Reportable Segments

9 Months Ended

Sep. 30, 2019

The Company's segments are based on its method of internal reporting, which classifies operations by property type and geographical area. The segments by property type are: Office and Mixed-Use. The segments by geographical region are: Atlanta, Austin, Charlotte, Dallas, Phoenix, Tampa, and Other. Included in Other is a property held for sale in Cherry Hill, New Jersey and properties located in Chapel Hill, Fort Worth, and Houston. 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. Each segment includes both consolidated operations and the Company's share of unconsolidated 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 termination fees, 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. Information on the Company's segments along with a reconciliation of NOI to net income for the three and nine months ended September 30, 2019 and 2018 are as follows (in thousands):



Three Months Ended September 30, 2019	Office		Mixed-Use		Total
Net Operating Income:
Atlanta	$	38,926	$	—	$	38,926
Austin	29,452		—		29,452
Charlotte	21,692		—		21,692
Dallas	3,416		—		3,416
Phoenix	8,913		—		8,913
Tampa	8,309		—		8,309
Other	9,266		668		9,934
Total Net Operating Income	$	119,974	$	668	$	120,642



Three Months Ended September 30, 2018	Office		Mixed-Use		Total
Net Operating Income:
Atlanta	$	32,296	$	—	$	32,296
Austin	15,180		—		15,180
Charlotte	15,924		—		15,924
Phoenix	9,265		—		9,265
Tampa	7,446		—		7,446
Other	310		437		747
Total Net Operating Income	$	80,421	$	437	$	80,858



Nine Months Ended September 30, 2019	Office		Mixed-Use		Total
Net Operating Income:
Atlanta	$	115,692	$	—	$	115,692
Austin	63,977		—		63,977
Charlotte	55,550		—		55,550
Dallas	4,086		—		4,086
Phoenix	27,694		—		27,694
Tampa	24,869		—		24,869
Other	11,678		2,244		13,922
Total Net Operating Income	$	303,546	$	2,244	$	305,790



Nine Months Ended September 30, 2018	Office		Mixed-Use		Total
Net Operating Income:
Atlanta	$	96,639	$	—	$	96,639
Austin	45,209		—		45,209
Charlotte	47,197		—		47,197
Phoenix	27,119		—		27,119
Tampa	22,816		—		22,816
Other	1,183		1,468		2,651
Total Net Operating Income	$	240,163	$	1,468	$	241,631

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,
	2019			2018			2019			2018
Net Operating Income	$	120,642		$	80,858		$	305,790		$	241,631
Net operating income from unconsolidated joint ventures	(9,037		)	(6,994		)	(26,289		)	(21,643		)
Fee income	7,494			2,519			23,298			7,211
Termination fee income	3,575			276			4,285			1,275
Other income	3			468			154			1,561
Reimbursed expenses	(1,290		)	(955		)	(3,269		)	(2,757		)
General and administrative expenses	(5,852		)	(3,913		)	(25,686		)	(18,793		)
Interest expense	(14,700		)	(9,551		)	(37,579		)	(29,043		)
Depreciation and amortization	(82,012		)	(45,068		)	(178,777		)	(135,836		)
Acquisition and transaction costs	(1,048		)	—			(50,878		)	(228		)
Other expenses	(297		)	(93		)	(1,101		)	(457		)
Income from unconsolidated joint ventures	3,241			2,252			9,779			10,173
Gain (loss) on sale of investment properties	(27		)	(33		)	14,388			4,912
Gain on extinguishment of debt	—			93			—			8
Net Income	$	20,692		$	19,859		$	34,115		$	58,014

Revenues by reportable segment, including a reconciliation to total rental property revenues on the condensed consolidated statements of operations, for three and nine months ended September 30, 2019 and 2018 are as follows (in thousands):



Three Months Ended September 30, 2019	Office			Mixed-Use			Total
Revenues:
Atlanta	$	60,486		$	—		$	60,486
Austin	50,614			—			50,614
Charlotte	34,762			—			34,762
Dallas	4,274			—			4,274
Phoenix	12,754			—			12,754
Tampa	14,335			—			14,335
Other	17,290			1,101			18,391
Total segment revenues	194,515			1,101			195,616
Less Company's share of rental property revenues from unconsolidated joint ventures	(13,689		)	(1,101		)	(14,790		)
Total rental property revenues	$	180,826		$	—		$	180,826



Three Months Ended September 30, 2018	Office			Mixed-Use			Total
Revenues:
Atlanta	$	51,248		$	—		$	51,248
Austin	26,493			—			26,493
Charlotte	23,274			—			23,274
Tampa	12,857			—			12,857
Phoenix	12,228			—			12,228
Other	1,104			429			1,533
Total segment revenues	127,204			429			127,633
Less Company's share of rental property revenues from unconsolidated joint ventures	(11,485		)	(429		)	(11,914		)
Total rental property revenues	$	115,719		$	—		$	115,719



Nine Months Ended September 30, 2019	Office			Mixed-Use			Total
Revenues:
Atlanta	$	177,455		$	—		$	177,455
Austin	110,521			—			110,521
Charlotte	85,258			—			85,258
Dallas	5,078			—			5,078
Phoenix	38,562			—			38,562
Tampa	40,776			—			40,776
Other	21,416			3,378			24,794
Total segment revenues	479,066			3,378			482,444
Less Company's share of rental property revenues from unconsolidated joint ventures	(39,442		)	(3,378		)	(42,820		)
Total rental property revenues	$	439,624		$	—		$	439,624



Nine Months Ended September 30, 2018	Office			Mixed-Use			Total
Revenues:
Atlanta	$	151,479		$	—		$	151,479
Austin	79,516			—			79,516
Charlotte	69,316			—			69,316
Tampa	37,556			—			37,556
Phoenix	37,147			—			37,147
Other	3,238			997			4,235
Total segment revenues	378,252			997			379,249
Less Company's share of rental property revenues from unconsolidated joint ventures	(34,488		)	(997		)	(35,485		)
Total rental property revenues	$	343,764		$	—		$	343,764