Business Segments

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 is defined as our share of rental and other property revenue less our share of property operating expenses, including real estate taxes, for consolidated apartment communities we own and manage. Beginning in 2018, we exclude from rental and other property revenues the amount of utilities cost reimbursed by residents and reflect such amount as a reduction of the related utility expense within property operating expenses in our evaluation of segment results. In our consolidated statements of operation, utility reimbursements are included in rental and other property revenues, in accordance with GAAP. The 2017 and 2016 tables below have been revised to conform to this presentation.

Apartment communities are classified as either part of our Real Estate portfolio or, prior to the sale in July 2018, those owned through partnerships served by our Asset Management business. As of December 31, 2018, for segment performance evaluation, our Real Estate segment included 130 consolidated apartment communities with 36,407 apartment homes and excluded four apartment communities with 142 apartment homes that we neither manage nor consolidate.

Prior to the July 2018 sale of our Asset Management business, we consolidated certain partnerships in which we held nominal positions. These partnerships own low-income housing tax credit apartment communities. Neither the results of operations nor the assets of these partnerships and apartment communities were quantitatively material during our period of ownership; therefore, we have one reportable segment, Real Estate.

The following tables present the revenues, net operating income and income before gain on dispositions of our Real Estate segment on a proportionate basis and excluding amounts related to apartment communities sold or classified as held for sale as of December 31, 2018 for the years ended December 31, 2018, 2017 and 2016 (in thousands):



	Real Estate		Proportionate and Other Adjustments (1)		Corporate and Amounts Not Allocated to Reportable Segment (2)		Consolidated
Year Ended December 31, 2018:
Rental and other property revenues attributable to Real Estate	$	854,240	$	34,282	$	34,071	$	922,593
Rental and other property revenues of partnerships served by Asset Management business	—		—		42,830		42,830
Tax credit and transaction revenues	—		—		6,987		6,987
Total revenues	854,240		34,282		83,888		972,410
Property operating expenses attributable to Real Estate	238,860		32,169		36,872		307,901
Property operating expenses of partnerships served by Asset Management business	—		—		20,921		20,921
Other operating expenses not allocated to reportable segment (3)	—		—		427,832		427,832
Total operating expenses	238,860		32,169		485,625		756,654
Proportionate property net operating income	615,380		—		—		—
Other items included in income before income tax benefit (4)	—		—		487,820		487,820
Income before income tax benefit	$	615,380	$	2,113	$	86,083	$	703,576



	Real Estate		Proportionate and Other Adjustments (1)		Corporate and Amounts Not Allocated to Reportable Segment (2)			Consolidated
Year Ended December 31, 2017:
Rental and other property revenues attributable to Real Estate	$	781,194	$	43,043	$	93,911		$	918,148
Rental and other property revenues of partnerships served by Asset Management business	—		—		74,046			74,046
Tax credit and transaction revenues	—		—		13,243			13,243
Total revenues	781,194		43,043		181,200			1,005,437
Property operating expenses attributable to Real Estate	222,731		32,432		63,963			319,126
Property operating expenses of partnerships served by Asset Management business	—		—		35,458			35,458
Other operating expenses not allocated to reportable segment (3)	—		—		456,870			456,870
Total operating expenses	222,731		32,432		556,291			811,454
Proportionate property net operating income	558,463		—		—			—
Other items included in income before income tax benefit (4)	—		—		122,260			122,260
Income before income tax benefit	$	558,463	$	10,611	$	(252,831	)	$	316,243



	Real Estate		Proportionate and Other Adjustments (1)		Corporate and Amounts Not Allocated to Reportable Segment (2)			Consolidated
Year Ended December 31, 2016:
Rental and other property revenues attributable to Real Estate	$	720,302	$	55,257	$	124,332		$	899,891
Rental and other property revenues of partnerships served by Asset Management business	—		—		74,640			74,640
Tax credit and transaction revenues	—		—		21,323			21,323
Total revenues	720,302		55,257		220,295			995,854
Property operating expenses attributable to Real Estate	210,426		35,468		72,063			317,957
Property operating expenses of partnerships served by Asset Management business	—		—		36,956			36,956
Other operating expenses not allocated to reportable segment (3)	—		—		394,145			394,145
Total operating expenses	210,426		35,468		503,164			749,058
Proportionate property net operating income	509,876		—		—			—
Other items included in income before income tax benefit (4)	—		—		217,635			217,635
Income before income tax benefit	$	509,876	$	19,789	$	(65,234	)	$	464,431

(1)

Represents adjustments for the noncontrolling interests in consolidated real estate partnerships’ share of the results of consolidated apartment communities in our Real Estate segment, which are included in the related consolidated amounts, but excluded from proportionate property net operating income for our segment evaluation. Also includes the reclassification of utility reimbursements from revenues to property operating expenses for the purpose of evaluating segment results. Utility reimbursements are included in rental and other property revenues in our consolidated statements of operations prepared in accordance with GAAP.

(2)

Includes the operating results of apartment communities sold during the periods shown or held for sale at the end of the period, if any, and the operating results of apartment communities owned by consolidated partnerships served by our Asset Management business prior to its sale in July 2018. Corporate and Amounts Not Allocated to Reportable Segment also includes property management expenses and casualty gains and losses, which are included in consolidated property operating expenses and are not part of our segment performance measure.


(3)	Other operating expenses not allocated to reportable segment consists of depreciation and amortization, general and administrative expenses and other operating expenses including provision for real estate impairment loss, which are not included in our measure of segment performance.


(4)	Other items included in income before income tax benefit primarily consists of gain on dispositions of real estate and interest expense.

The assets of our reportable segment and the consolidated assets not allocated to our segment are as follows (in thousands):



	December 31,
	2018		2017
Real Estate	$	5,849,638	$	5,346,390
Corporate and other assets (1)	340,366		732,650
Total consolidated assets	$	6,190,004	$	6,079,040


(1)	Includes the assets not allocated to our reportable segment, primarily corporate assets, and assets of apartment communities and the Asset Management business, which were sold or classified as held for sale as of December 31, 2018.

For the years ended December 31, 2018, 2017 and 2016, capital additions related to our Real Estate segment totaled $338.8 million, $321.9 million and $312.8 million, respectively.