Segment Disclosures

12 Months Ended

Dec. 31, 2015

Segment Disclosures

Segment Disclosures

NOTE 14.    Segment Disclosures

The Company evaluates its business and makes resource allocations based on its five business segments: (i) senior housing, (ii) post-acute/skilled nursing, (iii) life science, (iv) medical office and (v) hospital. Under the medical office segment, the Company invests through the acquisition and development of MOBs, which generally require a greater level of property management. Otherwise, the Company primarily invests, through the acquisition and development of real estate, in single tenant and operator properties and debt issued by tenants and operators in these sectors. The accounting policies of the segments are the same as those described under Summary of Significant Accounting Policies (see Note 2). There were no intersegment sales or transfers during the years ended December 31, 2015, 2014 and 2013. The Company evaluates performance based upon (i) property net operating income from continuing operations (“NOI”), (ii) adjusted NOI (cash NOI), and (iii) adjusted NOI plus interest income (“Portfolio Income”) of the combined investments in each segment.

Non-segment assets consist primarily of corporate assets, including cash and cash equivalents, restricted cash, accounts receivable, net, marketable equity securities, deferred financing costs and, if any, real estate held for sale. Interest expense, depreciation and amortization, and non-property specific revenues and expenses are not allocated to individual segments in evaluating the Company’s segment-level performance. See Note 23 for other information regarding concentrations of credit risk.

Summary information for the reportable segments follows (in thousands):

For the year ended December 31, 2015:

	Senior			Post-acute/			Life		Medical
Segments	Housing			Skilled Nursing			Science		Office		Hospital		Total
Rental revenues(1)	$	519,102	(2)	$	535,111	(2)	$	342,984	$	419,225	$	88,380	$	1,904,802
Resident fees and services		525,453			—			—		—		—		525,453
Operating expenses		(374,617)			(2,002)			(70,217)		(163,550)		(3,989)		(614,375)
NOI		669,938			533,109			272,767		255,675		84,391		1,815,880
Non-cash adjustments to NOI(3)		(16,127)	(2)		(78,738)	(2)		(10,128)		(5,025)		1,060		(108,958)
Adjusted (cash) NOI		653,811			454,371			262,639		250,650		85,451		1,706,922
Interest income		28,718			83,466			—		—		—		112,184
Portfolio Income	$	682,529		$	537,837		$	262,639	$	250,650	$	85,451		1,819,106
Addback non-cash adjustments														108,958
Investment management fee income														1,873
Interest expense														(479,596)
Depreciation and amortization														(510,785)
General and administrative expenses														(96,022)
Acquisition and pursuit costs														(27,309)
Impairments														(1,403,853)
Gain on sales of real estate														6,377
Other income, net														14,404
Income tax benefit														9,011
Equity income in unconsolidated joint ventures														57,313
Impairment of investments in unconsolidated joint ventures														(45,895)
Net loss													$	(546,418)

For the year ended December 31, 2014:

	Senior		Post-acute/		Life		Medical
Segments	Housing		Skilled Nursing		Science		Office		Hospital		Total
Rental revenues(1)	$	621,114	$	555,322	$	314,114	$	370,956	$	86,508	$	1,948,014
Resident fees and services		241,965		—		—		—		—		241,965
Operating expenses		(167,407)		(2,087)		(63,080)		(148,199)		(3,830)		(384,603)
NOI		695,672		553,235		251,034		222,757		82,678		1,805,376
Non-cash adjustments to NOI(3)		(78,197)		(69,141)		(10,075)		(1,406)		443		(158,376)
Adjusted (cash) NOI		617,475		484,094		240,959		221,351		83,121		1,647,000
Interest income		14,249		60,242		—		—		—		74,491
Portfolio Income	$	631,724	$	544,336	$	240,959	$	221,351	$	83,121		1,721,491
Addback non-cash adjustments												158,376
Investment management fee income												1,809
Interest expense												(439,742)
Depreciation and amortization												(459,995)
General and administrative expenses												(82,175)
Acquisition and pursuit costs												(17,142)
Gain on sales of real estate												3,288
Other income, net												7,528
Income tax expense												(250)
Equity income in unconsolidated joint ventures												49,570
Impairment of investments in unconsolidated joint ventures												(35,913)
Total discontinued operations												29,746
Net income											$	936,591

For the year ended December 31, 2013:

	Senior		Post-acute/		Life		Medical
Segments	Housing		Skilled Nursing		Science		Office		Hospital		Total
Rental revenues(1)	$	602,506	$	541,805	$	296,879	$	352,334	$	72,060	$	1,865,584
Resident fees and services		146,288		—		—		—		—		146,288
Operating expenses		(95,603)		(2,485)		(56,956)		(139,376)		(3,862)		(298,282)
NOI		653,191		539,320		239,923		212,958		68,198		1,713,590
Non-cash adjustments to NOI(3)		(58,699)		(71,812)		(11,448)		(2,147)		11,554		(132,552)
Adjusted (cash) NOI		594,492		467,508		228,475		210,811		79,752		1,581,038
Interest income		11,621		73,595		—		—		943		86,159
Portfolio Income	$	606,113	$	541,103	$	228,475	$	210,811	$	80,695		1,667,197
Addback non-cash adjustments												132,552
Investment management fee income												1,847
Interest expense												(435,252)
Depreciation and amortization												(423,312)
General and administrative expenses												(103,042)
Acquisition and pursuit costs												(6,191)
Other income, net												18,216
Income tax expense												(5,815)
Equity income in unconsolidated joint ventures												64,433
Total discontinued operations												74,373
Net income											$	985,006

(1) Represents rental and related revenues, tenant recoveries, and income from DFLs.

(2) See Note 6 for discussion of the Company’s HCRMC DFL investments

(3) Represents straight-line rents, DFL accretion, amortization of market lease intangibles and lease termination fees.

The Company’s total assets by segment were (in thousands):

	December 31,
Segments	2015		2014
Senior housing	$	9,812,142	$	8,383,345
Post-acute/skilled nursing		5,162,947		6,875,122
Life science		4,267,373		4,154,789
Medical office		3,469,048		2,988,888
Hospital		622,820		640,253
Gross segment assets		23,334,330		23,042,397
Accumulated depreciation and amortization		(3,005,270)		(2,600,072)
Net segment assets		20,329,060		20,442,325
Other nonsegment assets		1,120,789		889,111
Total assets	$	21,449,849	$	21,331,436

At both December 31, 2015 and 2014, goodwill of $50 million was allocated to segment assets as follows: (i) senior housing—$31 million, (ii) post-acute/skilled nursing—$3 million, (iii) medical office—$11 million, and (iv) hospital—$5 million. The Company completed the required annual impairment test during the fourth quarter of 2015 andno impairment was recognized based on the results of the Company’s procedures.