SEC Form 10-K Filing Report

Company: HEALTH CARE REIT INC /DE/
CIK: 766704
SIC Code: 6798
Filing Date: 2015-02-20 00:00:00
Market Capitalization: 25574956.69998169

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ITEM 1. BUSINESS
Item 1. Business
General
Health Care REIT, Inc. is a real estate investment trust (“REIT”) that has been at the forefront of seniors housing and health care real estate since the company was founded in 1970. We are an S&P 500 company headquartered in Toledo, Ohio. Our portfolio spans the full spectrum of seniors housing and health care real estate, including seniors housing communities, long-term/post-acute care facilities, medical office buildings, inpatient and outpatient medical centers and life science facilities. 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.hcreit.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, customer 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 Health Care REIT, 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, 2014.
Property Types
We invest in seniors housing and health care real estate and evaluate our business on three reportable segments: seniors housing triple-net, seniors housing operating and medical facilities. 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.
Seniors Housing Triple-Net
Our seniors housing triple-net properties include independent living facilities, independent supportive living facilities (Canada), continuing care retirement communities, assisted living facilities, care homes with and without nursing, Alzheimer’s/dementia facilities, long-term/post-acute care facilities, hospitals and combinations thereof. 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 federal 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 United States 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 outpatient services, including, but not limited to, surgery, rehabilitation, therapy and clinical laboratories.
Our seniors housing triple-net segment accounted for 31%, 31% and 46% of total revenues (including discontinued operations) for the years ended December 31, 2014, 2013 and 2012, respectively. We lease 181 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 the ground leases. All obligations under the master lease have been guaranteed by FC-GEN Operations Investment, LLC. For the year ended December 31, 2014, our lease with Genesis accounted for approximately 31% of our seniors housing triple-net segment revenues and 9% 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 - Seniors Housing 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 for more information.
Our seniors housing operating segment accounted for 57%, 56% and 37% of total revenues (including discontinued operations) for the years ended December 31, 2014, 2013 and 2012, respectively. We have relationships with ten operators to own and operate 297 facilities (plus 55 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, 2014, our relationship with Sunrise Senior Living accounted for approximately 47% of our seniors housing operating segment revenues and 27% of our total revenues.
Medical Facilities
Our medical facilities include medical office buildings and life science facilities. We typically lease our medical office buildings to multiple tenants and provide varying levels of property management. Our life science investment represents an investment in an unconsolidated joint venture entity (see Note 7 to our consolidated financial statements). Our medical facilities segment accounted for 12%, 13% and 17% of total revenues (including discontinued operations) for the years ended December 31, 2014, 2013 and 2012, respectively. No single tenant exceeds 20% of segment revenues.
Medical Office Buildings. The medical office 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 medical office building portfolio is affiliated with health systems (with buildings on hospital campuses or serving as satellite locations for the health system and their physicians).
Life Science Facilities. The life science portfolio consists of laboratory and office facilities specifically designed and constructed for use by biotechnology and pharmaceutical companies. These facilities are 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.
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 medical office building 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 seniors housing 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, 2014, approximately 89% of our seniors housing 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 medical office building 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, 2014, 85% of our portfolio included leases with full pass through, 13% with a partial expense reimbursement (modified gross) and 2% with no expense reimbursement (gross). Our medical office building leases are non-cancellable operating leases that have a weighted-average remaining term of eight years at December 31, 2014 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, 2014, we had outstanding construction investments of $186,327,000 and were committed to provide additional funds of approximately $227,618,000 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, 2014, we had outstanding real estate loans of $380,169,000. The interest yield averaged approximately 8.2% 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, 2014 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. Our investments in unconsolidated entities generally represent interests ranging from 10% to 50% in real estate assets. Investments in less than majority owned entities are reported under the equity method of accounting when our interests represent either (1) general partnership interests subject to substantive participating or kick-out rights that have been granted to the limited partners, or (2) limited partnership interests with no control over major operating and financial policies of the entities. 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 interests, 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 “

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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.
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, 2014, consisted of 140 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 late January 2015, 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 to 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” 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
As a result of our acquisition of shares in Senior Housing Realty Trust (“SHRT”), we own a minority interest in an entity which elected to be taxed as a REIT for federal income tax purposes. Additionally, we own substantially all of the outstanding stock of a subsidiary which we consolidate for financial reporting purposes but which is treated as a separate REIT for federal income tax purposes (together with SHRT, 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.

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

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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 Florida, California 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, 2014 (dollars in thousands and annualized revenues adjusted for timing of investment):
Seniors Housing Triple-Net
Seniors Housing Operating
Property Location
Number of Properties
Total Investment
Annualized Revenues
Number of Properties
Total Investment
Annualized Revenues
Alabama
$
36,941
$
3,765
-
$
-
$
-
Arizona
6,963
63,984
22,847
California
532,723
54,606
1,343,848
373,773
Colorado
76,048
9,645
148,070
37,734
Connecticut
179,783
19,647
327,746
112,555
District Of Columbia
-
-
-
66,257
13,790
Delaware
164,414
18,231
22,165
5,420
Florida
602,039
53,326
-
-
-
Georgia
105,483
10,121
126,861
35,139
Iowa
48,193
4,165
34,082
8,209
Idaho
34,397
3,640
-
-
-
Illinois
343,389
30,642
442,507
94,739
Indiana
431,753
44,737
-
-
-
Kansas
142,586
14,826
71,987
16,886
Kentucky
102,297
15,467
40,233
11,977
Louisiana
22,642
3,353
53,481
11,547
Massachusetts
413,211
53,334
558,492
139,977
Maryland
415,111
39,394
85,677
31,766
Maine
-
-
-
54,156
18,246
Michigan
121,909
10,760
115,759
23,310
Minnesota
37,186
3,438
118,380
24,275
Missouri
29,066
2,913
116,500
14,769
Mississippi
31,053
3,364
-
-
-
Montana
6,482
-
-
-
North Carolina
374,384
38,821
42,504
7,369
Nebraska
136,705
15,333
-
-
-
New Hampshire
177,255
21,987
79,396
18,091
New Jersey
1,296,969
127,150
249,811
65,758
New Mexico
-
-
-
19,468
Nevada
101,238
13,350
38,314
10,020
New York
205,222
17,685
307,829
72,573
Ohio
236,656
38,088
197,435
34,084
Oklahoma
130,829
13,173
39,039
3,263
Oregon
3,400
-
-
-
Pennsylvania
848,335
93,805
84,683
36,715
Rhode Island
45,102
5,667
70,499
20,827
South Carolina
36,129
10,287
-
-
-
Tennessee
184,515
26,731
51,167
15,219
Texas
614,366
71,312
328,093
75,905
Utah
5,824
17,223
11,161
Virginia
208,884
19,830
39,296
15,035
Vermont
26,171
3,300
28,749
7,183
Washington
408,435
40,676
271,099
47,110
Wisconsin
234,308
25,247
-
-
-
West Virginia
370,338
46,558
-
-
-
Total domestic
9,528,734
1,031,802
5,654,792
1,438,263
Canada
323,486
18,114
1,146,379
232,892
United Kingdom
581,885
42,929
1,537,562
309,300
Total international
905,371
61,043
2,683,941
542,192
Grand total
$
10,434,105
$
1,092,845
$
8,338,733
$
1,980,455
Medical Facilities
Property Location
Number of Properties
Total Investment
Annualized Revenues
Alaska
$
23,380
$
3,046
Alabama
31,865
5,065
Arkansas
25,987
2,935
Arizona
71,703
8,683
California
463,260
44,814
Colorado
12,738
1,990
Florida
485,233
50,128
Georgia
170,333
22,605
Iowa
7,080
1,394
Illinois
39,709
7,199
Indiana
157,528
17,514
Kansas
81,588
13,117
Maryland
22,549
2,293
Maine
22,815
2,932
Michigan
16,959
1,797
Minnesota
187,699
25,948
Missouri
156,324
17,768
North Carolina
60,114
6,856
Nebraska
38,619
5,658
New Hampshire
15,317
1,580
New Jersey
224,503
37,736
New Mexico
36,180
3,638
Nevada
47,452
3,512
New York
67,180
7,660
Ohio
79,612
12,321
Oklahoma
27,550
3,415
Oregon
10,038
1,363
South Carolina
28,101
2,259
Tennessee
82,061
10,276
Texas
898,805
89,942
Virginia
62,816
7,689
Washington
164,550
16,342
Wisconsin
258,710
27,700
Total
$
4,078,358
$
467,175
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)
Seniors housing triple-net(4)
87.7%
87.7%
1.54x
1.58x
$
14,562
$
14,000
per bed/unit
Seniors housing operating(5)
90.3%
90.7%
n/a
n/a
67,376
65,374
per unit
Medical facilities(6)
94.4%
94.5%
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) Medical office building occupancy represents the percentage of total rentable square feet leased and occupied (including month-to-month and holdover leases and excluding terminations and discontinued operations) as of December 31.
The following table sets forth information regarding lease expirations for certain portions of our portfolio as of December 31, 2014 (dollars in thousands):
Expiration Year
Thereafter
Seniors housing triple-net:
Properties
-
Base rent(1)
$
37,423
$
-
$
14,907
$
37,421
$
2,973
$
14,870
$
38,293
$
36,309
$
18,442
$
45,602
$
798,931
% of base rent
3.6%
0.0%
1.4%
3.6%
0.3%
1.4%
3.7%
3.5%
1.8%
4.4%
76.4%
Units
-
1,467
3,151
1,079
3,806
5,144
1,357
2,254
52,029
% of units
0.1%
0.0%
2.1%
4.5%
0.3%
1.5%
5.4%
7.3%
1.9%
3.2%
73.7%
Medical office buildings:
Square feet
711,737
790,389
1,218,498
920,688
1,070,191
968,769
1,118,555
2,108,813
1,047,083
1,367,691
2,956,912
Base rent(1)
$
17,440
$
18,299
$
29,078
$
21,994
$
25,896
$
22,791
$
28,386
$
43,663
$
26,007
$
36,446
$
71,813
% of base rent
5.1%
5.4%
8.5%
6.4%
7.6%
6.7%
8.3%
12.8%
7.6%
10.7%
20.9%
Leases
% of leases
15.0%
11.5%
14.2%
11.0%
11.8%
6.5%
6.8%
7.7%
4.6%
5.8%
5.1%
(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 4,960 stockholders of record as of January 31, 2015. 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
$
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
First Quarter
$
67.92
$
60.78
$
0.765
Second Quarter
80.07
61.62
0.765
Third Quarter
68.79
58.16
0.765
Fourth Quarter
66.76
52.43
0.765
Our Board of Directors has approved a new quarterly cash dividend rate of $0.825 per share of common stock per quarter, commencing with the February 2015 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, 2014, 156 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. 2009 equals $100 and dividends are assumed to be reinvested.
12/31/09
12/31/10
12/31/11
12/31/12
12/31/13
12/31/14
S & P 500
100.00
115.06
117.49
136.30
180.44
205.14
Health Care REIT, Inc.
100.00
114.33
138.65
163.91
150.11
222.93
FTSE NAREIT Equity
100.00
127.96
138.57
163.60
167.63
218.16
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
Average Price Paid Per Share
Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs(1)
Maximum Number of Shares that May Yet Be Purchased Under the Plans or Programs
October 1, 2014 through October 31, 2014
-
$
-
November 1, 2014 through November 30, 2014
-
-
December 1, 2014 through December 31, 2014
-
-
Totals
-
$
-
(1) 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, 2014 are derived from our audited consolidated financial statements (in thousands, except per share data):
Year Ended December 31,
Operating Data
Revenues(1)
$
559,491
$
1,313,182
$
1,805,044
$
2,880,608
$
3,343,546
Expenses(1)
526,515
1,200,979
1,619,132
2,778,363
2,959,333
Income from continuing operations before income taxes and income (loss) from unconsolidated entities
32,976
112,203
185,912
102,245
384,213
Income tax (expense) benefit
(364)
(1,388)
(7,612)
(7,491)
1,267
Income (loss) from unconsolidated entities
6,673
5,772
2,482
(8,187)
(27,426)
Income from continuing operations
39,285
116,587
180,782
86,567
358,054
Income from discontinued operations, net(1)
89,599
96,129
114,058
51,713
7,135
Gain (loss) on real estate dispositions, net
-
-
-
-
147,111
Net income
128,884
212,716
294,840
138,280
512,300
Preferred stock dividends
21,645
60,502
69,129
66,336
65,408
Preferred stock redemption charge
-
-
6,242
-
-
Net income (loss) attributable to noncontrolling interests
(4,894)
(2,415)
(6,770)
Net income attributable to common stockholders
$
106,882
$
157,108
$
221,884
$
78,714
$
446,745
Other Data
Average number of common shares outstanding:
Basic
127,656
173,741
224,343
276,929
306,272
Diluted
128,208
174,401
225,953
278,761
307,747
Per Share Data
Basic:
Income from continuing operations attributable to common stockholders
$
0.14
$
0.35
$
0.48
$
0.10
$
1.44
Discontinued operations, net
0.70
0.55
0.51
0.19
0.02
Net income attributable to common stockholders *
$
0.84
$
0.90
$
0.99
$
0.28
$
1.46
Diluted:
Income from continuing operations attributable to common stockholders
$
0.13
$
0.35
$
0.48
$
0.10
$
1.43
Discontinued operations, net
0.70
0.55
0.50
0.19
0.02
Net income attributable to common stockholders *
$
0.83
$
0.90
$
0.98
$
0.28
$
1.45
Cash distributions per common share
$
2.74
$
2.835
$
2.96
$
3.06
$
3.18
* Amounts may not sum due to rounding
(1) We have reclassified the income and expenses attributable to properties sold prior to or held for sale at December 31, 2013, to discontinued operations for all periods presented. See Note 5 to our consolidated financial statements.
December 31,
Balance Sheet Data
Net real estate investments
$
8,590,833
$
13,942,350
$
17,423,009
$
21,680,221
$
22,851,196
Total assets
9,451,734
14,924,606
19,549,109
23,083,957
25,014,296
Total long-term obligations
4,469,736
7,240,752
8,531,899
10,652,014
10,828,013
Total liabilities
4,714,081
7,612,309
8,993,998
11,292,587
11,454,838
Total preferred stock
291,667
1,010,417
1,022,917
1,017,361
1,006,250
Total equity
4,733,100
7,278,647
10,520,519
11,756,331
13,473,049
EXECUTIVE SUMMARY
Company Overview
Business Strategy
Capital Market Outlook
Key Transactions in 2014
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
Seniors Housing Triple-net
Seniors Housing Operating
Medical Facilities
Non-Segment/Corporate
OTHER
Non-GAAP Financial Measures
Critical Accounting Policies

---

ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS
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 Health Care REIT, 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
Health Care REIT, Inc. is a real estate investment trust (“REIT”) that has been at the forefront of seniors housing and health care real estate since the company was founded in 1970. We are an S&P 500 company headquartered in Toledo, Ohio. Our portfolio spans the full spectrum of seniors housing and health care real estate, including seniors housing communities, long-term/post-acute care facilities, medical office buildings, inpatient and outpatient medical centers and life science facilities. 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 as of December 31, 2014:
Investments
Percentage of
Number of
Type of Property
(in thousands)(1)
Investments
Properties
Seniors housing triple-net
$
10,434,105
45.7%
Seniors housing operating
8,338,733
36.5%
Medical facilities
4,078,358
17.8%
Totals
$
22,851,196
100.0%
1,260
(1) Excludes our share of investments in unconsolidated entities. 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 medical office building 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, 2014, rental income and resident fees represented 42% and 57% respectively, of total revenues (including discontinued operations). 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
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations
payments due for the period. Our 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, 2014, we had $473,726,000 of cash and cash equivalents, $79,697,000 of restricted cash and $2,428,723,000 of available borrowing capacity under our primary unsecured credit facility.
Capital Market Outlook
The capital markets remain supportive of our investment strategy. For the year ended December 31, 2014, we raised $3.2 billion 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 $3.7 billion in gross new investments 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 2014
Capital. In May 2014, we completed the public issuance of 16,100,000 shares of common stock for approximate gross proceeds of $1,003,835,000. In September 2014, we completed the public issuance of 17,825,000 shares of common stock for approximate gross proceeds of $1,136,344,000. Also, for the year ended December 31, 2014, we raised $257,055,000 through our dividend reinvestment program. In July 2014, we closed on a new primary unsecured credit facility 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. Among other things, the primary unsecured credit facility provides us with additional borrowing capacity and extends the agreement to October 31, 2018. It can be extended for an additional year at our option. In November 2014, we issued £500,000,000 of 4.5% 20-year senior unsecured notes, generating approximately $773,992,000 of net proceeds.
Investments. The following summarizes our acquisitions and joint venture investments made during the year ended December 31, 2014 (dollars in thousands):
Properties
Investment Amount(1)
Capitalization Rates(2)
Book Amount(3)
Seniors housing triple-net
$
1,519,657
7.0%
$
1,544,441
Seniors housing operating
893,593
6.4%
693,953
Medical facilities
665,398
6.2%
677,637
Total acquisitions/JVs
$
3,078,648
6.6%
$
2,916,031
(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 Notes 3 and 7 to our consolidated financial statements for additional information.
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations
Dispositions. The following summarizes property dispositions made during the year ended December 31, 2014 (dollars in thousands):
Properties
Proceeds(1)
Capitalization Rates(2)
Book Amount(3)
Seniors housing triple-net
$
900,335
8.7%
$
747,720
Medical facilities
46,602
7.6%
45,695
Total property sales
$
946,937
8.7%
$
793,415
(1) Represents book amount plus net gains/losses. See Note 5 to our consolidated financial statements for additional information.
(2) Represents annualized contractual income that was being received in cash at date of disposition divided by book amount.
(3) Represents carrying value of assets at time of disposition.
Dividends. Our Board of Directors increased the annual cash dividend to $3.30 per common share ($0.825 per share quarterly), as compared to $3.18 per common share for 2014, beginning in February 2015. The dividend declared for the quarter ended December 31, 2014 represents the 175th 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 and their relative per share amounts 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
$
221,884
$
78,714
$
446,745
Funds from operations
697,557
924,884
1,178,330
Net operating income from continuing operations
1,237,055
1,673,795
1,940,188
Same store cash net operating income
882,885
898,909
931,255
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:
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations
Year Ended December 31,
Debt to book capitalization ratio
45%
48%
45%
Debt to undepreciated book capitalization ratio
41%
43%
40%
Debt to market capitalization ratio
33%
39%
29%
Adjusted interest coverage ratio
3.31x
3.23x
3.86x
Adjusted fixed charge coverage ratio
2.58x
2.56x
3.06x
Concentration Risk. We evaluate our concentration risk in terms of investment mix, relationship mix and geographic mix. Concentration risk is a valuable measure in understanding what portion of our investments could be at risk if certain sectors were to experience downturns. Investment mix measures the portion of our investments that relate to our various property types. Relationship mix measures the portion of our investments that relate to our top five relationships. Geographic mix measures the portion of our investments that relate to our top five states (or international equivalents). The following table reflects our recent historical trends of concentration risk by investment balance for the periods presented:
December 31,
Investment mix:(1)
Seniors housing triple-net
52%
45%
46%
Seniors housing operating
28%
39%
36%
Medical facilities
20%
16%
18%
Relationship mix:(1)
Sunrise Senior Living(2)
6%
19%
18%
Genesis Healthcare
15%
12%
12%
Brookdale
6%
Revera(2)
5%
5%
Benchmark Senior Living
5%
4%
4%
Belmont Village
5%
4%
Merrill Gardens
6%
Remaining customers
63%
56%
55%
Geographic mix:(1)
California
9%
10%
10%
England
8%
9%
Texas
9%
7%
8%
New Jersey
9%
8%
8%
Canada
6%
Florida
7%
5%
Pennsylvania
5%
Remaining
61%
62%
59%
(1) Excludes our share of investments in unconsolidated entities. Entities in which the company has a joint venture partner are shown at 100% of the joint venture amount.
(2) Revera owns a controlling interest in Sunrise.
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.
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations
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.hcreit.com/investor-relations/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, 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
$
163,482
$
1,033,764
$
870,282
532%
$
158,780
$
(874,984)
-85%
$
(4,702)
-3%
Cash provided from (used in):
Operating activities
818,133
988,497
170,364
21%
1,138,670
150,173
15%
320,537
39%
Investing activities
(3,592,979)
(3,531,593)
61,386
-2%
(2,126,206)
1,405,387
-40%
1,466,773
-41%
Financing activities
3,645,128
1,667,670
(1,977,458)
-54%
1,303,172
(364,498)
-22%
(2,341,956)
-64%
Effect of foreign currency translation on cash and cash equivalents
n/a
(690)
(1,132)
n/a
(690)
n/a
Ending cash and cash equivalents
$
1,033,764
$
158,780
$
(874,984)
-85%
$
473,726
$
314,946
198%
$
(560,038)
-54%
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, 2012, 2013 and 2014, 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 2014.” Please refer to Notes 3, 6 and 7 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
$
286,410
$
247,560
$
(38,850)
-14%
$
197,881
$
(49,679)
-20%
$
(88,529)
-31%
Recurring capital expenditures, tenant improvements and lease commissions
45,175
60,984
15,809
35%
59,134
(1,850)
-3%
13,959
31%
Renovations, redevelopments and other capital improvements
90,275
74,848
(15,427)
-17%
73,646
(1,202)
-2%
(16,629)
-18%
Total
$
421,860
$
383,392
$
(38,468)
-9%
$
330,661
$
(52,731)
-14%
$
(91,199)
-22%
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 2014.” Please refer to Notes 9, 10 and 13 of our consolidated financial statements for additional information.
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations
Off-Balance Sheet Arrangements
At December 31, 2014, 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, 2014, we had eight 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, 2014 (in thousands):
Payments Due by Period
Contractual Obligations
Total
2016-2017
2018-2019
Thereafter
Unsecured revolving credit facility(1)
$
-
$
-
$
-
$
-
$
-
Senior unsecured notes and term credit facilities:(2)
U.S. Dollar senior unsecured notes
5,465,965
-
1,150,000
1,050,000
3,265,965
Pounds Sterling senior unsecured notes(3)
1,635,690
-
-
-
1,635,690
U.S. Dollar term credit facility
500,000
-
-
500,000
-
Canadian Dollar term credit facility(3)
215,499
-
-
215,499
-
Secured debt:(2,3)
Consolidated
2,941,765
399,813
770,271
806,956
964,725
Unconsolidated
622,220
206,281
176,558
81,073
158,308
Contractual interest obligations:(4)
Unsecured revolving credit facility
-
-
-
-
-
Senior unsecured notes and term loans(3)
3,560,409
338,290
638,105
533,104
2,050,909
Consolidated secured debt(3)
754,363
140,101
218,789
127,354
268,119
Unconsolidated secured debt(3)
98,668
27,869
29,373
16,385
25,041
Capital lease obligations(5)
111,726
13,157
9,464
9,012
80,093
Operating lease obligations(5)
916,404
15,078
30,370
30,457
840,499
Purchase obligations(5)
308,492
140,150
151,697
6,792
9,853
Other long-term liabilities(6)
367,128
361,475
2,950
2,703
-
Total contractual obligations
$
17,498,329
$
1,642,214
$
3,177,577
$
3,379,335
$
9,299,202
(1) Relates to our $2,500,000,000 unsecured revolving credit facility. See Note 9 to our consolidated financial statements for additional information.
(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 for additional information.
(6) Primarily relates to an unfunded commitment for a secured bridge facility with one of our operators, which is discussed in Note 12 to our consolidated financial statements, and 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, 2014, 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, 2014 is as follows:
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations
Per Agreement
Covenant
Primary Unsecured Credit Facility
Senior Unsecured Notes
Actual At December 31, 2014
Total Indebtedness to Book Capitalization Ratio maximum:
60%
n/a
45%
Secured Indebtedness to Total Assets Ratio maximum:
30%
40%
12%
Total Indebtedness to Total Assets maximum:
n/a
60%
43%
Unsecured Debt to Unencumbered Assets maximum:
60%
n/a
38%
Adjusted Interest Coverage Ratio minimum:
n/a
1.50x
3.86x
Adjusted Fixed Charge Coverage minimum:
1.50x
n/a
3.06x
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 4, 2012, we filed an open-ended automatic or “universal” shelf registration statement with the Securities and Exchange Commission covering an indeterminate amount of future offerings of debt securities, common stock, preferred stock, depositary shares, warrants and units. As of January 31, 2015, we had an effective registration statement on file in connection with our enhanced dividend reinvestment plan under which we may issue up to 10,000,000 shares of common stock. As of January 31, 2015, 3,016,824 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, RBS Securities Inc., 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, 2015, we had $457,112,000 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.
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. These revenues and expenses are reflected in our Consolidated Statements of Comprehensive Income and are discussed in further detail below. 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
$
221,884
$
78,714
$
(143,170)
-65%
$
446,745
$
368,031
468%
$
224,861
101%
Funds from operations
697,557
924,884
227,327
33%
1,178,330
253,446
27%
480,773
69%
Adjusted EBITDA
1,264,091
1,503,715
239,624
19%
1,877,992
374,277
25%
613,901
49%
Net operating income from continuing operations
1,237,055
1,673,795
436,740
35%
1,940,188
266,393
16%
703,133
57%
Same store cash NOI
882,885
898,909
16,024
2%
931,255
32,346
4%
48,370
5%
Per share data (fully diluted):
Net income attributable to common stockholders
$
0.98
$
0.28
$
(0.70)
-71%
$
1.45
$
1.17
418%
$
0.47
48%
Funds from operations
3.09
3.32
0.23
7%
3.83
0.51
15%
0.74
24%
Adjusted interest coverage ratio
3.31x
3.19x
-0.12x
-4%
3.86x
0.67x
21%
0.55x
17%
Adjusted fixed charge coverage ratio
2.58x
2.52x
-0.06x
-2%
3.06x
0.54x
21%
0.48x
19%
The following table represents the changes in outstanding common stock for the period from January 1, 2012 to December 31, 2014 (in thousands):
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations
Year Ended
December 31, 2012
December 31, 2013
December 31, 2014
Totals
Beginning balance
192,275
260,374
289,564
192,275
Public offerings
64,400
23,000
33,925
121,325
Dividend reinvestment plan issuances
2,136
3,430
4,123
9,689
Senior note conversions
1,040
2,287
Preferred stock conversions
-
Issuances in acquisitions of noncontrolling interests
-
1,109
-
1,109
Option exercises
1,053
Other, net
Ending balance
260,374
289,564
328,790
328,790
Average number of shares outstanding:
Basic
224,343
276,929
306,272
Diluted
225,953
278,761
307,747
During the past three years, inflation has not significantly affected our earnings because of the moderate inflation rate. Additionally, our earnings are primarily 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.
We evaluate our business and make resource allocations on our three business segments: seniors housing triple-net, seniors housing operating and medical facilities. 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.
Seniors Housing Triple-net
The following is a summary of our NOI for the seniors housing 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)
$
589,912
$
598,235
$
8,323
1%
$
618,672
$
20,437
3%
$
28,760
5%
Non-cash NOI attributable to same store properties(1)
34,176
33,745
(431)
-1%
53,133
19,388
57%
18,957
55%
NOI attributable to non same store properties(2)
170,923
262,641
91,718
54%
355,329
92,688
35%
184,406
108%
NOI
$
795,011
$
894,621
$
99,610
13%
$
1,027,134
$
132,513
15%
$
232,123
29%
(1) Change is due to increases in cash and non-cash NOI (described below) related to 453 same store properties.
(2) Change is primarily due to the acquisition of 195 properties, the conversion of 13 construction projects into revenue-generating properties subsequent to January 1, 2012 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 seniors housing triple-net segment (dollars in thousands):
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations
Year Ended
One Year Change
Year Ended
One Year Change
Two Year Change
December 31,
December 31,
December 31,
$
%
$
%
$
%
Revenues:
Rental income
$
762,968
$
866,138
$
103,170
14%
$
992,638
$
126,500
15%
$
229,670
30%
Interest income
30,654
28,214
(2,440)
-8%
32,255
4,041
14%
1,601
5%
Other income
2,471
1,504
(967)
-39%
2,973
1,469
98%
20%
796,093
895,856
99,763
13%
1,027,866
132,010
15%
231,773
29%
Property operating expenses
1,082
1,235
14%
(503)
-41%
(350)
-32%
Net operating income from continuing operations (NOI)
795,011
894,621
99,610
13%
1,027,134
131,507
15%
232,123
29%
Other expenses:
Interest expense
1,745
23,322
21,577
1237%
38,460
15,138
65%
36,715
2104%
Loss (gain) on derivatives, net
4,877
4,781
4980%
(1,770)
(6,647)
-136%
(1,866)
-1944%
Depreciation and amortization
223,921
249,913
25,992
12%
273,296
23,383
9%
49,375
22%
Transaction costs
35,705
24,426
(11,279)
-32%
45,146
20,720
85%
9,441
26%
Loss (gain) on extinguishment of debt, net
2,405
(2,365)
-98%
145%
(2,307)
-96%
Provision for loan losses
27,008
2,110
(24,898)
-92%
-
(2,110)
-100%
(27,008)
-100%
Other expenses
-
-
-
n/a
8,825
8,825
n/a
8,825
n/a
290,880
304,688
13,808
5%
364,055
59,367
19%
73,175
25%
Income from continuing operations before income taxes and income (loss) from unconsolidated entities
504,131
589,933
85,802
17%
663,079
73,146
12%
158,948
32%
Income tax benefit (expense)
(2,852)
(1,817)
1,035
-36%
6,141
7,958
-438%
8,993
-315%
Income (loss) from unconsolidated entities
(33)
5,035
5,068
n/a
5,423
8%
5,456
-16533%
Income from continuing operations
501,246
593,151
91,905
18%
674,643
81,492
14%
173,397
35%
Discontinued operations:
Gain (loss) on sales of properties, net
112,309
56,625
(55,684)
-50%
6,411
(50,214)
-89%
(105,898)
-94%
Impairment of assets
(20,612)
-
20,612
-100%
-
-
n/a
20,612
-100%
Income from discontinued operations, net
38,356
1,117
(37,239)
-97%
(393)
-35%
(37,632)
-98%
Discontinued operations, net
130,053
57,742
(72,311)
-56%
7,135
(50,607)
-88%
(122,918)
-95%
Gain (loss) on real estate dispositions, net
-
-
-
n/a
146,205
146,205
n/a
146,205
n/a
Net income
631,299
650,893
19,594
3%
827,983
177,090
27%
196,684
31%
Less: Net income attributable to noncontrolling interests
1,558
1,047
205%
1,874
20%
1,363
267%
Net income attributable to common stockholders
$
630,788
$
649,335
$
18,547
3%
$
826,109
$
176,774
27%
$
195,321
31%
The increase in rental income is primarily attributable to the acquisitions of new properties, the transition of 38 properties from our seniors housing operating segment and the conversion of newly constructed seniors housing 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, 2014, we had no lease renewals but we had 12 leases with rental rate increasers ranging from 0.14% to 0.33% in our seniors housing triple-net portfolio. The increase in interest income is attributable to investments in new loans and draws on existing loans in the current year (see Note 6 to our consolidated financial statements for additional information).
During the year ended December 31, 2014, we completed four seniors housing triple-net construction projects representing $71,569,000 or $185,896 per bed/unit plus expansion projects totaling $18,053,000. The following is a summary of seniors housing triple-net construction projects pending as of December 31, 2014 (dollars in thousands):
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations
Location
Units/Beds
Commitment
Balance
Est. Completion
Upper Providence, PA
$
29,030
$
22,718
2Q15
Mahwah, NJ
28,259
16,208
2Q15
Haddonfield, NJ
18,815
11,323
2Q15
Derby, England
11,501
6,885
2Q15
Edmond, OK
24,500
3,007
1Q16
Carrollton, TX
18,900
3,063
1Q16
Bracknell, England
15,671
6,281
2Q16
Piscataway, NJ
30,600
15,067
4Q15
Frederick, MD
19,000
11,030
4Q15
Raleigh, NC
93,000
17,827
4Q16
Total
1,107
$
289,276
$
113,409
Total interest expense represents secured debt interest expense and interest expense on capital lease obligations offset by interest allocated to discontinued operations. 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 seniors housing triple-net secured debt principal activity (dollars in thousands):
Year Ended
Year Ended
Year Ended
December 31, 2012
December 31, 2013
December 31, 2014
Weighted Avg.
Weighted Avg.
Weighted Avg.
Amount
Interest Rate
Amount
Interest Rate
Amount
Interest Rate
Beginning balance
$
259,000
5.105%
$
218,741
5.393%
$
587,136
5.394%
Debt transitioned
-
0.000%
367,997
5.298%
-
0.000%
Debt issued
9,387
4.080%
13,800
5.480%
-
0.000%
Debt assumed
83,002
5.304%
9,578
5.582%
120,352
5.404%
Debt extinguished
(128,818)
4.743%
(16,482)
3.304%
(22,970)
6.235%
Foreign currency
-
0.000%
-
0.000%
(2,180)
5.317%
Principal payments
(3,830)
5.556%
(6,498)
5.698%
(11,569)
5.564%
Ending balance
$
218,741
5.393%
$
587,136
5.394%
$
670,769
5.337%
Monthly averages
$
216,314
5.254%
$
339,129
5.394%
$
596,941
5.381%
The change in loss on debt extinguishment is attributable to the volume of debt payoffs each year. Derivative gains and losses are related to certain foreign currency forward exchange contracts related to properties acquired. Please refer to Note 11 to our consolidated financial statements for further discussion.
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, and termination of pre-existing relationships computed based on the fair value of the assets acquired), lease termination fees and other similar costs.
The increase in other expenses is primarily related to the reversal of the indemnification asset recorded in connection with the Genesis acquisition. An income tax benefit was recorded in the same amount to reverse the unrecognized tax benefits related to the transaction. Please refer to Note 18 to our consolidated financial statements for further discussion.
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 in prior years as the fair value less estimated costs to sell exceeded our carrying values. Please refer to Note 5 to our consolidated financial statements for further discussion. The following illustrates the reclassification impact as a result of classifying the properties sold prior to or held for sale at December 31, 2014 as discontinued operations for the periods presented (dollars in thousands):
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations
Year Ended December 31,
Rental income
$
71,044
$
8,987
$
Expenses:
Interest expense
13,723
2,566
Property operating expenses
-
-
Provision for depreciation
18,750
5,304
-
Income (loss) from discontinued operations, net
$
38,356
$
1,117
$
During the year ended December 31, 2012, we wrote off one loan related to an entrance fee community. During the year ended December 31, 2013, we wrote off one loan related to an active adult community. During the year ended December 31, 2014, 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 seniors housing 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.
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)
$
140,968
$
146,624
$
5,656
4%
$
156,072
$
9,448
6%
$
15,104
11%
NOI attributable to non same store properties(2)
91,056
381,539
290,483
319%
475,191
93,652
25%
384,135
422%
NOI
$
232,024
$
528,163
$
296,139
128%
$
631,263
$
103,100
20%
$
399,239
172%
(1) Due to increases in cash revenues (described below) related to 74 same store properties.
(2) Primarily due to the acquisition of 221 properties subsequent to January 1, 2012 and the transition of 38 properties to our seniors housing 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):
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations
Year Ended
One Year Change
Year Ended
One Year Change
Two Year Change
December 31,
December 31,
December 31,
$
%
$
%
$
%
Revenues:
Resident fees and services
$
697,494
$
1,616,290
$
918,796
132%
$
1,892,237
$
275,947
17%
$
1,194,743
171%
Interest income
6,208
(5,451)
-88%
2,119
1,362
180%
(4,089)
-66%
Other income
-
n/a
3,215
2,860
806%
3,215
n/a
703,702
1,617,402
913,700
130%
1,897,571
280,169
17%
1,193,869
170%
Property operating expenses
471,678
1,089,239
617,561
131%
1,266,308
177,069
16%
794,630
168%
Net operating income from continuing operations (NOI)
232,024
528,163
296,139
128%
631,263
103,100
20%
399,239
172%
Other expenses:
Interest expense
67,524
92,148
24,624
36%
113,099
20,951
23%
45,575
67%
Loss (gain) on derivatives, net
(1,921)
(407)
1,514
-79%
-168%
2,196
-114%
Depreciation and amortization
165,798
478,007
312,209
188%
418,199
(59,808)
-13%
252,401
152%
Transaction costs
12,756
107,066
94,310
739%
16,880
(90,186)
-84%
4,124
32%
Loss (gain) on extinguishment of debt, net
(2,697)
(3,372)
(675)
25%
3,755
-111%
3,080
-114%
Other expenses
-
-
-
n/a
1,437
1,437
n/a
1,437
n/a
241,460
673,442
431,982
179%
550,273
(123,169)
-18%
308,813
128%
(Loss) income from continuing operations before income from unconsolidated entities
(9,436)
(145,279)
(135,843)
1440%
80,990
226,269
-156%
90,426
-958%
Income tax expense
(1,086)
(5,337)
(4,251)
391%
(3,047)
2,290
-43%
(1,961)
181%
(Loss) income from unconsolidated entities
(6,364)
(22,695)
(16,331)
257%
(38,204)
(15,509)
68%
(31,840)
500%
Net income (loss)
(16,886)
(173,311)
(156,425)
926%
39,739
213,050
-123%
56,625
-335%
Less: Net income (loss) attributable to noncontrolling interests
(3,015)
(8,639)
(5,624)
187%
(2,335)
6,304
-73%
-23%
Net income (loss) attributable to common stockholders
$
(13,871)
$
(164,672)
$
(150,801)
1087%
$
42,074
$
206,746
-126%
$
55,945
-403%
Fluctuations in revenues and property operating expenses are primarily a result of acquisitions subsequent to January 1, 2012, partially offset by the transition of 38 properties to seniors housing triple-net on September 1, 2013. Interest income for the years ended December 31, 2012 and 2013 relates to the Sunrise loan funded during the three months ended December 31, 2012 and acquired in January 2013 (please refer to Note 6 to our consolidated financial statements for additional information). 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 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.
The following is a summary of our seniors housing operating construction projects, excluding expansions, pending as of December 31, 2014 (dollars in thousands):
Location
Units/Beds
Commitment
Balance
Est. Completion
Edgbaston, England
$
20,820
$
19,571
2Q15
Camberley, England
21,613
11,142
4Q15
Total
$
42,433
$
30,713
Interest expense represents secured debt interest expense as well as interest expense related to our Canadian-denominated unsecured term credit facility and Sterling-denominated senior unsecured notes. The increases in interest expense are attributed primarily to the £550,000,000 Sterling-dominated senior unsecured notes issued in November 2013 and the £500,000,000 Sterling-dominated senior unsecured notes issued in November 2014. Please refer to Note 10 to our consolidated financial statements for additional information. The following is a summary of our seniors housing operating property secured debt principal activity (dollars in thousands):
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations
Year Ended
Year Ended
Year Ended
December 31, 2012
December 31, 2013
December 31, 2014
Weighted Avg.
Weighted Avg.
Weighted Avg.
Amount
Interest Rate
Amount
Interest Rate
Amount
Interest Rate
Beginning balance
$
1,318,599
4.665%
$
1,369,526
4.874%
$
1,714,714
4.622%
Debt issued
148,031
4.220%
75,408
4.891%
109,503
3.374%
Debt assumed
115,371
5.512%
1,228,706
4.063%
18,484
4.359%
Debt extinguished
(193,962)
4.395%
(548,876)
3.597%
(114,793)
3.626%
Debt transitioned
-
0.000%
(367,997)
5.298%
-
0.000%
Foreign currency
5.624%
(10,361)
4.013%
(39,379)
3.727%
Principal payments
(18,700)
4.850%
(31,692)
4.643%
(33,998)
4.296%
Ending balance
$
1,369,526
4.874%
$
1,714,714
4.622%
$
1,654,531
4.422%
Monthly averages
$
1,366,758
4.866%
$
1,723,122
4.820%
$
1,657,416
4.515%
The fluctuations in gains/losses on debt extinguishments is primarily attributable the volume of extinguishments and terms of the related secured debt. Derivative gains relate primarily to foreign currency forward exchange contracts entered into in conjunction with international investments made during the respective years. Please refer to Note 11 to our consolidated financial statements for further discussion.
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.
Medical Facilities
The following is a summary of our NOI for the medical facilities 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)
$
152,005
$
154,050
$
2,045
1%
$
156,511
$
2,461
2%
$
4,506
3%
Non-cash NOI attributable to same store properties(1)
5,720
5,248
(472)
-8%
3,290
(1,958)
-37%
(2,430)
-42%
NOI attributable to non same store properties(2)
51,383
91,417
40,034
78%
121,313
29,896
33%
69,930
136%
NOI
$
209,108
$
250,715
$
41,607
20%
$
281,114
$
30,399
12%
$
72,006
34%
(1) Due to increases in cash and non-cash revenues (described below) related to 138 same store properties.
(2) Primarily due to the acquisition of 74 properties and conversions of construction projects into 19 revenue-generating properties subsequent to January 1, 2012.
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations
The following is a summary of our results of operations for the medical facilities 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
$
300,246
$
361,451
$
61,205
20%
$
413,129
$
51,678
14%
$
112,883
38%
Interest income
2,203
3,692
1,489
68%
3,293
(399)
-11%
1,090
49%
Other income
1,888
1,911
1%
1,010
(901)
-47%
(878)
-47%
304,337
367,054
62,717
21%
417,432
50,378
14%
113,095
37%
Property operating expenses
95,229
116,339
21,110
22%
136,318
19,979
17%
41,089
43%
Net operating income from continuing operations (NOI)
209,108
250,715
41,607
20%
281,114
30,399
12%
72,006
34%
Other expenses:
Interest expense
28,878
36,823
7,945
28%
32,904
(3,919)
-11%
4,026
14%
Depreciation and amortization
116,501
137,880
21,379
18%
152,635
14,755
11%
36,134
31%
Transaction costs
13,148
1,909
(11,239)
-85%
7,512
5,603
294%
(5,636)
-43%
Loss (gain) on extinguishment of debt, net
(483)
-
-100%
n/a
n/a
158,044
176,612
18,568
12%
193,456
16,844
10%
35,412
22%
Income from continuing operations before income taxes and income (loss) from unconsolidated entities
51,064
74,103
23,039
45%
87,658
13,555
18%
36,594
72%
Income tax expense
(2,381)
(270)
2,111
-89%
(1,827)
(1,557)
577%
-23%
Income (loss) from unconsolidated entities
8,879
9,473
7%
5,355
(4,118)
-43%
(3,524)
-40%
Income from continuing operations
57,562
83,306
25,744
45%
91,186
7,880
9%
33,624
58%
Discontinued operations:
Gain (loss) on sales of properties, net
(11,759)
(7,487)
4,272
-36%
-
7,487
-100%
11,759
-100%
Impairment of assets
(8,676)
-
8,676
-100%
-
-
n/a
8,676
-100%
Income (loss) from discontinued operations, net
4,440
1,458
(2,982)
-67%
-
(1,458)
-100%
(4,440)
-100%
Discontinued operations, net
(15,995)
(6,029)
9,966
-62%
-
6,029
-100%
15,995
-100%
Gain (loss) on real estate dispositions, net
-
-
-
n/a
n/a
n/a
Net income (loss)
41,567
77,277
35,710
86%
92,092
14,815
19%
50,525
122%
Less: Net income (loss) attributable to noncontrolling interests
248%
96%
583%
Net income (loss) attributable to common stockholders
$
41,478
$
76,967
$
35,489
86%
$
91,484
$
14,517
19%
$
50,006
121%
The increase in rental income is primarily attributable to the acquisitions of new properties and the conversion of newly constructed medical facility 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, 2014, our consolidated medical office building portfolio signed 72,159 square feet of new leases and 251,399 square feet of renewals. The weighted-average term of these leases was six years, with a rate of $26.25 per square foot and tenant improvement and lease commission costs of $21.23 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, 2014, we completed seven medical office building construction projects representing $127,290,000 or $243 per square foot. The following is a summary of medical office building construction projects pending as of December 31, 2014 (dollars in thousands):
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations
Location
Square Feet
Commitment
Balance
Est. Completion
Houston, TX
51,057
$
17,600
$
12,801
1Q15
Bel Air, MD
99,184
26,386
2,391
1Q16
Total
150,241
$
43,986
$
15,192
Total interest expense represents secured debt interest expense offset by interest allocated to discontinued operations. 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 medical facility secured debt principal activity (dollars in thousands):
Year Ended
Year Ended
Year Ended
December 31, 2012
December 31, 2013
December 31, 2014
Weighted Avg.
Weighted Avg.
Weighted Avg.
Amount
Interest Rate
Amount
Interest Rate
Amount
Interest Rate
Beginning balance
$
520,066
5.981%
$
713,720
5.950%
$
700,427
5.999%
Debt assumed
246,371
5.888%
52,574
6.126%
66,113
3.670%
Debt extinguished
(37,622)
5.858%
(49,017)
5.357%
(141,796)
5.567%
Principal payments
(15,095)
6.180%
(16,850)
6.193%
(15,476)
5.797%
Ending balance
$
713,720
5.950%
$
700,427
5.999%
$
609,268
5.838%
Monthly averages
$
669,753
5.952%
$
708,107
5.956%
$
626,797
5.928%
The increases in property operating expenses and depreciation and amortization are primarily attributable to acquisitions and construction conversions of new medical facilities for which we incur certain property operating expenses offset by discontinued operations.
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 fluctuations in transaction costs are primarily due to acquisition volume fluctuations in the relevant years.
Income from unconsolidated entities represents our share of net income or losses related to our joint venture investment with Forest City Enterprises and certain unconsolidated property investments related to our strategic joint venture relationship with a national medical office building company. The decrease is primarily attributable to lower occupancy in the current year.
Changes in gains/losses on sales of properties are related to volume of property sales and the sales prices. We recognized impairment losses on certain held for sale properties in prior years as the fair value less estimated costs to sell exceeded our carrying values. Please refer to Note 5 to our consolidated financial statements for further discussion. The following illustrates the reclassification impact as a result of classifying the properties sold prior to or held for sale at December 31, 2014 as discontinued operations for the periods presented (dollars in thousands):
Year Ended December 31,
Rental income
$
25,334
$
9,390
Expenses:
Interest expense
8,013
1,681
Property operating expenses
4,267
3,396
Provision for depreciation
8,614
2,855
Income (loss) from discontinued operations, net
$
4,440
$
1,458
A portion of our medical facility 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.
Non-Segment/Corporate
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations
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
$
$
$
(616)
-68%
$
$
129%
$
(235)
-26%
Expenses:
Interest expense
263,418
306,067
42,649
16%
296,576
(9,491)
-3%
33,158
13%
General and administrative
97,341
108,318
10,977
11%
142,943
34,625
32%
45,602
47%
Loss (gain) on extinguishments of debt, net
-
2,423
2,423
n/a
8,672
6,249
258%
8,672
n/a
360,759
416,808
56,049
16%
448,191
31,383
8%
87,432
24%
Loss from continuing operations before income taxes
(359,847)
(416,512)
(56,665)
16%
(447,514)
(31,002)
7%
(87,667)
24%
Income tax expense
(1,293)
(67)
1,226
-95%
-
-100%
1,293
-100%
Net loss
(361,140)
(416,579)
(55,439)
15%
(447,514)
(30,935)
7%
(86,374)
24%
Preferred stock dividends
69,129
66,336
(2,793)
-4%
65,408
(928)
-1%
(3,721)
-5%
Preferred stock redemption charge
6,242
-
(6,242)
-100%
-
-
n/a
(6,242)
-100%
Net loss attributable to common stockholders
$
(436,511)
$
(482,915)
$
(46,404)
11%
$
(512,922)
$
(30,007)
6%
$
(76,411)
18%
Other income primarily represents income from non-real estate activities such as interest earned on temporary investments of cash reserves. 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
$
249,564
$
279,617
$
30,053
12%
$
280,037
$
0%
$
30,473
12%
Secured debt
(62)
-11%
(35)
-7%
(97)
-17%
Primary unsecured credit facility
11,769
15,498
3,729
32%
8,914
(6,584)
-42%
(2,855)
-24%
Capitalized interest
(9,777)
(6,700)
3,077
-31%
(7,150)
(450)
7%
2,627
-27%
Interest SWAP savings
(96)
(14)
-85%
(14)
(0)
3%
-85%
Loan expense
11,401
17,171
5,770
51%
14,329
(2,842)
-17%
2,928
26%
Totals
$
263,418
$
306,067
$
42,649
16%
$
296,576
$
(9,491)
-3%
$
33,158
13%
The change in interest expense on senior unsecured notes is due to the net effect of issuances and extinguishments, excluding our Sterling-denominated senior unsecured notes, both of which are 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. Please see Note 11 to our consolidated financial statements for a discussion of our interest rate swap agreements and their impact on interest expense. 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 as a percentage of consolidated revenues (including revenues from discontinued operations)
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations
for the years ended December 31, 2014, 2013 and 2012 were 4.27%, 3.74% and 5.12%, respectively. The increase in general and administrative expenses is primarily related to costs associated with our initiatives to attract and retain appropriate personnel to achieve our business objectives and $19,688,000 of CEO transition costs. The changes in percent of revenue are primarily related to the increasing revenue base as a result of our acquisitions. The loss on extinguishment of debt is due to the refinancing of our primary unsecured credit facility and the redemption of convertible senior notes. Please see Notes 9 and 13 to our consolidated financial statements for additional information. The changes in preferred stock dividends and redemption charge are primarily attributable to the net effect of issuances, redemptions and conversions. Please see Note 13 to our consolidated financial statements for additional information.
Other
Non-GAAP Financial Measures
We believe that net income, 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 medical facility 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
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations
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.
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
$
221,884
$
78,714
$
446,745
Depreciation and amortization
533,585
873,960
844,130
Impairment of assets
29,287
-
-
Loss (gain) on sales of properties
(100,549)
(49,138)
(153,522)
Noncontrolling interests
(21,058)
(36,304)
(37,852)
Unconsolidated entities
34,408
57,652
74,580
Funds from operations
$
697,557
$
924,884
$
1,174,081
Average common shares outstanding:
Basic
224,343
276,929
306,272
Diluted
225,953
278,761
307,747
Per share data:
Net income attributable to common stockholders
Basic
$
0.99
$
0.28
$
1.46
Diluted
0.98
0.28
1.45
Funds from operations
Basic
$
3.11
$
3.34
$
3.83
Diluted
3.09
3.32
3.82
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations
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
$
294,840
$
138,280
$
512,300
Interest expense
383,300
462,606
481,196
Income tax expense (benefit)
7,612
7,491
(1,267)
Depreciation and amortization
533,585
873,960
844,130
Stock-based compensation expense
18,521
20,177
32,075
Provision for loan losses
27,008
2,110
-
Loss (gain) on extinguishment of debt
(775)
(909)
9,558
Adjusted EBITDA
$
1,264,091
$
1,503,715
$
1,877,992
Adjusted Interest Coverage Ratio:
Interest expense
$
383,300
$
462,606
$
481,196
Capitalized interest
9,777
6,700
7,150
Non-cash interest expense
(11,395)
(4,044)
(2,427)
Total interest
381,682
465,262
485,919
Adjusted EBITDA
$
1,264,091
$
1,503,715
$
1,877,992
Adjusted interest coverage ratio
3.31x
3.23x
3.86x
Adjusted Fixed Charge Coverage Ratio:
Interest expense
$
383,300
$
462,606
$
481,196
Capitalized interest
9,777
6,700
7,150
Non-cash interest expense
(11,395)
(4,044)
(2,427)
Secured debt principal payments
38,744
56,205
62,280
Preferred dividends
69,129
66,336
65,408
Total fixed charges
489,555
587,803
613,607
Adjusted EBITDA
$
1,264,091
$
1,503,715
$
1,877,992
Adjusted fixed charge coverage ratio
2.58x
2.56x
3.06x
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:
Seniors housing triple-net
$
796,093
$
895,856
$
1,027,866
Seniors housing operating
703,702
1,617,402
1,897,571
Medical facilities
304,337
367,054
417,432
Non-segment/corporate
Total revenues
1,805,044
2,880,608
3,343,546
Property operating expenses:
Seniors housing triple-net
1,082
1,235
Seniors housing operating
471,678
1,089,239
1,266,308
Medical facilities
95,229
116,339
136,318
Total property operating expenses
567,989
1,206,813
1,403,358
Net operating income:
Seniors housing triple-net
795,011
894,621
1,027,134
Seniors housing operating
232,024
528,163
631,263
Medical facilities
209,108
250,715
281,114
Non-segment/corporate
Net operating income from continuing operations
$
1,237,055
$
1,673,795
$
1,940,188
Reconciling items:
Interest expense
(361,565)
(458,360)
(481,039)
Gain (loss) on derivatives, net
1,825
(4,470)
1,495
Depreciation and amortization
(506,220)
(865,800)
(844,130)
General and administrative
(97,341)
(108,318)
(142,943)
Transaction costs
(61,609)
(133,401)
(69,538)
Gain (loss) on extinguishment of debt, net
(9,558)
Other expenses
-
-
(10,262)
Provision for loan losses
(27,008)
(2,110)
-
Income tax benefit (expense)
(7,612)
(7,491)
1,267
Income (loss) from unconsolidated entities
2,482
(8,187)
(27,426)
Income (loss) from discontinued operations, net
114,058
51,713
7,135
Gain (loss) on real estate dispositions, net
-
-
147,111
Preferred dividends
(69,129)
(66,336)
(65,408)
Preferred stock redemption charge
(6,242)
-
-
Loss (income) attributable to noncontrolling interests
2,415
6,770
(147)
(1,015,171)
(1,595,081)
(1,493,443)
Net income (loss) attributable to common stockholders
$
221,884
$
78,714
$
446,745
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:
Seniors housing triple-net
$
795,011
$
894,621
$
1,027,134
Seniors housing operating
232,024
528,163
631,263
Medical facilities
209,108
250,715
281,114
Total
1,236,143
1,673,499
1,939,511
Adjustments:
Seniors housing triple-net:
Non-cash NOI on same store properties
(34,176)
(33,747)
(53,136)
NOI attributable to non same store properties
(170,923)
(262,639)
(355,326)
Subtotal
(205,099)
(296,386)
(408,462)
Seniors housing operating:
NOI attributable to non same store properties
(91,056)
(381,539)
(475,191)
Subtotal
(91,056)
(381,539)
(475,191)
Medical facilities:
Non-cash NOI on same store properties
(5,720)
(5,248)
(3,290)
NOI attributable to non same store properties
(51,383)
(91,417)
(121,313)
Subtotal
(57,103)
(96,665)
(124,603)
Total
(353,258)
(774,590)
(1,008,256)
Same store cash net operating income:
Seniors housing triple-net
589,912
598,235
618,672
Seniors housing operating
140,968
146,624
156,072
Medical facilities
152,005
154,050
156,511
Total
$
882,885
$
898,909
$
931,255
Same Store Cash NOI Property Reconciliation:
Total properties
1,260
Acquisitions
(490)
Developments
(32)
Disposals/Held-for-sale
(21)
Segment transitions
(40)
Other(1)
(12)
Same store properties
(1) Includes nine land parcels and three loans.
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 1 to our consolidated financial statements for further information on significant accounting policies that impact us. There were no material changes to these policies in 2014.
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 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations

---

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, 2014
December 31, 2013
Principal balance
Fair value change
Principal balance
Fair value change
Senior unsecured notes
$
7,817,154
$
(547,358)
$
7,421,707
$
(408,790)
Secured debt
2,673,480
(93,580)
2,787,236
(102,211)
Totals
$
10,490,634
$
(640,938)
$
10,208,943
$
(511,001)
Our variable rate debt, including our unsecured line of credit arrangements, is reflected at fair value. 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 result in increased annual interest expense of $9,838,000. At December 31, 2013, we had $1,089,362,000 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 $10,894,000.
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, 2014, 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 $500,000 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, 2014
December 31, 2013
Carrying value
Fair value change
Carrying value
Fair value change
Foreign currency exchange contracts
$
54,247
$
4,242
$
4,066
$
(2,964)
Debt designated as hedges
1,851,189
13,000
1,146,596
8,002
Totals
$
1,905,436
$
17,242
$
1,150,662
$
5,038

---

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 Health Care REIT, Inc.
We have audited the accompanying consolidated balance sheets of Health Care REIT, Inc. as of December 31, 2014 and 2013, and the related consolidated statements of comprehensive income, equity, and cash flows for each of the three years in the period ended December 31, 2014. 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 Health Care REIT, Inc. at December 31, 2014 and 2013, and the consolidated results of its operations and its cash flows for each of the three years in the period ended December 31, 2014, 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 method for reporting discontinued operations effective January 1, 2014.
We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), Health Care REIT, Inc.’s internal control over financial reporting as of December 31, 2014, 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 20, 2015 expressed an unqualified opinion thereon.
/s/ Ernst & Young LLP
Toledo, Ohio
February 20, 2015
December 31,
December 31,
Assets
(In thousands)
Real estate investments:
Real property owned:
Land and land improvements
$
2,046,541
$
1,878,877
Buildings and improvements
21,799,313
20,625,515
Acquired lease intangibles
1,135,936
1,070,754
Real property held for sale, net of accumulated depreciation
323,818
18,502
Construction in progress
186,327
141,085
Gross real property owned
25,491,935
23,734,733
Less accumulated depreciation and amortization
(3,020,908)
(2,386,658)
Net real property owned
22,471,027
21,348,075
Real estate loans receivable
380,169
332,146
Net real estate investments
22,851,196
21,680,221
Other assets:
Investments in unconsolidated entities
744,151
479,629
Goodwill
68,321
68,321
Deferred loan expenses
69,282
70,875
Cash and cash equivalents
473,726
158,780
Restricted cash
79,697
72,821
Receivables and other assets
727,923
553,310
Total other assets
2,163,100
1,403,736
Total assets
$
25,014,296
$
23,083,957
Liabilities and equity
Liabilities:
Borrowings under primary unsecured credit facility
$
-
$
130,000
Senior unsecured notes
7,766,251
7,379,308
Secured debt
2,977,713
3,058,248
Capital lease obligations
84,049
84,458
Accrued expenses and other liabilities
626,825
640,573
Total liabilities
11,454,838
11,292,587
Redeemable noncontrolling interests
86,409
35,039
Equity:
Preferred stock
1,006,250
1,017,361
Common stock
328,835
289,461
Capital in excess of par value
14,740,712
12,418,520
Treasury stock
(35,241)
(21,263)
Cumulative net income
2,842,022
2,329,869
Cumulative dividends
(5,635,923)
(4,600,854)
Accumulated other comprehensive income (loss)
(77,009)
(24,531)
Other equity
5,507
6,020
Total Health Care REIT, Inc. stockholders’ equity
13,175,153
11,414,583
Noncontrolling interests
297,896
341,748
Total equity
13,473,049
11,756,331
Total liabilities and equity
$
25,014,296
$
23,083,957
See accompanying notes
CONSOLIDATED BALANCE SHEETS
HEALTH CARE REIT, INC. AND SUBSIDIARIES
Year Ended December 31,
Revenues:
Rental income
$
1,405,767
$
1,227,589
$
1,063,214
Resident fees and services
1,892,237
1,616,290
697,494
Interest income
37,667
32,663
39,065
Other income
7,875
4,066
5,271
Total revenues
3,343,546
2,880,608
1,805,044
Expenses:
Interest expense
481,039
458,360
361,565
Property operating expenses
1,403,358
1,206,813
567,989
Depreciation and amortization
844,130
865,800
506,220
General and administrative
142,943
108,318
97,341
Transaction costs
69,538
133,401
61,609
Loss (gain) on derivatives, net
(1,495)
4,470
(1,825)
Loss (gain) on extinguishment of debt, net
9,558
(909)
(775)
Provision for loan losses
-
2,110
27,008
Other expenses
10,262
-
-
Total expenses
2,959,333
2,778,363
1,619,132
Income from continuing operations before income taxes
and income from unconsolidated entities
384,213
102,245
185,912
Income tax (expense) benefit
1,267
(7,491)
(7,612)
Income (loss) from unconsolidated entities
(27,426)
(8,187)
2,482
Income from continuing operations
358,054
86,567
180,782
Discontinued operations:
Gain (loss) on sales of properties, net
6,411
49,138
100,549
Impairment of assets
-
-
(29,287)
Income (loss) from discontinued operations, net
2,575
42,796
Discontinued operations, net
7,135
51,713
114,058
Gain (loss) on real estate dispositions, net
147,111
-
-
Net income
512,300
138,280
294,840
Less: Preferred stock dividends
65,408
66,336
69,129
Less: Preferred stock redemption charge
-
-
6,242
Less: Net income (loss) attributable to noncontrolling interests(1)
(6,770)
(2,415)
Net income attributable to common stockholders
$
446,745
$
78,714
$
221,884
Average number of common shares outstanding:
Basic
306,272
276,929
224,343
Diluted
307,747
278,761
225,953
Earnings per share:
Basic:
Income from continuing operations
attributable to common stockholders
$
1.44
$
0.10
$
0.48
Discontinued operations, net
0.02
0.19
0.51
Net income attributable to common stockholders*
$
1.46
$
0.28
$
0.99
Diluted:
Income from continuing operations
attributable to common stockholders
$
1.43
$
0.10
$
0.48
Discontinued operations, net
0.02
0.19
0.50
Net income attributable to common stockholders*
$
1.45
$
0.28
$
0.98
* Amounts may not sum due to rounding
(1) Includes amounts attributable to redeemable noncontrolling interests
See accompanying notes
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
HEALTH CARE REIT, INC. AND SUBSIDIARIES
(In thousands, except per share data)
Year Ended December 31,
Net income
$
512,300
$
138,280
$
294,840
Other comprehensive income (loss):
Unrecognized gain/(loss) on equity investments
(173)
Unrecognized gain/(loss) on cash flow hedges
4,409
1,898
1,604
Unrecognized actuarial gain/(loss)
(137)
1,522
(226)
Foreign currency translation gain/(loss)
(71,964)
(23,247)
(881)
Total other comprehensive income (loss)
(67,303)
(20,000)
Total comprehensive income
444,997
118,280
295,740
Total comprehensive income attributable to noncontrolling interests(1)
(14,678)
(13,267)
(2,415)
Total comprehensive income attributable to stockholders
$
430,319
$
105,013
$
293,325
(1) Includes amounts attributable to redeemable noncontrolling interests.
See accompanying notes
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (CONTINUED)
HEALTH CARE REIT, INC. AND SUBSIDIARIES
(In thousands)
(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, 2011
$
1,010,417
$
192,299
$
7,019,714
$
(13,535)
$
1,893,806
$
(2,972,129)
$
(11,928)
$
6,120
$
153,883
$
7,278,647
Comprehensive income:
Net income
297,255
(1,480)
295,775
Other comprehensive income:
Total comprehensive income
296,675
Net change in noncontrolling interests
(7,136)
73,315
66,179
Distributions to noncontrolling interests
Amounts related to issuance of common stock
from dividend reinvestment and stock
incentive plans, net of forfeitures
2,658
149,955
(4,340)
(2,534)
145,739
Net proceeds from sale of common stock
64,400
3,382,532
3,446,932
Equity component of convertible debt
1,039
2,236
3,275
Proceeds from issuance of preferred shares
287,500
(9,813)
277,687
Redemption of preferred stock
(275,000)
6,202
(6,242)
(275,040)
Option compensation expense
2,875
2,875
Cash dividends paid:
Common stock cash dividends
(653,321)
(653,321)
Preferred stock cash dividends
(69,129)
(69,129)
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
Distributions to noncontrolling interests
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
Equity component of convertible debt
(1,543)
(555)
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
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
See accompanying notes
CONSOLIDATED STATEMENTS OF EQUITY
HEALTH CARE REIT, INC. AND SUBSIDIARIES
Year Ended December 31,
(In thousands)
Operating activities
Net income
$
512,300
$
138,280
$
294,840
Adjustments to reconcile net income to
net cash provided from (used in) operating activities:
Depreciation and amortization
844,130
873,960
533,585
Other amortization expenses
6,971
8,097
15,185
Provision for loan losses
-
2,110
27,008
Impairment of assets
-
-
29,287
Stock-based compensation expense
32,075
20,177
18,521
Loss (gain) on derivatives, net
(1,495)
4,470
(1,825)
Loss (gain) on extinguishment of debt, net
9,558
(909)
(775)
Loss (income) from unconsolidated entities
27,426
8,187
(2,482)
Rental income in excess of cash received
(74,552)
(46,068)
(32,362)
Amortization related to above (below) market leases, net
Loss (gain) on sales of properties, net
(153,522)
(49,138)
(100,549)
Distributions by unconsolidated entities
9,060
8,885
17,607
Increase (decrease) in accrued expenses and other liabilities
(48,381)
67,557
38,213
Decrease (increase) in receivables and other assets
(25,639)
(47,571)
(18,285)
Net cash provided from (used in) operating activities
1,138,670
988,497
818,133
Investing activities
Cash disbursed for acquisitions
(2,210,600)
(3,597,955)
(2,923,251)
Cash disbursed for capital improvements to existing properties
(132,780)
(135,832)
(135,450)
Cash disbursed for construction in progress
(197,881)
(247,560)
(286,410)
Capitalized interest
(7,150)
(6,700)
(9,777)
Investment in real estate loans receivable
(202,207)
(117,059)
(665,094)
Other investments, net of payments
(100,033)
(15,634)
25,425
Principal collected on real estate loans receivable
105,496
102,886
35,020
Contributions to unconsolidated entities
(353,496)
(99,769)
(227,735)
Distributions by unconsolidated entities
57,183
30,853
13,136
Proceeds from (payments on) derivatives
10,269
(6,803)
6,652
Decrease (increase) in restricted cash
(6,072)
79,957
(35,766)
Proceeds from sales of real property
911,065
482,023
610,271
Net cash provided from (used in) investing activities
(2,126,206)
(3,531,593)
(3,592,979)
Financing activities
Net increase (decrease) under unsecured lines of credit arrangements
(130,000)
130,000
(610,000)
Proceeds from issuance of senior unsecured notes
773,992
1,756,192
2,025,708
Payments to extinguish senior unsecured notes
(365,188)
(517,625)
(370,524)
Net proceeds from the issuance of secured debt
109,503
89,208
157,418
Payments on secured debt
(341,839)
(674,103)
(406,210)
Net proceeds from the issuance of common stock
2,343,868
1,854,637
3,581,292
Net proceeds from the issuance of preferred stock
-
-
277,687
Redemption of preferred stock
-
-
(275,000)
Decrease (increase) in deferred loan expenses
(16,782)
(13,503)
(7,152)
Contributions by noncontrolling interests(1)
9,962
5,072
24,115
Distributions to noncontrolling interests(1)
(43,691)
(35,592)
(29,353)
Acquisitions of non-controlling interests
(1,175)
(23,247)
-
Cash distributions to stockholders
(1,035,069)
(906,275)
(722,450)
Other financing activities
(409)
2,906
(403)
Net cash provided from (used in) financing activities
1,303,172
1,667,670
3,645,128
Effect of foreign currency translation on cash and cash equivalents
(690)
-
Increase (decrease) in cash and cash equivalents
314,946
(874,984)
870,282
Cash and cash equivalents at beginning of period
158,780
1,033,764
163,482
Cash and cash equivalents at end of period
$
473,726
$
158,780
$
1,033,764
Supplemental cash flow information:
Interest paid
$
504,165
$
447,108
$
369,511
Income taxes paid
18,548
12,110
3,071
(1) Includes amounts attributable to redeemable noncontrolling interests.
See accompanying notes.
CONSOLIDATED STATEMENTS OF CASH FLOWS
HEALTH CARE REIT, INC. AND SUBSIDIARIES
1. Business
Health Care REIT, Inc., an S&P 500 company with headquarters in Toledo, Ohio, is an equity real estate investment trust (“REIT”) that invests in seniors housing and health care real estate. Our full service platform offers property management and development services to our customers. As of December 31, 2014, our diversified portfolio consisted of 1,328 properties in 46 states, the United Kingdom, and Canada. Founded in 1970, we were the first real estate investment trust 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 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 (“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 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.
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 medical office building 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
HEALTH CARE REIT, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Deferred loan expenses are costs incurred by us in connection with the issuance, assumption and amendments of debt 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 less than majority owned entities are reported under the equity method of accounting when our interests represent either (1) general partnership interests subject to substantive participating or kick-out rights that have been granted to the limited partners, or (2) limited partnership interests with no control over major operating and financial policies of the entities. 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.
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. In accordance with ASC 810, the redeemable noncontrolling interests were classified outside of permanent equity, as a mezzanine item, in the balance sheet.
During 2014, we entered into a DownREIT partnership which gives 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 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
HEALTH CARE REIT, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
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.
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
HEALTH CARE REIT, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
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 April 2014, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update 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”), which amends U.S. GAAP to require reporting of discontinued operations only if the disposal represents a strategic shift that has (or will have) a major effect on an entity’s operations and financial results. This pronouncement will be effective for the first annual reporting period beginning after December 15, 2014 with early adoption permitted. We adopted ASU 2014-08 on January 1, 2014 on a prospective basis. The adoption of this guidance did not have a material impact on our consolidated financial position or results of operations.
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, 2016, and early adoption is not permitted. Accordingly, the standard is effective for us on January 1, 2017. 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.
Reclassifications
Certain amounts in prior years have been reclassified to conform to current year presentation.
HEALTH CARE REIT, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
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. During the year ended December 31, 2014, we finalized our purchase price allocation of certain previously reported acquisitions and there were no material changes from those previously disclosed.
Seniors Housing Triple-net Activity
The following provides our purchase price allocations and other seniors housing triple-net real property investment activity for the periods presented (in thousands):
Year Ended December 31,
2014(1)
Land and land improvements
$
141,387
$
54,596
$
87,372
Buildings and improvements
1,365,638
360,594
1,000,278
Acquired lease intangibles
19,196
-
-
Restricted cash
-
-
Receivables and other assets
4,895
1,020
Total assets acquired(2)
1,531,116
416,399
1,087,769
Secured debt
(130,638)
(9,810)
(89,881)
Senior unsecured notes
(48,567)
-
-
Accrued expenses and other liabilities
(9,067)
(540)
(3,542)
Total liabilities assumed
(188,272)
(10,350)
(93,423)
Capital in excess of par
-
-
Noncontrolling interests
-
-
(17,215)
Non-cash acquisition related activity(3)
(3,453)
(12,207)
(616)
Cash disbursed for acquisitions
1,339,391
393,842
977,436
Construction in progress additions
135,349
145,624
180,009
Less: Capitalized interest
(4,582)
(4,828)
(6,042)
Accruals
Foreign currency translation
-
-
Non-cash related activity
(14,459)
-
-
Cash disbursed for construction in progress
116,729
140,796
173,967
Capital improvements to existing properties
18,901
35,912
67,026
Total cash invested in real property, net of cash acquired
$
1,475,021
$
570,550
$
1,218,429
(1) Includes acquisitions with an aggregate purchase price of $1,081,607,000 for which the allocation of the purchase price consideration is preliminary and subject to change.
(2) Excludes $1,382,000, $0, and $2,031,000 of cash acquired during the year ended December 31, 2014, 2013 and 2012, respectively.
(3) For the year ended December 31, 2013, relates to an asset swap transaction. Please refer to Note 5 for additional information.
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. Certain of our subsidiaries’ functional currencies are the local currencies of their respective countries. See Note 2 for information regarding our foreign currency policies.
The following is a summary of our seniors housing operating real property investment activity for the periods presented (in thousands):
HEALTH CARE REIT, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Year Ended December 31,
2014(1)
Land and land improvements
$
57,534
$
445,152
$
146,332
Buildings and improvements
297,314
4,275,046
1,341,560
Acquired lease intangibles
12,983
396,444
118,077
Construction in progress
27,957
-
-
Restricted cash
44,427
1,296
Receivables and other assets
9,327
79,564
10,125
Total assets acquired(2)
405,919
5,240,633
1,617,390
Secured debt
(19,834)
(1,275,245)
(124,190)
Accrued expenses and other liabilities
(17,802)
(96,709)
(17,347)
Total liabilities assumed
(37,636)
(1,371,954)
(141,537)
Noncontrolling interests
(482)
(232,575)
(56,884)
Non-cash acquisition related activity(3)
-
(555,563)
-
Cash disbursed for acquisitions
367,801
3,080,541
1,418,969
Construction in progress additions
12,291
3,894
-
Less: Capitalized interest
(714)
(57)
-
Less: Foreign currency translation
(2,012)
-
-
Cash disbursed for construction in progress
9,565
3,837
-
Capital improvements to existing properties
86,803
72,258
21,751
Total cash invested in real property, net of cash acquired
$
464,169
$
3,156,636
$
1,440,720
(1) Includes an aggregate purchase price of $368,313,000 relating to acquisitions for which the allocation of the purchase price consideration is preliminary and subject to change.
(2) Excludes $9,060,000, $92,148,000 and $20,691,000 of cash acquired during the years ended December 31, 2014, 2013 and 2012, respectively.
(3) Represents Sunrise loan and noncontrolling interest acquisitions during the first quarter of 2013.
Medical Facilities Activity
Accrued contingent consideration related to certain medical facility acquisitions was $27,374,000, $26,187,000 and $34,692,000 as of December 31, 2014, 2013 and 2012, respectively. Of the amount recognized, $12,500,000 is required to be settled in the Company’s common stock upon the achievement of certain performance thresholds. The following is a summary of our medical facilities real property investment activity for the periods presented (in thousands):
HEALTH CARE REIT, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Year Ended December 31,
2014(1)
Land and land improvements
$
63,129
$
14,515
$
68,489
Buildings and improvements
567,847
156,087
632,208
Acquired lease intangibles
46,661
9,432
115,233
Restricted cash
-
Receivables and other assets
-
4,469
Total assets acquired
677,637
180,883
821,374
Secured debt
(66,113)
(55,884)
(267,527)
Accrued expenses and other liabilities
(22,293)
(1,041)
(25,928)
Total liabilities assumed
(88,406)
(56,925)
(293,455)
Noncontrolling interests
(39,987)
(386)
(193)
Non-cash acquisition related activity(2)
(45,836)
-
(880)
Cash disbursed for acquisitions
503,408
123,572
526,846
Construction in progress additions
99,878
123,494
134,505
Less: Capitalized interest
(1,854)
(1,815)
(3,735)
Accruals(3)
(26,437)
(18,752)
(18,327)
Cash disbursed for construction in progress
71,587
102,927
112,443
Capital improvements to existing properties
27,076
27,662
46,673
Total cash invested in real property, net of cash acquired
$
602,071
$
254,161
$
685,962
(1) Includes acquisitions with an aggregate purchase price of $489,042,000 for which the allocation of the purchase price consideration is preliminary and subject to change.
(2) For the year ended December 31, 2014, relates to an acquisition of assets previously financed as real estate loans. Please refer to Note 6 for additional information.
(3) 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, 2014
December 31, 2013
December 31, 2012
Development projects:
Seniors housing triple-net
$
71,569
$
133,181
$
146,913
Medical facilities
127,290
127,363
189,135
Total development projects
198,859
260,544
336,048
Expansion projects
24,804
26,395
4,983
Total construction in progress conversions
$
223,663
$
286,939
$
341,031
At December 31, 2014, 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):
$
1,283,484
1,259,168
1,250,683
1,243,452
1,209,371
Thereafter
9,576,144
Totals
$
15,822,302
HEALTH CARE REIT, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
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, 2014
December 31, 2013
Assets:
In place lease intangibles
$
988,290
$
937,357
Above market tenant leases
65,684
55,939
Below market ground leases
62,426
59,165
Lease commissions
19,536
18,293
Gross historical cost
1,135,936
1,070,754
Accumulated amortization
(776,501)
(571,008)
Net book value
$
359,435
$
499,746
Weighted-average amortization period in years
17.7
16.7
Liabilities:
Below market tenant leases
$
91,168
$
76,381
Above market ground leases
7,859
9,490
Gross historical cost
99,027
85,871
Accumulated amortization
(40,891)
(34,434)
Net book value
$
58,136
$
51,437
Weighted-average amortization period in years
14.4
14.3
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
$
$
$
1,120
Property operating expenses related to above/below market ground leases, net
(1,248)
(1,208)
(1,285)
Depreciation and amortization related to in place lease intangibles and lease commissions
(214,966)
(246,938)
(103,044)
The future estimated aggregate amortization of intangible assets and liabilities is as follows for the periods presented (in thousands):
Assets
Liabilities
$
58,224
$
3,278
56,656
9,513
54,241
10,795
53,715
7,758
23,038
6,474
Thereafter
113,561
20,318
Totals
$
359,435
$
58,136
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):
HEALTH CARE REIT, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Year Ended
December 31, 2014
December 31, 2013
December 31, 2012
Real property dispositions:
Seniors housing triple-net
$
747,720
$
189,572
$
372,378
Medical facilities
45,695
259,367
149,344
Total dispositions
793,415
448,939
521,722
Gain (loss) on sales of real property, net
153,522
49,138
100,549
Seller financing on sales of real property
-
(3,850)
(12,000)
Non-cash disposition activity
(35,872)
(12,204)
-
Proceeds from real property sales
$
911,065
$
482,023
$
610,271
Discontinued Operations
As discussed in Note 2, we adopted ASU 2014-08 effective January 1, 2014. During the year-ended December 31, 2014, we sold seniors housing triple-net properties previously held for sale with a balance of $18,502,000 for a gain of $6,411,000. 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. 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 periods presented (in thousands):
Year Ended December 31,
Revenues:
Rental income
$
$
18,377
$
96,378
Expenses:
Interest expense
4,246
21,735
Property operating expenses
-
3,396
4,482
Provision for depreciation
-
8,160
27,365
Income (loss) from discontinued operations, net
$
$
2,575
$
42,796
Dispositions and Assets Held for Sale
Pursuant to our adoption of 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
$
90,541
$
108,133
$
104,478
Expenses:
Interest expense
20,339
22,119
23,298
Property operating expenses
1,755
3,024
2,716
Provision for depreciation
26,715
32,128
31,238
Total expenses
48,809
57,271
57,252
Income (loss) from real estate dispositions, net
$
41,732
$
50,862
$
47,226
HEALTH CARE REIT, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
6. Real Estate Loans Receivable
The following is a summary of our real estate loans receivable (in thousands):
December 31,
Mortgage loans
$
188,651
$
146,987
Other real estate loans
191,518
185,159
Totals
$
380,169
$
332,146
The following is a summary of our real estate loan activity for the periods presented (in thousands):
Year Ended
December 31, 2014
December 31, 2013
December 31, 2012
Seniors
Seniors
Seniors
Seniors
Housing
Medical
Housing
Medical
Housing
Housing
Medical
Triple-net
Facilities
Totals
Triple-net
Facilities
Totals
Triple-net
Operating(2)
Facilities
Totals
Advances on real estate loans receivable:
Investments in new loans
$
61,730
$
60,902
$
122,632
$
41,180
$
4,095
$
45,275
$
2,220
$
580,834
$
38,336
$
621,390
Draws on existing loans
59,420
20,155
79,575
71,315
4,319
75,634
43,645
-
43,704
Sub-total
121,150
81,057
202,207
112,495
8,414
120,909
45,865
580,834
38,395
665,094
Less: Seller financing on property sales
-
-
-
(3,850)
-
(3,850)
-
-
-
-
Net cash advances on real estate loans
121,150
81,057
202,207
108,645
8,414
117,059
45,865
580,834
38,395
665,094
Receipts on real estate loans receivable:
Loan payoffs
71,004
48,258
119,262
69,596
-
69,596
12,555
-
-
12,555
Principal payments on loans
31,998
32,070
33,216
33,290
22,395
-
22,465
Sub-total
103,002
48,330
151,332
102,812
102,886
34,950
-
35,020
Less: Non-cash activity(1)
-
(45,836)
(45,836)
-
-
-
-
-
-
-
Net cash receipts on real estate loans
103,002
2,494
105,496
102,812
102,886
34,950
-
35,020
Net cash advances (receipts) on real estate loans
18,148
78,563
96,711
5,833
8,340
14,173
10,915
580,834
38,325
630,074
Change in balance due to foreign currency translation
(2,852)
-
(2,852)
1,402
-
1,402
-
-
-
-
Net change in real estate loans receivable
$
15,296
$
32,727
$
48,023
$
7,235
$
8,340
$
15,575
$
10,915
$
580,834
$
38,325
$
630,074
(1) Represents loan to Sunrise Senior Living, Inc. that was acquired upon merger consummation on January 9, 2013.
(2) Represents an acquisition of assets previously financed as a real estate loan.
The following is a summary of the allowance for losses on loans receivable for the periods presented (in thousands):
Year Ended December 31,
Balance at beginning of year
$
-
$
-
$
-
Provision for loan losses
-
2,110
27,008
Charge-offs
-
(2,110)
(27,008)
Balance at end of year
$
-
$
-
$
-
The following is a summary of our loan impairments (in thousands):
HEALTH CARE REIT, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Year Ended December 31,
Balance of impaired loans at end of year
$
21,000
$
$
4,230
Allowance for loan losses
-
-
-
Balance of impaired loans not reserved
$
21,000
$
$
4,230
Average impaired loans for the year
$
10,750
$
2,365
$
5,237
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
December 31, 2014
December 31, 2013
Seniors housing triple-net(1)
10% to 49%
$
31,511
$
27,513
Seniors housing operating
10% to 50%
539,147
263,838
Medical facilities
36% to 49%
173,493
188,278
Total
$
744,151
$
479,629
(1) As of December 31, 2013, asset amounts include an available-for-sale equity investment. See Note 16 for additional information.
At December 31, 2014, the aggregate unamortized basis difference of our joint venture investments of $175,369,000 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.
Summarized combined financial information for our investments in unconsolidated entities held as of December 31, 2014 is as follows (dollars in thousands):
Year Ended December 31,
Net real estate investments
$
2,470,623
$
1,589,590
Other assets
998,648
564,109
Total assets
3,469,271
2,153,699
Total liabilities
1,778,540
1,227,053
Redeemable noncontrolling interests
40,525
29,482
Total equity
$
1,650,206
$
897,164
Year Ended December 31,
2014(1)
2013(2)
Total revenues
$
1,875,744
$
1,678,485
$
324,941
Net income (loss)
316,139
(17,064)
10,702
(1) Beginning February 28, 2014, includes the financial information for the Senior Resource Group unconsolidated entities.
(2) Beginning January 9, 2013, includes the financial information for the Sunrise management company and the unconsolidated Sunrise Senior Living properties.
HEALTH CARE REIT, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
8. Credit Concentration
The following table summarizes certain information about our credit concentration as of December 31, 2014, excluding our share of investments in unconsolidated entities. See Note 7 for additional information (dollars in thousands):
Number of
Total
Percent of
Concentration by investment:(1)
Properties
Investment
Investment(2)
Sunrise Senior Living(3)
$
4,130,125
18%
Genesis Healthcare
2,657,907
12%
Brookdale
1,401,834
6%
Revera
1,038,099
5%
Benchmark
917,995
4%
Remaining portfolio
12,705,236
55%
Totals
1,260
$
22,851,196
100%
_____________________
(1) Genesis is in our seniors housing triple-net segment. Sunrise Senior Living and Revera are in our seniors housing operating segment. Brookdale and Benchmark are in both our seniors housing triple-net and seniors housing operating segments.
(2) Investments with our top five relationships comprised 44% of total investments at December 31, 2013.
(3) For the year ended December 31, 2014, we recognized $895,897,000 of revenue from Sunrise Senior Living.
9. Borrowings Under Credit Facilities and Related Items
On July 25, 2014, we closed on a new 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 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 through an accordion feature. The primary unsecured credit facility also allows us to borrow up to $500,000,000 in alternative currencies (none outstanding at December 31, 2014). Borrowings under the unsecured revolving credit facility are subject to interest payable at the applicable margin over LIBOR interest rate (1.22% at December 31, 2014). The applicable margin is based on certain of our debt ratings and was 1.150% at December 31, 2014. In addition, we pay a facility fee quarterly to each bank based on the bank’s respective commitment amount. The facility fee depends on certain of our debt ratings and was 0.200% at December 31, 2014. The primary unsecured credit facility provides us with additional borrowing capacity and extends the agreement to October 31, 2018. It can be extended for an additional year at our option.
The following information relates to aggregate borrowings under our primary unsecured credit facility for the periods presented (dollars in thousands):
Year Ended December 31,
Balance outstanding at year end(1)
$
-
$
130,000
$
-
Maximum amount outstanding at any month end
$
637,000
$
1,019,050
$
897,000
Average amount outstanding (total of daily
principal balances divided by days in period)
$
207,452
$
488,842
$
191,378
Weighted-average interest rate (actual interest
expense divided by average borrowings outstanding)
1.50%
1.45%
1.80%
(1) As of December 31, 2014, letters of credit in the aggregate amount of $71,276,000 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
HEALTH CARE REIT, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
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, 2014, the annual principal payments due on these debt obligations were as follows (in thousands):
Senior
Secured
Unsecured Notes(1,2)
Debt (1,3)
Totals
$
-
$
399,813
$
399,813
700,000
412,248
1,112,248
450,000
358,023
808,023
450,000
436,884
886,884
2019(4,5)
1,315,499
370,072
1,685,571
Thereafter(6,7)
4,901,655
964,725
5,866,380
Totals
$
7,817,154
$
2,941,765
$
10,758,919
(1) Amounts represent principal amounts due and do not include unamortized premiums/discounts or other fair value adjustments as reflected on the consolidated balance sheet.
(2) Annual interest rates range from 1.32% to 6.5%.
(3) Annual interest rates range from 1.0% to 7.98%. Carrying value of the properties securing the debt totaled $5,424,956,000 at December 31, 2014.
(4) On July 25, 2014, we refinanced the funding on a $250,000,000 Canadian-denominated unsecured term credit facility (approximately $215,498,664 based on the Canadian/U.S. Dollar exchange rate on December 31, 2014). 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 115 basis points (2.4% at December 31, 2014).
(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 115 basis points (1.32% at December 31, 2014).
(6) On November 20, 2013, we completed funding on £550,000,000 (approximately $853,790,000 based on the Sterling/U.S. Dollar exchange rate on December 31, 2014) of 4.8% senior unsecured notes due 2028.
(7) On November 25, 2014, we completed funding on £500,000,000 (approximately $781,900,000 based on the Sterling/U.S. Dollar exchange rate on December 31, 2014) of 4.5% senior unsecured notes due 2034.
The following is a summary of our senior unsecured note principal activity during the periods presented (dollars in thousands):
Year Ended
December 31, 2014
December 31, 2013
December 31, 2012
Weighted Avg.
Weighted Avg.
Weighted Avg.
Amount
Interest Rate
Amount
Interest Rate
Amount
Interest Rate
Beginning balance
$
7,421,707
4.395%
$
5,894,403
4.675%
$
4,464,927
5.133%
Debt issued
838,804
4.572%
2,036,930
3.824%
1,800,000
3.691%
Debt extinguished
(298,567)
5.855%
(300,000)
6.000%
(76,853)
8.000%
Debt redeemed
(59,143)
3.000%
(219,295)
3.000%
(293,671)
4.750%
Foreign currency
(85,647)
4.222%
9,669
3.993%
-
0.000%
Ending balance
$
7,817,154
4.385%
$
7,421,707
4.395%
$
5,894,403
4.675%
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, 2014, we received notice of conversion from holders of $59,143,000 of the senior
HEALTH CARE REIT, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
unsecured convertible notes. These notes were converted into 258,542 shares of common stock and we recognized a loss on extinguishment of $974,000, which is reflected on the consolidated statement of comprehensive income. Subsequent to December 31, 2014, we received notices of conversion from holders of $142,238,000 of the senior unsecured convertible notes which are expected to settle by March 31, 2015.
The following is a summary of our secured debt principal activity for the periods presented (dollars in thousands):
Year Ended
December 31, 2014
December 31, 2013
December 31, 2012
Weighted Avg.
Weighted Avg.
Weighted Avg.
Amount
Interest Rate
Amount
Interest Rate
Amount
Interest Rate
Beginning balance
$
3,010,711
5.095%
$
2,311,586
5.140%
$
2,108,384
5.285%
Debt issued
109,503
3.374%
89,208
4.982%
157,418
4.212%
Debt assumed
204,949
4.750%
1,290,858
4.159%
444,744
5.681%
Debt extinguished
(279,559)
4.824%
(614,375)
3.730%
(360,403)
4.672%
Principal payments
(62,280)
4.930%
(56,205)
5.248%
(38,744)
5.456%
Foreign currency
(41,559)
3.811%
(10,361)
4.013%
5.637%
Ending balance
$
2,941,765
4.940%
$
3,010,711
5.095%
$
2,311,586
5.140%
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, 2014, 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 $1,137,000 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. 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):
HEALTH CARE REIT, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
December 31, 2014
December 31, 2013
Derivatives designated as net investment hedges:
Denominated in Canadian Dollars
$
900,000
$
600,000
Denominated in Pounds Sterling
£
350,000
£
350,000
Financial instruments designated as net investment hedges:
Denominated in Canadian Dollars
$
250,000
$
250,000
Denominated in Pounds Sterling
£
1,050,000
£
550,000
Derivatives designated as cash flow hedges
Denominated in U.S. Dollars
$
57,000
$
57,000
Denominated in Canadian Dollars
$
58,000
$
-
Denominated in Pounds Sterling
£
40,000
£
-
Derivative instruments not designated:
Denominated in Canadian Dollars
$
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, 2014
December 31, 2013
December 31, 2012
Gain (loss) on interest rate swap recognized in OCI (effective portion)
OCI
$
(15)
$
(16)
$
3,200
Gain (loss) on interest rate swaps reclassified from AOCI into income (effective portion)
Interest expense
(1,799)
(1,914)
(1,596)
Gain (loss) on forward exchange contracts recognized in income
Gain (loss) on derivatives, net
1,495
(4,470)
1,921
Gain (loss) on interest rate swaps recognized in income
Gain (loss) on derivatives, net
-
-
(96)
Gain on release of cumulative translation adjustment related to net investment hedge of an equity investment
Income (loss) from unconsolidated entities
-
-
Gain (loss) on forward exchange contracts and term loans designated as net investment hedge recognized in OCI
OCI
103,140
(28,244)
(5,134)
12. Commitments and Contingencies
At December 31, 2014, we had eight outstanding letter of credit obligations totaling $82,456,000 and expiring between 2015 and 2018. At December 31, 2014, we had outstanding construction in process of $186,327,000 for leased properties and were committed to providing additional funds of approximately $227,618,000 to complete construction. At December 31, 2014, we had contingent purchase obligations totaling $80,874,000. 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. At December 31, 2014, we had an unfunded commitment of $360,000,000 related to a secured bridge facility with one of our operators for which we are receiving a commitment fee.
HEALTH CARE REIT, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
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, 2014, we had operating lease obligations of $916,404,000 relating to 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, 2014, aggregate future minimum rentals to be received under these noncancelable subleases totaled $27,190,000.
At December 31, 2014, future minimum lease payments due under operating and capital leases are as follows (in thousands):
Operating Leases
Capital Leases(1)
$
15,078
$
13,157
15,158
4,732
15,212
4,732
15,249
4,679
15,208
4,333
Thereafter
840,499
80,093
Totals
$
916,404
$
111,726
(1) Amounts above represent principal and interest obligations under capital lease arrangements. Related assets with a gross value of $185,250,000 and accumulated depreciation of $17,953,000 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, 2014
December 31, 2013
Preferred Stock, $1.00 par value:
Authorized shares
50,000,000
50,000,000
Issued shares
25,875,000
26,108,236
Outstanding shares
25,875,000
26,108,236
Common Stock, $1.00 par value:
Authorized shares
700,000,000
400,000,000
Issued shares
329,487,615
290,024,789
Outstanding shares
328,790,066
289,563,651
Preferred Stock. The following is a summary of our preferred stock activity during the periods presented (dollars in thousands, except per share amounts):
Year Ended
December 31, 2014
December 31, 2013
December 31, 2012
Weighted Avg.
Weighted Avg.
Weighted Avg.
Shares
Dividend Rate
Shares
Dividend Rate
Shares
Dividend Rate
Beginning balance
26,108,236
6.496%
26,224,854
6.493%
25,724,854
7.013%
Shares issued
-
0.000%
-
0.000%
11,500,000
6.500%
Shares redeemed
-
0.000%
-
0.000%
(11,000,000)
7.716%
Shares converted
(233,236)
6.000%
(116,618)
6.000%
-
0.000%
Ending balance
25,875,000
6.500%
26,108,236
6.496%
26,224,854
6.493%
During the three months ended December 31, 2010, we issued 349,854 shares of 6.00% Series H Cumulative Convertible and
HEALTH CARE REIT, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
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.
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
February 2012 public issuance
20,700,000
$
53.50
$
1,107,450
$
1,062,256
August 2012 public issuance
13,800,000
58.75
810,750
778,011
September 2012 public issuance
29,900,000
56.00
1,674,400
1,606,665
2012 Dividend reinvestment plan issuances
2,136,140
56.37
120,411
120,411
2012 Option exercises
341,371
40.86
13,949
13,949
2012 Senior note conversions
1,039,721
-
-
2012 Totals
67,917,232
$
3,726,960
$
3,581,292
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
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):
HEALTH CARE REIT, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Year Ended
December 31, 2014
December 31, 2013
December 31, 2012
Per Share
Amount
Per Share
Amount
Per Share
Amount
Common Stock
$
3.18000
$
969,661
$
3.06000
$
839,939
$
2.96000
$
653,321
Series D Preferred Stock
-
-
-
-
0.50301
2,012
Series F Preferred Stock
-
-
-
-
0.48715
3,410
Series H Preferred Stock
0.00794
2.85840
2.85840
1,000
Series I Preferred Stock
3.25000
46,719
3.25000
46,719
3.25000
46,719
Series J Preferred Stock
1.62510
18,688
1.62510
18,687
1.39038
15,988
Totals
$
1,035,069
$
906,275
$
722,450
Accumulated Other Comprehensive Income. The following is a summary of accumulated other comprehensive income/(loss) for the periods presented (in thousands):
Unrecognized gains (losses) related to:
Foreign Currency Translation
Equity Investments
Actuarial losses
Cash Flow Hedges
Total
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)
Balance at December 31, 2012
$
(881)
$
(216)
$
(2,974)
$
(6,957)
$
(11,028)
Other comprehensive income before reclassification adjustments
(16,750)
(173)
1,522
(16)
(15,417)
Reclassification amount to net income
-
-
-
1,914 (1)
1,914
Net current-period other comprehensive income
(16,750)
(173)
1,522
1,898
(13,503)
Balance at December 31, 2013
$
(17,631)
$
(389)
$
(1,452)
$
(5,059)
$
(24,531)
(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 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. The 2005 Plan replaced the 1995 Stock Incentive Plan and the Stock Plan for Non-Employee Directors. The options granted to officers and key employees under the 1995 Plan vested through 2010 and expire ten years from the date of grant. 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. Under our long-term incentive plan, certain restricted stock awards are performance based. Compensation expense for these performance grants is measured based on the probability of achievement of certain objective and subjective performance goals and is recognized over both the performance period and vesting period. 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. Vesting periods for options, deferred stock units and restricted shares generally range from one to three years for non-employee directors and from three to five years for officers and key employees. Options expire ten years from the date of grant.
The following table summarizes compensation expense recognized for the periods presented (in thousands):
HEALTH CARE REIT, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Year Ended December 31,
Stock options
$
$
1,113
$
2,777
Restricted stock
31,163
19,064
15,744
$
32,075
$
20,177
$
18,521
Stock Options
We have not granted stock options since the year ended December 31, 2012 but some remain outstanding. As of December 31, 2014, there was $1,147,000 of total unrecognized compensation expense related to unvested stock options that is expected to be recognized over a weighted-average period of two years. Stock options outstanding at December 31, 2014 have an aggregate intrinsic value of $19,358,000.
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, 2014, there was $30,692,000 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, 2014:
Restricted Stock
Number of
Weighted-Average
Shares
Grant Date
(000's)
Fair Value
Non-vested at December 31, 2013
$
56.92
Vested
(553)
56.29
Granted
57.59
Terminated
(5)
57.20
Non-vested at December 31, 2014
$
57.94
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
$
446,745
$
78,714
$
221,884
Denominator for basic earnings per
share: weighted-average shares
306,272
276,929
224,343
Effect of dilutive securities:
Employee stock options
Non-vested restricted shares
Convertible senior unsecured notes
1,149
1,067
Dilutive potential common shares
1,475
1,832
1,610
Denominator for diluted earnings per
share: adjusted-weighted average shares
307,747
278,761
225,953
Basic earnings per share
$
1.46
$
0.28
$
0.99
Diluted earnings per share
$
1.45
$
0.28
$
0.98
The diluted earnings per share calculations exclude the dilutive effect of 0, 0, and 182,000 stock options for the years ended December 31, 2014, 2013 and 2012, respectively, because the exercise prices were more than the average market price. The Series H
HEALTH CARE REIT, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
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 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.
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 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):
HEALTH CARE REIT, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
December 31, 2014
December 31, 2013
Carrying
Fair
Carrying
Fair
Amount
Value
Amount
Value
Financial Assets:
Mortgage loans receivable
$
188,651
$
194,935
$
146,987
$
148,088
Other real estate loans receivable
191,518
195,375
185,159
188,920
Available-for-sale equity investments
-
-
1,211
1,211
Cash and cash equivalents
473,726
473,726
158,780
158,780
Foreign currency forward contracts
57,087
57,087
-
-
Financial Liabilities:
Borrowings under unsecured lines of credit arrangements
$
-
$
-
$
130,000
$
130,000
Senior unsecured notes
7,766,251
8,613,702
7,379,308
7,743,730
Secured debt
2,977,713
3,053,067
3,058,248
3,168,775
Foreign currency forward contracts
1,495
1,495
11,637
11,637
Redeemable OP unitholder interests
$
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:
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, 2014
Total
Level
Level
Level
Foreign currency forward contracts(1)
$
55,592
$
-
$
55,592
$
-
Redeemable OP unitholder interests
46,722
-
46,722
-
Totals
$
102,314
$
-
$
102,314
$
-
(1) 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
HEALTH CARE REIT, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
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: seniors housing triple-net, seniors housing operating, medical office buildings and life science. During 2014, we realigned our corporate structure and operating segment designations. Accordingly, the segment information provided in this note has been reclassified to conform to the current presentation for all periods presented. As part of the change in presentation, we removed the “hospitals” operating segment. Amounts previously classified within “hospitals” and aggregated into the medical facilities reporting segment have been reclassified to seniors housing triple-net properties.
Our seniors housing 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 seniors housing 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).
Our medical facility properties include medical office buildings and life science buildings which are aggregated into our medical facilities reportable segment. Our medical office buildings are typically leased to multiple tenants and generally require a certain level of property management. Our life science investment represents an investment in an unconsolidated entity (see Note 7).
We evaluate performance based upon net operating income from continuing operations (“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 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, 2014, 2013 and 2012 is as follows (in thousands):
HEALTH CARE REIT, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Year Ended December 31, 2014:
Seniors Housing Triple-net
Seniors Housing Operating
Medical Facilities
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
$
10,958,269
$
9,531,608
$
4,465,130
$
59,287
$
25,014,296
HEALTH CARE REIT, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Year Ended December 31, 2013:
Seniors Housing Triple-net
Seniors Housing Operating
Medical Facilities
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 (loss) 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
Total assets
$
10,121,813
$
8,984,316
$
3,829,547
$
148,281
$
23,083,957
HEALTH CARE REIT, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Year Ended December 31, 2012
Seniors Housing Triple-net
Seniors Housing Operating
Medical Facilities
Non-segment / Corporate
Total
Rental income
$
762,968
$
-
$
300,246
$
-
$
1,063,214
Resident fees and services
-
697,494
-
-
697,494
Interest income
30,654
6,208
2,203
-
39,065
Other income
2,471
-
1,888
5,271
Total revenues
796,093
703,702
304,337
1,805,044
Property operating expenses
1,082
471,678
95,229
-
567,989
Net operating income from continuing operations
795,011
232,024
209,108
1,237,055
Reconciling items:
Interest expense
1,745
67,524
28,878
263,418
361,565
Loss (gain) on derivatives, net
(1,921)
-
-
(1,825)
Depreciation and amortization
223,921
165,798
116,501
-
506,220
General and administrative
-
-
-
97,341
97,341
Transaction costs
35,705
12,756
13,148
-
61,609
Loss (gain) on extinguishment of debt, net
2,405
(2,697)
(483)
-
(775)
Provision for loan losses
27,008
-
-
-
27,008
Income (loss) from continuing operations before income taxes and income (loss) from unconsolidated entities
504,131
(9,436)
51,064
(359,847)
185,912
Income tax expense
(2,852)
(1,086)
(2,381)
(1,293)
(7,612)
(Loss) income from unconsolidated entities
(33)
(6,364)
8,879
-
2,482
Income from continuing operations
501,246
(16,886)
57,562
(361,140)
180,782
Income (loss) from discontinued operations
130,053
-
(15,995)
-
114,058
Net income (loss)
$
631,299
$
(16,886)
$
41,567
$
(361,140)
$
294,840
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, 2014
December 31, 2013
December 30, 2012
Revenues:
Amount
%
Amount
%
Amount
%
United States
$
2,801,474
83.8%
$
2,489,196
86.4%
$
1,778,507
98.5%
International
542,072
16.2%
391,412
13.6%
26,537
1.5%
Total
$
3,343,546
100.0%
$
2,880,608
100.0%
$
1,805,044
100.0%
As of
December 31, 2014
December 31, 2013
Assets:
Amount
%
Amount
%
United States
$
20,728,477
82.9%
$
19,759,945
85.6%
International
4,285,819
17.1%
3,324,012
14.4%
Total
$
25,014,296
100.0%
$
23,083,957
100.0%
HEALTH CARE REIT, 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
$
1.7861
$
1.4928
$
1.5000
Return of capital
0.8368
1.4176
1.3376
Long-term capital gains
0.1638
0.0448
0.1176
Unrecaptured section 1250 gains
0.3933
0.1048
0.0048
Totals
$
3.1800
$
3.0600
$
2.9600
Our consolidated provision for income taxes is as follows for the periods presented (dollars in thousands):
Year Ended December 31,
Current
$
2,672
$
12,389
$
4,785
Deferred
(3,939)
(4,898)
2,827
Totals
$
(1,267)
$
7,491
$
7,612
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, 2014, 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, 2014 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 year ended December 31, 2014 and 2013, the Canadian and United Kingdom tax benefit amount included in the consolidated provision for income taxes was $6,069,000 and $484,000, respectively. The income tax benefit in 2014 is due primarily to the elimination of deferred tax liabilities in certain United Kingdom property holding companies which offsets the current year tax provision. For the tax year ended December 31, 2012, the Canadian and United Kingdom tax expense amount included in the consolidated provision for income taxes was $596,000.
A reconciliation of income tax expense, which is computed by applying the federal corporate tax rate for the years ended December 31, 2014, 2013 and 2012, to the income tax provision/(benefit) is as follows for the periods presented (dollars in thousands):
HEALTH CARE REIT, 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
$
178,862
$
51,020
$
64,979
Increase / (decrease) in valuation allowance(1)
9,133
18,444
9,234
Tax at statutory rate on earnings not subject to federal income taxes
(189,070)
(88,762)
(72,640)
Foreign permanent depreciation
4,383
22,313
-
Other differences
(4,575)
4,476
6,039
Totals
$
(1,267)
$
7,491
$
7,612
(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
$
(1,020)
$
(34,236)
$
(2,144)
Operating loss and interest deduction carryforwards
47,528
67,215
8,552
Expense accruals and other
26,191
19,309
4,372
Valuation allowance
(85,207)
(71,955)
(12,199)
Totals
$
(12,508)
$
(19,667)
$
(1,419)
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, 2014. 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 $85,207,000 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
$
71,955
$
12,199
$
2,965
Additions:
Purchase price accounting
4,119
41,312
-
Expense
9,133
18,444
9,234
Ending balance
$
85,207
$
71,955
$
12,199
As a result of certain acquisitions, we are subject to corporate level taxes for any related asset dispositions that may occur during the ten-year period immediately after such assets were owned by a C corporation (“built-in gains tax”). The amount of income
HEALTH CARE REIT, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
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, 2014, we acquired certain additional assets with built-in gains as of the date of acquisition that could be subject to the built-in gains tax if disposed of prior to the expiration of the applicable ten-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 (our long-term/post-acute care facilities), 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, 2011 and subsequent years, by the Canada Revenue Agency (“CRA”) and provincial authorities for acquisitions subsequent to May 2102, and by Her Majesty Revenue & Customs (“HMRC”) for acquisitions subsequent to August 2012. 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, 2008.
At December 31, 2014, we had a net operating loss (“NOL”) carryforward related to the REIT of $378,791,000. 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 2034.
At December 31, 2014, 2013 and 2012, we had a net operating loss carryforward related to Canadian entities of $32,085,000, $50,958,000 and $4,275,000, respectively. These Canadian losses have a 20-year carryforward period. At December 31, 2014 and 2013, we had a net operating loss carryforward related to United Kingdom entities of $177,079,000 and $238,741,000, respectively. These United Kingdom losses do not have a finite carryforward period. On the basis of evaluations performed as required by the codification, valuation allowances were recorded to limit the deferred tax assets for the related net operating loss carryforwards to the amount that we believe is more likely than not realizable.
We apply the rules under ASC 740-10 “Accounting for Uncertainty in Income Taxes” for uncertain tax positions using a “more likely than not” recognition threshold for tax positions. Pursuant to these rules, we will initially recognize the financial statement effects of a tax position when it is more likely than not, based on the technical merits of the tax position, that such a position will be sustained upon examination by the relevant tax authorities. If the tax benefit meets the “more likely than not” threshold, the measurement of the tax benefit will be based on our estimate of the ultimate tax benefit to be sustained if audited by the taxing authority. The following table summarizes the activity related to our unrecognized tax benefits for the periods presented (dollars in thousands):
Year Ended December 31,
Gross unrecognized tax benefits at beginning of year
$
6,413
$
6,098
Increases (decreases) in unrecognized tax benefits related to a prior year
-
Increases (decreases) in unrecognized tax benefits related to the current year
-
Lapse in statute of limitations for assessment
(5,556)
(21)
Gross unrecognized tax benefits at end of year
$
$
6,413
The balance of our unrecognized tax benefits as of December 31, 2014 and 2013 was $857,000 and $6,413,000, respectively. During 2014, $6,976,000 (including penalties and interest) relating to the April 1, 2011 Genesis Healthcare Corporation transaction (“Genesis Acquisition”) expired due to the applicable statute of limitations. As a part of the Genesis Acquisition, we received a full
HEALTH CARE REIT, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
indemnification from FC-GEN Operations Investment, LLC covering income taxes or other taxes as well as interest and penalties relating to tax positions taken by FC-GEN Operations Investment, LLC prior to the acquisition. Accordingly, an offsetting indemnification asset was recorded in receivables and other assets on the consolidated balance sheet and was reversed during 2014.
There is no amount of unrecognized tax benefits, currently accrued for, that would have a material impact on the effective tax rate to the extent that would be recognized. There were insignificant uncertain tax positions as of December 31, 2014 for which it is reasonably possible that the amount of unrecognized tax benefits would decrease during 2015. Interest and penalties totaled $137,000 and $253,000, respectively, for the year ended December 31, 2014 and are included in income tax expense.
19. Retirement Arrangements
Under the retirement plan and trust (the “401(k) Plan”), eligible employees may make contributions, and we may make matching contributions and a profit sharing contribution. Our contributions to the 401(k) Plan totaled $2,701,000, $2,562,000, and $2,140,000 in 2014, 2013 and 2012, respectively.
We have a Supplemental Executive Retirement Plan (“SERP”), a non-qualified defined benefit pension plan, which provides one 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 $7,128,000 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 $6,882,000 at December 31, 2014 ($6,453,000 at December 31, 2013).
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.
20. Quarterly Results of Operations (Unaudited)
The following is a summary of our unaudited quarterly results of operations for the years ended December 31, 2014 and 2013 (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, 2014
1st Quarter
2nd Quarter
3rd Quarter
4th Quarter
Revenues
$
801,807
$
826,446
$
847,523
$
867,770
Net income (loss) attributable to common stockholders
50,022
71,829
136,255
188,639
Net income (loss) attributable to common stockholders per share:
Basic
$
0.17
$
0.24
$
0.44
$
0.58
Diluted
0.17
0.24
0.44
0.57
Year Ended December 31, 2013
1st Quarter
2nd Quarter(2)
3rd Quarter
4th Quarter
Revenues - as reported
$
633,915
$
682,125
$
786,930
$
788,577
Discontinued operations
(4,129)
(3,592)
(3,217)
-
Revenues - as adjusted(1)
$
629,786
$
678,533
$
783,713
$
788,577
Net income attributable to common stockholders
$
55,058
$
(8,508)
$
20,691
$
11,473
Net income attributable to common stockholders per share:
Basic
$
0.21
$
(0.03)
$
0.07
$
0.04
Diluted
0.21
(0.03)
0.07
0.04
(1) We have reclassified the income attributable to the properties sold prior to or held for sale at December 31, 2013 to discontinued operations. See Note 5 for additional information.
(2) The decrease in net income and amounts per share are primarily attributable to gains on sales of real estate of $82,492,000 for the first quarter as compared to losses of $29,997,000 for the second quarter.
HEALTH CARE REIT, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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

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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, 2014 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, 2014 did not include an assessment of the internal control over financial reporting for the Gracewell Healthcare acquisition because the business combination occurred during the year ended December 31, 2014. The acquired businesses represent 1% of total assets at December 31, 2014 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, 2015 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, 2014.
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 Health Care REIT, Inc.
We have audited Health Care REIT, Inc.’s internal control over financial reporting as of December 31, 2014, 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). Health Care REIT, 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 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 the Gracewell Healthcare acquisition, which is included in the 2014 consolidated financial statements of Health Care REIT, Inc. and cumulatively constitute 1% of total assets at December 31, 2014 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 Health Care REIT, Inc. also did not include an evaluation of the internal control over financial reporting of the aforementioned relationship.
In our opinion, Health Care REIT, Inc. maintained, in all material respects, effective internal control over financial reporting as of December 31, 2014, 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 Health Care REIT, Inc. as of December 31, 2014 and 2013, and the related consolidated statements of comprehensive income, equity, and cash flows for each of the three years in the period ended December 31, 2014 and our report dated February 20, 2015 expressed an unqualified opinion thereon.
/s/ Ernst & Young LLP
Toledo, Ohio
February 20, 2015

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ITEM 9B. OTHER INFORMATION
Item 9B. Other Information
Preferred Stock - Certificates of Elimination
On February 18, 2015, we filed certificates of elimination with the Delaware Secretary of State, which became effective upon filing, to eliminate from our Second Restated Certificate of Incorporation, as amended, all matters set forth in the certificates of designation for the Junior Participating Preferred Stock, Series A (the “Series A Stock”), and the 6% Series H Cumulative Convertible and Redeemable Preferred Stock (the “Series H Stock”). No shares of the Series A Stock or the Series H Stock were issued or outstanding at the time of the filing of the certificates of elimination.
PART III

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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 30, 2015.
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.hcreit.com/investor-relations/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.hcreit.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.hcreit.com/investor-relations/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.

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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 30, 2015.

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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 30, 2015.

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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 30, 2015.

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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 30, 2015.
PART IV

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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, 2014 and 2013
Consolidated Statements of Comprehensive Income - Years ended December 31, 2014, 2013 and 2012
Consolidated Statements of Equity - Years ended December 31, 2014, 2013 and 2012
Consolidated Statements of Cash Flows - Years ended December 31, 2014, 2013 and 2012
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 111.
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 20, 2015
HEALTH CARE REIT, 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 20, 2015 by the following persons on behalf of the Registrant and in the capacities indicated.
/s/ Jeffrey H. Donahue **
/s/ Judith C. Pelham **
Jeffrey H. Donahue, Chairman of the Board
Judith C. Pelham, Director
/s/ William C. Ballard, Jr.**
/s/ Sergio D. Rivera**
William C. Ballard, Jr., Director
Sergio D. Rivera, Director
/s/ Peter J. Grua **
/s/ R. Scott Trumbull**
Peter J. Grua, 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
Corporate Controller (Principal Accounting Officer)
/s/ Sharon M. Oster **
**By: /s/ Thomas J. DeRosa
Sharon M. Oster, Director
Thomas J. DeRosa, Attorney-in-Fact
Health Care REIT, Inc.
Schedule III
Real Estate and Accumulated Depreciation
December 31, 2014
(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 Triple-Net:
Lafayette, LA$
-
$
1,928
$
10,483
$
$
1,928
$
10,509
$
3,246
204 Energy Parkway
Tulsa, OK
-
3,003
6,025
3,003
6,045
2,603
329 S. 79th E. Ave.
Lakeway, TX
-
5,142
18,574
2,001
5,142
20,575
2000 Medical Dr
Abilene, TX
-
20,987
-
20,987
6565 Central Park Boulevard
Abilene, TX
-
8,187
-
8,187
1250 East N 10th Street
Aboite Twp, IN
-
1,770
19,930
1,601
1,770
21,531
2,352
611 W County Line Rd South
Agawam, MA
-
16,112
2,134
18,246
6,259
1200 Suffield St.
Agawam, MA
-
1,230
13,618
1,230
14,211
1,548
61 Cooper Street
Agawam, MA
-
15,304
15,596
1,643
55 Cooper Street
Agawam, MA
-
10,661
10,697
1,191
464 Main Street
Agawam, MA
-
10,562
10,607
1,181
65 Cooper Street
Akron, OH
-
8,219
8,710
2,346
721 Hickory St.
Alexandria
-
7,535
7,764
1,853
209 Merriman Road
Alexandria, IN
-
6,495
-
6,495
1912 South Park Avenue
Alliance, OH
-
7,723
7,830
1,995
1785 Freshley Ave.
Albertville, AL
2,015
6,203
6,371
1,046
151 Woodham Dr.
Ames, IA
-
8,870
-
8,870
1,118
1325 Coconino Rd.
Anderson, SC
-
6,290
6,709
2,515
311 Simpson Rd.
Annapolis, MD
-
1,010
24,825
1,010
24,976
2,542
35 Milkshake Lane
Ansted, WV
-
14,113
14,221
1,422
106 Tyree Street, P.O. Drawer 400
Andover, MA
-
1,310
12,647
1,310
12,674
1,455
89 Morton Street
Avon Lake, OH
-
10,421
10,562
1,278
345 Lear Rd.
Apple Valley, CA
10,632
16,639
16,716
2,911
11825 Apple Valley Rd.
Asheboro, NC
-
5,032
5,197
1,633
514 Vision Dr.
Aspen Hill, MD
-
-
9,008
1,181
-
10,188
1,081
3227 Bel Pre Road
Asheville, NC
-
3,489
-
3,489
1,536
4 Walden Ridge Dr.
Asheville, NC
-
1,955
2,306
308 Overlook Rd.
Atlanta, GA
7,557
2,058
14,914
1,101
2,080
15,993
10,585
1460 S Johnson Ferry Rd.
Austin, TX
18,729
9,520
1,152
10,667
4,438
12429 Scofield Farms Dr.
Aurora, OH
-
1,760
14,148
1,760
14,254
1,664
505 S. Chillicothe Rd
Aurora, CO
-
2,600
5,906
7,915
2,600
13,821
4,064
14101 E. Evans Ave.
Aurora, CO
-
2,440
28,172
-
2,440
28,172
6,748
14211 E. Evans Ave.
Avon, IN
-
1,830
14,470
-
1,830
14,470
1,904
182 S Country RD. 550E
Avon, IN
-
19,453
-
19,453
10307 E. CR 100 N
Aventura, FL
-
4,540
33,986
4,540
34,424
2,146
2777 NE 183rd Street
Ayer, MA
-
-
22,074
-
22,077
2,260
400 Groton Road
Baltimore, MD
-
1,350
14,884
1,350
15,204
1,624
115 East Melrose Avenue
Baltimore, MD
-
5,039
5,186
6000 Bellona Avenue
Benbrook, TX
-
1,550
13,553
1,550
14,322
1,315
4242 Bryant Irvin Road
Burnaby, BC
9,998
9,094
16,515
-
9,094
16,515
7195 Canada Way
Beachwood, OH
-
1,260
23,478
-
1,260
23,478
8,393
3800 Park East Drive
Boardman, OH
-
1,200
12,800
-
1,200
12,800
2,585
8049 South Ave.
Brandon, MS
-
1,220
10,241
-
1,220
10,241
1,169
140 Castlewoods Blvd
Brecksville, OH
-
19,363
-
19,363
8757 Brecksville Road
Bedford, NH
-
2,250
28,831
2,250
28,836
2,936
25 Ridgewood Road
Bellingham, WA
8,580
1,500
19,861
1,507
19,975
3,380
4415 Columbine Dr.
Brookfield, WI
-
1,300
12,830
-
1,300
12,830
1185 Davidson Road
Brooks, AB
2,478
5,906
-
5,906
951 Cassils Road West
Brookville, IN
-
13,467
-
13,467
11049 State Road 101
Bowling Green, KY
-
3,800
26,700
3,800
26,849
4,409
1300 Campbell Lane
Bellingham, MA
-
9,270
-
-
9,270
-
-
Maple Street and High Street
Bethel Park, PA
-
1,700
16,007
-
1,700
16,007
2,525
5785 Baptist Road
Burlington, NC
-
4,297
5,004
1,545
3619 S. Mebane St.
Burlington, NC
-
5,467
-
5,467
1,735
3615 S. Mebane St.
Burlington, NC
-
11,263
-
11,263
2766 Grand Oaks Blvd
Bluefield, VA
-
12,463
12,495
1,309
Westwood Medical Park
Boca Raton, FL
-
1,440
31,048
1,440
31,941
1,955
1080 Northwest 15th Street
Braintree, MA
-
7,157
1,290
8,447
8,028
1102 Washington St.
Bradenton, FL
-
3,298
-
3,298
1,685
6101 Pointe W. Blvd.
Bradenton, FL
-
9,953
-
9,953
2800 60th Avenue West
Brick, NJ
-
1,290
25,247
1,290
25,525
2,268
458 Jack Martin Blvd.
Brick, NJ
-
1,170
17,372
1,102
1,180
18,464
1,916
515 Jack Martin Blvd
Brick, NJ
-
17,125
17,236
1,772
1594 Route 88
Brookline, MA
-
2,760
9,217
3,369
2,760
12,586
1,327
30 Webster Street
Brooklyn Park, MD
-
1,290
16,329
1,290
16,358
1,732
613 Hammonds Lane
Burleson, TX
-
13,985
14,235
1,391
300 Huguley Boulevard
Burleson, TX
-
3,150
10,437
-
3,150
10,437
621 Old Highway 1187
Bartlesville, OK
-
1,380
-
1,380
5420 S.E. Adams Blvd.
Broadview Heights, OH
-
12,400
2,393
14,793
4,705
2801 E. Royalton Rd.
Baltic, OH
-
8,709
8,898
2,226
130 Buena Vista St.
Braintree, England
-
-
16,789
-
-
16,789
Meadow Park Tortoiseshell Way
Bremerton, WA
-
2,210
2,354
3231 Pine Road
Bremerton, WA
-
10,420
10,613
1,300
3201 Pine Road NE
Bremerton, WA
-
2,899
-
2,899
3210 Rickey Road
Beattyville, KY
-
6,900
7,560
1,935
249 E. Main St.
Burlington, NJ
-
1,700
12,554
1,700
13,020
1,552
115 Sunset Road
Burlington, NJ
-
1,170
19,205
1,170
19,372
1,916
2305 Rancocas Road
Beverly Hills, CA
9,623
6,000
13,385
-
6,000
13,385
220 N Clark Drive
Bridgewater, NJ
-
1,850
3,050
-
1,850
3,050
1,244
875 Route 202/206 North
Bridgewater, NJ
-
1,730
48,201
1,746
49,125
5,042
2005 Route 22 West
Bridgewater, NJ
-
1,800
31,810
1,800
32,132
2,817
680 US-202/206 North
Bexleyheath, England
-
4,736
13,646
-
4,736
13,646
35 West Street
Byrdstown, TN
-
-
2,414
-
2,683
1,750
129 Hillcrest Dr.
Cambridge, MD
-
15,843
16,050
1,650
525 Glenburn Avenue
Calgary, AB
20,989
2,793
51,019
-
2,793
51,019
1729-90th Avenue SW
Calgary, AB
34,791
5,450
83,741
-
5,450
83,741
500 Midpark Way SE
Canton, MA
-
8,201
8,464
4,515
One Meadowbrook Way
Canton, NC
-
5,357
-
5,357
27 North Main Street
Columbia Heights, MN
-
14,175
14,338
1,223
3807 Hart Boulevard
Cleburne, TX
-
5,369
-
5,369
1,089
402 S Colonial Drive
Columbus, IN
-
3,190
-
3,190
2564 Foxpointe Dr.
Concord, NC
-
3,921
3,976
1,400
2452 Rock Hill Church Rd.
Cape May Court House, NJ
-
1,440
17,002
-
1,440
17,002
144 Magnolia Drive
Centreville, MD
-
14,602
14,843
1,562
205 Armstrong Avenue
Congleton, England
-
2,570
6,465
-
2,570
6,465
Rood Hill
Chickasha, OK
-
1,395
-
1,395
801 Country Club Rd.
Chatham, VA
-
14,046
-
14,046
100 Rorer Street
Chicago, IL
-
1,800
19,256
-
1,800
19,256
1,382
6700 South Keating Avenue
Chicago, IL
-
2,900
17,016
-
2,900
17,016
1,238
4239 North Oak Park Avenue
Chelmsford, MA
1,040
10,951
1,499
1,040
12,450
3,390
4 Technology Dr.
Chapel Hill, NC
-
2,646
3,429
1,188
100 Lanark Rd.
Chapel Hill, NC
-
7,512
-
7,512
405 Smith Level Road
Charleston, WV
-
17,575
17,873
1,772
1000 Association Drive, North Gate Business Park
Charleston, WV
-
5,430
5,444
699 South Park Road
Cinnaminson, NJ
-
6,663
6,812
1700 Wynwood Drive
Clarks Summit, PA
-
11,179
11,194
1,234
100 Edella Road
Clarks Summit, PA
-
6,529
6,583
150 Edella Road
Columbia, TN
-
2,295
-
2,295
1,005
5011 Trotwood Ave.
Columbia, TN
-
3,787
-
3,787
1,588
1410 Trotwood Ave.
Clevedon, England
-
3,583
21,374
-
3,583
21,374
18/19 Elton Road
Cleveland, TN
-
5,000
5,122
1,951
2750 Executive Park N.W.
Colchester, CT
-
4,860
5,355
59 Harrington Court
Clinton, MD
-
2,330
20,876
2,330
21,467
1,559
7520 Surratts Road
Clarksville, TN
-
2,292
-
2,292
2183 Memorial Dr.
Claremore, OK
-
1,427
6,130
7,557
1605 N. Hwy. 88
Cloquet, MN
-
4,660
4,780
705 Horizon Circle
Charles Town, WV
-
22,834
22,863
2,264
219 Prospect Ave
Clayton, NC
-
15,741
-
15,741
84 Johnson Estate Road
Columbia, SC
-
2,120
4,860
5,709
2,120
10,569
3,410
731 Polo Rd.
Camrose, AB
16,885
1,215
24,667
-
1,215
24,667
6821-50 Avenue
Concord, NH
-
18,423
18,869
1,874
20 Maitland Street
Concord, NH
-
1,760
43,179
1,760
43,747
4,352
239 Pleasant Street
Concord, NH
-
3,041
3,381
227 Pleasant Street
Conroe, TX
-
7,771
-
7,771
1,049
903 Longmire Road
Cobham, England
-
12,385
31,556
-
12,385
31,556
1,170
Redhill Road
Columbus, OH
-
5,170
8,255
1,070
12,885
3,269
1425 Yorkland Rd.
Columbus, OH
(0)
1,010
5,022
-
1,010
5,022
1,405
1850 Crown Park Ct.
Columbus, OH
-
1,010
4,931
13,620
1,860
17,701
4,435
5700 Karl Rd.
Cape Coral, FL
-
3,281
-
3,281
1,162
911 Santa Barbara Blvd.
Cape Coral, FL
9,065
18,868
-
18,868
1,263
831 Santa Barbara Boulevard
Coppell, TX
-
1,550
8,386
-
1,550
8,386
1530 East Sandy Lake Road
Cedar Grove, NJ
-
1,830
10,939
1,830
10,949
1,214
25 East Lindsley Road
Cedar Grove, NJ
-
2,850
27,737
2,850
27,757
2,895
536 Ridge Road
Carrollton, TX
-
4,280
31,444
4,280
32,178
2105 North Josey Lane
Cortland, NY
-
18,041
18,099
1,050
839 Bennie Road
Cary, NC
-
1,500
4,350
1,500
5,336
2,184
111 MacArthur
Carson City, NV
-
8,238
8,277
1111 W. College Parkway
Colts Neck, NJ
-
14,733
15,242
1,656
3 Meridian Circle
Chester, VA
-
1,320
18,136
-
1,320
18,136
12001 Iron Bridge Road
Citrus Heights, CA
14,747
2,300
31,876
2,300
32,383
5,577
7418 Stock Ranch Rd.
Canton, OH
-
2,098
-
2,098
1119 Perry Dr., N.W.
Castleton, IN
-
15,144
-
15,144
8405 Clearvista Lake
Catonsville, MD
-
1,330
15,003
1,330
15,552
1,645
16 Fusting Avenue
Crawfordsville, IN
-
17,239
-
17,239
517 Concord Road
Conyers, GA
-
2,740
19,302
2,740
19,529
1,205
1504 Renaissance Drive
Dedham, MA
-
1,360
9,830
-
1,360
9,830
3,737
10 CareMatrix Dr.
Denton, TX
-
1,760
8,305
-
1,760
8,305
2125 Brinker Rd
Dundalk, MD
-
1,770
32,047
1,770
32,831
3,305
7232 German Hill Road
Daniels, WV
-
17,320
17,370
1,732
1631 Ritter Drive
Danville, VA
-
3,954
4,676
1,506
149 Executive Ct.
Danville, VA
-
8,440
-
8,440
508 Rison Street
Dover, DE
-
7,717
7,755
1203 Walker Road
Dover, DE
-
22,266
22,356
2,278
1080 Silver Lake Blvd.
Daphne, AL
-
2,880
8,670
2,880
8,797
27440 County Road 13
Durham, NC
-
1,476
10,659
2,196
1,476
12,855
9,437
4434 Ben Franklin Blvd.
Dresher, PA
-
2,060
40,236
2,068
40,786
4,169
1405 N. Limekiln Pike
Defuniak Springs, FL
-
1,350
10,250
-
1,350
10,250
2,456
785 S. 2nd St.
Drayton Valley, AB
-
12,165
-
12,165
3902-47 Street
Eastbourne, England
-
5,141
30,858
-
5,141
30,858
Carew Road
Elizabethton, TN
-
4,604
4,940
1,898
1200 Spruce Lane
Edmond, OK
-
8,388
-
8,388
15401 North Pennsylvania Avenue
Edmond, OK
-
1,810
14,849
-
1,810
14,849
1225 Lakeshore Drive
Eden, NC
-
4,877
-
4,877
1,569
314 W. Kings Hwy.
Englewood, NJ
-
4,514
4,531
333 Grand Avenue
El Paso, TX
-
1,420
12,394
-
1,420
12,394
435 S Mesa Hills Drive
Elizabeth City, NC
-
2,760
2,011
4,771
1,816
400 Hastings Lane
Emeryville, CA
-
2,560
57,491
-
2,560
57,491
1440 40th Street
Englishtown, NJ
-
12,520
13,161
1,447
49 Lasatta Ave
East Norriton, PA
-
1,200
28,129
1,210
28,866
2,993
2101 New Hope St
Erin, TN
-
8,060
8,194
3,004
242 Rocky Hollow Rd.
Easton, MD
-
24,539
-
24,539
2,579
610 Dutchman's Lane
East Brunswick, NJ
-
1,380
34,229
1,380
34,717
3,010
606 Cranbury Rd.
Eatontown, NJ
-
1,190
23,358
1,190
23,426
2,438
3 Industrial Way East
Everett, WA
-
1,400
5,476
-
1,400
5,476
2,298
2015 Lake Heights Dr.
Fanwood, NJ
-
2,850
55,175
2,850
55,750
4,786
295 South Ave.
Fairfield, CA
-
1,460
14,040
1,541
1,460
15,581
5,162
3350 Cherry Hills St.
Farnborough, England
-
2,570
7,244
-
2,570
7,244
Bruntile Close, Reading Road
Franconia, NH
-
11,320
11,390
1,177
93 Main Street
Fairhope, AL
-
9,119
-
9,119
50 Spring Run Road
Fishers, IN
-
1,500
14,500
-
1,500
14,500
1,907
9745 Olympia Dr.
Franklin, NH
-
15,210
15,257
1,562
7 Baldwin Street
Follansbee, WV
-
27,670
27,719
2,795
840 Lee Road
Fall River, MA
-
5,829
4,856
10,685
4,457
1748 Highland Ave.
Fall River, MA
-
34,715
34,923
3,551
4901 North Main Street
Florence, NJ
-
2,978
-
2,978
1,049
901 Broad St.
Florence, AL
7,085
13,049
13,177
2,197
3275 County Road 47
Flourtown, PA
-
1,800
14,830
1,800
15,033
1,587
350 Haws Lane
Flower Mound, TX
-
1,800
8,414
-
1,800
8,414
4141 Long Prairie Road
Farmington, MI
-
6,615
-
6,615
34225 Grand River Avenue
Findlay, OH
-
1,800
-
1,800
725 Fox Run Rd.
Fresno, CA
-
2,500
35,800
2,500
35,918
5,905
7173 North Sharon Avenue
Folsom, CA
-
-
33,600
-
1,582
32,018
1,170
330 Montrose Drive
Forest City, NC
-
4,497
-
4,497
1,463
493 Piney Ridge Rd.
Fredericksburg, VA
-
1,000
20,000
1,200
1,000
21,200
5,242
3500 Meekins Dr.
Fredericksburg, VA
-
28,611
28,646
2,868
11 Dairy Lane
Fredericksburg, VA
-
3,700
22,016
3,700
22,075
1,284
12100 Chancellors Village
Fredericksburg, VA
-
1,130
23,214
-
1,130
23,214
140 Brimley Drive
Fremont, CA
19,186
3,400
25,300
1,821
3,456
27,065
6,710
2860 Country Dr.
Fair Lawn, NJ
-
2,420
24,504
2,420
24,948
2,564
12-15 Saddle River Road
Fort Ashby, WV
-
19,566
19,689
1,944
Diane Drive, Box 686
Fort Wayne, IN
-
8,232
-
8,232
1,686
2626 Fairfield Ave.
Fort Worth, TX
-
13,615
5,086
18,701
1,818
425 Alabama Ave.
Fayetteville, GA
-
12,665
12,974
1967 Highway 54 West
Gardner, MA
-
10,210
10,237
1,107
32 Hospital Hill Road
Grafton, WV
-
18,824
18,861
1,874
8 Rose Street
Greenfield, WI
-
-
15,204
-
14,314
5017 South 110th Street
Gig Harbor, WA
5,358
1,560
15,947
1,583
15,986
2,636
3213 45th St. Court NW
Granger, IN
-
1,670
21,280
2,401
1,670
23,681
2,536
6330 North Fir Rd
Glen Mills, PA
-
9,110
9,275
1,006
549 Baltimore Pike
Glenside, PA
-
1,940
16,867
1,940
17,020
1,786
850 Paper Mill Road
Gambrills, MD
-
2,500
16,726
-
2,500
16,726
1219 Waugh Chapel Road
Greendale, WI
-
2,060
35,383
2,060
35,905
2,612
5700 Mockingbird Lane
Greeneville, TN
-
8,290
8,797
2,629
106 Holt Ct.
Greenville, SC
-
4,750
-
4,750
1,432
23 Southpointe Dr.
Groton, CT
-
2,430
19,941
2,430
20,836
2,292
1145 Poquonnock Road
Graceville, FL
-
13,000
-
13,000
3,029
1083 Sanders Ave.
Granbury, TX
-
2,040
30,670
2,040
30,819
3,003
100 Watermark Boulevard
Granbury, TX
-
2,550
2,940
2,550
3,340
916 East Highway 377
Gardnerville, NV
12,399
1,143
10,831
1,164
11,586
8,166
1565-A Virginia Ranch Rd.
Georgetown, TX
-
2,100
-
2,100
2600 University Dr., E.
Grand Ledge, MI
7,748
1,150
16,286
5,119
1,150
21,405
1,986
4775 Village Dr
Greenville, NC
-
4,393
4,561
1,435
2715 Dickinson Ave.
Greensboro, NC
-
2,970
3,524
1,164
5809 Old Oak Ridge Rd.
Greensboro, NC
-
5,507
1,013
6,520
2,135
4400 Lawndale Dr.
Greensboro, NC
-
6,634
-
6,634
5918 Netfield Road
Gastonia, NC
-
6,129
-
6,129
1,934
1680 S. New Hope Rd.
Gastonia, NC
-
3,096
3,118
1,053
1717 Union Rd.
Gastonia, NC
-
5,029
5,149
1,639
1750 Robinwood Rd.
Glastonbury, CT
-
1,950
9,532
2,360
10,031
1,116
72 Salmon Brook Drive
Gettysburg, PA
-
8,913
9,003
1,022
867 York Road
Grass Valley, CA
4,340
7,667
7,722
415 Sierra College Drive
Greenwood, IN
-
1,550
22,770
1,550
22,851
2,540
2339 South SR 135
Hamilton, NJ
-
4,469
-
4,469
1,559
1645 Whitehorse-Mercerville Rd.
Harriman, TN
-
8,060
8,218
3,188
240 Hannah Rd.
Hattiesburg, MS
-
15,518
15,694
1,643
217 Methodist Hospital Blvd
Herne Bay, England
-
2,399
30,751
-
2,399
30,751
1,528
165 Reculver Road
Hockessin, DE
-
1,120
6,308
-
1,120
6,308
100 Saint Claire Drive
Hickory, NC
-
1,219
2530 16th St. N.E.
Haddonfield, NJ
-
-
-
2,480
-
2,480
2,480
132 Warwick Road
Highland Park, IL
-
2,820
15,832
2,820
16,019
1651 Richfield Avenue
Hemet, CA
-
3,405
-
3,405
25818 Columbia St.
Hemet, CA
13,550
1,890
28,606
1,899
29,247
7,377
1001 N. Lyon Ave
Hemet, CA
-
9,630
10,353
1,426
1001 N. Lyon Ave
High River, AB
-
1,138
40,937
-
1,138
40,937
660 7th Street
Hilltop, WV
-
25,355
25,370
2,564
Saddle Shop Road
Highlands Ranch, CO
-
3,721
4,983
8,704
1,454
9160 S. University Blvd.
Hollywood, FL
-
1,240
13,806
1,240
14,242
3880 South Circle Drive
Hamburg, PA
-
10,543
10,734
1,258
125 Holly Road
Homestead, FL
-
2,750
11,750
-
2,750
11,750
2,801
1990 S. Canal Dr.
Hanford, England
-
1,745
12,411
-
1,745
12,411
Bankhouse Road
Hinckley, England
-
2,726
5,296
-
2,726
5,296
Tudor Road
Huntington, WV
-
32,261
32,387
3,280
101 13th Street
Houston, TX
-
5,090
9,471
-
5,090
9,471
1,592
15015 Cypress Woods Medical Drive
Howell, MI
-
8,550
-
8,550
3003 West Grand River Avenue
High Point, NC
-
4,443
5,236
1,694
1568 Skeet Club Rd.
High Point, NC
-
2,185
2,595
1564 Skeet Club Rd.
High Point, NC
-
3,395
3,423
1,117
201 W. Hartley Dr.
High Point, NC
-
4,143
-
4,143
1,339
1560 Skeet Club Rd.
Hurricane, WV
-
21,454
22,258
2,255
590 N Poplar Fork Road
Hermitage, TN
-
1,500
9,856
1,500
9,902
4131 Andrew Jackson Parkway
Harleysville, PA
-
11,355
-
11,355
1,696
695 Main Street
Harrow, England
-
9,347
10,437
-
9,347
10,437
177 Preston Hill
Hatboro, PA
-
-
28,112
1,746
-
29,858
2,910
3485 Davisville Road
Hutchinson, KS
10,590
10,784
2,888
2416 Brentwood
Hatfield, England
-
3,692
9,504
-
3,692
9,504
St Albans Road East
Huron, OH
-
6,088
1,452
7,540
1,815
1920 Cleveland Rd. W.
Haverford, PA
-
1,880
33,993
1,883
34,578
3,540
731 Old Buck Lane
Hanover, IN
-
4,430
-
4,430
1,369
188 Thornton Rd
Howell, NJ
9,761
1,066
21,577
-
1,066
21,577
2,310
100 Meridian Place
Indianapolis, IN
-
6,287
22,565
28,852
8,017
8616 W. Tenth St.
Indianapolis, IN
-
2,473
12,123
14,596
3,933
8616 W.Tenth St.
Indianapolis, IN
-
14,696
-
14,696
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
1,611
2 Kathleen Drive
Jefferson, OH
-
9,120
-
9,120
2,395
222 Beech St.
Jacksonville Beach, FL
-
1,210
26,207
1,210
26,679
1,591
1700 The Greens Way
Jamestown, TN
-
-
6,707
-
7,215
4,829
208 N. Duncan St.
Jupiter, FL
-
3,100
47,453
3,100
48,016
2,731
110 Mangrove Bay Way
Kokomo, IN
-
16,052
-
16,052
2200 S. Dixon Rd
Kirkstall, England
-
3,077
11,888
-
3,077
11,888
29 Broad Lane
Keene, NH
-
9,639
9,923
677 Court Street
Kennewick, WA
-
1,820
27,991
1,834
28,232
5,715
2802 W 35th Ave
Kenner, LA
-
1,100
10,036
1,100
10,364
7,543
1600 Joe Yenni Blvd
Kent, WA
-
20,318
10,470
30,788
5,271
24121 116th Avenue SE
Kennesaw, GA
-
10,848
11,236
5235 Stilesboro Road
Kirkland, WA
-
1,880
4,315
1,880
4,998
1,420
6505 Lakeview Dr.
Kennett Square, PA
-
1,050
22,946
1,083
23,056
2,386
301 Victoria Gardens Dr.
Laconia, NH
-
14,434
14,930
1,546
175 Blueberry Lane
Lee, MA
-
18,135
19,061
6,578
600 & 620 Laurel St.
Lancaster, CA
9,917
15,295
15,857
2,947
43051 15th St. West
Lancaster, PA
-
7,623
7,702
336 South West End Ave
Lancaster, NH
-
15,804
15,964
1,625
91 Country Village Road
Lancaster, NH
-
63 Country Village Road
Lebanon, NH
-
20,138
20,202
2,062
24 Old Etna Road
Lecanto, FL
-
6,900
-
6,900
1,996
2341 W. Norvell Bryant Hwy.
Leicester, England
-
3,863
30,823
-
3,863
30,823
1,635
307 London Road
Lexington, KY
-
1,980
21,269
-
1,980
21,269
2531 Old Rosebud Road
Langhorne, PA
-
1,350
24,881
1,350
24,998
2,618
262 Toll Gate Road
Longview, TX
5,520
-
5,520
1,129
311 E Hawkins Pkwy
Longwood, FL
-
1,260
6,445
-
1,260
6,445
425 South Ronald Reagan Boulevard
Libertyville, IL
-
6,500
40,024
-
6,500
40,024
4,059
901 Florsheim Dr
Lake Barrington, IL
-
3,400
66,179
3,400
66,225
3,772
22320 Classic Court
Lakewood, CO
-
2,160
28,091
-
2,160
28,091
7395 West Eastman Place
Lake Zurich, IL
-
1,470
9,830
-
1,470
9,830
550 America Court
Lillington, NC
-
17,588
-
17,588
54 Red Mulberry Way
Lillington, NC
-
16,460
-
16,460
2041 NC-210 N
Leominster, MA
-
6,201
6,226
44 Keystone Drive
Lincoln, NE
-
13,807
-
13,807
1,694
7208 Van Dorn St.
Lenoir, NC
-
3,748
4,389
1,413
1145 Powell Rd., N.E.
Linwood, NJ
-
21,984
22,614
2,409
432 Central Ave
Loganville, GA
-
1,430
22,912
1,430
23,469
1,516
690 Tommy Lee Fuller Drive
Louisville, KY
-
10,010
2,767
12,777
3,400
4604 Lowe Rd
LaPlata, MD
-
19,068
19,534
2,018
One Magnolia Drive
Las Vegas, NV
-
23,420
-
23,420
2,088
2500 North Tenaya Way
Lethbridge, AB
1,844
1,448
3,280
-
1,448
3,280
785 Columbia Boulevard West
Lethbridge, AB
3,720
8,178
-
8,178
1730 10th Avenue
Litchfield, CT
-
1,240
17,908
1,250
18,062
1,882
19 Constitution Way
Little Neck, NY
-
3,350
38,461
3,355
39,235
4,076
55-15 Little Neck Pkwy.
Lutherville, MD
-
1,100
19,786
1,579
1,100
21,365
2,127
515 Brightfield Road
Livermore, CA
10,065
4,100
24,996
-
4,100
24,996
35 Fenton Street
Lewisburg, WV
-
3,699
3,769
331 Holt Lane
Lowell, MA
-
1,070
13,481
1,070
13,584
1,489
841 Merrimack Street
Lowell, MA
-
3,378
3,408
30 Princeton Blvd
Lawrence, KS
3,604
8,716
-
8,716
3220 Peterson Road
Lakewood Ranch, FL
-
6,714
1,988
8,702
8230 Nature's Way
Lakewood Ranch, FL
7,191
1,000
22,388
-
1,000
22,388
1,471
8220 Natures Way
Lexington, NC
-
3,900
1,015
4,915
1,664
161 Young Dr.
Lynchburg, VA
-
16,122
-
16,122
189 Monica Blvd
Mahwah, NJ
-
-
-
-
-
15 Edison Road
Fayetteville, NY
-
3,962
4,462
1,545
5125 Highbridge St.
Marlinton, WV
-
8,430
8,441
Stillwell Road, Route 1
Marianna, FL
-
8,910
-
8,910
2,070
2600 Forest Glenn Tr.
Middleburg Heights, OH
-
7,780
-
7,780
2,156
15435 Bagley Rd.
Manteca, CA
6,091
1,300
12,125
1,451
1,312
13,564
3,561
430 N. Union Rd.
Macungie, PA
-
29,033
29,049
2,921
1718 Spring Creek Road
Manchester, NH
-
1,080
3,059
-
1,080
3,059
191 Hackett Hill Road
McMurray, PA
-
1,440
15,805
1,894
1,440
17,699
1,486
240 Cedar Hill Dr
Mechanicsburg, PA
-
1,350
16,650
-
1,350
16,650
1,520
4950 Wilson Lane
Mercerville, NJ
-
9,929
10,045
1,113
2240 White Horse- Merceville Road
Mendham, NJ
-
1,240
27,169
1,240
27,802
2,768
84 Cold Hill Road
Louisville, KY
-
7,135
7,298
2,843
2529 Six Mile Lane
Medicine Hat, AB
2,990
1,112
6,554
-
1,112
6,554
65 Valleyview Drive SW
Meriden, CT
-
1,300
1,472
1,300
1,477
845 Paddock Ave
Melbourne, FL
-
7,070
48,257
13,257
7,070
61,514
8,255
7300 Watersong Lane
Mesa, AZ
6,015
9,087
9,800
3,787
7231 E. Broadway
Morgantown, KY
-
3,705
4,320
1,404
206 S. Warren St.
Morgantown, WV
-
15,633
15,653
1,248
161 Bakers Ridge Road
McHenry, IL
-
1,576
-
-
1,576
-
-
_
Middleton, WI
-
4,006
4,606
1,462
6701 Stonefield Rd.
Middletown, RI
-
1,480
19,703
-
1,480
19,703
2,076
333 Green End Avenue
McKinney, TX
-
1,570
7,389
-
1,570
7,389
1,022
2701 Alma Rd.
Mill Creek, WA
28,094
10,150
60,274
10,179
60,859
12,788
14905 Bothell-Everett Hwy
Milford, DE
-
7,816
7,855
500 South DuPont Boulevard
Milford, DE
-
19,216
19,274
2,015
700 Marvel Road
Midland, MI
-
11,025
5,522
16,547
1,244
2325 Rockwell Dr
Millersville, MD
-
1,020
1,045
1,045
899 Cecil Avenue
Melville, NY
-
4,280
73,283
1,224
4,282
74,505
7,661
70 Pinelawn Rd
Monmouth Junction, NJ
-
6,209
6,266
2 Deer Park Drive
Marmet, WV
-
26,483
-
26,483
2,623
1 Sutphin Drive
Monclova, OH
-
1,750
12,243
-
1,750
12,243
6935 Monclova Road
Menomonee Falls, WI
-
1,020
6,984
1,607
1,020
8,591
1,374
W128 N6900 Northfield Drive
Manahawkin, NJ
-
1,020
20,361
1,020
20,483
2,126
1361 Route 72 West
Manalapan, NJ
-
22,624
22,780
1,991
445 Route 9 South
Monroe, NC
-
3,681
4,329
1,429
918 Fitzgerald St.
Monroe, NC
-
4,799
5,656
1,760
919 Fitzgerald St.
Monroe, NC
-
4,021
4,135
1,363
1316 Patterson Ave.
Manassas, VA
-
7,446
7,976
2,304
8341 Barrett Dr.
Montville, NJ
-
3,500
31,002
3,500
31,429
2,789
165 Changebridge Rd.
Monroe, WA
-
2,560
34,460
2,584
34,741
5,841
15465 179th Ave. SE
Morton Grove, IL
-
1,900
19,374
1,900
19,526
1,618
5520 N. Lincoln Ave.
Monroe Twp, NJ
-
1,160
13,193
1,160
13,268
1,479
292 Applegarth Road
Moyock, NC
-
13,387
-
13,387
141 Moyock Landing Drive
Mount Pleasant, SC
-
-
17,200
-
4,052
13,149
1200 Hospital Drive
Memphis, TN
-
5,963
-
5,963
2,129
1150 Dovecrest Rd.
Memphis, TN
-
9,660
1,600
11,260
1,326
141 N. McLean Blvd.
Marietta, GA
-
1,270
10,519
1,270
10,966
3039 Sandy Plains Road
Marlborough, England
-
3,380
8,615
-
3,380
8,615
The Common
Meridian, ID
-
3,600
20,802
3,600
21,053
6,584
2825 E. Blue Horizon Dr.
Morehead City, NC
-
3,104
1,648
4,752
1,815
107 Bryan St.
Marlton, NJ
-
-
38,300
1,830
-
40,130
6,384
92 Brick Road
Marion, IN
-
12,750
-
12,750
614 W. 14th Street
Marion, IN
-
9,190
-
9,190
505 N. Bradner Avenue
Marysville, WA
4,513
4,780
5,109
1,570
9802 48th Dr. N.E.
Merrillville, IN
-
11,699
11,853
2,132
9509 Georgia St.
Monterey, TN
-
-
4,195
-
4,605
3,034
410 W. Crawford Ave.
Missoula, MT
-
7,490
7,867
1,935
3620 American Way
Mansfield, TX
-
5,251
-
5,251
1,086
2281 Country Club Dr
Louisville, KY
-
4,675
4,808
1,903
1120 Cristland Rd.
Moorestown, NJ
-
2,060
51,628
2,063
52,438
5,384
1205 N. Church St
Moorestown, NJ
-
6,400
23,875
-
6,400
23,875
250 Marter Avenue
Mishawaka, IN
-
16,122
-
16,122
60257 Bodnar Blvd
Mountain City, TN
-
5,896
6,556
4,179
919 Medical Park Dr.
Monteagle, TN
-
3,318
-
3,318
1,293
218 Second St., N.E.
Martinsburg, WV
-
17,180
17,230
1,719
2720 Charles Town Road
Matthews, NC
-
4,738
-
4,738
1,569
2404 Plantation Center Dr.
Martinsville, VA
-
-
-
-
-
Rolling Hills Rd. & US Hwy. 58
Mt. Vernon, WA
-
2,200
2,356
3807 East College Way
Mount Vernon, WA
-
3,440
21,842
-
3,440
21,842
1810 E. Division Street
Matawan, NJ
-
1,830
20,618
1,830
20,625
1,769
625 State Highway 34
Millville, NJ
-
29,944
30,048
3,071
54 Sharp Street
Nacogdoches, TX
5,754
-
5,754
1,169
5902 North St
North Augusta, SC
-
2,558
-
2,558
1,109
105 North Hills Dr.
North Andover, MA
-
21,817
21,870
2,243
140 Prescott Street
North Andover, MA
-
1,070
17,341
1,303
1,070
18,644
1,928
1801 Turnpike Street
Naugatuck, CT
-
1,200
15,826
1,200
16,002
1,678
4 Hazel Avenue
New Braunfels, TX
-
1,200
19,800
-
1,200
19,800
1,998
2294 East Common Street
Newcastle Under Lyme, England
-
1,402
7,141
-
1,402
7,141
Hempstalls Lane
Newcastle-under-Lyme, England
-
1,421
6,991
-
1,421
6,991
Silverdale Road
North Cape May, NJ
-
22,266
22,302
2,275
700 Townbank Road
Needham, MA
-
1,610
13,715
1,610
14,081
5,445
100 West St.
Newport, VT
-
3,867
-
3,867
35 Bel-Aire Drive
Northampton, England
-
6,543
21,906
-
6,543
21,906
Cliftonville Road
Northampton, England
-
2,542
7,901
-
2,542
7,901
Cliftonville Road
New Haven, IN
-
3,524
-
3,524
1,305
1201 Daly Dr.
New Moston, England
-
1,869
5,529
-
1,869
5,529
90a Broadway
Nuneaton, England
-
4,198
11,342
-
4,198
11,342
132 Coventry Road
Naples, FL
-
1,716
17,306
1,878
1,738
19,162
16,523
1710 S.W. Health Pkwy.
Naples, FL
-
5,450
-
5,450
1,698
2900 12th St. N.
Naperville, IL
-
3,470
29,547
-
3,470
29,547
3,054
504 North River Road
Naperville, IL
-
1,550
12,237
-
1,550
12,237
1936 Brookdale Road
Norman, OK
-
1,484
-
1,484
1701 Alameda Dr.
Norman, OK
10,776
1,480
33,330
-
1,480
33,330
2,144
800 Canadian Trails Drive
Norristown, PA
-
1,200
19,488
1,762
1,200
21,250
2,101
1700 Pine Street
Nashville, TN
-
4,910
29,590
-
4,910
29,590
5,152
15 Burton Hills Boulevard
Nashville, TN
-
4,500
12,287
-
4,500
12,287
832 Wedgewood Ave
Nuthall, England
-
2,056
7,908
-
2,056
7,908
172A Nottingham Road
Nuthall, England
-
3,155
13,177
-
3,155
13,177
172 Nottingham Road
Newark, DE
-
21,220
1,488
22,708
5,775
200 E. Village Rd.
Oakland, CA
-
4,760
16,143
-
4,760
16,143
468 Perkins Street
Ocala, FL
-
1,340
10,564
-
1,340
10,564
1,571
2650 SE 18TH Avenue
Ogden, UT
-
6,700
7,399
1,935
1340 N. Washington Blv.
Oak Hill, WV
-
24,506
-
24,506
2,422
422 23rd Street
Oak Hill, WV
-
-
438 23rd Street
Oklahoma City, OK
-
7,513
-
7,513
1,347
13200 S. May Ave
Oklahoma City, OK
-
7,017
-
7,017
1,175
11320 N. Council Road
Olds, AB
-
9,172
-
9,172
5600 Sunrise Crescent
Olympia, WA
6,619
16,689
16,844
2,827
616 Lilly Rd. NE
Omaha, NE
-
10,230
-
10,230
1,276
11909 Miracle Hills Dr.
Omaha, NE
-
8,864
-
8,864
1,150
5728 South 108th St.
Owenton, KY
-
2,400
-
2,400
905 Hwy. 127 N.
Ormond Beach, FL
-
-
2,739
-
3,191
1,791
103 N. Clyde Morris Blvd.
Orwigsburg, PA
-
20,632
20,766
2,143
1000 Orwigsburg Manor Drive
Oneonta, NY
-
5,020
-
5,020
1846 County Highway 48
Overland Park, KS
-
3,730
27,076
3,730
27,416
3,866
12000 Lamar Avenue
Overland Park, KS
-
4,500
29,105
7,295
4,500
36,400
4,142
6101 W 119th St
Owensboro, KY
-
6,760
7,369
1,948
1614 W. Parrish Ave.
Owensboro, KY
-
13,275
-
13,275
3,688
1205 Leitchfield Rd.
Owasso, OK
-
1,380
-
1,380
12807 E. 86th Place N.
Oxford, MI
11,275
1,430
15,791
-
1,430
15,791
1,812
701 Market St
Paris, TX
5,452
-
5,452
2,967
750 N Collegiate Dr
Panama City Beach, FL
-
7,717
7,752
6012 Magnolia Beach Road
Petoskey, MI
5,900
14,452
-
14,452
1,544
965 Hager Dr
Pigeon Forge, TN
-
4,180
4,297
1,738
415 Cole Dr.
Philadelphia, PA
-
2,700
25,709
2,700
26,041
2,708
184 Bethlehem Pike
Philadelphia, PA
-
2,930
10,433
3,373
2,930
13,806
1,475
1526 Lombard Street
Philadelphia, PA
-
11,239
11,304
1,141
8015 Lawndale Avenue
Philadelphia, PA
-
1,810
16,898
1,810
16,931
1,946
650 Edison Avenue
Piqua, OH
-
1,885
-
1,885
1744 W. High St.
Parkersburg, WV
-
21,288
21,931
2,187
723 Summers Street
Plattsmouth, NE
-
5,650
-
5,650
1913 E. Highway 34
Plymouth, MI
-
1,490
19,990
1,490
20,119
2,192
14707 Northville Rd
Pella, IA
-
6,716
6,805
2602 Fifield Road
Palm Coast, FL
-
10,957
-
10,957
1,495
50 Town Ct.
Phillipsburg, NJ
-
21,175
21,368
2,244
290 Red School Lane
Phillipsburg, NJ
-
8,114
8,151
843 Wilbur Avenue
Palestine, TX
-
4,320
1,300
5,620
1,201
1625 W. Spring St.
Plainview, NY
-
3,990
11,969
3,990
12,361
1,210
150 Sunnyside Blvd
Pennington, NJ
-
1,380
27,620
1,462
28,145
2,385
143 West Franklin Avenue
Pinehurst, NC
-
2,690
3,174
1,085
17 Regional Dr.
Ponoka, AB
4,464
12,920
-
12,920
4004 40th Street Close
Princeton, NJ
-
1,730
30,888
1,150
1,775
31,992
2,752
155 Raymond Road
Parkville, MD
-
1,350
16,071
1,350
16,345
1,729
8710 Emge Road
Parkville, MD
-
11,186
11,189
1,223
8720 Emge Road
Parkville, MD
-
1,100
11,768
-
1,100
11,768
1,273
1801 Wentworth Road
Post Falls, ID
-
2,700
14,217
2,181
2,700
16,398
2,770
460 N. Garden Plaza Ct.
Port St. Joe, FL
-
2,055
-
2,055
1,060
220 9th St.
Pennsauken, NJ
-
10,780
10,959
1,297
5101 North Park Drive
Port St. Lucie, FL
-
8,700
47,230
5,882
8,700
53,112
6,406
10685 SW Stony Creek Way
Paso Robles, CA
-
1,770
8,630
1,770
9,323
3,150
1919 Creston Rd.
Pittsburgh, PA
-
1,750
8,572
1,750
8,687
2,390
100 Knoedler Rd.
Pottsville, PA
-
26,964
27,166
2,833
1000 Schuylkill Manor Road
Puyallup, WA
11,296
1,150
20,776
1,156
20,971
3,652
123 Fourth Ave. NW
Quakertown, PA
-
1,040
25,389
1,040
25,461
2,599
1020 South Main Street
Rochdale, MA
-
-
7,100
-
6,410
111 Huntoon Memorial Highway
Rockville, MD
-
-
16,398
-
16,408
1,237
9701 Medical Center Drive
Red Bank, NJ
-
1,050
21,275
1,050
21,542
1,877
One Hartford Dr.
Ridgely, TN
-
5,700
5,797
2,173
117 N. Main St.
Reidsville, NC
-
3,830
4,687
1,605
2931 Vance St.
Ridgewood, NJ
-
1,350
16,170
1,350
16,650
1,686
330 Franklin Turnpike
Reading, PA
-
19,906
20,008
2,073
5501 Perkiomen Ave
Ridgeland, MS
-
7,675
8,102
2,362
410 Orchard Park
Rogersville, TN
-
3,278
-
3,278
1,282
109 Hwy. 70 N.
Rehoboth Beach, DE
-
24,248
24,603
2,573
36101 Seaside Blvd
Rocky Hill, CT
-
1,090
6,710
1,500
1,090
8,210
2,281
60 Cold Spring Rd.
Rockville, CT
-
1,500
4,835
1,500
4,911
1253 Hartford Turnpike
Rockledge, FL
-
4,117
-
4,117
1,868
1775 Huntington Lane
Raleigh, NC
24,942
3,530
59,589
-
3,530
59,589
3,538
5301 Creedmoor Road
Raleigh, NC
-
2,580
16,837
-
2,580
16,837
1,092
7900 Creedmoor Road
Richmond, VA
-
-
12,000
-
11,750
2220 Edward Holland Drive
Romeoville, IL
-
1,895
-
-
1,895
-
-
Grand Haven Circle
Reno, NV
-
1,060
11,440
1,060
12,045
3,217
5165 Summit Ridge Road
Rohnert Park, CA
13,494
6,500
18,700
1,498
6,546
20,152
5,062
4855 Snyder Lane
Ruston, LA
-
9,790
-
9,790
1401 Ezelle St
Rugeley, England
-
2,399
12,958
-
2,399
12,958
Horse Fair
Rutland, VT
-
1,190
23,655
1,190
23,743
2,467
9 Haywood Avenue
Rockville Centre, NY
-
4,290
20,310
4,290
20,746
1,902
260 Maple Ave
Rockwood, TN
-
7,116
7,857
2,905
5580 Roane State Hwy.
Roswell, GA
7,759
1,107
9,627
1,114
10,413
7,337
655 Mansell Rd.
Sacramento, CA
10,125
14,781
14,865
2,588
6350 Riverside Blvd
Sanatoga, PA
-
30,695
30,733
3,082
225 Evergreen Road
San Angelo, TX
-
8,800
9,225
2,414
2695 Valleyview Blvd.
San Angelo, TX
-
1,050
24,689
-
1,050
24,689
6101 Grand Court Road
San Ramon, CA
8,827
2,430
17,488
2,435
17,535
2,918
18888 Bollinger Canyon Rd
South Bend, IN
-
17,770
-
17,770
52565 State Road 933
San Bernardino, CA
-
3,700
14,300
3,700
14,987
2,366
1760 W. 16th St.
South Boston, MA
-
2,002
5,218
7,220
3,154
804 E. Seventh St.
Salisbury, NC
-
5,697
5,865
1,848
2201 Statesville Blvd.
Scott Depot, WV
-
6,876
6,934
5 Rolling Meadows
Scranton, PA
-
17,618
-
17,618
2741 Blvd. Ave
Scranton, PA
-
12,150
-
12,150
2751 Boulevard Ave
St. Charles, MD
-
15,555
15,639
1,641
4140 Old Washington Highway
South Croydon, England
-
3,116
2,648
-
3,116
2,648
42-46 Bramley Hill
San Diego, CA
-
-
22,003
1,845
-
23,848
3,683
555 Washington St.
Seattle, WA
7,563
5,190
9,350
5,199
9,692
2,615
11501 15th Ave NE
Seattle, WA
7,055
3,420
15,555
3,420
15,693
2,938
2326 California Ave SW
Seattle, WA
-
2,630
10,257
2,630
10,293
2,019
4611 35th Ave SW
Seattle, WA
28,100
10,670
37,291
10,700
37,418
8,809
805 4th Ave N
Seaford, DE
-
14,029
14,082
1,539
1100 Norman Eskridge Highway
Seaford, DE
-
7,995
1,547
9,542
715 East King Street
Severna Park, MD
-
2,120
31,273
2,120
32,081
3,178
24 Truckhouse Road
Loxley, England
-
1,729
19,784
-
1,729
19,784
Loxley Road
Shillington, PA
-
1,020
19,569
1,020
20,525
2,084
500 E Philadelphia Ave
Shelbyville, KY
-
3,870
4,472
1,096
1871 Midland Trail
Shelton, WA
-
17,049
17,345
1,192
900 W Alpine Way
Shepherdstown, WV
-
13,806
13,819
1,391
80 Maddex Drive
Sherman, TX
5,221
-
5,221
1,131
1011 E. Pecan Grove Rd.
Shawnee, OK
-
1,400
-
1,400
3947 Kickapoo
Southbury, CT
-
1,860
23,613
1,860
24,571
2,381
655 Main St
Silvis, IL
-
16,420
16,559
1,914
1900 10th St.
Sissonville, WV
-
23,948
24,003
2,434
302 Cedar Ridge Road
Selbyville, DE
-
25,912
26,113
2,743
21111 Arrington Dr
Salem, OR
-
5,171
-
5,172
2,220
1355 Boone Rd. S.E.
Columbus, IN
-
6,710
-
6,710
2,217
2011 Chapa Dr.
Stamford, England
-
2,298
4,089
-
2,298
4,089
Priory Road
Somerset, MA
-
1,010
29,577
1,010
29,728
2,990
455 Brayton Avenue
Smithfield, NC
5,680
-
5,680
1,806
830 Berkshire Rd.
Smithfield, NC
-
8,220
-
8,220
250 Highway 210 West
San Antonio, TX
-
6,120
28,169
2,124
6,120
30,293
2,672
2702 Cembalo Blvd
San Antonio, TX
-
-
17,303
-
-
17,303
5,084
8902 Floyd Curl Dr.
Sonoma, CA
14,705
1,100
18,400
1,374
1,109
19,764
4,887
800 Oregon St.
Spring City, TN
-
6,085
3,210
9,295
3,120
331 Hinch St.
Springfield, IL
-
-
10,100
-
9,332
701 North Walnut Street
Springfield, IL
-
13,378
-
13,378
3089 Old Jacksonville Road
Spring House, PA
-
10,780
10,979
1,207
905 Penllyn Pike
Sparks, NV
-
3,700
46,526
-
3,700
46,526
6,862
275 Neighborhood Way
Spencer, WV
-
8,810
8,838
825 Summit Street
Spruce Pine, NC
-
8,340
-
8,340
13681 Highway 226 South
South Pittsburg, TN
-
5,628
-
5,628
1,901
201E. 10th St.
Shrewsbury, NJ
-
2,120
38,116
2,123
38,674
4,016
5 Meridian Way
Sarasota, FL
-
3,175
-
3,175
1,622
8450 McIntosh Rd.
Sarasota, FL
-
3,400
-
3,400
1,181
4602 Northgate Ct.
Sarasota, FL
-
3,360
19,140
-
3,360
19,140
1,673
6150 Edgelake Drive
Sarasota, FL
-
1,120
12,489
1,120
12,595
2290 Cattlemen Road
Sarasota, FL
-
8,825
9,360
3221 Fruitville Road
Sarasota, FL
-
9,854
10,036
3749 Sarasota Square Boulevard
Sand Springs, OK
6,624
19,654
-
19,654
1,288
4402 South 129th Avenue West
Silver Spring, MD
-
1,250
7,278
1,250
7,547
2101 Fairland Road
Silver Spring, MD
-
1,150
9,252
1,150
9,356
12325 New Hampshire
Sisterville, WV
-
5,400
5,642
201 Wood Street
Stanwood, WA
-
2,260
28,474
2,283
28,728
5,110
7212 265th St NW
Sittingbourne, England
-
1,714
8,256
-
1,714
8,256
200 London Road
St. Louis, MO
-
1,890
12,165
1,890
12,297
1,378
6543 Chippewa St
Stroudsburg, PA
-
16,321
-
16,321
370 Whitestone Corner Road
Stockton, CA
2,914
2,280
5,983
2,372
6,176
1,273
6725 Inglewood
Statesville, NC
-
1,447
1,713
2441 E. Broad St.
Statesville, NC
-
6,183
6,191
1,904
2806 Peachtree Place
Statesville, NC
-
3,627
-
3,627
1,146
2814 Peachtree Rd.
Superior, WI
-
1,020
13,735
1,020
13,814
1915 North 34th Street
Summit, NJ
-
3,080
14,152
-
3,080
14,152
1,449
41 Springfield Avenue
Seven Fields, PA
-
4,663
4,722
2,033
500 Seven Fields Blvd.
Swanton, OH
-
6,370
-
6,370
1,876
401 W. Airport Hwy.
Stillwater, OK
-
1,400
-
1,400
1616 McElroy Rd.
Thomasville, GA
-
13,899
14,335
1,304
423 Covington Avenue
Takoma Park, MD
-
1,300
10,136
-
1,300
10,136
7525 Carroll Avenue
Tomball, TX
-
1,050
13,300
1,050
13,971
1,357
1221 Graham Dr
Toms River, NJ
-
1,610
34,627
1,672
35,159
3,685
1587 Old Freehold Rd
Topeka, KS
-
12,712
-
12,712
1931 Southwest Arvonia Place
Trumbull, CT
-
4,440
43,384
-
4,440
43,384
4,239
6949 Main Street
Troy, OH
-
2,000
4,254
6,254
1,504
81 S. Stanfield Rd.
Troy, OH
-
16,730
-
16,730
4,744
512 Crescent Drive
Tulsa, OK
-
1,390
7,110
1,390
7,572
1,011
7220 S. Yale Ave.
Tulsa, OK
-
1,320
10,087
-
1,320
10,087
7902 South Mingo Road East
The Villages, FL
-
1,035
7,446
-
1,035
7,446
2450 Parr Drive
Towson, MD
-
1,180
13,280
1,180
13,475
1,434
7700 York Road
Texarkana, TX
-
1,403
-
1,403
4204 Moores Lane
Tyler, TX
5,268
-
5,268
1,081
5550 Old Jacksonville Hwy.
Uhrichsville, OH
-
6,716
-
6,716
1,690
5166 Spanson Drive S.E.
Uniontown, PA
-
6,817
6,901
75 Hikle Street
Vacaville, CA
13,876
17,100
1,417
18,517
4,650
799 Yellowstone Dr.
Vancouver, WA
11,632
1,820
19,042
1,821
19,140
3,375
10011 NE 118th Ave
Virginia Beach, VA
-
1,540
22,605
-
1,540
22,605
5520 Indian River Rd
Vallejo, CA
13,892
4,000
18,000
1,841
4,030
19,812
4,970
350 Locust Dr.
Vallejo, CA
7,361
2,330
15,407
2,330
15,559
2,930
2261 Tuolumne
Valparaiso, IN
-
2,558
-
2,558
2601 Valparaiso St.
Valparaiso, IN
-
2,962
-
2,962
1,098
2501 Valparaiso St.
Valley Falls, RI
-
1,080
7,433
1,080
7,443
100 Chambers Street
Venice, FL
-
6,000
-
6,000
1,837
1240 Pinebrook Rd.
Venice, FL
-
1,150
10,674
-
1,150
10,674
1,509
1600 Center Rd.
Vero Beach, FL
-
3,187
-
3,187
1,170
420 4th Ct.
Vero Beach, FL
-
3,263
-
3,263
1,209
410 4th Ct.
Vero Beach, FL
-
2,930
40,070
14,729
2,930
54,799
9,214
7955 16th Manor
Voorhees, NJ
-
1,800
37,299
1,800
37,858
3,898
2601 Evesham Road
Voorhees, NJ
-
1,900
26,040
1,900
26,934
2,765
3001 Evesham Road
Voorhees, NJ
-
3,100
25,950
-
3,100
25,950
1,450
113 South Route 73
Voorhees, NJ
-
3,700
24,312
-
3,700
24,312
311 Route 73
Wabash, IN
-
14,596
-
14,596
20 John Kissinger Drive
Wallingford, CT
-
1,210
1,269
35 Marc Drive
Warren, NJ
-
2,000
30,810
2,000
31,202
2,690
274 King George Rd
Pewaukee, WI
-
4,700
20,669
-
4,700
20,669
5,342
2400 Golf Rd.
Warwick, RI
-
1,530
18,564
1,530
18,734
1,984
660 Commonwealth Avenue
Webster Groves, MO
-
1,790
15,425
-
1,790
15,425
45 E Lockwood Avenue
Webster, NY
-
8,968
9,004
100 Kidd Castle Way
Webster, NY
-
1,300
21,127
1,300
21,136
1,214
200 Kidd Castle Way
Wichita Falls, TX
-
1,070
26,167
-
1,070
26,167
3908 Kell W Boulevard
Waconia, MN
-
14,726
4,495
19,221
1,555
500 Cherry Street
Windsor, CT
-
2,250
8,539
1,842
2,250
10,382
1,141
One Emerson Drive
Windsor, CT
-
1,800
1,800
1,544
One Emerson Drive
West Bend, WI
-
17,790
17,828
1,417
2130 Continental Dr
West Chester, PA
-
1,350
29,237
1,350
29,359
3,026
800 West Miner Street
West Chester, PA
-
3,290
42,258
3,290
42,852
3,124
1615 East Boot Road
West Chester, PA
-
11,894
11,899
1615 East Boot Road
Westfield, IN
-
15,972
-
15,972
937 E. 186th Street
Westlake, OH
-
1,330
17,926
-
1,330
17,926
6,500
27601 Westchester Pkwy.
Winter Garden, FL
-
1,350
7,937
-
1,350
7,937
720 Roper Road
Wilmington, DE
-
9,494
9,551
1,057
810 S Broom Street
Wareham, MA
-
10,313
1,701
12,014
4,384
50 Indian Neck Rd.
Whittier, CA
10,830
4,470
22,151
4,483
22,439
5,393
13250 E Philadelphia St
Wilkes-Barre, PA
-
13,842
13,961
1,492
440 North River Street
Wilkes-Barre, PA
-
2,301
2,345
300 Courtright Street
Waukee, IA
-
1,870
31,878
1,075
1,870
32,953
1,971
1650 SE Holiday Crest Circle
Wake Forest, NC
-
3,003
1,742
4,745
1,863
611 S. Brooks St.
Walkersville, MD
-
1,650
15,103
-
1,650
15,103
1,107
56 West Frederick Street
Willard, OH
-
6,447
-
6,447
1100 Neal Zick
Wall, NJ
-
1,650
25,350
1,958
1,690
27,268
2,236
2021 Highway 35
Williamsport, PA
-
4,946
5,319
1251 Rural Avenue
Williamsport, PA
-
8,487
8,925
1,011
1201 Rural Avenue
Wilmington, NC
-
2,991
-
2,991
1,278
3501 Converse Dr.
Wilmington, NC
-
15,363
-
15,363
3828 Independence Blvd
Wilmington, NC
-
6,575
-
6,575
3915 Stedwick Ct
Wolverhampton, England
-
1,986
8,432
-
1,986
8,432
378 Prestonwood Road
Westmoreland, TN
-
1,822
2,640
4,462
1,736
1559 New Hwy. 52
Williamstown, KY
-
6,430
-
6,430
1,804
201 Kimberly Lane
Winter Haven, FL
-
10,038
-
10,038
650 North Lake Howard Drive
Boonville, IN
-
5,510
-
5,510
1,948
1325 N. Rockport Rd.
Weston Super Mare, England
-
3,178
8,908
-
3,178
8,908
141b Milton Road
Worcester, MA
-
3,500
54,099
-
3,500
54,099
7,241
101 Barry Road
Worcester, MA
-
2,300
9,060
-
2,300
9,060
1,598
378 Plantation St.
Westford, MA
-
13,829
14,034
1,497
3 Park Drive
Westfield, NJ
-
2,270
16,589
2,270
17,086
1,921
1515 Lamberts Mill Road
Winston-Salem, NC
-
2,514
2,973
2980 Reynolda Rd.
Westerville, OH
-
8,287
3,105
11,392
7,518
690 Cooper Rd.
Wichita, KS
-
1,400
11,000
-
1,400
11,000
3,066
505 North Maize Road
Wichita, KS
-
1,760
19,007
-
1,760
19,007
1,518
10604 E 13th Street North
Wichita, KS
13,594
19,747
-
19,747
1,281
2050 North Webb Road
Weatherford, TX
-
5,261
-
5,261
1,088
1818 Martin Drive
Watchung, NJ
-
1,920
24,880
1,967
25,466
2,168
680 Mountain Boulevard
Wetaskiwin, AB
-
24,015
-
24,015
5430-37 A Avenue
White Lake, MI
10,231
2,920
20,179
2,920
20,271
2,256
935 Union Lake Rd
West Orange, NJ
-
2,280
10,687
2,280
10,869
1,247
20 Summit Street
Willow Grove, PA
-
1,300
14,736
1,300
14,845
1,654
1113 North Easton Road
Witherwack, England
-
1,192
8,731
-
1,192
8,731
Whitchurch Road
West Worthington, OH
-
5,090
-
5,090
1,330
111 Lazelle Rd., E.
Westworth Village, TX
-
2,060
31,296
-
2,060
31,296
25 Leonard Trail
Waxahachie, TX
-
5,763
-
5,763
1,045
1329 Brown St.
Wyncote, PA
-
2,700
22,244
2,700
22,392
2,372
1245 Church Road
Wyncote, PA
-
1,610
21,256
1,610
21,470
2,170
8100 Washington Lane
Wyncote, PA
-
7,811
7,843
240 Barker Road
Youngsville, NC
-
10,694
-
10,694
100 Sunset Drive
York, England
-
3,739
10,437
-
3,739
10,437
Rosetta Way, Boroughbridge Road
Zionsville, IN
-
1,610
22,400
1,691
1,610
24,091
2,636
11755 N Michigan Rd
Seniors Housing Triple-Net Total
$
593,414
$
900,397
$
9,683,752
$
365,636
$
912,535
$
10,037,249
$
1,262,419
Health Care REIT, Inc.
Schedule III
Real Estate and Accumulated Depreciation
December 31, 2014
(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:
Albuquerque, NM
$
5,386
$
1,270
$
20,837
$
1,113
$
1,275
$
21,945
$
3,753
500 Paisano St NE
Acton, MA
-
-
31,346
31,786
2,441
10 Devon Drive
Agawam, MA
6,560
10,044
10,281
1,747
153 Cardinal Drive
Alhambra, CA
(0)
6,305
7,146
1118 N. Stoneman Ave.
Arlington, TX
21,858
1,660
37,395
1,660
37,888
5,390
1250 West Pioneer Parkway
Arnprior, ON
6,771
7,341
15 Arthur Street
Atlanta, GA
-
2,100
20,603
-
2,100
20,603
1,240
1000 Lenox Park Blvd NE
Atlanta, GA
-
-
-
-
-
-
-
650 Phipps Boulevard NE
Austin, TX
-
1,560
21,413
-
1,560
21,413
11330 Farrah Lane
Avon, CT
19,313
1,550
30,571
1,211
1,580
31,753
6,425
101 Bickford Extension
Azusa, CA
-
3,141
6,356
9,497
2,076
125 W. Sierra Madre Ave.
Bagshot, England
-
6,263
37,667
-
6,263
37,667
4,873
14 - 16 London Road
Bassett, England
-
6,154
39,867
-
6,154
39,867
4,737
111 Burgess Road
Beaconsfield, England
-
7,028
64,242
-
7,028
64,242
6,435
30-34 Station Road
Bedford, NH
-
-
-
33,076
2,527
30,549
2,591
5 Corporate Drive
Beaconsfield, QC
-
1,335
20,797
-
1,335
20,797
3,364
505 Elm Avenue
Buffalo Grove, IL
-
2,850
49,129
2,850
49,415
5,301
500 McHenry Road
Burlington, ON
16,014
1,559
22,733
-
1,559
22,733
2,785
500 Appleby Line
Burlington, MA
-
2,443
34,354
2,522
34,752
4,030
24 Mall Road
Borehamwood, England
-
7,074
41,060
10,953
6,778
52,310
5,087
Edgwarebury Lane
Buckingham, England
-
3,762
17,455
-
3,762
17,455
-
Church Street
Basking Ridge, NJ
-
2,356
37,710
2,356
38,065
3,839
404 King George Road
Bloomfield Hills, MI
-
2,000
35,662
2,000
35,980
3,640
6790 Telegraph Road
Broomfield, CO
-
4,140
44,547
9,035
6,804
50,918
5,177
400 Summit Blvd
Birmingham, England
-
26,540
-
26,540
3,072
5 Church Road, Edgbaston
Belmont, CA
-
3,000
23,526
1,091
3,000
24,616
3,967
1301 Ralston Avenue
Belmont, CA
-
-
35,300
-
35,841
3,975
1010 Alameda de Las Pulgas
Chula Vista, CA
-
2,072
22,163
2,072
22,584
2,273
3302 Bonita Road
Boulder, CO
-
2,994
27,458
2,994
28,242
3,971
3955 28th Street
Braintree, MA
21,377
-
41,290
41,636
4,566
618 Granite Street
Burbank, CA
-
4,940
43,466
4,940
43,891
5,946
455 E. Angeleno Avenue
Brantford, ON
-
-
-
-
-
-
436 Powerline Road
Brighton, MA
10,529
2,100
14,616
2,109
15,044
2,606
50 Sutherland Road
Brookfield, CT
19,681
2,250
30,180
2,262
30,788
5,350
246A Federal Road
Basingstoke, England
-
4,318
24,006
-
4,318
24,006
Grove Road
Banstead, England
-
8,781
54,836
13,313
8,437
68,494
7,095
Croydon Lane
Bethesda, MD
-
-
45,309
-
45,698
4,807
8300 Burdett Road
Bethesda, MD
-
-
-
-
8300 Burdett Road
Bethesda, MD
-
-
-
-
8300 Burdett Road
Baton Rouge, LA
9,498
29,436
29,549
2,960
9351 Siegen Lane
Bellevue, WA
-
2,800
19,004
2,800
19,828
2,714
15928 NE 8th Street
Blainville, QC
-
2,478
10,568
-
2,478
10,568
2,091
50 des Chateaux Boulevard
Calgary, AB
15,644
2,685
44,195
-
2,685
44,195
5,750
20 Promenade Way SE
Calgary, AB
18,011
3,319
48,797
-
3,319
48,797
5,883
80 Edenwold Drive NW
Calgary, AB
14,214
3,709
46,309
-
3,709
46,309
5,481
150 Scotia Landing NW
Calgary, AB
22,412
4,033
34,305
-
4,033
34,305
2,862
9229 16th Street SW
Carol Stream, IL
-
1,730
55,048
1,730
55,844
6,767
545 Belmont Lane
Camberley, England
-
-
(19)
-
-
(19)
(22)
Fernhill Road
Camberley, England
2,804
6,092
-
2,804
6,092
Fernhill Road
Church Crookham, England
-
3,271
17,962
-
3,271
17,962
1,129
Bourley Road
Chicoutimi, QC
-
-
-
-
-
-
(0)
1901 Des Roitelets Street
Chicoutimi, QC
-
-
-
-
-
-
220 Don-Bosco Street
Cardiff, England
-
4,020
15,610
-
4,020
15,610
2,417
127 Cyncoed Road
Cardiff by the Sea, CA
40,364
5,880
64,711
5,880
65,160
8,773
3535 Manchester Avenue
Chesterfield, MO
-
1,857
48,366
1,857
48,720
4,388
1880 Clarkson Road
North Chelmsford, MA
11,956
18,478
18,993
2,737
2 Technology Drive
Crystal Lake, IL
-
12,461
13,217
1,736
751 E Terra Cotta Avenue
Calabasas, CA
-
-
6,438
-
6,577
2,422
25100 Calabasas Road
Claremont, CA
-
2,430
9,928
2,438
10,271
1,287
2053 North Towne Avenue
Concord, NH
13,550
21,164
21,542
2,914
300 Pleasant Street
Cohasset, MA
-
2,485
26,147
2,485
27,038
2,824
125 King Street (Rt 3A)
Cornwall, ON
-
-
-
-
-
-
(0)
801 4th Street East
Coquitlam, BC
12,906
3,623
28,904
-
3,623
28,904
4,057
1142 Dufferin Street
Cary, NC
-
45,240
45,402
3,638
1206 West Chatham Street
Colorado Springs, CO
-
14,756
15,391
1,412
2105 University Park Boulevard
Costa Mesa, CA
-
2,050
19,969
2,050
20,216
3,319
350 West Bay St
Centerville, MA
-
1,300
27,357
1,301
27,728
3,891
22 Richardson Road
Chorleywood, England
-
7,094
53,317
-
7,094
53,317
6,035
High View, Rickmansworth Road
Dallas, TX
-
1,080
9,655
1,080
10,007
1,507
3611 Dickason Avenue
Danvers, MA
9,503
1,120
14,557
1,129
15,015
2,326
1 Veronica Drive
Davenport, IA
-
1,403
35,893
2,334
1,444
38,186
5,548
4500 Elmore Ave.
Dollard-Des-Ormeaux, QC
-
2,328
17,169
-
2,328
17,169
3,423
4377 St. Jean Blvd
Decatur, GA
-
1,932
27,523
1,932
28,057
3,411
920 Clairemont Avenue
Dix Hills, NY
-
3,808
39,014
3,808
39,342
4,345
337 Deer Park Road
Drummondville, QC
-
-
-
-
-
-
(0)
540 Brouillard Street
Dresher, PA
7,358
1,900
10,664
1,900
11,073
2,162
1650 Susquehanna Road
Dublin, OH
18,178
1,680
43,423
3,828
1,724
47,207
7,701
6470 Post Rd
Denver, CO
12,745
1,450
19,389
1,455
20,010
2,293
4901 South Monaco Street
Denver, CO
-
2,910
35,838
2,930
36,307
4,926
8101 E Mississippi Avenue
Eastbourne, England
-
5,219
42,277
-
5,219
42,277
4,700
6 Upper Kings Drive
Encino, CA
-
5,040
46,255
5,040
46,821
5,911
15451 Ventura Boulevard
Edgewater, NJ
-
4,561
25,047
4,561
25,826
2,889
351 River Road
Edison, NJ
-
1,892
32,314
1,892
33,040
5,771
1801 Oak Tree Road
Edmonton, AB
11,604
1,775
35,348
-
1,775
35,348
4,643
103 Rabbit Hill Court NW
Edmonton, AB
14,893
2,460
43,842
-
2,460
43,842
6,049
10015 103rd Avenue NW
East Meadow, NY
-
45,991
46,116
4,972
1555 Glen Curtiss Boulevard
Encinitas, CA
-
1,460
7,721
1,460
8,362
3,454
335 Saxony Rd.
Escondido, CA
12,482
1,520
24,024
1,520
24,933
3,978
1500 Borden Rd
Esher, England
-
7,275
60,625
-
7,275
60,625
5,634
42 Copsem Lane
East Setauket, NY
-
4,920
37,354
4,929
37,713
3,975
1 Sunrise Drive
East Haven, CT
22,869
2,660
35,533
1,298
2,681
36,810
7,840
111 South Shore Drive
Fairfield, NJ
-
3,120
43,868
3,127
44,480
4,807
47 Greenbrook Road
Fairfax, VA
-
2,678
2,720
9207 Arlington Boulevard
Franklin, MA
14,129
2,430
30,597
2,442
31,032
2,674
4 Forge Hill Road
Flossmoor, IL
-
1,292
9,496
1,292
10,169
1,467
19715 Governors Highway
Fareham, England
-
4,300
22,743
-
4,300
22,743
Redlands Lane
Frome, England
-
3,435
18,756
-
3,435
18,756
Welshmill Lane
Fullerton, CA
12,999
1,964
19,989
1,964
20,296
2,328
2226 North Euclid Street
Fort Worth, TX
-
2,080
27,888
2,082
28,736
4,607
2151 Green Oaks Road
Gahanna, OH
-
11,214
12,155
1,043
775 East Johnstown Road
Guildford, England
-
6,769
71,005
-
6,769
71,005
6,885
Astolat Way, Peasmarsh
Gilroy, CA
-
13,880
24,144
1,539
37,245
6,994
7610 Isabella Way
Gilbert, AZ
16,589
2,160
28,246
2,160
28,482
4,232
580 S. Gilbert Road
Glen Cove, NY
-
4,594
35,236
4,594
36,228
4,949
39 Forest Avenue
Glenview, IL
-
2,090
69,288
2,090
70,136
8,258
2200 Golf Road
Green Valley, AZ
-
-
-
-
500 W Camino Encanto
Grosse Pointe Woods, MI
-
13,662
13,798
1,272
1850 Vernier Road
Grosse Pointe Woods, MI
-
1,430
31,777
1,430
32,078
3,000
21260 Mack Avenue
Gatineau, QC
-
-
-
-
-
-
(0)
250 St. Raymond Boulevard
Guelph, ON
-
-
-
-
-
-
(0)
1691 Gordon Street
Gurnee, IL
-
27,931
28,662
2,432
500 North Hunt Club Road
Golden Valley, MN
20,093
1,520
33,513
1,520
33,906
3,263
4950 Olson Memorial Highway
Holbrook, NY
-
3,957
35,337
3,957
35,599
3,730
320 Patchogue Holbrook Road
Highland Park, IL
-
2,250
25,313
2,259
25,536
3,531
1601 Green Bay Road
Huntington Beach, CA
-
3,808
31,172
3,810
31,678
4,417
7401 Yorktown Avenue
Altrincham, England
-
5,685
29,221
2,045
5,347
31,604
3,580
295 Hale Road
Horley, England
-
2,944
15,379
-
2,944
15,379
Court Lodge Road
Hamden, CT
15,389
1,460
24,093
1,487
24,789
4,423
35 Hamden Hills Drive
Hampshire, England
-
5,268
32,516
-
5,268
32,516
3,356
22-26 Church Road
Henderson, NV
-
29,809
29,899
3,253
1935 Paseo Verde Parkway
Henderson, NV
5,777
1,190
11,600
1,202
11,900
2,314
1555 West Horizon Ridge Parkway
Houston, TX
-
3,830
55,674
4,074
3,830
59,749
8,533
2929 West Holcombe Boulevard
Houston, TX
17,923
1,040
31,965
5,231
1,040
37,196
4,054
505 Bering Drive
Houston, TX
7,719
27,598
1,244
28,842
4,278
10225 Cypresswood Dr
Hove, England
-
1,717
8,430
-
1,717
8,430
Furze Hill
Irving, TX
-
1,030
6,823
1,030
7,590
1,482
8855 West Valley Ranch Parkway
Johns Creek, GA
-
1,580
23,285
1,580
23,398
2,563
11405 Medlock Bridge Road
Jonquière, QC
-
-
-
-
-
-
(0)
3978 Harvey Boulevard
Kennebunk, ME
-
2,700
30,204
1,705
2,973
31,636
4,969
One Huntington Common Drive
Kitchener, ON
-
2,990
-
2,990
164 - 168 Ferfus Avenue
Kitchener, ON
5,683
1,348
11,779
-
1,348
11,779
1,577
20 Fieldgate Street
Kitchener, ON
4,330
1,302
8,475
-
1,302
8,475
1,680
290 Queen Street South
Kelowna, BC
7,291
3,205
15,981
-
3,205
15,981
2,659
863 Leon Avenue
Cincinnati, OH
-
2,060
109,388
4,202
2,060
113,590
12,750
5445 Kenwood Road
Kingsville, ON
-
-
-
-
-
-
(0)
240 Main Street East
Kanata, ON
-
1,955
36,314
-
1,955
36,314
5,428
70 Stonehaven Drive
Kingwood, TX
3,087
9,777
10,086
1,493
22955 Eastex Freeway
Solihull, England
-
6,402
54,129
-
6,402
54,129
6,457
1270 Warwick Road
Kansas City, MO
-
1,820
34,898
3,095
1,845
37,968
6,273
12100 Wornall Road
Kansas City, MO
6,530
1,930
39,997
2,555
1,963
42,519
7,711
6500 North Cosby Ave
Kirkland, WA
24,600
3,450
38,709
3,454
39,026
4,870
14 Main Street South
London, England
-
3,941
12,591
-
3,941
12,591
-
71 Hatch Lane
Leawood, KS
15,886
2,490
32,493
5,617
30,061
4,718
4400 West 115th Street
Lenexa, KS
9,925
26,251
26,527
3,086
15055 West 87th Street Parkway
Lafayette Hill, PA
-
1,750
11,848
1,164
1,789
12,973
2,004
429 Ridge Pike
Longueuil, QC
-
-
-
-
-
-
3460 Chambly Road
Lincroft, NJ
-
19,958
20,580
2,090
734 Newman Springs Road
Lombard, IL
17,168
2,130
59,943
2,130
60,158
5,310
2210 Fountain Square Dr
London, ON
-
-
-
-
-
-
(0)
609 Wharncliff Road South
Langley, BC
-
-
-
-
-
-
6676 203rd Street
Los Angeles, CA
-
-
11,430
-
12,426
1,824
330 North Hayworth Avenue
Los Angeles, CA
65,431
-
114,438
-
115,219
16,608
10475 Wilshire Boulevard
Los Angeles, CA
-
3,540
19,007
3,540
19,510
2,292
2051 N. Highland Avenue
Louisville, KY
-
2,420
20,816
2,420
21,188
2,743
4600 Bowling Boulevard
Louisville, KY
11,351
1,600
20,326
1,600
20,487
2,719
6700 Overlook Drive
La Palma, CA
-
2,950
16,591
2,950
16,902
1,860
5321 La Palma Avenue
Lawrenceville, GA
16,177
1,500
29,003
1,508
29,202
3,241
1375 Webb Gin House Road
Lynnfield, MA
-
3,165
45,200
3,165
46,142
4,927
55 Salem Street
Mansfield, MA
28,326
3,320
57,011
1,863
3,395
58,798
10,606
25 Cobb Street
Mansfield, MA
-
-
-
-
-
-
25 Cobb Street
Mobberley, England
-
6,497
33,425
-
6,497
33,425
5,408
Barclay Park, Hall Lane
Marlboro, NJ
-
2,222
14,888
2,222
15,254
1,860
3A South Main Street
Meriden, CT
9,381
1,500
14,874
1,525
15,360
3,612
511 Kensington Avenue
Metairie, LA
13,456
27,708
27,962
2,596
3732 West Esplanade Ave. S
Milford, CT
11,527
3,210
17,364
3,210
18,202
3,589
77 Plains Road
Middletown, CT
15,451
1,430
24,242
1,439
24,786
4,604
645 Saybrook Road
Middletown, RI
16,432
2,480
24,628
1,060
2,495
25,672
4,573
303 Valley Road
Moose Jaw, SK
3,344
15,150
-
15,150
1,980
425 4th Avenue NW
Markham, ON
19,991
4,446
57,556
-
4,446
57,556
7,645
7700 Bayview Avenue
Memphis, TN
-
1,800
17,744
1,800
18,269
3,227
6605 Quail Hollow Road
Mississauga, ON
11,074
1,909
21,371
-
1,909
21,371
2,755
1130 Bough Beeches Boulevard
Mississauga, ON
3,727
1,121
5,308
1,025
5,432
3051 Constitution Boulevard
Minnetonka, MN
14,462
2,080
24,360
2,131
24,935
3,106
500 Carlson Parkway
Minnetonka, MN
16,532
29,344
29,577
2,664
18605 Old Excelsior Blvd.
Montreal, QC
-
-
-
-
-
-
3000 Notre Dame Street
Monterey, CA
-
6,440
29,101
6,440
29,419
3,190
1110 Cass St.
Montgomery Village, MD
-
3,530
18,246
1,421
3,544
19,653
3,819
19310 Club House Road
Malvern, PA
-
1,651
17,194
1,653
18,188
3,163
324 Lancaster Avenue
Mystic, CT
11,527
1,400
18,274
1,427
18,787
3,139
20 Academy Lane Mystic
North Andover, MA
22,685
1,960
34,976
1,983
35,702
5,781
700 Chickering Road
Newton, MA
27,958
2,250
43,614
2,260
43,975
6,946
2300 Washington Street
Newton, MA
16,177
2,500
30,681
1,549
2,507
32,223
5,458
280 Newtonville Avenue
Newton, MA
-
3,360
25,099
3,376
25,971
4,715
430 Centre Street
Niantic, CT
-
1,320
25,986
4,022
1,331
29,997
3,789
417 Main Street
Newmarket, ON
-
-
-
-
-
-
(0)
197 Prospect Street
Naperville, IL
-
1,540
28,204
1,540
28,594
3,322
535 West Ogden Avenue
Nashville, TN
-
3,900
35,788
3,900
36,281
5,856
4206 Stammer Place
Newtown Square, PA
-
1,930
14,420
1,941
14,803
2,772
333 S. Newtown Street Rd.
North Tustin, CA
-
2,880
18,059
2,880
18,260
1,514
12291 Newport Avenue
Newmarket, England
-
5,141
13,478
-
5,141
13,478
Jeddah Way
Oakland, CA
-
3,877
47,508
3,877
48,208
5,383
11889 Skyline Boulevard
Oshawa, ON
4,005
1,002
8,895
-
1,002
8,895
1,250
649 King Street East
Oakton, VA
-
2,250
37,576
1,137
2,252
38,710
3,902
2863 Hunter Mill Road
Oak Park, IL
-
1,250
40,383
1,250
40,806
5,100
1035 Madison Street
Oakville, ON
1,819
1,622
8,357
1,494
8,494
1,156
289 and 299 Randall Street
Oakville, ON
12,660
2,539
35,287
-
2,539
35,287
5,000
25 Lakeshore Road West
Oakville, ON
6,596
1,516
16,093
-
1,516
16,093
1,759
345 Church Street
Oceanside, CA
12,714
2,160
18,352
2,193
19,130
3,363
3500 Lake Boulevard
Ottawa, ON
-
-
-
-
-
-
1344 Belcourt Boulevard
Ottawa, ON
3,658
4,998
5,560
1345 Ogilvie Road
Ottawa, ON
-
2,165
1,572
3,803
370 Kennedy Lane
Ottawa, ON
13,292
3,351
32,372
-
3,351
32,372
5,237
43 Aylmer Avenue
Ottawa, ON
5,852
1,329
11,519
-
1,329
11,519
1,179
1351 Hunt Club Road
Ottawa, ON
4,292
9,029
9,148
1,137
140 Darlington Private
Overland Park, KS
3,533
1,540
16,269
1,678
16,945
1,862
9201 Foster
Paramus, NJ
-
2,840
35,728
2,845
36,484
3,491
567 Paramus Road
Palo Alto, CA
17,129
-
39,639
-
40,267
4,188
2701 El Camino Real
Pointe-aux-Trembles, QC
-
-
-
-
-
-
(0)
3478 32nd avenue
Peabody, MA
6,446
-
-
18,543
2,200
16,343
73 Margin Street
Pembroke, ON
-
2,234
11,894
-
2,234
11,894
1,760
1111 Pembroke Street West
Plano, TX
4,167
8,538
9,197
1,655
5521 Village Creek Dr
Plano, TX
29,228
3,120
59,950
3,120
60,226
6,807
4800 West Parker Road
Plainview, NY
-
3,066
19,901
3,071
20,104
1,811
1231 Old Country Road
Providence, RI
-
2,600
27,546
2,639
28,351
6,482
700 Smith Street
Pittsburgh, PA
-
1,580
18,017
1,580
18,262
2,342
900 Lincoln Club Dr.
Pointe-Claire, QC
-
-
-
-
-
-
(0)
230 Hymus Boulevard
Purley, England
-
9,676
35,251
8,450
9,279
44,098
5,882
21 Russell Hill Road
Playa Vista, CA
-
1,580
40,531
1,580
41,012
4,541
5555 Playa Vista Drive
Quebec City, QC
-
-
-
-
-
-
(0)
545 Francis-Byrne Street
Quebec City, QC
-
-
-
-
-
-
1217 route de l'Eglise
Quebec City, QC
-
-
-
-
-
-
(0)
2321 del la Canardière
Quincy, MA
-
1,350
12,584
1,374
13,005
2,296
2003 Falls Boulevard
Rancho Cucamonga, CA
-
1,480
10,055
1,487
10,351
1,536
9519 Baseline Road
Randolph, NJ
-
1,540
46,934
1,540
47,172
4,896
648 Route 10 West
Redondo Beach, CA
-
-
9,557
-
9,754
3,088
514 North Prospect Ave
Regina, SK
8,696
1,771
25,011
-
1,771
25,011
3,179
3651 Albert Street
Regina, SK
8,332
1,482
24,918
-
1,482
24,918
2,768
3105 Hillsdale Street
Rocky Hill, CT
10,423
16,351
16,556
2,583
1160 Elm Street
Romeoville, IL
-
12,646
58,777
6,150
66,127
8,715
605 S Edward Dr.
Renton, WA
21,945
3,080
51,824
3,080
52,065
6,477
104 Burnett Avenue South
Rancho Palos Verdes, CA
-
5,450
60,034
5,450
60,563
7,472
5701 Crestridge Road
Roseville, MN
-
1,540
35,877
1,585
36,186
3,344
2555 Snelling Avenue, North
Roswell, GA
-
2,080
6,486
2,380
6,512
1,067
75 Magnolia Street
Sacramento, CA
-
1,300
23,394
1,304
23,646
2,274
345 Munroe Street
Salem, NH
20,907
32,721
1,048
33,218
4,725
242 Main Street
St. Albert, AB
10,979
1,365
21,172
-
1,365
21,172
1,387
78C McKenney Avenue
Seal Beach, CA
-
6,204
72,954
6,208
73,639
11,648
3850 Lampson Avenue
Bournemouth, England
-
6,979
53,622
-
6,979
53,622
4,774
42 Belle Vue Road
Scarborough, ON
-
-
-
-
-
-
65 Livingston Road
Swift Current, SK
2,981
11,821
-
11,821
1,469
301 Macoun Drive
Scottsdale, AZ
-
2,500
3,890
1,133
2,500
5,023
9410 East Thunderbird Road
Sun City West, AZ
12,478
1,250
21,778
1,250
22,498
2,287
13810 West Sandridge Drive
Studio City, CA
-
4,006
25,307
4,017
25,657
3,555
4610 Coldwater Canyon Avenue
San Diego, CA
-
4,200
30,707
4,200
30,823
2,473
2567 Second Avenue
San Diego, CA
-
5,810
63,078
5,810
63,619
10,073
13075 Evening Creek Drive S
San Diego, CA
-
3,000
27,164
3,000
27,434
2,449
810 Turquoise Street
San Diego, CA
-
-
-
-
-
11588 Via Rancho San Diego
Sandy Springs, GA
-
2,214
8,360
2,220
8,619
1,507
5455 Glenridge Drive NE
Seattle, WA
48,540
6,790
85,369
1,274
6,792
86,641
11,031
5300 24th Avenue NE
San Gabriel, CA
-
3,120
15,566
3,120
15,901
1,825
8332 Huntington Drive
Schaumburg, IL
-
2,460
22,863
2,471
23,451
3,195
790 North Plum Grove Road
Shelburne, VT
19,865
31,041
1,199
32,204
4,211
687 Harbor Road
Sidcup, England
-
9,773
56,163
13,642
9,365
70,213
10,379
Frognal Avenue
San Juan Capistrano, CA
-
1,390
6,942
1,390
7,898
2,737
30311 Camino Capistrano
St-Jerome, QC
-
-
-
-
-
-
475 Aubry
Spokane, WA
-
3,200
25,064
3,200
25,287
3,698
3117 E. Chaser Lane
Spokane, WA
-
2,580
25,342
2,580
25,442
3,501
1110 E. Westview Ct.
Stockport, England
-
5,516
31,307
-
5,516
31,307
4,465
1 Dairyground Road
Salt Lake City, UT
-
1,360
19,691
1,360
20,281
4,418
1430 E. 4500 S.
Santa Monica, CA
20,302
5,250
28,340
5,250
28,693
2,958
1312 15th Street
Sonning, England
-
7,099
53,058
-
7,099
53,058
5,801
Old Bath Rd.
San Jose, CA
-
2,850
35,098
2,850
35,256
4,353
1420 Curvi Drive
San Jose, CA
-
3,280
46,823
3,280
47,379
5,789
500 S Winchester Boulevard
Sunnyvale, CA
-
5,420
41,682
5,420
42,118
5,573
1039 East El Camino Real
Solihull, England
-
4,510
32,605
-
4,510
32,605
4,020
1 Worcester Way
Surrey, BC
-
-
-
-
-
-
13853 102nd Avenue
Surrey, BC
8,833
4,298
21,938
-
4,298
21,938
4,286
16028 83rd Avenue
Surrey, BC
4,182
5,431
26,369
-
5,431
26,369
4,637
15501 16th Avenue
Salisbury, England
-
3,435
19,365
-
3,435
19,365
Shapland Close
Saskatoon, SK
5,365
1,168
16,235
-
1,168
16,235
1,631
220 24th Street East
Saskatoon, SK
12,366
1,647
20,530
-
1,647
20,530
2,096
1622 Acadia Drive
Stittsville, ON
5,946
1,529
17,762
2,581
1,402
20,470
2,075
1340 - 1354 Main Street
Santa Maria, CA
-
6,050
50,658
6,063
51,229
9,445
1220 Suey Road
Shelby Township, MI
16,789
1,040
26,344
1,093
26,607
2,539
46471 Hayes Road
Sugar Land, TX
5,460
31,423
1,240
32,662
5,389
1221 Seventh St
Sevenoaks, England
-
7,804
50,524
-
7,804
50,524
6,799
64 - 70 Westerham Road
Simi Valley, CA
-
3,200
16,664
3,200
16,951
2,728
190 Tierra Rejada Road
South Windsor, CT
-
3,000
29,295
1,185
3,052
30,429
5,686
432 Buckland Road
Suwanee, GA
-
1,560
11,538
1,560
11,960
1,742
4315 Johns Creek Parkway
Sway, England
-
5,234
19,285
-
5,234
19,285
Sway Place
Tacoma, WA
18,640
2,400
35,053
2,446
35,150
4,399
7290 Rosemount Circle
Tucson, AZ
4,698
6,179
3,305
9,484
5660 N. Kolb Road
Tucson, AZ
-
-
-
-
-
6231 N Montebella Road
Toledo, OH
15,741
2,040
47,129
1,454
2,144
48,478
9,208
3501 Executive Parkway
Toronto, ON
-
-
-
-
-
-
10 Senlac
Toronto, ON
1,901
1,287
6,247
-
1,287
6,247
25 Centennial Park Road
Toronto, ON
10,411
2,998
23,165
-
2,998
23,165
1,797
305 Balliol Street
Toronto, ON
22,708
4,055
38,437
-
4,055
38,437
5,038
1055 and 1057 Don Mills Road
Toronto, ON
1,480
1,767
2,730
1,622
3,248
3705 Bathurst Street
Toronto, ON
2,399
1,851
3,785
1,726
4,499
1340 York Mills Road
Toronto, ON
40,022
6,321
62,703
-
6,321
62,703
8,315
8 The Donway East
Trumbull, CT
24,647
2,850
37,685
2,906
38,376
6,994
2750 Reservoir Avenue
Tustin, CA
6,827
15,299
15,442
2,087
240 East 3rd St
Tulsa, OK
6,129
1,330
21,285
1,108
1,350
22,373
3,860
8887 South Lewis Ave
Tulsa, OK
8,010
1,500
20,861
1,515
21,820
4,159
9524 East 71st St
Upper St Claire, PA
-
1,102
13,455
1,102
13,861
1,999
500 Village Drive
Virginia Water, England
-
7,106
29,937
7,313
6,823
37,534
4,708
Christ Church Road
Vankleek Hill, ON
1,414
3,448
-
3,448
48 Wall Street
Victoria, BC
-
3,189
16,793
-
3,189
16,793
2,708
2638 Ross Lane
Victoria, BC
9,277
3,405
21,327
-
3,405
21,327
3,221
3000 Shelbourne Street
Victoria, BC
8,553
4,359
18,642
-
4,359
18,642
2,889
3051 Shelbourne Street
Victoriaville, QC
-
-
-
-
-
-
222 Notre Dame West
Warwick, RI
15,941
2,400
24,635
2,407
25,487
5,498
75 Minnesota Avenue
Wayland, MA
-
1,207
27,462
1,307
28,226
3,064
285 Commonwealth Road
West Babylon, NY
-
3,960
47,085
3,960
47,346
4,438
580 Montauk Highway
West Bloomfield, MI
-
1,040
12,300
1,040
12,646
1,411
7005 Pontiac Trail
Waterbury, CT
24,709
2,460
39,547
2,495
40,462
10,223
180 Scott Road
Woodland Hills, CA
-
3,400
20,478
3,406
20,849
2,797
20461 Ventura Boulevard
The Woodlands, TX
2,477
12,379
12,584
1,892
7950 Bay Branch Dr
Weybridge, England
-
9,954
60,475
-
9,954
60,475
8,851
Ellesmere Road
Wilmington, DE
-
1,040
23,338
1,040
23,743
2,618
2215 Shipley Street
West Hills, CA
-
2,600
7,521
2,600
7,836
1,565
9012 Topanga Canyon Road
White Oak, MD
-
2,304
24,768
2,304
25,342
2,376
11621 New Hampshire Avenue
Wilbraham, MA
11,159
17,639
18,182
2,796
2387 Boston Road
Walnut Creek, CA
-
3,700
12,467
3,723
13,169
2,234
2175 Ygnacio Valley Road
Wolverhampton, England
-
3,708
10,876
-
3,708
10,876
2,217
73 Wergs Road
Winchester, England
-
7,587
36,990
-
7,587
36,990
4,347
Stockbridge Road
Windsor, ON
-
-
-
-
-
-
590 Grand Marais Road East
Winnipeg, MB
16,462
2,335
45,398
-
2,335
45,398
6,374
857 Wilkes Avenue
Winnipeg, MB
9,630
1,516
25,633
-
1,516
25,633
3,092
3161 Grant Avenue
Woodbridge, CT
-
1,370
14,219
1,391
14,974
3,689
21 Bradley Road
Worcester, MA
13,979
1,140
21,664
1,152
22,273
3,422
340 May Street
Washington, DC
32,699
4,000
69,154
4,000
69,593
7,335
5111 Connecticut Avenue NW
Westbourne, England
-
6,858
51,920
-
6,858
51,920
5,870
16-18 Poole Road
Weston, MA
-
1,160
6,200
1,160
6,647
135 North Avenue
West Vancouver, BC
23,475
9,128
32,217
8,421
33,028
4,501
2095 Marine Drive
Weymouth, England
3,271
21,011
-
3,271
21,011
Cross Road
Yarmouth, ME
17,412
27,711
28,086
4,026
27 Forest Falls Drive
Yorkton, SK
4,172
10,218
-
10,218
1,252
94 Russell Drive
Yonkers, NY
-
3,962
50,107
3,967
50,459
5,226
65 Crisfield Street
Seniors Housing Operating Total
$
1,654,531
$
773,492
$
8,293,454
$
348,816
$
788,969
$
8,626,789
$
1,110,393
Health Care REIT, Inc.
Schedule III
Real Estate and Accumulated Depreciation
December 31, 2014
(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
Medical Facilities:
Akron, OH
$
-
$
$
12,105
$
-
$
$
12,105
$
1,086
701 White Pond Drive
Allen, TX
12,080
14,196
-
14,196
2,325
1105 N Central Expressway
Alpharetta, GA
-
18,902
-
18,902
2,978
3400-A Old Milton Parkway
Alpharetta, GA
-
1,769
36,256
-
1,769
36,256
6,603
3400-C Old Milton Parkway
Alpharetta, GA
-
14,757
-
14,757
2,515
11975 Morris Road
Alpharetta, GA
-
1,862
-
-
1,862
-
-
940 North Point Parkway
Alpharetta, GA
-
17,103
-
17,103
3,361
3300 Old Milton Parkway
Arcadia, CA
-
5,408
23,219
2,636
5,618
25,644
6,927
301 W. Huntington Drive
Arlington, TX
-
18,243
-
18,243
902 W. Randol Mill Road
Atlanta, GA
-
4,931
18,720
4,611
5,348
22,914
7,351
755 Mt. Vernon Hwy.
Atlanta, GA
17,260
1,947
24,248
-
1,947
24,248
2,989
975 Johnson Ferry Road
Atlanta, GA
26,086
-
43,425
-
-
43,425
7,248
5670 Peachtree-Dunwoody Road
Bartlett, TN
7,895
15,015
1,619
16,634
4,657
2996 Kate Bond Rd.
Bellevue, NE
-
-
16,680
-
-
16,680
2,780
2510 Bellevue Medical Center Drive
Bettendorf, IA
-
-
7,110
-
-
7,110
2140 53rd Avenue
Birmingham, AL
-
10,201
-
10,201
2,826
801 Princeton Avenue SW
Birmingham, AL
-
12,492
-
12,492
3,287
817 Princeton Avenue SW
Birmingham, AL
-
19,864
-
19,864
5,231
833 Princeton Avenue SW
Boardman, OH
-
12,165
-
12,165
2,489
8423 Market St
Boca Raton, FL
-
34,002
2,278
36,175
9,947
9970 S. Central Park Blvd.
Boca Raton, FL
-
12,312
-
12,312
1,451
9960 S. Central Park Boulevard
Boerne, TX
-
13,541
-
13,541
2,436
134 Menger Springs Road
Boynton Beach, FL
-
2,048
7,692
2,048
8,194
2,745
8188 Jog Rd.
Boynton Beach, FL
-
2,048
7,403
1,078
2,048
8,480
2,564
8200 Jog Road
Boynton Beach, FL
5,650
5,611
7,919
13,627
3,601
10075 Jog Rd.
Boynton Beach, FL
26,001
13,324
40,369
-
13,324
40,369
3,152
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
10,670
21,272
-
21,272
4,139
12266 DePaul Dr
Burleson, TX
-
12,611
-
12,611
1,885
12001 South Freeway
Burnsville, MN
-
-
32,168
-
-
32,168
14101 Fairview Dr
Carmel, IN
-
2,280
19,238
-
2,280
19,238
4,264
12188-A North Meridian Street
Carmel, IN
-
2,026
21,559
-
2,026
21,559
5,597
12188-B North Meridian Street
Castle Rock, CO
-
13,004
-
13,004
2352 Meadows Boulevard
Cedar Grove, WI
-
-
313 S. Main St.
Charleston, SC
-
2,773
25,928
-
2,773
25,928
325 Folly Road
Cincinnati, OH
-
-
17,880
-
-
17,880
3301 Mercy West Boulevard
Claremore, OK
7,873
12,829
13,236
3,898
1501 N. Florence Ave.
Clarkson Valley, MO
-
-
35,592
-
-
35,592
6,773
15945 Clayton Rd
Clear Lake, TX
-
-
14,027
-
-
14,027
1010 South Ponds Drive
Columbia, MD
-
2,291
19,841
-
2,291
19,841
1,974
10700 Charter Drive
Columbus, OH
-
7,646
-
7,646
1,375
750 Mt. Carmel Mall
Coon Rapids, MN
-
-
26,679
-
-
26,679
11850 Blackfoot Street NW
Coral Springs, FL
-
1,598
10,627
1,276
1,636
11,865
4,092
1725 N. University Dr.
Dade City, FL
-
1,211
5,511
-
1,211
5,511
13413 US Hwy 301
Dallas, TX
14,247
28,690
2,150
30,841
8,751
9330 Poppy Dr.
Dallas, TX
28,450
52,488
-
52,488
5,173
7115 Greenville Avenue
Dayton, OH
-
6,937
-
6,937
1,342
1530 Needmore Road
Deerfield Beach, FL
-
2,408
7,809
-
2,408
7,809
1,943
1192 East Newport Center Drive
Delray Beach, FL
-
1,882
34,767
5,402
2,064
39,987
12,678
5130-5150 Linton Blvd.
Durham, NC
-
1,212
22,858
-
1,212
22,858
1823 Hillandale Road
Edina, MN
-
15,132
-
15,132
2,572
8100 W 78th St
El Paso, TX
9,558
17,075
2,045
19,120
6,157
2400 Trawood Dr.
Everett, WA
-
4,842
26,010
-
4,842
26,010
3,806
13020 Meridian Ave. S.
Fayetteville, GA
-
7,540
8,281
2,485
1275 Hwy. 54 W.
Fenton, MO
11,880
27,485
-
27,485
1,594
1011 Bowles Avenue
Fenton, MO
5,733
13,911
-
13,911
1055 Bowles Avenue
Flower Mound, TX
-
4,164
27,529
-
4,164
27,529
4370 Medical Arts Drive
Flower Mound, TX
-
5,980
-
-
5,980
-
-
Medical Arts Drive
Fort Wayne, IN
16,378
1,105
22,836
-
1,105
22,836
2,090
7916 Jefferson Boulevard
Fort Worth, TX
-
26,020
-
26,020
10840 Texas Health Trail
Fort Worth, TX
-
6,099
-
6,099
7200 Oakmont Boulevard
Franklin, TN
-
2,338
12,138
2,074
2,338
14,212
3,865
100 Covey Drive
Franklin, WI
5,061
6,872
7,550
-
6,872
7,550
1,398
9200 W. Loomis Rd.
Frisco, TX
-
-
18,635
1,164
-
19,799
5,186
4401 Coit Road
Frisco, TX
-
-
15,309
2,112
-
17,421
5,281
4461 Coit Road
Gallatin, TN
-
21,801
-
21,801
4,600
300 Steam Plant Rd
Germantown, TN
-
3,049
12,456
3,049
13,193
3,655
1325 Wolf Park Drive
Glendale, CA
-
18,398
19,142
4,717
222 W. Eulalia St.
Grand Prairie, TX
-
6,086
-
6,086
2740 N State Hwy 360
Grapevine, TX
5,548
-
5,943
-
-
5,943
-
2040 W State Hwy 114
Grapevine, TX
10,044
-
22,557
-
-
22,557
-
2020 W State Hwy 114
Green Bay, WI
7,635
-
14,891
-
-
14,891
2,435
2253 W. Mason St.
Green Bay, WI
-
-
20,098
-
-
20,098
3,224
2845 Greenbrier Road
Green Bay, WI
-
-
11,696
-
-
11,696
2,606
2845 Greenbrier Road
Greeneville, TN
-
10,131
-
10,131
1,918
438 East Vann Rd
Greenwood, IN
-
8,316
26,384
-
8,316
26,384
2,648
1260 Innovation Parkway
Greenwood, IN
-
1,262
7,045
-
1,262
7,045
333 E County Line Road
Grenwood, IN
-
2,098
21,538
-
2,098
21,538
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
29,069
2,345
4515 Premier Drive
Highland, IL
-
-
8,834
-
-
8,834
12860 Troxler Avenue
Houston, TX
-
10,403
-
-
10,403
-
15655 Cypress Woods Medical Drive
Houston, TX
-
5,837
33,128
-
5,837
33,128
4,677
15655 Cypress Woods Medical Drive
Houston, TX
-
3,688
13,313
-
3,688
13,313
1,318
10701 Vintage Preserve Parkway
Houston, TX
-
3,102
32,323
-
3,102
32,323
1900 N Loop W Freeway
Houston, TX
14,000
31,932
-
31,932
4,534
18100 St John Drive
Houston, TX
-
10,617
-
10,617
1,461
2060 Space Park Drive
Houston, TX
-
-
-
58,173
12,815
45,359
4,159
2727 W Holcombe Boulevard
Hudson, OH
-
2,587
13,720
-
2,587
13,720
1,695
5655 Hudson Drive
Humble, TX
-
-
10,358
-
-
10,358
8233 N. Sam Houston Parkway E.
Jackson, MI
-
17,367
-
17,367
1,015
1201 E Michigan Avenue
Jupiter, FL
6,655
2,252
11,415
2,252
11,878
3,426
550 Heritage Dr.
Jupiter, FL
-
2,825
5,858
2,825
6,271
2,027
600 Heritage Dr.
Katy, TX
-
1,099
1,604
-
1,099
1,604
21660 Kingsland Blvd
Kenosha, WI
8,312
-
18,058
-
-
18,058
2,891
10400 75th St.
Killeen, TX
-
22,878
-
22,878
3,975
2405 Clear Creek Rd
Kyle, TX
-
2,569
14,384
-
2,569
14,384
135 Bunton Road
La Quinta, CA
-
3,266
22,066
-
3,266
22,066
47647 Caleo Bay Drive
Lake St Louis, MO
-
14,249
-
14,249
2,693
400 Medical Dr
Lakeway, TX
-
2,801
-
-
2,801
-
-
Lohmans Crossing Road
Lakewood, CA
-
14,885
1,732
16,617
4,188
5750 Downey Ave.
Lakewood, WA
7,242
16,058
-
16,058
1,247
11307 Bridgeport Way SW
Las Vegas, NV
-
2,319
4,612
1,021
2,319
5,632
1,722
2870 S. Maryland Pkwy.
Las Vegas, NV
-
15,287
1,022
16,310
4,510
1815 E. Lake Mead Blvd.
Las Vegas, NV
-
6,921
7,133
2,166
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
-
17,926
2,622
23401 Prairie Star Pkwy
Lenexa, KS
-
14,364
-
14,364
23351 Prairie Star Parkway
Lincoln, NE
-
1,420
29,723
-
1,420
29,723
6,423
575 South 70th St
Los Alamitos, CA
-
18,635
1,141
19,776
5,018
3771 Katella Ave.
Los Gatos, CA
-
22,386
1,402
23,787
7,422
555 Knowles Dr.
Loxahatchee, FL
-
1,637
5,048
1,719
5,875
1,752
12977 Southern Blvd.
Loxahatchee, FL
-
1,340
6,509
1,345
6,976
1,993
12989 Southern Blvd.
Loxahatchee, FL
-
1,553
4,694
1,057
1,650
5,654
1,561
12983 Southern Blvd.
Marinette, WI
6,576
-
13,538
-
-
13,538
2,607
4061 Old Peshtigo Rd.
Melbourne, FL
-
3,439
50,461
-
3,439
50,461
1,053
2222 South Harbor City Boulevard
Merced, CA
-
-
14,699
-
-
14,699
2,691
315 Mercy Ave.
Merriam, KS
-
1,226
25,099
-
1,226
25,099
1,265
9301 West 74th Street
Merriam, KS
-
8,005
-
8,005
2,066
8800 West 75th Street
Merriam, KS
-
3,849
-
3,849
7301 Frontage Street
Merriam, KS
-
13,318
-
13,318
3,022
8901 West 74th Street
Merriam, KS
14,689
8,144
-
8,144
1,722
9119 West 74th Street
Merrillville, IN
-
-
22,134
-
22,573
4,326
101 E. 87th Ave.
Mesa, AZ
-
1,558
9,561
1,558
9,966
3,338
6424 East Broadway Road
Mesquite, TX
-
3,834
-
3,834
1575 I-30
Milwaukee, WI
3,460
8,457
-
8,457
1,464
1218 W. Kilbourn Ave.
Milwaukee, WI
9,178
1,425
11,520
-
1,425
11,520
2,601
3301-3355 W. Forest Home Ave.
Milwaukee, WI
2,296
2,185
-
2,185
840 N. 12th St.
Milwaukee, WI
19,208
-
44,535
-
-
44,535
6,974
2801 W. Kinnickinnic Pkwy.
Mission Hills, CA
25,500
-
42,276
-
-
42,276
11550 Indian Hills Road
Moline, IL
-
-
8,783
-
-
8,783
3900 28th Avenue Drive
Monticello, MN
8,860
18,489
-
18,489
1,324
1001 Hart Boulevard
Moorestown, NJ
-
-
50,927
-
-
50,927
4,272
401 Young Avenue
Morrow, GA
-
8,064
8,270
2,848
6635 Lake Drive
Mount Juliet, TN
3,524
1,566
11,697
1,099
1,566
12,796
3,818
5002 Crossings Circle
Mount Vernon, IL
-
-
24,892
-
-
24,892
2,150
4121 Veterans Memorial Dr
Murrieta, CA
-
-
47,190
-
-
47,190
8,677
28078 Baxter Rd.
Murrieta, CA
-
3,800
-
-
3,800
-
-
28078 Baxter Rd.
Muskego, WI
1,104
2,159
-
2,159
S74 W16775 Janesville Rd.
Nashville, TN
-
1,806
7,165
1,715
1,806
8,880
3,009
310 25th Ave. N.
New Albany, IN
-
2,411
16,494
-
2,411
16,494
2210 Green Valley Road
New Berlin, WI
4,256
3,739
8,290
-
3,739
8,290
1,440
14555 W. National Ave.
Niagara Falls, NY
-
1,433
10,891
-
1,433
10,891
3,761
6932 - 6934 Williams Rd
Niagara Falls, NY
-
8,500
-
8,500
2,070
6930 Williams Rd
Oklahoma City, OK
-
19,135
-
19,135
1,270
535 NW 9th Street
Orange Village, OH
-
7,419
7,941
2,371
3755 Orange Place
Oro Valley, AZ
9,613
18,339
18,905
4,826
1521 E. Tangerine Rd.
Oshkosh, WI
-
-
18,339
-
-
18,339
2,913
855 North Wethaven Dr.
Oshkosh, WI
8,135
-
15,881
-
-
15,881
2,496
855 North Wethaven Dr.
Palm Springs, FL
2,545
4,066
4,552
1,496
1640 S. Congress Ave.
Palm Springs, FL
-
1,182
7,765
1,182
8,269
2,645
1630 S. Congress Ave.
Palmer, AK
18,660
29,705
1,042
30,747
7,584
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
-
9,594
32,753
11511 Shadow Creek Parkway
Pendleton, OR
-
-
10,324
-
-
10,324
3001 St. Anthony Drive
Phoenix, AZ
(0)
1,149
48,018
11,396
1,149
59,415
16,360
2222 E. Highland Ave.
Pineville, NC
-
6,974
2,369
1,077
9,228
2,853
10512 Park Rd.
Plano, TX
-
5,423
20,752
5,423
21,037
8,288
6957 Plano Parkway
Plano, TX
53,236
83,209
-
83,209
10,534
6020 West Parker Road
Plantation, FL
8,988
8,563
10,666
2,536
8,575
13,190
5,098
851-865 SW 78th Ave.
Plantation, FL
8,342
8,848
9,262
8,908
9,539
5,463
600 Pine Island Rd.
Plymouth, WI
1,288
1,250
1,870
-
1,250
1,870
2636 Eastern Ave.
Portland, ME
-
25,930
-
25,930
3,770
195 Fore River Parkway
Redmond, WA
-
5,015
26,709
-
5,015
26,709
4,096
18000 NE Union Hill Rd.
Reno, NV
-
1,117
21,972
1,144
1,117
23,116
6,412
343 Elm St.
Richmond, VA
-
2,969
26,697
-
2,969
26,697
2,893
7001 Forest Avenue
Rockwall, TX
-
17,197
-
17,197
2,223
3142 Horizon Road
Rogers, AR
-
1,062
29,400
-
1,062
29,400
4,474
2708 Rife Medical Lane
Rolla, MO
-
1,931
47,639
-
1,931
47,639
5,648
1605 Martin Spring Drive
Roswell, NM
1,535
5,851
-
5,851
601 West Country Club Road
Roswell, NM
4,413
15,984
-
15,984
2,040
350 West Country Club Road
Roswell, NM
-
17,171
-
17,171
1,750
300 West Country Club Road
Sacramento, CA
-
12,756
1,727
14,483
3,868
8120 Timberlake Way
Salem, NH
-
1,655
14,050
-
1,655
14,050
31 Stiles Road
San Antonio, TX
18,400
4,518
31,041
-
4,518
31,041
5,074
5282 Medical Drive
San Antonio, TX
-
17,288
-
17,288
3903 Wiseman Boulevard
San Antonio, TX
-
1,012
10,545
-
1,012
10,545
3,142
19016 Stone Oak Pkwy.
San Antonio, TX
-
1,038
9,264
-
1,038
9,264
4,032
540 Stone Oak Centre Drive
Santa Clarita, CA
-
-
28,384
-
-
28,384
23929 McBean Parkway
Santa Clarita, CA
-
-
2,222
-
-
2,222
23871 McBean Parkway
Santa Clarita, CA
25,000
-
41,151
-
-
41,151
23803 McBean Parkway
Santa Clarita, CA
-
-
20,618
-
-
20,618
24355 Lyons Avenue
Santa Clarita, CA
-
9,835
-
-
9,835
-
-
23861 McBean Parkway
Santa Clarita, CA
-
-
2,338
-
-
2,338
23861 McBean Parkway
Santa Clarita, CA
-
-
2,318
-
-
2,318
23861 McBean Parkway
Santa Clarita, CA
-
-
2,318
-
-
2,318
23861 McBean Parkway
Santa Clarita, CA
-
-
2,318
-
-
2,318
23861 McBean Parkway
Santa Clarita, CA
-
-
13,124
-
-
13,124
23861 McBean Parkway
Sarasota, FL
-
47,325
-
47,325
4,592
1921 Waldemere Street
Seattle, WA
-
4,410
38,428
-
4,410
38,428
6,658
5350 Tallman Ave
Sewell, NJ
-
57,929
-
57,929
13,498
239 Hurffville-Cross Keys Road
Shakopee, MN
6,556
11,412
-
11,412
2,207
1515 St Francis Ave
Shakopee, MN
11,094
18,089
-
18,089
2,503
1601 St Francis Ave
Sheboygan, WI
1,779
1,012
2,216
-
1,012
2,216
1813 Ashland Ave.
Shenandoah, TX
-
-
21,653
-
-
21,653
-
106 Vision Park Boulevard
Sherman Oaks, CA
-
-
32,186
-
-
32,186
4955 Van Nuys Boulevard
Somerville, NJ
-
3,400
22,244
3,400
22,246
3,569
30 Rehill Avenue
Southlake, TX
11,680
18,243
-
18,243
2,327
1545 East Southlake Boulevard
Southlake, TX
18,054
30,549
-
30,549
3,182
1545 East Southlake Boulevard
Southlake, TX
-
3,000
-
-
3,000
-
-
Central Avenue
St Paul, MN
-
37,695
-
37,695
225 Smith Avenue N.
St. Louis, MO
-
17,247
1,031
18,278
4,984
2325 Dougherty Rd.
St. Paul, MN
25,253
2,706
39,507
-
2,706
39,507
5,864
435 Phalen Boulevard
Suffern, NY
-
37,255
-
37,255
4,974
255 Lafayette Avenue
Suffolk, VA
-
1,566
11,511
-
1,566
11,511
2,823
5838 Harbour View Blvd.
Sugar Land, TX
8,522
3,543
15,532
-
3,543
15,532
1,761
11555 University Boulevard
Summit, WI
-
2,899
87,666
-
2,899
87,666
19,308
36500 Aurora Dr.
Tacoma, WA
-
-
64,307
-
-
64,307
5,493
1608 South J Street
Tallahassee, FL
-
-
17,449
-
-
17,449
2,815
One Healing Place
Tampa, FL
-
1,212
19,643
-
1,212
19,643
2,548
3000 Medical Park Drive
Tampa, FL
-
2,208
6,491
-
2,208
6,491
1,303
3000 E. Fletcher Avenue
Tampa, FL
-
4,319
12,234
-
4,319
12,234
1,292
14547 Bruce B Downs Blvd
Temple, TX
-
2,900
9,954
-
2,900
9,954
2601 Thornton Lane
Tucson, AZ
-
1,302
4,925
1,302
5,749
1,906
2055 W. Hospital Dr.
Van Nuys, CA
-
-
36,187
-
-
36,187
5,468
6815 Noble Ave.
Virginia Beach, VA
-
19,168
-
19,168
3,725
828 Health Way
Voorhees, NJ
-
6,404
24,251
1,387
6,477
25,564
6,638
900 Centennial Blvd.
Voorhees, NJ
-
96,075
-
96,075
10,205
200 Bowman Drive
Wellington, FL
-
16,933
1,880
18,813
4,290
10115 Forest Hill Blvd.
Wellington, FL
-
13,697
14,111
3,470
1395 State Rd. 7
West Allis, WI
3,267
1,106
3,309
-
1,106
3,309
11333 W. National Ave.
West Palm Beach, FL
-
14,740
14,861
4,448
5325 Greenwood Ave.
West Palm Beach, FL
-
14,618
15,023
4,853
927 45th St.
West Seneca, NY
-
22,435
2,114
1,642
23,824
6,666
550 Orchard Park Rd
Westerville, OH
-
2,122
5,641
-
2,122
5,641
444 N Cleveland Avenue
Zephyrhills, FL
-
3,875
27,270
-
3,875
27,270
3,134
38135 Market Square Dr
Medical facilities total:
$
609,268
$
330,140
$
4,143,585
$
142,524
$
345,036
$
4,271,211
$
648,096
Assets held for sale:
Bellaire, TX
$
-
$
4,551
$
46,105
$
-
$
-
$
-
$
-
5410 W. Loop S.
Bellaire, TX
-
2,972
33,445
-
-
-
-
5420 W. Loop S.
Denton, TX
-
-
19,407
-
-
-
-
2900 North I-35
Stafford, VA
-
-
11,260
-
-
9,422
-
125 Hospital Center Blvd
Bellevue, NE
-
4,500
109,719
-
-
101,627
-
2500 Bellevue Medical Center Dr
Bridgeton, MO
-
-
30,221
-
-
-
-
12380 DePaul Drive
Akron, OH
-
20,200
-
-
-
-
200 E. Market St.
Amelia Island, FL
-
3,290
24,310
-
-
-
-
48 Osprey Village Dr.
Austin, TX
9,658
18,970
-
-
15,750
-
3200 W. Slaughter Lane
Bellevue, WI
-
1,740
18,260
-
-
16,473
-
1660 Hoffman Rd.
Baytown, TX
9,059
6,150
-
-
4,360
-
3921 N. Main St.
Baytown, TX
-
11,110
-
-
9,987
-
2000 West Baker Lane
Corpus Christi, TX
-
1,916
-
-
-
-
1101 S. Alameda
DeForest, WI
-
5,350
-
-
4,862
-
6902 Parkside Circle
Denver, CO
-
2,530
9,514
-
-
-
-
3701 W. Radcliffe Ave.
Frisco, TX
-
16,445
-
-
-
-
2990 Legacy Drive
Grand Blanc, MI
-
7,843
-
-
-
-
5400 East Baldwin
Greenfield, WI
-
6,626
-
-
6,337
-
3933 S. Prairie Hill Lane
Greenville, SC
-
5,400
100,523
-
-
-
-
10 Fountainview Terrace
Houston, TX
9,656
18,715
-
-
15,927
-
8702 South Course Drive
Houston, TX
10,002
5,970
-
-
4,978
-
3625 Green Crest Dr.
Kenosha, WI
-
1,500
9,139
-
-
9,197
-
6300 67th Street
Lapeer, MI
-
7,625
-
-
-
-
2323 Demille Road
Melbourne, FL
-
2,540
21,319
-
-
-
-
3260 N Harbor City Blvd
McHenry, IL
-
3,550
15,300
3,012
-
21,862
-
3300 Charles Miller Rd.
Merrillville, IN
-
7,084
-
-
-
-
101 W. 87th Ave.
Merrillville, IN
-
1,080
3,413
-
-
-
-
300 W. 89th Ave.
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
-
-
14,126
-
131 E. North Water St.
Oshkosh, WI
-
3,800
2,178
-
6,878
-
711 Bayshore Drive
Oshkosh, WI
-
23,237
-
-
20,069
-
631 Hazel Street
Overland Park, KS
-
1,120
8,360
-
-
-
-
7541 Switzer St.
Pasadena, TX
9,679
24,080
-
-
19,862
-
3434 Watters Rd.
Pawleys Island, SC
-
2,020
32,590
-
-
-
-
120 Lakes at Litchfield Dr.
Scituate, MA
-
1,740
10,640
-
-
-
-
309 Driftway
Sheboygan, WI
-
5,320
2,203
-
7,603
-
4221 Kadlec Dr.
Saint Simons Island, GA
-
6,440
50,060
-
-
-
-
136 Marsh's Edge Lane
San Antonio, TX
10,455
7,315
-
-
5,190
-
5437 Eisenhaur Rd.
San Antonio, TX
9,637
13,360
-
-
11,138
-
8503 Mystic Park
Spartanburg, SC
-
3,350
15,750
-
-
-
-
110 Summit Hills Dr.
Tucson, AZ
-
13,399
-
-
-
-
6211 N. La Cholla Blvd.
Waukesha, WI
-
1,100
14,910
-
-
14,042
-
400 Merrill Hills Rd.
Webster, TX
9,210
5,940
-
-
4,128
-
17231 Mill Forest
Winston-Salem, NC
$
-
$
5,700
$
13,550
$
-
$
-
$
-
$
-
2101 Homestead Hills
Assets held for sale total
$
77,355
$
82,756
$
1,093,737
$
7,393
$
-
$
323,818
-
Summary:
Seniors housing triple-net
$
593,414
$
900,397
$
9,683,752
$
365,636
$
912,536
$
10,037,249
$
1,262,419
Seniors housing operating
1,654,531
773,492
8,293,454
348,816
788,969
8,626,789
1,110,393
Medical facilities
609,268
330,140
4,143,585
142,524
345,036
4,271,211
648,096
Construction in progress
-
-
186,327
-
-
186,327
-
Total continuing operating properties
2,857,213
2,004,029
22,307,118
856,976
2,046,541
23,121,576
3,020,908
Assets held for sale
77,355
82,756
1,093,737
7,393
-
323,818
-
Total investments in real property owned
$
2,934,568
$
2,086,785
$
23,400,855
$
864,369
$
2,046,541
$
23,445,394
$
3,020,908
(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
$
23,734,733
$
18,082,399
$
14,844,319
Additions:
Acquisitions
2,210,600
3,597,955
2,923,251
Improvements
380,298
408,844
449,964
Assumed other items, net
160,897
772,972
108,404
Assumed debt
265,152
1,340,939
481,598
Total additions
3,016,947
6,154,628
3,969,299
Deductions:
Cost of real estate sold
(916,997)
(498,564)
(581,696)
Reclassification of accumulated depreciation and amortization for assets held for sale
(64,476)
(3,730)
(120,236)
Impairment of assets
-
-
(29,287)
Total deductions
(981,473)
(502,294)
(731,219)
Foreign currency translation
(278,272)
33,918
6,082
Balance at end of year(3)
$
25,491,935
$
23,734,733
$
18,082,399
Accumulated depreciation:
Balance at beginning of year
$
2,386,658
$
1,555,055
$
1,194,476
Additions:
Depreciation and amortization expenses
844,130
873,960
533,585
Amortization of above market leases
7,935
7,831
7,204
Total additions
852,065
881,791
540,789
Deductions:
Sale of properties
(123,582)
(49,625)
(59,974)
Reclassification of accumulated depreciation and amortization for assets held for sale
(64,476)
(3,730)
(120,236)
Total deductions
(188,058)
(53,355)
(180,210)
Foreign currency translation
(29,757)
3,167
-
Balance at end of year
$
3,020,908
$
2,386,658
$
1,555,055
(3) The aggregate cost for tax purposes for real property equals $21,621,760,000, $20,260,297,000, and $14,788,080,000 at December 31, 2014, 2013 and 2012, respectively.
Health Care REIT, Inc.
Schedule IV - Mortgage Loans on Real Estate
December 31, 2014
(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
Medical office buildings
6.08%
12/22/17
$
314,464
$
-
$
65,000
$
60,902
$
-
United Kingdom
Seniors housing triple-net
7.00%
04/19/18
126,205
-
22,588
21,258
-
United Kingdom
Seniors housing triple-net
7.00%
11/21/18
110,898
-
21,653
18,912
-
Massachusetts
Seniors housing triple-net
7.86%
12/31/16
112,065
-
21,000
16,787
-
United Kingdom
Seniors housing triple-net
7.00%
12/31/19
19,605
-
28,664
4,264
-
Texas
Seniors housing triple-net
7.75%
10/31/18
26,419
-
8,800
4,014
-
Texas
Seniors housing triple-net
7.75%
10/31/18
20,734
-
8,800
3,150
-
United Kingdom
Seniors housing triple-net
8.50%
05/01/16
11,930
-
10,601
1,534
-
United Kingdom
Seniors housing triple-net
7.54%
07/31/15
9,605
-
3,116
1,500
-
Oklahoma
Seniors housing triple-net
8.11%
10/28/19
5,455
-
11,610
-
First mortgage relating to multiple properties:
Five properties in the United Kingdom
Seniors housing triple-net
7.50%
11/30/19
83,130
-
16,356
13,050
-
Second mortgages relating to 1 property located in:
Connecticut
Seniors housing triple-net
8.11%
04/01/18
36,406
15,583
5,300
5,258
-
Texas
Seniors housing triple-net
12.17%
05/01/19
32,042
5,293
3,100
3,100
-
Florida
Seniors housing triple-net
12.17%
07/01/18
27,908
9,283
2,700
2,700
-
Florida
Seniors housing triple-net
12.17%
11/01/18
27,908
7,861
2,700
2,700
-
Colorado
Seniors housing triple-net
9.00%
05/01/16
15,500
7,972
2,000
2,000
-
Indiana
Seniors housing triple-net
9.00%
05/01/16
11,625
7,864
1,500
1,500
-
Canada
Seniors housing triple-net
7.24%
12/31/16
-
12,413
-
Second mortgage relating to multiple properties:
Eleven properties in four states
Seniors housing triple-net
10.00%
12/30/18
$
212,329
29,677
25,000
25,000
-
Totals
$
95,946
$
260,574
$
188,651
$
-
Year Ended December 31,
Reconciliation of mortgage loans:
(in thousands)
Balance at beginning of year
$
146,987
$
87,955
$
63,934
Additions:
New mortgage loans
113,997
68,530
40,641
Draws on existing loans
26,330
-
-
Total additions
140,326
68,530
40,641
Deductions:
Collections of principal
(49,973)
(8,790)
(11,819)
Conversions to real property
(45,836)
-
(3,300)
Charge-offs
-
(2,110)
(1,501)
Total deductions
(95,810)
(10,900)
(16,620)
Change in balance due to foreign currency translation
(2,852)
1,402
-
Balance at end of year
$
188,651
$
146,987
$
87,955
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).
2.1 Agreement and Plan of Merger, dated as of August 21, 2012, by and among Sunrise Senior Living, Inc., Brewer Holdco, Inc., Brewer Holdco Sub, Inc., the Company and Red Fox, Inc. (the exhibits and schedules to the Agreement and Plan of Merger have been omitted pursuant to Item 601(b)(2) of Regulation S-K) (filed with the Commission as Exhibit 2.1 to the Company’s Form 8-K filed August 22, 2012 (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 Elimination of Junior Participating Preferred Stock, Series A, of the Company.
3.1(k) Certificate of Elimination of 6% Series H Cumulative Convertible and Redeemable Preferred Stock of the Company.
3.2 Fourth Amended and Restated By-Laws of the Company (filed with the Commission as Exhibit 3.1 to the Company’s Form 8-K filed November 1, 2011 (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).
4.3 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).
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(a) Sixth Amended and Restated Employment Agreement, dated July 16, 2013, by and between the Company and George L. Chapman (filed with the Commission as Exhibit 10.1 to the Company’s Form 8-K filed July 17, 2013 (File No. 001-08923), and incorporated herein by reference thereto).*
10.4(b) 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 Second Amended and Restated Employment Agreement, dated December 29, 2008, between the Company and Charles J. Herman, Jr. (filed with the Commission as Exhibit 10.3 to the Company’s Form 8-K filed January 5, 2009 (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.*
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).*
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, 2014 and 2013, (ii) the Consolidated Statements of Comprehensive Income for the years ended December 31, 2014, 2013 and 2012, (iii) the Consolidated Statements of Equity for the years ended December 31, 2014, 2013 and 2012, (iv) the Consolidated Statements of Cash Flows for the years ended December 31, 2014, 2013 and 2012, (v) the Notes to Consolidated Financial Statements, (vi) Schedule III - Real Estate and Accumulated Depreciation and (vii) Schedule IV - Mortgage Loans on Real Estate.

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Stock Performance Metrics:
Return: 0.02400946989655495
1-Day Return: $1_day_return
3-Day Return: $3_day_return
5-Day Return: $5_day_return
10-Day Return: $10_day_return
20-Day Return: $20_day_return
40-Day Return: $40_day_return
60-Day Return: $60_day_return
80-Day Return: $80_day_return
100-Day Return: $100_day_return
150-Day Return: $150_day_return
252-Day Return: $252_day_return