Reportable Segments

6 Months Ended

Jun. 30, 2014

Segment Reporting [Abstract]

Reportable Segments

17. Reportable Segments

The 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 reportable segments in interim financial reports issued to shareholders.

Based on the Trust’s method of internal reporting, management determined that it 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 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 reportable 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 June 30, 2014 and December 31, 2013 (in thousands):

	June 30, 2014		December 31, 2013
Assets
Operating properties	$	872,242	$	845,698
Loan assets		90,947		147,702
REIT securities		—		—
Corporate
Cash and cash equivalents		133,576		112,512
Restricted cash		334		186
Accounts receivable and prepaids		1,204		543
Deferred financing costs		2,468		2,645
Assets held for sale		2,396		23,038
Total Assets	$	1,103,167	$	1,132,324
Capital Expenditures
Operating Properties	$	3,758	$	3,892

The Trust defines operating income for each segment presented as all items of income and expense directly derived from or incurred by each reportable segment before depreciation, amortization, interest expense and other non-recurring non-operating items. 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 six months ended June 30, 2014 and 2013 (in thousands):

	For the Three Months Ended						For the Six Months Ended
	June 30, 2014			June 30, 2013			June 30, 2014			June 30, 2013
Operating Properties
Rents and reimbursements	$	20,165		$	12,372		$	39,228		$	23,769
Operating expenses		(7,150	)		(3,870	)		(14,581	)		(7,555	)
Real estate taxes		(2,420	)		(1,213	)		(4,615	)		(1,950	)
Equity in earnings of preferred equity investment in Fenway-Wateridge		7			185			14			387
Equity in earnings of preferred equity investment in Vintage Housing Holdings		557			—			557			—
Equity in income of Vintage Housing Holdings		2,059			2,696			3,679			4,617
Equity in income of WRT-Elad		1,273			167			2,509			610
Equity in income of 701 Seventh Avenue		1,939			623			3,497			1,320
Equity in income of Fenway-Wateridge		54			47			106			83
Equity in income of Marc Realty investment		12			69			7			9
Equity in loss of Sealy Northwest Atlanta		(138	)		(87	)		(266	)		(233	)
Equity in income of Mentor Retail		17			16			37			33
Equity in loss of Atrium Mall		(53	)		—			(56	)		—
Equity in loss of Edens Plaza Associates		(1	)		—			(1	)		—
Operating properties operating income		16,321			11,005			30,115			21,090
Depreciation and amortization expense		(6,652	)		(3,894	)		(13,883	)		(7,747	)
Interest expense		(4,191	)		(3,669	)		(7,963	)		(6,734	)
Impairment loss on equity investments		(2,422	)		—			(2,422	)		—
Impairment loss on investments in real estate		—			—			(9,200	)		—
Gain on sale of investments in real estate		8			—			8			—
Settlement expense		—			(134	)		—			(134	)
Operating properties net income (loss)		3,064			3,308			(3,345	)		6,475
Loan Assets
Interest income		2,366			3,446			6,658			7,900
Discount accretion		386			761			1,591			1,477
Unrealized gain on loan securities carried at fair value		—			215			—			215
Equity in loss of ROIC Lakeside Eagle		(8	)		(2	)		(19	)		(15	)
Equity in income of Concord Debt Holdings		249			36			515			71
Equity in income of CDH CDO		551			0			984			150
Equity in (loss) income of Concord Debt Holdings (1)		(2	)		15			88			29
Equity in income of CDH CDO (1)		414			427			1,247			907
Equity in income of WRT-Stamford		232			224			461			445
Equity in loss of SoCal Office Loan Portfolio		—			(2	)		—			(2	)
Equity in income (loss) of RE CDO Management		2			(9	)		6			3,761
Equity in income of 10 Metrotech		—			304			—			608
Loan assets operating income		4,190			5,415			11,531			15,546
General and administrative expense		(4	)		(21	)		(220	)		(35	)
Interest expense		—			(647	)		(121	)		(1,227	)
Loan assets net income		4,186			4,747			11,190			14,284
REIT Securities
Interest and dividends		—			100			—			250
Gain (loss) on sale of securities carried at fair value		—			—			2			(102	)
Unrealized loss on securities carried at fair value		—			(1,860	)		—			(142	)
REIT securities net income (loss)		—			(1,760	)		2			6
Net income from segments before corporate income (expense)		7,250			6,295			7,847			20,765
Reconciliations to GAAP Net Income:
Corporate Income (Expense)
Interest income		114			116			199			185
Interest expense		(1,639	)		(1,827	)		(3,440	)		(3,654	)
General and administrative		(2,140	)		(1,073	)		(3,566	)		(1,901	)
Related party fees		(2,399	)		(2,291	)		(4,774	)		(4,557	)
Loss on extinguishment of debt		(564	)		—			(564	)		—
Transaction costs		(319	)		(46	)		(569	)		(52	)
State and local taxes		(93	)		(124	)		(105	)		(138	)
Income (loss) from continuing operations before non-controlling interest		210			1,050			(4,972	)		10,648
Income from discontinued operations		6,772			6,695			11,151			10,048
Non-controlling interest		1,980			629			3,423			1,424
Net Income Attributable to Winthrop Realty Trust	$	8,962		$	6,695		$	9,602		$	10,048

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