Segment Reporting

9 Months Ended

Sep. 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 September 30, 2016:		Triple-net		Seniors Housing Operating		Outpatient Medical		Non-segment / Corporate		Total
Rental income	$	286,226	$	-	$	134,926	$	-	$	421,152
Resident fees and services		-		630,017		-		-		630,017
Interest income		23,017		1,054		1,009		-		25,080
Other income		1,621		716		358		189		2,884
Total revenues		310,864		631,787		136,293		189		1,079,133
Property operating expenses		-		432,292		41,388		-		473,680
Net operating income from continuing operations		310,864		199,495		94,905		189		605,453
Interest expense		985		39,927		3,986		84,801		129,699
Loss (gain) on derivatives, net		-		-		-		(2,516)		(2,516)
Depreciation and amortization		74,296		97,210		46,555		-		218,061
General and administrative		-		-		-		36,828		36,828
Transaction costs		1,613		18,083		146		-		19,842
Impairment of assets		5,070		-		4,635		-		9,705
Income (loss) from continuing operations before income taxes and income from unconsolidated entities		228,900		44,275		39,583		(118,924)		193,834
Income tax expense		(896)		515		417		269		305
(Loss) income from unconsolidated entities		1,998		(3,891)		144		-		(1,749)
Income (loss) from continuing operations		230,002		40,899		40,144		(118,655)		192,390
Gain (loss) on real estate dispositions, net		163,579		-		(1,228)		-		162,351
Net income (loss)	$	393,581	$	40,899	$	38,916	$	(118,655)	$	354,741
Total assets	$	11,988,519	$	12,580,092	$	4,899,012	$	388,716	$	29,856,339

Three Months Ended September 30, 2015:		Triple-net		Seniors Housing Operating		Outpatient Medical		Non-segment / Corporate		Total
Rental income	$	277,614	$	-	$	131,676	$	-	$	409,290
Resident fees and services		-		545,255		-		-		545,255
Interest income		19,454		1,054		1,872		-		22,380
Other income		969		772		309		22		2,072
Total revenues		298,037		547,081		133,857		22		978,997
Property operating expenses		-		368,050		40,653		-		408,703
Net operating income from continuing operations		298,037		179,031		93,204		22		570,294
Interest expense		11,347		30,990		6,811		71,982		121,130
Depreciation and amortization		72,589		87,306		45,904		-		205,799
General and administrative		-		-		-		36,950		36,950
Transaction costs		1,865		7,630		(162)		-		9,333
Loss (gain) on extinguishment of debt, net		(139)		-		-		723		584
Income (loss) from continuing operations before income taxes and income from unconsolidated entities		212,375		53,105		40,651		(109,633)		196,498
Income tax expense		87		3,237		154		(134)		3,344
(Loss) income from unconsolidated entities		2,851		(5,629)		147		-		(2,631)
Income (loss) from continuing operations		215,313		50,713		40,952		(109,767)		197,211
Gain (loss) on real estate dispositions, net		2,155		-		(109)		-		2,046
Net income (loss)	$	217,468	$	50,713	$	40,843	$	(109,767)	$	199,257

Nine Months Ended September 30, 2016:		Triple-net		Seniors Housing Operating		Outpatient Medical		Non-segment / Corporate		Total
Rental income	$	857,184	$	-	$	402,258	$	-	$	1,259,442
Resident fees and services		-		1,847,386		-		-		1,847,386
Interest income		67,842		3,126		3,307		-		74,275
Other income		4,317		11,889		4,824		705		21,735
Total revenues		929,343		1,862,401		410,389		705		3,202,838
Property operating expenses		-		1,259,182		122,966		-		1,382,148
Net operating income from continuing operations		929,343		603,219		287,423		705		1,820,690
Interest expense		8,608		123,445		15,132		247,800		394,985
Loss (gain) on derivatives, net		-		-		-		(2,516)		(2,516)
Depreciation and amortization		229,906		301,354		142,066		-		673,326
General and administrative		-		-		-		122,434		122,434
Transaction costs		5,760		25,259		2,188		-		33,207
Loss (gain) on extinguishment of debt, net		97		(88)		-		-		9
Impairment of assets		19,384		-		4,635		-		24,019
Other expenses		-		-		-		3,161		3,161
Income (loss) from continuing operations before income taxes and income from unconsolidated entities		665,588		153,249		123,402		(370,174)		572,065
Income tax expense		(1,425)		5,304		(59)		(1,277)		2,543
(Loss) income from unconsolidated entities		8,097		(15,713)		88		-		(7,528)
Income (loss) from continuing operations		672,260		142,840		123,431		(371,451)		567,080
Gain (loss) on real estate dispositions, net		165,109		-		(1,228)		-		163,881
Net income (loss)	$	837,369	$	142,840	$	122,203	$	(371,451)	$	730,961

Nine Months Ended September 30, 2015:		Triple-net		Seniors Housing Operating		Outpatient Medical		Non-segment / Corporate		Total
Rental income	$	812,179	$	-	$	373,323	$	-	$	1,185,502
Resident fees and services		-		1,573,318		-		-		1,573,318
Interest income		52,343		3,126		4,481		-		59,950
Other income		5,823		5,001		665		83		11,572
Total revenues		870,345		1,581,445		378,469		83		2,830,342
Property operating expenses		-		1,067,127		116,392		-		1,183,519
Net operating income from continuing operations		870,345		514,318		262,077		83		1,646,823
Interest expense		21,083		104,283		21,192		214,513		361,071
Loss (gain) on derivatives, net		(58,427)		-		-		-		(58,427)
Depreciation and amortization		212,537		252,785		138,109		-		603,431
General and administrative		-		-		-		110,562		110,562
Transaction costs		45,615		23,610		1,154		-		70,379
Loss (gain) on extinguishment of debt, net		10,096		-		-		24,776		34,872
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		637,221		133,640		101,622		(360,351)		512,132
Income tax expense		(2,617)		(745)		460		(867)		(3,769)
(Loss) income from unconsolidated entities		5,697		(26,785)		2,857		-		(18,231)
Income (loss) from continuing operations		640,301		106,110		104,939		(361,218)		490,132
Gain (loss) on real estate dispositions, net		56,251		-		192,751		-		249,002
Net income (loss)	$	696,552	$	106,110	$	297,690	$	(361,218)	$	739,134

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						Nine Months Ended
		September 30, 2016			September 30, 2015			September 30, 2016			September 30, 2015
Revenues:		Amount	%		Amount	%		Amount	%		Amount	%
United States	$	874,050	81.0%	$	793,429	81.0%	$	2,581,533	80.7%	$	2,309,596	81.6%
United Kingdom		95,068	8.8%		106,372	10.9%		295,203	9.1%		301,718	10.7%
Canada		110,015	10.2%		79,196	8.1%		326,102	10.2%		219,028	7.7%
Total	$	1,079,133	100.0%	$	978,997	100.0%	$	3,202,838	100.0%	$	2,830,342	100.0%
		As of
		September 30, 2016			December 31, 2015
Assets:		Amount	%		Amount	%
United States	$	24,600,436	82.4%	$	25,995,793	89.6%
United Kingdom		2,715,817	9.1%		1,741,973	6.0%
Canada		2,540,086	8.5%		1,286,079	4.4%
Total	$	29,856,339	100.0%	$	29,023,845	100.0%