Segment Reporting

3 Months Ended

Mar. 31, 2017

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 December 31, 2016, 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 are typically leased to multiple tenants and generally require a certain level of property management.

We evaluate performance based upon net operating income from continuing operations (“NOICO”) of each segment. We define NOICO as total revenues, including tenant reimbursements, less property operating expenses. We believe NOICO provides investors relevant and useful information as it measures the operating performance of our properties at the property level on an unleveraged basis. We use NOICO 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 NOICO.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, 2016). 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) is as follows(in thousands):

Three Months Ended March 31, 2017:		Triple-net		Seniors Housing Operating		Outpatient Medical		Non-segment / Corporate		Total
Rental income	$	227,290	$	-	$	139,851	$	-	$	367,141
Resident fees and services		-		670,337		-		-		670,337
Interest income		20,679		69		-		-		20,748
Other income		1,766		1,461		612		233		4,072
Total revenues		249,735		671,867		140,463		233		1,062,298
Property operating expenses		-		462,425		47,744		-		510,169
Net operating income from continuing operations		249,735		209,442		92,719		233		552,129
Interest expense		5,511		15,816		2,291		94,979		118,597
Loss (gain) on derivatives, net		1,224		-		-		-		1,224
Depreciation and amortization		59,608		119,737		48,931		-		228,276
General and administrative		-		-		-		31,101		31,101
Loss (gain) on extinguishment of debt, net		29,084		890		1,382		-		31,356
Impairment of assets		-		5,406		5,625		-		11,031
Other expenses		5,010		1,778		360		4,527		11,675
Income (loss) from continuing operations before income taxes and income from unconsolidated entities		149,298		65,815		34,130		(130,374)		118,869
Income tax (expense) benefit		(800)		(1,087)		(335)		(23)		(2,245)
Income (loss) from unconsolidated entities		5,638		(29,191)(1)		447		-		(23,106)
Income (loss) from continuing operations		154,136		35,537		34,242		(130,397)		93,518
Gain (loss) on real estate dispositions, net		231,081		13,011		-		-		244,092
Net income (loss)	$	385,217	$	48,548	$	34,242	$	(130,397)	$	337,610
Total assets	$	9,906,585	$	12,646,321	$	4,947,544	$	266,827	$	27,767,277
(1) Primarily due to the recognition of goodwill and intangible asset impairments, as well as non-recurring income tax expense.

Three Months Ended March 31, 2016:		Triple-net		Seniors Housing Operating		Outpatient Medical		Non-segment / Corporate		Total
Rental income	$	283,825	$	-	$	131,838	$	-	$	415,663
Resident fees and services		-		602,149		-		-		602,149
Interest income		22,853		1,031		1,304		-		25,188
Other income		1,490		2,189		313		58		4,050
Total revenues		308,168		605,369		133,455		58		1,047,050
Property operating expenses		-		408,894		40,742		-		449,636
Net operating income from continuing operations		308,168		196,475		92,713		58		597,414
Interest expense		6,364		20,523		5,744		100,329		132,960
Depreciation and amortization		79,800		101,832		47,064		-		228,696
General and administrative		-		-		-		45,691		45,691
Transaction costs		2,852		3,933		1,423		-		8,208
Loss (gain) on extinguishment of debt, net		(24)		-		-		-		(24)
Impairment of assets		14,314		-		-		-		14,314
Income (loss) from continuing operations before income taxes and income from unconsolidated entities		204,862		70,187		38,482		(145,962)		167,569
Income tax (expense) benefit		(317)		2,767		(228)		(497)		1,725
Income (loss) from unconsolidated entities		3,081		(6,935)		34		-		(3,820)
Income (loss) from continuing operations		207,626		66,019		38,288		(146,459)		165,474
Net income (loss)	$	207,626	$	66,019	$	38,288	$	(146,459)	$	165,474

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):

		Three Months Ended
		March 31, 2017			March 31, 2016
Revenues:		Amount	%		Amount	%
United States	$	858,668	80.9%	$	842,357	80.5%
United Kingdom		93,843	8.8%		100,555	9.6%
Canada		109,787	10.3%		104,138	9.9%
Total	$	1,062,298	100.0%	$	1,047,050	100.0%
		As of
		March 31, 2017			December 31, 2016
Assets:		Amount	%		Amount	%
United States	$	22,425,964	80.8%	$	23,572,459	81.7%
United Kingdom		2,835,782	10.2%		2,782,489	9.6%
Canada		2,505,531	9.0%		2,510,236	8.7%
Total	$	27,767,277	100.0%	$	28,865,184	100.0%