Segment Reporting

3 Months Ended

Mar. 31, 2015

Segment Reporting [Abstract]

Segment Reporting

Segment Reporting

Reportable Segments

We have four reportable operating segments at March 31, 2015, 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." Properties not included in our reportable segments, which do not by themselves meet the quantitative thresholds for separate presentation as a reportable segment, are referred to as non-reportable Rental Operations. 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.

Revenues by Reportable Segment

The following table shows the revenues for each of the reportable segments, as well as a reconciliation to consolidated revenues, for the three months endedMarch 31, 2015 and 2014, respectively (in thousands): 

	Three Months Ended March 31,
	2015		2014
Revenues
Rental Operations:
Industrial	$	147,227	$	133,291
Office	25,135		38,978
Medical Office	40,028		33,310
Non-reportable Rental Operations	401		2,088
Service Operations	52,820		55,820
Total segment revenues	265,611		263,487
Other revenue	1,824		979
Consolidated revenue from continuing operations	267,435		264,466
Discontinued operations	32,115		30,072
Consolidated revenue	$	299,550	$	294,538

Supplemental Performance Measure

Property level net operating income on a cash basis ("PNOI") is the non-GAAP supplemental performance measure that we use to evaluate the performance of, and to allocate resources among, the real estate investments in the reportable and operating segments that comprise our Rental Operations. PNOI for our Rental Operations segments is comprised of rental revenues from continuing operations less rental expenses and real estate taxes from continuing operations, along with certain other adjusting items (collectively referred to as "Rental Operations revenues and expenses excluded from PNOI," as shown in the following table). Additionally, we do not allocate interest expense, depreciation expense and certain other non-property specific revenues and expenses (collectively referred to as "Non-Segment Items," as shown in the following table) to our individual operating segments.

We evaluate the performance of our Service Operations reportable segment using net income or loss, as allocated to that segment ("Earnings from Service Operations").

The following table shows a reconciliation of our segment-level measures of profitability to consolidated income from continuing operations before income taxes for the three months endedMarch 31, 2015 and 2014, respectively (in thousands and excluding discontinued operations): 

	Three Months Ended March 31,
	2015			2014
PNOI
Industrial	$	96,684		$	85,691
Office	14,842			15,206
Medical Office	25,232			20,805
Non-reportable Rental Operations	—			253
PNOI, excluding all sold/held for sale properties	136,758			121,955
PNOI from sold/held-for-sale properties included in continuing operations	6,239			12,423
PNOI, continuing operations	142,997			134,378
Earnings from Service Operations	5,797			8,549
Rental Operations revenues and expenses excluded from PNOI:
Straight-line rental income and expense, net	6,697			4,769
Revenues related to lease buyouts	864			2,695
Amortization of lease concessions and above and below market rents	(1,713		)	(2,211		)
Intercompany rents and other adjusting items	(731		)	(1,537		)
Non-Segment Items:
Equity in earnings of unconsolidated companies	6,246			2,321
Interest expense	(49,610		)	(49,261		)
Depreciation expense	(81,903		)	(88,298		)
Gain on sale of properties	23,484			15,853
Interest and other income, net	338			351
General and administrative expenses	(17,004		)	(14,694		)
Gain on land sales	5,425			152
Other operating expenses	(1,557		)	(2,216		)
Acquisition-related activity	(28		)	(14		)
Other non-segment revenues and expenses, net	(402		)	(692		)
Income from continuing operations before income taxes	$	38,900		$	10,145

The most comparable GAAP measure to PNOI is income from continuing operations before income taxes. PNOI excludes expenses that materially impact our overall results of operations and, therefore, should not be considered as a substitute for income from continuing operations before income taxes or any other measures derived in accordance with GAAP. Furthermore, PNOI may not be comparable to other similarly titled measures of other companies.

Assets by Reportable Segment

The assets for each of the reportable segments at March 31, 2015 and December 31, 2014 were as follows (in thousands):

	March 31, 2015		December 31, 2014
Assets
Rental Operations:
Industrial	$	4,672,992	$	4,677,047
Office	1,212,796		1,252,627
Medical Office	1,210,170		1,229,632
Non-reportable Rental Operations	22,909		71,741
Service Operations	155,370		158,762
Total segment assets	7,274,237		7,389,809
Non-segment assets	456,267		365,030
Consolidated assets	$	7,730,504	$	7,754,839

The assets shown above include the amounts designated as held for sale, as of March 31, 2015, in connection with the Suburban Office Portfolio and Midwest Industrial Portfolio sales described in Note 12.