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,
	2018			2017			2016
Total Retail
Property revenue	$	105,552		$	103,968		$	100,982
Property expense	(30,078		)	(28,524		)	(27,934		)
Segment profit	75,474			75,444			73,048
Total Office
Property revenue	112,362			105,694			103,254
Property expense	(33,860		)	(33,120		)	(31,839		)
Segment profit	78,502			72,574			71,415
Total Multifamily
Property revenue	50,627			43,533			29,188
Property expense	(20,441		)	(17,898		)	(12,498		)
Segment profit	30,186			25,635			16,690
Total Mixed-Use
Property revenue	62,326			61,788			61,664
Property expense	(37,076		)	(37,135		)	(35,660		)
Segment profit	25,250			24,653			26,004
Total segments’ profit	$	209,412		$	198,306		$	187,157

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



	Year Ended December 31,
	2018			2017			2016
Total segments' profit	$	209,412		$	198,306		$	187,157
General and administrative	(22,784		)	(21,382		)	(17,897		)
Depreciation and amortization	(107,093		)	(83,278		)	(71,319		)
Interest expense	(52,248		)	(53,848		)	(51,936		)
Other income (expense), net	(85		)	334			(368		)
Net income	27,202			40,132			45,637
Net income attributable to restricted shares	(311		)	(241		)	(189		)
Net income attributable to unitholders in the Operating Partnership	(7,205		)	(10,814		)	(12,863		)
Net income attributable to American Assets Trust, Inc. stockholders	$	19,686		$	29,077		$	32,585

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, 2018		December 31, 2017
Net real estate
Retail	$	628,734	$	658,654
Office	822,574		813,121
Multifamily	412,042		424,044
Mixed-Use	176,503		180,888
	$	2,039,853	$	2,076,707
Secured Notes Payable ⁽¹⁾
Retail	$	35,008	$	35,737
Office	147,757		170,408
Multifamily	—		73,744
Mixed-Use	—		—
	$	182,765	$	279,889
Capital Expenditures ⁽²⁾
Retail	$	14,219	$	10,412
Office	45,192		35,023
Multifamily	3,659		6,318
Mixed-Use	1,277		670
	$	64,347	$	52,423


(1)	Excludes unamortized debt issuance costs of $0.2 million and $0.3 million as of December 31, 2018 and 2017, respectively.


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