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Reportable Segments
 12 Months Ended
Dec. 31, 2011
Reportable Segments [Abstract]  
Reportable Segments
19.

Reportable Segments

The Financial Accounting Standards Board (“FASB”) guidance on segment reporting establishes standards for the way that public business enterprises report information about reportable segments in financial statements and requires that those enterprises report selected financial information about reportable segments in financial reports issued to shareholders.

Based on the Trust’s method of internal reporting, management determined that is has three reportable segments: (i) the ownership of operating properties; (ii) the origination and acquisition of loans and debt securities secured directly or indirectly by commercial and multi-family real property – collectively, loan assets; and (iii) the ownership of equity and debt securities in other REITs – REIT securities. The accounting policies of the segments are identical to those described in Note 2.

The operating properties segment includes all of the Trust’s wholly and partially owned operating properties. The loan assets segment includes all of the Trust’s activities related to real estate loans including loans receivable, loan securities and equity investments in loan related entities. The REIT securities segment includes all of the Trust’s activities related to the ownership of securities in other publicly traded real estate companies. In addition to its three business segments, the Trust reports non-segment specific income and expense under corporate income (expense).

 

The following table summarizes the Trust’s assets by business segment and capital expenditures incurred for the Trust’s operating properties for the years ended December 31, 2011 and 2010 (in thousands):

 

      September 30,       September 30,  
    December 31, 2011     December 31, 2010  
     

Assets

                

Operating properties

   $ 442,209     $ 385,872  

Loan assets

     217,174       134,269  

REIT securities

     28,856       33,032  

Corporate

                

Cash and cash equivalents

     40,952       45,257  

Restricted cash

     3,914       8,593  

Accounts receivable and prepaids

     504       538  

Deferred financing costs

     318       292  

Discontinued operations

     6       2,275  
   

 

 

    

 

 

  

Total Assets

   $ 733,933     $ 610,128  
   

 

 

    

 

 

  
     

Capital Expenditures

                

Operating Properties

   $ 11,962     $ 6,121  
   

 

 

    

 

 

  

The Trust defines net operating income for each segment presented as all items of income and expense directly derived from or incurred by each business segment before depreciation, amortization and interest expense. Interest on cash reserves, general and administrative expenses and other non-segment specific income and expense items are reported under corporate income (expense).

 

The following table presents a summary of revenues from operating properties, loan assets and REIT securities and expenses incurred by each segment for the years ended December 31, 2011, 2010, and 2009 (in thousands):

 

      September 30,       September 30,       September 30,  
    2011     2010     2009  

Operating Properties

                        

Rents and reimbursements

   $ 44,636     $ 38,059     $ 39,803  

Operating expenses

     (15,321 )      (8,665 )      (7,041 ) 

Real estate taxes

     (4,546 )      (2,532 )      (2,542 ) 

Equity in income (loss) of Marc Realty investments

     (982 )      1,776       281  

Equity in income (loss) of Sealy Northwest Atlanta

     4,308       (710 )      (457 ) 

Equity in loss of Sealy Airpark Nashville

     (1,034 )      (1,107 )      (1,056 ) 

Equity in loss of Sealy Newmarket

     (2,936 )      (1,193 )      (691 ) 

Equity in income of Vintage

     113       —         —    
   

 

 

    

 

 

    

 

 

  

Operating income

     24,238       25,628       28,297  

Depreciation and amortization expense

     (13,539 )      (9,956 )      (10,529 ) 

Interest expense

     (13,077 )      (13,193 )      (13,774 ) 

Impairment loss on investments in real estate

     (7,600 )      —         (10,000 ) 

Impairment loss on Marc Realty equity investments

     (15,764 )      —         (2,500 ) 

Impairment loss on Sealy equity investments

     (5,294 )      —         —    

Gain on extinguishment of debt

     9,358       —         —    

Gain on sale of equity investments

     207       —         —    

Settlement income

     5,868       —         —    

Gain on consolidation of property

     818       —         —    
   

 

 

    

 

 

    

 

 

  

Operating properties net income (loss)

     (14,785 )      2,479       (8,506 ) 
   

 

 

    

 

 

    

 

 

  

Loan Assets

                        

Interest

     11,073       5,691       2,420  

Discount accretion

     13,401       8,782       1,022  

Equity in earnings of preferred equity investment in Marc Realty

     338       338       78  

Equity in earnings (loss) of Lex-Win Concord

     258       —         (66,904 ) 

Equity in earnings of Concord Debt Holdings

     3,216       —         —    

Equity in earnings of CDH CDO

     480       —         —    

Equity in earnings of ROIC Riverside

     936       473       —    

Equity in earnings of ROIC Lakeside Eagle

     664       —         —    

Equity in earnings of 46th Street Gotham

     621       —         —    

Equity in earnings of Sofitel

     2,177       —         —    

Equity in earnings of RE CDO Management

     46       —         —    

Equity in earnings of Socal Office Loan Portfolio

     272       —         —    

Equity in loss of PSW NYC

     —         (1,246 )      —    

Gain on loan securities carried at fair value

     —         469       —    

Unrealized gain on loan securities carried at fair value

     2,738       5,011       —    
   

 

 

    

 

 

    

 

 

  

Operating income (loss)

     36,220       19,518       (63,384 ) 

General and administrative expense

     (75 )      (300 )      (235 ) 

Interest expense

     (850 )      —         —    

Impairment loss on preferred equity investments

     —         —         (2,186 ) 

Impairment loss on investment in Lex-Win Concord

     —         —         (31,670 ) 

Impairment loss on available for sale loan

     —         —         (203 ) 

Provision for loss on loans receivable

     —         —         (2,152 ) 
   

 

 

    

 

 

    

 

 

  

Loan assets net income (loss)

     35,295       19,218       (99,830 ) 
   

 

 

    

 

 

    

 

 

  

REIT Securities

                        

Dividends

     984       2,655       3,894  

Gain on sale of securities carried at fair value

     123       558       5,416  

Unrealized gain on securities carried at fair value

     2,788       5,060       17,862  

Equity in loss of Lex-Win Acquisition, LLC

     —         —         (95 ) 
   

 

 

    

 

 

    

 

 

  

Operating income

     3,895       8,273       27,077  

Interest expense

     —         —         (75 ) 
   

 

 

    

 

 

    

 

 

  

REIT securities net income

     3,895       8,273       27,002  
   

 

 

    

 

 

    

 

 

  

Net Income (Loss)

     24,405       29,970       (81,334 ) 

Reconciliations to GAAP Net Income (Loss):

                        

Corporate Income (Expense)

                        

Interest and other income

     1,179       139       172  

General and administrative

     (11,692 )      (8,526 )      (7,068 ) 

Interest expense

     (2,094 )      (2,182 )      (2,815 ) 

Gain (loss) on redemption of Series B-1 Preferred Shares

     (100 )      —         5,681  

Gain on conversion of Series B-1 Preferred Shares

     —         —         1,165  

State and local taxes

     (379 )      (134 )      (157 ) 
   

 

 

    

 

 

    

 

 

  

Income (loss) from continuing operations before non-controlling interest

     11,319       19,267       (84,356 ) 

Non-controlling interest

     (814 )      (888 )      (1,017 ) 
   

 

 

    

 

 

    

 

 

  

Income (loss) from continuing operations attributable to Winthrop Realty Trust

     10,505       18,379       (85,373 ) 

Income (loss) from discontinued operations attributable to Winthrop Realty Trust

     428       (1,902 )      1,026  
   

 

 

    

 

 

    

 

 

  

Net Income (Loss) Attributable to Winthrop Realty Trust

   $ 10,933     $ 16,477     $ (84,347 )