OPERATING SEGMENTS

9 Months Ended

Sep. 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 nine months ended September 30, 2013 and 2012, including segment assets and expenditures (dollars in thousands):

	Commercial
For the Three Months Ended September 30, 2013	Properties			Apartments			Hotels		Land			Other			Total
Rental and other property revenues	$	6,081		$	21,259		$	-	$	45		$	97		$	27,482
Property operating expenses		3,883			9,623			-		514			22			14,042
Depreciation and amortization		1,703			3,640			-		-			(39	)		5,304
Mortgage and loan interest		1,467			5,414			-		1,653			2,189			10,723
Deferred borrowing costs		17			8			-		34			205			264
Loan charges and prepayment penalties		-			-			-		-			49			49
Interest income		-			-			-		-			3,778			3,778
Gain on land sales		-			-			-		598						598
Segment operating income (loss)	$	(989	)	$	2,574		$	-	$	(1,558	)	$	1,449		$	1,476
Capital expenditures		2,998			37			-		83			-			3,118
Real estate assets		151,231			509,768			-		209,788			-			870,787
Property Sales
Sales price	$	-		$	-		$	-	$	1,187		$	-		$	1,187
Cost of sale		-			(127	)		-		589			-			462
Gain on sale	$	-		$	127		$	-	$	598		$	-		$	725
	Commercial
For the Three Months Ended September 30, 2012	Properties			Apartments			Hotels		Land			Other			Total
Rental and other property revenues	$	7,416		$	20,350		$	-	$	-		$	5		$	27,771
Property operating expenses		4,186			9,550			-		159			(1	)		13,894
Depreciation and amortization		1,462			3,637			-		-			(66	)		5,033
Mortgage and loan interest		1,099			6,336			-		1,604			1,923			10,962
Deferred borrowing costs		23			(629	)		-		58			1			(547	)
Loan charges and prepayment penalties		-			-			-		35			-			35
Interest income		-			-			-		-			2,280			2,280
Gain on land sales		-			-			-		2,898			-			2,898
Segment operating income (loss)	$	646		$	1,456		$	-	$	1,042		$	428		$	3,572
Capital expenditures		1,404			269			-		-			-			1,673
Real estate assets		166,696			558,519			-		218,580			-			943,795
Property Sales
Sales price	$	3,000		$	-		$	-	$	17,410		$	-		$	20,410
Cost of sale		2,331			84			-		15,127			-			17,542
Deferred current gain		-			-			-		615			-			615
Gain (loss) on sale	$	669		$	(84	)	$	-	$	2,898		$	-		$	3,483

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

	For the Three Months Ended
	September 30,
	2013			2012
Segment operating income	$	1,476		$	3,572
Other non-segment items of income (expense)
General and administrative		(1,919	)		(1,332	)
Provision on impairment of notes receivable and real estate assets		(1,125	)		-
Advisory fee to related party		(2,584	)		(2,215	)
Other income		64			1,192
Loss on sale of investments		(275	)		-
Earnings from unconsolidated investees		69			134
Litigation settlement		(2,764	)		(130	)
Income tax expense		(95	)		(204	)
Net income (loss) from continuing operations	$	(7,153	)	$	1,017

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

	September 30,
	2013		2012
Segment assets	$	870,787	$	943,795
Investments in unconsolidated investees		10,337		7,625
Notes and interest receivable		105,139		100,319
Other assets		79,113		81,851
Total assets	$	1,065,376	$	1,133,590

	Commercial
For the Nine Months Ended September 30, 2013	Properties			Apartments			Hotels		Land			Other			Total
Rental and other property revenues	$	18,534		$	62,709		$	-	$	101		$	111		$	81,455
Property operating expenses		10,966			27,364			-		1,240			31			39,601
Depreciation and amortization		4,848			10,896			-		-			(136	)		15,608
Mortgage and loan interest		4,739			17,570			-		4,692			5,882			32,883
Deferred borrowing costs		60			3,261			-		131			248			3,700
Loan charges and prepayment penalies		-			7,182			-		-			229			7,411
Interest income		-			-			-		-			10,831			10,831
Gain on land sales		-			-			-		563			-			563
Segment operating income (loss)	$	(2,079	)	$	(3,564	)	$	-	$	(5,399	)	$	4,688		$	(6,354	)
Capital expenditures		6,050			283			-		364			-			6,697
Real estate assets		151,231			509,768			-		209,788			-			870,787
Property Sales
Sales price	$	26,974		$	50,122		$	-	$	3,437		$	-		$	80,533
Cost of sale		14,914			36,753			-		2,874			-			54,541
Gain  on sale	$	12,060		$	13,369		$	-	$	563		$	-		$	25,992
	Commercial
For the Nine Months Ended September 30, 2012	Properties			Apartments			Hotels		Land			Other			Total
Rental and other property revenues	$	22,340		$	59,262		$	-	$	-		$	81		$	81,683
Property operating expenses		12,662			26,320			-		731			275			39,988
Depreciation and amortization		4,311			10,820			-		-			(204	)		14,927
Mortgage and loan interest		4,214			20,477			-		4,783			5,965			35,439
Deferred borrowing costs		69			2,133			-		113			25			2,340
Loan charges and prepayment penalties		79			6,118			-		-			-			6,197
Interest income		-			-			-		-			10,342			10,342
Gain on land sales		-			-			-		6,615			-			6,615
Segment operating income (loss)	$	1,005		$	(6,606	)	$	-	$	988		$	4,362		$	(251	)
Capital expenditures		2,281			504			-		40			-			2,825
Real estate assets		166,696			558,519			-		218,580			-			943,795
Property Sales
Sales price	$	9,825		$	45,610		$	3,369	$	38,324		$	-		$	97,128
Cost of sale		9,645			40,067			252		32,324			-			82,288
Deferred current gain		-			-			-		615			-			615
Gain on sale	$	180		$	5,543		$	3,117	$	6,615		$	-		$	15,455

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

	For the Nine Months Ended
	September 30,
	2013			2012
Segment operating loss	$	(6,354	)	$	(251	)
Other non-segment items of income (expense)
General and administrative		(6,181	)		(5,105	)
Provision on impairment of notes receivable and real estate assets		(1,926	)		-
Advisory fee to related party		(7,625	)		(7,573	)
Other income		2,750			5,173
Loss on sale of investments		(283	)		(361	)
Earnings from unconsolidated investees		256			284
Litigation settlement		(2,752	)		(135	)
Income tax benefit		8,827			2,400
Loss from continuing operations	$	(13,288	)	$	(5,568	)

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

	September 30,
	2013		2012
Segment assets	$	870,787	$	943,795
Investments in unconsolidated investees		10,337		7,625
Notes and interest receivable		105,139		100,319
Other assets		79,113		81,851
Total assets	$	1,065,376	$	1,133,590