Accounting for the Impairment or Disposal of Long-Lived Assets

9 Months Ended

Sep. 30, 2014

Disposal Group, Including Discontinued Operation, 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 $126.0 million for the nine months ended September 30, 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 Nine Months Ended
		September 30, 2014			September 30, 2013			September 30, 2014			September 30, 2013
Portfolio Sale
	Revenues	$	9		$	27,585		$	4,728		$	81,385
	Operating expenses	86			(10,606		)	(2,233		)	(29,155		)
	Interest and other income	3			66			40			172
	Interest expense	—			(3,830		)	(557		)	(11,550		)
	Depreciation and amortization	—			(6,798		)	—			(21,403		)
	Income before (loss) gain on property dispositions	98			6,417			1,978			19,449
	(Loss) gain on property dispositions	(35		)	—			46,086			—
	Income from discontinued operations - Portfolio Sale	63			6,417			48,064			19,449
	Noncontrolling interest	(1		)	(158		)	(1,130		)	(558		)
	Income from discontinued operations available to common shareholders - Portfolio Sale	62			6,259			46,934			18,891
	Add back noncontrolling interest	1			158			1,130			558
	Income from discontinued operations - Portfolio Sale	63			6,417			48,064			19,449
	Income from discontinued operations - other properties	73			127			212			50,559
	Income from discontinued operations	$	136		$	6,544		$	48,276		$	70,008

Net cash used in operating activities from the properties included in the Portfolio Sale for the three and nine months ended September 30, 2014 was $1.5 million and $4.3 million, respectively, compared to net cash provided by operating activities from such properties of $11.5 million and $39.5 million, respectively, for the three and nine months ended September 30, 2013. Net cash used in investing activities from the properties included in the Portfolio Sale for the three months ended September 30, 2014 was $42,000 and net cash provided by investing activities was $313.1 million for the nine months ended September 30, 2014. Net cash used by investing activities from such properties was $3.4 million and $11.1 million, respectively, for the three and nine months ended September 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 September 30, 2014, the Company did not sell any operating properties. During the nine months ended September 30, 2014, the Company sold four operating properties in segments grouped into the Company's "Other" category for aggregate proceeds of $37.3 million. One property totaling 75,000 square feet in the Company’s "Other" category was considered held for sale as of September 30, 2014. Under ASU 2014-08, these sold and held for sale properties have not been classified as discontinued operations.