Joint ventures are common in the real estate industry. We use joint ventures to finance properties, develop new properties, and diversify our risk in a particular property or portfolio of properties. We held joint venture ownership interests in 79 properties in the United States as of June 30, 2012 and 87 properties as of December 31, 2011. At June 30, 2012, we also held interests in eight joint venture properties in Japan, two joint venture properties in South Korea, one joint venture property in Mexico, and one joint venture property in Malaysia. We account for these joint venture properties using the equity method of accounting. As discussed below, on January 9, 2012, we sold our interest in GCI which owns 45 properties located in Italy. Additionally, on March 14, 2012, we purchased a 28.7% equity stake in Klépierre. On May 21, 2012 Klépierre paid a dividend, which we elected to receive in additional shares, resulting in an increase in our ownership to approximately 28.9%.

Certain of our joint venture properties are subject to various rights of first refusal, buy-sell provisions, put and call rights, or other sale or marketing rights for partners which are customary in real estate joint venture agreements and our industry. We and our partners in these joint ventures may initiate these provisions (subject to any applicable lock up or similar restrictions), which may result in either the sale of our interest or the use of available cash or borrowings, or the use of limited partnership interests in the Operating Partnership, to acquire the joint venture interest from our partner.

On January 6, 2012, SPG-FCM Ventures, LLC, or SPG-FCM, which holds our investment in The Mills Limited Partnership, or TMLP, distributed its interest in Del Amo Fashion Center to SPG-FCM's joint venture partners. We purchased our venture partner's 25% interest for $50.0 million, which increased our ownership in the property to 50%. As a part of the transaction, we and our venture partner each contributed $50.0 million to SPG-FCM which was used to pay down TMLP's senior loan and the loan we made to SPG-FCM, as discussed below.

On March 22, 2012, we acquired, through an acquisition of substantially all of the assets of TMLP, additional interests in 26 properties, or the Mills transaction, from our joint venture partner. The transaction resulted in 16 of the properties remaining unconsolidated, the consolidation of nine previously unconsolidated properties and the purchase of the remaining noncontrolling interest in a previously consolidated property. The transaction was valued at $1.5 billion, which included repayment of the remaining $562.1 million balance on TMLP's senior loan facility, and retirement of $100.0 million of TMLP's trust preferred securities. In connection with the transaction, our $558.4 million loan to SPG-FCM was extinguished on a non-cash basis. We consolidated $2.6 billion in additional property-level mortgage debt in connection with this transaction. This property-level mortgage debt was previously presented as debt of our unconsolidated entities. We and our joint venture partner had equal ownership in these properties prior to the transaction.

The consolidation of the previously unconsolidated properties resulted in a remeasurement of our previously held interest in each of these properties to fair value and recognition of a corresponding non-cash gain of $488.7 million. In addition, we recorded an other-than-temporary impairment charge of $22.4 million for the excess of carrying value of our remaining investment in SPG-FCM over its estimated fair value. The gain on the transaction and impairment charge are included in gain (loss) upon acquisition of controlling interests, sale or disposal of assets and interests in unconsolidated entities, and impairment charge on investment in unconsolidated entities, net in the accompanying consolidated statements of operations and comprehensive income. The assets and liabilities of the newly consolidated properties acquired in the Mills transaction have been reflected at their estimated fair value at the acquisition date, the majority of which, approximately $4.3 billion, was allocated to the investment property. This purchase price allocation is preliminary and is subject to revision within the measurement period, not to exceed one year from the date of acquisition.

On December 31, 2011, as discussed in Note 9, we and our joint venture partner dissolved a venture in which we had a 50% interest and distributed a portfolio of properties previously held within the venture to us and our joint venture partner.

As discussed above, our loan to SPG-FCM was extinguished in the Mills transaction. During the six month periods ended June 30, 2012 and 2011, we recorded $2.0 million and $4.9 million in interest income (net of inter-entity eliminations), related to this loan, respectively. The loan bore interest at a rate of LIBOR plus 275 basis points.

At June 30, 2012, we owned 57,634,148 shares, or approximately 28.9%, of Klépierre, which had a quoted market price of $32.80 per share. At the date of purchase on March 14, 2012, our excess investment in Klépierre was approximately $1.2 billion which we have allocated, on a preliminary basis, to the underlying investment property, other assets and liabilities based on estimated fair value. Our share of the results of Klépierre, net of the amortization of our excess investment, during our ownership period was nominal.

Based on applicable Euro:USD exchange rates and after our conversion of Klépierre's results to GAAP, Klépierre's total revenues, operating income and consolidated net income were approximately $407.7 million, $154.4 million and $93.1 million, respectively, for the period of our ownership in 2012.

At December 31, 2011, we had a 49% ownership interest in GCI. On January 9, 2012, we sold our entire ownership interest in GCI to our venture partner, Auchan S.A. The aggregate cash we received related to the sale of our interest GCI was $375.8 million and we recognized a gain on the sale of $28.8 million. Our investment carrying value included $39.5 million of accumulated losses related to currency translation and net investment hedge accumulated balances, which had been recorded in accumulated other comprehensive income (loss).

We conduct our international Premium Outlet operations in Japan through a joint venture with Mitsubishi Estate Co., Ltd. We have a 40% ownership interest in this joint venture. The carrying amount of our investment in this joint venture was $335.9 million and $349.5 million as of June 30, 2012 and December 31, 2011, respectively, including all related components of accumulated other comprehensive income (loss). We conduct our international Premium Outlet operations in South Korea through a joint venture with Shinsegae International Co. We have a 50% ownership interest in this joint venture. The carrying amount of our investment in this joint venture was $58.3 million and $43.8 million as of June 30, 2012 and December 31, 2011, respectively, including all related components of accumulated other comprehensive income (loss).

A summary of our investments in joint ventures and share of income from our joint ventures, excluding Klépierre, follows. The statements of operations include amounts related to our investment in GCI, which was sold on January 9, 2012. In addition, we acquired additional controlling interests in The Plaza at King of Prussia and The Court at King of Prussia, or collectively, King of Prussia, on August 25, 2011 and nine properties in the Mills transaction on March 22, 2012. These previously unconsolidated properties became consolidated properties as of their respective acquisition dates. Additionally, on December 31, 2011, we and our joint venture partner dissolved a venture in which we had a 50% interest and distributed a portfolio of properties previously held within the venture to us and our joint venture partner. The results of operations of the properties for all of these transactions are classified as loss from operations of discontinued joint venture interests in the accompanying joint venture statements of operations. Balance sheet information for the joint ventures is as follows:

	June 30, 2012		December 31, 2011

BALANCE SHEETS
Assets:
Investment properties, at cost	$	14,491,236	$	20,481,657
Less — accumulated depreciation		4,725,920		5,264,565

		9,765,316		15,217,092
Cash and cash equivalents		483,433		806,895
Tenant receivables and accrued revenue, net		198,773		359,208
Investment in unconsolidated entities, at equity		39,855		133,576
Deferred costs and other assets		366,900		526,101

Total assets	$	10,854,277	$	17,042,872

Liabilities and Partners' Deficit:
Mortgages and other indebtedness	$	11,499,568	$	15,582,321
Accounts payable, accrued expenses, intangibles, and deferred revenue		527,701		775,733
Other liabilities		308,912		981,711

Total liabilities		12,336,181		17,339,765
Preferred units		67,450		67,450
Partners' deficit		(1,549,354)		(364,343)

Total liabilities and partners' deficit	$	10,854,277	$	17,042,872

Our Share of:
Partners' deficit	$	(708,641)	$	(32,000)
Add: Excess Investment		1,978,514		714,515

Our net Investment in Unconsolidated Entities, at equity	$	1,269,873	$	682,515

"Excess Investment" represents the unamortized difference of our investment over our share of the equity in the underlying net assets of the joint ventures or other investments acquired and is allocated on a fair value basis primarily to investment property, lease related intangibles, and debt premiums and discounts. We amortize excess investment over the life of the related depreciable components of investment property, typically no greater than 40 years, the average remaining lease lives and the applicable debt maturity. The amortization is included in the reported amount of income from unconsolidated entities.

	For the Three Months Ended June 30,				For the Six Months Ended June 30,

	*2012*		*2011*		*2012*		*2011*
STATEMENTS OF OPERATIONS
Revenue:
Minimum rent	$	371,664	$	360,466	$	738,019	$	710,027
Overage rent		36,143		27,126		84,837		57,354
Tenant reimbursements		170,478		166,726		342,571		332,346
Other income		37,488		40,546		88,435		71,898

Total revenue		615,773		594,864		1,253,862		1,171,625
Operating Expenses:
Property operating		115,615		112,918		233,520		224,266
Depreciation and amortization		126,783		123,032		258,174		245,092
Real estate taxes		45,164		47,103		93,216		92,690
Repairs and maintenance		15,919		15,595		30,807		32,311
Advertising and promotion		12,917		11,559		28,344		25,000
(Recovery of)/Provision for credit losses		(1,102)		1,113		(114)		1,917
Other		38,793		44,158		92,356		73,289

Total operating expenses		354,089		355,478		736,303		694,565

Operating Income		261,684		239,386		517,559		477,060
Interest expense		(155,393)		(153,970)		(315,554)		(305,002)
Loss from unconsolidated entities		(316)		(631)		(631)		(459)

Net Income from Continuing Operations		105,975		84,785		201,374		171,599
Loss from operations of discontinued joint venture interests		(1,173)		(9,559)		(11,623)		(15,661)
Gain on disposal of discontinued operations, net		—		15,506		—		15,506

Net Income	$	104,802	$	90,732	$	189,751	$	171,444

Third-Party Investors' Share of Net Income	$	56,787	$	56,455	$	96,800	$	106,470

Our Share of Net Income		48,015		34,277		92,951		64,974
Amortization of Excess Investment		(18,749)		(12,703)		(33,333)		(24,780)
Our Share of Gain on Sale or Disposal of Assets and Interests in Unconsolidated Entities, net		—		(7,753)		—		(7,753)

Income from Unconsolidated Entities	$	29,266	$	13,821	$	59,618	$	32,441