Segment information

12 Months Ended

Oct. 31, 2011

Segment Information

Segment information

Note 10- Segment information:

ASC 280-10, "Disclosures about Segments of an Enterprise and Related Information", established standards for reporting financial information about operating segments in interim and annual financial reports and provides for a "management approach" in identifying the reportable segments.

FREIT has determined that it has two reportable segments: commercial properties and residential properties. These reportable segments offer different types of space, have different types of tenants and are managed separately because each requires different operating strategies and management expertise.

The commercial and residential segments were comprised of ten and nine properties, respectively, during the three fiscal years ended October 31, 2011, 2010 and 2009.

The accounting policies of the segments are the same as those described in Note 1.

The chief operating decision-making group of FREIT's commercial segment, residential segment and corporate/other is comprised of FREIT's Board of Trustees.

FREIT assesses and measures segment operating results based on net operating income ("NOI"). NOI is based on operating revenue and expenses directly associated with the operations of the real estate properties, but excludes deferred rents (straight lining), depreciation, financing costs, amortization of acquired lease values and other items. NOI is not a measure of operating results or cash flows from operating activities as measured by accounting principles generally accepted in the United States of America, and is not necessarily indicative of cash available to fund cash needs and should not be considered an alternative to cash flows as a measure of liquidity.

Continuing real estate rental revenue, operating expenses, NOI and recurring capital improvements for the reportable segments are summarized below and reconciled to consolidated net income for each of the years in the three-year period ended October 31, 2011. Asset information is not reported since FREIT does not use this measure to assess performance.

	October 31,
	2011			2010			2009
	(In Thousands of Dollars)
Real estate rental revenue:
Commercial	$	24,116		$	24,713		$	23,130
Residential		19,724			19,130			19,089
Totals		43,840			43,843			42,219
Real estate operating expenses:
Commercial		9,561			9,702			9,219
Residential		8,577			8,905			8,381
Totals		18,138			18,607			17,600
Net operating income:
Commercial		14,555			15,011			13,911
Residential		11,147			10,225			10,708
Totals	$	25,702		$	25,236		$	24,619
Recurring capital improvements-
residential	$	474		$	363		$	204
Reconciliation to consolidated net
income-common equity:
Segment NOI	$	25,702		$	25,236		$	24,619
Deferred rents - straight lining		242			240			238
Amortization of acquired above and below
market value leases		(25	)		(30	)		(35	)
Net investment income		101			122			221
General and administrative expenses		(1,543	)		(1,567	)		(1,652	)
Depreciation		(6,109	)		(6,053	)		(5,870	)
Financing costs		(11,655	)		(13,817	)		(10,848	)
Net income		6,713			4,131			6,673
Net loss (income) attributable to noncontrolling interests in subsidiaries		(1,335	)		280			(1,121	)
Net income attributable to common equity	$	5,378		$	4,411		$	5,552