Business Segments

6 Months Ended

Jun. 30, 2022

Segment Reporting [Abstract]

Business Segments

Note 10 — Business Segments

We have two segments: Same Store and Other Real Estate. Our Same Store segment includes communities that: (i) are owned and managed by AIR, and (ii) had reached a stabilized level of operations. Our Other Real Estate segment includes five properties acquired in 2021, three properties acquired in the second quarter of 2022, and three communities we expect to sell or lease to a third party, but do not yet meet the criteria to be classified as held for sale.

Our chief operating decision maker (“CODM”) uses proportionate property net operating income (“NOI”) to assess the operating performance of our communities. Proportionate property NOI reflects our share of rental and other property revenues, excluding utility reimbursements, less direct property operating expenses, net of utility reimbursements. In our condensed consolidated statements of operations, utility reimbursements are included in rental and other property revenues in accordance with GAAP.

As of June 30, 2022, our Same Store segment included 64 apartment communities with 22,022 apartment homes and our Other Real Estate segment included 11 apartment communities with 3,341 apartment homes.

The following tables present the total revenues, property operating expenses, proportionate property net operating income (loss), and income (loss) before income tax (expense) benefit of our segments on a proportionate basis. To reflect how the CODM evaluates the business, prior period segment information has been recast to conform with our reportable segment composition as of June 30, 2022 (in thousands):

	Same Store		Other Real Estate		Proportionate and Other Adjustments (1)		Corporate and Amounts Not Allocated to Segments (2)			Consolidated
Three months ended June 30, 2022:
Total revenues	$	142,066	$	17,279	$	20,047	$	4,108		$	183,500
Property operating expenses		37,556		6,765		9,691		9,775			63,787
Other operating expenses not allocated to segments (3)		—		—		—		80,913			80,913
Total operating expenses		37,556		6,765		9,691		90,688			144,700
Proportionate property net operating income (loss)		104,510		10,514		10,356		(86,580	)		38,800
Other items included in income before income tax expense (4)		—		—		—		174,358			174,358
Income before income tax expense	$	104,510	$	10,514	$	10,356	$	87,778		$	213,158

	Same Store		Other Real Estate		Proportionate and Other Adjustments (1)		Corporate and Amounts Not Allocated to Segments (2)			Consolidated
Six months ended June 30, 2022:
Total revenues	$	280,174	$	32,113	$	39,744	$	12,947		$	364,978
Property operating expenses		75,059		12,873		19,698		19,393			127,023
Other operating expenses not allocated to segments (3)		—		—		—		176,077			176,077
Total operating expenses		75,059		12,873		19,698		195,470			303,100
Proportionate property net operating income (loss)		205,115		19,240		20,046		(182,523	)		61,878
Other items included in income before income tax expense (4)		—		—		—		552,085			552,085
Income before income tax expense	$	205,115	$	19,240	$	20,046	$	369,562		$	613,963

	Same Store		Other Real Estate		Proportionate and Other Adjustments (1)		Corporate and Amounts Not Allocated to Segments (2)			Consolidated
Three months ended June 30, 2021:
Total revenues	$	134,478	$	1,840	$	19,400	$	22,615		$	178,333
Property operating expenses		38,990		1,263		10,050		14,455			64,758
Other operating expenses not allocated to segments (3)		—		—		—		83,527			83,527
Total operating expenses		38,990		1,263		10,050		97,982			148,285
Proportionate property net operating income (loss)		95,488		577		9,350		(75,367	)		30,048
Other items included in income (loss) before income tax benefit (4)		—		—		—		(51,770	)		(51,770	)
Income (loss) before income tax benefit	$	95,488	$	577	$	9,350	$	(127,137	)	$	(21,722	)

	Same Store		Other Real Estate		Proportionate and Other Adjustments (1)		Corporate and Amounts Not Allocated to Segments (2)			Consolidated
Six months ended June 30, 2021:
Total revenues	$	268,036	$	3,004	$	38,623	$	45,083		$	354,746
Property operating expenses		76,891		2,396		19,814		30,274			129,375
Other operating expenses not allocated to segments (3)		—		—		—		166,097			166,097
Total operating expenses		76,891		2,396		19,814		196,371			295,472
Proportionate property net operating income (loss)		191,145		608		18,809		(151,288	)		59,274
Other items included in income (loss) before income tax expense (4)		—		—		—		11,199			11,199
Income (loss) before income tax expense	$	191,145	$	608	$	18,809	$	(140,089	)	$	70,473

(1)Represents adjustments for third-party share of unconsolidated apartment communities and the noncontrolling interests in consolidated real estate partnerships’ share of the results of communities in our segments, which are included in the related consolidated amounts but excluded from proportionate property NOI for our segment evaluation. Also includes the reclassification of utility reimbursements from revenues to property operating expenses for the purpose of evaluating segment results. Utility reimbursements are included in rental and other property revenues in our condensed consolidated statements of operations prepared in accordance with GAAP.

(2)Includes the operating results of apartment communities sold during the periods shown or held for sale at the end of the period, if any. Also includes property management revenues, which are not part of our segment performance measure and property management expenses and casualty gains and losses, which are included in consolidated property operating expenses and are not part of our segment performance measure.

(3)Includes depreciation and amortization, general and administrative expenses, and other (income) expenses, net, and may also include provision for real estate impairment loss and write-offs of deferred leasing commissions, which are not included in our measure of segment performance.

(4)Includes gain on dispositions of real estate and derecognition of leased properties, interest income, including interest income related to the leased properties, interest expense, loss from unconsolidated real estate partnerships, and loss on extinguishment of debt.

The assets of our segments and the consolidated assets not allocated to our segments were as follows (in thousands):

	June 30, 2022		December 31, 2021
Same Store	$	3,978,640	$	3,962,175
Other Real Estate		1,270,661		788,572
Corporate and other assets (1)		1,183,984		1,689,613
Total consolidated assets	$	6,433,285	$	6,440,360

(1)Includes the assets not allocated to our segments including: (i) corporate assets; (ii) our note receivable from Aimco, which was partially paid off during the second quarter of 2022; (iii) our mezzanine loan investment; and (iv) assets of leased apartment communities, sold properties, or properties classified as held for sale as of June 30, 2022.

For the six months ended June 30, 2022 and 2021, capital additions related to our segments were as follows (in thousands):

	2022		2021
Same Store	$	72,768	$	53,930
Other Real Estate		16,891		300
Total capital additions	$	89,659	$	54,230