14. Reportable Segment
Each of our operating properties is considered a separate operating segment as each property earns revenues and incurs expenses, individual operating results are reviewed and discrete financial information is available. We do not distinguish or group our consolidated operations based on size or type and each community has similar long-term economic characteristics and provides similar products and services to our residents. Additionally, all of our operations are within the continental United
States and no multifamily apartment community comprises more than 1.5% of consolidated revenues. As a result, our operating properties are aggregated into a single reportable segment.
The Chief Operating Decision Makers ("CODMs") include the President and Chief Financial Officer and the Executive Vice President - Chief Operating Officer. The CODMs primarily assess performance of the Company based upon net operating income ("NOI"). The measure of segment assets, as defined in ASU 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures, is reported on the balance sheets as total consolidated assets. NOI is measured as total property revenues less total property operating expenses as reported on the consolidated statements of income and comprehensive income. NOI excludes non-property revenues, other expenses, transactional gains and losses, equity in income of joint ventures, and income taxes. We consider NOI to be an appropriate measure of operating performance because it reflects the ongoing profitability and performance of our communities without an allocation of corporate level management expense or general and administrative costs. The CODMs utilize NOI to evaluate year-over-year growth of our communities from prior periods, as well as to monitor budget to actual results in assessing performance, allocating resources, and establishing compensation.
The following table details NOI and significant expenses for the years ended December 31:
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| (in thousands) | | 2025 | | 2024 | | 2023 | | |
| Property revenues | | $ | 1,573,544 | | | $ | 1,543,842 | | | $ | 1,542,027 | | | |
| Property expenses: | | | | | | | | |
| Real estate taxes | | (196,821) | | | (193,124) | | | (195,009) | | | |
| Salaries and benefits for on-site employees | | (106,892) | | | (102,776) | | | (98,122) | | | |
| Utilities | | (110,788) | | | (107,819) | | | (104,126) | | | |
| Repairs and maintenance | | (72,159) | | | (70,516) | | | (69,435) | | | |
Other non-significant property segment expenses (a) | | (80,050) | | | (84,570) | | | (82,228) | | | |
| Net operating income | | 1,006,834 | | | 985,037 | | | 993,107 | | | |
| Non-property income | | 32,483 | | | 24,186 | | | 19,728 | | | |
Other expenses (b) | | (139,130) | | | (125,525) | | | (113,327) | | | |
| Interest expense | | (138,239) | | | (129,815) | | | (133,395) | | | |
| Depreciation and amortization | | (611,025) | | | (582,014) | | | (574,813) | | | |
| Impairment associated with land development activities | | (12,916) | | | (40,988) | | | — | | | |
| Loss on early retirement of debt | | — | | | (921) | | | (2,513) | | | |
| Gain on sale of operating properties | | 260,910 | | | 43,806 | | | 225,416 | | | |
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| Income tax expense | | (4,019) | | | (2,926) | | | (3,650) | | | |
| Net income | | $ | 394,898 | | | $ | 170,840 | | | $ | 410,553 | | | |
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(a) Other non-significant property segment expenses, include the following other property and maintenance expenses: property insurance, marketing and leasing, property general and administrative, and other property expenses.
(b) Other expenses include property management, fee and asset management, general and administrative, and expense/(benefit) on deferred compensation plans.
About Segments Disclosures
Segment disclosures break a company into its reportable operating units, revealing revenue, profit, and asset allocation that consolidated financial statements obscure. Under ASC 280, segments must match how the chief operating decision maker views the business, providing a window into internal management structure and resource allocation priorities.
Key signals: compare segment margins to identify which units drive profitability and which destroy value. Watch for changes in the number of reportable segments — segment aggregation or disaggregation often coincides with strategic shifts or attempts to obscure declining performance. Intersegment elimination patterns reveal internal pricing practices. The reconciliation between segment totals and consolidated figures exposes corporate overhead allocation and unallocated items. Geographic revenue concentration highlights regulatory and currency exposure. Compare segment-level capital expenditure against segment revenue to assess where management is investing for future growth versus harvesting existing assets.