DISCONTINUED OPERATIONS

9 Months Ended

Sep. 30, 2013

DISCONTINUED OPERATIONS

DISCONTINUED OPERATIONS

NOTE 9. DISCONTINUED OPERATIONS

We apply the provisions of ASC Topic 360, “Property, Plant and Equipment”. ASC Topic 360 requires that long-lived assets that are to be disposed of by sale be measured at the lesser of (1) book value or (2) fair value less cost to sell. In addition, it requires that one accounting model be used for long-lived assets to be disposed of by sale and broadens the presentation of discontinued operations to include more disposal transactions.

Discontinued operations relates to properties that were either sold or held for sale as of the period ended September 30, 2013.  Included in discontinued operations are a total of sixand twelveproperties as of 2013 and 2012, respectively.  Properties sold in 2013 have been reclassified to discontinued operations for current and prior year reporting periods.In 2013, we sold two apartment complexes (Laguna Vista and Verandas at City View), three commercial properties (225 Baronne, Amoco and Eton Square), and have one commercial property held for sale (Ergon).  In 2012, we sold two apartment complexes (Portofino and Wildflower Villas), three commercial properties (305 Baronne, Clarke Garage and Dunes Plaza), and one hotel (Comfort Inn). The gain on sale of the properties is also included in discontinued operations for those years. The following table summarizes revenue and expense information for the properties sold and held for sale (dollars in thousands):

	For the Three Months Ended						For the Nine Months Ended
	September 30,						September 30,
	2013			2012			2013			2012
Revenue
Rental and other property revenues	$	(8	)	$	2,412		$	3,760		$	10,840
Other income		-			(1,126	)		20			(187	)
		(8	)		1,286			3,780			10,653
Expenses
Property operating expenses		154			1,946			1,913			7,438
Interest expense		4			(256	)		892			1,719
Loan cost amortization		-			5			4			19
Loan fee expense		-			-			-			849
General and administrative		232			250			668			801
Depreciation and amortization		-			462			512			1,809
Earnings from unconsolidated investees		-			47			-			-
		390			2,454			3,989			12,635
Loss from discontinued operations before gains on sale of real estate, taxes, and fees		(398	)		(1,168	)		(209	)		(1,982	)
Gain on sale of discontinued operations		127			585			25,429			8,840
Income (loss) from discontinued operations		(271	)		(583	)		25,220			6,858
Income tax benefit (expense)		95			204			(8,827	)		(2,400	)
Net income (loss) from discontinued operations	$	(176	)	$	(379	)	$	16,393		$	4,458

Our application of ASC Topic 360 results in the presentation of the net operating results of these qualifying properties sold or held for sale during 2012 as income from discontinued operations. This does not have an impact on net income available to common shareholders and only impacts the presentation of these properties within the Consolidated Statements of Operations.