INVESTMENT IN UNCONSOLIDATED JOINT VENTURES AND INVESTEES

12 Months Ended

Dec. 31, 2019

Equity Method Investments and Joint Ventures [Abstract]

INVESTMENT IN UNCONSOLIDATED JOINT VENTURES 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.

Our interest in the common stock of ARL in the amount of 0.90% is accounted for under the equity method.

The summary data presented below includes our investments accounted for under the equity method, except for our investment in VAA which is discussed in detail in Note 2 ‘Investment in VAA’.

The following is a summary of the financial position and results of operations from our unconsolidated parent (dollars in thousands): 

	December 31,
	2019			2018			2017
ARL
Real estate, net of accumulated depreciation	$	—		$	549		$	12,349
Notes receivable		35,213			42,517			41,928
Other assets		67,441			66,712			126,238
Notes payable		(8,327	)		(9,637	)		(6,507	)
Other liabilities		(26,947	)		(21,123	)		(102,014	)
Shareholders’ equity/partners capital		(67,380	)		(79,018	)		(71,994	)

	For the Year Ended December 31,
	2019			2018			2017
Rents, interest and other income	$	12,569		$	7,132		$	9,193
Depreciation		—			—			(157	)
Operating expenses		(3,765	)		(2,420	)		(3,149	)
Gain on land sales		1,016			—			4,765
Interest expense		(8,043	)		(7,191	)		(6,228	)
Income (loss) from continuing operations	$	1,777		$	(2,479	)	$	4,424
Net  income (loss)	$	1,777		$	(2,479	)	$	4,424
Company’s proportionate share of income (loss)	$	16		$	(22	)	$	40

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.