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Segment Reporting | 9 Months Ended
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Sep. 30, 2020
Segment Reporting [Abstract] |
Segment Reporting | Segment Reporting The Company's reportable operating segments include Established Communities, Other Stabilized Communities, and Development/Redevelopment Communities. Annually as of January 1, the Company determines which of its communities fall into each of these categories and generally maintains that classification throughout the year for the purpose of reporting segment operations, unless disposition or redevelopment plans regarding a community change. 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 ("CODM") 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 property revenue less direct property operating expenses (including property taxes), and excluding corporate-level income (including management, development and other fees), corporate-level property management and other indirect operating expenses, expensed transaction, development and other pursuit costs, net of recoveries, interest expense, net, (gain) loss on extinguishment of debt, net, general and administrative expense, equity in income of unconsolidated real estate entities, depreciation expense, corporate income tax expense, casualty and impairment (gain) loss, net, gain on sale of communities, (gain) loss on other real estate transactions, net, gain on for-sale condominiums, net of marketing and administrative costs and net operating income from real estate assets sold or held for sale. 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 the three and nine months ended September 30, 2020 and 2019 is as follows (dollars in thousands):
| For the three months ended |  | For the nine months ended
| 9/30/2020 |  | 9/30/2019 |  | 9/30/2020 |  | 9/30/2019
Net income | $ | 147,717 |  |  | $ | 279,709 |  |  | $ | 486,592 |  |  | $ | 618,432 |
Indirect operating expenses, net of corporate income | 23,837 |  |  | 20,195 |  |  | 70,043 |  |  | 62,935 |
Expensed transaction, development and other pursuit costs, net of recoveries | 567 |  |  | 175 |  |  | 4,289 |  |  | 2,562 |
Interest expense, net | 53,249 |  |  | 51,493 |  |  | 162,562 |  |  | 149,395 |
(Gain) loss on extinguishment of debt, net | (105) |  |  | 93 |  |  | 9,333 |  |  | 602 |
General and administrative expense | 13,985 |  |  | 12,769 |  |  | 46,878 |  |  | 45,440 |
Equity in income of unconsolidated real estate entities | (5,083) |  |  | (1,643) |  |  | (6,770) |  |  | (780) |
Depreciation expense | 175,348 |  |  | 165,463 |  |  | 529,508 |  |  | 490,213 |
Income tax (benefit) expense | (27) |  |  | 11,184 |  |  | (1,069) |  |  | 11,178 |
Gain on sale of communities | (31,607) |  |  | (130,484) |  |  | (91,338) |  |  | (165,849) |
Gain on other real estate transactions, net | (129) |  |  | (73) |  |  | (328) |  |  | (374) |
Gain on for-sale condominiums, net of marketing and administrative costs | 646 |  |  | 1,108 |  |  | (4,162) |  |  | 2,526 |
Net operating income from real estate assets sold or held for sale | (720) |  |  | (3,404) |  |  | (3,572) |  |  | (16,161) |
Net operating income | $ | 377,678 |  |  | $ | 406,585 |  |  | $ | 1,201,966 |  |  | $ | 1,200,119 |
The following is a summary of NOI from real estate assets sold or held for sale for the periods presented (dollars in thousands):
| For the three months ended |  | For the nine months ended
| 9/30/2020 |  | 9/30/2019 |  | 9/30/2020 |  | 9/30/2019
Rental income from real estate assets sold or held for sale | $ | 1,449 |  |  | $ | 6,094 |  |  | $ | 6,159 |  |  | $ | 28,116 |
Operating expenses from real estate assets sold or held for sale | (729) |  |  | (2,690) |  |  | (2,587) |  |  | (11,955) |
Net operating income from real estate assets sold or held for sale | $ | 720 |  |  | $ | 3,404 |  |  | $ | 3,572 |  |  | $ | 16,161 |
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 at January 1, 2020. Segment information for the three and nine months ended September 30, 2020 and 2019 has been adjusted to exclude the real estate assets that were sold from January 1, 2019 through September 30, 2020, or otherwise qualify as held for sale as of September 30, 2020, as described in Note 6, "Real Estate Disposition Activities."
| For the three months ended |  | For the nine months ended |  |
| Total revenue |  | NOI |  | Total revenue |  | NOI |  | Gross real estate (1)
For the period ended September 30, 2020 |  |  |  |  |  |
Established |  |  |  |  |  |  |  |  |
New England | $ | 78,057 |  |  | $ | 49,089 |  |  | $ | 239,456 |  |  | $ | 155,604 |  |  | $ | 2,774,519 |
Metro NY/NJ | 112,507 |  |  | 75,193 |  |  | 344,475 |  |  | 236,138 |  |  | 4,303,971 |
Mid-Atlantic | 84,038 |  |  | 56,190 |  |  | 259,086 |  |  | 180,886 |  |  | 3,505,272 |
Pacific Northwest | 27,125 |  |  | 18,578 |  |  | 83,539 |  |  | 59,042 |  |  | 994,486 |
Northern California | 95,234 |  |  | 69,752 |  |  | 300,856 |  |  | 228,047 |  |  | 3,274,052 |
Southern California | 105,964 |  |  | 71,125 |  |  | 327,865 |  |  | 228,181 |  |  | 4,152,209 |
Expansion Markets | 5,633 |  |  | 3,015 |  |  | 17,424 |  |  | 10,004 |  |  | 320,944 |
Total Established | 508,558 |  |  | 342,942 |  |  | 1,572,701 |  |  | 1,097,902 |  |  | 19,325,453 |
Other Stabilized | 35,080 |  |  | 22,834 |  |  | 105,246 |  |  | 69,438 |  |  | 1,595,739 |
Development / Redevelopment | 21,300 |  |  | 11,902 |  |  | 58,403 |  |  | 34,626 |  |  | 2,569,413 |
Land Held for Development | N/A |  | N/A |  | N/A |  | N/A |  | 43,494 |
Non-allocated (2) | 1,017 |  |  | N/A |  | 2,950 |  |  | N/A |  | 407,821 |
Total | $ | 565,955 |  |  | $ | 377,678 |  |  | $ | 1,739,300 |  |  | $ | 1,201,966 |  |  | $ | 23,941,920 |
For the period ended September 30, 2019 |  |  |  |  |  |
Established |  |  |  |  |  |  |  |  |
New England | $ | 81,924 |  |  | $ | 54,244 |  |  | $ | 240,178 |  |  | $ | 158,801 |  |  | $ | 2,742,940 |
Metro NY/NJ | 119,857 |  |  | 82,602 |  |  | 355,990 |  |  | 248,530 |  |  | 4,284,077 |
Mid-Atlantic | 88,829 |  |  | 62,430 |  |  | 262,806 |  |  | 185,431 |  |  | 3,475,939 |
Pacific Northwest | 28,589 |  |  | 20,684 |  |  | 84,615 |  |  | 61,498 |  |  | 988,952 |
Northern California | 103,511 |  |  | 79,076 |  |  | 307,207 |  |  | 235,884 |  |  | 3,258,942 |
Southern California | 113,202 |  |  | 79,357 |  |  | 337,488 |  |  | 239,452 |  |  | 4,119,312 |
Expansion Markets | 5,825 |  |  | 3,261 |  |  | 17,607 |  |  | 10,177 |  |  | 320,114 |
Total Established | 541,737 |  |  | 381,654 |  |  | 1,605,891 |  |  | 1,139,773 |  |  | 19,190,276 |
Other Stabilized | 30,199 |  |  | 20,125 |  |  | 77,749 |  |  | 52,091 |  |  | 1,404,506 |
Development / Redevelopment | 8,352 |  |  | 4,806 |  |  | 15,820 |  |  | 8,255 |  |  | 1,824,012 |
Land Held for Development | N/A |  | N/A |  | N/A |  | N/A |  | 20,095 |
Non-allocated (2) | 1,231 |  |  | N/A |  | 3,484 |  |  | N/A |  | 552,179 |
Total | $ | 581,519 |  |  | $ | 406,585 |  |  | $ | 1,702,944 |  |  | $ | 1,200,119 |  |  | $ | 22,991,068 |
__________________________________ (1)Does not include gross real estate either sold or classified as held for sale subsequent to September 30, 2019 of $131,790. (2)Revenue represents third-party management, accounting, and developer fees and miscellaneous income which are not allocated to a reportable segment. Gross real estate includes the for-sale residential condominiums at The Park Loggia, as discussed in Note 6, "Real Estate Disposition Activities."

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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/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 31 -URI http://asc.fasb.org/extlink&oid=120311839&loc=d3e8924-108599 Reference 2: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 34 -URI http://asc.fasb.org/extlink&oid=120311839&loc=d3e8981-108599 Reference 3: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 21 -Subparagraph (a) -URI http://asc.fasb.org/extlink&oid=120311839&loc=d3e8721-108599 Reference 4: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 40 -URI http://asc.fasb.org/extlink&oid=120311839&loc=d3e9031-108599 Reference 5: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 32 -Subparagraph (f) -URI http://asc.fasb.org/extlink&oid=120311839&loc=d3e8933-108599 Reference 6: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 32 -Subparagraph (e) -URI http://asc.fasb.org/extlink&oid=120311839&loc=d3e8933-108599 Reference 7: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 26 -URI http://asc.fasb.org/extlink&oid=120311839&loc=d3e8844-108599 Reference 8: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 41 -URI http://asc.fasb.org/extlink&oid=120311839&loc=d3e9038-108599 Reference 9: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 32 -Subparagraph (d) -URI http://asc.fasb.org/extlink&oid=120311839&loc=d3e8933-108599 Reference 10: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 22 -URI http://asc.fasb.org/extlink&oid=120311839&loc=d3e8736-108599 Reference 11: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 42 -URI http://asc.fasb.org/extlink&oid=120311839&loc=d3e9054-108599 Reference 12: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 15 -URI http://asc.fasb.org/extlink&oid=120311839&loc=d3e8657-108599 Reference 13: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 21 -Subparagraph (b) -URI http://asc.fasb.org/extlink&oid=120311839&loc=d3e8721-108599 Reference 14: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -URI http://asc.fasb.org/topic&trid=2134510 + Details
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