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Reportable Segments
 9 Months Ended
Sep. 30, 2012
Reportable Segments [Abstract]  
Reportable Segments
16. Reportable Segments

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

 

Based on the Trust’s method of internal reporting, management determined that it has three operating 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 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 for the periods ended September 30, 2012 and December 31, 2011 (in thousands):

 

                 
    September 30,
2012		     December 31,
2011		  

Assets

                

Operating properties

   $ 487,667     $ 442,209  

Loan assets

     175,961       217,174  

REIT securities

     37,191       28,856  

Corporate

                

Cash and cash equivalents

     159,251       40,952  

Restricted cash

     2,787       3,914  

Accounts receivable and prepaids

     888       510  

Deferred financing costs

     3,192       318  
   

 

 

    

 

 

  

Total Assets

   $ 866,937     $ 733,933  
   

 

 

    

 

 

  

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 three and nine months ended September 30, 2012 and September 30, 2011 (in thousands):

 

                                 
    For the Three Months Ended     For the Nine Months Ended  
    September 30,
2012		     September 30,
2011		     September 30,
2012		     September 30,
2011		  

Operating Properties

                                

Rents and reimbursements

   $ 13,335     $ 10,370     $ 38,225     $ 31,696  

Operating expenses

     (3,624 )      (3,272 )      (11,535 )      (10,856 ) 

Real estate taxes

     (1,268 )      (1,079 )      (3,481 )      (3,360 ) 

Equity in (loss) income of Sealy Northwest Atlanta

     (109 )      (119 )      (273 )      4,422  

Equity in loss of Sealy Airpark Nashville

     —         (275 )      —         (728 ) 

Equity in loss of Sealy Newmarket

     (704 )      (672 )      (2,171 )      (1,816 ) 

Equity in income (loss) of Marc Realty investment

     212       (199 )      (132 )      (319 ) 

Equity in (loss) income of WRT -Elad

     (57 )      —         458       —    

Equity income of Vintage

     1,392       424       2,326       424  
   

 

 

    

 

 

    

 

 

    

 

 

  

Operating income

     9,177       5,178       23,417       19,463  

Depreciation and amortization expense

     (4,842 )      (3,111 )      (12,872 )      (9,751 ) 

Interest expense

     (3,140 )      (2,824 )      (9,272 )      (9,809 ) 

Impairment loss on Sealy equity investment

     —         —         —         (3,800 ) 

Impairment loss on investment in real estate

     —         (3,000 )      —         (3,000 ) 

Gain on extinguishment of debt

     —         8,514       —         8,514  

Gain on sale of equity investment

     165       207       397       207  
   

 

 

    

 

 

    

 

 

    

 

 

  

Operating properties net income

    1,360       4,964       1,670       1,824  
   

 

 

    

 

 

    

 

 

    

 

 

  

Loan Assets

                                

Interest

     2,985       3,043       8,130       8,440  

Discount accretion

     425       2,374       5,984       11,167  

Equity in earnings of preferred equity investment of Marc Realty

     —         85       —         253  

Equity in earnings of preferred equity investment of 450 W 14th Street

     —         172       —         245  

Unrealized gain (loss) on loan securities carried at fair value

     371       (75 )      447       2,772  

Equity in income of LW Sofi

     —         855       —         1,117  

Equity in income of ROIC Riverside

     238       234       706       702  

Equity in (loss) income of ROIC Lakeside Eagle

     (16 )      —         (32 )      666  

Equity in income of 46th Street Gotham

     —         —         —         621  

Equity in earnings of Lex-Win Concord

     —         49       —         307  

Equity in income of Concord Debt Holdings

     35       2,500       386       2,721  

Equity in income of CDH CDO

     136       —         670       —    

Equity in income of Concord Debt Holdings (1)

     2       —         30       —    

Equity in income of CDH CDO (1)

     855       —         1,333       —    

Equity in income of WRT -Stamford

     232       —         548       —    

Equity in income of SoCal Office Loan Portfolio

     10,348       —         9,710       —    

Equity in income of RE CDO management

     18       23       46       23  

Equity in income of 10 Metrotech

     50       —         31       —    

Equity in income of Mentor

     12       —         18       —    
   

 

 

    

 

 

    

 

 

    

 

 

  

Operating income

     15,691       9,260       28,007       29,034  

General and administrative expense

     (15 )      (43 )      (40 )      (58 ) 

Interest expense

     (336 )      (184 )      (1,004 )      (525 ) 
   

 

 

    

 

 

    

 

 

    

 

 

  

Loan assets net income

     15,340       9,033       26,963       28,451  
   

 

 

    

 

 

    

 

 

    

 

 

  

REIT Securities

                                

Interest and dividends

     312       86       904       662  

Gain on sale of securities carried at fair value

     —         —         41       131  

Unrealized gain (loss) on securities carried at fair value

     3,113       (961 )      7,254       (798 ) 
   

 

 

    

 

 

    

 

 

    

 

 

  

REIT Securities net income (loss)

     3,425       (875 )      8,199       (5 ) 
   

 

 

    

 

 

    

 

 

    

 

 

  

Net income from segments before corporate income (expense)

     20,125       13,122       36,832       30,270  
   

 

 

    

 

 

    

 

 

    

 

 

  

Reconciliations to GAAP Net Income:

                                

Corporate Income (Expense)

                                

Interest income

     242       472       433       1,007  

Interest expense

     (954 )      (472 )      (1,326 )      (1,592 ) 

General and administrative

     (3,083 )      (2,648 )      (9,048 )      (7,758 ) 

Transaction costs

     (30 )      (201 )      (335 )      (358 ) 

State and local taxes

     (65 )      (11 )      (213 )      (88 ) 
   

 

 

    

 

 

    

 

 

    

 

 

  

Income from continuing operations before non-controlling interest

     16,235       10,262       26,343       21,481  

Non-controlling interest

     (939 )      (318 )      435       (851 ) 
   

 

 

    

 

 

    

 

 

    

 

 

  

Income from continuing operations attributable to Winthrop Realty Trust

     15,296       9,944       26,778       20,630  

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

     (188 )      (98 )      (59 )      142  
   

 

 

    

 

 

    

 

 

    

 

 

  

Net Income Attributable to Winthrop Realty Trust

   $ 15,108     $ 9,846     $ 26,719     $ 20,772  
   

 

 

    

 

 

    

 

 

    

 

 

  

Capital Expenditures

                                

Operating properties

   $ 1,896     $ 2,141     $ 7,972     $ 5,856  
   

 

 

    

 

 

    

 

 

    

 

 

  

 

(1) Represents the interest acquired from Lexington Realty Trust on May 1, 2012.