## Notes to Financial Statements 

Dollars in thousands, except share and per share amounts and where indicated as in millions or billions 

We reclassified distributions from unconsolidated entities that represent return on investments in the statements of cash flows to “net cash provided by operating activities” from “net cash used in investing activities” for all periods presented. “Distributions of capital from unconsolidated entities” represent cash distributions from operations in excess of net income and financing activities. In addition, we reclassified distributions to minority interest owners of consolidated properties in the statements of cash flows to “net cash provided by operating activities” from “net cash provided by (used in) financing activities” for all periods presented. 

## NOTE 4. REAL ESTATE ACQUISITIONS, DISPOSALS, AND IMPAIRMENT 

## Acquisitions 

## During 2003 

On March 14, 2003, we purchased the remaining interest in The Forum Shops at Caesars in Las Vegas, NV from the minority limited partner who initiated the buy/sell provision of the partnership agreement. We purchased this interest for $174.0 million in cash and assumed the minority limited partner’s $74.2 million share of debt, and other partnership liabilities. We funded this purchase with borrowings from our Credit Facility (Note 8). We recorded minority interest expense relating to the minority limited partner’s share of the results of operations of The Forum Shops at Caesars through March 14, 2003. 

On August 20, 2003, we purchased a 100% leasehold stake in Stanford Shopping Center in Palo Alto, California for $333.0 million from Stanford University. Stanford University holds, as lessor, a long-term ground lease underlying the asset. We funded this purchase with the mortgage discussed in Note 8, with borrowings from our Credit Facility, and with available working capital. 

In the fourth quarter 2003, through a series of transactions we increased our ownership interest in Kravco Investments L.P. (“Kravco”), a Philadelphia, PA based owner of regional malls, from approximately 18% to approximately 80% and in its affiliated management company from approximately 15% to 50%. The portfolio consists of six regional malls, five of which are in the Philadelphia metropolitan area, and four community centers. We acquired our interest in Kravco from certain private investors, The Rouse Company (“Rouse”) and Westfield America Trust (“Westfield”). We acquired our initial interest jointly with Rouse and Westfield in connection with the Rodamco acquisition in 2002. As a result of this acquisition, we consolidated four new partnerships and account for six new partnerships as joint ventures. The purchase accounting for this acquisition is still preliminary. The total consideration paid in 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. 

On December 22, 2003, we jointly formed with The Rinascente Group the joint venture Gallerie Commerciali Italia S.p.A (“GCI”), which owns a geographically diverse portfolio in Italy of 38 existing shopping centers as of December 31, 2003. The Rinascente Group contributed these 38 existing shopping centers as well as development opportunities to GCI and then sold 49% of GCI to one of our affiliates. The initial gross value of GCI was approximately € 860 million, or approximately $1.1 billion, and our initial equity investment was approximately € 187 million, or $232 million. We account for our interest in GCI under the equity method of accounting. The purchase accounting for this acquisition is still preliminary. 

We recorded intangible assets and liabilities that net to $55.5 million as part of our purchase accounting allocations in 2003. 

## During 2002 

On May 3, 2002, we purchased, jointly with Westfield and Rouse, the partnership interests of Rodamco North America N.V. (“Rodamco”) and its affiliates through the acquisition of Rodamco stock. Our portion of the acquisition includes the purchase of the remaining partnership interests in four of our existing joint venture Properties, new partnership interests in nine additional Properties, and other partnership interests and assets. We acquired these partnership interests as part of our acquisition strategy to acquire and own quality retail real estate thereby enhancing our overall Portfolio. The results of operations for the partnership interests acquired have been included in our results of operations since May 3, 2002. 

