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Segment Information
12 Months Ended
Dec. 31, 2012
Segment Information
Segment Information
In first quarter 2013, we changed our reportable segments to better reflect the underlying market fundamentals and operating strategy of our core business operations, real estate and oil and gas. With this change, we aggregated our fiber and water resource operating results in other natural resources. All prior period segment information has been reclassified to conform to the current year presentation. Accordingly, we reclassified revenues and cost of sales associated with water resources on the consolidated statement of income and comprehensive income from oil and gas to other natural resources.
We manage our operations through three business segments: real estate, oil and gas and other natural resources. Real estate secures entitlements and develops infrastructure on our lands for single-family residential and mixed-use communities, and manages our undeveloped land and income producing properties, primarily a hotel and our multifamily properties. Oil and gas manages our owned mineral interests and interests leased from others and is an independent oil and gas exploration, development and production operation. Other natural resources manages our timber, recreational leases and water resource initiatives.
We evaluate performance based on segment earnings (loss) before unallocated items and income taxes. Segment earnings (loss) consist of operating income, equity in earnings (loss) of unconsolidated ventures, gain on sale of assets, interest income on loans secured by real estate and net (income) loss attributable to noncontrolling interests. Items not allocated to our business segments consist of general and administrative expense, share-based compensation, gain on sale of strategic timberland, interest expense and other corporate non-operating income and expense. The accounting policies of the segments are the same as those described in the accounting policy note to the consolidated financial statements. Our revenues are derived from our U.S. operations and all of our assets are located in the U.S. In 2012, no single customer accounted for more than 10 percent of our total revenues. In 2011, revenues of $17,980,000 from one customer of our real estate segment exceeded 10 percent of our total revenues as result of selling about 9,700 acres of undeveloped land from our retail sales program.
 
Real Estate
 
Oil and Gas
 
Other Natural Resources
 
Items Not
Allocated to
Segments
 
Total
 
(In thousands)
For the year or at year-end 2012
 
 
 
 
 
 
 
 
 
 
Revenues
$
120,115

 
$
44,220

 
$
8,256

 
$

  
 
$
172,591

Depreciation, depletion and amortization
4,340

 
4,987

 
1,254

 
8,345

  
 
18,926

Equity in earnings (loss) of unconsolidated ventures
13,897

 
509

 
63

 

  
 
14,469

Income (loss) before taxes
53,582

 
26,608

 
29

 
(59,261
)
(a) 
 
20,958

Total assets
588,137

 
227,061

 
24,066

 
79,170

  
 
918,434

Investment in unconsolidated ventures
41,546

 

 

 

  
 
41,546

Capital expenditures(b)
1,093

 
21,971

 
292

 
795

  
 
24,151

For the year or at year-end 2011
 
 
 
 
 
 
 
 
 
 
Revenues
$
106,168

 
$
24,448

 
$
4,957

 
$

  
 
$
135,573

Depreciation, depletion and amortization
5,729

 
339

 
1,029

 
3,705

  
 
10,802

Equity in earnings (loss) of unconsolidated ventures
(30,626
)
 
1,394

 
23

 

  
 
(29,209
)
Income (loss) before taxes
(25,704
)
 
19,783

 
(1,867
)
 
17,963

(a) 
 
10,175

Total assets
657,099

 
5,484

 
27,862

 
104,412

  
 
794,857

Investment in unconsolidated ventures
64,223

 

 

 

  
 
64,223

Capital expenditures(b)
739

 
4,690

 
153

 
766

  
 
6,348

For the year or year-end 2010
 
 
 
 
 
 
 
 
 
 
Revenues
$
68,269

 
$
24,790

 
$
8,301

 
$

  
 
$
101,360

Depreciation, depletion and amortization
3,089

 
333

 
1,583

 
5,553

  
 
10,558

Equity in earnings of unconsolidated ventures
2,629

 
2,072

 

 

  
 
4,701

Income (loss) before taxes
(4,634
)
 
22,846

 
4,995

 
(15,612
)
(a) 
 
7,595

Total assets
668,689

 
1,075

 
30,582

 
88,978

  
 
789,324

Investment in unconsolidated ventures
101,166

 

 

 

  
 
101,166

Capital expenditures(b)
2,392

 
49

 
3

 
258

  
 
2,702


 _____________________
(a) 
Items not allocated to segments consist of:
 
For the Year
 
2012
 
2011
 
2010
 
(In thousands)
General and administrative expense
$
(25,176
)
 
$
(20,110
)
 
$
(17,341
)
Share-based compensation expense
(14,929
)
 
(7,067
)
 
(11,596
)
Gain on sale of assets
16

 
61,784

 
28,607

Interest expense
(19,363
)
 
(17,012
)
 
(16,446
)
Other corporate non-operating income
191

 
368

 
1,164

 
$
(59,261
)
 
$
17,963

 
$
(15,612
)

 _____________________
(b) 
Consists of expenditures for oil and natural gas properties and equipment, property, plant and equipment and reforestation of timber.
In 2012, general and administrative expense includes $6,323,000 in transaction costs associated with our acquisition of Credo. Share-based compensation increased principally as a result of increase in our stock price and impact on cash-settled awards. Interest expense includes a $4,448,000 loss on extinguishment of debt associated with the amendment and extension of our term loan in 2012.
In 2011, general and administrative expense includes $3,187,000 associated with proposed private debt offerings that we withdrew as a result of deterioration of terms available to us in the credit markets. Share-based compensation decreased principally as a result of a decline in our stock price and its impact on cash-settled awards. Gain on sale of assets represents the sale of about 57,000 acres of timberland for $87,061,000 in accordance with our 2009 strategic initiatives, which we completed in 2011.
In 2010, gain on sale of assets represents the sale of over 24,000 acres of timberland for $38,778,000 in accordance with our 2009 strategic initiatives. Interest expense decreased principally due to lower interest rates as a result of the maturity of our interest rate swap agreement and decreased amortization of prepaid loan fees.