Business Segments

6 Months Ended

Jun. 30, 2011

Business Segments.

Business Segments

9.     Business Segments

The Company operates in two business segments: real estate operations (including real estate leasing, making interim acquisition loans and other financing and asset/property management) including discontinued operations and investment banking/investment services (including real estate acquisition, development and broker/dealer services).  The Company has identified these segments because this information is the basis upon which management makes decisions regarding resource allocation and performance assessment.  The accounting policies of the reportable segments are the same as those described in “Significant Accounting Policies” in Note 2 to the Company’s consolidated financial statements included in its Annual Report on Form 10-K for the year ended December 31, 2010.  The Company’s operations are located in the United States of America.

The Company evaluates the performance of its reportable segments based on Funds From Operations (“FFO”) as management believes that FFO represents the most accurate measure of the reportable segment’s activity and is the basis for distributions paid to equity holders.  The Company defines FFO as net income (determined in accordance with GAAP), excluding gains (or losses) from sales of property and acquisition costs of newly acquired properties that are not capitalized, plus depreciation and amortization, and after adjustments to exclude non-cash income (or losses) from non-consolidated or Sponsored REITs, plus distributions received from non-consolidated or Sponsored REITs.

FFO should not be considered as an alternative to net income (determined in accordance with GAAP), as an indicator of the Company’s financial performance, nor as an alternative to cash flows from operating activities (determined in accordance with GAAP), nor as a measure of the Company’s liquidity, nor is it necessarily indicative of sufficient cash flow to fund all of the Company’s needs.  Other real estate companies may define this term in a different manner.  We believe that in order to facilitate a clear understanding of the results of the Company, FFO should be examined in connection with net income and cash flows from operating, investing and financing activities in the consolidated financial statements.

The calculation of FFO by business segment for the three and six months ended June 30, 2011 are shown in the following table:

(in thousands)	Real Estate Operations		Investment Banking/ Investment Services		Total
Three Months Ended March 31, 2011
Net income (loss)	$	24,607	$	160	$	24,767
Gain on sale of property	(19,593)		-		(19,593)
Equity in income of non-consolidated REITs	(1,772)		-		(1,772)
Distributions from non-consolidated REITs	1,767		-		1,767
Acquisition costs	269		-		269
Depreciation and amortization	10,774		38		10,812
Funds From Operations	$	16,052	$	198	$	16,250
Three Months Ended June 30, 2011
Net income (loss)	$	7,107	$	3,274	$	10,381
Gain on sale of property	(2,346)		-		(2,346)
Equity in income of non-consolidated REITs	(1,166)		-		(1,166)
Distributions from non-consolidated REITs	1,215		-		1,215
Acquisition costs	9		-		9
Depreciation and amortization	12,010		37		12,047
Funds From Operations	$	16,829	$	3,311	$	20,140
Six Months Ended June 30, 2011
Net income (loss)	$	31,714	$	3,434	$	35,148
Gain on sale of property	(21,939)		-		(21,939)
Equity in income of non-consolidated REITs	(2,938)		-		(2,938)
Distributions from non-consolidated REITs	2,982		-		2,982
Acquisition costs	278		-		278
Depreciation and amortization	22,784		75		22,859
Funds From Operations	$	32,881	$	3,509	$	36,390

The calculation of FFO by business segment for the three and six months ended June 30, 2010 are shown in the following table:

(in thousands)	Real Estate Operations			Investment Banking/ Investment Services			Total
Three Months Ended March 31, 2010
Net income (loss)	$	6,041		$	(479	)	$	5,562
Equity in income of non-consolidated REITs	(253		)	-			(253		)
Distributions from non-consolidated REITs	1,407			-			1,407
Depreciation and amortization	9,901			33			9,934
Funds From Operations	$	17,096		$	(446	)	$	16,650
Three Months Ended June 30, 2010
Net income (loss)	$	5,691		$	263		$	5,954
Equity in income of non-consolidated REITs	(380		)	-			(380		)
Distributions from non-consolidated REITs	1,324			-			1,324
Acquisition costs	129			-			129
Depreciation and amortization	9,636			39			9,675
Funds From Operations	$	16,400		$	302		$	16,702
Six Months Ended June 30, 2010
Net income (loss)	$	11,732		$	(216	)	$	11,516
Equity in income of non-consolidated REITs	(633		)	-			(633		)
Distributions from non-consolidated REITs	2,731			-			2,731
Acquisition costs	129			-			129
Depreciation and amortization	19,537			72			19,609
Funds From Operations	$	33,496		$	(144	)	$	33,352

The following table is a summary of other financial information by business segment:

(in thousands)	Real Estate Operations		Investment Banking/ Investment Services		Total
Three Months Ended June 30, 2011:
Revenue	$	34,762	$	5,658	$	40,420
Interest income	5		4		9
Interest expense	3,578		-		3,578
Capital expenditures	4,091		-		4,091
Six Months Ended June 30, 2011
Revenue	$	66,676	$	6,866	$	73,542
Interest income	15		5		20
Interest expense	5,986		-		5,986
Investment in non-consolidated REITs	88,654		-		88,654
Capital expenditures	7,046		-		7,046
Identifiable assets as of June 30, 2011	$	1,293,933	$	9,831	$	1,303,764
Three Months Ended June 30, 2010:
Revenue	$	27,612	$	1,293	$	28,905
Interest income	9		-		9
Interest expense	1,735		-		1,735
Capital expenditures	1,371		62		1,433
Six Months Ended June 30, 2010
Revenue	$	56,741	$	1,560	$	58,301
Interest income	17		-		17
Interest expense	3,388		-		3,388
Investment in non-consolidated REITs	90,782		-		90,782
Capital expenditures	3,056		62		3,118
Identifiable assets as of June 30, 2010	$	1,183,161	$	3,740	$	1,186,901