Segment Reporting

9 Months Ended

Sep. 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 September 30, 2014:		Seniors Housing Triple-net		Seniors Housing Operating		Medical Facilities		Non-segment / Corporate		Total
Rental income	$	231,512	$	-	$	122,636	$	-	$	354,148
Resident fees and services		-		482,412		-		-		482,412
Interest income		5,852		1,054		2,438		-		9,344
Other income		836		325		352		106		1,619
Total revenues		238,200		483,791		125,426		106		847,523
Property operating expenses		-		320,895		34,262		-		355,157
Net operating income from continuing operations		238,200		162,896		91,164		106		492,366
Reconciling items:
Interest expense		10,294		26,612		7,692		73,837		118,435
Loss (gain) on derivatives, net		52		(3)		-		-		49
Depreciation and amortization		63,223		95,819		41,928		-		200,970
General and administrative		-		-		-		30,803		30,803
Transaction costs		1,619		10,572		1,363		-		13,554
Loss (gain) on extinguishment of debt, net		(36)		-		-		2,728		2,692
Other expenses		8,825		1,437		-		-		10,262
Income (loss) from continuing operations before income taxes and income from unconsolidated entities	$	154,223	$	28,459	$	40,181	$	(107,262)	$	115,601
Total assets	$	10,354,397	$	9,248,040	$	4,886,894	$	52,391	$	24,541,722

Three Months Ended September 30, 2013:		Seniors Housing Triple-net		Seniors Housing Operating		Medical Facilities		Non-segment / Corporate		Total
Rental income	$	197,950	$	-	$	110,562	$	-	$	308,512
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		203,763		466,294		113,622		32		783,711
Property operating expenses		-		311,575		30,346		-		341,921
Net operating income from continuing operations		203,763		154,719		83,276		32		441,790
Reconciling items:
Interest expense		5,869		24,693		8,732		76,726		116,020
Loss (gain) on derivatives, net		4,872		-		-		-		4,872
Depreciation and amortization		57,214		144,578		39,235		-		241,027
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	$	131,782	$	(28,182)	$	34,626	$	(106,596)	$	31,630

Nine Months Ended September 30, 2014:		Seniors Housing Triple-net		Seniors Housing Operating		Medical Facilities		Non-segment / Corporate		Total
Rental income	$	671,813	$	-	$	366,638	$	-	$	1,038,451
Resident fees and services		-		1,406,316		-		-		1,406,316
Interest income		16,958		1,065		8,848		-		26,871
Other income		1,281		1,643		1,017		198		4,139
Total revenues		690,052		1,409,024		376,503		198		2,475,777
Property operating expenses		-		939,108		101,234		-		1,040,342
Net operating income from continuing operations		690,052		469,916		275,269		198		1,435,435
Reconciling items:
Interest expense		28,064		82,924		25,422		223,924		360,334
Loss (gain) on derivatives, net		125		275		-		-		400
Depreciation and amortization		186,240		334,625		127,872		-		648,737
General and administrative		-		-		-		115,327		115,327
Transaction costs		5,900		12,863		2,783		-		21,546
Loss (gain) on extinguishment of debt, net		(36)		383		-		2,728		3,075
Other expenses		8,825		1,437		-		-		10,262
Income (loss) from continuing operations before income taxes and income from unconsolidated entities	$	460,934	$	37,409	$	119,192	$	(341,781)	$	275,754

Nine Months Ended September 30, 2013:		Seniors Housing Triple-net		Seniors Housing Operating		Medical Facilities		Non-segment / Corporate		Total
Rental income	$	568,764	$	-	$	331,264	$	-	$	900,028
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		586,258		1,165,372		340,060		277		2,091,967
Property operating expenses		-		785,050		87,651		-		872,701
Net operating income from continuing operations		586,258		380,322		252,409		277		1,219,266
Reconciling items:
Interest expense		14,921		63,175		27,097		229,128		334,321
Loss (gain) on derivatives, net		4,872		(407)		-		-		4,465
Depreciation and amortization		166,801		338,099		118,877		-		623,777
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	$	383,934	$	(115,991)	$	105,464	$	(309,834)	$	63,573

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, 2014			September 30, 2013			September 30, 2014			September 30, 2013
Revenues:		Amount	%		Amount	%		Amount	%		Amount	%
United States	$	707,842	83.5%	$	662,922	84.6%	$	2,078,863	84.0%	$	1,827,470	87.4%
International		139,681	16.5%		120,789	15.4%		396,914	16.0%		264,497	12.6%
Total	$	847,523	100.0%	$	783,711	100.0%	$	2,475,777	100.0%	$	2,091,967	100.0%
		As of
		September 30, 2014			December 31, 2013
Assets:		Amount	%		Amount	%
United States	$	21,199,728	86.4%	$	19,759,945	85.6%
International		3,341,994	13.6%		3,324,012	14.4%
Total	$	24,541,722	100.0%	$	23,083,957	100.0%