NOTE 8. OPERATING SEGMENTS

Our segments are based on our method of internal reporting which classifies our operations by property type. Our property types are grouped into commercial, apartments, hotels, land and other operating segments. Significant differences among the accounting policies of the operating segments as compared to the consolidated financial statements principally involve the calculation and allocation of administrative and other expenses. Management evaluates the performance of each of the operating segments and allocates resources to them based on their net operating income and cash flow.

Items of income that are not reflected in the segments are interest, other income, gain on debt extinguishment, gain on condemnation award, equity in partnerships, and gains on sale of real estate. Expenses that are not reflected in the segments are provision for losses, advisory, net income and incentive fees, general and administrative, non-controlling interests and net loss from discontinued operations before gains on sale of real estate.

Presented below is our reportable segments' operating income for the three and six months ended June 30, 2011 and 2010, including segment assets and expenditures (dollars in thousands):


For the Three Months Ended June 30, 2011	Commercial Properties		Apartments		Hotels		Land		Other		Total
Operating revenue	$	14,982	$	20,109	$	2,259	$	200	$	(22)	$	37,528
Operating expenses		8,122		10,353		1,907		551		236		21,169
Depreciation and amortization		2,463		3,691		177		-		(86)		6,245
Mortgage and loan interest		3,233		8,649		649		2,786		2,414		17,731
Interest income		-		-		-		-		1,203		1,203
Gain on land sales		-		-		-		14,029		-		14,029

Segment operating gain (loss)	$	1,164	$	(2,584)	$	(474)	$	10,892	$	(1,383)	$	7,615

Capital expenditures		255		82		-		-		-		337
Assets		242,503		608,790		14,823		336,641		-		1,202,757

Property Sales
Sales price	$	67,397	$	-	$	2,525	$	60,377	$	-	$	130,299
Cost of sale		75,274		-		(1,114)		49,338		-		123,498
Deferred current gain		-		-		-		-		-		-
Recognized prior deferred gain		-		963		-		2,990		10,954		14,907

Gain (loss) on sale	$	(7,877)	$	963	$	3,639	$	14,029	$	10,954	$	21,708


For the Three Months Ended June 30, 2010	Commercial Properties		Apartments		Hotels		Land		Other		Total
Operating revenue	$	14,392	$	19,404	$	2,569	$	166	$	17	$	36,548
Operating expenses		8,670		10,976		1,976		1,649		35		23,306
Depreciation and amortization		2,653		4,020		181		-		(74)		6,780
Mortgage and loan interest		4,264		8,986		646		3,633		2,747		20,276
Interest income		-		-		-		-		1,326		1,326
Loss on land sales		-		-		-		(4,121)		-		(4,121)

Segment operating loss	$	(1,195)	$	(4,578)	$	(234)	$	(9,237)	$	(1,365)	$	(16,609)

Capital expenditures		333		-		-		-		-		333
Assets		251,279		565,691		17,433		528,271		(23,080)		1,339,594

Property Sales
Sales price	$	5,970	$	29,459	$	-	$	17,660	$	-	$	53,089
Cost of sale		6,184		22,897		-		23,300		-		52,381
Deferred current gain		-		6,487		-		-		-		6,487
Recognized prior deferred gain		-		5,799		-		1,519		-		7,318

Gain (loss) on sale	$	(214)	$	5,874	$	-	$	(4,121)	$	-	$	1,539

The table below reconciles the segment information to the corresponding amounts in the Consolidated Statements of Operations:


	For Three Months Ended June 30,
	2011		2010
Segment operating gain (loss)	$	7,615	$	(16,609)
Other non-segment items of income (expense)
General and administrative		(4,078)		(2,701)
Advisory fees		(3,462)		(3,993)
Provision on impairment of notes receivable and real estate assets		(444)		-
Other income		551		1,023
Gain on Foreign Currency Transactions		-		906
Equity in earnings of investees		22		(71)
Deferred tax benefit		2,469		1,454

Loss from continuing operations	$	2,673	$	(19,991)

The table below reconciles the segment information to the corresponding amounts in the Consolidated Balance Sheets:


	For Three Months Ended June 30,
	2011		2010
Segment assets	$	1,202,757	$	1,339,594
Investments in real estate partnerships		12,138		12,748
Other assets and receivables		186,456		201,095
Assets held for sale		-		211,920

Total assets	$	1,401,351	$	1,765,357


For the Six Months Ended June 30, 2011	Commercial Properties		Apartments		Hotels		Land		Other		Total
Operating revenue	$	29,352	$	40,125	$	4,162	$	469	$	(58)	$	74,050
Operating expenses		17,086		20,334		3,793		1,128		286		42,627
Depreciation and amortization		5,150		7,428		355		-		(174)		12,759
Mortgage and loan interest		6,762		16,052		1,298		6,586		3,978		34,676
Interest income		-		-		-		-		1,871		1,871
Gain on land sales		-		-		-		19,373		-		19,373

Segment operating gain (loss)	$	354	$	(3,689)	$	(1,284)	$	12,128	$	(2,277)	$	5,232

Capital expenditures		255		82		-		-		-		337
Assets		242,503		608,790		14,823		336,641		-		1,202,757

Property Sales
Sales price	$	109,411	$	-	$	2,525	$	127,547	$	-	$	239,483
Cost of sale		117,002		-		(1,114)		112,415		-		228,303
Deferred current gain		-		-		-		-		-		-
Recognized prior deferred gain		3,851		963		-		4,241		10,954		20,009

Gain on sale	$	(3,740)	$	963	$	3,639	$	19,373	$	10,954	$	31,189


For the Six Months Ended June 30, 2010	Commercial Properties		Apartments		Hotels		Land		Other		Total
Operating revenue	$	30,927	$	38,352	$	4,721	$	281	$	5	$	74,286
Operating expenses		17,896		21,522		3,942		2,466		108		45,934
Depreciation and amortization		5,307		7,534		366		-		(211)		12,996
Mortgage and loan interest		8,398		16,794		1,327		7,205		4,893		38,617
Interest income		-		-		-		-		2,828		2,828
Loss on land sales		-		-		-		(4,115)		-		(4,115)

Segment operating loss	$	(674)	$	(7,498)	$	(914)	$	(13,505)	$	(1,957)	$	(24,548)

Capital expenditures		333		-		-		-		-		333
Assets		251,279		565,691		17,433		527,871		(22,680)		1,339,594

Property Sales
Sales price	$	5,970	$	29,459	$	-	$	17,669	$	-	$	53,098
Cost of sale		6,184		22,897		-		23,303		-		52,384
Deferred current gain		-		6,487		-		-		-		6,487
Recognized prior deferred gain		-		5,799		-		1,519		-		7,318

Gain (loss) on sale	$	(214)	$	5,874	$	-	$	(4,115)	$	-	$	1,545

The table below reconciles the segment information to the corresponding amounts in the Consolidated Statements of Operations:


	For Six Months Ended June 30,
	2011		2010
Segment operating gain (loss)	$	5,232	$	(24,548)
Other non-segment items of income (expense)
General and administrative		(7,611)		(5,286)
Advisory fees		(6,984)		(8,046)
Provision on impairment of notes receivable and real estate assets		(6,503)		-
Other income		1,765		1,888
Gain on Foreign Currency Transactions		-		233
Equity in earnings of investees		(73)		(93)
Deferred tax benefit		3,521		2,188

Loss from continuing operations	$	(10,653)	$	(33,664)

The table below reconciles the segment information to the corresponding amounts in the Consolidated Balance Sheets:


	For Six Months Ended June 30,
	2011		2010
Segment assets	$	1,202,757	$	1,339,594
Investments in real estate partnerships		12,138		12,748
Other assets and receivables		186,456		201,095
Assets held for sale		-		211,920

Total assets	$	1,401,351	$	1,765,357