Reportable Segments

12 Months Ended

Dec. 31, 2012

Reportable Segments [Abstract]

Reportable Segments

21. 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 reportable segment and capital expenditures incurred for the Trust’s operating properties for the years ended December 31, 2012 and 2011 (in thousands):

	December 31, 2012		December 31, 2011
Assets
Operating properties	$	562,822	$	442,209
Loan assets		239,534		217,174
REIT securities		19,694		28,856
Corporate
Cash and cash equivalents		97,682		40,952
Restricted cash		—		3,914
Accounts receivable and prepaids		336		504
Deferred financing costs		3,095		318
Discontinued operations		—		6
Total Assets	$	923,163	$	733,933
Capital Expenditures
Operating Properties	$	12,417	$	11,962

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, 2012, 2011, and 2010 (in thousands):

	2012			2011			2010
Operating Properties
Rents and reimbursements	$	51,375		$	42,789		$	36,274
Operating expenses		(15,666	)		(14,387	)		(7,758	)
Real estate taxes		(4,765	)		(4,427	)		(2,412	)
Equity in (loss) income of Marc Realty investments		(132	)		(982	)		1,776
Equity in (loss) income of Sealy Northwest Atlanta		(388	)		4,308			(710	)
Equity in loss of Sealy Airpark Nashville		—			(1,034	)		(1,107	)
Equity in loss of Sealy Newmarket		(2,811	)		(2,936	)		(1,193	)
Equity in income of Vintage		4,603			113			—
Equity in income of WRT-Elad		903			—			—
Operating income		33,119			23,444			24,870
Depreciation and amortization expense		(17,666	)		(13,234	)		(9,628	)
Interest expense		(13,011	)		(12,815	)		(12,932	)
Impairment loss on investments in real estate		(2,562	)		(7,600	)		—
Impairment loss on Marc Realty equity investments		—			(15,764	)		—
Impairment loss on Sealy equity investments		—			(5,294	)		—
(Loss) gain on extinguishment of debt		(121	)		9,358			—
Gain on sale of equity investments		397			207			—
Settlement income		—			5,868			—
Gain on consolidation of property		—			818			—
Operating properties net income (loss)		156			(15,012	)		2,310
Loan Assets
Interest		11,736			11,073			5,691
Discount accretion		8,333			13,401			8,782
Equity in earnings of preferred equity investment in Marc Realty		—			338			338
Equity in earnings of Lex-Win Concord		—			258			—
Equity in earnings of Concord Debt Holdings		422			3,216			—
Equity in earnings of CDH CDO		1,715			480			—
Equity in loss of Concord Debt Holdings (1)		(456	)		—			—
Equity in loss of CDH CDO (1)		(997	)		—			—
Equity in earnings of ROIC Riverside		706			936			473
Equity in (loss) earnings of ROIC Lakeside Eagle		(42	)		664			—
Equity in earnings of 46th Street Gotham		—			621			—
Equity in earnings of Sofitel		—			2,177			—
Equity in earnings of RE CDO Management		67			46			—
Equity in earnings of Socal Office Loan Portfolio		9,706			272			—
Equity in loss of PSW NYC		—			—			(1,246	)
Equity in earnings of WRT-Stamford		769			—			—
Equity in earnings of 10 Metrotech		335			—			—
Equity in earnings of Mentor		46			—			—
Gain on sale of securities carried at fair value		614			—			469
Unrealized gain on loan securities carried at fair value		447			2,738			5,011
Operating income		33,401			36,220			19,518
General and administrative expense		(121	)		(75	)		(300	)
Interest expense		(1,494	)		(850	)		—
Impairment loss on preferred equity investments		—			—			—
Impairment loss on investment in Lex-Win Concord		—			—			—
Provision for loss on loans receivable		—			—			—
Loan assets net income		31,786			35,295			19,218
REIT Securities
Dividends		1,054			984			2,655
Gain on sale of securities carried at fair value		41			123			558
Unrealized gain on securities carried at fair value		6,916			2,788			5,060
REIT securities net income		8,011			3,895			8,273
Net Income		39,953			24,178			29,801
Reconciliations to GAAP Net Income:
Corporate Income (Expense)
Interest and other income		699			1,179			139
General and administrative		(12,393	)		(11,173	)		(8,198	)
Transaction costs		(421	)		(519	)		(321	)
Interest expense		(3,153	)		(2,094	)		(2,182	)
Loss on redemption of Series B-1 Preferred Shares		—			(100	)		—
State and local taxes		(234	)		(379	)		(133	)
Income from continuing operations before non-controlling interest		24,451			11,092			19,106
Non-controlling interest		247			(814	)		(888	)
Income from continuing operations attributable to Winthrop Realty Trust	$	24,698		$	10,278		$	18,218