Accounting for the Impairment or Disposal of Long-Lived Assets

6 Months Ended

Jun. 30, 2014

Accounting for the Impairment or Disposal of Long-Lived Assets [Abstract]

Disposal Groups, Including Discontinued Operations, Disclosure [Text Block]

Accounting for the Disposal of Long-Lived Assets

Under ASU 2014-08, a disposal of a component of an entity is required to be reported in discontinued operations if the disposal represents a strategic shift that has (or will have) a major effect on an entity's operations and financial results.

In November 2013, the Company entered into an Agreement of Sale and Purchase pursuant to which the Company agreed to sell 97 operating properties containing an aggregate of 6.6 million square feet for $697.3 million (the "Portfolio Sale"). In December 2013, the Company closed on the first of two planned settlements under this agreement. The proceeds from the first settlement were $367.7 million and included 49 properties totaling approximately 4.0 million square feet of space and 140 acres of land. In January 2014, the Company closed on the remaining settlement for proceeds of $329.6 million which consisted of 23 properties totaling 1.4 million square feet and 19 acres of land in the Maryland reportable segment, 24 properties and 1.2 million square feet in the New Jersey reportable segment and one property totaling 37,000 square feet in the Company's Southeastern PA reportable segment.

The Portfolio Sale is considered a discontinued operation under the provisions of ASU 2014-08 as it represents a strategic shift that will have a major effect on the Company's operations and financial results.

Prior to the adoption of ASU 2014-08, the results of operations for all operating properties sold or held for sale during the reported periods were shown under discontinued operations on the consolidated statements of comprehensive income. Under ASU 2014-08, operating properties that were sold or classified as held for sale before the adoption of ASU 2014-08 continue to be classified as discontinued operations. Accordingly, operating properties previously reported as discontinued operations will continue to be presented as discontinued operations on the consolidated statements of comprehensive income for all periods presented. The proceeds from the disposition of properties excluding the Portfolio Sale that were included in discontinued operations were zero for the three and six months ended June 30, 2014 and were $51.4 million and $126.0 million for the same periods in 2013.

A summary of the results of operations for the Portfolio Sale and other properties classified as discontinued operations through the respective disposition dates is as follows (in thousands):

		For the Three Months Ended						For the Six Months Ended
		June 30, 2014			June 30, 2013			June 30, 2014			June 30, 2013
Portfolio Sale
	Revenues	$	(28	)	$	26,659		$	4,733		$	53,800
	Operating expenses	129			(9,113		)	(2,441		)	(18,549		)
	Interest and other income	—			57			29			106
	Interest expense	—			(3,720		)	(557		)	(7,472		)
	Depreciation and amortization	—			(7,293		)	—			(14,604		)
	Income before gain on property dispositions	101			6,590			1,764			13,281
	Gain on property dispositions	80			—			46,121			—
	Income from discontinued operations - Portfolio Sale	$	181		$	6,590		$	47,885		$	13,281
	Noncontrolling interest	(4		)	(195		)	(1,144		)	(396		)
	Income from discontinued operations available to common shareholders - Portfolio Sale	$	177		$	6,395		$	46,741		$	12,885
	Add back noncontrolling interest	4			$	195		$	1,144		$	396
	Income from discontinued operations - Portfolio Sale	$	181		$	6,590		$	47,885		$	13,281
	Income from discontinued operations - other properties	60			7,076			130			50,208
	Income from discontinued operations	$	241		$	13,666		$	48,015		$	63,489

Net cash used in operating activities from the properties included in the Portfolio Sale for the three and six months ended June 30, 2014 was $97,000 and $2.8 million, respectively, compared to net cash provided by operating activities from such properties of $13.3 million and $28.0 million, respectively, for the three and six months ended June 30, 2013. Net cash provided by investing activities from the properties included in the Portfolio Sale for the three and six months ended June 30, 2014 was $50,000 and $313.2 million, respectively, compared to net cash used by investing activities from such properties of $4.0 million and $7.8 million, respectively, for the three and six months ended June 30, 2013.

Interest expense has been allocated to discontinued operations. The allocation of interest expense to discontinued operations was based on the ratio of net assets sold and held for sale (without continuing involvement) to the sum of total net assets plus consolidated debt.

During the three months ended June 30, 2014, the Company sold three operating properties in a segment grouped into the Company's "Other" category for aggregate proceeds of $32.2 million. During the six months ended June 30, 2014, the Company sold four operating properties in segments grouped into the Company's "Other" category for aggregate proceeds of $37.3 million Under ASU 2014-08, these sold properties have not been classified as discontinued operations.