| OPERATING SEGMENTS |
NOTE 14.
OPERATING SEGMENTS
Our segments are based on management’s method of internal reporting which classifies its operations by property type. The segments are commercial, apartments, land and other. 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 expenses. Management evaluates the performance of each of the operating segments and allocates resources to them based on their operating income and cash flow.
Items of income that are not reflected in the segments are interest, other income, 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 the Company’s reportable segments’ operating income including segment assets and expenditures for the years 2018, 2017 and 2016 (dollars in thousands):
| |
|
Commercial |
|
|
|
|
|
|
|
|
| For the Year Ended December 31, 2018 |
|
Properties |
|
Apartments |
|
Land |
|
Other |
|
Total |
| Rental and other property revenues |
|
$ |
33,113 |
|
|
$ |
87,832 |
|
|
$ |
— |
|
|
$ |
10 |
|
|
$ |
120,955 |
|
| Property operating expenses |
|
|
(16,558 |
) |
|
|
(42,134 |
) |
|
|
(275 |
) |
|
|
(453 |
) |
|
|
(59,420 |
) |
| Depreciation |
|
|
(9,530 |
) |
|
|
(13,217 |
) |
|
|
— |
|
|
|
(14 |
) |
|
|
(22,761 |
) |
| Mortgage and loan interest |
|
|
(7,662 |
) |
|
|
(20,671 |
) |
|
|
(318 |
) |
|
|
(30,221 |
) |
|
|
(58,872 |
) |
| Interest income |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
15,793 |
|
|
|
15,793 |
|
| Gain on land sales |
|
|
— |
|
|
|
— |
|
|
|
17,404 |
|
|
|
— |
|
|
|
17,404 |
|
| Segment operating income (loss) |
|
$ |
(637 |
) |
|
$ |
11,810 |
|
|
$ |
16,811 |
|
|
$ |
(14,885 |
) |
|
$ |
13,099 |
|
| Capital expenditures |
|
|
8,246 |
|
|
|
16,954 |
|
|
|
— |
|
|
|
— |
|
|
|
25,200 |
|
| Assets |
|
$ |
153,018 |
|
|
$ |
143,500 |
|
|
$ |
84,016 |
|
|
$ |
3,970 |
|
|
$ |
384,504 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Property Sales |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Sales price |
|
$ |
— |
|
|
$ |
— |
|
|
$ |
43,311 |
|
|
$ |
— |
|
|
$ |
43,311 |
|
| Cost of sale |
|
|
— |
|
|
|
— |
|
|
|
(25,907 |
) |
|
|
— |
|
|
|
(25,907 |
) |
| Gain on land sales |
|
$ |
— |
|
|
$ |
— |
|
|
$ |
17,404 |
|
|
$ |
— |
|
|
$ |
17,404 |
|
| |
|
Commercial |
|
|
|
|
|
|
|
|
| For the Twelve Months Ended December 31, 2017 |
|
Properties |
|
Apartments |
|
Land |
|
Other |
|
Total |
| Rental and other property revenues |
|
$ |
32,323 |
|
|
$ |
92,807 |
|
|
$ |
87 |
|
|
$ |
16 |
|
|
$ |
125,233 |
|
| Property operating expenses |
|
|
(17,724 |
) |
|
|
(43,677 |
) |
|
|
(667 |
) |
|
|
(988 |
) |
|
|
(63,056 |
) |
| Depreciation |
|
|
(9,200 |
) |
|
|
(16,354 |
) |
|
|
— |
|
|
|
(4 |
) |
|
|
(25,558 |
) |
| Mortgage and loan interest |
|
|
(7,528 |
) |
|
|
(22,346 |
) |
|
|
(1,588 |
) |
|
|
(28,482 |
) |
|
|
(59,944 |
) |
| Interest income |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
13,862 |
|
|
|
13,862 |
|
| Recognition of deferred gain on sale of income producing properties |
|
|
— |
|
|
|
9,842 |
|
|
|
— |
|
|
|
— |
|
|
|
9,842 |
|
| Gain on land sales |
|
|
— |
|
|
|
— |
|
|
|
4,884 |
|
|
|
— |
|
|
|
4,884 |
|
| Segment operating income (loss) |
|
$ |
(2,129 |
) |
|
$ |
20,272 |
|
|
$ |
2,716 |
|
|
$ |
(15,596 |
) |
|
$ |
5,263 |
|
| Capital expenditures |
|
$ |
3,157 |
|
|
$ |
1,402 |
|
|
$ |
609 |
|
|
$ |
— |
|
|
$ |
5,168 |
|
| Assets |
|
$ |
137,157 |
|
|
$ |
726,852 |
|
|
$ |
115,205 |
|
|
$ |
656 |
|
|
$ |
979,870 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Property Sales |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Sales price |
|
$ |
— |
|
|
$ |
— |
|
|
$ |
11,177 |
|
|
$ |
— |
|
|
$ |
11,177 |
|
| Cost of sale |
|
|
— |
|
|
|
— |
|
|
|
(6,293 |
) |
|
|
— |
|
|
|
(6,293 |
) |
| Recognized prior deferred gain |
|
|
— |
|
|
|
9,842 |
|
|
|
— |
|
|
|
— |
|
|
|
9,842 |
|
| Gain on sale |
|
$ |
— |
|
|
$ |
9,842 |
|
|
$ |
4,884 |
|
|
$ |
— |
|
|
$ |
14,726 |
|
| |
|
Commercial |
|
|
|
|
|
|
|
|
| For the Twelve Months Ended December 31, 2016 |
|
Properties |
|
Apartments |
|
Land |
|
Other |
|
Total |
| Rental and other property revenues |
|
$ |
31,864 |
|
|
$ |
86,603 |
|
|
$ |
— |
|
|
$ |
4 |
|
|
$ |
118,471 |
|
| Property operating expenses |
|
|
(19,476 |
) |
|
|
(40,786 |
) |
|
|
(1,634 |
) |
|
|
(22 |
) |
|
|
(61,918 |
) |
| Depreciation |
|
|
(8,924 |
) |
|
|
(14,759 |
) |
|
|
— |
|
|
|
— |
|
|
|
(23,683 |
) |
| Mortgage and loan interest |
|
|
(7,167 |
) |
|
|
(25,381 |
) |
|
|
(1,746 |
) |
|
|
(18,794 |
) |
|
|
(53,088 |
) |
| Interest income |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
14,670 |
|
|
|
14,670 |
|
| Gain (loss) on sale of income producing properties |
|
|
(238 |
) |
|
|
16,445 |
|
|
|
— |
|
|
|
— |
|
|
|
16,207 |
|
| Gain on land sales |
|
|
— |
|
|
|
— |
|
|
|
3,121 |
|
|
|
— |
|
|
|
3,121 |
|
| Segment operating income (loss) |
|
$ |
(3,941 |
) |
|
$ |
22,122 |
|
|
$ |
(259 |
) |
|
$ |
(4,142 |
) |
|
$ |
13,780 |
|
| Capital expenditures |
|
$ |
4,577 |
|
|
$ |
863 |
|
|
$ |
269 |
|
|
$ |
— |
|
|
$ |
5,709 |
|
| Assets |
|
$ |
148,689 |
|
|
$ |
624,433 |
|
|
$ |
118,051 |
|
|
$ |
— |
|
|
$ |
891,173 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Property Sales |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Sales price |
|
$ |
1,500 |
|
|
$ |
20,350 |
|
|
$ |
29,128 |
|
|
$ |
— |
|
|
$ |
50,978 |
|
| Cost of sale |
|
|
(1,738 |
) |
|
|
(3,905 |
) |
|
|
(26,007 |
) |
|
|
— |
|
|
|
(31,650 |
) |
| Gain on sale |
|
$ |
(238 |
) |
|
$ |
16,445 |
|
|
$ |
3,121 |
|
|
$ |
— |
|
|
$ |
19,328 |
|
The table below reflects the reconciliation of segment information to the corresponding amounts in the Consolidated Statements of Operations (dollars in thousands):
| |
|
For the Years Ended December 31, |
| |
|
2018 |
|
2017 |
|
2016 |
| Segment operating income (loss) |
|
$ |
13,099 |
|
|
$ |
5,263 |
|
|
$ |
13,780 |
|
| Other non-segment items of income (expense) |
|
|
|
|
|
|
|
|
|
|
|
|
| General and administrative |
|
|
(11,359 |
) |
|
|
(6,269 |
) |
|
|
(5,476 |
) |
| Net income fee to related party |
|
|
(631 |
) |
|
|
(250 |
) |
|
|
(257 |
) |
| Advisory fee to related party |
|
|
(10,663 |
) |
|
|
(9,995 |
) |
|
|
(9,490 |
) |
| Other income |
|
|
28,150 |
|
|
|
625 |
|
|
|
1,816 |
|
| Gain on disposition of 50% interest in VAA |
|
|
154,126 |
|
|
|
— |
|
|
|
— |
|
| Foreign currency translation gain (loss) |
|
|
12,399 |
|
|
|
(4,536 |
) |
|
|
— |
|
| Earnings from VAA |
|
|
44 |
|
|
|
— |
|
|
|
— |
|
| Earnings (losses) from other unconsolidated investees |
|
|
1,085 |
|
|
|
26 |
|
|
|
(26 |
) |
| Income tax benefit (expense) |
|
|
(3,210 |
) |
|
|
(180 |
) |
|
|
(24 |
) |
| Net income (loss) from continuing operations |
|
$ |
183,040 |
|
|
$ |
(15,316 |
) |
|
$ |
323 |
|
The table below reflects the reconciliation of segment information to the corresponding amounts in the Consolidated Balance Sheets (dollars in thousands):
| |
|
For the Years Ended December 31, |
| |
|
2018 |
|
2017 |
|
2016 |
| Segment assets |
|
$ |
384,504 |
|
|
$ |
979,870 |
|
|
$ |
891,173 |
|
| Investments in unconsolidated subsidiaries and investees |
|
|
90,571 |
|
|
|
2,472 |
|
|
|
2,446 |
|
| Notes and interest receivable |
|
|
83,541 |
|
|
|
70,166 |
|
|
|
79,308 |
|
| Other assets and receivables |
|
|
303,764 |
|
|
|
260,914 |
|
|
|
212,987 |
|
| Total assets |
|
$ |
862,380 |
|
|
$ |
1,313,422 |
|
|
$ |
1,185,914 |
|
|