Business Segments

12 Months Ended

Dec. 31, 2011

Business Segments [Abstract]

Business Segments

22. Business Segments

Our business strategy currently includes two operating segments, as follows:

• Real Estate Operations — representing the direct long-term ownership of industrial operating properties. Each operating property is considered to be an individual operating segment having similar economic characteristics that are combined within the reportable segment based upon geographic location. Also included in this segment is the development and acquisition of properties for continued direct ownership, including land held for development and properties currently under development and land we own and lease to customers under ground leases. We own real estate in the Americas (Canada, Mexico and the United States), Europe (Austria, Belgium, the Czech Republic, France, Germany, Hungary, Italy, the Netherlands, Poland, Romania, Slovakia, Spain, Sweden and the United Kingdom) and Asia (China, Japan and Singapore)

• Private Capital — representing the long-term management of unconsolidated co-investment ventures and other joint ventures. We recognize fees and incentives earned for services performed on behalf of the unconsolidated investees and certain third parties. In connection with the Merger, we have reevaluated this segment to exclude our investments and earnings of all of our unconsolidated co-investment ventures to better align the segment with the way management evaluates this line of business. We have reclassified prior periods to reflect this change.

We report the costs associated with our private capital segment for all periods presented in the line item Private Capital Expenses in our Consolidated Statements of Operations. These costs include the direct expenses associated with the asset management of the property funds provided by individuals who are assigned to our private capital segment. In addition, in order to achieve efficiencies and economies of scale, all of our property management functions are provided by a team of professionals who are assigned to our real estate operations segment. These individuals perform the property-level management of the properties we own and the properties we manage that are owned by the unconsolidated investees. We allocate the costs of our property management function to the properties we consolidate (reported in Rental Expenses) and the properties owned by the unconsolidated investees (included in Private Capital Expenses), by using the square feet owned by the respective portfolios. We are further reimbursed by the co-investments ventures for certain expenses associated with managing these property funds.

Each entity we manage is considered to be an individual operating segment having similar economic characteristics that are combined within the reportable segment based upon geographic location. Our operations in the private capital segment are in the Americas (Brazil, Canada, Mexico and the United States), Europe (Belgium, the Czech Republic, France, Germany, Hungary, Italy, the Netherlands, Poland, Slovakia, Spain, Sweden and the United Kingdom) and Asia (China and Japan).

We no longer have a CDFS segment and the only activity being reported in the CDFS segment in 2009 is the gain on the sale of our investment in Japan as it was essentially the recognition of gains from this segment that were deferred due to our ownership interest at the time of the contribution.

We present the operations and net gains associated with properties sold to third parties or classified as held for sale as discontinued operations, which results in the restatement of prior year operating results to exclude the items presented as discontinued operations.

Reconciliations are presented below for: (i) each reportable business segment’s revenue from external customers to our Total Revenues; (ii) each reportable business segment’s net operating income from external customers to our Loss before Income Taxes; and (iii) each reportable business segment’s assets to our Total Assets. Our chief operating decision makers rely primarily on net operating income and similar measures to make decisions about allocating resources and assessing segment performance. The applicable components of our Revenues, Loss before Income Taxes and Total Assets are allocated to each reportable business segment’s revenues, net operating income and assets. Items that are not directly assignable to a segment, such as certain corporate income and expenses, are reflected as reconciling items. The following reconciliations are presented in thousands:

	Years Ended December 31,
	2011		2010		2009
Revenues (1):
Real estate operations (2):
Americas	$	890,135	$	587,911	$	594,365
Europe		344,249		91,458		62,477
Asia		161,288		82,692		45,129
Total Real Estate Operations segment		1,395,672		762,061		701,971
Private capital (3):
Americas		76,872		66,653		67,964
Europe		46,087		54,835		50,814
Asia		14,660		1,038		26,185
Total private capital segment		137,619		122,526		144,963
CDFS business (4):
Asia		-		-		180,237
Total CDFS business segment		-		-		180,237
Total revenues	$	1,533,291	$	884,587	$	1,027,171
Net operating income:
Real estate operations (5):
Americas	$	614,560	$	419,611	$	415,923
Europe		249,342		49,975		17,009
Asia		123,087		60,912		30,913
Total Real Estate Operations segment		986,989		530,498		463,845
Private capital (3)(6):
Americas		42,644		40,354		44,284
Europe		30,708		41,200		34,508
Asia		9,305		313		22,755
Total private capital segment		82,657		81,867		101,547
CDFS business (4):
Asia		-		-		180,237
Total CDFS business segment		-		-		180,237
Total segment net operating income		1,069,646		612,365		745,629
Reconciling items:
General and administrative expenses		(195,161)		(165,981)		(192,231)
Merger, acquisition and other integration expenses		(140,495)		-		-
Impairment of real estate properties		(21,237)		(736,612)		(331,592)
Depreciation and amortization expense		(585,323)		(311,268)		(266,364)
Earnings from unconsolidated investees, net		59,935		23,678		28,059
Interest expense		(468,738)		(461,166)		(372,768)
Impairment of goodwill and other assets		(126,432)		(412,745)		(163,644)
Interest and other income (expense), net		12,008		15,847		(39,349)
Gains on acquisitions and dispositions of investments in real estate, net		111,684		28,488		35,262
Foreign currency exchange and derivative gains (losses), net		41,172		(11,081)		35,626
Gain (loss) on early extinguishment of debt, net		258		(201,486)		172,258
Total reconciling items		(1,312,329)		(2,232,326)		(1,094,743)
Loss before income taxes	$	(242,683)	$	(1,619,961)	$	(349,114)

	December 31,
	2011		2010
Assets:
Real estate operations (7):
Americas	$	13,305,147	$	7,299,644
Europe		6,823,814		2,619,455
Asia		3,502,033		1,889,879
Total Real Estate Operations segment		23,630,994		11,808,978
Private capital (8):
Americas		43,394		14,300
Europe		61,946		28,424
Asia		9,368		-
Total private capital segment		114,708		42,724
Total segment assets		23,745,702		11,851,702
Reconciling items:
Investments in and advances to other unconsolidated investees		2,857,755		2,024,661
Notes receivable backed by real estate		322,834		302,144
Assets held for sale (9)		444,850		574,791
Cash and cash equivalents		176,072		37,634
Other assets		176,699		111,735
Total reconciling items		3,978,210		3,050,965
Total assets	$	27,723,912	$	14,902,667

(1) Includes revenues attributable to the United States for the years ended December 31, 2011, 2010 and 2009 of $891.1 million, $611.4 million and $588.3 million, respectively.

(2) Includes rental income of our industrial properties and land subject to ground leases, as well as development management and other income.

(3) Includes revenues earned from managing our unconsolidated entities.

(4) In 2009, includes the recognition of gains previously deferred from CDFS contributions to the Japan property funds due to our sale of these investments in February 2009.

(5) Includes rental income less rental expenses of our industrial properties and land subject to ground leases, as well as development management and other income less related expenses.

(6) Amounts are reduced by the direct costs we incur to manage the unconsolidated investees and certain third parties that are presented as Private Capital Expenses in our Consolidated Statements of Operations.

(7) Includes long-lived assets attributable to the United States as of December 31, 2011 and 2010 of $11.8 billion and $8.6 billion, respectively.

(8) Represents management contracts recorded in connection with business combinations and goodwill associated with the Private Capital segment.

(9) Of the amounts, net of impairments, that were reclassified to Assets Held for Sale at December 31, 2011, $444.9 million was reclassified from the Real Estate Operations segment (Americas - $79.1 million, Europe - $332.5 million and Asia - $33.3 million). Of the amounts, net of impairments, that were reclassified to Assets Held for Sale at December 31, 2010, $554.2 million was reclassified from the Real Estate Operations segment (Americas - $470.5 million, Europe - $18.2 million and Asia - $65.5 million) and $20.6 million, all in the Americas, was not allocated to a segment.