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Segment Information | 9 Months Ended
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Sep. 30, 2018
Segment Reporting [Abstract] |
Segment Information | 11. Segment Information The following tables present reconciliations of Net Income Attributable to Boston Properties, Inc. Common Shareholders to Net Operating Income and Net Income Attributable to Boston Properties Limited Partnership Common Unitholders to Net Operating Income for the three and nine months ended September 30, 2018 and 2017. Boston Properties, Inc.
| Three months ended September 30, |  | Nine months ended September 30,
| 2018 |  | 2017 |  | 2018 |  | 2017
| (in thousands)
Net income attributable to Boston Properties, Inc. common shareholders | $ | 119,118 |  |  | $ | 117,337 |  |  | $ | 423,835 |  |  | $ | 348,086 |
Add: |  |  |  |  |  |  |
Preferred dividends | 2,625 |  |  | 2,625 |  |  | 7,875 |  |  | 7,875 |
Noncontrolling interest—common units of Boston Properties Limited Partnership | 13,852 |  |  | 13,402 |  |  | 49,128 |  |  | 40,350 |
Noncontrolling interests in property partnerships | 14,850 |  |  | 14,340 |  |  | 46,484 |  |  | 33,967 |
Interest expense | 95,366 |  |  | 92,032 |  |  | 277,790 |  |  | 282,709 |
Depreciation and amortization expense | 157,996 |  |  | 152,164 |  |  | 480,210 |  |  | 463,288 |
Transaction costs | 914 |  |  | 239 |  |  | 1,409 |  |  | 572 |
Payroll and related costs from management services contracts | 2,516 |  |  | — |  |  | 7,371 |  |  | — |
General and administrative expense | 29,677 |  |  | 25,792 |  |  | 94,039 |  |  | 84,319 |
Less: |  |  |  |  |  |  |
Gains from early extinguishments of debt | — |  |  | — |  |  | — |  |  | 14,354 |
Gains from investments in securities | 1,075 |  |  | 944 |  |  | 1,454 |  |  | 2,716 |
Interest and other income | 2,822 |  |  | 1,329 |  |  | 7,049 |  |  | 3,447 |
Gains on sales of real estate | 7,863 |  |  | 2,891 |  |  | 122,552 |  |  | 6,791 |
Income (loss) from unconsolidated joint ventures | (4,313 | ) |  | 843 |  |  | (3,083 | ) |  | 7,035 |
Direct reimbursements of payroll and related costs from management services contracts | 2,516 |  |  | — |  |  | 7,371 |  |  | — |
Development and management services revenue | 15,253 |  |  | 10,811 |  |  | 32,963 |  |  | 24,648 |
Net Operating Income | $ | 411,698 |  |  | $ | 401,113 |  |  | $ | 1,219,835 |  |  | $ | 1,202,175 |
Boston Properties Limited Partnership
| Three months ended September 30, |  | Nine months ended September 30,
| 2018 |  | 2017 |  | 2018 |  | 2017
| (in thousands)
Net income attributable to Boston Properties Limited Partnership common unitholders | $ | 136,201 |  |  | $ | 132,693 |  |  | $ | 483,069 |  |  | $ | 395,199 |
Add: |  |  |  |  |  |  |
Preferred distributions | 2,625 |  |  | 2,625 |  |  | 7,875 |  |  | 7,875 |
Noncontrolling interests in property partnerships | 14,850 |  |  | 14,340 |  |  | 46,484 |  |  | 33,967 |
Interest expense | 95,366 |  |  | 92,032 |  |  | 277,790 |  |  | 282,709 |
Depreciation and amortization expense | 156,056 |  |  | 150,210 |  |  | 474,383 |  |  | 457,102 |
Transaction costs | 914 |  |  | 239 |  |  | 1,409 |  |  | 572 |
Payroll and related costs from management services contracts | 2,516 |  |  | — |  |  | 7,371 |  |  | — |
General and administrative expense | 29,677 |  |  | 25,792 |  |  | 94,039 |  |  | 84,319 |
Less: |  |  |  |  |  |  |
Gains from early extinguishments of debt | — |  |  | — |  |  | — |  |  | 14,354 |
Gains from investments in securities | 1,075 |  |  | 944 |  |  | 1,454 |  |  | 2,716 |
Interest and other income | 2,822 |  |  | 1,329 |  |  | 7,049 |  |  | 3,447 |
Gains on sales of real estate | 9,154 |  |  | 2,891 |  |  | 126,831 |  |  | 7,368 |
Income (loss) from unconsolidated joint ventures | (4,313 | ) |  | 843 |  |  | (3,083 | ) |  | 7,035 |
Direct reimbursements of payroll and related costs from management services contracts | 2,516 |  |  | — |  |  | 7,371 |  |  | — |
Development and management services revenue | 15,253 |  |  | 10,811 |  |  | 32,963 |  |  | 24,648 |
Net Operating Income | $ | 411,698 |  |  | $ | 401,113 |  |  | $ | 1,219,835 |  |  | $ | 1,202,175 |
Net operating income (“NOI”) is a non-GAAP financial measure equal to net income attributable to Boston Properties, Inc. common shareholders and net income attributable to Boston Properties Limited Partnership common unitholders, as applicable, the most directly comparable GAAP financial measures, plus (1) preferred dividends/distributions, net income attributable to noncontrolling interests, interest expense, depreciation and amortization expense, transaction costs, payroll and related costs from management services contracts and corporate general and administrative expense less (2) gains from early extinguishments of debt, gains from investments in securities, interest and other income, gains on sales of real estate, income (loss) from unconsolidated joint ventures, direct reimbursements of payroll and related costs from management services contracts and development and management services revenue. The Company believes NOI is useful to investors as a performance measure and believes it provides useful information to investors regarding the Company's results of operations and financial condition because, when compared across periods, it reflects the impact on operations from trends in occupancy rates, rental rates, operating costs and acquisition and development activity on an unleveraged basis, providing perspective not immediately apparent from net income attributable to Boston Properties, Inc. common shareholders and net income attributable to Boston Properties Limited Partnership common unitholders. For example, interest expense is not necessarily linked to the operating performance of a real estate asset and is often incurred at the corporate level as opposed to the property level. Similarly, interest expense may be incurred at the property level even though the financing proceeds may be used at the corporate level (e.g., used for other investment activity). In addition, depreciation and amortization expense, because of historical cost accounting and useful life estimates, may distort operating performance measures at the property level. NOI presented by the Company may not be comparable to NOI reported by other REITs or real estate companies that define NOI differently. Asset information by segment is not reported because the Company does not use this measure to assess performance. Therefore, depreciation and amortization expense is not allocated among segments. Preferred dividends/distributions, net income attributable to noncontrolling interests, interest expense, depreciation and amortization expense, transaction costs, payroll and related costs from management services contracts, corporate general and administrative expense, gains from early extinguishments of debt, gains from investments in securities, interest and other income, gains on sales of real estate, income (loss) from unconsolidated joint ventures, direct reimbursements of payroll and related costs from management services contracts and development and management services revenue are not included in NOI as internal reporting addresses these items on a corporate level. The Company’s segments are based on the Company’s method of internal reporting which classifies its operations by both geographic area and property type. The Company’s segments by geographic area are Boston, New York, San Francisco and Washington, DC. Segments by property type include: Office, Residential and Hotel. Information by geographic area and property type (dollars in thousands): For the three months ended September 30, 2018:
| Boston |  | New York |  | San Francisco |  | Washington, DC |  | Total
Rental Revenue: |  |  |  |  |  |  |  |  |
Office | $ | 210,277 |  |  | $ | 237,944 |  |  | $ | 102,035 |  |  | $ | 98,275 |  |  | $ | 648,531 |
Residential | 1,905 |  |  | — |  |  | — |  |  | 4,415 |  |  | 6,320 |
Hotel | 13,664 |  |  | — |  |  | — |  |  | — |  |  | 13,664 |
Total | 225,846 |  |  | 237,944 |  |  | 102,035 |  |  | 102,690 |  |  | 668,515 |
% of Grand Totals | 33.78 | % |  | 35.60 | % |  | 15.26 | % |  | 15.36 | % |  | 100.00 | %
Rental Expenses: |  |  |  |  |  |  |  |  |
Office | 78,089 |  |  | 96,795 |  |  | 34,016 |  |  | 35,365 |  |  | 244,265 |
Residential | 1,159 |  |  | — |  |  | — |  |  | 2,565 |  |  | 3,724 |
Hotel | 8,828 |  |  | — |  |  | — |  |  | — |  |  | 8,828 |
Total | 88,076 |  |  | 96,795 |  |  | 34,016 |  |  | 37,930 |  |  | 256,817 |
% of Grand Totals | 34.30 | % |  | 37.68 | % |  | 13.25 | % |  | 14.77 | % |  | 100.00 | %
Net operating income | $ | 137,770 |  |  | $ | 141,149 |  |  | $ | 68,019 |  |  | $ | 64,760 |  |  | $ | 411,698 |
% of Grand Totals | 33.46 | % |  | 34.29 | % |  | 16.52 | % |  | 15.73 | % |  | 100.00 | %
For the three months ended September 30, 2017:
| Boston |  | New York |  | San Francisco |  | Washington, DC |  | Total
Rental Revenue: |  |  |  |  |  |  |  |  |
Office | $ | 196,687 |  |  | $ | 242,071 |  |  | $ | 87,162 |  |  | $ | 103,622 |  |  | $ | 629,542 |
Residential | 1,228 |  |  | — |  |  | — |  |  | 3,067 |  |  | 4,295 |
Hotel | 13,064 |  |  | — |  |  | — |  |  | — |  |  | 13,064 |
Total | 210,979 |  |  | 242,071 |  |  | 87,162 |  |  | 106,689 |  |  | 646,901 |
% of Grand Totals | 32.61 | % |  | 37.43 | % |  | 13.47 | % |  | 16.49 | % |  | 100.00 | %
Rental Expenses: |  |  |  |  |  |  |  |  |
Office | 76,086 |  |  | 95,775 |  |  | 26,792 |  |  | 37,111 |  |  | 235,764 |
Residential | 512 |  |  | — |  |  | — |  |  | 1,065 |  |  | 1,577 |
Hotel | 8,447 |  |  | — |  |  | — |  |  | — |  |  | 8,447 |
Total | 85,045 |  |  | 95,775 |  |  | 26,792 |  |  | 38,176 |  |  | 245,788 |
% of Grand Totals | 34.60 | % |  | 38.97 | % |  | 10.90 | % |  | 15.53 | % |  | 100.00 | %
Net operating income | $ | 125,934 |  |  | $ | 146,296 |  |  | $ | 60,370 |  |  | $ | 68,513 |  |  | $ | 401,113 |
% of Grand Totals | 31.40 | % |  | 36.47 | % |  | 15.05 | % |  | 17.08 | % |  | 100.00 | %
For the nine months ended September 30, 2018:
| Boston |  | New York |  | San Francisco |  | Washington, DC |  | Total
Rental Revenue: |  |  |  |  |  |  |  |  |
Office | $ | 623,084 |  |  | $ | 714,348 |  |  | $ | 285,410 |  |  | $ | 296,092 |  |  | $ | 1,918,934 |
Residential | 4,252 |  |  | — |  |  | — |  |  | 11,026 |  |  | 15,278 |
Hotel | 37,373 |  |  | — |  |  | — |  |  | — |  |  | 37,373 |
Total | 664,709 |  |  | 714,348 |  |  | 285,410 |  |  | 307,118 |  |  | 1,971,585 |
% of Grand Totals | 33.71 | % |  | 36.23 | % |  | 14.48 | % |  | 15.58 | % |  | 100.00 | %
Rental Expenses: |  |  |  |  |  |  |  |  |
Office | 235,560 |  |  | 282,395 |  |  | 92,858 |  |  | 106,386 |  |  | 717,199 |
Residential | 2,379 |  |  | — |  |  | — |  |  | 6,530 |  |  | 8,909 |
Hotel | 25,642 |  |  | — |  |  | — |  |  | — |  |  | 25,642 |
Total | 263,581 |  |  | 282,395 |  |  | 92,858 |  |  | 112,916 |  |  | 751,750 |
% of Grand Totals | 35.06 | % |  | 37.57 | % |  | 12.35 | % |  | 15.02 | % |  | 100.00 | %
Net operating income | $ | 401,128 |  |  | $ | 431,953 |  |  | $ | 192,552 |  |  | $ | 194,202 |  |  | $ | 1,219,835 |
% of Grand Totals | 32.88 | % |  | 35.41 | % |  | 15.79 | % |  | 15.92 | % |  | 100.00 | %
For the nine months ended September 30, 2017:
| Boston |  | New York |  | San Francisco |  | Washington, DC |  | Total
Rental Revenue: |  |  |  |  |  |  |  |  |
Office | $ | 573,883 |  |  | $ | 735,485 |  |  | $ | 257,286 |  |  | $ | 309,225 |  |  | $ | 1,875,879 |
Residential | 3,520 |  |  | — |  |  | — |  |  | 8,941 |  |  | 12,461 |
Hotel | 33,859 |  |  | — |  |  | — |  |  | — |  |  | 33,859 |
Total | 611,262 |  |  | 735,485 |  |  | 257,286 |  |  | 318,166 |  |  | 1,922,199 |
% of Grand Totals | 31.80 | % |  | 38.27 | % |  | 13.38 | % |  | 16.55 | % |  | 100.00 | %
Rental Expenses: |  |  |  |  |  |  |  |  |
Office | 225,502 |  |  | 280,569 |  |  | 77,204 |  |  | 108,044 |  |  | 691,319 |
Residential | 1,552 |  |  | — |  |  | — |  |  | 3,211 |  |  | 4,763 |
Hotel | 23,942 |  |  | — |  |  | — |  |  | — |  |  | 23,942 |
Total | 250,996 |  |  | 280,569 |  |  | 77,204 |  |  | 111,255 |  |  | 720,024 |
% of Grand Totals | 34.86 | % |  | 38.97 | % |  | 10.72 | % |  | 15.45 | % |  | 100.00 | %
Net operating income | $ | 360,266 |  |  | $ | 454,916 |  |  | $ | 180,082 |  |  | $ | 206,911 |  |  | $ | 1,202,175 |
% of Grand Totals | 29.97 | % |  | 37.84 | % |  | 14.98 | % |  | 17.21 | % |  | 100.00 | %

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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 -URI http://asc.fasb.org/topic&trid=2134510 + Details
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