Reportable Segments

9 Months Ended

Sep. 30, 2016

Segment Reporting [Abstract]

REPORTABLE SEGMENTS

REPORTABLE SEGMENTS

The Company's segments are based on the Company's method of internal reporting which classifies operations by property type and geographical area. The segments by property type are: Office, Mixed Use, and Other. The segments by geographical region are: Houston, Atlanta, Austin, Charlotte, 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 property and the geographical location. Prior period information has been revised to reflect the change in segment reporting as described in the Annual Report on Form 10-K for the year ended December 31, 2015. Each segment includes both consolidated operations and the Company's share of joint venture operations.

Company management evaluates the performance of its reportable segments in part based on net operating income (“NOI”). NOI represents rental property revenues less rental property operating expenses. NOI is not a measure of cash flows or operating results as measured by GAAP, 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. All companies may not calculate NOI in the same manner. The Company considers NOI to be an appropriate supplemental measure to net income as it helps both management and investors understand the core operations of the Company's operating assets. NOI excludes corporate general and administrative expenses, interest expense, depreciation and amortization, impairments, gains/loss on sales of real estate, and other non-operating items.

Segment net income, amount of capital expenditures, and total assets are not presented in the following tables because management does not utilize these measures when analyzing its segments or when making resource allocation decisions. In the third quarter of 2016, the Company revised its disclosure to add the previously omitted revenues by segment for all periods presented. Information on the Company's segments along with a reconciliation of NOI to net income available to common stockholders is as follows (in thousands):

Three Months Ended September 30, 2016	Office			Mixed-Use		Other			Total
Net Operating Income:
Houston	$	26,408		$	—	$	—		$	26,408
Atlanta	22,593			1,753		—			24,346
Austin	6,023			—		—			6,023
Charlotte	4,905			—		—			4,905
Other	(56		)	—		(5		)	(61		)
Total Net Operating Income	$	59,873		$	1,753	$	(5	)	$	61,621

Three Months Ended September 30, 2015	Office		Mixed-Use		Other			Total
Net Operating Income:
Houston	$	26,039	$	—	$	—		$	26,039
Atlanta	21,255		1,492		—			22,747
Austin	4,424		—		—			4,424
Charlotte	4,072		—		—			4,072
Other	3,539		—		(5		)	3,534
Total Net Operating Income	$	59,329	$	1,492	$	(5	)	$	60,816

Nine Months Ended September 30, 2016	Office			Mixed-Use		Other			Total
Net Operating Income:
Houston	$	76,851		$	—	$	—		$	76,851
Atlanta	66,763			5,101		—			71,864
Austin	16,978			—		—			16,978
Charlotte	14,485			—		—			14,485
Other	(35		)	—		(1		)	(36		)
Total Net Operating Income	$	175,042		$	5,101	$	(1	)	$	180,142

Nine Months Ended September 30, 2015	Office		Mixed-Use		Other			Total
Net Operating Income:
Houston	$	76,549	$	—	$	—		$	76,549
Atlanta	64,725		4,343		—			69,068
Austin	10,524		—		—			10,524
Charlotte	12,026		—		—			12,026
Other	11,508		—		(32		)	11,476
Total Net Operating Income	$	175,332	$	4,343	$	(32	)	$	179,643

The following reconciles Net Operating Income to Net Income for each of the periods presented (in thousands):

	Three Months Ended September 30,						Nine Months Ended September 30,
	2016			2015			2016			2015
Net Operating Income	$	61,621		$	60,816		$	180,142		$	179,643
Net operating income from unconsolidated joint ventures	(6,760		)	(6,131		)	(20,361		)	(18,103		)
Net operating loss from discontinued operations	—			—			—			14
Fee income	1,945			1,686			5,968			5,206
Other income	153			444			858			593
Reimbursed expenses	(795		)	(686		)	(2,463		)	(2,514		)
General and administrative expenses	(4,368		)	(2,976		)	(17,301		)	(12,405		)
Interest expense	(7,710		)	(7,673		)	(22,457		)	(23,219		)
Depreciation and amortization	(31,843		)	(32,538		)	(96,192		)	(103,564		)
Acquisition and merger costs	(1,940		)	(19		)	(4,383		)	(104		)
Other expenses	(173		)	(170		)	(681		)	(970		)
Income from unconsolidated joint ventures	1,527			3,716			5,144			7,088
Gain on sale of investment properties	—			37,145			13,944			37,674
Income (loss) from discontinued operations	—			6			—			(565		)
Net Income	$	11,657		$	53,620		$	42,218		$	68,774

Revenues by reportable segment, including a reconciliation to total revenues on the condensed consolidated statements of operations for three and nine months ended September 30, 2016 and 2015 are as follows (in thousands):

Three Months Ended September 30, 2016	Office			Mixed-Use			Other		Total
Revenues:
Houston	$	46,046		$	—		$	—	$	46,046
Atlanta	36,693			3,197			—		39,890
Austin	10,469			—			—		10,469
Charlotte	6,799			—			—		6,799
Other	(57		)	—			2,098		2,041
Total segment revenues	99,950			3,197			2,098		105,245
Less Company's share of rental property revenues from unconsolidated joint ventures	(7,329		)	(3,197		)	—		(10,526		)
Total revenues	$	92,621		$	—		$	2,098	$	94,719

Three Months Ended September 30, 2015	Office			Mixed-Use			Other		Total
Revenues:
Houston	$	45,117		$	—		$	—	$	45,117
Atlanta	40,898			2,657			—		43,555
Austin	7,505			—			—		7,505
Charlotte	5,704			—			—		5,704
Other	3,875			—			2,130		6,005
Total segment revenues	103,099			2,657			2,130		107,886
Less Company's share of rental property revenues from unconsolidated joint ventures	(7,083		)	(2,657		)	—		(9,740		)
Total revenues	$	96,016		$	—		$	2,130	$	98,146

Nine Months Ended September 30, 2016	Office			Mixed-Use			Other		Total
Revenues:
Houston	$	133,450		$	—		$	—	$	133,450
Atlanta	110,915			9,200			—		120,115
Austin	29,825			—			—		29,825
Charlotte	19,533			—			—		19,533
Other	(54		)	—			6,826		6,772
Total segment revenues	293,669			9,200			6,826		309,695
Less Company's share of rental property revenues from unconsolidated joint ventures	(21,837		)	(9,200		)	—		(31,037		)
Total revenues	$	271,832		$	—		$	6,826	$	278,658

Nine Months Ended September 30, 2015	Office			Mixed-Use			Other		Total
Revenues:
Houston	$	133,326		$	—		$	—	$	133,326
Atlanta	119,694			7,201			—		126,895
Austin	18,744			—			—		18,744
Charlotte	17,027			—			—		17,027
Other	13,988			—			5,799		19,787
Total segment revenues	302,779			7,201			5,799		315,779
Less Company's share of rental property revenues from unconsolidated joint ventures	(20,553		)	(7,201		)	—		(27,754		)
Total revenues	$	282,226		$	—		$	5,799	$	288,025