Business Segments

3 Months Ended

Mar. 31, 2022

Segment Reporting [Abstract]

Business Segments

NOTE 10. BUSINESS SEGMENTS

Our current business strategy includes two operating segments: Real Estate Operations and Strategic Capital. We generate revenues, earnings, net operating income and cash flows through our segments, as follows:

• Real Estate Operations. This operating segment represents the ownership and development of operating properties and is the largest component of our revenue and earnings. We collect rent from our customers through operating leases, including reimbursements for the majority of our property operating costs. Each operating property is considered to be an individual operating segment with similar economic characteristics; these properties are combined within the reportable business segment based on geographic location. Our Real Estate Operations segment also includes development activities that lead to rental operations, including land held for development and properties currently under development, and other real estate investments. Within this line of business, we utilize the following: (i) our land bank; (ii) the development and leasing expertise of our local teams; and (iii) our customer relationships.

• Strategic Capital. This operating segment represents the management of unconsolidated co-investment ventures. We generate strategic capital revenues primarily from our unconsolidated co-investment ventures through asset management and property management services and we earn additional revenues by providing leasing, acquisition, construction, development, financing and disposition services. Depending on the structure of the venture and the returns provided to our partners, we also earn revenues through promotes periodically during the life of a venture or upon liquidation. Each unconsolidated co-investment venture we manage is considered to be an individual operating segment with similar economic characteristics; these ventures are combined within the reportable business segment based on geographic location.

Reconciliations are presented below for: (i) each reportable business segment’s revenues from external customers to Total Revenues; (ii) each reportable business segment’s net operating income from external customers to Operating Income and Earnings Before Income Taxes; and (iii) each reportable business segment’s assets to 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 Total Revenues, Operating Income, Earnings 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 not allocated but reflected as reconciling items.

The following reconciliations are presented in thousands:

	Three Months Ended March 31,
		2022			2021
Revenues:
Real estate operations segment:
U.S.	$	1,038,991		$	975,083
Other Americas		22,191			23,893
Europe		12,008			18,856
Asia		12,013			10,523
Total real estate operations segment		1,085,203			1,028,355
Strategic capital segment:
U.S.		50,635			33,983
Other Americas		11,653			10,663
Europe		46,196			43,429
Asia		25,441			31,886
Total strategic capital segment		133,925			119,961
Total revenues		1,219,128			1,148,316
Segment net operating income:
Real estate operations segment:
U.S. (1)		771,210			709,303
Other Americas		16,107			17,595
Europe		3,970			13,191
Asia		8,653			6,938
Total real estate operations segment		799,940			747,027
Strategic capital segment:
U.S. (1)		27,677			8,302
Other Americas		7,374			7,906
Europe		32,463			32,171
Asia		14,600			22,132
Total strategic capital segment		82,114			70,511
Total segment net operating income		882,054			817,538
Reconciling items:
General and administrative expenses		(74,646	)		(78,032	)
Depreciation and amortization expenses		(396,647	)		(397,575	)
Gains on dispositions of development properties and land, net		210,206			173,643
Gains on other dispositions of investments in real estate, net		584,835			16,623
Operating income		1,205,802			532,197
Earnings from unconsolidated entities, net		76,962			67,049
Interest expense		(64,064	)		(71,281	)
Interest and other income, net		1,053			4,746
Foreign currency and derivative gains, net		47,356			80,152
Losses on early extinguishment of debt, net		(18,165	)		(187,453	)
Earnings before income taxes	$	1,248,944		$	425,410

	March 31, 2022		December 31, 2021
Segment assets:
Real estate operations segment:
U.S.	$	44,170,370	$	44,136,140
Other Americas		1,212,592		1,148,371
Europe		1,871,785		1,837,800
Asia		973,745		965,854
Total real estate operations segment		48,228,492		48,088,165
Strategic capital segment: (2)
U.S.		11,666		11,984
Europe		25,280		25,280
Asia		277		299
Total strategic capital segment		37,223		37,563
Total segment assets		48,265,715		48,125,728
Reconciling items:
Investments in and advances to unconsolidated entities		8,679,011		8,610,958
Assets held for sale or contribution		373,664		669,688
Cash and cash equivalents		1,912,750		556,117
Other assets		548,731		523,729
Total reconciling items		11,514,156		10,360,492
Total assets	$	59,779,871	$	58,486,220

(1) This includes compensation and personnel costs for employees who were located in the U.S. but also support other geographies.

(2) Represents management contracts and goodwill recorded in connection with business combinations associated with the Strategic Capital segment. Goodwill was $25.3 million at March 31, 2022 and December 31, 2021.