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Segment Disclosures (Tables)
6 Months Ended
Jun. 30, 2014
Segment Disclosures  
Information of revenue of reportable segment

Summary information for the reportable segments follows (in thousands):

 

For the three months ended June 30, 2014:

 

Segments

 

Rental
Revenues
(1)

 

Resident Fees
and Services

 

Interest
Income

 

Investment
Management
Fee Income

 

Total
Revenues

 

NOI(2)

 

Adjusted
(Cash) NOI(2)

 

Senior housing

 

$

151,904

 

$

37,939

 

$

3,430

 

$

 

$

193,273

 

$

165,020

 

$

153,476

 

Post-acute/skilled

 

138,548

 

 

13,507

 

 

152,055

 

138,015

 

122,105

 

Life science

 

77,541

 

 

 

1

 

77,542

 

62,092

 

59,339

 

Medical office

 

91,541

 

 

 

443

 

91,984

 

54,376

 

53,770

 

Hospital

 

21,267

 

 

 

 

21,267

 

20,370

 

20,475

 

Total

 

$

480,801

 

$

37,939

 

$

16,937

 

$

444

 

$

536,121

 

$

439,873

 

$

409,165

 

 

For the three months ended June 30, 2013:

 

Segments

 

Rental
Revenues
(1)

 

Resident Fees
and Services

 

Interest
Income

 

Investment
Management
Fee Income

 

Total
Revenues

 

NOI(2)

 

Adjusted
(Cash) NOI(2)

 

Senior housing

 

$

150,261

 

$

36,394

 

$

2,806

 

$

 

$

189,461

 

$

163,319

 

$

148,005

 

Post-acute/skilled

 

135,255

 

 

11,029

 

 

146,284

 

134,623

 

117,822

 

Life science

 

75,227

 

 

 

1

 

75,228

 

61,388

 

58,265

 

Medical office

 

89,996

 

 

 

498

 

90,494

 

54,883

 

53,770

 

Hospital

 

10,460

 

 

312

 

 

10,772

 

9,493

 

21,304

 

Total

 

$

461,199

 

$

36,394

 

$

14,147

 

$

499

 

$

512,239

 

$

423,706

 

$

399,166

 

 

For the six months ended June 30, 2014:

 

Segments

 

Rental
Revenues
(1)

 

Resident Fees
and Services

 

Interest
Income

 

Investment
Management
Fee Income

 

Total
Revenues

 

NOI(2)

 

Adjusted
(Cash) NOI(2)

 

Senior housing

 

$

301,989

 

$

75,992

 

$

6,714

 

$

 

$

384,695

 

$

328,610

 

$

303,851

 

Post-acute/skilled

 

276,328

 

 

26,919

 

 

303,247

 

275,263

 

240,204

 

Life science

 

153,663

 

 

 

2

 

153,665

 

124,053

 

118,168

 

Medical office

 

180,803

 

 

 

891

 

181,694

 

108,122

 

106,799

 

Hospital

 

42,812

 

 

 

 

42,812

 

40,965

 

41,136

 

Total

 

$

955,595

 

$

75,992

 

$

33,633

 

$

893

 

$

1,066,113

 

$

877,013

 

$

810,158

 

 

For the six months ended June 30, 2013:

 

Segments

 

Rental
Revenues
(1)

 

Resident Fees
and Services

 

Interest
Income

 

Investment
Management
Fee Income

 

Total
Revenues

 

NOI(2)

 

Adjusted
(Cash) NOI(2)

 

Senior housing

 

$

299,157

 

$

72,139

 

$

5,207

 

$

 

$

376,503

 

$

324,438

 

$

290,726

 

Post-acute/ skilled

 

269,091

 

 

21,014

 

 

290,105

 

267,830

 

231,669

 

Life science

 

148,557

 

 

 

2

 

148,559

 

121,335

 

114,605

 

Medical office

 

176,827

 

 

 

940

 

177,767

 

107,450

 

105,010

 

Hospital

 

30,178

 

 

312

 

 

30,490

 

28,323

 

39,780

 

Total

 

$

923,810

 

$

72,139

 

$

26,533

 

$

942

 

$

1,023,424

 

$

849,376

 

$

781,790

 

 

 

(1)     Represents rental and related revenues, tenant recoveries and income from DFLs.

(2)     NOI is a non-GAAP supplemental financial measure used to evaluate the operating performance of real estate. The Company defines NOI as rental and related revenues, including tenant recoveries, resident fees and services, and income from DFLs, less property level operating expenses. NOI excludes interest income, investment management fee income, interest expense, depreciation and amortization, general and administrative expenses, litigation settlement, impairments, impairment recoveries, other income, net, income taxes, equity income from and impairments of investments in unconsolidated joint ventures, and discontinued operations. The Company believes NOI provides relevant and useful information because it reflects only income and operating expense items that are incurred at the property level and presents them on an unleveraged basis. Adjusted NOI is calculated as NOI after eliminating the effects of straight-line rents, DFL accretion, amortization of above and below market lease intangibles, and lease termination fees. Adjusted NOI is sometimes referred to as “cash NOI.” The Company uses NOI and adjusted NOI to make decisions about resource allocations and to assess and compare property level performance. The Company believes that net income is the most directly comparable GAAP measure to NOI. NOI should not be viewed as an alternative measure of operating performance to net income as defined by GAAP because it does not reflect the aforementioned excluded items. Further, the Company’s definition of NOI may not be comparable to the definition used by other REITs or real estate companies, as those companies may use different methodologies for calculating NOI.

Reconciliation of reported net income to NOI and adjusted NOI

The following is a reconciliation of reported net income to NOI and adjusted NOI (in thousands):

 

 

 

Three Months Ended June 30,

 

Six Months Ended June 30,

 

 

 

2014

 

2013

 

2014

 

2013

 

Net income

 

$

222,279

 

$

216,725

 

$

485,902

 

$

450,509

 

Interest income

 

(16,937

)

(14,147

)

(33,633

)

(26,533

)

Investment management fee income

 

(444

)

(499

)

(893

)

(942

)

Interest expense

 

106,842

 

108,452

 

213,480

 

217,562

 

Depreciation and amortization

 

113,133

 

109,210

 

220,521

 

212,389

 

General and administrative

 

29,062

 

24,062

 

50,456

 

44,717

 

Other income, net

 

(709

)

(3,288

)

(2,639

)

(15,400

)

Income taxes

 

1,339

 

1,604

 

2,785

 

2,519

 

Equity income from unconsolidated joint ventures

 

(14,692

)

(15,585

)

(29,220

)

(30,386

)

Total discontinued operations

 

 

(2,828

)

(29,746

)

(5,059

)

NOI

 

439,873

 

423,706

 

877,013

 

849,376

 

Straight-line rents

 

(12,487

)

2,838

 

(26,455

)

(15,955

)

DFL accretion

 

(17,813

)

(21,394

)

(39,235

)

(45,564

)

Amortization of above and below market lease intangibles, net

 

(175

)

(5,990

)

(343

)

(6,068

)

Lease termination fees

 

(233

)

(15

)

(811

)

(15

)

NOI adjustments related to discontinued operations

 

 

21

 

(11

)

16

 

Adjusted (Cash) NOI

 

$

409,165

 

$

399,166

 

$

810,158

 

$

781,790

 

 

Reconciliation of company's assets to total assets

The Company’s total assets by segment were (in thousands):

 

 

 

June 30,

 

December 31,

 

Segments

 

2014

 

2013

 

Senior housing

 

$

8,046,417

 

$

7,803,085

 

Post-acute/skilled nursing

 

6,335,887

 

6,266,938

 

Life science

 

4,078,119

 

3,986,187

 

Medical office

 

2,702,584

 

2,686,069

 

Hospital

 

639,945

 

639,357

 

Gross segment assets

 

21,802,952

 

21,381,636

 

Accumulated depreciation and amortization

 

(2,417,853

)

(2,254,591

)

Net segment assets

 

19,385,099

 

19,127,045

 

Assets held-for-sale, net

 

 

9,819

 

Other non-segment assets

 

759,070

 

939,006

 

Total assets

 

$

20,144,169

 

$

20,075,870