SEGMENT INFORMATION

9 Months Ended

Sep. 30, 2012

SEGMENT INFORMATION

SEGMENT INFORMATION

As of September 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 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 September 30, 2012:

	Triple-Net Leased Properties		Senior Living Operations		MOB Operations		All Other		Total
	(In thousands)
Revenues:
Rental income	$	210,096	$	—	$	100,814	$	—	$	310,910
Resident fees and services		—		317,131		—		—		317,131
Medical office building and other services revenue		1,110		—		3,434		—		4,544
Income from loans and investments		—		—		—		9,035		9,035
Interest and other income		—		—		—		330		330
Total revenues	$	211,206	$	317,131	$	104,248	$	9,365	$	641,950
Total revenues	$	211,206	$	317,131	$	104,248	$	9,365	$	641,950
Less:
Interest and other income		—		—		—		330		330
Property-level operating expenses		—		216,861		36,144		—		253,005
Medical office building services costs		—		—		1,487		—		1,487
Segment NOI		211,206		100,270		66,617		9,035		387,128
Income from unconsolidated entities		348		—		16,726		—		17,074
Segment profit	$	211,554	$	100,270	$	83,343	$	9,035		404,202
Interest and other income										330
Interest expense										(75,139	)
Depreciation and amortization										(189,908	)
General, administrative and professional fees										(26,872	)
Gain on extinguishment of debt										1,194
Merger-related expenses and deal costs										(4,917	)
Other										(2,508	)
Income tax benefit										8,886
Discontinued operations										(3,447	)
Net income									$	111,821

        For the three months ended September 30, 2011:

	Triple-Net Leased Properties		Senior Living Operations		MOB Operations		All Other		Total
	(In thousands)
Revenues:
Rental income	$	203,209	$	—	$	58,159	$	—	$	261,368
Resident fees and services		—		274,294		—		—		274,294
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	$	204,318	$	274,294	$	66,321	$	10,445	$	555,378
Total revenues	$	204,318	$	274,294	$	66,321	$	10,445	$	555,378
Less:
Interest and other income		—		—		—		373		373
Property-level operating expenses		—		187,356		20,071		—		207,427
Medical office building services costs		—		—		6,347		—		6,347
Segment NOI		204,318		86,938		39,903		10,072		341,231
Income from unconsolidated entities		121		—		61		—		182
Segment profit	$	204,439	$	86,938	$	39,964	$	10,072		341,413
Interest and other income										373
Interest expense										(69,518	)
Depreciation and amortization										(156,593	)
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										(13,882	)
Income tax benefit										13,732
Discontinued operations										(209	)
Net income									$	101,984

        For the nine months ended September 30, 2012:

	Triple-Net Leased Properties		Senior Living Operations		MOB Operations		All Other		Total
	(In thousands)
Revenues:
Rental income	$	622,702	$	—	$	253,890	$	—	$	876,592
Resident fees and services		—		906,946		—		—		906,946
Medical office building and other services revenue		3,329		—		13,462		—		16,791
Income from loans and investments		—		—		—		25,223		25,223
Interest and other income		—		—		—		441		441
Total revenues	$	626,031	$	906,946	$	267,352	$	25,664	$	1,825,993
Total revenues	$	626,031	$	906,946	$	267,352	$	25,664	$	1,825,993
Less:
Interest and other income		—		—		—		441		441
Property-level operating expenses		—		620,075		86,469		—		706,544
Medical office building services costs		—		—		8,314		—		8,314
Segment NOI		626,031		286,871		172,569		25,223		1,110,694
Income from unconsolidated entities		1,068		—		16,837		—		17,905
Segment profit	$	627,099	$	286,871	$	189,406	$	25,223		1,128,599
Interest and other income										441
Interest expense										(217,475	)
Depreciation and amortization										(538,946	)
General, administrative and professional fees										(75,779	)
Loss on extinguishment of debt										(38,339	)
Merger-related expenses and deal costs										(49,566	)
Other										(5,594	)
Income tax benefit										2,727
Discontinued operations										69,581
Net income									$	275,649

        For the nine months ended September 30, 2011:

	Triple-Net Leased Properties		Senior Living Operations		MOB Operations			All Other		Total
	(In thousands)
Revenues:
Rental income	$	433,980	$	—	$	106,153		$	—	$	540,133
Resident fees and services		—		590,103		—			—		590,103
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	$	435,089	$	590,103	$	131,094		$	25,077	$	1,181,363
Total revenues	$	435,089	$	590,103	$	131,094		$	25,077	$	1,181,363
Less:
Interest and other income		—		—		—			529		529
Property-level operating expenses		—		401,361		37,025			—		438,386
Medical office building services costs		—		—		19,837			—		19,837
Segment NOI		435,089		188,742		74,232			24,548		722,611
Income (loss) from unconsolidated entities		121		—		(192	)		—		(71	)
Segment profit	$	435,210	$	188,742	$	74,040		$	24,548		722,540
Interest and other income											529
Interest expense											(162,348	)
Depreciation and amortization											(286,663	)
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											(5,827	)
Income tax benefit											23,039
Discontinued operations											1,994
Net income										$	170,764

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

	For the Three Months Ended September 30,				For the Nine Months Ended September 30,
	2012		2011		2012		2011
	(In thousands)
Capital expenditures:
Triple-net leased	$	25,535	$	68,604	$	39,415	$	69,831
Senior living		20,510		20,842		369,341		296,446
MOB		257,479		23,432		878,545		30,301
Total capital expenditures	$	303,524	$	112,878	$	1,287,301	$	396,578

        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 September 30,				For the Nine Months Ended September 30,
	2012		2011		2012		2011
	(In thousands)
Revenues:
United States	$	617,605	$	531,951	$	1,754,418	$	1,112,322
Canada		24,345		23,428		71,575		69,041
Total revenues	$	641,950	$	555,378	$	1,825,993	$	1,181,363

	As of September 30, 2012		As of December 31, 2011
	(In thousands)
Net real estate property:
United States	$	16,514,409	$	15,510,824
Canada		405,268		402,908
Total net real estate property	$	16,919,677	$	15,913,732