Segment Information

6 Months Ended

Jun. 30, 2014

Segment Information [Abstract]

Segment Information

12.  Segment Information

The Company currently has six reportable segments:  retirement centers; assisted living; CCRCs – rental; CCRCs – entry fee; Brookdale Ancillary Services; 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.

During the six months ended June 30, 2014, two communities moved between segments to more accurately reflect the underlying product offering of the communities.  The movement did not change the Company's reportable segments, but it did impact the revenues and expenses reported within the Retirement Centers and Assisted Living segments.  Revenue and expenses for the three and six months ended June 30, 2013 have not been recast.

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.

Brookdale Ancillary Services. The Company's Brookdale Ancillary Services 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 Brookdale Ancillary Services 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 June 30,				Six Months Ended June 30,
	2014		2013		2014		2013
Revenue(1)
Retirement Centers	$	133,441	$	130,170	$	265,790	$	259,092
Assisted Living		277,230		260,497		554,661		521,112
CCRCs - Rental		98,212		97,562		196,156		197,889
CCRCs - Entry Fee		79,100		74,016		158,269		148,324
Brookdale Ancillary Services		65,534		58,693		128,951		118,891
Management Services(2)		94,876		95,530		191,841		183,426
	$	748,393	$	716,468	$	1,495,668	$	1,428,734
Segment operating income(3)
Retirement Centers	$	56,891	$	54,177	$	113,121	$	107,511
Assisted Living		104,246		96,181		209,238		192,466
CCRCs - Rental		25,693		25,567		52,523		54,644
CCRCs - Entry Fee		18,367		17,772		38,002		37,343
Brookdale Ancillary Services		12,905		11,214		25,658		24,314
Management Services		7,489		7,744		14,891		15,353
		225,591		212,655		453,433		431,631
General and administrative (including non-cash stock-based compensation expense)		53,816		46,035		109,325		92,646
Facility lease expense		70,030		68,777		139,899		137,796
Depreciation and amortization		71,088		67,254		141,404		131,913
Asset impairment		—		2,154		—		2,154
Income from operations	$	30,657	$	28,435	$	62,805	$	67,122

	As of
	June 30, 2014		December 31, 2013
Total assets
Retirement Centers	$	1,259,051	$	1,258,294
Assisted Living		1,533,312		1,514,385
CCRCs - Rental		497,710		499,873
CCRCs - Entry Fee		964,049		960,708
Brookdale Ancillary Services		90,096		94,986
Corporate and Management Services		406,558		409,511
Total assets	$	4,750,776	$	4,737,757

(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).