SEGMENT REPORTING

3 Months Ended

Mar. 31, 2021

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,
	2021		2020
Total Office
Property revenue	$	44,464	$	44,509
Property expense	(11,364)		(11,793)
Segment profit	33,100		32,716
Total Retail
Property revenue	21,774		25,826
Property expense	(7,442)		(7,331)
Segment profit	14,332		18,495
Total Multifamily
Property revenue	12,552		12,825
Property expense	(5,491)		(5,510)
Segment profit	7,061		7,315
Total Mixed-Use
Property revenue	5,196		13,583
Property expense	(5,303)		(8,979)
Segment profit	(107)		4,604
Total segments’ profit	$	54,386	$	63,130

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

	Three Months Ended March 31,
	2021		2020
Total segments’ profit	$	54,386	$	63,130
General and administrative	(6,823)		(6,820)
Depreciation and amortization	(27,501)		(27,462)
Interest expense	(14,005)		(13,472)
Early extinguishment of debt	(4,271)		—
Other income (expense), net	(53)		108
Net income	1,733		15,484
Net income attributable to restricted shares	(137)		(104)
Net income attributable to unitholders in the Operating Partnership	(339)		(3,312)
Net income attributable to American Assets Trust, Inc. stockholders	$	1,257	$	12,068

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

	March 31, 2021		December 31, 2020
Net Real Estate
Office	$	1,314,179	$	1,317,107
Retail	603,522		607,918
Multifamily	387,106		389,804
Mixed-Use	176,510		177,905
	$	2,481,317	$	2,492,734
Secured Notes Payable (1)
Office	$	111,000	$	111,000
	$	111,000	$	111,000

(1)Excludes debt issuance costs of $0.1 million and $0.1 million for each of the periods ended March 31, 2021 and December 31, 2020, respectively.

Capital expenditures for each segment for the three months ended March 31, 2021 and 2020 were as follows (in thousands):

	Three Months Ended March 31,
	2021		2020
Capital Expenditures (1)
Office	$	9,527	$	18,200
Retail	1,722		3,558
Multifamily	963		1,284
Mixed-Use	4		883
	$	12,216	$	23,925

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