Reportable Segments

9 Months Ended

Sep. 30, 2013

Segment Reporting [Abstract]

Reportable Segments

17. 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, 2013 and December 31, 2012 (in thousands):

	September 30, 2013		December 31, 2012
Assets
Operating properties	$	630,666	$	562,822
Loan assets		154,265		239,534
REIT securities		7,074		19,694
Corporate
Cash and cash equivalents		165,762		97,682
Restricted cash		7,387		—
Accounts receivable and prepaids		574		336
Deferred financing costs		2,757		3,095
Total Assets	$	968,485	$	923,163
Capital Expenditures
Operating Properties	$	2,835	$	12,417

The Trust and its management assess and measure segment operating results and allocate resources based on a performance measure referred to as operating income. Operating income for each segment is 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, 2013 and 2012 (in thousands):

	For the Three Months Ended						For the Nine Months Ended
	September 30,			September 30,			September 30,			September 30,
	2013			2012			2013			2012
Operating Properties
Rents and reimbursements	$	15,099		$	12,224		$	45,026		$	35,022
Operating expenses		(5,272	)		(3,335	)		(14,697	)		(10,643	)
Real estate taxes		(1,705	)		(1,160	)		(4,184	)		(3,116	)
Equity in earnings of preferred equity investment in Fenway-Wateridge		189			—			576			—
Equity in loss of Sealy Northwest Atlanta		(130	)		(109	)		(363	)		(273	)
Equity in loss of Sealy Newmarket		—			(704	)		—			(2,171	)
Equity in income (loss) of Marc Realty investment		(26	)		377			(17	)		33
Equity in income (loss) of WRT-Elad		905			(57	)		1,515			458
Equity in income of Vintage		2,525			1,392			7,142			2,326
Equity in income of 701 Seventh Avenue		1,055			—			2,375			—
Equity in income of Fenway-Wateridge		50			—			133			—
Equity in income of Mentor		12			12			45			18
Equity in loss of Atrium Mall		(31	)		—			(31	)		—
Equity in income of F-II Co-invest		—			—			—			232
Operating properties operating income		12,671			8,640			37,520			21,886
Depreciation and amortization expense		(4,923	)		(4,416	)		(14,703	)		(11,623	)
Interest expense		(3,272	)		(3,126	)		(11,131	)		(9,230	)
Settlement expense		(16	)		—			(150	)		—
Operating properties net income		4,460			1,098			11,536			1,033
Loan Assets
Interest income		3,011			2,985			10,912			8,130
Discount accretion		806			425			2,283			5,984
Unrealized gain on loan securities carried at fair value		—			371			215			447
Equity in income of ROIC Riverside		—			238			—			706
Equity in loss of ROIC Lakeside Eagle		(7	)		(16	)		(22	)		(32	)
Equity in income of Concord Debt Holdings		2,970			35			3,041			386
Equity in income of CDH CDO		265			136			415			670
Equity in income of Concord Debt Holdings (1)		20			2			49			30
Equity in income of CDH CDO (1)		3,367			855			4,274			1,333
Equity in income of WRT-Stamford		256			232			701			548
Equity in income (loss) of SoCal Office Loan Portfolio		—			10,348			(2	)		9,710
Equity in (loss) income of RE CDO Management		(51	)		18			3,710			46
Equity in income of 10 Metrotech		2,676			50			3,284			31
Loan assets operating income		13,313			15,679			28,860			27,989
General and administrative expense		(2	)		(15	)		(37	)		(40	)
Interest expense		(335	)		(336	)		(1,562	)		(1,004	)
Loan assets net income		12,976			15,328			27,261			26,945
REIT Securities
Interest and dividends		100			312			350			904
(Loss) gain on sale of securities carried at fair value		(31	)		—			(133	)		41
Unrealized gain (loss) on securities carried at fair value		—			3,113			(142	)		7,254
REIT securities net income		69			3,425			75			8,199
Net income from segments before corporate income (expense)		17,505			19,851			38,872			36,177
Reconciliations to GAAP Net Income:
Corporate Income (Expense)
Interest income		101			242			286			433
Interest expense		(1,828	)		(954	)		(5,482	)		(1,326	)
General and administrative		(1,111	)		(767	)		(3,021	)		(2,407	)
Related party fees		(2,309	)		(2,316	)		(6,866	)		(6,641	)
Transaction costs		(106	)		(30	)		(158	)		(335	)
State and local taxes		(85	)		(64	)		(227	)		(211	)
Income from continuing operations		12,167			15,962			23,404			25,690
(Loss) income from discontinued operations attributable to Winthrop Realty Trust		(1,434	)		85			8,025			594
Net income		10,733			16,047			31,429			26,284
Net loss (income) attributable to non-controlling interest		995			(939	)		2,419			435
Net Income Attributable to Winthrop Realty Trust	$	11,728		$	15,108		$	33,848		$	26,719

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