11. Supplemental Financial Statement Information

Deferred Revenue on Land Sale

In the 2012 third quarter, Griffin Land closed on the Dollar Tree Sale. As required under the terms of the Dollar Tree Sale, Griffin Land is required to construct a sewer line to service the land that was sold. As a result of Griffin Land’s continuing involvement with the land sold, this transaction was accounted for under the percentage of completion method, whereby the revenue and the pretax gain on sale are being recognized on a pro rata basis in a ratio equal to the percentage of the total costs incurred to the total anticipated costs of sale, including the costs of the required construction of the sewer line. Costs included in determining the percentage of completion are the cost of the land sold, allocated master planning costs of Tradeport, selling and transaction costs and estimated future costs related to the land sold.

As of March 2, 2013, approximately 80% of the total costs related to the Dollar Tree Sale have been incurred; therefore, from the date of the transaction through March 2, 2013, approximately 80% of the total revenue and gain on sale have been recognized in Griffin’s consolidated statements of operations. Griffin’s consolidated statement of operations for the 2013 first quarter includes revenue of $884 and a pretax gain on sale of $741 from the Dollar Tree Sale. The balance of the revenue and the pretax gain on sale will be recognized as the remaining costs for the construction of the sewer line are incurred, which is expected to take place during the 2013 second quarter. Included on Griffin’s consolidated balance sheet as of March 2, 2013 is deferred revenue of approximately $1,413 that will be recognized as the construction of the sewer line is completed. Including the pretax gain on sale of $3,942 recognized in fiscal 2012, the total pretax gain on the Dollar Tree Sale is expected to be approximately $5,900 after all revenue is recognized and all costs incurred. Management has used its best estimates, based on industry knowledge and experience, in projecting the total costs of the required construction of a sewer line, however, increases or decreases in projected future costs from current estimated amounts would reduce or increase the amount of gain to be recognized in future periods.

Supplemental Cash Flow Information

A decrease of $59 in the 2013 first quarter and an increase of $514 in the 2012 first quarter in Griffin’s Investment in Centaur Media reflect the mark to market adjustments of this investment and did not affect Griffin’s cash. In the 2013 first quarter, Griffin sold 1,324,688 shares of its Centaur Media common stock (see Note 7).

Included in accounts payable and accrued liabilities at March 2, 2013 and December 1, 2012 were $425 and $942, respectively, for additions to real estate assets. Accounts payable and accrued liabilities related to additions to real estate assets decreased by $517 in the 2013 first quarter and increased by $965 in the 2012 first quarter.

As of December 1, 2012, Griffin’s accrued liabilities included $1,028 for a dividend on Griffin’s common stock that was declared prior to the end of fiscal 2012 and paid in the 2013 first quarter.

	For the 13 Weeks Ended,
	March 2, 2013		March 3, 2012

Interest payments, net of capitalized interest	$	1,189	$	965

Income Taxes

Griffin’s effective income tax rate on continuing operations was 33.0% in the 2013 first quarter as compared to 36.2% in the 2012 first quarter. The effective tax rate in the 2013 first quarter is based on management’s projections for the balance of the year. To the extent that actual results differ from current projections, the effective income tax rate may change.

As of March 2, 2013, Griffin’s consolidated balance sheet includes a net current deferred tax asset of $525 and a net noncurrent deferred tax asset of $1,662. Although Griffin has incurred pretax losses from continuing operations for the fiscal years ended December 1, 2012, December 3, 2011 and November 27, 2010, management has concluded that a valuation allowance against those net deferred tax assets is not required.

Examinations of Griffin’s fiscal 2007, fiscal 2008 and fiscal 2009 New York state income tax returns are currently being performed.