SEGMENT INFORMATION

6 Months Ended

Jun. 30, 2019

NOTE 15—SEGMENT INFORMATION

As of June 30, 2019, we operated through three reportable business segments: triple-net leased properties, senior living operations and office operations. In our triple-net leased properties segment, we invest in and own seniors housing and healthcare properties throughout the United States and the United Kingdom and lease those properties to healthcare operating companies under “triple-net” or “absolute-net” leases that obligate the tenants to pay all property-related expenses. In our senior living operations segment, we invest in seniors housing communities throughout the United States and Canada and engage independent operators, such as Atria, Sunrise and ESL, to manage those communities. In our office operations segment, we primarily acquire, own, develop, lease and manage MOBs and research and innovation centers throughout the United States. Information provided for “all other” includes income from loans and investments and other miscellaneous income and various corporate-level expenses not directly attributable to any of our three reportable business segments. Assets included in “all other” consist primarily of corporate assets, including cash, restricted cash, loans receivable and investments, and miscellaneous accounts receivable.

Our chief operating decision makers evaluate performance of the combined properties in each reportable business segment and determine how to allocate resources to those segments, in significant part, based on segment NOI and related measures. We define segment NOI as total revenues, less interest and other income, property-level operating expenses and office building services costs. We consider segment NOI useful because it allows investors, analysts and our management to measure unlevered property-level operating results and to compare our operating results to the operating results of other real estate companies between periods on a consistent basis. In order to facilitate a clear understanding of our historical consolidated operating results, segment NOI should be examined in conjunction with net income attributable to common stockholders as presented in our Consolidated Financial Statements and other financial data included elsewhere in this Quarterly Report on Form 10-Q.

Interest expense, depreciation and amortization, general, administrative and professional fees, income tax expense and other non-property specific revenues and expenses are not allocated to individual reportable business segments for purposes of assessing segment performance. There are no intersegment sales or transfers.

Summary information by reportable business segment is as follows:



	For the Three Months Ended June 30, 2019
	Triple-Net Leased Properties			Senior Living Operations			Office Operations		All Other			Total
	(In thousands)
Revenues:
Rental income	$	196,382		$	—		$	202,188	$	—		$	398,570
Resident fees and services	—			520,725			—		—			520,725
Office building and other services revenue	—			—			1,850		841			2,691
Income from loans and investments	—			—			—		19,529			19,529
Interest and other income	—			—			—		9,202			9,202
Total revenues	$	196,382		$	520,725		$	204,038	$	29,572		$	950,717

Total revenues	$	196,382		$	520,725		$	204,038	$	29,572		$	950,717
Less:
Interest and other income	—			—			—		9,202			9,202
Property-level operating expenses	6,321			366,837			62,743		—			435,901
Office building services costs	—			—			515		—			515
Segment NOI	190,061			153,888			140,780		20,370			505,099
(Loss) income from unconsolidated entities	(1,285		)	(549		)	235		(930		)	(2,529		)
Segment profit	$	188,776		$	153,339		$	141,015	$	19,440		502,570
Interest and other income												9,202
Interest expense												(110,369		)
Depreciation and amortization												(226,187		)
General, administrative and professional fees												(43,079		)
Loss on extinguishment of debt, net												(4,022		)
Merger-related expenses and deal costs												(4,600		)
Other												11,481
Gain on real estate dispositions												19,150
Income tax benefit												57,752
Income from continuing operations												211,898
Discontinued operations												—
Net income												211,898
Net income attributable to noncontrolling interests												1,369
Net income attributable to common stockholders												$	210,529



	For the Three Months Ended June 30, 2018
	Triple-Net Leased Properties			Senior Living Operations			Office Operations		All Other			Total
	(In thousands)
Revenues:
Rental income	$	167,870		$	—		$	192,392	$	—		$	360,262
Resident fees and services	—			518,989			—		—			518,989
Office building and other services revenue	1,177			—			1,977		1,135			4,289
Income from loans and investments	—			—			—		56,417			56,417
Interest and other income	—			—			—		2,347			2,347
Total revenues	$	169,047		$	518,989		$	194,369	$	59,899		$	942,304

Total revenues	$	169,047		$	518,989		$	194,369	$	59,899		$	942,304
Less:
Interest and other income	—			—			—		2,347			2,347
Property-level operating expenses	—			361,112			60,301		—			421,413
Office building services costs	—			—			534		—			534
Segment NOI	169,047			157,877			133,534		57,552			518,010
(Loss) income from unconsolidated entities	(4,694		)	(1,714		)	885		(848		)	(6,371		)
Segment profit	$	164,353		$	156,163		$	134,419	$	56,704		511,639
Interest and other income												2,347
Interest expense												(113,029		)
Depreciation and amortization												(223,634		)
General, administrative and professional fees												(36,656		)
Gain on extinguishment of debt, net												93
Merger-related expenses and deal costs												(4,494		)
Other												(3,527		)
Gain on real estate dispositions												35,827
Income tax benefit												734
Income from continuing operations												169,300
Discontinued operations												—
Net income												169,300
Net income attributable to noncontrolling interests												2,781
Net income attributable to common stockholders												$	166,519



	For the Six Months Ended June 30, 2019
	Triple-Net Leased Properties			Senior Living Operations			Office Operations		All Other			Total
	(In thousands)
Revenues:
Rental income	$	396,450		$	—		$	403,616	$	—		$	800,066
Resident fees and services	—			1,042,172			—		—			1,042,172
Office building and other services revenue	—			—			3,626		1,583			5,209
Income from loans and investments	—			—			—		36,655			36,655
Interest and other income	—			—			—		9,489			9,489
Total revenues	$	396,450		$	1,042,172		$	407,242	$	47,727		$	1,893,591

Total revenues	$	396,450		$	1,042,172		$	407,242	$	47,727		$	1,893,591
Less:
Interest and other income	—			—			—		9,489			9,489
Property-level operating expenses	13,754			727,823			124,828		—			866,405
Office building services costs	—			—			1,148		—			1,148
Segment NOI	382,696			314,349			281,266		38,238			1,016,549
(Loss) income from unconsolidated entities	(777		)	(1,483		)	464		(1,679		)	(3,475		)
Segment profit	$	381,919		$	312,866		$	281,730	$	36,559		1,013,074
Interest and other income												9,489
Interest expense												(220,988		)
Depreciation and amortization												(462,107		)
General, administrative and professional fees												(83,839		)
Loss on extinguishment of debt, net												(4,427		)
Merger-related expenses and deal costs												(6,780		)
Other												11,458
Gain on real estate dispositions												24,597
Income tax benefit												59,009
Income from continuing operations												339,486
Discontinued operations												—
Net income												339,486
Net income attributable to noncontrolling interests												3,172
Net income attributable to common stockholders												$	336,314



	For the Six Months Ended June 30, 2018
	Triple-Net Leased Properties			Senior Living Operations			Office Operations		All Other			Total
	(In thousands)
Revenues:
Rental income	$	358,511		$	—		$	386,560	$	—		$	745,071
Resident fees and services	—			1,033,742			—		—			1,033,742
Office building and other services revenue	2,320			—			3,610		1,687			7,617
Income from loans and investments	—			—			—		87,598			87,598
Interest and other income	—			—			—		11,981			11,981
Total revenues	$	360,831		$	1,033,742		$	390,170	$	101,266		$	1,886,009

Total revenues	$	360,831		$	1,033,742		$	390,170	$	101,266		$	1,886,009
Less:
Interest and other income	—			—			—		11,981			11,981
Property-level operating expenses	—			713,332			120,994		—			834,326
Office building services costs	—			—			649		—			649
Segment NOI	360,831			320,410			268,527		89,285			1,039,053
(Loss) income from unconsolidated entities	(43,349		)	(2,354		)	265		(1,672		)	(47,110		)
Segment profit	$	317,482		$	318,056		$	268,792	$	87,613		991,943
Interest and other income												11,981
Interest expense												(224,392		)
Depreciation and amortization												(456,784		)
General, administrative and professional fees												(73,830		)
Loss on extinguishment of debt, net												(10,884		)
Merger-related expenses and deal costs												(21,830		)
Other												(6,647		)
Gain on real estate dispositions												35,875
Income tax benefit												3,976
Income from continuing operations												249,408
Discontinued operations												(10		)
Net income												249,398
Net income attributable to noncontrolling interests												4,176
Net income attributable to common stockholders												$	245,222

Capital expenditures, including investments in real estate property and development project expenditures, by reportable business segment are as follows:



	For the Three Months Ended June 30,				For the Six Months Ended June 30,
	2019		2018		2019		2018
	(In thousands)
Capital expenditures:
Triple-net leased properties	$	5,656	$	15,340	$	14,247	$	21,008
Senior living operations	37,494		24,177		64,453		54,754
Office operations	252,792		64,495		301,946		134,206
Total capital expenditures	$	295,942	$	104,012	$	380,646	$	209,968

Our portfolio of properties and mortgage loan and other investments are located in the United States, Canada and the United Kingdom. Revenues are attributed to an individual country based on the location of each property. Geographic information regarding our operations is as follows:



	For the Three Months Ended June 30,				For the Six Months Ended June 30,
	2019		2018		2019		2018
	(In thousands)
Revenues:
United States	$	896,083	$	887,265	$	1,784,364	$	1,774,975
Canada	47,723		47,750		95,320		96,321
United Kingdom	6,911		7,289		13,907		14,713
Total revenues	$	950,717	$	942,304	$	1,893,591	$	1,886,009



	As of June 30, 2019		As of December 31, 2018
	(In thousands)
Net real estate property:
United States	$	18,985,362	$	18,861,163
Canada	988,987		963,588
United Kingdom	261,435		268,906
Total net real estate property	$	20,235,784	$	20,093,657