SEGMENTS

The Company has three business segments which offer different products and services. HHC's three segments are managed separately because each requires different operating strategies or management expertise and are reflective of management’s operating philosophies and methods. As further discussed in Item 2, one common operating measure used to assess operating results for HHC's business segments is earnings before taxes ("EBT"). HHC's segments or assets within such segments could change in the future as development of certain properties commences or other operational or management changes occur. The Company does not distinguish or group the combined operations on a geographic basis. Furthermore, all operations are within the United States. The Company's reportable segments are as follows:


•	MPC – consists of the development and sale of land in large‑scale, long‑term community development projects in and around Las Vegas, Nevada; Houston, Texas; and Columbia, Maryland.


•	Operating Assets – consists of retail, office, hospitality and multi-family properties along with other real estate investments. These assets are currently generating revenues and are comprised of commercial real estate properties recently developed or acquired, and properties with an opportunity to redevelop, reposition or sell to improve segment performance or to recycle capital.


•	Strategic Developments – consists of residential condominium and commercial property projects currently under development and all other properties held for development which have no substantial operations.

Effective January 1, 2017, the Company moved the Seaport District assets under construction and related activities from Operating Assets to Strategic Developments. The Seaport District operating properties and related operating results remain presented within Operating Assets.

Segment operating results are as follows:



	Three Months Ended September 30,
	2018			2017			2018			2017			2018			2017			2018			2017
(In thousands)	Operating						MPC						Strategic						Consolidated
Total revenues	$	101,000		$	79,533		$	143,135		$	64,929		$	13,025		$	114,274		$	257,160		$	258,736
Total operating expenses	59,779			41,837			70,237			37,223			19,302			91,080			149,318			170,140
Segment operating income (loss)	41,221			37,696			72,898			27,706			(6,277		)	23,194			107,842			88,596
Depreciation and amortization	(28,329		)	(33,885		)	(79		)	(76		)	(472		)	(18		)	(28,880		)	(33,979		)
Interest (expense) income, net	(18,891		)	(15,940		)	6,626			6,355			4,319			6,983			(7,946		)	(2,602		)
Other (loss) income, net	(2,887		)	(249		)	18			—			(450		)	122			(3,319		)	(127		)
Equity in earnings (loss) from real estate and other affiliates	(529		)	317			9,454			6,480			(316		)	670			8,609			7,467
Gains on sales of properties	—			—			—			—			—			237			—			237
Segment EBT	$	(9,415	)	$	(12,061	)	$	88,917		$	40,465		$	(3,196	)	$	31,188		$	76,306		$	59,592

							Corporate expenses and other items												52,459			49,076
							Net income												$	23,847		$	10,516
							Net income attributable to noncontrolling interests												(482		)	(12		)
							Net income attributable to common stockholders												$	23,365		$	10,504



	Nine Months Ended September 30,
	2018			2017			2018			2017			2018			2017			2018			2017
(In thousands)	Operating						MPC						Strategic						Consolidated
Total revenues	$	285,481		$	243,498		$	261,665		$	211,711		$	52,698		$	343,928		$	599,844		$	799,137
Total operating expenses	149,169			123,879			143,608			113,171			70,225			264,524			363,002			501,574
Segment operating income (loss)	136,312			119,619			118,057			98,540			(17,527		)	79,404			236,842			297,563
Depreciation and amortization	(79,190		)	(88,918		)	(245		)	(247		)	(2,650		)	(1,177		)	(82,085		)	(90,342		)
Interest (expense) income, net	(52,886		)	(46,004		)	19,826			17,902			18,260			18,321			(14,800		)	(9,781		)
Other (loss) income, net	(2,723		)	(265		)	18			—			(77		)	137			(2,782		)	(128		)
Equity in earnings from real estate and other affiliates	1,056			3,739			34,682			21,552			3,556			530			39,294			25,821
Gains on sales of properties	—			—			—			—			—			32,452			—			32,452
Segment EBT	$	2,569		$	(11,829	)	$	172,338		$	137,747		$	1,562		$	129,667		$	176,469		$	255,585

							Corporate expenses and other items												156,667			236,290
							Net income												$	19,802		$	19,295
							Net income attributable to noncontrolling interests												(51		)	(12		)
							Net income attributable to common stockholders												$	19,751		$	19,283

We recognized an operating loss of $(17.5) million for the nine months ended September 30, 2018 in Strategic Developments, primarily due to a $13.4 million charge for window repairs at the Waiea condominium tower in Ward Village. This charge represents the Company's estimate of total costs to complete the repairs. While HHC expects to recover these costs in future periods, the Company will not recognize any recovery until the amount can be estimated and is considered probable for financial reporting purposes. For the three and nine months ended September 30, 2018, Condominium rights and unit sales, net of costs, were also meaningfully impacted by the adoption of the New Revenue Standard as of the Adoption Date. The decrease in segment EBT for the nine months ended September 30, 2018 was also driven by non-recurring gains on sales of $32.5 million in 2017 in our Strategic Developments segment.

The assets by segment and the reconciliation of total segment assets to the Total assets in the Condensed Consolidated Balance Sheets are summarized as follows:



	September 30,		December 31,
(In thousands)	2018		2017
Master Planned Communities	$	2,067,403	$	1,999,090
Operating Assets	2,750,923		2,489,177
Strategic Developments	2,188,293		1,511,612
Total segment assets	7,006,619		5,999,879
Corporate and other	290,251		729,185
Total assets	$	7,296,870	$	6,729,064