Segment Reporting

9 Months Ended

Sep. 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. During the three months ended June 30, 2015, we disposed of our life science investments.

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 September 30, 2015:		Triple-net		Seniors Housing Operating		Outpatient Medical		Non-segment / Corporate		Total
Rental income	$	285,027	$	-	$	124,263	$	-	$	409,290
Resident fees and services		-		545,255		-		-		545,255
Interest income		19,454		1,054		1,872		-		22,380
Other income		969		772		309		22		2,072
Total revenues		305,450		547,081		126,444		22		978,997
Property operating expenses		-		368,050		40,653		-		408,703
Net operating income from continuing operations		305,450		179,031		85,791		22		570,294
Reconciling items:
Interest expense		12,359		30,990		7,120		70,661		121,130
Depreciation and amortization		74,486		87,306		44,007		-		205,799
General and administrative		-		-		-		36,950		36,950
Transaction costs		1,865		7,630		(162)		-		9,333
Loss (gain) on extinguishment of debt, net		(139)		-		-		723		584
Income (loss) from continuing operations before income taxes and income from unconsolidated entities		216,879		53,105		34,826		(108,312)		196,498
Income tax expense		87		3,237		154		(134)		3,344
(Loss) income from unconsolidated entities		2,851		(5,629)		147		-		(2,631)
Income (loss) from continuing operations		219,817		50,713		35,127		(108,446)		197,211
Gain (loss) on real estate dispositions, net		2,155		-		(109)		-		2,046
Net income (loss)	$	221,972	$	50,713	$	35,018	$	(108,446)	$	199,257
Total assets	$	12,346,157	$	10,325,540	$	4,699,643	$	85,026	$	27,456,366

Three Months Ended September 30, 2014:		Triple-net		Seniors Housing Operating		Outpatient Medical		Non-segment / Corporate		Total
Rental income	$	250,748	$	-	$	103,400	$	-	$	354,148
Resident fees and services		-		482,412		-		-		482,412
Interest income		7,520		1,054		770		-		9,344
Other income		981		325		207		106		1,619
Total revenues		259,249		483,791		104,377		106		847,523
Property operating expenses		41		320,895		34,221		-		355,157
Net operating income from continuing operations		259,208		162,896		70,156		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		68,027		95,819		37,124		-		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		170,427		28,459		23,977		(107,262)		115,601
Income tax expense		5,986		3,746		466		-		10,198
(Loss) income from unconsolidated entities		1,353		(5,550)		1,565		-		(2,632)
Income (loss) from continuing operations		177,766		26,655		26,008		(107,262)		123,167
Gain (loss) on real estate dispositions, net		29,604		-		-		-		29,604
Net income (loss)	$	207,370	$	26,655	$	26,008	$	(107,262)	$	152,771

Nine Months Ended September 30, 2015:		Triple-net		Seniors Housing Operating		Outpatient Medical		Non-segment / Corporate		Total
Rental income	$	829,422	$	-	$	356,080	$	-	$	1,185,502
Resident fees and services		-		1,573,318		-		-		1,573,318
Interest income		52,343		3,126		4,481		-		59,950
Other income		5,823		5,001		665		83		11,572
Total revenues		887,588		1,581,445		361,226		83		2,830,342
Property operating expenses		-		1,067,127		116,392		-		1,183,519
Net operating income from continuing operations		887,588		514,318		244,834		83		1,646,823
Reconciling items:
Interest expense		25,064		104,245		21,929		209,833		361,071
Loss (gain) on derivatives, net		(58,427)		-		-		-		(58,427)
Depreciation and amortization		216,921		252,785		133,725		-		603,431
General and administrative		-		-		-		110,562		110,562
Transaction costs		45,615		23,610		1,154		-		70,379
Loss (gain) on extinguishment of debt, net		10,096		-		-		24,776		34,872
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		646,099		133,678		88,026		(355,671)		512,132
Income tax expense		(2,617)		(745)		460		(867)		(3,769)
(Loss) income from unconsolidated entities		5,697		(26,785)		2,857		-		(18,231)
Income (loss) from continuing operations		649,179		106,148		91,343		(356,538)		490,132
Gain (loss) on real estate dispositions, net		56,251		-		192,751		-		249,002
Net income (loss)	$	705,430	$	106,148	$	284,094	$	(356,538)	$	739,134

Nine Months Ended September 30, 2014:		Triple-net		Seniors Housing Operating		Outpatient Medical		Non-segment / Corporate		Total
Rental income	$	736,599	$	-	$	301,852	$	-	$	1,038,451
Resident fees and services		-		1,406,316		-		-		1,406,316
Interest income		23,220		1,065		2,586		-		26,871
Other income		1,448		1,643		850		198		4,139
Total revenues		761,267		1,409,024		305,288		198		2,475,777
Property operating expenses		732		939,108		100,502		-		1,040,342
Net operating income from continuing operations		760,535		469,916		204,786		198		1,435,435
Reconciling items:
Interest expense		28,063		82,924		25,423		223,924		360,334
Loss (gain) on derivatives, net		125		275		-		-		400
Depreciation and amortization		202,668		334,625		111,444		-		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		514,990		37,409		65,136		(341,781)		275,754
Income tax expense		5,194		1,302		(127)		-		6,369
(Loss) income from unconsolidated entities		4,157		(29,007)		5,145		-		(19,705)
Income (loss) from continuing operations		524,341		9,704		70,154		(341,781)		262,418
Income (loss) from discontinued operations		7,135		-		-		-		7,135
Gain (loss) on real estate dispositions, net		35,366		-		906		-		36,272
Net income (loss)	$	566,842	$	9,704	$	71,060	$	(341,781)	$	305,825

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, 2015			September 30, 2014			September 30, 2015			September 30, 2014
Revenues:		Amount	%		Amount	%		Amount	%		Amount	%
United States	$	793,429	81.0%	$	707,842	83.5%	$	2,309,596	81.6%	$	2,078,863	84.0%
International		185,568	19.0%		139,681	16.5%		520,746	18.4%		396,914	16.0%
Total	$	978,997	100.0%	$	847,523	100.0%	$	2,830,342	100.0%	$	2,475,777	100.0%
		As of
		September 30, 2015			December 31, 2014
Assets:		Amount	%		Amount	%
United States	$	22,508,234	82.0%	$	20,728,477	82.9%
International		4,948,132	18.0%		4,285,819	17.1%
Total	$	27,456,366	100.0%	$	25,014,296	100.0%