INVESTMENT IN UNCONSOLIDATED SUBSIDIARIES AND INVESTEES

6 Months Ended

Jun. 30, 2011

INVESTMENT IN UNCONSOLIDATED SUBSIDIARIES AND INVESTEES

INVESTMENT IN UNCONSOLIDATED SUBSIDIARIES AND INVESTEES

NOTE 4. INVESTMENT IN UNCONSOLIDATED SUBSIDIARIES AND INVESTEES

Investments in unconsolidated subsidiaries, jointly owned companies and other investees in which we have a 20% to 50% interest or otherwise exercise significant influence are carried at cost, adjusted for the Company’s proportionate share of their undistributed earnings or losses, via the equity method of accounting. ARL is our parent company and is considered as an unconsolidated subsidiary.

Investments accounted for via the equity method consists of the following:

	Percentage Ownership
	at June 30, 2011			at June 30, 2010
American Realty Investors, Inc.(1)		2.09	%		2.47	%
Garden Centura, L.P.(2)		5.00	%		5.00	%

(1)	Unconsolidated subsidiary
(2)	Other investees

 Our interest in the common stock of ARL and our partnership interest in Garden Centura, L.P., in the amount of 2.09% and 5.0%, respectively, are accounted for under the equity method because we exercise significant influence over the operations and financial activities. Accordingly, the investments are carried at cost, adjusted for the companies’ proportionate share of earnings or losses. The following is a summary of the financial position and results of operations from our unconsolidated subsidiaries and investees (dollars in thousands):

For the Six Months Ended June 30, 2011	Unconsolidated Subsidiaries			Other Investees			Total
Real estate, net of accumulated depreciation	$	178,689		$	73,280		$	251,969
Notes receivable		23,718			-			23,718
Other assets		188,975			4,485			193,460
Notes payable		(216,643	)		(47,989	)		(264,632	)
Other liabilities		(106,940	)		(2,182	)		(109,122	)
Shareholders' equity/partners capital		(67,799	)		(27,594	)		(95,393	)
Revenue	$	13,156		$	3,638		$	16,794
Depreciation		(901	)		(1,571	)		(2,472	)
Operating expenses		(14,660	)		(2,149	)		(16,809	)
Gain on land sales		15,009			-			15,009
Interest expense		(6,755	)		(1,156	)		(7,911	)
Gain (loss) from continuing operations	$	5,849		$	(1,238	)	$	4,611
Income from discontinued operations		-			-			-
Net income (loss)	$	5,849		$	(1,238	)	$	4,611
Company's proportionate share of earnings	$	122		$	(62	)	$	60

For the Six Months Ended June 30, 2010	Unconsolidated Subsidiaries			Other Investees			Total
Real estate, net of accumulated depreciation	$	243,655		$	75,880		$	319,535
Notes Receivable		41,564			-			41,564
Other assets		165,274			5,709			170,983
Notes payable		(230,991	)		(48,231	)		(279,222	)
Other liabilities		(117,736	)		(1,984	)		(119,720	)
Shareholders equity/partners capital		(101,766	)		(31,374	)		(133,140	)
Rents and interest and other income	$	17,041		$	4,078		$	21,119
Depreciation		(1,194	)		(1,556	)		(2,750	)
Operating expenses		(15,175	)		(1,966	)		(17,141	)
Gain on land sales		1,519			-			1,519
Interest expense		(8,546	)		(1,805	)		(10,351	)
Loss from continuing operations		(6,355	)		(1,249	)		(7,604	)
Income from discontinued operations		5,821			-			5,821
Net loss	$	(534	)	$	(1,249	)	$	(1,783	)
Company's proportionate share of earnings	$	(13	)	$	(62	)	$	(75	)