Segment Information

9 Months Ended

Sep. 30, 2011

Segment Information [Abstract]

SEGMENT INFORMATION

NOTE 16 — SEGMENT INFORMATION

As of September 30, 2011, we operated through three reportable business segments: triple-net leased properties, senior living operations and MOB operations. Our triple-net leased properties segment consists of acquiring and owning seniors housing and healthcare properties in the United States and leasing those properties to healthcare operating companies under “triple-net” or “absolute-net” leases, which require the tenants to pay all property-related expenses. Our senior living operations segment consists of investments in seniors housing communities located in the United States and Canada for which we engage independent third parties, such as Sunrise and Atria, to manage the operations. Our MOB operations segment primarily consists of acquiring, owning, developing, leasing and managing MOBs. Information provided for “all other” includes revenues such as 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 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 gain/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. We believe that net income, as defined by GAAP, is the most appropriate earnings measurement. However, we believe that segment profit serves as 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 consolidated historical operating results, segment profit should be examined in conjunction with net income as presented in our Consolidated Financial Statements and data included elsewhere in this Quarterly Report on Form 10-Q.

Interest expense, depreciation and amortization, general, administrative and professional fees, and 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 three months ended September 30, 2011:

	Triple-Net		Senior
	Leased		Living		MOB		All
	Properties		Operations		Operations		Other		Total
	(In thousands)
Revenues:
Rental income	$	211,479	$	—	$	58,398	$	—	$	269,877
Resident fees and services		—		276,364		—		—		276,364
Medical office building and other services revenue		1,109		—		8,162		—		9,271
Income from loans and investments		—		—		—		10,072		10,072
Interest and other income		—		—		—		373		373
Total revenues	$	212,588	$	276,364	$	66,560	$	10,445	$	565,957
Total revenues	$	212,588	$	276,364	$	66,560	$	10,445	$	565,957
Less:
Interest and other income		—		—		—		373		373
Property-level operating expenses		—		188,856		20,305		—		209,161
Medical office building services costs		—		—		6,347		—		6,347
Segment NOI		212,588		87,508		39,908		10,072		350,076
Income from unconsolidated entities		121		—		61		—		182
Segment profit	$	212,709	$	87,508	$	39,969	$	10,072		350,258
Interest and other income										373
Interest expense										(73,756	)
Depreciation and amortization										(161,027	)
General, administrative and professional fees										(20,624	)
Loss on extinguishment of debt										(8,685	)
Litigation proceeds, net										85,327
Merger-related expenses and deal costs										(69,350	)
Other										(14,436	)
Income tax benefit										13,904
Net income									$	101,984

For the three months ended September 30, 2010:

	Triple-Net		Senior
	Leased		Living		MOB			All
	Properties		Operations		Operations			Other		Total
	(In thousands)
Revenues:
Rental income	$	117,906	$	—	$	22,817		$	—	$	140,723
Resident fees and services		—		113,182		—			—		113,182
Medical office building and other services revenue		—		—		6,711			—		6,711
Income from loans and investments		—		—		—			4,014		4,014
Interest and other income		—		—		—			35		35
Total revenues	$	117,906	$	113,182	$	29,528		$	4,049	$	264,665
Total revenues	$	117,906	$	113,182	$	29,528		$	4,049	$	264,665
Less:
Interest and other income		—		—		—			35		35
Property-level operating expenses		—		74,066		7,941			—		82,007
Medical office building services costs		—		—		4,633			—		4,633
Segment NOI		117,906		39,116		16,954			4,014		177,990
Loss from unconsolidated entities		—		—		(392	)		—		(392	)
Segment profit	$	117,906	$	39,116	$	16,562		$	4,014		177,598
Interest and other income											35
Interest expense											(45,519	)
Depreciation and amortization											(52,104	)
General, administrative and professional fees											(15,278	)
Merger-related expenses and deal costs											(5,142	)
Other											419
Income tax expense											(1,657	)
Discontinued operations											542
Net income										$	58,894

For the nine months ended September 30, 2011:

	Triple-Net		Senior
	Leased		Living		MOB			All
	Properties		Operations		Operations			Other		Total
	(In thousands)
Revenues:
Rental income	$	450,211	$	—	$	106,392		$	—	$	556,603
Resident fees and services		—		593,348		—			—		593,348
Medical office building and other services revenue		1,109		—		24,941			—		26,050
Income from loans and investments		—		—		—			24,548		24,548
Interest and other income		—		—		—			529		529
Total revenues	$	451,320	$	593,348	$	131,333		$	25,077	$	1,201,078
Total revenues	$	451,320	$	593,348	$	131,333		$	25,077	$	1,201,078
Less:
Interest and other income		—		—		—			529		529
Property-level operating expenses		—		403,706		37,259			—		440,965
Medical office building services costs		—		—		19,837			—		19,837
Segment NOI		451,320		189,642		74,237			24,548		739,747
Income (loss) from unconsolidated entities		121		—		(192	)		—		(71	)
Segment profit	$	451,441	$	189,642	$	74,045		$	24,548		739,676
Interest and other income											529
Interest expense											(170,046	)
Depreciation and amortization											(293,541	)
General, administrative and professional fees											(51,010	)
Loss on extinguishment of debt											(25,211	)
Litigation proceeds, net											85,327
Merger-related expenses and deal costs											(131,606	)
Other											(6,664	)
Income tax benefit											23,310
Net income										$	170,764

For the nine months ended September 30, 2010:

	Triple-Net		Senior
	Leased		Living		MOB			All
	Properties		Operations		Operations			Other		Total
	(In thousands)
Revenues:
Rental income	$	351,625	$	—	$	47,246		$	—	$	398,871
Resident fees and services		—		331,535		—			—		331,535
Medical office building and other services revenue		—		—		6,711			—		6,711
Income from loans and investments		—		—		—			11,336		11,336
Interest and other income		—		—		—			420		420
Total revenues	$	351,625	$	331,535	$	53,957		$	11,756	$	748,873
Total revenues	$	351,625	$	331,535	$	53,957		$	11,756	$	748,873
Less:
Interest and other income		—		—		—			420		420
Property-level operating expenses		—		219,802		16,267			—		236,069
Medical office building services costs		—		—		4,633			—		4,633
Segment NOI		351,625		111,733		33,057			11,336		507,751
Loss from unconsolidated entities		—		—		(392	)		—		(392	)
Segment profit	$	351,625	$	111,733	$	32,665		$	11,336		507,359
Interest and other income											420
Interest expense											(133,449	)
Depreciation and amortization											(154,458	)
General, administrative and professional fees											(35,819	)
Loss on extinguishment of debt											(6,549	)
Merger-related expenses and deal costs											(11,668	)
Other											404
Income tax expense											(2,352	)
Discontinued operations											7,139
Net income										$	171,027

Assets by reportable business segment are as follows:

	As of				As of
	September 30,				December 31,
	2011				2010
	(In thousands)
Assets:
Triple-net leased properties	$	8,652,706	50.3	%	$	2,474,612	43.0	%
Senior living operations		5,807,192	33.7			2,297,041	39.9
MOB operations		2,367,480	13.8			748,945	13.0
All other assets		378,392	2.2			237,423	4.1
Total assets	$	17,205,770	100.0	%	$	5,758,021	100.0	%

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

	For the Three Months				For the Nine Months
	Ended September 30,				Ended September 30,
	2011		2010		2011		2010
	(In thousands)
Capital expenditures:
Triple-net leased properties	$	68,604	$	211	$	69,831	$	12,303
Senior living operations		20,842		3,889		296,446		6,782
MOB operations		23,432		218,307		30,301		233,315
Total capital expenditures	$	112,878	$	222,407	$	396,578	$	252,400

Our portfolio of properties and real estate 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 Three Months				For the Nine Months
	Ended September 30,				Ended September 30,
	2011		2010		2011		2010
	(In thousands)
Revenues:
United States	$	542,533	$	246,358	$	1,132,047	$	695,252
Canada		23,424		18,307		69,031		53,621
Total revenues	$	565,957	$	264,665	$	1,201,078	$	748,873

	As of		As of
	September 30,		December 31,
	2011		2010
	(In thousands)
Net real estate property:
United States	$	15,598,457	$	4,857,510
Canada		397,585		422,009
Total net real estate property	$	15,996,042	$	5,279,519