Business Combinations

12 Months Ended

Dec. 31, 2013

Business Combinations [Abstract]

Business Combinations

Business Combinations

Effective December 23, 2013, we acquired a partner’s 50% interest in an unconsolidated joint venture related to a property in California, which resulted in the consolidation of this property. Management has determined that this transaction qualified as a business combination to be accounted for under the acquisition method. Accordingly, the assets and liabilities of this transaction were recorded in our Consolidated Balance Sheet at its estimated fair value as of the effective date. Fair value of assets acquired, liabilities assumed and equity interests were estimated using market-based measurements, including cash flow and other valuation techniques. The fair value measurement is based on both significant inputs for similar assets and liabilities in comparable markets and significant inputs that are not observable in the markets in accordance with our fair value measurements accounting policy. Key assumptions include third-party broker valuation estimates; a discount rate of 7.75%; a terminal capitalization rate for similar properties; and factors that we believe market participants would consider in estimating fair value. The result of this transaction is included in our Consolidated Statements of Operations beginning December 23, 2013.

The following table summarizes the transaction related to the business combination, including the assets acquired and liabilities assumed as indicated (in thousands):

	December 23, 2013
Fair value of our equity interest before business combination	$	90,935
Fair value of consideration transferred	$	3,342		(1)
Amounts recognized for assets and liabilities assumed:
Assets:
Property	$	64,211
Unamortized debt and lease costs	9,213
Accrued rent and accounts receivable	2,868
Cash and cash equivalents	754
Other, net	15,840
Liabilities:
Accounts payable and accrued expenses	(166		)
Other, net	(1,452		)
Total net assets	$	91,268		(2)
Gain recognized on equity interest remeasured to fair value	$	20,234		(3)

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(1) Consideration included $2.8 million of cash and a future obligation of $.5 million.

(2) Excludes the effect of $54.8 million in intercompany debt that is eliminated upon consolidation.

(3) Amount is included in Gain on Sale and Acquisition of Real Estate Joint Venture and Partnership Interests in our Consolidated Statement of Operations.

During 2012, we acquired four centers located in California, Georgia, Maryland and Texas, as well as, we consolidated a partner's 79.6% interest in an unconsolidated tenancy-in-common arrangement related to a property in Louisiana. The following table summarizes the transactions related to these acquisitions, including the assets acquired and liabilities assumed as indicated (in thousands):

	December 31, 2012
Fair value of our equity interest before acquisition	$	3,825
Fair value of consideration transferred	$	218,481		(1)
Amounts recognized for assets and liabilities assumed:
Assets:
Property	$	195,377
Unamortized debt and lease costs	36,787
Restricted deposits and mortgage escrows	395
Other, net	3,742
Liabilities:
Debt, net	(46,923		)	(2)
Accounts payable and accrued expenses	(2,250		)
Other, net	(5,899		)
Total net assets	$	181,229
Acquisition costs (included in operating expenses)	$	1,391
Gain on acquisition	$	1,869

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(1) Includes assumption of debt totaling $37.8 million.

(2) Represents the fair value of debt, which includes $6.3 million that was previously recorded.

The following table summarizes the impact to revenues and net income attributable to common shareholders from our business combination and acquisitions as follows (in thousands):

	Year Ended December 31,
	2013		2012
Increase in revenues	$	197	$	9,370
Increase in net income attributable to common shareholders	—		442

The following unaudited supplemental pro forma data is presented for the year ended December 31, 2013, as if the business combination occurring in 2013 was completed on January 1, 2011. The following unaudited supplemental pro forma data is presented for the year ended December 31, 2012 and 2011, as if the 2012 acquisitions were completed on January 1, 2010. The gain related to these business combinations and acquisitions were adjusted to the assumed acquisition date. The unaudited supplemental pro forma data is not necessarily indicative of what the actual results of our operations would have been assuming the transactions had been completed as set forth above, nor do they purport to represent our results of operations for future periods. The following table summarizes the supplemental pro forma data, as follows (in thousands, except per share amounts):

	Pro Forma 2013(1)		Pro Forma 2012(1)		Pro Forma 2011(1)
Revenues	$	506,861	$	474,383	$	460,472
Net income	244,918		152,016		37,664
Net income attributable to common shareholders	163,907		108,805		1,070
Earnings per share – basic	1.35		0.90		0.01
Earnings per share – diluted	1.34		0.89		0.01

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(1) There are no non-recurring pro forma adjustments included within or excluded from the amounts in the preceding table.