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taBle oF ContentS1_Property Portfolio14_Financial Review – Table of Contents15_Management’s Discussion and Analysis 121_Audited Consolidated Financial Statements171_Senior Management, Board of Trustees and Unitholder Information

CORE PRINCIPLESConSeRvative leveRage RioCan takes a measured approach to leverage and maintains a strong Balance Sheet with solid coverage metrics.

laddeRed MatuRitieS To avoid the fluctuations of debt markets, RioCan has

laddered its debt maturities to reduce interest rate risk and to manage the amount of debt maturing in any

given year.

diveRSiFied tenant PRoFile To ensure the stability of the Trust, RioCan’s revenue sources are derived from more than 7,600 individual tenants.

StRength in ManageMent From the beginning, RioCan has maintained a consistant vision and philosophy. The management team is comprised of well seasoned and experienced professionals.

StaggeRing oF leaSe MatuRitieS RioCan has staggered its lease maturities to provide additional

security from market fluctuations and to reduce the risk that any single tenant or lease expiry will have a material

impact on its business.

StaBle PRoPeRtY tYPeS and tenantSRioCan has focused on stable sectors, such as grocery, that will withstand the highs and lows of the marketplace. Furthermore, stability is provided by a large proportion of anchor and national tenants, which combined generate more then 86% of RioCan’s rental revenue.

geogRaPhiC diveRSiFiCation RioCan is strategically positioned in Canada’s major population

centres and owns a growing portfolio in the US. In fact, two-thirds of the Trust’s Canadian rental revenue is derived from Canada’s

six major markets, which include Calgary and Edmonton, Alberta, Vancouver, British Columbia, Toronto and the greater

Ottawa region, Ontario, and Montreal, Quebec.

1 23 45 67

Real Estate Portfolio Fact Sheet a s a t D e c emb e r 3 1 , 2 0 1 3 ( a l l m e t r i c s s t a t e d a t R i o C a n ’ s i n t e r e s t )

Canadian Properties US Properties GrandTotalTotal Net Leasable Area (NLA) (sq.ft.): Retail Office Total Retail Office Total

Income Producing Properties 37,533,082 1,825,364 39,358,446 9,881,612 – 9,881,612 49,240,058Properties Under Development (upon completion) 4,910,337 – 4,910,337 – – – 4,910,337Total 42,443,419 1,825,364 44,268,783 9,881,612 – 9,881,612 54,150,395

Number of Tenancies 7,622

Portfolio Occupancy

Canadian Properties US Properties TotalRetail 96.9% 96.8% 96.8%Office 97.3% – 97.3%Total 96.9% 96.8% 96.9%

Geographic Diversification

Number of properties

Percentageof annualized

rentalrevenue

Incomeproducing

properties*

Propertiesunder

development* TotalOntario 56.7% 178 12 190Quebec 10.1% 42 – 42Alberta 10.3% 28 4 32British Columbia 5.4% 17 – 17Other Canada 2.5% 12 – 12Northeastern United States 6.8% 28 – 28Texas 8.2% 19 – 19

100.0% 324 16 340* Certain assets have been reclassified for consistency.

Anchor and National Tenants (including US)

Percentage of annualized rental revenue Percentage of total NLA86.2% 86.9%

Top Ten Sources of Revenue by Tenant (including US)

Rank TenantPercentage of

annualized rental revenueWeighted average remaining

lease term (yrs)1. Walmart 3.7% 12.82. Canadian Tire Corporation (i) 3.4% 8.63. Cineplex/Galaxy Cinemas 3.2% 10.24. Metro/Super C/Loeb/Food Basics 3.2% 7.15. Winners/HomeSense/ Marshalls 2.6% 7.16. Loblaws/No Frills/Fortinos/Zehrs/Maxi (ii) 2.5% 7.47. Target Corporation 1.8% 8.48. Staples/Business Depot 1.7% 5.99. Shoppers Drug Mart (ii) 1.6% 8.7

10. Cara/Prime Restaurants 1.6% 7.2Total 25.3% 8.7

(i) Canadian Tire Corporation includes Canadian Tire/PartSource/Mark’s Work Wearhouse/Sport Mart/Sport Chek/Sports Experts/National Sports/Atmosphere.(ii) Loblaws has entered into an agreement to purchase Shoppers Drug Mart which is scheduled to close in the first quarter of 2014. Upon closing of this

transaction, Loblaws would be RioCan’s largest tenant as measured by gross revenue.

Lease Expiries - Canada

RioCan’s lease expiries for the Canadian and US portfolio, at RioCan’s interest, by property type for the next five years are as follows:

Lease expiries (NLA)

Retail Class Total NLA 2014 2015 2016 2017 2018New Format Retail 18,338,684 1,460,396 1,948,096 1,889,155 1,523,127 2,044,586

8.0% 10.6% 10.3% 8.3% 11.1%Grocery Anchored Centre 8,591,789 1,215,420 921,960 1,192,178 1,213,522 1,122,028

14.1% 10.7% 13.9% 14.1% 13.1%Enclosed Shopping Centre 6,951,963 1,015,710 773,019 1,200,547 507,446 739,170

14.6% 11.1% 17.3% 7.3% 10.6%Non-Grocery Anchored Centre 2,061,301 143,818 301,801 177,684 85,794 143,655

7.0% 14.6% 8.6% 4.2% 7.0%Urban Retail 1,589,345 331,960 35,524 68,716 91,383 272,958

20.9% 2.2% 4.3% 5.7% 17.2%Office 1,825,364 227,528 127,709 223,225 146,365 269,667

12.5% 7.0% 12.2% 8.0% 14.8%Total 39,358,446 4,394,832 4,108,109 4,751,505 3,567,637 4,592,064

11.2% 10.4% 12.1% 9.1% 11.7%Average net rent per square foot $ 16.63 $ 16.75 $ 16.44 $ 16.73 $ 18.86 $ 17.14

Lease Expiries - US

Lease expiries (NLA)

Retail Class Total NLA 2014 2015 2016 2017 2018New Format Retail 7,106,617 412,328 331,326 229,498 410,090 746,584

5.8% 4.7% 3.2% 5.8% 10.5%Grocery Anchored Centre 2,603,479 244,005 134,913 260,449 316,331 367,104

9.4% 5.2% 10.0% 12.2% 14.1%Non-Grocery Anchored Centre 171,516 43,175 15,403 3,708 5,867 32,269

25.2% 9.0% 2.2% 3.4% 18.8%Total 9,881,612 699,508 481,642 493,655 732,288 1,145,957

7.1% 4.9% 5.0% 7.4% 11.6%Average net rent per square foot $ 13.83 $ 15.00 $ 18.87 $ 16.52 $ 17.27 $ 16.04

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PROPERTY PORTFOLIO

*Non-owned anchor

RIOCAN REAL ESTATE INVESTMENT TRUST ANNUAL REPORT 2013

1

ALBERTA

As at December 31, 2013 Ownership RioCan’s Interest Interests Total Site Property and Location (%) NLA (sq. ft.) NLA (sq. ft.) Major or Anchor Tenants

CANADA

17004 & 17008 107th Avenue NWEdmonton, AB

100% 11,963 11,963

5020 97th Street NWEdmonton, AB

100% 11,943 11,943

Brentwood VillageCalgary, AB

50% 134,935 269,870 Safeway, London Drugs, Bed Bath & Beyond, Sears Whole Home

Edmonton Walmart CentreEdmonton, AB

40% 127,714 370,895 Walmart, Golf Town, Totem Building Supplies*

Glenmore LandingCalgary, AB

50% 73,356 146,711 Safeway

Jasper Gates Shopping CentreEdmonton, AB

100% 94,243 149,243 London Drugs, Safeway*

Lethbridge Towne SquareLethbridge, AB

100% 79,396 79,396 London Drugs

Lethbridge Walmart CentreLethbridge, AB

100% 276,760 328,260 Walmart, Shoppers Drug Mart, Totem Building Supplies*

Lowe’s Sunridge CentreCalgary, AB

100% 211,416 211,416 Lowe's, Golf Town

Mayfi eld CommonEdmonton, AB

30% 128,932 429,772 Winners, Save-On-Foods, Value Village, JYSK, World Health

Mill Woods Town CentreEdmonton, AB

40% 217,272 538,601 Safeway, Canadian Tire, Target, Goodlife Fitness

North Edmonton Cineplex CentreEdmonton, AB

100% 75,836 75,836 Cineplex

Northgate Village Shopping CentreCalgary, AB

100% 277,599 404,689 Safeway, Gold's Gym, JYSK, Staples/Business Depot, Home Depot*

RioCan Beacon HillCalgary, AB

50% 263,959 786,918 Canadian Tire, Winners, Future Shop, Sport Chek, Home Depot*, Costco*

RioCan Centre Grand PrairieGrande Prairie, AB

100% 235,697 335,697 Rona, London Drugs, Cineplex, Staples/Business Depot, Walmart*

RioCan Centre Grand Prairie IIGrande Prairie, AB

50% 31,707 63,413 Winners, Michaels, JYSK

RioCan MeadowsEdmonton, AB

50% 154,587 409,174 Home Depot, Staples/Business Depot, Winners, Best Buy, Loblaws*

RioCan ShawnessyCalgary, AB

50% 234,471 839,586 Target, Sport Chek, Future Shop, Canadian Tire* Home Depot*, Co-op*

RioCan Signal Hill CentreCalgary, AB

100% 473,373 588,373 Target, Winners, Michaels, Staples/Business Depot, Indigo, Loblaws*

Riverbend Square Shopping CentreEdmonton, AB

100% 140,990 140,990 Safeway, Shoppers Drug Mart

Southbank CentreCalgary, AB

50% 91,030 335,266 Winners, Michaels, Home Depot*, Costco*

PROPERTY PORTFOLIO

*Non-owned anchor

Cambie Street, Vancouver, BC 100% 148,215 148,215 Canadian Tire, Best Buy

Chahko Mika Mall, Nelson, BC 100% 173,106 173,106 Walmart, Save-On-Foods, Shoppers Drug Mart

Clearbrook Town Square, Abbotsford, BC 50% 94,481 188,962 Safeway, Staples/Business Depot

Cowichan Commons, Duncan, BC 100% 186,629 186,629 Walmart

Dilworth Shopping Centre, Kelowna, BC 100% 197,058 197,058 Safeway, Staples/Business Depot

Grandview Corners, Surrey, BC 50% 262,944 610,887 Walmart, Future Shop, Indigo, Home Depot*

Impact Plaza, Surrey, BC 100% 133,068 133,068 T&T Supermarket

Parkwood Place Shopping CentrePrince George, BC

50% 186,362 372,725 The Bay, Overwaitea, London Drugs, Famous Players, Staples/Business Depot

Peninsula Village Shopping CentreSouth Surrey, BC

50% 85,354 170,707 Safeway, London Drugs

RioCan Langley Centre, Langley, BC 50% 190,285 380,569 Sears Whole Home, Chapters, HomeSense

Southwinds Mall, Oliver, BC 100% 72,972 72,972 Canadian Tire

Strawberry Hill Shopping CentreSurrey, BC

50% 168,905 337,810 Home Depot, Cineplex, Winners, Chapters, Sport Chek

The Junction, Mission, BC 50% 141,267 330,607 Save-On-Foods, Famous Players, London Drugs, Canadian Tire*

Tillicum Centre, Victoria, BC 50% 236,012 472,024 Target, Famous Players, Safeway, Winners, London Drugs

Vernon Square Shopping CentreVernon, BC

100% 98,110 151,110 London Drugs, Safeway*

MANITOBA

Garden City Shopping Centre Winnipeg, MB

30% 96,386 380,558 Canadian Tire, Goodlife Fitness, Winners, Sears*

Kildonan Crossing Shopping Centre Winnipeg, MB

100% 179,029 179,029 Safeway, PetSmart



2

South Edmonton CommonEdmonton, AB

50% 215,209 981,488 London Drugs, The Brick, Home Outfi tters, Old Navy, Home Depot*, Walmart*, Loblaws*, Cineplex*, Staples/Business Depot*, Best Buy*

South Trail CrossingCalgary, AB

100% 313,911 463,911 Co-op, Winners, Staples/Business Depot, Sport Chek, Walmart*, Safeway*

Southland Crossing Shopping CentreCalgary, AB

100% 132,063 132,063 Safeway

Summerwood CentreEdmonton, AB

100% 83,980 83,980 Save-On-Foods, Shoppers Drug Mart

The Market at CitadelEdmonton, AB

100% 50,968 50,968 Shoppers Drug Mart

Timberlea LandingFort McMurray, AB

100% 105,440 105,440

Abbotsford Power Centre, Abbotsford, BC 50% 109,946 459,892 Target, Winners, PetSmart, Costco*, Rona/Revy*

BRITISH COLUMBIA

*Non-owned anchor

PROPERTY PORTFOLIO


Brookside Mall, Fredericton, NB 50% 134,565 269,129 Sobeys, The Province of New Brunswick

Corbett Centre, Fredericton, NB 100% 163,650 163,650 Winners, Bed Bath & Beyond, Home Depot*, Costco*

Northumberland Square Miramichi, NB

100% 160,631 160,631 Sport Chek

Quispamsis Town Centre Quispamsis, NB


Shoppers on Topsail, St. John’s, NFLD 100% 29,690 29,690 Shoppers Drug Mart

Trinity Conception Square Carbonear, NFLD

100% 182,545 182,545 Metro, Walmart

3

12 Vodden Street, Brampton, ON 100% 32,294 32,294

1208 & 1260 Dundas Street East Whitby, ON

100% 7,697 7,697

1650-1660 Carling Avenue Ottawa, ON

100% 142,188 142,188 Canadian Tire

1910 Bank Street, Ottawa, ON 100% 6,425 6,425

2422 Fairview Street, Burlington, ON 100% 6,221 6,221

2950 Carling Avenue (Rexall Centre) Ottawa, ON

100% 10,422 10,422 Pharma Plus

2955 Bloor Street West, Toronto, ON 100% 8,777 8,777

2990 Eglinton Avenue East Scarborough, ON

100% 6,140 6,140

3736 Richmond Road Nepean, ON

100% 2,938 2,938

404 Town Centre, Newmarket, ON 50% 133,924 267,848 Walmart, Metro

410-444 Bathurst Street, Toronto, ON 60% 18,110 30,183

4055-4065 Carling Avenue Kanata, ON

100% 22,496 22,496

410 King Street North, Waterloo, ON 100% 2,067 2,067

Halifax Walmart Centre, Halifax, NS 50% 68,995 68,995 Walmart


NEW BRUNSWICK

NEWFOUNDLAND

NOVA SCOTIA

ONTARIO

PROPERTY PORTFOLIO

*Non-owned anchor



4

506 & 510 Hespeler Rd Cambridge, ON

100% 12,515 12,515

547-563 College Street, Toronto, ON 100% 74,388 74,388 LCBO

649 Queen Street, Toronto, ON 100% 14,200 14,200 Crate & Barrel

6666 Lundy’s Lane, Niagara Falls, ON 100% 8,434 8,434

735 Queenston Road, Hamilton, ON 100% 8,818 8,818

740 Dupont Street, Toronto, ON 100% 25,000 25,000

Adelaide Centre, London, ON 100% 80,998 80,998 Metro

Ajax Marketplace, Toronto, ON 100% 70,724 70,724 Food Basics, Pharma Plus

Albion Centre, Toronto, ON 50% 188,246 376,491 Canadian Tire, Fortinos

Belleville Stream Centre, Belleville, ON 100% 89,237 89,237 Stream International

Belleville Walmart Centre, Belleville, ON 100% 275,410 275,410 Walmart, JYSK, PetSmart

Bellfront Shopping Centre, Belleville, ON 100% 109,995 109,995 Bed Bath & Beyond, Canadian Tire*

Brant Power Centre, Burlington, ON 50% 57,539 115,077 Best Buy, PetSmart, Home Outfitters

Burlington Mall, Burlington, ON 50% 318,745 750,643 Canadian Tire, Target, Winners, The Bay*

Cambrian Mall, Sault Ste. Marie, ON 100% 129,697 311,572 Shoppers Drug Mart, Winners

Campus Estates, Guelph, ON 100% 72,857 72,857 No Frills

Chapman Mills Marketplace, Ottawa, ON 75% 324,095 547,127 Walmart, Winners, Staples/Business Depot, Loblaws*

Cherry Hill Shopping Centre, Fergus, ON 100% 73,886 73,886 Zehrs

Churchill Plaza, Sault Ste. Marie, ON 100% 148,225 148,225 Metro

City View Plaza, Nepean, ON 100% 59,876 59,876 Le Baron Sports, Pharma Plus, PartSource

Clarkson Crossing, Mississauga, ON 50% 106,530 213,060 Metro, Canadian Tire, Shoppers Drug Mart

Clarkson Village Shopping Centre Mississauga, ON

100% 63,844 63,844 HomeSense

Colborne Place, Brantford, ON 100% 70,406 70,406 No Frills

Coliseum Ottawa, Ottawa, ON 100% 109,260 109,260 Cineplex, Shoppers Drug Mart

Collingwood Centre, Collingwood, ON 100% 212,637 212,637 IGA, Canadian Tire

Commissioners Court Plaza London, ON

100% 94,140 94,140 Food Basics

County Fair Mall, Smiths Falls, ON 100% 162,800 162,800 Target, Food Basics

Dufferin Plaza, Toronto, ON 100% 65,195 65,195 Staples/Business Depot

Dundas/427 Marketplace, Toronto, ON 100% 97,860 97,860 Staples/Business Depot

Eagle’s Landing, Vaughan, ON 100% 177,030 177,030 Metro (Yummy Market)

Eastcourt Mall, Cornwall, ON 100% 179,861 179,861 No Frills, Urban Planet, Dollarama, Shoppers Drug Mart

Elmvale Acres Shopping Centre Ottawa, ON

100% 146,696 146,696 Loblaws, Pharma Plus

Empress Walk, Toronto, ON 100% 180,626 238,626 Future Shop, Goodlife Fitness, Staples/Business Depot, Loblaws*

Fairlawn Centre, Ottawa, ON 100% 8,322 8,322

Fallingbrook Shopping Centre Ottawa, ON

100% 97,145 97,145 Loeb, Shoppers Drug Mart

PROPERTY PORTFOLIO

*Non-owned anchor



5

Five Points Shopping Centre Oshawa, ON

100% 397,870 397,870 Target, Metro, Staples/Business Depot, Value Village, Sears, LA Fitness

Flamborough Power Centre Flamborough, ON

100% 181,694 181,694 Target, Value Village

Flamborough Walmart Centre Flamborough, ON

100% 303,590 303,590 Walmart, Rona

Frontenac Mall, Kingston, ON 30% 84,810 282,700 Food Basics, Value Village

Galaxy Centre, Owen Sound, ON 100% 91,563 91,563 No Frills, Galaxy Theatres

Garrard & Taunton, Whitby, ON 100% 146,835 146,835 Lowe's

Gates of Fergus, Fergus, ON 50% 52,983 105,965 Target

Glendale Marketplace, Toronto, ON 100% 53,963 53,963 YIG, Pharma Plus

Goderich Walmart Centre, Goderich, ON 100% 96,853 204,709 Walmart, Canadian Tire*, Loblaws*

Goodlife Plaza, St. Catharines, ON 100% 144,983 144,983 Goodlife Fitness, Canadian Tire (call centre)

Grant Crossing, Kanata, ON 60% 113,410 289,017 Winners, HomeSense, Lowe's*

Green Lane Centre, Newmarket, ON 33% 52,890 417,716 Bed Bath & Beyond, Michaels, PetSmart, Costco*, Loblaws*

Halton Hills Shopping Centre Georgetown, ON

100% 75,724 75,724 Food Basics

Hamilton Highbury Plaza London, ON

100% 5,269 5,269

Hamilton Walmart Centre Hamilton, ON

100% 271,888 271,888 Walmart, Winners, Staples/Business Depot

Hartsland Market Square Guelph, ON

100% 108,719 108,719 Zehr's

Hawkesbury Centre Hawkesbury, ON

50% 36,891 73,782 Price Chopper, Shoppers Drug Mart

Heart Lake Town Centre Brampton, ON

100% 126,264 126,264 Metro

Herongate Mall, Ottawa, ON 75% 47,453 63,270 Food Basics, Pharma Plus

Highbury Shopping Plaza, London, ON 100% 70,981 70,981 LA Fitness

Hunt Club Centre, Ottawa, ON 100% 67,166 67,166 Metro

Hunt Club Centre II, Ottawa, ON 100% 127,953 127,953 Lowe’s

Huron Heights, London, ON 50% 44,982 89,964 Shoppers Drug Mart

Innes Road Plaza, Ottawa, ON 100% 47,511 167,511 PetSmart, Costco*

Kanata Centrum Shopping Centre Kanata, ON

100% 286,445 466,445 Walmart, Chapters, Loblaws, Canadian Tire*, AMC Theatres*

Kendalwood Park Plaza, Whitby, ON 50% 79,344 158,688 Price Chopper, Value Village, Shoppers Drug Mart

Kennedy Commons, Toronto, ON 50% 193,359 467,718 The Brick, Metro, Sears Whole Home, Chapters, LA Fitness, Michaels

Keswick Walmart Centre, Keswick, ON 75% 120,363 160,484 Walmart

King George Square, Belleville, ON 50% 35,965 71,930 Metro

King Plaza, Oshawa, ON 100% 34,202 34,202 Shoppers Drug Mart

PROPERTY PORTFOLIO

*Non-owned anchor



6

King & Portland Toronto, ON

50% 38,206 76,412

Lawrence Square, Toronto, ON 100% 675,430 675,430 Target, Fortinos, Canadian Tire

Lincoln Fields Shopping Centre Ottawa, ON

50% 143,444 286,888 Walmart, Loeb

London Plaza, London, ON 100% 122,183 122,183 Gold's Gym, Value Village

Markington Square, Scarborough, ON 100% 173,032 173,032 Metro, Gold’s Gym

Meadowlands Power Centre Ancaster, ON

100% 145,305 589,209 HomeSense, Future Shop, Sport Chek, Costco*, Home Depot*, Sobeys*, Staples/Business Depot*, Target*

Meadow Ridge Plaza, Toronto, ON 20% 21,680 108,399 Sobeys

Merivale Market, Nepean, ON 75% 59,135 78,847 Food Basics, Shoppers Drug Mart

Millcroft Shopping Centre, Burlington, ON 50% 185,227 370,454 Target, Canadian Tire, Metro

Miracle Plaza, Hamilton, ON 100% 83,765 83,765 Metro

Mississauga Plaza, Mississauga, ON 100% 176,305 176,305 FreshCo

New Liskeard Walmart Centre New Liskeard, ON

100% 110,522 155,278 Walmart, Canadian Tire*

Niagara Falls Plaza, Niagara Falls, ON 100% 143,815 143,815 Foodland, LA Fitness

Niagara Square, Niagara Falls, ON 30% 121,247 404,155 Cineplex, Winners, Future Shop, JYSK, The Brick

Nortown Centre, Chatham, ON 50% 35,712 71,423 Food Basics

Norwest Plaza, Kingston, ON 100% 39,916 39,916 Goodlife Fitness

Oakridge Centre, London, ON 100% 34,024 139,524 Pharma Plus, CIBC, Loblaws*

Orillia Square Mall, Orillia, ON 100% 320,478 320,478 Target, Canadian Tire, No Frills, The Brick

Pine Plaza, Sault Ste. Marie, ON 100% 42,455 42,455 Food Basics

Queensway Cineplex, Toronto, ON 50% 64,099 128,197 Cineplex

RioCan Centre Barrie, Barrie, ON 100% 244,589 244,589 Mountain Equipment Co-op, Loblaws, Lowe’s

RioCan Centre Belcourt, Kanata, ON 60% 118,259 339,098 Empire Theatres, Food Basics, Lowe's*

RioCan Centre Burloak, Oakville, ON 50% 227,312 552,623 Cineplex, Home Outfitters, Longo's, Home Depot*

RioCan Centre Kingston, Kingston, ON 100% 632,777 753,822 Sears, Staples/Business Depot, Winners, Future Shop, HomeSense, Old Navy, Cineplex, Home Depot*

RioCan Centre London North London, ON

100% 105,040 165,040 Chapters, PetSmart, Loblaws*

RioCan Centre London South London, ON

100% 139,600 139,600 Metro

RioCan Centre Merivale, Nepean, ON 100% 201,670 201,670 Your Independent Grocer, Winners, Home Outfitters

RioCan Centre Milton, Milton, ON 100% 171,465 256,465 Cineplex, LA Fitness, Home Depot*

RioCan Centre Newmarket Newmarket, ON

40% 26,688 66,720 Mark's Work Wearhouse, Staples/Business Depot

RioCan Centre Sudbury, Sudbury, ON 50% 201,912 669,220 Famous Players, Staples/Business Depot, Chapters, Sears, Old Navy, Costco*, Home Depot*

RioCan Centre Vaughan, Vaughan, ON 100% 262,336 262,336 Walmart

PROPERTY PORTFOLIO

*Non-owned anchor



7

RioCan Centre Windsor, Windsor, ON 100% 239,321 349,321 Famous Players, Sears, The Brick, Staples/Business Depot, Costco*

RioCan Colossus Centre, Vaughan, ON 100% 581,615 711,615 HomeSense, Rona, Golf Town, Marshalls, Cineplex, Costco*

RioCan Durham Centre (I, II, III, IV, V) Ajax, ON

100% 944,731 1,325,731 Walmart, Canadian Tire, Cineplex, Winners, Chapters, Sport Chek, HomeSense, Best Buy, Old Navy, Target, Home Depot*, Loblaws*, Costco*

RioCan Elgin Mills Crossing Richmond Hill, ON

100% 320,325 441,325 Costco, Staples/Business Depot, Michaels, PetSmart, Home Depot*

RioCan Fairgrounds, Orangeville, ON 100% 330,692 474,767 Walmart, Future Shop, Galaxy Theatres

RioCan Georgian Mall Barrie, ON

100% 509,995 626,510 The Bay, Atmosphere, HomeSense, H&M, Sears*

RioCan Grand Park, Mississauga, ON 50% 59,319 118,638 Winners, Shoppers Drug Mart, Staples/Business Depot

RioCan Gravenhurst, Gravenhurst, ON 100% 149,548 149,548 Canadian Tire, Sobeys

RioCan Hall, Toronto, ON 100% 247,420 247,420 Cineplex, Marshalls

RioCan Leamington, Leamington, ON 100% 192,889 192,889 Walmart, Metro

RioCan Leaside Centre, Toronto, ON 50% 66,518 133,036 Canadian Tire, Future Shop, PetSmart

RioCan Marketplace Toronto, Toronto, ON 33% 56,482 413,582 Winners, Loblaws*, Home Depot*

RioCan Niagara Falls, Niagara Falls, ON 100% 268,876 367,451 Target, Staples/Business Depot, Loblaws, Home Depot*

RioCan Oakville Place, Oakville, ON 100% 458,276 458,276 The Bay, Sears, H&M

RioCan Orleans, Orleans, ON 100% 182,251 297,251 Metro, JYSK, Staples/Business Depot, Home Depot*

RioCan Renfrew Centre, Renfrew, ON 100% 53,099 127,099 Loblaws*

RioCan Scarborough Centre, Toronto, ON 100% 320,525 320,525 Target, Staples/Business Depot, LA Fitness

RioCan St. Laurent, Ottawa, ON 50% 150,672 312,093 Target, Loeb, Winners

RioCan Thickson, Whitby, ON 50% 181,535 493,070 Home Outfitters, Winners, JYSK, Future Shop, PetSmart, HomeSense, Home Depot*

RioCan Thickson Ridge - Bed Bath & Beyond, Whitby, ON

16% 4,374 28,222 Bed Bath & Beyond

RioCan Victoria, Whitby, ON 50% 49,290 98,580 Rona

RioCan Warden, Toronto, ON 100% 232,542 232,542 Lowe's, Marshalls, Future Shop

RioCan West Ridge Place, Orillia, ON 100% 223,008 353,008 Sport Chek, Metro, Galaxy Cinemas, Sears, Home Depot*

RioCan Yonge Eglinton Centre, Toronto, ON 100% 1,018,060 1,018,060 Famous Players, Chapters, Metro

RioCentre Brampton, Brampton, ON 100% 103,607 103,607 Food Basics

RioCentre Kanata, Ottawa, ON 100% 108,562 108,562 Sobeys, Pharma Plus

RioCentre Newmarket, Newmarket, ON 100% 92,679 92,679 Metro, Shoppers Drug Mart

RioCentre Oakville, Oakville, ON 100% 106,884 106,884 Metro, Shoppers Drug Mart

RioCentre Thornhill, Thornhill, ON 100% 140,370 140,370 No Frills, Winners, HomeSense

Sandalwood Square Shopping Centre Mississauga, ON

100% 107,060 107,060 Value Village

Sherwood Forest Mall, London, ON 100% 218,203 218,203 Metro, Shoppers Drug Mart, Goodlife Fitness

PROPERTY PORTFOLIO

*Non-owned anchor



Shoppers City East, Ottawa, ON 63% 7,574 123,525 Staples/Business Depot, Shoppers Drug Mart

Shoppers on Argyle, Caledonia, ON 100% 17,024 17,024 Shoppers Drug Mart

Shoppes on Avenue, Toronto, ON 100% 20,884 20,884 Bank of Montreal, Pharma Plus

Shoppes on Queen West, Toronto, ON 100% 89,690 89,690 Loblaws, Winners

Shoppers Drug Mart Pembroke Pembroke, ON


Shoppers World Brampton Brampton, ON

100% 689,840 689,840 Target, Canadian Tire, Winners, Staples/Business Depot, Oceans

Shoppers World Danforth, Toronto, ON 50% 164,510 329,019 Target, Metro, Staples/Business Depot

Silver City Gloucester, Gloucester, ON 80% 181,778 287,223 Cineplex, Chapters, Future Shop, Old Navy, Loblaws*

South Cambridge Shopping Centre Cambridge, ON

100% 190,060 190,060 Zehrs, Home Hardware

South Hamilton Square, Hamilton, ON 100% 305,292 305,292 Target, Fortinos, Shoppers Drug Mart, Goodlife Fitness

Southgate Shopping Centre Ottawa, ON

100% 72,774 72,774 Metro, Shoppers Drug Mart

Spring Farm Marketplace Toronto, ON

100% 73,077 73,077 Sobeys, Shoppers Drug Mart

St. Clair Beach Shopping Centre Windsor, ON

100% 76,001 126,001 National Sports, Zehrs*

Stratford Centre, Stratford, ON 100% 158,736 158,736 Target, Metro

Sudbury Place, Sudbury , ON 100% 144,442 200,186 Target, Your Independent Grocer*

Sunnybrook Plaza, Toronto, ON 100% 50,980 50,980 Pharma Plus

Tanger Outlets Cookstown Cookstown, ON

50% 67,288 134,576

Timiskaming Square New Liskeard, ON

100% 160,777 160,777 Food Basics

Timmins Square, Timmins, ON 30% 117,150 390,501 Sears, No Frills, Winners, Sport Chek, Urban Planet

Trafalgar Ridge Shopping Centre Oakville, ON

100% 131,251 131,251 Goodlife Fitness, HomeSense

Trenton Walmart Centre, Trenton, ON 100% 147,416 147,416 Walmart

Trinity Common Brampton Brampton, ON

80% 529,748 877,185 Target, Famous Players, Metro, Winners, HomeSense, Future Shop, Staples/Business Depot, Canadian Tire*, Home Depot*

Trinity Crossing, Ottawa, ON 100% 191,464 371,464 Michaels, HomeSense, Value Village, Loblaws*

Upper James Plaza, Hamilton, ON 100% 126,252 126,252 Canadian Tire, Metro

Victoria Crossing Marketplace Toronto, ON

100% 64,864 64,864 FreshCo (Sobeys)

Viewmount Centre, Nepean, ON 50% 65,385 130,770 Metro, Best Buy, HomeSense

Walker Place, Burlington, ON 50% 34,929 69,858 FreshCo (Sobeys)

Walker Towne Centre, Windsor, ON 100% 39,788 39,788

West Side Place, Port Colborne, ON 100% 93,383 93,383 No Frills

8

PROPERTY PORTFOLIO

*Non-owned anchor



9

Westgate Shopping Centre Ottawa, ON


Wharncliffe Shopping Centre, London, ON 100% 60,711 60,711 No Frills

White Shield Plaza, Scarborough, ON 60% 97,574 162,623 Lone Thai Grocery (Metro)

Woodview Place, Burlington, ON 100% 147,852 147,852 Metro, JYSK, Chapters

Yonge & Erskine Avenue, Toronto, ON 50% 5,841 11,682

Yonge Sheppard Centre, Toronto, ON 50% 299,650 599,299 Goodlife Fitness, Winners

Charlottetown Mall, Charlottetown, PEI 50% 166,273 332,545 Target, Loblaws Atlantic Superstore, Winners, Sport Chek

2335 Boul Lapiniere, Brossard, PQ 100% 2,259 2,259

541 Boul Saint Joseph, Gatineau, PQ 100% 2,584 2,584

Carrefour Carnaval - St. LeonardSt. Leonard, PQ

100% 171,096 171,096 Super C, Value Village

Carrefour Neufchatel, Neufchatel, PQ 100% 205,477 205,477 Super C, Gold’s Gym, Staples/Business Depot

Centre Carnaval - DrummondvilleDrummondville, PQ

100% 146,961 146,961 Super C, Staples/Busimess Depot

Centre Carnaval - LaSalleLaSalle, PQ

100% 209,788 209,788 Super C, L’Aubainerie

Centre Carnaval - Montreal, Montreal, PQ 100% 67,815 67,815 Super C

Centre Carnaval - PierrefondsPierrefonds, PQ

100% 129,417 129,417 Super C

Centre Carnaval - Trois Rivieres Trois Rivieres, PQ

100% 112,888 112,888 Super C, Rossy

Centre Commercial ForestMontreal, PQ

100% 118,710 118,710 Staples/Business Depot, Rossy

Centre Jacques Cartier, Longueuil, PQ 50% 107,155 214,310 IGA, Guzzo Cinema, Value Village

Centre La Prairie, La Prairie, PQ 50% 34,541 69,081 Sobeys

Centre Regional ChateauguayChateauguay, PQ

50% 107,155 214,310 Super C

Centre Rene A. Robert Ste. Therese, PQ

50% 25,919 51,837 Sobeys

Centre RioCan Kirkland Kirkland, PQ

100% 320,088 320,088 Cineplex, Staples/Business Depot, Winners

Centre Sicard, Ste. Therese, PQ 100% 106,960 106,960 IGA, Jean Coutu

Centre St. JeanSt. Jean Sur Richelieu, PQ

100% 103,278 103,278 Sobeys

Centre St. Julie, Ste. Julie, PQ 50% 30,389 60,778 Sobeys

Centre St. Martin, Laval, PQ 100% 171,934 171,934 Provigo, Shoppers Drug Mart

Centre Concorde, Laval, PQ 50% 31,649 63,298 Sobeys

PRINCE EDWARD ISLAND

QUEBEC

PROPERTY PORTFOLIO


*Non-owned anchor


10

Desserte Ouest, Laval, PQ 50% 58,074 116,147 Target

Galeries Laurentides, St. Jerome, PQ 100% 451,784 451,784 Maxi

Galeries Mille Iles, Rosemere, PQ 100% 255,915 255,915 Staples/Business Depot, Maxi

Granby, Granby, PQ 100% 49,556 49,556 L’Aubainerie

Lachute Walmart CentreLachute, PQ

100% 75,682 110,682 Walmart, Loblaws*

Les Factories Tanger BromontBromont, PQ

50% 81,472 162,943 Sports Experts, Urban Planet

Les Factories Tanger Saint-SauveurSaint-Sauveur, PQ

50% 57,849 115,697 Atmosphere, Merrell, Nike

Les Galeries Lachine, Lachine, PQ 100% 171,667 171,667 Maxi, Rossy

Levis, Levis, PQ 100% 18,988 18,988

Mega Centre Notre DameSainte Dorothee, PQ

100% 425,430 494,983 Winners, Sports Experts, Super C*, Shoppers Drug Mart*

Mega Centre Rive-Sud, Levis, PQ 100% 207,215 207,215 Walmart, Canadian Tire*, Home Depot*

Place Carnaval Laval, LaSelle, PQ 100% 103,217 103,217 Super C, Jean Coutu

Place Kennedy, Levis, PQ 100% 105,648 155,648 Bureau en Gros, Winners, Canadian Tire*

Place Newman, LaSalle, PQ 100% 189,546 189,546 Maxi, Winners, Rossy

RioCan Gatineau, Gatineau, PQ 50% 143,254 286,507 Walmart, Canadian Tire, Super C

RioCan Greenfi eld, Greenfi eld Park, PQ 50% 188,106 376,211 Maxi, Winners, Staples/Business Depot, Guzzo Cinemas

RioCan La Gappe, Gatineau, PQ 100% 341,279 341,279 Walmart, Winners, Golf Town

Shoppers Drug Mart - RepentignyRepentigny, PQ


Silver City Hull, Hull, PQ 100% 84,590 469,590 Cineplex, Rona*, Walmart*, Maxi*, Staples/Business Depot*, Winners*

St. Hyacinthe Walmart Centre Ste. Hyacinthe, PQ

100% 167,003 254,503 Walmart, Staples/Business Depot, Canadian Tire*

Vaudreuil Shopping Centre Vaudreuil-Dorion, PQ

100% 117,965 197,965 Golf Town, Staples/Business Depot, Canadian Tire*, Super C*

Parkland Mall, Yorkton, SA 100% 267,496 267,496 Canadian Tire, Value Village, IGA

SASKATCHEWAN

PROPERTY PORTFOLIO

UNITED STATES


ES

*Non-owned anchor11


First Colony Center, California, MD 100% 98,186 357,383 Giant Foods, Michaels, Dress Barn, Pier One Imports

Marlboro Crossroads, Upper Marlboro, MD 100% 67,975 67,975 Giant Foods

Northwoods Crossing, Taunton, MA 100% 159,562 159,562 BJ's Wholesale Club

Shaw’s Plaza, Raynham, MA 100% 176,609 176,609 Shaw's, Marshalls

Montville Commons, Montville, CT 100% 117,916 236,722 Stop & Shop, Home Depot*

Stop N Shop Plaza, Bridgeport, CT 100% 54,510 54,510 Giant Foods

Cross Keys Place, Turnersville, NJ 100% 148,173 253,173 Sports Authority, Old Navy, Bed Bath & Beyond, Home Depot*

Deptford Landing, Deptford, NJ 100% 517,097 517,097 Walmart, Sam’s Club, hhgregg, Michaels, PetSmart

Sunrise Plaza, Forked River, NJ 100% 260,895 260,895 Home Depot, Kohl’s

Beekman Stop N Shop, Beekman, NY 100% 40,415 40,415 Giant Foods

Huntington Square, East Northport, NY 100% 116,221 116,221 Stop & Shop, Best Buy

Blue Mountain Commons, Harrisburg, PA 100% 123,353 123,353 Giant

Columbus Crossing Shopping Center Philadelphia, PA

100% 142,166 142,166 Super Fresh, Old Navy, AC Moore

Creekview, Warrington, PA 100% 136,423 425,339 Giant, LA Fitness, JoAnn Fabrics, Lowe’s*, Target*

Exeter Commons, Exeter, PA 100% 361,321 494,191 Lowe’s, Giant Foods Supermarket, Target*

Village Shoppes at Salem, Salem, NH 100% 170,270 170,270 Sports Authority, PetSmart

NEW HAMPSHIRE

MASSACHUSETTS

MARYLAND

NEW JERSEY

NEW YORK

PENNSYLVANIA

CONNECTICUT

PROPERTY PORTFOLIO

*Non-owned anchor



12

1890 Ranch, Austin, TX 100% 468,896 793,896 Cinemark, Offi ce Depot, PetSmart, Target*, Hobby Lobby*

Alamo Ranch, San Antonio, TX 100% 468,046 843,046 Dick’s Sporting Goods, Best Buy, Ross, Marshalls

Arbor Park, San Antonio, TX 100% 139,718 139,718 Ross Dress, Offi ce Max, Michaels

Bear Creek Shopping CenterHouston, TX

100% 87,912 87,912 HEB

Bird Creek Crossing, Temple, TX 100% 124,941 388,975 Best Buy, PetSmart, Target*, Home Depot*

Cinco Ranch, Houston, TX 100% 97,761 271,761 HomeGoods, Michaels, Offi ce Max, SuperTarget*

Great Southwest CrossingGrand Prairie, TX

100% 153,105 283,173 Offi ce Depot, PetSmart, Kroger, Sam’s Club*

Ingram Hills Shopping CenterSan Antonio, TX

100% 80,347 80,347 La Fiesta

Las Colinas Village, Irving, TX 100% 104,741 104,741 Staples

Las Palmas Marketplace, El Paso, TX 100% 637,272 717,272 Lowe’s, Kohl’s, Bed Bath & Beyond, Ross Stores

Lincoln Square, Arlington, TX 100% 471,577 471,577 Best Buy, Ross, PetSmart, Stein Mart, Michaels

Louetta Central, Houston, TX 100% 179,995 391,995 Kohl’s, Ross Dress For Less, Michaels, Walmart*

Market Street - Colleyville CenterDallas, TX

100% 72,617 72,617 Market Street

Market Street - Stonebridge RanchDallas, TX

100% 88,389 88,389 Market Street

Montgomery Plaza, Fort Worth, TX 80% 232,897 465,011 Marshalls, Ross, Offi ce Depot, PetSmart, SuperTarget*

Riverpark Shopping Center I, IISugar Land, TX

100% 253,011 317,340 HEB, Walgreen’s, LA Fitness, Dollar Tree, Gander Mountain*

Southpark Meadows, Austin, TX 100% 821,141 1,071,141 Walmart, JC Penny, Hobby Lobby, Target*

Suntree Square, Southlake, TX 100% 99,269 99,269 Tom Thumb

Timber Creek, Dallas, TX 100% 474,441 474,441 Walmart, JC Penny

Gettysburg Marketplace, Gettysburg, PA 100% 82,785 82,785 Giant Foods

Loyal Plaza, Williamsport, PA 100% 293,825 293,825 Kmart, Staples

Monroe Marketplace, Selinsgrove, PA 100% 364,930 491,772 Giant Foods, Kohl’s, Dick’s Sporting Goods, Best Buy, TJ Maxx, Target*

Northland Center, State College, PA 100% 111,496 111,496 Giant Foods, CVS Pharmacy

Pitney Road, Lancaster, PA 100% 45,915 183,848 Best Buy, Lowe’s*

Sunset Crossing, Dickson City, PA 100% 74,142 74,142 Giant Foods

Town Square Plaza, Reading, PA 100% 127,678 254,678 Giant Foods, PetSmart, AC Moore, Target*

York Marketplace, York, PA 100% 305,410 305,410 Giant Foods, Lowe’s

Super Stop & Shop Plaza, Richmond, RI 100% 60,488 60,488 Stop & Shop

RHODE ISLAND

TEXAS

PROPERTY PORTFOLIO

*Non-owned anchor



13

New River Valley, Christianburg, VA 100% 164,663 164,663 Best Buy, Ross Stores, Bed Bath & Beyond

Towne Crossing Shopping Center Richmond, VA

100% 111,016 111,016 Bed Bath & Beyond, Michaels

The Commons, Martinsburg, WVA 100% 274,096 401,919 Dick’s Sporting Goods, Best Buy, TJ Maxx, PetSmart, Target*

VIRGINIA

WEST VIRGINIA

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RioCanFINANCIAL REVIEWMANAGEMENT’S DISCUSSION AND ANALYSIS

15 About This Management’sDiscussion and Analysis

15 Forward-Looking Information16 About RioCan17 Presentation of Financial

Information and Non-GAAPMeasures

18 2013 Change in Accounting Policy19 Operational and Financial

Highlights26 2013 Financial Highlights27 2013 Operating Highlights29 Capital Management30 Outlook and Strategy32 Corporate Responsibility33 Occupancy42 Results of Operations42 Reconciliation of Net Earnings to

Net Earnings at RioCan’sInterest

49 Results of Operations – RioCan’sInterest

50 Operating Funds fromOperations (OFFO) & AdjustedFFO (AFFO)

52 Net Operating Income58 Other Revenue59 Other Expenses60 Asset Profile60 Investment Property62 Income Properties62 Acquisitions During 201371 Capital Expenditures on Income

Properties72 Joint Venture and Partnership

Activities78 Properties Under Development79 Development Property

Acquisitions82 Development Pipeline Summary90 Mortgages and Loans Receivable101 Related Party Transactions101 Capital Strategy and Resources102 Capital Structure

103 Debt and Leverage Metrics105 Debt105 Revolving Lines of Credit105 Debentures Payable107 Mortgages Payable and Lines of

Credit108 Hedging Activities109 Aggregate Maturities110 Trust Units111 Preferred Units111 Guarantees112 Liquidity113 Deferred Income Taxes113 Distributions to Unitholders115 Selected Quarterly Consolidated

Information116 Significant Accounting Policies

and Estimates117 Future Changes in Accounting

Policies117 Controls and Procedures118 Risks and Uncertainties

MANAGEMENT’S DISCUSSION AND ANALYSIS

About This Management’s Discussion and Analysis

This Management’s Discussion and Analysis (MD&A) relates to the year ended December 31, 2013, which reflects the 12-monthperiod from January 1, 2013 to December 31, 2013 (2013). All references to “2012” refer to the 12-month period from January 1,2012 to December 31, 2012. “Fiscal 2011” refers to the 12-month period from January 1, 2011 to December 31, 2011. All referencesto “Q4 2013” refer to the three months ended December 31, 2013 and all references to “Q4 2012” refers to the three months endedDecember 31, 2012.

Unless the context indicates otherwise, all references to “RioCan” and the “Trust” in this MD&A refer to RioCan Real EstateInvestment Trust and its consolidated operations. All references to the Trust’s “units” refer collectively to RioCan common trustunits, Cumulative Rate Reset Preferred Trust Units, Series A (Preferred Units, Series A) and Cumulative Rate Reset PreferredTrust Units, Series C (Preferred Units, Series C). All references to the Trust’s “unitholders” refer collectively to holders of RioCancommon trust units, holders of Preferred Units, Series A and holders of Preferred Units, Series C. All references to “Units” or“Unitholders” refer to RioCan’s common trust units and holders thereof. All references to “Preferred Units” refer to the PreferredUnits, Series A and the Preferred Units, Series C. All references to “management” refer to the trustees and senior officers ofRioCan, unless otherwise stated.

This MD&A has been prepared with an effective date of February 12, 2014 and should be read in conjunction with the auditedannual consolidated financial statements and appended notes for the years ended December 31, 2013 and 2012 (2013 AnnualFinancial Statements). These documents, as well as additional information relating to RioCan, including RioCan’s annualinformation form (AIF), can be accessed at www.riocan.com and at www.sedar.com. Certain comparative amounts have beenreclassified to conform to the current year’s presentation.

The Trust’s Audit Committee has reviewed this document and, prior to its release, the RioCan Board of Trustees (Board ofTrustees) approved it, on the Audit Committee’s recommendation.

Forward-Looking Information

Certain information included in this MD&A contains forward-looking information within the meaning of applicable Canadian securitieslaws. This information includes, but is not limited to, statements made in “About RioCan”, “2013 Highlights”, “Outlook and Strategy”,“Asset Profile”, “Capital Strategy and Resources”, and other statements concerning RioCan’s objectives, its strategies to achieve thoseobjectives, as well as statements with respect to management’s beliefs, plans, estimates, and intentions, and similar statementsconcerning anticipated future events, results, circumstances, performance or expectations that are not historical facts. Forward-lookinginformation generally can be identified by the use of forward-looking terminology such as “outlook”, “objective”, “may”, “will”, “would”,“expect”, “intend”, “estimate”, “anticipate”, “believe”, “should”, “plan”, “continue”, or similar expressions suggesting future outcomes orevents. Such forward-looking information reflects management’s current beliefs and is based on information currently available tomanagement. All forward-looking information in this MD&A is qualified by these cautionary statements.

Forward-looking information is not a guarantee of future events or performance and, by its nature, is based on RioCan’s currentestimates and assumptions, which are subject to numerous risks and uncertainties, including those described under “Risks andUncertainties” in this MD&A which could cause actual events or results to differ materially from the forward-looking informationcontained in this MD&A. Those risks and uncertainties include, but are not limited to, those related to: liquidity and general marketconditions; tenant concentrations, occupancy levels and defaults; access to debt and equity capital; interest rates; joint ventures/partnerships; the relative illiquidity of real property; unexpected costs or liabilities related to acquisitions; construction; environmentalmatters; legal matters; reliance on key personnel and information systems; unitholder liability; income and indirect taxes; U.S.investment, property management and currency risk; and credit ratings.

RioCan currently qualifies as a real estate investment trust for tax purposes and intends to continue to qualify for future years. TheIncome Tax Act (Canada) contains provisions which potentially impose tax on publicly traded trusts which qualify as specified investmentflow-through entities (the SIFT Provisions). However, the SIFT Provisions do not impose tax on a publicly traded trust which qualifies as areal estate investment trust (REIT). Should RioCan no longer qualify as a REIT under the SIFT Provisions, certain statements contained inthis MD&A may need to be modified.

Other factors, such as general economic conditions, including interest rate and exchange rate fluctuations, may also have an effect onRioCan’s results of operations. Material factors or assumptions that were applied in drawing a conclusion or making an estimate set outin the forward-looking information may include, but are not limited to: a stable retail environment; relatively low and stable interest costs;a continuing trend toward land use intensification in high growth and urban markets; access to equity and debt capital markets to fund, atacceptable costs, future capital requirements and to enable the Trust to refinance debts as they mature; and the availability of investmentopportunities for growth in Canada and the U.S. For a description of additional risks that could cause actual results to materially differfrom management’s current expectations, see “Risks and Uncertainties” in this MD&A and “Risks and Uncertainties” in RioCan’s AIF.Although the forward-looking information contained in this MD&A is based upon what management believes are reasonable assumptions,there can be no assurance that actual results will be consistent with this forward-looking information. Certain statements included in thisMD&A may be considered “financial outlook” for purposes of applicable Canadian securities laws, and as such the financial outlook maynot be appropriate for purposes other than this MD&A. The forward-looking information contained in this MD&A is made as of the date ofthis MD&A, and should not be relied upon as representing RioCan’s views as of any date subsequent to the date of this MD&A.

Except as required by applicable law, management undertake no obligation to publicly update or revise any forward-looking information,whether as a result of new information, future events or otherwise.

15RIOCAN REAL ESTATE INVESTMENT TRUST ANNUAL REPORT 2013


ABOUT RIOCAN

RioCan is an unincorporated “closed-end” trust governed by the laws of the Province of Ontario and constituted pursuant to adeclaration of trust dated November 30, 1993, as most recently amended and restated on June 5, 2013 (the Declaration). The Unitsare listed on the Toronto Stock Exchange (TSX) under the symbol REI.UN. The Preferred Units, Series A and Preferred Units,Series C are listed on the TSX under the symbols REI.PR.A and REI.PR.C, respectively.

Business Overview

RioCan is Canada’s largest REIT, with a total enterprise value of approximately $13.8 billion as at December 31, 2013. RioCan ownsand manages Canada’s largest portfolio of shopping centres, with ownership interests in a portfolio of 340 retail properties inCanada and the United States (US) combined, including 16 under development, containing an aggregate of 81.7 million square feetas at December 31, 2013 (54.2 million square feet at RioCan’s interest).

RioCan’s Canadian portfolio, as of December 31, 2013, comprises 293 shopping centres, including grocery anchored, new formatretail, urban retail, mixed use, and non-grocery anchored centres. Of these properties, 197 are held through outright ownershipincluding three under development, while 96 centres including 13 under development are held through 22 joint venturearrangements. RioCan’s primary joint venture arrangements in Canada are with Allied Properties REIT (Allied), Canada PensionPlan Investment Board (CPPIB), Kimco Realty Corporation (Kimco), KingSett Capital (KingSett), Tanger Factory Outlet Centers, Inc.(Tanger), and Trinity Development Group (Trinity). RioCan’s long-standing joint venture partner, Kimco, represents the Trust’slargest joint venture partnership, comprising ownership of 46 income properties and total assets of over $2.5 billion, on a 100%basis. For a further details on the Trust’s joint venture relationships, see section “Joint Venture and Partnership Activities.”

RioCan’s US portfolio, as of December 31, 2013, is comprised of 47 shopping centres, predominantly grocery anchored and newformat retail centres. All but one of these assets are owned and operated 100% by RioCan and the one centre is held through ajoint venture arrangement.

The Trust’s purpose is to deliver to its Unitholders stable and reliable cash distributions that increase over the long term. TheTrust accomplishes this goal by following a strategy of focusing on owning, operating, and developing (including redeveloping andintensifying) retail and mixed use real estate. RioCan has grown its business by using prudent strategies, core competencies,conservative financial leverage, long-term strategic partnerships and by adapting to trends in commercial real estate.

RioCan’s core strategy is the ownership and management of retail properties consisting of all retail formats. Its investmentstrategy is to focus on stable, lower risk, retail properties in either stable or high growth urban markets in order to create stableand, over time, growing cash flows from the property portfolio.

Due to RioCan’s focus on major urban markets, RioCan has significant opportunities to redevelop and intensify urban properties.These activities can significantly increase cash flows and value and generate capital through transaction gains where additionaldensity is created and sold.

The specific retail assets in which RioCan currently invests are:

• New format retail centres

New format retail centres (or power centres) are large aggregations of dominant retailers grouped together at high traffic andeasily accessible locations. These unenclosed campus-style centres are generally anchored by supermarkets and/or juniordepartment stores and may include entertainment (movie theatres and restaurants) and fashion components.

• Neighbourhood convenience unenclosed centres

Neighbourhood convenience unenclosed centres are generally supermarket and/or junior department store anchored shoppingcentres, typically comprising between 60,000 to 250,000 square feet of leasable area. Other tenants generally include drugstores, restaurants, banks and other service providers.

• Enclosed shopping centres

Enclosed shopping centres are generally large retail complexes containing stores, restaurants and other facilities with interiorcommon areas with access to all retail units. Typically these centres have one or more anchor tenants and are located close toor in larger population centres.

• Urban retail properties

Urban retail properties are high-quality, innovative, multi-level format retail centres located in major urban markets. Thecentres are situated in high-density locations and may sometimes be part of a multi-use complex, thereby including office spaceand/or a residential component as part of the property.

• Outlet shopping centres

RioCan’s joint venture arrangement with Tanger introduced the outlet shopping centre concept to RioCan’s portfolio. Outletshopping centres provide an opportunity for customers to purchase directly from the manufacturer at substantial savings.



RioCan and Tanger plan to develop a number of outlet centres across Canada. The planned outlet centres are expected to besimilar in concept and design to those within Tanger’s existing US portfolio, which are characterized by a tenant mix of leadingdesigner and brand-name manufacturers having a typical size of approximately 300,000 to 350,000 square feet. The locations of theplanned centres are intended to be within close proximity to larger urban markets and tourist areas across Canada.

PRESENTATION OF FINANCIAL INFORMATION AND NON-GAAP MEASURES

Presentation of Financial Information

Unless otherwise specified herein, financial results, including related historical comparatives, contained in this MD&A are basedon RioCan’s 2013 Annual Financial Statements, which have been prepared by management in accordance with InternationalFinancial Reporting Standards (IFRS) as issued by the International Accounting Standards Board (IASB). The Canadian dollar isRioCan’s reporting currency for purposes of preparing the Trust’s 2013 Annual Financial Statements. Accordingly, all dollarreferences in this MD&A are in Canadian dollars, unless otherwise specified herein.

Non-GAAP Measures

Consistent with RioCan’s management framework, the Trust uses certain measures to assess its financial performance that arenot generally accepted accounting principles (GAAP) measured under IFRS. These measures do not have any standardizeddefinition prescribed by IFRS and are, therefore, unlikely to be comparable to similar measures presented by other reportingissuers. Non-GAAP measures should not be considered as alternatives to net earnings or comparable metrics determined inaccordance with IFRS as indicators of RioCan’s performance, liquidity, cash flows and profitability. RioCan’s management usesthese measures to aid in assessing the Trust’s underlying core performance and provides these additional measures so thatinvestors may do the same.

RioCan’s Interest

On January 1, 2013, RioCan changed its accounting policy for certain joint arrangements as required by IFRS 11, JointArrangements. As a result, effective January 1, 2013, the Trust no longer proportionately consolidates certain joint arrangementsand now accounts for these investments using the equity method of accounting. Where applicable, prior period financialinformation has been restated for comparative reporting purposes to reflect this change in accounting policy. An analysis ofRioCan’s consolidated financial position and results of operations plus its interests in the equity accounted investments may befound under “2013 Change in Accounting Policy” on page 5 of this MD&A. All references herein to “consolidated” refer to amountsas reported under IFRS. All references to “RioCan’s interest” refer to a non-GAAP financial measure presented representingRioCan’s proportionate share of the financial position and results of operations of its entire portfolio, taking into account thedifference in accounting for joint ventures using proportionate consolidation versus equity accounting. For a reconciliation of theTrust’s results of operations and statement of financial position, refer to pages 30 through 35 of this MD&A. Further, it should benoted that as of December 31, 2013, as a result of the dissolution of its primary US joint ventures (JV’s), the Trust only has tworemaining joint arrangements qualifying for equity accounting treatment.

Funds From Operations (FFO)

FFO is a non-GAAP financial measure of operating performance widely used by the real estate industry. Congruent with the RealProperty Association of Canada’s (REALpac) intended use of FFO, RioCan considers FFO to be a meaningful measure of operatingperformance as it adjusts for items included in IFRS net earnings that do not necessarily provide an accurate picture of the Trust’spast or recurring performance, such as unrealized changes in the fair value of real estate property, gains and losses on thedisposal of income properties, acquisition and disposition transaction costs and other non-cash items.

FFO should not be construed as an alternative to net earnings or cash flows provided by operating activities determined inaccordance with IFRS. RioCan’s method of calculating FFO is in accordance with REALpac’s recommendations but may differ fromother issuers’ methods and, accordingly, may not be comparable to FFO reported by other issuers.

A reconciliation of FFO to IFRS net earnings (excluding the impact of the adoption of IFRS 11, Joint Arrangements), can be foundunder “Results of Operations.”

Operating Funds From Operations (Operating FFO)

Operating FFO is a non-GAAP measure of operating performance representing the recurring cash flow generated through theownership and management of income properties. In addition to the adjusting items to arrive at FFO, Operating FFO also excludestransaction gains and losses (net of tax) as well as expenditures related to development activities that, in management’s view, formpart of the costs of its development projects. There is no standard industry-defined measure of Operating FFO. As such, RioCan’smethod of calculating Operating FFO will differ from other issuers’ methods and, accordingly, will not be comparable to suchamounts reported by other issuers. Please see “Results of Operations” for a calculation of Operating FFO.

Adjusted Funds From Operations (AFFO)

AFFO is a non-GAAP financial measure of operating performance widely used in the real estate industry. Management views AFFOas an alternative measure of cash generated from operations. AFFO is calculated by adjusting Operating FFO for straight-line rent



adjustments, non-cash compensation expenses, normalized costs for capital expenditures and productive capacity maintenanceexpenditures, which include leasing costs for maintaining shopping centres and current lease revenues.

Productive capacity maintenance can vary widely from quarter to quarter due to the lease expiry profile, vacancies and capitalexpenditure estimates due to the life cycle of the property resulting in volatility in AFFO. As well, the Trust reviews capitalmaintenance spending levels based on the performance of the portfolio. For these reasons, normalized capital maintenanceexpenditures have been estimated based on historical activity and management’s expectations on a normalized level of activity.Productive capacity maintenance expenditures are further discussed in “Capital Expenditures on Income Properties” indicating theTrust’s expectation of such annualized expenditures.

In addition, non-recurring costs that impact operating cash flow may be adjusted. There is no standard industry-defined measureof AFFO. As such, RioCan’s method of calculating AFFO will differ from other issuers’ methods and, accordingly, will not becomparable to such amounts reported by other issuers. Please see “Results of Operations” for a calculation of AFFO.

Adjusted Earnings Before Interest, Taxes, Depreciation and Amortization (Adjusted EBITDA)

Adjusted EBITDA is a non-GAAP measure that is used as an input in several of the Trust’s debt metrics, providing information withrespect to certain financial ratios that the Trust uses in measuring its debt profile and assessing the Trust’s ability to satisfy itsobligations, including servicing its debt. Adjusted EBITDA is used in place of IFRS net earnings because it excludes major non-cashitems, interest expense, acquisition related costs, and other items that management considers non-operating in nature. Pleasesee “Capital Strategy and Resources - Capital Structure” for a reconciliation of Adjusted EBITDA to IFRS net earnings and the debtmetrics that utilize Adjusted EBITDA.

Adjusted Unitholders’ Equity

Adjusted Unitholders’ Equity is a non-GAAP financial measure defined in RioCan’s Declaration as the amount of unitholders’ equityplus the amount of accumulated amortization of income properties recorded by the Trust, calculated in accordance with IFRS.Under IFRS, RioCan accounts for investment property at fair value and, therefore, this is no longer a required adjustment tounitholders’ equity.

Net Operating Income (NOI)

NOI is defined by RioCan as rental revenue from income properties less property operating costs. NOI is an important measure ofthe income generated from the income producing real estate portfolio and is used by the Trust in evaluating the performance ofthe portfolio, as well as a key input in determining the value of the portfolio. RioCan’s method of calculating NOI may differ fromother issuers’ methods and, accordingly, may not be comparable to NOI reported by other issuers.

Same Store NOI

Same-store NOI is a non-GAAP financial measure defined by RioCan to report the period-over-period performance of the sameasset base having consistent leasable area in both periods, which includes the impact of acquisitions and dispositions on a pro-ratabasis. To calculate same store NOI growth, NOI for the period is adjusted to remove the impact of straight-line rents, leasecancellation fees, foreign exchange and other non-recurring items.

Same Property NOI

Same property NOI is a non-GAAP financial measure that is consistent with the definition of same-store NOI above, except thatsame property includes the NOI impact of redevelopments.

2013 CHANGE IN ACCOUNTING POLICY

During the first quarter of 2013, RioCan changed its accounting policy for certain joint arrangements as required by the newstandard IFRS 11 “Joint Arrangements”. As a result, the Trust no longer proportionately consolidates certain joint arrangementsand now accounts for these investments using the equity method of accounting in its interim and annual consolidated financialstatements.

The equity method of accounting results in a new line item on the consolidated balance sheet entitled “Equity accountedinvestments and joint ventures” representing RioCan’s share of the assets less liabilities of the equity accounted joint ventures aswell as other investments accounted for using the equity method. As well, the Statement of Earnings presents a new line itementitled “Share of net earnings in equity accounted investments and joint ventures” representing RioCan’s share of the netearnings of the equity accounted investees and joint ventures. Where applicable, prior period financial information has beenrestated for comparative reporting purposes to reflect this change in accounting policy.

See section “Results of Operations” for a reconciliation of consolidated net earnings as reported under IFRS to consolidated netearnings reported at RioCan’s Interest for Q4 2013, Q4 2012, 2013 and 2012.



OPERATIONAL AND FINANCIAL HIGHLIGHTSOperational Information

(thousands of square feet, except other data)

As at and for the years ended December 31, 2013 2012 2011US Canada Total US Canada Total US Canada Total

Number of properties:Income properties 47 277 324 50 283 333 45 276 321Under development (i) – 16 16 – 11 11 – 10 10

Portfolio occupancy (committed) 96.8% 96.9% 96.9% 98.1% 97.2% 97.4% 98.1% 97.5% 97.6%Net leasable area (NLA) at 100%* 13,295 57,929 71,224 13,579 60,962 74,541 11,868 59,674 71,542NLA at RioCan’s interest:

Total portfolio 9,882 39,358 49,240 8,816 40,674 49,490 6,873 39,129 46,002Average in place rent $ 13.83 $ 16.63 $ 16.08 $ 14.02 $ 16.07 $ 15.70 $ 14.74 $ 15.21 $ 15.14Completed developments during

the period ended – 747 747 27 546 573 – 365 365Acquired during the period ended 1,478 1,558 3,036 1,740 280 2,020 2,875 1,923 4,798Dispositions during the period ended (479) (2,784) (3,263) – (245) (245) – – –

Development pipeline upon completion:Total project NLA (ii) – 10,500 10,500 – 9,948 9,948 – 8,915 8,915RioCan’s interest of project NLA (ii) – 4,910 4,910 – 4,910 4,910 – 4,632 4,632

Percentage of portfolio rental revenuederived from:

Six Canadian high growth markets(annualized) (iii) n/a 71.7% 71.7% n/a 67.5% 67.5% n/a 65.9% 65.9%

US market (annualized) 15.0% n/a 15.0% 13.6% n/a 13.6% 12.5% n/a 12.5%National and anchor tenants

(annualized) 85.7% 86.3% 86.2% 86.3% 86.1% 86.1% 86.8% 85.6% 85.7%Largest tenant (annualized) 10.1% 4.0% 3.7% 9.2% 4.9% 4.3% 13.8% 5.1% 4.7%

Percentage of portfolio NLA anchored orshadow anchored by grocery stores 60.1% 70.0% 69.8% 58.0% 70.5% 68.8% 60.6% 70.5% 69.3%

Number of employees (excludingseasonal) (iv) 701 624 576

* Includes retail owned anchors.(i) Includes active development projects.(ii) Includes active and non-active projects.(iii) The six Canadian high growth markets are: Calgary, AB; Edmonton, AB; Montreal, QC; Ottawa, ON (includes Gatineau region); Toronto, ON;

and Vancouver, BC.(iv) Number of employees at December 31, 2013 includes 30 US based employees for RioCan’s US management platform.



Financial Information (i)

(millions of dollars, except where otherwise noted)As at and for the year ended December 31, 2013 2012 2011**

Total revenue – Consolidated (xix) $ 1,152 $ 1,073 $ 988Total revenue – RioCan’s interest (ii) $ 1,195 $ 1,114 $ n/a*

Change in fair value of investment properties – Consolidated $ 221 $ 868 $ 533Change in fair value of investment properties – RioCan’s interest (iii) $ 229 $ 905 $ n/a*

Net earnings before taxes and fair value adjustment $ 492 $ 491 $ 352Net earnings attributable to unitholders $ 709 $ 1,344 $ 873Net earnings per Unit attributable to common Unitholders – basic $ 2.30 $ 4.59 $ 3.26Net earnings per Unit attributable to common Unitholders – diluted $ 2.29 $ 4.57 $ 3.25Adjusted EBITDA (iv) $ 748 $ 702 $ 625FFO (v) $ 471 $ 427 $ 371FFO per Unit $ 1.56 $ 1.47 $ 1.40Operating FFO (v) $ 492 $ 440 $ 380Operating FFO per Unit (v) $ 1.63 $ 1.52 $ 1.43AFFO (xx) $ 447 $ 402 $ 342AFFO per Unit (xx) $ 1.48 $ 1.39 $ 1.29Distributions as a percentage of AFFO 95.3% 99.3% 107.0%Weighted average common Units outstanding – basic (in thousands) 302,324 289,950 265,583Distributions to common Unitholders $ 426 $ 401 $ 367Distributions to common Unitholders per Unit $ 1.41 $ 1.38 $ 1.38Distributions per common Unit (annualized) (vi) $ 1.41 $ 1.38 $ 1.38Distributions to common Unitholders net of distribution reinvestment plan $ 316 $ 293 $ 285Distributions to common Unitholders net of distribution reinvestment plan per Unit

(last twelve months) $ 1.04 $ 1.01 $ 1.07Common Unit issue proceeds under distribution reinvestment plan $ 110 $ 108 $ 82Distribution reinvestment plan (DRIP) participation rate 25.8% 26.9% 22.3%

(millions of dollars, except where otherwise noted)As at

December 31,2013

December 31,2012

December 31,2011

Total enterprise value (vii) $ 13,794 $ 14,274 $ 12,437

Total assets – Consolidated $ 13,530 $ 12,619 $ 10,484Total assets – RioCan’s interest (viii) $ 13,554 $ 12,888 $ n/a*

Debt*** – Consolidated $ 5,959 $ 5,451 $ 4,781Debt*** – RioCan’s interest (ix) $ 5,988 $ 5,717 $ n/a*

Debt to total assets (net of cash) – Consolidated (x) 43.9% 42.4% 45.4%Debt to total assets (net of cash) – RioCan’s interest (x) 44.0% 43.6% n/a*Debt to total enterprise value – Consolidated (xi) 43.2% 38.2% 37.7%Debt to total enterprise value – RioCan’s interest (xi) 43.4% 40.1% n/a*

Debt service coverage ratio – RioCan’s interest (xiii) 2.10 1.98 1.87Interest coverage ratio – RioCan’s interest (xii) 2.83 2.69 n/a*Fixed charge coverage ratio – RioCan’s interest (xiv) 1.06 1.04 n/a*Net consolidated debt to Adjusted EBITDA (xv) 7.52 7.00 7.26Operating debt to adjusted operating EBITDA – RioCan’s interest (xvi) 7.24 7.09 7.00

Total unitholders’ equity $ 7,261 $ 6,847 $ 5,363Common Units outstanding (in thousands) 304,075 300,099 279,113Closing market price per common Unit $ 24.77 $ 27.56 $ 26.43Common Units – market capitalization (xvii) $ 7,532 $ 8,271 $ 7,377Preferred Units, Series A outstanding (in thousands) 5,000 5,000 5,000Closing market price per Preferred Unit, Series A $ 24.90 $ 25.94 $ 25.81Preferred Unit, Series C outstanding (in thousands) 5,980 5,980 5,980Closing market price per Preferred Unit, Series C $ 25.00 $ 26.15 $ 25.15Preferred Units – market capitalization (xviii) $ 274 $ 286 $ 279Please note: RioCan’s method of calculating non-GAAP measures may differ from other issuers’ methods and accordingly may not be comparable to suchamounts reported by other issuers.(i) During the first quarter of 2013, RioCan changed its accounting policy for certain joint arrangements as required by the new standard IFRS 11

“Joint Arrangements”. As a result, the Trust no longer proportionately consolidates certain joint arrangements and now accounts for theseinvestments using the equity method of accounting. Where applicable, prior period financial information has been restated to reflect thischange in accounting policy. An analysis of RioCan’s consolidated financial position and results of operations plus its interests in the equityaccounted for investments’ financial position and results of operations may be found under “2013 Change in Accounting Policy”.

(ii) A non-GAAP measurement. Calculated as the sum of rental revenue, fees and other income and interest income, all at RioCan’s interest.



(iii) A non-GAAP measurement. Calculated as consolidated change in fair value of investment properties plus RioCan’s share of change in fairvalue of investment properties for its equity accounted for joint arrangements less non-controlling interests’ share of change in fair value ofinvestment properties.

(iv) A non-GAAP measurement. Adjusted EBITDA is defined as net earnings at RioCan’s interest before changes in fair value of incomeproperties, net interest expense and income taxes as well as other one-time adjustments. A reconciliation of Adjusted EBITDA to net earningscan be found under “Capital Strategy and Resources”.

(v) A non-GAAP measurement. A reconciliation to net earnings can be found under “Results of Operations”.(vi) Annualized amount is based on the latest quarter’s distribution.(vii) A non-GAAP measurement. Calculated by the Trust as debt at RioCan’s interest plus common Unit market capitalization plus total Preferred

Unit market capitalization.(viii) A non-GAAP measurement. Calculated as consolidated assets of the Trust and adding back RioCan’s share of liabilities for its equity

accounted for joint arrangements and less non-controlling interests’ share of assets.(ix) A non-GAAP measurement. Calculated as consolidated mortgages and debentures payable of the Trust plus RioCan’s share of mortgages

and debentures payable for its equity accounted for joint ventures less non-controlling interests’ share of mortgages and debentures payable.(x) A non-GAAP measurement. Calculated as debt net of cash divided by total assets net of cash.(xi) A non-GAAP measurement. Calculated by the Trust as debt divided by total enterprise value.(xii) A non-GAAP measurement. Interest coverage is calculated on a rolling twelve month basis and is defined as Adjusted EBITDA divided by total

interest expense (including interest that has been capitalized), prepared at RioCan’s interest.(xiii) A non-GAAP measurement. Debt service coverage is calculated on a rolling twelve month basis and is defined as Adjusted EBITDA divided by

total interest expense (including interest that has been capitalized) and scheduled mortgage principal amortization.(xiv) A non-GAAP measurement. Fixed charge coverage ratio is calculated on a rolling twelve month basis and is defined as Adjusted EBITDA

divided by total interest expense (including interest that has been capitalized) and distributions to common and preferred unitholders,prepared at RioCan’s interest.

(xv) A non-GAAP measurement. Net consolidated debt to Adjusted EBITDA is defined as: the average consolidated debt (net of cash) for the perioddivided by Adjusted EBITDA.

(xvi) A non-GAAP measurement. Net operating debt to Operating EBITDA is defined as the average debt outstanding (net of cash) for the periodless debt related to property under development (both at RioCan’s interest) divided by Operating EBITDA (as found under “Capital Strategyand Resources”).

(xvii) A non-GAAP measurement. Calculated by the Trust as closing market price of the common Units trading on the Toronto Stock Exchange onthe respective period end dates, multiplied by the number of common Units outstanding at such date.

(xviii) A non-GAAP measurement. Calculated by the Trust as the aggregate of the closing market price of each series of preferred units trading onthe Toronto Stock Exchange on the respective period end dates, multiplied by the number of Preferred Units of such series outstanding atsuch date.

(xix) Calculated as the sum of rental revenue, fees and other income and interest income (consolidated).(xx) A non-GAAP measurement for which a reconciliation to AFFO from FFO can be found in RioCan’s discussion under “AFFO”.n/a – not applicable* Calculation at RioCan’s interest was not performed for the year ended December 31, 2011** December 31, 2011 numbers were not restated for “2013 Change in Accounting Policy,” except for certain consolidated balance sheet

amounts and related debt metrics which have been reclassified for comparative purposes.*** Debt is defined as the sum of mortgages payable, lines of credit, and debentures payable.



Top 50 Tenants – Total Portfolio

As at December 31, 2013, RioCan’s 50 largest tenants in Canada and the US, as measured by annualized gross rental revenue havethe following profile:

Rank Tenant name

Annualizedrental

revenueNumber

of locationsNLA

(in thousands)Percentage of

total NLA

Weightedaverage

remaininglease term

(years)*

1 Walmart 3.7% 32 3,915 8.0% 12.82 Canadian Tire Corporation (i) 3.4% 91 1,984 4.0% 8.63 Cineplex/Galaxy Cinemas 3.2% 30 1,388 2.8% 10.24 Metro/Super C/Loeb/Food Basics 3.2% 57 2,100 4.3% 7.15 Winners/HomeSense/ Marshalls 2.6% 72 1,612 3.3% 7.16 Loblaws/No Frills/Fortinos/Zehrs/Maxi (ii) 2.5% 32 1,438 2.9% 7.47 Target Corporation 1.8% 25 2,076 4.2% 8.48 Staples/Business Depot 1.7% 51 1,009 2.0% 5.99 Shoppers Drug Mart 1.6% 51 554 1.1% 8.7

10 Cara/Prime Restaurants 1.6% 113 476 1.0% 7.211 Sobeys Inc. 1.6% 37 971 2.0% 8.112 Future Shop/Best Buy 1.5% 33 783 1.6% 5.813 Giant Food Stores/ Stop & Shop (Royal Ahold) 1.5% 24 1,113 2.3% 12.114 Reitmans/Penningtons/Smart Set/Addition-Elle/Thyme

Maternity 1.2% 110 457 0.9% 4.515 Dollarama 1.2% 78 647 1.3% 6.916 PetSmart 1.2% 38 617 1.3% 5.017 TD Bank 0.9% 55 243 0.5% 6.218 Michael’s 0.9% 32 556 1.1% 5.419 Bluenotes/Stitches/Suzy Shier/Urban Planet (YM Inc.) 0.8% 59 353 0.7% 6.120 Chapters/Indigo 0.8% 25 295 0.6% 3.921 Lowes 0.7% 8 1,138 2.3% 25.822 The Bay/Home Outfitters 0.7% 11 532 1.1% 6.723 Sears 0.6% 16 511 1.0% 5.724 Ardene 0.6% 56 229 0.5% 7.625 Goodlife Fitness 0.6% 18 364 0.7% 12.726 Liquor Control Board of Ontario (LCBO) 0.5% 22 182 0.4% 9.027 Pharma Plus 0.5% 21 136 0.3% 9.828 Bank Of Montreal 0.5% 30 113 0.2% 7.029 Leon’s/The Brick 0.5% 13 300 0.6% 7.530 Rona/Revy/Reno 0.5% 5 318 0.6% 11.731 Old Navy/The Gap/Banana Republic 0.5% 20 211 0.4% 5.632 Value Village 0.5% 15 295 0.6% 6.533 Bed Bath & Beyond 0.4% 16 346 0.7% 7.534 Bell/The Source 0.4% 83 117 0.2% 5.635 Bank Of Nova Scotia 0.4% 30 111 0.2% 5.236 CIBC 0.4% 30 108 0.2% 5.137 LA Fitness 0.4% 10 260 0.5% 13.938 Laura 0.4% 23 114 0.2% 3.639 London Drugs 0.4% 11 198 0.4% 4.640 Benix & Co. 0.4% 30 126 0.3% 4.041 Golf Town 0.3% 12 151 0.3% 4.442 Subway 0.3% 87 96 0.2% 4.943 The Shoe Company 0.3% 25 131 0.3% 4.344 MTY Food Group Inc. 0.3% 76 87 0.2% 6.345 BouClair 0.3% 20 152 0.3% 6.446 TDL Group 0.3% 44 106 0.2% 6.547 Royal Bank of Canada 0.3% 23 86 0.2% 4.648 Golds Gym 0.3% 5 251 0.5% 14.749 Ross Dress 0.3% 9 266 0.5% 5.250 Office Depot/Max 0.3% 12 216 0.4% 5.3

49.8% 1,826 29,838 60.4% 8.7

* – Weighted average remaining lease term based on annualized gross rental revenue(i) Canadian Tire Corporation includes Canadian Tire/PartSource/Mark’s Work Wearhouse/Sport Mart/Sport Chek/Sports Experts/National

Sports/Atmosphere.(ii) Loblaws has entered into an agreement to purchase Shoppers Drug Mart which is scheduled to close in the first quarter of 2014. Upon

closing, Loblaws will be RioCan’s largest tenant by gross revenue.



Canada 79.9%

US 20.1%

85.0% Canada

15.0% US

NLA* of the total portfolioat December 31, 2013

Annualized rental revenueof the total portfolioat December 31, 2013

* Net leasable area

Canadian Portfolio

As at December 31, 2013, the geographical diversification of RioCan’s Canadian property portfolio is as follows:

Ontario 64.0%

Quebec 14.4%

Western Canada 18.4%

Eastern Canada 3.2%

66.8% Ontario

11.8% Quebec

19.5% Western Canada

1.9% Eastern Canada

NLA of the Canadian portfolioat December 31, 2013

Annualized rental revenue of theCanadian portfolio by geographicarea at December 31, 2013

As at December 31, 2013, the diversification of RioCan’s Canadian property portfolio by property type is as follows:

NLA of the Canadian portfolioby property type at

December 31, 2013

Non-Grocery Anchored Centre 5.2%

Urban Retail 4.0%

Office 4.6%

Grocery Anchored Centre 21.8%

Enclosed Shopping Centre 17.7%

New Format Retail 46.7%

18.1% Enclosed Shopping Centre

19.6% Grocery Anchored Centre

43.9% New Format Retail

8.6% Urban Retail

4.8% Non-Grocery Anchored Centre

5.0% Office

Annualized rental revenue of theCanadian portfolio by property typeat December 31, 2013

The committed occupancy rate of the Canadian portfolio has remained relatively stable over the most recent eight fiscal quarters:

95.0%

100.0%

Q1 2012 Q2 2012 Q3 2012 Q1 2013 Q4 2013Q3 2013Q2 2013Q4 2012

96.7%97.3% 97.2% 97.2% 97.0%

96.6% 96.9% 96.9%



Top Ten Tenants – Canadian Portfolio

As at December 31, 2013, RioCan’s ten largest tenants in Canada, as measured by annualized gross rental revenue, have thefollowing profile:

Rank Tenant name

Annualizedrental

revenueNumber of

locationsNLA


total NLA

Weightedaverage

remaininglease term

(years)*

1 Canadian Tire Corporation (i) 4.0% 91 1,984 5.0% 8.62 Walmart 3.9% 27 3,035 7.7% 12.43 Cineplex/Galaxy Cinemas 3.8% 30 1,388 3.5% 10.24 Metro/Super C/Loeb/Food Basics 3.7% 57 2,100 5.3% 7.15 Loblaws/No Frills/Fortinos/Zehrs/Maxi (ii) 3.0% 32 1,438 3.7% 7.46 Winners/HomeSense/Marshalls 2.8% 66 1,451 3.7% 7.17 Target Corporation 2.1% 25 2,076 5.3% 8.48 Shoppers Drug Mart (ii) 1.9% 51 554 1.4% 8.79 Cara/Prime Restaurants 1.9% 113 476 1.2% 7.2

10 Sobeys Inc. 1.8% 37 971 2.5% 8.128.9% 529 15,473 39.3% 8.7

* – Weighted average remaining lease term based on gross annualized rental revenue(i) Canadian Tire Corporation includes Canadian Tire/PartSource/Mark’s Work Wearhouse/Sport Mart/Sport Chek/Sports Experts/National

Sports/Atmosphere.(ii) Loblaws has entered into an agreement to purchase Shoppers Drug Mart which is scheduled to close in the first quarter of 2014. Upon

closing, Loblaws will be RioCan’s largest tenant by gross revenue.

US Portfolio

As at December 31, 2013, the geographical diversification of RioCan’s US property portfolio is as follows:

NLA of the US portfolioat December 31, 2013

Annualized rental revenue of theUS portfolio by Stateat December 31, 2013

Texas 52.3%

Pennsylvania 22.0%

New York 1.6%

West Virginia 2.8%

Connecticut 1.7%

Maryland 1.7%Massachusetts 3.4%

New Jersey 9.4%New Hampshire 1.7%

Virginia 2.8%

Rhode Island 0.6%

2.6% West Virginia

0.7% Rhode Island2.5% New York

54.4% Texas

21.1% Pennsylvania

2.2% Connecticut

1.8% Maryland6.7% New Jersey2.2% New Hampshire

2.6% Virginia

3.2% Massachusetts

The historical occupancy rate of the US portfolio for the most recent eight fiscal quarters is as follows:

95.0%

100.0%

Q1 2012 Q2 2012 Q3 2012 Q1 2013 Q4 2013Q3 2013Q2 2013Q4 2012

97.5% 97.8% 97.8% 98.1%97.4% 97.3% 97.4%

96.8%



Top Ten Tenants – US Portfolio

As at December 31, 2013, RioCan’s ten largest tenants in the US, as measured by annualized gross rental revenue, have thefollowing profile:

Rank Tenant name

Annualizedrental

revenueNumber of

locationsNLA


total NLA

Weightedaverage

remaininglease term

(years)*

1 Giant Food Stores/Stop & Shop (Royal Ahold) 10.1% 22 1,113 11.3% 12.12 Best Buy 3.8% 11 359 3.6% 6.63 PetSmart 2.8% 13 281 2.8% 4.94 Walmart 2.6% 5 880 8.9% 15.05 Michael’s 2.6% 14 291 2.9% 5.46 Ross Dress 2.0% 9 266 2.7% 5.27 Office Depot/Max 2.0% 11 215 2.2% 5.38 Bed Bath & Beyond 1.7% 9 237 2.4% 6.49 Lowes 1.5% 3 476 4.8% 13.8

10 Kohls 1.3% 4 338 3.4% 11.830.4% 101 4,456 45.0% 9.3

* – Weighted average remaining lease term based on annualized gross rental revenue



2013 FINANCIAL HIGHLIGHTS(millions of dollars, except per unit amounts) Three months ended December 31, For the year ended December 31,

2013 2012Increase/

(Decrease) 2013 2012Increase/

(Decrease)

Net earnings attributable to common and preferredunitholders $ 265 $ 468 (43%) $ 709 $ 1,344 (47%)

Net earnings per Unit attributable to commonUnitholders – basic $ 0.86 $ 1.55 (45%) $ 2.30 $ 4.59 (50%)

Operating FFO $ 124 $ 116 7% $ 492 $ 440 12%Operating FFO per Unit $ 0.41 $ 0.39 5% $ 1.63 $ 1.52 7%

Net earnings attributable to unitholders

Q4 2013

Consolidated net earnings attributable to common and preferred unitholders for the fourth quarter of 2013 was $265 millioncompared to $468 million for the same period in 2012, a decrease of $203 million. This decrease was primarily due to thefollowing:

• lower fair value gains of $189 million. On a proportionate consolidation basis, fair value gains would be lower by $212 million;

• transaction gains are lower by $7 million largely due to a distribution resulting from the sale of a Toronto development propertyin the Whitecastle New Urban Fund (WCNUF I) in which RioCan has an interest, as well as the sale of certain marketablesecurities held as a portfolio investment;

• lower share of earnings on investments in equity accounted joint ventures of $26 million. On a proportionate consolidation basis,earnings from joint ventures would be favourable by $2 million; less

• lower transaction costs of $2 million, including a $4 million realized foreign currency gain on the disposition of certain USequity-accounted investments;

• increased operating income of $18 million due to the following: increased income as a result of acquisitions, net of dispositions,Canadian and US same property growth and the completion of greenfield developments. On a proportionate consolidation basis,operating income would be favourable by $9 million.

Consolidated net fair value gains on investment property for the fourth quarter of 2013 were $136 million, as compared to$325 million for the same period in 2012. Capitalization rates for the portfolio for the fourth quarter of 2013 remained flat onaverage, as compared to the third quarter of 2013.

Excluding the impact of fair value gains on investment properties, net earnings for the fourth quarter of 2013 were $130 million ascompared to $147 million during the same period in 2012.

2013

Consolidated net earnings attributable to common and preferred unitholders for the year ended December 31, 2013 was$709 million compared to $1,344 million for the same period in 2012, a decrease of $635 million. This decrease was primarily dueto:

• reduced fair value gains of $647 million. On a proportionate consolidation basis, fair value gains would be unfavourable by $670million;

• reduced share of earnings of investments in equity accounted joint ventures of $37 million. On a proportionate consolidationbasis, earnings from joint ventures would be unfavourable by $8 million;

• transaction gains are lower by $8 million largely due to a Q4 2012 distribution resulting from the sale of a Toronto developmentproperty in the WCNUF I in which RioCan has an interest as well as the sale of certain marketable securities held as a portfolioinvestment;

• increased fees and other income of $2 million largely due to overall increases in development activity with joint venture partnersyear over year;

• higher disposition related transaction costs of $3 million, including a $4 million realized foreign currency gain on the dispositionof certain US equity-accounted investments;

• higher general and administrative costs of $5 million mainly due to higher unit-based compensation, a favourable sales taxrecovery in 2012 that did not recur in the current period, and higher costs related to the US platform that was established duringthe year;



• early debt redemption costs of $12 million in 2013 related to the repayment of RioCan’s Series M senior unsecured debentures;partially offset by

• increased operating income of $53 million from rental properties as a result of acquisitions, net of dispositions, Canadian andUS same property growth, the completion of greenfield developments and lower lease cancelation fees. Excluding the impact ofthe change in accounting treatment for certain US properties acquired in full, operating income would be favourable by$44 million;

• reduced share of earnings attributable to non-controlling interests of $11 million primarily resulting from the 2012 minorityinterest in its joint venture with Cedar for nine months prior to RioCan’s buyout of Cedar’s stake; and

• prior year impairment charges of $12 million related to RioCan’s Cedar investment.

Consolidated net fair value gains on investment property for the year ended December 31, 2013 were $221 million, as compared to$868 million for the same period in 2012. Capitalization rates for the portfolio for 2013 decreased by 10 basis points, on average, ascompared to the year ended 2012.

Excluding the impact of fair value gains on investment properties, net earnings for the year ended December 31, 2013 were $493million as compared to $491 million during the same period in 2012.

Operating FFO

Q4 2013Operating FFO at RioCan’s interest for the fourth quarter of 2013 was $124 million or $0.41 per Unit compared to $116 million or$0.39 per Unit for the fourth quarter in 2012, representing an increase of $8 million or 7%. On a per Unit basis, Operating FFOincreased by $0.02 per Unit or 5%. Please see the “Results of Operations – RioCan’s Interest” section of this MD&A.

The $8 million increase in Operating FFO at RioCan’s interest for the fourth quarter of 2013 as compared to the same period in2012 is primarily due to the following:

• an increase in NOI from rental properties of $10 million, which includes the impact of the following items: increases in rentalincome as a result of acquisitions, net of dispositions, same store growth of 2.7% for Canada and 1.7% for the US portfolio andthe completion of greenfield developments; partially offset by

• higher general and administrative costs of $1 million primarily due to a favourable GST tax recovery in 2012.

2013Operating FFO at RioCan’s interest for the year ended December 31, 2013 was $ 492 million ($ 1.63 per Unit) compared to $440million ($1.52 per Unit) for the same period in 2012, an increase of $52 million or 12%. On a per Unit basis, Operating FFOincreased by $0.11 per Unit or 7%. Please see the “Results of Operations – at RioCan’s Interest” section of this MD&A.

The $52 million increase in Operating FFO at RioCan’s interest for the year ended December 31, 2013 as compared to the sameperiod in 2012 is primarily due to:

• an increase in NOI from rental properties of $54 million which includes the impact of the following items: increases in rentalincome as a result of acquisitions, net of dispositions, same store growth of 1.7% for Canada and 1.2% for the US portfolio andthe completion of greenfield developments; partly offset by lower lease cancelation fees;

• $3 million of increased other revenue due to higher fees as a result of increased development activity with joint venturepartners; partially offset by

• higher general and administrative costs of $5 million mainly due to higher unit-based compensation, a favourable sales taxrecovery in 2012, and higher costs related to the US platform.

2013 OPERATING HIGHLIGHTSQ4 2013RioCan has remained focused on its core portfolio and continues to execute its growth strategy through acquisitions anddevelopment, along with organic growth. In addition, RioCan is selectively paring its portfolio in order to increase its focus onmajor urban markets.

Occupancy

• Committed occupancy of 96.9% at December 31, 2013, compared to 97.0% at September 30, 2013 and 97.4% at December 31,2012.

• Economic occupancy (occupied NLA for which tenants are paying rent) of 95.8% at December 31, 2013, compared to 95.5% atSeptember 30, 2013 and 95.9% at December 31, 2012. The annualized rental impact once these tenants take occupancy andcommence paying rent is approximately $14 million.



Leasing

Rental rate increases on lease renewals continue to be positive, which is expected to contribute to future rental revenue growth.Operationally, RioCan continues to experience strong demand for space by tenants, especially in the major urban markets.RioCan’s concentration in Canada’s six major markets decreased to 71.7% at December 31, 2013 from 72.2% at September 30,2013, primarily due to the sale of Quartier DIX30 in Quebec. RioCan’s concentration in Canada’s six major markets has increasedfrom 67.5% at December 31, 2012 to 71.7% at December 31, 2013.

During the quarter, RioCan renewed 1,408,000 square feet in the Canadian portfolio at an average rent increase of $1.37 persquare foot, representing an increase of 8.8% and a renewal retention rate of 97.0%.

Acquisitions and Dispositions Completed During the Quarter

Acquisition and development activity during the fourth quarter led to an overall increase in owned NLA of 32,665 square feet to49.2 million square feet, as compared to September 30, 2013. Compared to December 31, 2012, NLA has decreased by249,547 square feet or 0.5%. The following is a summary of acquisitions and dispositions during the quarter, which includes theimpact of the Trust’s US RPAI and Dunhill joint venture dissolutions (see section “Asset Profile” for further details on the Trust’sUS platform):

• Acquired interests in 16 income properties totaling $274 million and 1.3 million of additional NLA.• Includes two properties in Canada and 14 properties in the US for $60 million and US$207 million, respectively.• Weighted average capitalization rate of acquisitions during the quarter was 6.5%.• No acquisitions of development properties during the quarter.• Dispositions of 10 income properties totaling NLA of approximately 1.3 million square feet.• Includes five properties in Canada and five properties in the US for proceeds totaling $226 million (weighted average

capitalization rate of 5.5%) and US$103 million (weighted average capitalization rate of 6.8%), respectively.

US Platform Activity

During the fourth quarter of 2013, RioCan successfully completed the dissolution of its joint venture arrangements with its Texaspartners, RPAI, Dunhill and Sterling. As announced on October 10, 2013, RioCan has also completed the establishment of its ownmanagement platform in Dallas, Texas which is now fully staffed and operational to manage its Texas portfolio. There is oneremaining property (Montgomery Plaza) which is held together with, and managed by, Kimco.

In total, RioCan acquired its partners’ interests in 14 properties from RPAI and Dunhill at an aggregate purchase price ofUS$180 million at a weighted average capitalization rate of 6.7%. Separately, RioCan acquired the remaining 31.7% interest inLas Palmas Marketplace from Kimco.

RioCan also dissolved its joint venture arrangement with Sterling by purchasing Sterling’s managing interest in two properties inTexas, for a total purchase price of US$6 million.

2013Acquisitions and Dispositions Completed During the Year

• Acquired interests in 32 income properties and four development properties totalling $849 million and $56 million, respectively.These acquisitions resulted in an additional 3.0 million of NLA.

• Dispositions of 18 income properties (including RPAI dissolution) totaling NLA of approximately 3.3 million square feet.• Includes 13 properties in Canada and five properties in the US for proceeds totaling $616 million (weighted average

capitalization rate of 5.9%) and US$103 million (weighted average capitalization rate of 6.8%), respectively.

US Platform Activity

Included in the above acquisitions are six properties related to the dissolution of the Trust’s joint venture agreement with Dunhill,for a total purchase price of US$83 million, and eight properties related to the dissolution of the Trust’s joint venture agreementwith RPAI, for a total purchase price US$97 million.

Management duties for the 21 properties previously held by the Trust in the Cedar joint venture were assumed by the Trust onFebruary 1, 2013. On February 7, 2013, RioCan sold its 9.4 million shares of Cedar for proceeds of US$48 million.

Acquisitions and Dispositions Completed Subsequent to December 31, 2013

• Acquired a remaining 40% interest one income property for $11 million (capitalization rate of 5.5%), together with mortgagefinancing of $8 million bearing Banker’s Acceptance plus 1.85%, maturing in September 2015.

• Acquired one development property in Canada at for an expected purchase price of $58 million upon completion of developmentby the vendor.

• Sold two income properties with aggregate proceeds of $48 million.



Acquisitions and Dispositions Under Contract

Firm

• One income property in the US that would represent an acquisition of US$9 million, equating to a capitalization rate of 8.0%. Thistransaction is expected to close during the first quarter of 2014.

• Two development properties in Canada that would represent acquisitions totaling $20 million. These transactions are expectedto close in the second quarter of 2014.

• One income property disposition that would represent proceeds of $5 million.

Conditional

• One income property in Canada that would represent an acquisition of $3 million.

• Development property acquisitions in Canada that would represent acquisitions totaling $10 million.

• The above transactions are in various stages of due diligence and while efforts will be made to complete these transactions, noassurance can be given.

RioCan is also in the process of marketing for sale three land parcels with a total fair value as at December 31, 2013 calculated inaccordance with IFRS of approximately $7 million.

RioCan is currently in discussions with Trinity to acquire their 25% interest in each of Stockyards, Toronto and McCall Landing,Calgary, as well as Trinity’s 10% interest in East Hills, Calgary. If completed, these transactions are targeted to close during Q12014. It is also the Trust’s intention, pending certain approvals, to take over as development manager for each of thesedevelopment sites over the remainder of 2014.

CAPITAL MANAGEMENT

RioCan ended the year with a cash position of $39 million with available undrawn operating facilities of $426 million. Net of cash,the Trust’s debt to total assets (at RioCan’s interest) at December 31, 2013 is 44.0% (December 31, 2012 – 43.6%).

Debt Financing

Debentures

• On February 27, 2013, the Trust issued $250 million of Series S senior unsecured debentures, which mature on March 5, 2018and carry a coupon rate of 2.87%.

• On April 18, 2013, the Trust issued $200 million of Series T senior unsecured debentures, which mature on April 18, 2023 andcarry a coupon rate of 3.725%. The net proceeds were mainly used to redeem the Trust’s $150 million of Series M seniorunsecured debentures, with an original maturity date of March 31, 2015 and carrying a coupon rate of 5.65%. The totalredemption price, including accrued interest, was $162 million.

• On January 23, 2014, the Trust issued $150 million of Series U senior unsecured debentures, which mature on June 1, 2020and carry a coupon rate of 3.62%.

Secured Operating Lines

As of the date hereof, RioCan negotiated the terms of three of its operating lines and added a fourth operating line as follows:

OperatingLine as of

Sept. 30, 2013(millions) Spread* Maturity

OperatingLine as of

Feb. 12, 2014(millions)

RevisedSpread*

RevisedMaturity

$125 BA’s/LIBOR+150 bps

Dec. 2013 $185 BA’s/LIBOR+125 bps

Dec. 2016


Nov. 2014 $250 BA’s/LIBOR+125 bps

Nov. 2016


June 2014 $130 BA’s/LIBOR+125 bps

June 2017

$0 – – $75 BA’s/LIBOR+125 bps

June 2017

Total $425 Total $640

* Lines are available in Canadian or US Dollars. Canadian draws are priced off of BA’s and US draws are priced off of LIBOR.



The increased amounts, reduced costs and the extended maturity dates for RioCan’s lines will provide an efficient and flexiblesource of liquidity for the Trust.

As at December 31, 2013, the Trust’s debt strategy has resulted in approximately 18.7% of its income properties beingunencumbered by debt on a NLA basis, providing RioCan with access to a pool of assets for obtaining additional secured debt. Thefair value of the unencumbered income property assets as of December 31, 2013 is estimated at approximately $1.8 billion,comprising 86 properties, or 14.5% of the fair value of the Trust’s income properties as compared to 81 properties with a fair valueof $1.4 billion as at December 31, 2012. In addition to the unencumbered income property assets, the Trust has 17 unencumberedproperties under development with a fair value of $261 million as at December 31, 2013, bringing the total fair value ofunencumbered assets to approximately $2.1 billion.

Equity Capital

On July 25, 2013, the TSX approved the RioCan’s notice of intention to make an NCIB commencing August 3, 2013, pursuant towhich RioCan purchased for cancellation 917,700 common trust Units during the third quarter at an aggregate cost of$22.1 million, representing an average price per Unit of $24.03.

RioCan’s DRIP ratio is defined as the ratio of Units which elect to participate in the DRIP. The Trust raised additional capital of$28 million and reported a DRIP ratio of 25.6% for the quarter. For the year ended December 31, 2013, RioCan raised additionalcapital of $110 million and reported a DRIP ratio of 25.8% (2012-26.9%).

OUTLOOK & STRATEGY

RioCan’s strong operating performance and access to capital coupled with its measured US initiative has facilitated its continuedgrowth and positioning as a leading North American REIT with a retail focus. RioCan’s prudent management of its balance sheethas provided it with the ability to take advantage of the growth that accompanies a recovering economic environment throughsame store rental income growth, acquisitions, greenfield development, redevelopments and asset intensification. RioCanconducts these activities either on its own or through strategic joint venture relationships. RioCan will continue to seekacquisitions in selected markets, with a focus on properties that meet the Trust’s investment criteria in both Canada and the US.RioCan will also seek selected dispositions of properties in order to recycle capital into high growth major markets. The Trust willcontinue to pursue a disciplined approach to the development of new properties in Canada with a focus on major urban markets.

The current economy remains stable and while the outlook for the economy remains cautious due to the slower than expectedeconomic recovery in both the US and Canada, management believes that RioCan is well positioned with a strong balance sheet,liquidity and large operational platform, providing the ability to take advantage of opportunities as they arise. The acquisitionmarket is very competitive while RioCan continues to have strong access to capital. Demand from tenants is steady and continuesto put upward pressure on rental rates, particularly in major markets. The expansion of US and international retailers into Canadaand the repositioning of Canadian retailers in reaction to added competition is creating demand for space. Retailers are, however,moving into the Canadian market cautiously and are very selective in their location decisions. The recent volatility in interest ratesand equity values has created uncertainty in the debt and equity markets. RioCan will continue to monitor both the economy andreal estate markets with a view to ensuring it has adequate access to capital, either by way of equity, debt, or selected assetdispositions to meet its business requirements and maximize opportunities that may become available to it.

In addition to growth generated by acquisitions, RioCan’s growth is expected to continue to come from organic growth from withinthe portfolio, asset intensification and development in Canada. RioCan is committed to remaining focused on its portfolio in orderto preserve high occupancy levels through the active management and leasing in order to maintain a stable stream of cash flowsfrom long term assets which increase in value. The focus on active management led to RioCan’s decision to establish its ownmanagement platform in the US.

Overall, RioCan believes that it is well positioned in the marketplace, due to the depth of its management team, its size, as well asits diversified and stable portfolio, significant development pipeline, solid tenant base, flexible capital structure, and conservativeborrowing practices.

For the remainder of 2014:

Canada

• Fundamentals in retail real estate in Canada are expected to remain steady. The Canadian market benefits from concentratedretail tenants who generally are financially strong, and a low level of development activity that is unlikely to support a supplyimbalance. These factors should support a market in which RioCan can maintain pricing power as a greater number of tenantscompete for prime locations.

• The Trust will continue to review its portfolio with a view towards selective dispositions of properties where appropriate as afurther means of raising and re-cycling capital. One of the objectives of the Trust is to increase its weighting in the six majormarkets in Canada. The Trust evaluates the sale of selected assets as part of a process of actively managing its portfolio and ameans of increasing the portfolio weighting to the six major markets in Canada, which was 71.7% of revenue as at December 31,2013.



• The Trust expects to realize organic growth from within the portfolio by way of contractual rental increases in existing leases,additional rental income that can be achieved from positive rental spreads on lease renewals and the potential for positiveabsorption in occupancy.

• Retail consolidation of Loblaws and Shoppers Drug Mart is not expected to have a significant impact on RioCan’s businessoperations in the short and medium term.

• The trend of selected US retailers entering the Canadian market is expected to improve retail fundamentals and drive rentappreciation as they compete for space in desirable locations.

US

• RioCan has established a management operating platform in the US operating out of offices in Mount Laurel, New Jersey andDallas, Texas to manage the Trust’s assets that were previously managed by RioCan’s partners. RioCan’s operating platform inthe US is expected to provide a basis for RioCan to expand its reach in the US and provide the ability to realize additionaleconomies of scale as the portfolio grows.

Macro Economic and Market Trends

• The Trust is closely monitoring the impact of the weakening Canadian dollar relative to the US dollar on its business. In the nearterm we do not expect any significant impact other than the translation impact on US earnings and its net US dollar denominatedassets.

• Interest expense savings derived from refinancing at current market interest rates are anticipated to continue due to the lowinterest rate environment, which is expected to remain in 2014, although these opportunities have been reduced somewhat bythe recent volatility in interest rates.

• The Trust will continue to monitor the impact of online retail sales. RioCan believes that consumer trends will be towardsgreater sales in enclosed malls and shopping centers. As well, it is anticipated that there will be a higher proportion of salesgenerated from services versus products. Further, it is expected that existing retail models will be adapted to integrated salesdepots for online sales. RioCan is well positioned for these trends based upon the depth and breadth of its portfolio, especially inurban markets. Grocery stores have been typically resilient against online sales and due to RioCan’s strong portfolio of groceryanchored centres, the impacts are less severe.

Development Program

• Developments completed during 2013 along with future developments, are expected to contribute to operating FFO growth.Strong fundamentals arising from growth in certain cities with strong economic and population growth (Greater Toronto Areaand Calgary) and new retailers entering Canada will allow RioCan to increase its development activities. RioCan’s joint venturewith Tanger for the development of outlet shopping centres in Canada and RioCan’s urban focused joint venture with Alliedfurther expand the potential development and intensification opportunities available across multiple retail formats.

• Going forward, substantial activity and growth will be seen through a variety of formats in development and redevelopment ofexisting properties. Overall development spending, at RioCan’s interest, in the next five to seven years will range from $100 to$200 million per year. RioCan’s development pipeline is expected to add approximately 10.5 million square feet (4.9 millionsquare feet at RioCan’s interest) of space upon completion over the next six years, with the majority of yields ranging from 7% to11%. RioCan is committed to property development and redevelopment opportunities and is focused on completing thedevelopment pipeline currently underway. Development activity is primarily concentrated in the six high growth markets inCanada and serves as an important component of RioCan’s organic growth strategy. The markets of Toronto and Calgary havebeen a principal focus for development and intensification efforts where strong economic and population growth have affordedRioCan the opportunity to increase its development activity.

• In addition to RioCan’s development program, the Trust contributes to portfolio growth through the intensification of existingproperties where RioCan has identified strategic opportunities to increase density or add to an existing asset. This intensificationof existing properties contributes to NOI growth in an efficient manner, leveraging the existing asset base.

• The Trust has potential development opportunities on existing sites with excess density and/or expansion capability. Based uponmarket and population trends, RioCan will evaluate such opportunities.

Acquisitions

• RioCan has noted that there is currently greater competition for acquisitions as more investors have returned to the market.Despite an increasingly competitive acquisition market, good leveraged returns and an accretive environment for buildingRioCan’s portfolio continue to exist as interest rates have remained at relatively low levels. Management will continue tomaintain a disciplined approach to evaluating acquisition opportunities, while perhaps not at the same pace as the previousthree years. Management believes that RioCan will be able to take advantage of its strong balance sheet and reputation as areliable buyer to acquire real estate in both the Canadian and US markets notwithstanding the increased competition forpotential investment opportunities. At the present time, the opportunities are more likely to arise in the US market.

• The Trust has selected two geographic areas of focus for acquisitions – the northeastern US and the four major urban marketsin Texas (Dallas-Fort Worth, Houston, Austin and San Antonio), which offer a complementary mix of tenants to RioCan’sCanadian portfolio of largely nationally branded tenants.



• RioCan will continue its focus on the enclosed mall and urban retail segment, particularly in major markets, as a means ofleveraging its retail tenant base across Canada. There are additional opportunities for organic growth within the acquiredshopping centres, which RioCan believes it can realize with its deep infrastructure and management strength.

• The acquisitions that have been completed during the past year, net of the impact of its dispositions program, will contribute toRioCan’s Operating FFO growth. Going forward, in the near term, RioCan anticipates slowing its pace of acquisitions.

Joint Venture Relationships

The Trust will continue to capitalize on the strength of its joint venture relationships in Canada to acquire property, enhanceRioCan’s development projects, and generate additional income for its unitholders pursuant to arrangements where RioCan earnsfees for its services. RioCan’s important strategic partnerships are with KingSett, Allied, Tanger, Trinity, Kimco, Allied/Diamondand CPPIB.

Capital Management Strategy

RioCan’s capital management framework limits the Trust’s maximum indebtedness to 60% of Aggregate Assets as defined by theDeclaration. RioCan remains focused on preserving a strong balance sheet and continuing to maintain substantial liquidity. Basedon the fair market value of its portfolio, its consolidated leverage ratio of 43.9% of Aggregate Assets is currently substantiallylower than the specified limit of 60%. Furthermore, RioCan believes it has sufficient unencumbered assets ($2.1 billion as ofDecember 31, 2013) and assets with low loan-to-value ratios that can be financed and/or refinanced to generate capital to meet itscapital requirements and grow its asset base. RioCan’s ability to access such financing is dependent on the availability of debt inthe market.

RioCan has developed other metrics regarding debt and leverage that are tracked and disclosed on a quarterly basis to helpfacilitate financial statement users’ and stakeholders’ understanding of RioCan’s leverage and its ability to service such leverage.These metrics include net debt to adjusted EBITDA ratio, debt service coverage ratio, interest coverage ratio, fixed charge coverageratio and unencumbered assets to unsecured debt which are outlined in the “Capital Strategy and Resources” section of thisMD&A.

While having relatively low debt leverage exposure is important, the quality of the rental revenue available to service the Trust’sdebt and pay distributions to unitholders is equally important. The Trust strives to reduce its exposure to rental revenue risk in theshopping centre portfolio through geographical diversification, staggered lease maturities, diversification of revenue sourcesresulting from a large tenant base, avoiding dependence on any single tenant by ensuring no individual tenant contributes asignificant percentage of its gross revenue and ensuring a considerable portion of its rental revenue is earned from national andanchor tenants. In addition, RioCan staggers its debt maturities to reduce its exposure to potential volatility in availability of debtand interest rate movements. RioCan is able to access multiple sources of capital including, but not limited to, secured andunsecured debt, preferred units and Units, to provide the Trust with greater flexibility in raising capital and to manage its overallcost of capital.

CORPORATE RESPONSIBILITYCorporate responsibility continues to be an area of focus for RioCan as it endeavours to maintain its role as one of Canada’scorporate leaders. RioCan’s corporate responsibility philosophy is based on three cornerstones: Environmental Responsibility,Corporate Philanthropy, and Responsibility to Employees.

Environmental Responsibility

RioCan continuously makes efficiency improvements in its property portfolio and works with its tenants to facilitate their energyconservation needs, which contribute to lowered emissions and reduced energy use. In addition, development projects are viewedthrough the lens of sustainable building with these factors being incorporated wherever possible. RioCan has worked with tenantsas they customize their space to include geothermal heating and cooling, waste water collection and lower carbon footprintinitiatives. RioCan has also taken specific initiatives at its properties to reduce waste, such as the installation of recyclingreceptacles to reduce the amount of waste generated at RioCan properties across Canada. At its head office location, the RioCanYonge Eglinton Centre, RioCan has taken a number of initiatives since acquiring the property to improve the efficiency andenvironmental footprint of the building. The property was BOMA BESt certified in 2009, and RioCan continues to upgrade theproperty’s efficiency. At its own offices, RioCan has undertaken a number of initiatives to reduce paper usage. RioCan hasexpanded its water and waste management strategies into the enclosed mall properties that it acquired in 2013, namely OakvillePlace and Burlington Mall. Through RioCan’s aggressive recycling and waste management programs it have been able to achieve awaste diversion rate in 2013 of approximately 93% at RioCan Yonge Eglinton Centre (as compared to 94% in 2012), 56% at RioCanSheppard Centre (as compared to 64%) and 57% at Georgian Mall (as compared to 64% in 2012). At its newly acquired enclosedmall properties in 2013, RioCan achieved a waste diversion rate of 84% at Oakville Place and 66% at Burlington Mall.

RioCan also strives to make each of its shopping centres a safe and integral part of its local community. Adequate lighting inparking lots, a clean environment and attentive staff all assist in providing a safe shopping environment in RioCan’s centres.RioCan has installed automated external defibrillators (AEDs) in many of RioCan’s enclosed shopping centres to provideemergency care in the event of a heart attack. An AED is a device that can monitor heart rhythms, and if necessary deliver anelectric shock to restore heart rhythm and potentially save lives.



Corporate Philanthropy

Corporate Philanthropy is a key facet of RioCan’s profile as a good corporate citizen and one that RioCan has always viewed as apriority. RioCan regularly sponsors a number of charitable organizations with a focus towards children’s and medical charities.RioCan views its participation in the community where it does business to be of great importance, whether it is through directfinancial contributions, the donation of space for use by charitable organizations, or through the donation of the time taken by itsemployees through volunteerism across Canada.

RioCan recognizes the importance of its dedication to the development of communities through civic involvement and the fundingof vital programs. RioCan believes that support in fundraising efforts returns long-lasting benefits to society, its employees, andthe Trust. In 2013, RioCan was a proud supporter of several non-profit organizations including the United Way, the Heart & StrokeFoundation, the Baycrest Foundation, the University Health Network, the Hospital for Sick Children, and Mount Sinai Hospital.

Responsibility to Employees

RioCan strives to provide its employees with a safe work environment, free from discrimination and harassment. RioCan has anumber of employee-focused initiatives that are designed to improve workplace satisfaction. These initiatives include developmentand education programs. RioCan also has a comprehensive Code of Conduct for all employees, which includes protections againstharassment and discrimination and provides guidelines for employee conduct including anti-bribery and fair dealing with RioCan’sstakeholders. Furthermore RioCan provides a Whistleblower hotline to provide employees with the ability to anonymously reportviolations of RioCan’s Code of Conduct.

OCCUPANCY

RioCan’s committed occupancy decreased to 96.9% as compared to 97.0% as at September 30, 2013 and 97.4% at December 31,2012. The current quarter decrease in committed occupancy over last quarter was primarily due to the expiry of an earnoutprovision with the vendor of Alamo Ranch in San Antonio, Texas in October 2013 and the subsequent assumption of 40,000 squarefeet of vacant space by RioCan at zero cost. Included in this occupancy rate is 542,000 square feet of NLA that has been leased butis not yet generating rent, resulting in an economic occupancy rate of 95.8%, which represents the occupied NLA for which tenantsare paying rent. The annualized rental impact once these tenants take occupancy and commence paying rent is approximately$14 million.

During the quarter, RioCan renewed 1,408,000 square feet in the Canadian portfolio at an average rent increase of $1.37 persquare foot, representing an increase of 8.8% and a renewal retention rate of 97.0%.

Various operating and leasing metrics over the last eight quarters are as follows:

2013 2012

(thousands of square feet,millions of dollars)

Fourthquarter

Thirdquarter

Secondquarter

Firstquarter

Fourthquarter

Thirdquarter

Secondquarter

Firstquarter

Committed occupancy 96.9% 97.0% 96.7% 97.0% 97.4% 97.3% 97.4% 96.9%Economic occupancy 95.8% 95.5% 95.4% 95.8% 95.9% 95.5% 95.5% 95.7%NLA leased but not paying rent 542 716 642 615 711 855 871 542Annualized rental impact $ 14.0 $ 17.0 $ 15.0 $ 15.0 $ 15.0 $ 18.0 $ 18.0 $ 12.0Retention rate – Canada (i) 97.0% 91.1% 95.9% 68.3% 94.3% 84.8% 89.9% 91.2%% increase in average net rent per sq ft – Canada 8.8% 11.2% 12.0% 13.4% 18.4% 12.9% 13.4% 10.0%Retention rate – US 98.2% 98.4% 92.0% 98.8% 87.6% 96.3% 84.2% 83.1%% increase in average net rent per sq ft – US 4.8% 3.8% 4.3% 2.3% 5.1% 6.0% 7.3% 7.2%Average in place rent $ 16.08 $ 16.07 $ 15.77 $ 15.77 $ 15.70 $ 15.85 $ 15.33 $ 15.37Same store growth (ii) – Canada 2.7% 2.2% 0.6% 0.1% 0.2% 0.0% 1.5% 1.5%Same store growth (ii) – US 1.7% 0.9% 1.4% 1.4% 1.9% (0.3%) 1.3% (0.6%)

(i) – The first quarter of 2013 includes impact of the vacancy of Zellers totalling 188,000 sq ft at 100% (100,500 sq ft at RioCan’s interest) during thequarter. The first quarter of 2013 retention rate excluding Zellers was 81.1%. To date, RioCan has released 56% of the Zellers space (atRioCan’s interest). One of the remaining vacant Zellers sites is located in a centre that was sold in Q1 2014.

(ii) – Refers to the growth in same store on a year over year basis

RioCan has consistently maintained high occupancy rates of between 96.7% and 97.4% over the most recent eight fiscal quarters.

For the quarter ended December 31, 2013, the retention rate in Canada or the percentage of tenants who have renewed theirleases during the period increased to 97.0% from the quarter ended September 30, 2013 (91.1%) and December 31, 2012 (94.3%).



The historical portfolio occupancy rate broken down by property type is as follows:

2013 2012

(in percentages)Fourth

quarterThird

quarterSecondquarter

Firstquarter

Fourthquarter

Thirdquarter

Secondquarter

Firstquarter

CanadaNew format retail 98.6 98.5 98.4 98.5 98.7 99.0 98.8 98.4Grocery anchored centre 98.0 97.9 96.9 97.1 97.0 97.6 97.0 96.6Enclosed shopping centre 90.2 90.9 90.4 91.2 92.3 91.1 92.2 92.1Non-grocery anchored centre 97.4 97.3 97.5 97.5 97.4 97.8 98.4 94.0Urban retail 98.9 98.6 98.8 98.1 99.4 98.5 98.4 99.2Office 97.3 97.3 97.8 98.1 97.7 98.0 97.9 97.3

Total Canada 96.9 96.9 96.6 97.0 97.2 97.2 97.3 96.7

USNew format retail 96.4 97.2 97.1 97.3 98.2 98.2 98.1 97.8Grocery anchored centre 98.0 98.1 98.0 98.1 98.3 97.8 97.7 97.7Non-grocery anchored centre 93.9 93.6 94.3 91.8 93.1 93.7 93.7 94.8Office (i) – – – – – 79.7 79.7 80.0

Total US 96.8 97.4 97.3 97.4 98.1 97.8 97.8 97.5

Total Portfolio 96.9 97.0 96.7 97.0 97.4 97.3 97.4 96.9

(i) Represents sale of Franklin Village as part of Cedar transaction in the fourth quarter of 2012.

Economic Occupancy

At December 31, 2013, RioCan’s committed occupancy rate of the total portfolio is 96.9% which includes 542,000 square feet ofNLA that has been leased but is not yet paying rent, resulting in an economic occupancy rate of 95.8%. A rent commencementtimeline for the NLA which has been leased but is not currently open is as follows:

(in thousands, except percentage amounts) Total Q1 2014 Q2 2014 Q3 2014 Q4 2014

Square feet:NLA commencing 542 192 137 130 83Cumulative NLA commencing 542 192 329 459 542% of NLA commencing 35% 25% 24% 15%Cumulative % total 35% 61% 85% 100%Average net rent:Monthly rent commencing $ 1,167 $ 470 $ 293 $ 277 $ 127Cumulative monthly rent commencing $ 1,167 $ 470 $ 763 $ 1,040 $ 1,167% of rent for NLA commencing 40% 25% 24% 11%Cumulative % total rent commencing 40% 65% 89% 100%

Small Store Occupancy

At December 31, 2013, RioCan’s small store committed occupancy rate for the total portfolio is 92.3%. RioCan defines small storesas shops with less than 10,000 square feet of NLA. The following table is a breakdown of total portfolio committed occupancy bygeography and by small stores:

Canada USTotal

Portfolio

Majors (> 10,000 sf): 98.8% 99.7% 99.0%Small Store (<9,999 sf) 93.1% 88.2% 92.3%

Total 96.9% 96.8% 96.9%



Leasing Activity

RioCan’s portfolio leasing activity during the three months and year ended December 31, 2013 are as follows:

Three months endedDecember 31, 2013

Three months endedDecember 31, 2012

(in thousands, except per sqft amounts)

Squarefeet

Averagenet rent

per sqft (i)Square

feet

Averagenet rent

per sqft (i)

CanadaNew leasing 375 $ 17.99 507 $ 15.30Renewals 1,408 $ 16.88 586 $ 21.37USNew leasing 4 $ 19.76 26 $ 22.40Renewals 191 $ 12.06 29 $ 24.84

(i) Net rent is primarily contractual basic rent pursuant to tenant leases.

Year endedDecember 31, 2013

Year endedDecember 31, 2012

(in thousands, except per square foot amounts)

Squarefeet

Averagenet rent

per sqft (i)Square

feet

Averagenet rent

per sqft (i)

CanadaNew leasing 1,499 $ 18.97 1,722 $ 15.95Renewals 3,880 $ 18.22 3,481 $ 18.78USNew leasing 87 $ 21.96 182 $ 18.48Renewals 633 $ 12.96 361 $ 17.32

(i) Net rent is primarily contractual basic rent pursuant to tenant leases.

Renewal Leasing

A summary of RioCan’s 2013 and 2012 renewal leasing is as follows:

Renewal Leasing

(in thousands, except per sqft amounts)2013 Full

year2013 Fourth

quarter2013 Third

quarter2013 Second

quarter2013 First

quarter2012 Full

year

Square feet renewed:

Canada 3,880 1,408 708 956 808 3,481US 633 191 234 110 98 361Average net rent per square foot:

Canada $ 18.22 16.88 $ 20.66 $ 19.98 $ 16.34 $ 18.78US $ 12.96 12.06 $ 11.72 $ 14.48 $ 15.99 $ 17.32Increase in average net rent per square foot:

Canada $ 1.80 1.37 $ 2.08 $ 2.14 $ 1.93 $ 2.19US $ 0.49 0.55 $ 0.43 $ 0.60 $ 0.36 $ 1.11Percentage increase in average net rent persquare foot:

Canada 11.0% 8.8% 11.2% 12.0% 13.4% 13.2%US 3.9% 4.8% 3.8% 4.3% 2.3% 6.8%Retention rate:

Canada 88.0% 97.0% 91.1% 95.9% 68.3% 89.7%US 97.1% 98.2% 98.4% 92.0% 98.8% 85.9%

(i) – The first quarter of 2013 includes impact of the vacancy of Zellers totalling 188,000 sq ft at 100% (100,500 sq ft at RioCan’s interest) during thequarter. The first quarter of 2013 retention rate excluding Zellers was 81.1%. To date, RioCan has released 56% of the Zellers space (atRioCan’s interest). One of the remaining vacant Zellers sites is located in a centre that was sold in Q1 2014.



Including anchor tenants, the components of renewal activity for the three months and year ended December 31, 2013 by country isas follows:

For the three monthsended December 31, 2013

For the year endedDecember 31, 2013

(in thousands, except per sqft amounts) Canada US Canada US

Renewals at market rental rates:

Square feet renewed 801 67 2,218 270Average net rent per sqft $ 19.90 $ 12.91 $ 21.70 $ 15.84Increase in average net rent per sqft $ 2.03 $ 0.87 $ 2.62 $ 0.66Percentage increase in average net rent per sqft 11.4% 7.3% 13.7% 4.3%

Renewals at fixed rental rate options:

Square feet renewed 607 124 1,662 363Average net rent per sqft $ 12.89 $ 11.61 $ 13.58 $ 10.83Increase in average net rent per sqft $ 0.50 $ 0.38 $ 0.71 $ 0.36Percentage increase in average net rent per sqft 4.0% 3.4% 5.5% 3.4%

Total:

Square feet renewed 1,408 191 3,880 633Average net rent per sqft $ 16.88 $ 12.06 $ 18.22 $ 12.96Increase in average net rent per sqft $ 1.37 $ 0.55 $ 1.80 $ 0.49Percentage increase in average net rent per sqft 8.8% 4.8% 11.0% 3.9%

Including anchor tenants, the components of renewal activity for the Canadian portfolio for the three months ended December 31,2013 by property type are as follows:

(in thousands, except per sqft amounts) Total

Newformat

retail

Groceryanchored

centre

Enclosedshopping

centre

Non-grocery

anchoredcentre

Urbanretail Office


Square feet renewed 801 332 172 177 22 90 8Average net rent per sqft $ 19.90 $20.00 $ 20.80 $ 20.86 $ 17.94 $ 16.12 $ 23.54Increase in average net rent per sqft $ 2.03 $ 1.88 $ 2.18 $ 2.23 $ 3.15 $ 1.27 $ 6.15


Square feet renewed 607 291 202 91 21 – 2Average net rent per sqft $ 12.89 $14.85 $ 9.05 $ 13.78 $ 18.03 $ – $ 19.00Increase in average net rent per sqft $ 0.50 $ 0.74 $ 0.16 $ 0.52 $ 0.35 $ – $ 1.00

Total:

Square feet renewed 1,408 623 374 268 43 90 10Average net rent per sqft $ 16.88 $17.59 $ 14.47 $ 18.46 $ 17.98 $ 16.12 $ 22.69Increase in average net rent per sqft $ 1.37 $ 1.34 $ 1.09 $ 1.65 $ 1.79 $ 1.27 $ 5.18Percentage increase in average net rent per sqft 8.8% 8.2% 8.1% 9.8% 11.1% 8.6% 29.6%



Including anchor tenants, the components of renewal activity for the US portfolio for the three months ended December 31, 2013 byproperty type are as follows:


Newformat

retail

Groceryanchored

centre

Enclosedshopping

centre

Non-grocery

anchoredcentre

Urbanretail Office

Renewals at market rental rates (US dollars):

Square feet renewed 67 50 11 – 6 – –Average net rent per sqft $ 12.91 $ 9.07 $ 28.32 $ – $ 17.60 $ – $ –Increase in average net rent per sqft $ 0.87 $ 0.55 $ 2.00 $ – $ 1.60 $ – $ –

Renewals at fixed rental rate options (US dollars):

Square feet renewed 124 84 – – 40 – –Average net rent per sqft $ 11.61 $12.37 $ – $ – $ 10.00 $ – $ –Increase in average net rent per sqft $ 0.38 $ 0.32 $ – $ – $ 0.50 $ – $ –

Total:

Square feet renewed 191 134 11 – 46 – –Average net rent per sqft $ 12.06 $11.14 $ 28.32 $ – $ 10.97 $ – $ –Increase in average net rent per sqft $ 0.55 $ 0.40 $ 2.00 $ – $ 0.64 $ – $ –Percentage increase in average net rent per sqft 4.8% 3.7% 7.6% 6.2%

Including anchor tenants, the components of renewal activity for the Canadian portfolio for the year ended December 31, 2013 byproperty type are as follows:


Newformat

retail

Groceryanchored

centre

Enclosedshopping

centre

Non-groceryanchored

centreUrbanretail Office


Square feet renewed 2,218 915 427 511 110 242 13Average net rent per sqft $ 21.70 $21.79 $ 22.54 $ 22.78 $ 18.29 $ 18.97 $ 24.88Increase in average net rent per sqft $ 2.62 $ 2.34 $ 3.01 $ 2.88 $ 2.53 $ 2.36 $ 5.34


Square feet renewed 1,662 680 425 502 30 23 2Average net rent per sqft $ 13.58 $17.48 $ 10.83 $ 10.76 $ 17.29 $ 5.82 $ 19.00Increase in average net rent per sqft $ 0.71 $ 0.99 $ 0.56 $ 0.50 $ 0.49 $ 0.13 $ 1.00

Total:

Square feet renewed 3,880 1,595 852 1,013 140 265 15Average net rent per sqft $ 18.22 $19.95 $ 16.70 $ 16.82 $ 18.08 $ 17.83 $ 24.17Increase in average net rent per sqft $ 1.80 $ 1.77 $ 1.79 $ 1.70 $ 2.10 $ 2.17 $ 4.81Percentage increase in average net rent per sqft 11.0% 9.7% 12.0% 11.2% 13.1% 13.9% 24.8%



Including anchor tenants, the components of renewal activity for the US portfolio for the year ended December 31, 2013 by propertytype are as follows:


Newformat

retail

Groceryanchored

centre

Enclosedshopping

centre

Non-groceryanchored

centreUrbanretail Office

Renewals at market rental rates (US dollars):

Square feet renewed 270 227 37 – 6 – –

Average net rent per sqft $ 15.84 $14.53 $ 23.56 $ – $ 17.60 $ – $ –

Increase in average net rent per sqft $ 0.66 $ 0.55 $ 1.19 $ – $ 1.60 $ – $ –

Renewals at fixed rental rate options (US dollars):




Total:




Percentage increase in average net rent per sqft 3.9% 3.7% 5.3% 3.9%

Tenant Vacancies and Recent Events

RioCan strives to diversify its tenant base by location, by property type, by anchor type and by minimizing the degree of reliance onany single tenant. In the regular course of business, RioCan will, however, encounter tenants that are subject to restructuring,insolvency or bankruptcy activities. In most cases, rental revenue continues to be paid to RioCan by, or on behalf of, the tenant.RioCan actively monitors such situations and, in those cases where vacancies result, RioCan endeavours to replace tenants asquickly as possible at economically similar or better lease terms.

2013 Vacancy Activity

For the three months ended December 31,(thousands of square feet)

2013 2012

TotalRioCan’s

Share TotalRioCan’s

Share

Total vacancies in current period (i) 235 189 219 166Vacated space re-leased in current period 91 86 225 196

(i) Excluding lease buyouts

For the year ended December 31,(thousands of square feet)

2013 2012

TotalRioCan’s

Share TotalRioCan’s

Share

Total vacancies in current period (i) 1,460 1,212 1,251 1,0222013 vacancies re-leased to date in 2013 711 608 757 669

(i) Excluding lease buyouts

During the three months ended December 31, 2013, RioCan experienced vacancies of approximately 235,000 square feet, of whichRioCan’s interest was 189,000 square feet. The average gross rent on RioCan’s ownership interest was $26.42 per square foot. Forthe three months ended December 31, 2013, approximately 91,000 square feet of space vacated in 2013 has been leased to newtenants, of which RioCan’s interest was 86,000 square feet, at an average gross rent of $28.41 per square foot.

In 2012, tenant vacancies for which lease cancellation fees of $13.3 million were recognized by RioCan totalled 715,000 square feetof vacated NLA (667,000 square feet at RioCan’s interest) at an average net rent of $10.68 per square foot ($9.47 per square foot atRioCan’s interest). The lease cancellation fees include five months of amortization of the $9.3 million termination fee payable fromZellers on five locations comprising 466,000 square feet. This fee was recognized in income over the period from July 22, 2012 toApril 1, 2013, which is the period during which Zellers continued to lease and pay rent on the five stores to which the terminationfee applies. The fee was paid to RioCan on April 1, 2013.



In 2013, tenant vacancies for which lease cancellation fees of $9.9 million were recognized by RioCan totaled 252,000 square feet ofvacated NLA (228,000 square feet at RioCan’s interest) at an average net rent of $16.24 per square foot ($15.36 per square foot atRioCan’s interest). The lease cancellation fees include a $5.1 million termination fee payable from RONA on principally onelocation comprising 121,000 square feet, located at RioCan Colossus Centre.

In total, RioCan was in possession of nine former Zellers stores in December 2013 comprising approximately 727,000 square feet(640,000 square feet at RioCan’s interest). Zellers paid an average base rental rate of $5.28 per square foot contributing$6.6 million of annual gross revenue ($6 million at RioCan’s interest). To date, RioCan has negotiated firm leases and conditionalLOI’s for 360,000 square feet or 56% of the Zellers space (at RioCan’s ownership interest) accounting for $5.6M of gross revenue or94% of the gross rent formerly paid by Zellers (at RioCan’s ownership interest). The average base rent on the released space is$10.39 per square foot compared to the $5.28 per square foot formerly received from Zellers representing a 97% increase. One ofthe remaining vacant Zellers sites is located in a centre that was sold in Q1 2014.

New Leasing

Canadian Portfolio

For the quarter ended December 31, 2013, approximately 375,000 square feet of space was leased at an average net rent of$ 17.99 per square foot compared to approximately 507,000 square feet of space that was leased at an average net rent of$ 15.30 per square foot during the fourth quarter of 2012.

Approximately 1,499,000 square feet (including 150,000 square feet pertaining to space leased at development sites) of space wasleased in the Canadian portfolio during the year ended December 31, 2013 at an average net rent of $18.97 per square footcompared to approximately 1,722,000 square feet of space that was leased at an average net rent of $15.95 per square foot duringthe year ended December 31, 2012.

A summary of RioCan’s 2013 and 2012 new leasing on the existing Canadian portfolio by property type is as follows:

New Leasing


Year2013 Fourth

quarter2013 Third

quarter2013 Second

quarter2013 First

quarter2012 Full

Year

Square feet leased:

New format retail 485 153 158 118 56 516Grocery anchored centre 375 109 89 102 75 293Enclosed shopping centre 400 43 131 111 115 638Non-grocery anchored centre 55 9 6 26 14 165Urban retail 156 59 6 6 85 51Office 28 2 10 9 7 59

Total 1,499 375 400 372 352 1,722

Average net rent per square foot:

New format retail $ 20.13 $ 13.78 $ 22.14 $ 22.47 $ 26.91 $ 20.33Grocery anchored centre 18.56 16.94 18.90 18.45 20.69 15.50Enclosed shopping centre 16.02 25.67 15.59 13.73 15.14 13.11Non-grocery anchored centre 18.99 20.24 25.74 19.21 15.01 11.27Urban retail 23.90 24.93 39.76 40.48 20.98 27.98Office 19.18 19.00 18.47 19.06 20.36 13.19

Total $ 18.97 $ 17.99 $ 19.49 $ 18.72 $ 19.70 $ 15.95

US Portfolio

During the fourth quarter of 2013, RioCan achieved approximately 4,000 square feet of new leasing in the US at an average rate of$ 19.76 per square foot. During the year ended December 31, 2013, RioCan achieved approximately 87,000 square feet of newleasing in the US at an average rate of $ 21.96 per square foot.

During the fourth quarter of 2012, RioCan achieved approximately 26,000 square feet of new leasing in the US at an average rate of$ 22.40 per square foot. During the year ended December 31, 2012, RioCan achieved approximately 182,000 square feet of newleasing in the US at an average rate of $ 18.48 per square foot.



A summary of RioCan’s 2013 and 2012 new leasing on the existing US portfolio by property type is as follows:

New Leasing


Year2013 Fourth

quarter2013 Third

quarter2013 Second

quarter2013 First

quarter2012 Full

Year

Square feet leased:

New format retail 68 1 36 22 9 139Grocery anchored centre 15 3 9 – 3 43Non-grocery anchored centre 4 – 4 – – –

Total 87 4 49 22 12 182

Average net rent per square foot (US dollars):

New format retail $ 22.04 $ 22.00 $ 21.69 $ 23.10 $ 20.95 $ 19.15Grocery anchored centre 21.56 18.50 23.54 – 18.16 16.33Non-grocery anchored centre 22.00 – 22.00 – – –

Total $ 21.96 $ 19.76 $ 22.06 $ 23.10 $ 20.22 $ 18.48

Lease Expiries

RioCan’s lease expiries for the Canadian portfolio, at RioCan’s interest, by property type for the next five years are as follows:

Lease expiries for the years ending

(in thousands, except per sqft and percentage amounts)Portfolio

NLA 2014 2015 2016 2017 2018

Square feet:

New format retail 18,339 1,460 1,948 1,889 1,523 2,045Grocery anchored centre 8,592 1,215 922 1,192 1,214 1,122Enclosed shopping centre 6,952 1,016 773 1,201 507 739Non-grocery anchored centre 2,061 144 302 178 86 144Urban retail 1,589 332 36 69 91 272Office 1,825 228 128 223 146 270

Total 39,358 4,395 4,109 4,752 3,567 4,592

Square feet expiring/Portfolio NLA 11.2% 10.4% 12.1% 9.1% 11.7%

Average net rent per occupied square foot:

New format retail $ 16.86 $ 18.25 $ 17.28 $ 17.60 $ 19.47 $ 19.14Grocery anchored centre 15.65 14.62 16.09 15.19 15.34 15.48Enclosed shopping centre 17.83 17.47 16.12 16.64 21.91 13.31Non-grocery anchored centre 11.17 16.45 11.94 15.16 21.41 19.79Urban retail 25.66 18.05 29.43 16.18 40.65 17.47Office 13.00 13.61 15.15 27.05 16.02 17.57

Total average net rent per square foot $ 16.63 $ 16.75 $ 16.44 $ 16.73 $ 18.86 $ 17.14



RioCan’s lease expiries for the US portfolio, at RioCan’s interest, by property type for the next five years are as follows:

Lease expiries for the years ending

(in thousands, except per sqft and percentage amounts)Portfolio

NLA (i) 2014 2015 2016 2017 2018

Square feet:

New format retail 7,107 413 332 229 410 747Grocery anchored centre 2,603 244 135 260 316 367Non-grocery anchored centre 172 43 15 4 6 32

Total 9,882 700 482 493 732 1,146

Square feet expiring/Portfolio NLA 7.1% 4.9% 5.0% 7.4% 11.6%

Average net rent per occupied square foot (US dollars):

New format retail $ 13.78 $ 14.74 $ 18.55 $ 17.69 $ 16.64 $ 15.78Grocery anchored centre 13.86 16.18 19.45 15.35 18.08 16.46Non-grocery anchored centre 15.57 10.86 20.66 26.48 17.60 17.13

Total average net rent per square foot $ 13.83 $ 15.00 $ 18.87 $ 16.52 $ 17.27 $ 16.04

(i) Represents RioCan’s proportionate ownership share.

The components of RioCan’s Canadian and US lease expiries for 2014 by property type are as follows:


Newformat

retail

Groceryanchored

centre

Enclosedshopping

centre

Non-grocery

anchoredcentre

Urbanretail Office

2014 expiries at market rental rates:Square feet expiring 3,705 1,311 963 833 166 243 189Average net rent per sqft $ 17.49 $ 17.85 $ 16.68 $ 18.81 $ 14.85 $ 18.65 $ 14.212014 expiries with fixed rental rate options:

Square feet expiring 1,390 562 496 183 21 89 39Average in-place net rent per sqft $ 13.91 $ 16.62 $ 11.40 $ 11.40 $ 17.68 $ 16.43 $ 10.75Average renewal net rent per sqft $ 14.72 $ 17.80 $ 11.96 $ 12.15 $ 18.03 $ 16.67 $ 11.20Increase in average net rent per sqft $ 0.81 $ 1.19 $ 0.56 $ 0.75 $ 0.35 $ 0.24 $ 0.45Total

Square feet expiring 5,095 1,873 1,459 1,016 187 332 228Average net rent per sqft $ 16.51 $ 17.48 $ 14.88 $ 17.47 $ 15.16 $ 18.05 $ 13.61

Contractual Rent Increases

Certain of RioCan’s leases allow for periodic increases in rates during the term of the leases which contributed to growth in samestore NOI. Contractual rent increases, including rent increases at time of renewal, in each year for the next five years are asfollows:

For the years ending

(in millions) 2014 2015 2016 2017 2018

Canadian Portfolio $ 6 $ 4 $ 3 $ 2 $ 3US Portfolio 1 1 1 1 1

Net increase in contractual rent receipts $ 7 $ 5 $ 4 $ 3 $ 4



RESULTS OF OPERATIONSUp to December 31, 2012, the following joint ventures were proportionately consolidated. During the first nine months of 2013,these joint ventures were accounted for using the equity method of accounting. The following table shows the Trust’s ownershipinterests in these properties at December 31, 2013 and 2012:

Partnership Properties

RioCan’sInterest as at

December 31,2013


December 31,2012

RPAI (Texas) (i) 1890 Ranch 1 100% 80%Alamo Ranch 1 100% 80%Bear Creek 1 100% 80%Bird Creek Crossing 1 100% 80%Great Southwest Crossing 1 100% 80%Riverpark Shopping Center I, II 1 100% 80%Southpark Meadows (Phase I, II) 1 100% 80%Suntree Square 1 100% 80%Coppel Town Center 2 0% 80%Cypress Mill Plaza 2 0% 80%New Forest Crossing 2 0% 80%Sawyer Heights 2 0% 80%Southlake Corners 2 0% 80%

RioKim /Dunhill (Texas) (i) Las Palmas Marketplace 3 100% 31.7%

RioKim Montgomery JV LP (Texas) (ii) Montgomery Plaza 4 80% 80%

Dawson Yonge LP (Canada) (iii) RioCan Centre Newmarket 4 40% 40%

(i) For further details on the Texas joint venture dissolutions, please refer to section “Acquisitions During 2013”.(ii) RioKim Montgomery JV LP is an 80/20 joint venture between RioCan and Kimco managed by Kimco.(iii) Dawson Young LP is a partnership between RioCan (40%), Marketvest Corporation (40%) and Dale-Vest Corporation (20%).RPAI Properties1 Represents the Texas properties acquired by RioCan from RPAI and, therefore, fully consolidated effective October 1, 2013.2 Represents the Texas properties in which RioCan sold its 80% interest to RPAI effective October 1, 2013.Dunhill Properties3 Represents the Texas properties in which RioCan acquired the managing interest from Dunhill during October 2013. This property is fully

consolidated, effective October 1, 2013.Montgomery Plaza and RioCan Centre Newmarket Properties4 Equity accounted for in the fourth quarter of 2013.During the year end December 31, 2013, the following joint ventures were consolidated in RioCan’s 2013 Annual FinancialStatements:

Partnership Properties


December 31,2013


December 31,2012

Dunhill (Texas) (i) Arbor Park 2 100% 85%Las Colinas Village 2 100% 85%Lincoln Square 1 100% 82%Louetta Central 1 100% 85%Timber Creek 2 100% 80%

Sterling (Texas) (i) Cinco Ranch 3 100% 80%Ingram Hills Shopping Center 3 100% 90%

White Shield (Canada) (ii) White Shield Plaza 60% 60%

(i) For further details on the Texas joint venture dissolutions, please refer to the section “Acquisitions During 2013.”(ii) On February 3, 2014, RioCan entered into an agreement to purchase the remaining 40% equity interest in White Shield (Canada).Dunhill Properties1 Represents the Texas properties in which RioCan acquired the managing interest from Dunhill during October 2013.2 Represents the Texas properties in which RioCan acquired the managing interest from Dunhill during the three months ended September 30,

2013.Sterling Properties3 In December 2013, RioCan purchased Sterling’s managing interest in Cinco Ranch and Ingram Hills Shopping Centre.



The following tables provide a reconciliation from RioCan’s IFRS financial statements to RioCan’s financial statements utilizing itsproportionate interest in all of its portfolio investments.

Reconciliation of Consolidated Statement of Earnings to Earnings at RioCan’s Interest (i)

Adjustments

(thousands of dollars)Three months ended December 31, 2013

Consolidated(ii)

Non-ControllingInterests

(iii)

RioCan’sInterest in

EquityAccounted

Investmentsand JointVentures

(iv)

RioCan’sInterest

(i)

REVENUE:

Base rent $ 195,122 $ (226) $ 1,102 $ 195,998Percentage rent 1,508 – – 1,508Rent subject to tenants’ sales thresholds 1,174 – – 1,174Property taxes and operating cost recoveries 95,853 (112) 554 96,295

293,657 (338) 1,656 294,975Lease cancellation fees 4,554 – – 4,554

Rental revenue 298,211 (338) 1,656 299,529

PROPERTY OPERATING COSTS:

Recoverable under tenant leases 98,734 (148) 535 99,121Non-recoverable from tenants 4,006 (8) 12 4,010

Property operating costs 102,740 (156) 547 103,131

OPERATING INCOME 195,471 (182) 1,109 196,398

Other income

Share of net earnings in equity accounted investments and joint ventures 3,596 – (3,596) –Fees and other 3,167 – – 3,167Interest 3,778 1 – 3,779

206,012 (181) (2,487) 203,344Other expenses

Interest 60,292 (63) 248 60,477General and administrative 16,598 (1) 28 16,625Foreign exchange loss 65 – – 65Demolition costs 850 – – 850Aborted deal costs 551 – – 551Transaction-related expense (recovery) (1,228) – – (1,228)

Earnings before fair value gains on investment property, net and income taxes 128,884 (117) (2,763) 126,004

Fair value gains on investment property, net 135,560 (624) 2,763 137,699Current income tax expense (recovery) (175) – – (175)Deferred income tax expense (recovery) (870) – – (870)

Net earnings $ 265,489 $ (741) $ – $ 264,748

Net earnings attributable to:

Common and preferred unitholders $ 264,748 $ – $ – $ 264,748Non-controlling interests 741 (741) – –

$ 265,489 $ (741) $ – $ 264,748

Net earnings per Unit attributable to common Unitholders – basic $ 0.86

Net earnings per Unit attributable to common Unitholders – diluted $ 0.86

Weighted average number of common Units outstanding – basic(in thousands) 303,544

Weighted average number of common Units outstanding – diluted(in thousands) 304,272

(i) Represents RioCan’s proportionate share of the revenues and expenses of all of its portfolio investments. Effectively, this utilizes theaccounting joint venture methodology (proportionate consolidation) in place prior to the implementation of IFRS 11 which requires equityaccounting for certain joint ventures.

(ii) Represents RioCan’s consolidated statement of earnings prepared in accordance with IFRS.(iii) Represents the non-controlling interests’ proportionate share of the revenues and expenses for those joint ventures that have been

consolidated.(iv) Represents RioCan’s proportionate share of the revenues and expenses of its joint ventures that are accounted for on the equity basis of

accounting.




Adjustments

(thousands of dollars)Year ended December 31, 2013

Consolidated(ii)


(iii)


EquityAccounted


(iv)

RioCan’sInterest

(i)

REVENUE:

Base rent $ 738,227 $ (3,166) $ 34,759 $ 769,820Percentage rent 5,051 (73) 3 4,981Rent subject to tenants’ sales thresholds 4,696 – – 4,696Property taxes and operating cost recoveries 363,162 (1,108) 11,858 373,912

1,111,136 (4,347) 46,620 1,153,409Lease cancellation fees 9,718 – 69 9,787

Rental revenue 1,120,854 (4,347) 46,689 1,163,196

PROPERTY OPERATING COSTS:Recoverable under tenant leases 375,797 (1,398) 14,284 388,683Non-recoverable from tenants 16,224 (62) 462 16,624

Property operating costs 392,021 (1,460) 14,746 405,307

OPERATING INCOME 728,833 (2,887) 31,943 757,889Other incomeShare of net earnings in equity accounted investments and joint ventures 31,870 – (31,870) –Fees and other 17,426 – 21 17,447Interest 13,970 6 (18) 13,958

792,099 (2,881) 76 789,294Other expensesInterest 234,336 (971) 9,849 243,214Expense for early retirement of debentures 12,094 – – 12,094General and administrative 45,212 (46) 442 45,608Foreign exchange loss 170 – – 170Demolition costs 3,173 – – 3,173Aborted deal costs 1,272 – – 1,272Transaction-related expense (recovery) 3,840 – – 3,840

Earnings before fair value gains on investment property, net andincome taxes 492,002 (1,864) (10,215) 479,923

Fair value gains on investment property, net 220,641 (2,053) 10,215 228,803Current income tax expense (recovery) (445) – – (445)Deferred income tax expense (recovery) (280) – – (280)

Net earnings $ 713,368 $ (3,917) $ – $ 709,451

Net earnings attributable to:Common and preferred unitholders $ 709,451 $ – $ – $ 709,451Non-controlling interests 3,917 (3,917) – –

$ 713,368 $ (3,917) $ – $ 709,451



Weighted average number of common Units outstanding – basic (inthousands) 302,324

Weighted average number of common Units outstanding – diluted (inthousands) 303,260


(ii) Represents RioCan’s consolidated statement of earnings prepared in accordance with IFRS.(iii) Represents the non-controlling interests’ proportionate share of the revenues and expenses for those joint ventures that have been consolidated.(iv) Represents RioCan’s proportionate share of the revenues and expenses of its joint ventures that are accounted for on the equity basis of accounting.




Adjustments

(thousands of dollars)Three months ended December 31, 2012

Consolidated(ii)


(iii)


EquityAccounted


(iv)

RioCan’sInterest

(i)

REVENUE:

Base rent $ 177,360 $ (1,231) $ 10,833 $ 186,962Percentage rent 1,936 (23) – 1,913Rent subject to tenants’ sales thresholds 1,198 – – 1,198Property taxes and operating cost recoveries 87,418 (387) 4,060 91,091

267,912 (1,641) 14,893 281,164

Lease cancellation fees 4,290 – – 4,290

Rental revenue 272,202 (1,641) 14,893 285,454


Recoverable under tenant leases 91,198 (489) 4,937 95,646Non-recoverable from tenants 3,232 (27) 97 3,302

Property operating costs 94,430 (516) 5,034 98,948

OPERATING INCOME 177,772 (1,125) 9,859 186,506

Other income

Share of net earnings in equity accounted investments and joint ventures 29,852 – (29,852) –Fees and other 10,917 – (1) 10,916Interest 3,224 2 (6) 3,220

43,993 2 (29,859) 14,136Other expenses

Interest 58,638 (367) 3,276 61,547General and administrative 15,249 (5) 148 15,392Foreign exchange (gain)loss 11 – – 11Demolition costs 813 – – 813Aborted deal costs 50 – – 50Transaction – related expense (recovery) 1,065 – – 1,065

Earnings before fair value gains on investment property, net andincome taxes 145,939 (751) (23,424) 121,764

Fair value gains on investment property, net 324,880 (2,468) 23,424 345,836Current income tax expense (recovery) 150 – – 150Deferred income tax expense (recovery) (750) – – (750)

Net earnings $ 471,419 $ (3,219) $ – $ 468,200


Common and preferred unitholders $ 468,200 $ – $ – $ 468,200Non-controlling interests 3,219 (3,219) – –

$ 471,419 $ (3,219) $ – $ 468,200







consolidated.(iv) Represents RioCan’s proportionate share of the revenues and expenses of its joint ventures that are accounted for on the equity basis of accounting.




Adjustments

(thousands of dollars)Year ended December 31, 2012

Consolidated(ii)


(iii)


EquityAccounted


(iv)

RioCan’sInterest

(i)

REVENUE:

Base rent $ 676,601 $ (10,976) $ 41,450 $ 707,075Percentage rent 6,010 (132) (1) 5,877Rent subject to tenants’ sales thresholds 4,778 – – 4,778Property taxes and operating cost recoveries 335,563 (2,821) 13,573 346,315

1,022,952 (13,929) 55,022 1,064,045Lease cancellation fees 13,252 – – 13,252

Rental revenue 1,036,204 (13,929) 55,022 1,077,297


Recoverable under tenant leases 348,040 (3,509) 16,647 361,178Non-recoverable from tenants 12,445 (184) 328 12,589

Property operating costs 360,485 (3,693) 16,975 373,767

OPERATING INCOME 675,719 (10,236) 38,047 703,530

Other income

Share of net earnings in equity accounted investments and joint ventures 68,625 – (68,625) –Fees and other 24,829 – (70) 24,759Interest 11,986 18 30 12,034

105,440 18 (68,665) 36,793Other expenses

Interest 233,994 (3,548) 12,726 243,172General and administrative 40,187 (82) 541 40,646Impairment of investment 11,999 – – 11,999Foreign exchange (gain)loss (86) – – (86)Demolition costs 2,210 – – 2,210Aborted deal costs 1,280 – – 1,280Transaction – related expense (recovery) 1,101 – 694 1,795

Earnings before fair value gains on investment property, net andincome taxes 490,474 (6,588) (44,579) 439,307

Fair value gains on investment property, net 868,104 (7,998) 44,579 904,685Current income tax expense (recovery) 521 – – 521Deferred income tax expense (recovery) (750) – – (750)

Net earnings $ 1,358,807 $ (14,586) $ – $ 1,344,221


Common and preferred unitholders $ 1,344,221 $ – $ – $ 1,344,221Non-controlling interests 14,586 (14,586) – –

$ 1,358,807 $ (14,586) $ – $ 1,344,221

Net earnings per Unit attributable to common Unitholders –basic $ 4.59






consolidated.(iv) Represents RioCan’s proportionate share of the revenues and expenses of its joint ventures that are accounted for on the equity basis of accounting.



Reconciliation of Consolidated Balance Sheet to Balance sheet at RioCan’s interest (i)

Adjustments

(millions of dollars)As at December 31, 2013

Consolidated(ii)

Non-controllinginterests

(iii)

RioCan’sshare of

EquityAccounted


(iv)

RioCan’sinterest

(i)

ASSETS

Investment properties $ 13,062 $ (11) $ 68 $ 13,119Investment in equity accounted investments

and joint ventures 36 – (36) –Mortgages and loans receivable 248 – – 248Deferred tax assets 9 – – 9Receivables and other assets 136 – 1 137Cash and equivalents 39 – 2 41

Total assets $ 13,530 $ (11) $ 35 $ 13,554

LIABILITIES

Mortgages payable and lines of credit $ 4,512 $ – $ 29 $ 4,541Debentures payable 1,447 – – 1,447Accounts payable and accrued liabilities 299 – 6 305

Total liabilities 6,258 – 35 6,293

EQUITY

Preferred unitholders’ equity 265 – – 265Common unitholders’ equity 6,996 – – 6,996

Total unitholders’ equity 7,261 – – 7,261

Non-controlling interests 11 (11) – –

Total equity 7,272 (11) – 7,261

Total liabilities and equity $ 13,530 $ (11) $ 35 $ 13,554

(i) Represents RioCan’s proportionate ownership interest in assets and liabilities of all of its portfolio investments. Effectively, this utilizes theaccounting joint venture methodology (proportionate consolidation) in place prior to the implementation of IFRS 11 which requires equityaccounting for certain joint ventures.

(ii) Represents RioCan’s consolidated balance sheet prepared in accordance with IFRS.(iii) Represents the non-controlling interests’ proportionate share of the assets and liabilities for those joint ventures that have been

consolidated.(iv) Represents RioCan’s proportionate share of the assets and liabilities of its joint ventures that are accounted for on the equity basis of

accounting.



Reconciliation of Consolidated Balance Sheet to Balance sheet at RioCan’s Interest (i)

Adjustments

(millions of dollars)As at December 31, 2012

Consolidated(ii)

Non-controllinginterests

(iii)

RioCan’sShare of

EquityAccounted


(iv)

RioCan’sinterest

(i)

ASSETS

Investment properties $ 11,765 $ (60) $ 639 $ 12,344Investment in equity accounted investments

and joint ventures 321 – (321) –Mortgages and loans receivable 200 – – 200Deferred tax assets 9 – – 9Investment 50 – – 50Receivables and other assets 99 (2) 4 101Cash and equivalents 175 – 9 184

Total assets $ 12,619 $ (62) $ 331 $ 12,888

LIABILITIES

Mortgages payable and lines of credit $ 4,159 $ (28) $ 294 $ 4,425Debentures payable 1,292 – – 1,292Accounts payable and accrued liabilities 288 (1) 37 324

Total liabilities 5,739 (29) 331 6,041

EQUITY

Preferred unitholders’ equity 265 – – 265Common unitholders’ equity 6,582 – – 6,582

Total unitholders’ equity 6,847 – – 6,847

Non-controlling interests 33 (33) – –

Total equity 6,880 (33) – 6,847

Total liabilities and equity $ 12,619 $ (62) $ 331 $ 12,888

(i) Represents RioCan’s proportionate ownership interest in assets and liabilities of all of its portfolio investments. Effectively, this utilizes theaccounting joint venture methodology (proportionate consolidation) in place prior to the implementation of IFRS 11 which requires equityaccounting for certain joint ventures.

(ii) Represents RioCan’s consolidated balance sheet prepared in accordance with IFRS.(iii) Represents the non-controlling interests’ proportionate share of the assets and liabilities for those joint ventures that have been

consolidated.(iv) Represents RioCan’s proportionate share of the assets and liabilities of its joint ventures that are accounted for on the equity basis of

accounting.



Results of Operations – Riocan’s Interest (i)

The components of RioCan’s interest in net earnings attributable to common and preferred unitholders are as follows:

Three months endedDecember 31, Increase

(decrease)

Year endedDecember 31, Increase

(decrease)(thousands of dollars) 2013 2012 2013 2012

Rental revenue $ 299,529 $ 285,454 $ 1,163,196 $ 1,077,297Property operating costs 103,131 98,948 405,307 373,767

Net operating income from income properties 196,398 186,506 5% 757,889 703,530 8%Fees and other income 3,167 10,916 17,447 24,759Interest income 3,779 3,220 13,958 12,034

203,344 200,642 1% 789,294 740,323 7%Interest expense 60,477 61,547 243,214 243,172Expense for early retirement of debentures – – 12,094 –General and administrative expense 16,625 15,392 45,608 40,646Impairment of investment – – – 11,999Foreign exchange (gain) loss 65 11 170 (86)Demolition costs 850 813 3,173 2,210Aborted deal costs 551 50 1,272 1,280Transaction-related expense (recovery) (1,228) 1,065 3,840 1,795

Earnings before fair value gains on investmentproperty, net and income taxes 126,004 121,764 3% 479,923 439,307 9%

Fair value gains on investment property, net 137,699 345,836 228,803 904,685Current income tax expense (recovery) (175) 150 (445) 521Deferred income tax expense (recovery) (870) (750) (280) (750)

Net earnings – RioCan’s interest (i) $ 264,748 $ 468,200 (43%) $ 709,451 $ 1,344,221 (47%)

(i) See “2013 Changes in Accounting Policy” for a reconciliation to RioCan’s consolidated earnings.



The following tables provide an analysis of RioCan’s interest in Operating FFO, AFFO, and FFO for the three months and yearsended December 31, 2013 and 2012.(thousands of dollars, except per Unit amounts and other data)Three months ended December 31, 2013 2012

RioCan’sinterest inoperating

FFOTransactiongain (loss)*

Development/redevelopment

activities (ii)

RioCan’sinterest

in FFO

RioCan’sinterest inoperating



activities andother

RioCan’sinterest

in FFO

OperatingFFO

Increase

Net operating income $ 196,711 $ – $ (313) $196,398 $ 186,732 $ – $ (226) $ 186,506Other revenue 6,946 175 – 7,121 7,217 6,769 – 13,986

203,657 175 (313) 203,519 193,949 6,769 (226) 200,492Interest expense 59,198 – 1,279 60,477 59,548 – 1,999 61,547General and administrative 16,625 – – 16,625 15,392 – – 15,392Demolition costs – – 850 850 – – 813 813Preferred unit distributions 3,397 – – 3,397 3,397 – – 3,397Aborted deal costs 551 – – 551 50 – – 50

79,771 – 2,129 81,900 78,387 – 2,812 81,199

Operating FFO $ 123,886 $ 115,562 7%

Other activities $ 175 $ (2,442) $6,769 $ (3,038)

FFO (i) $121,619 $ 119,293

Operating FFO per Unit $ 0.41 $ 0.39 5%

FFO per Unit $ 0.40 $ 0.40

Adjustments to bring Operating FFO to AFFO (iii):

Add back/(deduct):

Deduction of rents recorded on astraight-line basis (884) (3,084)

Non-cash unit basedcompensation expense 1,585 1,426

Normalized productive capacitymaintenance cashexpenditures capitalized:

Leasing commissions andtenant improvements (6,250) (4,750)

Maintenance capitalexpenditures recoverablefrom tenants (2,750) (2,750)

Maintenance capitalexpendituresnot recoverable fromtenants (2,250) (1,500)

AFFO $ 113,337 $ 104,904 8%

AFFO per Unit $ 0.37 $ 0.35 6%

Weighted average number ofcommon Units outstanding (inthousands) 303,544 299,411

Distribution Coverage Ratios:

Cash distributions per Unit $ 0.3525 $ 0.3450

Distributions paid as apercentage of Operating FFO 86.0% 88.5%

Distributions as a percentage ofAFFO 95.3% 98.6%

Distributions paid net of DRIP,per Unit $ 0.26 $ 0.24

Distributions net of DRIP as apercentage of AFFO 70.3% 68.6%

* – Transaction gains (losses) are presented net of tax, where applicable. Transaction gains in 2013 relate to current tax recoveries associated withRioCan’s investments in WCNUF I and II. Transaction gains in 2012 mainly relate to realized gains on the sale of certain marketable securitiesheld as a portfolio investment as well as distributions received by the Trust on its investment in WCNUF I.

(i) FFO is generally the same as IFRS net earnings other than excluding changes in the fair values of investment properties, deferred income taxes,acquisition transaction costs and deducting preferred unit distributions.

(ii) To calculate OFFO, the Trust adjusts for certain costs not capitalized during the development period for accounting purposes that, inmanagement’s view, forms part of the cost of its development projects.

(iii) AFFO is calculated by adjusting Operating FFO for straight-line rent adjustments, non-cash compensation expenses, costs for capitalexpenditures and leasing costs for maintaining shopping centre infrastructure and current lease revenues (productive capacity maintenance). Inaddition, non-recurring costs that impact operating cash flow may be adjusted. FFO amounts related to transactions gains and losses anddevelopment/redevelopment are also excluded from AFFO.



(thousands of dollars, except per Unit amounts and other data)

Year ended December 31, 2013 2012

RioCan’sinterest inOperating



activities (ii)

RioCan’sinterest in

FFO

RioCan’sinterest inOperating



activities andother

RioCan’sinterest in

FFO

OperatingFFO

Increase

Net operating income $ 758,796 $ – $ (907) $ 757,889 $ 704,301 $ – $ (771) $ 703,530Other revenue 31,405 445 – 31,850 28,474 -7,798 – 36,272

790,201 445 (907) 789,739 732,775 7,798 (771) 739,802

Interest expense 237,349 – 5,865 243,214 236,943 – 6,229 243,172General and administrative 45,608 – – 45,608 40,646 – – 40,646Demolition costs – – 3,173 3,173 – – 2,210 2,210Preferred unit distributions 13,589 – – 13,589 13,589 – – 13,589Aborted deal costs 1,272 – – 1,272 1,280 – – 1,280Impairment charge – Cedar

shares – – – – – 11,999 – 11,999Expense for early retirement

of debentures – 12,094 – 12,094 – – – –

297,818 12,094 9,038 318,950 292,458 11,999 8,439 312,896

Operating FFO $ 492,383 $ 440,317 12%

Other activities $ (11,649) $ (9,945) $ (4,201) $(9,210)

FFO (i) $ 470,789 $ 426,906

Operating FFO per Unit $ 1.63 $ 1.52 7%

FFO per Unit $ 1.56 $ 1.47

FFO, excluding expenses forearly retirement ofdebentures $ 482,883 $ 426,906

FFO per Unit, excludingexpenses for earlyretirement of debentures $ 1.60 $ 1.47

Adjustments to bring Operating FFO to AFFO (iii):

Add back/(deduct):Deduction of rents recorded

on a straight-line basis (6,653) (7,549)Non-cash unit based

compensation expense 5,925 5,171Normalized productive

capacity maintenance cashexpenditures capitalized:

Leasing commissionsand tenantimprovements (25,000) (19,000)

Maintenance capitalexpendituresrecoverable fromtenants (11,000) (11,000)

Maintenance capitalexpenditures notrecoverable fromtenants (9,000) (6,000)

AFFO $ 446,655 $ 401,939 11%

AFFO per Unit $ 1.48 $ 1.39 6%

Weighted average number ofcommon Units outstanding(in thousands) 302,324 289,950

Distribution Coverage Ratios:

Cash distributions per Unit $ 1.4100 $ 1.3800

Distributions paid as apercentage of Operating FFO 86.5% 90.8%

Distributions as apercentage of AFFO 95.3% 99.3%

Distributions paid net ofDRIP, per Unit $ 1.04 $ 1.01 (0.01)

Distributions net of DRIP asa percentage of AFFO 70.3% 72.7%



* – Transaction gains (losses) are presented net of tax. Transaction gains in 2013 relate to current tax recoveries associated with RioCan’sinvestments in WCNUF I and II. Transaction gains in 2012 mainly relate to realized gains on the sale of certain marketable securities held as aportfolio investment as well as distributions received by the Trust on its investment in WCNUF I.

(i) FFO is generally the same as IFRS net earnings other than changes in the fair values of investment properties, deferred income taxes,acquisition/disposition transaction costs and deducting preferred unit distributions.

(ii) The Trust has added back certain costs not capitalized during the development period for accounting purposes that, in management’s view,forms part of the cost of its development projects.

(iii) AFFO is calculated by adjusting Operating FFO for productive capacity maintenance. In addition, non-recurring costs that impact operatingcash flow may be adjusted. FFO amounts related to transactions gains and losses and development/redevelopment are also excluded fromAFFO.

A reconciliation of IFRS net earnings attributable to unitholders to FFO is as follows:


(decrease)


(decrease)(thousands of dollars, except per Unit amounts) 2013 2012 2013 2012

Net earnings attributable to unitholders $ 264,748 $ 468,200 (43%) $ 709,451 $ 1,344,221 (47%)Add back/(Deduct):

Fair value gains (135,560) (324,880) (58%) (220,641) (868,104) (75%)Non controlling interest relating to fair value gains 624 2,468 (75%) 2,053 7,998 (74%)Fair value gains included in equity accounted

investments and joint ventures (2,763) (23,424) (88%) (10,215) (44,579) (77%)Deferred income tax expense (recovery) (870) (750) nm (280) (750) nmTransaction-related expense (recovery) (1,228) 1,065 nm 3,840 1,795 114%Preferred unit distributions (3,397) (3,397) 0% (13,589) (13,589) 0%Foreign exchange (gain) loss 65 11 491% 170 (86) (298%)

FFO $ 121,619 $ 119,293 2% $ 470,789 $ 426,906 10%

FFO per Unit $ 0.40 $ 0.40 1% $ 1.56 $ 1.47 6%

Weighted average number of common Unitsoutstanding 303,544 299,411 302,324 289,950

Net Operating Income – Rental Properties

NOI is defined by RioCan as rental revenue from income properties less property operating costs. RioCan’s method of calculatingNOI may differ from other issuers’ methods and, accordingly, may not be comparable to NOI reported by other issuers.

Rental revenue includes all amounts earned from tenants related to lease agreements, including property tax and operating costrecoveries, to the extent recoverable under tenant leases. Amounts payable by tenants to terminate their lease prior to thecontractual expiry date (lease cancellation fees) are included in rental revenue.



NOI at RioCan’s interest for the three months and years ended December 31, 2013 and 2012 is as follows:


(decrease)



Base rent $ 195,998 $ 186,962 5% $ 769,820 $ 707,075 9%Percentage rent 1,508 1,913 (21%) 4,981 5,877 (15%)Rents subject to tenants’ sales thresholds 1,174 1,198 (2%) 4,696 4,778 (2%)Property taxes and operating cost recoveries 96,295 91,091 6% 373,912 346,315 8%

294,975 281,164 5% 1,153,409 1,064,045 8%Lease cancellation fees 4,554 4,290 6% 9,787 13,252 (26%)

Rental revenue 299,529 285,454 5% 1,163,196 1,077,297 8%

Recoverable under tenant leases 99,121 95,646 4% 388,683 361,178 8%Non-recoverable from tenant 4,010 3,302 21% 16,624 12,589 32%

Property operating costs 103,131 98,948 4% 405,307 373,767 8%

NOI – RioCan’s interest (i) $ 196,398 $ 186,506 5% $ 757,889 $ 703,530 8%

NOI as a percentage of rental revenue (excludingthe impact of lease cancellation fees) 67% 66% 1% 66% 66% 0%

(i) See “2013 Change in Accounting Policy” for a reconciliation to RioCan’s consolidated earnings.

The amount of property taxes and operating costs that can be recovered from tenants is impacted by property vacancy and fixedcost recovery tenancies.

The NOI margin for the three months and year ended December 31, 2013 remained consistent when compared to the same periodin 2012.

RioCan’s interest in NOI on a portfolio basis is as follows:(thousands of dollars)

For the three months endedDecember 31, 2013 2012

CanadianPortfolio

USPortfolio

RioCan’sProportionate Share

CanadianPortfolio

USPortfolio


REVENUE:

Base rent $ 160,948 $ 35,050 $195,998 $ 158,491 $ 28,471 $186,962Percentage rent 1,382 126 1,508 1,936 (23) 1,913Rent subject to tenants’ sales

thresholds 1,174 – 1,174 1,198 – 1,198Property taxes and operating

cost recoveries 86,924 9,371 96,295 82,304 8,787 91,091

250,428 44,547 294,975 243,929 37,235 281,164Lease cancellation fees 4,554 – 4,554 4,290 – 4,290

Rental revenue 254,982 44,547 299,529 248,219 37,235 285,454


Recoverable under tenant leases 88,945 10,176 99,121 84,958 10,688 95,646Non-recoverable from tenants 2,869 1,141 4,010 3,243 59 3,302

Property operating costs 91,814 11,317 103,131 88,201 10,747 98,948

NOI – RioCan’s interest $ 163,168 $ 33,230 $ 196,398 $ 160,018 $ 26,488 $ 186,506

(i) See “2013 Change in Accounting Policy” for a reconciliation of RioCan’s consolidated earnings.



RioCan’s interest in NOI on a portfolio basis is as follows:

(thousands of dollars)

For the year endedDecember 31, 2013 2012

CanadianPortfolio

USPortfolio


CanadianPortfolio

USPortfolio


REVENUE:

Base rent $ 640,477 $ 129,343 $ 769,820 $ 603,585 $103,490 $ 707,075Percentage rent 4,493 488 4,981 5,663 214 5,877Rent subject to tenants’ sales

thresholds 4,696 – 4,696 4,778 – 4,778Property taxes and operating

cost recoveries 338,005 35,907 373,912 317,602 28,713 346,315

987,671 165,738 1,153,409 931,628 132,417 1,064,045Lease cancellation fees 9,419 368 9,787 13,252 – 13,252

Rental revenue 997,090 166,106 1,163,196 944,880 132,417 1,077,297


Recoverable under tenantleases 347,762 40,921 388,683 325,468 35,710 361,178

Non-recoverable from tenants 13,168 3,456 16,624 12,193 396 12,589

Property operating costs 360,930 44,377 405,307 337,661 36,106 373,767

NOI – RioCan’s interest $ 636,160 $ 121,729 $ 757,889 $ 607,219 $ 96,311 $ 703,530

(i) See “2013 Change in Accounting Policy” for a reconciliation of RioCan’s consolidated earnings.

Canadian Portfolio

RioCan’s interest in NOI on a proportionate basis of its Canadian portfolio for the three months and years ended December 31,2013 and 2012 is as follows:


(decrease)



Base rent $ 160,948 $ 158,491 2% $ 640,477 $ 603,585 6%Percentage rent 1,382 1,936 (29%) 4,493 5,663 (21%)Rents subject to tenants’ sales thresholds 1,174 1,198 (2%) 4,696 4,778 (2%)Property taxes and operating cost recoveries 86,924 82,304 6% 338,005 317,602 6%

250,428 243,929 3% 987,671 931,628 6%Lease cancellation fees 4,554 4,290 6% 9,419 13,252 (29%)

Rental revenue 254,982 248,219 3% 997,090 944,880 6%

Recoverable under tenant leases 88,945 84,958 5% 347,762 325,468 7%Non-recoverable from tenants 2,869 3,243 (12%) 13,168 12,193 8%



NOI as a percentage of rental revenue (excluding theimpact of lease cancellation fees) 65% 66% (1%) 64% 65% (1%)




Same store and same property NOI on proportionate basis for the three months and years ended December 31, 2013 and 2012 forRioCan’s Canadian portfolio are as follows:


(decrease)



Same Store:Number of properties 257 257 – 257 257 –Committed occupancy 96.8% 97.1% (0.3%) 96.8% 97.1% (0.3%)Economic occupancy 95.4% 95.4% 0.0% 95.4% 95.4% 0.0%

Net Operating Income:Same store (i) $ 144,731 $ 140,868 2.7% $ 557,811 $ 548,472 1.7%Redevelopment and intensification (vii) 1,851 2,593 (28.6%) 6,803 8,673 (21.6%)

Same properties (ii) 146,582 143,461 2.2% 564,614 557,145 1.3%Acquisitions – IPP (iv) 8,025 – nm 38,560 – nmDispositions – IPP (v) – 6,593 nm – 16,295 nmGreenfield development (vi) 3,532 2,656 33.0% 16,792 13,983 20.1%

NOI before adjustments 158,139 152,710 3.6% 619,966 587,423 5.5%Lease cancellation fees 3,353 4,290 (21.8%) 8,022 13,139 (38.9%)Straight line rent adjustment 731 2,150 (66.0%) 4,463 4,236 5.4%

NOI from properties under development (viii) 945 868 8.9% 3,709 2,421 53.2%

NOI – RioCan’s interest (iii) $ 163,168 $ 160,018 2.0% $ 636,160 $ 607,219 4.8%

“nm” – not meaningful.(i) See Same Store definition in “Non-GAAP measures” section.(ii) See Same Property definition in “Non-GAAP measures” section.(iii) See “2013 Change in Accounting Policy” for a reconciliation to RioCan’s consolidated earnings.(iv) Acquisitions – Includes NOI on a pro-rated basis for Income Producing Properties (IPP) acquired within the periods being compared.(v) Dispositions – Includes NOI on a pro-rated basis for IPP disposed of in the periods being compared.(vi) Greenfield Development – Includes NOI from Greenfield properties as each individual unit is 100% income producing for two comparable

periods.(vii) Redevelopment and Intensification – Includes NOI from IPP or specific Units within a property being re-positioned or expanded.(viii) NOI from Properties Under Development – Includes NOI from Properties acquired for re-development purposes.

The change in same store NOI is the result of a combination of factors: contractual rent increases, lease renewals and netabsorption of existing space in the portfolio, which is a product of vacancies and the resultant new leasing.

For the three months ended December 31, 2013, same store and same property NOI increased 2.7% and 2.2%, respectively, whencompared to the same period in 2012, primarily due to the following:

• increased NOI as a result of new leasing of approximately $3.6 million;

• renewals and rent steps increased NOI by $1.9 million; and

• re-leasing of space vacated due to bankruptcy and lease cancellations increased NOI by $1.9 million; partially offset by

• reduced NOI due to vacancy caused by normal course turnover of $3.0 million;

• NOI was reduced by $0.5 million from lease cancellations that have occurred in the last 12 months.

During the three months ended December 31, 2013, 164,000 square feet of developments were completed as compared to112,000 square feet during the same period of 2012.

For the three months ended December 31, 2013, lease cancellation fees relate primarily to Rona at RioCan Colossus Centre.Straight line rent in the current period also includes a $1.0 million charge related to the write-off of unamortized straight linerents pertaining to the Rona lease cancellation. Q4 2012 lease cancellation fees relate primarily to Zellers at various locations.

For the year ended December 31, 2013 same store and same property NOI increased by 1.7% and 1.3%, respectively whencompared to the same period in 2012, primarily due to the following:

• increased NOI as a result of new leasing of approximately $11.2 million;



• renewals and rent steps increased NOI by $7.4 million;• re-leasing of space vacated due to bankruptcy and lease cancellations increased NOI by $7.0 million; partially offset by• reduced NOI due to vacancy caused by normal course turnover of $10.8 million;• unanticipated vacancies reduced NOI by $1 million;• NOI was reduced by $2.5 million from lease cancelations that have occurred in the last 12 months;• provision for bad debts and disputed recoveries of $0.7 million;• adjustment to tenant related recoveries of $0.7 million; and• prior year adjustments and other of $0.5 million.

For the year ended December 31, 2013 lease cancellation fees included $3 million for Zellers, and $5 million for Rona Colossus.2012 lease cancellation fees includes $6 million for Zellers, and $3.8 million for AMC at Kennedy Commons.

Same store and same property NOI on a proportionate basis for the Canadian portfolio on a consecutive quarter-over-quarter basisis as follows:


Three months endedDecember 31,

2013September 30,

2013Increase

(decrease)

Same Store:Number of properties 257 257 –Committed occupancy 96.8% 96.7% 0.1%Economic occupancy 95.4% 94.9% 0.5%

Same store (i) $ 153,118 $ 150,325 1.9%Redevelopment and intensification (vii) 1,674 1,775 (5.7%)

Same properties (ii) 154,792 152,100 1.8%Acquisitions – IPP (iv) 636 – nmDispositions – IPP (v) – 459 nmGreenfield development (vi) 2,711 2,904 (6.6%)

NOI before adjustments 158,139 155,463 1.7%Lease cancellation fees 3,353 867 286.7%Straight line rent adjustment 731 1,004 (27.2%)NOI from properties under development (viii) 945 937 0.9%

NOI – RioCan’s interest (iii) $ 163,168 $ 158,271 3.1%

“nm” – not meaningful.(i) See Same Store definition in “Non-GAAP measures” section.(ii) See Same Property definition in “Non-GAAP measures” section.(iii) See “2013 Change in Accounting Policy” for a reconciliation to RioCan’s consolidated earnings.(iv) Acquisitions – Includes NOI on a pro-rated basis for IPP acquired within the periods being compared.(v) Dispositions – Includes NOI on a pro-rated basis for IPP disposed of in the periods being compared.(vi) Greenfield Development – Includes NOI from Greenfield properties as each individual unit is 100% income producing for two comparable

periods.(vii) Redevelopment and Intensification – Includes NOI from IPP or specific Units within a property being re-positioned or expanded.(viii) NOI from Properties Under Development – Includes NOI from Properties acquired for re-development purposes.

Same store and same property NOI increased sequentially by 1.9% and 1.8%, respectively, during the fourth quarter of 2013 ascompared to the third quarter of 2013, primarily due to the following:

• increased NOI as a result of new leasing of approximately $1.3 million;• renewals and rent steps increased NOI by $0.6 million;• re-leasing of space vacated due to bankruptcy or lease cancellations, increased NOI by $0.2 million;• increase in temporary tenant revenue of $0.7 million due to seasonality;• adjustments to prior year recoveries and tenant related recoverable expenses of $0.6 million;

• increase in percentage rent of $0.3 million; partially offset by

• reduced NOI due to vacancy caused by normal course turnover of $0.9 million.



US Portfolio

RioCan’s interest in NOI on a proportionate basis of its US portfolio for the three months and years ended December 31, 2013 and2012 is as follows:

Three months endedDecember 31,

Increase(decrease)

Year endedDecember 31,

Increase(decrease)(thousands of dollars) 2013 2012 2013 2012

Base rent $ 35,050 $ 28,448 23% $ 129,343 $ 103,490 25%Percentage rent 126 – nm 488 214 128%Property taxes and operating cost recoveries 9,371 8,787 7% 35,907 28,713 25%

44,547 37,235 20% 165,738 132,417 25%Lease cancellation fees – – nm 368 – nm

Rental revenue 44,547 37,235 20% 166,106 132,417 25%

Recoverable from tenant leases 10,176 10,688 (5%) 40,921 35,710 15%Non-recoverable from tenants 1,141 59 nm 3,456 396 nm



NOI as a percentage of rental revenue 75% 71% 6% 73% 73% 0%

“nm” – not meaningful.(i) See “2013 Change in Accounting Policy” for a reconciliation to RioCan’s consolidated earnings.

Same store and same property NOI on a proportionate basis for the three months and years ended December 31, 2013 and 2012 forRioCan’s US portfolio are as follows (at RioCan’s interest):

For the three monthsended December 31, Increase

(decrease)

For the yearended December 31, Increase


Base rent – US$ $ 25,706 $ 25,619 0.3% $ 95,048 $ 94,230 0.9%Property tax and operating cost recoveries – US$ 7,741 8,229 (5.9%) 28,964 27,502 5.3%Other – US$ 190 268 (29.1%) 816 1,066 (23.5%)

Rental revenue – US$ 33,637 34,116 (1.4%) 124,828 122,798 1.7%Property operating costs – US$ 9,213 10,110 (8.9%) 35,466 34,452 2.9%

Same store and same properties (i) (ii) – US$ 24,424 24,006 1.7% 89,362 88,346 1.2%Foreign currency translation adjustment 1,006 (220) nm 2,664 49 nm

Same store and same properties (i) (ii) – CDN$ 25,430 23,786 6.9% 92,026 88,395 4.1%Acquisitions – IPP (iv) 6,714 – nm 26,140 – nmDispositions – IPP (v) – 1,775 nm – 4,646 nm

NOI before adjustments 32,144 25,561 25.8% 118,166 93,041 27.0%Lease cancellation fee – – nm 299 – nmStraight-lining of rents 1,086 927 17.2% 3,264 3,270 (0.2%)

NOI – RioCan’s interest (iii) $ 33,230 $ 26,488 25.5% $ 121,729 $ 96,311 26.4%

“nm” – not meaningful.(i) See Same Store definition in “Non-GAAP measures” section.(ii) See Same Property definition in “Non-GAAP measures” section.(iii) See “2013 Change in Accounting Policy” for a reconciliation to RioCan’s consolidated earnings.(iv) Acquisitions – Includes NOI on a pro-rated basis for IPP acquired within the periods being compared.(v) Dispositions – Includes NOI on a pro-rated basis for IPP disposed of in the period being compared.

Same store and same property NOI increased 1.7% for the three months ended December 31, 2013, as compared to the sameperiod in 2012, primarily due to:

• increased NOI as a result of new leasing, increase in renewal rates upon expiry and contractual rent steps; and• operating efficiencies realized as a result of the internalization of property management for RioCan’s US portfolio.



Same store and same property NOI increased 1.2% during the year ended December 31, 2013 as compared to the same period in2012, primarily due to:

• increased NOI as a result of new leasing, increase in renewal rates upon expiry and contractual rent steps;

• operating efficiencies realized as a result of the internalization of RioCan’s US property management; offset by

• adjustments related to the 2013 realty tax assessment in Texas and the corresponding shortfall associated with vacancies.

Same store and same property NOI on a proportionate basis for the US portfolio on a sequential quarter-over-quarter basis is asfollows (at RioCan’s interest):

(thousands of dollars)Three months ended

December 31,2013

September 30,2013

Increase(decrease)

Base rent – US$ $ 28,262 $ 28,327 –Property tax and operating cost recoveries – US$ 8,125 8,458 (3.9%)Other – US$ 196 182 nm

Rental revenue – US$ 36,583 36,967 (1.0%)Property operating costs – US$ 9,656 10,147 (4.8%)

Same store and same properties (i) (ii) – US$ 26,927 26,820 0.4%Foreign currency translation 1,123 1,036 nm

Same store and same properties (i) (ii) – CDN$ 28,050 27,856 0.7%Acquisitions – IPP (iv) 4,076 – nm

NOI before adjustments 32,126 27,856 15.3%Dispositions – IPP (v) 18 1,680 nmLease cancellation fees – 49 nmStraight-lining of rents 1,086 471 nm

NOI – RioCan’s interest (iii) $ 33,230 $ 30,056 10.6%

“nm” – not meaningful.(i) See Same Store definition in “Non-GAAP measures” section.(ii) See Same Property definition in “Non-GAAP measures” section.(iii) See “2013 Change in Accounting Policy” for a reconciliation to RioCan’s consolidated earnings.(iv) Acquisitions – Includes NOI on a pro-rated basis for IPP acquired within the periods being compared.(v) Dispositions – Includes NOI on a pro-rated basis for IPP disposed of in the period being compared.

Same store and same property NOI increased sequentially by 0.4% for the three months ended December 31, 2013 as compared tothe third quarter of 2013 primarily due to operating efficiencies realized as a result of the internalization of US propertymanagement (Northeast & Texas).

Other Revenue

Fees and Other Income

RioCan holds certain of its interests in various real estate investments through joint arrangements and investments accounted forby the equity method. Generally, RioCan provides asset, property management, development and financing services for theCanadian co-ownerships and investments for which the Trust earns market based fees.

The significant sources of fees and other income are as follows (RioCan’s interest):



(decrease)


(decrease)2013 2012 2013 2012

Fees and other income $ 3,167 $ 3,154 $ 16,965 $ 14,548Dividends earned on Cedar shares – 472 482 1,892

Fees and other income before transaction gains 3,167 3,626 (13%) 17,447 16,440 6%Transaction gains – 7,290 – 8,319

Total fees and other income $ 3,167 $ 10,916 (71%) $ 17,447 $ 24,759 (30%)

During the year ended December 31, 2013 fees earned increased as compared to the same period in 2012, primarily due toincreased development activities on joint venture developments in the first quarter.



On February 7, 2013, RioCan disposed of all its shares in Cedar for proceeds of US$48 million.

The transaction gains of $7.3 million in the fourth quarter of 2012 were primarily the result of proceeds from the sale of a Torontodevelopment property in WCNUF I in which RioCan has an interest and the sale of certain marketable securities held as a portfolioinvestment.

Interest Income

Interest income for the three months and year ended December 31, 2013 was $3.8 million and $14.0 million respectively, anincrease from the $3.2 million and $12.0 million in the same periods in 2012, due to higher mortgage receivable balances relatingto mezzanine financing for development activities.

Other Expenses

Interest

The components of interest expense are as follows (RioCan’s interest):



(decrease)


(decrease)2013 2012 2013 2012

Total interest expense – RioCan’s interest $ 66,983 $ 66,011 1% $ 264,477 $ 261,128 1%Capitalized to real estate investments (6,506) (4,464) 46% (21,263) (17,956) 18%

Net interest expense – RioCan’s interest (i) $ 60,477 $ 61,547 (2%) $ 243,214 $ 243,172 0%

Percentage capitalized to real estate investments 10% 7% 8% 7%


The increase in total interest expense during the year ended December 31, 2013, compared to the same period in 2012, resultedprimarily from higher aggregate debt levels during 2013 largely due to increased acquisition activity net of dispositions, partlyoffset by interest savings resulting from refinancing maturing debt at lower interest rates. As at December 31, 2013, the weightedaverage interest rate of RioCan’s debt portfolio was 4.30%, a decrease of 36 basis points from the weighted average rate of 4.66%as at December 31, 2012.

Interest is capitalized to investment properties when they are considered to be in active development. The amounts capitalizedincreased as a result of increased development activity in 2013 as compared to 2012.

General and Administrative and Other Expenses

The components of general and administrative expense and other costs, at RioCan’s interest, are as follows:



(decrease)


(decrease)2013 2012 2013 2012

Non-recoverable salaries and benefits $ 13,796 $ 13,661 1% $ 33,497 $ 31,017 8%Public company costs 736 936 (21%) 4,107 4,114 (0%)Professional fees 2,065 1,786 16% 5,818 5,356 9%Unit based compensation expense 1,585 1,426 11% 5,925 5,171 15%Other general and administrative 3,045 1,427 113% 10,349 6,488 60%Directly capitalized to properties under development and

tenant installations costs (i) (4,602) (3,844) 20% (14,088) (11,500) 23%

General and administrative expense – RioCan’s interest (ii) $ 16,625 $ 15,392 8% $ 45,608 $ 40,646 12%

Demolition costs 850 813 5% $ 3,173 $ 2,210 44%Aborted deal costs 551 50 nm 1,272 1,280 (1%)Transaction-related expense (recovery) (1,228) 1,065 (215%) 3,840 1,795 114%Foreign exchange (gain) loss 65 11 nm 170 (86) nm

Other costs – RioCan’s interest (ii) $ 238 $ 1,939 (88%) $ 8,455 $ 5,199 63%

General and administrative expense:As a percentage of rental revenue 1.5% 1.5% (0.0%) 4.1% 3.9% 0.2%As a percentage of total assets 0.1% 0.1% – 0.3% 0.3% 0.0%

(i) Amounts capitalized to properties under development and tenant installation costs are primarily comprised of salaries and benefits directlyrelated to development and leasing activities at the properties.



(ii) See “2013 Change in Accounting Policy” for a reconciliation to RioCan’s consolidated earnings.“nm” – not meaningful

During the fourth quarter 2013, general and administrative expenses increased $1.2 million or 8% compared to the same period in2012 primarily mainly due to a favourable sales tax recovery in the prior period and higher costs due to RioCan’s new Texasplatform as of October 2013.

Transaction costs decreased in Q4 2013 by $2.3 million primarily as a result of a foreign currency gain realized upon thedissolution of certain of the Trust’s equity method investments related to its US operations. This exchange gain was partially offsetby higher selling commissions and legal costs on Canadian and US property dispositions during the current quarter.

During the year ended December 31, 2013, general and administrative costs increased $5.0 million or 12% over 2012. Othergeneral and administrative costs increased $3.9 million mainly due to a favourable sales tax recovery in 2012 and higher overallincreases in administrative costs due to the growth of RioCan’s US asset base and the establishment of the US platforms in NewJersey and Texas.

Transaction costs increased $2.0 million year-over-year mainly due to higher legal and selling costs related to a substantialincrease in the number of property dispositions completed in 2013 compared to 2012, partially offset by a $4 million realizedforeign currency transaction gain related to the dissolution of two of the Trust’s joint arrangements in the US.

In addition, RioCan expects to complete a significant information technology initiative during the first half of 2014, whichmanagement expects will result in higher overall platform expenditures.

ASSET PROFILE

As at December 31, 2013, RioCan had ownership interests in a portfolio of 324 shopping centres comprising 71.2 million squarefeet (RioCan’s share being 49.2 million square feet), compared to 333 shopping centres comprised of 74.5 million square feet(RioCan’s share being 49.5 million square feet) at December 31, 2012. In addition, RioCan had ownership interests in developmentprojects at December 31, 2013 that will, upon completion, comprise approximately 10.5 million square feet, of which RioCan’sownership interest will be approximately 4.9 million square feet.

INVESTMENT PROPERTY

(millions of dollars) 2013 2012

Investment property (RioCan’s interest) is comprised of:

Income properties $ 12,490 $ 11,857

Properties under development 583 440Properties held for resale 46 47

Investment property – RioCan’s interest (i) $ 13,119 $ 12,344

(i) See “2013 Change in Accounting Policy” for a reconciliation to RioCan’s consolidated investment property.

Change in the Fair Value of Investment Property During 2013

Of the $775 million increase in investment property (RioCan’s interest) since December 31, 2012, the fair value gain for the yearended December 31, 2013, was $229 million of which $223 million relates to income properties and $6 million relates to propertiesunder development. During this period, the capitalization rates used to value the portfolio are estimated to have decreased by10 basis points.

The table below provides the fair value and weighted average capitalization rate split between Canada and US:

December 31,2013

December 31,2012

(in millions, except percentages)

As at

Weightedaverage

Cap. rate* Value

WeightedAverage

Cap. Rate* Value

Canada 5.81% $ 11,005 5.91% $ 10,626US 6.40% 2,114 6.58% 1,718

Total 5.91% $ 13,119 6.01% $ 12,344

* at RioCan’s interest including its interest in equity accounted for joint ventures.



During 2013, the weighted average capitalization rates in Canada and the US decreased slightly by 10 and 18 basis pointsrespectively, largely due to the change in the composition of the portfolio through acquisition and disposition activity and increasedtrading prices in the markets. In Canada, the rates decreased from 5.91% to 5.81%, and in the US from 6.58% to 6.40% on ayear-over-year basis. The associated fair value gains in Canada and the US were $132 million and $97 million, respectively (each atRioCan’s interest).

The table below provides details of the average capitalization rates (weighted based on stabilized NOI) and ranges for each retailclass and market category, at RioCan’s interest, as at December 31, 2013.

Canadian Portfolio

Overall Portfolio Primary Market Secondary Market

Retail Class

WeightedAverage

Cap. Rate* Range

WeightedAverage

Cap. Rate* Range

WeightedAverage

Cap. Rate* Range

Enclosed Shopping Centre 6.03% 5.0% – 9.0% 5.75% 5.0% – 7.0% 6.29% 5.1% – 9.0%Grocery Anchored Shopping Centre 5.97% 5.2% – 8.5% 5.77% 5.2% – 7.0% 6.40% 5.8% – 8.5%Mixed Use 5.81% 4.9% – 8.0% 5.57% 4.9% – 7.3% 7.18% 6.3% – 8.0%New Format Retail 5.66% 5.1% – 7.5% 5.47% 5.1% – 6.8% 6.08% 5.3% – 7.5%Non-Grocery Anchored Centre 6.44% 5.3% – 8.8% 6.03% 5.3% – 7.3% 6.98% 5.8% – 8.8%Urban Retail 5.24% 4.8% – 5.5% 5.24% 4.8% – 5.5% n/a n/a – n/a

5.81% 4.8% – 9.0% 5.58% 4.8% – 7.3% 6.29% 5.1% – 9.0%

* at RioCan’s interest

US Portfolio

Overall Portfolio North East** Texas

Retail Class

WeightedAverage

Cap. Rate* Range

WeightedAverage

Cap. Rate* Range

WeightedAverage

Cap. Rate* Range

Grocery Anchored Shopping Centre 6.31% 5.5% – 7.5% 6.30% 5.5% – 7.3% 6.34% 6.0% – 7.5%New Format Retail 6.41% 5.5% – 7.3% 6.53% 6.0% – 7.3% 6.35% 5.5% – 7.0%Non-Grocery Anchored Centre 7.50% 7.5% – 7.5% 7.50% 7.5% – 7.5% n/a n/a – n/a

6.40% 5.5% – 7.5% 6.47% 5.5% – 7.5% 6.35% 5.5% – 7.5%

* at RioCan’s interest**Area includes Connecticut, Maryland, Massachusetts, New Jersey, New York, Rhode Island, Pennsylvania, West Virginia, Virginia and New

Hampshire.



INCOME PROPERTIES

(millions of dollars)Year ended December 31, 2013 2012

Consolidated balance, beginning of year $ 11,278 $ 9,511Acquisitions:

Canada (i) 601 552US (i) 228 217

Reclassification on dissolution of equity accounted investments 586 –Changes in fair values of income properties 215 857Capital expenditures 28 17Dispositions (709) (71)Tenant installation costs 33 35Transfers from properties under development 123 159Transfers to properties under development (58) (13)Foreign currency translation 105 (20)Other 3 34

Consolidated balance, end of year $ 12,433 $ 11,278Adjustment for RioCan’s interest 57 579

Balance – RioCan’s interest, end of year (ii) $ 12,490 $ 11,857

(i) Comprised of the purchase price including closing costs and other acquisition related costs.(ii) See “2013 Change in Accounting Policy” for a reconciliation to RioCan’s consolidated balance sheet.

Acquisitions During 2013

During the three months ended December 31, 2013, RioCan completed acquisitions of interests in 16 income propertiesaggregating $274 million, representing RioCan’s share of the purchase price and comprised of approximately 1.3 million additionalsquare feet (including earn-out space). Included in these acquisitions during the quarter were three properties related to theDunhill dissolution for a total purchase price of US$57 million as well as eight properties related to the RPAI dissolution for a totalpurchase price US$97 million.

During the year ended December 31, 2013, RioCan completed acquisitions of interests in 32 income properties aggregating$849 million, representing RioCan’s share of the purchase price comprised of approximately 3.0 million additional square feet(including earn-out space).



Property name andlocation

Capitali-zation

rate

RioCan’spurchase

price (i)(millions)

NLAat RioCan’s

interest(in thousands

of sqft)

Weightedaveragein place

rent

Assetclass(ii)

YearBuilt

%Leased

WeightedAverage

RemainingLeaseTerm

(years) (iii)

Largest tenant(s) andNLA (iv)

(thousands of sqft)

RioCan’sownership

interest

Q4 2013: CANADA

Eagles Landing, Vaughan,ON

6.2% $ 56 177 $ 21.34 GA 2009 93% 7 Metro (48),Dollarama (10)

100%

491 College Street,Toronto, ON (v)

0.8% 4 15 – URB 1910 0% – - 50%

Canada – Q4 2013Acquisitions

5.8% $ 60 192 $ 19.67

Q4 2013: UNITED STATES

Acquisitions as part of thedissolution with Dunhill:

Louetta Central, Houston,TX (additional 15.0%)

6.4% $ 5 27 $ 12.49 NGA 2000 100% 5 Kohls (87),Ross Dress (30)

100%

Las Palmas Marketplace,El Paso, TX (additional36.6%)

6.4% 38 233 10.40 NFR 2001 97% 8 Lowes (179), Kohls(87)

68.3%

Lincoln Square, Arlington,TX (additional 18.12%)

6.9% 16 86 14.07 NFR 1983 89% 4 Stein Mart (45), BestBuy (30)

100%

Total acquisitions as partof the dissolution withDunhill

6.5% 59 346 10.50

Acquisitions as part of thedissolution withSterling:

Ingram Hills, San Antonio,TX (additional 10%)

7.8% 1 8 8.79 GA 1978 100% 4 La Fiesta (43),Dollar General (11)

100%

Cinco Ranch, Katy(Houston), TX (additional20%)

6.0% 6 20 15.83 NFR 2000 100% 4 Homegoods (26),Michael’s (21)

100%

Total acquisitions as partof the dissolution withSterling

6.2% 7 28 13.82

Other acquisitions in Q42013

RPAI Unwind, TX(additional 20% in eightproperties)

6.9% 100 513 14.36 Various 2003(Avg) 95% 6 Safeway (64), HobbyLobby (61), JC Penny(98), Walmart (206),HEB (80), Kroger (61)

100%

Las Palmas Marketplace,El Paso, TX (additional31.7% from Kimco)

6.4% 32 202 10.40 NFR 2001 97% 8 Lowes (179), Kohls(87), HEB (62)

100%

Beekman Stop & Shop,Beekman, NY

6.2% 16 40 23.75 GA 2010 100% 7 Stop N Shop (40) 100%

US – Q4 2013 Acquisitions 6.7% $ 214 1,129 $ 12.79

Total Q4 2013 Acquisitions 6.5% $ 274 1,321 $ 13.79

Q3 2013: CANADA

Colossus Centre, Vaughan,ON (additional 20%)

5.5% $ 40 116 $ 19.62 NFR 2000 100% 6 Cineplex (101),Marshalls (31),HomeSense (23),Costco*

100%


5.5% $ 40 116 $ 19.62




Capitali-zation

rate

RioCan’spurchase

price (i)(millions)

NLAat RioCan’s


of sqft)


rent

Assetclass(ii)

YearBuilt

%Leased

WeightedAverage

RemainingLeaseTerm

(years) (iii)


(thousands of sqft)

RioCan’sownership

interest


Acquisitions as part of thedissolution with Dunhill:

Timber Creek Crossing,Dallas, TX (additional20.0%)

5.8% $ 17 95 $ 11.32 NFR 2011 100% 14 Walmart (157), Sam’sClub (157), JC Penney(104)

100%

Arbor Park, San Antonio, TX(additional 15.0%)

6.3% 4 21 13.37 GA 1998 99% 4 Ross Dress (30),Michaels (24), OfficeMax (24)

100%

Las Colinas Village, Irving,TX (additional 15.0%)

6.8% 5 16 21.75 NFR 2001 100% 4 Staples (24) 100%

Total acquisitions as part ofthe dissolution withDunhill

6.0% 26 132 12.92

Other acquisitions in Q32013

First Colony Center,California, MD

6.3% 21 98 13.79 GA 2000 98% 4 Giant Supermarket (47),Target*, Lowes*

100%

Alamo Ranch – Del Tacopad, San Antonio, TX

6.0% 2 3 18.73 NFR 2008 99% 6 Dicks (50),Best Buy (45),Ross Dress for Less (30)

100%

Great Southwest Crossing –Kroger Supermarket,Grand Prairie, TX

6.8% 7 61 12.93 GA 1998 100% 5 Kroger (61),Office Depot (21),PetSmart (18)

100%

US – Q3 2013 Acquisitions 6.2% $ 56 294 $ 13.28

Total Q3 2013 Acquisitions 5.9% $ 96 410 $ 15.07

Q2 2013: CANADA

Oakville Place, Oakville, ON 5.0% $ 259 458 $ 25.26 ENC 1981/2004/2008

100% 2.9 The Bay (199) , Sears(104), H&M (20)

100%

Burlington Mall, Burlington,ON

5.0% 103 319 16.59 ENC 1968/2001/2004/2006

99% 2.0 Canadian Tire (130),Target (122),Goodlife Fitness (58)

50%

South Cambridge Centre,Cambridge, ON (vi)

6.7% 35 190 12.95 GA 1978/2005

100% 1.1 Zehrs (115), HomeHardware (22), LCBO(10)

100%

March Road, Ottawa, ON(additional 50%)

5.3% 21 54 21.32 GA 2012 100% 2.7 Sobeys (51), Rexall(15), Dollarama (9)

100%

Shoppers City East, Ottawa,ON (additional 35.2%)

5.6% 10 52 12.06 NGA 1962/1975/1998

100% 0.2 Giant Tiger (35),Staples (20),Shoppers Drug Mart(16)

62.8%

Dufferin Plaza, Toronto, ON 5.4% 27 65 22.96 NGA 1966/1978/2006/2007

100% 7.3 Staples (20), TD Bank(15), Cara (8)

100%


5.2% $ 455 1,138 $ 18.62


Timber Creek Crossing: Twopads, Dallas, TX

5.6% $ 5 4 $ 60.28 NFR 2013 100% 10.5 Starbucks (3), CapitalOne (0.5)

100%


Total Q2 2013 Acquisitions 5.2% $ 460 1,142 $ 18.77




Capitali-zation

rate

RioCan’spurchase

price (i)(millions)

NLAat RioCan’s


of sqft)


rent

Assetclass(ii)

YearBuilt

%Leased

WeightedAverage

RemainingLeaseTerm

(years) (iii)


(thousands of sqft)

RioCan’sownership

interest

Q1 2013: CANADA

Hunt Club phase I, Ottawa,ON

6.0% 16 145 7.82 NGA 2012 100% 48.8 Lowes (128) 100%


6.0% $ 16 145 $ 7.82


Monroe Marketplace (TJMaxx unit), Selinsgrove,PA

7.6% 3 24 9.30 NFR 2008 100% 14.1 TJ Maxx (24) 100%


Total Q1 2013 Acquisitions 6.3% $ 19 169 $ 8.03

2013 Acquisitions:

Canada 5.3% $ 571 1,591 $ 17.84

US 6.6% 278 1,451 12.96

Total 2013 Acquisitions 5.7% $ 849 3,042 $ 15.51

(i) Excludes closing costs and other acquisition related costs.

(ii) “GA” – Grocery Anchored centre; “NGA” – Non Grocery Anchored centre; “NFR” – New Format Retail; “ MIX” – Mixed use retail; “OUT” –Outlet mall; “ENC” – Enclosed shopping mall; “URB” – Urban retail

(iii) Weighted average based on gross rental revenue

(iv) NLA acquired includes earn-out space

(v) 491 College Street: Property was acquired at land value; the extent of development plans are being contemplated

(vi) South Cambridge Centre: Prior to acquisition, an existing tenant had the right embedded in its lease to purchase the centre. In addition to thepurchase price paid to the vendor, RioCan paid $7 million to this tenant to remove the clause from the lease.

* Shadow anchor

Further details around RioCan’s current quarter income property acquisitions are as follows.

Canada

• On November 22, 2013 RioCan acquired a 100% interest in Eagles Landing, located in Vaughan, Ontario, for a purchase price of$56 million, which equates to a capitalization rate of 6.2%. Eagles Landing is a 177,031 square foot grocery anchored shoppingcentre anchored by Yummy Market, with other tenants such as The Beer Store, TD Bank and Starbucks. The property wasacquired free and clear of financing.

• On December 20, 2013, RioCan completed its acquisition of a 50% interest in 491 College Street West in Toronto, Ontario. Thisacquisition was completed as part of the RioCan and Allied joint venture. 491 College Street West is a 15,170 square foot urbanretail building, not currently tenanted. The purchase price for the property was $3.9 million at RioCan’s interest, representingprimarily land value. While the extent of redevelopment has not yet been finalized, RioCan’s plan contemplates developing thestructure at 491 College Street West into a three storey commercial destination with retail and commercial uses. The propertywas acquired free and clear of financing.

US

• On October 2, 2013 RioCan acquired an additional 31.7% interest in Las Palmas Marketplace from Kimco, bringing RioCan’sinterest in the property to 100%. The purchase price for the 31.7% interest was US$32 million, which equates to a capitalizationrate of 6.4%. A 36.6% interest in the property was also acquired from Dunhill as part of the Dunhill joint venture dissolution. LasPalmas Marketplace is the dominant open-air regional shopping centre in El Paso, Texas. The property boasts architecturalappeal, a good location and a strong tenant mix, which includes Lowe’s and Kohl’s, amongst others on ground leases. The centreis shadow-anchored by a 20-screen Cinemark Theatre. In connection with the acquisition, RioCan assumed US$15 million ofmortgage financing carrying an interest rate of 5.4%, with a maturity date of April 2022.

• On October 8, 2013, RioCan acquired a 100% interest in Beekman Stop & Shop located in Beekman, New York at a purchaseprice of US$16 million, which equates to a capitalization rate of 6.2%. Beekman Stop & Shop is a 40,416 square footsingle-tenant building occupied by Stop & Shop grocery store. The property was acquired free and clear of financing.



US – Sterling dissolution

• On December 10, 2013 RioCan acquired an additional 10% interest in Ingram Hills Shopping Center from partner Sterling,bringing RioCan’s ownership interest in the property to 100%. The purchase price for the additional 10% interest wasUS$1 million, at a capitalization rate of 7.8%. Ingram Hills Shopping Center is an 80,397 square foot infill grocery anchoredneighbourhood retail centre located in San Antonio, Texas. The property is anchored by a 43,279 square foot La Fiesta which is ahigh volume Hispanic grocer. Other notable tenants include Dollar General, Little Caesars and Chase Bank. In connection withthe acquisition, RioCan assumed Sterling’s share of the mortgage financing in the amount of US$0.4 million, bearing interest at6.10% and maturing in August 2017.

• On December 11, 2013 RioCan acquired an additional 20% interest in Cinco Ranch from partner Sterling, bringing RioCan’sownership interest in the property to 100%. The purchase price for the additional 20% interest was US$5 million, at acapitalization rate of 6.0%. Cinco Ranch is a 271,761 square foot retail power centre. In addition to the strong junior anchortenant presence provided by HomeGoods, Michaels and OfficeMax, the property sits on both sides of an approximately174,000 square foot Super Target which owns its own parcel. Other tenants include national and regional retailers such asMattress Giant, RadioShack and Supercuts. In connection with the acquisition, RioCan assumed Sterling’s share of the mortgagefinancing in the amount of US$2 million, bearing interest at 7.30% and maturing in May 2019.

US – Dunhill dissolution

• The dissolution of RioCan’s joint venture arrangement with Dunhill was completed during the third quarter and October of 2013on a property-by-property basis. RioCan and Dunhill had an existing portfolio comprised of six assets, all within Texas. Theownership interests varied between each of the six assets and further information is provided in the table below. The sixproperties comprise approximately two million square feet of conventional retail space. Under the terms of the agreement,Dunhill conveyed to RioCan its interest in each of the six properties for a purchase price of US$83.5 million, representing aweighted average capitalization rate of 6.4%. RioCan assumed Dunhill’s share of existing mortgage financing on the sixproperties aggregating approximately US$42 million at a weighted average rate of 5.0%. Along with full ownership of the assets,RioCan assumed leasing and management duties on the six properties. Three of the six transactions for an amount ofUS$26 million closed in the third quarter and the remaining three transactions closed in October 2013.

The following table provides a summary of the properties previously owned by the RioCan and Dunhill joint venture, including theclosing date for RioCan’s acquisition of each property.

Property LocationDunhill’sInterest

RioCan’sInterest

PropertyNLA

at 100%(thousands)

Closingdate

1 Timber Creek Crossing Dallas, TX 20.00% 80.00% 474 14 Aug 20132 Arbor Park San Antonio, TX 15.00% 85.00% 140 13 Sep 20133 Las Colinas Village Irving, TX 15.00% 85.00% 105 13 Sep 20134 Louetta Central Houston, TX 15.00% 85.00% 180 1 Oct 20135 Las Palmas Marketplace* El Paso, TX 36.60% 31.70% 637 2 Oct 20136 Lincoln Square Arlington, TX 18.12% 81.88% 472 9 Oct 2013

2,008

* Remaining interest acquired from Kimco in October 2013.

US – RPAI dissolution

• RioCan announced on May 6, 2013 that it had entered into an agreement to dissolve its joint venture arrangement with RPAI. Thetransaction closed on October 1, 2013. Since 2010, RioCan and RPAI had amassed a high quality portfolio of 13 properties inTexas, which were owned 80% by RioCan and 20% by RPAI. Under the terms of the dissolution, RPAI conveyed its 20% managinginterest in eight properties to RioCan, for a purchase price of US$96.6 million. RioCan assumed RPAI’s share of the existingmortgage financing on five of the properties aggregating to US$41.8 million. In turn, RioCan conveyed its 80% interest in theremaining five properties to RPAI for a purchase price of US$102.8 million. RPAI assumed RioCan’s portion of the mortgagefinancing of US$54.3 million. RioCan took over the leasing and management functions of the properties on closing.



The following table provides a summary of the properties previously owned by the RioCan and RPAI joint venture that wereacquired by RioCan. The dissolution was completed on October 1, 2013 with RioCan acquiring RPAI’s 20% interest in each of thefollowing properties.

PropertyLocation in

Texas

PropertyNLA

at 100%(thousands)

1 1890 Ranch Austin 4872 Southpark Meadows I & II Austin 9233 Great Southwest Crossing Grand Prairie 1684 Suntree Square Southlake 995 Bear Creek Shopping Center Houston 886 Riverpark Shopping Center I & II Sugar Land 2537 Alamo Ranch San Antonio 4248 Bird Creek Crossing Temple 125

2,567

Income Property Acquisition Completed Subsequent to December 31, 2013

Subsequent to year end, RioCan completed the acquisition of the remaining 40% interest in Whiteshield Plaza, bringing RioCan’sinterest in the property to 100%. Whiteshield Plaza is a 156,000 square foot grocery anchored shopping centre located in Toronto,Ontario. The additional 40% interest was acquired at a purchase price of $11 million, representing a capitalization rate of 5.5%. Inconnection with the acquisition, RioCan assumed outstanding mortgage financing of $8 million, bearing interest at Banker’sAcceptance plus 1.85%, maturing in September 2015.

Income Property Acquisitions under Contract

Firm Acquisitions

RioCan has one income property acquisition under firm contract in the US where conditions have been waived that, if completed,represents an acquisition of US$9 million at RioCan’s interest, at a capitalization rate of 8.0%.

US

• The acquisition of a 100% interest in a 64,329 square foot single-tenant building at Riverpark Shopping Center in Sugar Land(Houston), Texas. The purchase price for the building, which is tenanted by Gander Mountain, is US$9 million, equating to acapitalization rate of 8.0%. The building will be acquired free and clear of financing and the acquisition is expected to close in thefirst half of 2014. In 2010, RioCan acquired an 80% interest in Riverpark Shopping Center, which was later increased to a 100%interest as part of the RPAI dissolution on October 1, 2013. Riverpark Shopping Center is a 375,599 square foot new format retailcentre divided into two phases. Phase I is anchored by an 80,400 square foot HEB Grocery while Phase II is anchored by a 38,000square foot LA Fitness and a 15,000 square foot Dollar Tree. There is also a strong mix of national tenants to complement theanchors including Walgreens, Bank of America and Starbucks.

Conditional Acquisitions

RioCan has one income property under contract in Canada where conditions have not yet been waived that, if completed,represents an acquisition of $3 million, at RioCan’s interest. The transaction is undergoing due diligence procedures and whileefforts will be made to complete the transactions, no assurance can be given.



Acquisitions During 2012

LocationCapitalization

rateRioCan’s purchase price

(i) (millions)NLA (in sqft) at RioCan’s interest

(ii) (thousands)

Canada 5.7% $ 98 274US 6.7% 280 1,743

Fourth Quarter 2012 Acquisitions 6.4% $378 2,017

Canada 5.5% 347 584US 7.8% 22 89

Third Quarter 2012 Acquisitions 5.7% $369 673

Canada 6.4% 34 179US 6.9% 53 305

Second Quarter 2012 Acquisitions 6.7% $ 87 484

Canada 6.2% 64 220US 6.7% 28 107

First Quarter 2012 Acquisitions 6.4% $ 92 327

2012 Acquisitions:

Canada 5.7% $543 1,257

USRetail Properties 6.7% 28 107

Kimco 6.7% 46 233

Sterling 8.0% 7 72

Dunhill 7.1% 70 361

Without Partner 6.6% 232 1,471

6.8% 383 2,244

2012 Acquisitions 6.1% $926 3,501

(i) Excludes closing costs and other acquisition related costs(ii) NLA acquired includes earn-out space



Dispositions During 2013

Canadian Disposition Activity

As a further means of raising and re-cycling capital, the Trust evaluates the sale of selected assets as part of a process of activelymanaging the portfolio and a means of increasing the portfolio weighting to the urban markets in Canada.

During the three months ended December 31, 2013, RioCan completed dispositions of five income properties aggregating$226 million at a weighted average sales capitalization rate of 5.5%, comprised of approximately 819,000 square feet.

During the year ended December 31, 2013, RioCan completed dispositions of 13 income properties aggregating $616 million at aweighted average sales capitalization rate of 5.9%, comprised of approximately 2.8 million square feet.

Property name and location

Salescapitalization

rate

RioCan’ssales price

(millions)

Debtassociated

withproperty

(millions)

GLAdisposed ofat RioCan’s


of sqft)Asset

class (i)

Ownershipinterest

disposed ofby RioCan

Q4 2013

Oakridge Centre – The Beer Store, London, ON (ii) 9.5% $ 1 $ – 6 GA 100%Centre de la Concorde, Laval, QC 8.3% 9 – 109 NFR 100%Coulters Mill Marketplace, Thornhill, ON 5.6% 21 – 74 NGA 100%Enterprise / Brick Plaza / United Furniture,

Windsor, ON 6.1% 2 – 49 NGA 100%Quartier DIX30, Montréal, PQ (iii) 5.4% 193 93 581 NFR 50%

Total Q4 2013 Dispositions 5.5% 226 93 819

Q3 2013

Port Elgin Shopping Centre, Port Elgin, ON 7.7% 4 – 47 NFR 100%Dougall Plaza, Windsor, ON 9.6% 4 – 127 GA 100%Midtown Mall, Oshawa, ON 11.2% 8 – 137 GA 100%

Total Q3 2013 Dispositions 9.9% 16 – 311

Q2 2013

RioCan Centre Thunder Bay, Thunder Bay, ON 5.9% 63 11 333 NFR 100%Mega Centre Lebourgneuf, Quebéc City, PQ 6.0% 108 30 457 NFR 100%RioCan Ste. Foy, Quebéc City, PQ 6.0% 131 – 526 NFR 100%Wheeler Park, Moncton, NB 6.0% 62 26 272 NFR 100%

Total Q2 2013 Dispositions 6.0% 364 67 1,588

Q1 2013

St. Clair Beach, Windsor, ON 7.8% 10 – 76 GA 100%

Total Q1 2013 Dispositions 7.8% 10 – 76

Total 2013 Dispositions 5.9% $ 616 $ 160 2,794

(i) “GA” – Grocery Anchored Centre; “NGA” – Non Grocery Anchored Centre; “NFR” – New Format Retail(ii) Oakridge Centre: The sale of the Beer Store unit took place as another tenant at the centre exercised an option in its lease to acquire the unit(iii) Quartier DIX30: The property, which is located in one of RioCan’s six target markets, was not sold as part of RioCan’s objective of paring its

secondary market portfolio

Subsequent to year end, RioCan sold two income properties at a sales price of $48 million, comprised of Mega Centre Beauport inQuebec City, Quebec, a 181,000 square foot new format retail centre at a sales price of $47 million representing a capitalizationrate of 6.1% and Madawaska Centre in St. Basile, New Brunswick, a 272,000 square foot property at a sales price of $1 millionbased on land value. Both properties were free and clear of financing at the time of sale.

Income Property Dispositions under Contract

RioCan has one property disposition under firm contract where conditions have been waived pursuant to a purchase and saleagreement at a sales price of $5 million, a price determined on a per acre basis according to an existing agreement. Thedisposition pertains to a 52,000 square foot Canadian Tire unit at Millcroft Shopping Centre, which is a 370,000 square foot newformat retail centre located in Burlington, Ontario. There is no debt associated with the property.



Additionally, RioCan is in the process of marketing for sale three land parcels with a total fair value as at December 31, 2013calculated in accordance with IFRS of approximately $7 million. The land parcels are free and clear of financing. RioCan is underno obligation to proceed with the proposed dispositions which, if completed, will be done to facilitate its objective of paring itsportfolio and focusing on major markets.

US Disposition Activity

On October 1, 2013, RioCan completed the dissolution of its joint venture agreement with RPAI, which had been announced onMay 6, 2013. Under the terms of the dissolution, RioCan conveyed its 80% interest in five properties to RPAI for a purchase price ofUS$103 million. RPAI assumed RioCan’s portion of the mortgage financing of US$54 million.

The following table provides a summary of the properties previously owned by the RioCan and RPAI joint venture that wereacquired by RPAI. The dissolution was completed on October 1, 2013 with RPAI acquiring RioCan’s 80% interest in each of thefollowing properties.

PropertyLocationin Texas

PropertyNLA

at 100%(thousands)

1 Southlake Corners Southlake 1352 Coppell Town Center Coppell 913 Sawyer Heights Houston 1084 New Forest Crossing Houston 1485 Cypress Mill Plaza Houston 116

598

Property Ownership by Geographic Area (square feet)

At December 31, 2013

Provincial

RioCan’sInterest NLA

Partners’interests

Retailer ownedanchors Total Site NLA

Ontario Central 17,699,033 3,892,506 3,210,684 24,802,223Ontario East 5,218,701 1,029,078 1,257,045 7,504,824Ontario West 2,264,494 80,694 565,187 2,910,374

Total Ontario 25,182,227 5,002,278 5,032,916 35,217,421Quebec 5,699,394 861,561 868,053 7,429,008Alberta 4,205,304 1,969,539 2,175,151 8,349,994British Columbia 2,486,667 1,475,554 426,074 4,388,295New Brunswick 804,441 134,565 95,000 1,034,005Saskatchewan 267,496 – – 267,496Newfoundland 212,235 – – 212,235Manitoba 265,415 201,568 92,604 559,587Prince Edward Island 166,273 166,273 – 332,545Nova Scotia 68,995 68,995 – 137,990USA 9,881,612 58,224 3,354,708 13,294,544

Income Producing Properties 49,240,058 9,938,556 12,044,506 71,223,120

Properties Under Development 4,910,337 4,304,663 1,285,000 10,500,000

Total 54,150,395 14,243,219 13,329,506 81,723,120



Six High Growth Markets

RioCan’sinterests NLA


Retailer ownedanchors Total site NLA

Calgary, Alberta 2,162,674 754,311 1,265,971 4,182,956Edmonton, Alberta 1,313,631 1,183,521 757,680 3,254,832Montreal, Quebec 3,365,902 683,767 149,553 4,199,222Ottawa, Ontario (i) 3,356,419 758,305 1,012,000 5,126,724Toronto, Ontario (ii) 13,422,647 3,081,357 2,172,609 18,676,613Vancouver, British Columbia (iii) 1,334,463 1,053,180 373,074 2,760,717

Income Producing Properties 24,955,736 7,514,441 5,730,887 38,201,064

Properties Under Development 4,419,337 4,304,663 1,043,000 9,767,000

Total 29,375,073 11,819,104 6,773,887 47,968,064

Notes:(i) Area extends from Nepean and Vanier, to Gatineau, Quebec.(ii) Area extends north to Newmarket, west to Burlington and east to Ajax.(iii) Area extends east to Abbotsford.

Portfolio Geographic Diversification

At December 31, 2013

Area

Percentage ofannualized

rental revenueOccupancy

percentage

Percentage ofarea

occupied byanchor and

nationaltenants

Percentage ofannualized

rentalrevenue from

anchor andnationaltenants

Ontario Central 36.1% 42.2% 97.9% 85.4% 88.8%Ontario East 10.6% 10.4% 96.6% 90.1% 86.8%Ontario West 4.6% 4.1% 97.6% 90.9% 88.7%

Total Ontario 51.3% 56.7% 97.6% 86.9% 88.4%Quebec 11.6% 10.1% 97.0% 82.3% 82.5%Alberta 8.5% 10.3% 99.0% 85.3% 81.5%British Columbia 5.1% 5.4% 96.7% 88.5% 83.6%New Brunswick 1.6% 0.9% 65.5% 87.7% 82.8%Saskatchewan 0.5% 0.4% 88.2% 93.2% 81.0%Newfoundland 0.4% 0.3% 97.2% 91.2% 85.9%Manitoba 0.5% 0.5% 94.5% 79.2% 73.2%Prince Edward Island 0.3% 0.3% 99.3% 97.3% 93.8%Nova Scotia 0.1% 0.1% 100.0% 97.0% 91.9%USA 20.1% 15.0% 96.8% 89.3% 85.7%

Total Portfolio 100.0% 100.0% 96.9% 86.9% 86.2%

Capital Expenditures on Income Properties

Capital spending for new property acquisitions, greenfield developments and the redevelopment of RioCan’s existing properties tocreate and/or extract additional value are expected to improve the overall earnings capacity of the property portfolio. RioCanconsiders such amounts to be investing activities. As a result, RioCan does not expect such expenditures to be funded from cashflows from operating activities and does not consider such amounts as a key determinant in setting the amount that is distributedto its unitholders.

Productive capacity maintenance capital expenditures refer to capital expenditures that are necessary to maintain the existingearnings capacity of the Trust’s property portfolio and are dependent upon many factors, including, but not limited to the age and



location of the income properties. As at December 31, 2013, the estimated weighted average age of the income property portfolio is19.9 and 11.3 years for the Canadian and US portfolios respectively (December 31, 2012 – 17.4 and 11.1 years for the Canadian andUS portfolios respectively). Productive capacity maintenance capital expenditures are considered in determining RioCan’scalculation of AFFO, which influences amounts that are distributed to Unitholders, primarily consist of:

• Leasing commissions and tenant improvements

RioCan’s portfolio requires ongoing investments of capital for tenant installation costs related to new and renewal tenant leases.Tenant installation costs consist of tenant improvements and other leasing costs, including certain costs associated withRioCan’s internal leasing professionals, primarily compensation costs.

Investments of capital for tenant installation costs for RioCan’s income properties are dependent upon many factors, including,but not limited to, the lease maturity profile, unforeseen tenant bankruptcies and the location of the income properties.

• Recoverable and non-recoverable maintenance capital expenditures

RioCan also invests capital on a continuous basis to physically maintain the income properties. Typical costs incurred are forroof replacement programs and the resurfacing of parking lots. Tenant leases generally provide for the ability to recover asignificant portion of such costs from tenants over time as property operating costs. RioCan expenses or capitalizes theseamounts to income properties, as appropriate.

As the majority of the portfolio is located in Canada and the northeastern US, the majority of such activities occur when weatherconditions are favourable. As a result, these expenditures are not consistent throughout the year.

Expenditures for leasing commissions and tenant improvement and recoverable and non-recoverable maintenance capitalincluded in consolidated income properties are as follows:


Estimatedexpenditures

for 2014Normalized

expenditures

Leasing commissions and tenant improvements $ 28 34 $ 28 $ 24 to $30Maintenance capital expenditures:

Recoverable from tenants 19 10 15 $ 13 to $16

Non-recoverable from tenants 7 7 7 $ 6 to $9

$ 54 51 $ 50 $ 43 to $55Office capital investment (i) 4 4

$ 58 55 $ 50 $ 43 to $55

(i) Expenditures related to one-time upgrades to mechanical/electrical components (that will have a 30-year life) of the office component ofRioCan Yonge Eglinton Centre, and a portion of which is recoverable from the office tenants.

Joint Venture and Partnership Activities

Co-ownership activities represent real estate investments in which RioCan owns an undivided interest and where it has jointcontrol with its partners. Through September 30th, 2013, RioCan recorded its proportionate share of assets, liabilities, revenue andexpenses of all co-ownerships in which it participates except for the following joint ventures, which are recorded on the equitybasis of accounting: RPAI, Kimco/Dunhill and Montgomery LP. Thereafter, the RPAI and Kimco/Dunhill (Las Palmas) joint ventureswere dissolved (see “2013 Change in Accounting Policy”). RioCan consolidated 100% of the accounts of the Sterling andWhiteshield properties. Where there is a party with a minority investment in a property that the Trust controls, that minorityinterest is reflected as “Non-controlling interest” in the 2013 Annual Financial Statements. As of October 1, 2013, the propertieswholly-owned through the former RPAI joint venture are consolidated.

The Trust’s co-ownership arrangements are governed by co-ownership agreements with its various partners. RioCan’s standardco-ownership agreement provides exit and transfer provisions, including, but not limited to, buy/sell and/or right of first offers thatallow for the unwinding of these co-ownership arrangements should the circumstances necessitate.

Generally, the Trust is only liable for its proportionate share of the obligations of the co-ownerships in which it participates, exceptin limited circumstances. Credit risk arises in the event that co-owners default on the payment of their proportionate share of suchobligations. Co-ownership agreements will typically provide RioCan with an option to remedy any non-performance by a defaultingco-owner. These credit risks are mitigated as the Trust has recourse against the asset under its co-ownership agreements in theevent of default by its co-owners, in which case the Trust’s claim would be against both the underlying real estate investments andthe co-owners that are in default. In addition to the matter noted above, RioCan has provided guarantees on debt totaling$282 million as at December 31, 2013 (December 31, 2012 – $235 million) on behalf of partners and co-owners.



RioCan’s more significant joint venture relationships are as follows:

KingSett

• KingSett is a private equity real estate business with investments focused on office, retail and industrial properties in the centraland suburban business districts of Canada’s major markets.

• Partnership with RioCan focused on acquisitions of greenfield development and prominent urban centres with intensificationand/or redevelopment potential.

• Total assets of $548 million, with RioCan’s interest at 50%.• Two income properties in the Greater Toronto Area – Yonge Sheppard Centre (intensification project) and Burlington Mall.• Two Alberta development projects - Sage Hill and Calgary East Village.

Allied

• Allied is a leading owner, manager and developer of urban office environments.• Partnership with RioCan focused on acquisition and redevelopment of sites focused on urban areas of major Canadian cities that

are well suited for mixed use intensification.• Total assets of $80 million, with RioCan’s interest at 50%.• Two Toronto development projects – College & Manning and King & Portland.

Allied/Diamond

• The Well joint venture (formally known as Downtown West) formed with partners, Allied and Diamond, acquired 7.74 acres ofland since December 2012 in downtown Toronto.

• RioCan and Allied have an undivided 40% interest and Diamond has an undivided 20% interest (RioCan’s effective ownership is43.9% as a result of its investment in Diamond’s WCNUF).

• The site is currently the home of the Globe and Mail newspaper.• The property will be redeveloped as a mixed-use development comprising approximately 3.2 million square feet of retail, office

and residential space.

Tanger

• Tanger is a public REIT since 1993 and a leading developer and manager of outlet shopping centres in the U.S., each one knownas a Tanger Outlet Centre.

• Partnership with RioCan focused on acquisition, development and leasing of outlet shopping centres similar in concept anddesign to those within the existing Tanger US portfolio, located in close proximity to larger urban markets and tourist areasacross Canada.

• Total assets of $226 million, with RioCan’s interest at 50%.• Three income properties in Ontario and Quebec – Cookstown Outlet Mall (intensification project), Les Factories and Le Carrefour

Champetre.• Two development projects – West Kanata Lands (Ontario) and the firm acquisition of Calaway Park (Alberta).

Trinity

• Trinity has played a prominent role in the development of new format regional retail centres across Canada.• Partnership with RioCan focused on acquisition and development of greenfield projects.• Total assets of $540 million, at RioCan’s interest.• 11 income producing and development properties, located primarily in Ontario and Alberta.• RioCan and Trinity are currently in discussions for RioCan to acquire Trinity’s interests in three development properties.

Closings are anticipated during Q1 2014.Kimco

• Kimco is a publicly traded REIT that owns and operates North America’s largest portfolio of neighbourhood and communityshopping centres.

• Represents RioCan’s largest joint venture partner.• Primary focus is on ownership of income producing properties.• 45 Canadian investment properties and one US property, representing nearly 50% of the Trust’s total JV properties.• Total assets of $2.4 billion.

CPPIB

• CPPIB is a professional investment management firm that invests the assets of the Canada Pension Plan.• Four investment properties.• Major partner on two Alberta development projects (East Hills and McCall Landing) and The Stockyards Toronto development.• Total assets of $369 million, at RioCan’s interest.



Selected Financial Information by Joint-Venture – proportionate share

(millions of dollars)

As at December 31, 2013

For thethree months endedDecember 31, 2013

For the year endedDecember 31, 2013

Number ofInvestment

Properties (i) Total Assets Total Liabilities NOI NOI

Allied 2 $ 40 $ 8 $ – $ 1The Well JV (Allied/Diamond) 1 71 39 – 1Bayfield Realty Advisors 5 110 36 2 6CMCH Pension Fund 1 47 21 1 2CPPIB 4 369 62 5 18CPPIB/Trinity 3 108 25 – –Devimco (ii) – – – 2 10Dunhill (iii) – – – – 11First Gulf Corporation 1 72 37 1 3Kimco (Incl. US) 46 1,258 438 18 72Kimco/Dunhill (iii) – – – – 2KingSett 4 274 127 3 10Metropia and Bazis Inc. 1 43 18 – –RPAI (iii) – – – – 26Sterling (iii) – – – – 2Sun Life 3 71 13 1 4Tanger 4 113 13 1 4Trinity (iv) 11 540 204 7 31Other 11 168 62 2 9

Total Joint-Venture 97 $ 3,284 $ 1,103 $ 43 $ 212

(i) Includes properties under development.(ii) The Quartier DIX30 property was sold in the fourth quarter of 2013.(iii) See acquisition section for detail of transactions that closed in Q4 2013.(iv) RioCan is currently in discussions with Trinity to acquire their interests in three development properties. Closings are anticipated to be

completed during Q1 2014. For further details, refer to section “2013 Operating Highlights.”



RioCan’s proportionately consolidated co-ownerships, partnerships and consolidated joint ventures are as follows:

Summary of Joint Venture Information

(thousands of square feet, except other data)As at December 31, 2013

RioCan’sownership

interest

Number ofincome

propertiesassets (i)

NLA of incomeproperties assets

at 100%Number of

PUD projects (i)

NLA uponcompletion

of PUDprojects at

100%

Proportionately consolidated joint ventures

Kimco Realty Corporation (Kimco) 15.5% – 50% 45 9,332 – –Trinity Development Group (Trinity) (iii) 31.25% – 75% 7 1,685 2 387Canada Pension Plan Investment Board (CPPIB) 50% 4 1,818 – –CPPIB/Trinity 25% – 37.5% – – 3 3,177Sun Life Financial (Sun Life) 20% – 40% 3 824 – –Other (ii) 30% – 75% 22 5,483 8 3,557

81 19,142 13 7,121Fully consolidated joint ventures

Whiteshield (iv) 60% 1 163 – –

1 163 – –Equity accounted joint ventures

Other 80% 2 995 – –

2 995 – –

84 20,300 13 7,121

(i) The number of properties under development (PUD) includes those properties with phased development where tenancies have alreadycommenced operations, as per the “Development Pipeline Summary”.

(ii) Includes joint ventures with Allied and Diamond Corp. (Diamond), Allied Properties REIT (Allied), Tanger Factory Outlets (Tanger) and variousother joint venture partners.

(iii) RioCan is currently in discussions with Trinity to acquire their interests in three development properties. Closings are anticipated to becompleted during Q1 2014. For further details, refer to section “2013 Operating Highlights.”

(iv) Subsequent to year end, RioCan completed the acquisition of the remaining 40% interest in an income property, bringing RioCan’s interest inthe property to 100%.



Total Assets by Joint Venture – proportionate share


(millions of dollars)Income

properties

Propertiesunder

development

Propertiesheld for

resale Other (i) TotalDecember 31,

2012


Kimco $ 1,181 $ 4 $ 1 $ 9 $ 1,195 $ 1,160Trinity (v) 463 49 9 4 525 855CPPIB 362 6 – 1 369 363CPPIB/Trinity 13 95 – – 108 98Devimco (ii) – – – – – 186Sun Life 69 1 – 1 71 68Other (iii) 670 198 17 44 929 688

Total assets of proportionately consolidated joint

ventures 2,758 353 27 59 3,197 3,418Fully consolidated joint ventures

Dunhill (iv) – – – – – 126Sterling (iv) – – – – – 25Whiteshield (vi) 15 – – – 15 14

Total assets of fully consolidated joint ventures 15 – – – 15 165Equity accounted joint ventures

RPAI (iv) – – – – – 553Other 68 – – 4 72 89

Total assets of equity accounted joint ventures 68 – – 4 72 642

Total Joint Venture $ 2,841 $ 353 $ 27 $ 63 $ 3,284 $ 4,225

(i) Primarily includes cash, rents receivable and other operating related expenditures receivable from tenants.(ii) The Quartier DIX30 property was sold in the fourth quarter of 2013.(iii) Includes joint ventures with Tanger, Allied, Allied and Diamond and various other joint venture partners.(iv) For further details on the Texas joint venture dissolutions, please refer to section “Acquisitions During 2013”.(v) RioCan is currently in discussions with Trinity to acquire their interests in three development properties. Closings are anticipated to be

completed during Q1 2014. For further details, refer to section “2013 Operating Highlights.”(vi) Subsequent to year end, RioCan completed the acquisition of the remaining 40% interest in an income property, bringing RioCan’s interest in

the property to 100%.



Total Liabilities by Joint-Venture – proportionate share

(millions of dollars)As at December 31, 2013 December 31, 2012


Kimco $ 407 $ 471Trinity 204 293CPPIB 62 62CPPIB/Trinity 25 13Devimco (i) – 96Sun Life 13 13Other (ii) 357 288

Total liabilities of proportionately consolidated joint ventures 1,068 1,236Fully consolidated joint ventures

Dunhill (iii) – 72Sterling (iii) – 13

Total liabilities of fully consolidated joint ventures – 85Equity accounted joint ventures

RPAI (iii) – 275Other 35 49

Total liabilities of equity accounted joint ventures 35 324

$ 1,103 $ 1,645

(i) The Quartier DIX30 property was sold in the fourth quarter of 2013.(ii) Includes joint ventures with Tanger, Allied, Allied and Diamond and various other joint venture partners.(iii) For further details on the Texas joint venture dissolutions, please refer to section “Acquisitions During 2013” in RioCan’s Management’s

Discussion and Analysis for the year ended December 31, 2013.



Net Operating Income (“NOI”) by Joint Venture – proportionate share



Kimco $ 68 $ 68Trinity 30 38CPPIB 18 18Devimco (i) 10 10Sun Life 4 4Other (ii) 37 33

Total NOI of proportionately consolidated joint ventures 167 171Fully consolidated joint ventures

Dunhill (iii) 10 10Sterling (iii) 2 1Whiteshield 1 1

Total NOI of fully consolidated joint ventures 13 12Equity accounted joint ventures

RPAI (iii) 26 34Other 6 4

Total NOI of equity accounted joint ventures 32 38

$ 212 $ 221

(i) The Quartier DIX30 property was sold in the fourth quarter of 2013.(ii) Includes joint ventures with Tanger, Allied, Allied and Diamond and various other joint venture partners.(iii) For further details on the Texas joint venture dissolutions, please refer to section “Acquisitions During 2013” in RioCan’s Management’s

Discussion and Analysis (“MD&A”) for the year ended December 31, 2013.

PROPERTIES UNDER DEVELOPMENT

RioCan has a development program primarily focused on new format and urban retail centres. The provisions of the Trust’sDeclaration have the effect of limiting direct and indirect investments, net of related mortgage debt, in non-income producingproperties to no more than 15% of the Adjusted Unitholders’ Equity of the Trust. “Adjusted Unitholders’ Equity” is a non-GAAPmeasure defined in RioCan’s Declaration as the amount of unitholders’ equity plus the amount of accumulated amortization ofincome properties recorded by the Trust, calculated in accordance with GAAP. At December 31, 2013, RioCan was in compliancewith this restriction. RioCan undertakes such developments on its own, or on a co-ownership or partnership basis, withestablished developers to whom the Trust generally provides mezzanine financing. With some exceptions for land in the highgrowth markets, RioCan will generally not acquire or fund significant expenditures for undeveloped land unless it is zoned and anacceptable level of space has been pre-leased or pre-sold. An advantage of unenclosed, new format retail is that it lends itself tophased construction keyed to leasing levels, which avoids the creation of meaningful amounts of vacant space. In addition toRioCan’s various development projects, the Trust also contributes to portfolio growth through the intensification andredevelopment of existing properties where RioCan has identified opportunities to increase density or add to an existing asset. Thisintensification and redevelopment of existing properties contributes to NOI growth in an efficient manner, leveraging the existingasset base, and can also lead to significant gains resulting from the sale of residential rights.



Development square feetby Property Type as at

December 31, 2013

Convenience Retail 2%

Main Street/Urban 33%

Power Centre 60%

5% New Brunswick

11% Ottawa

9% Other Ontario

24% GTA

18% Alberta

33% Toronto

Development square feet by Geographic Area as atDecember 31, 2013

Outlet Centre 4%

Development Properties Continuity

The change in the IFRS consolidated net carrying amount is as follows:


Consolidated balance, beginning of year $ 440 $ 347Acquisitions (i) 56 99Development expenditures 141 129Changes in fair values of properties under development 6 11Completion of properties under development (123) (159)Transfers from income properties 58 13Other 5 –

Consolidated balance, end of year $ 583 $ 440

(i) Comprised of the purchase price including closing costs and other acquisition related costs.

DEVELOPMENT PROPERTY ACQUISITIONS

RioCan did not acquire any development properties during the three months ended December 31, 2013.

During the year ended December 31, 2013, RioCan acquired interests in four development properties at an aggregate purchaseprice of $56 million, at RioCan’s interest.

Property name and location

RioCan’spurchase

price (i)(millions)

Expected NLA(in sqft)

at RioCan’sinterest uponcompletion of

redevelopment

Assetclass to be

redeveloped (ii)

Expectedyear of

completion Partners

RioCan’sownership

interest

Acquisitions of development sites

Sage Hill Crossing,Calgary, AB (iii) $ 16 191,500 NFR 2015 KingSett (50%) 50%Calgary East Village,Calgary, AB (iv) 10 158,000 MIX (vii) KingSett (50%) 50%West Kanata Lands,Kanata, ON (v) 15 178,500 OUT 2015 Tanger (50%) 50%The Well: Globe & Mail lands

phase II,Toronto, ON (vi) 15 400,000 MIX 2019

Allied (40%),Diamond Corp. (20%) 40%

Total acquisitions of development

sites $ 56 928,000

(i) Excludes closing costs and other acquisition related costs.

(ii) “URB” – Urban Retail; “MIX – Mixed Use Centre; “NFR” – New Format Retail; “OUT” – Outlet Mall; “OFF” – Office



(iii) Sage Hill Crossing is a 34 acre greenfield development site located in Northwest Calgary, Alberta. The site was acquired free and clear offinancing and RioCan will develop and manage the asset on behalf of the joint venture. Once completed, the anticipated gross leasable area is383,000 square feet of retail use. Development has commenced during 2013. The development will be anchored by a Walmart Superstore anda Loblaws Foodstore.

(iv) Calgary East Village is a 2.8 acre site located in the East Village area of downtown Calgary, Alberta. The site was acquired free and clear offinancing and RioCan will develop, lease and manage the property on behalf of the joint venture. The joint venture is contemplating thedevelopment of 316,000 square feet of mixed use retail and office space, with development anticipated to commence in 2015.

(v) The West Kanata Land is a 52.5 acre parcel of land located in Kanata, Ontario, approximately 20 kilometres west of Ottawa, Ontario. The sitewas acquired free and clear of financing and RioCan acquired a managing interest in the development property. It is anticipated that the sitewill be developed into an estimated 357,000 square foot outlet centre. The 316,000 square foot first phase of the development is underwaywith completion scheduled for Q4, 2014. The 41,000 square foot second phase will be complete in 2015.

(vi) This acquisition represents phase II of The Well development site, a 1.27 acre land parcel adjacent to the 6.47 acres acquired in Q4 2012,located west of Spadina Avenue, between Front Street West and Wellington Street West, in Toronto, Ontario. Consistent with the acquisition ofphase I, phase II was acquired on a 40/40/20 joint venture basis between RioCan, Allied and Diamond Corp. In connection with the purchase,the parties assumed vendor take-back mortgage financing of approximately $22 million ($9 million at RioCan’s interest) at an interest rate of2.0% (interest only) for a five year term. The total site (phase I and phase II) will be redeveloped as a mixed-use development known as “TheWell” that will include approximately 570,000 square feet of retail space, 1.1 million square feet of office space and approximately 1.5 millionsquare feet of residential space that will become a landmark destination to live, work and shop in Toronto. The Well will be a newneighbourhood that will be one of the few truly integrated mixed use projects under review by the City offering a meaningful mix ofresidential, retail and office space.

(vii) To be determined based on market conditions.

Development Property Acquisitions Subsequent to Year End

Subsequent to year end, RioCan acquired a 100% interest in 1860 Bayview Avenue in Toronto, Ontario. 1860 Bayview Avenue is adevelopment site located at the northwest corner of Bayview Avenue and Broadway Avenue in the Leaside area of Toronto.KingSett and Trinity Development Group are currently developing a grocery-anchored centre on the site, and RioCan has acquiredthe site on a forward purchase basis at an expected purchase price on completion of $58 million, at a capitalization rate of 5.4%.Once completed, the centre will consist of approximately 83,084 square feet of retail space and will be anchored by a 52,420 squarefoot Whole Foods.

Development Property Acquisitions under Contract

RioCan currently has two development sites in Canada under firm contract where conditions have been waived that, if completed,represent acquisitions of $20 million at RioCan’s interest.

• The acquisition of lands adjacent to Calaway Park, a 35 acre parcel of land located approximately 25 kilometres west ofCalgary, Alberta. The site is to be acquired on a 50/50 joint venture basis between RioCan and Tanger at a purchase price of$28 million ($14 million at RioCan’s interest). The site would be acquired free and clear of financing and RioCan would acquirea managing interest in the development property. The site represents an opportunity for the RioCan/Tanger joint venture toenter the Calgary market with the intention to develop the land into an outlet centre of approximately 350,000 square feet. Theacquisition is expected to close in the second quarter of 2014.

• The acquisition of a 50% interest in the site where TD Bank is currently located at the North East corner of Yonge and Eglintonin Toronto, Ontario, at a purchase price of $12 million ($6 million at RioCan’s interest). The acquisition is expected to close inthe second quarter of 2014 and will form part of the existing northeast Yonge Eglinton land assembly, acquired in 2011 withMetropia and Bazis for the purpose of redeveloping into a mixed-use retail and residential property. During the quarter,RioCan and its partners obtained zoning approval and the redevelopment is slated to commence in 2014.

RioCan and Trinity have reached an agreement in principle that will see RioCan acquiring Trinity’s 25% interest in each ofStockyards, Toronto and McCall Landing, Calgary, and 10% interest in East Hills, Calgary. RioCan will take over as developmentmanager for each of the development sites. The transactions are anticipated to close in the first quarter of 2014.

Additionally, RioCan has $10 million of development sites in Canada (at RioCan’s interest) under contract where conditions havenot yet been waived. These transactions are in various stages of due diligence and while efforts will be made to complete thesetransactions, no assurance can be given.

Development Activities in 2013

During the three months ended December 31, 2013, RioCan transferred from properties under development to incomeproducing properties $34 million in costs pertaining to 164,000 square feet of completed greenfield development or expansion andredevelopment projects. For the year ended December 31, 2013, RioCan transferred $123 million in costs pertaining to747,000 square feet.



A summary of RioCan’s 2013 transfers to income properties from development projects is as follows:

NLA (in thousands of square feet) atRioCan’s Interest

2013

Property location

RioCan’sownership

interest TotalFourth

quarterThird


Firstquarter

NLA at100% Tenants transferred to IPP

Centre St. Martin, Laval, QC 100% 70 25 45 – – 70 Gold’s Gym, Dollarama,L’Aubainerie

East Court Mall, Cornwall, ON 100% 91 – 91 – – 91 No Frills, Ardene,Dollarama, Urban Planet

Five Points Shopping Centre,Oshawa, Ontario

100% 108 – 108 – – 108 Target Retrofit andExpansion, Burger King

Galeries Laurentides,St.-Jerome, QC

100% 78 – 78 – – 78 Maxi, Urban Planet

Place Carnaval, Laval, QC 100% 5 5 – – – 5 TD Bank

Queensway Cineplex,Toronto, ON

50% 6 6 – – – 12 Cineplex Expansion

RioCan Greenfield, GreenfieldPark, QC

50% 3 – 3 – – 5 National Bank

RioCan West Ridge, Orillia, ON 100% 65 – – – 65 65 Big Lots, Sears

South Hamilton Square,Hamilton, ON

100% 87 – 87 – – 87 Target Retrofit andExpansion

Sudbury Place, Sudbury, ON 100% 110 110 – – – 110 Target Retrofit andExpansion

Timmins Square, Timmins, ON 30% 13 – 13 – – 44 Urban Planet

Yonge Eglinton Centre,Toronto, ON

100% 2 2 – – – 2 Aroma Café relocation

Grant Crossing, Ottawa, ON 60% 5 5 – – – 8 Japanese Buffet,First Choice,Thai Express,Beyond the Batter,Running Room

Herongate Mall, Ottawa, ON 75% 47 – – – 47 63 Food Basics, PharmaPlus,BNS, Dentist, Barbershop,Subway

Meadow Ridge Plaza, Ajax, ON 20% 7 – – 7 – 34 Good Life, Dollarama

Southbank Centre,Okotoks, AB

50% 2 – – – 2 5 Sleep Country Canada

The Stockyards, Toronto, ON 25% 49 11 37 – – 192 Target, Royal Bank

748 164 462 7 114 979



A summary of RioCan’s 2012 transfers to income properties from development projects is as follows:

NLA (in thousands of square feet) atRioCan’s Interest

2012

Property location

RioCan’sownership

interest TotalFourth

quarterThird


Firstquarter

NLA at100% Tenants transferred to IPP

404 Town Centre,Newmarket, ON

50% 10 – – 10 – 21 Shoppers Drug Mart

Cambrian Mall, Sault Ste.Marie, ON

100% 5 5 – – – 5 Shoppers Drug MartExpansion

Carrefour Neufchatel,Neufchatel, QC

100% 141 13 44 – 84 141 Urban Planet, Gold’s Gym,Staples, Winners, Bouclair,Ardene, Yellow, Dollarama

Lincoln Square, Arlington, TX 100% 27 – 27 – – 27 Michael’s, Ultra

Place Newman, LaSalle, QC 100% 3 3 – – – 3 Wendy’s

Quartier DIX30, Brossard, QC 50% 8 8 – – – 17 Cineplex Expansion

RioCan Hall, Toronto, ON 100% 36 – 36 – – 36 Marshalls

RioCan Scarborough Centre,Toronto, ON

100% 118 – 111 7 – 118 LA Fitness, Oriental Grocer,Structube

Shoppers World Brampton,Brampton, ON

100% 81 – 81 – – 81 Winners, Bulk Barn,Bad Boy, Carter’s,Imperial Buffet

Yonge Eglinton Centre,Toronto, ON

100% 13 – – – 13 13 Urban Outfitters

College & Manning,Toronto, ON

50% 28 28 – – – 56 Office Building

Corbett Centre,Fredericton, NB

100% 46 33 13 – – 46 Bouclair, Carter’s, Bed Bath& Beyond, St Hubert,The Gap

Flamborough Walmart Centre,Waterdown, ON

100% 33 18 15 – – 33 Block C4 (17,800 sqft),Staples

Grant Crossing, Ottawa, ON 60% 15 – – – 15 25 Bed Bath & Beyond

March Road, Ottawa, ON 50% 3 – – 3 – 5 Starbucks, National Bank

Meadow Ridge Plaza, Ajax, ON 20% 2 – 2 – – 10 Bulk Barn ,Subway,Nails Shop, Hair Salon,Dentist, Hakim Optical

Southbank Centre, Okotoks, AB 50% 4 4 – – – 8 Block D3 (8,400 sqft)

573 112 329 20 112 645

Development Pipeline Summary

The fair market value of properties under development at December 31, 2013 is $583 million (December 31, 2012 $440 million)which includes costs of $568 million (December 31, 2012 $430 million) and a fair value increment of $15 million (December 31,2012 $10 million).

As at December 31, 2013, RioCan’s greenfield development and urban intensification pipeline will, upon completion, compriseapproximately 11 million square feet, of which Riocan’s ownership interest will be approximately 5 million square feet whichincludes approximately 1.3 million square feet which is already income producing.



The following table represents the components of properties under development type and status as of December 31, 2013 and2012:


Active

Committed Non-committed Non-active Total

Comprised of:

Greenfield Development $ 218 $ 73 $ – $ 291Urban Intensification 28 100 – 128Expansion and Redevelopment 86 30 – 116Excess Density – – 41 41Other (i) – – 7 7

$ 332 $ 203 $ 48 $ 583

(i) including earnouts and other


Active

Committed Non-committed Non-active Total

Comprised of:

Greenfield Development $ 155 $ 60 $ – $ 215Urban Intensification 12 94 – 106Expansion and Redevelopment 46 24 – 70Excess Density – – 42 42Other (i) – – 7 7

$ 213 $ 178 $ 49 $ 440

(i) including earnouts and other

Definitions

Greenfield Development – vacant land located in suburban markets.

Urban Intensification – development or redevelopment projects located in urban markets.

Expansion and Redevelopment – projects that will improve the property through demolition, renovation and/or the addition of density.

Excess Density – leasable area identified and available for future development if and when market demand exists.

Active Committed – a property where the pro forma budget has been approved, all major planning issues have been resolved, tenantshave been secured and construction is about to start or has started.

Active Non – committed – a property where the development team is creating the pro forma budget, all planning issues are beingresolved, the leasing team is in the process of securing tenants, but construction has not started.

Non – active – a property that has future development potential

On an individual development basis, the majority of the projects are estimated to generate yields of approximately 7% to 11%. Onan aggregate basis, RioCan expects these development projects to generate a weighted average net operating income yield of 8%to 9%. Capital expenditures for Greenfield Development and Urban Intensification projects for 2014 are estimated to beapproximately $87 million before construction financing, or approximately $83 million, net of current construction financingarranged. During the year ended December 31, 2013, total costs incurred and mezzanine loans advanced were approximately$83 million.

With respect to Expansion and Redevelopment activities, RioCan expects to incur approximately $104 million in expendituresduring 2014.



RioCan is committed to property development and redevelopment opportunities and is focused on completing the construction ofthe development pipeline underway, on time and on budget, and continuing to make progress on leasing. Commencement ofconstruction for several of the development projects have been deferred until economic conditions warrant. Potential anchortenants are currently more cautious in committing to new developments, which will impact the timing of several developments, asRioCan will not commence construction until it has secured the requisite leasing commitments and appropriate risk-adjustedreturns.

RioCan’s estimated development project square footage and development costs are subject to change, which changes may bematerial to the Trust, as assumptions regarding, among other items, anchor tenants, tenant rents, building sizes, projectcompletion timelines, availability and cost of construction financing, and project costs, are updated periodically based on revisedsite plans, the cost tendering process and continuing tenant negotiations.

Development activity is expected to increase in the upcoming years due to demand from US based tenants entering the Canadianmarket and the demand from existing tenants especially in urban locations. Due to the economic recession of the last few years,the level of development in general has been low across the country. In addition, RioCan’s exclusive joint venture with Tanger willresult in the development of outlet shopping centres.

Estimated Spending Summary by Development Category - Active Projects

(in millions of dollars) 2014 2015 2016 FD* Total

Greenfield Development $ 79.3 $ 19.9 $ 6.2 $ 257.2 $ 362.6Urban Intensification 7.4 10.0 13.9 392.1 $ 423.4Expansion & Redevelopment 104.4 53.6 17.4 – $ 175.4

Total Construction Expenditures 191.1 83.5 37.5 649.3 961.4Construction Financing (16.5) (16.8) (2.5) (470.8) (506.6)Mezzanine Financing 3.7 1.5 0.9 35.4 41.5

Total RioCan Financing Requirements $ 178.3 $ 68.2 $ 35.9 $ 213.9 $ 496.3

* Future Development - projected costs from 2017 to 2019 to build NLA not leased

The NLA of development pipeline expected to be completed by year, as at December 31, 2013 is as follows:

(in millions of square feet) NLA - 100% NLA - RioCan % IPP (i) 2014 2015 2016

Greenfield Development 7.4 3.4 0.8 0.5 0.7 1.4Urban Intensification 3.1 1.5 – – 0.1 1.4

Sub-total 10.5 4.9 0.8 0.5 0.8 2.8Expansion & Redevelopment 1.4 1.0 – 0.4 0.4 0.2

Total 11.9 5.9 0.8 0.9 1.2 3.0

(i) Phases of the development pipeline that are currently income producing.



The development (including expansions and redevelopment projects) pipeline NLA expected to be completed by year, as atDecember 31, 2013 is as follows:

0

400

200

NL

A -

th

ou

sa

nd

s o

f S

qu

are

fe

et

2014

*subject to preleasing and market conditions

Committed

Non-committed

2015 2016 2017 2018 2019

800

600

1000

1200

Greenfield Development

RioCan’s current greenfield development pipeline consists of 16 properties that are expected to add approximately 7.4 millionsquare feet (3.4 million square feet at RioCan’s interest) of space upon completion over the next six years. 1.1 million square feet(0.8 million square feet at RioCan’s interest) is already income producing. RioCan is committed to property development andredevelopment opportunities and is focused on completing its existing development pipeline. These developments will be animportant component of RioCan’s organic growth strategy over time. RioCan’s development program is focused on well locatedurban and suburban land in the six major market markets in Canada. RioCan’s projected returns on development properties arehigher than the returns that can be generated through properties that are purchased. Furthermore, population growth over timewill lead to improved tenant sales and further increases in rent at these properties as tenants renew upon expiry of their originalterm. Development properties that have been completed by RioCan and its partners during the last fifteen years contributesignificantly to RioCan’s existing growth and these types of properties are rarely, if ever, available for sale.



Highlights of RioCan’s greenfield developments pipeline as at December 31, 2013, are as follows:

Estimated square feet upon completion of thedevelopment project

Anticipated date ofdevelopment completion

(thousands of square feet)

RioCan’s%

ownership Partners Anchors

Totalestimated

development

Retailerowned

anchors(i)

RioCan’sinterest


Totalleasingactivity

(ii)%

LeasedCurrent

development

Potentialfuture

developments

Greenfield DevelopmentProperties:

Corbett Centre,Fredericton, NB

100% – HomeDepot,

Costso,Winners

466 242 224 – 179 80% Q3 2014 2015

East Hills, Calgary, AB* 30% CPP /Trinity /

Sidorski /Tristar

Wal Mart,Empire

Theatres

1,110 159 286 666 217 23% Q3 2014 2016

Eglinton Avenue &Warden Avenue,Toronto, ON 100% – Target 169 – 169 – 157 93% Q2 2014 2015

Grant Crossing,Ottawa, ON

60% Trinity /Shenkman

Lowe’s,Winners

399 128 163 108 224 83% Q2 2014 2015

Herongate Mall,Ottawa, ON

75% Trinity FoodBasics

184 – 138 46 89 48% Q2 2014 2015

McCall Landing,Calgary, AB*

25% CPP /Trinity

– 862 182 170 510 – 0% – 2015(iii)

RioCan CentreBelcourt, Ottawa, ON

60% Trinity /Shenkman

Lowe’s,Food

Basics

405 142 158 105 263 100% Q2 2014 2014

Sage Hill, Calgary, AB* 50% Kingsett Wal-Mart,Loblaws

383 – 192 191 275 72% Q1 2015 2015

Shoppers City East,Ottawa, ON*

62.8% Trinity /Soloway

– 158 – 99 59 – 0% - 2016

Southbank Centre,Okotoks, AB

50% Trinity /Tristar

HomeDepot,

Costco,Winners

421 276 73 72 144 99% Q2 2014 2014

Tanger Outlets –Kanata, Kanata, ON*

50% Tanger – 357 – 179 179 98 27% Q3 2014 2015

The Stockyards,Toronto, ON*

25% CPP /Trinity

Target,Marshalls,

Homesense

551 – 138 413 442 80% Q2 2014 2014

Westney Road &Taunton Road,Ajax, ON 20% Sunlife Sobeys 174 – 34 140 112 64% Q2 2014 2015

GreenfieldDevelopments –Committed 5,639 1,129 2,023 2,489 2,200 49%

Flamborough PowerCentre, Hamilton, ON

100% – Target 267 – 267 – 187 70% – 2015

RioCan CentreVaughan, Vaughan,ON Ph 2 & 3*

31.25% Trinity /Strathallan

– 261 – 82 179 – 0% – 2015

Windfield Farms,Oshawa, ON* 100% – – 1,217 156 1,061 – – 0% – 2016(iii)

GreenfieldDevelopments-NonCommitted 1,745 156 1,410 179 187 12%

Total GreenfieldDevelopments 7,384 1,285 3,433 2,668 2,387 39%

(i) Retailer owned anchors include both completed and contemplated sales.

(ii) Leasing activity includes leasing that is conditional on receiving municipal approvals and meeting construction deadlines.

(iii) The first phases are expected to be substantially complete by the dates indicated.

* Property represents one of RioCan’s 16 properties under development.




RioCan’s%

ownership

Estimatedproject cost

(100%) (i)

Acquisition and development expenditures incurred to dateEstimated remaining construction

expenditures to complete

RioCan’s interest

Amountincluded in

IPP

Amountincluded in

PUD TotalPartners’

interest TotalRioCan’sinterest

Partners’interest Total

Greenfield Development Properties:

Corbett Centre, Fredericton, NB 100% $ 46,772 $ 32,095 $ 2,966 $ 35,061 $ – $ 35,061 $ 11,711 $ – $ 11,711

East Hills, Calgary, AB 30% 213,226 – 44,716 44,716 87,661 132,377 24,255 56,594 80,849

Eglinton Avenue & WardenAvenue, Toronto, ON 100% 44,895 35,721 4,444 40,165 – 40,165 4,730 – 4,730

Grant Crossing, Ottawa, ON 60% 72,028 32,926 5,364 38,290 24,217 62,507 5,713 3,808 9,521

Herongate Mall, Ottawa, ON 75% 49,726 12,077 11,162 23,239 7,264 30,503 14,417 4,806 19,223

McCall Landing, Calgary, AB 25% 157,685 – 16,517 16,517 36,958 53,475 26,052 78,157 104,209

RioCan Centre Belcourt,Ottawa, ON 60% 59,833 23,983 10,416 34,399 21,809 56,208 2,176 1,450 3,626

Sage Hill, Calgary, AB 50% 102,031 1 18,067 18,068 17,234 35,302 33,364 33,364 66,728

Shoppers City East, Ottawa, ON 62.8% 53,101 132 19,551 19,683 11,326 31,009 13,874 8,218 22,092

Southbank Centre, Okotoks, AB 50% 37,519 12,444 6,723 19,167 17,917 37,084 218 218 436

Tanger Outlets – Kanata,Kanata, ON 50% 120,442 57 24,248 24,305 23,220 47,525 36,459 36,459 72,918

The Stockyards, Toronto, ON 25% 183,878 11,850 31,754 43,604 117,207 160,811 5,767 17,301 23,068

Westney Road & Taunton Road,Ajax, ON 20% 52,867 6,694 2,399 9,093 30,705 39,798 2,614 10,455 13,069

Fair value adjustments – – 19,603 19,603 – 19,603 – – –

Greenfield Developments –Committed 1,194,003 167,980 217,930 385,910 395,518 781,428 181,350 250,830 432,180

Flamborough Power Centre,Hamilton, ON 100% 57,261 30,903 7,023 37,926 – 37,926 19,335 – 19,335

RioCan Centre Vaughan,Vaughan, ON Ph 2 & 3 31.25% 80,463 – 10,395 10,395 25,910 36,305 13,800 30,359 44,159

Windfield Farms, Oshawa, ON 100% 198,165 – 50,042 50,042 – 50,042 148,123 – 148,123

Fair value adjustments – – 5,796 5,796 – 5,796 – – –

Greenfield Developments –Non-Committed 335,889 30,903 73,256 104,159 25,910 130,069 181,258 30,359 211,617

Total Greenfield Developments $ 1,529,892 $ 198,883 $ 291,186 $ 490,069 $ 421,428 $ 911,497 $ 362,608 $ 281,189 $ 643,797

(i) Proceeds from sale to shadow anchors reduce projected cost.



Estimated remaining development activity to be funded by RioCan

2014 2015 2016 & Thereafter Future Development


RioCan’s%

ownershipRioCan’sinterest Financing

RioCan’sinterest Financing




Corbett Centre, Fredericton, NB 100% $ 9,580 $ – $ – $ – $ – $ – $ 2,131 $ –East Hills, Calgary, AB 30% 2,805 1,519 1,989 1,077 1,989 1,078 17,472 9,464Eglinton Avenue & Warden Avenue,

Toronto, ON 100% 2,779 – – – – – 1,951 –Grant Crossing, Ottawa, ON 60% 653 218 172 57 – – 4,888 1,629Herongate Mall, Ottawa, ON 75% 637 212 416 139 – – 13,364 4,455McCall Landing, Calgary, AB 25% 1,080 1,080 675 675 660 660 23,637 23,637RioCan Centre Belcourt, Ottawa, ON 60% 2,176 725 – – – – – –Sage Hill, Calgary, AB 50% 18,193 – 10,005 – – – 5,167 –Shoppers City East, Ottawa, ON 62.8% 720 229 756 241 794 253 11,604 3,696Southbank Centre, Okotoks, AB 50% 218 109 – – – – – –Tanger Outlets – Kanata, Kanata, ON 50% 33,821 – 2,638 – – – – –The Stockyards, Toronto, ON 25% 3,496 3,496 – – – – 2,271 2,271Westney Road & Taunton Road, Ajax, ON 20% – – – – – – 2,614 –

Greenfield Developments – Committed 76,158 7,588 16,651 2,189 3,443 1,991 85,099 45,152

Flamborough Power Centre, Hamilton, ON 100% 351 – 369 – – – 18,615 –RioCan Centre Vaughan, Vaughan, ON Ph 2 & 3 31.25% 252 151 265 159 – – 13,282 7,969Windfield Farms, Oshawa, ON 100% 2,502 – 2,627 – 2,759 – 140,235 –

Greenfield Developments – Non Committed 3,105 151 3,261 159 2,759 – 172,132 7,969

Total Greenfield Developments 79,263 7,739 19,912 2,348 6,202 1,991 257,231 53,121

Construction financing (13,995) (4,256) (11,993) (1,077) (1,989) (1,078) (188,365) (37,430)

RioCan funded development activity net of thirdparty financing $ 65,268 $ 3,483 $ 7,919 $ 1,271 $ 4,213 $ 913 $ 68,866 $ 15,691



Development financing

RioCan and partners

Third party RioCan


RioCan’s%

ownership

Total inplace

financingAdvanced

to date

Remainingto be

advancedRioCan’sinterest

RioCan onbehalf ofpartners

TotalRioCanfunded Partners Total


Corbett Centre, Fredericton, NB 100% $ – $ – $ – $ 11,711 $ – $ 11,711 $ – $ 11,711East Hills, Calgary, AB 30% – – – 24,255 13,138 37,393 43,456 80,849Eglinton Avenue & Warden Avenue,

Toronto, ON 100% – – – 4,730 – 4,730 – 4,730Grant Crossing, Ottawa, ON 60% – – – 5,713 1,904 7,617 1,904 9,521Herongate Mall, Ottawa, ON 75% – – – 14,417 4,806 19,223 – 19,223McCall Landing, Calgary, AB 25% – – – 26,052 26,052 52,104 52,105 104,209RioCan Centre Belcourt, Ottawa, ON 60% – – – 2,176 725 2,901 725 3,626Sage Hill, Calgary, AB 50% – – – 33,364 – 33,364 33,364 66,728Shoppers City East, Ottawa, ON 62.8% – – – 13,874 4,418 18,292 3,800 22,092Tanger Outlets – Kanata, Kanata, ON 50% – – – 36,459 – 36,459 36,459 72,918The Stockyards, Toronto, ON 25% 110,000 86,200 23,800 – – – – –Westney Road & Taunton Road, Ajax, ON 20% – – – 2,614 – 2,614 10,455 13,069

Greenfield Developments – Committed 110,000 86,200 23,800 175,583 51,152 226,735 182,377 409,112

Flamborough Power Centre,Hamilton, ON 100% – – – 19,335 – 19,335 – 19,335

RioCan Centre Vaughan, Vaughan,ON Ph 2 & 3 31.25% – – – 13,800 8,280 22,080 22,079 44,159

Windfield Farms, Oshawa, ON 100% – – – 148,123 – 148,123 – 148,123

Greenfield Developments –Non-Committed – – – 181,258 8,280 189,538 22,079 211,617

Total Greenfield Developments $110,000 $ 86,200 $ 23,800 $ 356,841 $ 59,432 $ 416,273 $ 204,456 $ 620,729

A summary of significant Greenfield Development projects currently underway are as follows:

Corbett CentreFredericton, New Brunswick

This 26 acre site, acquired by way of a 66-year long-term lease, is currently being developed into a 466,000 square foot new formatretail centre. The site is anchored by Home Depot and Costco, which owns its own store and operates as part of the overall site. A19,000 square foot Homesense will be developed in 2014.

East HillsCalgary, Alberta

This 148 acre site is currently being developed into a 1.1 million square foot regional new format retail centre. The East Hillsdevelopment is planned in three phases. Phases I and III comprise approximately 111 acres and the original ownership structurewas CPPIB 37.5%, RioCan 37.5%, Trinity 12.5% and Lansdowne Equity Ventures Ltd. (Lansdowne) 12.5%. Phase II, comprisesapproximately 37 acres, and the original ownership structure was CPPIB 37.5%, Tristar 25%, RioCan 16.7%, Trinity 8.3% andLansdowne 12.5%. Phases I, II and III will ultimately form an integrated site. In the fourth quarter of 2012 a transaction wascompleted between RioCan, Trinity and Tristar that equalized the ownership interest in the entire site to CPPIB 37.5%, RioCan30.0%, Lansdowne 12.5%, Tristar 10.0% and Trinity 10.0%. The site will be anchored by a 134,000 square foot Walmart that isscheduled to open in the second quarter of 2014.

RioCan and Trinity are currently in discussions for RioCan to acquire Trinity’s 10% interest in this development project. Closing isanticipated to be completed during Q1 2014. It is the Trust’s intention, pending certain approvals, to take over as developmentmanager for this site, which is expected to take place over the remainder of 2014.

Eglinton Avenue and Warden AvenueToronto, Ontario

Located at the northeast corner of Eglinton Avenue East and Warden Avenue, the site is currently being developed into a169,000 square foot new format retail centre anchored by a 116,000 square foot Target. A 23,000 square foot Petsmart and a5,000 square foot TD Bank commenced operations in the fourth quarter of 2010. A 6,500 square foot Structube commencedoperations in the third quarter of 2012. An additional 18,000 square feet of retail space will be developed at the property included6,000 square feet scheduled to be developed in late-2014.



Grant CrossingOttawa, Ontario

This 33 acre site is currently being developed into a 399,000 square foot new format retail centre as a joint venture with Trinity(20%) and Shenkman Corporation (20%). The site is anchored by a 128,000 square foot Lowe’s that commenced operations in thefirst quarter of 2011. Lowe’s owns its own store which operates as part of the overall site. A 31,000 square foot Winners, a26,000 square foot Homesense and a 22,000 square foot Michael’s commenced operations in the fourth quarter of 2010.Approximately 8,000 square feet of new CRU space commenced operations in late-2013. An 18,000 square foot JYSK and a10,000 square foot Dollarama are scheduled to be developed in 2014.

Herongate MallOttawa, Ontario

This 16 acre site consisted of a 196,000 square foot enclosed mall when the property was acquired in 2011. The majority of theoriginal building was demolished in two stages in 2012 and 2013 and the property is currently being redeveloped into a184,000 square foot new format retail centre. The site is anchored by a 42,000 square foot Food Basics. A 12,000 square footPharma Plus commenced operations in April 2013. A 12,000 square foot Petsmart and a 10,000 square foot Dollarama arescheduled to be developed in 2014. The site will be developed with Trinity. RioCan’s ownership interest in the property is 75%.

McCall LandingCalgary, Alberta

McCall Landing, located at 36th Street NE and Country Hills Bouelvard NE in Calgary, is a 105-acre development that will consistpredominately of new format retail. Upon completion, the development is expected to feature approximately 862,000 square feet ofretail space. A 50% interest in this property was sold to the CPPIB in June 2008 and a 25% interest has been retained by each ofTrinity and RioCan.

RioCan and Trinity are currently in discussions for RioCan to acquire Trinity’s 25% interest in this development. Closing isanticipated to be completed during Q1 2014. It is the Trust’s intention, pending certain approvals, to take over as developmentmanager, which is expected to take place over the remainder of 2014.

RioCan Centre BelcourtOttawa, Ontario

This 39 acre site is currently being developed into a 405,000 square foot new format retail centre as a joint venture with Trinity(20%) and Shenkman Corporation (20%). The site is anchored by a 142,000 square foot Lowe’s that commenced operations in thefourth quarter of 2009. Lowe’s owns its own store which operates as part of the overall site. In addition, a 41,000 square footEmpire Theatres (subsequently sold to Cineplex in Q3 2013) commenced operations in December 2009 and a 35,000 square footFood Basics commenced operations in October 2011. A 45,000 square foot Toys “R” Us is currently under development and isscheduled to open in the second quarter of 2014. RioCan purchased an additional 13.3% interest in the property from each ofTrinity and Shenkman Corporation in the first quarter of 2011.

RioCan Centre VaughanVaughan, Ontario

This 54 acre site is currently being developed into a 523,000 square foot new format retail centre that is anchored by a213,000 square foot Walmart Supercentre (Phase I) that opened in the first quarter of 2009. The site is being developed withRiocan’s partners, Trinity and Strathallen Capital Corporation. RioCan purchased Trinity and Strathallen Capital Corporation’sinterests in phase one of the property in September 2009. Phase one of the project features approximately 262,000 square feet andis substantially complete. RioCan’s ownership interest in the 261,000 square foot phase two of the property is 31.25%.

Sage HillCalgary, Alberta

This 32-acre site is currently being developed into a 383,000 square foot new format retail centre in a 50% joint venture withKingSett. The property was acquired in the first quarter of 2013, site servicing work commenced in fall 2013 and buildingconstruction is expected to commence spring 2014 with the project being completed in late 2015. The site will be anchored by aWalmart Superstore and a Loblaws Foodstore. The development is approximately 72% leased anchored by a Walmart anticipatingopening in the early part of 2015 with a Loblaws Foodstore scheduled to open later that same year and anchored by a WalmartSuperstore and a Loblaws Foodstore.



The site is the only designated major retail development site remaining in Northwest Calgary and as such, provides significantopportunity for retailers to locate at the core of what will be a thriving residential community. The surrounding North Sector areahas an existing population of almost 30,000 persons and 10,600 housing units. In time, the North Sector is expected to have apopulation in excess of 85,000 persons and 29,000 housing units. The anticipated residential growth rate is consistent with theoverall population growth forecasted for the Calgary Economic Region which predicts the population to increase by an additional135,000 people to 1.5 million persons by 2016.

Shoppers City EastOttawa, Ontario

This 19.4 acre site consisted of a 148,000 square foot neighborhood shopping when the property was acquired. Demolition of thebuildings commenced late in 2013 and will be completed in 2015. The property will be redeveloped into a 158,000 square foot newformat retail centre. RioCan’s purchased their 62.8% ownership interest in the property in two stages in 2012 and 2013. Trinity hasa 20% ownership interest in the property and Soloway Holdings Inc. holds the remaining 17.2% ownership interest in the property.

Southbank CentreOkotoks, Alberta

This site is currently being developed into a 421,000 square foot new format retail centre as a joint venture with Trinity and Tristar.The site is anchored by a 93,000 square foot Home Depot which owns its own store and operates as part of the overall site. A151,000 square foot Costco, which also owns its own store, commenced operations in the third quarter of 2010. A 25,000 squarefoot Winners commenced operations in the first quarter of 2011. A 24,000 square foot Good Life Fitness and a 15,000 square footSport Chek are scheduled to open in the second quarter of 2014. RioCan’s ownership interest in the property is 50%.

Tanger Outlets – KanataKanata, Ontario

In the second quarter of 2013, RioCan and Tanger purchased a 52.5 acre parcel of land located in Kanata, Ontario, approximately20 kilometres west of Ottawa, Ontario. Phase 1 of this outlet mall format site will be approximately 316,000 square feet and iscurrently under construction with an expected completion in Q4 2014. A second 41,000 square foot phase will be developed in 2015.RioCan’s ownership interest in the property is 50%.

The StockyardsToronto, Ontario

The St. Clair and Weston development benefits from a well-established urban node at the intersection of St. Clair Avenue andWeston Road. The 19 acre site is expected to ultimately feature approximately 551,000 square feet of space. The project conceptfeatures a unique urban, two-storey retail prototype that has been successfully utilized in the US. A 50% interest in this propertywas sold to the CPPIB in June 2008 and a 25% interest has been retained by each of Trinity and RioCan. The site will be anchoredby a 149,000 square foot Target, which will be Target’s first purpose built store in Canada. In addition, Marshalls, Homesense,Michael’s, Old Navy, Sport Chek and Petsmart will operate at the site. Target is scheduled to open in March 2014 and the majorityof the remainder of the tenants at the site will open by mid-2014.

RioCan and Trinity are currently in discussions for RioCan to acquire Trinity’s 25% interest in this development. Closing isanticipated to be completed during Q1 2014. It is the Trust’s intention, pending certain approvals, to take over as developmentmanager, which is expected to take place over the remainder of 2014.

Westney Road and Taunton RoadAjax, Ontario

This site is currently being developed into a 174,000 square foot new format retail centre as a joint venture with the Sun LifeAssurance Company of Canada. A 50,000 square foot Sobeys anchors the property. A 24,000 square foot Good Life Fitness and a9,000 square foot Dollarama opened in the fourth quarter of 2013. RioCan’s ownership interest in the property is 20%.

Flamborough Power CentreHamilton, Ontario

This 25-acre site is currently being developed into a 267,000 square foot new format retail centre. The site is anchored by a116,000 square foot Target store that commenced operations in the first quarter of 2013. An additional 80,000 square feet of retailspace will be developed at the property.

Windfield FarmsOshawa, Ontario

This 160 acre site is currently being developed into a 1,217,000 square foot regional new format retail centre.

Urban Intensification

A focus within RioCan’s development growth strategy is urban development and intensification. RioCan’s current urbandevelopment pipeline consists of seven properties that are expected to add approximately 3.1 million square feet(1.5 million square feet at RioCan’s interest) of space upon completion over the next six years. RioCan’s urban developmentprogram currently is focused on properties located in densely populated areas in the urban cores of Toronto and Calgary.



Land use intensification opportunities arise from the fact that retail centres are generally built with lot coverages of approximately25% of the underlying land. Therefore, particularly in urban markets, RioCan can seek to obtain additional density, retail orotherwise, on its existing property portfolio and, as the land is already owned, it may be able to achieve relatively higher returns onnew construction as well as from the sale of non-retail use density. Population growth is significant in these areas and retailerswant locations that are able to access this population. RioCan’s urban development program will serve that demand and returns onthese properties will contribute significantly to RioCan’s growth strategy over time.

As a result of the aforementioned population growth, cities are building infrastructure to serve this population that will benefitRioCan’s urban development growth strategy. The proposed transit line along Toronto’s Eglinton Avenue corridor is expected tocreate a number of development and intensification projects. RioCan is well positioned to take advantage of these opportunities asit currently has five properties located along, or near, this important infrastructure undertaking (including the land assembly at thenortheast corner of Yonge and Eglinton). The City of Toronto has stated a policy to rezone areas surrounding new transit stops topermit higher density developments, which will enable RioCan to redevelop its Eglinton properties more quickly as many of themare located near anticipated transit stops.

Highlights of RioCan’s urban intensification pipeline as at December 31, 2013, are as follows:Estimated square feet upon completion of the

development projectAnticipated date of

development completion

(thousands of square feet)

RioCan’s%

ownership Partner(s)

Totalestimated

development

Retailerowned

anchors(i)

RioCan’sinterest


Totalleasingactivity

(ii)%

LeasedCurrent

development

Potentialfuture

developments

Urban Intensification Properties

Bathurst Street & College Street,Toronto, ON* 60% Trinity 118 – 71 47 – 0% – 2015

Calgary East Village, Calgary, AB* 50% Kingsett 316 – 158 158 – 0% – 2016NE Yonge Eglinton, Toronto, ON* (iv)

50%Metropia /

Baziz 54 – 27 27 – 0% – 2017

Urban Intensification-Committed 488 – 256 232 – 0%

College & Manning, Toronto, ON* 50% Allied 125 – 63 63 56 45% – 2017Dupont Street, Toronto, ON* 100% – 184 – 184 – – 0% – 2017The Well, Toronto, ON* (iv)

40%Allied /

Diamond 1,820 – 728 1,092 – 0% – 2019(iii)King & Portland, Toronto, ON* 50% Allied 499 – 250 250 48 10% – 2017

Urban Intensification-Non-Committed 2,628 – 1,225 1,405 104 4%

Total Urban Intensification 3,116 – 1,481 1,637 104 3%

(i) Retailer owned anchors include both completed and contemplated sales.(ii) Leasing activity includes leasing that is conditional on receiving municipal approvals and meeting construction deadlines.(iii) The first phases are expected to be substantially complete by the dates indicated.(iv) Includes amounts for offices and retail components only (not residential).* Property represents one of RioCan’s 16 properties under development.




RioCan’s%

ownership

Estimatedproject cost

(100%) (i)

Acquisition and development expenditures incurred to dateEstimated remaining construction

expenditures to complete

RioCan’s interest

Amountincluded

in IPP

Amountincluded in

PUD TotalPartners’

interest TotalRioCan’sinterest

Partners’interest Total

Urban Intensification Properties

Bathurst Street & College Street,Toronto, ON 60% $ 69,601 $ – $ 12,012 $ 12,012 $ 7,184 $ 19,196 $ 30,243 $ 20,162 $ 50,405

Calgary East Village, Calgary, AB 50% 131,494 – 10,483 10,483 10,122 20,605 55,445 55,445 110,890

NE Yonge Eglinton, Toronto, ON 50% 36,115 123 10,563 10,686 9,895 20,581 7,767 7,767 15,534

Fair value adjustments – – (4,676) (4,676) – (4,676) – – –

Urban Intensification – Committed 237,210 123 28,382 28,505 27,201 55,706 93,455 83,374 176,829

College & Manning, Toronto, ON 50% – 7,837 4,543 12,380 11,427 23,807 – – (ii)

Dupont Street, Toronto, ON 100% 80,050 – 13,635 13,635 – 13,635 66,415 – 66,415

The Well, Toronto, ON 40% 832,544 – 71,338 71,338 102,586 173,924 263,448 395,172 658,620

King & Portland, Toronto, ON 50% – 10,356 12,836 23,192 21,808 45,000 – – (ii)

Fair value adjustments – – (2,786) (2,786) – (2,786) – – –

Urban Intensification–Non-Committed 912,594 18,193 99,566 117,759 135,821 253,580 329,863 395,172 725,035

Total Urban Intensification $ 1,149,804 $ 18,316 $ 127,948 $ 146,264 $ 163,022 $ 309,286 $ 423,318 $ 478,546 $ 901,864

(i) Proceeds from sale to shadow anchors reduce projected cost, and exclude potential residential.(ii) Estimated project costs/cost to complete cannot be determined due to the early stage of the project.

Estimated remaining development activity to be funded by RioCan

2014 2015 2016 & Thereafter Future Development


RioCan’s%

ownershipRioCan’sinterest Financing




Urban Intensification PropertiesBathurst Street & College Street, Toronto,

ON 60% $ 323 $ 216 $ 339 $ 226 $ – $ – $ 29,580 $ 19,720Calgary East Village, Calgary, AB 50% 506 – 531 – 558 – 53,849 –NE Yonge Eglinton, Toronto, ON 50% 2,457 2,457 4,817 4,817 493 493 – –

Urban Intensification – Committed 3,286 2,673 5,687 5,043 1,051 493 83,429 19,720

College & Manning, Toronto, ON (i) 50% – – – – – – – –Dupont Street, Toronto, ON 100% 682 – 716 – 1,503 – 63,514 –The Well, Toronto, ON 40% 3,420 – 3,590 – 11,310 – 245,128 –King & Portland, Toronto, ON (i) 50% – – – – – – – –

Urban Intensification – Non Committed 4,102 – 4,306 – 12,813 – 308,642 –

Total Urban Intensification 7,388 2,673 9,993 5,043 13,864 493 392,071 19,720

Construction financing (2,457) (2,457) (4,817) (4,817) (493) (493) (282,423) –

RioCan funded development activity net ofthird party financing $ 4,931 $ 216 $ 5,176 $ 226 $ 13,371 $ – $ 109,648 $ 19,720

(i) Estimated development funding by RioCan cannot be determined due to the early stage of the project.



Development financing

RioCan and partners

Third party RioCan


RioCan’s%

ownership

Total inplace

financingAdvanced

to date

Remainingto be

advancedRioCan’sinterest

RioCan onbehalf ofpartners

TotalRioCanfunded Partners Total

Urban Intensification Properties:Bathurst Street & College Street,

Toronto, ON 60% $ – $ – $ – $ 30,243 $ 20,162 $ 50,405 $ – $ 50,405CPA Lands, Calgary, AB 50% – – – 55,445 – 55,445 55,445 110,890NE Yonge Eglinton, Toronto, ON 50% – – – 7,767 7,767 15,534 – 15,534

Urban Intensification – Committed – – – 93,455 27,929 121,384 55,445 176,829

College & Manning, Toronto, ON 50% – – – – – – – –Dupont Street, Toronto, ON 100% – – – 66,415 – 66,415 – 66,415Globe & Mail Lands, Toronto, ON 40% – – – 263,448 – 263,448 395,172 658,620King & Portland, Toronto, ON 50% – – – – – – – –

Urban Intensification – Non-Committed – – – 329,863 – 329,863 395,172 725,035

Total Urban Intensification $ – $ – $ – $ 423,318 $ 27,929 $ 451,247 $ 450,617 $ 901,864

A summary of significant urban intensification projects currently underway are as follows:

Bathurst Street and College StreetToronto, Ontario

This 1.3 acre site is located just west of the downtown core in Toronto near Bathurst Street and College Street. The property will bedeveloped into 118,000 square foot three storey urban retail building. RioCan sold a 40% ownership interest in the site to Trinity inthe third quarter of 2011.

Calgary East VillageCalgary, AB

This 2.8 acre site is located in the East Village area of downtown Calgary, Alberta. The site is one of downtown Calgary’s fewremaining privately owned full city blocks. The site was acquired in the second quarter of 2013 on a 50/50 joint venture basisbetween RioCan and KingSett. The property will be developed into a mixed use retail and office building containing 316,000 squarefeet. Development is anticipated to commence in 2015.

Yonge & Eglinton Northeast CornerToronto, Ontario

This site is located on the northeast corner of Yonge Street and Eglinton Avenue in Toronto. The property currently consists of fourretail buildings as well as a thirty unit residential apartment building. It is anticipated that the project will contain two residentialtowers totaling 58 and 36 floors, an office component featuring a flagship TD Bank branch, as well as a 54,000 square foot retailand office component upon completion. The condominium portion of the property has proven extremely successful withapproximately 90% of the 623 condominium units having been pre-sold (as measured by dollar value). As part of the development,RioCan has entered into an agreement with its partners to develop the north tower of the centre as a 458 unit multi-familyresidential building. Construction is expected to commence in April 2014. The site will be developed with partners, Metropia andBazis Inc. RioCan’s ownership interest in the property is 50%.

College Street and Manning AvenueToronto, Ontario

This site is comprised of 551-555 College Street, formerly owned exclusively by Allied Properties REIT, and 547 and 549 CollegeStreet, formerly owned exclusively by RioCan. Given the strategic downtown location of each respective property, Allied and RioCanhave formed a 50-50 joint venture partnership to create one 64,000 square foot site with 185 feet of frontage on College Street. Thesite has excellent potential and the joint venture has plans to intensify the site by creating a mixed-use office, retail and residentialcomplex with approximately 125,000 square feet of gross floor area upon completion.

Dupont StreetToronto, ON

This 1.4 acre site, located on Dupont Street near Christie Avenue, is north-west of the downtown core of Toronto. The site is expectedto be developed into 184,000 square foot three storey urban retail building. RioCan has a 100% ownership interest in the site.



The Well (formerly, Downtown West Lands)Toronto, Ontario

In December 2012, The Well JV acquired 6.47 acres of land in downtown Toronto, currently occupied by the Globe & Mailnewspaper. In April 2013, the joint venture partnership purchased an additional 1.27 acres of land adjacent to the 6.47 acrespreviously acquired in 2012. The combined 7.74-acre site is currently the home of The Globe & Mail newspaper and is located onpart of a large city block bounded by Spadina Avenue, Front Street, Draper Street and Wellington Street. The site is in closeproximity to Toronto’s downtown office corridor and adjacent to a large and growing residential population. The property will beredeveloped as a mixed-use development that will include approximately 570,000 square feet of retail space, 1.1 million squarefeet of office space and approximately 1.5 million square feet of residential space that will become a landmark destination to live,work and shop in Toronto.

The Well will be a new neighbourhood that will be one of the few truly integrated mixed use projects under review by the Cityoffering a meaningful mix of residential, retail and office space. The Well will extend the revitalization of Toronto’s Downtown West,south of King Street and west of Spadina Avenue.

Each of RioCan and Allied has an undivided 40% interest and Diamond, through its WCNUF I and WCNUF II, has an undivided 20%interest. RioCan has a beneficial ownership in the development of 43.9%, including its 19.3% participation in Diamond’s WCNUF Iand WCNUF II. RioCan and its partners have submitted an application for rezoning with the City of Toronto on February 11, 2014.

King Street & Portland StreetToronto, Ontario

This site is comprised of 602-606 & 620 King Street West, formerly owned exclusively by Allied Properties REIT, and adjacentproperties extending from King Street West through to Adelaide Street West that Allied and RioCan acquired jointly. Given thesite’s premier location in the heart of the affluent King West neighbourhood, Allied and RioCan have formed a 50-50 joint venturepartnership to create one 88,000 square foot property, with frontage on King Street West, Portland Street and Adelaide StreetWest. Upon completion, the site will obtain a mixed use office, retail and residential complex with approximately 499,000 squarefeet of gross floor area.

Expansion & Redevelopment

RioCan’s expansion and redevelopment project costs for 2014 are currently expected to be approximately $104 million. As atDecember 31, 2013 RioCan’s expansion and redevelopment pipeline will, upon completion, comprise approximately 1.4 millionsquare feet, of which RioCan’s ownership interest will be approximately 1.0 million square feet.



Highlights of RioCan’s expansion and redevelopment projects are as follows:


Estimated project costDevelopmentexpenditures

to date atRiocan’sinterest

Sub-totalCosts

Incurredto date

Estimated remainingdevelopment activity at

RioCan’s interest(thousands of square feet,millions of dollars)

RioCan’s%

ownershipProject

NLARioCan’sinterest

Partners’interest

Historicalcosts(i)Tenant(s) Total 2014 2015 2016+

Centre St. Martin, Laval,QC 100% Pharmaprix 36 $ 6 $ – $ 6 $ 1 $ 4 $ 5 $ 2 $ – $ –

Collingwood Centre,Collingwood, ON

100%

Sobeys Expansion,Winners, Bed Bath &Beyond, Sport Chek,Carter’s 80 15 – 15 2 2 4 13 – –

Galeries Laurentides,St.-Jerome, QC 100% Gold’s Gym 26 4 – 4 – 1 1 3 – –

Kennedy Commons,Toronto, ON 50% LA Fitness, Michaels 85 6 6 12 9 2 11 4 – –

Niagara Falls Plaza,Niagara Falls, ON 100% LA Fitness 41 9 – 9 1 1 2 8 – –

Northumberland Square,Miramichi, NB 100% Giant Tiger, Winners 43 7 – 7 – 1 1 6 – –

Tanger OutletsCookstown, Innisfil, ON 50%

Multiple internationalbrands 159 24 24 48 7 4 11 20 – –

Timmins Square,Timmins, ON 30% Ardene, Atmosphere 30 1 2 3 – – – 1 – –

Yonge & Eglinton Centre,Toronto, ON 100%

Winners, Joe Fresh,Cineplex Expansion 51 65 – 65 9 36 45 20 9 –

Yonge Sheppard Centre,Toronto, ON 50% Longos 110 16 16 32 – – – 12 4 –

Fair Value Adjustment 6 – 6 – – –

Total CommittedExpansion andRedevelopmentproperties 661 153 48 201 35 51 86 89 13 –

Brookside Mall,Fredericton, NB 50% TBD 70 2 2 4 – 1 1 – 1 –

Carrefour Neufchatel,Neufchatel, QC 100% TBD 22 4 – 4 1 – 1 – 4 –

Flamborough WalmartCentre, Hamilton, ON 100% TBD 5 1 – 1 – – 1 – 1 –

Les Factoreries Tanger –Bromont, Bromont, QC 50% TBD 70 9 9 18 1 – 1 – 9 –

Les Factoreries Tanger –Saint-Sauveur, SaintSauveur, QC 50% TBD 19 3 3 6 – – – – 3 –

Madawaska Centre,Edmundston, NB 100% TBD 91 4 – 4 1 – 1 – – 4

Mega Centre Notre-Dame, Laval, QC 100% TBD 181 38 – 38 11 3 14 8 17 10

RioCan Centre Barrie,Barrie, ON 100% TBD 26 8 – 8 1 1 2 7 – –

RioCan Centre Burloak,Oakville, ON 50% TBD 141 5 5 10 3 – 3 – 2 3




Estimated project costDevelopmentexpenditures

to date atRiocan’sinterest

Sub-totalCosts

Incurredto date

Estimated remainingdevelopment activity at

RioCan’s interest(thousands of square feet,millions of dollars)

RioCan’s%

ownershipProject

NLARioCan’sinterest

Partners’interest

Historicalcosts(i)Tenant(s) Total 2014 2015 2016+

RioCan Meadows,Edmonton AB 50% TBD 23 3 3 6 3 1 4 – 2 –

Timiskaming Square,New Liskeard, ON 100% TBD 79 3 – 3 1 1 2 – 2 –

Total Non-committedExpansion andRedevelopmentproperties 727 80 22 102 22 7 30 15 41 17

Total 1,388 $ 233 $ 70 $ 303 $ 57 $ 58 $ 116 $ 104 $ 54 $ 17

(i) Historical Costs – Carrying amounts transferred from IPP for former anchors targeted for redevelopment.

A summary of significant expansion and redevelopment projects currently underway are as follows:

Centre St. MartinLaval, Quebec

Centre St. Martin is a shopping centre located in the most densely populated area of Laval. The property is anchored by ClubEntrepot – Provigo (Loblaws) supermarket. Approximately 95,000 square feet of the centre is being redeveloped. Pharmaprix andRossy will be completing expansions in 2014.

Collingwood CentreCollingwood, Ontario

Collingwood Centre is a community shopping centre currently consisting of 248,000 square feet of retail space. The centre islocated at the northeast corner of Blue Mountain Road and Highway 26 and is anchored by Canadian Tire and Fresh Co. RioCannegotiated a lease termination agreement with Zellers (93,000 square feet) effective April 1, 2013. The enclosed mall portion of theproperty will be demolished and redeveloped in 2013 and 2014. New leases have been completed with Winners, Sport Chek, BedBath & Beyond, Dollarama and a Fresh Co expansion as part of the redevelopment.

Galeries LaurentidesSt. Jerome, Quebec

Galeries Laurentides is an enclosed community shopping centre located at the intersection of Boulevard des Laurentides andBoulevard Lachapelle. Zellers vacated in August 2012 and the former Zellers premises have been re-leased to a 43,000 square footUrban Planet and a 35,000 square foot Maxi (who have relocated from their existing premises). The existing Maxi will be backfilledby a 26,000 square foot Gold’s Gym in 2014.

Kennedy CommonsToronto, Ontario

Kennedy Commons is a 468,000 square foot new format retail centre anchored by Metro, Chapters, Sears Whole Home and TheBrick and shadow anchored by a Rona (which ceased operations in December 2013). A lease buy-out was completed with AMCTheatres in late 2012. The AMC Theatre has been demolished and will be replaced with LA Fitness and Michaels in 2014. RioCanhas a 50% ownership in this property.

Niagara Falls PlazaNiagara Falls, Ontario

This 144,000 square foot unenclosed community shopping centre anchored by a 33,275 square foot Foodland (Sobeys) is located atthe northeast corner of Morrison Street and Dorchester Road. RioCan has negotiated a lease termination with Zellers effectiveApril 1, 2013. A new lease has been finalized with LA Fitness to construct a 41,000 square foot gym in the former Zellers premises.The remainder of the former Zellers unit will be demolished in 2014.

Northumberland SquareMiramichi, New Brunswick

Northumberland Square is a 208,000 square foot shopping centre located at the intersection of King George Highway and RennieRoad. RioCan has negotiated a lease termination with Zellers effective April 1, 2013, providing an opportunity to re-develop theproperty. 21,000 square feet has been leased to Winners and 21,500 square feet has been leased to Giant Tiger. Both tenants arescheduled to commence operations in 2014.



Tanger Outlets – CookstownInnisfil, Ontario

Tanger Outlets – Cookstown is located in Innisfil, Ontario, approximately 70 kilometres north of Toronto and 20 kilometres south ofBarrie. The existing site is a 162,000 square foot single story, multi-tenant outlet centre. International brands located at theproperty include Coach, Tommy Hilfiger, Adidas, Mexx and Jones New York. The site also features 15 acres of vacant developableland on which an expansion of approximately 159,000 square feet is currently under construction with an expected completion inQ4 2014. This property was acquired in December 2011 as part of a 50-50 joint venture with Tanger Outlets.

Timmins SquareTimmins, Ontario

Timmins Square is a 391,000 square foot enclosed mall anchored by Sears, Winners, Sport Chek and No Frills (Loblaws). Zellersvacated their 76,000 square foot premises in January 2013 and the unit has been backfilled by Urban Planet, and Ardene. RioCanhas a 30% ownership interest in the property.

Yonge & Eglinton CentreToronto, Ontario

Acquired in January 2007, RioCan Yonge Eglinton Centre is located at the northwest corner of Yonge Street and Eglinton Avenueand is comprised of two-high rise office towers situated above two levels of upscale retail. The retail component comprisesapproximately 264,000 square feet and features 70 retailers including anchor tenants Indigo Books & Music, Metro, Cineplex SilverCity Theatres and Toys “R” Us. The office component comprises approximately 755,000 square feet situated within a 30-storeybuilding on Yonge Street and a 22-storey tower on Eglinton Avenue. The mixed-use property aggregates over 1,000,000 square feetin total.

RioCan has commenced a revitalization and expansion plan at RioCan Yonge Eglinton Centre that will capitalize on theneighborhood’s residential intensification. The expansion includes 51,000 square feet of new retail space that will feature Nationaltenants Winners, Joe Fresh as well as an expansion of the existing Cineplex Silver City Theatres and a potential combined12-storey, 210,000 square foot expansion of the office towers. The new building will have a connection to the office towers andingress/egress to the food court and subway. Construction of the new retail space began in early-2013. The interior renovationswhich will revitalize the centre began in late 2012 and are expected to be completed in the spring of 2014.

Yonge Sheppard CentreToronto, Ontario

Yonge Sheppard Centre is situated on 6.18 acres and contains approximately 678,000 square feet of retail and office space. The262,000 square foot retail mall is one of the largest in North York, and is anchored by Shoppers Drug Mart and Winners. The416,000 square feet of office space within Sheppard Centre is currently 100% leased. RioCan recently submitted an application toamend the Official Plan and the zoning by law in order to add 110,000 square feet of additional retail space and 300,000 square feetof residential density to the site. RioCan acquired a 50% interest in the property in December 2011 on a joint venture basis withKingSett. RioCan currently has conditional agreements in place with Longo’s Supermarket and LA Fitness to lease all of the spacein the former cinema. Due to the substantial interest from many retailers, RioCan expects the retail space to be fully leased priorto completion.

Brookside MallFredericton, New Brunswick

This enclosed mall, anchored by Sobeys, contains 276,000 square feet of leasable area and is located on the north side of the SaintJohn River. Zellers vacated the site in January 2013 providing an opportunity to redevelop their 70,000 square foot space.12,000 square feet of the former Zellers premises have been leased to a furniture store. RioCan has a 50% ownership interest inthis property.

Carrefour NeufchatelNeufchatel, Quebec

Negotiations are underway with numerous national retailers for the remaining 22,000 square feet that can be developed at the site.Upon completion, the gross leasable area of the property will be approximately 231,000 square feet.

Flamborough Walmart CentreHamilton, Ontario

This 31-acre site has been developed into a 312,000 square foot new format retail centre. The site is anchored by a 99,000 squarefoot Rona, which commenced operations in the fourth quarter of 2007 and a 151,000 square foot Wal-Mart which commencedoperations in the third quarter of 2009. A 15,000 square foot Staples commenced operations in August 2013 and approximately18,000 square feet of new tenancies commenced operations in early-2013. An additional 5,000 square feet of space remains to bedeveloped at the property.

Les Factoreries Tanger – BromontBromont, Quebec

Les Factoreries Tanger – Bromont is a 162,000 square foot outlet mall located in Bromont, Quebec. Bromont is a popular skitourist destination town, situated approximately 85 kilometres southeast of Montreal. The site benefits from an excellent tenant



roster featuring major international brands such as Tommy Hilfiger, Reebok, Sports Experts, Urban Planet and Le Chateau. Thesite also features 8.13 acres of vacant developable land on which an expansion of approximately 70,000 square feet can bedeveloped. This property was acquired in November 2012 as part of a 50% joint venture with Tanger Outlets.

Les Factoreries Tanger – Saint-SauveurSaint-Sauveur, Quebec

Les Factoreries Tanger – Saint-Sauveur consists of two properties; an outlet mall of approximately 100,000 square feet and asingle tenant office building of approximately 16,000 square feet. Saint-Sauveur is a tourist and ski destination town in Quebecapproximately 60 kilometres north of Montreal. The retail outlet mall benefits from a diverse tenant base featuring majorinternational brands such as Point Zero, Bench, Nike, FGL Sports (Canadian Tire), Tommy Hilfiger, Reebok among others. The sitealso features 1.1 acres of excess density which will be acquired if the vendor is able to acquire the land from the city, on which twoadditional buildings totaling approximately 19,000 square feet can be constructed. This property was acquired in November 2012as part of a 50% joint venture with Tanger Outlets.

Mega Centre Notre-DameLaval, Quebec

Mega Centre Notre-Dame is located in Laval and contains 611,000 square feet of new format retail space. The property is anchoredby Target and user-owned retailers Super C (Metro Richelieu) and Pharmaprix (Shoppers Drug Mart). National tenants operatingat the property include Winners, HomeSense and Sports Experts. The plans contemplate that approximately 19 acres of adjacentvacant land will be developed into an additional 181,000 square feet of retail space.

RioCan CentreBarrie Barrie, Ontario

The centre is anchored by single-storey freestanding Zehrs (Loblaws) store and a Lowe’s store that commenced operations inJanuary 2009. The centre is located in one of the most developed areas in Barrie and has excellent visibility from Highway 400. InSeptember 2009, RBC and RBC insurance commenced operations in a newly constructed freestanding pad. Mountain EquipmentCo-op entered into a land lease with RioCan and construction of a freestanding building was completed in 2010. An additional26,000 square feet of excess density exists on the site.

RioCan Centre BurloakOakville, Ontario

RioCan Centre Burloak is an 89 acre site located at the southeast intersection of the QEW Highway and Burloak Drive. This553,000 square foot new format retail site is anchored by a Home Depot (retailer owned), a Famous Players (Cineplex) Theatre anda Longo’s Supermarket. An additional parcel of land totaling 8.5 acres is owned immediately south of the property and RioCan hasentered into a conditional agreement to purchase the adjacent 4 acres. These parcels of land will be re-zoned in 2014 and anadditional 141,000 square feet of retail will be developed on the site. RioCan has a 50% ownership interest in the property.

RioCan MeadowsEdmonton, Alberta

RioCan Meadows is strategically located at the southwest corner of Whitemud and 17th Avenue, in southeast Edmonton. Uponcompletion, the site will contain a total leasable area of approximately 329,000 square feet. Existing anchor tenants includeWinners, Best Buy, Staples, Mark’s Work Wearhouse and PetSmart. In addition, a Home Depot (land lease) operates as part of thesite. In 2010, Loblaws (who owns its own site) completed construction of a 100,000 square foot Real Canadian Super Store that actsas a shadow anchor. An additional 23,000 square feet can be developed at the site. RioCan has a 50% ownership interest in theproperty.

Timiskaming SquareNew Liskeard, Ontario

Timiskaming Square is a 164,000 square foot shopping centre located at the intersection of Highway 11 and Highway 11B. Thisenclosed shopping centre is anchored by Food Basics (Metro Richelieu) and Staples. Zellers vacated the site effective January2013, providing an opportunity to redevelop the site.

Excess Density

In addition to RioCan’s various development projects, the Trust contributes to portfolio growth through the intensification ofexisting properties where RioCan has identified opportunities to increase density or add to an existing asset. This intensification ofexisting properties is an important component of RioCan’s organic growth strategy. As at December 31, 2013, RioCan’s total excessdensity fair market value is $41 million and its potential consists of approximately 1.38 million square feet, of which RioCan’sownership interest will be approximately 1.26 million square feet.

Properties Held for Resale

Properties held for resale are properties acquired or developed for which RioCan generally intends to sell rather than hold on along term basis. RioCan’s plan is to dispose of all or part of such properties in the ordinary course of business. It is expected that



the Trust will earn a return on these assets through a combination of property operating income earned during the relatively shortholding period, which will be included in net earnings, and sales proceeds. As at December 31, 2013, the Trust has $45.9 million ofproperties held for resale comprising the following four assets ($47.2 million as at December 31, 2012 comprising four assets):

• Tillicum Centre, Victoria, BC (Excess residential density)

• Sheppard Centre, Toronto, ON (Excess residential density)

• Stouffville Residential Lands, Stouffville, ON (Residential homes)

• Yonge & Eglinton Northeast Corner, Toronto, ON (Residential density)

With respect to excess residential/condo density, RioCan is considering the potential of retaining such density and developingresidential rental properties.

Properties Held for Sale

Properties held for sale are investment properties which RioCan no longer intends to hold as investment property and is in theprocess of disposing. The Trust currently has $12.6 million of properties held for sale comprising the following four assets:

• Canadian Tire unit – Millcroft Shopping Centre, Burlington, ON

• Stouffville Retail Lands, Stouffville, ON

• Chaleur Lands, Big River, NB

• Renfrew Lands, Renfrew, ON

Mortgages and Loans Receivable

RioCan’s Declaration contains provisions that have the effect of limiting the aggregate value of the investment by the Trust inmortgages, other than mortgages taken back on the sale of RioCan’s properties, to a maximum of 30% of Adjusted Unitholders’Equity which is defined in the section, “Presentation of Financial Information and Non-GAAP Measures.” Additionally, RioCan islimited to the amount of capital that can be invested in non-income producing properties to no more than 15% of the AdjustedUnitholders’ Equity, which limitation applies to both greenfield development projects and mortgages receivable to fund theco-owners’ share of such developments, referred to in this MD&A as mezzanine financing. At December 31, 2013, RioCan was incompliance with these restrictions.

Contractual mortgages and loans receivable as at December 31, 2013 and December 31, 2012 are comprised of the following:

(millions of dollars)As at December 31,

Contractual rates WeightedAverage

RateLow High 2013 2012

Mezzanine financing to co-owners 0% 8% 6.0% $ 213 $ 167Vendor-take-back and other 0% 7% 5.0% 35 33

Total 0% 8% 5.8% $ 248 $ 200

Prior to maturity, payments on these mortgages and loans receivable from co-owners are made from the cash flows generatedfrom operations and capital transactions relating to the underlying properties.

The changes in the carrying amount of mortgages and loans receivable are as follows:


Balance, beginning of year $ 200 $ 147Principal advances (i) 48 71Mortgages and loans taken back on property dispositions 7 –Principal repayments (i) (17) (20)Interest receivable – repaid (3) (9)Interest receivable – accrued 13 11

Balance, end of year $ 248 $ 200

(i) Advances and repayments related to properties held for resale are included in cash flows from operating activities (see “Distributions toUnitholders” below). All other such amounts are included in cash flows used in investing activities.



Future repayments are as follows:


Mezzaninefinancing

to co-owners

Vendor-take-backand other Total

Due on demand $ 117 $ – $ 117Year ending December 31:

2014 19 11 302015 19 19 382016 45 – 452017 9 – 92018 4 5 9

$ 213 $ 35 $ 248

RELATED PARTY TRANSACTIONSRioCan may have transactions in the normal course of business with entities whose directors or trustees are also its trustees and/or management. Any such transactions are in the normal course of operations and are measured at market based exchangeamounts.

Transactions subsequent to the formation of a co-ownership that are not contemplated by the co-ownership agreement areconsidered to be related party transactions for financial statement purposes.

CAPITAL STRATEGY AND RESOURCESRioCan strives for an optimal financial structure to drive appropriate risk adjusted total returns. The principal objectives of thecapital strategy are to:

• optimize the risk-adjusted cost of capital through an appropriate mix of debt and equity;

• raise debt from a variety of sources and maintain a well staggered maturity schedule with longer-term financing and committedincome under long term tenant leases;

• maintain significant committed undrawn loan facilities to support current and future business requirements;

• actively manage financial risks, including interest rate, foreign exchange, liquidity and counterparty risks; and

• selectively sell assets as part of actively managing the portfolio and to increase the portfolio weighting to the six urban marketsin Canada as a means to strategically re-cycle capital.

Management believes that the quality of RioCan’s assets and strong balance sheet are attractive to lenders and equity investorsand should enable RioCan to continue to access multiple sources of capital at competitive rates. In addition, management believesthat current market conditions will continue to provide opportunities for RioCan – a well capitalized, highly experienced andgrowing company – to acquire or develop high-quality assets at attractive returns. Opportunities to acquire or develop propertiesmay come through outright acquisitions or joint venture arrangements. RioCan maintains a disciplined investment strategy, whichfocuses on high-quality assets in its targeted markets, emphasizing long-term value creation.

Capital Strategy Supporting Continued Growth

To support growth, RioCan employs a three-fold capital strategy:

• provide the capital necessary to fund growth;

• maintain sufficient flexibility to access capital in many forms, both public and private; and

• manage the overall financial structure in a fashion that preserves investment grade credit ratings.

RioCan plans to further strengthen its balance sheet by reducing its overall debt leverage over time, thereby strengthening variousinterest and cash flow coverage ratios. It is management’s intention that the Trust continually have access to the capital resourcesnecessary to expand and develop its business. Accordingly, the Trust may, from time-to-time, seek to obtain funds throughadditional common and preferred equity offerings, unsecured debt financings and/or mortgage/construction loan financings andother capital alternatives in a manner consistent with its intention to operate with a conservative debt structure, along with therecycling of capital through the paring of the portfolio through selective asset sales.

Liquidity and Cash Management

RioCan maintains committed revolving bank facilities to provide financial liquidity. These can be drawn/repaid at short notice,reducing the need to hold liquid resources in cash and deposits. This minimizes costs arising from the difference betweenborrowing and deposit rates, while reducing credit exposure.



Capital Management Framework

RioCan defines capital as the aggregate of common and preferred unitholders’ equity and debt. The Trust’s capital managementframework is designed to maintain a level of capital that:

• complies with investment and debt restrictions pursuant to the Trust’s Declaration;

• complies with debt covenants;

• enables RioCan to achieve target credit ratings;

• funds the Trust’s business strategies; and

• builds long-term unitholder value.

The key elements of RioCan’s capital management framework are set out in the Trust’s Declaration, and/or approved by theTrust’s Board, through the Board’s annual review of the strategic plan and budget, supplemented by periodic Board and Boardcommittee meetings. Capital adequacy is monitored by management of the Trust by assessing performance against the approvedannual plan throughout the year, which is updated accordingly, and by monitoring adherence to investment and debt restrictionscontained in the Declaration and debt covenants (see Note 28 to RioCan’s 2013 Annual Financial Statements as at December 31,2013). In selecting appropriate funding choices, RioCan’s objective is to manage its capital structure in such a way so as to diversifyits funding sources while minimizing its funding costs and risks. For 2014, RioCan expects to be able to satisfy all of its financingrequirements through the use of cash on hand, cash generated by operations, refinancing of maturing debt, financing of certainassets currently unencumbered by debt, construction financing facilities, sale of non-core properties, utilization of its operatinglines, and through public offerings of unsecured debentures, preferred units and common equity.

Capital Structure

As at December 31, 2013 and December 31, 2012, RioCan’s capital structure, prepared at RioCan’s interest utilizing proportionateconsolidation, was as follows:

(millions of dollars, except percentage amounts) 2013 2012Increase

(decrease)

Capital:Mortgages payable and lines of credit $ 4,541 $ 4,425 $ 116Debentures payable 1,447 1,292 155

Total Debt 5,988 5,717 271Common and preferred unitholders’ equity 7,261 6,847 414

Total capital $ 13,249 $ 12,564 $ 685Total assets $ 13,554 $ 12,888 $ 666Cash and equivalents $ 41 $ 184 $ (143)

Ratio of total debt, net of cash, to total assets, net of cash, at RioCan’s interest 44.0% 43.6% 0.4%

Ratio of floating rate debt to total debt 8.0% 6.6% 1.4%



Debt and Leverage Metrics

TargetedRatios

Three months ended Rolling 12 months ended

December 31,2013 (vii)

December 31,2013

December 31,2013

December 31,2012

Interest coverage ratio – RioCan’s interest (i) >2.75x 3.10 2.80 2.83 2.69Debt service coverage ratio – RioCan’s interest (ii) >2.25x 2.26 2.10 2.10 1.98Fixed charge coverage ratio – RioCan’s interest (iii) >1.1x 1.10 1.06 1.06 1.04Net consolidated debt to Adjusted EBITDA ratio (iv) n/a 7.51 7.51 7.52 7.00Net debt to Adjusted EBITDA ratio – RioCan’s interest (v) n/a 7.85 7.85 7.56 7.29Net Operating debt to Operating EBITDA – RioCan’s

interest (vi) <6.5x 7.49 7.49 7.24 7.09Distributions as a percentage of AFFO <90% 95.3% 95.3% 95.3% 99.3%Unencumbered assets to Unsecured debt >130% 142% 104%Unencumbered assets $ 2,068 $ 1,353Unsecured debentures $ 1,456 $ 1,299

(i) Interest coverage defined as: Adjusted EBITDA for the period, divided by total interest expense at RioCan’s share (including interest that hasbeen capitalized). Adjusted EBITDA is calculated below.

(ii) Debt service coverage defined as: Adjusted EBITDA for the period, divided by total interest expense at RioCan’s interest (including interestthat has been capitalized) and scheduled mortgage principal amortization.

(iii) Fixed charge coverage is defined as: Adjusted EBITDA for the period, divided by interest expense (including interest that has been capitalized)and distributions to common and preferred unitholders.

(iv) Net consolidated debt to Adjusted EBITDA is defined as: the average consolidated debt (net of cash) for the period divided by Adjusted EBITDA.(v) Net debt to Adjusted EBITDA is defined as: the average debt outstanding (net of cash) at RioCan’s interest for the period divided by Adjusted

EBITDA(vi) Net operating debt to Operating EBITDA is defined as: the average debt outstanding (net of cash) at RioCan’s interest for the period less debt

related to property under development divided by Operating EBITDA.(vii) Adjusted to exclude interest capitalized.

For the three months ended December 31, 2013, the interest coverage ratio continued to improve, thereby enabling the Trust toexceed its target ratio on a rolling 12 month basis. Debt service coverage ratio, for the three months ended December 31, 2013 andon a rolling 12 month basis, improved modestly due to higher NOI and refinancing debt at lower interest rates. As at December 31,2013, unencumbered assets to debentures payable increased to 142%, as compared to 104% as at December 31, 2012.Unencumbered assets to debenture payable is defined as unencumbered assets at RioCan’s interest divided by unsecureddebentures payable.

As part of its capital management strategy, it is RioCan’s objective to further improve its leverage and coverage ratios. The Trust’sobjective is to achieve the targeted ratios indicated in the above table over time.

During 2013, the Trust generated $110 million through its common Unit DRIP program, representing a DRIP participation rate of25.8%. The generation of this additional capital supports the Trust’s growth strategy and provides liquidity in support of RioCan’sdevelopment program, where there has been a substantial increase in activity since 2012 on multiple projects. RioCan’s objectiveis for this increased level of activity to continue in 2014 and for several years thereafter, with an increased focus on urbandevelopment.



Adjusted EBITDA at RioCan’s interest is calculated as follows:


Threemonths ended

12 months ended

December 31,2013

December 31,2013

December 31,2012

Net earnings attributable to unitholders $ 264,754 $ 709,451 $ 1,344,220Add (deduct) the following items:Deferred income tax expense (recovery) (870) (280) (750)Fair value gains on investment property, net (137,699) (228,803) (904,749)Non-cash unit based compensation expense 1,585 5,925 5,171Interest expense 60,477 243,214 242,829Expense for early redemption of debentures – 12,094 –Amortization of capital assets included in general and administrative expense 578 2,159 1,665Foreign exchange loss (gain) 65 170 (84)Impairment of investment – – 11,999Acquisition/disposition transaction costs (1,228) 3,840 1,794

Adjusted EBITDA $ 187,662 $ 747,770 $ 702,095

Adjust: Transaction gains (ii) (175) (445) (7,798)

Adjust: Items related to properties under development 1,163 4,080 2,981

Operating EBITDA $ 188,650 $ 751,405 $ 697,278

Three months annualized – Adjusted EBITDA $ 750,648

Three months annualized – Operating EBITDA $ 754,600

Consolidated net debt is calculated as follows:(thousands of dollars)

Average debt outstanding $ 5,957,301 $ 5,679,193 $ 4,971,591Less: average cash on hand (15,903) (57,838) (53,995)

Net debt $ 5,941,398 $ 5,621,355 $ 4,917,596Less: Debt related to properties under development (i) (259,573) (233,720) (171,395)

Net Operating Debt $ 5,681,825 $ 5,387,635 $ 4,746,201

Net debt at RioCan’s interest is calculated as follows:


Average debt outstanding $ 5,917,417 $ 5,729,816 $ 5,180,665Less: average cash on hand (24,433) (73,574) (62,197)

Net debt $ 5,892,984 $ 5,656,242 $ 5,118,468Less: Debt related to properties under development (i) (238,902) (215,043) (176,646)

Net Operating Debt $ 5,654,082 $ 5,441,199 $ 4,941,822

(i) Allocated based on the ratio of Debt to Total Assets(ii) Transaction gains in 2013 relate to current tax recoveries associated with RioCan’s investments in WCNUF I and II. Transaction gains in 2012

mainly relate to realized gains on the sale of certain marketable securities held as a portfolio investment as well as distributions received bythe Trust on its investment in WCNUF I.



Debt

RioCan intends to maintain strong debt service coverage and fixed charge coverage ratios as part of its commitment to maintainingits investment-grade debt ratings from Standard and Poor’s (S&P) and from Dominion Bond Rating Services Limited (DBRS). Acredit rating generally provides an indication of the risk that the borrower will not fulfill its obligations in a timely manner withrespect to both interest and principal commitments. Rating categories range from highest credit quality (generally AAA) to defaultpayment (generally D).

As at December 31, 2013, S&P provided RioCan with an entity credit rating of BBB and a credit rating of BBB- relating to RioCan’ssenior unsecured debentures (Debentures). An obligor with a credit rating of BBB by S&P exhibits adequate capacity to meet itsfinancial obligations, however, adverse economic conditions or changing circumstances are more likely to lead to a weakenedcapacity of the obligor to meet its financial commitment on the obligation. A credit rating of BBB- or higher is an investment graderating.

As at December 31, 2013, DBRS provided RioCan with a credit rating of BBB (high) relating to the Debentures. A credit rating ofBBB by DBRS is generally an indication of adequate credit quality, the capacity for the payment of financial obligations isconsidered acceptable but the entity may be vulnerable to future events.

Revolving Lines of Credit

As at December 31, 2013, RioCan had three revolving lines of credit in place with three Canadian Schedule I financial institutions,having an aggregate capacity of $535 million ( December 31, 2012 – $425 million).

Subsequent to December 31, 2013, RioCan renegotiated an existing operating facility and added a fourth operating line. An existingfacility has been increased from $100 million to $130 million and the new facility has a capacity of $75 million; both have pricingsimilar to RioCan’s other operating lines and maturity dates of June 2017. These facilities bring RioCan’s aggregate limit to$640 million.

The following table summarizes the details of the secured lines of credit as at February 12, 2014:(in millions of dollars)

Amounts drawn

FacilityMaximum

committedAmount

Cashadvances

Lettersof Credit

Availableto be drawn Interest rates Maturity

1 $ 250(i) $ – $ 10 $ 240 CDN$ advances – prime plus 0.25% per annum or Bankers’Acceptance plus 1.25%;US$ advances – US$ Base Rate plus 0.25% per annum or US$ LIBORplus 1.25%

November 2016

2 130(i) – 30 100 CDN$ advances – prime plus 0.25% per annum or Bankers’Acceptance plus 1.25%;US$ advances – US$ Base Rate plus 0.25% per annum or US$ LIBORplus 1.25%

June 2017

3 185(i) – – 183 CDN$ advances – prime plus 0.25% per annum or Bankers’Acceptance plus 1.25%;US$ advances – US$ Base Rate plus 0.25% per annum or US$ LIBORplus 1.25%

December 2016

4 75 – – 75 CDN$ advances – prime plus 0.25% per annum or Bankers’Acceptance plus 1.25%;US$ advances – US$ Base Rate plus 0.25% per annum or US$ LIBORplus 1.25%

June 2017

$ 640 $ – $ 40 $ 598

(i) Secured by charges against certain income properties. Should the aggregate agreed values for lending purposes of such properties fall to alevel which would not support a borrowing of the maximum loan amount, RioCan has the option to provide substitute income properties asadditional security.

Debentures Payable

As at December 31, 2013, RioCan had eight series of Debentures outstanding totalling $1.4 billion (December 31, 2012 – eightseries totalling $1.3 billion). As mentioned below, on January 23, 2014, a ninth series of debentures was issued bringing theoutstanding total to $1.55 billion.

The Debentures have covenants relating to RioCan’s 60% leverage limit to Aggregate Assets as set out in RioCan’s Declaration, themaintenance of a $1.0 billion Adjusted Book Equity, defined in the indenture, and maintenance of an interest coverage ratio of 1.65times or better. There are no requirements under the unsecured Debenture covenants that require RioCan to maintainunencumbered assets. The Series I debentures, which are due in 2026 and aggregate $100 million, have an additional provision



that provides RioCan with the right, at any time, to convert these debentures to mortgage debt, subject to the acceptability of thesecurity given to the debenture holders. In such an event, the covenants relating to the 60% leverage limit, minimum book equityand interest coverage ratio would be eliminated for this series of debenture.

2013 Activity

During the first quarter of 2013, the Trust issued $250 million principal amount of Series S senior unsecured debentures whichmature on March 5, 2018, and carry a coupon rate of 2.87%.

At maturity in March 2013, the $150 million Series G senior unsecured debentures with a coupon rate of 5.23% were repaid inaccordance with their terms.

On May 17, 2013, RioCan redeemed the $150 million Series M senior unsecured debentures due March 31, 2015, in accordancewith their terms, at a total redemption price of $1,072.30 plus accrued and unpaid interest of $7.275 to but excluding theredemption date, both per $1,000 principal amount. The total redemption price, including accrued interest, was $161.9 million.

On April 18, 2013, the Trust issued $200 million of Series T senior unsecured debentures which mature on April 18, 2023 and carrya coupon rate of 3.725%. These debentures are subject to the same covenants as the other above noted outstanding debentures,with the exception of Series I which has an additional provision as discussed above.

On January 23, 2014, the Trust issued $150 million of Series U senior unsecured debentures which mature on June 1, 2020 andcarry a coupon rate of 3.62%.

2012 Activity

On January 26, 2012, the Trust issued $150 million principal amount of Series P senior unsecured debentures which mature onMarch 1, 2017, and carry a coupon rate of 3.80%.

At maturity on June 15, 2012, the Trust redeemed the $100 million Series H senior unsecured debentures with a coupon rate of4.70%, in accordance with their terms.

On June 28, 2012, the Trust issued $150 million of Series Q senior unsecured debentures which mature on June 28, 2019 and carrya coupon rate of 3.85%.

On July 19, 2012, the Trust issued an additional $25 million of Series Q senior unsecured debentures, resulting in an aggregate of$175 million of Series Q debentures outstanding. The additional debentures carry a coupon rate of 3.85%, mature on June 28, 2019and were sold at a price of $25.4 million plus accrued interest, with an effective yield of 3.609%.

On December 12, 2012, the Trust issued $250 million of Series R senior unsecured debentures which mature on December 13,2021 and carry a coupon rate of 3.716%.

Changes in the carrying amount of debentures resulted primarily from the following:


Balance, beginning of year $ 1,299 $ 827Issuances 450 575Repayments (300) (100)Foreign currency translation 7 (3)

Contractual obligations 1,456 1,299Unamortized debt financing costs (9) (7)

Balance, end of year $ 1,447 $ 1,292



Mortgages Payable and Lines of Credit – RioCan’s Interest

During the year ended December 31, 2013, RioCan had new mortgage borrowings and operating line draws as follows:

Year ended December 31, 2013

(millions of dollars, except other data) Balance

Weightedaverage

contractualinterest rate

Averageterm to

maturityin years

New borrowings:Fixed rate term mortgages – Canada $ 237 3.12% 4.9Fixed rate term mortgages – US 89 4.14% 8.3Floating rate term mortgages – Canada 78 1.73% 3.6Floating rate term mortgages – US 7 1.80% 3.0Construction financing 15 2.22% 0.5Operating lines of credit 245 1.79% 1.0

New borrowings – RioCan’s interest (i) $ 671 2.57% 3.7

(i) See “2013 Change in Accounting Policy” for a reconciliation to RioCan’s consolidated balance sheet.

As at December 31, 2013, the Trust’s mortgages payable and drawn lines of credit (at RioCan’s interest), was $4.5 billion ($4.4billion as at December 31, 2012). The vast majority of the Trust’s mortgage indebtedness provides recourse to the assets of theTrust, as opposed to only having recourse to the specific property charged. RioCan follows this policy as it generally results inlower interest costs than would otherwise be obtained. In the United States, mortgage debt is generally non-recourse financing,with no US secured debt having recourse to the assets of the Canadian operations of the Trust.



As at December 31, 2013, the contractual interest rates on mortgages payable and amounts drawn on operating lines ranged from1.68% to 8.45% per annum with a weighted average interest rate of 4.43% per annum. Changes in the carrying amount of themortgages payable and lines of credit, at RioCan’s interest, resulted primarily from the following:


Balance, beginning of year $ 4,417 $ 4,145New Borrowings:

Fixed rate term mortgages – Canada 237 449Fixed rate term mortgages – US 89 92Floating rate term mortgages – Canada 78 83Floating rate term mortgages – US 7 –Construction financing 15 12Advances on operating lines of credit 245 188Assumed on the acquisition of properties 342 227

Principal repayments:Scheduled amortization (92) (94)Operating lines of credit (250) (221)At maturity: Fixed rate term mortgages (412) (354)Floating rate term mortgage – (18)Construction financing (3) (26)On the disposition of propertiesDisposition of Canadian properties (159) (42)Disposition of US properties (56) –

Foreign currency translation 70 (24)

Contractual obligations 4,528 4,417Unamortized differential between contractual and market interest rates on liabilities assumed at the

acquisition of properties 28 23Unamortized debt financing costs (15) (15)

Balance, end of year – RioCan’s interest (i) $ 4,541 $ 4,425

(i) See “2013 Change in Accounting Policy” for a reconciliation to RioCan’s consolidated balance sheet.

At the outset of 2013, RioCan had $359 million of mortgage principal and operating lines maturing in 2013 at a weighted averagecontractual interest rate of 5.79%. During 2013, RioCan had new term borrowings of $411 million at a weighted average interestrate of 3.06% and an average term of 5.4 years. For the year ended December 31, 2013, repayments of maturing mortgagebalances and scheduled amortization amounted to $504 million.

For 2014, RioCan has $327 million of principal maturities at a weighted average contractual interest rate of 4.62%.

As at December 31, 2013, RioCan’s Aggregate Debt has a 4.7 year weighted average term to maturity (December 31, 2012 –4.7 years) bearing interest at a weighted average contractual interest rate of 4.3% per annum (December 31, 2012 – 4.7%). 8.0% ofthe Trust’s Aggregate Debt is at floating interest rates at December 31, 2013 compared to 6.6% at December 31, 2012.

Hedging Activities

The effectiveness of the hedging relationships is reviewed on a quarterly basis. At December 31, 2013 the Trust has assessed thatthere is no ineffectiveness in the hedge of its interest rate exposure.



Aggregate Maturities

On a combined basis, RioCan’s mortgages and debentures payable bear a weighted average contractual interest rate of 4.3% witha weighted average term to maturity of 4.7 years. RioCan’s debt maturity profile and future repayments are as outlined below:

Contractual (i)

Principal maturities

(millions of dollars, exceptpercentage amounts)As at December 31, 2013

Mortgagespayable

Weightedaverageinterest

rateDebentures

payable


rate

TotalMortgages

andDebentures

payable

Scheduledprincipal

amortization Total


rate

Year ending December 31:2014 $ 327 4.62% $ – – $ 327 $ 86 $ 413 4.62%2015 603 4.63% 106 4.10% 709 81 790 4.55%2016 649 4.55% 225 4.50% 874 69 943 4.54%2017 915 3.61% 150 3.80% 1,065 58 1,123 3.63%2018 485 3.80% 250 2.87% 735 44 779 3.49%

Thereafter 1,129 4.70% 725 4.06% 1,854 82 1,936 4.38%

$ 4,108 4.42% $ 1,456 3.90% $ 5,564 $ 420 $ 5,984 4.30%

(i) At RioCan’s interest

The principal maturities by lender by year of maturity are as follows:

Contractual (i)

Principal maturities by type of lender


Lifeinsurance

industryMortgage

conduit BanksPension

funds OtherUnsecureddebentures Total

Year ending December 31:2014 $ 73 $ 10 $ 226 $ 6 $ 12 $ – $ 3272015 185 155 192 62 9 106 7092016 169 128 343 – 9 225 8742017 232 73 455 106 49 150 1,0652018 72 46 341 13 13 250 735

Thereafter 373 331 321 104 – 725 1,854

$ 1,104 $ 743 $ 1,878 $ 291 $ 92 $ 1,456 $ 5,564

(i) At RioCan’s interest

The table below presents RioCan’s interest in assets at fair value that are available to it to finance and/or refinance for debtmaturing in 2014 and 2015:

Number ofProperties

Fair Value ofIncome

Properties atDecember 31,

2013

Principal balanceof debt maturing

(millions of dollars) 2014 2015

Unencumbered income property assets 86 $ 1,807 $ – $ –Unencumbered development property assets 17 261 – –

Unencumbered assets 103 2,068 – –Encumbered assets with debt maturing in 2014 24 837 302 –Encumbered assets with debt maturing in 2015 37 1,626 – 603Construction financing on properties under development 1 – 28 –VTB on properties under development 1 – 3 –

Total 166 $ 4,531 $ 333 $ 603



RioCan has the continued flexibility to generate additional funds in 2014 through refinancing maturing loan balances as well asrepaying such balances to increase the size of RioCan’s pool of unencumbered assets. As at December 31, 2013, RioCan had 103properties that were unencumbered with a fair value of approximately $2.1 billion. During the first quarter of 2014, it is RioCan’sintention to repay mortgages aggregating $82 million on twelve properties with a fair value of approximately $242 million andencumber three properties with a fair value of approximately $75.1 million, with approximately $47 million of debt.

Considering RioCan’s current levels of cash, undrawn credit facilities, relatively low leverage and demonstrated historical accessto debt capital markets, the Trust expects that all maturities will be refinanced or repaid in the normal course of business, and assuch, RioCan does not currently anticipate that it will be required to sell assets and/or issue equity to meet its maturing debtobligations for 2014.

Trust Units

As at February 12, 2014, there are 304.9 million common Units issued and outstanding and 9.7 million options outstanding underthe Trust’s incentive unit option plan (the Plan). All common Units outstanding have equal rights and privileges and entitle theholder thereof to one vote for each Unit at all meetings of Unitholders. During the years ended December 31, 2013 and 2012, theTrust issued Units as follows:

(number of Units in thousands)Year ended December 31, 2013 2012

Units outstanding, beginning of year (i) 300,099 279,113Units issued:Exchangeable limited partnership units – 29Public offerings – 15,510Distribution reinvestment plan 4,365 4,081Direct purchase plan 53 47Unit option plan 476 1,319Common trust units repurchased and cancelled (918) –

Units outstanding, end of year (i) 304,075 300,099

(i) Included in units outstanding are exchangeable limited partnership units of four limited partnerships that are subsidiaries of the Trust (the LPunits) which were issued to vendors, as partial consideration for income properties acquired by RioCan (December 31, 2013 – 2,144,411 LPunits; December 31, 2012 – 2,312,661 LP units). RioCan is the general partner of the limited partnerships. The LP units are entitled todistributions equivalent to distributions on RioCan Units, must be exchanged for RioCan Units on a one-for-one basis and are exchangeable atany time at the option of the holder.

RioCan’s continued access to capital allows the Trust to be an active acquirer of properties both in Canada and the US asopportunities arise.

On April 20, 2012, RioCan issued an aggregate of 8.6 million common Units at a price of $26.80 per Unit for aggregate grossproceeds of $230 million. The aggregate offering was comprised of the issuance of 7.5 million Units at $26.80 per Unit for grossproceeds of $200 million, together with the option granted to underwriters, which was exercised in full, for an issuance of anadditional 1.1 million Units at $26.80 per Unit for additional gross proceeds of $30 million.

On September 19, 2012, RioCan issued an aggregate of 6.9 million common Units at a price of $27.90 per Unit for aggregate grossproceeds of $193 million. The aggregate offering was comprised of the issuance of 6.3 million Units at $27.90 per Unit for grossproceeds of $175 million, together with the option granted to underwriters, which was exercised in part, for an issuance of anadditional 650,000 Units at $27.90 per Unit for additional gross proceeds of $18 million.

During the fourth quarter of 2013, 1.1 million Units were issued pursuant to the Trust’s distribution reinvestment plan compared to1.1 million Units during the same period in 2012. Participation in the distribution reinvestment plan was 25.6% for the threemonths ended December 31, 2013, compared to 29.2% for the three months ended December 31, 2012.

RioCan has a Restricted Equity Unit (REU) plan which provides for an allotment of REUs to each non-employee trustee. The valueof the REUs allotted appreciate and depreciate with increases or decreases in the market price of the Trust’s Units. During thefourth quarter of 2013, nil REU’s were granted (nil for the same period in 2012).

REU members are also entitled to be credited with REUs for distributions paid in respect of Units of the Trust based on an AverageMarket Price of the Units as defined by the plan. The REUs vest and are settled three years from the date of issuance by a cashpayment equal to the number of vested REUs credited to the member multiplied by the Average Market Price of the Trust’s Units atthe settlement date, less applicable withholdings. The REU plan liability at December 31, 2013 was $1.7 million ($1.9 million atDecember 31, 2012).



The Trust provides long-term incentives to certain employees by granting options through the Plan. The objective of granting unit-based compensation is to encourage Plan members to acquire an ownership interest in RioCan over time and acts as a financialincentive for such persons to act in the long term interests of RioCan and its unitholders. The exercise price for each option isequal to the volume weighted average trading price of the Units on the Toronto Stock Exchange for the five trading daysimmediately preceding the date of grant except for those options granted prior to May 27, 2009 which have an exercise price equalto the closing price of the Trust’s Units on the date prior to the day the option was granted. Of the 29.2 million Units approved to begranted under the Plan, 4.7 million Units remain available for grant under the Plan as at December 31, 2013 (December 31, 2012 –6.5 million Units). During the fourth quarter of 2013, nil options were granted under the Plan compared to nil granted during thesame period in 2012. During the fourth quarter of 2013, 88,000 Units were issued pursuant to exercises of the incentive Unitoptions, compared to nil Units for the comparable period of 2012.

As part of its ongoing commitment to corporate governance matters, the Board and its Human Resources and CompensationCommittee have retained an independent compensation consultant to assist them in their review and reformulation of the Trust’sapproach to executive compensation matters, and to recommend enhancements to further align the Trust’s compensationprogram with interests of the Trust’s unit holders. Contemplated changes remain a work in progress and continue to be subject tonumerous factors, including without limitation, the review and determination of taxation and accounting matters, external legalreview, and definitive documentation. Any changes are not expected to have a material impact on the quantum of compensationthat is paid to the Trust’s most senior executives but rather on the mix of the components of the compensation program

On July 25, 2013, RioCan announced the TSX approval of its notice of intention to make a NCIB for a portion of its Units asappropriate opportunities arise from time to time. RioCan’s NCIB will be made in accordance with the requirements of theTSX. Under the NCIB, RioCan may acquire up to a maximum of 15,039,156 of its Units, or approximately 5% of its issued andoutstanding Units as of July 9, 2013, for cancellation over the next 12 months commencing on or about August 3, 2013 untilAugust 4, 2014 (as such other time as RioCan completes its purchases or provides notice of termination of such bid). The numberof Units that can be purchased pursuant to the bid is subject to a current daily maximum of 149,016 Units (equal to 25% of theaverage daily trading volume from January 1, 2013 through to June 30, 2013), subject to RioCan’s ability to make one blockpurchase of Units per calendar week in excess of such limits. RioCan intends to fund the purchases out of its available cash andundrawn credit facilities. During the third quarter of 2013, RioCan purchased and cancelled 917,700 common Units, at a total costof $22.1 million. The excess of the purchase price over the book value of the Units purchased during the quarter was recorded as acharge to cumulative earnings amounting to $9.3 million.

Preferred Units

On December 6, 2010, the Trust’s Declaration was amended and restated to permit the future authorization and issuance of a classof preferred equity securities. RioCan believes that preferred units provides the Trust with further enhanced ability to more activelypursue value enhancing opportunities and acquisitions by providing the Trust with greater flexibility in raising capital. In addition,the preferred units potentially provide the Trust with an opportunity to reduce its cost of capital.

In the first quarter of 2011, the Trust issued 5 million 5.25% Preferred Units, Series A at a price of $25 per unit for aggregate grossproceeds of $125 million. Also, on November 20, 2011, the Trust issued 5.98 million 4.7% Preferred Trust Units, Series C at a priceof $25 per unit for aggregate gross proceeds of $149.5 million.

S&P and DBRS provided credit ratings for the Preferred Units, Series A and Preferred Units, Series C Units of the Trust. ThePreferred Units, Series A and Preferred Units, Series C Units have both been assigned a rating of “Pfd-3 (high)” by DBRS and arating of “P-3 (high)” by S&P. DBRS has five rating categories of preferred shares for which it will assign a rating. The ‘‘Pfd-3’’rating is the third highest category available from DBRS for preferred securities and is considered to be of adequate credit quality.According to DBRS, preferred securities rated ‘‘Pfd-3’’are of adequate credit quality and while protection of distributions andprincipal is still considered acceptable, the issuing entity is more susceptible to adverse changes in financial and economicconditions, and there may be other adverse conditions present which detract from debt protection. Pfd-3 ratings generallycorrespond with companies whose senior bonds are rated in the higher end of the BBB category. A “P-3 (High)” rating by S&P isthe third of the three sub-categories within the second highest rating of the eight standard categories of ratings utilized by S&P forpreferred units. “High” and “low” grades may be used to indicate a relative standing of a credit within a particular rating category.

Guarantees

RioCan provides guarantees on behalf of third parties, including co-owners and partners, for which the Trust generally is paid afee, as, among other reasons, it generally results in lower interest costs and higher loan-to-value ratios than would otherwise beobtained. Also, RioCan’s guarantees remain in place for debts assumed by purchasers in connection with certain propertydispositions and will remain until such debts are extinguished or lenders agree to release RioCan’s covenants. Credit risks arise inthe event that these parties default on repayment of their debt since they are guaranteed by RioCan. These credit risks aremitigated as RioCan has recourse under these guarantees in the event of a default by the borrowers, in which case the Trust’sclaim has security against both the purchaser and the underlying real estate investments. As at December 31, 2013, the estimatedamount of debt subject to such guarantees and, therefore, the maximum exposure to credit risk was approximately $467 millionwith expiries between 2014 and 2034. As at December 31, 2013 and during 2013 there have been no defaults by the primaryobligors for debts on which RioCan has provided guarantees, and as a result, no contingent loss on these guarantees has beenrecognized in the Trust’s financial statements.



At December 31, 2013, the parties on behalf of which RioCan had outstanding guarantees are as follows:(millions of dollars)As at December 31, 2013 2012

Partners and co-ownersKimco $166 $129Trinity 65 53Other 51 52

Assumption of mortgages by purchasers on property dispositionsRetrocom Mid-Market REIT 46 48Devimco 67 –CREIT 46 –Other 26 17

$467 $299

Liquidity

Liquidity refers to the Trust having and/or generating sufficient amounts of cash and equivalents to fund the ongoing operationalcommitments, distributions to unitholders and planned growth in the business.

RioCan retains a portion of its annual operating cash flows to help fund ongoing maintenance capital expenditures, tenantinstallation costs and long term unfunded contractual obligations, among other items.

Cash on hand, borrowings under the revolving credit facilities, the equity and debt capital markets and the potential sale of assetsalso provide the necessary liquidity to fund ongoing and future capital expenditures and obligations.

At December 31, 2013, on a consolidated basis, RioCan had:

• $39 million of cash;• $426 million of cash available under undrawn bank lines of credit;• indebtedness net of cash is 43.9% of total assets net of cash based on fair value; and• 103 unencumbered properties with a fair value of $2.1 billion.

Unitholder distributions reinvested through the distribution reinvestment and direct purchase plans result in the issuance of Units,as opposed to a cash outlay, thereby providing an additional source of capital to fund RioCan’s activities (see “Distributions toUnitholders” elsewhere in this MD&A).

RioCan’s liquidity profile, at RioCan’s interest, at December 31, 2013 is as follows:


As atDecember 31,

2013

As atDecember 31,

2012

Cash and equivalents $ 41 $ 184Undrawn lines of credit 426 330

Liquidity $ 467 $ 514

Contractual debt:Unsecured debentures payable $ 1,456 $ 1,299Mortgages payable 4,528 4,440

Total contractual debt $ 5,984 $ 5,739

Liquidity as a percentage of total contractual debt 7.8% 9.0%

Percentage unsecured 24.3% 22.6%

Percentage secured 75.7% 77.4%



RioCan’s liquidity is impacted by the Trust’s contractual debt commitments and its forecasted development expenditures on activeprojects, at RioCan’s interest, at December 31, 2013 as follows:

Contractual Debt Commitments and Development Expenditures(in millions) 2014 2015 2016 2017 2018 Thereafter Total

Mortgages $ 413 $ 684 $ 718 $ 973 $ 465 $ 1,275 $ 4,528Debentures – 106 225 150 250 725 1,456Developments 178 68 36 – – 214* 496

Total $ 591 $ 858 $ 979 $ 1,123 $ 715 $ 2,214 $ 6,480

* Represents forecasted development expenditures from years 2016 to 2019, net of financing.

Deferred Income Taxes

The Trust qualifies as a mutual fund trust and a REIT for Canadian income tax purposes. The Trust expects to distribute all of itstaxable income to unitholders and is entitled to deduct such distributions for Canadian income tax purposes. Accordingly, noprovision for current income taxes payable is required, except for amounts incurred in its incorporated Canadian subsidiaries.

The Trust’s US subsidiary qualifies as a REIT for US income tax purposes. This subsidiary expects to distribute all of its US taxableincome (if any) to Canada and is entitled to deduct such distributions for US income tax purposes. Accordingly, no provision for UScurrent income tax payable is required.

The Trust consolidates certain wholly owned incorporated entities that are subject to tax. The tax disclosures, expense anddeferred tax balances relate only to these entities.

Deferred income tax assets and liabilities are recognized for temporary differences between the tax and accounting bases ofassets and liabilities as well as for the benefit of unused tax credits and losses that are available to be carried forward to future taxyears to the extent that it is probable that the deductions, unused tax credits and losses can be realized. Deferred tax assets andliabilities are measured at the undistributed tax rates that are expected to apply when the assets are realized or the liabilities aresettled, based on the tax laws that have been enacted or substantively enacted at the balance sheet date. Deferred income taxrelating to items recognized in equity will also be recognized in equity.

At December 31, 2013, the Trust had deferred tax assets of $9 million (December 31, 2012 – $9 million) primarily related to agoodwill balance that arose during the restructuring the Trust undertook to qualify as a REIT for purposes of the Income Tax Act(Canada).

If the Trust were to cease to qualify as a REIT for Canadian income tax purposes, certain distributions would not be deductible incomputing income for Canadian income tax purposes and the Trust would be subject to tax on such distributions at a ratesubstantially equivalent to the general corporate income tax rate. Other distributions would generally continue to be treated asreturns of capital to unitholders.

Distributions to Unitholders

The Trust expects to distribute to its unitholders in each year an amount not less than the Trust’s income for the year, ascalculated in accordance with the Act after all permitted deductions under the Act have been taken.

RioCan’s monthly distribution in 2013 was $0.1175 per Unit, representing, on an annualized basis, $1.41 per Unit.

Distributions to Unitholders are as follows:

(millions of dollars, except when otherwise noted)Year ended December 31, 2013 2012

Distributions to common Unitholders $ 426 $ 401Distributions reinvested through the distribution reinvestment plan (110) (108)

Distributions to common Unitholders, net of distribution reinvestment plan $ 316 $ 293

Distribution reinvestment plan participation rate 25.8% 26.9%



Difference between consolidated cash flows provided by operating activities and distributions to Unitholders

A comparison of distributions to Unitholders with cash flows provided by operating activities and net distributions is as follows:(millions of dollars)Cash Flows Provided By (Used In)Year ended December 31, 2013 2012 2011

Cash flows provided by operating activities $ 408 $ 422 $ 356Adjust for:Changes in non-cash operating items and other 54 12 (9)

Adjusted operating cash flow $ 462 $ 434 $ 347

Distributions to Unitholders $ 426 $ 401 $ 367Distributions reinvested through the distribution reinvestment plan (110) (108) (82)

Net distributions $ 316 $ 293 $ 285

In determining the annual level of distributions to Unitholders, the Trust considers at forward-looking cash flow informationincluding forecasts and budgets and the future business prospects of the Trust. Furthermore, RioCan does not consider periodiccash flow fluctuations resulting from items such as the timing of property operating costs and tax installments, and semi-annualdebenture and mortgages payable interest payments in determining the level of distributions to Unitholders in any particularquarter. Additionally, in establishing the level of cash distributions to Unitholders the Trust considers the impact of, among otheritems, the future growth in the income producing portfolio, completion of properties under development, impact of futureacquisitions and capital expenditures and leasing related to the income producing portfolio. Distributions to Unitholders areexpected to continue to be funded by cash flows generated from RioCan’s real estate investments and fee generating activities.

Difference between net earnings and distributions to Unitholders

A comparison of distributions to Unitholders with consolidated cash flows provided by operating activities and net earnings is asfollows:(millions of dollars)Year ended December 31, 2013 2012 2011

Cash flows provided by operating activities $ 408 $ 422 $ 356

Net earnings attributable to Unitholders $ 695 $ 1,330 $ 866

Distributions to Unitholders $ 426 $ 401 $ 367

Difference between cash flows provided by operating activities and distributions to Unitholders $ (18) $ 21 $ (11)

Difference between net earnings attributable to Unitholders and distributions to Unitholders $ 269 $ 929 $ 499

The Trust does not use net earnings in accordance with IFRS as the basis to establish the level of Unitholders’ distributions as netearnings include, among other items, non-cash fair value adjustment related to its investment property portfolio and deferredincome taxes. Consideration is given by RioCan to maintenance capital expenditures for the property portfolio and preferreddistributions in establishing the level of annual distributions to Unitholders.



SELECTED QUARTERLY CONSOLIDATED INFORMATION(millions of dollars, except per unit amounts)

2013 2012As at and for the quarter ended Q4 Q3 Q2 Q1 Q4* Q3* Q2* Q1*

Total revenue $ 307 $ 276 $ 278 $ 292 $ 286 $ 270 $ 256 $ 261Net earnings* 265 130 154 164 472 127 412 349Net earnings per common Unit*– basic 0.86 0.41 0.50 0.53 1.55 0.42 1.41 1.21– diluted 0.86 0.41 0.49 0.53 1.55 0.42 1.40 1.20Operating FFO 124 124 121 124 116 115 106 103Operating FFO per Unit 0.41 0.41 0.40 0.41 0.39 0.40 0.37 0.37Total assets** 13,530 13,092 12,931 12,713 12,619 11,932 11,545 10,884Total mortgages and debentures payable** 5,959 5,733 5,579 5,477 5,451 5,069 4,931 4,880Total distributions to common Unitholders 107 107 106 106 103 101 100 96Total distributions to common Unitholders

per Unit 0.3525 0.3525 0.3525 0.3525 0.345 0.345 0.345 0.345DRIP Participation Rate 25.6% 25.9% 25.2% 26.3% 29.2% 27.2% 27.1% 23.7%Net book value per common Unit*** 23.01 22.44 22.42 22.18 21.93 20.69 20.53 19.16Market price per common Unit– high 25.89 26.20 25.42 27.90 27.90 29.20 27.78 27.67– low 23.85 23.46 24.80 26.53 26.02 27.27 25.72 25.45– close 24.77 24.30 25.27 27.80 27.56 27.67 27.70 27.03Average daily volume 512,296 637,329 603,750 588,001 409,368 468,079 396,897 497,467Market price per Preferred Unit – Series A– high 25.18 25.90 25.25 26.60 26.34 26.25 26.10 26.38– low 24.24 24.26 25.03 25.82 25.85 25.62 25.50 25.42– close 24.90 24.75 25.25 26.40 25.94 26.20 25.60 25.42Average daily volume 5,132 4,579 3,288 3,229 1,346 1,603 1,966 2,441Market price per Preferred Unit – Series C– high 25.32 25.58 25.28 26.75 26.21 26.00 25.93 25.80– low 24.65 24.19 24.79 25.80 25.51 25.31 25.06 25.15– close 25.00 25.15 25.19 26.30 26.15 25.60 25.30 25.31Average daily volume 6,456 6,335 4,353 4,641 4,292 4,737 5,621 9,351Non-resident Ownership of units****Canadian 72.3% 73.0% 73.2% 72.8% 73.4% 66.1% 64.9% 75.3%Non-resident 27.7% 27.0% 26.9% 27.2% 26.6% 33.9% 35.1% 24.7%

* Refer to RioCan’s annual and interim MD&As issued for the three months ended March 31, 2013 and 2012, the six months ended June 30,2013 and 2012 and the nine months ended September 30, 2013 and 2012, for a discussion and analysis relating to those periods.

** 2012 restated to reflect the 2013 change in accounting policy.*** A non-GAAP measurement. Calculated by RioCan as common Unitholders’ equity divided by Units outstanding at the end of the period.

RioCan’s method of calculating net book value per unit may differ from other issuers’ methods and accordingly may not be comparable to netbook value per unit reported by other issuers.

**** Estimate based on mailing addresses as at the end of each quarter.



SIGNIFICANT ACCOUNTING POLICIES AND ESTIMATES

The discussion and analysis of RioCan’s financial position and results of operations are based upon the Trust’s 2013 AnnualFinancial Statements, which have been prepared in accordance with IFRS. The preparation of financial statements requiresmanagement to make estimates and judgments that affect the reported amounts of assets and liabilities and disclosure ofcontingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses duringthe reporting period. Actual results may differ from those estimates under different assumptions and conditions.

RioCan believes that the following significant accounting policies are most affected by judgments and estimates used in thepreparation of its 2013 Annual Financial Statements. For a detailed description of these and other accounting policies refer to thenotes to RioCan’s 2013 Annual Financial Statements.

Fair value

Fair value is the amount at which an item could be bought or sold in a current transaction between independent, knowledgeablewilling parties, as opposed to a forced or liquidation sale, in an arm’s length transaction under no compulsion to act.

Quoted market prices in active markets are the best evidence of fair value and are used as the basis for fair value measurement,when available. When quoted market prices are not available, estimates of fair value are based on the best information available,including prices for similar items and the results of other valuation techniques. Valuation techniques used would be consistentwith the objective of measuring fair value.

The techniques used to estimate future cash flows will vary from one situation to another depending on the circumstancessurrounding the asset or liability in question.

The Trust’s financial statements are affected by the fair value based method of accounting, the most significant areas of which areas follows:

• The determination of fair value of Investment property is based upon, among other things, rental revenue from current leasesand reasonable and supportable assumptions that represent what knowledgeable, willing parties would assume about rentalrevenue from future leases in light of current conditions, less future cash outflows in respect of tenant installation costs, capitalexpenditures and investment property operations. The Trust uses the direct capitalization method to fair value its incomeproperties. Under this valuation method a capitalization rate is applied to normalized NOI to yield a fair value. Please see “AssetProfile” for a further discussion of fair values of investment property and sensitivities to changes in capitalization rates.

• Unit based compensation expense is measured at fair value and expensed over the options’ vesting periods, calculated using theBlack-Scholes Model for option valuation. For the year ended December 31, 2013, RioCan recorded Unit based compensationexpense of approximately $5.9 million ($5.2 million for the comparative period of 2012).

• International Financial Reporting Standards IAS 39, “Financial Instruments: Recognition and Measurement” establishes thestandard for recognizing and measuring financial assets, financial liabilities and non-financial derivatives (please see the notesto RioCan’s 2013 Annual Financial Statements). All financial instruments are required to be measured at fair value on initialrecognition, except for certain related party transactions. Measurement in subsequent periods depends on whether the financialinstrument has been classified as held-for-trading, available-for-sale, held-to-maturity, loans and receivables or otherliabilities.

• For the year ended December 31, 2013, the consideration for real estate acquired during 2013 included $313 million relating tothe assumption of mortgages payable and the granting of vendor-take-back mortgages by the vendors. These financial liabilitieswere measured at fair value on initial recognition. If the interest rate used in the assessment of fair value has a differential of100 basis points, RioCan’s operations would be impacted by approximately $3 million annually.

• At least annually, RioCan reports in its financial statements the fair value of its mortgages and debentures payable, whichamounts are based upon discounted future cash flows using discount rates that reflect current market conditions forinstruments with similar terms and risks. Such fair value estimates are not necessarily indicative of the amounts that RioCanmight pay or receive in actual market transactions. Potential transaction costs have also not been considered in estimating fairvalue.

The carrying cost of RioCan’s mortgages and debentures payable at December 31, 2013 is $ 5.96 billion. The Trust reported a$ 6.15 billion fair value relating to these mortgages and debentures payable in the notes to the 2013 Annual FinancialStatements. If the interest rate used in the assessment of fair value has a differential of 100 basis points, RioCan’s reported fairvalue relating to mortgages and debentures payable would be impacted by approximately $60 million.

Guarantees

GAAP requires RioCan to assess whether there are contingent losses relating to guarantees that the Trust provided on behalf ofthird parties, including co-owners and partners. In addition, RioCan’s guarantees remain in place for debts assumed by purchasersin connection with certain property dispositions, and will remain until such debts are extinguished or the lenders agree to releaseits covenants. Credit risk arises in the event that these parties default on repayment of their debt since they are guaranteed by



RioCan. These credit risks are mitigated as RioCan has recourse under these guarantees in the event of a default by theborrowers, in which case the Trust would also have a claim against the underlying real estate investments. A contingent loss isrecorded by RioCan when the carrying values of the related real estate investments are not recovered either as a result of theinability of the underlying assets’ performance to meet the contractual debt service terms of the underlying debt and the fair valueof the collateral assets are insufficient to cover the obligations and encumbrances in a sale between unrelated parties in thenormal course of business. RioCan’s estimates of future cash flow which, among other things, involve assumptions of estimatedoccupancy, rental rates and residual value, and the effects of other factors, including general and local economic conditions andchanging tenant formats, could vary and result in a significantly different assessment of such contingent loss. As at December 31,2013, there have been no defaults by the primary obligors for debts on which the Trust has provided its guarantees and as a result,no contingent loss on these guarantees has been recognized in the Trust’s financial statements.

FUTURE CHANGES IN ACCOUNTING POLICIES

RioCan monitors the potential changes proposed by the IASB and analyzes the effect that changes in the standards may have onRioCan’s operations.

Standards issued, but not yet effective, up to the date of issuance of the 2013 Annual Financial Statements for the years endedDecember 31, 2013 and 2012, are described below. This description is of standards and interpretations issued, which the Trustreasonably expects to be applicable at a future date. The Trust intends to adopt these standards when they become effective.

IFRS 9, Financial Instruments (IFRS 9)

IFRS 9 as issued reflects the IASB’s work to date on the replacement of Financial Instruments: Recognition and Measurement(IAS 39), and applies to the classification and measurement of financial assets and financial liabilities as defined in IAS 39. InNovember 2013, the IASB issued a new version of IFRS 9 (IFRS 9 (2013)) which includes the new hedge accounting requirementsand some related amendments to IAS 39, Financial Instruments: Recognition and Measurement and IFRS 7, Financial Instruments:Disclosures. IFRS 9 (2013) does not have a mandatory effective date. The impact of this ongoing project will be assessed by theTrust as remaining phases of the project are completed.

Amendments to IAS 32, Financial Instruments: Presentation – Offsetting Financial Assets and Financial Liabilities (IAS 32)

In December 2011, the IASB issued certain amendments to IAS 32, which establishes disclosure requirements that are intended tohelp clarify for financial statement users the effect or potential effect of offsetting arrangements on a company’s financial position.These amendments are effective for the Trust’s annual period beginning on January 1, 2014. The Trust has determined that theadoption of these amendments will not have a material impact on its 2013 Annual Financial Statements.

IFRIC Interpretation 21, Levies (IFRIC 21)

IFRIC 21 clarifies that an entity recognizes a liability for a levy when the activity that triggers payment occurs, as identified by therelevant legislation. For a levy that is triggered upon reaching a minimum threshold, the interpretation clarifies that no liabilityshould be anticipated before the specified minimum threshold is reached. The IFRIC does not apply to accounting for income taxes,fines and penalties or for the acquisition of assets from governments. IFRIC 21 is effective for annual periods beginning on or afterJanuary 1, 2014. The Trust is in the process of assessing the impact of the adoption of this interpretation on its 2013 AnnualFinancial Statements.

CONTROLS AND PROCEDURES

Internal Controls for Disclosure and Financial Reporting

RioCan maintains appropriate information systems, procedures and controls to ensure that information disclosed externally iscomplete, reliable and timely. RioCan’s Chief Executive Officer and Chief Financial Officer evaluated, or caused an evaluation undertheir direct supervision of, the design and operating effectiveness of the Trust’s disclosure controls and procedures (as defined inNational Instrument 52-109, Certification of Disclosure in Issuers’ Annual and Interim Filings) as at December 31, 2013 and haveconcluded that such disclosure controls and procedures were appropriately designed and were operating effectively.

RioCan has also established adequate internal controls over financial reporting to provide reasonable assurance regarding thereliability of the Trust’s financial reporting and the preparation of the financial statements for external purposes in accordancewith IFRS. RioCan’s Chief Executive Officer and the Chief Financial Officer assessed, or caused an assessment under their directsupervision, of the design and operating effectiveness of the Trust’s internal controls over financial reporting (as defined inNational Instrument 52-109, Certification of Disclosure in Issuers’ Annual and Interim Filings) as at December 31, 2013 using theCommittee of Sponsoring Organizations Internal Control – Integrated Framework. Based on that assessment, it was determinedthat RioCan’s internal controls over financial reporting were appropriately designed and were operating effectively.

During the three month period ended December 31, 2013 there were no changes in the Trust’s internal controls over financialreporting that occurred that have significantly affected, or are reasonably likely to significantly affect the Trust’s internal controlsover financial reporting.



On January 6, 2014, RioCan completed the initial phase of a conversion to a new enterprise resource planning (ERP) system anddoes not expect the ERP system conversion to result in any significant changes in internal controls over financial reporting or theoverall control environment during 2014. Management employed appropriate procedures to ensure internal controls were in placeduring and after the conversion.

It should be noted that a control system, no matter how well conceived and operated, can provide only reasonable, not absolute,assurance that the objectives of the control system are met. Given the inherent limitations in all control systems, no evaluation ofcontrols can provide absolute assurance that all control issues, including instances of fraud, if any, have been detected. Theseinherent limitations include, among other items: (i) that management’s assumptions and judgments could ultimately prove to beincorrect under varying conditions and circumstances; (ii) the impact of any undetected errors; and (iii) controls may becircumvented by the unauthorized acts of individuals, by collusion of two or more people, or by management override.

Canadian Income Tax Legislation – REIT Status

The Trust currently qualifies as a REIT for purposes of the Income Tax Act (Canada). Accordingly RioCan continues to be able toflow taxable income through to unitholders on a tax effective basis.

Generally, to qualify as a REIT, RioCan’s Canadian assets must be comprised primarily of real estate and substantially all ofRioCan’s Canadian source revenues must be derived from rental revenue, capital gains and fee income from properties in whichRioCan has an interest.

On October 24, 2012, the Minister of Finance tabled in the House of Commons a detailed Notice of Ways and Means motion toimplement outstanding technical tax amendments. As part of this motion, the Minister is creating a new 10% basket for the holdingof non-qualifying assets and increasing the non-qualifying revenue basket to 10% from 5% for purposes of the 95% REIT RevenueTest, thereby reducing the qualifying revenue threshold to 90%.

On November 21, 2012, the proposed amendments above received first reading in the House of Commons. On March 8, 2013, theamendments received their second reading in the House of Commons and on June 26, 2013, Bill C-48 received Royal Assent (i.e.final approval). The amendments will be retroactive to January 1, 2011.

The Trust does not believe that the enactment and the amendments above, which are generally less restrictive than the original taxlegislation, will impair its ability to continue to qualify as a REIT.

REIT Qualification Monitoring

A key activity of RioCan is the monitoring processes to ensure that RioCan continues to qualify as a REIT for purposes of theIncome Tax Act (Canada) following the adoption of the SIFT Provisions in 2010. In this regard, training of both accounting andoperational staff was carried out.

From time to time the Trust holds REIT information sessions with members of the Board of Trustees, Audit Committee and seniormanagement, including but not limited to, reporting on REIT Exception qualification monitoring and the business implications ofqualifying as a REIT.

RISKS AND UNCERTAINTIESThe achievement of RioCan’s objectives is, in part, dependent on the successful mitigation of business risks identified. Real estateinvestments are subject to a degree of risk. They are affected by various factors including changes in general economic and localmarket conditions, equity and credit markets, fluctuations in interest costs, the attractiveness of the properties to tenants,competition from other available space, the stability and credit-worthiness of tenants, currency and exchange rate risks andvarious other factors.

Liquidity and General Market Conditions

RioCan faces risks associated with general market conditions and their potential consequent effects. Current general marketconditions may include, among other things, the insolvency of market participants, tightening lending standards and decreasedavailability of cash, and changes in unemployment levels, retail sales levels, and real estate values. These market conditions mayaffect occupancy levels and RioCan’s ability to obtain credit on favourable terms or to conduct financings through the publicmarket.

Tenant Concentrations, Occupancy Levels and Defaults

The value of RioCan’s real estate and any improvements thereto, may depend on the credit and financial stability of tenants. TheTrust’s financial position would be adversely affected if a significant number of tenants were to become unable to meet theirobligations to RioCan or if RioCan were unable to lease a significant amount of available space in the properties on economicallyfavourable lease terms.

With respect to tenant concentration risk, in the event a given tenant, or group of tenants, experience financial difficulty and isunable to fulfill its lease commitments, or a given geographical area suffers an economic decline, the Trust could experience adecline in revenue.



In order to reduce RioCan’s exposure to the risks relating to credit and the financial stability of tenants, the Trust’s Declarationrestricts the amount of space which can be leased to any person and that person’s affiliates, other than in respect of leases with orguaranteed by the Government of Canada, a province of Canada, a municipality in Canada or any agency thereof and certaincorporations, the securities of which meet stated investment criteria, to a maximum premises or space having an aggregate grossleasable area of 20% of the aggregate gross leasable area of all real property held by RioCan. At December 31, 2013, RioCan was incompliance with this restriction.

RioCan’s operating results may be adversely impacted by a decline in revenues if the Trust is unable to maintain the existingoccupancy levels of its properties, if existing tenants experience financial difficulty and become unable to fulfill their leasecommitments, if RioCan becomes unable to attract new tenants at rental rates similar to those paid by existing tenants, or ifexisting tenants do not renew at the expiry of the lease term and such space cannot be re-leased. As well, certain significantexpenditures involved in real property investments, such as property taxes, maintenance costs and mortgage payments, representobligations that must be met regardless of whether the property is producing sufficient, or any, revenue.

At December 31, 2013, RioCan had NLA, at its interest, of 49.2 million square feet and a portfolio occupancy rate of 96.9%. Basedon the Trust’s current annualized rental revenue on a weighted average portfolio basis of approximately $23 per square foot, forevery fluctuation in occupancy by a differential of 1%, the Trust’s operations would be impacted by approximately $11 millionannually.

RioCan’s aggregate lease renewals over the next five years represent annual net rent payments of approximately $425 millionbased on current contractual rental rates. Should such tenancies be renewed upon maturity at an aggregate rental rate differentialof 100 basis points, the Trust’s operations would be impacted by approximately $4 million annually.

Lease expiries (Canadian Portfolio)

(in thousands)Portfolio

NLA 2014 2015 2016 2017 2018

Square feet 39,358 4,395 4,109 4,752 3,567 4,592Square feet expiring portfolio NLA 54.4% 11.2% 10.4% 12.1% 9.1% 11.7%

Total net rent $ 366,628 $ 73,626 $ 67,531 $ 79,494 $ 67,283 $ 78,694

Lease expiries (US Portfolio)

(in thousands)Portfolio

NLA 2014 2015 2016 2017 2018

Square feet 9,882 700 482 493 732 1,146Square feet expiring portfolio NLA 36.0% 7.1% 4.9% 5.0% 7.4% 11.6%

Total net rent $ 58,762 $ 10,496 $ 9,088 $ 8,155 $ 12,644 $ 18,379

RioCan strives to manage tenant concentration risk through geographical diversification (See “Asset Profile”) and diversification ofrevenue sources in order to avoid dependence on any single tenant. RioCan’s objective, as exemplified by the requirements of itsDeclaration noted above, is that no individual tenant contributes a significant percentage of its gross revenue and that aconsiderable portion of the Trust’s revenue is earned from national and anchor tenants (see “About RioCan”). RioCan attempts tolease to creditworthy tenants and will generally conduct credit assessments for new tenants. RioCan attempts to reduce its risksassociated with occupancy levels and lease renewal risk by having staggered lease maturities, negotiating leases with base termsbetween five and ten years, and by negotiating longer term leases with built-in minimum rent escalations where deemedappropriate.

Access to Debt and Equity Capital

A risk to the Trust’s growth program and the refinancing of its debt upon maturity is that of not having sufficient debt and equitycapital available to RioCan. Given the relatively small size of the Canadian marketplace, there are a limited number of lenders fromwhich RioCan can borrow. RioCan’s financial condition and results of operations would be adversely affected if it were unable toobtain financing or cost-effective financing.

At December 31, 2013, RioCan’s total indebtedness had a 4.7 year weighted average term to maturity bearing a weighted averagecontractual interest rate of 4.3% per annum.

Interest Rates

RioCan’s operations are impacted by interest rates, as interest expense represents a significant cost in the ownership of realestate investments. At December 31, 2013, RioCan had aggregate contractual debt comprised of mortgages and debenturespayable having principal maturities through to December 31, 2016 of $1.9 billion (34.4% of the aggregated debt) with a weightedaverage contractual interest rate of 4.6%. Should such amounts be refinanced upon maturity at an aggregate interest ratedifferential of 100 basis points, RioCan’s operations would be impacted by approximately $19.1 million annually.



RioCan seeks to reduce its interest rate risk by staggering the maturities of long term debt and limiting the use of floating ratedebt so as to minimize exposure to interest rate fluctuations. At December 31, 2013, 8.0 % of the Trust’s aggregate debt was atfloating interest rates.

From time to time, the Trust may enter into interest rate swap transactions to modify the interest rate profile of its current orfuture variable rate debts without an exchange of the underlying principal amount.

Relative Illiquidity of Real Property

Real estate investments are relatively illiquid. This will tend to limit the Trust’s ability to sell components of the portfolio promptlyin response to changing economic or investment conditions. If RioCan were required to quickly liquidate its assets, there is a riskthat the Trust would realize sale proceeds of less than the current book value of its real estate investments.

Unexpected Costs or Liabilities Related to Acquisitions

A risk associated with real property acquisition is that there may be an undisclosed or unknown liability concerning the acquiredproperties, and RioCan may not be indemnified for some or all of these liabilities. Following an acquisition, RioCan may discoverthat it has acquired undisclosed liabilities, which may be material.

RioCan conducts what it believes to be an appropriate level of investigation in connection with its acquisition of properties andseeks through contract to ensure that risks lie with the appropriate party.

Construction

RioCan’s construction commitments are subject to those risks usually attributable to construction projects, which include:(i) construction or other unforeseen delays including municipal approvals; (ii) cost overruns; and (iii) the failure of tenants tooccupy and pay rent in accordance with existing lease agreements, some of which are conditional. Construction risks areminimized through the provisions of the Trust’s Declaration, which have the effect of limiting direct and indirect investments, net ofrelated mortgage debt, in non-income producing properties to no more than 15% of the Adjusted Book Value of RioCan’sunitholders’ equity. RioCan also seeks to undertake such developments with established developers. With some exceptions forland in the high growth markets, RioCan will generally not acquire or fund significant expenditures for undeveloped land unless itis zoned and an acceptable level of space has been pre-leased or pre-sold. An advantage of unenclosed, new format retail is that itlends itself to phased construction keyed to leasing levels, which reduces the creation of significant amounts of vacant butdeveloped space.

Environmental Matters

Environmental and ecological related policies have become increasingly important in recent years. Under various federal,provincial, state and municipal laws, RioCan, as an owner or operator of real property, could become liable for the costs of removalor remediation of certain hazardous or toxic substances released on or in its properties or disposed of at other locations. Thefailure to remove or remediate such substances, or address such matters through alternative measures prescribed by thegoverning authority, may adversely affect RioCan’s ability to sell such real estate or to borrow using such real estate as collateral,and could, potentially, also result in claims against the Trust. RioCan is not currently aware of any material non-compliance,liability or other claim in connection with any of its properties, nor is RioCan currently aware of any environmental condition withrespect to any properties that it believes would involve material expenditures by the Trust.

It is the Trust’s policy to obtain a Phase I environmental audit conducted by a qualified environmental consultant prior to acquiringany additional property. In addition, where appropriate, tenant leases generally specify that the tenant will conduct its business inaccordance with environmental regulations and be responsible for any liabilities arising out of infractions to such regulations. It isRioCan’s practice to regularly inspect tenant premises that may be subject to environmental risk. The Trust maintains insurance tocover a sudden and/or accidental environmental mishap.

Legal Risks

RioCan’s operations are subject to a wide variety of laws and regulations across all of its operating jurisdictions and RioCan facesrisks associated with legal and regulatory changes and litigation. RioCan retains external legal consultants to assist it in remainingcurrent and compliant with legal and regulatory changes and to respond to litigation.

Human Resources and Key Personnel

RioCan faces certain human resource risks, including the risk that it will not have the necessary human resources to performsuccessfully. RioCan relies on the services of certain key personnel on its executive team, including its Chief Executive Officer,Edward Sonshine, its President and Chief Operating Officer, Frederic Waks, and its Executive Vice President and Chief FinancialOfficer, Raghunath Davloor, and the loss of their services could have an adverse effect on RioCan. RioCan mitigates key personnelrisks through succession planning.



Unitholder Liability

There is a risk that RioCan’s unitholders could become subject to liability. The Trust’s Declaration provides that no unitholder orannuitant under a plan of which a unitholder acts as trustee or carrier will be held to have any personal liability as such, and thatno resort shall be had to the private property of any unitholder or annuitant for satisfaction of any obligation or claim arising out ofor in connection with any contract or obligation of RioCan. Only RioCan’s assets are intended to be subject to levy or execution. TheDeclaration further provides that, whenever possible, certain written instruments signed by RioCan must contain a provision to theeffect that such obligation will not be binding upon unitholders personally or upon any annuitant under a plan of which a unitholderacts as trustee or carrier. In conducting its affairs, RioCan has acquired and may acquire real property investments subject toexisting contractual obligations, including obligations under mortgages and leases that do not include such provisions. RioCan willuse its best efforts to ensure that provisions disclaiming personal liability are included in contractual obligations related toproperties acquired, and leases entered into, in the future.

Certain provinces have legislation relating to unitholder liability protection, including British Columbia, Alberta, Saskatchewan,Manitoba, Ontario and Quebec. To RioCan’s knowledge, certain of these statutes have not yet been judicially considered and it ispossible that reliance on such statute by a unitholder could be successfully challenged on jurisdictional or other grounds.

Income Taxes

RioCan currently qualifies as a mutual fund trust and REIT for income tax purposes. RioCan expects to distribute all of the Trust’staxable income to unitholders and is, therefore, generally not subject to tax on such amounts. In order to maintain RioCan’scurrent mutual fund trust status, the Trust is required to comply with specific restrictions regarding its activities and theinvestments held by the Trust. If the Trust were to cease to qualify as a mutual fund trust, or a REIT for income tax purposes, theconsequences could be material and adverse.

No assurance can be given that the provisions of the Income Tax Act (Canada) regarding mutual fund trusts and REITs will not bechanged in a manner that adversely affects RioCan and its unitholders.

United States Investment, Management Platform and Currency Risk

RioCan intends to continue to make acquisitions from time to time in the United States as determined to be appropriate ordesirable. It is possible that such additional acquisitions may not be completed. Further there may be a lack of availability ofacquisition opportunities and exposure to economic, real estate and capital market conditions in the United States.

RioCan’s recent development of a property management platform in the US will expand the Trust’s direct involvement in the USreal estate market. The US real estate market differs from the Canadian environment in many ways and the Trust’s expertise andexperience in Canada may not prove beneficial in a foreign jurisdiction. The Trust is mitigating the risks relating to its entry intoand exposure to the US by hiring US based employees with real estate experience, and making investments of moderate scale.There can be no certainty, however, that RioCan’s US investments will be successful.

Additionally, it is possible that the Trust’s US investments will expose the Trust to foreign exchange fluctuations. The Trust will inpart mitigate this risk through the use of US denominated debt.

As at December 31, 2013 the Trust’s US denominated assets and liabilities are $754 million such that a 1% change in the value ofthe US dollar will result in a gain or loss to the Trust of approximately $7.5 million to other comprehensive income andapproximately $1 million to consolidated net earnings.

Credit Ratings

Real or anticipated changes in credit ratings on RioCan’s debentures or Preferred Units may affect the market value thereof. Inaddition, real or anticipated change in credit ratings can affect the cost at which RioCan can access the debenture or preferred unitmarket, as applicable.


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RioCanAUDITED ANNUALCONSOLIDATED FINANCIAL STATEMENTSFOR THE YEARS ENDEDDECEMBER 31, 2013 AND 2012

INDEX

Management’s Responsibility for Financial Reporting 123Independent Auditors’ Report 124Consolidated Balance Sheets 127Consolidated Statements of Earnings 126Consolidated Statements of Changes in Equity 127Consolidated Statements of Comprehensive Income 128Consolidated Statements of Cash Flows 129Notes to Consolidated Financial Statements 131-170

Management’s Responsibi l i ty for Financial Report ing

The management of RioCan Real Estate Investment Trust (RioCan) is responsible for the preparation and fair presentation of theaccompanying annual consolidated financial statements and Management’s Discussion and Analysis (MD&A). The consolidatedfinancial statements have been prepared in accordance with International Financial Reporting Standards (IFRS).

The consolidated financial statements and information in the MD&A necessarily include amounts based on best estimates andjudgments by management of the expected effects of current events and transactions with the appropriate consideration tomateriality. In addition, in preparing this financial information, we must make determinations about the relevancy of information tobe included, and estimates and assumptions that affect the reported information. The MD&A also includes information regardingthe impact of current transactions and events, sources of liquidity and capital resources, operating trends, risks and uncertainties.Actual results in the future may differ materially from our present assessment of this information because future events andcircumstances may not occur as expected.

In meeting our responsibility for the integrity and fairness of the annual consolidated financial statements and MD&A and for theaccounting systems from which they are derived, management has established the necessary internal controls designed to ensurethat our financial records are reliable for preparing financial statements and other financial information, transactions are properlyauthorized and recorded, and assets are safeguarded against unauthorized use or disposition.

As at December 31, 2013, our Chief Executive Officer and Chief Financial Officer evaluated, or caused an evaluation under theirdirect supervision, of the design and operation of our internal controls over financial reporting (as defined in National Instrument52-109, Certification of Disclosure in Issuers’ Annual and Interim Filings) and, based on that assessment, determined that our internalcontrols over financial reporting were appropriately designed and operating effectively.

The Board of Trustees oversees management’s responsibility for financial reporting through an Audit Committee, which iscomposed entirely of independent trustees. This committee reviews RioCan’s annual consolidated financial statements and MD&Awith both management and the independent auditors before such statements are approved by the Board of Trustees. Other keyresponsibilities of the Audit Committee include selecting RioCan’s auditors, approving the unaudited interim condensedconsolidated financial statements and MD&A, and monitoring RioCan’s existing systems of internal controls.

Ernst & Young LLP, independent auditors appointed by the unitholders of RioCan upon the recommendation of the Board ofTrustees, have examined our 2013 and 2012 annual consolidated financial statements and have expressed their opinion upon thecompletion of such examination in the following report to the unitholders. The auditors have full and free access to, and meet atleast quarterly with, the Audit Committee to discuss their audits and related matters.

Edward Sonshine, O.Ont., Q.C. Raghunath Davloor, CPA, CAChief Executive Officer Executive Vice President and Chief Financial Officer

Toronto, CanadaFebruary 12, 2014


INDEPENDENT AUDITORS’ REPORT

To the Unitholders of

RioCan Real Estate Investment Trust

We have audited the accompanying consolidated financial statements of RioCan Real Estate Investment Trust, which comprise theconsolidated balance sheets as at December 31, 2013, December 31, 2012, and January 1, 2012, and the consolidated statementsof earnings, changes in equity, comprehensive income, and cash flows for the years ended December 31, 2013 and 2012, and asummary of significant accounting policies and other explanatory information.

Management’s responsibility for the consolidated financial statementsManagement is responsible for the preparation and fair presentation of these consolidated financial statements in accordance withInternational Financial Reporting Standards, and for such internal control as management determines is necessary to enable thepreparation of consolidated financial statements that are free from material misstatement, whether due to fraud or error.

Auditors’ responsibilityOur responsibility is to express an opinion on these consolidated financial statements based on our audits. We conducted ouraudits in accordance with Canadian generally accepted auditing standards. Those standards require that we comply with ethicalrequirements and plan and perform the audits to obtain reasonable assurance about whether the consolidated financialstatements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the consolidated financialstatements. The procedures selected depend on the auditors’ judgment, including the assessment of the risks of materialmisstatement of the consolidated financial statements, whether due to fraud or error. In making those risk assessments, theauditors consider internal control relevant to the entity’s preparation and fair presentation of the consolidated financial statementsin order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion onthe effectiveness of the entity’s internal control. An audit also includes evaluating the appropriateness of accounting policies usedand the reasonableness of accounting estimates made by management, as well as evaluating the overall presentation of theconsolidated financial statements.

We believe that the audit evidence we have obtained in our audits is sufficient and appropriate to provide a basis for our auditopinion.

OpinionIn our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of RioCan RealEstate Investment Trust as at December 31, 2013, December 31, 2012, and January 1, 2012, and its financial performance and itscash flows for the years ended December 31, 2013 and 2012 in accordance with International Financial Reporting Standards.

Toronto, CanadaFebruary 12, 2014

Ernst & Young LLPChartered AccountantsLicensed Public Accountants


RIOCAN REAL ESTATE INVESTMENT TRUSTCONSOLIDATED BALANCE SHEETS(Audited – Canadian dollars, in millions)

NoteAs at December 31,

2013As at December 31,

2012As at January 1

2012

(restated –note 2(q))


ASSETSInvestment properties 3 $ 13,062 $ 11,765 $ 9,896Investments in equity accounted investments and joint

ventures 17(b) 36 321 286Mortgages and loans receivable 4 248 200 147Deferred tax assets 9 9 9 8Investment 5 – 50 41Receivables and other assets 6 136 99 75Cash and equivalents 39 175 31

Total assets $ 13,530 $ 12,619 $ 10,484

LIABILITIESMortgages payable and lines of credit 7 $ 4,512 $ 4,159 $ 3,959Debentures payable 8 1,447 1,292 822Accounts payable and accrued liabilities 10 299 288 261

Total liabilities $ 6,258 $ 5,739 $ 5,042

EQUITYPreferred unitholders’ equity 11 $ 265 $ 265 $ 265Common unitholders’ equity 11 6,996 6,582 5,098

Total unitholders’ equity 7,261 6,847 5,363Non-controlling interests 17 11 33 79

Total equity 7,272 6,880 5,442

Total liabilities and equity $ 13,530 $ 12,619 $ 10,484

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

Approved on behalf of the Board of Trustees

“Paul Godfrey” “Edward Sonshine”Paul Godfrey, O. Ont., C.M. Edward Sonshine, O.Ont., Q.C.Chairman of the Board of Trustees Trustee


RIOCAN REAL ESTATE INVESTMENT TRUSTCONSOLIDATED STATEMENTS OF EARNINGS(Audited – Canadian dollars, in millions, except per unit amounts)

For the year ended December 31, Note 2013 2012


Rental revenue 14 $ 1,121 $ 1,036

Property operating costs

Recoverable under tenant leases 15 376 348Non-recoverable from tenants 16 12

392 360

Operating income 729 676

Other income

Fees and other 16 17 25Interest 14 12Share of net earnings in equity accounted investments and joint ventures 17(b) 32 69Fair value gains on investment property, net 3 221 868

284 974

Other expenses

Interest 18 234 234General and administrative 19 45 40Transaction and other costs 20 9 5Impairment of investment 5 – 12Expense for early redemption of debentures 8 12 –

300 291

Earnings before income taxes 713 1,359Current income tax expense – 1Deferred income tax expense (recovery) – (1)

Net earnings $ 713 $ 1,359


Common and preferred unitholders $ 709 $ 1,344Non-controlling interests 4 15

$ 713 $ 1,359

Net earnings per unit attributable to common unitholders – basic 22 $ 2.30 $ 4.59

Net earnings per unit attributable to common unitholders – diluted 22 $ 2.29 $ 4.57

Weighted average number of common units outstanding – basic (in thousands) 22 302,324 289,950

Weighted average number of common units outstanding – diluted (in thousands) 22 303,260 291,298



RIOCAN REAL ESTATE INVESTMENT TRUSTCONSOLIDATED STATEMENTS OF CHANGES IN EQUITY(Audited – Canadian dollars, in millions)

As at December 31, 2012 Note

CommonTrustUnits

CumulativeEarnings

CumulativeUnitholders

DistributionsAccumulated

OCI (loss)

TotalCommon

Equity

TotalPreferred

Equity

Non-Controlling

Interests Total

Total Equity, December 31, 2011 $ 3,585 $ 4,782 $ (3,234) $ (35) $ 5,098 $ 265 $ 79 $ 5,442

Changes during the yearNet earnings – 1,344 – – 1,344 – 15 1,359Other comprehensive income 11(c) – – – 10 10 – 2 12Distributions to unitholders 13 – – (415) – (415) – (6) (421)Units issue proceeds, net 11(a) 540 – – – 540 – 19 559Value associated with unit options

granted 11(a) 5 – – – 5 – – 5Change in ownership interest (76) (76)Reclassification of pension 11(c) – (1) – 1 – – – –


As at December 31, 2013 Note

CommonTrustUnits

CumulativeEarnings

CumulativeUnitholders

DistributionsAccumulated

OCI (loss)

TotalCommon

Equity

TotalPreferred

Equity

Non-Controlling

Interests Total


Changes during the yearNet earnings – 709 – – 709 – 4 713Other comprehensive income 11(c) – – – 47 47 – – 47Realization of cumulative foreign

currency translation difference 20 – – – (4) (4) – – (4)Distributions to unitholders 13 – – (440) – (440) – (1) (441)Units issue proceeds, net 11(a) 119 – – – 119 – 119Common trust units repurchased

and cancelled 11(a) (13) (9) – – (22) – (22)Value associated with unit options

granted 11(a) 5 – – – 5 – – 5Change in ownership interest (25) (25)Reclassification of pension 11(c) – 1 – (1) – – – –

Total Equity, December 31, 2013 $ 4,241 $ 6,826 $ (4,089) $ 18 $ 6,996 $ 265 $ 11 $ 7,272



RIOCAN REAL ESTATE INVESTMENT TRUSTCONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME(Audited – Canadian dollars, in millions)


Net earnings $ 713 $ 1,359

Other comprehensive income, net of taxes:

Items that may be reclassified subsequently to net earnings:

– Unrealized gain on interest rate swap agreements 11(c) 6 –– Net foreign currency translation gains (losses) 11(c) 38 (7)– Net unrealized gains (losses) on available-for-sale investments, before tax 11(c) (2) 8– Impairment of investment 5 – 12Items that are not to be reclassified subsequently to net earnings:

– Actuarial gain (loss) on pension plans 11(c) 1 (1)

Other comprehensive income, net of tax 43 12

Comprehensive income $ 756 $ 1,371

Comprehensive income attributable to:

Common and preferred unitholders $ 752 $ 1,354Non-controlling interest $ 4 $ 17



RIOCAN REAL ESTATE INVESTMENT TRUSTCONSOLIDATED STATEMENTS OF CASH FLOWS(Audited – Canadian dollars, in millions)


(restated -note 2(q))

CASH FLOWS PROVIDED BY (USED IN):Operating activities

Net earnings $ 713 $ 1,359Items not affecting cash

Amortization 2 2Impairment of investment 5 – 12Recognition of rents on a straight-line basis (6) (7)Unit-based compensation expense 6 5Fair value gains on investment property, net 3 (221) (868)Share of earnings in equity accounted investments and joint ventures (32) (69)

Net change in non-cash operating items and other 24 (54) (12)

Cash flows provided by operating activities 408 422

Investing activities

Acquisition of investment properties (563) (632)Expenditures on properties under development (160) (145)Maintenance capital expenditures recoverable from tenants (19) (10)Maintenance capital expenditures not recoverable from tenants (7) (7)Tenant installation costs (28) (34)Proceeds on disposition of investment properties 440 25Contributions to equity accounted joint ventures (30) (79)Distributions from equity accounted joint ventures 19 100Proceeds on disposition of equity accounted joint ventures 52 –Mortgages and loans receivable

Advances (49) (72)Repayments 18 21

Sale of investment in available-for-sale securities 49 –

Cash flows used in investing activities (278) (833)

Financing activities

Mortgages payableBorrowings 423 539Repayments (476) (475)

Advances of lines of credit 259 188Repayment of lines of credit (250) (221)Issue of debentures payable, net of issue costs 8 446 571Repayment of debentures payable 8 (300) (100)Acquisition of non-controlling interest 21 (25) (67)Distributions paid to common unitholders 13 (425) (401)Distributions paid to preferred unitholders 13 (14) (12)Distributions paid to non-controlling interest (1) (6)Units issued under distribution reinvestment plan 11(a) 110 108Units repurchased under normal course issuer bid (22) –Issue of common units, net 9 431

Cash flows provided by (used in) financing activities (266) 555

Net increase (decrease) in cash and equivalents during the year (136) 144

Cash and equivalents, beginning of year 175 31

Cash and equivalents, end of year $ 39 $ 175

Supplemental cash flow information 25



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RioCanNOTES TOCONSOLIDATED FINANCIAL STATEMENTS(Audited – Canadian dollars, tabular amounts in millions, exceptper unit amounts or unless otherwise noted)

FOR THE YEARS ENDEDDECEMBER 31, 2013 AND 2012

To facilitate a better understanding of RioCan’s consolidated financial statements, significant accounting policies and relateddisclosures, a listing of all the notes is provided below.

1. Trust information 1312. Significant accounting policies 1313. Investment property 1434. Mortgages and loans receivable 1465. Investment 1466. Receivables and other assets 1477. Mortgages payable and lines of credit 1478. Debentures payable 1499. Income taxes 15010. Accounts payable and accrued liabilities 15111. Unitholders’ equity 15112. Unit-based compensation plans 15313. Distributions to unitholders 15414. Rental revenue 15415. Property operating costs – recoverable under tenant

leases 15516. Fees and other income 155

17. Subsidiaries and joint arrangements 15618. Interest expense 15919. General and administrative 15920. Transaction and other costs 15921. Segmented information 15922. Net earnings per common trust unit 16223. Hedging activities 16324. Net change in non-cash operating items 16425. Supplemental cash flow information 16426. Operating leases - Trust as lessor 16427. Fair value measurement 16528. Capital management 16529. Financial instruments 16630. Related party transactions 16831. Employee benefits 16832. Contingencies and commitments 16833. Events after the balance sheet date 169

RIOCAN REAL ESTATE INVESTMENT TRUSTNOTES TO CONSOLIDATED FINANCIAL STATEMENTS(Audited – Canadian dollars, tabular amounts in mil l ions, except per unit amounts or unless otherwise noted)

FOR THE YEARS ENDED DECEMBER 31, 2013 AND 2012

1. Trust InformationRioCan Real Estate Investment Trust (the Trust or RioCan) is an unincorporated “closed-end” trust governed by the laws of theProvince of Ontario and constituted pursuant to a Declaration of Trust dated November 30, 1993, as most recently amended andrestated on June 5, 2013 (the Declaration). The Trust’s Units are listed on the Toronto Stock Exchange (the TSX) under the symbolREI.UN. Preferred Units, Series A and Series C of the Trust are listed on the TSX under the symbols REI.PR.A and REI.PR.C,respectively.

The Trust’s registered office is located at 2300 Yonge Street, Suite 500, Toronto, Ontario, M4P 1E4.

The Trust’s principal business activities are owning, developing and operating shopping centres in Canada and the United States.

These consolidated financial statements of the Trust for the year ended December 31, 2013 and 2012 were authorized for issue inaccordance with a resolution of the Board of Trustees (the Board) on February 12, 2014.

2. Significant accounting policies(a) Basis of preparation and statement of compliance

These consolidated financial statements are prepared in accordance with International Financial Reporting Standards (IFRS) asissued by the International Accounting Standards Board (IASB).

These consolidated financial statements of the Trust have been prepared on a cost basis, except for investment property, derivativefinancial instruments and available-for-sale financial assets, which have been measured at fair value. These consolidated financialstatements are presented in Canadian dollars and all values are rounded to the nearest million, except where otherwise indicated.

The Trust presents its consolidated balance sheets based on the liquidity method, whereby all assets and liabilities are presentedin increasing order of liquidity. The notes to the consolidated financial statements distinguish between current and non-currentassets and liabilities. Note 7(b) provides information on the Trust’s current assets and current liabilities.

(b) Principles of consolidation

(i) Subsidiaries

These consolidated financial statements include the assets, liabilities and result of operations of the Trust and its subsidiaries,after elimination of inter-company transactions and balances. Subsidiaries are fully consolidated from the date of acquisition,being the date on which the Trust obtains control, and continue to be consolidated until the date that such control ceases. Thefinancial statements of subsidiaries are prepared for the same reporting period as the Trust using consistent accountingpolicies.

The consolidated financial statements include the accounts of the Trust and its consolidated subsidiaries, which are theentities over which the Trust has control. Control is achieved when the Trust is exposed, or has rights, to variable returns fromits involvement with the entity and has the ability to affect those returns through its power over the entity.

When RioCan does not own all of the equity in a subsidiary, the non-controlling equity interest is generally disclosed in theconsolidated balance sheet as a separate component of total equity.

(ii) Investment in associates and joint ventures

Associates are entities over which the Trust has significant influence, but not control or joint control, over the financial andoperating policy decisions of the entity.

A joint venture is a type of joint arrangement whereby the parties that have joint control of the arrangement have rights to thenet assets of the joint venture. Joint control is the contractually agreed sharing of control of an arrangement, which exists onlywhen decisions about the relevant activities require unanimous consent of the parties sharing control.

The Trust’s investments in its associates and joint ventures are accounted using the equity method and initially recorded atcost and adjusted by post-acquisition changes in RioCan’s share of the net assets of the associate. The statement of earningsreflects the Trust’s share of the result of operations of the associate or joint venture.

The financial statements of the equity-accounted investments are prepared for the same reporting period as the Trust. Wherenecessary, adjustments are made to bring the accounting policies in line with those of the Trust.

(iii) Joint operations

A joint operation is a joint arrangement whereby the parties that have joint control of the arrangement have rights to theassets, and obligations for the liabilities, relating to the arrangement. Those parties are called joint operators. The Trustrecognizes its share of the assets and liabilities, and benefits generated from the asset in proportion to its rights.




(c) Business combinations

At the time of acquisition of property, whether through a controlling share investment or directly, the Trust considers whether theacquisition represents the acquisition of a business. The Trust accounts for an acquisition as a business combination where anintegrated set of activities is acquired in addition to the property. More specifically, consideration is made of the extent to whichsignificant processes are acquired. If no, or only insignificant processes are acquired, the acquisition is treated as an assetacquisition rather than a business combination.

The cost of a business combination is measured as the fair value of the assets given, equity instruments issued and liabilitiesincurred or assumed at the acquisition date. Identifiable assets acquired and liabilities and contingent liabilities assumed in abusiness combination are measured initially at fair value at the date of acquisition. The Trust recognizes assets or liabilities, if any,resulting from a contingent consideration arrangement at their acquisition date fair value and such amounts form part of the costof the business combination. Subsequent changes in the fair value of contingent consideration arrangements are recognized in netearnings. The difference between the purchase price and the Trust’s net fair value of the acquired identifiable net assets andliabilities is goodwill. On the date of acquisition, the purchaser records positive goodwill as an asset. Negative goodwill isimmediately recognized in the consolidated statements of earnings. Goodwill is not amortized and must be tested for impairmentat least annually, or more frequently, if events or changes in circumstances indicate that impairment has occurred.

The Trust expenses transaction costs associated with business combinations in the period incurred.

When an acquisition does not represent a business, it is accounted for as an acquisition of a group of assets and liabilities, the costof the acquisition including transaction costs is allocated to the assets and liabilities acquired based upon their relative fair values,and no goodwill is recognized.

(d) Fair value measurement

The Trust measures financial instruments, such as derivatives, and non-financial assets, such as investment properties, at fairvalue at each balance sheet date. Fair value is the price that would be received to sell an asset or paid to transfer a liability in anorderly transaction between market participants at the measurement date under current market conditions. The fair valuemeasurement is based on the presumption that the transaction to sell the asset or transfer the liability takes place either:

• In the principal market for the asset or liability, or

• In the absence of a principal market, in the most advantageous market for the asset or liability

The principal or the most advantageous market must be accessible by the Trust.

The fair value of an asset or a liability is measured using the assumptions that market participants would use when pricing theasset or liability assuming that market participants act in their economic best interests.

A fair value measurement of a non-financial asset takes into account a market participant’s ability to generate economic benefitsby using the asset in its highest and best use or by selling it to another market participant that would use the asset in its highestand best use.

The Trust uses valuation techniques that are appropriate in the circumstances and for which sufficient data are available tomeasure fair value, maximizing the use of relevant observable inputs and minimizing the use of unobservable inputs.

All assets and liabilities for which fair value is measured or disclosed in the financial statements are categorized within the fairvalue hierarchy, described as follows, based on the lowest level input that is significant to the fair value measurement as a whole:

• Level 1 — Quoted (unadjusted) market prices in active markets for identical assets or liabilities

• Level 2 — Valuation techniques for which the lowest level input that is significant to the fair value measurement is directly orindirectly observable

• Level 3 — Valuation techniques for which the lowest level input that is significant to the fair value measurement is unobservable

For assets and liabilities that are recognized in the financial statements on a recurring basis, the Trust determines whethertransfers have occurred between Levels in the hierarchy by re-assessing categorization (based on the lowest level input that issignificant to the fair value measurement as a whole) at the end of each reporting period.

For the purpose of fair value disclosures, the Trust has determined classes of assets and liabilities on the basis of the nature,characteristics and risks of the asset or liability and the level of the fair value hierarchy as explained above.




(e) Investment property

Investment property is held to earn rental revenue or for capital appreciation or both. A key characteristic of an investmentproperty is that it generates cash flows largely independently of the other assets held by an entity.

Real estate property held under an operating lease is not classified as investment property. Instead, these leases are accountedfor in accordance with IAS 17, Leases. However, certain land leases held under an operating lease are classified as investmentproperty when the definition of an investment property is met. At the inception of these leases, investment property is recognizedat the lower of the fair value of the property and the present value of the future minimum lease payments and an equivalentamount is recognized as a lease liability.

(i) Income properties

Income properties are initially measured at cost. Subsequent to initial recognition, income properties are recorded at fairvalue and related gains or losses arising from changes in fair value are recognized in net earnings in the period of change. Thedetermination of fair value is based on, among other things, rental revenue from current leases and reasonable andsupportable assumptions that represent what knowledgeable, willing parties would assume about rental revenue from futureleases in light of current conditions, less future cash outflows in respect of tenant installation costs, income propertyoperations, and capital expenditures.

(ii) Properties under development

Properties under development include those properties, or components thereof, that will undergo activities that will take asubstantial period of time to complete in order to prepare the properties for their use as income properties.

The cost of a development property that is an asset acquisition comprises the amount of cash, or the fair value of the otherconsideration, given to acquire the property including transaction costs.

Subsequent to acquisition, the cost of a property under development includes third party and direct internal development andinitial leasing costs, property taxes, and interest on both specific and general debt.

Direct and indirect borrowing costs, direct internal development costs, and property taxes are capitalized when developmentactivities that change the property’s condition occur.

Interest capitalized is calculated using the Trust’s weighted average cost of borrowing after adjusting for borrowingassociated with specific developments. Where borrowing is associated with specific developments, the amount capitalized isthe gross interest incurred on such borrowing less any investment income arising on temporary investment of suchborrowing. Interest is capitalized from commencement of development work until the date of substantial completion.Capitalization of finance costs is suspended if there are prolonged periods when development activity is interrupted. Interest isalso capitalized on the purchase cost of a property acquired specifically for redevelopment, where activities necessary toprepare the asset for redevelopment are in progress.

Capitalization of costs to properties under development continues until all the activities necessary to prepare the property foruse as a rental property is substantially complete.

Properties under development are also adjusted to fair value at each balance sheet date with fair value adjustmentsrecognized in net earnings.

(iii) Properties held for resale

Properties held for resale are properties acquired or developed by the Trust of which it has no intention of them being used ona long-term basis and the Trust plans to dispose of in the ordinary course of business. The Trust expects to earn a return onsuch assets through a combination of property operating income earned during the holding period and sales proceeds.Properties held for resale are stated at the lower of cost and net realizable value. No amortization is recorded on these assets.

(f) Revenue recognition

Revenue is recognized to the extent that it is probable that the economic benefits will flow to the Trust and the revenue can bereliably measured. Revenue is measured at the fair value of the consideration received. The following specific recognition criteriamust also be met before revenue is recognized:

(i) Rental revenue

The Trust has not transferred substantially all of the benefits and risks of ownership of its investment properties and,therefore, the Trust accounts for leases with its tenants as operating leases. Rental revenue includes all amounts earned fromtenants related to lease agreements including property tax and operating cost recoveries.




The Trust reports minimum rental revenue on a straight-line basis, whereby the total amount of cash to be received under alease is recognized in net earnings in equal periodic amounts over the term of the lease. Contingent rents are recognized asrevenue in the period in which they are earned.

Amounts payable by tenants to terminate their lease prior to their contractual expiry date (lease cancellation fees) areincluded in rental revenue.

Initial direct costs incurred in negotiating an operating lease are added to the carrying amount of the leased asset. Tenantincentives are recognized as a reduction of rental revenue on a straight-line basis over the term of the lease.

(ii) Fees and other income

The Trust has interests in various investment properties through joint arrangements and investments in associates. Generally,the Trust provides asset and property management services to co-owners, partners, and third parties for which it earnsmarket based fees.

Fees are recognized as the service or contract activity is performed using the percentage of completion method. Under thepercentage of completion method, where services are provided over a specific period of time, revenue is recognized on astraight-line basis unless there is evidence that some other method would better reflect the pattern of performance. Wherethe contract outcome cannot be measured reliably, revenue is recognized only to the extent that the expenses incurred areeligible to be recovered.

Other income includes dividends declared on the Trust’s available for sale assets and is included in earnings when declared.

(iii) Properties held for resale

Revenue from completed properties held for resale is recognized when following conditions are met: the Trust hastransferred to the purchaser the significant risks and rewards of ownership, the Trust has no continuing managerialinvolvement in the property, revenues and costs can be reliably measured and the purchaser has made a substantialcommitment demonstrating its intent to honour its obligation, and collection of any additional consideration is reasonablyassured.

For individual units in condominium projects that are sold separately, the Trust recognizes revenue on the sale of individualunits upon the buyer taking occupancy of a unit.

For arrangements involving multiple elements, the Trust allocates the consideration to each element based on relative fairvalues.

(iv) Interest income

Revenue is recognized as interest accrues using the effective interest method.

(g) Unit-based compensation plans

(i) Equity settled

The Trust and its subsidiaries issue share-based awards to certain employees. The cost of equity-settled share-basedpayment transactions equals the fair value of each tranche of options as at their grant date. The cost of the stock options isrecognized on a proportionate basis consistent with the vesting features of each tranche of the grant.

(ii) Cash settled

The Trust has a Restricted Share Unit (REU) plan which provides for an allotment of REUs to each non-employee trustee. Thecost of cash-settled share-based payment transactions is measured at fair value, and expensed over the vesting period withthe recognition of a corresponding liability. The liability is re-measured at each reporting date at fair value with the vestedchanges in fair value recognized in net earnings.

(h) Financial assets and liabilities

Financial assets include the Trust’s accounts receivable, mortgages and loans receivable, cash and equivalents, investments incommon shares, and interest rate swaps. Financial liabilities include the Trust’s operating lines of credit, mortgages anddebentures payable and accounts payable and accrued liabilities.

(i) Recognition and measurement of financial instruments

The Trust determines the classification of its financial assets and liabilities at initial recognition. Financial instruments arerecognized initially at fair value and, in the case of financial assets and liabilities carried at amortized cost, adjusted fordirectly attributable transaction costs.




Measurement in subsequent periods depends on whether the financial instrument has been classified as held-for-trading,loans and receivables, available-for-sale, held-to-maturity, or other liabilities.

(1) Held-for-trading

Financial assets and financial liabilities classified as held-for-trading are required to be measured at fair value with gainsand losses recognized in net earnings. Transaction costs are expensed as incurred for a financial instrument classified asheld-for-trading. Other than cash and equivalents, the Trust has no significant financial instruments classified as held-for-trading.

Derivative instruments are recorded on the consolidated balance sheets at fair value including those derivatives that areembedded in a financial instrument or other contract but are not closely related to the host financial instrument orcontract. Changes in the fair values of derivative instruments are required to be recognized in net earnings, except forderivatives that are designated as a cash flow hedge, in which case the fair value change for the effective portion of suchhedging relationship is required to be recognized in other comprehensive income (OCI).

(2) Loans and receivables or held-to-maturity

Loans and receivables are financial instruments with fixed or determinable payments that are not quoted in an activemarket. Financial instruments with fixed or determinable payments and fixed maturities are classified as held-to-maturityonly when the Trust has the positive intention and ability to hold it to maturity.

Financial assets classified as held-to-maturity, loans and receivables and other liabilities (other than those held-for-trading) are required to be measured at amortized cost using the effective interest method. This method uses an effectiveinterest rate that discounts estimated future cash receipts through the expected life of the financial asset or liability to thenet carrying amount of the financial asset or liability. Amortized cost is computed using the effective interest method lessany allowance for impairment. Gains and losses are recognized in net earnings when the loans and receivables arederecognized or impaired, as well as through amortization.

The principal categories of the Trust’s financial assets and liabilities measured at amortized cost using the effectiveinterest method include: (a) accounts receivable and payable; (b) mortgages and loans receivable and mortgages payable;and (c) debentures payable.

(3) Available-for-sale

Available-for-sale financial assets are financial assets that are designated for accounting purposes as available-for-sale orare not classified in any of the two preceding categories.

Available-for-sale financial assets are required to be measured at fair value with unrealized gains and losses recognized inOCI until the investment is derecognized or impaired, at which time the cumulative gain or loss recorded is recognized innet earnings. Investments in equity instruments classified as available-for-sale that do not have a quoted market price inan active market and whose fair value cannot be reliably measured are measured at cost. Other than its investments inWhitecastle New Urban Fund, LP (WCNUF I) and Whitecastle New Urban Fund 2, LP (WCNUF II), the Trust has nosignificant financial instruments classified as available-for-sale.

(ii) Impairment of financial assets

The Trust assesses at each balance sheet date whether there is any objective evidence of impairment for each financial asset(or a group of financial assets). A financial asset is deemed to be impaired if there is objective evidence of impairment as aresult of an event that has occurred after the initial recognition of the asset (an incurred loss event) and that loss event has animpact on the estimated future cash flows of the financial asset that can be reliably estimated. Evidence of impairment mayinclude indications that the debtor(s) is experiencing financial difficulty, which may include default or delinquency in interestor principal payments, the probability that it will enter bankruptcy or other financial reorganization, and where observabledata indicate that there is a measurable decrease in the estimated future cash flows, such as changes in arrears payments oreconomic conditions that correlate with defaults.

(1) Impairment of loans and receivables

The Trust assesses whether there is objective evidence of an indicator of impairment at each balance sheet date for eachloan and receivable. If there is objective evidence that an impairment loss has occurred, the amount of the loss ismeasured as the difference between the asset’s carrying amount and the present value of estimated future cash flows(excluding future expected credit losses that have not yet been incurred). The carrying amount of the asset is reducedthrough the use of an allowance account and the amount of the loss is recognized in net earnings. Interest incomecontinues to be accrued on the reduced carrying amount based on the original effective interest rate of the asset. Loansand receivables, together with the associated allowance, are written off when there is no realistic prospect of future




recovery and all collateral has been realized or has been transferred to the Trust. If, in a subsequent year, the amount ofthe estimated impairment loss increases or decreases because of an event occurring after the impairment was recognized,the previously recognized impairment loss is increased or reduced by adjusting the allowance account. If a past write-off islater recovered, the recovery is recognized in net earnings.

The present value of the estimated future cash flows is discounted at the financial asset’s original effective interest rate. Ifa loan has a variable interest rate, the discount rate for measuring any impairment loss is the current effective interestrate.

(2) Impairment of available-for-sale financial assets

For available-for-sale financial assets, the Trust assesses at each balance sheet date whether there is objective evidencethat an asset is impaired. In the case of equity investments classified as available-for-sale, objective evidence wouldinclude a significant or prolonged decline in the fair value of the investment below its cost. Where there is evidence ofimpairment, the cumulative loss, measured as the difference between the acquisition cost and the current fair value, lessany impairment loss on that investment previously recognized in net earnings, is removed from equity and recognized innet earnings. Impairment losses on equity investments are not reversed through the statement of earnings; increases intheir fair value after impairment are recognized directly in equity. In the case of debt instruments classified as available-for-sale, impairment is assessed based on the same criteria as financial assets carried at amortized cost. Interestcontinues to be accrued at the original effective interest rate on the reduced carrying amount of the asset and is recordedas part of interest income. If, in a subsequent year, the fair value of a debt instrument increases and the increase can beobjectively related to an event occurring after the impairment loss was recognized in net earnings, the impairment loss isreversed through net earnings.

(iii) Financial guarantee contracts

Financial guarantee contracts issued by the Trust are those contracts that require a payment to be made to reimburse theholder of the guarantee for a loss it incurs because the specified debtor fails to make a payment when due in accordance withthe terms of a debt instrument. Financial guarantee contracts are recognized initially as a liability at fair value, adjusted fortransaction costs that are directly attributable to the issuance of the guarantee. Subsequently, the liability is measured at thehigher of the best estimate of the expenditure required to settle the present obligation at the balance sheet date and the initialamount recognized less cumulative amortization.

(iv) Offsetting of financial instruments

Financial assets and financial liabilities are offset and the net amounts are reported in the consolidated balance sheets ifthere is an enforceable legal right to offset the recognized amounts and there is an intention to settle on a net basis, or torealize the assets and settle the liabilities simultaneously.

(v) Hedges

The accounting standard Financial Instruments: Recognition and Measurement (IAS 39) specifies the criteria under which hedgeaccounting can be applied and how hedge accounting should be executed for each of the permitted hedging strategies: fairvalue hedges, cash flow hedges, and hedges of a foreign currency exposure of a net investment in a foreign operation.

From time to time, the Trust may enter into interest rate swap (option) transactions to modify the interest rate profile of itscurrent or future debts without an exchange of the underlying principal amount. In such cash flow hedging relationships, theeffective portion of the change in the fair value of the hedging derivative is recognized in OCI. The ineffective portion (asdefined for accounting purposes by the standard) is recognized in net earnings. The Trust has entered into interest rate swapson certain of its variable rate mortgages payable.

Derivatives are carried as financial assets when the fair value is positive and as financial liabilities when the fair value isnegative.

At the inception of a hedging relationship, the Trust formally designates and documents the hedge relationship to which theTrust is applying hedge accounting and the risk management objective and strategy for undertaking the hedge. Thedocumentation includes identification of the hedging instrument, the hedged item or transaction, the nature of the risk beinghedged and how the Trust will assess the hedging instrument’s effectiveness in offsetting the exposure to changes in thehedged item’s cash flows attributable to the hedged risk. Such hedges are expected to be highly effective in achievingoffsetting changes in cash flows and are assessed on an ongoing basis to determine that they actually have been highlyeffective throughout the financial reporting periods for which they were designated.

In a net investment hedging relationship, the effective portion of foreign exchange gains and losses on the hedging instrumentis recognized in OCI and the ineffective portion is recognized in net earnings. The amounts recorded in accumulated othercomprehensive income (AOCI) are recognized in net earnings upon certain reductions in the net investment in the foreignsubsidiary.


RIOCAN REAL ESTATE INVESTMENT TRUSTNOTES TO CONSOLIDATED FINANCIAL STATEMENTS(Audited – Canadian dollars, tabular amounts in millions, except per unit amounts or unless otherwise noted)


(vi) Comprehensive income

Comprehensive income comprises net earnings and OCI, which represents changes in unitholders’ equity during a periodarising from transactions and other events with non-owner sources. OCI generally would include unrealized gains and losseson financial assets classified as available-for-sale, unrealized foreign currency translation adjustments net of hedging arisingfrom foreign operations, changes in the fair value of the effective portion of cash flow hedging instruments, and actuarial gainsand losses related to the Trust’s defined benefit pension plans. The Trust reports a consolidated statement of comprehensiveincome comprising net earnings and OCI for the period.

(v) Fair value

The fair value of a financial instrument is the amount of consideration that could be agreed upon in an arm’s lengthtransaction between knowledgeable, willing parties who are under no compulsion to act. In certain circumstances, however,the initial fair value may be based on other observable current market transactions in the same instrument withoutmodification or on a valuation technique using market based inputs. Except as noted below, the carrying value of the Trust’sfinancial assets and financial liabilities approximate their fair values because of the short period until receipt or payment ofcash. The fair values of mortgages and loans receivable are based on the current market conditions for mortgage financingloans with similar terms and risks. The fair values of term mortgages, debentures and designated hedging derivativeinstruments included in receivables and other assets and accounts payable and other liabilities are estimated based ondiscounted future cash flows using discount rates that reflect current market conditions for instruments with similar termsand risks.

(i) Income taxes

Upon qualifying as a real estate investment trust (REIT) in the fourth quarter of 2010, the Trust is considered, in substance, taxexempt and therefore does not account for income taxes. Prior to qualifying as a REIT, the Trust was considered taxable. Upon theTrust’s change in tax status, all deferred taxes of the Trust were reversed through net earnings or OCI based upon where theamounts initially arose. The Trust’s US operations are qualifying US REITs and are not subject to income taxes. The Trustconsolidates certain wholly owned incorporated entities that continue to be subject to income taxes. These taxable subsidiaries,and the Trust prior to its change in tax status, account for income taxes as follows:

(i) Current income tax

The Trust qualifies as a mutual fund trust and a REIT for income tax purposes. The Trust intends to distribute all of its taxableincome to unitholders and is entitled to deduct such distributions for income tax purposes. Accordingly, a provision for currentincome taxes payable is not required, except for amounts incurred in its incorporated Canadian taxable subsidiaries.

The Trust’s US subsidiary qualifies as a REIT for US income tax purposes. The subsidiary expects to distribute all of its UStaxable income (if any) to Canada and is entitled to deduct such distributions for US income tax purposes. Accordingly, noprovision for US current income tax payable is required.

(ii) Deferred income tax

Deferred income taxes are provided using the liability method for temporary differences at the balance sheet date between thetax bases of assets and liabilities and their carrying amounts for financial reporting purposes.

Deferred income tax liabilities are recognized for all taxable temporary differences, except:

(1) where the deferred income tax liability arises from the initial recognition of an asset or liability in a transaction that is nota business combination and, at the time of the transaction, affects neither the accounting nor taxable income or loss; and

(2) in respect of taxable temporary differences associated with investments in subsidiaries and interests in jointly controlledentities, where the timing of the reversal of the temporary differences can be controlled and it is probable that thetemporary differences will not reverse in the foreseeable future.

Deferred income tax assets are recognized for all deductible temporary differences to the extent that it is probable thattaxable profit will be available against which the deductible temporary differences, and the carry forward of unused tax creditsand unused tax losses, can be utilized except:

(1) where the deferred income tax asset relating to the deductible temporary difference arises from the initial recognition ofan asset or liability in a transaction that is not a business combination and, at the time of the transaction, affects neitherthe accounting profit nor taxable profit or loss; and

(2) in respect of deductible temporary differences associated with investments in subsidiaries, associates and interests injointly controlled entities, deferred income tax assets are recognized only to the extent that it is probable that thetemporary differences will reverse in the foreseeable future and taxable profit will be available against which thetemporary differences can be utilized.




Deferred income tax assets and liabilities are measured at the tax rates that are expected to apply to undistributed profits inthe year when the asset is realized or the liability is settled, based on tax rates and tax laws that have been enacted orsubstantively enacted at the balance sheet date and reflect the tax consequences that would follow from the manner in whichthe entity expects, at the end of the reporting period, to recover or settle the carrying amount of its assets and liabilities.Deferred income taxes relating to temporary differences that are in equity are recognized in equity.

Deferred income tax assets and deferred income tax liabilities of the same taxable entity related to the same taxationauthority are offset.

(j) Furniture and equipment

Furniture and computer equipment are stated at cost less accumulated depreciation and accumulated impairment in value, if any.Depreciation is recorded on a straight-line basis over the following expected useful lives:

Furniture and equipment 5 yearsComputer hardware 3 yearsLeasehold improvements Lease term plus first renewal, if renewal is reasonably assured

(k) Intangible assets

The Trust’s intangible assets comprise its management information systems and computer application software that is initiallyrecognized at fair value and amortized over its estimated useful life (5-10 years) on a straight-line basis. The cost of self-builtmanagement information systems and software includes the cost of materials and direct labour. Capitalization ceases anddepreciation commences once the asset is in the location and condition necessary for it to be capable of operating in the mannerintended by management.

Non-refundable sales commissions paid with respect to the sale of inventory property, where it is probable that future economicbenefits will flow to the Trust and the asset can be measured reliably, are accounted for as an intangible asset. No amortizationprior to the recognition of revenue is recognized but rather a charge to net earnings occurs when the revenue associated with thesale is recognized. RioCan pays certain upfront non-refundable selling commissions with respect to its sale of residentialcondominium units at its development located in Toronto, Ontario at the northeast corner of Yonge and Eglinton.

(l) Cash and equivalents

Cash and equivalents comprise cash and short term investments with original maturities of three months or less.

(m) Provisions

Provisions are recognized when the Trust has a present obligation (legal or constructive) as a result of a past event, it is probablethat an outflow of resources embodying economic benefits will be required to settle the obligation, and a reliable estimate can bemade of the amount of the obligation. Where the Trust expects some or all of a provision to be reimbursed, for example under aninsurance contract, the reimbursement is recognized as a separate asset but only when the reimbursement is virtually certain. Theexpense relating to any provision is presented in net earnings, net of any reimbursement. If the effect of the time value of money ismaterial, provisions are discounted using a current rate that reflects, where appropriate, the risks specific to the liability. Wherediscounting is used, the increase in the provision due to the passage of time is recognized as a finance cost.

(n) Foreign currency translation

The financial statements are presented in Canadian dollars, which is the functional currency of the Trust and the presentationcurrency for the consolidated financial statements.

Assets and liabilities of operations having a functional currency other than Canadian dollars are translated at the rate of exchangeat the balance sheet date. Revenues and expenses are translated at average rates for the period, unless exchange rates fluctuatedsignificantly during the period, in which case the exchange rates at the dates of the transaction are used. The resulting foreigncurrency translation adjustments are recognized in OCI.

Foreign currency transactions are translated into the functional currency using exchange rates prevailing at the date of thetransactions. At the end of each reporting period, foreign currency denominated monetary assets and liabilities are translated tothe functional currency using the prevailing rate of exchange at the balance sheet date. Gains and losses on translation ofmonetary items are recognized in the consolidated statement of earnings in general and administrative expense, except for thoserelated to monetary liabilities qualifying as hedges of the Trust’s investment in foreign operations or certain intercompany loans toa foreign operation for which settlement is neither planned nor likely to occur in the foreseeable future, which are included in OCI.

On the disposal of a foreign operation, the exchange differences relating to that foreign operation that have been recognized in OCIand accumulated in the separate component of equity should be recognized in profit or loss when the gain or loss on disposal isrecognized. The Trust utilizes the direct method to determine the amount to be recognized.




(o) Employee future benefits

The Trust operates a defined contribution pension plan and three defined benefit pension plans for certain employees. The Trustexpenses its required contributions to the defined contribution pension plan.

The cost of providing benefits under the defined benefit plans is determined separately for each plan. Actuarial gains and lossesfor the defined benefit plans are recognized in full in the period in which they occur in OCI. Such actuarial gains and losses are alsoimmediately recognized in retained earnings and are not reclassified to profit or loss in subsequent periods. The past service costsare recognized as an expense on a straight-line basis over the average period until the benefits become vested. If the benefits havealready vested, immediately following the introduction of, or changes to, a pension plan, past service costs are recognizedimmediately.

The defined benefit asset or liability comprises the present value of the defined benefit obligation (using a discount rate based onhigh quality corporate bonds), less unamortized past service costs and less the fair value of plan assets out of which theobligations are to be settled.

(p) Significant accounting judgments, estimates and assumptions

The preparation of the Trust’s consolidated financial statements requires management to make judgments, estimates andassumptions that affect the reported amounts of revenues, expenses, assets and liabilities, and the disclosure of contingentliabilities, at the reporting date. However, uncertainty about these assumptions and estimates could result in outcomes thatrequire a material adjustment to the carrying amount of the asset or liability affected in future periods.

(i) Judgments

In the process of applying the Trust’s accounting policies, management has made the following judgments, which have themost significant effect on the amounts recognized in the consolidated financial statements:

(1) Investment properties

The Trust’s accounting policies relating to investment properties are described in Note 2(e). In applying these policies,judgment is applied in determining whether certain costs are additions to the carrying amount of the property, indistinguishing between tenant incentives and improvements and for properties under development, in identifying the pointat which completion of the property occurs and identifying the directly attributable borrowing costs to be included in thecarrying value of the development property.

(2) Development costs

Development costs for properties under development are capitalized in accordance with the accounting policy in Note2(e)(ii). Initial capitalization of costs is based on management’s judgment that the development project is in activedevelopment. This amount includes capitalized direct internal development and initial leasing costs, primarily comprisingcompensation costs, property taxes and interest on both specific and general debt.

(ii) Estimates and assumptions

The key assumptions concerning the future and other key sources of estimation uncertainty at the balance sheet date thathave a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the nextfinancial year are discussed below.

(1) Valuation of investment properties

Estimates and assumptions used in the valuation of investment properties are described in Note 3.

(2) Fair value of financial instruments

Where the fair value of financial assets and financial liabilities recorded in the balance sheet or disclosed in the notescannot be derived from active markets, they are determined using valuation techniques including the discounted cash flowsmodel. The inputs to these models are taken from observable markets where possible, but where this is not feasible, adegree of judgment is required in establishing fair values. The judgments include considerations of inputs such as liquidityrisk, credit risk and volatility. Changes in assumptions about these factors could affect the reported fair value of financialinstruments.

(3) Guarantees

The Trust reviews its contingent liabilities relating to guarantees it provides on behalf of third parties. The Trust’sguarantees remain in place for certain debts assumed by purchasers in connection with property dispositions, and willremain until such debts are extinguished or lenders agree to release RioCan’s covenants. Recourse would be available tothe Trust under these guarantees in the event of a default by the borrowers, in which case the Trust would have a claim




against the underlying real estate investments. A provision is recorded by the Trust when it is expected that the borrowerwill not honour its obligations as a result of the inability of the underlying assets’ performance to meet the contractual debtservice terms of the underlying debt and the fair value of the collateral assets are insufficient to cover the obligations andencumbrances in a sale between unrelated parties in the normal course of business. The Trust’s estimates of future cashflow (which amongst others, involve assumptions of estimated occupancy, rental rates and residual value) and fair valuecould vary and result in a significantly different assessment of the need for and amount of any provisions.

(4) Deferred income taxes

Deferred income taxes are determined using the liability method for temporary differences at the balance sheet datebetween the tax bases of assets and liabilities and their carrying amounts for financial reporting purposes, and bygenerally applying the substantively enacted tax rates applicable to the Trust to such temporary differences that wouldfollow from the manner in which the Trust expects to recover or settle the carrying value of its assets and liabilities.

As of January 1, 2011, the Trust qualified as a mutual fund trust and a REIT for Canadian income tax purposes and as aresult does not account for deferred taxes (except those within certain wholly owned incorporated entities) after January 1,2011. The Trust expects to continue to qualify as a mutual fund trust and a REIT; however, should it no longer qualify itwould not be able to flow through its taxable income to unitholders and the Trust would therefore be subject to tax.

The Trust expects its US subsidiary to continue to qualify as a REIT for US tax purposes and as a result does not account fordeferred taxes related to the US subsidiary. If the US subsidiary were to no longer qualify as a US REIT, it would be subjectto tax.

(q) Changes in accounting policies

The Trust has applied, for the first time, certain standards and amendments that required restatement of previous financialstatements. On January 1, 2013, the Trust adopted the following IFRS standards as described below:

IAS 1, Presentation of Financial Statements (IAS 1)

The amendments to IAS 1 require entities to group items presented in other comprehensive income (OCI) on the basis of whetherthey will or will not subsequently be reclassified to profit or loss. Amendments to IAS 1 are applicable to annual periods beginningon or after July 1, 2012. These amendments did not result in a material impact to the consolidated financial statements.

IAS 19, Employee Benefits (IAS 19)

The amendments to IAS 19 include eliminating the option to defer the recognition of gains and losses, streamlining thepresentation of changes to assets and liabilities with all changes from re-measurement to be recognized in OCI and enhancing thedisclosure of the characteristics of defined benefit plans and the risks that entities are exposed to through participation in thoseplans. This amendment did not result in a material impact to the consolidated financial statements.

IFRS 10, Consolidated Financial Statements (IFRS 10)

IFRS 10 replaces IAS 27, Consolidated and Separate Financial Statements and Standing Interpretations Committee-12, Consolidation –Special Purpose Entities. The new standard provides a single model for consolidation based on control, which exists when aninvestor is exposed to or has the right to variable returns from its involvement with the investee and has the current ability to affectthose returns through its power over the investee. IFRS 10 also provides guidance on how to evaluate power and requires thatcontrol be assessed as facts and circumstances change. The adoption of IFRS 10 did not have a material impact on theconsolidated financial statements.

IFRS 11, Joint Arrangements (IFRS 11)

IFRS 11 replaces IAS 31, Interests in Joint Ventures. The new standard eliminates the option to proportionately consolidate interestsin certain types of joint ventures. IAS 28, Investments in Associates has also been amended and establishes the requirements forthe application of the equity method to these investments.

Under IFRS 11, the Trust classifies its interests in joint arrangements as either joint operations or joint ventures depending on theTrust’s rights to the assets and obligations for the liabilities of the arrangements. When making this assessment, managementconsiders the structure of the arrangements, the legal form of any separate vehicles, the contractual terms of the arrangementsand other facts and circumstances.

The Trust re-evaluated its interests in joint arrangements and determined that its joint arrangements in Canada should beclassified as joint operations since the Trust has rights to and is liable for the gross cash flows of the co-owned assets. As a result,the Trust will continue to recognize its proportionate share in these Canadian joint arrangements. For certain of its jointarrangements in the United States, the Trust has determined that these arrangements are joint ventures since the Trust has rightsto and is liable for the net assets of the arrangement. As a result, the Trust no longer proportionately consolidates thesearrangements and accounts for its ownership interest using the equity method. The majority of these investments have been eitherfully consolidated or disposed of during the reporting period (note 17).




The following tables summarize the adjustments made to the Trust’s consolidated balance sheets as at December 31, 2012 andJanuary 1, 2012, and its consolidated statement of earnings for the year ended December 31, 2012.

January 1, 2012

As previouslyreported Adjustments As restated

ASSETS

Investment properties $ 10,409 $ (513) $ 9,896

Investments in equity accounted investments and joint ventures – 286 286

Mortgages and loans receivable 147 – 147

Deferred tax assets 8 – 8

Investment 41 – 41

Receivables and other assets 85 (10) 75

Cash and equivalents 77 (46) 31

Overall impact on total assets $ 10,767 $ (283) $ 10,484

LIABILITIES

Mortgages payable and lines of credit $ 4,212 $ (253) $ 3,959

Debentures payable 822 – 822

Accounts payable and other liabilities 291 (30) 261

Overall impact on total liabilities $ 5,325 $ (283) $ 5,042

EQUITY 5,442 – 5,442

Overall impact on total liabilities and equity $ 10,767 $ (283) $ 10,484

December 31, 2012

As previouslyreported Adjustments As restated

ASSETS

Investment properties $ 12,389 $ (624) $ 11,765

Investments in equity accounted investments and joint ventures – 321 321

Mortgages and loans receivable 200 – 200

Deferred tax assets 9 – 9

Investment 50 – 50

Receivables and other assets 112 (13) 99

Cash and equivalents 183 (8) 175

Overall impact on total assets $ 12,943 $ (324) $ 12,619

LIABILITIES

Mortgages payable and lines of credit $ 4,446 $ (287) $ 4,159

Debentures payable 1,292 – 1,292

Accounts payable and other liabilities 325 (37) 288

Overall impact on total liabilities $ 6,063 $ (324) $ 5,739

EQUITY 6,880 – 6,880

Overall impact on total liabilities and equity $ 12,943 $ (324) $ 12,619




For the year ended December 31, 2012As previously

reported Adjustments As restated

Rental revenue $ 1,091 $ (55) $ 1,036


Recoverable under tenant leases 365 (17) 348

Non-recoverable from tenants 13 (1) 12

378 (18) 360

Operating income 713 (37) 676

Other income

Fees and other 25 – 25

Interest 12 – 12

Share of net earnings in equity accounted investments and joint ventures – 69 69

Fair value gains on investment property, net 913 (45) 868

950 24 974

Other expenses

Interest 246 (12) 234

General and administrative 41 (1) 40

Transaction and other costs 5 5

Impairment of investment 12 – 12

304 (13) 291

Overall impact on net earnings $ 1,359 $ – $ 1,359

IFRS 12, Disclosure of Interests in Other Entities (IFRS 12)

IFRS 12 sets out the requirements for disclosures relating to an entity’s interests in subsidiaries, joint arrangements, associatesand structured entities.

IFRS 13, Fair Value Measurement (IFRS 13)

IFRS 13 establishes a comprehensive standard for fair value measurement and establishes disclosure requirements for use acrossall IFRS standards. IFRS 13 does not change when an entity is required to use fair value, but rather provides guidance on how tomeasure fair value under IFRS when fair value is required or permitted. The application of IFRS 13 has not materially impacted thefair value measurements carried out by the Trust, but specific additional disclosures required by this standard are included innote 3 and note 27.

(r) Future changes in accounting policies

RioCan monitors the potential changes proposed by the IASB and analyzes the effect that changes in the standards may have onRioCan’s operations.

Standards issued but not yet effective up to the date of issuance of these consolidated financial statements are described below.This description is of the standards and interpretations issued, that the Trust reasonably expects to be applicable at a future date.The Trust intends to adopt these standards when they become effective.

IFRS 9, Financial Instruments (IFRS 9)

IFRS 9 as issued reflects the IASB’s work to date on the replacement of Financial Instruments: Recognition and Measurement(IAS 39), and applies to the classification and measurement of financial assets and financial liabilities as defined in IAS 39. InNovember 2013, the IASB issued a new version of IFRS 9 (IFRS 9 (2013)) which includes the new hedge accounting requirementsand some related amendments to IAS 39, Financial Instruments: Recognition and Measurement and IFRS 7, Financial Instruments:Disclosures. IFRS 9 (2013) does not have a mandatory effective date. The impact of this ongoing project will be assessed by theTrust as remaining phases of the project are completed.




Amendments to IAS 32, Financial Instruments: Presentation – Offsetting Financial Assets and Financial Liabilities (IAS 32)

In December 2011, the IASB issued certain amendments to IAS 32, which establishes disclosure requirements that are intended tohelp clarify for financial statement users the effect or potential effect of offsetting arrangements on a company’s financial position.These amendments are effective for the Trust’s annual period beginning on January 1, 2014. The Trust has determined that theadoption of these amendments will not have a material impact on its consolidated financial statements.

IFRIC Interpretation 21, Levies (IFRIC 21)

IFRIC 21 clarifies that an entity recognizes a liability for a levy when the activity that triggers payment occurs, as identified by therelevant legislation. For a levy that is triggered upon reaching a minimum threshold, the interpretation clarifies that no liabilityshould be anticipated before the specified minimum threshold is reached. The IFRIC does not apply to accounting for income taxes,fines and penalties or for the acquisition of assets from governments. IFRIC 21 is effective for annual periods beginning on or afterJanuary 1, 2014. The Trust is in the process of assessing the impact of the adoption of this interpretation on its consolidatedfinancial statements.

3. Investment propertiesDecember 31,

2013December 31,

2012

(restated note 2(q))Income properties $ 12,433 $ 11,278Properties under development 583 440Properties held for resale 46 47

$ 13,062 $ 11,765

(a) Income properties

For the year ended December 31, 2013 2012

(restated note 2(q))Balance, beginning of year $ 11,278 $ 9,511Acquisitions 829 769Reclassification on dissolution of equity accounted investments (note 17) 586 –Capital expenditures 28 17Tenant installation costs 33 35Dispositions (709) (71)Transfers from properties under development 123 159Transfers to properties under development (58) (13)Fair value gains, net 215 857Foreign currency translation gain (loss) 105 (20)Other 3 34

Balance, end of year $ 12,433 $ 11,278




(b) Properties under development


Balance, beginning of year $ 440 $ 347Acquisitions 56 99Development expenditures 141 129Completion of properties under development (123) (159)Transfers from income properties 58 13Fair value gains, net 6 11Other 5 –

Balance, end of year $ 583 $ 440

(c) Properties held for resale

As at December 31, 2013, properties held for resale were $45.9 million (December 31, 2012 – $ 47.4 million). Properties heldfor resale is inventory valued at the lower of cost and net realizable value.

(d) Investment properties held for sale

As at December 31, 2013, the Trust has six investment properties held for sale with an aggregate fair value of $60.2 million(December 31, 2012 - $646.5 million), which are included in income properties.

Investment Property

Included in investment property is $97.4 million (December 31, 2012 - $93.5 million) of net rents receivable arising from therecognition of rental revenue on a straight-line basis over the lease term.

Included in investment property are finance leases on properties for which the Trust has exercised its options to purchase in 2034and 2037. As at December 31, 2013, the fair value of these properties is $31.9 million (December 31, 2012 – $33.9 million).

Included in investment property are three properties, Albion Centre, Georgian Mall and Shoppers World Danforth, which aresubject to land leases from third parties. The land lease for Georgian Mall, which expires in 2020, includes a buy-out option. Theland leases for Albion Centre and Shoppers World Danforth, which both expire in 2029, do not include buy-out options. These threeproperties are operating leases, subject to IAS 40, Investment Property, and have been accounted for as finance leases andrecorded at fair value within income properties. The fair value of these three properties is $397.5 million for the land and building(December 31, 2012 - $381.3 million) and the lease obligation is $15.6 million (December 31, 2012 - $17.2 million) and is includedin accounts payable and other liabilities.

Valuation Methodology

As highlighted in note 27, the fair value methodology for the Trust’s income properties, properties under development andinvestments in equity accounted investments and joint ventures is considered Level 3, as significant unobservable inputs arerequired to determine fair value.

Management estimates the fair value of each income property internally based on a valuation technique known as the “directcapitalization income approach”. The fair value is determined by applying a capitalization rate to stabilized net operating income(NOI), which incorporates allowances for vacancy, management fees and structural reserves for capital expenditures for theproperty. The resulting capitalized value is further adjusted, where appropriate, for costs to stabilize the income andnon-recoverable capital expenditures.

Significant increases (decreases) in estimated rental value and rent growth per annum in isolation would result in a significantlyhigher (lower) fair value of income properties. Significant increases (decreases) in long-term vacancy rate (and exit yield) inisolation would result in significantly lower (higher) fair value.

Generally, a change in the assumption made for the estimated rental value is accompanied by:

• A directionally similar change in the rent growth per annum and discount rate (and exit yield)

• An opposite change in the long term vacancy rate




Management uses an internal valuation process to estimate the fair value of properties under development that consist ofundeveloped land on a land value per acre basis using the particular attributes of the project with respect to zoning andpre-development work performed on the site. Where a site is partially developed, the direct capitalization method is applied tocapitalize the pro forma NOI, stabilized with market allowances, from which the costs to complete the development are deducted.

Significant increases (decreases) in construction costs, cost escalation rates and estimated time to complete construction inisolation would result in a significantly lower (higher) fair value of properties under development.

The below table summarizes the key unobservable inputs:

Valuation approach Key unobservable input

Inter-relationship between keyunobservable inputs and fairvalue measurement

Income properties Direct capitalization incomeapproach

- Capitalization rate There is an inverse relationshipbetween the capitalization rateand the fair value; in other words,the higher the capitalizationrates, the lower the estimatedfair value.

Properties underdevelopment

Direct capitalization incomeapproach

- Capitalization rate There is an inverse relationshipbetween the capitalization rateand the fair value; in other words,the higher the capitalizationrates, the lower the estimatedfair value.

Properties underdevelopment -undeveloped land

Direct comparison approach - Comparison tomarket transactionsfor similar assets

Land value is in line with markettrend.

The tables below provide further details of the average capitalization rates for income properties, properties under developmentand investments in equity accounted investments and joint ventures in aggregate (weighted based on stabilized NOI), and rangesfor each retail class. Capitalization rates are based on RioCan’s proportionate share of the stabilized NOI and results of operationsof its entire portfolio.

December 31, 2013 December 31, 2012

Retail Class

WeightedAverage Cap.

Rate* Range

WeightedAverage Cap.

Rate* Range

Canadian Portfolio 5.81% 4.76% – 9.00% 5.91% 4.21% – 9.00%US Portfolio 6.40% 5.50% – 7.50% 6.58% 5.50% – 7.80%

Total Weighted Average 5.91% 4.76% – 9.00% 6.01% 4.21% – 9.00%


The fair value change in investment property for the year ended December 31, 2013 is $221 million ($868 million for the year endedDecember 31, 2012).




The following table provides a sensitivity analysis for the weighted average capitalization rate applied as at December 31, 2013:

(in billions, except percentages)

Capitalization rate sensitivityIncrease (decrease)

Weightedaverage

capitalizationrate*

Fair value ofinvestment portfolio

Fair valuevariance % change

Ratio ofdebt, net of

cash, to totalassets, net

of cash

(1.00%) 4.91% $ 15.6 $ 2.7 20.6% 36.7%(0.75%) 5.16% $ 14.8 $ 1.9 14.7% 38.5%(0.50%) 5.41% $ 14.1 $ 1.2 9.3% 40.3%(0.25%) 5.66% $ 13.5 $ 0.6 4.4% 42.1%December 31, 2013 5.91% $ 12.9 $ – – 43.9%

0.25% 6.16% $ 12.4 $ (0.5) (4.1%) 45.7%0.50% 6.41% $ 11.9 $ (1.0) (7.8%) 47.4%0.75% 6.66% $ 11.4 $ (1.5) (11.3%) 49.2%1.00% 6.91% $ 11.0 $ (1.9) (15.1%) 50.9%


4. Mortgages and Loans ReceivableDecember 31,

2013December 31,

2012

Current $ 147 $ 108Non-current 101 92

$ 248 $ 200

As at December 31, 2013, mortgages and loans receivable bear interest at effective rates between 4.0% and 8.0% per annum(contractual rates between 0% and 8.0% per annum) with a weighted average effective rate of 5.9% per annum (contractual rate of5.8% per annum), and mature between 2014 and 2018.


Due on demand $ 117For the year ending December 31:2014 302015 382016 452017 92018 9

$ 248

5. InvestmentAs at December 31, 2012, the Trust’s investment consisted of its ownership of 9.4 million common shares of Cedar Realty Trust(Cedar). In the second quarter of 2012, as a result of the prolonged decrease in the fair value of this investment below the Trust’soriginal cost, management recorded a $12 million impairment charge based on the share price as at June 30, 2012 of US$5.05.

On February 7, 2013, RioCan sold its investment in Cedar for total proceeds of approximately US $48 million.




6. Receivables and Other Assets


(restated note 2(q))

CurrentNon-

current Total CurrentNon-

current Total

Contractual rents receivable $ 35 $ – $ 35 $ 31 $ – $ 31Prepaid expenses and other assets 15 26 41 18 25 43Management information system 18 18 3 3Funds held in trust – 41 41 – 22 22Fair value of interest rate swap agreements (note 23) – 1 1 – – –

$ 50 $ 86 $136 $ 49 $ 50 $ 99

Contractual rents receivable, including both billed and accrued amounts, are non-interest bearing and are generally on 30-90 dayterms.

Prepaid expenses and other assets mainly comprise prepaid property taxes, available for sale assets, furniture and equipment.

7. Mortgages Payable and Lines of Credit

(a) Mortgages payable and lines of credit



Current $ 413 $ 574Non-current 4,099 3,585

$ 4,512 $ 4,159

As at December 31, 2013, mortgages payable bear interest at effective rates between 1.70% and 9.14% per annum (contractualrates between 1.68% and 8.45% per annum) with a weighted average effective rate of 4.79% per annum (contractual rate of4.71% per annum) and mature between 2014 and 2034.


Scheduledprincipal

amortizationPrincipal

maturitiesTotal

repayments

Weightedaverage

contractualinterest rate

For the period ending December 31: 2014 $ 86 $ 327 $ 413 4.62%

2015 80 603 683 4.63%

2016 69 650 719 4.55%

2017 57 915 972 3.61%

2018 43 485 528 3.80%

Thereafter 80 1,104 1,184 4.71%

$415 $4,084 $ 4,499Unamortized differential between contractual

and market interest rates on liabilitiesassumed at the acquisition of properties 28

Unamortized debt financing costs (15)

$4,512




As at December 31, 2013, US dollar denominated debt amounted to US $1.3 billion (December 31, 2012 – US $0.9 billion).

As at December 31, 2013, RioCan had three revolving lines of credit in place with three Canadian Schedule I financial institutions,having an aggregate capacity of $535 million ( December 31, 2012 - $425 million).

Subsequent to December 31, 2013, RioCan renegotiated an existing operating facility and added a fourth operating line. An existingfacility has been increased from $100 million to $130 million and the new facility has a capacity of $75 million; both have pricingsimilar to RioCan’s other operating lines and maturity dates of June 2017. These facilities bring RioCan’s aggregate limit to $640million.

The following table summarizes the details of the Trust’s secured lines of credit as at December 31, 2013:

Amounts drawn

Facilitymaximum loan

amountCash

advancesLetters

of credit

Availableto be

drawn Interest rates Maturity

1 $ 250(i) $ 28 $ 10 $ 212 CDN$ advances – prime plus 0.25% per annum or Bankers’ Acceptanceplus 1.25%; US$ advances – US$ Base Rate plus 0.25% per annum or US$LIBOR plus 1.25%

November 2016

2 100(i) — 29 71 CDN$ advances – prime plus 0.5% per annum or Bankers’ Acceptanceplus 1.5%; US$ advances – US$ Base Rate plus 0.5% per annum or US$LIBOR plus 1.5%

June 2014

3 185(i) 40 — 143 CDN$ advances – prime plus 0.25% per annum or Bankers’ Acceptanceplus 1.25%; US$ advances – US$ Base Rate plus 0.25% per annum or US$LIBOR plus 1.25%

December 2016(plus one year

extension subjectto Bank approval)

$ 535 $ 68 $ 39 $ 426

(i) Secured by charges against certain income properties. Should the aggregate agreed values for lending purposes of such properties fall to alevel that would not support a borrowing of the maximum loan amount, RioCan has the option to provide substitute income properties asadditional security;

(b) Net current liabilities

December 31, 2013December 31,

2012


Cash and equivalents $ 39 $ 175Receivables and other assets (note 6) 50 49Mortgages and loans receivable (note 4) 147 108

Current assets 236 332Accounts payable and other liabilities (note 10) 232 218Debentures payable (note 8) – 150

Net current assets (liabilities) before undernoted 4 (36)Mortgages payable and lines of credit (note 7) 413 574

Net current liabilities $ (409) $ (610)




8. Debentures PayableThe following represents current and non-current debentures payable, net of unamortized debt financing costs:


Current $ – $ 150Non-current 1,447 1,142

$ 1,447 $ 1,292

The Trust has the following series of senior unsecured debentures outstanding as at December 31, 2013:

Series Principal amount Maturity date Coupon rate Interest payment frequency

N (i) $ 106 September 21, 2015 4.10% Semi-annualO 225 January 21, 2016 4.50% Semi-annualP 150 March 1, 2017 3.80% Semi-annualS 250 March 5, 2018 2.87% Semi-annualQ 175 June 28, 2019 3.85% Semi-annualR 250 December 13, 2021 3.72% Semi-annualT 200 April 18, 2023 3.73% Semi-annualI 100 February 6, 2026 5.95% Semi-annual

$ 1,456

(i) US dollar denominated $100 million debenture.

The debentures have covenants relating to RioCan’s leverage limit of up to 60% of aggregate assets as set out in the Trust’sDeclaration, the maintenance of a $1.0 billion Adjusted Book Equity (as defined in the debenture), and maintenance of an interestcoverage ratio of 1.65 times or greater. There are no requirements under the unsecured debenture covenants for RioCan tomaintain unencumbered assets. RioCan has the right, at any time, to convert the Series I debentures to mortgage debt, subject tothe acceptability of the security given to the debenture holders. In such an event, the covenants relating to the 60% leverage limit,minimum book equity and interest coverage ratio would be eliminated for those debentures.

On February 27, 2013, the Trust issued $250 million of Series S senior unsecured debentures, which mature on March 5, 2018 andcarry a coupon rate of 2.87%. These debentures are subject to the same covenants as the other above noted outstandingdebentures, with the exception of Series I, which has an additional provision as discussed above. Debenture issuance costs wereapproximately $1.8 million.

On March 11, 2013, the $150 million Series G senior unsecured debentures with a coupon rate of 5.23% matured and were repaidin accordance with their terms.

On April 18, 2013, the Trust issued $200 million of Series T senior unsecured debentures, which mature on April 18, 2023 and carrya coupon rate of 3.725%. These debentures are subject to the same covenants as the above noted outstanding debentures, with theexception of Series I, which has an additional provision as discussed above. Debenture issuance costs were approximately$1.9 million. The majority of the proceeds from the offering were used to redeem the Series M debentures on May 17, 2013 with aprincipal amount of $150 million due on March 31, 2015. The total redemption price was $1,072.30 plus accrued and unpaidinterest of $7.275, up to but excluding the redemption date, both per $1,000 principal amount. The early extinguishment of thesedebentures resulted in costs of $12 million recorded in the net earnings during the year ended December 31, 2013. The balance ofthe Series T senior unsecured debenture issue proceeds were used for general Trust purposes.

Subsequent to December 31, 2013, the Trust issued $150 million of Series U senior unsecured debentures. For further details,please see note 33.




As at December 31, 2013, debentures payable bear interest at a weighted average effective rate of 3.98% per annum (contractualrate of 3.88% per annum). Future repayments are as follows:

Principalmaturities

Weighted averagecontractual

interest rate

For the period ending December 31: 2014 $ – –2015 106 4.10%2016 225 4.50%2017 150 3.80%2018 250 2.87%Thereafter 725 4.06%

Contractual obligations 1,456Unamortized debt financing costs (9)

$ 1,447

9. Income TaxesThe Trust qualifies as a REIT for Canadian income tax purposes. The Trust expects to distribute all of its taxable income tounitholders and is entitled to deduct such distributions for income tax purposes. Accordingly, no provision for Canadian currentincome tax payable is required, except for amounts incurred in its incorporated Canadian subsidiaries.

The Trust’s US subsidiary qualifies as a REIT for US income tax purposes. The subsidiary expects to distribute all of its US taxableincome (if any) to Canada and is entitled to deduct such distributions for US income tax purposes. Accordingly, no provision forUS current income tax payable is required.

Where an entity does not qualify as a REIT for Canadian income tax purposes, certain distributions will not be deductible by thatentity in computing its income for Canadian tax purposes. As a result, the entity will be subject to tax at a rate substantiallyequivalent to the general corporate income tax rate on distributed taxable income. Distributions paid in excess of taxable incomewill continue to be treated as a return of capital to unitholders. Undistributed taxable income is subject to the top marginalpersonal tax rate. The Trust consolidates certain wholly owned incorporated entities that remain subject to tax. The tax disclosuresand expense relate only to these entities.

Components of deferred tax assets on the consolidated balance sheetsDecember 31,

2013December 31,

2012

Tax effected temporary differences between accounting and tax basis of:Intangibles and other $ 9 $ 9

Deferred tax assets $ 9 $ 9

As at December 31, 2013, the Trust’s incorporated Canadian subsidiaries recorded deferred tax assets of $9 million (December 31,2012 – $9 million).




10. Accounts Payable and Accrued Liabilities



CurrentNon-

current Total CurrentNon-

current Total

Property operating costs $ 41 $ 16 $ 57 $ 46 $ 21 $ 67Development costs and other capital expenditures 54 – 54 43 – 43Contingent consideration 3 – 3 14 – 14Interest on mortgages and debentures payable 29 – 29 30 – 30Distributions to unitholders payable 36 – 36 35 – 35Property taxes 31 – 31 18 – 18Deferred revenue 15 15 30 9 6 15Tenant installation costs 12 – 12 12 – 12Unfunded employee future benefits (note 31) – 10 10 – 10 10Trustees’ restricted equity unit plan (note 12 (b)) – 2 2 – 2 2Fair value of interest rate swap agreements (note 23) – 8 8 – 15 15Finance lease obligations (note 32) – 16 16 – 16 16Other 11 – 11 11 – 11

$ 232 $ 67 $ 299 $ 218 $ 70 $ 288

11. Unitholders’ Equity(a) Common trust units

The Trust is authorized to issue an unlimited number of common units. The common units are entitled to distributions as and whendeclared by the Board and on liquidation to a pro rata share of the residual net assets remaining after the preferential claimsthereon of debt holders and preferred unitholders. As the Trust is a closed end trust, the units are not puttable. The units issuedand outstanding are as follows:


Units(in

thousands) $

Units(in

thousands) $

Units outstanding, beginning of year (i) 300,099 4,130 279,113 3,585Units issued:

Exchangeable limited partnership units – – 29 1Public offerings (ii)(iii) – – 15,510 424Distribution reinvestment plan 4,365 110 4,081 108Direct purchase plan 53 1 47 1Unit option plan 476 8 1,319 24

Common trust units repurchased and cancelled (iv) (918) (13) – –Value associated with unit options granted – 5 – 5Unit issue costs (ii)(iii) – – – (18)

Units outstanding, end of year (i) 304,075 4,241 300,099 4,130

(i) Included in units outstanding are exchangeable limited partnership units of four limited partnerships that are subsidiaries of the Trust (the LPunits), which were issued to vendors as partial consideration for income properties acquired by RioCan (December 31, 2013 – 1,772,837 units;December 31, 2012 – 2,312,661 units). RioCan is the general partner of the limited partnerships. The LP units are entitled to distributionsequivalent to distributions on RioCan units, and are exchangeable for RioCan units on a one-for-one basis at any time at the option of theholder.




(ii) On April 20, 2012, RioCan issued an aggregate of 8,584,750 trust units at a price of $26.80 per unit for aggregate gross proceeds of$230 million. The aggregate offering comprised the issuance of 7,465,000 trust units at $26.80 per unit for gross proceeds of $200 milliontogether with the option granted to underwriters, which was exercised in full, for an issuance of an additional 1,119,750 units at $26.80 perunit for additional gross proceeds of $30 million. Unit issue costs associated with the offering were approximately $10 million.

(iii) On September 19, 2012, RioCan issued an aggregate of 6,925,000 trust units at a price of $27.90 per unit for aggregate gross proceeds of$194 million. The aggregate offering comprised of the issuance of 6,275,000 units at $27.90 per unit for gross proceeds of $175 milliontogether with the option granted to underwriters, which was exercised in part for an issuance of an additional 650,000 units at $27.90 per unitfor additional gross proceeds of $18 million. Unit issue costs associated with the offering were approximately $8 million.

(iv) On July 25, 2013, RioCan announced the TSX approval of its notice of intention to make a normal course issuer bid (NCIB) for a portion of itsUnits as appropriate opportunities arise from time to time. RioCan’s NCIB will be made in accordance with the requirements of theTSX. Under the NCIB, RioCan may acquire up to a maximum of 15,039,156 of its Units, or approximately 5% of its issued and outstanding Unitsas at July 19, 2013, for cancellation over the next 12 months commencing on or about August 3, 2013 until August 2, 2014 (as such other timeas RioCan completes its purchases or provides notice of termination of such bid). The number of Units that can be purchased pursuant to thebid is subject to a current daily maximum of 149,016 Units (equal to 25% of the average daily trading volume from January 1, 2013 through toJune 30, 2013), subject to RioCan’s ability to make one block purchase of Units per calendar week in excess of such limits. RioCan intends tofund the purchases out of its available cash and undrawn credit facilities. Purchases are made at market prices through the facilities of theExchange. During the year ended December 31, 2013, the Trust acquired and cancelled 917,700 units at a weighted average price of$24.04 per unit, for a total cost of $22.1 million. The excess of the purchase price over the book value of the units purchased was recorded asa charge to cumulative earnings amounting to $9.3 million.

(b) Preferred trust units

The Trust is authorized to issue 50 million preferred units.

(i) Series A

In 2011, the Trust issued a total of 5 million perpetual Cumulative Rate Reset Preferred Trust Units, Series A (the Series AUnits) for aggregate gross proceeds of $125 million. The Series A Units pay a cumulative distribution yield of 5.25% perannum, payable quarterly, as and when declared by the Board of Trustees of RioCan, for the initial five-year period endingMarch 31, 2016. The distribution rate will be reset on March 31, 2016 and every five years thereafter, at a rate equal to the thenfive-year Government of Canada bond yield plus 2.62%.

The Series A Units are redeemable by RioCan, at its option, on March 31, 2016 and on March 31 of every fifth yearthereafter. Holders of Series A Units have the right to reclassify all or any part of their units as perpetual Cumulative FloatingRate Preferred Trust Units, Series B (the Series B Units), subject to certain conditions, on March 31, 2016 and on March 31 ofevery fifth year thereafter. Holders of Series B Units will be entitled to receive a cumulative quarterly floating distribution at arate equal to the then 90-day Government of Canada Treasury Bill yield plus 2.62%, as and when declared by the Board ofTrustees of RioCan. Holders of Series B Units will have the right to reclassify all or part of their units as Series A Units onMarch 31, 2021 and on March 31 of every fifth year thereafter.

(ii) Series C

In 2011, the Trust issued an aggregate of 5.98 million Cumulative Rate Reset Preferred Trust Units, Series C (the Series CUnits) for aggregate gross proceeds of $149.5 million. The Series C Units pay a fixed cumulative distribution yield of 4.70% perannum, payable quarterly, as and when declared by the Board of Trustees of RioCan, for the initial approximate five and a half-year period ending June 30, 2017. The distribution rate will be reset on June 30, 2017 and every five years thereafter at a rateequal to the then five-year Government of Canada bond yield plus 3.18%.

The Series C Units are redeemable by RioCan, at its option, on June 30, 2017 and on June 30 of every fifth year thereafter.Holders of Series C Units have the right to reclassify all or any part of their units as Cumulative Floating Rate Preferred TrustUnits, Series D (the Series D Units), subject to certain conditions, on June 30, 2017 and on June 30 of every fifth yearthereafter. Holders of Series D Units will be entitled to receive a cumulative quarterly floating distribution at a rate equal tothe then 90-day Government of Canada Treasury Bill yield plus 3.18%, as and when declared by the Board of Trustees ofRioCan. Holders of Series D Units will have the right to reclassify all or part of their units as Series C Units on June 30, 2022and on June 30 of every fifth year thereafter.

The Series A Units and the Series C Units will rank equally with each other and with the outstanding Series B Units and theSeries D Units into which they may be reclassified.




(c) Accumulated other comprehensive income (loss)

Accumulated other comprehensive income (loss) consists of the following amounts:

Unrealized income (loss)

Interestrate swap

agreements

Translationof foreign

operations

Available-for-sale

investment

Actuarial gain(loss) onpension Total

As at December 31, 2011 $ (13) $ (4) $ (18) $ – $ (35)Other comprehensive income (loss) – (9) 20 (1) 10Reclassification of pension – – – 1 1

As at December 31, 2012 $ (13) $ (13) $ 2 $ – $ (24)Other comprehensive income (loss) 6 42 (2) 1 47Realized cumulative foreign currency translation difference – (4) – – (4)Reclassification of pension – – – (1) (1)

As at December 31, 2013 $ (7) $ 25 $ – $ – $ 18

12. Unit-based Compensation Plans(a) Incentive unit option plan

As at December 31, 2013, the Trust’s incentive unit option plan (the plan) provides for option grants to a maximum of29.2 million units. As at December 31, 2013, up to 14.8 million unit options have been granted and exercised, 9.7 million unitoptions have been granted and remain outstanding and 4.7 million unit options remain available for grant. The exercise pricefor each option is equal to the volume weighted average trading price of the units on the TSX for the five trading daysimmediately preceding the dates of grant except for those options granted prior to May 27, 2009 which have an exercise priceequal to the closing price of the units on the date prior to the day the option was granted. An option’s maximum term is10 years. All options granted through December 31, 2003 vest at 20% per annum commencing on the grant date, becomingfully vested after four years. All options granted after December 31, 2003 vest at 25% per annum commencing on the firstanniversary of the grant date, and become fully vested after four years.

A summary of unit options granted under the plan is as follows:


Options

Units(in

thousands)

Weightedaverageexercise

price

Units(in

thousands)

Weightedaverageexercise

price

Outstanding, beginning of year 8,376 $ 22.84 7,700 $ 21.07Granted 2,035 27.50 1,995 26.66Exercised (476) 17.48 (1,319) 18.28Forfeited (229) 25.80 – –

Outstanding, end of year 9,706 $ 24.01 8,376 $ 22.84

Options exercisable at end of year 5,170 $ 22.22 4,047 $ 21.98

Weighted average fair value per unit of options granted during the year $ 3.53 $ 3.50




The Trust accounts for the plan using the fair value method, under which compensation expense for each tranche of an awardis measured at the grant date and recognized over the vesting period. Unit-based compensation expense and assumptionsutilized in the calculation thereof using the Black-Scholes option valuation model are as follows:

(units in thousands)For the year ended December 31, 2013 2012

Unit-based compensation expense $ 6 $ 5

Unit options granted 2,035 1,995Unit option holding period (years) 5.5 – 7 5.5 – 7Weighted average volatility rate 25.2% 26.1%Weighted average distribution yield 5.1% 5.2%Weighted average risk free interest rate 1.8% 1.6%

(b) Trustees’ restricted equity unit plan

The Trustees’ restricted equity unit plan provides for an allotment of restricted equity units (REUs) to each non-employeetrustee (member). The value of REUs allotted appreciates or depreciates with increases or decreases in the market price ofthe Trust’s units. Members are also entitled to be credited with REUs for distributions paid in respect of units of the Trustbased on an average market price of the units as defined by the plan. REUs vest and are settled three years from the date ofissue by a cash payment equal to the number of vested REUs credited to the member based on an average market price of theTrust’s units at the settlement date. As at December 31, 2013, accounts payable and other liabilities include accruedcompensation costs relating to the REUs of $1.7 million (December 31, 2012 – $1.9 million).

13. Distributions to UnitholdersRioCan currently qualifies as a mutual fund trust and a REIT for income tax purposes. RioCan intends, but is not contractuallyobligated, to distribute all of the Trust’s taxable income to unitholders in each year, as calculated in accordance with the Act afterall permitted deductions under the Act have been taken.

Total distributions declared to unitholders are as follows:


TotalDistributions

Distributionsper unit

TotalDistributions

Distributionsper unit

Common Unitholders $ 426 $ 1.4100 $ 401 $ 1.3800Preferred Unitholders – Series A $ 7 $ 1.3125 $ 7 $ 1.3125Preferred Unitholders – Series C $ 7 $ 1.1750 $ 7 $ 1.1750

14. Rental RevenueFor the year ended December 31, 2013 2012

(restatednote 2(q))

Rental income $ 737 $ 675Straight-line rent 6 7

743 682

Common area maintenance recoveries 149 134Realty tax recoveries 214 201Percentage rent 5 6Lease cancellation fees 10 13

Rental revenue $ 1,121 $ 1,036




15. Property Operating Costs – Recoverable Under Tenant LeasesFor the year ended December 31, 2013 2012

(restatednote 2(q))

Realty tax $ 225 $ 212Common area maintenance (i) 151 136

$ 376 $ 348

(i) Includes salaries and benefits for the year ended December 31,2013 of $57.2 million ($51.1 million for the year ended December 31, 2012).

16. Fees and Other IncomeFor the year ended December 31, Note 2013 2012

(restatednote 2(q))

Property and asset management fees earned from co-ownerships, partners and other 17 $ 17 $ 15Transaction gains – 8Dividends declared on Cedar shares – 2

$ 17 $ 25




17. Subsidiaries and Joint ArrangementsDuring the year ended December 31, 2013, the Trust completed the dissolution of certain partnership arrangements with RetailProperties of America Inc. (RPAI), Dunhill Partners, Inc. (Dunhill), and Sterling Organization LLC (Sterling). As a result, the Trustfully consolidates these subsidiaries as at December 31, 2013 and has derecognized the corresponding non-controlling interest.

(a) Subsidiaries

The following are the significant subsidiaries of the Trust:

Percentage of equity interest

NameCountry ofIncorporation

December 31,2013

December 31,2012

RioCan Management Inc. (BC) Canada 100% 100%RioCan Management Inc. Canada 100% 100%RioCan (KS) Management LP Canada 100% 100%RioCan Management Beneficiary Trust Canada 100% n/aRioCan Yonge Eglinton LP Canada 100% 100%RioCan (Festival Hall) Trust Canada 100% 100%Timmins Square Limited Partnership Canada 100% 100%Shoppers World Brampton Investment Trust Canada 100% 100%RioCan Realty Investments Partnership Three LP Canada 100% 100%RioCan Realty Investments Partnership Eight LP Canada 100% 100%RioCan Realty Investments Partnership One LP Canada 100% 100%RioCan Realty Investments Partnership Two LP Canada 100% 100%RioCan Realty Investments Partnership Four LP Canada 100% 100%RioCan Realty Investments Partnership Seven LP Canada 100% 100%RioCan (GH) Limited Partnership Canada 100% 100%RioCan Property Services Trust Canada 100% 100%RioCan White Shield Limited Partnership Canada 60% 60%RioCan (GTA Marketplace) LP Canada 100% 100%RC REIT LP Canada 100% n/aRioCan Holdings USA Inc. US 100% 100%RioCan Northeast Partnership LP US 100% 100%RC/Dunhill Timber Creek Holdings LP US 100% 80%RC Dunhill LP US 100% 82%RC Sterling LP US 100% 100%RC Sterling II LP US 100% 90%RC/Dunhill LCV Arbor Holdings LP US 100% 85%RioCan (America) Management Inc. US 100% 100%RioCan USA Subsidiary Inc. US 100% 100%RC (RP) LP US 100% 80%RC/Dunhill Louetta Holdings LP US 100% 85%RioKim USA LP US 100% 50%




The following amounts are included in the Trust’s consolidated financial statements relating to these operating subsidiaries:

As at December 31, 2013 Dunhill Other Total

Non-current assets $ – $ 25 $ 25

Net assets at 100% $ – $ 25 $ 25

Carrying amount of non-controlling interest $ – $ 11 $ 11

For the year ended December 31, 2013

Revenue $ 16 $ 5 $ 21Net earnings and total comprehensive income 10 8 18

Net earnings allocated to non-controlling interest $ 2 $ 2 $ 4

As at December 31, 2012 Cedar (i) Dunhill Other Total

Current assets $ – $ 9 $ 1 $ 10Non-current assets – 253 52 305Current liabilities – (7) (1) (8)Non-current liabilities – (139) (15) (154)

Net assets at 100% $ – $ 116 $ 37 $ 153

Carrying amount of non-controlling interest $ – $ 21 $ 12 $ 33

For the year ended December 31, 2012

Revenue $ 59 $ 17 $ 5 $ 81Net earnings and total comprehensive income 74 14 7 95

Net earnings allocated to non-controlling interest $ 10 $ 3 $ 2 $ 15

(i) On October 10, 2012, RioCan dissolved its joint venture agreement with Cedar and as a result, RioCan acquired Cedar’s 20% interest in 21 ofthe properties and sold its 80% interest in one property, Franklin Village, to Cedar.

(b) Joint arrangements

The Trust has invested in certain joint ventures that are structured using entities that separate the investor and the investee.As a result, the Trust only has rights to and is liable for the net assets of the investee for these joint ventures.

On October 1, 2013, RioCan completed the dissolution of its joint venture arrangements with its Texas, partners, RPAI andDunhill.

As at December 31, 2013, the Trust’s joint venture with Kimco Realty Corporation (Kimco) on the Montgomery Plaza propertyis recorded using the equity method of accounting.




The following tables summarize the financial information of joint ventures that are accounted for using the equity method. Thetables also reconcile the summarized financial information to the carrying amount of the Trust’s interest in these jointventures:

As at December 31, 2013 RPAI Other Total

Equity Ownership Interest 80% 15% - 80%

Current assets $ – $ 6 $ 6Non-current assets – 95 95Current liabilities – (8) (8)Non-current liabilities – (41) (41)

Net assets at 100% $ – $ 52 $ 52

Trust’s investments in equity accounted joint ventures $ – $ 36 $ 36

For the year ended December 31, 2013 RPAI Other Total

Revenue $ 47 $ 17 $ 64Expenses (15) (6) (21)Fair value gain 5 10 15Interest expense (10) (4) (14)

Net earnings and total comprehensive income at 100% $ 27 $ 17 $ 44

Trust’s share of net earnings in equity accounted joint ventures $ 22 $ 10 $ 32

As at December 31, 2012 RPAI Other Total

Equity Ownership Interest 80% 15% - 80%

Current assets $ 22 $ 28 $ 50Non-current assets 669 184 853Current liabilities (34) (14) (48)Non-current liabilities (310) (106) (416)

Net assets at 100% $ 347 $ 92 $ 439

Trust’s investments in equity accounted joint ventures $ 278 $ 43 $ 321

For the year ended December 31, 2012 RPAI Other Total

Revenue $ 61 $ 14 $ 75Expenses (20) (4) (24)Fair value gain 54 3 57Interest expense (14) (4) (18)

Net earnings and total comprehensive income at 100% $ 81 $ 9 $ 90

Trust’s share of net earnings in equity accounted joint ventures $ 65 $ 4 $ 69




18. Interest Expense

For the year ended December 31, 2013, interest was capitalized to properties under development based on a weighted averageinterest rate of 4.8% (for the year ended December 31, 2012 – 5.2%) as follows:


(restatednote 2(q))

Total interest $ 255 $ 253Less: Capitalized to properties under development 21 19

$ 234 $ 234

19. General and Administrative


(restatednote 2(q))

Salaries and benefits $ 19 $ 20Public company costs 4 4Professional fees 6 6Unit based compensation expense 6 5Other 10 5

Total general and administrative 45 40

Other general and administrative expenses include travel and accommodation, occupancy costs, charitable donations,depreciation, advertising and promotion, and marketing material.

20. Transaction and Other Costs


Transaction related expenses $ 8 $ 1Demolition costs 3 2Realized foreign currency gain (i) (4) –Other 2 2

$ 9 $ 5

(i) During October 2013, as a result of the dissolution of certain of the Trust’s equity method accounted investments related to its US operations,RioCan realized a $4.4 million foreign currency transaction gain. This exchange gain was transferred from a separate component of equity tonet earnings upon closing of the transactions resulting in the disposal of these investments.

21. Segmented Information

The Trust operates in the shopping centre segment of the real estate industry in both Canada and the US.

As at December 31, 2013, the Trust’s portfolio comprises 340 retail properties, including 16 under development. The Trust’sportfolio of 47 US grocery anchored and new format retail centres (December 31, 2012 – 50) comprise 46 directly owned centresand 1 centre owned through a joint venture arrangement with Kimco Realty Corporation.

During the year ended December 31, 2013, the Trust’s partnership arrangements with RPAI, Sterling, and Dunhill were dissolved.These properties, which were previously structured as partnership arrangements are now fully consolidated as at December 31,2013. The Trust has one remaining US property, Montgomery Plaza LP, that is accounted for using the equity method, whichrelates to the partnership arrangement with Kimco.




No single tenant accounts for 5% or more of the Trust’s consolidated rental revenue.

The following summary presents segmented financial information by geographic location which is consistent with the manner inwhich management currently evaluates operating segment performance:

Net earnings by reportable segment for the year ended December 31, 2013 is as follows:

Canada US Eliminations (i) Total

Rental revenue $ 997 $ 124 $ – $ 1,121


Recoverable under tenant leases 344 32 – 376

Non-recoverable from tenants 16 – – 16

360 32 – 392

Operating income 637 92 – 729

Other income

Fees and other 17 – – 17

Interest 57 – (43) 14

Share of net earnings in equity accounted investments and joint ventures 1 31 32

Fair value gains on investment property, net 132 89 – 221

207 120 (43) 284

Other expenses

Interest 206 71 (43) 234

General and administrative 40 5 – 45

Transaction and other costs 8 1 – 9

Expense for early redemption of debentures 12 – – 12

266 77 (43) 300

Net earnings $ 578 $ 135 $ – $ 713

(i) Represents intercompany loans interest

The net book value of real estate investments and capital expenditures as at December 31, 2013 is as follows:


Real estate investments

Income properties $ 10,379 $ 2,054 $ – $ 12,433

Properties under development 583 – – 583

Properties held for resale 46 – – 46

$ 11,008 $ 2,054 $ – $ 13,062

Total assets $ 11,753 $ 2,140 $ (363) $ 13,530

Total liabilities $ 5,354 $ 1,267 $ (363) $ 6,258

Capital expenditures $ 204 $ 10 $ – $ 214

(i) Intercompany loans of $363 million (US$341 million) and related interest between RioCan Holdings USA Inc. and RioCan REIT




Net earnings by reportable segment for the year ended December 31, 2012 is as follows:


Rental revenue $ 945 $ 91 $ – $ 1,036


Recoverable under tenant leases 325 23 – 348Non-recoverable from tenants 12 – – 12

337 23 – 360

Operating income 608 68 – 676

Other income

Fees and other 23 2 – 25Interest 48 – (36) 12Share of net earnings in equity accounted investments and joint ventures – 69 – 69Fair value gains on investment property, net 810 58 – 868

881 129 (36) 974

Other expenses

Interest 209 61 (36) 234General and administrative 39 1 – 40Transaction and other costs 4 1 – 5Impairment of investment – 12 – 12

252 75 (36) 291

Earnings before income taxes 1,237 122 – 1,359

Net earnings $ 1,237 $ 122 $ – $ 1,359

(i) Represents intercompany loans interest

The net book value of real estate investments and capital expenditures as at December 31, 2012 is as follows:


Real estate investments

Income properties $ 10,132 $ 1,146 $ – $ 11,278Properties under development 440 – – 440Properties held for resale 47 – – 47

$ 10,619 $ 1,146 $ – $ 11,765

Total assets $ 11,475 $ 1,552 $ (408) $ 12,619Total liabilities $ 5,210 $ 937 $ (408) $ 5,739Capital expenditures $ 191 $ 5 $ – $ 196

(i) Intercompany loan of $408 million (US$410 million) and related interest between RioCan Holdings USA Inc. and RioCan REIT




22. Net Earnings per UnitNet earnings per unit and weighted average common units outstanding are calculated as follows:


Net earnings attributable to common and preferred unitholders $ 709 $ 1,344Less: Distributions to preferred unitholders 14 14

Net earnings attributable to common unitholders $ 695 $ 1,330

Weighted average common units outstanding – basic (ii) 302,324 289,950Unexercised dilutive unit options (ii) 936 1,348

Weighted average common units outstanding – diluted (i), (ii) 303,260 291,298

Net earnings per unit – basic $ 2.30 $ 4.59

Net earnings per unit – diluted $ 2.29 $ 4.57

(i) The calculation of diluted weighted average units outstanding excludes options for 4.9 million units for the year ended December 31, 2013(December 31, 2012 – 2.3 million units) as their inclusion would be anti-dilutive.

(ii) Unit information is shown in thousands.




23. Hedging ActivitiesFrom time to time, the Trust may enter into interest rate swap transactions to modify the interest rate profile of its current orfuture variable rate debt without an exchange of the underlying principal amount. The Trust applies hedge accounting to such cashflow hedging relationships whereby the change in the fair value of the effective portion of the hedging derivative is recognized inOCI. The ineffective portion for accounting purposes is recognized in net earnings.

Since 2009, the Trust has entered into interest rate swap agreements on floating interest rate first mortgages to hedge thevariability in cash flows attributed to fluctuating interest rates. Settlement on both the fixed and variable portion of the interest rateswaps occurs on a monthly basis. The following table summarizes the details of the interest rate swaps that are outstanding as atDecember 31, 2013:

Transaction date Original principal amountEffective fixed

interest rate Maturity date

February 2009 $ 42 4.87% February 2014December 2010 16 5.03% December 2020April 2011 (i) 15 5.24% February 2016April 2011 (ii) 59 4.61% April 2016May 2011 2 4.89% May 2021July 2011 (iii) 53 4.20% July 2016September 2011 23 4.04% September 2021December 2011 (iv) 8 5.49% April 2014December 2011 33 3.36% December 2016December 2011 30 4.13% December 2021September 2012 23 3.78% December 2018September 2012 16 3.77% May 2018September 2012 27 3.74% May 2017September 2012 26 4.26% October 2018September 2012 45 4.08% November 2017September 2012 21 3.78% April 2017September 2012 64 4.04% November 2018November 2012 13 3.08% November 2017May 2013 58 2.98% May 2018May 2013 17 3.07% May 2018November 2013 25 3.99% December 2020November 2013 111 2.16% February 2019

$ 727

(i) US denominated $14 million mortgage assumed upon property acquisition.(ii) US denominated $55 million mortgage.(iii) US denominated $50 million mortgage.(iv) $8 million mortgage assumed upon property acquisition.

The Trust has assessed that there is no ineffectiveness in the hedge of its interest rate exposure. The effectiveness of the hedgingrelationships is reviewed on a quarterly basis. As an effective hedge, unrealized gains or losses on the interest rate swapagreements are recognized in OCI. As at December 31, 2013, the fair value of the interest rate swaps are, in aggregate, a netfinancial liability of $8.4 million (December 31, 2012 – $14.8 million). The associated unrealized gains or losses that are recognizedin OCI will be reclassified into net earnings in the same period or periods during which the interest payments on the hedged itemaffect net earnings.




24. Net Change in Non-Cash Operating ItemsCash flows provided by (used in)For the year ended December 31, 2013 2012

(restatednote 2(q))

Accounts receivable $ 6 $ (11)Mortgage receivable interest (11) (2)Prepaid expenses and other assets (41) (18)Accounts payable and accrued liabilities 1 13Other (9) 6

$ (54) $ (12)

25. Supplemental Cash Flow InformationFor the year ended December 31, 2013 2012

(restatednote 2(q))

Interest received $ 14 $ 11Interest paid 256 263Acquisition of real estate investments through assumption of liabilities and mortgages given by vendors 313 188Cash equivalents, end of year:

Term deposits – 33Bankers’ acceptances – 100

26. Operating Leases – Trust as LessorThe Trust as lessor has entered into leases on its property portfolio. The leases typically have lease terms between five and 20years and include clauses to enable periodic upward revision of the rental charge according to prevailing market conditions. Someleases contain options to terminate before the end of the lease term.

Future minimum rentals receivable under non-cancellable operating leases as at December 31, 2013 are as follows:

December 31,2013

Within 1 year $ 712

After 1 year, but not more than 5 years 2,055

More than 5 years 1,550

Total $ 4,317




27. Fair Value MeasurementThe fair value hierarchy of assets and liabilities measured at fair value on the consolidated balance sheet or disclosed in the notesto financial statements is as follows


(restated note 2(q))Level 1 Level 2 Level 3 Level 1 Level 2 Level 3

Assets measured at fair value:Cash and equivalents $ 39 $ – $ – $ 175 $ – $ –Mortgages and loans receivable – 248 – – 200 –Interest rate swap asset (note 23) – 1 – – – –Investment* – – – 50 – –Other assets ** – – 16 – – 12Investment property

Income properties – – 12,433 – – 11,278Properties under development – – 583 – – 440

Liabilities measured at fair value:Interest rate swap liability (note 23) $ – $ 9 $ – $ – $ 15 $ –Contingent consideration – – 3 – – 14

Liabilities for which fair values are disclosed (note 29):Mortgage payable and lines of credit – 4,712 – – 4,465 –Debentures payable – 1,439 – – 1,345 –

* Represent the Trust’s investment in Cedar, which was disposed in February, 2013;** Represent the Trust’s investment in WCNUF I and WCNUF II.

There have been no transfers among all levels during the year.

28. Capital ManagementThe Trust defines capital as the aggregate of unitholders’ equity and debt. The Trust’s capital management framework is designedto maintain a level of capital that complies with investment and debt restrictions pursuant to RioCan’s Declaration, complies withexisting debt covenants, enables the Trust to achieve target credit ratings, funds its business strategies and builds long-termunitholder value. The key elements of RioCan’s capital management framework are approved by its unitholders via the Trust’sDeclaration of Trust and by its Board through their annual review of the Trust’s strategic plan and budget, supplemented byperiodic Board and Board Committee meetings. Capital adequacy is monitored by the Trust by assessing performance against theapproved annual plan throughout the year, which is updated accordingly, and by monitoring adherence to investment and debtrestrictions contained in the Declaration and debt covenants.

RioCan’s Declaration provides for maximum total debt levels up to 60% of Aggregate Assets (as defined in the Declaration). TheTrust is in compliance with this restriction.

Additionally, RioCan’s Declaration contains provisions that have the effect of limiting capital expended by the Trust for, amongother items, the following:

• direct and indirect investments (net of related mortgages payable) in non-income producing properties (including greenfielddevelopments and mortgages receivable to fund the Trust’s co-owners’ share of such developments) to no more than 15% of theAdjusted Unitholders’ Equity of the Trust (herein referred to as the “Basket Ratio” with Adjusted Unitholders’ Equity as defined inthe Declaration). The Trust is in compliance with this restriction;

• total investment by the Trust in mortgages receivable, other than mortgages taken back by the Trust on the sale of itsproperties, to no more than 30% of the Adjusted Unitholders’ Equity of the Trust. The Trust is in compliance with this restriction;

• any property acquired by the Trust, directly or indirectly, if the cost to the Trust of such acquisition (net of the amount ofmortgages payable assumed) exceeds 10% of the Adjusted Unitholders’ Equity of the Trust. The Trust is in compliance with thisrestriction;

• subject to the Basket Ratio, securities of an entity, other than to the extent that such securities would, for the purpose of theDeclaration, constitute an investment in real estate. The Trust is in compliance with this restriction; and




• the amount of space that can be leased or subleased to any tenant, with certain exceptions, to a maximum space having anaggregate gross leasable area of 20% of the aggregate gross leasable area of all real estate investments held by the Trust. TheTrust is in compliance with this restriction.

The Trust intends, but is not contractually obligated, to distribute to its unitholders in each year an amount not less than theTrust’s income for the year, as calculated in accordance with the Income Tax Act (Canada) (the Tax Act) after all permitteddeductions under the Tax Act have been taken. RioCan’s Trustees rely upon forward looking cash flow information, includingforecasts and budgets and the future business prospects of RioCan, to establish the level of cash distributions.

The Trust’s debentures payable have covenants that are consistent with the Debt to Aggregate Assets ratio as discussed above,maintenance of at least $1 billion of Adjusted Book Equity (defined in the indenture), and maintenance of at least an interestcoverage ratio (defined in the indenture) of 1.65 for a rolling twelve-month period.

December 31,2013

December 31,2012 Increase


CapitalMortgages payable and lines of credit (note 7) $ 4,512 $ 4,159 $ 353Debentures payable (note 8) 1,447 1,292 155

Total Debt 5,959 5,451 508Unitholders’ equity 7,261 6,847 414

Total capital $ 13,220 $ 12,298 $ 922

Ratio of Debt, net of cash, to Total Assets, net of cash 43.9% 42.4% 1.5%

Basket Ratio 4.8% 4.4% 0.4%

For the year endedDecember 31,

2013December 31,

2012 Change


Interest coverage ratio 2.91 2.93 (0.02)

29. Financial Instruments

(a) Fair value of financial instruments

The Trust’s receivables and other assets, mortgages and loans receivable and accounts payable and other liabilities aresubstantially carried at amortized cost, which approximates fair value. Cash and equivalents and investments are measured atfair value. The fair value of other financial instruments is based upon discounted future cash flows using discount rates thatreflect current market conditions for instruments with similar terms and risks. Such fair value estimates are not necessarilyindicative of the amounts the Trust might pay or receive in actual market transactions. Potential transaction costs have alsonot been considered in estimating fair value.

Financial instruments carried at amortized cost on the consolidated balance sheets are as follows:

2013 2012

(restated note 2(q))Carrying

valueFair

valueCarrying

valueFair

value

Mortgages and loans receivable $ 248 $ 248 $ 200 $ 200Mortgages payable and lines of credit 4,512 4,712 4,159 4,465Debentures payable 1,447 1,439 1,292 1,345




(b) Risk management

The main risks arising from the Trust’s financial instruments are credit, interest rate, liquidity and foreign exchange risks. TheTrust’s approach to managing these risks is summarized below:

(i) Credit risk

Credit risk arises from the possibility that:

• Tenants may experience financial difficulty and be unable to fulfill their lease commitments or tenants may fail to occupyand pay rent in accordance with existing lease agreements, some of which are conditional.

• Borrowers default on the repayment of their mortgages to the Trust.

• Third parties default on the repayment of debt to the Trust (for discussion on joint arrangements, see note 17, and onguarantees, see note 32).

As discussed in note 28, RioCan’s Declaration contains provisions that have the effect of limiting the amount of space thatcan be leased to one tenant and its investment in mortgages receivable.

Additionally, the Trust mitigates tenant credit risk through geographical diversification, staggered lease maturities,diversification of revenue sources resulting from a large tenant base, avoiding dependence on any single tenant by ensuringno individual tenant contributes a significant percentage of the Trust’s gross revenue and ensuring a considerable portionof the Trust’s revenue is earned from national and anchor tenants and conducting credit assessments for new tenants.

As at December 31, 2013:

• Minimum annualized rentals (exclusive of recoverable property operating costs and taxes) for tenant leases expiring ineach of the next five years ending December 31 are as follows: 2014 – $84 million; 2015 – $76 million; 2016 – $88 million;2017 – $80 million; and 2018 – $97 million.

The above aggregate rentals over the next five years represent annual lease payments of $425 million based on currentcontractual rental rates. For every such lease renewed upon maturity at an aggregate rental rate differential of 100 basispoints, the Trust’s net earnings would be impacted by approximately $4 million annually.

• No individual tenant comprises more than approximately 5% of the Trust’s annualized rental revenue for 2013 and 2012.

• Approximately 86.2% of the Trust’s annualized rental revenue for 2013 and 2012 was derived from national and anchortenants (which tenant covenants are expected to be of higher credit quality than other tenants).

(ii) Interest rate and liquidity risks

The Trust is exposed to interest rate risk on its borrowings. Liquidity risk arises from the possibility of not having sufficientdebt and equity capital available to the Trust to fund its growth program and refinance its debts as they mature. The Trust’sfinancial condition and results of operations would be adversely affected if it were unable to obtain financing, or obtain cost-effective financing.

As discussed in note 28, RioCan’s Declaration establishes a Debt to Aggregate Assets ratio limit of 60%.

Additionally, the Trust mitigates interest rate and liquidity risks by staggering the maturity dates of its long-term debt (seenotes 7 and 8 for Aggregate Debt), by entering into interest rate swap (option) agreements (see note 23), and by limiting theuse of floating rate debt.

As at December 31, 2013:

• The Trust’s Aggregate Debt has a 4.72 year weighted average term to maturity bearing interest at a weighted averagecontractual interest rate of 4.3% per annum.

• 8% of the Trust’s Aggregate Debt is at floating interest rates as at December 31, 2013.

• The Trust’s undrawn lines of credit are $426 million (see note 7).

• The ratio of Debt, net of cash, to Total Assets, net of cash is 43.9% (see note 28).

• As at December 31, 2013, the Trust had cash and equivalents of $39 million as compared to $175 million as atDecember 31, 2012.

As at December 31, 2013, the Trust has aggregate contractual debt principal maturities through to December 31, 2016 ofapproximately $1.95 billion (32.7% of RioCan’s Aggregate Debt) with a weighted average contractual interest rate of 4.3%.




For every such amount refinanced upon maturity at an aggregate interest rate differential of 100 basis points, the Trust’snet earnings would be impacted by approximately $19.5 million annually.

(iii) Foreign exchange risk

The Trust operates in Canada and in the US. The functional currency of the Trust is the Canadian dollar, as is the reportingcurrency. The functional currency of the Trust’s US operations is the US dollar. The Trust also holds interest bearing debtdenominated in US dollars. The Trust is exposed to both transaction and translation risk due to the volatility of foreigncurrency exchange rates, primarily arising from its US dollar denominated investments and, to a lesser extent, its monetaryassets and liabilities denominated in this currency. The carrying values of these assets and liabilities, as well as thecomprehensive income and earnings derived from them, are subject to foreign exchange rate fluctuation.

Foreign exchange risk arises because the US dollar denominated financial statements of the US operations may vary onconsolidation into Canadian dollars. Exchange gains and losses from the translation of the US operations are included inOCI. As a result, the Trust may experience translation exposures because of volatility in the exchange rate between theCanadian and US dollar.

As at December 31, 2013, the Trust’s US denominated net assets are $754 million; therefore a 1% change in the value of theUS dollar will result in a gain or loss to OCI to the Trust of approximately $7.5 million, and an approximately $1 millionimpact to consolidated net earnings.

30. Related Party TransactionsCompensation of key management

The Trust’s key management personnel include the Trustees and the following individuals: the Chief Executive Officer, EdwardSonshine; President and Chief Operating Officer, Frederic Waks; and Executive Vice President and Chief Financial Officer,Raghunath Davloor (collectively the Key Executives).

Remuneration of the Trust’s key management during the year was as follows:

Trustees Key Executives

For the year ended December 31, 2013 2012 2013 2012

Compensation and benefits $ 0.7 $ 0.7 $ 7.3 $ 7.2Share-based payments 1.2 1.4 2.7 2.4Post-employment benefits – – 0.5 0.7

$ 1.9 $ 2.1 $ 10.5 $ 10.3

31. Employee BenefitsThe Trust maintains a total of four pension plans for its employees.

(a) A defined contribution pension plan incurred current service costs in the amount of $0.7 million for the year endedDecember 31, 2013 (year ended December 31, 2012 – $0.6 million).

(b) There are three defined benefit pension plans, of which one is a registered plan and two are unregistered plans. Theplans’ benefits are based on a specified length of service, up to a stated maximum. The fair value of the plan assets as atDecember 31, 2013 was $3 million (December 31, 2012 – $2.5 million). The recognized pension obligation, net of planassets as at December 31, 2013 was $10.2 million (December 31, 2012 – $9.7 million). Pension costs of $1.4 million wererecorded in net earnings for the year ended December 31, 2013 (year ended December 31, 2012 – $1.2 million). Actuarialgains and losses for the defined benefit plans are recognized in full in the period in which they occur in OCI. Suchactuarial gains and losses are also immediately recognized in retained earnings and are not reclassified to earnings insubsequent periods.

32. Contingencies and Commitments(a) Guarantees

As at December 31, 2013, the estimated amount of third-party debt subject to RioCan guarantees, and therefore the maximumexposure to credit risk, was approximately $467 million consisting of guarantees totalling $282 million to partners and co-owners and $185 million on the assumption of mortgages by purchasers on property dispositions (December 31, 2012 –




$299 million) with expiry dates between 2014 and 2034. There have been no defaults by the primary obligors for debts on whichthe Trust has provided its guarantees, and as a result, no provision for these guarantees has been recognized in theseConsolidated Financial Statements.

(b) Contractual obligations on real estate

RioCan has one income property under firm contract in the US where conditions have been waived pursuant to a purchase andsale agreement that, if completed, represents an acquisition of US$9 million at RioCan’s interest at a capitalization rate of8.0%.

RioCan has one income property disposition under firm contract in Canada where conditions have been waived pursuant to apurchase and sale agreement at a sales price of $5 million. There is no debt associated with the property, which has a grossleasable area of approximately 52,000 square feet.

RioCan has two development sites in Canada under firm contract where conditions have been waived pursuant to purchaseand sale agreements that, if completed, represent acquisitions of $20 million at RioCan’s interest.

(c) Litigation

The Trust is involved with litigation and claims which arise from time to time in the normal course of business. In the opinionof management, any liability that may arise from such contingencies will not have a significant adverse effect on the Trust’sConsolidated Financial Statements.

(d) Lease commitments – Trust as Lessee

The Trust as Lessee is committed under long-term operating leases with various expiry dates to 2029. Minimum annualrentals are as follows:

December 31, 2013

LandLeases

OperatingLeases

TotalCommitments

Within 1 year $ 3 $ 1 $ 4After 1 year, but not more than 5 years 10 2 12More than 5 years 18 5 23

Total $ 31 $ 8 $ 39

Included in the above are land lease commitments of $21 million which have been accounted for as finance leases andinvestment property. The corresponding lease obligation of $15.6 million has been recognized in accounts payable andaccrued liabilities as at December 31, 2013.

(e) Investment Commitment

As at December 31, 2013, the Trust has unfunded investment commitments of approximately $19.2 million relating to WCNUFI and WCNUF II. Amounts to be funded are callable by the general partner at any point prior to the expiration of the investmentperiod, which is February 29, 2018.

33. Events after the Balance Sheet Date

Debt Issuance

On January 23, 2014, the Trust issued to the public on a bought deal basis $150 million principal amount of Series U seniorunsecured debentures (the Debentures). The debentures mature on June 1, 2020 and carry a coupon rate of 3.62%. Debentureissuance costs were approximately $1 million. The majority of the proceeds from the offering will be used to funddevelopment, for property acquisitions, to repay certain indebtedness and for general trust purposes.

Buyout of Trinity Interest

RioCan is currently in discussions with Trinity to acquire their 25% interest in each of Stockyards, Toronto, and McCallLanding, Calgary, as well as Trinity’s 10% interest in East Hills, Calgary. If completed, these transactions are targeted to closeduring the first quarter of 2014. It is also the Trust’s intention, pending certain approvals, to take over as developmentmanager for each of these development sites over the remainder of 2014.




Subsequent Acquisitions

On February 3, 2014, RioCan completed the acquisition of the remaining 40% interest in an income property, bringing RioCan’sinterest in the property to 100%. The additional 40% interest was acquired at a purchase price of $11 million, representing acapitalization rate of 5.5%. In connection with the acquisition, RioCan assumed outstanding mortgage financing of $8 million,bearing interest at Banker’s Acceptance plus 1.85%, maturing in September 2015.

On January 24, 2014 RioCan completed the acquisition of a development property on a forward purchase basis at an expectedpurchase price on completion of $58 million, at a capitalization rate of 5.4%. The property was acquired free and clear offinancing.

Subsequent Dispositions

On January 28, 2014, RioCan completed the disposition of an income property at a sales price of $1 million, representing272,000 square feet of retail space. The property was free and clear of financing at the time of sale.

On January 31, 2014 RioCan completed the disposition of an income property at a sales price of $47 million, representing181,000 square feet of retail space. The property was free and clear of financing at the time of sale.


Senior managementEdward Sonshine, O.Ont., Q.C.Chief Executive Officer

Frederic A. WaksPresident & Chief Operating Officer

Raghunath DavloorExecutive Vice President, Chief Financial Officer & Corporate Secretary

Howard RosenSenior Vice President, Chief Accounting Officer

John BallantyneSenior Vice President, Asset Management

Michael ConnollySenior Vice President, Construction

Jonathan GitlinSenior Vice President, Investments

Danny KissoonSenior Vice President, Operations

Jordan RobinsSenior Vice President, Planning & Development

Jeff RossSenior Vice President, Leasing

Nigel BunburyVice President, Financial Reporting & Controls

Stuart CraigVice President, Planning & Development

Roberto DeBarrosVice President, Construction

Lyle GoodisVice President, Marketing

Oliver HarrisonVice President, Asset Management

Oliver HobdayVice President, Legal

Daniel JubinvilleRegional Vice President, Leasing

Suzanne MarineauVice President, Human Resources

Kevin MillerRegional Vice President, Operations – Central Ontario

Pradeepa NadarajahVice President, Property Accounting

Paran NamasivayamVice President, Recovery Accounting

Jane PlettVice President, Operations – Western Canada

Kenneth SiegelVice President, Leasing

Jonathan SonshineVice President, Asset Management

Jeffrey StephensonVice President, Leasing

Naftali SturmVice President, Finance

Renato VaninVice President, Information Technology

Board of truSteeSPaul Godfrey, C.M., O.Ont.1,2,3,4

(Chairman of Board of Trustees)President and Chief Executive Officer,Postmedia Network Inc.

Bonnie Brooks3,4

President, Hudson’s Bay Company

Clare R. Copeland1,2

Chair and Director of Toronto Hydro Corporation

Raymond M. GelgootPartner, Fogler, Rubinoff LLP

Dale H. LastmanCo-Chair and Partner, Goodmans LLP

Sharon Sallows1,2,4

Director of Ontario Teachers’ Pension Plan Board

Edward Sonshine, O.Ont., Q.C .Chief Executive Officer, RioCan Real Estate Investment Trust

Luc Vanneste1,2

Charles M. Winograd2,3,4

President, Winograd Capital Inc.1 member of the Audit Committee2 member of the Human Resources & Compensation Committee3 member of the Nominating & Governance Committee4 member of the Investment Committee

unitholder informationHead OfficeRioCan Real Estate Investment TrustRioCan Yonge Eglinton Centre, 2300 Yonge Street, Suite 500P.O. Box 2386, Toronto, Ontario M4P 1E4Tel: 416-866-3033 or 1-800-465-2733Fax: 416-866-3020Website: www.riocan.comEmail: [email protected]

unitholder and inveStor ContaCtChristian GreenDirector, Investor RelationsTel: 416-864-6483Email: [email protected]

auditorSErnst & Young LLP

tranSfer agent and regiStrarCanada Stock TransferP.O. Box 7010, Adelaide Street Postal Station,Toronto, Ontario M5C 2W9Answerline: 1-800-387-0825 or 416-643-5500Fax: 416-643-5501Website: www.canstockta.comEmail: [email protected]

StoCk exChange liStingThe Toronto Stock ExchangeTrading Symbols:Common Units – REI.UNPreferred Units – Series A REI.PR.A

Series C REI.PR.C

annual meetingThe 2014 Annual Meeting of RioCan REIT will be held on Wednesday, May 28, 2014 at 10:00 a.m. at SilverCity Theatres located at RioCan Yonge Eglinton Centre, 2300 Yonge Street, Toronto, Ontario. All unitholders are invited and encouraged to attend in person or via webcast at www.riocan.com. On peut obtenir une version française du présent rapport annuel sur le site web de RioCan: www.riocan.com.A French language version of this annual report is available on RioCan’s website: www.riocan.com

R E A L E S T A T E I N V E S T M E N T T R U S T

RioCan Yonge eglinton CentRe2300 Yonge StreetSuite 500 P.O. Box 2386Toronto, Ontario M4P IE4

T 416 866 3033 TF 1 800 465 2733F 416 866 3020W www.riocan.com

Documents

focused on the€¦ · focused on the RIOCAN FINANCIAL ANNuAL RepORt 20_13. RIOCAN FINANCIAL Annual Report 20 13 2-3 taBle oF ContentS 1_Property Portfolio 14_Financial Review –