Segment Reporting

6 Months Ended

Jun. 30, 2015

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 four operating segments: triple-net, seniors housing operating, outpatient medical and life science. During the quarter ended March 31, 2015, we changed the names of our seniors housing triple-net segment to triple-net and our medical facilities segment to outpatient medical.

Our triple-net properties include long-term/post-acute care facilities, hospitals, assisted living facilities, independent living/continuing care retirement communities, care homes (United Kingdom), independent support living facilities (Canada), care homes with nursing (United Kingdom) and combinations thereof. Under the 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 that are owned and/or operated through RIDEA structures (see Notes 3 and 18).

Our outpatient medical properties include medical office buildings and life science buildings which are aggregated into our outpatient medical reportable segment. Our medical office buildings are typically leased to multiple tenants and generally require a certain level of property management. Our life science investment represents an investment in an unconsolidated entity (see Note 7).

We evaluate performance based upon NOI by 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.

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, 2014). 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.

     Summary information for the reportable segments is as follows for the periods presented (in thousands):

Three Months Ended June 30, 2015:		Triple-net		Seniors Housing Operating		Outpatient Medical		Non-segment / Corporate		Total
Rental income	$	279,990	$	-	$	116,636	$	-	$	396,626
Resident fees and services		-		535,553		-		-		535,553
Interest income		18,189		1,042		1,345		-		20,576
Other income		970		3,210		195		39		4,414
Total revenues		299,149		539,805		118,176		39		957,169
Property operating expenses		-		360,569		37,785		-		398,354
Net operating income from continuing operations		299,149		179,236		80,391		39		558,815
Reconciling items:
Interest expense		2,679		38,796		7,184		70,202		118,861
Depreciation and amortization		72,402		88,844		47,556		-		208,802
General and administrative		-		-		-		38,474		38,474
Transaction costs		7,579		3,937		975		-		12,491
Loss (gain) on extinguishment of debt, net		(102)		-		-		18,989		18,887
Other expenses		-		-				10,583 (1)		10,583
Income (loss) from continuing operations before income taxes and income from unconsolidated entities		216,591		47,659		24,676		(138,209)		150,717
Income tax expense		(3,121)		(3,449)		(161)		(686)		(7,417)
(Loss) income from unconsolidated entities		1,453		(6,083)		1,678		-		(2,952)
Income (loss) from continuing operations		214,923		38,127		26,193		(138,895)		140,348
Gain (loss) on real estate dispositions, net		-		-		190,111		-		190,111
Net income (loss)	$	214,923	$	38,127	$	216,304	$	(138,895)	$	330,459
Total assets	$	12,191,264	$	10,432,990	$	4,701,830	$	81,398	$	27,407,482
(1) Due to termination of our investment in a strategic medical office partnership and costs associated with the retirement of an executive officer.

Three Months Ended June 30, 2014:		Triple-net		Seniors Housing Operating		Outpatient Medical		Non-segment / Corporate		Total
Rental income	$	248,134	$	-	$	99,713	$	-	$	347,847
Resident fees and services		-		467,639		-		-		467,639
Interest income		7,980		11		942		-		8,933
Other income		325		1,264		362		76		2,027
Total revenues		256,439		468,914		101,017		76		826,446
Property operating expenses		447		310,029		33,278		-		343,754
Net operating income from continuing operations		255,992		158,885		67,739		76		482,692
Reconciling items:
Interest expense		8,655		28,833		8,346		75,231		121,065
Loss (gain) on derivatives, net		73		278		-		-		351
Depreciation and amortization		67,372		109,644		37,433		-		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		175,885		17,939		20,587		(126,815)		87,596
Income tax expense		(438)		(801)		(330)		-		(1,569)
(Loss) income from unconsolidated entities		1,423		(15,496)		2,557		-		(11,516)
Income (loss) from continuing operations		176,870		1,642		22,814		(126,815)		74,511
Income (loss) from discontinued operations		6,675		-		-		-		6,675
Gain (loss) on real estate dispositions, net		5,762		-		906		-		6,668
Net income (loss)	$	189,307	$	1,642	$	23,720	$	(126,815)	$	87,854

Six Months Ended June 30, 2015:		Triple-net		Seniors Housing Operating		Outpatient Medical		Non-segment / Corporate		Total
Rental income	$	544,396	$	-	$	231,817	$	-	$	776,213
Resident fees and services		-		1,028,063		-		-		1,028,063
Interest income		32,888		2,073		2,609		-		37,570
Other income		4,853		4,229		356		62		9,500
Total revenues		582,137		1,034,365		234,782		62		1,851,346
Property operating expenses		-		699,076		75,739		-		774,815
Net operating income from continuing operations		582,137		335,289		159,043		62		1,076,531
Reconciling items:
Interest expense		12,706		73,255		14,809		139,172		239,942
Loss (gain) on derivatives, net		(58,427)		-		-		-		(58,427)
Depreciation and amortization		142,434		165,479		89,718		-		397,631
General and administrative		-		-		-		73,612		73,612
Transaction costs		43,750		15,979		1,316		-		61,045
Loss (gain) on extinguishment of debt, net		10,235		-		-		24,053		34,288
Impairment of assets		2,220		-		-		-		2,220
Other expenses		-		-		-		10,583		10,583
Income (loss) from continuing operations before income taxes and income from unconsolidated entities		429,219		80,576		53,200		(247,358)		315,637
Income tax expense		(2,703)		(3,982)		305		(733)		(7,113)
(Loss) income from unconsolidated entities		2,846		(21,156)		2,710		-		(15,600)
Income (loss) from continuing operations		429,362		55,438		56,215		(248,091)		292,924
Gain (loss) on real estate dispositions, net		54,097		-		192,859		-		246,956
Net income (loss)	$	483,459	$	55,438	$	249,074	$	(248,091)	$	539,880

Six Months Ended June 30, 2014:		Triple-net		Seniors Housing Operating		Outpatient Medical		Non-segment / Corporate		Total
Rental income	$	485,852	$	-	$	198,451	$	-	$	684,303
Resident fees and services		-		923,904		-		-		923,904
Interest income		15,700		11		1,816		-		17,527
Other income		468		1,318		643		91		2,520
Total revenues		502,020		925,233		200,910		91		1,628,254
Property operating expenses		690		618,213		66,282		-		685,185
Net operating income from continuing operations		501,330		307,020		134,628		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		134,640		238,806		74,320		-		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		344,565		8,951		41,158		(234,520)		160,154
Income tax expense		(793)		(2,444)		(593)		-		(3,830)
(Loss) income from unconsolidated entities		2,804		(23,457)		3,580		-		(17,073)
Income (loss) from continuing operations		346,576		(16,950)		44,145		(234,520)		139,251
Income (loss) from discontinued operations		7,135		-		-		-		7,135
Gain (loss) on real estate dispositions, net		5,762		-		906		-		6,668
Net income (loss)	$	359,473	$	(16,950)	$	45,051	$	(234,520)	$	153,054

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, 2015			June 30, 2014			June 30, 2015			June 30, 2014
Revenues:		Amount	%		Amount	%		Amount	%		Amount	%
United States	$	771,031	80.6%	$	695,922	84.2%	$	1,516,168	81.9%	$	1,371,021	84.2%
International		186,138	19.4%		130,524	15.8%		335,178	18.1%		257,233	15.8%
Total	$	957,169	100.0%	$	826,446	100.0%	$	1,851,346	100.0%	$	1,628,254	100.0%
		As of
		June 30, 2015			December 31, 2014
Assets:		Amount	%		Amount	%
United States	$	22,273,463	81.3%	$	20,728,477	82.9%
International		5,134,019	18.7%		4,285,819	17.1%
Total	$	27,407,482	100.0%	$	25,014,296	100.0%