v2.4.0.6
Segment Information
 12 Months Ended
Dec. 31, 2011
Segment Information  
Segment Information

Note 20—Segment Information

        As of December 31, 2011, we operated through three reportable business segments: triple-net leased properties, senior living operations and MOB operations. Our triple-net leased properties segment consists of acquiring and owning seniors housing and healthcare properties in the United States and leasing those properties to healthcare operating companies under "triple-net" or "absolute-net" leases, which require the tenants to pay all property-related expenses. Our senior living operations segment consists of investments in seniors housing communities located in the United States and Canada for which we engage independent third parties, such as Atria and Sunrise, to manage the operations. Our MOB operations segment primarily consists of acquiring, owning, developing, leasing and managing MOBs. Information provided for "all other" includes revenues such as income from loans and investments and other miscellaneous income and various corporate-level expenses not directly attributable to our three reportable business segments. Assets included in all other consist primarily of corporate assets, including cash, restricted cash, deferred financing costs, loans receivable and miscellaneous accounts receivable.

        With the addition of the Lillibridge businesses and properties in July 2010, we believed the segregation of our MOB operations into its own reporting segment would be useful in assessing the performance of this portion of our business in the same way that management intends to review our performance and make operating decisions. Prior to the Lillibridge acquisition, we operated through two reportable business segments: triple-net leased properties and senior living operations. Prior year amounts have been restated to reflect the segregation of our MOB operations into a reportable business segment.

        We evaluate performance of the combined properties in each reportable business segment based on segment profit, which we define as NOI adjusted for gain/loss from unconsolidated entities. We define NOI as total revenues, less interest and other income, property-level operating expenses and medical office building services costs. We believe that net income, as defined by GAAP, is the most appropriate earnings measurement. However, we believe that segment profit serves as a useful supplement to net income because it allows investors, analysts and our management to measure unlevered property-level operating results and to compare our operating results to the operating results of other real estate companies and between periods on a consistent basis. Segment profit should not be considered as an alternative to net income (determined in accordance with GAAP) as an indicator of our financial performance. In order to facilitate a clear understanding of our consolidated historical operating results, segment profit should be examined in conjunction with net income as presented in our Consolidated Financial Statements and data included elsewhere in this Annual Report on Form 10-K.

        Interest expense, depreciation and amortization, general, administrative and professional fees and non-property specific revenues and expenses are not allocated to individual segments for purposes of assessing segment performance. There are no intersegment sales or transfers.

        Summary information by reportable business segment is as follows:

        For the year ended December 31, 2011:

 
   Triple-Net
Leased
Properties 		  Senior
Living
Operations 		  MOB
Operations 		  All
Other 		  Total  
 
   (In thousands)
  

Revenues:

                                

Rental income

   $ 652,577   $ —   $ 167,003   $ —   $ 819,580  

Resident fees and services

     —     873,308     —     —     873,308  

Medical office building and other services revenue

     2,217     —     34,254     —     36,471  

Income from loans and investments

     —     —     —     34,415     34,415  

Interest and other income

     —     —     —     1,217     1,217  
                       

Total revenues

   $ 654,794   $ 873,308   $ 201,257   $ 35,632   $ 1,764,991  
                       

Total revenues

   $ 654,794   $ 873,308   $ 201,257   $ 35,632   $ 1,764,991  

Less:

                                

Interest and other income

     —     —     —     1,217     1,217  

Property-level operating expenses

     —     593,977     57,584     —     651,561  

Medical office building services costs

     —     —     27,082     —     27,082  
                       

Segment NOI

     654,794     279,331     116,591     34,415     1,085,131  

Income (loss) from unconsolidated entities

     295     —     (347 )   —     (52 )
                       

Segment profit

   $ 655,089   $ 279,331   $ 116,244   $ 34,415     1,085,079  
                         

Interest and other income

                             1,217  

Interest expense

                             (236,807 )

Depreciation and amortization

                             (456,590 )

General, administrative and professional fees

                             (74,537 )

Loss on extinguishment of debt

                             (27,604 )

Litigation proceeds, net

                             202,259  

Merger-related expenses and deal costs

                             (153,923 )

Other

                             (8,653 )

Income tax benefit

                             31,137  

Discontinued operations

                             1,683  
                               

Net income

                           $ 363,261  
                               

        For the year ended December 31, 2010:

 
   Triple-Net
Leased
Properties 		  Senior
Living
Operations 		  MOB
Operations 		  All
Other 		  Total  
 
   (In thousands)
  

Revenues:

                                

Rental income

   $ 461,709   $ —   $ 69,747   $ —   $ 531,456  

Resident fees and services

     —     446,301     —     —     446,301  

Medical office building and other services revenue

     —     —     14,098     —     14,098  

Income from loans and investments

     —     —     —     16,412     16,412  

Interest and other income

     —     —     —     484     484  
                       

Total revenues

   $ 461,709   $ 446,301   $ 83,845   $ 16,896   $ 1,008,751  
                       

Total revenues

   $ 461,709   $ 446,301   $ 83,845   $ 16,896   $ 1,008,751  

Less:

                                

Interest and other income

     —     —     —     484     484  

Property-level operating expenses

     —     291,831     24,122     —     315,953  

Medical office building services costs

     —     —     9,518     —     9,518  
                       

Segment NOI

     461,709     154,470     50,205     16,412     682,796  

Loss from unconsolidated entities

     —     —     (664 )   —     (664 )
                       

Segment profit

   $ 461,709   $ 154,470   $ 49,541   $ 16,412     682,132  
                         

Interest and other income

                             484  

Interest expense

                             (175,631 )

Depreciation and amortization

                             (203,762 )

General, administrative and professional fees

                             (49,830 )

Loss on extinguishment of debt

                             (9,791 )

Merger-related expenses and deal costs

                             (19,243 )

Other

                             (272 )

Income tax expense

                             (5,201 )

Discontinued operations

                             30,843  
                               

Net income

                           $ 249,729  
                               

        For the year ended December 31, 2009:

 
   Triple-Net
Leased
Properties 		  Senior
Living
Operations 		  MOB
Operations 		  All
Other 		  Total  
 
   (In thousands)
  

Revenues:

                                

Rental income

   $ 452,536   $ —   $ 35,922   $ —   $ 488,458  

Resident fees and services

     —     421,058     —     —     421,058  

Income from loans and investments

     —     —     —     13,107     13,107  

Interest and other income

     —     —     —     842     842  
                       

Total revenues

   $ 452,536   $ 421,058   $ 35,922   $ 13,949   $ 923,465  
                       

Total revenues

   $ 452,536   $ 421,058   $ 35,922   $ 13,949   $ 923,465  

Less:

                                

Interest and other income

     —     —     —     842     842  

Property-level operating expenses

     —     290,045     12,768     —     302,813  
                       

Segment NOI

     452,536     131,013     23,154     13,107     619,810  

Income (loss) from unconsolidated entities

    
—		    
—		    
—		    
—		    
—		  
                       

Segment profit

   $ 452,536   $ 131,013   $ 23,154   $ 13,107     619,810  
                         

Interest and other income

                             842  

Interest expense

                             (173,810 )

Depreciation and amortization

                             (197,298 )

General, administrative and professional fees

                             (38,830 )

Loss on extinguishment of debt

                             (6,080 )

Merger-related expenses and deal costs

                             (13,015 )

Other

                             (50 )

Income tax benefit

                             1,719  

Discontinued operations

                             76,072  
                               

Net income

                           $ 269,360  
                               

        Assets by reportable business segment are as follows:

 
   As of December 31,  
 
   2011   2010  
 
   (In thousands)
  

Assets:

                          

Triple-net leased properties

   $ 8,704,061     50.4 % $ 2,474,612     43.0 %

Senior living operations

     5,758,497     33.3     2,297,041     39.9  

MOB operations

     2,433,160     14.1     748,945     13.0  

All other assets

     376,192     2.2     237,423     4.1  
                   

Total assets

   $ 17,271,910     100.0 % $ 5,758,021     100.0 %
                   

        Capital expenditures, including investments in real estate property and development project expenditures, by reportable business segment are as follows:

 
   For the Year Ended December 31,  
 
   2011   2010   2009  
 
   (In thousands)
  

Capital expenditures:

                    

Triple-net leased properties(1)

   $ 133,761   $ 12,884   $ 10,867  

Senior living operations

     370,455     10,268     11,081  

MOB operations(2)

     125,453     271,144     105,880  
               

Total capital expenditures

   $ 629,669   $ 294,296   $ 127,828  
               
(1)
2009 includes $9.3 million from funds held in a Code Section 1031 exchange escrow account with a qualified intermediary.

(2)
2009 includes $55.7 million from funds held in a Code Section 1031 exchange escrow account with a qualified intermediary.

        Our portfolio of properties and mortgage loan and other investments are located in the United States and Canada. Revenues are attributed to an individual country based on the location of each property.

        Geographic information regarding our operations is as follows:

 
   For the Year Ended December 31,  
 
   2011   2010   2009  
 
   (In thousands)
  

Revenues:

                    

United States

   $ 1,672,952   $ 924,221   $ 849,737  

Canada

     92,039     84,530     73,728  
               

Total revenues

   $ 1,764,991   $ 1,008,751   $ 923,465  
               

 

 
   As of December 31,  
 
   2011   2010  
 
   (In thousands)
  

Net real estate property:

              

United States

   $ 15,510,824   $ 4,857,510  

Canada

     402,908     422,009  
           

Total net real estate property

   $ 15,913,732   $ 5,279,519