Segment Information

The Company has two reportable segments, real estate and debt and preferred equity investments. 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, insurance, 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 consolidated results of operations for the three and six months ended June 30, 2018 and 2017, and selected asset information as of June 30, 2018 and December 31, 2017, regarding our operating segments are as follows (in thousands):



	Real Estate Segment			Debt and Preferred Equity Segment		Total Company
Total revenues
Three months ended:
June 30, 2018	$	251,843		$	49,273	$	301,116
June 30, 2017	337,528			60,622		398,150
Six months ended:
June 30, 2018	508,248			94,563		602,811
June 30, 2017	674,610			100,921		775,531
Net income (loss) before equity in net gain on sale of interest in unconsolidated joint venture/real estate, purchase price and other fair value adjustments, (loss) gain on sale of real estate net, depreciable real estate reserves, and gain on sale of marketable securities
Three months ended:
June 30, 2018	$	13,239		$	34,276	$	47,515
June 30, 2017	(16,232		)	52,045		35,813
Six months ended:
June 30, 2018	27,263			67,701		94,964
June 30, 2017	(2,425		)	89,558		87,133
Total assets
As of:
June 30, 2018	$	11,249,972		$	2,463,956	$	13,713,928
December 31, 2017	11,631,700			2,351,204		13,982,904

Net income (loss) before equity in net gain on sale of interest in unconsolidated joint venture/real estate, purchase price and other fair value adjustments, (loss) gain on sale of real estate net, depreciable real estate reserves, and gain on sale of marketable securities 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 borrowings on the 2016 MRA and 2017 MRA. Interest is imputed on the investments that do not collateralize the 2016 MRA or 2017 MRA 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 three and six months ended June 30, 2018, marketing, general and administrative expenses totaled $22.5 million, and $46.0 million, respectively. For the three and six months ended June 30, 2017, marketing, general and administrative expenses totaled $24.3 million, and $48.4 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 net income before equity in net gain on sale of interest in unconsolidated joint venture/real estate, purchase price and other fair value adjustments, (loss) gain on sale of real estate, net, depreciable real estate reserves, and gain on sale of investment in marketable securities to net income for the three and six months ended June 30, 2018 and 2017 (in thousands):



	Three Months Ended June 30,						Six Months Ended June 30,
	2018			2017			2018		2017
Net income (loss) before equity in net gain on sale of interest in unconsolidated joint venture/real estate, purchase price and other fair value adjustments, (loss) gain on sale of real estate net, depreciable real estate reserves, and gain on sale of marketable securities	$	47,515		$	35,813		$	94,964	$	87,133
Equity in net gain on sale of interest in unconsolidated joint venture/real estate	72,025			13,089			65,585		15,136
Purchase price and other fair value adjustments	11,149			—			60,442		—
(Loss) gain on sale of real estate, net	(14,790		)	(3,823		)	8,731		(3,256		)
Depreciable real estate reserves	—			(29,064		)	—		(85,336		)
Gain on sale of investment in marketable securities	—			—			—		3,262
Net income	$	115,899		$	16,015		$	229,722	$	16,939