Reportable Segments

3 Months Ended

Mar. 31, 2023

Segment Reporting [Abstract]

REPORTABLE SEGMENTS

REPORTABLE SEGMENTS

The Company's segments are based on the method of internal reporting, which classifies operations by property type and geographical region. The segments by property type are Office and Non-Office. The segments by geographical region are Atlanta, Austin, Charlotte, Dallas, Phoenix, Tampa, and other markets. Included in other markets are properties located in Chapel Hill (sold in September 2022), Houston, and Nashville. Included in Non-Office are retail and apartments in Chapel Hill (sold in September 2022) and Atlanta, as well as the College Street Garage in Charlotte. 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 joint venture operations.

Company management evaluates the performance of its reportable segments based in part 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 fee income, other revenue, corporate general and administrative expenses, reimbursed expenses, interest expense, depreciation and amortization, impairments, gains/losses on sales of real estate, gains/losses on extinguishment of debt, transaction costs, 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 months ended March 31, 2023 and 2022 are as follows ($ in thousands):

Three Months Ended March 31, 2023	Office		Non-Office		Total
Revenues:
Atlanta	$	72,132	$	457	$	72,589
Austin	67,883		—		67,883
Charlotte	14,818		1,761		16,579
Dallas	4,187		—		4,187
Phoenix	15,583		—		15,583
Tampa	18,748		—		18,748
Other markets	6,623		—		6,623
Total segment revenues	199,974		2,218		202,192
Less: Company's share of rental property revenues from unconsolidated joint ventures	(1,659)		(457)		(2,116)
Total rental property revenues	$	198,315	$	1,761	$	200,076

Three Months Ended March 31, 2022	Office		Non-Office		Total
Revenues:
Atlanta	$	68,014	$	423	$	68,437
Austin	61,224		—		61,224
Charlotte	13,503		985		14,488
Dallas	4,196		—		4,196
Phoenix	13,430		—		13,430
Tampa	16,924		—		16,924
Other markets	7,328		1,358		8,686
Total segment revenues	184,619		2,766		187,385
Less: Company's share of rental property revenues from unconsolidated joint ventures	(2,377)		(1,781)		(4,158)
Total rental property revenues	$	182,242	$	985	$	183,227

NOI by reportable segment for the three months ended March 31, 2023 and 2022 are as follows ($ in thousands):

Three Months Ended March 31, 2023	Office		Non-Office		Total
Net Operating Income:
Atlanta	$	47,389	$	270	$	47,659
Austin	40,273		—		40,273
Charlotte	10,762		1,162		11,924
Dallas	3,225		—		3,225
Phoenix	11,773		—		11,773
Tampa	11,711		—		11,711
Other markets	3,571		—		3,571
Total Net Operating Income	$	128,704	$	1,432	$	130,136

Three Months Ended March 31, 2022	Office		Non-Office		Total
Net Operating Income:
Atlanta	$	44,173	$	235	$	44,408
Austin	36,367		—		36,367
Charlotte	10,011		643		10,654
Dallas	3,308		—		3,308
Phoenix	8,975		—		8,975
Tampa	10,691		—		10,691
Other markets	4,295		909		5,204
Total Net Operating Income	$	117,820	$	1,787	$	119,607

The following reconciles Net Operating Income from net income for each of the periods presented ($ in thousands):

	Three Months Ended March 31,
	2023		2022
Net Income	$	22,356	$	28,163
Net operating income from unconsolidated joint ventures	1,409		2,719
Fee income	(374)		(1,388)
Termination fee income	(136)		(1,462)
Other income	(2,278)		(2,283)
Reimbursed expenses	207		360
General and administrative expenses	8,438		8,063
Interest expense	25,030		15,525
Depreciation and amortization	75,770		70,744
Other expenses	385		221
Income from unconsolidated joint ventures	(673)		(1,124)
Loss on investment property transactions	2		69
Net Operating Income	$	130,136	$	119,607