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OPERATING SEGMENTS
 3 Months Ended
Mar. 31, 2015
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, 2015 and 2014, including segment assets and expenditures (dollars in thousands):

 

 

 

Commercial

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

For the Three Months Ended March 31, 2015

 

Properties

 

 

Apartments

 

 

Hotels

 

 

Land

 

 

Other

 

 

Total

 

Rental and other property revenues

 

$

7,091

 

 

$

16,019

 

 

$

-

 

 

$

-

 

 

$

46

 

 

$

23,156

 

Property operating expenses

 

 

(4,267

)

 

 

(7,042

)

 

 

-

 

 

 

(349

)

 

 

(10

)

 

 

(11,668

)

Depreciation

 

 

(1,927

)

 

 

(2,795

)

 

 

-

 

 

 

-

 

 

 

18

 

 

 

(4,704

)

Mortgage and loan interest

 

 

(1,513

)

 

 

(4,073

)

 

 

-

 

 

 

(1,064

)

 

 

(2,543

)

 

 

(9,193

)

Deferred borrowing costs amortization

 

 

(103

)

 

 

(260

)

 

 

-

 

 

 

(52

)

 

 

(186

)

 

 

(601

)

Loan charges and prepayment penalties

 

 

-

 

 

 

(1,850

)

 

 

-

 

 

 

-

 

 

 

-

 

 

 

(1,850

)

Interest income

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

5,237

 

 

 

5,237

 

Gain on land sales

 

 

-

 

 

 

-

 

 

 

-

 

 

 

2,876

 

 

 

-

 

 

 

2,876

 

Segment operating income (loss)

 

$

(719

)

 

$

(1

)

 

$

-

 

 

$

1,411

 

 

$

2,562

 

 

$

3,253

 

Capital expenditures

 

 

3,192

 

 

 

257

 

 

 

-

 

 

 

826

 

 

 

-

 

 

 

4,275

 

Real estate assets

 

 

143,686

 

 

 

387,847

 

 

 

-

 

 

 

165,073

 

 

 

-

 

 

 

696,606

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Property Sales

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Sales price

 

$

-

 

 

$

-

 

 

$

-

 

 

$

7,257

 

 

$

-

 

 

$

7,257

 

Cost of sale

 

 

-

 

 

 

-

 

 

 

-

 

 

 

(4,381

)

 

 

-

 

 

 

(4,381

)

Gain on sale

 

$

-

 

 

$

-

 

 

$

-

 

 

$

2,876

 

 

$

-

 

 

$

2,876

 

 

 

 

Commercial

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

For the Three Months Ended March 31, 2014

 

Properties

 

 

Apartments

 

 

Hotels

 

 

Land

 

 

Other

 

 

Total

 

Rental and other property revenues

 

$

4,781

 

 

$

14,368

 

 

$

-

 

 

$

-

 

 

$

10

 

 

$

19,159

 

Property operating expenses

 

 

(3,147

)

 

 

(6,465

)

 

 

-

 

 

 

(311

)

 

 

(5

)

 

 

(9,928

)

Depreciation

 

 

(1,814

)

 

 

(2,534

)

 

 

-

 

 

 

-

 

 

 

35

 

 

 

(4,313

)

Mortgage and loan interest

 

 

(1,477

)

 

 

(3,849

)

 

 

-

 

 

 

(1,050

)

 

 

(1,743

)

 

 

(8,119

)

Deferred borrowing costs amortizaion

 

 

(13

)

 

 

(887

)

 

 

-

 

 

 

(35

)

 

 

(3

)

 

 

(938

)

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)

 

$

(1,679

)

 

$

(940

)

 

$

-

 

 

$

(643

)

 

$

2,411

 

 

$

(851

)

Capital expenditures

 

 

1,130

 

 

 

-

 

 

 

-

 

 

 

85

 

 

 

-

 

 

 

1,215

 

Real estate assets

 

 

130,221

 

 

 

350,226

 

 

 

-

 

 

 

167,692

 

 

 

-

 

 

 

648,139

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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

 

 

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

 

 

 

For the Three Months Ended

 

 

 

March 31,

 

 

 

2015

 

 

2014

 

Segment operating income (loss)

 

$

3,253

 

 

$

(851

)

Other non-segment items of income (expense)

 

 

 

 

 

 

 

 

General and administrative

 

 

(2,201

)

 

 

(1,984

)

Net income fee to related party

 

 

(290

)

 

 

(490

)

Advisory fee to related party

 

 

(2,292

)

 

 

(2,242

)

Other income

 

 

4,097

 

 

 

173

 

Earnings from unconsolidated investees

 

 

45

 

 

 

70

 

Litigation settlement

 

 

(73

)

 

 

3,839

 

Income tax benefit

 

 

103

 

 

 

2,049

 

Net income from continuing operations

 

$

2,642

 

 

$

564

 

 

 

The table below reconciles the segment information to the corresponding amounts in the Consolidated Balance Sheets (dollars in thousands):

 

 

 

March 31,

 

 

 

2015

 

 

2014

 

Segment assets

 

$

696,606

 

 

$

648,139

 

Assets held for sale

 

 

-

 

 

 

35,475

 

Investments in unconsolidated investees

 

 

4,462

 

 

 

3,990

 

Notes and interest receivable

 

 

138,163

 

 

 

129,220

 

Other assets

 

 

106,457

 

 

 

123,332

 

Total assets

 

$

945,688

 

 

$

940,156