Segment Information

12 Months Ended

Dec. 31, 2013

Segment Reporting [Abstract]

Segment Information

Segment Information

As of December 31, 2013, we operated through three reportable business segments: triple-net leased properties; senior living operations and MOB operations. In our triple-net leased properties segment, we acquire and own seniors housing and healthcare properties throughout the United States and lease those properties to healthcare operating companies under “triple-net” or “absolute-net” leases that obligate the tenants to pay all property-related expenses. In our senior living operations segment, we invest in seniors housing communities throughout the United States and Canada and engage independent operators, such as Atria and Sunrise, to manage those communities. In our MOB operations segment, we primarily acquire, own, develop, lease, and manage MOBs. Information provided for “all other” includes income from loans and investments and other miscellaneous income and various corporate-level expenses not directly attributable to our three reportable business segments. Assets included in “all other” consist primarily of corporate assets, including cash, restricted cash, deferred financing costs, loans receivable and investments, and miscellaneous accounts receivable.

We evaluate performance of the combined properties in each reportable business segment based on segment profit, which we define as NOI adjusted for income/loss from unconsolidated entities. We define NOI as total revenues, less interest and other income, property-level operating expenses and medical office building services costs. Although we believe that net income, as defined by GAAP, is the most appropriate earnings measurement, we consider segment profit a useful supplement to net income because it allows investors, analysts and our management to measure unlevered property-level operating results and to compare our operating results to the operating results of other real estate companies and between periods on a consistent basis. Segment profit should not be considered as an alternative to net income (determined in accordance with GAAP) as an indicator of our financial performance. In order to facilitate a clear understanding of our historical consolidated historical operating results, segment profit should be examined in conjunction with net income as presented in our Consolidated Financial Statements and other financial data included elsewhere in this Annual Report on Form 10-K/A.

Interest expense, depreciation and amortization, general, administrative and professional fees, income tax expense, discontinued operations and other non-property specific revenues and expenses are not allocated to individual reportable business segments for purposes of assessing segment performance. There are no intersegment sales or transfers.

Summary information by reportable business segment is as follows:

For the year ended December 31, 2013:

	Triple-Net Leased Properties		Senior Living Operations			MOB Operations		All Other			Total
	(In thousands)
Revenues:
Rental income	$	875,877	$	—		$	450,107	$	—		$	1,325,984
Resident fees and services	—		1,406,005			—		—			1,406,005
Medical office building and other services revenue	4,469		—			12,077		1,263			17,809
Income from loans and investments	—		—			—		58,208			58,208
Interest and other income	—		—			—		2,047			2,047
Total revenues	$	880,346	$	1,406,005		$	462,184	$	61,518		$	2,810,053
Total revenues	$	880,346	$	1,406,005		$	462,184	$	61,518		$	2,810,053
Less:
Interest and other income	—		—			—		2,047			2,047
Property-level operating expenses	—		956,684			152,948		—			1,109,632
Medical office building services costs	—		—			8,315		—			8,315
Segment NOI	880,346		449,321			300,921		59,471			1,690,059
Income (loss) from unconsolidated entities	475		(1,980		)	1,451		(454		)	(508		)
Segment profit	$	880,821	$	447,341		$	302,372	$	59,017		1,689,551
Interest and other income											2,047
Interest expense											(334,484		)
Depreciation and amortization											(721,959		)
General, administrative and professional fees											(115,106		)
Loss on extinguishment of debt, net											(1,201		)
Merger-related expenses and deal costs											(21,634		)
Other											(18,732		)
Income tax benefit											11,828
Discontinued operations											(35,421		)
Net income											$	454,889

For the year ended December 31, 2012:

	Triple-Net Leased Properties		Senior Living Operations			MOB Operations		All Other		Total
	(In thousands)
Revenues:
Rental income	$	818,000	$	—		$	360,849	$	—	$	1,178,849
Resident fees and services	—		1,227,124			—		—		1,227,124
Medical office building and other services revenue	4,438		—			16,303		—		20,741
Income from loans and investments	—		—			—		39,913		39,913
Interest and other income	—		—			—		1,106		1,106
Total revenues	$	822,438	$	1,227,124		$	377,152	$	41,019	$	2,467,733
Total revenues	$	822,438	$	1,227,124		$	377,152	$	41,019	$	2,467,733
Less:
Interest and other income	—		—			—		1,106		1,106
Property-level operating expenses	—		841,022			125,400		—		966,422
Medical office building services costs	—		—			9,883		—		9,883
Segment NOI	822,438		386,102			241,869		39,913		1,490,322
Income (loss) from unconsolidated entities	1,313		(48		)	16,889		—		18,154
Segment profit	$	823,751	$	386,054		$	258,758	$	39,913	1,508,476
Interest and other income										1,106
Interest expense										(288,276		)
Depreciation and amortization										(714,505		)
General, administrative and professional fees										(98,510		)
Loss on extinguishment of debt, net										(37,640		)
Merger-related expenses and deal costs										(63,183		)
Other										(6,940		)
Income tax benefit										6,282
Discontinued operations										54,965
Net income										$	361,775

For the year ended December 31, 2011:

	Triple-Net Leased Properties		Senior Living Operations		MOB Operations			All Other		Total
	(In thousands)
Revenues:
Rental income	$	627,723	$	—	$	166,079		$	—	$	793,802
Resident fees and services	—		865,800		—			—		865,800
Medical office building and other services revenue	2,217		—		34,254			—		36,471
Income from loans and investments	—		—		—			34,415		34,415
Interest and other income	—		—		—			1,216		1,216
Total revenues	$	629,940	$	865,800	$	200,333		$	35,631	$	1,731,704
Total revenues	$	629,940	$	865,800	$	200,333		$	35,631	$	1,731,704
Less:
Interest and other income	—		—		—			1,216		1,216
Property-level operating expenses	—		588,095		56,987			—		645,082
Medical office building services costs	—		—		27,082			—		27,082
Segment NOI	629,940		277,705		116,264			34,415		1,058,324
Income (loss) from unconsolidated entities	295		—		(347		)	—		(52		)
Segment profit	$	630,235	$	277,705	$	115,917		$	34,415	1,058,272
Interest and other income										1,216
Interest expense										(223,804		)
Depreciation and amortization										(444,193		)
General, administrative and professional fees										(74,537		)
Loss on extinguishment of debt, net										(27,604		)
Litigation proceeds, net										202,259
Merger-related expenses and deal costs										(153,923		)
Other										(7,270		)
Income tax benefit										30,660
Discontinued operations										2,185
Net income										$	363,261

Assets by reportable business segment are as follows:

	As of December 31,
	2013				2012
	(Dollars in thousands)
Assets:
Triple-net leased properties	$	8,919,360	45.2	%	$	8,368,186	44.1	%
Senior living operations	6,648,754		33.7		6,274,207		33.1
MOB operations	3,701,344		18.8		3,703,453		19.5
All other assets	462,036		2.3		634,154		3.3
Total assets	$	19,731,494	100.0	%	$	18,980,000	100.0	%

Capital expenditures, including investments in real estate property and development project expenditures, by reportable business segment are as follows:

	For the Year Ended December 31,
	2013		2012 (1)		2011
	(In thousands)
Capital expenditures:
Triple-net leased properties	$	847,945	$	139,680	$	133,761
Senior living operations	576,459		758,371		370,455
MOB operations	189,953		1,003,865		125,453
Total capital expenditures	$	1,614,357	$	1,901,916	$	629,669

(1) Includes funds held in a Code Section 1031 exchange escrow account with a qualified intermediary as follows: triple-net leased – $58.1 million; senior living – $64.7 million; and MOB – $11.2 million.

Our portfolio of properties and mortgage loan and other investments are located in the United States and Canada. Revenues are attributed to an individual country based on the location of each property.

Geographic information regarding our operations is as follows:

	For the Year Ended December 31,
	2013		2012		2011
	(In thousands)
Revenues:
United States	$	2,716,835	$	2,371,764	$	1,639,665
Canada	93,218		95,969		92,039
Total revenues	$	2,810,053	$	2,467,733	$	1,731,704

	As of December 31,
	2013		2012
	(In thousands)
Net real estate property:
United States	$	17,705,962	$	16,711,508
Canada	369,624		400,024
Total net real estate property	$	18,075,586	$	17,111,532