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Segment Information
 12 Months Ended
Dec. 31, 2014
Segment Reporting [Abstract]  
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):
 
As of December 31,
 
2014
 
2013
Square feet (in thousands):
 

 
 

CBD properties
21,892

 
21,889

Suburban properties
21,027

 
21,026

Total properties(1)
42,919

 
42,915

(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
Investment in real estate properties, net of accumulated depreciation
 

 
 

CBD properties
$
2,966,926

 
$
3,001,397

Suburban properties
1,731,072

 
1,640,709

Total properties
$
4,697,998

 
$
4,642,106

 
Year Ended December 31,
 
2014
 
2013
 
2012
Rental income:
 

 
 

 
 

CBD properties
$
436,426

 
$
439,716

 
$
423,453

Suburban properties
255,273

 
323,546

 
351,147

Total properties
$
691,699

 
$
763,262

 
$
774,600

Tenant reimbursements and other income:
 

 
 

 
 

CBD properties
$
112,481

 
$
120,352

 
$
116,326

Suburban properties
57,677

 
69,415

 
70,161

Total properties
$
170,158

 
$
189,767

 
$
186,487

NOI:
 

 
 

 
 

CBD properties
$
289,141

 
$
294,306

 
$
290,810

Suburban properties
184,734

 
248,678

 
272,604

Total properties
$
473,875

 
$
542,984

 
$
563,414


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:
 
Year Ended December 31,
 
2014
 
2013
 
2012
Rental income
$
691,699

 
$
763,262

 
$
774,600

Tenant reimbursements and other income
170,158

 
189,767

 
186,487

Operating expenses
(387,982
)
 
(410,045
)
 
(397,673
)
NOI
$
473,875

 
$
542,984

 
$
563,414

 
 
 
 
 
 
NOI
$
473,875

 
$
542,984

 
$
563,414

Depreciation and amortization
(227,532
)
 
(234,402
)
 
(230,284
)
General and administrative
(113,155
)
 
(80,504
)
 
(49,312
)
Loss on asset impairment
(185,067
)
 
(124,253
)
 
—

Acquisition related costs
(5
)
 
(318
)
 
(5,648
)
Operating (loss) income
(51,884
)
 
103,507

 
278,170

Interest and other income
1,561

 
1,229

 
1,410

Interest expense
(143,230
)
 
(173,011
)
 
(202,055
)
Gain (loss) on early extinguishment of debt
4,909

 
(60,052
)
 
(287
)
Gain on sale of equity investment
171,561

 
66,293

 
—

Gain on issuance of shares by an equity investee
17,020

 
—

 
7,246

Income (loss) from continuing operations before income tax expense and equity in earnings of investees
(63
)
 
(62,034
)
 
84,484

Income tax expense
(3,191
)
 
(2,634
)
 
(3,207
)
Equity in earnings of investees
24,460

 
25,754

 
11,420

Income (loss) from continuing operations
21,206

 
(38,914
)
 
92,697

Income (loss) from discontinued operations
8,389

 
6,393

 
(4,341
)
Loss on asset impairment from discontinued operations
(2,238
)
 
(102,869
)
 
(168,632
)
Loss on early extinguishment of debt from discontinued operations
(3,345
)
 
(1,011
)
 
(1,608
)
Net (loss) gain on sale of properties from discontinued operations
—

 
(22,162
)
 
2,039

Income (loss) before gain on sale of properties
24,012

 
(158,563
)
 
(79,845
)
Gain on sale of properties
—

 
1,596

 
—

Net income (loss)
$
24,012

 
$
(156,967
)
 
$
(79,845
)