SEGMENT INFORMATION

6 Months Ended

Jun. 30, 2018

NOTE 15—SEGMENT INFORMATION

As of June 30, 2018, we operated through three reportable business segments: triple-net leased properties, senior living operations and office operations. Under our triple-net leased properties segment, we invest in and own seniors housing and healthcare properties throughout the United States and the United Kingdom and lease those properties to healthcare operating companies under “triple-net” or “absolute-net” leases that obligate the tenants to pay all property-related expenses. In our senior living operations segment, we invest in seniors housing communities throughout the United States and Canada and engage independent operators, such as Atria and Sunrise, to manage those communities. In our office operations segment, we primarily acquire, own, develop, lease and manage MOBs and life science and innovation centers throughout the United States. Information provided for “all other” includes income from loans and investments and other miscellaneous income and various corporate-level expenses not directly attributable to any of our three reportable business segments. Assets included in “all other” consist primarily of corporate assets, including cash, restricted cash, loans receivable and investments, and miscellaneous accounts receivable.

Our chief operating decision makers evaluate performance of the combined properties in each reportable business segment and determine how to allocate resources to those segments, in significant part, based on segment NOI and related measures. We define segment NOI as total revenues, less interest and other income, property-level operating expenses and office building services costs. We consider segment NOI useful 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 between periods on a consistent basis. In order to facilitate a clear understanding of our historical consolidated operating results, segment NOI should be examined in conjunction with income from continuing operations as presented in our Consolidated Financial Statements and other financial data included elsewhere in this Quarterly Report on Form 10-Q.

Interest expense, depreciation and amortization, general, administrative and professional fees, income tax expense and other non-property specific revenues and expenses are not allocated to individual reportable business 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 Three Months Ended June 30, 2018
	Triple-Net Leased Properties			Senior Living Operations			Office Operations		All Other			Total
	(In thousands)
Revenues:
Rental income	$	167,870		$	—		$	192,392	$	—		$	360,262
Resident fees and services	—			518,989			—		—			518,989
Office building and other services revenue	1,177			—			1,977		1,135			4,289
Income from loans and investments	—			—			—		56,417			56,417
Interest and other income	—			—			—		2,347			2,347
Total revenues	$	169,047		$	518,989		$	194,369	$	59,899		$	942,304

Total revenues	$	169,047		$	518,989		$	194,369	$	59,899		$	942,304
Less:
Interest and other income	—			—			—		2,347			2,347
Property-level operating expenses	—			361,112			60,301		—			421,413
Office building services costs	—			—			534		—			534
Segment NOI	169,047			157,877			133,534		57,552			518,010
(Loss) income from unconsolidated entities	(4,694		)	(1,714		)	885		(848		)	(6,371		)
Segment profit	$	164,353		$	156,163		$	134,419	$	56,704		511,639
Interest and other income												2,347
Interest expense												(113,029		)
Depreciation and amortization												(223,634		)
General, administrative and professional fees												(36,656		)
Gain on extinguishment of debt, net												93
Merger-related expenses and deal costs												(4,494		)
Other												(3,527		)
Income tax benefit												734
Income from continuing operations												$	133,473



	For the Three Months Ended June 30, 2017
	Triple-Net Leased Properties		Senior Living Operations			Office Operations		All Other			Total
	(In thousands)
Revenues:
Rental income	$	213,258	$	—		$	186,240	$	—		$	399,498
Resident fees and services	—		460,243			—		—			460,243
Office building and other services revenue	1,125		—			1,848		206			3,179
Income from loans and investments	—		—			—		32,368			32,368
Interest and other income	—		—			—		202			202
Total revenues	$	214,383	$	460,243		$	188,088	$	32,776		$	895,490

Total revenues	$	214,383	$	460,243		$	188,088	$	32,776		$	895,490
Less:
Interest and other income	—		—			—		202			202
Property-level operating expenses	—		308,625			57,205		—			365,830
Office building services costs	—		—			552		—			552
Segment NOI	214,383		151,618			130,331		32,574			528,906
Income (loss) from unconsolidated entities	377		(381		)	298		(400		)	(106		)
Segment profit	$	214,760	$	151,237		$	130,629	$	32,174		528,800
Interest and other income											202
Interest expense											(113,572		)
Depreciation and amortization											(224,108		)
General, administrative and professional fees											(33,282		)
Loss on extinguishment of debt, net											(36		)
Merger-related expenses and deal costs											(6,043		)
Other											(1,848		)
Income tax benefit											2,159
Income from continuing operations											$	152,272



	For the Six Months Ended June 30, 2018
	Triple-Net Leased Properties			Senior Living Operations			Office Operations		All Other			Total
	(In thousands)
Revenues:
Rental income	$	358,511		$	—		$	386,560	$	—		$	745,071
Resident fees and services	—			1,033,742			—		—			1,033,742
Office building and other services revenue	2,320			—			3,610		1,687			7,617
Income from loans and investments	—			—			—		87,598			87,598
Interest and other income	—			—			—		11,981			11,981
Total revenues	$	360,831		$	1,033,742		$	390,170	$	101,266		$	1,886,009

Total revenues	$	360,831		$	1,033,742		$	390,170	$	101,266		$	1,886,009
Less:
Interest and other income	—			—			—		11,981			11,981
Property-level operating expenses	—			713,332			120,994		—			834,326
Office building services costs	—			—			649		—			649
Segment NOI	360,831			320,410			268,527		89,285			1,039,053
(Loss) income from unconsolidated entities	(43,349		)	(2,354		)	265		(1,672		)	(47,110		)
Segment profit	$	317,482		$	318,056		$	268,792	$	87,613		991,943
Interest and other income												11,981
Interest expense												(224,392		)
Depreciation and amortization												(456,784		)
General, administrative and professional fees												(73,830		)
Loss on extinguishment of debt, net												(10,884		)
Merger-related expenses and deal costs												(21,830		)
Other												(6,647		)
Income tax benefit												3,976
Income from continuing operations												$	213,533



	For the Six Months Ended June 30, 2017
	Triple-Net Leased Properties		Senior Living Operations			Office Operations		All Other			Total
	(In thousands)
Revenues:
Rental income	$	422,585	$	—		$	372,135	$	—		$	794,720
Resident fees and services	—		924,431			—		—			924,431
Office building and other services revenue	2,330		—			3,779		476			6,585
Income from loans and investments	—		—			—		52,514			52,514
Interest and other income	—		—			—		683			683
Total revenues	$	424,915	$	924,431		$	375,914	$	53,673		$	1,778,933

Total revenues	$	424,915	$	924,431		$	375,914	$	53,673		$	1,778,933
Less:
Interest and other income	—		—			—		683			683
Property-level operating expenses	—		620,698			114,119		—			734,817
Office building services costs	—		—			1,290		—			1,290
Segment NOI	424,915		303,733			260,505		52,990			1,042,143
Income (loss) from unconsolidated entities	3,646		(457		)	633		(778		)	3,044
Segment profit	$	428,561	$	303,276		$	261,138	$	52,212		1,045,187
Interest and other income											683
Interest expense											(222,376		)
Depreciation and amortization											(441,891		)
General, administrative and professional fees											(67,243		)
Loss on extinguishment of debt, net											(345		)
Merger-related expenses and deal costs											(8,099		)
Other											(3,036		)
Income tax benefit											5,304
Income from continuing operations											$	308,184

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



	For the Three Months Ended June 30,				For the Six Months Ended June 30,
	2018		2017		2018		2017
	(In thousands)
Capital expenditures:
Triple-net leased properties	$	15,340	$	48,143	$	21,008	$	141,952
Senior living operations	24,177		30,056		54,754		51,381
Office operations	64,495		51,390		134,206		245,386
Total capital expenditures	$	104,012	$	129,589	$	209,968	$	438,719

Our portfolio of properties and mortgage loan and other investments are located in the United States, Canada and the United Kingdom. Revenues are attributed to an individual country based on the location of each property. Geographic information regarding our operations is as follows:



	For the Three Months Ended June 30,				For the Six Months Ended June 30,
	2018		2017		2018		2017
	(In thousands)
Revenues:
United States	$	887,265	$	844,623	$	1,774,975	$	1,677,443
Canada	47,750		44,412		96,321		89,008
United Kingdom	7,289		6,455		14,713		12,482
Total revenues	$	942,304	$	895,490	$	1,886,009	$	1,778,933



	As of June 30, 2018		As of December 31, 2017
	(In thousands)
Net real estate property:
United States	$	18,837,522	$	19,253,724
Canada	1,013,440		1,070,903
United Kingdom	284,708		297,827
Total net real estate property	$	20,135,670	$	20,622,454