Segment Reporting

3 Months Ended

Mar. 31, 2016

Segment Reporting [Abstract]

Segment Reporting

Segment Reporting

Reportable Segments

We had three reportable operating segments at March 31, 2016, the first two of which consist of the ownership and rental of (i) industrial and (ii) medical office real estate investments. Beginning in 2016 our office properties are no longer presented as a separate reportable segment, as they no longer meet the quantitative thresholds for separate presentation, and are referred to as part of our non-reportable Rental Operations. The operations of our industrial and medical office properties as well as our non-reportable Rental Operations, are collectively referred to as "Rental Operations." Our third reportable segment consists of various real estate services such as property management, asset management, maintenance, leasing, development, general contracting and construction management to third-party property owners and joint ventures, and is collectively referred to as "Service Operations." Our reportable segments offer different products or services and are managed separately because each segment requires different operating strategies and management expertise.

Revenues by Reportable Segment

The following table shows the revenues for each of the reportable segments, as well as a reconciliation to consolidated revenues, for the three months endedMarch 31, 2016 and 2015, respectively (in thousands): 

	Three Months Ended March 31,
	2016		2015
Revenues
Rental Operations:
Industrial	$	142,980	$	147,227
Medical Office	42,225		40,028
Non-reportable Rental Operations	14,896		25,536
Service Operations	23,151		52,820
Total segment revenues	223,252		265,611
Other revenue	1,702		1,824
Consolidated revenue from continuing operations	224,954		267,435
Discontinued operations	229		32,115
Consolidated revenue	$	225,183	$	299,550

Supplemental Performance Measure

Property level net operating income on a cash basis ("PNOI") is the non-GAAP supplemental performance measure that we use to evaluate the performance of, and to allocate resources among, the real estate investments in the reportable and operating segments that comprise our Rental Operations. PNOI for our Rental Operations segments is comprised of rental revenues from continuing operations less rental expenses and real estate taxes from continuing operations, along with certain other adjusting items (collectively referred to as "Rental Operations revenues and expenses excluded from PNOI," as shown in the following table). Additionally, we do not allocate interest expense, depreciation expense and certain other non-property specific revenues and expenses (collectively referred to as "Non-Segment Items," as shown in the following table) to our individual operating segments.

We evaluate the performance of our Service Operations reportable segment using net income or loss, as allocated to that segment ("Earnings from Service Operations").

The following table shows a reconciliation of our segment-level measures of profitability to consolidated income from continuing operations before income taxes for the three months endedMarch 31, 2016 and 2015, respectively (in thousands and excluding discontinued operations): 

	Three Months Ended March 31,
	2016			2015
PNOI
Industrial	$	102,113		$	93,272
Medical Office	27,242			25,233
Non-reportable Rental Operations	9,173			9,960
PNOI, excluding all sold/held for sale properties	138,528			128,465
PNOI from sold/held-for-sale properties included in continuing operations	2,310			14,261
PNOI, continuing operations	$	140,838		$	142,726
Earnings from Service Operations	2,231			5,797
Rental Operations revenues and expenses excluded from PNOI:
Straight-line rental income and expense, net	2,923			6,697
Revenues related to lease buyouts	165			864
Amortization of lease concessions and above and below market rents	(633		)	(1,713		)
Intercompany rents and other adjusting items	7			(460		)
Non-Segment Items:
Equity in earnings of unconsolidated companies	21,860			6,246
Interest expense	(37,730		)	(49,610		)
Depreciation expense	(77,798		)	(81,903		)
Gain on sale of properties	15,577			23,484
Impairment charges on non-depreciable properties	(6,405		)	—
Interest and other income, net	2,523			338
General and administrative expenses	(18,098		)	(17,004		)
Gain on land sales	130			5,425
Other operating expenses	(1,237		)	(1,557		)
Acquisition-related activity	(3		)	(28		)
Other non-segment revenues and expenses, net	(402		)	(402		)
Income from continuing operations before income taxes	$	43,948		$	38,900

The most comparable GAAP measure to PNOI is income from continuing operations before income taxes. PNOI excludes expenses that materially impact our overall results of operations and, therefore, should not be considered as a substitute for income from continuing operations before income taxes or any other measures derived in accordance with GAAP. Furthermore, PNOI may not be comparable to other similarly titled measures of other companies.

Assets by Reportable Segment

The assets for each of the reportable segments at March 31, 2016 and December 31, 2015 were as follows (in thousands):

	March 31, 2016		December 31, 2015
Assets
Rental Operations:
Industrial	$	4,614,478	$	4,552,107
Medical Office	1,279,562		1,269,546
Non-reportable Rental Operations	321,451		367,469
Service Operations	135,558		137,257
Total segment assets	6,351,049		6,326,379
Non-segment assets	545,911		569,136
Consolidated assets	$	6,896,960	$	6,895,515