Segment Reporting

3 Months Ended

Sep. 30, 2012

Segment Reporting [Abstract]

Segment Reporting

17. Segment Reporting

We invest in seniors housing and health care real estate. We evaluate our business and make resource allocations within our three business segments: seniors housing triple-net, seniors housing operating and medical facilities.

Our seniors housing triple-net properties include skilled nursing/post-acute facilities, assisted living facilities, independent living/continuing care retirement communities and combinations thereof. Under the seniors housing triple-net segment, we invest in seniors housing and health care real estate through acquisition and financing of primarily single tenant properties. Properties acquired are primarily leased under triple-net leases and we are not involved in the management of the property. Our seniors housing operating properties include assisted living facilities and independent living/continuing care retirement communities that are owned and operated through RIDEA (see Note 3) partnership structures.

Our primary medical facility properties include medical office buildings, hospitals and life science buildings. Our medical office buildings are typically leased to multiple tenants and generally require a certain level of property management. Our hospital investments are structured similar to our seniors housing triple-net investments. Our life science investments represent investments in an unconsolidated entity (see Note 7 for additional information).

The accounting policies of the segments are the same as those described in the summary of significant accounting policies (see Note 2 to the financial statements included in our Annual Report on Form 10-K for the year ended December 31, 2011, as updated by our Current Report on Form 8-K filed on August 6, 2012.) The results of operations for all acquisitions described in Note 3 are included in our consolidated results of operations from the acquisition dates and are components of the appropriate segments. There are no intersegment sales or transfers.

We evaluate performance based uponnet operating income from continuing operations (“NOI”) of each segment. We define NOI as total revenues, including tenant reimbursements, less property level operating expenses, which exclude depreciation and amortization, general and administrative expenses, transaction costs, impairments and interest expense. We believe NOI provides investors relevant and useful information because it measures the operating performance of our properties at the property level on an unleveraged basis. We use NOI to make decisions about resource allocations and to assess the property level performance of our properties.

Non-segment revenue consists mainly of interest income on non-real estate investments and other income. Non-segment assets consist of corporate assets including cash, deferred loan expenses and corporate offices and equipment among others. Non-property specific revenues and expenses are not allocated to individual segments in determining net operating income.

Summary information for the reportable segments for the three andnine months ended September 30, 2012 and 2011 is as follows (in thousands):

Three Months Ended September 30, 2012:		Seniors Housing Triple-net		Seniors Housing Operating		Medical Facilities		Non-segment / Corporate		Total
Rental income	$	185,384	$	-	$	104,841	$	-	$	290,225
Resident fees and services		-		174,464		-		-		174,464
Interest income		6,116		-		1,995		-		8,111
Other income		662		-		400		277		1,339
Total revenues		192,162		174,464		107,236		277		474,139
Property operating expenses		-		(118,369)		(26,110)		-		(144,479)
Net operating income from continuing operations		192,162		56,095		81,126		277		329,660
Reconciling items:
Interest expense		(1,547)		(17,474)		(9,405)		(66,154)		(94,580)
(Loss) gain on derivatives, net		-		(409)		-		-		(409)
Depreciation and amortization		(54,189)		(39,591)		(38,370)		-		(132,150)
General and administrative		-		-		-		(23,679)		(23,679)
Transaction costs		(5,590)		(1,966)		(708)		-		(8,264)
(Loss) gain on extinguishment of debt, net		(126)		(89)		-		-		(215)
Provision for loan losses		(27,008)		-		-		-		(27,008)
Income (loss) from continuing operations before income taxes and income from unconsolidated entities	$	103,702	$	(3,434)	$	32,643	$	(89,556)	$	43,355
Total assets	$	8,744,455	$	3,705,861	$	4,347,505	$	1,484,454	$	18,282,275

Three Months Ended September 30, 2011:		Seniors Housing Triple-net		Seniors Housing Operating		Medical Facilities		Non-segment / Corporate		Total
Rental income	$	158,356	$	-	$	77,582	$	-	$	235,938
Resident fees and services		-		125,125		-		-		125,125
Interest income		6,810		-		1,048		-		7,858
Other income		454		-		1,048		307		1,809
Total revenues		165,620		125,125		79,678		307		370,730
Property operating expenses		-		(86,218)		(16,909)		-		(103,127)
Net operating income from continuing operations		165,620		38,907		62,769		307		267,603
Reconciling items:
Interest expense		(1,690)		(13,945)		(7,394)		(61,400)		(84,429)
Depreciation and amortization		(45,726)		(39,019)		(26,837)		-		(111,582)
General and administrative		-		-		-		(19,735)		(19,735)
Transaction costs		(6,080)		305		(964)		-		(6,739)
Provision for loan losses		(90)		-		(42)		-		(132)
Income (loss) from continuing operations before income taxes and income from unconsolidated entities	$	112,034	$	(13,752)	$	27,532	$	(80,828)	$	44,986

Nine Months Ended September 30, 2012:		Seniors Housing Triple-net		Seniors Housing Operating		Medical Facilities		Non-segment / Corporate		Total
Rental income	$	529,553	$	-	$	297,074	$	-	$	826,627
Resident fees and services		-		498,295		-		-		498,295
Interest income		17,977		-		6,154		-		24,131
Other income		2,268		-		1,482		755		4,505
Total revenues		549,798		498,295		304,710		755		1,353,558
Property operating expenses		-		(336,952)		(72,654)		-		(409,606)
Net operating income from continuing operations		549,798		161,343		232,056		755		943,952
Reconciling items:
Interest expense		(4,587)		(49,537)		(27,188)		(198,746)		(280,058)
(Loss) gain on derivatives, net		(96)		1,808		-		-		1,712
Depreciation and amortization		(152,702)		(123,820)		(110,531)		-		(387,053)
General and administrative		-		-		-		(77,302)		(77,302)
Transaction costs		(30,796)		(6,365)		(5,374)		-		(42,535)
(Loss) gain on extinguishment of debt, net		(2,363)		1,089		483		-		(791)
Provision for loan losses		(27,008)		-		-		-		(27,008)
Income (loss) from continuing operations before income taxes and income from unconsolidated entities	$	332,246	$	(15,482)	$	89,446	$	(275,293)	$	130,917

Nine Months Ended September 30, 2011:		Seniors Housing Triple-net		Seniors Housing Operating		Medical Facilities		Non-segment / Corporate		Total
Rental income	$	404,097	$	-	$	211,122	$	-	$	615,219
Resident fees and services		-		319,559		-		-		319,559
Interest income		27,224		-		5,209		-		32,433
Other income		4,878		-		3,879		1,217		9,974
Total revenues		436,199		319,559		220,210		1,217		977,185
Property operating expenses		-		(219,824)		(46,257)		-		(266,081)
Net operating income from continuing operations		436,199		99,735		173,953		1,217		711,104
Reconciling items:
Interest expense		(1,531)		(33,446)		(20,215)		(165,335)		(220,527)
Depreciation and amortization		(116,227)		(97,326)		(73,070)		-		(286,623)
General and administrative		-		-		-		(57,009)		(57,009)
Transaction costs		(22,872)		(32,159)		(1,511)		-		(56,542)
Provision for loan losses		(90)		-		(457)		-		(547)
Income (loss) from continuing operations before income taxes and income from unconsolidated entities	$	295,479	$	(63,196)	$	78,700	$	(221,127)	$	89,856

Our portfolio of properties and other investments are located in the United States, the United Kingdom and Canada. Revenues and assets are attributed to the country in which the property is physically located.For the three and nine months endedSeptember 30, 2012, $7,091,000, or 1.5%,and $9,146,000, or 0.7%, respectively, of our revenues and $544,833,000, or 3.0% of our assets at September 30, 2012,were located outside the United States.