Segment Reporting

6 Months Ended

Jun. 30, 2012

Segment Reporting [Abstract]

Segment Reporting

NOTE 15. SEGMENT REPORTING

Segment information is prepared on the same basis that our management reviews information for operational decision-making purposes. We operate in four business segments: the acquisition, redevelopment, ownership and management of retail real estate, office real estate, multifamily real estate and mixed-use real estate. The products for our retail segment primarily include rental of retail space and other tenant services, including tenant reimbursements, parking and storage space rental. The products for our office segment primarily include rental of office space and other tenant services, including tenant reimbursements, parking and storage space rental. The products for our multifamily segment include rental of apartments and other tenant services. The products of our mixed-use segment include rental of retail space and other tenant services, including tenant reimbursements, parking and storage space rental and operation of a 369-room all-suite hotel.

We evaluate the performance of our segments based on segment profit, which is defined as property revenue less property expenses. We do not use asset information as a measure to assess performance and make decisions to allocate resources. Therefore, depreciation and amortization expense is not allocated among segments. General and administrative expenses, interest expense, depreciation and amortization expense and other income and expense are not included in segment profit as our internal reporting addresses these items on a corporate level.

Segment profit is not a measure of operating income or cash flows from operating activities as measured by GAAP, and it is not indicative of cash available to fund cash needs and should not be considered an alternative to cash flows as a measure of liquidity. Not all companies calculate segment profit in the same manner. We consider segment profit to be an appropriate supplemental measure to net income because it assists both investors and management in understanding the core operations of our properties.

The following table represents operating activity within our reportable segments (in thousands):

	Three Months Ended June 30,						Six Months Ended June 30,
	2012			2011			2012			2011
Total Retail
Property revenue	$	22,452		$	22,077		$	44,143		$	43,429
Property expense		(6,094	)		(6,007	)		(11,820	)		(11,452	)
Segment profit		16,358			16,070			32,323			31,977
Total Office
Property revenue		19,705			14,169			39,181			27,432
Property expense		(6,505	)		(5,110	)		(12,651	)		(8,820	)
Segment profit		13,200			9,059			26,530			18,612
Total Multifamily
Property revenue		3,509			3,492			7,051			6,785
Property expense		(1,565	)		(1,426	)		(2,879	)		(2,587	)
Segment profit		1,944			2,066			4,172			4,198
Total Mixed-Use
Property revenue		12,143			11,362			24,472			20,337
Property expense		(7,732	)		(7,231	)		(15,233	)		(13,084	)
Segment profit		4,411			4,131			9,239			7,253
Total segments’ profit	$	35,913		$	31,326		$	72,264		$	62,040

The following table is a reconciliation of segment profit to net income attributable to stockholders (in thousands):

	Three Months Ended June 30,						Six Months Ended June 30,
	2012			2011			2012			2011
Total segments’ profit	$	35,913		$	31,326		$	72,264		$	62,040
General and administrative		(3,992	)		(3,866	)		(7,757	)		(7,052	)
Depreciation and amortization		(14,671	)		(13,934	)		(29,924	)		(26,089	)
Interest expense		(14,476	)		(14,063	)		(28,832	)		(27,054	)
Early extinguishment of debt		—			—			—			(25,867	)
Loan transfer and consent fees		—			—			—			(9,019	)
Gain on acquisition		—			—			—			46,371
Other income (expense), net		(150	)		530			(256	)		(71	)
Income (loss) from continuing operations		2,624			(7	)		5,495			13,259
Discontinued operations
Results from discontinued operations		—			462			—			792
Net income		2,624			455			5,495			14,051
Net income attributable to restricted shares		(131	)		(132	)		(263	)		(218	)
Net loss attributable to Predecessor’s noncontrolling interests in consolidated real estate entities		—			—			—			2,458
Net income attributable to Predecessor’s controlled owners’ equity		—			—			—			(16,995	)
Net (income) loss attributable to unitholders in the Operating Partnership		(804	)		(104	)		(1,687	)		225
Net income (loss) attributable to American Assets Trust, Inc. stockholders	$	1,689		$	219		$	3,545		$	(479	)

The following table shows net real estate and secured note payable balances for each of the segments (in thousands):

	June 30, 2012		December 31, 2011
Net Real Estate
Retail	$	655,587	$	655,450
Office		580,634		551,955
Multifamily		36,947		37,187
Mixed-Use		205,563		208,089
	$	1,478,731	$	1,452,681
Secured Notes Payable (1)
Retail	$	399,044	$	400,320
Office		348,193		327,331
Multifamily		101,444		101,444
Mixed-Use		130,310		130,310
	$	978,991	$	959,405

(1) Excludes unamortized fair market value adjustments of $(14.5) million and $(15.9) million as of June 30, 2012 and December 31, 2011, respectively.

Capital expenditures for each segment for the three and six months ended June 30, 2012 and 2011 were as follows (in thousands):

	Three Months Ended June 30,				Six Months Ended June 30,
	2012		2011		2012		2011
Capital Expenditures (1)
Retail	$	4,012	$	495	$	7,442	$	947
Office		2,633		1,645		5,356		2,112
Multifamily		285		83		523		137
Mixed-Use		68		35		145		130
	$	6,998	$	2,258	$	13,466	$	3,326

(1) Capital expenditures represent cash paid for capital expenditures during the period and include leasing commissions paid.