XML 43 R25.htm IDEA: XBRL DOCUMENT v2.4.0.8
Segment Information
 9 Months Ended
Sep. 30, 2013
Segment Reporting [Abstract]  
Segment Reporting Disclosure [Text Block]
SEGMENT INFORMATION
As of September 30, 2013, the Company was managing its portfolio within seven geographic segments: (1) Pennsylvania, (2) Philadelphia Central Business District (CBD), (3) Metropolitan Washington D.C., (4) New Jersey/Delaware, (5) Richmond, Virginia, (6) Austin, Texas and (7) California. The Pennsylvania segment includes properties in Chester, Delaware, and Montgomery counties in the Philadelphia suburbs. The Philadelphia CBD segment includes properties located in the City of Philadelphia in Pennsylvania. The Metropolitan Washington, D.C. segment includes properties in Northern Virginia and southern Maryland. The New Jersey/Delaware segment includes properties in Burlington, Camden and Mercer counties in New Jersey and in New Castle county in the state of Delaware. The Richmond, Virginia segment includes properties primarily in Albemarle, Chesterfield, Goochland and Henrico counties and one property in Durham, North Carolina. The Austin, Texas segment includes properties in Austin. The California segment includes properties in Oakland, Concord, and Carlsbad, California. The corporate group is responsible for cash and investment management, development of certain real estate properties during the construction period, and certain other general support functions. Land held for development and construction in progress are transferred to operating properties by region upon completion of the associated construction or project.
Segment information is as follows (in thousands):
 
Pennsylvania
Suburbs
 
Philadelphia
CBD
 
Metropolitan, D.C.
 
New Jersey/Delaware
 
Richmond,
Virginia
 
Austin, Texas
 
California
 
Corporate
 
Total
As of September 30, 2013:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Real estate investments, at cost:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Operating properties
$
1,196,987

 
$
1,026,116

 
$
1,207,243

 
$
410,143

 
$
309,646

 
$
289,075

 
$
192,700

 
$
—

 
$
4,631,910

Construction-in-progress
 
 
 
 
 
 
 
 
 
 
 
 
 
 
52,702

 
52,702

Land inventory
 
 
 
 
 
 
 
 
 
 
 
 
 
 
94,097

 
94,097

As of December 31, 2012:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Real estate investments, at cost:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Operating properties
$
1,178,730

 
$
988,590

 
$
1,193,200

 
$
546,644

 
$
309,923

 
$
285,346

 
$
223,736

 
$
—

 
$
4,726,169

Construction-in-progress
 
 
 
 
 
 
 
 
 
 
 
 
 
 
48,950

 
48,950

Land inventory
 
 
 
 
 
 
 
 
 
 
 
 
 
 
102,439

 
102,439

For the three-months ended September 30, 2013:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Total revenue
$
39,268

 
$
35,891

 
$
29,320

 
$
16,171

 
$
8,640

 
$
9,937

 
$
4,632

 
$
(403
)
 
$
143,456

Property operating expenses, real estate taxes and third party management expenses
13,291

 
13,704

 
10,321

 
8,647

 
3,735

 
3,958

 
2,531

 
(19
)
 
56,168

Net operating income
$
25,977

 
$
22,187

 
$
18,999

 
$
7,524

 
$
4,905

 
$
5,979

 
$
2,101

 
$
(384
)
 
$
87,288

For the three-months ended September 30, 2012:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Total revenue
$
38,373

 
$
33,026

 
$
26,516

 
$
15,536

 
$
8,826

 
$
8,274

 
$
4,448

 
$
(479
)
 
$
134,520

Property operating expenses, real estate taxes and third party management expenses
13,463

 
12,432

 
10,638

 
7,930

 
3,761

 
3,485

 
2,362

 
(504
)
 
53,567

Net operating income
$
24,910

 
$
20,594

 
$
15,878

 
$
7,606

 
$
5,065

 
$
4,789

 
$
2,086

 
$
25

 
$
80,953

For the nine-months ended September 30, 2013:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Total revenue
$
114,730

 
$
107,957

 
$
85,889

 
$
47,449

 
$
26,359

 
$
29,067

 
$
13,773

 
$
(1,026
)
 
$
424,198

Property operating expenses, real estate taxes and third party management expenses
40,256

 
40,826

 
31,856

 
23,301

 
11,017

 
12,123

 
7,029

 
(75
)
 
166,333

Net operating income
$
74,474

 
$
67,131

 
$
54,033

 
$
24,148

 
$
15,342

 
$
16,944

 
$
6,744

 
$
(951
)
 
$
257,865

For the nine-months ended September 30, 2012:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Total revenue
$
113,110

 
$
98,086

 
$
79,919

 
$
46,550

 
$
26,762

 
$
23,957

 
$
13,034

 
$
(1,305
)
 
$
400,113

Property operating expenses, real estate taxes and third party management expenses
39,285

 
37,080

 
31,156

 
22,841

 
10,874

 
10,494

 
6,747

 
(1,274
)
 
157,203

Net operating income
$
73,825

 
$
61,006

 
$
48,763

 
$
23,709

 
$
15,888

 
$
13,463

 
$
6,287

 
$
(31
)
 
$
242,910


Net operating income (“NOI”) is defined as total revenue less property operating expenses, real estate taxes and third party management expenses. Segment NOI includes revenue, real estate taxes and property operating expenses directly related to operation and management of the properties owned and managed within the respective geographical region. Segment NOI excludes property level depreciation and amortization, revenue and expenses directly associated with third party real estate management services, expenses associated with corporate administrative support services, and inter-company eliminations. NOI also does not reflect general and administrative expenses, interest expenses, real estate impairment losses, depreciation and amortization costs, capital expenditures and leasing costs. Trends in development and construction activities that could materially impact the Company’s results from operations are also not reflected in NOI. All companies may not calculate NOI in the same manner. NOI is the measure that is used by the Company to evaluate the operating performance of its real estate assets by segment. The Company also believes that NOI provides useful information to investors regarding the Company's financial condition and results of operations because it reflects only those income and expenses recorded at the property level. The Company believes that net income, as defined by GAAP, is the most appropriate earnings measure. Below is a reconciliation of consolidated NOI to consolidated net income, as defined by GAAP:
 
Three-month periods ended September 30,
 
Nine-month periods ended September 30,
 
2013
 
2012
 
2013
 
2012
 
(amounts in thousands)
 
(amounts in thousands)
Consolidated net operating income
$
87,288

 
$
80,953

 
$
257,865

 
$
242,910

Less:
 
 
 
 
 
 
 
Interest expense
(30,338
)
 
(32,620
)
 
(91,689
)
 
(99,745
)
Interest expense - amortization of deferred financing costs
(1,158
)
 
(1,218
)
 
(3,502
)
 
(3,790
)
Interest expense - financing obligation
(264
)
 
(230
)
 
(693
)
 
(608
)
Depreciation and amortization
(50,613
)
 
(46,955
)
 
(149,423
)
 
(142,262
)
General and administrative expenses
(6,436
)
 
(6,080
)
 
(20,322
)
 
(18,209
)
Net loss on sale of undepreciated real estate
(129
)
 
—

 
(129
)
 
—

Loss on real estate venture formation
—

 
(950
)
 
—

 
(950
)
Loss on early extinguishment of debt
(11
)
 
(51
)
 
(1,127
)
 
(1,549
)
Plus:
 
 
 
 
 
 
 
Interest income
268

 
311

 
448

 
2,631

Historic tax credit transaction income
11,853

 
11,840

 
11,853

 
11,840

Equity in income of real estate ventures
714

 
500

 
3,757

 
1,382

Gain from remeasurement of investment in a real estate venture
—

 
—

 
7,847

 
—

Net gain on real estate venture transactions
—

 
—

 
3,683

 
—

Income (loss) from continuing operations
11,174

 
5,500

 
18,568

 
(8,350
)
Income (loss) from discontinued operations
(86
)
 
11,589

 
3,619

 
41,577

Net income
$
11,088

 
$
17,089

 
$
22,187

 
$
33,227