Segment Reporting

3 Months Ended

Mar. 31, 2020

The Company has determined that it has four reportable segments based on how management reviews and manages its business. These reportable segments include: Net Lease, Real Estate Finance, Operating Properties and Land and Development. The Net Lease segment includes the Company's activities and operations related to the ownership of properties generally leased to single corporate tenants and its investment in SAFE (refer to Note 8). 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 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):



	Net Lease			Real Estate Finance			Operating Properties			Land and Development			Corporate/Other⁽¹⁾			Company Total
Three Months Ended March 31, 2020:
Operating lease income	$	41,464		$	—		$	5,774		$	108		$	—		$	47,346
Interest income	823			16,393			—			—			—			17,216
Interest income from sales-type leases	8,355			—			—			—			—			8,355
Other income	4,293			306			3,157			624			11,988			20,368
Land development revenue	—			—			—			80,176			—			80,176
Earnings (losses) from equity method investments	19,531			—			(2,667		)	584			(836		)	16,612
Total revenue and other earnings	74,466			16,699			6,264			81,492			11,152			190,073
Real estate expense	(6,229		)	—			(7,663		)	(8,606		)	—			(22,498		)
Land development cost of sales	—			—			—			(77,059		)	—			(77,059		)
Other expense	—			(19		)	—			—			(55		)	(74		)
Allocated interest expense	(24,478		)	(6,199		)	(2,259		)	(4,570		)	(5,886		)	(43,392		)
Allocated general and administrative⁽²⁾	(6,989		)	(2,097		)	(789		)	(2,819		)	(5,307		)	(18,001		)
Segment profit (loss)⁽³⁾	$	36,770		$	8,384		$	(4,447	)	$	(11,562	)	$	(96	)	$	29,049
Other significant items:
Provision for loan losses	$	137		$	3,866		$	—		$	—		$	—		$	4,003
Provision for losses on net investment in leases	1,292			—			—			—			—			1,292
Impairment of assets	1,708			—			—			—			—			1,708
Depreciation and amortization	12,656			—			1,284			243			303			14,486
Capitalized expenditures	1,846			—			917			12,027			—			14,790

Three Months Ended March 31, 2019:
Operating lease income	$	49,482		$	—		$	9,356		$	77		$	—		$	58,915
Interest income	—			20,375			—			—			—			20,375
Other income	3,420			2,189			2,375			3,447			3,382			14,813
Land development revenue	—			—			—			12,699			—			12,699
Earnings (losses) from equity method investments	7,230			—			(2,410		)	287			202			5,309
Income from sales of real estate	—			—			9,407			—			—			9,407
Total revenue and other earnings	60,132			22,564			18,728			16,510			3,584			121,518
Real estate expense	(6,106		)	—			(11,033		)	(8,801		)	—			(25,940		)
Land development cost of sales	—			—			—			(14,449		)	—			(14,449		)
Other expense	—			(265		)	—			—			(243		)	(508		)
Allocated interest expense	(21,766		)	(8,413		)	(2,918		)	(5,127		)	(8,353		)	(46,577		)
Allocated general and administrative⁽²⁾	(5,678		)	(2,209		)	(761		)	(3,257		)	(4,945		)	(16,850		)
Segment profit (loss)⁽³⁾	$	26,582		$	11,677		$	4,016		$	(15,124	)	$	(9,957	)	$	17,194
Other significant items:
Recovery of loan losses	$	—		$	(97	)	$	—		$	—		$	—		$	(97	)
Impairment of assets	—			—			3,851			—			—			3,851
Depreciation and amortization	13,561			—			1,557			247			303			15,668
Capitalized expenditures	2,756			—			416			36,079			—			39,251



	Net Lease		Real Estate Finance		Operating Properties		Land and Development		Corporate/Other⁽¹⁾		Company Total
As of March 31, 2020
Real estate
Real estate, net	$	1,301,176	$	—	$	199,913	$	—	$	—	$	1,501,089
Real estate available and held for sale	25,730		—		8,661		—		—		34,391
Total real estate	1,326,906		—		208,574		—		—		1,535,480
Net investment in leases	409,976		—		—		—		—		409,976
Land and development, net	—		—		—		514,064		—		514,064
Loans receivable and other lending investments, net	43,344		807,491		—		—		—		850,835
Other investments	880,534		—		60,009		36,672		52,337		1,029,552
Total portfolio assets	$	2,660,760	$	807,491	$	268,583	$	550,736	$	52,337	4,339,907
Cash and other assets											882,674
Total assets											$	5,222,581

As of December 31, 2019
Real estate
Real estate, net	$	1,327,082	$	—	$	200,137	$	—	$	—	$	1,527,219
Real estate available and held for sale	—		—		8,650		—		—		8,650
Total real estate	1,327,082		—		208,787		—		—		1,535,869
Net investment in leases	418,915		—		—		—		—		418,915
Land and development, net	—		—		—		580,545		—		580,545
Loans receivable and other lending investments, net	44,339		783,522		—		—		—		827,861
Other investments	760,068		—		61,686		42,866		43,255		907,875
Total portfolio assets	$	2,550,404	$	783,522	$	270,473	$	623,411	$	43,255	4,271,065
Cash and other assets											814,044
Total assets											$	5,085,109

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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 $16.3 million and $4.2 million for the three months ended March 31, 2020 and 2019, respectively.


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



	For the Three Months Ended March 31,
	2020			2019
Segment profit	$	29,049		$	17,194
Add/Less: (Provision for) recovery of loan losses	(4,003		)	97
Less: Provision for losses on net investment in leases	(1,292		)	—
Less: Impairment of assets	(1,708		)	(3,851		)
Less: Stock-based compensation expense	(16,270		)	(4,249		)
Less: Depreciation and amortization	(14,486		)	(15,668		)
Less: Income tax expense	(60		)	(25		)
Less: Loss on early extinguishment of debt, net	(4,115		)	(468		)
Net loss	$	(12,885	)	$	(6,970	)