Segment Information

As of September 30, 2017, 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.

During the three months ended March 31, 2017, one community moved from the CCRCs-Rental segment to the Retirement Centers segment to more accurately reflect the underlying product offering of the community in the current period given changes to the community. The movement did not change the Company's reportable segments, but it did impact the revenues, expenses and assets reported within the two segments. Revenue and expenses for the three and nine months ended September 30, 2016 and total assets for the period ended December 31, 2016 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 and Alzheimer's units.

Brookdale Ancillary Services. The Company's Brookdale Ancillary Services segment includes outpatient therapy, home health and hospice services, as well as education and wellness programs, provided to residents of many of the Company's communities and to seniors living outside of the Company's communities. The Brookdale Ancillary Services segment does not include the inpatient therapy services provided in the Company's skilled nursing units, which are included in the Company's CCRCs-Rental segment.

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 (in thousands):



	Three Months Ended September 30,					Nine Months Ended September 30,
	2017			2016		2017			2016
Revenue
Retirement Centers ⁽¹⁾	$	161,986		$	170,706	$	496,854		$	510,122
Assisted Living ⁽¹⁾	542,227			607,345		1,680,194			1,837,632
CCRCs-Rental ⁽¹⁾	108,075			147,517		364,075			448,002
Brookdale Ancillary Services ⁽¹⁾	110,604			117,263		332,766			362,791
Management Services ⁽²⁾	255,096			203,295		707,337			609,565
	$	1,177,988		$	1,246,126	$	3,581,226		$	3,768,112
Segment Operating Income ⁽³⁾
Retirement Centers	$	65,907		$	73,112	$	207,206		$	222,315
Assisted Living	173,576			217,878		577,936			672,773
CCRCs-Rental	22,932			32,996		82,591			102,059
Brookdale Ancillary Services	9,823			14,624		38,555			48,174
Management Services	18,138			15,532		56,474			50,498
	290,376			354,142		962,762			1,095,819
General and administrative (including non-cash stock-based compensation expense)	63,779			63,425		196,429			246,741
Transaction costs	1,992			659		12,924			1,950
Facility lease expense	84,437			92,519		257,934			281,890
Depreciation and amortization	117,649			130,783		366,023			391,314
Goodwill and asset impairment	368,551			19,111		390,816			26,638
Loss on facility lease termination	4,938			—		11,306			—
Income (loss) from operations	$	(350,970	)	$	47,645	$	(272,670	)	$	147,286



	As of
	September 30, 2017		December 31, 2016
Total assets
Retirement Centers	$	1,275,250	$	1,452,546
Assisted Living	4,830,074		5,831,434
CCRCs-Rental	696,964		935,389
Brookdale Ancillary Services	261,919		280,530
Corporate and Management Services	1,027,959		717,788
Total assets	$	8,092,166	$	9,217,687


(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 facility operating expenses (excluding depreciation and amortization) and costs incurred on behalf of managed communities.