XML 52 R30.htm IDEA: XBRL DOCUMENT v3.20.4
SEGMENT INFORMATION
 12 Months Ended
Dec. 31, 2020
Segment Reporting [Abstract]  
SEGMENT INFORMATION
19. SEGMENT INFORMATION
During the year ended December 31, 2020, the Company owned and managed its portfolio within five segments: (1) Philadelphia Central Business District (Philadelphia CBD), (2) Pennsylvania Suburbs, (3) Austin, Texas (4) Metropolitan Washington, D.C., and (5) Other. The Philadelphia CBD segment includes properties located in the City of Philadelphia, Pennsylvania. The Pennsylvania Suburbs segment includes properties in Chester, Delaware, and Montgomery counties in the Philadelphia suburbs. The Austin, Texas segment includes properties in the City of Austin, Texas. The Metropolitan Washington, D.C. segment includes properties in the District of Columbia, Northern Virginia and Southern Maryland. The Other segment includes properties located in Camden County, New Jersey and properties in New Castle County, Delaware. In addition to the five segments, 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 is transferred to operating properties by region upon completion of the associated construction or project.
The following tables provide selected asset information as of December 31, 2020 and 2019 and results of operations of the Company’s reportable segments for the years ended December 31, 2020, 2019 and 2018 (in thousands):
Real estate investments, at cost:
December 31, 2020December 31, 2019
Philadelphia CBD$1,433,927 $1,726,299 
Pennsylvania Suburbs871,530 1,003,890 
Austin, Texas728,741 721,255 
Metropolitan Washington, D.C.352,794 468,035 
Other87,117 86,980 
Operating Properties$3,474,109 $4,006,459 
Corporate
Right of use asset - operating leases, net$20,977 $21,656 
Construction-in-progress$210,311 $180,718 
Land held for development$117,984 $96,124 
Prepaid leasehold interests in land held for development, net$39,185 $39,592 
.
Net operating income:
Year Ended December 31,
202020192018
Total revenueOperating expenses (a)Net operating income (loss)Total revenueOperating expenses (a)Net operating income (loss)Total revenueOperating expenses (a)Net operating income (loss)
Philadelphia CBD$232,028 $(82,505)$149,523 $263,769 $(100,219)$163,550 $256,717 $(99,449)$157,268 
Pennsylvania Suburbs141,613 (46,281)95,332 141,084 (47,418)93,666 138,279 (49,433)88,846 
Austin, Texas102,982 (39,759)63,223 104,157 (38,285)65,872 38,665 (16,739)21,926 
Metropolitan Washington, D.C.40,223 (20,791)19,432 51,498 (23,455)28,043 90,308 (34,072)56,236 
Other13,469 (9,815)3,654 14,558 (9,328)5,230 16,757 (11,888)4,869 
Corporate4,537 (6,305)(1,768)5,351 (7,141)(1,790)3,619 (6,518)(2,899)
Operating properties
$534,852 $(205,456)$329,396 $580,417 $(225,846)$354,571 $544,345 $(218,099)$326,246 
(a)Includes property operating expense, real estate taxes and third party management expense.
Unconsolidated real estate ventures:
Investment in real estate ventures, at equityEquity in income (loss) of real estate venture
As ofYears ended December 31,
December 31, 2020December 31, 2019202020192018
Philadelphia CBD$268,562 $17,524 $(9,090)$328 $(105)
Metropolitan Washington, D.C.99,769 102,840 (3,019)(4,234)(15,065)
Mid-Atlantic Office JV32,996 — 96 — — 
MAP Venture(11,516)(70)(6,571)(6,102)(2,155)
Other— — — 86 407 
Austin, Texas— — — — 1,687 
Total$389,811 $120,294 $(18,584)$(9,922)$(15,231)

Net operating income (“NOI”) is a non-GAAP financial measure, which we define as total revenue less property operating expenses, real estate taxes, and third party management expenses. Property operating expenses that are included in determining NOI consist of costs that are necessary and allocable to our operating properties such as utilities, property-level salaries, repairs and maintenance, property insurance, management fees, and bad debt expense. General and administrative expenses that are not reflected in NOI primarily consist of corporate-level salaries, amortization of share awards and professional fees that are incurred as part of corporate office management. NOI presented by the Company may not be comparable to NOI reported by other companies that define NOI differently. NOI is the measure that is used by the Company to evaluate the operating performance of its real estate assets by segment. The Company believes NOI provides useful
information to investors regarding the financial condition and results of operations because it reflects only those income and expense items that are incurred at the property level. While NOI is a relevant and widely used measure of operating performance of real estate investment trusts, it does not represent cash flow from operations or net income as defined by GAAP and should not be considered as an alternative to those measures in evaluating our liquidity or operating performance. NOI does not reflect interest expenses, real estate impairment losses, depreciation and amortization costs, capital expenditures and leasing costs. The Company believes that net income (loss), as defined by GAAP, is the most appropriate earnings measure. The following is a reconciliation of consolidated net income (loss), as defined by GAAP, to consolidated NOI, (in thousands):
Year Ended December 31,
202020192018
Net income$307,326 $34,529 $135,472 
Plus:
Interest expense73,911 81,512 78,199 
Interest expense - amortization of deferred financing costs2,904 2,768 2,498 
Depreciation and amortization188,283 210,005 176,000 
General and administrative expenses30,288 32,156 27,802 
Equity in loss of Real Estate Ventures18,584 9,922 15,231 
Provision for impairment— — 71,707 
Loss on early extinguishment of debt— — 105 
Less:
Interest income1,939 2,318 4,703 
Income tax (provision) benefit224 (12)(423)
Net gain on disposition of real estate289,461 356 2,932 
Net gain on sale of undepreciated real estate201 2,020 3,040 
Net gain on real estate venture transactions75 11,639 142,233 
Gain on promoted interest in unconsolidated real estate venture— — 28,283 
Consolidated net operating income$329,396 $354,571 $326,246