Segment Reporting

6 Months Ended

Jun. 30, 2021

Segment Reporting [Abstract]

Segment Reporting

Segment Reporting

The Company's reportable operating segments include Same Store, Other Stabilized, and Development/Redevelopment. Annually as of January 1, the Company determines which of its communities fall into each of these categories and generally maintains that classification throughout the year for the purpose of reporting segment operations, unless disposition or redevelopment plans regarding a community change. In addition, the Company owns land for future development and has other corporate assets that are not allocated to an operating segment.

The Company's segment disclosures present the measure(s) used by the chief operating decision maker for purposes of assessing each segment's performance. The Company's chief operating decision maker ("CODM") is comprised of several members of its executive management team who use net operating income ("NOI") as the primary financial measure for Same Store communities and Other Stabilized communities. NOI is defined by the Company as total property revenue less direct property operating expenses (including property taxes), and excluding corporate-level income (including management, development and other fees), corporate-level property management and other indirect operating expenses, expensed transaction, development and other pursuit costs, net of recoveries, interest expense, net, (gain) loss on extinguishment of debt, net, general and administrative expense, income from investments in unconsolidated entities, depreciation expense, corporate income tax (benefit) expense, casualty and impairment (gain) loss, net, gain on sale of communities, (gain) loss on other real estate transactions, net, net for-sale condominium activity and net operating income from real estate assets sold or held for sale. The CODM evaluates the Company's financial performance on a consolidated residential and commercial basis, as the Company's commercial results attributable to the non-apartment components of the Company's mixed-use communities and other nonresidential operations represents 1.5% and 0.5% of total NOI for the three months ended June 30, 2021 and 2020, respectively, and 1.5% and 1.1% for the six months ended June 30, 2021 and 2020, respectively. Although the Company considers NOI a useful measure of a community's or communities' operating performance, NOI should not be considered an alternative to net income or net cash flow from operating activities, as determined in accordance with GAAP. NOI excludes a number of income and expense categories as detailed in the reconciliation of NOI to net income.

A reconciliation of NOI to net income for the three and six months ended June 30, 2021 and 2020 is as follows (dollars in thousands):

	For the three months ended				For the six months ended
	6/30/2021		6/30/2020		6/30/2021		6/30/2020
Net income	$	447,977	$	170,869	$	590,211	$	338,875
Indirect operating expenses, net of corporate income	24,318		23,407		48,788		46,206
Expensed transaction, development and other pursuit costs, net of recoveries	1,653		388		1,483		3,722
Interest expense, net	56,104		53,399		108,717		109,313
Loss (gain) on extinguishment of debt, net	—		268		(122)		9,438
General and administrative expense	18,465		15,573		35,817		32,893
Income from investments in unconsolidated entities	(26,559)		(512)		(26,092)		(1,687)
Depreciation expense	184,472		176,249		367,769		354,160
Income tax expense (benefit)	10		(1,133)		(745)		(1,042)
Casualty and impairment loss	1,177		—		1,177		—
Gain on sale of communities	(334,569)		(35,295)		(388,296)		(59,731)
Gain on other real estate transactions, net	(32)		(156)		(459)		(199)
Net for-sale condominium activity	647		(1,348)		1,560		(4,808)
Net operating income from real estate assets sold or held for sale	(4,749)		(13,581)		(10,549)		(28,572)
Net operating income	$	368,914	$	388,128	$	729,259	$	798,568

The following is a summary of NOI from real estate assets sold or held for sale for the periods presented (dollars in thousands):

	For the three months ended				For the six months ended
	6/30/2021		6/30/2020		6/30/2021		6/30/2020
Rental income from real estate assets sold or held for sale	$	7,719	$	21,399	$	17,307	$	44,529
Operating expenses from real estate assets sold or held for sale	(2,970)		(7,818)		(6,758)		(15,957)
Net operating income from real estate assets sold or held for sale	$	4,749	$	13,581	$	10,549	$	28,572

The primary performance measure for communities under development or redevelopment depends on the stage of completion.  While under development, management monitors actual construction costs against budgeted costs as well as lease-up pace and rent levels compared to budget.

The following table provides details of the Company's segment information as of the dates specified (dollars in thousands). The segments are classified based on the individual community's status at January 1, 2021. Segment information for the three and six months ended June 30, 2021 and 2020 has been adjusted to exclude the real estate assets that were sold from January 1, 2020 through June 30, 2021, or otherwise qualify as held for sale as of June 30, 2021, as described in Note 6, "Real Estate Disposition Activities."

	For the three months ended				For the six months ended
	Total revenue		NOI		Total revenue		NOI		Gross real estate (1)
For the period ended June 30, 2021
Same Store
New England	$	74,259	$	47,895	$	147,577	$	94,163	$	2,772,638
Metro NY/NJ	105,355		70,944		210,304		142,584		4,114,155
Mid-Atlantic	82,232		54,823		163,460		110,083		3,485,698
Southeast Florida	7,706		4,557		14,948		8,746		395,009
Denver, CO	5,853		3,935		11,505		7,954		319,994
Pacific Northwest	26,935		18,298		53,548		36,192		1,054,701
Northern California	89,591		63,506		179,997		127,569		3,450,054
Southern California	108,710		73,364		215,801		145,899		4,373,247
Total Same Store	500,641		337,322		997,140		673,190		19,965,496
Other Stabilized	29,499		19,123		56,264		36,049		1,338,844
Development / Redevelopment	23,076		12,469		40,483		20,020		2,324,779
Land Held for Development	N/A		N/A		N/A		N/A		100,106
Non-allocated (2)	808		N/A		1,685		N/A		322,576
Total	$	554,024	$	368,914	$	1,095,572	$	729,259	$	24,051,801
For the period ended June 30, 2020
Same Store
New England	$	77,240	$	52,030	$	156,085	$	104,299	$	2,751,535
Metro NY/NJ	106,452		73,858		219,266		153,511		4,097,021
Mid-Atlantic	84,634		59,217		172,954		122,975		3,462,890
Southeast Florida	7,364		4,298		14,868		8,423		393,329
Denver, CO	5,166		3,326		10,335		6,666		318,833
Pacific Northwest	28,105		19,932		57,263		41,065		1,049,913
Northern California	103,867		79,384		210,744		161,263		3,427,805
Southern California	109,869		76,433		227,468		160,671		4,345,382
Total Same Store	522,697		368,478		1,068,983		758,873		19,846,708
Other Stabilized	24,642		16,055		49,673		32,552		1,209,541
Development / Redevelopment	7,368		3,595		14,181		7,143		1,614,237
Land Held for Development	N/A		N/A		N/A		N/A		39,829
Non-allocated (2)	299		N/A		690		N/A		407,361
Total	$	555,006	$	388,128	$	1,133,527	$	798,568	$	23,117,676

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(1)Does not include gross real estate assets held for sale or classified as held for sale subsequent to June 30, 2020 of $672,125.

(2)Revenue represents third-party management, accounting, and developer fees and miscellaneous income and other ancillary items which are not allocated to a reportable segment. Gross real estate includes the for-sale residential condominiums at The Park Loggia, as discussed in Note 6, "Real Estate Disposition Activities."