Segment Reporting

3 Months Ended

Mar. 31, 2016

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 three operating segments: triple-net, seniors housing operating and outpatient medical. During the three months ended March 31, 2016, we reclassified four properties previously classified in the triple-net segment to the outpatient medical segment.Accordingly, the segment information provided in this note has been reclassified to conform to the current presentation for all periods presented.

Our triple-net properties include long-term/post-acute care facilities, 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 outpatient medical buildings and, during past years, life science buildings which are aggregated into our outpatient medical reportable segment. Our outpatient medical 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, 2015). 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 March 31, 2016:		Triple-net		Seniors Housing Operating		Outpatient Medical		Non-segment / Corporate		Total
Rental income	$	283,825	$	-	$	131,838	$	-	$	415,663
Resident fees and services		-		602,149		-		-		602,149
Interest income		22,853		1,031		1,304		-		25,188
Other income		1,490		2,189		313		58		4,050
Total revenues		308,168		605,369		133,455		58		1,047,050
Property operating expenses		-		408,894		40,742		-		449,636
Net operating income from continuing operations		308,168		196,475		92,713		58		597,414
Reconciling items:
Interest expense		5,606		40,828		5,744		80,782		132,960
Depreciation and amortization		79,800		101,832		47,064		-		228,696
General and administrative		-		-		-		45,691		45,691
Transaction costs		2,852		3,933		1,423		-		8,208
Loss (gain) on extinguishment of debt, net		(24)		-		-		-		(24)
Impairment of assets		14,314		-		-		-		14,314
Income (loss) from continuing operations before income taxes and income from unconsolidated entities		205,620		49,882		38,482		(126,415)		167,569
Income tax expense		(317)		2,767		(228)		(497)		1,725
(Loss) income from unconsolidated entities		3,081		(6,935)		34		-		(3,820)
Income (loss) from continuing operations		208,384		45,714		38,288		(126,912)		165,474
Gain (loss) on real estate dispositions, net		-		-		-		-		-
Net income (loss)	$	208,384	$	45,714	$	38,288	$	(126,912)	$	165,474
Total assets	$	12,337,195	$	11,595,907	$	5,059,616	$	95,575	$	29,088,293

Three Months Ended March 31, 2015:		Triple-net		Seniors Housing Operating		Outpatient Medical		Non-segment / Corporate		Total
Rental income	$	261,993	$	-	$	117,594	$	-	$	379,587
Resident fees and services		-		492,510		-		-		492,510
Interest income		14,699		1,031		1,264		-		16,994
Other income		3,883		1,020		161		22		5,086
Total revenues		280,575		494,561		119,019		22		894,177
Property operating expenses		-		338,507		37,954		-		376,461
Net operating income from continuing operations		280,575		156,054		81,065		22		517,716
Reconciling items:
Interest expense		8,424		34,458		7,388		70,810		121,080
Loss (gain) on derivatives, net		(58,427)		-		-		-		(58,427)
Depreciation and amortization		69,420		76,636		42,773		-		188,829
General and administrative		-		-		-		35,138		35,138
Transaction costs		36,171		12,042		341		-		48,554
Loss (gain) on extinguishment of debt, net		10,337		-		-		5,064		15,401
Impairment of assets		2,220		-		-		-		2,220
Income (loss) from continuing operations before income taxes and income from unconsolidated entities		212,430		32,918		30,563		(110,990)		164,921
Income tax expense		419		(533)		466		(48)		304
(Loss) income from unconsolidated entities		1,393		(15,073)		1,032		-		(12,648)
Income (loss) from continuing operations		214,242		17,312		32,061		(111,038)		152,577
Gain (loss) on real estate dispositions, net		54,096		-		2,749		-		56,845
Net income (loss)	$	268,338	$	17,312	$	34,810	$	(111,038)	$	209,422

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
		March 31, 2016			March 31, 2015
Revenues:		Amount	%		Amount	%
United States	$	842,357	80.5%	$	745,136	83.3%
United Kingdom		100,555	9.6%		91,815	10.3%
Canada		104,138	9.9%		57,226	6.4%
Total	$	1,047,050	100.0%	$	894,177	100.0%
		As of
		March 31, 2016			December 31, 2015
Assets:		Amount	%		Amount	%
United States	$	23,461,804	80.7%	$	25,995,793	89.6%
United Kingdom		2,950,387	10.1%		1,741,973	6.0%
Canada		2,676,102	9.2%		1,286,079	4.4%
Total	$	29,088,293	100.0%	$	29,023,845	100.0%