Segment Disclosures

12 Months Ended

Dec. 31, 2022

Segment Reporting [Abstract]

Segment Disclosures

Segment Disclosures

The Company’s reportable segments, based on how its chief operating decision maker (“CODM”) evaluates the business and allocates resources, are as follows: (i) life science, (ii) medical office, and (iii) CCRC. The Company has non-reportable segments that are comprised primarily of the Company’s interests in an unconsolidated JV that owns 19 senior housing assets (the “SWF SH JV”), loans receivable, and marketable debt securities. The accounting policies of the segments are the same as those described in the Company’s Summary of Significant Accounting Policies (see Note 2).

The Company evaluates performance based on property Adjusted NOI. NOI is defined as real estate revenues (inclusive of rental and related revenues, resident fees and services, income from direct financing leases, and government grant income and exclusive of interest income), less property level operating expenses; 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 are non-GAAP supplemental measures that are calculated as NOI and Adjusted NOI from consolidated properties, plus the Company’s share of NOI and Adjusted NOI from unconsolidated joint ventures (calculated by applying the Company’s actual ownership percentage for the period), less noncontrolling interests’ share of NOI and Adjusted NOI from consolidated joint ventures (calculated by applying the Company’s actual ownership percentage for the period). Management utilizes its share of NOI and Adjusted NOI in assessing its performance as the Company has various joint ventures that contribute to its performance. The Company does not control its unconsolidated joint ventures, and the Company’s share of amounts from unconsolidated joint ventures do not represent the Company’s legal claim to such items. The Company’s share of NOI and Adjusted NOI should not be considered a substitute for, and should only be considered together with and as a supplement to, the Company’s financial information presented in accordance with GAAP. Management believes that Adjusted NOI is an important supplemental measure because it provides relevant and useful information by reflecting only income and operating expense items that are incurred at the property level and presenting it on an unlevered basis. Additionally, management believes that net income (loss) is the most directly comparable GAAP measure to NOI and Adjusted NOI. NOI and Adjusted NOI should not be viewed as alternative measures of operating performance to net income (loss) as defined by GAAP since they do not reflect various excluded items.

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, loans receivable, marketable debt securities, other assets, real estate assets held for sale and discontinued operations, and liabilities related to assets held for sale.

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

For the year ended December 31, 2022:

	Life Science		Medical Office		CCRC		Other Non-reportable		Corporate Non-segment		Total
Total revenues	$	817,573	$	725,370	$	494,935	$	23,300	$	—	$	2,061,178
Government grant income(1)	—		—		6,765		—		—		6,765
Less: Interest income	—		—		—		(23,300)		—		(23,300)
Healthpeak’s share of unconsolidated joint venture total revenues	9,921		2,999		—		73,885		—		86,805
Healthpeak’s share of unconsolidated joint venture government grant income	—		—		380		498		—		878
Noncontrolling interests’ share of consolidated joint venture total revenues	(268)		(35,717)		—		—		—		(35,985)
Operating expenses	(209,143)		(253,309)		(400,539)		—		—		(862,991)
Healthpeak’s share of unconsolidated joint venture operating expenses	(2,883)		(1,178)		—		(57,632)		—		(61,693)
Noncontrolling interests’ share of consolidated joint venture operating expenses	87		10,317		—		—		—		10,404
Adjustments to NOI(2)	(62,754)		(15,513)		2,300		169		—		(75,798)
Adjusted NOI	552,533		432,969		103,841		16,920		—		1,106,263
Plus: Adjustments to NOI(2)	62,754		15,513		(2,300)		(169)		—		75,798
Interest income	—		—		—		23,300		—		23,300
Interest expense	—		(6,900)		(7,509)		—		(158,535)		(172,944)
Depreciation and amortization	(302,649)		(279,546)		(128,374)		—		—		(710,569)
General and administrative	—		—		—		—		(131,033)		(131,033)
Transaction costs	(387)		(1,255)		(725)		—		(2,486)		(4,853)
Impairments and loan loss reserves, net	—		—		—		(7,004)		—		(7,004)
Gain (loss) on sales of real estate, net	3,744		10,659		—		(5,325)		—		9,078
Other income (expense), net	311,939		12,709		(1,380)		(13)		3,013		326,268
Less: Government grant income	—		—		(6,765)		—		—		(6,765)
Less: Healthpeak’s share of unconsolidated joint venture NOI	(7,038)		(1,821)		(380)		(16,751)		—		(25,990)
Plus: Noncontrolling interests’ share of consolidated joint venture NOI	181		25,400		—		—		—		25,581
Income (loss) before income taxes and equity income (loss) from unconsolidated joint ventures	621,077		207,728		(43,592)		10,958		(289,041)		507,130
Income tax benefit (expense)	—		—		—		—		4,425		4,425
Equity income (loss) from unconsolidated joint ventures	(972)		852		539		1,566		—		1,985
Income (loss) from continuing operations	620,105		208,580		(43,053)		12,524		(284,616)		513,540
Income (loss) from discontinued operations	—		—		—		—		2,884		2,884
Net income (loss)	$	620,105	$	208,580	$	(43,053)	$	12,524	$	(281,732)	$	516,424

_______________________________________

(1)Represents government grant income received under the CARES Act, which is recorded in other income (expense), net in the Consolidated Statements of Operations (see Note 2).

(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, and termination fees. Includes the Company’s share of income (loss) generated by unconsolidated joint ventures and excludes noncontrolling interests’ share of income (loss) generated by consolidated joint ventures.

For the year ended December 31, 2021:

	Life Science		Medical Office		CCRC		Other Non-reportable		Corporate Non-segment		Total
Total revenues	$	715,844	$	671,242	$	471,325	$	37,773	$	—	$	1,896,184
Government grant income(1)	—		—		1,412		—		—		1,412
Less: Interest income	—		—		—		(37,773)		—		(37,773)
Healthpeak’s share of unconsolidated joint venture total revenues	5,757		2,882		6,903		67,835		—		83,377
Healthpeak’s share of unconsolidated joint venture government grant income	—		—		200		1,549		—		1,749
Noncontrolling interests’ share of consolidated joint venture total revenues	(292)		(35,363)		—		—		—		(35,655)
Operating expenses	(169,044)		(223,383)		(380,865)		13		—		(773,279)
Healthpeak’s share of unconsolidated joint venture operating expenses	(1,836)		(1,174)		(6,639)		(51,866)		—		(61,515)
Noncontrolling interests’ share of consolidated joint venture operating expenses	87		10,071		—		—		—		10,158
Adjustments to NOI(2)	(46,589)		(11,118)		3,241		(47)		—		(54,513)
Adjusted NOI	503,927		413,157		95,577		17,484		—		1,030,145
Plus: Adjustments to NOI(2)	46,589		11,118		(3,241)		47		—		54,513
Interest income	—		—		—		37,773		—		37,773
Interest expense	(232)		(2,837)		(7,701)		—		(147,210)		(157,980)
Depreciation and amortization	(303,196)		(255,746)		(125,344)		—		—		(684,286)
General and administrative	—		—		—		—		(98,303)		(98,303)
Transaction costs	(24)		(323)		(1,445)		(49)		—		(1,841)
Impairments and loan loss reserves, net	—		(21,577)		—		(1,583)		—		(23,160)
Gain (loss) on sales of real estate, net	—		190,590		—		—		—		190,590
Gain (loss) on debt extinguishments	—		—		—		—		(225,824)		(225,824)
Other income (expense), net	55		(2,725)		2,141		486		6,309		6,266
Less: Government grant income	—		—		(1,412)		—		—		(1,412)
Less: Healthpeak’s share of unconsolidated joint venture NOI	(3,921)		(1,708)		(464)		(17,518)		—		(23,611)
Plus: Noncontrolling interests’ share of consolidated joint venture NOI	205		25,292		—		—		—		25,497
Income (loss) before income taxes and equity income (loss) from unconsolidated joint ventures	243,403		355,241		(41,889)		36,640		(465,028)		128,367
Income tax benefit (expense)	—		—		—		—		3,261		3,261
Equity income (loss) from unconsolidated joint ventures	1,118		794		1,484		2,704		—		6,100
Income (loss) from continuing operations	244,521		356,035		(40,405)		39,344		(461,767)		137,728
Income (loss) from discontinued operations	—		—		—		—		388,202		388,202
Net income (loss)	$	244,521	$	356,035	$	(40,405)	$	39,344	$	(73,565)	$	525,930

_______________________________________

(1)Represents government grant income received under the CARES Act, which is recorded in other income (expense), net in the Consolidated Statements of Operations (see Note 2).

(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, and termination fees. Includes the Company’s share of income (loss) generated by unconsolidated joint ventures and excludes noncontrolling interests’ share of income (loss) generated by consolidated joint ventures.

For the year ended December 31, 2020:

	Life Science		Medical Office		CCRC		Other Non-reportable		Corporate Non-segment		Total
Total revenues	$	569,296	$	622,398	$	436,494	$	16,687	$	—	$	1,644,875
Government grant income(1)	—		—		16,198		—		—		16,198
Less: Interest income	—		—		—		(16,553)		—		(16,553)
Healthpeak’s share of unconsolidated joint venture total revenues	448		2,772		35,392		74,023		—		112,635
Healthpeak’s share of unconsolidated joint venture government grant income	—		—		920		359		—		1,279
Noncontrolling interests’ share of consolidated joint venture total revenues	(239)		(34,597)		—		—		—		(34,836)
Operating expenses	(138,005)		(204,008)		(440,528)		—		—		(782,541)
Healthpeak’s share of unconsolidated joint venture operating expenses	(137)		(1,129)		(32,125)		(53,779)		—		(87,170)
Noncontrolling interests’ share of consolidated joint venture operating expenses	72		10,282		—		—		—		10,354
Adjustments to NOI(2)	(20,133)		(5,544)		97,072		433		—		71,828
Adjusted NOI	411,302		390,174		113,423		21,170		—		936,069
Plus: Adjustments to NOI(2)	20,133		5,544		(97,072)		(433)		—		(71,828)
Interest income	—		—		—		16,553		—		16,553
Interest expense	(234)		(400)		(7,227)		—		(210,475)		(218,336)
Depreciation and amortization	(217,921)		(222,165)		(113,851)		(12)		—		(553,949)
General and administrative	—		—		—		—		(93,237)		(93,237)
Transaction costs	(236)		—		(17,994)		(112)		—		(18,342)
Impairments and loan loss reserves, net	(14,671)		(10,208)		—		(18,030)		—		(42,909)
Gain (loss) on sales of real estate, net	—		90,390		—		(40)		—		90,350
Gain (loss) on debt extinguishments	—		—		—		—		(42,912)		(42,912)
Other income (expense), net	—		—		187,844		41,707		5,133		234,684
Less: Government grant income	—		—		(16,198)		—		—		(16,198)
Less: Healthpeak’s share of unconsolidated joint venture NOI	(311)		(1,643)		(4,187)		(20,603)		—		(26,744)
Plus: Noncontrolling interests’ share of consolidated joint venture NOI	167		24,315		—		—		—		24,482
Income (loss) before income taxes and equity income (loss) from unconsolidated joint ventures	198,229		276,007		44,738		40,200		(341,491)		217,683
Income tax benefit (expense)(3)	—		—		—		—		9,423		9,423
Equity income (loss) from unconsolidated joint ventures	(40)		798		(1,547)		(65,810)		—		(66,599)
Income (loss) from continuing operations	198,189		276,805		43,191		(25,610)		(332,068)		160,507
Income (loss) from discontinued operations	—		—		—		—		267,746		267,746
Net income (loss)	$	198,189	$	276,805	$	43,191	$	(25,610)	$	(64,322)	$	428,253

_______________________________________

(1)Represents government grant income received under the CARES Act, which is recorded in other income (expense), net in the Consolidated Statements of Operations (see Note 2).

(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, and termination fees. Includes the Company’s share of income (loss) generated by unconsolidated joint ventures and excludes noncontrolling interests’ share of income (loss) generated by consolidated joint ventures.

(3)Income tax benefit (expense) for the year ended December 31, 2020 includes: (i) a $51 million tax benefit recognized in conjunction with internal restructuring activities, which resulted in the transfer of assets subject to certain deferred tax liabilities from taxable REIT subsidiaries to the REIT in connection with the 2019 MTCA (see Note 3), (ii) a $33 million income tax expense related to the valuation allowance on deferred tax assets that are no longer expected to be realized (see Note 17), and (iii) a $3.7 million net tax benefit recognized due to changes under the CARES Act, which resulted in net operating losses being utilized at a higher income tax rate than previously available.

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

	December 31,
Segment	2022		2021
Life science	$	9,019,271	$	8,257,990
Medical office	6,291,986		6,152,512
CCRC	2,276,898		2,233,377
Reportable segment assets	17,588,155		16,643,879
Accumulated depreciation and amortization	(3,540,362)		(3,125,416)
Net reportable segment assets	14,047,793		13,518,463
Other non-reportable segment assets	744,550		794,172
Assets held for sale and discontinued operations, net	49,866		37,190
Other non-segment assets	929,020		907,694
Total assets	$	15,771,229	$	15,257,519

See Notes 4, 5, 6, 7, 8, and 9 for significant transactions impacting the Company’s segment assets during the periods presented.

At each of December 31, 2022 and 2021, goodwill of $18 million was allocated to the Company’s segment assets as follows: (i) $14 million for medical office, (ii) $2 million for CCRC, and (iii) $2 million for other non-reportable.