Segment Reporting (Tables)

3 Months Ended

Mar. 31, 2013

Schedule of financial measures for each segment based on which performance is evaluated

The Company has determined that it has four reportable segments based on how management reviews and manages its business. These reportable segments include: Real Estate Finance, Net Leasing, Operating Properties and Land. The Real Estate Finance segment includes all of the Company's activities related to senior and mezzanine real estate loans. The Net Leasing segment includes all of the Company's activities related to the ownership and leasing of corporate facilities. The Operating Properties segment includes all of the Company's activities and operations related to its commercial and residential properties. The Land segment includes the Company's activities related to its developable land portfolio.

The Company evaluates performance based on the following financial measures for each segment, and has conformed the prior periods presentation for the change in composition of its business segments, ($ in thousands):



	Real Estate Finance			Net Leasing			Operating Property			Land			Corporate/ Other(1)			Company Total
For the Three Months Ended March 31, 2013
Operating lease income	$	—		$	37,109		$	21,364		$	—		$	—		$	58,473
Interest income	24,667			—			—			—			—			24,667
Other income	2,208			—			8,112			500			573			11,393
Total revenue	$	26,875		$	37,109		$	29,476		$	500		$	573		$	94,533
Earnings (loss) from equity method investments	—			686			2,657			(1,579		)	19,914			21,678
Income from sales of residential property	—			—			23,697			—			—			23,697
Net operating income from discontinued operations(2)	—			260			734			—			—			994
Gain from discontinued operations	—			29			5,015			—			—			5,044
Revenue and other earnings	$	26,875		$	38,084		$	61,579		$	(1,079	)	$	20,487		$	145,946
Real estate expense	—			(5,677		)	(25,736		)	(6,503		)	—			(37,916		)
Other expense	(1,444		)	—			—			—			(4,181		)	(5,625		)
Direct expenses	$	(1,444	)	$	(5,677	)	$	(25,736	)	$	(6,503	)	$	(4,181	)	$	(43,541	)
Direct segment profit (loss)	$	25,431		$	32,407		$	35,843		$	(7,582	)	$	16,306		$	102,405
Allocated interest expense(3)	(19,952		)	(20,745		)	(14,622		)	(9,288		)	(6,959		)	(71,566		)
Allocated general and administrative(4)	(3,074		)	(3,052		)	(2,231		)	(1,849		)	(6,440		)	(16,646		)
Segment profit (loss)(5)	$	2,405		$	8,610		$	18,990		$	(18,719	)	$	2,907		$	14,193
Other significant non-cash items:
Provision for loan losses	$	10,206		$	—		$	—		$	—		$	—		$	10,206
Impairment of assets(3)	$	—		$	—		$	(32	)	$	—		$	—		$	(32	)
Depreciation and amortization(3)	$	—		$	9,642		$	7,206		$	264		$	342		$	17,454
Capitalized expenditures	$	—		$	3,766		$	4,921		$	7,627		$	—		$	16,314
As of March 31, 2013
Real estate
Real estate, at cost	$	—		$	1,627,279		$	769,708		$	793,356		$	—		$	3,190,343
Less: accumulated depreciation	—			(318,479		)	(84,504		)	(2,556		)	—			(405,539		)
Real estate, net	$	—		$	1,308,800		$	685,204		$	790,800		$	—		$	2,784,804
Real estate available and held for sale	—			9,766			409,579			179,716			—			599,061
Total real estate	$	—		$	1,318,566		$	1,094,783		$	970,516		$	—		$	3,383,865
Loans receivable, net	1,582,656			—			—			—			—			1,582,656
Other investments	—			16,397			20,308			3,854			363,200			403,759
Total portfolio assets	$	1,582,656		$	1,334,963		$	1,115,091		$	974,370		$	363,200		$	5,370,280
Cash and other assets																706,838
Total assets																$	6,077,118



	Real Estate Finance			Net Leasing			Operating Property			Land			Corporate/ Other(1)			Company Total
For the Three Months Ended March 31, 2012
Operating lease income	$	—		$	37,237		$	15,886		$	—		$	—		$	53,123
Interest income	37,203			—			—			—			—			37,203
Other income	67			—			8,883			—			1,806			10,756
Total revenue	$	37,270		$	37,237		$	24,769		$	—		$	1,806		$	101,082
Earnings (loss) from equity method investments	—			646			7,676			(1,552		)	28,016			34,786
Income from sales of residential property	—			—			6,733			—			—			6,733
Net operating income from discontinued operations(2)	—			3,348			436			—			—			3,784
Gain from discontinued operations	—			2,406			—			—			—			2,406
Revenue and other earnings	$	37,270		$	43,637		$	39,614		$	(1,552	)	$	29,822		$	148,791
Real estate expense	—			(5,144		)	(25,730		)	(4,194		)	—			(35,068		)
Other expense	(915		)	—			—			—			462			(453		)
Direct expenses	$	(915	)	$	(5,144	)	$	(25,730	)	$	(4,194	)	$	462		$	(35,521	)
Direct segment profit (loss)	$	36,355		$	38,493		$	13,884		$	(5,746	)	$	30,284		$	113,270
Allocated interest expense(3)	(34,274		)	(18,865		)	(14,958		)	(10,305		)	(7,741		)	(86,143		)
Allocated general and administrative(4)	(4,857		)	(2,514		)	(2,067		)	(1,905		)	(6,836		)	(18,179		)
Segment profit (loss)(5)	$	(2,776	)	$	17,114		$	(3,141	)	$	(17,956	)	$	15,707		$	8,948
Other significant non-cash items:
Provision for loan losses	$	17,500		$	—		$	—		$	—		$	—		$	17,500
Impairment of assets(3)	$	—		$	520		$	16,055		$	—		$	(551	)	$	16,024
Depreciation and amortization(3)	$	—		$	10,205		$	6,023		$	345		$	666		$	17,239
Capitalized expenditures	$	—		$	413		$	8,466		$	2,201		$	—		$	11,080
As of December 31, 2012
Real estate
Real estate, at cost	$	—		$	1,639,320		$	801,214		$	786,114		$	—		$	3,226,648
Less: accumulated depreciation	—			(315,699		)	(109,634		)	(2,292		)	—			(427,625		)
Real estate, net	$	—		$	1,323,621		$	691,580		$	783,822		$	—		$	2,799,023
Real estate available and held for sale	—			—			454,587			181,278			—			635,865
Total real estate	$	—		$	1,323,621		$	1,146,167		$	965,100		$	—		$	3,434,888
Loans receivable, net	1,829,985			—			—			—			—			1,829,985
Other investments	—			16,380			25,745			5,493			351,225			398,843
Total portfolio assets	$	1,829,985		$	1,340,001		$	1,171,912		$	970,593		$	351,225		$	5,663,716
Cash and other assets																487,073
Total assets																$	6,150,789

Explanatory Notes:

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(1)

Corporate/Other represents all corporate level and unallocated items including any intercompany eliminations necessary to reconcile to consolidated Company totals. This caption also includes the Company's joint venture investments and strategic investments that are not related to the other reportable segments above, including the Company's equity investment in LNR of $221.9 million and $205.8 million, as of March 31, 2013 and December 31, 2012, respectively, and the Company's share of equity in earnings from LNR of $14.7 million and $12.1 million for the three months ended March 31, 2013 and 2012, respectively. See Note 6 for further details on the Company's accounting policy for its investment in LNR and summarized financial information of LNR.


(2)	Includes revenue and real estate expense reclassified to discontinued operations on the Company's Consolidated Statements of Operations.


(3)	Includes related amounts reclassified to discontinued operations on the Company's Consolidated Statements of Operations.


(4)	General and administrative excludes stock-based compensation expense of $5.2 million and $4.7 million for the three months ended March 31, 2013 and 2012, respectively.


(5)	The following is a reconciliation of segment profit (loss) to net income (loss) ($ in thousands):



	For the Three Months Ended March 31,
	2013			2012
Segment profit (loss)	$	14,193		$	8,948
Less: Provision for loan losses	(10,206		)	(17,500		)
Less: Impairment of assets	32			(16,024		)
Less: Stock-based compensation expense	(5,202		)	(4,666		)
Less: Depreciation and amortization	(17,454		)	(17,239		)
Less: Income tax (expense) benefit	(4,075		)	(1,271		)
Add: Gain (loss) on early extinguishment of debt, net	(9,541		)	1,704
Net income (loss)	$	(32,253	)	$	(46,048	)

Reconciliation of segment profit (loss) to income (loss) from continuing operations

The following is a reconciliation of segment profit (loss) to net income (loss) ($ in thousands):



	For the Three Months Ended March 31,
	2013			2012
Segment profit (loss)	$	14,193		$	8,948
Less: Provision for loan losses	(10,206		)	(17,500		)
Less: Impairment of assets	32			(16,024		)
Less: Stock-based compensation expense	(5,202		)	(4,666		)
Less: Depreciation and amortization	(17,454		)	(17,239		)
Less: Income tax (expense) benefit	(4,075		)	(1,271		)
Add: Gain (loss) on early extinguishment of debt, net	(9,541		)	1,704
Net income (loss)	$	(32,253	)	$	(46,048	)

- Definition

Tabular disclosure of all significant reconciling items in the reconciliation of total profit or loss from reportable segments, to the entity's consolidated income before income taxes, extraordinary items, and discontinued operations.

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- Definition

Tabular disclosure of the profit or loss and total assets for each reportable segment. An entity discloses certain information on each reportable segment if the amounts (a) are included in the measure of segment profit or loss reviewed by the chief operating decision maker or (b) are otherwise regularly provided to the chief operating decision maker, even if not included in that measure of segment profit or loss.

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