Segment Reporting

6 Months Ended

Jun. 30, 2015

Segment Reporting [Abstract]

Segment Reporting

Segment Reporting

Reportable Segments

We had four reportable operating segments at June 30, 2015, the first three of which consist of the ownership and rental of (i) industrial, (ii) medical office and (iii) office real estate investments. The operations of our industrial, medical office and 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 and six months endedJune 30, 2015 and 2014, respectively (in thousands): 

	Three Months Ended June 30,				Six Months Ended June 30,
	2015		2014		2015		2014
Revenues
Rental Operations:
Industrial	$	135,487	$	128,263	$	283,115	$	261,554
Medical Office	40,274		34,954		80,302		68,264
Office	23,691		38,586		48,826		77,565
Non-reportable Rental Operations	—		1,629		—		3,716
Service Operations	23,901		69,512		76,722		125,332
Total segment revenues	223,353		272,944		488,965		536,431
Other revenue	2,544		1,348		4,368		2,327
Consolidated revenue from continuing operations	225,897		274,292		493,333		538,758
Discontinued operations	49		29,331		32,164		59,403
Consolidated revenue	$	225,946	$	303,623	$	525,497	$	598,161

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 and six months endedJune 30, 2015 and 2014, respectively (in thousands and excluding discontinued operations): 

	Three Months Ended June 30,						Six Months Ended June 30,
	2015			2014			2015			2014
PNOI
Industrial	$	99,408		$	87,897		$	195,456		$	172,056
Medical Office	25,820			22,015			51,051			42,592
Office	12,885			13,611			25,166			25,525
Non-reportable Rental Operations	—			1,300			—			2,405
PNOI, excluding all sold/held for sale properties	138,113			124,823			271,673			242,578
PNOI from sold/held-for-sale properties included in continuing operations	2,751			16,306			11,463			31,602
PNOI, continuing operations	140,864			141,129			283,136			274,180
Earnings from Service Operations	2,163			5,655			7,960			14,204
Rental Operations revenues and expenses excluded from PNOI:
Straight-line rental income and expense, net	3,956			4,077			11,107			9,778
Revenues related to lease buyouts	94			1,525			958			4,220
Amortization of lease concessions and above and below market rents	(490		)	(1,389		)	(2,203		)	(3,600		)
Intercompany rents and other adjusting items	(412		)	(1,355		)	(872		)	(2,497		)
Non-Segment Items:
Equity in earnings of unconsolidated companies	15,123			60,826			21,369			63,147
Interest expense	(42,976		)	(51,448		)	(92,567		)	(103,306		)
Depreciation expense	(78,334		)	(88,500		)	(160,237		)	(176,798		)
Gain on sale of properties	107,410			70,318			130,894			86,171
Impairment charges on non-depreciable properties	(5,470		)	(2,523		)	(5,470		)	(2,523		)
Interest and other income, net	1,375			229			1,713			580
General and administrative expenses	(19,238		)	(10,365		)	(36,242		)	(25,059		)
Gain on land sales	17,012			3,889			22,437			4,041
Other operating expenses	(1,555		)	(1,987		)	(3,112		)	(4,203		)
Loss on extinguishment of debt	(82,653		)	(139		)	(82,653		)	(139		)
Acquisition-related activity	(1,305		)	(747		)	(1,333		)	(761		)
Other non-segment revenues and expenses, net	143			(80		)	(259		)	(772		)
Income from continuing operations before income taxes	$	55,707		$	129,115		$	94,626		$	136,663

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 June 30, 2015 and December 31, 2014 were as follows (in thousands):

	June 30, 2015		December 31, 2014
Assets
Rental Operations:
Industrial	$	4,510,800	$	4,677,047
Medical Office	1,226,567		1,229,632
Office	654,467		1,252,627
Non-reportable Rental Operations	—		71,741
Service Operations	136,614		158,762
Total segment assets	6,528,448		7,389,809
Non-segment assets	586,073		365,030
Consolidated assets	$	7,114,521	$	7,754,839