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Segment Disclosures | 12 Months Ended
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Dec. 31, 2016
Segment Disclosures |
Segment Disclosures | NOTE 14. Segment Disclosures The Company evaluates its business and allocates resources based on its reportable business segments: (i) SH NNN, (ii) SHOP, (iii) life science and (iv) medical office. Under the medical office segment, the Company invests through the acquisition and development of medical office buildings (“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. The Company has non-reportable segments that are comprised primarily of the Company’s debt investments, hospital properties and U.K. care homes. The accounting policies of the segments are the same as those described under Summary of Significant Accounting Policies (see Note 2). During the year ended December 31, 2016, 17 SH NNN facilities were transitioned to a RIDEA structure (reported in the Company’s SHOP segment). There were no intersegment sales or transfers during the years ended December 31, 2015 and 2014. The Company evaluates performance based upon: (i) property net operating income from continuing operations (“NOI”) and (ii) adjusted NOI (cash NOI) of the combined consolidated and unconsolidated 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 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. The following tables summarize information for the reportable segments (in thousands): For the year ended December 31, 2016:
|  |  |  |  |  | Life |  | Medical |  | Other |  | Corporate |  |  |  |
Segments |  | SH NNN |  | SHOP |  | Science |  | Office |  | Non-reportable |  | Non-segment |  | Total |
Rental revenues(1) |  | $ | 423,118 |  | $ | 686,822 |  | $ | 358,537 |  | $ | 446,280 |  | $ | 125,729 |  | $ | — |  | $ | 2,040,486 |
HCP share of unconsolidated JV revenues |  |  | — |  |  | 204,591 |  |  | 7,599 |  |  | 1,996 |  |  | 1,618 |  |  | — |  |  | 215,804 |
Less: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Operating expenses |  |  | (6,710) |  |  | (480,870) |  |  | (72,478) |  |  | (173,687) |  |  | (4,654) |  |  | — |  |  | (738,399) |
HCP share of unconsolidated JV operating expenses |  |  | — |  |  | (166,791) |  |  | (1,601) |  |  | (595) |  |  | (48) |  |  | — |  |  | (169,035) |
NOI |  |  | 416,408 |  |  | 243,752 |  |  | 292,057 |  |  | 273,994 |  |  | 122,645 |  |  | — |  |  | 1,348,856 |
Non-cash adjustments to NOI(2) |  |  | (7,566) |  |  | 20,076 |  |  | (3,003) |  |  | (3,557) |  |  | (3,019) |  |  | — |  |  | 2,931 |
Adjusted NOI |  |  | 408,842 |  |  | 263,828 |  |  | 289,054 |  |  | 270,437 |  |  | 119,626 |  |  | — |  |  | 1,351,787 |
Addback non-cash adjustments |  |  | 7,566 |  |  | (20,076) |  |  | 3,003 |  |  | 3,557 |  |  | 3,019 |  |  | — |  |  | (2,931) |
Interest income |  |  | — |  |  | — |  |  | — |  |  | — |  |  | 88,808 |  |  | — |  |  | 88,808 |
Interest expense |  |  | (9,499) |  |  | (29,745) |  |  | (2,357) |  |  | (5,895) |  |  | (9,153) |  |  | (407,754) |  |  | (464,403) |
Depreciation and amortization |  |  | (136,146) |  |  | (108,806) |  |  | (130,829) |  |  | (161,790) |  |  | (30,537) |  |  | — |  |  | (568,108) |
General and administrative |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | (103,611) |  |  | (103,611) |
Acquisition and pursuit costs |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | (9,821) |  |  | (9,821) |
Gain on sales of real estate, net |  |  | 48,744 |  |  | 675 |  |  | 49,042 |  |  | 8,333 |  |  | 57,904 |  |  | — |  |  | 164,698 |
Loss on debt extinguishments |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | (46,020) |  |  | (46,020) |
Other income, net |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | 3,654 |  |  | 3,654 |
Income tax expense |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | (4,473) |  |  | (4,473) |
Less: HCP share of unconsolidated JV NOI |  |  | — |  |  | (37,800) |  |  | (5,998) |  |  | (1,401) |  |  | (1,570) |  |  | — |  |  | (46,769) |
Equity income from unconsolidated joint ventures |  |  | — |  |  | 4,226 |  |  | 2,927 |  |  | 3,350 |  |  | 857 |  |  | — |  |  | 11,360 |
Total discontinued operations |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | 265,755 |  |  | 265,755 |
Net income (loss) |  | $ | 319,507 |  | $ | 72,302 |  | $ | 204,842 |  | $ | 116,591 |  | $ | 228,954 |  | $ | (302,270) |  | $ | 639,926 |
For the year ended December 31, 2015:
|  |  |  |  |  | Life |  | Medical |  | Other |  | Corporate |  |  |  |
Segments |  | SH NNN |  | SHOP |  | Science |  | Office |  | Non-reportable |  | Non-segment |  | Total |
Rental revenues(1) |  | $ | 428,269 |  | $ | 518,264 |  | $ | 342,984 |  | $ | 415,351 |  | $ | 123,437 |  | $ | — |  | $ | 1,828,305 |
HCP share of unconsolidated JV revenues |  |  | — |  |  | 181,410 |  |  | 7,106 |  |  | 1,870 |  |  | 1,600 |  |  | — |  |  | 191,986 |
Less: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | — |
Operating expenses |  |  | (3,427) |  |  | (371,016) |  |  | (70,217) |  |  | (162,054) |  |  | (3,965) |  |  | — |  |  | (610,679) |
HCP share of unconsolidated JV operating expenses |  |  | — |  |  | (151,962) |  |  | (1,612) |  |  | (612) |  |  | (73) |  |  | — |  |  | (154,259) |
NOI |  |  | 424,842 |  |  | 176,696 |  |  | 278,261 |  |  | 254,555 |  |  | 120,999 |  |  | — |  |  | 1,255,353 |
Non-cash adjustments to NOI(2) |  |  | (9,716) |  |  | 34,045 |  |  | (10,392) |  |  | (4,933) |  |  | (2,356) |  |  | — |  |  | 6,648 |
Adjusted NOI |  |  | 415,126 |  |  | 210,741 |  |  | 267,869 |  |  | 249,622 |  |  | 118,643 |  |  | — |  |  | 1,262,001 |
Addback non-cash adjustments |  |  | 9,716 |  |  | (34,045) |  |  | 10,392 |  |  | 4,933 |  |  | 2,356 |  |  | — |  |  | (6,648) |
Interest income |  |  | — |  |  | — |  |  | — |  |  | — |  |  | 112,184 |  |  | — |  |  | 112,184 |
Interest expense |  |  | (16,899) |  |  | (31,869) |  |  | (2,878) |  |  | (9,603) |  |  | (9,745) |  |  | (408,602) |  |  | (479,596) |
Depreciation and amortization |  |  | (125,538) |  |  | (80,981) |  |  | (126,241) |  |  | (143,682) |  |  | (28,463) |  |  | — |  |  | (504,905) |
General and administrative |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | (95,965) |  |  | (95,965) |
Acquisition and pursuit costs |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | (27,309) |  |  | (27,309) |
Impairments, net |  |  | — |  |  | — |  |  | — |  |  | — |  |  | (108,349) |  |  | — |  |  | (108,349) |
Gain on sales of real estate, net |  |  | 6,325 |  |  | — |  |  | — |  |  | 52 |  |  | — |  |  | — |  |  | 6,377 |
Other income, net |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | 16,208 |  |  | 16,208 |
Income tax benefit |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | 9,807 |  |  | 9,807 |
Less: HCP share of unconsolidated JV NOI |  |  | — |  |  | (29,448) |  |  | (5,494) |  |  | (1,258) |  |  | (1,527) |  |  | — |  |  | (37,727) |
Equity (loss) income from unconsolidated joint ventures |  |  | — |  |  | (9,032) |  |  | 2,718 |  |  | 12,904 |  |  | — |  |  | — |  |  | 6,590 |
Total discontinued operations |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | (699,086) |  |  | (699,086) |
Net income (loss) |  | $ | 288,730 |  | $ | 25,366 |  | $ | 146,366 |  | $ | 112,968 |  | $ | 85,099 |  | $ | (1,204,947) |  | $ | (546,418) |
For the year ended December 31, 2014:
|  |  |  |  |  | Life |  | Medical |  | Other |  | Corporate |  |  |  |
Segments |  | SH NNN |  | SHOP |  | Science |  | Office |  | Non-reportable |  | Non-segment |  | Total |
Rental revenues(1) |  | $ | 538,113 |  | $ | 243,612 |  | $ | 314,114 |  | $ | 368,055 |  | $ | 99,316 |  | $ | — |  | $ | 1,563,210 |
HCP share of unconsolidated JV revenues |  |  | — |  |  | 57,740 |  |  | 6,888 |  |  | 1,825 |  |  | — |  |  | — |  |  | 66,453 |
Less: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Operating expenses |  |  | (3,629) |  |  | (163,650) |  |  | (63,080) |  |  | (147,144) |  |  | (3,791) |  |  | — |  |  | (381,294) |
HCP share of unconsolidated JV operating expenses |  |  | — |  |  | (49,571) |  |  | (1,749) |  |  | (571) |  |  | — |  |  | — |  |  | (51,891) |
NOI |  |  | 534,484 |  |  | 88,131 |  |  | 256,173 |  |  | 222,165 |  |  | 95,525 |  |  | — |  |  | 1,196,478 |
Non-cash adjustments to NOI(2) |  |  | (66,474) |  |  | 10,160 |  |  | (10,375) |  |  | (1,291) |  |  | (805) |  |  | — |  |  | (68,785) |
Adjusted NOI |  |  | 468,010 |  |  | 98,291 |  |  | 245,798 |  |  | 220,874 |  |  | 94,720 |  |  | — |  |  | 1,127,693 |
Addback non-cash adjustments |  |  | 66,474 |  |  | (10,160) |  |  | 10,375 |  |  | 1,291 |  |  | 805 |  |  | — |  |  | 68,785 |
Interest income |  |  | — |  |  | — |  |  | — |  |  | — |  |  | 73,623 |  |  | — |  |  | 73,623 |
Interest expense |  |  | (32,866) |  |  | (31,648) |  |  | (3,141) |  |  | (9,396) |  |  | (4,441) |  |  | (358,250) |  |  | (439,742) |
Depreciation and amortization |  |  | (158,881) |  |  | (42,153) |  |  | (111,552) |  |  | (124,141) |  |  | (18,284) |  |  | (5) |  |  | (455,016) |
General and administrative |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | (81,765) |  |  | (81,765) |
Acquisition and pursuit costs |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | (17,142) |  |  | (17,142) |
Gain on sales of real estate, net |  |  | 3,288 |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | 3,288 |
Other income, net |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | 9,252 |  |  | 9,252 |
Income tax benefit |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | 506 |  |  | 506 |
Less: HCP share of unconsolidated JV NOI |  |  | — |  |  | (8,169) |  |  | (5,139) |  |  | (1,254) |  |  | — |  |  | — |  |  | (14,562) |
Equity (loss) income from unconsolidated joint ventures |  |  | — |  |  | (4,110) |  |  | 2,834 |  |  | (2,329) |  |  | — |  |  | — |  |  | (3,605) |
Total discontinued operations |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | 665,276 |  |  | 665,276 |
Net income |  | $ | 346,025 |  | $ | 2,051 |  | $ | 139,175 |  | $ | 85,045 |  | $ | 146,423 |  | $ | 217,872 |  | $ | 936,591 |
| (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 and lease termination fees.
The following table summarizes the Company’s revenues by segment (in thousands):
|  | Year Ended
|  | December 31,
Segments |  | 2016 |  | 2015 |  | 2014
SH NNN |  | $ | 423,118 |  | $ | 428,269 |  | $ | 538,113
SHOP |  |  | 686,822 |  |  | 518,264 |  |  | 243,612
Life science |  |  | 358,537 |  |  | 342,984 |  |  | 314,114
Medical office |  |  | 446,280 |  |  | 415,351 |  |  | 368,055
Other non-reportable segments |  |  | 214,537 |  |  | 235,621 |  |  | 172,939
Total revenues |  | $ | 2,129,294 |  | $ | 1,940,489 |  | $ | 1,636,833
The following table summarizes the Company’s total assets by segment (in thousands):
|  | December 31, |
Segments |  | 2016 |  | 2015 |
SH NNN |  | $ | 3,871,720 |  | $ | 5,092,443 |
SHOP |  |  | 3,623,931 |  |  | 3,195,384 |
Life science |  |  | 4,029,500 |  |  | 3,682,308 |
Medical office |  |  | 3,737,939 |  |  | 3,436,884 |
Gross reportable segment assets |  |  | 15,263,090 |  |  | 15,407,019 |
Accumulated depreciation and amortization |  |  | (2,900,060) |  |  | (2,704,425) |
Net reportable segment assets |  |  | 12,363,030 |  |  | 12,702,594 |
Other non-reportable segment assets |  |  | 1,685,563 |  |  | 1,787,579 |
Assets held for sale and discontinued operations, net |  |  | 927,866 |  |  | 5,654,326 |
Other non-segment assets |  |  | 782,806 |  |  | 1,305,350 |
Total assets |  | $ | 15,759,265 |  | $ | 21,449,849 |
As a result of a change in reportable segments, the Company allocated goodwill to the new reporting units using a relative fair value approach. The Company completed a goodwill impairment assessment for all reporting units immediately prior to the reallocation and determined that no impairment existed at September 30, 2016. Additionally, the Company completed the required annual impairment test during the fourth quarter of 2016 and no impairment was recognized. At December 31, 2016, goodwill of $42 million was allocated to segment assets as follows: (i) SH NNN—$16 million, (ii) SHOP—$9 million, (iii) medical office—$11 million and (iv) other—$6 million. At December 31, 2015, goodwill of $47 million was allocated to segment assets as follows: (i) SH NNN—$21 million, (ii) SHOP—$9 million, (iii) medical office—$11 million and (iv) other—$6 million.

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- Definition The entire disclosure for reporting segments including data and tables. Reportable segments include those that meet any of the following quantitative thresholds a) it's reported revenue, including sales to external customers and intersegment sales or transfers is 10 percent or more of the combined revenue, internal and external, of all operating segments b) the absolute amount of its reported profit or loss is 10 percent or more of the greater, in absolute amount of 1) the combined reported profit of all operating segments that did not report a loss or 2) the combined reported loss of all operating segments that did report a loss c) its assets are 10 percent or more of the combined assets of all operating segments. + References Reference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 34 -URI http://asc.fasb.org/extlink&oid=68060357&loc=d3e8981-108599 Reference 2: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 41 -URI http://asc.fasb.org/extlink&oid=68060357&loc=d3e9038-108599 Reference 3: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 33 -URI http://asc.fasb.org/extlink&oid=68060357&loc=d3e8971-108599 Reference 4: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 12 -URI http://asc.fasb.org/extlink&oid=68060357&loc=d3e8595-108599 Reference 5: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 1 -URI http://asc.fasb.org/extlink&oid=68060357&loc=d3e8380-108599 Reference 6: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 32 -URI http://asc.fasb.org/extlink&oid=68060357&loc=d3e8933-108599 Reference 7: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 26 -URI http://asc.fasb.org/extlink&oid=68060357&loc=d3e8844-108599 Reference 8: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 35 -URI http://asc.fasb.org/extlink&oid=68060357&loc=d3e8984-108599 Reference 9: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 40 -URI http://asc.fasb.org/extlink&oid=68060357&loc=d3e9031-108599 Reference 10: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 42 -URI http://asc.fasb.org/extlink&oid=68060357&loc=d3e9054-108599 Reference 11: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 10 -URI http://asc.fasb.org/extlink&oid=68060357&loc=d3e8538-108599 Reference 12: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 29 -URI http://asc.fasb.org/extlink&oid=68060357&loc=d3e8864-108599 Reference 13: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 31 -URI http://asc.fasb.org/extlink&oid=68060357&loc=d3e8924-108599 Reference 14: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 30 -URI http://asc.fasb.org/extlink&oid=68060357&loc=d3e8906-108599 + Details
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