Segment Reporting

Reportable Segments

During the three months ended June 30, 2017, we substantially completed the Medical Office Portfolio Disposition, which resulted in all of our in-service medical office properties being classified within discontinued operations with the exception of a property that did not meet the criteria for classification as held for sale at June 30, 2017 (see Note 10). As a result of this transaction, our medical office properties are no longer presented as a separate reportable segment at June 30, 2017, with substantially all current and prior period operating results being classified within discontinued operations. The remaining medical office property included in continuing operations no longer meets the quantitative thresholds for separate presentation, and is classified as part of our non-reportable Rental Operations. Properties that are not included in our reportable segments, because they do not by themselves meet the quantitative thresholds for separate presentation as a reportable segment, are generally referred to as non-reportable Rental Operations. Our non-reportable Rental Operations primarily include our remaining office properties and medical office property at June 30, 2017.

As of June 30, 2017, after consideration of the Medical Office Portfolio Disposition, we had two reportable operating segments, the first consisting of the ownership and rental of industrial real estate investments. All of our industrial properties across the markets in which we operate are aggregated into one reportable segment as they have similar economic characteristics and we provide similar leasing arrangements and services to similar types of, and in many cases, the same tenants. The operations of our industrial properties, as well as our non-reportable Rental Operations, are collectively referred to as "Rental Operations." Our second 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 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 (in thousands):



	Three Months Ended June 30,				Six Months Ended June 30,
	2017		2016		2017		2016
Revenues
Rental Operations:
Industrial	$	162,559	$	140,219	$	319,441	$	283,199
Non-reportable Rental Operations	3,182		14,054		17,598		29,959
Service Operations	23,576		26,044		32,975		49,195
Total segment revenues	189,317		180,317		370,014		362,353
Other revenue	95		3,637		473		5,339
Consolidated revenue from continuing operations	189,412		183,954		370,487		367,692
Discontinued operations	35,165		42,736		81,404		84,181
Consolidated revenue	$	224,577	$	226,690	$	451,891	$	451,873

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 (in thousands and excluding discontinued operations):



	Three Months Ended June 30,						Six Months Ended June 30,
	2017			2016			2017			2016
PNOI
Industrial	$	120,346		$	103,289		$	235,535		$	203,892
Non-reportable Rental Operations	1,750			2,528			4,236			5,186
PNOI, excluding all sold/held-for-sale properties	122,096			105,817			239,771			209,078
PNOI from sold/held-for-sale properties included in continuing operations	372			9,812			1,956			21,366
PNOI, continuing operations	$	122,468		$	115,629		$	241,727		$	230,444

Earnings from Service Operations	1,202			3,816			2,977			6,047

Rental Operations revenues and expenses excluded from PNOI:
Straight-line rental income and expense, net	3,628			1,323			5,205			2,920
Revenues related to lease buyouts	72			69			9,857			234
Amortization of lease concessions and above and below market rents	(566		)	(695		)	(1,450		)	(1,612		)
Intercompany rents and other adjusting items	(188		)	(412		)	(413		)	(603		)
Non-Segment Items:
Equity in earnings of unconsolidated companies	51,933			3,534			56,682			25,394
Gain on dissolution of unconsolidated company	—			30,697			—			30,697
Promote income	20,007			24,087			20,007			24,087
Interest expense	(21,680		)	(29,511		)	(44,566		)	(59,644		)
Depreciation and amortization expense	(67,013		)	(61,136		)	(129,036		)	(120,669		)
Gain on sale of properties	34,341			39,314			71,387			54,891
Impairment charges	—			(5,651		)	(859		)	(12,056		)
Interest and other income, net	2,260			567			2,792			3,090
General and administrative expenses	(11,858		)	(11,584		)	(31,090		)	(29,682		)
Gain on land sales	1,279			707			2,784			837
Other operating expenses	(718		)	(836		)	(1,457		)	(2,072		)
Loss on extinguishment of debt	(9,561		)	(2,430		)	(9,536		)	(2,430		)
Acquisition-related activity	—			(72		)	—			(75		)
Other non-segment revenues and expenses, net	(986		)	80			(1,569		)	(323		)
Income from continuing operations before income taxes	$	124,620		$	107,496		$	193,442		$	149,475

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 were as follows (in thousands):



	June 30, 2017		December 31, 2016
Assets
Rental Operations:
Industrial	$	5,303,570	$	4,828,984
Non-reportable Rental Operations	307,095		1,501,737
Service Operations	124,848		127,154
Total segment assets	5,735,513		6,457,875
Non-segment assets	1,582,056		314,127
Consolidated assets	$	7,317,569	$	6,772,002