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Segment Information | 12 Months Ended
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Dec. 31, 2014
Segment Reporting [Abstract] |
SEGMENT INFORMATION | SEGMENT INFORMATION During the year ended December 31, 2014, the Company was managing its portfolio within seven 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 and Camden 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. On April 3, 2014, the Company contributed Four Points Centre to the Austin Venture. After contributing this property, the Company does not wholly own any operating properties in Austin, Texas (For additional information, see Note 4, "Investment In Unconsolidated Ventures"). The California segment includes properties in Oakland, Concord, and Carlsbad. 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. The following tables provide selected asset information and results of operations of the Company's reportable segments for the three years ended December 31, 2014, 2013 and 2012 (in thousands):
Real estate investments, at cost: |  |  |  |  |  |
|  | December 31, 2014 |  | December 31, 2013 |  | December 31, 2012
Philadelphia CBD (a) |  | $ | 1,338,655 |  |  | $ | 1,300,666 |  |  | $ | 988,590 |
Pennsylvania Suburbs |  | 1,178,470 |  |  | 1,199,105 |  |  | 1,178,730 |
Metropolitan Washington, D.C. |  | 1,183,652 |  |  | 1,214,965 |  |  | 1,193,200 |
New Jersey/Delaware |  | 392,581 |  |  | 414,716 |  |  | 546,644 |
Richmond, Virginia |  | 317,076 |  |  | 310,397 |  |  | 309,923 |
California |  | 193,258 |  |  | 192,584 |  |  | 223,736 |
Austin, Texas (b) |  | — |  |  | 36,856 |  |  | 285,346 |
|  | $ | 4,603,692 |  |  | $ | 4,669,289 |  |  | $ | 4,726,169 |
Assets held for sale (c) |  | 27,436 |  |  | — |  |  | — |
Operating Properties |  | $ | 4,631,128 |  |  | $ | 4,669,289 |  |  | $ | 4,726,169 |
Corporate |  |  |  |  |  |
Construction-in-progress |  | $ | 201,360 |  |  | $ | 74,174 |  |  | $ | 48,950 |
Land inventory |  | $ | 90,603 |  |  | $ | 93,351 |  |  | $ | 102,439 |
(a) | On December 19, 2013, the Company acquired 99% of the common interests in the One and Two Common Square partnerships. See Note 3, "Real Estate Investments," for further information on the acquisition.
(b) | On April 3, 2014, the Company contributed two three-story, Class A office buildings, containing an aggregate of 192,396 net rentable square feet, known as Four Points Centre in Austin, Texas to the Austin Venture. See Note 3, "Real Estate Investments," for further information on the contribution.
(c) | On December 31, 2014, the Company was actively marketing for sale of its Atrium I and Libertyview properties, comprised of two office properties located in the New Jersey/Delaware segment. As of December 31, 2014 the properties were classified as held for sale on the consolidated balance sheet. See Note 3, "Real Estate Investments," for further information. The sale is not classified as a significant disposition under the accounting guidance for discontinued operations. Accordingly, the real estate investments remained in the New Jersey/Delaware segment as of December 31, 2014.
| Years ended
| December 31,
| 2014 |  | 2013 |  | 2012
| Total revenue |  | Operating expenses (b) |  | Net operating income |  | Total revenue |  | Operating expenses (b) |  | Net operating income |  | Total revenue |  | Operating expenses |  | Net Operating income
Philadelphia CBD | $ | 201,809 |  |  | $ | (75,262 | ) |  | $ | 126,547 |  |  | $ | 146,081 |  |  | $ | (55,702 | ) |  | $ | 90,379 |  |  | $ | 131,592 |  |  | $ | (50,787 | ) |  | $ | 80,805 |
Pennsylvania Suburbs | 160,630 |  |  | (55,062 | ) |  | 105,568 |  |  | 153,426 |  |  | (54,506 | ) |  | 98,920 |  |  | 150,075 |  |  | (52,657 | ) |  | 97,418 |
Metropolitan Washington, D.C. | 113,834 |  |  | (43,399 | ) |  | 70,435 |  |  | 116,048 |  |  | (42,641 | ) |  | 73,407 |  |  | 107,656 |  |  | (41,485 | ) |  | 66,171 |
New Jersey/Delaware | 60,403 |  |  | (31,650 | ) |  | 28,753 |  |  | 60,262 |  |  | (29,981 | ) |  | 30,281 |  |  | 59,671 |  |  | (28,506 | ) |  | 31,165 |
Richmond, Virginia | 34,180 |  |  | (15,399 | ) |  | 18,781 |  |  | 35,058 |  |  | (14,916 | ) |  | 20,142 |  |  | 35,701 |  |  | (14,484 | ) |  | 21,217 |
California | 19,388 |  |  | (10,165 | ) |  | 9,223 |  |  | 18,369 |  |  | (9,411 | ) |  | 8,958 |  |  | 17,463 |  |  | (9,043 | ) |  | 8,420 |
Austin, Texas (a) | 5,610 |  |  | (3,223 | ) |  | 2,387 |  |  | 31,451 |  |  | (13,298 | ) |  | 18,153 |  |  | 32,379 |  |  | (13,951 | ) |  | 18,428 |
Corporate | 1,128 |  |  | (1,805 | ) |  | (677 | ) |  | 1,515 |  |  | (1,314 | ) |  | 201 |  |  | 1,142 |  |  | 65 |  |  | 1,207 |
Operating Properties | $ | 596,982 |  |  | $ | (235,965 | ) |  | $ | 361,017 |  |  | $ | 562,210 |  |  | $ | (221,769 | ) |  | $ | 340,441 |  |  | $ | 535,679 |  |  | $ | (210,848 | ) |  | $ | 324,831 |
(a) | On April 3, 2014, the Company contributed two three-story, Class A office buildings, containing an aggregate of 192,396 net rentable square feet, known as Four Points Centre in Austin, Texas to the Austin Venture. See Note 3, "Real Estate Investments," for further information on the contribution. Accordingly, the Company's 50% interest in the financial results of this property for the period subsequent to April 3, 2014 is reported as a component of 'Equity in income (loss) of real estate ventures' in the Company's consolidated statements of operations and, as a result, no longer included as a component of net operating income.
(b) | Includes property operating expense, real estate taxes and third party management expense.
Unconsolidated real estate ventures: |  |  |  |  |  |  |  |  |  |
| Investment in real estate ventures, at equity |  | Equity in income (loss) of real estate ventures
| As of |  | Years ended December 31,
| December 31, 2014 |  | December 31, 2013 |  | December 31, 2012 |  | 2014 |  | 2013 |  | 2012
Philadelphia CBD (a) | $ | 27,137 |  |  | $ | 19,975 |  |  | $ | 27,859 |  |  | $ | 46 |  |  | $ | 1,547 |  |  | $ | 1,113 |
Pennsylvania Suburbs | 17,385 |  |  | 17,272 |  |  | 33,160 |  |  | (777 | ) |  | 925 |  |  | 520 |
Metropolitan Washington, D.C. | 73,127 |  |  | 59,905 |  |  | 49,169 |  |  | (317 | ) |  | 130 |  |  | (648 | )
New Jersey/Delaware | — |  |  | — |  |  | 17,294 |  |  | 989 |  |  | 1,245 |  |  | 1,803 |
Richmond, Virginia | 1,574 |  |  | 1,400 |  |  | 1,245 |  |  | 349 |  |  | 381 |  |  | 269 |
Austin, Texas (b) (c) | 105,781 |  |  | 81,960 |  |  | 64,828 |  |  | (1,080 | ) |  | (564 | ) |  | (316 | )
Total | $ | 225,004 |  |  | $ | 180,512 |  |  | $ | 193,555 |  |  | $ | (790 | ) |  | $ | 3,664 |  |  | $ | 2,741 |
(a) | During the fourth quarter of 2014, the Company made an additional $5.2 million capital contribution to 1919 Ventures. See Note 4, "Investment In Unconsolidated Ventures," for further information on this transaction.
(b) | Investment in real estate ventures does not include the $1.2 million negative investment balance in one real estate venture as of December 31, 2014, which is included in other liabilities.
(c) | On April 3, 2014, the Company contributed Four Points Centre to an unconsolidated real estate venture. On July 31, 2014, the Austin Venture completed the acquisition of the Crossings at Lakeline. On October 17, 2014, the Austin Venture acquired River Place. See Note 4, "Investment In Unconsolidated Ventures," for further information on these acquisitions.
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 its 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. The following is a reconciliation of consolidated NOI to consolidated net income (loss), as defined by GAAP:
| Years Ended December 31,
| 2014 |  | 2013 |  | 2012
Consolidated net operating income | $ | 361,017 |  |  | $ | 340,441 |  |  | $ | 324,831 |
Less: |  |  |  |  |
Interest expense | (124,329 | ) |  | (121,937 | ) |  | (132,939 | )
Interest expense - amortization of deferred financing costs | (5,148 | ) |  | (4,676 | ) |  | (6,208 | )
Interest expense - financing obligation | (1,144 | ) |  | (972 | ) |  | (850 | )
Depreciation and amortization | (208,569 | ) |  | (197,021 | ) |  | (188,382 | )
General and administrative expenses | (26,779 | ) |  | (27,628 | ) |  | (25,413 | )
Plus: |  |  |  |  |
Interest income | 3,974 |  |  | 1,044 |  |  | 3,008 |
Historic tax credit transaction income | 11,853 |  |  | 11,853 |  |  | 11,840 |
Recognized hedge activity | (828 | ) |  | — |  |  | (2,985 | )
Equity in income (loss) of real estate ventures | (790 | ) |  | 3,664 |  |  | 2,741 |
Net gain from remeasurement of investments in real estate ventures | 458 |  |  | 6,866 |  |  | — |
Net gain on sales of interests in real estate | 4,901 |  |  | — |  |  | — |
Net gain (loss) on sale of undepreciated real estate | 1,184 |  |  | (137 | ) |  | — |
Net (loss) gain on real estate venture transactions | (417 | ) |  | 29,604 |  |  | (950 | )
Provision for impairment on assets held for sale | (1,765 | ) |  | — |  |  | — |
Loss on early extinguishment of debt | (7,594 | ) |  | (2,119 | ) |  | (22,002 | )
Income (loss) from continuing operations | 6,024 |  |  | 38,982 |  |  | (37,309 | )
Income from discontinued operations | 918 |  |  | 4,207 |  |  | 43,838 |
Net income | $ | 6,942 |  |  | $ | 43,189 |  |  | $ | 6,529 |

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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 32 -URI http://asc.fasb.org/extlink&oid=6534315&loc=d3e8933-108599 Reference 3: 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 4: 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 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 34 -URI http://asc.fasb.org/extlink&oid=6534315&loc=d3e8981-108599 Reference 7: 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 8: 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 Reference 9: 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 10: 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 11: 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 12: 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 13: 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 14: 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 + Details
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