Segment Reporting

9 Months Ended

Sep. 30, 2013

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 on our five operating segments: seniors housing triple-net, seniors housing operating, medical office buildings, hospitals and life science. 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 seniors housing communities that are owned and/or operated through RIDEA structures (see Notes 3 and 18).

Our medical facility properties include medical office buildings, hospitals and life science buildings which are aggregated into our medical facilities reportable segment. Our medical office buildings are typically leased to multiple tenants and generally require a certain level of property management. Our hospital investments are leased and we are not involved in the management of the property. Our life science investment represents an investment in an unconsolidated entity (see Note 7).

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, 2012, as updated by our Current Report on Form 8-K filed on August 6, 2013). 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 upon net operating income from continuing operations (“NOI”) of each segment. We define NOI as total revenues, including tenant reimbursements, less property level operating expenses. 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 NOI.

     Summary information for the reportable segments for the three and ninemonths ended September 30, 2013 and 2012 is as follows (in thousands):

Three Months Ended September 30, 2013:		Seniors Housing Triple-net		Seniors Housing Operating		Medical Facilities		Non-segment / Corporate		Total
Rental income	$	199,408	$	-	$	112,323	$	-	$	311,731
Resident fees and services		-		466,127		-		-		466,127
Interest income		5,035		-		2,594		-		7,629
Other income		778		167		466		32		1,443
Total revenues		205,221		466,294		115,383		32		786,930
Property operating expenses		-		(311,575)		(31,155)		-		(342,730)
Net operating income from continuing operations		205,221		154,719		84,228		32		444,200
Reconciling items:
Interest expense		(5,968)		(24,693)		(9,143)		(76,726)		(116,530)
(Loss) gain on derivatives, net		(4,872)		-		-		-		(4,872)
Depreciation and amortization		(58,148)		(144,578)		(39,942)		-		(242,668)
General and administrative		-		-		-		(28,718)		(28,718)
Transaction costs		(4,026)		(18,882)		(683)		-		(23,591)
(Loss) gain on extinguishment of debt, net		-		5,252		-		(1,184)		4,068
Income (loss) from continuing operations before income taxes and income from unconsolidated entities	$	132,207	$	(28,182)	$	34,460	$	(106,596)	$	31,889
Total assets	$	9,222,731	$	9,031,224	$	4,645,540	$	150,310	$	23,049,805

Three Months Ended September 30, 2012:		Seniors Housing Triple-net		Seniors Housing Operating		Medical Facilities		Non-segment / Corporate		Total
Rental income	$	178,193	$	-	$	99,726	$	-	$	277,919
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		184,971		174,464		102,121		277		461,833
Property operating expenses		-		(118,369)		(26,048)		-		(144,417)
Net operating income from continuing operations		184,971		56,095		76,073		277		317,416
Reconciling items:
Interest expense		(347)		(17,474)		(7,940)		(66,154)		(91,915)
(Loss) gain on derivatives, net		-		(409)		-		-		(409)
Depreciation and amortization		(52,294)		(39,591)		(35,959)		-		(127,844)
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	$	99,606	$	(3,434)	$	31,466	$	(89,556)	$	38,082

Nine Months Ended September 30, 2013:		Seniors Housing Triple-net		Seniors Housing Operating		Medical Facilities		Non-segment / Corporate		Total
Rental income	$	573,112	$	-	$	336,547	$	-	$	909,659
Resident fees and services		-		1,164,446		-		-		1,164,446
Interest income		16,311		757		7,257		-		24,325
Other income		1,183		169		1,539		277		3,168
Total revenues		590,606		1,165,372		345,343		277		2,101,598
Property operating expenses		-		(785,050)		(89,910)		-		(874,960)
Net operating income from continuing operations		590,606		380,322		255,433		277		1,226,638
Reconciling items:
Interest expense		(15,841)		(63,175)		(28,441)		(229,128)		(336,585)
(Loss) gain on derivatives, net		(4,872)		407		-		-		(4,465)
Depreciation and amortization		(169,603)		(338,099)		(120,998)		-		(628,700)
General and administrative		-		-		-		(79,799)		(79,799)
Transaction costs		(15,730)		(101,006)		(971)		-		(117,707)
(Loss) gain on extinguishment of debt, net		-		5,560		-		(1,184)		4,376
Income (loss) from continuing operations before income taxes and income from unconsolidated entities	$	384,560	$	(115,991)	$	105,023	$	(309,834)	$	63,758

Nine Months Ended September 30, 2012:		Seniors Housing Triple-net		Seniors Housing Operating		Medical Facilities		Non-segment / Corporate		Total
Rental income	$	508,004	$	-	$	281,744	$	-	$	789,748
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		528,249		498,295		289,380		755		1,316,679
Property operating expenses		-		(336,952)		(72,284)		-		(409,236)
Net operating income from continuing operations		528,249		161,343		217,096		755		907,443
Reconciling items:
Interest expense		(602)		(49,537)		(22,338)		(198,746)		(271,223)
(Loss) gain on derivatives, net		(96)		1,808		-		-		1,712
Depreciation and amortization		(147,074)		(123,820)		(102,450)		-		(373,344)
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	$	320,310	$	(15,482)	$	87,417	$	(275,293)	$	116,952

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. The following is a summary of geographic information for our operations for the periods presented (dollars in thousands):

		Three Months Ended						Nine Months Ended
		September 30, 2013			September 30, 2012			September 30, 2013			September 30, 2012
Revenues:		Amount	%		Amount	%		Amount	%		Amount	%
United States	$	669,968	85.1%	$	454,742	98.5%	$	1,837,068	87.4%	$	1,307,533	99.3%
International		116,962	14.9%		7,091	1.5%		264,530	12.6%		9,146	0.7%
Total	$	786,930	100.0%	$	461,833	100.0%	$	2,101,598	100.0%	$	1,316,679	100.0%
		As of
		September 30, 2013			December 31, 2012
Assets:		Amount	%		Amount	%
United States	$	19,622,576	85.1%	$	18,692,214	95.6%
International		3,427,229	14.9%		856,895	4.4%
Total	$	23,049,805	100.0%	$	19,549,109	100.0%