| Segment Reporting |
Segment Reporting
The Company's long-term portfolio strategy is to focus on three asset classes - retail, lodging, and student housing. During the year ended December 31, 2013, the Company has executed on this strategy by disposing of 313 non-strategic assets as well as classifying 224 non-strategic assets as held for sale. Beginning on September 30, 2013, the Company restated its business segments to: Retail, Lodging, Student Housing, and Non-core. Net operating income for the year December 31, 2012 and 2011 have been restated to reflect the change in business segments. The non-core segment includes office properties, industrial properties, bank branches, retail single tenant properties, and a conventional multi-family property. The Company has concentrated its efforts on driving portfolio growth in the multi-tenant retail, student housing and lodging segments to enhance the long-term value of each segment's portfolio and respective platforms. For its non-core properties, the Company strives to improve individual property performance to increase each property’s value. The Company evaluates segment performance primarily based on net operating income. Net operating income of the segments exclude interest expense, depreciation and amortization, general and administrative expenses, net income of noncontrolling interest and other investment income from corporate investments. The non-segmented assets primarily include the Company’s cash and cash equivalents, investment in marketable securities, construction in progress, investment in unconsolidated entities and notes receivable. For the year ended December 31, 2013, approximately 9% of the Company’s rental revenue (excluding lodging and student housing) from continuing operations, included in the non-core segment, was generated by two properties leased to AT&T, Inc. We also own a third property that is leased to AT&T, Inc., but the property is classified as held for sale as of December 31, 2013. As a result of the concentration of revenue generated from these properties, if AT&T were to cease paying rent or fulfilling its other monetary obligations, the Company could have significantly reduced rental revenues or higher expenses until the defaults were cured or the properties were leased to a new tenant or tenants.
The following table summarizes net operating income by segment as of and for the year ended December 31, 2013. | | | | | | | | | | | | | | | | | | | | | | Total | | Retail | | Lodging | | Student Housing | | Non - core | Rental income | $ | 355,946 |
| | $ | 215,134 |
| | $ | — |
| | $ | 55,773 |
| | $ | 85,039 |
| Straight line rent adjustment | 5,732 |
| | 5,198 |
| | — |
| | 373 |
| | 161 |
| Tenant recovery income | 71,207 |
| | 64,930 |
| | — |
| | 521 |
| | 5,756 |
| Other property income | 7,202 |
| | 3,822 |
| | — |
| | 2,809 |
| | 571 |
| Lodging income | 881,750 |
| | — |
| | 881,750 |
| | — |
| | — |
| Total income | $ | 1,321,837 |
| | $ | 289,084 |
| | $ | 881,750 |
| | $ | 59,476 |
| | $ | 91,527 |
| Operating expenses | $ | 743,928 |
| | $ | 93,626 |
| | $ | 609,480 |
| | $ | 24,014 |
| | $ | 16,808 |
| Net operating income | $ | 577,909 |
| | $ | 195,458 |
| | $ | 272,270 |
| | $ | 35,462 |
| | $ | 74,719 |
| Non allocated expenses (a) | $ | (408,141 | ) | | | | | | | | | Other income and expenses (b) | $ | (150,881 | ) | | | | | | | | | Earnings from unconsolidated entities (c) | $ | 8,485 |
| | | | | | | | | Provision for asset impairment (d) | $ | (242,896 | ) | | | | | | | | | Net loss from continuing operations | $ | (215,524 | ) | | | | | | | | | Income from discontinued operations, net | $ | 459,588 |
| | | | | | | | | Less: net income attributable to noncontrolling interests | $ | (16 | ) | | | | | | | | | Net income attributable to Company | $ | 244,048 |
| | | | | | | | | Balance Sheet Data: |
| | | | | | | | | Real estate assets, net (e) | $ | 7,131,196 |
| | $ | 2,207,062 |
| | $ | 3,492,657 |
| | $ | 639,848 |
| | $ | 791,629 |
| Non-segmented assets (f) | 2,531,268 |
| | | | | | | | | Total Assets | $ | 9,662,464 |
| | | | | | | | | Capital expenditures | $ | 66,640 |
| | $ | 12,736 |
| | $ | 49,781 |
| | $ | 2,316 |
| | $ | 1,807 |
|
| | (a) | Non allocated expenses consist of general and administrative expenses, business manager management fee and depreciation and amortization. |
| | (b) | Other income and expenses consist of interest and dividend income, interest expense, other income and expenses, realized gain, (loss) and (impairment) on securities, net, and income tax expense. |
| | (c) | Earnings from unconsolidated entities consists of equity (losses) in earnings of unconsolidated entities as well as gain, (loss) and (impairment) of investment in unconsolidated entities. |
| | (d) | Total provision for asset impairment included $21,179 related to four retail properties, $49,146 related to four lodging properties, and $177,905 related to eleven non-core properties. On December 31, 2013, we also adjusted the impairment allowance for notes receivable for a gain $5,334. |
| | (e) | Real estate assets includes intangible assets, net of amortization. |
| | (f) | Construction in progress is included as non-segmented assets. |
The following table summarizes net operating income by segment as of and for the year ended December 31, 2012. | | | | | | | | | | | | | | | | | | | | | | Total | | Retail | | Lodging | | Student Housing | | Non - core | Rental income | $ | 343,290 |
| | $ | 226,546 |
| | $ | — |
| | $ | 30,234 |
| | $ | 86,510 |
| Straight line rent adjustment | 4,357 |
| | 4,824 |
| | — |
| | 169 |
| | (636 | ) | Tenant recovery income | 73,214 |
| | 66,154 |
| | — |
| | 429 |
| | 6,631 |
| Other property income | 5,714 |
| | 2,686 |
| | — |
| | 1,750 |
| | 1,278 |
| Lodging income | 692,448 |
| | — |
| | 692,448 |
| | — |
| | — |
| Total income | $ | 1,119,023 |
| | $ | 300,210 |
| | $ | 692,448 |
| | $ | 32,582 |
| | $ | 93,783 |
| Operating expenses | $ | 605,439 |
| | $ | 95,802 |
| | $ | 480,229 |
| | $ | 12,752 |
| | $ | 16,656 |
| Net operating income | $ | 513,584 |
| | $ | 204,408 |
| | $ | 212,219 |
| | $ | 19,830 |
| | $ | 77,127 |
| Non allocated expenses (a) | $ | (388,459 | ) | | | | | | | | | Other income and expenses (b) | $ | (187,400 | ) | | | | | | | | | Loss from unconsolidated entities (c) | $ | (10,324 | ) | | | | | | | | | Provision for asset impairment (d) | $ | (37,830 | ) | | | | | | | | | Net loss from continuing operations | $ | (110,429 | ) | | | | | | | | | Income from discontinued operations, net | $ | 46,780 |
| | | | | | | | | Net income attributable to noncontrolling interests | $ | (5,689 | ) | | | | | | | | | Net loss attributable to Company | $ | (69,338 | ) | | | | | | | | | Balance Sheet Data: | | | | | | | | | | Real estate assets, net (e) | $ | 9,279,123 |
| | $ | 2,690,365 |
| | $ | 2,687,180 |
| | $ | 374,839 |
| | $ | 3,526,739 |
| Non-segmented assets (f) | 1,480,761 |
| | | | | | | | | Total Assets | $ | 10,759,884 |
| | | | | | | | | Capital expenditures | $ | 88,637 |
| | $ | 14,411 |
| | $ | 60,373 |
| | $ | 162 |
| | $ | 13,691 |
|
| | (a) | Non allocated expenses consist of general and administrative expenses, business manager management fee and depreciation and amortization. |
| | (b) | Other income and expenses consist of interest and dividend income, interest expense, other income, realized gain, (loss) and (impairment) on securities, net, and income tax benefit. |
| | (c) | Loss from unconsolidated entities consists of equity losses in earnings of unconsolidated entities as well as gain, (loss) and (impairment) of investment in unconsolidated entities. |
| | (d) | Total provision for asset impairment included $16,234 related to three retail properties, and $21,596 related to six non-core properties. |
| | (e) | Real estate assets includes intangible assets, net of amortization. |
| | (f) | Construction in progress is included as non-segmented assets. |
The following table summarizes net operating income by segment as of and for the year ended December 31, 2011.
| | | | | | | | | | | | | | | | | | | | | | Total | | Retail | | Lodging | | Student Housing | | Non - core | Rental income | $ | 322,597 |
| | $ | 211,036 |
| | $ | — |
| | $ | 24,706 |
| | $ | 86,855 |
| Straight line rent adjustment | 4,455 |
| | 4,942 |
| | — |
| | 145 |
| | (632 | ) | Tenant recovery income | 66,655 |
| | 60,769 |
| | — |
| | 446 |
| | 5,440 |
| Other property income | 8,838 |
| | 4,665 |
| | — |
| | 1,569 |
| | 2,604 |
| Lodging income | 517,840 |
| | — |
| | 517,840 |
| | — |
| | — |
| Total income | $ | 920,385 |
| | $ | 281,412 |
| | $ | 517,840 |
| | $ | 26,866 |
| | $ | 94,267 |
| Operating expenses | $ | 476,131 |
| | $ | 91,683 |
| | $ | 353,487 |
| | $ | 11,691 |
| | $ | 19,270 |
| Net operating income | $ | 444,254 |
| | $ | 189,729 |
| | $ | 164,353 |
| | $ | 15,175 |
| | $ | 74,997 |
| Non allocated expenses (a) | $ | (382,599 | ) | | | | | | | | | Other income and expenses (b) | $ | (186,068 | ) | | | | | | | | | Loss from unconsolidated entities (c) | $ | (118,825 | ) | |
| | | | | | | Provision for asset impairment (d) | $ | (24,051 | ) | |
| | | | | | | Net loss from continuing operations | $ | (267,289 | ) | | | | | | | | | Loss from discontinued operations, net | $ | (42,256 | ) | | | | | | | | | Net income attributable to noncontrolling interests | $ | (6,708 | ) | | | | | | | | | Net loss attributable to Company | $ | (316,253 | ) | | | | | | | | |
| | (a) | Non allocated expenses consist of general and administrative expenses, business manager management fee and depreciation and amortization. |
| | (b) | Other income and expenses consist of interest and dividend income, interest expense, other income and expenses, realized gain, (loss) and (impairment) on securities, net, and income tax benefit. |
| | (c) | Loss from unconsolidated entities consists of equity (losses) in earnings of unconsolidated entities as well as gain, (loss) and (impairment) of investment in unconsolidated entities. |
| | (d) | Total provision for asset impairment included $19,390 related to five retail properties, $2,886 related to one lodging properties, and $1,775 related to two non-core properties. |
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