Reducing Our Non-Retail Holdings

As we returned our focus exclusively to our core competency of owning and managing retail real estate, we ceased making investments in areas that did not fit that strategy. We began the orderly liquidation of more than $1 billion in non-retail assets. In 2010, we received more than $130 million in cash proceeds from the sales of these assets, reducing their total portfolio value to just under $800 million, representing less than 6% of our gross balance sheet assets.

Reducing Leverage

The return of the capital markets was swift and convincing during the past year. Capital became available at significantly lower cost and from numerous sources. We accessed capital in a variety of ways, including issuing $175 million in perpetual preferred stock, extending maturities of corporate debt by prefunding near-term maturities with new long-term bonds at advantageous pricing, and successfully refinancing our Canadian debt balances. More importantly, we reduced absolute debt levels by $375 million, and improved a key metric known as “Net
Debt to Recurring EBITDA” to 6.3 times, well on our way to our stated goal of 6.0 times by the end of 2012. We also eliminated a significant level of debt in our joint venture programs guaranteed by Kimco. These actions helped solidify our investment-grade debt ratings from all three major credit rating agencies.

Establishing New Institutional Joint Venture Relationships

Joint venture investment programs with institutional investors have served us well over the years. Our partners provide access to a source of capital that is largely untapped by many REITs; this access remains a competitive advantage for Kimco when acquiring high-quality shopping centers. New programs were established in the U.S. with three new partners during 2010: Canada Pension Plan Investment Board, the second largest pension fund in Canada; BIG Shopping Centers, an Israeli public company that owns and develops retail properties throughout Israel; and Cisterra LLC, a real estate private equity fund. In Canada, we completed our first joint venture property acquisition with Sun Life Financial, a leading international financial products and services company. In addition to providing a fresh source of investment capital, these new programs allowed Prudential Real Estate Investors, an existing partner, to exit some of its real estate investments with us. Kimco retained its management and ownership position in these assets after they were transferred to our new partners.

Remaining Poised to Take Advantage of Shopping Center and Retailer-Owned Real Estate Opportunities

With the catalysts of low interest rates, a revitalized financing market and a dearth of investment alternatives, demand for high-quality real estate soared again. Kimco was ideally positioned to take advantage of the rebounding market after the actions we took to enhance our own capital structure, establish new partnerships, and improve liquidity through asset sales. During 2010 and the first part of 2011, we re-entered the acquisition market with the purchase of 10 properties with an aggregate transaction value of $269 million.