| Discontinued Operations |
7. DISCONTINUED OPERATIONS
The Company disposed of 24 office properties aggregating 3 million square feet and three developable land parcels for total net sales proceeds of approximately $390.6 million during the year ended December 31, 2013 and has presented them as discontinued operations in its statement of operations for all periods presented. (See Note 3: Real Estate Transactions – Property Sales).
As the Company disposed of 2200 Renaissance Boulevard in King of Prussia, Pennsylvania; 95 Chestnut Ridge Road in Montvale, New Jersey; and three office buildings in Moorestown, New Jersey during the year ended December 31, 2012, the Company has presented the results from these assets as discontinued operations in its statements of operations for all periods presented. The Company did not dispose of any properties during the year ended December 31, 2011.
The following table summarizes income from discontinued operations and the related realized gains (losses) and unrealized losses on disposition of rental property and impairments, net, for the years ended December 31, 2013, 2012 and 2011: (dollars in thousands)
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Years Ended December 31,
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2013
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2012
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2011
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Total revenues
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$
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33,601
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$
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66,882
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$
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72,044
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Operating and other expenses
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(13,454)
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(26,484)
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(29,624)
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Depreciation and amortization
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(8,218)
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(17,765)
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(18,416)
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Interest expense
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(118)
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(755)
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(2,116)
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Income from discontinued operations
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11,811
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21,878
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21,888
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Loss from early extinguishment of debt
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(703)
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-
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-
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Impairments (1)
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(23,851)
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(8,400)
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-
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Unrealized losses on disposition of rental property (2)
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-
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(9,213)
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-
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Realized gains on disposition of rental property (3)
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83,371
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4,438
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-
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Realized gains (losses) and unrealized losses on
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disposition of rental property and impairments, net
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59,520
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(13,175)
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-
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Total discontinued operations, net
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$
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70,628
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$
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8,703
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$
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21,888
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(1)
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Represents impairment charges recorded on certain properties prior to their sale. See Note 3: Real Estate Transactions – Property Sales.
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(2)
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Represents valuation allowances on properties identified as held for sale in 2012, as follows:
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(i)
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At March 31, 2012, the Company identified as held for sale its 47,700 square foot office building located at 95 Chestnut Ridge Road in Montvale, New Jersey. The Company determined that the carrying amount of this property was not expected to be recovered from estimated net sales proceeds and, accordingly, recognized a valuation allowance of $0.5 million at March 31, 2012. On July 25, 2012, the Company sold the building for approximately $4.0 million (with no gain from the sale).
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(ii)
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At March 31, 2012, the Company identified as held for sale three office buildings totaling 222,258 square feet in Moorestown, New Jersey. The Company determined that the aggregate carrying amount of these properties was not expected to be recovered from estimated net sales proceeds and, accordingly, recognized a valuation allowance of $1.6 million at June 30, 2012. On November 7, 2012, the Company sold the buildings for approximately $19.4 million and recognized a loss of approximately $0.1 million from the sale.
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(iii)
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At December 31, 2012, the Company identified as held for sale its 248,400 square foot office building located at 19 Skyline Drive in Hawthorne, New York. The Company determined that the carrying amount of this property was not expected to be recovered from estimated sales proceeds and accordingly recognized a valuation allowance of $7.1 million at December 31, 2012. Also at December 31, 2012, the Company identified as held for sale its 204,057 square foot office building located at 55 Corporate Drive in Bridgewater, New Jersey. The two properties held for sale at December 31, 2012 carried an aggregate book value of $60.9 million, net of accumulated depreciation of $16.8 million and a valuation allowance of $7.1 million. As of April 10, 2013, the Company sold 19 Skyline Drive for approximately $16.1 million and recognized a gain of approximately $0.1 million. As of April 26, 2013, the Company sold 55 Corporate Drive for approximately $71 million and recognized a gain of approximately $19.7 million.
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(3)See Note 3: Real Estate Transactions – Property Sales for further information regarding properties sold and related gains (losses).
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