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 September 30, 2012

or

o 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:   1-10899

Kimco Realty Corporation

(Exact name of registrant as specified in its charter)

Maryland	13-2744380
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)

3333 New Hyde Park Road, New Hyde Park, NY 11042

(Address of principal executive offices) (Zip Code)

(516) 869-9000

(Registrant’s telephone number, including area code)

        N/A        

(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 ý   No o

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 (sec. 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 ý   No o

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 the definitions of “large accelerated filer, “accelerated filer” and “smaller reporting company” in Rule 12-b-2 of the Exchange Act.

Large accelerated filer	ý	Accelerated filer	o
Non-accelerated filer	o	Smaller reporting company	o
(Do not check if a smaller reporting company)

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

As of October 24, 2012, the registrant had 407,623,066 shares of common stock outstanding.

PART I   FINANCIAL INFORMATION
Item 1.	Financial Statements of Kimco Realty Corporation and Subsidiaries (the “Company”)
Condensed Consolidated Financial Statements -
	Condensed Consolidated Balance Sheets as of September 30, 2012 and December 31, 2011	3
	Condensed Consolidated Statements of Income for the Three and Nine Months Ended September 30, 2012 and 2011	4
	Condensed Consolidated Statements of Comprehensive Income for the Three and Nine Months Ended September 30, 2012 and 2011	5
	Condensed Consolidated Statements of Changes in Equity for the Nine Months Ended September 30, 2012 and 2011	6
	Condensed Consolidated Statements of Cash Flows for the Nine Months Ended September 30, 2012 and 2011	7
Notes to Condensed Consolidated Financial Statements		8
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	24
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	33
Item 4.	Controls and Procedures	35
PART II   OTHER INFORMATION
Item 1.	Legal Proceedings	35
Item 1A.	Risk Factors	35
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	35
Item 6.	Exhibits	36
Signatures		37

2

KIMCO REALTY CORPORATION AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

(Unaudited)

(in thousands, except share information)

	September 30,			December 31,
	2012			2011
Assets:
Operating real estate, net of accumulated depreciation of $1,745,992 and $1,693,090, respectively	$	7,078,206		$	6,898,445
Investments and advances in real estate joint ventures		1,433,450			1,404,214
Real estate under development		132,113			179,722
Other real estate investments		326,268			344,131
Mortgages and other financing receivables		98,188			102,972
Cash and cash equivalents		429,529			112,882
Marketable securities		35,811			33,540
Accounts and notes receivable		138,558			149,807
Other assets		443,853			388,803
Total assets	$	10,115,976		$	9,614,516
Liabilities:
Notes payable	$	3,159,943		$	2,983,886
Mortgages payable		1,015,313			1,085,371
Construction loans payable		42,935			45,128
Dividends payable		94,856			92,159
Other liabilities		464,691			432,755
Total liabilities		4,777,738			4,639,299
Redeemable noncontrolling interests		95,059			95,074
Stockholders' equity:
Preferred Stock, $1.00 par value, authorized 5,791,200 and 5,146,000 shares, respectively
Class F Preferred Stock, $1.00 par value, authorized zero shares and 700,000 shares, respectively issued and outstanding zero shares and 700,000 shares, respectively Aggregate liquidation preference $175,000		-			700
Class G Preferred Stock, $1.00 par value, authorized 184,000 shares issued and outstanding 184,000 shares Aggregate liquidation preference $460,000		184			184
Class H Preferred Stock, $1.00 par value, authorized 70,000 shares issued and outstanding 70,000 shares Aggregate liquidation preference $175,000		70			70
Class I Preferred Stock, $1.00 par value, authorized 18,400 and zero shares, respectively issued and outstanding 16,000 and zero shares, respectively Aggregate liquidation preference $400,000		16			-
Class J preferred stock, $1.00 par value, authorized 9,000 and zero shares, respectively issued and outstanding 9,000 and zero shares, respectively Aggregate liquidation preference $225,000		9			-
Common Stock, $.01 par value, authorized 750,000,000 shares issued and outstanding 407,608,794 and 406,937,830 shares, respectively		4,076			4,069
Paid-in capital		5,938,244			5,492,022
Cumulative distributions in excess of net income		(813,097	)		(702,999	)
		5,129,502			4,794,046
Accumulated other comprehensive income		(56,785	)		(107,660	)
Total stockholders' equity		5,072,717			4,686,386
Noncontrolling interests		170,462			193,757
Total equity		5,243,179			4,880,143
Total liabilities and equity	$	10,115,976		$	9,614,516

The accompanying notes are an integral part of these condensed consolidated financial statements.

3

KIMCO REALTY CORPORATION AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF INCOME

(Unaudited)

(in thousands, except per share data)

	Three Months Ended September 30,						Nine Months Ended September 30,
	2012			2011			2012			2011
Revenues
Revenues from rental property	$	222,961		$	204,297		$	660,502		$	620,440
Management and other fee income		8,917			8,728			27,053			26,827
Total revenues		231,878			213,025			687,555			647,267
Operating expenses
Rent		3,270			3,455			9,457			10,545
Real estate taxes		29,917			27,827			87,606			83,985
Operating and maintenance		27,478			27,315			82,589			84,896
General and administrative expenses		29,957			30,846			95,317			90,188
Impairment charges		588			4,037			22,539			7,757
Depreciation and amortization		65,631			56,870			187,839			176,165
Total operating expenses		156,841			150,350			485,347			453,536
Operating income		75,037			62,675			202,208			193,731
Other income/(expense)
Mortgage and other financing income		2,092			1,959			6,083			5,728
Interest, dividends and other investment income		598			375			1,110			14,173
Other expense, net		(3,085	)		(2,655	)		(6,169	)		(2,153	)
Interest expense		(57,116	)		(56,120	)		(171,632	)		(166,535	)
Income from other real estate investments		545			2,449			1,688			3,062
Income from continuing operations before income taxes, equity in income of joint ventures and equity in income from other real estate investments		18,071			8,683			33,288			48,006
Provision for income taxes, net		(5,183	)		(4,443	)		(4,822	)		(14,332	)
Equity in income of joint ventures, net		24,498			19,641			103,743			49,810
Equity in income of other real estate investments, net		10,239			24,788			35,340			35,123
Income from continuing operations		47,625			48,669			167,549			118,607
Discontinued operations
Income/(loss) from discontinued operating properties, net of tax		734			5,678			(2,195	)		13,521
Impairment/loss on operating properties sold, net of tax		(2,604	)		(289	)		(15,364	)		(8,919	)
Gain on disposition of operating properties, net of tax		11,329			4,535			34,571			8,722
Income from discontinued operations		9,459			9,924			17,012			13,324
Gain on sale of operating properties, net of tax		-			-			4,059			-
Net income		57,084			58,593			188,620			131,931
Net income attributable to noncontrolling interests		(2,143	)		(3,612	)		(10,928	)		(9,277	)
Net income attributable to the Company		54,941			54,981			177,692			122,654
Redemption costs		(6,213	)		-			(6,213	)		-
Preferred stock dividends		(21,622	)		(14,841	)		(58,037	)		(44,522	)
Net income available to the Company's common shareholders	$	27,106		$	40,140		$	113,442		$	78,132
Per common share:
Income from continuing operations:
-Basic	$	0.04		$	0.07		$	0.24		$	0.16
-Diluted	$	0.04		$	0.07		$	0.24		$	0.16
Net income:
-Basic	$	0.07		$	0.10		$	0.28		$	0.19
-Diluted	$	0.07		$	0.10		$	0.28		$	0.19
Weighted average shares:
-Basic		405,810			406,564			405,880			406,521
-Diluted		406,747			407,292			406,650			407,386
Amounts available to the Company's common shareholders:
Income from continuing operations, net of tax	$	16,761		$	30,191		$	97,795		$	65,010
Income from discontinued operations		10,345			9,949			15,647			13,122
Net income	$	27,106		$	40,140		$	113,442		$	78,132

The accompanying notes are an integral part of these condensed consolidated financial statements.

4

KIMCO REALTY CORPORATION AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(Unaudited)

(in thousands)

	Three Months Ended September 30,						Nine Months Ended September 30,
	2012			2011			2012			2011
Net income	$	57,084		$	58,593		$	188,620		$	131,931
Other comprehensive income:
Change in unrealized gain/(loss) on marketable securities		1,382			(5,240	)		2,311			(7,369	)
Change in unrealized gain on interest rate swaps		31			103			403			362
Foreign currency translation adjustment		42,807			(113,855	)		52,378			(55,823	)
Other comprehensive income		44,220			(118,992	)		55,092			(62,830	)
Comprehensive income		101,304			(60,399	)		243,712			69,101
Comprehensive income attributable to noncontrolling interests		(3,259	)		1,310			(15,145	)		(8,674	)
Comprehensive income attributable to the Company	$	98,045		$	(59,089	)	$	228,567		$	60,427

The accompanying notes are an integral part of these condensed consolidated financial statements.

5

KIMCO REALTY CORPORATION AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY

For the Nine Months Ended September 30, 2012 and 2011

(Unaudited)

(in thousands)

	Cumulative Distributions in Excess of Net			Accumulated Other Comprehensive			Preferred Stock						Common Stock						Paid-in			Total Stockholders'			Noncontrolling			Total
	Income			Income			Issued			Amount			Issued			Amount			Capital			Equity			Interests			Equity
Balance, January 1, 2011	$	(515,164	)	$	(23,853	)		954		$	954			406,424		$	4,064		$	5,469,841		$	4,935,842		$	225,444		$	5,161,286
Contributions from noncontrolling interests		-			-			-			-			-			-			-			-			1,011			1,011
Comprehensive income:
Net income		122,654			-			-			-			-			-			-			122,654			9,277			131,931
Other comprehensive income, net of tax:
Change in unrealized loss on marketable securities		-			(7,369	)		-			-			-			-			-			(7,369	)		-			(7,369	)
Change in unrealized gain on interest rate swaps		-			362			-			-			-			-			-			362			-			362
Change in foreign currency translation adjustment		-			(55,220	)		-			-			-			-			-			(55,220	)		(603	)		(55,823	)
Comprehensive income
Redeemable noncontrolling interests		-			-			-			-			-			-			-			-			(4,758	)		(4,758	)
Dividends ($0.54 per common share; $1.2468 per Class F Depositary Share, $1.4532 per Class G Depositary Share and $1.2989 per Class H Depositary Share, respectively)		(264,727	)		-			-			-			-			-			-			(264,727	)		-			(264,727	)
Distributions to noncontrolling interests		-			-			-			-			-			-			-			-			(11,539	)		(11,539	)
Issuance of common stock		-			-			-			-			438			5			4,936			4,941			-			4,941
Surrender of common stock		-			-			-			-			(34	)		(1	)		(579	)		(580	)		-			(580	)
Repurchase of common stock		-			-			-			-			(214	)		(2	)		(3,979	)		(3,981	)		-			(3,981	)
Exercise of common stock options		-			-			-			-			326			3			4,897			4,900			-			4,900
Acquisition of noncontrolling interests		-			-			-			-			-			-			2,970			2,970			(22,456	)		(19,486	)
Amortization of equity awards		-			-			-			-			-			-			10,669			10,669			-			10,669
Balance, September 30, 2011	$	(657,237	)	$	(86,080	)		954		$	954			406,940		$	4,069		$	5,488,755		$	4,750,461		$	196,376		$	4,946,837
Balance, January 1, 2012	$	(702,999	)	$	(107,660	)		954		$	954			406,938		$	4,069		$	5,492,022		$	4,686,386		$	193,757		$	4,880,143
Contributions from noncontrolling interests		-			-			-			-			-			-			-			-			1,343			1,343
Comprehensive income:
Net income		177,692			-			-			-			-			-			-			177,692			10,928			188,620
Other comprehensive income, net of tax:
Change in unrealized gain on marketable securities		-			2,311			-			-			-			-			-			2,311			-			2,311
Change in unrealized gain on interest rate swaps		-			403			-			-			-			-			-			403			-			403
Change in foreign currency translation adjustment		-			48,161			-			-			-			-			-			48,161			4,217			52,378
Redeemable noncontrolling interests		-			-			-			-			-			-			-			-			(4,745	)		(4,745	)
Dividends ($0.57 per common share; $1.0344 per Class F Depositary Share, $1.4532 per Class G Depositary Share, $1.2989 per Class H Depositary Share and $0.79583 per Class I Depositary Share, and $0.2521 per Class J Depositary Share, respectively)		(287,790	)		-			-			-			-			-			-			(287,790	)		-			(287,790	)
Distributions to noncontrolling interests		-			-			-			-			-			-			-			-			(11,874	)		(11,874	)
Issuance of common stock		-			-			-			-			1,093			11			18,055			18,066			-			18,066
Issuance of preferred stock		-			-			25			25			-			-			605,046			605,071			-			605,071
Surrender of common stock		-			-			-			-			(111	)		(1	)		(2,072	)		(2,073	)		-			(2,073	)
Repurchase of common stock		-			-			-			-			(1,636	)		(16	)		(30,930	)		(30,946	)		-			(30,946	)
Exercise of common stock options		-			-			-			-			1,325			13			20,018			20,031			-			20,031
Acquisition of noncontrolling interests		-			-			-			-			-			-			296			296			(23,164	)		(22,868	)
Amortization of equity awards		-			-			-			-			-			-			10,109			10,109			-			10,109
Redemption of preferred stock		-			-			(700	)		(700	)		-			-			(174,300	)		(175,000	)		-			(175,000	)
Balance, September 30, 2012	$	(813,097	)	$	(56,785	)		279		$	279			407,609		$	4,076		$	5,938,244		$	5,072,717		$	170,462		$	5,243,179

The accompanying notes are an integral part of these condensed consolidated financial statements.

6

KIMCO REALTY CORPORATION AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

(in thousands)

	Nine Months Ended September 30,
	2012			2011
Cash flow from operating activities:
Net income	$	188,620		$	131,931
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization		197,964			188,812
Impairment charges		37,740			16,676
Gain on sale of operating properties		(44,596	)		(8,722	)
Equity in income of joint ventures, net		(103,743	)		(49,810	)
Equity in income from other real estate investments, net		(35,340	)		(35,123	)
Distributions from joint ventures and other real estate investments		150,721			108,595
Cash retained from excess tax benefits		-			(69	)
Change in accounts and notes receivable		11,249			(5,182	)
Change in accounts payable and accrued expenses		34,915			32,826
Change in other operating assets and liabilities		(29,940	)		(12,019	)
Net cash flow provided by operating activities		407,590			367,915
Cash flow from investing activities:
Acquisition of and improvements to operating real estate		(421,849	)		(169,350	)
Acquisition of and improvements to real estate under development		(2,423	)		(26,939	)
Proceeds from sale/repayments of marketable securities		156			178,290
Investments and advances to real estate joint ventures		(159,121	)		(90,747	)
Reimbursements of investments and advances to real estate joint ventures		135,987			44,894
Other real estate investments		(4,215	)		(5,225	)
Reimbursements of investments and advances to other real estate investments		26,637			50,536
Investment in mortgage loans receivable		(15,623	)		-
Collection of mortgage loans receivable		24,613			14,732
Other investments		(924	)		(730	)
Reimbursements of other investments		9,538			11,122
Proceeds from sale of operating properties		277,174			65,593
Proceeds from sale of development properties		-			7,373
Net cash flow (used for) provided by investing activities		(130,050	)		79,549
Cash flow from financing activities:
Principal payments on debt, excluding normal amortization of rental property debt		(212,105	)		(24,393	)
Principal payments on rental property debt		(17,585	)		(17,130	)
Principal payments on construction loan financings		(213	)		(409	)
Proceeds from mortgage/construction loan financings		6,276			13,685
(Repayment) proceeds under unsecured revolving credit facilities, net		(226,558	)		13,326
Proceeds from issuance of unsecured term loan		400,000			-
Repayment of unsecured notes		(17,000	)		(88,000	)
Financing origination costs		(1,904	)		(855	)
Redemption of non-controlling interests		(25,868	)		(23,890	)
Dividends paid		(285,092	)		(265,674	)
Cash retained from excess tax benefits		-			69
Proceeds from issuance of stock		625,102			4,832
Redemption of preferred stock		(175,000	)		-
Repurchase of common stock		(30,946	)		(3,981	)
Net cash flow provided by (used for) financing activities		39,107			(392,420	)
Change in cash and cash equivalents	$	316,647		$	55,044
Cash and cash equivalents, beginning of year		112,882			125,154
Cash and cash equivalents, end of year	$	429,529		$	180,198
Interest paid during the year (net of capitalized interest of $1,273 and $6,142, respectively)	$	149,976		$	145,378
Income taxes paid during the year	$	1,970		$	2,062

The accompanying notes are an integral part of these condensed consolidated financial statements.

7

KIMCO REALTY CORPORATION AND SUBSIDIARIES

NOTES TO CONDENSED

CONSOLIDATED FINANCIAL STATEMENTS

1. Interim Financial Statements

Principles of Consolidation -

The accompanying Condensed Consolidated Financial Statements include the accounts of Kimco Realty Corporation and Subsidiaries, (the “Company”). The Company’s Subsidiaries includes subsidiaries which are wholly-owned, and all entities in which the Company has a controlling financial interest, including where the Company has been determined to be a primary beneficiary of a variable interest entity (“VIE”) or meets certain criteria of a sole general partner or managing member in accordance with the Consolidation guidance of the Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”). All inter-company balances and transactions have been eliminated in consolidation.  The information furnished in the accompanying Condensed Consolidated Financial Statements is unaudited and reflects all adjustments which are, in the opinion of management, necessary to reflect a fair statement of the results for the interim periods presented, and all such adjustments are of a normal recurring nature.  These Condensed Consolidated Financial Statements should be read in conjunction with the Company's 2011 Annual Report on Form 10-K for the year ended December 31, 2011 ("10-K"), as certain disclosures in the Quarterly Report on Form 10-Q that would duplicate those included in the 10-K are not included in these Condensed Consolidated Financial Statements.

Subsequent Events -

The Company has evaluated subsequent events and transactions for potential recognition or disclosure in the financial statements.

Income Taxes -

The Company elected status as a Real Estate Investment Trust (a “REIT”) for federal income tax purposes beginning in its taxable year ended December 31, 1991 and operates in a manner that enables the Company to maintain its status as a REIT.  As a REIT, the Company must distribute at least 90 percent of its taxable income and will not pay federal income taxes on the amount distributed to its shareholders.  Therefore, the Company is not subject to federal income taxes if it distributes 100 percent of its taxable income.   Most states, where the Company holds investments in real estate, conform to the federal rules recognizing REITs.  Certain subsidiaries have made a joint election with the Company to be treated as taxable REIT subsidiaries (“TRS”), which permit the Company to engage in certain business activities in which the REIT may not conduct directly.  A TRS is subject to federal and state income taxes on the income from these activities and the Company includes a provision for taxes in its condensed consolidated financial statements.  The Company is subject to and also includes in its tax provision non-U.S. income taxes on certain investments located in jurisdictions outside the U.S.

8

Earnings Per Share -

The following table sets forth the reconciliation of earnings and the weighted average number of shares used in the calculation of basic and diluted earnings per share (amounts presented in thousands except per share data):

	Three Months Ended September 30,						Nine Months Ended September 30,
	2012			2011			2012			2011
Computation of Basic Earnings Per Share:
Income from continuing operations	$	47,625		$	48,669		$	167,549		$	118,607
Gain on sale of operating properties, net of tax		-			-			4,059			-
Net income attributable to noncontrolling interests		(2,143	)		(3,612	)		(10,928	)		(9,277	)
Discontinued operations attributable to noncontrolling interests		(886	)		(25	)		1,365			202
Redemption costs		(6,213	)		-			(6,213	)		-
Preferred stock dividends		(21,622	)		(14,841	)		(58,037	)		(44,522	)
Income from continuing operations available to the common shareholders		16,761			30,191			97,795			65,010
Earnings attributable to unvested restricted shares		(298	)		(150	)		(893	)		(450	)
Income from continuing operations attributable to common shareholders		16,463			30,041			96,902			64,560
Income from discontinued operations attributable to the Company		10,345			9,949			15,647			13,122
Net income attributable to the Company’s common shareholders for basic earnings per share	$	26,808		$	39,990		$	112,549		$	77,682
Weighted average common shares outstanding		405,810			406,564			405,880			406,521
Basic Earnings Per Share Attributable to the Company’s Common Shareholders:
Income from continuing operations	$	0.04		$	0.07		$	0.24		$	0.16
Income from discontinued operations		0.03			0.03			0.04			0.03
Net income	$	0.07		$	0.10		$	0.28		$	0.19
Computation of Diluted Earnings Per Share:
Income from continuing operations attributable to common shareholders	$	16,463		$	30,041		$	96,902		$	64,560
Income from discontinued operations attributable to the Company		10,345			9,949			15,647			13,122
Net income attributable to the Company’s common shareholders for diluted earnings per share	$	26,808		$	39,990		$	112,549		$	77,682
Weighted average common shares  outstanding – basic		405,810			406,564			405,880			406,521
Effect of dilutive securities (a):
Equity awards		937			728			770			865
Shares for diluted earnings per common share		406,747			407,292			406,650			407,386
Diluted Earnings Per Share Attributable to the Company’s Common Shareholders:
Income from continuing operations	$	0.04		$	0.07		$	0.24		$	0.16
Income from discontinued operations		0.03			0.03			0.04			0.03
Net income	$	0.07		$	0.10		$	0.28		$	0.19

(a)  For the three and nine months ended September 30, 2012 and 2011, the effect of certain convertible units would have an anti-dilutive effect upon the calculation of Income from continuing operations per share.  Accordingly, the impact of such conversion has not been included in the determination of diluted earnings per share calculations.  Additionally, there were 11,205,056 and 13,552,139 stock options that were not dilutive at September 30, 2012 and 2011, respectively.

The Company's unvested restricted share awards contain non-forfeitable rights to distributions or distribution equivalents. The impact of the unvested restricted share awards on earnings per share has been calculated using the two-class method whereby earnings are allocated to the unvested restricted share awards based on dividends declared and the unvested restricted shares' participation rights in undistributed earnings.

New Accounting Pronouncements -

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 statement presentation.

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In June 2011, the FASB issued ASU No. 2011-05, Comprehensive Income (Topic 220): Presentation of Comprehensive Income (“ASU 2011-05”). The amendments in this ASU require an entity to present the total of comprehensive income, the components of net income, and the components of other comprehensive income either in a single continuous statement of comprehensive income or in two separate but consecutive statements. ASU 2011-05 eliminates the option to present the components of other comprehensive income as part of the statement of equity. In December 2011, the FASB deferred portions of this update in its issuance of ASU 2011-12 Accounting Standards Update No. 2011-12 (“ASU 2011-12”), Comprehensive Income (Topic 220): Deferral of the Effective Date for Amendments to the Presentation of Reclassifications of Items Out of Accumulated Other Comprehensive Income in ASU 2011-05. The amendment requires that all non-owner changes in stockholders’ equity be presented in either a single continuous statement of comprehensive income or in two separate but consecutive statements. ASU 2011-12 defers only those changes in ASU 2011-05 that relate to the presentation of reclassification adjustments out of accumulated other comprehensive income. ASU 2011-05 is effective for fiscal years, and interim periods within those fiscal years, beginning on or after December 15, 2011, with early adoption permitted, but full retrospective application is required. The adoption of ASU 2011-05 and ASU 2011-12 did not have a material impact on the Company’s financial statement presentation.

In November 2011, the FASB issued ASU 2011-10, Property, Plant and Equipment (Topic 360): Derecognition of in Substance Real Estate - a Scope Clarification (a consensus of the FASB Emerging Issues Task Force) (“ASU 2011-10”). ASU 2011-10 requires a parent company that ceases to have a controlling financial interest in a subsidiary that is in substance real estate because the subsidiary has defaulted on its nonrecourse debt to use the FASB’s Real Estate guidance to determine whether to derecognize the in substance real estate entities.  ASU 2011-10 is effective for reporting periods beginning on or after June 15, 2012.  The adoption of ASU 2011-10 did not have a material impact on the Company’s financial position or results of operations.

In December 2011, the FASB released ASU 2011-11, Balance Sheet (Topic 210): Disclosures about Offsetting Assets and Liabilities (“ASU 2011-11”). ASU 2011-11 requires companies to provide new disclosures about offsetting and related arrangements for financial instruments and derivatives. The provisions of ASU 2011-11 are effective for reporting periods beginning on or after January 1, 2013, and are required to be applied retrospectively. The adoption of ASU 2011-11 is not expected to have a material impact on the Company’s financial statement disclosures.

Reclassifications –

The Company made the following reclassification to the Company’s 2011 Condensed Consolidated Balance Sheets to conform to the 2012 presentation: (i) a reclassification of amounts relating to leasing commissions from Operating real estate and Real estate under development to Other assets.

2. Operating Property Activities

Acquisitions -

During the nine months ended September 30, 2012, the Company acquired the following properties, in separate transactions (in thousands):

			Purchase Price
Property Name	Location	Month Acquired	Cash		Debt Assumed		Total		GLA*
Woodbridge S.C.	Sugarland, TX	Jan-12	$	9,000	$	-	$	9,000		97
Bell Camino Center	Sun City, AZ	Jan-12		4,185		4,210		8,395		63
Olympia West Outparcel	Olympia, WA	Feb-12		1,200		-		1,200		6
Frontier Village (1)	Lake Stevens, WA	Mar-12		12,231		30,900		43,131		195
Silverdale S.C. (1)	Silverdale, WA	Mar-12		8,335		24,000		32,335		170
31 parcels (2)	Various	Jan-12		30,753		-		30,753		83
1 parcel (3)	Duncan, SC	Jan-12		1,048		-		1,048		3
30 parcels (2)	Various	Mar-12		39,493		-		39,493		107
1 parcel (3)	Peru, IL	Mar-12		995		-		995		4
Towson Place (4)	Towson, MD	Apr - 12		69,375		57,625		127,000		680
Prien Lake Outparcel	Lake Charles, LA	May - 12		1,800		-		1,800		8
Devon Village	Devon, PA	June -12		28,550		-		28,550		79
4 Properties	Various, NC	June - 12		63,750		-		63,750		368
Lake Jackson (5)	Lake Jackson, TX	July - 12		5,500		-		5,500		35
Woodlawn S.C.	Charlotte, NC	July - 12		7,050		-		7,050		137
Columbia Crossing - 2 Outparcels	Columbia, MD	July - 12		11,060		-		11,060		69
Pompano Beach (6)	Pompano Beach, FL	July - 12		12,180		-		12,180		81
6 Parcels (2)	Various	July - 12		8,111		-		8,111		19
Wilton S.C.	Wilton, CT	Aug - 12		18,800		20,900		39,700		96
Hawthorne Hills S. C.	Vernon Hills, IL	Aug - 12		15,974		21,563		37,537		193
			$	349,390	$	159,198	$	508,588		2,493

* Gross leasable area ("GLA")

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(1)   These properties were acquired from a joint venture in which the Company has a 15% noncontrolling interest.  The Company evaluated these transactions pursuant to the FASB’s Consolidation guidance and as such recognized an aggregate gain of  $2.0 million from the fair value adjustment associated with its original ownership due to a change in control which is included in Equity in income of joint ventures, net on the Company’s Condensed Consolidated Statements of Income.

(2)   Acquired an aggregate of 67 parcels net leased to restaurants through a consolidated joint venture, in which the Company has a 99.1% controlling interest.  During July 2012, the Company purchased the remaining 0.9% interest for $0.7 million.

(3)   Acquired an aggregate of two parcels net leased to restaurants through a consolidated joint venture, in which the Company has a 92.0% controlling interest.  During July 2012, the Company sold 4% of its interest for $0.1 million.  The Company continues to have a controlling interest in the joint venture and therefore continues to consolidate this investment.

(4)   This property was acquired from a joint venture in which the Company had a 30% noncontrolling interest.  The Company evaluated this transaction pursuant to the FASB’s Consolidation guidance and as such recognized a gain of $12.1 million from the fair value adjustment associated with its original ownership due to a change in control.  In addition, the Company recognized promote income of $1.1 million in connection with this transaction.  The gain and promote income are included in Equity in income of joint ventures, net on the Company’s Condensed Consolidated Statements of Income.   Additionally, the debt assumed in connection with this transaction of $57.6 million was repaid in May 2012.

(5)   The Company acquired this property from a preferred equity investment in which the Company held a noncontrolling interest. The Company evaluated this transaction pursuant to the FASB’s Consolidation guidance.  This transaction resulted in a change in control with no gain or loss recognized.

(6)   This property was acquired from a joint venture in which the Company had a 50% noncontrolling interest.  The Company evaluated this transaction pursuant to the FASB’s Consolidation guidance.  This transaction resulted in a change in control with no gain or loss recognized.

The aggregate purchase price of the properties acquired during the nine months ended September 30, 2012 has been allocated as follows (in thousands):

Land	$	164,990
Buildings		250,505
Above Market Rents		12,556
Below Market Rents		(35,735	)
In-Place Leases		26,128
Building Improvements		78,687
Tenant Improvements		15,615
Mortgage Fair Value Adjustment		(4,158	)
	$	508,588

Additionally, during the nine months ended September 30, 2012, the Company acquired, in separate transactions, the remaining interest in four separate consolidated joint ventures for $8.7 million.  There was no change in control as a result of these transactions and as such the purchase of the remaining interest in these joint ventures resulted in a decrease in noncontrolling interest of $7.4 million and an increase to the Company’s Paid-in capital of $0.2 million.

FNC Realty Corporation –

During the nine months ended September 30, 2012, the Company acquired an additional 13.00% interest in FNC Realty Corporation (“FNC”) for $14.6 million, which increased the Company’s total ownership interest to 82.08%.  The Company had previously and continues to consolidate FNC.

Dispositions –

During the nine months ended September 30, 2012, the Company disposed of 30 operating properties and two outparcels, in separate transactions, for an aggregate sales price of $234.0 million. These transactions, which are included in Discontinued Operations, resulted in an aggregate gain of $36.5 million and impairment charges of $14.3 million.

Additionally, during the nine months ended September 30, 2012, the Company disposed of four land parcels and two outparcels for an aggregate sales price of $7.1 million and recognized an aggregate gain of $2.0 million and impairment charges of $0.3 million related to these transactions. The gains from these transactions are recorded as other income, which is included in Other expense, net, and the impairment charges have been recorded as Impairment charges in the Company’s Condensed Consolidated Statements of Income.  The Company provided seller financing in connection with the sale of one of the land parcels for $1.75 million, which bears interest at a rate of 6.5% for the first six months and 7.5% for the remaining term, and is scheduled to mature in November 2012.  The Company evaluated this transaction pursuant to the FASB’s real estate sales guidance and concluded that the criteria for sale recognition was met.  

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Also, during the nine months ended September 30, 2012, the Company sold a land parcel in San Juan del Rio, Mexico for a sales price of 24.3 million Mexican Pesos (“MXN”) (USD $1.9 million).  The Company recognized a gain of MXN 5.7 million (USD $0.4 million) on this transaction.   The gain from this transaction is recorded as other income, which is included in Other expense, net, in the Company’s Condensed Consolidated Statements of Income.

During the nine months ended September 30, 2012, the Company sold a previously consolidated operating property to a newly formed unconsolidated joint venture in which the Company has a 20% noncontrolling interest for a sales price of $55.5 million.  This transaction resulted in a pre-tax gain of $10.0 million, of which the Company deferred $2.0 million due to its continued involvement.  This gain has been recorded as Gain on sale of operating properties, net of tax in the Company’s Condensed Consolidated Statements of Income.

Impairment Charges -

In addition to the impairment charges described above, during the nine months ended September 30, 2012, the Company recognized an aggregate impairment charge of $22.2 million relating to its investment in three operating properties, which are included in Operating expenses in the Company’s Condensed Consolidated Statements of Income.  The aggregate book value of these properties was $38.3 million. The estimated aggregate fair value of these properties is based upon purchase price offers and comparable sales information aggregating $16.1 million.  These impairment charges resulted from the Company’s efforts to market certain assets and management’s assessment as to the likelihood and timing of such potential transactions (see Footnote 14).

3. Discontinued Operations

The Company reports as discontinued operations, properties held-for-sale as of the end of the current period and assets sold during the period. The results of these discontinued operations are included as a separate component of income on the Condensed Consolidated Statements of Income under the caption Discontinued operations.  This reporting has resulted in certain reclassifications of 2011 financial statement amounts.

The components of income and expense relating to discontinued operations for the three and nine months ended September 30, 2012 and 2011 are shown below. These include the results of operations through the date of each respective sale for properties sold during 2012 and 2011 and the operations for the applicable period for those assets classified as held-for-sale as of September 30, 2012 (in thousands):

	Three Months Ended September 30,						Nine Months Ended September 30,
	2012			2011			2012			2011
Discontinued operations:
Revenues from rental property	$	3,524		$	12,669		$	15,515		$	39,593
Rental property expenses		(1,391	)		(4,266	)		(7,246	)		(14,042	)
Depreciation and amortization		(1,143	)		(3,656	)		(10,125	)		(12,647	)
Interest expense		(199	)		(403	)		(589	)		(1,348	)
Income from other real estate investments		-			1,430			13			1,945
Other expense, net		(35	)		(124	)		(178	)		(57	)
Income/(loss) from discontinued operating properties, before income taxes		756			5,650			(2,610	)		13,444
Impairment charges		(2,582	)		(289	)		(15,201	)		(8,919	)
Gain on disposition of operating properties		13,278			4,535			36,520			8,722
(Provision)/benefit for income taxes, net		(1,993	)		28			(1,697	)		77
Income from discontinued operating properties		9,459			9,924			17,012			13,324
Net loss/(income) attributable to noncontrolling interests		886			25			(1,365	)		(202	)
Income from discontinued operations attributable to the Company	$	10,345		$	9,949		$	15,647		$	13,122

During the nine months ended September 30, 2012, the Company classified as held-for-sale 17 operating properties, comprising 1.9 million square feet of GLA.  The book value of these properties was $69.8 million, net of accumulated depreciation of $51.1 million.  The Company recognized impairment charges of $4.2 million on three of these properties. The book value of the other properties did not exceed its estimated fair value, less costs to sell, and as such no impairment charges were recognized.  The Company’s determination of the fair value of these properties, aggregating $98.6 million, was based upon executed contracts of sale with third parties (see Footnote 14).   In addition, the Company completed the sale of three operating properties during the nine months ended September 30, 2012 for which two were classified as held-for-sale during 2011 (these dispositions are included in Footnote 2 above).  The remaining 16 properties held-for-sale, aggregating $59.1 million, net of accumulated depreciation of $46.4 million, are included in Other assets on the Company’s Condensed Consolidated Balance Sheets.

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4. Ground-Up Development

The Company is engaged in ground-up development projects which will be held as long-term investments by the Company.  The ground-up development projects generally have significant pre-leasing prior to the commencement of construction. As of September 30, 2012, the Company had a total of three ground-up development projects, consisting of two projects located in the U.S. and one project located in Peru.

5. Investments and Advances in Real Estate Joint Ventures

The Company and its subsidiaries have investments in and advances to various real estate joint ventures.  These joint ventures are engaged primarily in the operation of shopping centers which are either owned or held under long-term operating leases. The Company and the joint venture partners have joint approval rights for major decisions, including those regarding property operations.  As such, the Company holds noncontrolling interests in these joint ventures and accounts for them under the equity method of accounting.  The table below presents joint venture investments for which the Company held an ownership interest at September 30, 2012 and December 31, 2011 and the Company’s share of income/(loss) for the nine months ended September 30, 2012 and 2011 (in millions, except number of properties):

As of and for the nine months ended September 30, 2012
Venture	Average Ownership Interest			Number of Properties		Total GLA		Gross Investment In Real Estate		The Company's Investment		The Company's Share of Income/(Loss)
Prudential Investment Program (“KimPru” and “KimPru II”) (1) (2)		15.00	%		61		10.7	$	2,741.1	$	157.6	$	5.6
Kimco Income Opportunity Portfolio (“KIR”) (2)		45.00	%		58		12.4		1,541.9		140.3		17.2
UBS Programs (2)*		17.90	%		40		5.7		1,258.2		58.4		(0.3	)
BIG Shopping Centers (2)*		37.60	%		22		3.6		555.9		33.8		(2.1	)
The Canada Pension Plan Investment Board (“CPP”) (2)		55.00	%		6		2.4		434.2		149.8		4.0
Kimco Income Fund (2)		15.20	%		12		1.5		284.7		12.3		1.4
SEB Immobilien (2)		15.00	%		13		1.8		361.2		1.8		0.5
Other Institutional Programs (2) (5) (8)	Various				61		3.1		556.2		20.7		18.7
RioCan (10)		50.00	%		45		9.3		1,388.8		122.0		24.2
Intown (3)		-			138		N/A		839.3		86.7		2.4
Latin America	Various				131		18.1		1,184.8		333.8		11.1
Other Joint Venture Programs (4) (6) (7) (9) (11)	Various				91		13.4		1,845.7		316.3		21.0
Total					678		82.0	$	12,992.0	$	1,433.5	$	103.7

As of December 31, 2011												For the nine months ended September 30, 2011
Venture	Average Ownership Interest			Number of Properties		Total GLA		Gross Investment In Real Estate		The Company's Investment		The Company's Share of Income/(Loss)
Prudential Investment Program (“KimPru” and “KimPru II”) (1) (2)		15.00	%		63		10.9	$	2,781.4	$	151.9