SEGMENT REPORTING

3 Months Ended

Mar. 31, 2015

Segment Reporting [Abstract]

SEGMENT REPORTING

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 March 31,
	2015			2014
Total Retail
Property revenue	$	24,038		$	22,999
Property expense	(6,000		)	(6,058		)
Segment profit	18,038			16,941
Total Office
Property revenue	23,577			22,858
Property expense	(6,821		)	(6,893		)
Segment profit	16,756			15,965
Total Multifamily
Property revenue	4,310			4,130
Property expense	(1,484		)	(1,427		)
Segment profit	2,826			2,703
Total Mixed-Use
Property revenue	14,110			13,993
Property expense	(8,363		)	(8,268		)
Segment profit	5,747			5,725
Total segments’ profit	$	43,367		$	41,334

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

	Three Months Ended March 31,
	2015			2014
Total segments’ profit	$	43,367		$	41,334
General and administrative	(5,016		)	(4,612		)
Depreciation and amortization	(15,107		)	(16,341		)
Interest expense	(11,795		)	(13,632		)
Other income (expense), net	(70		)	(91		)
Net income	11,379			6,658
Net income attributable to restricted shares	(43		)	(70		)
Net income attributable to unitholders in the Operating Partnership	(3,309		)	(1,986		)
Net income attributable to American Assets Trust, Inc. stockholders	$	8,027		$	4,602

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

	March 31, 2015		December 31, 2014
Net Real Estate
Retail	$	634,758	$	639,456
Office	767,271		757,854
Multifamily	210,569		182,468
Mixed-Use	194,281		195,622
	$	1,806,879	$	1,775,400
Secured Notes Payable(1)
Retail	$	60,518	$	161,975
Office	425,981		426,254
Multifamily	101,444		101,444
Mixed-Use	130,310		130,310
	$	718,253	$	819,983

(1) Excludes unamortized fair market value adjustments of $6.4 million and $7.2 million as of March 31, 2015 and December 31, 2014, respectively.

Capital expenditures for each segment for the three months ended March 31, 2015 and 2014 were as follows (in thousands):

	Three Months Ended March 31,
	2015		2014
Capital Expenditures (1)
Retail	$	935	$	1,506
Office	14,714		7,091
Multifamily	28,948		21,877
Mixed-Use	371		822
	$	44,968	$	31,296

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