Information by Business Segment

12 Months Ended

Dec. 31, 2014

Segment Reporting [Abstract]

Information by Business Segment

Information by Business Segment

We have ten reportable operating office property segments (comprised of: the Baltimore/Washington Corridor; Northern Virginia; San Antonio; Huntsville; Washington, DC — Capitol Riverfront; St. Mary’s and King George Counties; Greater Baltimore; Greater Philadelphia; Colorado Springs; and Other). We also have an operating wholesale data center segment.  The table below reports segment financial information for our reportable segments (in thousands).  We measure the performance of our segments through the measure we define as NOI from real estate operations, which is derived by subtracting property operating expenses from revenues from real estate operations.

	Operating Office Property Segments
	Baltimore/ Washington Corridor		Northern Virginia		San Antonio			Huntsville		Washington, DC - Capitol Riverfront		St. Mary’s &  King George Counties		Greater Baltimore		Greater Philadelphia		Colorado Springs			Other		Operating Wholesale Data Center		Total
Year Ended December 31, 2014
Revenues from real estate operations	$	236,191	$	89,263	$	36,377		$	10,446	$	14,599	$	16,736	$	43,591	$	11,929	$	(1	)	$	10,150	$	10,430	$	479,711
Property operating expenses	81,132		31,532		20,562			3,066		7,308		5,268		17,778		4,386		12			1,469		7,286		179,799
NOI from real estate operations	$	155,059	$	57,731	$	15,815		$	7,380	$	7,291	$	11,468	$	25,813	$	7,543	$	(13	)	$	8,681	$	3,144	$	299,912
Additions to long-lived assets	$	24,174	$	17,447	$	(6	)	$	4,077	$	1,185	$	8,825	$	7,925	$	952	$	—		$	—	$	22	$	64,601
Transfers from non-operating properties	$	56,699	$	43,154	$	—		$	21,014	$	—	$	—	$	3,550	$	16,344	$	30		$	—	$	1,108	$	141,899
Segment assets at December 31, 2014	$	1,277,600	$	642,429	$	116,252		$	97,209	$	95,195	$	100,777	$	274,091	$	106,931	$	—		$	77,834	$	163,177	$	2,951,495
Year Ended December 31, 2013
Revenues from real estate operations	$	237,869	$	92,010	$	33,060		$	5,050	$	16,863	$	16,568	$	42,653	$	11,924	$	25,290		$	10,075	$	7,271	$	498,633
Property operating expenses	80,554		31,973		17,631			1,282		7,844		5,028		16,583		3,431		9,002			1,016		6,360		180,704
NOI from real estate operations	$	157,315	$	60,037	$	15,429		$	3,768	$	9,019	$	11,540	$	26,070	$	8,493	$	16,288		$	9,059	$	911	$	317,929
Additions to long-lived assets	$	28,087	$	13,090	$	335		$	3,563	$	2,604	$	2,341	$	2,913	$	406	$	2,940		$	—	$	598	$	56,877
Transfers from non-operating properties	$	50,105	$	61,434	$	—		$	48,799	$	—	$	14	$	360	$	28,034	$	5,438		$	—	$	70,106	$	264,290
Segment assets at December 31, 2013	$	1,243,099	$	616,082	$	118,299		$	77,773	$	98,962	$	96,143	$	303,823	$	104,657	$	—		$	80,002	$	166,790	$	2,905,630
Year Ended December 31, 2012
Revenues from real estate operations	$	238,488	$	79,574	$	32,018		$	3,867	$	16,697	$	16,392	$	52,616	$	9,698	$	24,987		$	12,116	$	6,647	$	493,100
Property operating expenses	83,050		29,103		16,499			689		7,555		4,745		19,917		2,562		9,231			2,569		4,815		180,735
NOI from real estate operations	$	155,438	$	50,471	$	15,519		$	3,178	$	9,142	$	11,647	$	32,699	$	7,136	$	15,756		$	9,547	$	1,832	$	312,365
Additions to long-lived assets	$	25,921	$	65,157	$	280		$	26	$	317	$	1,844	$	9,690	$	286	$	2,929		$	152	$	199	$	106,801
Transfers from non-operating properties	$	65,108	$	44,250	$	468		$	—	$	—	$	289	$	37,558	$	10,626	$	4,295		$	394	$	58,009	$	220,997
Segment assets at December 31, 2012	$	1,267,357	$	569,860	$	119,369		$	28,730	$	104,544	$	98,027	$	320,548	$	78,798	$	175,830		$	82,090	$	100,777	$	2,945,930

The following table reconciles our segment revenues to total revenues as reported on our consolidated statements of operations (in thousands):

	For the Years Ended December 31,
	2014		2013			2012
Segment revenues from real estate operations	$	479,711	$	498,633		$	493,100
Construction contract and other service revenues	106,748		62,363			73,836
Less: Revenues from discontinued operations (Note 20)	14		(37,636		)	(58,801		)
Total revenues	$	586,473	$	523,360		$	508,135

The following table reconciles our segment property operating expenses to property operating expenses as reported on our consolidated statements of operations (in thousands):

	For the Years Ended December 31,
	2014		2013			2012
Segment property operating expenses	$	179,799	$	180,704		$	180,735
Less: Property operating expenses from discontinued operations (Note 20)	135		(13,505		)	(21,529		)
Total property operating expenses	$	179,934	$	167,199		$	159,206

As previously discussed, we provide real estate services such as property management and construction and development services primarily for our properties but also for third parties.  The primary manner in which we evaluate the operating performance of our service activities is through a measure we define as net operating income from service operations (“NOI from service operations”), which is based on the net of revenues and expenses from these activities.  Construction contract and other service revenues and expenses consist primarily of subcontracted costs that are reimbursed to us by the customer along with a management fee. The operating margins from these activities are small relative to the revenue.  We believe NOI from service operations is a useful measure in assessing both our level of activity and our profitability in conducting such operations. The table below sets forth the computation of our NOI from service operations (in thousands):

	For the Years Ended December 31,
	2014			2013			2012
Construction contract and other service revenues	$	106,748		$	62,363		$	73,836
Construction contract and other service expenses	(100,058		)	(58,875		)	(70,576		)
NOI from service operations	$	6,690		$	3,488		$	3,260

The following table reconciles our NOI from real estate operations for reportable segments and NOI from service operations to income from continuing operations as reported on our consolidated statements of operations (in thousands):

	For the Years Ended December 31,
	2014			2013			2012
NOI from real estate operations	$	299,912		$	317,929		$	312,365
NOI from service operations	6,690			3,488			3,260
Interest and other income	4,923			3,834			7,172
Equity in income (loss) of unconsolidated entities	229			2,110			(546		)
Income tax expense	(310		)	(1,978		)	(381		)
Other adjustments:	—
Depreciation and other amortization associated with real estate operations	(136,086		)	(113,214		)	(107,998		)
Impairment losses	(1,416		)	(5,857		)	(43,678		)
General, administrative and leasing expenses	(31,794		)	(30,869		)	(31,900		)
Business development expenses and land carry costs	(5,573		)	(5,436		)	(5,711		)
Interest expense on continuing operations	(92,393		)	(82,010		)	(86,401		)
NOI from discontinued operations	(121		)	(24,131		)	(37,272		)
Loss on early extinguishment of debt	(9,552		)	(27,030		)	(943		)
COPT consolidated income from continuing operations	$	34,509		$	36,836		$	7,967

The following table reconciles our segment assets to the consolidated total assets of COPT and subsidiaries (in thousands):

	As of December 31,
	2014		2013
Segment assets	$	2,951,495	$	2,905,630
Non-operating property assets	567,586		517,564
Other assets	151,176		206,758
Total COPT consolidated assets	$	3,670,257	$	3,629,952

The accounting policies of the segments are the same as those used to prepare our consolidated financial statements, except that discontinued operations are not presented separately for segment purposes.  In the segment reporting presented above, we did not allocate interest expense, depreciation and amortization, impairment losses, loss on early extinguishment of debt and gain on sales of real estate to our real estate segments since they are not included in the measure of segment profit reviewed by management.  We also did not allocate general and administrative expenses, business development expenses and land carry costs, interest and other income, equity in income (loss) of unconsolidated entities, income taxes and noncontrolling interests because these items represent general corporate or non-operating property items not attributable to segments.