DISCONTINUED OPERATIONS AND REAL ESTATE INTERESTS HELD FOR SALE

3 Months Ended

Mar. 31, 2014

DISCONTINUED OPERATIONS AND REAL ESTATE INTERESTS HELD FOR SALE

DISCONTINUED OPERATIONS AND REAL ESTATE INTERESTS HELD FOR SALE

7. DISCONTINUED OPERATIONS AND REAL ESTATE INTERESTS HELD FOR SALE

As previously reported, on February 25, 2013, the Company completed the sale of its interests in Grove Isle Associates LLLP, Grove Isle Yacht Club Associates, Grove Isle Investments Inc. and CII Yacht Club, Inc., which represent interests in the Grove Isle hotel, club, tennis courts and marina (collectively, the “Grove Isle Property”) to Grove Isle Yacht & Tennis, LLC, a Florida limited liability company and an unrelated entity (“the Purchaser”), pursuant to a purchase agreement entered into on the same day (the “Agreement”). The purchase price was $24.4 million, consisting of $23.4 million in cash and a $1 million promissory note due from the Purchaser. Approximately $2.7 million of the proceeds were used to pay off the existing mortgage on the Grove Isle Property. The Company realized a gain on the sale of these interests (including transactions in June 2013 described below) of approximately $19 million (or $19 per share) net of incentive fee due to the Adviser of approximately $2.1 million and before provision for corporate income taxes estimated at $2.5 million (consisting of approximately $1.6 million in current income tax expense and $915,000 in deferred income tax expense).

In June 2013 the Company received an additional $327,000 in proceeds for unpaid rent due by the Grove Isle tenant prior to the sale. Also in June 2013 the Purchaser exercised its option to purchase our 50% interest in the spa for $100,000.

As previously reported, on March 29, 2013, pursuant to a Membership Interests Purchase Agreement (the “Agreement”) entered into in December 2012, HMG/Courtland Properties, Inc. and its 95% owned subsidiary, Courtland Investments, Inc. (the “Company”), completed the sale of the Company’s 50% membership interests in Bayshore Landing LLC, Bayshore Rawbar LLC and Bayshore Restaurant LLC, (collectively the “Monty’s property) to the other 50% owner, The Christoph Family Trusts, which are unrelated entities. The purchase price for the membership interests of $3 million was paid in cash. The Company realized a gain on the sale of these interests (as adjusted) of approximately $28,000 (or $.03 per share).

We have classified the results of operations for the real estate interests discussed above into discontinued operations in the accompanying condensed consolidated financial statements of comprehensive income.

	2013
Revenues:
Rental and related revenue	$	171,000
Food and beverage sales		1,950,000
Marina revenue		382,000
Total revenue		2,503,000
Expenses:
Rental operating expenses		97,000
Food and beverage expenses		1,430,000
Marina expenses		178,000
Profession expenses		53,000
Interest expense		190,000
Depreciation, amortization and other expenses		199,000
Income attributable to noncontrolling Bayshore interest sold in 2013		212,000
Total expenses		2,359,000
Gain on sale of real estate interests		18,526,000
Provision for income taxes on gain on sale of real estate interests		(1,364,000	)
Income from discontinued operations	$	17,306,000

The major classes of assets and liabilities associated with the real estate interest held for sale as of March 31, 2013 were as follows:

	March 31, 2013
Grove Isle Spa remaining interest	$	100,000
Assets associated with real estate interest held for sale	$	100,000