Segment Reporting

3 Months Ended

Mar. 31, 2021

Segment Reporting [Abstract]

Segment Reporting

Segment Reporting

Reportable Segments

As of March 31, 2021, we had two reportable operating segments, the first consisting of the ownership and rental of industrial real estate investments. We continue to increase our investments in quality industrial properties largely based on anticipated geographic trends in supply and demand for industrial buildings, as well as the real estate needs of our major tenants that operate on a national level. We treat our industrial properties as a single operating and reportable segment based on our method of internal reporting. Properties not included in our reportable segments, because they are not industrial properties and do not by themselves meet the quantitative thresholds for separate presentation as a reportable segment, are generally referred to as non-reportable Rental Operations. Our non-reportable Rental Operations primarily include our remaining office properties and medical office property at March 31, 2021. The operations of our industrial properties, as well as our non-reportable Rental Operations, are collectively referred to as "Rental Operations."

Our second reportable segment consists of various real estate services such as development, general contracting, construction management, property management, asset management, maintenance and leasing to third-party property owners, customers and joint ventures, and is collectively referred to as "Service Operations." The Service Operations segment is identified as one single operating segment because the lowest level of financial results reviewed by our chief operating decision maker are the results for the Service Operations segment in total. Further, our reportable segments 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 (in thousands): 

	Three Months Ended March 31,
	2021		2020
Revenues
Rental Operations:
Industrial	$	256,670	$	216,952
Non-reportable Rental Operations	1,509		1,528
Service Operations	31,113		7,614
Total segment revenues	289,292		226,094
Other revenue	—		275
Consolidated revenue	$	289,292	$	226,369

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 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.

The following table shows a reconciliation of our segment-level measures of profitability to consolidated income from continuing operations before income taxes (in thousands and excluding discontinued operations): 

	Three Months Ended March 31,
	2021		2020
PNOI
Industrial	$	176,481	$	154,646
Non-reportable Rental Operations	1,273		1,819
PNOI, excluding all sold properties	177,754		156,465
PNOI from sold properties included in continuing operations	254		2,529
PNOI, continuing operations	$	178,008	$	158,994
Earnings from Service Operations	1,650		1,046
Rental Operations revenues and expenses excluded from PNOI:
Straight-line rental income and expense, net	8,021		1,703
Revenues related to lease buyouts	310		392
Amortization of lease concessions and above and below market rents	2,832		2,557
Intercompany rents and other adjusting items	(418)		(394)
Non-Segment Items:
Equity in earnings of unconsolidated joint ventures	16,268		2,539
Interest expense	(22,507)		(23,494)
Depreciation and amortization expense	(93,573)		(85,359)
Gain on sale of properties	21,360		8,937
Impairment charges	—		(5,626)
Interest and other income, net	463		1,395
General and administrative expenses	(24,217)		(21,763)
Gain on land sales	1,238		135
Other operating expenses	(1,145)		(1,112)
Loss on extinguishment of debt	(70)		(17,806)
Non-incremental costs related to successful leases	(2,958)		(2,525)
Other non-segment revenues and expenses, net	126		(67)
Income from continuing operations before income taxes	$	85,388	$	19,552