OPERATING SEGMENTS

6 Months Ended

Jun. 30, 2013

OPERATING SEGMENTS

OPERATING SEGMENTS

NOTE 8. OPERATING SEGMENTS

Our segments are based on our method of internal reporting which classifies our operations by property type.  Our property types are grouped into commercial, apartments, hotels, land and other operating segments.  Significant differences among the accounting policies of the operating segments as compared to the consolidated financial statements principally involve the calculation and allocation of administrative and other expenses.  Management evaluates the performance of each of the operating segments and allocates resources to them based on their net operating income and cash flow.

Items of income that are not reflected in the segments are interest, other income, gain on debt extinguishment, gain on condemnation award, equity in partnerships, and gains on sale of real estate. Expenses that are not reflected in the segments are provision for losses, advisory, net income and incentive fees, general and administrative, non-controlling interests and net loss from discontinued operations before gains on sale of real estate.

The segment labeled as “Other” consists of revenue and operating expenses related to the notes receivable and corporate debt.

Presented below is our reportable segments’ operating income for the three and six months ended June 30, 2013 and 2012, including segment assets and expenditures (dollars in thousands):

	Commercial
For the Three Months Ended June 30, 2013	Properties			Apartments			Hotels		Land			Other			Total
Rental and other property revenues	$	6,197		$	20,956		$	-	$	22		$	7		$	27,182
Property operating expenses		3,116			9,040			-		356			32			12,544
Depreciation and amortization		1,851			3,633			-		-			(39	)		5,445
Mortgage and loan interest		1,798			5,973			-		1,504			1,790			11,065
Deferred borrowing costs		21			897			-		35			7			960
Loan charges and prepayment penalties		-			3,200			-		-			180			3,380
Interest income		-			-			-		-			3,512			3,512
Segment operating income (loss)	$	(589	)	$	(1,787	)	$	-	$	(1,873	)	$	1,549		$	(2,700	)
Capital expenditures		2,250			110			-		-			-			2,360
Real estate assets		149,684			513,328			-		210,095			-			873,107
Property Sales
Sales price	$	26,974		$	24,822		$	-	$	-		$	-		$	51,796
Cost of sale		14,914			18,808			-		-			-			33,722
Gain on sale	$	12,060		$	6,014		$	-	$	-		$	-		$	18,074
	Commercial
For the Three Months Ended June 30, 2012	Properties			Apartments			Hotels		Land			Other			Total
Rental and other property revenues	$	7,441		$	19,809		$	-	$	-		$	34		$	27,284
Property operating expenses		4,312			8,761			-		293			(113	)		13,253
Depreciation and amortization		1,437			3,573			-		-			(69	)		4,941
Mortgage and loan interest		1,536			7,027			-		1,497			2,001			12,061
Deferred borrowing costs		23			1,903			-		37			12			1,975
Loan charges and prepayment penalties		-			3,730			-		39			-			3,769
Interest income		-			-			-		-			4,723			4,723
Gain on land sales		-			-			-		4,738			-			4,738
Segment operating income (loss)	$	133		$	(5,185	)	$	-	$	2,872		$	2,926		$	746
Capital expenditures		431			37			-		-			-			468
Real estate assets		166,902			561,711			-		231,497			-			960,110
Property Sales
Sales price	$	6,825		$	25,985		$	3,369	$	12,650		$	-		$	48,829
Cost of sale		7,313			23,946			252		7,912			-			39,423
Gain (loss) on sale	$	(488	)	$	2,039		$	3,117	$	4,738		$	-		$	9,406

The table below reconciles the segment information to the corresponding amounts in the Consolidated Statements of Operations:

	For the Three Months Ended
	June 30,
	2013			2012
Segment operating income (loss)	$	(2,700	)	$	746
Other non-segment items of income (expense)
General and administrative		(2,043	)		(919	)
Advisory fees		(2,487	)		(2,700	)
Provision on impairment of notes receivable and real estate assets		(800	)		-
Other income		149			2,235
Earnings from unconsolidated investees		(25	)		33
Income tax benefit		6,423			2,217
Income (loss) from continuing operations	$	(1,483	)	$	1,612

The table below reconciles the segment information to the corresponding amounts in the Consolidated Balance Sheets:

	June 30,
	2013		2012
Segment assets	$	873,107	$	960,110
Investments in unconsolidated investees		10,415		7,437
Notes and interest receivable		103,690		101,235
Other assets and receivables		71,401		89,134
Assets held for sale		-		2,329
Total assets	$	1,058,613	$	1,160,245

	Commercial
For the Six Months Ended June 30, 2013	Properties			Apartments			Hotels		Land			Other			Total
Rental and other property revenues	$	12,453		$	41,450		$	-	$	56		$	14		$	53,973
Property operating expenses		7,101			17,741			-		726			9			25,577
Depreciation and amortization		3,145			7,256			-		-			(97	)		10,304
Mortgage and loan interest		3,280			12,157			-		3,039			3,693			22,169
Deferred borrowing costs		43			3,253			-		97			43			3,436
Loan charges and prepayment penalies		-			7,182			-		-			180			7,362
Interest income		-			-			-		-			7,053			7,053
Loss on land sales		-			-			-		(35	)		-			(35	)
Segment operating income (loss)	$	(1,116	)	$	(6,139	)	$	-	$	(3,841	)	$	3,239		$	(7,857	)
Capital expenditures		3,053			246			-		281			-			3,580
Real estate assets		149,684			513,328			-		210,095			-			873,107
Property Sales
Sales price	$	26,974		$	50,122		$	-	$	2,250		$	-		$	79,346
Cost of sale		14,914			36,881			-		2,285			-			54,080
Gain (loss) on sale	$	12,060		$	13,241		$	-	$	(35	)	$	-		$	25,266
	Commercial
For the Six Months Ended June 30, 2012	Properties			Apartments			Hotels		Land			Other			Total
Rental and other property revenues	$	14,924		$	38,913		$	-	$	-		$	75		$	53,912
Property operating expenses		8,498			16,770			-		572			276			26,116
Depreciation and amortization		2,873			7,183			-		-			(138	)		9,918
Mortgage and loan interest		3,126			14,141			-		3,179			4,042			24,488
Deferred borrowing costs		46			2,763			-		54			24			2,887
Loan charges and prepayment penalties		-			6,117			-		44			-			6,161
Interest income		-			-			-		-			8,063			8,063
Gain on land sales		-			-			-		3,716			-			3,716
Segment operating income (loss)	$	381		$	(8,061	)	$	-	$	(133	)	$	3,934		$	(3,879	)
Capital expenditures		877			235			-		285			-			1,397
Real estate assets		166,902			561,711			-		231,497			-			960,110
Property Sales
Sales price	$	6,825		$	45,610		$	3,369	$	20,914		$	-		$	76,718
Cost of sale		7,313			39,983			252		17,198			-			64,746
Gain (loss) on sale	$	(488	)	$	5,627		$	3,117	$	3,716		$	-		$	11,972

The table below reconciles the segment information to the corresponding amounts in the Consolidated Statements of Operations:

	For the Six Months Ended June 30,
	2013			2012
Segment operating loss	$	(7,857	)	$	(3,879	)
Other non-segment items of income (expense)
General and administrative		(4,257	)		(3,777	)
Advisory fees		(5,042	)		(5,359	)
Provision on impairment of notes receivable and real estate assets		(800	)		-
Other income		2,685			3,981
Loss on sale of investments		-			(362	)
Earnings from unconsolidated investees		188			150
Income tax benefit		8,931			2,625
Loss from continuing operations	$	(6,152	)	$	(6,621	)

The table below reconciles the segment information to the corresponding amounts in the Consolidated Balance Sheets:

	June 30,
	2013		2012
Segment assets	$	873,107	$	960,110
Investments in unconsolidated investees		10,415		7,437
Notes and interest receivable		103,690		101,235
Other assets and receivables		71,401		89,134
Assets held for sale		-		2,329
Total assets	$	1,058,613	$	1,160,245