Segment information

6 Months Ended

Apr. 30, 2013

Segment Information

Segment information

Note 8 - Segment information:

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 segment contains ten (10) separate properties and the residential segment contains seven (7) properties. The accounting policies of the segments are the same as those described in Note 1 in FREIT’s Annual Report on Form 10-K for the fiscal year ended October 31, 2012.

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

FREIT assesses and measures segment operating results based on net operating income ("NOI"). NOI, a standard used by real estate professionals, is based on operating revenue and expenses directly associated with the operations of the real estate properties, but excludes deferred rents (straight lining), lease amortization, depreciation, financing costs and other items. NOI is not a measure of operating results or cash flows from operating activities as measured by GAAP, 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 condensed consolidated net income-common equity for the six and three-month periods ended April 30, 2013 and 2012. Asset information is not reported since FREIT does not use this measure to assess performance.

	Six Months Ended						Three Months Ended
	April 30,						April 30,
	2013			2012			2013			2012
	(In Thousands)						(In Thousands)
Real estate rental revenue:
Commercial	$	11,217		$	11,831		$	5,355		$	5,739
Residential		9,346			9,442			4,687			4,759
Total real estate revenue		20,563			21,273			10,042			10,498
Real estate operating expenses:
Commercial		4,486			4,817			2,260			2,293
Residential		4,548			4,246			2,213			2,144
Total real estate operating expenses		9,034			9,063			4,473			4,437
Net operating income:
Commercial		6,731			7,014			3,095			3,446
Residential		4,798			5,196			2,474			2,615
Total net operating income	$	11,529		$	12,210		$	5,569		$	6,061
Recurring capital improvements-residential	$	(204	)	$	(250	)	$	(144	)	$	(77	)
Reconciliation to consolidated net income:
Segment NOI	$	11,529		$	12,210		$	5,569		$	6,061
Deferred rents - straight lining		(110	)		10			(55	)		16
Amortization of acquired leases		(12	)		12			(6	)		3
Investment income		100			55			50			31
General and administrative expenses		(869	)		(864	)		(446	)		(495	)
Depreciation		(3,027	)		(3,044	)		(1,514	)		(1,522	)
Income relating to early lease termination,
net of related deferred project cost write-off		—			1,460			—			1,460
Financing costs		(6,083	)		(5,706	)		(3,064	)		(2,891	)
Income from continuing operations		1,528			4,133			534			2,663
Income from discontinued operations		707			196			1			104
Gain on sale of discontinued operation		1,377			—			1,377			—
Net income		3,612			4,329			1,912			2,767
Net income attributable to noncontrolling interests		(272	)		(1,193	)		(43	)		(824	)
Net income attributable to common equity	$	3,340		$	3,136		$	1,869		$	1,943