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Discontinued Operations
9 Months Ended
Sep. 30, 2011
Discontinued Operations [Abstract] 
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 September 30, 2011. Included in discontinued operations are a total of 16 and 31 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 nine commercial properties (Alpenloan, Cooley, Fenton Centre, One Hickory Centre, Parkway North, Signature Athletic, Teleport Blvd, Two Hickory Centre and Westgrove Air Plaza), two apartment complexes (Spyglass and Westwood), four hotels (Airport, Chateau, Shaw and University), and 13 acres of land with a storage warehouse (Eagle Crest). 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
September 30,		     For the Nine Months Ended
September 30,		  
     2011     2010     2011     2010  

Revenue

         

Rental

    $ 1,181      $ 8,600      $ 12,810      $ 31,179   

Property operations

      692        6,486        9,391        20,510   
  

 

 

    

 

 

    

 

 

    

 

 

  
   $ 489      $ 2,114      $ 3,419      $ 10,669   

Expenses

         

Other income

      -          50         -          50    

Interest

      (203 )      (3,960 )      (4,232 )      (11,584 ) 

General and administration

      (239 )      (62 )      (781 )      (116 ) 

Litigation settlement expense

      -         (3 )      -         (4 ) 

Depreciation

      (111 )      (1,619 )      (2,356 )      (5,263 ) 

Provision on impairment of real estate assets

      -          -          (881 )      -     
  

 

 

    

 

 

    

 

 

    

 

 

  
   $ (553 )    $ (5,594 )    $ (8,250 )    $ (16,917 ) 
  

 

 

    

 

 

    

 

 

    

 

 

  

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

      (64 )      (3,480 )      (4,831 )      (6,248 ) 

Gain on sale of discontinued operations

      8,256        6,619        20,073         12,279    
  

 

 

    

 

 

    

 

 

    

 

 

  

Income from discontinued operations before tax

    $ 8,192      $ 3,139       $ 15,242       $ 6,031   

Tax benefit

      2,867        1,099         5,335         2,111    
  

 

 

    

 

 

    

 

 

    

 

 

  

Income from discontinued operations

    $ 11,059       $ 4,238      $ 20,577      $ 8,142    
  

 

 

    

 

 

    

 

 

    

 

 

  

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 2011 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.