Segment Reporting (Notes)

12 Months Ended

Dec. 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 review operating and financial information for each property on an individual basis and therefore, each property represents an individual operating segment. However, we have aggregated our properties into reportable segments as the properties share similar long-term economic characteristics and have other similarities including the fact that they are operated using consistent business strategies.

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):

	Year Ended December 31,
	2015			2014			2013
Total Retail
Property revenue	$	98,795		$	96,140		$	93,449
Property expense	(25,672		)	(25,451		)	(23,900		)
Segment profit	73,123			70,689			69,549
Total Office
Property revenue	97,651			92,474			90,527
Property expense	(28,843		)	(27,003		)	(26,688		)
Segment profit	68,808			65,471			63,839
Total Multifamily
Property revenue	19,455			16,976			16,125
Property expense	(8,334		)	(6,099		)	(5,917		)
Segment profit	11,121			10,877			10,208
Total Mixed-Use
Property revenue	59,722			54,410			54,956
Property expense	(35,157		)	(32,678		)	(33,481		)
Segment profit	24,565			21,732			21,475
Total segments’ profit	$	177,617		$	168,769		$	165,071

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

	Year Ended December 31,
	2015			2014			2013
Total segments' profit	$	177,617		$	168,769		$	165,071
General and administrative	(20,074		)	(18,532		)	(17,195		)
Depreciation and amortization	(63,392		)	(66,568		)	(66,775		)
Interest expense	(47,260		)	(52,965		)	(58,020		)
Gain on sale of real estate	7,121			—			—
Other income (expense), net	(97		)	441			(487		)
Net income	53,915			31,145			22,594
Net income attributable to restricted shares	(168		)	(374		)	(536		)
Net income attributable to unitholders in the Operating Partnership	(15,238		)	(9,015		)	(6,838		)
Net income attributable to American Assets Trust, Inc. stockholders	$	38,509		$	21,756		$	15,220

The following table shows net real estate and secured note payable balances for each of the segments, along with their capital expenditures for each year (in thousands):

	December 31, 2015		December 31, 2014
Net real estate
Retail	$	638,893	$	639,456
Office	796,773		757,854
Multifamily	208,730		182,468
Mixed-Use	190,466		195,622
	$	1,834,862	$	1,775,400
Secured Notes Payable(1)
Retail	$	60,065	$	161,975
Office	292,183		426,254
Multifamily	101,444		101,444
Mixed-Use	130,310		130,310
	$	584,002	$	819,983
Capital Expenditures (2)
Retail	$	7,393	$	8,671
Office	49,049		34,577
Multifamily	81,559		101,392
Mixed-Use	634		5,132
	$	138,635	$	149,772

(1) Excludes unamortized fair market value adjustment of $4.3 million and $7.2 million as of December 31, 2015 and 2014, respectively.

(2) Capital expenditures represent cash paid for capital expenditures during the year and includes leasing commissions paid.