| 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 had 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.
Subsequent to the adoption of the plan of liquidation, the Trust no
longer makes operating decisions or assess performance in separate
segments as all assets are considered held for sale. Accordingly,
the Trust has only one reporting and operating segment subsequent
to July 31, 2014.
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 July 31, 2014 and
December 31, 2013 (in thousands):
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|
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| |
|
July 31, 2014 |
|
|
December 31, 2013 |
|
|
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|
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Assets
|
|
|
|
|
|
|
|
|
|
Operating properties
|
|
$ |
874,237 |
|
|
$ |
845,698 |
|
|
Loan assets
|
|
|
105,614 |
|
|
|
147,702 |
|
|
REIT securities
|
|
|
— |
|
|
|
— |
|
|
Corporate
|
|
|
|
|
|
|
|
|
|
Cash and cash equivalents
|
|
|
111,096 |
|
|
|
112,512 |
|
|
Restricted cash
|
|
|
401 |
|
|
|
186 |
|
|
Accounts receivable and prepaids
|
|
|
837 |
|
|
|
543 |
|
|
Deferred financing costs
|
|
|
2,442 |
|
|
|
2,645 |
|
|
Assets held for sale
|
|
|
2,414 |
|
|
|
23,038 |
|
|
|
|
|
|
|
|
|
|
|
Total Assets
|
|
$ |
1,097,041 |
|
|
$ |
1,132,324 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Capital Expenditures
|
|
|
|
|
|
|
|
|
|
Operating Properties
|
|
$ |
3,840 |
|
|
$ |
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 one and seven months ended July 31,
2014 and the three and nine months ended September 30, 2013
(in thousands):
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|
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|
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| |
|
For the One
Months Ended
July 31,
2014 |
|
|
For the Three
Months Ended
September 30,
2013 |
|
|
For the Seven
Months Ended
July 31,
2014 |
|
|
For the Nine
Months Ended
September 30,
2013 |
|
|
Operating Properties
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Rents and reimbursements
|
|
$ |
7,085 |
|
|
$ |
12,026 |
|
|
$ |
46,313 |
|
|
$ |
35,795 |
|
|
Operating expenses
|
|
|
(2,546 |
) |
|
|
(4,301 |
) |
|
|
(17,127 |
) |
|
|
(11,856 |
) |
|
Real estate taxes
|
|
|
(764 |
) |
|
|
(1,172 |
) |
|
|
(5,379 |
) |
|
|
(3,122 |
) |
|
Equity in earnings of preferred equity investment in
Fenway-Wateridge
|
|
|
3 |
|
|
|
189 |
|
|
|
17 |
|
|
|
576 |
|
|
Equity in earnings of preferred equity investment in Vintage
Housing Holdings
|
|
|
8 |
|
|
|
— |
|
|
|
565 |
|
|
|
— |
|
|
Equity in income of Vintage Housing Holdings
|
|
|
608 |
|
|
|
2,525 |
|
|
|
4,287 |
|
|
|
7,142 |
|
|
Equity in income of WRT-Elad
|
|
|
418 |
|
|
|
905 |
|
|
|
2,927 |
|
|
|
1,515 |
|
|
Equity in income of 701 Seventh Avenue
|
|
|
896 |
|
|
|
1,055 |
|
|
|
4,393 |
|
|
|
2,375 |
|
|
Equity in income of Fenway-Wateridge
|
|
|
36 |
|
|
|
50 |
|
|
|
142 |
|
|
|
133 |
|
|
Equity in income of Marc Realty investment
|
|
|
(26 |
) |
|
|
(26 |
) |
|
|
(19 |
) |
|
|
(17 |
) |
|
Equity in loss of Sealy Northwest Atlanta
|
|
|
(22 |
) |
|
|
(130 |
) |
|
|
(288 |
) |
|
|
(363 |
) |
|
Equity in income of Mentor Retail
|
|
|
6 |
|
|
|
12 |
|
|
|
43 |
|
|
|
45 |
|
|
Equity in income (loss) of Atrium Mall
|
|
|
63 |
|
|
|
(31 |
) |
|
|
7 |
|
|
|
(31 |
) |
|
Equity in loss of Edens Plaza Associates
|
|
|
— |
|
|
|
— |
|
|
|
(1 |
) |
|
|
— |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating properties operating income
|
|
|
5,765 |
|
|
|
11,102 |
|
|
|
35,880 |
|
|
|
32,192 |
|
|
Depreciation and amortization expense
|
|
|
(2,074 |
) |
|
|
(3,847 |
) |
|
|
(15,957 |
) |
|
|
(11,594 |
) |
|
Interest expense
|
|
|
(1,360 |
) |
|
|
(2,829 |
) |
|
|
(9,323 |
) |
|
|
(9,563 |
) |
|
Impairment loss on equity investments
|
|
|
— |
|
|
|
— |
|
|
|
(2,422 |
) |
|
|
— |
|
|
Impairment loss on investments in real estate
|
|
|
— |
|
|
|
— |
|
|
|
(9,200 |
) |
|
|
— |
|
|
Settlement expense
|
|
|
— |
|
|
|
(16 |
) |
|
|
— |
|
|
|
(150 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating properties net income (loss)
|
|
|
2,331 |
|
|
|
4,410 |
|
|
|
(1,022 |
) |
|
|
10,885 |
|
|
|
|
|
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|
|
|
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Loan Assets
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest income
|
|
|
899 |
|
|
|
3,011 |
|
|
|
7,557 |
|
|
|
10,912 |
|
|
Discount accretion
|
|
|
495 |
|
|
|
806 |
|
|
|
2,086 |
|
|
|
2,283 |
|
|
Unrealized gain on loan securities carried at fair value
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
215 |
|
|
Equity in loss of ROIC Lakeside Eagle
|
|
|
(1 |
) |
|
|
(7 |
) |
|
|
(20 |
) |
|
|
(22 |
) |
|
Equity in income of Concord Debt Holdings
|
|
|
32 |
|
|
|
2,970 |
|
|
|
547 |
|
|
|
3,041 |
|
|
Equity in income of CDH CDO
|
|
|
81 |
|
|
|
265 |
|
|
|
1,065 |
|
|
|
415 |
|
|
Equity in (loss) income of Concord Debt Holdings (1)
|
|
|
(1 |
) |
|
|
20 |
|
|
|
87 |
|
|
|
49 |
|
|
Equity in income of CDH CDO (1)
|
|
|
79 |
|
|
|
3,367 |
|
|
|
1,326 |
|
|
|
4,274 |
|
|
Equity in income of WRT-Stamford
|
|
|
80 |
|
|
|
256 |
|
|
|
541 |
|
|
|
701 |
|
|
Equity in loss of SoCal Office Loan Portfolio
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(2 |
) |
|
Equity in income (loss) of RE CDO Management
|
|
|
1 |
|
|
|
(51 |
) |
|
|
7 |
|
|
|
3,710 |
|
|
Equity in income of 10 Metrotech
|
|
|
— |
|
|
|
2,676 |
|
|
|
— |
|
|
|
3,284 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loan assets operating income
|
|
|
1,665 |
|
|
|
13,313 |
|
|
|
13,196 |
|
|
|
28,860 |
|
|
General and administrative expense
|
|
|
(3 |
) |
|
|
(1 |
) |
|
|
(223 |
) |
|
|
(36 |
) |
|
Interest expense
|
|
|
— |
|
|
|
(335 |
) |
|
|
(121 |
) |
|
|
(1,562 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loan assets net income
|
|
|
1,662 |
|
|
|
12,977 |
|
|
|
12,852 |
|
|
|
27,262 |
|
|
|
|
|
|
|
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|
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|
|
|
|
|
|
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|
|
REIT Securities
|
|
|
|
|
|
|
|
|
|
|
|
|
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|
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|
|
Interest and dividends
|
|
|
— |
|
|
|
100 |
|
|
|
— |
|
|
|
350 |
|
|
Gain (loss) on sale of securities carried at fair value
|
|
|
— |
|
|
|
(31 |
) |
|
|
2 |
|
|
|
(133 |
) |
|
Unrealized loss on securities carried at fair value
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(142 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
REIT securities net income (loss)
|
|
|
— |
|
|
|
69 |
|
|
|
2 |
|
|
|
75 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income from segments before corporate income
(expense)
|
|
|
3,993 |
|
|
|
17,456 |
|
|
|
11,832 |
|
|
|
38,222 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reconciliations to GAAP Net Income:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Corporate Income (Expense)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest income
|
|
|
37 |
|
|
|
101 |
|
|
|
244 |
|
|
|
286 |
|
|
Interest expense
|
|
|
(510 |
) |
|
|
(1,828 |
) |
|
|
(3,950 |
) |
|
|
(5,482 |
) |
|
General and administrative
|
|
|
(494 |
) |
|
|
(1,103 |
) |
|
|
(4,060 |
) |
|
|
(3,004 |
) |
|
Related party fees
|
|
|
(774 |
) |
|
|
(2,309 |
) |
|
|
(5,548 |
) |
|
|
(6,866 |
) |
|
Loss on extinguishment of debt
|
|
|
— |
|
|
|
— |
|
|
|
(564 |
) |
|
|
— |
|
|
Transaction costs
|
|
|
(17 |
) |
|
|
(106 |
) |
|
|
(586 |
) |
|
|
(158 |
) |
|
Federal, state and local taxes
|
|
|
165 |
|
|
|
(83 |
) |
|
|
60 |
|
|
|
(222 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income (loss) from continuing operations before non-controlling
interest attributable to Winthrop Realty Trust
|
|
|
2,400 |
|
|
|
12,128 |
|
|
|
(2,572 |
) |
|
|
22,776 |
|
|
Income (loss) from discontinued operations attributable to Winthrop
Realty Trust
|
|
|
84 |
|
|
|
(1,395 |
) |
|
|
11,235 |
|
|
|
8,653 |
|
|
Non-controlling interest
|
|
|
395 |
|
|
|
995 |
|
|
|
3,818 |
|
|
|
2,419 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Income Attributable to Winthrop Realty Trust
|
|
$ |
2,879 |
|
|
$ |
11,728 |
|
|
$ |
12,481 |
|
|
$ |
33,848 |
|
|
|
|
|
|
|
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|
| (1) |
Represents the interest acquired from
Lexington Realty Trust on May 1, 2012. |
|