Discontinued Operations

12 Months Ended

Dec. 31, 2013

Discontinued Operations and Disposal Groups [Abstract]

Discontinued Operations

DISCONTINUED OPERATIONS

We have reclassified, for all periods presented, the operations of facilities meeting the accounting criteria for properties being sold or held for sale as discontinued operations.

In December 2013, we sold three older skilled nursing facilities to affiliates of our current tenant, Fundamental, for $18,500,000. The properties had a carrying value of $17,068,000. We plan to defer recognition of the tax gain on the sale of these facilities by utilizing the like-kind exchange rules under Section 1031 of the internal Revenue Code. Our lease revenue from these facilities was $3,316,000, $3,231,000, and $3,067,000 for the years endedDecember 31, 2013, 2012, and 2011, respectively. Pursuant to the purchase option, rents associated with the two remaining properties will be fixed at $250,000 per month, without escalation, through the first renewal term in February 2016.

In January 2011, we completed the sale of a skilled nursing facility in Texas to the current tenant, Fundamental, for $4,500,000 that had a carrying value of $4,039,000. Our lease revenue from the facilities was $43,000 for the year ended December 31, 2011.

In October 2013, our current tenant, Weatherly Associates, LLC, exercised their option to purchase a senior housing facility in Pennsylvania for $5,315,000. The sale was completed in December 2013. The property had a carrying value of $3,591,000 resulting in a gain for financial statement purposes. We plan to defer recognition of the tax gain on the sale of this facility by utilizing the like-kind exchange rules under Section 1031 of the Internal Revenue Code. Our lease revenue from the facility was $353,000, $403,000, and $403,000 for the years endedDecember 31, 2013, 2012, and 2011, respectively.

In August 2013 we sold six older skilled nursing facilities to NHC for $21,000,000 and recorded a gain for financial statement purposes of $19,370,000 after selling costs of $19,000. Our lease revenue from the facilities was $2,294,000, $3,368,000 and $3,377,000 for the years ended December 31, 2013, 2012 and 2011, respectively.

In December 2012, our tenant, Sunrise Senior Living, exercised its option to purchase our assisted living facility in Edison, New Jersey. Our lease revenue from the facility was $1,302,000 and $1,372,000 for the years ended December 31, 2012 and 2011, respectively.

In August 2011, we sold an assisted living facility located in Daytona Beach, Florida to the current tenant. The net gain on the sale of these facilities was $1,048,000 for financial statement purposes. Our lease revenue from the facilities was $202,000 and for the year ended December 31, 2011.

In February 2011, we sold two medical office buildings to our current tenant. The net gain on the sale of these facilities was $1,838,000 for financial statement purposes. Our lease revenue from the facilities was $41,000 for the year ended December 31, 2011.

Income from discontinued operations is summarized below (in thousands):

	Year Ended December 31,
	2013		2012		2011
Revenues:
Rental income	$	5,962	$	8,304	$	8,505
Other income	21		3		4
Expenses:
Depreciation	557		2,209		542
Operating income	5,426		6,098		7,967
Gain on sale of real estate	22,258		11,966		3,348
Total discontinued operations	$	27,684	$	18,064	$	11,315
Weighted average common shares outstanding:
Basic	28,362,398		27,811,813		27,719,096
Diluted	28,397,702		27,838,720		27,792,592
Discontinued operations income per share:
Basic	$	.97	$	.65	$	.41
Diluted	$	.97	$	.65	$	.41