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Segment Disclosures
 3 Months Ended
Mar. 31, 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 months ended March 31, 2019, 18 senior housing triple-net facilities 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 the three months ended March 31, 2018, there were no transfers of assets between segments. 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: (i) property NOI and (ii) 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, if any, 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 March 31, 2019:
 
 
Senior Housing Triple-Net
 
SHOP
 
Life Science
 
Medical Office
 
Other Non-reportable
 
Corporate Non-segment
 
Total
Real estate revenues(1)
 
$
58,892

 
$
126,181

 
$
94,473

 
$
142,195

 
$
12,700

 
$
—

 
$
434,441

Operating expenses
 
(993
)
 
(96,948
)
 
(21,992
)
 
(48,987
)
 
(7
)
 
—

 
(168,927
)
NOI
 
57,899

 
29,233

 
72,481

 
93,208

 
12,693

 
—

 
265,514

Adjustments to NOI(2)
 
564

 
1,152

 
(2,478
)
 
(1,771
)
 
195

 
—

 
(2,338
)
Adjusted NOI
 
58,463

 
30,385

 
70,003

 
91,437

 
12,888

 
—

 
263,176

Addback adjustments
 
(564
)
 
(1,152
)
 
2,478

 
1,771

 
(195
)
 
—

 
2,338

Interest income
 
—

 
—

 
—

 
—

 
1,713

 
—

 
1,713

Interest expense
 
(589
)
 
(663
)
 
(73
)
 
(111
)
 
—

 
(47,891
)
 
(49,327
)
Depreciation and amortization
 
(16,683
)
 
(24,086
)
 
(36,246
)
 
(53,101
)
 
(1,835
)
 
—

 
(131,951
)
General and administrative
 
—

 
—

 
—

 
—

 
—

 
(21,355
)
 
(21,355
)
Transaction costs
 
—

 
—

 
—

 
—

 
—

 
(4,518
)
 
(4,518
)
Recoveries (impairments), net
 
—

 
—

 
—

 
(8,858
)
 
—

 
—

 
(8,858
)
Gain (loss) on sales of real estate, net
 
3,557

 
4,487

 
—

 
—

 
—

 
—

 
8,044

Other income (expense), net
 
—

 
—

 
—

 
—

 
—

 
3,133

 
3,133

Income tax benefit (expense)
 
—

 
—

 
—

 
—

 
—

 
3,458

 
3,458

Equity income (loss) from unconsolidated joint ventures
 
—

 
—

 
—

 
—

 
(863
)
 
—

 
(863
)
Net income (loss)
 
$
44,184

 
$
8,971

 
$
36,162

 
$
31,138

 
$
11,708

 
$
(67,173
)
 
$
64,990

_______________________________________
(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 March 31, 2018:
 
 
Senior Housing Triple-Net
 
SHOP
 
Life Science
 
Medical Office
 
Other Non-reportable
 
Corporate Non-segment
 
Total
Real estate revenues(1)
 
$
74,289

 
$
144,670

 
$
99,622

 
$
133,220

 
$
21,031

 
$
—

 
$
472,832

Operating expenses
 
(1,045
)
 
(101,746
)
 
(21,809
)
 
(47,878
)
 
(74
)
 
—

 
(172,552
)
NOI
 
73,244

 
42,924

 
77,813

 
85,342

 
20,957

 
—

 
300,280

Adjustments to NOI(2)
 
(1,865
)
 
(1,607
)
 
(3,751
)
 
(1,932
)
 
(531
)
 
—

 
(9,686
)
Adjusted NOI
 
71,379

 
41,317

 
74,062

 
83,410

 
20,426

 
—

 
290,594

Addback adjustments
 
1,865

 
1,607

 
3,751

 
1,932

 
531

 
—

 
9,686

Interest income
 
—

 
—

 
—

 
—

 
6,365

 
—

 
6,365

Interest expense
 
(600
)
 
(988
)
 
(83
)
 
(120
)
 
(728
)
 
(72,583
)
 
(75,102
)
Depreciation and amortization
 
(21,906
)
 
(27,628
)
 
(36,080
)
 
(47,198
)
 
(10,438
)
 
—

 
(143,250
)
General and administrative
 
—

 
—

 
—

 
—

 
—

 
(29,175
)
 
(29,175
)
Transaction costs
 
—

 
—

 
—

 
—

 
—

 
(2,195
)
 
(2,195
)
Gain (loss) on sales of real estate, net
 
—

 
20,815

 
—

 
—

 
—

 
—

 
20,815

Other income (expense), net
 
—

 
—

 
—

 
—

 
(40,567
)
 
160

 
(40,407
)
Income tax benefit (expense)
 
—

 
—

 
—

 
—

 
—

 
5,336

 
5,336

Equity income (loss) from unconsolidated joint ventures
 
—

 
—

 
—

 
—

 
570

 
—

 
570

Net income (loss)
 
$
50,738

 
$
35,123

 
$
41,650

 
$
38,024

 
$
(23,841
)
 
$
(98,457
)
 
$
43,237

_______________________________________
(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
March 31,
Segment
 
2019
 
2018
Senior housing triple-net
 
$
58,892

 
$
74,289

SHOP
 
126,181

 
144,670

Life science
 
94,473

 
99,622

Medical office
 
142,195

 
133,220

Other non-reportable segments
 
14,413

 
27,396

Total revenues
 
$
436,154

 
$
479,197


See Note 3 for significant transactions impacting the Company’s segment assets during the periods presented.