Business Segments

3 Months Ended

Mar. 31, 2017

Segment Reporting [Abstract]

Business Segments

NOTE 10. BUSINESS SEGMENTS

Our current business strategy consists of two operating segments: Real Estate Operations and Strategic Capital. We generate revenues, earnings, net operating income and cash flows through our segments, as follows:

• Real Estate Operations. This operating segment represents the ownership and development of operating properties and is the largest component of our revenues and earnings. We collect rent from our customers through operating leases, including reimbursements for the majority of our property operating costs. Each operating property is considered to be an individual operating segment with similar economic characteristics; these properties are combined within the reportable segment based on geographic location. Our Real Estate Operations segment also includes development activities that lead to rental operations, including land held for development and properties currently under development. Within this line of business, we utilize the following: (i) our land bank; (ii) the development expertise of our local teams; (iii) our customer relationships; and (iv) our in-depth knowledge in connection with our development activities. Land we own and lease to customers under ground leases is also included in this segment.

• Strategic Capital. This operating segment represents the management of unconsolidated co-investment ventures. We generate strategic capital revenues from our unconsolidated co-investment ventures through asset management and property management services and we earn additional revenues by providing leasing, acquisition, construction, development, financing and disposition services. Depending on the structure of the venture and the returns provided to our partners, we also earn revenues through promotes periodically during the life of a venture or upon liquidation. Each unconsolidated co-investment venture we manage is considered to be an individual operating segment with similar economic characteristics; these ventures are combined within the reportable segment based on geographic location.

Reconciliations are presented below for: (i) each reportable business segment’s revenues from external customers to Total Revenues; (ii) each reportable business segment’s net operating income from external customers to Operating Income and Earnings Before Income Taxes; and (iii) each reportable business segment’s assets to Total Assets. Our chief operating decision makers rely primarily on net operating income and similar measures to make decisions about allocating resources and assessing segment performance. The applicable components of Total Revenues, Operating Income, Earnings Before Income Taxes and Total Assets are allocated to each reportable business segment’s revenues, net operating income and assets. Items that are not directly assignable to a segment, such as certain corporate income and expenses, are not allocated but reflected as reconciling items. The following reconciliations are presented in thousands:

	Three Months Ended
	March 31,
		2017			2016
Revenues:
Real estate operations segment:
U.S.	$	524,147		$	511,157
Other Americas		15,089			13,935
Europe		18,231			16,475
Asia		14,643			13,730
Total real estate operations segment		572,110			555,297
Strategic capital segment:
U.S.		11,908			9,356
Other Americas		6,051			5,386
Europe		26,262			22,583
Asia		12,824			13,678
Total strategic capital segment		57,045			51,003
Total revenues	$	629,155		$	606,300
Segment net operating income:
Real estate operations segment:
U.S.	$	384,100		$	375,717
Other Americas		9,982			8,193
Europe		12,858			11,305
Asia		9,908			8,816
Total real estate operations segment		416,848			404,031
Strategic capital segment:
U.S.		1,939			1,710
Other Americas		3,145			3,136
Europe		16,390			15,620
Asia		3,772			5,244
Total strategic capital segment		25,246			25,710
Total segment net operating income		442,094			429,741
Reconciling items:
General and administrative expenses		53,617			50,543
Depreciation and amortization expenses		226,591			250,000
Operating income		161,886			129,198
Earnings from unconsolidated entities, net		48,605			58,311
Interest expense		(72,912	)		(80,812	)
Interest and other income, net		2,785			2,591
Gains on dispositions of investments in real estate, net		97,325			144,317
Foreign currency and derivative losses, net		(7,400	)		(14,211	)
Losses on early extinguishment of debt, net		-			(1,052	)
Earnings before income taxes	$	230,289		$	238,342

	March 31,		December 31,
		2017		2016
Assets:
Real estate operations segment:
U.S.	$	21,276,254	$	21,286,422
Other Americas		1,005,827		978,476
Europe		1,119,860		1,346,589
Asia		980,665		936,462
Total real estate operations segment		24,382,606		24,547,949
Strategic capital segment:
U.S.		17,772		18,090
Europe		43,781		47,635
Asia		1,161		1,301
Total strategic capital segment		62,714		67,026
Total segment assets		24,445,320		24,614,975
Reconciling items:
Investments in and advances to unconsolidated entities		4,305,881		4,230,429
Assets held for sale or contribution		439,743		322,139
Notes receivable backed by real estate		17,006		32,100
Cash and cash equivalents		395,829		807,316
Other assets		211,179		242,973
Total reconciling items		5,369,638		5,634,957
Total assets	$	29,814,958	$	30,249,932