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 U.K. investments. 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 and six months ended June 30, 2018, 10 senior housing triple-net facilities were transferred to the Company’s SHOP segment. During the three and six months ended June 30, 2017, one senior housing triple-net facility was transferred to the Company’s SHOP segment. When an asset is transferred from one segment to another, the results associated with that asset are included in the original segment until the date of transfer. Results generated after the transfer date are included in the new 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, proceeds receivable from the U.K. JV transaction (see Note 4), 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 June 30, 2018:



	Senior Housing Triple-Net			SHOP			Life Science			Medical Office			Other Non-reportable			Corporate Non-segment			Total
Rental revenues⁽¹⁾	$	70,713		$	138,352		$	101,031		$	125,246		$	32,762		$	—		$	468,104
Operating expenses	(791		)	(101,767		)	(22,732		)	(47,271		)	(1,305		)	—			(173,866		)
NOI	69,922			36,585			78,299			77,975			31,457			—			294,238
Adjustments to NOI⁽²⁾	1,006			(124		)	(2,233		)	(993		)	(1,318		)	—			(3,662		)
Adjusted NOI	70,928			36,461			76,066			76,982			30,139			—			290,576
Addback adjustments	(1,006		)	124			2,233			993			1,318			—			3,662
Interest income	—			—			—			—			1,447			—			1,447
Interest expense	(607		)	(990		)	(80		)	(119		)	(742		)	(70,500		)	(73,038		)
Depreciation and amortization	(21,251		)	(28,002		)	(35,269		)	(46,419		)	(12,351		)	—			(143,292		)
General and administrative	—			—			—			—			—			(22,514		)	(22,514		)
Transaction costs	—			—			—			—			—			(2,404		)	(2,404		)
Recoveries (impairments), net	(6,273		)	—			(7,639		)	—			—			—			(13,912		)
Gain (loss) on sales of real estate, net	(23,039		)	48,252			—			—			20,851			—			46,064
Other income (expense), net	—			—			—			—			—			1,786			1,786
Income tax benefit (expense)	—			—			—			—			—			4,654			4,654
Equity income (loss) from unconsolidated JVs	—			—			—			—			(101		)	—			(101		)
Net income (loss)	$	18,752		$	55,845		$	35,311		$	31,437		$	40,561		$	(88,978	)	$	92,928

_______________________________________


(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 June 30, 2017:



	Senior Housing Triple-Net			SHOP			Life Science			Medical Office			Other Non-reportable			Corporate Non-segment			Total
Rental revenues⁽¹⁾	$	78,079		$	125,416		$	86,730		$	119,164		$	28,670		$	—		$	438,059
Operating expenses	(882		)	(85,866		)	(18,744		)	(46,581		)	(1,090		)	—			(153,163		)
NOI	77,197			39,550			67,986			72,583			27,580			—			284,896
Adjustments to NOI⁽²⁾	(406		)	12			(123		)	(763		)	(864		)	—			(2,144		)
Adjusted NOI	76,791			39,562			67,863			71,820			26,716			—			282,752
Addback adjustments	406			(12		)	123			763			864			—			2,144
Interest income	—			—			—			—			20,869			—			20,869
Interest expense	(631		)	(1,166		)	(96		)	(127		)	(1,181		)	(74,587		)	(77,788		)
Depreciation and amortization	(25,519		)	(24,415		)	(31,004		)	(42,488		)	(7,325		)	—			(130,751		)
General and administrative	—			—			—			—			—			(21,286		)	(21,286		)
Transaction costs	—			—			—			—			—			(867		)	(867		)
Recoveries (impairments), net	—			—			—			—			(56,682		)	—			(56,682		)
Gain (loss) on sales of real estate, net	(230		)	(232		)	1,280			(406		)	—			—			412
Other income (expense), net	—			—			—			—			—			71			71
Income tax benefit (expense)	—			—			—			—			—			2,987			2,987
Equity income (loss) from unconsolidated JVs	—			—			—			—			240			—			240
Net income (loss)	$	50,817		$	13,737		$	38,166		$	29,562		$	(16,499	)	$	(93,682	)	$	22,101

_______________________________________


(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 six months ended June 30, 2018:



	Senior Housing Triple-Net			SHOP			Life Science			Medical Office			Other Non-reportable			Corporate Non-segment			Total
Rental revenues⁽¹⁾	$	145,003		$	283,022		$	200,653		$	249,180		$	63,078		$	—		$	940,936
Operating expenses	(1,837		)	(203,513		)	(44,541		)	(93,967		)	(2,560		)	—			(346,418		)
NOI	143,166			79,509			156,112			155,213			60,518			—			594,518
Adjustments to NOI⁽²⁾	(858		)	(1,732		)	(5,984		)	(2,064		)	(2,711		)	—			(13,349		)
Adjusted NOI	142,308			77,777			150,128			153,149			57,807			—			581,169
Addback adjustments	858			1,732			5,984			2,064			2,711			—			13,349
Interest income	—			—			—			—			7,812			—			7,812
Interest expense	(1,207		)	(1,979		)	(162		)	(239		)	(1,469		)	(143,084		)	(148,140		)
Depreciation and amortization	(43,157		)	(55,630		)	(71,350		)	(91,937		)	(24,468		)	—			(286,542		)
General and administrative	—			—			—			—			—			(51,689		)	(51,689		)
Transaction costs	—			—			—			—			—			(4,599		)	(4,599		)
Recoveries (impairments), net	(6,273		)	—			(7,639		)	—			—			—			(13,912		)
Gain (loss) on sales of real estate, net	(23,039		)	69,067			—			—			20,851			—			66,879
Other income (expense), net	—			—			—			—			(40,567		)	1,946			(38,621		)
Income tax benefit (expense)	—			—			—			—			—			9,990			9,990
Equity income (loss) from unconsolidated JVs	—			—			—			—			469			—			469
Net income (loss)	$	69,490		$	90,967		$	76,961		$	63,037		$	23,146		$	(187,436	)	$	136,165

_______________________________________


(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 six months ended June 30, 2017:



	Senior Housing Triple-Net			SHOP			Life Science			Medical Office			Other Non-reportable			Corporate Non-segment			Total
Rental revenues⁽¹⁾	$	178,112		$	265,644		$	172,050		$	237,535		$	58,555		$	—		911,896
Operating expenses	(1,993		)	(180,405		)	(36,064		)	(91,444		)	(2,338		)	—			(312,244		)
NOI	176,119			85,239			135,986			146,091			56,217			—			599,652
Adjustments to NOI⁽²⁾	(2,245		)	(299		)	(426		)	(1,726		)	(1,879		)	—			(6,575		)
Adjusted NOI	173,874			84,940			135,560			144,365			54,338			—			593,077
Addback adjustments	2,245			299			426			1,726			1,879			—			6,575
Interest income	—			—			—			—			39,200			—			39,200
Interest expense	(1,258		)	(6,017		)	(200		)	(256		)	(2,923		)	(153,852		)	(164,506		)
Depreciation and amortization	(51,930		)	(50,773		)	(64,795		)	(85,217		)	(14,590		)	—			(267,305		)
General and administrative	—			—			—			—			—			(43,764		)	(43,764		)
Transaction costs	—			—			—			—			—			(1,924		)	(1,924		)
Recoveries (impairments), net	—			—			—			—			(56,682		)	—			(56,682		)
Gain (loss) on sales of real estate, net	268,234			134			45,913			(406		)	3,795			—			317,670
Other income (expense), net	—			—			—			—			50,895			384			51,279
Income tax benefit (expense)	—			—			—			—			—			9,149			9,149
Equity income (loss) from unconsolidated JVs	—			—			—			—			3,509			—			3,509
Net income (loss)	$	391,165		$	28,583		$	116,904		$	60,212		$	79,421		$	(190,007	)	$	486,278

_______________________________________


(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 June 30,				Six Months Ended June 30,
Segment	2018		2017		2018		2017
Senior housing triple-net	$	70,713	$	78,079	$	145,003	$	178,112
SHOP	138,352		125,416		283,022		265,644
Life science	101,031		86,730		200,653		172,050
Medical office	125,246		119,164		249,180		237,535
Other non-reportable segments	34,209		49,539		70,890		97,755
Total revenues	$	469,551	$	458,928	$	948,748	$	951,096

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