We use NOI to evaluate our operating performance on a property-by-property basis because NOI allows us to evaluate the impact that factors such as lease structure, lease rates and tenant base, which vary by property, have on our operating results, gross margins and investment returns.

Although we believe that NOI provides useful information to the investors about the performance of our Operating Assets due to the exclusions noted above, NOI should only be used as an alternative measure of the financial performance of such assets and not as an alternative to GAAP operating income (loss) or net income (loss) available to common stockholders.
       
 
Operating Assets NOI and REP EBT
 
 

Three Months Ended December 31,

Year Ended December 31,
2012 2011 2012 2011
(In thousands) (In thousands)
Operating Assets NOI
Retail
Ward Centers $ 5,310 $ 5,032 $ 22,045 $ 21,481
South Street Seaport (3,446 ) 2,246 639 5,650
Rio West Mall 255 356 1,250 1,319
Landmark Mall 261 110 923 737
Riverwalk Marketplace (352 ) 79 221 418
Cottonwood Square 112 81 432 380
Park West 91 86 830 576
20/25 Waterway Avenue 340 408 1,582 1,310
Waterway Garage Retail   95     1     97     7  
Total Retail   2,666     8,399     28,019     31,878  
Office
110 N. Wacker 1,519 1,597 6,073 6,115
Columbia Office Properties 606 987 2,304 2,649
70 Columbia Corporate Center 148 - 140 -
4 Waterway Square 1,404 537 5,544 1,639
9303 New Trails 384 (110 ) 1,819 742
1400 Woodloch Forest 793 - 1,995 649
2201 Lake Woodlands Drive   32     83     53     332  
Total Office   4,886     3,094     17,928     12,126  
 
Millennium Waterway Apartments (a) 1,182 - 2,589 -
The Woodlands Resort and Conference Center   2,465     1,676     10,670     7,726  
Total Retail, Office, Multi-family, Resort and Conference Center   11,199     13,169     59,206     51,730  
 
The Club at Carlton Woods (859 ) (1,193 ) (4,242 ) (5,126 )
The Woodlands Parking Garages (399 ) (298 ) (1,128 ) (1,204 )
The Woodlands Ground leases 115 91 404 403
Other Properties   666     357     1,703     1,530  
Total Other   (477 )   (1,043 )   (3,263 )   (4,397 )
Total Operating Assets NOI- Consolidated 10,722 12,126 55,943 47,333
 
 
Straight-line lease amortization (704 ) (400 ) (736 ) 918
Provisions for impairment - - - -
Ground Rent - -
Early extinguishment of debt - - - (11,305 )
Depreciation and amortization (6,349 ) (3,141 ) (23,318 ) (20,309 )
Equity in earnings from Real Estate Affiliates 251 787 3,683 3,926
Interest, net (4,865 ) (1,397 ) (16,104 ) (12,775 )
Less: Partners' share of Operating Assets REP EBT   -     1,492     -     425  
Total Operating Assets REP EBT (b) $ (945 ) $ 9,467   $ 19,468   $ 8,213  
 
 
Operating Assets NOI - Equity and Cost Method Investments
Millennium Waterway Apartments (a) $ - $ 1,830 $ 1,768 $ 2,571
Woodlands Sarofim # 1 84 351 621 1,489
Stewart Title (title company) 543 402 1,876 1,069
Forest View/Timbermill Apartments (c)   (70 )   509     487     1,826  
Total NOI - equity investees 557 3,092 4,752 6,955
 
Adjustments to NOI (d)   (3 )   (114 )   (1,476 )   (3,862 )
Equity Method Investments REP EBT 554 2,978 3,276 3,093
Less: Joint Venture Partner's Share of REP EBT   (303 )   (2,156 )   (1,969 )   (3,061 )
Equity in earnings (loss) from Real Estate Affiliates   251     822     1,307     32  
 
Distributions from Summerlin Hospital Investment   -     (35 )   2,376     3,894  
 
Segment equity in earnings from Real Estate Affiliates $ 251   $ 787   $ 3,683   $ 3,926  
 
 
Company's Share of Equity Method Investments NOI
Millennium Waterway Apartments (a) $ - $ 1,529 $ 1,477 $ 2,148
Woodlands Sarofim # 1 17 70 124 298
Stewart Title (title company) 271 201 938 535
Forest View/Timbermill Apartments (c)   (35 )   254     244     913  
Total NOI - equity investees $ 253   $ 2,054   $ 2,783   $ 3,894  
 
 
 
Economic December 31, 2012
Ownership Debt Cash
(In thousands)
Woodlands Sarofim #1 20.00 % 6,882 811
Stewart Title(title company) 50.00 % - 426
Forest View/Timbermill Apartments (c) 50.00 % not applicable 1,258
 
 

(a) On May 31, 2012, we acquired our partner's interest in the 393-unit Millennium Waterway Apartments. NOI for periods prior to June 1, 2012, is included in Operating Assets NOI - Equity and Cost Method Investment.
 
(b) For a detailed breakdown of our Operating Asset segment REP EBT, refer to Note 17 in the Consolidated and Combined Financial Statements. Such amounts in prior periods include The Woodlands as if consolidated.
 
(c) On April 19, 2012, the joint ventures owning the Forest View and Timbermill Apartments completed their sale to a third party. Our share of the distributable cash after repayment of debt and transaction expenses was $8.6 million.
 
(d) Adjustments to NOI include straight-line and market lease amortization, depreciation and amortization and non-real estate taxes.

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