Segment Reporting

3 Months Ended

Jun. 30, 2013

Segment Reporting [Abstract]

Segment Reporting

17. Segment Reporting

We invest in seniors housing and health care real estate. We evaluate our business and make resource allocations on our five operating segments: seniors housing triple-net, seniors housing operating, medical office buildings, hospitals and life science. Our seniors housing triple-net properties include skilled nursing/post-acute facilities, assisted living facilities, independent living/continuing care retirement communities and combinations thereof. Under the seniors housing triple-net segment, we invest in seniors housing and health care real estate through acquisition and financing of primarily single tenant properties. Properties acquired are primarily leased under triple-net leases and we are not involved in the management of the property. Our seniors housing operating properties include seniors housing communities that are owned and/or operated through RIDEA structures (see Notes 3 and 18).

Our medical facility properties include medical office buildings, hospitals and life science buildings which are aggregated into our medical facilities reportable segment. Our medical office buildings are typically leased to multiple tenants and generally require a certain level of property management. Our hospital investments are leased and we are not involved in the management of the property. Our life science investment represents an investment in an unconsolidated entity (see Note 7).

The accounting policies of the segments are the same as those described in the summary of significant accounting policies (see Note 2to the financial statements included in our Annual Report on Form 10-K for the year ended December 31, 2012, as updated by our Current Report on Form 8-K filed on May 7, 2013). The results of operations for all acquisitions described in Note 3 are included in our consolidated results of operations from the acquisition dates and are components of the appropriate segments. There are no intersegment sales or transfers.

We evaluate performance based upon net operating income from continuing operations (“NOI”) of each segment. We define NOI as total revenues, including tenant reimbursements, less property level operating expenses, which exclude depreciation and amortization, general and administrative expenses, transaction costs, provision for loan losses and interest expense. We believe NOI provides investors relevant and useful information because it measures the operating performance of our properties at the property level on an unleveraged basis. We use NOI to make decisions about resource allocations and to assess the property level performance of our properties.

Non-segment revenue consists mainly of interest income on non-real estate investments and other income. Non-segment assets consist of corporate assets including cash, deferred loan expenses and corporate offices and equipment among others. Non-property specific revenues and expenses are not allocated to individual segments in determining NOI.

Summary information for the reportable segments for the three and sixmonths ended June 30, 2013 and 2012 is as follows (in thousands):

Three Months Ended June 30, 2013:		Seniors Housing Triple-net		Seniors Housing Operating		Medical Facilities		Non-segment / Corporate		Total
Rental income	$	188,941	$	-	$	113,524	$	-	$	302,465
Resident fees and services		-		370,995		-		-		370,995
Interest income		5,433		-		2,207		-		7,640
Other income		199		-		662		164		1,025
Total revenues		194,573		370,995		116,393		164		682,125
Property operating expenses		-		(248,972)		(29,615)		-		(278,587)
Net operating income from continuing operations		194,573		122,023		86,778		164		403,538
Reconciling items:
Interest expense		(3,661)		(19,412)		(10,256)		(77,300)		(110,629)
(Loss) gain on derivatives, net		-		2,716		-		-		2,716
Depreciation and amortization		(55,571)		(103,646)		(40,891)		-		(200,108)
General and administrative		-		-		-		(23,902)		(23,902)
Transaction costs		(11,211)		(16,799)		(126)		-		(28,136)
Income (loss) from continuing operations before income taxes and income from unconsolidated entities	$	124,130	$	(15,118)	$	35,505	$	(101,038)	$	43,479
Total assets	$	8,527,476	$	8,647,125	$	4,544,110	$	477,682	$	22,196,393

Three Months Ended June 30, 2012:		Seniors Housing Triple-net		Seniors Housing Operating		Medical Facilities		Non-segment / Corporate		Total
Rental income	$	168,911	$	-	$	94,793	$	-	$	263,704
Resident fees and services		-		165,654		-		-		165,654
Interest income		5,984		-		1,895		-		7,879
Other income		761		-		478		243		1,482
Total revenues		175,656		165,654		97,166		243		438,719
Property operating expenses		-		(111,340)		(24,499)		-		(135,839)
Net operating income from continuing operations		175,656		54,314		72,667		243		302,880
Reconciling items:
Interest expense		-		(16,227)		(6,596)		(68,476)		(91,299)
(Loss) gain on derivatives, net		(96)		2,772		-		-		2,676
Depreciation and amortization		(52,416)		(37,745)		(37,438)		-		(127,599)
General and administrative		-		-		-		(25,870)		(25,870)
Transaction costs		(23,683)		(2,821)		(2,187)		-		(28,691)
(Loss) gain on extinguishment of debt, net		(2,238)		1,179		483		-		(576)
Income (loss) from continuing operations before income taxes and income from unconsolidated entities	$	97,223	$	1,472	$	26,929	$	(94,103)	$	31,521

Six Months Ended June 30, 2013:		Seniors Housing Triple-net		Seniors Housing Operating		Medical Facilities		Non-segment / Corporate		Total
Rental income	$	373,703	$	-	$	225,050	$	-	$	598,753
Resident fees and services		-		698,319		-		-		698,319
Interest income		11,276		757		4,663		-		16,696
Other income		408		-		1,072		245		1,725
Total revenues		385,387		699,076		230,785		245		1,315,493
Property operating expenses		-		(473,475)		(58,466)		-		(531,941)
Net operating income from continuing operations		385,387		225,601		172,319		245		783,552
Reconciling items:
Interest expense		(9,873)		(38,482)		(19,828)		(152,402)		(220,585)
(Loss) gain on derivatives, net		-		407		-		-		407
Depreciation and amortization		(111,456)		(193,521)		(81,860)		-		(386,837)
General and administrative		-		-		-		(51,081)		(51,081)
Transaction costs		(11,705)		(82,124)		(287)		-		(94,116)
(Loss) gain on extinguishment of debt, net		-		308		-		-		308
Income (loss) from continuing operations before income taxes and income from unconsolidated entities	$	252,353	$	(87,811)	$	70,344	$	(203,238)	$	31,648

Six Months Ended June 30, 2012:		Seniors Housing Triple-net		Seniors Housing Operating		Medical Facilities		Non-segment / Corporate		Total
Rental income	$	329,810	$	-	$	182,852	$	-	$	512,662
Resident fees and services		-		323,828		-		-		323,828
Interest income		11,861		-		4,159		-		16,020
Other income		1,606		-		1,082		478		3,166
Total revenues		343,277		323,828		188,093		478		855,676
Property operating expenses		-		(218,583)		(46,058)		-		(264,641)
Net operating income from continuing operations		343,277		105,245		142,035		478		591,035
Reconciling items:
Interest expense		(252)		(32,062)		(14,871)		(132,595)		(179,780)
(Loss) gain on derivatives, net		(96)		2,217		-		-		2,121
Depreciation and amortization		(101,492)		(77,518)		(69,126)		-		(248,136)
General and administrative		-		-		-		(53,621)		(53,621)
Transaction costs		(25,205)		(4,399)		(4,666)		-		(34,270)
(Loss) gain on extinguishment of debt, net		(2,238)		1,179		483		-		(576)
Income (loss) from continuing operations before income taxes and income from unconsolidated entities	$	213,994	$	(5,338)	$	53,855	$	(185,738)	$	76,773

Our portfolio of properties and other investments are located in the United States, the United Kingdom and Canada. Revenues and assets are attributed to the country in which the property is physically located. The following is a summary of geographic information for our operations for the periods presented (dollars in thousands):

		Three Months Ended						Six Months Ended
		June 30, 2013			June 30, 2012			June 30, 2013			June 30, 2012
Revenues:		Amount	%		Amount	%		Amount	%		Amount	%
United States	$	595,101	87.2%	$	436,664	99.5%	$	1,167,925	88.8%	$	853,621	99.8%
International		87,024	12.8%		2,055	0.5%		147,568	11.2%		2,055	0.2%
Total	$	682,125	100.0%	$	438,719	100.0%	$	1,315,493	100.0%	$	855,676	100.0%
		As of
		June 30, 2013			December 31, 2012
Assets:		Amount	%		Amount	%
United States	$	19,059,156	85.9%	$	18,692,214	95.6%
International		3,137,237	14.1%		856,895	4.4%
Total	$	22,196,393	100.0%	$	19,549,109	100.0%