Segment Reporting

6 Months Ended

Jun. 30, 2014

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, care homes (United Kingdom), care homes with nursing (United Kingdom) 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 the seniors housing communities referenced above and independent supportive living facilities (Canada) 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, 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 is as follows for the periods presented (in thousands):

Three Months Ended June 30, 2014:		Seniors Housing Triple-net		Seniors Housing Operating		Medical Facilities		Non-segment / Corporate		Total
Rental income	$	225,472	$	-	$	122,375	$	-	$	347,847
Resident fees and services		-		467,639		-		-		467,639
Interest income		5,666		11		3,256		-		8,933
Other income		325		1,264		362		76		2,027
Total revenues		231,463		468,914		125,993		76		826,446
Property operating expenses		-		310,029		33,725		-		343,754
Net operating income from continuing operations		231,463		158,885		92,268		76		482,692
Reconciling items:
Interest expense		8,879		28,833		8,122		75,231		121,065
(Loss) gain on derivatives, net		73		278		-		-		351
Depreciation and amortization		61,613		109,644		43,192		-		214,449
General and administrative		-		-		-		51,660		51,660
Transaction costs		4,007		1,660		1,373		-		7,040
(Loss) gain on extinguishment of debt, net		-		531		-		-		531
Income (loss) from continuing operations before income taxes and income from unconsolidated entities	$	156,891	$	17,939	$	39,581	$	(126,815)	$	87,596
Total assets	$	9,460,260	$	9,156,333	$	4,906,320	$	50,977	$	23,573,890

Three Months Ended June 30, 2013:		Seniors Housing Triple-net		Seniors Housing Operating		Medical Facilities		Non-segment / Corporate		Total
Rental income	$	187,518	$	-	$	111,355	$	-	$	298,873
Resident fees and services		-		370,995		-		-		370,995
Interest income		5,433		-		2,207		-		7,640
Other income		199		-		662		164		1,025
Total revenues		193,150		370,995		114,224		164		678,533
Property operating expenses		-		248,972		28,986		-		277,958
Net operating income from continuing operations		193,150		122,023		85,238		164		400,575
Reconciling items:
Interest expense		3,247		19,412		9,506		77,300		109,465
(Loss) gain on derivatives, net		-		(2,716)		-		-		(2,716)
Depreciation and amortization		54,637		103,646		39,779		-		198,062
General and administrative		-		-		-		23,902		23,902
Transaction costs		11,211		16,799		126		-		28,136
Income (loss) from continuing operations before income taxes and income from unconsolidated entities	$	124,055	$	(15,118)	$	35,827	$	(101,038)	$	43,726

Six Months Ended June 30, 2014:		Seniors Housing Triple-net		Seniors Housing Operating		Medical Facilities		Non-segment / Corporate		Total
Rental income	$	440,302	$	-	$	244,001	$	-	$	684,303
Resident fees and services		-		923,904		-		-		923,904
Interest income		11,106		11		6,410		-		17,527
Other income		446		1,318		665		91		2,520
Total revenues		451,854		925,233		251,076		91		1,628,254
Property operating expenses		-		618,213		66,972		-		685,185
Net operating income from continuing operations		451,854		307,020		184,104		91		943,069
Reconciling items:
Interest expense		17,769		56,312		17,730		150,087		241,898
(Loss) gain on derivatives, net		73		278		-		-		351
Depreciation and amortization		123,016		238,806		85,944		-		447,766
General and administrative		-		-		-		84,524		84,524
Transaction costs		4,283		2,290		1,420		-		7,993
(Loss) gain on extinguishment of debt, net		-		383		-		-		383
Income (loss) from continuing operations before income taxes and income from unconsolidated entities	$	306,713	$	8,951	$	79,010	$	(234,520)	$	160,154

Six Months Ended June 30, 2013:		Seniors Housing Triple-net		Seniors Housing Operating		Medical Facilities		Non-segment / Corporate		Total
Rental income	$	370,814	$	-	$	220,702	$	-	$	591,516
Resident fees and services		-		698,319		-		-		698,319
Interest income		11,276		757		4,663		-		16,696
Other income		408		-		1,072		245		1,725
Total revenues		382,498		699,076		226,437		245		1,308,256
Property operating expenses		-		473,475		57,305		-		530,780
Net operating income from continuing operations		382,498		225,601		169,132		245		777,476
Reconciling items:
Interest expense		9,055		38,482		18,364		152,402		218,303
(Loss) gain on derivatives, net		-		(407)		-		-		(407)
Depreciation and amortization		109,587		193,521		79,642		-		382,750
General and administrative		-		-		-		51,081		51,081
Transaction costs		11,705		82,124		287		-		94,116
(Loss) gain on extinguishment of debt, net		-		(308)		-		-		(308)
Income (loss) from continuing operations before income taxes and income from unconsolidated entities	$	252,151	$	(87,811)	$	70,839	$	(203,238)	$	31,941

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						Six Months Ended
		June 30, 2014			June 30, 2013			June 30, 2014			June 30, 2013
Revenues:		Amount	%		Amount	%		Amount	%		Amount	%
United States	$	695,922	84.2%	$	591,509	87.2%	$	1,371,021	84.2%	$	1,160,688	88.7%
International		130,524	15.8%		87,024	12.8%		257,233	15.8%		147,568	11.3%
Total	$	826,446	100.0%	$	678,533	100.0%	$	1,628,254	100.0%	$	1,308,256	100.0%
		As of
		June 30, 2014			December 31, 2013
Assets:		Amount	%		Amount	%
United States	$	20,376,451	86.4%	$	19,759,945	85.6%
International		3,197,439	13.6%		3,324,012	14.4%
Total	$	23,573,890	100.0%	$	23,083,957	100.0%