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Discontinued Operations
 6 Months Ended
Jun. 30, 2011
Discontinued Operations  
Discontinued Operations

NOTE 9. DISCONTINUED OPERATIONS

We apply the provisions of ASC Topic 360, "Property, Plant and Equipment". ASC Topic 360 requires that long-lived assets that are to be disposed of by sale be measured at the lesser of (1) book value or (2) fair value less cost to sell. In addition, it requires that one accounting model be used for long-lived assets to be disposed of by sale and broadens the presentation of discontinued operations to include more disposal transactions.

Discontinued operations relates to properties that were either sold or held for sale as of the period ended June 30, 2011. Included in discontinued operations are a total of five and 20 properties as of 2011 and 2010, respectively. Properties sold in 2011 have been reclassified to discontinued operations for current and prior year reporting periods. In 2011, we sold four commercial properties (Alpenloan, Fenton Centre, Teleport Blvd and Westgrove Air Plaza) and one hotel (University). In 2010, we sold 13 apartment complexes (Baywalk, Chateau, Foxwood, Island Bay, Kingsland Ranch, Limestone Canyon, Limestone Ranch, Longfellow Arms, Marina Landing, Mason Park, Sendero Ridge, Tivoli and Villager), one commercial building (217 Rampart) and transferred our limited partnership interest in a consolidated entity that owned an apartment complex (Quail Oaks). The gain on sale of the properties is also included in discontinued operations for those years. The following table summarizes revenue and expense information for the properties sold and held for sale (dollars in thousands):

 

     For the Three Months Ended      For the Six Months Ended  
     June 30,      June 30,  
     2011      2010      2011      2010  

Revenue

            

Rental

    $ 2,390        $ 5,860        $ 4,963        $ 14,303    

Property operations

      1,793          3,888          3,796          8,123    
  

 

 

     

 

 

     

 

 

     

 

 

  
   $ 597        $ 1,972        $ 1,167        $ 6,180    

Expenses

            

Interest

      (637)         (2,255)         (1,594)         (4,852)   

General and administration

      (146)         (26)         (216)         (41)   

Litigation settlement expense

      -           (1)         -           (1)   

Depreciation

      (439)         (1,197)         (1,113)         (2,507)   
  

 

 

     

 

 

     

 

 

     

 

 

  
   $ (1,222)       $ (3,479)       $ (2,923)       $ (7,401)   
  

 

 

     

 

 

     

 

 

     

 

 

  

Net loss from discontinued operations before gains on sale of real estate, taxes, and fees

      (625)         (1,507)         (1,756)         (1,221)   

Gain on sale of discontinued operations

      7,679          5,660          11,816          5,660    
  

 

 

     

 

 

     

 

 

     

 

 

  

Income from discontinued operations before tax

    $ 7,054        $ 4,153        $ 10,060        $ 4,439    

Tax expense

      (2,469)         (1,454)         (3,521)         (1,554)   
  

 

 

     

 

 

     

 

 

     

 

 

  

Income from discontinued operations

    $ 4,585        $ 2,699        $ 6,539        $ 2,885    
  

 

 

     

 

 

     

 

 

     

 

 

  

Our application of ASC Topic 360 results in the presentation of the net operating results of these qualifying properties sold or held for sale during 2010 as income from discontinued operations. This does not have an impact on net income available to common shareholders and only impacts the presentation of these properties within the Consolidated Statements of Operations.