Note 4 –Discontinued Operations

The results of operations for properties classified as discontinued operations prior to the newly-adopted guidance for reporting discontinued operations (see Note 2 - Summary of Significant Accounting Policies) have been classified as “discontinued operations” for all years presented. The following is a summary of the components of income from discontinued operations applicable to properties classified as such prior to the newly-adopted guidance for reporting discontinued operations:


	Years ended December 31,
	2014	2013	2012
REVENUES
Rents	$ 2,698,000	$ 9,963,000	$ 20,608,000
Expense recoveries and other	918,000	2,754,000	5,261,000
Total revenues	3,616,000	12,717,000	25,869,000
EXPENSES
Operating, maintenance and management	783,000	3,655,000	7,475,000
Real estate and other property-related taxes	555,000	2,632,000	4,184,000
Depreciation and amortization	-	1,258,000	1,385,000
Interest	631,000	2,455,000	7,299,000
Early extinguishment of debt costs	-	437,000	-
Total expenses	1,969,000	10,437,000	20,343,000

INCOME FROM OPERATIONS	1,647,000	2,280,000	5,526,000

IMPAIRMENT REVERSALS/(CHARGES), NET	47,000	(3,049,000)	(284,000)

GAIN ON EXTINGUISHMENT OF DEBT OBLIGATIONS	1,423,000	10,452,000	-

GAIN ON SALES	7,963,000	-	4,679,000

TOTAL INCOME FROM DISCONTINUED OPERATIONS	$ 11,080,000	$ 9,683,000	$ 9,921,000

2014 Transactions

During 2014, the Company sold or conveyed the following properties classified as discontinued operations:


		Date	Sales		Gain on
Property	Location	Sold	Price		Sale
Harbor Square (f/k/a Shore Mall)	Egg Harbor, NJ	2/25/2014	$ 25,000,000		$ -
McCormick Place	Olmstead, OH	5/6/2014	2,679,000	(a)	-
Gahanna Discount Drug Mart Plaza	Columbus, OH	5/27/2014	4,982,000	(a)	-
Townfair Center	Indiana, PA	5/29/2014	22,600,000		1,472,000
Lake Raystown Plaza	Huntingdon, PA	6/25/2014	19,500,000		6,491,000
			$ 74,761,000		$ 7,963,000

(a) Lender accepted a deed-in-lieu of foreclosure on the property. Sales price represents mortgage loan payable, accrued interest and other expenses forgiven upon title transfer.

On May 6, 2014, the McCormick Place lender accepted and recorded the deed to the property, thus completing the deed-in-lieu of foreclosure process in full satisfaction of the mortgage loan payable and related accrued interest aggregating $2.7 million. Based on the $1.8 million carrying value of the property, the Company recorded a $0.8 million gain on the extinguishment of a debt obligation in the second quarter of 2014, which is included in discontinued operations in the accompanying consolidated statement of operations.

On May 27, 2014, the Gahanna Discount Drug Mart Plaza lender accepted and recorded the deed to the property, thus completing the deed-in-lieu of foreclosure process in full satisfaction of the mortgage loan payable and related accrued interest aggregating $5.0 million. Based on the $4.3 million carrying value of the property, the Company recorded a $0.6 million gain on the extinguishment of a debt obligation in the second quarter of 2014, which is included in discontinued operations in the accompanying consolidated statement of operations.

2013 Transactions

During 2013, the Company sold or conveyed the following properties classified as discontinued operations:


		Date	Sales		Gain on
Property	Location	Sold	Price		Sale
East Chestnut	Lancaster, PA	1/2/2013	$ 3,100,000		$ -
Columbia Mall	Bloomsburg, PA	4/17/2013	2,775,000		-
Heritage Crossing	Limerick, PA	5/9/2013	9,400,000		-
Westlake Discount Drug Mart Plaza	Westlake, OH	6/5/2013	2,240,000		-
Dunmore Shopping Center	Dunmore, PA	11/8/2013	4,000,000		-
Roosevelt II	Philadelphia, PA	11/14/2013	13,878,000	(a)	-
Oakhurst Plaza	Harrisburg, PA	12/11/2013	11,000,000		-
			$ 46,393,000		$ -

(a) Lender accepted a deed-in-lieu of foreclosure on the property. Sales price represents mortgage loan payable, accrued interest and other expenses forgiven upon title transfer.

On June 5, 2013, the Company sold, through a short sale, Westlake Discount Drug Mart Plaza for net proceeds of $2.1 million. As of that date, the balance of the mortgage loan payable secured by the sold property, including accrued interest and real estate taxes, totaled $3.4 million. The lender accepted the net proceeds of $2.1 million in full satisfaction of the mortgage loan payable and related accrued interest. As a result, the Company recorded a $1.3 million gain on the extinguishment of a debt obligation during the second quarter of 2013, which is included in discontinuing operations in the accompanying consolidated statements of operations.

On November 14, 2013, the Roosevelt II lender accepted and recorded the deed to the property, thus completing the deed-in-lieu of foreclosure process in full satisfaction of the mortgage loan payable and related accrued interest aggregating $13.9 million. Based on the $4.7 million carrying value of the property, the Company recorded a $9.2 million gain on the extinguishment of a debt obligation of in the fourth quarter of 2013, which is included in discontinued operations in the accompanying consolidated statements of operations.

2012 Transactions

During 2012, the Company sold the following properties classified as discontinued operations:


		Date	Sales	Gain on
Property	Location	Sold	Price	Sale
Hilliard Discount Drug Mart Plaza	Hilliard, OH	2/7/2012	$ 1,434,000	$ -
First Merit Bank at Akron	Akron, OH	2/23/2012	633,000	-
Grove City Discount Drug Mart Plaza	Grove City, OH	3/12/2012	1,925,000	-
CVS at Naugatuck	Naugatuck, CT	3/20/2012	3,350,000	457,000
CVS at Bradford	Bradford, PA	3/30/2012	967,000	-
CVS at Celina	Celina, OH	3/30/2012	1,449,000	-
CVS at Erie	Erie, PA	3/30/2012	1,278,000	-
CVS at Portage Trail	Akron, OH	3/30/2012	1,061,000	-
Rite Aid at Massillon	Massillon, OH	3/30/2012	1,492,000	-
Kingston Plaza	Kingston, NY	4/12/2012	1,182,000	293,000
Stadium Plaza	East Lansing, MI	5/3/2012	5,400,000	-
Homburg Joint Venture (seven properties)	Various	10/12/2012	23,642,000	3,929,000
The Point at Carlisle	Carlisle, PA	10/15/2012	7,350,000	-
			$ 51,163,000	$ 4,679,000

On October 12, 2012, the Company concluded definitive agreements with Homburg Invest Inc. (“Homburg”) relating to the application of the buy/sell provisions of the joint venture agreements for each of the nine properties owned by the joint venture. In February 2011, Homburg had exercised its buy/sell option pursuant to the terms of the joint venture agreements for each of the nine properties owned by the venture. The Company made elections to purchase Homburg’s 80% interest in two of the nine properties, Meadows Marketplace, located in Hershey, Pennsylvania, and Fieldstone Marketplace, located in New Bedford, Massachusetts. The Company also determined not to meet Homburg’s buy/sell offers for each of the remaining seven properties, which were thereupon treated as “held for sale/conveyance”. Pursuant to the agreements, the Company acquired Homburg’s 80% ownership in Meadows Marketplace, located in Hershey, Pennsylvania, and Fieldstone Marketplace, located in New Bedford, Massachusetts, for approximately $27.3 million, including the assumption of related in-place mortgage financing of $21.8 million, giving the Company a 100% ownership interest in these two properties. As the two properties were previously controlled and consolidated by the Company, the acquisitions of the 80% noncontrolling interests were recorded as a capital transaction. As such, the excess ($7.6 million) of the carrying amount of the noncontrolling interests over amounts paid by the Company was recognized as an increase in the Company’s shareholders’ equity and a corresponding decrease in noncontrolling interests. In addition, the Company sold to Homburg its 20% ownership interest in the remaining seven joint venture properties for approximately $23.6 million, including the assumption of related in-place mortgage financing of $14.5 million. In connection with the transactions, the Company has recorded a gain of $3.9 million relating to the sale of the seven properties. The Company’s property management agreements for the sold properties terminated upon the closing of the sale.