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4. INVESTMENT IN UNCONSOLIDATED INVESTEES

6 Months Ended

Jun. 30, 2014

INVESTMENT IN UNCONSOLIDATED INVESTEES

Investments in unconsolidated investees in which we have a 20% to 50% interest or otherwise exercise significant influence are carried at cost and adjusted for the Company’s proportionate share of their undistributed earnings or losses under the equity method of accounting.

Investments in unconsolidated investees consist of the following:

	Percentage ownership as of
	June 30, 2014			June 30, 2013
Gruppa Florentina, LLC		20.00	%		20.00	%

Gruppa Florentina, LLC is the sole member of Milano Restaurants International Corporation, (“Milano”) which operates 35 pizza parlors under the trade name “Me-N-Ed’s Pizza Parlors” located primarily in Central and Northern California. Milano has a 100% ownership interest in SienaCorp, which operates two grills under the trade names “Me-N-Ed’s Victory Grill” and “Me-N-Ed’s Coney Island Grill”. Milano has a 100% ownership interest in Piazza del Pane, Inc., which operates two restaurants located in Central California. Milano also has 23 franchised locations, including two operating, under the trade name Angelo & Vito’s Pizzerias.

The following is a summary of the financial position and results of operations from our investees (dollars in thousands):

As of June 30,	2014			2013
Real estate, net of accumulated depreciation	$	10,832		$	11,153
Notes receivable		6,934			6,367
Other assets		31,107			31,589
Notes payable		(11,002	)		(12,490	)
Other liabilities		(6,631	)		(7,093	)
Shareholders' equity		(31,240	)		(29,526	)

For the Six Months Ended June 30,		2014			2013
Revenue	$	23,990		$	23,029
Depreciation		(575	)		(589	)
Operating expenses		(22,121	)		(20,946	)
Interest expense		(445	)		(534	)
Income from continuing operations		849			960
Income from discontinued operations		-			-
Net income	$	849		$	960

Company's proportionate share of earnings (1)	$	170		$	192

(1) Earnings represents continued and discontinued operations

- Definition

The entire disclosure for equity method investments and joint ventures. Equity method investments are investments that give the investor the ability to exercise significant influence over the operating and financial policies of an investee. Joint ventures are entities owned and operated by a small group of businesses as a separate and specific business or project for the mutual benefit of the members of the group.

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