XML 39 R24.htm IDEA: XBRL DOCUMENT
v3.20.2

Segment Information | 9 Months Ended
--- | ---
Sep. 30, 2020
Segment Reporting [Abstract] |
SEGMENT INFORMATION | 13. SEGMENT INFORMATION As of September 30, 2020, the Company owns and manages properties within five segments: (1) Philadelphia Central Business District ("Philadelphia CBD"), (2) Pennsylvania Suburbs, (3) Austin, Texas (4) Metropolitan Washington, D.C. and (5) Other. The Philadelphia CBD segment includes properties located in the City of Philadelphia, Pennsylvania. The Pennsylvania Suburbs segment includes properties in Chester, Delaware, and Montgomery counties in the Philadelphia suburbs. The Austin, Texas segment includes properties in the City of Austin, Texas. The Metropolitan Washington, D.C. segment includes properties in the District of Columbia, Northern Virginia and Southern Maryland. The Other segment includes properties located in Camden County, New Jersey and New Castle County, Delaware. In addition to the five segments, 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 is 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 (in thousands):
Real estate investments, at cost: |  |  |
| September 30, 2020 |  | December 31, 2019
Philadelphia CBD (a) | $ | 1,414,041 |  |  | $ | 1,726,299 |
Pennsylvania Suburbs | 1,000,214 |  |  | 1,003,890 |
Austin, Texas | 726,295 |  |  | 721,255 |
Metropolitan Washington, D.C. | 488,139 |  |  | 468,035 |
Other | 87,076 |  |  | 86,980 |
Operating Properties | $ | 3,715,765 |  |  | $ | 4,006,459 |
Right of use asset - operating leases, net | $ | 21,145 |  |  | $ | 21,656 |
Corporate |  |  |
Construction-in-progress | $ | 186,853 |  |  | $ | 180,718 |
Land held for development (b) | $ | 115,474 |  |  | $ | 96,124 |
Prepaid leasehold interests in land held for development, net (c) | $ | 39,287 |  |  | $ | 39,592 |
(a) | Decrease primarily due to the Commerce Square Venture Transaction. See Note 3, ''Real Estate Investments," for further information.
(b) | Does not include 35.2 acres of land classified as held for sale as of September 30, 2020 and December 31, 2019.
(c) | Includes leasehold interests in prepaid 99-year ground leases at 3025 and 3001-3003 JFK Boulevard, in Philadelphia, Pennsylvania as of September 30, 2020 and December 31, 2019.
Net operating income:
| Three Months Ended September 30,
| 2020 |  | 2019
| Total revenue |  | Operating expenses (a) |  | Net operating income (loss) |  | Total revenue |  | Operating expenses (a) |  | Net operating income (loss)
Philadelphia CBD | $ | 52,640 |  |  | $ | (18,522 | ) |  | $ | 34,118 |  |  | $ | 66,105 |  |  | $ | (24,773 | ) |  | $ | 41,332 |
Pennsylvania Suburbs | 34,649 |  |  | (11,141 | ) |  | 23,508 |  |  | 34,818 |  |  | (11,667 | ) |  | 23,151 |
Austin, Texas | 25,328 |  |  | (9,944 | ) |  | 15,384 |  |  | 26,280 |  |  | (9,302 | ) |  | 16,978 |
Metropolitan Washington, D.C. | 9,675 |  |  | (5,236 | ) |  | 4,439 |  |  | 13,179 |  |  | (5,999 | ) |  | 7,180 |
Other | 3,188 |  |  | (2,374 | ) |  | 814 |  |  | 3,706 |  |  | (2,691 | ) |  | 1,015 |
Corporate | 626 |  |  | (1,782 | ) |  | (1,156 | ) |  | 1,243 |  |  | (1,642 | ) |  | (399 | )
Operating properties | $ | 126,106 |  |  | $ | (48,999 | ) |  | $ | 77,107 |  |  | $ | 145,331 |  |  | $ | (56,074 | ) |  | $ | 89,257 |
| Nine Months Ended September 30,
| 2020 |  | 2019
| Total revenue |  | Operating expenses (a) |  | Net operating income (loss) |  | Total revenue |  | Operating expenses (a) |  | Net operating income (loss)
Philadelphia CBD | $ | 181,203 |  |  | $ | (65,615 | ) |  | $ | 115,588 |  |  | $ | 196,859 |  |  | $ | (75,311 | ) |  | 121,548 |
Pennsylvania Suburbs | 106,569 |  |  | (34,980 | ) |  | 71,589 |  |  | 104,744 |  |  | (36,466 | ) |  | 68,278 |
Austin, Texas | 76,921 |  |  | (30,032 | ) |  | 46,889 |  |  | 77,234 |  |  | (28,182 | ) |  | 49,052 |
Metropolitan Washington, D.C. | 30,520 |  |  | (15,678 | ) |  | 14,842 |  |  | 40,372 |  |  | (18,542 | ) |  | 21,830 |
Other | 10,221 |  |  | (7,434 | ) |  | 2,787 |  |  | 10,352 |  |  | (7,226 | ) |  | 3,126 |
Corporate | 2,597 |  |  | (4,652 | ) |  | (2,055 | ) |  | 3,817 |  |  | (4,969 | ) |  | (1,152 | )
Operating properties | $ | 408,031 |  |  | $ | (158,391 | ) |  | $ | 249,640 |  |  | $ | 433,378 |  |  | $ | (170,696 | ) |  | $ | 262,682 |
(a) | Includes property operating expenses, real estate taxes and third party management expense.
Unconsolidated real estate ventures: |  |  |  |  |  |  |  |
| Investment in real estate ventures |  | Equity in income (loss) of real estate venture
| As of |  | Three Months Ended September 30, |  | Nine Months Ended September 30,
| September 30, 2020 |  | December 31, 2019 |  | 2020 |  | 2019 |  | 2020 |  | 2019
Philadelphia CBD (a) | $ | 277,161 |  |  | $ | 17,524 |  |  | $ | (2,737 | ) |  | $ | 55 |  |  | $ | (2,575 | ) |  | $ | 217 |
Metropolitan Washington, D.C. | 100,325 |  |  | 102,840 |  |  | (1,367 | ) |  | (528 | ) |  | (2,463 | ) |  | (963 | )
MAP Venture (b) | (9,715 | ) |  | (70 | ) |  | (1,684 | ) |  | (1,602 | ) |  | (4,844 | ) |  | (4,414 | )
Other | — |  |  | — |  |  | — |  |  | 110 |  |  | — |  |  | 346 |
Total | $ | 367,771 |  |  | $ | 120,294 |  |  | $ | (5,788 | ) |  | $ | (1,965 | ) |  | $ | (9,882 | ) |  | $ | (4,814 | )
(a) | Increase primarily due to the Commerce Square Venture Transaction. See Note 3, ''Real Estate Investments," for further information.
(b) | Included in "Other liabilities" on the consolidated balance sheets.
Net operating income (“NOI”) is a non-GAAP financial measure, which we define as total revenue less property operating expenses, real estate taxes and third party management expenses. Property operating expenses that are included in determining NOI consist of costs that are necessary and allocable to our operating properties such as utilities, property-level salaries, repairs and maintenance, property insurance and management fees. General and administrative expenses that are not reflected in NOI primarily consist of corporate-level salaries, amortization of share awards and professional fees that are incurred as part of corporate office management. NOI presented by the Company may not be comparable to NOI reported by other companies that define NOI differently. NOI is the measure that is used by the Company’s management to evaluate the operating performance of the Company’s real estate assets by segment. The Company believes NOI provides useful information to investors regarding the financial condition and results of operations because it reflects only those income and expense items that are incurred at the property level. While NOI is a relevant and widely used measure of operating performance of real estate investment trusts, it does not represent cash flow from operations or net income as defined by GAAP and should not be considered as an alternative to those measures in evaluating our liquidity or operating performance. NOI does not reflect interest expenses, real estate impairment losses, depreciation and amortization costs, capital expenditures and leasing costs. The Company believes that net income (loss), as defined by GAAP, is the most appropriate earnings measure. The following is a reconciliation of consolidated net income, as defined by GAAP, to consolidated NOI, (in thousands):
| Three Months Ended September 30, |  | Nine Months Ended September 30,
| 2020 |  | 2019 |  | 2020 |  | 2019
Net income | $ | 276,133 |  |  | $ | 6,820 |  |  | $ | 288,240 |  |  | $ | 17,655 |
Plus: |  |  |  |  |  |  |
Interest expense | 16,310 |  |  | 20,400 |  |  | 56,510 |  |  | 61,273 |
Interest expense - amortization of deferred financing costs | 715 |  |  | 694 |  |  | 2,195 |  |  | 2,026 |
Depreciation and amortization | 43,533 |  |  | 55,627 |  |  | 145,314 |  |  | 158,738 |
General and administrative expenses | 7,069 |  |  | 6,974 |  |  | 23,973 |  |  | 25,217 |
Equity in loss of Real Estate Ventures | 5,788 |  |  | 1,965 |  |  | 9,882 |  |  | 4,814 |
Less: |  |  |  |  |  |  |
Interest income | 467 |  |  | 558 |  |  | 1,487 |  |  | 1,636 |
Income tax (provision) benefit | (2 | ) |  | — |  |  | 224 |  |  | (46 | )
Net gain on disposition of real estate | 271,901 |  |  | 356 |  |  | 274,487 |  |  | 356 |
Net gain on sale of undepreciated real estate | — |  |  | 250 |  |  | 201 |  |  | 1,501 |
Net gain on real estate venture transactions | 75 |  |  | 2,059 |  |  | 75 |  |  | 3,594 |
Consolidated net operating income | $ | 77,107 |  |  | $ | 89,257 |  |  | $ | 249,640 |  |  | $ | 262,682 |

X
- References No definition available. + Details
Name: | us-gaap_SegmentReportingAbstract
Namespace Prefix: | us-gaap_
Data Type: | xbrli:stringItemType
Balance Type: | na
Period Type: | duration

X
- 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
Name: | us-gaap_SegmentReportingDisclosureTextBlock
Namespace Prefix: | us-gaap_
Data Type: | nonnum:textBlockItemType
Balance Type: | na
Period Type: | duration