Effective April 1, 2010, we assumed control of two 50%-owned unconsolidated joint ventures ("Sheridan") related to a development project in Sheridan, Colorado, which resulted in the consolidation of these joint ventures within our shopping center segment that had previously been accounted for under the equity method. Control was assumed through a modification of the joint venture agreements in which we assumed all management, voting and approval rights without transferring consideration to our joint venture partner. Each partner's percentage interest in the joint ventures remained unchanged. Management has determined that these transactions qualified as business combinations to be accounted for under the acquisition method.

Accordingly, the assets and liabilities of these transactions were recorded in our consolidated balance sheet at their estimated fair values as of their respective effective date, with any applicable partner's share of the resulting net change included in noncontrolling interests. Fair value of assets acquired, liabilities assumed and equity interests was 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, discount rate of 8% as of April 13, 2011, and discount rates ranging from 8% to 17% as of April 1, 2010, a terminal cap rate for similar properties, and factors that we believe market participants would consider in estimating fair value. The results of these transactions are included in our Condensed Consolidated Statements of Income and Comprehensive Income beginning April 13, 2011 and April 1, 2010, respectively.

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


	Palm Coast April 13, 2011			Sheridan April 1, 2010

Fair value of our equity interests before business combinations	$	7,578		$	(21,858)

Fair value of consideration transferred	$	11,462	(1)	$	-

Amounts recognized for assets and liabilities assumed:
Assets:
Property	$	32,807		$	32,940
Unamortized debt and lease costs		2,421			5,182
Accrued rent and accounts receivable		211			213
Cash and cash equivalents		1,402			1,522
Other, net		694			151,464	(2)
Liabilities:
Debt, net		-			(101,741)	(3)
Accounts payable and accrued expenses		(137)			(647)
Other, net		(318)			(1,334)

Total net assets	$	37,080		$	87,599

Noncontrolling interests of the real estate joint ventures	$	-		$	(18,573)

(1)

Consideration includes $.5 million of cash and $11.0 million in debt extinguished.

(2)

Includes primarily a $97.0 million debt service guaranty asset, tax increment revenue bonds of $51.3 million and intangible and other assets.

(3)

Excludes the effect of $123.9 million in intercompany debt that is eliminated upon consolidation.

Although we do not anticipate any changes in the Palm Coast fair value measurements, the measurements may be subject to change within 12 months of the business combination date if new facts or circumstances are brought to our attention that were previously unknown but existed as of the business combination date.

As a result of the Palm Coast acquisition, we recognized a gain of $4.6 million which is attributable to the realization upon consolidation of our preferred return on equity and is reported as a gain on acquisition in the Condensed Consolidated Statements of Income and Comprehensive Income for both the three and six months ended June 30, 2011. Additionally, as a result of our Sheridan business combination, we recognized an impairment loss of $15.8 million as a result of revaluing our 50% equity interest held in the real estate joint ventures before the business combinations, which is reported as an impairment loss in the Condensed Consolidated Statements of Income and Comprehensive Income for both the three and six months ended June 30, 2010. For both the three and six months ended June 30, 2011, Palm Coast's impact increased revenues by $.8 million and increased net (loss) income attributable to common shareholders by $.3 million. For both the three and six months ended June 30, 2010, Sheridan's impact increased revenues by $.5 million and decreased net (loss) income attributable to common shareholders by $.9 million.

The following table summarizes the pro forma impact of the real estate joint ventures as if Palm Coast and Sheridan had been consolidated as of the beginning of each respective year as follows (in thousands, except per share amounts):


	Three Months Ended June 30,				Six Months Ended June 30,
	Pro Forma 2011⁽¹⁾		Pro Forma 2010 ⁽¹⁾		Pro Forma 2011⁽¹⁾		Pro Forma 2010 ⁽¹⁾
Revenues	$	141,253	$	138,632	$	276,234	$	275,995
Net income	$	2,887	$	3,703	$	20,066	$	23,187
Net (loss) income attributable to common shareholders	$	(7,218)	$	(5,504)	$	-	$	4,383
Earnings per share – basic	$	(.06)	$	(.05)	$	-	$	.04
Earnings per share – diluted	$	(.06)	$	(.05)	$	-	$	.04

(1)

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