Segment Information
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Dec. 31, 2014
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Segment Information | Segment Information Our primary business is the ownership and operation of office properties. We account for each of our individual properties as a separate operating segment. We have aggregated our separate operating segments into two reportable segments based on our primary method of internal reporting: CBD properties and suburban properties. More than 90% of our CBD and suburban properties are office properties. Each of our reportable segments includes properties with similar operating and economic characteristics that are subject to unique supply and demand conditions. Our operating segments (i.e., our individual properties) are managed and operated consistently in accordance with our standard operating procedures. We use property net operating income, or NOI, and cash yield to evaluate the performance of our operating segments. We define NOI as income from our real estate including lease termination fees received from tenants less our property operating expenses, which include property marketing costs. NOI excludes amortization of capitalized tenant improvement costs and leasing commissions. As of December 31, 2014, we owned 40 CBD properties (53 buildings) and 116 suburban properties (209 buildings). Prior periods have been restated to reflect properties reclassified from discontinued operations to continuing operations during 2014. Property level information by operating segment as of December 31, 2014 and 2013, excluding assets held for sale as of December 31, 2013, and for the years ended December 31, 2014, 2013 and 2012, is as follows (in thousands):
(1) The change in total square feet from December 31, 2013 to 2014 is a result of remeasuring certain spaces.
As of December 31, 2014, 2013 and 2012, we had assets in Australia of $252.0 million, $285.1 million and $362.0 million, respectively. For the years ended December 31, 2014, 2013 and 2012, we recognized revenues in Australia of $30.1 million, $33.1 million and $34.7 million, respectively. We do not believe either of our segments is dependent on the Australian assets. The following table includes the reconciliation of NOI to net income (loss), the most directly comparable financial measure under GAAP reported in our consolidated financial statements. We consider NOI to be an appropriate supplemental measure to net income(loss) because it may help both investors and management to understand the operations of our properties. We use NOI internally to evaluate individual, regional and combined property level performance, and we believe that NOI provides useful information to investors regarding our results of operations because it reflects only those income and expense items that are incurred at the property level and may facilitate comparisons of our operating performance between periods and with other REITs. The calculation of NOI excludes certain components of net income (loss) in order to provide results that are more closely related to our properties' results of operations. NOI does not represent cash generated by operating activities in accordance with GAAP and should not be considered as an alternative to net income (loss), net income (loss) attributable to Equity Commonwealth, net loss attributable to Equity Commonwealth common shareholders, operating (loss) income or cash flow from operating activities, determined in accordance with GAAP, or as an indicator of our financial performance or liquidity, nor is this measure necessarily indicative of sufficient cash flow to fund all of our needs. This measure should be considered in conjunction with net income (loss), net income (loss) attributable to Equity Commonwealth, net (loss) attributable to Equity Commonwealth common shareholders, operating (loss) income and cash flow from operating activities as presented in our consolidated statements of operations, consolidated statements of comprehensive income (loss) and consolidated statements of cash flows. Other REITs and real estate companies may calculate NOI differently than we do. A reconciliation of NOI to net income (loss) for the years ended December 31, 2014, 2013 and 2012 is as follows:
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