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Segment Disclosures | 9 Months Ended
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Sep. 30, 2017
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. Under the medical office and life science segments, the Company invests through the acquisition and development of medical office buildings (“MOBs”) and life science facilities, which generally require a greater level of property management. The Company’s senior housing facilities are managed utilizing triple-net leases and RIDEA structures. The Company has non-reportable segments that are comprised primarily of the Company’s debt investments, hospital properties and care homes in the United Kingdom (“U.K.”). The accounting policies of the segments are the same as those in Note 2 to the Consolidated Financial Statements in the Company’s 2016 Annual Report on Form 10-K filed with the SEC, as updated by Note 2 herein. During the year ended December 31, 2016, 17 senior housing triple-net facilities were transitioned to a RIDEA structure (reported in the Company’s SHOP segment). During the nine months ended September 30, 2017, four senior housing triple-net facilities were transferred to the Company’s SHOP segment, of which one was transitioned to a RIDEA structure. The Company evaluates performance based upon: (i) property net operating income from continuing operations (“NOI”) and (ii) Adjusted NOI of the combined consolidated and unconsolidated investments in each segment. NOI is defined as rental and related revenues, including tenant recoveries, resident fees and services, and income from DFLs, less property level operating expenses. Adjusted NOI is calculated as NOI after eliminating the effects of straight-line rents, DFL non-cash interest, amortization of market lease intangibles, non-refundable entrance fees, net of entrance fee amortization and lease termination fees and the impact of deferred community fee income and expense. The adjustments to NOI and resulting Adjusted NOI for SHOP have been restated for prior periods presented to conform to the current period presentation for the adjustment to exclude the impact of deferred community fee income and expense, resulting in recognition as cash is received and expenses are paid. 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. See Note 17 for other information regarding concentrations of credit risk. The following tables summarize information for the reportable segments (in thousands): For the three months ended September 30, 2017:
|  | Senior Housing Triple-Net |  | SHOP |  | Life Science |  | Medical Office |  | Other Non-reportable |  | Corporate Non-segment |  | Total
Rental revenues(1) |  | $ | 77,220 |  |  | $ | 126,040 |  |  | $ | 90,174 |  |  | $ | 119,847 |  |  | $ | 28,968 |  |  | $ | — |  |  | $ | 442,249 |
HCP share of unconsolidated JV revenues |  | — |  |  | 81,936 |  |  | 2,031 |  |  | 496 |  |  | 421 |  |  | — |  |  | 84,884 |
Operating expenses |  | (934 | ) |  | (86,821 | ) |  | (19,960 | ) |  | (46,486 | ) |  | (1,137 | ) |  | — |  |  | (155,338 | )
HCP share of unconsolidated JV operating expenses |  | — |  |  | (65,035 | ) |  | (433 | ) |  | (143 | ) |  | (20 | ) |  | — |  |  | (65,631 | )
NOI |  | 76,286 |  |  | 56,120 |  |  | 71,812 |  |  | 73,714 |  |  | 28,232 |  |  | — |  |  | 306,164 |
Adjustments to NOI(2) |  | (600 | ) |  | 4,551 |  |  | (751 | ) |  | (582 | ) |  | (1,283 | ) |  | — |  |  | 1,335 |
Adjusted NOI |  | 75,686 |  |  | 60,671 |  |  | 71,061 |  |  | 73,132 |  |  | 26,949 |  |  | — |  |  | 307,499 |
Addback adjustments |  | 600 |  |  | (4,551 | ) |  | 751 |  |  | 582 |  |  | 1,283 |  |  | — |  |  | (1,335 | )
Interest income |  | — |  |  | — |  |  | — |  |  | — |  |  | 11,774 |  |  | — |  |  | 11,774 |
Interest expense |  | (640 | ) |  | (933 | ) |  | (87 | ) |  | (126 | ) |  | (618 | ) |  | (68,924 | ) |  | (71,328 | )
Depreciation and amortization |  | (25,547 | ) |  | (24,884 | ) |  | (30,851 | ) |  | (42,047 | ) |  | (7,259 | ) |  | — |  |  | (130,588 | )
General and administrative |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | (23,523 | ) |  | (23,523 | )
Acquisition and pursuit costs |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | (580 | ) |  | (580 | )
Recoveries (impairments), net |  | — |  |  | — |  |  | — |  |  | — |  |  | (25,328 | ) |  | — |  |  | (25,328 | )
Gain (loss) on sales of real estate, net |  | (6 | ) |  | 5,180 |  |  | 8 |  |  | — |  |  | — |  |  | — |  |  | 5,182 |
Loss on debt extinguishments |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | (54,227 | ) |  | (54,227 | )
Other income (expense), net |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | (10,556 | ) |  | (10,556 | )
Income tax benefit (expense) |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | 5,481 |  |  | 5,481 |
Less: HCP share of unconsolidated JV NOI |  | — |  |  | (16,901 | ) |  | (1,598 | ) |  | (353 | ) |  | (401 | ) |  | — |  |  | (19,253 | )
Equity income (loss) from unconsolidated JVs |  | — |  |  | (245 | ) |  | 789 |  |  | 274 |  |  | 244 |  |  | — |  |  | 1,062 |
Net income (loss) |  | $ | 50,093 |  |  | $ | 18,337 |  |  | $ | 40,073 |  |  | $ | 31,462 |  |  | $ | 6,644 |  |  | $ | (152,329 | ) |  | $ | (5,720 | )
_______________________________________
(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, net, the deferral of community fees, net of amortization, lease termination fees and non-refundable entrance fees as the fees are collected by the Company’s CCRC JV, net of CCRC JV entrance fee amortization.
For the three months ended September 30, 2016:
|  | Senior Housing Triple-Net |  | SHOP |  | Life Science |  | Medical Office |  | Other Non-reportable |  | Corporate Non-segment |  | Total
Rental revenues(1) |  | $ | 104,262 |  |  | $ | 170,739 |  |  | $ | 90,847 |  |  | $ | 113,653 |  |  | $ | 30,574 |  |  | $ | — |  |  | $ | 510,075 |
HCP share of unconsolidated JV revenues |  | — |  |  | 50,973 |  |  | 1,929 |  |  | 502 |  |  | 410 |  |  | — |  |  | 53,814 |
Operating expenses |  | (1,794 | ) |  | (121,502 | ) |  | (18,487 | ) |  | (44,738 | ) |  | (1,193 | ) |  | — |  |  | (187,714 | )
HCP share of unconsolidated JV operating expenses |  | — |  |  | (42,463 | ) |  | (406 | ) |  | (148 | ) |  | (20 | ) |  | — |  |  | (43,037 | )
NOI |  | 102,468 |  |  | 57,747 |  |  | 73,883 |  |  | 69,269 |  |  | 29,771 |  |  | — |  |  | 333,138 |
Adjustments to NOI(2) |  | (1,003 | ) |  | 4,081 |  |  | (314 | ) |  | (814 | ) |  | (1,140 | ) |  | — |  |  | 810 |
Adjusted NOI |  | 101,465 |  |  | 61,828 |  |  | 73,569 |  |  | 68,455 |  |  | 28,631 |  |  | — |  |  | 333,948 |
Addback adjustments |  | 1,003 |  |  | (4,081 | ) |  | 314 |  |  | 814 |  |  | 1,140 |  |  | — |  |  | (810 | )
Interest income |  | — |  |  | — |  |  | — |  |  | — |  |  | 20,482 |  |  | — |  |  | 20,482 |
Interest expense |  | (644 | ) |  | (8,130 | ) |  | (634 | ) |  | (1,608 | ) |  | (2,260 | ) |  | (104,584 | ) |  | (117,860 | )
Depreciation and amortization |  | (34,030 | ) |  | (26,837 | ) |  | (31,967 | ) |  | (41,111 | ) |  | (7,462 | ) |  | — |  |  | (141,407 | )
General and administrative |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | (34,781 | ) |  | (34,781 | )
Acquisition and pursuit costs |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | (2,763 | ) |  | (2,763 | )
Gain (loss) on sales of real estate, net |  | — |  |  | — |  |  | — |  |  | (9 | ) |  | — |  |  | — |  |  | (9 | )
Other income (expense), net |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | 1,432 |  |  | 1,432 |
Income tax benefit (expense) |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | 424 |  |  | 424 |
Less: HCP share of unconsolidated JV NOI |  | — |  |  | (8,510 | ) |  | (1,523 | ) |  | (354 | ) |  | (390 | ) |  | — |  |  | (10,777 | )
Equity income (loss) from unconsolidated JVs |  | — |  |  | (3,517 | ) |  | 778 |  |  | 462 |  |  | 224 |  |  | — |  |  | (2,053 | )
Discontinued operations |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | 108,213 |  |  | 108,213 |
Net income (loss) |  | $ | 67,794 |  |  | $ | 10,753 |  |  | $ | 40,537 |  |  | $ | 26,649 |  |  | $ | 40,365 |  |  | $ | (32,059 | ) |  | $ | 154,039 |
_______________________________________
(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, net, the deferral of community fees, net of amortization, lease termination fees and non-refundable entrance fees as the fees are collected by the Company’s CCRC JV, net of CCRC JV entrance fee amortization.
For the nine months ended September 30, 2017:
|  | Senior Housing Triple-Net |  | SHOP |  | Life Science |  | Medical Office |  | Other Non-reportable |  | Corporate Non-segment |  | Total
Rental revenues(1) |  | $ | 255,332 |  |  | $ | 391,684 |  |  | $ | 262,224 |  |  | $ | 357,381 |  |  | $ | 87,524 |  |  | $ | — |  |  | $ | 1,354,145 |
HCP share of unconsolidated JV revenues |  | — |  |  | 239,667 |  |  | 5,975 |  |  | 1,481 |  |  | 1,256 |  |  | — |  |  | 248,379 |
Operating expenses |  | (2,927 | ) |  | (267,226 | ) |  | (56,024 | ) |  | (137,930 | ) |  | (3,475 | ) |  | — |  |  | (467,582 | )
HCP share of unconsolidated JV operating expenses |  | — |  |  | (190,049 | ) |  | (1,234 | ) |  | (431 | ) |  | (58 | ) |  | — |  |  | (191,772 | )
NOI |  | 252,405 |  |  | 174,076 |  |  | 210,941 |  |  | 220,501 |  |  | 85,247 |  |  | — |  |  | 943,170 |
Adjustments to NOI(2) |  | (2,844 | ) |  | 12,229 |  |  | (1,094 | ) |  | (2,321 | ) |  | (3,164 | ) |  | — |  |  | 2,806 |
Adjusted NOI |  | 249,561 |  |  | 186,305 |  |  | 209,847 |  |  | 218,180 |  |  | 82,083 |  |  | — |  |  | 945,976 |
Addback adjustments |  | 2,844 |  |  | (12,229 | ) |  | 1,094 |  |  | 2,321 |  |  | 3,164 |  |  | — |  |  | (2,806 | )
Interest income |  | — |  |  | — |  |  | — |  |  | — |  |  | 50,974 |  |  | — |  |  | 50,974 |
Interest expense |  | (1,898 | ) |  | (6,950 | ) |  | (288 | ) |  | (382 | ) |  | (3,541 | ) |  | (222,775 | ) |  | (235,834 | )
Depreciation and amortization |  | (77,478 | ) |  | (75,657 | ) |  | (95,648 | ) |  | (127,261 | ) |  | (21,849 | ) |  | — |  |  | (397,893 | )
General and administrative |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | (67,287 | ) |  | (67,287 | )
Acquisition and pursuit costs |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | (2,504 | ) |  | (2,504 | )
Recoveries (impairments), net |  | — |  |  | — |  |  | — |  |  | — |  |  | (82,010 | ) |  | — |  |  | (82,010 | )
Gain (loss) on sales of real estate, net |  | 268,227 |  |  | 5,313 |  |  | 45,922 |  |  | (406 | ) |  | 3,796 |  |  | — |  |  | 322,852 |
Loss on debt extinguishments |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | (54,227 | ) |  | (54,227 | )
Other income (expense), net |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | 40,723 |  |  | 40,723 |
Income tax benefit (expense) |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | 14,630 |  |  | 14,630 |
Less: HCP share of unconsolidated JV NOI |  | — |  |  | (49,618 | ) |  | (4,741 | ) |  | (1,050 | ) |  | (1,198 | ) |  | — |  |  | (56,607 | )
Equity income (loss) from unconsolidated JVs |  | — |  |  | 683 |  |  | 2,322 |  |  | 846 |  |  | 720 |  |  | — |  |  | 4,571 |
Net income (loss) |  | $ | 441,256 |  |  | $ | 47,847 |  |  | $ | 158,508 |  |  | $ | 92,248 |  |  | $ | 32,139 |  |  | $ | (291,440 | ) |  | $ | 480,558 |
_______________________________________
(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, net, the deferral of community fees, net of amortization, lease termination fees and non-refundable entrance fees as the fees are collected by the Company’s CCRC JV, net of CCRC JV entrance fee amortization.
For the nine months ended September 30, 2016:
|  | Senior Housing Triple-Net |  | SHOP |  | Life Science |  | Medical Office |  | Other Non-reportable |  | Corporate Non-segment |  | Total
Rental revenues(1) |  | $ | 319,989 |  |  | $ | 500,704 |  |  | $ | 269,994 |  |  | $ | 331,881 |  |  | $ | 95,483 |  |  | $ | — |  |  | $ | 1,518,051 |
HCP share of unconsolidated JV revenues |  | — |  |  | 152,424 |  |  | 5,628 |  |  | 1,503 |  |  | 1,224 |  |  | — |  |  | 160,779 |
Operating expenses |  | (5,521 | ) |  | (350,949 | ) |  | (53,191 | ) |  | (129,715 | ) |  | (3,375 | ) |  | — |  |  | (542,751 | )
HCP share of unconsolidated JV operating expenses |  | — |  |  | (125,244 | ) |  | (1,173 | ) |  | (452 | ) |  | (30 | ) |  | — |  |  | (126,899 | )
NOI |  | 314,468 |  |  | 176,935 |  |  | 221,258 |  |  | 203,217 |  |  | 93,302 |  |  | — |  |  | 1,009,180 |
Adjustments to NOI(2) |  | (8,464 | ) |  | 14,648 |  |  | (1,545 | ) |  | (2,361 | ) |  | (1,926 | ) |  | — |  |  | 352 |
Adjusted NOI |  | 306,004 |  |  | 191,583 |  |  | 219,713 |  |  | 200,856 |  |  | 91,376 |  |  | — |  |  | 1,009,532 |
Addback adjustments |  | 8,464 |  |  | (14,648 | ) |  | 1,545 |  |  | 2,361 |  |  | 1,926 |  |  | — |  |  | (352 | )
Interest income |  | — |  |  | — |  |  | — |  |  | — |  |  | 71,298 |  |  | — |  |  | 71,298 |
Interest expense |  | (8,859 | ) |  | (23,818 | ) |  | (1,904 | ) |  | (4,899 | ) |  | (7,067 | ) |  | (314,708 | ) |  | (361,255 | )
Depreciation and amortization |  | (101,737 | ) |  | (78,124 | ) |  | (97,640 | ) |  | (120,432 | ) |  | (23,248 | ) |  | — |  |  | (421,181 | )
General and administrative |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | (83,011 | ) |  | (83,011 | )
Acquisition and pursuit costs |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | (6,061 | ) |  | (6,061 | )
Gain (loss) on sales of real estate, net |  | 23,940 |  |  | — |  |  | 29,428 |  |  | 8,333 |  |  | 57,904 |  |  | — |  |  | 119,605 |
Other income (expense), net |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | 5,064 |  |  | 5,064 |
Income tax benefit (expense) |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | (1,101 | ) |  | (1,101 | )
Less: HCP share of unconsolidated JV NOI |  | — |  |  | (27,180 | ) |  | (4,455 | ) |  | (1,051 | ) |  | (1,194 | ) |  | — |  |  | (33,880 | )
Equity income (loss) from unconsolidated JVs |  | — |  |  | (8,477 | ) |  | 2,263 |  |  | 1,541 |  |  | 645 |  |  | — |  |  | (4,028 | )
Discontinued operations |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | 283,996 |  |  | 283,996 |
Net income (loss) |  | $ | 227,812 |  |  | $ | 39,336 |  |  | $ | 148,950 |  |  | $ | 86,709 |  |  | $ | 191,640 |  |  | $ | (115,821 | ) |  | $ | 578,626 |
_______________________________________
(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, net, the deferral of community fees, net of amortization, lease termination fees and non-refundable entrance fees as the fees are collected by the Company’s CCRC JV, net of CCRC JV entrance fee amortization.
The following table summarizes the Company’s revenues by segment (in thousands):
|  | Three Months Ended September 30, |  | Nine Months Ended September 30,
Segment |  | 2017 |  | 2016 |  | 2017 |  | 2016
Senior housing triple-net |  | $ | 77,220 |  |  | $ | 104,262 |  |  | $ | 255,332 |  |  | $ | 319,989 |
SHOP |  | 126,040 |  |  | 170,739 |  |  | 391,684 |  |  | 500,704 |
Life science |  | 90,174 |  |  | 90,847 |  |  | 262,224 |  |  | 269,994 |
Medical office |  | 119,847 |  |  | 113,653 |  |  | 357,381 |  |  | 331,881 |
Other non-reportable segments |  | 40,742 |  |  | 51,056 |  |  | 138,498 |  |  | 166,781 |
Total revenues |  | $ | 454,023 |  |  | $ | 530,557 |  |  | $ | 1,405,119 |  |  | $ | 1,589,349 |
See Notes 3 and 4 for significant transactions impacting the Company’s segment assets during the periods presented.

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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 -URI http://asc.fasb.org/topic&trid=2134510 + Details
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