Segment Reporting

9 Months Ended

Sep. 30, 2011

Segment Reporting [Abstract]

Segment Reporting

17. Segment Reporting

During the nine months ended September 30, 2011, we changed the name of our seniors housing and care segment to seniors housing triple-net. Additionally, we added a new seniors housing operating segment. There was no activity related to this segment prior to September 1, 2010. We invest in seniors housing and health care real estate. We evaluate our business and make resource allocations on our three business segments: seniors housing triple-net, seniors housing operating and medical facilities. Our seniors housing triple-net properties include skilled nursing/post-acute facilities, assisted living facilities, independent living/continuing care retirement communities 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 assisted living facilities and independent living/continuing care retirement communities that are owned and/or operated through RIDEA partnership structures. Our primary medical facility properties include medical office buildings, hospitals and life science buildings. Our medical office buildings are typically leased to multiple tenants and generally require a certain level of property management. Our hospital investments are structured similar to our seniors housing triple-net investments. Our life science investments represent investments in an unconsolidated joint venture (see Note 7 for additional information). The accounting policies of the segments are the same as those described in the summary of significant accounting policies (see Note 1 to the financial statements included in our Annual Report on Form 10-K for the year ended December 31, 2010). There are no intersegment sales or transfers. We evaluate performance based upon net operating income of the combined properties in each segment. 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 net operating income.

Summary information for the reportable segments during the three and nine months ended September 30, 2011 and 2010 is as follows (in thousands and includes amounts from discontinued operations):

	Rental Income		Resident Fees and Services		Interest Income		Other Income		Total Revenues		Property Operating Expenses		Net Operating Income(1)		Real Estate Depreciation/ Amortization		Interest Expense		Total Assets
Three Months Ended September 30, 2011
Seniors housing triple-net	$	169,668	$	—	$	6,810	$	454	$	176,932	$	—	$	176,932	$	48,690	$	4,110	$	7,696,298
Seniors housing operating		—		125,125		—		—		125,125		86,218		38,907		39,019		13,945		2,240,665
Medical facilities(2)		80,413		—		1,048		1,048		82,509		17,849		64,660		27,931		8,356		3,657,811
Non-segment/Corporate		—		—		—		307		307		—		307		—		61,400		266,315
	$	250,081	$	125,125	$	7,858	$	1,809	$	384,873	$	104,067	$	280,806	$	115,640	$	87,811	$	13,861,089
Three Months Ended September 30, 2010
Seniors housing triple-net	$	97,658	$	—	$	9,179	$	698	$	107,535	$	—	$	107,535	$	27,495	$	4,271
Seniors housing operating		—		12,809		—		—		12,809		7,993		4,816		4,879		3,236
Medical facilities(2)		57,071		—		875		227		58,173		13,829		44,344		20,019		6,506
Non-segment/Corporate		—		—		—		231		231		—		231		—		30,972
	$	154,729	$	12,809	$	10,054	$	1,156	$	178,748	$	21,822	$	156,926	$	52,393	$	44,985

	Rental Income		Resident Fees and Services		Interest Income		Other Income		Total Revenues		Property Operating Expenses		Net Operating Income(1)		Real Estate Depreciation/ Amortization		Interest Expense
Nine Months Ended September 30, 2011
Seniors housing triple-net	$	444,656	$	—	$	27,224	$	5,458	$	477,338	$	—	$	477,338	$	127,088	$	9,812
Seniors housing operating		—		319,559		—		—		319,559		219,824		99,735		97,326		33,446
Medical facilities(2)		221,676		—		5,209		3,879		230,764		50,584		180,180		77,047		23,321
Non-segment/Corporate		—		—		—		637		637		—		637		—		165,335
	$	666,332	$	319,559	$	32,433	$	9,974	$	1,028,298	$	270,408	$	757,890	$	301,461	$	231,914
Nine Months Ended September 30, 2010
Seniors housing triple-net	$	288,148	$	—	$	26,583	$	2,726	$	317,457	$	—	$	317,457	$	82,448	$	13,964
Seniors housing operating		—		12,809		—		—		12,809		7,993		4,816		4,879		3,236
Medical facilities		162,481		—		1,854		800		165,135		40,552		124,583		56,097		18,560
Non-segment/Corporate		—		—		—		1,276		1,276		—		1,276		—		76,760
	$	450,629	$	12,809	$	28,437	$	4,802	$	496,677	$	48,545	$	448,132	$	143,424	$	112,520

(1) Net operating income (“NOI”) is used to evaluate the operating performance of our properties. We define NOI as total revenues, including tenant reimbursements, less property level operating expenses, which exclude depreciation and amortization, general and administrative expenses, impairments and interest expense. 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.

(2) Excludes income and expense amounts related to properties held in unconsolidated joint ventures. Please see Note 7 for additional information.