Segment Information

6 Months Ended

Jun. 30, 2015

Segment Information [Abstract]

Segment Information

14.  Segment Information

As of June 30, 2015, the Company has five reportable segments: Retirement Centers; Assisted Living; CCRCs – Rental; 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.

Prior to August 29, 2014, the Company had an additional reportable segment, CCRCs - Entry Fee. On August 29, 2014, the Company contributed all but two of the legacy Brookdale entry fee CCRCs to the CCRC Venture, at which time the contributed CCRCs were deconsolidated.  The results of the entry fee CCRCs contributed to the CCRC Venture are reported in the CCRCs - Entry Fee segment for the time periods prior to being contributed to the CCRC Venture. The results of the two CCRCs that were not contributed to the CCRC Venture are included in the CCRCs - Entry Fee segment for the six month period ended June 30, 2014 and the CCRCs - Rental segment for the six month period ended June 30, 2015, based on how operating results are being reviewed by the chief operating decision maker following the creation of the CCRC Venture. The CCRC Venture is accounted for under the equity method of accounting.

Subsequent to June 30, 2014, one community was moved from the Retirement Centers segment to the CCRCs - Rental segment to more accurately reflect the underlying product offering of the community. The movement did not change our reportable segments, but it did impact the revenues and expenses reported within the Retirement Centers and CCRCs - Rental segments. Revenue and expenses for the three and six months ended June 30, 2014 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 seniors generally 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. As of June 30, 2015, the CCRCs - Rental segment also includes three entry fee CCRCs.

CCRCs - Entry Fee.  Prior to August 29, 2014, the Company had an additional reportable segment, CCRCs - Entry Fee. The communities in the Company's former CCRCs - Entry Fee segment are similar to rental CCRCs 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. 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.

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 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 in Note 2.

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

	Three Months Ended June 30,					Six Months Ended June 30,
	2015			2014		2015			2014
Revenue
Retirement Centers(1)	$	164,409		$	133,441	$	327,895		$	265,790
Assisted Living(1)		611,838			277,230		1,229,182			554,661
CCRCs - Rental(1)		151,561			98,212		307,552			196,156
CCRCs - Entry Fee(1)		—			79,100		—			158,269
Brookdale Ancillary Services(1)		116,170			65,534		231,581			128,951
Management Services(2)		194,206			94,876		389,855			191,841
	$	1,238,184		$	748,393	$	2,486,065		$	1,495,668
Segment operating income(3)
Retirement Centers	$	72,044		$	56,891	$	142,568		$	113,121
Assisted Living		223,359			104,246		446,865			209,238
CCRCs - Rental		35,860			25,693		74,431			52,523
CCRCs - Entry Fee		—			18,367		—			38,002
Brookdale Ancillary Services		17,724			12,905		40,466			25,658
Management Services		14,839			7,489		29,936			14,891
		363,826			225,591		734,266			453,433
General and administrative (including non-cash stock-based compensation expense)		89,545			47,008		179,075			91,673
Transaction costs		421			6,808		7,163			17,652
Facility lease expense		91,338			70,030		185,809			139,899
Depreciation and amortization		225,645			71,088		446,072			141,404
Loss on facility lease termination		—			—		76,143			—
(Loss) income from operations	$	(43,123	)	$	30,657	$	(159,996	)	$	62,805

	As of
	June 30, 2015		December 31, 2014
Total assets
Retirement Centers	$	1,595,446	$	1,603,704
Assisted Living		6,431,186		6,513,376
CCRCs - Rental		1,084,727		1,065,116
Brookdale Ancillary Services		252,270		224,229
Corporate and Management Services		989,651		1,114,938
Total assets	$	10,353,280	$	10,521,363

(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).