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DISCONTINUED OPERATIONS
 6 Months Ended
Jun. 30, 2012
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, 2012.  Included in discontinued operations are a total of six and 26 properties as of 2012 and 2011, respectively.  Properties sold in 2012 have been reclassified to discontinued operations for current and prior year reporting periods. In 2012, we sold two apartment complexes (Wildflower Villas and Portofino), two commercial properties (Clarke Garage and 305 Baronne), one hotel (Comfort Inn), and one commercial property held for sale (Dunes Plaza). In 2011, we sold two apartment complexes (Spyglass and Westwood), 12 commercial properties (Addison Hanger I, Addison Hanger II, Alpenloan, Cooley Building, Fenton Center, One Hickory, Parkway North, Signature, Teleport Blvd, Two Hickory, Westgrove Air Plaza, Willowbrook Village), four hotels (Piccadilly Airport, Piccadilly Chateau, Piccadilly Shaw and Piccadilly University), 13 acres of land with a storage warehouse (Eagle Crest), and one trade show and exhibit hall (Denver Merchandise Mart). 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,

 

 

 

2012

 

 

2011

 

 

2012

 

 

2011

 

Revenue

 

 

 

 

 

 

 

 

 

 

 

 

     Rental

 

$

766

 

 

$

10,612

 

 

$

2,861

 

 

$

22,532

 

 

 

$

766

 

 

$

10,612

 

 

$

2,861

 

 

$

22,532

 

Expenses

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

     Property operations

 

 

(533

)

 

 

(7,556

)

 

 

(2,354

)

 

 

(15,755

)

     Other income

 

 

1

 

 

 

-

 

 

 

3

 

 

 

-

 

     Interest

 

 

(113

)

 

 

(2,928

)

 

 

(638

)

 

 

(6,373

)

     General and administrative

 

 

(343

)

 

 

(532

)

 

 

(474

)

 

 

(911

)

     Depreciation

 

 

(102

)

 

 

(1,726

)

 

 

(420

)

 

 

(3,711

)

     Provision on impairment of real estate assets

 

 

-

 

 

 

-

 

 

 

-

 

 

 

(881

)

 

 

$

(1,090

)

 

$

(12,742

)

 

$

(3,883

)

 

$

(27,631

)

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

 

 

(324

)

 

 

(2,130

)

 

 

(1,022

)

 

 

(5,099

)

     Gain on sale of discontinued operations

 

 

4,668

 

 

 

7,679

 

 

 

8,256

 

 

 

11,816

 

     Equity in investee

 

 

47

 

 

 

-

 

 

 

47

 

 

 

-

 

Income from discontinued operations before tax

 

$

4,391

 

 

$

5,549

 

 

$

7,281

 

 

$

6,717

 

     Income tax expense

 

 

(1,537

)

 

 

(1,942

)

 

 

(2,548

)

 

 

(2,351

)

Net income from discontinued operations

 

$

2,854

 

 

$

3,607

 

 

$

4,733

 

 

$

4,366

 

 

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 2012 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.