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Business Segments
9 Months Ended
Sep. 30, 2011
Business Segments 
Business Segments

9.     Business Segments

 

The Company operates in two business segments: real estate operations (including real estate leasing, making interim acquisition loans and other financing and asset/property management) including discontinued operations and investment banking/investment services (including real estate acquisition, development and broker/dealer services).  The Company has identified these segments because this information is the basis upon which management makes decisions regarding resource allocation and performance assessment.  The accounting policies of the reportable segments are the same as those described in “Significant Accounting Policies” in Note 2 to the Company’s consolidated financial statements included in its Annual Report on Form 10-K for the year ended December 31, 2010.  The Company’s operations are located in the United States of America.

 

The Company evaluates the performance of its reportable segments based on Funds From Operations (“FFO”), because management believes that FFO represents the most accurate measure of the reportable segment’s activity and is the basis for distributions paid to equity holders.  The Company defines FFO as net income (determined in accordance with GAAP), excluding gains (or losses) from sales of property and acquisition costs of newly acquired properties that are not capitalized, plus depreciation and amortization, including amortization of acquired above and below market lease intangibles, and after adjustments to exclude non-cash income (or losses) from non-consolidated or Sponsored REITs, plus distributions received from non-consolidated or Sponsored REITs.

 

FFO should not be considered as an alternative to net income (determined in accordance with GAAP), nor as an indicator of the Company’s financial performance, nor as an alternative to cash flows from operating activities (determined in accordance with GAAP), nor as a measure of the Company’s liquidity, nor is it necessarily indicative of sufficient cash flow to fund all of the Company’s needs.  Other real estate companies and the National Association of Real Estate Investment Trusts, or NAREIT, may define this term in a different manner.  We believe that in order to facilitate a clear understanding of the results of the Company, FFO should be examined in connection with net income and cash flows from operating, investing and financing activities in the consolidated financial statements.

 

The calculation of FFO by business segment for the three and nine months ended September 30, 2011 are shown in the following table:

 

(in thousands)

 

Real Estate
Operations

 

Investment
Banking/
Investment
Services

 

Total

 

Three Months Ended March 31, 2011

 

 

 

 

 

 

 

Net income (loss)

 

$

24,607

 

 

$

160

 

 

$

24,767

 

 

Gain on sale of property

 

(19,593

)

 

-

 

 

(19,593

)

 

Equity in income of non-consolidated REITs

 

(1,772

)

 

-

 

 

(1,772

)

 

Distributions from non-consolidated REITs

 

1,767

 

 

-

 

 

1,767

 

 

Acquisition costs

 

269

 

 

-

 

 

269

 

 

Depreciation and amortization

 

10,774

 

 

38

 

 

10,812

 

 

 

 

 

 

 

 

 

 

 

 

 

Funds From Operations

 

$

16,052

 

 

$

198

 

 

$

16,250

 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended June 30, 2011

 

 

 

 

 

 

 

 

 

 

Net income (loss)

 

$

7,107

 

 

$

3,274

 

 

$

10,381

 

 

Gain on sale of property

 

(2,346

)

 

-

 

 

(2,346

)

 

Equity in income of non-consolidated REITs

 

(1,166

)

 

-

 

 

(1,166

)

 

Distributions from non-consolidated REITs

 

1,215

 

 

-

 

 

1,215

 

 

Acquisition costs

 

9

 

 

-

 

 

9

 

 

Depreciation and amortization

 

12,010

 

 

37

 

 

12,047

 

 

 

 

 

 

 

 

 

 

 

 

 

Funds From Operations

 

$

16,829

 

 

$

3,311

 

 

$

20,140

 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended September 30, 2011

 

 

 

 

 

 

 

 

 

 

Net income (loss)

 

$

3,453

 

 

$

(139

)

 

$

3,314

 

 

Equity in income of non-consolidated REITs

 

(573

)

 

-

 

 

(573

)

 

Distributions from non-consolidated REITs

 

1,104

 

 

-

 

 

1,104

 

 

Acquisition costs

 

185

 

 

-

 

 

185

 

 

Depreciation and amortization

 

12,294

 

 

38

 

 

12,332

 

 

 

 

 

 

 

 

 

 

 

 

 

Funds From Operations

 

$

16,463

 

 

$

(101

)

 

$

16,362

 

 

 

 

 

 

 

 

 

 

 

 

 

Nine Months Ended September 30, 2011

 

 

 

 

 

 

 

 

 

 

Net income (loss)

 

$

35,167

 

 

$

3,295

 

 

$

38,462

 

 

Gain on sale of properties

 

(21,939

)

 

-    

 

 

(21,939

)

 

Equity in income of non-consolidated REITs

 

(3,511

)

 

-

 

 

(3,511

)

 

Distributions from non-consolidated REITs

 

4,086

 

 

-

 

 

4,086

 

 

Acquisition costs

 

463

 

 

-

 

 

463

 

 

Depreciation and amortization

 

35,078

 

 

113

 

 

35,191

 

 

 

 

 

 

 

 

 

 

 

 

 

Funds From Operations

 

$

49,344

 

 

$

3,408

 

 

$

52,752

 

 

 

The calculation of FFO by business segment for the three and nine months ended September 30, 2010 are shown in the following table:

 

(in thousands)

 

Real Estate
Operations

 

Investment
Banking/
Investment
Services

 

Total

 

Three Months Ended March 31, 2010

 

 

 

 

 

 

 

Net income (loss)

 

$

6,041

 

 

$

(479

)

 

$

5,562

 

 

Equity in income of non-consolidated REITs

 

(253

)

 

-

 

 

(253

)

 

Distributions from non-consolidated REITs

 

1,407

 

 

-

 

 

1,407

 

 

Depreciation and amortization

 

9,901

 

 

33

 

 

9,934

 

 

 

 

 

 

 

 

 

 

 

 

 

Funds From Operations

 

$

17,096

 

 

$

(446

)

 

$

16,650

 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended June 30, 2010

 

 

 

 

 

 

 

 

 

 

Net income (loss)

 

$

5,691

 

 

$

263

 

 

$

5,954

 

 

Equity in income of non-consolidated REITs

 

(380

)

 

-

 

 

(380

)

 

Distributions from non-consolidated REITs

 

1,324

 

 

-

 

 

1,324

 

 

Acquisition costs

 

129

 

 

-

 

 

129

 

 

Depreciation and amortization

 

9,636

 

 

39

 

 

9,675

 

 

 

 

 

 

 

 

 

 

 

 

 

Funds From Operations

 

$

16,400

 

 

$

302

 

 

$

16,702

 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended September 30, 2010

 

 

 

 

 

 

 

 

 

 

Net income (loss)

 

$

5,158

 

 

$

(401

)

 

$

4,757

 

 

Equity in income of non-consolidated REITs

 

(404

)

 

-

 

 

(404

)

 

Distributions from non-consolidated REITs

 

1,192

 

 

-

 

 

1,192

 

 

Acquisition costs

 

(4

)

 

-

 

 

(4

)

 

Depreciation and amortization

 

10,445

 

 

66

 

 

10,511

 

 

 

 

 

 

 

 

 

 

 

 

 

Funds From Operations

 

$

16,387

 

 

$

(335

)

 

$

16,052

 

 

 

 

 

 

 

 

 

 

 

 

 

Nine Months Ended September 30, 2010

 

 

 

 

 

 

 

 

 

 

Net income (loss)

 

$

16,890

 

 

$

(617

)

 

$

16,273

 

 

Equity in income of non-consolidated REITs

 

(1,037

)

 

-

 

 

(1,037

)

 

Distributions from non-consolidated REITs

 

3,923

 

 

-

 

 

3,923

 

 

Acquisition costs

 

125

 

 

-

 

 

125

 

 

Depreciation and amortization

 

29,982

 

 

138

 

 

30,120

 

 

 

 

 

 

 

 

 

 

 

 

 

Funds From Operations

 

$

49,883

 

 

$

(479

)

 

$

49,404

 

 

 

The following table is a summary of other financial information by business segment:

 

(in thousands)

 

Real Estate
Operations

 

Investment
Banking/
Investment
Services

 

Total

 

Three Months Ended September 30, 2011:

 

 

 

 

 

 

 

Revenue

 

$

34,716

 

 

$

1,003

 

 

$

35,719

 

 

Interest income

 

3

 

 

5

 

 

8

 

 

Interest expense

 

3,419

 

 

-

 

 

3,419

 

 

Capital expenditures

 

5,752

 

 

95

 

 

5,847

 

 

 

 

 

 

 

 

 

 

 

 

 

Nine Months Ended September 30, 2011

 

 

 

 

 

 

 

 

 

 

Revenue

 

$

101,392

 

 

$

7,869

 

 

$

109,261

 

 

Interest income

 

19

 

 

9

 

 

28

 

 

Interest expense

 

9,405

 

 

-

 

 

9,405

 

 

Capital expenditures

 

12,798

 

 

95

 

 

12,893

 

 

 

 

 

 

 

 

 

 

 

 

 

Investments in non-consolidated REITs

 

$

88,225

 

 

$

-

 

 

$

88,225

 

 

Identifiable assets as of September 30, 2011

 

1,336,269

 

 

9,515

 

 

1,345,784

 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended September 30, 2010:

 

 

 

 

 

 

 

 

 

 

Revenue

 

$

29,872

 

 

$

266

 

 

$

30,138

 

 

Interest income

 

4

 

 

-

 

 

4

 

 

Interest expense

 

1,892

 

 

-

 

 

1,892

 

 

Capital expenditures

 

4,219

 

 

87

 

 

4,306

 

 

 

 

 

 

 

 

 

 

 

 

 

Nine Months Ended September 30, 2010

 

 

 

 

 

 

 

 

 

 

Revenue

 

$

86,611

 

 

$

1,827

 

 

$

88,438

 

 

Interest income

 

20

 

 

1

 

 

21

 

 

Interest expense

 

5,280

 

 

-

 

 

5,280

 

 

Capital expenditures

 

7,275

 

 

149

 

 

7,424

 

 

 

 

 

 

 

 

 

 

 

 

 

Investments in non-consolidated REITs

 

$

89,995

 

 

$

-

 

 

$

89,995

 

 

Identifiable assets as of September 30, 2010

 

1,184,582

 

 

4,615

 

 

1,189,197