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OPERATING SEGMENTS
 3 Months Ended
Mar. 31, 2014
OPERATING SEGMENTS  
OPERATING SEGMENTS

NOTE 7. 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.

 

The segment labeled as “Other” consists of revenue and operating expenses related to the notes receivable and corporate debt.

 

Presented below is our reportable segments’ operating income for the three months ended March 31, 2014 and 2013, including segment assets and expenditures (dollars in thousands):

 

 

 

Commercial

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

For the Three Months Ended March 31, 2014

 

Properties

 

 

Apartments

 

 

Hotels

 

 

Land

 

 

Other

 

 

Total

 

Rental and other property revenues

 

$

4,892

 

 

$

15,681

 

 

$

-

 

 

$

-

 

 

$

10

 

 

$

20,583

 

Property operating expenses

 

 

3,205

 

 

 

6,796

 

 

 

-

 

 

 

311

 

 

 

5

 

 

 

10,317

 

Depreciation

 

 

1,820

 

 

 

2,691

 

 

 

-

 

 

 

-

 

 

 

(35

)

 

 

4,476

 

Mortgage and loan interest

 

 

1,486

 

 

 

4,196

 

 

 

-

 

 

 

1,050

 

 

 

1,742

 

 

 

8,474

 

Deferred borrowing costs amortization

 

 

13

 

 

 

888

 

 

 

-

 

 

 

35

 

 

 

3

 

 

 

939

 

Loan charges and prepayment penalties

 

 

9

 

 

 

1,573

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

1,582

 

Interest income

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

4,117

 

 

 

4,117

 

Gain on land sales

 

 

-

 

 

 

-

 

 

 

-

 

 

 

753

 

 

 

-

 

 

 

753

 

Segment operating income (loss)

 

$

(1,641

)

 

$

(463

)

 

$

-

 

 

$

(643

)

 

$

2,412

 

 

$

(335

)

Capital expenditures

 

 

1,130

 

 

 

-

 

 

 

-

 

 

 

85

 

 

 

-

 

 

 

1,215

 

Real estate assets

 

 

130,838

 

 

 

375,296

 

 

 

-

 

 

 

167,692

 

 

 

-

 

 

 

673,826

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Property Sales

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Sales price

 

$

-

 

 

$

23,131

 

 

$

-

 

 

$

1,565

 

 

$

-

 

 

$

24,696

 

Cost of sale

 

 

-

 

 

 

17,078

 

 

 

-

 

 

 

812

 

 

 

-

 

 

 

17,890

 

Gain on sale

 

$

-

 

 

$

6,053

 

 

$

-

 

 

$

753

 

 

$

-

 

 

$

6,806

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Commercial

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

For the Three Months Ended March 31, 2013

 

Properties

 

 

Apartments

 

 

Hotels

 

 

Land

 

 

Other

 

 

Total

 

Rental and other property revenues

 

$

5,377

 

 

$

14,932

 

 

$

-

 

 

$

34

 

 

$

7

 

 

$

20,350

 

Property operating expenses

 

 

3,271

 

 

 

6,365

 

 

 

-

 

 

 

369

 

 

 

(23

)

 

 

9,982

 

Depreciation

 

 

1,113

 

 

 

2,701

 

 

 

-

 

 

 

-

 

 

 

(59

)

 

 

3,755

 

Mortgage and loan interest

 

 

1,341

 

 

 

4,665

 

 

 

-

 

 

 

1,536

 

 

 

1,902

 

 

 

9,444

 

Deferred borrowing costs amortizaion

 

 

22

 

 

 

2,342

 

 

 

-

 

 

 

61

 

 

 

36

 

 

 

2,461

 

Loan charges and prepayment penalties

 

 

-

 

 

 

3,937

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

3,937

 

Interest income

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

3,541

 

 

 

3,541

 

Loss on land sales

 

 

-

 

 

 

-

 

 

 

-

 

 

 

(35

)

 

 

-

 

 

 

(35

)

Segment operating income (loss)

 

$

(370

)

 

$

(5,078

)

 

$

-

 

 

$

(1,967

)

 

$

1,692

 

 

$

(5,723

)

Capital expenditures

 

 

678

 

 

 

31

 

 

 

-

 

 

 

53

 

 

 

-

 

 

 

762

 

Real estate assets

 

 

138,683

 

 

 

385,672

 

 

 

-

 

 

 

209,773

 

 

 

-

 

 

 

734,128

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Property Sales

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Sales price

 

$

-

 

 

$

25,300

 

 

$

-

 

 

$

2,250

 

 

$

-

 

 

$

27,550

 

Cost of sale

 

 

-

 

 

 

18,073

 

 

 

-

 

 

 

2,285

 

 

 

-

 

 

 

20,358

 

Gain (loss) on sale

 

$

-

 

 

$

7,227

 

 

$

-

 

 

$

(35

)

 

$

-

 

 

$

7,192

 

 

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

 

 

 

For the Three Months Ended

 

 

 

March 31,

 

 

 

2014

 

 

2013

 

Segment operating loss

 

$

(335

)

 

$

(5,723

)

Other non-segment items of income (expense)

 

 

 

 

 

 

 

 

General and administrative

 

 

(1,994

)

 

 

(2,012

)

Net income fee to related party

 

 

(490

)

 

 

(56

)

Advisory fee to related party

 

 

(2,242

)

 

 

(2,554

)

Other income

 

 

178

 

 

 

2,536

 

Loss on sale of investments

 

 

-

 

 

 

(8

)

Earnings from unconsolidated investees

 

 

70

 

 

 

213

 

Litigation settlement

 

 

3,839

 

 

 

(45

)

Income tax benefit

 

 

1,870

 

 

 

2,673

 

Net income (loss) from continuing operations

 

$

896

 

 

$

(4,976

)

 

 

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

 

 

 

March 31,

 

 

 

2014

 

 

2013

 

Segment assets

 

$

673,826

 

 

$

734,128

 

Investments in unconsolidated investees

 

 

3,990

 

 

 

10,089

 

Notes and interest receivable

 

 

129,220

 

 

 

101,697

 

Other assets

 

 

133,120

 

 

 

244,505

 

Total assets

 

$

940,156

 

 

$

1,090,419