Segment Information

9 Months Ended

Sep. 30, 2015

Segment Reporting [Abstract]

Segment Information

Segment Information

The Company is a REIT engaged in all aspects of property ownership and management including investment, leasing operations, capital improvements, development and redevelopment, financing, construction and maintenance in the New York Metropolitan area and have two reportable segments, real estate and debt and preferred equity. We evaluate real estate performance and allocate resources based on earnings contribution to income from continuing operations.

The primary sources of revenue are generated from tenant rents and escalations and reimbursement revenue. Real estate property operating expenses consist primarily of security, maintenance, utility costs, real estate taxes and ground rent expense (at certain applicable properties). See Note 5, "Debt and Preferred Equity Investments," for additional details on our debt and preferred equity investments.

Selected results of operations for the three and nine months ended September 30, 2015 and 2014, and selected asset information as of September 30, 2015 and December 31, 2014, regarding our operating segments are as follows (in thousands):

	Real Estate Segment			Debt and Preferred Equity Segment		Total Company
Total revenues
Three months ended:
September 30, 2015	$	382,738		$	49,328	$	432,066
September 30, 2014	346,305			43,969		390,274
Nine months ended:
September 30, 2015	$	1,100,851		$	136,588	$	1,237,439
September 30, 2014	995,584			137,767		1,133,351
(Loss) income from continuing operations before equity in net gain on sale of interest in unconsolidated joint venture/real estate and purchase price fair value adjustment
Three months ended:
September 30, 2015	$	(22,486	)	$	43,480	$	20,994
September 30, 2014	(10,542		)	38,098		27,556
Nine months ended:
September 30, 2015	$	(81,405	)	$	114,677	$	33,272
September 30, 2014	13,148			117,673		130,821
Total assets
As of:
September 30, 2015	$	17,966,608		$	1,523,961	$	19,490,569
December 31, 2014	15,671,662			1,424,925		17,096,587

Income from continuing operations represents total revenues less total expenses for the real estate segment and total investment income less allocated interest expense for the debt and preferred equity segment. Interest costs for the debt and preferred equity segment are imputed assuming the portfolio is 100% leveraged by our 2012 revolving credit facility and corporate borrowing cost. We also allocate loan loss reserves, net of recoveries, and transaction related costs to the debt and preferred equity segment. We do not allocate marketing, general and administrative expenses (totaling $23.5 million, $72.1 million, $22.6 million and $69.8 million for the three and nine months ended September 30, 2015 and 2014, respectively) to the debt and preferred equity segment since we base performance on the individual segments prior to allocating marketing, general and administrative expenses. All other expenses, except interest, relate entirely to the real estate assets.

There were no transactions between the above two segments.

The table below reconciles income from continuing operations to net income for the three and nine months ended September 30, 2015 and 2014 (in thousands):

	Three Months Ended September 30,						Nine Months Ended September 30,
	2015			2014			2015			2014
Income from continuing operations before equity in net gain on sale of interest in unconsolidated joint venture/real estate, purchase price fair value adjustment, gain on sale of real estate and purchase price fair value adjustment	$	20,994		$	27,556		$	33,272		$	130,821
Equity in net gain on sale of interest in unconsolidated joint venture/real estate	15,281			16,496			16,050			122,580
Purchase price fair value adjustment	—			(4,000		)	—			67,446
Gain on sale of real estate	159,704			—			159,704			—
Depreciable real estate reserves	(19,226		)	—			(19,226		)	—
Income from continuing operations	176,753			40,052			189,800			320,847
Net income from discontinued operations	—			4,035			427			15,449
Gain on sale of discontinued operations	—			29,507			12,983			144,242
Net income	$	176,753		$	73,594		$	203,210		$	480,538