Segment Reporting

6 Months Ended

Jun. 30, 2016

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 three operating segments: triple-net, seniors housing operating and outpatient medical. During the three months ended March 31, 2016, we reclassified four properties previously classified in the triple-net segment to the outpatient medical segment.Accordingly, the segment information provided in this note has been reclassified to conform to the current presentation for all periods presented.

Our triple-net properties include long-term/post-acute care facilities, assisted living facilities, independent living/continuing care retirement communities, care homes (United Kingdom), independent support living facilities (Canada), care homes with nursing (United Kingdom) and combinations thereof. Under the 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 the seniors housing communities referenced above that are owned and/or operated through RIDEA structures (see Notes 3 and 18).

Our outpatient medical properties include outpatient medical buildings and, during past years, life science buildings which are aggregated into our outpatient medical reportable segment. Our outpatient medical buildings are typically leased to multiple tenants and generally require a certain level of property management. During the three months ended June 30, 2015, we disposed of our life science investments.

We evaluate performance based uponNOI by segment. We define NOI as total revenues, including tenant reimbursements, less property level operating expenses. 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.

The accounting policies of the segments are the same as those described in the summary of significant accounting policies (see Note 2 to the financial statements included in our Annual Report on Form 10-K for the year ended December 31, 2015). 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.

     Summary information for the reportable segments is as follows for the periods presented (in thousands):

Three Months Ended June 30, 2016:		Triple-net		Seniors Housing Operating		Outpatient Medical		Non-segment / Corporate		Total
Rental income	$	287,134	$	-	$	135,494	$	-	$	422,628
Resident fees and services		-		615,220		-		-		615,220
Interest income		21,971		1,042		994		-		24,007
Other income		1,206		8,989		4,153		454		14,802
Total revenues		310,311		625,251		140,641		454		1,076,657
Property operating expenses		-		417,996		40,836		-		458,832
Net operating income from continuing operations		310,311		207,255		99,805		454		617,825
Interest expense		2,019		42,689		5,402		82,216		132,326
Depreciation and amortization		75,809		102,312		48,448		-		226,569
General and administrative		-		-		-		39,914		39,914
Transaction costs		1,291		3,247		619		-		5,157
Loss (gain) on extinguishment of debt, net		121		(88)		-		-		33
Other expenses		-		-		-		3,161		3,161
Income (loss) from continuing operations before income taxes and income from unconsolidated entities		231,071		59,095		45,336		(124,837)		210,665
Income tax expense		(213)		2,023		(248)		(1,049)		513
(Loss) income from unconsolidated entities		3,018		(4,887)		(90)		-		(1,959)
Income (loss) from continuing operations		233,876		56,231		44,998		(125,886)		209,219
Gain (loss) on real estate dispositions, net		1,530		-		-		-		1,530
Net income (loss)	$	235,406	$	56,231	$	44,998	$	(125,886)	$	210,749
Total assets	$	12,201,470	$	11,626,090	$	5,020,102	$	116,839	$	28,964,501

Three Months Ended June 30, 2015:		Triple-net		Seniors Housing Operating		Outpatient Medical		Non-segment / Corporate		Total
Rental income	$	272,573	$	-	$	124,053	$	-	$	396,626
Resident fees and services		-		535,553		-		-		535,553
Interest income		18,189		1,042		1,345		-		20,576
Other income		970		3,210		195		39		4,414
Total revenues		291,732		539,805		125,593		39		957,169
Property operating expenses		-		360,569		37,785		-		398,354
Net operating income from continuing operations		291,732		179,236		87,808		39		558,815
Interest expense		1,313		38,834		6,993		71,721		118,861
Depreciation and amortization		70,525		88,844		49,433		-		208,802
General and administrative		-		-		-		38,474		38,474
Transaction costs		7,579		3,937		975		-		12,491
Loss (gain) on extinguishment of debt, net		(102)		-		-		18,989		18,887
Other expenses		-		-		-		10,583		10,583
Income (loss) from continuing operations before income taxes and income from unconsolidated entities		212,417		47,621		30,407		(139,728)		150,717
Income tax expense		(3,121)		(3,449)		(161)		(686)		(7,417)
(Loss) income from unconsolidated entities		1,453		(6,083)		1,678		-		(2,952)
Income (loss) from continuing operations		210,749		38,089		31,924		(140,414)		140,348
Gain (loss) on real estate dispositions, net		-		-		190,111		-		190,111
Net income (loss)	$	210,749	$	38,089	$	222,035	$	(140,414)	$	330,459

Six Months Ended June 30, 2016:		Triple-net		Seniors Housing Operating		Outpatient Medical		Non-segment / Corporate		Total
Rental income	$	570,958	$	-	$	267,332	$	-	$	838,290
Resident fees and services		-		1,217,369		-		-		1,217,369
Interest income		44,824		2,073		2,298		-		49,195
Other income		2,695		11,178		4,466		512		18,851
Total revenues		618,477		1,230,620		274,096		512		2,123,705
Property operating expenses		-		826,890		81,578		-		908,468
Net operating income from continuing operations		618,477		403,730		192,518		512		1,215,237
Interest expense		7,623		83,518		11,146		162,998		265,285
Loss (gain) on derivatives, net		-		-		-		-		-
Depreciation and amortization		155,609		204,144		95,512		-		455,265
General and administrative		-		-		-		85,606		85,606
Transaction costs		4,143		7,180		2,042		-		13,365
Loss (gain) on extinguishment of debt, net		97		(88)		-		-		9
Impairment of assets		14,314		-		-		-		14,314
Other expenses		-		-		-		3,161		3,161
Income (loss) from continuing operations before income taxes and income from unconsolidated entities		436,691		108,976		83,818		(251,253)		378,232
Income tax expense		(528)		4,789		(476)		(1,546)		2,239
(Loss) income from unconsolidated entities		6,100		(11,822)		(56)		-		(5,778)
Income (loss) from continuing operations		442,263		101,943		83,286		(252,799)		374,693
Gain (loss) on real estate dispositions, net		1,530		-		-		-		1,530
Net income (loss)	$	443,793	$	101,943	$	83,286	$	(252,799)	$	376,223

Six Months Ended June 30, 2015:		Triple-net		Seniors Housing Operating		Outpatient Medical		Non-segment / Corporate		Total
Rental income	$	534,565	$	-	$	241,648	$	-	$	776,213
Resident fees and services		-		1,028,063		-		-		1,028,063
Interest income		32,888		2,073		2,609		-		37,570
Other income		4,853		4,229		356		62		9,500
Total revenues		572,306		1,034,365		244,613		62		1,851,346
Property operating expenses		-		699,076		75,739		-		774,815
Net operating income from continuing operations		572,306		335,289		168,874		62		1,076,531
Interest expense		9,736		73,293		14,382		142,531		239,942
Loss (gain) on derivatives, net		(58,427)		-		-		-		(58,427)
Depreciation and amortization		139,946		165,479		92,206		-		397,631
General and administrative		-		-		-		73,612		73,612
Transaction costs		43,750		15,979		1,316		-		61,045
Loss (gain) on extinguishment of debt, net		10,235		-		-		24,053		34,288
Impairment of assets		2,220		-		-		-		2,220
Other expenses		-		-		-		10,583		10,583
Income (loss) from continuing operations before income taxes and income from unconsolidated entities		424,846		80,538		60,970		(250,717)		315,637
Income tax expense		(2,703)		(3,982)		305		(733)		(7,113)
(Loss) income from unconsolidated entities		2,846		(21,156)		2,710		-		(15,600)
Income (loss) from continuing operations		424,989		55,400		63,985		(251,450)		292,924
Gain (loss) on real estate dispositions, net		54,097		-		192,859		-		246,956
Net income (loss)	$	479,086	$	55,400	$	256,844	$	(251,450)	$	539,880

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, 2016			June 30, 2015			June 30, 2016			June 30, 2015
Revenues:		Amount	%		Amount	%		Amount	%		Amount	%
United States	$	862,115	80.1%	$	771,031	80.6%	$	1,704,470	80.3%	$	1,516,168	81.9%
United Kingdom		102,593	9.5%		103,531	10.8%		203,148	9.5%		195,345	10.6%
Canada		111,949	10.4%		82,607	8.6%		216,087	10.2%		139,833	7.6%
Total	$	1,076,657	100.0%	$	957,169	100.0%	$	2,123,705	100.0%	$	1,851,346	100.0%
		As of
		June 30, 2016			December 31, 2015
Assets:		Amount	%		Amount	%
United States	$	23,546,510	81.3%	$	25,995,793	89.6%
United Kingdom		2,789,104	9.6%		1,741,973	6.0%
Canada		2,628,887	9.1%		1,286,079	4.4%
Total	$	28,964,501	100.0%	$	29,023,845	100.0%