x | ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
¨ | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
DELAWARE | 13-3293645 |
(State or other jurisdiction of | (I.R.S. Employer |
Incorporation or organization) | Identification No.) |
Title of each class | | Name of each exchange on which registered |
Common Stock $.01 par value | | The NASDAQ Stock Market, LLC |
Large accelerated filer ¨ | Accelerated filer ¨ |
| |
Non-accelerated filer ¨ | Smaller reporting company x |
| | Page |
| PART I | |
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Item 1. | Business. | 4 |
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Item 1A. | Risk Factors. | 13 |
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Item 1B. | Unresolved Staff Comments. | 13 |
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Item 2. | Properties. | 13 |
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Item 3. | Legal Proceedings. | 18 |
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Item 4. | Mine Safety Disclosures. | 18 |
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| PART II | |
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Item 5. | Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities | 18 |
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Item 6. | Selected Financial Data. | 20 |
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Item 7. | Management’s Discussion and Analysis of Financial Condition and Results of Operations. | 20 |
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Item 7A. | Quantitative and Qualitative Disclosures About Market Risk. | 28 |
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Item 8. | Financial Statements and Supplementary Data. | 28 |
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Item 9. | Changes in and Disagreements with Accountants on Accounting and Financial Disclosure. | 57 |
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Item 9A. | Controls and Procedures. | 57 |
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Item 9B. | Other Information. | 57 |
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| PART III | |
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Item 10. | Directors, Executive Officers and Corporate Governance. | 58 |
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Item 11. | Executive Compensation. | 61 |
| | |
Item 12. | Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters. | 68 |
| | |
Item 13. | Certain Relationships and Related Transactions, and Director Independence. | 70 |
| | |
Item 14. | Principal Accounting Fees and Services | 71 |
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| PART IV | |
| | |
Item 15. | Exhibits, Financial Statement Schedules | 72 |
| | |
Signatures | | 75 |
| | Economic | | Physical | |
Property | | Occupancy | | Occupancy | |
1. Las Colinas,TX | | 76 | % | 94 | % |
2. Morris County, NJ | | 86 | % | 92 | % |
3. St. Louis, MO | | 79 | % | 89 | % |
4. Florence, KY | | 73 | % | 89 | % |
5. Austin, TX | | 82 | % | 96 | % |
6. Los Angeles, CA (1) | | 81 | % | 98 | % |
7. Los Angeles, CA (2) | | 70 | % | 93 | % |
8. Los Angeles, CA (3) | | 96 | % | 97 | % |
9. Los Angeles, CA (4) | | 85 | % | 90 | % |
10. Los Angeles, CA (5) | | 77 | % | 98 | % |
11. Los Angeles, CA (6) | | 76 | % | 94 | % |
12. Los Angeles, CA (7) | | 94 | % | 100 | % |
13. Los Angeles, CA (8) | | 86 | % | 98 | % |
14. Los Angeles, CA (9) | | 87 | % | 92 | % |
15. Los Angeles, CA (10) | | 92 | % | 98 | % |
16. Los Angeles, CA (11) | | 93 | % | 97 | % |
17. Marina del Rey, CA (12) | | 75 | % | 88 | % |
Fiscal 2013 | | High | | Low | | ||
| | | | | | | |
First Quarter (7/ 1 to 9/30) | | $ | 24.00 | | $ | 21.91 | |
Second Quarter (10/1 to 12/31) | | $ | 23.81 | | $ | 18.01 | |
Third Quarter (1/1 to 3/31) | | $ | 23.90 | | $ | 19.91 | |
Fourth Quarter (4/1 to 6/30) | | $ | 23.50 | | $ | 20.00 | |
Fiscal 2012 | | | | | | | |
| | | | | | | |
First Quarter (7/ 1 to 9/30) | | $ | 27.45 | | $ | 21.04 | |
Second Quarter (10/1 to 12/31) | | $ | 22.05 | | $ | 17.26 | |
Third Quarter (1/1 to 3/31) | | $ | 20.75 | | $ | 17.51 | |
Fourth Quarter (4/1 to 6/30) | | $ | 24.95 | | $ | 18.15 | |
| | | | | | (c) Total Number | | (d) Maximum Number | |
| | (a) Total | | (b) | | of Shares Purchased | | of shares that May | |
Fiscal | | Number of | | Average | | as Part of Publicly | | Yet be Purchased | |
2013 | | Shares | | Price Paid | | Announced Plans | | Under the Plans | |
Period | | Purchased | | Per Share | | or Programs | | or Programs | |
| | | | | | | | | |
Month #1 | | | | | | | | | |
(April 1- | | - | | - | | - | | 100,872 | |
April 30) | | | | | | | | | |
| | | | | | | | | |
Month #2 | | | | | | | | | |
(May 1- | | 1,522 | | $19.00 | | 1,522 | | 99,350 | |
May 31) | | | | | | | | | |
| | | | | | | | | |
Month #3 | | | | | | | | | |
(June 1- | | 1,012 | | $18.75 | | 1,012 | | 98,338 | |
June 30) | | | | | | | | | |
| | | | | | | | | |
TOTAL: | | 2,534 | | $18.93 | | 2,534 | | 98,338 | |
For the years ended June 30, | | 2013 | | 2012 | | ||
Hotel revenues: | | | | | | | |
Hotel rooms | | $ | 36,378,000 | | $ | 32,893,000 | |
Food and beverage | | | 6,617,000 | | | 5,779,000 | |
Garage | | | 2,786,000 | | | 2,765,000 | |
Other operating departments | | | 784,000 | | | 1,025,000 | |
Total hotel revenues | | | 46,565,000 | | | 42,462,000 | |
Operating expenses excluding interest, depreciation and amortization | | | (38,635,000) | | | (33,465,000) | |
Operating income before interest, depreciation and amortization | | | 7,930,000 | | | 8,997,000 | |
Interest | | | (2,612,000) | | | (2,724,000) | |
Depreciation and amortization | | | (2,454,000) | | | (2,360,000) | |
| | | | | | | |
Income from hotel operations | | $ | 2,864,000 | | $ | 3,913,000 | |
Fiscal Year ended June 30, | | Average Daily Rate | | Average Occupancy % | | | RevPar | | ||
| | | | | | | | | | |
2013 | | $ | 205 | | 90 | % | | $ | 184 | |
2012 | | $ | 191 | | 87 | % | | $ | 166 | |
As of June 30, 2013 | | | | | % of Total | |
| | | | | Investment | |
Industry Group | | Fair Value | | Securities | | |
| | | | | | |
Basic materials | | $ | 4,733,000 | | 37.5 | % |
Technology | | | 2,698,000 | | 21.4 | % |
Financial services | | | 2,261,000 | | 17.9 | % |
REITs and real estate companies | | | 878,000 | | 7.0 | % |
Other | | | 2,054,000 | | 16.2 | % |
| | $ | 12,624,000 | | 100.0 | % |
As of June 30, 2012 | | | | | % of Total | |
| | | | | Investment | |
Industry Group | | Fair Value | | Securities | | |
| | | | | | |
Basic materials | | $ | 4,706,000 | | 52.4 | % |
Technology | | | 1,203,000 | | 13.4 | % |
REITs and real estate companies | | | 866,000 | | 9.6 | % |
Financial services | | | 743,000 | | 8.3 | % |
Other | | | 1,463,000 | | 16.3 | % |
| | $ | 8,981,000 | | 100.0 | % |
For the years ended June 30, | | 2013 | | 2012 | | ||
Net loss on marketable securities | | $ | (856,000) | | $ | (4,444,000) | |
Net unrealized loss on other investments | | | (216,000) | | | (436,000) | |
Impairment loss on other investments | | | (105,000) | | | (917,000) | |
Dividend and interest income | | | 1,082,000 | | | 1,251,000 | |
Margin interest expense | | | (635,000) | | | (587,000) | |
Trading and management expenses | | | (1,073,000) | | | (1,058,000) | |
| | $ | (1,803,000) | | $ | (6,191,000) | |
| | Total | | Year 1 | | Year 2 | | Year 3 | | Year 4 | | Year 5 | | Thereafter | | |||||||
Mortgage notes payable | | $ | 116,925,000 | | $ | 2,509,000 | | $ | 7,727,000 | | $ | 42,970,000 | | $ | 1,598,000 | | $ | 1,669,000 | | $ | 60,452,000 | |
Other notes payable | | | 1,595,000 | | | 1,392,000 | | | 60,000 | | | 45,000 | | | 51,000 | | | 47,000 | | | - | |
Interest | | | 31,228,000 | | | 5,794,000 | | | 5,353,000 | | | 3,375,000 | | | 2,792,000 | | | 2,713,000 | | | 11,201,000 | |
Total | | $ | 149,748,000 | | $ | 9,695,000 | | $ | 13,140,000 | | $ | 46,390,000 | | $ | 4,441,000 | | $ | 4,429,000 | | $ | 71,653,000 | |
INDEX TO CONSOLIDATED FINANCIAL STATEMENTS | | PAGE |
| | |
Report of Independent Registered Public Accounting Firm | | 29 |
| | |
Consolidated Balance Sheets - June 30, 2013 and 2012 | | 30 |
| | |
Consolidated Statements of Operations - For years ended June 30, 2013 and 2012 | | 31 |
| | |
Consolidated Statements of Shareholders’ Equity - For years ended June 30, 2013 and 2012 | | 32 |
| | |
Consolidated Statements of Cash Flows - For years ended June 30, 2013 and 2012 | | 33 |
| | |
Notes to the Consolidated Financial Statements | | 34 |
As of June 30, | | 2013 | | 2012 | | ||
| | | | | | | |
ASSETS | | | | | | | |
Investment in hotel, net | | $ | 41,728,000 | | $ | 40,678,000 | |
Investment in real estate, net | | | 65,262,000 | | | 65,051,000 | |
Investment in marketable securities | | | 12,624,000 | | | 8,981,000 | |
Other investments, net | | | 15,280,000 | | | 15,661,000 | |
Cash and cash equivalents | | | 1,453,000 | | | 2,100,000 | |
Restricted cash | | | 2,448,000 | | | 1,977,000 | |
Other assets, net | | | 5,891,000 | | | 5,373,000 | |
| | | | | | | |
Total assets | | $ | 144,686,000 | | $ | 139,821,000 | |
| | | | | | | |
LIABILITIES AND SHAREHOLDERS' EQUITY | | | | | | | |
Liabilities: | | | | | | | |
Accounts payable and other liabilities | | $ | 3,666,000 | | $ | 3,628,000 | |
Accounts payable and other liabilities - hotel | | | 8,804,000 | | | 8,119,000 | |
Due to securities broker | | | 2,762,000 | | | 1,729,000 | |
Obligations for securities sold | | | 2,565,000 | | | 731,000 | |
Other notes payable | | | 1,595,000 | | | 2,072,000 | |
Mortgage notes payable - hotel | | | 43,413,000 | | | 44,321,000 | |
Mortgage notes payable - real estate | | | 73,512,000 | | | 70,654,000 | |
Deferred income taxes | | | 4,617,000 | | | 4,981,000 | |
Total liabilities | | | 140,934,000 | | | 136,235,000 | |
| | | | | | | |
Commitments and contingencies | | | | | | | |
| | | | | | | |
Shareholders' equity: | | | | | | | |
Preferred stock, $.01 par value, 100,000 shares authorized; none issued | | | - | | | - | |
Common stock, $.01 par value, 4,000,000 shares authorized; 3,363,361 and 3,346,588 issued; 2,361,835 and 2,347,596 outstanding, respectively | | | 33,000 | | | 33,000 | |
Additional paid-in capital | | | 9,714,000 | | | 9,417,000 | |
Retained earnings | | | 9,899,000 | | | 10,614,000 | |
Treasury stock, at cost, 1,001,526 and 998,992 shares | | | (11,813,000) | | | (11,757,000) | |
Total InterGroup shareholders' equity | | | 7,833,000 | | | 8,307,000 | |
Noncontrolling interest | | | (4,081,000) | | | (4,721,000) | |
Total shareholders' equity | | | 3,752,000 | | | 3,586,000 | |
| | | | | | | |
Total liabilities and shareholders' equity | | $ | 144,686,000 | | $ | 139,821,000 | |
For the years ended June 30, | | 2013 | | 2012 | | ||
Revenues: | | | | | | | |
Hotel | | $ | 46,565,000 | | $ | 42,462,000 | |
Real estate | | | 15,474,000 | | | 14,537,000 | |
Total revenues | | | 62,039,000 | | | 56,999,000 | |
Costs and operating expenses: | | | | | | | |
Hotel operating expenses | | | (38,635,000) | | | (33,465,000) | |
Real estate operating expenses | | | (8,529,000) | | | (7,885,000) | |
Depreciation and amortization expense | | | (4,577,000) | | | (4,446,000) | |
General and administrative expense | | | (1,949,000) | | | (1,844,000) | |
| | | | | | | |
Total costs and operating expenses | | | (53,690,000) | | | (47,640,000) | |
| | | | | | | |
Income from operations | | | 8,349,000 | | | 9,359,000 | |
Other income (expense): | | | | | | | |
Interest expense | | | (6,168,000) | | | (6,221,000) | |
Net loss on marketable securities | | | (856,000) | | | (4,444,000) | |
Net unrealized loss on other investments and derivatives | | | (216,000) | | | (436,000) | |
Impairment loss on other investments | | | (105,000) | | | (917,000) | |
Dividend and interest income | | | 1,082,000 | | | 1,251,000 | |
Trading and margin interest expense | | | (1,708,000) | | | (1,645,000) | |
Net other expense | | | (7,971,000) | | | (12,412,000) | |
| | | | | | | |
Income (loss) before income taxes | | | 378,000 | | | (3,053,000) | |
Income tax benefit | | | 247,000 | | | 1,481,000 | |
Income (loss) from continuing operations | | | 625,000 | | | (1,572,000) | |
Discontinued operations: | | | | | | | |
Income from discontinued operations | | | - | | | 59,000 | |
Gain on the sale of real estate | | | - | | | 1,710,000 | |
Income tax expense | | | - | | | (868,000) | |
Income from discontinued operations | | | - | | | 901,000 | |
Net income (loss) | | | 625,000 | | | (671,000) | |
Less: Net income attributable to the noncontrolling interest | | | (1,340,000) | | | (1,656,000) | |
Net loss attributable to InterGroup | | $ | (715,000) | | $ | (2,327,000) | |
| | | | | | | |
Net income (loss) per share from continuing operations | | | | | | | |
Basic | | $ | 0.27 | | $ | (0.66) | |
Diluted | | $ | 0.26 | | $ | (0.66) | |
Net income per share from discontinued operations | | | | | | | |
Basic | | $ | - | | $ | 0.38 | |
Diluted | | $ | - | | $ | 0.38 | |
Net loss per share attributable to InterGroup | | | | | | | |
Basic | | $ | (0.30) | | $ | (0.97) | |
Diluted | | $ | (0.30) | | $ | (0.97) | |
| | | | | | | |
Weighted average number of common shares outstanding | | | 2,354,990 | | | 2,389,659 | |
Weighted average number of diluted common shares outstanding | | | 2,407,128 | | | 2,389,659 | |
| | | | | | | | Additional | | | | | | | | InterGroup | | | | | Total | | |||
| | Common Stock | | Paid-in | | Retained | | Treasury | | Shareholders' | | Noncontrolling | | Shareholders' | | ||||||||||
| | Shares | | Amount | | Capital | | Earnings | | Stock | | Equity | | Interest | | Equity | | ||||||||
| | | | | | | | | | | | | | | | | | | | | | | | | |
Balance at June 30, 2011 | | | 3,322,172 | | $ | 33,000 | | $ | 9,371,000 | | $ | 12,941,000 | | $ | (10,299,000) | | $ | 12,046,000 | | $ | (5,544,000) | | $ | 6,502,000 | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
Net (loss) income | | | - | | | - | | | - | | | (2,327,000) | | | - | | | (2,327,000) | | | 1,656,000 | | | (671,000) | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
Issuance of stock | | | 3,532 | | | - | | | 88,000 | | | - | | | - | | | 88,000 | | | - | | | 88,000 | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
Conversion of RSU to stock | | | 20,884 | | | - | | | - | | | - | | | - | | | - | | | - | | | - | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
Stock options expense | | | - | | | - | | | 241,000 | | | - | | | - | | | 241,000 | | | - | | | 241,000 | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
Investment in Santa Fe | | | - | | | - | | | (239,000) | | | - | | | - | | | (239,000) | | | (232,000) | | | (471,000) | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
Investment in Portsmouth | | | - | | | - | | | (44,000) | | | - | | | - | | | (44,000) | | | (101,000) | | | (145,000) | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
Purchase of treasury stock | | | - | | | - | | | - | | | - | | | (1,458,000) | | | (1,458,000) | | | - | | | (1,458,000) | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
Distributions to noncontrolling interest | | | | | | - | | | - | | | - | | | - | | | - | | | (500,000) | | | (500,000) | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
Balance at June 30, 2012 | | | 3,346,588 | | | 33,000 | | | 9,417,000 | | | 10,614,000 | | | (11,757,000) | | | 8,307,000 | | | (4,721,000) | | | 3,586,000 | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
Net (loss) income | | | - | | | - | | | - | | | (715,000) | | | - | | | (715,000) | | | 1,340,000 | | | 625,000 | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
Issuance of stock | | | 3,528 | | | - | | | 88,000 | | | - | | | - | | | 88,000 | | | - | | | 88,000 | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
Issuance of stock related to stock options exercised | | | 5,000 | | | - | | | 52,000 | | | - | | | - | | | 52,000 | | | - | | | 52,000 | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
Conversion of RSU to stock | | | 8,245 | | | - | | | - | | | - | | | - | | | - | | | - | | | - | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
Stock options expense | | | - | | | - | | | 324,000 | | | - | | | - | | | 324,000 | | | - | | | 324,000 | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
Investment in Santa Fe | | | - | | | - | | | (105,000) | | | - | | | - | | | (105,000) | | | (51,000) | | | (156,000) | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
Investment in Portsmouth | | | - | | | - | | | (62,000) | | | - | | | - | | | (62,000) | | | (13,000) | | | (75,000) | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
Purchase of treasury stock | | | - | | | - | | | - | | | - | | | (56,000) | | | (56,000) | | | - | | | (56,000) | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
Distributions to noncontrolling interest | | | | | | - | | | - | | | - | | | - | | | - | | | (600,000) | | | (600,000) | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
Dividends to noncontrolling interest | | | | | | - | | | - | | | - | | | - | | | - | | | (36,000) | | | (36,000) | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
Balance at June 30, 2013 | | | 3,363,361 | | $ | 33,000 | | $ | 9,714,000 | | $ | 9,899,000 | | $ | (11,813,000) | | $ | 7,833,000 | | $ | (4,081,000) | | $ | 3,752,000 | |
For the years ended June 30, | | 2013 | | 2012 | | ||
Cash flows from operating activities: | | | | | | | |
Net income (loss) | | $ | 625,000 | | $ | (671,000) | |
Adjustments to reconcile net income (loss) to net cash provided by operating activities: | | | | | | | |
Depreciation and amortization | | | 4,577,000 | | | 4,471,000 | |
Gain on sale of real estate | | | - | | | (1,710,000) | |
Net unrealized loss on marketable securities | | | 1,003,000 | | | 1,816,000 | |
Unrealized loss on other investments and derivative instruments | | | 216,000 | | | 436,000 | |
Impairment loss on other investments | | | 105,000 | | | 917,000 | |
Gain on insurance recovery | | | (404,000) | | | - | |
Stock compensation expense | | | 412,000 | | | 329,000 | |
Changes in assets and liabilities: | | | | | | | |
Investment in marketable securities | | | (4,646,000) | | | 8,641,000 | |
Other assets, net | | | (536,000) | | | (732,000) | |
Accounts payable and other liabilities | | | 723,000 | | | 7,000 | |
Due to securities broker | | | 1,033,000 | | | (7,725,000) | |
Obligations for securities sold | | | 1,834,000 | | | 57,000 | |
Deferred taxes | | | (364,000) | | | (613,000) | |
Net cash provided by operating activities | | | 4,578,000 | | | 5,223,000 | |
| | | | | | | |
Cash flows from investing activities: | | | | | | | |
Proceeds from sale of real estate | | | - | | | 4,111,000 | |
Investment in hotel, net | | | (3,486,000) | | | (2,818,000) | |
Investment in real estate, net | | | (1,930,000) | | | (293,000) | |
Other investments, net | | | 60,000 | | | 271,000 | |
Investment in Santa Fe | | | (156,000) | | | (471,000) | |
Investment in Portsmouth | | | (75,000) | | | (145,000) | |
Change in restricted cash | | | (471,000) | | | 171,000 | |
Net cash (used in) provided by investing activities | | | (6,058,000) | | | 826,000 | |
| | | | | | | |
Cash flows from financing activities: | | | | | | | |
Distributions and dividends to noncontrolling interest | | | (636,000) | | | (500,000) | |
Borrowings from mortgage notes payable | | | 39,240,000 | | | 2,095,000 | |
Principal payments on mortgage notes payable | | | (37,290,000) | | | (4,736,000) | |
Payments on other notes payable | | | (477,000) | | | (714,000) | |
Purchase of treasury stock | | | (56,000) | | | (1,458,000) | |
Proceeds from exercise of options | | | 52,000 | | | - | |
Net cash provided by (used in) financing activities | | | 833,000 | | | (5,313,000) | |
| | | | | | | |
Net (decrease) increase in cash and cash equivalents | | | (647,000) | | | 736,000 | |
Cash and cash equivalents at the beginning of the year | | | 2,100,000 | | | 1,364,000 | |
Cash and cash equivalents at the end of the year | | $ | 1,453,000 | | $ | 2,100,000 | |
| | | | | | | |
Supplemental information: | | | | | | | |
Income tax paid | | $ | 327,000 | | $ | 159,000 | |
Interest paid | | $ | 6,803,000 | | $ | 6,830,000 | |
| | | | | Accumulated | | Net Book | | ||
June 30, 2013 | | Cost | | Depreciation | | Value | | |||
| | | | | | | | | | |
Land | | $ | 2,738,000 | | $ | - | | $ | 2,738,000 | |
Furniture and equipment | | | 22,271,000 | | | (19,310,000) | | | 2,961,000 | |
Building and improvements | | | 58,875,000 | | | (22,846,000) | | | 36,029,000 | |
| | $ | 83,884,000 | | $ | (42,156,000) | | $ | 41,728,000 | |
| | | | | Accumulated | | Net Book | | ||
June 30, 2012 | | Cost | | Depreciation | | Value | | |||
| | | | | | | | | | |
Land | | $ | 2,738,000 | | $ | - | | $ | 2,738,000 | |
Furniture and equipment | | | 20,856,000 | | | (18,185,000) | | | 2,671,000 | |
Building and improvements | | | 56,909,000 | | | (21,640,000) | | | 35,269,000 | |
| | $ | 80,503,000 | | $ | (39,825,000) | | $ | 40,678,000 | |
As of June 30, | | 2013 | | 2012 | | ||
Land | | $ | 25,781,000 | | $ | 25,781,000 | |
Buildings, improvements and equipment | | | 73,453,000 | | | 71,119,000 | |
Accumulated depreciation | | | (33,972,000) | | | (31,849,000) | |
| | $ | 65,262,000 | | $ | 65,051,000 | |
For the years ended June 30, | | 2012 | | |
Revenues | | $ | 208,000 | |
Expenses | | | (149,000) | |
Income from discontinued operations | | $ | 59,000 | |
| | | | | Gross | | Gross | | Net | | Fair | | ||||
Investment | | Cost | | Unrealized Gain | | Unrealized Loss | | Unrealized Gain | | Value | | |||||
| | | | | | | | | | | | | | | | |
As of June 30, 2013 | | | | | | | | | | | | | | | | |
Corporate Equities | | $ | 11,314,000 | | $ | 3,391,000 | | $ | (2,081,000) | | $ | 1,310,000 | | $ | 12,624,000 | |
| | | | | | | | | | | | | | | | |
As of June 30, 2012 | | | | | | | | | | | | | | | | |
Corporate Equities | | $ | 7,181,000 | | $ | 3,797,000 | | $ | (1,997,000) | | $ | 1,800,000 | | $ | 8,981,000 | |
For the year ended June 30, | | 2013 | | 2012 | | ||
Realized gain (loss) on marketable securities | | $ | 147,000 | | $ | (2,628,000) | |
Unrealized loss on marketable securities | | | (1,003,000) | | | (1,816,000) | |
| | | | | | | |
Net loss on marketable securities | | $ | (856,000) | | $ | (4,444,000) | |
Type | | June 30, 2013 | | June 30, 2012 | | ||
Preferred stock - Comstock, at cost | | $ | 13,231,000 | | $ | 13,231,000 | |
Private equity hedge fund, at cost | | | 1,774,000 | | | 1,879,000 | |
Corporate debt and equity instruments, at cost | | | 269,000 | | | 269,000 | |
Warrants - at fair value | | | 6,000 | | | 282,000 | |
| | $ | 15,280,000 | | $ | 15,661,000 | |
As of June 30, 2013 | | Level 1 | | Level 2 | | Level 3 | | Total | | ||||
Assets: | | | | | | | | | | | | | |
Cash equivalents - money market | | $ | 3,000 | | $ | - | | $ | - | | $ | 3,000 | |
Restricted cash | | | 2,448,000 | | | - | | | - | | | 2,448,000 | |
Other investments - warrants | | | | | | - | | | 6,000 | | | 6,000 | |
Investment in marketable securities: | | | | | | | | | | | | | |
Basic materials | | | 4,733,000 | | | - | | | - | | | 4,733,000 | |
Technology | | | 2,698,000 | | | - | | | - | | | 2,698,000 | |
Financial services | | | 2,261,000 | | | - | | | - | | | 2,261,000 | |
REITs and real estate companies | | | 878,000 | | | - | | | - | | | 878,000 | |
Other | | | 2,054,000 | | | - | | | - | | | 2,054,000 | |
| | | 12,624,000 | | | - | | | - | | | 12,624,000 | |
| | $ | 15,075,000 | | $ | - | | $ | 6,000 | | $ | 15,081,000 | |
As of June 30, 2012 | | Level 1 | | Level 2 | | Level 3 | | Total | | ||||
Assets: | | | | | | | | | | | | | |
Cash equivalents - money market | | $ | 3,000 | | $ | - | | $ | - | | $ | 3,000 | |
Restricted cash | | | 1,977,000 | | | - | | | - | | | 1,977,000 | |
Other investments - warrants | | | | | | - | | | 282,000 | | | 282,000 | |
Investment in marketable securities: | | | | | | | | | | | | | |
Basic materials | | | 4,706,000 | | | - | | | - | | | 4,706,000 | |
Technology | | | 1,203,000 | | | - | | | - | | | 1,203,000 | |
REITs and real estate companies | | | 866,000 | | | - | | | - | | | 866,000 | |
Financial services | | | 743,000 | | | - | | | - | | | 743,000 | |
Other | | | 1,463,000 | | | - | | | - | | | 1,463,000 | |
| | | 8,981,000 | | | - | | | - | | | 8,981,000 | |
| | $ | 10,961,000 | | $ | - | | $ | 282,000 | | $ | 11,243,000 | |
Liabilities: | | | | | | | | | | | | | |
Interest rate swap | | $ | - | | $ | 60,000 | | $ | - | | $ | 60,000 | |
| | | | | | | | | | | | | | Net loss for the year | | |
Assets | | Level 1 | | Level 2 | | Level 3 | | June 30, 2013 | | ended June 30, 2013 | | |||||
| | | | | | | | | | | | | | | | |
Other non-marketable investments | | $ | - | | $ | - | | $ | 15,274,000 | | $ | 15,274,000 | | $ | (105,000) | |
| | | | | | | | | | | | | | Net loss for the year | | |
Assets | | Level 1 | | Level 2 | | Level 3 | | June 30, 2012 | | ended June 30, 2012 | | |||||
| | | | | | | | | | | | | | | | |
Other non-marketable investments | | $ | - | | $ | - | | $ | 15,379,000 | | $ | 15,379,000 | | $ | (917,000) | |
| | 2013 | | 2012 | | ||
Accounts receivable, net | | $ | 1,957,000 | | $ | 1,641,000 | |
Prepaid expenses | | | 581,000 | | | 945,000 | |
Inventory - hotel | | | 918,000 | | | 907,000 | |
Miscellaneous assets, net | | | 2,435,000 | | | 1,880,000 | |
| | | | | | | |
Total other assets | | $ | 5,891,000 | | $ | 5,373,000 | |
| | As of June 30, 2013 | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | |
| | Number | | Note | | Note | | | | | | | | ||
Property | | of Units | | Origination Date | | Maturity Date | | Mortgage Balance | | Interest Rate | | | |||
| | | | | | | | | | | | | | | |
SF Hotel | | 543 rooms | | July | 2005 | | August | 2015 | | $ | 26,043,000 | | 5.22 | % | |
SF Hotel | | 543 rooms | | March | 2005 | | August | 2015 | | | 17,370,000 | | 6.42 | % | |
| | | | | | | | | | | | | | | |
| | | | Mortgage notes payable hotel | | | $ | 43,413,000 | | | | | |||
| | | | | | | | | | | | | | | |
Austin | | 249 | | June | 2003 | | July | 2023 | | $ | 6,694,000 | | 5.46 | % | |
Florence | | 157 | | June | 2005 | | July | 2014 | | | 3,802,000 | | 4.96 | % | |
Las Colinas | | 358 | | November | 2012 | | December | 2022 | | | 19,326,000 | | 3.73 | % | |
Morris County | | 151 | | July | 2012 | | July | 2022 | | | 10,556,000 | | 3.51 | % | |
St. Louis | | 264 | | May | 2013 | | May | 2023 | | | 6,045,000 | | 4.05 | % | |
Los Angeles | | 4 | | September | 2012 | | September | 2042 | | | 390,000 | | 4.25 | % | |
Los Angeles | | 2 | | September | 2012 | | September | 2042 | | | 395,000 | | 4.25 | % | |
Los Angeles | | 1 | | August | 2012 | | September | 2042 | | | 425,000 | | 4.25 | % | |
Los Angeles | | 31 | | January | 2010 | | December | 2020 | | | 5,570,000 | | 4.85 | % | |
Los Angeles | | 30 | | August | 2007 | | September | 2022 | | | 6,505,000 | | 5.97 | % | |
Los Angeles | | 27 | | November | 2010 | | December | 2020 | | | 3,138,000 | | 4.85 | % | |
Los Angeles | | 14 | | April | 2011 | | March | 2021 | | | 1,805,000 | | 5.89 | % | |
Los Angeles | | 12 | | December | 2011 | | January | 2022 | | | 2,045,000 | | 4.25 | % | |
Los Angeles | | 9 | | April | 2011 | | May | 2021 | | | 1,447,000 | | 5.60 | % | |
Los Angeles | | 9 | | April | 2011 | | March | 2021 | | | 1,230,000 | | 5.89 | % | |
Los Angeles | | 8 | | May | 2001 | | November | 2029 | | | 466,000 | | 2.49 | % | |
Los Angeles | | 7 | | August | 2012 | | September | 2042 | | | 967,000 | | 3.85 | % | |
Los Angeles | | 4 | | August | 2012 | | September | 2042 | | | 661,000 | | 3.85 | % | |
Los Angeles | | 1 | | September | 2012 | | September | 2042 | | | 453,000 | | 4.25 | % | |
Los Angeles | | Office | | March | 2009 | | March | 2014 | | | 1,036,000 | | 5.02 | % | |
Los Angeles | | Office | | September | 2000 | | December | 2013 | | | 556,000 | | 6.00 | % | |
| | | | | | | | | | | | | | | |
| | | | Mortgage notes payable - real estate | | | $ | 73,512,000 | | | | |
| | As of June 30, 2012 | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | |
| | Number | | Note | | Note | | | | | | | | ||
Property | | of Units | | Origination Date | | Maturity Date | | Mortgage Balance | | Interest Rate | | | |||
| | | | | | | | | | | | | | | |
SF Hotel | | 543 rooms | | July | 2005 | | August | 2015 | | $ | 26,599,000 | | 5.22 | % | |
SF Hotel | | 543 rooms | | March | 2005 | | August | 2015 | | | 17,722,000 | | 6.42 | % | |
| | | | | | | | | | | | | | | |
| | | | Mortgage notes payable - hotel | | | $ | 44,321,000 | | | | | |||
| | | | | | | | | | | | | | | |
Austin | | 249 | | June | 2003 | | July | 2023 | | $ | 6,872,000 | | 5.46 | % | |
Florence | | 157 | | June | 2005 | | July | 2014 | | | 3,878,000 | | 4.96 | % | |
Las Colinas | | 358 | | April | 2004 | | May | 2013 | | | 17,671,000 | | 4.99 | % | |
Morris County | | 151 | | April | 2003 | | May | 2013 | | | 9,010,000 | | 5.43 | % | |
St. Louis | | 264 | | May | 2008 | | May | 2013 | | | 5,770,000 | | 4.95 | % | |
Los Angeles | | 4 | | September | 2000 | | August | 2030 | | | 381,000 | | 7.59 | % | |
Los Angeles | | 2 | | January | 2002 | | January | 2032 | | | 388,000 | | 6.45 | % | |
Los Angeles | | 1 | | February | 2001 | | December | 2030 | | | 417,000 | | 8.44 | % | |
Los Angeles | | 31 | | January | 2010 | | December | 2020 | | | 5,660,000 | | 4.85 | % | |
Los Angeles | | 30 | | August | 2007 | | September | 2022 | | | 6,605,000 | | 5.97 | % | |
Los Angeles | | 27 | | November | 2010 | | December | 2020 | | | 3,189,000 | | 4.85 | % | |
Los Angeles | | 14 | | April | 2011 | | March | 2021 | | | 1,829,000 | | 5.89 | % | |
Los Angeles | | 12 | | December | 2011 | | January | 2022 | | | 2,081,000 | | 4.25 | % | |
Los Angeles | | 9 | | April | 2011 | | May | 2021 | | | 1,467,000 | | 5.60 | % | |
Los Angeles | | 9 | | April | 2011 | | March | 2021 | | | 1,247,000 | | 5.89 | % | |
Los Angeles | | 8 | | May | 2001 | | November | 2029 | | | 486,000 | | 2.49 | % | |
Los Angeles | | 7 | | November | 2003 | | December | 2018 | | | 945,000 | | 6.38 | % | |
Los Angeles | | 4 | | November | 2003 | | December | 2018 | | | 643,000 | | 6.38 | % | |
Los Angeles | | 1 | | October | 2003 | | November | 2033 | | | 445,000 | | 4.50 | % | |
Los Angeles | | Office | | March | 2009 | | March | 2014 | | | 1,078,000 | | 5.02 | % | |
Los Angeles | | Office | | September | 2000 | | December | 2013 | | | 592,000 | | 6.00 | % | |
| | | | | | | | | | | | | | | |
| | | | Mortgage notes payable - real estate | | | $ | 70,654,000 | | | | |
For the year ending June 30, | | | | |
2014 | | $ | 3,901,000 | |
2015 | | | 7,787,000 | |
2016 | | | 43,015,000 | |
2017 | | | 1,649,000 | |
2018 | | | 1,716,000 | |
Thereafter | | | 60,452,000 | |
| | $ | 118,520,000 | |
For the years ended June 30, | | 2013 | | | 2012 | | |||||||
| | Continuing | | Continuing | | Discontinued | | | | | |||
| | Operations | | Operations | | Operations | | Total | | ||||
Federal | | | | | | | | | | | | | |
Current tax expense | | $ | (62,000) | | $ | (284,000) | | $ | - | | $ | (284,000) | |
Deferred tax benefit (expense) | | | 183,000 | | | 1,847,000 | | | (799,000) | | | 1,048,000 | |
| | | 121,000 | | | 1,563,000 | | | (799,000) | | | 764,000 | |
State | | | | | | | | | | | | | |
Current tax expense | | | (54,000) | | | (97,000) | | | (12,000) | | | (109,000) | |
Deferred tax benefit (expense) | | | 180,000 | | | 15,000 | | | (57,000) | | | (42,000) | |
| | | 126,000 | | | (82,000) | | | (69,000) | | | (151,000) | |
| | $ | 247,000 | | $ | 1,481,000 | | $ | (868,000) | | $ | 613,000 | |
For the years ended June 30, | | 2013 | | 2012 | | ||
| | | | | | | |
Statutory federal tax rate | | $ | (129,000) | | $ | (1,236,000) | |
State income taxes, net of federal tax benefit | | | 69,000 | | | (44,000) | |
Dividend received deduction | | | 255,000 | | | (292,000) | |
Noncontrolling interest | | | 450,000 | | | (635,000) | |
Valuation allowance | | | (397,000) | | | 547,000 | |
Other | | | (1,000) | | | 179,000 | |
| | $ | 247,000 | | $ | (1,481,000) | |
| | June 30, 2013 | | June 30, 2012 | | ||
Deferred tax assets: | | | | | | | |
Net operating loss carryforwards | | $ | 8,625,000 | | $ | 8,980,000 | |
Capital loss carryforwards | | | 896,000 | | | 192,000 | |
Investment impairment reserve | | | 1,541,000 | | | 2,049,000 | |
Accruals and reserves | | | 886,000 | | | 668,000 | |
Valuation allowance | | | (1,695,000) | | | (1,298,000) | |
| | | 10,253,000 | | | 10,591,000 | |
Deferred tax liabilities: | | | | | | | |
Deferred gains on real estate sale | | | (9,612,000) | | | (9,648,000) | |
Unrealized gains on marketable securities | | | (3,804,000) | | | (4,254,000) | |
Depreciation and amortization | | | 528,000 | | | (315,000) | |
Equity earnings | | | (1,816,000) | | | (1,266,000) | |
State taxes | | | (166,000) | | | (89,000) | |
| | | (14,870,000) | | | (15,572,000) | |
Net deferred tax liability | | $ | (4,617,000) | | $ | (4,981,000) | |
| | Federal | | State | | ||
InterGroup | | $ | 4,786,000 | | $ | 1,728,000 | |
Santa Fe | | | 6,767,000 | | | 3,271,000 | |
Portsmouth | | | 10,700,000 | | | 8,828,000 | |
| | $ | 22,253,000 | | $ | 13,827,000 | |
As of and for the year | | Hotel | | Real Estate | | Investment | | | | | | | | Discontinued | | | | | ||||
ended June 30, 2013 | | Operations | | Operations | | Transactions | | Other | | Subtotal | | Operations | | Total | | |||||||
Revenues | | $ | 46,565,000 | | $ | 15,474,000 | | $ | - | | $ | - | | $ | 62,039,000 | | $ | - | | $ | 62,039,000 | |
Segment operating expenses | | | (38,635,000) | | | (8,529,000) | | | - | | | (1,949,000) | | | (49,113,000) | | | - | | | (49,113,000) | |
Segment income (loss) from operations | | | 7,930,000 | | | 6,945,000 | | | - | | | (1,949,000) | | | 12,926,000 | | | | | | 12,926,000 | |
Interest expense | | | (2,612,000) | | | (3,556,000) | | | - | | | - | | | (6,168,000) | | | - | | | (6,168,000) | |
Depreciation and amortization expense | | | (2,454,000) | | | (2,123,000) | | | - | | | - | | | (4,577,000) | | | - | | | (4,577,000) | |
Loss from investments | | | - | | | - | | | (1,803,000) | | | - | | | (1,803,000) | | | - | | | (1,803,000) | |
Income tax benefit | | | - | | | - | | | - | | | 247,000 | | | 247,000 | | | - | | | 247,000 | |
Net income (loss) | | $ | 2,864,000 | | $ | 1,266,000 | | $ | (1,803,000) | | $ | (1,702,000) | | $ | 625,000 | | $ | - | | $ | 625,000 | |
Total assets | | $ | 41,728,000 | | $ | 65,262,000 | | $ | 27,904,000 | | $ | 9,792,000 | | $ | 144,686,000 | | $ | - | | $ | 144,686,000 | |
| | | | | | | | | | | | | | | | | | | | | | |
As of and for the year | | Hotel | | Real Estate | | Investment | | | | | | | | Discontinued | | | | | ||||
ended June 30, 2012 | | Operations | | Operations | | Transactions | | Other | | Subtotal | | Operations | | Total | | |||||||
Revenues | | $ | 42,462,000 | | $ | 14,537,000 | | $ | - | | $ | - | | $ | 56,999,000 | | $ | 208,000 | | $ | 57,207,000 | |
Segment operating expenses | | | (33,465,000) | | | (7,885,000) | | | - | | | (1,844,000) | | | (43,194,000) | | | (102,000) | | | (43,296,000) | |
Segment income (loss) from operations | | | 8,997,000 | | | 6,652,000 | | | - | | | (1,844,000) | | | 13,805,000 | | | 106,000 | | | 13,911,000 | |
Gain on sale of real estate | | | - | | | - | | | - | | | - | | | - | | | 1,710,000 | | | 1,710,000 | |
Interest expense | | | (2,724,000) | | | (3,497,000) | | | - | | | - | | | (6,221,000) | | | (22,000) | | | (6,243,000) | |
Depreciation and amortization expense | | | (2,360,000) | | | (2,086,000) | | | - | | | - | | | (4,446,000) | | | (25,000) | | | (4,471,000) | |
Loss from investments | | | - | | | - | | | (6,191,000) | | | - | | | (6,191,000) | | | - | | | (6,191,000) | |
Income tax benefit (expense) | | | - | | | - | | | - | | | 1,481,000 | | | 1,481,000 | | | (868,000) | | | 613,000 | |
Net income (loss) | | $ | 3,913,000 | | $ | 1,069,000 | | $ | (6,191,000) | | $ | (363,000) | | $ | (1,572,000) | | $ | 901,000 | | $ | (671,000) | |
Total assets | | $ | 40,678,000 | | $ | 65,051,000 | | $ | 24,642,000 | | $ | 9,450,000 | | $ | 139,821,000 | | $ | - | | $ | 139,821,000 | |
| | | | Number of | | Weighted Average | | Weighted Average | | Aggregate | | |||
| | | | Shares | | Exercise Price | | Remaining Life | | Intrinsic Value | | |||
Oustanding at | | June 30, 2011 | | | 162,000 | | $ | 11.02 | | 6.48 years | | $ | 2,252,000 | |
Granted | | | | | 95,000 | | | 20.04 | | | | | | |
Exercised | | | | | - | | | - | | | | | | |
Forfeited | | | | | - | | | - | | | | | | |
Exchanged | | | | | (15,000) | | | 13.72 | | | | | | |
Oustanding at | | June 30, 2012 | | | 242,000 | | $ | 14.55 | | 7.46 years | | $ | 2,050,000 | |
Exercisable at | | June 30, 2012 | | | 87,000 | | $ | 11.48 | | 4.92 years | | $ | 1,171,000 | |
Vested and Expected to vest at | | June 30, 2012 | | | 242,000 | | $ | 14.55 | | 7.46 years | | $ | 2,050,000 | |
| | | | | | | | | | | | | | |
Oustanding at | | June 30, 2012 | | | 242,000 | | $ | 14.55 | | 7.46 years | | $ | 2,050,000 | |
Granted | | | | | - | | | | | | | | | |
Exercised | | | | | (5,000) | | | 10.30 | | | | | | |
Forfeited | | | | | - | | | - | | | | | | |
Exchanged | | | | | (15,000) | | | 9.52 | | | | | | |
Oustanding at | | June 30, 2013 | | | 222,000 | | $ | 14.98 | | 3.87 years | | $ | 1,353,000 | |
Exercisable at | | June 30, 2013 | | | 105,000 | | $ | 13.01 | | 1.86 years | | $ | 838,000 | |
Vested and Expected to vest at | | June 30, 2013 | | | 222,000 | | $ | 14.98 | | 3.87 years | | $ | 1,353,000 | |
| | | | | | | Weighted Average | | |
| | | | | | | Grant Date | | |
| | | | Number of RSUs | | Fair Value | | ||
RSUs outstanding as of | | June 30, 2011 | | | 20,884 | | $ | 16.14 | |
| | | | | | | | | |
Granted | | | | | 8,245 | | $ | 24.94 | |
Converted to common stock | | | | | (20,884) | | $ | 16.14 | |
| | | | | | | | | |
RSUs outstanding as of | | June 30, 2012 | | | 8,245 | | $ | 24.94 | |
| | | | | | | | | |
Granted | | | | | 8,195 | | $ | 20.99 | |
Converted to common stock | | | | | (8,245) | | $ | 24.94 | |
| | | | | | | | | |
RSUs outstanding as of | | June 30, 2013 | | | 8,195 | | $ | 20.99 | |
Name | | Position with the Company | | Age | | Term to Expire | |
| | | | | | | |
Class A Directors: | | | | | | | |
| | | | | | | |
John V. Winfield (1)(4)(6)(7) | | Chairman of the Board; President | | 66 | | Fiscal 2015 Annual Meeting | |
| | and Chief Executive Officer | | | | | |
| | | | | | | |
Josef A. Grunwald (2)(3)(7) | | Director and Vice Chairman of | | 65 | | Fiscal 2015 Annual Meeting | |
| | The Board | | | | | |
Class B Directors: | | | | | | | |
| | | | | | | |
Gary N. Jacobs (1)(2)(5)(6)(7) | | Secretary; Director | | 68 | | Fiscal 2013 Annual Meeting | |
| | | | | | | |
William J. Nance (1)(2)(3)(4)(6)(7) | | Director | | 69 | | Fiscal 2013 Annual Meeting | |
| | | | | | | |
Class C Director: | | | | | | | |
| | | | | | | |
John C. Love (3)(4)(5) | | Director | | 73 | | Fiscal 2014 Annual Meeting | |
| | | | | | | |
Other Executive Officers: | | | | | | | |
| | | | | | | |
David C. Gonzalez | | Vice President Real Estate | | 46 | | N/A | |
| | | | | | | |
David T. Nguyen | | Treasurer and Controller | | 39 | | N/A | |
| | | | | | | |
Michael G. Zybala | | Asst. Secretary and Counsel | | 61 | | N/A | |
Name and | | Fiscal | | | | | | | | Stock | | Option | | All Other | | | | | |||
Principal Position | | Year | | Salary | | Bonus | | Awards | | Awards | | Compensation | | Total | | ||||||
| | | | | | | | | | | | | | | | | | | | | |
John V. Winfield | | 2013 | | $ | 522,000 | (1) | | - | | | - | | | - | | $ | 139,000 | (4) | $ | 661,000 | |
Chairman; President and | | 2012 | | $ | 522,000 | (1) | | - | | $ | 375,000 | (2) | $ | 510,000 | (3) | $ | 173,000 | (4) | $ | 1,580,000 | |
Chief Executive Officer | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | |
David C. Gonzalez | | 2013 | | $ | 216,000 | | $ | 35,000 | | $ | 53,000 | (5) | | - | | | - | | $ | 304,000 | |
Vice President | | 2012 | | $ | 192,000 | | $ | 70,000 | | | - | | | - | | | - | | $ | 262,000 | |
Real Estate | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | |
David T. Nguyen | | 2013 | | $ | 180,000 | (6) | $ | 15,000 | | | - | | | - | | | - | | $ | 195,000 | |
Treasurer and | | 2012 | | $ | 180,000 | (6) | $ | 20,000 | | | - | | | - | | | - | | $ | 200,000 | |
Controller | | | | | | | | | | | | | | | | | - | | | | |
| | | | | | | | | | | | | | | | | | | | | |
Michael G. Zybala | | 2013 | | $ | 180,000 | (7) | $ | 20,000 | | | - | | | - | | | - | | $ | 200,000 | |
Assistant Secretary | | 2012 | | $ | 168,000 | (7) | $ | 25,000 | | | - | | $ | 67,000 | (8) | | - | | $ | 260,000 | |
and General Counsel | | | | | | | | | | | | | | | | | | | | | |
| | Option Awards | | Stock Awards | | |||||||||
| | Number of | | Number of | | | | | | | Number of | | Market value | |
| | securities | | securities | | | | | | | shares or | | of shares or | |
| | underlying | | underlying | | | | | | | units of | | units of | |
| | unexercised | | unexercised | | Option | | Option | | stock that | | stock that | | |
| | options (#) | | options (#) | | exercise | | expiration | | have not | | have not | | |
Name | | exercisable | | unexercisable | | price $ | | date | | vested | | vested | | |
| | | | | | | | | | | | | | |
John V. Winfield | | 60,000 | | 40,000 | (1) | $ | 10.30 | | 3/15/2020 | | - | | - | |
| | | | | | | | | | | | | | |
John V. Winfield | | 18,000 | | 72,000 | (2) | $ | 19.77 | | 2/27/2022 | | - | | - | |
| | | | | | | | | | | | | | |
Michael G. Zybala | | 1,000 | | 4,000 | (3) | $ | 24.92 | | 6/30/2021 | | - | | - | |
| | Fees Earned or | | | | All Other | | | | | ||
Name | | Paid in Cash(1) | | Stock Awards | | Compensation | | Total | | |||
| | | | | | | | | | | | |
Josef A. Grunwald | | $ | 18,000 | (2) | $ | 22,000 | (6) | - | | $ | 40,000 | |
| | | | | | | | | | | | |
Gary N. Jacobs | | $ | 12,000 | | $ | 63,125 | (7) | - | | $ | 75,125 | |
| | | | | | | | | | | | |
John C. Love | | $ | 62,000 | (3) | $ | 63,125 | (8) | - | | $ | 125,125 | |
| | | | | | | | | | | | |
William J. Nance | | $ | 64,000 | (4) | $ | 63,125 | (9) | - | | $ | 127,125 | |
| | | | | | | | | | | | |
John V. Winfield(5) | | | - | | | - | | - | | | | |
Name and Address of Beneficial Owner | | Amount and Nature of Beneficial Ownership(1) | | Percent of Class(2) | |
| | | | | |
John V. Winfield | | 1,535,522 | (3) | 64.9 | % |
10940 Wilshire Blvd. Suite 2150 | | | | | |
Los Angeles, CA 90024 | | | | | |
| | | | | |
Josef A. Grunwald | | 127,643 | (4) | 5.4 | % |
10940 Wilshire Blvd., Suite 2150 | | | | | |
Los Angeles, CA 90024 | | | | | |
Name of Beneficial Owner | | Amount and Nature of Beneficial Ownership(1) | | Percent of Class(2) | |
| | | | | |
John V. Winfield | | 1,535,522 | (3) | 64.9 | % |
| | | | | |
Josef A. Grunwald | | 127,643 | (4) | 5.4 | % |
| | | | | |
William J. Nance | | 53,609 | (5) | 2.3 | % |
| | | | | |
Gary N. Jacobs | | 21,628 | (6) | 0.9 | % |
| | | | | |
John C. Love | | 18,253 | (7) | 0.8 | % |
| | | | | |
David C. Gonzalez | | 26,770 | | 1.1 | % |
| | | | | |
Michael G. Zybala | | 2,000 | (8) | * | |
| | | | | |
David T. Nguyen | | 0 | | * | |
| | | | | |
All Directors and Executive | | | | | |
Officers as a Group (8 persons) | | 1,784,425 | | 75.4 | % |
Plan category | | Number of securities to be issued upon exercise of outstanding options, warrants and rights | | Weighted-average exercise price of outstanding options warrants and rights | | Remaining available for future issuance under equity compensation plans(excluding securities reflected in column (a)) | | |
| | (a) | | (b) | | (c) | | |
| | | | | | | | |
Equity compensation plans approved by security holders | | 230,195 | | $ | 14.98 | | 111,109 | |
| | | | | | | | |
Equity compensation plans not approved by security holders | | None | | | N/A | | None | |
| | | | | | | | |
Total | | 230,195 | | $ | 14.98 | | 111,109 | |
| | Fiscal Year | | ||||
| | 2013 | | 2012 | | ||
| | | | | | | |
Audit fees | | $ | 278,000 | | $ | 286,000 | |
Audit related fees | | | - | | | - | |
Tax fees | | | - | | | - | |
All other fees | | | - | | | - | |
| | | | | | | |
TOTAL: | | $ | 278,000 | | $ | 286,000 | |
Exhibit Number | | Description |
| | |
3.(i) | | Articles of Incorporation: |
| | |
3.1 | | Certificate of Incorporation, dated September 11, 1985, incorporated by reference to Exhibit 3.1 of the Company’s Registration Statement on Form S-4, filed on September 6, 1985 (Registration No. 33-00126) and Amendment 1 to that Registration Statement filed on October 23, 1985. |
| | |
3.2 | | Restated Certificate of Incorporation, dated March 9, 1998, incorporated by reference to Exhibit 3 of the Company’s Amended Quarterly Report on Form 10-QSB/A for the period ended March 31, 1998, as filed on May 19, 1998. |
| | |
3.3 | | Certificate of Amendment to Certificate of Incorporation, dated October 2, 1998, incorporated by reference to Exhibit 3 of the Company’s Quarterly report on Form 10-QSB for the period ended September 30, 1998, as filed on November 11, 1998. |
3.4 | | Certificate of Amendment of Certificate of Incorporation filed with the Delaware Secretary of State on August 6, 2007, incorporated by reference to Exhibit 3.4 of the Company’s Annual Report on Form 10-KSB for the year ended June 30, 2007 as filed on September 28, 2007. |
| | |
3.(ii) | | Amended and Restated By-Laws of The InterGroup Corporation, effective as of December 10, 2007, incorporated by reference to Exhibit 3.1 to the Company’s Current Report on Form 8-K as filed on December 12, 2007. |
| | |
4. | | Instruments defining the rights of security holders including indentures* |
| | |
9. | | Voting Trust Agreement: Voting Trust Agreement dated June 30, 1998 between John V. Winfield and The InterGroup Corporation is incorporated by reference to the Company’s Annual Report on Form 10-KSB filed with the Commission on September 28, 1998. |
| | |
10. | | Material Contracts: |
| | |
10.1 | | 1998 Stock Option Plan for Non-Employee Directors approved by the Board of Directors on December 8, 1998 and ratified by the shareholders on January 27, 1999 (incorporated by reference to the Company’s Proxy Statement on Schedule 14A filed with the Commission on December 21, 1998). |
| | |
10.2 | | 1998 Stock Option Plan for Selected Key Officers, Employees and Consultants approved by the Board of Directors on December 8, 1998 and ratified by the shareholders on January 27, 1999 (incorporated by reference to the Company’s Proxy Statement on Schedule 14A filed with the Commission on December 21, 1998). |
| | |
10.3 | | The InterGroup Corporation 2007 Stock Compensation Plan for Non-Employee Directors (incorporated by reference to the Company’s Proxy Statement on Schedule 14A filed with the Commission on January 26, 2007). |
| | |
10.4 | | Amended and Restated Agreement of Limited Partnership of Justice Investors, effective November 30, 2010 (incorporated by reference to Exhibit 10.1 to the Company’s Form 10-Q Report for the quarterly period ended December 31, 2010, filed with the Commission on February 11, 2011). |
| | |
10.5 | | General Partner Compensation Agreement, dated December 1, 2008 (incorporated by reference to Exhibit 10.2 to Company’s Form 10-Q Report for the quarterly period ended December 31, 2008, filed with the Commission on February 12, 2009). |
| | |
10.6 | | The InterGroup Corporation 2008 Restricted Stock Unit Plan, adopted by the Board of Directors on December 3, 2008, and ratified by the shareholders on February 18, 2009 (incorporated by reference to the Company’s Proxy Statement on Schedule 14A, filed with the Commission on January 21, 2009). |
| | |
10.7 | | Restricted Stock Unit Agreement, dated February 18, 2009, between The InterGroup Corporation and John V. Winfield (incorporated by reference to Exhibit 10.7 of the Company’s Annual Report on Form 10-K for the fiscal year ended June 30, 2009, as filed with the Commission on October 13, 2009). |
| | |
10.8 | | The InterGroup Corporation 2010 Omnibus Employee Incentive Plan, approved by the shareholders and adopted by the Board of Directors on February 24, 2010 (incorporated by reference to the Company’s Proxy Statement on Schedule 14A, filed with the Commission on January 27, 2010). |
10.9 | | Employee Stock Option Agreement, dated March 16, 2010, between The InterGroup Corporation and John V. Winfield (incorporated by reference to Exhibit 10.9 of the Company’s report on Form 10-K for the fiscal year ended June 30, 2010, as filed with the Commission on September 27, 2010). |
| | |
10.10 | | Franchise License Agreement, dated December 10, 2004, between Justice Investors and Hilton Hotels (incorporated by reference to Exhibit 10.10 of the Company’s amended report on Form 10-K/A for the fiscal year ended June 30, 2011, as filed with the Commission on August 24, 2012). |
| | |
10.11 | | Management Agreement, dated February 2, 2012, between Justice Investors and Prism Hospitality, L.P. (incorporated by reference to Exhibit 10.11 of the Company’s amended report on Form 10-K/A for the fiscal year ended June 30, 2011, as filed with the Commission on August 24, 2012). |
| | |
10.12 | | Management Agreement, dated August 1, 2005, between Century West Properties, Inc. and The InterGroup Corporation (incorporated by reference to Exhibit 10.12 of the Company’s amended report on Form 10-K/A for the fiscal year ended June 30, 2011, as filed with the Commission on August 24, 2012). |
| | |
10.13 | | Employee Stock Option Agreement, dated February 28, 2012, between The InterGroup Corporation and John V. Winfield (incorporated by reference to Exhibit 10.13 of the Company’s annual report on Form 10-K for the fiscal year ended June 30, 2012, as filed with the Commission on September 20, 2012). |
| | |
10.14 | | Property Management Agreement, effective June 17, 2013, between R & K Interests, Inc., a California Corporation, doing business as Investors’ Property Services and The InterGroup Corporation (incorporated by reference to Exhibit 10.1 of the Company’s current report on Form 8-K as filed with the Commission on June 20, 2013). |
10.15 | | Asset Management Agreement, effective July 1, 2013, between The InterGroup Corporation and Delta Alliance Capital Management, LLC, a California limited liability company (incorporated by reference to Exhibit 10.2 or the Company’s current report on Form 8-K as filed with the Commission on June 20, 2013). |
14. | | Code of Ethics (filed herewith). |
| | |
21. | | Subsidiaries (filed herewith) |
| | |
23.1 | | Consent of Independent Registered Public Accounting Firm Burr Pilger Mayer, Inc. (filed herewith). |
| | |
31.1 | | Certification of Principal Executive Officer of Periodic Report Pursuant to Rule 13a-14(a) and Rule 15d-14(a) (filed herewith). |
| | |
31.2 | | Certification of Principal Financial Officer of Periodic Report Pursuant to Rule 13a-14(a) and Rule 15d-14(a) (filed herewith). |
| | |
32.1 | | Certification of Principal Executive Officer Pursuant to 18 U.S.C. Section 1350 (filed herewith). |
| | |
32.2 | | Certification of Principal Financial Officer Pursuant to 18 U.S.C. Section 1350 (filed herewith). |
| | THE INTERGROUP CORPORATION |
| | (Registrant) |
| | |
Date: September 18, 2013 | by | /s/ John V. Winfield |
| | John V. Winfield, President, |
| | Chairman of the Board and |
| | Chief Executive Officer |
| | |
Date: September 18, 2013 | by | /s/ David T. Nguyen |
| | David T. Nguyen, Treasurer |
| | and Controller |
Signatures | | Title and Position | | Date |
| | | | |
/s/ John V Winfield | | President, Chief Operating Officer and Chairman | | September 18, 2013 |
John V. Winfield | | of the Board (Principal Executive Officer) | | |
| | | | |
/s/ David T. Nguyen | | Treasurer and Controller (Principal Financial Officer) | | September 18, 2013 |
David T. Nguyen | | | | |
| | | | |
/s/ Gary N. Jacobs | | Secretary and Director | | September 18, 2013 |
Gary N. Jacobs | | | | |
| | | | |
/s/ John C. Love | | Director | | September 18, 2013 |
John C. Love | | | | |
| | | | |
/s/ William J. Nance | | Director | | September 18, 2013 |
William J. Nance | | | | |
/s/ John V. Winfield | |
John V. Winfield | |
President and Chief Executive Officer | |
(Principal Executive Officer) |
/s/ David T. Nguyen | |
David T. Nguyen | |
Treasurer and Controller | |
(Principal Financial Officer) |
| ⋅ | The Report fully complies with the requirements of Section 13(a) or 5(d) of the Securities Exchange Act of 1934; and |
| | |
| ⋅ | The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company. |
/s/ John V. Winfield | |
John V. Winfield | |
President and Chief Executive Officer | |
(Principal Executive Officer) |
| ⋅ | The Report fully complies with the requirements of Section 13(a) or 5(d) of the Securities Exchange Act of 1934; and |
| | |
| ⋅ | The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company. |
/s/ David T. Nguyen | |
David T. Nguyen | |
Treasurer and Controller | |
(Principal Financial Officer) |
SUBSEQUENT EVENTS (Details Textual) (Subsequent Event [Member], USD $)
|
1 Months Ended |
---|---|
Jul. 31, 2013
Unit
|
|
Subsequent Event [Member]
|
|
Subsequent Event [Line Items] | |
Mortgage Notes Payable Refinanced, Amount | $ 466,000 |
Mortgage Notes Payable Refinanced, Maturity Term | 30 years |
Mortgage Notes Payable Refinanced, Face Value | $ 500,000 |
Mortgage Loans on Real Estate, Interest Rate | 3.50% |
Mortgage Loans on Real Estate, Periodic Payment Terms | The first five years and variable for the remaining of the term. The note matures in July 2043. |
Number of Units in Real Estate Property | 8 |
MORTGAGE NOTES PAYABLE
|
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Jun. 30, 2013
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Debt Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Mortgage Notes Payable Disclosure [Text Block] | NOTE 11 - MORTGAGE NOTES PAYABLE Mortgage notes payable secured by real estate and hotel as of June 30, 2013 and 2012 are summarized as follows:
On July 27, 2005, Justice entered into a first mortgage loan with The Prudential Insurance Company of America in a principal amount of $30,000,000 (the “Prudential Loan”). The term of the Prudential Loan is for 120 months at a fixed interest rate of 5.22% per annum. The Prudential Loan calls for monthly installments of principal and interest in the amount of approximately $165,000, calculated on a 30-year amortization schedule. The Loan is collateralized by a first deed of trust on the Partnership’s Hotel property, including all improvements and personal property thereon and an assignment of all present and future leases and rents. The Prudential Loan is without recourse to the limited and general partners of Justice. In March 2007, Justice entered into a second mortgage loan with The Prudential Insurance Company of America (the “Second Prudential Loan”) in a principal amount of $19,000,000. The term of the Second Prudential Loan is for approximately 100 months and matures on August 5, 2015, the same date as the Partnership’s first mortgage loan with Prudential. The Second Prudential Loan is at a fixed interest rate of 6.42% per annum and calls for monthly installments of principal and interest in the amount of approximately $119,000, calculated on a 30-year amortization schedule. The Loan is collateralized by a second deed of trust on the Partnership’s Hotel property, including all improvements and personal property thereon and an assignment of all present and future leases and rents. The Loan is without recourse to the limited and general partners of Justice. In May 2013, the Company refinanced its $5,671,000 mortgage note payable on its 264-unit apartment building located in St. Louis, Missouri for a new 10-year mortgage in the amount of $6,045,000. The interest rate on the new loan is fixed at 4.05% per annum for ten years, with monthly principal and interest payments based on a 30-year amortization schedule. The note matures in May 2023. In November 2012, the Company refinanced its $17,509,000 mortgage note payable on its 358-unit apartment building located in Las Colinas, Texas for a new 10-year mortgage in the amount of $19,500,000. The interest rate on the new loan is fixed at 3.73% per annum for ten years, with monthly principal and interest payments based on a 30-year amortization schedule. The note matures in December 2022. The Company received net proceeds of approximately $529,000 from the refinancing. In September 2012, the Company refinanced its $388,000 adjustable rate mortgage note payable on its 2-unit apartment located in Los Angeles, California for a new 30-year fixed rate mortgage in the amount of $400,000. The interest rate on the new loan is 4.25% per annum. The note matures in September 2042. In July 2012, the Company refinanced its $9,010,000 mortgage note payable on its 151-unit apartment building located in Morris County, New Jersey for a new 10-year mortgage in the amount of $10,780,000. The interest rate on the new loan is fixed at 3.51% per annum for ten years, with monthly principal and interest payments based on a 25-year amortization schedule. The note matures in August 2022. The Company received net proceeds of approximately $1,513,000 from the refinancing. In August 2012, the Company refinanced two mortgages on two properties located in Los Angeles, California with mortgage note payable balances totaling $1,583,000 for two new 30-year mortgages totaling $1,650,000. The interest rate on the two loans is fixed at 3.85% for the first five years and variable thereafter, with monthly principal and interest payments based on a 30-year amortization schedule. The notes mature in September 2042. In August 2012, the Company refinanced three mortgages on three properties located in Los Angeles, California with mortgage note payable balances totaling $1,243,000 for three new 30-year mortgages totaling $1,285,000. The interest rate on the three loans is fixed at 4.25% for the first five years and variable thereafter, with monthly principal and interest payments based on a 30-year amortization schedule. The notes mature in September 2042. In December 2011, the Company refinanced its $926,000 mortgage note payable on its 12-unit apartment building located in Los Angeles, California for a new 10-year mortgage in the amount of $2,095,000. The interest rate on the new loan is fixed at 4.25% per annum for the first 5 years and variable for the remaining 5 years, with monthly principal and interest payments based on a 30-year amortization schedule. The note matures in January 2022. The Company received net proceeds of approximately $1,122,000 from the refinancing. Future minimum payments for all notes payable are as follows:
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FAIR VALUE MEASUREMENTS (Details) (USD $)
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Jun. 30, 2013
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Jun. 30, 2012
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Assets: | ||
Cash equivalents - money market | $ 3,000 | $ 3,000 |
Restricted cash | 2,448,000 | 1,977,000 |
Other investments - warrants | 6,000 | 282,000 |
Investment in marketable securities | 12,624,000 | 8,981,000 |
Assets, Fair Value Disclosure | 15,081,000 | 11,243,000 |
Liabilities: | ||
Interest rate swap | 60,000 | |
Fair Value, Inputs, Level 1 [Member]
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Assets: | ||
Cash equivalents - money market | 3,000 | 3,000 |
Restricted cash | 2,448,000 | 1,977,000 |
Investment in marketable securities | 12,624,000 | 8,981,000 |
Assets, Fair Value Disclosure | 15,075,000 | 10,961,000 |
Liabilities: | ||
Interest rate swap | 0 | |
Fair Value, Inputs, Level 2 [Member]
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Assets: | ||
Cash equivalents - money market | 0 | 0 |
Restricted cash | 0 | 0 |
Other investments - warrants | 0 | 0 |
Investment in marketable securities | 0 | 0 |
Assets, Fair Value Disclosure | 0 | 0 |
Liabilities: | ||
Interest rate swap | 60,000 | |
Fair Value, Inputs, Level 3 [Member]
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Assets: | ||
Cash equivalents - money market | 0 | 0 |
Restricted cash | 0 | 0 |
Other investments - warrants | 6,000 | 282,000 |
Investment in marketable securities | 0 | 0 |
Assets, Fair Value Disclosure | 6,000 | 282,000 |
Liabilities: | ||
Interest rate swap | 0 | |
Basic Materials [Member]
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Assets: | ||
Investment in marketable securities | 4,733,000 | 4,706,000 |
Basic Materials [Member] | Fair Value, Inputs, Level 1 [Member]
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Assets: | ||
Investment in marketable securities | 4,733,000 | 4,706,000 |
Basic Materials [Member] | Fair Value, Inputs, Level 2 [Member]
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Assets: | ||
Investment in marketable securities | 0 | 0 |
Basic Materials [Member] | Fair Value, Inputs, Level 3 [Member]
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Assets: | ||
Investment in marketable securities | 0 | 0 |
Technology [Member]
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Assets: | ||
Investment in marketable securities | 2,698,000 | 1,203,000 |
Technology [Member] | Fair Value, Inputs, Level 1 [Member]
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Assets: | ||
Investment in marketable securities | 2,698,000 | 1,203,000 |
Technology [Member] | Fair Value, Inputs, Level 2 [Member]
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Assets: | ||
Investment in marketable securities | 0 | 0 |
Technology [Member] | Fair Value, Inputs, Level 3 [Member]
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Assets: | ||
Investment in marketable securities | 0 | 0 |
Financial Services [Member]
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Assets: | ||
Investment in marketable securities | 2,261,000 | 743,000 |
Financial Services [Member] | Fair Value, Inputs, Level 1 [Member]
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Assets: | ||
Investment in marketable securities | 2,261,000 | 743,000 |
Financial Services [Member] | Fair Value, Inputs, Level 2 [Member]
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Assets: | ||
Investment in marketable securities | 0 | 0 |
Financial Services [Member] | Fair Value, Inputs, Level 3 [Member]
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Assets: | ||
Investment in marketable securities | 0 | 0 |
REITs and Real Estate Companies [Member]
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Assets: | ||
Investment in marketable securities | 878,000 | 866,000 |
REITs and Real Estate Companies [Member] | Fair Value, Inputs, Level 1 [Member]
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Assets: | ||
Investment in marketable securities | 878,000 | 866,000 |
REITs and Real Estate Companies [Member] | Fair Value, Inputs, Level 2 [Member]
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Assets: | ||
Investment in marketable securities | 0 | 0 |
REITs and Real Estate Companies [Member] | Fair Value, Inputs, Level 3 [Member]
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Assets: | ||
Investment in marketable securities | 0 | 0 |
Other Fair Value [Member]
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Assets: | ||
Investment in marketable securities | 2,054,000 | 1,463,000 |
Other Fair Value [Member] | Fair Value, Inputs, Level 1 [Member]
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Assets: | ||
Investment in marketable securities | 2,054,000 | 1,463,000 |
Other Fair Value [Member] | Fair Value, Inputs, Level 2 [Member]
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Assets: | ||
Investment in marketable securities | 0 | 0 |
Other Fair Value [Member] | Fair Value, Inputs, Level 3 [Member]
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Assets: | ||
Investment in marketable securities | $ 0 | $ 0 |
INVESTMENT IN REAL ESTATE, NET
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12 Months Ended | |||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2013
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SEC Schedule III, Real Estate and Accumulated Depreciation Disclosure [Abstract] | ||||||||||||||||||||||||||||||||||||||||||
SEC Schedule III, Real Estate and Accumulated Depreciation Disclosure [Text Block] | NOTE 4 - INVESTMENT IN REAL ESTATE, NET At June 30, 2013, the Company's investment in real estate consisted of twenty-three properties located throughout the United States. These properties include eighteen apartment complexes, two single-family houses as strategic investments, and two commercial real estate properties. The Company also owns two unimproved real estate properties located in Austin, Texas and Maui, Hawaii. Investment in real estate included the following:
Depreciation expense from continuing operations for the years ended June 30, 2013 and 2012, was $2,123,000 and $2,086,000, respectively. |
RELATED PARTY TRANSACTIONS
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12 Months Ended |
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Jun. 30, 2013
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Related Party Transactions [Abstract] | |
Related Party Transactions Disclosure [Text Block] | NOTE 18 RELATED PARTY TRANSACTIONS In December 2012, Justice declared a limited partnership distribution in the amount of $1,200,000, of which Portsmouth received $600,000. In December 2011, Justice declared a limited partnership distribution in the aggregate amount of $1,000,000, of which Portsmouth received $500,000. Both of the amounts received by Portsmouth were eliminated in consolidation. During the year ended June 30, 2013 and 2012, the Company received management fees from Justice Investors totaling $401,000 and $366,000, respectively. These amounts were eliminated in consolidation. As Chairman of the Securities Investment Committee, the Company’s President and Chief Executive Officer, John V. Winfield, directs the investment activity of the Company in public and private markets pursuant to authority granted by the Board of Directors. Mr. Winfield also serves as Chief Executive Officer and Chairman of InterGroup and oversees the investment activity of the Company. Depending on certain market conditions and various risk factors, the Chief Executive Officer, his family and the Company may, at times, invest in the same companies in which the Company invests. The Company encourages such investments because it places personal resources of the Chief Executive Officer and his family members, and the resources of InterGroup, at risk in connection with investment decisions made on behalf of the Company. In fiscal year ended June 30, 2004, the disinterested members of the respective Boards of Directors of the Company and its subsidiaries, Santa Fe and Portsmouth, established a performance based compensation program for the Company’s CEO to keep and retain his services as a direct and active manager of the Company’s securities portfolio. Pursuant to the current criteria established by the Board, Mr. Winfield is entitled to performance based compensation for his management of the Company’s securities portfolio equal to 20% of all net investment gains generated in excess of an annual return equal to the Prime Rate of Interest (as published in the Wall Street Journal) plus 2%. Compensation amounts are calculated and paid quarterly based on the results of the Company’s investment portfolio for that quarter. Should the Company have a net investment loss during any quarter, Mr. Winfield would not be entitled to any further performance-based compensation until any such investment losses are recouped by the Company. This performance based compensation program may be further modified or terminated at the discretion of the respective Boards of Directors. The Company’s CEO did not earn any performance based compensation for the years ended June 30, 2013 and 2012. |
INCOME TAXES (Details 3) (USD $)
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Jun. 30, 2013
|
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Income Taxes [Line Items] | |
Federal | $ 22,253,000 |
State | 13,827,000 |
Intergroup [Member]
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Income Taxes [Line Items] | |
Federal | 4,786,000 |
State | 1,728,000 |
Santa Fe [Member]
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Income Taxes [Line Items] | |
Federal | 6,767,000 |
State | 3,271,000 |
Portsmouth [Member]
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Income Taxes [Line Items] | |
Federal | 10,700,000 |
State | $ 8,828,000 |
OTHER ASSETS, NET (Details Textual) (USD $)
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12 Months Ended | |
---|---|---|
Jun. 30, 2013
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Jun. 30, 2012
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Other Assets, Net [Line Items] | ||
Amortization Expense Of Loan Fees And Franchise Costs | $ 72,000 | $ 72,000 |
GARAGE OPERATIONS
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12 Months Ended |
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Jun. 30, 2013
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Garage Operations And Rental Income [Abstract] | |
Garage Operations [Text Block] | NOTE 12 GARAGE OPERATIONS The parking garage is operated by Ace Parking Management, Inc. (“Ace Parking”) for the Partnership pursuant to a Parking Facilities Management Agreement (the “Parking Agreement”). The initial term of the Parking Agreement was to expire on October 31, 2010, with an option to renew for another five-year term. Garage revenue is included as part of hotel revenue. For the year ended June 30, 2013 and 2012, garage revenue was $2,786,000 and $2,765,000, respectively On October 31, 2010, the Partnership and Ace Parking entered into an amendment of the Parking Agreement to extend the term for a period of sixty two (62) months, commencing on November 1, 2010 and terminating December 31, 2015, subject to either party’s right to terminate the agreement without cause on ninety (90) days written notice. The monthly management fee of $2,000 and the accounting fee of $250 remain the same, but the amendment modified how the Excess Profit Fee to be paid to Ace Parking would be calculated. The amendment provides that, if net operating income (NOI) from the garage operations exceeds $1,800,000 but is less than $2,000,000, then Ace Parking will be entitled to an Excess Profit Fee of one percent (1%) of the total annual NOI. If the annual NOI is $2,000,000 or higher, Ace Parking will be entitled to an Excess Profit Fee equal to two percent (2%) of the total annual NOI. The garage’s NOI exceeded the annual NOI of $2,000,000 for the years ended June 30, 2013 and 2012. Base Management and incentive fees to Ace Parking amounted to $44,000 and $52,000 during the years ended June 30, 2013 and 2012 . |
INVESTMENT IN MARKETABLE SECURITIES (Details) (USD $)
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12 Months Ended | |
---|---|---|
Jun. 30, 2013
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Jun. 30, 2012
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Investments In Marketable Securities [Line Items] | ||
Cost | $ 11,314,000 | $ 7,181,000 |
Gross Unrealized Gain | 3,391,000 | 3,797,000 |
Gross Unrealized Loss | 2,081,000 | 1,997,000 |
Net Unrealized Gain | 1,310,000 | 1,800,000 |
Investment in marketable securities | $ 12,624,000 | $ 8,981,000 |
OTHER NOTES PAYABLE (Details Textual) (USD $)
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12 Months Ended | ||
---|---|---|---|
Jun. 30, 2013
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Jun. 30, 2012
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Apr. 30, 2010
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Other Notes Payable [Line Items] | |||
Line of Credit Facility, Amount Outstanding | $ 1,167,000 | $ 1,702,000 | $ 2,500,000 |
Line of Credit Facility, Expiration Date | Apr. 29, 2010 | ||
Line of Credit Facility, Interest Rate Description | Pursuant to the modification, the annual floating interest rate was reduced by 0.5% to the WSJ Prime Rate plus 2.5% (with a minimum floor rate of 5.0% per annum) | ||
Line Of Credit Facility Modified Expiration Date | Apr. 30, 2014 | ||
Line of Credit Facility, Interest Rate at Period End | 5.75% | ||
Debt Instrument, Interest Rate, Stated Percentage | 4.00% | ||
Notes Payable | 71,000 | 61,000 | |
Capital Lease Obligations | 370,000 | 309,000 | |
Additional Principal Payments | 124,000 | ||
Other Notes Payable | 1,595,000 | 2,072,000 | |
Justice [Member]
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Other Notes Payable [Line Items] | |||
Debt Instrument, Interest Rate, Stated Percentage | 11.50% | ||
Other Notes Payable | $ 219,000 |
SEGMENT INFORMATION (Tables)
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Jun. 30, 2013
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Segment Reporting [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Segment Reporting Information, by Segment [Table Text Block] | Information below represents reported segments for the years ended June 30, 2013 and 2012. Segment income from Hotel operations consists of the operation of the hotel and operation of the garage. Segment income from real estate operations consists of the operation of the rental properties. Loss from investments consists of net investment loss, dividend and interest income and investment related expenses.
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SUBSEQUENT EVENTS
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12 Months Ended |
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Jun. 30, 2013
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Subsequent Events [Abstract] | |
Subsequent Events [Text Block] | NOTE 21 SUBSEQUENT EVENTS The Company has evaluated all events occurring subsequent to June 30, 2013 through September 18, 2013, the date which these financial statements were available to be issued, and concluded that nothing has occurred outside the normal course of business operations that require disclosure or recognition as of June 30, 2013, except for the following: In July 2013, the Company refinanced its $466,000 adjustable rate mortgage note payable on its 8-unit apartment located in Los Angeles, California for a new 30-year mortgage in the amount of $500,000. The interest rate on the new loan is fixed at 3.50% per annum for the first five years and variable for the remaining of the term. The note matures in July 2043. |
EMPLOYEE BENEFIT PLAN
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12 Months Ended |
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Jun. 30, 2013
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Compensation and Retirement Disclosure [Abstract] | |
Compensation and Employee Benefit Plans [Text Block] | NOTE 20 EMPLOYEE BENEFIT PLAN Justice has a 401(k) Profit Sharing Plan (the Plan) for non-union employees who have completed six months of service. Justice provides a matching contribution up to 4% of the contribution to the Plan based upon a certain percentage on the employees’ elective deferrals. Justice may also make discretionary contributions to the Plan each year. Contributions made to the Plan amounted to $56,000 and $63,000 during the years ended June 30, 2013 and 2012, respectively. Certain employees of Justice who are members of various unions are covered by union-sponsored, collectively bargained, multi-employer health and welfare and benefit pension plans. Justice does not contribute separately to those multi-employer plans. |
PROPERTY HELD FOR SALE AND DISCONTINUED OPERATIONS (Details) (USD $)
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12 Months Ended | |
---|---|---|
Jun. 30, 2013
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Jun. 30, 2012
|
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Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||
Revenues | $ 208,000 | |
Expenses | (149,000) | |
Income from discontinued operations | $ 0 | $ 59,000 |
FAIR VALUE MEASUREMENTS (Tables)
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Jun. 30, 2013
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Fair Value Disclosures [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Value, Assets Measured on Recurring Basis [Table Text Block] | The assets measured at fair value on a recurring basis are as follows:
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Fair Value Measurements, Nonrecurring [Table Text Block] | The following table shows the fair value hierarchy for these assets measured at fair value on a non-recurring basis as follows:
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INVESTMENT IN MARKETABLE SECURITIES (Details 1) (USD $)
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12 Months Ended | |
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Jun. 30, 2013
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Jun. 30, 2012
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Investments In Marketable Securities [Line Items] | ||
Realized gain (loss) on marketable securities | $ 147,000 | $ (2,628,000) |
Unrealized loss on marketable securities | (1,003,000) | (1,816,000) |
Net loss on marketable securities | $ (856,000) | $ (4,444,000) |
PROPERTY HELD FOR SALE AND DISCONTINUED OPERATIONS (Tables)
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12 Months Ended | ||||||||||||||||||||
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Jun. 30, 2013
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Discontinued Operations and Disposal Groups [Abstract] | |||||||||||||||||||||
Schedule of Disposal Groups, Including Discontinued Operations, Income Statement, Balance Sheet and Additional Disclosures [Table Text Block] | The revenues and expenses are summarized as follows:
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CONCENTRATION OF CREDIT RISK (Details Textual) (USD $)
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12 Months Ended | |
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Jun. 30, 2013
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Jun. 30, 2012
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Concentration Risk [Line Items] | ||
Accounts Receivable, Net | $ 1,957,000 | $ 1,641,000 |
Hotel [Member]
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Concentration Risk [Line Items] | ||
Accounts Receivable, Net | 525,000 | 122,000 |
Concentration Risk, Percentage | 27.00% | 7.00% |
Travel Agents and Airlines [Member]
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Concentration Risk [Line Items] | ||
Accounts Receivable, Net | $ 595,000 | $ 332,000 |
Concentration Risk, Percentage | 30.00% | 20.00% |
INVESTMENT IN HOTEL, NET (Details Textual) (USD $)
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Jun. 30, 2013
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Jun. 30, 2012
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Property, Plant and Equipment [Line Items] | ||
Capital Leased Assets, Gross | $ 2,131,000 | $ 2,131,000 |
Capital Leases, Lessee Balance Sheet, Assets by Major Class, Accumulated Depreciation | $ 1,930,000 | $ 1,668,000 |
COMMITMENTS AND CONTINGENCIES
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12 Months Ended |
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Jun. 30, 2013
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Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies Disclosure [Text Block] | NOTE 19 COMMITMENTS AND CONTINGENCIES Administrative FeesGeneral Partners During each of the years ended June 30, 2013 and 2012, the general partners of Justice were paid a total of $620,000 and $562,000, respectively. The total amount paid represents the minimum base compensation of $285,000 each year plus $335,000 and $277,000 respectively, based upon the agreement. Franchise Agreements The Partnership entered into a Franchise License agreement (the License agreement) with the Hilton Hotels Corporation (Hilton) on December 10, 2004. The term of the License agreement is for a period of 15 years commencing on the opening date, with an option to extend the license agreement for another five years, subject to certain conditions. Beginning on the opening date in January 2006, the Partnership paid monthly royalty fees for the first two years of three percent (3%) of the Hotel’s gross room revenue for the preceding calendar month; the third year was at four percent (4%) of the Hotel’s gross room revenue; and the fourth year until the end of the term will be five percent (5%) of the Hotel’s gross room revenue. The Partnership also pays a monthly program fee of four percent (4%) of the Hotel’s gross revenue. The amount of the monthly program fee is subject to change; however, the increase cannot exceed one percent (1%) of the Hotel gross room revenue in any calendar year, and the cumulative increases in the monthly fees will not exceed five percent (5%) of gross room revenue. Franchise fees for the years ended June 30, 2013 and 2012 were $3,374,000 and $3,008,000, respectively. The Partnership also pays Hilton a monthly information technology recapture charge of 0.75% of the Hotel’s gross revenues. Due to the difficult economic environment, Hilton agreed to reduce its information technology fees to 0.65%. For the years ended June 30, 2013 and 2012, those charges were $236,000 and $214,000, respectively. Property Management Agreement Effective June 17, 2013, InterGroup entered into an unrelated third party Property Management Agreement with R & K Interests, Inc., doing business as Investors' Property Services (“IPS”) to provide property management services for all of the Company's rental properties located outside the state of California . The properties subject to the agreement are the Company's apartment complexes located in Las Colinas TX, Austin TX, St. Louis MO, Parsippany NJ and Florence KY. Subject to its other terms and conditions, the agreement is for consecutive one (1) year renewable terms but may be terminated by the parties upon thirty (30) days advance written notice. The agreement provides for compensation to IPS of 2.8% of the gross income from operations of the properties (as defined) as a property management fee and certain other fees as set forth in the agreement for any additional services. Effective July 1, 2013, InterGroup also entered into an Asset Management Agreement with Delta Alliance Capital Management, LLC, to provide asset management services covering all of the Company's rental properties and its two commercial buildings. Delta Alliance is a related firm to IPS. Delta Alliance was formed to acquire commercial real estate holdings and assist and advise clients in monitoring the operations of similar real estate holdings. Subject to its other terms and conditions, the agreement is for consecutive one (1) year renewable terms but may be terminated by the parties upon thirty (30) days advance written notice. The agreement provides for compensation to Delta Alliance of 0.5% of the gross income from operations of all the properties as an asset management fee. Employees As of June 30, 2013, InterGroup had eight full-time employees. The employees of the Company are not part of any collective bargaining agreement, and the Company believes that its employee relations are satisfactory. As of June 30, 2013, the Partnership had approximately 244 employees. Approximately 80% of those employees were represented by one of three labor unions, and their terms of employment were determined under a collective bargaining agreement (CBA) to which the Partnership was a party. During the year ended June 30, 2013, the Partnership continued under an existing CBA for the Local 2 (Hotel and Restaurant Employees). As of June 30, 2013, the CBA for Local 856 (International Brotherhood of Teamsters) has expired and is currently under renegotiation. Negotiation of collective bargaining agreements, which includes not just terms and conditions of employment but scope and coverage of employees, is a regular and expected course of business operations for the Partnership. The Partnership expects and anticipates that the terms of conditions of CBAs will have an impact on wage and benefit costs, operating expenses, and certain hotel operations during the life of the each CBA, and incorporates these principles into its operating and budgetary practices. Legal Matters In August 2012, two current and four former employees of the Hotel commenced a putative wage and hour class action against the Partnership. The Complaint alleged that the Partnership failed to provide compliant meal periods, failed to authorize and permit compliant rest periods, failed to pay all regular and overtime wages due, failed to provide accurate itemized wage statements, and failed to pay all wages owed upon termination of employment. In February 2013, the Partnership agreed to settle the class action lawsuit for $525,000. The amount was accrued as of June 30, 2013 and is included as part of “Accounts payable and accrued liabilities” in the Balance Sheets. Prism Hotels L.P. agreed to reimburse the Partnership for 50% of the total amount of the settlement and pay up to $300,000 of legal fees and defense costs incurred in defense of the lawsuit. During fiscal 2013, the Company incurred legal costs of $365,000 associated with the lawsuit, of which Prism agreed to pay $300,000 in accordance with the agreement. The amount due to Prism at June 30, 2013 for the management fee was applied against the receivable for the reimbursement of the settlement and legal costs. The Partnership insurance carrier awarded $225,000 in insurance proceeds as a result of a claim related to the settlement. Of the total proceeds, 50% or $112,500 was allocated to the Partnership and the remaining amount was allocated to Prism. The insurance reimbursement awarded to the Partnership was offset against the related legal expense. The Company is involved from time to time in various claims in the ordinary course of business. Management does not believe that the impact of such matters will have a material effect on the financial conditions or result of operations when resolved. |
JUSTICE INVESTORS
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12 Months Ended |
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Jun. 30, 2013
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Justice Investors [Abstract] | |
Justice Investors [Text Block] | NOTE 2 - JUSTICE INVESTORS On July 14, 2005, the FASB issued Staff Position (FSP) SOP 78-9-1, “Interaction of AICPA Statement of Position 78-9 and EITF Issue No. 04-5” which was codified into ASC Topic 910-810, “Real Estate General Consolidation”, to amend the guidance in AICPA Statement of Position 78-9, “Accounting for Investments in Real Estate Ventures” (SOP 78-9) to be consistent with the consensus in Emerging Issues Task Force Issue No. 04-5 “Determining Whether a General Partner, or General Partners as a Group, Controls a Limited Partnership or Similar Entity When the Limited Partners Have Certain Rights” which was codified into ASC 810-20, “Consolidation”, eliminated the concept of “important rights”(ASC Topic 970-810) and replaces it with the concepts of “kick out rights” and “substantive participating rights”. In accordance with guidance set forth in ASC Topic 970-20, Portsmouth has applied the principles of accounting applicable for investments in subsidiaries due to its substantial limited partnership interest and general partnership rights and has consolidated the financial statements of Justice with those of the Company effective as of July 1, 2006. For the years ended June 30, 2013 and 2012, the results of operations for Justice were consolidated with those of the Company. On December 1, 2008, Portsmouth and Evon, as the two general partners of Justice, entered into a 2008 Amendment to the Limited Partnership Agreement (the “Amendment”) that provides for a change in the respective roles of the general partners. Pursuant to the Amendment, Portsmouth assumed the role of Managing General Partner and Evon continued on as the Co-General Partner of Justice. The Amendment was ratified by approximately 98% of the limited partnership interests. The Amendment also provides that future amendments to the Limited Partnership Agreement may be made only upon the consent of the general partners and at least seventy five percent (75%) of the interests of the limited partners. Consent of at least 75% of the interests of the limited partners will also be required to remove a general partner pursuant to the Amendment. Effective November 30, 2010, the general and limited partners of Justice Investors entered into an Amended and Restated Agreement of Limited Partnership, which was approved and ratified by more than 98% of the limited partnership interests of Justice. The Partnership Agreement was amended and restated in its entirety to comply with the new provisions of the California Corporations Code known as the “Uniform Limited Partnership Act of 2008”. The amendment did not result in any material modifications of the rights or obligations of the general and limited partners. Concurrent with the Amendment to the Limited Partnership Agreement, a new General Partner Compensation Agreement (the “Compensation Agreement”) was entered into on December 1, 2008, among Justice, Portsmouth and Evon to terminate and supersede all prior compensation agreement for the general partners of Justice Investors. Pursuant to the Compensation Agreement, the general partners of Justice will be entitled to receive an amount equal to 1.5% of the gross annual revenues of the Partnership (as defined), less $75,000 to be used as a contribution toward the cost of Justice engaging an asset manager. In no event shall the annual compensation be less than a minimum base of approximately $285,000, with eighty percent (80%) of that amount being allocated to Portsmouth for its services as managing general partner of Justice and twenty percent (20%) allocated to Evon as the co-general partner. Compensation earned by the general partners in each calendar year in excess of the minimum base, will be payable in equal fifty percent (50%) shares to Portsmouth and Evon. |
PROPERTY HELD FOR SALE AND DISCONTINUED OPERATIONS
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12 Months Ended | ||||||||||||||||||||
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Jun. 30, 2013
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Discontinued Operations and Disposal Groups [Abstract] | |||||||||||||||||||||
Disposal Groups, Including Discontinued Operations, Disclosure [Text Block] | NOTE 5 PROPERTY HELD FOR SALE AND DISCONTINUED OPERATIONS As of June 30, 2013, the Company did not have any properties that were classified as held for sale. In January 2012, the Company sold its 24-unit apartment complex located in Los Angeles, California for $4,370,000. The Company realized a gain on the sale of real estate of $1,710,000 and received net proceeds of $4,111,000 from the sale after selling costs. The Company paid off the related mortgage note payable balance of $1,504,000. The gain on the sale of real estate and the revenues and expenses from the operation of the property that was sold in fiscal year 2012 is reported as income from discontinued operations in the consolidated statements of operations for the respective period. The revenues and expenses are summarized as follows:
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RELATED PARTY TRANSACTIONS (Details Textual) (USD $)
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1 Months Ended | 12 Months Ended | ||
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Dec. 31, 2012
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Dec. 31, 2011
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Jun. 30, 2013
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Jun. 30, 2012
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Related Party Transaction [Line Items] | ||||
Amended Performance Compensation Description | performance based compensation for his management of the Companys securities portfolio equal to 20% of all net investment gains generated in excess of an annual return equal to the Prime Rate of Interest (as published in the Wall Street Journal) plus 2% | |||
Portsmouth [Member]
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Related Party Transaction [Line Items] | ||||
Investment Income, Dividend | $ 600,000 | $ 500,000 | ||
Justice [Member]
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Related Party Transaction [Line Items] | ||||
Management Fees Revenue, Total | 401,000 | 366,000 | ||
Limited Partners Capital Account, Distribution Amount | $ 1,200,000 | $ 1,000,000 |
INVESTMENT IN HOTEL, NET
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Jun. 30, 2013
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Property, Plant and Equipment [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Property, Plant and Equipment Disclosure [Text Block] | NOTE 3 INVESTMENT IN HOTEL, NET Investment in hotel consisted of the following as of:
The Partnership leases certain equipment under agreements that are classified as capital leases. The cost of equipment under capital leases was $2,131,000 at June 30, 2013 and 2012. The accumulated depreciation on capital leases was $1,930,000 and $1,668,000 as of June 30, 2013 and 2012, respectively. |
JUSTICE INVESTORS (Details Textual) (USD $)
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0 Months Ended |
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Dec. 01, 2008
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Justice Investors [Line Items] | |
Amendment To Limited Partnership Agreement Interests | 98.00% |
Minimum Future Amendment To Limited Partnership Agreement Interests | 75.00% |
Annual Revenues Of Partnership Percentage | 1.50% |
General Partner Contribution To Asset Managers | $ 75,000 |
Minimum Annual Compensation | $ 285,000 |
Portsmouth [Member]
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Justice Investors [Line Items] | |
Allocated Compensation Percentage | 80.00% |
Allocated Excess Compensation Percentage | 50.00% |
Evon [Member]
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Justice Investors [Line Items] | |
Allocated Compensation Percentage | 20.00% |
Allocated Excess Compensation Percentage | 50.00% |
BUSINESS AND SIGNIFICANT ACCOUNTING POLICIES AND PRACTICES (Policies)
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12 Months Ended |
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Jun. 30, 2013
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Accounting Policies [Abstract] | |
Business Combinations Policy [Policy Text Block] | Description of the Business The InterGroup Corporation, a Delaware corporation, (“InterGroup” or the “Company”) was formed to buy, develop, operate and dispose of real property and to engage in various investment activities to benefit the Company and its shareholders. As of June 30, 2013, the Company had the power to vote 84.5% of the voting shares of Santa Fe Financial Corporation (“Santa Fe”), a public company (OTCBB: SFEF). This percentage includes the power to vote an approximately 4% interest in the common stock in Santa Fe owned by the Company’s Chairman and President pursuant to a voting trust agreement entered into on June 30, 1998. Santa Fe’s revenue is primarily generated through the management of its 68.8% owned subsidiary, Portsmouth Square, Inc. (“Portsmouth”), a public company (OTCBB: PRSI). InterGroup also directly owns approximately 12.9% of the common stock of Portsmouth. Portsmouth has a 50.0% limited partnership interest in Justice Investors (“Justice”, “the Partnership” or “the Hotel”) and serves as one of the two general partners. The other general partner, Evon Corporation (“Evon”), served as the managing general partner until December 1, 2008 at which time Portsmouth assumed the role of managing general partner. As discussed in Note 2, the financial statements of Justice are consolidated with those of the Company. Justice owns a 543-room hotel property located at 750 Kearny Street, San Francisco California, known as the Hilton San Francisco Financial District (the Hotel) and related facilities including a five level underground parking garage. The Hotel is operated by the partnership as a full service Hilton brand hotel pursuant to a Franchise License Agreement with Hilton Hotels Corporation. Justice also has a Management Agreement with Prism Hospitality L.P. (Prism) to perform the day-to-day management functions of the Hotel. The parking garage that is part of the Hotel property is managed by Ace Parking pursuant to a contract with the Partnership. Justice also leases a portion of the lobby level of the Hotel to a day spa operator. Due to the temporary closing of the Hotel to undergo major renovations from May 2005 until January 2006 to transition and reposition the Hotel from a Holiday Inn to a Hilton, and the substantial depreciation and amortization expenses resulting from the renovations and operating losses incurred as the Hotel ramped up operations after reopening, Justice has recorded net losses. These losses were anticipated and planned for as part of the Partnership’s renovation and repositioning plan for Hotel and management considers those net losses to be temporary. The Hotel has been generating positive cash flows from operations since June 2006. For the fiscal years ended June 30, 2013 and 2012, the Partnership generated net income of $2,864,000 and $3,913,000, respectively. Hotel operations improved significantly during the last two fiscal years and depreciation and amortization expenses decreased as many of the furniture and fixture improvements from the renovation of the Hotel reached full deprecation during the fiscal 2011. Management believes that the revenues expected to be generated from the operations of the hotel, garage and leases will be sufficient to meet all of the Partnership’s current and future obligations and financial requirements. Management also believes that there is significant value in the Hotel to support additional borrowings, if necessary. In addition to the operations of the Hotel, the Company also generates income from the ownership of real estate. Properties include apartment complexes, commercial real estate, and two single-family houses as strategic investments. The properties are located throughout the United States, but are concentrated in Texas and Southern California. The Company also has investments in unimproved real property. The Company’s residential rental properties are managed by three professional third party property management companies. |
Consolidation, Policy [Policy Text Block] | Principles of Consolidation The consolidated financial statements include the accounts of the Company and Santa Fe. All significant inter-company transactions and balances have been eliminated. |
Property, Plant and Equipment, Policy [Policy Text Block] | Investment in Hotel, Net The Hotel property and equipment are stated at cost less accumulated depreciation. Building improvements are being depreciated on a straight-line basis over their useful lives ranging from 3 to 39 years. Furniture, fixtures, and equipment are being depreciated on a straight-line basis over their useful lives ranging from 3 to 7 years. Repairs and maintenance are charged to expense as incurred. Costs of significant renewals and improvements are capitalized and depreciated over the shorter of its remaining estimated useful life or life of the asset. The cost of assets sold or retired and the related accumulated depreciation are removed from the accounts; any resulting gain or loss is included in other income (expenses). The Company reviews property and equipment for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. If the carrying amount of the asset, including any intangible assets associated with that asset, exceeds its estimated undiscounted net cash flow, before interest, the Partnership will recognize an impairment loss equal to the difference between its carrying amount and its estimated fair value. If impairment is recognized, the reduced carrying amount of the asset will be accounted for as its new cost. For a depreciable asset, the new cost will be depreciated over the asset’s remaining useful life. Generally, fair values are estimated using discounted cash flow, replacement cost or market comparison analyses. The process of evaluating for impairment requires estimates as to future events and conditions, which are subject to varying market and economic factors. Therefore, it is reasonably possible that a change in estimate resulting from judgments as to future events could occur which would affect the recorded amounts of the property. No impairment losses were recorded for the years ended June 30, 2013 and 2012. |
Investment In Real Estate Policy [Policy Text Block] | Investment in Real Estate, Net Rental properties are stated at cost less accumulated depreciation. Depreciation of rental property is provided on the straight-line method based upon estimated useful lives of 5 to 40 years for buildings and improvements and 5 to 10 years for equipment. Expenditures for repairs and maintenance are charged to expense as incurred and major improvements are capitalized. The Company also reviews its rental property assets for impairment. No impairment losses on the investment in real estate have been recorded for the years ended June 30, 2013 and 2012. The fair value of the tangible assets of an acquired property, which includes land, building and improvements, is determined by valuing the property as if they were vacant, and incorporates costs during the lease-up periods considering current market conditions and costs to execute similar leases such lost rental revenue and tenant improvements. The value of tangible assets are depreciated using straight-line method based upon the assets estimated useful lives. |
Marketable Securities, Policy [Policy Text Block] | Investment in Marketable Securities Marketable securities are stated at fair value as determined by the most recently traded price of each security at the balance sheet date. Marketable securities are classified as trading securities with all unrealized gains and losses on the Company's investment portfolio recorded through the consolidated statements of operations. |
Other Investments Policy [Policy Text Block] | Other Investments, Net Other investments include non-marketable securities (carried at cost, net of any impairments loss), non marketable warrants (carried at fair value) and certain convertible preferred securities, received in exchange for debt instruments, carried at a book basis, initially determined using the estimated fair value on the exchange date. The Company has no significant influence or control over the entities that issue these investments. These investments are reviewed on a periodic basis for other-than-temporary impairment. The Company reviews several factors to determine whether a loss is other-than-temporary. These factors include but are not limited to: (i) the length of time an investment is in an unrealized loss position, (ii) the extent to which fair value is less than cost, (iii) the financial condition and near term prospects of the issuer and (iv) our ability to hold the investment for a period of time sufficient to allow for any anticipated recovery in fair value. For the years ended June 30, 2013 and 2012, the Company recorded impairment losses related to other investments of $105,000 and $917,000, respectively. As of June 30, 2013 and 2012, the allowance for impairment losses was $4,626,000 and $4,521,000, respectively. |
Derivatives, Policy [Policy Text Block] | Derivative Financial Instruments The Company has investments in stock warrants and has entered into an interest rate swap, both of which are considered derivative instruments. Derivative financial instruments consist of financial instruments or other contracts that contain a notional amount and one or more underlying (e.g. interest rate, security price or other variable), require no initial net investment and permit net settlement. Derivative financial instruments may be free-standing or embedded in other financial instruments. Further, derivative financial instruments are initially, and subsequently, measured at fair value on the Company’s consolidated balance sheets. For the investment in stock warrants, the Company used the Black-Scholes option valuation model to estimate the fair value these instruments which requires management to make significant assumptions including trading volatility, estimated terms, and risk free rates. Estimating fair values of derivative financial instruments requires the development of significant and subjective estimates that may, and are likely to, change over the duration of the instrument with related changes in internal and external market factors. In addition, option-based models are highly volatile and sensitive to changes in the trading market price of the underlying common stock, which has a high-historical volatility. Since derivative financial instruments are initially and subsequently carried at fair values, the Company’s consolidated statement of operations will reflect the volatility in these estimate and assumption changes. The Company measures the interest rate swap agreement at fair value at the end of each reporting period. The Company opted not designate the interest rate swap agreement as a cash flow hedge; hence, the change in fair value of the interest rate swap agreement is reported as unrealized gain or loss in the consolidated statement of operations. |
Cash and Cash Equivalents, Policy [Policy Text Block] | Cash and Cash Equivalents Cash equivalents consist of highly liquid investments with an original maturity of three months or less when purchased and are carried at cost, which approximates fair value. |
Cash and Cash Equivalents, Restricted Cash and Cash Equivalents, Policy [Policy Text Block] | Restricted Cash Restricted cash is comprised of amounts held by lenders for payment of real estate taxes, insurance, replacement reserves for the operating properties and tenant security deposits that are invested in certificates of deposit. |
Other Assets Policy [Policy Text Block] | Other Assets, Net Other assets include accounts receivable, prepaid insurance, loan fees, franchise fees, license fees, inventory and other miscellaneous assets. Loan fees are stated at cost and amortized over the term of the loan using the effective interest method. Franchise fees are stated at cost and amortized over the life of the agreement (15 years). License fees are stated at cost and amortized over 10 years. Accounts receivable from the Hotel and rental property customers are carried at cost less an allowance for doubtful accounts that is based on management’s assessment of the collectability of accounts receivable. The Company extends unsecured credit to its customers but mitigates the associated credit risk by performing ongoing credit evaluations of its customers. As of June 30, 2013 and 2012, the balance of allowance for doubtful accounts was $19,000 and $37,000, respectively. |
Due To And From Broker Dealers Policy [Policy Text Block] | Due to Securities Broker The Company may utilize margin for its marketable securities purchases through the use of standard margin agreements with national brokerage firms. Various securities brokers have advanced funds to the Company for the purchase of marketable securities under standard margin agreements. These advanced funds are recorded as a liability. |
Obligations For Securities Sold Policy [Policy Text Block] | Obligation for Securities Sold Obligation for securities sold represents the fair market value of shares sold with the promise to deliver that security at some future date and the fair market value of shares underlying the written call options with the obligation to deliver that security when and if the option is exercised. The obligation may be satisfied with current holdings of the same security or by subsequent purchases of that security. Unrealized gains and losses from changes in the obligation are included in the statement of operations. |
Accounts Payable And Other Liabilities Policy [Policy Text Block] | Accounts Payable and Other Liabilities Accounts payable and other liabilities include trade payables, advance deposits and other liabilities. |
Treasury Stock Policy [Policy Text Block] | Treasury Stock The Company records the acquisition of treasury stock under the cost method. |
Fair Value of Financial Instruments, Policy [Policy Text Block] | Cash and Cash Equivalents Cash equivalents consist of highly liquid investments with an original maturity of three months or less when purchased and are carried at cost, which approximates fair value. |
Revenue Recognition, Policy [Policy Text Block] | Revenue Recognition Room revenue is recognized on the date upon which a guest occupies a room and/or utilizes the Hotel’s services. Food and beverage revenues are recognized upon delivery. Garage revenue is recognized when a guest uses the garage space. The Company records a liability for payments collected in advance of revenue recognition. This liability is included in Accounts payable and other liabilities. Revenue recognition from apartment rentals commences when an apartment unit is placed in service and occupied by a rent-paying tenant. Apartment units are leased on a short-term basis, with no lease extending beyond one year. |
Advertising Costs, Policy [Policy Text Block] | Advertising Costs Advertising costs are expensed as incurred. Advertising costs were $419,000 and $415,000 for the years ended June 30, 2013 and 2012, respectively. |
Income Tax, Policy [Policy Text Block] | Income Taxes Deferred income taxes are calculated under the liability method. Deferred income tax assets and liabilities are based on differences between the financial statement and tax basis of assets and liabilities at the current enacted tax rates. Changes in deferred income tax assets and liabilities are included as a component of income tax expense. Changes in deferred income tax assets and liabilities attributable to changes in enacted tax rates are charged or credited to income tax expense in the period of enactment. Valuation allowances are established for certain deferred tax assets where realization is not likely. Assets and liabilities are established for uncertain tax positions taken or positions expected to be taken in income tax returns when such positions are judged to not meet the “more-likely-than-not” threshold based on the technical merits of the positions. |
Earnings Per Share, Policy [Policy Text Block] | Earnings (Loss) Per Share Basic income (loss) per share is computed by dividing net income (loss) available to common stockholders by the weighted average number of common shares outstanding. The computation of diluted income (loss) per share is similar to the computation of basic earnings per share except that the weighted-average number of common shares is increased to include the number of additional common shares that would have been outstanding if potential dilutive common shares had been issued. The Company's only potentially dilutive common shares are stock options and restricted stock units (RSUs). As of June 30, 2013, the Company had 52,138 stock options and RSUs that were considered potentially dilutive common shares. As of June 30, 2012, the Company had 47,255 stock options and RSUs that were considered potentially dilutive common shares. The basic and diluted earnings per share were the same for the year ended June 30, 2012 because the Company had a net loss from continuing operations. |
Use of Estimates, Policy [Policy Text Block] | Use of Estimates The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America (U.S. GAAP) requires the use of estimates and assumptions regarding certain types of assets, liabilities, revenues, and expenses. Such estimates primarily relate to unsettled transactions and events as of the date of the financial statements. Accordingly, upon settlement, actual results may differ from estimated amounts. |
Reclassifications Policy [Policy Text Block] | Reclassifications Certain prior year balances have been reclassified to conform with the current year presentation. |
New Accounting Pronouncements, Policy [Policy Text Block] | Recent Accounting Pronouncements In June 2011, the FASB issued ASU 2011-05, “Presentation of Comprehensive Income.” ASU 2011-05 changes the way other comprehensive income (“OCI”) appears within the financial statements. Companies will be required to show net income, OCI and total comprehensive income in one continuous statement or in two separate but consecutive statements. Components of OCI may no longer be presented solely in the statement of changes in shareholders’ deficit. ASU 2011-05 was effective for the Company beginning July 1, 2012. For the year ended June 30, 2013 and 2012, the Company had no components of Comprehensive Income other than net income itself. In September 2011, the FASB issued ASU No. 2011-09, Compensation - Retirement Benefits - Multiemployer Plans (Subtopic 715-80) - Disclosures about an Employer's Participation in a Multiemployer Plan, which requires employers that participate in multiemployer pension plans to provide additional quantitative and qualitative disclosures in order to provide more information about an employer's involvement in multiemployer pension plans. Although the majority of the amendments in this ASU apply only to multiemployer pension plans, there are also amendments that require changes in disclosures for multiemployer plans that provide postretirement benefits other than pensions. The Company adopted this ASU on June 30, 2012. This ASU impacted the Company's disclosures only and did not have any impact on the Company's financial position, results of operations, or cash flows. The disclosures required by this ASU are presented in Note 19 and Note 20 to the financial statements. |
INVESTMENT IN MARKETABLE SECURITIES (Tables)
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Jun. 30, 2013
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Investments, Debt and Equity Securities [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Marketable Securities [Table Text Block] | The change in the unrealized gains and losses on these investments are included in earnings. Trading securities are summarized as follows:
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Gain (Loss) on Investments [Table Text Block] | Net loss on marketable securities on the statement of operations is comprised of realized and unrealized gains (losses). Below is the composition of the two components for the years ended June 30, 2013 and 2012, respectively.
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STOCK BASED COMPENSATION PLANS (Details 1) (Restricted Stock Units (RSUs) [Member], USD $)
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Jun. 30, 2013
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Restricted Stock Units (RSUs) [Member]
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Stock Based Compensation [Line Items] | ||
RSUs outstanding, Number of RSUs | 8,245 | 20,884 |
Granted, Number of RSUs | 8,195 | 8,245 |
Converted to common stock, Number of RSUs | (8,245) | (20,884) |
RSUs outstanding, Number of RSUs | 8,195 | 8,245 |
RSUs outstanding, Weighted Average Grant Date Fair Value | $ 24.94 | $ 16.14 |
Granted, Weighted Average Grant Date Fair Value | $ 20.99 | $ 24.94 |
Converted to common stock, Weighted Average Grant Date Fair Value | $ 24.94 | $ 16.14 |
RSUs outstanding, Weighted Average Grant Date Fair Value | $ 20.99 | $ 24.94 |
INCOME TAXES (Tables)
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Jun. 30, 2013
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Income Tax Disclosure [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Components of Income Tax Expense (Benefit) [Table Text Block] | The provision for the Company’s income tax benefit (expense) is comprised of the following:
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Schedule of Effective Income Tax Rate Reconciliation [Table Text Block] | The provision for income taxes from continuing operations differs from the amount of income tax computed by applying the federal statutory income tax rate to loss before taxes as a result of the following differences:
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Schedule of Deferred Tax Assets and Liabilities [Table Text Block] | The components of the deferred tax asset and liabilities are as follows:
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Schedule of Income before Income Tax, Domestic and Foreign [Table Text Block] | The carryforward expires in varying amounts through the year 2023.
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OTHER ASSETS, NET (Details) (USD $)
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Jun. 30, 2013
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Jun. 30, 2012
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Other Assets, Net [Line Items] | ||
Accounts receivable, net | $ 1,957,000 | $ 1,641,000 |
Prepaid expenses | 581,000 | 945,000 |
Inventory - hotel | 918,000 | 907,000 |
Miscellaneous assets, net | 2,435,000 | 1,880,000 |
Total other assets | $ 5,891,000 | $ 5,373,000 |