Business Segments

9 Months Ended

Sep. 30, 2011

Business Segments [Abstract]

Business Segments

NOTE 11 — Business Segments

We have two reportable segments: conventional real estate operations and affordable real estate operations. Our conventional real estate operations consist of market-rate apartments with rents paid by the resident and included 205 properties with 64,781 units at September 30, 2011. Our affordable real estate operations consisted of 201 properties with 24,040 units at September 30, 2011, with rents that are generally paid, in whole or part, by a government agency.

Our chief executive officer, who is our chief operating decision maker, uses various generally accepted industry financial measures to assess the performance and financial condition of the business, including: Net Asset Value, which is the estimated fair value of our assets, net of liabilities and preferred equity; Pro forma Funds From Operations, which is Funds From Operations excluding operating real estate impairment losses and preferred equity redemption related amounts; Adjusted Funds From Operations, which is Pro forma Funds From Operations less spending for Capital Replacements; property net operating income, which is rental and other property revenues less direct property operating expenses, including real estate taxes; proportionate property net operating income, which reflects our share of property net operating income of our consolidated and unconsolidated properties; same store property operating results; Free Cash Flow, which is net operating income less spending for Capital Replacements; Free Cash Flow internal rate of return; financial coverage ratios; and leverage as shown on our balance sheet. Our chief operating decision maker emphasizes proportionate property net operating income as a key measurement of segment profit or loss.

The following tables present the revenues, net operating income (loss) and income (loss) from continuing operations of our conventional and affordable real estate operations segments on a proportionate basis for the three and nine months ended September 30, 2011 and 2010 (in thousands):

							Corporate and
	Conventional		Affordable				Amounts Not
	Real Estate		Real Estate		Proportionate		Allocated to
	Operations		Operations		Adjustments (1)		Segments			Consolidated
Three Months Ended September 30, 2011:
Rental and other property revenues (2)	$	206,115	$	32,715	$	30,501	$	194		$	269,525
Asset management and tax credit revenues		—		—		—		11,885			11,885
Total revenues		206,115		32,715		30,501		12,079			281,410
Property operating expenses (2)		79,514		13,373		13,495		13,521			119,903
Investment management expenses		—		—		—		2,386			2,386
Depreciation and amortization (2)		—		—		—		97,321			97,321
Provision for operating real estate impairment losses (2)		—		—		—		149			149
General and administrative expenses		—		—		—		12,664			12,664
Other expenses, net		—		—		—		4,870			4,870
Total operating expenses		79,514		13,373		13,495		130,911			237,293
Net operating income (loss)		126,601		19,342		17,006		(118,832	)		44,117
Other items included in continuing operations		—		—		—		(70,428	)		(70,428	)
Income (loss) from continuing operations	$	126,601	$	19,342	$	17,006	$	(189,260	)	$	(26,311	)
Three Months Ended September 30, 2010:
Rental and other property revenues (2)	$	200,667	$	31,573	$	30,591	$	650		$	263,481
Asset management and tax credit revenues		—		—		—		9,711			9,711
Total revenues		200,667		31,573		30,591		10,361			273,192
Property operating expenses (2)		76,467		13,765		13,562		12,992			116,786
Investment management expenses		—		—		—		2,609			2,609
Depreciation and amortization (2)		—		—		—		101,704			101,704
General and administrative expenses		—		—		—		12,096			12,096
Other expenses, net		—		—		—		4,416			4,416
Total operating expenses		76,467		13,765		13,562		133,817			237,611
Net operating income (loss)		124,200		17,808		17,029		(123,456	)		35,581
Other items included in continuing operations		—		—		—		(82,573	)		(82,573	)
Income (loss) from continuing operations	$	124,200	$	17,808	$	17,029	$	(206,029	)	$	(46,992	)
Nine Months Ended September 30, 2011:
Rental and other property revenues (2)	$	613,688	$	97,947	$	93,065	$	1,049		$	805,749
Asset management and tax credit revenues		—		—		—		28,772			28,772
Total revenues		613,688		97,947		93,065		29,821			834,521
Property operating expenses (2)		233,126		40,488		41,075		41,945			356,634
Investment management expenses		—		—		—		7,604			7,604
Depreciation and amortization (2)		—		—		—		287,739			287,739
Provision for operating real estate impairment losses (2)		—		—		—		149			149
General and administrative expenses		—		—		—		36,162			36,162
Other expenses, net		—		—		—		13,952			13,952
Total operating expenses		233,126		40,488		41,075		387,551			702,240
Net operating income (loss)		380,562		57,459		51,990		(357,730	)		132,281
Other items included in continuing operations		—		—		—		(232,831	)		(232,831	)
Income (loss) from continuing operations	$	380,562	$	57,459	$	51,990	$	(590,561	)	$	(100,550	)

							Corporate and
	Conventional		Affordable				Amounts Not
	Real Estate		Real Estate		Proportionate		Allocated to
	Operations		Operations		Adjustments (1)		Segments			Consolidated
Nine Months Ended September 30, 2010:
Rental and other property revenues (2)	$	600,640	$	93,847	$	91,530	$	2,040		$	788,057
Asset management and tax credit revenues		—		—		—		24,208			24,208
Total revenues		600,640		93,847		91,530		26,248			812,265
Property operating expenses (2)		235,612		42,331		41,820		43,021			362,784
Investment management expenses		—		—		—		10,979			10,979
Depreciation and amortization (2)		—		—		—		305,066			305,066
General and administrative expenses		—		—		—		39,015			39,015
Other expenses, net		—		—		—		2,173			2,173
Total operating expenses		235,612		42,331		41,820		400,254			720,017
Net operating income (loss)		365,028		51,516		49,710		(374,006	)		92,248
Other items included in continuing operations		—		—		—		(213,541	)		(213,541	)
Income (loss) from continuing operations	$	365,028	$	51,516	$	49,710	$	(587,547	)	$	(121,293	)

(1)

Represents adjustments for the noncontrolling interests in consolidated real estate partnerships’ share of the results of our consolidated properties, which are excluded from our measurement of segment performance but included in the related consolidated amounts, and our share of the results of operations of our unconsolidated real estate partnerships, which are included in our measurement of segment performance but excluded from the related consolidated amounts.

(2)

Proportionate property net operating income, our key measurement of segment profit or loss, excludes provision for operating real estate impairment losses, property management revenues (which are included in rental and other property revenues), property management expenses and casualty gains and losses (which are included in property operating expenses) and depreciation and amortization. Accordingly, we do not allocate these amounts to our segments.

For the nine months ended September 30, 2011 and 2010, capital additions related to our conventional segment totaled $111.2 million and $104.9 million, respectively, and capital additions related to our affordable segment totaled $12.2 million and $24.0 million, respectively.