Business Segments

9 Months Ended

Sep. 30, 2015

Segment Reporting [Abstract]

Business Segments

Business Segments

We have two reportable segments: conventional real estate operations and affordable real estate operations. Our conventional real estate operations consist of market-rate apartment communities with rents paid by the residents and included 143 apartment communities with 41,429 apartment homes at September 30, 2015. Our affordable real estate operations consisted of 56 apartment communities with 8,685 apartment homes at September 30, 2015, with rents that are generally paid, in whole or part, by a government agency.

Due to the diversity of our economic ownership interests in our apartment communities, our chief executive officer, who is our chief operating decision maker, uses proportionate property net operating income to assess the operating performance of our apartment communities. Proportionate property net operating income reflects our share of rental and other property revenues less direct property operating expenses, including real estate taxes, for the consolidated and unconsolidated apartment communities that we own.

The following tables present the revenues, net operating income (loss) and income (loss) from continuing operations of our conventional and affordable real estate operations segments on a proportionate basis (excluding amounts related to apartment communities sold or classified as held for sale) for the three and nine months ended September 30, 2015 and 2014 (in thousands):

	Conventional Real Estate Operations		Affordable Real Estate Operations		Proportionate Adjustments (1)		Corporate and Amounts Not Allocated to Segments (2)			Consolidated
Three Months Ended September 30, 2015:
Rental and other property revenues	$	204,246	$	24,388	$	10,219	$	1,529		$	240,382
Tax credit and asset management revenues	—		—		—		6,005			6,005
Total revenues	204,246		24,388		10,219		7,534			246,387
Property operating expenses	68,456		9,631		3,434		7,100			88,621
Investment management expenses	—		—		—		1,905			1,905
Depreciation and amortization	—		—		—		77,237			77,237
General and administrative expenses	—		—		—		11,013			11,013
Other expenses, net	—		—		—		3,590			3,590
Total operating expenses	68,456		9,631		3,434		100,845			182,366
Net operating income (loss)	135,790		14,757		6,785		(93,311		)	64,021
Other items included in continuing operations	—		—		—		(40,252		)	(40,252		)
Income (loss) from continuing operations	$	135,790	$	14,757	$	6,785	$	(133,563	)	$	23,769

	Conventional Real Estate Operations		Affordable Real Estate Operations		Proportionate Adjustments (1)		Corporate and Amounts Not Allocated to Segments (2)			Consolidated
Three Months Ended September 30, 2014:
Rental and other property revenues	$	187,063	$	23,724	$	7,337	$	21,749		$	239,873
Tax credit and asset management revenues	—		—		—		6,970			6,970
Total revenues	187,063		23,724		7,337		28,719			246,843
Property operating expenses	63,869		9,274		2,422		19,675			95,240
Investment management expenses	—		—		—		1,279			1,279
Depreciation and amortization	—		—		—		69,437			69,437
Provision for real estate impairment losses	—		—		—		1,413			1,413
General and administrative expenses	—		—		—		10,658			10,658
Other expenses, net	—		—		—		1,349			1,349
Total operating expenses	63,869		9,274		2,422		103,811			179,376
Net operating income (loss)	123,194		14,450		4,915		(75,092		)	67,467
Other items included in continuing operations	—		—		—		(49,281		)	(49,281		)
Income (loss) from continuing operations	$	123,194	$	14,450	$	4,915	$	(124,373	)	$	18,186

	Conventional Real Estate Operations		Affordable Real Estate Operations		Proportionate Adjustments (1)		Corporate and Amounts Not Allocated to Segments (2)			Consolidated
Nine Months Ended September 30, 2015:
Rental and other property revenues	$	599,977	$	72,779	$	28,269	$	16,283		$	717,308
Asset management and tax credit revenues	—		—		—		18,127			18,127
Total revenues	599,977		72,779		28,269		34,410			735,435
Property operating expenses	200,660		28,965		10,274		32,144			272,043
Investment management expenses	—		—		—		4,594			4,594
Depreciation and amortization	—		—		—		226,819			226,819
General and administrative expenses	—		—		—		33,727			33,727
Other expenses, net	—		—		—		7,521			7,521
Total operating expenses	200,660		28,965		10,274		304,805			544,704
Net operating income (loss)	399,317		43,814		17,995		(270,395		)	190,731
Other items included in continuing operations	—		—		—		(124,598		)	(124,598		)
Income (loss) from continuing operations	$	399,317	$	43,814	$	17,995	$	(394,993	)	$	66,133

	Conventional Real Estate Operations		Affordable Real Estate Operations		Proportionate Adjustments (1)		Corporate and Amounts Not Allocated to Segments (2)			Consolidated
Nine Months Ended September 30, 2014:
Rental and other property revenues	$	546,381	$	70,717	$	21,704	$	80,699		$	719,501
Asset management and tax credit revenues	—		—		—		22,684			22,684
Total revenues	546,381		70,717		21,704		103,383			742,185
Property operating expenses	187,881		29,129		6,820		65,178			289,008
Investment management expenses	—		—		—		3,552			3,552
Depreciation and amortization	—		—		—		211,143			211,143
Provision for real estate impairment losses	—		—		—		1,413			1,413
General and administrative expenses	—		—		—		31,304			31,304
Other expenses, net	—		—		—		7,223			7,223
Total operating expenses	187,881		29,129		6,820		319,813			543,643
Net operating income (loss)	358,500		41,588		14,884		(216,430		)	198,542
Other items included in continuing operations	—		—		—		(150,373		)	(150,373		)
Income (loss) from continuing operations	$	358,500	$	41,588	$	14,884	$	(366,803	)	$	48,169

(1) Represents adjustments for the noncontrolling interests in consolidated real estate partnerships’ share of the results of our consolidated apartment communities and the results of consolidated apartment communities that we do not manage, which are excluded from our measurement of segment performance but included in the related consolidated amounts, and our share of the results of operations of our unconsolidated real estate partnerships that we manage, which are included in our measurement of segment performance but excluded from the related consolidated amounts.

(2) Our basis for assessing segment performance excludes the results of apartment communities sold or classified as held for sale. In the segment presentation above, the current year and prior year operating results for apartment communities sold or classified as held for sale during 2015 or 2014 are presented within the Corporate and Amounts Not Allocated to Segments column. Proportionate property net operating income, our key measurement of segment profit or loss, also excludes property management expenses and casualty gains and losses (which are included in property operating expenses) and depreciation and amortization. Accordingly, we do not allocate these amounts to our segments and they are presented within the Corporate and Amounts Not Allocated to Segments column.

For the nine months ended September 30, 2015 and 2014, capital additions related to our conventional segment totaled $258.7 million and $270.4 million, respectively, and capital additions related to our affordable segment totaled $6.5 million and $6.6 million, respectively.