Segment Information

12 Months Ended

Dec. 31, 2014

Segment Reporting [Abstract]

Segment Reporting Disclosure [Text Block]

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 year ended December 31, 2014, the Company realigned its reportable segments as follows.

• Carolinas;

• Chicago/Milwaukee;

• Houston;

• Lehigh/Central PA;

• Minnesota;

• Orlando;

• Philadelphia;

• Richmond/Hampton Roads;

• Southeastern PA;

• South Florida;

• Tampa;

• United Kingdom.

Certain other segments are aggregated into an "Other" category which includes the reportable segments: Arizona; Atlanta; Cincinnati/Columbus/Indianapolis; Dallas; Jacksonville; Maryland; New Jersey; Northern Virginia; Southern California; Washington D.C. 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):

		Year ended
		December 31,
		2014			2013			2012
Operating revenue
	Carolinas	$	35,870		$	30,243		$	28,667
	Chicago/Milwaukee	33,068			18,083			9,780
	Houston	49,309			37,773			30,172
	Lehigh/Central PA	118,145			101,101			96,804
	Minnesota	54,892			62,415			57,331
	Orlando	32,674			31,400			30,844
	Philadelphia	35,238			31,690			28,153
	Richmond/Hampton Roads	40,911			40,247			41,395
	South Florida	48,804			38,464			35,628
	Southeastern PA	148,714			165,248			169,645
	Tampa	53,725			52,230			46,627
	United Kingdom	16,360			7,669			4,690
	Other	130,013			142,402			117,562
Segment-level operating revenue		797,723			758,965			697,298
Reconciliation to total operating revenues
	Discontinued operations	(4,728		)	(113,586		)	(137,476		)
	Other	(364		)	551			457
Total operating revenue		$	792,631		$	645,930		$	560,279
Net operating income
	Carolinas	$	24,578		$	20,434		$	18,733
	Chicago/Milwaukee	20,856			11,726			5,329
	Houston	29,134			22,632			17,862
	Lehigh/Central PA	82,050			68,504			65,566
	Minnesota	26,464			30,016			26,348
	Orlando	21,472			20,506			20,153
	Philadelphia	26,722			23,587			20,527
	Richmond/Hampton Roads	24,357			24,063			24,762
	South Florida	27,947			20,943			18,921
	Southeastern PA	81,183			91,193			98,729
	Tampa	33,776			33,042			28,350
	United Kingdom	10,704			2,597			(257		)
	Other	83,991			81,435			64,207
Segment-level net operating income		493,234			450,678			409,230
Reconciliation to income from continuing operations
	Interest expense (1)	(152,444		)	(143,018		)	(123,146		)
	Depreciation/amortization expense (1) (2)	(177,715		)	(138,128		)	(104,643		)
	Gain on property dispositions	45,030			—			—
	Equity in earnings (loss) of unconsolidated joint ventures	10,314			6,067			(681		)
	General and administrative expense (1) (2)	(38,041		)	(50,998		)	(40,831		)
	Discontinued operations excluding gain on property dispositions	(1,950		)	(26,455		)	(38,578		)
	Income taxes (2)	(2,781		)	(2,748		)	(874		)
	Other	(65		)	2,357			(3,730		)
Income from continuing operations		$	175,582		$	97,755		$	96,747

(1) Includes activity on discontinued operations.

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

The amount of depreciation and amortization expense related to tenant improvement and lease transaction costs within each reporting segment for the Net operating income calculation is as follows:

	Year ended
	December 31,
	2014		2013		2012
Carolinas	$	2,329	$	1,935	$	1,726
Chicago/Milwaukee	466		251		233
Houston	3,988		3,200		2,608
Lehigh/Central PA	10,157		9,781		9,753
Minnesota	4,478		5,797		5,132
Orlando	3,116		3,037		2,804
Philadelphia	1,803		1,729		1,724
Richmond/Hampton Roads	4,278		4,156		4,157
South Florida	2,824		2,979		3,083
Southeastern PA	12,272		15,040		14,109
Tampa	3,384		3,033		2,959
United Kingdom	177		172		269
Other	5,631		13,439		13,061
Depreciation and amortization of tenant improvement and lease transaction costs	$	54,903	$	64,549	$	61,618

The Company's operating revenue by product type and by reportable segment for the years ended December 31, 2014, 2013 and 2012 is as follows (in thousands):

	Year Ended
	December 31, 2014							December 31, 2013							December 31, 2012
	Industrial		Office		Total			Industrial		Office		Total			Industrial		Office		Total
Carolinas	$	35,870	$	—	$	35,870		$	30,243	$	—	$	30,243		$	26,818	$	1,849	$	28,667
Chicago/Milwaukee	33,068		—		33,068			18,083		—		18,083			6,908		2,872		9,780
Houston	49,309		—		49,309			37,773		—		37,773			30,172		—		30,172
Lehigh/Central PA	115,821		2,324		118,145			98,715		2,386		101,101			94,440		2,364		96,804
Minnesota	25,378		29,514		54,892			32,043		30,372		62,415			27,810		29,521		57,331
Orlando	18,635		14,039		32,674			16,535		14,865		31,400			15,840		15,004		30,844
Philadelphia	10,072		25,166		35,238			9,534		22,156		31,690			8,356		19,797		28,153
Richmond/Hampton Roads	20,924		19,987		40,911			19,073		21,174		40,247			18,490		22,905		41,395
South Florida	18,603		30,201		48,804			7,955		30,509		38,464			5,213		30,415		35,628
Southeastern PA	28,895		119,819		148,714			27,076		138,172		165,248			28,604		141,041		169,645
Tampa	25,451		28,274		53,725			24,331		27,899		52,230			17,584		29,043		46,627
United Kingdom	13,090		3,270		16,360			4,205		3,464		7,669			1,307		3,383		4,690
Other (1)	82,672		47,341		130,013			43,355		99,047		142,402			28,268		89,294		117,562
	$	477,788	$	319,935	797,723			$	368,921	$	390,044	758,965			$	309,810	$	387,488	697,298
Reconciliation to total operating revenue
Discontinued operations					(4,728		)					(113,586		)					(137,476		)
Corporate Other					(364		)					551							457
Total operating revenue					$	792,631						$	645,930						$	560,279

(1) A substantial portion of the buildings contributing to office operating revenue in 2012 and 2013 were sold in conjunction with the Portfolio Sale. See Footnote 19.

The Company's total assets by reportable segment as of December 31, 2014 and 2013 is as follows (in thousands):

		As of December 31,
		2014		2013
Total assets
	Carolinas	$	325,690	$	257,230
	Chicago/Milwaukee	422,531		413,585
	Houston	418,154		380,248
	Lehigh/Central PA	1,023,641		938,824
	Minnesota	333,506		335,613
	Orlando	160,899		253,888
	Philadelphia	366,577		316,810
	Richmond/Hampton Roads	250,205		250,008
	South Florida	400,034		380,138
	Southeastern PA	698,163		695,966
	Tampa	335,652		337,301
	United Kingdom	231,276		247,537
	Other	1,553,250		1,735,392
Segment-level total assets		6,519,578		6,542,540
	Corporate Other	105,958		233,020
Total assets		$	6,625,536	$	6,775,560

The Company's real estate assets by reportable segment as of December 31, 2014 and 2013 is as follows (in thousands):

		As of December 31,
		2014		2013
Real estate assets
	Carolinas	$	309,822	$	245,938
	Chicago/Milwaukee	383,494		371,149
	Houston	398,080		360,779
	Lehigh/Central PA	958,886		877,969
	Minnesota	307,970		308,272
	Orlando	139,218		228,182
	Philadelphia	255,313		229,769
	Richmond/Hampton Roads	238,670		238,129
	South Florida	378,398		358,492
	Southeastern PA	636,280		630,460
	Tampa	317,106		320,495
	United Kingdom	182,588		187,699
	Other	1,391,744		1,300,915
Total real estate assets		$	5,897,569	$	5,658,248

The Company incurred the following costs related to its long-lived assets for the years ended December 31, 2014, 2013 and 2012 (in thousands):

		Year Ended December 31,
		2014		2013		2012
Costs incurred on long-lived assets
	Carolinas	$	72,252	$	15,582	$	26,860
	Chicago/Milwaukee	21,698		248,640		49,941
	Houston	70,903		116,024		46,003
	Lehigh/Central PA	105,725		161,925		86,245
	Minnesota	28,966		38,434		41,821
	Orlando	7,827		10,953		10,122
	Philadelphia	32,012		17,941		93,673
	Richmond/Hampton Roads	10,348		15,880		8,612
	South Florida	30,063		148,165		3,337
	Southeastern PA	39,638		39,590		11,577
	Tampa	7,262		28,655		74,304
	United Kingdom	16,298		155,829		6,110
	Other	172,495		897,831		53,412
Total costs incurred on long-lived assets		$	615,487	$	1,895,449	$	512,017