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,
	2018			2017
Total Retail
Property revenue	$	26,157		$	24,791
Property expense	(6,811		)	(6,691		)
Segment profit	19,346			18,100
Total Office
Property revenue	26,770			25,990
Property expense	(8,013		)	(7,801		)
Segment profit	18,757			18,189
Total Multifamily
Property revenue	12,424			7,891
Property expense	(4,997		)	(3,211		)
Segment profit	7,427			4,680
Total Mixed-Use
Property revenue	15,381			15,120
Property expense	(9,145		)	(9,692		)
Segment profit	6,236			5,428
Total segments’ profit	$	51,766		$	46,397

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



	Three Months Ended March 31,
	2018			2017
Total segments’ profit	$	51,766		$	46,397
General and administrative	(5,567		)	(5,082		)
Depreciation and amortization	(33,279		)	(17,986		)
Interest expense	(13,820		)	(13,331		)
Other income, net	209			310
Net (loss) income	(691		)	10,308
Net loss (income) attributable to restricted shares	72			(60		)
Net loss (income) attributable to unitholders in the Operating Partnership	166			(2,861		)
Net (loss) income attributable to American Assets Trust, Inc. stockholders	$	(453	)	$	7,387

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



	March 31, 2018		December 31, 2017
Net Real Estate
Retail	$	644,573	$	658,654
Office	809,621		813,121
Multifamily	421,101		424,044
Mixed-Use	179,687		180,888
	$	2,054,982	$	2,076,707
Secured Notes Payable ⁽¹⁾
Retail	$	35,552	$	35,737
Office	170,221		170,408
Multifamily	—		73,744
Mixed-Use	—		—
	$	205,773	$	279,889


(1)	Excludes debt issuance costs of $0.3 million for each of the periods ending March 31, 2018 and December 31, 2017, respectively.

Capital expenditures for each segment for the three months ended March 31, 2018 and 2017 were as follows (in thousands):



	Three Months Ended March 31,
	2018		2017
Capital Expenditures ⁽¹⁾
Retail	$	2,229	$	1,246
Office	7,373		6,360
Multifamily	1,609		459
Mixed-Use	154		90
	$	11,365	$	8,155


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