INVESTMENT IN UNCONSOLIDATED INVESTEES

9 Months Ended

Sep. 30, 2013

INVESTMENT IN UNCONSOLIDATED INVESTEES

INVESTMENT IN UNCONSOLIDATED INVESTEES

NOTE 4. INVESTMENT IN UNCONSOLIDATED INVESTEES

Investments in unconsolidated investees in which we have a 20% to 50% interest or otherwise exercise significant influence are carried at cost and adjusted for the Company’s proportionate share of their undistributed earnings or losses under the equity method of accounting.

Investments in unconsolidated investees consist of the following:

	Percentage ownership as of
	September 30, 2013			September 30, 2012
Gruppa Florentina, LLC		20.00	%		20.00	%

Gruppa Florentina, LLC is the sole member of Milano Restaurants International Corporation, (“Milano”) which operates 35 pizza parlors under the trade name “Me-N-Ed’s Pizza Parlors” located primarily in Central and Northern California.  Milano has a 100% ownership interest in SienaCorp, which operates two grills under the trade names “Me-N-Ed’s Victory Grill” and “Me-N-Ed’s Coney Island Grill”.  Milano has a 100% ownership interest in Piazza del Pane, Inc., which operates three restaurants located in Central California.  Milano also has 23 franchised locations, including two operating, under the trade name Angelo & Vito’s Pizzerias.

The following is a summary of the financial position and results of operations from our investees (dollars in thousands):

As of September 30,	2013			2012
Real estate, net of accumulated depreciation	$	11,080		$	11,798
Notes receivable		6,252			6,046
Other assets		31,922			31,903
Notes payable		(12,031	)		(13,864	)
Other liabilities		(7,498	)		(6,868	)
Shareholders' equity		(29,725	)		(29,015	)
For the Nine Months Ended September 30,		2013			2012
Revenue	$	30,637		$	30,546
Depreciation		(783	)		(901	)
Operating expenses		(27,990	)		(27,478	)
Interest expense		(706	)		(798	)
Income from continuing operations		1,158			1,369
Income from discontinued operations		-			-
Net income	$	1,158		$	1,369
Company's proportionate share of earnings	$	232		$	274