Segment Information

6 Months Ended

Jun. 30, 2012

Segment Information [Abstract]

Segment Information

15. Segment Information

Operating segments are defined as components of an enterprise that engage in business activities from which it may earn revenues and incur expenses; for which separate financial information is available; and whose operating results are regularly reviewed by the chief operating decision maker to assess the performance of the individual segment and make decisions about resources to be allocated to the segment.

During the second quarter of 2012, the Company changed the composition of its operating segments from four reportable segments to six reportable segments.  This change was made to align operating segments with the basis that the chief operating decision maker uses to review financial information to make operating decisions, assess

performance, develop strategy and allocate capital resources.  All prior period disclosures below have been recast to present results on a comparable basis.

Retirement Centers.  The Company's Retirement Centers segment includes owned or leased communities that are primarily designed for middle to upper income senior citizens age 75 and older who desire an upscale residential environment providing the highest quality of service.  The majority of the Company's retirement center communities consist of both independent living and assisted living units in a single community, which allows residents to "age-in-place" by providing them with a continuum of senior independent and assisted living services.

Assisted Living.  The Company's Assisted Living segment includes owned or leased communities that offer housing and 24-hour assistance with activities of daily life to mid-acuity frail and elderly residents.  Assisted living communities include both freestanding, multi-story communities and freestanding single story communities.  The Company also operates memory care communities, which are freestanding assisted living communities specially designed for residents with Alzheimer's disease and other dementias.

CCRCs - Rental.  The Company's CCRCs - Rental segment includes large owned or leased communities that offer a variety of living arrangements and services to accommodate all levels of physical ability and health.  Most of the Company's CCRCs have independent living, assisted living and skilled nursing available on one campus or within the immediate market, and some also include memory care/Alzheimer's units.

CCRCs - Entry Fee.  The communities in the Company's CCRCs - Entry Fee segment are similar to those in the Company's CCRCs - Rental segment but allow for residents in the independent living apartment units to pay a one-time upfront entrance fee, which is partially refundable in certain circumstances.  The amount of the entrance fee varies depending upon the type and size of the dwelling unit, the type of contract plan selected, whether the contract contains a lifecare benefit for the resident, the amount and timing of refund, and other variables.  In addition to the initial entrance fee, residents under all entrance fee agreements also pay a monthly service fee, which entitles them to the use of certain amenities and services.  Since entrance fees are received upon initial occupancy, the monthly fees are generally less than fees at a comparable rental community.

ISC.  The Company's ISC segment includes the outpatient therapy, home health and hospice services provided to residents of many of the Company's communities, to other senior living communities that the Company does not own or operate and to seniors living outside of the Company's communities.  The ISC segment does not include the therapy services provided in the Company's skilled nursing units, which are included in the Company's CCRCs - Rental and CCRCs - Entry Fee segments.

Management Services.  The Company's management services segment includes communities operated by the Company pursuant to management agreements.  In some of the cases, the controlling financial interest in the community is held by third parties and, in other cases, the community is owned in a joint venture structure in which the Company has an ownership interest.  Under the management agreements for these communities, the Company receives management fees as well as reimbursed expenses, which represent the reimbursement of certain expenses it incurs on behalf of the owners.

The accounting policies of the Company's reportable segments are the same as those described in the summary of significant accounting policies.

The following table sets forth certain segment financial and operating data (dollars in thousands):

	Three Months Ended June 30,				Six Months Ended June 30,
	2012		2011		2012			2011
Revenue(1)
Retirement Centers	$	125,813	$	115,916	$	250,325		$	231,445
Assisted Living		252,399		237,665		503,751			478,893
CCRCs - Rental		95,258		88,618		190,370			178,816
CCRCs - Entry Fee		71,195		71,390		143,251			142,233
ISC		57,722		50,334		111,576			100,571
Management Services(2)		88,423		19,376		174,582			38,261
	$	690,810	$	583,299	$	1,373,855		$	1,170,219
Segment operating income(3)
Retirement Centers	$	52,675	$	48,924	$	103,666		$	97,501
Assisted Living		90,166		86,047		180,729			171,722
CCRCs - Rental		26,764		29,755		54,783			59,704
CCRCs - Entry Fee		15,854		17,987		32,996			35,778
ISC		13,413		14,968		24,815			30,057
Management Services		7,499		1,505		14,943			2,910
	$	206,371	$	199,186	$	411,932		$	397,672
General and administrative (including non-cash stock-based compensation expense)		46,071		33,681		91,044			67,224
Facility lease expense		70,628		66,065		142,073			132,380
Depreciation and amortization		63,561		70,577		126,905			142,359
Asset impairment		7,246		-		8,329			14,846
Loss on acquisition		-		-		636			-
Gain on facility lease termination		-		-		(2,780	)		-
Income from operations	$	18,865	$	28,863	$	45,725		$	40,863

	As of
	June 30, 2012		December 31, 2011
Total assets
Retirement Centers	$	1,175,952	$	1,047,388
Assisted Living		1,429,114		1,451,612
CCRCs - Rental		545,166		546,867
CCRCs - Entry Fee		973,143		994,064
ISC		96,021		78,137
Corporate and Management Services		358,925		347,993
Total assets	$	4,578,321	$	4,466,061

(1) All revenue is earned from external third parties in the United States.

(2) Management services segment revenue includes reimbursements for which the Company is the primary obligor of costs incurred on behalf of managed communities.

(3) Segment operating income is defined as segment revenues less segment operating expenses (excluding depreciation and amortization).