SEGMENT INFORMATION

6 Months Ended

Jun. 30, 2012

SEGMENT INFORMATION

SEGMENT INFORMATION

NOTE 15—SEGMENT INFORMATION

        As of June 30, 2012, 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 that obligate 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 Atria and Sunrise, 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 other financial data included elsewhere in this Quarterly Report on Form 10-Q.

        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 three months ended June 30, 2012:

	Triple-Net Leased Properties		Senior Living Operations		MOB Operations		All Other		Total
	(In thousands)
Revenues:
Rental income	$	207,898	$	—	$	89,674	$	—	$	297,572
Resident fees and services		—		304,020		—		—		304,020
Medical office building and other services revenue		1,110		—		5,529		—		6,639
Income from loans and investments		—		—		—		8,152		8,152
Interest and other income		—		—		—		65		65
Total revenues	$	209,008	$	304,020	$	95,203	$	8,217	$	616,448
Total revenues	$	209,008	$	304,020	$	95,203	$	8,217	$	616,448
Less:
Interest and other income		—		—		—		65		65
Property-level operating expenses		—		207,548		29,846		—		237,394
Medical office building services costs		—		—		3,839		—		3,839
Segment NOI		209,008		96,472		61,518		8,152		375,150
Income from unconsolidated entities		454		—		60		—		514
Segment profit	$	209,462	$	96,472	$	61,578	$	8,152		375,664
Interest and other income										65
Interest expense										(74,428	)
Depreciation and amortization										(189,349	)
General, administrative and professional fees										(26,710	)
Loss on extinguishment of debt										(9,989	)
Merger-related expenses and deal costs										(36,668	)
Other										(1,510	)
Income tax benefit										5,179
Discontinued operations										31,482
Net income									$	73,736

        For the three months ended June 30, 2011:

	Triple-Net Leased Properties		Senior Living Operations		MOB Operations			All Other		Total
	(In thousands)
Revenues:
Rental income	$	116,150	$	—	$	23,758		$	—	$	139,908
Resident fees and services		—		201,307		—			—		201,307
Medical office building and other services revenue		—		—		9,822			—		9,822
Income from loans and investments		—		—		—			8,391		8,391
Interest and other income		—		—		—			78		78
Total revenues	$	116,150	$	201,307	$	33,580		$	8,469	$	359,506
Total revenues	$	116,150	$	201,307	$	33,580		$	8,469	$	359,506
Less:
Interest and other income		—		—		—			78		78
Property-level operating expenses		—		135,894		8,278			—		144,172
Medical office building services costs		—		—		7,954			—		7,954
Segment NOI		116,150		65,413		17,348			8,391		207,302
Loss from unconsolidated entities		—		—		(83	)		—		(83	)
Segment profit	$	116,150	$	65,413	$	17,265		$	8,391		207,219
Interest and other income											78
Interest expense											(52,043	)
Depreciation and amortization											(79,509	)
General, administrative and professional fees											(15,554	)
Loss on extinguishment of debt											(6	)
Merger-related expenses and deal costs											(55,807	)
Other											8,056
Income tax benefit											6,110
Discontinued operations											1,190
Net income										$	19,734

        For the six months ended June 30, 2012:

	Triple-Net Leased Properties		Senior Living Operations		MOB Operations		All Other		Total
	(In thousands)
Revenues:
Rental income	$	415,026	$	—	$	154,183	$	—	$	569,209
Resident fees and services		—		589,815		—		—		589,815
Medical office building and other services revenue		2,219		—		10,028		—		12,247
Income from loans and investments		—		—		—		16,188		16,188
Interest and other income		—		—		—		112		112
Total revenues	$	417,245	$	589,815	$	164,211	$	16,300	$	1,187,571
Total revenues	$	417,245	$	589,815	$	164,211	$	16,300	$	1,187,571
Less:
Interest and other income		—		—		—		112		112
Property-level operating expenses		—		403,214		50,744		—		453,958
Medical office building services costs		—		—		6,827		—		6,827
Segment NOI		417,245		186,601		106,640		16,188		726,674
Income from unconsolidated entities		720		—		111		—		831
Segment profit	$	417,965	$	186,601	$	106,751	$	16,188		727,505
Interest and other income										112
Interest expense										(144,056	)
Depreciation and amortization										(351,605	)
General, administrative and professional fees										(48,907	)
Loss on extinguishment of debt										(39,533	)
Merger-related expenses and deal costs										(44,649	)
Other										(3,086	)
Income tax expense										(6,159	)
Discontinued operations										74,206
Net income									$	163,828

        For the six months ended June 30, 2011:

	Triple-Net Leased Properties		Senior Living Operations		MOB Operations			All Other		Total
	(In thousands)
Revenues:
Rental income	$	230,771	$	—	$	47,994		$	—	$	278,765
Resident fees and services		—		315,809		—			—		315,809
Medical office building and other services revenue		—		—		16,779			—		16,779
Income from loans and investments		—		—		—			14,476		14,476
Interest and other income		—		—		—			156		156
Total revenues	$	230,771	$	315,809	$	64,773		$	14,632	$	625,985
Total revenues	$	230,771	$	315,809	$	64,773		$	14,632	$	625,985
Less:
Interest and other income		—		—		—			156		156
Property-level operating expenses		—		214,005		16,954			—		230,959
Medical office building services costs		—		—		13,490			—		13,490
Segment NOI		230,771		101,804		34,329			14,476		381,380
Loss from unconsolidated entities		—		—		(253	)		—		(253	)
Segment profit	$	230,771	$	101,804	$	34,076		$	14,476		381,127
Interest and other income											156
Interest expense											(92,830	)
Depreciation and amortization											(130,070	)
General, administrative and professional fees											(30,386	)
Loss on extinguishment of debt											(16,526	)
Merger-related expenses and deal costs											(62,256	)
Other											8,055
Income tax benefit											9,307
Discontinued operations											2,203
Net income										$	68,780

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

	For the Three Months Ended June 30,				For the Six Months Ended June 30,
	2012		2011		2012		2011
	(In thousands)
Capital expenditures:
Triple-net leased properties	$	9,017	$	648	$	13,880	$	1,227
Senior living operations		331,665		273,639		348,831		275,604
MOB operations		601,302		1,450		621,066		6,869
Total capital expenditures	$	941,984	$	275,737	$	983,777	$	283,700

        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 Three Months Ended June 30,				For the Six Months Ended June 30,
	2012		2011		2012		2011
	(In thousands)				(In thousands)
Revenues:
United States	$	592,819	$	336,411	$	1,140,341	$	580,371
Canada		23,629		23,095		47,230		45,613
Total revenues	$	616,448	$	359,506	$	1,187,571	$	625,985

	As of June 30, 2012		As of December 31, 2011
	(In thousands)
Net real estate property:
United States	$	16,325,712	$	15,510,824
Canada		398,241		402,908
Total net real estate property	$	16,723,953	$	15,913,732