REPORTABLE SEGMENTS

The Company has four reportable segments: Office, Retail, Land 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, where applicable. The Office and Retail segments show the results for that product type. The Land segment includes results of operations for residential and commercial land holdings. The Other segment includes:


•	fee income and related expenses for third party owned properties and joint venture properties for which the Company performs management, development and leasing services;


•	compensation for corporate employees;


•	general corporate overhead costs;


•	interest expense for consolidated and unconsolidated entities;


•	income attributable to noncontrolling interests;


•	income taxes;


•	depreciation; and


•	preferred dividends.

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 on sale 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, to assess performance in connection with evaluating and granting 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 available to common stockholders on a total Company basis (in thousands):



Three Months Ended June 30, 2015	Office		Retail		Land			Other			Total
Net operating income	$	59,269	$	—	$	—		$	1,505		$	60,774
Sales less costs of sales	—		—		(324		)	—			(324		)
Fee income	—		—		—			1,704			1,704
Other income	—		—		—			238			238
General and administrative expenses	—		—		—			(5,942		)	(5,942		)
Reimbursed expenses	—		—		—			(717		)	(717		)
Interest expense	—		—		—			(9,696		)	(9,696		)
Other expenses	—		—		—			(799		)	(799		)
Funds from operations available to common stockholders	$	59,269	$	—	$	(324	)	$	(13,707	)	45,238
Real estate depreciation and amortization, including Company's share of joint ventures											(37,277		)
Loss on sale of depreciated investment properties, including Company's share of joint ventures											(10		)
Net income available to common stockholders											$	7,951



Three Months Ended June 30, 2014	Office		Retail		Land		Other			Total
Net operating income	$	48,821	$	1,288	$	—	$	1,179		$	51,288
Sales less costs of sales	—		—		1,331		42			1,373
Fee income	—		—		—		2,025			2,025
Other income	—		—		—		2,256			2,256
General and administrative expenses	—		—		—		(5,756		)	(5,756		)
Reimbursed expenses	—		—		—		(988		)	(988		)
Interest expense	—		—		—		(8,813		)	(8,813		)
Other expenses	—		—		—		(893		)	(893		)
Preferred stock dividends and original issuance costs	—		—		—		(4,708		)	(4,708		)
Funds from operations available to common stockholders	$	48,821	$	1,288	$	1,331	$	(15,656	)	35,784
Real estate depreciation and amortization, including Company's share of joint ventures										(38,022		)
Gain on sale of depreciated investment properties including the Company's share of joint ventures										15
Net loss available to common stockholders										$	(2,223	)



Six Months Ended June 30, 2015	Office		Retail		Land		Other			Total
Net operating income	$	116,003	$	—	$	—	$	2,824		$	118,827
Sales less costs of sales	—		—		486		—			486
Fee income	—		—		—		3,520			3,520
Other income	—		—		—		645			645
Separation expenses	—		—		—		(102		)	(102		)
General and administrative expenses	—		—		—		(9,435		)	(9,435		)
Reimbursed expenses	—		—		—		(1,828		)	(1,828		)
Interest expense	—		—		—		(19,194		)	(19,194		)
Other expenses	—		—		—		(1,746		)	(1,746		)
Funds from operations available to common stockholders	$	116,003	$	—	$	486	$	(25,316	)	91,173
Real estate depreciation and amortization, including Company's share of joint ventures										(75,743		)
Loss on sale of depreciated investment properties, including Company's share of joint ventures										(275		)
Net income available to common stockholders										$	15,155



Six Months Ended June 30, 2014	Office		Retail		Land		Other			Total
Net operating income	$	96,419	$	2,591	$	—	$	2,296		$	101,306
Sales less costs of sales	—		—		1,491		42			1,533
Fee income	—		—		—		4,363			4,363
Other income	—		—		—		4,172			4,172
Separation expenses	—		—		—		(84		)	(84		)
General and administrative expenses	—		—		—		(11,367		)	(11,367		)
Reimbursed expenses	—		—		—		(1,920		)	(1,920		)
Interest expense	—		—		—		(17,825		)	(17,825		)
Other expenses	—		—		—		(1,727		)	(1,727		)
Preferred stock dividends and original issuance costs	—		—		—		(6,485		)	(6,485		)
Funds from operations available to common stockholders	$	96,419	$	2,591	$	1,491	$	(28,535	)	71,966
Real estate depreciation and amortization, including Company's share of joint ventures										(74,974		)
Gain on sale of depreciated investment properties, including Company's share of joint ventures										5,987
Net income available to common stockholders										$	2,979

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;


•	Land sales; and


•	Gains on sales of investment properties.

These amounts are shown in the segment tables above in the same “net” manner as shown to management. In addition, management reviews the operations of discontinued operations and its share of the operations of its joint ventures in the same manner as the operations of its wholly-owned properties included in the continuing operations. Therefore, the information in the tables above includes the operations of discontinued operations and its share of joint ventures in the same categories as the operations of the properties included in continuing operations. Certain adjustments are required to reconcile the above segment information to the Company’s consolidated revenues. 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,
	2015			2014			2015			2014
Net operating income	$	60,774		$	51,288		$	118,827		$	101,306
Sales less cost of sales	(324		)	1,373			486			1,533
Fee income	1,704			2,025			3,520			4,363
Other income	238			2,256			645			4,172
Rental property operating expenses	41,387			35,959			79,340			70,816
Cost of sales	—			270			—			270
Net operating income in joint ventures	(5,984		)	(6,648		)	(11,971		)	(13,147		)
Sales less cost of sales in joint ventures	(242		)	(47		)	(242		)	(47		)
Net operating income in discontinued operations	—			(565		)	14			(1,457		)
Other income in discontinued operations and in joint ventures	(188		)	(82		)	(348		)	(89		)
Termination fees in discontinued operations and in joint ventures	(28		)	—			(148		)	—
(Gain) loss on land sales (included in gain on investment properties)	566			(1,324		)	(244		)	(1,492		)
Total consolidated revenues	$	97,903		$	84,505		$	189,879		$	166,228