Business Segments

6 Months Ended

Jun. 30, 2016

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 133 apartment communities with 38,699 apartment homes at June 30, 2016. Our affordable real estate operations consisted of 46 apartment communities with 7,610 apartment homes at June 30, 2016, 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 apartment communities that we own and manage. The following tables present the revenues, net operating income and income before gain on dispositions 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 six months ended June 30, 2016 and 2015 (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 June 30, 2016
Rental and other property revenues	$	202,896	$	25,682	$	7,337	$	6,956		$	242,871
Tax credit and asset management revenues	—		—		—		8,347			8,347
Total revenues	202,896		25,682		7,337		15,303			251,218
Property operating expenses	66,373		9,402		2,231		10,299			88,305
Investment management expenses	—		—		—		1,017			1,017
Depreciation and amortization	—		—		—		80,680			80,680
General and administrative expenses	—		—		—		11,254			11,254
Other expenses, net	—		—		—		5,526			5,526
Total operating expenses	66,373		9,402		2,231		108,776			186,782
Net operating income	136,523		16,280		5,106		(93,473		)	64,436
Other items included in income before gain on dispositions (3)	—		—		—		(35,024		)	(35,024		)
Income before gain on dispositions	$	136,523	$	16,280	$	5,106	$	(128,497	)	$	29,412

	Conventional Real Estate Operations		Affordable Real Estate Operations		Proportionate Adjustments (1)		Corporate and Amounts Not Allocated to Segments (2)			Consolidated
Three Months Ended June 30, 2015
Rental and other property revenues	$	191,602	$	23,389	$	7,187	$	16,459		$	238,637
Tax credit and asset management revenues	—		—		—		6,146			6,146
Total revenues	191,602		23,389		7,187		22,605			244,783
Property operating expenses	61,863		8,862		2,230		14,975			87,930
Investment management expenses	—		—		—		1,086			1,086
Depreciation and amortization	—		—		—		75,150			75,150
General and administrative expenses	—		—		—		12,062			12,062
Other expenses, net	—		—		—		2,912			2,912
Total operating expenses	61,863		8,862		2,230		106,185			179,140
Net operating income	129,739		14,527		4,957		(83,580		)	65,643
Other items included in income before gain on dispositions (3)	—		—		—		(41,736		)	(41,736		)
Income before gain on dispositions	$	129,739	$	14,527	$	4,957	$	(125,316	)	$	23,907

	Conventional Real Estate Operations		Affordable Real Estate Operations		Proportionate Adjustments (1)		Corporate and Amounts Not Allocated to Segments (2)			Consolidated
Six Months Ended June 30, 2016
Rental and other property revenues	$	403,851	$	49,781	$	14,831	$	15,889		$	484,352
Asset management and tax credit revenues	—		—		—		13,105			13,105
Total revenues	403,851		49,781		14,831		28,994			497,457
Property operating expenses	131,267		19,170		4,127		22,138			176,702
Investment management expenses	—		—		—		1,992			1,992
Depreciation and amortization	—		—		—		160,508			160,508
General and administrative expenses	—		—		—		23,189			23,189
Other expenses, net	—		—		—		7,096			7,096
Total operating expenses	131,267		19,170		4,127		214,923			369,487
Net operating income (loss)	272,584		30,611		10,704		(185,929		)	127,970
Other items included in income before gain on dispositions (3)	—		—		—		(74,860		)	(74,860		)
Income (loss) from continuing operations	$	272,584	$	30,611	$	10,704	$	(260,789	)	$	53,110

	Conventional Real Estate Operations		Affordable Real Estate Operations		Proportionate Adjustments (1)		Corporate and Amounts Not Allocated to Segments (2)			Consolidated
Six Months Ended June 30, 2015
Rental and other property revenues	$	379,073	$	46,836	$	14,120	$	36,897		$	476,926
Asset management and tax credit revenues	—		—		—		12,122			12,122
Total revenues	379,073		46,836		14,120		49,019			489,048
Property operating expenses	125,348		18,784		4,594		34,696			183,422
Investment management expenses	—		—		—		2,689			2,689
Depreciation and amortization	—		—		—		149,582			149,582
General and administrative expenses	—		—		—		22,714			22,714
Other expenses, net	—		—		—		3,931			3,931
Total operating expenses	125,348		18,784		4,594		213,612			362,338
Net operating income (loss)	253,725		28,052		9,526		(164,593		)	126,710
Other items included in income before gain on dispositions (3)	—		—		—		(84,346		)	(84,346		)
Income (loss) from continuing operations	$	253,725	$	28,052	$	9,526	$	(248,939	)	$	42,364

(1) Represents adjustments for the noncontrolling interests in consolidated real estate partnerships’ share of the results of our consolidated apartment communities, which are excluded from proportionate property net operating income but included in the related consolidated amounts.

(2) Includes operating results for consolidated communities that we do not manage and operating results for apartment communities sold or classified as held for sale during 2016 or 2015. Corporate and Amounts Not Allocated to Segments also includes property management revenues (which are included in consolidated rental and other property revenues), property management expenses and casualty gains and losses (which are included in consolidated property operating expenses) and depreciation and amortization, which are not part of our segment performance.

(3) Other items included in income before gain on dispositions primarily consist of interest expense and income tax benefit.

For the six months ended June 30, 2016 and 2015, capital additions related to our conventional segment totaled $162.5 million and $153.4 million, respectively, and capital additions related to our affordable segment totaled $4.3 million and $4.4 million, respectively.

The assets of our reportable segments on a proportionate basis, together with the proportionate adjustments to reconcile these amounts to the consolidated assets of our segments, and the consolidated assets not allocated to our segments are as follows (in thousands):

	June 30, 2016		December 31, 2015
Conventional	$	5,075,572	$	5,033,832
Affordable	400,372		409,165
Proportionate adjustments (1)	169,399		174,518
Corporate and other assets (2)	628,885		501,166
Total consolidated assets	$	6,274,228	$	6,118,681

(1) Represents adjustments for the noncontrolling interests in consolidated real estate partnerships’ share of the assets of our consolidated apartment communities that we manage, which are excluded from our measurement of segment financial condition.

(2) Our basis for assessing segment performance excludes the results of consolidated apartment communities that we do not manage and apartment communities sold or classified as held for sale. Accordingly, assets related to consolidated apartment communities that we do not manage and that were sold or classified as held for sale during 2016 are included within Corporate and other assets for comparative periods presented.