DISCONTINUED OPERATIONS

3 Months Ended

Mar. 31, 2013

DISCONTINUED OPERATIONS

DISCONTINUED OPERATIONS

NOTE 8. 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 March 31, 2013. Included in discontinued operations are a total of three and eight properties for 2013 and 2012, respectively. Properties sold in 2013 have been reclassified to discontinued operations for current and prior year reporting periods.  In 2013, we sold one apartment complex (Verandas at City View), have one apartment complex held for sale (Laguna Vista) and one commercial property held for sale (225 Baronne).  In 2012, we sold two apartment complexes (Portofino and Wildflower Villas) and three commercial properties (305 Baronne, Clarke Garage and Dunes Plaza).  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 March 31,
	2013			2012
Revenue
Rental	$	1,178		$	2,978
Property operations		526			1,912
		652			1,066
Expenses
Other income		-			2
Interest expense		(219	)		(1,758	)
General and administration		(208	)		(143	)
Depreciation and amortization		(145	)		(580	)
Provision on impairment of real estate assets		-			-
	$	(572	)	$	(2,479	)
Income (loss) from discontinued operations before gains on sale of real estate, taxes, and fees		80			(1,413	)
Gain on sale of discontinued operations		6,190			3,588
Income from discontinued operations	$	6,270		$	2,175
Income tax expense		(2,195	)		(761	)
Net income from discontinued operations	$	4,075		$	1,414

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.