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Segment Reporting

6 Months Ended

Jun. 30, 2022

Note 17—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: Net Lease, Real Estate Finance, Operating Properties and Land and Development. The Net Lease segment (refer to Note 3 - Net Lease Sale and Discontinued Operations) includes the Company’s investments in SAFE and its Ground Lease adjacent businesses (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		Real Estate		Operating		Land and		Corporate/		Company
	Lease		Finance		Properties		Development		Other⁽¹⁾		Total
Three Months Ended June 30, 2022
Operating lease income	$	—	$	—	$	3,082	$	100	$	—	$	3,182
Interest income		—		4,221		—		—		—		4,221
Interest income from sales-type leases		376		—		—		—		—		376
Other income		5,219		26		7,592		1,318		1,726		15,881
Land development revenue		—		—		—		24,403		—		24,403
Earnings (losses) from equity method investments		15,240		769		3,673		100		(389)		19,393
Income from sales of real estate		—		—		—		—		—		—
Total revenue and other earnings		20,835		5,016		14,347		25,921		1,337		67,456
Real estate expense		(461)		—		(8,261)		(4,294)		—		(13,016)
Land development cost of sales		—		—		—		(24,095)		—		(24,095)
Other expense		(521)		(40)		—		(238)		(724)		(1,523)
Allocated interest expense		(13,162)		(2,196)		(1,139)		(2,745)		(4,907)		(24,149)
Allocated general and administrative⁽²⁾		(3,838)		(1,226)		(625)		(2,114)		(4,941)		(12,744)

Segment profit (loss)⁽³⁾	$	2,853	$	1,554	$	4,322	$	(7,565)	$	(9,235)	$	(8,071)
Other significant items:
Provision for loan losses	$	—	$	22,578	$	—	$	—	$	—	$	22,578
Provision for losses on net investment in leases		99		—		—		—		—		99
Impairment of assets		—		—		1,750		—		18		1,768
Depreciation and amortization		—		—		969		227		142		1,338
Capitalized expenditures		—		—		320		5,813		—		6,133

Three Months Ended June 30, 2021
Operating lease income	$	—	$	—	$	4,703	$	89	$	—	$	4,792
Interest income		299		7,785		—		—		—		8,084
Interest income from sales-type leases		157		—		—		—		—		157
Other income		3,529		52		3,953		1,315		54		8,903
Land development revenue		—		—		—		32,318		—		32,318
Earnings (losses) from equity method investments		9,703		755		(2,935)		1,474		2,101		11,098
Income from sales of real estate		—		—		96		—		—		96
Total revenue and other earnings		13,688		8,592		5,817		35,196		2,155		65,448
Real estate expense		(12)		—		(6,256)		(5,049)		—		(11,317)
Land development cost of sales		—		—		—		(30,803)		—		(30,803)
Other expense		—		(87)		—		—		(124)		(211)
Allocated interest expense		(14,566)		(3,828)		(2,030)		(3,864)		(4,353)		(28,641)
Allocated general and administrative⁽²⁾		(6,120)		(1,242)		(664)		(2,367)		(5,210)		(15,603)
Segment profit (loss) ⁽³⁾		(7,010)	$	3,435	$	(3,133)	$	(6,887)	$	(7,532)	$	(21,127)
Other significant non-cash items:
Provision for (recovery of) loan losses	$	—	$	(2,158)	$	—	$	—	$	—	$	(2,158)
Provision for losses on net investment in leases		779		—		—		—		—		779
Depreciation and amortization		1		—		1,221		228		123		1,573
Capitalized expenditures		—		—		432		4,571		—		5,003


Six Months Ended June 30, 2022
Operating lease income	$	—	$	—	$	6,056	$	235	$	—	$	6,291
Interest income		75		9,094		—		—		—		9,169
Interest income from sales-type leases		732		—		—		—		—		732
Other income		9,680		37		10,255		2,635		1,914		24,521
Land development revenue		—		—		—		39,303		—		39,303
Earnings from equity method investments		33,038		1,783		3,718		3,665		2,221		44,425
Income from sales of real estate		492		—		—		—		—		492
Total revenue and other earnings		44,017		10,914		20,029		45,838		4,135		124,933
Real estate expense		(657)		—		(14,133)		(8,343)		—		(23,133)
Land development cost of sales		—		—		—		(38,591)		—		(38,591)
Other expense		(992)		(159)		—		(320)		(982)		(2,453)
Allocated interest expense		(29,377)		(5,336)		(2,480)		(6,988)		(9,211)		(53,392)
Allocated general and administrative⁽³⁾		(8,854)		(2,350)		(1,103)		(4,369)		(9,870)		(26,546)
Segment profit (loss)⁽⁴⁾	$	4,137	$	3,069	$	2,313	$	(12,773)	$	(15,928)	$	(19,182)
Other significant items:
Provision for loan losses	$	—	$	22,713	$	—	$	—	$	—	$	22,713
Provision for losses on net investment in leases		380		—		—		—		—		380
Impairment of assets		—		—		1,750		—		18		1,768
Depreciation and amortization		—		—		1,955		456		284		2,695
Capitalized expenditures		—		—		540		10,524		—		11,064

Six Months Ended June 30, 2021
Operating lease income	$	—	$	—	$	9,540	$	183	$	—	$	9,723
Interest income		317		17,557		—		—		—		17,874
Interest income from sales-type leases		157		—		—		—		—		157
Other income		7,007		151		6,291		2,704		5,764		21,917
Land development revenue		—		—		—		64,567		—		64,567
Earnings (losses) from equity method investments		21,115		1,220		(6,682)		4,619		2,594		22,866
Income from sales of real estate		—		—		708		—		—		708
Total revenue and other earnings		28,596		18,928		9,857		72,073		8,358		137,812
Real estate expense		(468)		—		(10,055)		(9,512)		—		(20,035)
Land development cost of sales		—		—		—		(60,126)		—		(60,126)
Other expense		—		(153)		—		—		(310)		(463)
Allocated interest expense		(28,891)		(8,406)		(4,073)		(7,802)		(8,278)		(57,450)

Allocated general and administrative⁽³⁾		(12,057)		(2,701)		(1,324)		(4,795)		(10,657)		(31,534)
Segment profit (loss)⁽⁴⁾	$	(12,820)	$	7,668	$	(5,595)	$	(10,162)	$	(10,887)	$	(31,796)
Other significant items:
Recovery of loan losses	$	—	$	(5,800)	$	—	$	—	$	—	$	(5,800)
Provision for losses on net investment in leases		780		—		—		—		—		780
Impairment of assets		—		—		257		—		—		257
Depreciation and amortization		—		—		3,208		446		320		3,974
Capitalized expenditures		—		—		489		9,311		—		9,800

As of June 30, 2022
Real estate, net	$	—	$	—	$	90,231	$	—	$	—	$	90,231
Real estate available and held for sale		—		—		1,970		—		—		1,970
Total real estate		—		—		92,201		—		—		92,201
Real estate and other assets available and held for sale and classified as discontinued operations⁽¹⁾		11,518		—		—		—		—		11,518
Net investment in leases		31,999		—		—		—		—		31,999
Land and development, net		—		—		—		259,718		—		259,718
Loans receivable and other lending investments, net		—		204,252		—		—		—		204,252
Loan receivable held for sale		—		—		—		—		—		—
Other investments		1,471,053		23,219		38,168		290		24,062		1,556,792
Total portfolio assets		1,514,570		227,471		130,369		260,008		24,062		2,156,480
Cash and other assets												1,454,140
Total assets											$	3,610,620

As of December 31, 2021
Real estate, net	$	—	$	—	$	92,150	$	—	$	—	$	92,150
Real estate available and held for sale		—		—		301		—		—		301
Total real estate		—		—		92,451		—		—		92,451
Real estate and other assets available and held for sale and classified as discontinued operations⁽¹⁾		2,299,711		—		—		—		—		2,299,711
Net investment in leases		43,215		—		—		—		—		43,215
Land and development, net		—		—		—		286,810		—		286,810
Loans receivable and other lending investments, net		—		332,844		—		—		—		332,844
Loan receivable held for sale		43,215		—		—		—		—		43,215
Other investments		1,186,162		48,862		43,252		1,096		17,909		1,297,281
Total portfolio assets	$	3,572,303	$	381,706	$	135,703	$	287,906	$	17,909		4,395,527
Cash and other assets												445,007
Total assets											$	4,840,534

(1)	Refer to Note 3 – Net Lease Sale and Discontinued Operations.

(2)

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.

(3)	General and administrative excludes stock-based compensation of ($17.9) million and $14.8 million for the three months ended June 30, 2022 and 2021, respectively, and ($30.4) million and $20.3 million for the six months ended June 30, 2022 and 2021, respectively.

(4)	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,
	2022		2021		2022		2021
Segment loss	$	(8,071)	$	(21,127)	$	(19,182)	$	(31,796)
Less: (Provision for) recovery of loan losses		(22,578)		2,158		(22,713)		5,800
Less: Provision for losses on net investment in leases		(99)		(779)		(380)		(780)
Less: Impairment of assets		(1,768)		—		(1,768)		(257)
Less: Stock-based compensation income (expense)		17,923		(14,791)		30,350		(20,299)
Less: Depreciation and amortization		(1,338)		(1,573)		(2,695)		(3,974)
Less: Income tax (expense) benefit		—		(619)		(3)		79
Less: Loss on early extinguishment of debt, net		(116,563)		—		(117,991)		—
Less: Net income from discontinued operations		—		25,315		797,688		47,800
Net income (loss)	$	(132,494)	$	(11,416)	$	663,306	$	(3,427)

- Definition

The entire disclosure for reporting segments including data and tables. Reportable segments include those that meet any of the following quantitative thresholds a) it's reported revenue, including sales to external customers and intersegment sales or transfers is 10 percent or more of the combined revenue, internal and external, of all operating segments b) the absolute amount of its reported profit or loss is 10 percent or more of the greater, in absolute amount of 1) the combined reported profit of all operating segments that did not report a loss or 2) the combined reported loss of all operating segments that did report a loss c) its assets are 10 percent or more of the combined assets of all operating segments.

+ References

Reference 1: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 31
-URI http://asc.fasb.org/extlink&oid=123359005&loc=d3e8924-108599

Reference 2: http://www.xbrl.org/2003/role/disclosureRef
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+ Details