INVESTMENT IN UNCONSOLIDATED JOINT VENTURES AND INVESTEES

12 Months Ended

Dec. 31, 2018

Investments in and Advances to Affiliates, Schedule of Investments [Abstract]

INVESTMENTS IN UNCONSOLIDATED SUBSIDIARIES AND INVESTEES

NOTE 6.     

INVESTMENT IN UNCONSOLIDATED JOINT VENTURES AND INVESTEES

Investments in unconsolidated subsidiaries, jointly owned companies and other investees in which we have a 20% to 50% ownership 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 an unconsolidated joint venture.

Investments accounted for via the equity method consists of the following, except for VAA which is discussed in Note 2.

	Percentage ownership as of December 31,
	2018	2017	2016
American Realty Investors, INC. (1)	0.90%	0.90%	0.90%

⁽¹⁾  Unconsolidated investment in parent company

The following is a summary of the financial position and results of operations of ARL (dollars in thousands). Summary data presented below excludes investments in VAA. For additional information refer to Note 2.

				December 31,
	2018			2017			2016
ARL
Real estate, net of accumulated depreciation	$	549		$	12,349		$	14,504
Notes receivable		42,517			41,928			47,257
Other assets		66,712			126,238			127,001
Notes payable		(9,637	)		(6,507	)		(9,485	)
Other liabilities		(21,123	)		(102,014	)		(111,707	)
Shareholders’ equity/partners capital		(79,018	)		(71,994	)		(67,570	)

	For the Year Ended December 31,
	2018			2017			2016
Rents, interest and other income	$	7,132		$	9,193		$	7,251
Depreciation		—			(157	)		(175	)
Operating expenses		(2,420	)		(3,149	)		(3,633	)
Gain on land sales		—			4,765			—
Interest expense		(7,191	)		(6,228	)		(6,274	)
Income (loss) from continuing operations	$	(2,479	)	$	4,424		$	(2,831	)
Net  income (loss)	$	(2,479	)	$	4,424		$	(2,831	)
Company’s proportionate share of income (loss) (1)	$	(22	)	$	40		$	(25	)

⁽¹⁾ Income (loss) represents continued and discontinued operations

During the fourth quarter of 2018, TCI purchased from RAI 900,000 shares of ARL Series A convertible Preferred Stock for $9.0 million. The Series A Preferred Stock may be converted into common stock at 90.0% of the average daily closing price of ARL’s common stock for the prior 20 trading days.

The investment in ARL convertible Preferred Stock is being carried at the Company’s cost of $9 million and is included in investment in other unconsolidated investees. Additionally, TCI purchased from RAI $9.9 million accrued unpaid dividends related to the ARL Series A convertible Preferred Stock which is carried at the cost and included in investment in unconsolidated investees on the balance sheet.