Segment Information

12 Months Ended

Dec. 31, 2018

NOTE 19—SEGMENT INFORMATION

As of December 31, 2018, we operated through three reportable business segments: triple-net leased properties, senior living operations and office operations. In 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, Sunrise and ESL, to manage those communities. In our office operations segment, we primarily acquire, own, develop, lease and manage MOBs and research 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 Annual Report on Form 10-K.

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 Year Ended December 31, 2018
	Triple-Net Leased Properties			Senior Living Operations			Office Operations		All Other			Total
	(In thousands)
Revenues:
Rental income	$	737,796		$	—		$	776,011	$	—		$	1,513,807
Resident fees and services	—			2,069,477			—		—			2,069,477
Office building and other services revenue	2,522			—			7,592		3,302			13,416
Income from loans and investments	—			—			—		124,218			124,218
Interest and other income	—			—			—		24,892			24,892
Total revenues	$	740,318		$	2,069,477		$	783,603	$	152,412		$	3,745,810

Total revenues	$	740,318		$	2,069,477		$	783,603	$	152,412		$	3,745,810
Less:
Interest and other income	—			—			—		24,892			24,892
Property-level operating expenses	—			1,446,201			243,679		—			1,689,880
Office building services costs	—			—			1,418		—			1,418
Segment NOI	740,318			623,276			538,506		127,520			2,029,620
(Loss) income from unconsolidated entities	(47,901		)	(4,465		)	477		(3,145		)	(55,034		)
Segment profit	$	692,417		$	618,811		$	538,983	$	124,375		1,974,586
Interest and other income												24,892
Interest expense												(442,497		)
Depreciation and amortization												(919,639		)
General, administrative and professional fees												(151,982		)
Loss on extinguishment of debt, net												(58,254		)
Merger-related expenses and deal costs												(30,547		)
Other												(66,768		)
Gain on real estate dispositions												46,247
Income tax benefit												39,953
Income from continuing operations												$	415,991



	For the Year Ended December 31, 2017
	Triple-Net Leased Properties		Senior Living Operations			Office Operations		All Other			Total
	(In thousands)
Revenues:
Rental income	$	840,131	$	—		$	753,467	$	—		$	1,593,598
Resident fees and services	—		1,843,232			—		—			1,843,232
Office building and other services revenue	4,580		—			7,497		1,600			13,677
Income from loans and investments	—		—			—		117,608			117,608
Interest and other income	—		—			—		6,034			6,034
Total revenues	$	844,711	$	1,843,232		$	760,964	$	125,242		$	3,574,149

Total revenues	$	844,711	$	1,843,232		$	760,964	$	125,242		$	3,574,149
Less:
Interest and other income	—		—			—		6,034			6,034
Property-level operating expenses	—		1,250,065			233,007		—			1,483,072
Office building services costs	—		—			3,391		—			3,391
Segment NOI	844,711		593,167			524,566		119,208			2,081,652
Income (loss) from unconsolidated entities	845		(61		)	503		(1,848		)	(561		)
Segment profit	$	845,556	$	593,106		$	525,069	$	117,360		2,081,091
Interest and other income											6,034
Interest expense											(448,196		)
Depreciation and amortization											(887,948		)
General, administrative and professional fees											(135,490		)
Loss on extinguishment of debt, net											(754		)
Merger-related expenses and deal costs											(10,535		)
Other											(20,052		)
Gain on real estate dispositions											717,273
Income tax benefit											59,799
Income from continuing operations											$	1,361,222



	For the Year Ended December 31, 2016
	Triple-Net Leased Properties		Senior Living Operations		Office Operations		All Other		Total
	(In thousands)
Revenues:
Rental income	$	845,834	$	—	$	630,342	$	—	$	1,476,176
Resident fees and services	—		1,847,306		—		—		1,847,306
Office building and other services revenue	4,921		—		13,029		3,120		21,070
Income from loans and investments	—		—		—		98,094		98,094
Interest and other income	—		—		—		876		876
Total revenues	$	850,755	$	1,847,306	$	643,371	$	102,090	$	3,443,522

Total revenues	$	850,755	$	1,847,306	$	643,371	$	102,090	$	3,443,522
Less:
Interest and other income	—		—		—		876		876
Property-level operating expenses	—		1,242,978		191,784		—		1,434,762
Office building services costs	—		—		7,311		—		7,311
Segment NOI	850,755		604,328		444,276		101,214		2,000,573
Income from unconsolidated entities	2,363		1,265		590		140		4,358
Segment profit	$	853,118	$	605,593	$	444,866	$	101,354	2,004,931
Interest and other income									876
Interest expense									(419,740		)
Depreciation and amortization									(898,924		)
General, administrative and professional fees									(126,875		)
Loss on extinguishment of debt, net									(2,779		)
Merger-related expenses and deal costs									(24,635		)
Other									(9,988		)
Gain on real estate dispositions									98,203
Income tax benefit									31,343
Income from continuing operations									$	652,412

Assets by reportable business segment are as follows:



	As of December 31,
	2018				2017
	(Dollars in thousands)
Assets:
Triple-net leased properties	$	6,795,142	30.1	%	$	7,778,064	32.4	%
Senior living operations	8,156,187		36.1		7,654,609		32.0
Office operations	6,772,957		30.0		6,897,696		28.8
All other assets	860,269		3.8		1,624,172		6.8
Total assets	$	22,584,555	100.0	%	$	23,954,541	100.0	%

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



	For the Years Ended December 31,
	2018		2017		2016
	(In thousands)
Capital expenditures:
Triple-net leased properties	$	58,744	$	254,542	$	74,192
Senior living operations	337,750		261,900		105,614
Office operations	332,147		579,885		1,487,787
Total capital expenditures	$	728,641	$	1,096,327	$	1,667,593

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 Years Ended December 31,
	2018		2017		2016
	(In thousands)
Revenues:
United States	$	3,524,875	$	3,361,682	$	3,242,353
Canada	192,350		186,049		174,831
United Kingdom	28,585		26,418		26,338
Total revenues	$	3,745,810	$	3,574,149	$	3,443,522



	As of December 31,
	2018		2017
	(In thousands)
Net real estate property:
United States	$	18,861,163	$	19,253,724
Canada	963,588		1,070,903
United Kingdom	268,906		297,827
Total net real estate property	$	20,093,657	$	20,622,454