3. Acquisitions

In 2013 and 2012, the Company acquired the following shopping centers (dollars in millions):

Location

Date Acquired

Gross
Purchase
Price

Face Value of
Mortgage
Debt
Assumed

Blackstone Acquisition

October 2013

^(A)

1,548.4

792.9

^(B

⁾

Orlando, FL and Atlanta, GA

July 2013

258.5

139.4

Parcels adjacent to existing shopping centers

June 2013

11.7

N/A

Tampa, FL; Atlanta, GA; Newport News, VA and Richmond, VA (2 assets)

April 2013

^(A)

110.5

N/A

Dallas, TX

March 2013

40.3

N/A

Oakland, CA

February 2013

41.1

N/A

Raleigh, NC

December 2012

44.8

N/A

Charlotte, NC

December 2012

106.4

N/A

Independence, MO

September 2012

^(A)

57.8

33.6

^(C

⁾

St. Louis, MO

September 2012

^(A)

6.5

3.4

^(C

⁾

Tucson, AZ

August 2012

125.4

24.4

Phoenix, AZ

July 2012

^(A)

137.3

105.4

^(C

⁾

Phoenix, AZ

April 2012

^(A)

59.9

47.2

^(C

⁾

Portland, OR

April 2012

^(A)

77.9

56.6

^(C

⁾

Chicago, IL

March 2012

47.4

N/A

(A)

Acquired from various unconsolidated joint ventures in separate transactions. Due to the change in control that occurred, the Company recorded an aggregate Gain on Change in Control of $19.9 million and $80.0 million for the years ended December 31, 2013 and 2012, respectively, associated with these acquisitions related to the difference between the Company’s carrying value and fair value of its previously held equity interest on the respective acquisition date.

(B)	Blackstone mortgage of $395.0 million repaid prior to December 31, 2013.

(C)	Mortgages repaid in full at closing.

The fair value of acquisitions was allocated as follows (in thousands):


							Weighted-Average Amortization Period (in Years)
	2013			2012			2013			2012
Land	$	402,289		$	118,360			N/A			N/A
Buildings		1,338,851			461,794			(B	)		(B	)
Tenant improvements		35,334			14,479			(B	)		(B	)
In-place leases (including lease origination costs and fair market value of leases)^(A)		186,370			51,059			5.2			6.2
Tenant relations		156,990			45,100			5.6			9.3
Other assets		19,536			10,407			N/A			N/A

		2,139,370			701,199
Less: Mortgage debt assumed		(969,734	)		(25,414	)		N/A			N/A
Less: Below-market leases		(79,499	)		(26,162	)		15.9			18.4
Less: Other liabilities assumed		(26,456	)		(4,118	)		N/A			N/A

Net assets acquired	$	1,063,681		$	645,505

(A)	Includes above-market value leases of $29.2 million and $11.8 million at December 31, 2013 and 2012, respectively.

(B)	Depreciated in accordance with the Company’s policy (Note 1).


	2013		2012
Consideration:
Cash (including debt repaid at closing)	$	857,219	$	602,297
Repayment of the preferred equity interest and mezzanine loan		160,123		—
Fair value of previously held equity interests^(A)		46,339		43,208

Total consideration	$	1,063,681	$	645,505

(A)

The significant inputs used to value the previously held equity interests were determined to be Level 3 for all of the applicable acquisitions. The discount rates applied to cash flows ranged from approximately 6.5% to 10.5%. The residual capitalization rates applied ranged from approximately 5.75% to 9.75%.

In 2013, the Company incurred $3.3 million of costs related to the acquisition of these assets (not material in 2012). These costs were expensed as incurred and included in other income (expense), net.

Blackstone Acquisition

In 2013, the Company acquired sole ownership of a portfolio of 30 power centers through the Blackstone Acquisition. The transaction was valued at $1.55 billion at 100%. The transaction included a cash payment of $565.6 million to Blackstone. Furthermore, in connection with the closing of the Blackstone Acquisition, the Company assumed Blackstone’s 95% share of $792.9 million of mortgage debt, at face value, of which $139.0 million was repaid upon closing. The Company further repaid an additional $256.0 million of mortgage debt. In addition, $160.1 million of the preferred equity interest and mezzanine loan previously funded by the Company was repaid upon closing. The Company accounted for this transaction as a step acquisition. Due to the change in control that occurred, the Company recorded a Gain on Change in Control of $18.8 million related to the difference between the Company’s carrying value and fair value of the previously held equity interest. The Company funded the cash portion of the consideration, and the repayment of certain of the debt assumed, with a portion of the net proceeds of its issuance and sale of 3.375% senior unsecured notes due 2023 and 3.50% senior unsecured notes due 2021 and its issuance and sale of 39.1 million of its common shares in a forward equity offering (Note 10).

Pro Forma Information

The following unaudited supplemental pro forma operating data is presented for the year ended December 31, 2013, as if the acquisition of the interests in the properties acquired in 2013 were completed on January 1, 2012. The following unaudited supplemental pro forma operating data is presented for the years ended December 31, 2012 and 2011, as if the acquisition of the interests in the properties acquired in 2012 were completed on January 1, 2011 and as if the acquisition of the interests in the properties acquired in 2011 were completed on January 1, 2010. The Gain on Change in Control related to the acquisitions from unconsolidated joint ventures was adjusted to the assumed acquisition date. Included in the Company’s consolidated statement of operations are $62.6 million, $25.8 million and $10.3 million in total revenues from the date of acquisition through December 31, 2013, 2012 and 2011, respectively. The unaudited supplemental pro forma operating data is not necessarily indicative of what the actual results of operations of the Company would have been assuming the transactions had been completed as set forth above, nor do they purport to represent the Company’s results of operations for future periods.


	For the Years Ended December 31, (In thousands, except per share amounts) (Unaudited)
	2013			2012			2011
Pro forma revenues	$	1,007,463		$	964,018		$	786,688

Pro forma (loss) income from continuing operations	$	(83,724	)	$	(133,662	)	$	50,744

Pro forma loss from discontinued operations	$	(11,735	)	$	(52,758	)	$	(20,873	)

Pro forma net (loss) income attributable to DDR common shareholders	$	(128,753	)	$	(215,499	)	$	2,504

Per share data:
Basic earnings per share data:
(Loss) income from continuing operations attributable to DDR common shareholders	$	(0.33	)	$	(0.47	)	$	0.08
Loss from discontinued operations attributable to DDR common shareholders		(0.03	)		(0.15	)		(0.07	)

Net (loss) income attributable to DDR common shareholders	$	(0.36	)	$	(0.62	)	$	0.01

Diluted earnings per share data:
(Loss) income from continuing operations attributable to DDR common shareholders	$	(0.33	)	$	(0.47	)	$	0.00
Loss from discontinued operations attributable to DDR common shareholders		(0.03	)		(0.15	)		(0.07	)

Net loss attributable to DDR common shareholders	$	(0.36	)	$	(0.62	)	$	(0.07	)