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Investments in and Advances to Joint Ventures | 6 Months Ended
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Jun. 30, 2013
Equity Method Investments And Joint Ventures [Abstract] |
Investments in and Advances to Joint Ventures |
2. |  | INVESTMENTS IN AND ADVANCES TO JOINT VENTURES
At June 30, 2013 and December 31, 2012, the Company had ownership interests in various unconsolidated joint ventures that had an investment in 199 and 206 shopping center properties, respectively. Condensed combined financial information of the Company’s unconsolidated joint venture investments is as follows (in thousands):
|  | June 30, 2013 |  |  | December 31, 2012 |
Condensed Combined Balance Sheets |  |  |  |  |  |  |  |
Land |  | $ | 1,529,795 |  |  | $ | 1,569,548 |
Buildings |  |  | 4,632,324 |  |  |  | 4,681,462 |
Fixtures and tenant improvements |  |  | 266,917 |  |  |  | 244,293 |
|  |  | 6,429,036 |  |  |  | 6,495,303 |
Less: Accumulated depreciation |  |  | (881,857 | ) |  |  | (833,816 | )
|  |  | 5,547,179 |  |  |  | 5,661,487 |
Land held for development and construction in progress |  |  | 277,314 |  |  |  | 348,822 |
Real estate, net |  |  | 5,824,493 |  |  |  | 6,010,309 |
Cash and restricted cash |  |  | 368,948 |  |  |  | 467,200 |
Receivables, net |  |  | 101,938 |  |  |  | 99,098 |
Other assets |  |  | 380,154 |  |  |  | 427,014 |
|  | $ | 6,675,533 |  |  | $ | 7,003,621 |
Mortgage debt |  | $ | 4,141,601 |  |  | $ | 4,246,407 |
Notes and accrued interest payable to DDR(A) |  |  | 153,042 |  |  |  | 143,338 |
Other liabilities |  |  | 295,990 |  |  |  | 342,614 |
|  |  | 4,590,633 |  |  |  | 4,732,359 |
Redeemable preferred equity |  |  | 167,060 |  |  |  | 154,556 |
Accumulated equity |  |  | 1,917,840 |  |  |  | 2,116,706 |
|  | $ | 6,675,533 |  |  | $ | 7,003,621 |
Company’s share of Accumulated Equity |  | $ | 399,551 |  |  | $ | 432,500 |
(A) | The Company has amounts receivable from several joint ventures aggregating $36.3 million and $34.3 million at June 30, 2013 and December 31, 2012, respectively, which are included in Investments in and Advances to Joint Ventures on the condensed consolidated balance sheets. The remaining amounts were fully reserved by the Company in prior years.
|  | Three-Month Periods Ended June 30, |  |  | Six-Month Periods Ended June 30, |
|  | 2013 |  |  | 2012 |  |  | 2013 |  |  | 2012 |
Condensed Combined Statements of Operations |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Revenues from operations |  | $ | 184,820 |  |  | $ | 163,694 |  |  | $ | 371,547 |  |  | $ | 322,908 |
Operating expenses(A) |  |  | 65,022 |  |  |  | 64,433 |  |  |  | 129,909 |  |  |  | 115,495 |
Impairment charges |  |  | 44,563 |  |  |  | — |  |  |  | 44,563 |  |  |  | 840 |
Depreciation and amortization |  |  | 59,045 |  |  |  | 41,863 |  |  |  | 124,345 |  |  |  | 81,550 |
Interest expense |  |  | 60,059 |  |  |  | 58,860 |  |  |  | 122,258 |  |  |  | 113,978 |
|  |  | 228,689 |  |  |  | 165,156 |  |  |  | 421,075 |  |  |  | 311,863 |
(Loss) income before tax expense and discontinued operations |  |  | (43,869 | ) |  |  | (1,462 | ) |  |  | (49,528 | ) |  |  | 11,045 |
Income tax expense (primarily Sonae Sierra Brasil), net |  |  | (7,238 | ) |  |  | (6,200 | ) |  |  | (13,853 | ) |  |  | (12,190 | )
Loss from continuing operations |  |  | (51,107 | ) |  |  | (7,662 | ) |  |  | (63,381 | ) |  |  | (1,145 | )
Discontinued operations: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Loss from discontinued operations |  |  | (87 | ) |  |  | (8,287 | ) |  |  | (62 | ) |  |  | (10,534 | )
(Loss) gain on disposition of real estate, net of tax |  |  | (369 | ) |  |  | 247 |  |  |  | (5,906 | ) |  |  | 107 |
Loss before gain (loss) on disposition of real estate, net |  |  | (51,563 | ) |  |  | (15,702 | ) |  |  | (69,349 | ) |  |  | (11,572 | )
Gain (loss) on disposition of real estate, net |  |  | 164 |  |  |  | (750 | ) |  |  | 643 |  |  |  | 13,102 |
Net (loss) income |  | $ | (51,399 | ) |  | $ | (16,452 | ) |  | $ | (68,706 | ) |  | $ | 1,530 |
Non-controlling interests |  |  | (6,695 | ) |  |  | (4,600 | ) |  |  | (13,914 | ) |  |  | (13,534 | )
Net loss attributable to unconsolidated joint ventures |  | $ | (58,094 | ) |  | $ | (21,052 | ) |  | $ | (82,620 | ) |  | $ | (12,004 | )
Company’s share of equity in net (loss) income of joint ventures |  | $ | (1,522 | ) |  | $ | 3,171 |  |  | $ | 1,528 |  |  | $ | 13,351 |
Amortization of basis differentials(B) |  |  | 331 |  |  |  | 61 |  |  |  | 235 |  |  |  | (1,871 | )
Equity in net (loss) income of joint ventures |  | $ | (1,191 | ) |  | $ | 3,232 |  |  | $ | 1,763 |  |  | $ | 11,480 |
(A) | Operating expenses for the three- and six-month periods ended June 30, 2012, include transaction costs associated with the formation of the unconsolidated joint venture BRE DDR Retail Holdings, LLC.
(B) | The difference between the Company’s share of net (loss) income, as reported above, and the amounts included in the condensed consolidated statements of operations is attributable to the amortization of basis differentials, deferred gains and differences in gain (loss) on sale of certain assets due to the basis differentials and other than temporary impairment charges. The Company is not recording income or loss from those investments in which its investment basis is zero and the Company does not have the obligation or intent to fund any additional capital.
Investments in and Advances to Joint Ventures include the following items, which represent the difference between the Company’s investment basis and its share of all of the unconsolidated joint ventures’ underlying net assets (in millions):
|  | June 30, 2013 |  |  | December 31, 2012 |
Company’s share of accumulated equity |  | $ | 399.6 |  |  | $ | 432.5 |
Redeemable preferred equity and notes receivable from investments(A) |  |  | 167.5 | (B) |  |  | 155.0 |
Basis differentials |  |  | (3.3 | ) |  |  | (5.9 | )
Deferred development fees, net of portion related to the Company’s interest |  |  | (2.9 | ) |  |  | (2.9 | )
Notes and accrued interest payable to DDR |  |  | 36.3 | (B) |  |  | 34.3 |
Investments in and Advances to Joint Ventures |  | $ | 597.2 |  |  | $ | 613.0 |
(A) | Primarily relates to $167.1 million and $154.6 million preferred equity investment in BRE DDR Retail Holdings, LLC at June 30, 2013 and December 31, 2012, respectively.
(B) | As discussed below, in conjunction with the Company’s pending acquisition of 30 assets, approximately $146 million is expected to be repaid upon closing.
Service fees and income earned by the Company through management, financing, leasing and development activities performed related to all of the Company’s unconsolidated joint ventures are as follows (in millions):
|  | Three-Month Periods Ended June 30, |  |  | Six-Month Periods Ended June 30, |
|  | 2013 |  |  | 2012 |  |  | 2013 |  |  | 2012 |
Management and other fees |  | $ | 7.8 |  |  | $ | 6.5 |  |  | $ | 15.3 |  |  | $ | 13.4 |
Development fees and leasing commissions |  |  | 2.3 |  |  |  | 1.9 |  |  |  | 5.2 |  |  |  | 3.9 |
Interest income |  |  | 4.6 |  |  |  | 0.5 |  |  |  | 9.1 |  |  |  | 0.5 |
BRE DDR Retail Holdings, LLC In May 2013, the Company entered into a purchase agreement with certain affiliates of The Blackstone Group L.P. (collectively, “Blackstone”) pursuant to which the Company will ultimately acquire sole ownership of a portfolio of 30 open-air, value-oriented power centers that are currently owned by BRE DDR Retail Holdings, LLC, the Company’s joint venture with Blackstone (the “BRE JV”). The Company expects to acquire Blackstone’s interest in the properties in a transaction valued at approximately $1.46 billion ($1.54 billion at 100%) (the “Blackstone Acquisition”). The transaction will include a cash payment of $566 million and the assumption of Blackstone’s 95% share of each of approximately $398 million of mortgage debt to be assumed by the Company at closing, approximately $146 million of the Company’s preferred equity interest and mezzanine loan previously funded by the Company to the BRE JV that will no longer be outstanding upon closing, and approximately $406 million of mortgage debt to be repaid at closing. The Blackstone Acquisition is subject to the satisfaction of customary closing conditions and is expected to close in the fourth quarter of 2013. The Company paid a $25 million deposit to Blackstone pursuant to the terms of the purchase agreement, which will reduce the final cash payment required upon closing. The deposit is recorded in Other Assets on the condensed consolidated balance sheet as of June 30, 2013. DDRTC Core Retail Fund LLC In April 2013, the Company purchased its unconsolidated joint venture partner’s 85% ownership interest in five assets. The aggregate purchase price of these assets was $110.5 million. The Company recorded an aggregate Gain on Change in Control of Interests related to the difference between the Company’s carrying value and fair value of the previously held equity interest. At closing, $92.4 million of aggregate mortgage debt was repaid. Upon acquisition, these shopping centers were unencumbered and consolidated into the Company’s results from operations.

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- Definition The entire disclosure for equity method investments and joint ventures. Equity method investments are investments that give the investor the ability to exercise significant influence over the operating and financial policies of an investee. Joint ventures are entities owned and operated by a small group of businesses as a separate and specific business or project for the mutual benefit of the members of the group. + References Reference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 210 -SubTopic 10 -Section S99 -Paragraph 1 -Subparagraph (SX 210.5-02.12) -URI http://asc.fasb.org/extlink&oid=6877327&loc=d3e13212-122682 Reference 2: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 323 -SubTopic 10 -Section 50 -Paragraph 3 -URI http://asc.fasb.org/extlink&oid=6382943&loc=d3e33918-111571 Reference 3: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 323 -SubTopic 10 -Section 35 -Paragraph 35 -URI http://asc.fasb.org/extlink&oid=7658923&loc=d3e32847-111569 Reference 4: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 323 -SubTopic 10 -Section 35 -Paragraph 32 -URI http://asc.fasb.org/extlink&oid=7658923&loc=d3e32787-111569 + Details
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