Segment information

9 Months Ended

Jul. 31, 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 six (6) 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 nine and three-month periods ended July 31, 2013 and 2012. Asset information is not reported since FREIT does not use this measure to assess performance.

	Nine Months Ended						Three Months Ended
	July 31,						July 31,
	2013			2012			2013			2012
	(In Thousands)						(In Thousands)
Real estate rental revenue:
Commercial	$	17,011		$	17,684		$	5,793		$	5,853
Residential		13,811			14,015			4,612			4,711
Total real estate revenue		30,822			31,699			10,405			10,564
Real estate operating expenses:
Commercial		6,843			7,238			2,356			2,421
Residential		6,629			6,244			2,168			2,071
Total real estate operating expenses		13,472			13,482			4,524			4,492
Net operating income:
Commercial		10,168			10,446			3,437			3,432
Residential		7,182			7,771			2,444			2,640
Total net operating income	$	17,350		$	18,217		$	5,881		$	6,072
Recurring capital improvements-residential	$	(542	)	$	(467	)	$	(340	)	$	(221	)
Reconciliation to consolidated net income:
Segment NOI	$	17,350		$	18,217		$	5,881		$	6,072
Deferred rents - straight lining		(126	)		7			(15	)		(3	)
Amortization of acquired leases		(18	)		5			(6	)		(7	)
Investment income		150			80			50			25
General and administrative expenses		(1,274	)		(1,280	)		(405	)		(415	)
Depreciation		(4,533	)		(4,589	)		(1,511	)		(1,551	)
Deferred project cost write-off, net of
income relating to early lease termination		—			(776	)		—			(2,236	)
Financing costs		(9,032	)		(8,663	)		(2,949	)		(2,957	)
Income (loss) from continuing operations		2,517			3,001			1,045			(1,072	)
Income from discontinued operations		811			437			48			181
Gain on sale of discontinued operation		1,377			—			—			—
Net income (loss)		4,705			3,438			1,093			(891	)
Net (income) loss attributable to noncontrolling
interests		(454	)		(525	)		(182	)		668
Net income (loss) attributable to common equity	$	4,251		$	2,913		$	911		$	(223	)