10-K405 1 b317285_10k405.txt ANNUAL REPORT UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-K (Mark One) [X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 [NO FEE REQUIRED] For the fiscal year ended December 31, 2001 OR [ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 [NO FEE REQUIRED] For the transition period from to --------------- ----------------- Commission file number 1-10899 Kimco Realty Corporation ------------------------------------------------------------------------------- (Exact name of registrant as specified in its charter) Maryland 13-2744380 ------------------------ ------------------------------------- (State of incorporation) (I.R.S. Employer Identification No.) 3333 New Hyde Park Road, New Hyde Park, NY 11042-0020 ------------------------------------------------------------------------------- (Address of principal executive offices) Zip Code Registrant's telephone number, including area code (516)869-9000 Securities registered pursuant to Section 12(b) of the Act: Name of each exchange on Title of each class which registered ------------------- ---------------- Common Stock, par value $.01 per share. New York Stock Exchange Depositary Shares, each representing one- tenth of a share of 7-3/4% Class A Cumulative Redeemable Preferred Stock, par value $1.00 per share. New York Stock Exchange Depositary Shares, each representing one- tenth of a share of 8-1/2% Class B Cumulative Redeemable Preferred Stock, par value $1.00 per share. New York Stock Exchange Depositary Shares, each representing one- tenth of a share of 8-3/8% Class C Cumulative Redeemable Preferred Stock, par value $1.00 per share. New York Stock Exchange Depositary Shares, each representing one- tenth of a share of 7-1/2% Class D Cumulative Convertible Preferred Stock, par value $1.00 per share. New York Stock Exchange Securities registered pursuant to Section 12(g) of the Act: None ------------------------------------------------------------------------------- Indicate by check mark whether the Registrant (i) 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 (ii) has been subject to such filing requirements for the past 90 days. Yes X No Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of Registrant's knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. X The aggregate market value of the voting stock held by non-affiliates of the Registrant was approximately $2.7 billion based upon the closing price on the New York Stock Exchange for such stock on February 1, 2002. (APPLICABLE ONLY TO CORPORATE REGISTRANTS) Indicate the number of shares outstanding of each of the Registrant's classes of common stock, as of the latest practicable date. 104,306,463 shares as of February 1, 2002. Page 1 of 151 DOCUMENTS INCORPORATED BY REFERENCE Part III incorporates certain information by reference to the Registrant's definitive proxy statement to be filed with respect to the Annual Meeting of Stockholders expected to be held on May 14, 2002. Index to Exhibits begins on page 41. 2 TABLE OF CONTENTS Form 10-K Report Item No. Page -------- ---- PART I 1. Business . . . . . . . . . . . . . . . . . . . . . . . . . . 4 2. Properties . . . . . . . . . . . . . . . . . . . . . . . . . 15 3. Legal Proceedings. . . . . . . . . . . . . . . . . . . . . . 17 4. Submission of Matters to a Vote of Security Holders . . . . 17 Executive Officers and other Significant Employees of the Registrant . . . . . . . . . . . . . . . . . . . . 25 PART II 5. Market for the Registrant's Common Equity and Related Shareholder Matters . . . . . . . . . . . . . 27 6. Selected Financial Data . . . . . . . . . . . . . . . . . . 28 7. Management's Discussion and Analysis of Financial Condition and Results of Operations . . . . . . . . . . . 30 7A. Quantitative and Qualitative Disclosures About Market Risk. . 38 8. Financial Statements and Supplementary Data . . . . . . . . 38 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure . . . . . . . . . . . 38 PART III 10. Directors and Executive Officers of the Registrant . . . . . 39 11. Executive Compensation . . . . . . . . . . . . . . . . . . . 39 12. Security Ownership of Certain Beneficial Owners and Management . . . . . . . . . . . . . . . . . . . . . . . . 39 13. Certain Relationships and Related Transactions . . . . . . . 39 PART IV 14. Exhibits, Financial Statements, Schedules and Reports on Form 8-K . . . . . . . . . . . . . . . . . . . . . . . . . 40 3 PART I FORWARD-LOOKING STATEMENTS This annual report on Form 10-K, together with other statements and information publicly disseminated by Kimco Realty Corporation (the "Company" or "Kimco") contains certain forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. The Company intends such forward-looking statements to be covered by the safe harbor provisions for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995 and include this statement for purposes of complying with these safe harbor provisions. Forward-looking statements, which are based on certain assumptions and describe the Company's future plans, strategies and expectations, are generally identifiable by use of the words "believe," "expect," "intend," "anticipate," "estimate," "project" or similar expressions. You should not rely on forward-looking statements since they involve known and unknown risks, uncertainties and other factors which are, in some cases, beyond the Company's control and which could materially affect actual results, performances or achievements. Factors which may cause actual results to differ materially from current expectations include, but are not limited to, (i) general economic and local real estate conditions, (ii) the inability of major tenants to continue paying their rent obligations due to bankruptcy, insolvency or general downturn in their business, (iii) financing risks, such as the inability to obtain equity or debt financing on favorable terms, (iv) changes in governmental laws and regulations, (v) the level and volatility of interest rates (vi) the availability of suitable acquisition opportunities and (vii) increases in operating costs. Accordingly, there is no assurance that the Company's expectations will be realized. SHARE SPLIT As of December 21, 2001, the Company effected a three-for-two split (the "Stock Split") of the Company's common stock in the form of a stock dividend paid to stockholders of record on December 10, 2001. All common share and per common share data included in this annual report on Form 10-K and the accompanying Consolidated Financial Statements and Notes thereto have been adjusted to reflect this Stock Split. Item 1. Business General Kimco Realty Corporation, a Maryland corporation, is one of the nation's largest owners and operators of neighborhood and community shopping centers. The Company is a self-administered real estate investment trust ("REIT") and manages its properties through present management, which has owned and operated neighborhood and community shopping centers for over 35 years. The Company has not engaged, nor does it expect to retain, any REIT advisors in connection with the operation of its properties. As of February 1, 2002, the Company's portfolio was comprised of 520 property interests including 448 neighborhood and community shopping center properties, two regional malls, 49 retail store leases, 17 ground-up development projects, three parcels of undeveloped land and one distribution center totaling approximately 71.1 million square feet of leasable space located in 42 states and Canada. The Company's portfolio includes 64 shopping center properties comprising approximately 12.0 million square feet (the "KIR Portfolio") relating to the Kimco Income REIT ("KIR"), a joint venture arrangement with institutional investors established for the purpose of investing in high quality retail properties financed primarily with individual non-recourse mortgage debt (See Recent Developments - Kimco Income REIT ("KIR") and Note 3 of the Notes to Consolidated Financial Statements included in this annual report on Form 10-K). The Company believes its portfolio of neighborhood and community shopping center properties is the largest (measured by gross leasable area ("GLA")) currently held by any publicly-traded REIT. The Company's executive offices are located at 3333 New Hyde Park Road, New Hyde Park, New York 11042-0020 and its telephone number is (516) 869-9000. Unless the context indicates otherwise, the term the "Company" as used herein is intended to include subsidiaries of the Company. History The Company began operations through its predecessor, The Kimco Corporation, which was organized in 1966 upon the contribution of several shopping center properties owned by its principal stockholders. In 1973, these principals formed the Company as a Delaware corporation, and in 1985, the operations of The Kimco Corporation were merged into the Company. The Company completed its initial public stock offering (the "IPO") in November 1991, and commencing with its taxable year which began January 1, 1992, elected to qualify as a REIT in accordance with Sections 856 through 860 of the Internal Revenue Code of 1986, as amended (the "Code"). In 1994 the Company reorganized as a Maryland corporation. 4 The Company's growth through its first fifteen years resulted primarily from the ground-up development and construction of its shopping centers. By 1981, the Company had assembled a portfolio of 77 properties that provided an established source of income and positioned the Company for an expansion of its asset base. At that time, the Company revised its growth strategy to focus on the acquisition of existing shopping centers and creating value through the redevelopment and re-tenanting of those properties. As a result of this strategy, substantially all of the operating shopping centers added to the Company's portfolio since 1981 have been through the acquisition of existing shopping centers. During 1998, the Company, through a merger transaction, completed the acquisition of The Price REIT, Inc., a Maryland corporation, (the "Price REIT"). Prior to the merger, Price REIT was a self-administered and self-managed equity REIT that was primarily focused on the acquisition, development, management and redevelopment of large retail community shopping center properties concentrated in the western part of the United States. In connection with the merger, the Company acquired interests in 43 properties, located in 17 states. With the completion of the Price REIT merger, the Company expanded its presence in certain western states including California, Arizona and Washington. In addition, Price REIT had strong ground-up development capabilities. These development capabilities, coupled with the Company's own construction management expertise, provides the Company, on a selective basis, the ability to pursue ground-up development opportunities. Also, during 1998, the Company formed KIR, an entity in which the Company held a 99.99% limited partnership interest. KIR was established for the purpose of investing in high quality properties financed primarily with individual non-recourse mortgages. The Company believes that these properties are appropriate for financing with greater leverage than the Company traditionally uses. At the time of formation, the Company contributed 19 properties to KIR, each encumbered by an individual non-recourse mortgage. During 1999, KIR sold a significant interest in the partnership to institutional investors. As of December 31, 2001, the Company holds a 43.3% non-controlling limited partnership interest in KIR and accounts for its investment in KIR under the equity method of accounting (See Recent Developments - Kimco Income REIT ("KIR") and Note 3 of the Notes to Consolidated Financial Statements included in this annual report on Form 10-K). In connection with the Tax Relief Extension Act of 1999 (the "RMA") which became effective January 1, 2001, the Company is now permitted to participate in activities which it was precluded from previously in order to maintain its qualification as a REIT, so long as these activities are conducted in entities which elect to be treated as taxable subsidiaries under the Code, subject to certain limitations. As such, the Company, through its taxable REIT subsidiaries, is engaged in various retail real estate related opportunities, including (i) merchant building through its wholly owned taxable REIT subsidiary, Kimco Developers, Inc. ("KDI"), which is primarily engaged in the ground-up development of neighborhood and community shopping centers and subsequent sale thereof upon completion (see Recent Developments - Kimco Developers, Inc. ("KDI")), (ii) retail real estate advisory and disposition services which primarily focus on leasing and disposition strategies for real estate property interests of distressed retailers and (iii) acting as an agent or principal in connection with tax deferred exchange transactions. The Company will consider other investments through taxable REIT subsidiaries should suitable opportunities arise. Investment and Operating Strategy The Company's investment objective has been to increase cash flow, current income and, consequently, the value of its existing portfolio of properties, and to seek continued growth through (i) the strategic re-tenanting, renovation and expansion of its existing centers and (ii) the selective acquisition of established income-producing real estate properties and properties requiring significant re-tenanting and redevelopment, primarily in neighborhood and community shopping centers in geographic regions in which the Company presently operates. The Company will consider investments in other real estate sectors and in geographic markets where it does not presently operate should suitable opportunities arise. The Company's neighborhood and community shopping center properties are designed to attract local area customers and typically are anchored by a discount department store, a supermarket or drugstore tenant offering day-to-day necessities rather than high-priced luxury items. The Company may either purchase or lease income-producing properties in the future, and may also participate with other entities in property ownership through partnerships, joint ventures or similar types of co-ownership. Equity investments may be subject to existing mortgage financing and/or other indebtedness. Financing or other indebtedness may be incurred simultaneously or subsequently in connection with such investments. Any such financing or indebtedness will have priority over the Company's equity interest in such property. The Company may make loans to joint ventures in which it may or may not participate in the future. 5 While the Company has historically held its properties for long-term investment, and accordingly has placed strong emphasis on its ongoing program of regular maintenance, periodic renovation and capital improvement, it is possible that properties in the portfolio may be sold, in whole or in part, as circumstances warrant, subject to REIT qualification rules. The Company seeks to reduce its operating and leasing risks through diversification achieved by the geographic distribution of its properties and a large tenant base. At December 31, 2001, the Company's single largest neighborhood and community shopping center, excluding the KIR Portfolio, accounted for only 1.5% of the Company's annualized base rental revenues and only 0.9% of the Company's total shopping center GLA. At December 31, 2001, the Company's five largest tenants, excluding the KIR Portfolio, include Kmart Corporation (see Subsequent Events - Kmart Bankruptcy), Kohl's, The Home Depot, TJX Companies, and Wal-Mart, which represent approximately 12.6%, 3.1%, 2.5%, 1.9% and 1.7%, respectively, of the Company's annualized base rental revenues. In connection with the RMA, which became effective January 1, 2001, the Company has expanded its investment and operating strategy to include new retail real estate related opportunities which the Company was precluded from previously in order to maintain its qualification as a REIT. As such, the Company, has established a merchant building business through its KDI subsidiary. KDI makes selective acquisitions of land parcels for the ground-up development of neighborhood and community shopping centers and subsequent sale thereof upon completion. Additionally, the Company has developed a retail property solutions business which specializes in real estate advisory and disposition services of real estate controlled by distressed and/or bankrupt retailers. These services may include assistance with inventory and fixture liquidation in connection with going-out-of-business sales. The Company may participate with other entities in providing these advisory services through partnerships, joint ventures or other co-ownership arrangements. The Company, as a regular part of its investment strategy, will continue to actively seek investments for its taxable REIT subsidiaries. The Company emphasizes equity real estate investments including preferred equity investments, but may, at its discretion, invest in mortgages, other real estate interests and other investments. The mortgages in which the Company may invest may be either first mortgages, junior mortgages or other mortgage-related securities. The Company may legally invest in the securities of other issuers, for the purpose, among others, of exercising control over such entities, subject to the gross income and asset tests necessary for REIT qualification. The Company may, on a selective basis, acquire all or substantially all securities or assets of other REITs or similar entities where such investments would be consistent with the Company's investment policies. In any event, the Company does not intend that its investments in securities will require it to register as an "investment company" under the Investment Company Act of 1940. The Company has authority to offer shares of capital stock or other senior securities in exchange for property and to repurchase or otherwise reacquire its common stock or any other securities and may engage in such activities in the future. At all times, the Company intends to make investments in such a manner as to be consistent with the requirements of the Code, to qualify as a REIT unless, because of circumstances or changes in the Code (or in Treasury Regulations), the Board of Directors determines that it is no longer in the best interests of the Company to qualify as a REIT. The Company's policies with respect to the aforementioned activities may be reviewed and modified from time to time by the Company's Board of Directors without the vote of the Company's stockholders. Capital Strategy and Resources The Company intends to operate with and maintain a conservative capital structure with a level of debt to total market capitalization of approximately 50% or less. As of December 31, 2001, the Company's level of debt to total market capitalization was 27%. In addition, the Company intends to maintain strong debt service coverage and fixed charge coverage ratios as part of its commitment to maintaining its investment-grade debt ratings. As of December 31, 2001, the Company had a debt service coverage ratio of 3.9 times and a fixed charge coverage ratio of 3.2 times. Since the completion of the Company's IPO in 1991, the Company has utilized the public debt and equity markets as its principal source of capital for its expansion needs. Since the IPO, the Company has completed additional offerings of its public unsecured debt and equity, raising in the aggregate over $2.3 billion for the purposes of, among other things, repaying indebtedness, acquiring interests in neighborhood and community shopping centers, funding ground-up development projects, expanding and improving properties in the portfolio and other investments. 6 The Company has a $250.0 million, unsecured revolving credit facility, which is scheduled to expire in August 2003. This credit facility, which replaced the Company's $215.0 million unsecured revolving credit facility, has made available funds to both finance the purchase of properties and meet any short-term working capital requirements. As of December 31, 2001 there were no borrowings outstanding under this unsecured revolving credit facility. The Company also has a $200.0 million medium-term notes program (the "MTN program") pursuant to which it may from time to time offer for sale its senior unsecured debt for any general corporate purposes, including (i) funding specific liquidity requirements in its business, including property acquisitions, development and redevelopment costs, and (ii) managing the Company's debt maturities. (See Note 7 of the Notes to Consolidated Financial Statements included in this annual report on Form 10-K.) In addition to the public debt and equity markets as capital sources, the Company may, from time to time, obtain mortgage financing on selected properties. As of December 31, 2001, the Company had over 380 unencumbered property interests in its portfolio representing over 87% of the Company's net operating income. It is management's intention that the Company continually have access to the capital resources necessary to expand and develop its business. Accordingly, the Company may seek to obtain funds through additional equity offerings, unsecured debt financings and/or mortgage financings in a manner consistent with its intention to operate with a conservative debt capitalization policy. During May 2001, the Company filed a shelf registration on Form S-3 for up to $750.0 million of debt securities, preferred stock, depositary shares, common stock and common stock warrants. As of February 1, 2002, the Company had approximately $625.7 million available for issuance under this shelf registration statement. The Company anticipates that cash flows from operations will continue to provide adequate capital to fund its operating and administrative expenses, regular debt service obligations and the payment of dividends in accordance with REIT requirements in both the short-term and long-term. In addition, the Company anticipates that cash on hand, free cash flow generated by the operating business, availability under its revolving credit facility, issuance of equity and public debt, as well as other debt and equity alternatives, will provide the necessary capital required by the Company. Cash flow from operations increased to $287.4 million for the year ended December 31, 2001, as compared to $250.5 million for the year ended December 31, 2000. Competition As one of the original participants in the growth of the shopping center industry and one of the nation's largest owners and operators of neighborhood and community shopping centers, the Company has established close relationships with a large number of major national and regional retailers and maintains a broad network of industry contacts. Management is associated with and/or actively participates in many shopping center and REIT industry organizations. Notwithstanding these relationships, there are numerous regional and local commercial developers, real estate companies, financial institutions and other investors who compete with the Company for the acquisition of properties and in seeking tenants who will lease space in the Company's properties. Inflation and Other Business Issues Many of the Company's leases contain provisions designed to mitigate the adverse impact of inflation. Such provisions include clauses enabling the Company to receive payment of additional rent calculated as a percentage of tenants' gross sales above predetermined thresholds ("Percentage Rents"), which generally increase as prices rise, and/or escalation clauses, which generally increase rental rates during the terms of the leases. Such escalation clauses include 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, which permits the Company to seek to increase rents upon renewal to market rates. Most of the Company's leases require the tenant to pay an allocable share of operating expenses, including common area maintenance costs, real estate taxes and insurance, thereby reducing the Company's exposure to increases in costs and operating expenses resulting from inflation. The Company periodically evaluates its exposure to short-term interest rates and will, from time to time, enter into interest rate protection agreements which mitigate, but do not eliminate, the effect of changes in interest rates on its floating-rate debt. Risk Factors Set forth below are the material risks associated with the purchase and ownership of the securities of the Company. As an owner of real estate, the Company is subject to certain business risks arising in connection with the underlying real estate, including, among other factors, (i)defaults of major tenants due to bankruptcy, insolvency and/or general downturn in their business which could reduce the Company's cash flow, (ii) major tenants not renewing their leases as they expire or renew at lower rental rates which could reduce the Company's cash flow, (iii) changes in retailing trends which could reduce the need for shopping centers, (iv) potential liability for future or unknown environmental issues, (v) changes in real estate and zoning laws and competition from other real estate owners which could make it difficult to lease or develop properties, and (vi) the inability to acquire capital, either in the form of debt or equity, on satisfactory terms to fund the Company's cash requirements. The success of the Company also depends upon trends in the economy, including, but not limited to, interest rates, income tax laws, governmental regulations and legislation and population trends. Additionally, the Company is subject to complex regulations related to its status as a REIT and would be adversely affected if it failed to maintain its qualification as a REIT. 7 Operating Practices Nearly all operating functions, including leasing, legal, construction, data processing, maintenance, finance and accounting, are administered by the Company from its executive offices in New Hyde Park, New York. The Company believes it is critical to have a management presence in its principal areas of operation and accordingly, the Company maintains regional offices in Margate, Orlando and Tampa, Florida; Philadelphia, Pennsylvania; Dallas, Texas; Dayton and Cleveland, Ohio; Lisle and Chicago, Illinois; Charlotte, North Carolina; Phoenix and Tucson, Arizona; Jonesboro, Georgia; Woodbridge, Virginia and Los Angeles, San Francisco and Sacramento, California. A total of 305 persons are employed at the Company's executive and regional offices. The Company's regional offices are generally staffed by a manager and the support personnel necessary to both function as local representatives for leasing and promotional purposes and to complement the corporate office efforts to ensure that property inspection and maintenance objectives are achieved. The regional offices are important in reducing the time necessary to respond to the needs of the Company's tenants. Leasing and maintenance personnel from the corporate office also conduct regular inspections of each shopping center. The Company also employs a total of 50 persons at several of its larger properties in order to more effectively administer its maintenance and security responsibilities. Management Information Systems Virtually all operating activities are supported by a sophisticated computer software system designed to provide management with operating data necessary to make informed business decisions on a timely basis. These systems are continually expanded and enhanced by the Company and reflect a commitment to quality management and tenant relations. The Company has integrated an advanced mid-range computer with personal computer technology, creating a management information system that facilitates the development of property cash flow budgets, forecasts and related management information. Qualification as a REIT The Company has elected, commencing with its taxable year which began January 1, 1992, to qualify as a REIT under the Code. If, as the Company believes, it is organized and operates in such a manner so as to qualify and remain qualified as a REIT under the Code, the Company generally will not be subject to federal income tax, provided that distributions to its stockholders equal at least the amount of its REIT taxable income as defined under the Code. In connection with the RMA, which became effective January 1, 2001, the Company is now permitted to participate in activities which the Company was precluded from previously in order to maintain its qualification as a REIT, so long as these activities are conducted in entities which elect to be treated as taxable subsidiaries under the Code, subject to certain limitations. The primary activities conducted by the Company in its taxable REIT subsidiaries during 2001 include, but are not limited to, (i) the ground-up development of shopping center properties and subsequent sale thereof upon completion (see Recent Developments - Kimco Developers, Inc. ("KDI")) and (ii) real estate advisory and disposition services provided in connection with the asset designation rights obtained from the bankrupt estate of Montgomery Ward (see Recent Developments - Other Real Estate Joint Venture Investments - Montgomery Ward Asset Designation Rights). As such, the Company was subject to federal income tax on the income from these activities. Recent Developments Stock Split - On October 24, 2001, the Company's Board of Directors declared a three-for-two split of the Company's common stock which was effected in the form of a stock dividend paid on December 21, 2001 to stockholders of record on December 10, 2001. The Board, in taking this action, indicated a desire to increase the number of shares outstanding and thereby broaden the base of investors in the Company's common stock. All share and per share data included in this annual report on Form 10-K and the accompanying Consolidated Financial Statements and Notes thereto have been adjusted to reflect this Stock Split. 8 Operating Properties - Acquisitions - During the year ended December 31, 2001, the Company and its affiliates acquired interests in three operating properties located in three states, comprising approximately 0.4 million square feet of GLA for an aggregate purchase price of approximately $21.1 million as follows: In May 2001, the Company acquired Wakefield Commons shopping center located in Raleigh, NC for a purchase price of approximately $6.2 million. This shopping center is anchored by Kroger Corporation and contains approximately 84,000 square feet of GLA. In August 2001, the Company acquired Merchants Walk shopping center located in Lakeland, FL for a purchase price of approximately $12.9 million. This shopping center is anchored by Ross Stores and Steinmart and contains approximately 230,000 square feet of GLA. In December 2001, the Company acquired Bangor shopping center located in Bangor, ME for a purchase price of approximately $2.0 million. This shopping center is anchored by Burlington Coat Factory and has approximately 86,000 square feet of GLA. The Company, as a regular part of its business operations, will continue to actively seek properties for acquisition, which have below market-rate leases or other cash flow growth potential. Dispositions - During 2001, the Company, in separate transactions, disposed of three operating properties (including the sale of a property to KIR - see Recent Developments - Kimco Income REIT ("KIR")) and a portion of another operating property. Cash proceeds from these dispositions aggregated approximately $46.7 million, which resulted in a net gain of approximately $3.0 million. Details of these transactions are as follows: During January 2001, the Company disposed of an operating property located in Jennings, MO. Cash proceeds from this disposition totaled approximately $2.2 million, which approximated net book value. During May 2001, the Company disposed of an operating property located in Elyria, OH. Cash proceeds from this disposition totaling approximately $5.8 million, together with an additional $7.1 million cash investment, were used to acquire an exchange shopping center property located in Lakeland, FL during August 2001. The sale of this property resulted in a gain of approximately $3.0 million. Additionally, during May 2001, the Company disposed of a portion of an operating property located in Sanford, FL. Cash proceeds from this disposition totaled approximately $4.3 million which approximated net book value. During June 2001, the Company sold an operating property located in Bridgewater, NJ to KIR for a purchase price of $37.0 million which approximated net book value. KIR paid the Company $34.4 million in cash and the Company contributed the remaining $2.6 million of equity in the property in satisfaction of its equity contribution commitment. Redevelopments - The Company has an ongoing program to reformat and re-tenant its properties to maintain or enhance its competitive position in the marketplace. During 2001, the Company substantially completed the redevelopment and re-tenanting of various operating properties. The Company expended approximately $29.5 million in connection with these major redevelopments and re-tenanting projects during 2001. The Company is currently involved in redeveloping several other shopping centers in the existing portfolio. The Company anticipates its capital commitment toward these and other redevelopment projects will be approximately $30.0 million to $50.0 million during 2002. Kimco Developers, Inc. ("KDI") - Effective January 1, 2001, the Company has elected taxable REIT subsidiary status for its wholly-owned subsidiary, KDI. KDI is primarily engaged in the ground-up development of neighborhood and community shopping centers and the subsequent sale thereof upon completion. As of December 31, 2001, KDI had in progress 15 ground-up development projects located in seven states. These projects had substantial pre-leasing prior to the commencement of construction. During 2001, KDI expended approximately $119.4 million in connection with the purchase of land and construction costs related to these projects. These projects are currently proceeding on schedule and in line with the Company's budgeted costs. The Company anticipates its capital commitment toward these and other development projects will be approximately $140.0 million to $160.0 million during 2002. The proceeds from the sales of the completed ground-up development projects during 2002 are expected to be sufficient to fund these anticipated capital requirements. 9 KDI Acquisitions - During the year ended December 31, 2001, KDI acquired eight land parcels for the ground-up development of shopping centers and subsequent sales thereof upon completion for an aggregate purchase price of approximately $40.2 million, including the assumption of approximately $5.9 million of construction financing encumbering one of the properties, as follows: During January 2001, KDI acquired a land parcel located in Columbus, OH for the development of the Orange Township shopping center for a purchase price of approximately $5.4 million. Additionally, during January 2001, KDI acquired a 50% interest in a land parcel in Raleigh, NC for the development of Wakefield Crossings shopping center for a purchase price of approximately $4.0 million. During March 2001, KDI acquired a 50% interest in a land parcel located in Tampa, FL for the development of Northwoods Center for a purchase price of approximately $2.7 million. During May 2001, KDI acquired a 65% interest in a land parcel located in Houston, TX for the development of Tomball Crossings shopping center for a purchase price of approximately $2.1 million. Additionally, during May 2001, KDI acquired a 60% interest in a land parcel located in Raleigh, NC for the development of Wakefield Commons Phase II for a purchase price of approximately $6.5 million including the assumption of approximately $5.9 million in construction financing encumbering the property. During July 2001, KDI acquired a land parcel located in Hillsborough, NJ for the development of Hillsborough Promenade for a purchase price of approximately $15.0 million. KDI paid $3.7 million in cash and provided an $11.3 million letter of credit as collateral for the balance of the purchase price which is due in April 2002. Additionally, during July 2001, KDI acquired a 50% interest in a land parcel located in Fountain Hills, AZ for the development of Four Peaks Plaza for a purchase price of approximately $2.9 million. During November 2001, KDI acquired a 50% interest in a land parcel located in Gilbert Fiesta, AZ for the development of Gilbert Fiesta shopping center for a purchase price of approximately $1.6 million. KDI Dispositions - During the year ended December 31, 2001, KDI sold two of its recently completed projects and five out-parcels for approximately $61.3 million, which resulted in net gains of approximately $8.1 million after provision for income taxes, as follows: During January 2001, KDI disposed of Casa Paloma shopping center, a completed ground-up development project located in Chandler, AZ, for approximately $32.5 million, which resulted in a net gain of approximately $3.5 million after provision for income taxes. During August 2001, KDI disposed of an out-parcel located in Cedar Hills, TX, for an aggregate purchase price of approximately $0.6 million, which resulted in a net gain of approximately $0.3 million after provision for income taxes. During May 2001, KDI disposed of an out-parcel at Home Depot Plaza located in Houston, TX for approximately $1.1 million. A second out-parcel was disposed of in August 2001 for approximately $2.7 million. The remainder of the project was sold in October 2001 for approximately $20.6 million. These sales resulted in net gains of approximately $3.2 million after provision for income taxes. During December 2001, KDI sold four out-parcels located in San Antonio, TX for approximately $3.8 million, which resulted in net gains of approximately $1.1 million after provision for income taxes. Kimco Select Investments ("Kimco Select") - Kimco Select, a New York general partnership, was formed in 1997 to provide the Company, through its 90% ownership interest, the opportunity to make investments outside of its core neighborhood and community shopping center business. Kimco Select is managed by David M. Samber, formerly President and Chief Operating Officer of the Company who owns the remaining 10% interest in Kimco Select. Although potential investments may be largely retail-focused, Kimco Select may invest in other asset categories. Kimco Select will focus on investments where the intrinsic value in the underlying assets may provide potentially superior returns relative to the inherent risk. These investments may be in the form of direct ownership of real estate, mortgage loans, public and private debt and equity securities that Kimco Select believes are undervalued, unoccupied properties, properties leased to troubled or bankrupt tenants and other assets. 10 During 2001, Kimco Select (i) acquired certain public bonds for an aggregate purchase price of approximately $7.1 million, (ii) sold certain public bonds for an aggregate sales price of approximately $14.7 million resulting in net gains of approximately $2.0 million and (iii) sold an interest in a mortgage receivable for approximately $6.0 million which resulted in a net gain of approximately $0.7 million. During December 2001, the Company purchased the remaining 10% interest in Kimco Select from Mr. Samber, who continues to serve as the Chief Executive Officer of Kimco Select, for an aggregate purchase price of approximately $1.7 million. Kimco Select also has investments in (i) a joint venture which owns an office building in Miami, FL, (ii) a joint venture which has participating interests in first and second mortgages, (iii) nine retail properties, and (iv) four properties which are anchored by ambulatory care facilities with complementary retail space. As of December 31, 2001, Kimco Select had total investments of approximately $98.0 million. Kimco Income REIT ("KIR") - During 1998, the Company formed KIR, an entity that was established for the purpose of investing in high quality real estate properties financed primarily with individual non-recourse mortgages. These properties include, but are not limited to, fully developed properties with strong, stable cash flows from credit-worthy retailers with long-term leases. The Company originally held a 99.99% limited partnership interest in KIR. Subsequent to KIR's formation, the Company sold a significant portion of its original interest to an institutional investor and admitted three other limited partners. As of December 31, 2001, KIR has received total capital commitments of $569.0 million, of which the Company subscribed for $247.0 million and the four limited partners subscribed for $322.0 million. The Company has a 43.3% non-controlling limited partnership interest in KIR and accounts for its investment under the equity method of accounting. During 2001, the limited partners in KIR contributed $71.0 million towards their respective capital commitments, including $30.8 million by the Company, of which $2.6 million was in the form of a real estate contribution. As of December 31, 2001, KIR had unfunded capital commitments of $184.0 million, including $79.7 million from the Company. During 2001, KIR purchased 12 shopping center properties (including one property from the Company for $37.0 million), in separate transactions, aggregating approximately 2.9 million square feet of GLA for approximately $349.0 million, including the assumption of approximately $40.2 million of mortgage debt encumbering two of the properties. During December 2001, KIR disposed of a shopping center property in Lake Mary, FL for an aggregate sales price of approximately $2.4 million. This disposition resulted in a gain of approximately $0.5 million. Proceeds from this sale will be used to acquire an exchange shopping center property. As of December 31, 2001, the KIR portfolio was comprised of 64 shopping center properties aggregating approximately 12.0 million square feet of GLA located in 20 states. During 2001, KIR obtained individual non-recourse, non-cross collateralized fixed-rate mortgages aggregating approximately $280.0 million on 14 of its previously unencumbered properties with terms ranging from 7 to 10 years and rates ranging from 6.76% to 7.69% per annum. The net proceeds were used to finance the acquisition of various shopping center properties. KIR maintains a $100.0 million secured revolving credit facility with a syndicate of banks, which is scheduled to expire in November 2002. This facility is collateralized by the unfunded subscriptions of certain partners, including those of the Company. Under the terms of the facility, funds may be borrowed for general corporate purposes including the acquisition of institutional quality properties. Borrowings under the facility accrue interest at LIBOR plus 0.80%. As of December 31, 2001, there was $15.0 million outstanding under this facility. 11 Other Real Estate Joint Venture Investments - Montgomery Ward Asset Designation Rights - During March 2001, the Company, through a taxable REIT subsidiary, formed a joint venture (the "Ward Venture") in which the Company has a 50% interest, for purposes of acquiring asset designation rights for substantially all of the real estate property interests of the bankrupt estate of Montgomery Ward LLC and its affiliates. These asset designation rights have provided the Ward Venture the ability to direct the ultimate disposition of the 315 fee and leasehold interests held by the bankrupt estate. The asset designation rights expire in August 2002 for the leasehold positions and December 2004 for the fee owned locations. During the marketing period, the Ward Venture will be responsible for all carrying costs associated with the properties until the property is designated to a user. As of December 31, 2001, the Ward Venture has completed transactions on 271 properties, and the Company has recognized net profits of approximately $20.9 million after provision for income taxes for the year ended December 31, 2001. The pre-tax profits from the Ward Venture of approximately $34.6 million are included in the Consolidated Statements of Income in the caption Equity in income of other real estate joint ventures, net for the year ended December 31, 2001. RioCan Investments - During September 2001, the Company purchased 2.5 million units of RioCan Real Estate Investment Trust ("RioCan", Canada's largest publicly traded REIT measured by GLA). The Company paid a price of $10.50 per unit in Canadian Dollars ("CAD"), or approximately CAD $26.3 million (approximately USD $16.9 million). In connection with this transaction, the Company was also granted 2.5 million warrants of RioCan. Each warrant entitles the Company to obtain one trust unit of RioCan at any time during the next 5 years at an exercise price of CAD $11.02. During October 2001, the Company formed a joint venture (the "RioCan Venture") with RioCan in which the Company has a 50% interest, to acquire retail properties and development projects in Canada. The acquisition and development projects are to be sourced and managed by RioCan and are subject to review and approval by a joint oversight committee consisting of RioCan management and the Company's management personnel. During October 2001, the RioCan Venture acquired a portfolio of four shopping center properties for an aggregate purchase price of CAD $170.0 million (approximately USD $107.8 million), including the assumption of approximately CAD $108.5 million (approximately USD $68.8 million) in mortgage debt. The Company has committed a total equity investment of up to CAD $150.0 million for the acquisition of retail properties and development projects. Capital contributions will only be required as suitable opportunities arise and are agreed to by the Company and RioCan. Kimco / G.E. Joint Venture - During October 2001, the Company formed a joint venture (the "GE Venture") with GE Capital Real Estate ("GECRE"), in which the Company has a 20% interest. The purpose of this joint venture is to acquire established, high-growth potential retail properties in the United States. The initial funding for this venture will consist of an equity pool of up to $250.0 million, provided $50.0 million by the Company and $200.0 million by GECRE. The Company will be responsible for the day-to-day management, redevelopment and leasing of the properties acquired and will be paid fees for those services. In addition, the Company will earn fees related to the acquisition and disposition of properties by the GE Venture. Capital contributions will only be required as suitable opportunities arise and are agreed to by the Company and GECRE. Currently, the GE Venture is evaluating certain portfolios of properties for potential acquisition. Other - During March 2001, the Company exercised its option to acquire a 50% interest in a joint venture from KC Holdings, Inc. ("KC Holdings"), an entity formed in connection with the Company's IPO in November 1991. This joint venture consists of three shopping center properties located in Buffalo, NY, comprising approximately 395,000 square feet of GLA. The joint venture was acquired for an aggregate option price of approximately $3.5 million, paid approximately $2.7 million in cash and $0.8 million in shares of the Company's common stock (29,638 shares valued at $27.67 per share). The members of the Company's Board of Directors who are not also shareholders of KC Holdings, unanimously approved the Company's purchase of this joint venture investment. 12 Other Investments - During June 2001, the Company purchased from an unaffiliated partner the remaining 20% interest in a property located in Skokie, IL for an aggregate purchase price of approximately $0.8 million. Also during June 2001, the Company purchased from an unaffiliated partner the remaining 10% interest in a property located in Smithtown, NY for an aggregate purchase price of approximately $2.5 million. These properties are now 100% owned by the Company. During August 2001, the Company, through a joint venture in which the Company has a 50% interest, provided $27.5 million of debtor-in-possession financing to Ames Department Stores, Inc. ("Ames"), a retailer in bankruptcy. This loan is secured by the real estate owned by Ames. Financing Transactions - Mortgage Debt During 2001, the Company obtained four individual non-recourse, non-cross collateralized fixed-rate mortgage loans of which three of the shopping centers are anchored by Kmart Corporation (see Subsequent Events - Kmart Bankruptcy), providing aggregate proceeds to the Company of approximately $51.2 million. These ten-year loans mature in 2011 and have effective interest rates ranging from 7.31% to 7.64% per annum. Credit Facility The Company maintains a $250.0 million unsecured revolving credit facility (the "Credit Facility") with a group of banks. The Credit Facility is scheduled to expire in August 2003. Under the terms of the Credit Facility, funds may be borrowed for general corporate purposes, including (i) funding property acquisitions, (ii) funding development and redevelopment costs and (iii) funding any short-term working capital requirements. Interest on borrowings under the Credit Facility accrues at a spread (currently 0.55%) to LIBOR, which fluctuates in accordance with changes in the Company's senior debt ratings. As part of the Credit Facility, the Company has a competitive bid option where the Company may auction up to $100.0 million of its requested borrowings to the bank group. This competitive bid option provides the Company the opportunity to obtain pricing below the currently stated spread to LIBOR of 0.55%. As of December 31, 2001 there were no borrowings outstanding under the Credit Facility. Equity During March 2001, the Company issued 29,638 shares of common stock at $27.67 per share in connection with the exercise of its option to acquire a 50% interest in a joint venture consisting of three shopping center properties from KC Holdings (See Notes 9 and 14 of the Notes to Consolidated Financial Statements included in this annual report on Form 10-K). During November 2001, the Company completed a primary public stock offering of 2,250,000 shares of common stock priced at $32.85 per share. The net proceeds from this sale of common stock, totaling approximately $70.1 million (after related transaction costs of $3.8 million) will be used primarily to invest equity capital in the GE Venture and for additional equity capital in KIR. During December 2001, the Company completed a primary public stock offering of 1,500,000 shares of common stock priced at $33.57 per share. The net proceeds from this sale of common stock, totaling approximately $47.6 million (after related transaction costs of $2.7 million) will be used for general corporate purposes, including (i) the investment of additional equity capital in KIR and (ii) the development, redevelopment and expansion of properties in the Company's portfolio. Additionally, during November 2001, the Company announced the redemption of all outstanding depositary shares of the Company's 7-1/2% Class D Cumulative Convertible Preferred Stock (the "Class D Preferred Stock") in exchange for shares of the Company's common stock. The Board of Directors set January 3, 2002 as the mandatory redemption date on which all outstanding depositary shares of Class D Preferred Stock were redeemed. Holders of the Class D Preferred Stock on the redemption date received 0.93168 shares of the Company's common stock, as adjusted for the Company's three-for-two common stock split, for each depositary share redeemed. During 2001, 3,258,642 depositary shares of the Class D Preferred Stock were voluntarily converted to common stock by the holders. On January 3, 2002, the remaining 923,900 depositary shares of the Class D Preferred Stock were redeemed for common stock by the Company and a final dividend payment of 43.4680 cents per Class D Depositary share was paid on January 15, 2002. During 2001, the Company issued approximately 1.8 million shares of common stock in connection with (i) exercises of common stock options by employees, (ii) stock grants awarded to newly-appointed officers of the Company and (iii) the Company's dividend reinvestment plan. The Company received approximately $37.5 million in connection with these issuances. 13 Hedging Activities During 2001, the Company entered into two foreign currency forward contracts. The Company expects these forward contracts to be highly effective in limiting its exposure to the variability in the fair value of its CAD $56.1 million investments (approximately USD $35.8 million) as it relates to changes in the exchange rate. (See Note 11 of the Notes to Consolidated Financial Statements included in this annual report on Form 10-K.) In November 2001, the Company entered into an interest rate swap agreement on its $100.0 million remarketed reset notes in order to reduce its exposure to fluctuations of interest rates on its floating rate debt. This swap agreement expires in August 2002 and effectively fixed the interest rate at 2.93% per annum. The Company has determined that this swap agreement is highly effective in offsetting future variable interest cash flows related to the Company's debt portfolio. (See Notes 7 and 11 of the Notes to Consolidated Financial Statements included in this annual report on Form 10-K.) KC Holdings To facilitate the Company's November 1991 IPO, 46 shopping center properties and certain other assets, together with indebtedness related thereto, were transferred to subsidiaries of KC Holdings. The Company, although having no ownership interest in KC Holdings or its subsidiary companies, was granted ten-year, fixed-price acquisition options which expired in November 2001 to re-acquire the real estate assets owned by KC Holdings' subsidiaries, subject to any liabilities outstanding with respect to such assets at the time of an option exercise. The acquisition options enabled the Company to obtain any appreciation in the value of these properties over the option exercise prices, while eliminating the Company's interim exposure to leverage and operating risks. As of December 31, 2001, KC Holdings' subsidiaries had conveyed 29 shopping center properties and a 50% interest in a joint venture consisting of three properties back to the Company. Additionally, KC Holdings' subsidiaries disposed of ten additional centers in transactions with unaffiliated third parties. The members of the Company's Board of Directors who are not also shareholders of KC Holdings unanimously approved the purchase of each of the shopping centers that have been re-acquired by the Company from KC Holdings. (See Notes 9 and 14 of the Notes to Consolidated Financial Statements included in this annual report on Form 10-K.) The Company manages three of KC Holdings' remaining four shopping center properties pursuant to a management agreement. KC Holdings' other shopping center property is managed by an unaffiliated joint venture partner. Each of KC Holdings' subsidiaries has agreed with the Company that it will engage in no activities other than in connection with the ownership, maintenance and improvement of the properties that it owns and only to the extent that the Company could engage in such activities without receiving or earning non-qualifying income (in excess of certain limits) under the REIT provisions of the Code or without otherwise impairing the Company's status as a REIT. In addition, KC Holdings has covenanted not to engage in any other real estate activity. The Company has agreed not to make loans to KC Holdings or its subsidiaries. Subsequent Events Kmart Bankruptcy - On January 22, 2002, Kmart Corporation ("Kmart") filed for protection under Chapter 11 of the U.S. Bankruptcy Code. As of the filing date, Kmart occupied 69 locations (excluding the KIR portfolio which includes six Kmart locations), representing 12.6% of the Company's annualized base rental revenues and 13.3% of the Company's total shopping center GLA. As of February 1, 2002, Kmart rejected its lease at 15 locations. These 15 locations represent approximately $16.3 million of annualized base rental revenues comprising approximately 1.6 million square feet of GLA. The average rent per square foot at these locations was $10.43. As adjusted for the 15 leases rejected by Kmart subsequent to December 31, 2001, Kmart now represents 8.7% of annualized base rents and 10.4% of leased GLA. The Company is actively marketing these locations to prospective tenants, however, no assurances can be provided that these locations will be leased in the near term or at comparable rents previously paid by Kmart. The Company will file claims in connection with these rejected leases generally for lost rents equal to three years of rental obligations as well as other amounts related to obligations under the leases. Actual amounts to be received in satisfaction of these claims will be subject to Kmart's final plan of reorganization and the availability of funds to pay creditors such as the Company. On March 8, 2002, Kmart announced it would be closing an additional 284 locations of which 17 of these locations are leased from the Company. The Company had previously encumbered seven of these properties with individual non-recourse mortgage loans. The annualized base rental revenues from these 17 locations is approximately $15.1 million. The annualized interest expense for the seven encumbered properties is approximately $5.6 million. As of the date of this filing of this annual report on Form 10-K, the Company has not been notified directly by Kmart as to the timing of these store closings or whether the leases will be assigned or rejected. Until such time as the leases are rejected in accordance with the bankruptcy proceedings, Kmart remains obligated for payments of rent and operating expenses at these locations and all other remaining locations. 14 Exchange Listings The Company's common stock, Class A Depositary Shares, Class B Depositary Shares, Class C Depositary Shares and Class D Depositary Shares are traded on the NYSE under the trading symbols "KIM", "KIMprA", "KIMprB", "KIMprC" and "KIMprD", respectively. Trading of the Class D Depositary Shares ceased on January 3, 2002 in connection with the Company's mandatory redemption of such shares. Item 2. Properties Real Estate Portfolio As of January 1, 2002 the Company's real estate portfolio was comprised of approximately 71.0 million square feet of GLA in 447 neighborhood and community shopping center properties, two regional malls, 49 retail store leases, three parcels of undeveloped land, one distribution center and 15 projects under development, located in 42 states and Canada. The Company's portfolio includes 64 shopping center properties comprising approximately 12.0 million square feet of GLA relating to the KIR Portfolio. Neighborhood and community shopping centers comprise the primary focus of the Company's current portfolio, representing approximately 98% of the Company's total shopping center GLA. As of January 1, 2002, approximately 90.1% of the Company's neighborhood and community shopping center space (excluding the KIR Portfolio) was leased, and the average annualized base rent per leased square foot of the neighborhood and community shopping center portfolio (excluding the KIR Portfolio) was $8.08. As of January 1, 2002, the KIR Portfolio was 96.7% leased with an average annualized base rent per leased square foot of $11.42. The Company's neighborhood and community shopping center properties, generally owned and operated through subsidiaries or joint ventures, had an average size of approximately 142,000 square feet as of January 1, 2002. The Company generally retains its shopping centers for long-term investment and consequently pursues a program of regular physical maintenance together with major renovations and refurbishing to preserve and increase the value of its properties. These projects usually include renovating existing facades, installing uniform signage, resurfacing parking lots and enhancing parking lot lighting. During 2001, the Company capitalized approximately $6.5 million in connection with these property improvements and expensed to operations approximately $14.5 million. The Company's neighborhood and community shopping centers (including the KIR Portfolio) are usually "anchored" by a national or regional discount department store, supermarket or drugstore. As one of the original participants in the growth of the shopping center industry and one of the nation's largest owners and operators of shopping centers, the Company has established close relationships with a large number of major national and regional retailers. Some of the major national and regional companies that are tenants in the Company's shopping center properties include Kmart Corporation, Kohl's, The Home Depot, TJX Companies, Wal-Mart, Toys R' Us, Office Max, Best Buy and Value City. A substantial portion of the Company's income consists of rent received under long-term leases. Most of the leases provide for the payment of fixed base rentals monthly in advance and for the payment by tenants of an allocable share of the real estate taxes, insurance, utilities and common area maintenance expenses incurred in operating the shopping centers. Although a majority of the leases require the Company to make roof and structural repairs as needed, a number of tenant leases place that responsibility on the tenant, and the Company's standard small store lease provides for roof repairs to be reimbursed by the tenant as part of common area maintenance. The Company's management places a strong emphasis on sound construction and safety at its properties. Approximately 1,652 of the Company's 4,980 leases also contain provisions requiring the payment of additional rent calculated as a percentage of tenants' gross sales above predetermined thresholds. Percentage Rents accounted for approximately 1% of the Company's revenues from rental property for the year ended December 31, 2001. Minimum base rental revenues and operating expense reimbursements accounted for approximately 99% of the Company's total revenues from rental property for the year ended December 31, 2001. The Company's management believes that the base rent per leased square foot for many of the Company's existing leases is generally lower than the prevailing market-rate base rents in the geographic regions where the Company operates, reflecting the potential for future growth. 15 The Company has been able to capitalize on the below market-rate leases in its existing shopping center portfolio to obtain increases in rental revenues through the renewal of leases or strategic re-tenanting of space. For the period January 1, 2001 to December 31, 2001 excluding the effects of 2001 acquisitions and dispositions, the Company increased the average base rent per leased square foot in its portfolio of neighborhood and community shopping centers (excluding the KIR Portfolio) from $7.95 to $8.12, an increase of $0.17 per square foot, which was primarily attributed to general leasing activity within the existing portfolio. The combined effect of the 2001 acquisitions/dispositions decreased the overall rent per leased square foot by $0.04, thus bringing the average rent per leased square foot to $8.08 as of December 31, 2001. The average annual base rent per leased square foot for new leases (excluding the KIR Portfolio) executed in 2001 was $10.25. The Company seeks to reduce its operating and leasing risks through geographic and tenant diversity. No single neighborhood and community shopping center (excluding the KIR Portfolio) accounted for more than 0.9% of the Company's total shopping center GLA or more than 1.5% of total annualized base rental revenues as of December 31, 2001. The Company's five largest tenants (excluding the KIR Portfolio) include Kmart Corporation (see Subsequent Events - Kmart Bankruptcy), Kohl's, The Home Depot, TJX Companies, and Wal-Mart, which represent approximately 12.6%, 3.1%, 2.5%, 1.9% and 1.7%, respectively, of annualized base rental revenues at December 31, 2001. The Company maintains an active leasing and capital improvement program that, combined with the high quality of the locations, has made, in management's opinion, the Company's properties attractive to tenants. The Company's management believes its experience in the real estate industry and its relationships with numerous national and regional tenants gives it an advantage in an industry where ownership is fragmented among a large number of property owners. Retail Store Leases In addition to neighborhood and community shopping centers, as of January 1, 2002, the Company had interests in retail store leases totaling approximately 4.5 million square feet of anchor stores in 49 neighborhood and community shopping centers located in 24 states. As of January 1, 2002, approximately 81.3% of the space in these anchor stores had been sublet to retailers that lease the stores under net lease agreements providing for average annualized base rental payments of $4.19 per square foot. The average annualized base rental payments under the Company's retail store leases to the land owners of such subleased stores is approximately $2.71 per square foot. The average remaining primary term of the retail store leases (and, similarly, the remaining primary terms of the sublease agreements with the tenants currently leasing such space) is approximately 5 years, excluding options to renew the leases for terms which generally range from 5 to 25 years. Ground-Leased Properties The Company has interests in 53 shopping center properties that are subject to long-term ground leases where a third party owns and has leased the underlying land to the Company (or an affiliated joint venture) to construct and/or operate a shopping center. The Company or the joint venture pays rent for the use of the land and generally is responsible for all costs and expenses associated with the building and improvements. At the end of these long-term leases, unless extended, the land together with all improvements revert to the land owner. Ground-Up Development Properties As of January 1, 2002, the Company, through its wholly-owned taxable REIT subsidiary, KDI, has currently in progress 15 ground-up development projects located in seven states which are held for sale upon completion. These projects had substantial pre-leasing prior to the commencement of construction. As of January 1, 2002, the average annual base rent per leased square foot for the KDI portfolio was $11.49 and the average annual base rent per leased square foot for new leases executed in 2001 was $12.73. Undeveloped Land The Company owns certain unimproved land tracts and parcels of land adjacent to certain of its existing shopping centers that are held for possible expansion. At times, should circumstances warrant, the Company may develop or dispose of these parcels. The table on pages 18 to 24 sets forth more specific information with respect to each of the Company's property interests. 16 Item 3. Legal Proceedings The Company is not presently involved in any litigation nor to its knowledge is any litigation threatened against the Company or its subsidiaries that, in management's opinion, would result in any material adverse effect on the Company's ownership, management or operation of its properties, or which is not covered by the Company's liability insurance. Item 4. Submission of Matters to a Vote of Security Holders None. 17

YEAR OWNERSHIP LEASABLE PERCENT DEVELOPED INTEREST/ LAND AREA AREA LEASED LOCATION OR ACQUIRED (EXPIRATION)(2) (ACRES) (SQ. FT.) (1) --------------------------------------------------------------------------------------------- ALABAMA FAIRFIELD 2000 FEE 8.6 86,566 100 HOOVER 1999 FEE 15.5 115,347 100 ARIZONA FOUNTAIN HILLS (4) 2001 FEE/JOINT VENTURE 24.5 - - GILBERT (4) 2001 FEE/JOINT VENTURE 16.7 - - GLENDALE 1998 FEE/JOINT VENTURE 16.5 124,325 100 GLENDALE (8) 1998 FEE 40.5 337,107 95 MESA 1998 FEE 19.8 135,692 93 NORTH PHOENIX 1998 FEE 17.0 228,769 99 PEORIA (4) 2000 FEE/JOINT VENTURE 71.0 41,000 100 PHOENIX 1998 FEE 13.4 143,646 97 PHOENIX 1998 FEE 26.6 328,532 100 PHOENIX 1997 FEE 17.5 124,989 89 TEMPE 1998 FEE/JOINT VENTURE 21.1 381,312 95 TEMPE (5) 1998 FEE/JOINT VENTURE 20.0 - - CALIFORNIA ALHAMBRA 1998 FEE 18.4 200,634 77 ANAHEIM 1995 FEE 1.0 15,396 100 CARMICHAEL 1998 FEE 18.5 212,811 98 CHULA VISTA 1998 FEE 31.3 363,222 73 CORONA 1998 FEE 58.3 475,908 100 COVINA (8) 2000 FEE 25.4 263,699 98 LA MIRADA 1998 FEE 31.2 253,859 84 MONTEBELLO (8) 2000 FEE 20.4 204,169 98 OXNARD (8) 1998 FEE 14.4 171,580 100 SAN DIEGO (8) 2000 FEE 11.2 112,410 100 SAN RAMON (8) 1999 FEE 5.3 42,066 76 SANTA ANA 1998 FEE 12.0 134,400 100 SANTEE 1998 FEE 11.0 103,903 97 STOCKTON 1999 FEE 14.6 146,346 100 TEMECULA (8) 1999 FEE 40.0 341,612 89 TORRANCE (8) 2000 FEE 26.7 266,917 99 COLORADO AURORA 1998 FEE 13.8 145,826 96 AURORA 1998 FEE 9.9 44,170 93 AURORA 1998 FEE 13.9 111,085 98 COLORADO SPRINGS 1998 FEE 10.7 107,310 91 DENVER 1998 FEE 1.5 18,405 100 ENGLEWOOD 1998 FEE 6.5 80,330 37 FT. COLLINS 2000 FEE 11.8 117,862 89 LAKEWOOD 1998 FEE 7.6 82,581 93 CONNECTICUT BRANFORD (8) 2000 FEE 19.1 191,496 94 ENFIELD (8) 2000 FEE 16.2 162,459 100 FARMINGTON 1998 FEE 16.9 184,572 100 HAMDEN 1967 FEE/JOINT VENTURE 7.4 341,502 100 NORTH HAVEN 1998 FEE 31.7 327,069 95 WATERBURY 1993 FEE 13.1 136,153 100 DELAWARE ELSMERE 1979 GROUND LEASE (2076) 17.1 111,600 100 DOVER (3) 1999 FEE/JOINT VENTURE 89.0 - - FLORIDA ALTAMONTE SPRINGS 1998 FEE/JOINT VENTURE 19.4 271,095 84 ALTAMONTE SPRINGS 1995 FEE 5.6 94,193 100 BOCA RATON 1967 FEE 9.9 73,549 95 BOYNTON BEACH (8) 1999 FEE 18.0 192,759 100 BRADENTON 1968 FEE/JOINT VENTURE 6.2 24,700 97 BRADENTON 1998 FEE 19.6 162,997 96 BRANDON (8) 2001 FEE 29.7 143,785 96 CORAL SPRINGS 1994 FEE 5.9 46,497 100 CORAL SPRINGS 1997 FEE 9.8 83,500 100 EAST ORLANDO 1971 FEE 11.6 131,981 75 FT. PIERCE 1970 FEE/JOINT VENTURE 14.8 210,460 97 HOMESTEAD 1972 FEE/JOINT VENTURE 21.0 198,694 94 JACKSONVILLE 1999 FEE 18.6 203,536 100 JENSEN BEACH 1994 FEE 20.7 170,291 92 KEY LARGO (8) 2000 FEE 21.5 207,361 94 KISSIMMEE 1996 FEE 18.4 130,983 96 LAKELAND 2001 FEE 22.9 229,383 92 LARGO 1968 FEE 12.0 149,472 100 LARGO 1992 FEE 29.4 215,916 99 LARGO 1993 FEE 6.6 56,630 81 LAUDERDALE LAKES 1968 FEE/JOINT VENTURE 10.0 112,476 97 LAUDERHILL 1978 FEE 6.8 179,726 82 LEESBURG 1969 GROUND LEASE (2017) 1.3 13,468 100 MARGATE 1993 FEE 34.1 260,896 93 MELBOURNE 1968 GROUND LEASE (2071) 11.5 168,737 97 MELBOURNE 1994 FEE 13.8 131,851 77 MELBOURNE 1998 FEE 13.2 148,003 92 MIAMI 1968 FEE 8.2 104,968 100 MIAMI 1998 FEE/JOINT VENTURE 14.0 162,278 100 MIAMI 1986 FEE 7.8 81,780 97 MIAMI 1995 FEE 5.4 60,804 100 MIAMI 1998 FEE/JOINT VENTURE 0.3 152,800 82 MIAMI 1985 FEE 15.9 92,130 100

MAJOR LEASES ----------------------------------------------------- LEASE OPTION LOCATION TENANT NAME EXPIRATION EXPIRATION --------------------------------------------------------------------------------------- ALABAMA FAIRFIELD TELETECH CUSTOM 2009 2029 HOOVER WAL-MART 2025 2095 ARIZONA FOUNTAIN HILLS (4) GILBERT (4) GLENDALE HOMELIFE (SEARS) 2006 2016 GLENDALE (8) COSTCO 2011 2046 MESA ROSS STORES 2005 NORTH PHOENIX BURLINGTON COAT 2013 2023 PEORIA (4) PHOENIX HOME DEPOT 2020 2050 PHOENIX COSTCO 2006 2041 PHOENIX SAFEWAY 2009 2039 TEMPE HOMEBASE (TJX COMPANIES) 2010 2030 TEMPE (5) CALIFORNIA ALHAMBRA COSTCO 2006 2041 ANAHEIM CARMICHAEL HOME DEPOT 2003 2022 CHULA VISTA COSTCO 2006 2041 CORONA COSTCO 2007 2042 COVINA (8) HOME DEPOT 2004 2034 LA MIRADA TOYS R US 2012 2032 MONTEBELLO (8) SEARS 2012 2062 OXNARD (8) TARGET 2008 2013 SAN DIEGO (8) LUCKY STORES 2012 SAN RAMON (8) SANTA ANA HOME DEPOT 2015 2035 SANTEE OFFICE DEPOT 2006 2021 STOCKTON HOMEBASE (10) TEMECULA (8) KMART 2017 2032 TORRANCE (8) SEARS HOMELIFE 2011 2021 COLORADO AURORA TJ MAXX 2002 2012 AURORA BLOCKBUSTER 2003 AURORA ALBERTSON'S 2007 2043 COLORADO SPRINGS ALBERTSON'S 2004 2034 DENVER SAV-A-LOT 2012 2027 ENGLEWOOD OLD COUNTRY BUFFET 2009 2019 FT. COLLINS KOHLS 2020 2070 LAKEWOOD SAFEWAY 2002 2032 CONNECTICUT BRANFORD (8) KOHLS 2007 2022 ENFIELD (8) KOHLS 2021 2041 FARMINGTON SPORTS AUTHORITY 2018 2063 HAMDEN WAL-MART 2004 2014 NORTH HAVEN HOME DEPOT 2009 2029 WATERBURY WAL-MART 2002 2007 DELAWARE ELSMERE VALUE CITY 2008 2038 DOVER (3) FLORIDA ALTAMONTE SPRINGS JACOBSONS 2021 2051 ALTAMONTE SPRINGS ROOMS TO GO 2002 2000 BOCA RATON WINN DIXIE 2008 2033 BOYNTON BEACH (8) KMART 2006 2056 BRADENTON GRAND CHINA 2009 2014 BRADENTON PUBLIX 2012 2032 BRANDON (8) BED BATH & BEYOND 2005 2015 CORAL SPRINGS LINENS N THINGS 2012 2027 CORAL SPRINGS TJ MAXX 2007 2017 EAST ORLANDO SPORTS AUTHORITY 2010 2020 FT. PIERCE KMART 2006 2016 HOMESTEAD PUBLIX 2014 2034 JACKSONVILLE BURLINGTON COAT 2003 2018 JENSEN BEACH SERVICE MERCHANDISE 2010 2070 KEY LARGO (8) KMART 2014 2064 KISSIMMEE KASH N KARRY 2006 2036 LAKELAND STEIN MART 2006 2026 LARGO WAL-MART 2007 2027 LARGO PUBLIX 2009 2029 LARGO MIDNIGHT RODEO 2006 2011 LAUDERDALE LAKES THINK THRIFT 2002 2012 LAUDERHILL WORLD JEWELRY CENTER II, INC. 2014 2024 LEESBURG MARGATE PUBLIX 2008 2028 MELBOURNE SUBMITTORDER CO 2010 2022 MELBOURNE WINN DIXIE 2002 2027 MELBOURNE SERVICE MERCHANDISE 2005 2035 MIAMI KMART 2009 2029 MIAMI BABIES R US 2006 2021 MIAMI PUBLIX 2009 2029 MIAMI KIDS R US 2016 2021 MIAMI MIAMI PUBLIX 2019 2039

MAJOR LEASES -------------------------------------------------------------------------------- LEASE OPTION LOCATION TENANT NAME EXPIRATION EXPIRATION ------------------------------------------------------------------------------------------------------------ ALABAMA FAIRFIELD HOOVER ARIZONA FOUNTAIN HILLS (4) GILBERT (4) GLENDALE MICHAELS 2003 2018 GLENDALE (8) HOMEBASE (TJX COMPANIES) 2008 2028 MESA HARKINS THEATRE 2005 2025 NORTH PHOENIX ULTIMATE ELECTRONICS 2015 2030 PEORIA (4) PHOENIX JOANN FABRICS 2010 2025 PHOENIX HOMEBASE (TJX COMPANIES) 2009 2029 PHOENIX PIANO WAREHOUSE 2006 2011 TEMPE PETSMART 2011 2031 TEMPE (5) CALIFORNIA ALHAMBRA JOANN FABRICS 2004 2019 ANAHEIM CARMICHAEL SPORTS AUTHORITY 2009 2024 CHULA VISTA HOMEBASE (TJX COMPANIES) 2008 2028 CORONA HOME DEPOT 2010 2029 COVINA (8) STAPLES 2006 2011 LA MIRADA LA FITNESS 2012 2022 MONTEBELLO (8) AMC THEATRES 2012 2032 OXNARD (8) FOOD 4 LESS 2008 SAN DIEGO (8) SPORTMART 2013 SAN RAMON (8) SANTA ANA SANTEE ROSS STORES 2004 2024 STOCKTON OFFICE DEPOT 2005 2015 TEMECULA (8) FOOD 4 LESS 2010 2030 TORRANCE (8) LINENS N THINGS 2010 2020 COLORADO AURORA AURORA AURORA COOMERS CRAFTS 2006 COLORADO SPRINGS EL PASO COUNTY 2005 DENVER ENGLEWOOD FT. COLLINS LAKEWOOD CONNECTICUT BRANFORD (8) SUPER FOODMART 2016 2041 ENFIELD (8) WALDBAUMS 2014 2034 FARMINGTON LINENS N THINGS 2016 2036 HAMDEN BON-TON 2012 2022 NORTH HAVEN BJ'S 2006 2041 WATERBURY STOP & SHOP 2013 2043 DELAWARE ELSMERE DOVER (3) FLORIDA ALTAMONTE SPRINGS ALTAMONTE THEATRE 2006 2016 ALTAMONTE SPRINGS THOMASVILLE HOME 2011 2021 BOCA RATON BOYNTON BEACH (8) ALBERTSONS 2015 2040 BRADENTON BRADENTON TJ MAXX 2003 2018 BRANDON (8) ROSS DRESS FOR LESS 2005 2025 CORAL SPRINGS CORAL SPRINGS EAST ORLANDO OFFICE DEPOT 2005 2025 FT. PIERCE WINN DIXIE 2005 2027 HOMESTEAD MARSHALLS 2011 2026 JACKSONVILLE OFFICEMAX 2012 2032 JENSEN BEACH MARSHALLS 2005 2020 KEY LARGO (8) PUBLIX 2009 2029 KISSIMMEE OFFICEMAX 2012 2027 LAKELAND AMC THEATRE 2002 2017 LARGO GIANT BOOK SALE 2003 LARGO AMC THEATRES 2011 2036 LARGO LAUDERDALE LAKES LAUDERHILL BABIES R US 2004 2014 LEESBURG MARGATE OFFICE DEPOT 2005 2020 MELBOURNE MELBOURNE GOODWILL INDUSTRIES 2004 2010 MELBOURNE KROGER 2004 2034 MIAMI FLEMING COMPANIES 2003 2008 MIAMI MIAMI MIAMI PARTY CITY 2007 2017 MIAMI MIAMI AMOCO 2011 2041

MAJOR LEASES -------------------------------------------------------------------- LEASE OPTION LOCATION TENANT NAME EXPIRATION EXPIRATION ----------------------------------------------------------------------------------------------- ALABAMA FAIRFIELD HOOVER ARIZONA FOUNTAIN HILLS (4) GILBERT (4) GLENDALE FACTORY 2U STORES 2005 2015 GLENDALE (8) LEVITZ 2012 2032 MESA OUR HOME 2005 2015 NORTH PHOENIX MICHAELS 2007 2022 PEORIA (4) PHOENIX AUTO ZONE 2003 2013 PHOENIX RODEO 2005 PHOENIX TEMPE STAPLES 2005 2025 TEMPE (5) CALIFORNIA ALHAMBRA ANAHEIM CARMICHAEL LONGS DRUG 2013 2033 CHULA VISTA JOANN FABRICS 2002 2017 CORONA LEVITZ 2009 2029 COVINA (8) PETSMART 2008 2028 LA MIRADA US POST OFFICE 2005 2020 MONTEBELLO (8) TOYS R US 2018 2043 OXNARD (8) 24 HOUR FITNESS 2010 2030 SAN DIEGO (8) SAN RAMON (8) SANTA ANA SANTEE MICHAELS 2003 2018 STOCKTON TEMECULA (8) TJ MAXX 2006 2011 TORRANCE (8) MARSHALLS 2004 2019 COLORADO AURORA AURORA AURORA CROWN LIQUORS 2005 2010 COLORADO SPRINGS DENVER ENGLEWOOD FT. COLLINS LAKEWOOD CONNECTICUT BRANFORD (8) ENFIELD (8) FARMINGTON BORDER BOOKS 2018 2063 HAMDEN BOB'S STORES 2016 2036 NORTH HAVEN XPECT DISCOUNT 2008 2013 WATERBURY DELAWARE ELSMERE DOVER (3) FLORIDA ALTAMONTE SPRINGS CLASSIC LEATHER 2009 2014 ALTAMONTE SPRINGS PEARL ARTS N CRAFTS 2008 2018 BOCA RATON BOYNTON BEACH (8) BRADENTON BRADENTON JOANN FABRICS 2009 2024 BRANDON (8) THOMASVILLE 2010 2020 CORAL SPRINGS CORAL SPRINGS EAST ORLANDO FT. PIERCE HOMESTEAD OFFICEMAX 2013 2028 JACKSONVILLE TJ MAXX 2007 2017 JENSEN BEACH KEY LARGO (8) KISSIMMEE LAKELAND ROSS STORES 2007 2012 LARGO LARGO OFFICE DEPOT 2004 2019 LARGO LAUDERDALE LAKES LAUDERHILL BOARDMANS 2005 2010 LEESBURG MARGATE SAM ASH MUSIC 2006 2011 MELBOURNE MELBOURNE MELBOURNE MARSHALLS 2005 2010 MIAMI MIAMI MIAMI MIAMI MIAMI MIAMI WALGREENS 2058

18

YEAR OWNERSHIP LEASABLE PERCENT DEVELOPED INTEREST/ LAND AREA AREA LEASED LOCATION OR ACQUIRED (EXPIRATION)(2) (ACRES) (SQ. FT.) (1) --------------------------------------------------------------------------------------------- MOUNT DORA 1997 FEE 12.4 118,150 100 OCALA 1997 FEE 27.2 254,537 92 ORLANDO (8) 2000 FEE 18.0 179,065 98 ORLANDO 1968 FEE/JOINT VENTURE 10.0 114,434 100 ORLANDO 1968 FEE 12.0 131,646 98 ORLANDO 1968 GROUND LEASE (2047)/ JOINT VENTURE 7.8 103,480 100 ORLANDO 1994 FEE 28.0 230,248 83 ORLANDO 1996 FEE 11.7 126,356 100 PALATKA 1970 FEE 8.9 81,330 86 PLANTATION 1974 FEE/JOINT VENTURE 4.6 60,414 100 POMPANO BEACH 1968 FEE/JOINT VENTURE 6.6 63,838 98 PORT RICHEY (8) 1998 FEE 14.3 103,294 91 RIVIERA BEACH 1968 FEE/JOINT VENTURE 5.1 46,390 78 SANFORD 1989 FEE 40.9 210,692 91 SARASOTA 1970 FEE 10.0 102,485 100 SARASOTA 1989 FEE 12.0 78,567 94 ST. PETERSBURG 1968 GROUND LEASE (2084)/ JOINT VENTURE 9.0 118,979 76 TALLAHASSEE 1998 FEE 12.8 105,535 100 TALLAHASSEE (4) 2000 GROUND LEASE(2085)/ JOINT VENTURE 34.0 144,000 92 TAMPA (8) 2001 FEE 73.0 324,846 98 TAMPA 1997 FEE 16.3 115,558 97 TAMPA (4) 2001 FEE/JOINT VENTURE 11.3 - - WEST PALM BEACH 1995 FEE 7.9 80,845 96 WEST PALM BEACH 1967 FEE/JOINT VENTURE 7.6 74,326 98 WINTER HAVEN 1973 FEE/JOINT VENTURE 13.9 88,400 88 GEORGIA ATLANTA 1988 FEE 19.5 165,314 97 AUGUSTA 1995 FEE 11.3 119,930 46 AUGUSTA (8) 2001 FEE 53.2 531,039 98 MACON 1969 FEE 12.3 127,260 54 SAVANNAH 1993 FEE 22.2 187,071 76 SAVANNAH 1995 FEE 9.5 88,325 100 SNELLVILLE (8) 2001 FEE 35.6 311,164 100 GAINSVILLE 1993 FEE/JOINT VENTURE 12.6 142,288 100 ILLINOIS ADDISON 1968 GROUND LEASE (2066) 8.0 93,289 45 ADDISON 1998 FEE 16.4 115,130 100 ALTON 1998 FEE 21.2 159,824 82 ARLINGTON HEIGHTS 1998 FEE 19.2 80,040 100 AURORA 1998 FEE 17.9 91,182 100 AURORA (8) 2001 FEE 8.0 39,885 91 BELLEVILLE 1998 GROUND LEASE (2057) 20.3 81,490 100 BLOOMINGTON 1972 FEE 16.1 188,250 93 BRADLEY 1996 FEE 5.4 80,535 100 BRIDGEVIEW 1998 FEE 6.8 88,069 100 CALUMET CITY 1997 FEE 17.0 193,949 100 CARBONDALE 1997 GROUND LEASE (2052) 8.1 80,535 100 CHAMPAIGN 1998 FEE 9.0 102,615 100 CHAMPAIGN (8) 2001 FEE 9.3 111,720 100 CHICAGO 1998 FEE 9.5 123,001 100 CHICAGO 1997 FEE 13.4 109,441 100 CHICAGO 1997 GROUND LEASE (2040) 17.5 104,264 100 CHICAGO 1997 FEE 6.0 86,894 100 CHICAGO 1988 FEE 6.4 80,842 100 COUNTRYSIDE 1997 GROUND LEASE (2053) 27.7 118,394 97 CRESTHILL 1997 GROUND LEASE (2039) 9.0 90,313 100 CRESTWOOD 1997 GROUND LEASE (2051) 36.8 79,903 100 CRYSTAL LAKE 1998 FEE 6.1 80,390 72 DOWNERS GROVE 1998 FEE 7.2 187,639 100 DOWNERS GROVE 1999 FEE 24.8 123,918 92 DOWNERS GROVE 1997 FEE 12.0 141,906 100 ELGIN 1972 FEE 18.7 183,432 49 ELGIN 1998 FEE 9.0 100,342 100 FAIRVIEW HEIGHTS 1998 GROUND LEASE (2050) 19.1 159,587 100 FOREST PARK 1997 GROUND LEASE (2021) 9.3 98,371 100 GENEVA 1996 FEE 8.2 104,688 100 MATTESON 1997 FEE 17.0 164,987 100 MT. PROSPECT 1997 FEE 16.8 192,473 100 MUNDELIEN 1998 FEE 7.6 85,018 100 NAPERVILLE 1997 FEE 9.0 101,822 98 NILES 1997 GROUND LEASE (2022) 10.2 101,775 100 NORRIDGE 1997 GROUND LEASE (2042) 11.7 116,914 100 OAKLAWN 1997 FEE 15.4 165,337 100 OAKBROOK TERRACE 1997 FEE 15.6 163,892 100 ORLAND PARK 1998 FEE 7.8 166,000 100 ORLAND PARK 1998 FEE 18.8 121,011 100 OTTAWA 1970 FEE 9.0 60,000 100 PEORIA 1997 GROUND LEASE (2031) 20.5 156,067 100 ROCKFORD 1998 GROUND LEASE (2030) 10.3 102,971 100 SCHAUMBURG 1998 FEE 7.3 167,690 100 SKOKIE 1997 FEE 5.8 58,455 100 SPRINGFIELD 1998 GROUND LEASE (2028) 11.6 115,526 100 STREAMWOOD 1998 FEE 5.6 81,000 100 WAUKEGAN 1998 FEE 6.8 90,555 100 WOODRIDGE 1998 FEE 13.1 163,573 79

MAJOR LEASES ---------------------------------------------------- LEASE OPTION LOCATION TENANT NAME EXPIRATION EXPIRATION ------------------------------------------------------------------------------------- MOUNT DORA KMART 2013 2063 OCALA KMART 2006 2021 ORLANDO (8) KMART 2014 2064 ORLANDO BALLYS TOTAL FITNESS 2008 2018 ORLANDO BED BATH & BEYOND 2007 2022 ORLANDO OFFICE FURNITURE 2003 2008 ORLANDO OLD TIME POTTERY 2010 2020 ORLANDO ROSS STORES 2003 2028 PALATKA SAV-A-LOT 2003 2013 PLANTATION BREAD OF LIFE 2009 2019 POMPANO BEACH RAMP 48 2002 2012 PORT RICHEY (8) CIRCUIT CITY 2011 2031 RIVIERA BEACH FURNITURE KINGDOM 2009 2014 SANFORD ROSS STORES 2005 2025 SARASOTA TJ MAXX 2007 2017 SARASOTA KASH N KARRY 2020 2040 ST. PETERSBURG KASH N KARRY 2017 2037 TALLAHASSEE STEIN MART 2003 2008 TALLAHASSEE (4) BED BATH & BEYOND 2017 2032 TAMPA (8) BEST BUY 2016 2031 TAMPA STAPLES 2003 2018 TAMPA (4) WEST PALM BEACH BABIES R US 2006 2021 WEST PALM BEACH WINN DIXIE 2010 2030 WINTER HAVEN BIG LOTS 2005 2010 GEORGIA ATLANTA SCOTT ANTIQUES 2005 AUGUSTA TJ MAXX 2004 2014 AUGUSTA (8) SPORTS AUTHORITY 2012 2027 MACON FREDS STORES 2004 2014 SAVANNAH TJ MAXX 2005 2015 SAVANNAH MEDIA PLAY 2006 2021 SNELLVILLE (8) KOHLS 2022 2062 GAINSVILLE FARMERS FURNITURE 2003 2013 ILLINOIS ADDISON CAPUTOS 2002 ADDISON KMART (10) ALTON VALUE CITY 2003 2023 ARLINGTON HEIGHTS KMART (10) AURORA KMART 2024 2054 AURORA (8) OFFICEMAX 2004 2019 BELLEVILLE KMART 2024 2054 BLOOMINGTON SCHNUCK MARKETS 2004 2024 BRADLEY CARSON PIRIE SCOTT 2014 2034 BRIDGEVIEW AMES (10) CALUMET CITY KMART 2024 2054 CARBONDALE K'S MERCHANDISE 2012 2052 CHAMPAIGN K'S MERCHANDISE 2014 2034 CHAMPAIGN (8) BEST BUY 2016 2031 CHICAGO KMART 2024 2054 CHICAGO KMART 2020 CHICAGO AMES 2005 2025 CHICAGO KMART 2024 2054 CHICAGO KMART 2024 2054 COUNTRYSIDE KMART 2024 2053 CRESTHILL AMES (10) CRESTWOOD KMART 2024 2051 CRYSTAL LAKE HOBBY LOBBY 2009 2019 DOWNERS GROVE HOME DEPOT 2022 2062 DOWNERS GROVE DOMINICK'S 2004 2019 DOWNERS GROVE TJ MAXX 2009 2024 ELGIN ELGIN FARMERS PRODUCTS 2010 2030 ELGIN KMART (10) FAIRVIEW HEIGHTS KMART 2024 2050 FOREST PARK KMART 2021 GENEVA KMART 2024 2054 MATTESON KMART (10) MT. PROSPECT KMART (10) MUNDELIEN KMART (10) NAPERVILLE KMART (10) NILES KMART 2022 NORRIDGE KMART 2024 2042 OAKLAWN KMART 2024 2054 OAKBROOK TERRACE KMART (10) ORLAND PARK RHODES FURNITURE 2008 2018 ORLAND PARK VALUE CITY 2015 2030 OTTAWA VALUE CITY 2006 2011 PEORIA KMART 2024 2031 ROCKFORD SHOPKO 2018 2038 SCHAUMBURG RHODES FURNITURE 2008 2018 SKOKIE MARSHALLS 2010 2025 SPRINGFIELD KMART 2024 2028 STREAMWOOD VALUE CITY 2015 2030 WAUKEGAN MEGA MARTS 2009 2029 WOODRIDGE KOHLS 2010 2030

MAJOR LEASES ----------------------------------------------------------------------------- LEASE OPTION LOCATION TENANT NAME EXPIRATION EXPIRATION -------------------------------------------------------------------------------------------------------- MOUNT DORA OCALA SERVICE MERCHANDISE 2007 2032 ORLANDO (8) ORLANDO ORLANDO BOOKS-A-MILLION 2006 2016 ORLANDO HOUSE OF HOPE 2002 ORLANDO SPORTS AUTHORITY 2011 2031 ORLANDO BIG LOTS 2004 2009 PALATKA BIG LOTS 2007 2017 PLANTATION POMPANO BEACH PORT RICHEY (8) STAPLES 2006 2011 RIVIERA BEACH GOODWILL INDUSTRIES 2005 2008 SANFORD ROSS STORES 2012 2032 SARASOTA OFFICEMAX 2009 2024 SARASOTA ST. PETERSBURG TJ MAXX 2007 2012 TALLAHASSEE TALLAHASSEE (4) MARSHALLS 2011 2021 TAMPA (8) JOANN FABRICS 2016 2031 TAMPA ROSS STORES 2007 2022 TAMPA (4) WEST PALM BEACH WEST PALM BEACH WINTER HAVEN GEORGIA ATLANTA AUGUSTA AUGUSTA (8) MANSOUR'S 2020 2040 MACON ODD LOTS 2003 SAVANNAH MARSHALLS 2007 2022 SAVANNAH STAPLES 2015 2030 SNELLVILLE (8) BELK'S 2015 2035 GAINSVILLE BIG LOTS 2012 ILLINOIS ADDISON ADDISON ALTON ARLINGTON HEIGHTS AURORA AURORA (8) BELLEVILLE BLOOMINGTON TOYS R US 2015 2045 BRADLEY BRIDGEVIEW CALUMET CITY MARSHALLS 2003 2008 CARBONDALE CHAMPAIGN CHAMPAIGN (8) DICKS SPORTING 2016 2031 CHICAGO CHICAGO CHICAGO CHICAGO CHICAGO COUNTRYSIDE CRESTHILL CRESTWOOD CRYSTAL LAKE DOWNERS GROVE DOWNERS GROVE DOWNERS GROVE BEST BUY 2016 2031 ELGIN ELGIN FAIRVIEW HEIGHTS OFFICEMAX 2015 2025 FOREST PARK GENEVA MATTESON MARSHALLS 2005 2010 MT. PROSPECT HOBBY LOBBY 2016 2026 MUNDELIEN NAPERVILLE NILES NORRIDGE OAKLAWN CHUCK E CHEESE 2007 2012 OAKBROOK TERRACE LINENS N THINGS 2006 ORLAND PARK ORLAND PARK OTTAWA PEORIA MARSHALLS 2009 2024 ROCKFORD SCHAUMBURG SKOKIE OLD NAVY 2010 2015 SPRINGFIELD STREAMWOOD WAUKEGAN WOODRIDGE

MAJOR LEASES --------------------------------------------------------------------- LEASE OPTION LOCATION TENANT NAME EXPIRATION EXPIRATION ------------------------------------------------------------------------------------------------ MOUNT DORA OCALA SUPERX DRUGS 2006 2021 ORLANDO (8) ORLANDO ORLANDO OFFICEMAX 2008 2023 ORLANDO ORLANDO ORLANDO WORLD GYM 2010 2020 PALATKA PLANTATION POMPANO BEACH PORT RICHEY (8) RIVIERA BEACH SANFORD OFFICE DEPOT 2009 2019 SARASOTA SARASOTA ST. PETERSBURG TALLAHASSEE TALLAHASSEE (4) MICHAELS 2011 2031 TAMPA (8) BED BATH & BEYOND 2015 2030 TAMPA TAMPA (4) WEST PALM BEACH WEST PALM BEACH WINTER HAVEN GEORGIA ATLANTA AUGUSTA AUGUSTA (8) BED BATH & BEYOND 2013 2028 MACON SAVANNAH SAVANNAH SNELLVILLE (8) LINENS N THINGS 2015 2030 GAINSVILLE OFFICE DEPOT 2004 2019 ILLINOIS ADDISON ADDISON ALTON ARLINGTON HEIGHTS AURORA AURORA (8) BELLEVILLE BLOOMINGTON BARNES & NOBLE 2005 2015 BRADLEY BRIDGEVIEW CALUMET CITY BEST BUY 2012 2032 CARBONDALE CHAMPAIGN CHAMPAIGN (8) MICHAELS 2010 2025 CHICAGO CHICAGO CHICAGO CHICAGO CHICAGO COUNTRYSIDE CRESTHILL CRESTWOOD CRYSTAL LAKE DOWNERS GROVE DOWNERS GROVE DOWNERS GROVE BEST BUY 2012 2032 ELGIN ELGIN FAIRVIEW HEIGHTS WALGREENS 2010 2037 FOREST PARK GENEVA MATTESON MT. PROSPECT MUNDELIEN NAPERVILLE NILES NORRIDGE OAKLAWN OAKBROOK TERRACE ORLAND PARK ORLAND PARK OTTAWA PEORIA ROCKFORD SCHAUMBURG SKOKIE SPRINGFIELD STREAMWOOD WAUKEGAN WOODRIDGE

19

YEAR OWNERSHIP LEASABLE PERCENT DEVELOPED INTEREST/ LAND AREA AREA LEASED LOCATION OR ACQUIRED (EXPIRATION)(2) (ACRES) (SQ. FT.) (1) ---------------------------------------------------------------------------------------------- INDIANA EVANSVILLE 1986 FEE 14.2 193,472 97 EVANSVILLE 1986 FEE 11.5 149,182 97 FELBRAM 1970 FEE 4.1 27,400 100 GREENWOOD 1970 FEE 25.7 157,162 100 GRIFFITH 1997 GROUND LEASE (2054) 10.6 114,684 100 INDIANAPOLIS (6) 1967 FEE 11.9 75,000 100 INDIANAPOLIS 1967 FEE/JOINT VENTURE 17.4 96,104 57 INDIANAPOLIS 1986 FEE 20.6 177,580 94 INDIANAPOLIS 1997 FEE 9.6 96,476 - LAFAYETTE 1971 FEE 12.4 90,500 97 LAFAYETTE 1997 FEE 24.3 183,440 46 LAFAYETTE 1998 FEE 43.2 208,376 95 MERRILLVILLE 1997 GROUND LEASE (2015) 12.7 105,511 100 MISHAWAKA 1998 FEE 7.5 82,100 100 SOUTH BEND 1998 FEE 1.8 81,668 100 IOWA CLIVE 1996 FEE 8.8 90,000 100 DAVENPORT 1997 GROUND LEASE (2028) 9.1 91,035 100 DES MOINES 1999 FEE 23.0 150,143 77 DUBUQUE 1997 GROUND LEASE (2019) 6.5 82,979 100 SE DES MOINES 1996 FEE 9.6 111,847 100 WATERLOO 1996 FEE 9.0 96,000 100 KANSAS KANSAS CITY 1998 FEE 19.6 167,301 98 E. WICHITA (8) 1996 FEE 6.5 97,992 100 OVERLAND PARK 1998 FEE 14.5 162,982 100 ROELAND PARK 1997 GROUND LEASE (2024) 12.7 152,248 100 W. WICHITA (8) 1996 FEE 8.1 96,319 100 WICHITA (8) 1998 FEE 13.5 133,771 97 KENTUCKY BELLEVUE 1976 FEE 6.0 53,695 100 LEXINGTON 1993 FEE 35.8 258,713 95 HINKLEVILLE 1998 GROUND LEASE (2039) 2.0 85,229 100 LOUISIANA BATON ROUGE 1997 FEE 18.6 342,706 92 HOUMA 1999 FEE 10.1 98,586 83 LAFAYETTE 1997 FEE 21.9 222,923 96 NEW ORLEANS 1983 FEE/JOINT VENTURE 7.0 190,000 100 MAINE BANGOR 2001 FEE 8.6 86,422 100 MARYLAND GAITHERSBURG 1999 FEE 8.7 87,061 100 GLEN BURNIE 2000 FEE 6.0 60,173 100 HAGERSTOWN 1973 FEE 10.5 117,718 100 LANDOVER 1999 FEE 23.3 232,903 100 LAUREL 1964 FEE 18.0 75,924 100 LAUREL 1972 FEE 8.1 81,550 100 WHITE MARSH 1998 FEE 25.3 187,331 100 MASSACHUSETTS FOXBOROUGH (8) 2000 FEE 11.9 118,844 100 GREAT BARRINGTON 1994 FEE 14.1 134,817 94 LEOMINSTER 1975 FEE 57.0 610,361 90 SHREWSBURY 2000 FEE 10.8 108,418 100 MICHIGAN CLARKSTON 1996 FEE 20.0 157,102 99 CLAWSON 1993 FEE 13.5 179,572 100 FARMINGTON 1993 FEE 2.8 97,038 87 FLINT 1989 FEE 46.6 243,847 85 LIVONIA 1968 FEE 4.5 44,185 87 MUSKEGON 1985 FEE 12.2 71,215 92 TAYLOR 1993 FEE 13.0 141,549 74 WALKER 1993 FEE 41.8 283,668 100 MINNESOTA MAPLE GROVE (8) 2001 FEE 63.0 429,575 100 MINNETONKA (8) 1998 FEE 12.1 120,220 100 MISSOURI BRIDGETON 1997 GROUND LEASE (2040) 27.3 101,592 100 CAPE GIRARDEAU 1997 GROUND LEASE (2060) 7.0 80,803 100 CREVE COEUR 1998 FEE 12.2 113,781 82 ELLISVILLE 1970 FEE 18.4 118,080 100 HAZELWOOD 1970 FEE 15.0 149,230 12 INDEPENDENCE 1998 FEE 21.0 160,795 100 JOPLIN 1998 FEE 12.6 155,416 98 JOPLIN (8) 1998 FEE 9.5 80,524 100 KANSAS CITY 1997 FEE 17.8 143,781 81 KANSAS CITY 1997 FEE 15.6 174,716 100 KIRKWOOD 1998 GROUND LEASE (2069) 19.8 169,736 100 LEMAY 1974 FEE 3.1 73,281 100 MANCHESTER (8) 1998 FEE 9.6 89,305 100

MAJOR LEASES ----------------------------------------------------- LEASE OPTION LOCATION TENANT NAME EXPIRATION EXPIRATION --------------------------------------------------------------------------------------- INDIANA EVANSVILLE SHOPKO 2018 2038 EVANSVILLE SHOPKO 2018 2038 FELBRAM SAVE A LOT 2006 2016 GREENWOOD BABY SUPERSTORE 2006 2021 GRIFFITH KMART 2024 2054 INDIANAPOLIS (6) DAVIS WHOLESALE 2003 2012 INDIANAPOLIS KROGER 2026 2066 INDIANAPOLIS TARGET 2009 2029 INDIANAPOLIS LAFAYETTE MENARD 2006 LAFAYETTE PAYLESS SUPERMARKET 2004 2014 LAFAYETTE FAMOUS FOOTWEAR 2011 2026 MERRILLVILLE KMART 2015 MISHAWAKA K'S MERCHANDISE 2013 2023 SOUTH BEND MENARD 2010 2030 IOWA CLIVE KMART 2021 2051 DAVENPORT KMART 2024 2028 DES MOINES BEST BUY 2008 2023 DUBUQUE SHOPKO 2018 2038 SE DES MOINES HOME DEPOT 2020 2065 WATERLOO KMART 2021 2051 KANSAS KANSAS CITY KMART (10) E. WICHITA (8) SHOPKO 2018 2038 OVERLAND PARK HOME DEPOT 2005 2050 ROELAND PARK KMART (10) W. WICHITA (8) SHOPKO 2018 2038 WICHITA (8) BEST BUY 2010 2025 KENTUCKY BELLEVUE KROGER 2005 2035 LEXINGTON BEST BUY 2009 2024 HINKLEVILLE SHOPKO 2018 2038 LOUISIANA BATON ROUGE BURLINGTON COAT 2004 2024 HOUMA OLD NAVY 2009 2014 LAFAYETTE STEIN MART 2005 2020 NEW ORLEANS DILLARDS 2011 2031 MAINE BANGOR BURLINGTON COAT 2007 2032 MARYLAND GAITHERSBURG GREAT BEGINNING 2011 2021 GLEN BURNIE ROOMSTORE 2002 HAGERSTOWN AMES 2007 2017 LANDOVER RAYTHEON 2003 2015 LAUREL VILLAGE THRIFT 2004 2009 LAUREL AMES 2007 2017 WHITE MARSH COSTCO 2013 2048 MASSACHUSETTS FOXBOROUGH (8) BRADLEES 2002 2032 GREAT BARRINGTON KMART 2006 2016 LEOMINSTER SEARS 2003 2033 SHREWSBURY BED BATH & BEYOND 2012 2032 MICHIGAN CLARKSTON FARMER JACKS 2015 2045 CLAWSON FARMER JACKS 2006 2016 FARMINGTON DAMMAN HARDWARE 2015 2030 FLINT KESSEL FOOD MARKETS 2014 2034 LIVONIA DAMMAN HARDWARE 2005 2010 MUSKEGON PLUMB'S FOOD 2007 2022 TAYLOR KOHLS 2022 2042 WALKER BUILDERS SQUARE 2016 2051 MINNESOTA MAPLE GROVE (8) BYLERLY'S 2020 2035 MINNETONKA (8) TOYS R US 2016 2031 MISSOURI BRIDGETON KOHLS 2010 2020 CAPE GIRARDEAU SHOPKO 2018 2038 CREVE COEUR KOHLS 2018 2038 ELLISVILLE SHOP N SAVE 2005 2015 HAZELWOOD WALGREENS 2006 INDEPENDENCE KMART 2024 2054 JOPLIN GOODYS 2010 2015 JOPLIN (8) SHOPKO 2018 2038 KANSAS CITY HOME DEPOT 2005 2050 KANSAS CITY KMART 2024 2054 KIRKWOOD KMART (10) LEMAY SHOP N SAVE 2003 2008 MANCHESTER (8) KOHLS 2018 2038

MAJOR LEASES --------------------------------------------------------------------------- LEASE OPTION LOCATION TENANT NAME EXPIRATION EXPIRATION -------------------------------------------------------------------------------------------------------- INDIANA EVANSVILLE OFFICEMAX 2012 2027 EVANSVILLE BUEHLER FOODS 2003 2013 FELBRAM GREENWOOD TOYS R US 2011 2056 GRIFFITH INDIANAPOLIS (6) INDIANAPOLIS INDIANAPOLIS DOLLAR TREE 2004 2014 INDIANAPOLIS LAFAYETTE LAFAYETTE JOANN FABRICS 2010 2020 LAFAYETTE PETSMART 2012 2032 MERRILLVILLE MISHAWAKA SOUTH BEND IOWA CLIVE DAVENPORT DES MOINES OFFICEMAX 2008 2018 DUBUQUE SE DES MOINES WATERLOO KANSAS KANSAS CITY PRICE CHOPPER 2007 2017 E. WICHITA (8) OVERLAND PARK ROELAND PARK PRICE CHOPPER 2004 2009 W. WICHITA (8) WICHITA (8) TJ MAXX 2004 2019 KENTUCKY BELLEVUE LEXINGTON BED BATH & BEYOND 2013 2038 HINKLEVILLE LOUISIANA BATON ROUGE STEIN MART 2006 2016 HOUMA OFFICEMAX 2013 2028 LAFAYETTE LINENS N THINGS 2009 2024 NEW ORLEANS MAINE BANGOR MARYLAND GAITHERSBURG GLEN BURNIE HAGERSTOWN SUPER SHOE 2006 2016 LANDOVER LAUREL DOLLAR TREE 2010 2015 LAUREL WHITE MARSH SPORTS AUTHORITY 2011 2021 MASSACHUSETTS FOXBOROUGH (8) OCEAN STATE JOB 2007 2022 GREAT BARRINGTON PRICE CHOPPER 2016 2036 LEOMINSTER JC PENNEY 2009 2034 SHREWSBURY STAPLES 2006 2021 MICHIGAN CLARKSTON FRANKS NURSERY 2011 2031 CLAWSON FRANKS NURSERY 2016 FARMINGTON DOLLAR CASTLE 2005 2010 FLINT RITE AID 2002 2011 LIVONIA MUSKEGON JOANN FABRICS 2005 2015 TAYLOR PARTY CONCEPTS 2007 2017 WALKER KOHLS 2017 2037 MINNESOTA MAPLE GROVE (8) BEST BUY 2015 2030 MINNETONKA (8) GOLFSMITH 2008 2018 MISSOURI BRIDGETON CAPE GIRARDEAU CREVE COEUR ELLISVILLE HAZELWOOD INDEPENDENCE TILE SHOP 2014 2024 JOPLIN HASTINGS BOOKS 2004 2014 JOPLIN (8) KANSAS CITY KANSAS CITY PRICE CHOPPER 2015 2030 KIRKWOOD HANCOCK FABRICS 2007 2017 LEMAY ST.LOUIS SALES FACTORY OUTLET 2006 2011 MANCHESTER (8)

MAJOR LEASES -------------------------------------------------------------------- LEASE OPTION LOCATION TENANT NAME EXPIRATION EXPIRATION ------------------------------------------------------------------------------------------------- INDIANA EVANSVILLE MICHAELS 2004 2019 EVANSVILLE FELBRAM GREENWOOD TJ MAXX 2004 2010 GRIFFITH INDIANAPOLIS (6) INDIANAPOLIS INDIANAPOLIS INDIANAPOLIS LAFAYETTE LAFAYETTE LAFAYETTE STAPLES 2011 2026 MERRILLVILLE MISHAWAKA SOUTH BEND IOWA CLIVE DAVENPORT DES MOINES JOANN FABRICS 2007 2017 DUBUQUE SE DES MOINES WATERLOO KANSAS KANSAS CITY E. WICHITA (8) OVERLAND PARK ROELAND PARK W. WICHITA (8) WICHITA (8) MICHAELS 2005 2025 KENTUCKY BELLEVUE LEXINGTON TOYS R US 2013 2038 HINKLEVILLE LOUISIANA BATON ROUGE HOUMA MICHAELS 2009 2019 LAFAYETTE NEW ORLEANS MAINE BANGOR MARYLAND GAITHERSBURG GLEN BURNIE HAGERSTOWN LANDOVER LAUREL LAUREL WHITE MARSH PETSMART 2010 2030 MASSACHUSETTS FOXBOROUGH (8) GREAT BARRINGTON LEOMINSTER MAY DEPARTMENT STORES 2009 2024 SHREWSBURY MICHIGAN CLARKSTON CVS 2005 2020 CLAWSON STAPLES 2011 2026 FARMINGTON FLINT LIVONIA MUSKEGON TAYLOR WALKER OFFICEMAX 2013 2033 MINNESOTA MAPLE GROVE (8) JOANN FABRICS 2010 2030 MINNETONKA (8) OFFICEMAX 2006 2011 MISSOURI BRIDGETON CAPE GIRARDEAU CREVE COEUR ELLISVILLE HAZELWOOD INDEPENDENCE JOPLIN OFFICEMAX 2010 2025 JOPLIN (8) KANSAS CITY KANSAS CITY KIRKWOOD FRANKS NURSERY 2011 LEMAY MANCHESTER (8)

20

YEAR OWNERSHIP LEASABLE PERCENT DEVELOPED INTEREST/ LAND AREA AREA LEASED LOCATION OR ACQUIRED (EXPIRATION)(2) (ACRES) (SQ. FT.) (1) --------------------------------------------------------------------------------------------- SPRINGFIELD 1994 FEE 41.5 277,560 98 SPRINGFIELD 1998 GROUND LEASE (2087) 18.5 167,828 100 ST. CHARLES 1998 FEE 36.9 8,000 100 ST. CHARLES 1999 GROUND LEASE (2039) 8.4 84,460 100 ST. LOUIS 1972 FEE 13.1 163,821 19 ST. LOUIS 1998 FEE 17.5 157,913 75 ST. LOUIS 1997 GROUND LEASE (2025) 19.7 155,868 100 ST. LOUIS 1997 GROUND LEASE (2035) 37.7 168,367 82 ST. LOUIS 1997 GROUND LEASE (2040) 16.3 128,765 100 ST. LOUIS 1997 FEE 17.5 163,097 98 ST. PETERS 1997 FEE 14.8 171,780 100 NEVADA HENDERSON (4) 1999 FEE/JOINT VENTURE 34.0 162,014 100 LAS VEGAS (8) 2000 FEE 23.4 234,496 51 NEW HAMPSHIRE SALEM 1994 FEE 39.8 340,626 99 NEW JERSEY BRIDGEWATER (8) (9) 2001 FEE 15.8 506,545 100 CHERRY HILL 1985 FEE/JOINT VENTURE 18.6 122,050 79 CHERRY HILL 1996 GROUND LEASE (2035) 15.2 129,809 95 CINNAMINSON 1996 FEE 13.7 138,408 100 DELRAN (8) 2000 FEE 16.1 161,128 95 FRANKLIN 1998 FEE 14.9 138,364 96 HILLSBOROUGH (4) 2001 FEE 13.8 122,000 100 NORTH BRUNSWICK 1994 FEE 38.1 409,879 86 PISCATAWAY 1998 FEE 9.6 97,348 97 PLAINFIELD (8) 1998 FEE 16.2 133,249 95 RIDGEWOOD 1994 FEE 2.7 24,280 100 WESTMONT 1994 FEE 17.4 192,380 81 NEW MEXICO ALBUQUERQUE 1998 FEE 4.7 37,735 100 ALBUQUERQUE 1998 FEE 26.0 180,512 99 ALBUQUERQUE 1998 FEE 4.8 59,722 94 NEW YORK BRIDGEHAMPTON 1973 FEE 30.2 287,632 99 BRONX 1998 FEE/JOINT VENTURE 20.8 208,149 100 BROOKLYN (8) 2000 FEE 8.1 80,708 100 BUFFALO, AMHERST 1988 FEE/JOINT VENTURE 7.5 101,066 100 BUFFALO 1988 FEE/JOINT VENTURE 9.2 141,077 89 BUFFALO 1988 FEE/JOINT VENTURE 12.0 153,125 92 CARLE PLACE 1993 FEE 8.3 131,452 90 CENTEREACH 1993 FEE/JOINT VENTURE 40.7 371,028 93 COMMACK 1998 GROUND LEASE(2085)/ JOINT VENTURE 35.7 255,798 100 COPIAGUE (8) 1998 FEE 15.4 154,692 100 FREEPORT (8) 2000 FEE 9.6 173,031 100 GLEN COVE (8) 2000 FEE 2.7 49,597 94 HAMPTON BAYS 1989 FEE 8.2 70,990 100 HEMPSTEAD (8) 2000 FEE 1.4 13,905 100 HENRIETTA 1988 FEE 14.9 123,000 100 IRONDEQUOIT 1988 FEE 12.8 17,995 100 LATHAM (8) 1999 FEE 60.3 603,171 98 MANHASSET 1999 FEE 9.6 273,943 48 MASSAPEQUA 1999 FEE 1.5 22,010 100 MERRICK (8) 2000 FEE 10.8 107,871 100 MIDDLETOWN (8) 2000 FEE 10.1 80,000 100 MUNSEY PARK (8) 2000 FEE 6.0 72,748 100 NANUET 1984 FEE 6.0 70,522 67 PLAINVIEW 1969 FEE 7.0 88,222 99 POUGHKEEPSIE 1972 FEE 20.0 165,733 93 WEST GATES 1993 FEE 18.6 185,153 100 STATEN ISLAND (8) 2000 FEE 14.4 177,118 96 STATEN ISLAND 1989 FEE 16.7 210,990 100 STATEN ISLAND 1997 FEE 7.0 98,193 99 SYOSSET 1967 FEE 2.5 32,124 100 YONKERS (8) 2000 GROUND LEASE(2047) 6.3 56,361 94 YONKERS 1995 FEE 4.4 43,560 100 NORTH CAROLINA CARY (8) 2001 FEE 38.6 229,213 98 CARY 2000 FEE 8.6 86,015 100 CARY 1998 FEE 10.9 102,787 96 CHARLOTTE 1968 FEE 13.5 110,300 100 CHARLOTTE 1993 FEE 14.0 135,269 100 CHARLOTTE 1986 GROUND LEASE(2048) 18.5 227,808 77 DURHAM 1996 FEE 13.2 116,186 92 GASTONIA 1989 FEE 24.9 235,607 87 GREENSBORO 1999 FEE 8.2 100,794 27 GREENSBORO (8) 1998 FEE 4.4 41,387 100 RALEIGH 1993 FEE 35.9 374,395 98 RALEIGH (4) 2001 FEE/JOINT VENTURE 24.4 - - RALEIGH (4) 2001 FEE/JOINT VENTURE 9.9 56,000 96 RALEIGH 2001 FEE 26.0 83,965 95 WINSTON-SALEM 1969 FEE 13.2 137,868 98

MAJOR LEASES ------------------------------------------------------ LEASE OPTION LOCATION TENANT NAME EXPIRATION EXPIRATION ---------------------------------------------------------------------------------------- SPRINGFIELD BEST BUY 2011 2026 SPRINGFIELD KMART 2024 2054 ST. CHARLES FAMOUS FOOTWEAR 2005 2015 ST. CHARLES KOHLS 2019 2039 ST. LOUIS WALGREENS 2006 ST. LOUIS BURLINGTON COAT 2004 2024 ST. LOUIS KMART 2024 2025 ST. LOUIS KMART 2024 2035 ST. LOUIS KMART 2024 2040 ST. LOUIS KMART (10) ST. PETERS KMART 2024 2054 NEVADA HENDERSON (4) SEARS 2022 2062 LAS VEGAS (8) ALBERTSONS 2009 2019 NEW HAMPSHIRE SALEM KOHLS 2003 2013 NEW JERSEY BRIDGEWATER (8) (9) BED BATH & BEYOND 2010 2030 CHERRY HILL SUPER G 2016 2036 CHERRY HILL KOHLS 2016 2036 CINNAMINSON AMES 2019 2034 DELRAN (8) KMART 2007 2017 FRANKLIN EDWARDS 2010 2020 HILLSBOROUGH (4) KOHLS 2100 NORTH BRUNSWICK WAL-MART 2018 2058 PISCATAWAY SHOPRITE 2014 2024 PLAINFIELD (8) A&P 2018 2058 RIDGEWOOD FRESH FIELDS 2015 2030 WESTMONT SUPER FRESH 2017 2081 NEW MEXICO ALBUQUERQUE SEARS HARDWARE 2006 2021 ALBUQUERQUE MOVIES WEST 2011 2021 ALBUQUERQUE PAGE ONE 2003 2013 NEW YORK BRIDGEHAMPTON KMART 2019 2039 BRONX NATIONAL AMUSEMENTS 2011 2036 BROOKLYN (8) HOME DEPOT 2022 2058 BUFFALO, AMHERST TOPS SUPERMARKET 2013 2033 BUFFALO TOPS SUPERMARKET 2012 2037 BUFFALO AMES 2014 2034 CARLE PLACE HARROWS 2003 CENTEREACH WAL-MART 2015 2044 COMMACK KING KULLEN 2017 2047 COPIAGUE (8) HOME DEPOT 2011 2056 FREEPORT (8) STOP & SHOP 2025 GLEN COVE (8) STAPLES 2014 2029 HAMPTON BAYS MACY'S EAST, INC. 2005 2025 HEMPSTEAD (8) WALGREENS 2059 HENRIETTA FUN QUEST 2007 2012 IRONDEQUOIT STAPLES 2010 2030 LATHAM (8) SAMS CLUB 2013 2043 MANHASSET FILENES 2006 2011 MASSAPEQUA DUANE READE 2014 MERRICK (8) WALDBAUMS 2013 2041 MIDDLETOWN (8) BEST BUY 2016 2031 MUNSEY PARK (8) BED BATH & BEYOND 2007 2022 NANUET GMF ASSOCIATES 2012 2022 PLAINVIEW FAIRWAY STORES 2017 2037 POUGHKEEPSIE STOP & SHOP 2020 2049 WEST GATES TOPS SUPERMARKET 2004 2024 STATEN ISLAND (8) TJ MAXX 2005 2025 STATEN ISLAND KMART 2006 2011 STATEN ISLAND WALDBAUMS 2006 2031 SYOSSET NY SPORTS CLUB 2016 2021 YONKERS (8) STAPLES 2014 2029 YONKERS SHOPRITE 2008 2028 NORTH CAROLINA CARY (8) BJ'S 2020 2040 CARY BED BATH & BEYOND 2005 2014 CARY LOWES 2017 2037 CHARLOTTE MEDIA PLAY 2005 2020 CHARLOTTE BI-LO 2009 2029 CHARLOTTE TOYS R US 2012 2042 DURHAM TJ MAXX 2003 2013 GASTONIA SERVICE MERCHANDISE 2003 GREENSBORO BEN FRANKLIN 2010 2020 GREENSBORO (8) STAPLES 2011 2031 RALEIGH BEST BUY 2005 2020 RALEIGH (4) RALEIGH (4) FOOD LION 2021 2041 RALEIGH KROGER 2019 2059 WINSTON-SALEM HARRIS TEETER 2016 2041

MAJOR LEASES --------------------------------------------------------------------------- LEASE OPTION LOCATION TENANT NAME EXPIRATION EXPIRATION -------------------------------------------------------------------------------------------------------- SPRINGFIELD JC PENNEY 2005 2015 SPRINGFIELD OFFICE DEPOT 2005 2010 ST. CHARLES ST. CHARLES ST. LOUIS ST. LOUIS OFFICE DEPOT 2005 2015 ST. LOUIS WEEKENDS ONLY 2004 2009 ST. LOUIS FIRESTONE 2004 2019 ST. LOUIS ST. LOUIS ODD LOTS 2003 2009 ST. PETERS OFFICE DEPOT 2004 2009 NEVADA HENDERSON (4) HOMELIFE 2017 2032 LAS VEGAS (8) FACTORY 2U STORES 2004 2009 NEW HAMPSHIRE SALEM SHAWS SUPERMARKET 2008 2038 NEW JERSEY BRIDGEWATER (8) (9) BABIES R US 2014 2039 CHERRY HILL DOLLAR TREE 2005 2015 CHERRY HILL SEARS HARDWARE 2003 2013 CINNAMINSON DELRAN (8) EICKHOFF SUPERMARKETS 2006 2016 FRANKLIN NY SPORTS CLUB 2006 2016 HILLSBOROUGH (4) NORTH BRUNSWICK BURLINGTON COAT 2008 2013 PISCATAWAY PLAINFIELD (8) SEARS HARDWARE 2008 2028 RIDGEWOOD WESTMONT SUPER FITNESS 2009 NEW MEXICO ALBUQUERQUE ALBUQUERQUE ROSS STORES 2006 2021 ALBUQUERQUE WALGREENS 2027 NEW YORK BRIDGEHAMPTON KING KULLEN 2015 2035 BRONX WALDBAUMS 2011 2046 BROOKLYN (8) WALGREENS 2030 BUFFALO, AMHERST BUFFALO JOANN FABRICS 2002 2012 BUFFALO ECKERD 2003 2018 CARLE PLACE STAPLES 2010 2025 CENTEREACH KING KULLEN 2003 2033 COMMACK LINENS N THINGS 2018 2038 COPIAGUE (8) JACK LALANNE 2008 2018 FREEPORT (8) TOYS R US 2020 2040 GLEN COVE (8) HAMPTON BAYS GENOVESE 2006 2025 HEMPSTEAD (8) HENRIETTA STAPLES 2010 2025 IRONDEQUOIT LATHAM (8) WAL-MART 2013 2043 MANHASSET MASSAPEQUA MERRICK (8) MIDDLETOWN (8) LINENS N THINGS 2016 2031 MUNSEY PARK (8) FRESH FIELDS 2011 2021 NANUET PLAINVIEW POUGHKEEPSIE ODD LOTS 2007 2017 WEST GATES STATEN ISLAND (8) NATIONAL WHOLESALE 2010 2030 STATEN ISLAND PATHMARK 2011 2021 STATEN ISLAND DUANE READE 2011 2021 SYOSSET YONKERS (8) YONKERS NORTH CAROLINA CARY (8) PETSMART 2016 2036 CARY DICKS CLOTHING 2014 2029 CARY ECKARD 2007 2017 CHARLOTTE TJ MAXX 2007 2017 CHARLOTTE MICHAELS 2003 2013 CHARLOTTE OFFICEMAX 2009 2024 DURHAM JOANN FABRICS 2010 2020 GASTONIA TOYS R US 2015 2045 GREENSBORO GREENSBORO (8) RALEIGH PHAR-MOR 2010 2025 RALEIGH (4) RALEIGH (4) RALEIGH WINSTON-SALEM

------------------------------------------------------------------ LEASE OPTION LOCATION TENANT NAME EXPIRATION EXPIRATION ------------------------------------------------------------------------------------------------ SPRINGFIELD TJ MAXX 2006 2021 SPRINGFIELD ST. CHARLES ST. CHARLES ST. LOUIS ST. LOUIS ST. LOUIS FRANKS NURSERY 2005 2015 ST. LOUIS ST. LOUIS ST. LOUIS ST. PETERS NEVADA HENDERSON (4) LAS VEGAS (8) NEW HAMPSHIRE SALEM BOB'S STORES 2011 2021 NEW JERSEY BRIDGEWATER (8) (9) MARSHALLS 2009 2024 CHERRY HILL CHERRY HILL CINNAMINSON DELRAN (8) FRANKLIN HILLSBOROUGH (4) NORTH BRUNSWICK OFFICE DEPOT 2010 2025 PISCATAWAY PLAINFIELD (8) CVS 2018 2038 RIDGEWOOD WESTMONT JOANN FABRICS 2010 2020 NEW MEXICO ALBUQUERQUE ALBUQUERQUE VALLEY FURNITURE 2007 2017 ALBUQUERQUE NEW YORK BRIDGEHAMPTON TJ MAXX 2007 2017 BRONX OFFICE OF HEARING 2007 BROOKLYN (8) BUFFALO, AMHERST BUFFALO BUFFALO BIG LOTS 2004 2014 CARLE PLACE CENTEREACH MODELLS 2009 2019 COMMACK SPORTS AUTHORITY 2017 2037 COPIAGUE (8) FREEPORT (8) MARSHALLS 2006 2016 GLEN COVE (8) HAMPTON BAYS HEMPSTEAD (8) HENRIETTA IRONDEQUOIT LATHAM (8) HOME DEPOT 2031 2071 MANHASSET MASSAPEQUA MERRICK (8) MIDDLETOWN (8) MUNSEY PARK (8) NANUET PLAINVIEW POUGHKEEPSIE GOODYEAR TIRE 2003 2018 WEST GATES STATEN ISLAND (8) MICHAELS 2006 2031 STATEN ISLAND STATEN ISLAND SYOSSET YONKERS (8) YONKERS NORTH CAROLINA CARY (8) KOHLS 2022 2102 CARY CARY CHARLOTTE CVS 2003 2018 CHARLOTTE CHARLOTTE DURHAM GASTONIA WINN DIXIE 2002 GREENSBORO GREENSBORO (8) RALEIGH EFW PLEASANT VALLEY 2007 2017 RALEIGH (4) RALEIGH (4) RALEIGH WINSTON-SALEM

21

YEAR OWNERSHIP LEASABLE PERCENT DEVELOPED INTEREST/ LAND AREA AREA LEASED LOCATION OR ACQUIRED (EXPIRATION)(2) (ACRES) (SQ. FT.) (1) ---------------------------------------------------------------------------------------------- OHIO AKRON 1975 FEE 6.9 76,438 100 AKRON 1988 FEE 24.5 138,363 93 AKRON 1988 FEE 12.6 149,054 28 AKRON 1988 GROUND LEASE (2012) 22.9 116,656 8 BARBERTON 1972 FEE 10.0 38,175 74 BEAVERCREEK 1986 FEE 18.2 146,636 77 BEDFORD 1988 GROUND LEASE (2019) 13.1 133,147 25 BROOKLYN 1988 FEE 14.4 133,563 100 BRUNSWICK 1975 FEE 20.0 168,523 94 CAMBRIDGE 1973 FEE 13.1 95,955 92 CANTON 1993 FEE 7.9 63,989 69 CANTON 1972 FEE 19.6 161,569 89 CANTON 1988 FEE 9.2 99,267 - CANTON 1988 GROUND LEASE (2007) 20.6 150,900 - CENTERVILLE 1988 FEE 15.2 115,114 75 CINCINNATI (3) 1988 FEE 11.6 233,401 100 CINCINNATI 2000 FEE 8.8 88,317 62 CINCINNATI (8) 2000 FEE 36.7 375,499 100 CINCINNATI 1988 FEE 8.8 121,242 100 CINCINNATI 1988 FEE 29.2 320,095 80 CINCINNATI (3) 1999 FEE 16.7 93,474 99 CLEVELAND 1975 GROUND LEASE (2035) 9.4 83,061 62 COLUMBUS 1967 FEE 13.8 110,263 79 COLUMBUS 1988 FEE 12.4 131,789 100 COLUMBUS 1988 FEE 13.7 140,993 100 COLUMBUS 1988 FEE 17.9 129,008 100 COLUMBUS 1988 FEE 12.4 135,650 100 COLUMBUS 1988 FEE 12.5 99,262 100 COLUMBUS (4) 2001 FEE 20.6 - - COLUMBUS (8) 1998 FEE 12.1 113,183 100 DAYTON 1969 GROUND LEASE (2043) 22.8 163,131 60 DAYTON 1984 FEE 32.1 214,279 89 DAYTON 1988 FEE 16.9 141,616 100 DAYTON (4) 1999 FEE 7.8 82,000 100 DAYTON 1988 FEE 11.2 116,374 100 HUBER HEIGHTS (8) 1999 FEE 40.0 309,768 99 KENT 1988 FEE 12.2 106,500 100 LIMA 1986 FEE 18.1 193,633 90 MENTOR 1987 FEE 20.6 103,910 100 MENTOR 1988 FEE 25.0 271,259 100 MIDDLEBURG HEIGHTS 1988 FEE 8.2 104,342 - NORTH OLMSTEAD 1988 FEE 11.7 99,862 100 SHARONVILLE 1977 GROUND LEASE (2076)/ JOINT VENTURE 15.0 130,715 100 SPRINGBORO PIKE 1985 FEE 13.0 99,147 97 SPRINGDALE (8) 2000 FEE 22.0 243,929 77 SPRINGFIELD 1988 FEE 14.3 131,628 100 UPPER ARLINGTON 1969 FEE 13.3 158,395 91 WESTERVILLE 1988/1993 FEE 25.4 242,124 81 WICKLIFFE 1995 FEE 10.0 128,180 100 WILLOUGHBY HILLS 1988 FEE 14.1 156,178 31 OKLAHOMA EDMOND 1997 FEE 9.8 97,527 100 MIDWEST CITY 1998 FEE 9.7 99,433 100 NORMAN (8) 2001 FEE 31.3 225,842 100 OKLAHOMA CITY 1998 FEE 19.8 232,635 77 TULSA 1996 FEE 8.8 96,100 100 PENNSYLVANIA EXTON 1999 FEE 6.1 60,685 100 BLUE BELL 1996 FEE 17.7 120,211 100 CHIPPEWA 2000 FEE 22.4 215,206 100 DUQUESNE 1993 FEE 8.8 69,733 100 E. NORRITON 1984 FEE 12.5 134,860 99 E. STROUDSBURG 1973 FEE 15.3 168,218 99 EAGLEVILLE 1973 FEE 15.2 165,385 100 EASTWICK 1997 FEE 3.4 36,511 100 EXTON 1996 FEE 9.8 85,184 100 FEASTERVILLE 1996 FEE 4.6 86,575 100 GETTYSBURG 1986 FEE 2.3 30,706 94 HARRISBURG 1972 FEE/JOINT VENTURE 17.0 175,917 100 HARRISBURG 1972 FEE 11.7 152,565 100 HAVERTOWN 1996 FEE 9.0 80,938 100 LANDSDALE 1996 GROUND LEASE (2037) 1.4 84,470 100 MIDDLETOWN 1973 FEE 21.9 140,481 73 MIDDLETOWN 1986 FEE 4.7 35,747 81 NEW KENSINGTON 1986 FEE 12.5 106,624 99 PENN HILLS 1986 GROUND LEASE (2027) 31.1 110,517 100 PHILADELPHIA 1983 FEE/JOINT VENTURE 8.1 214,970 97 PHILADELPHIA 1995 FEE/JOINT VENTURE 22.6 275,033 99 PHILADELPHIA 1996 FEE 6.3 82,345 100 PHILADELPHIA 1996 GROUND LEASE (2035) 6.8 133,309 100 RICHBORO 1986 FEE 14.5 107,817 88 SCOTT TOWNSHIP 1999 GROUND LEASE (2052) 6.9 69,288 100 SPRINGFIELD 1983 FEE 19.7 218,907 100 TREXLERTOWN 1998 GROUND LEASE (2048)/ J0INT VENTURE 1.2 41,680 86

MAJOR LEASES ---------------------------------------------------- LEASE OPTION LOCATION TENANT NAME EXPIRATION EXPIRATION -------------------------------------------------------------------------------------- OHIO AKRON GIANT EAGLE 2021 2041 AKRON GABRIEL BROTHER 2005 2025 AKRON GIANT EAGLE 2002 2017 AKRON BARBERTON GIANT EAGLE 2021 2051 BEAVERCREEK KROGER 2018 2048 BEDFORD LEVIN FURNITURE 2002 2012 BROOKLYN AMES (10) BRUNSWICK KMART 2005 2050 CAMBRIDGE QUALITY STORES (TJX) 2010 2020 CANTON CINEMARK 2003 CANTON BURLINGTON COAT 2018 2043 CANTON CANTON CENTERVILLE BED BATH & BEYOND 2017 2032 CINCINNATI (3) CIRCUIT CITY 2008 2031 CINCINNATI HOBBY LOBBY 2011 2021 CINCINNATI (8) WAL-MART 2010 2040 CINCINNATI BURLINGTON COAT 2005 2025 CINCINNATI SERVICE MERCHANDISE 2007 2012 CINCINNATI (3) BIGGS FOODS 2008 2028 CLEVELAND ALDI 2003 2023 COLUMBUS SPEEDS 2003 2011 COLUMBUS KOHLS 2011 2031 COLUMBUS KOHLS 2011 2031 COLUMBUS KOHLS 2011 2031 COLUMBUS KOHLS 2011 2031 COLUMBUS SOUTHLAND EXPO 2004 COLUMBUS (4) COLUMBUS (8) BORDER BOOKS 2018 2038 DAYTON BEST BUY 2004 2024 DAYTON VICTORIA'S SECRET 2004 2019 DAYTON VALUE CITY 2010 2020 DAYTON (4) SHOWCASE CINEMA 2020 2050 DAYTON VALUE CITY 2010 2015 HUBER HEIGHTS (8) ELDER BEERMAN 2014 2044 KENT TOPS SUPERMARKET 2026 2096 LIMA RAYS SUPERMARKET 2011 2026 MENTOR AMES (10) MENTOR GIANT EAGLE 2019 2029 MIDDLEBURG HEIGHTS NORTH OLMSTEAD TOPS SUPERMARKET 2026 2096 SHARONVILLE KMART 2004 2054 SPRINGBORO PIKE RHODES FURNITURE 2013 2028 SPRINGDALE (8) WAL-MART 2015 2045 SPRINGFIELD KMART 2010 2030 UPPER ARLINGTON TJ MAXX 2011 2021 WESTERVILLE KOHLS 2016 2036 WICKLIFFE GABRIEL BROTHERS 2008 2023 WILLOUGHBY HILLS MARCS DRUGS 2012 2017 OKLAHOMA EDMOND KMART 2024 2054 MIDWEST CITY KMART 2024 2054 NORMAN (8) BED BATH & BEYOND 2010 2030 OKLAHOMA CITY HOME DEPOT 2014 2044 TULSA KMART 2021 2051 PENNSYLVANIA EXTON ACME MARKETS 2015 2045 BLUE BELL KOHLS 2016 2036 CHIPPEWA KMART 2018 2068 DUQUESNE PAT CATANS CRAFTS 2005 E. NORRITON SHOPRITE 2017 2037 E. STROUDSBURG KMART 2002 2022 EAGLEVILLE KMART 2004 2019 EASTWICK MERCY HOSPITAL 2012 2022 EXTON KOHLS 2016 2036 FEASTERVILLE VALUE CITY 2011 2026 GETTYSBURG GIANT FOOD 2005 2010 HARRISBURG AMES 2003 2033 HARRISBURG AMES 2002 2032 HAVERTOWN KOHLS 2016 2036 LANDSDALE KOHLS 2012 MIDDLETOWN SHARP SHOPPER 2010 2015 MIDDLETOWN US POST OFFICE 2016 2026 NEW KENSINGTON GIANT EAGLE 2006 2026 PENN HILLS AMES 2017 2026 PHILADELPHIA JC PENNEY 2012 2037 PHILADELPHIA PETSMART 2006 2016 PHILADELPHIA KMART 2016 2036 PHILADELPHIA KMART 2010 2035 RICHBORO SUPER FRESH 2018 2058 SCOTT TOWNSHIP WAL-MART 2015 2052 SPRINGFIELD VALUE CITY 2013 2043 TREXLERTOWN LEHIGH VALLEY HEALTH 2008 2023

MAJOR LEASES ----------------------------------------------------------------------------- LEASE OPTION LOCATION TENANT NAME EXPIRATION EXPIRATION ---------------------------------------------------------------------------------------------------------- OHIO AKRON AKRON PAT CATANS CRAFTS 2003 2013 AKRON AKRON BARBERTON BEAVERCREEK BEDFORD BROOKLYN ALMOST FREE 2010 2000 BRUNSWICK GIANT EAGLE 2006 2031 CAMBRIDGE KROGER 2004 2014 CANTON DOLLAR GENERAL 2003 2012 CANTON TJ MAXX 2007 2017 CANTON CANTON CENTERVILLE ODD JOB 2007 2017 CINCINNATI (3) BIG LOTS 2004 2019 CINCINNATI CINCINNATI (8) THRIFTWAY 2006 2026 CINCINNATI TOYS R US 2019 2044 CINCINNATI TOYS R US 2016 2046 CINCINNATI (3) CLEVELAND COLUMBUS COLUMBUS TOYS R US 2015 2040 COLUMBUS STAPLES 2005 2010 COLUMBUS GRANT/RIVERSIDE METHODIST HOSP. 2011 COLUMBUS CIRCUIT CITY 2019 2039 COLUMBUS COLUMBUS (4) COLUMBUS (8) ZANY BRAINY 2007 2017 DAYTON JOANN FABRICS 2007 2017 DAYTON JOANN FABRICS 2006 2016 DAYTON CIRCUIT CITY 2018 2038 DAYTON (4) DAYTON HUBER HEIGHTS (8) KOHLS 2015 2035 KENT LIMA BUCKEYE DISCOUNT 2004 2024 MENTOR MENTOR BURLINGTON COAT 2014 MIDDLEBURG HEIGHTS NORTH OLMSTEAD SHARONVILLE KROGER 2003 2028 SPRINGBORO PIKE OFFICEMAX 2002 2022 SPRINGDALE (8) OFFICEMAX 2009 2024 SPRINGFIELD HOBBY LOBBY 2010 2020 UPPER ARLINGTON PEDDLERS VILLAGE 2008 WESTERVILLE OFFICEMAX 2002 2022 WICKLIFFE BIG LOTS 2005 2010 WILLOUGHBY HILLS OKLAHOMA EDMOND MIDWEST CITY NORMAN (8) BARNES & NOBLES 2012 2027 OKLAHOMA CITY BEST BUY 2008 2023 TULSA PENNSYLVANIA EXTON BLUE BELL SEARS HARDWARE 2002 2007 CHIPPEWA HOME DEPOT 2018 2068 DUQUESNE RED, WHITE & BLUE 2005 E. NORRITON STAPLES 2008 2023 E. STROUDSBURG WEIS MARKETS 2002 2012 EAGLEVILLE SAFEWAY 2011 2026 EASTWICK EXTON FEASTERVILLE GETTYSBURG HARRISBURG MEDIA PLAY 2011 2026 HARRISBURG BIG LOTS 2015 2045 HAVERTOWN LANDSDALE MIDDLETOWN ELECTRONICS INSTITUTE 2002 MIDDLETOWN NEW KENSINGTON PENN HILLS PHILADELPHIA TOYS R US 2007 2052 PHILADELPHIA AMC THEATERS 2003 2023 PHILADELPHIA PHILADELPHIA RICHBORO DOLLAR TREE 2007 2017 SCOTT TOWNSHIP SPRINGFIELD STAPLES 2008 2023 TREXLERTOWN

MAJOR LEASES ------------------------------------------------------------------- LEASE OPTION LOCATION TENANT NAME EXPIRATION EXPIRATION ----------------------------------------------------------------------------------------------- OHIO AKRON AKRON AKRON AKRON BARBERTON BEAVERCREEK BEDFORD BROOKLYN BRUNSWICK CAMBRIDGE CANTON CANTON CANTON CANTON CENTERVILLE CINCINNATI (3) OFFICE DEPOT 2004 2024 CINCINNATI CINCINNATI (8) DICKS SPORTING 2016 2031 CINCINNATI CINCINNATI LINENS N THINGS 2005 2015 CINCINNATI (3) CLEVELAND COLUMBUS COLUMBUS KROGER 2031 2071 COLUMBUS COLUMBUS COLUMBUS COLUMBUS COLUMBUS (4) COLUMBUS (8) DAYTON BIG LOTS 2002 2008 DAYTON DAYTON DAYTON (4) DAYTON HUBER HEIGHTS (8) MARSHALLS 2009 2024 KENT LIMA MENTOR MENTOR JOANN FABRICS 2009 2019 MIDDLEBURG HEIGHTS NORTH OLMSTEAD SHARONVILLE SPRINGBORO PIKE SPRINGDALE (8) SPRINGFIELD UPPER ARLINGTON CVS 2019 2039 WESTERVILLE WICKLIFFE DOLLAR GENERAL 2004 WILLOUGHBY HILLS OKLAHOMA EDMOND MIDWEST CITY NORMAN (8) OFFICEMAX 2011 2031 OKLAHOMA CITY TULSA PENNSYLVANIA EXTON BLUE BELL CHIPPEWA DUQUESNE ECKERD 2004 E. NORRITON JOANN FABRICS 2007 2017 E. STROUDSBURG EAGLEVILLE EASTWICK EXTON FEASTERVILLE GETTYSBURG HARRISBURG SUPERPETZ 2002 2022 HARRISBURG HAVERTOWN LANDSDALE MIDDLETOWN MIDDLETOWN NEW KENSINGTON PENN HILLS PHILADELPHIA PHILADELPHIA SUPER FRESH 2022 2052 PHILADELPHIA PHILADELPHIA RICHBORO RITE AID 2007 2017 SCOTT TOWNSHIP SPRINGFIELD JOANN FABRICS 2006 2016 TREXLERTOWN

22

YEAR OWNERSHIP LEASABLE PERCENT DEVELOPED INTEREST/ LAND AREA AREA LEASED LOCATION OR ACQUIRED (EXPIRATION)(2) (ACRES) (SQ. FT.) (1) ---------------------------------------------------------------------------------------------- UPPER ALLEN 1986 FEE 6.0 59,470 89 UPPER DARBY 1996 FEE/JOINT VENTURE 16.3 48,936 99 WEST MIFFLIN 1974 FEE 21.9 193,878 51 WEST MIFFLIN 1986 FEE 8.3 84,279 94 WHITEHALL 1996 GROUND LEASE (2081) 6.0 84,524 100 YORK 1986 FEE 8.0 61,979 92 YORK 1986 FEE 13.7 53,011 100 YORK 1986 FEE 3.3 35,500 100 RHODE ISLAND CRANSTON 1998 FEE 11.0 129,907 91 SOUTH CAROLINA AIKEN 1989 FEE 16.6 11,200 33 CHARLESTON 1978 FEE 17.6 165,973 88 CHARLESTON 1995 FEE 17.2 186,000 90 FLORENCE 1997 FEE 21.0 113,922 100 GREENVILLE 1997 FEE 20.4 148,532 64 N. CHARLESTON 2000/1997 FEE 27.3 267,102 79 TENNESSEE MEMPHIS 2000 OTH 8.8 87,962 100 CHATTANOOGA 1973 GROUND LEASE (2073) 7.6 44,288 64 MADISON (8) 1999 FEE 21.1 189,299 99 MADISON 1978 GROUND LEASE (2039) 14.5 182,256 70 MEMPHIS (8) 2001 FEE 3.9 40,000 100 MEMPHIS 1998 FEE 14.7 167,243 98 NASHVILLE (8) 1999 FEE 9.3 99,909 100 NASHVILLE 1998 FEE 10.2 109,012 97 NASHVILLE 1998 FEE 16.9 171,236 70 TEXAS AMARILLO (8) 1997 FEE 9.3 342,859 99 ARLINGTON 1997 FEE 8.0 96,127 100 AUSTIN (8) 1998 FEE 18.2 191,760 100 AUSTIN 1998 FEE 15.4 153,625 85 BAYTOWN 1996 FEE 8.7 86,240 100 BURLESON (4) 2000 FEE 54.6 225,000 100 CEDAR HILL CROSSING (4) 1998 FEE 26.0 174,000 100 CORSICANA 1997 FEE 10.3 350,000 100 DALLAS 1969 FEE/JOINT VENTURE 75.0 581,595 15 DALLAS (8) 1998 FEE 6.8 83,867 100 DUNCANVILLE 1996 FEE 6.8 96,500 100 E. PLANO 1996 FEE 9.0 97,798 100 FT. WORTH 1996 FEE 12.6 106,000 100 GARLAND (8) 1998 FEE 6.3 62,000 60 GARLAND 1996 FEE 2.9 41,364 100 GARLAND 1996 FEE 8.8 103,600 100 HOUSTON 1973 FEE 4.3 45,494 100 HOUSTON (4) 2001 FEE/JOINT VENTURE 23.8 - - HOUSTON 1998 FEE 40.0 405,758 87 HOUSTON 1997 FEE 8.0 113,831 92 HOUSTON 1999 FEE 5.6 84,188 100 HOUSTON 1996 FEE 8.8 106,000 100 HOUSTON 1997 FEE 8.2 106,295 100 LEWISVILLE 1998 FEE 11.2 74,837 92 LEWISVILLE 1998 FEE 7.6 124,089 56 LEWISVILLE 1998 FEE 9.4 93,668 66 LUBBOCK 1998 FEE 9.6 108,326 98 MESQUITE 1974 FEE 9.0 79,550 94 MESQUITE 1998 FEE 15.0 209,580 67 N. ARLINGTON 1996 FEE 8.0 97,000 100 NORTH RICHLAND HILLS (5) 1997 FEE 9.2 - - PASADENA (8) 1999 FEE 15.1 169,203 100 PASADENA 2001 FEE 24.6 240,706 73 RICHARDSON (8) 1998 FEE 11.7 112,604 100 SAN ANTONIO (4) 1999 FEE/JOINT VENTURE 147.6 513,000 97 W. OAKS - HOUSTON 1996 FEE 8.2 96,500 100 UTAH OGDEN 1967 FEE 11.4 121,449 88 VIRGINIA COLONIAL HEIGHTS 1999 FEE 6.1 60,909 100 FAIRFAX (8) 1998 FEE 37.0 323,262 100 HARRISONBURG 1999 FEE 3.1 31,111 100 MANASSAS 1997 FEE 13.5 117,525 99 RICHMOND 1995 FEE 11.5 121,550 100 RICHMOND 1999 FEE 8.5 84,683 - WOODBRIDGE 1973 GROUND LEASE(2072)/ JOINT VENTURE 19.6 187,063 98 WOODBRIDGE (8) 1998 FEE 54.0 480,001 98 WASHINGTON BELLINGHAM (8) 1998 FEE 20.0 188,885 98 FEDERAL WAY (8) 2000 FEE 17.0 200,209 99 WEST VIRGINIA CHARLES TOWN 1985 FEE 22.0 206,208 100 CHARLESTON 1999 FEE 14.8 134,943 99 MARTINSBURG 1986 FEE 6.0 43,212 100 WISCONSIN RACINE 1988 FEE 14.2 156,430 93

MAJOR LEASES ----------------------------------------------------- LEASE OPTION LOCATION TENANT NAME EXPIRATION EXPIRATION -------------------------------------------------------------------------------------- UPPER ALLEN GIANT FOOD 2010 2030 UPPER DARBY MERCY HOSPITAL 2012 2022 WEST MIFFLIN GIANT EAGLE 2014 2039 WEST MIFFLIN AMES 2007 2032 WHITEHALL KOHLS 2016 2036 YORK SUPERPETZ PET 2004 2009 YORK GIANT FOOD 2006 2026 YORK GIANT FOOD 2007 2017 RHODE ISLAND CRANSTON BOB'S STORES 2003 2028 SOUTH CAROLINA AIKEN CHARLESTON STEIN MART 2006 2016 CHARLESTON TJ MAXX 2004 FLORENCE HAMRICKS 2006 2011 GREENVILLE BABIES R US 2002 2022 N. CHARLESTON SPORTS AUTHORITY 2013 2033 TENNESSEE MEMPHIS OLD TIME POTTERY 2010 2025 CHATTANOOGA ECHOLS FURNITURE 2002 MADISON (8) SPORTS AUTHORITY 2013 2028 MADISON OLD TIME POTTERY 2006 2006 MEMPHIS (8) BED BATH & BEYOND 2012 2027 MEMPHIS TOYS R US 2017 2042 NASHVILLE (8) BEST BUY 2014 2029 NASHVILLE MARSHALLS 2004 2010 NASHVILLE STEIN MART 2003 2013 TEXAS AMARILLO (8) HOME DEPOT 2019 2109 ARLINGTON HOBBY LOBBY 2008 2018 AUSTIN (8) CIRCUIT CITY 2017 2037 AUSTIN HEB GROCERY 2006 2026 BAYTOWN HOBBY LOBBY 2008 2018 BURLESON (4) KOHLS 2023 2053 CEDAR HILL CROSSING (4) KOHLS 2021 2041 CORSICANA KOHLS 2021 2061 DALLAS DALLAS (8) ROSS STORES 2007 2017 DUNCANVILLE KMART 2021 2051 E. PLANO HOME DEPOT EXPO 2024 2054 FT. WORTH KMART 2021 2051 GARLAND (8) OFFICE DEPOT 2006 2021 GARLAND KROGER 2005 2025 GARLAND KMART 2021 2051 HOUSTON KROGER 2002 2012 HOUSTON (4) HOUSTON HOBBY LOBBY 2012 2032 HOUSTON HEB PANTRY STORE 2007 2027 HOUSTON OFFICE DEPOT 2002 2012 HOUSTON KMART 2021 2051 HOUSTON HOME DEPOT 2024 2054 LEWISVILLE BALLYS TOTAL FITNESS 2007 2022 LEWISVILLE BABIES R US 2009 2027 LEWISVILLE DSW SHOES 2008 2028 LUBBOCK PETSMART 2015 2040 MESQUITE KROGER 2012 2037 MESQUITE BEST BUY 2009 2024 N. ARLINGTON KMART 2021 2051 NORTH RICHLAND HILLS (5) PASADENA (8) PETSMART 2015 2030 PASADENA BEST BUY 2012 2027 RICHARDSON (8) OFFICEMAX 2011 2026 SAN ANTONIO (4) TOYS R US 2016 2041 W. OAKS - HOUSTON KMART 2021 2051 UTAH OGDEN KMART 2002 VIRGINIA COLONIAL HEIGHTS BLOOM BROS 2008 FAIRFAX (8) HOME DEPOT 2013 2033 HARRISONBURG STAPLES 2004 2024 MANASSAS SUPER FRESH 2006 2026 RICHMOND BURLINGTON COAT 2006 2035 RICHMOND WOODBRIDGE AMES 2006 2021 WOODBRIDGE (8) LOWES 2012 2032 WASHINGTON BELLINGHAM (8) BON HOME STORE 2012 2022 FEDERAL WAY (8) ASSOCIATED 2015 2045 WEST VIRGINIA CHARLES TOWN WAL-MART 2017 2047 CHARLESTON KROGER 2008 2038 MARTINSBURG GIANT FOOD 2010 2030 WISCONSIN RACINE PIGGLY WIGGLY 2003 2009

MAJOR LEASES -------------------------------------------------------------------------------- LEASE OPTION LOCATION TENANT NAME EXPIRATION EXPIRATION ------------------------------------------------------------------------------------------------------------ UPPER ALLEN CVS 2008 UPPER DARBY WEST MIFFLIN FASHION BUG 2006 2026 WEST MIFFLIN WHITEHALL YORK ECKERD 2004 YORK CVS 2005 2020 YORK RITE AID 2002 2012 RHODE ISLAND CRANSTON MARSHALLS 2011 2021 SOUTH CAROLINA AIKEN CHARLESTON BY THE YARD 2006 2016 CHARLESTON OFFICE DEPOT 2006 2016 FLORENCE STAPLES 2010 2035 GREENVILLE N. CHARLESTON MARSHALLS 2003 2013 TENNESSEE MEMPHIS CHATTANOOGA MADISON (8) BEST BUY 2014 2029 MADISON MEMPHIS (8) MEMPHIS OFFICEMAX 2008 2028 NASHVILLE (8) OFFICEMAX 2015 2035 NASHVILLE OFFICEMAX 2004 2019 NASHVILLE TEXAS AMARILLO (8) KMART 2024 2054 ARLINGTON AUSTIN (8) BABIES R US 2012 2027 AUSTIN ACE HARDWARE 2006 2026 BAYTOWN ROSS STORES 2012 2032 BURLESON (4) CEDAR HILL CROSSING (4) STAPLES 2015 2030 CORSICANA DALLAS DALLAS (8) KMART 2009 2024 DUNCANVILLE E. PLANO FT. WORTH GARLAND (8) GARLAND GARLAND HOUSTON HOUSTON (4) HOUSTON OSHMAN SPORTING 2009 2024 HOUSTON PALAIS ROYAL 2007 2022 HOUSTON METROPOLITAN FURNITURE 2013 2023 HOUSTON HOUSTON LEWISVILLE LEWISVILLE LEWISVILLE PETLAND 2009 2019 LUBBOCK OFFICEMAX 2009 2029 MESQUITE AUTO ZONE 2003 2013 MESQUITE PETSMART 2007 2027 N. ARLINGTON NORTH RICHLAND HILLS (5) PASADENA (8) OFFICEMAX 2014 2029 PASADENA ROSS STORES 2012 2032 RICHARDSON (8) BALLYS TOTAL FITNESS 2009 2019 SAN ANTONIO (4) BEST BUY 2016 2031 W. OAKS - HOUSTON UTAH OGDEN VIRGINIA COLONIAL HEIGHTS BOOKS-A-MILLION 2008 2015 FAIRFAX (8) COSTCO 2011 2046 HARRISONBURG CIRCUIT CITY 2003 2013 MANASSAS JOANN FABRICS 2003 2013 RICHMOND RICHMOND WOODBRIDGE CAMPOS FURNITURE 2002 WOODBRIDGE (8) SHOPPERS FOOD 2009 2044 WASHINGTON BELLINGHAM (8) BEST BUY 2017 2032 FEDERAL WAY (8) JOANN FABRICS 2010 2030 WEST VIRGINIA CHARLES TOWN STAPLES 2008 2018 CHARLESTON TJ MAXX 2006 2021 MARTINSBURG CVS 2003 2008 WISCONSIN RACINE BIG LOTS 2005 2015

MAJOR LEASES -------------------------------------------------------------------- LEASE OPTION LOCATION TENANT NAME EXPIRATION EXPIRATION ----------------------------------------------------------------------------------------------- UPPER ALLEN COCOS 2005 UPPER DARBY WEST MIFFLIN DOLLAR GENERAL 2004 WEST MIFFLIN WHITEHALL YORK YORK FAMILY DOLLAR 2003 2013 YORK RHODE ISLAND CRANSTON SOUTH CAROLINA AIKEN CHARLESTON CHARLESTON FLORENCE ATHLETES FOOT 2007 2017 GREENVILLE N. CHARLESTON TJ MAXX 2003 2008 TENNESSEE MEMPHIS CHATTANOOGA MADISON (8) GOODYS 2010 2020 MADISON MEMPHIS (8) MEMPHIS NASHVILLE (8) NASHVILLE NASHVILLE TEXAS AMARILLO (8) CIRCUIT CITY 2010 2035 ARLINGTON AUSTIN (8) AUSTIN FIRESTONE 2006 2011 BAYTOWN BURLESON (4) CEDAR HILL CROSSING (4) CORSICANA DALLAS DALLAS (8) DUNCANVILLE E. PLANO FT. WORTH GARLAND (8) GARLAND GARLAND HOUSTON HOUSTON (4) HOUSTON BED BATH & BEYOND 2009 2019 HOUSTON HOUSTON JUST FOR FEET 2013 2023 HOUSTON HOUSTON LEWISVILLE LEWISVILLE LEWISVILLE LUBBOCK BARNES & NOBLE 2010 2025 MESQUITE MESQUITE N. ARLINGTON NORTH RICHLAND HILLS (5) PASADENA (8) MICHAELS 2009 2024 PASADENA BED BATH & BEYOND 2012 2027 RICHARDSON (8) NORTHERN STORES 2004 2014 SAN ANTONIO (4) LINENS N THINGS 2011 2021 W. OAKS - HOUSTON UTAH OGDEN VIRGINIA COLONIAL HEIGHTS FAIRFAX (8) SPORTS AUTHORITY 2003 2013 HARRISONBURG MANASSAS RICHMOND RICHMOND WOODBRIDGE WOODBRIDGE (8) BORDER BOOKS 2019 2039 WASHINGTON BELLINGHAM (8) TJ MAXX 2007 2012 FEDERAL WAY (8) BARNES & NOBLE 2011 2026 WEST VIRGINIA CHARLES TOWN CHARLESTON MARTINSBURG WISCONSIN RACINE HOBO 2004 2014

23

YEAR OWNERSHIP LEASABLE PERCENT DEVELOPED INTEREST/ LAND AREA AREA LEASED LOCATION OR ACQUIRED (EXPIRATION)(2) (ACRES) (SQ. FT.) (1) --------------------------------------------------------------------------------------------- CANADA BRITISH COLUMBIA ABBOTSFORD 2001 FEE/JOINT VENTURE 9.4 94,126 97 SURREY 2001 FEE/JOINT VENTURE 12.7 126,759 91 PRINCE GEORGE 2001 FEE/JOINT VENTURE 18.6 186,363 98 MISSION 2001 FEE/JOINT VENTURE 8.6 85,505 98 TOTAL 468 PROPERTY INTERESTS 7517.0 66,444,814 ACQUISITIONS SUBSEQUENT TO DECEMBER 31, 2001 ARIZONA CHANDLER (4) 2002 FEE/JOINT VENTURE 10.8 - - NORTH CAROLINA DURHAM (4) 2002 FEE/JOINT VENTURE 21.3 - - CANADA BRITISH COLUMBIA CALGARY 2002 FEE/JOINT VENTURE 15.3 153,173 100 RETAIL STORE LEASES (7) 1995/1997 LEASEHOLD - 4,475,953 ---------------------- GRAND TOTAL 520 PROPERTY INTERESTS 7,564.4 71,073,940 =======================

MAJOR LEASES ---------------------------------------------------- LEASE OPTION LOCATION TENANT NAME EXPIRATION EXPIRATION ------------------------------------------------------------------------------------ CANADA BRITISH COLUMBIA ABBOTSFORD SAFEWAY 2007 2037 SURREY OVERWAITEE 2018 2028 PRINCE GEORGE OVERWAITEE 2018 2028 MISSION CANADA SAFEWAY 2011 2061 TOTAL 468 PROPERTY INTERESTS ACQUISITIONS SUBSEQUENT TO DECEMBER 31, 2001 ARIZONA CHANDLER (4) NORTH CAROLINA DURHAM (4) CANADA BRITISH COLUMBIA CALGARY LINENS 'N THINGS 2015 2025 RETAIL STORE LEASES (7) GRAND TOTAL 520 PROPERTY INTERESTS

MAJOR LEASES -------------------------------------------------------------------------- LEASE OPTION LOCATION TENANT NAME EXPIRATION EXPIRATION ----------------------------------------------------------------------------------------------------- CANADA BRITISH COLUMBIA ABBOTSFORD STAPLES 2012 2022 SURREY OVERWAITEE GAS BAR 2018 2028 PRINCE GEORGE OVERWAITEE GAS BAR 2017 2027 MISSION LONDON DRUGS 2011 2021 TOTAL 468 PROPERTY INTERESTS ACQUISITIONS SUBSEQUENT TO DECEMBER 31, 2001 ARIZONA CHANDLER (4) NORTH CAROLINA DURHAM (4) CANADA BRITISH COLUMBIA CALGARY WINNERS 2009 2024 RETAIL STORE LEASES (7) GRAND TOTAL 520 PROPERTY INTERESTS

MAJOR LEASES -------------------------------------------------------------------- LEASE OPTION LOCATION TENANT NAME EXPIRATION EXPIRATION ----------------------------------------------------------------------------------------------- CANADA BRITISH COLUMBIA ABBOTSFORD HONG KONG BANK 2007 2022 SURREY FAMOUS PLAYERS 2010 2030 PRINCE GEORGE THE BAY 2013 2083 MISSION CALIFORNIA SUBS 2002 2012 TOTAL 468 PROPERTY INTERESTS ACQUISITIONS SUBSEQUENT TO DECEMBER 31, 2001 ARIZONA CHANDLER (4) NORTH CAROLINA DURHAM (4) CANADA BRITISH COLUMBIA CALGARY BUSINESS DEPOT 2013 2028 RETAIL STORE LEASES (7) GRAND TOTAL 520 PROPERTY INTERESTS

(1) PERCENT LEASED INFORMATION AS OF DECEMBER 31, 2001 OR DATE OF ACQUISITION IF ACQUIRED SUBSEQUENT TO DECEMBER 31, 2001. (2) THE TERM "JOINT VENTURE" INDICATES THAT THE COMPANY OWNS THE PROPERTY IN CONJUNCTION WITH ONE OR MORE JOINT VENTURE PARTNERS. THE DATE INDICATED IS THE EXPIRATION DATE OF ANY GROUND LEASE AFTER GIVING AFFECT TO ALL RENEWAL PERIODS. (3) DENOTES REDEVELOPMENT PROJECT. (4) DENOTES GROUND-UP DEVELOPMENT PROJECT. THE SQUARE FOOTAGE SHOWN REPRESENTS ONLY THE COMPLETED PORTION OF THE PROJECT. (5) DENOTES UNDEVELOPED LAND. (6) SOLD OR TERMINATED SUBSEQUENT TO DECEMBER 31, 2001. (7) THE COMPANY HOLDS INTERESTS IN VARIOUS RETAIL STORE LEASES RELATED TO THE ANCHOR STORE PREMISES IN NEIGHBORHOOD AND COMMUNITY SHOPPING CENTERS. (8) DENOTES PROPERTY INTEREST IN KIMCO INCOME REIT ("KIR"). (9) 272,570 SQ. FT. OF THIS PROPERTY IS 100% OWNED BY KIMCO. (10) LEASE REJECTED SUBSEQUENT TO DECEMBER 31, 2001. 24 Executive Officers and Other Significant Employees of the Registrant The following table sets forth information with respect to the executive officers and other significant employees of the Company as of February 1, 2002. Name Age Position Since Milton Cooper 73 Chairman of the Board of 1991 Directors and Chief Executive Officer Michael J. Flynn 66 Vice Chairman of the 1996 Board of Directors and President and Chief 1997 Operating Officer David B. Henry 53 Vice Chairman of the 2001 Board of Directors and Chief Investment Officer Patrick Callan, Jr. 39 Vice President - 1998 Eastern Region Thomas A. Caputo 55 Executive Vice President 2000 Glenn G. Cohen 38 Vice President - 2000 Treasurer 1997 Joseph V. Denis 50 Vice President - 1993 Construction Raymond Edwards 39 Vice President - 2001 Retail Property Solutions Jerald Friedman 57 President, KDI and 2000 Executive Vice President 1998 Bruce M. Kauderer 55 Vice President - Legal 1995 General Counsel and 1997 Secretary Mitchell Margolis 41 Vice President - 2001 Chief Information Officer Robert Nadler 43 President - 2000 Midwest Region Scott G. Onufrey 36 Vice President - 2001 Investor Relations Michael V. Pappagallo 43 Vice President - 1997 Chief Financial Officer Josh N. Smith 37 President - 2001 Western Region Paul Weinberg 57 Vice President - 2000 Human Resources Joel Yarmak 52 Vice President - 2000 Financial Operations Michael J. Flynn has been President and Chief Operating Officer since January 2, 1997, Vice Chairman of the Board of Directors since January 2, 1996 and a Director of the Company since December 1, 1991. Mr. Flynn was Chairman of the Board and President of Slattery Associates, Inc. for more than five years prior to joining the Company. David B. Henry has been Chief Investment Officer since April 2001 and Vice Chairman of the Board of Directors since May 2001. Mr. Henry served as the Chief Investment Officer and Senior Vice President of General Electric's GE Capital Real Estate business and Chairman of GE Capital Investment Advisors for more than five years prior to joining the Company. 25 Patrick Callan, Jr. has been a Vice President of the Company since May 1998. Mr. Callan was a Director of Leasing of the Company for more than five years prior to 1998. Thomas A. Caputo has been Executive Vice President of the Company since December 2000. Mr. Caputo was a principal with H & R Retail from January 2000 to December 2000. Mr. Caputo was a principal with the RREEF Funds, a pension advisor, for more than five years prior to January 2000. Glenn G. Cohen has been a Vice President of the Company since May 2000 and Treasurer of the Company since June 1997. Mr. Cohen served as Director of Accounting and Taxation of the Company from June 1995 to June 1997. Prior to joining the Company in June 1995, Mr. Cohen served as Chief Operating Officer and Chief Financial Officer for U.S. Balloon Manufacturing Co., Inc. from August 1993 to June 1995. Raymond Edwards has been Vice President - Retail Property Solutions since July 2001. Prior to joining the Company in July 2001, Mr. Edwards was Senior Vice President, Managing Director of SBC Group from 1998 to July 2001. SBC Group is a privately held company that acquires and invests in assets of retail companies. Previously, Mr. Edwards worked for 13 years at Keen Realty Consultants Inc. handling the marketing and disposition of real estate for retail operators including Caldor, Bonwit Teller, Alexander's and others. Jerald Friedman has been President of the Company's KDI subsidiary since April 2000 and Executive Vice President of the Company since June 1998. Mr. Friedman was Senior Executive Vice President and Chief Operating Officer of The Price REIT, Inc. from January 1997 to June 1998. From 1994 through 1996, Mr. Friedman was the Chairman and Chief Executive Officer of K & F Development Company, an affiliate of The Price REIT, Inc. Bruce M. Kauderer has been a Vice President of the Company since June 1995 and since December 15, 1997, General Counsel and Secretary of the Company. Mr. Kauderer was a founder of and partner with Kauderer & Pack P.C. from 1992 to June 1995. Mitchell Margolis has been a Vice President of the Company since January 2001. Mr. Margolis was the Chief Information Officer with Tishman Speyer Properties for more than five years prior to joining the Company. Robert Nadler has been President - Midwest Region of the Company since June 2000 and was a Vice President of the Company from June 1998 to June 2000. Prior to joining the Company, Mr. Nadler was Senior Vice President at LaSalle Partners from April 1994 to June 1998. Scott Onufrey has been a Vice President of the Company since October 2001. Mr. Onufrey served as Director of Investor Relations of the Company from March 1999 to September 2001. Mr. Onufrey was Vice President in J.P. Morgan Investment Management's real estate group from October 1995 to March 1999. Michael V. Pappagallo has been a Vice President and Chief Financial Officer of the Company since May 27, 1997. Mr. Pappagallo was Chief Financial Officer of GE Capital's Commercial Real Estate Financial and Services business from September 1994 to May 1997 and held various other positions within GE Capital for more than five years prior to joining the Company. Josh N. Smith has been President - Western Region of the Company since March 2001. Prior to joining the Company, Mr. Smith was Chief Investment Officer and Senior Vice President at Western Properties Trust from February 1998 to November 2000. Previously, Mr. Smith was Senior Vice President of Pacific Retail Trust from December 1996 to February 1998. Paul Weinberg has been a Vice President of the Company since May 2000. Mr. Weinberg served as Director of Human Resources of the Company from January 1997 to May 2000. Mr. Weinberg was Vice President of Employee and Labor Relations at American Express for more than five years prior to joining the Company. Joel Yarmak has been a Vice President of the Company since June 2000. Mr. Yarmak served as a partner at Rubin & Katz LLP from August 1998 to June 2000 and Chief Financial Officer at Solow Realty from August 1997 to July 1998. Mr. Yarmak was a partner with Deloitte & Touche for more than five years prior to August 1997. The executive officers of the Company serve in their respective capacities for approximate one-year terms and are subject to re-election by the Board of Directors, generally at the time of the Annual Meeting of the Board of Directors following the Annual Meeting of Stockholders. 26 PART II Item 5. Market for the Registrant's Common Equity and Related Shareholder Matters Market Information The following table sets forth the common stock offerings completed by the Company during the three year period ended December 31, 2001. The Company's common stock was sold for cash at the following offering prices per share. Offering Date Offering Price ------------- -------------- August 2000 $28.33 November 2001 $32.85 December 2001 $33.57 The table below sets forth, for the quarterly periods indicated, the high and low sales prices per share reported on the NYSE Composite Tape for the Company's common stock. The Company's common stock is traded under the trading symbol "KIM ". Stock Price ----------- Period High Low ------ ---- ---- 2000: First Quarter $25.00 $21.83 Second Quarter $28.46 $24.17 Third Quarter $28.54 $26.09 Fourth Quarter $29.83 $26.00 2001: First Quarter $30.08 $27.17 Second Quarter $31.57 $27.33 Third Quarter $33.30 $29.50 Fourth Quarter $34.07 $21.67 Holders The number of holders of record of the Company's common stock, par value $0.01 per share, was 1,715 as of February 1, 2002. Dividends Since the IPO, the Company has paid regular quarterly dividends to its stockholders. Quarterly dividends at the rate of $0.44 per share were declared and paid on December 7, 1999 and January 18, 2000 and March 15, 2000 and April 17, 2000 and June 15, 2000 and July 17, 2000, respectively. On September 15, 2000 and October 16, 2000, the Company declared and paid its quarterly dividend at an increased rate of $0.45 per share, respectively. On December 4, 2000, the Company declared its dividend payable during the first quarter of 2001 at an increased rate of $0.48 per share payable on January 16, 2001 to shareholders of record January 2, 2001. Quarterly dividends at the rate of $0.48 per share were declared and paid on March 15, 2001 and April 16, 2001 and June 15, 2001 and July 16, 2001 and September 17, 2001 and October 15, 2001, respectively. On October 24, 2001, the Company declared its dividend payable during the first quarter of 2002 at an increased rate of $0.52 per share payable on January 15, 2002 to shareholders of record January 2, 2002. This $0.52 per share dividend, if annualized, would equal $2.08 per share or an annual yield of approximately 6.7% based on the closing price of $31.02 of the Company's common stock on the NYSE as of February 1, 2002. The Company has determined that the $1.92 dividend per share paid during 2001 represented 95% ordinary income to its stockholders and 5% return of capital and the $1.77 dividend per share paid during 2000 represented 100% ordinary income to its stockholders. While the Company intends to continue paying regular quarterly dividends, future dividend declarations will be at the discretion of the Board of Directors and will depend on the actual cash flow of the Company, its financial condition, capital requirements, the annual distribution requirements under the REIT provisions of the Code and such other factors as the Board of Directors deems relevant. The actual cash flow available to pay dividends will be affected by a number of factors, including the revenues received from rental properties, the operating expenses of the Company, the interest expense on its borrowings, the ability of lessees to meet their obligations to the Company and any unanticipated capital expenditures. 27 In addition to its common stock offerings, the Company has capitalized the growth in its business through the issuance of unsecured fixed and floating-rate medium-term notes, underwritten bonds, mortgage debt, convertible preferred stock and perpetual preferred stock. Borrowings under the Company's revolving credit facility have also been an interim source of funds to both finance the purchase of properties and meet any short-term working capital requirements. The various instruments governing the Company's issuance of its unsecured public debt, bank debt, mortgage debt and preferred stock impose certain restrictions on the Company with regard to dividends, voting, liquidation and other preferential rights available to the holders of such instruments. See "Management's Discussion and Analysis of Financial Condition and Results of Operations" and Notes 7 and 12 of the Notes to Consolidated Financial Statements included in this annual report on Form 10-K. The Company does not believe that the preferential rights available to the holders of its Class A, Class B, Class C and Class D Preferred Stock, the financial covenants contained in its public bond Indenture, as amended, or its revolving credit agreement will have an adverse impact on the Company's ability to pay dividends in the normal course to its common stockholders or to distribute amounts necessary to maintain its qualification as a REIT. The Company maintains a dividend reinvestment and direct stock purchase plan (the "Plan") pursuant to which common and preferred stockholders and other interested investors may elect to automatically reinvest their dividends to purchase shares of the Company's common stock or, through optional cash payments, purchase shares of the Company's common stock. The Company may, from time to time, either (i) purchase shares of its common stock in the open market, or (ii) issue new shares of its common stock, for the purpose of fulfilling its obligations under the Plan. Item 6. Selected Financial Data The following table sets forth selected, historical consolidated financial data for the Company and should be read in conjunction with the Consolidated Financial Statements of the Company and Notes thereto and Management's Discussion and Analysis of Financial Condition and Results of Operations included in this annual report on Form 10-K. The Company believes that the book value of its real estate assets, which reflects the historical costs of such real estate assets less accumulated depreciation, is not indicative of the current market value of its properties. Historical operating results are not necessarily indicative of future operating performance. 28

Year ended December 31, ----------------------------------------------------------------------- 2001 2000 1999 1998 1997 ----------- ----------- ----------- ----------- ----------- (in thousands, except per share information) Operating Data: Revenues from rental property (1) $ 468,616 $ 459,407 $ 433,880 $ 338,798 $ 198,929 Interest expense $ 89,432 $ 92,100 $ 83,646 $ 64,912 $ 31,745 Depreciation and amortization $ 74,209 $ 71,129 $ 67,416 $ 51,348 $ 30,053 Gain on sale of development properties $ 13,418 $ -- $ -- $ -- $ -- Gain on sale of operating properties $ 3,040 $ 3,962 $ 1,552 $ 901 $ 244 Provision for income taxes $ 19,376 $ -- $ -- $ -- $ -- Income before extraordinary items $ 236,538 $ 205,025 $ 176,778 $ 127,166 $ 85,836 Income per common share, before extraordinary items: Basic $ 2.20 $ 1.93 $ 1.66 $ 1.37 $ 1.20 Diluted $ 2.16 $ 1.91 $ 1.64 $ 1.35 $ 1.19 Weighted average number of shares of common stock: Basic 96,317 92,688 90,709 75,106 56,082 Diluted 101,163 93,653 91,466 75,961 56,775 Cash dividends declared per common share $ 1.96 $ 1.81 $ 1.64 $ 1.37 $ 1.18

December 31, ----------------------------------------------------------------------- 2001 2000 1999 1998 1997 ----------- ----------- ----------- ----------- ----------- Balance Sheet Data: Real estate, before accumulated depreciation $ 3,201,364 $ 3,114,503 $ 2,951,050 $ 3,023,902 $ 1,404,196 Total assets $ 3,384,779 $ 3,171,348 $ 3,007,476 $ 3,051,178 $ 1,343,890 Total debt $ 1,328,079 $ 1,325,663 $ 1,249,571 $ 1,289,561 $ 531,614 Total stockholders' equity $ 1,890,084 $ 1,704,339 $ 1,605,435 $ 1,585,019 $ 743,319

Other Data: Year ended December 31, ----------------------------------------------------------------------- 2001 2000 1999 1998 1997 ----------- ----------- ----------- ----------- ----------- Funds from Operations (2): Net income $ 236,538 $ 205,025 $ 176,778 $ 122,266 $ 85,836 Depreciation and amortization 74,209 71,129 67,416 51,348 30,053 Depreciation and amortization - KIR 10,323 6,083 3,819 -- -- Depreciation and amortization - other real estate joint ventures 2,395 2,194 1,420 788 976 (Gain)/loss on sale of operating properties and early repayment of mortgage debt (3,040) (3,962) (1,552) 3,999 (244) Preferred stock dividends (24,553) (26,328) (26,478) (24,654) (18,438) ----------- ----------- ----------- ----------- ----------- Funds from Operations $ 295,872 $ 254,141 $ 221,403 $ 153,747 $ 98,183 =========== =========== =========== =========== =========== Cash flow provided by operations 287,444 $ 250,546 $ 237,153 $ 158,706 $ 125,107 Cash flow used for investing activities (157,193) $ (191,626) $ (205,219) $ (630,229) $ (280,823) Cash flow (used for) provided by financing activities (55,501) $ (67,899) $ (47,778) $ 484,465 $ 149,269

(1) Does not include revenues from rental property relating to unconsolidated joint ventures or revenues relating to the investment in retail stores leases. (2) Most industry analysts and equity REITs, including the Company, generally consider funds from operations ("FFO") to be an appropriate supplemental measure of the performance of an equity REIT. FFO is defined as net income applicable to common shares before depreciation and amortization, extraordinary items, gains or losses on sales of operating real estate, plus the pro-rata amount of depreciation and amortization of unconsolidated joint ventures determined on a consistent basis. FFO does not represent cash generated from operating activities in accordance with generally accepted accounting principles and therefore should not be considered an alternative for net income as a measure of liquidity. In addition, the comparability of the Company's FFO with the FFO reported by other REITs may be affected by the differences that exist regarding certain accounting policies relating to expenditures for repairs and other recurring items. 29 Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations The following discussion should be read in conjunction with the Consolidated Financial Statements and Notes thereto included in this annual report on Form 10-K. Historical results and percentage relationships set forth in the Consolidated Statements of Income contained in the Consolidated Financial Statements, including trends which might appear, should not be taken as indicative of future operations. Critical Accounting Policies The Consolidated Financial Statements of the Company include accounts of the Company, its wholly-owned subsidiaries and all partnerships in which the Company has a controlling interest. The preparation of financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions in certain circumstances that affect amounts reported in the accompanying Consolidated Financial Statements and related notes. In preparing these financial statements, management has made its best estimates and assumptions that affect the reported amounts of assets and liabilities. These estimates are based on, but not limited to, historical results, industry standards and current economic conditions, giving due consideration to materiality. The most significant assumptions and estimates relate to revenue recognition and the recoverability of trade accounts receivable, depreciable lives and valuation of real estate. Application of these assumptions requires the exercise of judgment as to future uncertainties and, as a result, actual results could differ from these estimates. Revenue Recognition and Accounts Receivable Minimum revenues from rental property are recognized on a straight-line basis over the terms of the related leases. Certain of these leases also provide for percentage and overage rents based upon the level of sales achieved by the lessee. These percentage rents are recorded once the required sales level is achieved. The leases typically provide for tenant reimbursements of common area maintenance, real estate taxes and other operating expenses. Rental income may also include payments received in connection with lease termination agreements. The Company makes estimates of the uncollectability of its accounts receivable related to base rents, expense reimbursements and other revenues. The Company analyzes accounts receivable and historical bad debt levels, customer credit worthiness and current economic trends when evaluating the adequacy of the allowance for doubtful accounts. In addition, tenants in bankruptcy are analyzed and estimates are made in connection with the expected recovery of pre-petition and post-petition claims. The Company's reported net income is directly affected by management's estimate of the collectability of accounts receivable. The Company believes that its revenue recognition policy is in compliance with generally accepted accounting principles and in accordance with the Securities and Exchange Commission's Staff Accounting Bulletin No. 101, Revenue Recognition. Real Estate Land, buildings and fixtures and leasehold improvements are recorded at cost, less accumulated depreciation and amortization. Expenditures for maintenance and repairs are charged to operations as incurred. Significant renovations and replacements, which improve or extend the life of the asset, are capitalized. Depreciation and amortization are provided on the straight-line method over the estimated useful lives of the assets, as follows: Buildings 15 to 39 years Fixtures and leasehold improvements Terms of lease or useful lives, whichever is shorter The Company is required to make subjective assessments as to the useful lives of its properties for purposes of determining the amount of depreciation to reflect on an annual basis with respect to those properties. These assessments have a direct impact on the Company's net income. Real estate under development on the Company's Consolidated Balance Sheet represents ground-up development projects which are held for sale. These assets are not depreciated and any gain on sale of these assets is generally recognized using the full accrual method in accordance with the provisions of Statement of Financial Accounting Standard No. 66, Accounting for Real Estate Sales. 30 Long Lived Assets On a periodic basis, management assesses whether there are any indicators that the value of the real estate properties may be impaired. A property value is considered impaired only if management's estimate of current and projected operating cash flows (undiscounted and without interest charges) of the property over its remaining useful life is less than the net carrying value of the property. Such cash flow projections consider factors such as expected future operating income, trend and prospects, as well as the effects of demand, competition and other factors. To the extent impairment has occurred, the carrying value of the property would be written down to an amount to reflect the fair value of the property. Real estate held for sale is carried at cost and the sales price of such assets is estimated net of any selling costs. If, in management's opinion, the net sales price of the assets is less than the net book value of such assets, a valuation allowance is established. The Company is required to make subjective assessments as to whether there are impairments in the value of its real estate properties and other investments. The Company's reported net income is directly affected by management's estimate of impairments and/or valuation allowances recognized. Results of Operations Comparison 2001 to 2000 Revenues from rental property increased $9.2 million or 2.0% to $468.6 million for the year ended December 31, 2001, as compared with $459.4 million for the year ended December 31, 2000. This net increase resulted primarily from the combined effect of (i) the acquisition of three operating properties during 2001, providing revenues of $1.3 million for the year ended December 31, 2001, (ii) the full year impact related to the 12 operating properties acquired in 2000 providing incremental revenues of $3.5 million, and (iii) the completion of certain development and redevelopment projects and new leasing within the portfolio providing incremental revenues of approximately $11.9 million as compared to the corresponding year ended December 31, 2000, offset by (iv) the commencement of new redevelopment projects and tenant buyouts causing a temporary increase in vacancy, sales of certain shopping center properties throughout 2001 and 2000 and an overall decrease in shopping center portfolio occupancy to 90.1% at December 31, 2001 as compared to 92.9% at December 31, 2000 due primarily to bankruptcies of tenants and subsequent rejections of leases resulting in a decrease of revenues of approximately $7.5 million as compared to the preceding year. Rental property expenses, including depreciation and amortization, increased $6.8 million or 2.5% to $282.0 million for the year ended December 31, 2001 as compared to $275.2 million for the preceding year. The rental property expense components of real estate taxes, operating and maintenance, and depreciation and amortization increased approximately $1.7 million, $4.3 million, and $3.1 million, respectively, for the year ended December 31, 2001 as compared with the year ended December 31, 2000. These rental property expense increases are primarily due to property acquisitions during 2001 and 2000, renovations within the existing portfolio, the completion of certain redevelopment and development projects, and increased snow removal costs during 2001 offset by the disposition of certain shopping center properties. Interest expense decreased $2.7 million or 2.9% to $89.4 million for the year ended December 31, 2001, as compared with $92.1 million for the year ended December 31, 2000. This decrease is primarily due to reduced interest costs on the Company's floating-rate revolving credit facility and remarketed reset notes during the year ended December 31, 2001, as compared to the preceding year. The Company has interests in various retail store leases relating to the anchor stores premises in neighborhood and community shopping centers. These premises have been sublet to retailers which lease the stores pursuant to net lease agreements. Income from the investment in retail store leases decreased approximately $0.8 million or 21% to $3.2 million for the year ended December 31, 2001, as compared to $4.0 million for the year ended December 31, 2000. This decrease is primarily due to the Ames Department Stores, Inc. bankruptcy filing and subsequent rejection of certain leases causing the occupancy to decrease to 81.3% at December 31, 2001 as compared to 93.0% at December 31, 2000 for the retail store lease portfolio. 31 During 1998, the Company formed KIR, a limited partnership established to invest in high quality retail properties financed primarily through the use of individual non-recourse mortgages. At the time of formation, the Company contributed 19 property interests to KIR. On April 28, 1999, KIR sold a significant interest in the partnership to institutional investors. As a result, the Company holds a non-controlling limited partnership interest in KIR and accounts for its investment in KIR under the equity method of accounting. Equity in income of KIR increased $3.7 million to $13.2 million for the year ended December 31, 2001, as compared to $9.5 million for the preceding year. This increase is primarily due to the Company's increased capital investment in KIR totaling $30.8 million during 2001 and $29.6 million during 2000. The additional capital investments received by KIR from the Company and its other institutional partners were used to purchase additional shopping center properties throughout calendar years 2001 and 2000. Equity in income of other real estate joint ventures, net increased $36.5 million to $41.6 for the year ended December 31, 2001 as compared to $5.1 million for the year ended December 31, 2000. This increase is primarily attributable to the Montgomery Ward asset designation rights transaction described below. During March 2001, the Company, through a taxable REIT subsidiary, formed a real estate joint venture (the "Ward Venture") in which the Company has a 50% interest, for purposes of acquiring asset designation rights for substantially all of the real estate property interests of the bankrupt estate of Montgomery Ward LLC and its affiliates. These asset designation rights have provided the Ward Venture the ability to direct the ultimate disposition of the 315 fee and leasehold interests held by the bankrupt estate. The Ward Venture has completed transactions on 271 properties, and the Company has recognized net profits of approximately $20.9 million after provision for income taxes for the year ended December 31, 2001. The pre-tax profits from the Ward Venture of approximately $34.6 million are included in the Consolidated Statement of Income in the caption Equity in income of other real estate joint ventures, net. Other income, net decreased $2.1 million for the year ended December 31, 2001, as compared to the preceding calendar year. Other income, net is primarily comprised of interest income, dividend income and realized gains related to the Company's investments and sales of certain marketable equity and debt securities. Operating and administrative expenses increased approximately $3.3 million for the year ended December 31, 2001, as compared to the preceding calendar year. This increase is primarily due to higher costs related to the growth of the Company including (i) increased senior management and staff levels, (ii) increased system related costs and (iii) other personnel related costs. In addition, the Company issued a stock grant award to a newly appointed executive officer of the Company valued at approximately $1.1 million during 2001. Effective January 1, 2001, the Company has elected taxable REIT subsidiary status for its wholly owned development subsidiary, KDI. KDI is primarily engaged in the ground-up development of neighborhood and community shopping centers and the subsequent sale thereof upon completion. During the year ended December 31, 2001, KDI sold two of its recently completed projects and five out-parcels, in separate transactions, for approximately $61.3 million, which resulted in net gains of approximately $8.1 million after provision for income taxes. The pre-tax profits of $13.4 million are included in the Consolidated Statements of Income in the caption Gain on sale of development properties. During 2001, the Company, in separate transactions, disposed of three operating properties, including the sale of a property to KIR, and a portion of another operating property comprising in the aggregate approximately 0.6 million square feet of GLA. Cash proceeds from these dispositions aggregated approximately $46.7 million, which resulted in a net gain of approximately $3.0 million. Cash proceeds from the sale of the operating property in Elyria, OH totaling $5.8 million, together with an additional $7.1 million cash investment, was used to acquire an exchange shopping center property located in Lakeland, FL during August 2001. During 2000, the Company, in separate transactions, disposed of ten shopping center properties. Sale prices from two of these dispositions aggregated approximately $4.5 million which approximated their aggregate net book value. Sale prices from eight of these dispositions aggregated approximately $29.7 million which resulted in net gains of approximately $4.0 million. Net income for the year ended December 31, 2001 was $236.5 million as compared to $205.0 million for the year ended December 31, 2000, representing an increase of $31.5 million. On a diluted per share basis, net income improved $0.25 for the year ended December 31, 2001, including the gains on sales of certain operating properties in the respective periods in 2001 and 2000. This improved performance reflects the combined effect of internal growth and property acquisitions in the core portfolio, profits from KDI, income from the investment in KIR and profits from the Ward Venture investment, which strengthened profitability. 32 Comparison 2000 to 1999 Revenues from rental property increased $25.5 million or 5.9% to $459.4 million for the year ended December 31, 2000, as compared with $433.9 million for the year ended December 31, 1999. This net increase resulted primarily from the combined effect of (i) the acquisition of 12 shopping center properties during 2000, providing revenues of $6.4 million for the year ended December 31, 2000, (ii) the full year impact related to the 35 shopping center properties acquired in 1999 providing incremental revenues of $13.0 million, and (iii) the completion of certain development and redevelopment projects, new leasing, and re-tenanting within the portfolio at improved rental rates providing incremental revenues of approximately $22.4 million as compared to the corresponding year ended December 31, 1999. These increases were reduced as a result of the deconsolidation of 23 shopping center properties as of April 28, 1999 in connection with the sale of a controlling interest in KIR. Revenues from these 23 properties totaled approximately $16.3 million for the period January 1, 1999 to April 28, 1999. Rental property expenses, including depreciation and amortization, increased $12.3 million or 4.7% to $275.2 million for the year ended December 31, 2000, as compared with $262.9 million for the year ended December 31, 1999. These net increases in rental property expenses are the result of the combined effect of (i) increased expenses relating to new property acquisitions made throughout calendar years 1999 and 2000, offset by (ii) the reduction of rental property expenses relating to the deconsolidation of 23 shopping center properties as of April 28, 1999, in connection with the sale of a controlling interest in KIR. Interest expense increased $8.5 million for the year ended December 31, 2000, reflecting higher average outstanding borrowings as compared to the preceding year resulting primarily from (i) the issuance of additional unsecured debt during 1999 and 2000, (ii) additional mortgage financing obtained on certain properties totaling approximately $44.2 million during 2000 and (iii) the assumption of mortgage debt during 1999 and 2000 in connection with certain property acquisitions offset by (iv) the deconsolidation of $252.4 million of mortgage debt on 19 properties as of April 28, 1999, in connection with the sale of a controlling interest in KIR. The Company has interests in various retail store leases relating to the anchor stores premises in neighborhood and community shopping centers. These premises have been substantially sublet to retailers which lease the stores pursuant to net lease agreements. Income from the investment in retail store leases during the years ended December 31, 2000 and 1999 was $4.0 million and $4.1 million, respectively. During 1998, the Company formed KIR, a limited partnership established to invest in high quality retail properties financed primarily through the use of individual non-recourse mortgages. At the time of formation, the Company contributed 19 property interests to KIR. On April 28, 1999, KIR sold a significant interest in the partnership to an institutional investor. As a result, the Company holds a non-controlling limited partnership interest in KIR and accounts for its investment in KIR under the equity method of accounting. The Company's equity in income of KIR for the year ended December 31, 2000 was $9.5 million and for the period April 28, 1999 to December 31, 1999 was approximately $6.0 million. Other income, net increased $10.1 million for the year ended December 31, 2000, as compared to the preceding calendar year. The net increase was primarily attributed to higher interest and dividend income related to the Company's investment in certain marketable equity and debt securities. Operating and administrative expenses increased approximately $1.9 million for the year ended December 31, 2000, as compared to the preceding calendar year. The increase is due primarily to an increase in senior management and staff levels and other personnel costs in connection with the growth of the Company. During 2000, the Company, in separate transactions, disposed of ten operating properties. Sale prices from two of these dispositions aggregated approximately $4.5 million which approximated their aggregate net book value. Sale prices from eight of these dispositions aggregated approximately $29.7 million which resulted in net gains of approximately $4.0 million. During 1999, the Company disposed of six shopping center properties and a land parcel. Cash proceeds from four of these dispositions aggregated approximately $6.1 million, which approximated their aggregate net book value. During July 1999, the Company disposed of an additional shopping center property in New Port Richey, FL. Cash proceeds from the disposition totaling $0.5 million, together with an additional $5.5 million cash investment, were used to acquire an exchange shopping center property located in Greensboro, NC during September 1999. The sale of this property resulted in a gain of approximately $0.3 million 33 During October 1999, the Company, in separate transactions, disposed of a shopping center and a land parcel for an aggregate sale price of approximately $4.5 million, which resulted in a gain of approximately $1.3 million. Net income for the year ended December 31, 2000 was $205.0 million as compared to $176.8 million for the year ended December 31, 1999, representing an increase of $28.2 million. On a diluted per share basis, net income improved $0.27 for the year ended December 31, 2000, including the gains on sales of certain operating properties in the respective periods in 2000 and 1999. This improved performance is primarily attributable to the Company's strong acquisition and investment program, internal growth from development and redevelopment projects, growth in income from the investment in KIR and increased leasing activity which strengthened operating profitability. Tenant Concentrations The Company seeks to reduce its operating and leasing risks through diversification achieved by the geographic distribution of its properties, avoiding dependence on any single property, and a large tenant base. At December 31, 2001, the Company's five largest tenants include Kmart Corporation, Kohl's, The Home Depot, TJX Companies and Wal-Mart, which represented approximately 12.6%, 3.1%, 2.5%, 1.9% and 1.7%, respectively, of the Company's annualized base rental revenues. On January 22, 2002, Kmart Corporation ("Kmart") filed for protection under Chapter 11 of the U.S. Bankruptcy Code. As of the filing date, Kmart occupied 69 locations (excluding the KIR Portfolio which includes six Kmart locations), representing 12.6% of the Company's annualized base rental revenues and 13.3% of the Company's total shopping center GLA. As of February 1, 2002, Kmart rejected its lease at 15 locations. These 15 locations represent approximately $16.3 million of annualized base rental revenues comprising approximately 1.6 million square feet of GLA. The average rent per square foot for these locations was approximately $10.43. As adjusted for these 15 rejected leases Kmart now represents 8.7% of annualized base rents and 10.4% of leased GLA. The Company is actively marketing these locations to prospective tenants, however, no assurances can be provided that these locations will be leased in the near term or at comparable rents previously paid by Kmart. The Company generally will have the right to file claims in connection with these rejected leases for lost rent equal to three years of rental obligations as well as other amounts related to obligations under the leases. Actual amounts to be received in satisfaction of these claims will be subject to Kmart's final plan of reorganization and the availability of funds to pay creditors such as the Company. On March 8, 2002, Kmart announced it would be closing an additional 284 locations of which 17 of these locations are leased from the Company. The Company had previously encumbered seven of these properties with individual non-recourse mortgage loans. The annualized base rental revenues from these 17 locations is approximately $15.1 million. The annualized interest expense for the seven encumbered properties is approximately $5.6 million. As of the date of this filing of this annual report on Form 10-K, the Company has not been notified directly by Kmart as to the timing of these store closings or whether the leases will be assigned or rejected. Until such time as the leases are rejected in accordance with the bankruptcy proceedings, Kmart remains obligated for payments of rent and operating expenses at these locations and all other remaining locations. Liquidity and Capital Resources It is management's intention that the Company continually have access to the capital resources necessary to expand and develop its business. As such, the Company intends to operate with and maintain a conservative capital structure with a level of debt to total market capitalization of 50% or less. As of December 31, 2001 the Company's level of debt to total market capitalization was 27%. In addition, the Company intends to maintain strong debt service coverage and fixed charge coverage ratios as part of its commitment to maintaining its investment-grade debt ratings. As of December 31, 2001, the Company had a debt service coverage ratio of 3.9 times and a fixed charge coverage ratio of 3.2 times. The Company may, from time to time, seek to obtain funds through additional equity offerings, unsecured debt financings and/or mortgage financings and other debt and equity alternatives in a manner consistent with its intention to operate with a conservative debt structure. 34 Since the completion of the Company's IPO in 1991, the Company has utilized the public debt and equity markets as its principal source of capital for its expansion needs. Since the IPO, the Company has completed additional offerings of its public unsecured debt and equity, raising in the aggregate over $2.3 billion for the purposes of, among other things, repaying indebtedness, acquiring interests in neighborhood and community shopping centers, funding ground-up development projects, expanding and improving properties in the portfolio and other investments. The Company has a $250.0 million, unsecured revolving credit facility, which is scheduled to expire in August 2003. This credit facility, which replaced the Company's $215.0 million unsecured revolving credit facility has made available funds to both finance the purchase of properties and meet any short-term working capital requirements. As of December 31, 2001 there were no borrowings outstanding under this credit facility. The Company also has a $200.0 million MTN program pursuant to which it may, from time to time, offer for sale its senior unsecured debt for any general corporate purposes, including (i) funding specific liquidity requirements in its business, including property acquisitions, development and redevelopment costs and (ii) managing the Company's debt maturities. (See Note 7 of the Notes to Consolidated Financial Statements included in this annual report on Form 10-K.) In addition to the public equity and debt markets as capital sources, the Company may, from time to time, obtain mortgage financing on selected properties. As of December 31, 2001, the Company had over 380 unencumbered property interests in its portfolio representing 87% of the Company's net operating income. During May 2001, the Company filed a shelf registration statement on Form S-3 for up to $750.0 million of debt securities, preferred stock, depositary shares, common stock and common stock warrants. As of December 31, 2001, the Company had $625.7 million available for issuance under this shelf registration statement. In connection with its intention to continue to qualify as a REIT for federal income tax purposes, the Company expects to continue paying regular dividends to its stockholders. These dividends will be paid from operating cash flows which are expected to increase due to property acquisitions and growth in operating income in the existing portfolio and from other sources. Since cash used to pay dividends reduces amounts available for capital investment, the Company generally intends to maintain a conservative dividend payout ratio, reserving such amounts as it considers necessary for the expansion and renovation of shopping centers in its portfolio, debt reduction, the acquisition of interests in new properties and other investments as suitable opportunities arise, and such other factors as the Board of Directors considers appropriate. Cash dividends paid increased to $209.8 million in 2001, compared to $189.9 million in 2000 and $169.7 million in 1999. The Company's dividend payout ratio, based on funds from operations on a per-basic common share basis, for 2001, 2000 and 1999 was approximately 62.5%, 64.6% and 64.8%, respectively. Although the Company receives substantially all of its rental payments on a monthly basis, it generally intends to continue paying dividends quarterly. Amounts accumulated in advance of each quarterly distribution will be invested by the Company in short-term money market or other suitable instruments. The Company anticipates its capital commitment toward redevelopment projects during 2002 will be approximately $30.0 million to $50.0 million. Additionally, the Company anticipates its capital commitment toward ground-up development during 2002 will be approximately $140.0 million to $160.0 million. The proceeds from the sales of development properties in 2002 should be sufficient to fund the ground-up development capital requirements. The Company anticipates that cash flows from operations will continue to provide adequate capital to fund its operating and administrative expenses, regular debt service obligations and all dividend payments in accordance with REIT requirements in both the short-term and long-term. In addition, the Company anticipates that cash on hand, borrowings under its revolving credit facility, issuance of equity and public debt, as well as other debt and equity alternatives, will provide the necessary capital required by the Company. Cash flows from operations as reported in the Consolidated Statements of Cash Flows increased to $287.4 million for 2001 from $250.5 million for 2000 and $237.2 million for 1999. Contractual Obligations and Other Commitments The Company has debt obligations relating to its revolving credit facility, MTNs, senior notes and mortgages payable with maturities ranging from 1 to 22 years. As of December 31, 2001, the Company's total debt had a weighted average term to maturity of approximately 5.3 years. In addition, the Company has non-cancelable operating leases pertaining to its shopping center portfolio. As of December 31, 2001, the Company has certain shopping center properties that are subject to long-term ground leases where a third party owns and has leased the underlying land to the Company to construct and/or operate a shopping center. In addition, the Company has non-cancelable operating leases pertaining to its retail store lease portfolio. The following table summarizes the Company's debt maturities and obligations under non-cancelable operating leases as of December 31, 2001 (in millions): 35

2002 2003 2004 2005 2006 Thereafter Total ---- ---- ---- ---- ---- ---------- ----- Long-Term Debt $123.4 $100.0 $108.9 $215.2 $119.5 $661.1 $1,328.1 Operating Leases Ground Leases $ 13.4 $ 12.6 $ 12.0 $ 10.8 $ 10.1 $136.3 $ 195.2 Retail Store Leases $ 10.3 $ 10.0 $ 8.2 $ 6.7 $ 5.2 $ 7.6 $ 48.0

The Company has $110.0 million of unsecured debt and $13.4 million of mortgage debt maturing in 2002. The Company anticipates satisfying these maturities with a combination of operating cash flows, its revolving credit facility and new debt financings. The Company also has letters of credit in connection with the collateralization of tax-exempt mortgage bonds, completion guarantees for certain construction projects and guaranty of payment related to the acquisition of a development project. These letters of credit aggregate approximately $30.5 million. Unconsolidated Real Estate Joint Ventures The Company has investments in a number of unconsolidated real estate joint ventures with varying structures. These investments include the Company's 43.3% non-controlling interest in KIR and varying interests in other real estate joint ventures. These joint ventures operate either shopping center properties or are established for development projects. Such arrangements are generally with third party institutional investors, local developers and individuals. The properties owned by the joint ventures are primarily financed with individual non-recourse mortgage loans. Non-recourse mortgage debt is generally defined as debt whereby the lenders' sole recourse with respect to borrower defaults is limited to the value of the property collaterized by the mortgage. The lender generally does not have recourse against any other assets owned by the borrower or any of the constituent members of the borrower, except for certain specified exceptions listed in the particular loan documents. The KIR joint venture was established for the purpose of investing in high quality real estate properties financed primarily with individual non-recourse mortgages. The Company believes that these properties are appropriate for financing with greater leverage than the Company traditionally uses. As of December 31, 2001, KIR had interests in 64 properties comprising 12.0 million square feet of GLA. As of December 31, 2001, KIR had obtained individual non-recourse mortgage loans on 62 of these properties aggregating approximately $935.1 million. These non-recourse mortgage loans have maturities ranging from one to ten years and rates ranging from 6.57% to 8.47%. In addition, KIR has a $100.0 million revolving credit facility with a group of banks secured by the unfunded capital commitments of certain investors, including the Company. As of December 31, 2001, there was $15.0 million outstanding on this facility. As of December 31, 2001, the Company pro-rata share of debt obligations relating to the KIR joint venture was approximately $411.4 million. The Company also has unfunded capital commitments to KIR in the amount of approximately $79.7 million as of December 31, 2001. (See Note 3 of the Notes to Consolidated Financial Statements included in this annual report on Form 10-K.) The Company has various other unconsolidated real estate joint ventures with ownership interests ranging from 4% to 50%. As of December 31, 2001, these unconsolidated joint ventures had individual non-recourse mortgage loans aggregating approximately $254.4 million. The Company's pro-rata share of these debt obligations was approximately $114.1 million. (See Note 4 of the Notes to Consolidated Financial Statements included in this annual report on Form 10-K.) Effects of Inflation Many of the Company's leases contain provisions designed to mitigate the adverse impact of inflation. Such provisions include clauses enabling the Company to receive payment of additional rent calculated as a percentage of tenants' gross sales above pre-determined thresholds, which generally increase as prices rise, and/or escalation clauses, which generally increase rental rates during the terms of the leases. Such escalation clauses often include increases based upon changes in the consumer price index or similar inflation indices. In addition, many of the Company's leases are for terms of less than 10 years, which permits the Company to seek to increase rents to market rates upon renewal. Most of the Company's leases require the tenant to pay an allocable share of operating expenses, including common area maintenance costs, real estate taxes and insurance, thereby reducing the Company's exposure to increases in costs and operating expenses resulting from inflation. The Company periodically evaluates its exposure to short-term interest rates and will, from time to time, enter into interest rate protection agreements which mitigate, but do not eliminate, the effect of changes in interest rates on its floating-rate debt. 36 New Accounting Pronouncements Effective January 1, 2001, the Company adopted Statement of Financial Accounting Standard ("SFAS") No. 133, Accounting for Derivative Instruments and Hedging Activities ("FASB No. 133"), as amended. FASB No. 133 establishes accounting and reporting standards for derivative instruments. This accounting standard requires the Company to measure derivative instruments at fair value and to record them in the Consolidated Balance Sheet as an asset or liability, depending on the Company's rights or obligations under the applicable derivative contract. In addition, the fair value adjustments will be recorded in either stockholders' equity or earnings in the current period based on the designation of the derivative. The effective portions of changes in fair value of cash flow hedges are reported in Other Comprehensive Income ("OCI"), a component of stockholders' equity, and are subsequently reclassified into earnings when the hedged item affects earnings. The changes in fair value of derivative instruments which are not designated as hedging instruments and the ineffective portions of hedges are recorded in earnings for the current period. The principal financial instruments currently used by the Company are interest rate swaps, foreign currency exchange forward contracts and warrant contracts. The Company, from time to time, hedges the future cash flows of its floating-rate debt instruments to reduce its exposure to interest rate risk principally through interest rate swaps with major financial institutions. The Company has interest-rate swap agreements on its $110.0 million floating-rate MTN and its $100.0 million floating-rate remarketed reset notes, which have been designated and qualified as cash flow hedges. The Company has determined that these swap agreements are highly effective in offsetting future variable interest cash flows related to the Company's debt portfolio. The adoption of FASB No. 133 as of January 1, 2001, resulted in a cumulative transition adjustment of $1.5 million to OCI and a corresponding liability of the same amount. For the year ended December 31, 2001, the change in the fair value of the interest rate swaps was $2.4 million which was recorded in OCI with a corresponding liability for the same amount. During 2001, the Company entered into two foreign currency forward contracts. The Company has designated these foreign currency forward contracts as fair value hedges. The Company expects these forward contracts to be highly effective in limiting its exposure to the variability in the fair value of its Canadian ("CAD") $56.1 million investments (approximately USD $35.8 million) as it relates to changes in the exchange rate. The gain or loss on the forward contracts will be recognized currently in earnings and the gain or loss on the CAD investment attributable to changes in the exchange rate will be recognized currently in earnings and shall adjust the carrying amount of the hedged investment. During 2001, the Company acquired warrants to purchase the common stock of a Canadian REIT. The Company has designated the warrants as a cash flow hedge of the variability in expected future cash outflows upon purchasing the common stock. The Company has determined the hedged cash outflow is probable and expected to occur prior to the expiration date of the warrants. The Company has determined that the warrants are fully effective and recorded the change in fair value of the warrants of approximately $2.4 million in OCI with a corresponding asset for the same amount. During the next twelve months, the Company expects to reclassify to earnings as expense approximately $3.4 million of the current balance in accumulated OCI primarily related to the fair value of the interest rate swaps. In July 2001, the Financial Accounting Standards Board ("FASB") issued SFAS No. 141, Business combinations ("FASB No. 141") which addresses financial accounting and reporting for business combinations. Effective July 1, 2001, all business combinations must be accounted for using the purchase method of accounting, which requires an allocation of the purchase price paid to the assets acquired and liabilities assumed. Additionally, FASB No. 141 requires that an intangible asset be recognized as an asset apart from goodwill if it arises from contractual or legal rights. The impact of adopting FASB No. 141 did not have a material impact on the Company's financial position or results of operations. 37 In July 2001, the FASB issued SFAS No. 142, Goodwill and Other Intangible Assets ("FASB No. 142"). This statement addresses financial accounting and reporting for intangible assets acquired, goodwill and other intangible assets after their acquisition. This statement requires that goodwill and intangible assets that have indefinite useful lives will not be amortized but rather will be tested at least annually for impairment. In addition, FASB No 142 requires disclosures about the carrying amount of and changes in goodwill from period to period. Goodwill and intangible assets acquired after June 30, 2001 will be subject immediately to the provisions of this statement. The provisions are effective for fiscal years beginning after December 15, 2001. The impact of adopting this statement is not expected to be material to the Company's financial position or results of operations. In August 2001, the FASB issued SFAS No. 144, Accounting for the Impairment or Disposal of Long-Lived Assets ("FASB No. 144"), which supercedes SFAS No. 121. FASB No. 144 requires that long-lived assets that are to be disposed of by sale be measured at the lower of book value or fair value less cost to sell. FASB No. 144 retains the requirements of SFAS No. 121 regarding impairment loss recognition and measurement. In addition, it requires that one accounting model be used for long-lived assets to be disposed of by sale and broadens the presentation of discontinued operations to include more disposal transactions. FASB No. 144 is effective for fiscal years beginning after December 15, 2001. The impact of adopting this statement is not expected to be material to the Company's financial position or results of operations. Item 7A. Quantitative and Qualitative Disclosures About Market Risk As of December 31, 2001, the Company had approximately $227.6 million of floating-rate debt outstanding. The interest rate risk on $210.0 million of such debt 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 non-performance by the counter-party to the Swaps. The Company believes it mitigates its credit risk by entering into these Swaps with major financial institutions. The Company believes the interest rate risk represented by the remaining $17.6 million of floating-rate debt is not material to the Company or its overall capitalization. As of December 31, 2001, the Company had Canadian investments in marketable securities in the amount of CAD $26.3 million (approximately USD $16.9 million) and in real estate in the amount of CAD $29.8 million (approximately USD $18.9 million). The foreign currency exchange risk has been mitigated through the use of foreign currency forward contracts in the amount of CAD $56.1 million (the "Forward Contracts") with major financial institutions. The Company is exposed to credit risk in the event of non-performance by the counter-party to the Forward Contracts. The Company believes it mitigates its credit risk by entering into the Forward Contracts with major financial institutions. The Company has not, and does not plan to, enter into any derivative financial instruments for trading or speculative purposes. As of December 31, 2001, the Company had no other material exposure to market risk. Item 8. Financial Statements and Supplementary Data The response to this Item 8 is included as a separate section of this annual report on Form 10-K. Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure None. 38 PART III Item 10. Directors and Executive Officers of the Registrant Incorporated herein by reference to the Company's definitive proxy statement to be filed with respect to its Annual Meeting of Stockholders expected to be held on May 14, 2002. Information with respect to the Executive Officers and other significant employees of the Registrant follows Part I, Item 4 of this annual report on Form 10-K. Item 11. Executive Compensation Incorporated herein by reference to the Company's definitive proxy statement to be filed with respect to its Annual Meeting of Stockholders expected to be held on May 14, 2002. Item 12. Security Ownership of Certain Beneficial Owners and Management Incorporated herein by reference to the Company's definitive proxy statement to be filed with respect to its Annual Meeting of Stockholders expected to be held on May 14, 2002. Item 13. Certain Relationships and Related Transactions Incorporated herein by reference to the Company's definitive proxy statement to be filed with respect to its Annual Meeting of Stockholders expected to be held on May 14, 2002. 39 PART IV Item 14. Exhibits, Financial Statements, Schedules and Reports on Form 8-K (a) 1. Financial Statements - Form 10-K The following consolidated financial information Report is included as a separate section of this annual Page report on Form 10-K. --------- Report of Independent Accountants 46 Consolidated Financial Statements Consolidated Balance Sheets as of December 31, 2001 and 2000 47 Consolidated Statements of Income for the years ended December 31, 2001, 2000 and 1999 48 Consolidated Statements of Comprehensive Income for the years ended December 31, 2001, 2000 and 1999 49 Consolidated Statements of Stockholders' Equity for the years ended December 31, 2001, 2000 and 1999 50 Consolidated Statements of Cash Flows for the years ended December 31, 2001, 2000 and 1999 51 Notes to Consolidated Financial Statements 52 2. Financial Statement Schedules - Schedule II - Valuation and Qualifying Accounts 71 Schedule III - Real Estate and Accumulated Depreciation 72 All other schedules are omitted since the required information is not present or is not present in amounts sufficient to require submission of the schedule. 3. Exhibits The exhibits listed on the accompanying Index to Exhibits are filed as part of this report. 41 (b) Reports on Form 8-K A current report on Form 8-K was filed on November 16, 2001 to disclose the Underwriting Agreement and U.S. Terms Agreement dated November 13, 2001 between the Company and Edward D. Jones & Co., L.P. in connection with the Company's 2.25 million primary common stock offering during November 2001. A current report on Form 8-K was filed on December 13, 2001 to disclose the Underwriting Agreement and U.S. Terms Agreement dated December 11, 2001 between the Company and Salomon Smith Barney, Inc. in connection with the Company's 1.5 million primary common stock offering during December 2001. 40 INDEX TO EXHIBITS

Form 10-K Exhibits Page -------- ---- 2.1 -- Form of Plan of Reorganization of Kimco Realty Corporation [Incorporated by reference to Exhibit 2.1 to the Company's Registration Statement on Form S-11 No. 33-42588]. 3.1 -- Articles of Amendment and Restatement of the Company, dated August 4, 1994 [Incorporated by reference to Exhibit 3.1 to the Company's Annual Report on Form 10-K for the year ended December 31, 1994]. *3.2 -- By-laws of the Company, dated February 6, 2002, as amended. 79 3.3 -- Articles Supplementary relating to the 8 1/2% Class B Cumulative Redeemable Preferred Stock, par value $1.00 per share, of the Company, dated July 25, 1995. Incor- porated by reference to Exhibit 3.3 to the Company's Annual Report on Form 10-K for the year ended December 31, 1995 (file #1-10899) (the "1995 Form 10-K")]. 3.4 -- Articles Supplementary relating to the 8 3/8% Class C Cumulative Redeemable Preferred Stock, par value $1.00 per share, of the Company, dated April 9, 1996 [Incorp- orated by reference to Exhibit 3.4 to the Company's Annual Report on Form 10-K for the year ended December 31, 1996]. 3.5 -- Articles Supplementary relating to the 7 1/2% Class D Cumulative Convertible Preferred Stock, par value $1.00 per share, of the Company, dated May 14, 1998 [Incor- porated by reference to the Company's and The Price REIT, Inc.'s Joint Proxy/Prospectus on Form S-4 No. 333-52667]. 4.1 -- Agreement of the Company pursuant to Item 601(b)(4)(iii)(A) of Regulation S-K [Incorporated by reference to Exhibit 4.1 to Amendment No. 3 to the Company's Registration Statement on Form S-11 No. 33-42588]. 4.2 -- Certificate of Designations [Incorporated by reference to Exhibit 4(d) to Amendment No. 1 to the Registration Statement on Form S-3 dated September 10, 1993 (the "Registration Statement", Commission File No. 33-67552)]. 4.3 -- Indenture dated September 1, 1993 between Kimco Realty Corporation and Bank of New York (as successor to IBJ Schroder Bank and Trust Company) [Incorporated by reference to Exhibit 4(a) to the Registration Statement]. 4.4 -- First Supplemental Indenture, dated as of August 4, 1994. [Incorporated by reference to Exhibit 4.6 to the 1995 Form 10-K.] 4.5 -- Second Supplemental Indenture, dated as of April 7, 1995 [Incorporated by reference to Exhibit 4(a) to the Company's Current Report on Form 8-K dated April 7, 1995 (the "April 1995 8-K")].

41 INDEX TO EXHIBITS (continued)

Form 10-K Exhibits Page -------- ---- *4.6 -- Form of Medium-Term Note (Fixed Rate). 93 *4.7 -- Form of Medium-Term Note (Floating Rate). 105 4.8 -- Form of Remarketed Reset Note [Incorporated by reference to Exhibit 4(j) to the Company's Current Report on Form 8-K dated March 26, 1999]. 10.1 -- Form of Acquisition Option Agreement between the Company and the subsidiary named therein [Incorporated by reference to Exhibit 10.1 to Amendment No. 3 to the Company's Registration Statement on Form S-11 No. 33-42588]. 10.2 -- Management Agreement between the Company and KC Holdings, Inc. [Incorporated by reference to Exhibit 10.2 to the Company's Registration Statement on Form S-11 No. 33-47915]. 10.3 -- Amended and Restated Stock Option Plan [Incorporated by reference to Exhibit 10.3 to the 1995 Form 10-K]. 10.4 -- Employment Agreement between Kimco Realty Corporation and Michael J. Flynn, dated November 1, 1998. 10.5 -- Restricted Equity Agreement, Non-Qualified and Incentive Stock Option Agreement, and Price Condition Non-Qualified and Incentive Stock Option Agreement between Kimco Realty Corporation and Michael J. Flynn, each dated November 1, 1995 [Incorporated by reference to Exhibit 10.5 to the 1995 Form 10-K]. *10.6 -- Employment Agreement between Kimco Realty Corporation 128 and Michael V. Pappagallo, dated January 1, 2002. 10.7 -- Employment Agreement between Kimco Realty Corporation and Jerald Friedman, dated January 13, 1998 [Incorporated by Reference to Exhibit 10.10 to the Company's and the Price REIT, Inc.'s Joint Proxy Statement/Prospectus on Form S-4 No. 333-52667]. *10.8 -- First Amendment to Amended and Restated Executive 134 Employment Agreement between Kimco Realty Corporation and Jerald Friedman, dated January 1, 2002. 10.9 -- Amended and Restated Stock Option Plan [Incorporated by reference to the Company's and The Price REIT, Inc.'s Joint Proxy/Prospectus on Form S-4 No. 333-52667]. 10.10 -- Employment Agreement between Kimco Realty Corporation and David B. Henry - the Company commenced a five-year employment agreement with Mr. Henry pursuant to which Mr. Henry will serve as Chief Investment Officer and has been nominated as Vice Chairman of the Board of Directors [Incorporated by reference to Exhibit 10.11 to the Company's Form 10-Q filed on May 10, 2001].

42 INDEX TO EXHIBITS (continued)

Form 10-K Exhibits Page -------- ---- *12.1 -- Computation of Ratio of Earnings to Combined Fixed Charges and Preferred Stock Dividends. 136 *12.2 -- Computation of Ratio of Funds from Operations to Combined Fixed Charges and Preferred Stock Dividends. 137 *21.1 -- Subsidiaries of the Company 138 *23.1 -- Consent of PricewaterhouseCoopers LLP 151

----------------------------------- * Filed herewith. 43 SIGNATURES Pursuant to the requirements of Section 13 or 15 (d) of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. KIMCO REALTY CORPORATION (Registrant) By: /s/ Milton Cooper ----------------------- Milton Cooper Chief Executive Officer Dated: March 20, 2002 Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the Registrant and in the capacities and on the dates indicated. Signature Title Date /s/ Martin S. Kimmel Chairman (Emeritus) of March 20, 2002 --------------------------- the Board of Directors Martin S. Kimmel /s/ Milton Cooper Chairman of the Board March 20, 2002 --------------------------- of Directors and Chief Milton Cooper Executive Officer /s/ Michael J. Flynn Vice Chairman of the March 20, 2002 --------------------------- Board of Directors, Michael J. Flynn President and Chief Operating Officer /s/ David B. Henry Vice Chairman of the March 20, 2002 --------------------------- Board of Directors and David B. Henry Chief Investment Officer /s/ Richard G. Dooley Director March 20, 2002 --------------------------- Richard G. Dooley /s/ Joe Grills Director March 20, 2002 --------------------------- Joe Grills /s/ Frank Lourenso Director March 20, 2002 --------------------------- Frank Lourenso /s/ Michael V. Pappagallo Vice President - March 20, 2002 --------------------------- Chief Financial Officer Michael V. Pappagallo /s/ Glenn G. Cohen Vice President - March 20, 2002 --------------------------- Treasurer Glenn G. Cohen /s/ Einat Dekel Director of Accounting March 20, 2002 --------------------------- Einat Dekel 44 ANNUAL REPORT ON FORM 10-K ITEM 8, ITEM 14 (a) (1) and (2) INDEX TO FINANCIAL STATEMENTS AND FINANCIAL STATEMENT SCHEDULES ------- FORM 10-K Page No. KIMCO REALTY CORPORATION AND SUBSIDIARIES Report of Independent Accountants 46 Consolidated Financial Statements and Financial Statement Schedules: Consolidated Balance Sheets as of December 31, 2001 and 2000 47 Consolidated Statements of Income for the years ended December 31, 2001, 2000 and 1999 48 Consolidated Statements of Comprehensive Income for the years ended December 31, 2001, 2000 and 1999 49 Consolidated Statements of Stockholders' Equity for the years ended December 31, 2001, 2000 and 1999 50 Consolidated Statements of Cash Flows for the years ended December 31, 2001, 2000 and 1999 51 Notes to Consolidated Financial Statements 52 Financial Statement Schedules: II. Valuation and Qualifying Accounts 71 III. Real Estate and Accumulated Depreciation 72 45 REPORT OF INDEPENDENT ACCOUNTANTS To the Board of Directors and Stockholders of Kimco Realty Corporation: In our opinion, the consolidated financial statements listed in the accompanying index present fairly, in all material respects, the financial position of Kimco Realty Corporation and Subsidiaries at December 31, 2001 and 2000, and the results of their operations and their cash flows for each of the three years in the period ended December 31, 2001, in conformity with accounting principles generally accepted in the United States of America. In addition, in our opinion, the financial statement schedules listed in the accompanying index present fairly, in all material respects, the information set forth therein when read in conjunction with the related consolidated financial statements. These financial statements and financial statement schedules are the responsibility of the Company's management; our responsibility is to express an opinion on these financial statements and financial statement schedules based on our audits. We conducted our audits of these statements in accordance with auditing standards generally accepted in the United States of America, which require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion. /s/ PricewaterhouseCoopers LLP New York, New York February 5, 2002, except as to Note 20, which is dated as of March 8, 2002. 46 KIMCO REALTY CORPORATION AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS (in thousands, except share information)

December 31, December 31, 2001 2000 ----------- ----------- Assets: Real Estate Rental property Land $ 540,927 $ 519,814 Buildings and improvements 2,454,559 2,465,656 ----------- ----------- 2,995,486 2,985,470 Less, accumulated depreciation and amortization 452,878 391,946 ----------- ----------- 2,542,608 2,593,524 Real estate under development 204,530 127,685 Undeveloped land parcels 1,348 1,348 ----------- ----------- Real estate, net 2,748,486 2,722,557 Investment and advances in KIR 170,641 142,437 Investments and advances in other real estate joint ventures 98,527 61,601 Investment in retail store leases 9,885 11,316 Cash and cash equivalents 93,847 19,097 Marketable securities 82,997 63,225 Accounts and notes receivable 48,074 44,673 Deferred charges and prepaid expenses 38,031 37,259 Other assets 94,291 69,183 ----------- ----------- $ 3,384,779 $ 3,171,348 =========== =========== Liabilities & Stockholders' Equity: Notes payable $ 1,035,250 $ 1,080,250 Mortgages payable 292,829 245,413 Accounts payable and accrued expenses 68,323 64,024 Dividends payable 57,345 50,570 Other liabilities 32,573 12,985 ----------- ----------- 1,486,320 1,453,242 ----------- ----------- Minority interests in partnerships 8,375 13,767 ----------- ----------- Commitments and contingencies Stockholders' equity Preferred Stock, $1.00 par value, authorized 5,000,000 shares Class A Preferred Stock, $1.00 par value, authorized 345,000 shares Issued and outstanding 300,000 shares 300 300 Aggregate liquidation preference $75,000 Class B Preferred Stock, $1.00 par value, authorized 230,000 shares Issued and outstanding 200,000 shares 200 200 Aggregate liquidation preference $50,000 Class C Preferred Stock, $1.00 par value, authorized 460,000 shares Issued and outstanding 400,000 shares 400 400 Aggregate liquidation preference $100,000 Class D Convertible Preferred Stock, $1.00 par value, authorized 700,000 shares Issued and outstanding 92,390 and 418,254 shares, respectively 92 418 Aggregate liquidation preference $23,098 and $104,564, respectively Common stock, $.01 par value, authorized 200,000,000 shares Issued and outstanding 103,352,570 and 94,717,288 shares, respectively 1,034 947 Paid-in capital 1,976,442 1,819,130 Cumulative distributions in excess of net income (93,131) (113,110) ----------- ----------- 1,885,337 1,708,285 Accumulated other comprehensive income 7,310 -- Notes receivable from officer stockholders (2,563) (3,946) ----------- ----------- 1,890,084 1,704,339 ----------- ----------- $ 3,384,779 $ 3,171,348 =========== ===========

The accompanying notes are an integral part of these consolidated financial statements. 47 KIMCO REALTY CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF INCOME (in thousands, except per share information)

Year Ended December 31, ----------------------------------- 2001 2000 1999 --------- --------- --------- Revenues from rental property $ 468,616 $ 459,407 $ 433,880 --------- --------- --------- Rental property expenses: Rent 13,966 13,522 14,167 Real estate taxes 57,709 55,996 55,644 Interest 89,432 92,100 83,646 Operating and maintenance 46,731 42,449 42,003 Depreciation and amortization 74,209 71,129 67,416 --------- --------- --------- 282,047 275,196 262,876 --------- --------- --------- Income from rental property 186,569 184,211 171,004 Income from investment in retail store leases 3,168 3,985 4,099 --------- --------- --------- 189,737 188,196 175,103 Equity in income of KIR 13,211 9,508 5,974 Equity in income of other real estate joint ventures, net 41,558 5,062 4,537 Minority interests in income of partnerships, net (1,682) (2,054) (1,489) Management fee income 7,797 6,131 5,091 Other income, net 17,815 19,911 9,843 Operating and administrative expenses (28,980) (25,691) (23,833) --------- --------- --------- Income before gain on sale of shopping center properties and income taxes 239,456 201,063 175,226 Gain on sale of development properties 13,418 -- -- Gain on sale of operating properties 3,040 3,962 1,552 --------- --------- --------- Income before income taxes 255,914 205,025 176,778 Provision for income taxes (19,376) -- -- --------- --------- --------- Net income $ 236,538 $ 205,025 $ 176,778 ========= ========= ========= Net income applicable to common shares $ 211,985 $ 178,697 $ 150,300 ========= ========= ========= Net income per common share: Basic $ 2.20 $ 1.93 $ 1.66 ========= ========= ========= Diluted $ 2.16 $ 1.91 $ 1.64 ========= ========= =========

The accompanying notes are an integral part of these consolidated financial statements. 48 KIMCO REALTY CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (in thousands)

Year ended December 31, ---------------------------------- 2001 2000 1999 --------- --------- --------- Net income $ 236,538 $ 205,025 $ 176,778 --------- --------- --------- Other comprehensive income: Unrealized gains on marketable securities 8,784 -- -- Unrealized losses on interest rate swaps (3,884) -- -- Unrealized gain on warrants 2,410 -- -- --------- --------- --------- Other comprehensive income 7,310 -- -- --------- --------- --------- Comprehensive income $ 243,848 $ 205,025 $ 176,778 ========= ========= =========

The accompanying notes are an integral part of these consolidated financial statements. 49 KIMCO REALTY CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY For the Years Ended December 31, 2001, 2000 and 1999 (in thousands, except per share information)

Cumulative Preferred Stock Common Stock Distributions ----------------- ---------------- Paid-in in Excess Issued Amount Issued Amount Capital of Net Income --------------------------------------------------------------- Balance, December 31, 1998 1,329 $ 1,329 90,201 $ 902 $ 1,706,971 $ (124,183) Net income 176,778 Dividends ($1.64 per common share; $1.9375, $2.125, $2.0938, and $1.875 per Class A, Class B, Class C, and Class D Depositary Share, respectively) (175,554) Issuance of common stock 752 8 19,255 Exercise of common stock options 481 5 8,825 Repurchase of common stock (240) (2) (5,078) ----- ------- ------- ------- ----------- ---------- Balance, December 31, 1999 1,329 1,329 91,194 913 1,729,973 (122,959) Net income 205,025 Dividends ($1.81 per common share; $1.9375, $2.125, $2.0938, and $1.875 per Class A, Class B, Class C, and Class D Depositary Share, respectively) (195,176) Issuance of common stock 3,234 31 86,718 Exercise of common stock options 289 3 4,933 Repurchase of Class D Preferred Stock (11) (11) (2,494) Collection of notes receivable ----- ------- ------- ------- ----------- ---------- Balance, December 31, 2000 1,318 1,318 94,717 947 1,819,130 (113,110) Net income 236,538 Dividends ($1.96 per common share; $1.9375, $2.125, $2.0938, and $1.8409 per Class A, Class B, Class C, and Class D Depositary Share, respectively) (216,559) Issuance of common stock 3,906 40 122,103 Exercise of common stock options 1,694 17 34,919 Collection of notes receivable Conversion of Class D Preferred Stock to common stock (326) (326) 3,036 30 290 Accumulated other comprehensive income ----- ------- ------- ------- ----------- ---------- Balance, December 31, 2001 992 $ 992 103,353 $ 1,034 $ 1,976,442 $ (93,131) ===== ======= ======= ======= =========== ==========

Notes Accumulated Receivable Total Other Comprehensive from Officer Stockholders' Income Stockholders Equity ------------------------------------------------------ Balance, December 31, 1998 $ -- $ -- $1,585,019 Net income 176,778 Dividends ($1.64 per common share; $1.9375, $2.125, $2.0938, and $1.875 per Class A, Class B, Class C, and Class D Depositary Share, respectively) (175,554) Issuance of common stock 19,263 Exercise of common stock options (3,821) 5,009 Repurchase of common stock (5,080) ----- ------- ----------- Balance, December 31, 1999 -- (3,821) 1,605,435 Net income 205,025 Dividends ($1.81 per common share; $1.9375, $2.125, $2.0938, and $1.875 per Class A, Class B, Class C, and Class D Depositary Share, respectively) (195,176) Issuance of common stock 86,749 Exercise of common stock options (387) 4,549 Repurchase of Class D Preferred Stock (2,505) Collection of notes receivable 262 262 ----- ------- ----------- Balance, December 31, 2000 -- (3,946) 1,704,339 Net income 236,538 Dividends ($1.96 per common share; $1.9375, $2.125, $2.0938, and $1.8409 per Class A, Class B, Class C, and Class D Depositary Share, respectively) (216,559) Issuance of common stock 122,143 Exercise of common stock options (850) 34,086 Collection of notes receivable 2,233 2,233 Conversion of Class D Preferred Stock to common stock (6) Accumulated other comprehensive income 7,310 7,310 ------- -------- ---------- Balance, December 31, 2001 $ 7,310 $ (2,563) $1,890,084 ======= ======== ==========

The accompanying notes are an integral part of these consolidated financial statements. 50 KIMCO REALTY CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS (in thousands)

Year Ended December 31, ------------------------------------------- 2001 2000 1999 --------- --------- --------- Cash flow from operating activities: Net income $ 236,538 $ 205,025 $ 176,778 Adjustments for noncash items - Depreciation and amortization 74,209 71,129 67,416 Gain on sale of development properties (13,418) -- -- Gain on sale of operating properties, net (3,040) (3,962) (1,552) Equity in income of KIR (13,211) (9,508) (5,974) Equity in income of other real estate joint ventures, net (41,558) (5,062) (4,537) Minority interests in income of partnerships, net 1,682 2,054 1,489 Change in accounts and notes receivable (1,956) (12,806) (2,832) Change in accounts payable and accrued expenses 3,607 (1,176) 1,177 Change in other operating assets and liabilities 44,591 4,852 5,188 --------- --------- --------- Net cash flow provided by operations 287,444 250,546 237,153 --------- --------- --------- Cash flow from investing activities: Acquisition of and improvements to operating real estate (63,403) (158,515) (278,726) Acquisition of and improvements to real estate under development (107,364) -- -- Investment in marketable securities (29,070) (45,616) (17,159) Proceeds from sale of marketable securities 36,427 16,055 11,590 Investment in KIR (28,167) (29,566) -- Net proceeds from sale of interest in KIR -- -- 68,179 Investments and advances to real estate joint ventures (60,365) (500) (13,267) Reimbursement of advances to real estate joint ventures 24,824 2,400 29,287 Redemption of minority interests in real estate partnerships (7,133) -- -- Investments and advances to joint ventures, net (1,382) -- (10,649) Investments and advances to affiliated companies (100) (6,866) (1,450) Investment in mortgage loans receivable (36,099) -- (8,646) Collection of mortgage loans receivable 5,952 2,967 4,545 Proceeds from sale of operating properties 46,766 28,015 11,077 Proceeds from sale of development properties 61,921 -- -- --------- --------- --------- Net cash flow used for investing activities (157,193) (191,626) (205,219) --------- --------- --------- Cash flow from financing activities: Principal payments on debt, excluding normal amortization of rental property debt (4,587) (17,024) (61,098) Principal payments on rental property debt, net (5,126) (4,510) (4,417) Proceeds from mortgage financing 51,230 44,396 28,733 Payment of unsecured obligation -- (18,172) (26,816) Proceeds from issuance of medium-term notes -- 210,000 100,000 Repayment of medium-term notes -- (60,000) -- Proceeds from issuance of senior notes -- -- 130,000 Repayment of senior notes -- (100,000) (100,000) Borrowings under senior term loan -- -- 52,000 Repayment of borrowings under senior term loan -- (52,000) -- Borrowings under revolving credit facility 10,000 90,000 95,000 Repayment of borrowings under revolving credit facility (55,000) (45,000) (95,000) Financing origination costs -- (2,863) -- Dividends paid (209,785) (189,896) (169,708) Payment for repurchase of stock -- (2,505) (5,080) Proceeds from issuance of stock 157,767 79,675 8,608 --------- --------- --------- Net cash flow used for financing activities (55,501) (67,899) (47,778) --------- --------- --------- Change in cash and cash equivalents 74,750 (8,979) (15,844) Cash and cash equivalents, beginning of year 19,097 28,076 43,920 --------- --------- --------- Cash and cash equivalents, end of year $ 93,847 $ 19,097 $ 28,076 ========= ========= ========= Interest paid during the year $ 89,016 $ 89,857 $ 79,971 ========= ========= ========= Income taxes paid during the year $ 24,888 $ -- $ -- ========= ========= ========= Supplemental schedule of noncash investing/financing activity: Acquisition of real estate interests by issuance of stock and/or assumption of debt $ 17,220 $ 30,986 $ 98,770 ========= ========= ========= Investment in real estate joint ventures by issuance of stock and contribution of property $ 3,420 $ -- $ -- ========= ========= ========= Disposition of real estate interests by assignment of mortgage debt $ -- $ 9,124 $ -- ========= ========= ========= Notes received upon dispostion of real estate interests $ 400 $ -- $ -- ========= ========= ========= Notes received upon exercise of stock options $ 850 $ 387 $ 3,821 ========= ========= ========= Proceeds held in escrow from sale of real estate interest $ -- $ 2,700 $ -- ========= ========= ========= Declaration of dividends paid in succeeding year $ 57,345 $ 50,570 $ 45,290 ========= ========= =========

The accompanying notes are an integral part of these consolidated financial statements 51 KIMCO REALTY CORPORATION AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 1. Summary of Significant Accounting Policies: Business Kimco Realty Corporation (the "Company" or "Kimco"), its subsidiaries, affiliates and related real estate joint ventures are engaged principally in the operation of neighborhood and community shopping centers which are anchored generally by discount department stores, supermarkets or drugstores. The Company also provides management services for shopping centers owned by affiliated entities and various real estate joint ventures. Additionally, in connection with the Tax Relief Extension Act of 1999 (the "RMA"), which became effective January 1, 2001, the Company is now permitted to participate in activities which it was precluded from previously in order to maintain its qualification as a Real Estate Investment Trust ("REIT"), so long as these activities are conducted in entities which elect to be treated as taxable subsidiaries under the Code, subject to certain limitations. As such, the Company, through its taxable REIT subsidiaries, is engaged in various retail real estate related opportunities including (i) merchant building, through its Kimco Developers, Inc. ("KDI") subsidiary, which is primarily engaged in the ground-up development of neighborhood and community shopping centers and the subsequent sale thereof upon completion and (ii) retail real estate advisory and disposition services which primarily focuses on leasing and disposition strategies for distressed retail real estate. The Company seeks to reduce its operating and leasing risks through diversification achieved by the geographic distribution of its properties, avoiding dependence on any single property, and a large tenant base. At December 31, 2001, the Company's single largest neighborhood and community shopping center accounted for only 1.5% of the Company's annualized base rental revenues and only 0.9% of the Company's total shopping center gross leasable area ("GLA"). At December 31, 2001, the Company's five largest tenants include Kmart Corporation (see Note 20), Kohl's, The Home Depot, TJX Companies and Wal-Mart, which represented approximately 12.6%, 3.1%, 2.5%, 1.9% and 1.7%, respectively, of the Company's annualized base rental revenues. The above statistics do not include the KIR Portfolio, as defined in Note 3 to the Consolidated Financial Statements. Principles of Consolidation and Estimates The accompanying Consolidated Financial Statements include the accounts of the Company, its subsidiaries, all of which are wholly-owned, and all partnerships in which the Company has a controlling interest. All significant intercompany balances and transactions have been eliminated in consolidation. Generally accepted accounting principles ("GAAP") require the Company's management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities and the reported amounts of revenues and expenses during a reporting period. The most significant assumptions and estimates relate to the valuation of real estate, depreciable lives, revenue recognition and the recoverability of trade accounts receivable. Application of these assumptions requires the exercise of judgment as to future uncertainties and, as a result, actual results could differ from these estimates. Real Estate Real estate assets are stated at cost, less accumulated depreciation and amortization. If there is an event or a change in circumstances that indicates that the basis of a property may not be recoverable, then management will assess any impairment in value by making a comparison of (i) the current and projected operating cash flows (undiscounted and without interest charges) of the property over its remaining useful life and (ii) the net carrying amount of the property. If the current and projected operating cash flows (undiscounted and without interest charges) are less than the carrying value of the property, the carrying value would be written down to an amount to reflect the fair value of the property. 52 KIMCO REALTY CORPORATION AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, continued Depreciation and amortization are provided on the straight-line method over the estimated useful lives of the assets, as follows: Buildings 15 to 39 years Fixtures and leasehold improvements Terms of leases or useful lives, whichever is shorter Expenditures for maintenance and repairs are charged to operations as incurred. Significant renovations are capitalized. Real Estate Under Development Real estate under development represents the ground-up development of neighborhood and community shopping centers which are held for sale upon completion. These properties are carried at cost and no depreciation is recorded on these assets. If in management's opinion, the net sales price of these assets is less than the net carrying value, a valuation allowance would be established, and the carrying value would be written down to an amount to reflect the fair value of the property. Investments in Real Estate Joint Ventures Investments in real estate joint ventures are accounted for on the equity method. Marketable Securities The Company classifies its existing marketable equity securities as available-for-sale in accordance with the provisions of Statement of Financial Accounting Standard No. 115, Accounting for Certain Investments in Debt and Equity Securities. These securities are carried at fair market value, with unrealized gains and losses reported in stockholders' equity as a component of Other Comprehensive Income ("OCI"). Gains or losses on securities sold are based on the specific identification method. All debt securities are classified as held-to-maturity because the Company has the positive intent and ability to hold the securities to maturity. Held-to-maturity securities are stated at amortized cost, adjusted for amortization of premiums and accretion discounts to maturity. Deferred Leasing and Financing Costs Costs incurred in obtaining tenant leases and long-term financing, included in deferred charges and prepaid expenses in the accompanying Consolidated Balance Sheets, are amortized over the terms of the related leases or debt agreements, as applicable. Revenue Recognition Minimum revenues from rental property are recognized on a straight-line basis over the terms of the related leases. Certain of these leases also provide for percentage rents based upon the level of sales achieved by the lessee. The percentage rents are recorded once the required sales level is achieved. Income Taxes The Company and its subsidiaries file a consolidated federal income tax return. The Company has made an election to qualify, and believes it is operating so as to qualify, as a REIT for federal income tax purposes. Accordingly, the Company generally will not be subject to federal income tax, provided that distributions to its stockholders equal at least the amount of its REIT taxable income as defined under the Code. In connection with the RMA, which became effective January 1, 2001, the Company is now permitted to participate in certain activities which it was previously precluded from in order to maintain its qualification as a REIT, so long as these activities are conducted in entities which elect to be treated as taxable subsidiaries under the Code. As such, the Company is subject to federal and state income taxes on the income from these activities. 53 KIMCO REALTY CORPORATION AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, continued Income taxes are accounted for under the asset and liability method. Deferred tax assets and liabilities are recognized for the estimated future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases and operating loss and tax credit carryforwards. Deferred tax assets and liabilities are measured using enacted tax rates in effect for the year in which those temporary differences are expected to be recovered or settled. Derivative / Financial Instruments Effective January 1, 2001, the Company adopted Statement of Financial Accounting Standard No. 133, Accounting for Derivative Instruments and Hedging Activities ("FASB No. 133"), as amended. FASB No. 133 establishes accounting and reporting standards for derivative instruments. This accounting standard requires the Company to measure derivative instruments at fair value and to record them in the Consolidated Balance Sheet as an asset or liability, depending on the Company's rights or obligations under the applicable derivative contract. In addition, the fair value adjustments will be recorded in either stockholders' equity or earnings in the current period based on the designation of the derivative. The effective portions of changes in fair value of cash flow hedges are reported in OCI and are subsequently reclassified into earnings when the hedged item affects earnings. The changes in fair value of derivative instruments which are not designated as hedging instruments and the ineffective portions of hedges are recorded in earnings for the current period. The Company utilizes derivative financial instruments to reduce exposure to fluctuations in interest rates, foreign currency exchange rates and market fluctuation on equity securities. The Company has established policies and procedures for risk assessment and the approval, reporting and monitoring of derivative financial instruments activities. The Company has not, and does not plan to enter into financial instruments for trading or speculative purposes. Additionally, the Company has a policy of only entering into derivative contracts with major financial institutions. The principal financial instruments used by the Company are interest rate swaps, foreign currency exchange forward contracts and warrant contracts. In accordance with the provisions of FASB No. 133, these derivative instruments were designated and qualified as either cash flow or fair value hedges (see Note 11). Earnings Per Share On October 24, 2001, the Company's Board of Directors declared a three-for-two split (the "Stock Split") of the Company's common stock which was effected in the form of a stock dividend paid on December 21, 2001 to stockholders of record on December 10, 2001. All share and per share data included in the accompanying Consolidated Financial Statements and Notes thereto have been adjusted to reflect this Stock Split. The following table sets forth the reconciliation of earnings and the weighted average number of shares used in the calculation of basic and diluted earnings per share (amounts presented in thousands, except per share data):

2001 2000 1999 -------- -------- -------- Computation of Basic Earnings Per Share: Net income applicable to common shares $211,985 $178,697 $150,300 Weighted average common shares outstanding 96,317 92,688 90,709 -------- -------- -------- Basic Earnings Per Share $ 2.20 $ 1.93 $ 1.66 ======== ======== ======== Computation of Diluted Earnings Per Share: Net income applicable to common shares $211,985 $178,697 $150,300 Dividends on Class D Convertible Preferred Stock 6,115 - (a) - (a) -------- -------- -------- Net income for diluted earnings per share $218,100 $178,697 $150,300 ======== ======== ======== Weighted average common shares outstanding - Basic 96,317 92,688 90,709 Effect of dilutive securities: Stock options 1,139 965 757 Assumed conversion of Class D Preferred Stock to Common Stock 3,707 - (a) - (a) -------- -------- -------- Shares for diluted earnings per share 101,163 93,653 91,466 -------- -------- -------- Diluted Earnings Per Share $ 2.16 $ 1.91 $ 1.64 ======== ======== ========

54 KIMCO REALTY CORPORATION AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, continued (a) In 2000 and 1999, the effect of the assumed conversion of the Class D Preferred Stock had an anti-dilutive effect upon the calculation of net income per common share. Accordingly, the impact of such conversion has not been included in the determination of diluted earnings per common share. New Accounting Pronouncements In July 2001, the Financial Accounting Standards Board ("FASB") issued Statement of Financial Accounting Standard ("SFAS") No. 141, Business Combinations ("FASB No. 141") which addresses financial accounting and reporting for business combinations. Effective July 1, 2001, all business combinations must be accounted for using the purchase method of accounting, which requires an allocation of the purchase price paid to the assets acquired and liabilities assumed. Additionally, FASB No. 141 requires that an intangible asset be recognized as an asset apart from goodwill if it arises from contractual or legal rights. The adoption of FASB No. 141 did not have a material impact on the Company's financial position or results of operations. In July 2001, the FASB issued SFAS No. 142, Goodwill and Other Intangible Assets ("FASB No. 142"). This statement addresses financial accounting and reporting for intangible assets acquired, goodwill and other intangible assets after their acquisition. This statement requires that goodwill and intangible assets that have indefinite useful lives will not be amortized but rather will be tested at least annually for impairment. In addition, FASB No. 142 requires disclosures about the carrying amount of and changes in goodwill from period to period. Goodwill and intangible assets acquired after June 30, 2001 will be subject immediately to the provisions of this statement. The provisions are effective for fiscal years beginning after December 15, 2001. The adoption of FASB No. 142 is not expected to have a material impact as to the Company's financial position or results of operations. In August 2001, the FASB issued SFAS No. 144, Accounting for the Impairment or Disposal of Long-Lived Assets ("FASB No. 144"), which supercedes SFAS No. 121. FASB No. 144 requires that long-lived assets that are to be disposed of by sale be measured at the lower of book value or fair value less cost to sell. FASB No. 144 retains the requirements of SFAS No. 121 regarding impairment loss recognition and measurement. In addition, it requires that one accounting model be used for long-lived assets to be disposed of by sale and broadens the presentation of discontinued operations to include more disposal transactions. FASB No. 144 is effective for fiscal years beginning after December 15, 2001. The adoption of FASB No. 142. is not expected to have a material impact as to the Company's financial position or results of operations. Reclassifications Certain reclassifications of prior years' amounts have been made to conform with the current year presentation. 2. Property Acquisitions, Developments and Other Investments: Operating Properties - During the years 2001, 2000 and 1999 certain subsidiaries and affiliates of the Company acquired real estate interests, in separate transactions, at aggregate costs of approximately $21.1 million, $62.5 million and $249.0 million, respectively. 55 KIMCO REALTY CORPORATION AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, continued Ground-Up Development Properties - Effective January 1, 2001, the Company elected taxable REIT subsidiary status for its wholly owned development subsidiary, Kimco Developers, Inc. ("KDI"). KDI is primarily engaged in the ground-up development of neighborhood and community shopping centers and the subsequent sale thereof upon completion. During the years 2001, 2000 and 1999 certain subsidiaries and affiliates of the Company expended approximately $119.4 million, $74.0 million, and $80.0 million, respectively, in connection with the purchase of land and construction costs related to its ground-up development projects. Other Investments - During June 2001, the Company purchased from an unaffiliated partner the remaining 20% interest in a property located in Skokie, IL for an aggregate purchase price of approximately $0.8 million. The property is now 100% owned by the Company. Additionally, during June 2001, the Company purchased from an unaffiliated partner the remaining 10% interest in a property located in Smithtown, NY for an aggregate purchase price of approximately $2.5 million. The property is now 100% owned by the Company. During August 2001, the Company, through a joint venture in which the Company has a 50% interest, provided $27.5 million of debtor-in-possession financing to Ames Department Stores, Inc. ("Ames"), a retailer in bankruptcy. This loan is collaterized by the real estate and leases owned by Ames. During December 2001, the Company purchased the remaining 10% interest in Kimco Select Investments, a New York general partnership for an aggregate price of approximately $1.7 million. Kimco Select Investments was formed in 1997 to provide the Company, through its 90% ownership interest, the opportunity to make investments outside of its core neighborhood and community shopping center business. In January 2000, the Company acquired fee title to a shopping center property in which the Company held a leasehold interest for an aggregate purchase price of approximately $2.5 million. These property acquisitions and other investments have been funded principally through the application of proceeds from the Company's public unsecured debt issuances, equity offerings and proceeds from mortgage financings (see Notes 7, 8 and 12). 3. Investment and Advances in Kimco Income REIT ("KIR"): During 1998, the Company formed KIR, an entity that was established for the purpose of investing in high quality real estate properties financed primarily with individual non-recourse mortgages. These properties include, but are not limited to, fully developed properties with strong, stable cash flows from credit-worthy retailers with long-term leases. The Company originally held a 99.99% limited partnership interest in KIR. Subsequent to KIR's formation, the Company sold a significant portion of its original interest to an institutional investor and admitted three other limited partners. As of December 31, 2001, KIR has received total capital commitments of $569.0 million, of which the Company subscribed to $247.0 million and the four limited partners subscribed to $322.0 million. During 2001, the limited partners in KIR contributed $71.0 million towards their respective capital commitments, including $30.8 million by the Company. As of December 31, 2001, cumulative capital contributions made by the limited partners totaled $385.0 million, including contributions from the Company of $167.3 million. As of December 31, 2001, KIR had total unfunded capital commitments of $184.0 million and the Company maintained its 43.3% non-controlling limited partnership interest which is accounted for under the equity method of accounting. The Company's equity in income from KIR for the years ended December 31, 2001 and 2000 and for the period April 28, 1999 to December 31, 1999, was approximately $13.2 million, $9.5 million and $6.0 million, respectively. 56 KIMCO REALTY CORPORATION AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, continued In addition, KIR entered into a master management agreement with the Company, whereby, the Company will perform services for fees related to management, leasing, operations, supervision and maintenance of the joint venture properties. For the years ended December 31, 2001, 2000 and for the period April 28, 1999 to December 31, 1999, the Company (i) earned management fees of approximately $3.3 million, $2.0 million and $0.9 million, respectively, (ii) received reimbursement of administrative fees of approximately $1.4 million, $1.4 million and $0.5 million, respectively, and (iii) earned leasing commissions of approximately $0.3 million, $0.1 million and $0.1 million, respectively. During the year ended December 31, 2001, KIR purchased 12 shopping center properties (including one property from the Company for $37.0 million), in separate transactions, aggregating 2.9 million square feet of GLA for approximately $349.0 million, including the assumption of approximately $40.2 million of mortgage debt. During the year ended December 31, 2000, KIR purchased 24 shopping center properties, in separate transactions, aggregating 3.8 million square feet of GLA for approximately $421.0 million, including the assumption of approximately $152.0 million of debt. During December 2001, KIR disposed of a shopping center property in Lake Mary, FL for an aggregate sales price of approximately $2.4 million. This disposition resulted in a gain of approximately $0.5 million. Proceeds from this sale will be used to acquire an exchange shopping center property. During 2001, KIR obtained individual non-recourse, non-cross collateralized fixed-rate mortgages aggregating approximately $280.0 million on 14 of its previously unencumbered properties with terms ranging from 7 to 10 years and rates ranging from 6.76% to 7.69% per annum. The net proceeds were used to finance the acquisition of various shopping center properties. During 2000, KIR obtained individual non-recourse, non-cross collateralized ten-year fixed-rate mortgages aggregating approximately $137.3 million on 12 of its previously unencumbered properties with rates ranging from 7.97% to 8.36% per annum. The net proceeds were used to finance the acquisition of various shopping center properties. During 2000, KIR established a two-year $100.0 million secured revolving credit facility with a syndicate of banks, which is scheduled to expire in November 2002. This facility is collateralized by the unfunded subscriptions of certain partners, including those of the Company. Under the terms of the facility, funds may be borrowed for general corporate purposes including the acquisition of institutional quality properties. Borrowings under the facility accrue interest at LIBOR plus 0.80%. A fee of 0.15% per annum is payable quarterly in arrears on the unused portion of the facility. As of December 31, 2001, there was $15.0 million outstanding under this facility. As of December 31, 2001, the KIR portfolio was comprised of 64 shopping center properties aggregating approximately 12.0 million square feet of GLA located in 20 states. Summarized financial information for the operations of KIR is as follows (in millions): December 31, 2001 December 31, 2000 ----------------- ----------------- Assets: Real estate, net $1,316.0 $ 985.6 Other assets 71.2 43.5 -------- -------- $1,387.2 $1,029.1 ======== ======== Liabilities and Partners' Capital: Notes payable $ 15.0 $ 58.0 Mortgages payable 935.1 623.3 Other liabilities 35.0 15.9 Minority interest 14.8 10.8 Partners' capital 387.3 321.1 -------- -------- $1,387.2 $1,029.1 ======== ======== 57 KIMCO REALTY CORPORATION AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, continued

For the period For the year ended For the year ended April 28, 1999 to December 31, 2001 December 31, 2000 December 31, 1999 ----------------- ----------------- ----------------- Revenues from rental property $ 151.5 $ 86.5 $ 39.9 ------------ ------------ ------------ Operating expenses (35.4) (18.9) (8.7) Mortgage interest (59.5) (31.0) (14.5) Depreciation and amortization (24.4) (14.1) (6.6) Gain on sale of property 0.5 -- -- Other, net (1.3) 0.4 0.6 ------------ ------------ ------------ (120.1) (63.6) (29.2) ------------ ------------ ------------ Net income $ 31.4 $ 22.9 $ 10.7 ============ ============ ============

4. Investments and Advances in Other Real Estate Joint Ventures: The Company and its subsidiaries have investments in and advances to various other real estate joint ventures. These joint ventures are engaged primarily in the operation of shopping centers, which are either owned or held under long-term operating leases. During March 2001, the Company, through a taxable REIT subsidiary, formed a real estate joint venture (the "Ward Venture") in which the Company has a 50% interest, for purposes of acquiring asset designation rights for substantially all of the real estate property interests of the bankrupt estate of Montgomery Ward LLC and its affiliates. These asset designation rights have provided the Ward Venture the ability to direct the ultimate disposition of the 315 fee and leasehold interests held by the bankrupt estate. The asset designation rights expire in August 2002 for the leasehold positions and December 2004 for the fee owned locations. During the marketing period, the Ward Venture will be responsible for all carrying costs associated with the properties until the property is designated to a user. As of December 31, 2001, the Ward Venture has completed transactions on 271 properties, and the Company has recognized net profits of approximately $20.9 million after provision for income taxes. The pre-tax profits from the Ward Venture of approximately $34.6 million are included in the Consolidated Statements of Income in the caption Equity in income of other real estate joint ventures, net. Additionally, during March 2001, the Company exercised its option to acquire a 50% interest in a joint venture from KC Holdings, Inc. ("KC Holdings"), an entity formed in connection with the Company's initial public stock offering in November 1991. This joint venture consists of three shopping center properties located in Buffalo, NY, comprising approximately 0.4 million square feet of GLA. The joint venture was acquired for an aggregate option price of approximately $3.5 million, paid approximately $2.7 million in cash and $0.8 million in shares of the Company's common stock (29,638 shares valued at $27.67 per share). The members of the Company's Board of directors who are not also shareholders of KC Holdings, unanimously approved the Company's purchase of this joint venture investment. During October 2001, the Company formed a joint venture (the "RioCan Venture") with RioCan Real Estate Investment Trust ("RioCan", Canada's largest publicly-traded REIT measured by GLA), in which the Company has a 50% interest, to acquire retail properties and development projects in Canada. The acquisitions and development projects are to be sourced and managed by RioCan and are subject to review and approval by a joint oversight committee consisting of RioCan management and the Company's management personnel. During October 2001, the RioCan Venture acquired a portfolio of four shopping center properties located in British Columbia for an aggregate purchase price of approximately $170.0 million Canadian dollars ("CAD") (approximately USD $107.8 million) including the assumption of approximately CAD $108.5 million (approximately USD $68.8 million) in mortgage debt. 58 KIMCO REALTY CORPORATION AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, continued During 1999, the Company invested approximately $4.9 million in a partnership which is developing an office and retail center in Dover, DE and separately, through a partnership investment, the Company invested approximately $5.7 million in a joint venture which acquired a parcel of land in Henderson, NV for the development of a retail shopping center. The Company has a 50% interest in each of these partnerships. Summarized financial information for the recurring operations of these real estate joint ventures, excluding the Ward Venture transaction described above, is as follows (in millions):

December 31, ------------------------------- 2001 2000 -------------- -------------- Assets: Real estate, net $ 360.4 $ 235.7 Other assets 22.9 19.3 -------------- -------------- $ 383.3 $ 255.0 ============== ============== Liabilities and Partners' Capital: Mortgages payable $ 254.4 $ 175.3 Other liabilities 37.6 23.9 Partners' capital 91.3 55.8 -------------- -------------- $ 383.3 $ 255.0 ============== ==============

Year Ended December 31, -------------------------------------------- 2001 2000 1999 ------------ ------------ ------------ Revenues from rental property $ 57.9 $ 48.4 $ 45.7 ------------ ------------ ------------ Operating expenses (19.7) (16.1) (15.9) Mortgage interest (15.1) (13.8) (10.8) Depreciation and amortization (6.6) (5.7) (5.0) Other, net 0.1 0.2 0.3 ------------ ------------ ------------ (41.3) (35.4) (31.4) ------------ ------------ ------------ Net income $ 16.6 $ 13.0 $ 14.3 ============ ============ ============

Other liabilities in the accompanying Consolidated Balance Sheets include accounts with certain real estate joint ventures totaling approximately $8.7 million and $4.8 million at December 31, 2001 and 2000, respectively. The Company and its subsidiaries have varying equity interests in these real estate joint ventures, which may differ from their proportionate share of net income or loss recognized in accordance with generally accepted accounting principles. 5. Investment in Retail Store Leases: The Company has interests in various retail store leases relating to the anchor store premises in neighborhood and community shopping centers. These premises have been sublet to retailers who lease the stores pursuant to net lease agreements. Income from the investment in these retail store leases during the years ended December 31, 2001, 2000 and 1999 was approximately $3.2 million, $4.0 million and $4.1 million, respectively. These amounts represent sublease revenues during the years ended December 31, 2001, 2000 and 1999 of approximately $16.8 million, $19.0 million and $20.3 million, respectively, less related expenses of $12.2 million, $13.6 million and $14.7 million, respectively, and an amount, which in management's estimate, reasonably provides for the recovery of the investment over a period representing the expected remaining term of the retail store leases. The Company's future minimum revenues under the terms of all noncancellable tenant subleases and future minimum obligations through the remaining terms of its retail store leases, assuming no new or renegotiated leases are executed for such premises, for future years are as follows (in millions): 2002, $12.2 and $10.3; 2003, $12.0 and $10.0; 2004, $9.7 and $8.2; 2005, $7.8 and $6.7; 2006, $7.0 and $5.2 and thereafter, $11.5 and $7.6, respectively. 59 KIMCO REALTY CORPORATION AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, continued 6. Cash and Cash Equivalents: Cash and cash equivalents (demand deposits in banks, commercial paper and certificates of deposit with original maturities of three months or less) includes tenants' security deposits, escrowed funds and other restricted deposits approximating $0.1 million at December 31, 2001 and 2000. Cash and cash equivalent balances may, at a limited number of banks and financial institutions, exceed insurable amounts. The Company believes it mitigates its risks by investing in or through major financial institutions. Recoverability of investments is dependent upon the performance of the issuers. 7. Notes Payable: The Company has implemented a medium-term notes ("MTN") program pursuant to which it may, from time to time, offer for sale its senior unsecured debt for any general corporate purposes, including (i) funding specific liquidity requirements in its business, including property acquisitions, development and redevelopment costs, and (ii) managing the Company's debt maturities. During October 2000, the Company issued an aggregate $100.0 million of senior fixed-rate MTNs under its MTN program. These issuances consisted of (i) a $50.0 million MTN which matures in November 2005 and bears interest at 7.68% per annum, and (ii) a $50.0 million MTN which matures in November 2007 and bears interest at 7.86% per annum. Interest on these notes is payable semi-annually in arrears. The proceeds from these MTN issuances were used to repay a $100.0 million senior note that bore interest at 7.25% and matured in November 2000. As of December 31, 2001, a total principal amount of $490.25 million, in senior fixed-rate MTNs had been issued under the MTN program primarily for the acquisition of neighborhood and community shopping centers, the expansion and improvement of properties in the Company's portfolio and the repayment of certain debt of the Company. These fixed-rate notes had maturities ranging from five to twelve years at the time of issuance and bear interest at rates ranging from 6.70% to 7.91%. Interest on these fixed-rate senior unsecured notes is payable semi-annually in arrears. During August 2000, the Company issued $110.0 million of floating rate MTNs under its MTN program. These floating rate MTNs were priced at 99.7661% of par, mature in August 2002, and bear interest at LIBOR plus 0.25%. Interest on these MTNs is payable quarterly in arrears. As of November 2000, the Company entered into an interest rate swap agreement for the term of these MTNs, which effectively fixed the interest rate at 6.865% per annum. The proceeds from this MTN issuance were used to (i) repay a $60.0 million MTN that matured in August 2000 and bore interest at LIBOR plus 0.15% per annum and (ii) prepay a $52.0 million term loan that matured in November 2000 and bore interest at LIBOR plus 0.70% per annum. As of December 31, 2001, the Company has a total principal amount of $335.0 million, in fixed-rate unsecured senior notes. These fixed-rate notes have maturities ranging from 2003 through 2009 and bear interest at rates ranging from 6.50% to 7.50%. Interest on these fixed-rate senior unsecured notes is payable semi-annually in arrears. As of December 31, 2001, the Company had outstanding $100.0 million of remarketed reset notes, which mature in August 2008. The interest rate spread applicable to each period is determined pursuant to a remarketing agreement between the Company and a financial institution. The current interest rate is Libor plus 0.58% per annum, and interest is payable quarterly in arrears. As of November 2001, the Company entered into an interest rate swap agreement which effectively fixed the interest rate at 2.93% per annum through August 2002. In accordance with the terms of the Indenture, as amended, pursuant to which the Company's senior, unsecured notes have been issued, the Company is (a) subject to maintaining certain maximum leverage ratios on both unsecured senior corporate and secured debt, minimum debt service coverage ratios and minimum equity levels, and (b) restricted from paying dividends in amounts that exceed by more than $26.0 million the funds from operations, as defined, generated through the end of the calendar quarter most recently completed prior to the declaration of such dividend; however, this dividend limitation does not apply to any distributions necessary to maintain the Company's qualification as a REIT providing the Company is in compliance with its total leverage limitations. 60 KIMCO REALTY CORPORATION AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, continued During August 2000, the Company established a $250.0 million, unsecured revolving credit facility (the "Credit Facility") with a group of banks which is scheduled to expire in August 2003. This Credit Facility, which replaced the Company's $215.0 million unsecured revolving credit facility has made available funds for general corporate purposes, including the funding of property acquisitions, development and redevelopment costs. Interest on borrowings accrues at a spread (currently 0.55%) to LIBOR or money-market rates, as applicable, which fluctuates in accordance with changes in the Company's senior debt ratings. As part of this Credit Facility, the Company has a competitive bid option where the Company may auction up to $100.0 million of its requested borrowings to the bank group. This competitive bid option provides the Company the opportunity to obtain pricing below the currently stated spread to LIBOR of 0.55%. A facility fee of 0.15% per annum is payable quarterly in arrears. Pursuant to the terms of the agreement, the Company, among other things, is (a) subject to maintaining certain maximum leverage ratios on both unsecured senior corporate and secured debt, a minimum debt service coverage ratio and minimum unencumbered asset and equity levels, and (b) restricted from paying dividends in amounts that exceed 90% of funds from operations, as defined, plus 10% of the Company's stockholders' equity determined in accordance with generally accepted accounting principles. As of December 31, 2001, there were no borrowings outstanding under this Credit Facility. The scheduled maturities of all unsecured senior notes payable as of December 31, 2001 are approximately as follows (in millions): 2002, $110.0; 2003, $100.0; 2004, $100.0; 2005, $200.25; 2006, $85.0 and thereafter, $440.0. 8. Mortgages Payable: During 2001, the Company obtained four individual non-recourse fixed-rate mortgage loans of which three are on Kmart anchored shopping centers, providing aggregate proceeds to the Company of approximately $51.2 million. These ten-year loans mature in 2011 and have effective interest rates ranging from 7.31% to 7.64% per annum. During 2000, the Company obtained individual non-recourse, fixed-rate mortgage financing on five Kmart anchored shopping centers, providing aggregate proceeds to the Company of approximately $44.2 million. These ten-year loans mature in 2010 and have effective interest rates ranging from 7.91% to 8.15% per annum. Mortgages payable, collateralized by certain shopping center properties and related tenants' leases, are generally due in monthly installments of principal and/or interest which mature at various dates through 2023. Interest rates range from approximately 4.51% to 9.50% (weighted average interest rate of 7.75% as of December 31, 2001). The scheduled maturities of all mortgages payable as of December 31, 2001, are approximately as follows (in millions): 2002, $13.4; 2004, $8.9; 2005, $14.9; 2006, $34.5 and thereafter, $221.1. Three of the Company's properties are encumbered by approximately $11.7 million in floating-rate, tax-exempt mortgage bond financing. The rates on the bonds are reset annually, at which time bondholders have the right to require the Company to repurchase the bonds. The Company has engaged a remarketing agent for the purpose of offering for resale those bonds that are tendered to the Company. All bonds tendered for redemption in the past have been remarketed and the Company has arrangements, including letters of credit, with banks to both collateralize the principal amount and accrued interest on such bonds and to fund any repurchase obligations. 9. KC Holdings: To facilitate the Company's November 1991 initial public stock offering (the "IPO"), 46 shopping center properties and certain other assets, together with indebtedness related thereto, were transferred to subsidiaries of KC Holdings, a newly-formed corporation that is owned by the stockholders of the Company prior to the IPO. The Company was granted ten-year, fixed-price acquisition options (the "Acquisition Options") to reacquire the real estate assets owned by KC Holdings' subsidiaries, subject to any liabilities outstanding with respect to such assets at the time of an option exercise. During the Acquisition Options period, which expired in November 2001, KC Holdings' subsidiaries had conveyed 29 shopping centers and a 50% interest in a joint venture consisting of three properties back to the Company. Additionally, KC Holdings' subsidiaries disposed of ten additional centers in transactions with third parties. The members of the Company's Board of Directors who are not also shareholders of KC Holdings unanimously approved the purchase of each of these properties that have been reacquired by the Company from KC Holdings. The Company manages three of KC Holdings four remaining shopping center properties pursuant to a management agreement (See Note 14). 61 KIMCO REALTY CORPORATION AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, continued 10. Fair Value Disclosure of Financial Instruments: All financial instruments of the Company are reflected in the accompanying Consolidated Balance Sheets at amounts which, in management's estimation based upon an interpretation of available market information and valuation methodologies (including discounted cash flow analyses with regard to fixed-rate debt) considered appropriate, reasonably approximate their fair values. Such fair value estimates are not necessarily indicative of the amounts that would be realized upon disposition of the Company's financial instruments. 11. Financial Instruments - Derivatives and Hedging: The Company is exposed to the effect of changes in interest rates, foreign currency exchange rate fluctuations and market value fluctuations of equity securities. The Company limits these risks by following established risk management policies and procedures including the use of derivatives. The principal financial instruments currently used by the Company are interest rate swaps, foreign currency exchange forward contracts and warrant contracts. The Company, from time to time, hedges the future cash flows of its floating-rate debt instruments to reduce exposure to interest rate risk principally through interest rate swaps with major financial institutions. The Company has interest-rate swap agreements on its $110.0 million floating-rate MTN and on its $100.0 million floating-rate remarketed reset notes, which have been designated and qualified as cash flow hedges. The Company has determined that these swap agreements are highly effective in offsetting future variable interest cash flows related to the Company's debt portfolio. The adoption of FASB No. 133 as of January 1, 2001, resulted in a cumulative transition adjustment of $1.5 million to OCI and a corresponding liability for the same amount. For the year ended December 31, 2001, the change in the fair value of the interest rate swaps was $2.4 million which was recorded in OCI with a corresponding liability for the same amount. During 2001, the Company entered into foreign currency forward contracts on its Canadian investment in marketable securities in the amount of approximately CAD $26.3 million (approximately USD $16.9 million) and on its Canadian investment in real estate in the amount of approximately CAD $29.8 million (approximately USD $18.9 million). The Company has designated these foreign currency forward contracts as fair value hedges. The Company expects these forward contracts to be highly effective in limiting its exposure to the variability in the fair value of its Canadian investments as it relates to changes in the exchange rate. The gain or loss on the forward contracts will be recognized currently in earnings and the gain or loss on the Canadian investments attributable to changes in the exchange rate will be recognized currently in earnings and shall adjust the carrying amount of the hedged investments. During 2001, the Company acquired warrants to purchase the common stock of a Canadian REIT. The Company has designated the warrants as a cash flow hedge of the variability in expected future cash outflows upon purchasing the common stock. The Company has determined the hedged cash outflow is probable and expected to occur prior to the expiration date of the warrants. The Company has determined that the warrants are fully effective and recorded the change in fair value of the warrants of approximately $2.4 million in OCI with a corresponding asset for the same amount. 62 KIMCO REALTY CORPORATION AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, continued The following table summarized the notional values and fair values of the Company's derivative financial instruments as of December 31, 2001:

Fair Value Hedge Type Notional Value Rate Maturity (in millions) ---------- -------------- ---- -------- ------------- Interest rate swap - cash flow $110.0 million 6.615% 8/02 ($3.7) Interest rate swap - cash flow $100.0 million 2.35% 8/02 ($0.2) Foreign currency forward - fair CAD $26.3 million 1.561 9/02 $0.3 value Foreign currency forward - fair CAD $29.8 million 1.578 1/02 $0.2 value Warrants - cash flow 2,500,000 shares of CAD 9/06 $2.4 common stock $11.02

As of December 31, 2001, these derivative instruments were reported at their fair value as other liabilities of $3.9 million and other assets of $2.9 million. During the next 12 months, the Company expects to reclassify to earnings as expense approximately $3.4 million of the current balance in accumulated OCI primarily related to the fair value of the interest rate swaps. 12. Preferred and Common Stock Transactions: During March 2001, the Company issued 29,638 shares of common stock at $27.67 per share in connection with the exercise of its option to acquire a 50% interest in a joint venture consisting of three shopping center properties from KC Holdings (see Note 9). During November 2001, the Company completed a primary public stock offering of 2,250,000 shares of common stock priced at $32.85 per share. The net proceeds from this sale of common stock, totaling approximately $70.1 million (after related transaction costs of $3.8 million) will be used primarily to invest equity capital in a new joint venture formed with G.E. Capital Real Estate and for additional equity capital in KIR (see Note 3). During December 2001, the Company completed a primary public stock offering of 1,500,000 shares of common stock priced at $33.57 per share. The net proceeds from this sale of common stock, totaling approximately $47.6 million (after related transaction cost of $2.7 million) will be used for general corporate purposes, including (i) the investment of additional equity capital in KIR (see Note 3) and (ii) the development, redevelopment and expansion of properties in the Company's portfolio. Additionally, during November 2001, the Company announced the redemption of all outstanding depositary shares of the Company's 7-1/2% Class D Cumulative Convertible Preferred Stock (the "Class D Preferred Stock") in exchange for shares of the Company's common stock. The Board of Directors set January 3, 2002 as the mandatory redemption date on which all outstanding depositary shares of Class D Preferred Stock would be redeemed. Holders of the Class D Preferred Stock on the redemption date received 0.93168 shares of the Company's common stock, as adjusted for the Company's three-for-two common stock split, for each depositary share redeemed. During 2001, 3,258,642 depositary shares of the Class D Preferred Stock were voluntarily converted to common stock by the holders. On January 3, 2002, the remaining 923,900 depositary shares of the Class D Preferred Stock were redeemed for common stock by the Company and a final dividend payment of 43.4680 cents per class D Depositary share was paid on January 15, 2002. During May 2000, the Company repurchased from an officer and director of the Company 100,217 depositary shares of its Class D Preferred Stock at a price of $25.00 per depositary share, totaling approximately $2.5 million. The purchase price was at par, which was less than the market price on the date of purchase. During June 2000, the Company issued 427,722 shares of common stock at $27.18 per share in connection with the exercise of its option to acquire two shopping center properties from KC Holdings (See Note 9). 63 KIMCO REALTY CORPORATION AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, continued During August 2000, the Company completed a primary public stock offering of 2,700,000 shares of common stock priced at $28.33 per share. The net proceeds from this sale of common stock, totaling approximately $72.4 million (after related transaction costs of $4.1 million) were used for general corporate purposes, including (i) the investment of additional equity capital in KIR (see Note 3), and (ii) the development, redevelopment and expansion of properties in the Company's portfolio. At December 31, 2001, the Company had outstanding 3,000,000 Depositary Shares (the "Class A Depositary Shares"), each such Class A Depositary Share representing a one-tenth fractional interest of a share of the Company's 7-3/4% Class A Cumulative Redeemable Preferred Stock, par value $1.00 per share (the "Class A Preferred Stock"), 2,000,000 Depositary Shares (the "Class B Depositary Shares"), each such Class B Depositary Share representing a one-tenth fractional interest of a share of the Company's 8-1/2% Class B Cumulative Redeemable Preferred Stock, par value $1.00 per share (the "Class B Preferred Stock"), 4,000,000 Depositary Shares ("the Class C Depositary Shares"), each such Class C Depositary Share representing a one-tenth fractional interest of a share of the Company's 8-3/8% Class C Cumulative Redeemable Preferred Stock, par value $1.00 per share (the "Class C Preferred Stock"), 923,900 Depositary Shares (the "Class D Depositary Shares"), each such Class D Depositary Share representing a one-tenth fractional interest of a share of the Company's 7-1/2% Cumulative Convertible Preferred Stock, par value $1.00 per share. Dividends on the Class A Depositary Shares are cumulative and payable quarterly in arrears at the rate of 7-3/4% per annum based on the $25.00 per share initial offering price, or $1.9375 per depositary share. The Class A Depositary Shares are redeemable, in whole or in part, for cash on or after September 23, 1998 at the option of the Company, at a redemption price of $25 per depositary share, plus any accrued and unpaid dividends thereon. The Class A Depositary Shares are not convertible or exchangeable for any other property or securities of the Company. The Class A Preferred Stock (represented by the Class A Depositary Shares outstanding) ranks pari passu with the Company's Class B Preferred Stock, Class C Preferred Stock and Class D Preferred Stock as to voting rights, priority for receiving dividends and liquidation preferences as set forth below. Dividends on the Class B Depositary Shares are cumulative and payable quarterly in arrears at the rate of 8-1/2% per annum based on the $25.00 per share initial offering price, or $2.125 per depositary share. The Class B Depositary Shares are redeemable, in whole or in part, for cash on or after July 15, 2000 at the option of the Company at a redemption price of $25.00 per depositary share, plus any accrued and unpaid dividends thereon. The redemption price of the Class B Preferred Stock may be paid solely from the sale proceeds of other capital stock of the Company, which may include other classes or series of preferred stock. The Class B Depositary Shares are not convertible or exchangeable for any other property or securities of the Company. The Class B Preferred Stock (represented by the Class B Depositary Shares outstanding) ranks pari passu with the Company's Class A Preferred Stock, Class C Preferred Stock and Class D Preferred Stock as to voting rights, priority for receiving dividends and liquidation preferences as set forth below. Dividends on the Class C Depositary Shares are cumulative and payable quarterly in arrears at the rate of 8-3/8% per annum based on the $25.00 per share initial offering price, or $2.0938 per depositary share. The Class C Depositary Shares are redeemable, in whole or in part, for cash on or after April 15, 2001 at the option of the Company at a redemption price of $25.00 per depositary share, plus any accrued and unpaid dividends thereon. The redemption price of the Class C Preferred Stock may be paid solely from the sale proceeds of other capital stock of the Company, which may include other classes or series of preferred stock. The Class C Depositary Shares are not convertible or exchangeable for any other property or securities of the Company. The Class C Preferred Stock (represented by the Class C Depositary Shares outstanding) ranks pari passu with the Company's Class A Preferred Stock, Class B Preferred Stock and Class D Preferred Stock as to voting rights, priority for receiving dividends and liquidation preferences as set forth below. Dividends on the Class D Depositary Shares are cumulative and payable at the rate per depositary share equal to the greater of (i) 7-1/2% per annum based upon a $25.00 per share initial value or $1.875 per share or (ii) the cash dividend on the shares of the Company's common stock into which a Class D Depositary Share is convertible plus $0.0183 per quarter. The Class D Depositary Shares are convertible into the Company's common stock at a conversion price of $26.83 per share of common stock at any time by the holder and may be redeemed by the Company at the conversion price in shares of the Company's common stock at any time after June 19, 2001 if, for any 20 trading days within any period of 30 consecutive trading days, including the last day of such period, the average closing price per share of the Company's common stock exceeds 120% of the conversion price or $32.20 per share, subject to certain adjustments. As stated above, during November 2001 the Company gave notice to the holders of the Class D Depositary Shares that the Company would be mandatorily redeeming the Class D Depositary Shares for common stock as a result of the common stock trading above $32.20 for 20 trading days within a 30 day period. The mandatory redemption date was January 3, 2002. 64 KIMCO REALTY CORPORATION AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, continued The Class D Preferred Stock (represented by the Class D Depositary Shares outstanding) ranks pari passu with the Company's Class A Preferred Stock, Class B Preferred Stock and Class C Preferred Stock as to voting rights, priority for receiving dividends and liquidation preferences as set forth below. Voting Rights - As to any matter on which the Class A Preferred Stock, Class B Preferred Stock, Class C Preferred Stock and Class D Preferred Stock (collectively, the "Preferred Stock") may vote, including any action by written consent, each share of Preferred Stock shall be entitled to 10 votes, each of which 10 votes may be directed separately by the holder thereof. With respect to each share of Preferred Stock, the holder thereof may designate up to 10 proxies, with each such proxy having the right to vote a whole number of votes (totaling 10 votes per share of Preferred Stock). As a result, each Class A, each Class B, each Class C and each Class D Depositary Share is entitled to one vote. Liquidation Rights - In the event of any liquidation, dissolution or winding up of the affairs of the Company, the Preferred Stock holders are entitled to be paid, out of the assets of the Company legally available for distribution to its stockholders, a liquidation preference of $250.00 per share ($25.00 per Class A, Class B, Class C and Class D Depositary Share, respectively), plus an amount equal to any accrued and unpaid dividends to the date of payment, before any distribution of assets is made to holders of the Company's common stock or any other capital stock that ranks junior to the Preferred Stock as to liquidation rights. 13. Dispositions of Real Estate: During 2001, the Company, in separate transactions, disposed of three operating properties (including the sale of a property to KIR) and a portion of another operating property, comprising approximately 0.6 million square feet of GLA. Cash proceeds from these dispositions aggregated approximately $46.7 million which resulted in a net gain of approximately $3.0 million. Cash proceeds from the disposition of the operating property in Elyria, OH, totaling $5.8 million, together with an additional $7.1 million cash investment, was used to acquire an exchange shopping center property located in Lakeland, FL during August 2001. During 2001, KDI sold two of its recently completed projects and five out-parcels for approximately $61.3 million, which resulted in net gains of approximately $8.1 million after provision for income taxes. The pre-tax profits of $13.4 million are included in the Consolidated Statements of Income in the caption Gain on sale of development properties. During the year ended December 31, 2000, the Company, in separate transactions, disposed of ten shopping center properties. Sale prices from two of these dispositions aggregated approximately $4.5 million which approximated their aggregate net book value. Sale prices from eight of these dispositions aggregated approximately $29.7 million which resulted in net gains of approximately $4.0 million. In addition, during 2000, the Company disposed of various land parcels, in separate transactions, for aggregate proceeds of approximately $5.6 million. 65 KIMCO REALTY CORPORATION AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, continued 14. Transactions with Related Parties: The Company provides management services for shopping centers owned principally by affiliated entities and various real estate joint ventures in which certain stockholders of the Company have economic interests. Such services are performed pursuant to management agreements which provide for fees based upon a percentage of gross revenues from the properties and other direct costs incurred in connection with management of the centers. The Consolidated Statements of Income include management fee income from KC Holdings of approximately $30,000, $100,000 and $400,000 for the years ended December 31, 2001, 2000 and 1999, respectively. In November 1991 the Company was granted Acquisition Options to reacquire the real estate assets owned by KC Holdings' subsidiaries. The remaining Acquisition Options expired in November 2001 with regard to the real estate assets which the Company had not reacquired. In March 2001, the Company exercised its option to acquire a 50% interest in a joint venture from KC Holdings. The joint venture consists of three shopping center properties located in Buffalo, NY. This joint venture interest was acquired for an aggregate option price of approximately $3.5 million, paid approximately $2.7 million in cash and $0.8 million in shares of the Company's common stock (29,638 shares valued at $27.67 per share). In June 2000, the Company exercised its option to acquire two shopping center properties from KC Holdings. The properties were acquired for an aggregate option price of approximately $12.2 million, paid approximately $11.6 million in shares of the Company's common stock (valued at $27.18 per share at June 1, 2000) and $0.6 million through the assumption of mortgage debt encumbering one of the properties. Reference is made to Notes 3, 4, 9 and 12 for additional information regarding transactions with related parties. 15. Commitments and Contingencies: The Company and its subsidiaries are primarily engaged in the operation of shopping centers which are either owned or held under long-term leases which expire at various dates through 2087. The Company and its subsidiaries, in turn, lease premises in these centers to tenants pursuant to lease agreements which provide for terms ranging generally from 5 to 25 years and for annual minimum rentals plus incremental rents based on operating expense levels and tenants' sales volumes. Annual minimum rentals plus incremental rents based on operating expense levels comprised approximately 99%, 99% and 98% of total revenues from rental property for each of the three years ended December 31, 2001, 2000 and 1999, respectively. The future minimum revenues from rental property under the terms of all noncancellable tenant leases, assuming no new or renegotiated leases are executed for such premises, for future years are approximately as follows (in millions): 2002, $323.3; 2003, $297.5; 2004, $273.7; 2005, $247.4; 2006, $218.3 and thereafter, $1,564.8. Minimum rental payments under the terms of all noncancellable operating leases pertaining to its shopping center portfolio for future years are approximately as follows (in millions): 2002, $13.4; 2003, $12.6; 2004, $12.0; 2005, $10.8; 2006, $10.1 and thereafter, $136.3. The Company has issued letters of credit in connection with the collateralization of tax-exempt mortgage bonds, completion guarantees for certain construction projects, and guaranty of payment related to the acquisition of a development project. These letters of credit aggregate approximately $30.5 million. 16. Incentive Plans: The Company maintains a stock option plan (the "Plan") pursuant to which a maximum 13,500,000 shares of the Company's common stock may be issued for qualified and non-qualified options. Options granted under the Plan generally vest ratably over a three-year term, expire ten years from the date of grant and are exercisable at the market price on the date of grant, unless otherwise determined by the Board in its sole discretion. In addition, the Plan provides for the granting of certain options to each of the Company's non-employee directors (the "Independent Directors") and permits such Independent Directors to elect to receive deferred stock awards in lieu of directors' fees. 66 KIMCO REALTY CORPORATION AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, continued Information with respect to stock options under the Plan for the years ended December 31, 2001, 2000 and 1999 is as follows:

Weighted Average Exercise Price Shares Per Share ------ --------- Options outstanding, December 31, 1998 4,151,734 $ 20.02 Exercised (481,171) $ 18.36 Granted 1,198,575 $ 21.55 --------- Options outstanding, December 31, 1999 4,869,138 $ 20.56 Exercised (290,106) $ 17.03 Granted 1,347,637 $ 27.09 Forfeited (387,874) $ 19.07 --------- Options outstanding, December 31, 2000 5,538,795 $ 22.44 Exercised (1,694,227) $ 20.62 Granted 2,119,175 $ 30.71 Forfeited (54,390) $ 25.76 --------- Options outstanding, December 31, 2001 5,909,353 $ 25.90 ========= Options exercisable - December 31, 1999 2,408,829 $ 18.16 ========= ======== December 31, 2000 2,921,737 $ 20.13 ========= ======== December 31, 2001 2,369,288 $ 21.98 ========= ========

The exercise prices for options outstanding as of December 31, 2001 range from $12.39 to $33.67 per share. The weighted average remaining contractual life for options outstanding as of December 31, 2001 was approximately 8.1 years. Options to purchase 3,293,846, 913,042 and 2,260,680 shares of the Company's common stock were available for issuance under the Plan at December 31, 2001, 2000 and 1999, respectively. The Company has elected to adopt the disclosure-only provisions of Statement of Financial Accounting Standards No. 123 "Accounting for Stock-Based Compensation". Accordingly, no compensation cost has been recognized with regard to options granted under the Plan in the accompanying Consolidated Statements of Income. If stock-based compensation costs had been recognized based on the estimated fair values at the dates of grant for options awarded during 2001, 2000 and 1999 net income and net income per diluted common share for these calendar years would have been reduced by approximately $2.7 million or $0.03 per diluted share, $2.2 million or $0.02 per diluted share and $1.7 million or $0.02 per diluted share, respectively. These pro forma adjustments to net income and net income per diluted common share assume fair values of each option grant estimated using the Black-Scholes option pricing formula. The more significant assumptions underlying the determination of such fair values for options granted during 2001, 2000 and 1999 include: (i) weighted average risk-free interest rates of 4.85%, 5.69% and 6.30%, respectively; (ii) weighted average expected option lives of 5.5 years, 4.4 years and 5.4 years, respectively; (iii) an expected volatility of 15.76%, 15.82% and 15.91%, respectively, and (iv) an expected dividend yield of 6.74%, 6.95% and 7.30%, respectively. The per share weighted average fair value at the dates of grant for options awarded during 2001, 2000 and 1999 was $1.98, $2.05 and $1.69, respectively. The Company maintains a 401(k) retirement plan covering substantially all officers and employees which permits participants to defer up to a maximum 10% of their eligible compensation. This deferred compensation, together with Company matching contributions which generally equal employee deferrals up to a maximum of 5% of their eligible compensation, is fully vested and funded as of December 31, 2001. Company contributions to the plan were approximately $0.7 million, $0.6 million and $0.4 million for the years ended December 31, 2001, 2000 and 1999, respectively. 67 17. Income Taxes The Company elected to qualify as a REIT in accordance with Sections 856 through 860 of the Internal Revenue Code of 1986, as amended (the "Code") commencing with its taxable year which began January 1, 1992. To qualify as a REIT, the Company must meet a number of organizational and operational requirements, including a requirement that it currently distribute at least 90% of its adjusted REIT taxable income to its stockholders. It is management's intention to adhere to these requirements and maintain the Company's REIT status. As a REIT, the Company generally will not be subject to corporate federal income tax, provided that distributions to its stockholders equal at least the amount of its REIT taxable income as defined under the Code. If the Company fails to qualify as a REIT in any taxable year, it will be subject to federal income taxes at regular corporate rates (including any applicable alternative minimum tax) and may not be able to qualify as a REIT for four subsequent taxable years. Even if the Company qualifies for taxation as a REIT, the Company is subject to certain state and local taxes on its income and property, and to federal income and excise taxes on its undistributed taxable income. In addition, taxable income from non-REIT activities managed through taxable REIT subsidiaries is subject to federal, state and local income taxes. Reconciliation between GAAP Net Income and Federal Taxable Income: The following table reconciles GAAP net income to taxable income for the years ended December 31, 2001, 2000 and 1999 (in thousands):

2001 (Estimated) 2000 (Actual) 1999 (Actual) ---------------- ------------- ------------- GAAP net income $ 236,538 $ 205,025 $ 176,778 Less: GAAP net income of taxable REIT subsidiaries (29,063) -- -- --------- --------- --------- GAAP net income from REIT operations (Note 1) 207,475 205,025 176,778 Net book depreciation in excess of tax depreciation 3,532 2,889 1,088 Deferred and prepaid rents (6,800) (7,117) (5,165) Exercise of non-qualified stock options (10,500) (2,534) (1,500) Book/tax depreciation difference from investments In real estate joint ventures (2,286) (2,253) (298) Other book/tax differences, net (9,340) (14,240) (13,459) --------- --------- --------- Adjusted taxable income subject to 90% dividend requirements $ 182,081 $ 181,770 $ 157,444 ========= ========= =========

Note 1- All adjustments to "GAAP net income from REIT operations" are net of amounts attributable to minority interest and taxable REIT subsidiaries. Reconciliation between Cash Dividends Paid and Dividends Paid Deductions: Cash dividends paid were equal to the dividends paid deduction for the years ended December 31, 2001, 2000 and 1999, and amounted to (in thousands) $209,785, $189,896 and $169,708, respectively. Characterization of Distributions: The following characterizes distributions paid for the years ended December 31, 2001, 2000 and 1999 (in thousands):

2001 2000 1999 ---- ---- ---- Preferred Dividends Ordinary income $ 26,253 100% $ 26,376 100% $ 26,481 100% -------- -------- -------- -------- -------- -------- Common Dividends Ordinary income $174,380 95% $163,520 100% $143,227 100% Return of capital 9,152 5% -- -- -- -- -------- -------- -------- -------- -------- -------- $183,532 100% $163,520 100% $143,227 100% -------- -------- -------- -------- -------- -------- Total dividends distributed $209,785 $189,896 $169,708 ======== ======== ========

68 Taxable REIT Subsidiaries ("TRS"): Commencing January 1, 2001, the Company is subject to federal, state and local income taxes on the income from it TRS activities. Income taxes have been provided for on the asset and liability method as required by Statement of Financial Accounting Standard No. 109, Accounting for Income Taxes. Under the asset and liability method, deferred income taxes are recognized for the temporary differences between the financial reporting basis and the tax basis of the TRS assets and liabilities. The Company's TRS income and provision for income taxes for the year ended December 31, 2001, is summarized as follows (in thousands): Income from TRS before income taxes $48,439 Less provision for income taxes: Federal 15,682 State and local 3,694 ------- Total tax provision 19,376 ------- TRS net income $29,063 ======= There was no provision for income taxes for the years ended December 31, 2000 and 1999. Deferred tax assets of approximately $4.4 million, which are included in the caption Other assets on the accompanying Consolidated Balance Sheet at December 31, 2001, relate primarily to differences in the timing of the recognition of income from real estate joint ventures between the GAAP and the tax basis of accounting. The income tax provision differs from the amount computed by applying the statutory federal income tax rate to TRS income before income taxes as follows (in thousands):

Amount Rate ------ ---- Federal income tax provision at statutory rate $16,954 35% State income tax provision, net of federal income tax effect 2,422 5% ------- ---- TRS provision for income taxes $19,376 40% ======= ====

18. Supplemental Financial Information: The following represents the results of operations, expressed in thousands except per share amounts, for each quarter during years 2001 and 2000:

2001 (Unaudited) ----------------------------------------------------- Mar. 31 June 30 Sept. 30 Dec. 31 ----------- ----------- ----------- ----------- Revenues from rental property $ 121,601 $ 117,867 $ 114,295 $ 114,853 Net income $ 56,053 $ 59,352 $ 59,250 $ 61,882 Net income per common share: Basic $ .52 $ .55 $ .55 $ .58 Diluted $ .51 $ .55 $ .54 $ .56

2000 (Unaudited) ----------------------------------------------------- Mar. 31 June 30 Sept. 30 Dec. 31 ----------- ----------- ----------- ----------- Revenues from rental property $ 112,356 $ 114,867 $ 115,726 $ 116,458 Net income $ 48,709 $ 50,946 $ 51,512 $ 53,858 Net income per common share: Basic $ .46 $ .49 $ .48 $ .50 Diluted $ .46 $ .48 $ .47 $ .49

69 Accounts and notes receivable in the accompanying Consolidated Balance Sheets are net of estimated unrecoverable amounts of approximately $4.3 million and $4.0 million at December 31, 2001 and 2000, respectively. 19. Pro Forma Financial Information (Unaudited): As discussed in Notes 2 and 13, the Company and certain of its subsidiaries acquired and disposed of interests in certain operating properties during 2001. The pro forma financial information set forth below is based upon the Company's historical Consolidated Statements of Income for the years ended December 31, 2001 and 2000, adjusted to give effect to these transactions as of January 1, 2000. The pro forma financial information is presented for informational purposes only and may not be indicative of what actual results of operations would have been had the transactions occurred on January 1, 2000, nor does it purport to represent the results of operations for future periods. (Amounts presented in millions, except per share figures.) Years ended December 31, 2001 2000 -------- -------- Revenues from rental property $ 467.3 $ 457.4 Net income $ 234.5 $ 206.4 Net income per common share: Basic $ 2.18 $ 1.94 ======== ======== Diluted $ 2.14 $ 1.92 ======== ======== 20. Subsequent Events: On January 22, 2002, Kmart Corporation ("Kmart") filed for protection under Chapter 11 of the U.S. Bankruptcy Code. As of the filing date, Kmart occupied 69 locations (excluding the KIR Portfolio which includes six Kmart locations), representing 12.6% of the Company's annualized base rental revenues and 13.3% of the Company's total shopping center GLA. As of February 1, 2002, Kmart rejected its lease at 15 locations. These 15 locations represent approximately $16.3 million of annualized base rental revenues comprising approximately 1.6 million square feet of GLA. The average rent per square foot for these locations was approximately $10.43. As adjusted for these 15 rejected leases Kmart now represents 8.7% of annualized base rents and 10.4% of leased GLA. The Company is actively marketing these locations to prospective tenants, however, no assurances can be provided that these locations will be leased in the near term or at comparable rents previously paid by Kmart. The Company generally will have the right to file claims in connection with these rejected leases for lost rent equal to three years of rental obligations as well as other amounts related to obligations under the leases. Actual amounts to be received in satisfaction of these claims will be subject to Kmart's final plan of reorganization and the availability of funds to pay creditors such as the Company. On March 8, 2002, Kmart announced it would be closing an additional 284 locations of which 17 of these locations are leased from the Company. The Company had previously encumbered seven of these properties with individual non-recourse mortgage loans. The annualized base rental revenues from these 17 locations is approximately $15.1 million. The annualized interest expenses for the seven encumbered properties is approximately $5.6 million. As of the date of this filing of this annual report on Form 10-K, the Company has not been notified directly by Kmart as to the timing of these store closings or whether the leases will be assigned or rejected. Until such time as the leases are rejected in accordance with the bankruptcy proceedings, Kmart remains obligated for payments of rent and operating expenses at these locations and all other remaining locations. 70 KIMCO REALTY CORPORATION AND SUBSIDIARIES VALUATION AND QUALIFYING ACCOUNTS For Years Ended December 31, 2001, 2000 and 1999 (in thousands)

Balance at Adjustments to Beginning of Charged to valuation Balance at end Period expenses accounts Deductions of period --------- --------- --------- --------- --------- Year Ended December 31, 2001 Allowance for uncollectable accounts $ 4,000 $ 3,400 $ -- ($ 3,100) $ 4,300 --------- --------- --------- --------- --------- Year Ended December 31, 2000 Allowance for uncollectable accounts $ 3,750 $ 2,650 $ -- ($ 2,400) $ 4,000 --------- --------- --------- --------- --------- Year Ended December 31, 1999 Allowance for uncollectable accounts $ 3,150 $ 3,650 $ 350 ($ 3,400) $ 3,750 --------- --------- --------- --------- ---------

71 KIMCO REALTY CORPORATION AND SUBSIDIARIES REAL ESTATE AND ACCUMULATED DEPRECIATION DECEMBER 31, 2001 SCHEDULE III

INITIAL COST BUILDING AND SUBSEQUENT BUILDINGS AND PROPERTIES LAND IMPROVEMENT TO ACQUISITION LAND IMPROVEMENTS ---------- ---- ----------- -------------- ---- ------------ FAIRFIELD SHOPPING CENTER 529,247 2,137,493 -- 529,247 2,137,493 HOOVER 279,106 7,735,873 -- 279,106 7,735,873 FOUR PEAKS PLAZA 3,150,780 -- 3,068,042 3,150,780 3,068,042 GILBERT FIESTA DEVELOPMENT 1,683,843 -- 232,322 1,683,843 232,322 KIMCO MESA 679, INC. AZ 2,915,000 11,686,291 491,726 2,915,000 12,178,017 METRO SQUARE 4,101,017 16,410,632 452,006 4,101,017 16,862,638 PEORIA CROSSING 7,212,588 -- 7,633,923 7,235,425 7,611,086 HAYDEN PLAZA NORTH 2,015,726 4,126,509 4,983,587 2,015,726 9,110,096 PHOENIX, COSTCO 5,324,501 21,269,943 191,056 5,324,501 21,460,999 PHOENIX 2,450,341 9,802,046 151,421 2,450,341 9,953,467 ALHAMBRA, COSTCO 4,995,639 19,982,557 -- 4,995,639 19,982,557 MADISON PLAZA 5,874,396 23,476,190 16,333 5,874,396 23,492,523 CHULA VISTA, COSTCO 6,460,743 25,863,153 1,433,357 6,460,743 27,296,510 CORONA HILLS, COSTCO 13,360,965 53,373,453 371,431 13,360,965 53,744,884 LA MIRADA THEATRE CENTER 8,816,741 35,259,965 5,800 8,816,741 35,265,765 THE CENTRE 3,403,724 13,625,899 -- 3,403,724 13,625,899 SANTA ANA, HOME DEPOT 4,592,364 18,345,257 -- 4,592,364 18,345,257 SANTEE TOWN CENTER 2,252,812 9,012,256 766,545 2,252,812 9,778,801 VILLAGE ON THE PARK 2,194,463 8,885,987 37,886 2,194,463 8,923,873 AURORA QUINCY 1,148,317 4,608,249 152,756 1,148,317 4,761,005 AURORA EAST BANK 1,500,568 6,180,103 107,219 1,500,568 6,287,322 SPRING CREEK COLORADO 1,423,260 5,718,813 11,939 1,423,260 5,730,752 DENVER WEST 38TH STREET 161,167 646,983 -- 161,167 646,983 ENGLEWOOD PHAR MOR 805,837 3,232,650 2,800 805,837 3,235,450 FORT COLLINS 1,253,497 7,625,278 -- 1,253,497 7,625,278 HERITAGE WEST 1,526,576 6,124,074 79,252 1,526,576 6,203,326 WEST FARM SHOPPING CENTER 5,805,969 23,348,024 103,992 5,805,969 23,452,016 N.HAVEN, HOME DEPOT 7,704,968 30,797,640 67,243 7,704,968 30,864,883 WATERBURY 2,253,078 9,017,012 99,451 2,253,078 9,116,463 ELSMERE -- 3,185,642 -- -- 3,185,642 ALTAMONTE SPRINGS 770,893 3,083,574 101,538 770,893 3,185,112 BOCA RATON 573,875 2,295,501 1,006,306 573,875 3,301,807 BRADENTON 125,000 299,253 307,621 125,000 606,874 BAYSHORE GARDENS, BRADENTON FL 2,901,000 11,738,955 299,359 2,901,000 12,038,314 CORAL SPRINGS 710,000 2,842,907 3,179,985 710,000 6,022,892 CORAL SPRINGS 1,649,000 6,626,301 82,557 1,649,000 6,708,858 EAST ORLANDO 491,676 1,440,000 2,784,544 1,007,882 3,708,338 FERN PARK 225,000 902,000 2,398,540 225,000 3,300,540 REGENCY PLAZA 2,410,000 9,671,160 138,749 2,410,000 9,809,909 KISSIMMEE 1,328,536 5,296,652 1,636,405 1,328,536 6,933,057 LAUDERDALE LAKES 342,420 2,416,645 2,542,282 342,420 4,958,927 MERCHANTS WALK 2,580,816 10,366,090 -- 2,580,816 10,366,090 LARGO 293,686 792,119 1,131,046 293,686 1,923,165 LEESBURG -- 171,636 173,537 -- 345,173 LARGO EAST BAY 2,832,296 11,329,185 971,043 2,832,296 12,300,228 LAUDERHILL 1,002,733 2,602,415 9,320,345 1,774,443 11,151,050 MELBOURNE -- 1,754,000 2,727,009 -- 4,481,009 GROVE GATE 365,893 1,049,172 1,139,954 365,893 2,189,126 NORTH MIAMI 732,914 4,080,460 10,519,289 732,914 14,599,749 MILLER ROAD 1,138,082 4,552,327 1,395,207 1,138,082 5,947,534 MARGATE 2,948,530 11,754,120 2,162,759 2,948,530 13,916,879 MELBOURNE 715,844 2,878,374 413,894 715,844 3,292,268 MT. DORA 1,011,000 4,062,890 56,981 1,011,000 4,119,871 ORLANDO 923,956 3,646,904 1,752,816 1,172,119 5,151,557 RENAISSANCE CENTER 9,104,379 36,540,873 2,229,331 9,104,379 38,770,204 SAND LAKE 3,092,706 12,370,824 1,032,308 3,092,706 13,403,132 ORLANDO 560,800 2,268,112 2,016,420 580,030 4,265,302 OCALA 1,980,000 7,927,484 625,242 1,980,000 8,552,726 POMPANO BEACH 97,169 874,442 1,209,339 97,169 2,083,781 PALATKA 130,844 556,658 980,330 130,844 1,536,988 ST. PETERSBURG -- 917,360 756,546 -- 1,673,906

TOTAL COST, DATE OF ACCUMULATED NET OF ACCUMULATED CONSTRUCTION(C) PROPERTIES TOTAL DEPRECIATION DEPRECIATION ENCUMBRANCES ACQUISITION(A) ---------- ----- ------------ ------------ ------------ -------------- FAIRFIELD SHOPPING CENTER 2,666,740 82,058 2,584,682 -- 2000(A) HOOVER 8,014,979 396,885 7,618,094 -- 1999(A) FOUR PEAKS PLAZA 6,218,822 -- 6,218,822 -- 2001(C) GILBERT FIESTA DEVELOPMENT 1,916,165 -- 1,916,165 -- 2001(C) KIMCO MESA 679, INC. AZ 15,093,017 1,138,610 13,954,407 -- 1998(A) METRO SQUARE 20,963,655 1,484,385 19,479,269 -- 1998(A) PEORIA CROSSING 14,846,511 -- 14,846,511 -- 2000(C) HAYDEN PLAZA NORTH 11,125,822 424,910 10,700,912 -- 1998(A) PHOENIX, COSTCO 26,785,500 1,920,315 24,865,185 -- 1998(A) PHOENIX 12,403,808 1,053,660 11,350,148 7,732,023 1997(A) ALHAMBRA, COSTCO 24,978,196 1,807,010 23,171,186 -- 1998(A) MADISON PLAZA 29,366,919 2,110,991 27,255,928 -- 1998(A) CHULA VISTA, COSTCO 33,757,253 2,371,147 31,386,106 -- 1998(A) CORONA HILLS, COSTCO 67,105,849 4,791,735 62,314,114 -- 1998(A) LA MIRADA THEATRE CENTER 44,082,506 3,168,142 40,914,364 -- 1998(A) THE CENTRE 17,029,623 742,124 16,287,499 8,047,253 1999(A) SANTA ANA, HOME DEPOT 22,937,621 1,639,530 21,298,091 -- 1998(A) SANTEE TOWN CENTER 12,031,613 707,178 11,324,435 -- 1998(A) VILLAGE ON THE PARK 11,118,336 890,499 10,227,838 -- 1998(A) AURORA QUINCY 5,909,322 468,187 5,441,135 2,581,006 1998(A) AURORA EAST BANK 7,787,890 621,262 7,166,628 -- 1998(A) SPRING CREEK COLORADO 7,154,012 574,358 6,579,654 -- 1998(A) DENVER WEST 38TH STREET 808,150 64,953 743,197 -- 1998(A) ENGLEWOOD PHAR MOR 4,041,287 324,618 3,716,669 1,250,128 1998(A) FORT COLLINS 8,878,775 358,453 8,520,321 3,050,568 2000(A) HERITAGE WEST 7,729,902 619,032 7,110,870 -- 1998(A) WEST FARM SHOPPING CENTER 29,257,985 2,046,675 27,211,310 13,660,727 1998(A) N.HAVEN, HOME DEPOT 38,569,851 2,747,054 35,822,797 -- 1998(A) WATERBURY 11,369,541 1,899,581 9,469,960 -- 1993(A) ELSMERE 3,185,642 2,508,620 677,022 -- 1979(C) ALTAMONTE SPRINGS 3,956,005 474,396 3,481,609 -- 1995(A) BOCA RATON 3,875,682 812,768 3,062,914 -- 1992(A) BRADENTON 731,874 351,715 380,158 -- 1968(C) BAYSHORE GARDENS, BRADENTON FL 14,939,314 1,082,663 13,856,651 -- 1998(A) CORAL SPRINGS 6,732,892 833,812 5,899,080 -- 1994(A) CORAL SPRINGS 8,357,858 696,073 7,661,784 -- 1997(A) EAST ORLANDO 4,716,220 1,846,595 2,869,626 -- 1971(C) FERN PARK 3,525,540 1,412,667 2,112,873 -- 1968(C) REGENCY PLAZA 12,219,909 502,412 11,717,497 8,874,596 1999(A) KISSIMMEE 8,261,593 947,789 7,313,803 -- 1996(A) LAUDERDALE LAKES 5,301,347 3,348,170 1,953,177 -- 1968(C) MERCHANTS WALK 12,946,906 88,524 12,858,382 2001(A) LARGO 2,216,851 1,486,727 730,123 -- 1968(C) LEESBURG 345,173 202,746 142,426 -- 1969(C) LARGO EAST BAY 15,132,524 3,320,204 11,812,320 -- 1992(A) LAUDERHILL 12,925,493 4,829,331 8,096,162 -- 1974(C) MELBOURNE 4,481,009 1,538,116 2,942,893 -- 1968(C) GROVE GATE 2,555,019 1,403,456 1,151,563 -- 1968(C) NORTH MIAMI 15,332,663 4,292,933 11,039,730 -- 1985(A) MILLER ROAD 7,085,616 3,852,902 3,232,713 -- 1986(A) MARGATE 16,865,409 2,671,653 14,193,757 -- 1993(A) MELBOURNE 4,008,112 606,833 3,401,278 -- 1994(A) MT. DORA 5,130,871 425,978 4,704,893 -- 1997(A) ORLANDO 6,323,676 910,915 5,412,761 -- 1995(A) RENAISSANCE CENTER 47,874,583 3,952,316 43,922,267 -- 1998(A) SAND LAKE 16,495,838 2,534,973 13,960,865 -- 1994(A) ORLANDO 4,845,332 477,022 4,368,310 -- 1996(A) OCALA 10,532,726 973,493 9,559,233 -- 1997(A) POMPANO BEACH 2,180,950 1,035,624 1,145,326 -- 1968(C) PALATKA 1,667,832 626,850 1,040,981 -- 1970(C) ST. PETERSBURG 1,673,906 630,590 1,043,317 -- 1968(C)

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INITIAL COST BUILDING AND SUBSEQUENT BUILDINGS AND PROPERTIES LAND IMPROVEMENT TO ACQUISITION LAND IMPROVEMENTS ---------- ---- ----------- -------------- ---- ------------ TUTTLE BEE SARASOTA 254,961 828,465 1,678,432 254,961 2,506,897 SOUTH EAST SARASOTA 1,283,400 5,133,544 3,076,330 1,440,264 8,053,010 SANFORD 1,832,732 9,523,261 3,333,286 1,832,732 12,856,547 STUART 2,109,677 8,415,323 386,277 2,109,677 8,801,600 SOUTH MIAMI 1,280,440 5,133,825 2,417,451 1,280,440 7,551,276 TAMPA, FLORIDA 3,054,280 -- 2,661,659 3,054,280 2,661,659 TALLAHASSEE -- 2,431,659 15,846,855 -- 18,278,514 TAMPA 2,820,000 11,283,189 868,221 2,820,000 12,151,410 VILLAGE COMMONS S.C 2,192,331 8,774,158 384,702 2,192,331 9,158,860 WEST PALM BEACH 550,896 2,298,964 463,847 550,896 2,762,811 THE SHOPS AT WEST MELBOURNE 2,200,000 8,829,541 88,597 2,200,000 8,918,138 JONESBORO RD. &I-285 468,118 1,872,473 53,114 468,118 1,925,587 AUGUSTA 1,482,564 5,928,122 98,790 1,482,564 6,026,912 MACON 262,700 1,487,860 1,562,098 349,326 2,963,332 SAVANNAH 2,052,270 8,232,978 369,989 2,052,270 8,602,967 SAVANNAH 652,255 2,616,522 216,787 652,255 2,833,309 CLIVE 500,525 2,002,101 -- 500,525 2,002,101 SOUTHDALE SHOPPING CENTER 1,720,330 6,916,294 776,528 1,720,330 7,692,821 DES MOINES 500,525 2,559,019 37,079 500,525 2,596,098 DUBUQUE -- 2,152,476 -- -- 2,152,476 WATERLOO 500,525 2,002,101 -- 500,525 2,002,101 ADDISON -- 753,343 1,164,548 -- 1,917,891 ALTON, BELTLINE HWY 329,532 1,987,981 59,934 329,532 2,047,915 AURORA, N. LAKE 2,059,908 9,531,721 -- 2,059,908 9,531,721 KRC ARLINGTON HEIGHT 1,983,517 9,178,272 -- 1,983,517 9,178,272 ADDISON, IL 2,837,548 13,128,480 18,000 2,837,548 13,146,480 BLOOMINGTON 805,521 2,222,353 3,992,756 805,521 6,215,109 BELLEVILLE, WESTFIELD PLAZA -- 5,372,253 -- -- 5,372,253 BRADLEY 500,422 2,001,687 -- 500,422 2,001,687 KRC BRIDGEVIEW -- -- 491,565 -- 491,565 CALUMET CITY 1,479,217 8,815,760 21,730 1,479,217 8,837,490 CHICAGO, S. PULASKI RD 1,611,612 8,252,282 24,437 1,614,319 8,274,012 COUNTRYSIDE -- 4,770,671 35,625 -- 4,806,296 CARBONDALE -- 500,000 -- -- 500,000 CHICAGO 2,577,473 3,716,745 79,335 2,577,473 3,796,080 CHICAGO -- 2,687,046 48,916 -- 2,735,962 JOLIET -- -- 127,463 -- 127,463 CHAMPAIGN, NEIL ST 230,519 1,285,460 49,327 230,519 1,334,787 ELSTON 1,010,375 5,692,211 -- 1,010,375 5,692,211 S. CICERO -- 1,541,560 149,203 -- 1,690,763 CRYSTAL LAKE, NW HWY 179,964 1,025,811 120,240 180,269 1,145,746 KRC PETERSON AVE 2,215,960 10,253,981 -- 2,215,960 10,253,981 BUTTERFIELD SQUARE 1,601,960 6,637,926 214,847 1,601,960 6,852,773 DOWNERS PARK PLAZA 2,510,455 10,164,494 181,550 2,510,455 10,346,044 DOWNER GROVE 811,778 4,322,956 1,664,058 811,778 5,987,014 ELGIN 842,555 2,108,674 1,523,492 842,555 3,632,166 ELGIN, AIRPORT RD 2,728,647 12,624,998 -- 2,728,647 12,624,998 FOREST PARK -- 2,335,884 -- -- 2,335,884 FAIRVIEW HTS, BELLVILLE RD -- 11,866,880 114,973 -- 11,981,853 GENEVA 500,422 12,917,712 14,927 500,422 12,932,639 MATTERSON 950,515 6,292,319 21,585 950,515 6,313,904 MT. PROSPECT 1,017,345 6,572,176 1,217,808 1,017,345 7,789,984 MUNDELIEN, S. LAKE 1,127,720 5,826,129 1,914 1,129,634 5,826,129 NORRIDGE -- 2,918,315 -- -- 2,918,315 NAPERVILLE 669,483 4,464,998 -- 669,483 4,464,998 NILES -- 2,217,231 134,809 -- 2,352,040 OTTAWA 137,775 784,269 361,788 137,775 1,146,057 ORLAND SQUARE 1,601,960 6,425,253 -- 1,601,960 6,425,253 ORLAND PARK, S. HARLEM 476,972 2,764,775 890,354 476,972 3,655,129 OAK LAWN 1,530,111 8,776,631 100,280 1,530,111 8,876,911 OAKBROOK TERRACE 1,527,188 8,679,108 18,000 1,527,188 8,697,108 PEORIA -- 5,081,290 1,315,822 -- 6,397,112 PLAZA AT ROCKFORD, IL -- 83,158 -- -- 83,158 EAST WOODFIELD SQUARE 1,601,960 6,466,646 -- 1,601,960 6,466,646 SPRINGFIELD, MACARTHUR -- 131,091 -- -- 131,091 SKOKIE 2,276,360 9,488,382 2,628,440 9,136,302 KRC STREAMWOOD 181,962 1,057,740 181,885 181,962 1,239,625

TOTAL COST, DATE OF ACCUMULATED NET OF ACCUMULATED CONSTRUCTION(C) PROPERTIES TOTAL DEPRECIATION DEPRECIATION ENCUMBRANCES ACQUISITION(A) ---------- ----- ------------ ------------ ------------ -------------- TUTTLE BEE SARASOTA 2,761,858 1,464,492 1,297,366 -- 1970(C) SOUTH EAST SARASOTA 9,493,274 2,129,707 7,363,567 -- 1989(A) SANFORD 14,689,279 4,109,599 10,579,680 -- 1989(A) STUART 10,911,277 1,646,840 9,264,437 -- 1994(A) SOUTH MIAMI 8,831,716 1,084,286 7,747,430 -- 1995(A) TAMPA, FLORIDA 5,715,939 -- 5,715,939 2001(C) TALLAHASSEE 18,278,514 -- 18,278,514 -- 2000(C) TAMPA 14,971,410 1,443,163 13,528,247 -- 1997(A) VILLAGE COMMONS S.C 11,351,191 679,371 10,671,820 -- 1998(A) WEST PALM BEACH 3,313,707 378,303 2,935,404 -- 1995(A) THE SHOPS AT WEST MELBOURNE 11,118,138 872,624 10,245,514 -- 1998(A) JONESBORO RD. &I-285 2,393,705 732,483 1,661,222 -- 1988(A) AUGUSTA 7,509,476 923,211 6,586,265 -- 1995(A) MACON 3,312,658 1,303,952 2,008,706 -- 1969(C) SAVANNAH 10,655,237 1,809,385 8,845,852 -- 1993(A) SAVANNAH 3,485,564 434,568 3,050,995 -- 1995(A) CLIVE 2,502,626 303,738 2,198,888 -- 1996(A) SOUTHDALE SHOPPING CENTER 9,413,151 506,794 8,906,357 5,175,144 1999(A) DES MOINES 3,096,623 375,339 2,721,284 -- 1996(A) DUBUQUE 2,152,476 229,982 1,922,494 -- 1997(A) WATERLOO 2,502,626 303,738 2,198,888 -- 1996(A) ADDISON 1,917,891 1,170,455 747,436 -- 1968(C) ALTON, BELTLINE HWY 2,377,447 547,441 1,830,007 -- 1998(A) AURORA, N. LAKE 11,591,629 833,808 10,757,821 6,894,038 1998(A) KRC ARLINGTON HEIGHT 11,161,789 802,885 10,358,904 -- 1998(A) ADDISON, IL 15,984,028 1,148,493 14,835,535 -- 1998(A) BLOOMINGTON 7,020,630 3,078,253 3,942,376 -- 1972(C) BELLEVILLE, WESTFIELD PLAZA 5,372,253 470,513 4,901,740 -- 1998(A) BRADLEY 2,502,109 340,380 2,161,729 -- 1996(A) KRC BRIDGEVIEW 491,565 20,647 470,918 -- 1998(A) CALUMET CITY 10,316,707 875,161 9,441,546 15,607,757 1997(A) CHICAGO, S. PULASKI RD 9,888,331 718,352 9,169,979 11,526,931 1998(A) COUNTRYSIDE 4,806,296 478,240 4,328,056 -- 1997(A) CARBONDALE 500,000 38,461 461,539 -- 1997(A) CHICAGO 6,373,553 382,741 5,990,812 9,446,770 1997(A) CHICAGO 2,735,962 285,808 2,450,154 -- 1997(A) JOLIET 127,463 2,717 124,746 -- 1997(A) CHAMPAIGN, NEIL ST 1,565,306 95,185 1,470,121 -- 1998(A) ELSTON 6,702,586 498,353 6,204,233 -- 1997(A) S. CICERO 1,690,763 182,762 1,508,001 -- 1997(A) CRYSTAL LAKE, NW HWY 1,326,015 91,722 1,234,293 -- 1998(A) KRC PETERSON AVE 12,469,941 897,000 11,572,941 7,818,848 1998(A) BUTTERFIELD SQUARE 8,454,733 662,970 7,791,763 1998(A) DOWNERS PARK PLAZA 12,856,499 762,678 12,093,821 -- 1999(A) DOWNER GROVE 6,798,792 495,871 6,302,921 -- 1997(A) ELGIN 4,474,721 1,810,425 2,664,296 -- 1972(C) ELGIN, AIRPORT RD 15,353,645 1,104,443 14,249,202 -- 1998(A) FOREST PARK 2,335,884 254,333 2,081,551 -- 1997(A) FAIRVIEW HTS, BELLVILLE RD 11,981,853 1,043,232 10,938,621 -- 1998(A) GENEVA 13,433,061 1,258,024 12,175,037 9,715,214 1996(A) MATTERSON 7,264,419 606,197 6,658,222 -- 1997(A) MT. PROSPECT 8,807,329 673,977 8,133,352 -- 1997(A) MUNDELIEN, S. LAKE 6,955,763 509,188 6,446,575 -- 1998(A) NORRIDGE 2,918,315 312,023 2,606,292 -- 1997(A) NAPERVILLE 5,134,481 427,117 4,707,364 -- 1997(A) NILES 2,352,040 256,729 2,095,311 -- 1997(A) OTTAWA 1,283,832 932,346 351,485 -- 1970(C) ORLAND SQUARE 8,027,213 653,910 7,373,302 1998(A) ORLAND PARK, S. HARLEM 4,132,101 230,272 3,901,828 -- 1998(A) OAK LAWN 10,407,022 886,648 9,520,374 14,893,511 1997(A) OAKBROOK TERRACE 10,224,296 884,852 9,339,444 -- 1997(A) PEORIA 6,397,112 576,488 5,820,623 -- 1997(A) PLAZA AT ROCKFORD, IL 83,158 7,108 76,050 -- 1998(A) EAST WOODFIELD SQUARE 8,068,606 655,503 7,413,103 1998(A) SPRINGFIELD, MACARTHUR 131,091 11,153 119,938 -- 1998(A) SKOKIE 11,764,742 173,653 11,591,089 8,898,649 1997(A) KRC STREAMWOOD 1,421,587 86,472 1,335,115 -- 1998(A)

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INITIAL COST BUILDING AND SUBSEQUENT BUILDINGS AND PROPERTIES LAND IMPROVEMENT TO ACQUISITION LAND IMPROVEMENTS ---------- ---- ----------- -------------- ---- ------------ WOODGROVE FESTIVAL 5,049,149 20,822,993 1,346,380 5,049,149 22,169,373 WAUKEGAN, BELVIDERE 203,427 1,161,847 37,012 203,772 1,198,514 PLAZA EAST 1,236,149 4,944,597 2,236,960 1,236,149 7,181,557 PLAZA WEST 808,435 3,210,187 624,109 808,435 3,834,296 FELBRAM 72,971 302,579 399,948 72,971 702,527 GREENWOOD 423,371 1,883,421 1,436,442 423,371 3,319,863 GRIFFITH -- 2,495,820 (19,188) -- 2,476,632 INDIANAPOLIS 447,600 3,607,193 2,228,534 447,600 5,835,727 LAFAYETTE 230,402 1,305,943 144,709 230,402 1,450,652 LAFAYETTE 812,810 3,252,269 953,535 812,810 4,205,804 KIMCO LAFAYETTE MARKET PLACE 4,184,000 16,752,165 10,374 4,184,000 16,762,538 MERRILLVILLE -- 1,965,694 74,450 -- 2,040,144 KRC MISHAWAKA 895 378,088 1,999,079 642 378,730 1,999,079 SOUTH BEND, S. HIGH ST 183,463 1,070,401 196,858 183,463 1,267,259 OVERLAND PARK, MELCALF 1,183,911 6,335,308 132,624 1,185,906 6,465,937 ROELAND PARK -- 5,120,323 1,581,377 296,000 6,405,700 SHAWNEE, KANSAS -- 405,770 -- -- 405,770 BELLEVUE 405,217 1,743,573 101,153 405,217 1,844,726 LEXINGTON 1,675,031 6,848,209 4,967,755 1,675,031 11,815,964 PADUCAH MALL, KY -- 1,047,281 (123,196) -- 924,085 BATON ROUGE 3,813,873 15,260,609 946,517 3,813,873 16,207,127 KIMCO HOUMA 274, LLC 1,980,000 7,945,784 -- 1,980,000 7,945,784 LAFAYETTE 2,115,000 8,508,218 8,564,491 3,678,274 15,509,435 GREAT BARRINGTON 642,170 2,547,830 6,890,727 751,124 9,329,603 LEOMINSTER 3,732,508 6,754,092 34,923,627 4,933,640 40,476,587 SHREWSBURY SHOPPING CENTER 1,284,168 5,284,853 2,978,664 1,284,168 8,263,517 GAITHERSBURG 244,890 6,787,534 121,951 244,890 6,909,485 GLEN BURNIE -- 1,000,000 -- -- 1,000,000 HAGERSTOWN 541,389 2,165,555 993,343 541,389 3,158,898 LAUREL 349,562 1,398,250 837,200 349,562 2,235,450 LAUREL 274,580 1,100,968 (3,820) 274,580 1,097,148 LARGO/LANDOVER 982,266 27,223,105 -- 982,266 27,223,105 WHITE MARSH, COSTCO 3,517,018 14,049,542 23,351 3,517,018 14,072,893 BANGOR, ME 403,833 1,622,331 -- 403,833 1,622,331 CLAWSON 1,624,771 6,578,142 2,329,743 1,624,771 8,907,885 WHITE LAKE 2,300,050 9,249,607 1,294,424 2,300,050 10,544,031 FARMINGTON 1,098,426 4,525,723 1,972,156 1,098,426 6,497,879 FLINT 984,338 8,053,218 264,830 984,338 8,329,963 LIVONIA 178,785 925,818 551,365 178,785 1,477,183 MUSKEGON 391,500 958,500 752,926 391,500 1,711,426 TAYLOR 1,451,397 5,806,263 155,950 1,451,397 5,962,213 WALKER 3,682,478 14,730,060 1,727,101 3,682,478 16,457,161 BRIDGETON -- 2,196,834 -- -- 2,196,834 CREVE COEUR, WOODCREST/OLIVE 1,044,598 5,475,623 588,262 1,046,371 6,062,112 CRYSTAL CITY, MI -- 234,378 -- -- 234,378 CAPE GIRARDEAU -- 2,242,469 -- -- 2,242,469 HAZELWOOD, MO -- -- 324,258 -- 324,258 INDEPENDENCE, NOLAND DR 1,728,367 8,951,101 47,757 1,731,300 8,995,925 NORTH POINT SHOPPING CENTER 1,935,380 7,800,746 112,922 1,935,380 7,913,668 KRIKWOOD -- 9,704,005 303,458 -- 10,007,463 KANSAS CITY, STATE AVE 1,692,301 8,763,689 27,872 1,695,173 8,788,689 KANSAS CITY 574,777 2,971,191 221,335 574,777 3,192,526 LEMAY 125,879 503,510 187,384 125,879 690,894 GRAVOIS 1,032,416 4,455,514 1,194,660 1,032,416 5,650,174 SPRINGFIELD 2,745,595 10,985,778 3,936,995 2,904,022 14,764,346 KRC ST. CHARLES -- 550,204 16,033 -- 566,237 ST. LOUIS, CHRISTY BLVD 809,087 4,430,514 883,593 809,087 5,314,107 OVERLAND -- 4,928,677 161,877 -- 5,090,554 ST. LOUIS -- 5,756,736 226,173 -- 5,982,909 ST. LOUIS -- 2,766,644 21,618 -- 2,788,262 ST. PETERS 1,182,194 7,423,459 79,378 1,182,194 7,502,837 MAPLEWOOD 604,803 4,619,578 161,796 604,803 4,781,374 SPRINGFIELD,GLENSTONE AVE -- 608,793 1,589,269 -- 2,198,062 ST. CHARLES-UNDERDEVELOPED LAND, MO 431,960 -- 733,855 431,960 733,855 KANSAS CITY 775,025 5,046,021 -- 775,025 5,046,021 CHARLOTTE 919,251 3,570,981 1,036,008 919,251 4,606,989 CHARLOTTE 1,783,400 7,139,131 158,118 1,783,400 7,297,249

TOTAL COST, DATE OF ACCUMULATED NET OF ACCUMULATED CONSTRUCTION(C) PROPERTIES TOTAL DEPRECIATION DEPRECIATION ENCUMBRANCES ACQUISITION(A) ---------- ----- ------------ ------------ ------------ -------------- WOODGROVE FESTIVAL 27,218,522 1,879,586 25,338,936 -- 1998(A) WAUKEGAN, BELVIDERE 1,402,286 85,275 1,317,011 -- 1998(A) PLAZA EAST 8,417,706 942,349 7,475,357 -- 1995(A) PLAZA WEST 4,642,731 478,913 4,163,818 -- 1995(A) FELBRAM 775,498 458,713 316,784 -- 1970(C) GREENWOOD 3,743,234 1,634,026 2,109,207 -- 1970(C) GRIFFITH 2,476,632 254,505 2,222,127 -- 1997(A) INDIANAPOLIS 6,283,327 3,277,351 3,005,976 -- 1986(A) LAFAYETTE 1,681,054 1,049,581 631,473 -- 1971(C) LAFAYETTE 5,018,614 481,019 4,537,596 -- 1997(A) KIMCO LAFAYETTE MARKET PLACE 20,946,538 1,502,017 19,444,521 -- 1998(A) MERRILLVILLE 2,040,144 223,398 1,816,746 -- 1997(A) KRC MISHAWAKA 895 2,377,809 174,235 2,203,574 -- 1998(A) SOUTH BEND, S. HIGH ST 1,450,722 85,091 1,365,630 -- 1998(A) OVERLAND PARK, MELCALF 7,651,843 514,169 7,137,674 -- 1998(A) ROELAND PARK 6,701,700 636,811 6,064,889 -- 1997(A) SHAWNEE, KANSAS 405,770 34,159 371,611 -- 1997(A) BELLEVUE 2,249,943 1,551,603 698,340 -- 1976(A) LEXINGTON 13,490,995 2,269,417 11,221,578 -- 1993(A) PADUCAH MALL, KY 924,085 96,341 827,744 -- 1998(A) BATON ROUGE 20,020,999 1,616,713 18,404,286 -- 1997(A) KIMCO HOUMA 274, LLC 9,925,784 441,256 9,484,528 -- 1999(A) LAFAYETTE 19,187,709 1,359,455 17,828,254 -- 1997(A) GREAT BARRINGTON 10,080,727 1,055,859 9,024,868 -- 1994(A) LEOMINSTER 45,410,227 12,890,320 32,519,906 -- 1975(A) SHREWSBURY SHOPPING CENTER 9,547,684 202,181 9,345,504 -- 2000(A) GAITHERSBURG 7,154,375 353,723 6,800,652 -- 1999(A) GLEN BURNIE 1,000,000 25,641 974,359 -- 2000(A) HAGERSTOWN 3,700,287 1,738,957 1,961,330 -- 1973(C) LAUREL 2,585,012 481,468 2,103,544 -- 1995(A) LAUREL 1,371,728 808,425 563,303 -- 1972(C) LARGO/LANDOVER 28,205,372 1,396,057 26,809,315 -- 1999(A) WHITE MARSH, COSTCO 17,589,911 1,255,048 16,334,863 -- 1998(A) BANGOR, ME 2,026,164 -- 2,026,164 2001(A) CLAWSON 10,532,656 1,609,444 8,923,212 -- 1993(A) WHITE LAKE 12,844,081 1,376,435 11,467,646 -- 1996(A) FARMINGTON 7,596,305 1,133,486 6,462,819 -- 1993(A) FLINT 9,314,301 2,945,822 6,368,478 -- 2000(A) LIVONIA 1,655,968 487,175 1,168,793 -- 1968(C) MUSKEGON 2,102,926 1,184,646 918,280 -- 1985(A) TAYLOR 7,413,610 1,220,887 6,192,723 -- 1993(A) WALKER 20,139,639 3,142,454 16,997,185 -- 1993(A) BRIDGETON 2,196,834 239,429 1,957,405 -- 1997(A) CREVE COEUR, WOODCREST/OLIVE 7,108,483 507,804 6,600,679 -- 1998(A) CRYSTAL CITY, MI 234,378 19,092 215,286 -- 1997(A) CAPE GIRARDEAU 2,242,469 232,534 2,009,935 -- 1997(A) HAZELWOOD, MO 324,258 13,909 310,349 -- 1971(C) INDEPENDENCE, NOLAND DR 10,727,225 783,223 9,944,002 -- 1998(A) NORTH POINT SHOPPING CENTER 9,849,048 617,054 9,231,994 7,260,640 1998(A) KRIKWOOD 10,007,463 855,491 9,151,971 -- 1998(A) KANSAS CITY, STATE AVE 10,483,862 765,706 9,718,156 -- 1998(A) KANSAS CITY 3,767,303 324,037 3,443,266 -- 1997(A) LEMAY 816,773 471,423 345,349 -- 1974(C) GRAVOIS 6,682,590 3,846,745 2,835,845 -- 1972(C) SPRINGFIELD 17,668,368 2,284,677 15,383,691 -- 1994(A) KRC ST. CHARLES 566,237 42,323 523,913 -- 1998(A) ST. LOUIS, CHRISTY BLVD 6,123,194 310,139 5,813,055 -- 1998(A) OVERLAND 5,090,554 557,859 4,532,695 -- 1997(A) ST. LOUIS 5,982,909 653,627 5,329,283 -- 1997(A) ST. LOUIS 2,788,262 294,852 2,493,410 -- 1997(A) ST. PETERS 8,685,031 759,289 7,925,742 -- 1997(A) MAPLEWOOD 5,386,177 463,921 4,922,256 -- 1997(A) SPRINGFIELD,GLENSTONE AVE 2,198,062 68,943 2,129,119 -- 1998(A) ST. CHARLES-UNDERDEVELOPED LAND, MO 1,165,815 15,681 1,150,134 -- 1998(A) KANSAS CITY 5,821,046 512,298 5,308,748 -- 1997(A) CHARLOTTE 5,526,240 718,379 4,807,860 -- 1995(A) CHARLOTTE 9,080,649 1,531,042 7,549,606 -- 1993(A)

74

INITIAL COST BUILDING AND SUBSEQUENT BUILDINGS AND PROPERTIES LAND IMPROVEMENT TO ACQUISITION LAND IMPROVEMENTS ---------- ---- ----------- -------------- ---- ------------ TYVOLA RD -- 4,736,345 1,803,127 -- 6,539,472 CROSSROADS PLAZA 767,864 3,098,881 -- 767,864 3,098,881 KIMCO CARY 696, INC 2,180,000 8,756,865 383,993 2,256,799 9,064,059 DURHAM 1,882,800 7,551,576 967,568 1,882,800 8,519,144 LANDMARK STATION S.C 1,200,000 4,808,785 -- 1,200,000 4,808,785 GASTONIA 2,467,696 9,870,785 687,904 2,467,696 10,558,689 RALEIGH 5,208,885 20,885,792 1,918,226 5,208,885 22,804,018 WAKEFIELD COMMONS II 6,506,450 -- 519,654 6,506,450 519,654 WAKEFIELD CROSSINGS 3,413,932 -- 6,678,194 3,413,932 6,678,194 WAKEFIELD COMMONS 1,240,000 5,015,595 -- 1,240,000 5,015,595 WINSTON-SALEM 540,667 719,655 4,961,378 540,667 5,681,033 ROCKINGHAM 2,660,915 10,643,660 10,027,480 2,660,915 20,671,140 BRIDEWATER NJ 3,511,411 227,498 8,867,382 3,511,411 9,094,880 CHERRY HILL 2,417,583 6,364,094 1,010,248 2,417,583 7,374,342 MARLTON PIKE -- 4,318,534 -- -- 4,318,534 CINNAMINSON 652,123 2,608,491 1,366,973 652,123 3,975,464 FRANKLIN TOWNE CENTER 4,903,113 19,608,193 41,428 4,903,113 19,649,621 HILLSBOROUGH 14,360,727 -- 8,476,256 14,360,727 8,476,256 NORTH BRUNSWICK 3,204,978 12,819,912 12,689,178 3,204,978 25,509,090 PISCATAWAY TOWN CENTER 3,851,839 15,410,851 47,755 3,851,839 15,458,606 RIDGEWOOD 450,000 2,106,566 148,300 450,000 2,254,866 WESTMONT 601,655 2,404,604 9,542,813 601,655 11,947,417 SYCAMORE PLAZA 1,404,443 5,613,270 56,900 1,404,443 5,670,170 PLAZA PASEO DEL-NORTE 4,653,197 18,633,584 224,986 4,653,197 18,858,570 JUAN TABO, ALBUQUERQUE 1,141,200 4,566,817 147,904 1,141,200 4,714,721 BRIDGEHAMPTON 1,811,752 3,107,232 22,166,322 1,811,752 25,273,554 CARLE PLACE 1,183,290 4,903,642 10,984,004 1,314,540 15,756,396 KING KULLEN PLAZA 5,968,082 23,243,404 680,571 5,968,082 23,923,975 HAMPTON BAYS 1,495,105 5,979,320 80,495 1,495,105 6,059,815 HENRIETTA 1,075,358 6,635,486 90,880 1,075,358 6,726,366 IRONDEQUOIT 213,617 546,101 1,004,064 213,617 1,550,165 MANHASSET VENTURE LLC 4,567,003 19,165,808 1,607,140 4,567,003 20,772,948 MASSAPEQUA DUANE READE 728,508 2,914,031 -- 728,508 2,914,031 NANUET 798,932 2,361,900 1,706,722 798,932 4,068,622 PLAINVIEW 263,693 584,031 9,620,395 263,693 10,204,426 POUGHKEEPSIE 876,548 4,695,659 11,929,556 876,548 16,625,215 SYOSSET, NY 106,655 76,197 311,629 -- 387,826 STATEN ISLAND 2,280,000 9,027,951 4,239,079 2,280,000 13,267,030 STATEN ISLAND 2,940,000 11,811,964 330,805 2,940,000 12,142,769 WEST GATES 1,784,718 9,721,970 180,001 1,784,718 9,901,971 YONKERS 871,977 3,487,909 -- 871,977 3,487,909 AKRON WATERLOO 437,277 1,912,222 4,028,915 437,277 5,941,137 WEST MARKET ST 560,255 3,909,430 168,875 560,255 4,078,305 ROMIG ROAD 855,713 5,472,635 -- 855,713 5,472,635 AKRON, OH -- 2,491,079 41,511 -- 2,532,591 BARBERTON 505,590 1,948,135 1,501,992 505,590 3,450,127 BRUNSWICK 771,765 6,058,560 342,307 771,765 6,400,867 BEAVERCREEK 635,228 3,024,722 2,746,056 635,228 5,770,778 MEMPHIS AVE 696,495 4,048,722 -- 696,495 4,048,722 NORTHFIELD ROAD -- 2,997,232 -- -- 2,997,232 CANTON HILLS 500,980 2,020,274 1,156,064 500,980 3,176,338 CANTON 792,985 1,459,031 4,325,346 792,985 5,784,377 CAMBRIDGE -- 1,848,195 832,182 473,060 2,207,317 MORSE RD 835,386 2,097,600 2,672,713 835,386 4,770,313 HAMILTON RD 856,178 2,195,520 3,682,249 856,178 5,877,769 OLENTANGY RIVER RD 764,517 1,833,600 2,243,843 764,517 4,077,443 W. BROAD ST 982,464 3,929,856 3,101,136 982,464 7,030,992 RIDGE ROAD 1,285,213 4,712,358 5,463,257 1,285,213 10,175,615 GLENWAY AVE 530,243 3,788,189 494,613 530,243 4,282,802 SPRINGDALE 3,205,653 14,619,732 4,860,596 3,205,653 19,480,328 EVERHARD RD 633,046 3,729,612 -- 633,046 3,729,612 SOUTH HIGH ST 602,421 2,737,004 -- 602,421 2,737,004 CANTON, OH -- 2,708,276 -- -- 2,708,380 GLENWAY CROSSING 699,359 3,112,047 86,996 699,359 3,199,043 HIGHLAND RIDGE PLAZA 1,540,000 6,178,398 141,991 1,540,000 6,320,389 SHILOH SPRING RD -- 1,735,836 1,874,426 -- 3,610,262 OAKCREEK 1,245,870 4,339,637 4,047,657 1,245,870 8,387,294

TOTAL COST, DATE OF ACCUMULATED NET OF ACCUMULATED CONSTRUCTION(C) PROPERTIES TOTAL DEPRECIATION DEPRECIATION ENCUMBRANCES ACQUISITION(A) ---------- ----- ------------ ------------ ------------ -------------- TYVOLA RD 6,539,472 3,829,078 2,710,394 -- 1986(A) CROSSROADS PLAZA 3,866,744 118,921 3,747,824 2000(A) KIMCO CARY 696, INC 11,320,858 830,703 10,490,155 -- 1998(A) DURHAM 10,401,944 1,166,759 9,235,185 -- 1996(A) LANDMARK STATION S.C 6,008,785 277,148 5,731,637 -- 1999(A) GASTONIA 13,026,385 3,223,191 9,803,194 -- 1989(A) RALEIGH 28,012,903 4,052,883 23,960,020 -- 1993(A) WAKEFIELD COMMONS II 7,026,104 -- 7,026,104 5,900,000 2001(C) WAKEFIELD CROSSINGS 10,092,126 -- 10,092,126 2001(C) WAKEFIELD COMMONS 6,255,595 85,711 6,169,884 2001(C) WINSTON-SALEM 6,221,700 1,534,741 4,686,959 -- 1969(C) ROCKINGHAM 23,332,055 2,907,183 20,424,872 -- 1994(A) BRIDEWATER NJ 12,606,291 1,085,135 11,521,157 -- 1998(C) CHERRY HILL 9,791,925 3,457,052 6,334,874 4,235,000 1985(C) MARLTON PIKE 4,318,534 590,569 3,727,965 -- 1996(A) CINNAMINSON 4,627,587 244,714 4,382,873 -- 1996(A) FRANKLIN TOWNE CENTER 24,552,734 1,762,308 22,790,426 12,396,150 1998(A) HILLSBOROUGH 22,836,983 -- 22,836,983 2001(C) NORTH BRUNSWICK 28,714,068 3,712,413 25,001,655 -- 1994(A) PISCATAWAY TOWN CENTER 19,310,445 1,385,254 17,925,191 -- 1998(A) RIDGEWOOD 2,704,866 435,742 2,269,124 -- 1993(A) WESTMONT 12,549,072 1,273,165 11,275,907 -- 1994(A) SYCAMORE PLAZA 7,074,613 505,346 6,569,267 1,753,205 1998(A) PLAZA PASEO DEL-NORTE 23,511,767 1,671,350 21,840,417 7,459,704 1998(A) JUAN TABO, ALBUQUERQUE 5,855,921 404,338 5,451,583 -- 1998(A) BRIDGEHAMPTON 27,085,306 7,302,038 19,783,269 -- 1972(C) CARLE PLACE 17,070,936 1,734,426 15,336,510 -- 1993(A) KING KULLEN PLAZA 29,892,057 2,669,372 27,222,685 -- 1998(A) HAMPTON BAYS 7,554,920 2,322,300 5,232,620 -- 1989(A) HENRIETTA 7,801,724 1,727,863 6,073,860 -- 1993(A) IRONDEQUOIT 1,763,782 415,972 1,347,810 -- 1993(A) MANHASSET VENTURE LLC 25,339,952 1,008,044 24,331,908 -- 1999(A) MASSAPEQUA DUANE READE 3,642,539 202,372 3,440,167 2,674,895 1999(A) NANUET 4,867,554 1,776,225 3,091,329 -- 1984(A) PLAINVIEW 10,468,119 2,461,048 8,007,071 -- 1969(C) POUGHKEEPSIE 17,501,763 3,957,178 13,544,585 -- 1972(C) SYOSSET, NY 387,826 66,660 321,166 -- 1990(C) STATEN ISLAND 15,547,030 4,325,127 11,221,903 -- 1989(A) STATEN ISLAND 15,082,769 1,223,135 13,859,634 4,174,642 1997(A) WEST GATES 11,686,689 2,063,183 9,623,506 -- 1993(A) YONKERS 4,359,886 571,998 3,787,888 -- 1998(A) AKRON WATERLOO 6,378,414 1,632,433 4,745,981 -- 1975(C) WEST MARKET ST 4,638,560 1,637,025 3,001,536 -- 1999(A) ROMIG ROAD 6,328,348 2,088,830 4,239,518 1999(A) AKRON, OH 2,532,591 762,685 1,769,906 -- 1999(A) BARBERTON 3,955,717 1,621,239 2,334,478 -- 1972(C) BRUNSWICK 7,172,632 5,044,815 2,127,817 -- 1975(C) BEAVERCREEK 6,406,006 3,122,929 3,283,077 -- 1986(A) MEMPHIS AVE 4,745,218 1,606,976 3,138,242 -- 1999(A) NORTHFIELD ROAD 2,997,232 786,966 2,210,266 -- 1999(A) CANTON HILLS 3,677,318 484,580 3,192,738 -- 1993(A) CANTON 6,577,362 2,604,938 3,972,423 -- 1972(C) CAMBRIDGE 2,680,377 1,496,932 1,183,445 -- 1973(C) MORSE RD 5,605,699 1,755,124 3,850,575 -- 1988(A) HAMILTON RD 6,733,947 2,018,864 4,715,083 -- 1988(A) OLENTANGY RIVER RD 4,841,960 1,857,323 2,984,637 -- 1988(A) W. BROAD ST 8,013,456 2,332,238 5,681,217 -- 1988(A) RIDGE ROAD 11,460,828 1,532,340 9,928,488 -- 1992(A) GLENWAY AVE 4,813,045 1,615,209 3,197,836 -- 1999(A) SPRINGDALE 22,685,981 5,442,655 17,243,326 -- 1992(A) EVERHARD RD 4,362,658 1,364,844 2,997,814 -- 1999(A) SOUTH HIGH ST 3,339,425 1,312,564 2,026,861 -- 1999(A) CANTON, OH 2,708,380 1,068,414 1,639,967 -- 1999(A) GLENWAY CROSSING 3,898,402 112,822 3,785,580 2000(A) HIGHLAND RIDGE PLAZA 7,860,389 332,868 7,527,521 -- 1999(A) SHILOH SPRING RD 3,610,262 2,288,903 1,321,359 -- 1969(C) OAKCREEK 9,633,164 3,545,582 6,087,581 4,425,000 1984(A)

75

INITIAL COST BUILDING AND SUBSEQUENT BUILDINGS AND PROPERTIES LAND IMPROVEMENT TO ACQUISITION LAND IMPROVEMENTS ---------- ---- ----------- -------------- ---- ------------ SALEM AVE 665,314 347,818 5,369,012 665,314 5,716,830 KETTERING 1,190,496 4,761,984 655,952 1,190,496 5,417,936 KENT, OH 6,254 3,028,914 -- 6,254 3,028,914 KENT 2,261,530 -- -- 2,261,530 -- LIMA 695,121 3,080,479 682,807 695,121 3,763,286 MENTOR 503,981 2,455,926 600,593 503,981 3,056,519 MIDDLEBURG HEIGHTS 639,542 3,783,096 -- 639,542 3,783,096 MENTOR ERIE CMNS 2,234,474 9,648,000 4,420,909 2,234,474 14,068,909 MALLWOODS CENTER 1,975,561 -- 4,122,551 1,975,561 4,122,551 NORTH OLMSTED 626,818 3,712,045 -- 626,818 3,712,045 ORANGE OHIO 5,407,781 -- 1,992,439 5,407,781 1,992,439 SPRINGBORO PIKE 1,854,527 2,572,518 2,554,076 1,854,527 5,126,594 SPRINGFIELD 842,976 3,371,904 1,473,238 842,976 4,845,142 UPPER ARLINGTON 504,256 2,198,476 8,228,670 1,255,544 9,675,858 WHITEHALL 432,652 770,159 152,387 432,652 922,546 WICKLIFFE 610,991 2,471,965 1,269,488 610,991 3,741,453 CHARDON ROAD 481,167 5,947,751 -- 481,167 5,947,751 WESTERVILLE 1,050,431 4,201,616 7,555,927 1,050,431 11,757,543 EDMOND 477,036 3,591,493 -- 477,036 3,591,493 MIDWEST CITY 1,435,506 7,370,459 2,424 1,437,930 7,370,459 CENNTENIAL PLAZA 4,650,634 18,604,307 127,732 4,650,634 18,732,039 SOUTH SHIELDS, OKLAHOMA -- 457,015 -- -- 457,015 TULSA 500,950 2,002,508 -- 500,950 2,002,508 TULSA -- -- 131,399 -- 131,399 CHIPPEWA 2,881,525 11,526,101 25,569 2,881,525 11,551,670 CARNEGIE -- 3,298,908 17,747 -- 3,316,655 CENTER SQUARE 731,888 2,927,551 -- 731,888 2,927,551 WEST MIFFLIN 475,815 1,903,231 700,469 475,815 2,603,700 EAST STROUDSBURG 1,050,000 2,372,628 1,015,642 1,050,000 3,388,270 EXTON 176,666 4,895,360 -- 176,666 4,895,360 EXTON 731,888 2,927,551 -- 731,888 2,927,551 EASTWICK 889,001 2,762,888 2,386,166 889,001 5,539,713 FEASTERVILLE 520,521 2,082,083 29,197 520,521 2,111,280 GETTYSBURG 74,626 671,630 101,519 74,626 773,149 SIMPSON FERRY 658,346 6,908,711 289,980 658,346 7,198,691 HAMBURG 439,232 -- 2,023,428 494,982 1,967,677 HAVERTOWN 731,888 2,927,551 -- 731,888 2,927,551 OLMSTED 167,337 2,815,856 444,283 167,337 3,260,139 MIDDLETOWN 207,283 1,174,603 447,331 207,283 1,621,934 NORRISTOWN 686,134 2,664,535 3,344,245 774,084 5,920,830 NEW KENSINGTON 521,945 2,548,322 676,040 521,945 3,224,362 PENN HILLS -- 1,737,289 -- -- 1,737,289 PHILADELPHIA 731,888 2,927,551 -- 731,888 2,927,551 GALLERY, PHILADELPHIA PA -- -- 258,931 -- 258,931 RICHBORO 788,761 3,155,044 11,044,884 976,439 14,012,250 SPRINGFIELD 919,998 4,981,589 1,458,598 919,998 6,440,187 TREXLERTOWN WELLNESS -- 2,880,597 1,713 -- 2,591,547

TOTAL COST, DATE OF ACCUMULATED NET OF ACCUMULATED CONSTRUCTION(C) PROPERTIES TOTAL DEPRECIATION DEPRECIATION ENCUMBRANCES ACQUISITION(A) ---------- ----- ------------ ------------ ------------ -------------- SALEM AVE 6,382,144 1,737,206 4,644,938 -- 1988(A) KETTERING 6,608,432 2,099,871 4,508,561 -- 1988(A) KENT, OH 3,035,168 891,393 2,143,775 -- 1999(A) KENT 2,261,530 -- 2,261,530 -- 1995(A) LIMA 4,458,407 607,987 3,850,420 -- 1995(A) MENTOR 3,560,500 1,351,067 2,209,433 -- 1987(A) MIDDLEBURG HEIGHTS 4,422,637 1,421,470 3,001,168 -- 1999(A) MENTOR ERIE CMNS 16,303,383 4,030,576 12,272,807 -- 1988(A) MALLWOODS CENTER 6,098,111 -- 6,098,111 -- 1999(C) NORTH OLMSTED 4,338,862 1,363,831 2,975,031 -- 1999(A) ORANGE OHIO 7,400,220 -- 7,400,220 2001(C) SPRINGBORO PIKE 6,981,121 2,689,574 4,291,547 -- 1985(C) SPRINGFIELD 5,688,118 1,480,273 4,207,846 -- 1988(A) UPPER ARLINGTON 10,931,402 4,397,296 6,534,106 -- 1969(C) WHITEHALL 1,355,198 808,571 546,627 -- 1967(C) WICKLIFFE 4,352,444 556,925 3,795,519 -- 1995(A) CHARDON ROAD 6,428,918 1,747,195 4,681,723 -- 1999(A) WESTERVILLE 12,807,974 2,862,230 9,945,744 -- 1988(A) EDMOND 4,068,529 357,967 3,710,562 9,694,327 1997(A) MIDWEST CITY 8,808,389 659,720 8,148,669 9,904,371 1998(A) CENNTENIAL PLAZA 23,382,673 1,676,932 21,705,741 10,022,403 1998(A) SOUTH SHIELDS, OKLAHOMA 457,015 38,681 418,334 -- 1997(A) TULSA 2,503,458 303,984 2,199,474 -- 1996(A) TULSA 131,399 11,323 120,076 -- 1997(A) CHIPPEWA 14,433,195 567,022 13,866,173 12,572,346 2000(A) CARNEGIE 3,316,655 170,085 3,146,570 -- 1999(A) CENTER SQUARE 3,659,439 400,350 3,259,089 -- 1996(A) WEST MIFFLIN 3,079,515 473,089 2,606,426 -- 1993(A) EAST STROUDSBURG 4,438,270 1,983,971 2,454,300 -- 1973(C) EXTON 5,072,026 251,044 4,820,982 -- 1999(A) EXTON 3,659,439 400,350 3,259,089 -- 1996(A) EASTWICK 6,428,714 646,222 5,782,492 4,852,059 1997(A) FEASTERVILLE 2,631,801 269,180 2,362,621 -- 1996(A) GETTYSBURG 847,775 623,482 224,293 -- 1986(A) SIMPSON FERRY 7,857,037 2,346,761 5,510,275 -- 2000(A) HAMBURG 2,462,660 -- 2,462,660 2000(C) HAVERTOWN 3,659,439 400,350 3,259,089 -- 1996(A) OLMSTED 3,427,476 2,293,225 1,134,251 -- 1973(C) MIDDLETOWN 1,829,217 1,005,578 823,639 -- 1986(A) NORRISTOWN 6,694,914 3,147,677 3,547,237 -- 1984(A) NEW KENSINGTON 3,746,307 2,423,491 1,322,816 -- 1986(A) PENN HILLS 1,737,289 1,370,022 367,267 -- 1986(A) PHILADELPHIA 3,659,439 400,350 3,259,089 -- 1996(A) GALLERY, PHILADELPHIA PA 258,931 3,769 255,162 -- 1996(A) RICHBORO 14,988,689 4,057,008 10,931,681 -- 1986(A) SPRINGFIELD 7,360,185 3,537,548 3,822,637 2,995,000 1983(A) TREXLERTOWN WELLNESS 2,591,547 847,406 1,744,141 1,981,393 1997(A)

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INITIAL COST BUILDING AND SUBSEQUENT BUILDINGS AND PROPERTIES LAND IMPROVEMENT TO ACQUISITION LAND IMPROVEMENTS ---------- ---- ----------- -------------- ---- ------------ UPPER ALLEN 445,743 1,782,972 173,253 445,743 1,956,225 UPPER DARBY 231,821 927,286 3,304,456 285,828 4,106,486 WEST MIFFLIN HILLS 636,366 3,199,729 6,967,919 636,366 10,167,648 WEST MIFFLIN 1,468,341 -- -- 1,468,341 -- WHITEHALL -- 5,195,577 9,231 -- 5,204,808 EASTERN BLVD 412,016 1,876,962 190,431 412,016 2,067,393 E. PROSPECT ST 604,826 2,755,314 265,370 604,826 3,020,684 W. MARKET ST 188,562 1,158,307 -- 188,562 1,158,307 MARSHALL PLAZA, CRANSTON RI 1,886,600 7,575,302 175,885 1,886,600 7,751,187 AIKEN 183,901 1,087,979 69,601 183,901 1,157,580 CHARLESTON 730,164 3,132,092 4,569,389 730,164 7,701,481 CHARLESTON 1,744,430 6,986,094 2,670,763 1,744,430 9,656,857 FLORENCE 1,465,661 6,011,013 35,458 1,465,661 6,046,471 GREENVILLE 2,209,812 8,850,864 91,295 2,209,812 8,942,159 NORTH CHARLESTON 744,093 2,974,990 18,815 744,093 2,993,805 N. CHARLESTON 2,965,748 11,895,294 165,716 2,965,748 12,061,010 MADISON -- 4,133,904 2,128,408 -- 6,262,312 HICKORY RIDGE COMMONS 596,347 2,545,033 7,624 596,347 2,552,656 TROLLEY STATION 3,303,682 13,218,740 55,985 3,303,682 13,274,725 MARKET PLACE AT RIVERGATE 2,574,635 10,339,449 367,533 2,574,635 10,706,982 RIVERGATE, TN 3,038,561 12,157,408 185,728 3,038,561 12,343,136 CENTER OF THE HILLS, TX 2,923,585 11,706,145 243,710 2,923,585 11,949,855 ARLINGTON 500,414 2,001,656 -- 500,414 2,001,656 ARLINGTON 3,160,203 2,285,377 -- 3,160,203 2,285,377 BURLESON 8,600,698 -- 3,459,160 8,600,698 3,459,160 BAYTOWN 500,422 2,431,651 186,119 500,422 2,617,770 CEDAR HILL CROSSING 3,543,159 -- 15,543,417 3,543,159 15,543,417 CORSICANA 989,061 3,990,595 -- 989,061 3,990,595 CORPUS CHRISTI, TX -- 944,562 1,094,381 -- 2,038,943 DALLAS 1,299,632 5,168,727 4,619,859 1,299,632 9,788,586 DUNCANVILLE 500,414 2,001,656 -- 500,414 2,001,656 FT. WORTH 500,414 2,426,533 -- 500,414 2,426,533 GARLAND 210,286 845,845 -- 210,286 845,845 GARLAND 500,414 2,001,656 -- 500,414 2,001,656 HOUSTON 275,000 507,588 191,639 275,000 699,227 SPRING CYPRESS, TX 2,261,557 -- 2,016,410 2,261,557 2,016,410 CENTER AT BAYBROOK 6,941,017 27,727,491 2,408 6,941,017 27,729,899 HARRIS COUNTY 1,843,000 7,372,420 700,401 2,003,260 7,912,561 SHARPSTOWN COURT 1,560,010 6,245,807 25,917 1,560,010 6,271,724 HOUSTON 500,422 2,001,687 -- 500,422 2,001,687 HOUSTON 406,513 1,939,253 32,984 406,513 1,972,237 SHOPS AT VISTA RIDGE 3,257,199 13,029,416 82,992 3,257,199 13,112,408 VISTA RIDGE PLAZA 2,926,495 11,716,483 86,580 2,926,495 11,803,063 VISTA RIDGE PHASE II 2,276,575 9,106,300 -- 2,276,575 9,106,300 SOUTH PLAINES PLAZA, TX 1,890,000 7,577,145 83,854 1,890,000 7,661,000 MESQUITE 520,340 2,081,356 668,592 520,340 2,749,948 MESQUITE TOWN CENTER 3,757,324 15,061,644 331,542 3,757,324 15,393,186 N. RICHLAND HILLS 1,000,000 -- 80,837 1,065,837 15,000 FORUM AT OLYMPIA PARKWAY 8,653,373 -- 60,030,269 8,486,661 60,196,981 PLANO 500,414 2,830,835 -- 500,414 2,830,835 WEST OAKS 500,422 2,001,687 -- 500,422 2,001,687 OGDEN 213,818 855,275 527,781 213,818 1,383,056 COLONIAL HEIGHTS 125,376 3,476,073 10,220 125,376 3,486,293 HARRISONBURG 69,885 1,938,239 -- 69,885 1,938,239 MANASSAS 1,788,750 7,162,661 159,123 1,788,750 7,321,784 RICHMOND 82,544 2,289,288 231,381 82,544 2,520,669 RICHMOND 670,500 2,751,375 -- 670,500 2,751,375 RACINE 1,403,082 5,612,330 1,517,130 1,403,082 7,129,460 CHARLES TOWN 602,000 3,725,871 10,429,460 602,000 14,155,331 MARTINSBURG 242,634 1,273,828 628,937 242,634 1,902,765 RIVERWALK PLAZA 2,708,290 10,841,674 57,378 2,708,290 10,899,052 BALANCE OF PORTFOLIO 205,631 4,492,127 23,910,697 3,648,579 29,397,724 --------------------------------- $ 542,274,754 $ 2,659,089,176 =================================

TOTAL COST, DATE OF ACCUMULATED NET OF ACCUMULATED CONSTRUCTION(C) PROPERTIES TOTAL DEPRECIATION DEPRECIATION ENCUMBRANCES ACQUISITION(A) ---------- ----- ------------ ------------ ------------ -------------- UPPER ALLEN 2,401,968 1,505,165 896,802 -- 1986(A) UPPER DARBY 4,392,314 589,966 3,802,348 3,812,331 1996(A) WEST MIFFLIN HILLS 10,804,014 4,499,461 6,304,553 -- 1973(C) WEST MIFFLIN 1,468,341 -- 1,468,341 -- 1986(A) WHITEHALL 5,204,808 710,507 4,494,301 -- 1996(A) EASTERN BLVD 2,479,409 1,566,157 913,252 -- 1987(A) E. PROSPECT ST 3,625,510 2,343,270 1,282,240 -- 1986(A) W. MARKET ST 1,346,869 949,990 396,879 -- 1986(A) MARSHALL PLAZA, CRANSTON RI 9,637,787 748,615 8,889,172 -- 1998(A) AIKEN 1,341,481 441,999 899,482 -- 1989(A) CHARLESTON 8,431,645 1,994,867 6,436,778 -- 1978(C) CHARLESTON 11,401,287 1,338,216 10,063,071 -- 1995(A) FLORENCE 7,512,132 660,340 6,851,792 -- 1997(A) GREENVILLE 11,151,971 895,389 10,256,581 -- 1997(A) NORTH CHARLESTON 3,737,898 108,606 3,629,292 2,182,588 2000(A) N. CHARLESTON 15,026,758 1,072,111 13,954,647 -- 1997(A) MADISON 6,262,312 3,494,190 2,768,122 -- 1978(C) HICKORY RIDGE COMMONS 3,149,004 95,900 3,053,103 -- 2000(A) TROLLEY STATION 16,578,407 1,101,570 15,476,837 11,197,026 1998(A) MARKET PLACE AT RIVERGATE 13,281,617 913,744 12,367,873 -- 1998(A) RIVERGATE, TN 15,381,697 1,072,849 14,308,848 -- 1998(A) CENTER OF THE HILLS, TX 14,873,440 1,032,316 13,841,124 -- 1998(A) ARLINGTON 2,502,070 303,668 2,198,402 -- 1996(A) ARLINGTON 5,445,580 242,876 5,202,704 -- 1997(A) BURLESON 12,059,858 -- 12,059,858 -- 2000(C) BAYTOWN 3,118,192 343,412 2,774,780 -- 1996(A) CEDAR HILL CROSSING 19,086,576 267,236 18,819,340 -- 1998(A) CORSICANA 4,979,656 525,773 4,453,883 -- 1997(A) CORPUS CHRISTI, TX 2,038,943 102,259 1,936,684 -- 1997(A) DALLAS 11,088,218 8,182,611 2,905,608 -- 1969(C) DUNCANVILLE 2,502,070 303,668 2,198,402 -- 1996(A) FT. WORTH 2,926,947 303,668 2,623,279 -- 1996(A) GARLAND 1,056,131 122,621 933,510 -- 1996(A) GARLAND 2,502,070 303,668 2,198,402 -- 1996(A) HOUSTON 974,227 614,243 359,984 -- 1973(C) SPRING CYPRESS, TX 4,277,967 -- 4,277,967 2001(C) CENTER AT BAYBROOK 34,670,916 2,471,708 32,199,208 -- 1998(A) HARRIS COUNTY 9,915,821 868,468 9,047,353 -- 1997(A) SHARPSTOWN COURT 7,831,734 468,258 7,363,476 5,879,069 1999(A) HOUSTON 2,502,109 303,668 2,198,441 -- 1996(A) HOUSTON 2,378,750 209,995 2,168,755 -- 1997(A) SHOPS AT VISTA RIDGE 16,369,607 1,177,369 15,192,238 6,619,650 1998(A) VISTA RIDGE PLAZA 14,729,558 1,059,944 13,669,614 5,884,133 1998(A) VISTA RIDGE PHASE II 11,382,875 738,979 10,643,896 5,884,133 1998(A) SOUTH PLAINES PLAZA, TX 9,551,000 732,542 8,818,457 5,790,306 1998(A) MESQUITE 3,270,288 401,382 2,868,906 -- 1995(A) MESQUITE TOWN CENTER 19,150,510 1,346,836 17,803,674 -- 1998(A) N. RICHLAND HILLS 1,080,837 -- 1,080,837 -- 1997(A) FORUM AT OLYMPIA PARKWAY 68,683,642 -- 68,683,642 -- 1999(C) PLANO 3,331,249 375,430 2,955,819 -- 1996(A) WEST OAKS 2,502,109 303,668 2,198,441 -- 1996(A) OGDEN 1,596,874 919,798 677,076 -- 1967(C) COLONIAL HEIGHTS 3,611,669 178,658 3,433,012 -- 1999(A) HARRISONBURG 2,008,123 99,397 1,908,726 -- 1999(A) MANASSAS 9,110,534 768,265 8,342,269 -- 1997(A) RICHMOND 2,603,212 -- 2,603,212 -- 1999(A) RICHMOND 3,421,875 281,391 3,140,484 -- 1995(A) RACINE 8,532,542 2,503,376 6,029,166 -- 1988(A) CHARLES TOWN 14,757,331 4,893,892 9,863,439 -- 1985(A) MARTINSBURG 2,145,399 1,373,139 772,260 -- 1986(A) RIVERWALK PLAZA 13,607,342 791,976 12,815,365 8,105,632 1999(A) BALANCE OF PORTFOLIO 33,046,303 9,953,297 23,093,007 -- VARIOUS -------------------------------------------------------------------------------- 3,201,363,929 $452,877,434 2,748,486,496 292,829,162 ================================================================================

77 Depreciation and amortization of the Company's investment in buildings and improvements reflected in the statements of income is calculated over the estimated useful lives of the assets as follows: Buildings.............15 to 39 years Improvements..........Terms of leases or useful lives, whichever is shorter The aggregate cost for Federal income tax purposes was approximately $3.1 billion at December 31, 2001. The changes in total real estate assets for the years ended December 31, 2001, 2000 and 1999 are as follows:

2001 2000 1999 -------------- -------------- -------------- Balance, beginning of period ..................... $3,111,707,470 $2,951,050,304 $3,023,901,985 Acquisitions ................................... 61,622,301 93,347,127 306,425,242 Improvements ................................... 134,094,630 101,030,279 81,041,623 Transfers from (to) unconsolidated joint ventures (38,139,367) 5,567,007 (450,227,174) Sales .......................................... (60,388,331) (39,287,247) (10,091,372) Adjustment for fully depreciated assets........... (7,532,774) -- -- -------------- -------------- -------------- Balance, end of period ........................... $3,201,363,929 $3,111,707,470 $2,951,050,304 ============== ============== ==============

The changes in accumulated depreciation for the years ended December 31, 2001, 2000, and 1999 are as follows:

2001 2000 1999 ------------- ------------- ------------- Balance, beginning of period ..................... $391,945,913 $323,737,853 $255,949,923 Charged to accumulated depreciation .............. 3,445,687 4,474,484 13,194,587 Depreciation for year .......................... 69,901,342 68,590,773 65,164,326 Transfers from (to) unconsolidated joint ventures (1,810,541) 42,580 (9,678,518) Sales .......................................... (3,072,193) (4,899,777) (892,465) Adjustment for fully depreciated assets .......... (7,532,774) -- -- ------------- ------------- ------------- Balance, end of period ........................... $452,877,434 $391,945,913 $323,737,853 ============= ============= =============

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