Segment Disclosures

The Company evaluates its business and allocates resources based on its reportable business segments: (i) senior housing triple-net, (ii) SHOP, (iii) life science and (iv) medical office. The Company has non-reportable segments that are comprised primarily of the Company’s debt investments, hospital properties, unconsolidated JVs (see below) and care homes in the U.K. The accounting policies of the segments are the same as those in Note 2 to the Consolidated Financial Statements in the Company’s 2017 Annual Report on Form 10-K filed with the SEC, as updated by Note 2 herein.

During the three months ended March 31, 2018, there were no transfers of assets between segments. During the three months ended March 31, 2017, one senior housing triple-net facility was transferred to the Company’s SHOP segment.

The Company evaluates performance based upon: (i) property NOI and (ii) Adjusted NOI. NOI is defined as rental and related revenues, including tenant recoveries, resident fees and services, and income from DFLs, less property level operating expenses (which exclude transition costs); NOI excludes all other financial statement amounts included in net income (loss). Adjusted NOI is calculated as NOI after eliminating the effects of straight-line rents, DFL non-cash interest, amortization of market lease intangibles, termination fees, and the impact of deferred community fee income and expense.

During the fourth quarter of 2017, as a result of a change in how operating results are reported to the chief operating decision makers, for the purpose of evaluating performance and allocating resources, the Company began excluding unconsolidated JVs from its evaluation of its segments' operating results. Unconsolidated JVs are now reflected in other non-reportable segments.

The adjustments to NOI and resulting Adjusted NOI for SHOP have been recast for prior periods to conform to the current period presentation which excludes: (i) the impact of deferred community fee income and expense, resulting in recognition as cash is received and expenses are paid and (ii) adjustments related to unconsolidated JVs (see above).

Non-segment assets consist of assets in the Company's other non-reportable segments and corporate non-segment assets. Corporate non-segment assets consist primarily of corporate assets, including cash and cash equivalents, restricted cash, accounts receivable, net, marketable equity securities and, if any, real estate assets and liabilities held for sale. See Note 16 for other information regarding concentrations of credit risk.

The following tables summarize information for the reportable segments (in thousands):

For the three months ended March 31, 2018:



	Senior Housing Triple-Net			SHOP			Life Science			Medical Office			Other Non-reportable			Corporate Non-segment			Total
Rental revenues⁽¹⁾	$	74,289		$	144,670		$	99,622		$	123,935		$	30,316		$	—		$	472,832
Operating expenses	(1,045		)	(101,746		)	(21,809		)	(46,696		)	(1,256		)	—			(172,552		)
NOI	73,244			42,924			77,813			77,239			29,060			—			300,280
Adjustments to NOI⁽²⁾	(1,865		)	(1,607		)	(3,751		)	(1,071		)	(1,392		)	—			(9,686		)
Adjusted NOI	71,379			41,317			74,062			76,168			27,668			—			290,594
Addback adjustments	1,865			1,607			3,751			1,071			1,392			—			9,686
Interest income	—			—			—			—			6,365			—			6,365
Interest expense	(600		)	(988		)	(83		)	(120		)	(728		)	(72,583		)	(75,102		)
Depreciation and amortization	(21,906		)	(27,628		)	(36,080		)	(45,519		)	(12,117		)	—			(143,250		)
General and administrative	—			—			—			—			—			(29,175		)	(29,175		)
Transaction costs	—			—			—			—			—			(2,195		)	(2,195		)
Gain (loss) on sales of real estate, net	—			20,815			—			—			—			—			20,815
Other income (expense), net	—			—			—			—			(40,567		)	160			(40,407		)
Income tax benefit (expense)	—			—			—			—			—			5,336			5,336
Equity income (loss) from unconsolidated JVs	—			—			—			—			570			—			570
Net income (loss)	$	50,738		$	35,123		$	41,650		$	31,600		$	(17,417	)	$	(98,457	)	$	43,237

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


(2)	Represents straight-line rents, DFL non-cash interest, amortization of market lease intangibles, net, deferral of community fees, net and termination fees.

For the three months ended March 31, 2017:



	Senior Housing Triple-Net			SHOP			Life Science			Medical Office			Other Non-reportable			Corporate Non-segment			Total
Rental revenues⁽¹⁾	$	100,034		$	140,228		$	85,321		$	118,371		$	29,883		$	—		$	473,837
Operating expenses	(1,111		)	(94,539		)	(17,319		)	(44,864		)	(1,248		)	—			(159,081		)
NOI	98,923			45,689			68,002			73,507			28,635			—			314,756
Adjustments to NOI⁽²⁾	(1,839		)	(310		)	(305		)	(961		)	(1,012		)	—			(4,427		)
Adjusted NOI	97,084			45,379			67,697			72,546			27,623			—			310,329
Addback adjustments	1,839			310			305			961			1,012			—			4,427
Interest income	—			—			—			—			18,331			—			18,331
Interest expense	(627		)	(4,596		)	(104		)	(129		)	(1,997		)	(79,265		)	(86,718		)
Depreciation and amortization	(26,411		)	(26,358		)	(33,791		)	(42,729		)	(7,265		)	—			(136,554		)
General and administrative	—			—			—			—			—			(22,478		)	(22,478		)
Transaction costs	—			—			—			—			—			(1,057		)	(1,057		)
Gain (loss) on sales of real estate, net	268,464			366			44,633			—			3,795			—			317,258
Other income (expense), net	—			—			—			—			50,895			313			51,208
Income tax benefit (expense)	—			—			—			—			—			6,162			6,162
Equity income (loss) from unconsolidated JVs	—			—			—			—			3,269			—			3,269
Net income (loss)	$	340,349		$	15,101		$	78,740		$	30,649		$	95,663		$	(96,325	)	$	464,177

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


(2)	Represents straight-line rents, DFL non-cash interest, amortization of market lease intangibles, net, deferral of community fees, net and termination fees.

The following table summarizes the Company’s revenues by segment (in thousands):



	Three Months Ended March 31,
Segment	2018		2017
Senior housing triple-net	$	74,289	$	100,034
SHOP	144,670		140,228
Life science	99,622		85,321
Medical office	123,935		118,371
Other non-reportable segments	36,681		48,214
Total revenues	$	479,197	$	492,168

See Notes 3, 4 and 6 for significant transactions impacting the Company’s segment assets during the periods presented.