Business Segments

12 Months Ended

Dec. 31, 2011

Business Segments [Abstract]

Business Segments

NOTE 20 — 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 apartments with rents paid by the resident and included 198 properties with 62,834 units as of December 31, 2011. Our affordable real estate operations consisted of 172 properties with 20,612 units as of December 31, 2011, with rents that are generally paid, in whole or part, by a government agency.

Our chief operating decision maker uses various generally accepted industry financial measures to assess the performance and financial condition of the business, including: Net Asset Value, which is the estimated fair value of our assets, net of liabilities and preferred equity; Pro forma Funds From Operations, which is Funds From Operations excluding preferred equity redemption related amounts; Adjusted Funds From Operations, which is Pro forma Funds From Operations less spending for Capital Replacements; property net operating income, which is rental and other property revenues less direct property operating expenses, including real estate taxes; proportionate property net operating income, which reflects our share of property net operating income of our consolidated and unconsolidated properties; same store property operating results; Free Cash Flow, which is net operating income less spending for Capital Replacements; Free Cash Flow internal rate of return; financial coverage ratios; and leverage as shown on our balance sheet. Our chief operating decision maker emphasizes proportionate property net operating income as a key measurement of segment profit or loss.

The following tables present the revenues, expenses, net operating income (loss) and income (loss) from continuing operations of our conventional and affordable real estate operations segments on a proportionate basis for the years ended December 31, 2011, 2010 and 2009 (in thousands):

		September 30,		September 30,		September 30,		September 30,			September 30,
	Conventional Real Estate Operations		Affordable Real  Estate Operations		Proportionate Adjustments (1)		Corporate and Amounts Not Allocated to Segments			Consolidated
Year Ended December 31, 2011:
Rental and other property revenues (2)	$	806,409	$	122,898	$	110,422	$	1,194		$	1,040,923
Asset management and tax credit revenues		—		—		—		38,661			38,661
Total revenues		806,409		122,898		110,422		39,855			1,079,584
Property operating expenses (2)		300,258		51,025		45,696		53,003			449,982
Investment management expenses		—		—		—		10,415			10,415
Depreciation and amortization (2)		—		—		—		378,043			378,043
Provision for operating real estate impairment losses (2)		—		—		—		4,331			4,331
General and administrative expenses		—		—		—		50,950			50,950
Other expenses, net		—		—		—		19,576			19,576
Total operating expenses		300,258		51,025		45,696		516,318			913,297
Net operating income (loss)		506,151		71,873		64,726		(476,463	)		166,287
Other items included in continuing operations		—		—		—		(308,387	)		(308,387	)
Income (loss) from continuing operations	$	506,151	$	71,873	$	64,726	$	(784,850	)	$	(142,100	)
Year Ended December 31, 2010:
Rental and other property revenues (2)	$	789,210	$	117,932	$	110,314	$	2,775		$	1,020,231
Asset management and tax credit revenues		—		—		—		35,630			35,630
Total revenues		789,210		117,932		110,314		38,405			1,055,861
Property operating expenses (2)		303,572		52,612		48,940		55,871			460,995
Investment management expenses		—		—		—		14,487			14,487
Depreciation and amortization (2)		—		—		—		397,740			397,740
Provision for operating real estate impairment losses (2)		—		—		—		65			65
General and administrative expenses		—		—		—		53,365			53,365
Other expenses, net		—		—		—		9,697			9,697
Total operating expenses		303,572		52,612		48,940		531,225			936,349
Net operating income (loss)		485,638		65,320		61,374		(492,820	)		119,512
Other items included in continuing operations		—		—		—		(283,042	)		(283,042	)
Income (loss) from continuing operations	$	485,638	$	65,320	$	61,374	$	(775,862	)	$	(163,530	)

		September 30,		September 30,		September 30,		September 30,			September 30,
	Conventional Real Estate Operations		Affordable Real Estate Operations		Proportionate Adjustments (1)		Corporate and Amounts Not Allocated to Segments			Consolidated
Year Ended December 31, 2009:
Rental and other property revenues (2)	$	783,230	$	114,522	$	95,045	$	5,053		$	997,850
Asset management and tax credit revenues		—		—		—		49,852			49,852
Total revenues		783,230		114,522		95,045		54,905			1,047,702
Property operating expenses (2)		307,042		52,338		42,469		62,801			464,650
Investment management expenses		—		—		—		15,780			15,780
Depreciation and amortization (2)		—		—		—		402,035			402,035
Provision for operating real estate impairment losses (2)		—		—		—		760			760
General and administrative expenses		—		—		—		56,643			56,643
Other expenses, net		—		—		—		14,191			14,191
Restructuring costs		—		—		—		11,241			11,241
Total operating expenses		307,042		52,338		42,469		563,451			965,300
Net operating income (loss)		476,188		62,184		52,576		(508,546	)		82,402
Other items included in continuing operations		—		—		—		(279,907	)		(279,907	)
Income (loss) from continuing operations	$	476,188	$	62,184	$	52,576	$	(788,453	)	$	(197,505	)

(1) Represents adjustments for the noncontrolling interests in consolidated real estate partnerships’ share of the results of our consolidated properties, 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, which are included in our measurement of segment performance but excluded from the related consolidated amounts.

(2) Our chief operating decision maker assesses the performance of our conventional and affordable real estate operations using, among other measures, proportionate property net operating income, which excludes depreciation and amortization, provision for operating real estate impairment losses, property management revenues (which are included in rental and other property revenues) and property management expenses and casualty gains and losses (which are included in property operating expenses). Accordingly, we do not allocate these amounts to our segments.

During the years ended December 31, 2011, 2010 and 2009, for continuing operations, our rental revenues include $110.5 million, $107.6 million and $104.1 million, respectively, of subsidies from government agencies, which exceeded 10% of the combined revenues of our conventional and affordable segments for each of the years presented.

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):

		September 30,		September 30,
	2011		2010
Conventional	$	5,031,864	$	5,492,437
Affordable		683,307		886,874
Proportionate adjustments (1)		645,385		555,079
Corporate and other assets		511,306		444,176
Total consolidated assets	$	6,871,862	$	7,378,566

(1) Represents adjustments for the noncontrolling interests in consolidated real estate partnerships’ share of the assets of our consolidated properties, which are excluded from our measurement of segment financial condition, and our share of the assets of our unconsolidated real estate partnerships, which are included in our measure of segment financial condition.

For the years ended December 31, December 31, 2011, 2010 and 2009, capital additions related to our conventional segment totaled $191.6 million, $140.1 million and $208.0 million, respectively, and capital additions related to our affordable segment totaled $15.6 million, $35.2 million and $67.4 million, respectively.