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Reportable Segments | 3 Months Ended
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Mar. 31, 2020
Segment Reporting [Abstract] |
Reportable Segments |
1 3. | Reportable Segments
Operating segments are defined as components of an enterprise that engage in business activities from which they may earn revenues and incur expenses and about which discrete financial information is available that is evaluated regularly by the chief operating decision maker. The chief operating decision maker decides how resources are allocated and assesses performance on a recurring basis at least quarterly. The Company’s primary business is the acquisition, development and management of multifamily residential properties, which includes the generation of rental and other related income through the leasing of apartment units to residents. The chief operating decision maker evaluates the Company’s operating performance geographically by market and both on a same store and non-same store basis. While the Company does maintain a retail presence, it is only approximately 4.0% of total revenues and is designed as an amenity for our residential residents. The chief operating decision maker evaluates the performance of each property on a consolidated residential and retail basis. The Company’s geographic same store operating segments located in urban and high-density suburban communities represent its reportable segments. The Company’s fee and asset management and development activities are other business activities that do not constitute an operating segment and as such, have been aggregated in the “Other” category in the tables presented below. All revenues are from external customers and there is no customer who contributed 10% or more of the Company’s total revenues during the quarters ended March 31, 2020 and 2019, respectively. The primary financial measure for the Company’s rental real estate segment is net operating income (“NOI”), which represents rental income less: 1) property and maintenance expense and 2) real estate taxes and insurance expense (all as reflected in the accompanying consolidated statements of operations and comprehensive income). The Company believes that NOI is helpful to investors as a supplemental measure of its operating performance because it is a direct measure of the actual operating results of the Company’s apartment properties. Revenues for all leases are reflected on a straight-line basis in accordance with GAAP for the current and comparable periods. The following table presents a reconciliation of NOI from our rental real estate for the quarters ended March 31, 2020 and 2019, respectively (amounts in thousands):
|  | Quarter Ended March 31, |
|  | 2020 |  |  | 2019 |
Rental income |  | $ | 682,305 |  |  | $ | 662,302 |
Property and maintenance expense |  |  | (115,816 | ) |  |  | (115,070 | )
Real estate taxes and insurance expense |  |  | (97,732 | ) |  |  | (91,442 | )
Total operating expenses |  |  | (213,548 | ) |  |  | (206,512 | )
Net operating income |  | $ | 468,757 |  |  | $ | 455,790 |
The following tables present NOI for each segment from our rental real estate for the quarters ended March 31, 2020 and 2019, respectively, as well as total assets and capital expenditures at March 31, 2020 (amounts in thousands):
|  | Quarter Ended March 31, 2020 |  |  | Quarter Ended March 31, 2019 |
|  | Rental Income |  |  | Operating Expenses |  |  | NOI |  |  | Rental Income |  |  | Operating Expenses |  |  | NOI |
Same store (1) |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Los Angeles |  | $ | 121,920 |  |  | $ | 36,916 |  |  | $ | 85,004 |  |  | $ | 119,536 |  |  | $ | 36,430 |  |  | $ | 83,106 |
Orange County |  |  | 26,694 |  |  |  | 6,214 |  |  |  | 20,480 |  |  |  | 25,828 |  |  |  | 6,175 |  |  |  | 19,653 |
San Diego |  |  | 24,142 |  |  |  | 6,317 |  |  |  | 17,825 |  |  |  | 23,304 |  |  |  | 6,148 |  |  |  | 17,156 |
Subtotal - Southern California |  |  | 172,756 |  |  |  | 49,447 |  |  |  | 123,309 |  |  |  | 168,668 |  |  |  | 48,753 |  |  |  | 119,915 |
San Francisco |  |  | 121,950 |  |  |  | 30,694 |  |  |  | 91,256 |  |  |  | 118,071 |  |  |  | 29,502 |  |  |  | 88,569 |
Washington D.C. |  |  | 103,884 |  |  |  | 32,044 |  |  |  | 71,840 |  |  |  | 101,504 |  |  |  | 31,520 |  |  |  | 69,984 |
New York |  |  | 116,590 |  |  |  | 50,932 |  |  |  | 65,658 |  |  |  | 114,761 |  |  |  | 48,894 |  |  |  | 65,867 |
Seattle |  |  | 64,956 |  |  |  | 17,427 |  |  |  | 47,529 |  |  |  | 61,598 |  |  |  | 17,118 |  |  |  | 44,480 |
Boston |  |  | 63,683 |  |  |  | 18,160 |  |  |  | 45,523 |  |  |  | 61,920 |  |  |  | 18,241 |  |  |  | 43,679 |
Denver |  |  | 4,558 |  |  |  | 1,233 |  |  |  | 3,325 |  |  |  | 4,577 |  |  |  | 1,196 |  |  |  | 3,381 |
Total same store |  |  | 648,377 |  |  |  | 199,937 |  |  |  | 448,440 |  |  |  | 631,099 |  |  |  | 195,224 |  |  |  | 435,875 |
Non-same store/other (2) (3) |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Non-same store |  |  | 29,653 |  |  |  | 9,165 |  |  |  | 20,488 |  |  |  | 5,838 |  |  |  | 1,783 |  |  |  | 4,055 |
Other (3) |  |  | 4,275 |  |  |  | 4,446 |  |  |  | (171 | ) |  |  | 25,365 |  |  |  | 9,505 |  |  |  | 15,860 |
Total non-same store/other |  |  | 33,928 |  |  |  | 13,611 |  |  |  | 20,317 |  |  |  | 31,203 |  |  |  | 11,288 |  |  |  | 19,915 |
Totals |  | $ | 682,305 |  |  | $ | 213,548 |  |  | $ | 468,757 |  |  | $ | 662,302 |  |  | $ | 206,512 |  |  | $ | 455,790 |
(1) | For the quarters ended March 31, 2020 and 2019, same store primarily includes all properties acquired or completed that were stabilized prior to January 1, 2019, less properties subsequently sold, which represented 74,919 apartment units.
(2) | For the quarters ended March 31, 2020 and 2019, non-same store primarily includes properties acquired after January 1, 2019, plus any properties in lease-up and not stabilized as of January 1, 2019.
(3) | Other includes development, other corporate operations and operations prior to disposition for properties sold.
|  | Quarter Ended March 31, 2020 |
|  | Total Assets |  |  | Capital Expenditures |
Same store (1) |  |  |  |  |  |  |  |
Los Angeles |  | $ | 3,090,294 |  |  | $ | 9,360 |
Orange County |  |  | 401,249 |  |  |  | 2,021 |
San Diego |  |  | 385,989 |  |  |  | 1,117 |
Subtotal - Southern California |  |  | 3,877,532 |  |  |  | 12,498 |
San Francisco |  |  | 3,362,398 |  |  |  | 4,121 |
Washington D.C. |  |  | 3,343,974 |  |  |  | 6,836 |
New York |  |  | 4,001,406 |  |  |  | 6,327 |
Seattle |  |  | 1,855,378 |  |  |  | 2,026 |
Boston |  |  | 1,809,524 |  |  |  | 5,665 |
Denver |  |  | 253,763 |  |  |  | 184 |
Total same store |  |  | 18,503,975 |  |  |  | 37,657 |
Non-same store/other (2) (3) |  |  |  |  |  |  |  |
Non-same store |  |  | 1,660,327 |  |  |  | 548 |
Other (3) |  |  | 755,016 |  |  |  | 137 |
Total non-same store/other |  |  | 2,415,343 |  |  |  | 685 |
Totals |  | $ | 20,919,318 |  |  | $ | 38,342 |
(1) | Same store primarily includes all properties acquired or completed that were stabilized prior to January 1, 2019, less properties subsequently sold, which represented 74,919 apartment units.
(2) | Non-same store primarily includes properties acquired after January 1, 2019, plus any properties in lease-up and not stabilized as of January 1, 2019.
(3) | Other includes development, other corporate operations and capital expenditures for properties sold.

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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://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -URI http://asc.fasb.org/topic&trid=2134510 + Details
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