Segment Information

As of June 30, 2017, 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.

During the three months ended March 31, 2017, one community moved from the CCRCs-Rental segment to the Retirement Centers segment to more accurately reflect the underlying product offering of the community in the current period given changes to the community. The movement did not change the Company's reportable segments, but it did impact the revenues, expenses and assets reported within the two segments. Revenue and expenses for the three and six months ended June 30, 2016 and total assets for the period ended December 31, 2016 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 and Alzheimer's units.

Brookdale Ancillary Services. The Company's Brookdale Ancillary Services segment includes outpatient therapy, home health and hospice services, as well as education and wellness programs, provided to residents of many of the Company's communities and to seniors living outside of the Company's communities. The Brookdale Ancillary Services segment does not include the inpatient therapy services provided in the Company's skilled nursing units, which are included in the Company's CCRCs-Rental segment.

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 selected segment financial and operating data (in thousands):



	Three Months Ended June 30,				Six Months Ended June 30,
	2017		2016		2017		2016
Revenue
Retirement Centers ⁽¹⁾	$	162,248	$	169,990	$	334,868	$	339,416
Assisted Living ⁽¹⁾	547,430		613,017		1,137,967		1,230,287
CCRCs-Rental ⁽¹⁾	114,202		148,225		256,000		300,485
Brookdale Ancillary Services ⁽¹⁾	110,190		123,336		222,162		245,528
Management Services ⁽²⁾	252,402		204,262		452,241		406,270
	$	1,186,472	$	1,258,830	$	2,403,238	$	2,521,986
Segment Operating Income ⁽³⁾
Retirement Centers	$	67,297	$	74,754	$	141,299	$	149,203
Assisted Living	186,921		234,085		404,360		454,895
CCRCs-Rental	24,344		33,594		59,659		69,063
Brookdale Ancillary Services	13,103		19,032		28,732		33,550
Management Services	22,442		18,186		38,336		34,966
	314,107		379,651		672,386		741,677
General and administrative (including non-cash stock-based compensation expense)	67,090		90,695		132,650		183,316
Transaction costs	3,339		441		10,932		1,291
Facility lease expense	84,690		92,682		173,497		189,371
Depreciation and amortization	120,887		133,394		248,374		260,531
Asset impairment	1,559		4,152		22,265		7,527
Loss on facility lease termination	6,368		—		6,368		—
Income from operations	$	30,174	$	58,287	$	78,300	$	99,641



	As of
	June 30, 2017		December 31, 2016
Total assets
Retirement Centers	$	1,286,639	$	1,452,546
Assisted Living	5,210,068		5,831,434
CCRCs-Rental	721,810		935,389
Brookdale Ancillary Services	279,415		280,530
Corporate and Management Services	694,860		717,788
Total assets	$	8,192,792	$	9,217,687


(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 facility operating expenses (excluding depreciation and amortization).