REPORTABLE SEGMENTS

The Company has five reportable segments: Office, Retail, Land, CPS Third Party Management and Leasing, and Other. These reportable segments represent an aggregation of operating segments reported to the Chief Operating Decision Maker based on similar economic characteristics that include the type of product and the nature of service. Each segment includes both consolidated operations and joint ventures. The Office and Retail segments show the results for that product type. For these two segments, net operating income is calculated as rental property revenues less rental property operating expenses. The Land segment includes results of operations for certain land holdings and single-family residential communities that are sold as developed lots to homebuilders. Fee income and related expenses for the third party-owned properties which are managed or leased by the Company's CPS subsidiary are included in the CPS Third Party Management and Leasing segment. In prior years, the Company had an additional segment, the For-Sale Multi-Family Residential Unit segment, which included results of operations for the development and sale of multi-family real estate projects. The Company has sold substantially all of its multi-family residential units, and this line of business is no longer considered to be a separate reporting segment. The 2011 results for this segment are included in Other. The Other segment also includes:


•	fee income for third party owned and joint venture properties, other than those managed by CPS, for which the Company performs management, development and leasing services;


•	compensation for corporate employees, other than those in the CPS Third Party Management and Leasing segment;


•	general corporate overhead costs, interest expense for consolidated entities (as financing decisions are made at the corporate level, with the exception of joint venture interest expense, which is included in joint venture results in the respective segment);


•	income attributable to noncontrolling interests;


•	income taxes;


•	depreciation;


•	preferred dividends; and


•	operations of the Industrial properties, which were sold in 2011.

Company management evaluates the performance of its reportable segments in part based on funds from operations available to common stockholders (“FFO”). FFO is a supplemental operating performance measure used in the real estate industry. The Company calculated FFO using the National Association of Real Estate Investment Trusts' (“NAREIT”) definition of FFO, which is net income (loss) available to common stockholders (computed in accordance with GAAP), excluding extraordinary items, cumulative effect of change in accounting principle and gains or losses on sale of or impairment losses on depreciable property, plus depreciation and amortization of real estate assets, and after adjustments for unconsolidated partnerships and joint ventures to reflect FFO on the same basis.

FFO is used by industry analysts, investors and the Company as a supplemental measure of a REIT's operating performance. Historical cost accounting for real estate assets implicitly assumes that the value of real estate assets diminishes predictably over time. Since real estate values instead have historically risen or fallen with market conditions, many industry investors and analysts have considered presentation of operating results for real estate companies that use historical cost accounting to be insufficient by themselves. Thus, NAREIT created FFO as a supplemental measure of a REIT's operating performance that excludes historical cost depreciation, among other items, from GAAP net income. Management believes the use of FFO, combined with the required primary GAAP presentations, has been fundamentally beneficial, improving the understanding of operating results of REITs among the investing public and making comparisons of REIT operating results more meaningful. Company management evaluates operating performance in part based on FFO. Additionally, the Company uses FFO, along with other measures, as a performance measure for incentive compensation to its officers and other key employees.

Segment net income, the balance of the Company's investment in joint ventures and the amount of capital expenditures are not presented in the following tables. Management does not utilize these measures when analyzing its segments or when making resource allocation decisions, and therefore this information is not provided. FFO is reconciled to net income (loss) on a total Company basis (in thousands):



Three Months Ended June 30, 2012	Office		Retail		Land			CPS Third Party Management and Leasing			Other			Total
Net operating property income, including discontinued operations	$	16,741	$	4,749	$	—		$	—		$	—		$	21,490
Fee income, net of reimbursed expenses	—		—		—			3,676			1,429			5,105
Residential lot and other sales, net of cost of sales	—		—		89			—			—			89
Other income	—		13		—			—			253			266
Third party management and leasing expenses	—		—		—			(2,254		)	—			(2,254		)
General and administrative expenses	—		—		—			—			(5,645		)	(5,645		)
Interest expense	—		—		—			—			(5,875		)	(5,875		)
Depreciation and amortization of non-real estate assets	—		—		—			—			(223		)	(223		)
Separation expenses	—		—		—			—			(79		)	(79		)
Other expenses	—		—		—			—			(579		)	(579		)
Funds from operations from unconsolidated joint ventures	2,709		2,176		(135		)	—			(2		)	4,748
Funds from operations attributable to noncontrolling interests	—		—		—			—			(631		)	(631		)
Provision for income taxes from operations	—		—		—			—			(33		)	(33		)
Preferred stock dividends	—		—		—			—			(3,227		)	(3,227		)
Funds from operations available to common stockholders	$	19,450	$	6,938	$	(46	)	$	1,422		$	(14,612	)	$	13,152

Real estate depreciation and amortization, including Company's share of joint ventures														(15,022		)
Gain on sale of depreciable investment properties														8,271
Net income available to common stockholders														$	6,401



Three Months Ended June 30, 2011	Office		Retail		Land		CPS Third Party Management and Leasing			Other			Total
Net operating property income, including discontinued operations	$	15,458	$	4,847	$	—	$	—		$	911		$	21,216
Fee income, net of reimbursed expenses	—		—		56		2,396			2,008			4,460
Residential lot and other sales, net of cost of sales	—		—		4		—			—			4
Other income	447		10		—		—			194			651
Third party management and leasing expenses	—		—		—		(1,871		)	—			(1,871		)
General and administrative expenses	—		—		—		—			(6,133		)	(6,133		)
Interest expense	—		—		—		—			(7,358		)	(7,358		)
Depreciation and amortization of non-real estate assets	—		—		—		—			(372		)	(372		)
Separation expenses	—		—		—		—			(77		)	(77		)
Other expenses	—		—		—		—			(659		)	(659		)
Funds from operations from unconsolidated joint ventures	2,685		2,125		127		—			33			4,970
Funds from operations attributable to noncontrolling interests	—		—		—		—			(681		)	(681		)
Provision for income taxes from operations	—		—		—		—			(27		)	(27		)
Preferred stock dividends	—		—		—		—			(3,227		)	(3,227		)
Funds from operations available to common stockholders	$	18,590	$	6,982	$	187	$	525		$	(15,388	)	$	10,896

Real estate depreciation and amortization, including Company's share of joint ventures													(15,661		)
Gain on sale of depreciable investment properties													59
Net loss available to common stockholders													$	(4,706	)



Six Months Ended June 30, 2012	Office		Retail		Land			CPS Third Party Management and Leasing			Other			Total
Net operating income, including discontinued operations	$	33,676	$	10,797	$	—		$	—		$	1		$	44,474
Fee income, net of reimbursed expenses	—		—		—			6,086			2,909			8,995
Residential lot and other sales, net of cost of sales	—		—		474			—			—			474
Other income	—		205		—			—			1,526			1,731
Third party management and leasing expenses	—		—		—			(4,253		)	—			(4,253		)
General and administrative expenses	—		—		—			—			(12,268		)	(12,268		)
Interest expense	—		—		—			—			(12,143		)	(12,143		)
Loss on extinguishment of debt	—		—		—			—			(94		)	(94		)
Depreciation and amortization of non-real estate assets	—		—		—			—			(587		)	(587		)
Separation expenses	—		—		—			—			(292		)	(292		)
Other expenses	—		—		—			—			(1,273		)	(1,273		)
Funds from operations from unconsolidated joint ventures	5,709		4,286		(397		)	—			(3		)	9,595
Funds from operations attributable to noncontrolling interests	—		—		—			—			(1,205		)	(1,205		)
Provision for income taxes from operations	—		—		—			—			(60		)	(60		)
Preferred stock dividends	$	—	$	—	$	—		$	—		$	(6,454	)	$	(6,454	)
Funds from operations available to common stockholders	$	39,385	$	15,288	$	77		$	1,833		$	(29,943	)	$	26,640

Real estate depreciation and amortization, including Company's share of joint ventures														(31,575		)
Impairment loss on depreciable investment property														(12,233		)
Noncontrolling interest related to gain on sale of depreciated investment properties														2,043
Gain on sale of depreciated investment properties														8,414
Net loss available to common stockholders														$	(6,711	)



Six Months Ended June 30, 2011	Office		Retail		Land		CPS Third Party Management and Leasing			Other			Total
Net operating property income, including discontinued operations	$	30,709	$	10,582	$	—	$	—		$	1,961		$	43,252
Fee income, net of reimbursed expenses	—		—		91		4,236			3,846			8,173
Residential lot and other sales, net of cost of sales	—		50		50		—			—			100
Other income	818		34		—		—			4,969			5,821
Third party management and leasing expenses	—		—		—		(3,716		)	—			(3,716		)
General and administrative expenses	—		—		—		—			(13,533		)	(13,533		)
Interest expense	—		—		—		—			(14,902		)	(14,902		)
Impairment loss	—		—		—		—			(3,508		)	(3,508		)
Depreciation and amortization of non-real estate assets	—		—		—		—			(935		)	(935		)
Separation expenses	—		—		—		—			(178		)	(178		)
Other expenses	—		—		—		—			(4,021		)	(4,021		)
Funds from operations from unconsolidated joint ventures	5,449		4,366		279		—			50			10,144
Funds from operations attributable to noncontrolling interests	—		—		—		—			(1,262		)	(1,262		)
Benefit for income taxes from operations	—		—		—		—			37			37
Preferred stock dividends	—		—		—		—			(6,454		)	(6,454		)
Funds from operations available to common stockholders	$	36,976	$	15,032	$	420	$	520		$	(33,930	)	$	19,018

Real estate depreciation and amortization, including Company's share of joint ventures													(31,315		)
Loss on sale of depreciable investment properties, net of gains													(266		)
Net loss available to common stockholders													$	(12,563	)

When reviewing the results of operations for the Company, management analyzes the following revenue and income items net of their related costs:

•Rental property operations, including discontinued;

•Reimbursements of third-party and joint venture personnel costs;

•Residential lots, tracts and outparcel sales;

•Multi-family unit sales; and

•Gains or losses on sales of investment properties.

These amounts are shown in the segment tables above in the same “net” manner as shown to management. Certain adjustments are required to reconcile the above segment information to the Company's consolidated revenues, including adjusting for gains on sales of investment properties, as these gains are not presented within revenues in the Statements of Operations. The following table reconciles information presented in the tables above to the Company's consolidated revenues (in thousands):



	Three Months Ended June 30,						Six Months Ended June 30,
	2012			2011			2012			2011
Net operating property income, including discontinued operations	$	21,490		$	21,216		$	44,474		$	43,252
Plus rental property operating expenses	14,661			13,072			28,276			24,971
Fee income	5,105			4,460			8,995			8,173
Third party management and leasing expense reimbursements	2,353			2,209			4,654			4,457
Reimbursed expenses	1,357			1,371			2,733			2,883
Residential lot sales, net of cost of sales, including gain on sale of undepreciated investment properties	89			4			474			100
Plus residential lot cost of sales	416			76			980			145
Plus loss on sale of undepreciated investment properties	30			—			30			—
Net operating income from discontinued operations not included in revenues	(541		)	(3,021		)	(1,950		)	(6,518		)
Other income	266			651			1,731			5,821
Other income - discontinued operations	$	(13	)	$	(89	)	$	(13	)	$	(114	)
Total consolidated revenues	$	45,213		$	39,949		$	90,384		$	83,170