v2.4.0.6

Segment Reporting | 12 Months Ended
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Dec. 31, 2012
Segment Reporting |
Segment Reporting | 8. Segment Reporting The Company's reportable operating segments are Established Communities, Other Stabilized Communities, and Development/Redevelopment Communities. Annually as of January 1st, the Company determines which of its communities fall into each of these categories and maintains that classification, unless disposition or redevelopment plans regarding a community change, throughout the year for the purpose of reporting segment operations. • Established Communities (also known as Same Store Communities) are communities where a comparison of operating results from the prior year to the current year is meaningful, as these communities were owned and had stabilized occupancy and operating expenses as of the beginning of the prior year. For the year 2012, the Established Communities are communities that are consolidated for financial reporting purposes, had stabilized occupancy and operating expenses as of January 1, 2011, are not conducting or planning to conduct substantial redevelopment activities and are not held for sale or planned for disposition within the current year. A community is considered to have stabilized occupancy at the earlier of (i) attainment of 95% physical occupancy or (ii) the one-year anniversary of completion of development or redevelopment. • Other Stabilized Communities includes all other completed communities that have stabilized occupancy, as defined above. Other Stabilized Communities do not include communities that are conducting or planning to conduct substantial redevelopment activities within the current year. • Development/Redevelopment Communities consists of communities that are under construction and have not received a final certificate of occupancy, communities where the Company owns a majority interest and where substantial redevelopment is in progress or is planned to begin during the current year and communities under lease-up that had not reached stabilized occupancy, as defined above, as of January 1, 2012. In addition, the Company owns land for future development and has other corporate assets that are not allocated to an operating segment. The Company's segment disclosures present the measure(s) used by the chief operating decision maker for purposes of assessing each segment's performance. The Company's chief operating decision maker is comprised of several members of its executive management team who use net operating income ("NOI") as the primary financial measure for Established Communities and Other Stabilized Communities. NOI is defined by the Company as total revenue less direct property operating expenses. Although the Company considers NOI a useful measure of a community's or communities' operating performance, NOI should not be considered an alternative to net income or net cash flow from operating activities, as determined in accordance with GAAP. NOI excludes a number of income and expense categories as detailed in the reconciliation of NOI to net income. A reconciliation of NOI to net income for years ended December 31, 2012, 2011 and 2010 is as follows (dollars in thousands):
|  | For the year ended |
--- | --- | --- | ---
|  | 12-31-12 |  | 12-31-11 |  | 12-31-10 |
Net income |  | $ | 423,562 |  | $ | 441,370 |  | $ | 174,079 |
Indirect operating expenses, net of corporate income |  |  | 31,911 |  |  | 30,550 |  |  | 30,246 |
Investments and investment management expense |  |  | 6,071 |  |  | 5,126 |  |  | 3,824 |
Expensed acquisition, development and other pursuit costs |  |  | 11,350 |  |  | 2,967 |  |  | 2,741 |
Interest expense, net |  |  | 136,920 |  |  | 167,814 |  |  | 169,997 |
(Gain) loss on extinguishment of debt, net |  |  | 1,179 |  |  | 1,940 |  |  | — |
General and administrative expense |  |  | 34,101 |  |  | 29,371 |  |  | 26,846 |
Equity in income of unconsolidated entities |  |  | (20,914 | ) |  | (5,120 | ) |  | (762 | )
Depreciation expense |  |  | 256,026 |  |  | 239,060 |  |  | 220,563 |
Casualty and impairment loss |  |  | 1,449 |  |  | 14,052 |  |  | — |
Gain on sale of real estate assets |  |  | (146,591 | ) |  | (294,806 | ) |  | (74,074 | )
Income from discontinued operations |  |  | (12,495 | ) |  | (7,880 | ) |  | (7,950 | )
Gain on acquisition of unconsolidated real estate entity |  |  | (14,194 | ) |  | — |  |  | — |
Net operating income |  | $ | 708,375 |  | $ | 624,444 |  | $ | 545,510 |
The primary performance measure for communities under development or redevelopment depends on the stage of completion. While under development, management monitors actual construction costs against budgeted costs as well as lease-up pace and rent levels compared to budget. The following table provides details of the Company's segment information as of the dates specified (dollars in thousands). The segments are classified based on the individual community's status as of the beginning of the given calendar year. Therefore, each year the composition of communities within each business segment is adjusted. Accordingly, the amounts between years are not directly comparable. Segment information for the years ended December 31, 2012, 2011 and 2010 have been adjusted for the real estate assets that were sold from January 1, 2010 through December 31, 2012, or otherwise qualify as discontinued operations as of December 31, 2012, as described in Note 6, "Real Estate Disposition Activities."
|  | Total revenue |  | NOI |  | % NOI change from prior year |  | Gross real estate(1) |
--- | --- | --- | --- | --- | --- | --- | --- | --- | ---
For the period ended December 31, 2012 |  |  |  |  |  |  |  |  |  |  |  |  |
Established |  |  |  |  |  |  |  |  |  |  |  |  |
New England |  | $ | 168,260 |  | $ | 109,301 |  |  | 4.9 | % | $ | 1,289,604 |
Metro NY/NJ |  |  | 229,624 |  |  | 160,026 |  |  | 7.3 | % |  | 1,947,668 |
Mid-Atlantic |  |  | 103,784 |  |  | 75,313 |  |  | 6.9 | % |  | 591,669 |
Pacific Northwest |  |  | 32,942 |  |  | 23,433 |  |  | 15.0 | % |  | 306,289 |
Northern California |  |  | 129,493 |  |  | 94,915 |  |  | 14.0 | % |  | 1,181,395 |
Southern California |  |  | 99,302 |  |  | 68,880 |  |  | 7.0 | % |  | 947,743 |
Total Established(2) |  |  | 763,405 |  |  | 531,868 |  |  | 7.6 | % |  | 6,264,368 |
Other Stabilized |  |  | 135,231 |  |  | 86,722 |  |  | n/a |  |  | 1,314,690 |
Development / Redevelopment |  |  | 129,767 |  |  | 89,785 |  |  | n/a |  |  | 2,032,277 |
Land Held for Future Development |  |  | n/a |  |  | n/a |  |  | n/a |  |  | 316,037 |
Non-allocated(3) |  |  | 10,257 |  |  | n/a |  |  | n/a |  |  | 73,724 |
Total |  | $ | 1,038,660 |  | $ | 708,375 |  |  | 14.2 | % | $ | 10,001,096 |
For the period ended December 31, 2011 |  |  |  |  |  |  |  |  |  |  |  |  |
Established |  |  |  |  |  |  |  |  |  |  |  |  |
New England |  | $ | 169,939 |  | $ | 109,048 |  |  | 9.6 | % | $ | 1,302,368 |
Metro NY/NJ |  |  | 195,652 |  |  | 131,605 |  |  | 6.6 | % |  | 1,534,923 |
Mid-Atlantic |  |  | 102,834 |  |  | 74,756 |  |  | 6.6 | % |  | 603,345 |
Pacific Northwest |  |  | 30,057 |  |  | 20,374 |  |  | 6.0 | % |  | 301,662 |
Northern California |  |  | 95,209 |  |  | 68,173 |  |  | 10.9 | % |  | 869,254 |
Southern California |  |  | 75,120 |  |  | 50,391 |  |  | 9.8 | % |  | 697,705 |
Total Established(2) |  |  | 668,811 |  |  | 454,347 |  |  | 8.3 | % |  | 5,309,257 |
Other Stabilized |  |  | 137,779 |  |  | 89,949 |  |  | n/a |  |  | 1,567,875 |
Development / Redevelopment |  |  | 119,841 |  |  | 80,148 |  |  | n/a |  |  | 1,752,006 |
Land Held for Future Development |  |  | n/a |  |  | n/a |  |  | n/a |  |  | 325,918 |
Non-allocated(3) |  |  | 9,656 |  |  | n/a |  |  | n/a |  |  | 78,161 |
Total |  | $ | 936,087 |  | $ | 624,444 |  |  | 14.5 | % | $ | 9,033,217 |
For the period ended December 31, 2010 |  |  |  |  |  |  |  |  |  |  |  |  |
Established |  |  |  |  |  |  |  |  |  |  |  |  |
New England |  | $ | 143,564 |  | $ | 89,712 |  |  | (0.3 | )% | $ | 1,109,016 |
Metro NY/NJ |  |  | 181,639 |  |  | 121,033 |  |  | (1.5 | )% |  | 1,386,850 |
Mid-Atlantic |  |  | 91,927 |  |  | 65,737 |  |  | 1.0 | % |  | 545,190 |
Pacific Northwest |  |  | 19,045 |  |  | 12,426 |  |  | (10.7 | )% |  | 176,940 |
Northern California |  |  | 111,474 |  |  | 76,362 |  |  | (6.4 | )% |  | 1,056,111 |
Southern California |  |  | 58,888 |  |  | 37,703 |  |  | (6.7 | )% |  | 470,162 |
Total Established(2) |  |  | 606,537 |  |  | 402,973 |  |  | (2.6 | )% |  | 4,744,269 |
Other Stabilized |  |  | 122,403 |  |  | 74,609 |  |  | n/a |  |  | 1,580,910 |
Development / Redevelopment |  |  | 106,526 |  |  | 67,928 |  |  | n/a |  |  | 1,670,398 |
Land Held for Future Development |  |  | n/a |  |  | n/a |  |  | n/a |  |  | 184,150 |
Non-allocated(3) |  |  | 7,354 |  |  | n/a |  |  | n/a |  |  | 82,806 |
Total |  | $ | 842,820 |  | $ | 545,510 |  |  | 4.6 | % | $ | 8,262,533 |
(1) Does not include gross real estate assets held for sale of $70,246, $255,274 and $398,679 as of December 31, 2012, December 31, 2011 and December 31, 2010 respectively. (2) Gross real estate for the Company's established communities includes capitalized additions of approximately $25,448, $34,359 and $38,670 in 2012, 2011 and 2010, respectively. (3) Revenue represents third-party management, accounting, and developer fees and miscellaneous income which are not allocated to a reportable segment.

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- Definition The entire disclosure for reporting segments including data and tables. Reportable segments include those that meet any of the following quantitative thresholds a) it's reported revenue, including sales to external customers and intersegment sales or transfers is 10 percent or more of the combined revenue, internal and external, of all operating segments b) the absolute amount of its reported profit or loss is 10 percent or more of the greater, in absolute amount of 1) the combined reported profit of all operating segments that did not report a loss or 2) the combined reported loss of all operating segments that did report a loss c) its assets are 10 percent or more of the combined assets of all operating segments. + References Reference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 29 -URI http://asc.fasb.org/extlink&oid=6534315&loc=d3e8864-108599 Reference 2: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 30 -URI http://asc.fasb.org/extlink&oid=6534315&loc=d3e8906-108599 Reference 3: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 32 -URI http://asc.fasb.org/extlink&oid=6534315&loc=d3e8933-108599 Reference 4: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 35 -URI http://asc.fasb.org/extlink&oid=6534315&loc=d3e8984-108599 Reference 5: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 1 -URI http://asc.fasb.org/extlink&oid=6534315&loc=d3e8380-108599 Reference 6: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 10 -URI http://asc.fasb.org/extlink&oid=6534315&loc=d3e8538-108599 Reference 7: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 42 -URI http://asc.fasb.org/extlink&oid=6534315&loc=d3e9054-108599 Reference 8: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 12 -URI http://asc.fasb.org/extlink&oid=6534315&loc=d3e8595-108599 Reference 9: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Statement of Financial Accounting Standard (FAS) -Number 131 -LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy. Reference 10: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 34 -URI http://asc.fasb.org/extlink&oid=6534315&loc=d3e8981-108599 Reference 11: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 33 -URI http://asc.fasb.org/extlink&oid=6534315&loc=d3e8971-108599 Reference 12: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 26 -URI http://asc.fasb.org/extlink&oid=6534315&loc=d3e8844-108599 Reference 13: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 31 -URI http://asc.fasb.org/extlink&oid=6534315&loc=d3e8924-108599 Reference 14: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 40 -URI http://asc.fasb.org/extlink&oid=6534315&loc=d3e9031-108599 Reference 15: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 41 -URI http://asc.fasb.org/extlink&oid=6534315&loc=d3e9038-108599 + Details
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