Discontinued Operations and Assets and Liabilities Held-for-Sale

Real Estate:

On April 10, 2017, our then majority owned subsidiary, UCP, Inc. (“UCP”), entered into a merger agreement with Century Communities, Inc. (“Century”) whereby each outstanding share of UCP common stock was converted into $5.32 in cash and 0.2309 of a newly issued share of Century common stock representing 9% of Century’s common stock outstanding. The transaction closed on August 4, 2017 and as a result the Company deconsolidated UCP as of the closing date and recorded a loss of $8.7 million. In October 2017, the Company sold its entire position of Century common stock for $59.2 million and recorded a loss of $842,000 during the year ended December 31, 2017.

During the three months ended March 31, 2017, the Company recorded a $7.1 million loss on the sale of UCP based on the Company’s carrying value of UCP at March 31, 2017 and the value of the Century common stock as of the announcement date of the sale.

Agribusiness:

In February 2017, the Company received the final $6 million that had been held in escrow for general indemnification claims related to the sale of its discontinued agribusiness operations. The Company guaranteed up to $8 million for any indemnification claims in excess of the $6 million general indemnification escrow pursuant to the terms of the sale. This guaranty will remain in force until July 31, 2020. The guaranty has been recorded at estimated fair value that reflects the Company’s expectation that no significant amounts will be paid out under the guaranty. However, any amounts paid by the Company in excess of the estimate will result in additional loss on the sale.

The following table presents the details of the Company’s results from discontinued operations included in the condensed consolidated statement of operations and comprehensive income or loss (in thousands):



	Three Months Ended March 31,
	2017
Revenue and other income from discontinued real estate operations:
Sales of real estate	$	94,498
Other	448
Total revenue and other income	94,946

Cost of sales and expenses from discontinued real estate operations:
Cost of real estate sold	77,128
General, administrative, and other	8,215
Sales and marketing	5,149
Impairment loss on long-lived assets	102
Total cost of sales and expenses	90,594
Income (loss) before income taxes	4,352
Benefit (provision) for federal and state income taxes	(521		)
Net income (loss) from discontinued real estate operations	3,831
Net loss from discontinued agribusiness operations, net of tax	56
Net income (loss) from discontinued operations, net of tax	3,887
Gain (loss) on sale of discontinued real estate operations, net of tax⁽¹⁾	(7,148		)
Income (loss) on sale of discontinued agribusiness operations, net of tax	2
Net income (loss) from discontinued operations, net of tax	(3,259		)
Net (income) loss from discontinued operations attributable to noncontrolling interests	(1,391		)
Net income (loss) from discontinued operations attributable to PICO Holdings, Inc.	$	(4,650	)