2.	INVESTMENTS IN AND ADVANCES TO JOINT VENTURES

At March 31, 2014 and December 31, 2013, the Company had ownership interests in various unconsolidated joint ventures that had an investment in 166 and 170 shopping center properties, respectively. Condensed combined financial information of the Company’s unconsolidated joint venture investments is as follows (in thousands):

	March 31, 2014			December 31, 2013
Condensed Combined Balance Sheets
Land	$	1,269,063		$	1,275,232
Buildings		3,984,505			3,940,806
Fixtures and tenant improvements		277,942			266,851
		5,531,510			5,482,889
Less: Accumulated depreciation		(872,565	)		(839,867	)
		4,658,945			4,643,022
Land held for development and construction in progress		79,550			116,088
Real estate, net		4,738,495			4,759,110
Cash and restricted cash^(A)		276,806			282,866
Receivables, net		102,830			101,003
Other assets		199,100			196,615
	$	5,317,231		$	5,339,594
Mortgage debt	$	3,259,136		$	3,282,643
Notes and accrued interest payable to DDR^(B)		133,534			127,679
Other liabilities		243,930			245,368
		3,636,600			3,655,690
Redeemable preferred equity		72,096			71,771
Accumulated equity		1,608,535			1,612,133
	$	5,317,231		$	5,339,594
Company’s share of Accumulated Equity	$	365,446		$	365,297

(A)	Includes $180.3 million and $191.9 million at March 31, 2014 and December 31, 2013, respectively, from Sonae Sierra Brazil BV SARL (“SSB”). See further discussion of this investment below.

(B)

The Company has amounts receivable from several joint ventures aggregating $4.4 million and $2.7 million at March 31, 2014 and December 31, 2013, respectively, which are included in Investments in and Advances to Joint Ventures on the condensed consolidated balance sheets. The remaining receivables were fully reserved by the Company in prior years.

	Three-Month Periods Ended March 31,
	2014			2013
Condensed Combined Statements of Operations
Revenues from operations	$	149,066		$	177,455
Operating expenses		56,554			60,806
Depreciation and amortization		45,716			62,218
Interest expense		54,149			57,885
		156,419			180,909
Loss before tax expense and discontinued operations		(7,353	)		(3,454	)
Income tax expense (primarily SSB), net		(4,140	)		(6,615	)
Loss from continuing operations		(11,493	)		(10,069	)
Discontinued operations:
Loss from discontinued operations		(758	)		(2,180	)
Gain (loss) on disposition of real estate, net of tax		21,473			(5,537	)
Income (loss) before gain on disposition of real estate, net		9,222			(17,786	)
Gain on disposition of real estate, net		—			479
Net income (loss)	$	9,222		$	(17,307	)
Non-controlling interests		(1,488	)		(7,219	)
Net income (loss) attributable to unconsolidated joint ventures	$	7,734		$	(24,526	)
Company’s share of equity in net income of joint ventures	$	4,731		$	3,049
Amortization of basis differentials^(A)		759			(95	)
Equity in net income of joint ventures^(B)	$	5,490		$	2,954

(A)

The difference between the Company’s share of net loss, 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.

(B)	The Company is not recording income or loss from those investments in which its investment basis is zero, as the Company does not have the obligation or intent to fund any additional capital in the joint ventures.

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):

	March 31, 2014			December 31, 2013
Company’s share of accumulated equity	$	365.4		$	365.3
Redeemable preferred equity and other^(A)		72.5			72.2
Basis differentials		1.9			10.6
Deferred development fees, net of portion related to the Company’s interest		(2.9	)		(2.8	)
Amounts payable to DDR		4.4			2.7
Investments in and Advances to Joint Ventures	$	441.3		$	448.0

(A)	Primarily relates to $72.1 million and $71.8 million in preferred equity investments in joint ventures with affiliates of The Blackstone Group L.P. at March 31, 2014 and December 31, 2013, respectively.

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 March 31,
	2014		2013
Management and other fees	$	6.1	$	7.4
Development fees and leasing commissions		2.0		2.9
Interest income		1.7		4.5

Sonae Sierra Brazil BV SARL

At March 31, 2014, the Company had a 50% interest in SSB, which owned an approximate 66% interest in a publicly traded company in Brazil, Sonae Sierra Brasil, S.A., and an indirect interest in the Parque Dom Pedro shopping center. Sonae Sierra Brasil, S.A. owns 10 shopping centers in Brazil and is headquartered in Sao Paulo. The Company’s effective economic ownership in this investment was 33%. The weighted-average exchange rate used for recording the equity in net income into U.S. dollars was 2.36 and 2.01 for the three-month periods ended March 31, 2014 and 2013, respectively.

On April 28, 2014, affiliates of DDR (the “Sellers”) entered into a Share Purchase Agreement (the “Agreement”) with Mr. Alexander Otto (the “Investor”) and certain of his affiliates (collectively with the Investor, the “Purchasers”). Pursuant to the Agreement, the Sellers sold their 50% ownership interest in SSB to the Purchasers for approximately $343.6 million, which represented the Company’s entire investment in Brazil. The Company anticipates recording a gain on sale in the second quarter of 2014 which will include the reclassification of foreign currency translation from accumulated other comprehensive income into gain on sale of interests.

The Investor is deemed to be a related party as a result of his common stock ownership in DDR. The Company believes that the sales price and other terms of the transaction were negotiated on terms equivalent to those prevailing in an arms’ length transaction. The transaction was approved by a special committee of the Company’s Board of Directors, which committee included all directors except for the two board members recommended for nomination to the board by the Investor.

Other Joint Venture Interests

In the first quarter of 2014, three of the Company’s unconsolidated joint ventures sold four assets. The joint ventures received aggregate proceeds of $67.7 million, of which $14.0 million was the Company’s proportionate share. The joint ventures recorded an aggregate gain of $21.5 million, of which $5.4 million was the Company’s proportionate share.