The Company's long-term portfolio strategy has been to principally focus on three asset classes - retail, lodging, and student housing. During the three and nine months ended September 30, 2014, the Company continued to execute on that strategy by disposing of 236 non-core assets as well as classifying 52 select service lodging properties as held for sale. In 2013, the Company restated its business segments. All non-strategic assets have been included in the non-core segment. The non-core segment includes office properties, industrial properties, bank branches, single-tenant retail properties, and conventional multi-family properties. The Company has concentrated its efforts on driving portfolio growth in the retail, student housing and lodging segments to enhance the long-term value of each segment's portfolio and respective platforms. By tailoring, expanding and refining these three components of the Company's portfolio, its goals are to enhance long-term stockholder value and position the Company to explore various strategic transactions designed to provide liquidity events for its stockholders. For its non-core properties, the Company strives to improve individual property performance to increase each property’s value. The Company evaluates segment performance primarily based on net operating income. Net operating income of the segments exclude interest expense, depreciation and amortization, general and administrative expenses, net income of noncontrolling interest and other investment income from corporate investments. The non-segmented assets primarily include the Company’s cash and cash equivalents, investment in marketable securities, construction in progress, investment in unconsolidated entities and notes receivable.

For the nine months ended September 30, 2014, approximately 15% of the Company’s rental revenue, included in the non-core segment, was generated by three properties leased to AT&T, Inc. As a result of the concentration of revenue generated from these properties, if AT&T were to cease paying rent or fulfilling its other monetary obligations, the Company could have significantly reduced rental revenues or higher expenses until the defaults were cured or the properties were leased to a new tenant or tenants.

The following table summarizes net property operations income by segment as of and for the three months ended September 30, 2014.



	Total			Retail		Lodging		Student Housing		Non-Core
Rental income	$	92,975		$	50,671	$	—	$	17,587	$	24,717
Straight line adjustment	930			1,579		—		17		(666		)
Tenant recovery income	15,055			14,064		—		134		857
Other property income	1,819			663		—		1,119		37
Lodging income	231,044			—		231,044		—		—
Total income	341,823			66,977		231,044		18,857		24,945
Operating expenses	197,375			21,630		160,534		11,564		3,647
Net operating income	$	144,448		45,347		70,510		7,293		21,298
Non-allocated expenses (a)	(100,563		)
Other income and expenses (b)	1,418
Equity in loss of unconsolidated entities (c)	(2,089		)
Provision for asset impairment (d)	(2,337		)
Net income from continuing operations	40,877
Net income from discontinued operations	11,683
Less: net income attributable to noncontrolling interests	(8		)
Net income attributable to Company	$	52,552


(a)	Non-allocated expenses consists of general and administrative expenses and depreciation and amortization.


(b)	Other income and expenses consists of gain on sale of investment properties, interest and dividend income, interest expense, other income, realized gain on sale of marketable securities, net, and income tax expense.


(c)	Equity in loss of unconsolidated entities includes the gain, (loss) and (impairment) of investment in unconsolidated entities.


(d)	Total provision for asset impairment included $1,667 related to one lodging property and $670 related to one non-core property.

The following table summarizes net property operations income by segment as of and for the three months ended September 30, 2013.



	Total			Retail		Lodging		Student Housing		Non-Core
Rental income	$	91,620		$	51,180	$	—	$	15,022	$	25,418
Straight line adjustment	1,763			1,038		—		154		571
Tenant recovery income	16,669			15,108		—		114		1,447
Other property income	2,114			1,271		—		768		75
Lodging income	156,670			—		156,670		—		—
Total income	268,836			68,597		156,670		16,058		27,511
Operating expenses	143,713			21,691		110,264		7,360		4,398
Net operating income	$	125,123		46,906		46,406		8,698		23,113
Non-allocated expenses (a)	(88,389		)
Other income and expenses (b)	(29,747		)
Equity in loss of unconsolidated entities (c)	(2,471		)
Provision for asset impairment (d)	(39,942		)
Net loss from continuing operations	(35,426		)
Net income from discontinued operations	272,967
Less: net income attributable to noncontrolling interests	(8		)
Net income attributable to Company	$	237,533


(a)	Non-allocated expenses consists of general and administrative expenses, Business Manager management fee and depreciation and amortization.


(b)	Other income and expenses consists of gain on sale of investment properties, interest and dividend income, interest expense, other income, realized gain on sale of marketable securities, net, and income tax expense.


(c)	Equity in loss of unconsolidated entities includes the gain, (loss) and (impairment) of investment in unconsolidated entities.


(d)	Total provision for asset impairment included $26,175 related to two lodging properties, $11,723 related to three retail properties and $2,044 related to four non-core properties.

The following table summarizes net property operations income by segment as of and for the nine months ended September 30, 2014.



	Total			Retail		Lodging		Student Housing		Non-Core
Rental income	$	283,157		$	152,971	$	—	$	51,896	$	78,290
Straight line adjustment	3,143			3,942		—		193		(992		)
Tenant recovery income	50,396			45,433		—		400		4,563
Other property income	6,766			3,467		—		3,119		180
Lodging income	696,587			—		696,587		—		—
Total income	1,040,049			205,813		696,587		55,608		82,041
Operating expenses	585,393			65,872		481,025		25,636		12,860
Net operating income	$	454,656		139,941		215,562		29,972		69,181
Non-allocated expenses (a)	(288,003		)
Other income and expenses (b)	(57,253		)
Equity in earnings of unconsolidated entities (c)	4,843
Provision for asset impairment (d)	(80,281		)
Net income from continuing operations	33,962
Net income from discontinued operations	158,577
Less: net income attributable to noncontrolling interests	(16		)
Net income attributable to Company	$	192,523
Balance Sheet Data:
Real estate assets, net (e)	$	6,021,773		$	2,084,705	$	2,616,032	$	622,158	$	698,878
Non-segmented assets (f)	$	2,260,000
Total Assets	$	8,281,773

Capital expenditures	$	41,124		$	12,865	$	26,388	$	231	$	1,640


(a)	Non-allocated expenses consists of general and administrative expenses, Business Manager management fee and depreciation and amortization.


(b)	Other income and expenses consists of gain on sale of investment properties, interest and dividend income, interest expense, other income, realized gain on sale of marketable securities, net, and income tax expense.


(c)	Equity in earnings of unconsolidated entities includes the gain, (loss) and (impairment) of investment in unconsolidated entities.


(d)	Total provision for asset impairment included $4,665 related to two lodging properties and $75,616 related to five non-core properties.


(e)	Real estate assets includes intangible assets, net of amortization.


(f)	Construction in progress is included as non-segmented assets.

The following table summarizes net property operations income by segment as of and for the nine months ended September 30, 2013.



	Total			Retail		Lodging		Student Housing		Non-Core
Rental income	$	277,936		$	162,977	$	—	$	38,360	$	76,599
Straight line adjustment	4,526			4,380		—		261		(115		)
Tenant recovery income	53,459			48,801		—		347		4,311
Other property income	5,501			3,196		—		2,009		296
Lodging income	446,791			—		446,791		—		—
Total income	788,213			219,354		446,791		40,977		81,091
Operating expenses	411,686			69,529		311,931		17,138		13,088
Net operating income	$	376,527		149,825		134,860		23,839		68,003
Non-allocated expenses (a)	(264,998		)
Other income and expenses (b)	(85,380		)
Equity in earnings of unconsolidated entities (c)	5,005
Provision for asset impairment (d)	(225,009		)
Net loss from continuing operations	(193,855		)
Net income from discontinued operations	403,136
Less: net income attributable to noncontrolling interests	(16		)
Net income attributable to Company	$	209,265


(a)	Non-allocated expenses consists of general and administrative expenses, Business Manager management fee and depreciation and amortization.


(b)	Other income and expenses consists of gain on sale of investment properties, interest and dividend income, interest expense, other income, realized gain on sale of marketable securities, net, and income tax expense.


(c)	Equity in earnings of unconsolidated entities includes the gain, (loss) and (impairment) of investment in unconsolidated entities.


(d)	Total provision for asset impairment included $26,175 related to two lodging properties, $21,179 related to four retail properties and $177,655 related to eleven non-core properties.