Business Segments

9 Months Ended

Sep. 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 130 apartment communities with 37,772 apartment homes at September 30, 2016. Our affordable real estate operations consisted of 46 apartment communities with 7,610 apartment homes at September 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 nine months ended September 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 September 30, 2016
Rental and other property revenues	$	203,532	$	25,368	$	7,311	$	7,904		$	244,115
Tax credit and asset management revenues	—		—		—		4,789			4,789
Total revenues	203,532		25,368		7,311		12,693			248,904
Property operating expenses	66,888		9,869		2,269		12,497			91,523
Investment management expenses	—		—		—		938			938
Depreciation and amortization	—		—		—		84,848			84,848
General and administrative expenses	—		—		—		11,320			11,320
Other expenses, net	—		—		—		1,543			1,543
Total operating expenses	66,888		9,869		2,269		111,146			190,172
Net operating income	136,644		15,499		5,042		(98,453		)	58,732
Other items included in income before gain on dispositions (3)	—		—		—		(43,194		)	(43,194		)
Income before gain on dispositions	$	136,644	$	15,499	$	5,042	$	(141,647	)	$	15,538

	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	$	190,702	$	23,610	$	7,552	$	18,518		$	240,382
Tax credit and asset management revenues	—		—		—		6,005			6,005
Total revenues	190,702		23,610		7,552		24,523			246,387
Property operating expenses	63,482		9,383		2,279		13,477			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	63,482		9,383		2,279		107,222			182,366
Net operating income	127,220		14,227		5,273		(82,699		)	64,021
Other items included in income before gain on dispositions (3)	—		—		—		(40,252		)	(40,252		)
Income before gain on dispositions	$	127,220	$	14,227	$	5,273	$	(122,951	)	$	23,769

	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, 2016
Rental and other property revenues	$	597,239	$	75,149	$	22,046	$	34,033		$	728,467
Asset management and tax credit revenues	—		—		—		17,894			17,894
Total revenues	597,239		75,149		22,046		51,927			746,361
Property operating expenses	194,690		29,042		6,363		38,130			268,225
Investment management expenses	—		—		—		2,930			2,930
Depreciation and amortization	—		—		—		245,356			245,356
General and administrative expenses	—		—		—		34,509			34,509
Other expenses, net	—		—		—		8,639			8,639
Total operating expenses	194,690		29,042		6,363		329,564			559,659
Net operating income (loss)	402,549		46,107		15,683		(277,637		)	186,702
Other items included in income before gain on dispositions (3)	—		—		—		(118,054		)	(118,054		)
Income before gain on dispositions	$	402,549	$	46,107	$	15,683	$	(395,691	)	$	68,648

	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	$	559,973	$	70,446	$	21,584	$	65,305		$	717,308
Asset management and tax credit revenues	—		—		—		18,127			18,127
Total revenues	559,973		70,446		21,584		83,432			735,435
Property operating expenses	185,408		28,166		6,841		51,628			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	185,408		28,166		6,841		324,289			544,704
Net operating income (loss)	374,565		42,280		14,743		(240,857		)	190,731
Other items included in income before gain on dispositions (3)	—		—		—		(124,598		)	(124,598		)
Income before gain on dispositions	$	374,565	$	42,280	$	14,743	$	(365,455	)	$	66,133

(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 for our segment evaluation 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 nine months ended September 30, 2016 and 2015, capital additions related to our conventional segment totaled $245.7 million and $258.7 million, respectively, and capital additions related to our affordable segment totaled $6.4 million and $6.5 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):

	September 30, 2016		December 31, 2015
Conventional	$	5,365,047	$	4,979,504
Affordable	394,086		409,165
Proportionate adjustments (1)	172,111		174,202
Corporate and other assets (2)	362,603		555,810
Total consolidated assets	$	6,293,847	$	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.