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## Use of Estimates 

We prepared the accompanying financial statements in accordance with accounting principles generally accepted in the United States (“GAAP”). GAAP requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of the financial statements, and revenues and expenses during the reported period. Our actual results could differ from these estimates. 

## Capitalized Interest 

We capitalize interest on projects during periods of construction until the projects are ready for their intended purpose. The amount of interest capitalized during each year is as follows: 

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## Segment Disclosure 

Our interests in our regional malls, community centers and other assets represent one segment because we base our resource allocation and other operating decisions on the evaluation of the entire Portfolio. 

## Deferred Costs and Debt Premiums and Discounts 

Our deferred costs consist primarily of financing fees we incurred in order to obtain long-term financing and internal and external leasing commissions and related costs. We record amortization of deferred financing costs on a straight-line basis over the terms of the respective loans or agreements. Our deferred leasing costs consist primarily of capitalized salaries and related benefits in connection with lease originations. We record amortization of deferred leasing costs on a straight-line basis over the terms of the related leases. We amortize debt premiums and discounts over the remaining terms of the related debt instruments. These debt premiums or discounts arise either at the debt issuance or as part of the purchase price allocation of the fair value of debt assumed in acquisitions. Net deferred costs of $129,710 as of December 31, 2003 are net of accumulated amortization of $179,021 and net deferred costs of $149,748 as of December 31, 2002 are net of accumulated amortization of $194,893. 

The accompanying statements of operations and comprehensive income includes amortization as follows: 

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We record amortization of deferred financing costs, amortization of premiums, and accretion of discounts as part of interest expense. 

## Derivative Financial Instruments 

On January 1, 2001 we adopted SFAS 133 “Accounting for Derivative Instruments and Hedging Activities,” as amended by SFAS 138, “Accounting for Derivative Instruments and Hedging Activities.” On adoption, we recorded $2.0 million of unrecognized losses in other comprehensive income as a cumulative effect of accounting change. We also recorded an expense of $1.7 million as a cumulative effect of accounting change in the statement of operations, which includes our $1.5 million share of joint venture cumulative effect of accounting change. 

We use a variety of derivative financial instruments in the normal course of business to manage or hedge the risks described in Note 8 and record all derivatives on our balance sheets at fair value. We require that hedging derivative instruments are effective in reducing the risk exposure that they are designated to hedge. We formally designate any instrument that meets these hedging criteria as a hedge at the inception of the derivative contract. 

