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Segment Disclosures | 6 Months Ended
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Jun. 30, 2019
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. The Company has non-reportable segments that are comprised primarily of the Company’s debt investments, hospital properties, unconsolidated joint ventures, and U.K. investments. The accounting policies of the segments are the same as those in Note 2 to the Consolidated Financial Statements in the Company’s 2018 Annual Report on Form 10-K filed with the SEC, as updated by Note 2 herein. 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 three and six months ended June 30, 2019, 21 and 39 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. During each of the three and six months ended June 30, 2018, 10 senior housing triple-net facilities were transferred to the Company’s SHOP segment. 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 upon 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 15 for other information regarding concentrations of credit risk. The following tables summarize information for the reportable segments (in thousands): For the three months ended June 30, 2019:
|  | Senior Housing Triple-Net |  | SHOP |  | Life Science |  | Medical Office |  | Other Non-reportable |  | Corporate Non-segment |  | Total
Real estate revenues(1) |  | $ | 49,866 |  |  | $ | 177,001 |  |  | $ | 107,596 |  |  | $ | 141,927 |  |  | $ | 12,763 |  |  | $ | — |  |  | $ | 489,153 |
Operating expenses |  | (866 | ) |  | (137,460 | ) |  | (25,480 | ) |  | (50,176 | ) |  | (11 | ) |  | — |  |  | (213,993 | )
NOI |  | 49,000 |  |  | 39,541 |  |  | 82,116 |  |  | 91,751 |  |  | 12,752 |  |  | — |  |  | 275,160 |
Adjustments to NOI(2) |  | 4,807 |  |  | 841 |  |  | (7,614 | ) |  | (1,203 | ) |  | 219 |  |  | — |  |  | (2,950 | )
Adjusted NOI |  | 53,807 |  |  | 40,382 |  |  | 74,502 |  |  | 90,548 |  |  | 12,971 |  |  | — |  |  | 272,210 |
Addback adjustments |  | (4,807 | ) |  | (841 | ) |  | 7,614 |  |  | 1,203 |  |  | (219 | ) |  | — |  |  | 2,950 |
Interest income |  | — |  |  | — |  |  | — |  |  | — |  |  | 2,414 |  |  | — |  |  | 2,414 |
Interest expense |  | (206 | ) |  | (1,326 | ) |  | (70 | ) |  | (109 | ) |  | — |  |  | (55,231 | ) |  | (56,942 | )
Depreciation and amortization |  | (15,693 | ) |  | (52,242 | ) |  | (41,431 | ) |  | (54,096 | ) |  | (1,834 | ) |  | — |  |  | (165,296 | )
General and administrative |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | (27,120 | ) |  | (27,120 | )
Transaction costs |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | (1,337 | ) |  | (1,337 | )
Recoveries (impairments), net |  | (15,485 | ) |  | (52,963 | ) |  | — |  |  | (90 | ) |  | — |  |  | — |  |  | (68,538 | )
Gain (loss) on sales of real estate, net |  | — |  |  | 4,691 |  |  | 3,816 |  |  | 2,941 |  |  | — |  |  | — |  |  | 11,448 |
Loss on debt extinguishments |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | (1,135 | ) |  | (1,135 | )
Other income (expense), net |  | — |  |  | — |  |  | — |  |  | — |  |  | 12,817 |  |  | 8,191 |  |  | 21,008 |
Income tax benefit (expense) |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | 1,864 |  |  | 1,864 |
Equity income (loss) from unconsolidated joint ventures |  | — |  |  | — |  |  | — |  |  | — |  |  | (1,506 | ) |  | — |  |  | (1,506 | )
Net income (loss) |  | $ | 17,616 |  |  | $ | (62,299 | ) |  | $ | 44,431 |  |  | $ | 40,397 |  |  | $ | 24,643 |  |  | $ | (74,768 | ) |  | $ | (9,980 | )
_______________________________________
(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 three months ended June 30, 2018:
|  | Senior Housing Triple-Net |  | SHOP |  | Life Science |  | Medical Office |  | Other Non-reportable |  | Corporate Non-segment |  | Total
Real estate revenues(1) |  | $ | 70,713 |  |  | $ | 138,352 |  |  | $ | 101,031 |  |  | $ | 134,574 |  |  | $ | 23,434 |  |  | $ | — |  |  | $ | 468,104 |
Operating expenses |  | (791 | ) |  | (101,767 | ) |  | (22,732 | ) |  | (48,528 | ) |  | (48 | ) |  | — |  |  | (173,866 | )
NOI |  | 69,922 |  |  | 36,585 |  |  | 78,299 |  |  | 86,046 |  |  | 23,386 |  |  | — |  |  | 294,238 |
Adjustments to NOI(2) |  | 1,006 |  |  | (124 | ) |  | (2,233 | ) |  | (1,831 | ) |  | (480 | ) |  | — |  |  | (3,662 | )
Adjusted NOI |  | 70,928 |  |  | 36,461 |  |  | 76,066 |  |  | 84,215 |  |  | 22,906 |  |  | — |  |  | 290,576 |
Addback adjustments |  | (1,006 | ) |  | 124 |  |  | 2,233 |  |  | 1,831 |  |  | 480 |  |  | — |  |  | 3,662 |
Interest income |  | — |  |  | — |  |  | — |  |  | — |  |  | 1,447 |  |  | — |  |  | 1,447 |
Interest expense |  | (607 | ) |  | (990 | ) |  | (80 | ) |  | (119 | ) |  | (742 | ) |  | (70,500 | ) |  | (73,038 | )
Depreciation and amortization |  | (21,251 | ) |  | (28,002 | ) |  | (35,269 | ) |  | (48,098 | ) |  | (10,672 | ) |  | — |  |  | (143,292 | )
General and administrative |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | (22,514 | ) |  | (22,514 | )
Transaction costs |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | (2,404 | ) |  | (2,404 | )
Recoveries (impairments), net |  | (6,273 | ) |  | — |  |  | (7,639 | ) |  | — |  |  | — |  |  | — |  |  | (13,912 | )
Gain (loss) on sales of real estate, net |  | (23,039 | ) |  | 48,252 |  |  | — |  |  | — |  |  | 20,851 |  |  | — |  |  | 46,064 |
Other income (expense), net |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | 1,786 |  |  | 1,786 |
Income tax benefit (expense) |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | 4,654 |  |  | 4,654 |
Equity income (loss) from unconsolidated joint ventures |  | — |  |  | — |  |  | — |  |  | — |  |  | (101 | ) |  | — |  |  | (101 | )
Net income (loss) |  | $ | 18,752 |  |  | $ | 55,845 |  |  | $ | 35,311 |  |  | $ | 37,829 |  |  | $ | 34,169 |  |  | $ | (88,978 | ) |  | $ | 92,928 |
_______________________________________
(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 six months ended June 30, 2019:
|  | Senior Housing Triple-Net |  | SHOP |  | Life Science |  | Medical Office |  | Other Non-reportable |  | Corporate Non-segment |  | Total
Real estate revenues(1) |  | $ | 108,758 |  |  | $ | 303,182 |  |  | $ | 202,068 |  |  | $ | 284,122 |  |  | $ | 25,464 |  |  | $ | — |  |  | $ | 923,594 |
Operating expenses |  | (1,859 | ) |  | (234,407 | ) |  | (47,472 | ) |  | (99,163 | ) |  | (19 | ) |  | — |  |  | (382,920 | )
NOI |  | 106,899 |  |  | 68,775 |  |  | 154,596 |  |  | 184,959 |  |  | 25,445 |  |  | — |  |  | 540,674 |
Adjustments to NOI(2) |  | 5,371 |  |  | 1,993 |  |  | (10,091 | ) |  | (2,974 | ) |  | 413 |  |  | — |  |  | (5,288 | )
Adjusted NOI |  | 112,270 |  |  | 70,768 |  |  | 144,505 |  |  | 181,985 |  |  | 25,858 |  |  | — |  |  | 535,386 |
Addback adjustments |  | (5,371 | ) |  | (1,993 | ) |  | 10,091 |  |  | 2,974 |  |  | (413 | ) |  | — |  |  | 5,288 |
Interest income |  | — |  |  | — |  |  | — |  |  | — |  |  | 4,127 |  |  | — |  |  | 4,127 |
Interest expense |  | (795 | ) |  | (1,989 | ) |  | (143 | ) |  | (221 | ) |  | — |  |  | (103,121 | ) |  | (106,269 | )
Depreciation and amortization |  | (32,376 | ) |  | (76,328 | ) |  | (77,677 | ) |  | (107,198 | ) |  | (3,668 | ) |  | — |  |  | (297,247 | )
General and administrative |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | (48,475 | ) |  | (48,475 | )
Transaction costs |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | (5,855 | ) |  | (5,855 | )
Recoveries (impairments), net |  | (15,485 | ) |  | (52,963 | ) |  | — |  |  | (8,948 | ) |  | — |  |  | — |  |  | (77,396 | )
Gain (loss) on sales of real estate, net |  | 3,557 |  |  | 9,314 |  |  | 3,738 |  |  | 2,883 |  |  | — |  |  | — |  |  | 19,492 |
Loss on debt extinguishments |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | (1,135 | ) |  | (1,135 | )
Other income (expense), net |  | — |  |  | — |  |  | — |  |  | — |  |  | 12,817 |  |  | 11,324 |  |  | 24,141 |
Income tax benefit (expense) |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | 5,322 |  |  | 5,322 |
Equity income (loss) from unconsolidated joint ventures |  | — |  |  | — |  |  | — |  |  | — |  |  | (2,369 | ) |  | — |  |  | (2,369 | )
Net income (loss) |  | $ | 61,800 |  |  | $ | (53,191 | ) |  | $ | 80,514 |  |  | $ | 71,475 |  |  | $ | 36,352 |  |  | $ | (141,940 | ) |  | $ | 55,010 |
_______________________________________
(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 six months ended June 30, 2018:
|  | Senior Housing Triple-Net |  | SHOP |  | Life Science |  | Medical Office |  | Other Non-reportable |  | Corporate Non-segment |  | Total
Real estate revenues(1) |  | $ | 145,003 |  |  | $ | 283,022 |  |  | $ | 200,653 |  |  | $ | 267,794 |  |  | $ | 44,464 |  |  | $ | — |  |  | $ | 940,936 |
Operating expenses |  | (1,837 | ) |  | (203,513 | ) |  | (44,541 | ) |  | (96,406 | ) |  | (121 | ) |  | — |  |  | (346,418 | )
NOI |  | 143,166 |  |  | 79,509 |  |  | 156,112 |  |  | 171,388 |  |  | 44,343 |  |  | — |  |  | 594,518 |
Adjustments to NOI(2) |  | (858 | ) |  | (1,732 | ) |  | (5,984 | ) |  | (3,764 | ) |  | (1,011 | ) |  | — |  |  | (13,349 | )
Adjusted NOI |  | 142,308 |  |  | 77,777 |  |  | 150,128 |  |  | 167,624 |  |  | 43,332 |  |  | — |  |  | 581,169 |
Addback adjustments |  | 858 |  |  | 1,732 |  |  | 5,984 |  |  | 3,764 |  |  | 1,011 |  |  | — |  |  | 13,349 |
Interest income |  | — |  |  | — |  |  | — |  |  | — |  |  | 7,812 |  |  | — |  |  | 7,812 |
Interest expense |  | (1,207 | ) |  | (1,979 | ) |  | (162 | ) |  | (239 | ) |  | (1,469 | ) |  | (143,084 | ) |  | (148,140 | )
Depreciation and amortization |  | (43,157 | ) |  | (55,630 | ) |  | (71,350 | ) |  | (95,295 | ) |  | (21,110 | ) |  | — |  |  | (286,542 | )
General and administrative |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | (51,689 | ) |  | (51,689 | )
Transaction costs |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | (4,599 | ) |  | (4,599 | )
Recoveries (impairments), net |  | (6,273 | ) |  | — |  |  | (7,639 | ) |  | — |  |  | — |  |  | — |  |  | (13,912 | )
Gain (loss) on sales of real estate, net |  | (23,039 | ) |  | 69,067 |  |  | — |  |  | — |  |  | 20,851 |  |  | — |  |  | 66,879 |
Other income (expense), net |  | — |  |  | — |  |  | — |  |  | — |  |  | (40,567 | ) |  | 1,946 |  |  | (38,621 | )
Income tax benefit (expense) |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | 9,990 |  |  | 9,990 |
Equity income (loss) from unconsolidated joint ventures |  | — |  |  | — |  |  | — |  |  | — |  |  | 469 |  |  | — |  |  | 469 |
Net income (loss) |  | $ | 69,490 |  |  | $ | 90,967 |  |  | $ | 76,961 |  |  | $ | 75,854 |  |  | $ | 10,329 |  |  | $ | (187,436 | ) |  | $ | 136,165 |
_______________________________________
(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):
|  | Three Months Ended June 30, |  | Six Months Ended June 30,
Segment |  | 2019 |  | 2018 |  | 2019 |  | 2018
Senior housing triple-net |  | $ | 49,866 |  |  | $ | 70,713 |  |  | $ | 108,758 |  |  | $ | 145,003 |
SHOP |  | 177,001 |  |  | 138,352 |  |  | 303,182 |  |  | 283,022 |
Life science |  | 107,596 |  |  | 101,031 |  |  | 202,068 |  |  | 200,653 |
Medical office |  | 141,927 |  |  | 134,574 |  |  | 284,122 |  |  | 267,794 |
Other non-reportable segments |  | 15,177 |  |  | 24,881 |  |  | 29,591 |  |  | 52,276 |
Total revenues |  | $ | 491,567 |  |  | $ | 469,551 |  |  | $ | 927,721 |  |  | $ | 948,748 |
See Note 3 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://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -URI http://asc.fasb.org/topic&trid=2134510 + Details
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