SEGMENT REPORTING

3 Months Ended

Mar. 31, 2022

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,
	2022		2021
Total Office
Property revenue	$	49,569	$	44,464
Property expense	(13,330)		(11,364)
Segment profit	36,239		33,100
Total Retail
Property revenue	24,841		21,774
Property expense	(7,728)		(7,442)
Segment profit	17,113		14,332
Total Multifamily
Property revenue	13,889		12,552
Property expense	(6,079)		(5,491)
Segment profit	7,810		7,061
Total Mixed-Use
Property revenue	13,171		5,196
Property expense	(8,437)		(5,303)
Segment profit	4,734		(107)
Total segments’ profit	$	65,896	$	54,386

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

	Three Months Ended March 31,
	2022		2021
Total segments’ profit	$	65,896	$	54,386
General and administrative	(7,142)		(6,823)
Depreciation and amortization	(30,412)		(27,501)
Interest expense	(14,666)		(14,005)
Loss on early extinguishment of debt	—		(4,271)
Other income (expense), net	(162)		(53)
Net income	13,514		1,733
Net income attributable to restricted shares	(155)		(137)
Net income attributable to unitholders in the Operating Partnership	(2,836)		(339)
Net income attributable to American Assets Trust, Inc. stockholders	$	10,523	$	1,257

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

	March 31, 2022		December 31, 2021
Net Real Estate
Office	$	1,590,488	$	1,536,212
Retail	590,113		591,107
Multifamily	378,887		381,315
Mixed-Use	171,969		173,347
	$	2,731,457	$	2,681,981
Secured Notes Payable (1)
Office	$	111,000	$	111,000
	$	111,000	$	111,000

(1)Excludes debt issuance costs of $0.02 million and $0.04 million for each of the periods ended March 31, 2022 and December 31, 2021, respectively.

Capital expenditures for each segment for the three months ended March 31, 2022 and 2021 were as follows (in thousands):

	Three Months Ended March 31,
	2022		2021
Capital Expenditures (1)
Office	$	26,666	$	9,527
Retail	3,560		1,722
Multifamily	1,571		963
Mixed-Use	331		4
	$	32,128	$	12,216

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