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Segment Reporting
12 Months Ended
Dec. 31, 2012
Segment Reporting [Abstract]  
Segment Reporting
Segment Reporting
We have four reportable operating segments at December 31, 2012, the first three of which consist of the ownership and rental of (i) industrial, (ii) office and (iii) medical office real estate investments. The operations of our industrial, office and medical office properties, along with our retail properties, are collectively referred to as "Rental Operations." Our retail properties, as well as any other properties not included in our reportable segments, do not by themselves meet the quantitative thresholds for separate presentation as a reportable segment. The fourth reportable segment consists of various real estate services such as property management, asset management, maintenance, leasing, development, general contracting and construction management to third-party property owners and joint ventures, and is collectively referred to as "Service Operations." Our reportable segments offer different products or services and are managed separately because each segment requires different operating strategies and management expertise.
During 2012, one of the quantitative thresholds was triggered, which required our medical office property operating segment to be presented as a separate reportable segment. As such, our medical office properties are presented as a separate reportable segment for the years ended December 31, 2012, 2011 and 2010.
Other revenue consists of other operating revenues not identified with one of our operating segments. Interest expense and other non-property specific revenues and expenses are not allocated to individual segments in determining our performance measure.
We assess and measure the overall operating results of the General Partner and the Partnership primarily based upon Funds From Operations ("FFO"), which is an industry performance measure that management believes is a useful indicator of consolidated operating performance. FFO is used by industry analysts and investors as a supplemental operating performance measure of a REIT. The National Association of Real Estate Investment Trusts ("NAREIT") created FFO as a non-GAAP supplemental measure of REIT operating performance. FFO, as defined by NAREIT, represents GAAP net income (loss), excluding extraordinary items as defined under GAAP, gains or losses from sales of previously depreciated real estate assets, impairment charges related to depreciable real estate assets, plus certain non-cash items such as real estate asset depreciation and amortization, and after similar adjustments for unconsolidated partnerships and joint ventures. The most comparable GAAP measure is net income (loss) attributable to common shareholders or common unitholders. FFO attributable to common shareholders or common unitholders should not be considered as a substitute for net income (loss) attributable to common shareholders or common unitholders or any other measures derived in accordance with GAAP and may not be comparable to other similarly titled measures of other companies. FFO is calculated in accordance with the definition that was adopted by the Board of Governors of NAREIT.
Historical cost accounting for real estate assets in accordance with GAAP implicitly assumes that the value of real estate assets diminishes predictably over time. Since real estate values instead have historically risen or fallen with market conditions, many industry analysts and investors have considered presentation of operating results for real estate companies that use historical cost accounting to be insufficient by themselves. Management believes that the use of FFO attributable to common shareholders or common unitholders, combined with net income (which remains the primary measure of performance), improves the understanding of operating results of REITs among the investing public and makes comparisons of REIT operating results more meaningful. Management believes that the use of FFO as a performance measure enables investors and analysts to readily identify the operating results of the long-term assets that form the core of a REIT's activity and assist them in comparing these operating results between periods or between different companies.
We do not allocate certain income and expenses ("Non-Segment Items," as shown in the table below) to our operating segments. Thus, the operational performance measure presented here on a segment-level basis represents net earnings, excluding depreciation expense and the Non-Segment Items not allocated, and is not meant to present FFO as defined by NAREIT.
 The following table shows (i) the revenues for each of the reportable segments and (ii) a reconciliation of FFO attributable to common shareholders or common unitholders to net income (loss) attributable to common shareholders or common unitholders for the years ended December 31, 2012, 2011 and 2010 (in thousands):
 
2012
 
2011
 
2010
Revenues
 
 
 
 
 
Rental Operations:
 
 
 
 
 
Industrial
$
438,525

 
$
379,030

 
$
280,538

Office
267,982

 
272,807

 
313,712

Medical Office
98,647

 
57,673

 
44,287

Non-reportable Rental Operations
21,794

 
21,829

 
19,912

General contractor and service fee revenue ("Service Operations")
275,071

 
521,796

 
515,361

Total Segment Revenues
1,102,019

 
1,253,135

 
1,173,810

Other Revenue
7,421

 
11,544

 
11,094

Consolidated Revenue from continuing operations
1,109,440

 
1,264,679

 
1,184,904

Discontinued Operations
8,284

 
194,166

 
248,024

Consolidated Revenue
$
1,117,724

 
$
1,458,845

 
$
1,432,928

Reconciliation of Funds From Operations
 
 
 
 
 
Net earnings excluding depreciation and Non-Segment Items
 
 
 
 
 
Industrial
$
327,175

 
$
278,315

 
$
210,202

Office
155,456

 
160,530

 
185,914

Medical Office
65,932

 
35,450

 
28,177

Non-reportable Rental Operations
15,300

 
15,563

 
13,646

Service Operations
20,201

 
41,316

 
28,496

 
584,064

 
531,174

 
466,435

Non-Segment Items:
 
 
 
 
 
Interest expense
(245,170
)
 
(220,455
)
 
(186,407
)
Impairment charges on non-depreciable properties

 
(12,931
)
 
(9,834
)
Interest and other income
514

 
658

 
534

Other operating expenses
(633
)
 
(1,237
)
 
(1,231
)
General and administrative expenses
(46,424
)
 
(43,107
)
 
(41,329
)
Undeveloped land carrying costs
(8,829
)
 
(8,934
)
 
(9,203
)
Loss on debt transactions

 

 
(16,349
)
Acquisition-related activity
(4,192
)
 
(1,188
)
 
55,820

Income tax benefit
103

 
194

 
1,126

Other non-segment income
3,728

 
6,131

 
8,132

Net (income) loss attributable to noncontrolling interests - consolidated entities not wholly owned by the Partnership
(382
)
 
115

 
185

Joint venture items
37,469

 
38,161

 
40,346

Dividends on preferred shares/Preferred Units
(46,438
)
 
(60,353
)
 
(69,468
)
Adjustments for redemption/repurchase of preferred shares/Preferred Units
(5,730
)
 
(3,796
)
 
(10,438
)
Discontinued operations
1,905

 
57,687

 
77,056

FFO attributable to common unitholders of the Partnership
269,985

 
282,119

 
305,375

Net (income) loss attributable to noncontrolling interests - common limited partnership interests in the Partnership
2,273

 
(859
)
 
351

Noncontrolling interest share of FFO adjustments
(7,054
)
 
(6,644
)
 
(7,771
)
FFO attributable to common shareholders of the General Partner
265,204

 
274,616

 
297,955

Depreciation and amortization on continuing operations
(375,965
)
 
(326,226
)
 
(276,045
)
Depreciation and amortization on discontinued operations
(3,454
)
 
(59,453
)
 
(84,139
)
Company's share of joint venture adjustments
(34,702
)
 
(33,687
)
 
(34,674
)
Earnings from depreciated property sales on continuing operations
344

 
68,549

 
39,662

Earnings from depreciated property sales on discontinued operations
13,467

 
100,882

 
33,054

Earnings from depreciated property sales - share of joint venture
1,907

 
91

 
2,308

Noncontrolling interest share of FFO adjustments
7,054

 
6,644

 
7,771

Net income (loss) attributable to common shareholders of the General Partner
$
(126,145
)
 
$
31,416

 
$
(14,108
)
Add back: Net income (loss) attributable to noncontrolling interests - common limited partnership interests in the Partnership
(2,273
)
 
859

 
(351
)
Net income (loss) attributable to common unitholders of the Partnership
$
(128,418
)
 
$
32,275

 
$
(14,459
)






 The assets for each of the reportable segments as of December 31, 2012 and 2011 are as follows (in thousands):
 
December 31, 2012
 
December 31, 2011
Assets
 
 
 
Rental Operations:
 
 
 
Industrial
$
3,836,721

 
$
3,586,250

Office
1,683,314

 
1,742,196

Medical Office
1,202,929

 
580,177

Non-reportable Rental Operations
175,197

 
209,056

Service Operations
162,219

 
167,382

Total Segment Assets
7,060,380

 
6,285,061

Non-Segment Assets - Partnership
499,721

 
718,921

Consolidated Assets - Partnership
$
7,560,101

 
$
7,003,982

Non-Segment Assets - General Partner

 
455

Consolidated Assets - General Partner
$
7,560,101

 
$
7,004,437


Tenant improvements and leasing costs to re-let rental space that had been previously under lease to tenants are referred to as second generation expenditures. Building improvements that are not specific to any tenant but serve to improve integral components of our real estate properties are also second generation expenditures. In addition to revenues and FFO, we also review our second generation capital expenditures in measuring the performance of our individual Rental Operations segments. We review these expenditures to determine the costs associated with re-leasing vacant space and maintaining the condition of our properties. Our second generation capital expenditures by segment are summarized as follows for the years ended December 31, 2012, 2011 and 2010 (in thousands):
 
2012
 
2011
 
2010
Second Generation Capital Expenditures
 
 
 
 
 
Industrial
$
33,095

 
$
34,872

 
$
23,271

Office
30,092

 
63,933

 
65,203

Medical Office
641

 
410

 
183

Non-reportable Rental Operations segments
56

 
49

 
66

Total
$
63,884

 
$
99,264

 
$
88,723