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. At March 31, 2018, the Company's reportable segments were based on the Company's method of internal reporting and were as follows:


•	Carolinas/Richmond;


•	Chicago/Minneapolis;


•	Florida;


•	Houston;


•	Lehigh/Central PA;


•	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; and Southern California.

The Company evaluates the performance of its reportable segments based on segment net operating income (“SNOI”). SNOI is defined as net operating income (rental revenue and operating expense reimbursements less rental property and real estate tax expenses) less 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
		Ended March 31,
		2018			2017
Operating revenue
	Carolinas/Richmond	$	19,793		$	18,056
	Chicago/Minneapolis	16,517			15,875
	Florida	15,408			14,248
	Houston	15,862			14,774
	Lehigh/Central PA	38,085			41,535
	Philadelphia	12,345			11,436
	Southeastern PA	10,182			14,615
	United Kingdom	4,273			3,168
	Other	39,623			30,372
Segment-level operating revenue		172,088			164,079

Reconciliation to total operating revenues
	Development service fee income	26,352			11,485
	Discontinued operations	(8,179		)	(9,600		)
	Other	(96		)	(198		)
Total operating revenue		$	190,165		$	165,766

SNOI
	Carolinas/Richmond	$	14,047		$	12,982
	Chicago/Minneapolis	9,901			9,349
	Florida	10,819			9,511
	Houston	9,597			6,801
	Lehigh/Central PA	27,767			29,578
	Philadelphia	10,154			8,759
	Southeastern PA	6,890			8,113
	United Kingdom	2,429			1,858
	Other	26,550			20,256
SNOI		118,154			107,207

Reconciliation to income from continuing operations
	Interest expense ⁽¹⁾	(23,459		)	(22,343		)
	Depreciation/amortization expense ^{(1) (2)}	(33,408		)	(33,193		)
	Gain on property dispositions	4,121			807
	Equity in earnings of unconsolidated joint ventures	6,764			5,731
	General and administrative expense ^{(1) (2)}	(15,009		)	(12,222		)
	Expensed pursuit costs	(324		)	(32		)
	Systems implementation expense	(706		)	—
	Discontinued operations excluding gain on property dispositions	(4,284		)	(2,896		)
	Income taxes ⁽²⁾	(12		)	(280		)
	Other	(2,445		)	(1,431		)
Income from continuing operations		$	49,392		$	41,348


(1)	Includes activity on discontinued operations.


(2)	Excludes costs that are included in determining SNOI.

The Company's total assets by reportable segment as of March 31, 2018 and December 31, 2017 is as follows (in thousands):



	March 31, 2018		December 31, 2017
Carolinas/Richmond	$	521,272	$	543,922
Chicago/Minnesota	603,220		615,186
Florida	523,239		533,861
Houston	499,433		498,584
Lehigh/Central PA	1,203,574		1,210,746
Philadelphia	720,323		665,843
Southeastern PA	139,625		241,128
United Kingdom	239,605		251,824
Other	1,902,192		1,807,653
Segment-level total assets	6,352,483		6,368,747
Corporate Other	62,148		71,010
Total assets	$	6,414,631	$	6,439,757