DDR CORP (Form: 10-Q, Received: 05/09/2012 10:30:06)

Large accelerated filer

Accelerated filer

Non-accelerated filer

¨ (Do not check if smaller reporting company)

Smaller reporting company

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, DC 20549

Form 10-Q

x	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended March 31, 2012

¨	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to

Commission file number 1-11690

DDR Corp.

(Exact name of registrant as specified in its charter)

Ohio

34-1723097

(State or other jurisdiction of

incorporation or organization)

(I.R.S. Employer

Identification No.)

3300 Enterprise Parkway, Beachwood, Ohio 44122

(Address of principal executive offices—zip code)

(216) 755-5500

(Registrant’s telephone number, including area code)

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

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

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

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

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

As of April 27, 2012, the registrant had 282,262,620 outstanding common shares, $0.10 par value per share.

PART I

FINANCIAL INFORMATION

Item 1. FINANCIAL STATEMENTS—Unaudited



Condensed Consolidated Balance Sheets as of March 31, 2012 and December 31, 2011			2

Condensed Consolidated Statements of Operations for the Three-Month Periods Ended March 31, 2012 and 2011			3

Condensed Consolidated Statements of Comprehensive (Loss) Income for the Three-Month Periods Ended March 31, 2012 and 2011			4

Consolidated Statement of Equity for the Three-Month Period Ended March 31, 2012			5

Condensed Consolidated Statements of Cash Flows for the Three-Month Periods Ended March 31, 2012 and 2011			6

Notes to Condensed Consolidated Financial Statements			7

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DDR Corp.

CONDENSED CONSOLIDATED BALANCE SHEETS

(Dollars in thousands, except share amounts)

(Unaudited)


	March 31, 2012			December 31, 2011
Assets
Land	$	1,843,304		$	1,844,125
Buildings		5,445,207			5,461,122
Fixtures and tenant improvements		389,344			379,965

		7,677,855			7,685,212
Less: Accumulated depreciation		(1,568,138	)		(1,550,066	)

		6,109,717			6,135,146
Land held for development and construction in progress		576,107			581,627
Real estate held for sale, net		8,025			2,290

Total real estate assets, net		6,693,849			6,719,063
Investments in and advances to joint ventures		363,706			353,907
Cash and cash equivalents		16,088			41,206
Restricted cash		23,127			30,983
Notes receivable, net		95,104			93,905
Other assets, net		219,897			230,361

	$	7,411,771		$	7,469,425

Liabilities and Equity
Unsecured indebtedness:
Senior notes	$	1,938,255		$	2,139,718
Unsecured term loan		250,000			—
Revolving credit facilities		75,968			142,421

		2,264,223			2,282,139

Secured indebtedness:
Secured term loan		500,000			500,000
Mortgage and other secured indebtedness		1,372,694			1,322,445

		1,872,694			1,822,445

Total indebtedness		4,136,917			4,104,584
Accounts payable and other liabilities		211,308			257,821
Dividends payable		40,269			29,128

Total liabilities		4,388,494			4,391,533

Commitments and contingencies (Note 9)
DDR Equity:
Class H — 7.375% cumulative redeemable preferred shares, without par value, $500 liquidation value; 750,000 shares authorized; 410,000 shares issued and outstanding at March 31, 2012 and December 31, 2011		205,000			205,000
Class I — 7.5% cumulative redeemable preferred shares, without par value, $500 liquidation value; 750,000 shares authorized; 340,000 shares issued and outstanding at March 31, 2012 and December 31, 2011		170,000			170,000
Common shares, with par value, $0.10 stated value; 500,000,000 shares authorized; 277,558,873 and 277,114,784 shares issued at March 31, 2012 and December 31, 2011, respectively		27,756			27,711
Paid-in capital		4,139,124			4,138,812
Accumulated distributions in excess of net income		(1,548,678	)		(1,493,353	)
Deferred compensation obligation		13,374			13,934
Accumulated other comprehensive income (loss)		3,720			(1,403	)
Less: Common shares in treasury at cost: 705,953 and 833,934 shares at March 31, 2012 and December 31, 2011, respectively		(13,249	)		(15,017	)

Total DDR shareholders’ equity		2,997,047			3,045,684
Non-controlling interests		26,230			32,208

Total equity		3,023,277			3,077,892

	$	7,411,771		$	7,469,425

THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE

CONDENSED CONSOLIDATED FINANCIAL STATEMENTS.

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DDR Corp.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

FOR THE THREE-MONTH PERIODS ENDED MARCH 31,

(Dollars in thousands, except per share amounts)

(Unaudited)


	2012			2011
Revenues from operations:
Minimum rents	$	131,862		$	126,606
Percentage and overage rents		1,610			1,882
Recoveries from tenants		43,365			44,014
Fee and other income		18,534			19,769

		195,371			192,271

Rental operation expenses:
Operating and maintenance		34,343			35,479
Real estate taxes		25,559			25,221
Impairment charges		13,517			3,856
General and administrative		19,012			29,378
Depreciation and amortization		60,306			53,122

		152,737			147,056

Other income (expense):
Interest income		1,841			2,799
Interest expense		(56,746	)		(57,298	)
Loss on debt retirement		(5,602	)		—
Gain on equity derivative instruments		—			21,926
Other (expense) income, net		(1,602	)		1,341

		(62,109	)		(31,232	)

(Loss) income before earnings from equity method investments and other items		(19,475	)		13,983
Equity in net income of joint ventures		8,248			1,974
Impairment of joint venture investments		(560	)		(35	)
Gain on change in control of interests		—			21,729

(Loss) income before tax expense of taxable REIT subsidiaries and state franchise and income taxes		(11,787	)		37,651
Tax expense of taxable REIT subsidiaries and state franchise and income taxes		(179	)		(326	)

(Loss) income from continuing operations		(11,966	)		37,325
Loss from discontinued operations		(3,580	)		(1,085	)

(Loss) income before gain (loss) on disposition of real estate		(15,546	)		36,240
Gain (loss) on disposition of real estate, net of tax		665			(861	)

Net (loss) income	$	(14,881	)	$	35,379
Non-controlling interests		(176	)		(67	)

Net (loss) income attributable to DDR	$	(15,057	)	$	35,312

Preferred dividends		(6,967	)		(10,567	)

Net (loss) income attributable to DDR common shareholders	$	(22,024	)	$	24,745

Per share data:
Basic earnings per share data:
(Loss) income from continuing operations attributable to DDR common shareholders	$	(0.07	)	$	0.10
Loss from discontinued operations attributable to DDR common shareholders		(0.01	)		—

Net (loss) income attributable to DDR common shareholders	$	(0.08	)	$	0.10

Diluted earnings per share data:
(Loss) income from continuing operations attributable to DDR common shareholders	$	(0.07	)	$	0.01
Loss from discontinued operations attributable to DDR common shareholders		(0.01	)		—

Net (loss) income attributable to DDR common shareholders	$	(0.08	)	$	0.01

THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE

CONDENSED CONSOLIDATED FINANCIAL STATEMENTS.

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DDR Corp.

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE (LOSS) INCOME

FOR THE THREE-MONTH PERIODS ENDED MARCH 31,

(Dollars in thousands, except per share amounts)

(Unaudited)


	2012			2011
Net (loss) income	$	(14,881	)	$	35,379

Other comprehensive (loss) income:
Foreign currency translation		4,127			4,976
Change in fair value of interest-rate contracts		1,266			(1,785	)
Amortization of interest-rate contracts		53			(7	)

Total other comprehensive income		5,446			3,184

Comprehensive (loss) income		(9,435	)		38,563

Comprehensive income attributable to non-controlling interests:
Allocation of net income		(176	)		(67	)
Foreign currency translation		(323	)		(1,123	)

Total comprehensive income attributable to non-controlling interests		(499	)		(1,190	)

Total comprehensive (loss) income attributable to DDR	$	(9,934	)	$	37,373

THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE

CONDENSED CONSOLIDATED FINANCIAL STATEMENTS.

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DDR Corp.

CONSOLIDATED STATEMENT OF EQUITY

FOR THE THREE-MONTH PERIOD ENDED MARCH 31, 2012

(Dollars in thousands)

(Unaudited)


	DDR Equity
	Preferred Shares		Common Shares		Paid-in Capital			Accumulated Distributions in Excess of Net Income (Loss)			Deferred Compensation Obligation			Accumulated Other Comprehensive Income (Loss)			Treasury Stock at Cost			Non- Controlling Interests			Total
Balance, December 31, 2011	$	375,000	$	27,711	$	4,138,812		$	(1,493,353	)	$	13,934		$	(1,403	)	$	(15,017	)	$	32,208		$	3,077,892
Issuance of common shares related to stock plans				7		309						151						108						575
Issuance of restricted stock				38		(2,237	)											2,920						721
Vesting of restricted stock						1,542						(711	)					(1,260	)					(429	)
Stock-based compensation						698																		698
Contributions from non-controlling interests																					93			93
Distributions to non-controlling interests																					(6,570	)		(6,570	)
Dividends declared-common shares									(33,301	)														(33,301	)
Dividends declared-preferred shares									(6,967	)														(6,967	)
Comprehensive loss									(15,057	)					5,123						499			(9,435	)

Balance, March 31, 2012	$	375,000	$	27,756	$	4,139,124		$	(1,548,678	)	$	13,374		$	3,720		$	(13,249	)	$	26,230		$	3,023,277

THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE

CONDENSED CONSOLIDATED FINANCIAL STATEMENTS.

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DDR Corp.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

FOR THE THREE-MONTH PERIODS ENDED MARCH 31,

(Dollars in thousands)

(Unaudited)


	2012			2011
Net cash flow provided by operating activities:	$	33,858		$	57,632

Cash flow from investing activities:
Proceeds from disposition of real estate		17,114			11,659
Real estate developed or acquired, net of liabilities assumed		(83,797	)		(43,062	)
Equity contributions to joint ventures		(3,749	)		(832	)
Repayments of joint venture advances, net		25			22,516
Distributions of proceeds from sale and refinancing of joint venture interests		—			1,656
Return of investments in joint ventures		2,801			2,072
Issuance of notes receivable		(75	)		(373	)
Decrease in restricted cash—capital improvements		2,971			2,878

Net cash flow used for investing activities:		(64,710	)		(3,486	)

Cash flow from financing activities:
Repayments of revolving credit facilities, net		(67,898	)		(242,766	)
Proceeds from issuance of senior notes, net of underwriting commissions and offering expenses of $350 in 2011		—			295,495
Repayment of senior notes		(187,670	)		—
Proceeds from mortgages and other secured debt		353,506			121,861
Repayment of term loans and mortgage debt		(52,360	)		(268,012	)
Payment of debt issuance costs		(2,258	)		(1,471	)
Proceeds from issuance of common shares, net of underwriting commissions and offering expenses		(101	)		(106	)
Proceeds from issuance of common shares related to the exercise of warrants		—			59,979
Repurchase of common shares in conjunction with equity award plans		(1,447	)		(1,626	)
Contributions from non-controlling interests		93			94
Distributions to non-controlling interests and redeemable operating partnership units		(6,553	)		(374	)
Dividends paid		(29,128	)		(15,692	)

Net cash flow provided by (used for) financing activities		6,184			(52,618	)

Cash and cash equivalents
(Decrease) increase in cash and cash equivalents		(24,668	)		1,528
Effect of exchange rate changes on cash and cash equivalents		(450	)		81
Cash and cash equivalents, beginning of period		41,206			19,416

Cash and cash equivalents, end of period	$	16,088		$	21,025

Supplemental disclosure of non-cash investing and financing activities:

At March 31, 2012, dividends payable were $40.3 million. The foregoing transaction did not provide for or require the use of cash for the three-month period ended March 31, 2012.

At March 31, 2011, dividends payable were $18.4 million. In conjunction with the acquisition of its partners’ interests in two shopping centers during the three-month period ended March 31, 2011 (Note 3), the Company reversed its previously held equity interest by increasing investments in and advances to joint ventures by approximately $6.8 million as the investment basis was negative, increased net real estate assets by approximately $36.6 million for its previously held proportionate share of the assets, and assumed debt of approximately $50.1 million. In addition, in March 2011, warrants were exercised for an aggregate of 10 million common shares. The equity derivative liability – affiliate of $74.3 million was reclassified from liabilities to additional paid-in capital upon exercise. The foregoing transactions did not provide for or require the use of cash for the three-month period ended March 31, 2011.

THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE

CONDENSED CONSOLIDATED FINANCIAL STATEMENTS.

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DDR Corp.

Notes to Condensed Consolidated Financial Statements

1. NATURE OF BUSINESS AND FINANCIAL STATEMENT PRESENTATION

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

Principles of Consolidation

The Company follows the provisions of Accounting Standards Codification No. 810, Consolidation (“ASC 810”). This standard requires a company to perform an analysis to determine whether its variable interests give it a controlling financial interest in a Variable Interest Entity (“VIE”). This analysis identifies the primary beneficiary of a VIE as the entity that has (a) the power to direct the activities of the VIE that most significantly affect the VIE’s economic performance and (b) the obligation to absorb losses or the right to receive benefits that could potentially be significant to the VIE. In determining whether it has the power to direct the activities of the VIE that most significantly affect the VIE’s performance, this standard requires a company to assess whether it has an implicit financial responsibility to ensure that a VIE operates as designed.

At March 31, 2012 and December 31, 2011, the Company’s investments in consolidated real estate joint ventures in which the Company was deemed to be the primary beneficiary had total real estate assets of $268.4 million and $289.5 million, respectively, mortgages of $22.6 million and $23.5 million, respectively, and other liabilities of $1.2 million and $28.7 million, respectively.

Use of Estimates in Preparation of Financial Statements

The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities and the reported amounts of revenues and expenses during the year. Actual results could differ from those estimates.

Unaudited Interim Financial Statements

These financial statements have been prepared by the Company in accordance with generally accepted accounting principles for interim financial information and the applicable rules and regulations of the Securities and Exchange Commission. Accordingly, they do not include all information and footnotes required by generally accepted accounting principles for complete financial statements. However, in the opinion of management, the interim financial statements include all

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adjustments, consisting of only normal recurring adjustments, necessary for a fair statement of the results of the periods presented. The results of operations for the three-month periods ended March 31, 2012 and 2011, are not necessarily indicative of the results that may be expected for the full year. These condensed consolidated financial statements should be read in conjunction with the Company’s audited financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2011.

New Accounting Standards

Presentation of Other Comprehensive Income

In June 2011, the Financial Accounting Standard Board (“FASB”) issued guidance on the presentation of comprehensive income. This guidance eliminates the option to present the components of other comprehensive income as part of the consolidated statements of equity, which was the Company’s previous presentation, and requires presentation of reclassification adjustments from other comprehensive income to net income on the face of the financial statements. These provisions are effective in fiscal years beginning after December 15, 2011. This presentation was adopted by the Company at December 31, 2011. In December 2011, the FASB deferred those portions of the guidance that relate to the presentation of reclassification adjustments out of accumulated other comprehensive income. The effective date for the deferred portion has not yet been determined. When adopted, the deferred portion of the guidance is not expected to materially impact the Company’s consolidated financial statements.

Fair Value Measurements

In May 2011, the FASB issued Accounting Standards Update No. 2011-04, “Fair Value Measurements and Disclosures (Topic 820)—Amendments to Achieve Common Fair Value Measurement and Disclosure Requirements in U.S. GAAP and IFRS” (“ASU 2011-04”). ASU 2011-04 clarifies the application of existing fair value measurement requirements, changes certain principles related to measuring fair value and requires additional disclosures about fair value measurements. Specifically, the guidance specifies that the concepts of highest and best use and valuation premise in a fair value measurement are only relevant when measuring the fair value of nonfinancial assets whereas they are not relevant when measuring the fair value of financial assets and liabilities. Required disclosures are expanded under the new guidance, especially for fair value measurements that are categorized within Level 3 of the fair value hierarchy, for which quantitative information about the unobservable inputs used, and a narrative description of the valuation processes in place and sensitivity of recurring Level 3 measurements to changes in unobservable inputs will be required. Entities will also be required to disclose the categorization by level of the fair value hierarchy for items that are not measured at fair value in the balance sheet but for which the fair value is required to be disclosed. ASU 2011-04 is effective for annual periods beginning after December 15, 2011, and is to be applied prospectively. The Company’s adoption of this guidance did not have a material impact on its financial statements.

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2. INVESTMENTS IN AND ADVANCES TO JOINT VENTURES

At March 31, 2012 and December 31, 2011, the Company had ownership interests in various unconsolidated joint ventures that had an investment in 172 and 177 shopping center properties, respectively. Condensed combined financial information of the Company’s unconsolidated joint venture investments is as follows (in thousands):


	March 31, 2012			December 31, 2011
Condensed Combined Balance Sheets
Land	$	1,416,122		$	1,400,469
Buildings		4,514,103			4,334,097
Fixtures and tenant improvements		196,940			189,940

		6,127,165			5,924,506
Less: Accumulated depreciation		(840,360	)		(808,352	)

		5,286,805			5,116,154
Land held for development and construction in progress		137,979			239,036

Real estate, net		5,424,784			5,355,190
Cash and restricted cash ^(A)		479,397			308,008
Receivables, net		102,493			108,038
Leasehold interests		9,136			9,136
Other assets		188,377			168,115

	$	6,204,187		$	5,948,487

Mortgage debt ^(A)	$	3,925,260		$	3,742,241
Notes and accrued interest payable to DDR		105,104			100,470
Other liabilities		229,941			214,370

		4,260,305			4,057,081
Accumulated equity		1,943,882			1,891,406

	$	6,204,187		$	5,948,487

Company’s share of accumulated equity	$	414,738		$	402,242

^(A)	Increase is due to issuance of public debt by Sonae Sierra Brasil. The proceeds will be used to fund development activities.

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	Three-Month Periods Ended March 31,
	2012			2011
Condensed Combined Statements of Operations
Revenues from operations	$	169,932		$	168,561

Operating expenses		57,320			58,428
Impairment charges ^(A)		1,347			—
Depreciation and amortization		42,910			47,323
Interest expense		58,182			57,051

		159,759			162,802

Income before tax expense and discontinued operations		10,173			5,759
Income tax expense (primarily Sonae Sierra Brasil), net		(6,029	)		(6,144	)

Income (loss) from continuing operations		4,144			(385	)
Discontinued operations:
Income (loss) from discontinued operations		126			(306	)
Loss on disposition of real estate, net of tax ^(B)		(139	)		(863	)

Income (loss) before gain on disposition of real estate, net		4,131			(1,554	)
Gain on disposition of real estate, net ^(C)		13,852			—

Net income (loss)	$	17,983		$	(1,554	)

Non-controlling interests		(8,934	)		(2,375	)

Net income (loss) attributable to unconsolidated joint ventures	$	9,049		$	(3,929	)

Company’s share of equity in net income of joint ventures ^(C)	$	10,180		$	3,899

(A)	For the three-month period ended March 31, 2012, impairment charges of which the Company’s proportionate share was approximately $0.5 million were recorded primarily on assets being marketed for sale.

(B)	For the three-month period ended March 31, 2012, loss on disposition of discontinued operations includes the sale of one property. The Company’s proportionate share of the aggregate loss was not material.

For the three-month period ended March 31, 2011, loss on disposition of discontinued operations includes the sale of two properties by two of the Company’s unconsolidated joint ventures. The Company’s proportionate share of the aggregate loss for the assets sold for the three-month period ended March 31, 2011, was approximately $1.9 million.

(C)

The difference between the Company’s share of net income (loss), as reported above, and the amounts included in the condensed consolidated statements of operations is attributable to the amortization of basis differentials, deferred gains and differences in gain (loss) on sale of certain assets due to the basis differentials and other than temporary impairment charges. The Company is not recording income or loss from those investments in which its investment basis is zero and the Company does not have the obligation or intent to fund any additional capital. Adjustments to the Company’s share of joint venture net loss for these items are reflected as follows (in millions):


	Three-Month Periods Ended March 31,
	2012			2011
Net loss	$	(1.9	)	$	(1.9	)

Investments in and Advances to Joint Ventures include the following items, which represent the difference between the Company’s investment and its share of all of the unconsolidated joint ventures’ underlying net assets (in millions):

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	March 31, 2012			December 31, 2011
Company’s share of accumulated equity	$	414.7		$	402.2
Basis differentials ^(A)		(152.9	)		(145.6	)
Deferred development fees, net of portion relating to the Company’s interest		(3.6	)		(3.6	)
Notes receivable from investments		0.4			0.4
Notes and accrued interest payable to DDR ^(B)		105.1			100.5

Investments in and Advances to Joint Ventures	$	363.7		$	353.9

(A)

This amount represents the aggregate difference between the Company’s historical cost basis and the equity basis reflected at the joint venture level. Basis differentials recorded upon transfer of assets are primarily associated with assets previously owned by the Company that have been transferred into an unconsolidated joint venture at fair value. Other basis differentials occur primarily when the Company has purchased interests in existing unconsolidated joint ventures at fair market values, which differ from its proportionate share of the historical net assets of the unconsolidated joint ventures. In addition, certain transaction and other costs, including capitalized interest, reserves on notes receivable as discussed below and impairments of the Company’s investments that were other than temporary may not be reflected in the net assets at the joint venture level. Certain basis differentials indicated above are amortized over the life of the related assets.

(B)

The Company has amounts receivable from several joint ventures aggregating approximately $2.6 million at March 31, 2012. The remaining amounts were fully reserved by the Company at March 31, 2012.

Service fees and income earned by the Company through management, financing, leasing and development activities performed related to all of the Company’s unconsolidated joint ventures are as follows (in millions):


	Three-Month Periods Ended March 31,
	2012		2011
Management and other fees	$	6.8	$	7.3
Development fees and leasing commissions		2.0		1.8
Interest income		—		0.1

Sonae Sierra Brasil

During the first quarter, Sonae Sierra Brasil completed a strategic asset swap and partial sale that resulted in Sonae Sierra Brasil owning a majority interest in Shopping Plaza Sul, an enclosed mall located in Sao Paulo. Sonae Sierra Brasil acquired an additional 30% interest in Shopping Plaza Sul in exchange for a 22% stake in Shopping Penha and $29 million in cash. As a result of these transactions, Sonae Sierra Brasil increased its ownership interest in Shopping Plaza Sul to 60% and decreased its interest in Shopping Penha to 51%. The Company’s proportionate share of the net gain on its partial sale of its interest in Shopping Penha was $2.8 million.

Newly Formed Joint Venture

In January 2012, affiliates of the Company and The Blackstone Group L.P. (“Blackstone”) formed a joint venture that is expected to acquire a portfolio of 46 shopping centers owned by EPN Group and managed by the Company. The transaction is valued at approximately $1.4 billion,

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including assumed debt of $640 million and at least $305 million of anticipated new financings. An affiliate of Blackstone will own 95% of the common equity of the joint venture, and the remaining 5% interest will be owned by an affiliate of the Company. The Company is also expected to invest $150 million in preferred equity in the joint venture with a fixed dividend rate of 10%, and will continue to provide leasing and property management services. In addition, the Company will have the right of first offer to acquire ten of the assets under specified conditions.

3. ACQUISITIONS

In March 2012, the Company acquired a shopping center in Chicago, Illinois, aggregating 0.3 million square feet of Company-owned gross leasable area (“GLA”) (all references to GLA or square feet are unaudited) for a total purchase price of $47.4 million.

The Company accounted for the acquisition utilizing the purchase method of accounting. The acquisition of the shopping center was allocated as follows (in thousands):


Land	$	9,120
Buildings		36,176
Tenant improvements		1,320
Intangible assets		4,067

		50,683
Less: Below-market leases ⁽ ^A ⁾		(3,283	)

Net assets acquired	$	47,400

(A)	Below-market leases will be amortized over a weighted-average life of 20.0 years.

The costs related to the acquisition of this asset were expensed as incurred and included in other income (expense), net.

Intangible assets recorded in connection with the above acquisition included the following (in thousands) (Note 5):


			Weighted Average Amortization Period (in Years)
In-place leases (including lease origination costs and fair market value of leases) ⁽ ^A ⁾	$	2,820		5.4
Tenant relations		1,247		10.6

Total intangible assets acquired	$	4,067

(A)	Includes above-market leases valued at $1.3 million.

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4. NOTES RECEIVABLE

Notes receivable consist of the following (in millions):


	March 31, 2012		December 31, 2011
Loans receivable ^(A)	$	85.6	$	84.5
Other notes		3.0		3.0
Tax Increment Financing Bonds (“TIF Bonds”) ^(B)		6.5		6.4

	$	95.1	$	93.9

(A)	Amounts exclude notes receivable and advances from unconsolidated joint ventures including those that were in default and reserved at March 31, 2012 and December 31, 2011.

(B)	Principal and interest are payable solely from the incremental real estate taxes, if any, generated by the respective shopping center and development project pursuant to the terms of the financing agreement.

As of March 31, 2012 and December 31, 2011, the Company had six loans receivable outstanding, with total remaining non-discretionary commitments of $5.9 million and $6.0 million, respectively. The following table reconciles the loans receivable on real estate for the three-month periods ended March 31, 2012 and 2011 (in thousands):


	2012		2011
Balance at January 1	$	84,541	$	103,704
Additions:
New mortgage loans		75		—
Interest		793		633
Accretion of discount		202		191

Balance at March 31	$	85,611	$	104,528

The Company maintains a loan receivable with a carrying value of $10.8 million that was fully reserved at March 31, 2012 and 2011, resulting in a specific loan loss reserve of $10.8 million. The impairment was driven by the then deterioration of the economy and the dislocation of the credit markets. Interest income is no longer being recorded on this loan. At March 31, 2012, this note was more than 90 days past due on principal and interest payments. This is the only loan receivable in the Company’s portfolio that has a loan loss reserve and is considered impaired at March 31, 2012.

In addition, at March 31, 2012, the Company had one loan aggregating $9.8 million that matured in September 2011 and was more than 90 days past due. The Company is no longer recording interest income on this note. A loan loss reserve has not been established based on the estimated value of the underlying real estate collateral.

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5. OTHER ASSETS, NET

Other assets consist of the following (in thousands):


	March 31, 2012		December 31, 2011
Intangible assets:
In-place leases (including lease origination costs and fair market value of leases), net	$	25,105	$	24,798
Tenant relations, net		22,183		22,772

Total intangible assets, net ^(A)		47,288		47,570
Other assets:
Accounts receivable, net ^(B)		104,830		117,463
Deferred charges, net		43,971		45,272
Prepaid expenses		13,528		10,375
Deposits		7,244		6,788
Other assets		3,036		2,893

Total other assets, net	$	219,897	$	230,361

(A)	The Company recorded amortization expense of $3.2 million and $1.5 million for the three-month periods ended March 31, 2012 and 2011, respectively, related to these intangible assets.

(B)	Includes straight-line rents receivable, net, of $56.1 million and $55.7 million at March 31, 2012 and December 31, 2011, respectively.

6. REVOLVING CREDIT FACILITIES AND TERM LOANS

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


	Carrying Value at		Weighted-Average Interest Rate at
	March 31, 2012		March 31, 2012			Maturity Date
Unsecured indebtedness:
Unsecured Credit Facility	$	76.0		2.7	%	February 2016
PNC Facility		—		1.9	%	February 2016
Unsecured Term Loan — Tranche 1		50.0		1.9	%	January 2017
Unsecured Term Loan — Tranche 2		200.0		3.6	%	January 2019
Secured indebtedness:
Secured Term Loan		500.0		2.1	%	September 2014

Revolving Credit Facilities

- 14 -

$1.25 billion upon the Company’s request, provided that new or existing lenders agree to the existing terms of the facility and increase their commitment level. The Unsecured Credit Facility includes a competitive bid option on periodic interest rates for up to 50% of the facility. The Unsecured Credit Facility also provides for an annual facility fee, which was 35 basis points on the entire facility at March 31, 2012. The Unsecured Credit Facility also allows for foreign currency-denominated borrowings. At March 31, 2012, the Company had US$6.3 million of Euro borrowings and US$60.7 million of Canadian dollar borrowings outstanding.

The Company also maintains a $65 million unsecured revolving credit facility with PNC Bank, National Association, (the “PNC Facility” and, together with the Unsecured Credit Facility, the “Revolving Credit Facilities”). The PNC Facility reflects terms consistent with those contained in the Unsecured Credit Facility.

The Company’s borrowings under the Revolving Credit Facilities bear interest at variable rates at the Company’s election, based on either (i) the prime rate plus a specified spread (0.65% at March 31, 2012), as defined in the respective facility, or (ii) LIBOR, plus a specified spread (1.65% at March 31, 2012). The specified spreads vary depending on the Company’s long-term senior unsecured debt rating from Moody’s Investors Service and Standard and Poor’s. The Company is required to comply with certain covenants relating to total outstanding indebtedness, secured indebtedness, maintenance of unencumbered real estate assets, unencumbered debt yield and fixed charge coverage. The Company was in compliance with these covenants at March 31, 2012.

Term Loans

The Company maintains a $500 million collateralized term loan (the “Secured Term Loan”) with a syndicate of financial institutions, for which KeyBank National Association serves as the administrative agent. The Secured Term Loan has an accordion feature for expansion up to $600 million upon the Company’s request, provided that new or existing lenders agree to the existing terms of the facility and increase their commitment level. The Secured Term Loan matures in September 2014 with a one-year extension option. Borrowings under the Secured Term Loan bear interest at variable rates based on LIBOR, as defined in the loan agreement, plus a specified spread based on the Company’s long-term senior unsecured debt rating (1.7% at March 31, 2012). The collateral for the Secured Term Loan is real estate assets, or investment interests in certain assets, that are already encumbered by first mortgage loans. The Company is required to comply with covenants similar to those contained in the Revolving Credit Facilities. The Company was in compliance with these covenants at March 31, 2012.

In January 2012, the Company entered into a $250 million unsecured term loan (the “Unsecured Term Loan” and together with the Secured Term Loan, the “Term Loans”) with a syndicate of financial institutions, for which Wells Fargo Bank National Association serves as the administrative agent. The Unsecured Term Loan consists of a $50 million tranche that matures on January 31, 2017, and a $200 million tranche that matures on January 31, 2019. The Unsecured Term Loan bears interest at variable rates based on LIBOR, as defined in the loan agreement, plus a specified spread based on the Company’s long-term senior unsecured debt rating (1.7% and 2.1% for the two tranches, respectively, at March 31, 2012). The Company is required to comply with covenants similar to those contained in the Revolving Credit Facilities. The Company was in compliance with these covenants at March 31, 2012.

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7. SENIOR NOTES

During the three-month period ended March 31, 2012, the Company repurchased $25.5 million aggregate principal amount of its outstanding senior unsecured notes with a maturity date of March 2016 at a premium to par, resulting in a loss on debt retirement of $5.6 million.

8. FINANCIAL INSTRUMENTS

Cash Flow and Fair Value Hedges

In January 2012, the Company entered into interest rate swaps with an aggregate notional amount of $200.0 million. These swaps were executed to hedge a portion of interest rate risk associated with variable-rate borrowings.

Measurement of Fair Value

At March 31, 2012, the Company used pay-fixed interest rate swaps to manage its exposure to changes in benchmark interest rates (the “Swaps”). The estimated fair values of derivative financial instruments are valued using widely accepted valuation techniques including discounted cash flow analysis on the expected cash flows of each derivative. This analysis reflects the contractual terms of the derivatives, including the period to maturity, and uses observable market-based inputs, including interest rate curves and volatility. The fair values of interest rate swaps and caps are estimated using the market standard methodology of netting the discounted fixed cash payments and the discounted expected variable cash receipts. The variable cash receipts are based on an expectation of interest rates (forward curves) derived from observable market interest rate curves. In addition, credit valuation adjustments, which consider the impact of any credit enhancements to the contracts, are incorporated in the fair values to account for potential nonperformance risk, including the Company’s own nonperformance risk and the respective counterparty’s nonperformance risk. The Company determined that the significant inputs used to value its derivatives fell within Level 2 of the fair value hierarchy.

- 16 -

Items Measured at Fair Value on a Recurring Basis

The following table presents information about the Company’s financial assets and liabilities, which consist of interest rate swap agreements (included in Other Liabilities) and marketable securities (included in Other Assets) from investments in the Company’s elective deferred compensation plan at March 31, 2012, measured at fair value on a recurring basis as of March 31, 2012, and indicates the fair value hierarchy of the valuation techniques used by the Company to determine such fair value (in millions):


	Fair Value Measurement at March 31, 2012
	Level 1		Level 2			Level 3		Total
Assets (liabilities):
Derivative financial instruments	$	—	$	(7.5	)	$	—	$	(7.5	)
Marketable securities	$	3.0	$	—		$	—	$	3.0

The unrealized gain of $1.3 million included in other comprehensive (loss) income (“OCI”) is attributable to the net change in unrealized gains related to derivative liabilities that remain outstanding at March 31, 2012, none of which were reported in the Company’s condensed consolidated statements of operations because they are documented and qualify as hedging instruments.

Other Fair Value Instruments

Investments in unconsolidated joint ventures are considered financial assets. See discussion of fair value consideration in Note 12.

Cash and Cash Equivalents, Restricted Cash, Accounts Receivable, Accounts Payable, Accrued Expenses and Other Liabilities

The carrying amounts reported in the condensed consolidated balance sheets for these financial instruments approximated fair value because of their short-term maturities. The fair value of cash and cash equivalents and restricted cash are classified as Level 1 in the fair value hierarchy.

Notes Receivable and Advances to Affiliates

The fair value is estimated using a discounted cash flow, in which the Company used unobservable inputs such as market interest rates determined by the loan to value and market capitalization rate at which management believes similar loans would be made and classified as Level 3 in the fair value hierarchy. The fair value of these notes was approximately $93.4 million and $90.6 million at March 31, 2012 and December 31, 2011, respectively, as compared to the carrying amounts of $91.9 million and $91.0 million, respectively. The carrying value of the TIF bonds, which was $6.5 million and $6.4 million at March 31, 2012 and December 31, 2011, respectively, approximated their fair value as of both periods.

- 17 -

Debt

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

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

Debt instruments at March 31, 2012 and December 31, 2011, with carrying values that are different than estimated fair values, are summarized as follows (in thousands):


	March 31, 2012				December 31, 2011
	Carrying Amount		Fair Value		Carrying Amount		Fair Value
Senior notes	$	1,938,255	$	2,181,764	$	2,139,718	$	2,282,818
Revolving Credit Facilities and Term Loans		825,968		824,073		642,421		641,854
Mortgage payable and other indebtedness		1,372,694		1,406,107		1,322,445		1,352,142

	$	4,136,917	$	4,411,944	$	4,104,584	$	4,276,814

Risk Management Objective of Using Derivatives

The Company is exposed to certain risks arising from both its business operations and economic conditions. The Company principally manages its exposures to a wide variety of business and operational risks through management of its core business activities. The Company manages economic risks, including interest rate, liquidity and credit risk, primarily by managing the amount, sources and duration of its debt funding and, from time to time, the use of derivative financial instruments. Specifically, the Company enters into derivative financial instruments to manage exposures that arise from business activities that result in the receipt or payment of future known and uncertain cash amounts, the values of which are determined by interest rates. The Company’s derivative financial instruments are used to manage differences in the amount, timing and duration of the Company’s known or expected cash receipts and its known or expected cash payments principally related to the Company’s investments and borrowings.

- 18 -

Cash Flow Hedges of Interest Rate Risk

The Company’s objectives in using interest rate derivatives are to manage its exposure to interest rate movements. To accomplish this objective, the Company generally uses interest rate swaps as part of its interest rate risk management strategy. Swaps designated as cash flow hedges involve the receipt of variable-rate amounts from a counterparty in exchange for the Company making fixed-rate payments over the life of the agreements without exchange of the underlying notional amount. As of March 31, 2012 and December 31, 2011, the aggregate fair value of the Company’s $383.8 million and $284.1 million notional amount of Swaps was a liability of $7.5 million and $8.8 million, respectively, which is included in other liabilities in the condensed consolidated balance sheets. The following table discloses certain information regarding the Company’s six interest rate swaps (not including the specified spreads):


Aggregate Notional Amount (in millions)	LIBOR Fixed Rate			Maturity Date
$100.0		1.0	%	June 2014
$ 83.8		2.8	%	September 2017
$100.0		1.6	%	February 2019
$100.0		1.5	%	February 2019

All components of the Swaps were included in the assessment of hedge effectiveness. The Company expects that within the next 12 months it will reflect an increase to interest expense (and a corresponding decrease to earnings) of approximately $5.0 million.

The effective portion of changes in the fair value of derivatives designated and that qualify as cash flow hedges is recorded in accumulated OCI and is subsequently reclassified into earnings in the period that the hedged forecasted transaction affects earnings. During 2012, such derivatives were used to hedge the forecasted variable cash flows associated with existing obligations. The ineffective portion of the change in the fair value of derivatives is recognized directly in earnings. During the three-month periods ended March 31, 2012 and 2011, the amount of hedge ineffectiveness recorded was not material.

Amounts reported in accumulated other comprehensive (loss) income related to derivatives will be reclassified to interest expense as interest payments are made on the Company’s variable-rate debt. The table below presents the fair value of the Company’s Swaps as well as their classification on the condensed consolidated balance sheets as of March 31, 2012 and December 31, 2011, as follows (in millions):

Liability Derivatives

March 31, 2012

December 31, 2011

Derivatives Designated as

Hedging Instruments

Balance Sheet
Location

Fair
Value

Balance Sheet
Location

Fair
Value

Interest rate products

Other liabilities

7.5

Other liabilities

8.8

- 19 -

The effect of the Company’s derivative instruments on net (loss) and income is as follows (in millions):


Derivatives in Cash Flow Hedging	Amount of (Loss) Gain Recognized in OCI on Derivatives (Effective Portion)					Location of (Loss) Gain Reclassified from Accumulated OCI into Income (Loss) (Effective Portion)		Amount of (Loss) Gain Reclassified from Accumulated OCI into (Income) Loss (Effective Portion)
	Three-Month Periods Ended March 31,							Three-Month Periods Ended March 31,
	2012		2011					2012			2011
Interest rate products	$	1.3	$	(1.6	)		Interest expense	$	(0.1	)	$	—

The Company is exposed to credit risk in the event of non-performance by the counterparties to the Swaps. The Company believes it mitigates its credit risk by entering into swaps with major financial institutions. The Company continually monitors and actively manages interest costs on its variable-rate debt portfolio and may enter into additional interest rate swap positions or other derivative interest rate instruments based on market conditions. The Company has not entered, and does not plan to enter, into any derivative financial instruments for trading or speculative purposes.

Credit-Risk-Related Contingent Features

The Company has agreements with each of its Swap counterparties that contain a provision whereby if the Company defaults on certain of its unsecured indebtedness, the Company could also be declared in default on its Swaps, resulting in an acceleration of payment under the Swaps.

Net Investment Hedges

The Company is exposed to foreign exchange risk from its consolidated and unconsolidated international investments. The Company has foreign currency-denominated debt agreements that expose the Company to fluctuations in foreign exchange rates. The Company has designated these foreign currency borrowings as a hedge of its net investment in its Canadian and European subsidiaries. Changes in the spot rate value are recorded as adjustments to the debt balance with offsetting unrealized gains and losses recorded in OCI. Because the notional amount of the non-derivative instrument substantially matches the portion of the net investment designated as being hedged, and the non-derivative instrument is denominated in the functional currency of the hedged net investment, the hedge ineffectiveness recognized in earnings was not material.

- 20 -

The effect of the Company’s net investment hedge derivative instruments on OCI is as follows (in millions):


	Amount of Gain (Loss) Recognized in OCI on Derivatives (Effective Portion)
	Three-Month Periods Ended March 31,
Derivatives in Net Investment Hedging Relationships	2012			2011
Euro-denominated revolving credit facilities designated as a hedge of the Company’s net investment in its subsidiary	$	(0.1	)	$	(2.7	)

Canadian dollar-denominated revolving credit facilities designated as a hedge of the Company’s net investment in its subsidiaries	$	(1.3	)	$	(2.9	)

9. COMMITMENTS AND CONTINGENCIES

Legal Matters

The Company is a party to various joint ventures with the Coventry II Fund, through which 11 existing or proposed retail properties, along with a portfolio of former Service Merchandise locations, were acquired at various times from 2003 through 2006. The properties were acquired by the joint ventures as value-add investments, with major renovation and/or ground-up development contemplated for many of the properties. The Company was generally responsible for day-to-day management of the properties through December 2011. On November 4, 2009, Coventry Real Estate Advisors L.L.C., Coventry Real Estate Fund II, L.L.C. and Coventry Fund II Parallel Fund, L.L.C. (collectively, “Coventry”) filed suit against the Company and certain of its affiliates and officers in the Supreme Court of the State of New York, County of New York. The complaint alleges that the Company: (i) breached contractual obligations under a co-investment agreement and various joint venture limited liability company agreements, project development agreements and management and leasing agreements; (ii) breached its fiduciary duties as a member of various limited liability companies; (iii) fraudulently induced the plaintiffs to enter into certain agreements; and (iv) made certain material misrepresentations. The complaint also requests that a general release made by Coventry in favor of the Company in connection with one of the joint venture properties be voided on the grounds of economic duress. The complaint seeks compensatory and consequential damages in an amount not less than $500 million, as well as punitive damages. In response, the Company filed a motion to dismiss the complaint or, in the alternative, to sever the plaintiffs’ claims. In June 2010, the court granted in part the Company’s motion, dismissing Coventry’s claim that the Company breached a fiduciary duty owed to Coventry (and denying the motion as to the other claims). Coventry filed a notice of appeal regarding that portion of the motion granted by the court. The appeals court affirmed the trial court’s ruling regarding the dismissal of Coventry’s claim for breach of fiduciary duty. The Company filed an answer to the complaint, and has asserted various counterclaims against Coventry. On October 10, 2011, the Company filed a motion for summary judgment, seeking dismissal of all of Coventry’s remaining claims. The motion is currently pending before the court.

- 21 -

The Company believes that the allegations in the lawsuit are without merit and that it has strong defenses against this lawsuit. The Company will continue to vigorously defend itself against the allegations contained in the complaint. This lawsuit is subject to the uncertainties inherent in the litigation process and, therefore, no assurance can be given as to its ultimate outcome and no loss provision has been recorded in the accompanying financial statements because a loss contingency is not deemed probable or estimable. However, based on the information presently available to the Company, the Company does not expect that the ultimate resolution of this lawsuit will have a material adverse effect on the Company’s financial condition, results of operations or cash flows.

On November 18, 2009, the Company filed a complaint against Coventry in the Court of Common Pleas, Cuyahoga County, Ohio, seeking, among other things, a temporary restraining order enjoining Coventry from terminating “for cause” the management agreements between the Company and the various joint ventures because the Company believes that the requisite conduct in a “for-cause” termination (i.e., fraud or willful misconduct committed by an executive of the Company at the level of at least senior vice president) did not occur. The court heard testimony in support of the Company’s motion (and Coventry’s opposition) and, on December 4, 2009, issued a ruling in the Company’s favor. Specifically, the court issued a temporary restraining order enjoining Coventry from terminating the Company as property manager “for cause.” The court found that the Company was likely to succeed on the merits, that immediate and irreparable injury, loss or damage would result to the Company in the absence of such restraint, and that the balance of equities favored injunctive relief in the Company’s favor. The Company filed a motion for summary judgment seeking a ruling by the Court that there was no basis for Coventry’s “for cause” termination as a matter of law. On August 2, 2011, the court entered an order granting the Company’s motion for summary judgment in all respects, finding that, as a matter of law and fact, Coventry did not have the right to terminate the management agreements “for cause”. Coventry filed a notice of appeal, and on March 15, 2012, the Ohio Court of Appeals issued an opinion and order unanimously affirming the trial court’s ruling.

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

10. EQUITY

Common Shares

In January 2012, the Company entered into forward sale agreements with respect to 18,975,000 of its common shares at an initial price to the Company of $12.432 per share. Subject to the Company’s right to elect cash or net share settlement, the Company expects to physically settle the forward sale agreements on or about June 29, 2012. The Company expects to use the net proceeds to fund its investment in the joint venture with an affiliate of Blackstone and for other corporate purposes.

Common share dividends declared were $0.12 and $0.04 per share for the three-month periods ended March 31, 2012 and 2011, respectively.

- 22 -

11. FEE AND OTHER INCOME

Fee and other income from continuing operations was composed of the following (in millions):


	Three-Month Periods Ended March 31,
	2012		2011
Management, development, financing and other fee income	$	11.7	$	12.2
Ancillary and other property income		6.2		6.9
Lease termination fees		0.5		0.6
Other miscellaneous		0.1		0.1

Total fee and other income	$	18.5	$	19.8

12. IMPAIRMENT CHARGES

The Company recorded impairment charges during the three-month periods ended March 31, 2012 and 2011, based on the difference between the carrying value of the assets or investments and the estimated fair market value (in millions):


	Three-Month Periods Ended March 31,
	2012		2011
Undeveloped land ^(A)	$	—	$	3.8
Assets marketed for sale ^(A)		13.5		—

Total continuing operations	$	13.5	$	3.8

Sold assets or assets held for sale		3.8		2.0

Total discontinued operations	$	3.8	$	2.0
Joint venture investments		0.6		—

Total impairment charges	$	17.9	$	5.8

(A)	The impairment charges were triggered primarily due to the Company’s marketing of these assets for sale and management’s assessment as to the likelihood and timing of a potential transaction.

- 23 -

Items Measured at Fair Value on a Non-Recurring Basis

For a description of the Company’s methodology on determining fair value, refer to Note 11 of the Company’s Financial Statements filed on its Annual Report on Form 10-K for the year ended December 31, 2011.

The following table presents information about the Company’s impairment charges on both financial and nonfinancial assets that were measured on a fair value basis for the three-month period ended March 31, 2012. The table also indicates the fair value hierarchy of the valuation techniques used by the Company to determine such fair value (in millions):


	Fair Value Measurement at March 31, 2012
	Level 1		Level 2		Level 3		Total		Total Losses
Long-lived assets — held and used and held for sale	$	—	$	—	$	28.7	$	28.7	$	17.3
Unconsolidated joint venture investments		—		—		4.7		4.7		0.6

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


	Quantitative Information about Level 3 Fair Value Measurements
	Fair Value at 3/31/12		Valuation Technique	Unobservable Input	Range (Weighted Average)
Impairment of consolidated assets	$	20.5	Indicative Bid	Indicative Bid	N/A ^(A)
Impairment of consolidated assets — Held for Sale		8.2	Contracted Price	Contracted Price	N/A ^(A)
Impairment of joint venture investments		4.7	Income Capitalization Approach	Market Capitalization Rate	8 % ^(B)

(A)	These fair value measurements were developed by third party sources, subject to our corroboration for reasonableness.

(B)	The fair value measurements also includes consideration of the fair market value of debt. These inputs are further described in the debt section of Note 8.

13. DISCONTINUED OPERATIONS

The Company sold six properties during the three-month period ended March 31, 2012 and had four properties held for sale at March 31, 2012. In addition, the Company sold 34 properties in 2011. These asset sales are included in discontinued operations for the three-month periods ended March 31, 2012 and 2011. The balance sheet related to the assets held for sale and the operating results related to assets sold or designated as held for sale as of March 31, 2012, are as follows (in thousands):

- 24 -


	March 31, 2012
Land	$	2,549
Buildings		22,577
Fixtures and tenant improvements		3,211
Land held for development and construction in progress		22

		28,359
Less: Accumulated depreciation		(20,334	)

Total assets held for sale	$	8,025


	Three-Month Periods Ended March 31,
	2012			2011
Revenues	$	1,370		$	11,039

Operating expenses		735			4,329
Impairment charges		3,854			1,983
Interest, net		142			3,039
Depreciation and amortization		289			3,017

		5,020			12,368

Loss before disposition of real estate		(3,650	)		(1,329	)
Gain on disposition of real estate, net of tax		70			244

Loss from discontinued operations	$	(3,580	)	$	(1,085	)

14. TRANSACTIONS WITH RELATED PARTIES

In the first quarter of 2012, the Company’s consolidated joint venture in Russia sold its investment in a development project in Yaroslavl, Russia. In connection with the sale, an affiliate of the Company’s joint venture partner entered into certain leasing and management agreements with the buyer of the land and will receive fees for its services.

15. EARNINGS PER SHARE

The Company’s unvested restricted share units contain rights to receive nonforfeitable dividends, and thus are participating securities requiring the two-class method of computing earnings per share (“EPS”). Under the two-class method, EPS is computed by dividing the sum of distributed earnings to common shareholders and undistributed earnings allocated to common shareholders by the weighted average number of common shares outstanding for the period. In applying the two-class method, undistributed earnings are allocated to both common shares and participating securities based on the weighted average shares outstanding during the period. The following table provides a reconciliation of net (loss) income from continuing operations and the number of common shares used in the computations of “basic” EPS, which utilizes the weighted-average number of common shares outstanding without regard to dilutive potential common shares, and “diluted” EPS, which includes all such shares (in thousands, except per share amounts):

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	Three-Month Periods Ended March 31,
	2012			2011
Basic Earnings:
Continuing Operations:
(Loss) income from continuing operations	$	(11,966	)	$	37,325
Plus: Gain (loss) on disposition of real estate		665			(861	)
Plus: Loss attributable to non-controlling interests		(176	)		(67	)

(Loss) income from continuing operations attributable to DDR		(11,477	)		36,397
Preferred dividends		(6,967	)		(10,567	)

Basic — (Loss) income from continuing operations attributable to DDR common shareholders		(18,444	)		25,830
Less: Earnings attributable to unvested shares and operating partnership units		(292	)		(224	)

Basic — (Loss) income from continuing operations	$	(18,736	)	$	25,606

Discontinued Operations:
Basic — Loss from discontinued operations		(3,580	)		(1,085	)

Basic — Net (loss) income attributable to DDR common shareholders after allocation to participating securities	$	(22,316	)	$	24,521


Diluted Earnings:
Continuing Operations:
Basic — (Loss) income from continuing operations	$	(18,736	)	$	25,606
Less: Fair value of Otto Family warrants		—			(21,926	)

Diluted — (Loss) income from continuing operations		(18,736	)		3,680

Discontinued Operations:
Basic — Loss from discontinued operations		(3,580	)		(1,085	)

Diluted — Net (loss) income attributable to DDR common shareholders after allocation to participating securities	$	(22,316	)	$	2,595

Number of Shares:
Basic — Average shares outstanding		275,214			255,966
Effect of dilutive securities:
Warrants		—			4,840
Stock options		—			558
Value sharing equity program		—			1,198
Forward equity agreement		—			19

Diluted — Average shares outstanding		275,214			262,581

Basic Earnings Per Share:
(Loss) income from continuing operations attributable to DDR common shareholders	$	(0.07	)	$	0.10
Loss from discontinued operations attributable to DDR common shareholders		(0.01	)		—

Net (loss) income attributable to DDR common shareholders	$	(0.08	)	$	0.10

Dilutive Earnings Per Share:
(Loss) income from continuing operations attributable to DDR common shareholders	$	(0.07	)	$	0.01
Loss from discontinued operations attributable to DDR common shareholders		(0.01	)		—

Net (loss) income attributable to DDR common shareholders	$	(0.08	)	$	0.01

The following potentially dilutive securities are considered in the calculation of EPS as described below:

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Potentially dilutive Securities:

•

Warrants to purchase 10.0 million common shares issued in 2009 and exercised in March 2011 were dilutive for the three-month period ended March 31, 2011, and are included in the calculation of diluted EPS.

•

Options to purchase 2.9 million and 3.4 million common shares were outstanding at March 31, 2012 and 2011, respectively. These outstanding options were not considered in the computation of diluted EPS for the three-month period ended March 31, 2012, as the options were anti-dilutive due to the Company’s loss from continuing operations. These outstanding options were considered in the computation of diluted EPS for the three-month period ended March 31, 2011.

•

Shares subject to issuance under the Company’s value sharing equity program were not considered in the computation of diluted EPS for the three-month period ended March 31, 2012, as they were anti-dilutive due to the Company’s loss from continuing operations. These shares were considered in the computation of diluted EPS for the three-month period ended March 31, 2011.

•

The 18,975,000 common shares that were subject to the forward equity agreements entered into in January 2012 were not included in the computation of diluted EPS using the treasury stock method for the three-month period ended March 31, 2012, as they were anti-dilutive due to the Company’s loss from continuing operations. The Company expects to physically settle the forward sale agreements on or about June 29, 2012. The forward equity agreement entered into in March 2011 for 9.5 million common shares was included in the computation of diluted EPS using the treasury stock method for the three-month period ended March 31, 2011. These shares were issued in April 2011.

•

The exchange into common shares associated with operating partnership units was not included in the computation of diluted shares outstanding for all periods presented because the effect of assuming conversion was anti-dilutive.

•

The Company’s senior convertible notes due 2040, which are convertible into common shares of the Company with a conversion price of $16.08 at March 31, 2012, were not included in the computation of diluted EPS for the three-month periods ended March 31, 2012 and 2011, because the Company’s common share price did not exceed the conversion price of the conversion features in these periods and would therefore be anti-dilutive. The Company’s senior convertible notes due 2012 and 2011, which were convertible into common shares of the Company, were not included in the computation of diluted EPS for all periods presented because the Company’s common share price did not exceed the conversion prices of the conversion features in these periods and would therefore be anti-dilutive. The senior convertible notes due 2012 were repaid at maturity in March 2012 and the senior convertible notes due 2011 were repaid at maturity in August 2011. In addition, the purchased options related to these two senior convertible notes issuances were not included in the computation of diluted EPS for all periods presented as the purchase options were anti-dilutive.

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16. SEGMENT INFORMATION

The Company has three reportable operating segments: shopping centers, Brazil equity investment and other investments. Each consolidated shopping center is considered a separate operating segment; however, each shopping center on a stand-alone basis represents less than 10% of the revenues, profit or loss, and assets of the combined reported operating segment and meets the majority of the aggregation criteria under the applicable standard. The following table summarizes the Company’s shopping centers and office properties. The table excludes those assets held for sale and includes those assets located in Brazil:


	March 31,
	2012		2011
Shopping centers owned		420		476
Unconsolidated joint ventures		172		191
Consolidated joint ventures		2		3
States ^(A)		38		41
Office properties		4		5
States		2		3

(A)	Excludes shopping centers owned in Puerto Rico and Brazil.

The tables below present information about the Company’s reportable operating segments reflecting the impact of discontinued operations (Note 13) (in thousands):


	Three-Month Period Ended March 31, 2012
	Other Investments			Shopping Centers			Brazil Equity Investment		Other			Total
Total revenues	$	1,131		$	194,240							$	195,371
Operating expenses		(500	)		(72,919	) ^(A)							(73,419	)

Net operating income		631			121,321								121,952
Unallocated expenses ^(B)									$	(141,606	)		(141,606	)
Equity in net (loss) income of joint ventures					(659	)	$	8,907					8,248
Impairment of joint venture investments													(560	)

Loss from continuing operations												$	(11,966	)

Total gross real estate assets	$	47,511		$	8,234,810							$	8,282,321

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	Three-Month Period Ended March 31, 2011
	Other Investments			Shopping Centers			Brazil Equity Investment		Other			Total
Total revenues	$	1,306		$	190,965							$	192,271
Operating expenses		(422	)		(64,134	) ^(A)							(64,556	)

Net operating income		884			126,831								127,715
Unallocated expenses ^(B)									$	(92,329	)		(92,329	)
Equity in net (loss) income of joint ventures					(2,978	)	$	4,952					1,974
Impairment of joint venture investments													(35	)

Income from continuing operations												$	37,325

Total gross real estate assets	$	47,762		$	8,448,981							$	8,496,743

(A)	Includes impairment charges of $13.5 million and $3.8 million for the three-month periods ended March 31, 2012 and 2011, respectively.

(B)	Unallocated expenses consist of general and administrative, depreciation and amortization, other income/expense, gain on change of control of interests and tax benefit/expense as listed in the condensed consolidated statements of operations.

17. SUBSEQUENT EVENTS

In April 2012, the Company acquired its unconsolidated joint venture partners’ 50% ownership interest in two prime power centers located in Portland, Oregon, and Phoenix, Arizona, for $70.0 million in the aggregate. The Company funded its $70.0 million investment with proceeds from the issuance of 4.8 million common shares at an average price of $14.64 through its at-the-market common equity program. At closing, approximately $104 million of mortgage debt was repaid.

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Item 2.

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Management’s Discussion and Analysis of Financial Condition and Results of Operations (“MD&A”) provides readers with a perspective from management on the Company’s financial condition, results of operations, liquidity and other factors that may affect the Company’s future results. The Company believes it is important to read the MD&A in conjunction with its Annual Report on Form 10-K for the year ended December 31, 2011, as well as other publicly available information.

Executive Summary

The Company is a self-administered and self-managed Real Estate Investment Trust (“REIT”) in the business of owning, managing and developing a portfolio of shopping centers. As of March 31, 2012, the Company’s portfolio consisted of 420 shopping centers (including 172 shopping centers owned through unconsolidated joint ventures and two shopping centers that are otherwise consolidated by the Company) in which the Company had an economic interest and four office properties. These properties consist of shopping centers, lifestyle centers and enclosed malls owned in the United States, Puerto Rico and Brazil. At March 31, 2012, the Company owned and/or managed more than 119 million total square feet of gross leasable area (“GLA”), which includes all of the aforementioned properties and 49 properties managed by the Company (46 of these properties are expected to be acquired by the Company through a 5% common interest in an unconsolidated joint venture in 2012). At March 31, 2012, the aggregate occupancy of the Company’s operating shopping center portfolio in which the Company has an economic interest was 89.8%, as compared to 88.1% at March 31, 2011. The average annualized base rent per occupied square foot was $14.08 at March 31, 2012, as compared to $13.16 at March 31, 2011. The Company owned 476 shopping centers and five office properties at March 31, 2011.

Net loss applicable to DDR common shareholders for the three-month period ended March 31, 2012, was $22.0 million, or $0.08 per share (basic and diluted), compared to net income applicable to DDR common shareholders of $24.7 million, or $0.01 per share diluted and $0.10 per share basic, for the prior-year comparable period. Funds from operations applicable to DDR common shareholders (“FFO”) for the three-month period ended March 31, 2012, was $59.7 million compared to $93.0 million for the prior-year comparable period. The increase in net loss applicable to DDR common shareholders and the corresponding decrease in FFO applicable to DDR common shareholders for the three-month period ended March 31, 2012, was primarily due to income recorded in the first quarter of 2011 as a result of the gain on change in control of interests related to the Company’s acquisition of two assets from unconsolidated joint ventures, the effect of the valuation adjustments associated with the warrants that were exercised in full for cash in the first quarter of 2011 and the loss on debt extinguishment related to the Company’s repurchase of a portion of its 9.625% senior unsecured notes due 2016 in the first quarter of 2012.

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First Quarter 2012 Operating Results

During the first quarter of 2012, the Company continued to pursue opportunities to position DDR for long-term growth while also lowering the Company’s risk profile and cost of capital. The Company continued making progress on its balance sheet initiatives; strengthening the operations of its Prime Portfolio and recycling capital from non-prime asset sales into the acquisition of prime assets (i.e., market-dominant shopping centers with high-quality tenants located in attractive markets with strong demographic profiles, “Prime Portfolio”) to improve portfolio quality. The Company continues to carefully consider opportunities that fit its selective acquisition requirements and remains prudent in its underwriting and bidding practices.

Significant first quarter 2012 transactional activity included the following:

•

Formed a new unconsolidated joint venture with The Blackstone Group L.P. (“Blackstone”) which is expected to acquire 46 shopping centers in the second quarter of 2012 that had previously been managed but not owned by the Company;

•

Entered into forward equity agreements to sell 19 million shares for expected gross proceeds of $246 million to fund the Company’s share of the Blackstone joint venture and other general corporate purposes. The Company expects the settlement of the forward sale agreements to be on or about June 29, 2012;

•

Completed a $47.4 million acquisition of a major metropolitan area 561,000 square foot prime shopping center;

•

Completed $44.8 million of non-prime asset sales, of which DDR’s pro-rata share of the proceeds was $34.0 million; and

•

Completed $353 million of new long-term financings with an average interest rate of 3.3% and average duration of 6.6 years.

In January 2012, the Company announced another increase in its quarterly common share dividend to $0.12 per share from $0.04 per share in the first quarter of 2011. This increase still allows the Company to retain free cash flow, yet reflects the Company’s execution of its long-term strategies.

The Company continued its improvement in operating performance and internal growth in the first quarter of 2012 as evidenced by the number of leases executed during the quarter and the continued upward trend in average rental rates. The Company leased more than 3.3 million square feet in the first quarter of 2012, including managed assets, which is a 14% increase over the fourth quarter of 2011. This included 2.3 million square feet of renewals which set a Company record and the Company believes is directly attributable to the quality of the portfolio combined with a supply-constrained environment. The Company believes first-year rents on new leases provide a solid indicator of leasing trends, and the average first-year rent for all new leases executed in the first quarter of 2012 was $13.82 per square foot. The Company increased its total portfolio average annualized base rent per square foot to $14.08. The weighted-average cost of tenant improvements and lease commissions estimated to be incurred for leases executed during the first three months of 2012 remained low at $2.89 per rentable square foot over the lease term.

- 31 -

Results of Operations

Continuing Operations

Shopping center properties owned as of January 1, 2011, but excluding properties under development or redevelopment and those classified in discontinued operations, are referred to herein as the “Comparable Portfolio Properties.”

Revenues from Operations (in thousands)


	Three-Month Periods Ended March 31,
	2012		2011		$ Change			% Change
Base and percentage rental revenues ^(A)	$	133,472	$	128,488	$	4,984			3.9	%
Recoveries from tenants ^(B)		43,365		44,014		(649	)		(1.5	)%
Fee and other income ^(C)		18,534		19,769		(1,235	)		(6.2	)%

Total revenues	$	195,371	$	192,271	$	3,100			1.6	%

(A)	The increase is due to the following (in millions):


	Increase (Decrease)
Comparable Portfolio Properties	$	0.8
Acquisition of shopping centers		4.8
Development or redevelopment properties		(0.7	)
Straight-line rents		0.1

	$	5.0

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


	Shopping Center Portfolio ⁽¹⁾						Office Property Portfolio
	March 31,						March 31,
	2012			2011			2012			2011
Centers owned		420			476			4			5
Aggregate occupancy rate		89.8	%		88.1	%		90.4	%		82.4	%
Average annualized base rent per occupied square foot	$	14.08		$	13.16		$	13.04		$	11.10

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	Wholly-Owned Shopping Centers						Joint Venture Shopping Centers ⁽¹⁾
	March 31,						March 31,
	2012			2011			2012			2011
Centers owned		246			282			172			191
Centers owned through Consolidated joint ventures		n/a			n/a			2			3
Aggregate occupancy rate		89.5	%		87.9	%		90.3	%		88.5	%
Average annualized base rent per occupied square foot	$	12.61		$	12.10		$	16.13		$	14.54

⁽¹⁾

In 2012, excludes shopping centers owned through the Company’s joint venture with Coventry Real Estate Fund II (“Coventry II Fund”) which are no longer managed by the Company and in which the Company’s investment basis is not material. In 2011, excludes shopping centers owned by unconsolidated joint ventures in which the Company’s investment basis is zero and in which the Company is receiving no allocation of income or loss, which includes certain Coventry II Fund investments.

(B)	Recoveries were approximately 86.7% and 87.3% of reimbursable operating expenses and real estate taxes for the three-month periods ended March 31, 2012 and 2011, respectively.

(C)	Composed of the following (in millions):


	Three-Month Periods Ended March 31,
	2012		2011		(Decrease) Increase
Management, development, financing and other fee income	$	11.7	$	12.2	$	(0.5	)
Ancillary and other property income		6.2		6.9		(0.7	)
Lease termination fees		0.5		0.6		(0.1	)
Other miscellaneous		0.1		0.1		—

	$	18.5	$	19.8	$	(1.3	)

The decrease in management development, financing and other fee income in 2012 is largely the result of the expiration of the management contracts by their own terms with the Coventry II Fund as of December 31, 2011 (see Off-Balance Sheet Arrangements). These contracts generated approximately $2.3 million in gross fees related to the Company’s management, development and leasing of the assets in 2011. Additionally, in 2012, an affiliate of the Company entered into a joint venture agreement with an affiliate of Blackstone to acquire 46 assets managed by the Company in the periods presented. The Company does not anticipate any significant changes in management and leasing fee income to be earned related to these assets from the new joint venture as the Company manages these assets.

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Expenses from Operations (in thousands)


	Three-Month Periods Ended Mach 31,
	2012		2011		$ Change			% Change
Operating and maintenance ^(A)	$	34,343	$	35,479	$	(1,136	)		(3.2	)%
Real estate taxes ^(A)		25,559		25,221		338			1.3	%
Impairment charges ^(B)		13,517		3,856		9,661			250.5	%
General and administrative ^(C)		19,012		29,378		(10,366	)		(35.3	)%
Depreciation and amortization ^(A)		60,306		53,122		7,184			13.5	%

	$	152,737	$	147,056	$	5,681			3.9	%

(A)	The changes for the three-month period March 31, 2012 compared to 2011, are due to the following (in millions):


	Operating and Maintenance			Real Estate Taxes			Depreciation
Comparable Portfolio Properties	$	(0.6	)	$	(0.3	)	$	3.3
Acquisitions of shopping centers		0.5			0.8			4.0
Development or redevelopment properties		(1.0	)		(0.2	)		0.1
Personal property		—			—			(0.2	)

	$	(1.1	)	$	0.3		$	7.2

The increase in depreciation expense for the Comparable Portfolio Properties is attributable to accelerated depreciation charges from a change in the estimated life of certain assets that are expected to be redeveloped in future periods.

(B)

The Company recorded impairment charges during the three-month periods ended March 31, 2012 and 2011, related to its land and shopping center assets. These impairments are more fully described in Note 12, “Impairment Charges,” in the notes to the condensed consolidated financial statements included herein.

(C)

General and administrative expenses were approximately 4.7% and 7.1% of total revenues, including total revenues of unconsolidated joint ventures and managed properties and discontinued operations, for the three-month periods ended March 31, 2012 and 2011, respectively. The Company continues to expense certain internal leasing salaries, legal salaries and related expenses associated with leasing and re-leasing of existing space.

During the three-month period ended March 31, 2011, the Company recorded a charge of $10.7 million as a result of the termination without cause of its Executive Chairman of the Board, the terms of which were pursuant to his amended and restated employment agreement.

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Other Income and Expenses (in thousands)


	Three-Month Periods Ended March 31,
	2012			2011			$ Change			% Change
Interest income ^(A)	$	1,841		$	2,799		$	(958	)		(34.2	)%
Interest expense ^(B)		(56,746	)		(57,298	)		552			(1.0	)%
Loss on retirement of debt, net ^(C)		(5,602	)		—			(5,602	)		(100.0	)%
Gain on equity derivative instruments ^(D)		—			21,926			(21,926	)		(100.0	)%
Other (expense) income, net ^(E)		(1,602	)		1,341			(2,943	)		(219.5	)%

	$	(62,109	)	$	(31,232	)	$	(30,877	)		98.9	%

(A)	The weighted-average interest rate of loan receivables at March 31, 2012, was 7.6%. The decrease in the amount of interest income recognized is due to a decrease in the aggregate amount of notes receivable outstanding.

(B)	The weighted-average debt outstanding and related weighted-average interest rates, including amounts allocated to discontinued operations, are as follows:


	Three-Month Periods Ended March 31,
	2012			2011
Weighted-average debt outstanding (in billions)	$	4.2		$	4.3
Weighted-average interest rate		5.5	%		5.6	%

The weighted-average interest rate (based on contractual rates and excluded convertible debt accretion and deferred financing costs) at March 31, 2012 and 2011 was 5.0% and 5.1%, respectively.

Interest costs capitalized in conjunction with development and redevelopment projects and unconsolidated development and redevelopment joint venture interests were $3.1 million for the three-month period ended March 31, 2012, as compared to $3.0 million for the respective period in 2011. The Company ceases the capitalization of interest as assets are placed in service or upon the suspension of construction.

(C)	For the three-month period ended March 31, 2012, the Company repurchased $25.5 million of its 9.625% senior unsecured notes due 2016 at a premium to par value.

(D)

Represents the impact of the valuation adjustments for the equity derivative instruments issued as part of the stock purchase agreement with Mr. Alexander Otto and certain members of the Otto family. The valuation and resulting charges/gains primarily related to the difference between the closing trading value of the Company’s common shares from January 1, 2011, through March 18, 2011, the exercise date of the warrants. Because all of the warrants were exercised in March 2011, the Company no longer records the changes in fair value of these instruments in its earnings.

- 35 -

(E)	Other income (expenses) were composed of the following (in millions):


	Three-Month Periods Ended March 31,
	2012			2011
Litigation-related expenses	$	(0.7	)	$	(1.0	)
Debt extinguishment costs, net		(0.3	)		(0.2	)
Settlement of lease liability obligation		—			2.6
Transaction and other expenses		(0.6	)		(0.1	)

	$	(1.6	)	$	1.3

In 2010, the Company established a lease liability reserve in the amount of $3.3 million for three operating leases related to an abandoned development project and two office closures. The Company reversed $2.6 million of this previously recorded charge due to the termination of the ground lease related to the abandoned development project in the first quarter of 2011.

Other Items (in thousands)


	Three-Month Periods Ended March 31,
	2012			2011			$ Change			% Change
Equity in net income of joint ventures ^(A)	$	8,248		$	1,974		$	6,274			317.8	%
Impairment of joint venture investments		(560	)		(35	)		(525	)		1500.0	%
Gain on change in control of interests ^(B)		—			21,729			(21,729	)		(100.0	)%
Tax expense of taxable REIT subsidiaries and state franchise and income taxes		(179	)		(326	)		147			(45.1	)%

(A)

The increase in equity in net income of joint ventures for the three-month period ended March 31, 2012 compared to the prior-year period is primarily a result of higher income from the Company’s investment in Sonae Sierra Brasil as discussed below, combined with a $1.9 million loss on sale of a shopping center recorded in the first quarter of 2011.

At March 31, 2012 and 2011, the Company had an approximate 33% interest in an unconsolidated joint venture, Sonae Sierra Brasil, which owns real estate in Brazil and is headquartered in San Paulo, Brazil. This entity uses the functional currency of Brazilian reais. The Company has generally chosen not to mitigate any of the foreign currency risk through the use of hedging instruments for this entity. The operating cash flow generated by this investment has been generally retained by the joint venture and reinvested in ground-up developments and expansions in Brazil. The weighted-average exchange rate used for recording the equity in net income was 1.77 and 1.68 for the three-month periods ended March 31, 2012 and 2011, respectively. The overall increase in equity in net income from the Sonae Sierra Brasil joint venture, net of the impact of foreign currency translation, primarily is due to a gain recognized on the strategic asset swap of two assets in the portfolio, shopping center expansion activity coming on line as well as increases in parking revenue and ancillary income.

(B)

In the first quarter of 2011, the Company acquired its partners’ 50% interest in two shopping centers. The Company accounted for both of these transactions as step acquisitions. Due to the change in control that occurred, the Company recorded an aggregate net gain associated with these transactions related to the difference between the Company’s carrying value and fair value of the previously held equity interests.

- 36 -

Discontinued Operations (in thousands)


	Three-Month Periods Ended March 31,
	2012			2011			$ Change			% Change
Loss from discontinued operations ^(A)	$	(3,650	)	$	(1,329	)	$	(2,321	)		174.6	%
Gain on disposition of real estate, net of tax		70			244			(174	)		(71.3	)%

	$	(3,580	)	$	(1,085	)	$	(2,495	)		230.0	%

(A)

The Company sold six properties during the three-month period ended March 31, 2012, and had four properties held for sale at March 31, 2012, aggregating 1.0 million square feet. In addition, the Company sold 34 properties in 2011 aggregating 2.9 million square feet. In addition, included in the reported loss for the three-month periods ended March 31, 2012 and 2011, is $3.8 million and $2.0 million, respectively, of impairment charges related to assets classified as discontinued operations.

Gain on Disposition of Real Estate (in thousands)


	Three-Month Periods Ended March 31,
	2012		2011			$ Change		% Change
Gain (loss) on disposition of real estate, net ^(A)	$	665	$	(861	)	$	1,526		(177.2	)%

(A)	Amounts are generally attributable to the sale of land. The sales of land did not meet the criteria for discontinued operations because the land did not have any significant operations prior to disposition.

Non-Controlling Interests (in thousands)


	Three-Month Periods Ended March 31,
	2012			2011			$ Change			% Change
Non-controlling interests	$	(176	)	$	(67	)	$	(109	)		162.7	%

Net (Loss) Income (in thousands)


	Three-Month Periods Ended March 31,
	2012			2011		$ Change			% Change
Net (loss) income attributable to DDR	$	(15,057	)	$	35,312	$	(50,369	)		(142.6	)%

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The increase in net loss attributable to DDR for the three-month periods ended March 31, 2012 compared to the same period in 2011, primarily was due to income recorded in the first quarter of 2011 as a result of the gain on change in control of interests related to the Company’s acquisition of two assets from unconsolidated joint ventures, the effect of the valuation adjustments associated with the warrants that were exercised in full for cash in the first quarter of 2011 and the loss on debt extinguishment related to the Company’s repurchase of a portion of its 9.625% senior unsecured notes due 2016 in the first quarter of 2012.

A summary of changes in 2012 as compared to 2011 is as follows (in millions):


	Three-Month Period Ended March 31
Increase in net operating revenues (total revenues in excess of operating and maintenance expenses and real estate taxes)	$	3.9
Increase in consolidated impairment charges		(9.7	)
Decrease in general and administrative expenses ^(A)		10.4
Increase in depreciation expense		(7.2	)
Decrease in interest income		(1.0	)
Decrease in interest expense		0.5
Increase in loss on retirement of debt, net		(5.6	)
Decrease in gain on equity derivative instruments		(21.9	)
Change in other (expense) income, net		(2.9	)
Increase in equity in net income of joint ventures		6.3
Increase in impairment of joint venture investments		(0.5	)
Decrease in gain on change in control of interests		(21.7	)
Decrease in income tax expense		0.1
Increase in loss from discontinued operations		(2.5	)
Increase in gain on disposition of real estate		1.5
Change in non-controlling interests		(0.1	)

Increase in net loss attributable to DDR	$	(50.4	)

(A)	Included in general and administrative expenses is an executive separation charge of $10.7 million for the three-month period ended March 31, 2011.

Funds From Operations

Definition and Basis of Presentation

The Company believes that FFO, which is a non-GAAP financial measure, provides an additional and useful means to assess the financial performance of REITs. FFO is frequently used by securities analysts, investors and other interested parties to evaluate the performance of REITs, most of which present FFO along with net income as calculated in accordance with GAAP.

FFO excludes GAAP historical cost depreciation and amortization of real estate and real estate investments, which assume that the value of real estate assets diminishes ratably over time. Historically, however, real estate values have risen or fallen with market conditions, and many companies use different depreciable lives and methods. Because FFO excludes depreciation and amortization unique to real estate, gains and losses from depreciable property dispositions, and extraordinary items, it can provide a performance measure that, when compared year over year,

- 38 -

reflects the impact on operations from trends in occupancy rates, rental rates, operating costs, acquisition, disposition and development activities and interest costs. This provides a perspective of the Company’s financial performance not immediately apparent from net income determined in accordance with GAAP.

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

During 2008, due to the volatility and volume of significant charges and gains recorded in the Company’s operating results that the Company believes were not reflective of the Company’s core operating performance, management began computing Operating FFO and discussing it with the users of the Company’s financial statements, in addition to other measures such as net income/loss determined in accordance with GAAP as well as FFO. Operating FFO is generally calculated by the Company as FFO excluding certain charges and gains that management believes are not indicative of the results of the Company’s operating real estate portfolio. The disclosure of these charges and gains is regularly requested by users of the Company’s financial statements.

Operating FFO is a non-GAAP financial measure, and, as described above, its use combined with the required primary GAAP presentations has been beneficial to management in improving the understanding of the Company’s operating results among the investing public and making comparisons of other REITs’ operating results to the Company’s more meaningful. The adjustments may not be comparable to how other REITs or real estate companies calculate their results of operations, and the Company’s calculation of Operating FFO differs from NAREIT’s definition of FFO. The Company will continue to evaluate the usefulness and relevance of the reported non-GAAP measures, and such reported measures could change. Additionally, the Company provides no assurances that these charges and gains are non-recurring. These charges and gains could be reasonably expected to recur in future results of operations.

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

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

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

Reconciliation Presentation

For the three-month period ended March 31, 2012, FFO applicable to DDR common shareholders was $59.7 million, compared to $93.0 million for the same period in 2011. The decrease in FFO for the three-month period ended March 31, 2012, was primarily the result of the gain on change in control of interests related to the Company’s acquisition of two assets from unconsolidated joint ventures in the first quarter of 2011, the effect of the valuation adjustments associated with the warrants that were exercised in full for cash in the first quarter of 2011 and the loss on debt retirement related to the Company’s repurchase of a portion of its 9.625% senior unsecured notes due 2016 in the first quarter of 2012.

For the three-month period ended March 31, 2012, Operating FFO applicable to DDR common shareholders was $66.8 million, compared to $63.2 million for the same period in 2011. The increase in Operating FFO for the three-month period ended March 31, 2012, primarily was due to the acquisition of seven shopping center assets since January 2011 partially offset by asset dispositions as well as the redemption of preferred shares in the second quarter of 2011.

The Company’s reconciliation of net (loss) income applicable to DDR common shareholders, to FFO applicable to DDR common shareholders and Operating FFO applicable to common shareholders is as follows (in millions):

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	Three-Month Periods Ended March 31,
	2012			2011
Net (loss) income applicable to DDR common shareholders ^{(A), (B)}	$	(22.0	)	$	24.7
Depreciation and amortization of real estate investments		58.4			53.8
Equity in net income of joint ventures		(8.2	)		(1.9	)
Impairment of joint venture investments		0.6			—
Joint ventures’ FFO ^(C)		14.0			14.7
Impairment of depreciable real estate assets, net of non-controlling interests		17.3			2.0
Gain on disposition of depreciable real estate, net		(0.4	)		(0.3	)

FFO applicable to DDR common shareholders	$	59.7		$	93.0

Total non-operating items ^(D)		7.1			(29.8	)

Operating FFO applicable to DDR common shareholders	$	66.8		$	63.2

(A)	Includes the deduction of preferred dividends of $7.0 million and $10.6 million for the three-month periods ended March 31, 2012 and 2011, respectively.

(B)

Includes straight-line rental revenue of approximately $0.4 million and $0.3 million for the three-month periods ended March 31, 2012 and 2011, respectively (including discontinued operations). In addition, includes straight-line ground rent expense of approximately $0.3 million and $0.5 million for the three-month periods ended March 31, 2012 and 2011, respectively, (including discontinued operations).

(C)

At March 31, 2012 and 2011, the Company had an economic investment in unconsolidated joint venture interests relating to 172 and 191 operating shopping center properties, respectively. These joint ventures represent the investments in which the Company was recording its share of equity in net income or loss and, accordingly, FFO.

Joint ventures’ FFO is summarized as follows (in millions):


	Three-Month Periods Ended March 31,
	2012			2011
Net income (loss) attributable to unconsolidated joint ventures ⁽¹⁾	$	9.1		$	(3.9	)
Impairment of depreciable real estate assets		1.3			—
(Gain) loss on disposition of depreciable real estate, net		(13.7	)		0.9
Depreciation and amortization of real estate investments		45.3			47.8

FFO	$	42.0		$	44.8

FFO at DDR’s ownership interests ⁽²⁾	$	14.0		$	14.7

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(1)	Revenues for the three-month periods include the following (in millions):


	Three-Month Periods Ended March 31,
	2012		2011
Straight-line rents	$	0.9	$	0.6
DDR’s proportionate share		0.2		0.1

(2)	FFO at DDR ownership interests considers the impact of basis differentials.

(D)	Amounts are described below in the Operating FFO Adjustments section.

Operating FFO Adjustments

The Company’s adjustments to arrive at Operating FFO are composed of the following for the three-month periods ended March 31, 2012 and 2011 (in millions). The Company provides no assurances that these charges and gains are non-recurring. These charges and gains could be reasonably expected to recur in future results of operations.


	Three-Month Periods Ended March 31,
	2012			2011
Impairment charges – non-depreciable consolidated assets	$	—		$	3.8
Loss on debt retirement, net ^(A)		5.6			—
Other expense (income), net ^(C)		1.7			(1.3	)
Equity in net loss (income) of joint ventures – currency adjustments and other expenses		0.1			(0.4	)
(Gain) loss on disposition of non-depreciable real estate (land), net		(0.3	)		1.0
Executive separation charge ^(B)		—			10.7
Gain on equity derivative instruments (Otto Family warrants) ^(A)		—			(21.9	)
Gain on change in control of interests ^(A)		—			(21.7	)

Total non–operating items	$	7.1		$	(29.8	)
FFO applicable to DDR common shareholders		59.7			93.0

Operating FFO applicable to DDR common shareholders	$	66.8		$	63.2

(A)	Amount agrees to the face of the condensed consolidated statements of operations.

(B)	Amounts included in general and administrative expenses.

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(C)	Amounts included in other (income) expense in the condensed consolidated statements of operations and detailed as follows:


	For the Three-Month Periods Ended March 31,
	2012		2011
Litigation-expenditures	$	0.8	$	1.0
Debt extinguishment costs, net		0.3		0.2
Settlement gain of lease liability obligation		—		(2.6	)
Transaction and other		0.6		0.1

	$	1.7	$	(1.3	)

Liquidity and Capital Resources

The Company periodically evaluates opportunities to issue and sell additional debt or equity securities, obtain credit facilities from lenders, or repurchase, refinance or otherwise restructure long-term debt for strategic reasons or to further strengthen the financial position of the Company. In the first three months of 2012, the Company continued to strategically allocate cash flow from operating and financing activities.

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

The Company maintains an unsecured revolving credit facility with a syndicate of financial institutions, arranged by JP Morgan Securities, LLC and Wells Fargo Securities, LLC (the “Unsecured Credit Facility”). The Unsecured Credit Facility provides for borrowings of $750 million, and includes an accordion feature for expansion of availability to $1.25 billion upon the Company’s request, provided that new or existing lenders agree to the existing terms of the facility and increase their commitment level. The Company also maintains a $65 million unsecured revolving credit facility with PNC Bank, National Association (the “PNC Facility” and, together with the Unsecured Credit Facility, the “Revolving Credit Facilities”). The Company’s borrowings under these facilities bear interest at variable rates currently based on LIBOR plus 165 basis points, subject to adjustment based on the Company’s current corporate credit ratings from Moody’s Investors Service (“Moody’s”) and Standard and Poor’s (“S&P”).

The Revolving Credit Facilities and the indentures under which the Company’s senior and subordinated unsecured indebtedness is, or may be issued, contain certain financial and operating covenants including, among other things, leverage ratios and debt service coverage and fixed charge coverage ratios, as well as limitations on the Company’s ability to incur secured and unsecured indebtedness, sell all or substantially all of the Company’s assets and engage in mergers and certain acquisitions. These credit facilities and indentures also contain customary default provisions including the failure to make timely payments of principal and interest payable thereunder, the failure to comply with the Company’s financial and operating covenants, the occurrence of a material adverse effect on the Company and the failure of the Company or its majority-owned subsidiaries (i.e., entities in which

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the Company has a greater than 50% interest) to pay when due certain indebtedness in excess of certain thresholds beyond applicable grace and cure periods. In the event the Company’s lenders or note holders declare a default, as defined in the applicable agreements governing the debt, the Company may be unable to obtain further funding, and/or an acceleration of any outstanding borrowings may occur. As of March 31, 2012, the Company was in compliance with all of its financial covenants in the agreements governing its debt. Although the Company intends to operate in compliance with these covenants, if the Company were to violate these covenants, the Company may be subject to higher finance costs and fees or accelerated maturities. The Company believes that it will continue to be able to operate in compliance with these covenants for the remainder of 2012 and beyond.

Certain of the Company’s credit facilities and indentures permit the acceleration of the maturity of the underlying debt in the event certain other debt of the Company has been accelerated. Furthermore, a default under a loan by the Company or its affiliates, a foreclosure on a mortgaged property owned by the Company or its affiliates or the inability to refinance existing indebtedness may have a negative impact on the Company’s financial condition, cash flows and results of operations. These facts, and an inability to predict future economic conditions, have led the Company to adopt a strict focus on lowering leverage and increasing financial flexibility.

The Company expects to fund its obligations from available cash, current operations and utilization of its Revolving Credit Facilities; however, the Company may issue long-term debt and/or equity. The following information summarizes the availability of the Revolving Credit Facilities at March 31, 2012 (in millions):


Cash and cash equivalents	$	16.1

Revolving Credit Facilities	$	815.0
Less:
Amount outstanding		(76.0	)
Letters of credit		(12.3	)

Borrowing capacity available	$	726.7

Additionally, as of April 27, 2012, the Company had available for future issuance $130 million of its common shares under its continuous equity program.

The Company intends to maintain a longer-term financing strategy and continue to reduce its reliance on short-term debt. The Company believes its Revolving Credit Facilities are sufficient for its liquidity strategy and longer-term capital structure needs. Part of the Company’s overall strategy includes scheduling future debt maturities in a balanced manner, including incorporating a healthy level of conservatism regarding possible future market conditions.

In January 2012, the Company completed $353 million in new long-term financings, comprised of a $250 million unsecured term loan (“Term Loan”) and a $103.0 million Mortgage Loan (“Mortgage Loan”). These financings address substantially all of the Company’s 2012 consolidated debt maturities. The Term Loan consists of a $200 million tranche that bears interest as of March 31, 2012 at a rate of LIBOR plus 210 basis points and matures on January 31, 2019; and a $50 million tranche that bears interest as of March 31, 2012 at a rate of LIBOR plus 170 basis points and matures

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on January 31, 2017. Borrowings under the Term Loan bear interest at LIBOR plus a margin based upon DDR's long-term senior unsecured debt ratings. Additionally, the Company entered into interest rate swaps on the $200 million, seven-year tranche to fix the interest rate at 3.6%. Proceeds from the Term Loan were used to retire the remaining $180 million aggregate principal amount of convertible notes that matured in March 2012, to reduce the outstanding balances under the Revolving Credit Facilities, and for general corporate purposes. The Mortgage Loan has a seven-year term and bears interest at 3.4%.

The Company is focused on the timing and deleveraging opportunities for the consolidated debt maturing in 2012. The consolidated maturities for 2012 include unsecured notes due October 2012 with an outstanding aggregate principal amount of $223.5 million, which the Company expects to repay using borrowings under its Revolving Credit Facilities or, depending on market conditions, the issuance of long-term debt. At March 31, 2012, there were no other unsecured maturities until May 2015. At April 27, 2012, the 2012 mortgage maturities aggregated approximately $12.6 million and are expected to be repaid using borrowings under its Revolving Credit Facilities.

Management believes that the scheduled debt maturities in future years are manageable. The Company continually evaluates its debt maturities and, based on management’s assessment, believes it has viable financing and refinancing alternatives. The Company continues to look beyond 2012 to ensure that it executes its strategy to lower leverage, increase liquidity, improve the Company’s credit ratings and extend debt duration, with the goal of lowering the Company's risk profile and long-term cost of capital.

Unconsolidated Joint Ventures

At March 31, 2012, the Company’s unconsolidated joint venture mortgage debt that had matured and is now past due was $39.8 million, all of which was attributable to the Coventry II Fund assets (see Off-Balance Sheet Arrangements). At March 31, 2012, the Company’s unconsolidated joint venture mortgage debt maturing in 2012 was $1.3 billion (of which the Company’s proportionate share is $286.1 million). Of this amount, $184.9 million (of which the Company’s proportionate share is $35.9 million) was attributable to the Coventry II Fund assets (see Off-Balance Sheet Arrangements). In addition, $119.8 million was repaid in April 2012 (of which the Company’s proportionate share is $54.3 million), primarily with the Company’s purchase of two unconsolidated assets (see Acquisitions) and $698.7 million (of which the Company’s proportionate share is $104.8 million) is expected to be refinanced on a long-term basis in May 2012.

Cash Flow Activity

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

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

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	Three-Month Periods Ended March 31,
	2012			2011
Cash flow provided by operating activities	$	33,858		$	57,632
Cash flow used for investing activities		(64,710	)		(3,486	)
Cash flow provided by (used for) financing activities		6,184			(52,618	)

Operating Activities: The change in cash flow from operating activities for the three-month period ended March 31, 2012, as compared to the same period in 2011 was primarily due to changes in accounts payable and accrued expenses.

Investing Activities: The change in cash flow from investing activities for the three-month period ended March 31, 2012, as compared to the same period in 2011, was primarily due to an increase in asset acquisition and a decrease in proceeds from note repayments from unconsolidated joint ventures.

Financing Activities: The change in cash flow used for financing activities for the three-month period ended March 31, 2012, as compared to the same period in 2011, was primarily due to a decrease in debt repayments and an increase in proceeds from debt, offset by a decrease in proceeds from the issuance of common shares.

The Company satisfied its REIT requirement of distributing at least 90% of ordinary taxable income with declared common and preferred share cash dividends of $40.3 million for the three-month period ended March 31, 2012, as compared to $22.0 million for the same period in 2011. Because actual distributions were greater than 100% of taxable income, federal income taxes were not incurred by the Company thus far during 2012.

The Company declared a quarterly dividend of $0.12 per common share for the first quarter 2012. The Board of Directors of the Company will continue to monitor the 2012 dividend policy and provide for adjustments as determined to be in the best interests of the Company and its shareholders to maximize the Company’s free cash flow, while still adhering to REIT payout requirements.

Sources and Uses of Capital

Acquisitions

The Company has a portfolio management strategy to recycle capital from lower quality, lower growth potential assets into prime assets with long-term growth potential.

In April 2012, the Company acquired its joint venture partners’ 50% ownership interest in two prime power centers located in Portland, Oregon, and Phoenix, Arizona, for $70.0 million in the aggregate. Tanasbourne Town Center, in Portland, Oregon, is a large-format power center totaling 566,000 square feet. The shopping center is anchored by national tenants such as Target, Nordstrom Rack, Bed Bath & Beyond, Ross Dress For Less, Michaels, Old Navy and Petco. Arrowhead Crossing, in Phoenix, Arizona, is a large-format power center totaling 412,000 square feet. The shopping center is anchored by national tenants such as Nordstrom Rack, DSW, TJ Maxx, HomeGoods, Staples and Hobby Lobby. The Company funded its entire $70.0 million investment with proceeds from the issuance of 4.8 million common shares at a weighted-average share price of $14.64 through its continuous equity program. At closing, approximately $104 million of mortgage

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debt was repaid. The Company will account for this transaction as a step acquisition. Due to the change in control that occurred, the Company expects to record a Gain on Change in Control of Interest estimated at $30 million to $40 million related to the difference between the Company’s carrying value and fair value of the previously held equity interest.

In March 2012, the Company acquired Brookside Marketplace in Chicago, Illinois, for $47.4 million. The center is a large-format power center totaling 561,000 square feet. The asset is anchored by Super Target, Kohl’s, Dick’s Sporting Goods, Best Buy, HomeGoods, Michaels, PetSmart, Office Max, Old Navy and ULTA.

Newly Formed Joint Venture

In January 2012, affiliates of the Company and Blackstone formed a joint venture that is expected to acquire a portfolio of 46 shopping centers, in the second quarter of 2012, owned by EPN Group and managed by the Company, valued at approximately $1.4 billion, including assumed debt of $640 million and at least $305 million of anticipated new financings. The assumed debt has a weighted-average interest rate of 4.4% and maturity dates ranging from 2013 to 2017. An affiliate of Blackstone owns 95% of the common equity of the joint venture, and the remaining 5% interest is owned by an affiliate of DDR. DDR is also expected to invest $150 million in preferred equity in the joint venture with a fixed dividend rate of 10%, and will continue to provide leasing and property management services for the portfolio. In addition, DDR will have the right of first offer to acquire 10 of the assets under specified conditions.

Dispositions

During the three-month period ended March 31, 2012, the Company sold six shopping center properties, aggregating 0.4 million square feet, at an aggregate sales price of $12.2 million. In addition, the Company sold $27.4 million of consolidated non-income producing assets. The Company recorded a net gain of $0.7 million, which excludes the impact of an aggregate $73.3 million in related impairment charges that were recorded in prior periods on all of the assets sold in the first quarter of 2012. During the three-month period ended March 31, 2012, the Company’s unconsolidated joint ventures sold assets, generating gross proceeds of approximately $5.2 million. The aggregate gain was approximately $0.4 million related to these asset sales, of which the Company’s share was approximately $0.1 million.

As discussed above, a part of the Company’s portfolio management strategy is to recycle capital from lower quality, lower growth assets into prime assets with long-term growth potential. The Company has been marketing non-prime assets for sale and is focused on selling single-tenant assets and/or smaller shopping centers that do not meet the Company’s current business strategy. The Company has entered into agreements, including contracts executed through April 27, 2012, to sell real estate assets that are subject to contingencies. The Company anticipates an immaterial loss to be recorded if all such sales were consummated on the terms as negotiated through April 27, 2012. Given the Company’s experience over the past few years, it is difficult for many buyers to complete these transactions in the timing contemplated or at all. The Company has not recorded an impairment charge on the assets that would result in a loss at March 31, 2012, as the undiscounted cash flows, when considering and evaluating the various alternative courses of action that may occur, exceeded the assets’ current carrying value at March 31, 2012. The Company evaluates all potential sale

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opportunities taking into account the long-term growth prospects of assets being sold, the use of proceeds and the impact to the Company’s balance sheet, in addition to the impact on operating results. As a result, if actual results differ from expectations, it is possible that additional assets could be sold in subsequent periods for a gain or loss after taking into account the above considerations.

Joint Venture Activity—Sonae Sierra Brasil

During the quarter, the Company's one-third-owned joint venture, Sonae Sierra Brasil, completed a strategic asset swap and partial sale that resulted in a majority ownership interest in Shopping Plaza Sul, a high-quality enclosed mall located in Sao Paulo. Sonae Sierra Brasil acquired an additional 30% ownership interest in Shopping Plaza Sul in exchange for a 22% stake in Shopping Penha and $29 million in cash. As a result of this transaction, Sonae Sierra Brasil increased its ownership interest in Shopping Plaza Sul to 60% and decreased its ownership interest in Shopping Penha to 51%.

Developments and Redevelopments

As part of its portfolio management strategy to develop, expand, improve and re-tenant various consolidated properties, the Company expects to expend on a net basis, after deducting sales proceeds from outlot sales, an aggregate of approximately $45.3 million for the remainder of 2012.

The Company is currently redeveloping nine significant shopping center developments (one owned by a consolidated joint venture) at a projected aggregate net cost of approximately $128.7 million. At March 31, 2012, approximately $84.4 million of costs had been incurred in relation to these redevelopment projects. In addition, the Company’s unconsolidated joint ventures have projects being developed and have incurred $45.8 million in project costs. An expected $191.1 million of costs is projected to be incurred for the remainder of 2012. A majority of these costs are related to projects under development at the Company’s joint venture in Brazil.

The Company and its joint venture partners intend to commence construction on various other developments only after substantial tenant leasing has occurred and acceptable construction financing is available.

At March 31, 2012, the Company had approximately $431.6 million of recorded costs related to land and projects under development, for which active construction had temporarily ceased or had not yet commenced. Based on the Company’s intentions and business plans, the Company believes that the expected undiscounted cash flows exceed its current carrying value on each of these projects. However, if the Company were to dispose of certain of these assets in the market, the Company would likely incur a loss, which may be material. The Company believes it evaluates its intentions with respect to these assets each reporting period and records an impairment charge equal to the difference between the current carrying value and fair value when the expected undiscounted cash flows are less than the asset’s carrying value.

The Company will continue to closely monitor its expected spending in 2012 for developments and redevelopments, both for consolidated and unconsolidated projects, as the Company considers this funding to be discretionary spending. The Company does not anticipate expending a significant amount of funds on joint venture development projects in 2012, excluding projects at Sonae Sierra Brasil. The projects in Brazil are expected to be funded with proceeds from the IPO in 2011 or the

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recently completed entity-level financing. One of the important benefits of the Company’s asset class is the ability to phase development projects over time until appropriate leasing levels can be achieved. To maximize the return on capital spending and balance the Company’s de-leveraging strategy, the Company generally adheres to strict investment criteria thresholds. The revised underwriting criteria generally followed for the past three years includes a higher cash-on-cost project return threshold and incorporates a longer period before the leases commence and a higher stabilized vacancy rate. The Company applies this revised strategy to both its consolidated and certain unconsolidated joint ventures that own assets under development because the Company has significant influence and, in most cases, approval rights over decisions relating to significant capital expenditures.

Off-Balance Sheet Arrangements

The Company has a number of off-balance sheet joint ventures and other unconsolidated entities with varying economic structures. Through these interests, the Company has investments in operating properties, development properties and two management and development companies. Such arrangements are generally with institutional investors and various developers located throughout the United States and Brazil.

The unconsolidated joint ventures that have total assets greater than $250 million (based on the historical cost of acquisition by the unconsolidated joint venture) at March 31, 2012, are as follows:


Unconsolidated Real Estate Ventures	Effective Ownership Percentage ^(A)			Assets Owned	Company- Owned Square Feet (Millions)		Total Debt (Millions)
DDRTC Core Retail Fund LLC		15.0	%	40 shopping centers in several states		11.5	$	1,164.0
DDR Domestic Retail Fund I		20.0	%	60 shopping centers in several states		8.2		930.6
Sonae Sierra Brasil BV Sarl		33.3	%	11 shopping centers, a management company and two development projects in Brazil		4.1		392.3
DDR – SAU Retail Fund LLC		20.0	%	27 shopping centers in several states		2.4		183.1

(A)	Ownership may be held through different investment structures. Percentage ownerships are subject to change, as certain investments contain promoted structures.

Funding for Unconsolidated Joint Ventures

The Company has provided loans and advances to certain unconsolidated entities and/or related partners in the amount of $71.1 million at March 31, 2012, for which the Company’s joint venture partners have not funded their proportionate share. Included in this amount, the Company advanced $66.9 million of financing to one of its unconsolidated joint ventures, which accrued interest at the greater of LIBOR plus 700 basis points, or 12%, and a default rate of 16%, and had an initial maturity of July 2011 (the “Bloomfield Loan”). This advance is reserved in full (see Coventry II Fund discussion below) and interest is no longer accrued by the Company.

Coventry II Fund

At March 31, 2012, the Company maintained several investments with the Coventry II Fund. The Company co-invested approximately 20% in each joint venture. The Company’s management and leasing agreements with the joint ventures expired by their own terms on December 31, 2011, and the Company decided not to renew these agreements. The Company could earn a promoted interest, along with Coventry Real Estate Advisors L.L.C., above a preferred return after return of capital to fund investors (see Part II, Item 1. Legal Proceedings).

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As of March 31, 2012, the aggregate carrying amount of the Company’s net investment in the Coventry II Fund joint ventures was approximately $15.2 million. In addition to its existing equity and notes receivable, including the Bloomfield Loan, the Company has provided partial payment guaranties to third-party lenders in connection with the financing for five of the Coventry II Fund projects. The amount of each such guaranty is not greater than the proportion of the Company’s investment percentage in the underlying projects, and the aggregate amount of the Company’s guaranties was approximately $34.1 million at March 31, 2012.

Although the Company will not acquire additional investments through the Coventry II Fund joint ventures, additional funds may be required to address ongoing operational needs and costs associated with the joint ventures undergoing development or redevelopment. The Coventry II Fund is exploring a variety of strategies to obtain such funds, including potential dispositions and financings. The Company continues to maintain the position that it does not intend to fund any of its joint venture partners’ capital contributions or their share of debt maturities.

A summary of the Coventry II Fund investments is as follows:


Unconsolidated Real Estate Ventures	Shopping Center or Development Owned	Loan Balance Outstanding at March 31, 2012
Coventry II DDR Bloomfield LLC	Bloomfield Hills, Michigan	$	39.8	^{(A), (B), (C), (D)}
Coventry II DDR Buena Park LLC	Buena Park, California		61.0	^(B)
Coventry II DDR Fairplain LLC	Benton Harbor, Michigan		14.8	^{(B), (E)}
Coventry II DDR Marley Creek Square LLC	Orland Park, Illinois		10.6	^{(D), (E)}
Coventry II DDR Montgomery Farm LLC	Allen, Texas		137.9	^{(B), (C), (E)}
Coventry II DDR Phoenix Spectrum LLC	Phoenix, Arizona		65.0
Coventry II DDR Totem Lakes LLC	Kirkland, Washington		27.2	^{(B), (D), (E)}
Coventry II DDR Tri-County LLC	Cincinnati, Ohio		150.6	^{(B), (C), (D)}
Coventry II DDR Westover LLC	San Antonio, Texas		20.8	^(B)
Service Holdings LLC	38 retail sites in several states		99.2	^{(B), (D), (E)}

(A)

In 2009, the senior secured lender sent to the borrower a formal notice of default and filed a foreclosure action. The Company paid its 20% guaranty of this loan in 2009, and the senior secured lender initiated legal proceedings against the Coventry II Fund for its failure to fund its 80% payment guaranty. The senior secured lender and the Coventry II Fund subsequently entered into a settlement agreement in connection with the legal proceedings. In addition, the Bloomfield Loan from the Company is cross-defaulted with this third-party loan. The Bloomfield Loan is considered past due and has been fully reserved by the Company.

(B)	As of April 27, 2012, lenders are managing the cash receipts and expenditures related to the assets collateralizing these loans.

(C)	As of April 27, 2012, these loans are in default, and the Coventry II Fund is exploring a variety of strategies with the lenders.

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(D)	The Company has written its investment basis in this joint venture down to zero and is no longer reporting an allocation of income or loss.

(E)	As of April 27, 2012, the Company provided partial loan payment guaranties that were not greater than the proportion of its investment interest.

Other Joint Ventures

The Company is involved with overseeing the development activities for several of its unconsolidated joint ventures that are constructing or redeveloping shopping centers. The Company earns a fee for its services commensurate with the level of oversight provided. The Company generally provides a completion guaranty to the third-party lending institution(s) providing construction financing.

The Company’s unconsolidated joint ventures had aggregate outstanding indebtedness to third parties of approximately $3.9 billion at both March 31, 2012 and 2011 (see Item 3. Quantitative and Qualitative Disclosures About Market Risk). Such mortgages and construction loans are generally non-recourse to the Company and its partners; however, certain mortgages may have recourse to the Company and its partners in certain limited situations, such as misuse of funds and material misrepresentations. In connection with certain of the Company’s unconsolidated joint ventures, the Company agreed to fund any amounts due to the joint venture’s lender if such amounts are not paid by the joint venture based on the Company’s pro rata share of such amount, which aggregated $41.3 million at March 31, 2012, including guaranties associated with the Coventry II Fund joint ventures.

The Company has generally chosen not to mitigate any of the foreign currency risk through the use of hedging instruments for Sonae Sierra Brasil. The Company will continue to monitor and evaluate this risk and may enter into hedging agreements at a later date.

The Company has interests in consolidated joint ventures that own real estate assets in Canada and Russia. The net assets of these subsidiaries are exposed to volatility in currency exchange rates. As such, the Company uses non-derivative financial instruments to hedge this exposure. The Company manages currency exposure related to the net assets of the Company’s Canadian and European subsidiaries primarily through foreign currency-denominated debt agreements into which the Company enters. Gains and losses in the parent company’s net investments in its subsidiaries are economically offset by losses and gains in the parent company’s foreign currency-denominated debt obligations.

For the three-months ended March 31, 2012, $1.4 million of net losses related to the foreign currency-denominated debt agreements were included in the Company’s cumulative translation adjustment. As the notional amount of the non-derivative instrument substantially matches the portion of the net investment designated as being hedged and the non-derivative instrument is denominated in the functional currency of the hedged net investment, the hedge ineffectiveness recognized in earnings was not material.

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Financing Activities

In April 2012, the Company issued 4.8 million common shares at a weighted-average share price of $14.64 through its existing continuous equity program and used the $70.0 million of cash raised to acquire its joint venture partners’ 50% ownership interest in two prime power centers located in Portland, Oregon and Phoenix, Arizona (see Liquidity and Capital Resources and Sources and Uses of Capital).

From April 1, 2012 to May 4, 2012, the Company repurchased $28.4 million aggregate principal amount of its outstanding 9.625% senior unsecured notes due 2016 at a premium, resulting in a loss of approximately $6.3 million.

During the three-month period ended March 31, 2012, the Company repurchased $25.5 million aggregate principal amount of its outstanding 9.625% senior unsecured notes due 2016 at a premium to par value, resulting in a loss of approximately $5.6 million.

In January 2012, the Company completed $353 million in new long-term financings, comprised of a $250 million Term Loan and a $103.0 million Mortgage Loan. These financings address substantially all of the Company’s 2012 consolidated debt maturities (see Liquidity and Capital Resources).

In January 2012, the Company entered into forward sale agreements to issue approximately 19 million of its common shares with expected proceeds at an initial price of $12.432 per share. The Company expects the settlement of the forward sale agreements to be on or about June 29, 2012. The Company expects to use the net proceeds to fund its investment in the joint venture with an affiliate of Blackstone (see Sources and Uses of Capital) and for other corporate purposes.

The Company has historically accessed capital sources through both the public and private markets. The Company’s acquisitions, developments and redevelopments are generally financed through cash provided from operating activities, revolving credit facilities, mortgages assumed, construction loans, secured debt, unsecured debt, common and preferred equity offerings, joint venture capital and asset sales. Total consolidated debt outstanding was $4.1 billion, $4.1 billion and $4.3 billion at March 31, 2012, December 31, 2011 and March 31, 2011, respectively.

Capitalization

At March 31, 2012, the Company’s capitalization consisted of $4.1 billion of debt, $375 million of preferred shares and $4.1 billion of market equity (market equity is defined as common shares and OP Units outstanding multiplied by $14.60, the closing price of the Company’s common shares on the New York Stock Exchange at March 31, 2012), resulting in a debt to total market capitalization ratio of 0.48 to 1.0, as compared to the ratio of 0.50 to 1.0 at March 31, 2011. The closing price of the common shares on the New York Stock Exchange was $14.00 at March 31, 2011. At March 31, 2012, the Company’s total debt consisted of $3.5 billion of fixed-rate debt (including $383.8 million of variable-rate debt that had been effectively swapped to a fixed rate through the use of interest rate derivative contracts) and $0.6 billion of variable-rate debt. At March 31, 2011, the Company’s total debt consisted of $3.7 billion of fixed-rate debt (including $185 million of variable-rate debt that had been effectively swapped to a fixed rate through the use of interest rate derivative contracts) and $0.6 billion of variable-rate debt.

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

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

Contractual Obligations and Other Commitments

The Company is focused on the timing and deleveraging opportunities for the consolidated debt maturing in 2012. The wholly-owned maturities for 2012 include the unsecured notes due in October 2012 with an aggregate principal amount of $223.5 million and mortgage maturities of approximately $12.6 million. The Company expects to repay the 2012 maturities through new debt or using the availability on its Revolving Credit Facilities. No assurance can be provided that the aforementioned obligations will be refinanced or repaid as anticipated (see Liquidity and Capital Resources).

At March 31, 2012, the Company had letters of credit outstanding of approximately $29.7 million. The Company has not recorded any obligations associated with these letters of credit, the majority of which are collateral for existing indebtedness and other obligations of the Company.

In conjunction with the development of shopping centers, the Company had entered into commitments with general contractors aggregating approximately $19.3 million for its wholly-owned and consolidated joint venture properties at March 31, 2012. These obligations, composed principally of construction contracts, are generally due in 12 to 18 months, as the related construction costs are incurred, and are expected to be financed through operating cash flow, new or existing construction loans, asset sales or revolving credit facilities.

The Company routinely enters into contracts for the maintenance of its properties. These contracts typically can be cancelled upon 30 to 60 days notice without penalty. At March 31, 2012, the Company had purchase order obligations, typically payable within one year, aggregating approximately $4.2 million related to the maintenance of its properties and general and administrative expenses.

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Inflation

Most of the Company’s long-term leases contain provisions designed to mitigate the adverse impact of inflation. Such provisions include clauses enabling the Company to receive additional rental income from escalation clauses that generally increase rental rates during the terms of the leases and/or percentage rentals based on tenants’ gross sales. Such escalations are determined by negotiation, increases in the consumer price index or similar inflation indices. In addition, many of the Company’s leases are for terms of less than 10 years, permitting the Company to seek increased rents at market rates upon renewal. Most of the Company’s leases require the tenants to pay their share of operating expenses, including common area maintenance, real estate taxes, insurance and utilities, thereby reducing the Company’s exposure to increases in costs and operating expenses resulting from inflation.

Economic Conditions

The retail market in the United States significantly weakened in 2008 and continued to be challenged in 2009. Retail sales declined and tenants became more selective about new store openings. Some retailers closed existing locations, and, as a result, the Company experienced a loss in occupancy compared to its historic levels as discussed below. The reduction in occupancy in 2009 continued to have a negative impact on the Company’s consolidated cash flows, results of operations and financial position in 2012. However, the Company believes commencing in 2010 there has been an improvement in the level of optimism within its tenant base. Many retailers executed contracts prior to December 31, 2011, to open new stores and have strong store opening plans for 2012 and 2013. The continued lack of supply of new shopping centers is causing retailers to reconsider opportunities to open new stores in quality locations in well-positioned shopping centers. The Company continues to see strong demand from a broad range of retailers, particularly in the off-price sector, which is a reflection of the general outlook of consumers who are demanding more value for their dollars. Offsetting some of the impact resulting from the reduced historical occupancy is the Company’s low occupancy cost relative to other retail formats and historic averages, as well as a diversified tenant base with only one tenant exceeding 3% of total 2012 consolidated revenues and the Company’s proportionate share of unconsolidated joint venture revenues (Walmart at 4.3%). Other significant tenants include Target, Lowe’s, Home Depot, Kohl’s, T.J. Maxx/Marshalls, Publix Supermarkets, PetSmart and Bed Bath & Beyond, all of which have relatively strong credit ratings, remain well-capitalized and have outperformed other retail categories on a relative basis over time. The Company believes these tenants should continue providing it with a stable revenue base for the foreseeable future, given the long-term nature of these leases. Moreover, the majority of the tenants in the Company’s shopping centers provide day-to-day consumer necessities with a focus toward value and convenience versus high-priced discretionary luxury items, which the Company believes will enable many of the tenants to continue operating within this challenging economic environment.

The retail shopping sector has been affected by the competitive nature of the retail business and the competition for market share as well as general economic conditions where stronger retailers have out-positioned some of the weaker retailers. These shifts have forced some market share away from weaker retailers and required them, in some cases, to declare bankruptcy and/or close stores. Overall, the Company believes its portfolio remains stable. However, there can be no assurance that these events will not adversely affect the Company (see Item 1A. Risk Factors in the Company’s Annual Report on Form 10-K for the year ended December 31, 2011).

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Historically, the Company’s portfolio has performed consistently throughout many economic cycles, including downward cycles. Broadly speaking, national retail sales have grown since World War II, including during several recessions and housing slowdowns. In the past, the Company has not experienced significant volatility in its long-term portfolio occupancy rate. The Company has experienced downward cycles before and has made the necessary adjustments to leasing and development strategies to accommodate the changes in the operating environment and mitigate risk. In many cases, the loss of a weaker tenant creates an opportunity to re-lease space at higher rents to a stronger retailer. More importantly, the quality of the property revenue stream is high and consistent, as it is generally derived from retailers with good credit profiles under long-term leases, with very little reliance on overage rents generated by tenant sales performance. The Company believes that the quality of its shopping center portfolio is strong, as evidenced by the high historical occupancy rates, which have generally ranged from 92% to 96% since the Company’s initial public offering in 1993. Although the Company experienced a significant decline in occupancy in 2009 due to several major tenant bankruptcies, the shopping center portfolio occupancy was at 89.8% at March 31, 2012. Notwithstanding the decline in occupancy compared to historic levels, the Company continues to sign new leases at rental rates that are returning to historic averages. The total portfolio average annualized base rent per occupied square foot, including the results of Sonae Sierra Brasil, was $14.08 at March 31, 2012, as compared to $13.16 at March 31, 2011, and $13.81 at December 31, 2011. Moreover, the Company has been able to achieve these results without significant capital investment in tenant improvements or leasing commissions. The weighted-average cost of tenant improvements and lease commissions estimated to be incurred for leases executed during the first quarter of 2012 for the U.S. portfolio was only $2.89 per rentable square foot. The Company is very conscious of, and sensitive to, the risks posed by the economy, but believes that the position of its portfolio and the general diversity and credit quality of its tenant base should enable it to successfully navigate through these challenging economic times.

New Accounting Standards

Presentation of Other Comprehensive Income

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Fair Value Measurements

In May 2011, the FASB issued Accounting Standards Update No. 2011-04, "Fair Value Measurements and Disclosures (Topic 820)-Amendments to Achieve Common Fair Value Measurement and Disclosure Requirements in U.S. GAAP and IFRS" ("ASU 2011-04"). ASU 2011-04 clarifies the application of existing fair value measurement requirements, changes certain principles related to measuring fair value and requires additional disclosures about fair value measurements. Specifically, the guidance specifies that the concepts of highest and best use and valuation premise in a fair value measurement are only relevant when measuring the fair value of nonfinancial assets whereas they are not relevant when measuring the fair value of financial assets and liabilities. Required disclosures are expanded under the new guidance, especially for fair value measurements that are categorized within Level 3 of the fair value hierarchy, for which quantitative information about the unobservable inputs used, and a narrative description of the valuation processes in place and sensitivity of recurring Level 3 measurements to changes in unobservable inputs will be required. Entities will also be required to disclose the categorization by level of the fair value hierarchy for items that are not measured at fair value in the balance sheet but for which the fair value is required to be disclosed. ASU 2011-04 is effective for annual periods beginning after December 15, 2011, and is to be applied prospectively. The Company’s adoption of this guidance did not have a material impact on its financial statements.

FORWARD-LOOKING STATEMENTS

Management’s discussion and analysis should be read in conjunction with the condensed consolidated financial statements and the notes thereto appearing elsewhere in this report. Historical results and percentage relationships set forth in the condensed consolidated financial statements, including trends that might appear, should not be taken as indicative of future operations. The Company considers portions of this information to be “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934, both as amended, with respect to the Company’s expectations for future periods. Forward-looking statements include, without limitation, statements related to acquisitions (including any related pro forma financial information) and other business development activities, future capital expenditures, financing sources and availability and the effects of environmental and other regulations. Although the Company believes that the expectations reflected in these forward-looking statements are based upon reasonable assumptions, it can give no assurance that its expectations will be achieved. For this purpose, any statements contained herein that are not statements of historical fact should be deemed to be forward-looking statements. Without limiting the foregoing, the words “will,” “believes,” “anticipates,” “plans,” “expects,” “seeks,” “estimates” and similar expressions are intended to identify forward-looking statements. Readers should exercise caution in interpreting and relying on forward-looking statements because such statements involve known and unknown risks, uncertainties and other factors that are, in some cases, beyond the Company’s control and that could cause actual results to differ materially from those expressed or implied in the forward-looking statements and that could materially affect the Company’s actual results, performance or achievements. For additional factors that could cause the results of the Company to differ materially from those indicated in the forward looking statements, please refer to Item 1A – Risk Factors in the Company’s Annual Report on Form 10-K for the year ended December 31, 2011.

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

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•

The Company is subject to general risks affecting the real estate industry, including the need to enter into new leases or renew leases on favorable terms to generate rental revenues, and the economic downturn may adversely affect the ability of the Company’s tenants, or new tenants, to enter into new leases or the ability of the Company’s existing tenants to renew their leases at rates at least as favorable as their current rates;

•

The Company could be adversely affected by changes in the local markets where its properties are located, as well as by adverse changes in national economic and market conditions;

•

The Company may fail to anticipate the effects on its properties of changes in consumer buying practices, including catalog sales and sales over the Internet and the resulting retailing practices and space needs of its tenants, or a general downturn in its tenants’ businesses, which may cause tenants to close stores or default in payment of rent;

•

The Company is subject to competition for tenants from other owners of retail properties, and its tenants are subject to competition from other retailers and methods of distribution. The Company is dependent upon the successful operations and financial condition of its tenants, in particular its major tenants, and could be adversely affected by the bankruptcy of those tenants;

•

The Company relies on major tenants, which makes it vulnerable to changes in the business and financial condition of, or demand for its space by, such tenants;

•

The Company may not realize the intended benefits of acquisition or merger transactions. The acquired assets may not perform as well as the Company anticipated, or the Company may not successfully integrate the assets and realize improvements in occupancy and operating results. The acquisition of certain assets may subject the Company to liabilities, including environmental liabilities;

•

The Company may fail to identify, acquire, construct or develop additional properties that produce a desired yield on invested capital, or may fail to effectively integrate acquisitions of properties or portfolios of properties. In addition, the Company may be limited in its acquisition opportunities due to competition, the inability to obtain financing on reasonable terms or any financing at all, and other factors;

•

The Company may fail to dispose of properties on favorable terms. In addition, real estate investments can be illiquid, particularly as prospective buyers may experience increased costs of financing or difficulties obtaining financing, and could limit the Company’s ability to promptly make changes to its portfolio to respond to economic and other conditions;

•

The Company may abandon a development opportunity after expending resources if it determines that the development opportunity is not feasible due to a variety of factors, including a lack of availability of construction financing on reasonable terms, the impact of the economic environment on prospective tenants’ ability to enter into new leases or pay contractual rent, or the inability of the Company to obtain all necessary zoning and other required governmental permits and authorizations;

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•

The Company may not complete development projects on schedule as a result of various factors, many of which are beyond the Company’s control, such as weather, labor conditions, governmental approvals, material shortages or general economic downturn resulting in limited availability of capital, increased debt service expense and construction costs, and decreases in revenue;

•

The Company’s financial condition may be affected by required debt service payments, the risk of default and restrictions on its ability to incur additional debt or to enter into certain transactions under its credit facilities and other documents governing its debt obligations. In addition, the Company may encounter difficulties in obtaining permanent financing or refinancing existing debt. Borrowings under the Company’s revolving credit facilities are subject to certain representations and warranties and customary events of default, including any event that has had or could reasonably be expected to have a material adverse effect on the Company’s business or financial condition;

•

Changes in interest rates could adversely affect the market price of the Company’s common shares, as well as its performance and cash flow;

•

Debt and/or equity financing necessary for the Company to continue to grow and operate its business may not be available or may not be available on favorable terms;

•

Disruptions in the financial markets could affect the Company’s ability to obtain financing on reasonable terms and have other adverse effects on the Company and the market price of the Company’s common shares;

•

The Company is subject to complex regulations related to its status as a REIT and would be adversely affected if it failed to qualify as a REIT;

•

The Company must make distributions to shareholders to continue to qualify as a REIT, and if the Company must borrow funds to make distributions, those borrowings may not be available on favorable terms or at all;

•

Joint venture investments may involve risks not otherwise present for investments made solely by the Company, including the possibility that a partner or co-venturer may become bankrupt, may at any time have interests or goals different from those of the Company and may take action contrary to the Company’s instructions, requests, policies or objectives, including the Company’s policy with respect to maintaining its qualification as a REIT. In addition, a partner or co-venturer may not have access to sufficient capital to satisfy its funding obligations to the joint venture. The partner could cause a default under the joint venture loan for reasons outside the Company’s control. Furthermore, the Company could be required to reduce the carrying value of its equity method investments if a loss in the carrying value of the investment is other than temporary;

•

The Company’s decision to dispose of real estate assets, including land held for development and construction in progress, would change the holding period assumption in the undiscounted cash flow impairment analyses, which could result in material impairment losses and adversely affect the Company’s financial results;

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•

The outcome of pending or future litigation, including litigation with tenants or joint venture partners, may adversely affect the Company’s results of operations and financial condition;

•

The Company may not realize anticipated returns from its real estate assets outside the United States. The Company may continue to pursue international opportunities that may subject the Company to different or greater risks than those associated with its domestic operations. The Company owns assets in Puerto Rico, an interest in an unconsolidated joint venture that owns properties in Brazil and an interest in consolidated joint ventures that were formed to develop and own properties in Canada and Russia;

•

International development and ownership activities carry risks in addition to those the Company faces with the Company’s domestic properties and operations. These risks include the following:

•

Adverse effects of changes in exchange rates for foreign currencies;

•

Changes in foreign political or economic environments;

•

Challenges of complying with a wide variety of foreign laws, including tax laws, and addressing different practices and customs relating to corporate governance, operations and litigation;

•

Different lending practices;

•

Cultural and consumer differences;

•

Changes in applicable laws and regulations in the United States that affect foreign operations;

•

Difficulties in managing international operations; and

•

Obstacles to the repatriation of earnings and cash.

•

Although the Company’s international activities are currently a relatively small portion of its business, to the extent the Company expands its international activities, these risks could significantly increase and adversely affect its results of operations and financial condition;

•

The Company is subject to potential environmental liabilities;

•

The Company may incur losses that are uninsured or exceed policy coverage due to its liability for certain injuries to persons, property or the environment occurring on its properties;

•

The Company could incur additional expenses to comply with or respond to claims under the Americans with Disabilities Act or otherwise be adversely affected by changes in government regulations, including changes in environmental, zoning, tax and other regulations and

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•

The joint venture between an affiliate of the Company and an affiliate of Blackstone may be unable to successfully complete the planned acquisition of a portfolio of 46 shopping centers from EPN Group.

ITEM 3.

QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

The Company’s primary market risk exposure is interest rate risk. The Company’s debt, excluding unconsolidated joint venture debt, is summarized as follows:


	March 31, 2012										December 31, 2011
	Amount (Millions)		Weighted- Average Maturity (Years)		Weighted- Average Interest Rate			Percentage of Total			Amount (Millions)		Weighted- Average Maturity (Years)		Weighted- Average Interest Rate			Percentage of Total
Fixed-Rate Debt ^(A)	$	3,521.5		4.6		5.5	%		85.1	%	$	3,571.2		4.3		6.1	%		87.0	%
Variable-Rate Debt ^(A)	$	615.4		3.4		2.0	%		14.9	%	$	533.4		3.6		2.1	%		13.0	%

(A)	Adjusted to reflect the $383.8 million and $284.1 million of variable-rate debt that LIBOR was swapped to a fixed-rate of 1.7% and 2.9%, respectively, at March 31, 2012 and December 31, 2011, respectively.

The Company’s unconsolidated joint ventures’ fixed-rate indebtedness is summarized as follows:


	March 31, 2012									December 31, 2011
	Joint Venture Debt (Millions)		Company’s Proportionate Share (Millions)		Weighted- Average Maturity (Years)		Weighted- Average Interest Rate			Joint Venture Debt (Millions)		Company’s Proportionate Share (Millions)		Weighted- Average Maturity (Years)		Weighted- Average Interest Rate
Fixed-Rate Debt	$	3,054.9	$	641.5		3.4		5.8	%	$	3,086.1	$	646.2		3.6		5.7	%
Variable-Rate Debt	$	870.4	$	196.1		4.4		7.4	%	$	656.1	$	126.7		3.8		5.7	%

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

The interest rate risk on a portion of the Company’s variable-rate debt described above has been mitigated through the use of interest rate swap agreements (the “Swaps”) with major financial institutions. At March 31, 2012 and December 31, 2011, the interest rate on the Company’s $383.8 million and $284.1 million, respectively, consolidated floating rate debt was swapped to fixed rates. The Company is exposed to credit risk in the event of nonperformance by the counterparties to the Swaps. The Company believes it mitigates its credit risk by entering into Swaps with major financial institutions.

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The carrying value of the Company’s fixed-rate debt is adjusted to include the $383.8 million and $284.1 million that were swapped to a fixed rate at March 31, 2012 and December 31, 2011, respectively. The fair value of the Company’s fixed-rate debt is adjusted to (i) include the swaps reflected in the carrying value and (ii) include the Company’s proportionate share of the joint venture fixed-rate debt. An estimate of the effect of a 100 basis-point increase at March 31, 2012 and December 31, 2011, is summarized as follows (in millions):


	March 31, 2012								December 31, 2011
	Carrying Value		Fair Value			100 Basis Point Increase in Market Interest Rates			Carrying Value		Fair Value			100 Basis Point Increase in Market Interest Rates
Company’s fixed-rate debt	$	3,521.5	$	3,809.9	^(A)	$	3,730.9	^(B)	$	3,571.2	$	3,757.9	^(A)	$	3,690.5	^(B)
Company’s proportionate share of joint venture fixed-rate debt	$	641.5	$	635.5		$	620.9		$	646.2	$	633.2		$	617.0

(A)	Includes the fair value of interest rate swaps, which was a liability of $7.5 million and $8.8 million at March 31, 2012 and December 31, 2011, respectively.

(B)	Includes the fair value of interest rate swaps, which was an asset of $12.0 million and a liability of $1.9 million at March 31, 2012 and December 31, 2011, respectively.

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

Further, a 100 basis point increase in short-term market interest rates on variable-rate debt at March 31, 2012, would result in an increase in interest expense of approximately $1.5 million for the Company and $0.5 million representing the Company’s proportionate share of the joint ventures’ interest expense relating to variable-rate debt outstanding for the three-month period. The estimated increase in interest expense for the year does not give effect to possible changes in the daily balance for the Company’s or joint ventures’ outstanding variable-rate debt.

The Company and its joint ventures intend to continually monitor and actively manage interest costs on their variable-rate debt portfolio and may enter into swap positions based on market fluctuations. In addition, the Company believes that it has the ability to obtain funds through additional equity and/or debt offerings and joint venture capital. Accordingly, the cost of obtaining such protection agreements in relation to the Company’s access to capital markets will continue to be evaluated. The Company has not entered, and does not plan to enter, into any derivative financial instruments for trading or speculative purposes. As of March 31, 2012, the Company had no other material exposure to market risk.

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ITEM 4.

CONTROLS AND PROCEDURES

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

During the three-month period ended March 31, 2012, there were no changes in the Company’s internal control over financial reporting that materially affected or are reasonably likely to materially affect the Company’s internal control over financial reporting.

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PART II

OTHER INFORMATION

ITEM 1.

LEGAL PROCEEDINGS

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level of at least senior vice president) did not occur. The court heard testimony in support of the Company’s motion (and Coventry’s opposition) and, on December 4, 2009, issued a ruling in the Company’s favor. Specifically, the court issued a temporary restraining order enjoining Coventry from terminating the Company as property manager “for cause.” The court found that the Company was likely to succeed on the merits, that immediate and irreparable injury, loss or damage would result to the Company in the absence of such restraint, and that the balance of equities favored injunctive relief in the Company’s favor. The Company filed a motion for summary judgment seeking a ruling by the Court that there was no basis for Coventry’s “for cause” termination as a matter of law. On August 2, 2011, the court entered an order granting the Company’s motion for summary judgment in all respects, finding that, as a matter of law and fact, Coventry did not have the right to terminate the management agreements “for cause”. Coventry filed a notice of appeal, and on March 15, 2012, the Ohio Court of Appeals issued an opinion and order unanimously affirming the trial court’s ruling.

ITEM 1A.

RISK FACTORS

None.

ITEM 2.

UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS ISSUER PURCHASES OF EQUITY SECURITIES


	(a) Total Number of Shares Purchased ⁽¹⁾		(b) Average Price Paid per Share		(c) Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs		(d) Maximum Number (or Approximate Dollar Value) of Shares that May Yet Be Purchased Under the Plans or Programs
January 1 – 31, 2012		72,066	$	13.60		—		—
February 1 – 29, 2012		45,131		13.86		—		—
March 1 – 31, 2012		24,447		14.90		—		—

Total		141,644	$	13.91		—		—

(1)	Consists of common shares surrendered or deemed surrendered to the Company to satisfy statutory minimum tax withholding obligations in connection with the vesting and/or exercise of awards under the Company’s equity-based compensation plans.

ITEM 3.

DEFAULTS UPON SENIOR SECURITIES

None.

- 64 -

ITEM 4.

MINE SAFETY DISCLOSURES

Not applicable

ITEM 5.

OTHER INFORMATION

None

ITEM 6.

EXHIBITS



10.1		Form Incentive Stock Option Agreement

10.2		Form Non-Qualified Stock Option Agreement

10.3		Form Restricted Shares Agreement

10.4		Employment Agreement, dated February 29, 2012, by and between the Company and Christa A. Vesy

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

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

32.1		Certification of CEO pursuant to Rule 13a-14(b) of the Exchange Act and 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of this report pursuant to the Sarbanes-Oxley Act of 2002 ¹

32.2		Certification of CFO pursuant to Rule 13a-14(b) of the Exchange Act and 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of this report pursuant to the Sarbanes-Oxley Act of 2002 ¹

101.INS		XBRL Instance Document. ²

101. SCH		XBRL Taxonomy Extension Schema Document. ²

101.CAL		XBRL Taxonomy Extension Calculation Linkbase Document. ²

101.DEF		XBRL Taxonomy Extension Definition Linkbase Document. ²

101.LAB		XBRL Taxonomy Extension Label Linkbase Document. ²

101.PRE		XBRL Taxonomy Extension Presentation Linkbase Document. ²

- 65 -

1	Pursuant to SEC Release No. 34-4751, these exhibits are deemed to accompany this report and are not “filed” as part of this report.

2	Submitted electronically herewith.

Attached as Exhibit 101 to this report are the following formatted in XBRL (Extensible Business Reporting Language): (i) Condensed Consolidated Balance Sheets as of March 31, 2012 and December 31, 2011, (ii) Condensed Consolidated Statements of Operations for the Three-Month Periods Ended March 31, 2012 and 2011, (iii) Condensed Consolidated Statements of Comprehensive (Loss) Income for the Three-Month Periods Ended March 31, 2012 and 2011, (iv) Consolidated Statement of Equity for the Three-Month Period Ended March 31, 2012, (v) Condensed Consolidated Statements of Cash Flows for the Three-Month Periods Ended March 31, 2012 and 2011, and (vi) Notes to Condensed Consolidated Financial Statements.

In accordance with Rule 406T of Regulation S-T, the XBRL related information in Exhibit 101 to this Quarterly Report on Form 10-Q shall not be deemed to be “filed” for purposes of Section 18 of the Exchange Act, or otherwise subject to the liability of that section, and shall not be part of any registration or other document filed under the Securities Act or the Exchange Act, except as shall be expressly set forth by specific reference in such filing.

- 66 -

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.


						DDR CORP.

May 9, 2012						/s/ Christa A. Vesy
(Date)						Christa A. Vesy
						Executive Vice President and Chief Accounting
						Officer (Authorized Officer)

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EXHIBIT INDEX


Exhibit No. Under Reg. S-K Item 601		Form 10-Q Exhibit No.	Description	Filed Herewith or Incorporated Herein by Reference
	10	10.1	Form Incentive Stock Option Agreement	Filed herewith
	10	10.2	Form Non-Qualified Stock Option Agreement	Filed herewith
	10	10.3	Form Restricted Shares Agreement	Filed herewith
	10	10.4	Employment Agreement, dated February 29, 2012, by and between the Company and Christa A. Vesy	Filed herewith
	31	31.1	Certification of principal executive officer pursuant to Rule 13a-14(a) of the Exchange Act of 1934	Filed herewith
	31	31.2	Certification of principal financial officer pursuant to Rule 13a-14(a) of the Exchange Act of 1934	Filed herewith
	32	32.1	Certification of CEO pursuant to Rule 13a-14(b) of the Exchange Act and 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of this report pursuant to the Sarbanes-Oxley Act of 2002 1	Filed herewith
	32	32.2	Certification of CFO pursuant to Rule 13a-14(b) of the Exchange Act and 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of this report pursuant to the Sarbanes-Oxley Act of 2002 1	Filed herewith
	101	101.INS	XBRL Instance Document	Submitted electronically herewith
	101	101.SCH	XBRL Taxonomy Extension Schema Document	Submitted electronically herewith
	101	101.CAL	XBRL Taxonomy Extension Calculation Linkbase Document	Submitted electronically herewith
	101	101.DEF	XBRL Taxonomy Extension Definition Linkbase Document	Submitted electronically herewith
	101	101.LAB	XBRL Taxonomy Extension Label Linkbase Document	Submitted electronically herewith
	101	101.PRE	XBRL Taxonomy Extension Presentation Linkbase Document	Submitted electronically herewith

- 68 -

Exhibit 10.1

STOCK OPTION AGREEMENT

(Incentive Stock Option Grant)

THIS AGREEMENT (the “Agreement”) is made as of by and between DDR CORP., an Ohio corporation (the “Company”), and , an individual (the “Holder”).

W I T N E S S E T H :

WHEREAS, the Company desires to provide the Holder with an option to purchase () Common Shares, $0.10 par value per share, of the Company (“Shares”), pursuant to the Company’s Equity-Based Award Plan (the “Plan”); and

WHEREAS, the Holder desires to accept such option.

NOW, THEREFORE, in consideration of the mutual covenants herein set forth, the parties hereto hereby agree as follows:

1. Grant of Option . The Company does hereby irrevocably grant to the Holder, and the Holder does hereby accept, the right and option (the “Option”) to purchase, at the option of the Holder, () Shares at the exercise price per Share of and upon and subject to the other terms and conditions hereof and the Plan.

2. Term of the Option; Vesting . The Option is exercisable, in whole or in part, once vested, in accordance with the following schedule. If the Holder is then employed by the Company, the Option shall vest as follows:


Date		No. of Shares Vesting

Shares for which the Option has become exercisable shall be referred to herein as “Vested Shares,” and Shares for which the Option has not become exercisable shall be referred to herein as “Unvested Shares.” The Option shall terminate on the tenth anniversary of the date hereof and must be exercised, if at all and to the extent exercisable, on or before such date and shall not thereafter be exercisable, notwithstanding anything herein to the contrary. Notwithstanding anything contained herein to the contrary, it shall be a condition to the Holder’s right to exercise the Option with respect to any Vested Shares that there shall have been filed with the Securities and Exchange Commission an effective registration statement on Form S-8 (or such other form as the Company shall deem necessary) with respect to the Shares to be received upon exercise.

3. Exercise . Subject to the other terms and conditions hereof, the Option shall be exercisable from time to time by written notice to the Company (in the form required by the Company) which shall:

(a)

state that the Option is thereby being exercised, the number of Shares with respect to which the Option is being exercised, each person in whose name any certificates for the Shares should be registered and such person’s address and social security number;

(b)

be signed by the person or persons entitled to exercise the Option and, if the Option is being exercised by anyone other than the Holder, be accompanied by proof satisfactory to counsel for the Company of the right of such person or persons to exercise the Option under the Plan and all applicable laws and regulations; and

(c)

be accompanied by such representations, warranties or agreements with respect to the investment intent of such person or persons exercising the Option as the Company may reasonably request, in form and substance satisfactory to counsel for the Company.

As conditions to the exercise of the Option and the obligation of the Company to issue Shares upon the exercise thereof, the proposed recipient of the Shares shall make any representation or warranty to comply with any applicable law or regulation or to confirm any factual matters reasonably requested by the Company or its counsel.

Upon exercise of the Option and the satisfaction of all conditions thereto, the Company shall deliver a certificate or certificates for Shares to the specified person or persons at the specified time upon receipt of the aggregate exercise price for such Shares by any method of payment authorized by the Plan.

4. Termination of Employment . Subject to the terms of a Holder’s Individual Agreement, if any, upon termination of the Holder’s employment with the Company, the Option will be governed by Section 5(b) of the Plan; provided, however, that the provisions of Section 12(a) of the Plan shall be applicable regarding the Option if, within two (2) years following a Change in Control (or 409A Change in Control, if defined in the Plan), the Holder’s employment with the Company or any Subsidiary or Affiliate is terminated without Cause. If, for any reason, the Option is not treated as an Incentive Stock Option (as defined below), subject to the terms of a Holder’s Individual Agreement, if any, the Option will be governed as follows upon termination of the Holder’s employment with the Company:

(a) Termination by Death . If the Holder’s employment with the Company or any Subsidiary or Affiliate terminates by reason of death, the Option shall become immediately and automatically vested and exercisable. If termination of the Holder’s employment is due to death, then the Option may thereafter be exercised by the estate of the Holder (acting through its fiduciary) at any time after the date of the Holder’s death (or as the Committee may specify after grant). Notwithstanding the foregoing, in no event will the Option be exercisable after the tenth anniversary of the date hereof.

(b) Termination by Reason of Disability . If the Holder’s employment with the Company or any Subsidiary or Affiliate terminates by reason of Disability, the Option shall become immediately and automatically vested and exercisable. If termination of the Holder’s employment is due to Disability, then the Option may thereafter be exercised by the Holder or by the Holder’s duly authorized legal representative if the Holder is unable to exercise the Option as a result of the Holder’s Disability, at any time after the date of such termination of employment (or such other period as the Committee may specify after grant). If the Holder dies before the Option is exercised, any unexercised Option held by the Holder shall thereafter be exercisable by the estate of the Holder (acting through its fiduciary) at any time after the date of the Holder’s death (or such other period as the Committee may specify after grant). Notwithstanding the foregoing, in no event will the Option be exercisable after the tenth anniversary of the date hereof.

(c) Termination Without Cause After a Change in Control or 409A Change in Control . Notwithstanding anything herein to the contrary, the provisions of Section 12(a) of the Plan shall be applicable regarding the Option only if, within two (2) years following a Change in Control (or 409A Change in Control, if defined in the Plan), the Holder’s employment with the Company or any Subsidiary or Affiliate is terminated without Cause.

(d) Termination for Cause . If the Holder’s employment with the Company or any Subsidiary or Affiliate terminates for Cause, the Option will be governed by Section 5(b) of the Plan.

(e) Other Termination . Unless otherwise determined by the Committee, if the Holder’s employment with the Company or any Subsidiary or Affiliate terminates other than in the circumstances described in paragraphs (a), (b), (c) or (d) of this Section 4, any Vested Shares at the time of termination must be exercised by the Holder within three (3) months after the date the Holder’s employment terminates. Notwithstanding the foregoing, in no event will the Option be exercisable after the tenth anniversary of the date hereof. Unless otherwise determined by the Committee, any Unvested Shares under the Option shall be forfeited upon termination.

(f) Leave of Absence . If the Holder is granted a leave of absence by the Company or any Subsidiary or Affiliate, his or her employment will not be considered terminated, and he or she will continue to be deemed an employee of the Company or Subsidiary or Affiliate during such leave of absence or any extension thereof granted by the Company, Subsidiary or Affiliate for purposes of the Plan.

5. Transferability . The Option and the Holder’s rights therein are not transferable by the Holder other than by will or the laws of descent and distribution or pursuant to a qualified domestic relations order (as defined in the Internal Revenue Code or the Employee Retirement Income Security Act of 1974, as amended). If, for any reason, the Option is not treated as an Incentive Stock Option, the Holder may transfer the Option, during his or her lifetime (a) to one or more members of such Holder’s family, (b) to one or more trusts for the benefit of one or more of such Holder’s family, (c) to a partnership or partnerships of members of such Holder’s family, or (d) to a charitable organization as defined in Section 501(c)(3) of the Code, provided that no consideration is paid for the transfer and that the transfer would not result in the loss of any exemption under Rule 16b-3 of the Securities Exchange Act of 1934, as amended, with respect to any Option. The transferee of any Option will be subject to all restrictions, terms and conditions applicable to the Option prior to its transfer.

6. Taxes . The Holder hereby agrees to pay to the Company, in accordance with the terms of the Plan, any federal, state or local taxes of any kind required by law to be withheld and remitted by the Company with respect to an exercise of the Option. The Holder may satisfy such tax obligation, in whole or in part, by (a) electing to have the Company withhold a portion of the Shares otherwise to be delivered upon exercise of (or the lapse of restrictions relating to) the Option with a Fair Market Value equal to the amount of such taxes, or (b) delivering to the Company Shares other than Shares issuable upon exercise of (or the lapse of restrictions relating to) the Option with a Fair Market Value equal to the amount of such taxes. The election, if any, must be made on or before the date that the amount of tax to be withheld is determined. If the Holder does not make such payment to the Company, the Company shall have the right to withhold from any payment of any kind otherwise due to the Holder from the Company, any federal, state or local taxes of any kind required by law to be withheld with respect to an exercise of the Option or the Shares which are the subject of such Option.

7. Subject to the Plan . This Agreement is made and the Option evidenced hereby is granted under and pursuant to, and they are expressly made subject to all of the terms and conditions of, the Plan, notwithstanding anything herein to the contrary. The Holder hereby acknowledges receipt of a copy of the Plan and that the Holder has read and understands the terms and conditions of the Plan. Capitalized terms not defined herein are used as defined in the Plan.

8. Intent . The Option is intended to be treated as an Incentive Stock Option within the meaning of Section 422 of the Internal Revenue Code (an “Incentive Stock Option”). The Option shall be construed and exercised consistent with such intention. It is acknowledged that the United States Treasury Department may amend or modify from time to time its regulations governing Incentive Stock Options. Accordingly, it is understood and agreed by the Holder that the Company may amend or modify the Plan and this Agreement in any respect deemed by the Company to be necessary or desirable to comply with such regulations, as amended or modified from time to time or to meet the requirements for an Incentive Stock Option.

9. Securities Law Compliance .

(a) Notwithstanding any provision of this Agreement to the contrary, the Option shall not be exercisable unless, at the time the Holder attempts to exercise the Option, in the opinion of counsel for the Company, all applicable securities laws, rules and regulations have been complied with. The Holder agrees that the Company may impose such restrictions on the Shares as are deemed advisable by the Company, including, without limitation, restrictions relating to listing or trading requirements. The Holder further agrees that certificates representing the Shares may bear such legends and statements as the Company shall deem appropriate or advisable to assure, among other things, compliance with applicable securities laws, rules and regulations.

(b) The Holder agrees that any Shares which the Holder may acquire by virtue of the Option may not be transferred, sold, assigned, pledged, hypothecated or otherwise disposed of by the Holder unless (i) a registration statement or post-effective amendment to a registration statement under the Securities Act of 1933, as amended, with respect to such Shares has become effective so as to permit the sale or other disposition of such Shares by the Holder, or (ii) there is presented to the Company an opinion of counsel satisfactory to the Company to the effect that the sale or other proposed disposition of such Shares by the Holder may lawfully be made otherwise than pursuant to an effective registration statement of post-effective amendment to a registration statement relating to such Shares under the Securities Act of 1933, as amended.

10. Rights of the Holder . The granting of the Option shall in and of itself not confer any right on the Holder to continue in the employ of the Company and shall not interfere in any way with the right of the Company to terminate the Holder’s employment at any time, subject to the terms of any employment agreement between the Company and the Holder. The Holder shall have no dividend, voting or other rights of a stockholder with respect to the Shares which are subject to the Option prior to the purchase of such Shares upon exercise of the Option and the execution and delivery of all other documents and instruments deemed necessary or desirable by the Company.

11. Governing Law . This Agreement shall be governed by and construed in accordance with the laws of the State of Ohio, except to the extent otherwise governed by Federal law.

IN WITNESS WHEREOF, the parties have subscribed their names hereto as of the date first above written.


DDR Corp., an Ohio corporation

By:


Holder’s Signature:

Exhibit 10.2

STOCK OPTION AGREEMENT

(Non-Qualified Stock Option Grant)

THIS AGREEMENT (the “Agreement”) is made as of , by and between DDR CORP., an Ohio corporation (the “Company”), and , an individual (the “Holder”).

W I T N E S S E T H :

WHEREAS, the Company desires to provide the Holder with an option to purchase ( ) Common Shares, $0.10 par value per share, of the Company (“Shares”), pursuant to the Company’s Equity-Based Award Plan (the “Plan”); and

WHEREAS, the Holder desires to accept such option.

NOW, THEREFORE, in consideration of the mutual covenants herein set forth, the parties hereto hereby agree as follows:

1. Grant of Option . The Company does hereby irrevocably grant to the Holder, and the Holder does hereby accept, the right and option (the “Option”) to purchase, at the option of the Holder, ( ) Shares at the exercise price per Share of and upon and subject to the other terms and conditions hereof and the Plan.


Date		No. of Shares Vesting

3. Exercise . Subject to the other terms and conditions hereof, the Option shall be exercisable from time to time by written notice to the Company (in the form required by the Company) which shall:

(a)

(b)

(c)

(d) Termination for Cause . If the Holder’s employment with the Company or any Subsidiary or Affiliate terminates for Cause, the Option will be governed by Section 5(b) of the Plan.

5. Transferability . The Holder may transfer the Option, during his or her lifetime (a) to one or more members of such Holder’s family, (b) to one or more trusts for the benefit of one or more of such Holder’s family, (c) to a partnership or partnerships of members of such Holder’s family, or (d) to a charitable organization as defined in Section 501(c)(3) of the Code, provided that no consideration is paid for the transfer and that the transfer would not result in the loss of any exemption under Rule 16b-3 of the Securities Exchange Act of 1934, as amended, with respect to any Option. The Option and the Holder’s rights therein are also transferable by will or the laws of descent and distribution or pursuant to a qualified domestic relations order (as defined in the Internal Revenue Code or the Employee Retirement Income Security Act of 1974, as amended). The transferee of any Option will be subject to all restrictions, terms and conditions applicable to the Option prior to its transfer.

8. Intent . The Option is intended to be treated as a Non-Qualified Stock Option and not as an incentive stock option within the meaning of Section 422 of the Internal Revenue Code. The Option shall be construed and exercised consistent with such intention.

9. Securities Law Compliance .

(b) The Holder agrees that any Shares which the Holder may acquire by virtue of the Option may not be transferred, sold, assigned, pledged, hypothecated or otherwise disposed of by the Holder unless (i) a registration statement or post-effective amendment to a registration statement under the Securities Act of 1933, as amended, with respect to such Shares has become effective so as to permit the sale or other disposition of such Shares by the Holder, or (ii) there is presented to the Company an opinion of counsel satisfactory to the Company to the effect that the sale or other proposed disposition of such Shares by the Holder may lawfully be made otherwise than pursuant to an effective registration statement or post-effective amendment to a registration statement relating to such Shares under the Securities Act of 1933, as amended.

11. Governing Law . This Agreement shall be governed by and construed in accordance with the laws of the State of Ohio, except to the extent otherwise governed by Federal law.

IN WITNESS WHEREOF, the parties have subscribed their names hereto as of the date first above written.


DDR Corp., an Ohio corporation

By:


Holder’s Signature:

Exhibit 10.3

RESTRICTED SHARES AGREEMENT

DDR Corp., an Ohio corporation (the “Company”), has granted to (the “Holder”), () of the Company’s Common Shares, $0.10 par value per share (the “Restricted Shares”). The Restricted Shares have been granted pursuant to the DDR Corp. Equity-Based Award Plan (the “Plan”) and are subject to all provisions of the Plan, which are hereby incorporated herein by reference, and to the following provisions of this Restricted Shares Agreement (the “Agreement”) (capitalized terms not defined herein are used as defined in the Plan):

§1. Vesting . The Restricted Shares will vest in annual 20% increments with the first () Restricted Shares vesting on (each such date a “Vesting Date”).

§2. Purchase Price . The purchase price of the Restricted Shares is $-0-.

§3. Transferability . The Holder may transfer Restricted Shares prior to vesting, during his or her lifetime (a) to one or more members of such Holder’s family, (b) to one or more trusts for the benefit of one or more of such Holder’s family, or (c) to a partnership or partnerships of members of such Holder’s family, provided that no consideration is paid for the transfer and that the transfer would not result in the loss of any exemption under Rule 16b-3 of the Securities Exchange Act of 1934, as amended, with respect to the Restricted Shares. The Restricted Shares are also transferable by will or the laws of descent and distribution or pursuant to a qualified domestic relations order (as defined in the Internal Revenue Code or the Employee Retirement Income Security Act of 1974, as amended). The transferee of any Restricted Shares will be subject to all restrictions, terms, and conditions applicable to the Restricted Shares.

§4. Termination of Employment . Subject to the terms of a Holder’s Individual Agreement, if any, if the Holder’s employment by the Company or any Subsidiary or Affiliate terminates prior to all of the Restricted Shares vesting, the Restricted Shares will vest or be forfeited as follows:

(a) Termination by Death . If the Holder’s employment with the Company or any Subsidiary or Affiliate terminates by reason of death, all Restricted Shares shall vest and any restriction shall lapse.

(b) Termination by Reason of Disability . If the Holder’s employment with the Company or any Subsidiary or Affiliate terminates by reason of Disability, all Restricted Shares shall vest and any restriction shall lapse.

(c) Termination Without Cause After a Change in Control or 409A Change in Control . The provisions of Section 12(a) of the Plan shall be applicable regarding the Restricted Shares only if, within two (2) years following a Change in Control or 409A Change in Control, the Holder’s employment with the Company or any Subsidiary or Affiliate is terminated without Cause.

(d) Other Termination . Unless otherwise determined by the Committee, if the Holder’s employment with the Company or any Subsidiary or Affiliate terminates other than in the circumstances described in paragraphs (a), (b) or (c) of this Section 4, any Restricted Shares which are unvested or subject to restrictions at the time of termination will be forfeited upon termination.

(e) Leave of Absence . If the Holder is granted a leave of absence by the Company or any Subsidiary or Affiliate, his or her employment will not be considered terminated, and he or she will continue to be deemed an employee of the Company or Subsidiary or Affiliate during such leave of absence or any extension thereof granted by the Company, Subsidiary or Affiliate for purposes of the Plan.

§5. Dividends . All dividends payable on the Restricted Shares (whether or not vested) will be payable in the same manner as paid to other shareholders. All cash dividends payable on unvested Restricted Shares shall be paid in unrestricted cash. In the case of dividends payable on unvested Restricted Shares in shares or other property, the shares or other property so payable shall be subject to the same restrictions and other terms and conditions that apply to the Restricted Shares unless otherwise determined by the Committee or the Board at the time the dividend is authorized.

§6. Taxes . The Holder hereby agrees to pay to the Company, in accordance with the terms of the Plan, any federal, state or local taxes of any kind required by law to be withheld and remitted by the Company with respect to the Restricted Shares. The Holder may satisfy such tax obligation, in whole or in part, by (a) electing to have the Company withhold a portion of the Shares otherwise to be delivered upon vesting of the Restricted Shares with a Fair Market Value equal to the amount of such taxes, or (b) delivering to the Company other Shares with a Fair Market Value equal to the amount of such taxes. The election, if any, must be made on or before the date that the amount of tax to be withheld is determined. If the Holder does not make such payment to the Company, the Company shall have the right to withhold from any payment of any kind otherwise due to the Holder from the Company, any federal, state or local taxes of any kind required by law to be withheld with respect to the award or vesting of the Restricted Shares.

§7. Deferral . The Holder may, in his or her sole discretion, with respect to this award of Restricted Shares, elect to participate in any equity deferred compensation plan established by the Company, in which case such plan shall govern amounts deferred.

§8. Subject to the Plan . This Agreement is made and the Restricted Shares evidenced hereby are granted under and pursuant to, and they are expressly made subject to all of the terms and conditions of, the Plan, notwithstanding anything herein to the contrary. The Holder hereby acknowledges receipt of a copy of the Plan and that the Holder has read and understands the terms and conditions of the Plan.

§9. Securities Law Compliance .

(a) The Holder agrees that the Company may impose such restrictions on the Shares as are deemed advisable by the Company, including, without limitation, restrictions relating to listing or trading requirements. The Holder further agrees that certificates representing the Shares may bear such legends and statements as the Company shall deem appropriate or advisable to assure, among other things, compliance with applicable securities laws, rules and regulations.

(b) The Holder agrees that any Shares which the Holder may acquire by virtue of this Agreement may not be transferred, sold, assigned, pledged, hypothecated or otherwise disposed of by the Holder unless (i) a registration statement or post-effective amendment to a registration statement under the Securities Act of 1933, as amended, with respect to such Shares has become effective so as to permit the sale or other disposition of such Shares by the Holder, or (ii) there is presented to the Company an opinion of counsel satisfactory to the Company to the effect that the sale or other proposed disposition of such Shares by the Holder may lawfully be made otherwise than pursuant to an effective registration statement or post-effective amendment to a registration statement relating to such Shares under the Securities Act of 1933, as amended.

§10. Rights of the Holder . The granting of the Restricted Shares shall in and of itself not confer any right of the Holder to continue in the employ of the Company and shall not interfere in any way with the right of the Company to terminate the Holder’s employment at any time, subject to the terms of any employment agreement between the Company and the Holder.

§11. Governing Law . This Agreement shall be governed by and construed in accordance with the laws of the State of Ohio, except to the extent otherwise governed by Federal law.

THE REMAINDER OF THIS PAGE IS INTENTIONALLY BLANK

IN WITNESS WHEREOF, the parties have subscribed their names hereto.


DDR Corp., an Ohio corporation

By:

DATE OF GRANT:

ACCEPTANCE OF AGREEMENT

The Holder hereby:

(a) Acknowledges that he/she has received a copy of the Plan and a copy of the Company’s most recent Annual Report and other communications routinely distributed to the Company’s shareholders;

(b) Accepts this Agreement and the Restricted Shares granted to him/her under this Agreement subject to all provisions of the Plan and this Agreement;

(c) Represents and warrants to the Company that he/she is acquiring the Restricted Shares for his/her own account, for investment, and not with a view to or any present intention of selling or distributing the Restricted Shares either now or at any specific or determinable future time or period or upon the occurrence or nonoccurrence of any predetermined or reasonably foreseeable event; and

(d) Agrees that no transfer of the Restricted Shares will be made unless the Restricted Shares have been duly registered under all applicable Federal and state securities laws pursuant to a then-effective registration which contemplates the proposed transfer or unless the Company has received the written opinion of, or satisfactory to, its legal counsel that the proposed transfer is exempt from such registration.



Holder’s Signature:

Exhibit 10.4

EMPLOYMENT AGREEMENT

This Employment Agreement (this “Agreement”) is entered into on February 29, 2012, between DDR Corp., an Ohio corporation (“DDR”), and Christa A. Vesy (“Executive”).

Executive is now serving DDR as its Senior Vice President & Chief Accounting Officer. Executive and DDR are currently party to an Employment Agreement, dated April 12, 2011, which will expire on February 28, 2012. DDR and Executive desire to enter into this Agreement effective on February 29, 2012 (the “Effective Date”) to reflect the terms pursuant to which Executive will continue to serve DDR. Certain capitalized terms used in this Agreement have the meanings ascribed to them in Section 21 of this Agreement.

DDR and Executive agree, effective as of the Effective Date, as follows:

1. Employment, Term . DDR engages and employs Executive to render services in the administration and operation of its affairs as its Executive Vice President & Chief Accounting Officer, reporting directly to DDR’s Chief Financial Officer (the “CFO”), all in accordance with the terms and conditions of this Agreement, for a term beginning on the Effective Date and expiring on February 28, 2013. The period of time from the Effective Date until February 28, 2013 is sometimes referred to herein as the “Contract Period.”

2. Full-Time Services . Throughout the Contract Period while Executive is employed by DDR, Executive will devote all of Executive’s business time and efforts to the service of DDR, except for (a) usual vacation periods and reasonable periods of illness, (b) reasonable periods of time devoted to Executive’s personal financial affairs, and (c) services as a director or trustee of other corporations or organizations, either for profit or not for profit, that are not in competition with DDR; provided , that in no event shall Executive devote less than 90% of Executive’s business time and efforts to the service of DDR.

3. Compensation . For all services to be rendered by Executive to DDR under this Agreement during the Contract Period while Executive is employed by DDR, including services as Executive Vice President & Chief Accounting Officer, and any other services specified by the CFO, DDR will pay and provide to Executive the compensation and benefits specified in this Section 3 .

3.1 Base Salary . From and after the Effective Date and through the Contract Period while Executive is employed by DDR, DDR will pay Executive base salary (the “Base Salary”), in equal monthly or more frequent installments, at the rate of not less than Two Hundred Fifty-Five Thousand Dollars ($255,000) per year, subject to such increases as approved by DDR.

3.2 Annual Cash Bonus . In addition to Base Salary, if Executive achieves the factors and criteria for annual bonus compensation hereinafter described for any calendar year (beginning with 2012) during the Contract Period while Executive is employed by DDR, then DDR shall pay an annual bonus to Executive, in cash (an “Annual Cash Bonus”), for such calendar year not later than March 15 of the immediately subsequent calendar year, determined and calculated in accordance with the percentages set forth on Exhibit A attached hereto. DDR’s award of an Annual Cash Bonus to Executive shall be determined based on the factors and criteria that may be established from time to time for the calculation of the Annual Cash Bonus by DDR; provided , that for 2012, the Annual Cash Bonus for Executive will be determined in accordance with the performance metrics and their relative weighting set forth on Exhibit A attached hereto. For 2013, if Executive

is then employed by DDR, DDR will provide Executive with written notice of the performance metrics and their relative weighting to be used in, and any specific threshold, target and maximum performance targets applicable to, the determination of the Annual Cash Bonus for Executive for such calendar year not later than March 15th of such year. There is no guaranteed Annual Cash Bonus under this Agreement, and for each applicable year, Executive’s Annual Cash Bonus could be as low as zero or as high as the maximum percentage set forth on Exhibit A attached hereto.

3.3 Annual Equity Bonus . If Executive achieves the factors and criteria for an Annual Cash Bonus, as described in Section 3.2, for any calendar year (beginning with 2012) during the Contract Period while Executive is employed by DDR, then DDR shall pay an annual bonus to Executive, in the form of a time-based vesting equity award (an “Annual Equity Bonus”), for such calendar year not later than March 15 of the immediately subsequent calendar year, determined and calculated in accordance with the percentages set forth on Exhibit A attached hereto. DDR’s award of an Annual Equity Bonus to Executive shall be determined based on the factors and criteria that may be established from time to time for the calculation of the Annual Equity Bonus by DDR; provided, that for 2012, the Annual Equity Bonus for Executive will be determined in accordance with the performance metrics and their relative weighting set forth on Exhibit A attached hereto. For 2013, if Executive is then employed by DDR, DDR will provide Executive with written notice of the performance metrics and their relative weighting to be used in, and any specific threshold, target and maximum performance targets applicable to, the determination of the Annual Equity Bonus for Executive for such calendar year not later than March 15th of such year. There is no guaranteed Annual Equity Bonus under this Agreement, and for each applicable year, Executive’s Annual Equity Bonus could be as low as zero or as high as the maximum percentage set forth on Exhibit A attached hereto. The Annual Equity Bonus shall be on the terms and subject to such conditions as are specified for the particular Company plans or programs pursuant to which the Annual Equity Bonus is granted.

3.4 Equity Awards . During the Contract Period while Executive is employed by DDR, Executive shall be entitled to participate in any equity or other employee benefit plan that is generally available to senior executive officers, as distinguished from general management, of DDR, including, without limitation, any long-term incentive compensation plans or similar programs. Executive’s participation in and benefits under any such plans or programs shall be on the terms and subject to such conditions as are specified for the particular Company plans or programs.

3.5 Taxes . Executive shall be solely responsible for taxes imposed on Executive by reason of any compensation and benefits provided under this Agreement, and all such compensation and benefits shall be subject to applicable withholding taxes.

4. Benefits .

4.1 Retirement and Other Benefit Plans Generally . Throughout the Contract Period while Executive is employed by DDR, Executive will be entitled to participate in all retirement and other benefit plans maintained by DDR that are generally available to its employees and with respect to which Executive is eligible pursuant to the terms of the underlying plan or plans, including, without limitation, the DDR 401(k) plan for its employees and any DDR deferred compensation program.

4.2 Insurance, Generally . Throughout the Contract Period while Executive is employed by DDR, DDR will provide an enrollment opportunity to Executive and Executive’s eligible dependents for health, dental and vision insurance coverage and any other benefits maintained by DDR from time to time, if any, during the Contract Period that are generally available to its employees and with respect to which Executive is eligible pursuant to the terms of the underlying plan or plans.

4.3 Paid Time Off . Executive will be entitled to such periods of paid time off during the Contract Period while Executive is employed by DDR as may be determined by the CFO in his or her reasonable and good faith discretion (but in any event not less than 20 days per year or such longer period as may be provided from time to time under any DDR paid time off policy for executive officers).

5. Expense Reimbursement . DDR will reimburse Executive during the Contract Period while Executive is employed by DDR for travel, entertainment, and other expenses reasonably and necessarily incurred by Executive in connection with DDR’s business. Executive will provide such documentation with respect to expenses to be reimbursed as DDR may reasonably request.

6. Termination .

6.1 Death or Disability . Executive’s employment under this Agreement will terminate immediately upon Executive’s death. DDR may terminate Executive’s employment under this Agreement immediately upon giving notice of termination if Executive is Totally Disabled (as that term is defined in Section 9.1 below) for an aggregate of 120 days in any consecutive 12 calendar months or for 90 consecutive days.

6.2 For Cause by DDR.

(a) During the Contract Period while Executive is employed by DDR, DDR may terminate Executive’s employment under this Agreement for “Cause” at any time upon the occurrence of any of the following circumstances:

(i) (A) Executive commits a fraud or a felony or an act that is not or a series of acts that are not taken in good faith and (B) the commission of such fraud, felony or act or series of acts results in material injury to the business reputation of DDR.

(ii) Executive commits an act or series of repeated acts of dishonesty that are materially inimical to the best interests of DDR.

(iii) Other than as a result of disability, Executive consistently fails to perform Executive’s duties and responsibilities as specified in Sections 1 and 2 above and the failure continues for 15 days after DDR has advised Executive in writing of that failure.

(iv) Executive has materially breached any provision of this Agreement (other than Section 1 or 2 above, as to any breach of which Section 6.2(a)(iii) would apply) and the breach has not been cured in all substantial respects within 30 days after DDR has advised Executive in writing of the nature of the breach.

(b) The termination of Executive’s employment under this Agreement shall not be deemed to be for Cause pursuant to this Section 6.2 unless and until there shall have been delivered to Executive reasonable notice that Executive is guilty of the conduct described in Sections 6.2(a)(i) , (ii) , (iii) or (iv) above, and specifying the particulars thereof in detail.

6.3 For Good Reason by Executive . During the Contract Period while Executive is employed by DDR, Executive may terminate Executive’s employment under this Agreement for “Good Reason” if any of the following circumstances occur:

(a) DDR materially changes Executive’s duties and responsibilities from those set forth in Section 1 above and the change has not been rescinded to Executive’s satisfaction within 15 days after Executive has advised DDR in writing of dissatisfaction with the change.

(b) DDR changes Executive’s place of employment or its principal executive offices to a location that is more than 50 miles from the geographical center of Cleveland, Ohio.

(c) DDR materially breaches any of its obligations under this Agreement (other than its obligations under Section 1 above, as to any breach of which Section 6.3(a) would apply) and the breach is not cured in all material respects within 30 days after Executive has advised DDR in writing of the breach.

6.4 Without Cause by DDR . During the Contract Period while Executive is employed by DDR, DDR may terminate Executive’s employment under this Agreement at any time without Cause pursuant to written notice provided to Executive not less than 90 days in advance of such termination. Any termination under this Section 6.4 will be effective at such time during the Contract Period while Executive is employed by DDR as may be specified in that written notice.

6.5 Without Good Reason by Executive . During the Contract Period while Executive is employed by DDR, Executive may terminate Executive’s employment under this Agreement at any time without Good Reason pursuant to written notice provided to DDR not less than 90 days in advance of such termination. Any termination under this Section 6.5 will be effective at such time during the Contract Period while Executive is employed by DDR as Executive may specify in that written notice.

7. Payments upon Termination .

7.1 Upon Termination For Cause or Without Good Reason . If Executive’s employment under this Agreement is terminated by DDR for Cause or by Executive without Good Reason during the Contract Period, DDR will pay and provide to Executive the Executive’s Base Salary through the Termination Date to the extent not already paid and continuing health, dental and vision insurance at the levels specified in Section 4.2 through the Termination Date, and, except as may otherwise be required by law, DDR will not pay or provide to Executive any further compensation or other benefits under this Agreement. DDR will pay any Base Salary referred to in this Section 7.1 to Executive within 30 days of the Termination Date.

7.2 Upon Termination Without Cause or For Good Reason . If Executive’s employment under this Agreement is terminated by DDR without Cause or by Executive for Good Reason during the

Contract Period and Section 7.5 does not apply, DDR will pay and provide to Executive the amounts and benefits specified in this Section 7.2 , except that DDR will not be obligated to pay the lump sum amounts specified in Section 7.2(c) unless either (x) DDR is deemed to have waived the obligation to provide a Release as provided in Section 8.2 or (y) Executive has timely executed a Release as contemplated by Section 8.3 . The amounts and benefits specified in this Section 7.2 are as follows:

(a) A lump sum amount equal to Executive’s Base Salary for the year through the Termination Date, to the extent not already paid. DDR will pay this amount to Executive within 30 days of the Termination Date.

(b) A lump sum amount equal to Executive’s Annual Cash Bonus earned for the calendar year immediately preceding the calendar year in which the Termination Date occurs, to the extent not already paid. DDR will pay this amount to Executive on the same date and in the same amount that the Annual Cash Bonus for such year would have been paid if Executive’s employment had not been terminated, but in any event not later than March 15 of the calendar year in which the Termination Date occurs.

(c) A lump sum amount equal to (i) one year of Executive’s Base Salary as of the Termination Date, plus (ii) the Annual Cash Bonus at the target level for Executive for the year in which the Termination Date occurs. Except as otherwise provided in Section 13.2 , DDR will pay the amount referred to in this Section 7.2(c)(i) to Executive during the Seventh Month after the Termination Date (as defined in Section 13.1 below) and will pay the amount referred to in this Section 7.2(c)(ii) to Executive on the same date that the Annual Cash Bonus for that year would have been paid if Executive’s employment had not been terminated, but in any event not later than March 15 of the calendar year following the calendar year in which Executive’s employment is terminated pursuant to this Section 7.2 .

(d) Provided that Executive timely elects continuation coverage under DDR’s health and dental plan pursuant to COBRA, DDR shall pay the COBRA premiums for Executive until the first anniversary of the Termination Date. Such payments shall be taxable to the Executive. To assure compliance with Section 409A, the timing of the provision of these benefits will be subject to Sections 13.1 and 13.3 if and to the extent either of those sections is applicable according to its terms.

(e) Outplacement services and support, the reasonable scope and provider of which will be selected by DDR, for a period of one year following the Termination Date; provided , that Executive must first utilize such outplacement services and support within 90 days following the Termination Date. To assure compliance with Section 409A, the timing of the provision of these benefits will be subject to Sections 13.1 and 13.3 if and to the extent either of those sections is applicable according to its terms.

7.3 Upon Termination by Reason of Death . If Executive’s employment under this Agreement is terminated by reason of Executive’s death during the Contract Period, DDR will pay, or cause to be paid, and provide, or cause to be provided, to Executive’s personal representative and Executive’s eligible dependents, as appropriate, the amounts and benefits specified in this Section 7.3 , except that DDR will not be obligated to pay the lump sum amount specified in Section 7.3(c) unless either (x) DDR is deemed to have waived the obligation to provide a

Release as provided in Section 8.2 or (y) Executive’s personal representative has timely executed a Release as contemplated by Section 8.3 . The amounts and benefits specified in this Section 7.3 are as follows:

(a) A lump sum amount equal to Executive’s Base Salary for the year through the Termination Date, to the extent not already paid. DDR will pay this amount to Executive’s personal representative within 30 days of the Termination Date.

(b) A lump sum amount equal to Executive’s Annual Cash Bonus earned for the calendar year immediately preceding the calendar year in which the Termination Date occurs, to the extent not already paid. DDR will pay this amount to Executive’s personal representative on the same date and in the same amount that the Annual Cash Bonus for such year would have been paid if Executive’s employment had not been terminated, but in any event not later than March 15 of the calendar year in which the Termination Date occurs.

(c) A lump sum amount equal to (i) one year of Executive’s Base Salary as of the Termination Date, plus (ii) the Annual Cash Bonus at the target level for Executive for the year in which the Termination Date occurs. Except as otherwise provided in Section 13.2 , DDR will pay the amount referred to in this Section 7.3(c)(i) to Executive’s personal representative as soon as practicable following Executive’s death, but in no event later than March 15 of the year after the year in which Executive’s death occurs (provided that neither Executive nor Executive’s estate may designate the taxable year of payment) and will pay the amount referred to in this Section 7.3(c)(ii) to Executive on the same date that the Annual Cash Bonus for that year would have been paid if Executive’s employment had not been terminated, but in any event not later than March 15 of the calendar year following the calendar year in which Executive’s employment is terminated.

(d) Continuing health, dental and vision insurance coverage and benefits to Executive’s eligible dependents at the levels specified in Section 4.2 until the first anniversary of the Termination Date. To assure compliance with Section 409A, the timing of the provision of these benefits will be subject to Sections 13.1 and 13.3 if and to the extent either of those sections is applicable according to its terms.

7.4 Upon Termination by Reason of Disability . If Executive’s employment under this Agreement is terminated by DDR pursuant to Section 6.1 during the Contract Period following Executive’s disability, DDR will pay and provide to Executive and Executive’s eligible dependents, as appropriate, the amounts and benefits specified in this Section 7.4 . The amounts and benefits specified in this Section 7.4 are as follows:

Executive’s employment had not been terminated, but in any event not later than March 15 of the calendar year in which the Termination Date occurs.

(c) A lump sum amount equal to (i) Executive’s Base Salary for one year as of the Termination Date, plus (ii) the Annual Cash Bonus for Executive at the target level for the year in which the Termination Date occurs. Except as otherwise provided in Section 13.2 , DDR will pay the amount referred to in this Section 7.4(c)(i) to Executive during the Seventh Month after the Termination Date (as defined in Section 13.1 below) and will pay the amount referred to in this Section 7.4(c)(ii) to Executive on the same date that the Annual Cash Bonus for that year would have been paid if Executive’s employment had not been terminated, but in any event not later than March 15 of the calendar year following the calendar year in which Executive’s employment is terminated by DDR.

(d) Continuing health, dental and vision insurance coverage and benefits to Executive and Executive’s eligible dependents at the levels specified in Section 4.2 until the first anniversary of the Termination Date. To assure compliance with Section 409A, the timing of the provision of these benefits will be subject to Sections 13.1 and 13.3 if and to the extent either of those sections is applicable according to its terms.

7.5 Upon Termination In Connection With a Change in Control . Upon the occurrence of a Triggering Event during the Contract Period while Executive is employed by DDR, DDR will pay and provide to Executive the amounts and benefits specified in this Section 7.5 , and DDR will be deemed to have waived its right to provide a Release as provided in Section 8.2 , and the provision of a Release will not be a condition to Executive receiving any payment or benefit from DDR under this Section 7.5 . The amounts and benefits specified in this Section 7.5 are as follows:

(a) A lump sum amount equal to Executive’s Base Salary through the Termination Date, to the extent not already paid. DDR will pay this amount to Executive within 30 days of the Termination Date.

(c) A lump sum amount equal to (i) two times Executive’s target Annual Cash Bonus for the year in which the Termination Date occurs plus (ii) two times Executive’s annual Base Salary as of the Termination Date. Except as otherwise provided in Section 13.2 , DDR will pay this amount to Executive during the Seventh Month after the Termination Date (as defined in Section 13.1 below).

(d) Provided that Executive timely elects continuation coverage under DDR’s health and dental plan pursuant to COBRA, DDR shall pay the COBRA premiums for the Executive until the 18-month anniversary of the Termination Date. Such payments shall be taxable to Executive. To assure compliance with Section 409A, the timing of the provision of

these benefits will be subject to Sections 13.1 and 13.3 if and to the extent either of those sections is applicable according to its terms.

8. Release . This Section 8 will apply only upon termination of Executive’s employment during the Contract Period (a) by reason of Executive’s death, (b) by DDR without Cause or (c) by Executive for Good Reason.

8.1 Presentation of Release by DDR . If this Section 8 applies, DDR may present to Executive (or in the case of Executive’s death or legal incapacity, to Executive’s personal representative), not later than 21 days after the Termination Date, a form of release (a “Release”) of all current and future claims, known or unknown, arising on or before the date on which the Release is to be executed, that Executive or Executive’s assigns have or may have against DDR or any Subsidiary, and the directors, officers, and affiliates of any of them, in such form as may reasonably be presented by DDR together with a covering message in which DDR advises Executive (or Executive’s personal representative) that the Release is being presented in accordance with this Section 8.1 and that a failure by Executive (or Executive’s personal representative) to execute and return the Release as contemplated by Section 8.3 would relieve DDR of the obligation to make payments otherwise due to Executive (or to Executive’s personal representative) under one or more portions of either of Sections 7.2 or 7.3 , as the case may be.

8.2 Effect of Failure by DDR to Present Release . If DDR fails to present a Release and covering message to Executive (or Executive’s personal representative) as contemplated by Section 8.1 , DDR will be deemed to have waived the requirement that Executive (or Executive’s personal representative) execute a Release as a condition to receiving payments under any portion of either of Sections 7.2 or 7.3 , as the case may be.

8.3 Execution of Release by Executive or Executive’s Personal Representative . If DDR does present a Release and covering message to Executive (or Executive’s personal representative) as contemplated by Section 8.1 , Executive (or Executive’s personal representative) will have until 50 days after the Termination Date ( i.e. , at least 29 days after presentation of the Release to Executive (or Executive’s personal representative) within which to deliver an executed copy of the Release to DDR and thereby satisfy the condition to receiving payments under any portion of either of Sections 7.2 or 7.3 , as the case may be, provided that Executive (or Executive’s personal representative) does not revoke the execution of the Release during any applicable revocation period.

8.4 Effect of Failure to Execute Release or of Revocation of Release . If Executive (or Executive’s personal representative) fails to deliver an executed copy of the Release to DDR within 50 days after the Termination Date or revokes the execution of the Release during any applicable revocation period, Executive (or Executive’s personal representative) will be deemed to have waived the right to receive all payments under Sections 7.2 or 7.3 , as the case may be, that were conditioned on the Release.

9. Disability Definitions; Physical Examination .

9.1 Definitions . For all purposes of this Agreement:

(a) Executive’s “Own Occupation” means the regular occupation in which Executive is engaged under this Agreement at the time Executive becomes disabled.

(b) “Total Disability” means that, because of sickness or injury, Executive is not able to perform the material and substantial duties of Executive’s Own Occupation.

(c) “Totally Disabled” means that Executive suffers from Total Disability (and Executive will be deemed to continue to be Totally Disabled so long as Executive is not able to work in Executive’s Own Occupation even if Executive works in some other capacity).

9.2 Physical Examination . If either DDR or Executive, at any time or from time to time after receipt of notice of Executive’s Total Disability from the other, desires to contend that Executive is not Totally Disabled, Executive will promptly submit to a physical examination by the chief of medicine of any major accredited hospital in the Cleveland, Ohio area and, unless that physician issues his or her written statement to the effect that, in his or her opinion, based on his or her diagnosis, Executive is capable of resuming Executive’s Own Occupation and devoting Executive’s full time and energy to discharging the duties of Executive’s Own Occupation, Executive will be deemed to be and to continue to be Totally Disabled for all purposes of this Agreement.

10. No Set-Off; No Obligation to Seek Other Employment or to Otherwise Mitigate Damages; No Effect Upon Other Plans . DDR’s obligation to make the payments provided for in this Agreement and otherwise to perform its obligations under this Agreement will not be affected by any set-off, counterclaim, recoupment, defense, or other claim whatsoever that DDR or any Subsidiary may have against Executive, except that the prohibition on set-off, counterclaim, recoupment, defense, or other claim contained in this sentence will not apply if Executive’s employment is terminated by DDR for Cause. Executive will not be required to mitigate damages or the amount of any payment provided for under this Agreement by seeking other employment or otherwise. The amount of any payment provided for under this Agreement will not be reduced by any compensation or benefits earned by Executive as the result of employment by another employer or otherwise after the Termination Date. Neither the provisions of this Agreement nor the making of any payment provided for under this Agreement, nor the termination of DDR’s obligations under this Agreement, will reduce any amounts otherwise payable, or in any way diminish Executive’s rights, under any incentive compensation plan, stock option or stock appreciation rights plan, restricted stock plan or agreement, deferred compensation, retirement, or supplemental retirement plan, stock purchase and savings plan, disability or insurance plan, or other similar contract, plan, or arrangement of DDR or any Subsidiary, all of which will be governed by their respective terms.

11. Payments Are in Lieu of Severance Payments . If Executive becomes entitled to receive payments under this Agreement as a result of termination of Executive’s employment, those payments will be in lieu of any and all other claims or rights that Executive may have against DDR for severance, separation, and/or salary continuation pay upon that termination of Executive’s employment.

12. Covenants and Confidential Information . Executive acknowledges DDR’s reliance on and expectation of Executive’s continued commitment to performance of Executive’s duties and responsibilities during the Contract Period while Executive is employed by DDR and Executive assumes the obligations set out in this Section 12 in light of that reliance and expectation on the part of DDR.

12.1 Noncompetition . During the Contract Period while Executive is employed by DDR, and for one year after the Termination Date, Executive will not, directly or indirectly, own, manage, control, or participate in the ownership, management, or control of, or be employed or engaged by or otherwise affiliated or associated as a consultant, independent contractor, or otherwise with, any of the four largest real estate investment trusts (excluding DDR) that focus primarily on neighborhood and community shopping centers, based on market capitalization as of the Termination Date; provided , however , that the ownership by Executive of not more than one percent of any class of publicly traded securities of any entity will not be deemed a violation of this Section 12.1 .

12.2 Confidentiality . Throughout the Contract Period and for a period of two years thereafter, Executive will not disclose, divulge, discuss, copy, or otherwise use or suffer to be used in any manner, in competition with, or contrary to the interests of, DDR, any confidential information relating to DDR’s operations, properties, or otherwise to its particular business or other trade secrets of DDR, it being acknowledged by Executive that all such information regarding the business of DDR compiled or obtained by, or furnished to, Executive during Executive’s employment by or association with DDR is confidential information and DDR’s exclusive property. The restrictions in this Section 12.2 will not apply to any information to the extent that it (a) is clearly obtainable in the public domain, (b) becomes obtainable in the public domain, except by reason of the breach by Executive of Executive’s obligations under this Section 12.2 , (c) was not acquired by Executive in connection with Executive’s employment or affiliation with DDR, (d) was not acquired by Executive from DDR or its representatives, or (e) is required to be disclosed by rule of law or by order of a court or governmental body or agency.

12.3 Nonsolicitation . During the Contract Period while Executive is employed by DDR, and for one year after the Termination Date, Executive will not directly or indirectly solicit or induce or attempt to solicit or induce any employee of DDR and/or of any Subsidiary or affiliate to terminate his or her employment with DDR and/or any Subsidiary.

12.4 Remedies . Executive acknowledges that the remedy at law for any breach by Executive of this Section 12 may be inadequate and that the damages following from any such breach may not be readily susceptible to being measured in monetary terms. Accordingly, Executive agrees that, upon adequate proof of Executive’s violation of any legally enforceable provision of this Section 12 , DDR will be entitled to immediate injunctive relief and may obtain a temporary order restraining any threatened or further breach. Nothing in this Section 12 will be deemed to limit DDR’s remedies at law or in equity for any breach by Executive of any of the provisions of this Section 12 that may be pursued or availed of by DDR.

12.5 Acknowledgement . Executive has carefully considered the nature and extent of the restrictions upon Executive and the rights and remedies conferred upon DDR under this Section 12 , and hereby acknowledges and agrees that the same are reasonable in time and territory, are designed to eliminate competition that otherwise would be unfair to DDR, do not stifle the inherent skill and experience of Executive, would not operate as a bar to Executive’s sole means of support, are fully required to protect the legitimate interests of DDR and do not confer a benefit upon DDR disproportionate to the detriment to Executive.

13. Compliance with Section 409A .

13.1 Six Month Delay on Certain Payments, Benefits, and Reimbursements . If Executive is a “specified employee” for purposes of Section 409A, as determined under DDR’s policy for determining specified employees on the Termination Date, each payment, benefit, or reimbursement paid or provided under this Agreement that constitutes a “deferral of compensation” within the meaning of Section 409A, that is to be paid or provided as a result of a “separation from service” within the meaning of Section 409A, and that would otherwise be paid or provided at any time (a “Scheduled Time”) that is on or before the date (the “Six Month Date”) that is exactly six months after the Termination Date (other than payments, benefits, or reimbursements that are treated as separation pay under Section 1.409A-1(b)(9)(v) of the Treasury Regulations) will not be paid or provided at the Scheduled Time but will be accumulated (together with interest at the applicable federal rate under Section 7872(f)(2)(A) of the Code in effect on the Termination Date) through the Six Month Date and paid or provided during the period of 30 consecutive days beginning on the first business day after the Six Month Date (that period of 30 consecutive days, the “Seventh Month after the Termination Date”), except that if Executive dies before the Six Month Date, the payments, benefits, or reimbursements will be accumulated only through the date of Executive’s death and thereafter paid or provided not later than 30 days after the date of death.

13.2 Earlier Payment if Not a Specified Employee . If Executive is not a “specified employee” for purposes of Section 409A, as determined under DDR’s policy for determining specified employees on the Termination Date, any lump sum payment to be made by DDR to Executive pursuant to any one or more of Sections 7.2(c) , 7.4(c) and 7.5(c) will be made by DDR to Executive during the 30-day period that begins exactly 60 days after the Termination Date rather than during the Seventh Month after the Termination Date.

13.3 Additional Limitations on Reimbursements and In-Kind Benefits . The reimbursement of expenses or in-kind benefits provided under Section 7 or under any other section of this Agreement that are taxable benefits (and that are not disability pay or death benefit plans within the meaning of Section 409A of the Code) are intended to comply, to the maximum extent possible, with the exception to Section 409A set forth in Section 1.409A-1(b)(9)(v) of the Treasury Regulations. To the extent that any reimbursement of expenses or in-kind benefits provided under Section 7 or under any other section of this Agreement either do not qualify for that exception, or are provided beyond the applicable time periods set forth in Section 1.409A-1(b)(9)(v) of the Treasury Regulations, then they will be subject to the following additional rules: (i) any reimbursement of eligible expenses will be paid within 30 days following Executive’s written request for reimbursement; provided , that Executive provides written notice no later than 60 days before the last day of the calendar year following the calendar year in which the expense was incurred so that DDR can make the reimbursement within the time periods required by Section 409A; (ii) the amount of expenses eligible for reimbursement, or in-kind benefits provided, during any calendar year will not affect the amount of expenses eligible for reimbursement, or in-kind benefits to be provided, during any other calendar year; and (iii) the right to reimbursement or in-kind benefits will not be subject to liquidation or exchange for any other benefit.

13.4 Compliance Generally . Each payment or reimbursement and the provision of each benefit under this Agreement shall be considered a separate payment and not one of a series of payments

for purposes of Section 409A. DDR and Executive intend that the payments and benefits provided under this Agreement will either be exempt from the application of, or comply with, the requirements of Section 409A. This Agreement is to be construed, administered, and governed in a manner that effects that intent and DDR will not take any action that is inconsistent with that intent. Without limiting the foregoing, the payments and benefits provided under this Agreement may not be deferred, accelerated, extended, paid out, or modified in a manner that would result in the imposition of an additional tax under Section 409A upon Executive.

13.5 Termination of Employment to Constitute a Separation from Service . The parties intend that the phrase “termination of employment” and words and phrases of similar import mean a “separation from service” with DDR within the meaning of Section 409A. Executive and DDR will take all steps necessary (including taking into account this Section 13.5 when considering any further agreement regarding provision of services by Executive to DDR after the Termination Date) to ensure that (a) any termination of employment under this Agreement constitutes a “separation from service” within the meaning of Section 409A, and (b) the Termination Date is the date on which Executive experiences a “separation from service” within the meaning of Section 409A.

14. Indemnification . DDR will indemnify Executive, to the full extent permitted or authorized by the Ohio General Corporation Law as it may from time to time be amended, if Executive is made or threatened to be made a party to any threatened, pending, or completed action, suit, or proceeding, whether civil, criminal, administrative, or investigative, by reason of the fact that Executive is or was a director, officer, or employee of DDR and/or of any Subsidiary, or is or was serving at the request of DDR and/or of any Subsidiary as a director, trustee, officer, or employee of a corporation, partnership, joint venture, trust, or other enterprise. The indemnification provided by this Section 14 will not be deemed exclusive of any other rights to which Executive may be entitled under the articles of incorporation or the regulations of DDR and/or of any Subsidiary, or any agreement, vote of shareholders or disinterested directors, or otherwise, both as to action in Executive’s official capacity and as to action in another capacity while holding such office, and will continue as to Executive after Executive has ceased to be a director, trustee, officer, or employee and will inure to the benefit of Executive’s heirs, executors, and administrators. In particular, Executive will continue to be entitled to the full benefit of the indemnification agreement dated April 12, 2011 between Executive and DDR (the “Indemnification Agreement”) for so long as that Indemnification Agreement remains in effect according to its terms. In the event of any conflict or inconsistency between the provisions of this Section 14 and the provisions of the Indemnification Agreement, the provisions of the Indemnification Agreement shall control.

15. Certain Expenses . This Section 15 will apply only to expenses that (a) are otherwise described in one or more of its subsections and (b) are incurred at any time from the Effective Date through the fifth anniversary of Executive’s death.

15.1 Reimbursement of Certain Expenses . DDR will pay, as incurred, all expenses, including the reasonable fees of counsel engaged by Executive, of Executive in (a) prosecuting any action to compel DDR to comply with the terms of this Agreement upon receipt from Executive of an undertaking to repay DDR for such expenses if it is ultimately determined by a court of competent jurisdiction that Executive had no reasonable grounds for bringing such action or (b) defending any action brought by a party other than Executive or Executive’s personal representative to have this Agreement declared invalid or unenforceable.

15.2 Advancement of Certain Expenses . Expenses (including the reasonable fees of counsel engaged by Executive) incurred by Executive in defending any action, suit, or proceeding commenced or threatened against Executive for any action or failure to act as an employee or officer of DDR and/or of any Subsidiary will be paid by DDR, as they are incurred, in advance of final disposition of the action, suit, or proceeding upon receipt of an undertaking by or on behalf of Executive in which Executive agrees to reasonably cooperate with DDR and/or the Subsidiary, as the case may be, concerning the action, suit, or proceeding, and if the action, suit, or proceeding is commenced or threatened against Executive for any action or failure to act as an officer or employee, to repay the amount if it is ultimately determined that Executive is not entitled to be indemnified. The obligation of DDR to advance expenses provided for in this Section 15.2 will not be deemed exclusive of any other rights to which Executive may be entitled under the articles of incorporation or the regulations of DDR or of any Subsidiary, or any agreement, vote of shareholders or disinterested directors, or otherwise.

16. Survival of Obligations . Except as is otherwise expressly provided in this Agreement, the respective obligations of DDR and Executive under this Agreement will survive any termination of Executive’s employment under this Agreement.

17. Notices . Notices and all other communications provided for in this Agreement must be in writing and will be deemed to have been duly given upon receipt (or rejection) when delivered in person or by overnight delivery (to the CEO of DDR in the case of notices to DDR and to Executive in the case of notices to Executive) or mailed by United States registered mail, return receipt requested, postage prepaid, and addressed, if to DDR, to its principal place of business, attention: CEO, and, if to Executive, to Executive’s home address last shown on the records of DDR, or to such other address or addresses as either party may furnish to the other in accordance with this Section 17 .

18. Entire Agreement, Certain Prior Arrangements . Except as otherwise set forth below in this Section 18 , this Agreement supersedes in their entirety all prior employment and change in control agreements between the parties, if any, and all understandings between them, if any, with respect to the subject matter of this Agreement, including, without limitation, the Employment Agreement, dated April 12, 2011, by and between DDR and Executive. As provided in Section 14 , Executive will continue to be entitled to the full benefit of the Indemnification Agreement for so long as it remains in effect according to its terms.

19. Mandatory Arbitration Before a Change in Control . Section 19.1 will apply if and only if either party notifies the other, in writing, that it is demanding resolution of a then-current controversy or claim by arbitration and the notice is provided by the notifying party to the other party before any Change in Control has occurred. Nothing in this Section 19 will limit the right of DDR to seek and obtain injunctive relief in a court of equity for any breach or threatened breach by Executive of any of Executive’s covenants contained in Section 12 above.

19.1 Scope of Arbitration . If this Section 19.1 applies, any controversy or claim arising out of or relating to this Agreement or any breach of this Agreement will be settled by binding arbitration to be held before three arbitrators and conducted in accordance with the Employment Arbitration Rules and Mediation Procedures of the American Arbitration Association in the City of Cleveland, Ohio. The decision of the arbitrators will be final and binding on both parties and judgment on any award rendered by the arbitrators may be entered in any court of competent jurisdiction. Costs and expenses of any such arbitration will be borne by the parties as may be directed by the arbitrators taking into account the extent to which the positions taken by each of

the parties are reasonable. The arbitrators will have the power to issue mandatory orders and restraining orders in connection with any such arbitration.

19.2 Other Disputes . If Section 19.1 does not apply to any claim or controversy between the parties, the parties may nevertheless, but need not, mutually agree to submit any controversy or claim to arbitration as though Section 19.1 did apply. Failing any such mutual agreement, either party may bring proceedings against the other with respect to any claim or controversy in any court of competent jurisdiction that satisfies the venue requirements set forth in Section 20.8 . Nothing in this Section 19.2 imposes upon either party any obligation to discuss possible arbitration of any claim or controversy to which Section 19.1 does not apply before bringing any court proceedings with respect to that claim or controversy.

20. Miscellaneous .

20.1 No Conflict . Executive represents and warrants that Executive is not a party to any agreement, contract, or understanding, whether employment or otherwise, that would restrict or prohibit Executive from undertaking or performing employment in accordance with the terms and conditions of this Agreement.

20.2 Assistance . During the term of this Agreement and thereafter, Executive will provide reasonable assistance to DDR in litigation and regulatory matters that relate to events that occurred during Executive’s period of employment with DDR and its predecessors, and will provide reasonable assistance to DDR with matters relating to its corporate history from the period of Executive’s employment with it or its predecessors. Executive will be entitled to reimbursement of reasonable out-of-pocket travel or related costs and expenses relating to any such cooperation or assistance that occurs following the Termination Date.

20.3 Severability . The provisions of this Agreement are severable and if any one or more provision is determined to be illegal or otherwise unenforceable, in whole or in part, the remaining provisions and any partially unenforceable provision to the extent enforceable in any jurisdiction nevertheless will be binding and enforceable.

20.4 Benefit of Agreement . The rights and obligations of DDR under this Agreement will inure to the benefit of, and will be binding on, DDR and its successors and assigns, and the rights and obligations (other than obligations to perform services) of Executive under this Agreement will inure to the benefit of, and will be binding upon, Executive and Executive’s heirs, personal representatives, and assigns.

20.5 No Waiver . The failure of either party to enforce any provision or provisions of this Agreement will not in any way be construed as a waiver of any such provision or provisions as to any future violations thereof, nor prevent that party from later enforcing each and every other provision of this Agreement. The rights granted the parties in this Agreement are cumulative and the waiver of any single remedy will not constitute a waiver of that party’s right to assert all other legal remedies available to it under the circumstances.

20.6 Modification . This Agreement may not be modified or terminated orally. No modification or termination will be valid unless in writing and signed by the party against which the modification or termination is sought to be enforced.

20.7 Merger or Transfer of Assets of DDR . During the Contract Period while Executive is employed by DDR, DDR will not consolidate with or merge into any other corporation, or transfer all or substantially all of its assets to another corporation, unless such other corporation assumes this Agreement in a signed writing and delivers a copy thereof to Executive, which signed writing may consist of the merger or sale agreement, or similar document. Upon any such assumption, the successor corporation will become obligated to perform the obligations of DDR under this Agreement, and the term “DDR,” as used in this Agreement, will be deemed to refer to that successor corporation, and the term “the Board” as used in this Agreement will be deemed to refer to the board of directors of that successor corporation.

20.8 Governing Law and Venue . The provisions of this Agreement will be governed by and construed in accordance with the laws of the State of Ohio applicable to contracts made in and to be performed exclusively within that State, notwithstanding any conflict of law provision to the contrary. Subject to the mandatory arbitration provisions of Section 19 , the parties consent to venue and personal jurisdiction over them in the courts of the State of Ohio and federal courts sitting in Cleveland, Ohio, for purposes of construing and enforcing this Agreement.

20.9 Termination of Status as Director or Officer . Notwithstanding anything in this Agreement to the contrary, unless otherwise agreed to by DDR and Executive prior to the Termination Date, Executive shall be deemed to have automatically resigned from all directorships and offices with DDR and its Subsidiaries, and their affiliates (including joint ventures), as of the Termination Date.

21. Definitions .

21.1 Reserved.

21.2 Reserved.

21.3 Cause . The term “Cause” has the meaning set forth in Section 6.2 .

21.4 Change in Control . The term “Change in Control” means the occurrence, during the Contract Period while Executive is employed by DDR, of any of the following:

(a) consummation of a consolidation or merger in which DDR is not the surviving corporation, the sale of substantially all of the assets of DDR, or the liquidation or dissolution of DDR;

(b) any person or other entity (other than DDR or a Subsidiary or any DDR employee benefit plan (including any trustee of any such plan acting in its capacity as trustee)) purchases any Shares (or securities convertible into Shares) pursuant to a tender or exchange offer without the prior consent of the Board, or becomes the beneficial owner of securities of DDR representing 30% or more of the voting power of DDR’s outstanding securities without the prior consent of the Board of Directors of DDR (the “Board”); or

(c) during any two-year period, individuals who at the beginning of such period constitute the entire Board cease to constitute a majority of the Board; provided , that any person becoming a director of DDR during such two-year period whose election, or

nomination for election by DDR’s shareholders, was approved by a vote of at least two-thirds of the directors who at the beginning of such period constituted the entire Board (either by a specific vote or by approval of DDR’s proxy statement in which such person is named as a nominee of DDR for director), but excluding for this purpose any person whose initial assumption of office as a director of DDR occurs as a result of either an actual or threatened election contest with respect to the election or removal of directors of DDR or other actual or threatened solicitation of proxies or consents by or on behalf of an individual, corporation, partnership, group, associate or other entity or person other than the Board, shall be, for purposes of this Section 21.4(c) , considered as though such person was a member of the Board at the beginning of such period.

21.5 Committee . The term “Committee” means Executive Compensation Committee of the Board or any other committee or subcommittee authorized by the Board to discharge the Board’s responsibilities relating to the compensation of DDR’s executives and directors.

21.6 Reserved.

21.7 Reserved.

21.8 Good Reason . The term “Good Reason” has the meaning set forth in Section 6.3 .

21.9 Internal Revenue Code . The term “Internal Revenue Code” means the Internal Revenue Code of 1986, as amended.

21.10 Reserved.

21.11 Section . References in this Agreement to one or more “Sections” are to sections of this Agreement, except for references to Section 409A, which are references to that section of the Internal Revenue Code.

21.12 Section 409A . The term “Section 409A” means Section 409A of the Internal Revenue Code. References in this Agreement to Section 409A are intended to include any proposed, temporary, or final regulations, or any other guidance, promulgated with respect to Section 409A by the U.S. Department of Treasury or the Internal Revenue Service.

21.13 Shares . The term “Shares” means the Common Shares, par value $0.10 per share, of DDR.

21.14 Subsidiary . The term “Subsidiary” means any corporation, partnership, or other entity a majority of the voting control of which is directly or indirectly owned or controlled by DDR.

21.15 Termination Date . The term “Termination Date” means the date on which Executive’s employment with DDR and its Subsidiaries terminates.

21.16 Triggering Event . A “Triggering Event” for the purpose of this Agreement will be deemed to have occurred if, during the Contract Period while Executive is employed by DDR:

(a) Within two years after the date on which a Change in Control occurs, DDR terminates the employment of Executive, other than in the case of a termination for

Cause, a termination by DDR pursuant to Section 6.1 following Executive’s disability, or a termination based on death;

(b) Within two years after the date on which a Change in Control occurs, DDR reduces Executive’s title, responsibilities, power or authority in comparison with Executive’s title, responsibilities, power or authority at the time of the Change in Control and Executive thereafter terminates Executive’s employment with DDR within such two-year period;

(c) Within two years after the date on which a Change in Control occurs, DDR assigns Executive duties which are inconsistent with the duties assigned to Executive on the date on which the Change in Control occurred and which duties DDR persists in assigning to Executive despite the prior written objection of Executive and Executive thereafter terminates Executive’s employment with DDR within such two-year period;

(d) Within two years after the date on which a Change in Control occurs, DDR (i) reduces Executive’s base compensation, Executive’s incentive opportunity bonus percentages of salary, Executive’s health and dental insurance coverage and benefits (including any such benefits provided to Executive’s eligible dependents), Executive’s pension, retirement, or profit-sharing benefits or any benefits provided by any of DDR’s equity-based award plans, or any substitute therefor, unless in any case such reduction applies generally to all employees of DDR, (ii) establishes criteria and factors to be achieved for the payment of bonus compensation that are substantially different than the criteria and factors established for other similar executive officers of DDR, (iii) fails to pay Executive any bonus compensation to which Executive is entitled through the achievement of the criteria and factors established for the payment of such bonus, or (iv) excludes Executive from any plan, program, or arrangement in which the other executive officers of DDR are included, and Executive thereafter terminates Executive’s employment with DDR within such two-year period; or

(e) Within two years after the date on which a Change in Control occurs, DDR requires Executive to be based at or generally work from any location more than fifty miles from the geographical center of Cleveland, Ohio and Executive thereafter terminates Executive’s employment with DDR within such two-year period.

21.17 Reserved.

[THE REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK]

IN WITNESS WHEREOF, DDR and Executive have executed this Agreement, DDR by its duly authorized Chief Executive Officer, on the date first written above.


DDR CORP.

By:		/s/ Daniel B. Hurwitz
		Daniel B. Hurwitz, President & Chief Executive Officer

/s/ Christa A. Vesy
Christa A. Vesy

EXHIBIT A

ANNUAL CASH BONUS OPPORTUNITY

AS A PERCENTAGE OF YEAR-END BASE SALARY


Threshold	Target			Maximum
20%		40	%		80	%

PERFORMANCE METRICS AND RELATIVE WEIGHTING

FOR 2012 ANNUAL CASH BONUS OPPORTUNITY


Performance Metrics	Relative Weighting
Same Store EBITDA		55	%
Relative Total Shareholder Return		10	%
Strategic Objectives		20	%
CFO Assessment		15	%

ANNUAL EQUITY BONUS OPPORTUNITY

AS A PERCENTAGE OF YEAR END BASE SALARY PLUS AMOUNTS EARNED UNDER

THE ANNUAL CASH BONUS


Threshold	Target			Maximum
12.5%		25	%		50	%

Exhibit 31.1

CERTIFICATIONS

I, Daniel B. Hurwitz, certify that:

1.	I have reviewed this Quarterly Report on Form 10-Q of DDR Corp.;

2.	Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.	Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5.	The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

May 9, 2012

Date

/s/ Daniel B. Hurwitz

Daniel B. Hurwitz

President and Chief Executive Officer

Exhibit 31.2

CERTIFICATIONS

I, David J. Oakes, certify that:

1.	I have reviewed this Quarterly Report on Form 10-Q of DDR Corp.;

2.	Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.	Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

5.	The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

May 9, 2012

Date


		/s/ David J. Oakes
		David J. Oakes
		Senior Executive Vice President and
		Chief Financial Officer

Exhibit 32.1

CERTIFICATION PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF

2002

I, Daniel B. Hurwitz, President and Chief Executive Officer of DDR Corp. (the “Company”), certify, pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that, to the best of my knowledge:

(1)

The Quarterly Report on Form 10-Q of the Company for the period ended March 31, 2012, as filed with the Securities and Exchange Commission (the “Report”), which this certification accompanies, fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2)

The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company as of the dates and for the periods expressed in the Report.


		/s/ Daniel B. Hurwitz
		Daniel B. Hurwitz
		President and Chief Executive Officer
		May 9, 2012

Exhibit 32.2

CERTIFICATION PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF

2002

I, David J. Oakes, Senior Executive Vice President and Chief Financial Officer of DDR Corp. (the “Company”), certify, pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that, to the best of my knowledge:

(1)

(2)


		/s/ David J. Oakes
		David J. Oakes
		Senior Executive Vice President and Chief Financial Officer
		May 9, 2012