Segment Reporting

12 Months Ended

Dec. 31, 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 year ended December 31, 2016, we reclassified four properties previously classified in the triple-net segment to the outpatient medical segment. In addition, we reclassified interest expense on our foreign-denominated senior notes from the seniors housing operating segment to non-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 year ended December 31, 2015, we disposed of our life science investments.

We evaluate performance based upon NOI of each segment. We define NOI as total revenues, including tenant reimbursements, less property 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 certain 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). 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 (which excludes unconsolidated entities) during the years ended December 31, 2016, 2015 and 2014 is as follows (in thousands):

Year Ended December 31, 2016:		Triple-net		Seniors Housing Operating		Outpatient Medical		Non-segment / Corporate		Total
Rental income	$	1,112,325	$	-	$	536,490	$	-	$	1,648,815
Resident fees and services		-		2,504,731		-		-		2,504,731
Interest income		90,476		4,180		3,307		-		97,963
Other income		6,059		17,085		5,568		939		29,651
Total revenues		1,208,860		2,525,996		545,365		939		4,281,160
Property operating expenses		-		1,711,882		165,101		-		1,876,983
Net operating income from continuing operations		1,208,860		814,114		380,264		939		2,404,177
Interest expense		21,370		81,853		19,087		399,035		521,345
Loss (gain) on derivatives, net		68		-		-		(2,516)		(2,448)
Depreciation and amortization		297,197		415,429		188,616		-		901,242
General and administrative		-		-		-		155,241		155,241
Transaction costs		10,016		29,207		3,687		-		42,910
Loss (gain) on extinguishment of debt, net		863		(88)		-		16,439		17,214
Provision for loan losses		6,935		-		3,280		-		10,215
Impairment of assets		20,169		12,403		4,635		-		37,207
Other expenses		-		-		-		11,998		11,998
Income (loss) from continuing operations before income taxes and income (loss) from unconsolidated entities		852,242		275,310		160,959		(579,258)		709,253
Income tax expense		(1,087)		(3,762)		(511)		24,488		19,128
(Loss) income from unconsolidated entities		9,767		(20,442)		318		-		(10,357)
Income (loss) from continuing operations		860,922		251,106		160,766		(554,770)		718,024
Gain (loss) on real estate dispositions, net		355,394		9,880		(1,228)		-		364,046
Net income (loss)	$	1,216,316	$	260,986	$	159,538	$	(554,770)	$	1,082,070
Total assets	$	10,713,032	$	12,851,414	$	4,951,538	$	349,200	$	28,865,184

Year Ended December 31, 2015:		Triple-net		Seniors Housing Operating		Outpatient Medical		Non-segment / Corporate		Total
Rental income	$	1,094,827	$	-	$	504,121	$	-	$	1,598,948
Resident fees and services		-		2,158,031		-		-		2,158,031
Interest income		74,108		4,180		5,853		-		84,141
Other income		6,871		6,060		4,684		1,091		18,706
Total revenues		1,175,806		2,168,271		514,658		1,091		3,859,826
Property operating expenses		-		1,467,009		155,248		-		1,622,257
Net operating income from continuing operations		1,175,806		701,262		359,410		1,091		2,237,569
Interest expense		28,384		70,388		27,542		365,855		492,169
Loss (gain) on derivatives, net		(58,427)		-		-		-		(58,427)
Depreciation and amortization		288,242		351,733		186,265		-		826,240
General and administrative		-		-		-		147,416		147,416
Transaction costs		53,195		54,966		2,765		-		110,926
Loss (gain) on extinguishment of debt, net		10,095		(195)		-		24,777		34,677
Impairment of Assets		2,220		-		-		-		2,220
Other expenses		35,648		-		-		10,583		46,231
Income (loss) from continuing operations before income taxes and income (loss) from unconsolidated entities		816,449		224,370		142,838		(547,540)		636,117
Income tax expense		(4,244)		986		245		(3,438)		(6,451)
(Loss) income from unconsolidated entities		8,260		(32,672)		2,908		-		(21,504)
Income (loss) from continuing operations		820,465		192,684		145,991		(550,978)		608,162
Gain (loss) on real estate dispositions, net		86,261		-		194,126		-		280,387
Net income (loss)	$	906,726	$	192,684	$	340,117	$	(550,978)	$	888,549
Total assets	$	12,358,605	$	11,519,902	$	5,060,676	$	84,662	$	29,023,845

Year Ended December 31, 2014:		Triple-net		Seniors Housing Operating		Outpatient Medical		Non-segment / Corporate		Total
Rental income	$	992,638	$	-	$	413,129	$	-	$	1,405,767
Resident fees and services		-		1,892,237		-		-		1,892,237
Interest income		32,255		2,119		3,293		-		37,667
Other income		2,973		3,215		1,010		677		7,875
Total revenues		1,027,866		1,897,571		417,432		677		3,343,546
Property operating expenses		732		1,266,308		136,318		-		1,403,358
Net operating income from continuing operations		1,027,134		631,263		281,114		677		1,940,188
Interest expense		32,135		64,130		31,050		353,724		481,039
Loss (gain) on derivatives, net		(1,770)		275		-		-		(1,495)
Depreciation and amortization		273,296		418,199		152,635		-		844,130
General and administrative		-		-		-		142,943		142,943
Transaction costs		45,146		16,880		7,512		-		69,538
Loss (gain) on extinguishment of debt, net		98		383		405		8,672		9,558
Other expenses		8,825		1,437		-		-		10,262
Income (loss) from continuing operations before income taxes and income (loss) from unconsolidated entities		669,404		129,959		89,512		(504,662)		384,213
Income tax expense		6,141		(3,047)		(1,827)		-		1,267
(Loss) income from unconsolidated entities		5,423		(38,204)		5,355		-		(27,426)
Income from continuing operations		680,968		88,708		93,040		(504,662)		358,054
Income (loss) from discontinued operations		7,135		-		-		-		7,135
Gain (loss) on real estate dispositions, net		146,205		-		906		-		147,111
Net income (loss)	$	834,308	$	88,708	$	93,946	$	(504,662)	$	512,300

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 the periods presented (dollars in thousands):

		Year Ended
		December 31, 2016			December 31, 2015			December 31, 2014
Revenues:		Amount	%		Amount	%		Amount	%
United States	$	3,453,485	80.6%	$	3,133,327	81.2%	$	2,801,474	83.8%
United Kingdom		388,383	9.1%		407,745	10.6%		305,275	9.1%
Canada		439,292	10.3%		318,754	8.3%		236,797	7.1%
Total	$	4,281,160	100.0%	$	3,859,826	100.0%	$	3,343,546	100.0%
		As of
		December 31, 2016			December 31, 2015
Assets:		Amount	%		Amount	%
United States	$	23,572,459	81.7%	$	23,513,498	81.0%
United Kingdom		2,782,489	9.6%		2,958,509	10.2%
Canada		2,510,236	8.7%		2,551,838	8.8%
Total	$	28,865,184	100.0%	$	29,023,845	100.0%