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## Management’s Discussion & Analysis of Financial Condition and Results of Operations 

## Acquisitions and Dispositions 

Acquisitions.  We acquired our additional interests in Kravco from certain private investors, The Rouse Company ( “Rouse”) and Westfield America Trust (“Westfield”). We obtained our initial interest jointly with Rouse and Westfield in connection with the Rodamco acquisition in 2002. The total consideration paid in 2003 for these transactions was approximately $293.4 million and consisted of : 

● cash of $82.0 million, 

● issuance of $107.4 million of perpetual preferred units by the Operating Partnership, and 

● the assumption of our share of mortgage debt and other payables of $104.0 million. 

We purchased our interest in Forum Shops for $174.0 million in cash and assumed the minority limited partner’s $74.2 million share of debt, and other partnership liabilities. In addition, we purchased our 100% stake in Stanford Shopping Center for $333.0 million funded initially with borrowings from our Credit Facility and the proceeds from a $220.0 million leasehold mortgage previously discussed. 

Buy/sell provisions are common in real estate partnership agreements. Most of our partners are institutional investors who have a history of direct investment in regional mall properties. Our partners in our joint ventures may initiate these provisions at any time and if we determine it is in our shareholders’ best interests for us to purchase the joint venture interest, we believe we have adequate liquidity to execute the purchases of the interests without hindering our cash flows or liquidity. Should we decide to sell any of our joint venture interests, we would expect to use the net proceeds from any such sale to reduce outstanding indebtedness. 

Dispositions.  As part of our strategic plan to own quality retail real estate we continue to pursue the sale of Properties, under the right circumstances, that no longer meet our strategic criteria. In 2003, we disposed of thirteen non-core Properties that no longer met our strategic criteria. These consisted of seven regional malls, five community centers, and one mixed-use property. We do not believe the sale of these Properties will have a material impact on our future results of operations or cash flows and their removal from service and sale will not materially affect our ongoing operations. We believe the disposition of these Properties will enhance the average overall quality of our Portfolio. 

## Development Activity 

New Developments.  The following describes our current new development projects, the estimated total cost, our share of the estimated total cost and the construction in progress balance as of December 31, 2003 (dollars in millions): 

<img src='content_image/31475.jpg'>

(a) Amounts include the portion of the project placed in service as of December 31, 2003, if any. 

(b) Represents the project costs net of land sales, tenant reimbursements for construction, and other items (where applicable). 

(c) Due to our preference in the joint venture partnership, we are contributing 85% of the project costs. 

We expect to fund these capital projects with either available cash flow from operations, borrowings from our Credit Facility, or project specific construction loans. We expect total 2004 new development costs during the year to be approximately $200 million. 

