Dispositions

The following table provides a summary of disposition activity during the nine months ended September 30, 2012:

Date Sold

Property Name

City

State

Square

Feet/Acres

Gross Sales

Price

(in thousands)

Income producing property sold

March 30, 2012

Laurel Walk Apartments

Charlotte

106,480

6,000

March 30, 2012

Commerce Crossing

Commerce

100,668

600

March 15, 2012

222 Sutter Street

San Francisco

128,595

53,829

⁽¹⁾

60,429

Outparcels sold

February 27, 2012

Market Place - IHOP outparcel

Norcross

0.35

⁽²⁾

885

January 20, 2012

Grand Marche - ground lease

Lafayette Parish

200,585

775

1,660

Total

62,089

^{______________________________________________}

⁽¹⁾ Includes $27.2 million of mortgage debt repaid by the buyer at closing.

⁽²⁾ In acres.

As part of our strategy to upgrade and diversify our portfolio and recycle our existing capital, we are currently evaluating opportunities to sell 26 non-core properties. Furthermore, it is likely that additional assets will be evaluated for disposition in future periods as part of our capital recycling program. Although we have not committed to a disposition plan, we may consider disposing of such properties if pricing is deemed to be favorable. If the market values of these assets are below their carrying values, it is possible that the disposition of these assets could result in impairments or other losses. Depending on the prevailing market conditions and historical carrying values, these impairments and losses could be material.

Discontinued Operations

We report as discontinued operations, properties held-for-sale and operating properties sold in the current period. The results of these discontinued operations are included in a separate component of income/loss on the condensed consolidated statements of operations under the caption discontinued operations. This reporting has resulted in certain reclassifications of financial statement amounts.

The components of income and expense relating to discontinued operations for the three and nine months ended September 30, 2012 and 2011 are shown below. These include the results of operations through the date of each respective sale for properties sold during 2011 and 2012 and the operations for the applicable period for those assets classified as held for sale as of September 30, 2012:



	Three Months Ended September 30,						Nine Months Ended September 30,
	2012			2011			2012			2011
	(In thousands)
Rental revenue	$	115		$	16,239		$	1,980		$	48,649
Expenses:
Property operating expenses	134			4,458			854			13,419
Rental property depreciation and amortization	2			3,838			160			12,332
General and administrative expenses	—			9			13			40
Operations of income producing property	(21		)	7,934			953			22,858
Interest expense	—			(4,033		)	(327		)	(12,184		)
Equity in income of unconsolidated joint ventures	—			161			—			704
Gain on disposal of income producing properties	—			4,025			14,269			4,012
Impairment loss on income producing properties sold or held for sale	—			(36,714		)	(3,425		)	(37,991		)
Loss on extinguishment of debt	—			—			(716		)	—
Income tax benefit	—			33,642			—			34,453
Other income (loss)	316			(4		)	369			6
Income from discontinued operations	295			5,011			11,123			11,858
Net loss attributable to noncontrolling interests - discontinued operations	—			11			—			41
Income from discontinued operations attributable to Equity One, Inc.	$	295		$	5,022		$	11,123		$	11,899

Properties held for sale are recorded at the lower of the carrying amount or the expected sales price less costs to sell. The sale or disposal of a “component of an entity” is treated as discontinued operations. The operating properties sold by us typically meet the definition of a component of an entity and as such the revenue and expenses associated with sold properties are reclassified to discontinued operations for all periods presented. There were no impairment losses during the three months ended September 30, 2012 related to properties classified as held for sale. During the nine months ended September 30, 2012, we recognized impairment losses of $3.4 million related to two properties held for sale (one in the Southeast region and one in the South Florida region) based on the expected sales prices less costs to sell. See Note 18 for further discussion of our impairment assessment. During the three and nine months ended September 30, 2011, we recognized an impairment loss of $36.7 million and $38.0 million, respectively, relating to our investment in properties that were held for sale.

During the three and nine months ended September 30, 2011, we recognized a tax benefit of $33.6 million and $34.5 million, respectively, primarily attributable to the reversal of a deferred tax liability associated with properties classified as held for sale. The deferred tax liability was initially established upon our acquisition of DIM Vastgoed, N.V. (“DIM”), a Dutch company in which we acquired a controlling interest in the first quarter of 2009. Refer to Note 11 for further discussion of the DIM tax benefit.