Discontinued Operations

12 Months Ended

Dec. 31, 2011

Discontinued Operations [Abstract]

Discontinued Operations

NOTE 15. DISCONTINUED OPERATIONS

    As described in Note 3, the planned sale of the Fundamental facilities meets the accounting criteria as being held for sale and we have reclassified the results of operations of these facilities as discontinued operations for all periods presented in our Consolidated Statements of Income.  In January 2011, the first of these six facilities was sold and a net gain of $462,000 for financial statement purposes was recognized.  Our lease revenue from the facilities was $4,820,000, $4,792,000 and $5,000,000 for the years ended December 31, 2011, 2010 and 2009, respectively.

    As described in Note 3, the sale of two medical office buildings to the current tenant was completed in February 2011.  We have reclassified the results of operations of these facilities as discontinued operations for all periods presented in our Consolidated Statements of Income.  The net gain on the sale of these facilities was $1,838,000 for financial statement purposes. 

Our lease revenue from the facilities was $41,000, $584,000 and $584,000 for the years ended December 31, 2011, 2010 and 2009, respectively.

    As described in Note 3, in August 2011, we completed the sale of a 60-unit assisted living facility located in Daytona Beach, Florida to the current tenant.  We have reclassified the results of operations of this facility as discontinued operations for all periods presented in our Consolidated Statements of Income.  The net gain on the sale of these facilities was $1,048,000 for financial statement purposes.  Our lease revenue from the facilities was $202,000, $364,000 and $364,000 for the years ended December 31, 2011, 2010 and 2009, respectively.

    As described in Note 3, the sale of two skilled nursing facilities in Texas to the current lessee Legend was completed in June 2010.  We have reclassified the results of operations of these facilities as discontinued operations for all periods presented in our Consolidated Statements of Income.  The net gain on the sale of these facilities was $2,004,000 for financial statement purposes.  Our lease revenue from the facilities was $107,000 and $480,000 for the years ended December 31, 2010 and 2009, respectively.

    In January 2009, we received final payment of $642,000 related to the settlement of a terminated lease for one of our former Texas facilities that was sold in 2005 to a third-party operator.

    Kansas Facilities – During 2008, we recorded an impairment charge of $1,986,000 related to two Kansas facilities to reduce the carrying value of these facilities to fair value, less the estimated cost of selling the facility.  One of the facilities, located in Hoisington, Kansas, was sold in November of 2008.  At December 31, 2008, the remaining facility was classified as held for sale in the Consolidated Balance Sheet.  The facility met the accounting criteria as being held for sale and the results of its operations have been reported in all periods as discontinued operations in the Consolidated Statements of Income.  The fair value of the land, buildings and improvements less the cost to sell was estimated to be $200,000 at December 31, 2008.  In February 2009, we recorded an impairment charge of $25,000 to reduce its carrying value to expected proceeds, less the cost to sell the facility.  In March 2009, we completed the sale of the remaining facility in Emporia, Kansas for net cash proceeds of $175,000.

    Washington Facilities – During 2009, we recognized into income for financial and tax purposes $1,493,000 related to the cancelation of liabilities which existed at the date of sale of two nursing home facilities in Washington.  At the expiration of the five-year statute of limitations, management concluded based on advice from counsel that we were legally released from any potential liability settlements.  There are no amounts remaining as of December 31, 2011.

    Income from discontinued operations for the year ended December 31, 2010 includes a $14,000 refund related to a previously closed facility in Bellingham, Washington.  Additionally, general and administrative expenses of $26,000 related to closed facilities in Washington and Kansas were included in income from discontinued operations for the year ended December 31, 2009.

    We have reclassified, for all periods presented, the operations of the facilities meeting the accounting criteria as either being sold or held for sale as discontinued operations.

Income from discontinued operations is as follows (in thousands, except per share amounts):

		Year Ended December 31,
		2011		2010		2009
Revenues:
	Rental income	$	5,063	$	5,847	$	6,428
Expenses:
	Depreciation		39		284		1,345
	Facility operating expenses		-		(14)		26
	Impairment of real estate assets		-		-		25
			39		270		1,396
Operating income			5,024		5,577		5,032
	Non-operating income		-		-		2,136
	Gain on sales of real estate		3,348		2,004		-
Total discontinued operations		$	8,372	$	7,581	$	7,168
Weighted average common shares outstanding:
	Basic	27,719,096		27,664,482		27,586,338
	Diluted	27,792,592		27,732,959		27,618,300
Discontinued operations income per common share:
	Basic	$	.30	$	.27	$	.26
	Diluted	$	.30	$	.27	$	.26