13.	Reportable Segments

Operating segments are defined as components of an enterprise that engage in business activities from which they may earn revenues and incur expenses and about which discrete financial information is available that is evaluated regularly by the chief operating decision maker. The chief operating decision maker decides how resources are allocated and assesses performance on a recurring basis at least quarterly.

The Company’s primary business is the acquisition, development and management of multifamily residential properties, which includes the generation of rental and other related income through the leasing of apartment units to residents. The chief operating decision maker evaluates the Company's operating performance geographically by market and both on a same store and non-same store basis. The Company’s same store operating segments located in its coastal markets represent its reportable segments. The Company's operating segments located in its other markets (Phoenix) that are not material have also been included in the tables presented below.

The Company’s fee and asset management and development activities are other business activities that do not constitute an operating segment and as such, have been aggregated in the "Other" category in the tables presented below.

All revenues are from external customers and there is no customer who contributed 10% or more of the Company’s total revenues during the six months and quarters ended June 30, 2017 and 2016, respectively.

The primary financial measure for the Company’s rental real estate segment is net operating income (“NOI”), which represents rental income less: 1) property and maintenance expense and 2) real estate taxes and insurance expense (all as reflected in the accompanying consolidated statements of operations and comprehensive income). The Company believes that NOI is helpful to investors as a supplemental measure of its operating performance because it is a direct measure of the actual operating results of the Company’s apartment properties. Revenues for all leases are reflected on a straight-line basis in accordance with GAAP for the current and comparable periods.

The following table presents a reconciliation of NOI from our rental real estate specific to continuing operations for the six months and quarters ended June 30, 2017 and 2016, respectively (amounts in thousands):

	Six Months Ended June 30,						Quarter Ended June 30,
	2017			2016			2017			2016
Rental income	$	1,216,219		$	1,211,104		$	612,299		$	594,939
Property and maintenance expense		(201,924	)		(205,472	)		(99,316	)		(96,307	)
Real estate taxes and insurance expense		(169,231	)		(157,611	)		(87,503	)		(77,415	)
Total operating expenses		(371,155	)		(363,083	)		(186,819	)		(173,722	)
Net operating income	$	845,064		$	848,021		$	425,480		$	421,217

The following tables present NOI for each segment from our rental real estate specific to continuing operations for the six months and quarters ended June 30, 2017 and 2016, respectively, as well as total assets and capital expenditures at June 30, 2017 (amounts in thousands):

	Six Months Ended June 30, 2017							Six Months Ended June 30, 2016
	Rental Income		Operating Expenses		NOI			Rental Income		Operating Expenses		NOI
Same store (1)
Los Angeles	$	195,685	$	56,725	$	138,960		$	188,764	$	54,533	$	134,231
San Diego		45,319		12,073		33,246			43,346		11,698		31,648
Orange County		43,654		10,856		32,798			41,551		10,167		31,384
Subtotal - Southern California		284,658		79,654		205,004			273,661		76,398		197,263

Washington DC		213,544		64,585		148,959			210,540		62,371		148,169
New York		229,462		84,309		145,153			229,454		79,746		149,708
San Francisco		188,483		45,532		142,951			183,915		44,929		138,986
Boston		113,474		31,186		82,288			111,749		30,908		80,841
Seattle		87,825		24,646		63,179			82,618		23,218		59,400
Other Markets		924		340		584			885		292		593
Total same store		1,118,370		330,252		788,118			1,092,822		317,862		774,960

Non-same store/other (2) (3)
Non-same store		92,408		34,678		57,730			46,064		17,225		28,839
Other (3)		5,441		6,225		(784	)		72,218		27,996		44,222
Total non-same store/other		97,849		40,903		56,946			118,282		45,221		73,061

Totals	$	1,216,219	$	371,155	$	845,064		$	1,211,104	$	363,083	$	848,021

(1)	For the six months ended June 30, 2017 and 2016, same store primarily includes all properties acquired or completed that were stabilized prior to January 1, 2016, less properties subsequently sold, which represented 70,400 apartment units.

(2)	For the six months ended June 30, 2017 and 2016, non-same store primarily includes properties acquired after January 1, 2016, plus any properties in lease-up and not stabilized as of January 1, 2016.

(3)	Other includes development, other corporate operations and operations prior to sale for properties sold from 2014 through 2017 that do not meet the discontinued operations criteria.

	Quarter Ended June 30, 2017						Quarter Ended June 30, 2016
	Rental Income		Operating Expenses		NOI		Rental Income		Operating Expenses		NOI
Same store (1)
Los Angeles	$	100,360	$	28,731	$	71,629	$	96,930	$	27,877	$	69,053
San Diego		22,760		6,010		16,750		21,876		5,862		16,014
Orange County		21,999		5,385		16,614		21,028		5,025		16,003
Subtotal - Southern California		145,119		40,126		104,993		139,834		38,764		101,070

New York		120,775		43,320		77,455		120,846		40,723		80,123
Washington DC		107,102		32,252		74,850		106,246		30,909		75,337
San Francisco		94,475		22,780		71,695		92,553		22,502		70,051
Boston		57,097		15,432		41,665		56,089		15,273		40,816
Seattle		46,333		12,993		33,340		43,547		12,167		31,380
Other Markets		461		144		317		449		140		309
Total same store		571,362		167,047		404,315		559,564		160,478		399,086

Non-same store/other (2) (3)
Non-same store		36,824		15,923		20,901		17,533		6,392		11,141
Other (3)		4,113		3,849		264		17,842		6,852		10,990
Total non-same store/other		40,937		19,772		21,165		35,375		13,244		22,131

Totals	$	612,299	$	186,819	$	425,480	$	594,939	$	173,722	$	421,217

(1)	For the quarters ended June 30, 2017 and 2016, same store primarily includes all properties acquired or completed that were stabilized prior to April 1, 2016, less properties subsequently sold, which represented 71,354 apartment units.

(2)	For the quarters ended June 30, 2017 and 2016, non-same store primarily includes properties acquired after April 1, 2016, plus any properties in lease-up and not stabilized as of April 1, 2016.

(3)	Other includes development, other corporate operations and operations prior to sale for properties sold from 2014 through 2017 that do not meet the discontinued operations criteria.

	Six Months Ended June 30,
	Total Assets		Capital Expenditures
Same store (1)
Los Angeles	$	2,641,868	$	11,677
San Diego		464,432		2,725
Orange County		331,904		3,801
Subtotal - Southern California		3,438,204		18,203

Washington DC		3,861,391		17,474
New York		4,226,200		14,585
San Francisco		2,493,666		17,039
Boston		1,679,537		10,559
Seattle		1,177,985		8,804
Other Markets		12,783		46
Total same store		16,889,766		86,710

Non-same store/other (2) (3)
Non-same store		2,403,684		2,208
Other (3)		1,343,125		379
Total non-same store/other		3,746,809		2,587

Totals	$	20,636,575	$	89,297

(1)	Same store primarily includes all properties acquired or completed that were stabilized prior to January 1, 2016, less properties subsequently sold, which represented 70,400 apartment units.

(2)	Non-same store primarily includes properties acquired after January 1, 2016, plus any properties in lease-up and not stabilized as of January 1, 2016.

(3)	Other includes development, other corporate operations and capital expenditures for properties sold.