Discontinued Operations, Net of Tax

12 Months Ended

Dec. 31, 2012

Discontinued Operations, Net of Tax [Abstract]

Discontinued Operations, Net of Tax

Note 11. Discontinued Operations, Net of Tax:

Our discontinued operations consisted of the following:

	Years Ended December 31,
	2012		2011		2010
	(In thousands)
Net gains (losses) on sales of real estate	$	(15)	$	532	$	78
Net operating losses		(582)		(690)		(298)
Impairment losses		(341)		(887)		(325)
Income tax benefit		115		-		-
Discontinued operations, net of tax	$	(823)	$	(1,045)	$	(545)

Net gains (losses) on sales of real estate generally represents gains (losses) on the sales of hotel properties and income recognition of previously unamortized gains. During 2012, we foreclosed on the underlying collateral (limited service hospitality properties) of two loans with an estimated fair value at foreclosure of $1,481,000 and sold both of these properties during 2012. One property was sold for $1,375,000 including cash proceeds of $550,000 and financing of $825,000. The other property was sold solely for cash proceeds. No gain or loss was recorded on these sales. In addition, we sold a property during 2012 with an estimated fair value of $76,000 and recorded a loss of $19,000. During 2011, previously deferred gains of $685,000 from property sales we financed were recorded as gains on sales of real estate due to principal reductions on the underlying loans. We also sold two properties during 2011 and recorded net losses of $153,000 which offset our gains on sales of real estate during this year. We also had a gain on the sale of REO acquired through foreclosure of $76,000 during 2010.

Net operating losses relate to the operations and holding costs of our REO.

Impairment losses represent declines in the estimated fair value of our REO subsequent to initial valuation. Impairment losses during 2012 primarily relate to a retail establishment acquired in the third quarter of 2009 which continues to experience declines in its value. During 2011, our impairment losses are primarily related to a full service hospitality property. The property experienced significant operating losses, is in need of major capital improvements and has been held for an extended period of time with limited market sales activity, including an unsuccessful auction during the third quarter of 2011, which contributed to the decline in its value. During 2010, our impairment losses are related to the full service hospitality property and a retail establishment.