Company: WELLTOWER INC.
CIK: 766704
SIC: 6798
Filing Date: 2016-02-18 00:00:00

ITEM 1 - BUSINESS
Item 1. Business
General
Welltower Inc. (NYSE:HCN), an S&P 500 company headquartered in Toledo, Ohio, is driving the transformation of health care infrastructure. The Company invests with leading seniors housing operators, post-acute providers and health systems to fund real estate and infrastructure needed to scale innovative care delivery models and improve people’s wellness and overall health care experience. WelltowerTM, a real estate investment trust (“REIT”), owns properties in major, high-growth markets in the United States, Canada and the United Kingdom, consisting of seniors housing and post-acute communities and outpatient medical properties. Our capital programs, when combined with comprehensive planning, development and property management services, make us a single-source solution for acquiring, planning, developing, managing, repositioning and monetizing real estate assets. More information is available on the Internet at www.welltower.com. The information on our website is not incorporated by reference in this Annual Report on Form 10-K, and our web address is included as an inactive textual reference only.
Our primary objectives are to protect stockholder capital and enhance stockholder value. We seek to pay consistent cash dividends to stockholders and create opportunities to increase dividend payments to stockholders as a result of annual increases in net operating income and portfolio growth. To meet these objectives, we invest across the full spectrum of seniors housing and health care real estate and diversify our investment portfolio by property type, relationship and geographic location.
Depending upon the availability and cost of external capital, we believe our liquidity is sufficient to fund operations, meet debt service obligations (both principal and interest), make dividend distributions and complete construction projects in process. We also continuously evaluate opportunities to finance future investments. New investments are generally funded from temporary borrowings under our primary unsecured credit facility, internally generated cash and the proceeds from investment dispositions. Our investments generate cash from net operating income and principal payments on loans receivable. Permanent financing for future investments, which replaces funds drawn under our primary unsecured credit facility, has historically been provided through a combination of the issuance of public debt and equity securities and the incurrence or assumption of secured debt.
References herein to “we,” “us,” “our” or the “Company” refer to Welltower Inc. and its subsidiaries unless specifically noted otherwise.
Portfolio of Properties
Please see “Item 7 - Management’s Discussion and Analysis of Financial Condition and Results of Operation - Executive Summary - Company Overview” for a table that summarizes our portfolio as of December 31, 2015.
Property Types
We invest in seniors housing and health care real estate and evaluate our business on three reportable segments: triple-net, seniors housing operating and outpatient medical. For additional information regarding our segments, please see Note 17 to our consolidated financial statements. The accounting policies of the segments are the same as those described in the summary of significant accounting policies in Note 2 to our consolidated financial statements. The following is a summary of our various property types.
Triple-Net
Our triple-net properties include independent living facilities and independent supportive living facilities (Canada), continuing care retirement communities, assisted living facilities, care homes with and without nursing (United Kingdom), Alzheimer’s/dementia care facilities, long-term/post-acute care facilities and hospitals. We invest primarily through acquisitions, development and joint venture partnerships. Our properties are primarily leased to operators under long-term, triple-net master leases. We are not involved in property management. Our properties include stand-alone facilities that provide one level of service, combination facilities that provide multiple levels of service, and communities or campuses that provide a wide range of services.
Independent Living Facilities and Independent Supportive Living Facilities (Canada). Independent living facilities and independent supportive living facilities are age-restricted, multifamily properties with central dining facilities that provide residents access to meals and other services such as housekeeping, linen service, transportation and social and recreational activities.
Continuing Care Retirement Communities. Continuing care retirement communities typically include a combination of detached homes, an independent living facility, an assisted living facility and/or a long-term/post-acute care facility on one campus. These communities appeal to residents because there is no need to relocate when health and medical needs change. Resident payment plans
vary, but can include entrance fees, condominium fees and rental fees. Many of these communities also charge monthly maintenance fees in exchange for a living unit, meals and some health services.
Assisted Living Facilities. Assisted living facilities are state regulated rental properties that provide the same services as independent living facilities, but also provide supportive care from trained employees to residents who require assistance with activities of daily living, including, but not limited to, management of medications, bathing, dressing, toileting, ambulating and eating.
Care Homes with Nursing (United Kingdom). Care homes with nursing, regulated by the Care Quality Commission are licensed daily rate or rental properties where the majority of individuals require 24-hour nursing and/or medical care. Generally, these properties are licensed for various national and local reimbursement programs. Unlike the U.S., care homes with nursing in the U.K. generally do not provide post-acute care.
Care Homes (United Kingdom). Care homes, regulated by the Care Quality Commission, are rental properties that provide essentially the same services as U.S. assisted living facilities.
Alzheimer’s/Dementia Care Facilities. Certain assisted living facilities may include state-licensed settings that specialize in caring for those afflicted with Alzheimer’s disease and/or other types of dementia.
Long-Term/Post-Acute Care Facilities. Our long-term/post-acute care facilities generally include skilled nursing/post-acute care facilities, inpatient rehabilitation facilities and long-term acute care facilities. Skilled nursing/post-acute care facilities are licensed daily rate or rental properties where the majority of individuals require 24-hour nursing and/or medical care. Generally, these properties are licensed for Medicaid and/or Medicare reimbursement in the U.S. or provincial reimbursement in Canada. All facilities offer some level of rehabilitation services. Some facilities focus on higher acuity patients and offer rehabilitation units specializing in cardiac, orthopedic, dialysis, neurological or pulmonary rehabilitation. Inpatient rehabilitation facilities provide inpatient services for patients with intensive rehabilitation needs. Long-term acute care facilities provide inpatient services for patients with complex medical conditions that require more intensive care, monitoring or emergency support than is available in most skilled nursing/post-acute care facilities.
Hospitals. Hospitals are acute care facilities that provide a wide range of inpatient and/or outpatient services, including, but not limited to, surgery, rehabilitation, therapy and clinical laboratories.
Our triple-net segment accounted for 31%, 31% and 31% of total revenues (including discontinued operations) for the years ended December 31, 2015, 2014 and 2013, respectively. We lease 187 facilities to Genesis Healthcare, LLC, an operator of long-term/post-acute care facilities, pursuant to a long-term, triple-net master lease. In addition to rent, the master lease requires Genesis to pay all operating costs, utilities, real estate taxes, insurance, building repairs, maintenance costs and all obligations under certain ground leases. All obligations under the master lease have been guaranteed by FC-GEN Operations Investment, LLC, a subsidiary of Genesis Healthcare, LLC. For the year ended December 31, 2015, our lease with Genesis accounted for approximately 31% of our triple-net segment revenues and 10% of our total revenues.
Seniors Housing Operating
Our seniors housing operating properties include several of the facility types described in “Item 1 - Business - Property Types - Triple-Net”, including independent living facilities and independent supportive living facilities, assisted living facilities, care homes and Alzheimer’s/dementia care facilities.
Properties are primarily held in consolidated joint venture entities with operating partners. We utilize the structure proposed in the REIT Investment Diversification and Empowerment Act of 2007, which is commonly referred to as a “RIDEA” structure (the provisions of the Internal Revenue Code authorizing the RIDEA structure were enacted as part of the Housing and Economic Recovery Act of 2008). See Note 18 to our consolidated financial statements for more information.
Our seniors housing operating segment accounted for 56%, 57% and 59% of total revenues (including discontinued operations) for the years ended December 31, 2015, 2014 and 2013, respectively. We have relationships with 14 operators to own and operate 388 facilities (plus 54 unconsolidated facilities). In each instance, our partner provides management services to the properties pursuant to an incentive-based management contract. We rely on our partners to effectively and efficiently manage these properties. For the year ended December 31, 2015, our relationship with Sunrise Senior Living accounted for approximately 44% of our seniors housing operating segment revenues and 25% of our total revenues.
Outpatient Medical
Our outpatient medical properties include outpatient medical buildings and, prior to June 30, 2015, life science facilities. We typically lease our outpatient medical buildings to multiple tenants and provide varying levels of property management. Our life science investment represented an investment in an unconsolidated joint venture entity. Our outpatient medical segment accounted for 13%, 12% and 13% of total revenues (including discontinued operations) for the years ended December 31, 2015, 2014 and 2013, respectively. No single tenant exceeds 20% of segment revenues.
Outpatient Medical Buildings. The outpatient medical building portfolio consists of health care related buildings that generally include physician offices, ambulatory surgery centers, diagnostic facilities, outpatient services and/or labs. Our portfolio has a strong affiliation with health systems. Approximately 95% of our outpatient medical building portfolio is affiliated with health systems (with buildings on hospital campuses or serving as satellite locations for the health system and its physicians).
Life Science Facilities. The life science portfolio consisted of laboratory and office facilities specifically designed and constructed for use by biotechnology and pharmaceutical companies. These facilities were located adjacent to The Massachusetts Institute of Technology, which is a well-established market known for pharmaceutical and biotechnology research. They are similar to commercial office buildings with advanced HVAC (heating, ventilation and air conditioning), electrical and mechanical systems. On June 30, 2015, we disposed of our life science investments.
Investments
Depending upon market conditions, we believe that new investments will be available in the future with spreads over our cost of capital that will generate appropriate returns to our stockholders. We invest in seniors housing and health care real estate primarily through acquisitions, developments and joint venture partnerships. For additional information regarding acquisition and development activity, please see Note 3 to our consolidated financial statements. We diversify our investment portfolio by property type, relationship and geographic location. In determining whether to invest in a property, we focus on the following: (1) the experience of the obligor’s/partner’s management team; (2) the historical and projected financial and operational performance of the property; (3) the credit of the obligor/partner; (4) the security for any lease or loan; (5) the real estate attributes of the building and its location; (6) the capital committed to the property by the obligor/partner; and (7) the operating fundamentals of the applicable industry. We conduct market research and analysis for all potential investments. In addition, we review the value of all properties, the interest rates and covenant requirements of any facility-level debt to be assumed at the time of the acquisition and the anticipated sources of repayment of any existing debt that is not to be assumed at the time of the acquisition.
We monitor our investments through a variety of methods determined by the type of property. Our proactive and comprehensive asset management process for seniors housing properties generally includes review of monthly financial statements and other operating data for each property, review of obligor/partner creditworthiness, property inspections, and review of covenant compliance relating to licensure, real estate taxes, letters of credit and other collateral. Our internal property management division actively manages and monitors the outpatient medical portfolio with a comprehensive process including review of, among other things, tenant relations, lease expirations, the mix of health service providers, hospital/health system relationships, property performance, capital improvement needs, and market conditions. In monitoring our portfolio, our personnel use a proprietary database to collect and analyze property-specific data. Additionally, we conduct extensive research to ascertain industry trends.
We evaluate the operating environment in each property’s market to determine the likely trend in operating performance of the facility. When we identify unacceptable trends, we seek to mitigate, eliminate or transfer the risk. Through these efforts, we are generally able to intervene at an early stage to address any negative trends, and in so doing, support both the collectability of revenue and the value of our investment.
Investment Types
Real Property. Our properties are primarily comprised of land, buildings, improvements and related rights. Our triple-net properties are generally leased to operators under long-term operating leases. The leases generally have a fixed contractual term of 12 to 15 years and contain one or more five to 15-year renewal options. Certain of our leases also contain purchase options, a portion of which could result in the disposition of properties for less than full market value. Most of our rents are received under triple-net leases requiring the operator to pay rent and all additional charges incurred in the operation of the leased property. The tenants are required to repair, rebuild and maintain the leased properties. Substantially all of these operating leases are designed with escalating rent structures. Leases with fixed annual rental escalators are generally recognized on a straight-line basis over the initial lease period, subject to a collectability assessment. Rental income related to leases with contingent rental escalators is generally recorded based on the contractual cash rental payments due for the period.
At December 31, 2015, approximately 92% of our triple-net properties were subject to master leases. A master lease is a lease of multiple properties to one tenant entity under a single lease agreement. From time to time, we may acquire additional properties that are then leased to the tenant under the master lease. The tenant is required to make one monthly payment that represents rent on all the properties that are subject to the master lease. Typically, the master lease tenant can exercise its right to purchase the properties or to renew the master lease only with respect to all leased properties at the same time. This bundling feature benefits us because the tenant
cannot limit the purchase or renewal to the better performing properties and terminate the leasing arrangement with respect to the poorer performing properties. This spreads our risk among the entire group of properties within the master lease. The bundling feature should provide a similar advantage to us if the master lease tenant is in bankruptcy. Subject to certain restrictions, a debtor in bankruptcy has the right to assume or reject each of its leases. It is our intent that a tenant in bankruptcy would be required to assume or reject the master lease as a whole, rather than deciding on a property by property basis.
Our outpatient medical portfolio is primarily self-managed and consists principally of multi-tenant properties leased to health care providers. Our leases typically include increasers and some form of operating expense reimbursement by the tenant. As of December 31, 2015, 82% of our portfolio included leases with full pass through, 15% with a partial expense reimbursement (modified gross) and 3% with no expense reimbursement (gross). Our outpatient medical leases are non-cancellable operating leases that have a weighted-average remaining term of seven years at December 31, 2015 and are often credit enhanced by security deposits, guaranties and/or letters of credit.
Construction. We occasionally provide for the construction of properties for tenants as part of long-term operating leases. We capitalize certain interest costs associated with funds used for the construction of properties owned by us. The amount capitalized is based upon the amount advanced during the construction period using the rate of interest that approximates our company-wide cost of financing. Our interest expense is reduced by the amount capitalized. We also typically charge a transaction fee at the commencement of construction which we defer and amortize to income over the term of the resulting lease. The construction period commences upon funding and terminates upon the earlier of the completion of the applicable property or the end of a specified period. During the construction period, we advance funds to the tenants in accordance with agreed upon terms and conditions which require, among other things, periodic site visits by a Company representative. During the construction period, we generally require an additional credit enhancement in the form of payment and performance bonds and/or completion guaranties. At December 31, 2015, we had outstanding construction investments of $258,968,000 and were committed to provide additional funds of approximately $525,588,000 to complete construction for investment properties.
Real Estate Loans. Our real estate loans are typically structured to provide us with interest income, principal amortization and transaction fees and are generally secured by first/second mortgage liens, leasehold mortgages, corporate guaranties and/or personal guaranties. At December 31, 2015, we had outstanding real estate loans of $819,492,000. The interest yield averaged approximately 8.1% per annum on our outstanding real estate loan balances. Our yield on real estate loans depends upon a number of factors, including the stated interest rate, average principal amount outstanding during the term of the loan and any interest rate adjustments. The real estate loans outstanding at December 31, 2015 are generally subject to one to 15-year terms with principal amortization schedules and/or balloon payments of the outstanding principal balances at the end of the term. Typically, real estate loans are cross-defaulted and cross-collateralized with other real estate loans, operating leases or agreements between us and the obligor and its affiliates.
Investments in Unconsolidated Entities. Investments in entities that we do not consolidate but have the ability to exercise significant influence over operating and financial policies are reported under the equity method of accounting. Our investments in unconsolidated entities generally represent interests ranging from 10% to 50% in real estate assets. Under the equity method of accounting, our share of the investee’s earnings or losses is included in our consolidated results of operations. To the extent that our cost basis is different from the basis reflected at the entity level, the basis difference is generally amortized over the lives of the related assets and liabilities, and such amortization is included in our share of equity in earnings of the entity. The initial carrying value of investments in unconsolidated entities is based on the amount paid to purchase the entity interest or the estimated fair value of the assets prior to the sale of interests in the entity. We evaluate our equity method investments for impairment based upon a comparison of the estimated fair value of the equity method investment to its carrying value. When we determine a decline in the estimated fair value of such an investment below its carrying value is other-than-temporary, an impairment is recorded. See Note 7 to our consolidated financial statements for more information.
Principles of Consolidation
The consolidated financial statements include the accounts of our wholly-owned subsidiaries and joint venture entities that we control, through voting rights or other means. All material intercompany transactions and balances have been eliminated in consolidation.
At inception of joint venture transactions, we identify entities for which control is achieved through means other than voting rights (“variable interest entities” or “VIEs”) and determine which business enterprise is the primary beneficiary of its operations. A VIE is broadly defined as an entity where either (i) the equity investors as a group, if any, do not have a controlling financial interest, or (ii) the equity investment at risk is insufficient to finance that entity’s activities without additional subordinated financial support. We consolidate investments in VIEs when we are determined to be the primary beneficiary. Accounting Standards Codification Topic 810, Consolidations, requires enterprises to perform a qualitative approach to determining whether or not a VIE will need to be consolidated on a continuous basis. This evaluation is based on an enterprise’s ability to direct and influence the activities of a VIE that most significantly impact that entity’s economic performance.
For investments in joint ventures, we evaluate the type of rights held by the limited partner(s), which may preclude consolidation in circumstances in which the sole general partner would otherwise consolidate the limited partnership. The assessment of limited partners’ rights and their impact on the presumption of control over a limited partnership by the sole general partner should be made when an investor becomes the sole general partner and should be reassessed if (i) there is a change to the terms or in the exercisability of the rights of the limited partners, (ii) the sole general partner increases or decreases its ownership in the limited partnership, or (iii) there is an increase or decrease in the number of outstanding limited partnership interests. We similarly evaluate the rights of managing members of limited liability companies.
Borrowing Policies
We utilize a combination of debt and equity to fund investments. Our debt and equity levels are determined by management to maintain a conservative credit profile. Generally, we intend to issue unsecured, fixed-rate public debt with long-term maturities to approximate the maturities on our triple-net leases and loans. For short-term purposes, we may borrow on our primary unsecured credit facility. We replace these borrowings with long-term capital such as senior unsecured notes, common stock or preferred stock. When terms are deemed favorable, we may invest in properties subject to existing mortgage indebtedness. In addition, we may obtain secured financing for unleveraged properties in which we have invested or may refinance properties acquired on a leveraged basis. In certain agreements with our lenders, we are subject to restrictions with respect to secured and unsecured indebtedness.
Competition
We compete with other real estate investment trusts, real estate partnerships, private equity and hedge fund investors, banks, insurance companies, finance/investment companies, government-sponsored agencies, taxable and tax-exempt bond funds, health care operators, developers and other investors in the acquisition, development, leasing and financing of health care and seniors housing properties. We compete for investments based on a number of factors including relationships, certainty of execution, investment structures and underwriting criteria. Our ability to successfully compete is impacted by economic and demographic trends, availability of acceptable investment opportunities, our ability to negotiate beneficial investment terms, availability and cost of capital, construction and renovation costs and applicable laws and regulations.
The operators/tenants of our properties compete with properties that provide comparable services in the local markets. Operators/tenants compete for patients and residents based on a number of factors including quality of care, reputation, physical appearance of properties, location, services offered, family preferences, physicians, staff and price. We also face competition from other health care facilities for tenants, such as physicians and other health care providers that provide comparable facilities and services.
For additional information on the risks associated with our business, please see “

ITEM 1A - RISK FACTORS
Item 1A. Risk Factors
This section discusses the most significant factors that affect our business, operations and financial condition. It does not describe all risks and uncertainties applicable to us, our industry or ownership of our securities. If any of the following risks, as well as other risks and uncertainties that are not yet identified or that we currently think are not material, actually occur, we could be materially adversely affected. In that event, the value of our securities could decline.
We group these risk factors into three categories:
• Risks arising from our business;
• Risks arising from our capital structure; and
• Risks arising from our status as a REIT.
Risks Arising from Our Business
Our investments in and acquisitions of health care and seniors housing properties may be unsuccessful or fail to meet our expectations
We are exposed to the risk that some of our acquisitions may not prove to be successful. We could encounter unanticipated difficulties and expenditures relating to any acquired properties, including contingent liabilities, and acquired properties might require significant management attention that would otherwise be devoted to our ongoing business. If we agree to provide construction funding to an operator/tenant and the project is not completed, we may need to take steps to ensure completion of the project. Such expenditures may negatively affect our results of operations. Furthermore, there can be no assurance that our anticipated acquisitions and investments, the completion of which is subject to various conditions, will be consummated in accordance with anticipated timing, on anticipated terms, or at all. We also may be unable to quickly and efficiently integrate new acquisitions, particularly acquisitions of portfolios of properties, into our existing operations, and this could have an adverse effect on our results of operations and financial condition.
Our investments in joint ventures could be adversely affected by our lack of exclusive control over these investments, our partners’ insolvency or failure to meet their obligations and disputes between us and our partners
We have entered into, and may continue in the future to enter into, partnerships or joint ventures with other persons or entities. Joint venture investments involve risks that may not be present with other methods of ownership, including the possibility that our partner might become insolvent, refuse to make capital contributions when due or otherwise fail to meet its obligations, which may result in certain liabilities to us for guarantees and other commitments; that our partner might at any time have economic or other business interests or goals that are or become inconsistent with our interests or goals; that we could become engaged in a dispute with our partner, which could require us to expend additional resources to resolve such dispute and could have an adverse impact on the operations and profitability of the joint venture; and that our partner may be in a position to take action or withhold consent contrary to our instructions or requests. In addition, our ability to transfer our interest in a joint venture to a third party may be restricted. In some instances, we and/or our partner may have the right to trigger a buy-sell arrangement, which could cause us to sell our interest, or acquire our partner’s interest, at a time when we otherwise would not have initiated such a transaction. Our ability to acquire our partner’s interest may be limited if we do not have sufficient cash, available borrowing capacity or other capital resources. In such event, we may be forced to sell our interest in the joint venture when we would otherwise prefer to retain it. Joint ventures may require us to share decision-making authority with our partners, which could limit our ability to control the properties in the joint ventures. Even when we have a controlling interest, certain major decisions may require partner approval, such as the sale, acquisition or financing of a property.
We are exposed to operational risks with respect to our seniors housing operating properties that could adversely affect our revenue and operations
We are exposed to various operational risks with respect to our seniors housing operating properties that may increase our costs or adversely affect our ability to generate revenues. These risks include fluctuations in occupancy, Medicare and Medicaid reimbursement, if applicable, and private pay rates; economic conditions; competition; federal, state, local, and industry-regulated licensure, certification and inspection laws, regulations, and standards; the availability and increases in cost of general and professional liability insurance coverage; state regulation and rights of residents related to entrance fees; and the availability and increases in the cost of labor (as a result of unionization or otherwise). Any one or a combination of these factors may adversely affect our revenue and operations.
Decreases in our operators’ revenues or increases in our operators’ expenses could affect our operators’ ability to make payments to us
Our operators’ revenues are primarily driven by occupancy, private pay rates, and Medicare and Medicaid reimbursement, if applicable. Expenses for these facilities are primarily driven by the costs of labor, food, utilities, taxes, insurance and rent or debt service. Revenues from government reimbursement have, and may continue to, come under pressure due to reimbursement cuts and state budget shortfalls. Operating costs continue to increase for our operators. To the extent that any decrease in revenues and/or any increase in operating expenses result in a property not generating enough cash to make payments to us, the credit of our operator and the value of other collateral would have to be relied upon. To the extent the value of such property is reduced, we may need to record an impairment for such asset. Furthermore, if we determine to dispose of an underperforming property, such sale may result in a loss. Any such impairment or loss on sale would negatively affect our financial results.
Increased competition may affect our operators’ ability to meet their obligations to us
The operators of our properties compete on a local and regional basis with operators of properties and other health care providers that provide comparable services. We cannot be certain that the operators of all of our facilities will be able to achieve and maintain occupancy and rate levels that will enable them to meet all of their obligations to us. Our operators are expected to encounter increased competition in the future that could limit their ability to attract residents or expand their businesses.
A severe cold and flu season, epidemics or any other widespread illnesses could adversely affect the occupancy of our seniors housing operating and triple-net properties
Our and our operators’ revenues are dependent on occupancy. It is impossible to predict the severity of the cold and flu season or the occurrence of epidemics or any other widespread illnesses. The occupancy of our seniors housing operating and triple-net properties could significantly decrease in the event of a severe cold and flu season, an epidemic or any other widespread illness. Such a decrease could affect the operating income of our seniors housing operating properties and the ability of our triple-net operators to make payments to us.
The insolvency or bankruptcy of our obligors may adversely affect our business, results of operations and financial condition
We are exposed to the risk that our obligors may not be able to meet the rent, principal and interest or other payments due us, which may result in an obligor bankruptcy or insolvency, or that an obligor might become subject to bankruptcy or insolvency proceedings for other reasons. Although our operating lease agreements provide us with the right to evict a tenant, demand immediate payment of rent and exercise other remedies, and our loans provide us with the right to terminate any funding obligation, demand immediate repayment of principal and unpaid interest, foreclose on the collateral and exercise other remedies, the bankruptcy and insolvency laws afford certain rights to a party that has filed for bankruptcy or reorganization. An obligor in bankruptcy or subject to insolvency proceedings may be able to limit or delay our ability to collect unpaid rent in the case of a lease or to receive unpaid principal and interest in the case of a loan, and to exercise other rights and remedies.
We may be required to fund certain expenses (e.g., real estate taxes and maintenance) to preserve the value of an investment property, avoid the imposition of liens on a property and/or transition a property to a new tenant. In some instances, we have terminated our lease with a tenant and relet the property to another tenant. In some of those situations, we have provided working capital loans to and limited indemnification of the new obligor. If we cannot transition a leased property to a new tenant, we may take possession of that property, which may expose us to certain successor liabilities. Should such events occur, our revenue and operating cash flow may be adversely affected.
We may not be able to timely reinvest our sale proceeds on terms acceptable to us
From time to time, we will have cash available from (1) the proceeds of sales of our securities, (2) principal payments on our loans receivable and (3) the sale of properties, including non-elective dispositions, under the terms of master leases or similar financial support arrangements. In order to maintain current revenues and continue generating attractive returns, we expect to re-invest these
proceeds in a timely manner. We compete for real estate investments with a broad variety of potential investors. This competition for attractive investments may negatively affect our ability to make timely investments on terms acceptable to us.
Failure to properly manage our rapid growth could distract our management or increase our expenses
We have experienced rapid growth and development in a relatively short period of time and expect to continue this rapid growth in the future. This growth has resulted in increased levels of responsibility for our management. Future property acquisitions could place significant additional demands on, and require us to expand, our management, resources and personnel. Our failure to manage any such rapid growth effectively could harm our business and, in particular, our financial condition, results of operations and cash flows, which could negatively affect our ability to make distributions to stockholders. Our growth could also increase our capital requirements, which may require us to issue potentially dilutive equity securities and incur additional debt.
We depend on Genesis Healthcare, LLC (“Genesis”) for a significant portion of our revenues and any inability or unwillingness by Genesis to satisfy its obligations under its agreements with us could adversely affect us
The properties we lease to Genesis account for a significant portion of our revenues, and because our leases with Genesis are triple-net leases, we also depend on Genesis to pay all insurance, taxes, utilities and maintenance and repair expenses in connection with the leased properties. We cannot assure you that Genesis will have sufficient assets, income and access to financing to enable it to make rental payments to us or to otherwise satisfy its obligations under our leases, and any inability or unwillingness by Genesis to do so could have an adverse effect on us. Genesis has also agreed to indemnify, defend and hold us harmless from and against various claims, litigation and liabilities arising in connection with its business, and we cannot assure you that Genesis will have sufficient assets, income, access to financing and insurance coverage to enable it to satisfy its indemnification obligations.
The properties managed by Sunrise Senior Living, LLC account for a significant portion of our revenues and operating income and any adverse developments in its business or financial condition could adversely affect us
Sunrise Senior Living, LLC manages our entire Sunrise property portfolio, which as of December 31, 2015, consisted of 152 seniors housing properties. These properties account for a significant portion of our revenues, and we rely on Sunrise Senior Living, LLC to manage these properties efficiently and effectively. Any adverse developments in Sunrise Senior Living, LLC’s business or financial condition could impair its ability to manage our properties efficiently and effectively, which could adversely affect us.
Ownership of property outside the United States may subject us to different or greater risks than those associated with our domestic operations
We have operations in Canada and the United Kingdom. International development, ownership, and operating activities involve risks that are different from those we face with respect to our domestic properties and operations. These risks include, but are not limited to, any international currency gain recognized with respect to changes in exchange rates may not qualify under the 75% gross income test or the 95% gross income test that we must satisfy annually in order to qualify and maintain our status as a REIT; challenges with respect to the repatriation of foreign earnings and cash; changes in foreign political, regulatory, and economic conditions, including regionally, nationally, and locally; challenges in managing international operations; challenges of complying with a wide variety of foreign laws and regulations, including those relating to real estate, corporate governance, operations, taxes, employment and legal proceedings; foreign ownership restrictions with respect to operations in countries; differences in lending practices and the willingness of domestic or foreign lenders to provide financing; regional or country-specific business cycles and economic instability; and failure to comply with applicable laws and regulations in the United States that affect foreign operations, including, but not limited to, the U.S. Foreign Corrupt Practices Act. If we are unable to successfully manage the risks associated with international expansion and operations, our results of operations and financial condition may be adversely affected.
We do not know if our tenants will renew their existing leases, and if they do not, we may be unable to lease the properties on as favorable terms, or at all
We cannot predict whether our tenants will renew existing leases at the end of their lease terms, which expire at various times. If these leases are not renewed, we would be required to find other tenants to occupy those properties or sell them. There can be no assurance that we would be able to identify suitable replacement tenants or enter into leases with new tenants on terms as favorable to us as the current leases or that we would be able to lease those properties at all.
Our operators’ may not have the necessary insurance coverage to insure adequately against losses
In recent years, long-term/post-acute care and seniors housing operators have experienced substantial increases in both the number and size of patient care liability claims. As a result, general and professional liability costs have increased in some markets. General and professional liability insurance coverage may be restricted or very costly, which may adversely affect the property operators’
future operations, cash flows and financial condition, and may have a material adverse effect on the property operators’ ability to meet their obligations to us.
Our ownership of properties through ground leases exposes us to the loss of such properties upon breach or termination of the ground leases
We have acquired an interest in certain of our properties by acquiring a leasehold interest in the property on which the building is located, and we may acquire additional properties in the future through the purchase of interests in ground leases. As the lessee under a ground lease, we are exposed to the possibility of losing the property upon termination of the ground lease or an earlier breach of the ground lease by us.
The requirements of, or changes to, governmental reimbursement programs, such as Medicare or Medicaid, could have a material adverse effect on our obligors’ liquidity, financial condition and results of operations, which could adversely affect our obligors’ ability to meet their obligations to us
Some of our obligors’ businesses are affected by government reimbursement. To the extent that an operator/tenant receives a significant portion of its revenues from government payors, primarily Medicare and Medicaid, such revenues may be subject to statutory and regulatory changes, retroactive rate adjustments, recovery of program overpayments or set-offs, court decisions, administrative rulings, policy interpretations, payment or other delays by fiscal intermediaries or carriers, government funding restrictions (at a program level or with respect to specific facilities) and interruption or delays in payments due to any ongoing government investigations and audits at such property. In recent years, government payors have frozen or reduced payments to health care providers due to budgetary pressures. Health care reimbursement will likely continue to be of paramount importance to federal and state authorities. We cannot make any assessment as to the ultimate timing or effect any future legislative reforms may have on the financial condition of our obligors and properties. There can be no assurance that adequate reimbursement levels will be available for services provided by any property operator, whether the property receives reimbursement from Medicare, Medicaid or private payors. Significant limits on the scope of services reimbursed and on reimbursement rates and fees could have a material adverse effect on an obligor’s liquidity, financial condition and results of operations, which could adversely affect the ability of an obligor to meet its obligations to us. See “Item 1 - Business - Certain Government Regulations - United States - Reimbursement” above.
The Patient Protection and Affordable Care Act of 2010, as modified by the Health Care and Education Reconciliation Act of 2010 (collectively, the “Health Reform Laws”), provides those states that expand their Medicaid coverage to otherwise eligible state residents with incomes at or below 138% of the federal poverty level with an increased federal medical assistance percentage, effective January 1, 2014, when certain conditions are met. On June 28, 2012, the United States Supreme Court upheld the individual mandate of the Health Reform Laws but partially invalidated the expansion of Medicaid. The ruling on Medicaid expansion allows states to elect not to participate in the expansion-and to forego funding for the Medicaid expansion-without losing their existing Medicaid funding. Given that the federal government substantially funds the Medicaid expansion, it is unclear how many states will ultimately pursue this option, although, as of early February 2016, roughly half of the states have expanded Medicaid coverage. The participation by states in the Medicaid expansion could have the dual effect of increasing our tenants’ revenues, through new patients, but further straining state budgets and their ability to pay our tenants. While the federal government will pay for approximately 100% of those additional costs from 2014 through 2016, states will be expected to pay for part of those additional costs beginning in 2017. In light of this, at least one state that has passed legislation to allow the state to expand its Medicaid coverage has included sunset provisions in the legislation that require that the expanded benefits be reduced or eliminated if the federal government’s funding for the program is decreased or eliminated, permitting the state to re-visit the issue once it begins to share financial responsibility for the expansion. With increasingly strained budgets, it is unclear how states that do not include such sunset provisions will pay their share of these additional Medicaid costs and what other health care expenditures could be reduced as a result. A significant reduction in other health care related spending by states to pay for increased Medicaid costs could affect our tenants’ revenue streams. See “Item 1 - Business - Certain Government Regulations - United States - Reimbursement” above.
More generally, and because of the dynamic nature of the legislative and regulatory environment for health care products and services, and in light of existing federal deficit and budgetary concerns, we cannot predict the impact that broad-based, far-reaching legislative or regulatory changes could have on the U.S. economy, our business or that of our operators and tenants.
Our operators’ or tenants’ failure to comply with federal, state, local, and industry-regulated licensure, certification and inspection laws, regulations, and standards could adversely affect such operators’ or tenants’ operations, which could adversely affect our operators’ and tenants’ ability to meet their obligations to us
Our operators and tenants generally are subject to varying levels of federal, state, local, and industry-regulated licensure, certification and inspection laws, regulations, and standards. Our operators’ or tenants’ failure to comply with any of these laws, regulations, or standards could result in loss of accreditation, denial of reimbursement, imposition of fines, suspension, decertification or exclusion from federal and state health care programs, loss of license or closure of the facility. Such actions may have an effect on
our operators’ or tenants’ ability to make lease payments to us and, therefore, adversely impact us. See “Item 1 - Business - Certain Government Regulations - United States - Other Related Laws, Initiatives, and Considerations” above.
Many of our properties may require a license, registration, and/or certificate of need (“CON”) to operate. Failure to obtain a license, registration, or CON, or loss of a required license, registration, or CON would prevent a facility from operating in the manner intended by the operators or tenants. These events could materially adversely affect our operators’ or tenants’ ability to make rent payments to us. State and local laws also may regulate the expansion, including the addition of new beds or services or acquisition of medical equipment, and the construction or renovation of health care facilities, by requiring a CON or other similar approval from a state agency. See “Item 1 - Business - Certain Government Regulations - United States - Licensing and Certification” above.
Illiquidity of real estate investments could significantly impede our ability to respond to adverse changes in the performance of our properties
Real estate investments are relatively illiquid. Our ability to quickly sell or exchange any of our properties in response to changes in economic and other conditions will be limited. No assurances can be given that we will recognize full value for any property that we are required to sell for liquidity reasons. Our inability to respond rapidly to changes in the performance of our investments could adversely affect our financial condition and results of operations. In addition, we are exposed to the risks inherent in concentrating investments in real estate, and in particular, the seniors housing and health care industries. A downturn in the real estate industry could adversely affect the value of our properties and our ability to sell properties for a price or on terms acceptable to us.
Unfavorable resolution of pending and future litigation matters and disputes could have a material adverse effect on our financial condition
From time to time, we may be directly involved in a number of legal proceedings, lawsuits and other claims. We may also be named as defendants in lawsuits allegedly arising out of our actions or the actions of our operators/tenants or managers in which such operators/tenants or managers have agreed to indemnify, defend and hold us harmless from and against various claims, litigation and liabilities arising in connection with their respective businesses. An unfavorable resolution of pending or future litigation may have a material adverse effect on our business, results of operations and financial condition. Regardless of its outcome, litigation may result in substantial costs and expenses and significantly divert the attention of management. There can be no assurance that we will be able to prevail in, or achieve a favorable settlement of, pending or future litigation. In addition, pending litigation or future litigation, government proceedings or environmental matters could lead to increased costs or interruption of our normal business operations.
Development, redevelopment and construction risks could affect our profitability
At any given time, we may be in the process of constructing one or more new facilities that ultimately will require a CON and license before they can be utilized by the operator for their intended use. The operator also may need to obtain Medicare and Medicaid certification and enter into Medicare and Medicaid provider agreements and/or third party payor contracts. In the event that the operator is unable to obtain the necessary CON, licensure, certification, provider agreements or contracts after the completion of construction, there is a risk that we will not be able to earn any revenues on the facility until either the initial operator obtains a license or certification to operate the new facility and the necessary provider agreements or contracts or we find and contract with a new operator that is able to obtain a license to operate the facility for its intended use and the necessary provider agreements or contracts.
In connection with our renovation, redevelopment, development and related construction activities, we may be unable to obtain, or suffer delays in obtaining, necessary zoning, land-use, building, occupancy and other required governmental permits and authorizations. These factors could result in increased costs or our abandonment of these projects. In addition, we may not be able to obtain financing on favorable terms, which may render us unable to proceed with our development activities, and we may not be able to complete construction and lease-up of a property on schedule, which could result in increased debt service expense or construction costs.
Additionally, the time frame required for development, construction and lease-up of these properties means that we may have to wait years for significant cash returns. Because we are required to make cash distributions to our stockholders, if the cash flow from operations or refinancing is not sufficient, we may be forced to borrow additional money to fund such distributions. Newly developed and acquired properties may not produce the cash flow that we expect, which could adversely affect our overall financial performance.
In deciding whether to acquire or develop a particular property, we make assumptions regarding the expected future performance of that property. In particular, we estimate the return on our investment based on expected occupancy, rental rates and capital costs. If our financial projections with respect to a new property are inaccurate as a result of increases in capital costs or other factors, the property may fail to perform as we expected in analyzing our investment. Our estimate of the costs of repositioning or redeveloping an acquired property may prove to be inaccurate, which may result in our failure to meet our profitability goals. Additionally, we may
acquire new properties that are not fully leased, and the cash flow from existing operations may be insufficient to pay the operating expenses and debt service associated with that property.
We may experience losses caused by severe weather conditions or natural disasters, which could result in an increase of our or our tenants’ cost of insurance, a decrease in our anticipated revenues or a significant loss of the capital we have invested in a property
We maintain or require our tenants to maintain comprehensive insurance coverage on our properties with terms, conditions, limits and deductibles that we believe are appropriate given the relative risk and costs of such coverage, and we continually review our insurance programs and requirements. However, a large number of our properties are located in areas particularly susceptible to revenue loss, cost increase or damage caused by severe weather conditions or natural disasters such as hurricanes, earthquakes, tornadoes and floods. We believe, given current industry practice and analysis prepared by outside consultants, that our and our tenants’ insurance coverage is appropriate to cover reasonably anticipated losses that may be caused by hurricanes, earthquakes, tornadoes, floods and other severe weather conditions and natural disasters. Nevertheless, we are always subject to the risk that such insurance will not fully cover all losses and, depending on the severity of the event and the impact on our properties, such insurance may not cover a significant portion of the losses. These losses may lead to an increase of our and our tenants’ cost of insurance, a decrease in our anticipated revenues from an affected property and a loss of all or a portion of the capital we have invested in an affected property. In addition, we or our tenants may not purchase insurance under certain circumstances if the cost of insurance exceeds, in our or our tenants’ judgment, the value of the coverage relative to the risk of loss.
We may incur costs to remediate environmental contamination at our properties, which could have an adverse effect on our or our obligors’ business or financial condition
Under various federal and state laws, owners or operators of real estate may be required to respond to the presence or release of hazardous substances on the property and may be held liable for property damage, personal injuries or penalties that result from environmental contamination or exposure to hazardous substances. We may become liable to reimburse the government for damages and costs it incurs in connection with the contamination. Generally, such liability attaches to a person based on the person’s relationship to the property. Our tenants or borrowers are primarily responsible for the condition of the property. Moreover, we review environmental site assessments of the properties that we own or encumber prior to taking an interest in them. Those assessments are designed to meet the “all appropriate inquiry” standard, which we believe qualifies us for the innocent purchaser defense if environmental liabilities arise. Based upon such assessments, we do not believe that any of our properties are subject to material environmental contamination. However, environmental liabilities may be present in our properties and we may incur costs to remediate contamination, which could have a material adverse effect on our business or financial condition or the business or financial condition of our obligors.
Cybersecurity incidents could disrupt our business and result in the loss of confidential information
Our business is at risk from and may be impacted by cybersecurity attacks, including attempts to gain unauthorized access to our confidential data, and other electronic security breaches. Such cyber attacks can range from individual attempts to gain unauthorized access to our information technology systems to more sophisticated security threats. While we employ a number of measures to prevent, detect and mitigate these threats, there is no guarantee such efforts will be successful in preventing a cyber attack. Cybersecurity incidents could disrupt our business and compromise the confidential information of our employees, operators and tenants.
Our certificate of incorporation and by-laws contain anti-takeover provisions
Our certificate of incorporation and by-laws contain anti-takeover provisions (restrictions on share ownership and transfer and super majority stockholder approval requirements for business combinations) that could make it more difficult for or even prevent a third party from acquiring us without the approval of our incumbent Board of Directors. Provisions and agreements that inhibit or discourage takeover attempts could reduce the market value of our common stock.
Our success depends on key personnel whose continued service is not guaranteed
We are dependent on key personnel. Although we have entered into employment agreements with our executive officers, losing any one of them could, at least temporarily, have an adverse impact on our operations. We believe that losing more than one could have a material adverse impact on our business.
Risks Arising from Our Capital Structure
We may become more leveraged
Permanent financing for our investments is typically provided through a combination of public offerings of debt and equity securities and the incurrence or assumption of secured debt. The incurrence or assumption of indebtedness may cause us to become more leveraged, which could (1) require us to dedicate a greater portion of our cash flow to the payment of debt service, (2) make us more vulnerable to a downturn in the economy, (3) limit our ability to obtain additional financing, or (4) negatively affect our credit ratings or outlook by one or more of the rating agencies.
We are subject to covenants in our debt agreements that may restrict or limit our operations and acquisitions and our failure to comply with the covenants in our debt agreements could have a material adverse impact on our business, results of operations and financial condition
Our debt agreements contain various covenants, restrictions and events of default. Among other things, these provisions require us to maintain certain financial ratios and minimum net worth and impose certain limits on our ability to incur indebtedness, create liens and make investments or acquisitions. Breaches of these covenants could result in defaults under the instruments governing the applicable indebtedness, in addition to any other indebtedness cross-defaulted against such instruments. These defaults could have a material adverse impact on our business, results of operations and financial condition.
Limitations on our ability to access capital could have an adverse effect on our ability to make future investments or to meet our obligations and commitments
We cannot assure you that we will be able to raise the capital necessary to make future investments or to meet our obligations and commitments as they mature. Our access to capital depends upon a number of factors over which we have little or no control, including rising interest rates, inflation and other general market conditions; the market’s perception of our growth potential and our current and potential future earnings and cash distributions; the market price of the shares of our capital stock and the credit ratings of our debt securities; the financial stability of our lenders, which might impair their ability to meet their commitments to us or their willingness to make additional loans to us; changes in the credit ratings on U.S. government debt securities; or default or delay in payment by the United States of its obligations. If our access to capital is limited by these factors or other factors, it could negatively impact our ability to acquire properties, repay or refinance our indebtedness, fund operations or make distributions to our stockholders.
Downgrades in our credit ratings could have a material adverse impact on our cost and availability of capital
We plan to manage the Company to maintain a capital structure consistent with our current profile, but there can be no assurance that we will be able to maintain our current credit ratings. Any downgrades in terms of ratings or outlook by any or all of the rating agencies could have a material adverse impact on our cost and availability of capital, which could in turn have a material adverse impact on our consolidated results of operations, liquidity and/or financial condition.
Fluctuations in the value of foreign currencies could adversely affect our results of operations and financial position
As we expand our operations internationally, currency exchange rate fluctuations could affect our results of operations and financial position. We expect to generate an increasing portion of our revenue and expenses in such foreign currencies as the Canadian dollar and the British pound. Although we may enter into foreign exchange agreements with financial institutions and/or obtain local currency mortgage debt in order to reduce our exposure to fluctuations in the value of foreign currencies, we cannot assure you that foreign currency fluctuations will not have a material adverse effect on us.
Our entry into swap agreements may not effectively reduce our exposure to changes in interest rates or foreign currency exchange rates
We enter into swap agreements from time to time to manage some of our exposure to interest rate and foreign currency exchange rate volatility. These swap agreements involve risks, such as the risk that counterparties may fail to honor their obligations under these arrangements. In addition, these arrangements may not be effective in reducing our exposure to changes in interest rates or foreign currency exchange rates. When we use forward-starting interest rate swaps, there is a risk that we will not complete the long-term borrowing against which the swap is intended to hedge. If such events occur, our results of operations may be adversely affected.
Risks Arising from Our Status as a REIT
We might fail to qualify or remain qualified as a REIT
We intend to operate as a REIT under the Internal Revenue Code of 1986, as amended (the “Code”), and believe we have and will continue to operate in such a manner. If we lose our status as a REIT, we will face serious income tax consequences that will substantially reduce the funds available for satisfying our obligations and for distribution to our stockholders because:
• we would not be allowed a deduction for distributions to stockholders in computing our taxable income and would be subject to U.S. federal income tax at regular corporate rates;
• we could be subject to the federal alternative minimum tax and possibly increased state and local taxes; and
• unless we are entitled to relief under statutory provisions, we could not elect to be subject to tax as a REIT for four taxable years following the year during which we were disqualified.
Since REIT qualification requires us to meet a number of complex requirements, it is possible that we may fail to fulfill them, and if we do, our earnings will be reduced by the amount of U.S. federal and other income taxes owed. A reduction in our earnings would affect the amount we could distribute to our stockholders. If we do not qualify as a REIT, we would not be required to make distributions to stockholders since a non-REIT is not required to pay dividends to stockholders in order to maintain REIT status or avoid an excise tax. See “Item 1 - Business - Taxation - Federal Income Tax Considerations” above for a discussion of the provisions of the Code that apply to us and the effects of failure to qualify as a REIT.
In addition, if we fail to qualify as a REIT, all distributions to stockholders would continue to be treated as dividends to the extent of our current and accumulated earnings and profits, although corporate stockholders may be eligible for the dividends received deduction, and individual stockholders may be eligible for taxation at the rates generally applicable to long-term capital gains (currently at a maximum rate of 20%) with respect to distributions.
As a result of all these factors, our failure to qualify as a REIT also could impair our ability to implement our business strategy and would adversely affect the value of our common stock.
Qualification as a REIT involves the application of highly technical and complex Code provisions for which there are only limited judicial and administrative interpretations. The determination of various factual matters and circumstances not entirely within our control may affect our ability to remain qualified as a REIT. Although we believe that we qualify as a REIT, we cannot assure you that we will continue to qualify or remain qualified as a REIT for U.S. federal income tax purposes. See “Item 1 - Business - Taxation - Federal Income Tax Considerations” above.
Certain subsidiaries might fail to qualify or remain qualified as a REIT
We own interests in a number of entities which have elected to be taxed as REITs for federal income tax purposes, some of which we consolidate for financial reporting purposes but each of which is treated as a separate REIT for federal income tax purposes (each a “Subsidiary REIT”). To qualify as a REIT, each Subsidiary REIT must independently satisfy all of the REIT qualification requirements under the Code, together with all other rules applicable to REITs. Provided that each Subsidiary REIT qualifies as a REIT, our interests in the Subsidiary REITs will be treated as qualifying real estate assets for purposes of the REIT asset tests. See “Item 1 - Business - Taxation - Federal Income Tax Considerations - Qualification as a REIT - Asset Tests” above. If a Subsidiary REIT fails to qualify as a REIT in any taxable year, such Subsidiary REIT will be subject to federal and state income taxes and may not be able to qualify as a REIT for the four subsequent taxable years. Any such failure could have an adverse effect on our ability to comply with the REIT income and asset tests, and thus our ability to qualify as a REIT, unless we are able to avail ourselves of certain relief provisions.
The 90% annual distribution requirement will decrease our liquidity and may limit our ability to engage in otherwise beneficial transactions
To comply with the 90% distribution requirement applicable to REITs and to avoid the nondeductible excise tax, we must make distributions to our stockholders. See “Item 1 - Business - Taxation - Federal Income Tax Considerations - Qualification as a REIT - Annual Distribution Requirements” above. Although we anticipate that we generally will have sufficient cash or liquid assets to enable us to satisfy the REIT distribution requirement, it is possible that, from time to time, we may not have sufficient cash or other liquid assets to meet the 90% distribution requirement, or we may decide to retain cash or distribute such greater amount as may be necessary to avoid income and excise taxation. This may be due to timing differences between the actual receipt of income and actual payment of deductible expenses, on the one hand, and the inclusion of that income and deduction of those expenses in arriving at our taxable income, on the other hand. In addition, non-deductible expenses such as principal amortization or repayments or capital expenditures in excess of non-cash deductions may cause us to fail to have sufficient cash or liquid assets to enable us to satisfy the 90% distribution requirement. In the event that timing differences occur, or we deem it appropriate to retain cash, we may borrow funds, issue additional equity securities (although we cannot assure you that we will be able to do so), pay taxable stock dividends, if possible, distribute other property or securities or engage in another transaction intended to enable us to meet the REIT distribution requirements. This may require us to raise additional capital to meet our obligations.
The lease of qualified health care properties to a taxable REIT subsidiary is subject to special requirements
We lease certain qualified health care properties to taxable REIT subsidiaries (or limited liability companies of which the taxable REIT subsidiaries are members), which lessees contract with managers (or related parties) to manage the health care operations at these properties. The rents from this taxable REIT subsidiary lessee structure are treated as qualifying rents from real property if (1) they are paid pursuant to an arms-length lease of a qualified health care property with a taxable REIT subsidiary and (2) the manager qualifies as an eligible independent contractor (as defined in the Code). If any of these conditions are not satisfied, then the rents will not be qualifying rents. See “Item 1 - Business - Taxation - Federal Income Tax Considerations - Qualification as a REIT - Income Tests” above.
If certain sale-leaseback transactions are not characterized by the Internal Revenue Service as “true leases,” we may be subject to adverse tax consequences
We have purchased certain properties and leased them back to the sellers of such properties, and we may enter into similar transactions in the future. We intend for any such sale-leaseback transaction to be structured in such a manner that the lease will be characterized as a “true lease,” thereby allowing us to be treated as the owner of the property for U.S. federal income tax purposes. However, depending on the terms of any specific transaction, the Internal Revenue Service might take the position that the transaction is not a “true lease” but is more properly treated in some other manner. In the event any sale-leaseback transaction is challenged and successfully re-characterized by the Internal Revenue Service, we would not be entitled to claim the deductions for depreciation and cost recovery generally available to an owner of property. Furthermore, if a sale-leaseback transaction were so re-characterized, we might fail to satisfy the REIT asset tests or income tests and, consequently, could lose our REIT status effective with the year of re-characterization. See “Item 1 - Business - Taxation - Federal Income Tax Considerations - Qualification as a REIT - Asset Tests” and “Item 1 - Business - Taxation - Federal Income Tax Considerations - Qualification as a REIT - Income Tests” above. Alternatively, the amount of our REIT taxable income could be recalculated, which may cause us to fail to meet the REIT annual distribution requirements for a taxable year. See “Item 1 - Business - Taxation - Federal Income Tax Considerations - Qualification as a REIT - Annual Distribution Requirements” above.

ITEM 1B - UNRESOLVED STAFF COMMENTS
Item 1B. Unresolved Staff Comments
None.

ITEM 2 - PROPERTIES
Item 2. Properties
We own our corporate headquarters located at 4500 Dorr Street, Toledo, Ohio 43615. We also lease corporate offices in California, Canada and the United Kingdom and have ground leases relating to certain of our properties. The following table sets forth certain information regarding the properties that comprise our consolidated real property and real estate loan investments as of December 31, 2015 (dollars in thousands and annualized revenues adjusted for timing of investment):
Triple-Net
Seniors Housing Operating
Property Location
Number of Properties
Total Investment
Annualized Revenues
Number of Properties
Total Investment
Annualized Revenues
Alabama
$
36,064
$
3,777
-
$
-
$
-
Arizona
26,229
2,129
61,590
21,643
California
521,032
53,635
1,401,544
406,568
Colorado
220,438
19,019
145,554
39,599
Connecticut
181,567
21,292
400,887
127,418
District Of Columbia
-
-
-
64,807
13,893
Delaware
161,880
19,660
21,586
6,210
Florida
593,363
55,001
576,254
77,420
Georgia
102,828
9,414
124,942
36,295
Iowa
46,916
4,324
33,276
8,960
Idaho
33,326
3,551
-
-
-
Illinois
276,616
25,876
447,407
104,156
Indiana
535,615
53,270
-
-
-
Kansas
228,905
16,427
71,771
17,657
Kentucky
98,976
14,957
39,434
12,595
Louisiana
21,451
3,349
52,156
11,718
Massachusetts
372,189
53,489
941,674
211,109
Maryland
401,734
41,357
84,221
32,512
Maine
-
-
-
50,666
17,820
Michigan
102,612
9,968
113,041
25,867
Minnesota
210,533
14,026
115,688
23,698
Missouri
28,320
1,171
137,698
20,141
Mississippi
30,147
2,444
-
-
-
Montana
6,266
-
-
-
North Carolina
391,386
38,795
41,460
7,134
Nebraska
34,033
15,342
-
-
-
New Hampshire
172,718
23,410
119,954
29,723
New Jersey
1,420,271
144,374
244,350
65,915
New Mexico
-
-
-
19,038
1,593
Nevada
86,164
12,217
37,350
9,946
New York
201,410
18,051
349,716
77,276
Ohio
229,031
38,171
198,222
29,215
Oklahoma
150,460
12,968
38,922
4,179
Oregon
75,671
6,337
-
-
-
Pennsylvania
1,331,667
158,356
83,081
37,106
Rhode Island
43,802
6,031
69,010
21,156
South Carolina
34,602
5,550
-
-
-
Tennessee
165,388
24,367
50,805
14,790
Texas
594,463
61,905
510,222
98,671
Utah
31,724
2,461
17,545
8,817
Virginia
202,859
20,033
38,493
15,715
Vermont
25,393
3,511
28,080
6,864
Washington
455,323
44,724
331,280
62,173
Wisconsin
134,120
14,474
-
-
-
West Virginia
376,283
50,902
-
-
-
Total domestic
10,393,775
1,131,063
7,061,726
1,705,550
Canada
277,977
15,763
2,058,121
406,614
United Kingdom
1,123,413
118,428
1,457,237
303,158
Total international
1,401,390
134,191
3,515,358
709,772
Grand total
$
11,795,165
$
1,265,253
$
10,577,084
$
2,415,322
Outpatient Medical
Property Location
Number of Properties
Total Investment
Annualized Revenues
Alaska
$
22,667
$
2,809
Alabama
31,637
5,308
Arkansas
24,382
1,027
Arizona
68,885
8,213
California
880,782
67,173
Colorado
12,642
1,804
Connecticut
9,886
-
Florida
465,472
61,459
Georgia
162,880
20,585
Iowa
6,974
2,193
Illinois
53,688
7,971
Indiana
152,126
17,326
Kansas
78,474
12,059
Kentucky
8,153
Maryland
80,535
5,396
Maine
21,649
2,805
Michigan
15,983
2,280
Minnesota
179,786
23,689
Missouri
149,053
17,610
North Carolina
58,086
6,506
Nebraska
36,815
5,794
New Hampshire
14,673
1,511
New Jersey
215,048
37,389
New Mexico
34,665
3,498
Nevada
46,748
3,802
New York
84,330
7,768
Ohio
76,546
13,386
Oklahoma
25,843
3,279
Oregon
9,763
1,267
South Carolina
26,910
2,282
Tennessee
78,906
9,968
Texas
891,594
87,667
Virginia
51,645
7,800
Washington
188,369
20,317
Wisconsin
250,839
28,243
Total
$
4,516,434
$
500,954
The following table sets forth occupancy, coverages and average annualized revenues for certain property types (excluding investments in unconsolidated entities):
Occupancy(1)
Coverages(1,2)
Average Annualized Revenues(3)
Triple-net(4)
87.2%
87.7%
1.49x
1.54x
$
16,047
$
14,562
per bed/unit
Seniors housing operating(5)
91.0%
90.3%
n/a
n/a
60,260
67,376
per unit
Outpatient medical(6)
95.1%
94.4%
n/a
n/a
per sq. ft.
(1) We use unaudited, periodic financial information provided solely by tenants/borrowers to calculate occupancy and coverages for properties other than medical office buildings and have not independently verified the information.
(2) Represents the ratio of our triple-net customers' earnings before interest, taxes, depreciation, amortization, rent and management fees to contractual rent or interest due us. Data reflects the 12 months ended September 30 for the periods presented.
(3) Represents annualized revenues divided by total beds, units or square feet as presented in the tables above.
(4) Occupancy represents average quarterly operating occupancy based on the quarters ended September 30 and excludes properties that are unstabilized, closed or for which data is not available or meaningful.
(5) Occupancy for seniors housing operating represents average occupancy for the three months ended December 31.
(6) Outpatient medical facilities occupancy represents the percentage of total rentable square feet leased and occupied (including month-to-month and holdover leases and excluding terminations) as of December 31.
The following table sets forth information regarding lease expirations for certain portions of our portfolio as of December 31, 2015 (dollars in thousands):
Expiration Year
Thereafter
Triple-net:
Properties
Base rent(1)
$
$
12,846
$
41,162
$
1,368
$
14,571
$
35,797
$
32,959
$
$
12,130
$
66,118
$
948,129
% of base rent
0.0%
1.1%
3.5%
0.1%
1.2%
3.1%
2.8%
0.1%
1.0%
5.7%
81.3%
Units
1,165
3,686
1,076
3,625
4,731
4,189
56,319
% of units
0.0%
1.5%
4.9%
0.2%
1.4%
4.8%
6.2%
0.1%
1.1%
5.5%
74.3%
Outpatient medical:
Square feet
792,914
1,092,946
933,888
1,085,684
1,251,256
1,182,630
2,178,650
1,103,893
1,411,610
585,459
3,691,978
Base rent(1)
$
21,884
$
27,369
$
24,225
$
27,762
$
32,365
$
29,630
$
45,348
$
26,609
$
37,890
$
17,156
$
69,591
% of base rent
6.1%
7.6%
6.7%
7.7%
9.0%
8.2%
12.6%
7.4%
10.5%
4.8%
19.4%
Leases
% of leases
12.9%
12.9%
11.7%
11.8%
11.1%
8.5%
8.5%
6.9%
4.6%
3.4%
7.7%
(1) The most recent monthly base rent including straight line for leases with fixed escalators or annual cash rents with contingent escalators. Base rent does not include tenant recoveries or amortization of above and below market lease intangibles.

ITEM 3 - LEGAL PROCEEDINGS
Item 3. Legal Proceedings
From time to time, there are various legal proceedings pending to which we are a party or to which some of our properties are subject arising in the normal course of business. We do not believe that the ultimate resolution of these proceedings will have a material adverse effect on our consolidated financial position or results of operations.

ITEM 4 - RESERVED
Item 4. Mine Safety Disclosures
None.
PART II

ITEM 5 - MARKET FOR REGISTRANT'S COMMON EQUITY
Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities
There were 4,965 stockholders of record as of January 31, 2016. The following table sets forth, for the periods indicated, the high and low prices of our common stock on the New York Stock Exchange (NYSE:HCN), and common dividends paid per share:
Sales Price
Dividends Paid
High
Low
Per Share
First Quarter
$
84.88
$
73.20
$
0.825
Second Quarter
79.60
65.48
0.825
Third Quarter
70.22
61.00
0.825
Fourth Quarter
71.25
58.21
0.825
First Quarter
$
59.93
$
52.90
$
0.795
Second Quarter
65.25
58.91
0.795
Third Quarter
68.36
61.42
0.795
Fourth Quarter
78.17
62.05
0.795
Our Board of Directors has approved a new quarterly cash dividend rate of $0.86 per share of common stock per quarter, commencing with the February 2016 dividend. The declaration and payment of quarterly dividends remains subject to the review and approval of the Board of Directors.
Stockholder Return Performance Presentation
Set forth below is a line graph comparing the yearly percentage change and the cumulative total stockholder return on our shares of common stock against the cumulative total return of the S & P Composite-500 Stock Index and the FTSE NAREIT Equity Index. As of December 31, 2015, 160 companies comprised the FTSE NAREIT Equity Index. The Index consists of REITs identified by NAREIT as equity (those REITs which have at least 75% of their investments in real property). The data are based on the closing prices as of December 31 for each of the five years. 2010 equals $100 and dividends are assumed to be reinvested.
12/31/10
12/31/11
12/31/12
12/31/13
12/31/14
12/31/15
S & P 500
100.00
102.11
118.45
156.82
178.28
180.75
Welltower Inc.
100.00
121.27
143.36
131.29
194.98
183.82
FTSE NAREIT Equity
100.00
108.29
127.85
131.01
170.49
175.94
Except to the extent that we specifically incorporate this information by reference, the foregoing Stockholder Return Performance Presentation shall not be deemed incorporated by reference by any general statement incorporating by reference this Annual Report on Form 10-K into any filing under the Securities Act of 1933, as amended, or under the Securities Exchange Act of 1934, as amended. This information shall not otherwise be deemed filed under such Acts.
Issuer Purchases of Equity Securities
Period
Total Number of Shares Purchased(1)
Average Price Paid Per Share
Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs(2)
Maximum Number of Shares that May Yet Be Purchased Under the Plans or Programs
October 1, 2015 through October 31, 2015
-
$
-
November 1, 2015 through November 30, 2015
59.01
December 1, 2015 through December 31, 2015
-
-
Totals
$
59.01
(1) During the three months ended December 31, 2015, the Company acquired shares of common stock held by employees who tendered owned shares to satisfy tax withholding obligations.
(2) No shares were purchased as part of publicly announced plans or programs.

ITEM 6 - SELECTED FINANCIAL DATA
Item 6. Selected Financial Data
The following selected financial data for the five years ended December 31, 2015 are derived from our audited consolidated financial statements (in thousands, except per share data):
Year Ended December 31,
Operating Data
Revenues
$
1,313,182
$
1,805,044
$
2,880,608
$
3,343,546
$
3,859,826
Expenses
1,200,979
1,619,132
2,778,363
2,959,333
3,223,709
Income from continuing operations before income taxes and income (loss) from unconsolidated entities
112,203
185,912
102,245
384,213
636,117
Income tax (expense) benefit
(1,388)
(7,612)
(7,491)
1,267
(6,451)
Income (loss) from unconsolidated entities
5,772
2,482
(8,187)
(27,426)
(21,504)
Income from continuing operations
116,587
180,782
86,567
358,054
608,162
Income from discontinued operations, net
96,129
114,058
51,713
7,135
-
Gain (loss) on real estate dispositions, net
-
-
-
147,111
280,387
Net income
212,716
294,840
138,280
512,300
888,549
Preferred stock dividends
60,502
69,129
66,336
65,408
65,406
Preferred stock redemption charge
-
6,242
-
-
-
Net income (loss) attributable to noncontrolling interests
(4,894)
(2,415)
(6,770)
4,799
Net income attributable to common stockholders
$
157,108
$
221,884
$
78,714
$
446,745
$
818,344
Other Data
Average number of common shares outstanding:
Basic
173,741
224,343
276,929
306,272
348,240
Diluted
174,401
225,953
278,761
307,747
349,424
Per Share Data
Basic:
Income from continuing operations attributable to common stockholders
$
0.35
$
0.48
$
0.10
$
1.44
$
2.35
Discontinued operations, net
0.55
0.51
0.19
0.02
-
Net income attributable to common stockholders *
$
0.90
$
0.99
$
0.28
$
1.46
$
2.35
Diluted:
Income from continuing operations attributable to common stockholders
$
0.35
$
0.48
$
0.10
$
1.43
$
2.34
Discontinued operations, net
0.55
0.50
0.19
0.02
-
Net income attributable to common stockholders *
$
0.90
$
0.98
$
0.28
$
1.45
$
2.34
Cash distributions per common share
$
2.835
$
2.96
$
3.06
$
3.18
$
3.30
December 31,
Balance Sheet Data
Net real estate investments
$
13,942,350
$
17,423,009
$
21,680,221
$
22,851,196
$
26,888,685
Total assets(1)
14,878,245
19,491,552
23,026,666
24,962,923
29,023,845
Total long-term obligations(1)
7,194,391
8,474,342
10,594,723
10,776,640
12,967,686
Total liabilities(1)
7,565,948
8,936,441
11,235,296
11,403,465
13,664,877
Total preferred stock
1,010,417
1,022,917
1,017,361
1,006,250
1,006,250
Total equity
7,278,647
10,520,519
11,756,331
13,473,049
15,175,885
* Amounts may not sum due to rounding
(1) In 2015, we adopted new guidance on the presentation of debt issuance costs. This guidance requires that debt issuance costs related to a recognized debt liability be presented in the balance sheet as a direct deduction from the carrying amount of the debt liability. Adopting this guidance resulted in a reduction to total assets, total long-term obligations and total liabilities, which are presented for all periods above in accordance with this new guidance. See Note 2 to our consolidated financial statements for additional information.

ITEM 7 - MANAGEMENT'S DISCUSSION AND ANALYSIS
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations
EXECUTIVE SUMMARY
Company Overview
Business Strategy
Capital Market Outlook
Key Transactions in 2015
Key Performance Indicators, Trends and Uncertainties
Corporate Governance
LIQUIDITY AND CAPITAL RESOURCES
Sources and Uses of Cash
Off-Balance Sheet Arrangements
Contractual Obligations
Capital Structure
RESULTS OF OPERATIONS
Summary
Triple-net
Seniors Housing Operating
Outpatient Medical
Non-Segment/Corporate
OTHER
Non-GAAP Financial Measures
Critical Accounting Policies
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations
The following discussion and analysis is based primarily on the consolidated financial statements of Welltower Inc. for the periods presented and should be read together with the notes thereto contained in this Annual Report on Form 10-K. Other important factors are identified in “Item 1 - Business” and “Item 1A - Risk Factors” above.
Executive Summary
Company Overview
Welltower Inc. (NYSE: HCN), an S&P 500 company headquartered in Toledo, Ohio, is driving the transformation of health care infrastructure. The Company invests with leading seniors housing operators, post-acute providers and health systems to fund the real estate and infrastructure needed to scale innovative care delivery models and improve people’s wellness and overall health care experience. WelltowerTM, a real estate investment trust (“REIT”), owns properties in major, high-growth markets in the United States, Canada and the United Kingdom, consisting of seniors housing and post-acute communities and outpatient medical properties. Our capital programs, when combined with comprehensive planning, development and property management services, make us a single-source solution for acquiring, planning, developing, managing, repositioning and monetizing real estate assets.
The following table summarizes our consolidated portfolio for the year ended December 31, 2015 (dollars in thousands):
Net Operating
Percentage of
Number of
Type of Property
Income (NOI)(1)
NOI
Properties
Triple-net
$
1,200,301
53.6%
Seniors housing operating
701,262
31.4%
Outpatient medical
334,915
15.0%
Totals
$
2,236,478
100.0%
1,426
(1) Excludes our share of investments in unconsolidated entities and non-segment/corporate NOI. Entities in which we have a joint venture with a minority partner are shown at 100% of the joint venture amount.
Business Strategy
Our primary objectives are to protect stockholder capital and enhance stockholder value. We seek to pay consistent cash dividends to stockholders and create opportunities to increase dividend payments to stockholders as a result of annual increases in net operating income and portfolio growth. To meet these objectives, we invest across the full spectrum of seniors housing and health care real estate and diversify our investment portfolio by property type, relationship and geographic location.
Substantially all of our revenues are derived from operating lease rentals, resident fees and services, and interest earned on outstanding loans receivable. These items represent our primary sources of liquidity to fund distributions and depend upon the continued ability of our obligors to make contractual rent and interest payments to us and the profitability of our operating properties. To the extent that our customers/partners experience operating difficulties and become unable to generate sufficient cash to make payments to us, there could be a material adverse impact on our consolidated results of operations, liquidity and/or financial condition. To mitigate this risk, we monitor our investments through a variety of methods determined by the type of property. Our proactive and comprehensive asset management process for seniors housing properties generally includes review of monthly financial statements and other operating data for each property, review of obligor/partner creditworthiness, property inspections, and review of covenant compliance relating to licensure, real estate taxes, letters of credit and other collateral. Our internal property management division actively manages and monitors the outpatient medical portfolio with a comprehensive process including review of, among other things, tenant relations, lease expirations, the mix of health service providers, hospital/health system relationships, property performance, capital improvement needs, and market conditions. In monitoring our portfolio, our personnel use a proprietary database to collect and analyze property-specific data. Additionally, we conduct extensive research to ascertain industry trends. We evaluate the operating environment in each property’s market to determine the likely trend in operating performance of the facility. When we identify unacceptable trends, we seek to mitigate, eliminate or transfer the risk. Through these efforts, we are generally able to intervene at an early stage to address any negative trends, and in so doing, support both the collectability of revenue and the value of our investment.
In addition to our asset management and research efforts, we also structure our investments to help mitigate payment risk. Operating leases and loans are normally credit enhanced by guaranties and/or letters of credit. In addition, operating leases are typically structured as master leases and loans are generally cross-defaulted and cross-collateralized with other real estate loans, operating leases or agreements between us and the obligor and its affiliates.
For the year ended December 31, 2015, rental income and resident fees represented 41% and 56%, respectively, of total revenues. Substantially all of our operating leases are designed with escalating rent structures. Leases with fixed annual rental escalators are generally recognized on a straight-line basis over the initial lease period, subject to a collectability assessment. Rental income related to leases with contingent rental escalators is generally recorded based on the contractual cash rental payments due for the period. Our
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations
yield on loans receivable depends upon a number of factors, including the stated interest rate, the average principal amount outstanding during the term of the loan and any interest rate adjustments.
Our primary sources of cash include rent and interest receipts, resident fees and services, borrowings under our primary unsecured credit facility, public issuances of debt and equity securities, proceeds from investment dispositions and principal payments on loans receivable. Our primary uses of cash include dividend distributions, debt service payments (including principal and interest), real property investments (including acquisitions, capital expenditures, construction advances and transaction costs), loan advances, property operating expenses and general and administrative expenses. Depending upon the availability and cost of external capital, we believe our liquidity is sufficient to fund these uses of cash.
We also continuously evaluate opportunities to finance future investments. New investments are generally funded from temporary borrowings under our primary unsecured credit facility, internally generated cash and the proceeds from investment dispositions. Our investments generate cash from net operating income and principal payments on loans receivable. Permanent financing for future investments, which generally replaces funds drawn under our primary unsecured credit facility, has historically been provided through a combination of the issuance of public debt and equity securities and the incurrence or assumption of secured debt.
Depending upon market conditions, we believe that new investments will be available in the future with spreads over our cost of capital that will generate appropriate returns to our stockholders. It is also possible that investment dispositions may occur in the future. To the extent that investment dispositions exceed new investments, our revenues and cash flows from operations could be adversely affected. We expect to reinvest the proceeds from any investment dispositions in new investments. To the extent that new investment requirements exceed our available cash on-hand, we expect to borrow under our primary unsecured credit facility. At December 31, 2015, we had $360,908,000 of cash and cash equivalents, $61,782,000 of restricted cash and $1,610,075,000 of available borrowing capacity under our primary unsecured credit facility.
Capital Market Outlook
We believe the capital markets remain supportive of our investment strategy. For the year ended December 31, 2015, we raised $3,272,283,000 in aggregate gross proceeds through the issuance of common stock and unsecured debt. The capital raised, in combination with available cash and borrowing capacity under our primary unsecured credit facility, supported pro rata gross new investments of $4,819,684,000 for the year. We expect attractive investment opportunities to remain available in the future as we continue to leverage the benefits of our relationship investment strategy.
Key Transactions in 2015
Capital. In February 2015, we completed the public issuance of 19,550,000 shares of common stock at a price of $75.50 per share for approximate gross proceeds of $1,476,025,000. This was the largest overnight common stock offering and the highest offering price in our history. In May 2015, we issued $750,000,000 of 4.0% senior unsecured notes due 2025, generating approximately $743,407,000 of net proceeds. This was the largest single tranche U.S. debt offering in our history. In October 2015, we re-opened this tranche and issued an additional $500,000,000 of these notes, generating net proceeds of approximately $484,660,000. Also during October 2015, we raised approximately $47,463,000 under our Equity Shelf Program (as defined below). In November 2015, we issued $300,000,000 of Canadian-denominated 3.35% senior unsecured notes due 2020, generating net proceeds of $223,367,000. Also, for the year ended December 31, 2015, we raised $272,531,000 through our dividend reinvestment program.
Investments. The following summarizes our acquisitions and joint venture investments made during the year ended December 31, 2015 (dollars in thousands):
Properties
Investment Amount(1)
Capitalization Rates(2)
Book Amount(3)
Triple-net
$
1,501,537
6.8%
$
1,506,179
Seniors housing operating
2,093,482
6.2%
2,814,878
Outpatient medical
170,499
6.0%
540,338
Total acquisitions/JVs
$
3,765,518
6.4%
$
4,861,395
(1) Represents stated purchase price including cash and any assumed debt but excludes fair value adjustments pursuant to U.S. GAAP.
(2) Represents annualized contractual or projected income to be received in cash divided by investment amounts.
(3) Represents amounts recorded on our books including fair value adjustments pursuant to U.S. GAAP. See Note 3 to our consolidated financial statements for additional information.
Dispositions. The following summarizes property dispositions made during the year ended December 31, 2015 (dollars in thousands):
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations
Properties
Proceeds(1)
Capitalization Rates(2)
Book Amount(3)
Triple-net
$
440,576
7.7%
$
362,024
Outpatient medical
608,101
5.2%
181,553
Total property sales
$
1,048,677
6.2%
$
543,577
(1) Represents pro rata proceeds received upon disposition including any seller financing.
(2) Represents annualized contractual income that was being received in cash at date of disposition divided by disposition proceeds.
(3) Represents carrying value of assets at time of disposition. See Note 5 to our audited consolidated financial statements for additional information.
Dividends. Our Board of Directors increased the annual cash dividend to $3.44 per common share ($0.86 per share quarterly), as compared to $3.30 per common share for 2015, beginning in February 2016. The dividend declared for the quarter ended December 31, 2015 represents the 179th consecutive quarterly dividend payment.
Key Performance Indicators, Trends and Uncertainties
We utilize several key performance indicators to evaluate the various aspects of our business. These indicators are discussed below and relate to operating performance, credit strength and concentration risk. Management uses these key performance indicators to facilitate internal and external comparisons to our historical operating results, in making operating decisions and for budget planning purposes.
Operating Performance. We believe that net income attributable to common stockholders (“NICS”) is the most appropriate earnings measure. Other useful supplemental measures of our operating performance include funds from operations (“FFO”), net operating income from continuing operations (“NOI”) and same store cash NOI (“SSCNOI”); however, these supplemental measures are not defined by U.S. generally accepted accounting principles (“U.S. GAAP”). Please refer to the section entitled “Non-GAAP Financial Measures” for further discussion and reconciliations of FFO, NOI and SSCNOI. These earnings measures are widely used by investors and analysts in the valuation, comparison and investment recommendations of companies. The following table reflects the recent historical trends of our operating performance measures for the periods presented (in thousands):
Year Ended December 31,
Net income attributable to common stockholders
$
78,714
$
446,745
$
818,344
Funds from operations
924,884
1,174,081
1,409,640
Net operating income from continuing operations
1,673,795
1,940,188
2,237,569
Same store cash net operating income
1,145,629
1,192,245
1,213,752
Credit Strength. We measure our credit strength both in terms of leverage ratios and coverage ratios. The leverage ratios indicate how much of our balance sheet capitalization is related to long-term debt. The coverage ratios indicate our ability to service interest and fixed charges (interest, secured debt principal amortization and preferred dividends). We expect to maintain capitalization ratios and coverage ratios sufficient to maintain compliance with our debt covenants. The coverage ratios are based on adjusted earnings before interest, taxes, depreciation and amortization (“Adjusted EBITDA”) which is discussed in further detail, and reconciled to net income, below in “Non-GAAP Financial Measures.” Leverage ratios and coverage ratios are widely used by investors, analysts and rating agencies in the valuation, comparison, investment recommendations and rating of companies. The following table reflects the recent historical trends for our credit strength measures for the periods presented:
Year Ended December 31,
Debt to book capitalization ratio
48%
45%
46%
Debt to undepreciated book capitalization ratio
43%
40%
41%
Debt to market capitalization ratio
39%
29%
33%
Adjusted interest coverage ratio
3.23x
3.86x
4.57x
Adjusted fixed charge coverage ratio
2.56x
3.06x
3.61x
Concentration Risk. We evaluate our concentration risk in terms of NOI by property mix, relationship mix and geographic mix. Concentration risk is a valuable measure in understanding what portion of our NOI could be at risk if certain sectors were to
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations
experience downturns. Property mix measures the portion of our NOI that relates to our various property types. Relationship mix measures the portion of our NOI that relates to our top five relationships. Geographic mix measures the portion of our NOI that relates to our top five states (or international equivalents). The following table reflects our recent historical trends of concentration risk by NOI for the periods indicated below:
December 31,
Property mix:(1)
Triple-net
53%
53%
54%
Seniors housing operating
32%
33%
31%
Outpatient medical
15%
14%
15%
Relationship mix:(1)
Genesis Healthcare
17%
16%
17%
Sunrise Senior Living(2)
13%
15%
13%
Brookdale Senior Living
7%
9%
7%
Revera(2)
3%
4%
5%
Benchmark Senior Living
4%
4%
4%
Remaining customers
56%
52%
54%
Geographic mix:(1)
California
10%
10%
10%
United Kingdom
6%
7%
9%
New Jersey
9%
8%
8%
Texas
7%
7%
7%
Pennsylvania
6%
5%
6%
Remaining
62%
63%
60%
(1) Excludes our share of investments in unconsolidated entities and non-segment/corporate NOI. Entities in which we have a joint venture with a minority partner are shown at 100% of the joint venture amount.
(2) Revera owns a controlling interest in Sunrise Senior Living.
We evaluate our key performance indicators in conjunction with current expectations to determine if historical trends are indicative of future results. Our expected results may not be achieved and actual results may differ materially from our expectations. Factors that may cause actual results to differ from expected results are described in more detail in “Item 1 - Business - Cautionary Statement Regarding Forward-Looking Statements” and “Item 1A - Risk Factors” and other sections of this Annual Report on Form 10-K. Management regularly monitors economic and other factors to develop strategic and tactical plans designed to improve performance and maximize our competitive position. Our ability to achieve our financial objectives is dependent upon our ability to effectively execute these plans and to appropriately respond to emerging economic and company-specific trends. Please refer to “Item 1 - Business,” “Item 1A - Risk Factors” and “Item 7 - Management’s Discussion and Analysis of Financial Condition and Results of Operations” in this Annual Report on Form 10-K for further discussion of these risk factors.
Corporate Governance
Maintaining investor confidence and trust is important in today’s business environment. Our Board of Directors and management are strongly committed to policies and procedures that reflect the highest level of ethical business practices. Our corporate governance guidelines provide the framework for our business operations and emphasize our commitment to increase stockholder value while meeting all applicable legal requirements. These guidelines meet the listing standards adopted by the New York Stock Exchange and are available on the Internet at www.welltower.com/#investors/governance. The information on our website is not incorporated by reference in this Annual Report on Form 10-K, and our web address is included as an inactive textual reference only.
Liquidity and Capital Resources
Sources and Uses of Cash
Our primary sources of cash include rent and interest receipts, resident fees and services, borrowings under our primary unsecured credit facility, public issuances of debt and equity securities, proceeds from investment dispositions and principal payments on loans receivable. Our primary uses of cash include dividend distributions, debt service payments (including principal and interest), real property investments (including acquisitions, capital expenditures, construction advances and transaction costs), loan advances,
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations
property operating expenses, and general and administrative expenses. These sources and uses of cash are reflected in our Consolidated Statements of Cash Flows and are discussed in further detail below. The following is a summary of our sources and uses of cash flows (dollars in thousands):
Year Ended
One Year Change
Year Ended
One Year Change
Two Year Change
December,
December,
December,
$
%
$
%
$
%
Beginning cash and cash equivalents
$
1,033,764
$
158,780
$
(874,984)
-85%
$
473,726
$
314,946
198%
$
(560,038)
-54%
Cash provided from (used in):
Operating activities
988,497
1,138,670
150,173
15%
1,373,468
234,798
21%
384,971
39%
Investing activities
(3,531,593)
(2,126,206)
1,405,387
-40%
(3,484,160)
(1,357,954)
64%
47,433
-1%
Financing activities
1,667,670
1,303,172
(364,498)
-22%
2,006,449
703,277
54%
338,779
20%
Effect of foreign currency translation on cash and cash equivalents
(690)
(1,132)
n/a
(8,575)
(7,885)
1,143%
(9,017)
n/a
Ending cash and cash equivalents
$
158,780
$
473,726
$
314,946
198%
$
360,908
$
(112,818)
-24%
$
202,128
127%
Operating Activities. The change in net cash provided from operating activities is primarily attributable to increases in NOI which is primarily due to acquisitions. Please see “Results of Operations” for further discussion. For the years ended December 31, 2013, 2014 and 2015, cash flows from operations exceeded cash distributions to stockholders.
Investing Activities. The changes in net cash used in investing activities are primarily attributable to acquisitions, real estate loans receivable and investments in unconsolidated entities which are summarized above in “Key Transactions in 2015.” Please refer to Notes 3 and 6 of our consolidated financial statements for additional information. The following is a summary of non-acquisition capital improvements (dollars in thousands):
Year Ended
One Year Change
Year Ended
One Year Change
Two Year Change
December 31,
December 31,
December 31,
$
%
$
%
$
%
New development
$
247,560
$
197,881
$
(49,679)
-20%
$
244,561
$
46,680
24%
$
(2,999)
-1%
Recurring capital expenditures, tenant improvements and lease commissions
60,984
59,134
(1,850)
-3%
64,458
5,324
9%
3,474
6%
Renovations, redevelopments and other capital improvements
74,848
73,646
(1,202)
-2%
123,294
49,648
67%
48,446
65%
Total
$
383,392
$
330,661
$
(52,731)
-14%
$
432,313
$
101,652
31%
$
48,921
13%
The change in new development is primarily due to the number and size of construction projects on-going during the relevant periods. Renovations, redevelopments and other capital improvements include expenditures to maximize property value, increase net operating income, maintain a market-competitive position and/or achieve property stabilization.
Financing Activities. The changes in net cash provided from financing activities are primarily attributable to changes related to our long-term debt arrangements, the issuance/redemptions of common and preferred stock, and dividend payments which are summarized above in “Key Transactions in 2015.” Please refer to Notes 9, 10 and 13 of our consolidated financial statements for additional information.
Off-Balance Sheet Arrangements
At December 31, 2015, we had investments in unconsolidated entities with our ownership ranging from 10% to 50%. Please see Note 7 to our consolidated financial statements for additional information. We use financial derivative instruments to hedge interest rate exposure. Please see Note 11 to our consolidated financial statements for additional information. At December 31, 2015, we had nine outstanding letter of credit obligations. Please see Note 12 to our consolidated financial statements for additional information.
Contractual Obligations
The following table summarizes our payment requirements under contractual obligations as of December 31, 2015 (in thousands):
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations
Payments Due by Period
Contractual Obligations
Total
2017-2018
2019-2020
Thereafter
Unsecured revolving credit facility(1)
$
835,000
$
-
$
-
$
835,000
$
-
Senior unsecured notes and term credit facilities:(2)
U.S. Dollar senior unsecured notes
6,200,000
400,000
900,000
1,050,000
3,850,000
Pounds Sterling senior unsecured notes(3)
1,548,330
-
-
-
1,548,330
Canadian Dollar senior unsecured notes(3)
216,779
-
-
216,779
-
U.S. Dollar term credit facility
500,000
-
-
500,000
-
Canadian Dollar term credit facility(3)
180,649
-
-
180,649
-
Secured debt:(2,3)
Consolidated
3,478,207
547,325
1,127,424
554,421
1,249,037
Unconsolidated
474,772
25,984
34,583
21,757
392,448
Contractual interest obligations:(4)
Unsecured revolving credit facility
33,642
5,624
22,495
5,523
-
Senior unsecured notes and term loans(3)
3,592,177
353,830
675,744
572,354
1,990,249
Consolidated secured debt(3)
720,472
147,884
213,257
130,951
228,380
Unconsolidated secured debt(3)
136,870
16,897
31,273
29,171
59,529
Capital lease obligations(5)
98,569
4,732
9,411
8,506
75,920
Operating lease obligations(5)
990,027
15,543
31,315
30,593
912,576
Purchase obligations(5)
549,676
211,635
332,024
6,017
-
Other long-term liabilities(6)
5,654
1,475
2,950
1,229
-
Total contractual obligations
$
19,560,824
$
1,730,929
$
3,380,476
$
4,142,950
$
10,306,468
(1) Relates to our unsecured revolving credit facility with an aggregate commitment of $2,500,000,000. See Note 9 to our consolidated financial statements.
(2) Amounts represent principal amounts due and do not reflect unamortized premiums/discounts or other fair value adjustments as reflected on the balance sheet.
(3) Based on foreign currency exchange rates in effect as of balance sheet date.
(4) Based on variable interest rates in effect as of balance sheet date.
(5) See Note 12 to our consolidated financial statements.
(6) Primarily relates to payments to be made under our Supplemental Executive Retirement Plan, which is discussed in Note 19 to the consolidated financial statements.
Capital Structure
Please refer to “Credit Strength” above for a discussion of our leverage and coverage ratio trends. Our debt agreements contain various covenants, restrictions and events of default. Certain agreements require us to maintain certain financial ratios and minimum net worth and impose certain limits on our ability to incur indebtedness, create liens and make investments or acquisitions. As of December 31, 2015, we were in compliance with all of the covenants under our debt agreements. Please refer to the section entitled “Non-GAAP Financial Measures” for further discussion. None of our debt agreements contain provisions for acceleration which could be triggered by our debt ratings. However, under our primary unsecured credit facility, the ratings on our senior unsecured notes are used to determine the fees and interest charged. A summary of certain covenants and our results as of and for the year ended December 31, 2015 is as follows:
Per Agreement
Covenant
Primary Unsecured Credit Facility
Senior Unsecured Notes
Actual At December 31, 2015
Total Indebtedness to Book Capitalization Ratio maximum
60%
n/a
46%
Secured Indebtedness to Total Assets Ratio maximum
30%
40%
12%
Total Indebtedness to Total Assets maximum
n/a
60%
45%
Unsecured Debt to Unencumbered Assets maximum
60%
n/a
39%
Adjusted Interest Coverage Ratio minimum
n/a
1.50x
4.57x
Adjusted Fixed Charge Coverage minimum
1.50x
n/a
3.61x
We plan to manage the Company to maintain compliance with our debt covenants and with a capital structure consistent with our current profile. Any downgrades in terms of ratings or outlook by any or all of the rating agencies could have a material adverse impact on our cost and availability of capital, which could in turn have a material adverse impact on our consolidated results of operations, liquidity and/or financial condition.
On May 1, 2015, we filed with the Securities and Exchange Commission (1) an open-ended automatic or “universal” shelf
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations
registration statement covering an indeterminate amount of future offerings of debt securities, common stock, preferred stock, depositary shares, warrants and units and (2) a registration statement in connection with our enhanced dividend reinvestment plan under which we may issue up to 15,000,000 shares of common stock. As of January 31, 2016, 11,743,723 shares of common stock remained available for issuance under this registration statement. We have entered into separate Equity Distribution Agreements with each of UBS Securities LLC, KeyBanc Capital Markets Inc. and Credit Agricole Securities (USA) Inc. relating to the offer and sale from time to time of up to $630,015,000 aggregate amount of our common stock (“Equity Shelf Program”). As of January 31, 2016, we had $392,617,000 of remaining capacity under the Equity Shelf Program. Depending upon market conditions, we anticipate issuing securities under our registration statements to invest in additional properties and to repay borrowings under our primary unsecured credit facility.
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations
Results of Operations
Summary
Our primary sources of revenue include rent, resident fees and services, and interest income. Our primary expenses include interest expense, depreciation and amortization, property operating expenses, transaction costs and general and administrative expenses. We evaluate our business and make resource allocations on our three business segments: triple-net, seniors housing operating and outpatient medical. The primary performance measures for our properties are NOI and SSCNOI, which are discussed below. Please see Note 17 to our consolidated financial statements for additional information. The following is a summary of our results of operations (dollars in thousands, except per share amounts):
Year Ended
One Year Change
Year Ended
One Year Change
Two Year Change
December 31,
December 31,
December 31,
Amount
%
Amount
%
Amount
%
Net income attributable to common stockholders
$
78,714
$
446,745
$
368,031
468%
$
818,344
$
371,599
83%
$
739,630
940%
Funds from operations
924,884
1,174,081
249,197
27%
1,409,640
235,559
20%
484,756
52%
Adjusted EBITDA
1,503,715
1,877,992
374,277
25%
2,278,930
400,938
21%
775,215
52%
Net operating income from continuing operations
1,673,795
1,940,188
266,393
16%
2,237,569
297,381
15%
563,774
34%
Same store cash NOI
1,145,629
1,192,245
46,616
4%
1,213,752
21,507
2%
68,123
6%
Per share data (fully diluted):
Net income attributable to common stockholders
$
0.28
$
1.45
$
1.17
418%
$
2.34
$
0.89
61%
$
2.06
736%
Funds from operations
3.32
3.82
0.50
15%
4.03
0.21
5%
0.71
21%
Adjusted interest coverage ratio
3.23x
3.86x
0.63x
20%
4.57x
0.71x
18%
1.34x
41%
Adjusted fixed charge coverage ratio
2.56x
3.06x
0.50x
20%
3.61x
0.55x
18%
1.05x
41%
The following table represents the changes in outstanding common stock for the period from January 1, 2013 to December 31, 2015 (in thousands):
Year Ended
December 31, 2013
December 31, 2014
December 31, 2015
Totals
Beginning balance
260,374
289,564
328,790
260,374
Public offerings
23,000
33,925
19,550
76,475
Dividend reinvestment plan issuances
3,430
4,123
4,024
11,577
Senior note conversions
1,330
2,577
Preferred stock conversions
-
Issuances in acquisitions of noncontrolling interests
1,109
-
-
1,109
Option exercises
Equity Shelf Program issuances
-
-
Other, net
Ending balance
289,564
328,790
354,778
354,778
Average number of shares outstanding:
Basic
276,929
306,272
348,240
Diluted
278,761
307,747
349,424
During the past three years, inflation has not significantly affected our earnings because of the moderate inflation rate. Additionally, a large portion of our earnings are derived primarily from long-term investments with predictable rates of return. These investments are mainly financed with a combination of equity, senior unsecured notes, secured debt and borrowings under our primary unsecured credit facility. During inflationary periods, which generally are accompanied by rising interest rates, our ability to grow may be adversely affected because the yield on new investments may increase at a slower rate than new borrowing costs. Presuming the current inflation rate remains moderate and long-term interest rates do not increase significantly, we believe that inflation will not impact the availability of equity and debt financing for us.
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations
Triple-net
The following is a summary of our NOI for the triple-net segment (dollars in thousands):
Year Ended
One Year Change
Year Ended
One Year Change
Two Year Change
December 31,
December 31,
December 31,
$
%
$
%
$
%
SSCNOI(1)
$
671,609
$
690,941
$
19,332
3%
$
712,806
$
21,865
3%
$
41,197
6%
Non-cash NOI attributable to same store properties(1)
37,153
55,531
18,378
49%
72,666
17,135
31%
35,513
96%
NOI attributable to non same store properties(2)
185,859
280,662
94,803
51%
414,829
134,167
48%
228,970
123%
NOI
$
894,621
$
1,027,134
$
132,513
15%
$
1,200,301
$
173,167
17%
$
305,680
34%
(1) Change is due to increases in cash and non-cash NOI (described below) related to 496 same store properties.
(2) Change is primarily due to the acquisition of 211 properties, the conversion of 23 construction projects into revenue-generating properties subsequent to January 1, 2013 and the transition of 38 properties from our seniors housing operating segment on September 1, 2013.
The following is a summary of our results of operations for the triple-net segment (dollars in thousands):
Year Ended
One Year Change
Year Ended
One Year Change
Two Year Change
December 31,
December 31,
December 31,
$
%
$
%
$
%
Revenues:
Rental income
$
866,138
$
992,638
$
126,500
15%
$
1,119,322
$
126,684
13%
$
253,184
29%
Interest income
28,214
32,255
4,041
14%
74,108
41,853
130%
45,894
163%
Other income
1,504
2,973
1,469
98%
6,871
3,898
131%
5,367
357%
895,856
1,027,866
132,010
15%
1,200,301
172,435
17%
304,445
34%
Property operating expenses
1,235
(503)
-41%
-
(732)
-100%
(1,235)
-100%
Net operating income from continuing operations (NOI)
894,621
1,027,134
132,513
15%
1,200,301
171,703
17%
305,680
34%
Other expenses:
Interest expense
23,322
38,460
15,138
65%
30,288
(8,172)
-21%
6,966
30%
Loss (gain) on derivatives, net
4,877
(1,770)
(6,647)
n/a
(58,427)
(56,657)
3201%
(63,304)
-1298%
Depreciation and amortization
249,913
273,296
23,383
9%
294,484
21,188
8%
44,571
18%
Transaction costs
24,426
45,146
20,720
85%
53,254
8,108
18%
28,828
118%
Loss (gain) on extinguishment of debt, net
145%
10,095
9,997
10201%
10,055
25138%
Provision for loan losses
2,110
-
(2,110)
-100%
-
-
n/a
(2,110)
-100%
Impairment of assets
-
-
-
n/a
2,220
2,220
n/a
2,220
n/a
Other expenses
-
8,825
8,825
n/a
35,648
26,823
304%
35,648
n/a
304,688
364,055
59,367
19%
367,562
3,507
1%
62,874
21%
Income from continuing operations before income taxes and income (loss) from unconsolidated entities
589,933
663,079
73,146
12%
832,739
169,660
26%
242,806
41%
Income tax benefit (expense)
(1,817)
6,141
7,958
n/a
(4,244)
(10,385)
-169%
(2,427)
134%
Income (loss) from unconsolidated entities
5,035
5,423
8%
8,260
2,837
52%
3,225
64%
Income from continuing operations
593,151
674,643
81,492
14%
836,755
162,112
24%
243,604
41%
Discontinued operations, net
57,742
7,135
(50,607)
-88%
-
(7,135)
-100%
(57,742)
-100%
Gain (loss) on real estate dispositions, net
-
146,205
146,205
n/a
86,261
(59,944)
-41%
86,261
n/a
Net income
650,893
827,983
177,090
27%
923,016
95,033
11%
272,123
42%
Less: Net income attributable to noncontrolling interests
1,558
1,874
20%
6,348
4,474
239%
4,790
307%
Net income attributable to common stockholders
$
649,335
$
826,109
$
176,774
27%
$
916,668
$
90,559
11%
$
267,333
41%
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations
The increase in rental income is primarily attributable to the acquisitions of new properties and the conversion of newly constructed triple-net properties from which we receive rent. Certain of our leases contain annual rental escalators that are contingent upon changes in the Consumer Price Index and/or changes in the gross operating revenues of the tenant’s properties. These escalators are not fixed, so no straight-line rent is recorded; however, rental income is recorded based on the contractual cash rental payments due for the period. If gross operating revenues at our facilities and/or the Consumer Price Index do not increase, a portion of our revenues may not continue to increase. Sales of real property would offset revenue increases and, to the extent that they exceed new acquisitions, could result in decreased revenues. Our leases could renew above or below current rent rates, resulting in an increase or decrease in rental income. For the three months ended December 31, 2015, we had no lease renewals but we had 16 leases with rental rate increasers ranging from 0.01% to 0.32% in our triple-net portfolio.
The increase in interest income is attributable to investments in new loans and draws on existing loans in the current year, which includes a first mortgage loan to Genesis Healthcare to facilitate their merger with Skilled Healthcare Group. The increase in other income year-to-date over the prior year includes the receipt of an early prepayment fee related to a real estate loan receivable.
During the year ended December 31, 2015, we completed five triple-net construction projects representing $104,844,000 or $234,027 per bed/unit plus expansion projects totaling $38,808,000. The following is a summary of triple-net construction projects pending as of December 31, 2015 (dollars in thousands):
Location
Units/Beds
Commitment
Balance
Est. Completion
Edmond, OK
$
24,500
$
11,667
3Q16
London, England
29,492
16,240
3Q16
Carrollton, TX
18,900
7,681
3Q16
Piscataway, NJ
30,600
19,386
4Q16
Raleigh, NC
93,000
42,707
4Q16
Tulsa, OK
25,800
6,290
4Q16
Livingston, NJ
51,440
19,453
1Q17
Bracknell, England
16,293
7,080
1Q17
Lancaster, PA
15,875
2,725
1Q17
Lititz, PA
15,200
2,763
1Q17
Total
1,163
$
321,100
$
135,992
Total interest expense represents secured debt interest expense and interest expense on capital lease obligations. The change in secured debt interest expense is due to the net effect and timing of assumptions, segment transitions, extinguishments and principal amortizations. The following is a summary of our triple-net secured debt principal activity (dollars in thousands):
Year Ended
Year Ended
Year Ended
December 31, 2013
December 31, 2014
December 31, 2015
Weighted Avg.
Weighted Avg.
Weighted Avg.
Amount
Interest Rate
Amount
Interest Rate
Amount
Interest Rate
Beginning balance
$
218,741
5.393%
$
587,136
5.394%
$
670,769
5.337%
Debt transitioned
367,997
5.298%
-
0.000%
-
0.000%
Debt issued
13,800
5.480%
-
0.000%
-
0.000%
Debt assumed
9,578
5.582%
120,352
5.404%
44,142
5.046%
Debt extinguished
(16,482)
3.304%
(22,970)
6.235%
(132,545)
4.695%
Foreign currency
-
0.000%
(2,180)
5.317%
(15,633)
5.315%
Principal payments
(6,498)
5.698%
(11,569)
5.564%
(12,719)
5.450%
Ending balance
$
587,136
5.394%
$
670,769
5.337%
$
554,014
5.488%
Monthly averages
$
339,129
5.394%
$
596,941
5.381%
$
551,803
5.518%
In April 2011, we completed the acquisition of substantially all of the real estate assets of privately-owned Genesis Healthcare Corporation. In conjunction with this transaction, we received the option to acquire an ownership interest in Genesis Healthcare. In February 2015, Genesis Healthcare closed on a transaction to merge with Skilled Healthcare Group to become a publicly traded company which required us to record the value of the derivative asset due to the net settlement feature. This event resulted in $58,427,000 gain. During the fourth quarter of 2015, the cost basis of this investment exceeded the fair value. Management
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations
performed an assessment to determine whether the decline in fair value was other than temporary and concluded that it was. As a result, we recognized an other than temporary impairment charge of $35,648,000 which is recorded in other expense.
Depreciation and amortization increased primarily as a result of new property acquisitions and the conversions of newly constructed properties. To the extent that we acquire or dispose of additional properties in the future, our provision for depreciation and amortization will change accordingly.
Transaction costs represent costs incurred with property acquisitions including due diligence costs, fees for legal and valuation services, the termination of pre-existing relationships, lease termination expenses and other similar costs. The change in transaction costs from year to year is primarily a function of investment volume. The fluctuations in loss (gain) on extinguishment of debt is primarily attributable to the volume of extinguishments and terms of the related secured debt.
Changes in gains on sales of properties are related to the volume of property sales and the sales prices. We recognized impairment losses on certain held-for-sale properties as the fair value less estimated costs to sell exceeded our carrying values. The following illustrates the reclassification impact as a result of classifying the properties sold prior to or held for sale at December 31, 2013, as discontinued operations for the periods presented (dollars in thousands):
Year Ended December 31,
Rental income
$
8,987
$
$
-
Expenses:
Interest expense
2,566
-
Provision for depreciation
5,304
-
-
Income (loss) from discontinued operations, net
$
1,117
$
$
-
During the year ended December 31, 2013, we wrote off one loan related to an active adult community. During the years ended December 31, 2014 and 2015, we did not record a provision for loan loss or have any loan write-offs. The provision for loan losses is related to our critical accounting estimate for the allowance for loan losses and is discussed in “Critical Accounting Policies” and Note 6 to our consolidated financial statements.
A portion of our triple-net properties were formed through partnerships. Income or loss from unconsolidated entities represents our share of net income or losses from partnerships where we are the noncontrolling partner. Net income attributable to noncontrolling interests represents our partners’ share of net income relating to those partnerships where we are the controlling partner.
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations
Seniors Housing Operating
The following is a summary of our NOI for the seniors housing operating segment (dollars in thousands):
Year Ended
One Year Change
Year Ended
One Year Change
Two Year Change
December 31,
December 31,
December 31,
$
%
$
%
$
%
SSCNOI(1)
$
252,802
$
274,377
$
21,575
9%
$
267,431
$
(6,946)
-3%
$
14,629
6%
NOI attributable to non same store properties(2)
275,361
356,886
81,525
30%
433,831
76,945
22%
158,470
58%
NOI
$
528,163
$
631,263
$
103,100
20%
$
701,262
$
69,999
11%
$
173,099
33%
(1) Due to increases in cash revenues (described below) related to 116 same store properties.
(2) Primarily due to the acquisition of 271 properties subsequent to January 1, 2013 and the transition of 38 properties to our triple-net segment on September 1, 2013.
The following is a summary of our results of operations for the seniors housing operating segment (dollars in thousands):
Year Ended
One Year Change
Year Ended
One Year Change
Two Year Change
December 31,
December 31,
December 31,
$
%
$
%
$
%
Revenues:
Resident fees and services
$
1,616,290
$
1,892,237
$
275,947
17%
$
2,158,031
$
265,794
14%
$
541,741
34%
Interest income
2,119
1,362
180%
4,180
2,061
97%
3,423
452%
Other income
3,215
2,860
806%
6,060
2,845
88%
5,705
1607%
1,617,402
1,897,571
280,169
17%
2,168,271
270,700
14%
550,869
34%
Property operating expenses
1,089,239
1,266,308
177,069
16%
1,467,009
200,701
16%
377,770
35%
Net operating income from continuing operations (NOI)
528,163
631,263
103,100
20%
701,262
69,999
11%
173,099
33%
Other expenses:
Interest expense
92,148
113,099
20,951
23%
147,832
34,733
31%
55,684
60%
Loss (gain) on derivatives, net
(407)
-168%
-
(275)
-100%
-100%
Depreciation and amortization
478,007
418,199
(59,808)
-13%
351,733
(66,466)
-16%
(126,274)
-26%
Transaction costs
107,066
16,880
(90,186)
-84%
54,966
38,086
226%
(52,100)
-49%
Loss (gain) on extinguishment of debt, net
(3,372)
3,755
-111%
(195)
(578)
-151%
3,177
-94%
Other expenses
-
1,437
1,437
n/a
-
(1,437)
-100%
-
n/a
673,442
550,273
(123,169)
-18%
554,336
4,063
1%
(119,106)
-18%
(Loss) income from continuing operations before income from unconsolidated entities
(145,279)
80,990
226,269
-156%
146,926
65,936
81%
292,205
-201%
Income tax expense
(5,337)
(3,047)
2,290
-43%
4,033
-132%
6,323
-118%
(Loss) income from unconsolidated entities
(22,695)
(38,204)
(15,509)
68%
(32,672)
5,532
-14%
(9,977)
44%
Net income (loss)
(173,311)
39,739
213,050
-123%
115,240
75,501
190%
288,551
-166%
Less: Net income (loss) attributable to noncontrolling interests
(8,639)
(2,335)
6,304
-73%
(1,438)
-38%
7,201
-83%
Net income (loss) attributable to common stockholders
$
(164,672)
$
42,074
$
206,746
-126%
$
116,678
$
74,604
177%
$
281,350
-171%
Fluctuations in revenues and property operating expenses are primarily a result of acquisitions subsequent to January 1, 2013, partially offset by the transition of 38 properties to triple-net on September 1, 2013. The increase in other income for the year ended December 31, 2015 is primarily a result of insurance proceeds received relating to a property. The fluctuations in depreciation and amortization are due to the net impact of acquisitions and variations in amortization of short-lived intangible assets. To the extent that we acquire or dispose of additional properties in the future, these amounts will change accordingly. Losses from unconsolidated
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations
entities are primarily attributable to depreciation and amortization of short-lived intangible assets related to our investments in unconsolidated joint ventures with Chartwell in 2012, Sunrise in 2013 and Senior Resource Group in 2014.
During the year ended December 31, 2015, we completed one seniors housing operating construction project representing $19,869,000 or $283,843 per unit. The following is a summary of our seniors housing operating construction projects, excluding expansions, pending as of December 31, 2015 (dollars in thousands):
Location
Units/Beds
Commitment
Balance
Est. Completion
Camberley, England
$
20,459
$
18,755
4Q16
Bushey, England
58,403
14,070
2Q18
Chertsey, England
45,612
12,446
3Q18
Total
$
124,474
$
45,271
Interest expense represents secured debt interest expense as well as interest expense related to all foreign senior unsecured debt. Please refer to Note 10 to our consolidated financial statements for additional information. The increases in interest expense are attributed primarily to the £550,000,000 Sterling-dominated senior unsecured notes issued in November 2013, the £500,000,000 Sterling-dominated senior unsecured notes issued in November 2014, and the $300,000,000 Canadian-denominated senior unsecured notes issued in November 2015. The following is a summary of our seniors housing operating property secured debt principal activity (dollars in thousands):
Year Ended
Year Ended
Year Ended
December 31, 2013
December 31, 2014
December 31, 2015
Weighted Avg.
Weighted Avg.
Weighted Avg.
Amount
Interest Rate
Amount
Interest Rate
Amount
Interest Rate
Beginning balance
$
1,369,526
4.874%
$
1,714,714
4.622%
$
1,654,531
4.422%
Debt issued
75,408
4.891%
109,503
3.374%
228,685
2.776%
Debt assumed
1,228,706
4.063%
18,484
4.359%
842,316
3.420%
Debt extinguished
(548,876)
3.597%
(114,793)
3.626%
(285,599)
4.188%
Debt transitioned
(367,997)
5.298%
-
0.000%
-
0.000%
Foreign currency
(10,361)
4.013%
(39,379)
3.727%
(110,691)
3.625%
Principal payments
(31,692)
4.643%
(33,998)
4.296%
(38,690)
4.126%
Ending balance
$
1,714,714
4.622%
$
1,654,531
4.422%
$
2,290,552
3.958%
Monthly averages
$
1,723,122
4.820%
$
1,657,416
4.515%
$
1,894,609
4.261%
The fluctuations in gains/losses on debt extinguishments is primarily attributable the volume of extinguishments and terms of the related secured debt. Transaction costs represent costs incurred with property acquisitions (including due diligence costs, fees for legal and valuation services, and termination of pre-existing relationships computed based on the fair value of the assets acquired), lease termination fees and other similar costs. The change in transaction costs from year to year is primarily a function of investment volume. The majority of our seniors housing operating properties are formed through partnership interests. Net income attributable to noncontrolling interests represents our partners’ share of net income or loss related to those partnerships where we are the controlling partner.
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations
Outpatient Medical
The following is a summary of our NOI for the outpatient medical segment (dollars in thousands):
Year Ended
One Year Change
Year Ended
One Year Change
Two Year Change
December 31,
December 31,
December 31,
$
%
$
%
$
%
SSCNOI(1)
$
221,218
$
226,927
$
5,709
3%
$
233,515
$
6,588
3%
$
12,297
6%
Non-cash NOI attributable to same store properties(1)
8,436
7,494
(942)
-11%
6,097
(1,397)
-19%
(2,339)
-28%
NOI attributable to non same store properties(2)
21,061
46,693
25,632
122%
95,303
48,610
104%
74,242
353%
NOI
$
250,715
$
281,114
$
30,399
12%
$
334,915
$
53,801
19%
$
84,200
34%
(1) Due to increases in cash and non-cash NOI (described below) related to 164 same store properties.
(2) Primarily due to the acquisition of 50 properties and conversions of construction projects into 14 revenue-generating properties subsequent to January 1, 2013.
The following is a summary of our results of operations for the outpatient medical segment (dollars in thousands):
Year Ended
One Year Change
Year Ended
One Year Change
Two Year Change
December 31,
December 31,
December 31,
$
%
$
%
$
%
Revenues:
Rental income
$
361,451
$
413,129
$
51,678
14%
$
479,626
$
66,497
16%
$
118,175
33%
Interest income
3,692
3,293
(399)
-11%
5,853
2,560
78%
2,161
59%
Other income
1,911
1,010
(901)
-47%
4,684
3,674
364%
2,773
145%
367,054
417,432
50,378
14%
490,163
72,731
17%
123,109
34%
Property operating expenses
116,339
136,318
19,979
17%
155,248
18,930
14%
38,909
33%
Net operating income from continuing operations (NOI)
250,715
281,114
30,399
12%
334,915
53,801
19%
84,200
34%
Other expenses:
Interest expense
36,823
32,904
(3,919)
-11%
28,822
(4,082)
-12%
(8,001)
-22%
Depreciation and amortization
137,880
152,635
14,755
11%
180,023
27,388
18%
42,143
31%
Transaction costs
1,909
7,512
5,603
294%
2,706
(4,806)
-64%
42%
Loss (gain) on extinguishment of debt, net
-
n/a
-
(405)
-100%
-
n/a
176,612
193,456
16,844
10%
211,551
18,095
9%
34,939
20%
Income from continuing operations before income taxes and income (loss) from unconsolidated entities
74,103
87,658
13,555
18%
123,364
35,706
41%
49,261
66%
Income tax expense
(270)
(1,827)
(1,557)
577%
2,072
n/a
n/a
Income (loss) from unconsolidated entities
9,473
5,355
(4,118)
-43%
2,908
(2,447)
-46%
(6,565)
-69%
Income from continuing operations
83,306
91,186
7,880
9%
126,517
35,331
39%
43,211
52%
Discontinued operations, net
(6,029)
-
6,029
-100%
-
-
n/a
6,029
-100%
Gain (loss) on real estate dispositions, net
-
n/a
194,126
193,220
21327%
194,126
n/a
Net income (loss)
77,277
92,092
14,815
19%
320,643
228,551
248%
243,366
315%
Less: Net income (loss) attributable to noncontrolling interests
96%
(110)
(718)
n/a
(420)
n/a
Net income (loss) attributable to common stockholders
$
76,967
$
91,484
$
14,517
19%
$
320,753
$
229,269
251%
$
243,786
317%
The increase in rental income is primarily attributable to the acquisitions of new properties and the conversion of newly constructed outpatient medical properties from which we receive rent. Certain of our leases contain annual rental escalators that are contingent upon changes in the Consumer Price Index. These escalators are not fixed, so no straight-line rent is recorded; however, rental income is recorded based on the contractual cash rental payments due for the period. If the Consumer Price Index does not increase, a portion of our revenues may not continue to increase. Sales of real property would offset revenue increases and, to the extent that they exceed new acquisitions, could result in decreased revenues. Our leases could renew above or below current rent rates, resulting in an increase or decrease in rental income. For the three months ended December 31, 2015, our consolidated
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations
outpatient medical portfolio signed 75,573 square feet of new leases and 145,892 square feet of renewals. The weighted-average term of these leases was six years, with a rate of $33.28 per square foot and tenant improvement and lease commission costs of $24.87 per square foot. Substantially all of these leases during the referenced quarter contain an annual fixed or contingent escalation rent structure ranging from the change in CPI to 4%.
During the year ended December 31, 2015, we completed one outpatient medical construction project representing $16,592,000 or $325 per square foot. The following is a summary of outpatient medical construction projects pending as of December 31, 2015 (dollars in thousands):
Location
Square Feet
Commitment
Balance
Est. Completion
Bel Air, MD
99,184
$
26,386
$
18,153
1Q16
Richmond, TX
36,475
11,670
7,277
1Q16
Stamford, CT
92,345
41,735
9,886
3Q16
Missouri, TX
23,863
9,180
2,252
3Q16
Wausau, WI
43,883
14,100
3,183
1Q17
Brooklyn, NY
140,955
103,624
19,808
1Q17
Timmonium, MD
46,000
20,996
8,601
2Q17
Total
482,705
$
227,691
$
69,160
Total interest expense represents secured debt interest expense offset by interest. The change in secured debt interest expense is primarily due to the net effect and timing of assumptions, extinguishments and principal amortizations. The following is a summary of our outpatient medical secured debt principal activity (dollars in thousands):
Year Ended
Year Ended
Year Ended
December 31, 2013
December 31, 2014
December 31, 2015
Weighted Avg.
Weighted Avg.
Weighted Avg.
Amount
Interest Rate
Amount
Interest Rate
Amount
Interest Rate
Beginning balance
$
713,720
5.950%
$
700,427
5.999%
$
609,268
5.838%
Debt assumed
52,574
6.126%
66,113
3.670%
120,959
2.113%
Debt extinguished
(49,017)
5.357%
(141,796)
5.567%
(88,182)
5.257%
Principal payments
(16,850)
6.193%
(15,476)
5.797%
(14,356)
5.975%
Ending balance
$
700,427
5.999%
$
609,268
5.838%
$
627,689
5.177%
Monthly averages
$
708,107
5.956%
$
626,797
5.928%
$
613,155
5.434%
The increase in other income is primarily attributable to the acquisition of a controlling interest in a portfolio of properties that were historically reported as unconsolidated property investments. The increases in property operating expenses and depreciation and amortization are primarily attributable to acquisitions and construction conversions of new outpatient medical facilities for which we incur certain property operating expenses. Transaction costs represent costs incurred with property acquisitions including due diligence costs, fees for legal and valuation services, termination of pre-existing relationships, a lease termination expense and other similar costs. The fluctuations in transaction costs are primarily due to acquisition volumes in the relevant years. Income from unconsolidated entities represents our share of net income or losses related to the periods for which we held a joint venture investment with Forest City Enterprises and certain unconsolidated property investments. Changes in gains/losses on sales of properties are related to volume of property sales and the sales prices. The following illustrates the reclassification impact as a result of classifying the properties sold prior to or held for sale at December 31, 2013 as discontinued operations for the periods presented (dollars in thousands):
Year Ended December 31,
Rental income
$
9,390
$
-
$
-
Expenses:
Interest expense
1,681
-
-
Property operating expenses
3,396
-
-
Provision for depreciation
2,855
-
-
Income (loss) from discontinued operations, net
$
1,458
$
-
$
-
A portion of our outpatient medical properties were formed through partnerships. Net income attributable to noncontrolling interests represents our partners’ share of net income or loss relating to those partnerships where we are the controlling partner.
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations
Non-Segment/Corporate
The following is a summary of our results of operations for the non-segment/corporate activities (dollars in thousands):
Year Ended
One Year Change
Year Ended
One Year Change
Two Year Change
December 31,
December 31,
December 31,
$
%
$
%
$
%
Revenues:
Other income
$
$
$
129%
$
1,091
$
61%
$
269%
Expenses:
Interest expense
306,067
296,576
(9,491)
-3%
285,227
(11,349)
-4%
(20,840)
-7%
General and administrative
108,318
142,943
34,625
32%
147,416
4,473
3%
39,098
36%
Loss (gain) on extinguishments of debt, net
2,423
8,672
6,249
258%
24,777
16,105
186%
22,354
923%
Other expenses
-
-
-
n/a
10,583
10,583
n/a
10,583
n/a
416,808
448,191
31,383
8%
468,003
19,812
4%
51,195
12%
Loss from continuing operations before income taxes
(416,512)
(447,514)
(31,002)
7%
(466,912)
(19,398)
4%
(50,400)
12%
Income tax expense
(67)
-
-100%
(3,438)
(3,438)
n/a
(3,371)
5031%
Net loss
(416,579)
(447,514)
(30,935)
7%
(470,350)
(22,836)
5%
(53,771)
13%
Preferred stock dividends
66,336
65,408
(928)
-1%
65,406
(2)
0%
(930)
-1%
Net loss attributable to common stockholders
$
(482,915)
$
(512,922)
$
(30,007)
6%
$
(535,756)
$
(22,834)
4%
$
(52,841)
11%
The following is a summary of our non-segment/corporate interest expense (dollars in thousands):
Year Ended
One Year Change
Year Ended
One Year Change
Two Year Change
December 31,
December 31,
December 31,
$
%
$
%
$
%
Senior unsecured notes
$
279,617
$
280,037
$
0%
$
267,609
$
(12,428)
-4%
$
(12,008)
-4%
Secured debt
(35)
-7%
(103)
-22%
(138)
-28%
Primary unsecured credit facility
15,498
8,914
(6,584)
-42%
10,812
1,898
21%
(4,686)
-30%
Capitalized interest
(6,700)
(7,150)
(450)
7%
(6,379)
-11%
-5%
Interest SWAP savings
(14)
(14)
-
0%
(28)
(14)
100%
(14)
100%
Loan expense
17,171
14,329
(2,842)
-17%
12,856
(1,473)
-10%
(4,315)
-25%
Totals
$
306,067
$
296,576
$
(9,491)
-3%
$
285,227
$
(11,349)
-4%
$
(20,840)
-7%
The change in interest expense on senior unsecured notes is due to the net effect of issuances and extinguishments, excluding our foreign unsecured debt, which is in our seniors housing operating segment. Please refer to Note 10 to our consolidated financial statements for additional information. We capitalize certain interest costs associated with funds used for the construction of properties owned directly by us. The amount capitalized is based upon the balances outstanding during the construction period using the rate of interest that approximates our cost of financing. Our interest expense is reduced by the amount capitalized. The change in capitalized interest is due to both changes in construction fundings and in our weighted-average cost of financing. Loan expense represents the amortization of deferred loan costs incurred in connection with the issuance and amendments of debt. Loan expense changes are due to amortization of charges for costs incurred in connection with senior unsecured note issuances. The change in interest expense on our primary unsecured credit facility is due primarily to the net effect and timing of draws, paydowns and variable interest rate changes. Please refer to Note 9 of our consolidated financial statements for additional information regarding our primary unsecured credit facility.
General and administrative expenses for 2014 included $19,688,000 of CEO transition costs. Excluding these costs, general and administrative expenses as a percentage of consolidated revenues for the years ended December 31, 2015, 2014 and 2013 were 3.82%, 3.69% and 3.74%, respectively. The increases in general and administrative expenses, excluding the CEO transition costs, are primarily related to costs associated with our initiatives to attract and retain appropriate personnel to achieve our business objectives. The loss on extinguishment of debt in the current year is primarily due to the early extinguishment of the 2016 senior unsecured notes. Other expenses in the current year are due to costs associated with the retirement of an executive officer and the termination of our investment in a strategic outpatient medical partnership.
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations
Other
Non-GAAP Financial Measures
We believe that net income attributable to common stockholders, as defined by U.S. GAAP, is the most appropriate earnings measurement. However, we consider FFO to be a useful supplemental measure of our operating performance. Historical cost accounting for real estate assets in accordance with U.S. GAAP implicitly assumes that the value of real estate assets diminishes predictably over time as evidenced by the provision for depreciation. However, since real estate values have historically risen or fallen with market conditions, many industry investors and analysts have considered presentations of operating results for real estate companies that use historical cost accounting to be insufficient. In response, the National Association of Real Estate Investment Trusts (“NAREIT”) created FFO as a supplemental measure of operating performance for REITs that excludes historical cost depreciation from net income. FFO, as defined by NAREIT, means net income attributable to common stockholders, computed in accordance with U.S. GAAP, excluding gains (or losses) from sales of real estate and impairment of depreciable assets, plus depreciation and amortization, and after adjustments for unconsolidated entities and noncontrolling interests.
Net operating income from continuing operations (“NOI”) is used to evaluate the operating performance of our properties. We define NOI as total revenues, including tenant reimbursements, less property operating expenses. Property operating expenses represent costs associated with managing, maintaining and servicing tenants for our seniors housing operating and outpatient medical properties. These expenses include, but are not limited to, property-related payroll and benefits, property management fees, marketing, housekeeping, food service, maintenance, utilities, property taxes and insurance. General and administrative expenses represent costs unrelated to property operations or transaction costs. These expenses include, but are not limited to, payroll and benefits, professional services, office expenses and depreciation of corporate fixed assets. Same store cash NOI (“SSCNOI”) is used to evaluate the cash-based operating performance of our properties under a consistent population which eliminates changes in the composition of our portfolio. As used herein, same store is generally defined as those revenue-generating properties in the portfolio for the full three year reporting period. Any properties acquired, developed, transitioned or classified in discontinued operations during that period are excluded from the same store amounts. We believe NOI and SSCNOI provide investors relevant and useful information because they measure the operating performance of our properties at the property level on an unleveraged basis. We use NOI and SSCNOI to make decisions about resource allocations and to assess the property level performance of our properties.
EBITDA stands for earnings before interest, taxes, depreciation and amortization. We believe that EBITDA, along with net income and cash flow provided from operating activities, is an important supplemental measure because it provides additional information to assess and evaluate the performance of our operations. We primarily utilize EBITDA to measure our interest coverage ratio, which represents EBITDA divided by total interest, and our fixed charge coverage ratio, which represents EBITDA divided by fixed charges. Fixed charges include total interest, secured debt principal amortization and preferred dividends.
A covenant in our primary unsecured credit facility contains a financial ratio based on a definition of EBITDA that is specific to that agreement. Failure to satisfy these covenants could result in an event of default that could have a material adverse impact on our cost and availability of capital, which could in turn have a material adverse impact on our consolidated results of operations, liquidity and/or financial condition. Due to the materiality of these debt agreements and the financial covenants, we have disclosed Adjusted EBITDA, which represents EBITDA as defined above and adjusted for stock-based compensation expense, provision for loan losses and gain/loss on extinguishment of debt. We use Adjusted EBITDA to measure our adjusted fixed charge coverage ratio, which represents Adjusted EBITDA divided by fixed charges on a trailing twelve months basis. Fixed charges include total interest (excluding capitalized interest and non-cash interest expenses), secured debt principal amortization and preferred dividends. Our covenant requires an adjusted fixed charge coverage ratio of at least 1.50 times.
Other than Adjusted EBITDA, our supplemental reporting measures and similarly entitled financial measures are widely used by investors, equity and debt analysts and rating agencies in the valuation, comparison, rating and investment recommendations of companies. Management uses these financial measures to facilitate internal and external comparisons to our historical operating results and in making operating decisions. Additionally, these measures are utilized by the Board of Directors to evaluate management. Adjusted EBITDA is used solely to determine our compliance with a financial covenant in our primary unsecured credit facility and is not being presented for use by investors for any other purpose. None of our supplemental measures represent net income or cash flow provided from operating activities as determined in accordance with U.S. GAAP and should not be considered as alternative measures of profitability or liquidity. Finally, the supplemental measures, as defined by us, may not be comparable to similarly entitled items reported by other real estate investment trusts or other companies.
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations
The table below reflects the reconciliation of FFO to net income attributable to common stockholders, the most directly comparable U.S. GAAP measure, for the periods presented. The provisions for depreciation and amortization include provisions for depreciation and amortization from discontinued operations. Noncontrolling interest and unconsolidated entity amounts represent adjustments to reflect our share of depreciation and amortization. Amounts are in thousands except for per share data.
Year Ended December 31,
FFO Reconciliation:
Net income attributable to common stockholders
$
78,714
$
446,745
$
818,344
Depreciation and amortization
873,960
844,130
826,240
Impairment of assets
-
-
2,220
Loss (gain) on sales of properties
(49,138)
(153,522)
(280,387)
Noncontrolling interests
(36,304)
(37,852)
(39,271)
Unconsolidated entities
57,652
74,580
82,494
Funds from operations
$
924,884
$
1,174,081
$
1,409,640
Average common shares outstanding:
Basic
276,929
306,272
348,240
Diluted
278,761
307,747
349,424
Per share data:
Net income attributable to common stockholders
Basic
$
0.28
$
1.46
$
2.35
Diluted
0.28
1.45
2.34
Funds from operations
Basic
$
3.34
$
3.83
$
4.05
Diluted
3.32
3.82
4.03
The table below reflects the reconciliation of Adjusted EBITDA to net income, the most directly comparable U.S. GAAP measure, for the periods presented. Interest expense and the provisions for depreciation and amortization include discontinued operations. Dollars are in thousands.
Year Ended December 31,
Adjusted EBITDA Reconciliation:
Net income
$
138,280
$
512,300
$
888,549
Interest expense
462,606
481,196
492,169
Income tax expense (benefit), net
7,491
(1,267)
6,451
Depreciation and amortization
873,960
844,130
826,240
Stock-based compensation expense
20,177
32,075
30,844
Provision for loan losses
2,110
-
-
Loss (gain) on extinguishment of debt, net
(909)
9,558
34,677
Adjusted EBITDA
$
1,503,715
$
1,877,992
$
2,278,930
Adjusted Interest Coverage Ratio:
Interest expense
$
462,606
$
481,196
$
492,169
Capitalized interest
6,700
7,150
8,670
Non-cash interest expense
(4,044)
(2,427)
(2,586)
Total interest
465,262
485,919
498,253
Adjusted EBITDA
$
1,503,715
$
1,877,992
$
2,278,930
Adjusted interest coverage ratio
3.23x
3.86x
4.57x
Adjusted Fixed Charge Coverage Ratio:
Interest expense
$
462,606
$
481,196
$
492,169
Capitalized interest
6,700
7,150
8,670
Non-cash interest expense
(4,044)
(2,427)
(2,586)
Secured debt principal payments
56,205
62,280
67,064
Preferred dividends
66,336
65,408
65,406
Total fixed charges
587,803
613,607
630,723
Adjusted EBITDA
$
1,503,715
$
1,877,992
$
2,278,930
Adjusted fixed charge coverage ratio
2.56x
3.06x
3.61x
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations
The following tables reflect the reconciliation of NOI and SSCNOI to net income attributable to common stockholders, the most directly comparable U.S. GAAP measure, for the periods presented. Amounts are in thousands.
Year Ended December 31,
NOI Reconciliation:
Total revenues:
Triple-net
$
895,856
$
1,027,866
$
1,200,301
Seniors housing operating
1,617,402
1,897,571
2,168,271
Outpatient medical
367,054
417,432
490,163
Non-segment/corporate
1,091
Total revenues
2,880,608
3,343,546
3,859,826
Property operating expenses:
Triple-net
1,235
-
Seniors housing operating
1,089,239
1,266,308
1,467,009
Outpatient medical
116,339
136,318
155,248
Total property operating expenses
1,206,813
1,403,358
1,622,257
Net operating income:
Triple-net
894,621
1,027,134
1,200,301
Seniors housing operating
528,163
631,263
701,262
Outpatient medical
250,715
281,114
334,915
Non-segment/corporate
1,091
Net operating income from continuing operations
1,673,795
1,940,188
2,237,569
Reconciling items:
Interest expense
(458,360)
(481,039)
(492,169)
Loss (gain) on derivatives, net
(4,470)
1,495
58,427
Depreciation and amortization
(865,800)
(844,130)
(826,240)
General and administrative
(108,318)
(142,943)
(147,416)
Transaction costs
(133,401)
(69,538)
(110,926)
Loss (gain) on extinguishment of debt, net
(9,558)
(34,677)
Impairment of assets
-
-
(2,220)
Other expenses
-
(10,262)
(46,231)
Provision for loan losses
(2,110)
-
-
Income tax benefit (expense)
(7,491)
1,267
(6,451)
Income (loss) from unconsolidated entities
(8,187)
(27,426)
(21,504)
Income (loss) from discontinued operations, net
51,713
7,135
-
Gain (loss) on real estate dispositions, net
-
147,111
280,387
Preferred dividends
(66,336)
(65,408)
(65,406)
Loss (income) attributable to noncontrolling interests
6,770
(147)
(4,799)
(1,595,081)
(1,493,443)
(1,419,225)
Net income (loss) attributable to common stockholders
$
78,714
$
446,745
$
818,344
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations
Year Ended December 31,
Same Store Cash NOI Reconciliation:
Net operating income from continuing operations:
Triple-net
$
894,621
$
1,027,134
$
1,200,301
Seniors housing operating
528,163
631,263
701,262
Outpatient medical
250,715
281,114
334,915
Total
1,673,499
1,939,511
2,236,478
Adjustments:
Triple-net:
Non-cash NOI on same store properties
(37,153)
(55,531)
(72,666)
NOI attributable to non same store properties
(185,859)
(280,662)
(414,829)
Subtotal
(223,012)
(336,193)
(487,495)
Seniors housing operating:
NOI attributable to non same store properties
(275,361)
(356,886)
(433,831)
Subtotal
(275,361)
(356,886)
(433,831)
Outpatient medical:
Non-cash NOI on same store properties
(8,436)
(7,494)
(6,097)
NOI attributable to non same store properties
(21,061)
(46,693)
(95,303)
Subtotal
(29,497)
(54,187)
(101,400)
Total
(527,870)
(747,266)
(1,022,726)
Same store cash net operating income:
Triple-net
671,609
690,941
712,806
Seniors housing operating
252,802
274,377
267,431
Outpatient medical
221,218
226,927
233,515
Total
$
1,145,629
$
1,192,245
$
1,213,752
Same Store Cash NOI Property Reconciliation:
Total properties
1,426
Acquisitions
(532)
Developments
(44)
Disposals/Held-for-sale
(17)
Segment transitions
(39)
Other(1)
(18)
Same store properties
(1) Includes eleven land parcels, three loans and four previously unconsolidated properties in which we purchased the majority interest during the year.
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations
Critical Accounting Policies
Our consolidated financial statements are prepared in accordance with U.S. GAAP, which requires us to make estimates and assumptions. Management considers accounting estimates or assumptions critical if:
· the nature of the estimates or assumptions is material due to the levels of subjectivity and judgment necessary to account for highly uncertain matters or the susceptibility of such matters to change; and
· the impact of the estimates and assumptions on financial condition or operating performance is material.
Management has discussed the development and selection of its critical accounting policies with the Audit Committee of the Board of Directors and the Audit Committee has reviewed the disclosure presented below relating to them. Management believes the current assumptions and other considerations used to estimate amounts reflected in our consolidated financial statements are appropriate and are not reasonably likely to change in the future. However, since these estimates require assumptions to be made that were uncertain at the time the estimate was made, they bear the risk of change. If actual experience differs from the assumptions and other considerations used in estimating amounts reflected in our consolidated financial statements, the resulting changes could have a material adverse effect on our consolidated results of operations, liquidity and/or financial condition. Please refer to Note 2 to our consolidated financial statements for further information on significant accounting policies that impact us and for the impact of new accounting standards. There were no accounting pronouncements that were issued, but not yet adopted by us, that we believe will materially impact our consolidated financial statements.
The following table presents information about our critical accounting policies, as well as the material assumptions used to develop each estimate:
Nature of Critical
Accounting Estimate
Assumptions/Approach
Used
Principles of Consolidation
The consolidated financial statements include our accounts, the accounts of our wholly-owned subsidiaries and the accounts of joint venture entities in which we own a majority voting interest with the ability to control operations and where no substantive participating rights or substantive kick out rights have been granted to the noncontrolling interests. In addition, we consolidate those entities deemed to be variable interest entities (VIEs) in which we are determined to be the primary beneficiary. All material intercompany transactions and balances have been eliminated in consolidation.
We make judgments about which entities are VIEs based on an assessment of whether (i) the equity investors as a group, if any, do not have a controlling financial interest, or (ii) the equity investment at risk is insufficient to finance that entity’s activities without additional subordinated financial support. We make judgments with respect to our level of influence or control of an entity and whether we are (or are not) the primary beneficiary of a VIE. Consideration of various factors includes, but is not limited to, our ability to direct the activities that most significantly impact the entity's economic performance, our form of ownership interest, our representation on the entity's governing body, the size and seniority of our investment, our ability and the rights of other investors to participate in policy making decisions, replace the manager and/or liquidate the entity, if applicable. Our ability to correctly assess our influence or control over an entity at inception of our involvement or on a continuous basis when determining the primary beneficiary of a VIE affects the presentation of these entities in our consolidated financial statements. If we perform a primary beneficiary analysis at a date other than at inception of the variable interest entity, our assumptions may be different and may result in the identification of a different primary beneficiary.
Income Taxes
As part of the process of preparing our consolidated financial statements, significant management judgment is required to evaluate our compliance with REIT requirements.
Our determinations are based on interpretation of tax laws, and our conclusions may have an impact on the income tax expense recognized. Adjustments to income tax expense may be required as a result of: (i) audits conducted by federal and state tax authorities, (ii) our ability to qualify as a REIT, (iii) the potential for built-in-gain recognized related to prior-tax-free acquisitions of C corporations and (iv) changes in tax laws. Adjustments required in any given period are included in income.
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations
Nature of Critical
Accounting Estimate
Assumptions/Approach
Used
Business Combinations
Real property developed by us is recorded at cost, including the capitalization of construction period interest. The cost of real property acquired is allocated to net tangible and identifiable intangible assets based on their respective fair values. Tangible assets primarily consist of land, buildings and improvements. The remaining purchase price is allocated among identifiable intangible assets primarily consisting of the above or below market component of in-place leases and the value of in-place leases. The total amount of other intangible assets acquired is further allocated to in-place lease values and customer relationship values based on management’s evaluation of the specific characteristics of each tenant’s lease and the Company’s overall relationship with that respective tenant.
We make estimates as part of our allocation of the purchase price of acquisitions to the various components of the acquisition based upon the relative fair value of each component. The most significant components of our allocations are typically the allocation of fair value to the buildings as-if-vacant, land and in-place leases. In the case of the fair value of buildings and the allocation of value to land and other intangibles, our estimates of the values of these components will affect the amount of depreciation and amortization we record over the estimated useful life of the property acquired or the remaining lease term. In the case of the value of in-place leases, we make our best estimates based on our evaluation of the specific characteristics of each tenant's lease. Factors considered include estimates of carrying costs during hypothetical expected lease-up periods, market conditions and costs to execute similar leases. Our assumptions affect the amount of future revenue that we will recognize over the remaining lease term for the acquired in-place leases.
We compute depreciation and amortization on our properties using the straight-line method based on their estimated useful lives which range from 15 to 40 years for buildings and five to 15 years for improvements. Amortization periods for intangibles are based on the remaining life of the lease.
Allowance for Loan Losses
We maintain an allowance for loan losses in accordance with U.S. GAAP. The allowance for loan losses is maintained at a level believed adequate to absorb potential losses in our loans receivable. The determination of the allowance is based on a quarterly evaluation of all outstanding loans. If this evaluation indicates that there is a greater risk of loan charge-offs, additional allowances or placement on non-accrual status may be required. A loan is impaired when, based on current information and events, it is probable that we will be unable to collect all amounts due as scheduled according to the contractual terms of the original loan agreement. Consistent with this definition, all loans on non-accrual are deemed impaired. To the extent circumstances improve and the risk of collectability is diminished, we will return these loans to full accrual status.
The determination of the allowance is based on a quarterly evaluation of all outstanding loans, including general economic conditions and estimated collectability of loan payments and principal. We evaluate the collectability of our loans receivable based on a combination of factors, including, but not limited to, delinquency status, historical loan charge-offs, financial strength of the borrower and guarantors and value of the underlying property.
Fair Value of Derivative Instruments
The valuation of derivative instruments is accounted for in accordance with U.S. GAAP, which requires companies to record derivatives at fair market value on the balance sheet as assets or liabilities.
The valuation of derivative instruments requires us to make estimates and judgments that affect the fair value of the instruments. Fair values of our forward exchange contracts are estimated using pricing models that consider forward currency spot rates, forward trade rates and discount rates. Fair values of our interest rate swaps are estimated by utilizing pricing models that consider forward yield curves, discount rates and counterparty credit risk. Such amounts and their recognition are subject to significant estimates which may change in the future.
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations
Nature of Critical
Accounting Estimate
Assumptions/Approach
Used
Revenue Recognition
Revenue is recorded in accordance with U.S. GAAP, which requires that revenue be recognized after four basic criteria are met. These four criteria include persuasive evidence of an arrangement, the rendering of service, fixed and determinable income and reasonably assured collectability. If the collectability of revenue is determined incorrectly, the amount and timing of our reported revenue could be significantly affected. Interest income on loans is recognized as earned based upon the principal amount outstanding subject to an evaluation of collectability risk. Substantially all of our operating leases contain fixed and/or contingent escalating rent structures. Leases with fixed annual rental escalators are generally recognized on a straight-line basis over the initial lease period, subject to a collectability assessment. Rental income related to leases with contingent rental escalators is generally recorded based on the contractual cash rental payments due for the period. We recognize resident fees and services, other than move-in fees, monthly as services are provided. Lease agreements with residents generally have a term of one year and are cancelable by the resident with 30 days’ notice.
We evaluate the collectability of our revenues and related receivables on an on-going basis. We evaluate collectability based on assumptions and other considerations including, but not limited to, the certainty of payment, payment history, the financial strength of the investment’s underlying operations as measured by cash flows and payment coverages, the value of the underlying collateral and guaranties and current economic conditions.
If our evaluation indicates that collectability is not reasonably assured, we may place an investment on non-accrual or reserve against all or a portion of current income as an offset to revenue.
Impairment of Long-Lived Assets
We review our long-lived assets for potential impairment in accordance with U.S. GAAP. An impairment charge must be recognized when the carrying value of a long-lived asset is not recoverable. The carrying value is not recoverable if it exceeds the sum of the undiscounted cash flows expected to result from the use and eventual disposition of the asset. If it is determined that a permanent impairment of a long-lived asset has occurred, the carrying value of the asset is reduced to its fair value and an impairment charge is recognized for the difference between the carrying value and the fair value.
The net book value of long-lived assets is reviewed quarterly on a property by property basis to determine if there are indicators of impairment. These indicators may include anticipated operating losses at the property level, the tenant’s inability to make rent payments, a decision to dispose of an asset before the end of its estimated useful life and changes in the market that may permanently reduce the value of the property. If indicators of impairment exist, then the undiscounted future cash flows from the most likely use of the property are compared to the current net book value. This analysis requires us to determine if indicators of impairment exist and to estimate the most likely stream of cash flows to be generated from the property during the period the property is expected to be held.

ITEM 7A - QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
Item 7A. Quantitative and Qualitative Disclosures About Market Risk
We are exposed to various market risks, including the potential loss arising from adverse changes in interest rates and foreign currency exchange rates. We seek to mitigate the underlying foreign currency exposures with gains and losses on derivative contracts hedging these exposures. We seek to mitigate the effects of fluctuations in interest rates by matching the terms of new investments with new long-term fixed rate borrowings to the extent possible. We may or may not elect to use financial derivative instruments to hedge interest rate exposure. These decisions are principally based on our policy to match our variable rate investments with comparable borrowings, but are also based on the general trend in interest rates at the applicable dates and our perception of the future volatility of interest rates. This section is a discussion of the risks associated with potential fluctuations in interest rates and foreign currency exchange rates. For additional information, see “Item 7 - Management’s Discussion and Analysis of Financial Condition and Results of Operations - Critical Accounting Policies” and Notes 11 and 16 to our consolidated financial statements.
We historically borrow on our primary unsecured credit facility to acquire, construct or make loans relating to health care and seniors housing properties. Then, as market conditions dictate, we will issue equity or long-term fixed rate debt to repay the borrowings under our primary unsecured credit facility. We are subject to risks associated with debt financing, including the risk that existing indebtedness may not be refinanced or that the terms of refinancing may not be as favorable as the terms of current indebtedness. The majority of our borrowings were completed under indentures or contractual agreements that limit the amount of indebtedness we may incur. Accordingly, in the event that we are unable to raise additional equity or borrow money because of these limitations, our ability to acquire additional properties may be limited.
A change in interest rates will not affect the interest expense associated with our fixed rate debt. Interest rate changes, however, will affect the fair value of our fixed rate debt. Changes in the interest rate environment upon maturity of this fixed rate debt could have an effect on our future cash flows and earnings, depending on whether the debt is replaced with other fixed rate debt, variable rate debt or equity or repaid by the sale of assets. To illustrate the impact of changes in the interest rate markets, we performed a sensitivity analysis on our fixed rate debt instruments whereby we modeled the change in net present values arising from a hypothetical 1% increase in interest rates to determine the instruments’ change in fair value. The following table summarizes the analysis performed as of the dates indicated (in thousands):
December 31, 2015
December 31, 2014
Principal balance
Fair value change
Principal balance
Fair value change
Senior unsecured notes
$
7,965,107
$
(519,901)
$
7,101,655
$
(547,358)
Secured debt
2,757,123
(91,376)
2,673,480
(93,580)
Totals
$
10,722,230
$
(611,277)
$
9,775,135
$
(640,938)
Our variable rate debt, including our unsecured line of credit arrangements, is reflected at fair value. At December 31, 2015, we had $2,236,733,000 outstanding related to our variable rate debt. Assuming no changes in outstanding balances, a 1% increase in interest rates would result in increased annual interest expense of $22,367,000. At December 31, 2014, we had $983,783,000 outstanding related to our variable rate debt. Assuming no changes in outstanding balances, a 1% increase in interest rates would have resulted in increased annual interest expense of $9,838,000.
We are subject to currency fluctuations that may, from time to time, affect our financial condition and results of operations. Increases or decreases in the value of the Canadian Dollar or Pounds Sterling relative to the U.S. Dollar impacts the amount of net income we earn from our investments in Canada and the United Kingdom. Based solely on our results for the twelve months ended December 31, 2015, if these exchange rates were to increase or decrease by 100 basis points, our net income from these investments would decrease or increase, as applicable, by less than $1,000,000 for the twelve-month period. We seek to mitigate these underlying foreign currency exposures with non-U.S. denominated borrowings and gains and losses on derivative contracts hedging these exposures. If we increase our international presence through investments in, or acquisitions or development of, seniors housing and health care properties outside the United States, we may also decide to transact additional business or borrow funds in currencies other than the U.S. Dollar, Canadian Dollars or Pounds Sterling. To illustrate the impact of changes in foreign currency markets, we performed a sensitivity analysis on our derivative portfolio whereby we modeled the change in net present values arising from a hypothetical 1% increase in foreign currency exchange rates to determine the instruments’ change in fair value. The following table summarizes the results of the analysis performed, excluding cross currency hedge activity (dollars in thousands):
December 31, 2015
December 31, 2014
Carrying value
Fair value change
Carrying value
Fair value change
Foreign currency exchange contracts
$
117,452
$
1,915
$
54,247
$
4,242
Debt designated as hedges
1,728,979
13,000
1,851,189
13,000
Totals
$
1,846,431
$
14,915
$
1,905,436
$
17,242

ITEM 8 - FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
Item 8. Financial Statements and Supplementary Data
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
The Board of Directors and Shareholders of Welltower Inc.
We have audited the accompanying consolidated balance sheets of Welltower Inc. as of December 31, 2015 and 2014, and the related consolidated statements of comprehensive income, equity, and cash flows for each of the three years in the period ended December 31, 2015. Our audits also included the financial statement schedules listed in Item 15(a)(2) of this Form 10-K. These financial statements and schedules are the responsibility of the Company’s management. Our responsibility is to express an opinion on these financial statements and schedules based on our audits.
We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in all material respects, the consolidated financial position of Welltower Inc. at December 31, 2015 and 2014, and the consolidated results of its operations and its cash flows for each of the three years in the period ended December 31, 2015, in conformity with U.S. generally accepted accounting principles. Also, in our opinion, the related financial statement schedules, when considered in relation to the basic financial statements taken as a whole, present fairly in all material respects the information set forth therein.
As discussed in Note 2 to the consolidated financial statements, the Company changed its presentation of debt issuance costs as a result of the adoption of the amendments to the FASB Accounting Standards Codification resulting from Accounting Standards Update No. 2015-03, Simplifying the Presentation of Debt Issuance Costs.
We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), Welltower Inc.’s internal control over financial reporting as of December 31, 2015, based on criteria established in Internal Control-Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework) and our report dated February 18, 2016 expressed an unqualified opinion thereon.
/s/ Ernst & Young LLP
Toledo, Ohio
February 18, 2016
CONSOLIDATED BALANCE SHEETS
WELLTOWER, INC. AND SUBSIDIARIES
December 31,
December 31,
Assets
(In thousands)
Real estate investments:
Real property owned:
Land and land improvements
$
2,563,445
$
2,046,541
Buildings and improvements
25,522,542
21,799,313
Acquired lease intangibles
1,350,585
1,135,936
Real property held for sale, net of accumulated depreciation
169,950
323,818
Construction in progress
258,968
186,327
Gross real property owned
29,865,490
25,491,935
Less accumulated depreciation and amortization
(3,796,297)
(3,020,908)
Net real property owned
26,069,193
22,471,027
Real estate loans receivable
819,492
380,169
Net real estate investments
26,888,685
22,851,196
Other assets:
Investments in unconsolidated entities
542,281
744,151
Goodwill
68,321
68,321
Cash and cash equivalents
360,908
473,726
Restricted cash
61,782
79,697
Straight-line receivable
395,562
279,806
Receivables and other assets
706,306
466,026
Total other assets
2,135,160
2,111,727
Total assets
$
29,023,845
$
24,962,923
Liabilities and equity
Liabilities:
Borrowings under primary unsecured credit facility
$
835,000
$
-
Senior unsecured notes
8,548,055
7,729,405
Secured debt
3,509,142
2,963,186
Capital lease obligations
75,489
84,049
Accrued expenses and other liabilities
697,191
626,825
Total liabilities
13,664,877
11,403,465
Redeemable noncontrolling interests
183,083
86,409
Equity:
Preferred stock
1,006,250
1,006,250
Common stock
354,811
328,835
Capital in excess of par value
16,478,300
14,740,712
Treasury stock
(44,372)
(35,241)
Cumulative net income
3,725,772
2,842,022
Cumulative dividends
(6,846,056)
(5,635,923)
Accumulated other comprehensive income (loss)
(88,243)
(77,009)
Other equity
4,098
5,507
Total Welltower Inc. stockholders’ equity
14,590,560
13,175,153
Noncontrolling interests
585,325
297,896
Total equity
15,175,885
13,473,049
Total liabilities and equity
$
29,023,845
$
24,962,923
See accompanying notes
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
WELLTOWER INC. AND SUBSIDIARIES
(In thousands, except per share data)
Year Ended December 31,
Revenues:
Rental income
$
1,598,948
$
1,405,767
$
1,227,589
Resident fees and services
2,158,031
1,892,237
1,616,290
Interest income
84,141
37,667
32,663
Other income
18,706
7,875
4,066
Total revenues
3,859,826
3,343,546
2,880,608
Expenses:
Interest expense
492,169
481,039
458,360
Property operating expenses
1,622,257
1,403,358
1,206,813
Depreciation and amortization
826,240
844,130
865,800
General and administrative
147,416
142,943
108,318
Transaction costs
110,926
69,538
133,401
Loss (gain) on derivatives, net
(58,427)
(1,495)
4,470
Loss (gain) on extinguishment of debt, net
34,677
9,558
(909)
Provision for loan losses
-
-
2,110
Impairment of assets
2,220
-
-
Other expenses
46,231
10,262
-
Total expenses
3,223,709
2,959,333
2,778,363
Income from continuing operations before income taxes
and income from unconsolidated entities
636,117
384,213
102,245
Income tax (expense) benefit
(6,451)
1,267
(7,491)
Income (loss) from unconsolidated entities
(21,504)
(27,426)
(8,187)
Income from continuing operations
608,162
358,054
86,567
Discontinued operations:
Gain (loss) on sales of properties, net
-
6,411
49,138
Income (loss) from discontinued operations, net
-
2,575
Discontinued operations, net
-
7,135
51,713
Gain (loss) on real estate dispositions, net
280,387
147,111
-
Net income
888,549
512,300
138,280
Less: Preferred stock dividends
65,406
65,408
66,336
Less: Net income (loss) attributable to noncontrolling interests(1)
4,799
(6,770)
Net income attributable to common stockholders
$
818,344
$
446,745
$
78,714
Average number of common shares outstanding:
Basic
348,240
306,272
276,929
Diluted
349,424
307,747
278,761
Earnings per share:
Basic:
Income from continuing operations attributable to common
stockholders, including real estate dispositions
$
2.35
$
1.44
$
0.10
Discontinued operations, net
-
0.02
0.19
Net income attributable to common stockholders*
$
2.35
$
1.46
$
0.28
Diluted:
Income from continuing operations attributable to common
stockholders, including real estate dispositions
$
2.34
$
1.43
$
0.10
Discontinued operations, net
-
0.02
0.19
Net income attributable to common stockholders*
$
2.34
$
1.45
$
0.28
* Amounts may not sum due to rounding
(1) Includes amounts attributable to redeemable noncontrolling interests
See accompanying notes
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (CONTINUED)
WELLTOWER INC. AND SUBSIDIARIES
(In thousands)
Year Ended December 31,
Net income
$
888,549
$
512,300
$
138,280
Other comprehensive income (loss):
Unrecognized gain/(loss) on equity investments
-
(173)
Unrecognized gain/(loss) on cash flow hedges
(766)
4,409
1,898
Unrecognized actuarial gain/(loss)
(137)
1,522
Foreign currency translation gain/(loss)
(46,679)
(71,964)
(23,247)
Total other comprehensive income (loss)
(47,199)
(67,303)
(20,000)
Total comprehensive income
841,350
444,997
118,280
Total comprehensive income attributable to noncontrolling interests(1)
(31,166)
(14,678)
(13,267)
Total comprehensive income attributable to stockholders
$
810,184
$
430,319
$
105,013
(1) Includes amounts attributable to redeemable noncontrolling interests.
See accompanying notes
CONSOLIDATED STATEMENTS OF EQUITY
WELLTOWER INC. AND SUBSIDIARIES
(in thousands)
Accumulated
Capital in
Other
Preferred
Common
Excess of
Treasury
Cumulative
Cumulative
Comprehensive
Other
Noncontrolling
Stock
Stock
Par Value
Stock
Net Income
Dividends
Income
Equity
Interests
Total
Balances at December 31, 2012
$
1,022,917
$
260,396
$
10,543,690
$
(17,875)
$
2,184,819
$
(3,694,579)
$
(11,028)
$
6,461
$
225,718
$
10,520,519
Comprehensive income:
Net income
145,050
(5,487)
139,563
Other comprehensive income:
(13,503)
(6,497)
(20,000)
Total comprehensive income
119,563
Net change in noncontrolling interests
1,109
23,815
128,014
152,938
Amounts related to issuance of common stock
from dividend reinvestment and stock
incentive plans, net of forfeitures
3,852
239,837
(3,388)
(1,555)
238,746
Net proceeds from sale of common stock
23,000
1,607,281
1,630,281
Net proceeds from sale of preferred stock
Equity component of convertible debt
(1,543)
(555)
Equity consideration in business combinations
Proceeds from issuance of preferred shares
Redemption of preferred stock
Conversion of preferred stock
(5,556)
5,440
-
Option compensation expense
1,114
1,114
Cash dividends paid:
Common stock cash dividends
(839,939)
(839,939)
Preferred stock cash dividends
(66,336)
(66,336)
Balances at December 31, 2013
1,017,361
289,461
12,418,520
(21,263)
2,329,869
(4,600,854)
(24,531)
6,020
341,748
11,756,331
Comprehensive income:
Net income
512,153
(342)
511,811
Other comprehensive income:
(52,478)
(14,825)
(67,303)
Total comprehensive income
444,508
Net change in noncontrolling interests
(17,653)
(28,685)
(46,338)
Amounts related to issuance of common stock
from dividend reinvestment and stock
incentive plans, net of forfeitures
4,958
297,975
(13,978)
(1,425)
287,530
Net proceeds from sale of common stock
33,925
2,030,057
2,063,982
Equity component of convertible debt
1,193
Equity consideration in business combinations
Proceeds from issuance of preferred shares
Redemption of preferred stock
Conversion of preferred stock
(11,111)
10,878
-
Option compensation expense
Cash dividends paid:
Common stock cash dividends
(969,661)
(969,661)
Preferred stock cash dividends
(65,408)
(65,408)
Balances at December 31, 2014
1,006,250
328,835
14,740,712
(35,241)
2,842,022
(5,635,923)
(77,009)
5,507
297,896
13,473,049
Comprehensive income:
Net income
883,750
4,878
888,628
Other comprehensive income:
(11,234)
(35,965)
(47,199)
Total comprehensive income
841,429
Net change in noncontrolling interests
(23,077)
318,516
295,439
Amounts related to issuance of common stock
from dividend reinvestment and stock
incentive plans, net of forfeitures
4,400
305,022
(9,131)
(2,107)
298,184
Net proceeds from sale of common stock
20,246
1,450,212
1,470,458
Equity component of convertible debt
1,330
5,431
6,761
Option compensation expense
Cash dividends paid:
Common stock cash dividends
(1,144,727)
(1,144,727)
Preferred stock cash dividends
(65,406)
(65,406)
Balances at December 31, 2015
$
1,006,250
$
354,811
$
16,478,300
$
(44,372)
$
3,725,772
$
(6,846,056)
$
(88,243)
$
4,098
$
585,325
$
15,175,885
See accompanying notes
CONSOLIDATED STATEMENTS OF CASH FLOWS
WELLTOWER INC. AND SUBSIDIARIES
Year Ended December 31,
(In thousands)
Operating activities
Net income
$
888,549
$
512,300
$
138,280
Adjustments to reconcile net income to
net cash provided from (used in) operating activities:
Depreciation and amortization
826,240
844,130
873,960
Other amortization expenses
4,991
6,971
8,097
Provision for loan losses
-
-
2,110
Impairment of assets
2,220
-
-
Stock-based compensation expense
30,844
32,075
20,177
Loss (gain) on derivatives, net
(58,427)
(1,495)
4,470
Loss (gain) on extinguishment of debt, net
34,677
9,558
(909)
Loss (income) from unconsolidated entities
21,504
27,426
8,187
Rental income in excess of cash received
(115,756)
(74,552)
(46,068)
Amortization related to above (below) market leases, net
4,018
Loss (gain) on sales of properties, net
(280,387)
(153,522)
(49,138)
Other (income) expense, net
31,979
-
-
Distributions by unconsolidated entities
9,060
8,885
Increase (decrease) in accrued expenses and other liabilities
(18,099)
(48,381)
67,557
Decrease (increase) in receivables and other assets
(25,639)
(47,571)
Net cash provided from (used in) operating activities
1,373,468
1,138,670
988,497
Investing activities
Cash disbursed for acquisitions
(3,364,891)
(2,210,600)
(3,597,955)
Cash disbursed for capital improvements to existing properties
(187,752)
(132,780)
(135,832)
Cash disbursed for construction in progress
(244,561)
(197,881)
(247,560)
Capitalized interest
(8,670)
(7,150)
(6,700)
Investment in real estate loans receivable
(598,722)
(202,207)
(117,059)
Other investments, net of payments
(141,994)
(100,033)
(15,634)
Principal collected on real estate loans receivable
131,830
105,496
102,886
Contributions to unconsolidated entities
(160,323)
(353,496)
(99,769)
Distributions by unconsolidated entities
130,880
57,183
30,853
Proceeds from (payments on) derivatives
106,360
10,269
(6,803)
Decrease (increase) in restricted cash
29,719
(6,072)
79,957
Proceeds from sales of real property
823,964
911,065
482,023
Net cash provided from (used in) investing activities
(3,484,160)
(2,126,206)
(3,531,593)
Financing activities
Net increase (decrease) under unsecured lines of credit arrangements
835,000
(130,000)
130,000
Proceeds from issuance of senior unsecured notes
1,451,434
773,992
1,756,192
Payments to extinguish senior unsecured notes
(558,830)
(365,188)
(517,625)
Net proceeds from the issuance of secured debt
228,685
109,503
89,208
Payments on secured debt
(573,390)
(341,839)
(674,103)
Net proceeds from the issuance of common stock
1,755,722
2,343,868
1,854,637
Decrease (increase) in deferred loan expenses
(11,513)
(16,782)
(13,503)
Contributions by noncontrolling interests(1)
173,018
9,962
5,072
Distributions to noncontrolling interests(1)
(50,877)
(43,691)
(35,592)
Acquisitions of noncontrolling interests
(5,663)
(1,175)
(23,247)
Cash distributions to stockholders
(1,210,133)
(1,035,069)
(906,275)
Other financing activities
(27,004)
(409)
2,906
Net cash provided from (used in) financing activities
2,006,449
1,303,172
1,667,670
Effect of foreign currency translation on cash and cash equivalents
(8,575)
(690)
Increase (decrease) in cash and cash equivalents
(112,818)
314,946
(874,984)
Cash and cash equivalents at beginning of period
473,726
158,780
1,033,764
Cash and cash equivalents at end of period
$
360,908
$
473,726
$
158,780
Supplemental cash flow information:
Interest paid
$
492,771
$
504,165
$
447,108
Income taxes paid
12,214
18,548
12,110
(1) Includes amounts attributable to redeemable noncontrolling interests.
See accompanying notes.
WELLTOWER INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
1. Business
Welltower Inc. (formerly Health Care REIT, Inc.), an S&P 500 company headquartered in Toledo, Ohio, is driving the transformation of health care infrastructure. The Company invests with leading seniors housing operators, post-acute providers and health systems to fund the real estate and infrastructure needed to scale innovative care delivery models and improve people’s wellness and overall health care experience. WelltowerTM, a real estate investment trust (“REIT”), owns 1,482 properties in major, high-growth markets in the United States, Canada and the United Kingdom, consisting of seniors housing and post-acute communities and outpatient medical properties. Founded in 1970, we were the first REIT to invest exclusively in health care facilities.
2. Accounting Policies and Related Matters
Principles of Consolidation
The consolidated financial statements include the accounts of our wholly-owned subsidiaries and joint venture (“JV”) entities that we control, through voting rights or other means. All material intercompany transactions and balances have been eliminated in consolidation. At inception of JV transactions, we identify entities for which control is achieved through means other than voting rights (“variable interest entities” or “VIEs”) and determine which business enterprise is the primary beneficiary of its operations. A VIE is broadly defined as an entity where either (i) the equity investors as a group, if any, do not have a controlling financial interest, or (ii) the equity investment at risk is insufficient to finance that entity’s activities without additional subordinated financial support. We consolidate investments in VIEs when we are determined to be the primary beneficiary. Accounting Standards Codification Topic 810, Consolidations (“ASC 810”), requires enterprises to perform a qualitative approach to determining whether or not a VIE will need to be consolidated on a continuous basis. This evaluation is based on an enterprise’s ability to direct and influence the activities of a VIE that most significantly impact that entity’s economic performance. For investments in JVs, we evaluate the type of rights held by the limited partner(s), which may preclude consolidation in circumstances in which the sole general partner would otherwise consolidate the limited partnership. The assessment of limited partners’ rights and their impact on the presumption of control over a limited partnership by the sole general partner should be made when an investor becomes the sole general partner and should be reassessed if (i) there is a change to the terms or in the exercisability of the rights of the limited partners, (ii) the sole general partner increases or decreases its ownership in the limited partnership, or (iii) there is an increase or decrease in the number of outstanding limited partnership interests. We similarly evaluate the rights of managing members of limited liability companies.
Use of Estimates
The preparation of the financial statements in conformity with U.S. generally accepted accounting principles (“U.S. GAAP”) requires us to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Actual results could differ from those estimates.
Revenue Recognition
Revenue is recorded in accordance with U.S. GAAP, which requires that revenue be recognized after four basic criteria are met. These four criteria include persuasive evidence of an arrangement, the rendering of service, fixed and determinable income and reasonably assured collectability. Interest income on loans is recognized as earned based upon the principal amount outstanding subject to an evaluation of collectability risk. Substantially all of our operating leases contain escalating rent structures. Leases with fixed annual rental escalators are generally recognized on a straight-line basis over the initial lease period, subject to a collectability assessment. Rental income related to leases with contingent rental escalators is generally recorded based on the contractual cash rental payments due for the period. Leases in our outpatient medical portfolio typically include some form of operating expense reimbursement by the tenant. Certain payments made to operators are treated as lease incentives and amortized as a reduction of revenue over the lease term. We recognize resident fees and services, other than move-in fees, monthly as services are provided. Lease agreements with residents generally have a term of one year and are cancelable by the resident with 30 days’ notice.
Cash and Cash Equivalents
Cash and cash equivalents consist of all highly liquid investments with an original maturity of three months or less.
Restricted Cash
Restricted cash primarily consists of amounts held by lenders to provide future payments for real estate taxes, insurance, tenant and capital improvements and amounts held in escrow relating to acquisitions we are entitled to receive over a period of time as outlined in the escrow agreement.
Deferred Loan Expenses
Deferred loan expenses are costs incurred by us in connection with the issuance, assumption and amendments of debt
WELLTOWER INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
arrangements. We amortize these costs over the term of the debt using the straight-line method, which approximates the effective interest method.
Investments in Unconsolidated Entities
Investments in entities that we do not consolidate but have the ability to exercise significant influence over operating and financial policies are reported under the equity method of accounting. Under the equity method, our share of the investee’s earnings or losses is included in our consolidated results of operations. To the extent that our cost basis is different from the basis reflected at the entity level, the basis difference is generally amortized over the lives of the related assets and liabilities, and such amortization is included in our share of equity in earnings of the entity. The initial carrying value of investments in unconsolidated entities is based on the amount paid to purchase the entity interest or the estimated fair value of the assets prior to the sale of interests in the entity. We evaluate our equity method investments for impairment based upon a comparison of the estimated fair value of the equity method investment to its carrying value. When we determine a decline in the estimated fair value of such an investment below its carrying value is other-than-temporary, an impairment is recorded.
Marketable Securities
We classify marketable securities as available-for-sale. These securities are carried at their fair value with unrealized gains and losses recognized in stockholders’ equity as a component of accumulated other comprehensive income (loss). When we determine declines in fair value of marketable securities are other-than-temporary, a loss is recognized in earnings.
Redeemable Noncontrolling Interests
Certain noncontrolling interests are redeemable at fair value. Accordingly, we record the carrying amount of the noncontrolling interests at the greater of (i) the initial carrying amount, increased or decreased for the noncontrolling interest’s share of net income or loss and its share of other comprehensive income or loss and dividends or (ii) the redemption value. If it is probable that the interests will be redeemed in the future, we accrete the carrying value to the redemption value over the period until expected redemption, currently a weighted-average period of approximately four years. In accordance with ASC 810, the redeemable noncontrolling interests are classified outside of permanent equity, as a mezzanine item, in the balance sheet. At December 31, 2015, the current redemption value of redeemable noncontrolling interests exceeded the carrying value of $183,083,000 by $116,000,000.
During 2014 and 2015, we entered into DownREIT partnerships which give a real estate seller the ability to exchange its property on a tax deferred basis for equity membership interests (“OP units”). The OP units may be redeemed any time following the first anniversary of the date of issuance at the election of the holders for one share of our common stock per unit or, at our option, cash.
Real Property Owned
Real property developed by us is recorded at cost, including the capitalization of construction period interest. Expenditures for repairs and maintenance are expensed as incurred. Property acquisitions are accounted for as business combinations where we measure the assets acquired, liabilities (including assumed debt and contingencies) and any noncontrolling interests at their fair values on the acquisition date. The cost of real property acquired, which represents substantially all of the purchase price, is allocated to net tangible and identifiable intangible assets based on their respective fair values. These properties are depreciated on a straight-line basis over their estimated useful lives which range from 15 to 40 years for buildings and 5 to 15 years for improvements. Tangible assets primarily consist of land, buildings and improvements, including those related to capital leases. We consider costs incurred in conjunction with re-leasing properties, including tenant improvements and lease commissions, to represent the acquisition of productive assets and, accordingly, such costs are reflected as investment activities in our statement of cash flows.
The remaining purchase price is allocated among identifiable intangible assets primarily consisting of the above or below market component of in-place leases and the value associated with the presence of in-place tenants or residents. The value allocable to the above or below market component of the acquired in-place lease is determined based upon the present value (using a discount rate which reflects the risks associated with the acquired leases) of the difference between (i) the contractual amounts to be paid pursuant to the lease over its remaining term, and (ii) management’s estimate of the amounts that would be paid using fair market rates over the remaining term of the lease. The amounts allocated to above market leases are included in acquired lease intangibles and below market leases are included in other liabilities in the balance sheet and are amortized to rental income over the remaining terms of the respective leases.
The total amount of other intangible assets acquired is further allocated to in-place lease values and customer relationship values for in-place tenants based on management’s evaluation of the specific characteristics of each tenant’s lease and our overall relationship with that respective tenant. Characteristics considered by management in allocating these values include the nature and extent of our existing business relationships with the tenant, growth prospects for developing new business with the tenant, the tenant’s credit quality and expectations of lease renewals, among other factors. The total amount of other intangible assets acquired is further allocated to in-place lease values for in-place residents with such value representing (i) value associated with lost revenue related to
WELLTOWER INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
tenant reimbursable operating costs that would be incurred in an assumed re-leasing period, and (ii) value associated with lost rental revenue from existing leases during an assumed re-leasing period. This intangible asset will be amortized over the remaining life of the lease.
The net book value of long-lived assets is reviewed quarterly on a property by property basis to determine if facts and circumstances suggest that the assets may be impaired or that the depreciable life may need to be changed. We consider external factors relating to each asset and the existence of a master lease which may link the cash flows of an individual asset to a larger portfolio of assets leased to the same tenant. If these factors and the projected undiscounted cash flows of the asset over the remaining depreciation period indicate that the asset will not be recoverable, the carrying value is reduced to the estimated fair market value. In addition, we are exposed to the risks inherent in concentrating investments in real estate, and in particular, the seniors housing and health care industries. A downturn in the real estate industry could adversely affect the value of our properties and our ability to sell properties for a price or on terms acceptable to us.
Capitalization of Construction Period Interest
We capitalize interest costs associated with funds used for the construction of properties owned directly by us. The amount capitalized is based upon the balance outstanding during the construction period using the rate of interest which approximates our cost of financing. We capitalize interest costs related to construction of real property owned by us. Our interest expense reflected in the consolidated statements of comprehensive income has been reduced by the amounts capitalized.
Gain on Sale of Assets
We recognize sales of assets only upon the closing of the transaction with the purchaser. Payments received from purchasers prior to closing are recorded as deposits and classified as other assets on our consolidated balance sheets. Gains on assets sold are recognized using the full accrual method upon closing when (i) the collectability of the sales price is reasonably assured, (ii) we are not obligated to perform significant activities after the sale to earn the profit, (iii) we have received adequate initial investment from the purchaser and (iv) other profit recognition criteria have been satisfied. Gains may be deferred in whole or in part until the sales satisfy the requirements of gain recognition on sales of real estate.
Real Estate Loans Receivable
Real estate loans receivable consist of mortgage loans and other real estate loans. Interest income on loans is recognized as earned based upon the principal amount outstanding subject to an evaluation of collectability risks. The loans are primarily collateralized by a first, second or third mortgage lien, a leasehold mortgage on, or an assignment of the partnership interest in, the related properties, corporate guaranties and/or personal guaranties.
Allowance for Losses on Loans Receivable
The allowance for losses on loans receivable is maintained at a level believed adequate to absorb potential losses in our loans receivable. The determination of the allowance is based on a quarterly evaluation of these loans, including general economic conditions and estimated collectability of loan payments. We evaluate the collectability of our loans receivable based on a combination of factors, including, but not limited to, delinquency status, historical loan charge-offs, financial strength of the borrower and guarantors and value of the underlying collateral. If such factors indicate that there is greater risk of loan charge-offs, additional allowances or placement on non-accrual status may be required. A loan is impaired when, based on current information and events, it is probable that we will be unable to collect all amounts due as scheduled according to the contractual terms of the original loan agreement. Consistent with this definition, all loans on non-accrual are deemed impaired. To the extent circumstances improve and the risk of collectability is diminished, we will return these loans to full accrual status. While a loan is on non-accrual status, any cash receipts are applied against the outstanding principal balance.
Goodwill
We account for goodwill in accordance with U.S. GAAP. Goodwill is tested annually for impairment and is tested for impairment more frequently if events and circumstances indicate that the asset might be impaired. An impairment loss is recognized to the extent that the carrying amount, including goodwill, exceeds the reporting unit’s fair value and the implied fair value of goodwill is less than the carrying amount of that goodwill. We have not had any goodwill impairments.
Fair Value of Derivative Instruments
Derivatives are recorded at fair value on the balance sheet as assets or liabilities. The valuation of derivative instruments requires us to make estimates and judgments that affect the fair value of the instruments. Fair values of our derivatives are estimated by pricing models that consider the forward yield curves and discount rates. The fair value of our forward exchange contracts are estimated by pricing models that consider foreign currency spot rates, forward trade rates and discount rates. Such amounts and the recognition of such amounts are subject to significant estimates that may change in the future. See Note 11 for additional information.
WELLTOWER INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Federal Income Tax
We have elected to be treated as a REIT under the applicable provisions of the Internal Revenue Code of 1986, as amended (the “Code”), commencing with our first taxable year, and made no provision for federal income tax purposes prior to our acquisition of our “taxable REIT subsidiaries.” As a result of these as well as subsequent acquisitions, we now record income tax expense or benefit with respect to certain of our entities that are taxed as taxable REIT subsidiaries under provisions similar to those applicable to regular corporations and not under the REIT provisions. We account for deferred income taxes using the asset and liability method and recognize deferred tax assets and liabilities for the expected future tax consequences of events that have been included in our financial statements or tax returns. Under this method, we determine deferred tax assets and liabilities based on the differences between the financial reporting and tax bases of assets and liabilities using enacted tax rates in effect for the year in which the differences are expected to reverse. Any increase or decrease in the deferred tax liability that results from a change in circumstances, and that causes a change in our judgment about expected future tax consequences of events, is included in the tax provision when such changes occur. Deferred income taxes also reflect the impact of operating loss and tax credit carryforwards. A valuation allowance is provided if we believe it is more likely than not that all or some portion of the deferred tax asset will not be realized. Any increase or decrease in the valuation allowance that results from a change in circumstances, and that causes a change in our judgment about the realizability of the related deferred tax asset, is included in the tax provision when such changes occur. See Note 18 for additional information.
Foreign Currency
Certain of our subsidiaries’ functional currencies are the local currencies of their respective countries. We translate the results of operations of our foreign subsidiaries into U.S. dollars using average rates of exchange in effect during the period, and we translate balance sheet accounts using exchange rates in effect at the end of the period. We record resulting currency translation adjustments in accumulated other comprehensive income, a component of stockholders’ equity, on our consolidated balance sheets. We record transaction gains and losses in our consolidated statements of comprehensive income.
Earnings Per Share
Basic earnings per share is computed by dividing net income available to common stockholders by the weighted-average number of shares outstanding for the period adjusted for non-vested shares of restricted stock. The computation of diluted earnings per share is similar to basic earnings per share, except that the number of shares is increased to include the number of additional common shares that would have been outstanding if the potentially dilutive common shares had been issued.
New Accounting Standards
In May 2014, the FASB issued ASU No. 2014-09, “Revenue from Contracts with Customers (Topic 606)” (“ASU 2014-09”). The standard is a comprehensive new revenue recognition model that requires revenue to be recognized in a manner to depict the transfer of goods or services to a customer at an amount that reflects the consideration expected to be received in exchange for those goods or services. ASU 2014-09 is effective for fiscal years, and interim periods within those years, beginning after December 15, 2017, and early adoption is permitted beginning after December 15, 2016. We are currently evaluating the impact that the standard will have on our consolidated financial statements and have not yet determined the method by which we will adopt the standard.
In February 2015, the FASB issued ASU No. 2015-02, “Consolidation (Topic 810): Amendments to the Consolidation Analysis” (“ASU 2015-02”), which makes certain changes to both the variable interest model and the voting interest model, including changes to (1) the identification of variable interests (fees paid to a decision maker or service provider), (2) the variable interest entity characteristics for a limited partnership or similar entity and (3) the primary beneficiary determination. ASU 2015-02 is effective beginning January 1, 2016. We are continuing to evaluate this guidance; however, we do not expect its adoption to have a significant impact on our consolidated financial statements.
In April 2015, the FASB issued ASU No. 2015-03, “Simplifying the Presentation of Debt Issuance Costs” (“ASU 2015-03”), which requires that debt issuance costs related to a recognized debt liability be presented in the balance sheet as a direct deduction from the carrying amount of that debt liability. The recognition and measurement guidance for debt issuance costs are not affected. Also in August 2015, the FASB issued ASU No. 2015-15, “Presentation and Subsequent Measurement of Debt Issuance Costs Associated with Line-of-Credit Arrangements” (“ASU 2015-15”), which clarifies the SEC staff’s position not objecting to an entity deferring and presenting debt issuance costs as an asset and subsequently amortizing such costs, regardless of whether there are any outstanding borrowings on the line-of-credit arrangement. We adopted ASU 2015-03 and 2015-15 for the year ended December 31, 2015. There were deferred financing costs of $56,696,000 and $51,373,000 as of December 31, 2015 and 2014, respectively, that are now classified within senior unsecured notes and secured debt on our Consolidated Balance Sheets.
In September 2015, the FASB issued ASU No. 2015-16, “Simplifying the Accounting for Measurement-Period Adjustments” (“ASU 2015-16”). This guidance eliminated the requirement that an acquirer in a business combination account for adjustments it makes to the provisional amounts retrospectively. Instead, an acquirer recognizes these measurement-period adjustments during the
WELLTOWER INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
period in which they are determined, including the effect on earnings of any amounts the acquirer would have recorded in previous periods if the accounting had been completed at the acquisition date. ASU 2015-16 is effective beginning January 1, 2016. We are continuing to evaluate this guidance; however, we do not expect its adoption to have a significant impact on our consolidated financial statements.
Reclassifications
Certain amounts in prior years have been reclassified to conform to current year presentation.
3. Real Property Acquisitions and Development
The total purchase price for all properties acquired has been allocated to the tangible and identifiable intangible assets, liabilities and noncontrolling interests based upon their respective fair values in accordance with our accounting policies. The results of operations for these acquisitions have been included in our consolidated results of operations since the date of acquisition and are a component of the appropriate segments. Transaction costs primarily represent costs incurred with property acquisitions, including due diligence costs, fees for legal and valuation services and termination of pre-existing relationships computed based on the fair value of the assets acquired, lease termination fees and other acquisition-related costs. Certain of our subsidiaries’ functional currencies are the local currencies of their respective countries. See Note 2 for information regarding our foreign currency policies. During the year ended December 31, 2015, we finalized our purchase price allocation of certain previously reported acquisitions and there were no material changes from those previously disclosed.
Triple-Net Activity
The following provides our purchase price allocations and other triple-net real property investment activity for the periods presented (in thousands):
Year Ended December 31,
2015(1)
Land and land improvements
$
142,854
$
141,387
$
54,596
Buildings and improvements
1,358,717
1,365,638
360,594
Acquired lease intangibles
4,408
19,196
-
Restricted cash
-
Receivables and other assets
4,895
1,020
Total assets acquired(2)
1,506,179
1,531,116
416,399
Secured debt
(47,741)
(130,638)
(9,810)
Senior unsecured notes
-
(48,567)
-
Accrued expenses and other liabilities
(2,905)
(9,067)
(540)
Total liabilities assumed
(50,646)
(188,272)
(10,350)
Noncontrolling interests
(13,465)
-
-
Non-cash acquisition related activity(3)
(38,355)
(3,453)
(12,207)
Cash disbursed for acquisitions
1,403,713
1,339,391
393,842
Construction in progress additions
143,140
135,349
145,624
Less: Capitalized interest
(5,699)
(4,582)
(4,828)
Accruals
Foreign currency translation
(167)
-
Non-cash related activity
-
(14,459)
-
Cash disbursed for construction in progress
137,274
116,729
140,796
Capital improvements to existing properties
45,293
18,901
35,912
Total cash invested in real property, net of cash acquired
$
1,586,280
$
1,475,021
$
570,550
(1) Includes acquisitions with an aggregate purchase price of $910,433,000 for which the allocation of the purchase price consideration is preliminary and subject to change.
(2) Excludes $16,572,000, $1,382,000, and $0 of cash acquired during the year ended December 31, 2015, 2014 and 2013, respectively.
(3) For the year ended December 31, 2015, $23,288,000 relates to the acquisition of assets previously financed as real estate loans receivable and $6,743,000 previously financed as equity investments. For the year ended December 31, 2013, $12,204,000 relates to an asset swap transaction. Please refer to Notes 5 and 6.
WELLTOWER INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Seniors Housing Operating Activity
Acquisitions of seniors housing operating properties are structured under RIDEA, which is described in Note 18. This structure results in the inclusion of all resident revenues and related property operating expenses from the operation of these qualified health care properties in our consolidated statements of comprehensive income.
The following is a summary of our seniors housing operating real property investment activity for the periods presented (in thousands):
Year Ended December 31,
2015(1)
Land and land improvements
$
218,581
$
57,534
$
445,152
Buildings and improvements
2,367,486
297,314
4,275,046
Acquired lease intangibles
187,512
12,983
396,444
Construction in progress
-
27,957
-
Restricted cash
11,798
44,427
Receivables and other assets
29,501
9,327
79,564
Total assets acquired(2)
2,814,878
405,919
5,240,633
Secured debt
(871,471)
(19,834)
(1,275,245)
Senior unsecured notes
(24,621)
-
-
Accrued expenses and other liabilities
(81,778)
(17,802)
(96,709)
Total liabilities assumed
(977,870)
(37,636)
(1,371,954)
Noncontrolling interests
(183,854)
(482)
(232,575)
Non-cash acquisition related activity(3)
-
-
(555,563)
Cash disbursed for acquisitions
1,653,154
367,801
3,080,541
Construction in progress additions
44,173
12,291
3,894
Less: Capitalized interest
(1,740)
(714)
(57)
Less: Foreign currency translation
(2,499)
(2,012)
-
Cash disbursed for construction in progress
39,934
9,565
3,837
Capital improvements to existing properties
104,308
86,803
72,258
Total cash invested in real property, net of cash acquired
$
1,797,396
$
464,169
$
3,156,636
(1) Includes an aggregate purchase price of $2,002,698,000 relating to acquisitions for which the allocation of the purchase price consideration is preliminary and subject to change.
(2) Excludes $30,930,000, $9,060,000 and $92,148,000 of cash acquired during the years ended December 31, 2015, 2014 and 2013, respectively.
(3) Represents Sunrise Senior Living loan and noncontrolling interest acquisitions during the first quarter of 2013.
WELLTOWER INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Outpatient Medical Activity
Accrued contingent consideration related to certain outpatient medical acquisitions was $0, $27,374,000 and $26,187,000 as of December 31, 2015, 2014 and 2013, respectively. The following is a summary of our outpatient medical real property investment activity for the periods presented (in thousands):
Year Ended December 31,
2015(1)
Land and land improvements
$
176,689
$
63,129
$
14,515
Buildings and improvements
317,484
567,847
156,087
Acquired lease intangibles
45,226
46,661
9,432
Restricted cash
-
-
Receivables and other assets
-
Total assets acquired(2)
540,338
677,637
180,883
Secured debt
(120,977)
(66,113)
(55,884)
Accrued expenses and other liabilities
(7,777)
(22,293)
(1,041)
Total liabilities assumed
(128,754)
(88,406)
(56,925)
Noncontrolling interests
(76,535)
(39,987)
(386)
Non-cash acquisition related activity(3)
(27,025)
(45,836)
-
Cash disbursed for acquisitions
308,024
503,408
123,572
Construction in progress additions
70,560
99,878
123,494
Less: Capitalized interest
(1,286)
(1,854)
(1,815)
Accruals(4)
(1,921)
(26,437)
(18,752)
Cash disbursed for construction in progress
67,353
71,587
102,927
Capital improvements to existing properties
38,151
27,076
27,662
Total cash invested in real property, net of cash acquired
$
413,528
$
602,071
$
254,161
(1) Includes acquisitions with an aggregate purchase price of $91,829,000 for which the allocation of the purchase price consideration is preliminary and subject to change.
(2) Excludes $5,522,000, $0 and $0 of cash acquired during the years ended December 31, 2015, 2014 and 2013, respectively.
(3) Non-cash activity relates to the acquisition of a controlling interest in a portfolio of properties that was historically reported as an unconsolidated property investment for the year ended December 31, 2015. For the year ended December 31, 2014, the non-cash activity relates to an acquisition of assets previously financed as real estate loans. Please refer to Note 6 for additional information.
(4) Represents non-cash consideration accruals for amounts to be paid in future periods relating to properties that converted in the periods noted above.
Construction Activity
The following is a summary of the construction projects that were placed into service and began generating revenues during the periods presented:
Year Ended
December 31, 2015
December 31, 2014
December 31, 2013
Development projects:
Triple-net
$
104,844
$
71,569
$
133,181
Seniors housing operating
19,869
-
-
Outpatient medical
16,592
127,290
127,363
Total development projects
141,305
198,859
260,544
Expansion projects
38,808
24,804
26,395
Total construction in progress conversions
$
180,113
$
223,663
$
286,939
At December 31, 2015, future minimum lease payments receivable under operating leases (excluding properties in our seniors housing operating partnerships and excluding any operating expense reimbursements) are as follows (in thousands):
WELLTOWER INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
$
1,403,745
1,402,087
1,392,188
1,350,736
1,338,549
Thereafter
11,353,245
Totals
$
18,240,550
4. Real Estate Intangibles
The following is a summary of our real estate intangibles, excluding those classified as held for sale, as of the dates indicated (dollars in thousands):
December 31, 2015
December 31, 2014
Assets:
In place lease intangibles
$
1,179,537
$
988,290
Above market tenant leases
67,529
65,684
Below market ground leases
80,224
62,426
Lease commissions
23,295
19,536
Gross historical cost
1,350,585
1,135,936
Accumulated amortization
(881,096)
(776,501)
Net book value
$
469,489
$
359,435
Weighted-average amortization period in years
13.4
17.7
Liabilities:
Below market tenant leases
$
93,089
$
91,168
Above market ground leases
7,907
7,859
Gross historical cost
100,996
99,027
Accumulated amortization
(46,048)
(40,891)
Net book value
$
54,948
$
58,136
Weighted-average amortization period in years
14.5
14.4
The following is a summary of real estate intangible amortization for the periods presented (in thousands):
Year Ended December 31,
Rental income related to above/below market tenant leases, net
$
(2,746)
$
$
Property operating expenses related to above/below market ground leases, net
(1,272)
(1,248)
(1,208)
Depreciation and amortization related to in place lease intangibles and lease commissions
(115,855)
(214,966)
(246,938)
The future estimated aggregate amortization of intangible assets and liabilities is as follows for the periods presented (in thousands):
WELLTOWER INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Assets
Liabilities
$
137,635
$
7,523
81,166
6,812
47,283
6,185
25,582
5,775
22,163
5,294
Thereafter
155,660
23,359
Totals
$
469,489
$
54,948
5. Dispositions, Assets Held for Sale and Discontinued Operations
We periodically sell properties for various reasons, including favorable market conditions or the exercise of tenant purchase options. Impairment of assets as reflected in our consolidated statements of comprehensive income relate to properties designated as held for sale and represent the charges necessary to adjust the carrying values to estimated fair values less costs to sell based on current sales price expectations. The following is a summary of our real property disposition activity for the periods presented (in thousands):
Year Ended
December 31, 2015
December 31, 2014
December 31, 2013
Real property dispositions:
Triple-net
$
356,300
$
747,720
$
189,572
Outpatient medical(1)
181,553
45,695
259,367
Land parcels
5,724
-
-
Total dispositions
543,577
793,415
448,939
Gain (loss) on sales of real property, net
280,387
153,522
49,138
Seller financing on sales of real property
-
-
(3,850)
Non-cash disposition activity
-
(35,872)
(12,204)
Proceeds from real property sales
$
823,964
$
911,065
$
482,023
(1) Dispositions occurring in the year ended December 31, 2015 primarily relate to the disposition of an unconsolidated equity investment with Forest City Enterprises.
Dispositions and Assets Held for Sale
Pursuant to our adoption of ASU No. 2014-08, “Presentation of Financial Statements (Topic 205) and Property, Plant and Equipment (Topic 360): Reporting Discontinued Operations and Disclosures of Disposals of Components of an Entity” (ASU 2014-08”), operating results attributable to properties sold subsequent to or classified as held for sale after January 1, 2014 and which do not meet the definition of discontinued operations are no longer reclassified on our Consolidated Statements of Comprehensive Income. The following represents the activity related to these properties for the periods presented (in thousands):
Year Ended
December 31,
Revenues:
Rental income
$
35,241
$
115,759
$
132,797
Expenses:
Interest expense
5,503
24,046
26,660
Property operating expenses
6,102
7,669
8,970
Provision for depreciation
6,342
35,239
41,494
Total expenses
17,947
66,954
77,124
Income (loss) from real estate dispositions, net
$
17,294
$
48,805
$
55,673
Discontinued Operations
We have reclassified the income and expenses attributable to all properties sold prior to or held for sale at January 1, 2014 to discontinued operations in accordance with ASU 2014-08. The following illustrates the reclassification impact as reported in our Consolidated Statements of Comprehensive Income as a result of classifying these properties as discontinued operations for the years presented (in thousands):
WELLTOWER INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Year Ended December 31,
Revenues:
Rental income
$
-
$
$
18,377
Expenses:
Interest expense
-
4,246
Property operating expenses
-
-
3,396
Provision for depreciation
-
-
8,160
Income (loss) from discontinued operations, net
$
-
$
$
2,575
6. Real Estate Loans Receivable
The following is a summary of our real estate loans receivable (in thousands):
December 31,
Mortgage loans
$
635,492
$
188,651
Other real estate loans
184,000
191,518
Totals
$
819,492
$
380,169
The following is a summary of our real estate loan activity for the periods presented (in thousands):
Year Ended
December 31, 2015
December 31, 2014
December 31, 2013
Outpatient
Outpatient
Outpatient
Triple-net
Medical
Totals
Triple-net
Medical
Totals
Triple-net
Medical
Totals
Advances on real estate loans receivable:
Investments in new loans
$
530,497
$
-
$
530,497
$
61,730
$
60,902
$
122,632
$
41,180
$
4,095
$
45,275
Draws on existing loans
65,614
2,611
68,225
59,420
20,155
79,575
71,315
4,319
75,634
Sub-total
596,111
2,611
598,722
121,150
81,057
202,207
112,495
8,414
120,909
Less: Seller financing on property sales
-
-
-
-
-
-
(3,850)
-
(3,850)
Net cash advances on real estate loans
596,111
2,611
598,722
121,150
81,057
202,207
108,645
8,414
117,059
Receipts on real estate loans receivable:
Loan payoffs
121,778
-
121,778
71,004
48,258
119,262
69,596
-
69,596
Principal payments on loans
33,340
-
33,340
31,998
32,070
33,216
33,290
Sub-total
155,118
-
155,118
103,002
48,330
151,332
102,812
102,886
Less: Non-cash activity(1)
(23,288)
-
(23,288)
-
(45,836)
(45,836)
-
-
-
Net cash receipts on real estate loans
131,830
-
131,830
103,002
2,494
105,496
102,812
102,886
Net cash advances (receipts) on real estate loans
464,281
2,611
466,892
18,148
78,563
96,711
5,833
8,340
14,173
Change in balance due to foreign currency translation
(4,281)
-
(4,281)
(2,852)
-
(2,852)
1,402
-
1,402
Net change in real estate loans receivable
$
436,712
$
2,611
$
439,323
$
15,296
$
32,727
$
48,023
$
7,235
$
8,340
$
15,575
(1) Represents an acquisition of assets previously financed as a real estate loan. Please see Note 3 for additional information.
The following is a summary of the allowance for losses on loans receivable for the periods presented (in thousands):
WELLTOWER INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Year Ended December 31,
Balance at beginning of year
$
-
$
-
$
-
Provision for loan losses
-
-
2,110
Charge-offs
-
-
(2,110)
Balance at end of year
$
-
$
-
$
-
The following is a summary of our loan impairments (in thousands):
Year Ended December 31,
Balance of impaired loans at end of year
$
-
$
21,000
$
Allowance for loan losses
-
-
-
Balance of impaired loans not reserved
$
-
$
21,000
$
Average impaired loans for the year
$
10,500
$
10,750
$
2,365
Interest recognized on impaired loans(1)
-
(1) Represents interest recognized prior to placement on non-accrual status.
7. Investments in Unconsolidated Entities
We participate in a number of joint ventures, which generally invest in seniors housing and health care real estate. The results of operations for these properties have been included in our consolidated results of operations from the date of acquisition by the joint ventures and are reflected in our statements of comprehensive income as income or loss from unconsolidated entities. The following is a summary of our investments in unconsolidated entities (dollars in thousands):
Percentage Ownership(1)
December 31, 2015
December 31, 2014
Triple-net
10% to 49%
$
36,351
$
31,511
Seniors housing operating
10% to 50%
499,537
539,147
Outpatient medical
36% to 49%
6,393
173,493
Total
$
542,281
$
744,151
(1) Excludes ownership of in-substance real estate.
At December 31, 2015, the aggregate unamortized basis difference of our joint venture investments of $158,204,000 is primarily attributable to appreciation of the underlying properties and transaction costs. This difference will be amortized over the remaining useful life of the related properties and included in the reported amount of income from unconsolidated entities. Summary combined financial information for our investments in unconsolidated entities held as of December 31, 2015 is as follows (dollars in thousands):
December 31, 2015
December 31, 2014
Net real estate investments
$
1,359,034
$
2,107,201
Other assets
2,241,084
992,637
Total assets
3,600,118
3,099,838
Total liabilities
2,769,093
1,769,457
Redeemable noncontrolling interests
14,024
40,525
Total equity
$
817,001
$
1,289,856
Year Ended December 31,
Total revenues
$
2,947,993
$
1,879,240
$
1,739,381
Net income (loss)
(40,116)
5,002
(15,265)
WELLTOWER INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
8. Credit Concentration
We use net operating income from continuing operations (“NOI”) as our credit concentration metric. See Note 17 for additional information and reconciliation. The following table summarizes certain information about our credit concentration for the year ended December 31, 2015, excluding our share of NOI in unconsolidated entities (dollars in thousands):
Number of
Total
Percent of
Concentration by relationship:(1)
Properties
NOI
NOI(2)
Genesis Healthcare
$
371,170
17%
Sunrise Senior Living(3)
299,697
13%
Brookdale Senior Living
166,792
7%
Revera
109,778
5%
Benchmark Senior Living
98,887
4%
Remaining portfolio
1,191,245
54%
Totals
1,426
$
2,237,569
100%
(1) Genesis Healthcare is in our triple-net segment. Sunrise Senior Living and Revera are in our seniors housing operating segment. Brookdale Senior Living and Benchmark Senior Living are in both our triple-net and seniors housing operating segments.
(2) Investments with our top five relationships comprised 49% of NOI in 2014.
(3) For the year ended December 31, 2015, we recognized $948,347,000 of revenue from Sunrise Senior Living.
9. Borrowings Under Credit Facilities and Related Items
At December 31, 2015, we had a primary unsecured credit facility with a consortium of 28 banks that includes a $2,500,000,000 unsecured revolving credit facility, a $500,000,000 unsecured term credit facility and a $250,000,000 Canadian-denominated unsecured term credit facility. We have an option, through an accordion feature, to upsize the unsecured revolving credit facility and the $500,000,000 unsecured term credit facility by up to an additional $1,000,000,000 and the $250,000,000 Canadian-denominated unsecured term credit facility by up to an additional $250,000,000. The primary unsecured credit facility also allows us to borrow up to $500,000,000 in alternate currencies (none outstanding at December 31, 2015). Borrowings under the unsecured revolving credit facility are subject to interest payable at the applicable margin over LIBOR interest rate (1.347% at December 31, 2015). The applicable margin is based on certain of our debt ratings and was 0.925% at December 31, 2015. In addition, we pay a facility fee quarterly to each bank based on the bank’s commitment amount. The facility fee depends on certain of our debt ratings and was 0.15% at December 31, 2015. The primary unsecured credit facility is scheduled to expire October 31, 2018 and can be extended for an additional year at our option.
The following information relates to aggregate borrowings under the primary unsecured revolving credit facility for the periods presented (dollars in thousands):
Year Ended December 31,
Balance outstanding at year end(1)
$
835,000
$
-
$
130,000
Maximum amount outstanding at any month end
$
835,000
$
637,000
$
1,019,050
Average amount outstanding (total of daily
principal balances divided by days in period)
$
452,644
$
207,452
$
488,842
Weighted-average interest rate (actual interest
expense divided by average borrowings outstanding)
1.17%
1.50%
1.45%
(1) As of December 31, 2015, letters of credit in the aggregate amount of $54,925,000 have been issued which reduce the available borrowing capacity on the primary unsecured credit facility.
10. Senior Unsecured Notes and Secured Debt
We may repurchase, redeem or refinance convertible and non-convertible senior unsecured notes from time to time, taking advantage of favorable market conditions when available. We may purchase senior notes for cash through open market purchases, privately negotiated transactions, a tender offer or, in some cases, through the early redemption of such securities pursuant to their terms. The non-convertible senior unsecured notes are redeemable at our option, at any time in whole or from time to time in part, at a redemption price equal to the sum of (1) the principal amount of the notes (or portion of such notes) being redeemed plus accrued and unpaid interest thereon up to the redemption date and (2) any “make-whole” amount due under the terms of the notes in connection with early redemptions. Redemptions and repurchases of debt, if any, will depend on prevailing market conditions, our liquidity requirements, contractual restrictions and other factors. At December 31, 2015, the annual principal payments due on these
WELLTOWER INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
debt obligations were as follows (in thousands):
Senior
Secured
Unsecured Notes(1,2)
Debt (1,3)
Totals
$
400,000
$
547,325
$
947,325
450,000
476,661
926,661
450,000
650,763
1,100,763
2019(4,5)
1,280,649
380,588
1,661,237
2020(6)
666,779
173,833
840,612
Thereafter(7,8,9)
5,398,330
1,249,037
6,647,367
Totals
$
8,645,758
$
3,478,207
$
12,123,965
(1) Amounts represent principal amounts due and do not include unamortized premiums/discounts, debt issuance costs, or other fair value adjustments as reflected on the consolidated balance sheet.
(2) Annual interest rates range from 1.4% to 6.5%.
(3) Annual interest rates range from 1.0% to 7.98%. Carrying value of the properties securing the debt totaled $6,285,511,000 at December 31, 2015.
(4) On July 25, 2014, we refinanced the funding on a $250,000,000 Canadian-denominated unsecured term credit facility (approximately $180,649,000 based on the Canadian/U.S. Dollar exchange rate on December 31, 2015). The loan matures on October 31, 2018 (with an option to extend for an additional year at our discretion) and bears interest at the Canadian Dealer Offered Rate plus 97.5 basis points (1.8% at December 31, 2015).
(5) On July 25, 2014, we refinanced the funding on a $500,000,000 unsecured term credit facility. The loan matures on October 31, 2018 (with an option to extend for one additional year at our discretion) and bears interest at LIBOR plus 97.5 basis points (1.4% at December 31, 2015).
(6) In November 2015, one of our wholly-owned subsidiaries issued and we guaranteed $300,000,000 of Canadian-denominated 3.35% senior unsecured notes due 2020 (approximately $216,779,000 based on the Canadian/U.S. Dollar exchange rate on December 31, 2015).
(7) On November 20, 2013, we completed funding on £550,000,000 (approximately $811,030,000 based on the Sterling/U.S. Dollar exchange rate on December 31, 2015) of 4.8% senior unsecured notes due 2028.
(8) On November 25, 2014, we completed funding on £500,000,000 (approximately $737,300,000 based on the Sterling/U.S. Dollar exchange rate on December 31, 2015) of 4.5% senior unsecured notes due 2034.
(9) In May 2015, we issued $750,000,000 of 4.0% senior unsecured notes due 2025. In October 2015, we issued an additional $500,000,000 of these notes under a re-opening of the offer.
The following is a summary of our senior unsecured note principal activity during the periods presented (dollars in thousands):
Year Ended
December 31, 2015
December 31, 2014
December 31, 2013
Weighted Avg.
Weighted Avg.
Weighted Avg.
Amount
Interest Rate
Amount
Interest Rate
Amount
Interest Rate
Beginning balance
$
7,817,154
4.385%
$
7,421,707
4.395%
$
5,894,403
4.675%
Debt issued
1,475,540
3.901%
838,804
4.572%
2,036,930
3.824%
Debt assumed
24,621
6.000%
-
0.000%
-
0.000%
Debt extinguished
(300,000)
6.200%
(298,567)
5.855%
(300,000)
6.000%
Debt redeemed
(240,249)
3.303%
(59,143)
3.000%
(219,295)
3.000%
Foreign currency
(131,308)
3.966%
(85,647)
4.222%
9,669
3.993%
Ending balance
$
8,645,758
4.237%
$
7,817,154
4.385%
$
7,421,707
4.395%
During the twelve months ended December 31, 2010, we issued $494,403,000 of 3.00% senior unsecured convertible notes due December 2029. The notes are convertible, in certain circumstances, into cash and, if applicable, shares of common stock at an initial conversion rate of 19.5064 shares per $1,000 principal amount of notes, which represents an initial conversion price of $51.27 per share. In general, upon conversion, the holder of each note would receive, in respect of the conversion value of such note, cash up to the principal amount of such note and common stock for the note’s conversion value in excess of such principal amount. In addition, on each of December 1, 2019 and December 1, 2024, holders may require us to purchase all or a portion of their notes at a purchase price in cash equal to 100% of the principal amount of the notes to be purchased, plus any accrued and unpaid interest. The notes are bifurcated into a debt component and an equity component since they may be settled in cash upon conversion. The value of the debt component is based upon the estimated fair value of a similar debt instrument without the conversion feature at the time of issuance. The difference between the contractual principal on the debt and the value allocated to the debt of $29,925,000 was recorded as an equity component and represents the conversion feature of the instrument. The excess of the contractual principal amount of the debt over its estimated fair value is amortized to interest expense using the effective interest method over the period used to estimate the fair value. During the year ended December 31, 2015, we received notice of conversion from holders of $215,965,000 of the senior unsecured convertible notes, representing the remaining balance. These notes were converted into 366,211 shares of common stock and we recognized a loss on extinguishment of $5,881,000, which is reflected on the consolidated statement of comprehensive income.
WELLTOWER INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
The following is a summary of our secured debt principal activity for the periods presented (dollars in thousands):
Year Ended
December 31, 2015
December 31, 2014
December 31, 2013
Weighted Avg.
Weighted Avg.
Weighted Avg.
Amount
Interest Rate
Amount
Interest Rate
Amount
Interest Rate
Beginning balance
$
2,941,765
4.940%
$
3,010,711
5.095%
$
2,311,586
5.140%
Debt issued
228,685
2.776%
109,503
3.374%
89,208
4.982%
Debt assumed
1,007,482
3.334%
204,949
4.750%
1,290,858
4.159%
Debt extinguished
(506,326)
4.506%
(279,559)
4.824%
(614,375)
3.730%
Principal payments
(67,064)
4.801%
(62,280)
4.930%
(56,205)
5.248%
Foreign currency
(126,335)
3.834%
(41,559)
3.811%
(10,361)
4.013%
Ending balance
$
3,478,207
4.440%
$
2,941,765
4.940%
$
3,010,711
5.095%
Our debt agreements contain various covenants, restrictions and events of default. Certain agreements require us to maintain certain financial ratios and minimum net worth and impose certain limits on our ability to incur indebtedness, create liens and make investments or acquisitions. As of December 31, 2015, we were in compliance with all of the covenants under our debt agreements.
11. Derivative Instruments
We are exposed to various market risks, including the potential loss arising from adverse changes in interest rates. We may elect to use financial derivative instruments to hedge interest rate exposure. These decisions are principally based on our policy to manage the general trend in interest rates at the applicable dates and our perception of the future volatility of interest rates. In addition, non-U.S. investments expose us to the potential losses associated with adverse changes in foreign currency to U.S. Dollar exchange rates. We have elected to manage these risks through the use of forward exchange contracts and issuing debt in the foreign currency.
Interest Rate Swap Contracts and Foreign Currency Forward Contracts Designated as Cash Flow Hedges
For instruments that are designated and qualify as a cash flow hedge, the effective portion of the gain or loss on the derivative is reported as a component of other comprehensive income (“OCI”), and reclassified into earnings in the same period, or periods, during which the hedged transaction affects earnings. Gains and losses on the derivative representing either hedge ineffectiveness or hedge components excluded from the assessment of effectiveness are recognized in earnings. Approximately $2,942,000 of gains, which are included in accumulated other comprehensive income (“AOCI”), are expected to be reclassified into earnings in the next 12 months.
Foreign Currency Hedges
For instruments that are designated and qualify as net investment hedges, the variability in the foreign currency to U.S. dollar of the instrument is recorded as a cumulative translation adjustment component of OCI. During the year ended December 31, 2015, we settled certain net investment hedges generating cash proceeds of $106,360,000. The balance of the cumulative translation adjustment will be reclassified to earnings when the hedged investment is sold or substantially liquidated.
The following presents the notional amount of derivatives and other financial instruments as of the dates indicated (in thousands):
WELLTOWER INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
December 31, 2015
December 31, 2014
Derivatives designated as net investment hedges:
Denominated in Canadian Dollars
$
1,175,000
$
900,000
Denominated in Pounds Sterling
£
550,000
£
350,000
Financial instruments designated as net investment hedges:
Denominated in Canadian Dollars
$
250,000
$
250,000
Denominated in Pounds Sterling
£
1,050,000
£
1,050,000
Derivatives designated as cash flow hedges
Denominated in U.S. Dollars
$
57,000
$
57,000
Denominated in Canadian Dollars
$
72,000
$
58,000
Denominated in Pounds Sterling
£
60,000
£
40,000
Derivative instruments not designated:
Denominated in Canadian Dollars
$
47,000
$
12,000
The following presents the impact of derivative instruments on the Consolidated Statements of Comprehensive Income for the periods presented (in thousands):
Year Ended
Location
December 31, 2015
December 31, 2014
December 31, 2013
Gain (loss) on forward exchange contracts recognized in income
Gain (loss) on derivatives, net
$
-
$
1,495
$
(4,470)
Gain (loss) on forward exchange contracts recognized in income
Interest expense
14,474
-
-
Loss (gain) on option exercise(1)
Gain (loss) on derivatives, net
(58,427)
-
-
Gain (loss) on forward exchange contracts and term loans designated as net investment hedge recognized in OCI
OCI
298,116
103,140
(28,244)
(1) In April 2011, we completed the acquisition of substantially all of the real estate assets of privately-owned Genesis Healthcare Corporation. In conjunction with this transaction, we received the option to acquire an ownership interest in Genesis Healthcare. In February 2015, Genesis Healthcare closed on a transaction to merge with Skilled Healthcare Group to become a publicly traded company which required us to record the value of the derivative asset due to the net settlement feature.
12. Commitments and Contingencies
At December 31, 2015, we had nine outstanding letter of credit obligations totaling $96,096,000 and expiring between 2016 and 2018. At December 31, 2015, we had outstanding construction in process of $258,968,000 for leased properties and were committed to providing additional funds of approximately $525,588,000 to complete construction. At December 31, 2015, we had contingent purchase obligations totaling $24,088,000. These contingent purchase obligations relate to unfunded capital improvement obligations and contingent obligations on acquisitions. Rents due from the tenant are increased to reflect the additional investment in the property.
We evaluate our leases for operating versus capital lease treatment in accordance with ASC Topic 840 “Leases.” A lease is classified as a capital lease if it provides for transfer of ownership of the leased asset at the end of the lease term, contains a bargain purchase option, has a lease term greater than 75% of the economic life of the leased asset, or if the net present value of the future minimum lease payments are in excess of 90% of the fair value of the leased asset. Certain leases contain bargain purchase options and have been classified as capital leases. At December 31, 2015, we had operating lease obligations of $990,027,000 relating to
WELLTOWER INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
certain ground leases and Company office space. Regarding the ground leases, we have sublease agreements with certain of our operators that require the operators to reimburse us for our monthly operating lease obligations. At December 31, 2015, aggregate future minimum rentals to be received under these noncancelable subleases totaled $26,445,000.
At December 31, 2015, future minimum lease payments due under operating and capital leases are as follows (in thousands):
Operating Leases
Capital Leases(1)
$
15,543
$
4,732
15,624
4,732
15,691
4,679
15,665
4,333
14,928
4,173
Thereafter
912,576
75,920
Totals
$
990,027
$
98,569
(1) Amounts above represent principal and interest obligations under capital lease arrangements. Related assets with a gross value of $167,324,000 and accumulated depreciation of $20,555,000 are recorded in real property.
13. Stockholders’ Equity
The following is a summary of our stockholder’s equity capital accounts as of the dates indicated:
December 31, 2015
December 31, 2014
Preferred Stock, $1.00 par value:
Authorized shares
50,000,000
50,000,000
Issued shares
25,875,000
25,875,000
Outstanding shares
25,875,000
25,875,000
Common Stock, $1.00 par value:
Authorized shares
700,000,000
700,000,000
Issued shares
355,594,373
329,487,615
Outstanding shares
354,777,670
328,790,066
Preferred Stock. The following is a summary of our preferred stock activity during the periods presented:
Year Ended
December 31, 2015
December 31, 2014
December 31, 2013
Weighted Avg.
Weighted Avg.
Weighted Avg.
Shares
Dividend Rate
Shares
Dividend Rate
Shares
Dividend Rate
Beginning balance
25,875,000
6.500%
26,108,236
6.496%
26,224,854
6.493%
Shares converted
-
0.000%
(233,236)
6.000%
(116,618)
6.000%
Ending balance
25,875,000
6.500%
25,875,000
6.500%
26,108,236
6.496%
During the three months ended December 31, 2010, we issued 349,854 shares of 6.00% Series H Cumulative Convertible and Redeemable Preferred Stock in connection with a business combination. During the years ended December 31, 2013 and 2014, all shares were converted into common stock, leaving zero shares outstanding.
During the three months ended March 31, 2011, we issued 14,375,000 of 6.50% Series I Cumulative Convertible Perpetual Preferred Stock. These shares have a liquidation value of $50.00 per share. Dividends are payable quarterly in arrears. The preferred stock is not redeemable by us. The preferred shares are convertible, at the holder’s option, into 0.8460 shares of common stock (equal to an initial conversion price of approximately $59.10).
During the three months ended March 31, 2012, we issued 11,500,000 of 6.50% Series J Cumulative Redeemable Preferred Stock. Dividends are payable quarterly in arrears. The preferred stock, which has no stated maturity, may be redeemed by us at a redemption price of $25.00 per share, plus accrued and unpaid dividends on such shares to the redemption date, on or after March 7, 2017.
WELLTOWER INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Common Stock. The following is a summary of our common stock issuances during the periods indicated (dollars in thousands, except per share amounts):
Shares Issued
Average Price
Gross Proceeds
Net Proceeds
May 2013 public issuance
23,000,000
$
73.50
$
1,690,500
$
1,630,281
2013 Dividend reinvestment plan issuances
3,429,928
62.78
215,346
215,346
2013 Option exercises
213,724
42.16
9,010
9,010
2013 Senior note conversions
988,007
-
-
2013 Preferred stock conversions
116,618
-
-
2013 Equity issued in acquisition of noncontrolling interest
1,108,917
-
-
2013 Totals
28,857,194
$
1,914,856
$
1,854,637
June 2014 public issuance
16,100,000
$
62.35
$
1,003,835
$
968,517
September 2014 public issuance
17,825,000
63.75
1,136,344
1,095,465
2014 Dividend reinvestment plan issuances
4,122,941
62.35
257,055
257,055
2014 Option exercises
498,549
45.79
22,831
22,831
2014 Preferred stock conversions
233,236
-
-
2014 Stock incentive plans, net of forfeitures
188,147
-
-
2014 Senior note conversions
258,542
-
-
2014 Totals
39,226,415
$
2,420,065
$
2,343,868
February 2015 public issuance
19,550,000
$
75.50
$
1,476,025
$
1,423,935
2015 Dividend reinvestment plan issuances
4,024,169
67.72
272,531
272,531
2015 Option exercises
249,054
47.35
11,793
11,793
2015 Equity Shelf Program issuances
696,070
69.23
48,186
47,463
2015 Stock incentive plans, net of forfeitures
137,837
-
-
2015 Senior note conversions
1,330,474
-
-
2015 Totals
25,987,604
$
1,808,535
$
1,755,722
During the twelve months ended December 31, 2013, we acquired the remaining 20% noncontrolling interest in an existing partnership for $91,000,000 which consisted of $23,247,000 of cash and 1,108,917 shares of common stock. In connection with the acquisition, we incurred $2,732,000 of transaction costs, which we have included as a reduction to additional paid in capital.
Dividends. The increase in dividends is primarily attributable to increases in our common shares outstanding as described above. Please refer to Notes 2 and 18 for information related to federal income tax of dividends. The following is a summary of our dividend payments (in thousands, except per share amounts):
Year Ended
December 31, 2015
December 31, 2014
December 31, 2013
Per Share
Amount
Per Share
Amount
Per Share
Amount
Common Stock
$
3.30000
$
1,144,727
$
3.18000
$
969,661
$
3.06000
$
839,939
Series H Preferred Stock
-
-
0.00794
2.85840
Series I Preferred Stock
3.25000
46,719
3.25000
46,719
3.25000
46,719
Series J Preferred Stock
1.62510
18,687
1.62510
18,688
1.62510
18,687
Totals
$
1,210,133
$
1,035,069
$
906,275
Accumulated Other Comprehensive Income. The following is a summary of accumulated other comprehensive income/(loss) for the periods presented (in thousands):
WELLTOWER INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Unrecognized gains (losses) related to:
Foreign Currency Translation
Equity Investments
Actuarial losses
Cash Flow Hedges
Total
Balance at December 31, 2014
$
(74,770)
$
-
$
(1,589)
$
(650)
$
(77,009)
Other comprehensive income before reclassification adjustments
(10,714)
-
(2,626)
(13,094)
Reclassification amount to net income
-
-
-
1,860 (1)
1,860
Net current-period other comprehensive income
(10,714)
-
(766)
(11,234)
Balance at December 31, 2015
$
(85,484)
$
-
$
(1,343)
$
(1,416)
$
(88,243)
Balance at December 31, 2013
$
(17,631)
$
(389)
$
(1,452)
$
(5,059)
$
(24,531)
Other comprehensive income before reclassification adjustments
(56,611)
(137)
2,610
(53,749)
Reclassification amount to net income
(528)
-
-
1,799 (1)
1,271
Net current-period other comprehensive income
(57,139)
(137)
4,409
(52,478)
Balance at December 31, 2014
$
(74,770)
$
-
$
(1,589)
$
(650)
$
(77,009)
(1) Please see Note 11 for additional information.
Other Equity. Other equity consists of accumulated option compensation expense, which represents the amount of amortized compensation costs related to stock options awarded to employees and directors.
14. Stock Incentive Plans
Our Amended and Restated 2005 Long-Term Incentive Plan (“2005 Plan”) authorizes up to 6,200,000 shares of common stock to be issued at the discretion of the Compensation Committee of the Board of Directors. Our non-employee directors, officers and key employees are eligible to participate in the 2005 Plan. The 2005 Plan allows for the issuance of, among other things, stock options, restricted stock, deferred stock units and dividend equivalent rights. Vesting periods for options, deferred stock units and restricted shares generally range from three to five years. Options expire ten years from the date of grant.
Under our long-term incentive plan, certain restricted stock awards are performance based. We will grant a target number of restricted stock units, with the ultimate award determined by the total shareholder return and operating performance metrics, measured in each case over a measurement period of three years. One third of the award will vest immediately at the end of the three year performance period, one third will vest a year after the performance period, and the remaining one third will vest two years after the performance period. Compensation expense for these performance grants is measured based on the probability of achievement of certain performance goals and is recognized over both the performance period and vesting period. For the portion of the grant for which the award is determined by the operating performance metrics, the estimated compensation cost was based on the grant date closing price and management’s estimate of corporate achievement for the financial metrics. If the estimated number of performance based restricted stock to be earned changes, an adjustment will be recorded to recognize the accumulated difference between the revised and previous estimates. For the portion of the grant determined by the total shareholder return, management used a Monte Carlo model to assess the compensation cost. The expected term represents the period from the grant date to the end of the three-year performance period. The estimated compensation cost was derived using the following assumptions: risk free rates over the life of the plan ranging from 0.16% to 1.16%; estimated volatility figures ranging from 13.64% to 42.75% over the life of the plan using 50% historical volatility and 50% implied volatility; and dividend yield of 4.818%.
The following table summarizes compensation expense recognized for the periods presented (in thousands):
Year Ended December 31,
Stock options
$
$
$
1,113
Restricted stock
30,146
31,163
19,064
$
30,844
$
32,075
$
20,177
Stock Options
WELLTOWER INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
We have not granted stock options since the year ended December 31, 2012 but some remain outstanding. As of December 31, 2015, there was $300,000 of total unrecognized compensation expense related to unvested stock options that is expected to be recognized over a weighted-average period of one year. Stock options outstanding at December 31, 2015 have an aggregate intrinsic value of $8,476,000.
Restricted Stock
The fair value of the restricted stock is equal to the market price of the Company’s common stock on the date of grant and is amortized over the vesting periods. As of December 31, 2015, there was $24,894,000 of total unrecognized compensation expense related to unvested restricted stock that is expected to be recognized over a weighted-average period of three years. The following table summarizes information about non-vested restricted stock incentive awards as of and for the year ended December 31, 2015:
Restricted Stock
Number of
Weighted-Average
Shares
Grant Date
(000's)
Fair Value
Non-vested at December 31, 2014
$
56.92
Vested
(306)
61.09
Granted
66.93
Terminated
(59)
66.09
Non-vested at December 31, 2015
$
62.00
15. Earnings Per Share
The following table sets forth the computation of basic and diluted earnings per share (in thousands, except per share data):
Year Ended December 31,
Numerator for basic and diluted earnings
per share - net income attributable to
common stockholders
$
818,344
$
446,745
$
78,714
Denominator for basic earnings per
share: weighted-average shares
348,240
306,272
276,929
Effect of dilutive securities:
Employee stock options
Non-vested restricted shares
Redeemable shares
-
-
Convertible senior unsecured notes
1,149
Dilutive potential common shares
1,184
1,475
1,832
Denominator for diluted earnings per
share: adjusted-weighted average shares
349,424
307,747
278,761
Basic earnings per share
$
2.35
$
1.46
$
0.28
Diluted earnings per share
$
2.34
$
1.45
$
0.28
Stock options outstanding were anti-dilutive for the years ended December 31, 2015, 2014 and 2013. The Series H Cumulative Convertible and Redeemable Preferred Stock and the Series I Cumulative Convertible Perpetual Preferred Stock were excluded from the calculations as the effect of the conversions also were anti-dilutive.
16. Disclosure about Fair Value of Financial Instruments
The following methods and assumptions were used to estimate the fair value of each class of financial instruments for which it is practicable to estimate that value.
Mortgage Loans and Other Real Estate Loans Receivable - The fair value of mortgage loans and other real estate loans receivable is generally estimated by using level two and level three inputs such as discounting the estimated future cash flows using the current rates at which similar loans would be made to borrowers with similar credit ratings and for the same remaining maturities.
WELLTOWER INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Cash and Cash Equivalents - The carrying amount approximates fair value.
Available-for-sale Equity Investments - Available-for-sale equity investments are recorded at their fair value based on level one publicly available trading prices.
Borrowings Under Primary Unsecured Credit Facility - The carrying amount of the primary unsecured credit facility approximates fair value because the borrowings are interest rate adjustable.
Senior Unsecured Notes - The fair value of the senior unsecured notes payable was estimated based on level one publicly available trading prices.
Secured Debt - The fair value of fixed rate secured debt is estimated using level two inputs by discounting the estimated future cash flows using the current rates at which similar loans would be made with similar credit ratings and for the same remaining maturities. The carrying amount of variable rate secured debt approximates fair value because the borrowings are interest rate adjustable.
Interest Rate Swap Agreements - Interest rate swap agreements are recorded in other assets or other liabilities on the balance sheet at fair market value. Fair market value is estimated using level two inputs by utilizing pricing models that consider forward yield curves and discount rates.
Foreign Currency Forward Contracts - Foreign currency forward contracts are recorded in other assets or other liabilities on the balance sheet at fair market value. Fair market value is determined using level two inputs by estimating the future value of the currency pair based on existing exchange rates, comprised of current spot and traded forward points, and calculating a present value of the net amount using a discount factor based on observable traded interest rates.
Redeemable OP Unitholder Interests - The fair value of our redeemable operating partnership (“OP”) unitholder interests are recorded on the balance sheet at fair value using Level 2 inputs. The fair value is measured using the closing price of our common stock, as units may be redeemed at the election of the holder for cash or, at our option, one share of our common stock per unit, subject to adjustment in certain circumstances.
The carrying amounts and estimated fair values of our financial instruments are as follows (in thousands):
December 31, 2015
December 31, 2014
Carrying
Fair
Carrying
Fair
Amount
Value
Amount
Value
Financial Assets:
Mortgage loans receivable
$
635,492
$
663,501
$
188,651
$
194,935
Other real estate loans receivable
184,000
185,693
191,518
195,375
Available-for-sale equity investments
22,779
22,779
-
-
Cash and cash equivalents
360,908
360,908
473,726
473,726
Foreign currency forward contracts
129,520
129,520
57,087
57,087
Financial Liabilities:
Borrowings under unsecured lines of credit arrangements
$
835,000
$
835,000
$
-
$
-
Senior unsecured notes
8,548,055
9,020,529
7,729,405
8,613,702
Secured debt
3,509,142
3,678,564
2,963,186
3,053,067
Foreign currency forward contracts
-
-
1,495
1,495
Redeemable OP unitholder interests
$
112,029
$
112,029
$
46,722
$
46,722
U.S. GAAP provides authoritative guidance for measuring and disclosing fair value measurements of assets and liabilities. The guidance defines fair value as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. The guidance also establishes a fair value hierarchy which requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. The guidance describes three levels of inputs that may be used to measure fair value:
WELLTOWER INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Level 1 - Quoted prices in active markets for identical assets or liabilities.
Level 2 - Observable inputs other than Level 1 prices such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities. Please see Note 2 for additional information.
Level 3 - Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities.
Items Measured at Fair Value on a Recurring Basis
The market approach is utilized to measure fair value for our financial assets and liabilities reported at fair value on a recurring basis. The market approach uses prices and other relevant information generated by market transactions involving identical or comparable assets or liabilities.
Fair Value Measurements as of December 31, 2015
Total
Level
Level
Level
Available-for-sale equity investments(1)
$
22,779
$
22,779
$
-
$
-
Foreign currency forward contracts(2)
129,520
-
129,520
-
Redeemable OP unitholder interests
112,029
-
112,029
-
Totals
$
241,549
$
-
$
241,549
$
-
(1) Unrealized gain or losses on equity investments are recorded in accumulated other comprehensive income (loss) at each measurement date. During 2015, we recognized an other than temporary impairment charge of $35,648,000 on the Genesis Healthcare stock investment which was recorded through other expense. Also see Note 11 for details related to the gain on the derivative asset originally recognized.
(2) Please see Note 11 for additional information.
Items Measured at Fair Value on a Nonrecurring Basis
In addition to items that are measured at fair value on a recurring basis, we also have assets and liabilities in our balance sheet that are measured at fair value on a nonrecurring basis. As these assets and liabilities are not measured at fair value on a recurring basis, they are not included in the tables above. Assets, liabilities and noncontrolling interests that are measured at fair value on a nonrecurring basis include those acquired/assumed in business combinations (see Note 3) and asset impairments (see Note 5 for impairments of real property and Note 6 for impairments of loans receivable). We have determined that the fair value measurements included in each of these assets and liabilities rely primarily on Company-specific inputs and our assumptions about the use of the assets and settlement of liabilities, as observable inputs are not available. As such, we have determined that each of these fair value measurements generally reside within Level 3 of the fair value hierarchy. We estimate the fair value of real estate and related intangibles using the income approach and unobservable data such as net operating income and estimated capitalization and discount rates. We also consider local and national industry market data including comparable sales, and commonly engage an external real estate appraiser to assist us in our estimation of fair value. We estimate the fair value of assets held for sale based on current sales price expectations or, in the absence of such price expectations, Level 3 inputs described above. We estimate the fair value of secured debt assumed in business combinations using current interest rates at which similar borrowings could be obtained on the transaction date.
17. Segment Reporting
We invest in seniors housing and health care real estate. We evaluate our business and make resource allocations on our four operating segments: triple-net, seniors housing operating, outpatient medical and life science. During the year ended December 31, 2015, we changed the names of our seniors housing triple-net segment to triple-net and our medical facilities segment to outpatient medical.
Our triple-net properties include long-term/post-acute care facilities, hospitals, assisted living facilities, independent living/continuing care retirement communities, care homes (United Kingdom), independent support 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 Notes 3 and 18).
WELLTOWER INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Our outpatient medical properties include outpatient medical buildings and life science buildings which are aggregated into our outpatient medical reportable segment. Our outpatient medical buildings are typically leased to multiple tenants and generally require a certain level of property management. During the year ended December 31, 2015, we disposed of our life science investments.
We evaluate performance based upon 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 because 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). 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) during the years ended December 31, 2015, 2014 and 2013 is as follows (in thousands):
Year Ended December 31, 2015:
Triple-net
Seniors Housing Operating
Outpatient Medical
Non-segment / Corporate
Total
Rental income
$
1,119,322
$
-
$
479,626
$
-
$
1,598,948
Resident fees and services
-
2,158,031
-
-
2,158,031
Interest income
74,108
4,180
5,853
-
84,141
Other income
6,871
6,060
4,684
1,091
18,706
Total revenues
1,200,301
2,168,271
490,163
1,091
3,859,826
Property operating expenses
-
1,467,009
155,248
-
1,622,257
Net operating income from continuing operations
1,200,301
701,262
334,915
1,091
2,237,569
Reconciling items:
Interest expense
30,288
147,832
28,822
285,227
492,169
(Loss) gain on derivatives, net
(58,427)
-
-
-
(58,427)
Depreciation and amortization
294,484
351,733
180,023
-
826,240
General and administrative
-
-
-
147,416
147,416
Transaction costs
53,254
54,966
2,706
-
110,926
(Loss) gain on extinguishment of debt, net
10,095
(195)
-
24,777
34,677
Impairment of assets
2,220
-
-
-
2,220
Other expenses
35,648
-
-
10,583
46,231
Income (loss) from continuing operations before income taxes and income (loss) from unconsolidated entities
832,739
146,926
123,364
(466,912)
636,117
Income tax expense
(4,244)
(3,438)
(6,451)
(Loss) income from unconsolidated entities
8,260
(32,672)
2,908
-
(21,504)
Income (loss) from continuing operations
836,755
115,240
126,517
(470,350)
608,162
Gain (loss) on real estate dispositions, net
86,261
-
194,126
-
280,387
Net income (loss)
$
923,016
$
115,240
$
320,643
$
(470,350)
$
888,549
Total assets
$
12,692,054
$
11,519,902
$
4,727,227
$
84,662
$
29,023,845
WELLTOWER INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Year Ended December 31, 2014:
Triple-net
Seniors Housing Operating
Outpatient Medical
Non-segment / Corporate
Total
Rental income
$
992,638
$
-
$
413,129
$
-
$
1,405,767
Resident fees and services
-
1,892,237
-
-
1,892,237
Interest income
32,255
2,119
3,293
-
37,667
Other income
2,973
3,215
1,010
7,875
Total revenues
1,027,866
1,897,571
417,432
3,343,546
Property operating expenses
1,266,308
136,318
-
1,403,358
Net operating income from continuing operations
1,027,134
631,263
281,114
1,940,188
Reconciling items:
Interest expense
38,460
113,099
32,904
296,576
481,039
(Loss) gain on derivatives, net
(1,770)
-
-
(1,495)
Depreciation and amortization
273,296
418,199
152,635
-
844,130
General and administrative
-
-
-
142,943
142,943
Transaction costs
45,146
16,880
7,512
-
69,538
(Loss) gain on extinguishment of debt, net
8,672
9,558
Other expenses
8,825
1,437
-
-
10,262
Income (loss) from continuing operations before income taxes and income (loss) from unconsolidated entities
663,079
80,990
87,658
(447,514)
384,213
Income tax expense
6,141
(3,047)
(1,827)
-
1,267
(Loss) income from unconsolidated entities
5,423
(38,204)
5,355
-
(27,426)
Income (loss) from continuing operations
674,643
39,739
91,186
(447,514)
358,054
Income (loss) from discontinued operations
7,135
-
-
-
7,135
Gain (loss) on real estate dispositions, net
146,205
-
147,111
Net income (loss)
$
827,983
$
39,739
$
92,092
$
(447,514)
$
512,300
Total assets
$
10,918,946
$
9,519,833
$
4,464,857
$
59,287
$
24,962,923
WELLTOWER INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Year Ended December 31, 2013
Triple-net
Seniors Housing Operating
Outpatient Medical
Non-segment / Corporate
Total
Rental income
$
866,138
$
-
$
361,451
$
-
$
1,227,589
Resident fees and services
-
1,616,290
-
-
1,616,290
Interest income
28,214
3,692
-
32,663
Other income
1,504
1,911
4,066
Total revenues
895,856
1,617,402
367,054
2,880,608
Property operating expenses
1,235
1,089,239
116,339
-
1,206,813
Net operating income from continuing operations
894,621
528,163
250,715
1,673,795
Reconciling items:
Interest expense
23,322
92,148
36,823
306,067
458,360
Loss (gain) on derivatives, net
4,877
(407)
-
-
4,470
Depreciation and amortization
249,913
478,007
137,880
-
865,800
General and administrative
-
-
-
108,318
108,318
Transaction costs
24,426
107,066
1,909
-
133,401
Loss (gain) on extinguishment of debt, net
(3,372)
-
2,423
(909)
Provision for loan losses
2,110
-
-
-
2,110
Income (loss) from continuing operations before income taxes and income (loss) from unconsolidated entities
589,933
(145,279)
74,103
(416,512)
102,245
Income tax expense
(1,817)
(5,337)
(270)
(67)
(7,491)
(Loss) income from unconsolidated entities
5,035
(22,695)
9,473
-
(8,187)
Income from continuing operations
593,151
(173,311)
83,306
(416,579)
86,567
Income (loss) from discontinued operations
57,742
-
(6,029)
-
51,713
Net income (loss)
$
650,893
$
(173,311)
$
77,277
$
(416,579)
$
138,280
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):
Year Ended
December 31, 2015
December 31, 2014
December 30, 2013
Revenues:
Amount
%
Amount
%
Amount
%
United States
$
3,133,327
81.2%
$
2,801,474
83.8%
$
2,489,196
86.4%
International
726,499
18.8%
542,072
16.2%
391,412
13.6%
Total
$
3,859,826
100.0%
$
3,343,546
100.0%
$
2,880,608
100.0%
As of
December 31, 2015
December 31, 2014
Assets:
Amount
%
Amount
%
United States
$
25,995,793
89.6%
$
19,855,076
79.5%
International
3,028,052
10.4%
5,107,847
20.5%
Total
$
29,023,845
100.0%
$
24,962,923
100.0%
WELLTOWER INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
18. Income Taxes and Distributions
We elected to be taxed as a REIT commencing with our first taxable year. To qualify as a REIT for federal income tax purposes, at least 90% of taxable income (excluding 100% of net capital gains) must be distributed to stockholders. REITs that do not distribute a certain amount of current year taxable income in the current year are also subject to a 4% federal excise tax. The main differences between net income for federal income tax purposes and financial statement purposes are the recognition of straight-line rent for reporting purposes, basis differences in acquisitions, recording of impairments, differing useful lives and depreciation and amortization methods for real property and the provision for loan losses for reporting purposes versus bad debt expense for tax purposes.
Cash distributions paid to common stockholders, for federal income tax purposes, are as follows for the periods presented:
Year Ended December 31,
Per Share:
Ordinary income
$
1.9134
$
1.7861
$
1.4928
Qualified dividend
0.0529
-
-
Return of capital
0.0503
0.8368
1.4176
Long-term capital gains
0.9352
0.1638
0.0448
Unrecaptured section 1250 gains
0.3482
0.3933
0.1048
Totals
$
3.3000
$
3.1800
$
3.0600
Our consolidated provision for income taxes is as follows for the periods presented (dollars in thousands):
Year Ended December 31,
Current
$
10,177
$
2,672
$
12,389
Deferred
(3,726)
(3,939)
(4,898)
Totals
$
6,451
$
(1,267)
$
7,491
REITs generally are not subject to U.S. federal income taxes on that portion of REIT taxable income or capital gain that is distributed to stockholders. For the tax year ended December 31, 2015, as a result of acquisitions located in Canada and the United Kingdom, we were subject to foreign income taxes under the respective tax laws of these jurisdictions.
The provision for income taxes for the year ended December 31, 2015 primarily relates to state taxes, foreign taxes, and taxes based on income generated by entities that are structured as taxable REIT subsidiaries. During 2014, we established certain new wholly-owned direct and indirect subsidiaries in Luxembourg and Jersey and transferred interests in certain foreign investments into this new holding company structure. The new structure includes a property holding company that is tax resident in the United Kingdom. No material adverse current tax consequences in Luxembourg, Jersey or the United Kingdom resulted from the creation of this new holding company structure and all of the subsidiary entities in the structure are treated as disregarded entities of the Company for U.S. federal income tax purposes. The Company will reflect current and deferred tax liabilities for any such withholding taxes incurred as a result of this holding company structure in its consolidated financial statements.
For the tax years ended December 31, 2015, 2014 and 2013, the foreign tax provision/(benefit) amount included in the consolidated provision for income taxes was $7,385,000, ($6,069,000) and ($484,000), respectively.
A reconciliation of income tax expense, which is computed by applying the federal corporate tax rate for the years ended December 31, 2015, 2014 and 2013, to the income tax provision/(benefit) is as follows for the periods presented (dollars in thousands):
WELLTOWER INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Year Ended December 31,
Tax at statutory rate on earnings from continuing operations before unconsolidated entities, noncontrolling interests and income taxes
$
313,250
$
178,862
$
51,020
Increase / (decrease) in valuation allowance(1)
13,759
9,133
18,444
Tax at statutory rate on earnings not subject to federal income taxes
(319,832)
(189,070)
(88,762)
Foreign permanent depreciation
7,500
4,383
22,313
Other differences
(8,226)
(4,575)
4,476
Totals
$
6,451
$
(1,267)
$
7,491
(1) Excluding purchase price accounting.
Each TRS and foreign entity subject to income taxes is a tax paying component for purposes of classifying deferred tax assets and liabilities. The tax effects of taxable and deductible temporary differences, as well as tax attributes, are summarized as follows for the periods presented (dollars in thousands):
Year Ended December 31,
Investments and property, primarily differences in investment basis, depreciation and amortization, the basis of land assets and the treatment of interests and certain costs
$
(30,564)
$
(1,020)
$
(34,236)
Operating loss and interest deduction carryforwards
75,455
47,528
67,215
Expense accruals and other
6,259
26,191
19,309
Valuation allowance
(98,966)
(85,207)
(71,955)
Totals
$
(47,816)
$
(12,508)
$
(19,667)
We assess the available positive and negative evidence to estimate if sufficient future taxable income will be generated to use the existing deferred tax assets. As required under the provisions of ASC 740, we apply the concepts on an entity-by-entity, jurisdiction-by-jurisdiction basis. With respect to the analysis of certain entities in multiple jurisdictions, a significant piece of objective negative evidence evaluated was the cumulative loss incurred over the three-year period ended December 31, 2015. Such objective evidence limits the ability to consider other subjective evidence such as our projections for future growth.
On the basis of the evaluations performed as required by the codification, valuation allowances totaling $98,966,000 were recorded on U.S. taxable REIT subsidiaries as well as entities in other jurisdictions to limit the deferred tax assets to the amount that we believe is more likely that not realizable. However, the amount of the deferred tax asset considered realizable could be adjusted if (i) estimates of future taxable income during the carryforward period are reduced or increased or (ii) objective negative evidence in the form of cumulative losses is no longer present (and additional weight may be given to subjective evidence such as our projections for growth). The valuation allowance rollforward is summarized as follows for the periods presented (dollars in thousands):
Year Ended December 31,
Beginning balance
$
85,207
$
71,955
$
12,199
Additions:
Purchase price accounting
-
4,119
41,312
Expense
13,759
9,133
18,444
Ending balance
$
98,966
$
85,207
$
71,955
As a result of certain acquisitions, we are subject to corporate level taxes for any related asset dispositions that may occur during the five-year period immediately after such assets were owned by a C corporation (“built-in gains tax”). The amount of income potentially subject to this special corporate level tax is generally equal to the lesser of (a) the excess of the fair value of the asset over its adjusted tax basis as of the date it became a REIT asset, or (b) the actual amount of gain. Some but not all gains recognized during this period of time could be offset by available net operating losses and capital loss carryforwards. During the year ended December 31, 2015, we acquired certain additional assets with built-in gains as of the date of acquisition that could be subject to the built-in
WELLTOWER INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
gains tax if disposed of prior to the expiration of the applicable five-year period. We have not recorded a deferred tax liability as a result of the potential built-in gains tax based on our intentions with respect to such properties and available tax planning strategies.
Under the provisions of the REIT Investment Diversification and Empowerment Act of 2007 (“RIDEA”), for taxable years beginning after July 30, 2008, the REIT may lease “qualified health care properties” on an arm’s-length basis to a TRS if the property is operated on behalf of such subsidiary by a person who qualifies as an “eligible independent contractor.” Generally, the rent received from the TRS will meet the related party rent exception and will be treated as “rents from real property.” A “qualified health care property” includes real property and any personal property that is, or is necessary or incidental to the use of, a hospital, nursing facility, assisted living facility, congregate care facility, qualified continuing care facility, or other licensed facility which extends medical or nursing or ancillary services to patients. We have entered into various joint ventures that were structured under RIDEA. Resident level rents and related operating expenses for these facilities are reported in the consolidated financial statements and are subject to federal and state income taxes as the operations of such facilities are included in a TRS. Certain net operating loss carryforwards could be utilized to offset taxable income in future years.
Given the applicable statute of limitations, we generally are subject to audit by the Internal Revenue Service (“IRS”) for the year ended December 31, 2012 and subsequent years. The statute of limitations may vary in the states in which we own properties or conduct business. We do not expect to be subject to audit by state taxing authorities for any year prior to the year ended December 31, 2009. We are also subject to audit by the Canada Revenue Agency and provincial authorities generally for periods subsequent to May 2012 related to entities acquired or formed in connection with acquisitions, and by HM Revenue & Customs for periods subsequent to August 2012 related to entities acquired or formed in connection with acquisitions.
At December 31, 2015, we had a net operating loss (“NOL”) carryforward related to the REIT of $443,197,000. Due to our uncertainty regarding the realization of certain deferred tax assets, we have not recorded a deferred tax asset related to NOLs generated by the REIT. These amounts can be used to offset future taxable income (and/or taxable income for prior years if an audit determines that tax is owed), if any. The REIT will be entitled to utilize NOLs and tax credit carryforwards only to the extent that REIT taxable income exceeds our deduction for dividends paid. The NOL carryforwards will expire through 2035.
At December 31, 2015, and 2014, we had a net operating loss carryforward related to Canadian entities of $78,680,000, and $32,085,000, respectively. These Canadian losses have a 20-year carryforward period. At December 31, 2015 and 2014, we had a net operating loss carryforward related to United Kingdom entities of $179,598,000 and $177,079,000, respectively. These United Kingdom losses do not have a finite carryforward period.
19. Retirement Arrangements
We have a Supplemental Executive Retirement Plan (“SERP”), a non-qualified defined benefit pension plan, which provides one former executive officer with supplemental deferred retirement benefits. The SERP provides an opportunity for the participant to receive retirement benefits that cannot be paid under our tax-qualified plans because of the restrictions imposed by ERISA and the Internal Revenue Code of 1986, as amended. Benefits are based on compensation and length of service and the SERP is unfunded. Benefit payments are expected to total $5,654,000 during the next five fiscal years. We use a December 31 measurement date for the SERP. The accrued liability on our balance sheet for the SERP was $5,474,000 at December 31, 2015 ($6,882,000 at December 31, 2014).
On April 13, 2014, George L. Chapman, formerly the Chairman, Chief Executive Officer and President of the Company, informed the Board of Directors that he wished to retire from the Company, effective immediately. As a result of Mr. Chapman’s retirement, general and administrative expenses for the year ended December 31, 2014 included charges of $19,688,000 related to: (i) the acceleration of $9,223,000 of deferred compensation for restricted stock; and (ii) consulting, retirement payments and other costs of $10,465,000.
WELLTOWER INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
20. Quarterly Results of Operations (Unaudited)
The following is a summary of our unaudited quarterly results of operations for the years ended December 31, 2015 and 2014 (in thousands, except per share data). The sum of individual quarterly amounts may not agree to the annual amounts included in the consolidated statements of income due to rounding.
Year Ended December 31, 2015
1st Quarter
2nd Quarter
3rd Quarter(1)
4th Quarter(2)
Revenues
$
894,177
$
957,169
$
978,997
$
1,029,484
Net income (loss) attributable to common stockholders
190,799
312,573
182,043
132,929
Net income (loss) attributable to common stockholders per share:
Basic
$
0.57
$
0.89
$
0.52
$
0.38
Diluted
0.56
0.89
0.52
0.37
Year Ended December 31, 2014
1st Quarter
2nd Quarter
3rd Quarter
4th Quarter
Revenues
$
801,807
$
826,446
$
847,523
$
867,770
Net income attributable to common stockholders
50,022
71,829
136,255
188,639
Net income attributable to common stockholders per share:
Basic
$
0.17
$
0.24
$
0.44
$
0.58
Diluted
0.17
0.24
0.44
0.57
(1) The decrease in net income and amounts per share are primarily attributable to gains on sales of real estate of $190,111,000 for the second quarter as compared to gains of $2,046,000 for the third quarter.
(2) The decrease in net income and amounts per share are primarily attributable to the other than temporary impairment charge of $35,648,000 recognized on the available-for-sale investment and increased transaction costs incurred due to fourth quarter acquisitions.

ITEM 9 - CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS
Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure
Not applicable.

ITEM 9A - CONTROLS AND PROCEDURES
Item 9A. Controls and Procedures
Disclosure Controls and Procedures
An evaluation was carried out under the supervision and with the participation of our management, including our Chief Executive Officer and Chief Financial Officer, of the effectiveness of the disclosure controls and procedures (as defined in Rule 13a-15(e) of the Securities Exchange Act of 1934, as amended) as of the end of the period covered by this report. Based on that evaluation, the Chief Executive Officer and Chief Financial Officer concluded that the disclosure controls and procedures were effective as of the end of the period covered by this report.
Management’s Report on Internal Control over Financial Reporting
Management is responsible for establishing and maintaining adequate internal control over financial reporting (as defined in Rule 13a-15(f) of the Securities Exchange Act of 1934, as amended). The Company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with U.S. generally accepted accounting principles. The Company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the Company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with U.S. generally accepted accounting principles, and that receipts and expenditures of the Company are being made only in accordance with authorizations of management and directors of the Company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the Company’s assets that could have a material effect on the financial statements. Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.
Management has assessed the effectiveness of the Company’s internal control over financial reporting as of December 31, 2015 based on the criteria established by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework) in a report entitled Internal Control - Integrated Framework.
The scope of management’s assessment as of December 31, 2015 did not include an assessment of the internal control over financial reporting for certain acquisitions because the business combinations occurred during the year ended December 31, 2015. The acquired businesses represent 4% of total assets at December 31, 2015 and less than 1% of revenues and net operating income for the year then ended. The scope of management’s assessment on internal control over financial reporting for the year ended December 31, 2016 will include the aforementioned acquired operations.
Based on this assessment, using the criteria above, management concluded that the Company’s system of internal control over financial reporting was effective as of December 31, 2015.
The independent registered public accounting firm of Ernst & Young LLP, as auditors of the Company’s consolidated financial statements, has issued an attestation report on the Company’s internal control over financial reporting.
Changes in Internal Control over Financial Reporting
No change in our internal control over financial reporting (as defined in Rule 13a-15(f) of the Securities Exchange Act of 1934, as amended) occurred during the fourth quarter of the one-year period covered by this report that materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.
Report of Independent Registered Public Accounting Firm on Internal Control over Financial Reporting
The Board of Directors and Shareholders of Welltower Inc.
We have audited Welltower Inc.’s internal control over financial reporting as of December 31, 2015, based on criteria established in Internal Control-Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (the COSO criteria, 2013 framework). Welltower Inc.’s management is responsible for maintaining effective internal control over financial reporting, and for its assessment of the effectiveness of internal control over financial reporting included in the accompanying Management’s Report on Internal Control over Financial Reporting. Our responsibility is to express an opinion on the Company’s internal control over financial reporting based on our audit.
We conducted our audit in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects. Our audit included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, testing and evaluating the design and operating effectiveness of internal control based on the assessed risk, and performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion.
A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of the company’s assets that could have a material effect on the financial statements.
Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.
As indicated in the accompanying Management’s Report on Internal Control over Financial Reporting, management’s assessment of and conclusion on the effectiveness of internal control over financial reporting did not include the internal controls of certain acquisitions, which are included in the 2015 consolidated financial statements of Welltower Inc. and aggregate to 4% of total assets at December 31, 2015 and less than 1% of revenues and net operating income for the year then ended. Our audit of the internal control over financial reporting of Welltower Inc. also did not include an evaluation of the internal control over financial reporting of the aforementioned acquisitions.
In our opinion, Welltower Inc. maintained, in all material respects, effective internal control over financial reporting as of December 31, 2015, based on the COSO criteria.
We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), the consolidated balance sheets of Welltower Inc. as of December 31, 2015 and 2014, and the related consolidated statements of comprehensive income, equity, and cash flows for each of the three years in the period ended December 31, 2015 of Welltower Inc. and our report dated February 18, 2016 expressed an unqualified opinion thereon.
/s/ Ernst & Young LLP
Toledo, Ohio
February 18, 2016

ITEM 9B - OTHER INFORMATION
Item 9B. Other Information
None.
PART III

ITEM 10 - DIRECTORS AND EXECUTIVE OFFICERS
Item 10. Directors, Executive Officers and Corporate Governance
The information required by this Item is incorporated herein by reference to the information under the headings “Election of Directors,” “Corporate Governance,” “Executive Officers,” and “Security Ownership of Directors and Management and Certain Beneficial Owners - Section 16(a) Beneficial Ownership Reporting Compliance” in our definitive proxy statement, which will be filed with the Securities and Exchange Commission (the “Commission”) prior to April 29, 2016.
We have adopted a Code of Business Conduct & Ethics that applies to our directors, officers and employees. The code is posted on the Internet at www.welltower.com/#investors/governance. Any amendment to, or waivers from, the code that relate to any officer or director of the Company will be promptly disclosed on the Internet at www.welltower.com.
In addition, the Board has adopted charters for the Audit, Compensation and Nominating/Corporate Governance Committees. These charters are posted on the Internet at www.welltower.com/#investors/governance.
The information on our website is not incorporated by reference in this Annual Report on Form 10-K, and our web address is included as an inactive textual reference only.

ITEM 11 - EXECUTIVE COMPENSATION
Item 11. Executive Compensation
The information required by this Item is incorporated herein by reference to the information under the headings “Executive Compensation” and “Director Compensation” in our definitive proxy statement, which will be filed with the Commission prior to April 29, 2016.

ITEM 12 - SECURITY OWNERSHIP
Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters
The information required by this Item is incorporated herein by reference to the information under the headings “Security Ownership of Directors and Management and Certain Beneficial Owners” and “Equity Compensation Plan Information” in our definitive proxy statement, which will be filed with the Commission prior to April 29, 2016.

ITEM 13 - CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Item 13. Certain Relationships and Related Transactions and Director Independence
The information required by this Item is incorporated herein by reference to the information under the headings “Corporate Governance - Independence and Meetings” and “Security Ownership of Directors and Management and Certain Beneficial Owners - Certain Relationships and Related Transactions” in our definitive proxy statement, which will be filed with the Commission prior to April 29, 2016.

ITEM 14 - PRINCIPAL ACCOUNTANT FEES AND SERVICES
Item 14. Principal Accounting Fees and Services
The information required by this Item is incorporated herein by reference to the information under the heading “Ratification of the Appointment of the Independent Registered Public Accounting Firm” in our definitive proxy statement, which will be filed with the Commission prior to April 29, 2016.
PART IV

ITEM 15 - EXHIBITS AND FINANCIAL STATEMENT SCHEDULES
Item 15. Exhibits and Financial Statement Schedules
(a) 1. Our Consolidated Financial Statements are included in Part II, Item 8:
Report of Independent Registered Public Accounting Firm
Consolidated Balance Sheets - December 31, 2015 and 2014
Consolidated Statements of Comprehensive Income - Years ended December 31, 2015, 2014 and 2013
Consolidated Statements of Equity - Years ended December 31, 2015, 2014 and 2013
Consolidated Statements of Cash Flows - Years ended December 31, 2015, 2014 and 2013
Notes to Consolidated Financial Statements
2. The following Financial Statement Schedules are included in Item 15(c):
III - Real Estate and Accumulated Depreciation
IV - Mortgage Loans on Real Estate
The financial statement schedule required by Item15(a) (Schedule II, Valuation and Qualifying Accounts) is included in Item 8 of this Annual Report on Form 10-K.
3. Exhibit Index:
The information required by this item is set forth on the Exhibit Index that follows the Financial Statement Schedules to this Annual Report on Form 10-K.
(b) Exhibits:
The exhibits listed on the Exhibit Index are either filed with this Form 10-K or incorporated by reference in accordance with Rule 12b-32 of the Securities Exchange Act of 1934.
(c) Financial Statement Schedules:
Financial statement schedules are included beginning on page 112.
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
Date: February 18, 2016
WELLTOWER INC.
By: /s/ T homas J. DeRosa
Thomas J. DeRosa,
Chief Executive Officer and Director
Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below on February 18, 2016 by the following persons on behalf of the Registrant and in the capacities indicated.
/s/ Jeffrey H. Donahue **
/s/ Sergio D. Rivera **
Jeffrey H. Donahue, Chairman of the Board
Sergio D. Rivera, Director
/s/ Kenneth J. Bacon **
/s/ R. Scott Trumbull **
Kenneth J. Bacon, Director
R. Scott Trumbull, Director
/s/ Fred S. Klipsch **
/s/ Thomas J. DeRosa **
Fred S. Klipsch, Director
Thomas J. DeRosa, Chief Executive Officer and Director
(Principal Executive Officer)
/s/ Geoffrey G. Meyers **
/s/ Scott A. Estes **
Geoffrey G. Meyers, Director
Scott A. Estes, Executive Vice President and Chief
Financial Officer (Principal Financial Officer)
/s/ Timothy J. Naughton **
/s/ Paul D. Nungester, Jr.**
Timothy J. Naughton, Director
Paul D. Nungester, Jr., Senior Vice President and
Controller (Principal Accounting Officer)
/s/ Sharon M. Oster **
**By: /s/ Thomas J. DeRosa
Sharon M. Oster, Director
Thomas J. DeRosa, Attorney-in-Fact
/s/ Judith C. Pelham **
Judith C. Pelham, Director
Welltower Inc.
Schedule III
Real Estate and Accumulated Depreciation
December 31, 2015
(Dollars in thousands)
Initial Cost to Company
Gross Amount at Which Carried at Close of Period
Description
Encumbrances
Land
Building & Improvements
Cost Capitalized Subsequent to Acquisition
Land
Building & Improvements
Accumulated Depreciation(1)
Year Acquired
Year Built
Address
Triple-net:
Abilene, TX
$
-
$
$
20,987
$
$
$
21,027
$
6565 Central Park Boulevard
Abilene, TX
-
8,187
8,987
1250 East N 10th Street
Aboite Twp, IN
-
1,770
19,930
1,601
1,770
21,531
2,918
611 W County Line Rd South
Agawam, MA
-
16,112
2,134
18,246
6,765
1200 Suffield St.
Agawam, MA
-
1,230
13,618
1,230
14,211
1,971
61 Cooper Street
Agawam, MA
-
15,304
15,596
2,084
55 Cooper Street
Agawam, MA
-
10,661
10,697
1,509
464 Main Street
Agawam, MA
-
10,562
10,607
1,496
65 Cooper Street
Akron, OH
-
8,219
8,710
2,608
721 Hickory St.
Akron, OH
-
7,535
7,764
2,072
209 Merriman Road
Albertville, AL
1,986
6,203
6,477
1,234
151 Woodham Dr.
Alexandria, IN
-
6,491
-
6,491
1912 South Park Avenue
Alliance, OH
-
7,723
7,830
2,223
1785 Freshley Ave.
Ames, IA
-
8,870
-
8,870
1,357
1325 Coconino Rd.
Anderson, SC
-
6,290
6,709
2,786
311 Simpson Rd.
Andover, MA
-
1,310
12,647
1,310
12,674
1,843
89 Morton Street
Annapolis, MD
-
1,010
24,825
1,010
24,976
3,221
35 Milkshake Lane
Ansted, WV
-
14,113
14,221
1,802
106 Tyree Street, P.O. Drawer 400
Apple Valley, CA
10,445
16,639
16,801
3,340
11825 Apple Valley Rd.
Asheboro, NC
-
5,032
5,197
1,774
514 Vision Dr.
Asheville, NC
-
3,489
-
3,489
1,617
4 Walden Ridge Dr.
Asheville, NC
-
1,955
2,306
308 Overlook Rd.
Aspen Hill, MD
-
-
9,008
1,180
-
10,188
1,384
3227 Bel Pre Road
Atchison, KS
-
5,610
-
5,610
-
1301 N 4th St,
Atlanta, GA
7,429
2,058
14,914
1,143
2,080
16,035
10,896
1460 S Johnson Ferry Rd.
Aurora, OH
-
1,760
14,148
1,760
14,254
2,090
505 S. Chillicothe Rd
Aurora, CO
-
2,600
5,906
7,915
2,600
13,821
4,638
14101 E. Evans Ave.
Aurora, CO
-
2,440
28,172
-
2,440
28,172
7,909
14211 E. Evans Ave.
Austin, TX
18,411
9,520
1,216
10,731
4,775
12429 Scofield Farms Dr.
Aventura, FL
-
4,540
33,986
4,540
34,424
3,073
2777 NE 183rd Street
Avon, IN
-
1,830
14,470
-
1,830
14,470
2,311
182 S Country RD. 550E
Avon, IN
-
19,444
-
19,444
10307 E. CR 100 N
Avon Lake, OH
-
10,421
5,822
16,243
1,725
345 Lear Rd.
Ayer, MA
-
-
22,074
-
22,077
2,862
400 Groton Road
Baldwin City, KS
-
4,810
-
4,810
-
321 Crimson Ave
Baltic, OH
-
8,709
8,898
2,482
130 Buena Vista St.
Baltimore, MD
-
1,350
14,884
1,350
15,204
2,059
115 East Melrose Avenue
Baltimore, MD
-
5,039
5,186
6000 Bellona Avenue
Bartlesville, OK
-
1,380
-
1,380
5420 S.E. Adams Blvd.
Beachwood, OH
-
1,260
23,478
-
1,260
23,478
8,952
3800 Park East Drive
Beattyville, KY
-
6,900
7,560
2,158
249 E. Main St.
Bedford, NH
-
2,250
28,831
2,250
28,836
3,718
25 Ridgewood Road
Bellingham, WA
8,429
1,500
19,861
1,507
20,175
3,900
4415 Columbine Dr.
Benbrook, TX
-
1,550
13,553
1,550
14,322
1,687
4242 Bryant Irvin Road
Bend, OR
-
1,210
9,181
-
1,210
9,181
1801 NE Lotus Drive
Bethel Park, PA
-
1,700
16,007
-
1,700
16,007
2,962
5785 Baptist Road
Beverly Hills, CA
9,404
6,000
13,385
-
6,000
13,385
220 N Clark Drive
Bexleyheath, UKI
-
4,483
12,917
-
4,483
12,917
35 West Street
Birmingham, UKG
-
1,969
17,754
-
1,969
17,754
Clinton Street, Winson Green
Birmingham, UKG
-
1,902
22,820
-
1,902
22,820
Braymoor Road, Tile Cross
Birmingham, UKG
-
1,747
10,824
-
1,747
10,824
Clinton Street, Winson Green
Birmingham, UKG
-
1,416
12,054
-
1,416
12,054
122 Tile Cross Road, Garretts Green
Bloomington, IN
-
17,423
-
17,423
363 S. Fieldstone Boulevard
Bluefield, VA
-
12,463
12,495
1,658
Westwood Medical Park
Boardman, OH
-
1,200
12,800
-
1,200
12,800
3,016
8049 South Ave.
Boca Raton, FL
-
1,440
31,048
1,440
31,941
2,802
1080 Northwest 15th Street
Boonville, IN
-
5,510
-
5,510
2,078
1325 N. Rockport Rd.
Bowling Green, KY
-
3,800
26,700
3,800
26,849
5,080
1300 Campbell Lane
Bradenton, FL
-
3,298
-
3,298
1,761
6101 Pointe W. Blvd.
Bradenton, FL
-
9,953
-
9,953
2800 60th Avenue West
Braintree, MA
-
7,157
1,290
8,447
8,236
1102 Washington St.
Braintree, UKH
-
-
15,893
-
-
15,893
Meadow Park Tortoiseshell Way
Brandon, MS
-
1,220
10,241
-
1,220
10,241
1,450
140 Castlewoods Blvd
Brecksville, OH
-
19,353
-
19,353
8757 Brecksville Road
Bremerton, WA
-
2,210
2,354
3231 Pine Road
Bremerton, WA
-
10,420
11,370
1,637
3201 Pine Road NE
Bremerton, WA
-
2,899
2,912
3210 Rickey Road
Brick, NJ
-
1,290
25,247
1,290
25,776
2,957
458 Jack Martin Blvd.
Brick, NJ
-
1,170
17,372
1,285
1,183
18,645
2,474
515 Jack Martin Blvd
Brick, NJ
-
17,125
5,312
22,436
2,328
1594 Route 88
Brick, NJ
-
3,160
8,496
-
3,160
8,496
475 Jack Martin Boulevard
Bridgewater, NJ
-
1,850
3,050
-
1,850
3,050
1,367
875 Route 202/206 North
Bridgewater, NJ
-
1,730
48,201
1,123
1,749
49,304
6,343
2005 Route 22 West
Bridgewater, NJ
-
1,800
31,810
1,800
32,281
3,668
680 US-202/206 North
Broadview Heights, OH
-
12,400
2,393
14,793
5,059
2801 E. Royalton Rd.
Brookfield, WI
-
1,300
12,830
-
1,300
12,830
1185 Davidson Road
Brooklyn Park, MD
-
1,290
16,329
1,290
16,358
2,193
613 Hammonds Lane
Brooks, AB
1,996
4,951
-
4,951
951 Cassils Road West
Brookville, IN
-
13,461
-
13,461
11049 State Road 101
Buckhurst Hill, UKH
-
13,861
58,858
-
13,861
58,858
1,234
High Road
Burleson, TX
-
13,985
14,235
1,774
300 Huguley Boulevard
Burleson, TX
-
3,150
10,437
-
3,150
10,437
621 Old Highway 1187
Burlington, NC
-
4,297
5,004
1,678
3619 S. Mebane St.
Burlington, NC
-
5,467
-
5,467
1,883
3615 S. Mebane St.
Burlington, NC
-
11,257
-
11,257
2766 Grand Oaks Blvd
Burlington, NJ
-
1,700
12,554
1,700
13,020
1,970
115 Sunset Road
Burlington, NJ
-
1,170
19,205
1,170
19,372
2,464
2305 Rancocas Road
Burlington, WA
-
3,860
31,722
-
3,860
31,722
400 Gilkey Road
Burnaby, BC
8,119
7,623
13,844
-
7,623
13,844
7195 Canada Way
Byrdstown, TN
-
-
2,414
1,534
1,265
2,683
1,917
129 Hillcrest Dr.
Calgary, AB
16,917
2,341
42,768
-
2,341
42,768
1,306
1729-90th Avenue SW
Calgary, AB
28,055
4,569
70,199
-
4,569
70,199
2,123
500 Midpark Way SE
Cambridge, MD
-
15,843
16,050
2,091
525 Glenburn Avenue
Camrose, AB
13,824
1,019
20,678
-
1,019
20,678
6821-50 Avenue
Canton, MA
-
8,201
8,464
5,133
One Meadowbrook Way
Canton, NC
-
5,357
6,057
27 North Main Street
Canton, OH
-
2,098
-
2,098
1119 Perry Dr., N.W.
Cape Coral, FL
-
3,281
-
3,281
1,240
911 Santa Barbara Blvd.
Cape Coral, FL
8,894
18,868
-
18,868
1,768
831 Santa Barbara Boulevard
Cape May Court House, NJ
-
1,440
17,002
1,155
1,440
18,157
144 Magnolia Drive
Carmel, IN
-
1,700
19,491
-
1,700
19,491
12315 Pennsylvania Street
Carrollton, TX
-
4,280
31,444
4,280
32,178
1,668
2105 North Josey Lane
Carson City, NV
-
8,238
8,488
1111 W. College Parkway
Cary, NC
-
1,500
4,350
1,500
5,336
2,312
111 MacArthur
Castleton, IN
-
15,137
-
15,137
8405 Clearvista Lake
Catonsville, MD
-
1,330
15,003
1,330
15,552
2,088
16 Fusting Avenue
Cedar Grove, NJ
-
1,830
10,939
1,830
10,949
1,538
25 East Lindsley Road
Cedar Grove, NJ
-
2,850
27,737
2,850
27,757
3,667
536 Ridge Road
Centreville, MD(2)
-
14,602
14,843
1,982
205 Armstrong Avenue
Chapel Hill, NC
-
2,646
3,429
1,268
100 Lanark Rd.
Chapel Hill, NC
-
7,512
8,418
405 Smith Level Road
Charles Town, WV
-
22,834
22,863
2,867
219 Prospect Ave
Charleston, WV
-
17,575
17,873
2,249
1000 Association Drive, North Gate Business Park
Charleston, WV
-
5,430
5,444
699 South Park Road
Chatham, VA
-
14,039
-
14,039
100 Rorer Street
Chelmsford, MA
-
1,040
10,951
1,499
1,040
12,450
3,712
4 Technology Dr.
Chester, VA
-
1,320
18,127
-
1,320
18,127
12001 Iron Bridge Road
Chicago, IL
-
1,800
19,256
-
1,800
19,256
1,916
6700 South Keating Avenue
Chicago, IL
-
2,900
17,016
-
2,900
17,016
1,717
4239 North Oak Park Avenue
Chickasha, OK
-
1,395
-
1,395
801 Country Club Rd.
Cinnaminson, NJ
-
6,663
6,812
1,026
1700 Wynwood Drive
Citrus Heights, CA
14,506
2,300
31,876
2,300
32,465
6,427
7418 Stock Ranch Rd.
Claremore, OK
-
1,427
6,130
7,557
1,037
1605 N. Hwy. 88
Clarks Summit, PA
-
11,179
11,194
1,563
100 Edella Road
Clarks Summit, PA
-
6,529
6,583
150 Edella Road
Clarksville, TN
-
2,292
-
2,292
1,050
2183 Memorial Dr.
Clayton, NC
-
15,733
-
15,733
84 Johnson Estate Road
Cleburne, TX
-
5,369
-
5,369
1,234
402 S Colonial Drive
Clevedon, UKK
-
3,392
20,233
-
3,392
20,233
18/19 Elton Road
Cleveland, TN
-
5,000
5,122
2,068
2750 Executive Park N.W.
Clinton, MD
-
2,330
20,876
2,330
21,467
2,170
7520 Surratts Road
Cloquet, MN
-
4,660
4,780
705 Horizon Circle
Cobham, UKJ
-
11,723
29,871
-
11,723
29,871
1,888
Redhill Road
Colchester, CT
-
4,860
5,355
59 Harrington Court
Colorado Springs, CO
-
4,280
62,168
-
4,280
62,168
1605 Elm Creek View
Colts Neck, NJ
-
14,733
1,147
1,016
15,644
2,127
3 Meridian Circle
Columbia, TN
-
2,295
-
2,295
1,058
5011 Trotwood Ave.
Columbia, TN
-
3,787
-
3,787
1,719
1410 Trotwood Ave.
Columbia, SC
-
2,120
4,860
5,709
2,120
10,569
3,826
731 Polo Rd.
Columbia Heights, MN
-
14,175
14,338
1,601
3807 Hart Boulevard
Columbus, IN
-
3,190
-
3,190
2564 Foxpointe Dr.
Columbus, OH
-
5,170
8,255
1,070
12,885
3,637
1425 Yorkland Rd.
Columbus, OH
-
1,010
5,022
-
1,010
5,022
1,565
1850 Crown Park Ct.
Columbus, OH
-
1,010
4,931
13,620
1,860
17,701
4,946
5700 Karl Rd.
Columbus, IN
-
6,710
-
6,710
2,377
2011 Chapa Dr.
Concord, NC
-
3,921
3,976
1,516
2452 Rock Hill Church Rd.
Concord, NH
-
18,423
18,869
2,378
20 Maitland Street
Concord, NH
-
1,760
43,179
1,760
43,747
5,518
239 Pleasant Street
Concord, NH
-
3,041
3,381
227 Pleasant Street
Congleton, UKD
-
2,433
6,120
-
2,433
6,120
Rood Hill
Conroe, TX
-
7,771
-
7,771
1,278
903 Longmire Road
Conyers, GA
-
2,740
19,302
2,740
19,529
1,725
1504 Renaissance Drive
Coppell, TX
-
1,550
8,386
-
1,550
8,386
1530 East Sandy Lake Road
Cortland, NY
-
18,041
18,099
1,518
839 Bennie Road
Coventry, UKG
-
2,345
16,530
-
2,345
16,530
Banner Lane, Tile Hill
Crawfordsville, IN
-
17,239
1,426
18,665
517 Concord Road
Crown Point, IN
-
20,044
-
20,044
1555 South Main Street
Dallas, OR
-
9,427
-
9,427
664 SE Jefferson
Daniels, WV
-
17,320
17,370
2,194
1631 Ritter Drive
Danville, VA
-
3,954
4,676
1,634
149 Executive Ct.
Danville, VA
-
8,436
-
8,436
508 Rison Street
Daphne, AL
-
2,880
8,670
2,880
8,797
27440 County Road 13
Dedham, MA
-
1,360
9,830
-
1,360
9,830
3,964
10 CareMatrix Dr.
Defuniak Springs, FL
-
1,350
10,250
-
1,350
10,250
2,751
785 S. 2nd St.
Denton, TX
-
1,760
8,305
-
1,760
8,305
1,025
2125 Brinker Rd
Derby, UKF
-
-
-
12,600
2,728
9,872
Rykneld Road
Dover, DE
-
7,717
7,755
1,075
1203 Walker Road
Dover, DE
-
22,266
22,356
2,886
1080 Silver Lake Blvd.
Drayton Valley, AB
-
10,198
-
10,198
3902-47 Street
Dresher, PA
-
2,060
40,236
2,083
41,130
5,259
1405 N. Limekiln Pike
Dundalk, MD(2)
-
1,770
32,047
1,770
32,831
4,198
7232 German Hill Road
Durham, NC
-
1,476
10,659
2,196
1,476
12,855
10,052
4434 Ben Franklin Blvd.
Dyer, IN
-
1,800
25,061
-
1,800
25,061
1532 Calumet Avenue
Eagan, MN
17,000
2,260
31,643
-
2,260
31,643
3810 Alder Avenue
East Brunswick, NJ
-
1,380
34,229
1,380
34,848
3,925
606 Cranbury Rd.
East Norriton, PA
-
1,200
28,129
1,084
1,262
29,151
3,776
2101 New Hope St
Eastbourne, UKJ
-
4,866
29,210
-
4,866
29,210
1,013
Carew Road
Easton, MD
-
24,539
-
24,539
3,266
610 Dutchman's Lane
Eatontown, NJ
-
1,190
23,358
1,190
23,426
3,088
3 Industrial Way East
Eden, NC
-
4,877
-
4,877
1,701
314 W. Kings Hwy.
Edmond, OK
-
8,388
-
8,388
15401 North Pennsylvania Avenue
Edmond, OK
-
1,810
14,849
1,810
14,961
1225 Lakeshore Drive
El Paso, TX
-
1,420
12,394
1,420
12,678
435 S Mesa Hills Drive
Elizabeth City, NC
-
2,760
2,011
4,771
1,928
400 Hastings Lane
Elizabethton, TN
-
4,604
4,940
2,012
1200 Spruce Lane
Emeryville, CA
-
2,560
57,491
-
2,560
57,491
2,206
1440 40th Street
Englewood, NJ
-
4,514
4,531
333 Grand Avenue
Englishtown, NJ
-
12,520
13,431
1,849
49 Lasatta Ave
Erin, TN
-
8,060
8,194
3,196
242 Rocky Hollow Rd.
Eugene, OR
-
5,822
-
5,822
4550 West Amazon Drive
Eureka, KS
-
3,950
-
3,950
-
1820 E River St
Everett, WA
-
1,400
5,476
-
1,400
5,476
2,428
2015 Lake Heights Dr.
Fair Lawn, NJ
-
2,420
24,504
2,420
24,948
3,253
12-15 Saddle River Road
Fairfield, CA
-
1,460
14,040
1,541
1,460
15,581
5,530
3350 Cherry Hills St.
Fairhope, AL
-
9,119
-
9,119
50 Spring Run Road
Fall River, MA
-
5,829
4,856
10,685
4,708
1748 Highland Ave.
Fall River, MA
-
34,715
34,923
4,498
4901 North Main Street
Fanwood, NJ
-
2,850
55,175
2,850
55,993
6,238
295 South Ave.
Faribault, MN
-
11,539
-
11,539
828 1st Street NE
Farnborough, UKJ
-
2,433
6,857
-
2,433
6,857
Bruntile Close, Reading Road
Fayetteville, PA
-
2,150
32,951
-
2,150
32,951
6375 Chambersburg Road
Fayetteville, GA
-
12,665
12,974
1,116
1967 Highway 54 West
Fayetteville, NY
-
3,962
4,462
1,652
5125 Highbridge St.
Findlay, OH
-
1,800
-
1,800
725 Fox Run Rd.
Fishers, IN
-
1,500
14,500
-
1,500
14,500
2,315
9745 Olympia Dr.
Florence, NJ
-
2,978
-
2,978
1,120
901 Broad St.
Florence, AL
6,985
13,049
13,217
2,542
3275 County Road 47
Flourtown, PA
-
1,800
14,830
1,800
15,033
2,011
350 Haws Lane
Flower Mound, TX
-
1,800
8,414
-
1,800
8,414
4141 Long Prairie Road
Follansbee, WV
-
27,670
27,719
3,541
840 Lee Road
Folsom, CA
-
-
33,600
-
1,582
32,018
2,129
330 Montrose Drive
Forest City, NC
-
4,497
-
4,497
1,586
493 Piney Ridge Rd.
Fort Ashby, WV
-
19,566
19,689
2,464
Diane Drive, Box 686
Fort Collins, CO
-
3,680
58,608
-
3,680
58,608
4750 Pleasant Oak Drive
Fort Wayne, IN
-
8,232
-
8,232
1,926
2626 Fairfield Ave.
Fort Worth, TX
-
13,615
5,086
18,701
2,417
425 Alabama Ave.
Franconia, NH
-
11,320
11,390
1,491
93 Main Street
Franklin, NH
-
15,210
15,257
1,978
7 Baldwin Street
Frederick, MD
-
-
-
18,942
2,550
16,392
347 Ballenger Center Drive
Fredericksburg, VA
-
1,000
20,000
1,200
1,000
21,200
5,796
3500 Meekins Dr.
Fredericksburg, VA
-
28,611
28,646
3,632
11 Dairy Lane
Fredericksburg, VA
-
3,700
22,016
3,700
22,075
1,856
12100 Chancellors Village
Fredericksburg, VA
-
1,130
23,202
-
1,130
23,202
140 Brimley Drive
Fredonia, KS
-
-
-
2111 E Washington St
Fremont, CA
18,860
3,400
25,300
3,203
3,456
28,447
7,578
2860 Country Dr.
Fresno, CA
-
2,500
35,800
2,500
35,918
6,803
7173 North Sharon Avenue
Gambrills, MD
-
2,500
16,726
-
2,500
16,726
1219 Waugh Chapel Road
Gardner, MA
-
10,210
10,237
1,402
32 Hospital Hill Road
Gardner, KS
-
2,800
-
2,800
-
869 Juniper Terrace
Gardnerville, NV
12,189
1,143
10,831
1,075
1,164
11,885
8,346
1565-A Virginia Ranch Rd.
Gastonia, NC
-
6,129
-
6,129
2,100
1680 S. New Hope Rd.
Gastonia, NC
-
3,096
3,118
1,141
1717 Union Rd.
Gastonia, NC
-
5,029
5,149
1,780
1750 Robinwood Rd.
Georgetown, TX
-
2,100
-
2,100
1,027
2600 University Dr., E.
Gettysburg, PA
-
8,913
9,003
1,295
867 York Road
Gig Harbor, WA
5,120
1,560
15,947
1,583
16,177
3,043
3213 45th St. Court NW
Glastonbury, CT
-
1,950
9,532
2,360
10,031
1,420
72 Salmon Brook Drive
Glen Mills, PA
-
9,110
9,275
1,276
549 Baltimore Pike
Glenside, PA
-
1,940
16,867
1,940
17,020
2,265
850 Paper Mill Road
Graceville, FL
-
13,000
-
13,000
3,393
1083 Sanders Ave.
Grafton, WV
-
18,824
18,861
2,374
8 Rose Street
Granbury, TX
-
2,040
30,670
2,040
30,819
3,824
100 Watermark Boulevard
Granbury, TX
-
2,550
2,940
2,550
3,340
916 East Highway 377
Grand Ledge, MI
-
1,150
16,286
5,119
1,150
21,405
2,568
4775 Village Dr
Granger, IN
-
1,670
21,280
2,401
1,670
23,681
3,154
6330 North Fir Rd
Grapevine, TX
-
-
-
19,692
2,220
17,472
4545 Merlot Drive
Grass Valley, CA
4,268
7,667
7,837
415 Sierra College Drive
Greendale, WI
-
2,060
35,383
2,060
35,905
3,566
5700 Mockingbird Lane
Greeneville, TN
-
8,290
8,797
2,882
106 Holt Ct.
Greenfield, WI
-
-
15,204
-
14,314
5017 South 110th Street
Greensboro, NC
-
2,970
3,524
1,262
5809 Old Oak Ridge Rd.
Greensboro, NC
-
5,507
1,013
6,520
2,316
4400 Lawndale Dr.
Greensboro, NC
-
6,634
7,206
5918 Netfield Road
Greenville, SC
-
4,750
-
4,750
1,572
23 Southpointe Dr.
Greenville, NC
-
4,393
4,561
1,559
2715 Dickinson Ave.
Greenwood, IN
-
1,550
22,770
1,550
22,851
3,138
2339 South SR 135
Groton, CT
-
2,430
19,941
2,430
20,836
2,912
1145 Poquonnock Road
Haddonfield, NJ
-
-
-
16,883
16,363
132 Warwick Road
Hamburg, PA
-
10,543
10,734
1,595
125 Holly Road
Hamilton, NJ
-
4,469
-
4,469
1,667
1645 Whitehorse-Mercerville Rd.
Hanford, UKG
-
1,652
11,748
-
1,652
11,748
Bankhouse Road
Hanover, IN
-
4,430
-
4,430
1,499
188 Thornton Rd
Harleysville, PA
-
11,355
-
11,355
1,999
695 Main Street
Harriman, TN
-
8,060
8,218
3,374
240 Hannah Rd.
Harrow, UKI
-
8,848
9,880
-
8,848
9,880
177 Preston Hill
Hatboro, PA
-
-
28,112
1,746
-
29,858
3,706
3485 Davisville Road
Hatfield, UKH
-
3,495
8,997
-
3,495
8,997
St Albans Road East
Haverford, PA
-
1,880
33,993
1,883
34,826
4,449
731 Old Buck Lane
Hemet, CA
-
3,405
-
3,405
25818 Columbia St.
Hemet, CA
-
1,890
28,606
1,899
29,582
8,109
1001 N. Lyon Ave
Hemet, CA
-
9,630
10,551
1,705
1001 N. Lyon Ave
Herne Bay, UKJ
-
2,271
29,109
-
2,271
29,109
2,196
165 Reculver Road
Hiawatha, KS
-
4,210
-
4,210
-
400 Kansas Ave
Hickory, NC
-
1,219
2530 16th St. N.E.
High Point, NC
-
4,443
5,236
1,838
1568 Skeet Club Rd.
High Point, NC
-
2,185
2,595
1564 Skeet Club Rd.
High Point, NC
-
3,395
3,423
1,211
201 W. Hartley Dr.
High Point, NC
-
4,143
-
4,143
1,452
1560 Skeet Club Rd.
High River, AB
-
34,317
-
34,317
660 7th Street
Highland Park, IL
-
2,820
15,832
2,820
16,021
1,293
1651 Richfield Avenue
Highlands Ranch, CO
-
3,721
4,983
8,704
1,666
9160 S. University Blvd.
Hilltop, WV
-
25,355
25,370
3,247
Saddle Shop Road
Hinckley, UKF
-
2,581
5,013
-
2,581
5,013
Tudor Road
Hockessin, DE
-
1,120
6,308
1,120
7,197
100 Saint Claire Drive
Hollywood, FL
-
1,240
13,806
1,240
14,242
1,257
3880 South Circle Drive
Holton, KS
-
7,460
-
7,460
-
410 Juniper Dr
Homestead, FL
-
2,750
11,750
-
2,750
11,750
3,137
1990 S. Canal Dr.
Houston, TX
-
5,090
9,471
-
5,090
9,471
1,882
15015 Cypress Woods Medical Drive
Howell, NJ
9,470
1,066
21,577
1,069
21,844
2,900
100 Meridian Place
Huntington, WV
-
32,261
32,387
4,155
101 13th Street
Huron, OH
-
6,088
1,452
7,540
2,028
1920 Cleveland Rd. W.
Hurricane, WV
-
21,454
22,258
2,862
590 N Poplar Fork Road
Hutchinson, KS
-
10,590
10,784
3,173
2416 Brentwood
Indianapolis, IN
-
6,287
22,565
28,852
9,194
8616 W. Tenth St.
Indianapolis, IN
-
2,473
12,123
14,596
4,552
8616 W.Tenth St.
Indianapolis, IN
-
14,688
-
14,688
1635 N Arlington Avenue
Indianapolis, IN
-
18,781
-
18,781
5404 Georgetown Road
Jackson, NJ
-
6,500
26,405
2,193
6,500
28,598
2,346
2 Kathleen Drive
Jacksonville Beach, FL
-
1,210
26,207
1,210
26,679
2,282
1700 The Greens Way
Jamestown, TN
-
-
6,707
-
7,215
5,289
208 N. Duncan St.
Jefferson, OH
-
9,120
-
9,120
2,664
222 Beech St.
Jupiter, FL
-
3,100
47,453
3,100
48,016
3,950
110 Mangrove Bay Way
Kansas City, KS
-
20,116
-
20,116
8900 Parallel Parkway
Keene, NH
-
9,639
9,923
1,259
677 Court Street
Kenner, LA
-
1,100
10,036
1,100
10,364
8,040
1600 Joe Yenni Blvd
Kennesaw, GA
-
10,848
11,236
1,006
5235 Stilesboro Road
Kennett Square, PA
-
1,050
22,946
1,083
23,151
2,993
301 Victoria Gardens Dr.
Kennewick, WA
-
1,820
27,991
1,834
28,692
6,421
2802 W 35th Ave
Kent, WA
-
20,318
10,470
30,788
6,082
24121 116th Avenue SE
Kirkland, WA
-
1,880
4,315
1,880
4,998
1,554
6505 Lakeview Dr.
Kirkstall, UKE
-
2,912
11,253
-
2,912
11,253
29 Broad Lane
Kokomo, IN
-
16,044
-
16,044
2200 S. Dixon Rd
Laconia, NH
-
14,434
14,930
1,963
175 Blueberry Lane
Lafayette, CO
-
1,420
20,192
-
1,420
20,192
329 Exempla Circle
Lafayette, IN
-
16,833
-
16,833
2402 South Street
Lafayette, LA
-
1,928
10,483
1,928
10,509
3,650
204 Energy Parkway
Lake Barrington, IL
-
3,400
66,179
3,400
66,225
5,448
22320 Classic Court
Lake Zurich, IL
-
1,470
9,830
-
1,470
9,830
1,245
550 America Court
Lakeway, TX
-
5,142
18,574
3,029
5,142
21,603
1,214
2000 Medical Dr
Lakewood, CO
-
2,160
28,091
2,160
28,140
1,350
7395 West Eastman Place
Lakewood Ranch, FL
-
6,714
1,988
8,702
8230 Nature's Way
Lakewood Ranch, FL
6,981
1,000
22,388
-
1,000
22,388
2,059
8220 Natures Way
Lancaster, CA
9,742
15,295
15,907
3,391
43051 15th St. West
Lancaster, PA
-
7,623
7,702
1,142
336 South West End Ave
Lancaster, NH
-
15,804
15,964
2,059
91 Country Village Road
Lancaster, NH
-
63 Country Village Road
Langhorne, PA
-
1,350
24,881
1,350
24,998
3,316
262 Toll Gate Road
LaPlata, MD(2)
-
19,068
19,534
2,563
One Magnolia Drive
Las Vegas, NV
-
23,420
-
23,420
2,715
2500 North Tenaya Way
Lawrence, KS
3,497
8,716
-
8,716
3220 Peterson Road
Lebanon, NH
-
20,138
20,202
2,612
24 Old Etna Road
Lecanto, FL
-
6,900
-
6,900
2,191
2341 W. Norvell Bryant Hwy.
Lee, MA
-
18,135
19,061
7,035
600 & 620 Laurel St.
Leeds, UKE
-
2,359
15,824
-
2,359
15,824
100 Grove Lane
Leicester, UKF
-
3,657
29,177
-
3,657
29,177
2,309
307 London Road
Lenoir, NC
-
3,748
4,389
1,533
1145 Powell Rd., N.E.
Leominster, MA
-
6,201
6,226
44 Keystone Drive
Lethbridge, AB
1,487
1,214
2,750
-
1,214
2,750
785 Columbia Boulevard West
Lethbridge, AB
3,052
6,855
-
6,855
1730 10th Avenue
Lewisburg, WV
-
3,699
3,769
331 Holt Lane
Lexana, KS
-
1,770
-
1,770
-
8710 Caenen Lake Rd
Lexington, KY
-
1,980
21,258
-
1,980
21,258
2531 Old Rosebud Road
Lexington, NC
-
3,900
1,015
4,915
1,780
161 Young Dr.
Libertyville, IL
-
6,500
40,024
-
6,500
40,024
5,165
901 Florsheim Dr
Lichfield, UKG
-
1,652
36,246
-
1,652
36,246
Wissage Road
Lillington, NC
-
17,579
-
17,579
54 Red Mulberry Way
Lillington, NC
-
16,451
-
16,451
2041 NC-210 N
Lincoln, NE
-
13,807
-
13,807
2,059
7208 Van Dorn St.
Linwood, NJ
-
21,984
22,745
3,041
432 Central Ave
Linwood, NJ
-
2,310
14,912
-
2,310
14,912
201 New Road
Litchfield, CT
-
1,240
17,908
10,893
1,250
28,792
2,504
19 Constitution Way
Little Neck, NY
-
3,350
38,461
1,176
3,357
39,630
5,138
55-15 Little Neck Pkwy.
Livermore, CA
9,837
4,100
24,996
-
4,100
24,996
35 Fenton Street
Loganville, GA
-
1,430
22,912
1,430
23,469
2,174
690 Tommy Lee Fuller Drive
London, UKI
-
20,792
182,448
-
20,792
182,448
3,824
53 Parkside
London, UKI
-
4,719
32,497
-
4,719
32,497
49 Parkside
London, UKI
-
6,046
13,355
-
6,046
13,355
17-19 View Road
Longview, TX
-
5,520
-
5,520
1,278
311 E Hawkins Pkwy
Longwood, FL
-
1,260
6,445
-
1,260
6,445
425 South Ronald Reagan Boulevard
Louisburg, KS
-
4,320
-
4,320
-
202 Rogers St
Louisville, KY
-
10,010
2,768
12,778
3,822
4604 Lowe Rd
Louisville, KY
-
7,135
7,298
3,007
2529 Six Mile Lane
Louisville, KY
-
4,675
4,808
2,010
1120 Cristland Rd.
Lowell, MA
-
1,070
13,481
1,070
13,584
1,887
841 Merrimack Street
Lowell, MA
-
3,378
3,408
30 Princeton Blvd
Loxley, UKE
-
1,637
18,727
-
1,637
18,727
1,405
Loxley Road
Lutherville, MD
-
1,100
19,786
1,579
1,100
21,365
2,706
515 Brightfield Road
Lynchburg, VA
-
16,114
-
16,114
189 Monica Blvd
Macungie, PA
-
29,033
29,049
3,700
1718 Spring Creek Road
Mahwah, NJ
-
-
-
28,844
1,605
27,239
15 Edison Road
Manahawkin, NJ
-
1,020
20,361
1,020
20,483
2,694
1361 Route 72 West
Manalapan, NJ
-
22,624
22,881
2,592
445 Route 9 South
Manassas, VA
-
7,446
7,976
2,513
8341 Barrett Dr.
Manchester, NH
-
1,080
3,059
1,080
3,640
191 Hackett Hill Road
Mankato, MN
12,839
1,460
32,104
-
1,460
32,104
100 Dublin Road
Mansfield, TX
-
5,251
-
5,251
1,229
2281 Country Club Dr
Manteca, CA
5,987
1,300
12,125
1,566
1,312
13,679
4,039
430 N. Union Rd.
Marianna, FL
-
8,910
-
8,910
2,319
2600 Forest Glenn Tr.
Marietta, GA
-
1,270
10,519
1,270
10,966
3039 Sandy Plains Road
Marietta, PA
-
1,050
13,633
-
1,050
13,633
2760 Maytown Road
Marion, IN
-
12,750
1,136
13,886
614 W. 14th Street
Marion, IN
-
9,190
10,014
505 N. Bradner Avenue
Marlborough, UKK
-
3,200
8,155
-
3,200
8,155
The Common
Marlinton, WV
-
8,430
8,441
1,135
Stillwell Road, Route 1
Marlton, NJ
-
-
38,300
2,894
-
41,194
7,404
92 Brick Road
Marmet, WV
-
26,483
-
26,483
3,322
1 Sutphin Drive
Martinsburg, WV
-
17,180
17,230
2,178
2720 Charles Town Road
Martinsville, VA
-
-
-
-
-
Rolling Hills Rd. & US Hwy. 58
Marysville, WA
4,436
4,780
5,683
1,738
9802 48th Dr. N.E.
Matawan, NJ
-
1,830
20,618
1,830
20,625
2,360
625 State Highway 34
Matthews, NC
-
4,738
-
4,738
1,699
2404 Plantation Center Dr.
McHenry, IL
-
1,576
-
-
1,576
-
-
5200 Block of Bull Valley Road
McKinney, TX
-
1,570
7,389
-
1,570
7,389
1,237
2701 Alma Rd.
McMinnville, OR
-
7,984
-
7,984
3121 NE Cumulus Avenue
McMurray, PA
-
1,440
15,805
3,601
1,440
19,406
1,998
240 Cedar Hill Dr
Mechanicsburg, PA
-
1,350
16,650
-
1,350
16,650
1,976
4950 Wilson Lane
Medicine Hat, AB
2,440
5,566
-
5,566
65 Valleyview Drive SW
Melbourne, FL
-
7,070
48,257
13,444
7,070
61,701
9,939
7300 Watersong Lane
Melville, NY
-
4,280
73,283
3,798
4,292
77,069
9,676
70 Pinelawn Rd
Memphis, TN
-
5,963
-
5,963
2,327
1150 Dovecrest Rd.
Mendham, NJ
-
1,240
27,169
1,240
27,802
3,514
84 Cold Hill Road
Menomonee Falls, WI
-
1,020
6,984
1,652
1,020
8,636
1,602
W128 N6900 Northfield Drive
Mercerville, NJ
-
9,929
10,045
1,411
2240 White Horse- Merceville Road
Meriden, CT
-
1,300
1,472
1,300
1,477
845 Paddock Ave
Meridian, ID
-
3,600
20,802
3,600
21,053
7,193
2825 E. Blue Horizon Dr.
Merrillville, IN
-
11,699
11,853
2,457
9509 Georgia St.
Mesa, AZ
5,913
9,087
9,888
4,076
7231 E. Broadway
Middleburg Heights, OH
-
7,780
-
7,780
2,366
15435 Bagley Rd.
Middleton, WI
-
4,006
4,606
1,575
6701 Stonefield Rd.
Middletown, RI
-
1,480
19,703
-
1,480
19,703
2,629
333 Green End Avenue
Midland, MI
-
11,025
5,522
16,547
1,681
2325 Rockwell Dr
Milford, DE
-
7,816
7,855
1,087
500 South DuPont Boulevard
Milford, DE
-
19,216
19,274
2,552
700 Marvel Road
Mill Creek, WA
27,255
10,150
60,274
10,179
61,179
14,264
14905 Bothell-Everett Hwy
Millville, NJ
-
29,944
30,048
3,891
54 Sharp Street
Milton Keynes, UKJ
-
2,182
22,296
-
2,182
22,296
Tunbridge Grove, Kents Hill
Milwaukie, OR
-
6,782
-
6,782
5770 SE Kellogg Creek Drive
Mishawaka, IN
-
16,114
-
16,114
60257 Bodnar Blvd
Missoula, MT
-
7,490
7,867
2,151
3620 American Way
Monclova, OH
-
1,750
11,868
-
1,750
11,868
1,034
6935 Monclova Road
Monmouth Junction, NJ
-
6,209
6,266
2 Deer Park Drive
Monroe, NC
-
3,681
4,329
1,549
918 Fitzgerald St.
Monroe, NC
-
4,799
5,656
1,911
919 Fitzgerald St.
Monroe, NC
-
4,021
4,135
1,478
1316 Patterson Ave.
Monroe, WA
-
2,560
34,460
2,584
34,955
6,720
15465 179th Ave. SE
Monroe Township, NJ
-
3,250
27,771
-
3,250
27,771
-
319 Forsgate Drive
Monroe Twp, NJ
-
1,160
13,193
1,160
13,268
1,873
292 Applegarth Road
Monteagle, TN
-
3,318
-
3,318
1,401
218 Second St., N.E.
Monterey, TN
-
-
4,195
-
4,605
3,324
410 W. Crawford Ave.
Montville, NJ
-
3,500
31,002
3,500
31,577
3,635
165 Changebridge Rd.
Moorestown, NJ
-
2,060
51,628
1,134
2,065
52,757
6,768
1205 N. Church St
Moorestown, NJ
-
6,400
23,875
-
6,400
23,875
1,119
250 Marter Avenue
Morehead City, NC
-
3,104
1,648
4,752
1,926
107 Bryan St.
Morgantown, KY
-
3,705
4,320
1,534
206 S. Warren St.
Morgantown, WV
-
15,633
15,653
1,664
161 Bakers Ridge Road
Morton Grove, IL
-
1,900
19,374
1,900
19,533
2,146
5520 N. Lincoln Ave.
Mount Pleasant, SC
-
-
17,200
-
4,052
13,149
1,304
1200 Hospital Drive
Mount Vernon, WA
-
3,440
21,842
1,623
3,440
23,465
1810 E. Division Street
Mountain City, TN
-
5,896
6,556
4,484
919 Medical Park Dr.
Moyock, NC
-
13,381
-
13,381
141 Moyock Landing Drive
Mt. Vernon, WA
-
2,200
2,356
3807 East College Way
Murphy, TX
-
1,950
19,182
-
1,950
19,182
304 West FM 544
Nacogdoches, TX
-
5,754
-
5,754
1,325
5902 North St
Naperville, IL
-
3,470
29,547
-
3,470
29,547
3,886
504 North River Road
Naples, FL
-
1,716
17,306
2,075
1,738
19,358
16,781
1710 S.W. Health Pkwy.
Naples, FL
-
5,450
-
5,450
1,866
2900 12th St. N.
Nashville, TN
-
4,910
29,590
-
4,910
29,590
5,944
15 Burton Hills Boulevard
Nashville, TN
-
4,500
12,287
-
4,500
12,287
1,008
832 Wedgewood Ave
Naugatuck, CT
-
1,200
15,826
1,200
16,002
2,127
4 Hazel Avenue
Needham, MA
-
1,610
13,715
1,610
14,081
5,791
100 West St.
Neodesha, KS
-
-
-
400 Fir St
New Braunfels, TX
-
1,200
19,800
9,397
2,729
27,668
2,633
2294 East Common Street
New Haven, IN
-
3,524
-
3,524
1,434
1201 Daly Dr.
New Moston, UKD
-
1,770
5,233
-
1,770
5,233
90a Broadway
Newark, DE
-
21,220
1,488
22,708
6,364
200 E. Village Rd.
Newcastle Under Lyme, UKG
-
1,327
6,760
-
1,327
6,760
Hempstalls Lane
Newcastle-under-Lyme, UKG
-
1,345
6,618
-
1,345
6,618
Silverdale Road
Newport, VT
-
3,867
-
3,867
35 Bel-Aire Drive
Norman, OK
-
1,484
-
1,484
1701 Alameda Dr.
Norman, OK
-
1,480
33,330
-
1,480
33,330
3,001
800 Canadian Trails Drive
Norristown, PA
-
1,200
19,488
1,762
1,200
21,250
2,682
1700 Pine Street
North Andover, MA
-
21,817
21,870
2,842
140 Prescott Street
North Andover, MA
-
1,070
17,341
1,303
1,070
18,644
2,452
1801 Turnpike Street
North Augusta, SC
-
2,558
-
2,558
1,169
105 North Hills Dr.
North Bend, OR
-
1,290
7,361
-
1,290
7,361
2290 Inland Drive
North Cape May, NJ
-
22,266
22,302
2,882
700 Townbank Road
North Cape May, NJ
-
13,556
-
13,556
3809 Bayshore Road
North Cape May, NJ
-
-
-
610 Town Bank Road
Northampton, UKF
-
6,193
20,736
-
6,193
20,736
1,373
Cliftonville Road
Northampton, UKF
-
2,407
7,479
-
2,407
7,479
Cliftonville Road
Nuneaton, UKG
-
3,974
10,737
-
3,974
10,737
132 Coventry Road
Nuthall, UKF
-
1,946
7,486
-
1,946
7,486
172A Nottingham Road
Nuthall, UKF
-
2,986
12,474
-
2,986
12,474
172 Nottingham Road
Oak Hill, WV
-
24,506
-
24,506
3,068
422 23rd Street
Oak Hill, WV
-
-
438 23rd Street
Oakland, CA
-
4,760
16,143
-
4,760
16,143
468 Perkins Street
Ocala, FL
-
1,340
10,564
-
1,340
10,564
1,870
2650 SE 18TH Avenue
Ogden, UT
-
6,700
7,399
2,135
1340 N. Washington Blv.
Oklahoma City, OK
-
7,513
-
7,513
1,554
13200 S. May Ave
Oklahoma City, OK
-
7,017
-
7,017
1,380
11320 N. Council Road
Olds, AB
-
7,688
-
7,688
5600 Sunrise Crescent
Olds, AB
-
13,142
-
13,142
3300 57th Avenue
Olympia, WA
6,397
16,689
16,984
3,266
616 Lilly Rd. NE
Omaha, NE
-
10,230
-
10,230
1,550
11909 Miracle Hills Dr.
Omaha, NE
-
8,864
-
8,864
1,399
5728 South 108th St.
Ona, WV
-
15,998
-
15,998
100 Weatherholt Drive
Oneonta, NY
-
5,020
-
5,020
1,061
1846 County Highway 48
Orem, UT
-
2,150
24,107
-
2,150
24,107
250 East Center Street
Ormond Beach, FL
-
-
2,739
-
3,191
1,941
103 N. Clyde Morris Blvd.
Orwigsburg, PA
-
20,632
20,766
2,715
1000 Orwigsburg Manor Drive
Osage City, KS
-
1,700
-
1,700
-
1403 Laing St
Osawatomie, KS
-
2,970
-
2,970
-
1520 Parker Ave
Ottawa, KS
-
6,590
-
6,590
-
2250 S Elm St
Overland Park, KS
-
3,730
27,076
3,730
27,416
4,641
12000 Lamar Avenue
Overland Park, KS
-
4,500
29,105
7,295
4,500
36,400
5,210
6101 W 119th St
Overland Park, KS
-
2,840
-
2,840
-
14430 Metcalf Ave
Owasso, OK
-
1,380
-
1,380
12807 E. 86th Place N.
Owensboro, KY
-
6,760
7,369
2,160
1614 W. Parrish Ave.
Owensboro, KY
-
13,275
-
13,275
4,076
1205 Leitchfield Rd.
Owenton, KY
-
2,400
-
2,400
905 Hwy. 127 N.
Oxford, MI
11,038
1,430
15,791
-
1,430
15,791
2,266
701 Market St
Palestine, TX
-
4,320
1,300
5,620
1,357
1625 W. Spring St.
Palm Coast, FL
-
10,957
-
10,957
1,804
50 Town Ct.
Paola, KS
-
5,610
-
5,610
-
601 N. East Street
Paris, TX
-
5,452
-
5,452
3,331
750 N Collegiate Dr
Parkersburg, WV
-
21,288
21,931
2,775
723 Summers Street
Parkville, MD
-
1,350
16,071
1,350
16,345
2,192
8710 Emge Road
Parkville, MD
-
11,186
11,189
1,549
8720 Emge Road
Parkville, MD
-
1,100
11,768
-
1,100
11,768
1,612
1801 Wentworth Road
Paso Robles, CA
-
1,770
8,630
1,770
9,323
3,370
1919 Creston Rd.
Passaic, NJ
-
2,750
9,982
-
2,750
9,982
56 Hamilton Avenue
Pella, IA
-
6,716
6,805
2602 Fifield Road
Pennington, NJ
-
1,380
27,620
1,465
28,287
3,162
143 West Franklin Avenue
Pennsauken, NJ
-
10,780
10,959
1,645
5101 North Park Drive
Petoskey, MI
-
14,452
-
14,452
1,946
965 Hager Dr
Pewaukee, WI
-
4,700
20,669
-
4,700
20,669
6,100
2400 Golf Rd.
Philadelphia, PA
-
2,700
25,709
2,700
26,041
3,432
184 Bethlehem Pike
Philadelphia, PA
-
2,930
10,433
3,373
2,930
13,806
1,899
1526 Lombard Street
Philadelphia, PA
-
11,239
11,304
1,446
8015 Lawndale Avenue
Philadelphia, PA
-
1,810
16,898
1,810
16,931
2,467
650 Edison Avenue
Phillipsburg, NJ
-
21,175
21,368
2,843
290 Red School Lane
Phillipsburg, NJ
-
8,114
8,151
1,084
843 Wilbur Avenue
Pigeon Forge, TN
-
4,180
4,297
1,833
415 Cole Dr.
Pinehurst, NC
-
2,690
3,174
1,176
17 Regional Dr.
Piqua, OH
-
1,885
-
1,885
1744 W. High St.
Pittsburgh, PA
-
1,750
8,572
1,750
8,687
2,636
100 Knoedler Rd.
Plainview, NY
-
3,990
11,969
3,990
12,529
1,581
150 Sunnyside Blvd
Plattsmouth, NE
-
5,650
-
5,650
1913 E. Highway 34
Plymouth, MI
-
1,490
19,990
1,490
20,119
2,742
14707 Northville Rd
Ponoka, AB
3,647
10,831
-
10,831
4004 40th Street Close
Port St. Joe, FL
-
2,055
-
2,055
1,159
220 9th St.
Port St. Lucie, FL
-
8,700
47,230
6,090
8,700
53,320
7,859
10685 SW Stony Creek Way
Post Falls, ID
-
2,700
14,217
2,181
2,700
16,398
3,233
460 N. Garden Plaza Ct.
Pottsville, PA
-
26,964
27,166
3,589
1000 Schuylkill Manor Road
Princeton, NJ
-
1,730
30,888
1,397
1,810
32,205
3,662
155 Raymond Road
Prior Lake, MN
14,250
1,870
29,849
-
1,870
29,849
4685 Park Nicollet Avenue
Puyallup, WA
11,136
1,150
20,776
1,156
21,216
4,180
123 Fourth Ave. NW
Quakertown, PA
-
1,040
25,389
1,040
25,461
3,291
1020 South Main Street
Raleigh, NC
24,091
3,530
59,589
-
3,530
59,589
5,110
5301 Creedmoor Road
Raleigh, NC
-
2,580
16,837
-
2,580
16,837
1,561
7900 Creedmoor Road
Reading, PA
-
19,906
20,008
2,627
5501 Perkiomen Ave
Red Bank, NJ
-
1,050
21,275
1,050
21,665
2,445
One Hartford Dr.
Rehoboth Beach, DE
-
24,248
8,562
32,796
3,420
36101 Seaside Blvd
Reidsville, NC
-
3,830
4,687
1,715
2931 Vance St.
Reno, NV
-
1,060
11,440
1,060
12,045
3,541
5165 Summit Ridge Road
Richardson, TX
-
1,800
16,562
-
1,800
16,562
1350 East Lookout Drive
Richmond, VA
-
-
12,000
-
11,750
2220 Edward Holland Drive
Ridgeland, MS
-
7,675
8,102
2,575
410 Orchard Park
Ridgely, TN
-
5,700
5,797
2,308
117 N. Main St.
Ridgewood, NJ
-
1,350
16,170
1,350
16,650
2,139
330 Franklin Turnpike
Rochdale, MA
-
-
7,100
-
6,410
111 Huntoon Memorial Highway
Rockledge, FL
-
4,117
-
4,117
1,953
1775 Huntington Lane
Rockville, MD
-
-
16,398
-
16,408
1,716
9701 Medical Center Drive
Rockville, CT
-
1,500
4,835
1,500
4,911
1253 Hartford Turnpike
Rockville Centre, NY
-
4,290
20,310
4,290
20,879
2,481
260 Maple Ave
Rockwall, TX
-
-
-
19,693
2,220
17,473
720 E Ralph Hall Parkway
Rockwood, TN
-
7,116
7,857
3,091
5580 Roane State Hwy.
Rocky Hill, CT
-
1,090
6,710
1,500
1,090
8,210
2,491
60 Cold Spring Rd.
Rogersville, TN
-
3,278
-
3,278
1,388
109 Hwy. 70 N.
Rohnert Park, CA
13,265
6,500
18,700
2,116
6,546
20,769
5,712
4855 Snyder Lane
Romeoville, IL
-
1,895
-
-
1,895
-
-
Grand Haven Circle
Roseburg, OR
-
1,200
4,891
-
1,200
4,891
1901 NW Hughwood Drive
Roseville, MN
-
2,140
24,679
-
2,140
24,679
2750 North Victoria Street
Roswell, GA
7,628
1,107
9,627
1,086
1,114
10,706
7,536
655 Mansell Rd.
Rugeley, UKG
-
2,271
12,266
-
2,271
12,266
Horse Fair
Ruston, LA
-
9,790
-
9,790
1,261
1401 Ezelle St
Rutland, VT
-
1,190
23,655
1,190
23,743
3,125
9 Haywood Avenue
Sacramento, CA
9,948
14,781
15,020
2,963
6350 Riverside Blvd
Salem, OR
-
5,171
-
5,172
2,342
1355 Boone Rd. S.E.
Salem, OR
-
4,726
-
4,726
3988 12th Street SE
Salisbury, NC
-
5,697
5,865
2,006
2201 Statesville Blvd.
San Angelo, TX
-
8,800
9,225
2,658
2695 Valleyview Blvd.
San Angelo, TX
-
1,050
24,689
1,050
24,705
6101 Grand Court Road
San Antonio, TX
-
6,120
28,169
2,124
6,120
30,293
3,514
2702 Cembalo Blvd
San Antonio, TX
-
-
17,303
-
-
17,303
5,758
8902 Floyd Curl Dr.
San Bernardino, CA
-
3,700
14,300
3,700
14,987
2,741
1760 W. 16th St.
San Diego, CA
-
-
22,003
1,845
-
23,848
4,279
555 Washington St.
San Ramon, CA
8,531
2,430
17,488
2,435
17,543
3,354
18888 Bollinger Canyon Rd
Sanatoga, PA
-
30,695
30,733
3,903
225 Evergreen Road
Sand Springs, OK
6,530
19,654
-
19,654
1,803
4402 South 129th Avenue West
Sarasota, FL
-
3,175
-
3,175
1,695
8450 McIntosh Rd.
Sarasota, FL
-
3,400
-
3,400
1,298
4602 Northgate Ct.
Sarasota, FL
-
3,360
19,140
-
3,360
19,140
2,175
6150 Edgelake Drive
Sarasota, FL
-
1,120
12,489
1,120
12,595
1,144
2290 Cattlemen Road
Sarasota, FL
-
8,825
9,360
3221 Fruitville Road
Sarasota, FL
-
9,854
10,036
3749 Sarasota Square Boulevard
Scott Depot, WV
-
6,876
6,934
5 Rolling Meadows
Scranton, PA
-
17,609
-
17,609
2741 Blvd. Ave
Scranton, PA
-
12,144
-
12,144
2751 Boulevard Ave
Seaford, DE
-
14,029
14,082
1,949
1100 Norman Eskridge Highway
Seaford, DE
-
7,995
1,547
9,542
715 East King Street
Seattle, WA
7,456
5,190
9,350
5,199
9,905
2,865
11501 15th Ave NE
Seattle, WA
-
3,420
15,555
3,420
15,760
3,332
2326 California Ave SW
Seattle, WA
-
2,630
10,257
2,630
10,923
2,283
4611 35th Ave SW
Seattle, WA
27,610
10,670
37,291
10,700
38,155
9,686
805 4th Ave N
Selbyville, DE
-
25,912
26,191
3,440
21111 Arrington Dr
Seven Fields, PA
-
4,663
4,722
2,144
500 Seven Fields Blvd.
Severna Park, MD(2)
-
2,120
31,273
2,120
32,081
4,037
24 Truckhouse Road
Shawnee, OK
-
1,400
-
1,400
3947 Kickapoo
Shelbyville, KY
-
3,870
4,500
1,226
1871 Midland Trail
Shelton, WA
-
17,049
17,345
1,673
900 W Alpine Way
Shepherdstown, WV
-
13,806
13,819
1,762
80 Maddex Drive
Sherman, TX
-
5,221
-
5,221
1,272
1011 E. Pecan Grove Rd.
Shillington, PA
-
1,020
19,569
1,020
20,525
2,652
500 E Philadelphia Ave
Shrewsbury, NJ
-
2,120
38,116
2,127
38,833
5,049
5 Meridian Way
Silver Spring, MD
-
1,250
7,278
1,250
7,547
2101 Fairland Road
Silvis, IL
-
16,420
16,559
2,358
1900 10th St.
Sissonville, WV
-
23,948
24,003
3,083
302 Cedar Ridge Road
Sisterville, WV
-
5,400
5,642
201 Wood Street
Sittingbourne, UKJ
-
1,622
7,815
-
1,622
7,815
200 London Road
Smithfield, NC
-
5,680
-
5,680
1,959
830 Berkshire Rd.
Smithfield, NC
-
8,216
-
8,216
250 Highway 210 West
Somerset, MA
-
1,010
29,577
1,010
29,728
3,788
455 Brayton Avenue
Sonoma, CA
14,497
1,100
18,400
1,700
1,109
20,090
5,507
800 Oregon St.
South Bend, IN
-
17,770
-
17,770
52565 State Road 933
South Boston, MA
-
2,002
5,218
7,220
3,320
804 E. Seventh St.
South Croydon, UKI
-
2,949
2,507
-
2,949
2,507
42-46 Bramley Hill
South Pittsburg, TN
-
5,628
-
5,628
2,077
201E. 10th St.
Southbury, CT
-
1,860
23,613
1,860
24,571
3,020
655 Main St
Sparks, NV
-
3,700
46,526
-
3,700
46,526
8,130
275 Neighborhood Way
Spencer, WV
-
8,810
8,838
1,170
825 Summit Street
Spring City, TN
-
6,085
3,210
9,295
3,344
331 Hinch St.
Spring House, PA
-
10,780
10,979
1,531
905 Penllyn Pike
Springfield, OR
-
1,790
8,865
-
1,790
8,865
770 Harlow Road
Springfield, IL
-
-
10,100
-
9,332
701 North Walnut Street
Springfield, IL
-
13,378
1,084
14,462
3089 Old Jacksonville Road
Spruce Pine, NC
-
8,340
9,016
13681 Highway 226 South
St. Charles, MD
-
15,555
15,639
2,079
4140 Old Washington Highway
St. Paul, MN
-
2,100
33,019
-
2,100
33,019
750 Mississippi River
Stamford, UKF
-
2,175
3,871
-
2,175
3,871
Priory Road
Stanwood, WA
-
2,260
28,474
2,283
28,918
5,829
7212 265th St NW
Statesville, NC
-
1,447
1,713
2441 E. Broad St.
Statesville, NC
-
6,183
6,191
2,068
2806 Peachtree Place
Statesville, NC
-
3,627
-
3,627
1,243
2814 Peachtree Rd.
Stillwater, OK
-
1,400
-
1,400
1616 McElroy Rd.
Stockton, CA
2,863
2,280
5,983
2,372
6,288
1,455
6725 Inglewood
Stratford-upon-Avon, UKG
-
17,341
-
17,341
Scholars Lane
Stroudsburg, PA
-
16,313
-
16,313
370 Whitestone Corner Road
Summit, NJ
-
3,080
14,152
-
3,080
14,152
1,843
41 Springfield Avenue
Superior, WI
-
1,020
13,735
6,159
1,020
19,894
1,282
1915 North 34th Street
Swanton, OH
-
6,370
-
6,370
2,062
401 W. Airport Hwy.
Takoma Park, MD
-
1,300
10,136
-
1,300
10,136
1,058
7525 Carroll Avenue
Terre Haute, IN
-
1,370
18,016
-
1,370
18,016
395 8th Avenue
Texarkana, TX
-
1,403
-
1,403
4204 Moores Lane
The Villages, FL
-
1,035
7,446
-
1,035
7,446
2450 Parr Drive
Tomball, TX
-
1,050
13,300
1,050
13,971
1,715
1221 Graham Dr
Toms River, NJ
-
1,610
34,627
1,679
35,265
4,631
1587 Old Freehold Rd
Toms River, NJ
-
4,180
7,707
-
4,180
7,707
1351 Old Freehold Road
Tonganoxie, KS
-
3,690
-
3,690
-
120 W 8th St
Topeka, KS
-
12,712
-
12,712
1,204
1931 Southwest Arvonia Place
Towson, MD(2)
-
1,180
13,280
1,180
13,475
1,819
7700 York Road
Troy, OH
-
2,000
4,254
6,254
1,672
81 S. Stanfield Rd.
Troy, OH
-
16,730
-
16,730
5,214
512 Crescent Drive
Trumbull, CT
-
4,440
43,384
-
4,440
43,384
5,393
6949 Main Street
Tucson, AZ
-
1,190
18,318
-
1,190
18,318
8151 E Speedway Boulevard
Tulsa, OK
-
3,003
6,025
3,003
6,045
2,927
3219 S. 79th E. Ave.
Tulsa, OK
-
1,390
7,110
1,390
7,572
1,239
7220 S. Yale Ave.
Tulsa, OK
-
1,320
10,087
-
1,320
10,087
7902 South Mingo Road East
Tyler, TX
-
5,268
-
5,268
1,224
5550 Old Jacksonville Hwy.
Uhrichsville, OH
-
6,716
-
6,716
1,882
5166 Spanson Drive S.E.
Uniontown, PA
-
6,817
6,901
75 Hikle Street
Upper Providence, PA
-
-
-
30,095
1,900
28,195
1133 Black Rock Road
Vacaville, CA
13,640
17,100
1,651
18,751
5,251
799 Yellowstone Dr.
Vallejo, CA
13,656
4,000
18,000
2,344
4,030
20,315
5,625
350 Locust Dr.
Vallejo, CA
7,257
2,330
15,407
2,330
15,717
3,321
2261 Tuolumne
Valley Falls, RI
-
1,080
7,433
1,080
7,443
1,024
100 Chambers Street
Valparaiso, IN
-
2,558
-
2,558
1,027
2601 Valparaiso St.
Valparaiso, IN
-
2,962
-
2,962
1,168
2501 Valparaiso St.
Vancouver, WA
11,427
1,820
19,042
1,821
19,311
3,855
10011 NE 118th Ave
Venice, FL
-
6,000
-
6,000
2,019
1240 Pinebrook Rd.
Venice, FL
-
1,150
10,674
-
1,150
10,674
1,811
1600 Center Rd.
Vero Beach, FL
-
3,187
-
3,187
1,246
420 4th Ct.
Vero Beach, FL
-
3,263
-
3,263
1,286
410 4th Ct.
Vero Beach, FL
-
2,930
40,070
15,112
2,930
55,182
10,691
7955 16th Manor
Virginia Beach, VA
-
1,540
22,593
-
1,540
22,593
5520 Indian River Rd
Voorhees, NJ
-
1,800
37,299
1,800
37,858
4,942
2601 Evesham Road
Voorhees, NJ(2)
-
1,900
26,040
1,900
26,934
3,515
3001 Evesham Road
Voorhees, NJ
-
3,100
25,950
-
3,100
25,950
2,207
113 South Route 73
Voorhees, NJ
-
3,700
24,312
1,490
3,847
25,655
1,667
311 Route 73
Wabash, IN
-
14,588
-
14,588
20 John Kissinger Drive
Waconia, MN
-
14,726
4,495
19,221
2,061
500 Cherry Street
Wake Forest, NC
-
3,003
1,742
4,745
1,974
611 S. Brooks St.
Walkersville, MD
-
1,650
15,103
-
1,650
15,103
1,535
56 West Frederick Street
Wall, NJ
-
1,650
25,350
2,361
1,690
27,671
3,000
2021 Highway 35
Wallingford, CT
-
1,210
1,269
35 Marc Drive
Walsall, UKG
-
1,416
10,234
-
1,416
10,234
Little Aston Road
Wamego, KS
-
2,510
-
2,510
-
1607 4th St
Wareham, MA
-
10,313
1,701
12,014
4,711
50 Indian Neck Rd.
Warren, NJ
-
2,000
30,810
2,000
31,288
3,504
274 King George Rd
Warwick, RI
-
1,530
18,564
1,530
18,734
2,514
660 Commonwealth Avenue
Watchung, NJ
-
1,920
24,880
1,976
25,724
2,885
680 Mountain Boulevard
Waukee, IA
-
1,870
31,878
1,075
1,870
32,953
2,829
1650 SE Holiday Crest Circle
Waxahachie, TX
-
5,763
-
5,763
1,204
1329 Brown St.
Weatherford, TX
-
5,261
-
5,261
1,232
1818 Martin Drive
Webster, NY
-
8,968
9,004
100 Kidd Castle Way
Webster, NY
-
1,300
21,127
1,300
21,136
1,753
200 Kidd Castle Way
Webster Groves, MO
-
1,790
15,425
-
1,790
15,425
1,368
45 E Lockwood Avenue
Wellingborough, UKF
-
1,770
6,841
-
1,770
6,841
159 Northampton
West Bend, WI
-
17,790
17,828
1,890
2130 Continental Dr
West Chester, PA
-
1,350
29,237
1,350
29,359
3,833
800 West Miner Street
West Chester, PA
-
3,290
42,258
3,290
42,852
4,266
1615 East Boot Road
West Chester, PA
-
11,894
11,899
1,210
1615 East Boot Road
West Orange, NJ
-
2,280
10,687
2,280
10,869
1,581
20 Summit Street
West Worthington, OH
-
5,090
-
5,090
1,479
111 Lazelle Rd., E.
Westerville, OH
-
8,287
3,105
11,392
8,069
690 Cooper Rd.
Westfield, IN(2)
-
15,964
-
15,964
937 E. 186th Street
Westfield, NJ
-
2,270
16,589
2,270
17,086
2,441
1515 Lamberts Mill Road
Westford, MA
-
13,829
14,034
1,898
3 Park Drive
Westlake, OH
-
1,330
17,926
-
1,330
17,926
6,923
27601 Westchester Pkwy.
Westmoreland, TN
-
1,822
2,640
4,462
1,837
1559 New Hwy. 52
Weston Super Mare, UKK
-
3,008
8,432
-
3,008
8,432
141b Milton Road
Westworth Village, TX
-
2,060
31,296
-
2,060
31,296
25 Leonard Trail
Wetaskiwin, AB
-
20,131
-
20,131
5430-37 A Avenue
White Lake, MI
9,970
2,920
20,179
2,920
20,271
2,821
935 Union Lake Rd
Whittier, CA
-
4,470
22,151
4,483
22,596
5,940
13250 E Philadelphia St
Wichita, KS
-
1,400
11,000
-
1,400
11,000
3,511
505 North Maize Road
Wichita, KS
-
8,873
-
8,873
10604 E 13th Street North
Wichita, KS
13,404
19,746
-
19,752
1,781
2050 North Webb Road
Wichita, KS
-
2,240
-
2,240
-
900 N Bayshore Dr
Wichita, KS
-
-
-
11,034
10,134
10604 E 13th Street North
Wichita Falls, TX
-
1,070
26,167
1,070
26,253
1,037
3908 Kell W Boulevard
Wilkes-Barre, PA
-
13,842
13,961
1,891
440 North River Street
Wilkes-Barre, PA
-
2,301
2,345
300 Courtright Street
Willard, OH
-
6,447
-
6,447
1050 Neal Zick
Williamsport, PA
-
4,946
5,319
1251 Rural Avenue
Williamsport, PA
-
8,487
8,925
1,284
1201 Rural Avenue
Williamstown, KY
-
6,430
-
6,430
1,994
201 Kimberly Lane
Willow Grove, PA
-
1,300
14,736
1,300
14,845
2,096
1113 North Easton Road
Wilmington, DE
-
9,494
9,551
1,339
810 S Broom Street
Wilmington, NC
-
2,991
-
2,991
1,348
3501 Converse Dr.
Wilmington, NC
-
15,356
-
15,356
3828 Independence Blvd
Wilmington, NC
-
6,575
7,162
3915 Stedwick Ct
Windsor, CT
-
2,250
8,539
1,843
2,250
10,382
1,462
One Emerson Drive
Windsor, CT
-
1,800
1,800
1,544
One Emerson Drive
Winston-Salem, NC
-
2,514
2,973
1,062
2980 Reynolda Rd.
Winter Garden, FL
-
1,350
7,937
-
1,350
7,937
720 Roper Road
Winter Haven, FL
-
10,038
10,274
650 North Lake Howard Drive
Witherwack, UKC
-
1,128
8,265
-
1,128
8,265
Whitchurch Road
Wolverhampton, UKG
-
1,880
7,982
-
1,880
7,982
378 Prestonwood Road
Worcester, MA
-
3,500
54,099
-
3,500
54,099
8,690
101 Barry Road
Worcester, MA
-
2,300
9,060
-
2,300
9,060
1,854
378 Plantation St.
Wyncote, PA
-
2,700
22,244
2,700
22,392
3,006
1245 Church Road
Wyncote, PA
-
1,610
21,256
1,610
21,470
2,751
8100 Washington Lane
Wyncote, PA
-
7,811
7,843
1,047
240 Barker Road
York, UKE
-
3,539
9,880
-
3,539
9,880
Rosetta Way, Boroughbridge Road
Youngsville, NC
-
10,689
-
10,689
100 Sunset Drive
Zionsville, IN
-
1,610
22,400
1,691
1,610
24,091
3,265
11755 N Michigan Rd
Triple-net total
$
554,014
$
1,003,748
$
10,800,837
$
600,549
$
1,032,860
$
11,372,276
$
1,539,032
Welltower Inc.
Schedule III
Real Estate and Accumulated Depreciation
December 31, 2015
(Dollars in thousands)
Initial Cost to Company
Gross Amount at Which Carried at Close of Period
Description
Encumbrances
Land
Building & Improvements
Cost Capitalized Subsequent to Acquisition
Land
Building & Improvements
Accumulated Depreciation(1)
Year Acquired
Year Built
Address
Seniors housing operating:
Acton, MA
$
-
$
-
$
31,346
$
$
$
32,089
$
3,299
10 Devon Drive
Agawam, MA
6,453
10,044
10,514
2,089
153 Cardinal Drive
Albuquerque, NM
-
1,270
20,837
1,324
1,275
22,156
4,393
500 Paisano St NE
Alhambra, CA
-
6,305
6,658
1,121
1118 N. Stoneman Ave.
Altrincham, UKD
-
5,685
29,221
5,061
29,936
4,161
295 Hale Road
Amherstview, ON
4,446
-
4,446
4567 Bath Road
Arlington, TX
21,484
1,660
37,395
1,184
1,677
38,561
7,452
1250 West Pioneer Parkway
Arnprior, ON
6,283
-
6,283
15 Arthur Street
Atlanta, GA
-
2,100
20,603
2,154
21,011
2,241
1000 Lenox Park Blvd NE
Austin, TX
-
1,560
21,413
1,560
21,435
1,282
11330 Farrah Lane
Austin, TX
-
4,200
74,850
-
4,200
74,850
1,951
4310 Bee Caves Road
Avon, CT
18,998
1,550
30,571
1,948
1,580
32,489
7,374
101 Bickford Extension
Azusa, CA
-
3,141
6,470
9,611
2,361
125 W. Sierra Madre Ave.
Bagshot, UKJ
-
5,928
35,673
-
5,928
35,673
5,502
14 - 16 London Road
Banstead, UKJ
-
8,781
54,836
9,357
7,992
64,981
8,432
Croydon Lane
Basingstoke, UKJ
-
4,088
22,502
-
4,088
22,502
1,023
Grove Road
Basking Ridge, NJ
-
2,356
37,710
2,377
38,293
4,836
404 King George Road
Bassett, UKJ
-
5,826
38,030
-
5,826
38,030
5,563
111 Burgess Road
Baton Rouge, LA
9,346
29,436
29,675
3,710
9351 Siegen Lane
Beaconsfield, UKJ
-
6,653
60,856
-
6,653
60,856
7,616
30-34 Station Road
Beaconsfield, QC
-
1,149
17,484
-
1,149
17,484
3,324
505 Elm Avenue
Bedford, NH
-
-
-
33,113
2,527
30,586
3,350
5 Corporate Drive
Bellevue, WA
-
2,800
19,004
2,809
19,919
3,300
15928 NE 8th Street
Belmont, CA
-
3,000
23,526
1,461
3,000
24,987
4,697
1301 Ralston Avenue
Belmont, CA
-
-
35,300
-
36,081
4,914
1010 Alameda de Las Pulgas
Bethesda, MD
-
-
45,309
45,694
5,986
8300 Burdett Road
Bethesda, MD
-
-
-
-
8300 Burdett Road
Bethesda, MD
-
-
-
-
8300 Burdett Road
Billerica, MA
-
1,619
21,381
-
1,619
21,381
1,227
20 Charnstaffe Lane
Birmingham, UKG
-
25,287
-
25,287
3,627
5 Church Road, Edgbaston
Blainville, QC
-
2,077
8,902
-
2,077
8,902
2,038
50 des Chateaux Boulevard
Bloomfield Hills, MI
-
2,000
35,662
2,000
36,056
4,563
6790 Telegraph Road
Borehamwood, UKH
-
7,074
41,060
7,965
6,416
49,683
6,237
Edgwarebury Lane
Bothell, WA
-
1,350
13,439
-
1,350
13,439
10605 NE 185th Street
Boulder, CO
-
2,994
27,458
1,304
3,014
28,742
4,765
3955 28th Street
Bournemouth, UKK
-
6,606
50,811
-
6,606
50,811
5,372
42 Belle Vue Road
Braintree, MA
21,006
-
41,290
41,702
5,638
618 Granite Street
Brampton, ON
27,998
9,939
62,711
-
9,939
62,711
100 Ken Whillans Drive
Brighton, MA
10,332
2,100
14,616
2,109
15,243
3,083
50 Sutherland Road
Brockport, NY
-
1,500
23,496
-
1,500
23,496
-
90 West Avenue
Brockville, ON
4,580
7,445
-
7,445
1026 Bridlewood Drive
Brookfield, CT
19,359
2,250
30,180
1,079
2,262
31,247
6,261
246A Federal Road
Broomfield, CO
-
4,140
44,547
10,339
8,611
50,414
9,339
400 Summit Blvd
Brossard, QC
11,428
5,228
33,507
-
5,228
33,507
2455 Boulevard Rome
Buckingham, UKJ
-
3,561
16,549
-
3,561
16,549
Church Street
Buffalo Grove, IL
-
2,850
49,129
2,850
49,591
6,550
500 McHenry Road
Burbank, CA
-
4,940
43,466
4,940
44,172
7,078
455 E. Angeleno Avenue
Burlington, ON
12,946
1,309
19,311
-
1,309
19,311
2,842
500 Appleby Line
Burlington, MA
-
2,443
34,354
2,522
34,901
4,973
24 Mall Road
Calabasas, CA
-
-
6,438
-
7,181
3,512
25100 Calabasas Road
Calgary, AB
12,640
2,252
37,415
-
2,252
37,415
5,775
20 Promenade Way SE
Calgary, AB
14,536
2,793
41,179
-
2,793
41,179
5,986
80 Edenwold Drive NW
Calgary, AB
11,476
3,122
38,971
-
3,122
38,971
5,617
150 Scotia Landing NW
Calgary, AB
22,995
3,431
28,983
-
3,431
28,983
3,350
9229 16th Street SW
Calgary, AB
23,846
2,385
36,776
-
2,385
36,776
2220-162nd Avenue SW
Camberley, UKJ
-
2,654
5,736
2,654
5,783
Fernhill Road
Cardiff, UKL
-
3,814
14,935
-
3,814
14,935
2,737
127 Cyncoed Road
Cardiff by the Sea, CA
39,580
5,880
64,711
5,880
65,421
10,470
3535 Manchester Avenue
Carol Stream, IL
-
1,730
55,048
1,079
1,730
56,127
8,192
545 Belmont Lane
Cary, NC
-
45,240
45,509
4,788
1206 West Chatham Street
Centerville, MA
-
1,300
27,357
1,324
28,066
4,665
22 Richardson Road
Chatham, ON
1,620
1,098
12,462
-
1,098
12,462
25 Keil Drive North
Chelmsford, MA
-
1,589
26,432
-
1,589
26,432
1,383
199 Chelmsford Street
Chesterfield, MO
-
1,857
48,366
1,857
48,786
5,652
1880 Clarkson Road
Chorleywood, UKH
-
6,715
50,515
-
6,715
50,515
7,004
High View, Rickmansworth Road
Chula Vista, CA
-
2,072
22,163
2,076
22,757
2,915
3302 Bonita Road
Church Crookham, UKJ
-
3,097
16,975
-
3,097
16,975
1,391
Bourley Road
Cincinnati, OH
-
2,060
109,388
8,391
2,060
117,779
15,708
5445 Kenwood Road
Claremont, CA
-
2,430
9,928
2,438
10,545
1,601
2053 North Towne Avenue
Cohasset, MA
-
2,485
26,147
1,013
2,485
27,160
3,591
125 King Street (Rt 3A)
Colorado Springs, CO
-
14,756
1,145
15,861
1,900
2105 University Park Boulevard
Concord, NH
13,329
21,164
21,750
3,545
300 Pleasant Street
Coquitlam, BC
10,393
3,047
24,567
-
3,047
24,567
4,690
1142 Dufferin Street
Costa Mesa, CA
-
2,050
19,969
2,050
20,924
3,889
350 West Bay St
Crystal Lake, IL
-
12,461
13,320
2,146
751 E Terra Cotta Avenue
Dallas, TX
-
1,080
9,655
1,080
10,119
1,854
3611 Dickason Avenue
Dallas, TX
-
6,330
114,794
-
6,330
114,794
3,383
3535 N Hall Street
Danvers, MA
9,348
1,120
14,557
1,145
15,179
2,822
1 Veronica Drive
Danvers, MA
-
2,203
28,761
-
2,203
28,761
1,764
9 Summer Street
Davenport, IA
-
1,403
35,893
2,708
1,480
38,525
6,728
4500 Elmore Ave.
Decatur, GA
-
-
-
30,298
1,938
28,360
4,176
920 Clairemont Avenue
Denver, CO
12,519
1,450
19,389
2,925
1,455
22,310
2,866
4901 South Monaco Street
Denver, CO
-
2,910
35,838
2,930
36,515
6,269
8101 E Mississippi Avenue
Dix Hills, NY
-
3,808
39,014
3,808
39,538
5,345
337 Deer Park Road
Dollard-Des-Ormeaux, QC
-
1,957
14,431
-
1,957
14,431
3,346
4377 St. Jean Blvd
Dresher, PA
7,233
1,900
10,664
1,900
11,377
2,495
1650 Susquehanna Road
Dublin, OH
-
1,680
43,423
5,238
1,775
48,566
9,230
6470 Post Rd
East Haven, CT
22,496
2,660
35,533
1,570
2,681
37,082
8,959
111 South Shore Drive
East Meadow, NY
-
45,991
46,257
6,128
1555 Glen Curtiss Boulevard
East Setauket, NY
-
4,920
37,354
4,975
38,043
4,947
1 Sunrise Drive
Eastbourne, UKJ
-
4,950
40,084
-
4,950
40,084
5,508
6 Upper Kings Drive
Edgbaston, UKG
-
-
-
19,687
3,251
16,435
Pershore Road
Edgewater, NJ
-
4,561
25,047
4,564
25,944
3,612
351 River Road
Edison, NJ
-
1,892
32,314
1,896
33,113
6,670
1801 Oak Tree Road
Edmonds, WA
11,182
1,650
24,449
-
1,650
24,449
21500 72nd Avenue West
Edmonton, AB
9,349
1,589
29,819
-
1,589
29,819
4,666
103 Rabbit Hill Court NW
Edmonton, AB
12,029
2,063
37,293
-
2,063
37,293
7,921
10015 103rd Avenue NW
Encinitas, CA
-
1,460
7,721
1,460
8,603
3,759
335 Saxony Rd.
Encino, CA
-
5,040
46,255
5,040
47,209
7,138
15451 Ventura Boulevard
Escondido, CA
-
1,520
24,024
1,147
1,520
25,171
4,710
1500 Borden Rd
Esher, UKJ
-
6,913
57,473
-
6,913
57,473
6,818
42 Copsem Lane
Fairfax, VA
-
2,678
2,791
9207 Arlington Boulevard
Fairfield, NJ
-
3,120
43,868
3,175
44,620
5,991
47 Greenbrook Road
Fareham, UKJ
-
4,074
21,353
-
4,074
21,353
1,435
Redlands Lane
Flossmoor, IL
-
1,292
9,496
1,011
1,335
10,464
1,817
19715 Governors Highway
Folsom, CA
-
1,490
32,754
-
1,490
32,754
1,231
1574 Creekside Drive
Fort Worth, TX
-
2,080
27,888
1,198
2,085
29,081
5,834
2151 Green Oaks Road
Franklin, MA
-
2,430
30,597
1,046
2,442
31,632
3,542
4 Forge Hill Road
Frome, UKK
-
3,251
17,692
-
3,251
17,692
Welshmill Lane
Fullerton, CA
12,774
1,964
19,989
1,982
20,459
2,892
2226 North Euclid Street
Gahanna, OH
-
11,214
1,121
12,320
1,446
775 East Johnstown Road
Gilbert, AZ
16,323
2,160
28,246
2,160
28,520
5,989
580 S. Gilbert Road
Gilroy, CA
-
13,880
24,386
1,567
37,459
7,997
7610 Isabella Way
Glen Cove, NY
-
4,594
35,236
1,174
4,615
36,389
5,988
39 Forest Avenue
Glenview, IL
-
2,090
69,288
1,130
2,090
70,418
10,039
2200 Golf Road
Golden Valley, MN
19,753
1,520
33,513
1,545
34,049
4,157
4950 Olson Memorial Highway
Grimsby, ON
-
5,617
-
5,617
84 Main Street East
Grosse Pointe Woods, MI
-
13,662
13,829
1,643
1850 Vernier Road
Grosse Pointe Woods, MI
-
1,430
31,777
1,430
32,312
3,839
21260 Mack Avenue
Guelph, ON
4,308
1,190
7,597
-
1,190
7,597
165 Cole Road
Guildford, UKJ
-
6,407
67,400
-
6,407
67,400
8,265
Astolat Way, Peasmarsh
Gurnee, IL
-
27,931
28,777
3,223
500 North Hunt Club Road
Hamden, CT
15,138
1,460
24,093
1,003
1,487
25,069
5,194
35 Hamden Hills Drive
Hampshire, UKJ
-
4,986
30,861
-
4,986
30,861
4,034
22-26 Church Road
Haverhill, MA
-
1,720
50,046
-
1,720
50,046
2,805
254 Amesbury Road
Henderson, NV
-
29,809
29,952
4,016
1935 Paseo Verde Parkway
Henderson, NV
5,677
1,190
11,600
1,202
11,985
2,653
1555 West Horizon Ridge Parkway
Highland Park, IL
-
2,250
25,313
2,259
25,782
4,191
1601 Green Bay Road
Hingham, MA
-
1,440
32,292
-
1,440
32,292
1,259
1 Sgt. William B Terry Drive
Holbrook, NY
-
3,957
35,337
3,957
35,721
4,664
320 Patchogue Holbrook Road
Horley, UKJ
-
2,787
14,477
-
2,787
14,477
1,331
Court Lodge Road
Houston, TX
-
3,830
55,674
4,340
3,830
60,014
10,100
2929 West Holcombe Boulevard
Houston, TX
17,606
1,040
31,965
5,013
1,044
36,974
4,999
505 Bering Drive
Houston, TX
-
27,598
1,312
28,910
5,237
10225 Cypresswood Dr
Hove, UKJ
-
1,626
8,178
-
1,626
8,178
Furze Hill
Huntington Beach, CA
-
3,808
31,172
1,148
3,860
32,268
5,293
7401 Yorktown Avenue
Irving, TX
-
1,030
6,823
1,178
1,030
8,001
1,795
8855 West Valley Ranch Parkway
Johns Creek, GA
-
1,580
23,285
1,588
23,461
3,166
11405 Medlock Bridge Road
Kanata, ON
-
1,639
30,700
-
1,639
30,700
5,783
70 Stonehaven Drive
Kansas City, MO
-
1,820
34,898
3,713
1,845
38,587
7,589
12100 Wornall Road
Kansas City, MO
6,250
1,930
39,997
3,393
1,963
43,357
9,011
6500 North Cosby Ave
Kansas City, MO
-
23,962
-
23,962
6460 North Cosby Avenue
Kelowna, BC
5,878
2,688
13,647
-
2,688
13,647
2,670
863 Leon Avenue
Kennebunk, ME
-
2,700
30,204
2,066
3,022
31,948
8,415
One Huntington Common Drive
Kingston, ON
4,633
1,030
11,416
-
1,030
11,416
181 Ontario Street
Kingwood, TX
-
9,777
10,147
1,813
22955 Eastex Freeway
Kirkland, WA
24,600
3,450
38,709
3,454
39,129
5,857
14 Main Street South
Kitchener, ON
1,487
2,744
-
2,744
164 - 168 Ferfus Avenue
Kitchener, ON
4,638
1,130
9,939
-
1,130
9,939
1,615
20 Fieldgate Street
Kitchener, ON
3,533
1,093
7,327
-
1,093
7,327
1,651
290 Queen Street South
La Palma, CA
-
2,950
16,591
2,950
17,128
2,335
5321 La Palma Avenue
Lafayette Hill, PA
-
1,750
11,848
1,311
1,825
13,085
2,439
429 Ridge Pike
Lawrenceville, GA
15,896
1,500
29,003
1,508
29,276
4,012
1375 Webb Gin House Road
Leawood, KS
15,614
2,490
32,493
2,594
5,690
31,887
5,631
4400 West 115th Street
Lenexa, KS
9,757
26,251
26,735
4,231
15055 West 87th Street Parkway
Leominster, MA
-
23,164
-
23,164
1,521
1160 Main Street
Lincroft, NJ
-
19,958
20,831
2,675
734 Newman Springs Road
Lombard, IL
16,893
2,130
59,943
2,130
60,361
7,667
2210 Fountain Square Dr
London, UKI
-
3,731
11,948
-
3,731
11,948
71 Hatch Lane
London, ON
1,174
8,228
-
8,228
760 Horizon Drive
London, ON
6,383
1,969
16,985
-
1,969
16,985
1,109
1486 Richmond Street North
London, ON
-
1,445
13,631
-
1,445
13,631
81 Grand Avenue
Longueuil, QC
9,927
3,992
23,711
-
3,992
23,711
70 Rue Levis
Los Angeles, CA
-
-
11,430
1,544
-
12,974
2,316
330 North Hayworth Avenue
Los Angeles, CA
64,160
-
114,438
1,304
-
115,742
19,542
10475 Wilshire Boulevard
Los Angeles, CA
-
3,540
19,007
3,540
19,744
2,869
2051 N. Highland Avenue
Louisville, KY
-
2,420
20,816
2,420
21,480
3,334
4600 Bowling Boulevard
Louisville, KY
11,169
1,600
20,326
1,600
20,508
3,240
6700 Overlook Drive
Lynnfield, MA
-
3,165
45,200
1,376
3,165
46,576
6,172
55 Salem Street
Malvern, PA
-
1,651
17,194
1,214
1,708
18,351
3,710
324 Lancaster Avenue
Mansfield, MA
27,863
3,320
57,011
2,831
3,431
59,732
12,218
25 Cobb Street
Maple Ridge, BC
7,918
2,789
12,331
-
2,789
12,331
12241 224th Street
Marieville, QC
6,774
1,278
12,113
-
1,278
12,113
425 rue Claude de Ramezay
Markham, ON
15,975
3,727
48,939
-
3,727
48,939
10,287
7700 Bayview Avenue
Marlboro, NJ
-
2,222
14,888
2,222
15,416
2,303
3A South Main Street
Medicine Hat, AB
4,249
1,432
14,141
-
1,432
14,141
223 Park Meadows Drive SE
Memphis, TN
-
1,800
17,744
1,800
18,578
3,777
6605 Quail Hollow Road
Meriden, CT
9,227
1,500
14,874
1,538
15,563
4,125
511 Kensington Avenue
Metairie, LA
13,240
27,708
27,985
3,320
3732 West Esplanade Ave. S
Middletown, CT
15,198
1,430
24,242
1,104
1,439
25,336
5,366
645 Saybrook Road
Middletown, RI
16,163
2,480
24,628
1,389
2,507
25,990
5,392
303 Valley Road
Milford, CT
11,338
3,210
17,364
1,114
3,210
18,478
4,266
77 Plains Road
Milton, ON
13,007
4,542
25,321
-
4,542
25,321
611 Farmstead Drive
Minnetonka, MN
14,206
2,080
24,360
2,153
25,112
3,843
500 Carlson Parkway
Minnetonka, MN
16,253
29,344
29,739
3,448
18605 Old Excelsior Blvd.
Mississauga, ON
9,033
1,602
17,996
-
1,602
17,996
2,778
1130 Bough Beeches Boulevard
Mississauga, ON
3,041
4,655
-
4,655
3051 Constitution Boulevard
Mississauga, ON
19,501
3,649
35,137
-
3,649
35,137
1,972
1490 Rathburn Road East
Mississauga, ON
6,152
2,548
15,158
-
2,548
15,158
85 King Street East
Mobberley, UKD
-
6,150
31,685
-
6,150
31,685
5,954
Barclay Park, Hall Lane
Monterey, CA
-
6,440
29,101
6,440
29,648
3,980
1110 Cass St.
Montgomery Village, MD
-
3,530
18,246
3,533
3,544
21,766
6,009
19310 Club House Road
Moose Jaw, SK
2,620
12,973
-
12,973
1,995
425 4th Avenue NW
Mystic, CT
11,338
1,400
18,274
1,427
18,942
3,785
20 Academy Lane Mystic
Naperville, IL
-
1,550
12,237
2,165
1,550
14,402
1936 Brookdale Road
Naperville, IL
-
1,540
28,204
1,540
28,942
4,073
535 West Ogden Avenue
Naples, FL
58,092
8,989
119,398
-
8,989
119,398
1,193
4800 Aston Gardens Way
Nashua, NH
-
1,264
43,026
-
1,264
43,026
1,955
674 West Hollis Street
Nashville, TN
-
3,900
35,788
1,372
3,900
37,160
6,856
4206 Stammer Place
Nepean, ON
5,769
1,575
5,770
-
1,575
5,770
1 Mill Hill Road
Newmarket, UKH
-
5,141
13,478
4,866
14,093
1,015
Jeddah Way
Newton, MA
27,501
2,250
43,614
2,263
44,273
8,293
2300 Washington Street
Newton, MA
15,873
2,500
30,681
1,800
2,514
32,467
6,425
280 Newtonville Avenue
Newton, MA
-
3,360
25,099
1,162
3,376
26,245
5,518
430 Centre Street
Newtown Square, PA
-
1,930
14,420
1,941
14,953
3,190
333 S. Newtown Street Rd.
Niagara Falls, ON
6,784
1,225
7,963
-
1,225
7,963
7860 Lundy's Lane
Niantic, CT
-
1,320
25,986
4,175
1,331
30,150
4,661
417 Main Street
North Andover, MA
22,315
1,960
34,976
1,203
2,019
36,120
6,815
700 Chickering Road
North Chelmsford, MA
11,760
18,478
19,243
3,338
2 Technology Drive
North Tustin, CA
-
2,880
18,059
2,880
18,416
1,998
12291 Newport Avenue
Oak Park, IL
-
1,250
40,383
1,250
40,953
6,150
1035 Madison Street
Oakland, CA
-
3,877
47,508
1,169
3,877
48,677
6,651
11889 Skyline Boulevard
Oakton, VA
-
2,250
37,576
1,425
2,252
38,998
4,964
2863 Hunter Mill Road
Oakville, ON
5,853
1,252
7,382
-
1,252
7,382
1,184
289 and 299 Randall Street
Oakville, ON
10,232
2,134
29,963
-
2,134
29,963
5,104
25 Lakeshore Road West
Oakville, ON
5,347
1,271
13,754
-
1,271
13,754
1,836
345 Church Street
Oceanside, CA
12,460
2,160
18,352
2,082
2,193
20,401
3,904
3500 Lake Boulevard
Okotoks, AB
17,631
20,943
-
20,943
1,244
51 Riverside Gate
Oshawa, ON
3,197
7,570
-
7,570
1,259
649 King Street East
Ottawa, ON
9,420
1,341
15,425
-
1,341
15,425
110 Berrigan Drive
Ottawa, ON
19,071
3,454
23,309
-
3,454
23,309
1,609
2370 Carling Avenue
Ottawa, ON
21,966
4,177
40,023
-
4,177
40,023
751 Peter Morand Crescent
Ottawa, ON
7,110
2,103
18,421
-
2,103
18,421
1 Eaton Street
Ottawa, ON
12,273
2,963
26,424
-
2,963
26,424
691 Valin Street
Ottawa, ON
10,213
1,561
18,170
-
1,561
18,170
22 Barnstone Drive
Ottawa, ON
13,970
3,403
31,090
-
3,403
31,090
990 Hunt Club Road
Ottawa, ON
18,867
3,411
28,335
-
3,411
28,335
2 Valley Stream Drive
Ottawa, ON
2,986
4,710
-
4,710
1345 Ogilvie Road
Ottawa, ON
2,178
2,165
3,273
370 Kennedy Lane
Ottawa, ON
10,733
2,809
27,299
-
2,809
27,299
5,099
43 Aylmer Avenue
Ottawa, ON
4,781
1,156
9,758
-
1,156
9,758
1,244
1351 Hunt Club Road
Ottawa, ON
3,392
7,800
-
7,800
1,167
140 Darlington Private
Ottawa, ON
9,348
1,176
12,764
-
1,176
12,764
10 Vaughan Street
Overland Park, KS
3,470
1,540
16,269
1,096
1,725
17,180
2,420
9201 Foster
Palo Alto, CA
16,839
-
39,639
1,145
-
40,784
5,203
2701 El Camino Real
Paramus, NJ
-
2,840
35,728
2,851
36,645
4,496
567 Paramus Road
Parkland, FL
57,666
4,880
111,481
-
4,880
111,481
1,171
5999 University Drive
Peabody, MA
6,338
-
-
19,009
2,250
16,758
1,379
73 Margin Street
Pembroke, ON
-
1,873
10,045
-
1,873
10,045
1,878
1111 Pembroke Street West
Pittsburgh, PA
-
1,580
18,017
1,580
18,386
2,830
900 Lincoln Club Dr.
Plainview, NY
-
3,066
19,901
3,079
20,258
2,354
1231 Old Country Road
Plano, TX
4,101
8,538
9,249
2,025
5521 Village Creek Dr
Plano, TX
28,734
3,120
59,950
3,120
60,788
11,356
4800 West Parker Road
Playa Vista, CA
-
1,580
40,531
1,580
41,217
5,627
5555 Playa Vista Drive
Plymouth, MA
-
1,444
34,951
-
1,444
34,951
1,899
157 South Street
Port Perry, ON
9,892
3,685
26,788
-
3,685
26,788
15987 Simcoe Street
Providence, RI
-
2,600
27,546
1,148
2,651
28,643
7,384
700 Smith Street
Purley, UKI
-
9,676
35,251
5,749
8,798
41,878
6,710
21 Russell Hill Road
Queensbury, NY
-
1,260
21,744
-
1,260
21,744
-
27 Woodvale Road
Quincy, MA
-
1,350
12,584
1,386
13,183
2,738
2003 Falls Boulevard
Rancho Cucamonga, CA
-
1,480
10,055
1,487
10,560
1,858
9519 Baseline Road
Rancho Palos Verdes, CA
-
5,450
60,034
1,284
5,450
61,318
9,043
5701 Crestridge Road
Randolph, NJ
-
1,540
46,934
1,540
47,536
6,100
648 Route 10 West
Red Deer, AB
11,851
1,247
19,283
-
1,247
19,283
3100 - 22 Street
Red Deer, AB
13,946
1,199
22,339
-
1,199
22,339
10 Inglewood Drive
Redondo Beach, CA
-
-
9,557
-
10,168
3,906
514 North Prospect Ave
Regina, SK
7,017
1,485
21,148
-
1,485
21,148
3,704
3651 Albert Street
Regina, SK
6,771
1,244
21,036
-
1,244
21,036
2,891
3105 Hillsdale Street
Regina, SK
13,178
1,539
24,053
-
1,539
24,053
1801 McIntyre Street
Renton, WA
21,565
3,080
51,824
3,080
52,164
7,774
104 Burnett Avenue South
Ridgefield, CT
-
3,100
80,614
-
3,100
80,614
4,320
640 Danbury Road
Riviere-du-Loup, QC
3,309
8,504
-
8,504
35 des Cedres
Riviere-du-Loup, QC
9,489
1,454
16,848
-
1,454
16,848
230-235 rue Des Chenes
Rocky Hill, CT
10,253
16,351
16,835
3,090
1160 Elm Street
Romeoville, IL
-
12,646
59,431
6,168
66,763
10,561
605 S Edward Dr.
Roseville, MN
-
1,540
35,877
1,585
36,331
4,298
2555 Snelling Avenue, North
Roswell, GA
-
2,080
6,486
1,169
2,380
7,355
1,317
75 Magnolia Street
Sacramento, CA
-
1,300
23,394
1,304
23,954
2,916
345 Munroe Street
Saint-Lambert, QC
23,254
9,931
107,748
-
9,931
107,748
45,319
1705 Avenue Victoria
Salem, NH
20,566
32,721
1,051
33,519
5,679
242 Main Street
Salisbury, UKK
-
3,251
18,169
-
3,251
18,169
Shapland Close
Salt Lake City, UT
-
1,360
19,691
1,650
1,360
21,341
5,156
1430 E. 4500 S.
San Diego, CA
-
4,200
30,707
4,200
30,908
3,289
2567 Second Avenue
San Diego, CA
-
5,810
63,078
5,810
64,004
11,714
13075 Evening Creek Drive S
San Diego, CA
-
3,000
27,164
3,000
27,592
3,186
810 Turquoise Street
San Gabriel, CA
-
3,120
15,566
3,120
16,055
2,296
8332 Huntington Drive
San Jose, CA
-
2,850
35,098
2,850
35,323
5,236
1420 Curvi Drive
San Jose, CA
-
3,280
46,823
1,261
3,280
48,084
7,027
500 S Winchester Boulevard
San Juan Capistrano, CA
-
1,390
6,942
1,056
1,390
7,998
3,028
30311 Camino Capistrano
Sandy Springs, GA
-
2,214
8,360
2,220
8,799
1,794
5455 Glenridge Drive NE
Santa Maria, CA
-
6,050
50,658
1,162
6,063
51,806
10,701
1220 Suey Road
Santa Monica, CA
19,936
5,250
28,340
5,252
28,839
3,729
1312 15th Street
Saskatoon, SK
4,329
13,905
-
13,905
1,753
220 24th Street East
Saskatoon, SK
10,078
1,382
17,609
-
1,382
17,609
2,236
1622 Acadia Drive
Schaumburg, IL
-
2,460
22,863
2,479
23,584
3,840
790 North Plum Grove Road
Scottsdale, AZ
-
2,500
3,890
1,244
2,500
5,134
1,136
9410 East Thunderbird Road
Seal Beach, CA
-
6,204
72,954
1,057
6,208
74,007
13,575
3850 Lampson Avenue
Seattle, WA
48,540
6,790
85,369
1,785
6,793
87,150
13,279
5300 24th Avenue NE
Seattle, WA
10,751
1,150
19,887
-
1,150
19,887
11039 17th Avenue
Sevenoaks, UKJ
-
7,387
48,012
-
7,387
48,012
7,643
64 - 70 Westerham Road
Shelburne, VT
19,540
31,041
1,490
32,495
5,171
687 Harbor Road
Shelby Township, MI
16,505
1,040
26,344
1,093
26,645
3,246
46471 Hayes Road
Shrewsbury, MA
-
26,824
-
26,824
1,566
3111 Main Street
Sidcup, UKI
-
9,773
56,163
10,008
8,873
67,071
11,712
Frognal Avenue
Simi Valley, CA
-
3,200
16,664
3,200
17,102
3,408
190 Tierra Rejada Road
Solihull, UKG
-
6,060
51,464
-
6,060
51,464
7,491
1270 Warwick Road
Solihull, UKG
-
4,269
30,963
-
4,269
30,963
4,631
1 Worcester Way
Sonning, UKJ
-
6,720
50,268
-
6,720
50,268
6,756
Old Bath Rd.
South Windsor, CT
-
3,000
29,295
1,405
3,099
30,601
6,608
432 Buckland Road
Spokane, WA
-
3,200
25,064
3,268
25,432
5,362
3117 E. Chaser Lane
Spokane, WA
-
2,580
25,342
2,639
25,494
4,242
1110 E. Westview Ct.
St. Albert, AB
8,775
1,145
17,863
-
1,145
17,863
3,231
78C McKenney Avenue
St. John's, NL
6,129
13,466
-
13,466
64 Portugal Cove Road
Stittsville, ON
4,791
1,175
17,397
-
1,175
17,397
2,206
1340 - 1354 Main Street
Stockport, UKD
-
5,222
29,674
-
5,222
29,674
4,999
1 Dairyground Road
Studio City, CA
-
4,006
25,307
4,040
25,835
4,246
4610 Coldwater Canyon Avenue
Sugar Land, TX
-
31,423
1,340
32,763
6,449
1221 Seventh St
Sun City, FL
21,693
6,521
48,476
-
6,521
48,476
231 Courtyards
Sun City, FL
24,442
5,040
50,923
-
5,040
50,923
1311 Aston Gardens Court
Sun City West, AZ
12,257
1,250
21,778
1,250
22,705
2,947
13810 West Sandridge Drive
Sunnyvale, CA
-
5,420
41,682
5,420
42,571
6,651
1039 East El Camino Real
Surrey, BC
7,128
3,605
18,818
-
3,605
18,818
4,276
16028 83rd Avenue
Surrey, BC
16,373
4,552
22,338
-
4,552
22,338
5,435
15501 16th Avenue
Suwanee, GA
-
1,560
11,538
1,560
12,142
2,103
4315 Johns Creek Parkway
Sway, UKJ
-
4,955
18,437
-
4,955
18,437
1,099
Sway Place
Swift Current, SK
2,343
10,119
-
10,119
1,513
301 Macoun Drive
Tacoma, WA
18,405
2,400
35,053
2,446
35,219
5,282
7290 Rosemount Circle
Tacoma, WA
-
1,535
6,068
-
1,535
6,068
7290 Rosemount Circle
Tampa, FL
69,330
4,910
114,148
-
4,910
114,148
1,144
12951 W Linebaugh Avenue
The Woodlands, TX
-
12,379
12,663
2,274
7950 Bay Branch Dr
Toledo, OH
-
2,040
47,129
2,716
2,144
49,741
10,566
3501 Executive Parkway
Toronto, ON
8,882
2,927
20,713
-
2,927
20,713
54 Foxbar Road
Toronto, ON
9,874
5,082
25,493
-
5,082
25,493
1,640
645 Castlefield Avenue
Toronto, ON
13,234
1,976
20,034
-
1,976
20,034
1,238
4251 Dundas Street West
Toronto, ON
20,785
5,132
41,657
-
5,132
41,657
2,494
10 William Morgan Drive
Toronto, ON
5,723
2,480
7,571
-
2,480
7,571
123 Spadina Road
Toronto, ON
1,499
1,079
5,364
-
1,079
5,364
25 Centennial Park Road
Toronto, ON
8,428
2,513
19,695
-
2,513
19,695
2,074
305 Balliol Street
Toronto, ON
18,600
3,400
32,757
-
3,400
32,757
5,095
1055 and 1057 Don Mills Road
Toronto, ON
1,120
1,361
2,915
-
1,361
2,915
3705 Bathurst Street
Toronto, ON
1,816
1,447
3,918
-
1,447
3,918
1340 York Mills Road
Toronto, ON
32,781
5,304
53,488
-
5,304
53,488
11,343
8 The Donway East
Trumbull, CT
24,245
2,850
37,685
1,229
2,927
38,837
8,103
2750 Reservoir Avenue
Tucson, AZ
4,615
6,179
3,497
9,676
1,113
5660 N. Kolb Road
Tulsa, OK
-
1,330
21,285
1,781
1,350
23,046
4,545
8887 South Lewis Ave
Tulsa, OK
-
1,500
20,861
1,550
1,551
22,360
4,840
9524 East 71st St
Tustin, CA
-
15,299
15,783
2,515
240 East 3rd St
Upland, CA
-
3,160
42,596
-
3,160
42,596
1,459
2419 North Euclid Avenue
Upper St Claire, PA
-
1,102
13,455
1,102
13,941
2,404
500 Village Drive
Vancouver, BC
15,361
24,122
42,675
-
24,122
42,675
2,776
2803 West 41st Avenue
Vankleek Hill, ON
1,077
2,960
-
2,960
48 Wall Street
Vaudreuil, QC
8,279
1,779
14,803
-
1,779
14,803
333 rue Querbes
Venice, FL
64,425
6,820
100,501
-
6,820
100,501
1,071
1000 Aston Gardens Drive
Victoria, BC
-
2,674
14,218
-
2,674
14,218
2,914
2638 Ross Lane
Victoria, BC
7,533
2,856
18,038
-
2,856
18,038
3,203
3000 Shelbourne Street
Victoria, BC
6,945
3,681
15,774
-
3,681
15,774
2,895
3051 Shelbourne Street
Victoria, BC
7,788
2,476
15,379
-
2,476
15,379
3965 Shelbourne Street
Virginia Water, UKJ
-
7,106
29,937
5,261
6,475
35,829
5,458
Christ Church Road
Walnut Creek, CA
-
3,700
12,467
1,108
3,763
13,512
2,649
2175 Ygnacio Valley Road
Waltham, MA
-
2,462
40,062
-
2,462
40,062
2,372
126 Smith Street
Warwick, RI
15,681
2,400
24,635
1,270
2,407
25,898
6,310
75 Minnesota Avenue
Washington, DC
32,108
4,000
69,154
4,000
69,893
9,085
5111 Connecticut Avenue NW
Waterbury, CT
24,305
2,460
39,547
1,954
2,495
41,465
11,430
180 Scott Road
Wayland, MA
-
1,207
27,462
1,307
28,344
3,901
285 Commonwealth Road
Welland, ON
6,662
8,971
-
8,971
110 First Street
Wellesley, MA
-
4,690
77,462
-
4,690
77,462
2,684
23 & 27 Washington Street
West Babylon, NY
-
3,960
47,085
3,960
47,634
5,641
580 Montauk Highway
West Bloomfield, MI
-
1,040
12,300
1,060
12,733
1,776
7005 Pontiac Trail
West Hills, CA
-
2,600
7,521
2,600
7,965
1,819
9012 Topanga Canyon Road
West Vancouver, BC
19,137
7,059
28,155
-
7,059
28,155
4,598
2095 Marine Drive
Westbourne, UKK
-
6,504
49,217
-
6,504
49,217
6,843
16-18 Poole Road
Westford, MA
-
1,440
32,607
-
1,440
32,607
1,117
108 Littleton Road
Weston, MA
-
1,160
6,200
1,160
6,734
135 North Avenue
Weybridge, UKJ
-
9,422
57,457
-
9,422
57,457
9,805
Ellesmere Road
Weymouth, UKK
-
3,097
19,712
-
3,097
19,712
Cross Road
White Oak, MD
-
2,304
24,768
2,316
25,754
3,085
11621 New Hampshire Avenue
Wilbraham, MA
10,976
17,639
18,345
3,368
2387 Boston Road
Wilmington, DE
-
1,040
23,338
1,040
23,802
3,256
2215 Shipley Street
Winchester, UKJ
-
7,182
35,044
-
7,182
35,044
5,526
Stockbridge Road
Winnipeg, MB
13,274
1,960
38,612
-
1,960
38,612
8,716
857 Wilkes Avenue
Winnipeg, MB
7,809
1,276
21,732
-
1,276
21,732
3,156
3161 Grant Avenue
Winnipeg, MB
8,310
1,317
15,609
-
1,317
15,609
125 Portsmouth Boulevard
Wolverhampton, UKG
-
3,510
10,409
-
3,510
10,409
2,422
73 Wergs Road
Woodbridge, CT
-
1,370
14,219
1,391
15,047
4,196
21 Bradley Road
Woodland Hills, CA
-
3,400
20,478
3,406
21,150
3,381
20461 Ventura Boulevard
Worcester, MA
13,751
1,140
21,664
1,156
22,431
4,109
340 May Street
Yarmouth, ME
17,128
27,711
28,489
4,848
27 Forest Falls Drive
Yonkers, NY
-
3,962
50,107
3,967
51,009
6,551
65 Crisfield Street
Yorkton, SK
3,389
8,765
-
8,763
1,283
94 Russell Drive
Seniors housing operating total
$
2,290,552
$
972,005
$
10,569,105
$
446,629
$
994,865
$
10,992,868
$
1,463,201
Welltower Inc.
Schedule III
Real Estate and Accumulated Depreciation
December 31, 2015
(Dollars in thousands)
Initial Cost to Company
Gross Amount at Which Carried at Close of Period
Description
Encumbrances
Land
Building & Improvements
Cost Capitalized Subsequent to Acquisition
Land
Building & Improvements
Accumulated Depreciation(1)
Year Acquired
Year Built
Address
Outpatient medical:
Akron, OH
$
-
$
$
12,105
$
-
$
$
12,105
$
1,568
701 White Pond Drive
Allen, TX
12,080
14,196
14,511
3,024
1105 N Central Expressway
Alpharetta, GA
-
18,902
19,133
3,859
3400-A Old Milton Parkway
Alpharetta, GA
-
1,769
36,152
-
1,769
36,152
8,518
3400-C Old Milton Parkway
Alpharetta, GA
-
14,757
14,770
3,156
11975 Morris Road
Alpharetta, GA
-
1,862
-
-
1,862
-
-
940 North Point Parkway
Alpharetta, GA
-
17,103
17,142
4,469
3300 Old Milton Parkway
Arcadia, CA
-
5,408
23,219
2,971
5,618
25,980
7,917
301 W. Huntington Drive
Arlington, TX
-
18,243
18,491
1,094
902 W. Randol Mill Road
Atlanta, GA
-
4,931
18,720
4,679
5,301
23,029
8,357
755 Mt. Vernon Hwy.
Atlanta, GA
-
1,947
24,248
1,143
1,947
25,391
4,258
975 Johnson Ferry Road
Atlanta, GA
25,726
-
43,425
-
43,908
9,347
5670 Peachtree-Dunwoody Road
Bardstown, KY
2,001
-
-
8,239
7,966
4359 New Shepherdsville Rd
Bartlett, TN
7,719
15,015
1,632
16,647
5,193
2996 Kate Bond Rd.
Bellevue, NE
-
-
16,680
-
-
16,680
3,408
2510 Bellevue Medical Center Drive
Bettendorf, IA
-
-
7,110
-
7,183
2140 53rd Avenue
Beverly Hills, CA
-
20,766
40,730
-
20,766
40,730
1,051
9675 Brighton Way
Beverly Hills, CA
-
18,863
1,192
-
18,863
1,192
415 North Bedford
Beverly Hills, CA
-
19,863
31,690
-
19,863
31,690
416 North Bedford
Beverly Hills, CA
33,729
32,603
28,639
-
32,603
28,639
1,119
435 North Bedford
Beverly Hills, CA
78,271
52,772
88,693
-
52,772
88,693
2,116
436 North Bedford
Birmingham, AL
-
10,201
3,208
13,409
4,743
801 Princeton Avenue SW
Birmingham, AL
-
11,733
-
11,733
3,070
817 Princeton Avenue SW
Birmingham, AL
-
18,726
-
18,726
5,068
833 Princeton Avenue SW
Boardman, OH
-
12,161
-
12,161
3,128
8423 Market St
Boca Raton, FL
-
34,002
2,423
36,320
11,052
9970 S. Central Park Blvd.
Boca Raton, FL
-
12,312
12,367
2,004
9960 S. Central Park Boulevard
Boerne, TX
-
13,541
13,731
3,173
134 Menger Springs Road
Boynton Beach, FL
-
2,048
7,692
2,048
8,307
3,059
8188 Jog Rd.
Boynton Beach, FL
-
2,048
7,403
1,238
2,048
8,640
2,937
8200 Jog Road
Boynton Beach, FL
-
5,611
8,079
13,634
4,162
10075 Jog Rd.
Boynton Beach, FL
25,708
13,324
40,369
13,324
41,141
5,217
10301 Hagen Ranch Road
Bradenton, FL
-
1,184
9,799
-
1,184
9,799
315 75th Street West
Bradenton, FL
-
1,035
4,298
-
1,035
4,298
7005 Cortez Road West
Bridgeton, MO
10,294
21,272
21,292
5,105
12266 DePaul Dr
Burleson, TX
-
12,611
12,614
2,484
12001 South Freeway
Burnsville, MN
-
-
31,596
-
-
31,596
2,339
14101 Fairview Dr
Carmel, IN
-
2,280
19,238
2,280
19,301
5,488
12188-A North Meridian Street
Carmel, IN
-
2,026
21,559
2,026
21,570
6,368
12188-B North Meridian Street
Castle Rock, CO
-
13,004
13,576
1,012
2352 Meadows Boulevard
Cedar Grove, WI
-
-
313 S. Main St.
Charleston, SC
-
2,773
25,928
2,773
25,931
1,794
325 Folly Road
Cincinnati, OH
-
-
17,880
-
18,098
1,454
3301 Mercy West Boulevard
Claremore, OK
7,732
12,829
13,236
4,399
1501 N. Florence Ave.
Clarkson Valley, MO
-
-
35,592
-
-
35,592
8,269
15945 Clayton Rd
Clear Lake, TX
-
-
13,882
-
-
13,882
1010 South Ponds Drive
Columbia, MD
-
2,333
19,232
-
2,333
19,232
2,576
10700 Charter Drive
Columbia, MD
-
-
34,930
-
-
34,930
5450 & 5500 Knoll N Drive
Coon Rapids, MN
-
-
26,679
-
27,409
2,007
11850 Blackfoot Street NW
Dade City, FL
-
1,211
5,511
-
1,211
5,511
13413 US Hwy 301
Dallas, TX
-
28,690
2,535
31,225
10,073
9330 Poppy Dr.
Dallas, TX
28,450
52,488
52,491
6,735
7115 Greenville Avenue
Dayton, OH
-
6,919
-
6,919
1,747
1530 Needmore Road
Deerfield Beach, FL
-
2,408
7,809
2,408
7,812
2,555
1192 East Newport Center Drive
Delray Beach, FL
-
1,882
34,767
5,693
2,064
40,278
14,345
5130-5150 Linton Blvd.
Durham, NC
-
1,212
22,858
1,212
22,859
1,583
1823 Hillandale Road
Edina, MN
-
15,132
15,149
3,181
8100 W 78th St
El Paso, TX
-
17,075
2,089
19,164
6,931
2400 Trawood Dr.
Everett, WA
-
4,842
26,010
-
4,842
26,010
4,804
13020 Meridian Ave. S.
Fenton, MO
11,578
27,485
27,727
3,199
1011 Bowles Avenue
Fenton, MO
5,544
13,911
-
13,911
1,110
1055 Bowles Avenue
Flower Mound, TX
-
9,654
-
9,654
2560 Central Park Avenue
Flower Mound, TX
-
4,164
27,529
4,164
27,543
1,857
4370 Medical Arts Drive
Flower Mound, TX
-
4,620
-
-
4,620
-
-
Medical Arts Drive
Fort Wayne, IN
16,135
1,105
22,836
-
1,105
22,836
2,898
7916 Jefferson Boulevard
Fort Worth, TX
-
26,020
-
26,020
1,592
10840 Texas Health Trail
Fort Worth, TX
-
6,099
-
6,099
7200 Oakmont Boulevard
Franklin, TN
-
2,338
12,138
2,184
2,338
14,322
4,398
100 Covey Drive
Franklin, WI
4,942
6,872
7,550
-
6,872
7,550
1,687
9200 W. Loomis Rd.
Frisco, TX
-
-
18,635
1,340
-
19,975
5,794
4401 Coit Road
Frisco, TX
-
-
15,309
2,151
-
17,460
5,914
4461 Coit Road
Gallatin, TN
-
21,801
21,984
5,521
300 Steam Plant Rd
Gig Harbor, WA
-
-
-
30,917
30,837
11511 Canterwood Blvd NW
Glendale, CA
-
18,398
19,159
5,230
222 W. Eulalia St.
Grand Prairie, TX
-
6,086
-
6,086
1,187
2740 N State Hwy 360
Grapevine, TX
5,459
-
5,943
4,778
2,081
8,640
2040 W State Hwy 114
Grapevine, TX
9,882
3,365
15,669
-
3,365
15,669
1,085
2020 W State Hwy 114
Green Bay, WI
6,871
-
14,891
-
-
14,891
2,939
2253 W. Mason St.
Green Bay, WI
-
-
20,098
-
-
20,098
3,891
2845 Greenbrier Road
Green Bay, WI
-
-
11,696
-
-
11,696
3,145
2845 Greenbrier Road
Greeneville, TN
-
10,104
-
10,104
2,403
438 East Vann Rd
Greenwood, IN
-
8,316
26,384
-
8,316
26,384
3,705
1260 Innovation Parkway
Greenwood, IN
-
1,262
7,045
1,262
7,691
333 E County Line Road
Grenwood, IN
-
2,098
21,538
2,098
21,538
1,006
3000 S State Road 135
Harker Heights, TX
-
1,907
3,575
-
1,907
3,575
E Central Texas Expressway
High Point, NC
-
2,659
29,069
2,659
29,230
3,398
4515 Premier Drive
Highland, IL
-
-
8,834
-
-
8,834
12860 Troxler Avenue
Houston, TX
14,000
31,932
32,248
6,083
18100 St John Drive
Houston, TX
-
10,613
-
10,613
1,912
2060 Space Park Drive
Houston, TX
-
10,403
-
-
10,403
-
15655 Cypress Woods Medical Drive
Houston, TX
-
5,837
33,128
5,837
33,129
6,385
15655 Cypress Woods Medical Drive
Houston, TX
-
3,688
13,313
3,688
13,315
1,845
10701 Vintage Preserve Parkway
Houston, TX
-
-
-
75,398
12,815
62,584
6,206
2727 W Holcombe Boulevard
Houston, TX
-
3,102
32,323
3,242
32,824
2,289
1900 N Loop W Freeway
Hudson, OH
-
2,587
13,720
2,587
13,728
2,546
5655 Hudson Drive
Humble, TX
-
-
9,941
-
-
9,941
8233 N. Sam Houston Parkway E.
Jackson, MI
-
17,367
17,389
2,033
1201 E Michigan Avenue
Jupiter, FL
-
2,252
11,415
2,375
2,252
13,790
3,826
550 Heritage Dr.
Jupiter, FL
-
2,825
5,858
2,825
6,424
2,288
600 Heritage Dr.
Kenosha, WI
7,494
-
18,058
-
-
18,058
3,488
10400 75th St.
Killeen, TX
-
22,878
22,898
4,986
2405 Clear Creek Rd
Kyle, TX
-
2,569
14,384
2,569
14,468
1,038
135 Bunton Road
La Jolla, CA
-
12,855
32,658
-
12,855
32,658
4150 Regents Park Row
La Jolla, CA
-
9,425
26,904
-
9,425
26,904
4120 & 4130 La Jolla Village Drive
La Quinta, CA
-
3,266
22,066
3,279
22,169
1,599
47647 Caleo Bay Drive
Lake St Louis, MO
-
14,249
14,298
3,342
400 Medical Dr
Lakeway, TX
-
2,801
-
-
2,801
-
-
Lohmans Crossing Road
Lakewood, CA
-
14,885
1,709
16,594
4,743
5750 Downey Ave.
Lakewood, WA
7,041
16,017
-
16,017
1,873
11307 Bridgeport Way SW
Las Vegas, NV
-
2,319
4,612
1,021
2,319
5,632
1,988
2870 S. Maryland Pkwy.
Las Vegas, NV
-
15,287
1,150
16,437
4,969
1815 E. Lake Mead Blvd.
Las Vegas, NV
-
6,921
7,133
2,464
1776 E. Warm Springs Rd.
Las Vegas, NV
-
6,127
-
6,127
-
SW corner of Deer Springs Way and Riley Street
Lenexa, KS
-
17,926
18,182
3,270
23401 Prairie Star Pkwy
Lenexa, KS
-
14,058
-
14,058
23351 Prairie Star Parkway
Lincoln, NE
-
1,420
29,723
1,420
29,748
7,625
575 South 70th St
Los Alamitos, CA
-
18,635
1,218
19,853
5,625
3771 Katella Ave.
Los Gatos, CA
-
22,386
1,740
24,126
8,383
555 Knowles Dr.
Loxahatchee, FL
-
1,637
5,048
1,719
5,951
2,009
12977 Southern Blvd.
Loxahatchee, FL
-
1,340
6,509
1,440
7,033
2,279
12989 Southern Blvd.
Loxahatchee, FL
-
1,553
4,694
1,018
1,650
5,615
1,791
12983 Southern Blvd.
Marinette, WI
6,036
-
13,538
-
-
13,538
3,146
4061 Old Peshtigo Rd.
Melbourne, FL
-
3,439
50,461
3,439
50,718
3,039
2222 South Harbor City Boulevard
Merced, CA
-
-
14,699
-
14,704
3,274
315 Mercy Ave.
Merriam, KS
-
8,005
8,558
15,965
2,094
8800 West 75th Street
Merriam, KS
-
-
1,996
-
-
1,996
7301 Frontage Street
Merriam, KS
-
-
10,222
-
-
10,222
4,121
8901 West 74th Street
Merriam, KS
-
-
5,862
-
-
5,862
2,059
9119 West 74th Street
Merriam, KS
-
1,226
24,998
-
1,226
24,998
2,449
9301 West 74th Street
Merrillville, IN
-
-
22,134
-
22,766
5,023
101 E. 87th Ave.
Mesa, AZ
-
1,558
9,561
1,558
10,190
3,461
6424 East Broadway Road
Mesquite, TX
-
3,834
-
3,834
1575 I-30
Milwaukee, WI
2,569
8,457
-
8,457
1,767
1218 W. Kilbourn Ave.
Milwaukee, WI
8,962
1,425
11,520
-
1,425
11,520
3,138
3301-3355 W. Forest Home Ave.
Milwaukee, WI
2,242
2,185
-
2,185
840 N. 12th St.
Milwaukee, WI
17,365
-
44,535
-
-
44,535
8,415
2801 W. Kinnickinnic Pkwy.
Mission Hills, CA
25,247
-
42,276
1,090
4,791
38,575
2,886
11550 Indian Hills Road
Moline, IL
-
-
8,783
-
8,812
3900 28th Avenue Drive
Monticello, MN
8,464
18,489
18,510
1,986
1001 Hart Boulevard
Moorestown, NJ
-
50,896
-
50,896
6,324
401 Young Avenue
Mount Juliet, TN
3,016
1,566
11,697
1,118
1,566
12,815
4,326
5002 Crossings Circle
Mount Vernon, IL
-
-
24,892
-
-
24,892
3,195
4121 Veterans Memorial Dr
Murrieta, CA
-
-
47,190
-
47,676
11,011
28078 Baxter Rd.
Murrieta, CA
-
3,800
-
-
3,800
-
-
28078 Baxter Rd.
Muskego, WI
1,078
2,159
-
2,159
S74 W16775 Janesville Rd.
Nashville, TN
-
1,806
7,165
2,036
1,806
9,201
3,416
310 25th Ave. N.
New Albany, IN
-
2,411
16,494
2,411
16,524
2210 Green Valley Road
New Berlin, WI
4,156
3,739
8,290
-
3,739
8,290
1,737
14555 W. National Ave.
Niagara Falls, NY
-
1,433
10,891
1,597
10,998
4,302
6932 - 6934 Williams Rd
Niagara Falls, NY
-
8,362
-
8,362
2,358
6930 Williams Rd
Oklahoma City, OK
-
19,135
19,212
2,553
535 NW 9th Street
Oro Valley, AZ
9,395
18,339
19,084
5,423
1521 E. Tangerine Rd.
Oshkosh, WI
-
-
18,339
-
-
18,339
3,515
855 North Wethaven Dr.
Oshkosh, WI
7,467
-
15,881
-
-
15,881
3,012
855 North Wethaven Dr.
Palm Springs, FL
-
4,066
4,560
1,732
1640 S. Congress Ave.
Palm Springs, FL
-
1,182
7,765
1,182
8,328
2,978
1630 S. Congress Ave.
Palmer, AK
18,345
29,705
1,220
30,925
8,475
2490 South Woodworth Loop
Pasadena, TX
-
1,700
8,009
-
1,700
8,009
5001 E Sam Houston Parkway S
Pearland, TX
-
1,500
11,253
-
1,500
11,253
2515 Business Center Drive
Pearland, TX
-
9,594
32,753
9,807
32,731
1,337
11511 Shadow Creek Parkway
Pendleton, OR
-
-
10,312
-
-
10,312
3001 St. Anthony Drive
Phoenix, AZ
-
1,149
48,018
11,069
1,149
59,087
18,292
2222 E. Highland Ave.
Pineville, NC
-
6,974
2,515
1,077
9,373
3,343
10512 Park Rd.
Plano, TX
-
5,423
20,698
-
5,423
20,698
9,178
6957 Plano Parkway
Plano, TX
52,479
83,209
83,787
13,469
6020 West Parker Road
Plantation, FL
-
8,563
10,666
3,169
8,575
13,823
5,716
851-865 SW 78th Ave.
Plantation, FL
-
8,848
9,262
8,908
9,789
5,824
600 Pine Island Rd.
Plymouth, WI
1,258
1,250
1,870
-
1,250
1,870
2636 Eastern Ave.
Portland, ME
-
25,930
25,943
4,949
195 Fore River Parkway
Redmond, WA
-
5,015
26,709
5,015
26,993
5,122
18000 NE Union Hill Rd.
Reno, NV
-
1,117
21,972
1,999
1,117
23,970
7,123
343 Elm St.
Richmond, VA
-
2,969
26,697
3,004
26,722
4,413
7001 Forest Avenue
Rockwall, TX
-
17,197
17,200
2,862
3142 Horizon Road
Rogers, AR
-
1,062
29,326
-
1,062
29,326
6,007
2708 Rife Medical Lane
Rolla, MO
-
1,931
47,639
-
1,931
47,639
7,480
1605 Martin Spring Drive
Roswell, NM
-
5,851
-
5,851
1,116
601 West Country Club Road
Roswell, NM
4,049
15,984
-
15,984
2,720
350 West Country Club Road
Roswell, NM
-
17,171
17,171
2,333
300 West Country Club Road
Sacramento, CA
-
12,756
1,715
14,471
4,491
8120 Timberlake Way
Salem, NH
-
1,655
14,050
1,655
14,070
1,052
31 Stiles Road
San Antonio, TX
-
1,012
10,545
1,012
11,284
4,482
19016 Stone Oak Pkwy.
San Antonio, TX
-
1,038
9,173
-
1,038
9,173
3,565
540 Stone Oak Centre Drive
San Antonio, TX
18,400
4,518
31,041
4,548
31,373
6,536
5282 Medical Drive
San Antonio, TX
-
17,288
17,591
1,726
3903 Wiseman Boulevard
Santa Clarita, CA
-
-
2,338
19,664
5,196
16,806
1,125
23861 McBean Parkway
Santa Clarita, CA
-
-
28,384
1,580
5,250
24,714
1,705
23929 McBean Parkway
Santa Clarita, CA
-
-
23871 McBean Parkway
Santa Clarita, CA
25,000
40,262
-
40,262
1,525
23803 McBean Parkway
Santa Clarita, CA
-
-
20,618
4,407
16,518
1,219
24355 Lyons Avenue
Santa Clarita, CA
-
9,835
-
1,760
11,595
-
-
23861 McBean Parkway
Sarasota, FL
-
47,325
48,190
6,807
1921 Waldemere Street
Seattle, WA
-
4,410
38,428
4,410
38,786
8,479
5350 Tallman Ave
Sewell, NJ
-
57,929
58,223
16,141
239 Hurffville-Cross Keys Road
Shakopee, MN
6,350
11,412
11,447
2,701
1515 St Francis Ave
Shakopee, MN
10,739
18,089
18,089
3,142
1601 St Francis Ave
Sheboygan, WI
1,737
1,012
2,216
-
1,012
2,216
1813 Ashland Ave.
Shenandoah, TX
-
-
21,135
-
-
21,135
106 Vision Park Boulevard
Sherman Oaks, CA
-
-
32,186
1,902
3,121
30,967
2,097
4955 Van Nuys Boulevard
Somerville, NJ
-
3,400
22,244
3,400
22,246
4,125
30 Rehill Avenue
Southlake, TX
11,680
18,243
18,392
2,896
1545 East Southlake Boulevard
Southlake, TX
17,800
30,549
1,709
32,258
4,276
1545 East Southlake Boulevard
Southlake, TX
-
3,000
-
-
3,000
-
-
Central Avenue
Springfield, IL
5,273
-
-
11,919
1,569
10,350
1100 East Lincolnshire Blvd
Springfield, IL
1,650
-
-
3,696
3,519
2801 Mathers Rd
St Paul, MN
-
37,695
37,978
1,465
225 Smith Avenue N.
St. Louis, MO
-
17,247
1,119
18,366
5,550
2325 Dougherty Rd.
St. Paul, MN
24,781
2,706
39,507
2,704
39,523
7,500
435 Phalen Boulevard
Suffern, NY
-
37,255
37,342
6,695
255 Lafayette Avenue
Suffolk, VA
-
1,566
11,511
1,566
11,537
3,326
5838 Harbour View Blvd.
Sugar Land, TX
8,305
3,543
15,532
-
3,543
15,532
2,643
11555 University Boulevard
Summit, WI
-
2,899
87,666
-
2,899
87,666
22,984
36500 Aurora Dr.
Tacoma, WA
-
-
64,307
-
-
64,307
8,481
1608 South J Street
Tallahassee, FL
-
-
17,449
-
-
17,449
3,575
One Healing Place
Tampa, FL
-
4,318
12,228
-
4,318
12,222
1,672
14547 Bruce B Downs Blvd
Temple, TX
-
2,900
9,954
2,900
9,980
2601 Thornton Lane
Tucson, AZ
-
1,302
4,925
1,325
5,749
2,170
2055 W. Hospital Dr.
Tustin, CA
-
3,345
2,171
-
3,345
2,171
14591 Newport Ave
Tustin, CA
-
3,361
12,039
-
3,361
12,039
14642 Newport Ave
Van Nuys, CA
-
-
36,187
-
-
36,187
6,561
6815 Noble Ave.
Voorhees, NJ
-
6,404
24,251
1,471
6,477
25,649
7,515
900 Centennial Blvd.
Voorhees, NJ
-
96,075
96,152
13,977
200 Bowman Drive
Wellington, FL
-
16,933
2,587
19,325
4,967
10115 Forest Hill Blvd.
Wellington, FL
-
13,697
14,622
3,832
1395 State Rd. 7
West Allis, WI
3,190
1,106
3,309
-
1,106
3,309
11333 W. National Ave.
West Seneca, NY
-
22,435
2,623
1,665
24,310
7,547
550 Orchard Park Rd
Zephyrhills, FL
-
3,875
27,270
-
3,875
27,270
4,063
38135 Market Square Dr
Outpatient medical total:
$
627,689
$
490,437
$
4,274,941
$
278,333
$
535,720
$
4,507,983
$
794,063
Assets held for sale:
Akron, OH
$
-
$
$
20,200
$
-
$
-
$
-
$
-
200 E. Market St.
Amelia Island, FL
-
3,290
24,310
-
-
-
-
48 Osprey Village Dr.
Austin, TX
-
18,970
-
-
-
-
3200 W. Slaughter Lane
Baytown, TX
-
6,150
-
-
-
-
3921 N. Main St.
Baytown, TX
-
11,110
-
-
-
-
2000 West Baker Lane
Bellaire, TX
-
4,551
46,105
-
-
-
-
5410 W. Loop S.
Bellaire, TX
-
2,972
33,445
-
-
-
-
5420 W. Loop S.
Bellevue, WI
-
1,740
18,260
-
-
-
-
1660 Hoffman Rd.
Bellingham, MA
-
9,270
-
-
-
2,156
-
Maple Street and High Street
Bridgeton, MO
-
-
30,221
-
-
-
-
12380 DePaul Drive
Brookline, MA
-
2,760
9,217
-
-
-
-
30 Webster Street
Columbus, OH
-
-
-
6,710
-
6,710
-
750 Mt. Carmel Mall
Coral Springs, FL
-
1,598
10,627
-
-
9,246
-
1725 N. University Dr.
Corpus Christi, TX
-
1,916
-
-
-
-
1101 S. Alameda
DeForest, WI
-
5,350
-
-
-
-
6902 Parkside Circle
Denton, TX
-
-
19,407
-
-
-
-
2900 North I-35
Denver, CO
-
2,530
9,514
-
-
-
-
3701 W. Radcliffe Ave.
Fayetteville, GA
-
7,540
-
-
6,733
-
1275 Hwy. 54 W.
Frisco, TX
-
16,445
-
-
-
-
2990 Legacy Drive
Germantown, TN
-
3,049
12,456
-
-
12,202
-
1325 Wolf Park Drive
Grand Blanc, MI
-
7,843
-
-
-
-
5400 East Baldwin
Greenfield, WI
-
6,626
-
-
-
-
3933 S. Prairie Hill Lane
Greenville, SC
-
5,400
100,523
-
-
-
-
10 Fountainview Terrace
Hattiesburg, MS
-
15,518
-
-
14,089
-
217 Methodist Hospital Blvd
Hermitage, TN
-
1,500
9,856
-
-
10,213
-
4131 Andrew Jackson Parkway
Houston, TX
-
18,715
-
-
-
-
8702 South Course Drive
Houston, TX
-
5,970
-
-
-
-
3625 Green Crest Dr.
Kenosha, WI
-
1,500
9,139
-
-
-
-
6300 67th Street
Lapeer, MI
-
7,625
-
-
-
-
2323 Demille Road
McHenry, IL
-
3,550
15,300
-
-
-
-
3300 Charles Miller Rd.
Melbourne, FL
-
2,540
21,319
-
-
-
-
3260 N Harbor City Blvd
Memphis, TN
-
9,660
-
-
-
-
141 N. McLean Blvd.
Merrillville, IN
-
1,080
3,413
-
-
-
-
300 W. 89th Ave.
Merrillville, IN
-
7,084
-
-
-
-
101 W. 87th Ave.
Millersville, MD
-
1,020
-
-
-
899 Cecil Avenue
Morrow, GA
-
8,064
-
-
5,913
-
6635 Lake Drive
Mount Airy, NC
-
6,430
-
-
-
-
1000 Ridgecrest Lane
Murrieta, CA
-
8,800
202,412
-
-
-
-
28062 Baxter Road
Myrtle Beach, SC
-
6,890
41,526
-
-
-
-
101 Brightwater Dr.
Neenah, WI
-
15,120
-
-
-
-
131 E. North Water St.
Orange Village, OH
-
7,419
-
-
6,096
-
3755 Orange Place
Oshkosh, WI
-
3,800
-
-
-
-
711 Bayshore Drive
Oshkosh, WI
-
23,237
-
-
-
-
631 Hazel Street
Overland Park, KS
-
1,120
8,360
-
-
-
-
7541 Switzer St.
Panama City Beach, FL
-
7,717
-
-
7,716
-
6012 Magnolia Beach Road
Pasadena, TX
-
24,080
-
-
-
-
3434 Watters Rd.
Pawleys Island, SC
-
2,020
32,590
-
-
-
-
120 Lakes at Litchfield Dr.
Saint Simons Island, GA
-
6,440
50,060
-
-
-
-
136 Marsh's Edge Lane
San Antonio, TX
-
7,315
-
-
-
-
5437 Eisenhaur Rd.
San Antonio, TX
-
13,360
-
-
-
-
8503 Mystic Park
Scituate, MA
-
1,740
10,640
-
-
-
-
309 Driftway
Sheboygan, WI
-
5,320
-
-
-
-
4221 Kadlec Dr.
Silver Spring, MD
-
1,150
9,252
-
-
-
-
12325 New Hampshire
Spartanburg, SC
-
3,350
15,750
-
-
-
-
110 Summit Hills Dr.
St. Louis, MO
-
1,890
12,165
-
-
12,472
-
6543 Chippewa St
Tampa, FL
-
-
-
17,685
-
17,685
-
3000 Medical Park Drive
Thomasville, GA
-
13,899
-
-
13,193
-
423 Covington Avenue
Tucson, AZ
-
13,399
-
-
-
-
6211 N. La Cholla Blvd.
Virginia Beach, VA
-
-
-
16,555
-
16,555
-
828 Healthy Way
Waukesha, WI
-
1,100
14,910
-
-
-
-
3217 Fiddlers Creek Dr
Webster, TX
-
5,940
-
-
-
-
17231 Mill Forest
West Palm Beach, FL
-
14,740
-
-
10,762
-
5325 Greenwood Ave.
West Palm Beach, FL
-
14,618
-
-
10,575
-
927 45th St.
Westerville, OH
-
-
-
6,954
-
6,954
-
444 N Cleveland Avenue
Winston-Salem, NC
$
-
$
5,700
$
13,550
$
-
$
-
$
-
$
-
2101 Homestead Hills
Assets held for sale total
$
-
$
106,048
$
1,136,527
$
47,904
$
-
$
169,950
-
Summary:
Triple-net
$
554,014
$
1,003,748
$
10,800,837
$
600,549
$
1,032,860
$
11,372,276
$
1,539,033
Seniors housing operating
2,290,552
972,005
10,569,105
446,629
994,865
10,992,868
1,463,201
Outpatient medical
627,689
490,437
4,274,941
278,333
535,720
4,507,983
794,063
Construction in progress
-
-
258,968
-
-
258,968
-
Total continuing operating properties
3,472,255
2,466,190
25,903,851
1,325,511
2,563,445
27,132,095
3,796,297
Assets held for sale
-
106,048
1,136,527
47,904
-
169,950
-
Total investments in real property owned
$
3,472,255
$
2,572,238
$
27,040,378
$
1,373,415
$
2,563,445
$
27,302,045
$
3,796,297
(1) Please see Note 2 to our consolidated financial statements for information regarding lives used for depreciation and amortization.
(2) Represents real property asset associated with a capital lease.
Year Ended December 31,
Reconciliation of real property:
(in thousands)
Investment in real estate:
Balance at beginning of year
$
25,491,935
$
23,734,733
$
18,082,399
Additions:
Acquisitions
3,364,891
2,210,600
3,597,955
Improvements
445,625
380,298
408,844
Assumed other items, net
389,256
160,897
772,972
Assumed debt
1,064,810
265,152
1,340,939
Total additions
5,264,582
3,016,947
6,120,710
Deductions:
Cost of real estate sold
(449,932)
(916,997)
(498,564)
Reclassification of accumulated depreciation and amortization for assets held for sale
(41,464)
(64,476)
(3,730)
Impairment of assets
(2,220)
-
-
Total deductions
(493,616)
(981,473)
(502,294)
Foreign currency translation
(397,411)
(278,272)
33,918
Balance at end of year(1)
$
29,865,490
$
25,491,935
$
23,734,733
Accumulated depreciation:
Balance at beginning of year
$
3,020,908
$
2,386,658
$
1,555,055
Additions:
Depreciation and amortization expenses
826,240
844,130
873,960
Amortization of above market leases
11,912
7,935
7,831
Total additions
838,152
852,065
881,791
Deductions:
Sale of properties
(69,735)
(123,582)
(49,625)
Reclassification of accumulated depreciation and amortization for assets held for sale
(41,464)
(64,476)
(3,730)
Total deductions
(111,199)
(188,058)
(53,355)
Foreign currency translation
48,436
(29,757)
3,167
Balance at end of year
$
3,796,297
$
3,020,908
$
2,386,658
(1) The aggregate cost for tax purposes for real property equals $19,159,762,000, $21,621,760,000, and $20,260,297,000 at December 31, 2015, 2014 and 2013, respectively.
Welltower Inc.
Schedule IV - Mortgage Loans on Real Estate
December 31, 2015
(in thousands)
Location
Segment
Interest Rate
Final Maturity Date
Monthly Payment Terms
Prior Liens
Face Amount of Mortgages
Carrying Amount of Mortgages
Principal Amount of Loans Subject to Delinquent Principal or Interest
First mortgages relating to 1 property located in:
California
Outpatient Medical
6.08%
12/22/17
$
309,681
$
-
$
65,000
$
60,902
$
-
United Kingdom
Triple-Net
7.00%
04/19/18
127,412
-
21,382
21,382
-
United Kingdom
Triple-Net
7.00%
11/21/18
121,437
-
20,497
20,497
-
Massachusetts
Triple-Net
7.86%
12/31/16
35,434
-
21,000
5,316
-
United Kingdom
Triple-Net
7.00%
12/31/19
55,858
-
27,133
9,737
-
United Kingdom
Triple-Net
8.25%
06/11/19
14,973
-
15,262
2,216
-
United Kingdom
Triple-Net
8.00%
07/31/19
4,737
-
22,119
1,629
-
United Kingdom
Triple-Net
8.50%
05/01/16
39,496
-
9,721
6,429
-
United Kingdom
Triple-Net
7.54%
07/31/15
9,437
-
3,097
1,474
-
Oklahoma
Triple-Net
8.42%
10/28/19
59,007
-
11,610
8,719
-
Oregon
Triple-Net
7.10%
05/01/16
1,357
-
-
Pennsylvania
Triple-Net
7.10%
03/01/16
1,479
-
-
Texas
Triple-Net
8.00%
02/28/21
53,507
-
7,875
7,875
-
First mortgage relating to multiple properties:
Four properties in the United Kingdom
Triple-Net
7.50%
11/30/19
$
85,135
$
-
$
13,742
$
13,409
$
-
49 properties in seven states
Triple-Net
9.75%
02/28/17
2,589,041
-
360,000
305,833
-
15 properties in eight states
Triple-Net
8.00%
11/30/17
440,877
-
171,090
134,100
-
Second mortgages relating to 1 property located in:
Connecticut
Triple-Net
8.11%
04/01/18
$
39,658
$
16,009
$
5,961
$
5,961
$
-
Texas
Triple-Net
12.17%
05/01/19
31,009
11,489
3,100
3,100
-
Florida
Triple-Net
12.17%
07/01/18
27,008
9,283
2,700
2,700
-
Florida
Triple-Net
12.17%
11/01/18
27,008
11,654
2,700
2,700
-
Indiana
Triple-Net
10.50%
04/01/19
25,264
11,211
2,887
2,887
-
Indiana
Triple-Net
10.50%
04/01/19
17,320
8,202
1,979
1,979
-
Kansas
Triple-Net
10.50%
09/19/19
15,403
1,228
1,760
1,760
-
Texas
Triple-Net
10.50%
11/01/19
17,123
-
1,957
1,957
-
Second mortgage relating to multiple properties:
Five properties in three states
Triple-Net
10.00%
12/30/18
$
212,329
$
51,467
$
25,000
$
12,455
$
-
Totals
$
120,543
$
818,047
$
635,492
$
-
Year Ended December 31,
Reconciliation of mortgage loans:
(in thousands)
Balance at beginning of year
$
188,651
$
146,987
$
87,955
Additions:
New mortgage loans
524,088
113,996
68,530
Draws on existing loans
30,550
26,330
-
Total additions
554,638
140,326
68,530
Deductions:
Collections of principal
(80,552)
(49,974)
(8,790)
Conversions to real property
(23,288)
(45,836)
-
Charge-offs
-
-
(2,110)
Total deductions
(103,840)
(95,810)
(10,900)
Change in balance due to foreign currency translation
(3,957)
(2,852)
1,402
Balance at end of year
$
635,492
$
188,651
$
146,987
EXHIBIT INDEX
1.1(a) Form of Equity Distribution Agreement, dated as of November 12, 2010, entered into by and between the Company and each of UBS Securities LLC, RBS Securities Inc., KeyBanc Capital Markets Inc. and Credit Agricole Securities (USA) Inc. (filed with the Commission as Exhibit 1.1 to the Company’s Form 8-K filed November 15, 2010 (File No. 001-08923), and incorporated herein by reference thereto).
1.1(b) Form of Amendment No. 1, dated September 1, 2011, to the Equity Distribution Agreements entered into by and between the Company and each of UBS Securities LLC, RBS Securities Inc., KeyBanc Capital Markets Inc. and Credit Agricole Securities (USA) Inc. (filed with the Commission as Exhibit 1.1 to the Company’s Form 8-K filed September 8, 2011 (File No. 001-08923), and incorporated herein by reference thereto).
1.1(c) Form of Amendment No. 2, dated August 5, 2015, to the Equity Distribution Agreements entered into by and between the Company and each of UBS Securities LLC, KeyBanc Capital Markets Inc. and Credit Agricole Securities (USA) Inc. (filed with the Commission as Exhibit 1.3 to the Company’s Form 8-K filed August 5, 2015 (File No. 001-08923), and incorporated herein by reference thereto).
3.1(a) Second Restated Certificate of Incorporation of the Company (filed with the Commission as Exhibit 3.1 to the Company’s Form 10-K filed March 20, 2000 (File No. 001-08923), and incorporated herein by reference thereto).
3.1(b) Certificate of Amendment of Second Restated Certificate of Incorporation of the Company (filed with the Commission as Exhibit 3.1 to the Company’s Form 10-K filed March 20, 2000 (File No. 001-08923), and incorporated herein by reference thereto).
3.1(c) Certificate of Amendment of Second Restated Certificate of Incorporation of the Company (filed with the Commission as Exhibit 3.1 to the Company’s Form 8-K filed June 13, 2003 (File No. 001-08923), and incorporated herein by reference thereto).
3.1(d) Certificate of Amendment of Second Restated Certificate of Incorporation of the Company (filed with the Commission as Exhibit 3.9 to the Company’s Form 10-Q filed August 9, 2007 (File No. 001-08923), and incorporated herein by reference thereto).
3.1(e) Certificate of Change of Location of Registered Office and of Registered Agent of the Company (filed with the Commission as Exhibit 3.1 to the Company’s Form 10-Q filed August 6, 2010 (File No. 001-08923), and incorporated herein by reference thereto).
3.1(f) Certificate of Designation of 6.50% Series I Cumulative Convertible Perpetual Preferred Stock of the Company (filed with the Commission as Exhibit 3.1 to the Company’s Form 8-K filed March 7, 2011 (File No. 001-08923), and incorporated herein by reference thereto).
3.1(g) Certificate of Amendment of Second Restated Certificate of Incorporation of the Company (filed with the Commission as Exhibit 3.1 to the Company’s Form 8-K filed May 10, 2011 (File No. 001-08923), and incorporated herein by reference thereto).
3.1(h) Certificate of Designation of 6.50% Series J Cumulative Redeemable Preferred Stock of the Company (filed with the Commission as Exhibit 3.1 to the Company’s Form 8-K filed March 8, 2012 (File No. 001-08923), and incorporated herein by reference thereto).
3.1(i) Certificate of Amendment of Second Restated Certificate of Incorporation of the Company (filed with the Commission as Exhibit 3.1 to the Company’s Form 8-K filed May 6, 2014 (File No. 001-08923), and incorporated herein by reference thereto).
3.1(j) Certificate of Amendment of Second Restated Certificate of Incorporation of the Company (filed with the Commission as Exhibit 3.1 to the Company’s Form 8-K filed September 30, 2015 (File No. 001-08923), and incorporated herein by reference thereto).
3.2 Fifth Amended and Restated By-Laws of the Company (filed with the Commission as Exhibit 3.2 to the Company’s Form 10-Q filed October 30, 2015 (File No. 001-08923), and incorporated herein by reference thereto).
4.1(a) Indenture for Senior Debt Securities, dated as of September 6, 2002, between the Company and Fifth Third Bank (filed with the Commission as Exhibit 4.1 to the Company’s Form 8-K filed September 9, 2002 (File No. 001-08923), and incorporated herein by reference thereto).
4.1(b) Supplemental Indenture No. 1, dated as of September 6, 2002, to Indenture for Senior Debt Securities, dated as of September 6, 2002, between the Company and Fifth Third Bank (filed with the Commission as Exhibit 4.2 to the Company’s Form 8-K filed September 9, 2002 (File No. 001-08923), and incorporated herein by reference thereto).
4.1(c) Amendment No. 1, dated March 12, 2003, to Supplemental Indenture No. 1, dated as of September 6, 2002, to Indenture for Senior Debt Securities, dated as of September 6, 2002, between the Company and Fifth Third Bank (filed with the Commission as Exhibit 4.1 to the Company’s Form 8-K filed March 14, 2003 (File No. 001-08923), and incorporated herein by reference thereto).
4.1(d) Supplemental Indenture No. 2, dated as of September 10, 2003, to Indenture for Senior Debt Securities, dated as of September 6, 2002, between the Company and Fifth Third Bank (filed with the Commission as Exhibit 4.2 to the Company’s Form 8-K filed September 24, 2003 (File No. 001-08923), and incorporated herein by reference thereto).
4.1(e) Amendment No. 1, dated September 16, 2003, to Supplemental Indenture No. 2, dated as of September 10, 2003, to Indenture for Senior Debt Securities, dated as of September 6, 2002, between the Company and Fifth Third Bank (filed with the Commission as Exhibit 4.4 to the Company’s Form 8-K filed September 24, 2003 (File No. 001-08923), and incorporated herein by reference thereto).
4.1(f) Supplemental Indenture No. 3, dated as of October 29, 2003, to Indenture for Senior Debt Securities, dated as of September 6, 2002, between the Company and Fifth Third Bank (filed with the Commission as Exhibit 4.1 to the Company’s Form 8-K filed October 30, 2003 (File No. 001-08923), and incorporated herein by reference thereto).
4.1(g) Amendment No. 1, dated September 13, 2004, to Supplemental Indenture No. 3, dated as of October 29, 2003, to Indenture for Senior Debt Securities, dated as of September 6, 2002, between the Company and The Bank of New York Trust Company, N.A., as successor to Fifth Third Bank (filed with the Commission as Exhibit 4.1 to the Company’s Form 8-K filed September 13, 2004 (File No. 001-08923), and incorporated herein by reference thereto).
4.1(h) Supplemental Indenture No. 4, dated as of April 27, 2005, to Indenture for Senior Debt Securities, dated as of September 6, 2002, between the Company and The Bank of New York Trust Company, N.A. (filed with the Commission as Exhibit 4.1 to the Company’s Form 8-K filed April 28, 2005 (File No. 001-08923), and incorporated herein by reference thereto).
4.1(i) Supplemental Indenture No. 5, dated as of November 30, 2005, to Indenture for Senior Debt Securities, dated as of September 6, 2002, between the Company and The Bank of New York Trust Company, N.A. (filed with the Commission as Exhibit 4.1 to the Company’s Form 8-K filed November 30, 2005 (File No. 001-08923), and incorporated herein by reference thereto).
4.2(a) Indenture, dated as of March 15, 2010, between the Company and The Bank of New York Mellon Trust Company, N.A. (filed with the Commission as Exhibit 4.1 to the Company’s Form 8-K filed March 15, 2010 (File No. 001-08923), and incorporated herein by reference thereto).
4.2(b) Supplemental Indenture No. 1, dated as of March 15, 2010, between the Company and The Bank of New York Mellon Trust Company, N.A. (filed with the Commission as Exhibit 4.2 to the Company’s Form 8-K filed March 15, 2010 (File No. 001-08923), and incorporated herein by reference thereto).
4.2(c) Amendment No. 1 to Supplemental Indenture No. 1, dated as of June 18, 2010, between the Company and The Bank of New York Mellon Trust Company, N.A. (filed with the Commission as Exhibit 4.3 to the Company’s Form 8-K filed June 18, 2010 (File No. 001-08923), and incorporated herein by reference thereto).
4.2(d) Supplemental Indenture No. 2, dated as of April 7, 2010, between the Company and The Bank of New York Mellon Trust Company, N.A. (filed with the Commission as Exhibit 4.2 to the Company’s Form 8-K filed April 7, 2010 (File No. 001-08923), and incorporated herein by reference thereto).
4.2(e) Amendment No. 1 to Supplemental Indenture No. 2, dated as of June 8, 2010, between the Company and The Bank of New York Mellon Trust Company, N.A. (filed with the Commission as Exhibit 4.3 to the Company’s Form 8-K filed June 8, 2010 (File No. 001-08923), and incorporated herein by reference thereto).
4.2(f) Supplemental Indenture No. 3, dated as of September 10, 2010, between the Company and The Bank of New York Mellon Trust Company, N.A. (filed with the Commission as Exhibit 4.2 to the Company’s Form 8-K filed September 13, 2010 (File No. 001-08923), and incorporated herein by reference thereto).
4.2(g) Supplemental Indenture No. 4, dated as of November 16, 2010, between the Company and The Bank of New York Mellon Trust Company, N.A. (filed with the Commission as Exhibit 4.2 to the Company’s Form 8-K filed November 16, 2010 (File No. 001-08923), and incorporated herein by reference thereto).
4.2(h) Supplemental Indenture No. 5, dated as of March 14, 2011, between the Company and The Bank of New York Mellon Trust Company, N.A. (filed with the Commission as Exhibit 4.2 to the Company’s Form 8-K filed March 14, 2011 (File No. 001-08923), and incorporated herein by reference thereto).
4.2(i) Supplemental Indenture No. 6, dated as of April 3, 2012, between the Company and The Bank of New York Mellon Trust Company, N.A. (filed with the Commission as Exhibit 4.2 to the Company’s Form 8-K filed April 4, 2012 (File No. 001-08923), and incorporated herein by reference thereto).
4.2(j) Supplemental Indenture No. 7, dated as of December 6, 2012, between the Company and The Bank of New York Mellon Trust Company, N.A. (filed with the Commission as Exhibit 4.2 to the Company’s Form 8-K filed December 11, 2012 (File No. 001-08923), and incorporated herein by reference thereto).
4.2(k) Supplemental Indenture No. 8, dated as of October 7, 2013, between the Company and The Bank of New York Mellon Trust Company, N.A. (filed with the Commission as Exhibit 4.2 to the Company’s Form 8-K filed October 9, 2013 (File No. 001-08923), and incorporated herein by reference thereto).
4.2(l) Supplemental Indenture No. 9, dated as of November 20, 2013, between the Company and The Bank of New York Mellon Trust Company, N.A. (filed with the Commission as Exhibit 4.2 to the Company’s Form 8-K filed November 20, 2013 (File No. 001-08923), and incorporated herein by reference thereto).
4.2(m) Supplemental Indenture No. 10, dated as of November 25, 2014, between the Company and The Bank of New York Mellon Trust Company, N.A. (filed with the Commission as Exhibit 4.2 to the Company’s Form 8-K filed November 25, 2014 (File No. 001-08923), and incorporated herein by reference thereto).
4.2(n) Supplemental Indenture No. 11, dated as of May 26, 2015, between the Company and The Bank of New York Mellon Trust Company, N.A. (filed with the Commission as Exhibit 4.2 to the Company’s Form 8-K filed May 27, 2015 (File No. 001-08923), and incorporated herein by reference thereto).
4.2(o) Amendment No. 1 to Supplemental Indenture No. 11, dated as of October 19, 2015, between the Company and The Bank of New York Mellon Trust Company, N.A. (filed with the Commission as Exhibit 4.3 to the Company’s Form 8-K filed October 20, 2015 (File No. 001-08923), and incorporated herein by reference thereto).
4.3 Form of Indenture for Senior Subordinated Debt Securities (filed with the Commission as Exhibit 4.9 to the Company’s Form S-3 (File No. 333-73936) filed November 21, 2001, and incorporated herein by reference thereto).
4.4 Form of Indenture for Junior Subordinated Debt Securities (filed with the Commission as Exhibit 4.10 to the Company’s Form S-3 (File No. 333-73936) filed November 21, 2001, and incorporated herein by reference thereto).
4.5(a) Indenture, dated as of November 25, 2015, by and among HCN Canadian Holdings-1 LP, the Company and BNY Trust Company of Canada.
4.5(b) First Supplemental Indenture, dated as of November 25, 2015, by and among HCN Canadian Holdings-1 LP, the Company and BNY Trust Company of Canada.
10.1 Credit Agreement dated as of July 25, 2014 by and among the Company; the lenders listed therein; KeyBank National Association, as administrative agent, L/C issuer and a swingline lender; Bank of America, N.A. and JPMorgan Chase Bank, N.A., as co-syndication agents; Deutsche Bank Securities Inc., as documentation agent; Merrill Lynch, Pierce, Fenner & Smith Incorporated, J.P. Morgan Securities LLC, KeyBanc Capital Markets Inc. and Deutsche Bank Securities Inc., as U.S. joint lead arrangers; Merrill Lynch, Pierce, Fenner & Smith Incorporated, J.P. Morgan Securities LLC and RBC Capital Markets, as Canadian joint lead arrangers; and Merrill Lynch, Pierce, Fenner & Smith Incorporated and J.P. Morgan Securities LLC, as joint book runners (filed with the Commission as Exhibit 10.1 to the Company’s Form 8-K filed July 31, 2014 (File No. 001-08923), and incorporated herein by reference thereto).
10.2 Equity Purchase Agreement, dated as of February 28, 2011, by and among the Company, FC-GEN Investment, LLC and FC-GEN Operations Investment, LLC (filed with the Commission as Exhibit 10.1 to the Company’s Form 8-K filed February 28, 2011 (File No. 001-08923), and incorporated herein by reference thereto).
10.3(a) Amended and Restated Health Care REIT, Inc. 2005 Long-Term Incentive Plan (filed with the Commission as Appendix A to the Company’s Proxy Statement for the 2009 Annual Meeting of Stockholders, filed March 25, 2009 (File No. 001-08923), and incorporated herein by reference thereto).*
10.3(b) Form of Stock Option Agreement (with Dividend Equivalent Rights) for the Chief Executive Officer under the 2005 Long-Term Incentive Plan (filed with the Commission as Exhibit 10.18 to the Company’s Form 10-K filed March 10, 2006 (File No. 001-08923), and incorporated herein by reference thereto).*
10.3(c) Form of Amendment to Stock Option Agreements (with Dividend Equivalent Rights) for the Chief Executive Officer under the 2005 Long-Term Incentive Plan (filed with the Commission as Exhibit 10.6 to the Company’s Form 8-K filed January 5, 2009 (File No. 001-08923), and incorporated herein by reference thereto).*
10.3(d) Form of Stock Option Agreement (with Dividend Equivalent Rights) for the Chief Executive Officer under the 2005 Long-Term Incentive Plan (filed with the Commission as Exhibit 10.8 to the Company’s Form 8-K filed January 5, 2009 (File No. 001-08923), and incorporated herein by reference thereto).*
10.3(e) Form of Stock Option Agreement (with Dividend Equivalent Rights) for Executive Officers under the 2005 Long-Term Incentive Plan (filed with the Commission as Exhibit 10.19 to the Company’s Form 10-K filed March 10, 2006 (File No. 001-08923), and incorporated herein by reference thereto).*
10.3(f) Form of Amendment to Stock Option Agreements (with Dividend Equivalent Rights) for Executive Officers under the 2005 Long-Term Incentive Plan (filed with the Commission as Exhibit 10.7 to the Company’s Form 8-K filed January 5, 2009 (File No. 001-08923), and incorporated herein by reference thereto).*
10.3(g) Form of Stock Option Agreement (with Dividend Equivalent Rights) for Executive Officers under the 2005 Long-Term Incentive Plan (filed with the Commission as Exhibit 10.9 to the Company’s Form 8-K filed January 5, 2009 (File No. 001-08923), and incorporated herein by reference thereto).*
10.3(h) Form of Stock Option Agreement (without Dividend Equivalent Rights) for the Chief Executive Officer under the 2005 Long-Term Incentive Plan (filed with the Commission as Exhibit 10.20 to the Company’s Form 10-K filed March 10, 2006 (File No. 001-08923), and incorporated herein by reference thereto).*
10.3(i) Form of Stock Option Agreement (without Dividend Equivalent Rights) for the Chief Executive Officer under the Amended and Restated 2005 Long-Term Incentive Plan (filed with the Commission as Exhibit 10.1 to the Company’s Form 10-Q filed May 10, 2010 (File No. 001-08923), and incorporated herein by reference thereto).*
10.3(j) Form of Stock Option Agreement (without Dividend Equivalent Rights) for Executive Officers under the 2005 Long-Term Incentive Plan (filed with the Commission as Exhibit 10.21 to the Company’s Form 10-K filed March 10, 2006 (File No. 001-08923), and incorporated herein by reference thereto).*
10.3(k) Form of Stock Option Agreement (without Dividend Equivalent Rights) for Executive Officers under the Amended and Restated 2005 Long-Term Incentive Plan (filed with the Commission as Exhibit 10.2 to the Company’s Form 10-Q filed May 10, 2010 (File No. 001-08923), and incorporated herein by reference thereto).*
10.3(l) Form of Restricted Stock Agreement for the Chief Executive Officer under the 2005 Long-Term Incentive Plan (filed with the Commission as Exhibit 10.22 to the Company’s Form 10-K filed March 10, 2006 (File No. 001-08923), and incorporated herein by reference thereto).*
10.3(m) Form of Restricted Stock Agreement for Executive Officers under the 2005 Long-Term Incentive Plan (filed with the Commission as Exhibit 10.23 to the Company’s Form 10-K filed March 10, 2006 (File No. 001-08923), and incorporated herein by reference thereto).*
10.3(n) Form of Restricted Stock Agreement for the Chief Executive Officer under the Amended and Restated 2005 Long-Term Incentive Plan (filed with the Commission as Exhibit 10.3 to the Company’s Form 10-Q filed May 10, 2010 (File No. 001-08923), and incorporated herein by reference thereto).*
10.3(o) Form of Restricted Stock Agreement for Executive Officers under the Amended and Restated 2005 Long-Term Incentive Plan (filed with the Commission as Exhibit 10.4 to the Company’s Form 10-Q filed May 10, 2010 (File No. 001-08923), and incorporated herein by reference thereto).*
10.3(p) Form of Deferred Stock Unit Grant Agreement for Non-Employee Directors under the 2005 Long-Term Incentive Plan (filed with the Commission as Exhibit 10.24 to the Company’s Form 10-K filed March 10, 2006 (File No. 001-08923), and incorporated herein by reference thereto).*
10.3(q) Form of Amendment to Deferred Stock Unit Grant Agreements for Non-Employee Directors under the 2005 Long-Term Incentive Plan (filed with the Commission as Exhibit 10.10 to the Company’s Form 8-K filed January 5, 2009 (File No. 001-08923), and incorporated herein by reference thereto).*
10.3(r) Form of Deferred Stock Unit Grant Agreement for Non-Employee Directors under the 2005 Long-Term Incentive Plan (filed with the Commission as Exhibit 10.11 to the Company’s Form 8-K filed January 5, 2009 (File No. 001-08923), and incorporated herein by reference thereto).*
10.3(s) Form of Deferred Stock Unit Grant Agreement for Non-Employee Directors under the Amended and Restated 2005 Long-Term Incentive Plan (filed with the Commission as Exhibit 10.5 to the Company’s Form 10-Q filed May 10, 2010 (File No. 001-08923), and incorporated herein by reference thereto).*
10.4 Retirement and Consulting Agreement, dated April 13, 2014, between the Company and George L. Chapman (filed with the Commission as Exhibit 10.1 to the Company’s Form 10-Q filed May 8, 2014 (File No. 001-08923), and incorporated herein by reference thereto).*
10.5(a) Amended and Restated Employment Agreement, dated December 28, 2014, between the Company and Thomas J. DeRosa.*
10.5(b) Performance-Based Restricted Stock Unit Grant Agreement, dated effective as of July 30, 2014, between the Company and Thomas J. DeRosa (filed with the Commission as Exhibit 10.2 to the Company’s Form 10-Q filed November 4, 2014 (File No. 001-08923), and incorporated herein by reference thereto).*
10.6 Second Amended and Restated Employment Agreement, dated December 29, 2008, between the Company and Scott A. Estes (filed with the Commission as Exhibit 10.4 to the Company’s Form 8-K filed January 5, 2009 (File No. 001-08923), and incorporated herein by reference thereto).*
10.7(a) Executive Retirement Agreement, effective July 1, 2015, between the Company and Charles J. Herman, Jr. (filed with the Commission as Exhibit 10.1 to the Company’s Form 10-Q filed August 4, 2015 (File No. 001-08923), and incorporated herein by reference thereto).*
10.7(b) Consulting Agreement, effective July 1, 2015, between the Company and Charles J. Herman, Jr. (filed with the Commission as Exhibit 10.2 to the Company’s Form 10-Q filed August 4, 2015 (File No. 001-08923), and incorporated herein by reference thereto).*
10.8 Amended and Restated Employment Agreement, dated December 29, 2008, between the Company and Jeffrey H. Miller (filed with the Commission as Exhibit 10.8 to the Company’s Form 10-K filed March 2, 2009 (File No. 001-08923), and incorporated herein by reference thereto).*
10.9 Employment Agreement, dated March 11, 2013, by and between the Company and Scott M. Brinker (filed with the Commission as Exhibit 10.3 to the Company’s Form 10-Q filed May 7, 2013 (File No. 001-08923), and incorporated herein by reference thereto).*
10.10 Third Amended and Restated Employment Agreement, dated December 29, 2008, between the Company and Erin C. Ibele (filed with the Commission as Exhibit 10.11 to the Company’s Form 10-K filed March 2, 2009 (File No. 001-08923), and incorporated herein by reference thereto).*
10.11 Amended and Restated Health Care REIT, Inc. Supplemental Executive Retirement Plan, dated December 29, 2008 (filed with the Commission as Exhibit 10.12 to the Company’s Form 8-K filed January 5, 2009 (File No. 001-08923), and incorporated herein by reference thereto).*
10.12 Form of Indemnification Agreement between the Company and each director, executive officer and officer of the Company (filed with the Commission as Exhibit 10.1 to the Company’s Form 8-K filed February 18, 2005 (File No. 001-08923), and incorporated herein by reference thereto).*
10.13 Summary of Director Compensation (filed with the Commission as Exhibit 10.13 to the Company’s Form 10-K filed February 20, 2015 (File No. 001-08923), and incorporated herein by reference thereto).*
10.14 Health Care REIT, Inc. 2013-2015 Long-Term Incentive Program, as Amended and Restated (filed with the Commission as Exhibit 10.3 to the Company’s Form 10-Q filed May 8, 2014 (File No. 001-08923), and incorporated herein by reference thereto).*
10.15(a) Health Care REIT, Inc. 2015-2017 Long-Term Incentive Program (filed with the Commission as Exhibit 10.3 to the Company’s Form 10-Q filed August 4, 2015 (File No. 001-08923), and incorporated herein by reference thereto).*
10.15(b) Form of Performance Restricted Stock Unit Award Agreement under the 2015-2017 Long-Term Incentive Program (filed with the Commission as Exhibit 10.4 to the Company’s Form 10-Q filed August 4, 2015 (File No. 001-08923), and incorporated herein by reference thereto).*
12 Statement Regarding Computation of Ratio of Earnings to Fixed Charges and Ratio of Earnings to Combined Fixed Charges and Preferred Stock Dividends (Unaudited).
21 Subsidiaries of the Company.
23 Consent of Ernst & Young LLP, independent registered public accounting firm.
24 Powers of Attorney.
31.1 Rule 13a-14(a)/15d-14(a) Certification of Chief Executive Officer.
31.2 Rule 13a-14(a)/15d-14(a) Certification of Chief Financial Officer.
32.1 Certification pursuant to 18 U.S.C. Section 1350 by Chief Executive Officer.
32.2 Certification pursuant to 18 U.S.C. Section 1350 by Chief Financial Officer.
101.INS XBRL Instance Document**
101.SCH XBRL Taxonomy Extension Schema Document**
101.CAL XBRL Taxonomy Extension Calculation Linkbase Document**
101.LAB XBRL Taxonomy Extension Label Linkbase Document**
101.PRE XBRL Taxonomy Extension Presentation Linkbase Document**
101.DEF XBRL Taxonomy Extension Definition Linkbase Document**
*
Management Contract or Compensatory Plan or Arrangement.
**
Attached as Exhibit 101 to this Annual Report on Form 10-K are the following materials, formatted in XBRL (eXtensible Business Reporting Language): (i) the Consolidated Balance Sheets at December 31, 2015 and 2014, (ii) the Consolidated Statements of Comprehensive Income for the years ended December 31, 2015, 2014 and 2013, (iii) the Consolidated Statements of Equity for the years ended December 31, 2015, 2014 and 2013, (iv) the Consolidated Statements of Cash Flows for the years ended December 31, 2015, 2014 and 2013, (v) the Notes to Consolidated Financial Statements, (vi) Schedule III - Real Estate and Accumulated Depreciation and (vii) Schedule IV - Mortgage Loans on Real Estate.

Market Capitalization: 20765678.507995605
1-Year Return: 0.03803293034434319
252-Day Return: $252_day_return