Assets Held for Sale and Real Estate Sales

6 Months Ended

Jun. 30, 2011

Assets Held for Sale and Real Estate Sales

Assets Held for Sale and Real Estate Sales

5.     Assets Held for Sale and Real Estate Sales

At December 31, 2010, assets held for sale included a portion of the Company’s former agriculture facilities in Kahului totaling approximately 13 acres; and equipment formerly used in the Company’s golf operations that met the criteria of held for sale. In June 2011, the Company sold the 13-acre parcel for $9.75 million.  The sale resulted in net cash proceeds of $8.2 million and a loss of $871,000 that is recorded in discontinued operations.  Included in the purchase price is $900,000 that remains in escrow pending finalization of post-closing obligations.  The Company recorded $700,000 of the cash held in escrow, less related expenses, as deferred revenue on the Company’s balance sheet at June 30, 2011.  In accordance with the terms of its credit agreements, the Company repaid $579,000 of its term loan with American AgCredit with proceeds from the sale and withheld approximately $4.1 million in escrow for payment and settlement of certain legacy costs (as defined). The $4.1 million held in escrow has been recorded as restricted cash on the Company’s June 30, 2011 condensed consolidated Balance Sheet.

In September 2010, the Company sold the land, improvements, structures and fixtures comprising the Bay Course and the adjacent maintenance facility for a total of $24.1 million in cash.  Concurrent with the sale the Company entered into an agreement to lease back the assets through March 31, 2011, and due to certain construction work required by the leaseback arrangement and other continuing involvement, the sale was accounted for as a financing transaction. Accordingly, the net proceeds received had been reflected as a current liability and no gain was recognized at the time of the sale. At the conclusion of the leaseback of the Bay Course as of March 31, 2011, the Company recognized $15.1 million of gain from the sale of the Bay Course and maintenance facility, which is included in discontinued operations. In 2009, the Company sold the Plantation Golf Course (PGC) land, improvements and other assets and entered into a leaseback arrangement that also expired on March 31, 2011.  A gain on the sale of the PGC of $27.7 million was recognized primarily in September 2010.