Segment Information

9 Months Ended

Sep. 30, 2013

Segment Information [Abstract]

Segment Information

13.  Segment Information

The Company currently has six reportable segments:  retirement centers; assisted living; CCRCs – rental; CCRCs – entry fee; ISC; and management services.  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.

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 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 September 30,				Nine Months Ended September 30,
	2013		2012		2013		2012
Revenue(1)
Retirement Centers	$	133,272	$	126,401	$	392,364	$	376,726
Assisted Living		262,524		254,179		783,636		757,930
CCRCs - Rental		100,076		96,681		297,965		287,051
CCRCs - Entry Fee		74,110		71,413		222,434		213,990
ISC		61,162		56,856		180,053		168,432
Management Services(2)		97,855		90,615		281,281		265,197
	$	728,999	$	696,145	$	2,157,733	$	2,069,326
Segmentoperating income(3)
Retirement Centers	$	56,820	$	50,722	$	164,331	$	154,388
Assisted Living		96,750		91,162		289,216		271,891
CCRCs - Rental		27,013		25,100		81,657		79,883
CCRCs - Entry Fee		18,218		15,164		55,561		47,486
ISC		11,764		11,915		36,078		36,730
Management Services		7,622		7,407		22,975		22,350
		218,187		201,470		649,818		612,728
Generaland administrative (including non-cash stock-based compensation expense)		45,824		43,158		138,470		134,202
Facility lease expense		69,232		71,167		207,028		213,240
Depreciation and amortization		68,644		62,876		200,557		189,781
Asset impairment		504		—		2,658		8,329
Loss on acquisition		—		—		—		636
Gain on facility lease termination		—		—		—		(2,780	)
Income from operations	$	33,983	$	24,269	$	101,105	$	69,320

	As of
	September 30, 2013		December 31, 2012
Total assets
Retirement Centers	$	1,245,316	$	1,256,497
Assisted Living		1,426,868		1,438,934
CCRCs - Rental		524,875		534,220
CCRCs - Entry Fee		951,475		951,584
ISC		95,906		90,357
Corporate and Management Services		399,791		394,386
Total assets	$	4,644,231	$	4,665,978

(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).