Segment Information

12 Months Ended

Dec. 31, 2014

Segment Reporting [Abstract]

Segment Information

Segment Information

As of December 31, 2014, 2013 and 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 invest in seniors housing and healthcare properties throughout the United States and the United Kingdom 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. In 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. In our MOB operations segment, we primarily acquire, own, develop, lease, and manage MOBs throughout the United States. 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 investments, and miscellaneous accounts receivable.

We evaluate performance of the combined properties in each reportable business segment based on segment profit, which we define as NOI adjusted for income/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 consider segment profit useful 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. In order to facilitate a clear understanding of our historical 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, 2014:

	Triple-Net Leased Properties		Senior Living Operations			MOB Operations		All Other			Total
	(In thousands)
Revenues:
Rental income	$	970,377	$	—		$	463,618	$	—		$	1,433,995
Resident fees and services	—		1,552,951			—		—			1,552,951
Medical office building and other services revenue	4,565		—			22,529		2,270			29,364
Income from loans and investments	—		—			—		55,169			55,169
Interest and other income	—		—			—		4,267			4,267
Total revenues	$	974,942	$	1,552,951		$	486,147	$	61,706		$	3,075,746
Total revenues	$	974,942	$	1,552,951		$	486,147	$	61,706		$	3,075,746
Less:
Interest and other income	—		—			—		4,267			4,267
Property-level operating expenses	—		1,036,556			158,542		—			1,195,098
Medical office building services costs	—		—			17,092		—			17,092
Segment NOI	974,942		516,395			310,513		57,439			1,859,289
Income (loss) from unconsolidated entities	859		(658		)	398		(738		)	(139		)
Segment profit	$	975,801	$	515,737		$	310,911	$	56,701		1,859,150
Interest and other income											4,267
Interest expense											(376,842		)
Depreciation and amortization											(826,911		)
General, administrative and professional fees											(121,746		)
Loss on extinguishment of debt, net											(5,564		)
Merger-related expenses and deal costs											(45,051		)
Other											(38,925		)
Income tax benefit											8,732
Discontinued operations											2,106
Gain on real estate dispositions											17,970
Net income											$	477,186

For the year ended December 31, 2013:

	Triple-Net Leased Properties		Senior Living Operations			MOB Operations		All Other			Total
	(In thousands)
Revenues:
Rental income	$	877,276	$	—		$	450,107	$	—		$	1,327,383
Resident fees and services	—		1,406,005			—		—			1,406,005
Medical office building and other services revenue	4,469		—			12,077		1,263			17,809
Income from loans and investments	—		—			—		58,208			58,208
Interest and other income	—		—			—		2,047			2,047
Total revenues	$	881,745	$	1,406,005		$	462,184	$	61,518		$	2,811,452
Total revenues	$	881,745	$	1,406,005		$	462,184	$	61,518		$	2,811,452
Less:
Interest and other income	—		—			—		2,047			2,047
Property-level operating expenses	—		956,684			152,948		—			1,109,632
Medical office building services costs	—		—			8,315		—			8,315
Segment NOI	881,745		449,321			300,921		59,471			1,691,458
Income (loss) from unconsolidated entities	475		(1,980		)	1,451		(454		)	(508		)
Segment profit	$	882,220	$	447,341		$	302,372	$	59,017		1,690,950
Interest and other income											2,047
Interest expense											(334,909		)
Depreciation and amortization											(722,075		)
General, administrative and professional fees											(115,106		)
Loss on extinguishment of debt, net											(1,201		)
Merger-related expenses and deal costs											(21,634		)
Other											(18,732		)
Income tax benefit											11,828
Discontinued operations											(36,279		)
Net income											$	454,889

For the year ended December 31, 2012:

	Triple-Net Leased Properties		Senior Living Operations			MOB Operations		All Other		Total
	(In thousands)
Revenues:
Rental income	$	819,882	$	—		$	360,849	$	—	$	1,180,731
Resident fees and services	—		1,227,124			—		—		1,227,124
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	$	824,320	$	1,227,124		$	377,152	$	41,019	$	2,469,615
Total revenues	$	824,320	$	1,227,124		$	377,152	$	41,019	$	2,469,615
Less:
Interest and other income	—		—			—		1,106		1,106
Property-level operating expenses	—		841,022			125,400		—		966,422
Medical office building services costs	—		—			9,883		—		9,883
Segment NOI	824,320		386,102			241,869		39,913		1,492,204
Income (loss) from unconsolidated entities	1,313		(48		)	16,889		—		18,154
Segment profit	$	825,633	$	386,054		$	258,758	$	39,913	1,510,358
Interest and other income										1,106
Interest expense										(288,717		)
Depreciation and amortization										(714,967		)
General, administrative and professional fees										(98,510		)
Loss on extinguishment of debt, net										(37,640		)
Merger-related expenses and deal costs										(63,183		)
Other										(6,940		)
Income tax benefit										6,282
Discontinued operations										53,986
Net income										$	361,775

Assets by reportable business segment are as follows:

	As of December 31,
	2014				2013
	(Dollars in thousands)
Assets:
Triple-net leased properties	$	9,176,159	43.2	%	$	8,919,360	45.2	%
Senior living operations	7,421,924		35.0		6,648,754		33.7
MOB operations	3,526,217		16.6		3,701,344		18.8
All other assets	1,101,871		5.2		462,036		2.3
Total assets	$	21,226,171	100.0	%	$	19,731,494	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,
	2014		2013		2012 (1)
	(In thousands)
Capital expenditures:
Triple-net leased properties	$	647,870	$	847,945	$	139,680
Senior living operations	977,997		576,459		758,371
MOB operations	36,861		189,953		1,003,865
Total capital expenditures	$	1,662,728	$	1,614,357	$	1,901,916

(1) Includes funds held in a Code Section 1031 exchange escrow account with a qualified intermediary as follows: triple-net leased – $58.1 million; senior living – $64.7 million; and MOB – $11.2 million.

Our portfolio of properties and mortgage loan and other investments are located in the United States, Canada and the United Kingdom. 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,
	2014		2013		2012
	(In thousands)
Revenues:
United States	$	2,935,524	$	2,718,234	$	2,373,646
Canada	126,435		93,218		95,969
United Kingdom	13,787		—		—
Total revenues	$	3,075,746	$	2,811,452	$	2,469,615

	As of December 31,
	2014		2013
	(In thousands)
Net real estate property:
United States	$	17,547,255	$	17,705,962
Canada	1,269,710		369,624
United Kingdom	168,594		—
Total net real estate property	$	18,985,559	$	18,075,586