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Segment Disclosures (Tables) | 12 Months Ended
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Dec. 31, 2014
Concentration of risk |
Information of revenue of reportable segment | Summary information for the reportable segments follows (in thousands): For the year ended December 31, 2014:
|  |  |  |  | Resident |  |  |  |  | Investment |  |  |  |  |  |  |  |  |  |
|  | Rental |  | Fees and |  | Interest |  | Management |  | Total |  |  |  |  | Adjusted |
Segments |  | Revenues(1) |  | Services |  | Income |  | Fee Income |  | Revenues |  | NOI(2) |  | (Cash) NOI(2) |
Senior housing |  | $ | 621,114 |  | $ | 241,965 |  | $ | 14,249 |  | $ | — |  | $ | 877,328 |  | $ | 695,672 |  | $ | 617,475 |
Post-acute/skilled nursing |  |  | 555,322 |  |  | — |  |  | 60,242 |  |  | — |  |  | 615,564 |  |  | 553,235 |  |  | 484,094 |
Life science |  |  | 314,114 |  |  | — |  |  | — |  |  | 4 |  |  | 314,118 |  |  | 251,034 |  |  | 240,959 |
Medical office |  |  | 370,956 |  |  | — |  |  | — |  |  | 1,805 |  |  | 372,761 |  |  | 222,757 |  |  | 221,351 |
Hospital |  |  | 86,508 |  |  | — |  |  | — |  |  | — |  |  | 86,508 |  |  | 82,678 |  |  | 83,121 |
Total |  | $ | 1,948,014 |  | $ | 241,965 |  | $ | 74,491 |  | $ | 1,809 |  | $ | 2,266,279 |  | $ | 1,805,376 |  | $ | 1,647,000 |
For the year ended December 31, 2013:
|  |  |  |  | Resident |  |  |  |  | Investment |  |  |  |  |  |  |  |  |  |
|  | Rental |  | Fees and |  | Interest |  | Management |  | Total |  |  |  |  | Adjusted |
Segments |  | Revenues(1) |  | Services |  | Income |  | Fee Income |  | Revenues |  | NOI(2) |  | (Cash) NOI(2) |
Senior housing |  | $ | 602,506 |  | $ | 146,288 |  | $ | 11,621 |  | $ | — |  | $ | 760,415 |  | $ | 653,191 |  | $ | 594,492 |
Post-acute/skilled nursing |  |  | 541,805 |  |  | — |  |  | 73,595 |  |  | — |  |  | 615,400 |  |  | 539,320 |  |  | 467,508 |
Life science |  |  | 296,879 |  |  | — |  |  | — |  |  | 4 |  |  | 296,883 |  |  | 239,923 |  |  | 228,475 |
Medical office |  |  | 352,334 |  |  | — |  |  | — |  |  | 1,843 |  |  | 354,177 |  |  | 212,958 |  |  | 210,811 |
Hospital |  |  | 72,060 |  |  | — |  |  | 943 |  |  | — |  |  | 73,003 |  |  | 68,198 |  |  | 79,752 |
Total |  | $ | 1,865,584 |  | $ | 146,288 |  | $ | 86,159 |  | $ | 1,847 |  | $ | 2,099,878 |  | $ | 1,713,590 |  | $ | 1,581,038 |
For the year ended December 31, 2012:
|  |  |  |  | Resident |  |  |  |  | Investment |  |  |  |  |  |  |  |  |  |
|  | Rental |  | Fees and |  | Interest |  | Management |  | Total |  |  |  |  | Adjusted |
Segments |  | Revenues(1) |  | Services |  | Income |  | Fee Income |  | Revenues |  | NOI(2) |  | (Cash) NOI(2) |
Senior housing |  | $ | 481,559 |  | $ | 139,073 |  | $ | 3,503 |  | $ | — |  | $ | 624,135 |  | $ | 529,209 |  | $ | 478,671 |
Post-acute/skilled nursing |  |  | 530,037 |  |  | — |  |  | 19,993 |  |  | — |  |  | 550,030 |  |  | 529,562 |  |  | 453,456 |
Life science |  |  | 289,664 |  |  | — |  |  | — |  |  | 4 |  |  | 289,668 |  |  | 236,491 |  |  | 226,997 |
Medical office |  |  | 333,008 |  |  | — |  |  | — |  |  | 1,891 |  |  | 334,899 |  |  | 200,876 |  |  | 195,761 |
Hospital |  |  | 80,198 |  |  | — |  |  | 1,040 |  |  | — |  |  | 81,238 |  |  | 76,685 |  |  | 75,104 |
Total |  | $ | 1,714,466 |  | $ | 139,073 |  | $ | 24,536 |  | $ | 1,895 |  | $ | 1,879,970 |  | $ | 1,572,823 |  | $ | 1,429,989 |
| (1) |  | Represents rental and related revenues, tenant recoveries, and income from DFLs.
| (2) |  | NOI and Adjusted NOI are non-GAAP supplemental financial measures used to evaluate the operating performance of real estate. The Company defines NOI as rental and related revenues, including tenant recoveries, resident fees and services, and income from DFLs, less property level operating expense; NOI excludes all other financial statement amounts included in net income as presented below. The Company believes NOI provides relevant and useful information because it reflects only income and operating expense items that are incurred at the property level and presents them on an unleveraged basis. Adjusted NOI is calculated as NOI after eliminating the effects of straight-line rents, DFL accretion, amortization of market lease intangibles and lease termination fees. Adjusted NOI is oftentimes referred to as “cash NOI.” The Company uses NOI and adjusted NOI to make decisions about resource allocations and to assess and compare property level performance. The Company believes that net income is the most directly comparable GAAP measure to NOI. NOI should not be viewed as an alternative measure of operating performance to net income as defined by GAAP because it does not reflect various excluded items. Further, the Company’s definition of NOI may not be comparable to the definition used by other REITs or real estate companies, as those companies may use different methodologies for calculating NOI.
Reconciliation of reported net income to NOI and adjusted NOI | The following is a reconciliation from reported net income to NOI and adjusted (cash) NOI (in thousands):
|  | Year ended December 31, |
|  | 2014 |  | 2013 |  | 2012 |
Net income |  | $ | 936,591 |  | $ | 985,006 |  | $ | 846,842 |
Interest income |  |  | (74,491) |  |  | (86,159) |  |  | (24,536) |
Investment management fee income |  |  | (1,809) |  |  | (1,847) |  |  | (1,895) |
Interest expense |  |  | 439,742 |  |  | 435,252 |  |  | 416,172 |
Depreciation and amortization |  |  | 459,995 |  |  | 423,312 |  |  | 353,704 |
Acquisition and pursuit costs |  |  | 17,142 |  |  | 6,191 |  |  | 10,981 |
General and administrative |  |  | 82,175 |  |  | 103,042 |  |  | 68,414 |
Impairments |  |  | — |  |  | — |  |  | 7,878 |
Gains on sales of real estate, net of income taxes |  |  | (3,288) |  |  | — |  |  | — |
Other income, net |  |  | (7,528) |  |  | (18,216) |  |  | (2,976) |
Income taxes |  |  | 250 |  |  | 5,815 |  |  | (1,654) |
Equity income from unconsolidated joint ventures |  |  | (49,570) |  |  | (64,433) |  |  | (54,455) |
Impairments of investments in unconsolidated joint ventures |  |  | 35,913 |  |  | — |  |  | — |
Total discontinued operations |  |  | (29,746) |  |  | (74,373) |  |  | (45,652) |
NOI |  |  | 1,805,376 |  |  | 1,713,590 |  |  | 1,572,823 |
Straight-line rents |  |  | (41,032) |  |  | (39,587) |  |  | (47,311) |
DFL accretion |  |  | (77,568) |  |  | (86,055) |  |  | (94,240) |
Amortization of market lease intangibles, net |  |  | (949) |  |  | (6,646) |  |  | (2,232) |
Lease termination fees |  |  | (38,816) |  |  | (217) |  |  | (636) |
NOI adjustments related to discontinued operations |  |  | (11) |  |  | (47) |  |  | 1,585 |
Adjusted (Cash) NOI |  | $ | 1,647,000 |  | $ | 1,581,038 |  | $ | 1,429,989 |
Reconciliation of company's assets to total assets | The Company’s total assets by segment were (in thousands):
|  | December 31, |
Segments |  | 2014 |  | 2013 |
Senior housing |  | $ | 8,383,345 |  | $ | 7,803,085 |
Post-acute/skilled nursing |  |  | 6,875,122 |  |  | 6,266,938 |
Life science |  |  | 4,154,789 |  |  | 3,986,187 |
Medical office |  |  | 2,988,888 |  |  | 2,686,069 |
Hospital |  |  | 640,253 |  |  | 639,357 |
Gross segment assets |  |  | 23,042,397 |  |  | 21,381,636 |
Accumulated depreciation and amortization |  |  | (2,600,072) |  |  | (2,257,188) |
Net segment assets |  |  | 20,442,325 |  |  | 19,124,448 |
Assets held for sale, net |  |  | — |  |  | 9,819 |
Other nonsegment assets |  |  | 927,615 |  |  | 941,603 |
Total assets |  | $ | 21,369,940 |  | $ | 20,075,870 |
Tenants and Operators |
Concentration of risk |
Schedule of concentration of credit risk |
|  | Percentage of Total |  | Percentage of |
|  | Company Gross Assets |  | Total Company Revenues |
|  | December 31, |  | Year Ended December 31, |
Operators |  | 2014 |  | 2013 |  | 2014 |  | 2013 |  | 2012 |
HCRMC |  | 31 |  | 32 |  | 26 |  | 28 |  | 30 |
Brookdale (1) |  | 13 |  | 19 |  | 14 |  | 17 |  | 12 |
| (1) |  | On July 31, 2014, Brookdale completed its acquisition of Emeritus. These percentages of segment gross assets, total gross assets, segment revenues and total revenues, for all periods presented are prepared on a pro forma basis to reflect the combined concentration for Brookdale and Emeritus, as if the merger had occurred as of the beginning of the periods presented. On August 29, 2014, the Company and Brookdale amended or terminated all former leases with Emeritus and entered into two RIDEA joint ventures (see Note 3). Percentages do not include senior housing facilities that Brookdale manages (is not a tenant) under a RIDEA structure.
Tenants and Operators | Senior housing |
Concentration of risk |
Schedule of concentration of credit risk |
|  | Percentage of |  | Percentage of |
|  | Senior Housing Gross Assets |  | Senior Housing Revenues |
|  | December 31, |  | Year Ended December 31, |
Operators |  | 2014 |  | 2013 |  | 2014 |  | 2013 |  | 2012 |
Brookdale(1) |  | 36 |  | 48 |  | 37 |  | 46 |  | 37 |
HCRMC |  | 11 |  | 11 |  | 8 |  | 10 |  | 11 |
| (1) |  | On July 31, 2014, Brookdale completed its acquisition of Emeritus. These percentages of segment gross assets, total gross assets, segment revenues and total revenues, for all periods presented are prepared on a pro forma basis to reflect the combined concentration for Brookdale and Emeritus, as if the merger had occurred as of the beginning of the periods presented. On August 29, 2014, the Company and Brookdale amended or terminated all former leases with Emeritus and entered into two RIDEA joint ventures (see Note 3). Percentages do not include senior housing facilities that Brookdale manages (is not a tenant) under a RIDEA structure.
Tenants and Operators | Post-acute/skilled |
Concentration of risk |
Schedule of concentration of credit risk |
|  | Percentage of Post-Acute/ |  | Percentage of Post-Acute/ |
|  | Skilled Nursing Gross Assets |  | Skilled Nursing Revenues |
|  | December 31, |  | Year Ended December 31, |
Operators |  | 2014 |  | 2013 |  | 2014 |  | 2013 |  | 2012 |
HCRMC |  | 82 |  | 89 |  | 85 |  | 83 |  | 91 |

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