20. Segment Information

As of December, 31, 2014 the Company has five reportable segments: Retirement Centers; Assisted Living; CCRCs – Rental; Brookdale Ancillary Services; and Management Services. Operating segments are defined as components of an enterprise that engage in business activities from which it may earn revenues and incur expenses; for which separate financial information is available; and whose operating results are regularly reviewed by the chief operating decision maker to assess the performance of the individual segment and make decisions about resources to be allocated to the segment.

Prior to August 29, 2014, the Company had an additional reportable segment, CCRCs - Entry Fee. On August 29, 2014, the Company contributed all but two of its entry fee CCRCs to the CCRC Venture, at which time the contributed CCRCs were deconsolidated. The results of the entry fee CCRCs contributed to the CCRC Venture are reported in the CCRCs - Entry Fee segment for the time periods prior to being contributed to the CCRC Venture. The results of the two CCRCs that were not contributed to the CCRC Venture are included in the CCRCs - Entry Fee segment for the six month period ended June 30, 2014 and the CCRCs - Rental segment for the six month period ended December 31, 2014, based on how operating results are being reviewed by the chief operating decision maker following the creation of the CCRC Venture. The CCRC Venture is accounted for under the equity method of accounting. See Note 4 for more information about the Company's entry into the CCRC Venture.

During 2014, two communities were moved from the Retirement Centers segment to the Assisted Living segment and one community was moved from the Retirement Centers segment to the CCRCs – Rental segment to more accurately reflect the underlying product offering of the communities. The movement did not change the Company's reportable segments, but it did impact the revenues and expenses reported within the Retirement Centers, Assisted Living and CCRCs - Rental segments. Revenue and expenses for the year ended December 31, 2013 have not been recast.

Retirement Centers. The Company's Retirement Centers segment includes owned or leased communities that are primarily designed for middle to upper income seniors generally age 75 and older who desire an upscale residential environment providing the highest quality of service. The majority of the Company's retirement center communities consist of both independent living and assisted living units in a single community, which allows residents to "age-in-place" by providing them with a continuum of senior independent and assisted living services.

Assisted Living. The Company's Assisted Living segment includes owned or leased communities that offer housing and 24-hour assistance with activities of daily life to mid-acuity frail and elderly residents. Assisted living communities include both freestanding, multi-story communities and freestanding single story communities. The Company also operates memory care communities, which are freestanding assisted living communities specially designed for residents with Alzheimer's disease and other dementias.

CCRCs - Rental. The Company's CCRCs - Rental segment includes large owned or leased communities that offer a variety of living arrangements and services to accommodate all levels of physical ability and health. Most of the Company's CCRCs have independent living, assisted living and skilled nursing available on one campus or within the immediate market, and some also include memory care/Alzheimer's units. As of December 31, 2014, the CCRCs - Rental segment also includes three entry fee CCRCs.

CCRCs - Entry Fee. Prior to August 29, 2014, the Company had an additional reportable segment, CCRCs - Entry Fee. The communities in the Company's former CCRCs - Entry Fee segment are similar to rental CCRCs but allow for residents in the independent living apartment units to pay a one-time upfront entrance fee, which is partially refundable in certain circumstances. The amount of the entrance fee varies depending upon the type and size of the dwelling unit, the type of contract plan selected, whether the contract contains a lifecare benefit for the resident, the amount and timing of refund, and other variables. In addition to the initial entrance fee, residents under all entrance fee agreements also pay a monthly service fee, which entitles them to the use of certain amenities and services. Since entrance fees are received upon initial occupancy, the monthly fees are generally less than fees at a comparable rental community.

Brookdale Ancillary Services. The Company's Brookdale Ancillary Services segment includes the outpatient therapy, home health and hospice services provided to residents of many of the Company's communities, to other senior living communities that the Company does not own or operate and to seniors living outside of the Company's communities. The Brookdale Ancillary Services segment does not include the therapy services provided in the Company's skilled nursing units, which are included in the Company's CCRCs - Rental and CCRCs - Entry Fee segments.

Management Services. The Company's Management Services segment includes communities operated by the Company pursuant to management agreements. In some of the cases, the controlling financial interest in the community is held by third parties and, in other cases, the community is owned in a venture structure in which the Company has an ownership interest. Under the management agreements for these communities, the Company receives management fees as well as reimbursed expenses, which represent the reimbursement of expenses it incurs on behalf of the owners.

The accounting policies of the Company's reportable segments are the same as those described in the summary of significant accounting policies in Note 2.

The following table sets forth selected segment financial and operating data (dollars in thousands):

	For the Years Ended December 31,
	2014		2013		2012
Revenue:
Retirement Centers⁽¹⁾	$	582,312	$	526,284	$	503,902
Assisted Living⁽¹⁾		1,685,563		1,051,868		1,013,337
CCRCs - Rental⁽¹⁾		493,173		396,975		385,479
CCRCs - Entry Fee⁽¹⁾		202,414		297,756		285,701
Brookdale Ancillary Services⁽¹⁾		337,835		242,150		224,517
Management Services⁽²⁾		530,409		376,933		355,802
	$	3,831,706	$	2,891,966	$	2,768,738
Segment Operating Income⁽³⁾:
Retirement Centers	$	248,883	$	222,282	$	205,585
Assisted Living		608,489		389,678		361,184
CCRCs - Rental		121,661		109,026		106,063
CCRCs - Entry Fee		48,433		76,393		61,405
Brookdale Ancillary Services		63,463		45,709		47,780
Management Services		42,239		31,125		30,786
		1,133,168		874,213		812,803
General and administrative (including non-cash stock-based compensation expense)		280,267		180,627		178,829
Transaction costs		66,949		3,921		—
Facility lease expense:
Retirement Centers		98,321		91,258		102,273
Assisted Living		162,575		123,980		123,128
CCRCs - Rental		51,523		48,809		47,238
CCRCs - Entry Fee		4,362		7,470		7,214
Brookdale Ancillary Services		890		—		—
Corporate and Management Services		6,159		5,212		4,172
Depreciation and amortization:
Retirement Centers		86,188		64,353		61,060
Assisted Living		317,918		85,337		81,801
CCRCs - Rental		60,175		30,957		31,205
CCRCs - Entry Fee		37,524		55,842		52,840
Brookdale Ancillary Services		4,764		3,023		2,220

Corporate and Management Services		30,466			29,245		23,155
Asset impairment		9,992			12,891		27,677
Loss on acquisition		—			—		636
Gain on facility lease termination		—			—		(11,584	)
(Loss) income from operations	$	(84,905	)	$	131,288	$	80,939

Total interest expense:
Retirement Centers	$	41,906		$	31,286	$	29,025
Assisted Living		140,001			51,410		57,634
CCRCs - Rental		28,418			17,512		17,336
CCRCs - Entry Fee		7,530			11,911		13,792
Brookdale Ancillary Services		823			—		—
Corporate and Management Services		29,510			25,280		28,996
	$	248,188		$	137,399	$	146,783

Total expenditures for property, plant and equipment, and leasehold intangibles:
Retirement Centers	$	76,285		$	63,519	$	58,876
Assisted Living		107,037			95,829		68,675
CCRCs - Rental		42,412			27,134		21,916
CCRCs - Entry Fee		36,575			43,019		24,890
Brookdale Ancillary Services		1,805			1,855		6,037
Corporate and Management Services		40,131			26,171		28,018
	$	304,245		$	257,527	$	208,412

	As of December 31,
	2014		2013
Total assets:
Retirement Centers	$	1,603,704	$	1,258,294
Assisted Living		6,513,376		1,514,385
CCRCs - Rental		1,065,116		499,873
CCRCs - Entry Fee		—		960,708
Brookdale Ancillary Services		224,229		94,986
Corporate and Management Services		1,114,938		409,511
	$	10,521,363	$	4,737,757

(1)

All revenue is earned from external third parties in the United States.

(2)

Management services segment revenue includes reimbursements for which the Company is the primary obligor of costs incurred on behalf of managed communities.

(3)

Segment operating income is defined as segment revenues less segment operating expenses (excluding depreciation and amortization).