Segment Information

12 Months Ended

Dec. 31, 2012

Segment Reporting [Abstract]

Segment Information

Segment Information

As of December 31, 2012, we operated through three reportable business segments: triple-net leased properties; senior living operations; and MOB operations. Under our triple-net leased properties segment, we acquire and own seniors housing and healthcare properties throughout the United States and lease those properties to healthcare operating companies under “triple-net” or “absolute-net” leases that obligate the tenants to pay all property-related expenses. Under our senior living operations segment, we invest in seniors housing communities throughout the United States and Canada and engage independent operators, such as Atria and Sunrise, to manage those communities. Under our MOB operations segment, we primarily acquire, own, develop, lease, and manage MOBs. Information provided for “all other” includes income from loans and investments and other miscellaneous income and various corporate-level expenses not directly attributable to our three reportable business segments. Assets included in “all other” consist primarily of corporate assets, including cash, restricted cash, deferred financing costs, loans receivable and miscellaneous accounts receivable.

With the addition of the Lillibridge businesses and properties in July 2010, we believed that the segregation of our MOB operations into its own reporting segment would be useful in assessing the performance of our MOB business in the same way that management evaluates our performance and makes operating decisions. Prior to the Lillibridge acquisition, we operated through two reportable business segments: triple-net leased properties; and senior living operations.

We evaluate performance of the combined properties in each reportable business segment based on segment profit, which we define as NOI adjusted for gain/loss from unconsolidated entities. We define NOI as total revenues, less interest and other income, property-level operating expenses and medical office building services costs. We believe that net income, as defined by GAAP, is the most appropriate earnings measurement. However, we believe that segment profit serves as a useful supplement to net income because it allows investors, analysts and our management to measure unlevered property-level operating results and to compare our operating results to the operating results of other real estate companies and between periods on a consistent basis. Segment profit should not be considered as an alternative to net income (determined in accordance with GAAP) as an indicator of our financial performance. In order to facilitate a clear understanding of our consolidated historical operating results, segment profit should be examined in conjunction with net income as presented in our Consolidated Financial Statements and other financial data included elsewhere in this Annual Report on Form 10-K.

Interest expense, depreciation and amortization, general, administrative and professional fees, income tax expense, discontinued operations and other non-property specific revenues and expenses are not allocated to individual reportable business segments for purposes of assessing segment performance. There are no intersegment sales or transfers.

Summary information by reportable business segment is as follows:

For the year ended December 31, 2012:

	Triple-Net Leased Properties		Senior Living Operations			MOB Operations		All Other		Total
	(In thousands)
Revenues:
Rental income	$	831,221	$	—		$	362,839	$	—	$	1,194,060
Resident fees and services	—		1,229,479			—		—		1,229,479
Medical office building and other services revenue	4,438		—			16,303		—		20,741
Income from loans and investments	—		—			—		39,913		39,913
Interest and other income	—		—			—		1,106		1,106
Total revenues	$	835,659	$	1,229,479		$	379,142	$	41,019	$	2,485,299
Total revenues	$	835,659	$	1,229,479		$	379,142	$	41,019	$	2,485,299
Less:
Interest and other income	—		—			—		1,106		1,106
Property-level operating expenses	—		843,190			126,152		—		969,342
Medical office building services costs	—		—			9,883		—		9,883
Segment NOI	835,659		386,289			243,107		39,913		1,504,968
Income (loss) from unconsolidated entities	1,313		(48		)	16,889		—		18,154
Segment profit	$	836,972	$	386,241		$	259,996	$	39,913	1,523,122
Interest and other income										1,106
Interest expense										(293,401		)
Depreciation and amortization										(725,981		)
General, administrative and professional fees										(98,801		)
Loss on extinguishment of debt, net										(37,640		)
Merger-related expenses and deal costs										(63,183		)
Other										(6,956		)
Income tax benefit										6,282
Discontinued operations										57,227
Net income										$	361,775

For the year ended December 31, 2011:

	Triple-Net Leased Properties		Senior Living Operations		MOB Operations			All Other		Total
	(In thousands)
Revenues:
Rental income	$	637,294	$	—	$	166,161		$	—	$	803,455
Resident fees and services	—		868,095		—			—		868,095
Medical office building and other services revenue	2,217		—		34,254			—		36,471
Income from loans and investments	—		—		—			34,415		34,415
Interest and other income	—		—		—			1,217		1,217
Total revenues	$	639,511	$	868,095	$	200,415		$	35,632	$	1,743,653
Total revenues	$	639,511	$	868,095	$	200,415		$	35,632	$	1,743,653
Less:
Interest and other income	—		—		—			1,217		1,217
Property-level operating expenses	—		590,151		57,042			—		647,193
Medical office building services costs	—		—		27,082			—		27,082
Segment NOI	639,511		277,944		116,291			34,415		1,068,161
Income (loss) from unconsolidated entities	295		—		(347		)	—		(52		)
Segment profit	$	639,806	$	277,944	$	115,944		$	34,415	1,068,109
Interest and other income										1,217
Interest expense										(229,346		)
Depreciation and amortization										(447,664		)
General, administrative and professional fees										(74,537		)
Loss on extinguishment of debt, net										(27,604		)
Litigation proceeds, net										202,259
Merger-related expenses and deal costs										(153,923		)
Other										(7,270		)
Income tax benefit										30,660
Discontinued operations										1,360
Net income										$	363,261

For the year ended December 31, 2010:

	Triple-Net Leased Properties		Senior Living Operations		MOB Operations			All Other		Total
	(In thousands)
Revenues:
Rental income	$	453,592	$	—	$	69,747		$	—	$	523,339
Resident fees and services	—		446,301		—			—		446,301
Medical office building and other services revenue	—		—		14,098			—		14,098
Income from loans and investments	—		—		—			16,412		16,412
Interest and other income	—		—		—			484		484
Total revenues	$	453,592	$	446,301	$	83,845		$	16,896	$	1,000,634
Total revenues	$	453,592	$	446,301	$	83,845		$	16,896	$	1,000,634
Less:
Interest and other income	—		—		—			484		484
Property-level operating expenses	—		291,831		24,122			—		315,953
Medical office building services costs	—		—		9,518			—		9,518
Segment NOI	453,592		154,470		50,205			16,412		674,679
Loss from unconsolidated entities	—		—		(664		)	—		(664		)
Segment profit	$	453,592	$	154,470	$	49,541		$	16,412	674,015
Interest and other income										484
Interest expense										(172,474		)
Depreciation and amortization										(200,682		)
General, administrative and professional fees										(49,830		)
Loss on extinguishment of debt, net										(9,791		)
Merger-related expenses and deal costs										(19,243		)
Other										(272		)
Income tax expense										(5,201		)
Discontinued operations										32,723
Net income										$	249,729

Assets by reportable business segment are as follows:

	As of December 31,
	2012				2011
	(Dollars in thousands)
Assets:
Triple-net leased properties	$	8,368,186	44.1	%	$	8,704,061	50.4	%
Senior living operations	6,274,207		33.1		5,758,497		33.3
MOB operations	3,703,453		19.5		2,433,160		14.1
All other assets	634,154		3.3		376,192		2.2
Total assets	$	18,980,000	100.0	%	$	17,271,910	100.0	%

Capital expenditures, including investments in real estate property and development project expenditures, by reportable business segment are as follows:

	For the Year Ended December 31,
	2012		2011		2010
	(In thousands)
Capital expenditures:
Triple-net leased (1)	$	139,680	$	133,761	$	12,884
Senior living (2)	758,371		370,455		10,268
MOB (3)	1,003,865		125,453		271,144
Total capital expenditures	$	1,901,916	$	629,669	$	294,296

(1) 2012 includes $58.1 million from funds held in a Code Section 1031 exchange escrow account with a qualified intermediary.

(2) 2012 includes $64.7 million from funds held in a Code Section 1031 exchange escrow account with a qualified intermediary.

(3) 2012 includes $11.2 million from funds held in a Code Section 1031 exchange escrow account with a qualified intermediary.

Our portfolio of properties and mortgage loan and other investments are located in the United States and Canada. Revenues are attributed to an individual country based on the location of each property.

Geographic information regarding our operations is as follows:

	For the Year Ended December 31,
	2012		2011		2010
	(In thousands)
Revenues:
United States	$	2,389,330	$	1,651,614	$	916,104
Canada	95,969		92,039		84,530
Total revenues	$	2,485,299	$	1,743,653	$	1,000,634

	As of December 31,
	2012		2011
	(In thousands)
Net real estate property:
United States	$	16,711,508	$	15,510,824
Canada	400,024		402,908
Total net real estate property	$	17,111,532	$	15,913,732