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Segment Disclosures | 9 Months Ended
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Sep. 30, 2015
Segment Disclosures |
Segment Disclosures | NOTE 14. Segment Disclosures The Company evaluates its business and makes resource allocations based on its five business segments: (i) senior housing, (ii) post-acute/skilled nursing, (iii) life science, (iv) medical office and (v) hospital. Under the medical office segment, the Company invests through the acquisition and development of MOBs, which generally require a greater level of property management. Otherwise, the Company primarily invests, through the acquisition and development of real estate, in single tenant and operator properties and debt issued by tenants and operators in these sectors. The accounting policies of the segments are the same as those described in Note 2 to the Consolidated Financial Statements herein and in the Company’s 2014 Annual Report on Form 10-K filed with the SEC. There were no intersegment sales or transfers during the nine months ended September 30, 2015 and 2014. The Company evaluates performance based upon (i) property net operating income from continuing operations (“NOI”), (ii) adjusted NOI (cash NOI), and (iii) adjusted NOI plus interest income (“Portfolio Income”) of the combined investments in each segment. Non-segment assets consist primarily of corporate assets, including cash and cash equivalents, restricted cash, accounts receivable, net, marketable equity securities, deferred financing costs and, if any, real estate held for sale. Interest expense, depreciation and amortization, and non-property specific revenues and expenses are not allocated to individual segments in evaluating the Company’s segment-level performance. See Note 19 for other information regarding concentrations of credit risk. Summary information for the reportable segments follows (in thousands): For the three months ended September 30, 2015:
|  |  | Senior |  | Post-acute/ |  | Life |  | Medical |  |  |  |  |  |
|  |  | Housing |  | Skilled nursing |  | Science |  | Office |  | Hospital |  | Total |  |
| Rental revenues(1) |  | $ | 131,267 |  | $ | 132,650 |  | $ | 86,140 |  | $ | 109,915 |  | $ | 22,395 |  | $ | 482,367 |  |
| Resident fees and services |  |  | 155,290 |  |  | — |  |  | — |  |  | — |  |  | — |  |  | 155,290 |  |
| Operating expenses |  |  | (111,167) |  |  | (531) |  |  | (17,785) |  |  | (43,432) |  |  | (600) |  |  | (173,515) |  |
| NOI |  |  | 175,390 |  |  | 132,119 |  |  | 68,355 |  |  | 66,483 |  |  | 21,795 |  |  | 464,142 |  |
| Non-cash adjustments to NOI(2) |  |  | (6,141) |  |  | (20,362) |  |  | (2,613) |  |  | (1,363) |  |  | 286 |  |  | (30,193) |  |
| Adjusted (cash) NOI |  |  | 169,249 |  |  | 111,757 |  |  | 65,742 |  |  | 65,120 |  |  | 22,081 |  |  | 433,949 |  |
| Interest income |  |  | 2,411 |  |  | 17,431 |  |  | — |  |  | — |  |  | — |  |  | 19,842 |  |
| Portfolio Income |  | $ | 171,660 |  | $ | 129,188 |  | $ | 65,742 |  | $ | 65,120 |  | $ | 22,081 |  |  | 453,791 |  |
| Addback non-cash adjustments |  |  |  |  |  |  |  |  |  |  |  | 30,193 |  |
| Investment management fee income |  |  |  |  |  |  |  |  |  |  |  | 454 |  |
| Interest expense |  |  |  |  |  |  |  |  |  |  |  | (122,157) |  |
| Depreciation and amortization |  |  |  |  |  |  |  |  |  |  |  | (134,704) |  |
| General and administrative expenses |  |  |  |  |  |  |  |  |  |  |  | (20,534) |  |
| Acquisition and pursuit costs |  |  |  |  |  |  |  |  |  |  |  | (1,553) |  |
| Impairments |  |  |  |  |  |  |  |  |  |  |  | (69,622) |  |
| Gains on sales of real estate, net of income taxes |  |  |  |  |  |  |  |  |  |  |  | 52 |  |
| Other expense, net |  |  |  |  |  |  |  |  |  |  |  | (1,026) |  |
| Income tax benefit |  |  |  |  |  |  |  |  |  |  |  | 1,980 |  |
| Equity income in unconsolidated joint ventures |  |  |  |  |  |  |  |  |  |  |  | 8,314 |  |
| Impairment of investments in unconsolidated joint ventures |  |  |  |  |  |  |  |  | (27,234) |  |
| Net income |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | $ | 117,954 |  |
For the three months ended September 30, 2014:
|  |  | Senior |  | Post-acute/ |  | Life |  | Medical |  |  |  |  |  |
|  |  | Housing |  | Skilled nursing |  | Science |  | Office |  | Hospital |  | Total |  |
| Rental revenues(1) |  | $ | 183,834 |  | $ | 139,205 |  | $ | 79,450 |  | $ | 92,412 |  | $ | 21,560 |  | $ | 516,461 |  |
| Resident fees and services |  |  | 62,213 |  |  | — |  |  | — |  |  | — |  |  | — |  |  | 62,213 |  |
| Operating expenses |  |  | (43,017) |  |  | (534) |  |  | (16,637) |  |  | (38,459) |  |  | (952) |  |  | (99,599) |  |
| NOI |  |  | 203,030 |  |  | 138,671 |  |  | 62,813 |  |  | 53,953 |  |  | 20,608 |  |  | 479,075 |  |
| Non-cash adjustments to NOI(2) |  |  | (47,518) |  |  | (16,693) |  |  | (2,091) |  |  | 528 |  |  | 130 |  |  | (65,644) |  |
| Adjusted (cash) NOI |  |  | 155,512 |  |  | 121,978 |  |  | 60,722 |  |  | 54,481 |  |  | 20,738 |  |  | 413,431 |  |
| Interest income |  |  | 3,919 |  |  | 13,598 |  |  | — |  |  | — |  |  | — |  |  | 17,517 |  |
| Portfolio Income |  | $ | 159,431 |  | $ | 135,576 |  | $ | 60,722 |  | $ | 54,481 |  | $ | 20,738 |  |  | 430,948 |  |
| Addback non-cash adjustments |  |  |  |  |  |  |  |  |  |  |  | 65,644 |  |
| Investment management fee income |  |  |  |  |  |  |  |  |  |  |  | 447 |  |
| Interest expense |  |  |  |  |  |  |  |  |  |  |  | (111,275) |  |
| Depreciation and amortization |  |  |  |  |  |  |  |  |  |  |  | (122,975) |  |
| General and administrative expenses |  |  |  |  |  |  |  |  |  |  |  | (19,479) |  |
| Acquisition and pursuit costs |  |  |  |  |  |  |  |  |  |  |  | (5,475) |  |
| Other expense, net |  |  |  |  |  |  |  |  |  |  |  | 3,111 |  |
| Income tax benefit |  |  |  |  |  |  |  |  |  |  |  | (55) |  |
| Equity income in unconsolidated joint ventures |  |  |  |  |  |  |  |  |  |  |  | 10,168 |  |
| Net income |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | $ | 251,059 |  |
For the nine months ended September 30, 2015:
|  |  | Senior |  | Post-acute/ |  | Life |  | Medical |  |  |  |  |  |
|  |  | Housing |  | Skilled nursing |  | Science |  | Office |  | Hospital |  | Total |  |
| Rental revenues(1) |  | $ | 382,559 |  | $ | 404,121 |  | $ | 255,100 |  | $ | 310,805 |  | $ | 66,129 |  | $ | 1,418,714 |  |
| Resident fees and services |  |  | 367,141 |  |  | — |  |  | — |  |  | — |  |  | — |  |  | 367,141 |  |
| Operating expenses |  |  | (263,191) |  |  | (1,602) |  |  | (51,718) |  |  | (122,469) |  |  | (2,908) |  |  | (441,888) |  |
| NOI |  |  | 486,509 |  |  | 402,519 |  |  | 203,382 |  |  | 188,336 |  |  | 63,221 |  |  | 1,343,967 |  |
| Non-cash adjustments to NOI(2) |  |  | (11,316) |  |  | (57,522) |  |  | (8,433) |  |  | (4,399) |  |  | 764 |  |  | (80,906) |  |
| Adjusted (cash) NOI |  |  | 475,193 |  |  | 344,997 |  |  | 194,949 |  |  | 183,937 |  |  | 63,985 |  |  | 1,263,061 |  |
| Interest income |  |  | 22,042 |  |  | 67,007 |  |  | — |  |  | — |  |  | — |  |  | 89,049 |  |
| Portfolio Income |  | $ | 497,235 |  | $ | 412,004 |  | $ | 194,949 |  | $ | 183,937 |  | $ | 63,985 |  |  | 1,352,110 |  |
| Addback non-cash adjustments |  |  |  |  |  |  |  |  |  |  |  | 80,906 |  |
| Investment management fee income |  |  |  |  |  |  |  |  |  |  |  | 1,372 |  |
| Interest expense |  |  |  |  |  |  |  |  |  |  |  | (357,569) |  |
| Depreciation and amortization |  |  |  |  |  |  |  |  |  |  |  | (369,629) |  |
| General and administrative expenses |  |  |  |  |  |  |  |  |  |  |  | (74,152) |  |
| Acquisition and pursuit costs |  |  |  |  |  |  |  |  |  |  |  | (23,350) |  |
| Impairments |  |  |  |  |  |  |  |  |  |  |  | (592,921) |  |
| Gains on sales of real estate, net of income taxes |  |  |  |  |  |  |  |  |  |  |  | 6,377 |  |
| Other income, net |  |  |  |  |  |  |  |  |  |  |  | 11,753 |  |
| Income tax benefit |  |  |  |  |  |  |  |  |  |  |  | 6,620 |  |
| Equity income in unconsolidated joint ventures |  |  |  |  |  |  |  |  |  |  |  | 33,916 |  |
| Impairment of investments in unconsolidated joint ventures |  |  |  |  |  |  |  |  | (27,234) |  |
| Net income |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | $ | 48,199 |  |
For the nine months ended September 30, 2014:
|  |  | Senior |  | Post-acute/ |  | Life |  | Medical |  |  |  |  |  |
|  |  | Housing |  | Skilled nursing |  | Science |  | Office |  | Hospital |  | Total |  |
| Rental revenues(1) |  | $ | 485,823 |  | $ | 415,533 |  | $ | 233,113 |  | $ | 273,215 |  | $ | 64,372 |  | $ | 1,472,056 |  |
| Resident fees and services |  |  | 138,205 |  |  | — |  |  | — |  |  | — |  |  | — |  |  | 138,205 |  |
| Operating expenses |  |  | (92,388) |  |  | (1,599) |  |  | (46,247) |  |  | (111,140) |  |  | (2,799) |  |  | (254,173) |  |
| NOI |  |  | 531,640 |  |  | 413,934 |  |  | 186,866 |  |  | 162,075 |  |  | 61,573 |  |  | 1,356,088 |  |
| Non-cash adjustments to NOI(2) |  |  | (72,277) |  |  | (51,752) |  |  | (7,976) |  |  | (795) |  |  | 301 |  |  | (132,499) |  |
| Adjusted (cash) NOI |  |  | 459,363 |  |  | 362,182 |  |  | 178,890 |  |  | 161,280 |  |  | 61,874 |  |  | 1,223,589 |  |
| Interest income |  |  | 10,633 |  |  | 40,517 |  |  | — |  |  | — |  |  | — |  |  | 51,150 |  |
| Portfolio Income |  | $ | 469,996 |  | $ | 402,699 |  | $ | 178,890 |  | $ | 161,280 |  | $ | 61,874 |  |  | 1,274,739 |  |
| Addback non-cash adjustments |  |  |  |  |  |  |  |  |  |  |  | 132,499 |  |
| Investment management fee income |  |  |  |  |  |  |  |  |  |  |  | 1,340 |  |
| Interest expense |  |  |  |  |  |  |  |  |  |  |  | (324,755) |  |
| Depreciation and amortization |  |  |  |  |  |  |  |  |  |  |  | (343,496) |  |
| General and administrative expenses |  |  |  |  |  |  |  |  |  |  |  | (62,034) |  |
| Acquisition and pursuit costs |  |  |  |  |  |  |  |  |  |  |  | (13,376) |  |
| Other income, net |  |  |  |  |  |  |  |  |  |  |  | 5,750 |  |
| Income tax expense |  |  |  |  |  |  |  |  |  |  |  | (2,840) |  |
| Equity income in unconsolidated joint ventures |  |  |  |  |  |  |  |  |  |  |  | 39,388 |  |
| Total discontinued operations |  |  |  |  |  |  |  |  |  |  |  | 29,746 |  |
| Net income |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | $ | 736,961 |  |
| (1) |  | Represents rental and related revenues, tenant recoveries and income from DFLs.
| (2) |  | Represents straight-line rents, DFL accretion, amortization of market lease intangibles and lease termination fees.
A summary of the Company’s total assets by segment follows (in thousands):
|  | September 30, |  | December 31, |
Segment |  | 2015 |  | 2014 |
Senior housing |  | $ | 9,490,110 |  | $ | 8,383,345 |
Post-acute/skilled nursing |  |  | 6,368,064 |  |  | 6,875,122 |
Life science |  |  | 4,198,937 |  |  | 4,154,789 |
Medical office |  |  | 3,439,970 |  |  | 2,988,888 |
Hospital |  |  | 639,807 |  |  | 640,253 |
Gross segment assets |  |  | 24,136,888 |  |  | 23,042,397 |
Accumulated depreciation and amortization |  |  | (2,895,184) |  |  | (2,600,072) |
Net segment assets |  |  | 21,241,704 |  |  | 20,442,325 |
Other non-segment assets |  |  | 951,269 |  |  | 927,615 |
Total assets |  | $ | 22,192,973 |  | $ | 21,369,940 |
At both September 30, 2015 and December 31, 2014, goodwill of $50 million was allocated to segment assets as follows: (i) senior housing—$31 million, (ii) post-acute/skilled nursing—$3 million, (iii) medical office—$11 million and (iv) hospital—$5 million.

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