2.	INVESTMENTS IN AND ADVANCES TO JOINT VENTURES

At September 30, 2014 and December 31, 2013, the Company had ownership interests in various unconsolidated joint ventures that had an investment in 147 and 170 shopping center properties, respectively. Condensed combined financial information of the Company’s unconsolidated joint venture investments is as follows (in thousands):

	September 30, 2014			December 31, 2013
Condensed Combined Balance Sheets
Land	$	1,080,086		$	1,275,232
Buildings		2,917,565			3,940,806
Fixtures and tenant improvements		168,575			266,851
		4,166,226			5,482,889
Less: Accumulated depreciation		(814,365	)		(839,867	)
		3,351,861			4,643,022
Land held for development and construction in progress		56,713			116,088
Real estate, net		3,408,574			4,759,110
Cash and restricted cash		95,768			282,866
Receivables, net		68,951			101,003
Other assets		97,959			196,615
	$	3,671,252		$	5,339,594

Mortgage debt	$	2,572,521		$	3,282,643
Notes and accrued interest payable to DDR^(A)		142,502			127,679
Other liabilities		142,521			245,368
		2,857,544			3,655,690
Redeemable preferred equity		38,635			71,771
Accumulated equity		775,073			1,612,133
	$	3,671,252		$	5,339,594
Company's share of Accumulated Equity	$	116,711		$	365,297

(A)

The Company had net amounts receivable from several joint ventures aggregating $4.4 million and $2.7 million at September 30, 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 on the joint ventures’ books were fully reserved by the Company in prior years.

	Three-Month Periods Ended September 30,						Nine-Month Periods Ended September 30,
	2014			2013			2014			2013
Condensed Combined Statements of Operations
Revenues from operations	$	119,973		$	176,001		$	392,523		$	527,799
Operating expenses		40,024			61,099			137,787			182,130
Impairment charges		11,093			13,390			11,693			51,713
Depreciation and amortization		35,579			56,502			119,641			173,333
Interest expense		41,764			56,453			141,776			169,935
Other expense, net		188			1,916			3,024			2,229
		128,648			189,360			413,921			579,340
Loss before tax expense and discontinued operations		(8,675	)		(13,359	)		(21,398	)		(51,541	)
Income tax expense (primarily SSB), net		—			(6,446	)		(6,565	)		(20,299	)
Loss from continuing operations		(8,675	)		(19,805	)		(27,963	)		(71,840	)
Discontinued operations:
Loss from discontinued operations		(55	)		(11,196	)		(844	)		(22,604	)
Gain (loss) on disposition of real estate, net of tax		4,713			(21,228	)		28,224			(27,133	)
Loss before gain on disposition of real estate, net		(4,017	)		(52,229	)		(583	)		(121,577	)
Gain on disposition of real estate, net		3,833			151			3,833			794
Net (loss) income	$	(184	)	$	(52,078	)	$	3,250		$	(120,783	)
Non-controlling interests		—			(5,800	)		(2,023	)		(19,715	)
Net (loss) income attributable to unconsolidated joint ventures	$	(184	)	$	(57,878	)	$	1,227		$	(140,498	)
Company's share of equity in net income of joint ventures	$	3,316		$	2,800		$	9,483		$	4,328
Amortization of basis differentials^(A)		304			980			758			1,215
Equity in net income of joint ventures^(B)	$	3,620		$	3,780		$	10,241		$	5,543

(A)	Related to the amortization of basis differentials, the recognition of deferred gains and differences in gain (loss) on sale of certain assets recognized 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):

	September 30, 2014			December 31, 2013
Company's share of accumulated equity	$	116.7		$	365.3
Redeemable preferred equity and other^(A)		39.1			72.2
Basis differentials		4.2			10.6
Deferred development fees, net of portion related to the Company's interest		(2.7	)		(2.8	)
Amounts payable to DDR		4.4			2.7
Investments in and Advances to Joint Ventures	$	161.7		$	448.0

(A)	Primarily related to $38.6 million and $71.8 million in preferred equity investments in joint ventures with affiliates of The Blackstone Group L.P. (collectively, “Blackstone”) at September 30, 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 September 30,				Nine-Month Periods Ended September 30,
	2014		2013		2014		2013
Management and other fees	$	5.9	$	7.4	$	18.2	$	22.6
Development fees and leasing commissions		1.4		2.7		4.9		7.9
Interest income		1.7		5.3		5.0		14.4

BRE DDR Retail Holdings II Joint Venture

In 2013, a joint venture between consolidated affiliates of the Company and Blackstone acquired a portfolio of seven shopping centers (“BRE DDR Retail Holdings II”), aggregating approximately 2.3 million square feet of total gross leasable area (“GLA”). In September 2014, the Company acquired Blackstone’s 95% interest in the seven assets (the “Blackstone II Acquisition”) (Note 3). The Company invested $30.0 million in preferred equity in the joint venture in 2013, all of which was repaid upon the closing of the Blackstone II Acquisition.

Sonae Sierra Brazil BV SARL (“SSB”)

On April 28, 2014, affiliates of DDR (the “Sellers”) sold to Mr. Alexander Otto (the “Investor”) and certain of his affiliates (collectively with the Investor, the “Purchasers”) the Company’s 50% ownership interest in SSB for approximately $343.6 million, which represented the Company’s entire investment in Brazil. SSB 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. owned 10 shopping centers in Brazil and is headquartered in Sao Paulo. The Company’s effective economic ownership in this investment was 33%. The Company recorded a Gain on Sale of Interests of $83.8 million in the second quarter of 2014, which included the reclassification of $19.7 million of foreign currency translation from accumulated other comprehensive income (Note 10). The weighted-average exchange rate used for recording the equity in net income into U.S. dollars was 2.26 for the Company’s ownership period, January 1, 2014 to April 28, 2014, and 2.10 for the nine-month period ended September 30, 2013.

The Investor is deemed to be a related party as a result of his common stock ownership in DDR. Furthermore, Dr. Finne, a director of DDR, is a Managing Director of certain entities affiliated with the Investor that agreed to purchase a portion of the Company’s ownership interest in SSB. 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 by the Investor.

Other Joint Venture Interests

For the nine months ended September 30, 2014, the Company’s unconsolidated joint ventures sold eight assets and received aggregate proceeds of $106.1 million, of which $21.1 million was the Company’s proportionate share. For the 2014 disposition activity, the joint ventures recorded an aggregate gain of $32.1 million, of which $7.7 million was the Company’s proportionate share.