Segment Reporting

We invest in seniors housing and health care real estate. We evaluate our business and make resource allocations on our three operating segments: triple-net, seniors housing operating and outpatient medical. Our triple-net properties include long-term/post-acute care facilities, assisted living facilities, independent living/continuing care retirement communities, care homes (United Kingdom), independent supportive living facilities (Canada), care homes with nursing (United Kingdom) and combinations thereof. Under the triple-net segment, we invest in seniors housing and health care real estate through acquisition and financing of primarily single tenant properties. Properties acquired are primarily leased under triple-net leases and we are not involved in the management of the property. Our seniors housing operating properties include the seniors housing communities referenced above that are owned and/or operated through RIDEA structures (see Note 18). Our outpatient medical properties are typically leased to multiple tenants and generally require a certain level of property management.

We evaluate performance based upon consolidated net operating income (“NOI”) of each segment. We define NOI as total revenues, including tenant reimbursements, less property operating expenses. We believe NOI provides investors relevant and useful information as it measures the operating performance of our properties at the property level on an unleveraged basis. We use NOI to make decisions about resource allocations and to assess the property level performance of our properties.

Non-segment revenue consists mainly of interest income on certain non-real estate investments and other income. Non-segment assets consist of corporate assets including cash, deferred loan expenses and corporate offices and equipment among others. Non-property specific revenues and expenses are not allocated to individual segments in determining NOI. The accounting policies of the segments are the same as those described in the summary of significant accounting policies (see Note 2 to the financial statements included in our Annual Report on Form 10-K for the year ended December 31, 2017). The results of operations for all acquisitions described in Note 3 are included in our consolidated results of operations from the acquisition dates and are components of the appropriate segments. There are no intersegment sales or transfers.

Summary information for the reportable segments (which excludes unconsolidated entities) is as follows (in thousands):



Three Months Ended September 30, 2018:	Triple-net			Seniors Housing Operating			Outpatient Medical			Non-segment / Corporate			Total
Rental income	$	203,039		$	—		$	139,848		$	—		$	342,887
Resident fees and services	—			875,171			—			—			875,171
Interest income	14,378			159			85			—			14,622
Other income	1,693			1,175			136			695			3,699
Total revenues	219,110			876,505			140,069			695			1,236,379

Property operating expenses	426			610,659			46,072			—			657,157
Consolidated net operating income	218,684			265,846			93,997			695			579,222

Interest expense	3,500			17,319			1,643			115,570			138,032
Loss (gain) on derivatives and financial instruments, net	8,991			—			—			—			8,991
Depreciation and amortization	60,383			136,532			46,234			—			243,149
General and administrative	—			—			—			28,746			28,746
Loss (gain) on extinguishment of debt, net	—			—			—			4,038			4,038
Impairment of assets	6,178			562			—			—			6,740
Other expenses	87,076		⁽¹⁾	(811		)	1,055			1,306			88,626
Income (loss) from continuing operations before income taxes and income from unconsolidated entities	52,556			112,244			45,065			(148,965		)	60,900
Income tax (expense) benefit	1,116			211			239			(3,307		)	(1,741		)
Income (loss) from unconsolidated entities	5,377			(6,705		)	1,672			—			344
Income (loss) from continuing operations	59,049			105,750			46,976			(152,272		)	59,503
Gain (loss) on real estate dispositions, net	24,782			(1		)	(58		)	—			24,723
Net income (loss)	$	83,831		$	105,749		$	46,918		$	(152,272	)	$	84,226

Total assets	$	10,163,867		$	14,989,442		$	4,953,277		$	142,533		$	30,249,119



Three Months Ended September 30, 2017:	Triple-net				Seniors Housing Operating			Outpatient Medical			Non-segment / Corporate			Total
Rental income	$	221,555			$	—		$	141,325		$	—		$	362,880
Resident fees and services	—				702,380			—			—			702,380
Interest income	20,187				—			—			—			20,187
Other income	3,174				1,497			667			698			6,036
Total revenues	244,916				703,877			141,992			698			1,091,483

Property operating expenses	—				478,777			45,220			—			523,997
Consolidated net operating income	244,916				225,100			96,772			698			567,486

Interest expense	3,622				16,369			2,929			99,658			122,578
Loss (gain) on derivatives and financial instruments, net	324				—			—			—			324
Depreciation and amortization	62,891				119,089			48,158			—			230,138
General and administrative	—				—			—			29,913			29,913
Other expenses	89,236			⁽¹⁾	5,157			530			4,672			99,595
Income (loss) from continuing operations before income taxes and income from unconsolidated entities	88,843				84,485			45,155			(133,545		)	84,938
Income tax (expense) benefit	(816		)		(1,519		)	(366		)	2,032			(669		)
Income (loss) from unconsolidated entities	5,478				(2,886		)	816			—			3,408
Income (loss) from continuing operations	93,505				80,080			45,605			(131,513		)	87,677
Gain (loss) on real estate dispositions, net	(185		)		(197		)	2,004			—			1,622
Net income (loss)	$	93,320			$	79,883		$	47,609		$	(131,513	)	$	89,299

(1) Represents non-capitalizable transaction costs primarily related to a joint venture transaction with an existing seniors housing operator including the conversion of properties from triple-net to seniors housing operating, an exchange of PropCo/OpCo interests, and termination/restructuring of pre-existing relationships.



Nine Months Ended September 30, 2018	Triple-net			Seniors Housing Operating			Outpatient Medical			Non-segment / Corporate			Total
Rental income	$	607,831		$	—		$	412,026		$	—		$	1,019,857
Resident fees and services	—			2,374,450			—			—			2,374,450
Interest income	42,176			416			140			—			42,732
Other income	16,282			3,973			401			1,561			22,217
Total revenues	666,289			2,378,839			412,567			1,561			3,459,256

Property operating expenses	583			1,648,262			133,528			—			1,782,373
Consolidated net operating income	665,706			730,577			279,039			1,561			1,676,883

Interest expense	10,742			51,225			4,975			315,281			382,223
Loss (gain) on derivatives and financial instruments, net	(5,642		)	—			—			—			(5,642		)
Depreciation and amortization	171,724			397,080			138,821			—			707,625
General and administrative	—			—			—			95,282			95,282
Loss (gain) on extinguishment of debt, net	(32		)	110			11,928			4,038			16,044
Impairment of assets	34,482			5,075			—			—			39,557
Other expenses	89,153			5,168			3,748			4,327			102,396
Income (loss) from continuing operations before income taxes and income from unconsolidated entities	365,279			271,919			119,567			(417,367		)	339,398
Income tax (expense) benefit	(708		)	(2,244		)	(567		)	(3,651		)	(7,170		)
Income (loss) from unconsolidated entities	16,260			(21,389		)	4,293			—			(836		)
Income (loss) from continuing operations	380,831			248,286			123,293			(421,018		)	331,392
Gain (loss) on real estate dispositions, net	158,938			3			214,721			—			373,662
Net income (loss)	$	539,769		$	248,289		$	338,014		$	(421,018	)	$	705,054



Nine Months Ended September 30, 2017	Triple-net			Seniors Housing Operating			Outpatient Medical			Non-segment / Corporate			Total
Rental income	$	666,735		$	—		$	418,886		$	—		$	1,085,621
Resident fees and services	—			2,049,757			—			—			2,049,757
Interest income	61,767			69			—			—			61,836
Other income	7,496			4,005			2,497			1,171			15,169
Total revenues	735,998			2,053,831			421,383			1,171			3,212,383

Property operating expenses	—			1,400,313			135,708			—			1,536,021
Consolidated net operating income	735,998			653,518			285,675			1,171			1,676,362

Interest expense	11,647			47,587			7,342			290,829			357,405
Loss (gain) on derivatives and financial instruments, net	2,284			—			—			—			2,284
Depreciation and amortization	182,672			356,023			144,567			—			683,262
General and administrative	—			—			—			93,643			93,643
Loss (gain) on extinguishment of debt, net	29,083			3,414			4,373			—			36,870
Impairment of assets	4,846			14,191			5,625			—			24,662
Other expenses	96,425			8,100			2,201			10,882			117,608
Income (loss) from continuing operations before income taxes and income from unconsolidated entities	409,041			224,203			121,567			(394,183		)	360,628
Income tax (expense) benefit	(2,070		)	9,133			(655		)	(873		)	5,535
Income (loss) from unconsolidated entities	14,983			(40,527		)	1,868			—			(23,676		)
Income (loss) from continuing operations	421,954			192,809			122,780			(395,056		)	342,487
Gain (loss) on real estate dispositions, net	273,051			12,814			2,004			—			287,869
Net income (loss)	$	695,005		$	205,623		$	124,784		$	(395,056	)	$	630,356

Our portfolio of properties and other investments are located in the United States, the United Kingdom and Canada. Revenues and assets are attributed to the country in which the property is physically located. The following is a summary of geographic information for the periods presented (dollars in thousands):



	Three Months Ended								Nine Months Ended
	September 30, 2018				September 30, 2017				September 30, 2018				September 30, 2017
Revenues:	Amount		%		Amount		%		Amount		%		Amount		%
United States	$	1,007,203	81.5	%	$	871,431	79.9	%	$	2,766,726	80.0	%	$	2,582,042	80.4	%
United Kingdom	111,503		9.0	%	105,028		9.6	%	340,059		9.8	%	298,618		9.3	%
Canada	117,673		9.5	%	115,024		10.5	%	352,471		10.2	%	331,723		10.3	%
Total	$	1,236,379	100.0	%	$	1,091,483	100.0	%	$	3,459,256	100.0	%	$	3,212,383	100.0	%

	As of
	September 30, 2018				December 31, 2017
Assets:	Amount		%		Amount		%
United States	$	24,616,066	81.4	%	$	22,274,443	79.7	%
United Kingdom	3,150,305		10.4	%	3,239,039		11.6	%
Canada	2,482,748		8.2	%	2,430,963		8.7	%
Total	$	30,249,119	100.0	%	$	27,944,445	100.0	%