Business Segments

12 Months Ended

Dec. 31, 2021

Segment Reporting [Abstract]

Business Segments

NOTE 17. BUSINESS SEGMENTS

Our current business strategy includes 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 revenue 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 business 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, and other real estate investments. Within this line of business, we utilize the following: (i) our land bank; (ii) the development expertise of our local teams; and (iii) our customer relationships. Land we own and lease to customers under land leases, along with land and buildings we lease, is also included in this segment.

• Strategic Capital. This operating segment represents the management of unconsolidated co-investment ventures. We generate strategic capital revenues primarily 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 business 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:

	Years Ended December 31,
		2021			2020			2019
Revenues:
Real estate operations segment:
U.S.	$	3,967,180		$	3,600,335		$	2,645,194
Other Americas		98,620			87,830			94,984
Europe		55,533			68,801			44,356
Asia		47,357			44,782			54,201
Total real estate operations segment		4,168,690			3,801,748			2,838,735
Strategic capital segment:
U.S.		171,761			354,825			86,271
Other Americas		58,655			37,696			40,347
Europe		249,600			145,016			283,909
Asia		110,734			99,450			81,359
Total strategic capital segment		590,750			636,987			491,886
Total revenues		4,759,440			4,438,735			3,330,621
Segment net operating income:
Real estate operations segment:
U.S. (1)		2,966,498			2,679,685			1,953,727
Other Americas		72,424			64,473			69,393
Europe		31,163			43,531			27,525
Asia		34,854			31,986			40,675
Total real estate operations segment		3,104,939			2,819,675			2,091,320
Strategic capital segment:
U.S. (1)		59,991			237,271			(10,945	)
Other Americas		47,247			24,923			27,369
Europe		203,779			99,504			246,213
Asia		72,562			57,248			44,588
Total strategic capital segment		383,579			418,946			307,225
Total segment net operating income		3,488,518			3,238,621			2,398,545
Reconciling items:
General and administrative expenses		(293,167	)		(274,845	)		(266,718	)
Depreciation and amortization expenses		(1,577,942	)		(1,561,969	)		(1,139,879	)
Gains on dispositions of development properties and land, net		817,017			464,942			467,577
Gains on other dispositions of investments in real estate, net		772,570			252,195			390,241
Operating income		3,206,996			2,118,944			1,849,766
Earnings from unconsolidated entities, net		404,255			297,370			200,178
Interest expense		(266,228	)		(314,507	)		(239,953	)
Interest and other income, net		871			1,044			24,213
Foreign currency and derivative gains (losses), net		164,407			(167,473	)		(41,715	)
Losses on early extinguishment of debt, net		(187,453	)		(188,290	)		(16,126	)
Earnings before income taxes	$	3,322,848		$	1,747,088		$	1,776,363

	December 31,
		2021		2020
Segment assets:
Real estate operations segment:
U.S.	$	44,136,140	$	42,559,023
Other Americas		1,148,371		1,145,699
Europe		1,837,800		1,604,393
Asia		965,854		1,081,876
Total real estate operations segment		48,088,165		46,390,991
Strategic capital segment (2):
U.S.		11,984		13,257
Europe		25,280		25,280
Asia		299		354
Total strategic capital segment		37,563		38,891
Total segment assets		48,125,728		46,429,882
Reconciling items:
Investments in and advances to unconsolidated entities		8,610,958		7,602,014
Assets held for sale or contribution		669,688		1,070,724
Cash and cash equivalents		556,117		598,086
Other assets		523,729		364,299
Total reconciling items		10,360,492		9,635,123
Total assets	$	58,486,220	$	56,065,005

(1) This includes compensation and personnel costs for employees who were located in the U.S. but also support other geographies.

(2) Represents management contracts and goodwill recorded in connection with business combinations associated with the Strategic Capital segment. Goodwill was $25.3 million at December 31, 2021 and 2020.