Business Combinations

3 Months Ended

Mar. 31, 2016

Business Combinations [Abstract]

Business Combinations

Business Combination

Except as identified below, our aggregate acquisitions for 2016 and 2015 were not materially significant for disclosure purposes.

Effective February 12, 2016, we acquired a partner’s 49% interest in an unconsolidated joint venture associated with two centers in Colorado, which resulted in the consolidation of these centers (see Note 13 for additional information). 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 Condensed 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 appraisals; a minority interest discount rate of 20%; cash flow discount rates ranging from 6.5% to 8%; a terminal capitalization rate for similar properties ranging from 6% to 7.5%; and factors that we believe market participants would consider in estimating fair value. The result of this transaction is included in our Condensed Consolidated Statements of Operations beginning February 12, 2016.

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

	February 12, 2016
Fair value of our equity interest before business combination	$	22,514		(1)
Amounts recognized for assets and liabilities assumed:
Assets:
Property	$	58,665
Unamortized lease costs	13,736
Accrued rent and accounts receivable	102
Cash and cash equivalents	3,555
Other, net	192
Liabilities:
Debt, net	(48,727		)
Accounts payable and accrued expenses	(1,339		)
Other, net	(3,670		)
Total net assets	$	22,514
Gain recognized on equity interest remeasured to fair value	$	37,383		(2)

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(1) Includes $2.5 million of cash received from the partner.

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

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

	Three Months Ended March 31, 2016
Increase in revenues	$	946
Decrease in net income attributable to common shareholders	500

The following unaudited supplemental pro forma data is presented for the quarters ended March 31, 2016 and 2015, as if the business combination occurring in 2016 was completed on January 1, 2015. The gain related to this business combination was 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 transaction 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):

	Three Months Ended March 31,
	Pro Forma 2016(1)		Pro Forma 2015 (1)
Revenues	$	132,953	$	127,132
Net income	71,158		86,331
Net income attributable to common shareholders	69,565		82,046
Earnings per share – basic	.56		.67
Earnings per share – diluted	.55		.66

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