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 nine months ended September 30, 2018, six and 16 senior housing triple-net facilities, respectively, were transferred to the Company’s SHOP segment. During the three and nine months ended September 30, 2017, three and four senior housing triple-net facilities, respectively, were 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, 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 September 30, 2018:



	Senior Housing Triple-Net			SHOP			Life Science			Medical Office			Other Non-reportable			Corporate Non-segment			Total
Rental revenues⁽¹⁾	$	67,487		$	137,044		$	98,040		$	129,618		$	22,597		$	—		$	454,786
Operating expenses	(840		)	(106,182		)	(23,668		)	(49,150		)	(1,367		)	—			(181,207		)
NOI	66,647			30,862			74,372			80,468			21,230			—			273,579
Adjustments to NOI⁽²⁾	534			1,378			(1,439		)	(319		)	(857		)	—			(703		)
Adjusted NOI	67,181			32,240			72,933			80,149			20,373			—			272,876
Addback adjustments	(534		)	(1,378		)	1,439			319			857			—			703
Interest income	—			—			—			—			1,236			—			1,236
Interest expense	(599		)	(688		)	(78		)	(117		)	—			(62,004		)	(63,486		)
Depreciation and amortization	(18,884		)	(25,166		)	(34,432		)	(50,294		)	(3,422		)	—			(132,198		)
General and administrative	—			—			—			—			—			(23,503		)	(23,503		)
Transaction costs	—			—			—			—			—			(4,489		)	(4,489		)
Recoveries (impairments), net	—			(5,268		)	—			—			—			—			(5,268		)
Gain (loss) on sales of real estate, net	463			10,163			80,580			3,903			223			—			95,332
Loss on debt extinguishments	—			—			—			—			—			(43,899		)	(43,899		)
Other income (expense), net	—			—			—			—			—			1,604			1,604
Income tax benefit (expense)	—			—			—			—			—			4,929			4,929
Equity income (loss) from unconsolidated JVs	—			—			—			—			(911		)	—			(911		)
Net income (loss)	$	47,627		$	9,903		$	120,442		$	33,960		$	18,356		$	(127,362	)	$	102,926

_______________________________________


(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 September 30, 2017:



	Senior Housing Triple-Net			SHOP			Life Science			Medical Office			Other Non-reportable			Corporate Non-segment			Total
Rental revenues⁽¹⁾	$	77,220		$	126,040		$	90,174		$	119,847		$	28,968		$	—		$	442,249
Operating expenses	(934		)	(86,821		)	(19,960		)	(46,486		)	(1,137		)	—			(155,338		)
NOI	76,286			39,219			70,214			73,361			27,831			—			286,911
Adjustments to NOI⁽²⁾	(600		)	(35		)	(785		)	(578		)	(1,283		)	—			(3,281		)
Adjusted NOI	75,686			39,184			69,429			72,783			26,548			—			283,630
Addback adjustments	600			35			785			578			1,283			—			3,281
Interest income	—			—			—			—			11,774			—			11,774
Interest expense	(640		)	(933		)	(87		)	(126		)	(618		)	(68,924		)	(71,328		)
Depreciation and amortization	(25,547		)	(24,884		)	(30,851		)	(42,047		)	(7,259		)	—			(130,588		)
General and administrative	—			—			—			—			—			(23,523		)	(23,523		)
Transaction costs	—			—			—			—			—			(580		)	(580		)
Recoveries (impairments), net	—			—			—			—			(25,328		)	—			(25,328		)
Gain (loss) on sales of real estate, net	5,176			(2		)	8			—			—			—			5,182
Loss on debt extinguishments	—			—			—			—			—			(54,227		)	(54,227		)
Other income (expense), net	—			—			—			—			—			(10,556		)	(10,556		)
Income tax benefit (expense)	—			—			—			—			—			5,481			5,481
Equity income (loss) from unconsolidated JVs	—			—			—			—			1,062			—			1,062
Net income (loss)	$	55,275		$	13,400		$	39,284		$	31,188		$	7,462		$	(152,329	)	$	(5,720	)

_______________________________________


(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 nine months ended September 30, 2018:



	Senior Housing Triple-Net			SHOP			Life Science			Medical Office			Other Non-reportable			Corporate Non-segment			Total
Rental revenues⁽¹⁾	$	212,489		$	420,067		$	298,692		$	378,798		$	85,676		$	—		$	1,395,722
Operating expenses	(2,677		)	(309,694		)	(68,208		)	(143,114		)	(3,932		)	—			(527,625		)
NOI	209,812			110,373			230,484			235,684			81,744			—			868,097
Adjustments to NOI⁽²⁾	(323		)	(356		)	(7,423		)	(2,383		)	(3,566		)	—			(14,051		)
Adjusted NOI	209,489			110,017			223,061			233,301			78,178			—			854,046
Addback adjustments	323			356			7,423			2,383			3,566			—			14,051
Interest income	—			—			—			—			9,048			—			9,048
Interest expense	(1,806		)	(2,067		)	(240		)	(356		)	(1,469		)	(205,688		)	(211,626		)
Depreciation and amortization	(62,041		)	(80,797		)	(105,782		)	(142,229		)	(27,891		)	—			(418,740		)
General and administrative	—			—			—			—			—			(75,192		)	(75,192		)
Transaction costs	—			—			—			—			—			(9,088		)	(9,088		)
Recoveries (impairments), net	(6,273		)	(5,268		)	(7,639		)	—			—			—			(19,180		)
Gain (loss) on sales of real estate, net	(22,687		)	79,340			80,581			3,903			21,074			—			162,211
Loss on debt extinguishments	—			—			—			—			—			(43,899		)	(43,899		)
Other income (expense), net	—			—			—			—			(40,567		)	3,550			(37,017		)
Income tax benefit (expense)	—			—			—			—			—			14,919			14,919
Equity income (loss) from unconsolidated JVs	—			—			—			—			(442		)	—			(442		)
Net income (loss)	$	117,005		$	101,581		$	197,404		$	97,002		$	41,497		$	(315,398	)	$	239,091

_______________________________________


(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 nine months ended September 30, 2017:



	Senior Housing Triple-Net			SHOP			Life Science			Medical Office			Other Non-reportable			Corporate Non-segment			Total
Rental revenues⁽¹⁾	$	255,332		$	391,684		$	262,224		$	357,381		$	87,524		$	—		$	1,354,145
Operating expenses	(2,927		)	(267,226		)	(56,024		)	(137,930		)	(3,475		)	—			(467,582		)
NOI	252,405			124,458			206,200			219,451			84,049			—			886,563
Adjustments to NOI⁽²⁾	(2,844		)	(334		)	(1,211		)	(2,304		)	(3,162		)	—			(9,855		)
Adjusted NOI	249,561			124,124			204,989			217,147			80,887			—			876,708
Addback adjustments	2,844			334			1,211			2,304			3,162			—			9,855
Interest income	—			—			—			—			50,974			—			50,974
Interest expense	(1,898		)	(6,950		)	(288		)	(382		)	(3,541		)	(222,775		)	(235,834		)
Depreciation and amortization	(77,478		)	(75,657		)	(95,648		)	(127,261		)	(21,849		)	—			(397,893		)
General and administrative	—			—			—			—			—			(67,287		)	(67,287		)
Transaction costs	—			—			—			—			—			(2,504		)	(2,504		)
Recoveries (impairments), net	—			—			—			—			(82,010		)	—			(82,010		)
Gain (loss) on sales of real estate, net	273,409			131			45,922			(406		)	3,796			—			322,852
Loss on debt extinguishments	—			—			—			—			—			(54,227		)	(54,227		)
Other income (expense), net	—			—			—			—			50,895			(10,172		)	40,723
Income tax benefit (expense)	—			—			—			—			—			14,630			14,630
Equity income (loss) from unconsolidated JVs	—			—			—			—			4,571			—			4,571
Net income (loss)	$	446,438		$	41,982		$	156,186		$	91,402		$	86,885		$	(342,335	)	$	480,558

_______________________________________


(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 September 30,				Nine Months Ended September 30,
Segment	2018		2017		2018		2017
Senior housing triple-net	$	67,487	$	77,220	$	212,489	$	255,332
SHOP	137,044		126,040		420,067		391,684
Life science	98,040		90,174		298,692		262,224
Medical office	129,618		119,847		378,798		357,381
Other non-reportable segments	23,833		40,742		94,724		138,498
Total revenues	$	456,022	$	454,023	$	1,404,770	$	1,405,119

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