XML 105 R20.htm IDEA: XBRL DOCUMENT v3.19.3
Segment Disclosures
 9 Months Ended
Sep. 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 unconsolidated joint ventures, hospital properties, and debt 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 nine months ended September 30, 2019, 39 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. There were no transfers of senior housing triple-net facilities to the Company’s SHOP segment during the three months ended September 30, 2019. During each of the three and nine months ended September 30, 2018, 6 and 16 senior housing triple-net facilities, respectively, 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 16 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, 2019:
 
 
Senior Housing Triple-Net
 
SHOP
 
Life Science
 
Medical Office
 
Other Non-reportable
 
Corporate Non-segment
 
Total
Real estate revenues(1)
 
$
48,018

 
$
212,275

 
$
118,561

 
$
143,639

 
$
12,737

 
$
—

 
$
535,230

Operating expenses
 
(865
)
 
(166,201
)
 
(29,520
)
 
(51,472
)
 
(11
)
 
—

 
(248,069
)
NOI
 
47,153

 
46,074

 
89,041

 
92,167

 
12,726

 
—

 
287,161

Adjustments to NOI(2)
 
(1,537
)
 
740

 
(7,067
)
 
(1,568
)
 
469

 
—

 
(8,963
)
Adjusted NOI
 
45,616

 
46,814

 
81,974

 
90,599

 
13,195

 
—

 
278,198

Addback adjustments
 
1,537

 
(740
)
 
7,067

 
1,568

 
(469
)
 
—

 
8,963

Interest income
 
—

 
—

 
—

 
—

 
2,741

 
—

 
2,741

Interest expense
 
(106
)
 
(2,637
)
 
(68
)
 
(108
)
 
—

 
(58,311
)
 
(61,230
)
Depreciation and amortization
 
(12,778
)
 
(58,152
)
 
(45,028
)
 
(54,152
)
 
(1,834
)
 
—

 
(171,944
)
General and administrative
 
—

 
—

 
—

 
—

 
—

 
(22,970
)
 
(22,970
)
Transaction costs
 
—

 
—

 
—

 
—

 
—

 
(1,319
)
 
(1,319
)
Recoveries (impairments), net
 
(7,430
)
 
(24,721
)
 
—

 
(5,729
)
 
(377
)
 
—

 
(38,257
)
Gain (loss) on sales of real estate, net
 
—

 
(734
)
 
(87
)
 
(7
)
 
44

 
—

 
(784
)
Loss on debt extinguishments
 
—

 
—

 
—

 
—

 
—

 
(35,017
)
 
(35,017
)
Other income (expense), net
 
—

 
—

 
—

 
—

 
980

 
(287
)
 
693

Income tax benefit (expense)
 
—

 
—

 
—

 
—

 
—

 
6,261

 
6,261

Equity income (loss) from unconsolidated joint ventures
 
—

 
—

 
—

 
—

 
(7,643
)
 
—

 
(7,643
)
Net income (loss)
 
$
26,839

 
$
(40,170
)
 
$
43,858

 
$
32,171

 
$
6,637

 
$
(111,643
)
 
$
(42,308
)
_______________________________________
(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 September 30, 2018:
 
 
Senior Housing Triple-Net
 
SHOP
 
Life Science
 
Medical Office
 
Other Non-reportable
 
Corporate Non-segment
 
Total
Real estate revenues(1)
 
$
67,487

 
$
137,044

 
$
98,040

 
$
139,566

 
$
12,649

 
$
—

 
$
454,786

Operating expenses
 
(840
)
 
(106,182
)
 
(23,668
)
 
(50,478
)
 
(39
)
 
—

 
(181,207
)
NOI
 
66,647

 
30,862

 
74,372

 
89,088

 
12,610

 
—

 
273,579

Adjustments to NOI(2)
 
534

 
1,378

 
(1,439
)
 
(1,364
)
 
188

 
—

 
(703
)
Adjusted NOI
 
67,181

 
32,240

 
72,933

 
87,724

 
12,798

 
—

 
272,876

Addback adjustments
 
(534
)
 
(1,378
)
 
1,439

 
1,364

 
(188
)
 
—

 
703

Interest income
 
—

 
—

 
—

 
—

 
1,236

 
—

 
1,236

Interest expense
 
(599
)
 
(688
)
 
(78
)
 
(117
)
 
—

 
(62,004
)
 
(63,486
)
Depreciation and amortization
 
(18,884
)
 
(25,166
)
 
(34,432
)
 
(51,977
)
 
(1,739
)
 
—

 
(132,198
)
General and administrative
 
—

 
—

 
—

 
—

 
—

 
(23,503
)
 
(23,503
)
Transaction costs
 
—

 
—

 
—

 
—

 
—

 
(4,489
)
 
(4,489
)
Recoveries (impairments), net
 
—

 
(5,268
)
 
—

 
—

 
—

 
—

 
(5,268
)
Gain (loss) on sales of real estate, net
 
463

 
10,163

 
80,580

 
3,903

 
223

 
—

 
95,332

Loss on debt extinguishments
 
—

 
—

 
—

 
—

 
—

 
(43,899
)
 
(43,899
)
Other income (expense), net
 
—

 
—

 
—

 
—

 
—

 
1,604

 
1,604

Income tax benefit (expense)
 
—

 
—

 
—

 
—

 
—

 
4,929

 
4,929

Equity income (loss) from unconsolidated joint ventures
 
—

 
—

 
—

 
—

 
(911
)
 
—

 
(911
)
Net income (loss)
 
$
47,627

 
$
9,903

 
$
120,442

 
$
40,897

 
$
11,419

 
$
(127,362
)
 
$
102,926

_______________________________________
(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 nine months ended September 30, 2019:
 
 
Senior Housing Triple-Net
 
SHOP
 
Life Science
 
Medical Office
 
Other Non-reportable
 
Corporate Non-segment
 
Total
Real estate revenues(1)
 
$
156,776

 
$
515,457

 
$
320,630

 
$
427,761

 
$
38,200

 
$
—

 
$
1,458,824

Operating expenses
 
(2,723
)
 
(400,608
)
 
(76,992
)
 
(150,635
)
 
(31
)
 
—

 
(630,989
)
NOI
 
154,053

 
114,849

 
243,638

 
277,126

 
38,169

 
—

 
827,835

Adjustments to NOI(2)
 
3,833

 
2,732

 
(17,159
)
 
(4,542
)
 
884

 
—

 
(14,252
)
Adjusted NOI
 
157,886

 
117,581

 
226,479

 
272,584

 
39,053

 
—

 
813,583

Addback adjustments
 
(3,833
)
 
(2,732
)
 
17,159

 
4,542

 
(884
)
 
—

 
14,252

Interest income
 
—

 
—

 
—

 
—

 
6,868

 
—

 
6,868

Interest expense
 
(901
)
 
(4,626
)
 
(211
)
 
(328
)
 
—

 
(161,433
)
 
(167,499
)
Depreciation and amortization
 
(45,154
)
 
(134,481
)
 
(122,705
)
 
(161,350
)
 
(5,501
)
 
—

 
(469,191
)
General and administrative
 
—

 
—

 
—

 
—

 
—

 
(71,445
)
 
(71,445
)
Transaction costs
 
—

 
—

 
—

 
—

 
—

 
(7,174
)
 
(7,174
)
Recoveries (impairments), net
 
(22,914
)
 
(77,685
)
 
—

 
(14,677
)
 
(377
)
 
—

 
(115,653
)
Gain (loss) on sales of real estate, net
 
3,557

 
8,844

 
3,651

 
2,876

 
(220
)
 
—

 
18,708

Loss on debt extinguishments
 
—

 
—

 
—

 
—

 
—

 
(36,152
)
 
(36,152
)
Other income (expense), net
 
—

 
—

 
—

 
—

 
13,797

 
11,037

 
24,834

Income tax benefit (expense)
 
—

 
—

 
—

 
—

 
—

 
11,583

 
11,583

Equity income (loss) from unconsolidated joint ventures
 
—

 
—

 
—

 
—

 
(10,012
)
 
—

 
(10,012
)
Net income (loss)
 
$
88,641

 
$
(93,099
)
 
$
124,373

 
$
103,647

 
$
42,724

 
$
(253,584
)
 
$
12,702

_______________________________________
(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 nine months ended September 30, 2018:
 
 
Senior Housing Triple-Net
 
SHOP
 
Life Science
 
Medical Office
 
Other Non-reportable
 
Corporate Non-segment
 
Total
Real estate revenues(1)
 
$
212,489

 
$
420,067

 
$
298,692

 
$
407,361

 
$
57,113

 
$
—

 
$
1,395,722

Operating expenses
 
(2,677
)
 
(309,694
)
 
(68,208
)
 
(146,881
)
 
(165
)
 
—

 
(527,625
)
NOI
 
209,812

 
110,373

 
230,484

 
260,480

 
56,948

 
—

 
868,097

Adjustments to NOI(2)
 
(323
)
 
(356
)
 
(7,423
)
 
(5,129
)
 
(820
)
 
—

 
(14,051
)
Adjusted NOI
 
209,489

 
110,017

 
223,061

 
255,351

 
56,128

 
—

 
854,046

Addback adjustments
 
323

 
356

 
7,423

 
5,129

 
820

 
—

 
14,051

Interest income
 
—

 
—

 
—

 
—

 
9,048

 
—

 
9,048

Interest expense
 
(1,806
)
 
(2,067
)
 
(240
)
 
(356
)
 
(1,469
)
 
(205,688
)
 
(211,626
)
Depreciation and amortization
 
(62,041
)
 
(80,797
)
 
(105,782
)
 
(147,270
)
 
(22,850
)
 
—

 
(418,740
)
General and administrative
 
—

 
—

 
—

 
—

 
—

 
(75,192
)
 
(75,192
)
Transaction costs
 
—

 
—

 
—

 
—

 
—

 
(9,088
)
 
(9,088
)
Recoveries (impairments), net
 
(6,273
)
 
(5,268
)
 
(7,639
)
 
—

 
—

 
—

 
(19,180
)
Gain (loss) on sales of real estate, net
 
(22,687
)
 
79,340

 
80,581

 
3,903

 
21,074

 
—

 
162,211

Loss on debt extinguishments
 
—

 
—

 
—

 
—

 
—

 
(43,899
)
 
(43,899
)
Other income (expense), net
 
—

 
—

 
—

 
—

 
(40,567
)
 
3,550

 
(37,017
)
Income tax benefit (expense)
 
—

 
—

 
—

 
—

 
—

 
14,919

 
14,919

Equity income (loss) from unconsolidated joint ventures
 
—

 
—

 
—

 
—

 
(442
)
 
—

 
(442
)
Net income (loss)
 
$
117,005

 
$
101,581

 
$
197,404

 
$
116,757

 
$
21,742

 
$
(315,398
)
 
$
239,091

_______________________________________
(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
September 30,
 
Nine Months Ended
September 30,
Segment
 
2019
 
2018
 
2019
 
2018
Senior housing triple-net
 
$
48,018

 
$
67,487

 
$
156,776

 
$
212,489

SHOP
 
212,275

 
137,044

 
515,457

 
420,067

Life science
 
118,561

 
98,040

 
320,630

 
298,692

Medical office
 
143,639

 
139,566

 
427,761

 
407,361

Other non-reportable segments
 
15,478

 
13,885

 
45,068

 
66,161

Total revenues
 
$
537,971

 
$
456,022

 
$
1,465,692

 
$
1,404,770


See Notes 3 and 4 for significant transactions impacting the Company’s segment assets during the periods presented.