Segment Disclosures

12 Months Ended

Dec. 31, 2019

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 unconsolidated joint ventures, hospital properties, and debt investments. The accounting policies of the segments are the same as those described under Summary of Significant Accounting Policies (see Note 2).

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 years ended December 31, 2019, 2018, and 2017, 41, 22, and 25 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. 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 on: 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 19 for other information regarding concentrations of credit risk.

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

For the year ended December 31, 2019:



	Senior Housing Triple-Net			SHOP			Life Science			Medical Office			Other Non-reportable			Corporate Non-segment			Total
Real estate revenues⁽¹⁾	$	199,441		$	725,171		$	440,784		$	571,530		$	50,613		$	—		$	1,987,539
Operating expenses	(4,565		)	(565,713		)	(107,472		)	(201,538		)	(82		)	—			(879,370		)
NOI	194,876			159,458			333,312			369,992			50,531			—			1,108,169
Adjustments to NOI⁽²⁾	2,725			2,872			(22,120		)	(5,877		)	1,342			—			(21,058		)
Adjusted NOI	197,601			162,330			311,192			364,115			51,873			—			1,087,111
Addback adjustments	(2,725		)	(2,872		)	22,120			5,877			(1,342		)	—			21,058
Interest income	—			—			—			—			9,844			—			9,844
Interest expense	(1,003		)	(7,519		)	(277		)	(434		)	—			(216,386		)	(225,619		)
Depreciation and amortization	(55,361		)	(214,590		)	(168,339		)	(214,669		)	(7,030		)	—			(659,989		)
General and administrative	—			—			—			—			—			(92,966		)	(92,966		)
Transaction costs	—			—			—			—			—			(8,743		)	(8,743		)
Recoveries (impairments), net	(43,859		)	(164,369		)	—			(17,332		)	(377		)	—			(225,937		)
Gain (loss) on sales of real estate, net	3,557			19,384			3,651			3,139			(6,831		)	—			22,900
Loss on debt extinguishment	—			—			—			—			—			(58,364		)	(58,364		)
Other income (expense), net	—			160,886			—			—			8,137			13,106			182,129
Income tax benefit (expense)	—			—			—			—			—			17,262			17,262
Equity income (loss) from unconsolidated joint ventures	—			—			—			—			(8,625		)	—			(8,625		)
Net income (loss)	$	98,210		$	(46,750	)	$	168,347		$	140,696		$	45,649		$	(346,091	)	$	60,061

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(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 year ended December 31, 2018:



	Senior Housing Triple-Net			SHOP			Life Science			Medical Office			Other Non-reportable			Corporate Non-segment			Total
Real estate revenues⁽¹⁾	$	276,091		$	547,976		$	395,064		$	547,375		$	69,777		$	—		$	1,836,283
Operating expenses	(3,618		)	(414,312		)	(91,742		)	(195,100		)	(266		)	—			(705,038		)
NOI	272,473			133,664			303,322			352,275			69,511			—			1,131,245
Adjustments to NOI⁽²⁾	2,127			2,875			(9,589		)	(6,690		)	(627		)	—			(11,904		)
Adjusted NOI	274,600			136,539			293,733			345,585			68,884			—			1,119,341
Addback adjustments	(2,127		)	(2,875		)	9,589			6,690			627			—			11,904
Interest income	—			—			—			—			10,406			—			10,406
Interest expense	(2,404		)	(2,725		)	(316		)	(474		)	(1,469		)	(258,955		)	(266,343		)
Depreciation and amortization	(79,605		)	(104,405		)	(140,480		)	(200,430		)	(24,579		)	—			(549,499		)
General and administrative	—			—			—			—			—			(96,702		)	(96,702		)
Transaction costs	—			—			—			—			—			(10,772		)	(10,772		)
Recoveries (impairments), net	—			(44,343		)	(7,639		)	—			(3,278		)	—			(55,260		)
Gain (loss) on sales of real estate, net	641			93,977			806,184			4,428			20,755			—			925,985
Loss on debt extinguishment	—			—			—			—			—			(44,162		)	(44,162		)
Other income (expense), net	—			—			—			—			9,605			3,711			13,316
Income tax benefit (expense)	—			—			—			—			—			17,854			17,854
Equity income (loss) from unconsolidated joint ventures	—			—			—			—			(2,594		)	—			(2,594		)
Net income (loss)	$	191,105		$	76,168		$	961,071		$	155,799		$	78,357		$	(389,026	)	$	1,073,474

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(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 year ended December 31, 2017:



	Senior Housing Triple-Net			SHOP			Life Science			Medical Office			Other Non-reportable			Corporate Non-segment			Total
Real estate revenues⁽¹⁾	$	313,547		$	525,473		$	358,816		$	512,385		$	81,920		$	—		$	1,792,141
Operating expenses	(3,819		)	(396,491		)	(78,001		)	(187,688		)	(252		)	—			(666,251		)
NOI	309,728			128,982			280,815			324,697			81,668			—			1,125,890
Adjustments to NOI⁽²⁾	17,098			33,227			(4,517		)	(5,405		)	(1,993		)	—			38,410
Adjusted NOI	326,826			162,209			276,298			319,292			79,675			—			1,164,300
Addback adjustments	(17,098		)	(33,227		)	4,517			5,405			1,993			—			(38,410		)
Interest income	—			—			—			—			56,237			—			56,237
Interest expense	(2,518		)	(7,920		)	(373		)	(506		)	(4,230		)	(292,169		)	(307,716		)
Depreciation and amortization	(103,820		)	(103,162		)	(128,864		)	(176,507		)	(22,373		)	—			(534,726		)
General and administrative	—			—			—			—			—			(88,772		)	(88,772		)
Transaction costs	—			—			—			—			—			(7,963		)	(7,963		)
Recoveries (impairments), net	(22,590		)	—			—			—			(143,794		)	—			(166,384		)
Gain (loss) on sales of real estate, net	280,349			17,485			45,916			9,095			3,796			—			356,641
Loss on debt extinguishment	—			—			—			—			—			(54,227		)	(54,227		)
Other income (expense), net	—			—			—			—			50,895			(19,475		)	31,420
Income tax benefit (expense)	—			—			—			—			—			1,333			1,333
Equity income (loss) from unconsolidated joint ventures	—			—			—			—			10,901			—			10,901
Discontinued operations	—			—			—			—			—			—			—
Net income (loss)	$	461,149		$	35,385		$	197,494		$	156,779		$	33,100		$	(461,273	)	$	422,634

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(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):



	Year Ended
	December 31,
Segments	2019		2018		2017
Senior housing triple-net	$	199,441	$	276,091	$	313,547
SHOP	725,171		547,976		525,473
Life science	440,784		395,064		358,816
Medical office	571,530		547,375		512,385
Other non-reportable segments	60,457		80,183		138,157
Total revenues	$	1,997,383	$	1,846,689	$	1,848,378

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



	December 31,
Segment	2019			2018
Senior housing triple-net	$	1,012,443		$	2,965,679
SHOP	2,969,871			2,173,795
Life science	5,688,659			4,303,471
Medical office	4,761,357			4,603,794
Reportable segment assets	14,432,330			14,046,739
Accumulated depreciation and amortization	(2,966,987		)	(2,997,012		)
Net reportable segment assets	11,465,343			11,049,727
Other non-reportable segment assets	1,233,752			847,921
Assets held for sale, net	504,394			108,086
Other non-segment assets	829,402			712,819
Total assets	$	14,032,891		$	12,718,553

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

The Company completed the required annual goodwill impairment test during the fourth quarter of 2019, 2018, and 2017, and no impairment was recognized.

At December 31, 2019 goodwill of $47 million was allocated to segment assets as follows: (i) senior housing triple-net—$14 million, (ii) SHOP—$16 million, (iii) medical office—$13 million, and (iv) other—$4 million. At December 31, 2018 goodwill of $47 million was allocated to segment assets as follows: (i) senior housing triple-net—$21 million, (ii) SHOP—$9 million, (iii) medical office—$11 million, and (iv) other—$6 million. During the year ended December 31, 2019, as a result of transferring 41 senior housing triple-net facilities to the Company’s SHOP segment and two facilities from its other non-reportable segments to its medical office segment, the Company reallocated $7 million of goodwill from the senior housing triple-net segment to the SHOP segment and $2 million of goodwill from other non-reportable segments to the MOB segment.