Business Combinations

6 Months Ended

Jun. 30, 2012

Business Combinations [Abstract]

Business Combinations

Business Combinations

Effective April 13, 2011, we acquired our partner’s 50% interest in an unconsolidated joint venture related to a development property in Florida, which resulted in the consolidation of this property. 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, 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%, a terminal capitalization rate for similar properties, 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 and Comprehensive Income beginning April 13, 2011.

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

	April 13, 2011
Fair value of our equity interest before business combinations	$	7,578
Fair value of consideration transferred (1)	$	11,462
Amounts recognized for assets and liabilities assumed:
Assets:
Property	$	32,807
Unamortized debt and lease costs	2,421
Accrued rent and accounts receivable	211
Cash and cash equivalents	1,402
Other, net	694
Liabilities:
Accounts payable and accrued expenses	(137		)
Other, net	(318		)
Total net assets	$	37,080
Noncontrolling interests of the real estate joint venture	$	—

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(1) Consideration included $.5 million of cash and $11.0 million in debt reimbursement.

As a result of the above business combination, we recognized a gain of $4.6 million which is attributable to the realization upon consolidation of our preferred return on equity. For the three and six months ended June 30, 2011, this gain is included in discontinued operations in the Condensed Consolidated Statements of Operations and Comprehensive Income as the property was sold during December 2011.

During 2012, we have acquired two shopping centers located in California and Texas. The following table summarizes the transactions related to these acquisitions, including the assets acquired and liabilities assumed as indicated (in thousands):

	June 30, 2012
Fair value of consideration transferred	$	104,460
Amounts recognized for assets and liabilities assumed:
Assets:
Property	$	97,703
Unamortized debt and lease costs	7,910
Other, net	531
Liabilities:
Accounts payable and accrued expenses	(1,812		)
Other, net	(1,824		)
Total net assets	$	102,508
Acquisition costs (included in operating expenses)	$	398

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

	Three Months Ended June 30, 2012		Six Months Ended June 30, 2012
Increase in revenues	$	209	$	242
Increase in net income attributable to common shareholders	133		148

The following table summarizes the pro forma impact of these transactions as if they had been consolidated or acquired on January 1, 2011, the earliest year presented, as follows (in thousands, except per share amounts):

	Three Months Ended June 30,					Six Months Ended June 30,
	Pro Forma 2012(1)		Pro Forma 2011(1)			Pro Forma 2012(1)		Pro Forma 2011(1)
Revenues	$	127,489	$	125,405		$	250,967	$	245,549
Net income	33,871		3,713			57,720		21,720
Net income (loss) attributable to common shareholders	23,660		(6,392		)	37,199		1,654
Earnings per share – basic	0.20		(0.05		)	0.31		0.01
Earnings per share – diluted	0.19		(0.05		)	0.31		0.01

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