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.

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.

Our operating segments reflect the distinct business activities from which revenues are earned and expenses incurred that are evaluated regularly by our executive management team in assessing performance and in deciding how to allocate resources. As of and for the three and six months ended June 30, 2019 and 2018, the Company’s reportable segments consisted of the following:

Hospitality and Entertainment Operations — Consists of revenues less direct operating expenses, depreciation and amortization relating to our hotel, spa, and food & beverage operations. This segment also reflects the carrying value of such assets and the related financing and operating obligations.

Mortgage and REO - Legacy Portfolio and Other Operations — Consists of the collection, workout and sale of new and legacy loans and REO assets, including financing of such asset sales, as well as the operating expenses (if any), carrying costs and other related expenses of such assets. This segment also includes operating properties that do not represent a strategic operating objective of the Company, such as Broadway Tower, and their rental revenue and tenant recoveries less direct property operating expenses (maintenance and repairs, real estate taxes, management fees, and other operating expenses), depreciation and amortization from commercial 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.

Condensed consolidated financial information for our reportable operating segments as of June 30, 2019 and December 31, 2018 and for the three and six months ended June 30, 2019 and 2018 is summarized as follows (in thousands):



	June 30,		December 31,
Balance Sheet Items	2019		2018
Total Assets
Mortgage and REO Legacy portfolio and other operations	$	81,744	$	67,658
Hospitality and entertainment operations	64,075		52,753
Corporate and other	11,219		23,228
Consolidated total	$	157,038	$	143,639

	Six Months Ended June 30,
Cash Flow Items	2019		2018
Expenditures for additions to long-lived assets
Mortgage and REO Legacy portfolio and other operations	$	—	$	1,421
Hospitality and entertainment operations	9,804		1,736
Corporate and other	23		24
Consolidated total	$	9,827	$	3,181



	Three Months Ended June 30, 2019
Income Statement Items	Mortgage and REO Legacy Portfolio and Other Operations			Hospitality and Entertainment Operations			Corporate and Other			Consolidated

Revenues
Operating property revenue	$	398		$	1,482		$	—		$	1,880
Mortgage loan income	447			—			—			447
Management fees, investment and other income	3			—			205			208
Total revenue	848			1,482			205			2,535

Total operating expenses	1,134			4,355			2,147			7,636

Other (income) expense
Gain on disposal of assets	(20		)	—			—			(20		)
Recovery of credit losses	(1,135		)	—			—			(1,135		)
Unrealized loss on derivatives	—			124			—			124
Total other (income) expense	(1,155		)	124			—			(1,031		)

Total costs and expense, net	(21		)	4,479			2,147			6,605
Income (loss) before income taxes	869			(2,997		)	(1,942		)	(4,070		)
(Provision for) benefit from income taxes	—			—			—			—
Net income (loss)	$	869		$	(2,997	)	$	(1,942	)	$	(4,070	)



	Three Months Ended June 30, 2018
Income Statement Items	Mortgage and REO Legacy Portfolio and Other Operations			Hospitality and Entertainment Operations			Corporate and Other			Consolidated

Revenues
Operating property revenue	$	—		$	2,105		$	—		$	2,105
Mortgage loan income	641			—			—			641
Management fees, investment and other income	—			242			13			255
Total revenue	641			2,347			13			3,001

Total operating expenses	556			3,019			2,240			5,815

Other (income) expense
Gain on disposal of assets, net	(142		)	—			—			(142		)
Recovery of credit losses	(175		)	—			—			(175		)
Total other income	(317		)	—			—			(317		)

Total costs and expense, net	239			3,019			2,240			5,498
Income (loss) from continuing operations, before income taxes	402			(672		)	(2,227		)	(2,497		)
(Provision for) benefit from income taxes	—			—			—			—
Net income (loss)	$	402		$	(672	)	$	(2,227	)	$	(2,497	)



	Six Months Ended June 30, 2019
Income Statement Items	Mortgage and REO Legacy Portfolio and Other Operations			Hospitality and Entertainment Operations			Corporate and Other			Consolidated

Revenues
Operating property revenue	$	398		$	1,795		$	—		$	2,193
Mortgage loan income	1,098			—			—			1,098
Management fees, investment and other income	5			—			271			276
Total revenue	1,501			1,795			271			3,567

Total operating expenses	1,625			7,404			4,485			13,514

Other (income) expense
Gain on Disposal of Assets, Net	(20		)	—			—			(20		)
Recovery of credit losses	(1,135		)	—			—			(1,135		)
Unrealized loss on derivatives	—			291			—			291
Total other (income) expense	(1,155		)	291			—			(864		)

Total costs and expense, net	470			7,695			4,485			12,650
Income (loss) before income taxes	1,031			(5,900		)	(4,214		)	(9,083		)
(Provision for) benefit from income taxes	—			—			—			—
Net income (loss)	$	1,031		$	(5,900	)	$	(4,214	)	$	(9,083	)



	Six Months Ended June 30, 2018
Income Statement Items	Mortgage and REO Legacy Portfolio and Other Operations			Hospitality and Entertainment Operations			Corporate and Other			Consolidated

Revenues
Operating property revenue	$	—		$	3,668		$	—		$	3,668
Mortgage loan income	1,266			—			—			1,266
Management fees, investment and other income	—			243			49			292
Total revenue	1,266			3,911			49			5,226

Total operating expenses	1,412			6,212			4,463			12,087

Other (income) expense
Gain on disposal of assets, net	(395		)	—			—			(395		)
Recovery of credit losses	(175		)	—			—			(175		)
Total other income	(570		)	—			—			(570		)

Total costs and expense, net	842			6,212			4,463			11,517
Income (loss) from continuing operations, before income taxes	424			(2,301		)	(4,414		)	(6,291		)
(Provision for) benefit from income taxes	—			—			—			—
Net income (loss)	$	424		$	(2,301	)	$	(4,414	)	$	(6,291	)