Discontinued Operations and Gain on Disposition of Rental Properties

6 Months Ended

Jul. 31, 2013

Discontinued Operations and Disposal Groups [Abstract]

Discontinued Operations and Gain on Disposition of Rental Properties

Discontinued Operations and Gain on Disposition of Rental Properties

The following table lists rental properties included in discontinued operations:

Property	Location	Square Feet/ Number of Units	Period Disposed	Three Months Ended 7/31/13	Six Months Ended 7/31/13	Three Months Ended 7/31/12	Six Months Ended 7/31/12
Commercial Group:
Higbee Building	Cleveland, Ohio	815,000 square feet	Q2-2013	Yes	Yes	Yes	Yes
Sheraton Station Square	Pittsburgh, Pennsylvania	399 rooms	Q2-2013	Yes	Yes	Yes	Yes
Fairmont Plaza	San Jose, California	335,000 square feet	Q4-2012	—	—	Yes	Yes
White Oak Village	Richmond, Virginia	843,000 square feet	Q3-2012	—	—	Yes	Yes
Quebec Square	Denver, Colorado	739,000 square feet	Q1-2012	—	—	—	Yes
Six triple net lease properties	Various	287,000 square feet	Various (1)	—	Yes	Yes	Yes
Residential Group:
Millender Center	Detroit, Michigan	339 units	Q1-2013	—	Yes	Yes	Yes
Emerald Palms	Miami, Florida	505 units	Q4-2012	—	—	Yes	Yes
Southfield	Whitemarsh, Maryland	212 units	Q3-2012	—	—	Yes	Yes

(1) Includes one triple net lease property disposed of during Q1-2013, three triple net lease properties disposed of during Q3-2012 and two triple net lease properties disposed of during Q2-2012.

The following table summarizes the operating results related to discontinued operations:

	Three Months Ended July 31,						Six Months Ended July 31,
	2013			2012			2013			2012
	(in thousands)
Revenues from real estate operations	$	9,911		$	20,451		$	20,445		$	40,181
Expenses
Operating expenses	5,631			9,999			12,143			20,133
Depreciation and amortization	749			3,525			1,987			6,994
Impairment of real estate	—			2,709			—			4,090
	6,380			16,233			14,130			31,217
Interest expense	(1,515		)	(3,627		)	(2,769		)	(7,361		)
Amortization of mortgage procurement costs	(19		)	(325		)	(50		)	(492		)
Loss on extinguishment of debt	—			—			(40		)	—
Interest income	111			127			225			280
Gain on disposition of rental properties	21,221			—			43,103			8,879
Earnings before income taxes	23,329			393			46,784			10,270
Income tax expense (benefit)	12,080			(325		)	19,007			3,603
Earnings from discontinued operations	11,249			718			27,777			6,667
Noncontrolling interest
Gain on disposition of rental properties	—			—			5,835			965
Operating earnings from rental properties	—			514			3			590
	—			514			5,838			1,555
Earnings from discontinued operations attributable to Forest City Enterprises, Inc.	$	11,249		$	204		$	21,939		$	5,112

The following table summarizes the pre-tax gain on disposition of rental properties:

	Three Months Ended July 31,				Six Months Ended July 31,
	2013		2012		2013		2012
	(in thousands)
Sheraton Station Square (Hotel)	$	18,096	$	—	$	18,096	$	—
Higbee Building (Office Building)	2,922		—		2,922		—
Millender Center (Apartment Community)	—		—		21,660		—
Triple net lease property	—		—		222		—
Quebec Square (Specialty Retail Center)	—		—		—		8,879
Other	203		—		203		—
	$	21,221	$	—	$	43,103	$	8,879

Gain (Loss) on Disposition of Unconsolidated Entities

Upon disposition, investments accounted for on the equity method are not classified as discontinued operations; therefore, gains or losses on the disposition of these properties are reported in continuing operations. The following table summarizes gains and losses on the disposition of unconsolidated entities, which are included in equity in earnings:

		Three Months Ended July 31,				Six Months Ended July 31,
		2013		2012		2013			2012
		(in thousands)
Specialty Retail Centers:
Plaza at Robinson Town Center	Pittsburgh, Pennsylvania	$	—	$	—	$	(1,510	)	$	—
Village at Gulfstream Park	Hallandale Beach, Florida	—		14,479		—			14,479
Chagrin Plaza I & II (Office Buildings)	Beachwood, Ohio	—		1,628		—			1,628
		$	—	$	16,107	$	(1,510	)	$	16,107