SEGMENT INFORMATION

Operating segments are defined as components of an enterprise that engage in business activity from which revenues are earned and expenses incurred for which discrete financial information is available that is evaluated regularly by our chief operating decision makers in deciding how to allocate resources and in assessing performance.

Hospitality and Entertainment Operations — Consists of revenues less direct operating expenses, depreciation and amortization relating to our hotel, golf, spa, and food & beverage operations. This segment also reflects the carrying value of such assets and the related financing and operating obligations. As described elsewhere in this Form 10-K, we sold our Sedona hotels on February 28, 2017 and, in accordance with GAAP, have presented the results of operations for such assets in net income (loss) from discontinued operations for the years ended December 31, 2017 and 2016. While the Sedona hotels have been presented as discontinued operations in the accompanying consolidated financial statements, the Company intends to continue its active engagement in the Hospitality and Entertainment Operations segment through our hotel management group. Moreover, the Company acquired MacArthur Place in the fourth quarter of 2017 and is actively pursuing other hospitality assets.

Mortgage and REO – Legacy Portfolio and Other Operations — Consists of the collection, workout and sale of new and legacy mortgage loan investments and REO assets, including financing of such asset sales. This also encompasses the carrying costs of such assets and other related expenses. This segment also reflects the carrying value of such assets and the related financing and operating obligations. This segment has also historically included rental revenue, less direct property operating expenses (maintenance and repairs, real estate taxes, management fees, and other operating expenses), depreciation and amortization from commercial and residential real estate leasing operations, and the carrying value of such assets and the related financing and operating obligations.

Corporate and Other — Consists of our centralized general and administrative and corporate treasury activities. This segment also includes reclassifications and eliminations between the reportable operating segments and reflects the carrying value of corporate fixed assets and the related financing and operating obligations.

The information presented in our reportable segments tables that follow are based in part on internal allocations which involve management judgment. Substantially all revenues recorded are from external customers. There is no material intersegment activity.

Consolidated financial information for our reportable operating segments, excluding assets from discontinued operations, as of December 31, 2017 and 2016 and for the years then ended is summarized as follows (in thousands):



	December 31,		December 31,
Balance Sheet Items	2017		2016
Total Assets
Mortgage and REO - Legacy portfolio and other operations	$	66,577	$	41,071
Hospitality and entertainment operations	39,337		2,092
Corporate and other	8,544		8,991
Consolidated total	$	114,458	$	52,154

Expenditures for additions to long-lived assets
Mortgage and REO - Legacy portfolio and other operations	$	2,132	$	147
Hospitality and entertainment operations	1,673		8,577
Corporate and other	479		22
Consolidated total	$	4,284	$	8,746



	Year Ended December 31, 2017
Income Statement Items	Mortgage and REO - Legacy Portfolio and Other Operations			Hospitality and Entertainment Operations			Corporate and Other			Consolidated

Revenues
Mortgage loan income	$	944		$	—		$	—		$	944
Operating property, management fees, and other	119			4,583			228			4,930
Total Revenues	1,063			4,583			228			5,874

Total Operating Expenses	4,605			5,354			11,833			21,792

Other (Income) Expense
Gain on disposal of assets, net	(3,683		)	(168		)	—			(3,851		)
Recovery of investment and credit losses, net	(6,401		)	—			(60		)	(6,461		)
Impairment of real estate owned	744			—			—			744
Equity loss from unconsolidated entities, net	239			—			—			239
Total Other (Income) Expense	(9,101		)	(168		)	(60		)	(9,329		)

Total (Income) Costs and expense, net	(4,496		)	5,186			11,773			12,463
Income (Loss) from continuing operations before income taxes	5,559			(603		)	(11,545		)	(6,589		)
(Provision for) Benefit from income taxes, continuing operations	(2,167		)	232			3,898			1,963
Net Income (Loss) from continuing operations	3,392			(371		)	(7,647		)	(4,626		)
Income from discontinued operations	—			5,034			—			5,034
Provision for income taxes, discontinued operations	—			(1,963		)	—			(1,963		)
Net Income (Loss)	$	3,392		$	2,700		$	(7,647	)	$	(1,555	)



	Year Ended December 31, 2016
Income Statement Items	Mortgage and REO - Legacy Portfolio and Other Operations			Hospitality and Entertainment Operations			Corporate and Other			Consolidated

Revenues
Mortgage loan income	$	340		$	—		$	—		$	340
Operating property, management fees, and other	2,322			2,754			23			5,099
Total Revenues	2,662			2,754			23			5,439

Total Operating Expenses	7,866			2,775			11,701			22,342

Other (Revenues) Expenses
Gain on disposal of assets, net	(10,997		)	—			—			(10,997		)
Provision for credit losses, net	231			—			—			231
Equity loss from unconsolidated entities, net	236			—			—			236
Total Other (Revenues) Expenses	(10,530		)	—			—			(10,530		)

Total (Income) Costs and expenses, net	(2,664		)	2,775			11,701			11,812
Income (Loss) from continuing operations before income taxes	5,326			(21		)	(11,678		)	(6,373		)
Provision for income taxes	—			—			—			—
Loss from discontinued operations, net of tax	—			(1,344		)	—			(1,344		)
Net Income (Loss)	$	5,326		$	(1,365	)	$	(11,678	)	$	(7,717	)