Segment Reporting

6 Months Ended

Jun. 30, 2017

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 December 31, 2016, we reclassified interest expense on our foreign-denominated senior notes from the seniors housing operating segment to non-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 Note 18). Our outpatient medical properties are typically leased to multiple tenants and generally require a certain level of property management.

We evaluate performance based upon consolidated net operating income (“NOI”) of each segment. We define NOI as total revenues, including tenant reimbursements, less property operating expenses. We believe NOI provides investors relevant and useful information as 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 certain 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, 2016). 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 (which excludes unconsolidated entities) is as follows(in thousands):

Three Months Ended June 30, 2017:		Triple-net		Seniors Housing Operating		Outpatient Medical		Non-segment / Corporate		Total
Rental income	$	217,889	$	-	$	137,710	$	-	$	355,599
Resident fees and services		-		677,040		-		-		677,040
Interest income		20,901		-		-		-		20,901
Other income		2,557		1,049		1,217		239		5,062
Total revenues		241,347		678,089		138,927		239		1,058,602
Property operating expenses		-		459,111		42,744		-		501,855
Consolidated net operating income		241,347		218,978		96,183		239		556,747
Interest expense		2,515		15,403		2,122		96,191		116,231
Loss (gain) on derivatives, net		736		-		-		-		736
Depreciation and amortization		60,171		117,198		47,478		-		224,847
General and administrative		-		-		-		32,632		32,632
Transaction costs
Loss (gain) on extinguishment of debt, net		-		2,524		2,991		-		5,515
Impairment of assets		4,846		8,785		-		-		13,631
Other expenses		2,181		1,165		1,310		1,683		6,339
Income (loss) from continuing operations before income taxes and income from unconsolidated entities		170,898		73,903		42,282		(130,267)		156,816
Income tax (expense) benefit		(1,471)		10,247		(351)		23		8,448
Income (loss) from unconsolidated entities		3,867		(8,449)		604		-		(3,978)
Income (loss) from continuing operations		173,294		75,701		42,535		(130,244)		161,286
Gain (loss) on real estate dispositions, net		42,155		-		-		-		42,155
Net income (loss)	$	215,449	$	75,701	$	42,535	$	(130,244)	$	203,441
Total assets	$	9,990,063	$	12,753,128	$	5,008,067	$	224,528	$	27,975,786

Three Months Ended June 30, 2016:		Triple-net		Seniors Housing Operating		Outpatient Medical		Non-segment / Corporate		Total
Rental income	$	287,134	$	-	$	135,494	$	-	$	422,628
Resident fees and services		-		615,220		-		-		615,220
Interest income		21,971		1,042		994		-		24,007
Other income		1,206		8,989		4,153		454		14,802
Total revenues		310,311		625,251		140,641		454		1,076,657
Property operating expenses		-		417,996		40,836		-		458,832
Consolidated net operating income		310,311		207,255		99,805		454		617,825
Interest expense		5,754		20,274		5,402		100,896		132,326
Depreciation and amortization		75,809		102,312		48,448		-		226,569
General and administrative		-		-		-		39,914		39,914
Transaction costs		1,291		3,247		619		-		5,157
Loss (gain) on extinguishment of debt, net		121		(88)		-		-		33
Other expenses		-		-		-		3,161		3,161
Income (loss) from continuing operations before income taxes and income from unconsolidated entities		227,336		81,510		45,336		(143,517)		210,665
Income tax (expense) benefit		(213)		2,023		(248)		(1,049)		513
Income (loss) from unconsolidated entities		3,018		(4,887)		(90)		-		(1,959)
Income (loss) from continuing operations		230,141		78,646		44,998		(144,566)		209,219
Gain (loss) on real estate dispositions, net		1,530		-		-		-		1,530
Net income (loss)	$	231,671	$	78,646	$	44,998	$	(144,566)	$	210,749

Six Months Ended June 30, 2017:		Triple-net		Seniors Housing Operating		Outpatient Medical		Non-segment / Corporate		Total
Rental income	$	445,180	$	-	$	277,561	$	-	$	722,741
Resident fees and services		-		1,347,377		-		-		1,347,377
Interest income		41,580		69		-		-		41,649
Other income		4,321		2,510		1,830		472		9,133
Total revenues		491,081		1,349,956		279,391		472		2,120,900
Property operating expenses		-		921,536		90,488		-		1,012,024
Consolidated net operating income		491,081		428,420		188,903		472		1,108,876
Interest expense		8,025		31,219		4,413		191,170		234,827
Loss (gain) on derivatives, net		1,960		-		-		-		1,960
Depreciation and amortization		119,781		236,935		96,408		-		453,124
General and administrative		-		-		-		63,733		63,733
Loss (gain) on extinguishment of debt, net		29,083		3,414		4,373		-		36,870
Impairment of assets		4,846		14,191		5,625		-		24,662
Other expenses		7,190		2,943		1,671		6,210		18,014
Income (loss) from continuing operations before income taxes and income from unconsolidated entities		320,196		139,718		76,413		(260,641)		275,686
Income tax (expense) benefit		(2,271)		9,160		(686)		-		6,203
Income (loss) from unconsolidated entities		9,505		(37,640)		1,051		-		(27,084)
Income (loss) from continuing operations		327,430		111,238		76,778		(260,641)		254,805
Gain (loss) on real estate dispositions, net		273,236		13,011		-		-		286,247
Net income (loss)	$	600,666	$	124,249	$	76,778	$	(260,641)	$	541,052

Six Months Ended June 30, 2016:		Triple-net		Seniors Housing Operating		Outpatient Medical		Non-segment / Corporate		Total
Rental income	$	570,958	$	-	$	267,332	$	-	$	838,290
Resident fees and services		-		1,217,369		-		-		1,217,369
Interest income		44,824		2,073		2,298		-		49,195
Other income		2,695		11,178		4,466		512		18,851
Total revenues		618,477		1,230,620		274,096		512		2,123,705
Property operating expenses		-		826,890		81,578		-		908,468
Consolidated net operating income		618,477		403,730		192,518		512		1,215,237
Interest expense		12,117		40,797		11,146		201,225		265,285
Depreciation and amortization		155,609		204,144		95,512		-		455,265
General and administrative		-		-		-		85,606		85,606
Transaction costs		4,143		7,180		2,042		-		13,365
Loss (gain) on extinguishment of debt, net		97		(88)		-		-		9
Impairment of assets		14,314		-		-		-		14,314
Other expenses		-		-		-		3,161		3,161
Income (loss) from continuing operations before income taxes and income from unconsolidated entities		432,197		151,697		83,818		(289,480)		378,232
Income tax expense		(528)		4,789		(476)		(1,546)		2,239
(Loss) income from unconsolidated entities		6,100		(11,822)		(56)		-		(5,778)
Income (loss) from continuing operations		437,769		144,664		83,286		(291,026)		374,693
Gain (loss) on real estate dispositions, net		1,530		-		-		-		1,530
Net income (loss)	$	439,299	$	144,664	$	83,286	$	(291,026)	$	376,223

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 the periods presented (dollars in thousands):

		Three Months Ended						Six Months Ended
		June 30, 2017			June 30, 2016			June 30, 2017			June 30, 2016
Revenues:		Amount	%		Amount	%		Amount	%		Amount	%
United States	$	851,943	80.5%	$	862,115	80.1%	$	1,710,611	80.7%	$	1,704,470	80.3%
United Kingdom		99,747	9.4%		102,593	9.5%		193,590	9.1%		203,148	9.5%
Canada		106,912	10.1%		111,949	10.4%		216,699	10.2%		216,087	10.2%
Total	$	1,058,602	100.0%	$	1,076,657	100.0%	$	2,120,900	100.0%	$	2,123,705	100.0%
		As of
		June 30, 2017			December 31, 2016
Assets:		Amount	%		Amount	%
United States	$	22,323,973	79.8%	$	23,572,459	81.7%
United Kingdom		3,064,196	11.0%		2,782,489	9.6%
Canada		2,587,617	9.2%		2,510,236	8.7%
Total	$	27,975,786	100.0%	$	28,865,184	100.0%