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Segment Information
 6 Months Ended
Jun. 30, 2012
Segment Reporting [Abstract]  
SEGMENT INFORMATION
SEGMENT INFORMATION
As of June 30, 2012, the Company was managing its portfolio within seven segments: (1) Pennsylvania, (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 segment includes properties in Chester, Delaware, and Montgomery counties in the Philadelphia suburbs. The Philadelphia CBD segment includes properties located in the City of Philadelphia in Pennsylvania. The Metropolitan Washington, D.C. segment includes properties in Northern Virginia and southern Maryland. The New Jersey/Delaware segment includes properties in Burlington, Camden and Mercer counties in New Jersey 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 one property in 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 is as follows (in thousands):
 
Pennsylvania
Suburbs
 
Philadelphia
CBD
 
Metropolitan, D.C.
 
New Jersey/Delaware
 
Richmond,
Virginia
 
Austin, Texas
 
California
 
Corporate
 
Total
As of June 30, 2012:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Real estate investments, at cost:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Operating properties
$
1,167,390

 
$
955,563

 
$
1,182,895

 
$
545,241

 
$
307,932

 
$
258,924

 
$
221,102

 
$
—

 
$
4,639,047

Construction-in-progress
 
 
 
 
 
 
 
 
 
 
 
 
 
 
57,420

 
57,420

Land inventory
 
 
 
 
 
 
 
 
 
 
 
 
 
 
109,564

 
109,564

As of December 31, 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

For the three-months ended June 30, 2012:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Total revenue
$
36,934

 
$
31,911

 
$
26,967

 
$
20,287

 
$
8,902

 
$
8,188

 
$
4,831

 
$
(444
)
 
$
137,576

Property operating expenses, real estate taxes and third party management expenses
12,711

 
11,965

 
10,454

 
8,932

 
3,471

 
3,612

 
2,488

 
(329
)
 
53,304

Net operating income
$
24,223

 
$
19,946

 
$
16,513

 
$
11,355

 
$
5,431

 
$
4,576

 
$
2,343

 
$
(115
)
 
$
84,272

For the three-months ended June 30, 2011:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Total revenue
$
37,159

 
$
30,573

 
$
30,309

 
$
19,832

 
$
9,278

 
$
7,637

 
$
4,781

 
$
(320
)
 
$
139,249

Property operating expenses, real estate taxes and third party management expenses
12,825

 
11,203

 
11,486

 
9,516

 
3,614

 
3,412

 
2,563

 
(212
)
 
54,407

Net operating income
$
24,334

 
$
19,370

 
$
18,823

 
$
10,316

 
$
5,664

 
$
4,225

 
$
2,218

 
$
(108
)
 
$
84,842

For the six-months ended June 30, 2012:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Total revenue
$
75,039

 
$
65,061

 
$
53,403

 
$
40,889

 
$
17,937

 
$
15,681

 
$
9,800

 
$
(823
)
 
$
276,987

Property operating expenses, real estate taxes and third party management expenses
26,055

 
24,650

 
20,520

 
18,668

 
7,113

 
7,009

 
4,858

 
(768
)
 
108,105

Net operating income
$
48,984

 
$
40,411

 
$
32,883

 
$
22,221

 
$
10,824

 
$
8,672

 
$
4,942

 
$
(55
)
 
$
168,882

For the six-months ended June 30, 2011:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Total revenue
$
75,136

 
$
62,423

 
$
60,640

 
$
39,811

 
$
18,076

 
$
15,749

 
$
9,584

 
$
(553
)
 
$
280,866

Property operating expenses, real estate taxes and third party management expenses
28,617

 
23,423

 
23,135

 
20,603

 
7,003

 
6,506

 
5,004

 
(545
)
 
113,746

Net operating income
$
46,519

 
$
39,000

 
$
37,505

 
$
19,208

 
$
11,073

 
$
9,243

 
$
4,580

 
$
(8
)
 
$
167,120


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 and management of the properties owned and managed 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 also does not reflect general and administrative expenses, interest expenses, real estate impairment losses, depreciation and amortization costs, capital expenditures and leasing costs. Trends in development and construction activities that could materially impact the Company’s results from operations are also not reflected in NOI. All companies may not calculate NOI in the same manner. 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. The Company believes that net income, as defined by GAAP, is the most appropriate earnings measure. Below is a reconciliation of consolidated NOI to consolidated net income (loss), as defined by GAAP:
 
Three-month periods
ended June 30,
 
Six-month periods
ended June 30,
 
2012
 
2011
 
2012
 
2011
 
(amounts in thousands)
 
(amounts in thousands)
Consolidated net operating income
$
84,272

 
$
84,842

 
$
168,882

 
$
167,120

Less:
 
 
 
 
 
 
 
Interest expense
(32,981
)
 
(34,738
)
 
(67,125
)
 
(67,131
)
Deferred financing costs
(1,261
)
 
(1,070
)
 
(2,572
)
 
(1,998
)
Depreciation and amortization
(49,331
)
 
(55,710
)
 
(98,880
)
 
(105,214
)
Administrative expenses
(6,079
)
 
(5,890
)
 
(12,129
)
 
(12,134
)
Plus:
 
 
 
 
 
 
 
Interest income
1,841

 
421

 
2,324

 
862

Interest expense - financing obligation
(196
)
 
—

 
(378
)
 
—

Equity in income of real estate ventures
838

 
1,088

 
882

 
2,321

Net gain on sales of interests in real estate
—

 
—

 
—

 
2,791

Loss on early extinguishment of debt
(1,250
)
 
(756
)
 
(1,498
)
 
(756
)
Loss from continuing operations
(4,147
)
 
(11,813
)
 
(10,494
)
 
(14,139
)
Income from discontinued operations
10,949

 
5,579

 
26,632

 
7,415

Net income (loss)
$
6,802

 
$
(6,234
)
 
$
16,138

 
$
(6,724
)