Investment in Partially Owned Entities

Consolidated Entities

The Company has ownership interests of 67% in various limited liability companies which own nine shopping centers. These entities are considered variable interest entities (“VIEs”) as defined in ASC 810, and the Company is considered the primary beneficiary of each of these entities. Therefore, these entities are consolidated by the Company. The entities' agreements contain put/call provisions which grant the right to the outside owners and the Company to require these entities to redeem the ownership interests of the outside owners during future periods. Because the outside ownership interests are subject to a put/call arrangement requiring settlement for a fixed amount, these entities are treated as 100% owned subsidiaries by the Company with the amount of $47,762 as of March 31, 2013 reflected as a financing and included within other liabilities in the accompanying consolidated financial statements. Interest expense is recorded on these liabilities in an amount generally equal to the preferred return due to the outside owners as provided in the entities' agreements.

For the VIEs where the Company is the primary beneficiary, the following are the liabilities of the consolidated VIEs which are not recourse to the Company, and the assets that can be used only to settle those obligations.



	As of March 31, 2013			As of December 31, 2012
Net investment properties	$	112,537		$	113,476
Other assets	8,595			8,687
Total assets	121,132			122,163
Mortgages, notes and margins payable	(76,044		)	(84,291		)
Other liabilities	(49,146		)	(49,648		)
Total liabilities	(125,190		)	(133,939		)
Net assets	$	(4,058	)	$	(11,776	)

Unconsolidated Entities

The entities listed below are owned by the Company and other unaffiliated parties in joint ventures. Net income, distributions and capital transactions for these properties are allocated to the Company and its joint venture partners in accordance with the respective partnership agreements. Refer to the Company’s Form 10-K for the year ended December 31, 2012 for details of each unconsolidated entity.

These entities are not consolidated by the Company and the equity method of accounting is used to account for these investments. Under the equity method of accounting, the net equity investment of the Company and the Company’s share of net income or loss from the unconsolidated entity are reflected in the consolidated balance sheets and the consolidated statements of operations and other comprehensive income.



Entity	Description	Ownership%	Investment at March 31, 2013		Investment at December 31, 2012
Cobalt Industrial REIT II	Industrial portfolio	36%	$	100,398	$	102,599
D.R. Stephens Institutional Fund, LLC	Industrial and R&D assets	90%	34,837		34,541
Brixmor/IA JV, LLC	Retail Shopping Centers	(a)	87,560		90,315
Other Unconsolidated Entities	Various real estate investments	Various	30,513		26,344
			$	253,308	$	253,799


(a)	The Company has a preferred membership interest and is entitled to a 11% preferred dividend in Brixmor/IA JV, LLC.

For the three months ended March 31, 2013 and 2012, the Company recorded impairment of its unconsolidated entities of $0 and $4,200, respectively.

Combined Financial Information

The following table presents the combined condensed financial information for the Company’s investment in unconsolidated entities.



	March 31, 2013		December 31, 2012
Balance Sheets:
Assets:
Real estate assets, net of accumulated depreciation	$	1,394,845	$	1,437,268
Other assets	225,904		222,096
Total Assets	1,620,749		1,659,364
Liabilities and Equity:
Mortgage debt	$	1,050,458	$	1,062,086
Other liabilities	83,612		89,573
Equity	486,679		507,705
Total Liabilities and Equity	$	1,620,749	$	1,659,364
Company’s share of equity	$	252,538	$	252,994
Net excess of cost of investments over the net book value of underlying net assets (net of accumulated depreciation of $1,747 and $1,714, respectively)	770		805
Carrying value of investments in unconsolidated entities	$	253,308	$	253,799



	Three months ended			Three months ended
	March 31, 2013			March 31, 2012
Statements of Operations:
Revenues	$	43,237		$	60,261
Expenses:
Interest expense and loan cost amortization	$	12,121		$	17,589
Depreciation and amortization	15,330			25,371
Operating expenses, ground rent and general and administrative expenses	16,547			19,796
Total expenses	$	43,998		$	62,756
Net income (loss)	$	(761	)	$	(2,495	)
Company’s share of:
Net income (loss), net of excess basis depreciation of $33 and $85	$	(974	)	$	(419	)

The unconsolidated entities had total third party debt of $1,050,458 at March 31, 2013 that matures as follows:



2013	$	21,758
2014	75,233
2015	58,606
2016	—
2017	108,000
Thereafter	786,861
	$	1,050,458

The debt maturities of the unconsolidated entities are not recourse to the Company, and the Company has no obligation to fund such debt maturities. It is anticipated that the ventures will be able to repay or refinance all of their debt on a timely basis.