Segment information

12 Months Ended

Oct. 31, 2012

Segment Information

Segment information

Note 12- 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 are comprised of ten and eight properties, respectively, during the three fiscal years ended October 31, 2012, 2011 and 2010, exclusive of the residential property sold in Fiscal 2012 which has been classified as a discontinued operation.

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.

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 attributable to common equity for each of the years in the three-year period ended October 31, 2012. Asset information is not reported since FREIT does not use this measure to assess performance.

	October 31,
	2012			2011			2010
	(In Thousands of Dollars)
Real estate rental revenue:
Commercial	$	23,383		$	24,117		$	24,713
Residential		19,126			18,712			18,192
Totals		42,509			42,829			42,905
Real estate operating expenses:
Commercial		9,526			9,561			9,702
Residential		8,666			8,091			8,456
Totals		18,192			17,652			18,158
Net operating income:
Commercial		13,857			14,556			15,011
Residential		10,460			10,621			9,736
Totals	$	24,317		$	25,177		$	24,747
Recurring capital improvements-
residential	$	723		$	433		$	334
Reconciliation to consolidated net
income-common equity:
Segment NOI	$	24,317		$	25,177		$	24,747
Deferred rents - straight lining		17			242			240
Amortization of acquired above and below
market value leases		(2	)		(25	)		(30	)
Net investment income		173			101			122
General and administrative expenses		(1,624	)		(1,543	)		(1,567	)
Depreciation		(6,186	)		(6,070	)		(5,996	)
Deferred project cost write-off, net of
income relating to early lease termination		(776	)		—			—
Financing costs		(11,704	)		(11,452	)		(13,608	)*
Income from continuing operations		4,215			6,430			3,908
Income from discontinued operation		253			283			223
Gain on sale of discontinued operation, net of tax		7,528			—			—
Net income		11,996			6,713			4,131
Net (income) loss attributable to
noncontrolling interests in subsidiaries		(645	)		(1,335	)		280
Net income attributable to common equity	$	11,351		$	5,378		$	4,411
* Includes $2.1 million in prepayment penalties relating to the early debt extinguishment.