Segment Information

6 Months Ended

Jun. 30, 2016

Segment Reporting, Measurement Disclosures [Abstract]

Segment Information

Segment Information

The Company owns and operates industrial properties nationally and owns and operates office properties in a focused group of office markets. Additionally, the Company owns certain assets in the United Kingdom. During the six months ended June 30, 2016, the Company realigned its reportable segments as follows:

• Carolinas/Richmond;

• Chicago/Milwaukee;

• Florida;

• Houston;

• Lehigh/Central PA;

• Minnesota;

• Philadelphia;

• Southeastern PA; and

• United Kingdom.

Certain other segments are aggregated into an "Other" category which includes the reportable segments: Arizona; Atlanta; Cincinnati/Columbus/Indianapolis; Dallas; DC Metro; New Jersey; Northern Virginia; Southern California; and other.

Comparative prior periods have been restated to reflect current segment disclosures.

The Company evaluates the performance of its reportable segments based on net operating income. Net operating income includes operating revenue from external customers, real estate taxes, amortization of lease transaction costs and other operating expenses which relate directly to the management and operation of the assets within each reportable segment.

The Company's accounting policies for the segments are the same as those used in the Company's consolidated financial statements. There are no material inter-segment transactions.

The operating information by reportable segment is as follows (in thousands):

		Three Months						Six Months
		Ended June 30,						Ended June 30,
		2016			2015			2016			2015
Operating revenue
	Carolinas/Richmond	$	16,174		$	20,212		$	31,934		$	40,547
	Chicago/Milwaukee	10,319			8,931			20,512			18,724
	Florida	27,798			31,424			57,115			62,358
	Houston	14,204			13,151			28,971			25,474
	Lehigh/Central PA	33,782			32,844			68,025			66,398
	Minnesota	11,572			12,276			22,918			24,948
	Philadelphia	10,386			9,889			20,741			19,871
	Southeastern PA	24,343			38,473			50,226			77,712
	United Kingdom	3,525			3,965			7,077			7,690
	Other	34,444			32,439			69,441			66,834
Segment-level operating revenue		186,547			203,604			376,960			410,556
Reconciliation to total operating revenues
	Other	107			(86		)	(165		)	(137		)
Total operating revenue		$	186,654		$	203,518		$	376,795		$	410,419
Net operating income
	Carolinas/Richmond	$	11,219		$	13,361		$	22,059		$	26,208
	Chicago/Milwaukee	7,022			6,125			13,815			12,868
	Florida	16,741			19,459			34,788			38,561
	Houston	8,036			7,689			16,869			14,910
	Lehigh/Central PA	24,755			23,647			48,957			46,618
	Minnesota	4,850			5,149			9,428			11,134
	Philadelphia	7,981			7,310			15,339			14,332
	Southeastern PA	14,549			21,426			28,300			42,414
	United Kingdom	2,438			2,782			4,842			5,298
	Other	22,953			21,516			45,779			44,387
Segment-level net operating income		120,544			128,464			240,176			256,730
Reconciliation to net income
	Interest expense	(30,131		)	(35,066		)	(61,543		)	(69,736		)
	Depreciation/amortization expense (1)	(39,161		)	(41,772		)	(78,959		)	(85,281		)
	Impairment - real estate assets	—			(1,036		)	—			(16,775		)
	Gain on property dispositions	3,832			1,249			24,353			3,520
	Equity in earnings (loss) of unconsolidated joint ventures	5,583			(5,254		)	10,497			1,652
	General and administrative expense (1)	(10,135		)	(9,128		)	(24,927		)	(19,437		)
	Income taxes (1)	(653		)	(1,051		)	(1,222		)	(1,757		)
	Other	1,178			120			1,745			(528		)
Net income		$	51,057		$	36,526		$	110,120		$	68,388

(1) Excludes costs which are included in determining segment-level net operating income.

During the six months ended June 30, 2016, the Company acquired one operating property for a purchase price of $8.0 million. This property, comprising 73,000 square feet of leaseable space, is located in the Company's Chicago/Milwaukee reportable segment.

The Company's sales by reportable segment for the three and six months ended June 30, 2016 are as follows:

	Three Months Ended June 30, 2016				Six Months Ended June 30, 2016
	Properties Sold	Square Feet (000s)	Gross Proceeds (000s)		Properties Sold	Square Feet (000s)	Gross Proceeds (000s)
Minnesota	—	—	$	—	1	92	$	9,200
Florida	—	—	—		6	574	111,828		(1	)
Other	1	198	12,000		2	381	22,100
Total	1	198	$	12,000	9	1,047	$	143,128

(1) Includes gross proceeds from the sale of 3.5 acres of land.

One property totaling 80,000 square feet in the Company's reportable segment classified as "other" was considered held for sale as of June 30, 2016.

The Company's total assets by reportable segment as of June 30, 2016 and December 31, 2015 is as follows (in thousands):

	June 30, 2016		December 31, 2015
Carolinas/Richmond	$	486,825	$	467,098
Chicago/Milwaukee	438,453		429,390
Florida	788,874		874,352
Houston	527,209		522,285
Lehigh/Central PA	1,243,814		1,157,468
Minnesota	343,473		346,840
Philadelphia	492,193		444,889
Southeastern PA	442,661		448,523
United Kingdom	184,276		215,850
Other	1,580,483		1,586,481
Segment-level total assets	6,528,261		6,493,176
Corporate Other	56,607		64,453
Total assets	$	6,584,868	$	6,557,629