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Segment Disclosures
 6 Months Ended
Jun. 30, 2019
Segment Reporting [Abstract]  
Segment Disclosures 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 joint ventures, 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 2018 Annual Report on Form 10-K filed with the SEC, as updated by Note 2 herein.
During the first quarter of 2019, 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 reclassified operating results related to two facilities from its other non-reportable segment to its medical office segment. Accordingly, all prior period segment information has been recast to conform to current period presentation.
During the three and six months ended June 30, 2019, 21 and 39 senior housing triple-net facilities, respectively, were transferred to the Company’s SHOP segment as a result of terminating the triple-net leases and transitioning the assets to a RIDEA structure. During each of the three and six months ended June 30, 2018, 10 senior housing triple-net facilities 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 property NOI and Adjusted NOI. NOI is defined as real estate revenues (inclusive of rental and related revenues, resident fees and services, and income from direct financing leases), 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, actuarial reserves for insurance claims that have been incurred but not reported, and the impact of deferred community fee income and expense.
NOI and Adjusted NOI exclude the Company’s share of income (loss) from unconsolidated joint ventures, which is recognized as equity income (loss) from unconsolidated joint ventures in the consolidated statements of operations.
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 real estate assets and liabilities held for sale. See Note 15 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, 2019:
 
 
Senior Housing Triple-Net
 
SHOP
 
Life Science
 
Medical Office
 
Other Non-reportable
 
Corporate Non-segment
 
Total
Real estate revenues(1)
 
$
49,866

 
$
177,001

 
$
107,596

 
$
141,927

 
$
12,763

 
$
—

 
$
489,153

Operating expenses
 
(866
)
 
(137,460
)
 
(25,480
)
 
(50,176
)
 
(11
)
 
—

 
(213,993
)
NOI
 
49,000

 
39,541

 
82,116

 
91,751

 
12,752

 
—

 
275,160

Adjustments to NOI(2)
 
4,807

 
841

 
(7,614
)
 
(1,203
)
 
219

 
—

 
(2,950
)
Adjusted NOI
 
53,807

 
40,382

 
74,502

 
90,548

 
12,971

 
—

 
272,210

Addback adjustments
 
(4,807
)
 
(841
)
 
7,614

 
1,203

 
(219
)
 
—

 
2,950

Interest income
 
—

 
—

 
—

 
—

 
2,414

 
—

 
2,414

Interest expense
 
(206
)
 
(1,326
)
 
(70
)
 
(109
)
 
—

 
(55,231
)
 
(56,942
)
Depreciation and amortization
 
(15,693
)
 
(52,242
)
 
(41,431
)
 
(54,096
)
 
(1,834
)
 
—

 
(165,296
)
General and administrative
 
—

 
—

 
—

 
—

 
—

 
(27,120
)
 
(27,120
)
Transaction costs
 
—

 
—

 
—

 
—

 
—

 
(1,337
)
 
(1,337
)
Recoveries (impairments), net
 
(15,485
)
 
(52,963
)
 
—

 
(90
)
 
—

 
—

 
(68,538
)
Gain (loss) on sales of real estate, net
 
—

 
4,691

 
3,816

 
2,941

 
—

 
—

 
11,448

Loss on debt extinguishments
 
—

 
—

 
—

 
—

 
—

 
(1,135
)
 
(1,135
)
Other income (expense), net
 
—

 
—

 
—

 
—

 
12,817

 
8,191

 
21,008

Income tax benefit (expense)
 
—

 
—

 
—

 
—

 
—

 
1,864

 
1,864

Equity income (loss) from unconsolidated joint ventures
 
—

 
—

 
—

 
—

 
(1,506
)
 
—

 
(1,506
)
Net income (loss)
 
$
17,616

 
$
(62,299
)
 
$
44,431

 
$
40,397

 
$
24,643

 
$
(74,768
)
 
$
(9,980
)
_______________________________________
(1)
Represents rental and related revenues, resident fees and services, and income from DFLs.
(2)
Represents straight-line rents, DFL non-cash interest, amortization of market lease intangibles, net, actuarial reserves for insurance claims that have been incurred but not reported, deferral of community fees, net, and termination fees.
For the three months ended June 30, 2018:
 
 
Senior Housing Triple-Net
 
SHOP
 
Life Science
 
Medical Office
 
Other Non-reportable
 
Corporate Non-segment
 
Total
Real estate revenues(1)
 
$
70,713

 
$
138,352

 
$
101,031

 
$
134,574

 
$
23,434

 
$
—

 
$
468,104

Operating expenses
 
(791
)
 
(101,767
)
 
(22,732
)
 
(48,528
)
 
(48
)
 
—

 
(173,866
)
NOI
 
69,922

 
36,585

 
78,299

 
86,046

 
23,386

 
—

 
294,238

Adjustments to NOI(2)
 
1,006

 
(124
)
 
(2,233
)
 
(1,831
)
 
(480
)
 
—

 
(3,662
)
Adjusted NOI
 
70,928

 
36,461

 
76,066

 
84,215

 
22,906

 
—

 
290,576

Addback adjustments
 
(1,006
)
 
124

 
2,233

 
1,831

 
480

 
—

 
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
)
 
(48,098
)
 
(10,672
)
 
—

 
(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 joint ventures
 
—

 
—

 
—

 
—

 
(101
)
 
—

 
(101
)
Net income (loss)
 
$
18,752

 
$
55,845

 
$
35,311

 
$
37,829

 
$
34,169

 
$
(88,978
)
 
$
92,928

_______________________________________
(1)
Represents rental and related revenues, resident fees and services, and income from DFLs.
(2)
Represents straight-line rents, DFL non-cash interest, amortization of market lease intangibles, net, actuarial reserves for insurance claims that have been incurred but not reported, deferral of community fees, net, and termination fees.

For the six months ended June 30, 2019:
 
 
Senior Housing Triple-Net
 
SHOP
 
Life Science
 
Medical Office
 
Other Non-reportable
 
Corporate Non-segment
 
Total
Real estate revenues(1)
 
$
108,758

 
$
303,182

 
$
202,068

 
$
284,122

 
$
25,464

 
$
—

 
$
923,594

Operating expenses
 
(1,859
)
 
(234,407
)
 
(47,472
)
 
(99,163
)
 
(19
)
 
—

 
(382,920
)
NOI
 
106,899

 
68,775

 
154,596

 
184,959

 
25,445

 
—

 
540,674

Adjustments to NOI(2)
 
5,371

 
1,993

 
(10,091
)
 
(2,974
)
 
413

 
—

 
(5,288
)
Adjusted NOI
 
112,270

 
70,768

 
144,505

 
181,985

 
25,858

 
—

 
535,386

Addback adjustments
 
(5,371
)
 
(1,993
)
 
10,091

 
2,974

 
(413
)
 
—

 
5,288

Interest income
 
—

 
—

 
—

 
—

 
4,127

 
—

 
4,127

Interest expense
 
(795
)
 
(1,989
)
 
(143
)
 
(221
)
 
—

 
(103,121
)
 
(106,269
)
Depreciation and amortization
 
(32,376
)
 
(76,328
)
 
(77,677
)
 
(107,198
)
 
(3,668
)
 
—

 
(297,247
)
General and administrative
 
—

 
—

 
—

 
—

 
—

 
(48,475
)
 
(48,475
)
Transaction costs
 
—

 
—

 
—

 
—

 
—

 
(5,855
)
 
(5,855
)
Recoveries (impairments), net
 
(15,485
)
 
(52,963
)
 
—

 
(8,948
)
 
—

 
—

 
(77,396
)
Gain (loss) on sales of real estate, net
 
3,557

 
9,314

 
3,738

 
2,883

 
—

 
—

 
19,492

Loss on debt extinguishments
 
—

 
—

 
—

 
—

 
—

 
(1,135
)
 
(1,135
)
Other income (expense), net
 
—

 
—

 
—

 
—

 
12,817

 
11,324

 
24,141

Income tax benefit (expense)
 
—

 
—

 
—

 
—

 
—

 
5,322

 
5,322

Equity income (loss) from unconsolidated joint ventures
 
—

 
—

 
—

 
—

 
(2,369
)
 
—

 
(2,369
)
Net income (loss)
 
$
61,800

 
$
(53,191
)
 
$
80,514

 
$
71,475

 
$
36,352

 
$
(141,940
)
 
$
55,010

_______________________________________
(1)
Represents rental and related revenues, resident fees and services, and income from DFLs.
(2)
Represents straight-line rents, DFL non-cash interest, amortization of market lease intangibles, net, actuarial reserves for insurance claims that have been incurred but not reported, 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
Real estate revenues(1)
 
$
145,003

 
$
283,022

 
$
200,653

 
$
267,794

 
$
44,464

 
$
—

 
$
940,936

Operating expenses
 
(1,837
)
 
(203,513
)
 
(44,541
)
 
(96,406
)
 
(121
)
 
—

 
(346,418
)
NOI
 
143,166

 
79,509

 
156,112

 
171,388

 
44,343

 
—

 
594,518

Adjustments to NOI(2)
 
(858
)
 
(1,732
)
 
(5,984
)
 
(3,764
)
 
(1,011
)
 
—

 
(13,349
)
Adjusted NOI
 
142,308

 
77,777

 
150,128

 
167,624

 
43,332

 
—

 
581,169

Addback adjustments
 
858

 
1,732

 
5,984

 
3,764

 
1,011

 
—

 
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
)
 
(95,295
)
 
(21,110
)
 
—

 
(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 joint ventures
 
—

 
—

 
—

 
—

 
469

 
—

 
469

Net income (loss)
 
$
69,490

 
$
90,967

 
$
76,961

 
$
75,854

 
$
10,329

 
$
(187,436
)
 
$
136,165

_______________________________________
(1)
Represents rental and related revenues, resident fees and services, and income from DFLs.
(2)
Represents straight-line rents, DFL non-cash interest, amortization of market lease intangibles, net, actuarial reserves for insurance claims that have been incurred but not reported, 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
 
2019
 
2018
 
2019
 
2018
Senior housing triple-net
 
$
49,866

 
$
70,713

 
$
108,758

 
$
145,003

SHOP
 
177,001

 
138,352

 
303,182

 
283,022

Life science
 
107,596

 
101,031

 
202,068

 
200,653

Medical office
 
141,927

 
134,574

 
284,122

 
267,794

Other non-reportable segments
 
15,177

 
24,881

 
29,591

 
52,276

Total revenues
 
$
491,567

 
$
469,551

 
$
927,721

 
$
948,748


See Note 3 for significant transactions impacting the Company’s segment assets during the periods presented.