Segment Information

The Company is a REIT engaged in all aspects of property ownership and management including investment, leasing operations, capital improvements, development, 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 years ended December 31, 2017, 2016, and 2015, and selected asset information as of December 31, 2017 and 2016, regarding our operating segments are as follows (in thousands):



	Real Estate Segment			Debt and Preferred Equity Segment		Total Company
Total revenues
Years ended:
December 31, 2017	$	1,317,602		$	193,871	$	1,511,473
December 31, 2016	1,650,973			213,008		1,863,981
December 31, 2015	1,481,701			181,128		1,662,829
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, depreciable real estate reserves, loss on early extinguishment of debt, and gain (loss) on sale of marketable securities
Years ended:
December 31, 2017	$	16,557		$	170,363	$	186,920
December 31, 2016	(197,000		)	204,256		7,256
December 31, 2015	(71,634		)	161,923		90,289
Total assets
As of:
December 31, 2017	$	11,696,560		$	2,286,344	$	13,982,904
December 31, 2016	13,868,672			1,989,115		15,857,787

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 includes actual costs incurred for investments collateralizing the MRA. Interest is imputed on the remaining investments using our 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 to the debt and preferred equity segment since the use of personnel and resources is dependent on transaction volume between the two segments and varies period over period. In addition, we base performance on the individual segments prior to allocating marketing, general and administrative expenses. For the years ended, December 31, 2016, 2015, and 2014 marketing, general and administrative expenses totaled $100.5 million, $99.8 million, and $94.9 million respectively. 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 years ended December 31, 2017, 2016, and 2015 (in thousands):



	Year ended December 31,
	2017			2016			2015
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, depreciable real estate reserves, loss on early extinguishment of debt, and gain (loss) on sale of marketable securities	$	186,920		$	7,256		$	90,289
Equity in net gain on sale of interest in unconsolidated joint venture/real estate	16,166			44,009			15,844
Purchase price fair value adjustment	—			—			40,078
Gain on sale of real estate, net	73,241			238,116			175,974
Depreciable real estate reserves	(178,520		)	(10,387		)	(19,226		)
Loss on early extinguishment of debt	—			—			(49		)
Gain (loss) on sale of investment in marketable securities	3,262			(83		)	—
Income from continuing operations	101,069			278,911			302,910
Net income from discontinued operations	—			—			427
Gain on sale of discontinued operations	—			—			14,122
Net income	$	101,069		$	278,911		$	317,459