Segment Reporting

12 Months Ended

Dec. 31, 2021

Segment Reporting [Abstract]

Segment Reporting

Segment Reporting

The Company's reportable operating segments include Same Store, Other Stabilized and Development/Redevelopment. Annually as of January 1, the Company determines which of its communities fall into each of these categories and generally maintains that classification throughout the year for the purpose of reporting segment operations, unless disposition or redevelopment plans regarding a community change.

•Same Store is composed of consolidated communities where a comparison of operating results from the prior year to the current year is meaningful as these communities were owned and had stabilized occupancy as of the beginning of the respective prior year. For the year ended December 31, 2021, Same Store communities are consolidated for financial reporting purposes, had stabilized occupancy as of January 1, 2020, are not conducting or are not probable to conduct substantial redevelopment activities and are not held for sale as of December 31, 2021 or probable for disposition to unrelated third parties within the fiscal year. A community is considered to have stabilized occupancy at the earlier of (i) attainment of 90% physical occupancy or (ii) the one year anniversary of completion of development or redevelopment.

•Other Stabilized is composed of completed consolidated communities that the Company owns and that are not Same Store but which have stabilized occupancy, as defined above, as of January 1, 2021, or which were acquired during the years ended December 31, 2021 or 2020. Other Stabilized includes stabilized operating communities in Charlotte, North Carolina and Dallas, Texas, the two new expansion markets the Company entered in 2021, but excludes communities that are conducting or are probable to conduct substantial redevelopment activities within the fiscal year.

•Development/Redevelopment is composed of (i) consolidated communities that are either currently under construction, or were under construction during the fiscal year, which may be partially or fully complete and operating, (ii) consolidated communities where substantial redevelopment is in progress or is probable to begin during the fiscal year and (iii) communities under lease-up that have been complete for less than one year and have not reached stabilized occupancy, as defined above, as of January 1, 2021.

In addition, the Company owns land for future development and has other corporate assets that are not allocated to an operating segment.

The Company's segment disclosures present the measure(s) used by the chief operating decision maker ("CODM") for purposes of assessing each segment's performance. The Company's CODM is comprised of several members of its executive management team who use net operating income (“NOI”) as the primary financial measure for Same Store communities and Other Stabilized communities. NOI is defined by the Company as total property revenue less direct property operating expenses (including property taxes), and excluding corporate-level income (including management, development and other fees), corporate-level property management and other indirect operating expenses, expensed transaction, development and other pursuit costs, net of recoveries, interest expense, loss on extinguishment of debt, net, general and administrative expense, income from investments in unconsolidated entities, depreciation expense, income tax expense (benefit), casualty and impairment loss, gain on sale of communities, gain on other real estate transactions, net, net for-sale condominium activity and net operating income from real estate assets sold or held for sale. The CODM evaluates the Company's financial performance on a consolidated residential and commercial basis. The Company's commercial results attributable to the non-apartment components of the Company's mixed-use communities and other nonresidential operations represent 1.7%, 0.8% and 1.8% of total NOI for the years ended December 31, 2021, 2020 and 2019, respectively. Although the Company considers NOI a useful measure of a community's or communities' operating performance, NOI should not be considered an alternative to net income or net cash flow from operating activities, as determined in accordance with GAAP. NOI excludes a number of income and expense categories as detailed in the reconciliation of NOI to net income.

A reconciliation of NOI to net income for years ended December 31, 2021, 2020 and 2019 is as follows (dollars in thousands):

	For the year ended
	12/31/21		12/31/20		12/31/19
Net income	$	1,004,356	$	827,706	$	786,103
Property management and other indirect operating expenses, net of corporate income	98,665		97,443		83,008
Expensed transaction, development and other pursuit costs, net of recoveries	3,231		12,399		4,991
Interest expense, net	220,415		214,151		203,585
Loss on extinguishment of debt, net	17,787		9,333		602
General and administrative expense	69,611		60,343		58,042
Income from investments in unconsolidated entities	(38,585)		(6,422)		(8,652)
Depreciation expense	758,596		707,331		661,578
Income tax expense (benefit)	5,733		(3,247)		13,003
Casualty and impairment loss	3,119		—		—
Gain on sale of communities	(602,235)		(340,444)		(166,105)
Gain on other real estate transactions, net	(2,097)		(440)		(439)
Net for-sale condominium activity	977		(2,551)		3,812
Net operating income from real estate assets sold or held for sale	(24,895)		(67,418)		(87,637)
Net operating income	$	1,514,678	$	1,508,184	$	1,551,891

The following is a summary of NOI from real estate assets sold or held for sale for the periods presented (dollars in thousands):

	For the year ended
	12/31/2021		12/31/2020		12/31/2019
Rental income from real estate assets sold or held for sale	$	42,857	$	109,371	$	139,880
Operating expenses from real estate assets sold or held for sale	(17,962)		(41,953)		(52,243)
Net operating income from real estate assets sold or held for sale	$	24,895	$	67,418	$	87,637

The primary performance measure for communities under development or redevelopment depends on the stage of completion. While under development, management monitors actual construction costs against budgeted costs as well as lease-up pace and rent levels compared to budget.

The following table provides details of the Company's segment information as of the dates specified (dollars in thousands). The segments are classified based on the individual community's status at January 1, 2021 for the years ended December 31, 2021 and 2020 and at January 1, 2020, for the year ended December 31, 2019. Segment information for the years ended December 31, 2021, 2020 and 2019 has been adjusted to exclude the real estate assets that were sold from January 1, 2019 through December 31, 2021, or otherwise qualify as held for sale as of December 31, 2021, as described in Note 6, “Real Estate Disposition Activities.”

	Total revenue		NOI		Gross real estate (1)
For the year ended December 31, 2021
Same Store
New England	$	302,919	$	193,415	$	2,787,583
Metro NY/NJ	425,653		289,855		4,112,556
Mid-Atlantic	338,455		227,695		3,583,374
Southeast Florida	31,703		19,689		395,999
Denver, CO	23,742		16,451		320,435
Pacific Northwest	109,907		74,875		1,059,431
Northern California	361,910		256,417		3,469,149
Southern California	451,884		310,048		4,396,416
Total Same Store	2,046,173		1,388,445		20,124,943
Other Stabilized	104,357		71,014		1,796,752
Development / Redevelopment	98,379		55,219		2,574,352
Land Held for Development	N/A		N/A		147,546
Non-allocated (3)	3,084		N/A		257,536
Total	$	2,251,993	$	1,514,678	$	24,901,129
For the period ended December 31, 2020
Same Store
New England	$	305,262	$	200,028	$	2,761,655
Metro NY/NJ	425,946		294,086		4,083,641
Mid-Atlantic	345,003		239,228		3,557,724
Southeast Florida	29,151		15,730		393,926
Denver, CO	21,293		13,796		319,562
Pacific Northwest	110,976		77,324		1,052,903
Northern California	400,934		298,176		3,438,290
Southern California	443,618		306,344		4,358,217
Total Same Store (2)	2,082,183		1,444,712		19,965,918
Other Stabilized	79,431		52,614		1,081,327
Development / Redevelopment	28,298		10,858		1,917,913
Land Held for Development	N/A		N/A		110,142
Non-allocated (3)	1,978		N/A		367,190
Total	$	2,191,890	$	1,508,184	$	23,442,490
For the year ended December 31, 2019
Same Store
New England	$	287,144	$	193,106	$	2,475,513
Metro NY/NJ	429,154		303,859		3,946,221
Mid-Atlantic	351,680		250,142		3,484,610
Southeast Florida	17,709		9,861		242,843
Denver, CO	5,694		3,716		77,513
Pacific Northwest	107,417		78,063		956,755
Northern California	397,593		305,450		3,186,075
Southern California	444,184		316,819		4,083,946
Total Same Store (2)	2,040,575		1,461,016		18,453,476
Other Stabilized	110,434		74,814		1,587,397
Development / Redevelopment	28,777		16,061		2,086,519
Land Held for Development	N/A		N/A		—
Non-allocated (3)	4,960		N/A		559,777
Total	$	2,184,746	$	1,551,891	$	22,687,169

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(1)     Does not include gross real estate assets held for sale of $26,176 as of December 31, 2021 and gross real estate assets either sold or classified as held for sale subsequent to December 31, 2020 and 2019 of $474,792 and $871,291, respectively.

(2)     Gross real estate for the Company's Same Store includes capitalized additions of approximately $158,991, $126,548 and $128,324 in 2021, 2020 and 2019, respectively.

(3)     Revenue represents third-party management, accounting, and developer fees and miscellaneous income and other ancillary items which are not allocated to a reportable segment. Gross real estate includes the for-sale residential condominiums at The Park Loggia, as discussed in Note 6, "Real Estate Disposition Activities."