Note 6 – Property and Equipment

Acquisitions

Coachella, California Land Acquisition

On January 10, 2012, Shadow View Land and Farming, LLC, a limited liability company owned by our Company, acquired a 202-acre property, zoned for the development of up to 843 single-family residential units, located in the City of Coachella, California. The property was acquired at a foreclosure auction for $5.5 million which currently has a net carrying value of $4.0 million. The property was acquired as a long-term investment in developable land. Half of the funds used to acquire the land were provided by Mr. James J. Cotter, our Chairman, Chief Executive Officer and controlling shareholder. Upon the approval of our Conflicts Committee, these funds were converted on January 18, 2012 into a 50% interest in Shadow View Land and Farming, LLC. We are the managing member of this company.

Disposals

Indooroopilly Sale

On November 20, 2012, we sold our Indooroopilly property for $12.4 million (AUS$12.0 million). This property’s operational results are included in income (loss) from discontinued operations on our Condensed Consolidated Statements of Operations for the three and six months ended June 30, 2012. The condensed statement of operations for Indooroopilly is as follows (dollars in thousands):



		Three Months Ended June 30,				Six Months Ended June 30,
		2013		2012		2013		2012
Revenue	$	--	$	196	$	--	$	418
Less: operating expense		--		152		--		298
Income (loss) from discontinued operations, net of tax	$	--	$	44	$	--	$	120

Taringa Sale

On February 21, 2012, we sold our three properties in the Taringa area of Brisbane, Australia consisting of approximately 1.1 acres for $1.9 million (AUS$1.8 million).

Property Held for Sale – Moonee Ponds

In May 2013, we announced our intent to sell and began actively marketing our 3.3-acre Moonee Pond property in Australia. The current carrying value of this property on our books is $11.3 million (AUS$12.4 million) which has been reclassified from property held for development to land held for sale on our June 30, 2013 condensed consolidated balance sheet.

Operating Property

As of June 30, 2013 and December 31, 2012, property associated with our operating activities is summarized as follows (dollars in thousands):



Operating property		June 30, 2013		December 31, 2012
Land	$	65,582	$	69,370
Building and improvements		124,507		136,225
Leasehold interests		43,762		45,391
Fixtures and equipment		101,806		108,169
Total cost		335,657		359,155
Less: accumulated depreciation		(151,110)		(156,377)
Operating property, net	$	184,547	$	202,778

Depreciation expense for property and equipment was $3.5 million and $7.1 million for the three and six months ended June 30, 2013, respectively, and $4.0 million and $7.5 million for the three and six months ended June 30, 2012, respectively.

Investment and Development Property

As of June 30, 2013 and December 31, 2012, our investment and development property is summarized as follows (dollars in thousands):



Investment and Development Property		June 30, 2013		December 31, 2012
Land	$	59,869	$	77,020
Construction-in-progress (including capitalized interest)		14,250		17,902
Investment and development property	$	74,119	$	94,922

At the beginning of 2010, we curtailed the development activities of our properties under development and are not currently capitalizing interest expense. As a result, we did not capitalize any interest during the three and six months ended June 30, 2013 or 2012.