Segment Information

12 Months Ended

Dec. 31, 2011

Segment Reporting [Abstract]

SEGMENT INFORMATION

SEGMENT INFORMATION

As of December 31, 2011, the Company manages its portfolio within seven segments: (1) Pennsylvania Suburbs, (2) Philadelphia Central Business District (CBD) (3) Metropolitan Washington D.C., (4) New Jersey/Delaware, (5) Richmond, Virginia, (6) Austin, Texas, and (7) California. The Pennsylvania Suburbs segment includes properties in Chester, Delaware, and Montgomery counties in the Philadelphia suburbs. The Philadelphia CBD segment includes properties in the City of Philadelphia, Pennsylvania. The Metropolitan Washington, D.C. segment includes properties in Northern Virginia and suburban Maryland. The New Jersey/Delaware segment includes properties in Burlington, Camden and Mercer counties and in New Castle county in the state of Delaware. The Richmond, Virginia segment includes properties primarily in Albemarle, Chesterfield, Goochland and Henrico counties and Durham, North Carolina. The Austin, Texas segment includes properties in Austin. The California segment includes properties in Oakland, Concord, Carlsbad and Rancho Bernardo. The corporate group is responsible for cash and investment management, development of certain real estate properties during the construction period, and certain other general support functions. Land held for development and construction in progress are transferred to operating properties by region upon completion of the associated construction or project.

Segment information for the three years ended December 31, 2011, 2010 and 2009 are as follows (in thousands):

	Pennsylvania Suburbs		Philadelphia CBD		Metropolitan, D.C.		New Jersey /Delaware		Richmond, Virginia		Austin, Texas		California		Corporate			Total
2011:
Real estate investments, at cost:
Operating properties	$	1,218,071	$	953,870	$	1,255,803	$	545,657	$	307,698	$	257,694	$	254,287	$	—		$	4,793,080
Construction-in-progress															25,083			$	25,083
Land inventory															109,008			$	109,008
Total revenue	158,248		125,366		128,456		81,629		36,789		30,895		21,670		(1,248		)	581,805
Property operating expenses, real estate taxes and third party management expenses	58,440		48,792		47,786		40,500		14,727		13,048		11,507		(989		)	233,811
Net operating income	$	99,808	$	76,574	$	80,670	$	41,129	$	22,062	$	17,847	$	10,163	$	(259	)	$	347,994
2010:
Real estate investments, at cost:
Operating properties	$	1,199,957	$	911,354	$	1,359,776	$	568,413	$	294,406	$	254,019	$	246,186	$	—		$	4,834,111
Construction-in-progress	—		—		—		—		—		—		—		33,322			33,322
Land inventory	—		—		—		—		—		—		—		110,055			110,055
Total revenue	152,380		92,110		137,923		87,711		36,032		32,049		22,551		(800		)	559,956
Property operating expenses, real estate taxes and third party management expenses	59,065		37,896		48,318		44,137		14,010		13,401		11,852		(1,338		)	227,341
Net operating income	$	93,315	$	54,214	$	89,605	$	43,574	$	22,022	$	18,648	$	10,699	$	538		$	332,615
2009:
Real estate investments, at cost:
Operating properties	$	1,219,391	$	490,602	$	1,372,213	$	605,181	$	301,474	$	268,806	$	254,951	$	—		$	4,512,618
Construction-in-progress	—				—		—		—		—		—		271,962			271,962
Land inventory	—				—		—		—		—		—		97,368			97,368
Total revenue	157,616		73,534		140,438		98,344		36,201		31,311		29,283		1,193			567,920
Property operating expenses, real estate taxes and third party management expenses	56,297		31,479		52,899		45,421		13,871		14,351		14,735		(1,893		)	227,160
Net operating income	$	101,319	$	42,055	$	87,539	$	52,923	$	22,330	$	16,960	$	14,548	$	3,086		$	340,760

Net operating income ("NOI") is defined as total revenue less property operating expenses, real estate taxes and third party management expenses. Segment NOI includes revenue, real estate taxes and property operating expenses directly related to operation of the properties within the respective geographical region. Segment NOI excludes property level depreciation and amortization, revenue and expenses directly associated with third party real estate management services, expenses associated with corporate administrative support services, and inter-company eliminations. NOI is the measure that is used by the Company to evaluate the operating performance of its real estate assets by segment. The Company also believes that NOI provides useful information to investors regarding its financial condition and results of operations because it reflects only those income and expenses recorded at the property level. NOI does not also reflect general and administrative expenses, interest expenses, real estate impairment losses, depreciation and amortization costs, capital expenditures and leasing costs, or trends in development and construction activities that could materially impact the Company's results from operations. All companies may not also calculate NOI in the same manner. The Company believes that net income, as defined by GAAP, is the most appropriate earnings measure.

Below is a reconciliation of consolidated net operating income to consolidated income (loss) from continuing operations:

	Year Ended December 31,
	2011			2010			2009
	(amounts in thousands)
Consolidated net operating income	$	347,994		$	332,615		$	340,760
Less:
Interest expense	(131,405		)	(132,640		)	(135,740		)
Deferred financing costs	(4,991		)	(3,770		)	(5,864		)
Depreciation and amortization	(217,680		)	(210,592		)	(203,572		)
Administrative expenses	(24,602		)	(23,306		)	(20,821		)
Recognized Hedge Activity	—			—			(916		)
Plus:
Interest income	1,813			3,222			2,499
Historic tax credit transaction income	12,026			—			—
Equity in income of real estate ventures	3,775			5,305			4,069
Net gain on sales of interests in real estate ventures	2,791			—			(3		)
Net gain on sale of undepreciated real estate	45			—			—
Loss on real estate venture formation	(222		)	—			—
Gain (loss) on early extinguishment of debt	(2,776		)	(2,110		)	23,176
Income (loss) from continuing operations	(13,232		)	(31,276		)	3,588
Income from discontinued operations	8,517			13,670			4,501
Net income (loss)	$	(4,715	)	$	(17,606	)	$	8,089