Segment Reporting

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 Lease, Operating Properties and Land and Development. The Real Estate Finance segment includes all of the Company's activities related to senior and mezzanine real estate loans and real estate related securities. The Net Lease segment includes the Company's activities and operations related to the ownership of properties generally leased to single corporate tenants. The Operating Properties segment includes the Company's activities and operations related to its commercial and residential properties. The Land and Development 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. The Company's segment information is as follows ($ in thousands):



	Real Estate Finance			Net Lease			Operating Properties			Land and Development			Corporate/Other⁽¹⁾			Company Total
Three Months Ended June 30, 2017:
Operating lease income	$	—		$	30,852		$	15,940		$	210		$	—		$	47,002
Interest income	28,645			—			—			—			—			28,645
Other income	479			550			13,333			123,871			1,277			139,510
Land development revenue	—			—			—			132,710			—			132,710
Earnings from equity method investments	—			1,080			469			3,606			360			5,515
Income from discontinued operations	—			173			—			—			—			173
Gain from discontinued operations	—			123,418			—			—			—			123,418
Income from sales of real estate	—			—			844			—			—			844
Total revenue and other earnings	29,124			156,073			30,586			260,397			1,637			477,817
Real estate expense	—			(4,064		)	(22,653		)	(7,967		)	—			(34,684		)
Land development cost of sales	—			—			—			(122,466		)	—			(122,466		)
Other expense	(399		)	—			—			—			(15,877		)	(16,276		)
Allocated interest expense	(10,508		)	(13,669		)	(5,006		)	(7,122		)	(12,502		)	(48,807		)
Allocated general and administrative⁽²⁾	(4,691		)	(5,921		)	(2,364		)	(5,004		)	(5,323		)	(23,303		)
Segment profit (loss)⁽³⁾	$	13,526		$	132,419		$	563		$	117,838		$	(32,065	)	$	232,281
Other significant items:
Recovery of loan losses	$	(600	)	$	—		$	—		$	—		$	—		$	(600	)
Impairment of assets	—			219			—			10,065			—			10,284
Depreciation and amortization	—			7,400			4,923			521			327			13,171
Capitalized expenditures	—			917			8,355			30,286			—			39,558

Three Months Ended June 30, 2016:
Operating lease income	$	—		$	32,042		$	17,828		$	105		$	—		$	49,975
Interest income	34,400			—			—			—			—			34,400
Other income	323			432			7,213			1,167			961			10,096
Land development revenue	—			—			—			27,888			—			27,888
Earnings from equity method investments	—			944			31,076			2,688			4,739			39,447
Income from discontinued operations	—			3,633			—			—			—			3,633
Income from sales of real estate	—			4,338			39,146			—			—			43,484
Total revenue and other earnings	34,723			41,389			95,263			31,848			5,700			208,923
Real estate expense	—			(4,618		)	(20,796		)	(9,914		)	—			(35,328		)
Land development cost of sales	—			—			—			(17,262		)	—			(17,262		)
Other expense	(925		)	—			—			—			(2,257		)	(3,182		)
Allocated interest expense	(14,631		)	(16,464		)	(5,849		)	(8,668		)	(10,435		)	(56,047		)
Allocated general and administrative⁽²⁾	(3,786		)	(4,313		)	(1,638		)	(3,327		)	(4,968		)	(18,032		)
Segment profit (loss)⁽³⁾	$	15,381		$	15,994		$	66,980		$	(7,323	)	$	(11,960	)	$	79,072
Other significant items:
Provision for loan losses	$	700		$	—		$	—		$	—		$	—		$	700
Impairment of assets	—			—			3,012			—			—			3,012
Depreciation and amortization	—			7,977			5,022			400			274			13,673
Capitalized expenditures	—			1,625			12,446			32,006			—			46,077



	Real Estate Finance			Net Lease			Operating Properties			Land and Development			Corporate/Other⁽¹⁾			Company Total
Six Months Ended June 30, 2017:
Operating lease income	$	—		$	62,104		$	31,929		$	316		$	—		$	94,349
Interest income	57,703			—			—			—			—			57,703
Other income	556			1,056			23,688			124,256			1,818			151,374
Land development revenue	—			—			—			152,760			—			152,760
Earnings from equity method investments	—			2,062			1,101			7,448			606			11,217
Income from discontinued operations	—			4,939			—			—			—			4,939
Gain from discontinued operations	—			123,418			—			—			—			123,418
Income from sales of real estate	—			6,212			2,742			—			—			8,954
Total revenue and other earnings	58,259			199,791			59,460			284,780			2,424			604,714
Real estate expense	—			(8,640		)	(44,171		)	(17,463		)	—			(70,274		)
Land development cost of sales	—			—			—			(138,376		)	—			(138,376		)
Other expense	(1,004		)	—			—			—			(17,141		)	(18,145		)
Allocated interest expense	(22,396		)	(29,404		)	(10,612		)	(15,240		)	(22,300		)	(99,952		)
Allocated general and administrative⁽²⁾	(8,287		)	(10,563		)	(4,119		)	(8,930		)	(10,697		)	(42,596		)
Segment profit (loss)⁽³⁾	$	26,572		$	151,184		$	558		$	104,771		$	(47,714	)	$	235,371
Other significant non-cash items:
Recovery of loan losses	$	(5,528	)	$	—		$	—		$	—		$	—		$	(5,528	)
Impairment of assets	—			219			4,413			10,064			—			14,696
Depreciation and amortization	—			15,039			8,962			791			659			25,451
Capitalized expenditures	—			1,687			16,566			56,879			—			75,132

Six Months Ended June 30, 2016:
Operating lease income	$	—		$	63,350		$	36,909		$	211		$	—		$	100,470
Interest income	67,620			—			—			—			—			67,620
Other income	1,620			512			14,557			2,232			2,715			21,636
Land development revenue	—			—			—			42,835			—			42,835
Earnings from equity method investments	—			1,890			30,934			9,348			5,542			47,714
Income from discontinued operations	—			7,214			—			—			—			7,214
Income from sales of real estate	—			9,267			44,676			—			—			53,943
Total revenue and other earnings	69,240			82,233			127,076			54,626			8,257			341,432
Real estate expense	—			(9,065		)	(41,916		)	(18,591		)	—			(69,572		)
Land development cost of sales	—			—			—			(28,838		)	—			(28,838		)
Other expense	(839		)	—			—			—			(3,083		)	(3,922		)
Allocated interest expense	(29,333		)	(32,700		)	(12,469		)	(17,027		)	(21,539		)	(113,068		)
Allocated general and administrative⁽²⁾	(7,617		)	(8,609		)	(3,508		)	(6,597		)	(10,226		)	(36,557		)
Segment profit (loss)⁽³⁾	$	31,451		$	31,859		$	69,183		$	(16,427	)	$	(26,591	)	$	89,475
Other significant non-cash items:
Provision for loan losses	$	2,206		$	—		$	—		$	—		$	—		$	2,206
Impairment of assets	—			—			3,012			—			—			3,012
Depreciation and amortization	—			16,028			10,305			699			549			27,581
Capitalized expenditures	—			2,476			28,243			66,274			—			96,993



	Real Estate Finance		Net Lease		Operating Properties		Land and Development		Corporate/Other⁽¹⁾		Company Total

As of June 30, 2017
Real estate
Real estate, net	$	—	$	863,406	$	479,576	$	—	$	—	$	1,342,982
Real estate available and held for sale	—		924		67,121		—		—		68,045
Total real estate	—		864,330		546,697		—		—		1,411,027
Land and development, net	—		—		—		855,497		—		855,497
Loans receivable and other lending investments, net	1,170,565		—		—		—		—		1,170,565
Other investments	—		179,284		7,882		62,417		27,238		276,821
Total portfolio assets	$	1,170,565	$	1,043,614	$	554,579	$	917,914	$	27,238	3,713,910
Cash and other assets											1,200,845
Total assets											$	4,914,755

As of December 31, 2016
Real estate
Real estate, net	$	—	$	911,112	$	476,162	$	—	$	—	$	1,387,274
Real estate available and held for sale	—		155,051		82,480		—		—		237,531
Total real estate	—		1,066,163		558,642		—		—		1,624,805
Land and development, net	—		—		—		945,565		—		945,565
Loans receivable and other lending investments, net	1,450,439		—		—		—		—		1,450,439
Other investments	—		92,669		3,583		84,804		33,350		214,406
Total portfolio assets	$	1,450,439	$	1,158,832	$	562,225	$	1,030,369	$	33,350	4,235,215
Cash and other assets											590,299
Total assets											$	4,825,514

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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 included in the other reportable segments above.


(2)	General and administrative excludes stock-based compensation expense of $3.9 million and $9.8 million for the three and six months ended June 30, 2017 respectively, and $1.6 million and $6.2 million for the three and six months ended June 30, 2016, respectively.


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



	For the Three Months Ended June 30,						For the Six Months Ended June 30,
	2017			2016			2017			2016
Segment profit	$	232,281		$	79,072		$	235,371		$	89,475
Less: Recovery of (provision for) loan losses	600			(700		)	5,528			(2,206		)
Less: Impairment of assets	(10,284		)	(3,012		)	(14,696		)	(3,012		)
Less: Stock-based compensation expense	(3,915		)	(1,633		)	(9,796		)	(6,211		)
Less: Depreciation and amortization	(13,171		)	(13,673		)	(25,451		)	(27,581		)
Less: Income tax (expense) benefit	(1,644		)	1,190			(2,251		)	1,604
Less: Income tax expense from discontinued operations	(4,545		)	—			(4,545		)	—
Less: Loss on early extinguishment of debt, net	(3,315		)	(1,457		)	(3,525		)	(1,582		)
Net income	$	196,007		$	59,787		$	180,635		$	50,487