	2008	Community Center
Gulfport, Mississippi		703,379		91.2	2008	Hybrid Center
Isabela, Puerto Rico		290,085		57.1	2009	Community Center
Austin (Kyle), Texas		778,415		97.2	2009	Community Center
Total		2,466,046	$	405.6

At June 30, 2007, $525.5 million of costs were incurred in relation to the Company’s eleven development projects under construction and the six that will commence construction in 2007.

In addition to these developments, the Company has identified several additional development opportunities reflecting an aggregate estimated cost of over $1 billion. While there are no assurances any of these projects will move forward, they provide a source of potential development projects over the next several years. As of June 30, 2007, the projected unleveraged GAAP return, on the Company’s aggregate development and redevelopment pipeline is approximately 10%.

Development (Joint Ventures):
The Company’s joint ventures have the following shopping center projects under construction. At June 30, 2007, $159.5 million of costs had been incurred in relation to these development projects.

Joint Venture Developments
Currently in Progress

		DDR's
	Joint	Effective					Gross		Substantial
	Venture	Ownership			Total		Cost		Completion
Property	Partner	Percentage			GLA		($Millions)		Date	Description
Kansas City (Merriam), Kansas	Coventry II		20.0	%		280,516	$	71.0	2008	Community Center
Detroit (Bloomfield Hills), Michigan	Coventry II		10.0	%		882,197		335.6	2008-2009	Lifestyle Center
Dallas (Allen), Texas	Coventry II		10.0	%		521,413		167.6	2008	Lifestyle Center
Manaus, Brazil	Sonae Sierra		47.2	%		477,630		95.7	2009	Enclosed Mall
						2,161,756	$	669.9

The Company’s joint venture with Sonae Sierra anticipates commencing construction on a 350,000 square foot enclosed mall in Uberlandia, Brazil, with an estimated gross cost of $69.9 million.

Redevelopments and Expansions (Wholly-Owned and Consolidated Joint Ventures):
The Company is currently expanding/redeveloping the following shopping centers at a projected aggregate gross cost of approximately $93.9 million. At June 30, 2007, approximately $20.1 million of costs had been incurred in relation to these projects.

Wholly-Owned and Consolidated Joint Venture Redevelopments and Expansions
Currently in Progress

Property	Description
Gadsden, Alabama	Redevelop 64,400 sf retail building
Crystal River, Florida	Construct 24,000 sf of retail shops
Miami (Plantation), Florida	Redevelop shopping center to include Kohl’s and additional junior anchors
Tallahassee, Florida	Redevelop former Lowe’s Home Improvement space
Ottumwa, Iowa	Redevelop former Wal-Mart space
Chesterfield, Michigan	Construct 25,400 sf of small shop space and retail space
Gaylord, Michigan	Redevelop former Wal-Mart space
Hamilton, New Jersey	Construct 22,500 sf of junior anchor space and retail shops
Olean, New York	Wal-Mart expansion and tenant relocation
Akron (Stow), Ohio	Redevelop former K-Mart space and develop new outparcels
Milwaukee (Brookfield),
Wisconsin	Construct 15,000 sf multi-tenant outparcel building

The Company anticipates commencing construction on the following redevelopment and expansion projects in the next year:

Wholly-Owned and Consolidated Joint Venture Redevelopments and Expansions
to Commence Construction in 2007

Property	Description
Louisville, Kentucky	Construct 6,000 sf multi-tenant outparcel building for retail shops
Gulfport, Mississippi	Construct bank pad, retail shops and restaurants on 4.4 acre outparcel
Dayton (Huber Heights), Ohio	Construct 45,000 sf junior anchor
Buffalo (Amherst), New York	Construct 5,300 sf multi-tenant outparcel building for retail shops
Fayetteville, North Carolina	Reconfigure 18,000 sf of in-line space; construct multi-tenant outparcel building
Allentown, Pennsylvania	Construct 20,000 sf multi-tenant outparcel building for retail shops
Hatillo, PR	Construct 21,000 sf of junior anchor space
San Juan (Bayamon), PR (Plaza Del Sol)	Construct 144,000 sf of junior anchor space and retail shops
San Juan, PR	Redemise shop space and construct a food court
Dallas (McKinney), Texas	Construct 87,757 sf of retail shops and outparcels

Redevelopments and Expansions (Joint Ventures):
The Company’s joint ventures are currently expanding/redeveloping the following shopping centers at a projected gross cost of $567.6 million, which includes the initial acquisition costs for the Coventry II redevelopment projects. At June 30, 2007, approximately $448.5 million of costs had been incurred in relation to these projects.

Joint Venture Redevelopment and Expansion Projects
Currently in Progress

		DDR’s
		Effective
	Joint Venture	Ownership
Property	Partner	Percentage			Description
Phoenix, Arizona	Coventry II		20.0	%	Large-scale redevelopment of enclosed mall to open-air format
Buena Park, California	Coventry II		20.0	%	Large-Scale redevelopment of enclosed mall to open-air format
Los Angeles (Lancaster), California	Prudential Real Estate Investors		20.0	%	Relocate Wal-Mart and redevelop former Wal-Mart space
Benton Harbor, Michigan	Coventry II		20.0	%	Construct 89,000 sf of anchor space and retail shops
Kansas City, Missouri Cincinnati, Ohio	Coventry II Coventry II/Thor Equities		20.0 18.0	% %	Relocate retail shops and retenant former retail shop space Redevelop former JC Penney space
Cleveland (Macedonia), Ohio	Ohio State Teachers Retirement		50.0	%	Retenant former retail shop space

     The Company’s joint ventures anticipate commencing expansion/redevelopment projects at the following shopping centers:

Joint Venture Redevelopment and Expansion Projects
to Commence Construction in 2007

		DDR’s
		Effective
	Joint Venture	Ownership
Property	Partner	Percentage			Description
Chicago (Deer Park), Illinois	Prudential Real Estate Investors		25.75	%	Retenant former retail shop space with junior anchor and construct 13,500 sf multi-tenant outparcel building
Seattle (Kirkland), Washington	Coventry II		20.00	%	Large-scale redevelopment of shopping center
Sao Paulo (Sao Bernado de Campo), Brazil	Sonae Sierra		47.20	%	Expansion and renovation of the existing mall to accommodate theater tenant and redesign of the food court

Financings:

In April 2007, the Company redeemed all outstanding shares of its 8.6% Class F Cumulative Redeemable Preferred Shares, aggregating $150 million, at a redemption price of $25.10750 per Class F Preferred Share (the sum of $25.00 per share and a dividend per share of $0.10750 prorated to the redemption date). The Company recorded a non-cash charge to net income available to common shareholders of approximately $5.4 million in the second quarter of 2007 relating to original issuance costs.

During the second quarter of 2007, the Company received net cash proceeds of approximately $1.6 billion relating to the sale of assets to joint ventures and third parties. These proceeds were used to repay the balance outstanding on the Inland bridge financing of $550 million, redemption of $484 million, net, of preferred operating partnership units and the balance of $0.6 billion was used to repay revolving credit facility borrowings.

Developers Diversified currently owns and manages over 735 retail operating and development properties in 45 states, plus Puerto Rico and Brazil, totaling 155.5 million square feet. Developers Diversified Realty is a self-administered and self-managed real estate investment trust (REIT) operating as a fully integrated real estate company which acquires, develops, leases and manages shopping centers.

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

Developers Diversified Realty Corporation considers portions of this information to be forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21 E of the Securities Exchange Act of 1934, both as amended, with respect to the Company’s expectation for future periods. Although the Company believes that the expectations reflected in such forward-looking statements are based upon reasonable assumptions, it can give no assurance that its expectations will be achieved. For this purpose, any statements contained herein that are not historical fact may be deemed to be forward-looking statements. There are a number of important factors that could cause the results of the Company to differ materially from those indicated by such forward-looking statements, including, among other factors, local conditions such as oversupply of space or a reduction in demand for real estate in the area, competition from other available space, dependence on rental income from real property, the loss of a major tenant, constructing properties or

expansions that produce a desired yield on investment or inability to enter into definitive agreements with regard to our financing arrangements or our failure to satisfy conditions to the completion of these arrangements. For more details on the risk factors, please refer to the Company’s Form on 10-K as of December 31, 2006.

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

	Three-Month Period						Six-Month Period
	Ended June 30,						Ended June 30,
	2007			2006			2007			2006
Revenues:
Minimum rents (A)	$	177,342		$	132,972		$	328,626		$	264,441
Percentage and overage rents (A)		1,593			1,600			3,607			3,663
Recoveries from tenants		56,461			42,145			102,587			82,035
Ancillary and other property income		4,290			4,464			8,995			8,743
Management, development and other fee income		11,996			6,596			21,078			12,955
Other (B)		3,746			1,250			11,455			8,208
		255,428			189,027			476,348			380,045
Expenses:
Operating and maintenance		35,092			27,259			62,720			51,695
Real estate taxes		30,771			21,694			56,952			43,458
General and administrative (C)		19,161			15,422			40,678			30,832
Depreciation and amortization		54,772			45,217			107,225			89,563
		139,796			109,592			267,575			215,548
Other income (expense):
Interest income		2,500			2,849			6,182			5,955
Interest expense		(74,462	)		(52,812	)		(135,452	)		(103,790	)
Other (expense) income (D)		(225	)		1,167			(450	)		667
		(72,187	)		(48,796	)		(129,720	)		(97,168	)
Income before equity in net income of joint ventures, minority equity interests, income tax benefit of taxable REIT subsidiaries and franchise taxes, discontinued operations and gain on disposition of real estate		43,445			30,639			79,053			67,329
Equity in net income of joint ventures (E)		21,602			4,619			27,883			10,088
Minority equity interests (F)		(7,876	)		(1,947	)		(13,715	)		(4,221	)
Income tax benefit of taxable REIT subsidiaries and franchise taxes (G)		709			2,793			15,770			2,360
Income from continuing operations		57,880			36,104			108,991			75,556
Income from discontinued operations (H)		15,545			2,694			20,960			5,744
Income before gain on disposition of real estate		73,425			38,798			129,951			81,300
Gain on disposition of real estate, net of tax		54,012			39,937			60,022			47,162
Net income	$	127,437		$	78,735		$	189,973		$	128,462
Net income, applicable to common shareholders	$	111,429		$	64,943		$	160,173		$	100,878
Funds From Operations (“FFO”):
Net income applicable to common shareholders	$	111,429		$	64,943		$	160,173		$	100,878
Depreciation and amortization of real estate investments		54,136			45,804			106,584			90,836
Equity in net income of joint ventures (E)		(21,602	)		(4,619	)		(27,883	)		(10,088	)
Joint ventures’ FFO (E)		31,313			9,342			44,872			19,281
Minority equity interests (OP Units) (F)		569			534			1,138			1,068
Gain on disposition of depreciable real estate, net of tax		(16,587	)		(6,220	)		(19,443	)		(5,999	)
FFO available to common shareholders		159,258			109,784			265,441			195,976
Preferred dividends		16,008			13,792			29,800			27,584
FFO	$	175,266		$	123,576		$	295,241		$	223,560
Per share data:
Earnings per common share
Basic	$	0.90		$	0.59		$	1.34		$	0.92
Diluted	$	0.89		$	0.59		$	1.33		$	0.92
Dividends Declared	$	0.66		$	0.59		$	1.32		$	1.18
Funds From Operations — Basic (I)	$	1.27		$	0.99		$	2.19		$	1.77
Funds From Operations — Diluted (I)	$	1.26		$	0.99		$	2.18		$	1.76
Basic — average shares outstanding (I)		124,455			109,393			119,681			109,127
Diluted — average shares outstanding (I)		125,926			110,866			121,317			109,735

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

(A)

Increases in base and percentage rental revenues for the six-month period ended June 30, 2007, as compared to 2006, aggregated $65.3 million consisting of $4.6 million related to leasing of core portfolio properties (an increase of 1.9% from 2006), $60.4 million from the merger with IRRETI, $1.9 million from the acquisition of assets, $2.9 million related to developments and redevelopments and $0.6 million from an increase in occupancy at the business centers. These amounts were offset by a decrease of $5.1 million due to the disposition of properties in 2006 and 2007. Included in the rental revenues for the six-month periods ended June 30, 2007 and 2006, is approximately $6.5 million and $7.8 million, respectively, of revenue resulting from the recognition of straight-line rents.

(B)

Other income for the three and six-month periods ended June 30, 2007 and 2006 was comprised of the following (in millions):

	Three-Month Period				Six-Month Period
	Ended June 30,				Ended June 30,
	2007		2006		2007		2006
Acquisition fees	$	—	$	—	$	6.3	$	—
Lease termination fees		2.2		0.7		3.5		7.5
Financings fees		1.4		0.4		1.4		0.4
Other miscellaneous		0.1		0.2		0.3		0.3
	$	3.7	$	1.3	$	11.5	$	8.2

(C)

General and administrative expenses include internal leasing salaries, legal salaries and related expenses associated with the releasing of space, which are charged to operations as incurred. For the six-month periods ended June 30, 2007 and 2006, general and administrative expenses were approximately 4.8% and 5.0%, respectively, of total revenues, including joint venture revenues, respectively. For the six-months ended June 30, 2007, the Company recorded a charge of approximately $4.1 million to general and administrative expense in connection with David M. Jacobstein’s departure as President of the Company. Excluding this charge, general and administrative expenses were 4.3% of total revenues for the six-months ended June 30, 2007. In addition, the Company incurred certain one time integration costs in connection with the IRRETI acquisition that have aggregated approximately $1.7 million for the six-month period ended June 30, 2007.

(D)

Other income/expense primarily relates to abandoned acquisition and development project costs. In 2006, the Company received proceeds of approximately $1.3 million from a litigation settlement.

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

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

	Three-Month Period						Six-Month Period
	Ended June 30,						Ended June 30,
	2007			2006			2007			2006
Revenues from operations (a)	$	201,986		$	103,545		$	347,143		$	204,705
Operating expense		65,359			34,040			113,925			66,649
Depreciation and amortization of real estate investments		49,210			20,236			79,653			39,848
Interest expense		66,505			30,124			112,137			58,499
		181,074			84,400			305,715			164,996
Income from operations before tax expense, gain on disposition of real estate and discontinued operations		20,912			19,145			41,428			39,709
Income tax expense		(2,297	)		—			(4,545	)		—
Gain on disposition of real estate		93,089			6			93,089			42
(Loss) income from discontinued operations, net of tax		(149	)		(164	)		(178	)		221
Gain (loss) on disposition of discontinued operations, net of tax		1,080			(1,762	)		738			(1,550	)
Net income	$	112,635		$	17,225		$	130,532		$	38,422
DDR Ownership interests (b)	$	21,747		$	4,462		$	28,257		$	9,777
FFO from joint ventures are summarized as follows:
Net income	$	112,635		$	17,225		$	130,532		$	38,422
(Gain) loss on disposition of real estate, including discontinued operations		(91,441	)		11			(91,441	)		(19	)
Depreciation and amortization of real estate investments		49,215			20,586			79,837			40,612
	$	70,409		$	37,822		$	118,928		$	79,015
DDR Ownership interests (b)	$	31,313		$	9,342		$	44,872		$	19,281
DDR Partnership distributions received, net (c)	$	55,476		$	11,656		$	65,694		$	19,680

(a)	Revenues for the three-month periods ended June 30, 2007 and 2006 included approximately $2.1 million and $1.1 million, respectively, resulting from the recognition of straight-line rents of which the Company’s proportionate share is $0.3 million and $0.2 million, respectively. Revenues for the six-month periods ended June 30, 2007 and 2006 included approximately $3.7 million and $2.5 million, respectively, resulting from the recognition of straight-line rents of which the Company’s proportionate share is $0.5 million for each period.
(b)	The Company’s share of joint venture net income was decreased by $0.1 million and increased by $0.1 million for the three-month periods ended June 30, 2007 and 2006, respectively. The Company’s share of joint venture net income was decreased by $0.4 million and increased by $0.2 million for the six-month periods ended June 30, 2007 and 2006, respectively. These adjustments reflect basis differences impacting amortization and depreciation and gain on dispositions. During the three month period ended June 30, 2007, the Company received $13.6 million of promoted income relating to the sale of assets from the DDR Markaz Joint Venture which is included in the Company’s proportionate share of net income and FFO.
	At June 30, 2007 and 2006, the Company owned joint venture interests, excluding consolidated joint ventures, in 269 and 111 shopping center properties, respectively. In addition, at June 30, 2007, the Company owned 46 shopping center sites formerly owned by Service Merchandise through its 20% owned joint venture with Coventry II. At June 30, 2006, 52 of these Service Merchandise sites were formerly owned through an approximate 25% owned joint venture.
(c)	Distributions may include funds received from asset sales and refinancings in addition to ongoing operating distributions.

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

(F) Minority equity interests are comprised of the following:

	Three-Month Period				Six-Month Period
	Ended June 30,				Ended June 30,
	2007		2006		2007		2006
Minority interests	$	1,399	$	1,413	$	2,887	$	3,153
Operating partnership units		569		534		1,138		1,068
Preferred operating partnership units		5,908		—		9,690		—
	$	7,876	$	1,947	$	13,715	$	4,221

	The preferred operating partnership units were redeemed in June 2007.
(G)	During the first quarter of 2007, the Company released to income approximately $15.0 million of previously established valuation allowances against certain deferred tax assets as management had determined, due to several factors, that it is more likely than not that the deferred tax asset will be realized. The release was primarily due to the Company’s increased use of its taxable REIT subsidiaries relating to its merchant building program.
(H)	The operating results relating to assets classified as discontinued operations are summarized as follows:

	Three-Month Period				Six-Month Period
	Ended June 30,				Ended June 30,
	2007		2006		2007		2006
Revenues	$	12,585	$	11,095	$	22,625	$	22,603
Expenses:
Operating		2,925		2,646		5,525		5,500
Interest, net		2,773		3,003		5,474		6,010
Depreciation		2,157		2,752		4,300		5,349
Total expenses		7,855		8,401		15,299		16,859
Income before gain on disposition of real estate		4,730		2,694		7,326		5,744
Gain on disposition of real estate		10,815		—		13,634		—
Net income	$	15,545	$	2,694	$	20,960	$	5,744

(I) For purposes of computing FFO per share (basic), the weighted average shares outstanding were adjusted to reflect the conversion of approximately 0.9 million of Operating Partnership Units (OP Units) outstanding at June 30, 2007 and 2006, into 0.9 million common shares of the Company for both of the three-month periods ended June 30, 2007 and 2006, and 0.9 and 1.2 million for the six-month periods ended June 30, 2007 and 2006, respectively, on the weighted average basis. The weighted average diluted shares and OP Units outstanding, for purposes of computing FFO, were approximately 126.4 million and 111.1 million for the three-month periods ended June 30, 2007 and 2006, respectively, and 121.6 and 111.2 million for the six-month periods ended June 30, 2007 and 2006, respectively.

DEVELOPERS DIVERSIFIED REALTY CORPORATION
Financial Highlights
(In thousands)

Selected Balance Sheet Data:

	June 30, 2007		(A)	December 31, 2006		(A)
Assets:
Real estate and rental property:
Land	$	2,118,350		$	1,768,702
Buildings		5,955,489			5,023,665
Fixtures and tenant improvements		226,201			196,275
Construction in progress		508,341			453,493
		8,808,381			7,442,135
Less accumulated depreciation		(925,976	)		(861,266	)
Real estate, net		7,882,405			6,580,869
Cash		46,019			28,378
Investments in and advances to joint ventures		636,731			291,685
Notes receivable		17,328			18,161
Receivables, including straight-line rent, net		186,494			152,161
Assets held for sale		—			5,324
Other assets, net		179,567			103,175
	$	8,948,544		$	7,179,753
Liabilities:
Indebtedness:
Revolving credit facilities	$	380,000		$	297,500
Unsecured debt		2,718,788			2,218,020
Mortgage and other secured debt		2,020,248			1,733,292
		5,119,036			4,248,812
Dividends payable		89,451			71,269
Other liabilities		259,553			241,556
		5,468,040			4,561,637
Minority interests		116,076			121,933
Shareholders’ equity		3,364,428			2,496,183
	$	8,948,544		$	7,179,753

(A) Amounts include the consolidation of Mervyns, a 50% owned joint venture, which includes $405.8 million of real estate assets at June 30, 2007 and December 31, 2006, $258.5 million of mortgage debt at June 30, 2007 and December 31, 2006, and $76.1 million and $77.6 million of minority interest at June 30, 2007 and December 31, 2006, respectively.

DEVELOPERS DIVERSIFIED REALTY CORPORATION
Financial Highlights
(in thousands)

Selected Balance Sheet Data (Continued):

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

	June 30, 2007			December 31, 2006
Land	$	2,276,869		$	933,916
Buildings		6,158,253			2,788,863
Fixtures and tenant improvements		109,283			59,166
Construction in progress		222,017			157,762
		8,766,422			3,939,707
Accumulated depreciation		(311,610	)		(247,012	)
Real estate, net		8,454,812			3,692,695
Receivables, including straight-line rent, net		92,014			75,024
Leasehold interests		14,831			15,195
Other assets		365,453			132,984
	$	8,927,110		$	3,915,898
Mortgage debt (a)	$	5,463,316		$	2,495,080
Notes and accrued interest payable to DDR		7,059			4,960
Other liabilities		163,579			94,648
		5,633,954			2,594,688
Accumulated equity		3,293,156			1,321,210
	$	8,927,110		$	3,915,898

(a) The Company’s proportionate share of joint venture debt aggregated approximately $1,021.1 million and $525.6 million at June 30, 2007 and December 31, 2006, respectively.