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WELLTOWER INC. - Annual Report: 2013 (Form 10-K)

 

 

UNITED STATES SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

FORM 10-K

 

ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d)

OF THE SECURITIES EXCHANGE ACT OF 1934

 

For the fiscal year ended December 31, 2013

Commission File No. 1-8923

 

hcreit_logo_k_sm 

 

HEALTH CARE REIT, INC.

(Exact name of registrant as specified in its charter)

 

 

 

Delaware

 

34-1096634

 

 

 

(State or other jurisdiction of

incorporation or organization)

 

(I.R.S. Employer

Identification No.)

 

 

 

4500 Dorr Street, Toledo, Ohio

 

43615

 

 

 

(Address of principal executive office)

 

(Zip Code)

(419) 247-2800

(Registrant’s telephone number, including area code)  

Securities registered pursuant to Section 12(b) of the Act:

 

Title of Each Class

Name of Each Exchange on Which Registered

Common Stock, $1.00 par value

New York Stock Exchange

6.50% Series I Cumulative

Convertible Perpetual Preferred Stock, $1.00 par value

New York Stock Exchange

6.50% Series J Cumulative

Redeemable Preferred Stock, $1.00 par value

New York Stock Exchange

4.800% Notes due 2028

New York Stock Exchange

 

Securities registered pursuant to Section 12(g) of the Act:  None

 

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.  Yes  þ  No 

 

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or 15(d) of the Act.  Yes  o  No  þ 

 

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to the filing requirements for at least the past 90 days.  Yes  þ  No 

 

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).  Yes  þ  No 

 

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment of this Form 10-K. 

 

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.

 

 

 

 

 

 

 

Large accelerated filer þ  

 

Accelerated filer o  

 

Non-accelerated filer   o

(Do not check if a smaller reporting company)

 

Smaller reporting company o  

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).  Yes  o  No  þ 

 

The aggregate market value of the shares of voting common stock held by non-affiliates of the registrant, computed by reference to the closing sales price of such shares on the New York Stock Exchange as of the last business day of the registrant’s most recently completed second fiscal quarter was $19,053,297,364.

 

As of January 31, 2014, the registrant had 289,970,598 shares of common stock outstanding.

 

DOCUMENTS INCORPORATED BY REFERENCE

 

Portions of the registrant’s definitive proxy statement for the annual stockholders’ meeting to be held May 1, 2014, are incorporated by reference into Part III.

 


 

 

 


 

 

HEALTH CARE REIT, INC.

2013 FORM 10-K ANNUAL REPORT

TABLE OF CONTENTS

 

 

 

Page

 

PART I

 

 

 

Item 1.

Business

3

Item 1A.

Risk Factors

31

Item 1B.

Unresolved Staff Comments

39

Item 2.

Properties

40

Item 3.

Item 4.

Legal Proceedings

Mine Safety Disclosures

42

42

 

 

 

 

PART II

 

 

 

Item 5.

Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities

 

43

Item 6.

Selected Financial Data

45

Item 7.

Management’s Discussion and Analysis of Financial Condition and Results of Operations

46

Item 7A.

Quantitative and Qualitative Disclosures About Market Risk

75

Item 8.

Financial Statements and Supplementary Data

77

Item 9.

Changes in and Disagreements with Accountants on Accounting and Financial Disclosure

112

Item 9A.

Controls and Procedures

112

Item 9B.

Other Information

113

 

 

 

 

PART III

 

 

 

Item 10.

Directors, Executive Officers and Corporate Governance

114

Item 11.

Executive Compensation

114

Item 12.

Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters

114

Item 13.

Certain Relationships and Related Transactions and Director Independence

114

Item 14.

Principal Accounting Fees and Services

114

 

 

 

 

PART IV

 

 

 

Item 15.

Exhibits and Financial Statement Schedules

115

  

 


 

 

PART I

 

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, skilled nursing/post-acute 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.

 

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 line of credit arrangement, 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 line of credit arrangement, 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, 2013.

 

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, continuing care retirement communities, assisted living facilities, care homes with and without nursing, Alzheimer’s/dementia facilities, skilled nursing/post-acute facilities 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.  Independent 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 skilled nursing facility on one campus. These communities

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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 (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.

 

Skilled Nursing/Post-Acute Facilities.  Skilled nursing/post-acute 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.  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.

 

Care Homes with Nursing (United Kingdom).  Care homes with nursing 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 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.

 

     Our seniors housing triple-net segment accounted for 28%, 41% and 46% of total revenues (including discontinued operations) for the years ended December 31, 2013, 2012 and 2011, respectively.  We lease 177 facilities to Genesis HealthCare, LLC, an operator of skilled nursing/post-acute 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, 2013, our lease with Genesis accounted for approximately 34% of our seniors housing triple-net segment revenues and 10% of our total revenues.

 

Seniors Housing Operating

 

In addition to the facility types described in “Item 1 – Business – Property Types – Seniors Housing Triple-Net,” our seniors housing operating properties include facilities classified in Canada as independent supportive living facilities.  

 

 Independent Supportive Living Facilities (Canada).  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.

 

Properties are primarily held in consolidated joint venture entities with operating partners. We utilize the structure proposed in the REIT Investment Diversification 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 56%, 37% and 32% of total revenues (including discontinued operations) for the years ended December 31, 2013, 2012 and 2011, respectively.  We have relationships with nine operators to own and operate 279 facilities (plus 44 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, 2013, our relationship with Sunrise Senior Living accounted for approximately 40% of our seniors housing operating segment revenues and 23% of our total revenues.

 

Medical Facilities

 

Our medical facilities include medical office buildings, hospitals and life science facilities.  We typically lease our medical office buildings to multiple tenants and provide varying levels of property management. Our hospital investments are typically structured similar to our seniors housing triple-net investments.  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 16%, 22% and 22%

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of total revenues (including discontinued operations) for the years ended December 31, 2013, 2012 and 2011, 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 93% 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).

 

Hospitals.  Our hospitals generally include acute care hospitals, inpatient rehabilitation hospitals, and long-term acute care hospitals. Acute care hospitals provide a wide range of inpatient and outpatient services, including, but not limited to, surgery, rehabilitation, therapy and clinical laboratories. Inpatient rehabilitation hospitals provide inpatient services for patients with intensive rehabilitation needs. Long-term acute care hospitals 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 facilities.

 

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 hospitals and 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.

 

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At December 31, 2013, approximately 92% of our hospitals and 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, 2013, 76% of our portfolio included leases with full pass through, 20% with a partial expense reimbursement (modified gross) and 4% 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, 2013 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, 2013, we had outstanding construction investments of $141,085,000 and were committed to provide additional funds of approximately $243,083,000 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, 2013, we had outstanding real estate loans of $332,146,000. The interest yield averaged approximately 8.4% 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, 2013 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. Other equity investments include an investment in available-for-sale securities. These equity investments represented a minimal ownership interest in these companies. 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.

 

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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 line of credit arrangement. 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 investment structures, underwriting criteria and reputation. 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 new and existing laws and regulations.

 

The operators/tenants of our properties compete on a local and regional basis with operators/tenants of properties that provide comparable services. Operators/tenants compete for patients and residents based on a number of factors including quality of care, reputation, physical appearance of properties, location, services offered, family preferences, physicians, staff and price. We also face competition from other health care facilities for tenants, such as physicians and other health care providers that provide comparable facilities and services.

 

For additional information on the risks associated with our business, please see “Item 1A — Risk Factors” of this Annual Report on Form 10-K.

 

Employees  As of January 31, 2014, we had 404 employees.

 

Credit Concentrations  Please see Note 8 to our consolidated financial statements.

 

Geographic Concentrations  Please see “Item 2 – Properties” of this Annual Report on Form 10-K and Note 17 to our consolidated financial statements.

 

Certain Government Regulations

 

United States

 

Health Law Matters — Generally

 

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     Typically, operators of seniors housing facilities do not receive significant funding from government programs and are largely subject to state laws, as opposed to federal laws. Operators of skilled nursing facilities and hospitals do receive significant funding from government programs, and these facilities are subject to the federal and state laws that regulate the type and quality of the medical and/or nursing care provided, ancillary services (e.g., respiratory, occupational, physical and infusion therapies), qualifications of the administrative personnel and nursing staff, the adequacy of the physical plant and equipment, reimbursement and rate setting and operating policies.  In addition, as described below, operators of these facilities are subject to extensive laws and regulations pertaining to health care fraud and abuse, including, but not limited to, the Federal Anti-Kickback Statute, the Federal Stark Law, and the Federal False Claims Act, as well as comparable state law counterparts.  Hospitals, physician group practice clinics, and other health care providers that operate in our portfolio are subject to extensive federal, state, and local licensure, registration, certification, and inspection laws, regulations, and industry standards. Our tenants’ failure to comply with any of these, and other, laws 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.

 

Licensing and Certification

 

The primary regulations that affect seniors housing facilities with assisted living are state licensing and registration laws. In granting and renewing these licenses, the state regulatory agencies consider numerous factors relating to a property’s physical plant and operations, including, but not limited to, admission and discharge standards, staffing, and training. A decision to grant or renew a license is also affected by a property owner’s record with respect to patient and consumer rights, medication guidelines, and rules.  Certain of the seniors housing facilities mortgaged to or owned by us may require the resident to pay an entrance or upfront fee, a portion of which may be refundable.  These entrance fee communities are subject to significant state regulatory oversight, including, for example, oversight of each facility’s financial condition; establishment and monitoring of reserve requirements, and other financial restrictions; the right of residents to cancel their contracts within a specified period of time; lien rights in favor of residents; restrictions on change of ownership; and similar matters.  Such oversight, and the rights of residents within these entrance fee communities, may have an effect on the revenue or operations of the operators of such facilities, and, therefore, may adversely affect us.

 

     Certain health care facilities are subject to a variety of licensure and certificate of need (“CON”) laws and regulations.  Where applicable, CON laws generally require, among other requirements, that a facility demonstrate the need for (1) constructing a new facility, (2) adding beds or expanding an existing facility, (3) investing in major capital equipment or adding new services, (4) changing the ownership or control of an existing licensed facility, or (5) terminating services that have been previously approved through the CON process.  Certain state CON laws and regulations may restrict the ability of operators to add new properties or expand an existing facility’s size or services. In addition, CON laws may constrain the ability of an operator to transfer responsibility for operating a particular facility to a new operator.  If we have to replace a property operator who is excluded from participating in a federal or state health care program (as discussed below), our ability to replace the operator may be affected by a particular state’s CON laws, regulations, and applicable guidance governing changes in provider control.

 

     With respect to licensure, generally our skilled nursing facilities and acute care facilities are required to be licensed and certified for participation in Medicare, Medicaid, and other federal health care programs.  This generally requires license renewals and compliance surveys on an annual or bi-annual basis. The failure of our operators to maintain or renew any required license or regulatory approval as well as the failure of our operators to correct serious deficiencies identified in a compliance survey could require those operators to discontinue operations at a property.  In addition, if a property is found to be out of compliance with Medicare, Medicaid, or other health care program conditions of participation, the property operator may be excluded from participating in those government health care programs.  Any such occurrence may impair an operator’s ability to meet their financial obligations to us.  If we have to replace an excluded-property operator, our ability to replace the operator may be affected by federal and state laws, regulations, and applicable guidance governing changes in provider control. This may result in payment delays, an inability to find a replacement operator, a significant working capital commitment from us to a new operator or other difficulties.

 

     Reimbursement

 

     Seniors Housing Facilities (excluding skilled nursing facilities).  Approximately 71% of our overall revenues (including discontinued operations) for the year ended December 31, 2013 were attributable to seniors housing facilities. The majority of the revenues received by the operators of these facilities are from private pay sources. The remaining revenue source is primarily Medicaid under certain waiver programs. As a part of the Omnibus Budget Reconciliation Act (“OBRA”) of 1981, Congress established a waiver program enabling some states to offer Medicaid reimbursement to assisted living providers as an alternative to institutional long-term care services. The provisions of OBRA and the subsequent OBRA Acts of 1987 and 1990 permit states to seek a waiver from typical Medicaid requirements to develop cost-effective alternatives to long-term care, including Medicaid payments for assisted living and home health. As of September 30, 2013, ten of our forty seniors housing operators received Medicaid

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reimbursement pursuant to Medicaid waiver programs. For the twelve months ended September 30, 2013, approximately 2% of the revenues at our seniors housing facilities were from Medicaid reimbursement. There can be no guarantee that a state Medicaid program operating pursuant to a waiver will be able to maintain its waiver status.

 

     Rates paid by self-pay residents are set by the facilities and are determined by local market conditions and operating costs. Generally, facilities receive a higher payment per day for a private pay resident than for a Medicaid beneficiary who requires a comparable level of care. The level of Medicaid reimbursement varies from state to state.  Thus, the revenues generated by operators of our assisted living facilities may be adversely affected by payor mix, acuity level, changes in Medicaid eligibility, and reimbursement levels.  In addition, a state could lose its Medicaid waiver and no longer be permitted to utilize Medicaid dollars to reimburse for assisted living services. Changes in revenues could in turn have a material adverse effect on an operator’s ability to meet its obligations to us.

 

     Skilled Nursing Facilities and Hospitals.  Skilled nursing facilities and hospitals typically receive most of their revenues from the Medicare and Medicaid programs, with the balance representing reimbursement payments from private payors, including private insurers.  Consequently, changes in federal or state reimbursement policies may also adversely affect an operator’s ability to cover its expenses, including our rent or debt service. Skilled nursing facilities and hospitals are subject to periodic pre- and post-payment reviews, and other audits by federal and state authorities.  A review or audit of a property operator’s claims could result in recoupments, denials, or delay of payments in the future, which could have a material adverse effect on the operator’s ability to meet its financial obligations to us.  Due to the significant judgments and estimates inherent in payor settlement accounting, no assurance can be given as to the adequacy of any reserves maintained by our property operators to cover potential adjustments to reimbursements, or to cover settlements made to payors.  In fact, in December 2010, the Department of Health and Human Services (“HHS”) Office of Inspector General (“OIG”) released a report focusing on skilled nursing facilities’ billing practices for Medicare Part A payments and found that, between 2006-2008, skilled nursing facilities increasingly billed for higher paying Resource Utilization Groups (“RUGs”), the payment classification mechanism for the Medicare program, even though beneficiary characteristics remained largely unchanged.  In particular, from 2006 to 2008, OIG found that the percentage of RUGs for ultra high therapy increased from 17% to 28%, despite the fact that beneficiaries’ ages and diagnoses at admission were largely unchanged during that time period. In November 2012, the OIG released a report focused on inappropriate payments to skilled nursing facilities, and found that of the 499 claims from 2009 that were reviewed in the study, skilled nursing facilities billed 25% of the claims in error and misreported information on the Minimum Data Set (“MDS”) for 47% of the claims.   In February 2013, OIG issued the third report in this series, concluding that Medicare paid $5.1 billion to skilled nursing facilities for stays that did not meet certain quality-of-care requirements.  Recent attention on skilled nursing billing practices and payments or ongoing government pressure to reduce spending by government health care programs, could result in lower payments to skilled nursing facilities and, as a result, may impair an operator’s ability to meet its financial obligations to us.

 

     Medicare Reimbursement and Skilled Nursing Facilities.  For the twelve months ended September 30, 2013, approximately 29% of the revenues at our skilled nursing facilities (which comprised 12% of our overall revenues, including discontinued operations, for the year ended December 31, 2013) were paid by Medicare. Skilled nursing facilities are reimbursed under the Medicare Skilled Nursing Facility Prospective Payment System (“SNF PPS”). There is a risk that some skilled nursing facilities’ costs will exceed the fixed payments under the SNF PPS, and there is also a risk that payments under the SNF PPS may be set below the costs to provide certain items and services, which could result in immediate financial difficulties for skilled nursing facilities, and could cause operators to seek bankruptcy protection. Skilled nursing facilities have faced these types of difficulties since the implementation of the SNF PPS.

 

     The Centers for Medicare & Medicaid Services (“CMS”), an agency of the U.S. Department of Health and Human Services (“HHS”), made a positive payment update for skilled nursing facilities for fiscal year 2014.  On July 31, 2013, CMS issued a final rule for the SNF PPS that sets forth payment rate changes for the 2014 fiscal year.  Under the final rule, SNFs will receive a net payment increase of 1.3%, which is based on a 2.3% increase in the SNF market basket, less a 0.5% forecast error adjustment, and less a 0.5% multi-factor productivity adjustment.  CMS is implementing a forecast error adjustment because the forecasted fiscal year 2012 market basket percentage change exceeded the actual SNF market basket percentage change by 0.51%, a figure that is in excess of the 0.5% threshold adopted by the agency for determining when a forecast error adjustment will be applied.

 

     In addition, on November 21, 2011, the Joint Select Committee on Deficit Reduction, which was created by the Budget Control Act of 2011, concluded its work, and issued a statement that it was not able to make a bipartisan agreement, thus triggering the sequestration process.  On January 2, 2013, President Obama signed into law the American Taxpayer Relief Act of 2012 (“Taxpayer Relief Act”), which delayed the sequestration process until March 2013.  The sequester went into effect March 1, 2013 and, effective April 1, 2013, provider payments under Medicare Parts A and B, Medicare Advantage, and Medicare Part D were reduced up to 2% annually.  However, Medicaid spending and most of the spending on subsidies are exempt from reduction.    On January 21, 2014, President Obama signed the fiscal year 2014 omnibus appropriations bill, which lifted the sequester that went info effect on March 1,

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2013.  The Taxpayer Relief Act also increased the multiple procedure discount for Part B therapy services from 25% to 50% effective April 2013, which will lower revenues for certain operators or tenants.

 

     Section 5008 of the Deficit Reduction Act of 2005 directed the Secretary of HHS to conduct a Post Acute Care Payment Reform Demonstration (“PAC-PRD”) program, for a three year period, beginning January 1, 2008, to assess the costs and outcomes of patients discharged from hospitals in a variety of post-acute care settings, including skilled nursing facilities.  The demonstration program’s results and recommendations were reported to Congress in a January 2012 report.  The results and recommendations could lead to future changes in Medicare coverage, reimbursement, and reporting requirements for post-acute care. 

 

     The Balanced Budget Act of 1997 mandated caps on Medicare reimbursement for certain therapy services. However, Congress imposed various waivers on the implementation of those caps.  The Middle Class Tax Relief and Job Creation Act of 2012 (“Job Creation Act”) made a number of changes, including, effective on October 1, 2012, applying the therapy caps to outpatient hospitals, creating two new threshold amounts of $3,700 (one for each therapy cap amount), and requiring a manual medical review process of claims over these new thresholds.  CMS announced on March 1, 2013 that, until the agency provides further guidance, all therapy claims that are suspended for Manual Medical Review of Therapy Services above the $3,700 threshold will be subject to prepayment medical review.  The Taxpayer Relief Act extended the Job Creation Act provisions related to payment for Medicare outpatient therapy services and extended the historical therapy cap waiver and exceptions process, but only through December 31, 2013.  Pursuant to the calendar year 2014 Medicare Physician Fee Schedule, the therapy cap limitation also applies to services provided at critical access hospitals.  These therapy caps may negatively impact payments to skilled nursing facilities.

 

     If the waiver program is not reinstituted, patients will need to use private funds to pay for the cost of therapy above the caps.  If patients are unable to satisfy their out-of-pocket cost responsibility to reimburse an operator for services rendered, the operator’s ability to meet its financial obligations to us could be adversely impacted.

 

     Medicare Reimbursement and Hospitals.  For the twelve months ended September 30, 2013, approximately 57% of the revenues at our hospitals (which comprised 3% of our overall revenues, including discontinued operations, for the year ended December 31, 2013) were from Medicare reimbursements. Hospitals, generally, are reimbursed by Medicare under the Hospital Inpatient Prospective Payment System (“PPS”), the Hospital Outpatient Prospective Payment System (“OPPS”), the Long Term Care Hospital Prospective Payment System (“LTCH PPS”), or the Inpatient Rehabilitation Facility Prospective Payment System (“IRF PPS”). Acute care hospitals provide a wide range of inpatient and outpatient services, including, but not limited to, surgery, rehabilitation, therapy, and clinical laboratory services. Long-term acute care hospitals provide inpatient services for patients with medical conditions that are often complex and that require more intensive care, monitoring or emergency support than that available in most skilled nursing facilities. Inpatient rehabilitation facilities provide intensive rehabilitation services in an inpatient setting for patients requiring at least three hours of rehabilitation services a day.

 

With respect to Medicare’s PPS for regular hospitals, reimbursement for inpatient services is made on the basis of a fixed, prospective rate, based on the principal diagnosis of the patient.  Hospitals may be at risk to the extent that their costs in treating a specific case exceed the fixed payment amount. The diagnosis related group (“DRG”) reimbursement system was updated in 2008 to expand the number of DRGs from 538 to 745 in order to better distinguish more severe conditions.   The subsequent addition of new DRGs has now raised the total number of DRGs to 751.   In some cases, a hospital might be able to qualify for an outlier payment if the hospital’s losses exceed a threshold.

 

On August 2, 2013, CMS issued a final rule for the Medicare Inpatient Prospective Payment System, which sets forth acute care and long-term care hospital payment rate changes for the 2014 fiscal year, which began on October 1, 2013.  Under the final rule, the Medicare rates for inpatient services at acute care hospitals will increase by 0.7% and rates for long-term care hospitals will increase by 0.4%, accounting for adjustments, such as the multifactor productivity adjustment and the second year adjustment for a three-year phase-in of a one-time 3.75% budget neutrality adjustment to the long-term care hospital rate.  CMS finalized its proposal to let expire the one-year extension of the existing moratorium on the 25% threshold policy, a policy that imposes lower Medicare payments, in certain circumstances, on those long-term care hospitals that admit more than 25% of their patients from a single acute care hospital.  The expiration of the moratorium on the 25% threshold policy will impact cost reporting periods which begin on or after October 1, 2013.  Under the final rule, CMS also finalized a number of changes to comply with the Patient Protection and Affordable Care Act of 2010 (“PPACA”) and the Health Care and Education Reconciliation Act of 2010, which amends the PPACA (collectively, the “Health Reform Laws”).  Beginning in fiscal year 2014, hospitals that rank among the lowest-performing 25% with regard to hospital-acquired conditions will see a 1% reduction in Medicare payment rates.  CMS will also increase the maximum payment reduction under the Hospital Readmissions Reduction program, which began on October 1, 2012, to 2% of payment amounts in fiscal year 2014.  For fiscal year 2014, CMS is increasing the applicable percentage reduction, the portion of Medicare payments available to fund the Value-Based Purchasing Program’s value-based incentive payments, to 1.25%, as required by statute.  CMS clarified its regulations to reflect an existing policy that the Inpatient Prospective Payment System comparable per diem amount is capped at an amount

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comparable to what would have been a full payment under the Inpatient Prospective Payment System and that cap applies to short stay cases in long-term care hospitals with discharges occurring on or after December 29, 2012.

 

Notably, from 2007 through the end of 2012, there was a statutory moratorium imposed by the Medicare, Medicaid, and SCHIP Extension Act of 2007 (“MMSEA”) and subsequent amendments on new LTCH beds and facilities, which reduced the opportunities for expansion.  Now that this moratorium has been lifted, such facilities have the option to increase their capacity and services.  It is unclear at this time what impact, if any, this change will have on our operators and tenants and our business, generally. 

 

On July 31, 2013, CMS issued a final rule for the Medicare Inpatient Rehabilitation Facilities Prospective Payment System that sets forth payment rate changes for the 2014 fiscal year.  Under the final rule for fiscal year 2014, the Medicare rates for inpatient rehabilitation facilities will increase by 1.8%, which includes a 2.6% market basket increase factor, reduced by a 0.5% multi-factor productivity adjustment and an additional 0.3% point reduction as required by the Health Reform Laws.

 

     On December 10, 2013, CMS published the Medicare Hospital Outpatient Prospective Payment and Ambulatory Surgical Center Payment System final rule for calendar year 2014, which sets payment rates for outpatient care hospitals and ambulatory surgery centers.  CMS estimates that the rates and policies in the final rule will increase payment rates for ambulatory surgery centers by 1.2%.

 

Medicare Reimbursement and Physicians.  CMS annually adjusts the Medicare Physician Fee Schedule payment rates based on an update formula that includes application of the Sustainable Growth Rate (“SGR”).  On November 27, 2013, CMS issued the calendar year 2013 Physician Fee Schedule final rule, which called for a negative 20.1% update under the statutory SGR formula.  With the enactment of the Bipartisan Budget Act of 2013 on December 26, 2013, the reimbursement cut that was to occur was replaced with a 0.5% increase for services provided through March 31, 2014.  Congress has overridden the required reduction every year since 2003.  The final rule continues implementation of quality and cost measures that will be used in establishing a new value−based modifier that would adjust physician payments based on whether they are providing higher quality and more efficient care. The Health Reform Laws, as defined below, require CMS to begin making payment adjustments to certain physicians and physician groups on January 1, 2015, and to apply the modifier to all physicians by January 1, 2017. Calendar year 2013 is the initial performance year for purposes of adjusting payments in calendar year 2015.

 

Medicaid Reimbursement.  Medicaid is a major payor source for residents in our skilled nursing facilities and hospitals. For the twelve months ended September 30, 2013, approximately 48% of the revenues of our skilled nursing facilities and 3% of the revenues of our hospitals were attributable to Medicaid reimbursement payments. The federal and state governments share responsibility for financing Medicaid. The federal matching rate, known as the Federal Medical Assistance Percentage (“FMAP”), varies by state based on relative per capita income, but is at least 50% in all states. On average, Medicaid is the largest component of total state spending, representing approximately 23.7% of total state expenditures in state fiscal year 2011. The percentage of Medicaid dollars used for long-term care varies from state to state, due in part to different ratios of elderly population and eligibility requirements. Within certain federal guidelines, states have a fairly wide range of discretion to determine eligibility and reimbursement methodology.  Many states reimburse long-term care facilities using fixed daily rates, which are applied prospectively based on patient acuity and the historical costs incurred in providing patient care. Reasonable costs typically include allowances for staffing, administrative and general expenses, property, and equipment (e.g., real estate taxes, depreciation and fair rental).

 

In most states, Medicaid does not fully reimburse the cost of providing skilled nursing services. Certain states are attempting to slow the rate of growth in Medicaid expenditures by freezing rates or restricting eligibility and benefits. Our skilled nursing portfolio’s average Medicaid rate will likely vary throughout the year as states continue to make interim changes to their budgets and Medicaid funding. In addition, Medicaid reimbursement rates may decline if revenues in a particular state are not sufficient to fund budgeted expenditures.  President Obama’s proposed fiscal year budget for 2013 included several proposals that would have lowered federal spending for Medicaid, potentially impacting provider Medicaid reimbursement rates.  The proposals included new limits on state provider taxes, phasing down the existing Medicaid provider tax, and blending the Federal matching rate for state Medicaid and the Children’s Health Insurance Program.  Although the President’s proposed fiscal year budget for 2014 did not include these proposals, it nevertheless called for an overall reduction in federal health care spending by $401 billion over ten years, with savings stemming from several cost-saving proposals including reduced Medicare payments for long-term care hospitals, SNFs, and other post-acute care providers.

 

The Medicare Part D drug benefit became effective January 1, 2006. Since that date, low-income Medicare beneficiaries (eligible for both Medicare and full Medicaid benefits), including those nursing home residents who are dually eligible for both programs, may enroll and receive outpatient prescription drugs under Medicare, not Medicaid. Medicare Part D has resulted in increased administrative responsibilities for nursing home operators because enrollment in Medicare Part D is voluntary and residents must

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choose between multiple prescription drug plans.  Operators may also experience increased expenses to the extent that a particular drug prescribed to a patient is not listed on the Medicare Part D drug plan formulary for the plan in which the patient is enrolled.

 

The reimbursement methodologies applied to health care facilities continue to evolve.  Federal and state authorities have considered and may seek to implement new or modified reimbursement methodologies that may negatively impact health care property operations.  The impact of any such changes, if implemented, may result in a material adverse effect on our skilled nursing and hospital property operations. No assurance can be given that current revenue sources or levels will be maintained.  Accordingly, there can be no assurance that payments under a government health care program are currently, or will be in the future, sufficient to fully reimburse the property operators for their operating and capital expenses.  As a result, an operator’s ability to meet its financial obligations to us could be adversely impacted.

 

Finally, the Health Reform Laws (further discussed below) may have a significant impact on Medicare, Medicaid, other federal health care programs, and private insurers, which impact the reimbursement amounts received by skilled nursing facilities and other health care providers. The Health Reform Laws could have a substantial and material adverse effect on all parties directly or indirectly involved in the health care system.

 

Other Related Laws

 

Skilled nursing facilities and hospitals (and seniors housing facilities that receive Medicaid payments) are subject to federal, state, and local laws, regulations, and applicable guidance that govern the operations and financial and other arrangements that may be entered into by health care providers. Certain of these laws prohibit direct or indirect payments of any kind for the purpose of inducing or encouraging the referral of patients for medical products or services reimbursable by government health care programs. Other laws require providers to furnish only medically necessary services and submit to the government valid and accurate statements for each service. Still, other laws require providers to comply with a variety of safety, health and other requirements relating to the condition of the licensed property and the quality of care provided.  Sanctions for violations of these laws, regulations, and other applicable guidance may include, but are not limited to, criminal and/or civil penalties and fines, loss of licensure, immediate termination of government payments, and exclusion from any government health care program. In certain circumstances, violation of these rules (such as those prohibiting abusive and fraudulent behavior) with respect to one property may subject other facilities under common control or ownership to sanctions, including exclusion from participation in the Medicare and Medicaid programs, as well as other government health care programs.  In the ordinary course of its business, a property operator is regularly subjected to inquiries, investigations, and audits by the federal and state agencies that oversee these laws and regulations.

 

All health care providers, including, but not limited to skilled nursing facilities and hospitals (and seniors housing facilities that receive Medicaid payments) are also subject to the Federal Anti-Kickback Statute, which generally prohibits persons from offering, providing, soliciting, or receiving remuneration to induce either the referral of an individual or the furnishing of a good or service for which payment may be made under a federal health care program, such as Medicare or Medicaid. Skilled nursing facilities and hospitals are also subject to the Federal Ethics in Patient Referral Act of 1989, commonly referred to as the Stark Law. The Stark Law generally prohibits the submission of claims to Medicare for payment if the claim results from a physician referral for certain designated services and the physician has a financial relationship with the health service provider that does not qualify under one of the exceptions for a financial relationship under the Stark Law. Similar prohibitions on physician self-referrals and submission of claims apply to state Medicaid programs. Further, health care providers, including, but not limited to, skilled nursing facilities and hospitals (and seniors housing facilities that receive Medicaid payments), are subject to substantial financial penalties under the Civil Monetary Penalties Act and the Federal False Claims Act and, in particular, actions under the Federal False Claims Act’s “whistleblower” provisions. Private enforcement of health care fraud has increased due in large part to amendments to the Federal False Claims Act that encourage private individuals to sue on behalf of the government. These whistleblower suits brought by private individuals, known as qui tam actions, may be filed by almost anyone, including present and former patients, nurses and other employees.  Such whistleblower actions have been brought against nursing facilities on the basis of the alleged failure of the nursing facility to meet applicable regulations relating to its operations.  Significantly, if a claim is successfully adjudicated, the Federal False Claims Act provides for treble damages up to $11,000 per claim.  

 

Prosecutions, investigations, or whistleblower actions could have a material adverse effect on a property operator’s liquidity, financial condition, and operations, which could adversely affect the ability of the operator to meet its financial obligations to us.  Finally, various state false claim act and anti-kickback laws may also apply to each property operator. Violation of any of the foregoing statutes can result in criminal and/or civil penalties that could have a material adverse effect on the ability of an operator to meet its financial obligations to us.

 

Other legislative developments, including the Health Insurance Portability and Accountability Act of 1996 (“HIPAA”), have greatly expanded the definition of health care fraud and related offenses and broadened its scope to include private health care plans in

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addition to government payors. Congress also has greatly increased funding for the Department of Justice, Federal Bureau of Investigation and the Office of the Inspector General of the Department of Health and Human Services to audit, investigate and prosecute suspected health care fraud.  Moreover, a significant portion of the billions in health care fraud recoveries over the past several years has also been returned to government agencies to further fund their fraud investigation and prosecution efforts.

 

Additionally, other HIPAA provisions and regulations provide for communication of health information through standard electronic transaction formats and for the privacy and security of health information. In order to comply with the regulations, health care providers often must undertake significant operational and technical implementation efforts.  Operators also may face significant financial exposure if they fail to maintain the privacy and security of medical records and other personal health information about individuals. The Health Information Technology for Economic and Clinical Health (“HITECH”) Act, passed in February 2009, strengthened the HHS Secretary’s authority to impose civil money penalties for HIPAA violations occurring after February 18, 2009. HITECH directs the HHS Secretary to provide for periodic audits to ensure covered entities and their business associates (as that term is defined under HIPAA) comply with the applicable HITECH requirements, increasing the likelihood that a HIPAA violation will result in an enforcement action. CMS issued an interim Final Rule which conformed HIPAA enforcement regulations to the HITECH Act, increasing the maximum penalty for multiple violations of a single requirement or prohibition to $1.5 million.  Higher penalties may accrue for violations of multiple requirements or prohibitions.  Additionally, on January 17, 2013, CMS released a final rule, which expands the applicability of HIPAA and HITECH and strengthens the government’s ability to enforce these laws.  The final rule broadens the definition of “business associate” and provides for civil money penalty liability against covered entities and business associates for the acts of their agents regardless of whether a business associate agreement is in place. Additionally, the final rule adopts certain changes to the HIPAA enforcement regulations to incorporate the increased and tiered civil monetary penalty structure provided by HITECH, and makes business associates of covered entities directly liable under HIPAA for compliance with certain of the HIPAA privacy standards and HIPAA security standards.  HIPAA violations are also potentially subject to criminal penalties.

 

In November 2002, CMS began an ongoing national Nursing Home Quality Initiative (“NHQI”). Under this initiative, historical survey information, the NHQI Pilot Evaluation Report and the NHQI Overview is made available to the public on-line. The NHQI website provides consumer and provider information regarding the quality of care in nursing homes. The data allows consumers, providers, states, and researchers to compare quality information that shows how well nursing homes are caring for their residents’ physical and clinical needs. The posted nursing home quality measures come from resident assessment data that nursing homes routinely collect on the residents at specified intervals during their stay. If the operators of nursing facilities are unable to achieve quality of care ratings that are comparable or superior to those of their competitors, they may lose market share to other facilities, reducing their revenues and adversely impacting their ability to make rental payments.

 

Finally, government investigations and enforcement actions brought against the health care industry have increased dramatically over the past several years and are expected to continue. Some of these enforcement actions represent novel legal theories and expansions in the application of the Federal False Claims Act. The costs for an operator of a health care property associated with both defending such enforcement actions and the undertakings in settling these actions can be substantial and could have a material adverse effect on the ability of an operator to meet its obligations to us.

 

United Kingdom

 

Registration

 

In England, care home services are principally regulated by the Health and Social Care Act 2008 (the “Act”) and associated Regulations. The Act requires all persons carrying out “Regulated Activities” in England, and the managers of such persons, to be registered. Regulated Activities are defined in the Health and Social Care Act 2008 (Regulated Activities) Regulations 2010 and include (among other activities):

·         The provision of personal care for persons who, by reason of old age, illness or disability are unable to provide it for themselves, and which is provided in a place where those persons are living at the time the care is provided; and

·         The provision of residential accommodation, together with nursing or personal care. 

 

Any person who carries on a regulated activity without being registered in respect of that activity is guilty of an offense under the Act. A person guilty of an offense is liable on summary conviction, to a fine of up to £50,000, or to imprisonment for a term not exceeding 12 months, or both, and on conviction on indictment, to a fine, or to imprisonment for a term not exceeding 12 months, or to both.

 

Under the Care Quality Commission (Registration) Regulations 2009, service providers and managers of Regulated Activities must provide documentation demonstrating their ability to provide the relevant service(s); in particular, registrants must be able to

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demonstrate that they (or a nominated individual, if the registered person is a company) possess good character, are physically and mentally fit to carry on the regulated activity and have the necessary qualifications, skills and experience to do so.

 

Service Standards and Notification Obligations

 

The Health and Social Care Act 2008 (Regulated Activities) Regulations 2010 list the standards that must be met when providing care services. The service providers’ legal obligations include:

·         Ensuring service users are protected against receiving care or treatment that is inappropriate or unsafe;

·         Assessing and monitoring the quality of service provision;

·         Safeguarding service users from abuse;

·         Ensuring that service users and others are protected against risks of a healthcare associated infection;

·         Protecting service users against risks in relation to the unsafe use of medicines;

·         Meeting the nutritional needs of service users;

·         Ensuring that the premises are safe and suitable;

·         Ensuring that any equipment used is safe, suitable and readily available when required;

·         Respecting and involving service users;

·         Obtaining and acting in accordance with the consent of service users to care and treatment;

·         Having in place an effective complaints system;

·         Maintaining accurate records;

·         Operating effective recruitment procedures; and

·         Having sufficient numbers of suitably qualified, skilled and experienced employees and supporting workers through training, professional development, supervision, appraisals and qualifications.

 

Failure to comply with certain provisions of the above Regulations is an offense, with a person guilty of the offense liable on summary conviction to a fine of up to £50,000.  Monetary penalty notices may also be issued.

 

Under the Care Quality Commission (Registration) Regulations 2009 certain matters must be notified to the Care Quality Commission (the “CQC”), the government regulatory body overseeing the provision of nursing and other care services in England. Events that must be notified include (among others):

 

·         Where the service provider or registered manager proposes to be absent for a continuous period of 28 days or more;

·         A change of the registered person or where the registered person is a company changes in the name or address of the registered person, a change of director, secretary or other similar officer, or a change of the nominated individual;

·         The death of a service user;  

·         Incidents resulting in an injury (provided certain conditions are met); 

·         Abuse and allegations of abuse in relation to a service user; and

·         Any event which prevents, or appears to the service provider to be likely to threaten to prevent, the service provider’s ability to continue to carry on the regulated activity safely, or in accordance with the registration requirements.   

 

Failure to comply with the above notification obligations is an offense and a person guilty of an offense is liable on summary conviction to a fine of up to £2,500.

 

Regulatory Oversight and Inspections

 

The Act also sets out the powers and responsibilities of the CQC. Among other powers, the CQC administers the compulsory registration system and issues guidance to care service providers on how to comply with applicable standards set out in legislation. 

 

The CQC is also empowered to carry out inspections of care home premises to verify compliance with the standards set out in legislation. The CQC’s current policy is to carry out routine unannounced inspections at care homes at least once a year. Reports of all inspections in England are published, as are details of enforcement actions taken by the CQC, which can include issuing warning notices, restricting the services that the provider can offer, stopping admissions into the care service, issuing fixed penalty notices, suspending or cancelling the service registration and prosecution.  

 

Financial Assistance for Service Users

 

Financial assistance for service users towards care home fees is available from local authorities and is means-tested. The National Health Service may also, in certain circumstances, contribute towards the costs of nursing care.

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Canada

 

     Retirement homes and long-term care facilities are subject to regulation, and long-term care facilities receive funding, under provincial law.  There is no federal regulation in this area.  Set out below are summaries of the principal regulatory requirements in the provinces where we have a material number of facilities.

 

     Licensing and Regulation

 

     Ontario

 

     Long-term care facilities, or nursing homes, receive government funding, are licensed under the Long-Term Care Homes Act, 2007 and are governed by the Ministry of Health and Long-Term Care.  The LTC Homes Act places a strong emphasis on the protection of residents. 

 

     Retirement homes in Ontario are regulated under the Retirement Homes Act, 2010 (the “Act”).  Retirement homes do not receive any government funding; residents pay for tenancy and services received at retirement homes.  Residents may access publicly-funded external care services at the home from funded external suppliers. 

 

     A license is required to operate a retirement home.  Licenses must be applied for and are non-transferable.  Applications for licenses are directed to the Registrar of the Retirement Homes Regulatory Authority (RHRA).  All of the homes in which we have an interest in Ontario are licensed as retirement homes. One of the homes also has some licensed long-term care beds.

 

     Licenses can have conditions imposed upon them or can be suspended in circumstances where the operator is found to be in contravention of the Act.  There is no set renewal period for licenses, and they terminate according to the terms set out in the license itself, or if one of the enumerated triggering mechanisms occurs (for example, if the operator ceases to have controlling interest in the license).

 

     The licensee of a retirement home must ensure that the care provided by the home meets prescribed standards.  The Act and its regulations include a number of detailed provisions with respect to care standards, safety plans in the event of emergency or infectious disease, temperature control, cleanliness, pest control, maintenance, food preparations, risk of resident falls and behavioral management, among other things.  A care plan must be developed for each resident of the home (with their consent). The Act establishes a Residents’ Bill of Rights, which provides residents with a list of rights, such as the right to participate fully in decision-making with respect to care, the right not to be restrained and the right to know what care services are provided and their cost.  The Residents’ Bill of Rights can be enforced as a contract.

 

     The Act requires a report to the RHRA when any person has reasonable grounds to suspect abuse of a resident by anyone, or neglect of a resident by staff.  Following a report to the RHRA, there is a mandatory inspection carried out by the RHRA, which results in a report that is posted on the RHRA’s public website. The most recent report must also be posted in the subject home, and be readily available for review if requested thereafter. 

  

     The Registrar of the RHRA has the power to inspect a retirement home at any time without warning or issue a warrant to ensure compliance with the Act.  Compliance inspections occur at least every three years. The Registrar has the power to make a variety of orders including, for example, the imposition of a fine or an order revoking the operator’s license.  There is an appeal process in place with respect to orders made by the Registrar.  The Act also enumerates offenses, such as operating without a license, and provides for penalties for offenses.

 

     British Columbia

 

     The Community Care and Assisted Living Act, the Residential Care Regulation, and the Community Care and Assisted Living Regulation (together, the “B.C. Act”) regulate “community care facilities” (long-term care facilities) in substantially the same manner as retirement homes are regulated under the Ontario Act. The B.C. Act defines such a facility as premises used for the purpose of supervising vulnerable persons who require three or more prescribed services.

 

     The B.C. Act also creates a separate regime for regulating “assisted living residences,” which are facilities providing at least one but not more than two prescribed care services. Assisted living residences are designed for those who can live independently, but who require assistance with certain activities. Unlike community care facilities, assisted living residences must be registered with the registrar of assisted living residences, but do not require a license. Nevertheless, assisted living residences must be operated in a

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manner that does not jeopardize the health or safety of its residents. If the registrar has reason to believe a residence is not being operated in accordance with this standard, the registrar may inspect the assisted living residence and may suspend or cancel a registration.  Most of the residences in which we have an interest in B.C. are assisted living residences, with one being an independent living residence.

 

     Independent living residences offer housing and hospitality services for retired adults who are functionally independent and able to direct their own care.   Services available for residents can include, for example, meals, housekeeping, monitoring and emergency support, social and recreational opportunities, and transportation. 

 

     Québec

 

     In Québec, retirement homes are regulated by the Act respecting Health Services and Social Services (the “Act”) and the Regulation respecting the conditions for obtaining a certificate of compliance and the operating standards for a private seniors' residence (the “Regulation”), which refer to “private seniors’ residences.” Private seniors’ residences in Québec are required to obtain a certificate of compliance. The Regulation is currently in the process of being amended. 

 

     A certificate of compliance is issued for a period of three years, is renewable and can only be validly transferred to another person with the written permission of the regional licensing agency. An agency may revoke a temporary certificate, or revoke or refuse to issue or renew a certificate of compliance if, among other things, the operator fails to comply with the Act and the Regulation, although the decision of the applicable agency can be contested before the Administrative Tribunal of Québec. The agency may also order the residence to take corrective measures, further to an inspection, complaint and/or investigation. The agency is authorized to inspect a residence, at any reasonable time of day, in order to ascertain whether it complies with the Act and the Regulation.

 

     Private seniors’ residences may belong to either or both of the following two categories: those offering services to independent elderly persons and those offering services to semi-independent elderly persons. The operator of a residence must, for each category, comply with the applicable criteria and standards, with some exceptions provided for residences with fewer than six or ten rooms or apartments. The Act and the Regulation set out a number of detailed provisions with respect to residents’ health and safety (including mandatory call-for-help systems, safety plans in the event of fire or infectious disease, health assessments, permissible control measures, as well as administration and distribution of medication), meal services and recreation, content of residents’ files, disclosure of information to residents, and staffing requirements, among other things. 

 

     Other Related Laws

 

     Privacy

 

     We are generally subject to privacy legislation in Canada, including, in certain provinces, privacy laws specifically related to personal health information.  Although the obligations of custodians of personal health information in the various provinces differ to some extent, they all include the obligation to protect the information. Privacy laws in Canada are consent-based and require the implementation of a privacy program involving policies, procedures and the designation of an individual or team with primary responsibility for a custodian’s privacy law compliance.  Mandatory breach notification is a requirement under some laws.  Some laws require notification where personal health information/personal information is processed or stored outside of Canada.  One provincial law (in Quebec) provides for fines where an organization fails to perform required due diligence before outsourcing activities involving personal information to a service provider outside of the province.

 

     Some privacy regulators in Canada have order-making authority and others are ombudspersons who make recommendations that may only be enforced by a court. Under a number of privacy laws, a finding by a regulator that a custodian has breached the law creates a right to apply to a court for money damages.  In some provinces there is a statutory civil cause of action for breach of privacy. In other provinces, the courts have recognized a limited common law cause of action for breach of privacy.

 

     The powers of privacy regulators and penalties for violations of privacy law vary according to the applicable law or are left to the courts.  Generally, penalties are monetary in nature.  Private rights of action may also be available and regulators have the authority to make public the identity of a health information custodian that has been found to have committed a breach, so that there is a reputational risk associated with privacy law violations even where there are no monetary damages incurred. The notification of patients (mandatory under some privacy laws) and other activities required to manage a privacy breach can give rise to significant costs.

 

     Other Legislation

 

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     Retirement homes may be subject to residential tenancy laws, such that there can be restrictions on rent increases and termination of tenancies, for instance.  Other provincial legislation applicable to occupational health and safety, public health, and the provision of community health care and funded long-term care/skilled nursing may also apply to retirement homes.  In addition, municipal laws with respect to matters such as fire safety, food services and zoning would also apply.

  

 

Taxation

 

Federal Income Tax Considerations

 

The following summary of the taxation of the Company and the material federal tax consequences to the holders of our debt and equity securities is for general information only and is not tax advice. This summary does not address all aspects of taxation that may be relevant to certain types of holders of stock or securities (including, but not limited to, insurance companies, tax-exempt entities, financial institutions or broker-dealers, persons holding shares of common stock as part of a hedging, integrated conversion, or constructive sale transaction or a straddle, traders in securities that use a mark-to-market method of accounting for their securities, investors in pass-through entities and foreign corporations and persons who are not citizens or residents of the United States).

 

This summary does not discuss all of the aspects of U.S. federal income taxation that may be relevant to you in light of your particular investment or other circumstances. In addition, this summary does not discuss any state or local income taxation or foreign income taxation or other tax consequences. This summary is based on current U.S. federal income tax law. Subsequent developments in U.S. federal income tax law, including changes in law or differing interpretations, which may be applied retroactively, could have a material effect on the U.S. federal income tax consequences of purchasing, owning and disposing of our securities as set forth in this summary. Before you purchase our securities, you should consult your own tax advisor regarding the particular U.S. federal, state, local, foreign and other tax consequences of acquiring, owning and selling our securities.

 

General

 

We elected to be taxed as a real estate investment trust (a “REIT”) commencing with our first taxable year. We intend to continue to operate in such a manner as to qualify as a REIT, but there is no guarantee that we will qualify or remain qualified as a REIT for subsequent years. Qualification and taxation as a REIT depends upon our ability to meet a variety of qualification tests imposed under federal income tax law with respect to income, assets, distribution level and diversity of share ownership as discussed below under “— Qualification as a REIT.” There can be no assurance that we will be owned and organized and will operate in a manner so as to qualify or remain qualified.

 

In any year in which we qualify as a REIT, in general, we will not be subject to federal income tax on that portion of our REIT taxable income or capital gain that is distributed to stockholders. We may, however, be subject to tax at normal corporate rates on any taxable income or capital gain not distributed. If we elect to retain and pay income tax on our net long-term capital gains, stockholders are required to include their proportionate share of our undistributed long-term capital gains in income, but they will receive a refundable credit for their share of any taxes paid by us on such gain.

 

Despite the REIT election, we may be subject to federal income and excise tax as follows:

 

•     To the extent that we do not distribute all of our net capital gain or distribute at least 90%, but less than 100%, of our “REIT taxable income,” as adjusted, we will be subject to tax on the undistributed amount at regular corporate tax rates;

 

•     We may be subject to the “alternative minimum tax” (the “AMT”) on certain tax preference items to the extent that the AMT exceeds our regular tax;

 

•     If we have net income from the sale or other disposition of “foreclosure property” that is held primarily for sale to customers in the ordinary course of business or other non-qualifying income from foreclosure property, such income will be taxed at the highest corporate rate;

 

•     Any net income from prohibited transactions (which are, in general, sales or other dispositions of property held primarily for sale to customers in the ordinary course of business, other than dispositions of foreclosure property and dispositions of property due to an involuntary conversion) will be subject to a 100% tax;

 

•     If we fail to satisfy either the 75% or 95% gross income tests (as discussed below), but nonetheless maintain our qualification as a REIT because certain other requirements are met, we will be subject to a 100% tax on an amount equal to (1) the gross

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income attributable to the greater of (i) 75% of our gross income over the amount of qualifying gross income for purposes of the 75% gross income test (discussed below) or (ii) 95% of our gross income over the amount of qualifying gross income for purposes of the 95% gross income test (discussed below) multiplied by (2) a fraction intended to reflect our profitability;

 

•     If we fail to distribute during each year at least the sum of (1) 85% of our REIT ordinary income for the year, (2) 95% of our REIT capital gain net income for such year (other than capital gain that we elect to retain and pay tax on) and (3) any undistributed taxable income from preceding periods, we will be subject to a 4% excise tax on the excess of such required distribution over amounts actually distributed;

 

•     We will be subject to a 100% tax on the amount of any rents from real property, deductions or excess interest paid to us by any of our “taxable REIT subsidiaries” that would be reduced through reallocation under certain federal income tax principles in order to more clearly reflect income of the taxable REIT subsidiary. See “— Qualification as a REIT — Investments in Taxable REIT Subsidiaries;” and

 

•     We may be subject to the corporate “alternative minimum tax” on any items of tax preference, including any deductions of net operating losses.

 

If we acquire any assets from a corporation, which is or has been a “C” corporation, in a carryover basis transaction, we could be liable for specified liabilities that are inherited from the “C” corporation. A “C” corporation is generally defined as a corporation that is required to pay full corporate level federal income tax. If we recognize gain on the disposition of the assets during the ten-year period beginning on the date on which the assets were acquired by us, then, to the extent of the assets’ “built-in gain” (i.e., the excess of the fair market value of the asset over the adjusted tax basis in the asset, in each case determined as of the beginning of the ten-year period), we will be subject to tax on the gain at the highest regular corporate rate applicable. The results described in this paragraph with respect to the recognition of built-in gain assume that the built-in gain assets, at the time the built-in gain assets were subject to a conversion transaction (either where a “C” corporation elected REIT status or a REIT acquired the assets from a “C” corporation), were not treated as sold to an unrelated party and gain recognized.  For those properties that are subject to the built-in-gains tax, if triggered by a sale within the ten-year period beginning on the date on which the properties were acquired by us, then the potential amount of built-in-gains tax will be an additional factor when considering a possible sale of the properties.  See Note 18 to our consolidated financial statements for additional information regarding the built-in gains tax.

 

Qualification as a REIT

 

A REIT is defined as a corporation, trust or association:

 

(1)     which is managed by one or more trustees or directors;

 

(2)     the beneficial ownership of which is evidenced by transferable shares or by transferable certificates of beneficial interest;

 

(3)     which would be taxable as a domestic corporation but for the federal income tax law relating to REITs;

 

(4)     which is neither a financial institution nor an insurance company;

 

(5)     the beneficial ownership of which is held by 100 or more persons in each taxable year of the REIT except for its first taxable year;

 

(6)     not more than 50% in value of the outstanding stock of which is owned during the last half of each taxable year, excluding its first taxable year, directly or indirectly, by or for five or fewer individuals (which includes certain entities) (the “Five or Fewer Requirement”); and

 

(7)     which meets certain income and asset tests described below.

 

Conditions (1) to (4), inclusive, must be met during the entire taxable year and condition (5) must be met during at least 335 days of a taxable year of 12 months or during a proportionate part of a taxable year of less than 12 months. For purposes of conditions (5) and (6), pension funds and certain other tax-exempt entities are treated as individuals, subject to a “look-through” exception in the case of condition (6).

 

Based on publicly available information, we believe we have satisfied the share ownership requirements set forth in (5) and (6) above. In addition, Article VI of our by-laws provides for restrictions regarding ownership and transfer of shares. These

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restrictions are intended to assist us in continuing to satisfy the share ownership requirements described in (5) and (6) above. These restrictions, however, may not ensure that we will, in all cases, be able to satisfy the share ownership requirements described in (5) and (6) above.

 

We have complied with, and will continue to comply with, regulatory rules to send annual letters to certain of our stockholders requesting information regarding the actual ownership of our stock. If, despite sending the annual letters, we do not know, or after exercising reasonable diligence would not have known, whether we failed to meet the Five or Fewer Requirement, we will be treated as having met the Five or Fewer Requirement. If we fail to comply with these regulatory rules, we will be subject to a monetary penalty. If our failure to comply was due to intentional disregard of the requirement, the penalty would be increased. However, if our failure to comply were due to reasonable cause and not willful neglect, no penalty would be imposed.

 

We may own a number of properties through wholly owned subsidiaries. A corporation will qualify as a “qualified REIT subsidiary” if 100% of its stock is owned by a REIT, and the REIT does not elect to treat the subsidiary as a taxable REIT subsidiary. A “qualified REIT subsidiary” will not be treated as a separate corporation, and all assets, liabilities and items of income, deductions and credits of a “qualified REIT subsidiary” will be treated as assets, liabilities and items (as the case may be) of the REIT. A “qualified REIT subsidiary” is not subject to federal income tax, and our ownership of the voting stock of a qualified REIT subsidiary will not violate the restrictions against ownership of securities of any one issuer which constitute more than 10% of the value or total voting power of such issuer or more than 5% of the value of our total assets, as described below under “— Asset Tests.”

 

If we invest in a partnership, a limited liability company or a trust taxed as a partnership or as a disregarded entity, we will be deemed to own a proportionate share of the partnership’s, limited liability company’s or trust’s assets. Likewise, we will be treated as receiving our share of the income and loss of the partnership, limited liability company or trust, and the gross income will retain the same character in our hands as it has in the hands of the partnership, limited liability company or trust. These “look-through” rules apply for purposes of the income tests and assets tests described below.

 

Income Tests.  There are two separate percentage tests relating to our sources of gross income that we must satisfy for each taxable year.

 

•     At least 75% of our gross income (excluding gross income from certain sales of property held primarily for sale) must be directly or indirectly derived each taxable year from “rents from real property,” other income from investments relating to real property or mortgages on real property or certain income from qualified temporary investments.

 

•     At least 95% of our gross income (excluding gross income from certain sales of property held primarily for sale) must be directly or indirectly derived each taxable year from any of the sources qualifying for the 75% gross income test and from dividends (including dividends from taxable REIT subsidiaries) and interest.

 

As to transactions entered into in taxable years beginning after October 22, 2004 and on or prior to July 30, 2008, any of our income from a “clearly identified” hedging transaction that is entered into by us in the normal course of business, directly or indirectly, to manage the risk of interest rate movements, price changes or currency fluctuations with respect to borrowings or obligations incurred or to be incurred by us, or such other risks that are prescribed by the Internal Revenue Service, is excluded from the 95% gross income test.

 

For transactions entered into after July 30, 2008, any of our income from a “clearly identified” hedging transaction that is entered into by us in the normal course of business, directly or indirectly, to manage the risk of interest rate movements, price changes or currency fluctuations with respect to borrowings or obligations incurred or to be incurred by us is excluded from the 95% and 75% gross income tests.

 

For transactions entered into after July 30, 2008, any of our income from a “clearly identified” hedging transaction entered into by us primarily to manage risk of currency fluctuations with respect to any item of income or gain that is included in gross income in the 95% and 75% gross income tests is excluded from the 95% and 75% gross income tests.

 

In general, a hedging transaction is “clearly identified” if (1) the transaction is identified as a hedging transaction before the end of the day on which it is entered into and (2) the items or risks being hedged are identified “substantially contemporaneously” with the hedging transaction. An identification is not substantially contemporaneous if it is made more than 35 days after entering into the hedging transaction.

 

As to gains and items of income recognized after July 30, 2008, “passive foreign exchange gain” for any taxable year will not constitute gross income for purposes of the 95% gross income test and “real estate foreign exchange gain” for any taxable year will

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not constitute gross income for purposes of the 75% gross income test. Real estate foreign exchange gain is foreign currency gain (as defined in Internal Revenue Code Section 988(b)(1)) which is attributable to: (i) any qualifying item of income or gain for purposes of the 75% gross income test; (ii) the acquisition or ownership of obligations secured by mortgages on real property or interests in real property; or (iii) becoming or being the obligor under obligations secured by mortgages on real property or on interests in real property. Real estate foreign exchange gain also includes Internal Revenue Code Section 987 gain attributable to a qualified business unit (a “QBU”) of a REIT if the QBU itself meets the 75% gross income test for the taxable year and the 75% asset test at the close of each quarter that the REIT has directly or indirectly held the QBU. Real estate foreign exchange gain also includes any other foreign currency gain as determined by the Secretary of the Treasury. Passive foreign exchange gain includes all real estate foreign exchange gain and foreign currency gain which is attributable to: (i) any qualifying item of income or gain for purposes of the 95% gross income test; (ii) the acquisition or ownership of obligations; (iii) becoming or being the obligor under obligations; and (iv) any other foreign currency gain as determined by the Secretary of the Treasury.

 

Generally, other than income from “clearly identified” hedging transactions entered into by us in the normal course of business, any foreign currency gain derived by us from dealing, or engaging in substantial and regular trading, in securities will constitute gross income which does not qualify under the 95% or 75% gross income tests.

 

Rents received by us will qualify as “rents from real property” for purposes of satisfying the gross income tests for a REIT only if several conditions are met:

 

•     The amount of rent must not be based in whole or in part on the income or profits of any person, although rents generally will not be excluded merely because they are based on a fixed percentage or percentages of receipts or sales.

 

•     Rents received from a tenant will not qualify as rents from real property if the REIT, or an owner of 10% or more of the REIT, also directly or constructively owns 10% or more of the tenant, unless the tenant is our taxable REIT subsidiary and certain other requirements are met with respect to the real property being rented.

 

•     If rent attributable to personal property leased in connection with a lease of real property is greater than 15% of the total rent received under the lease, then the portion of rent attributable to such personal property will not qualify as “rents from real property.”

 

•     For rents to qualify as rents from real property, we generally must not furnish or render services to tenants, other than through a taxable REIT subsidiary or an “independent contractor” from whom we derive no income, except that we may directly provide services that are “usually or customarily rendered” in the geographic area in which the property is located in connection with the rental of real property for occupancy only, or are not otherwise considered “rendered to the occupant for his convenience.”

 

•     For taxable years beginning after July 30, 2008, the REIT may lease qualified health care properties” on an arm’s-length basis to a taxable REIT subsidiary if the property is operated on behalf of such subsidiary by a person who qualifies as an “independent contractor” and who is, or is related to a person who is, actively engaged in the trade or business of operating health care facilities for any person unrelated to us or our taxable REIT subsidiary, an “eligible independent contractor. Generally, the rent that the REIT receives from the taxable REIT subsidiary will be treated as “rents from real property.”  A “qualified health care property” includes any real property and any personal property that is, or is necessary or incidental to the use of, a hospital, nursing facility, assisted living facility, congregate care facility, qualified continuing care facility, or other licensed facility that extends medical or nursing or ancillary services to patients and is operated by a provider of such services that is eligible for participation in the Medicare program with respect to such facility.

 

A REIT is permitted to render a de minimis amount of impermissible services to tenants and still treat amounts received with respect to that property as rent from real property. The amount received or accrued by the REIT during the taxable year for the impermissible services with respect to a property may not exceed 1% of all amounts received or accrued by the REIT directly or indirectly from the property. The amount received for any service or management operation for this purpose shall be deemed to be not less than 150% of the direct cost of the REIT in furnishing or rendering the service or providing the management or operation. Furthermore, impermissible services may be furnished to tenants by a taxable REIT subsidiary subject to certain conditions, and we may still treat rents received with respect to the property as rent from real property.

 

The term “interest” generally does not include any amount if the determination of the amount depends in whole or in part on the income or profits of any person, although an amount generally will not be excluded from the term “interest” solely by reason of being based on a fixed percentage of receipts or sales.

 

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If we fail to satisfy one or both of the 75% or 95% gross income tests for any taxable year, we may nevertheless qualify as a REIT for such year if we are eligible for relief.  These relief provisions generally will be available if (1) following our identification of the failure, we file a schedule for such taxable year describing each item of our gross income, and (2) the failure to meet such tests was due to reasonable cause and not due to willful neglect.

 

It is not now possible to determine the circumstances under which we may be entitled to the benefit of these relief provisions. If these relief provisions apply, a 100% tax is imposed on an amount equal to (a) the gross income attributable to (1) 75% of our gross income over the amount of qualifying gross income for purposes of the 75% income test and (2) 95% of our gross income over the amount of qualifying gross income for purposes of the 95% income test, multiplied by (b) a fraction intended to reflect our profitability.

 

The Secretary of the Treasury is given broad authority to determine whether particular items of income or gain qualify or not under the 75% and 95% gross income tests, or are to be excluded from the measure of gross income for such purposes.

 

Asset Tests.  Within 30 days after the close of each quarter of our taxable year, we must also satisfy several tests relating to the nature and diversification of our assets determined in accordance with generally accepted accounting principles. At least 75% of the value of our total assets must be represented by real estate assets, cash, cash items (including receivables arising in the ordinary course of our operation), government securities and qualified temporary investments. Although the remaining 25% of our assets generally may be invested without restriction, we are prohibited from owning securities representing more than 10% of either the vote (the “10% vote test”) or value (the “10% value test”) of the outstanding securities of any issuer other than a qualified REIT subsidiary, another REIT or a taxable REIT subsidiary. Further, no more than 25% of the total assets may be represented by securities of one or more taxable REIT subsidiaries (the “25% asset test”) and no more than 5% of the value of our total assets may be represented by securities of any non-governmental issuer other than a qualified REIT subsidiary (the “5% asset test”), another REIT or a taxable REIT subsidiary. Each of the 10% vote test, the 10% value test and the 25% and 5% asset tests must be satisfied at the end of each quarter. There are special rules which provide relief if the value related tests are not satisfied due to changes in the value of the assets of a REIT.

 

Certain items are excluded from the 10% value test, including: (1) straight debt securities (as defined in Internal Revenue Code Section 1361(c)(5)) of an issuer (including straight debt that provides certain contingent payments); (2) any loan to an individual or an estate; (3) any rental agreement described in Section 467 of the Internal Revenue Code, other than with a “related person” (4) any obligation to pay rents from real property; (5) certain securities issued by a state or any subdivision thereof, the District of Columbia, a foreign government, or any political subdivision thereof, or the Commonwealth of Puerto Rico; (6) any security issued by a REIT; and (7) any other arrangement that, as determined by the Secretary of the Treasury, is excepted from the definition of security (“excluded securities”). Special rules apply to straight debt securities issued by corporations and entities taxable as partnerships for federal income tax purposes. If a REIT, or its taxable REIT subsidiary, holds (1) straight debt securities of a corporate or partnership issuer and (2) securities of such issuer that are not excluded securities and have an aggregate value greater than 1% of such issuer’s outstanding securities, the straight debt securities will be included in the 10% value test.

 

A REIT’s interest as a partner in a partnership is not treated as a security for purposes of applying the 10% value test to securities issued by the partnership. Further, any debt instrument issued by a partnership will not be a security for purposes of applying the 10% value test (1) to the extent of the REIT’s interest as a partner in the partnership and (2) if at least 75% of the partnership’s gross income (excluding gross income from prohibited transactions) would qualify for the 75% gross income test.  For purposes of the 10% value test, a REIT’s interest in a partnership’s assets is determined by the REIT’s proportionate interest in any securities issued by the partnership (other than the excluded securities described in the preceding paragraph).

 

For taxable years beginning after July 30, 2008, if the REIT or its QBU uses a foreign currency as its functional currency, the term “cash” includes such foreign currency, but only to the extent such foreign currency is (i) held for use in the normal course of the activities of the REIT or QBU which give rise to items of income or gain that are included in the 95% and 75% gross income tests or are directly related to acquiring or holding assets qualifying under the 75% asset test, and (ii) not held in connection with dealing or engaging in substantial and regular trading in securities.

 

With respect to corrections of failures as to violations of the 10% vote test, the 10% value test or the 5% asset test, a REIT may avoid disqualification as a REIT by disposing of sufficient assets to cure a violation that does not exceed the lesser of 1% of the REIT’s assets at the end of the relevant quarter or $10,000,000, provided that the disposition occurs within six months following the last day of the quarter in which the REIT first identified the assets. For violations of any of the REIT asset tests due to reasonable cause and not willful neglect that exceed the thresholds described in the preceding sentence, a REIT can avoid disqualification as a REIT after the close of a taxable quarter by taking certain steps, including disposition of sufficient assets within the six month period described above to meet the applicable asset test, paying a tax equal to the greater of $50,000 or the highest corporate tax rate multiplied by the net income generated by the non-qualifying assets during the period of time that the assets were held as non-qualifying assets and filing a schedule with the Internal Revenue Service that describes the non-qualifying assets.

 

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Investments in Taxable REIT Subsidiaries.   REITs may own more than 10% of the voting power and value of securities in taxable REIT subsidiaries. We and any taxable corporate entity in which we own an interest are allowed to jointly elect to treat such entity as a “taxable REIT subsidiary.”

 

Certain of our subsidiaries have elected to be treated as a taxable REIT subsidiary. Taxable REIT subsidiaries are subject to full corporate level federal taxation on their earnings but are permitted to engage in certain types of activities that cannot be performed directly by REITs without jeopardizing their REIT status. Our taxable REIT subsidiaries will attempt to minimize the amount of these taxes, but there can be no assurance whether or the extent to which measures taken to minimize taxes will be successful. To the extent our taxable REIT subsidiaries are required to pay federal, state or local taxes, the cash available for distribution as dividends to us from our taxable REIT subsidiaries will be reduced.

 

The amount of interest on related-party debt that a taxable REIT subsidiary may deduct is limited. Further, a 100% tax applies to any interest payments by a taxable REIT subsidiary to its affiliated REIT to the extent the interest rate is not commercially reasonable. A taxable REIT subsidiary is permitted to deduct interest payments to unrelated parties without any of these restrictions.

 

The Internal Revenue Service may reallocate costs between a REIT and its taxable REIT subsidiary where there is a lack of arm’s-length dealing between the parties. Any deductible expenses allocated away from a taxable REIT subsidiary would increase its tax liability. Further, any amount by which a REIT understates its deductions and overstates those of its taxable REIT subsidiary may, subject to certain exceptions, be subject to a 100% tax. Additional taxable REIT subsidiary elections may be made in the future for additional entities in which we obtain an interest.

 

Annual Distribution Requirements.  In order to avoid being taxed as a regular corporation, we are required to make distributions (other than capital gain distributions) to our stockholders which qualify for the dividends paid deduction in an amount at least equal to (1) the sum of (i) 90% of our “REIT taxable income” (computed without regard to the dividends paid deduction and our net capital gain) and (ii) 90% of the after-tax net income, if any, from foreclosure property, minus (2) a portion of certain items of non-cash income. These distributions must be paid in the taxable year to which they relate, or in the following taxable year if declared before we timely file our tax return for that year and if paid on or before the first regular distribution payment after such declaration. The amount distributed must not be preferential. This means that every stockholder of the class of stock to which a distribution is made must be treated the same as every other stockholder of that class, and no class of stock may be treated otherwise than in accordance with its dividend rights as a class. To the extent that we do not distribute all of our net capital gain or distribute at least 90%, but less than 100%, of our “REIT taxable income,” as adjusted, we will be subject to tax on the undistributed amount at regular corporate tax rates.  As discussed above, we may be subject to an excise tax if we fail to meet certain other distribution requirements. We believe we have satisfied the annual distribution requirements for the year of our initial REIT election and each year thereafter through the year ended December 31, 2013. Although we intend to make timely distributions sufficient to satisfy these annual distribution requirements for subsequent years, economic, market, legal, tax or other factors could limit our ability to meet those requirements. See “Item 1A — Risk Factors.”

 

It is also possible that, from time to time, we may not have sufficient cash or other liquid assets to meet the 90% distribution requirement, or to distribute such greater amount as may be necessary to avoid income and excise taxation, due to, among other things, (1) timing differences between (i) the actual receipt of income and actual payment of deductible expenses and (ii) the inclusion of income and deduction of expenses in arriving at our taxable income, or (2) the payment of severance benefits that may not be deductible to us. In the event that timing differences occur, we may find it necessary to arrange for borrowings or, if possible, pay dividends in the form of taxable stock dividends in order to meet the distribution requirement.

 

Under certain circumstances, in the event of a deficiency determined by the Internal Revenue Service, we may be able to rectify a resulting failure to meet the distribution requirement for a year by paying “deficiency dividends” to stockholders in a later year, which may be included in our deduction for distributions paid for the earlier year. Thus, we may be able to avoid being taxed on amounts distributed as deficiency dividends; however, we will be required to pay applicable penalties and interest based upon the amount of any deduction taken for deficiency dividend distributions.

 

     Failure to Qualify as a REIT

 

If we fail to qualify for taxation as a REIT in any taxable year, we will be subject to federal income tax, including any applicable alternative minimum tax, on our taxable income at regular corporate rates. Distributions to stockholders in any year in which we fail to qualify as a REIT will not be deductible nor will any particular amount of distributions be required to be made in any year. All distributions to stockholders will be taxable as ordinary income to the extent of current and accumulated earnings and profits allocable to these distributions and, subject to certain limitations, will be eligible for the dividends received deduction for corporate stockholders. Unless entitled to relief under specific statutory provisions, we also will be disqualified from taxation as a REIT for the four taxable years following the year during which qualification was lost. It is not possible to state whether in all circumstances we

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would be entitled to statutory relief. Failure to qualify for even one year could result in our need to incur indebtedness or liquidate investments in order to pay potentially significant resulting tax liabilities.

 

In addition to the relief described above under “— Income Tests” and “— Asset Tests,” relief is available in the event that we violate a provision of the Internal Revenue Code that would result in our failure to qualify as a REIT if: (1) the violation is due to reasonable cause and not due to willful neglect; (2) we pay a penalty of $50,000 for each failure to satisfy the provision; and (3) the violation does not include a violation described under “— Income Tests” or “— Asset Tests” above. It is not now possible to determine the circumstances under which we may be entitled to the benefit of these relief provisions.

 

Federal Income Taxation of Holders of Our Stock

 

Treatment of Taxable U.S. Stockholders.  The following summary applies to you only if you are a “U.S. stockholder.” A “U.S. stockholder” is a holder of shares of stock who, for United States federal income tax purposes, is:

 

•     a citizen or resident of the United States;

 

•     a corporation, partnership or other entity classified as a corporation or partnership for these purposes, created or organized in or under the laws of the United States or of any political subdivision of the United States, including any state;

 

•     an estate, the income of which is subject to United States federal income taxation regardless of its source; or

 

•     a trust, if, in general, a U.S. court is able to exercise primary supervision over the trust’s administration and one or more U.S. persons, within the meaning of the Internal Revenue Code, has the authority to control all of the trust’s substantial decisions.

 

So long as we qualify for taxation as a REIT, distributions on shares of our stock made out of the current or accumulated earnings and profits allocable to these distributions (and not designated as capital gain dividends) will be includable as ordinary income for federal income tax purposes. None of these distributions will be eligible for the dividends received deduction for U.S. corporate stockholders.

 

Generally, for taxable years following the year ended December 31, 2013, the maximum marginal rate of tax payable by individuals on dividends received from corporations that are subject to a corporate level of tax is 20%. Except in limited circumstances, this tax rate will not apply to dividends paid to you by us on our shares, because generally we are not subject to federal income tax on the portion of our REIT taxable income or capital gains distributed to our stockholders. The reduced maximum federal income tax rate will apply to that portion, if any, of dividends received by you with respect to our shares that are attributable to: (1) dividends received by us from non-REIT corporations or other taxable REIT subsidiaries; (2) income from the prior year with respect to which we were required to pay federal corporate income tax during the prior year (if, for example, we did not distribute 100% of our REIT taxable income for the prior year); or (3) the amount of any earnings and profits that were distributed by us and accumulated in a non-REIT year.

 

Distributions that are designated as capital gain dividends will be taxed as long-term capital gains (to the extent they do not exceed our actual net capital gain for the taxable year), without regard to the period for which you held our stock. However, if you are a corporation, you may be required to treat a portion of some capital gain dividends as ordinary income.

 

If we elect to retain and pay income tax on any net long-term capital gain, you would include in income, as long-term capital gain, your proportionate share of this net long-term capital gain. You would also receive a refundable tax credit for your proportionate share of the tax paid by us on such retained capital gains, and you would have an increase in the basis of your shares of our stock in an amount equal to your includable capital gains less your share of the tax deemed paid.

 

You may not include in your federal income tax return any of our net operating losses or capital losses. Federal income tax rules may also require that certain minimum tax adjustments and preferences be apportioned to you. In addition, any distribution declared by us in October, November or December of any year on a specified date in any such month shall be treated as both paid by us and received by you on December 31 of that year, provided that the distribution is actually paid by us no later than January 31 of the following year.

 

We will be treated as having sufficient earnings and profits to treat as a dividend any distribution up to the amount required to be distributed in order to avoid imposition of the 4% excise tax discussed under “— General” and “— Qualification as a REIT — Annual Distribution Requirements” above. As a result, you may be required to treat as taxable dividends certain distributions that would

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otherwise result in a tax-free return of capital. Moreover, any “deficiency dividend” will be treated as a dividend (an ordinary dividend or a capital gain dividend, as the case may be), regardless of our earnings and profits. Any other distributions in excess of current or accumulated earnings and profits will not be taxable to you to the extent these distributions do not exceed the adjusted tax basis of your shares of our stock. You will be required to reduce the tax basis of your shares of our stock by the amount of these distributions until the basis has been reduced to zero, after which these distributions will be taxable as capital gain, if the shares of our stock are held as capital assets. The tax basis as so reduced will be used in computing the capital gain or loss, if any, realized upon sale of the shares of our stock. Any loss upon a sale or exchange of shares of our stock which were held for six months or less (after application of certain holding period rules) will generally be treated as a long-term capital loss to the extent you previously received capital gain distributions with respect to these shares of our stock.

 

Upon the sale or exchange of any shares of our stock to or with a person other than us or a sale or exchange of all shares of our stock (whether actually or constructively owned) with us, you will generally recognize capital gain or loss equal to the difference between the amount realized on the sale or exchange and your adjusted tax basis in these shares of our stock. This gain will be capital gain if you held these shares of our stock as a capital asset.

 

If we redeem any of your shares in us, the treatment can only be determined on the basis of particular facts at the time of redemption. In general, you will recognize gain or loss (as opposed to dividend income) equal to the difference between the amount received by you in the redemption and your adjusted tax basis in your shares redeemed if such redemption: (1) results in a “complete termination” of your interest in all classes of our equity securities; (2) is a “substantially disproportionate redemption” or (3) is “not essentially equivalent to a dividend” with respect to you. In applying these tests, you must take into account your ownership of all classes of our equity securities (e.g., common stock, preferred stock, depositary shares and warrants). You also must take into account any equity securities that are considered to be constructively owned by you.

 

If, as a result of a redemption by us of your shares, you no longer own (either actually or constructively) any of our equity securities or only own (actually and constructively) an insubstantial percentage of our equity securities, then it is probable that the redemption of your shares would be considered “not essentially equivalent to a dividend” and, thus, would result in gain or loss to you. However, whether a distribution is “not essentially equivalent to a dividend” depends on all of the facts and circumstances, and if you rely on any of these tests at the time of redemption, you should consult your tax advisor to determine their application to the particular situation.

 

Generally, if the redemption does not meet the tests described above, then the proceeds received by you from the redemption of your shares will be treated as a distribution taxable as a dividend to the extent of the allocable portion of current or accumulated earnings and profits. If the redemption is taxed as a dividend, your adjusted tax basis in the redeemed shares will be transferred to any other shareholdings in us that you own. If you own no other shareholdings in us, under certain circumstances, such basis may be transferred to a related person, or it may be lost entirely.

 

Gain from the sale or exchange of our shares held for more than one year is generally taxed at a maximum long-term capital gain rate of 20% in the case of stockholders who are individuals and 35% in the case of stockholders that are corporations.  Pursuant to Internal Revenue Service guidance, we may classify portions of our capital gain dividends as gains eligible for the long-term capital gains rate or as gain taxable to individual stockholders at a maximum rate of 25%.  Capital losses recognized by a stockholder upon the disposition of our shares held for more than one year at the time of disposition will be considered long term capital losses, and are generally available only to offset capital gain income of the stockholder but not ordinary income (except in the case of individuals, who may offset up to $3,000 of ordinary income each year).

 

An additional tax of 3.8% generally will be imposed on the “net investment income” of U.S. stockholders who meet certain requirements and are individuals, estates or certain trusts for taxable years beginning after December 31, 2012.  Among other items, “net investment income” generally includes gross income from dividends and net gain attributable to the disposition of certain property, such as shares of our common stock or warrants. In the case of individuals, this tax will only apply to the extent such individual’s modified adjusted gross income exceeds $200,000 ($250,000 for married couples filing a joint return and surviving spouses, and $125,000 for married individuals filing a separate return). U.S. stockholders should consult their tax advisors regarding the possible applicability of this additional tax in their particular circumstances.

 

Treatment of Tax-Exempt U.S. Stockholders.  Tax-exempt entities, including qualified employee pension and profit sharing trusts and individual retirement accounts (“Exempt Organizations”), generally are exempt from federal income taxation. However, they are subject to taxation on their unrelated business taxable income (“UBTI”). The Internal Revenue Service has issued a published revenue ruling that dividend distributions from a REIT to an exempt employee pension trust do not constitute UBTI, provided that the shares of the REIT are not otherwise used in an unrelated trade or business of the exempt employee pension trust. Based on this ruling, amounts distributed by us to Exempt Organizations generally should not constitute UBTI. However, if an Exempt Organization finances its acquisition of the shares of our stock with debt, a portion of its income from us will constitute UBTI pursuant to the “debt

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financed property” rules. Likewise, a portion of the Exempt Organization’s income from us would constitute UBTI if we held a residual interest in a real estate mortgage investment conduit.

 

In addition, in certain circumstances, a pension trust that owns more than 10% of our stock is required to treat a percentage of our dividends as UBTI. This rule applies to a pension trust holding more than 10% of our stock only if: (1) the percentage of our income that is UBTI (determined as if we were a pension trust) is at least 5%; (2) we qualify as a REIT by reason of the modification of the Five or Fewer Requirement that allows beneficiaries of the pension trust to be treated as holding shares in proportion to their actuarial interests in the pension trust; and (3) either (i) one pension trust owns more than 25% of the value of our stock, or (ii) a group of pension trusts individually holding more than 10% of the value of our stock collectively own more than 50% of the value of our stock.

 

Backup Withholding and Information Reporting.  Under certain circumstances, you may be subject to backup withholding at applicable rates on payments made with respect to, or cash proceeds of a sale or exchange of, shares of our stock. Backup withholding will apply only if you: (1) fail to provide a correct taxpayer identification number, which if you are an individual, is ordinarily your social security number; (2) furnish an incorrect taxpayer identification number; (3) are notified by the Internal Revenue Service that you have failed to properly report payments of interest or dividends; or (4) fail to certify, under penalties of perjury, that you have furnished a correct taxpayer identification number and that the Internal Revenue Service has not notified you that you are subject to backup withholding.

 

Backup withholding will not apply with respect to payments made to certain exempt recipients, such as corporations and tax-exempt organizations. You should consult with a tax advisor regarding qualification for exemption from backup withholding, and the procedure for obtaining an exemption. Backup withholding is not an additional tax. Rather, the amount of any backup withholding with respect to a payment to a stockholder will be allowed as a credit against such stockholder’s United States federal income tax liability and may entitle such stockholder to a refund, provided that the required information is provided to the Internal Revenue Service. In addition, withholding a portion of capital gain distributions made to stockholders may be required for stockholders who fail to certify their non-foreign status.

 

Taxation of Foreign Stockholders.  The following summary applies to you only if you are a foreign person. The federal taxation of foreign persons is a highly complex matter that may be affected by many considerations.

 

Except as discussed below, distributions to you of cash generated by our real estate operations in the form of ordinary dividends, but not by the sale or exchange of our capital assets, generally will be subject to U.S. withholding tax at a rate of 30%, unless an applicable tax treaty reduces that tax and you file with us the required form evidencing the lower rate.

 

In general, you will be subject to United States federal income tax on a graduated rate basis rather than withholding with respect to your investment in our stock if such investment is “effectively connected” with your conduct of a trade or business in the United States. A corporate foreign stockholder that receives income that is, or is treated as, effectively connected with a United States trade or business may also be subject to the branch profits tax, which is payable in addition to regular United States corporate income tax. The following discussion will apply to foreign stockholders whose investment in us is not so effectively connected. We expect to withhold United States income tax, as described below, on the gross amount of any distributions paid to you unless (1) you file an Internal Revenue Service Form W-8ECI with us claiming that the distribution is “effectively connected” or (2) certain other exceptions apply.

 

Distributions by us that are attributable to gain from the sale or exchange of a United States real property interest will be taxed to you under the Foreign Investment in Real Property Tax Act of 1980 (“FIRPTA”) as if these distributions were gains “effectively connected” with a United States trade or business. Accordingly, you will be taxed at the normal capital gain rates applicable to a U.S. stockholder on these amounts, subject to any applicable alternative minimum tax and a special alternative minimum tax in the case of nonresident alien individuals. Distributions subject to FIRPTA may also be subject to a branch profits tax in the hands of a corporate foreign stockholder that is not entitled to treaty exemption.

 

We will be required to withhold from distributions subject to FIRPTA, and remit to the Internal Revenue Service, 35% of designated capital gain dividends, or, if greater, 35% of the amount of any distributions that could be designated as capital gain dividends. In addition, if we designate prior distributions as capital gain dividends, subsequent distributions, up to the amount of the prior distributions not withheld against, will be treated as capital gain dividends for purposes of withholding.

 

Any capital gain dividend with respect to any class of stock that is “regularly traded” on an established securities market will be treated as an ordinary dividend if the foreign stockholder did not own more than 5% of such class of stock at any time during the taxable year. Foreign stockholders generally will not be required to report distributions received from us on U.S. federal income tax returns and all distributions treated as dividends for U.S. federal income tax purposes (including any such capital gain dividends) will be subject to a 30% U.S. withholding tax (unless reduced under an applicable income tax treaty) as discussed above. In addition, the branch profits tax will not apply to such distributions.

 

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Unless our shares constitute a “United States real property interest” within the meaning of FIRPTA or are effectively connected with a U.S. trade or business, a sale of our shares by you generally will not be subject to United States taxation. Our shares will not constitute a United States real property interest if we qualify as a “domestically controlled REIT.” We believe that we, and expect to continue to, qualify as a domestically controlled REIT. A domestically controlled REIT is a REIT in which at all times during a specified testing period less than 50% in value of its shares is held directly or indirectly by foreign stockholders. However, if you are a nonresident alien individual who is present in the United States for 183 days or more during the taxable year and certain other conditions apply, you will be subject to a 30% tax on such capital gains. In any event, a purchaser of our shares from you will not be required under FIRPTA to withhold on the purchase price if the purchased shares are “regularly traded” on an established securities market or if we are a domestically controlled REIT. Otherwise, under FIRPTA, the purchaser may be required to withhold 10% of the purchase price and remit such amount to the Internal Revenue Service.

 

Backup withholding tax and information reporting will generally not apply to distributions paid to you outside the United States that are treated as: (1) dividends to which the 30% or lower treaty rate withholding tax discussed above applies; (2) capital gains dividends; or (3) distributions attributable to gain from the sale or exchange by us of U.S. real property interests. Payment of the proceeds of a sale of stock within the United States or conducted through certain U.S. related financial intermediaries is subject to both backup withholding and information reporting unless the beneficial owner certifies under penalties of perjury that he or she is not a U.S. person (and the payor does not have actual knowledge that the beneficial owner is a U.S. person) or otherwise established an exemption. You may obtain a refund of any amounts withheld under the backup withholding rules by filing the appropriate claim for refund with the Internal Revenue Service.

 

     Withholding tax at a rate of 30% will be imposed on certain payments to you or certain foreign financial institutions (including investment funds) and other non-US persons receiving payments on your behalf, including distributions in respect of shares of our stock and gross proceeds from the sale of shares of our stock, if you or such institutions fail to comply with certain due diligence, disclosure and reporting rules, as set forth in recently issued Treasury regulations. Accordingly, the entity through which shares of our stock are held will affect the determination of whether such withholding is required. Withholding will apply to payments of dividends made after June 30, 2014, and to payments of gross proceeds from a sale of shares of our stock made after December 31, 2016.  Stockholders that are otherwise eligible for an exemption from, or reduction of, U.S. withholding taxes with respect to such dividends and proceeds will be required to seek a refund from the Internal Revenue Service to obtain the benefit of such exemption or reduction.  Additional requirements and conditions may be imposed pursuant to an intergovernmental agreement, if and when entered into, between the United States and such institution’s home jurisdiction. We will not pay any additional amounts to any stockholders in respect of any amounts withheld. You are encouraged to consult with your tax advisor regarding U.S. withholding taxes and the application of the recently issued Treasury regulations in light of your particular circumstances.

 

U.S. Federal Income Taxation of Holders of Depositary Shares

 

Owners of our depositary shares will be treated as if you were owners of the series of preferred stock represented by the depositary shares. Thus, you will be required to take into account the income and deductions to which you would be entitled if you were a holder of the underlying series of preferred stock.

 

Conversion or Exchange of Shares for Preferred Stock.  No gain or loss will be recognized upon the withdrawal of preferred stock in exchange for depositary shares and the tax basis of each share of preferred stock will, upon exchange, be the same as the aggregate tax basis of the depositary shares exchanged. If you held your depositary shares as a capital asset at the time of the exchange for shares of preferred stock, the holding period for your shares of preferred stock will include the period during which you owned the depositary shares.

 

U.S. Federal Income and Estate Taxation of Holders of Our Debt Securities

 

The following is a general summary of the United States federal income tax consequences and, in the case that you are a holder that is a non-U.S. holder, as defined below, the United States federal estate tax consequences, of purchasing, owning and disposing of debt securities periodically offered under one or more indentures (the “notes”). This summary assumes that you hold the notes as capital assets. This summary applies to you only if you are the initial holder of the notes and you acquire the notes for a price equal to the issue price of the notes. The issue price of the notes is the first price at which a substantial amount of the notes is sold other than to bond houses, brokers or similar persons or organizations acting in the capacity of underwriters, placement agents or wholesalers. In addition, this summary does not consider any foreign, state, local or other tax laws that may be applicable to us or a purchaser of the notes.

 

U.S. Holders

 

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The following summary applies to you only if you are a U.S. holder, as defined below.

 

Definition of a U.S. Holder.  A “U.S. holder” is a beneficial owner of a note or notes that is for United States federal income tax purposes:

 

•     a citizen or resident of the United States;

 

•     a corporation, partnership or other entity classified as a corporation or partnership for these purposes, created or organized in or under the laws of the United States or of any political subdivision of the United States, including any state;

 

•     an estate, the income of which is subject to United States federal income taxation regardless of its source; or

 

•     a trust, if, in general, a U.S. court is able to exercise primary supervision over the trust’s administration and one or more U.S. persons, within the meaning of the Internal Revenue Code, has the authority to control all of the trust’s substantial decisions.

 

Payments of Interest.  Stated interest on the notes generally will be taxed as ordinary interest income from domestic sources at the time it is paid or accrues in accordance with your method of accounting for tax purposes.

 

Sale, Exchange or Other Disposition of Notes.  The adjusted tax basis in your note acquired at a premium will generally be your cost. You generally will recognize taxable gain or loss when you sell or otherwise dispose of your notes equal to the difference, if any, between:

 

•     the amount realized on the sale or other disposition, less any amount attributable to any accrued interest, which will be taxable in the manner described under “— Payments of Interest” above; and

 

•     your adjusted tax basis in the notes.

 

Your gain or loss generally will be capital gain or loss. This capital gain or loss will be long-term capital gain or loss if at the time of the sale or other disposition you have held the notes for more than one year. Subject to limited exceptions, your capital losses cannot be used to offset your ordinary income (except in the case of individuals, who may offset up to $3,000 of ordinary income each year).

 

Backup Withholding and Information Reporting.  In general, “backup withholding” may apply to any payments made to you of principal and interest on your note, and to payment of the proceeds of a sale or other disposition of your note before maturity, if you are a non-corporate U.S. holder and: (1) fail to provide a correct taxpayer identification number, which if you are an individual, is ordinarily your social security number; (2) furnish an incorrect taxpayer identification number; (3) are notified by the Internal Revenue Service that you have failed to properly report payments of interest or dividends; or (4) fail to certify, under penalties of perjury, that you have furnished a correct taxpayer identification number and that the Internal Revenue Service has not notified you that you are subject to backup withholding.

 

The amount of any reportable payments, including interest, made to you (unless you are an exempt recipient) and the amount of tax withheld, if any, with respect to such payments will be reported to you and to the Internal Revenue Service for each calendar year. You should consult your tax advisor regarding your qualification for an exemption from backup withholding and the procedures for obtaining such an exemption, if applicable. The backup withholding tax is not an additional tax and will be credited against your U.S. federal income tax liability, provided that correct information is provided to the Internal Revenue Service.

 

Non-U.S. Holders

 

The following summary applies to you if you are a beneficial owner of a note and are not a U.S. holder, as defined above (a “non-U.S. holder”).

 

Special rules may apply to certain non-U.S. holders such as “controlled foreign corporations,” “passive foreign investment companies” and “foreign personal holding companies.” Such entities are encouraged to consult their tax advisors to determine the United States federal, state, local and other tax consequences that may be relevant to them.

 

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U.S. Federal Withholding Tax.  Subject to the discussion below, U.S. federal withholding tax will not apply to payments by us or our paying agent, in its capacity as such, of principal and interest on your notes under the “portfolio interest” exception of the Internal Revenue Code, provided that:

 

•     you do not, directly or indirectly, actually or constructively, own 10% or more of the total combined voting power of all classes of our stock entitled to vote;

 

•     you are not (1) a controlled foreign corporation for U.S. federal income tax purposes that is related, directly or indirectly, to us through sufficient stock ownership, as provided in the Internal Revenue Code, or (2) a bank receiving interest described in Section 881(c)(3)(A) of the Internal Revenue Code;

 

•     such interest is not effectively connected with your conduct of a U.S. trade or business; and

 

•     you provide a signed written statement, under penalties of perjury, which can reliably be related to you, certifying that you are not a U.S. person within the meaning of the Internal Revenue Code and providing your name and address to:

 

•     us or our paying agent; or

 

          a securities clearing organization, bank or other financial institution that holds customers’ securities in the ordinary course of its trade or business and holds your notes on your behalf and that certifies to us or our paying agent under penalties of perjury that it, or the bank or financial institution between it and you, has received from you your signed, written statement and provides us or our paying agent with a copy of such statement.

 

Treasury regulations provide that:

 

•     if you are a foreign partnership, the certification requirement will generally apply to your partners, and you will be required to provide certain information;

 

•     if you are a foreign trust, the certification requirement will generally be applied to you or your beneficial owners depending on whether you are a “foreign complex trust,” “foreign simple trust,” or “foreign grantor trust” as defined in the Treasury regulations; and

 

•     look-through rules will apply for tiered partnerships, foreign simple trusts and foreign grantor trusts.

 

If you are a foreign partnership or a foreign trust, you should consult your own tax advisor regarding your status under these Treasury regulations and the certification requirements applicable to you.

 

If you cannot satisfy the portfolio interest requirements described above, payments of interest will be subject to the 30% United States withholding tax, unless you provide us with a properly executed (1) Internal Revenue Service Form W-8BEN claiming an exemption from or reduction in withholding under the benefit of an applicable treaty or (2) Internal Revenue Service Form W-8ECI stating that interest paid on the note is not subject to withholding tax because it is effectively connected with your conduct of a trade or business in the United States. Alternative documentation may be applicable in certain circumstances.

 

If you are engaged in a trade or business in the United States and interest on a note is effectively connected with the conduct of that trade or business, you will be required to pay United States federal income tax on that interest on a net income basis (although you will be exempt from the 30% withholding tax provided the certification requirement described above is met) in the same manner as if you were a U.S. person, except as otherwise provided by an applicable tax treaty. If you are a foreign corporation, you may be required to pay a branch profits tax on the earnings and profits that are effectively connected to the conduct of your trade or business in the United States.

 

     Withholding tax at a rate of 30% will be imposed on payments of interest (including original issue discount) and gross proceeds of sale in respect of debt instruments to you or certain foreign financial institutions (including investment funds) and other non-US persons receiving payments on your behalf, if you or such institutions fail to comply with certain due diligence, disclosure and reporting rules, as set forth in recently issued Treasury regulations. However, the Treasury regulations generally exempt from such withholding requirement obligations, such as debt instruments, issued before July 1, 2014, provided that any material modification of such an obligation made after such date will result in such obligation being considered newly issued as of the effective date of such modification. These withholding rules are generally effective with respect to payments of interest made after June 30, 2014, and with respect to proceeds of sales received after December 31, 2016. We will not pay any additional amounts to any holders or our debt

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instruments in respect of any amounts withheld. You are encouraged to consult with your tax advisor regarding U.S. withholding taxes and the application of the recently issued Treasury regulations in light of your particular circumstances.

 

Sale, Exchange or other Disposition of Notes.  You generally will not have to pay U.S. federal income tax on any gain or income realized from the sale, redemption, retirement at maturity or other disposition of your notes, unless:

 

•     in the case of gain, you are an individual who is present in the United States for 183 days or more during the taxable year of the sale or other disposition of your notes, and specific other conditions are met;

 

•     you are subject to tax provisions applicable to certain United States expatriates; or

 

•     the gain is effectively connected with your conduct of a U.S. trade or business.

 

If you are engaged in a trade or business in the United States, and gain with respect to your notes is effectively connected with the conduct of that trade or business, you generally will be subject to U.S. income tax on a net basis on the gain. In addition, if you are a foreign corporation, you may be subject to a branch profits tax on your effectively connected earnings and profits for the taxable year, as adjusted for certain items.

 

U.S. Federal Estate Tax.  If you are an individual and are not a U.S. citizen or a resident of the United States, as specially defined for U.S. federal estate tax purposes, at the time of your death, your notes will generally not be subject to the U.S. federal estate tax, unless, at the time of your death (1) you owned actually or constructively 10% or more of the total combined voting power of all our classes of stock entitled to vote, or (2) interest on the notes is effectively connected with your conduct of a U.S. trade or business.

 

Backup Withholding and Information Reporting.  Backup withholding will not apply to payments of principal or interest made by us or our paying agent, in its capacity as such, to you if you have provided the required certification that you are a non-U.S. holder as described in “— U.S. Federal Withholding Tax” above, and provided that neither we nor our paying agent have actual knowledge that you are a U.S. holder, as described in “— U.S. Holders” above. We or our paying agent may, however, report payments of interest on the notes.

 

The gross proceeds from the disposition of your notes may be subject to information reporting and backup withholding tax. If you sell your notes outside the United States through a non-U.S. office of a non-U.S. broker and the sales proceeds are paid to you outside the United States, then the U.S. backup withholding and information reporting requirements generally will not apply to that payment. However, U.S. information reporting, but not backup withholding, will apply to a payment of sales proceeds, even if that payment is made outside the United States, if you sell your notes through a non-U.S. office of a broker that:

 

•     is a U.S. person, as defined in the Internal Revenue Code;

 

•     derives 50% or more of its gross income in specific periods from the conduct of a trade or business in the United States;

 

•     is a “controlled foreign corporation” for U.S. federal income tax purposes; or

 

•     is a foreign partnership, if at any time during its tax year, one or more of its partners are U.S. persons who in the aggregate hold more than 50% of the income or capital interests in the partnership, or the foreign partnership is engaged in a U.S. trade or business, unless the broker has documentary evidence in its files that you are a non-U.S. person and certain other conditions are met or you otherwise establish an exemption. If you receive payments of the proceeds of a sale of your notes to or through a U.S. office of a broker, the payment is subject to both U.S. backup withholding and information reporting unless you provide a Form W-8BEN certifying that you are a non-U.S. person or you otherwise establish an exemption.

 

You should consult your own tax advisor regarding application of backup withholding in your particular circumstance and the availability of and procedure for obtaining an exemption from backup withholding. Any amounts withheld under the backup withholding rules from a payment to you will be allowed as a refund or credit against your U.S. federal income tax liability, provided the required information is furnished to the Internal Revenue Service.

 

U.S. Federal Income and Estate Taxation of Holders of Our Warrants

 

Exercise of Warrants.  You will not generally recognize gain or loss upon the exercise of a warrant. Your basis in the debt securities, preferred stock, depositary shares or common stock, as the case may be, received upon the exercise of the warrant will be equal to the sum of your adjusted tax basis in the warrant and the exercise price paid. Your holding period in the debt securities,

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preferred stock, depositary shares or common stock, as the case may be, received upon the exercise of the warrant will not include the period during which the warrant was held by you.

 

Expiration of Warrants.  Upon the expiration of a warrant, you will recognize a capital loss in an amount equal to your adjusted tax basis in the warrant.

 

Sale or Exchange of Warrants.  Upon the sale or exchange of a warrant to a person other than us, you will recognize gain or loss in an amount equal to the difference between the amount realized on the sale or exchange and your adjusted tax basis in the warrant. Such gain or loss will be capital gain or loss and will be long-term capital gain or loss if the warrant was held for more than one year. Upon the sale of the warrant to us, the Internal Revenue Service may argue that you should recognize ordinary income on the sale. You are advised to consult your own tax advisors as to the consequences of a sale of a warrant to us.

 

Potential Legislation or Other Actions Affecting Tax Consequences

 

Current and prospective securities holders should recognize that the present federal income tax treatment of an investment in us may be modified by legislative, judicial or administrative action at any time and that any such action may affect investments and commitments previously made. The rules dealing with federal income taxation are constantly under review by persons involved in the legislative process and by the Internal Revenue Service and the Treasury Department, resulting in revisions of regulations and revised interpretations of established concepts as well as statutory changes. Revisions in federal tax laws and interpretations of these laws could adversely affect the tax consequences of an investment in us.

 

State, Local and Foreign Taxes

 

We, and holders of our debt and equity securities, may be subject to state, local or foreign taxation in various jurisdictions, including those in which we or they transact business, own property or reside. It should be noted that we own properties located in a number of state, local and foreign jurisdictions, and may be required to file tax returns in some or all of those jurisdictions. The state, local or foreign tax treatment of us and holders of our debt and equity securities may not conform to the U.S. federal income tax consequences discussed above. Consequently, you are urged to consult your advisor regarding the application and effect of state, local and foreign tax laws with respect to any investment in our securities.

 

Internet Access to Our SEC Filings

 

Our annual reports on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K and amendments to those reports, as well as our proxy statements and other materials that are filed with, or furnished to, the Securities and Exchange Commission are made available, free of charge, on the Internet at www.hcreit.com, as soon as reasonably practicable after they are filed with, or furnished to, the Securities and Exchange Commission.

 

Cautionary Statement Regarding Forward-Looking Statements

 

This Annual Report on Form 10-K and the documents incorporated by reference contain statements that constitute “forward-looking statements” as that term is defined in the federal securities laws. When we use words such as “may,” “will,” “intend,” “should,” “believe,” “expect,” “anticipate,” “project,” “estimate” or similar expressions that do not relate solely to historical matters, we are making forward-looking statements. In particular, these forward-looking statements include, but are not limited to, those relating to our opportunities to acquire, develop or sell properties; our ability to close our anticipated acquisitions, investments or dispositions on currently anticipated terms, or within currently anticipated timeframes; the expected performance of our operators/tenants and properties; our expected occupancy rates; our ability to declare and to make distributions to stockholders; our investment and financing opportunities and plans; our continued qualification as a real estate investment trust (“REIT”); and our ability to access capital markets or other sources of funds.

 

Forward-looking statements are not guarantees of future performance and involve risks and uncertainties that may cause our actual results to differ materially from our expectations discussed in the forward-looking statements. This may be a result of various factors, including, but not limited to:

 

          the status of the economy;

          the status of capital markets, including availability and cost of capital;

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          issues facing the health care industry, including compliance with, and changes to, regulations and payment policies, responding to government investigations and punitive settlements and operators’/tenants’ difficulty in cost-effectively obtaining and maintaining adequate liability and other insurance;

          changes in financing terms;

          competition within the health care, seniors housing and life science industries;

          negative developments in the operating results or financial condition of operators/tenants, including, but not limited to, their ability to pay rent and repay loans;

          our ability to transition or sell properties with profitable results;

          the failure to make new investments or acquisitions as and when anticipated;

          natural disasters and other acts of God affecting our properties;

          our ability to re-lease space at similar rates as vacancies occur;

          our ability to timely reinvest sale proceeds at similar rates to assets sold;

          operator/tenant or joint venture partner bankruptcies or insolvencies;

          the cooperation of joint venture partners;

          government regulations affecting Medicare and Medicaid reimbursement rates and operational requirements;

          liability or contract claims by or against operators/tenants;

          unanticipated difficulties and/or expenditures relating to future investments or acquisitions;

          environmental laws affecting our properties;

          changes in rules or practices governing our financial reporting;

          the movement of U.S. and foreign currency exchange rates;

          our ability to maintain our qualification as a REIT;

          key management personnel recruitment and retention; and

          the risks described under “Item 1A — Risk Factors.”

 

We undertake no obligation to update or revise publicly any forward-looking statements, whether because of new information, future events, or otherwise.

 

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.

 

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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 its 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 disputes 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.

 

The continued weakened economy may also have an adverse effect on our operators and tenants, including their ability to access credit or maintain occupancy and/or private pay rates. If the operations, cash flows or financial condition of our operators are materially adversely impacted by economic conditions, our revenue and operations may be adversely affected.

 

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

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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, 2013, consisted of 125 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

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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, skilled nursing 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 2014, roughly half of the states have made statements or otherwise indicated that they do not intend to expand Medicaid coverage at this time. The participation by states in the Medicaid expansion could have the

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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 and “Item 7 — Management’s Discussion and Analysis of Financial Condition and Results of Operations — Health Care Industry — Health Reform Laws” below.

 

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

 

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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.

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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.

 

Also, the federal government’s failure to increase the amount of debt that it is statutorily permitted to incur as needed to meet its future financial commitments or a downgrade in the debt rating on U.S. government securities could lead to a weakened U.S.

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dollar, rising interest rates and constrained access to capital, which could materially adversely affect the U.S. and global economies, increase our costs of borrowing and have a material adverse impact on our consolidated results of operations, liquidity and/or financial condition.

 

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.

 

38


 

 

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.

 

The 90% annual distribution requirement will decrease our liquidity and may limit our ability to engage in otherwise beneficial transactions

 

To comply with the 90% distribution requirement applicable to REITs and to avoid the nondeductible excise tax, we must make distributions to our stockholders. See “Item 1 — Business — Taxation — Federal Income Tax Considerations — Qualification as a REIT — Annual Distribution Requirements” above. Although we anticipate that we generally will have sufficient cash or liquid assets to enable us to satisfy the REIT distribution requirement, it is possible that, from time to time, we may not have sufficient cash or other liquid assets to meet the 90% distribution requirement, or we may decide to retain cash or distribute such greater amount as may be necessary to avoid income and excise taxation. This may be due to timing differences between the actual receipt of income and actual payment of deductible expenses, on the one hand, and the inclusion of that income and deduction of those expenses in arriving at our taxable income, on the other hand. In addition, non-deductible expenses such as principal amortization or repayments or capital expenditures in excess of non-cash deductions may cause us to fail to have sufficient cash or liquid assets to enable us to satisfy the 90% distribution requirement. In the event that timing differences occur, or we deem it appropriate to retain cash, we may borrow funds, issue additional equity securities (although we cannot assure you that we will be able to do so), pay taxable stock dividends, if possible, distribute other property or securities or engage in another transaction intended to enable us to meet the REIT distribution requirements. This may require us to raise additional capital to meet our obligations.

 

The lease of qualified health care properties to a taxable REIT subsidiary is subject to special requirements

 

We lease certain qualified health care properties to taxable REIT subsidiaries (or limited liability companies of which the taxable REIT subsidiaries are members), which lessees contract with managers (or related parties) to manage the health care operations at these properties. The rents from this taxable REIT subsidiary lessee structure are treated as qualifying rents from real property if (1) they are paid pursuant to an arms-length lease of a qualified health care property with a taxable REIT subsidiary and (2) the manager qualifies as an eligible independent contractor (as defined in the Code). If any of these conditions are not satisfied, then the rents will not be qualifying rents. See “Item 1 — Business — Taxation — Federal Income Tax Considerations — Qualification as a REIT — Income Tests” above.

 

If certain sale-leaseback transactions are not characterized by the Internal Revenue Service as “true leases,” we may be subject to adverse tax consequences

 

We have purchased certain properties and leased them back to the sellers of such properties, and we may enter into similar transactions in the future. We intend for any such sale-leaseback transaction to be structured in such a manner that the lease will be characterized as a “true lease,” thereby allowing us to be treated as the owner of the property for U.S. federal income tax purposes. However, depending on the terms of any specific transaction, the Internal Revenue Service might take the position that the transaction is not a “true lease” but is more properly treated in some other manner. In the event any sale-leaseback transaction is challenged and successfully re-characterized by the Internal Revenue Service, we would not be entitled to claim the deductions for depreciation and cost recovery generally available to an owner of property. Furthermore, if a sale-leaseback transaction were so re-characterized, we might fail to satisfy the REIT asset tests or income tests and, consequently, could lose our REIT status effective with the year of re-characterization. See “Item 1 — Business — Taxation — Federal Income Tax Considerations — Qualification as a REIT — Asset Tests” and “Item 1 — Business — Taxation — Federal Income Tax Considerations — Qualification as a REIT — Income Tests” above. Alternatively, the amount of our REIT taxable income could be recalculated, which may cause us to fail to meet the REIT annual distribution requirements for a taxable year. See “Item 1 — Business — Taxation — Federal Income Tax Considerations — Qualification as a REIT — Annual Distribution Requirements” above.

  

 

Item 1B.  Unresolved Staff Comments

None.

39


 

 

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, 2013 (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

 

 4 

 

$

 37,961 

 

$

 3,743 

 

 - 

 

$

 - 

 

$

 - 

 

Arizona

 

 3 

 

 

 19,004 

 

 

 2,197 

 

 4 

 

 

 64,572 

 

 

 21,052 

 

California

 

 20 

 

 

 312,429 

 

 

 31,421 

 

 47 

 

 

 1,413,141 

 

 

 349,086 

 

Colorado

 

 3 

 

 

 56,162 

 

 

 7,949 

 

 5 

 

 

 146,083 

 

 

 37,454 

 

Connecticut

 

 14 

 

 

 179,166 

 

 

 18,442 

 

 14 

 

 

 331,236 

 

 

 111,660 

 

District of Columbia

 

 - 

 

 

 - 

 

 

 - 

 

 1 

 

 

 70,486 

 

 

 12,830 

 

Delaware

 

 10 

 

 

 155,422 

 

 

 16,082 

 

 1 

 

 

 22,412 

 

 

 5,194 

 

Florida

 

 43 

 

 

 639,702 

 

 

 51,479 

 

 - 

 

 

 - 

 

 

 - 

 

Georgia

 

 9 

 

 

 158,816 

 

 

 13,646 

 

 6 

 

 

 108,685 

 

 

 28,974 

 

Idaho

 

 1 

 

 

 16,791 

 

 

 1,966 

 

 - 

 

 

 - 

 

 

 - 

 

Illinois

 

 13 

 

 

 313,466 

 

 

 26,038 

 

 12 

 

 

 462,724 

 

 

 89,186 

 

Indiana

 

 17 

 

 

 191,627 

 

 

 23,048 

 

 - 

 

 

 - 

 

 

 - 

 

Iowa

 

 3 

 

 

 49,469 

 

 

 4,140 

 

 1 

 

 

 35,111 

 

 

 5,808 

 

Kansas

 

 8 

 

 

 154,261 

 

 

 15,484 

 

 3 

 

 

 75,527 

 

 

 15,946 

 

Kentucky

 

 10 

 

 

 51,561 

 

 

 8,688 

 

 2 

 

 

 42,652 

 

 

 11,291 

 

Louisiana

 

 1 

 

 

 4,418 

 

 

 1,401 

 

 2 

 

 

 56,439 

 

 

 11,119 

 

Maine

 

 - 

 

 

 - 

 

 

 - 

 

 2 

 

 

 56,524 

 

 

 17,440 

 

Maryland

 

 28 

 

 

 419,066 

 

 

 33,834 

 

 3 

 

 

 88,065 

 

 

 29,355 

 

Massachusetts

 

 30 

 

 

 424,115 

 

 

 50,648 

 

 21 

 

 

 552,519 

 

 

 128,889 

 

Michigan

 

 8 

 

 

 120,125 

 

 

 10,678 

 

 5 

 

 

 120,062 

 

 

 26,459 

 

Minnesota

 

 3 

 

 

 37,761 

 

 

 3,825 

 

 4 

 

 

 123,640 

 

 

 23,705 

 

Mississippi

 

 3 

 

 

 31,965 

 

 

 3,354 

 

 - 

 

 

 - 

 

 

 - 

 

Missouri

 

 2 

 

 

 29,812 

 

 

 2,860 

 

 3 

 

 

 118,877 

 

 

 16,753 

 

Montana

 

 1 

 

 

 6,698 

 

 

 953 

 

 - 

 

 

 - 

 

 

 - 

 

Nebraska

 

 4 

 

 

 36,124 

 

 

 4,067 

 

 - 

 

 

 - 

 

 

 - 

 

Nevada

 

 4 

 

 

 81,238 

 

 

 10,216 

 

 2 

 

 

 11,630 

 

 

 8,845 

 

New Hampshire

 

 11 

 

 

 178,146 

 

 

 19,739 

 

 3 

 

 

 82,988 

 

 

 17,609 

 

New Jersey

 

 57 

 

 

 1,243,478 

 

 

 103,450 

 

 8 

 

 

 257,834 

 

 

 61,838 

 

New Mexico

 

 - 

 

 

 - 

 

 

 - 

 

 1 

 

 

 19,823 

 

 

 666 

 

New York

 

 9 

 

 

 208,437 

 

 

 16,415 

 

 8 

 

 

 322,064 

 

 

 66,096 

 

North Carolina

 

 45 

 

 

 267,645 

 

 

 31,298 

 

 1 

 

 

 44,353 

 

 

 6,825 

 

Ohio

 

 28 

 

 

 221,837 

 

 

 30,786 

 

 4 

 

 

 198,411 

 

 

 20,608 

 

Oklahoma

 

 14 

 

 

 106,898 

 

 

 10,491 

 

 2 

 

 

 39,470 

 

 

 2,480 

 

Oregon

 

 1 

 

 

 3,522 

 

 

 742 

 

 - 

 

 

 - 

 

 

 - 

 

Pennsylvania

 

 45 

 

 

 789,684 

 

 

 80,745 

 

 6 

 

 

 87,127 

 

 

 34,665 

 

Rhode Island

 

 3 

 

 

 46,401 

 

 

 5,100 

 

 3 

 

 

 72,114 

 

 

 21,759 

 

South Carolina

 

 8 

 

 

 269,647 

 

 

 21,459 

 

 - 

 

 

 - 

 

 

 - 

 

Tennessee

 

 25 

 

 

 194,981 

 

 

 27,213 

 

 2 

 

 

 52,091 

 

 

 13,985 

 

Texas

 

 43 

 

 

 415,404 

 

 

 49,368 

 

 12 

 

 

 312,150 

 

 

 69,281 

 

Utah

 

 1 

 

 

 6,025 

 

 

 887 

 

 1 

 

 

 17,496 

 

 

 10,030 

 

Vermont

 

 2 

 

 

 26,950 

 

 

 2,969 

 

 1 

 

 

 28,735 

 

 

 7,072 

 

Virginia

 

 7 

 

 

 92,491 

 

 

 10,253 

 

 2 

 

 

 39,267 

 

 

 9,664 

 

Washington

 

 21 

 

 

 388,347 

 

 

 38,533 

 

 7 

 

 

 279,480 

 

 

 46,114 

 

West Virginia

 

 24 

 

 

 381,196 

 

 

 41,890 

 

 - 

 

 

 - 

 

 

 - 

 

Wisconsin

 

 15 

 

 

 197,222 

 

 

 20,680 

 

 - 

 

 

 - 

 

 

 - 

 

Total domestic

 

 601 

 

 

 8,565,470 

 

 

 858,177 

 

 199 

 

 

 5,753,788 

 

 

 1,339,738 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Canada

 

 - 

 

 

 - 

 

 

 - 

 

 53 

 

 

 1,294,716 

 

 

 235,744 

 

England

 

 19 

 

 

 350,701 

 

 

 25,329 

 

 27 

 

 

 1,372,594 

 

 

 252,954 

 

Total international

 

 19 

 

 

 350,701 

 

 

 25,329 

 

 80 

 

 

 2,667,310 

 

 

 488,698 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Grand total

 

 620 

 

$

 8,916,171 

 

$

 883,506 

 

 279 

 

$

 8,421,098 

 

$

 1,828,436 

40


 

 

 

 

 

Medical Facilities

Property Location

 

Number of Properties

 

Total Investment

 

Annualized Revenues

 

Alabama

 

 3 

 

$

 32,971 

 

$

 5,838 

 

Alaska

 

 1 

 

 

 24,152 

 

 

 3,239 

 

Arizona

 

 4 

 

 

 75,278 

 

 

 9,233 

 

Arkansas

 

 1 

 

 

 27,023 

 

 

 3,103 

 

California

 

 15 

 

 

 519,765 

 

 

 59,042 

 

Florida

 

 36 

 

 

 453,554 

 

 

 47,154 

 

Georgia

 

 11 

 

 

 182,762 

 

 

 22,771 

 

Idaho

 

 1 

 

 

 18,679 

 

 

 1,768 

 

Illinois

 

 4 

 

 

 52,129 

 

 

 7,193 

 

Indiana

 

 7 

 

 

 129,308 

 

 

 15,061 

 

Iowa

 

 1 

 

 

 355 

 

 

 - 

 

Kansas

 

 7 

 

 

 77,519 

 

 

 11,837 

 

Kentucky

 

 1 

 

 

 26,912 

 

 

 3,242 

 

Louisiana

 

 2 

 

 

 19,416 

 

 

 1,925 

 

Maine

 

 1 

 

 

 23,985 

 

 

 2,903 

 

Maryland

 

 1 

 

 

 20,620 

 

 

 2,199 

 

Massachusetts

 

 2 

 

 

 16,311 

 

 

 689 

 

Michigan

 

 1 

 

 

 17,617 

 

 

 1,978 

 

Minnesota

 

 7 

 

 

 120,571 

 

 

 14,350 

 

Missouri

 

 8 

 

 

 190,277 

 

 

 19,546 

 

Nebraska

 

 3 

 

 

 144,864 

 

 

 16,626 

 

Nevada

 

 6 

 

 

 71,168 

 

 

 6,392 

 

New Jersey

 

 8 

 

 

 274,287 

 

 

 42,580 

 

New Mexico

 

 3 

 

 

 37,707 

 

 

 3,629 

 

New York

 

 7 

 

 

 69,852 

 

 

 7,734 

 

North Carolina

 

 3 

 

 

 62,089 

 

 

 6,575 

 

Ohio

 

 10 

 

 

 111,656 

 

 

 15,388 

 

Oklahoma

 

 3 

 

 

 35,752 

 

 

 4,024 

 

Oregon

 

 1 

 

 

 10,510 

 

 

 1,266 

 

Pennsylvania

 

 1 

 

 

 16,936 

 

 

 3,197 

 

South Carolina

 

 1 

 

 

 17,056 

 

 

 1,669 

 

Tennessee

 

 7 

 

 

 83,893 

 

 

 10,038 

 

Texas

 

 46 

 

 

 820,795 

 

 

 89,119 

 

Virginia

 

 5 

 

 

 77,293 

 

 

 10,118 

 

Washington

 

 5 

 

 

 174,234 

 

 

 15,402 

 

Wisconsin

 

 20 

 

 

 305,656 

 

 

 31,788 

 

Total

 

 243 

 

$

 4,342,952 

 

$

 498,616 

 

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)

 

 

 

 

2013

 

2012

 

2013

 

2012

 

2013

 

2012

 

 

Seniors housing triple-net(4)

 

88.5%

 

89.9%

 

 1.32x 

 

 1.34x 

 

$

 14,864 

 

$

 14,509 

 

per unit

Skilled nursing/post-acute(4)

 

87.7%

 

87.4%

 

 1.71x 

 

 1.75x 

 

 

 11,429 

 

 

 11,681 

 

per bed

Seniors housing operating(5)

 

90.7%

 

92.3%

 

n/a

 

n/a

 

 

 50,849 

 

 

 54,183 

 

per unit

Hospitals(4)

 

60.7%

 

60.3%

 

 2.42x 

 

 2.40x 

 

 

 49,710 

 

 

 49,244 

 

per bed

Medical office buildings(6)

 

94.5%

 

94.4%

 

n/a

 

n/a

 

 

 28 

 

 

 28 

 

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.

41


 

 

The following table sets forth information regarding lease expirations for certain portions of our portfolio as of December 31, 2013 (dollars in thousands):

 

 

 

 

Expiration Year

 

 

 

 

2014

 

 

2015

 

 

2016

 

 

2017

 

 

2018

 

 

2019

 

 

2020

 

 

2021

 

 

2022

 

 

2023

 

 

Thereafter

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Seniors housing triple-net:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Properties

 

 

18

 

 

1

 

 

0

 

 

36

 

 

51

 

 

0

 

 

10

 

 

23

 

 

42

 

 

2

 

 

413

  

Base rent(1)

 

$

28,262

 

$

1,435

 

$

0

 

$

16,569

 

$

37,398

 

$

0

 

$

13,356

 

$

34,960

 

$

40,709

 

$

5,772

 

$

680,021

 

% of base rent

 

 

3.3%

 

 

0.2%

 

 

0.0%

 

 

1.9%

 

 

4.4%

 

 

0.0%

 

 

1.6%

 

 

4.1%

 

 

4.7%

 

 

0.7%

 

 

79.2%

 

Units

 

 

1,993

 

 

78

 

 

0

 

 

1,732

 

 

3,151

 

 

0

 

 

912

 

 

3,587

 

 

5,463

 

 

383

 

 

47,480

 

% of units

 

 

3.1%

 

 

0.1%

 

 

0.0%

 

 

2.7%

 

 

4.9%

 

 

0.0%

 

 

1.4%

 

 

5.5%

 

 

8.4%

 

 

0.6%

 

 

73.3%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Hospitals:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Properties

 

 

0

 

 

0

 

 

0

 

 

0

 

 

0

 

 

0

 

 

0

 

 

0

 

 

0

 

 

1

 

 

30

  

Base rent(1)

 

$

0

 

$

0

 

$

0

 

$

0

 

$

0

 

$

0

 

$

0

 

$

0

 

$

0

 

$

1,979

 

$

88,564

 

% of base rent

 

 

0.0%

 

 

0.0%

 

 

0.0%

 

 

0.0%

 

 

0.0%

 

 

0.0%

 

 

0.0%

 

 

0.0%

 

 

0.0%

 

 

2.2%

 

 

97.8%

 

Beds

 

 

0

 

 

0

 

 

0

 

 

0

 

 

0

 

 

0

 

 

0

 

 

0

 

 

0

 

 

60

 

 

1,957

 

% of beds

 

 

0.0%

 

 

0.0%

 

 

0.0%

 

 

0.0%

 

 

0.0%

 

 

0.0%

 

 

0.0%

 

 

0.0%

 

 

0.0%

 

 

3.0%

 

 

97.0%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Medical office buildings:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Square feet

 

 

648,545

 

 

628,099

 

 

773,210

 

 

1,132,963

 

 

832,602

 

 

836,755

 

 

819,606

 

 

919,190

 

 

1,952,434

 

 

927,007

 

 

2,872,383

  

Base rent(1)

 

$

13,782

 

$

14,057

 

$

15,216

 

$

26,577

 

$

19,060

 

$

16,968

 

$

19,388

 

$

22,292

 

$

39,407

 

$

22,098

 

$

75,656

 

% of base rent

 

 

4.8%

 

 

4.9%

 

 

5.4%

 

 

9.3%

 

 

6.7%

 

 

6.0%

 

 

6.8%

 

 

7.8%

 

 

13.9%

 

 

7.8%

 

 

26.6%

 

Leases

 

 

163

 

 

191

 

 

172

 

 

208

 

 

171

 

 

123

 

 

86

 

 

104

 

 

121

 

 

59

 

 

105

 

% of leases

 

 

10.8%

 

 

12.7%

 

 

11.5%

 

 

13.8%

 

 

11.4%

 

 

8.2%

 

 

5.7%

 

 

6.9%

 

 

8.1%

 

 

3.9%

 

 

7.0%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(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

 

     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.

 

     In August 2012, we entered into a merger agreement with Sunrise Senior Living, Inc. (“Sunrise”). Following the announcement of the merger agreement, complaints were filed in the U.S. District Court for the Eastern District of Virginia and the Chancery Court for the State of Delaware challenging the merger. The complaints challenged the merger on behalf of a putative class of Sunrise public stockholders, and named as defendants Sunrise, its directors and us. The complaints generally alleged that the individual defendants breached their fiduciary duties in connection with the merger and that the entity defendants aided and abetted that breach. The complaint filed in the U.S. District Court for the Eastern District of Virginia additionally alleged that the preliminary proxy statement filed with the Securities and Exchange Commission by Sunrise failed to provide material information in violation of Sections 14(a) and 20(a) of the Exchange Act and Rule 14a-9 promulgated thereunder. The complaints sought, among other things, injunctive relief against the merger, unspecified damages and an award of plaintiffs’ expenses, including attorneys’ fees.  On January 9, 2013, we completed our acquisition of the Sunrise property portfolio. Please see Note 3 to our consolidated financial statements for additional information.

 

     On October 24, 2013, the parties entered into a Stipulation of Settlement and Release that settled the lawsuits subject to the approval of the U.S. District Court for the Eastern District of Virginia and the Chancery Court for the State of Delaware, respectively. On January 24, 2014, the U.S. District Court for the Eastern District of Virginia approved the Stipulation of Settlement and Release and dismissed the lawsuit with prejudice, and, on February 6, 2014, the Chancery Court for the State of Delaware approved the plaintiffs’ voluntarily dismissal of the lawsuit with prejudice.

 

Item 4.  Mine Safety Disclosures

 

None.

42


 

 

PART II

 

Item 5.  Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities

 

There were 4,944 stockholders of record as of January 31, 2014. 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

 

 

  

High

 

Low

 

Paid

2013

  

 

 

 

 

 

 

 

 

 

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 

 

 

  

 

 

 

 

 

 

 

 

2012

  

 

 

 

 

 

 

 

 

 

First Quarter

  

$

 57.66 

 

$

 53.26 

 

$

 0.740 

 

Second Quarter

  

 

 58.34 

 

 

 52.40 

 

 

 0.740 

 

Third Quarter

  

 

 62.80 

 

 

 56.48 

 

 

 0.740 

 

Fourth Quarter

  

 

 61.33 

 

 

 56.88 

 

 

 0.740 

 

Our Board of Directors has approved a new quarterly cash dividend rate of $0.795 per share of common stock per quarter, commencing with the February 2014 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, 2013, 140 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. 2008 equals $100 and dividends are assumed to be reinvested.

 

 

 

 

12/31/08

12/31/09

12/31/10

12/31/11

12/31/12

12/31/13

S & P 500

100.00

126.46

145.51

148.59

172.37

228.19

Health Care REIT, Inc.

100.00

112.86

129.03

156.48

184.98

169.41

FTSE NAREIT Equity

100.00

127.99

163.78

177.36

209.39

214.56

 

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.

 

43


 

 

On October 15, 2013, we issued 116,618 shares of our common stock to a principal of a national medical office partner upon conversion of such principal’s 116,618 shares of our 6% Series H Cumulative Convertible and Redeemable Preferred Stock (the “Series H Preferred Stock”). These shares were issued without registration in reliance upon the federal statutory exemption of Section 4(2) of the Securities Act of 1933, as amended, upon conversion by the principal of his shares of Series H Preferred Stock, which were originally issued as partial consideration for an acquisition by us, in accordance with the terms of the Certificate of Designation for the Series H Preferred Stock.

 

On December 3, 2013, we issued 29,094 shares of our common stock to a principal of a national medical office partner upon exercise of such principal’s stock options. These shares were issued without registration in reliance upon the federal statutory exemption of Section 4(2) of the Securities Act of 1933, as amended, upon exercise by the principal of his stock options, which were originally issued as partial consideration for an acquisition by us, in accordance with the terms of a stock option agreement between the principal and us.

Issuer Purchases of Equity Securities

Period

 

Total Number of Shares Purchased(1)

 

Average Price Paid Per Share

 

Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs(2)

 

Maximum Number of Shares that May Yet Be Purchased Under the Plans or Programs

October 1, 2013 through October 31, 2013

 

 - 

 

$

 - 

 

 

 

 

November 1, 2013 through November 30, 2013

 

 - 

 

 

 - 

 

 

 

 

December 1, 2013 through December 31, 2013

 

 62 

 

 

 53.57 

 

 

 

 

Totals

 

 62 

 

$

 53.57 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(1) During the three months ended December 31, 2013, the company acquired shares of common stock held by employees who tendered owned shares to satisfy tax withholding obligations.

(2) No shares were purchased as part of publicly announced plans or programs.

44


 

 

Item 6.  Selected Financial Data

 

The following selected financial data for the five years ended December 31, 2013 are derived from our audited consolidated financial statements (in thousands, except per share data):

 

 

 

Year Ended December 31,

 

 

 

2009

 

2010

 

2011

 

2012

 

2013

Operating Data

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Revenues(1)

 

$

 425,541 

 

$

 559,491 

 

$

 1,313,182 

 

$

 1,805,044 

 

$

 2,880,608 

Expenses(1)

 

 

 322,929 

 

 

 526,515 

 

 

 1,200,979 

 

 

 1,619,132 

 

 

 2,778,363 

Income from continuing operations before income taxes and income (loss) from unconsolidated entities

 

 

 102,612 

 

 

 32,976 

 

 

 112,203 

 

 

 185,912 

 

 

 102,245 

Income tax expense

 

 

 (168) 

 

 

 (364) 

 

 

 (1,388) 

 

 

 (7,612) 

 

 

 (7,491) 

Income (loss) from unconsolidated entities

 

 

 - 

 

 

 6,673 

 

 

 5,772 

 

 

 2,482 

 

 

 (8,187) 

Income from continuing operations

 

 

 102,444 

 

 

 39,285 

 

 

 116,587 

 

 

 180,782 

 

 

 86,567 

Income from discontinued operations, net(1)

 

 

 90,483 

 

 

 89,599 

 

 

 96,129 

 

 

 114,058 

 

 

 51,713 

Net income

 

 

 192,927 

 

 

 128,884 

 

 

 212,716 

 

 

 294,840 

 

 

 138,280 

Preferred stock dividends

 

 

 22,079 

 

 

 21,645 

 

 

 60,502 

 

 

 69,129 

 

 

 66,336 

Preferred stock redemption charge

 

 

 - 

 

 

 - 

 

 

 - 

 

 

 6,242 

 

 

 - 

Net income (loss) attributable to noncontrolling interests

 

 

 (342) 

 

 

 357 

 

 

 (4,894) 

 

 

 (2,415) 

 

 

 (6,770) 

Net income attributable to common stockholders

 

$

 171,190 

 

$

 106,882 

 

$

 157,108 

 

$

 221,884 

 

$

 78,714 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Other Data

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Average number of common shares outstanding:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

 

 114,207 

 

 

 127,656 

 

 

 173,741 

 

 

 224,343 

 

 

 276,929 

 

Diluted

 

 

 114,612 

 

 

 128,208 

 

 

 174,401 

 

 

 225,953 

 

 

 278,761 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Per Share Data

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Income from continuing operations attributable to common stockholders

 

$

 0.71 

 

$

 0.14 

 

$

 0.35 

 

$

 0.48 

 

$

 0.10 

 

Discontinued operations, net

 

 

 0.79 

 

 

 0.70 

 

 

 0.55 

 

 

 0.51 

 

 

 0.19 

 

Net income attributable to common stockholders *

 

$

 1.50 

 

$

 0.84 

 

$

 0.90 

 

$

 0.99 

 

$

 0.28 

Diluted:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Income from continuing operations attributable to common stockholders

 

$

 0.70 

 

$

 0.13 

 

$

 0.35 

 

$

 0.48 

 

$

 0.10 

 

Discontinued operations, net

 

 

 0.79 

 

 

 0.70 

 

 

 0.55 

 

 

 0.50 

 

 

 0.19 

 

Net income attributable to common stockholders *

 

$

 1.49 

 

$

 0.83 

 

$

 0.90 

 

$

 0.98 

 

$

 0.28 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cash distributions per common share

 

$

 2.72 

 

$

 2.74 

 

$

 2.835 

 

$

 2.96 

 

$

 3.06 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

* 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

 

 

2009

 

 

2010

 

 

2011

 

 

2012

 

 

2013

 

Net real estate investments

 

$

 6,080,620 

 

$

 8,590,833 

 

$

 13,942,350 

 

$

 17,423,009 

 

$

 21,680,221 

 

Total assets

 

 

 6,367,186 

 

 

 9,451,734 

 

 

 14,924,606 

 

 

 19,549,109 

 

 

 23,083,957 

 

Total long-term obligations

 

 

 2,414,022 

 

 

 4,469,736 

 

 

 7,240,752 

 

 

 8,531,899 

 

 

 10,652,014 

 

Total liabilities

 

 

 2,559,735 

 

 

 4,714,081 

 

 

 7,612,309 

 

 

 8,993,998 

 

 

 11,292,587 

 

Total preferred stock

 

 

 288,683 

 

 

 291,667 

 

 

 1,010,417 

 

 

 1,022,917 

 

 

 1,017,361 

 

Total equity

 

 

 3,807,451 

 

 

 4,733,100 

 

 

 7,278,647 

 

 

 10,520,519 

 

 

 11,756,331 

45


 

Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations

 

 

 

EXECUTIVE SUMMARY

 

 

 

 

     Company Overview

     Business Strategy

     Capital Market Outlook

     Key Transactions in 2013

     Key Performance Indicators, Trends and Uncertainties

     Corporate Governance

47

47

48

48

49

51

 

 

 

 

LIQUIDITY AND CAPITAL RESOURCES

 

 

 

 

     Sources and Uses of Cash

     Off-Balance Sheet Arrangements

     Contractual Obligations

     Capital Structure

52

52

53

54

 

 

 

 

RESULTS OF OPERATIONS

 

 

 

 

     Summary

     Seniors Housing Triple-net

     Senior Housing Operating

     Medical Facilities

     Non-Segment/Corporate

55

56

58

60

63

 

 

 

 

NON-GAAP FINANCIAL MEASURES & OTHER

 

 

 

 

     FFO Reconciliation

     Adjusted EBITDA Reconciliation

     NOI Reconciliation

65

66

67

 

     Health Care Industry

68

 

     Critical Accounting Policies

72

 

 

 

 

 

 

 

 

  

46


 

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, skilled nursing/post-acute 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, 2013:

  

 

Investments

 

Percentage of

 

Number of

 

Type of Property

(in thousands)

 

Investments

 

Properties

 

Seniors housing triple-net

$

 8,916,171 

 

41.2%

 

 620 

 

Seniors housing operating(1)

 

 8,421,098 

 

38.8%

 

 279 

 

Medical facilities(2)

 

 4,342,952 

 

20.0%

 

 243 

 

Totals

$

 21,680,221 

 

100.0%

 

 1,142 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(1) Excludes 44 properties with an investment amount of $389,418,000 which relates to our share of investments in unconsolidated entities with Chartwell and Sunrise. Please see Note 7 to our consolidated financial statements for additional information.

(2) Excludes 13 properties with an investment amount of $364,643,000 which relates to our share of investments in unconsolidated entities with Forest City and a strategic medical partnership. Please see Note 7 to our consolidated financial statements for additional information.

 

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.

47


 

Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations

 

 

     For the year ended December 31, 2013, rental income, resident fees and services and interest and other income represented 43%, 56%, and 1% 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 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 line of credit arrangement, 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 line of credit arrangement, 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 line of credit arrangement, 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 line of credit arrangement. At December 31, 2013, we had $158.8 million of cash and cash equivalents, $72.8 million of restricted cash and $2.1 billion of available borrowing capacity under our primary unsecured line of credit arrangement. 

  

Capital Market Outlook

     The capital markets remain supportive of our investment strategy. For the year ended December 31, 2013, we raised over $3.7 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 line of credit arrangement, supported $5.7 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 2013

     Capital. In January 2013, we closed a $2.75 billion unsecured line of credit arrangement consisting of a $2.25 billion revolver and a $500 million term loan.  The facility replaced our existing $2.0 billion unsecured line of credit arrangement. The revolver matures on March 31, 2017, but can be extended for an additional year at our option.  The term loan matures on March 31, 2016, but can be extended up to two years at our option.  The revolver bears interest at LIBOR plus 117.5 basis points and has an annual facility fee of 22.5 basis points.  The term loan, which was fully drawn as of December 31, 2013, bears interest at LIBOR plus 135 basis points. We have an option to upsize the facility by up to an additional $1.0 billion through an accordion feature, allowing for aggregate commitments of up to $3.75 billion.  The facility also allows us to borrow up to $500 million in certain alternative currencies. In May 2013, we completed the public issuance of 23 million shares of common stock for approximately $1.7 billion of gross proceeds.  In October 2013, we issued $400 million of 4.5% 10-year senior unsecured notes, generating approximately $393 million of net proceeds. In November 2013, we issued £550 million of 4.8% 15-year senior unsecured notes, generating approximately $868 million of net proceeds. In addition, for the year ended December 31, 2013, we raised $215 million through our dividend reinvestment program.

     Investments. We completed $5.7 billion of gross investments during the year, including 73% from existing relationships.  The following summarizes investments made during the year ended December 31, 2013 (dollars in thousands):

48


 

Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations

 

 

 

 

Properties

 

Investment Amount(1)

 

Capitalization Rates(2)

 

 

Book Amount(3)

 

Acquisitions/JVs:

 

 

 

 

 

 

 

 

 

Seniors housing triple-net

 19 

$

 321,147 

 

7.0%

 

$

 321,195 

 

Seniors housing operating

 167 

 

 4,684,917 

 

6.6%

 

 

 5,290,392 

 

Medical facilities

 13 

 

 270,690 

 

7.6%

 

 

 276,087 

 

Total acquisitions/JVs

 199 

 

 5,276,754 

 

6.7%

 

 

 5,887,674 

 

Construction in progress

 

 

 273,012 

 

 

 

 

 273,012 

 

Loan advances(4)

 

 

 120,909 

 

 

 

 

 120,909 

 

Total

 

$

 5,670,675 

 

 

 

$

 6,281,595 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(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, 6 and 7 to our consolidated financial statements for additional information.

(4) Excludes $580,834,000 in advances under the Sunrise loan which was acquired upon merger consummation on January 9, 2013. See Note 3 to our consolidated financial statements for additional information.

 

     Dispositions. We completed $519 million of dispositions during the year, generating $579 million in proceeds and $49 million in net gains.  The following summarizes dispositions made during the year ended December 31, 2013 (dollars in thousands):

 

Properties

 

Proceeds(1)

 

Capitalization Rates(2)

 

 

Book Amount(3)

 

Property sales:

 

 

 

 

 

 

 

 

 

Seniors housing triple-net

 24 

$

 242,385 

 

9.8%

 

$

 189,572 

 

Medical facilities

 24 

 

 255,692(4)

 

6.4%

 

 

 259,367 

 

Total property sales

 48 

 

 498,077 

 

8.1%

 

 

 448,939 

 

Loan payoffs(5)

 

 

 69,596 

 

 

 

 

 69,596 

 

Total dispositions

 

$

 567,673 

 

 

 

$

 518,535 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(1) Represents proceeds received upon disposition including any seller financing. See Notes 5 and 6 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 disposition proceeds.

(3) Represents carrying value of assets at time of disposition.

(4) Includes non-cash proceeds attributable to an asset swap that are excluded from the statement of cash flows. See Note 5 to our consolidated financial statements for additional information.

(5) Excludes $580,834,000 for the Sunrise loan which was acquired upon merger consummation on January 9, 2013.

 

     Dividends. Our Board of Directors increased the annual cash dividend to $3.18 per common share ($0.795 per share quarterly), as compared to $3.06 per common share for 2013, beginning in February 2014.  The dividend declared for the quarter ended December 31, 2013  represents the 171st 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

49


 

Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations

 

 

companies. The following table reflects the recent historical trends of our operating performance measures for the periods presented (in thousands):

 

 

 

 

Year Ended December 31,

 

 

 

 

2011

 

2012

 

2013

 

 

 

 

 

 

 

 

 

 

 

 

Net income attributable to common stockholders

 

$

 157,108 

 

$

 221,884 

 

$

 78,714 

Funds from operations

 

 

 524,902 

 

 

 697,557 

 

 

 924,884 

Net operating income from continuing operations

 

 

 938,118 

 

 

 1,237,055 

 

 

 1,673,795 

Same store cash net operating income

 

 

 524,995 

 

 

 539,554 

 

 

 547,340 

 

     Credit Strength. We measure our credit strength both in terms of leverage ratios and coverage ratios. The leverage ratios indicate how much of our balance sheet capitalization is related to long-term debt. The coverage ratios indicate our ability to service interest and fixed charges (interest, secured debt principal amortization and preferred dividends). We expect to maintain capitalization ratios and coverage ratios sufficient to maintain compliance with our debt covenants. The coverage ratios are based on adjusted earnings before interest, taxes, depreciation and amortization (“Adjusted EBITDA”) which is discussed in further detail, and reconciled to net income, below in “Non-GAAP Financial Measures.” Leverage ratios and coverage ratios are widely used by investors, analysts and rating agencies in the valuation, comparison, investment recommendations and rating of companies. The following table reflects the recent historical trends for our credit strength measures for the periods presented:

 

 

 

 

Year Ended December 31,

 

 

 

 

2011

 

2012

 

2013

 

 

 

 

 

 

 

 

 

Debt to book capitalization ratio

 

50%

 

45%

 

48%

Debt to undepreciated book capitalization ratio

 

46%

 

41%

 

43%

Debt to market capitalization ratio

 

38%

 

33%

 

39%

 

 

 

 

 

 

 

 

 

Adjusted interest coverage ratio

 

3.02x

 

3.31x

 

3.23x

Adjusted fixed charge coverage ratio

 

2.37x

 

2.58x

 

2.56x

 

     Concentration Risk. We evaluate our concentration risk in terms of asset mix, 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. Asset mix measures the portion of our investments that are real property. In order to qualify as an equity REIT, at least 75% of our real estate investments must be real property whereby each property, which includes the land, buildings, improvements, intangibles and related rights, is owned by us. 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:

50


 

Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations

 

 

 

 

 

 

 

December 31,

 

 

 

 

2011

 

2012

 

2013

 

 

 

 

 

 

 

 

 

Asset mix:

 

 

 

 

 

 

 

Real property

 

95%

 

91%

 

95%

 

Real estate loans receivable

 

2%

 

5%

 

1%

 

Investments in unconsolidated entities

 

3%

 

4%

 

4%

 

 

 

 

 

 

 

 

 

Investment mix:(1)

 

 

 

 

 

 

 

Seniors housing triple-net

 

54%

 

47%

 

41%

 

Seniors housing operating

 

20%

 

28%

 

39%

 

Medical facilities

 

26%

 

25%

 

20%

 

 

 

 

 

 

 

 

 

Relationship mix:(1)

 

 

 

 

 

 

 

Sunrise Senior Living

 

 

 

6%

 

19%

 

Genesis HealthCare

 

18%

 

15%

 

12%

 

Revera

 

 

 

 

 

5%

 

Benchmark Senior Living

 

6%

 

5%

 

4%

 

Belmont Village

 

 

 

5%

 

4%

 

Merrill Gardens

 

8%

 

6%

 

 

 

Brandywine Senior Living

 

5%

 

 

 

 

 

Senior Living Communities

 

4%

 

 

 

 

 

Remaining customers

 

59%

 

63%

 

56%

 

 

 

 

 

 

 

 

 

Geographic mix:(1)

 

 

 

 

 

 

 

California

 

10%

 

9%

 

10%

 

New Jersey

 

10%

 

9%

 

8%

 

England

 

 

 

 

 

8%

 

Texas

 

7%

 

9%

 

7%

 

Florida

 

7%

 

7%

 

5%

 

Pennsylvania

 

 

 

5%

 

 

 

Massachusetts

 

6%

 

 

 

 

 

Remaining

 

60%

 

61%

 

62%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(1) Excludes our share of investments in unconsolidated entities.

 

 

 

 

 

 

 

     We evaluate our key performance indicators in conjunction with current expectations to determine if historical trends are indicative of future results. Our expected results may not be achieved and actual results may differ materially from our expectations. Factors that may cause actual results to differ from expected results are described in more detail in “Item 1 — Business — Cautionary Statement Regarding Forward-Looking Statements” and “Item 1A — Risk Factors” and other sections of this Annual Report on Form 10-K. Management regularly monitors economic and other factors to develop strategic and tactical plans designed to improve performance and maximize our competitive position. Our ability to achieve our financial objectives is dependent upon our ability to effectively execute these plans and to appropriately respond to emerging economic and company-specific trends. Please refer to “Item 1 — Business,” “Item 1A — Risk Factors” and “Item 7 — Management’s Discussion and Analysis of Financial Condition and Results of Operations” in this Annual Report on Form 10-K for further discussion of these risk factors.

  

Corporate Governance

     Maintaining investor confidence and trust is important in today’s business environment. Our Board of Directors and management are strongly committed to policies and procedures that reflect the highest level of ethical business practices. Our corporate governance guidelines provide the framework for our business operations and emphasize our commitment to increase stockholder value while meeting all applicable legal requirements. These guidelines meet the listing standards adopted by the New York Stock Exchange and are available on the Internet at www.hcreit.com.

51


 

Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations

 

 

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 line of credit arrangement, 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, 31

 

December, 31

 

 

 

 

 

 

December, 31

 

 

 

 

 

 

 

 

 

 

 

 

2011

 

2012

 

$

 

%

 

2013

 

$

 

%

 

$

 

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Beginning cash and cash equivalents

 

$

 131,570 

 

$

 163,482 

 

$

 31,912 

 

24%

 

$

 1,033,764 

 

$

 870,282 

 

532%

 

$

 902,194 

 

686%

Cash provided from (used in):

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

   Operating activities

 

 

 588,224 

 

 

 818,133 

 

 

 229,909 

 

39%

 

 

 988,497 

 

 

 170,364 

 

21%

 

 

 400,273 

 

68%

   Investing activities

 

 

 (4,520,129) 

 

 

 (3,592,979) 

 

 

 927,150 

 

-21%

 

 

 (3,531,593) 

 

 

 61,386 

 

-2%

 

 

 988,536 

 

-22%

   Financing activities

 

 

 3,963,817 

 

 

 3,645,128 

 

 

 (318,689) 

 

-8%

 

 

 1,667,670 

 

 

 (1,977,458) 

 

-54%

 

 

 (2,296,147) 

 

-58%

Effect of foreign currency translation on cash and cash equivalents

 

 

 0 

 

 

 0 

 

 

 0 

 

n/a

 

 

 442 

 

 

 442 

 

n/a

 

 

 442 

 

n/a

Ending cash and cash equivalents

 

$

 163,482 

 

$

 1,033,764 

 

$

 870,282 

 

532%

 

$

 158,780 

 

$

 (874,984) 

 

-85%

 

$

 (4,702) 

 

-3%

 

     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, 2011, 2012 and 2013, 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 2013.”  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,

 

 

 

 

 

 

 

 

 

 

 

 

2011

 

2012

 

$

 

%

 

2013

 

$

 

%

 

$

 

%

New development

 

$

 301,604 

 

$

 286,410 

 

$

 (15,194) 

 

-5%

 

$

 247,560 

 

$

 (38,850) 

 

-14%

 

$

 (54,044) 

 

-18%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Recurring capital expenditures, tenant improvements and lease commissions

 

 

 36,073 

 

 

 45,175 

 

 

 9,102 

 

25%

 

 

 60,984 

 

 

 15,809 

 

35%

 

 

 24,911 

 

69%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Renovations, redevelopments and other capital improvements

 

 

 53,174 

 

 

 90,275 

 

 

 37,101 

 

70%

 

 

 74,848 

 

 

 (15,427) 

 

-17%

 

 

 21,674 

 

41%

Total

 

$

 390,851 

 

$

 421,860 

 

$

 31,009 

 

8%

 

$

 383,392 

 

$

 (38,468) 

 

-9%

 

$

 (7,459) 

 

-2%

 

     The decrease in new development is primarily due to a decline in the number of properties under construction (resulting from completed properties being placed into service), which is partially offset by new construction starts.  The increase in recurring capital expenditures, tenant improvements and lease commissions is primarily due to acquisitions. 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.  Generally, these expenditures have increased as a result of acquisitions. The decrease during the year ended December 31, 2013 is attributable to a lower volume of acquisitions in our medical facilities segment.

     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 2013.”  Please refer to Notes 9, 10 and 13 of our consolidated financial statements for additional information.

 

Off-Balance Sheet Arrangements

52


 

Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations

 

 

     At December 31, 2013, 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, 2013, we had five 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, 2013 (in thousands):

  

 

 

Payments Due by Period

Contractual Obligations

 

Total

 

2014

 

2015-2016

 

2017-2018

 

Thereafter

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Unsecured line of credit arrangements

 

$

 130,000 

 

$

 0 

 

$

 0 

 

$

 130,000 

 

$

 0 

Senior unsecured notes and term loans(1)

 

 

 7,421,707 

 

 

 0 

 

 

 1,185,029 

 

 

 1,400,000 

 

 

 4,836,678 

Secured debt(1)

 

 

 3,414,103 

 

 

 401,847 

 

 

 946,795 

 

 

 834,334 

 

 

 1,231,127 

Contractual interest obligations

 

 

 4,211,314 

 

 

 487,530 

 

 

 874,794 

 

 

 672,428 

 

 

 2,176,562 

Capital lease obligations

 

 

 117,118 

 

 

 5,392 

 

 

 17,889 

 

 

 9,411 

 

 

 84,426 

Operating lease obligations

 

 

 881,694 

 

 

 14,117 

 

 

 28,227 

 

 

 28,510 

 

 

 810,840 

Purchase obligations

 

 

 308,299 

 

 

 162,049 

 

 

 146,250 

 

 

 0 

 

 

 0 

Other long-term liabilities

 

 

 7,673 

 

 

 0 

 

 

 0 

 

 

 3,069 

 

 

 4,604 

Total contractual obligations

 

$

 16,491,908 

 

$

 1,070,935 

 

$

 3,198,984 

 

$

 3,077,752 

 

$

 9,144,237 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(1) Amounts represent principal amounts due and do not reflect unamortized premiums/discounts or other fair value adjustments as reflected on the balance sheet.

 

     At December 31, 2013, we had an unsecured line of credit arrangement with an aggregate commitment amount of $2,250,000,000.  See Note 9 to our consolidated financial statements for additional information.  Total contractual interest obligations on this arrangement totaled $5,662,000, using the interest rate in place at that date.

 

     We have $5,775,108,000 of senior unsecured notes principal outstanding with interest payable semi-annually at fixed annual interest rates, ranging from 2.25% to 6.5%.  Of these notes, a total of $275,108,000 are convertible notes that also contain put features.  In addition, during the year ended December 31, 2013, we issued £550,000,000 (approximately $911,570,000 based on the Sterling/U.S. Dollar exchange rate on December 31, 2013) of 4.80% senior unsecured notes due 2028 generating net proceeds of $891,418,000.  We also entered into a $500,000,000 unsecured term loan during the year ended December 31, 2013 that matures on March 16, 2016 and can be extended for two additional years at our option.  Furthermore, we have a $250,000,000 Canadian denominated unsecured term loan (approximately $235,029,000 based on the Canadian/U.S. Dollar exchange rate on December 31, 2013.)  The loan matures on July 27, 2015 and includes an option to extend for an additional year at our discretion.  Please see Note 10 to our consolidated financial statements for additional information.  Total contractual interest obligations on all senior unsecured notes and the term loans totaled $3,260,135,000 at December 31, 2013.

     We have consolidated secured debt with total outstanding principal of $3,010,711,000, collateralized by owned properties, with annual interest rates ranging from 1.0% to 8.0%, payable monthly. The carrying values of the properties securing the debt totaled $6,243,475,000 at December 31, 2013. Total contractual interest obligations on consolidated secured debt totaled $880,164,000 at December 31, 2013. Our share of non-recourse secured debt associated with unconsolidated entities (as reflected in the contractual obligations table above) is $403,392,000 at December 31, 2013.  Our share of contractual interest obligations on our unconsolidated entities’ secured debt is $65,353,000 at December 31, 2013.

     At December 31, 2013, we had operating lease obligations of $881,694,000 relating primarily to ground leases at certain of our properties and office space leases and capital lease obligations of $117,118,000 relating to certain lease investment properties that contain bargain purchase options.

     Purchase obligations include unfunded construction commitments and contingent purchase obligations. At December 31, 2013, we had outstanding construction financings of $141,085,000 for leased properties and were committed to providing additional financing of approximately $243,083,000 to complete construction. At December 31, 2013, we had contingent purchase obligations totaling $65,217,000. These contingent purchase obligations relate to unfunded capital improvement obligations and contingent obligations on acquisitions. Upon funding, amounts due from the tenant are increased to reflect the additional investment in the property.

     Other long-term liabilities relate to our Supplemental Executive Retirement Plan, which is discussed in Note 19 to our consolidated financial statements.

53


 

Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations

 

 

  

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, 2013, 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 line of credit arrangement, 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, 2013 is as follows:

 

 

Per Agreement

 

 

Covenant

 

Unsecured Line of Credit(1)

 

Senior Unsecured Notes

 

Actual At December 31, 2013

Total Indebtedness to Book Capitalization Ratio maximum:

 

60%

 

n/a

 

48%

Secured Indebtedness to Total Assets Ratio maximum:

 

30%

 

40%

 

13%

Total Indebtedness to Total Assets maximum:

 

n/a

 

60%

 

46%

Unsecured Debt to Unencumbered Assets maximum:

 

60%

 

n/a

 

42%

Adjusted Interest Coverage Ratio minimum:

 

n/a

 

1.50x

 

3.23x

Adjusted Fixed Charge Coverage minimum:

 

1.50x

 

n/a

 

2.56x

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(1) Canadian denominated term loan covenants are the same as those contained in our primary unsecured line of credit agreement.

     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, 2014, 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, 2014, 7,084,703 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, 2014, 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 unsecured line of credit arrangements.

54


 

Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations

 

 

Results of Operations

     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,

 

 

 

 

 

 

 

 

 

 

 

 

 

2011

 

2012

 

Amount

 

%

 

2013

 

Amount

 

%

 

Amount

 

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income attributable to common stockholders

 

$

 157,108 

 

$

 221,884 

 

$

 64,776 

 

41%

 

$

 78,714 

 

$

 (143,170) 

 

-65%

 

$

 (78,394) 

 

-50%

Funds from operations

 

 

 524,902 

 

 

 697,557 

 

 

 172,655 

 

33%

 

 

 924,884 

 

 

 227,327 

 

33%

 

 

 399,982 

 

76%

Adjusted EBITDA

 

 

 971,525 

 

 

 1,264,091 

 

 

 292,566 

 

30%

 

 

 1,503,715 

 

 

 239,624 

 

19%

 

 

 532,190 

 

55%

Net operating income from continuing operations

 

 

 938,118 

 

 

 1,237,055 

 

 

 298,937 

 

32%

 

 

 1,673,795 

 

 

 436,740 

 

35%

 

 

 735,677 

 

78%

Same store cash NOI

 

 

 524,995 

 

 

 539,554 

 

 

 14,559 

 

3%

 

 

 547,340 

 

 

 7,786 

 

1%

 

 

 22,345 

 

4%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Per share data (fully diluted):

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income attributable to common stockholders

 

$

 0.90 

 

$

 0.98 

 

$

 0.08 

 

9%

 

$

 0.28 

 

$

 (0.70) 

 

-71%

 

$

 (0.62) 

 

-69%

 

Funds from operations

 

 

 3.01 

 

 

 3.09 

 

 

 0.08 

 

3%

 

 

 3.32 

 

 

 0.23 

 

7%

 

 

 0.31 

 

10%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Adjusted interest coverage ratio

 

 

3.02x

 

 

3.31x

 

 

0.29x

 

10%

 

 

3.19x

 

 

-0.12x

 

-4%

 

 

0.17x

 

6%

Adjusted fixed charge coverage ratio

 

 

2.37x

 

 

2.58x

 

 

0.21x

 

9%

 

 

2.52x

 

 

-0.06x

 

-2%

 

 

0.15x

 

6%

 

     The following table represents the changes in outstanding common stock for the period from January 1, 2011 to December 31, 2013 (in thousands):

 

 

 

Year Ended

 

 

 

 

 

December 31, 2011

 

December 31, 2012

 

December 31, 2013

 

Totals

Beginning balance

 

 147,097 

 

 192,275 

 

 260,374 

 

 147,097 

Public offerings

 

 41,400 

 

 64,400 

 

 23,000 

 

 128,800 

Dividend reinvestment plan issuances

 

 2,534 

 

 2,136 

 

 3,430 

 

 8,100 

Equity shelf program issuances

 

 849 

 

 - 

 

 - 

 

 849 

Senior note conversions

 

 - 

 

 1,040 

 

 988 

 

 2,028 

Preferred stock conversions

 

 - 

 

 - 

 

 117 

 

 117 

Issuances in acquisitions of noncontrolling interests

 

 - 

 

 - 

 

 1,109 

 

 1,109 

Option exercises

 

 232 

 

 341 

 

 214 

 

 787 

Other, net

 

 163 

 

 182 

 

 332 

 

 677 

Ending balance

 

 192,275 

 

 260,374 

 

 289,564 

 

 289,564 

 

 

 

 

 

 

 

 

 

 

Average number of shares outstanding:

 

 

 

 

 

 

 

Basic

 

 173,741 

 

 224,343 

 

 276,929 

 

 

 

Diluted

 

 174,401 

 

 225,953 

 

 278,761 

 

 

 

     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.

55


 

Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations

 

 

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,

 

 

 

 

 

 

 

 

 

 

 

 

 

 

2011

 

2012

 

$

 

%

 

2013

 

$

 

%

 

$

 

%

SSCNOI(1)

 

 $ 

 306,957 

 

 $ 

 313,698 

 

 $ 

 6,741 

 

2%

 

 $ 

 319,469 

 

 $ 

 5,771 

 

2%

 

 $ 

 12,512 

 

4%

Non-cash NOI attributable to same store properties(1)

 

 

 10,736 

 

 

 7,079 

 

 

 (3,657) 

 

-34%

 

 

 8,987 

 

 

 1,908 

 

27%

 

 

 (1,749) 

 

-16%

NOI attributable to non same store properties(2)

 

 

 260,577 

 

 

 390,111 

 

 

 129,534 

 

50%

 

 

 475,274 

 

 

 85,163 

 

22%

 

 

 214,697 

 

82%

NOI

 

 $ 

 578,270 

 

 $ 

 710,888 

 

 $ 

 132,618 

 

23%

 

 $ 

 803,730 

 

 $ 

 92,842 

 

13%

 

 $ 

 225,460 

 

39%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(1) Due to increases in cash and non-cash revenues (described below) related to 279 same store properties.

(2) Primarily due to acquisitions of properties, which totaled 184, 51 and 19 for the years ended December 31, 2011, 2012 and 2013, respectively, the transition of 38 properties from our seniors housing operating segment on September 1, 2013 and conversions of construction projects into revenue-generating properties, which totaled seven, 11 and eight for the years ended December 31, 2011, 2012 and 2013, respectively.

 

    The following is a summary of our results of operations 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,

 

 

 

 

 

 

 

 

 

 

 

 

 

 

2011

 

2012

 

$

 

%

 

2013

 

$

 

%

 

$

 

%

Revenues:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Rental income

 

$

 537,581 

 

 $ 

 684,097 

 

 $ 

 146,516 

 

27%

 

 $ 

 780,785 

 

 $ 

 96,688 

 

14%

 

 $ 

 243,204 

 

45%

 

Interest income

 

 

 34,068 

 

 

 24,380 

 

 

 (9,688) 

 

-28%

 

 

 21,512 

 

 

 (2,868) 

 

-12%

 

 

 (12,556) 

 

-37%

 

Other income

 

 

 6,620 

 

 

 2,412 

 

 

 (4,208) 

 

-64%

 

 

 1,434 

 

 

 (978) 

 

-41%

 

 

 (5,186) 

 

-78%

 

 

Net operating income from continuing operations (NOI)

 

 

 578,269 

 

 

 710,889 

 

 

 132,620 

 

23%

 

 

 803,731 

 

 

 92,842 

 

13%

 

 

 225,462 

 

39%

Expenses:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest expense

 

 

 (2,802) 

 

 

 1,745 

 

 

 4,547 

 

n/a

 

 

 23,322 

 

 

 21,577 

 

1237%

 

 

 26,124 

 

-932%

 

Loss (gain) on derivatives, net

 

 

 - 

 

 

 96 

 

 

 96 

 

n/a

 

 

 4,877 

 

 

 4,781 

 

4980%

 

 

 4,877 

 

n/a

 

Depreciation and amortization

 

 

 155,797 

 

 

 200,899 

 

 

 45,102 

 

29%

 

 

 228,523 

 

 

 27,624 

 

14%

 

 

 72,726 

 

47%

 

Transaction costs

 

 

 27,993 

 

 

 35,705 

 

 

 7,712 

 

28%

 

 

 24,350 

 

 

 (11,355) 

 

-32%

 

 

 (3,643) 

 

-13%

 

Loss (gain) on extinguishment of debt, net

 

 

 - 

 

 

 2,405 

 

 

 2,405 

 

n/a

 

 

 40 

 

 

 (2,365) 

 

-98%

 

 

 40 

 

n/a

 

Provision for loan losses

 

 

 - 

 

 

 27,008 

 

 

 27,008 

 

n/a

 

 

 2,110 

 

 

 (24,898) 

 

-92%

 

 

 2,110 

 

n/a

 

 

 

 

 

 180,988 

 

 

 267,858 

 

 

 86,870 

 

48%

 

 

 283,222 

 

 

 15,364 

 

6%

 

 

 102,234 

 

56%

Income from continuing operations before income taxes and income (loss) from unconsolidated entities

 

 

 397,281 

 

 

 443,031 

 

 

 45,750 

 

12%

 

 

 520,509 

 

 

 77,478 

 

17%

 

 

 123,228 

 

31%

Income tax expense

 

 

 (143) 

 

 

 (2,852) 

 

 

 (2,709) 

 

1894%

 

 

 (1,606) 

 

 

 1,246 

 

-44%

 

 

 (1,463) 

 

1023%

Income (loss) from unconsolidated entities

 

 

 (9) 

 

 

 (33) 

 

 

 (24) 

 

267%

 

 

 5,035 

 

 

 5,068 

 

-15358%

 

 

 5,044 

 

-56044%

Income from continuing operations

 

 

 397,129 

 

 

 440,146 

 

 

 43,017 

 

11%

 

 

 523,938 

 

 

 83,792 

 

19%

 

 

 126,809 

 

32%

Discontinued operations:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Gain (loss) on sales of properties, net

 

 

 59,108 

 

 

 116,838 

 

 

 57,730 

 

98%

 

 

 52,813 

 

 

 (64,025) 

 

-55%

 

 

 (6,295) 

 

-11%

 

Impairment of assets

 

 

 (1,103) 

 

 

 (14,699) 

 

 

 (13,596) 

 

1233%

 

 

 - 

 

 

 14,699 

 

-100%

 

 

 1,103 

 

-100%

 

Income from discontinued operations, net

 

 

 44,114 

 

 

 38,806 

 

 

(5,308)

 

-12%

 

 

 1,380 

 

 

(37,426)

 

-96%

 

 

(42,734)

 

-97%

 

Discontinued operations, net

 

 

 102,119 

 

 

 140,945 

 

 

 38,826 

 

38%

 

 

 54,193 

 

 

 (86,752) 

 

-62%

 

 

 (47,926) 

 

-47%

Net income

 

 

 499,248 

 

 

 581,091 

 

 

 81,843 

 

16%

 

 

 578,131 

 

 

 (2,960) 

 

-1%

 

 

 78,883 

 

16%

Less: Net income attributable to noncontrolling interests

 

 

 218 

 

 

 429 

 

 

 211 

 

97%

 

 

 1,476 

 

 

 1,047 

 

244%

 

 

 1,258 

 

577%

Net income attributable to common stockholders

 

$

 499,030 

 

$

 580,662 

 

$

 81,632 

 

16%

 

$

 576,655 

 

$

 (4,007) 

 

-1%

 

$

 77,625 

 

16%

 

56


 

Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations

 

 

The increase in rental income is primarily attributable to the acquisitions of new properties, 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, 2013, we had no lease renewals but we had nine leases with rental rate increasers ranging from 0.08% to 0.30% in our seniors housing triple-net portfolio.  The decrease in interest income is attributable to loan payoffs (see Note 6 to our consolidated financial statements for additional information).

During the year ended December 31, 2013, we completed eight seniors housing triple-net construction projects representing $133,181,000 or $171,403 per bed/unit plus expansion projects totaling $26,395,000. The following is a summary of seniors housing triple-net construction projects pending as of December 31, 2013 (dollars in thousands):

 

 

 

 

 

 

 

 

 

 

 

Location

 

Units/Beds

 

 

Commitment

 

 

Balance

 

Est. Completion

The Villages, FL

 

 45 

 

$

 8,650 

 

$

 8,284 

 

1Q14

Moorestown, NJ

 

 124 

 

 

 31,500 

 

 

 24,808 

 

2Q14

Gambrills, MD

 

 110 

 

 

 19,700 

 

 

 15,711 

 

2Q14

Burleson, TX

 

 106 

 

 

 13,900 

 

 

 6,530 

 

3Q14

Frederick, MD

 

 130 

 

 

 19,000 

 

 

 7,036 

 

4Q14

Upper Providence, PA

 

 96 

 

 

 29,030 

 

 

 6,039 

 

4Q14

Piscataway, NJ

 

 124 

 

 

 30,600 

 

 

 10,358 

 

1Q15

Haddonfield, NJ

 

 52 

 

 

 18,815 

 

 

 2,968 

 

1Q15

Mahwah, NJ

 

 96 

 

 

 29,045 

 

 

 2,441 

 

1Q15

Total

 

 883 

 

$

 191,590 

 

$

 84,175 

 

 

 

     Total interest expense for the years ended December 31, 2013, 2012 and 2011 represents $25,394,000, $13,572,000  and  $15,296,000, respectively, of secured debt interest expense offset by interest allocated to discontinued operations in the amounts of $2,072,000, $11,827,000 and $18,098,000 for the years ended December 31, 2013, 2012 and 2011, respectively.  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, 2011

 

December 31, 2012

 

December 31, 2013

 

 

 

 

 

Weighted Avg.

 

 

 

 

Weighted Avg.

 

 

 

 

Weighted Avg.

 

 

Amount

 

Interest Rate

 

Amount

 

Interest Rate

 

Amount

 

Interest Rate

Beginning balance

 

$

 172,862 

 

5.265%

 

$

 259,000 

 

5.105%

 

$

 218,741 

 

5.393%

Debt transitioned

 

 

 - 

 

0.000%

 

 

 - 

 

0.000%

 

 

 367,997 

 

5.298%

Debt issued

 

 

 - 

 

0.000%

 

 

 9,387 

 

4.080%

 

 

 13,800 

 

5.480%

Debt assumed

 

 

 90,120 

 

4.819%

 

 

 83,002 

 

5.304%

 

 

 9,578 

 

5.582%

Debt extinguished

 

 

 - 

 

0.000%

 

 

 (128,818) 

 

4.743%

 

 

 (16,482) 

 

3.304%

Principal payments

 

 

 (3,982) 

 

5.556%

 

 

 (3,830) 

 

5.556%

 

 

 (6,498) 

 

5.698%

Ending balance

 

$

 259,000 

 

5.105%

 

$

 218,741 

 

5.393%

 

$

 587,136 

 

5.394%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Monthly averages

 

$

 234,392 

 

5.141%

 

$

 216,314 

 

5.254%

 

$

 339,129 

 

5.394%

 

In connection with secured debt extinguishments, we recognized losses of $2,405,000 and $40,000 during the years ended December 31, 2012 and 2013, respectively.  The decrease in loss on debt extinguishment is attributable to the decreased volume of debt payoffs.  Derivative losses during the year ended December 31, 2013 were incurred in conjunction with certain foreign currency forward exchange contracts related to properties acquired in the United Kingdom. Please refer to Note 11 to our consolidated financial statements for further discussion.

57


 

Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations

 

 

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.

Changes in gains on sales of properties are related to property sales which totaled 39, 73 and 24 for the years ended December 31, 2011, 2012 and 2013, respectively.  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, 2013 as discontinued operations for the periods presented (dollars in thousands):

 

 

 

 

Year Ended December 31,

 

 

 

2011

 

2012

 

2013

 

 

 

 

 

 

 

 

 

 

 

Rental income

 

$

 84,736 

 

$

 63,984 

 

$

 7,889 

Expenses:

 

 

 

 

 

 

 

 

 

 

Interest expense

 

 

 18,098 

 

 

 11,827 

 

 

 2,072 

 

Provision for depreciation

 

 

 22,524 

 

 

 13,351 

 

 

 4,437 

Income (loss) from discontinued operations, net

 

$

 44,114 

 

$

 38,806 

 

$

 1,380 

 

     We did not record any provision for loan loss or have any loan write-offs for seniors housing triple-net investments during the year ended December 31, 2011. During the year ended December 31, 2012, we wrote off one loan totaling $27,008,000, which was attributable to a loan related to an entrance fee community.  During the year ended December 31, 2013, we wrote off one loan totaling $2,110,000, which was attributable to one loan related to an active adult community.  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 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 or loss 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,

 

 

 

 

 

 

 

 

 

 

 

 

 

 

2011

 

2012

 

$

 

%

 

2013

 

$

 

%

 

$

 

%

SSCNOI(1)

 

 $ 

 33,763 

 

 $ 

 39,111 

 

 $ 

 5,348 

 

16%

 

 $ 

 40,953 

 

 $ 

 1,842 

 

5%

 

 $ 

 7,190 

 

21%

NOI attributable to non same store properties(2)

 

 

 108,180 

 

 

 192,913 

 

 

 84,733 

 

78%

 

 

 487,210 

 

 

 294,297 

 

153%

 

 

 379,030 

 

350%

NOI

 

 $ 

 141,943 

 

 $ 

 232,024 

 

 $ 

 90,081 

 

63%

 

 $ 

 528,163 

 

 $ 

 296,139 

 

128%

 

 $ 

 386,220 

 

272%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(1) Due to increases in cash revenues (described below) related to 27 same store properties.

(2) Primarily due to acquisitions of properties, which totaled 58, 80 and 162 for the years ended December 31, 2011, 2012 and 2013, respectively, and the transition of 38 properties to our seniors housing triple-net segment on September 1, 2013.

58


 

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 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,

 

 

 

 

 

 

 

 

 

 

 

 

 

 

2011

 

2012

 

$

 

%

 

2013

 

$

 

%

 

$

 

%

Revenues:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Resident fees and services

 

$

 456,085 

 

$

 697,494 

 

$

 241,409 

 

53%

 

$

 1,616,290 

 

$

 918,796 

 

132%

 

$

 1,160,205 

 

254%

 

Interest income

 

 

 - 

 

 

 6,208 

 

 

 6,208 

 

n/a

 

 

 757 

 

 

 (5,451) 

 

n/a

 

 

 757 

 

n/a

 

Other income

 

 

 - 

 

 

 - 

 

 

 - 

 

n/a

 

 

 355 

 

 

 355 

 

n/a

 

 

 355 

 

n/a

 

 

 

 

 

 456,085 

 

 

 703,702 

 

 

 247,617 

 

54%

 

 

 1,617,402 

 

 

 913,700 

 

130%

 

 

 1,161,317 

 

255%

Property operating expenses

 

 

 314,142 

 

 

 471,678 

 

 

 157,536 

 

50%

 

 

 1,089,239 

 

 

 617,561 

 

131%

 

 

 775,097 

 

247%

 

Net operating income from continuing operations (NOI)

 

 

 141,943 

 

 

 232,024 

 

 

 90,081 

 

63%

 

 

 528,163 

 

 

 296,139 

 

128%

 

 

 386,220 

 

272%

Other expenses:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest expense

 

 

 46,342 

 

 

 67,524 

 

 

 21,182 

 

46%

 

 

 92,148 

 

 

 24,624 

 

36%

 

 

 45,806 

 

99%

 

Loss (gain) on derivatives, net

 

 

 - 

 

 

 (1,921) 

 

 

 (1,921) 

 

n/a

 

 

 (407) 

 

 

 1,514 

 

n/a

 

 

 (407) 

 

n/a

 

Depreciation and amortization

 

 

 138,192 

 

 

 165,798 

 

 

 27,606 

 

20%

 

 

 478,007 

 

 

 312,209 

 

188%

 

 

 339,815 

 

246%

 

Transaction costs

 

 

 36,328 

 

 

 12,756 

 

 

 (23,572) 

 

-65%

 

 

 107,066 

 

 

 94,310 

 

739%

 

 

 70,738 

 

195%

 

Loss (gain) on extinguishment of debt, net

 

 

 (979) 

 

 

 (2,697) 

 

 

 (1,718) 

 

175%

 

 

 (3,372) 

 

 

 (675) 

 

25%

 

 

 (2,393) 

 

n/a

 

 

 

 

 

 219,883 

 

 

 241,460 

 

 

 21,577 

 

10%

 

 

 673,442 

 

 

 431,982 

 

179%

 

 

 453,559 

 

206%

(Loss) income from continuing operations before income from unconsolidated entities

 

 

 (77,940) 

 

 

 (9,436) 

 

 

 68,504 

 

-88%

 

 

 (145,279) 

 

 

 (135,843) 

 

1440%

 

 

 (67,339) 

 

86%

Income tax expense

 

 

 - 

 

 

 (1,086) 

 

 

 (1,086) 

 

n/a

 

 

 (5,337) 

 

 

 (4,251) 

 

n/a

 

 

 (5,337) 

 

n/a

(Loss) income from unconsolidated entities

 

 

 (1,531) 

 

 

 (6,364) 

 

 

 (4,833) 

 

316%

 

 

 (22,695) 

 

 

 (16,331) 

 

257%

 

 

 (21,164) 

 

n/a

Net income (loss)

 

 

 (79,471) 

 

 

 (16,886) 

 

 

 62,585 

 

-79%

 

 

 (173,311) 

 

 

 (156,425) 

 

926%

 

 

 (93,840) 

 

118%

Less: Net income (loss) attributable to noncontrolling interests

 

 

 (6,006) 

 

 

 (3,015) 

 

 

 2,991 

 

-50%

 

 

 (8,639) 

 

 

 (5,624) 

 

187%

 

 

 (2,633) 

 

44%

Net income (loss) attributable to common stockholders

 

$

 (73,465) 

 

$

 (13,871) 

 

$

 59,594 

 

-81%

 

 

 (164,672) 

 

 

 (150,801) 

 

1087%

 

 

 (91,207) 

 

124%

 

      Fluctuations in revenues and property operating expenses are primarily a result of acquisitions subsequent to January 1, 2011. Interest income 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. Loss from unconsolidated entities during the year ended December 31, 2013 is primarily attributable to depreciation and amortization of short-lived intangible assets related to our joint ventures with Chartwell and Sunrise described in Note 7 to our consolidated financial statements.

 

      Interest expense represents secured debt interest expense as well as interest expense related to our $250,000,000 Canadian-denominated unsecured term loan and our £550,000,000 Sterling-denominated senior unsecured notes due 2028. 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):

 

59


 

Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations

 

 

 

 

 

Year Ended

 

 

Year Ended

 

Year Ended

 

 

December 31, 2011

 

 

December 31, 2012

 

December 31, 2013

 

 

 

 

 

Weighted Avg.

 

 

 

 

 

Weighted Avg.

 

 

 

 

Weighted Avg.

 

 

Amount

 

Interest Rate

 

 

Amount

 

Interest Rate

 

Amount

 

Interest Rate

Beginning balance

 

$

 487,706 

 

5.939%

 

 

$

 1,318,599 

 

4.665%

 

$

 1,369,526 

 

4.874%

Debt issued

 

 

 114,903 

 

5.779%

 

 

 

 148,031 

 

4.220%

 

 

 75,408 

 

4.891%

Debt assumed

 

 

 780,955 

 

4.269%

 

 

 

 115,371 

 

5.512%

 

 

 1,228,706 

 

4.063%

Debt extinguished

 

 

 (55,317) 

 

5.949%

 

 

 

 (193,962) 

 

4.395%

 

 

 (548,876) 

 

3.597%

Debt transitioned

 

 

 - 

 

0.000%

 

 

 

 - 

 

0.000%

 

 

 (367,997) 

 

5.298%

Foreign currency

 

 

 - 

 

0.000%

 

 

 

 187 

 

5.624%

 

 

 (10,361) 

 

4.013%

Principal payments

 

 

 (9,648) 

 

5.474%

 

 

 

 (18,700) 

 

4.850%

 

 

 (31,692) 

 

4.643%

Ending balance

 

$

 1,318,599 

 

4.665%

 

 

$

 1,369,526 

 

4.874%

 

$

 1,714,714 

 

4.622%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Monthly averages

 

$

 969,265 

 

5.679%

 

 

$

 1,366,758 

 

4.866%

 

$

 1,723,122 

 

4.820%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

    In connection with secured debt extinguishments, we recognized gains of $979,000, $2,697,000, and $3,332,000 during the years ended December 31, 2011, 2012, and 2013, respectively.  The increase in gains on debt extinguishment is primarily attributable to the increased volume of extinguishments.  Derivative gains relate to foreign currency forward exchange contracts entered into in conjunction with international investments made during the years ended December 31, 2012 and 2013, respectively.  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 increase in transaction costs relates to the increased number of acquisitions during the year ended December 31, 2013.  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,

 

 

 

 

 

 

 

 

 

 

 

 

 

 

2011

 

2012

 

$

 

%

 

2013

 

$

 

%

 

$

 

%

SSCNOI(1)

 

 $ 

 184,275 

 

 $ 

 186,745 

 

 $ 

 2,470 

 

1%

 

 $ 

 186,918 

 

 $ 

 173 

 

0%

 

 $ 

 2,643 

 

1%

Non-cash NOI attributable to same store properties(1)

 

 

 7,771 

 

 

 6,372 

 

 

 (1,399) 

 

-18%

 

 

 4,169 

 

 

 (2,203) 

 

-35%

 

 

 (3,602) 

 

-46%

NOI attributable to non same store properties(2)

 

 

 25,170 

 

 

 100,113 

 

 

 74,943 

 

298%

 

 

 150,518 

 

 

 50,405 

 

50%

 

 

 125,348 

 

498%

NOI

 

 $ 

 217,216 

 

 $ 

 293,230 

 

 $ 

 76,014 

 

35%

 

 $ 

 341,605 

 

 $ 

 48,375 

 

16%

 

 $ 

 124,389 

 

57%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(1) Due to increases in cash and non-cash revenues (described below) related to 130 same store properties.

(2) Primarily due to acquisitions of properties, which totaled 35, 34 and 13 for the years ended December 31, 2011, 2012 and 2013, respectively, and conversions of construction projects into revenue-generating properties, which totaled seven, five and seven for the years ended December 31, 2011, 2012 and 2013, respectively.

60


 

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,

 

 

 

 

 

 

 

 

 

 

 

 

 

 

2011

 

2012

 

$

 

%

 

2013

 

$

 

%

 

$

 

%

Revenues:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Rental income

 

$

 267,151 

 

$

 379,117 

 

$

 111,966 

 

42%

 

$

 446,804 

 

$

 67,687 

 

18%

 

$

 179,653 

 

67%

 

Interest income

 

 

 7,002 

 

 

 8,477 

 

 

 1,475 

 

21%

 

 

 10,394 

 

 

 1,917 

 

23%

 

 

 3,392 

 

48%

 

Other income

 

 

 3,985 

 

 

 1,947 

 

 

 (2,038) 

 

-51%

 

 

 1,981 

 

 

 34 

 

2%

 

 

 (2,004) 

 

-50%

 

 

 

 

 

 278,138 

 

 

 389,541 

 

 

 111,403 

 

40%

 

 

 459,179 

 

 

 69,638 

 

18%

 

 

 181,041 

 

65%

Property operating expenses

 

 

 60,922 

 

 

 96,311 

 

 

 35,389 

 

58%

 

 

 117,574 

 

 

 21,263 

 

22%

 

 

 56,652 

 

93%

 

Net operating income from continuing operations (NOI)

 

 

 217,216 

 

 

 293,230 

 

 

 76,014 

 

35%

 

 

 341,605 

 

 

 48,375 

 

16%

 

 

 124,389 

 

57%

Other expenses:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest expense

 

 

 18,557 

 

 

 28,878 

 

 

 10,321 

 

56%

 

 

 36,823 

 

 

 7,945 

 

28%

 

 

 18,266 

 

98%

 

Depreciation and amortization

 

 

 92,489 

 

 

 139,523 

 

 

 47,034 

 

51%

 

 

 159,270 

 

 

 19,747 

 

14%

 

 

 66,781 

 

72%

 

Transaction costs

 

 

 5,903 

 

 

 13,148 

 

 

 7,245 

 

123%

 

 

 1,985 

 

 

 (11,163) 

 

-85%

 

 

 (3,918) 

 

-66%

 

Loss (gain) on extinguishment of debt, net

 

 

 - 

 

 

 (483) 

 

 

 (483) 

 

n/a

 

 

 - 

 

 

 483 

 

n/a

 

 

 0 

 

n/a

 

Provision for loan losses

 

 

 2,010 

 

 

 - 

 

 

 (2,010) 

 

-100%

 

 

 - 

 

 

 0 

 

n/a

 

 

 (2,010) 

 

n/a

 

 

 

 

 

 118,959 

 

 

 181,066 

 

 

 62,107 

 

52%

 

 

 198,078 

 

 

 17,012 

 

9%

 

 

 79,119 

 

67%

Income from continuing operations before income taxes and income (loss)  from unconsolidated entities

 

 

 98,257 

 

 

 112,164 

 

 

 13,907 

 

14%

 

 

 143,527 

 

 

 31,363 

 

28%

 

 

 45,270 

 

46%

Income tax expense

 

 

 (361) 

 

 

 (2,381) 

 

 

 (2,020) 

 

560%

 

 

 (481) 

 

 

 1,900 

 

-80%

 

 

 (120) 

 

33%

Income (loss) from unconsolidated entities

 

 

 7,312 

 

 

 8,879 

 

 

 1,567 

 

21%

 

 

 9,473 

 

 

 594 

 

7%

 

 

 2,161 

 

30%

Income from continuing operations

 

 

 105,208 

 

 

 118,662 

 

 

 13,454 

 

13%

 

 

 152,519 

 

 

 33,857 

 

29%

 

 

 47,311 

 

45%

Discontinued operations:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Gain (loss) on sales of properties, net

 

 

 2,052 

 

 

 (16,289) 

 

 

(18,341)

 

n/a

 

 

 (3,675) 

 

 

12,614

 

-77%

 

 

(5,727)

 

-279%

 

Impairment of assets

 

 

 (11,091) 

 

 

 (14,588) 

 

 

(3,497)

 

32%

 

 

 - 

 

 

14,588

 

-100%

 

 

11,091

 

-100%

 

Income (loss) from discontinued operations, net

 

 

 3,049 

 

 

 3,990 

 

 

941

 

31%

 

 

 1,195 

 

 

(2,795)

 

-70%

 

 

(1,854)

 

-61%

 

Discontinued operations, net

 

 

 (5,990) 

 

 

 (26,887) 

 

 

 (20,897) 

 

349%

 

 

 (2,480) 

 

 

 24,407 

 

-91%

 

 

 3,510 

 

-59%

Net income (loss)

 

 

 99,218 

 

 

 91,775 

 

 

 (7,443) 

 

-8%

 

 

 150,039 

 

 

 58,264 

 

63%

 

 

 50,821 

 

51%

Less: Net income (loss) attributable to noncontrolling interests

 

 

 894 

 

 

 171 

 

 

 (723) 

 

-81%

 

 

 393 

 

 

 222 

 

130%

 

 

 (501) 

 

-56%

Net income (loss) attributable to common stockholders

 

$

 98,324 

 

$

 91,604 

 

$

 (6,720) 

 

-7%

 

$

 149,646 

 

$

 58,042 

 

63%

 

$

 51,322 

 

52%

 

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, 2013, our consolidated medical office building portfolio signed 74,027 square feet of new leases and 144,436 square feet of renewals.  The weighted-average term of these leases was five years, with a rate of $22.45 per square foot and tenant improvement and lease commission costs of $15.04 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%.  For the three months ended December 31, 2013, there were no lease renewals and no leases with a rental rate increaser in our hospital portfolio. The increase in interest income is attributable to higher real estate loans receivable.

During the year ended December 31, 2013, we completed seven medical office building construction projects representing $127,363,000 or $278 per square foot. The following is a summary of medical office building construction projects pending as of

61


 

Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations

 

 

December 31, 2013 (dollars in thousands):

 

Location

 

Square Feet

 

 

Commitment

 

 

Balance

 

Est. Completion

Coon Rapids, MN

 

 115,108 

 

$

 27,282 

 

$

 13,715 

 

1Q14

Lenexa, KS

 

 75,126 

 

 

 16,463 

 

 

 7,948 

 

1Q14

Clear Lake, TX

 

 54,713 

 

 

 14,750 

 

 

 3,410 

 

2Q14

Burnsville, MN

 

 123,857 

 

 

 36,087 

 

 

 10,556 

 

3Q14

Humble, TX

 

 36,475 

 

 

 10,885 

 

 

 1,881 

 

3Q14

Bettendorf, IA

 

 40,493 

 

 

 7,562 

 

 

 355 

 

4Q14

Shenandoah, TX

 

 80,085 

 

 

 24,600 

 

 

 4,738 

 

1Q15

Total

 

 525,857 

 

$

 137,629 

 

$

 42,603 

 

 

 

     Total interest expense for the years ended December 31, 2013, 2012 and 2011 represents $38,997,000, $38,786,000 and $31,477,000, respectively, of secured debt interest expense offset by interest allocated to discontinued operations in the amounts of $2,174,000, $9,908,000 and $12,920,000 for the years ended December 31, 2013, 2012 and 2011, respectively.  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, 2011

 

December 31, 2012

 

December 31, 2013

 

 

 

 

 

Weighted Avg.

 

 

 

 

Weighted Avg.

 

 

 

 

Weighted Avg.

 

 

Amount

 

Interest Rate

 

Amount

 

Interest Rate

 

Amount

 

Interest Rate

Beginning balance

 

$

 463,477 

 

5.286%

 

$

 520,066 

 

5.981%

 

$

 713,720 

 

5.950%

Debt assumed

 

 

 69,779 

 

5.921%

 

 

 246,371 

 

5.888%

 

 

 52,574 

 

6.126%

Debt extinguished

 

  

 - 

 

0.000%

 

  

 (37,622) 

 

5.858%

 

  

 (49,017) 

 

5.357%

Principal payments

 

  

 (13,190) 

 

6.208%

 

  

 (15,095) 

 

6.180%

 

  

 (16,850) 

 

6.193%

Ending balance

 

$

 520,066 

 

5.981%

 

$

 713,720 

 

5.950%

 

$

 700,427 

 

5.999%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Monthly averages

 

$

 489,923 

 

6.179%

 

$

 669,753 

 

5.952%

 

$

 708,107 

 

5.956%

 

In connection with secured debt extinguishments, we recognized gains of $483,000 during the year ended December 31, 2012.  During the year ended December 31, 2013, we did not recognize gain or loss, as the debt extinguishments related to contractual debt maturities.

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) and other similar costs.  The fluctuations in transaction costs are primarily due to acquisition volume fluctuations in the relevant years.

During the year ended December 31, 2011, we recorded $2,010,000 of provision for loan losses, which is primarily attributable to the write-off of a hospital loan.

Income from unconsolidated entities includes our share of net income 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.  See Note 7 to our consolidated financial statements for additional information.

Changes in gains/losses on sales of properties is related to property sales which totaled three, 20 and 24 for the years ended December 31, 2011, 2012 and 2013, respectively.  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, 2013 as discontinued operations for the periods presented (dollars in thousands):

  

 

62


 

Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations

 

 

 

 

 

 

Year Ended December 31,

 

 

  

2011

 

2012

 

2013

 

 

  

 

 

 

 

 

 

 

 

Rental income

  

$

 39,377 

 

$

 32,394 

 

$

 10,488 

Expenses:

  

 

 

 

 

 

 

 

 

 

Interest expense

  

 

 12,920 

 

 

 9,908 

 

 

 2,174 

 

Property operating expenses

  

 

 8,806 

 

 

 4,482 

 

 

 3,396 

 

Provision for depreciation

  

 

 14,602 

 

 

 14,014 

 

 

 3,723 

Income (loss) from discontinued operations, net

  

$

 3,049 

 

$

 3,990 

 

$

 1,195 

     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

     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,

 

 

 

 

 

 

 

 

 

 

 

 

 

2011

 

2012

 

$

 

%

 

2013

 

$

 

%

 

$

 

%

Revenues:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Other income

 

$

 690 

 

$

 912 

 

$

 222 

 

32%

 

$

 296 

 

$

 (616) 

 

-68%

 

$

 (394) 

 

-57%

Expenses:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest expense

 

 

 228,884 

 

 

 263,418 

 

 

 34,534 

 

15%

 

 

 306,067 

 

 

 42,649 

 

16%

 

 

 77,183 

 

34%

 

General and administrative

 

 

 77,201 

 

 

 97,341 

 

 

 20,140 

 

26%

 

 

 108,318 

 

 

 10,977 

 

11%

 

 

 31,117 

 

40%

 

Loss (gain) on extinguishments of debt, net

 

 

 - 

 

 

 - 

 

 

 0 

 

n/a

 

 

 2,423 

 

 

 2,423 

 

n/a

 

 

 2,423 

 

n/a

 

 

 

 

 306,085 

 

 

 360,759 

 

 

 54,674 

 

18%

 

 

 416,808 

 

 

 56,049 

 

16%

 

 

 110,723 

 

36%

Loss from continuing operations before income taxes

 

 

 (305,395) 

 

 

 (359,847) 

 

 

 (54,452) 

 

18%

 

 

 (416,512) 

 

 

 (56,665) 

 

16%

 

 

 (111,117) 

 

36%

Income tax expense

 

 

 (884) 

 

 

 (1,293) 

 

 

 (409) 

 

46%

 

 

 (67) 

 

 

 1,226 

 

-95%

 

 

 817 

 

-92%

Net loss

 

 

 (306,279) 

 

 

 (361,140) 

 

 

 (54,861) 

 

18%

 

 

 (416,579) 

 

 

 (55,439) 

 

15%

 

 

 (110,300) 

 

36%

Preferred stock dividends

 

 

 60,502 

 

 

 69,129 

 

 

 8,627 

 

14%

 

 

 66,336 

 

 

 (2,793) 

 

-4%

 

 

 5,834 

 

10%

Preferred stock redemption charge

 

 

 - 

 

 

 6,242 

 

 

 6,242 

 

n/a

 

 

 - 

 

 

 (6,242) 

 

-100%

 

 

 - 

 

n/a

Net loss attributable to common stockholders

 

$

 (366,781) 

 

$

 (436,511) 

 

$

 (69,730) 

 

19%

 

$

 (482,915) 

 

$

 (46,404) 

 

11%

 

$

 (116,134) 

 

32%

 

     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,

 

 

 

 

 

 

 

 

 

 

 

 

2011

 

2012

 

$

 

%

 

2013

 

$

 

%

 

$

 

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Senior unsecured notes

 

$

 222,559 

 

$

 249,564 

 

$

 27,005 

 

12%

 

$

 279,617 

 

$

 30,053 

 

12%

 

$

 57,058 

 

26%

Secured debt

 

  

 604 

 

  

 557 

 

  

 (47) 

 

-8%

 

  

 495 

 

  

 (62) 

 

-11%

 

  

 (109) 

 

-18%

Unsecured lines of credit

 

  

 7,917 

 

  

 11,769 

 

  

 3,852 

 

49%

 

  

 15,498 

 

  

 3,729 

 

32%

 

  

 7,581 

 

96%

Capitalized interest

 

  

 (13,164) 

 

  

 (9,777) 

 

  

 3,387 

 

-26%

 

  

 (6,700) 

 

  

 3,077 

 

-31%

 

  

 6,464 

 

-49%

Interest SWAP savings

 

  

 (161) 

 

  

 (96) 

 

  

 65 

 

-40%

 

  

 (14) 

 

  

 82 

 

-85%

 

  

 147 

 

-91%

Loan expense

 

  

 11,129 

 

  

 11,401 

 

  

 272 

 

2%

 

  

 17,171 

 

  

 5,770 

 

51%

 

  

 6,042 

 

54%

Totals

 

$

 228,884 

 

$

 263,418 

 

$

 34,534 

 

15%

 

$

 306,067 

 

$

 42,649 

 

16%

 

$

 77,183 

 

34%

 

The change in interest expense on senior unsecured notes is due to the net effect of issuances and extinguishments, excluding our $250,000,000 Canadian-denominated unsecured term loan and our £550,000,000 Sterling-denominated senior unsecured notes due 2028, 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

63


 

Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations

 

 

that approximates our cost of financing. Our interest expense is reduced by the amount capitalized.  The decrease in capitalized interest is due to both a decrease in construction fundings and a decline 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 the unsecured line of credit arrangements 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 unsecured line of credit arrangements.

 

     General and administrative expenses as a percentage of consolidated revenues (including revenues from discontinued operations) for the years ended December 31, 2013, 2012 and 2011 were 3.74%, 5.12% and 5.37%, 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.  The decline in percent of revenue is primarily related to the increasing revenue base as a result of our acquisitions.  The loss on extinguishment of debt is due to the redemption of convertible senior notes.  Please see Note 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.

  

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 line of credit arrangement and Canadian denominated term loan 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

64


 

Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations

 

 

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 line of credit arrangement and Canadian denominated term loan 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:

  

2011

 

2012

 

2013

Net income attributable to common stockholders

  

$

 157,108 

 

$

 221,884 

 

$

 78,714 

Depreciation and amortization

  

 

 423,605 

 

 

 533,585 

 

 

 873,960 

Impairment of assets

 

 

 12,194 

 

 

 29,287 

 

 

 - 

Loss (gain) on sales of properties

  

 

 (61,160) 

 

 

 (100,549) 

 

 

 (49,138) 

Noncontrolling interests

 

 

 (18,557) 

 

 

 (21,058) 

 

 

 (36,304) 

Unconsolidated entities

  

 

 11,712 

 

 

 34,408 

 

 

 57,652 

Funds from operations

  

$

 524,902 

 

$

 697,557 

 

$

 924,884 

 

 

  

 

 

 

 

 

 

 

 

Average common shares outstanding:

 

 

 

 

 

 

 

 

 

 

Basic

  

 

 173,741 

 

 

 224,343 

 

 

 276,929 

 

Diluted

  

 

 174,401 

 

 

 225,953 

 

 

 278,761 

 

 

  

 

 

 

 

 

 

 

 

Per share data:

  

 

 

 

 

 

 

 

 

Net income attributable to common stockholders

  

 

 

 

 

 

 

 

 

 

Basic

  

$

 0.90 

 

$

 0.99 

 

$

 0.28 

 

Diluted

  

 

 0.90 

 

 

 0.98 

 

 

 0.28 

 

 

  

 

 

 

 

 

 

 

 

Funds from operations

  

 

 

 

 

 

 

 

 

 

Basic

  

$

 3.02 

 

$

 3.11 

 

$

 3.34 

 

Diluted

  

 

 3.01 

 

 

 3.09 

 

 

 3.32 

65


 

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:

 

2011

 

2012

 

2013

Net income

 

$

 212,716 

 

$

 294,840 

 

$

 138,280 

Interest expense

 

  

 321,999 

 

 

 383,300 

 

 

 462,606 

Income tax expense (benefit)

 

  

 1,388 

 

 

 7,612 

 

 

 7,491 

Depreciation and amortization

 

  

 423,605 

 

 

 533,585 

 

 

 873,960 

Stock-based compensation expense

 

  

 10,786 

 

 

 18,521 

 

 

 20,177 

Provision for loan losses

 

  

 2,010 

 

 

 27,008 

 

 

 2,110 

Loss (gain) on extinguishment of debt

 

  

 (979) 

 

 

 (775) 

 

 

 (909) 

Adjusted EBITDA

 

$

 971,525 

 

$

 1,264,091 

 

$

 1,503,715 

 

 

 

  

 

 

  

 

 

  

 

Adjusted Interest Coverage Ratio:

 

 

 

 

 

 

 

 

 

Interest expense

 

$

 321,999 

 

$

 383,300 

 

$

 462,606 

Capitalized interest

 

  

 13,164 

 

  

 9,777 

 

  

 6,700 

Non-cash interest expense

 

  

 (13,905) 

 

  

 (11,395) 

 

  

 (4,044) 

 

Total interest

 

  

 321,258 

 

  

 381,682 

 

  

 465,262 

Adjusted EBITDA

 

$

 971,525 

 

$

 1,264,091 

 

$

 1,503,715 

 

Adjusted interest coverage ratio

 

  

3.02x

 

 

3.31x

 

 

3.23x

 

 

 

  

 

 

  

 

 

  

 

Adjusted Fixed Charge Coverage Ratio:

 

 

 

 

 

 

 

 

 

Interest expense

 

$

 321,999 

 

$

 383,300 

 

$

 462,606 

Capitalized interest

 

  

 13,164 

 

  

 9,777 

 

  

 6,700 

Non-cash interest expense

 

  

 (13,905) 

 

  

 (11,395) 

 

  

 (4,044) 

Secured debt principal payments

 

  

 27,804 

 

  

 38,554 

 

  

 56,205 

Preferred dividends

 

  

 60,502 

 

  

 69,129 

 

  

 66,336 

 

Total fixed charges

 

  

 409,564 

 

  

 489,365 

 

  

 587,803 

Adjusted EBITDA

 

$

 971,525 

 

$

 1,264,091 

 

$

 1,503,715 

 

Adjusted fixed charge coverage ratio

 

  

2.37x

 

 

2.58x

 

 

2.56x

66


 

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:

 

2011

 

2012

 

2013

Total revenues:

 

 

 

 

 

 

 

 

 

 

Seniors housing triple-net

 

$

 578,269 

 

$

 710,889 

 

$

 803,731 

 

Seniors housing operating

 

 

 456,085 

 

 

 703,702 

 

 

 1,617,402 

 

Medical facilities

 

 

 278,138 

 

 

 389,541 

 

 

 459,179 

 

Non-segment/corporate

 

 

 690 

 

 

 912 

 

 

 296 

 

 

 

Total revenues

 

 

 1,313,182 

 

 

 1,805,044 

 

 

 2,880,608 

Property operating expenses:

 

 

 

 

 

 

 

 

 

 

Seniors housing operating

 

 

 314,142 

 

 

 471,678 

 

 

 1,089,239 

 

Medical facilities

 

 

 60,922 

 

 

 96,311 

 

 

 117,574 

 

 

 

Total property operating expenses

 

 

 375,064 

 

 

 567,989 

 

 

 1,206,813 

Net operating income:

 

 

 

 

 

 

 

 

 

 

Seniors housing triple-net

 

 

 578,269 

 

 

 710,889 

 

 

 803,731 

 

Seniors housing operating

 

 

 141,943 

 

 

 232,024 

 

 

 528,163 

 

Medical facilities

 

 

 217,216 

 

 

 293,230 

 

 

 341,605 

 

Non-segment/corporate

 

 

 690 

 

 

 912 

 

 

 296 

 

 

 

Net operating income from continuing operations

 

$

 938,118 

 

$

 1,237,055 

 

$

 1,673,795 

Reconciling items:

 

 

 

 

 

 

 

 

 

 

Interest expense

 

 

 (290,981) 

 

 

 (361,565) 

 

 

 (458,360) 

 

Loss (gain) on derivatives, net

 

 

 - 

 

 

 1,825 

 

 

 (4,470) 

 

Depreciation and amortization

 

 

 (386,478) 

 

 

 (506,220) 

 

 

 (865,800) 

 

General and administrative

 

 

 (77,201) 

 

 

 (97,341) 

 

 

 (108,318) 

 

Transaction costs

 

 

 (70,224) 

 

 

 (61,609) 

 

 

 (133,401) 

 

Loss (gain) on extinguishment of debt

 

 

 979 

 

 

 775 

 

 

 909 

 

Provision for loan losses

 

 

 (2,010) 

 

 

 (27,008) 

 

 

 (2,110) 

 

Income tax benefit (expense)

 

 

 (1,388) 

 

 

 (7,612) 

 

 

 (7,491) 

 

Income (loss)  from unconsolidated entities

 

 

 5,772 

 

 

 2,482 

 

 

 (8,187) 

 

Income (loss) from discontinued operations, net

 

 

 96,129 

 

 

 114,058 

 

 

 51,713 

 

Preferred dividends

 

 

 (60,502) 

 

 

 (69,129) 

 

 

 (66,336) 

 

Preferred stock redemption charge

 

 

 - 

 

 

 (6,242) 

 

 

 - 

 

Loss (income) attributable to noncontrolling interests

 

 

 4,894 

 

 

 2,415 

 

 

 6,770 

 

 

 

 

 

 

 (781,010) 

 

 

 (1,015,171) 

 

 

 (1,595,081) 

Net income (loss) attributable to common stockholders

 

$

 157,108 

 

$

 221,884 

 

$

 78,714 

67


 

Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations

 

 

 

 

 

 

 

Year Ended December 31,

Same Store Cash NOI Reconciliation:

 

2011

 

2012

 

2013

Net operating income from continuing operations:

 

 

 

 

 

 

 

 

 

 

Seniors housing triple-net

 

$

 578,269 

 

$

 710,889 

 

$

 803,731 

 

Seniors housing operating

 

 

 141,943 

 

 

 232,024 

 

 

 528,163 

 

Medical facilities

 

 

 217,216 

 

 

 293,230 

 

 

 341,605 

 

 

 

Total

 

 

 937,428 

 

 

 1,236,143 

 

 

 1,673,499 

Adjustments:

 

 

 

 

 

 

 

 

 

 

Seniors housing triple-net:

 

 

 

 

 

 

 

 

 

 

 

Non-cash NOI on same store properties

 

 

 (10,736) 

 

 

 (7,079) 

 

 

 (8,987) 

 

 

NOI attributable to non same store properties

 

 

 (260,576) 

 

 

 (390,112) 

 

 

 (475,275) 

 

 

 

Subtotal

 

 

 (271,312) 

 

 

 (397,191) 

 

 

 (484,262) 

 

Seniors housing operating:

 

 

 

 

 

 

 

 

 

 

 

NOI attributable to non same store properties

 

 

 (108,180) 

 

 

 (192,913) 

 

 

 (487,210) 

 

 

 

Subtotal

 

 

 (108,180) 

 

 

 (192,913) 

 

 

 (487,210) 

 

Medical facilities:

 

 

 

 

 

 

 

 

 

 

 

Non-cash NOI on same store properties

 

 

 (7,771) 

 

 

 (6,372) 

 

 

 (4,169) 

 

 

NOI attributable to non same store properties

 

 

 (25,170) 

 

 

 (100,113) 

 

 

 (150,518) 

 

 

 

Subtotal

 

 

 (32,941) 

 

 

 (106,485) 

 

 

 (154,687) 

 

 

 

Total

 

 

 (412,433) 

 

 

 (696,589) 

 

 

 (1,126,159) 

Same store cash net operating income:

 

 

 

 

 

 

 

 

 

 

Seniors housing triple-net

 

 

 306,957 

 

 

 313,698 

 

 

 319,469 

 

Seniors housing operating

 

 

 33,763 

 

 

 39,111 

 

 

 40,953 

 

Medical facilities

 

 

 184,275 

 

 

 186,745 

 

 

 186,918 

 

 

 

Total

 

$

 524,995 

 

$

 539,554 

 

$

 547,340 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Same Store Cash NOI Property Reconciliation:

 

 

 

 

 

 

 

 

 

 

Total properties

 

 

 1,142 

 

 

 

 

 

 

 

Acquisitions

 

 

 (619) 

 

 

 

 

 

 

 

Developments

 

 

 (29) 

 

 

 

 

 

 

 

Disposals/Held-for-sale

 

 

 (3) 

 

 

 

 

 

 

 

Segment transitions

 

 

 (40) 

 

 

 

 

 

 

 

Other(1)

 

 

 (15) 

 

 

 

 

 

 

 

 

Same store properties

 

 

 436 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(1) Includes ten land parcels and five loans.

 

Health Care Industry

 

     The demand for health care services, and consequently health care properties, is projected to reach unprecedented levels in the near future. The Centers for Medicare and Medicaid Services (“CMS”) projects that national health expenditures will rise to approximately $3.3 trillion in 2015 or 18.4% of gross domestic product (“GDP”). The average annual growth in national health expenditures for 2012 through 2022 is expected to be 5.8%.

 

     While demographics are the primary driver of demand, economic conditions and availability of services contribute to health care service utilization rates. We believe the health care property market may be less susceptible to fluctuations and economic downturns relative to other property sectors. Investor interest in the market remains strong, especially in specific sectors such as private-pay senior living and medical office buildings.

 

     The total U.S. population is projected to increase by 13.4% through 2033. The elderly population aged 65 and over is projected to increase by 68.3% through 2033. The elderly are an important component of health care utilization, especially independent living services, assisted living services, skilled nursing services, inpatient and outpatient hospital services and physician ambulatory care. Most health care services are provided within a health care facility such as a hospital, a physician’s office or a seniors housing community. Therefore, we believe there will be continued demand for companies, such as ours, with expertise in health care real estate.

 

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Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations

 

 

     Health care real estate investment opportunities tend to increase as demand for health care services increases.  We recognize the need for health care real estate as it correlates to health care service demand.  Health care providers require real estate to house their businesses and expand their services.  We believe that investment opportunities in health care real estate will continue to be present due to:

·         The specialized nature of the industry, which enhances the credibility and experience of our company;

·         The projected population growth combined with stable or increasing health care utilization rates, which ensures demand; and

·         The on-going merger and acquisition activity.

 

Health Reform Laws

 

     On March 23, 2010, President Obama signed into law the Patient Protection and Affordable Care Act of 2010 (the “PPACA”) and the Health Care and Education Reconciliation Act of 2010, which amends the PPACA (collectively, the “Health Reform Laws”). The Health Reform Laws contain various provisions that may directly impact us or the operators and tenants of our properties. Some provisions of the Health Reform Laws may have a positive impact on our operators’ or tenants’ revenues, by, for example, increasing coverage of uninsured individuals, while others may have a negative impact on the reimbursement of our operators or tenants by, for example, altering the market basket adjustments for certain types of health care facilities. The Health Reform Laws also enhance certain fraud and abuse penalty provisions that could apply to our operators and tenants, in the event of one or more violations of the federal health care regulatory laws. In addition, there are provisions that impact the health coverage that we and our operators and tenants provide to our respective employees.  The Health Reform Laws also provide additional Medicaid funding to allow states to carry out the expansion of Medicaid coverage to certain financially−eligible individuals beginning in 2014, and have also permitted states to expand their Medicaid coverage to these individuals since April 1, 2010, if 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 will allow States 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 mid-December 2013, almost half of the states have made statements or otherwise indicated that they do not intend to expand Medicaid coverage at this time.  The participation by states in the Medicaid expansion could have the dual effect of increasing our tenants’ revenues, through new patients, but could also further strain state budgets. 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. 

 

    We cannot predict whether the existing Health Reform Laws, or future health care reform legislation or regulatory changes, will have a material impact on our operators’ or tenants’ property or business. If the operations, cash flows or financial condition of our operators and tenants are materially adversely impacted by the Health Reform Laws or future legislation, our revenue and operations may be adversely affected as well.

 

     Impact to Reimbursement of the Operators and Tenants of Our Properties. The Health Reform Laws provide for various changes to the reimbursement that our operators and tenants may receive. One such change is a reduction to the market basket adjustments for inpatient acute hospitals, long−term care hospitals, inpatient rehabilitation facilities, home health agencies, psychiatric hospitals, hospice care and outpatient hospitals.  Since 2012, the otherwise applicable percentage increase to the market basket for inpatient acute hospitals has decreased.  Since 2012, inpatient acute hospitals have also faced a downward adjustment of the annual percentage increase to the market basket rate by a “productivity adjustment.” The productivity adjustment may cause the annual percentage increase to be less than zero, which would mean that inpatient acute hospitals could face payment rates for a fiscal year that are less than the payment rates for the preceding year.

 

     A similar productivity adjustment has applied to skilled nursing facilities since 2012, which means that the payment rates for skilled nursing facilities may decrease from one year to the next. Long−term care hospitals have faced a specified percentage decrease in their annual update for discharges since 2010. Additionally, since 2012, long-term care hospitals have been subject to the productivity adjustments, which may decrease the federal payment rates for long-term care hospitals. Similar productivity adjustments to payment rates have applied to inpatient rehabilitation facilities since 2012, inpatient psychiatric hospitals since 2013 and outpatient hospitals since 2012.

 

     The Health Reform Laws revise other reimbursement provisions that may affect our business. For example, the Health Reform Laws reduce states’ Medicaid disproportionate share hospital (“DSH”) allotments, starting in 2014 through 2020. On September 18, 2013, CMS published a final rule that sets forth the annual reductions for Medicaid DSH payments for fiscal years 2014 and 2015, which were mandated by the Health Reform Laws, based on the assumption that the number of uninsured people will fall sharply beginning in 2014.  Although the Health Reform Laws mandated reductions in Medicaid DSH spending from 2014 through 2020, the final rule addresses only DSH reductions for 2014 and 2015.  In the final rule, CMS explained that, while the President’s FY 2014

69


 

Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations

 

 

budget proposed to delay these reductions until 2015, the Department of Health and Human Services has no flexibility to institute a delay without congressional action. These allotments would have provided additional funding for DSH hospitals that are operators or tenants of our properties, and thus, any reduction might negatively impact these operators or tenants.

 

     Additionally, under the Health Reform Laws, beginning in fiscal year 2015, Medicare payments will decrease to hospitals for treatment associated with hospital acquired conditions. This decreased payment rate may negatively impact our operators or tenants. To account for excess readmissions, the Health Reform Laws also call for a reduction of 1% in payments for those hospitals with higher-than-average risk-adjusted readmission rates beginning October 1, 2012, 2% beginning in fiscal year 2014, and 3% from fiscal year 2015 onward. These reductions in payments to our operators or tenants may affect their ability to make payments to us.

 

     The Health Reform Laws additionally call for the creation of the Independent Payment Advisory Board (the “Board”), which will be responsible for establishing payment policies, including recommendations in the event that Medicare costs exceed a certain threshold. Proposals for recommendations submitted by the Board prior to December 31, 2018 may not include recommendations that would reduce payments for hospitals, skilled nursing facilities, and physicians, among other providers, prior to December 31, 2019.  Pursuant to statute, the Board’s first set of recommendations were due on January 15, 2014.  However, the President has yet to nominate anyone to serve on the Board, and the fiscal year 2014 omnibus appropriations bill rescinds $10 million of funding from the Board.

 

     The Health Reform Laws also create other mechanisms that could permit significant changes to payment. For example, the Health Reform Laws establish the Center for Medicare and Medicaid Innovation to test innovative payment and service delivery models to reduce program expenditures through the use of demonstration programs that can waive existing reimbursement methodologies. As another example, on November 2, 2011, CMS published the final rule implementing section 3022 of the Health Reform Laws, which contains provisions relating to Medicare payment to providers and suppliers participating in Accountable Care Organizations (“ACOs”) under the Medicare Shared Servings Program. Under the program, Medicare will share a percentage of savings with ACOs that meet certain quality and saving requirements, thereby allowing providers to receive incentive payments in addition to their traditional fee−for−service payments. Under the program, more experienced providers may assume the risk of losses in exchange for greater potential rewards: ACOs may share up to 50% of the savings under the one−sided model and up to 60% of the savings under the two−sided model, depending on their quality and performance. The amount of shared losses for which an ACO is liable in the two−sided model may not exceed the following percentages of its updated benchmark: 5% in the first performance year, 7.5% in the second year, and 10% in the third year. These shared losses could affect the ability of ACO operators or tenants to meet their financial obligations to us.

 

     Additionally, although the Health Reform Laws delayed implementation of the Resource Utilization Group, Version Four (“RUG−IV”), which revises the payment classification system for skilled nursing facilities, the Medicare and Medicaid Extenders Act of 2010 repealed this delay retroactively to October 1, 2010. The implementation of the RUG-IV classification may impact our tenants and operators by revising the classifications of certain patients. The federal reimbursement for certain facilities, such as skilled nursing facilities, incorporates adjustments to account for facility case-mix. The Health Reform Laws also extend certain payment rules related to long−term acute care hospitals found in the Medicare, Medicaid, and SCHIP Extension Act of 2007 (“MMSEA”). The MMSEA delayed the implementation of a policy referred to as the “25% threshold rule” that would limit the proportion of patients who can be admitted from a co-located or host hospital during a cost reporting period and be paid under the long-term care hospital prospective payment system.  The Health Reform Laws further extended the delay, which expired at various points in calendar year 2012, depending on the start of the provider’s cost reporting period.  The Long Term Care Hospital Prospective Payment Final Rule for fiscal year 2013 extended the delay for an additional year.  However, in the fiscal year 2014 final rule for the Medicare Inpatient Prospective Payment System, CMS finalized its proposal to let expire the one-year extension of the existing moratorium on the 25% threshold policy.  The expiration of the moratorium on the 25% threshold policy impacts cost reporting periods that began on or after October 1, 2013.

 

     Finally, many other changes resulting from the Health Reform Laws, or implementing regulations or guidance, may negatively impact our operators and tenants. We will continue to monitor and evaluate the Health Reform Laws and implementing regulations and guidance to determine other potential effects of the reform.

 

     Impact of Fraud and Abuse Provisions. The Health Reform Laws revise health care fraud and abuse provisions that will affect our operators and tenants. Specifically, the Health Reform Laws allow for up to treble damages under the Federal False Claims Act for violations related to state−based health insurance exchanges authorized by the Health Reform Laws, which will be implemented beginning in 2014. The Health Reform Laws also impose new civil monetary penalties for false statements or actions that lead to delayed inspections, with penalties of up to $15,000 per day for failure to grant timely access and up to $50,000 for a knowing violation. Additionally, the Health Reform Laws require certain entities – including providers, suppliers, Medicaid managed care

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Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations

 

 

organizations, Medicare Advantage organizations, and prescription drug program sponsors – to report and return overpayments to the appropriate payer by the later of (a) sixty (60) days after the date the overpayment was “identified,” or (b) the date that the “corresponding cost report” is due. The entity also must notify the payer in writing of the reason for the overpayment. A violation of these requirements may result in criminal liability, civil liability under the FCA, and/or exclusion from the federal health care programs. On February 14, 2012, CMS published a proposed rule implementing the Health Reform Laws requirement that health care providers and suppliers report and return self−identified overpayments by the later of 60 days after the date the overpayment was identified, or the date any corresponding cost report is due, if applicable; however, as early January 2014, the rule has yet to be finalized. The Health Reform Laws also amend the Federal Anti−Kickback Statute (“AKS”) to state that any items or services “resulting from” a violation of the AKS constitute a “false or fraudulent claim” under the Federal False Claims Act. The Health Reform Laws also provide for additional funding to investigate and prosecute health care fraud and abuse. Accordingly, the increased penalties under the Health Reform Laws for fraud and abuse violations may have a negative impact on our operators and tenants in the event that the government brings an enforcement action or subjects them to penalties.

 

     Further, CMS published final rulemaking to implement the enhanced provider and supplier screening provisions called for in the Health Reform Laws. Under the final rule, as of March 25, 2011, all enrolling and participating providers and suppliers are assessed an annual administrative fee and are placed in one of three risk levels (limited, moderate, and high) based on an assessment of the individual’s or entity’s overall risk of fraud, waste and abuse. This rule also allows for the temporary suspension of Medicare payments to providers or suppliers in the event CMS receives credible information that an overpayment, fraud, or willful misrepresentation has occurred. The Health Reform Laws granted the Secretary of the Department of Health and Human Services significant discretionary authority to suspend, exclude, or impose fines on providers and suppliers based on the agency’s determination that such a provider or supplier is “high−risk,” and, as a result, this final rulemaking has the potential to materially adversely affect our operators and tenants who may be evaluated under the enhanced screening process.

 

     On November 2, 2011, CMS and OIG jointly published the final rule establishing waivers of certain fraud and abuse laws to ACOs. These waivers include automatic AKS, Stark, and Civil Monetary Penalty Law waivers that may be applied in certain situations and that will apply uniformly to each ACO, ACO participant, and ACO provider/supplier. Notably, the final rule states that CMS and OIG intend to closely monitor ACOs through June 2013 to ensure that these waivers are not causing “undesirable effects” and do not need to be narrowed to prevent fraud and abuse. As of early January 2014, the results of this monitoring effort have not been made publicly available.

 

     Additionally, provisions of Title VI of the Health Care Reform Laws are designed to increase transparency and program integrity by skilled nursing facilities, other nursing facilities and similar providers. Specifically, skilled nursing facilities and other providers and suppliers will be required to institute compliance and ethics programs. Additionally, the Health Reform Laws make it easier for consumers to file complaints against nursing homes by mandating that states establish complaint websites. The provisions calling for enhanced transparency will increase the administrative burden and costs on these providers.

 

     Impact to the Health Care Plans Offered to Our Employees. The Health Reform Laws affect employers that provide health plans to their employees. The laws change the tax treatment of the Medicare Part D retiree drug subsidy and extend dependent coverage for dependents up to age 26, among other changes. We continue to evaluate our health care plans for these changes as new reform laws are enacted. These changes may affect our operators and tenants as well.

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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 2013.

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.

     

 

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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 estimated remaining useful lives of the underlying agreements.

 

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.

       

 

73


 

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.

 

  

Impact of Inflation

 

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 line of credit arrangement. 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.

 

74


 

  

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 presented to provide a discussion of the risks associated with potential fluctuations in interest rates and foreign currency exchange rates.

      We historically borrow on our primary unsecured line of credit arrangement 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 unsecured line of credit arrangements.  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, 2013

 

December 31, 2012

 

 

Principal

 

Change in

 

Principal

 

Change in

 

 

balance

 

fair value

 

balance

 

fair value

Senior unsecured notes

 

$

 7,421,707 

 

$

 (408,790) 

 

$

 6,145,457 

 

$

 (451,478) 

Secured debt

 

 

 2,787,236 

 

 

 (102,211) 

 

 

 2,024,454 

 

 

 (96,290) 

Totals

 

$

 10,208,943 

 

$

 (511,001) 

 

$

 8,169,911 

 

$

 (547,768) 

 

 

 

 

 

 

 

 

 

 

 

 

 

       Our variable rate debt, including our unsecured line of credit arrangements, is reflected at fair value. 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 result in increased annual interest expense of $10,893,620. At December 31, 2012, we had $527,060,000 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 $5,271,000.

          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, 2013, 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 (dollars in thousands):

75


 

  

 

 

 

December 31, 2013

 

December 31, 2012

 

 

Carrying

 

Change in

 

Carrying

 

Change in

 

 

Value

 

fair value

 

Value

 

fair value

Foreign currency exchange contracts(1)

 

$

 4,066 

 

$

 (2,964) 

 

$

 296 

 

$

 (89) 

Debt designated as hedges

 

 

 1,146,596 

 

 

 8,002 

 

 

 251,054 

 

 

 2,500 

Totals

 

$

 1,150,662 

 

$

 5,038 

 

$

 251,350 

 

$

 2,411 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(1) Amounts exclude cross currency hedge activity.

     For additional information regarding derivatives and fair values of financial instruments, 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.

76


 

  

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, 2013 and 2012, and the related consolidated statements of comprehensive income, equity, and cash flows for each of the three years in the period ended December 31, 2013. 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, 2013 and 2012, and the consolidated results of its operations and its cash flows for each of the three years in the period ended December 31, 2013, 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.

 

     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, 2013, 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 21, 2014 expressed an unqualified opinion thereon.

 

                                    /s/  Ernst & Young LLP

 

 

Toledo, Ohio

February 21, 2014

 

77


 

CONSOLIDATED BALANCE SHEETS

HEALTH CARE REIT, INC. AND SUBSIDIARIES

 

 

 

 

 

 

 

December 31,

 

December 31,

 

 

 

 

 

  

2013

 

2012

Assets

  

(In thousands)

Real estate investments:

 

 

 

 

 

 

 

Real property owned:

 

 

 

 

 

 

 

 

Land and land improvements

  

$

 1,878,877 

 

$

 1,365,391 

 

 

Buildings and improvements

 

 

 20,625,515 

 

 

 15,635,127 

 

 

Acquired lease intangibles

 

 

 1,070,754 

 

 

 673,684 

 

 

Real property held for sale, net of accumulated depreciation

 

 

 18,502 

 

 

 245,213 

 

 

Construction in progress

 

 

 141,085 

 

 

 162,984 

 

 

 

Gross real property owned

 

 

 23,734,733 

 

 

 18,082,399 

 

 

Less accumulated depreciation and amortization

 

 

 (2,386,658) 

 

 

 (1,555,055) 

 

 

 

Net real property owned

 

 

 21,348,075 

 

 

 16,527,344 

 

 

Real estate loans receivable

 

 

 332,146 

 

 

 895,665 

 

Net real estate investments

 

 

 21,680,221 

 

 

 17,423,009 

Other assets:

 

 

 

 

 

 

 

 

Investments in unconsolidated entities

 

 

 479,629 

 

 

 438,936 

 

 

Goodwill

 

 

 68,321 

 

 

 68,321 

 

 

Deferred loan expenses

 

 

 70,875 

 

 

 66,327 

 

 

Cash and cash equivalents

 

 

 158,780 

 

 

 1,033,764 

 

 

Restricted cash

 

 

 72,821 

 

 

 107,657 

 

 

Receivables and other assets

 

 

 553,310 

 

 

 411,095 

 

 

 

Total other assets

 

 

 1,403,736 

 

 

 2,126,100 

Total assets

 

$

 23,083,957 

 

$

 19,549,109 

 

 

 

 

 

 

 

 

 

 

 

Liabilities and equity

 

 

 

 

 

 

Liabilities:

 

 

 

 

 

 

 

 

Borrowings under unsecured line of credit arrangements

 

$

 130,000 

 

$

 0 

 

 

Senior unsecured notes

 

 

 7,379,308 

 

 

 6,114,151 

 

 

Secured debt

 

 

 3,058,248 

 

 

 2,336,196 

 

 

Capital lease obligations

 

 

 84,458 

 

 

 81,552 

 

 

Accrued expenses and other liabilities

 

 

 640,573 

 

 

 462,099 

Total liabilities

 

 

 11,292,587 

 

 

 8,993,998 

 

 

 

 

 

 

 

 

 

 

 

Redeemable noncontrolling interests

 

 

 35,039 

 

 

 34,592 

 

 

 

 

 

 

 

 

 

 

 

Equity:

 

 

 

 

 

 

 

 

Preferred stock

 

 

 1,017,361 

 

 

 1,022,917 

 

 

Common stock

 

 

 289,461 

 

 

 260,396 

 

 

Capital in excess of par value

 

 

 12,418,520 

 

 

 10,543,690 

 

 

Treasury stock

 

 

 (21,263) 

 

 

 (17,875) 

 

 

Cumulative net income

 

 

 2,329,869 

 

 

 2,184,819 

 

 

Cumulative dividends

 

 

 (4,600,854) 

 

 

 (3,694,579) 

 

 

Accumulated other comprehensive income (loss)

 

 

 (24,531) 

 

 

 (11,028) 

 

 

Other equity

 

 

 6,020 

 

 

 6,461 

 

 

 

Total Health Care REIT, Inc. stockholders’ equity

 

 

 11,414,583 

 

 

 10,294,801 

 

 

Noncontrolling interests

 

 

 341,748 

 

 

 225,718 

Total equity

 

 

 11,756,331 

 

 

 10,520,519 

Total liabilities and equity

 

$

 23,083,957 

 

$

 19,549,109 

 

See accompanying notes

 

78


 

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

HEALTH CARE REIT, INC. AND SUBSIDIARIES

 

 

 

 

 

Year Ended December 31,

 

 

 

 

2013

 

2012

 

2011

 

 

 

 

 

 

 

 

 

 

 

 

Revenues:

 

 

 

 

 

 

 

 

 

 

Rental income

  

$

 1,227,589 

 

$

 1,063,214 

 

$

 804,732 

 

Resident fees and services

 

 

 1,616,290 

 

 

 697,494 

 

 

 456,085 

 

Interest income

 

 

 32,663 

 

 

 39,065 

 

 

 41,070 

 

Other income

 

 

 4,066 

 

 

 5,271 

 

 

 11,295 

 

 

Total revenues

 

 

 2,880,608 

 

 

 1,805,044 

 

 

 1,313,182 

 

 

 

 

 

 

 

 

 

 

 

 

Expenses:

 

 

 

 

 

 

 

 

 

 

Interest expense

 

 

 458,360 

 

 

 361,565 

 

 

 290,981 

 

Property operating expenses

 

 

 1,206,813 

 

 

 567,989 

 

 

 375,064 

 

Depreciation and amortization

 

 

 865,800 

 

 

 506,220 

 

 

 386,478 

 

General and administrative

 

 

 108,318 

 

 

 97,341 

 

 

 77,201 

 

Transaction costs

 

 

 133,401 

 

 

 61,609 

 

 

 70,224 

 

Loss (gain) on derivatives, net

 

 

 4,470 

 

 

 (1,825) 

 

 

 - 

 

Loss (gain) on extinguishment of debt, net

 

 

 (909) 

 

 

 (775) 

 

 

 (979) 

 

Provision for loan losses

 

 

 2,110 

 

 

 27,008 

 

 

 2,010 

 

 

Total expenses

 

 

 2,778,363 

 

 

 1,619,132 

 

 

 1,200,979 

Income from continuing operations before income taxes

 

 

 

 

 

 

 

 

 

 

and income from unconsolidated entities

 

 

 102,245 

 

 

 185,912 

 

 

 112,203 

Income tax (expense) benefit

 

 

 (7,491) 

 

 

 (7,612) 

 

 

 (1,388) 

Income (loss) from unconsolidated entities

 

 

 (8,187) 

 

 

 2,482 

 

 

 5,772 

 

 

 

 

 

 

 

 

 

 

 

 

Income from continuing operations

 

 

 86,567 

 

 

 180,782 

 

 

 116,587 

Discontinued operations:

 

 

 

 

 

 

 

 

 

 

Gain (loss) on sales of properties, net

 

 

 49,138 

 

 

 100,549 

 

 

 61,160 

 

Impairment of assets

 

 

 - 

 

 

 (29,287) 

 

 

 (12,194) 

 

Income (loss) from discontinued operations, net

 

 

 2,575 

 

 

 42,796 

 

 

 47,163 

 

 

Discontinued operations, net

 

 

 51,713 

 

 

 114,058 

 

 

 96,129 

 

 

 

 

 

 

 

 

 

 

 

 

Net income

 

 

 138,280 

 

 

 294,840 

 

 

 212,716 

Less:  Preferred stock dividends

 

 

 66,336 

 

 

 69,129 

 

 

 60,502 

Less:  Preferred stock redemption charge

 

 

 - 

 

 

 6,242 

 

 

 - 

Less:  Net income (loss) attributable to noncontrolling interests(1)

 

 

 (6,770) 

 

 

 (2,415) 

 

 

 (4,894) 

Net income attributable to common stockholders

 

$

 78,714 

 

$

 221,884 

 

$

 157,108 

 

 

 

 

 

 

 

 

 

 

 

 

Average number of common shares outstanding:

 

 

 

 

 

 

 

 

 

 

Basic

 

 

 276,929 

 

 

 224,343 

 

 

 173,741 

 

Diluted

 

 

 278,761 

 

 

 225,953 

 

 

 174,401 

 

 

 

 

 

 

 

 

 

 

 

 

Earnings per share:

 

 

 

 

 

 

 

 

 

 

Basic:

 

 

 

 

 

 

 

 

 

 

Income from continuing operations

 

 

 

 

 

 

 

 

 

 

 

attributable to common stockholders

 

$

 0.10 

 

$

 0.48 

 

$

 0.35 

 

Discontinued operations, net

 

 

 0.19 

 

 

 0.51 

 

 

 0.55 

 

Net income attributable to common stockholders*

 

$

 0.28 

 

$

 0.99 

 

$

 0.90 

 

 

 

 

 

 

 

 

 

 

 

 

 

Diluted:

 

 

 

 

 

 

 

 

 

 

Income from continuing operations

 

 

 

 

 

 

 

 

 

 

 

attributable to common stockholders

 

$

 0.10 

 

$

 0.48 

 

$

 0.35 

 

Discontinued operations, net

 

 

 0.19 

 

 

 0.50 

 

 

 0.55 

 

Net income attributable to common stockholders*

 

$

 0.28 

 

$

 0.98 

 

$

 0.90 

 

 

 

 

 

 

 

 

 

 

* Amounts may not sum due to rounding

(1) Includes amounts attributable to redeemable noncontrolling interests

See accompanying notes

 

79


 

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (CONTINUED)

HEALTH CARE REIT, INC. AND SUBSIDIARIES

 

 

 

 

 

Year Ended December 31,

 

 

 

 

2013

 

2012

 

2011

 

 

 

 

 

 

 

 

 

 

 

 

Net income

 

$

 138,280 

 

$

 294,840 

 

$

 212,716 

 

 

 

  

 

 

 

 

 

 

 

 

Other comprehensive income (loss):

 

 

 

 

 

 

 

 

 

 

Unrecognized gain/(loss) on equity investments

 

 

 (173) 

 

 

 403 

 

 

 (122) 

 

Change in net unrealized gains (losses) on cash flow hedges:

 

 

 

 

 

 

 

 

 

 

 

Unrealized gain/(loss)

 

 

 1,898 

 

 

 3,200 

 

 

 3,189 

 

 

Reclassification adjustment realized in net income

 

 

 0 

 

 

 (1,596) 

 

 

 (1,781) 

 

Unrecognized actuarial gain/(loss)

 

 

 1,522 

 

 

 (226) 

 

 

 (2,115) 

 

Foreign currency translation gain/(loss)

 

 

 (23,247) 

 

 

 (881) 

 

 

 0 

Total other comprehensive income (loss)

 

 

 (20,000) 

 

 

 900 

 

 

 (829) 

 

 

 

 

 

 

 

 

 

 

 

 

Total comprehensive income

 

 

 118,280 

 

 

 295,740 

 

 

 211,887 

Total comprehensive income attributable to noncontrolling interests(1)

 

 

 (13,267) 

 

 

 (2,415) 

 

 

 (4,894) 

Total comprehensive income attributable to stockholders

 

$

 105,013 

 

$

 293,325 

 

$

 206,993 

 

 

 

 

 

 

 

 

 

 

 

 

(1) Includes amounts attributable to redeemable noncontrolling interests.

 

 

 

 

See accompanying notes

 

80


 

CONSOLIDATED STATEMENTS OF EQUITY

HEALTH CARE REIT, INC. AND SUBSIDIARIES

 

(in thousands)

 

 

 

 

 

 

 

 

 

 

 

 

Accumulated

 

 

 

 

 

 

 

 

 

 

 

 

 

Capital in

 

 

 

 

 

 

Other

 

 

 

 

 

 

 

 

 

Preferred

Common

Excess of

Treasury

Cumulative

Cumulative

Comprehensive

Other

Noncontrolling

 

 

 

 

 

Stock

Stock

Par Value

Stock

Net Income

Dividends

Income

Equity

Interests

Total

Balances at December 31, 2010

$

 291,667 

 

 147,155 

 

 4,932,468 

 

 (11,352) 

 

 1,676,196 

 

 (2,427,881) 

 

 (11,099) 

 

 5,697 

 

 130,249 

$

 4,733,100 

Comprehensive income:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income

 

 

 

 

 

 

 

 

 

 217,610 

 

 

 

 

 

 

 

 (3,591) 

 

 214,019 

 

Other comprehensive income:

 

 

 

 

 

 

 

 

 

 

 

 

 

 (829) 

 

 

 

 

 

 (829) 

Total comprehensive income

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 213,190 

Net change in noncontrolling interests

 

 

 

 

 

 6,468 

 

 

 

 

 

 

 

 

 

 

 

 27,225 

 

 33,693 

Amounts related to issuance of common stock

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

from dividend reinvestment and stock

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

incentive plans, net of forfeitures

 

 

 

 2,895 

 

 138,989 

 

 (2,183) 

 

 

 

 

 

 

 

 (1,494) 

 

 

 

 138,207 

Net proceeds from sale of common stock

 

 

 

 42,249 

 

 1,964,102 

 

 

 

 

 

 

 

 

 

 

 

 

 

 2,006,351 

Proceeds from issuance of preferred shares

 

 718,750 

 

 

 

 (22,313) 

 

 

 

 

 

 

 

 

 

 

 

 

 

 696,437 

Option compensation expense

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 1,917 

 

 

 

 1,917 

Cash dividends paid:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Common stock cash dividends

 

 

 

 

 

 

 

 

 

 

 

 (483,746) 

 

 

 

 

 

 

 

 (483,746) 

 

Preferred stock cash dividends

 

 

 

 

 

 

 

 

 

 

 

 (60,502) 

 

 

 

 

 

 

 

 (60,502) 

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:

 

 

 

 

 

 

 

 

 

 

 

 

 

 900 

 

 

 

 

 

 900 

Total comprehensive income

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 296,675 

Net change in noncontrolling interests

 

 

 

 

 

 (7,136) 

 

 

 

 

 

 

 

 

 

 

 

 73,315 

 

 66,179 

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 

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

 

 

 

 988 

 

 (1,543) 

 

 

 

 

 

 

 

 

 

 

 

 

 

 (555) 

Conversion of preferred stock

 

 (5,556) 

 

116

 

 5,440 

 

 

 

 

 

 

 

 

 

 

 

 

 

 0 

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 

 

See accompanying notes

 

81


 

CONSOLIDATED STATEMENTS OF CASH FLOWS

HEALTH CARE REIT, INC. AND SUBSIDIARIES

 

 

 

 

 

  

Year Ended December 31,

(In thousands)

  

2013

 

2012

 

2011

Operating activities

  

 

 

 

 

 

 

 

 

Net income

  

$

 138,280 

 

$

 294,840 

 

$

 212,716 

Adjustments to reconcile net income to

  

 

 

 

 

 

 

 

 

 

net cash provided from (used in) operating activities:

  

 

 

 

 

 

 

 

 

 

 

Depreciation and amortization

  

 

 873,960 

 

 

 533,585 

 

 

 423,605 

 

 

Other amortization expenses

  

 

 8,097 

 

 

 15,185 

 

 

 16,851 

 

 

Provision for loan losses

  

 

 2,110 

 

 

 27,008 

 

 

 2,010 

 

 

Impairment of assets

  

 

 0 

 

 

 29,287 

 

 

 12,194 

 

 

Stock-based compensation expense

  

 

 20,177 

 

 

 18,521 

 

 

 10,786 

 

 

Loss (gain) on derivatives, net

  

 

 4,470 

 

 

 (1,825) 

 

 

 0 

 

 

Loss (gain) on extinguishment of debt, net

  

 

 (909) 

 

 

 (775) 

 

 

 (979) 

 

 

Loss (income) from unconsolidated entities

 

 

 8,187 

 

 

 (2,482) 

 

 

 (5,772) 

 

 

Rental income in excess of cash received

  

 

 (46,068) 

 

 

 (32,362) 

 

 

 (31,578) 

 

 

Amortization related to above (below) market leases, net

  

 

 460 

 

 

 165 

 

 

 (2,507) 

 

 

Loss (gain) on sales of properties, net

  

 

 (49,138) 

 

 

 (100,549) 

 

 

 (61,160) 

 

 

Distributions by unconsolidated entities

  

 

 8,885 

 

 

 17,607 

 

 

 6,149 

 

 

Increase (decrease) in accrued expenses and other liabilities

  

 

 67,557 

 

 

 38,213 

 

 

 10,653 

 

 

Decrease (increase) in receivables and other assets

  

 

 (47,571) 

 

 

 (18,285) 

 

 

 (4,744) 

Net cash provided from (used in) operating activities

  

 

 988,497 

 

 

 818,133 

 

 

 588,224 

 

 

 

 

  

 

 

 

 

 

 

 

 

Investing activities

  

 

 

 

 

 

 

 

 

 

Cash disbursed for acquisitions

  

 

 (3,597,955) 

 

 

 (2,923,251) 

 

 

 (4,514,271) 

 

Cash disbursed for capital improvements to existing properties

 

 

 (135,832) 

 

 

 (135,450) 

 

 

 (89,247) 

 

Cash disbursed for construction in progress

 

 

 (247,560) 

 

 

 (286,410) 

 

 

 (301,604) 

 

Capitalized interest

  

 

 (6,700) 

 

 

 (9,777) 

 

 

 (13,164) 

 

Investment in real estate loans receivable

  

 

 (117,059) 

 

 

 (665,094) 

 

 

 (51,477) 

 

Other investments, net of payments

  

 

 (15,634) 

 

 

 25,425 

 

 

 (22,986) 

 

Principal collected on real estate loans receivable

  

 

 102,886 

 

 

 35,020 

 

 

 188,811 

 

Contributions to unconsolidated entities

  

 

 (99,769) 

 

 

 (227,735) 

 

 

 (2,784) 

 

Distributions by unconsolidated entities

 

 

 30,853 

 

 

 13,136 

 

 

 9,135 

 

Proceeds from (payments on) derivatives

 

 

 (6,803) 

 

 

 6,652 

 

 

 0 

 

Decrease (increase) in restricted cash

  

 

 79,957 

 

 

 (35,766) 

 

 

 30,248 

 

Proceeds from sales of real property

  

 

 482,023 

 

 

 610,271 

 

 

 247,210 

Net cash provided from (used in) investing activities

  

 

 (3,531,593) 

 

 

 (3,592,979) 

 

 

 (4,520,129) 

 

 

 

 

  

 

 

 

 

 

 

 

 

Financing activities

  

 

 

 

 

 

 

 

 

 

Net increase (decrease) under unsecured lines of credit arrangements

  

 

 130,000 

 

 

 (610,000) 

 

 

 310,000 

 

Proceeds from issuance of senior unsecured notes

  

 

 1,756,192 

 

 

 2,025,708 

 

 

 1,381,086 

 

Payments to extinguish senior unsecured notes

  

 

 (517,625) 

 

 

 (370,524) 

 

 

 (3) 

 

Net proceeds from the issuance of secured debt

  

 

 89,208 

 

 

 157,418 

 

 

 119,030 

 

Payments on secured debt

  

 

 (674,103) 

 

 

 (406,210) 

 

 

 (83,998) 

 

Net proceeds from the issuance of common stock

  

 

 1,854,637 

 

 

 3,581,292 

 

 

 2,137,594 

 

Net proceeds from the issuance of preferred stock

  

 

 0 

 

 

 277,687 

 

 

 696,437 

 

Redemption of preferred stock

  

 

 0 

 

 

 (275,000) 

 

 

 0 

 

Decrease (increase) in deferred loan expenses

  

 

 (13,503) 

 

 

 (7,152) 

 

 

 (28,867) 

 

Contributions by noncontrolling interests(1)

  

 

 5,072 

 

 

 24,115 

 

 

 8,604 

 

Distributions to noncontrolling interests(1)

  

 

 (35,592) 

 

 

 (29,353) 

 

 

 (30,705) 

 

Acquisitions of non-controlling interests

 

 

 (23,247) 

 

 

 0 

 

 

 0 

 

Cash distributions to stockholders

  

 

 (906,275) 

 

 

 (722,450) 

 

 

 (544,248) 

 

Other financing activities

 

 

 2,906 

 

 

 (403) 

 

 

 (1,113) 

Net cash provided from (used in) financing activities

  

 

 1,667,670 

 

 

 3,645,128 

 

 

 3,963,817 

 

 

 

 

 

 

 

 

 

 

 

 

 

Effect of foreign currency translation on cash and cash equivalents

 

 

 442 

 

 

 0 

 

 

 0 

 

 

 

 

 

 

 

 

 

 

 

 

 

Increase (decrease) in cash and cash equivalents

  

 

 (874,984) 

 

 

 870,282 

 

 

 31,912 

Cash and cash equivalents at beginning of period

  

 

 1,033,764 

 

 

 163,482 

 

 

 131,570 

Cash and cash equivalents at end of period

  

$

 158,780 

 

$

 1,033,764 

 

$

 163,482 

 

 

 

 

 

 

 

 

 

 

 

 

 

Supplemental cash flow information:

 

 

 

 

 

 

 

 

 

 

Interest paid

 

$

 447,108 

 

$

 369,511 

 

$

 285,884 

 

Income taxes paid

 

 

 12,110 

 

 

 3,071 

 

 

 389 

 

(1)     Includes amounts attributable to redeemable noncontrolling interests.

See accompanying notes.

82


 

HEALTH CARE REIT, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

 

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, 2013, our diversified portfolio consisted of 1,199 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

83


 

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. Other equity investments include an investment in available-for-sale securities. These equity investments represented a minimal ownership interest in these companies. 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.

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 assumed re-leasing period.

     The net book value of long-lived assets is reviewed quarterly on a property by property basis to determine if facts and circumstances suggest that the assets may be impaired or that the depreciable life may need to be changed. We consider external factors relating to each asset and the existence of a master lease which may link the cash flows of an individual asset to a larger portfolio of assets leased to the same tenant. If these factors and the projected undiscounted cash flows of the asset over the remaining

84


 

HEALTH CARE REIT, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

 

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 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.

85


 

HEALTH CARE REIT, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

 

     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 February 2013, the Financial Accounting Standards Board issued Accounting Standards Update No. 2013-02, “Comprehensive Income (Topic 220): Reporting of Amounts Reclassified Out of Accumulated Other Comprehensive Income,” which requires companies to provide information about the amounts that are reclassified out of accumulated other comprehensive income by component and by the respective line items of net income.  The amendment to authoritative guidance associated with comprehensive income was effective for us on January 1, 2013.  The adoption of this guidance did not have a material impact on our consolidated financial statements.

Reclassifications

     Certain amounts in prior years have been reclassified to conform to current year presentation.

86


 

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, 2013, 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,

 

 

 

 

2013(1)

 

 

2012

 

 

2011

Land and land improvements  

 

$

 54,596  

 

$

 87,242 

 

$

 212,156 

Buildings and improvements  

 

 

 265,390  

 

 

 984,077 

 

 

 3,108,508 

Restricted cash

 

 

 189 

 

 

 0 

 

 

 0 

Receivables and other assets  

 

 

 1,020  

 

 

 119 

 

 

 9,101 

 

Total assets acquired(2)

 

 

 321,195  

 

 

 1,071,438 

 

 

 3,329,765 

Secured debt  

 

 

 (9,810) 

 

 

 (89,881) 

 

 

 (93,431) 

Accrued expenses and other liabilities

 

 

 (540) 

 

 

 (3,542) 

 

 

 (91,290) 

 

Total liabilities assumed

 

 

 (10,350) 

 

 

 (93,423) 

 

 

 (184,721) 

Capital in excess of par

 

 

 0 

 

 

 921 

 

 

 0 

Noncontrolling interests

 

 

 0 

 

 

 (17,215) 

 

 

 0 

Non-cash acquisition related activity

 

 

 (151) 

 

 

 (616) 

 

 

 (2,532) 

 

Cash disbursed for acquisitions

 

 

 310,694 

 

 

 961,105 

 

 

 3,142,512 

Construction in progress additions

 

 

 141,129 

 

 

 179,684 

 

 

 182,626 

Less:  Capitalized interest

 

 

 (4,698) 

 

 

 (6,041) 

 

 

 (5,752) 

Cash disbursed for construction in progress

 

 

 136,431 

 

 

 173,643 

 

 

 176,874 

Capital improvements to existing properties

 

 

 34,926 

 

 

 67,026 

 

 

 49,336 

 

Total cash invested in real property, net of cash acquired  

 

$

 482,051  

 

$

 1,201,774 

 

$

 3,368,722 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(1)

Includes acquisitions with an aggregate purchase price of $212,043,000 for which the allocation of the purchase price consideration is preliminary and subject to change.

(2)

Excludes $2,031,000 of cash acquired during the year ended December 31, 2012.

 

 

 

 

 

 

 

 

 

 

 

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):

87


 

HEALTH CARE REIT, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Year Ended December 31,

 

 

 

 

2013(1)

 

 

2012

 

 

2011

Land and land improvements  

 

$

 445,152  

 

$

 146,332 

 

$

 112,350 

Buildings and improvements  

 

 

 4,275,046  

 

 

 1,341,560 

 

 

 1,512,764 

Acquired lease intangibles  

 

 

 396,444  

 

 

 118,077 

 

 

 122,371 

Restricted cash

 

 

 44,427 

 

 

 1,296 

 

 

 20,699 

Receivables and other assets  

 

 

 79,564  

 

 

 10,125 

 

 

 901 

 

Total assets acquired(2)

 

 

 5,240,633  

 

 

 1,617,390 

 

 

 1,769,085 

Secured debt  

 

 

 (1,275,245) 

 

 

 (124,190) 

 

 

 (796,272) 

Accrued expenses and other liabilities

 

 

 (96,709) 

 

 

 (17,347) 

 

 

 (44,483) 

 

Total liabilities assumed

 

 

 (1,371,954) 

 

 

 (141,537) 

 

 

 (840,755) 

Capital in excess of par

 

 

 - 

 

 

 0 

 

 

 (6,017) 

Noncontrolling interests

 

 

 (232,575) 

 

 

 (56,884) 

 

 

 (69,984) 

Non-cash acquisition related activity(3)

 

 

 (555,563) 

 

 

 - 

 

 

 - 

     Cash disbursed for acquisitions

 

 

 3,080,541 

 

 

 1,418,969 

 

 

 852,329 

Construction in progress additions

 

 

 3,894 

 

 

 - 

 

 

 - 

Less:  Capitalized interest

 

 

 (57) 

 

 

 - 

 

 

 - 

Cash disbursed for construction in progress

 

 

 3,837 

 

 

 - 

 

 

 - 

Capital improvements to existing properties

 

 

 72,258 

 

 

 21,751 

 

 

 15,880 

 

Total cash invested in real property, net of cash acquired  

 

$

 3,156,636  

 

$

 1,440,720 

 

$

 868,209 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(1)

Includes an aggregate purchase price of $1,318,168,000 relating to the Revera Partnership for which the allocation of the purchase price consideration is preliminary and subject to change.

 

(2)

Excludes $92,148,000, $20,691,000 and $38,952,000 of cash acquired during the years ended December 31, 2013, 2012 and 2011, respectively.

(3)

Represents Sunrise loan and noncontrolling interest acquisitions during the first quarter of 2013.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

     Revera Acquisition

 

     On May 28, 2013, we completed the formation of our partnership (the “Revera Partnership”) with Revera Inc. to own and operate a portfolio of 47 seniors housing properties in Canada.  We own a 75% partnership interest and Revera Inc. owns the remaining 25% interest and manages the facilities.  The results of operations for the Revera Partnership have been included in our consolidated results of operations beginning on May 28, 2013 and are a component of our seniors housing operating segment.  Consolidation is based on a combination of ownership interest and control of operational decision-making authority.  The total purchase price of $1,318,168,000 for the 47 properties acquired has been allocated to the tangible and identifiable intangible assets and liabilities based upon their respective fair values in accordance with the Company’s accounting policies.  Such allocations have not been finalized as we are reviewing final asset valuations with our partner, and, as such, the allocation of the purchase consideration included in the accompanying Consolidated Balance Sheet as of December 31, 2013 is preliminary and subject to adjustment. 

 

     Sunrise Merger

 

     In August 2012, we entered into an Agreement and Plan of Merger (the “Merger Agreement”) with Sunrise Senior Living, Inc. (“Sunrise”), pursuant to which we agreed to acquire Sunrise in an all-cash merger (the “Merger”) in which Sunrise stockholders would receive $14.50 in cash for each share of Sunrise common stock. On January 9, 2013, we completed our acquisition of the Sunrise property portfolio.  The Sunrise Merger advances our strategic vision to own higher-end, private pay properties located in major metropolitan markets.  On July 1, 2013, we acquired the remaining interests in 49 previously unconsolidated properties.  As of December 31, 2013, 120 properties are wholly owned and five properties are held in unconsolidated entities (see Note 7 for additional information).  The total purchase price of approximately $4,155,052,000, including approximately $2,456,011,000 of cash consideration, has been allocated to the tangible and identifiable intangible assets and liabilities in the table above based on respective fair values in accordance with our accounting policies.

 

     We recognized $654,717,000, $22,930,000 and $0 of revenues and $216,827,000, $11,698,000 and $0 of net operating income from continuing operations related to the consolidated Sunrise portfolio during the twelve month periods ended December 31, 2013, 2012 and 2011, respectively.  In addition, we incurred $77,187,000 of transaction costs, which include advisory fees, due diligence

88


 

HEALTH CARE REIT, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

 

costs, severances, and fees for legal and valuation services during the twelve month period ended December 31, 2013.  These amounts are included in the seniors housing operating results reflected in Note 17.

 

The following unaudited pro forma consolidated results of operations have been prepared as if the Sunrise Merger had occurred as of January 1, 2012 based on the purchase price allocations discussed above. Amounts are in thousands, except per share data:

 

 

 

 

 

 

 

 

 

 

 

Year Ended December 31,

 

 

 

2013

 

2012

Revenues

 

$

 3,047,072 

 

$

 2,487,332 

Income (loss) from continuing operations attributable to common stockholders

 

$

 17,091 

 

$

 (50,424) 

Income (loss) from continuing operations attributable to common stockholders per share:

 

 

 

 

 

 

 

Basic

 

$

 0.06 

 

$

 (0.23) 

 

Diluted

 

$

 0.06 

 

$

 (0.23) 

 

 

 

 

 

 

 

 

     Medical Facilities Activity

 

          Accrued contingent consideration related to certain medical facility acquisitions was $26,187,000 and $34,692,000 as of December 31, 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):

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Year Ended December 31,

 

 

 

 

2013(1)

 

 

2012

 

 

2011

Land and land improvements  

 

$

 14,515  

 

$

 68,619 

 

$

 48,342 

Buildings and improvements  

 

 

 251,291  

 

 

 648,409 

 

 

 520,976 

Acquired lease intangibles  

 

 

 9,432  

 

 

 115,233 

 

 

 60,609 

Restricted cash  

 

 

 505  

 

 

 975 

 

 

 100 

Receivables and other assets  

 

 

 344  

 

 

 4,469 

 

 

 3,053 

 

Total assets acquired(2)

 

 

 276,087  

 

 

 837,705 

 

 

 633,080 

Secured debt  

 

 

 (55,884) 

 

 

 (267,527) 

 

 

 (72,225) 

Accrued expenses and other liabilities

 

 

 (1,041) 

 

 

 (25,928) 

 

 

 (34,214) 

 

Total liabilities assumed

 

 

 (56,925) 

 

 

 (293,455) 

 

 

 (106,439) 

Noncontrolling interests

 

 

 (386) 

 

 

 (193) 

 

 

 (7,211) 

Non-cash acquisition related activity(3)

 

 

 (12,056) 

 

 

 (880) 

 

 

 0 

     Cash disbursed for acquisitions

 

 

 206,720 

 

 

 543,177 

 

 

 519,430 

Construction in progress additions

 

 

 127,989 

 

 

 134,830 

 

 

 165,593 

Less:  Capitalized interest

 

 

 (1,945) 

 

 

 (3,736) 

 

 

 (7,412) 

          Accruals

 

 

 (18,752) 

 

 

 (18,327) 

 

 

 (33,451) 

Cash disbursed for construction in progress

 

 

 107,292 

 

 

 112,767 

 

 

 124,730 

Capital improvements to existing properties

 

 

 28,648 

 

 

 46,673 

 

 

 24,031 

 

Total cash invested in real property, net of cash acquired  

 

$

 342,660  

 

$

 702,617 

 

$

 668,191 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(1)

Includes acquisitions with an aggregate purchase price of $222,147,000 for which the allocation of the purchase price consideration is preliminary and subject to change.

(2)

Excludes $2,154,000 of cash acquired during the year ended December 31, 2011.

(3)

Represents non-cash consideration exchanged in an asset swap transaction during the year ended December 31, 2013.

 

 

 

 

 

 

 

 

 

 

 

     Construction Activity

 

     The following is a summary of the construction projects that were placed into service and began generating revenues during the periods presented:

89


 

HEALTH CARE REIT, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Year Ended

 

 

 

 

December 31, 2013

 

December 31, 2012

 

December 31, 2011

 

Development projects:

 

 

 

 

 

 

 

 

 

 

 

Seniors housing triple-net

 

$

 133,181 

 

$

 146,913 

 

$

 114,161 

 

 

Medical facilities

 

 

 127,363 

 

 

 189,135 

 

 

 355,935 

 

 

Total development projects

 

 

 260,544 

 

 

 336,048 

 

 

 470,096 

 

Expansion projects

 

 

 26,395 

 

 

 4,983 

 

 

 45,414 

Total construction in progress conversions

 

$

 286,939 

 

$

 341,031 

 

$

 515,510 

 

 

 

 

 

 

 

 

 

 

 

 

      At December 31, 2013, 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):

 

 

 

 

2014

 

$

 293,766 

2015

 

 

 286,361 

2016

 

 

 273,716 

2017

 

 

 256,029 

2018

 

 

 235,245 

Thereafter

 

 

 1,330,688 

Totals

 

$

 2,675,805 

 

 

 

 

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, 2013

 

December 31, 2012

Assets:

  

 

 

 

 

 

 

In place lease intangibles

  

$

 937,357 

 

$

 541,729 

 

Above market tenant leases

  

 

 55,939 

 

 

 56,086 

 

Below market ground leases

  

 

 59,165 

 

 

 61,450 

 

Lease commissions

  

 

 18,293 

 

 

 14,419 

 

Gross historical cost

  

 

 1,070,754 

 

 

 673,684 

 

Accumulated amortization

  

 

 (571,008) 

 

 

 (257,242) 

 

Net book value

  

$

 499,746 

 

$

 416,442 

 

 

  

 

 

 

 

 

 

Weighted-average amortization period in years

  

 

16.7

 

 

16.4

 

 

  

 

 

 

 

 

Liabilities:

  

 

 

 

 

 

 

Below market tenant leases

  

$

 76,381 

 

$

 77,036 

 

Above market ground leases

  

 

 9,490 

 

 

 9,490 

 

Gross historical cost

  

 

 85,871 

 

 

 86,526 

 

Accumulated amortization

  

 

 (34,434) 

 

 

 (27,753) 

 

Net book value

  

$

 51,437 

 

$

 58,773 

 

 

  

 

 

 

 

 

 

Weighted-average amortization period in years

  

 

14.3

 

 

14.3

 

 

 

 

 

 

 

 

     The following is a summary of real estate intangible amortization for the periods presented (in thousands):

90


 

HEALTH CARE REIT, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Year Ended December 31,

 

 

2013

 

2012

 

2011

Rental income related to above/below market tenant leases, net

 

$

 748 

 

$

 1,120 

 

$

 3,340 

Property operating expenses related to above/below market ground leases, net

 

 

 (1,208) 

 

 

 (1,285) 

 

 

 (1,161) 

Depreciation and amortization related to in place lease intangibles and lease commissions

 

 

 (246,938) 

 

 

 (103,044) 

 

 

 (98,856) 

 

 

 

 

 

 

 

 

 

 

     The future estimated aggregate amortization of intangible assets and liabilities is as follows for the periods presented (in thousands):

 

 

 

 

 

 

 

 

 

 

Assets

 

 

Liabilities

2014

 

$

 217,179 

 

$

 6,623 

2015

 

 

 60,154 

 

 

 5,646 

2016

 

 

 27,400 

 

 

 5,232 

2017

 

 

 21,393 

 

 

 4,937 

2018

 

 

 18,532 

 

 

 4,610 

Thereafter

 

 

 155,088 

 

 

 24,389 

Totals

 

$

 499,746 

 

$

 51,437 

 

 

 

 

 

 

 

5. Dispositions, Assets Held for Sale and Discontinued Operations

Impairment of assets as reflected in our consolidated statements of comprehensive income relate to properties designated as held for sale and represent the charges necessary to adjust the carrying values to estimated fair values less costs to sell based on current sales price expectations.  The following is a summary of our real property disposition activity for the periods presented (in thousands):

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Year Ended

 

 

 

December 31, 2013

 

December 31, 2012

 

December 31, 2011

Real property dispositions:

 

 

 

 

 

 

 

 

 

 

Seniors housing triple-net

 

$

 189,572 

 

$

 372,378 

 

$

 150,755 

 

Medical facilities

 

 

 259,367 

 

 

 149,344 

 

 

 35,295 

 

Total dispositions

 

 

 448,939 

 

 

 521,722 

 

 

 186,050 

Gain (loss) on sales of real property, net

 

 

 49,138 

 

 

 100,549 

 

 

 61,160 

Seller financing on sales of real property

 

 

 (3,850) 

 

 

 (12,000) 

 

 

 0 

Non-cash disposition activity

 

 

 (12,204) 

 

 

 0 

 

 

 0 

Proceeds from real property sales

 

$

 482,023 

 

$

 610,271 

 

$

 247,210 

 

 

 

 

 

 

 

 

 

 

 

We have reclassified the income and expenses attributable to all properties sold prior to or held for sale at December 31, 2013 to discontinued operations.  Expenses include an allocation of interest expense based on property carrying values and our weighted-average cost of debt.  The following illustrates the reclassification impact as a result of classifying properties as discontinued operations for the periods presented (in thousands):

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Year Ended December 31,

 

 

 

2013

 

2012

 

2011

Revenues:

 

 

 

 

 

 

 

 

 

 

Rental income

 

$

 18,377 

 

$

 96,378 

 

$

 124,113 

Expenses:

 

  

 

 

  

 

 

  

 

 

Interest expense

 

  

 4,246 

 

 

 21,735 

 

 

 31,018 

 

Property operating expenses

 

  

 3,396 

 

 

 4,482 

 

 

 8,806 

 

Provision for depreciation

 

  

 8,160 

 

 

 27,365 

 

 

 37,126 

Income (loss) from discontinued operations, net

 

$

 2,575 

 

$

 42,796 

 

$

 47,163 

 

 

 

 

 

 

 

 

 

 

 

91


 

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,

 

 

 

2013

 

2012

Mortgage loans

 

$

 146,987 

 

$

 87,955 

Other real estate loans

 

 

 185,159 

 

 

 807,710 

Totals

 

$

 332,146 

 

$

 895,665 

 

 

 

 

 

 

 

 

     The following is a summary of our real estate loan activity for the periods presented (in thousands):

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Year Ended

 

 

 

December 31, 2013

 

December 31, 2012

 

December 31, 2011

 

 

 

Seniors

 

 

 

 

Seniors

Seniors

 

 

 

 

Seniors

 

 

 

 

 

 

Housing

Medical

 

 

 

Housing

Housing

Medical

 

 

 

Housing

Medical

 

 

 

 

 

Triple-net

Facilities

Totals

 

Triple-net

Operating(1)

Facilities

Totals

 

Triple-net

Facilities

Totals

Advances on real estate loans receivable:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Investments in new loans

 

$

 41,180 

$

 4,095 

$

 45,275 

 

$

 2,220 

$

 580,834 

$

 38,336 

$

 621,390 

 

$

 18,541 

$

 - 

$

 18,541 

 

Draws on existing loans

 

 

 67,451 

 

 8,183 

 

 75,634 

 

 

 41,754 

 

 - 

 

 1,950 

 

 43,704 

 

 

 29,752 

 

 3,184 

 

 32,936 

 

   Sub-total

 

 

 108,631 

 

 12,278 

 

 120,909 

 

 

 43,974 

 

 580,834 

 

 40,286 

 

 665,094 

 

 

 48,293 

 

 3,184 

 

 51,477 

 

Less: Seller financing on property sales

 

 

 (3,850) 

 

 - 

 

 (3,850) 

 

 

 - 

 

 - 

 

 - 

 

 - 

 

 

 - 

 

 - 

 

 - 

 

Net cash advances on real estate loans

 

 

 104,781 

 

 12,278 

 

 117,059 

 

 

 43,974 

 

 580,834 

 

 40,286 

 

 665,094 

 

 

 48,293 

 

 3,184 

 

 51,477 

Receipts on real estate loans receivable:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Loan payoffs

 

 

 68,950 

 

 646 

 

 69,596 

 

 

 10,387 

 

 - 

 

 2,168 

 

 12,555 

 

 

 162,705 

 

 2,943 

 

 165,648 

 

Principal payments on loans

 

 

 30,821 

 

 2,469 

 

 33,290 

 

 

 19,786 

 

 - 

 

 2,679 

 

 22,465 

 

 

 17,856 

 

 5,307 

 

 23,163 

 

Total receipts on real estate loans

 

 

 99,771 

 

 3,115 

 

 102,886 

 

 

 30,173 

 

 - 

 

 4,847 

 

 35,020 

 

 

 180,561 

 

 8,250 

 

 188,811 

Net cash advances (receipts) on real estate loans

 

 

 5,010 

 

 9,163 

 

 14,173 

 

 

 13,801 

 

 580,834 

 

 35,439 

 

 630,074 

 

 

 (132,268) 

 

 (5,066) 

 

 (137,334) 

Change in balance due to foreign currency translation

 

 1,402 

 

 - 

 

 1,402 

 

 

 - 

 

 - 

 

 - 

 

 - 

 

 

 - 

 

 - 

 

 - 

Net change in real estate loans receivable

 

$

 6,412 

$

 9,163 

$

 15,575 

 

$

 13,801 

$

 580,834 

$

 35,439 

$

 630,074 

 

$

 (132,268) 

$

 (5,066) 

$

 (137,334) 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(1) Represents loan to Sunrise Senior Living, Inc. that was acquired upon merger consummation on January 9, 2013 as discussed in Note 3.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

     The following is a summary of the allowance for losses on loans receivable for the periods presented (in thousands):

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Year Ended December 31,

 

 

 

2013(1)

 

2012(2)

 

2011(3)

Balance at beginning of  year

 

$

 - 

 

$

 - 

 

$

 1,276 

Provision for loan losses

 

 

 2,110 

 

 

 27,008 

 

 

 2,010 

Charge-offs

 

  

 (2,110) 

 

  

 (27,008) 

 

  

 (3,286) 

Balance at end of  year

 

$

 - 

 

$

 - 

 

$

 - 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(1) Provision and charge-off amounts relate to one active adult community in our seniors housing triple-net segment.

(2) Provision and charge-off amounts relate to one entrance fee community in our seniors housing triple-net segment.

(3) Provision and charge-off amounts relate to one hospital in our medical facilities segment.

 

 

 

 

 

 

 

 

 

 

 

The following is a summary of our loan impairments (in thousands):

92


 

HEALTH CARE REIT, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Year Ended December 31,

 

 

 

2013

 

2012

 

2011

Balance of impaired loans at end of  year

 

$

 500 

 

$

 4,230 

 

$

 6,244 

Allowance for loan losses

 

 

 - 

 

 

 - 

 

 

 - 

Balance of impaired loans not reserved

 

$

 500 

 

$

 4,230 

 

$

 6,244 

Average impaired loans for the year

 

$

 2,365 

 

$

 5,237 

 

$

 7,968 

Interest recognized on impaired loans(1)

 

 

 - 

 

 

 44 

 

 

 - 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(1) Represents interest recognized prior to placement on non-accrual status.

 

 

 

 

 

 

 

 

 

 

 

7. Investments in Unconsolidated Entities

 

     During the year ended December 31, 2010, we entered into a joint venture investment with Forest City Enterprises (NYSE:FCE.A and FCE.B). We acquired a 49% interest in a seven-building life science campus located at University Park in Cambridge, Massachusetts, which is immediately adjacent to the campus of the Massachusetts Institute of Technology.

 

     During the year ended December 31, 2012, we entered into a joint venture with Chartwell Retirement Residences (TSX:CSH.UN). The portfolio contains 42 properties in Canada, 39 of which are owned 50% by us and Chartwell, and three of which we wholly own. All properties are managed by Chartwell. The 39 properties are accounted for under the equity method of accounting and do not qualify as VIEs (variable interest entities). The joint venture is structured under RIDEA. See Note 18 for additional information.  The aggregate remaining unamortized basis difference of our investment in this joint venture of $9,063,000 at December 31, 2013 is primarily attributable to transaction costs that will be amortized over the weighted-average useful life of the related properties and included in the reported amount of income from unconsolidated entities.

 

     In conjunction with the Sunrise Merger, we acquired joint venture interests in 54 properties and a 20% interest in a newly formed Sunrise management company, which manages the entire property portfolio. On July 1, 2013, we acquired the remaining interests in 49 of the properties. Our original investment of $49,759,000 relating to the five remaining unconsolidated properties and the management company is recorded as an investment in unconsolidated entities on the balance sheet.

 

     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.  Summarized combined financial information for our investments in unconsolidated entities held as of December 31, 2013 is as follows (dollars in thousands):

 

 

 

 

 

 

 

 

Year Ended December 31,

 

 

 

2013

 

 

2012

 

Net real estate investments

$

 1,589,590 

 

$

 1,675,877 

 

Other assets

 

 564,109 

 

 

 110,629 

 

Total assets

 

 2,153,699 

 

 

 1,786,506 

 

Total liabilities

 

 1,227,053 

 

 

 970,521 

 

Redeemable noncontrolling interests

 

 29,482 

 

 

 21,694 

 

Total equity

$

 897,164 

 

$

 794,291 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Year Ended December 31,

 

 

 

2013(1)

 

 

2012(2)

 

 

2011

Total revenues

 

$

 1,619,251 

 

$

 324,941 

 

$

 160,860 

Net income (loss)

 

 

 (17,439) 

 

 

 10,702 

 

 

 20,124 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(1) Beginning January 9, 2013, includes the financial information for the Sunrise management company and the five remaining unconsolidated Sunrise properties discussed above.

(2) Beginning May 1, 2012, includes the financial information for the Chartwell unconsolidated entities discussed above.

 

 

 

 

 

 

 

 

 

 

                           

93


 

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, 2013, 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

 

 120 

 

$

 4,019,340 

 

19%

 

Genesis HealthCare

 

 177 

 

 

 2,652,988 

 

12%

 

Revera

 

 47 

 

 

 1,170,552 

 

5%

 

Benchmark Senior Living

 

 39 

 

 

 940,124 

 

4%

 

Belmont Village

 

 19 

 

 

 850,500 

 

4%

 

Remaining portfolio

 

 740 

 

 

 12,046,717 

 

56%

 

Totals

 

 1,142 

 

$

 21,680,221 

 

100%

 

 

 

 

 

 

 

 

 

_____________________

(1)     Genesis is in our seniors housing triple-net segment. Sunrise, Revera, and Belmont Village are in our seniors housing operating segment. Benchmark is in both our seniors housing triple-net and seniors housing operating segments.

(2)     Investments with our top five relationships comprised 37% of total investments at December 31, 2012.

  

9. Borrowings Under Line of Credit Arrangement and Related Items

     At December 31, 2013, we had a $2,250,000,000 unsecured line of credit arrangement with a consortium of 30 banks. We have an option to upsize the facility by up to an additional $1,000,000,000 through an accordion feature, allowing for the aggregate commitment of up to $3,250,000,000.  The arrangement also allows us to borrow up to $500,000,000 in certain alternative currencies.  At December 31, 2013, we had $130,000,000 outstanding at 1.34%.  The revolving credit facility is scheduled to expire March 31, 2017, but can be extended for an additional year at our option.     Borrowings under the revolver are subject to interest payable in periods no longer than three months at either the agent bank’s prime rate of interest or the applicable margin over LIBOR interest rate, at our option (1.34% at December 31, 2013). The applicable margin is based on certain of our debt ratings and was 1.175% at December 31, 2013. In addition, we pay a facility fee annually to each bank based on the bank’s commitment amount. The facility fee depends on certain of our debt ratings and was 0.225% at December 31, 2013.  Principal is due upon expiration of the agreement.

     The following information relates to aggregate borrowings under our unsecured lines of credit arrangements for the periods presented (dollars in thousands):

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Year Ended December 31,

 

 

 

2013

 

2012

 

2011

Balance outstanding at year end

 

$

 130,000 

 

$

 0 

 

$

 610,000 

Maximum amount outstanding at any month end

 

$

 1,019,050 

 

$

 897,000 

 

$

 710,000 

Average amount outstanding (total of daily

 

  

 

 

  

 

 

  

 

 

principal balances divided by days in period)

 

$

 488,842 

 

$

 191,378 

 

$

 240,104 

Weighted-average interest rate (actual interest

 

 

 

 

 

 

 

 

 

 

expense divided by average borrowings outstanding)

 

 

1.45%

 

 

1.80%

 

 

1.51%

 

 

 

 

 

 

 

 

 

 

 

10. Senior Unsecured Notes and Secured Debt

We may repurchase, redeem or refinance convertible and non-convertible senior unsecured notes from time to time, taking advantage of favorable market conditions when available. We may purchase senior notes for cash through open market purchases, privately negotiated transactions, a tender offer or, in some cases, through the early redemption of such securities pursuant to their terms.   The non-convertible senior unsecured notes are redeemable at our option, at any time in whole or from time to time in part, at a redemption price equal to the sum of (1) the principal amount of the notes (or portion of such notes) being redeemed plus accrued and unpaid interest thereon up to the redemption date and (2) any “make-whole” amount due under the terms of the notes in connection with early redemptions.   Redemptions and repurchases of debt, if any, will depend on prevailing market conditions, our liquidity requirements, contractual restrictions and other factors.  At December 31, 2013, the annual principal payments due on these debt obligations were as follows (in thousands):

94


 

HEALTH CARE REIT, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Senior

 

Secured

 

 

 

 

 

Unsecured Notes(1,2)

 

Debt (1,3)

 

Totals

2014

 

$

 0 

 

$

 330,295 

 

$

 330,295 

2015(4)

 

 

 485,029 

 

 

 409,239 

 

 

 894,268 

2016(5)

 

 

 1,200,000 

 

 

 382,917 

 

 

 1,582,917 

2017

 

 

 450,000 

 

 

 324,110 

 

 

 774,110 

2018

 

 

 450,000 

 

 

 429,284 

 

 

 879,284 

Thereafter(6)

 

 

 4,836,678 

 

 

 1,134,866 

 

 

 5,971,544 

Totals

 

$

 7,421,707 

 

$

 3,010,711 

 

$

 10,432,418 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(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 1.5% to 6.5%.

(3) Annual interest rates range from 1.0% to 8.0%.  Carrying value of the properties securing the debt totaled $6,243,475,000 at December 31, 2013.

(4) On July 30, 2012, we completed funding on a $250,000,000 Canadian denominated unsecured term loan (approximately $235,029,000 based on the Canadian/U.S. Dollar exchange rate on December 31, 2013). The loan matures on July 27, 2015 (with an option to extend for an additional year at our discretion) and bears interest at the Canadian Dealer Offered Rate plus 145 basis points (2.7% at December 31, 2013).

(5) On January 8, 2013, we completed funding on a $500,000,000 unsecured term loan.  The loan matures on March 31, 2016 (with an option to extend for two additional years at our discretion) and bears interest at LIBOR plus 135 basis points (1.5% at December 31, 2013).

(6) On November 20, 2013, we completed funding on a £550,000,000 (approximately $911,570,000 based on the Sterling/U.S. Dollar exchange rate on December 31, 2013) of 4.8% senior unsecured notes due 2028.

 

 

 

 

 

 

 

 

 

 

    The following is a summary of our senior unsecured note principal activity during the periods presented (dollars in thousands):

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Year Ended

 

December 31, 2013

 

December 31, 2012

 

December 31, 2011

 

 

 

 

Weighted Avg.

 

 

 

 

Weighted Avg.

 

 

 

 

Weighted Avg.

 

Amount

 

Interest Rate

 

Amount

 

Interest Rate

 

Amount

 

Interest Rate

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Beginning balance

 $ 

 5,894,403 

 

4.675%

 

 $ 

 4,464,927 

 

5.133%

 

 $ 

 3,064,930 

 

5.129%

Debt issued

 

 1,786,930 

 

3.824%

 

 

 1,800,000 

 

3.691%

 

 

 1,400,000 

 

5.143%

Debt extinguished

  

 (300,000) 

 

6.000%

 

  

 (76,853) 

 

8.000%

 

  

 (3) 

 

4.750%

Debt redeemed

 

 (219,295) 

 

3.000%

 

 

 (293,671) 

 

4.750%

 

 

 - 

 

0.000%

Foreign currency

 

 24,640 

 

4.800%

 

 

 - 

 

0.000%

 

 

 - 

 

0.000%

Ending balance

 $ 

 7,186,678 

 

4.456%

 

 $ 

 5,894,403 

 

4.675%

 

 $ 

 4,464,927 

 

5.133%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

     During the twelve months ended December 31, 2010, we issued $494,403,000 of 3.00% senior unsecured convertible notes due December 2029, generating net proceeds of $486,084,000. 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, 2014, 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, 2013, we received notice of conversion from holders of $219,295,000 of the senior unsecured convertible notes.  These notes were converted into 988,007 shares of common stock and we recognized a loss on extinguishment of $2,423,000, which is reflected on the consolidated statement of comprehensive income.

 

     The following is a summary of our secured debt principal activity for the periods presented (dollars in thousands):  

95


 

HEALTH CARE REIT, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Year Ended

 

 

  

December 31, 2013

 

December 31, 2012

 

December 31, 2011

 

 

 

 

 

Weighted Avg.

 

 

 

 

Weighted Avg.

 

 

 

 

Weighted Avg.

 

 

Amount

 

Interest Rate

 

Amount

 

Interest Rate

 

Amount

 

Interest Rate

Beginning balance

 

$

 2,311,586 

 

5.140%

 

$

 2,108,384 

 

5.285%

 

$

 1,133,715 

 

5.972%

Debt issued

 

 

 89,208 

 

4.982%

 

 

 157,418 

 

4.212%

 

 

 116,903 

 

5.697%

Debt assumed

 

 

 1,290,858 

 

4.159%

 

 

 444,744 

 

5.681%

 

 

 940,854 

 

4.444%

Debt extinguished

 

 

 (614,375) 

 

3.730%

 

 

 (360,403) 

 

4.672%

 

 

 (55,317) 

 

5.949%

Principal payments

 

 

 (56,205) 

 

5.248%

 

 

 (38,744) 

 

5.456%

 

 

 (27,771) 

 

5.845%

Foreign currency

 

 

 (10,361) 

 

4.013%

 

 

 187 

 

5.637%

 

 

 - 

 

0.000%

Ending balance

 

$

 3,010,711 

 

5.095%

 

$

 2,311,586 

 

5.140%

 

$

 2,108,384 

 

5.285%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

     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, 2013, 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 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 $1,890,000 of losses, 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. 

     On February 15, 2012, we entered into a forward exchange contract to purchase $250,000,000 Canadian Dollars at a fixed rate in the future.  The forward contract was used to limit exposure to fluctuations in the Canadian Dollar to U.S. Dollar exchange rate associated with our initial cash investment funded for the Chartwell transaction.  On May 3, 2012, this forward exchange contract was settled for a gain of $2,772,000, which was reflected on the consolidated statement of comprehensive income, and the proceeds were used to fund our investment.  On May 3, 2012, we also entered into a forward contract to sell $250,000,000 Canadian Dollars at a fixed rate on July 31, 2012 to hedge our net investment. We settled the forward contract on July 31, 2012 with the net loss reflected in OCI. Upon settlement of the forward contract we entered into a $250,000,000 Canadian Dollar term loan, which has been designated as a net investment hedge of our Chartwell investment, and changes in fair value are reported in OCI as no ineffectiveness is anticipated.

     On August 30, 2012, we entered into two cross currency swaps to purchase £125,000,000.  The swaps were used to limit exposure to fluctuations in the Pound Sterling to U.S. Dollar exchange rate associated with our initial cash investment funded for the Sunrise transaction. The cross currency swaps have been designated as a net investment hedge, and changes in fair value are reported in OCI as no ineffectiveness is anticipated.

     On September 17, 2012, we entered into two forward exchange contracts to purchase $14,000,000 Canadian Dollars and £23,000,000 at a fixed rate in the future.  The forward contracts were used to limit exposure to fluctuations in foreign currency

96


 

HEALTH CARE REIT, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

 

associated with future international transactions.  These forward contacts were settled on March 22, 2013 for a realized loss of $2,309,000, which was reflected on the consolidated statement of comprehensive income.

     On January 14, 2013 and January 15, 2013, we entered into three forward exchange contracts to sell £675,000,000 at a fixed rate in the future.  The forward exchange contracts were used to hedge a portion of our investment in the United Kingdom at a fixed Pound Sterling rate in U.S. dollars and were settled on July 12, 2013. We received proceeds of $63,514,000.  The forward exchange contracts were designated as net investment hedges and the change in fair value is reported in OCI.

     On April 4, 2013, we entered into three forward exchange contracts to purchase $600,000,000 Canadian Dollars at a fixed rate in the future and three forward exchange contracts to sell $600,000,000 Canadian Dollars at a fixed rate in the future. The forward contracts were used to limit exposure to fluctuations in the Canadian Dollar to U.S. Dollar exchange rate associated with our initial cash investment funded for an acquisition in Canada. On May 22, 2013, the three forward exchange purchase contracts were settled for a realized loss of $10,355,000, which was reflected on the consolidated statement of comprehensive income, and the proceeds were used to fund our investment. On May 22, 2013, we designated the three forward exchange sell contracts as net investment hedges, and changes in fair value are reported in OCI as no ineffectiveness is anticipated. Prior to designating the three forward exchange sell contracts as net investments, they were marked to fair value and an unrealized gain of $13,071,000 was reflected on the consolidated statement of comprehensive income.  In December 2013, the three forward exchange sell contracts were settled with the net gain reflected in OCI, and we entered into three new forward exchange sell contracts to sell $600,000,000 Canadian Dollars at a fixed rate in the future.  These new forward exchange contracts were designated as net investment hedges, and changes in fair value are reported in OCI as no ineffectiveness is anticipated.

     On July 1, 2013, we entered into two forward exchange contracts to purchase £144,411,000 at a fixed rate in the future. The forward contracts were used to limit exposure to fluctuations in the Pound Sterling to U.S. Dollar exchange rate associated with our initial cash investment for an acquisition in the United Kingdom. In July 2013, these forward contracts were settled for a realized loss of $4,872,000, which was reflected on the consolidated statement of comprehensive income, and the proceeds were used to fund our investment.

     On July 12, 2013, we entered into three forward exchange contracts to sell £675,000,000 at a fixed rate in the future.  The forward exchange contracts were used to hedge a portion of our investment in the United Kingdom at a fixed Pound Sterling rate in U.S. dollars and mature on December 31, 2013.  The forward exchange contracts were designated as net investment hedges and changes in fair value are reported in OCI as no ineffectiveness was expected.  In November 2013, we sold £550,000,000 aggregate principal amount of the Company’s 4.800% senior notes due 2028.  In conjunction with this transaction, we settled the three forward exchange sell contracts with the net loss reflected in OCI.  Upon settlement of the forward exchange sell contracts, we entered into one new forward exchange contract to sell £225,000,000 at a fixed rate in the future. The new forward exchange contract and the £550,000,000 senior notes were designated as a net investment hedge of our investment in the United Kingdom, and changes in the fair value of the forward exchange sell contracts and senior notes are reported in OCI as no ineffectiveness is anticipated.

     The following presents the impact of derivative instruments on the statement of comprehensive income and OCI for the periods presented (in thousands):

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Year Ended

 

 

 

Location

 

December 31, 2013

 

December 31, 2012

 

December 31, 2011

Gain (loss) on interest rate swap recognized in OCI (effective portion)

 

OCI

 

$

 (16) 

 

$

 3,200 

 

$

 3,189 

Gain (loss) on interest rate swaps reclassified from AOCI into income (effective portion)

 

Interest expense

 

 

 (1,914) 

 

 

 (1,596) 

 

 

 1,781 

Gain (loss) on forward exchange contracts recognized in income

 

Gain (loss) on derivatives, net

 

 

 (4,470) 

 

 

 1,921 

 

 

 0 

Gain (loss) on interest rate swaps recognized in income

 

Gain (loss) on derivatives, net

 

 

 0 

 

 

 (96) 

 

 

 0 

Gain (loss) on forward exchange contracts and term loans designated as net investment hedge recognized in OCI

 

OCI

 

 

 (28,244) 

 

 

 (5,134) 

 

 

 0 

 

 

 

 

 

 

 

 

 

 

 

 

 

97


 

HEALTH CARE REIT, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

 

12. Commitments and Contingencies

     At December 31, 2013, we had five outstanding letter of credit obligations totaling $5,103,000 and expiring between 2013 and 2014.  At December 31, 2013, we had outstanding construction in process of $141,085,000 for leased properties and were committed to providing additional funds of approximately $243,083,000 to complete construction. At December 31, 2013, we had contingent purchase obligations totaling $65,217,000. These contingent purchase obligations relate to unfunded capital improvement obligations and contingent obligations on acquisitions. Rents due from the tenant are increased to reflect the additional investment in the property.

     We evaluate our leases for operating versus capital lease treatment in accordance with ASC Topic 840 “Leases.”  A lease is classified as a capital lease if it provides for transfer of ownership of the leased asset at the end of the lease term, contains a bargain purchase option, has a lease term greater than 75% of the economic life of the leased asset, or if the net present value of the future minimum lease payments are in excess of 90% of the fair value of the leased asset. Certain leases contain bargain purchase options and have been classified as capital leases.  At December 31, 2013, we had operating lease obligations of $881,694,000 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, 2013, aggregate future minimum rentals to be received under these noncancelable subleases totaled $44,106,000.

     At December 31, 2013, future minimum lease payments due under operating and capital leases are as follows (in thousands):

 

 

 

 

 

 

 

 

 

Operating Leases

 

Capital Leases(1)

2014

 

$

 14,117 

 

$

 5,392 

2015

 

 

 14,057 

 

 

 13,157 

2016

 

 

 14,170 

 

 

 4,732 

2017

 

 

 14,210 

 

 

 4,732 

2018

 

 

 14,300 

 

 

 4,679 

Thereafter

 

 

 810,840 

 

 

 84,426 

Totals

 

$

 881,694 

 

$

 117,118 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(1) Amounts above represent principal and interest obligations under capital lease arrangements.  Related assets with a gross value of $185,244,000 and accumulated depreciation of $13,132,000 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, 2013

 

December 31, 2012

Preferred Stock, $1.00 par value:

 

 

 

 

 

Authorized shares

 

 50,000,000 

 

 50,000,000 

 

Issued shares

 

 26,108,236 

 

 26,224,854 

 

Outstanding shares

 

 26,108,236 

 

 26,224,854 

 

 

 

 

 

 

Common Stock, $1.00 par value:

 

 

 

 

 

Authorized shares

 

 400,000,000 

 

 400,000,000 

 

Issued shares

 

 290,024,789 

 

 260,780,109 

 

Outstanding shares

 

 289,563,651 

 

 260,373,754 

 

 

 

 

 

 

     Preferred Stock.  The following is a summary of our preferred stock activity during the periods presented (dollars in thousands, except per share amounts):

98


 

HEALTH CARE REIT, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Year Ended

 

 

December 31, 2013

 

December 31, 2012

 

December 31, 2011

 

 

 

 

Weighted Avg.

 

 

 

Weighted Avg.

 

 

 

Weighted Avg.

 

 

Shares

 

Dividend Rate

 

Shares

 

Dividend Rate

 

Shares

 

Dividend Rate

 

 

 

 

 

 

 

 

 

 

 

 

 

Beginning balance

 

 26,224,854 

 

6.493%

 

 25,724,854 

 

7.013%

 

 11,349,854 

 

7.663%

Shares issued

 

 - 

 

0.000%

 

 11,500,000 

 

6.500%

 

 14,375,000 

 

6.500%

Shares redeemed

 

 - 

 

0.000%

 

 (11,000,000) 

 

7.716%

 

 - 

 

0.000%

Shares converted

 

 (116,618) 

 

6.000%

 

 - 

 

0.000%

 

 - 

 

0.000%

Ending balance

 

 26,108,236 

 

6.496%

 

 26,224,854 

 

6.493%

 

 25,724,854 

 

7.013%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

     During the three months ended December 31, 2010, we issued 349,854 shares of 6.00% Series H Cumulative Convertible and Redeemable Preferred Stock in connection with a business combination.  These shares have a liquidation value of $25.00 per share. 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 December 31, 2015.  During the twelve months ended December 31, 2013, 116,618 shares were converted into common stock.

 

     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

 

 

 

 

 

 

 

 

 

 

 

 

March 2011 public issuance

 

 28,750,000 

 

$

 49.25 

 

$

 1,415,938 

 

$

 1,358,543 

November 2011 public issuance

 

 12,650,000 

 

 

 50.00 

 

 

 632,500 

 

 

 606,595 

2011 Dividend reinvestment plan issuances

 

 2,534,707 

 

 

 48.44 

 

 

 122,794 

 

 

 121,846 

2011 Equity shelf program issuances

 

 848,620 

 

 

 50.53 

 

 

 42,888 

 

 

 41,982 

2011 Option exercises

 

 232,081 

 

 

 37.17 

 

 

 8,628 

 

 

 8,628 

2011 Totals

 

 45,015,408 

 

 

 

 

$

 2,222,748 

 

$

 2,137,594 

 

 

 

 

 

 

 

 

 

 

 

 

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 

 

 

  

 

 

 0 

 

 

 0 

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 

 

 

  

 

 

 0 

 

 

 0 

2013 Preferred stock conversions

 

 116,618 

 

 

 

 

 

 0 

 

 

 0 

2013 Equity issued in acquisition of noncontrolling interest

 

 1,108,917 

 

 

  

 

 

 0 

 

 

 0 

2013 Totals

 

 28,857,194 

 

 

 

 

$

 1,914,856 

 

$

 1,854,637 

 

 

 

 

 

 

 

 

 

 

 

 

     During the twelve months ended December 31, 2013, we acquired the remaining 20% noncontrolling interest in an existing

99


 

HEALTH CARE REIT, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

 

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 and preferred shares outstanding as described above.  Please refer to Notes 2 and 18 for information related to federal income tax of dividends.  The following is a summary of our dividend payments (in thousands, except per share amounts):

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Year Ended

 

 

December 31, 2013

 

December 31, 2012

 

December 31, 2011

  

 

Per Share

 

Amount

 

Per Share

 

Amount

 

Per Share

 

Amount

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Common Stock

 

$

 3.06000 

 

$

 839,939 

 

$

 2.96000 

 

$

 653,321 

 

$

 2.83500 

 

$

 483,746 

Series D Preferred Stock

 

 

 - 

 

 

 0 

 

 

 0.50301 

 

 

 2,012 

 

 

 1.96875 

 

 

 7,875 

Series F Preferred Stock

 

 

 - 

 

 

 0 

 

 

 0.48715 

 

 

 3,410 

 

 

 1.90625 

 

 

 13,344 

Series H Preferred Stock

 

 

 2.85840 

 

 

 930 

 

 

 2.85840 

 

 

 1,000 

 

 

 2.85840 

 

 

 1,000 

Series I Preferred Stock

 

 

 3.25000 

 

 

 46,719 

 

 

 3.25000 

 

 

 46,719 

 

 

 1.33159 

 

 

 38,283 

Series J Preferred Stock

 

 

 1.62510 

 

 

 18,687 

 

 

 1.39038 

 

 

 15,988 

 

 

 - 

 

 

 0 

Totals

 

 

 

 

$

 906,275 

 

 

 

 

$

 722,450 

 

 

 

 

$

 544,248 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

     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, 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

 

 

 0 

 

 

 0 

 

 

 0 

 

 

 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) 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Balance at December 31, 2011

 

$

 0 

 

$

 (619) 

 

$

 (2,748) 

 

$

 (8,561) 

 

$

 (11,928) 

Other comprehensive income before reclassification adjustments

 

  

 (881) 

 

  

 403 

 

  

 (226) 

 

  

 2,808 

 

  

 2,104 

Reclassification amount to net income

 

 

 0 

 

 

 0 

 

 

 0 

 

 

 (1,204)(1)

 

 

 (1,204) 

Net current-period other comprehensive income

 

  

 (881) 

 

  

 403 

 

  

 (226) 

 

  

 1,604 

 

  

 900 

Balance at December 31, 2012

 

$

 (881) 

 

$

 (216) 

 

$

 (2,974) 

 

$

 (6,957) 

 

$

 (11,028) 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(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. Expense, which is recognized as the options vest based on the market value at the date of the award, totaled $1,114,000, $2,875,000 and $1,917,000 for the years ended December 31, 2013, 2012 and 2011, respectively.

 

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

100


 

HEALTH CARE REIT, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

 

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 three years for non-employee directors to five years for officers and key employees. Options expire ten years from the date of grant.

 

Valuation Assumptions

     The fair value of each option grant is estimated on the date of grant using the Black-Scholes-Merton option pricing model with the following weighted-average assumptions:

 

 

 

 

 

 

 

Year Ended

 

 

December 31, 2012

 

December 31, 2011

Dividend yield

 

5.16%

 

5.74%

Expected volatility

 

35.15%

 

34.80%

Risk-free interest rate

 

1.48%

 

2.87%

Expected life (in years)

 

 7.0 

 

 7.0 

Weighted-average fair value

 

$11.11

 

$9.60

 

 

 

 

 

     There were no options granted for the year ended December 31, 2013.  The dividend yield represented the dividend yield of our common stock on the dates of grant. Our computation of expected volatility was based on historical volatility. The risk-free interest rates used were the 7-year U.S. Treasury Notes yield on the date of grant. The expected life was based on historical experience of similar awards, giving consideration to the contractual terms, vesting schedules and expectations regarding future employee behavior.

 

Option Award Activity

     The following table summarizes information about stock option activity for the periods presented:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Year Ended

 

 

December 31, 2013

 

December 31, 2012

 

December 31, 2011

 

 

Number of

 

Weighted

 

Number of

 

Weighted

 

Number of

 

Weighted

 

 

Shares

 

Average

 

Shares

 

Average

 

Shares

 

Average

Stock Options

 

(000's)

 

Exercise Price

 

(000's)

 

Exercise Price

 

(000's)

 

Exercise Price

Options at beginning of year

  

 1,162 

 

$

 46.40 

  

 1,252 

 

$

 42.12 

  

 1,207 

 

$

 39.45 

Options granted

  

 - 

 

 

 - 

  

 332 

 

 

 57.33 

  

 289 

 

 

 49.17 

Options exercised

  

 (214) 

 

 

 42.16 

  

 (341) 

 

 

 40.11 

  

 (232) 

 

 

 36.92 

Options terminated

  

 (14) 

 

 

 48.09 

  

 (81) 

 

 

 51.81 

  

 (12) 

 

 

 43.09 

Options at end of period

  

 934 

 

$

 47.35 

  

 1,162 

 

$

 46.40 

  

 1,252 

 

$

 42.12 

 

  

 

 

 

 

  

 

 

 

 

  

 

 

 

 

Options exercisable at end of period

  

 421 

 

$

 43.99 

  

 313 

 

$

 40.82 

  

 427 

 

$

 39.45 

Weighted average fair value of

  

 

 

 

 

  

 

 

 

 

  

 

 

 

 

   options granted during the period

  

  

 

 

 

  

  

 

$

 11.11 

  

  

 

$

 9.60 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

     The following table summarizes information about stock options outstanding at December 31, 2013:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Options Outstanding

 

Options Exercisable

 

 

Number

 

Weighted

 

Weighted Average

 

Number

 

Weighted

 

Weighted Average

 

 

Outstanding

 

Average

 

Remaining

 

Exercisable

 

Average

 

Remaining

Range of Per Share Exercise Prices

 

(thousands)

 

Exercise Price

 

Contract Life

 

(thousands)

 

Exercise Price

 

Contract Life

$30-$40

  

 195 

 

$

 36.80 

 

 4.3 

  

 130 

 

$

 36.70 

 

 3.9 

$40-$50

  

 461 

 

 

 45.77 

 

 5.8 

  

 236 

 

 

 44.86 

 

 5.1 

$50+

  

 278 

 

 

 57.33 

 

 8.0 

  

 55 

 

 

 57.33 

 

 8.0 

Totals

  

 934 

 

$

 47.35 

 

 6.1 

  

 421 

 

$

 43.99 

 

 5.1 

 

  

 

 

 

 

 

 

  

 

 

 

 

 

 

Aggregate intrinsic value

$

 6,855,000 

 

 

 

 

 

$

 4,224,000 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

The aggregate intrinsic value is calculated as the difference between the exercise price of the underlying options and the quoted price of our common stock for the options that were in-the-money at December 31, 2013.  During the years ended December 31, 2013, 2012

101


 

HEALTH CARE REIT, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

 

and 2011, the aggregate intrinsic value of options exercised under our stock incentive plans was $5,160,000, $6,186,000 and $3,390,000, respectively (determined as of the date of option exercise). 

 

As of December 31, 2013, there was approximately $2,073,000 of total unrecognized compensation cost related to unvested stock options granted under our stock incentive plans.  That cost is expected to be recognized over a weighted-average period of three years.  As of December 31, 2013, there was approximately $24,923,000 of total unrecognized compensation cost related to unvested restricted stock granted under our stock incentive plans.  That cost is expected to be recognized over a weighted-average period of three years.

 

The following table summarizes information about non-vested stock incentive awards as of December 31, 2013 and changes for the year ended December 31, 2013:

 

 

 

 

 

 

 

 

 

 

 

 

 

Stock Options

 

Restricted Stock

 

 

Number of

 

 

Weighted-Average

 

Number of

 

Weighted-Average

 

 

Shares

 

 

Grant Date

 

Shares

 

Grant Date

 

  

(000's)

 

 

Fair Value

 

(000's)

 

Fair Value

Non-vested at December 31, 2012

  

 849 

 

$

 8.97 

 

 601 

 

$

 52.60 

Vested

  

 (322) 

 

 

 8.50 

 

 (164) 

 

 

 47.50 

Granted

  

 - 

 

 

 - 

 

 364 

 

 

 61.97 

Terminated

  

 (14) 

 

 

 9.05 

 

 (13) 

 

 

 55.15 

Non-vested at December 31, 2013

  

 513 

 

$

 9.26 

 

 788 

 

$

 56.92 

 

 

 

 

 

 

 

 

 

 

 

We use the Black-Scholes-Merton option pricing model to estimate the value of stock option grants and expect to continue to use this acceptable option valuation model. We recognize compensation cost for share-based grants on a straight-line basis through the date the awards become fully vested or to the retirement eligible date, if sooner. Compensation cost totaled $20,177,000, $18,521,000 and $10,786,000 for the years ended December 31, 2013, 2012 and 2011, respectively.

 

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,

 

 

 

2013

 

2012

 

2011

Numerator for basic and diluted earnings

 

 

 

 

 

 

 

 

 

 

per share - net income attributable to

 

 

 

 

 

 

 

 

 

 

common stockholders

 

$

 78,714 

 

$

 221,884 

 

$

 157,108 

 

 

 

 

 

 

 

 

 

 

 

Denominator for basic earnings per

 

 

 

 

 

 

 

 

 

 

share: weighted-average shares

 

 

 276,929 

 

 

 224,343 

 

 

 173,741 

Effect of dilutive securities:

 

 

 

 

 

 

 

 

 

 

Employee stock options

 

 

 226 

 

 

 231 

 

 

 176 

 

Non-vested restricted shares

 

 

 457 

 

 

 312 

 

 

 246 

 

Convertible senior unsecured notes

 

 

 1,149 

 

 

 1,067 

 

 

 238 

Dilutive potential common shares

 

 

 1,832 

 

 

 1,610 

 

 

 660 

Denominator for diluted earnings per

 

 

 

 

 

 

 

 

 

 

share: adjusted-weighted average shares

 

 

 278,761 

 

 

 225,953 

 

 

 174,401 

 

 

 

 

 

 

 

 

 

 

 

Basic earnings per share

 

$

 0.28 

 

$

 0.99 

 

$

 0.90 

Diluted earnings per share

 

$

 0.28 

 

$

 0.98 

 

$

 0.90 

 

 

 

 

 

 

 

 

 

 

 

The diluted earnings per share calculations exclude the dilutive effect of 0, 182,000, and 0 stock options for the years ended December 31, 2013, 2012 and 2011, respectively, because the exercise prices were more than the average market price. The Series H Cumulative Convertible and Redeemable Preferred Stock and the Series I Cumulative Convertible Perpetual Preferred Stock were excluded from the calculations for 2013, 2012 and 2011 as the effect of the conversions were anti-dilutive.

102


 

HEALTH CARE REIT, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

 

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 Unsecured Line of Credit Arrangements — The carrying amount of the unsecured line of credit arrangements 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.

 

The carrying amounts and estimated fair values of our financial instruments are as follows (in thousands):

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

December 31, 2013

 

December 31, 2012

 

 

 

Carrying

 

Fair

 

Carrying

 

Fair

 

 

 

Amount

 

Value

 

Amount

 

Value

Financial Assets:

 

  

 

 

 

 

 

 

 

 

 

 

 

Mortgage loans receivable

 

$

 146,987 

 

$

 148,088 

 

$

 87,955 

 

$

 88,975 

 

Other real estate loans receivable

 

  

 185,159 

 

 

 188,920 

 

 

 807,710 

 

 

 820,195 

 

Available-for-sale equity investments

 

  

 1,211 

 

 

 1,211 

 

 

 1,384 

 

 

 1,384 

 

Cash and cash equivalents

 

  

 158,780 

 

 

 158,780 

 

 

 1,033,764 

 

 

 1,033,764 

 

Interest rate swap agreements

 

  

 38 

 

 

 38 

 

 

 0 

 

 

 0 

 

 

 

  

 

 

 

 

 

 

 

 

 

 

Financial Liabilities:

 

  

 

 

 

 

 

 

 

 

 

 

 

Borrowings under unsecured lines of credit arrangements

 

$

 130,000 

 

$

 130,000 

 

$

 0 

 

$

 0 

 

Senior unsecured notes

 

  

 7,379,308 

 

 

 7,743,730 

 

 

 6,114,151 

 

 

 6,793,424 

 

Secured debt

 

  

 3,058,248 

 

 

 3,168,775 

 

 

 2,336,196 

 

 

 2,515,145 

 

Interest rate swap agreements

 

 

 0 

 

 

 0 

 

 

 264 

 

 

 264 

 

Foreign currency forward contracts

 

 

 11,637 

 

 

 11,637 

 

 

 7,247 

 

 

 7,247 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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

103


 

HEALTH CARE REIT, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

 

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, 2013

 

 

Total

 

Level 1

 

Level 2

 

Level 3

Available-for-sale equity investments(1)

 

$

 1,211 

 

$

 1,211 

 

$

 0 

 

$

 0 

Interest rate swap agreements(2)

 

 

 38 

 

 

 0 

 

 

 38 

 

 

 0 

Foreign currency forward contracts(2)

 

 

 (11,637) 

 

 

 0 

 

 

 (11,637) 

 

 

 0 

 Totals 

 

$

 (10,388) 

 

$

 1,211 

 

$

 (11,599) 

 

$

 0 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(1) Unrealized gains or losses on equity investments are recorded in accumulated other comprehensive income (loss) at each measurement date.

(2) Please see Note 11 for additional information.

 

 

 

 

 

 

 

 

 

 

 

 

 

Items Measured at Fair Value on a Nonrecurring Basis

 

In addition to items that are measured at fair value on a recurring basis, we also have assets and liabilities in our balance sheet that are measured at fair value on a nonrecurring basis.  As these assets and liabilities are not measured at fair value on a recurring basis, they are not included in the tables above. Assets, liabilities and noncontrolling interests that are measured at fair value on a nonrecurring basis include those acquired/assumed in business combinations (see Note 3) and asset impairments (see Note 5 for impairments of real property and Note 6 for impairments of loans receivable). We have determined that the fair value measurements included in each of these assets and liabilities rely primarily on Company-specific inputs and our assumptions about the use of the assets and settlement of liabilities, as observable inputs are not available. As such, we have determined that each of these fair value measurements generally reside within Level 3 of the fair value hierarchy. We estimate the fair value of real estate and related intangibles using the income approach and unobservable data such as net operating income and estimated capitalization and discount rates.  We also consider local and national industry market data including comparable sales, and commonly engage an external real estate appraiser to assist us in our estimation of fair value.  We estimate the fair value of assets held for sale based on current sales price expectations or, in the absence of such price expectations, Level 3 inputs described above.  We estimate the fair value of secured debt assumed in business combinations using current interest rates at which similar borrowings could be obtained on the transaction date.

 

17. Segment Reporting

     We invest in seniors housing and health care real estate. We evaluate our business and make resource allocations on our five operating segments: seniors housing triple-net, seniors housing operating, medical office buildings, hospitals and life science. Our seniors housing triple-net properties include skilled nursing/post-acute facilities, assisted living facilities, independent living/continuing care retirement communities, care homes (United Kingdom), 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 and independent supportive living facilities (Canada) that are owned and/or operated through RIDEA structures (see Notes 3 and 18).

104


 

HEALTH CARE REIT, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

 

     Our medical facility properties include medical office buildings, hospitals 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 hospital investments are leased and we are not involved in the management of the property. Our life science investment represents an investment in an unconsolidated entity (see Note 7). 

     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.

     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.

     Summary information for the reportable segments (which excludes unconsolidated entities) during the years ended December 31, 2013, 2012 and 2011 is as follows (in thousands):

  

 

 

 

 

 

 

 

 

 

 

 

Year Ended December 31, 2013:

 

Seniors Housing Triple-net

 

Seniors Housing Operating

 

Medical Facilities

 

Non-segment / Corporate

 

Total

Rental income

$

 780,785 

$

 - 

$

 446,804 

$

 - 

$

 1,227,589 

Resident fees and services

 

 - 

 

 1,616,290 

 

 - 

 

 - 

 

 1,616,290 

Interest income

 

 21,512 

 

 757 

 

 10,394 

 

 - 

 

 32,663 

Other income

 

 1,434 

 

 355 

 

 1,981 

 

 296 

 

 4,066 

Total revenues

 

 803,731 

 

 1,617,402 

 

 459,179 

 

 296 

 

 2,880,608 

 

 

 

 

 

 

 

 

 

 

 

Property operating expenses

 

 - 

 

 (1,089,239) 

 

 (117,574) 

 

 - 

 

 (1,206,813) 

Net operating income from continuing operations

 

 803,731 

 

 528,163 

 

 341,605 

 

 296 

 

 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

 

 (228,523) 

 

 (478,007) 

 

 (159,270) 

 

 - 

 

 (865,800) 

General and administrative

 

 - 

 

 - 

 

 - 

 

 (108,318) 

 

 (108,318) 

Transaction costs

 

 (24,350) 

 

 (107,066) 

 

 (1,985) 

 

 - 

 

 (133,401) 

(Loss) gain on extinguishment of debt, net

 

 (40) 

 

 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

$

 520,509 

$

 (145,279) 

$

 143,527 

$

 (416,512) 

$

 102,245 

 

 

 

 

 

 

 

 

 

 

 

Total assets

$

 9,232,833 

$

 8,984,316 

$

 4,718,527 

$

 148,281 

$

 23,083,957 

 

 

 

 

 

 

 

 

 

 

 

105


 

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

$

 684,097 

$

 - 

$

 379,117 

$

 - 

$

 1,063,214 

Resident fees and services

 

 - 

 

 697,494 

 

 - 

 

 - 

 

 697,494 

Interest income

 

 24,380 

 

 6,208 

 

 8,477 

 

 - 

 

 39,065 

Other income

 

 2,412 

 

 - 

 

 1,947 

 

 912 

 

 5,271 

Total revenues

 

 710,889 

 

 703,702 

 

 389,541 

 

 912 

 

 1,805,044 

 

 

 

 

 

 

 

 

 

 

 

Property operating expenses

 

 - 

 

 (471,678) 

 

 (96,311) 

 

 - 

 

 (567,989) 

Net operating income from continuing operations

 

 710,889 

 

 232,024 

 

 293,230 

 

 912 

 

 1,237,055 

 

 

 

 

 

 

 

 

 

 

 

Reconciling items:

 

 

 

 

 

 

 

 

 

 

Interest expense

 

 (1,745) 

 

 (67,524) 

 

 (28,878) 

 

 (263,418) 

 

 (361,565) 

(Loss) gain on derivatives, net

 

 (96) 

 

 1,921 

 

 - 

 

 - 

 

 1,825 

Depreciation and amortization

 

 (200,899) 

 

 (165,798) 

 

 (139,523) 

 

 - 

 

 (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

$

 443,031 

$

 (9,436) 

$

 112,164 

$

 (359,847) 

$

 185,912 

 

 

 

 

 

 

 

 

 

 

 

Total assets

$

 8,447,698 

$

 5,323,777 

$

 4,706,159 

$

 1,071,475 

$

 19,549,109 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Year Ended December 31, 2011

 

Seniors Housing Triple-net

 

Seniors Housing Operating

 

Medical Facilities

 

Non-segment / Corporate

 

Total

 

Rental income

$

 537,581 

$

 - 

$

 267,151 

$

 - 

$

 804,732 

 

Resident fees and services

 

 - 

 

 456,085 

 

 - 

 

 - 

 

 456,085 

 

Interest income

 

 34,068 

 

 - 

 

 7,002 

 

 - 

 

 41,070 

 

Other income

 

 6,620 

 

 - 

 

 3,985 

 

 690 

 

 11,295 

 

Total revenues

 

 578,269 

 

 456,085 

 

 278,138 

 

 690 

 

 1,313,182 

 

 

 

 

 

 

 

 

 

 

 

 

 

Property operating expenses

 

 - 

 

 (314,142) 

 

 (60,922) 

 

 - 

 

 (375,064) 

 

Net operating income from continuing operations

 

 578,269 

 

 141,943 

 

 217,216 

 

 690 

 

 938,118 

 

 

 

 

 

 

 

 

 

 

 

 

 

Reconciling items:

 

 

 

 

 

 

 

 

 

 

 

Interest expense

 

 2,802 

 

 (46,342) 

 

 (18,557) 

 

 (228,884) 

 

 (290,981) 

 

Depreciation and amortization

 

 (155,797) 

 

 (138,192) 

 

 (92,489) 

 

 - 

 

 (386,478) 

 

General and administrative

 

 - 

 

 - 

 

 - 

 

 (77,201) 

 

 (77,201) 

 

Transaction costs

 

 (27,993) 

 

 (36,328) 

 

 (5,903) 

 

 - 

 

 (70,224) 

 

Loss (gain) on extinguishment of debt, net

 

 - 

 

 979 

 

 - 

 

 - 

 

 979 

 

Provision for loan losses

 

 - 

 

 - 

 

 (2,010) 

 

 - 

 

 (2,010) 

 

Income (loss) from continuing operations before income taxes and income (loss) from unconsolidated entities

$

 397,281 

$

 (77,940) 

$

 98,257 

$

 (305,395) 

$

 112,203 

 

 

 

 

 

 

 

 

 

 

 

 

 

                           

106


 

HEALTH CARE REIT, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

 

     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, 2013

 

 

December 31, 2012

 

 

December 31, 2011

Revenues:

 

Amount

%

 

 

Amount

%

 

 

Amount

%

United States

$

 2,489,196 

86.4%

 

$

 1,778,507 

98.5%

 

$

 1,313,182 

100.0%

International

 

 391,412 

13.6%

 

 

 26,537 

1.5%

 

 

 - 

0.0%

Total

$

 2,880,608 

100.0%

 

$

 1,805,044 

100.0%

 

$

 1,313,182 

100.0%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

As of

 

 

 

 

 

 

December 31, 2013

 

 

December 31, 2012

 

 

 

 

Assets:

 

Amount

%

 

 

Amount

%

 

 

 

 

United States

$

 19,759,945 

85.6%

 

$

 18,692,214 

95.6%

 

 

 

 

International

 

 3,324,012 

14.4%

 

 

 856,895 

4.4%

 

 

 

 

Total

$

 23,083,957 

100.0%

 

$

 19,549,109 

100.0%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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,

 

 

 

 

2013

 

 

2012

 

 

2011

Per Share:

 

  

 

 

 

 

 

 

 

 

Ordinary income

 

$

 1.4928 

 

$

 1.5000 

 

$

 1.1472 

 

Return of capital

 

  

 1.4176 

 

  

 1.3376 

 

  

 1.4227 

 

Long-term capital gains

 

 

 0.0448 

 

 

 0.1176 

 

 

 0.1059 

 

Unrecaptured section 1250 gains

 

  

 0.1048 

 

  

 0.0048 

 

  

 0.1592 

 

Totals

 

$

 3.0600 

 

$

 2.9600 

 

$

 2.8350 

 

 

 

 

 

 

 

 

 

 

 

     Our consolidated provision for income taxes is as follows for the periods presented (dollars in thousands):

 

 

 

 

 

 

 

 

 

 

 

 

 

Year Ended December 31,

 

 

 

2013

 

 

2012

 

 

2011

Current

 

$

 12,389 

 

$

 4,785 

 

$

 389 

Deferred

 

  

 (4,898) 

 

  

 2,827 

 

  

 999 

Totals

 

$

 7,491 

 

$

 7,612 

 

$

 1,388 

 

 

 

 

 

 

 

 

 

 

      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, 2013, as a result of acquisitions located in Canada and the United Kingdom in 2012 and 2013, 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, 2013 primarily relates to state taxes, foreign taxes, and taxes based on income generated by entities that are structured as taxable REIT subsidiaries.

 

107


 

HEALTH CARE REIT, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

 

     For the tax year ended December 31, 2013, the Canadian and United Kingdom tax benefit amount included in the consolidated provision for income taxes was $484,000.  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.  We did not hold an interest in any entity located in a foreign jurisdiction for the year ended December 31, 2011.

 

     A reconciliation of income tax expense, which is computed by applying the federal corporate tax rate for the years ended December 31, 2013, 2012 and 2011, to the income tax provision/(benefit) is as follows for the periods presented (dollars in thousands):

 

 

 

 

 

 

 

 

 

 

 

 

 

Year Ended December 31,

 

 

 

2013

 

 

2012

 

 

2011

Tax at statutory rate on earnings from continuing operations before unconsolidated entities, noncontrolling interests and income taxes

 

$

 51,020 

 

$

 64,979 

 

$

 54,750 

Increase  / (decrease) in valuation allowance(1)

 

 

 18,444 

 

 

 9,234 

 

 

 (4,732) 

Tax at statutory rate on earnings not subject to federal income taxes

 

 

 (88,762) 

 

 

 (72,640) 

 

 

 (48,630) 

Foreign permanent depreciation

 

 

 22,313 

 

 

 - 

 

 

 - 

Other differences

 

 

 4,476 

 

 

 6,039 

 

 

 - 

Totals

 

$

 7,491 

 

$

 7,612 

 

$

 1,388 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(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,

 

 

 

2013

 

 

2012

 

 

2011

Investments and property, primarily differences in investment basis, depreciation and amortization, the basis of land assets and the treatment of interests and certain costs

 

$

 (34,236) 

 

$

 (2,144) 

 

$

 (1,577) 

Operating loss and interest deduction carryforwards

 

  

 67,215 

 

  

 8,552 

 

  

 1,488 

Expense accruals and other

 

 

 19,309 

 

 

 4,372 

 

 

 5,749 

Valuation allowance

 

 

 (71,955) 

 

 

 (12,199) 

 

 

 (2,965) 

Totals

 

$

 (19,667) 

 

$

 (1,419) 

 

$

 2,695 

 

 

 

 

 

 

 

 

 

 

    Management assesses 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, Management applied 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, 2013.  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 $71,955,000 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 Management believes 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):

108


 

HEALTH CARE REIT, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Year Ended December 31,

 

 

 

2013

 

 

2012

 

 

2011

Beginning balance

 

$

 12,199 

 

$

 2,965 

 

$

 7,697 

Additions:

 

 

 

 

 

 

 

 

 

   Purchase price accounting

 

  

 41,312 

 

  

 - 

 

  

 - 

   Expense

 

 

 18,444 

 

 

 9,234 

 

 

 - 

Deductions

 

 

 - 

 

 

 - 

 

 

 (4,732) 

Ending balance

 

$

 71,955 

 

$

 12,199 

 

$

 2,965 

 

 

 

 

 

 

 

 

 

 

       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 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, 2013, 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, 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, 2010 and subsequent years. The statute of limitations may vary in the states in which we own properties or conduct business.  We do not expect to be subject to audit by state taxing authorities for any year prior to the year ended December 31, 2007. We are also subject to audit by the Canada Revenue Agency and provincial authorities generally for periods subsequent to our REIT acquisition in May 2012 related to entities acquired or formed in connection with the acquisition, and by HM Revenue & Customs for periods subsequent to our REIT acquisitions in August 2012 and January 2013 related to entities acquired or formed in connection with the acquisitions.

 

     At December 31, 2013, we had a net operating loss (“NOL”) carryforward related to the REIT of $133,568,000.  Due to our uncertainty regarding the realization of certain deferred tax assets, we have not recorded a deferred tax asset related to NOLs generated by the REIT.  These amounts can be used to offset future taxable income (and/or taxable income for prior years if an audit determines that tax is owed), if any. The REIT will be entitled to utilize NOLs and tax credit carryforwards only to the extent that REIT taxable income exceeds our deduction for dividends paid.  The NOL carryforwards will expire through 2033.

 

At December 31, 2013 and 2012, respectively, we had a net operating loss carryforward related to Canadian entities of $50,958,000 and $4,275,000.  These Canadian losses have a 20-year carryforward period.  At December 31, 2013, we had a net operating loss carryforward related to United Kingdom entities of $238,741,000, consisting of $232,305,000 of net operating losses from acquisitions and $6,436,000 of net operating losses from current year activities.  These United Kingdom losses do not have a finite carryforward period. 

 

     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

109


 

HEALTH CARE REIT, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

 

authority.  The following table summarizes the activity related to our unrecognized tax benefits for the periods presented (dollars in thousands):

 

 

 

 

 

 

 

 

 

 

Year Ended December 31,

 

 

 

2013

 

 

2012

Gross unrecognized tax benefits at beginning of year

 

$

 6,098 

 

$

 6,098 

Increases (decreases) in unrecognized tax benefits related to a prior year

 

  

 76 

 

  

 (248) 

Increases (decreases) in unrecognized tax benefits related to the current year

 

 

 260 

 

 

 394 

Lapse in statute of limitations for assessment

 

 

 (21) 

 

 

 (146) 

Gross unrecognized tax benefits at end of year

 

$

 6,413 

 

$

 6,098 

 

 

 

 

 

 

 

     Of the total $6,413,000 of total liability for gross unrecognized tax benefits at December 31, 2013, $5,896,000 (exclusive of accrued interest and penalties) relates to the April 1, 2011 Genesis HealthCare Corporation transaction (“Genesis Acquisition”) and is included in accrued expenses and other liabilities on the consolidated balance sheet.  As a part of the Genesis Acquisition, we received a full 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 is recorded in receivables and other assets on the consolidated balance sheet.  Such indemnification asset is reviewed for collectability periodically.

 

     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, 2013 for which it is reasonably possible that the amount of unrecognized tax benefits would decrease during 2014.  Interest and penalties totaled $465,000 and $1,215,000, respectively, for the year ended December 31, 2013 and are included in income tax expense.  Of these amounts, $337,000 and $996,000 of interest and penalties, respectively, relate to the Genesis Acquisition and are offset by the indemnification asset.

 

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 $2,562,000, $2,140,000, and $1,558,000 in 2013, 2012 and 2011, 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 $3,069,000 during the next five fiscal years and $4,604,000 thereafter. We use a December 31 measurement date for the SERP. The accrued liability on our balance sheet for the SERP was $6,453,000 at December 31, 2013 ($6,665,000 at December 31, 2012).

 

110


 

HEALTH CARE REIT, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

 

20. Quarterly Results of Operations (Unaudited)

 

The following is a summary of our unaudited quarterly results of operations for the years ended December 31, 2013 and 2012 (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, 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 (loss) attributable to common stockholders

 

$

 55,058 

 

$

 (8,508) 

$

 20,691 

$

 11,473 

Net income (loss) attributable to common stockholders per share:

 

 

 

 

 

 

 

 

 

 

 

Basic

 

$

 0.21 

 

$

 (0.03) 

$

 0.07 

$

 0.04 

 

Diluted

 

 

 0.21 

 

 

 (0.03) 

 

 0.07 

 

 0.04 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Year Ended December 31, 2012

 

 

 

1st Quarter

 

2nd Quarter

3rd Quarter(3)

4th Quarter

Revenues - as reported

 

$

 435,359 

 

$

 453,082 

$

 474,139 

$

 500,663 

Discontinued operations

 

 

 (21,559) 

 

 

 (17,821) 

 

 (15,120) 

 

 (3,699) 

Revenues - as adjusted(1)

 

$

 413,800 

 

$

 435,261 

$

 459,019 

$

 496,964 

Net income attributable to common stockholders

 

$

 39,307 

 

$

 54,735 

$

 37,269 

$

 90,576 

Net income attributable to common stockholders per share:

 

 

 

 

 

 

 

 

 

 

 

Basic

 

$

 0.20 

 

$

 0.26 

$

 0.17 

$

 0.35 

 

Diluted

 

 

 0.19 

 

 

 0.25 

 

 0.16 

 

 0.35 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(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.

(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.

(3) The decrease in net income and amounts per share are primarily attributable to gains on sales of real estate of $32,450,000 for the second quarter as compared to $12,827,000 for the third quarter.

 

 

 

 

 

 

 

 

 

 

 

 

111


 

  

Item 9.  Changes in and Disagreements with Accountants on Accounting and Financial Disclosure

 

Not applicable.

 

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, 2013 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, 2013 did not include an assessment of the internal control over financial reporting for the Revera Partnership, as discussed in Note 3 to the Company’s consolidated financial statements, because the Revera Partnership was acquired during the year ended December 31, 2013. The acquired businesses represent 5% of total assets at December 31, 2013 and 4% and 3% of revenues and net operating income, respectively, for the year then ended. The scope of management’s assessment on internal control over financial reporting for the year ended December 31, 2014 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, 2013.

 

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.

112


 

  

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, 2013, 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 Revera Partnership, which is included in the 2013 consolidated financial statements of Health Care REIT, Inc. and cumulatively constitute 5% of total assets at December 31, 2013 and 4% and 3% of revenues and net operating income, respectively, 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 Revera Partnership.

 

     In our opinion, Health Care REIT, Inc. maintained, in all material respects, effective internal control over financial reporting as of December 31, 2013, 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, 2013 and 2012, and the related consolidated statements of comprehensive income, equity, and cash flows for each of the three years in the period ended December 31, 2013 and our report dated February 21, 2014 expressed an unqualified opinion thereon.

 

       /s/  Ernst & Young LLP

 

Toledo, Ohio

February 21, 2014

 

Item 9B. Other Information

 

     None.

113


 

  

PART III

 

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) Compliance” in our definitive proxy statement, which will be filed with the Securities and Exchange Commission (the “Commission”) prior to April 30, 2014.

 

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. 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.

 

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, 2014.

 

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, 2014.

 

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, 2014.

 

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, 2014.

114


 

  

PART IV

 

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

77

Consolidated Balance Sheets – December 31, 2013 and 2012

78

Consolidated Statements of  Comprehensive Income — Years ended  December 31, 2013, 2012 and  2011

79

Consolidated Statements of  Equity — Years ended  December 31, 2013, 2012 and  2011

81

Consolidated Statements of  Cash Flows — Years ended  December 31, 2013, 2012 and  2011

82

Notes to Consolidated Financial Statements

83

 

     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 117.

115


 

  

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.

 

                                                                                                                   HEALTH CARE REIT, INC.

 

                                                                                                                   By: /s/   George L. Chapman                                         

                                                                                                                           George L. Chapman,

                                                                                                                           Chairman, Chief Executive Officer, President and Director

 

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below on February 21, 2014 by the following persons on behalf of the Registrant and in the capacities indicated.

 

                    /s/  William C. Ballard, Jr.**                     

                                        /s/  Jeffrey R. Otten**                             

                      William C. Ballard, Jr., Director                       

                                        Jeffrey R. Otten, Director                             

 

 

                          /s/  Thomas J. DeRosa**                           

                                        /s/  Judith C. Pelham**                             

                         Thomas J. DeRosa, Director                         

                                       Judith C. Pelham, Director                            

 

 

                        /s/  Jeffrey H. Donahue**                         

                                      /s/  R. Scott Trumbull**                           

                        Jeffrey H. Donahue, Director                         

                                       R. Scott Trumbull, Director                           

 

 

                               /s/  Peter J. Grua**                                

                                        /s/  George L. Chapman                            

                               Peter J. Grua, Director                               

                   George L. Chapman, Chairman, Chief Executive        

 

                                    Officer, President and Director                        

 

                                     (Principal Executive Officer)                          

 

 

                             /s/  Fred S. Klipsch**                              

                                           /s/  Scott A. Estes**                               

                             Fred S. Klipsch, 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/  George L. Chapman                                              

                           Sharon M. Oster, Director                            

                            George L. Chapman, Attorney-in-Fact                 

  

116


 

  

Health Care REIT, Inc.

 

 

Schedule III

 

 

Real Estate and Accumulated Depreciation

 

 

December 31, 2013

 

 

(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:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Aboite Twp, IN

$

 - 

$

 1,770 

$

 19,930 

$

 1,601 

$

 1,770 

$

 21,531 

$

 1,787 

 

2010

 

2008

 

611 W County Line Rd South

Agawam, MA

 

 - 

 

 880 

 

 16,112 

 

 2,134 

 

 880 

 

 18,246 

 

 5,736 

 

2002

 

1993

 

1200 Suffield St.

Agawam, MA

 

 - 

 

 1,230 

 

 13,618 

 

 593 

 

 1,230 

 

 14,211 

 

 1,126 

 

2011

 

1975

 

61 Cooper Street

Agawam, MA

 

 - 

 

 930 

 

 15,304 

 

 293 

 

 930 

 

 15,596 

 

 1,203 

 

2011

 

1970

 

55 Cooper Street

Agawam, MA

 

 - 

 

 920 

 

 10,661 

 

 36 

 

 920 

 

 10,697 

 

 873 

 

2011

 

1985

 

464 Main Street

Agawam, MA

 

 - 

 

 920 

 

 10,562 

 

 45 

 

 920 

 

 10,607 

 

 866 

 

2011

 

1967

 

65 Cooper Street

Akron, OH

 

 - 

 

 290 

 

 8,219 

 

 491 

 

 290 

 

 8,710 

 

 2,084 

 

2005

 

1961

 

721 Hickory St.

Akron, OH

 

 - 

 

 630 

 

 7,535 

 

 229 

 

 630 

 

 7,764 

 

 1,634 

 

2006

 

1915

 

209 Merriman Road

Albertville, AL

 

 2,042 

 

 172 

 

 6,197 

 

 174 

 

 180 

 

 6,368 

 

 860 

 

2010

 

1999

 

151 Woodham Dr.

Alliance, OH

 

 - 

 

 270 

 

 7,723 

 

 107 

 

 270 

 

 7,830 

 

 1,767 

 

2006

 

1982

 

1785 Freshley Ave.

Amelia Island, FL

 

 - 

 

 3,290 

 

 24,310 

 

 20,314 

 

 3,290 

 

 44,624 

 

 7,573 

 

2005

 

1998

 

48 Osprey Village Dr.

Ames, IA

 

 - 

 

 330 

 

 8,870 

 

 - 

 

 330 

 

 8,870 

 

 878 

 

2010

 

1999

 

1325 Coconino Rd.

Anderson, SC

 

 - 

 

 710 

 

 6,290 

 

 419 

 

 710 

 

 6,709 

 

 2,235 

 

2003

 

1986

 

311 Simpson Rd.

Andover, MA

 

 - 

 

 1,310 

 

 12,647 

 

 27 

 

 1,310 

 

 12,674 

 

 1,067 

 

2011

 

1985

 

89 Morton Street

Annapolis, MD

 

 - 

 

 1,010 

 

 24,825 

 

 151 

 

 1,010 

 

 24,976 

 

 1,862 

 

2011

 

1993

 

35 Milkshake Lane

Ansted, WV

 

 - 

 

 240 

 

 14,113 

 

 108 

 

 240 

 

 14,221 

 

 1,042 

 

2011

 

1982

 

106 Tyree Street,   P.O. Drawer 400

Apple Valley, CA

 

 10,809 

 

 480 

 

 16,639 

 

 84 

 

 486 

 

 16,716 

 

 2,483 

 

2010

 

1999

 

11825 Apple Valley Rd.

Asheboro, NC

 

 - 

 

 290 

 

 5,032 

 

 165 

 

 290 

 

 5,197 

 

 1,487 

 

2003

 

1998

 

514 Vision Dr.

Asheville, NC

 

 - 

 

 204 

 

 3,489 

 

 - 

 

 204 

 

 3,489 

 

 1,456 

 

1999

 

1999

 

4 Walden Ridge Dr.

Asheville, NC

 

 - 

 

 280 

 

 1,955 

 

 351 

 

 280 

 

 2,306 

 

 741 

 

2003

 

1992

 

308 Overlook Rd.

Aspen Hill, MD

 

 - 

 

 - 

 

 9,008 

 

 1,181 

 

 - 

 

 10,188 

 

 778 

 

2011

 

1988

 

3227 Bel Pre Road

Atlanta, GA

 

 7,678 

 

 2,058 

 

 14,914 

 

 1,101 

 

 2,080 

 

 15,993 

 

 10,275 

 

1997

 

1999

 

1460 S Johnson Ferry Rd.

Aurora, OH

 

 - 

 

 1,760 

 

 14,148 

 

 106 

 

 1,760 

 

 14,254 

 

 1,238 

 

2011

 

2002

 

505 S. Chillicothe Rd

Aurora, CO

 

 - 

 

 2,600 

 

 5,906 

 

 7,915 

 

 2,600 

 

 13,821 

 

 3,490 

 

2006

 

1988

 

14101 E. Evans Ave.

Aurora, CO

 

 - 

 

 2,440 

 

 28,172 

 

 - 

 

 2,440 

 

 28,172 

 

 5,586 

 

2006

 

2007

 

14211 E. Evans Ave.

Austin, TX

 

 19,028 

 

 880 

 

 9,520 

 

 1,152 

 

 885 

 

 10,667 

 

 4,102 

 

1999

 

1998

 

12429 Scofield Farms Dr.

Austin, TX

 

 9,799 

 

 730 

 

 18,970 

 

 - 

 

 730 

 

 18,970 

 

 3,440 

 

2007

 

2006

 

3200 W. Slaughter Lane

Aventura, FL

 

 - 

 

 4,540 

 

 33,986 

 

 198 

 

 4,540 

 

 34,184 

 

 1,223 

 

2012

 

2001

 

2777 NE 183rd Street

Avon, IN

 

 - 

 

 1,830 

 

 14,470 

 

 - 

 

 1,830 

 

 14,470 

 

 1,496 

 

2010

 

2004

 

182 S Country RD. 550E

Avon Lake, OH

 

 - 

 

 790 

 

 10,421 

 

 142 

 

 790 

 

 10,562 

 

 950 

 

2011

 

2001

 

345 Lear Rd.

Ayer, MA

 

 - 

 

 - 

 

 22,074 

 

 3 

 

 - 

 

 22,077 

 

 1,658 

 

2011

 

1988

 

400 Groton Road

Baltic, OH

 

 - 

 

 50 

 

 8,709 

 

 189 

 

 50 

 

 8,898 

 

 1,971 

 

2006

 

1983

 

130 Buena Vista St.

Baltimore, MD

 

 - 

 

 1,350 

 

 14,884 

 

 321 

 

 1,350 

 

 15,204 

 

 1,189 

 

2011

 

1905

 

115 East Melrose Avenue

Baltimore, MD

 

 - 

 

 900 

 

 5,039 

 

 147 

 

 900 

 

 5,186 

 

 477 

 

2011

 

1969

 

6000 Bellona Avenue

Bartlesville, OK

 

 - 

 

 100 

 

 1,380 

 

 - 

 

 100 

 

 1,380 

 

 666 

 

1996

 

1995

 

5420 S.E. Adams Blvd.

Baytown, TX

 

 9,191 

 

 450 

 

 6,150 

 

 - 

 

 450 

 

 6,150 

 

 2,067 

 

2002

 

2000

 

3921 N. Main St.

Baytown, TX

 

 - 

 

 540 

 

 11,110 

 

 - 

 

 540 

 

 11,110 

 

 1,336 

 

2009

 

2008

 

2000 West Baker Lane

Beachwood, OH

 

 - 

 

 1,260 

 

 23,478 

 

 - 

 

 1,260 

 

 23,478 

 

 7,835 

 

2001

 

1990

 

3800 Park East Drive

Beattyville, KY

 

 - 

 

 100 

 

 6,900 

 

 660 

 

 100 

 

 7,560 

 

 1,712 

 

2005

 

1972

 

249 E. Main St.

Bedford, NH

 

 - 

 

 2,250 

 

 28,831 

 

 5 

 

 2,250 

 

 28,836 

 

 2,153 

 

2011

 

1978

 

25 Ridgewood Road

Bellevue, WI

 

 - 

 

 1,740 

 

 18,260 

 

 571 

 

 1,740 

 

 18,831 

 

 3,707 

 

2006

 

2004

 

1660 Hoffman Rd.

Bellingham, WA

 

 8,724 

 

 1,500 

 

 19,861 

 

 121 

 

 1,507 

 

 19,975 

 

 2,861 

 

2010

 

1996

 

4415 Columbine Dr.

Benbrook, TX

 

 - 

 

 1,550 

 

 13,553 

 

 769 

 

 1,550 

 

 14,322 

 

 944 

 

2011

 

1984

 

4242 Bryant Irvin Road

Bethel Park, PA

 

 - 

 

 1,700 

 

 16,007 

 

 - 

 

 1,700 

 

 16,007 

 

 2,087 

 

2007

 

2009

 

5785 Baptist Road

Bluefield, VA

 

 - 

 

 900 

 

 12,463 

 

 32 

 

 900 

 

 12,495 

 

 960 

 

2011

 

1990

 

Westwood Medical Park

Boca Raton, FL

 

 - 

 

 1,440 

 

 31,048 

 

 786 

 

 1,440 

 

 31,834 

 

 1,108 

 

2012

 

1989

 

1080 Northwest 15th Street

Boonville, IN

 

 - 

 

 190 

 

 5,510 

 

 - 

 

 190 

 

 5,510 

 

 1,809 

 

2002

 

2000

 

1325 N. Rockport Rd.

Bradenton, FL

 

 - 

 

 252 

 

 3,298 

 

 - 

 

 252 

 

 3,298 

 

 1,608 

 

1996

 

1995

 

6101 Pointe W. Blvd.

Bradenton, FL

 

 - 

 

 480 

 

 9,953 

 

 - 

 

 480 

 

 9,953 

 

 396 

 

2012

 

2000

 

2800 60th Avenue West

Braintree, MA

 

 - 

 

 170 

 

 7,157 

 

 1,290 

 

 170 

 

 8,447 

 

 7,871 

 

1997

 

1968

 

1102 Washington St.

Brandon, MS

 

 - 

 

 1,220 

 

 10,241 

 

 - 

 

 1,220 

 

 10,241 

 

 888 

 

2010

 

1999

 

140 Castlewoods Blvd

Bremerton, WA

 

 - 

 

 390 

 

 2,210 

 

 144 

 

 390 

 

 2,354 

 

 425 

 

2006

 

1999

 

3231 Pine Road

Bremerton, WA

 

 - 

 

 830 

 

 10,420 

 

 150 

 

 830 

 

 10,570 

 

 974 

 

2010

 

1984

 

3201 Pine Road NE

Brick, NJ

 

 - 

 

 1,290 

 

 25,247 

 

 180 

 

 1,290 

 

 25,427 

 

 1,585 

 

2011

 

2000

 

458 Jack Martin Blvd.

Brick, NJ

 

 - 

 

 1,170 

 

 17,372 

 

 275 

 

 1,180 

 

 17,637 

 

 1,380 

 

2010

 

1998

 

515 Jack Martin Blvd

Brick, NJ

 

 - 

 

 690 

 

 17,125 

 

 105 

 

 690 

 

 17,230 

 

 1,325 

 

2010

 

1999

 

1594 Route 88

Bridgewater, NJ

 

 - 

 

 1,850 

 

 3,050 

 

 - 

 

 1,850 

 

 3,050 

 

 1,121 

 

2004

 

1970

 

875 Route 202/206 North

Bridgewater, NJ

 

 - 

 

 1,730 

 

 48,201 

 

 661 

 

 1,739 

 

 48,853 

 

 3,750 

 

2010

 

1999

 

2005 Route 22 West

Bridgewater, NJ

 

 - 

 

 1,800 

 

 31,810 

 

 139 

 

 1,800 

 

 31,949 

 

 1,968 

 

2011

 

2001

 

680 US-202/206 North

Broadview Heights, OH

 

 - 

 

 920 

 

 12,400 

 

 2,393 

 

 920 

 

 14,793 

 

 4,350 

 

2001

 

1984

 

2801 E. Royalton Rd.

Brookfield, WI

 

 - 

 

 1,300 

 

 12,830 

 

 - 

 

 1,300 

 

 12,830 

 

 58 

 

2012

 

2013

 

1185 Davidson Road

Brookline, MA

 

 - 

 

 2,760 

 

 9,217 

 

 3,369 

 

 2,760 

 

 12,586 

 

 938 

 

2011

 

1984

 

30 Webster Street

Brooklyn Park, MD

 

 - 

 

 1,290 

 

 16,329 

 

 29 

 

 1,290 

 

 16,358 

 

 1,270 

 

2011

 

1973

 

613 Hammonds Lane

Burleson, TX

 

 - 

 

 670 

 

 13,985 

 

 250 

 

 670 

 

 14,235 

 

 1,008 

 

2011

 

1988

 

300 Huguley Boulevard

Burlington, NC

 

 - 

 

 280 

 

 4,297 

 

 707 

 

 280 

 

 5,004 

 

 1,407 

 

2003

 

2000

 

3619 S. Mebane St.

Burlington, NC

 

 - 

 

 460 

 

 5,467 

 

 - 

 

 460 

 

 5,467 

 

 1,581 

 

2003

 

1997

 

3615 S. Mebane St.

Burlington, NJ

 

 - 

 

 1,700 

 

 12,554 

 

 466 

 

 1,700 

 

 13,020 

 

 1,134 

 

2011

 

1965

 

115 Sunset Road

Burlington, NJ

 

 - 

 

 1,170 

 

 19,205 

 

 167 

 

 1,170 

 

 19,372 

 

 1,368 

 

2011

 

1994

 

2305 Rancocas Road

Byrdstown, TN

 

 - 

 

 - 

 

 2,414 

 

 269 

 

 - 

 

 2,683 

 

 1,582 

 

2004

 

1982

 

129 Hillcrest Dr.

Cambridge, MD

 

 - 

 

 490 

 

 15,843 

 

 207 

 

 490 

 

 16,050 

 

 1,208 

 

2011

 

1990

 

525 Glenburn Avenue

Canton, MA

 

 - 

 

 820 

 

 8,201 

 

 263 

 

 820 

 

 8,464 

 

 3,824 

 

2002

 

1993

 

One Meadowbrook Way

Canton, OH

 

 - 

 

 300 

 

 2,098 

 

 - 

 

 300 

 

 2,098 

 

 868 

 

1998

 

1998

 

1119 Perry Dr., N.W.

Cape Coral, FL

 

 - 

 

 530 

 

 3,281 

 

 - 

 

 530 

 

 3,281 

 

 1,081 

 

2002

 

2000

 

911 Santa Barbara Blvd.

Cape Coral, FL

 

 9,229 

 

 760 

 

 18,868 

 

 - 

 

 760 

 

 18,868 

 

 759 

 

2012

 

2009

 

831 Santa Barbara Boulevard

Carrollton, TX

 

 - 

 

 4,280 

 

 31,444 

 

 - 

 

 4,280 

 

 31,444 

 

 - 

 

2013

 

2010

 

2105 North Josey Lane

Carson City, NV

 

 5,155 

 

 520 

 

 8,238 

 

 - 

 

 520 

 

 8,238 

 

 20 

 

2013

 

1997

 

1111 W. College Parkway

Cary, NC

 

 - 

 

 1,500 

 

 4,350 

 

 986 

 

 1,500 

 

 5,336 

 

 2,055 

 

1998

 

1996

 

111 MacArthur

Catonsville, MD

 

 - 

 

 1,330 

 

 15,003 

 

 549 

 

 1,330 

 

 15,552 

 

 1,202 

 

2011

 

1973

 

16 Fusting Avenue

Cedar Grove, NJ

 

 - 

 

 1,830 

 

 10,939 

 

 10 

 

 1,830 

 

 10,949 

 

 891 

 

2011

 

1964

 

25 East Lindsley Road

Cedar Grove, NJ

 

 - 

 

 2,850 

 

 27,737 

 

 21 

 

 2,850 

 

 27,757 

 

 2,124 

 

2011

 

1970

 

536 Ridge Road

Centreville, MD(2)

 

 - 

 

 600 

 

 14,602 

 

 241 

 

 600 

 

 14,843 

 

 1,142 

 

2011

 

1978

 

205 Armstrong Avenue

Chapel Hill, NC

 

 - 

 

 354 

 

 2,646 

 

 783 

 

 354 

 

 3,429 

 

 1,092 

 

2002

 

1997

 

100 Lanark Rd.

Charles Town, WV

 

 - 

 

 230 

 

 22,834 

 

 30 

 

 230 

 

 22,863 

 

 1,660 

 

2011

 

1997

 

219 Prospect Ave

Charleston, WV

 

 - 

 

 440 

 

 17,575 

 

 297 

 

 440 

 

 17,873 

 

 1,296 

 

2011

 

1998

 

1000 Association Drive, North Gate Business Park

Charleston, WV

 

 - 

 

 410 

 

 5,430 

 

 13 

 

 410 

 

 5,444 

 

 451 

 

2011

 

1979

 

699 South Park Road

Chelmsford, MA

 

 - 

 

 1,040 

 

 10,951 

 

 1,499 

 

 1,040 

 

 12,450 

 

 3,062 

 

2003

 

1997

 

4 Technology Dr.

Chicago, IL

 

 - 

 

 1,800 

 

 19,256 

 

 - 

 

 1,800 

 

 19,256 

 

 847 

 

2012

 

2005

 

6700 South Keating Avenue

Chicago, IL

 

 - 

 

 2,900 

 

 17,016 

 

 - 

 

 2,900 

 

 17,016 

 

 759 

 

2012

 

2007

 

4239 North Oak Park Avenue

Chickasha, OK

 

 - 

 

 85 

 

 1,395 

 

 - 

 

 85 

 

 1,395 

 

 668 

 

1996

 

1996

 

801 Country Club Rd.

Cinnaminson, NJ

 

 - 

 

 860 

 

 6,663 

 

 149 

 

 860 

 

 6,812 

 

 592 

 

2011

 

1965

 

1700 Wynwood Drive

Citrus Heights, CA

 

 14,974 

 

 2,300 

 

 31,876 

 

 507 

 

 2,300 

 

 32,383 

 

 4,726 

 

2010

 

1997

 

7418 Stock Ranch Rd.

Claremore, OK

 

 - 

 

 155 

 

 1,427 

 

 6,130 

 

 155 

 

 7,557 

 

 663 

 

1996

 

1996

 

1605 N. Hwy. 88

Clarks Summit, PA

 

 - 

 

 600 

 

 11,179 

 

 15 

 

 600 

 

 11,194 

 

 905 

 

2011

 

1985

 

100 Edella Road

Clarks Summit, PA

 

 - 

 

 400 

 

 6,529 

 

 54 

 

 400 

 

 6,583 

 

 541 

 

2011

 

1997

 

150 Edella Road

Clarksville, TN

 

 - 

 

 330 

 

 2,292 

 

 - 

 

 330 

 

 2,292 

 

 941 

 

1998

 

1998

 

2183 Memorial Dr.

Cleburne, TX

 

 - 

 

 520 

 

 5,369 

 

 - 

 

 520 

 

 5,369 

 

 944 

 

2006

 

2007

 

402 S Colonial Drive

Cleveland, TN

 

 - 

 

 350 

 

 5,000 

 

 122 

 

 350 

 

 5,122 

 

 1,833 

 

2001

 

1987

 

2750 Executive Park N.W.

Clinton, MD

 

 - 

 

 2,330 

 

 20,876 

 

 590 

 

 2,330 

 

 21,467 

 

 949 

 

2012

 

1988

 

7520 Surratts Road

Cloquet, MN

 

 - 

 

 340 

 

 4,660 

 

 - 

 

 340 

 

 4,660 

 

 297 

 

2011

 

2006

 

705 Horizon Circle

Cobham, England

 

 - 

 

 13,176 

 

 33,574 

 

 - 

 

 13,176 

 

 33,574 

 

 368 

 

2013

 

2013

 

Redhill Road

Colchester, CT

 

 - 

 

 980 

 

 4,860 

 

 495 

 

 980 

 

 5,355 

 

 500 

 

2011

 

1986

 

59 Harrington  Court

Colts Neck, NJ

 

 - 

 

 780 

 

 14,733 

 

 501 

 

 930 

 

 15,084 

 

 1,215 

 

2010

 

2002

 

3 Meridian Circle

Columbia, TN

 

 - 

 

 341 

 

 2,295 

 

 - 

 

 341 

 

 2,295 

 

 952 

 

1999

 

1999

 

5011 Trotwood Ave.

Columbia, TN

 

 - 

 

 590 

 

 3,787 

 

 - 

 

 590 

 

 3,787 

 

 1,446 

 

2003

 

1974

 

1410 Trotwood Ave.

Columbia, SC

 

 - 

 

 2,120 

 

 4,860 

 

 5,709 

 

 2,120 

 

 10,569 

 

 2,969 

 

2003

 

2000

 

731 Polo Rd.

Columbia Heights, MN

 

 - 

 

 825 

 

 14,175 

 

 - 

 

 825 

 

 14,175 

 

 844 

 

2011

 

2009

 

3807 Hart Boulevard

Columbus, IN

 

 - 

 

 610 

 

 3,190 

 

 - 

 

 610 

 

 3,190 

 

 323 

 

2010

 

1998

 

2564 Foxpointe Dr.

Columbus, OH

 

 - 

 

 530 

 

 5,170 

 

 8,255 

 

 1,070 

 

 12,885 

 

 2,901 

 

2005

 

1968

 

1425 Yorkland Rd.

Columbus, OH

 

 - 

 

 1,010 

 

 5,022 

 

 - 

 

 1,010 

 

 5,022 

 

 1,244 

 

2006

 

1983

 

1850 Crown Park Ct.

Columbus, OH

 

 - 

 

 1,010 

 

 4,931 

 

 13,620 

 

 1,860 

 

 17,701 

 

 3,923 

 

2006

 

1978

 

5700 Karl Rd.

Columbus, IN

 

 - 

 

 530 

 

 6,710 

 

 - 

 

 530 

 

 6,710 

 

 2,048 

 

2002

 

2001

 

2011 Chapa Dr.

Concord, NC

 

 - 

 

 550 

 

 3,921 

 

 55 

 

 550 

 

 3,976 

 

 1,276 

 

2003

 

1997

 

2452 Rock Hill Church Rd.

Concord, NH

 

 - 

 

 780 

 

 18,423 

 

 446 

 

 780 

 

 18,869 

 

 1,371 

 

2011

 

1972

 

20 Maitland Street

Concord, NH

 

 - 

 

 1,760 

 

 43,179 

 

 568 

 

 1,760 

 

 43,747 

 

 3,187 

 

2011

 

1994

 

239 Pleasant Street

Concord, NH

 

 - 

 

 720 

 

 3,041 

 

 340 

 

 720 

 

 3,381 

 

 301 

 

2011

 

1905

 

227 Pleasant Street

Conroe, TX

 

 - 

 

 980 

 

 7,771 

 

 - 

 

 980 

 

 7,771 

 

 821 

 

2009

 

2010

 

903 Longmire Road

Conyers, GA

 

 - 

 

 2,740 

 

 19,302 

 

 105 

 

 2,740 

 

 19,407 

 

 687 

 

2012

 

1998

 

1504 Renaissance Drive

Coppell, TX

 

 - 

 

 1,550 

 

 8,386 

 

 - 

 

 1,550 

 

 8,386 

 

 64 

 

2012

 

2013

 

1530 East Sandy Lake Road

Corpus Christi, TX

 

 - 

 

 400 

 

 1,916 

 

 - 

 

 400 

 

 1,916 

 

 690 

 

2005

 

1985

 

1101 S. Alameda

Cortland, NY

 

 - 

 

 700 

 

 18,041 

 

 58 

 

 700 

 

 18,099 

 

 583 

 

2012

 

2001

 

839 Bennie Road

Daniels, WV

 

 - 

 

 200 

 

 17,320 

 

 49 

 

 200 

 

 17,370 

 

 1,270 

 

2011

 

1986

 

1631 Ritter Drive

Danville, VA

 

 - 

 

 410 

 

 3,954 

 

 722 

 

 410 

 

 4,676 

 

 1,372 

 

2003

 

1998

 

149 Executive Ct.

Daphne, AL

 

 - 

 

 2,880 

 

 8,670 

 

 127 

 

 2,880 

 

 8,797 

 

 394 

 

2012

 

2001

 

27440 County Road 13

Dedham, MA

 

 - 

 

 1,360 

 

 9,830 

 

 - 

 

 1,360 

 

 9,830 

 

 3,457 

 

2002

 

1996

 

10 CareMatrix Dr.

DeForest, WI

 

 - 

 

 250 

 

 5,350 

 

 354 

 

 250 

 

 5,704 

 

 989 

 

2007

 

2006

 

6902 Parkside Circle

Defuniak Springs, FL

 

 - 

 

 1,350 

 

 10,250 

 

 - 

 

 1,350 

 

 10,250 

 

 2,162 

 

2006

 

1980

 

785 S. 2nd St.

Denton, TX

 

 - 

 

 1,760 

 

 8,305 

 

 - 

 

 1,760 

 

 8,305 

 

 523 

 

2010

 

2011

 

2125 Brinker Rd

Denver, CO

 

 - 

 

 2,530 

 

 9,514 

 

 - 

 

 2,530 

 

 9,514 

 

 2,246 

 

2005

 

1986

 

3701 W. Radcliffe Ave.

Dover, DE

 

 - 

 

 400 

 

 7,717 

 

 38 

 

 400 

 

 7,755 

 

 622 

 

2011

 

1997

 

1203 Walker Road

Dover, DE

 

 - 

 

 600 

 

 22,266 

 

 90 

 

 600 

 

 22,356 

 

 1,671 

 

2011

 

1984

 

1080 Silver Lake Blvd.

Dresher, PA

 

 - 

 

 2,060 

 

 40,236 

 

 273 

 

 2,067 

 

 40,502 

 

 3,106 

 

2010

 

2001

 

1405 N. Limekiln Pike

Dundalk, MD(2)

 

 - 

 

 1,770 

 

 32,047 

 

 785 

 

 1,770 

 

 32,831 

 

 2,412 

 

2011

 

1978

 

7232 German Hill Road

Durham, NC

 

 - 

 

 1,476 

 

 10,659 

 

 2,196 

 

 1,476 

 

 12,855 

 

 8,822 

 

1997

 

1999

 

4434 Ben Franklin Blvd.

East Brunswick, NJ

 

 - 

 

 1,380 

 

 34,229 

 

 181 

 

 1,380 

 

 34,410 

 

 2,101 

 

2011

 

1998

 

606 Cranbury Rd.

East Norriton, PA

 

 - 

 

 1,200 

 

 28,129 

 

 485 

 

 1,210 

 

 28,604 

 

 2,228 

 

2010

 

1988

 

2101 New Hope St

Easton, MD

 

 - 

 

 900 

 

 24,539 

 

 - 

 

 900 

 

 24,539 

 

 1,892 

 

2011

 

1962

 

610 Dutchman's Lane

Eatontown, NJ

 

 - 

 

 1,190 

 

 23,358 

 

 67 

 

 1,190 

 

 23,426 

 

 1,788 

 

2011

 

1996

 

3 Industrial Way East

Eden, NC

 

 - 

 

 390 

 

 4,877 

 

 - 

 

 390 

 

 4,877 

 

 1,431 

 

2003

 

1998

 

314 W. Kings Hwy.

Edmond, OK

 

 - 

 

 410 

 

 8,388 

 

 - 

 

 410 

 

 8,388 

 

 432 

 

2012

 

2001

 

15401 North Pennsylvania Avenue

Elizabeth City, NC

 

 - 

 

 200 

 

 2,760 

 

 2,011 

 

 200 

 

 4,771 

 

 1,704 

 

1998

 

1999

 

400 Hastings Lane

Elizabethton, TN

 

 - 

 

 310 

 

 4,604 

 

 336 

 

 310 

 

 4,940 

 

 1,783 

 

2001

 

1980

 

1200 Spruce Lane

Englewood, NJ

 

 - 

 

 930 

 

 4,514 

 

 17 

 

 930 

 

 4,531 

 

 381 

 

2011

 

1966

 

333 Grand Avenue

Englishtown, NJ

 

 - 

 

 690 

 

 12,520 

 

 585 

 

 754 

 

 13,041 

 

 1,057 

 

2010

 

1997

 

49 Lasatta Ave

Erin, TN

 

 - 

 

 440 

 

 8,060 

 

 134 

 

 440 

 

 8,194 

 

 2,811 

 

2001

 

1981

 

242 Rocky Hollow Rd.

Everett, WA

 

 - 

 

 1,400 

 

 5,476 

 

 - 

 

 1,400 

 

 5,476 

 

 2,167 

 

1999

 

1999

 

2015 Lake Heights Dr.

Fair Lawn, NJ

 

 - 

 

 2,420 

 

 24,504 

 

 444 

 

 2,420 

 

 24,948 

 

 1,874 

 

2011

 

1962

 

12-15 Saddle River Road

Fairfield, CA

 

 - 

 

 1,460 

 

 14,040 

 

 1,541 

 

 1,460 

 

 15,581 

 

 4,776 

 

2002

 

1998

 

3350 Cherry Hills St.

Fairhope, AL

 

 - 

 

 570 

 

 9,119 

 

 - 

 

 570 

 

 9,119 

 

 410 

 

2012

 

1987

 

50 Spring Run Road

Fall River, MA

 

 - 

 

 620 

 

 5,829 

 

 4,856 

 

 620 

 

 10,685 

 

 4,205 

 

1996

 

1973

 

1748 Highland Ave.

Fall River, MA

 

 - 

 

 920 

 

 34,715 

 

 208 

 

 920 

 

 34,923 

 

 2,603 

 

2011

 

1993

 

4901 North Main Street

Fanwood, NJ

 

 - 

 

 2,850 

 

 55,175 

 

 329 

 

 2,850 

 

 55,504 

 

 3,341 

 

2011

 

1982

 

295 South Ave.

Fayetteville, GA

 

 - 

 

 560 

 

 12,665 

 

 263 

 

 560 

 

 12,928 

 

 441 

 

2012

 

1994

 

1967 Highway 54 West

Fayetteville, NY

 

 - 

 

 410 

 

 3,962 

 

 500 

 

 410 

 

 4,462 

 

 1,438 

 

2001

 

1997

 

5125 Highbridge St.

Findlay, OH

 

 - 

 

 200 

 

 1,800 

 

 - 

 

 200 

 

 1,800 

 

 805 

 

1997

 

1997

 

725 Fox Run Rd.

Fishers, IN

 

 - 

 

 1,500 

 

 14,500 

 

 - 

 

 1,500 

 

 14,500 

 

 1,499 

 

2010

 

2000

 

9745 Olympia Dr.

Florence, NJ

 

 - 

 

 300 

 

 2,978 

 

 - 

 

 300 

 

 2,978 

 

 976 

 

2002

 

1999

 

901 Broad St.

Florence, AL

 

 7,179 

 

 353 

 

 13,049 

 

 160 

 

 385 

 

 13,177 

 

 1,852 

 

2010

 

1999

 

3275 County Road 47

Flourtown, PA

 

 - 

 

 1,800 

 

 14,830 

 

 203 

 

 1,800 

 

 15,033 

 

 1,162 

 

2011

 

1908

 

350 Haws Lane

Flower Mound, TX

 

 - 

 

 1,800 

 

 8,414 

 

 - 

 

 1,800 

 

 8,414 

 

 254 

 

2011

 

2012

 

4141 Long Prairie Road

Follansbee, WV

 

 - 

 

 640 

 

 27,670 

 

 49 

 

 640 

 

 27,719 

 

 2,050 

 

2011

 

1982

 

840 Lee Road

Forest City, NC

 

 - 

 

 320 

 

 4,497 

 

 - 

 

 320 

 

 4,497 

 

 1,334 

 

2003

 

1999

 

493 Piney Ridge Rd.

Fort Ashby, WV

 

 - 

 

 330 

 

 19,566 

 

 123 

 

 330 

 

 19,689 

 

 1,425 

 

2011

 

1980

 

Diane Drive, Box 686

Franconia, NH

 

 - 

 

 360 

 

 11,320 

 

 69 

 

 360 

 

 11,390 

 

 863 

 

2011

 

1971

 

93 Main Street

Franklin, NH

 

 - 

 

 430 

 

 15,210 

 

 47 

 

 430 

 

 15,257 

 

 1,145 

 

2011

 

1990

 

7 Baldwin Street

Fredericksburg, VA

 

 - 

 

 1,000 

 

 20,000 

 

 1,200 

 

 1,000 

 

 21,200 

 

 4,688 

 

2005

 

1999

 

3500 Meekins Dr.

Fredericksburg, VA

 

 - 

 

 590 

 

 28,611 

 

 35 

 

 590 

 

 28,646 

 

 2,104 

 

2011

 

1977

 

11 Dairy Lane

Fredericksburg, VA

 

 - 

 

 3,700 

 

 22,016 

 

 59 

 

 3,700 

 

 22,075 

 

 713 

 

2012

 

1992

 

12100 Chancellors Village

Fremont, CA

 

 19,492 

 

 3,400 

 

 25,300 

 

 1,821 

 

 3,456 

 

 27,065 

 

 5,853 

 

2005

 

1987

 

2860 Country Dr.

Gardner, MA

 

 - 

 

 480 

 

 10,210 

 

 27 

 

 480 

 

 10,237 

 

 812 

 

2011

 

1902

 

32 Hospital Hill Road

Gardnerville, NV

 

 12,597 

 

 1,143 

 

 10,831 

 

 776 

 

 1,164 

 

 11,586 

 

 7,992 

 

1998

 

1999

 

1565-A Virginia Ranch Rd.

Gastonia, NC

 

 - 

 

 470 

 

 6,129 

 

 - 

 

 470 

 

 6,129 

 

 1,762 

 

2003

 

1998

 

1680 S. New Hope Rd.

Gastonia, NC

 

 - 

 

 310 

 

 3,096 

 

 22 

 

 310 

 

 3,118 

 

 959 

 

2003

 

1994

 

1717 Union Rd.

Gastonia, NC

 

 - 

 

 400 

 

 5,029 

 

 120 

 

 400 

 

 5,149 

 

 1,493 

 

2003

 

1996

 

1750 Robinwood Rd.

Georgetown, TX

 

 - 

 

 200 

 

 2,100 

 

 - 

 

 200 

 

 2,100 

 

 926 

 

1997

 

1997

 

2600 University Dr., E.

Gettysburg, PA

 

 - 

 

 590 

 

 8,913 

 

 91 

 

 590 

 

 9,003 

 

 748 

 

2011

 

1987

 

867 York Road

Gig Harbor, WA

 

 5,581 

 

 1,560 

 

 15,947 

 

 61 

 

 1,583 

 

 15,986 

 

 2,231 

 

2010

 

1994

 

3213 45th St. Court NW

Glastonbury, CT

 

 - 

 

 1,950 

 

 9,532 

 

 909 

 

 2,360 

 

 10,031 

 

 812 

 

2011

 

1966

 

72 Salmon Brook Drive

Glen Mills, PA

 

 - 

 

 690 

 

 9,110 

 

 165 

 

 690 

 

 9,275 

 

 737 

 

2011

 

1993

 

549 Baltimore Pike

Glenside, PA

 

 - 

 

 1,940 

 

 16,867 

 

 153 

 

 1,940 

 

 17,020 

 

 1,308 

 

2011

 

1905

 

850 Paper Mill Road

Graceville, FL

 

 - 

 

 150 

 

 13,000 

 

 - 

 

 150 

 

 13,000 

 

 2,666 

 

2006

 

1980

 

1083 Sanders Ave.

Grafton, WV

 

 - 

 

 280 

 

 18,824 

 

 37 

 

 280 

 

 18,861 

 

 1,374 

 

2011

 

1986

 

8 Rose Street

Granbury, TX

 

 - 

 

 2,040 

 

 30,670 

 

 149 

 

 2,040 

 

 30,819 

 

 2,182 

 

2011

 

2009

 

100 Watermark Boulevard

Granbury, TX

 

 - 

 

 2,550 

 

 2,940 

 

 400 

 

 2,550 

 

 3,340 

 

 137 

 

2012

 

1996

 

916 East Highway 377

Grand Blanc, MI

 

 - 

 

 700 

 

 7,843 

 

 - 

 

 700 

 

 7,843 

 

 233 

 

2011

 

2012

 

5400 East Baldwin

Grand Ledge, MI

 

 7,971 

 

 1,150 

 

 16,286 

 

 5,119 

 

 1,150 

 

 21,405 

 

 1,404 

 

2010

 

1999

 

4775 Village Dr

Granger, IN

 

 - 

 

 1,670 

 

 21,280 

 

 2,401 

 

 1,670 

 

 23,681 

 

 1,917 

 

2010

 

2009

 

6330 North Fir Rd

Grass Valley, CA

 

 4,409 

 

 260 

 

 7,667 

 

 - 

 

 260 

 

 7,667 

 

 - 

 

2013

 

2001

 

415 Sierra College Drive

Greendale, WI

 

 - 

 

 2,060 

 

 35,383 

 

 522 

 

 2,060 

 

 35,905 

 

 1,658 

 

2012

 

1988

 

5700 Mockingbird Lane

Greeneville, TN

 

 - 

 

 400 

 

 8,290 

 

 507 

 

 400 

 

 8,797 

 

 2,375 

 

2004

 

1979

 

106 Holt Ct.

Greenfield, WI

 

 - 

 

 600 

 

 6,626 

 

 328 

 

 600 

 

 6,954 

 

 1,180 

 

2006

 

2006

 

3933 S. Prairie Hill Lane

Greensboro, NC

 

 - 

 

 330 

 

 2,970 

 

 554 

 

 330 

 

 3,524 

 

 1,060 

 

2003

 

1996

 

5809 Old Oak Ridge Rd.

Greensboro, NC

 

 - 

 

 560 

 

 5,507 

 

 1,013 

 

 560 

 

 6,520 

 

 1,945 

 

2003

 

1997

 

4400 Lawndale Dr.

Greenville, SC

 

 - 

 

 310 

 

 4,750 

 

 - 

 

 310 

 

 4,750 

 

 1,293 

 

2004

 

1997

 

23 Southpointe Dr.

Greenville, SC

 

 - 

 

 5,400 

 

 100,523 

 

 3,551 

 

 5,400 

 

 104,074 

 

 10,812 

 

2006

 

2009

 

10 Fountainview Terrace

Greenville, NC

 

 - 

 

 290 

 

 4,393 

 

 168 

 

 290 

 

 4,561 

 

 1,306 

 

2003

 

1998

 

2715 Dickinson Ave.

Greenwood, IN

 

 - 

 

 1,550 

 

 22,770 

 

 81 

 

 1,550 

 

 22,851 

 

 1,942 

 

2010

 

2007

 

2339 South SR 135

Groton, CT

 

 - 

 

 2,430 

 

 19,941 

 

 895 

 

 2,430 

 

 20,836 

 

 1,672 

 

2011

 

1975

 

1145 Poquonnock Road

Haddonfield, NJ

 

 - 

 

 - 

 

 - 

 

 2,480 

 

 - 

 

 2,480 

 

 2,480 

 

2011

 

0

 

132 Warwick Road

Hamburg, PA

 

 - 

 

 840 

 

 10,543 

 

 191 

 

 840 

 

 10,734 

 

 921 

 

2011

 

1966

 

125 Holly Road

Hamilton, NJ

 

 - 

 

 440 

 

 4,469 

 

 - 

 

 440 

 

 4,469 

 

 1,451 

 

2001

 

1998

 

1645 Whitehorse-Mercerville Rd.

Hanford, England

 

 - 

 

 1,856 

 

 13,205 

 

 - 

 

 1,856 

 

 13,205 

 

 146 

 

2013

 

2012

 

Bankhouse Road

Hanover, IN

 

 - 

 

 210 

 

 4,430 

 

 - 

 

 210 

 

 4,430 

 

 1,238 

 

2004

 

2000

 

188 Thornton Rd

Harleysville, PA

 

 - 

 

 960 

 

 11,355 

 

 - 

 

 960 

 

 11,355 

 

 1,392 

 

2008

 

2009

 

695 Main Street

Harriman, TN

 

 - 

 

 590 

 

 8,060 

 

 158 

 

 590 

 

 8,218 

 

 3,001 

 

2001

 

1972

 

240 Hannah Rd.

Hatboro, PA

 

 - 

 

 - 

 

 28,112 

 

 1,746 

 

 - 

 

 29,858 

 

 2,115 

 

2011

 

1996

 

3485 Davisville Road

Hatfield, England

 

 - 

 

 3,928 

 

 10,112 

 

 - 

 

 3,928 

 

 10,112 

 

 113 

 

2013

 

2012

 

St Albans Road East

Hattiesburg, MS

 

 - 

 

 450 

 

 15,518 

 

 176 

 

 450 

 

 15,694 

 

 1,230 

 

2010

 

2009

 

217 Methodist Hospital Blvd

Haverford, PA

 

 - 

 

 1,880 

 

 33,993 

 

 502 

 

 1,883 

 

 34,492 

 

 2,641 

 

2010

 

2000

 

731 Old Buck Lane

Hemet, CA

 

 - 

 

 870 

 

 3,405 

 

 - 

 

 870 

 

 3,405 

 

 586 

 

2007

 

1996

 

25818 Columbia St.

Hemet, CA

 

 13,550 

 

 1,890 

 

 28,606 

 

 650 

 

 1,899 

 

 29,247 

 

 6,649 

 

2010

 

1989

 

1001 N. Lyon Ave

Hemet, CA

 

 - 

 

 430 

 

 9,630 

 

 723 

 

 430 

 

 10,353 

 

 1,148 

 

2010

 

1988

 

1001 N. Lyon Ave

Hermitage, TN

 

 - 

 

 1,500 

 

 9,856 

 

 47 

 

 1,500 

 

 9,902 

 

 669 

 

2011

 

2006

 

4131 Andrew Jackson Parkway

Herne Bay, England

 

 - 

 

 2,552 

 

 32,717 

 

 - 

 

 2,552 

 

 32,717 

 

 783 

 

2013

 

2011

 

165 Reculver Road

Hickory, NC

 

 - 

 

 290 

 

 987 

 

 232 

 

 290 

 

 1,219 

 

 492 

 

2003

 

1994

 

2530 16th St. N.E.

High Point, NC

 

 - 

 

 560 

 

 4,443 

 

 793 

 

 560 

 

 5,236 

 

 1,543 

 

2003

 

2000

 

1568 Skeet Club Rd.

High Point, NC

 

 - 

 

 370 

 

 2,185 

 

 410 

 

 370 

 

 2,595 

 

 819 

 

2003

 

1999

 

1564 Skeet Club Rd.

High Point, NC

 

 - 

 

 330 

 

 3,395 

 

 28 

 

 330 

 

 3,423 

 

 1,017 

 

2003

 

1994

 

201 W. Hartley Dr.

High Point, NC

 

 - 

 

 430 

 

 4,143 

 

 - 

 

 430 

 

 4,143 

 

 1,220 

 

2003

 

1998

 

1560 Skeet Club Rd.

Highland Park, IL

 

 - 

 

 2,820 

 

 15,832 

 

 50 

 

 2,820 

 

 15,882 

 

 452 

 

2011

 

2012

 

1651 Richfield Avenue

Highlands Ranch, CO

 

 - 

 

 940 

 

 3,721 

 

 4,983 

 

 940 

 

 8,704 

 

 1,237 

 

2002

 

1999

 

9160 S. University Blvd.

Hilltop, WV

 

 - 

 

 480 

 

 25,355 

 

 15 

 

 480 

 

 25,370 

 

 1,881 

 

2011

 

1977

 

Saddle Shop Road

Hinckley, England

 

 - 

 

 2,900 

 

 5,634 

 

 - 

 

 2,900 

 

 5,634 

 

 69 

 

2013

 

2013

 

Tudor Road

Hollywood, FL

 

 - 

 

 1,240 

 

 13,806 

 

 242 

 

 1,240 

 

 14,048 

 

 496 

 

2012

 

2001

 

3880 South Circle Drive

Homestead, FL

 

 - 

 

 2,750 

 

 11,750 

 

 - 

 

 2,750 

 

 11,750 

 

 2,465 

 

2006

 

1994

 

1990 S. Canal Dr.

Houston, TX

 

 9,797 

 

 860 

 

 18,715 

 

 - 

 

 860 

 

 18,715 

 

 3,145 

 

2007

 

2006

 

8702 South Course Drive

Houston, TX

 

 - 

 

 5,090 

 

 9,471 

 

 - 

 

 5,090 

 

 9,471 

 

 1,303 

 

2007

 

2009

 

15015 Cypress Woods Medical Drive

Houston, TX

 

 10,148 

 

 630 

 

 5,970 

 

 750 

 

 630 

 

 6,720 

 

 2,186 

 

2002

 

1995

 

3625 Green Crest Dr.

Howell, NJ

 

 10,049 

 

 1,050 

 

 21,703 

 

 226 

 

 1,065 

 

 21,914 

 

 1,720 

 

2010

 

2007

 

100 Meridian Place

Huntington, WV

 

 - 

 

 800 

 

 32,261 

 

 126 

 

 800 

 

 32,387 

 

 2,405 

 

2011

 

1976

 

101 13th Street

Huron, OH

 

 - 

 

 160 

 

 6,088 

 

 1,452 

 

 160 

 

 7,540 

 

 1,602 

 

2005

 

1983

 

1920 Cleveland Rd. W.

Hurricane, WV

 

 - 

 

 620 

 

 21,454 

 

 805 

 

 620 

 

 22,258 

 

 1,648 

 

2011

 

1986

 

590 N Poplar Fork Road

Hutchinson, KS

 

 - 

 

 600 

 

 10,590 

 

 194 

 

 600 

 

 10,784 

 

 2,603 

 

2004

 

1997

 

2416 Brentwood

Indianapolis, IN

 

 - 

 

 495 

 

 6,287 

 

 22,565 

 

 495 

 

 28,852 

 

 6,840 

 

2006

 

1981

 

8616 W. Tenth St.

Indianapolis, IN

 

 - 

 

 255 

 

 2,473 

 

 12,123 

 

 255 

 

 14,596 

 

 3,315 

 

2006

 

1981

 

8616 W.Tenth St.

Jackson, NJ

 

 - 

 

 6,500 

 

 26,405 

 

 2,193 

 

 6,500 

 

 28,598 

 

 877 

 

2012

 

2001

 

2 Kathleen Drive

Jacksonville Beach, FL

 

 - 

 

 1,210 

 

 26,207 

 

 111 

 

 1,210 

 

 26,317 

 

 907 

 

2012

 

1999

 

1700 The Greens Way

Jamestown, TN

 

 - 

 

 - 

 

 6,707 

 

 508 

 

 - 

 

 7,215 

 

 4,369 

 

2004

 

1966

 

208 N. Duncan St.

Jefferson, OH

 

 - 

 

 80 

 

 9,120 

 

 - 

 

 80 

 

 9,120 

 

 2,126 

 

2006

 

1984

 

222 Beech St.

Jupiter, FL

 

 - 

 

 3,100 

 

 47,453 

 

 563 

 

 3,100 

 

 48,016 

 

 1,512 

 

2012

 

2002

 

110 Mangrove Bay Way

Keene, NH

 

 - 

 

 530 

 

 9,639 

 

 284 

 

 530 

 

 9,923 

 

 676 

 

2011

 

1980

 

677 Court Street

Kenner, LA

 

 - 

 

 1,100 

 

 10,036 

 

 328 

 

 1,100 

 

 10,364 

 

 7,047 

 

1998

 

2000

 

1600 Joe Yenni Blvd

Kennesaw, GA

 

 - 

 

 940 

 

 10,848 

 

 333 

 

 940 

 

 11,181 

 

 396 

 

2012

 

1998

 

5235 Stilesboro Road

Kennett Square, PA

 

 - 

 

 1,050 

 

 22,946 

 

 109 

 

 1,083 

 

 23,021 

 

 1,785 

 

2010

 

2008

 

301 Victoria Gardens Dr.

Kennewick, WA

 

 - 

 

 1,820 

 

 27,991 

 

 255 

 

 1,834 

 

 28,232 

 

 5,012 

 

2010

 

1994

 

2802 W 35th Ave

Kenosha, WI

 

 - 

 

 1,500 

 

 9,139 

 

 - 

 

 1,500 

 

 9,139 

 

 1,219 

 

2007

 

2009

 

6300 67th Street

Kent, WA

 

 - 

 

 940 

 

 20,318 

 

 10,470 

 

 940 

 

 30,788 

 

 4,461 

 

2007

 

2000

 

24121 116th Avenue SE

Kirkland, WA

 

 - 

 

 1,880 

 

 4,315 

 

 683 

 

 1,880 

 

 4,998 

 

 1,281 

 

2003

 

1996

 

6505 Lakeview Dr.

Kirkstall, England

 

 - 

 

 3,273 

 

 12,648 

 

 - 

 

 3,273 

 

 12,648 

 

 140 

 

2013

 

2009

 

29 Broad Lane

Laconia, NH

 

 - 

 

 810 

 

 14,434 

 

 497 

 

 810 

 

 14,930 

 

 1,128 

 

2011

 

1968

 

175 Blueberry Lane

Lake Barrington, IL

 

 - 

 

 3,400 

 

 66,179 

 

 46 

 

 3,400 

 

 66,225 

 

 2,096 

 

2012

 

2000

 

22320 Classic Court

Lake Zurich, IL

 

 - 

 

 1,470 

 

 9,830 

 

 - 

 

 1,470 

 

 9,830 

 

 721 

 

2011

 

2007

 

550 America Court

Lakewood Ranch, FL

 

 - 

 

 650 

 

 6,714 

 

 - 

 

 650 

 

 6,714 

 

 312 

 

2011

 

2012

 

8230 Nature's Way

Lakewood Ranch, FL

 

 7,387 

 

 1,000 

 

 22,388 

 

 - 

 

 1,000 

 

 22,388 

 

 883 

 

2012

 

2005

 

8220 Natures Way

Lancaster, CA

 

 10,083 

 

 700 

 

 15,295 

 

 574 

 

 712 

 

 15,857 

 

 2,504 

 

2010

 

1999

 

43051 15th St. West

Lancaster, PA

 

 - 

 

 890 

 

 7,623 

 

 80 

 

 890 

 

 7,702 

 

 660 

 

2011

 

1928

 

336 South West End Ave

Lancaster, NH

 

 - 

 

 430 

 

 15,804 

 

 161 

 

 430 

 

 15,964 

 

 1,191 

 

2011

 

1981

 

91 Country Village Road

Lancaster, NH

 

 - 

 

 160 

 

 434 

 

 28 

 

 160 

 

 462 

 

 67 

 

2011

 

1905

 

63 Country Village Road

Langhorne, PA

 

 - 

 

 1,350 

 

 24,881 

 

 117 

 

 1,350 

 

 24,998 

 

 1,919 

 

2011

 

1979

 

262 Toll Gate Road

Lapeer, MI

 

 - 

 

 220 

 

 7,625 

 

 - 

 

 220 

 

 7,625 

 

 327 

 

2011

 

2012

 

2323 Demille Road

LaPlata, MD(2)

 

 - 

 

 700 

 

 19,068 

 

 466 

 

 700 

 

 19,534 

 

 1,473 

 

2011

 

1984

 

One Magnolia Drive

Lawrence, KS

 

 3,704 

 

 250 

 

 8,716 

 

 - 

 

 250 

 

 8,716 

 

 340 

 

2012

 

1996

 

3220 Peterson Road

Lebanon, NH

 

 - 

 

 550 

 

 20,138 

 

 64 

 

 550 

 

 20,202 

 

 1,512 

 

2011

 

1985

 

24 Old Etna Road

Lecanto, FL

 

 - 

 

 200 

 

 6,900 

 

 - 

 

 200 

 

 6,900 

 

 1,802 

 

2004

 

1986

 

2341 W. Norvell Bryant Hwy.

Lee, MA

 

 - 

 

 290 

 

 18,135 

 

 926 

 

 290 

 

 19,061 

 

 6,105 

 

2002

 

1998

 

600 & 620 Laurel St.

Leicester, England

 

 - 

 

 6,897 

 

 30,240 

 

 (234) 

 

 4,110 

 

 32,793 

 

 872 

 

2012

 

2010

 

307 London Road

Lenoir, NC

 

 - 

 

 190 

 

 3,748 

 

 641 

 

 190 

 

 4,389 

 

 1,287 

 

2003

 

1998

 

1145 Powell Rd., N.E.

Leominster, MA

 

 - 

 

 530 

 

 6,201 

 

 25 

 

 530 

 

 6,226 

 

 547 

 

2011

 

1966

 

44 Keystone Drive

Lewisburg, WV

 

 - 

 

 260 

 

 3,699 

 

 70 

 

 260 

 

 3,769 

 

 331 

 

2011

 

1995

 

331 Holt Lane

Lexington, NC

 

 - 

 

 200 

 

 3,900 

 

 1,015 

 

 200 

 

 4,915 

 

 1,528 

 

2002

 

1997

 

161 Young Dr.

Libertyville, IL

 

 - 

 

 6,500 

 

 40,024 

 

 - 

 

 6,500 

 

 40,024 

 

 2,953 

 

2011

 

2001

 

901 Florsheim Dr

Lincoln, NE

 

 4,964 

 

 390 

 

 13,807 

 

 - 

 

 390 

 

 13,807 

 

 1,329 

 

2010

 

2000

 

7208 Van Dorn St.

Linwood, NJ

 

 - 

 

 800 

 

 21,984 

 

 554 

 

 816 

 

 22,522 

 

 1,788 

 

2010

 

1997

 

432 Central Ave

Litchfield, CT

 

 - 

 

 1,240 

 

 17,908 

 

 145 

 

 1,250 

 

 18,044 

 

 1,406 

 

2010

 

1998

 

19 Constitution Way

Little Neck, NY

 

 - 

 

 3,350 

 

 38,461 

 

 607 

 

 3,355 

 

 39,063 

 

 3,035 

 

2010

 

2000

 

55-15 Little Neck Pkwy.

Loganville, GA

 

 - 

 

 1,430 

 

 22,912 

 

 292 

 

 1,430 

 

 23,204 

 

 861 

 

2012

 

1997

 

690 Tommy Lee Fuller Drive

Longview, TX

 

 - 

 

 610 

 

 5,520 

 

 - 

 

 610 

 

 5,520 

 

 980 

 

2006

 

2007

 

311 E Hawkins Pkwy

Longwood, FL

 

 - 

 

 1,260 

 

 6,445 

 

 - 

 

 1,260 

 

 6,445 

 

 412 

 

2011

 

2011

 

425 South Ronald Reagan Boulevard

Louisville, KY

 

 - 

 

 490 

 

 10,010 

 

 - 

 

 490 

 

 10,010 

 

 3,003 

 

2005

 

1978

 

4604 Lowe Rd

Louisville, KY

 

 - 

 

 430 

 

 7,135 

 

 163 

 

 430 

 

 7,298 

 

 2,669 

 

2002

 

1974

 

2529 Six Mile Lane

Louisville, KY

 

 - 

 

 350 

 

 4,675 

 

 133 

 

 350 

 

 4,808 

 

 1,789 

 

2002

 

1975

 

1120 Cristland Rd.

Lowell, MA

 

 - 

 

 1,070 

 

 13,481 

 

 103 

 

 1,070 

 

 13,584 

 

 1,091 

 

2011

 

1975

 

841 Merrimack Street

Lowell, MA

 

 - 

 

 680 

 

 3,378 

 

 30 

 

 680 

 

 3,408 

 

 335 

 

2011

 

1969

 

30 Princeton Blvd

Loxley, England

 

 - 

 

 1,840 

 

 21,049 

 

 - 

 

 1,840 

 

 21,049 

 

 510 

 

2013

 

2008

 

Loxley Road

Lutherville, MD

 

 - 

 

 1,100 

 

 19,786 

 

 1,579 

 

 1,100 

 

 21,365 

 

 1,548 

 

2011

 

1988

 

515 Brightfield Road

Macungie, PA

 

 - 

 

 960 

 

 29,033 

 

 17 

 

 960 

 

 29,049 

 

 2,143 

 

2011

 

1994

 

1718 Spring Creek Road

Mahwah, NJ

 

 - 

 

 - 

 

 - 

 

 785 

 

 785 

 

 - 

 

 - 

 

2012

 

0

 

15 Edison Road

Manahawkin, NJ

 

 - 

 

 1,020 

 

 20,361 

 

 122 

 

 1,020 

 

 20,483 

 

 1,559 

 

2011

 

1994

 

1361 Route 72 West

Manalapan, NJ

 

 - 

 

 900 

 

 22,624 

 

 95 

 

 900 

 

 22,719 

 

 1,393 

 

2011

 

2001

 

445 Route 9 South

Manassas, VA

 

 - 

 

 750 

 

 7,446 

 

 530 

 

 750 

 

 7,976 

 

 2,090 

 

2003

 

1996

 

8341 Barrett Dr.

Mansfield, TX

 

 - 

 

 660 

 

 5,251 

 

 - 

 

 660 

 

 5,251 

 

 943 

 

2006

 

2007

 

2281 Country Club Dr

Manteca, CA

 

 6,188 

 

 1,300 

 

 12,125 

 

 1,451 

 

 1,312 

 

 13,564 

 

 3,083 

 

2005

 

1986

 

430 N. Union Rd.

Marianna, FL

 

 - 

 

 340 

 

 8,910 

 

 - 

 

 340 

 

 8,910 

 

 1,822 

 

2006

 

1997

 

2600 Forest Glenn Tr.

Marietta, GA

 

 - 

 

 1,270 

 

 10,519 

 

 404 

 

 1,270 

 

 10,923 

 

 378 

 

2012

 

1997

 

3039 Sandy Plains Road

Marlinton, WV

 

 - 

 

 270 

 

 8,430 

 

 11 

 

 270 

 

 8,441 

 

 657 

 

2011

 

1987

 

Stillwell Road, Route 1

Marmet, WV

 

 - 

 

 540 

 

 26,483 

 

 - 

 

 540 

 

 26,483 

 

 1,924 

 

2011

 

1986

 

1 Sutphin Drive

Martinsburg, WV

 

 - 

 

 340 

 

 17,180 

 

 50 

 

 340 

 

 17,230 

 

 1,261 

 

2011

 

1987

 

2720 Charles Town Road

Martinsville, VA

 

 - 

 

 349 

 

 - 

 

 - 

 

 349 

 

 - 

 

 - 

 

2003

 

0

 

Rolling Hills Rd. & US Hwy. 58

Marysville, WA

 

 4,585 

 

 620 

 

 4,780 

 

 329 

 

 620 

 

 5,109 

 

 1,404 

 

2003

 

1998

 

9802 48th Dr. N.E.

Matawan, NJ

 

 - 

 

 1,830 

 

 20,618 

 

 7 

 

 1,830 

 

 20,625 

 

 1,179 

 

2011

 

1965

 

625 State Highway 34

Matthews, NC

 

 - 

 

 560 

 

 4,738 

 

 - 

 

 560 

 

 4,738 

 

 1,432 

 

2003

 

1998

 

2404 Plantation Center Dr.

McHenry, IL

 

 - 

 

 1,576 

 

 - 

 

 - 

 

 1,576 

 

 - 

 

 - 

 

2006

 

0

 

_

McHenry, IL

 

 - 

 

 3,550 

 

 15,300 

 

 6,718 

 

 3,550 

 

 22,018 

 

 3,677 

 

2006

 

2004

 

3300 Charles Miller Rd.

McKinney, TX

 

 - 

 

 1,570 

 

 7,389 

 

 - 

 

 1,570 

 

 7,389 

 

 807 

 

2009

 

2010

 

2701 Alma Rd.

McMurray, PA

 

 - 

 

 1,440 

 

 15,805 

 

 1,894 

 

 1,440 

 

 17,699 

 

 988 

 

2010

 

2011

 

240 Cedar Hill Dr

Melbourne, FL

 

 - 

 

 7,070 

 

 48,257 

 

 12,990 

 

 7,070 

 

 61,247 

 

 6,577 

 

2007

 

2009

 

7300 Watersong Lane

Melbourne, FL

 

 - 

 

 2,540 

 

 21,319 

 

 - 

 

 2,540 

 

 21,319 

 

 1,053 

 

2010

 

2012

 

3260 N Harbor City Blvd

Melville, NY

 

 - 

 

 4,280 

 

 73,283 

 

 1,111 

 

 4,282 

 

 74,392 

 

 5,700 

 

2010

 

2001

 

70 Pinelawn Rd

Memphis, TN

 

 - 

 

 940 

 

 5,963 

 

 - 

 

 940 

 

 5,963 

 

 1,931 

 

2004

 

1951

 

1150 Dovecrest Rd.

Memphis, TN

 

 - 

 

 390 

 

 9,660 

 

 1,600 

 

 390 

 

 11,260 

 

 989 

 

2010

 

1981

 

141 N. McLean Blvd.

Mendham, NJ

 

 - 

 

 1,240 

 

 27,169 

 

 633 

 

 1,240 

 

 27,802 

 

 2,023 

 

2011

 

1968

 

84 Cold Hill Road

Menomonee Falls, WI

 

 - 

 

 1,020 

 

 6,984 

 

 52 

 

 1,020 

 

 7,036 

 

 1,167 

 

2006

 

2007

 

W128 N6900 Northfield Drive

Mercerville, NJ

 

 - 

 

 860 

 

 9,929 

 

 115 

 

 860 

 

 10,045 

 

 816 

 

2011

 

1967

 

2240 White Horse- Merceville Road

Meriden, CT

 

 - 

 

 1,300 

 

 1,472 

 

 5 

 

 1,300 

 

 1,477 

 

 248 

 

2011

 

1968

 

845 Paddock Ave

Merrillville, IN

 

 - 

 

 643 

 

 7,084 

 

 3,526 

 

 643 

 

 10,610 

 

 6,623 

 

1997

 

1999

 

101 W. 87th Ave.

Merrillville, IN

 

 - 

 

 1,080 

 

 3,413 

 

 - 

 

 1,080 

 

 3,413 

 

 341 

 

2010

 

2011

 

300 W. 89th Ave.

Mesa, AZ

 

 6,111 

 

 950 

 

 9,087 

 

 713 

 

 950 

 

 9,800 

 

 3,499 

 

1999

 

2000

 

7231 E. Broadway

Middleburg Heights, OH

 

 - 

 

 960 

 

 7,780 

 

 - 

 

 960 

 

 7,780 

 

 1,945 

 

2004

 

1998

 

15435 Bagley Rd.

Middleton, WI

 

 - 

 

 420 

 

 4,006 

 

 600 

 

 420 

 

 4,606 

 

 1,349 

 

2001

 

1991

 

6701 Stonefield  Rd.

Middletown, RI

 

 - 

 

 1,480 

 

 19,703 

 

 - 

 

 1,480 

 

 19,703 

 

 1,523 

 

2011

 

1975

 

333 Green End Avenue

Midland, MI

 

 - 

 

 200 

 

 11,025 

 

 58 

 

 200 

 

 11,083 

 

 898 

 

2010

 

1994

 

2325 Rockwell Dr

Milford, DE

 

 - 

 

 400 

 

 7,816 

 

 40 

 

 400 

 

 7,855 

 

 629 

 

2011

 

1997

 

500 South DuPont Boulevard

Milford, DE

 

 - 

 

 680 

 

 19,216 

 

 58 

 

 680 

 

 19,274 

 

 1,477 

 

2011

 

1905

 

700 Marvel Road

Mill Creek, WA

 

 28,882 

 

 10,150 

 

 60,274 

 

 614 

 

 10,179 

 

 60,859 

 

 11,315 

 

2010

 

1998

 

14905 Bothell-Everett Hwy

Millersville, MD

 

 - 

 

 680 

 

 1,020 

 

 25 

 

 680 

 

 1,045 

 

 1,045 

 

2011

 

1962

 

899 Cecil Avenue

Millville, NJ

 

 - 

 

 840 

 

 29,944 

 

 104 

 

 840 

 

 30,048 

 

 2,252 

 

2011

 

1986

 

54 Sharp Street

Missoula, MT

 

 - 

 

 550 

 

 7,490 

 

 377 

 

 550 

 

 7,867 

 

 1,719 

 

2005

 

1998

 

3620 American Way

Monclova, OH

 

 - 

 

 1,750 

 

 12,243 

 

 - 

 

 1,750 

 

 12,243 

 

 305 

 

2011

 

2013

 

6935 Monclova Road

Monmouth Junction, NJ

 

 - 

 

 720 

 

 6,209 

 

 57 

 

 720 

 

 6,266 

 

 537 

 

2011

 

1996

 

2 Deer Park Drive

Monroe, NC

 

 - 

 

 470 

 

 3,681 

 

 648 

 

 470 

 

 4,329 

 

 1,302 

 

2003

 

2001

 

918 Fitzgerald St.

Monroe, NC

 

 - 

 

 310 

 

 4,799 

 

 857 

 

 310 

 

 5,656 

 

 1,603 

 

2003

 

2000

 

919 Fitzgerald St.

Monroe, NC

 

 - 

 

 450 

 

 4,021 

 

 114 

 

 450 

 

 4,135 

 

 1,241 

 

2003

 

1997

 

1316 Patterson Ave.

Monroe, WA

 

 - 

 

 2,560 

 

 34,460 

 

 304 

 

 2,584 

 

 34,741 

 

 4,963 

 

2010

 

1994

 

15465 179th Ave. SE

Monroe Twp, NJ

 

 - 

 

 1,160 

 

 13,193 

 

 75 

 

 1,160 

 

 13,268 

 

 1,084 

 

2011

 

1996

 

292 Applegarth Road

Monteagle, TN

 

 - 

 

 310 

 

 3,318 

 

 - 

 

 310 

 

 3,318 

 

 1,177 

 

2003

 

1980

 

218 Second St., N.E.

Monterey, TN

 

 - 

 

 - 

 

 4,195 

 

 410 

 

 - 

 

 4,605 

 

 2,744 

 

2004

 

1977

 

410 W. Crawford Ave.

Montville, NJ

 

 - 

 

 3,500 

 

 31,002 

 

 233 

 

 3,500 

 

 31,234 

 

 1,949 

 

2011

 

1988

 

165 Changebridge Rd.

Moorestown, NJ

 

 - 

 

 2,060 

 

 51,628 

 

 545 

 

 2,063 

 

 52,170 

 

 4,019 

 

2010

 

2000

 

1205 N. Church St

Morehead City, NC

 

 - 

 

 200 

 

 3,104 

 

 1,648 

 

 200 

 

 4,752 

 

 1,704 

 

1999

 

1999

 

107 Bryan St.

Morgantown, KY

 

 - 

 

 380 

 

 3,705 

 

 615 

 

 380 

 

 4,320 

 

 1,266 

 

2003

 

1965

 

206 S. Warren St.

Morgantown, WV

 

 - 

 

 190 

 

 15,633 

 

 20 

 

 190 

 

 15,653 

 

 831 

 

2011

 

1997

 

161 Bakers Ridge Road

Morton Grove, IL

 

 - 

 

 1,900 

 

 19,374 

 

 59 

 

 1,900 

 

 19,432 

 

 1,092 

 

2010

 

2011

 

5520 N. Lincoln Ave.

Mount Airy, NC

 

 - 

 

 270 

 

 6,430 

 

 577 

 

 270 

 

 7,007 

 

 1,382 

 

2005

 

1998

 

1000 Ridgecrest Lane

Mountain City, TN

 

 - 

 

 220 

 

 5,896 

 

 660 

 

 220 

 

 6,556 

 

 3,874 

 

2001

 

1976

 

919 Medical Park Dr.

Mt. Vernon, WA

 

 - 

 

 400 

 

 2,200 

 

 156 

 

 400 

 

 2,356 

 

 438 

 

2006

 

2001

 

3807 East College Way

Myrtle Beach, SC

 

 - 

 

 6,890 

 

 41,526 

 

 11,668 

 

 6,890 

 

 53,194 

 

 5,700 

 

2007

 

2009

 

101 Brightwater Dr.

Nacogdoches, TX

 

 - 

 

 390 

 

 5,754 

 

 - 

 

 390 

 

 5,754 

 

 1,013 

 

2006

 

2007

 

5902 North St

Naperville, IL

 

 - 

 

 3,470 

 

 29,547 

 

 - 

 

 3,470 

 

 29,547 

 

 2,222 

 

2011

 

2001

 

504 North River Road

Naperville, IL

 

 - 

 

 1,550 

 

 12,237 

 

 - 

 

 1,550 

 

 12,237 

 

 - 

 

2012

 

2013

 

1936 Brookdale Road

Naples, FL

 

 - 

 

 1,716 

 

 17,306 

 

 1,878 

 

 1,738 

 

 19,162 

 

 16,267 

 

1997

 

1999

 

1710 S.W. Health Pkwy.

Naples, FL

 

 - 

 

 550 

 

 5,450 

 

 - 

 

 550 

 

 5,450 

 

 1,530 

 

2004

 

1968

 

2900 12th St. N.

Nashville, TN

 

 - 

 

 4,910 

 

 29,590 

 

 - 

 

 4,910 

 

 29,590 

 

 4,360 

 

2008

 

2007

 

15 Burton Hills Boulevard

Nashville, TN

 

 - 

 

 4,500 

 

 12,287 

 

 - 

 

 4,500 

 

 12,287 

 

 290 

 

2011

 

2013

 

832 Wedgewood Ave

Naugatuck, CT

 

 - 

 

 1,200 

 

 15,826 

 

 176 

 

 1,200 

 

 16,002 

 

 1,229 

 

2011

 

1980

 

4 Hazel Avenue

Needham, MA

 

 - 

 

 1,610 

 

 13,715 

 

 366 

 

 1,610 

 

 14,081 

 

 5,010 

 

2002

 

1994

 

100 West St.

Neenah, WI

 

 - 

 

 630 

 

 15,120 

 

 - 

 

 630 

 

 15,120 

 

 1,432 

 

2010

 

1991

 

131 E. North Water St.

New Braunfels, TX

 

 - 

 

 1,200 

 

 19,800 

 

 - 

 

 1,200 

 

 19,800 

 

 1,466 

 

2011

 

2009

 

2294 East Common Street

New Haven, IN

 

 - 

 

 176 

 

 3,524 

 

 - 

 

 176 

 

 3,524 

 

 1,175 

 

2004

 

1981

 

1201 Daly Dr.

New Moston, England

 

 - 

 

 1,989 

 

 5,882 

 

 - 

 

 1,989 

 

 5,882 

 

 68 

 

2013

 

2010

 

90a Broadway

Newark, DE

 

 - 

 

 560 

 

 21,220 

 

 1,488 

 

 560 

 

 22,708 

 

 5,185 

 

2004

 

1998

 

200 E. Village Rd.

Newcastle Under Lyme, England

 

 - 

 

 1,492 

 

 7,598 

 

 - 

 

 1,492 

 

 7,598 

 

 84 

 

2013

 

2010

 

Hempstalls Lane

Newport, VT

 

 - 

 

 290 

 

 3,867 

 

 - 

 

 290 

 

 3,867 

 

 331 

 

2011

 

1967

 

35 Bel-Aire Drive

Norman, OK

 

 - 

 

 55 

 

 1,484 

 

 - 

 

 55 

 

 1,484 

 

 782 

 

1995

 

1995

 

1701 Alameda Dr.

Norman, OK

 

 11,161 

 

 1,480 

 

 33,330 

 

 - 

 

 1,480 

 

 33,330 

 

 1,288 

 

2012

 

1985

 

800 Canadian Trails Drive

Norristown, PA

 

 - 

 

 1,200 

 

 19,488 

 

 1,762 

 

 1,200 

 

 21,250 

 

 1,521 

 

2011

 

1995

 

1700 Pine Street

North Andover, MA

 

 - 

 

 950 

 

 21,817 

 

 54 

 

 950 

 

 21,870 

 

 1,645 

 

2011

 

1977

 

140 Prescott Street

North Andover, MA

 

 - 

 

 1,070 

 

 17,341 

 

 1,303 

 

 1,070 

 

 18,644 

 

 1,403 

 

2011

 

1990

 

1801 Turnpike Street

North Augusta, SC

 

 - 

 

 332 

 

 2,558 

 

 - 

 

 332 

 

 2,558 

 

 1,049 

 

1999

 

1998

 

105 North Hills Dr.

North Cape May, NJ

 

 - 

 

 600 

 

 22,266 

 

 36 

 

 600 

 

 22,302 

 

 1,669 

 

2011

 

1995

 

700 Townbank Road

Northampton, England

 

 - 

 

 6,961 

 

 23,306 

 

 - 

 

 6,961 

 

 23,306 

 

 267 

 

2013

 

2011

 

Cliftonville Road

Nuneaton, England

 

 - 

 

 4,467 

 

 12,068 

 

 - 

 

 4,467 

 

 12,068 

 

 133 

 

2013

 

2011

 

132 Coventry Road

Nuthall, England

 

 - 

 

 3,356 

 

 14,020 

 

 - 

 

 3,356 

 

 14,020 

 

 156 

 

2013

 

2011

 

172 Nottingham Road

Oak Hill, WV

 

 - 

 

 240 

 

 24,506 

 

 - 

 

 240 

 

 24,506 

 

 1,777 

 

2011

 

1988

 

422 23rd Street

Oak Hill, WV

 

 - 

 

 170 

 

 721 

 

 - 

 

 170 

 

 721 

 

 115 

 

2011

 

1999

 

438 23rd Street

Ocala, FL

 

 - 

 

 1,340 

 

 10,564 

 

 - 

 

 1,340 

 

 10,564 

 

 1,272 

 

2008

 

2009

 

2650 SE 18TH Avenue

Ogden, UT

 

 - 

 

 360 

 

 6,700 

 

 699 

 

 360 

 

 7,399 

 

 1,734 

 

2004

 

1998

 

1340 N. Washington Blv.

Oklahoma City, OK

 

 - 

 

 590 

 

 7,513 

 

 - 

 

 590 

 

 7,513 

 

 1,139 

 

2007

 

2008

 

13200 S. May Ave

Oklahoma City, OK

 

 - 

 

 760 

 

 7,017 

 

 - 

 

 760 

 

 7,017 

 

 971 

 

2007

 

2009

 

11320 N. Council Road

Olympia, WA

 

 6,829 

 

 550 

 

 16,689 

 

 158 

 

 553 

 

 16,844 

 

 2,390 

 

2010

 

1995

 

616 Lilly Rd. NE

Omaha, NE

 

 - 

 

 370 

 

 10,230 

 

 - 

 

 370 

 

 10,230 

 

 1,003 

 

2010

 

1998

 

11909 Miracle Hills Dr.

Omaha, NE

 

 4,274 

 

 380 

 

 8,864 

 

 - 

 

 380 

 

 8,864 

 

 902 

 

2010

 

1999

 

5728 South 108th St.

Oneonta, NY

 

 - 

 

 80 

 

 5,020 

 

 - 

 

 80 

 

 5,020 

 

 806 

 

2007

 

1996

 

1846 County Highway 48

Ormond Beach, FL

 

 - 

 

 - 

 

 2,739 

 

 452 

 

 - 

 

 3,191 

 

 1,641 

 

2002

 

1983

 

103 N. Clyde Morris Blvd.

Orwigsburg, PA

 

 - 

 

 650 

 

 20,632 

 

 134 

 

 650 

 

 20,766 

 

 1,571 

 

2011

 

1992

 

1000 Orwigsburg Manor Drive

Oshkosh, WI

 

 - 

 

 900 

 

 3,800 

 

 3,687 

 

 900 

 

 7,487 

 

 1,471 

 

2006

 

2005

 

711 Bayshore Drive

Oshkosh, WI

 

 - 

 

 400 

 

 23,237 

 

 - 

 

 400 

 

 23,237 

 

 3,031 

 

2007

 

2008

 

631 Hazel Street

Overland Park, KS

 

 - 

 

 1,120 

 

 8,360 

 

 - 

 

 1,120 

 

 8,360 

 

 2,014 

 

2005

 

1970

 

7541 Switzer St.

Overland Park, KS

 

 - 

 

 3,730 

 

 27,076 

 

 340 

 

 3,730 

 

 27,416 

 

 3,092 

 

2008

 

2009

 

12000 Lamar Avenue

Overland Park, KS

 

 - 

 

 4,500 

 

 29,105 

 

 7,295 

 

 4,500 

 

 36,400 

 

 3,075 

 

2010

 

1988

 

6101 W 119th St

Owasso, OK

 

 - 

 

 215 

 

 1,380 

 

 - 

 

 215 

 

 1,380 

 

 640 

 

1996

 

1996

 

12807 E. 86th Place N.

Owensboro, KY

 

 - 

 

 240 

 

 6,760 

 

 609 

 

 240 

 

 7,369 

 

 1,735 

 

1993

 

1966

 

1614 W. Parrish Ave.

Owensboro, KY

 

 - 

 

 225 

 

 13,275 

 

 - 

 

 225 

 

 13,275 

 

 3,300 

 

2005

 

1964

 

1205 Leitchfield Rd.

Owenton, KY

 

 - 

 

 100 

 

 2,400 

 

 - 

 

 100 

 

 2,400 

 

 733 

 

2005

 

1979

 

905 Hwy. 127 N.

Oxford, MI

 

 11,500 

 

 1,430 

 

 15,791 

 

 - 

 

 1,430 

 

 15,791 

 

 1,359 

 

2010

 

2001

 

701 Market St

Palestine, TX

 

 - 

 

 180 

 

 4,320 

 

 1,300 

 

 180 

 

 5,620 

 

 1,046 

 

2006

 

2005

 

1625 W. Spring St.

Palm Coast, FL

 

 - 

 

 870 

 

 10,957 

 

 - 

 

 870 

 

 10,957 

 

 1,186 

 

2008

 

2010

 

50 Town Ct.

Panama City Beach, FL

 

 - 

 

 900 

 

 7,717 

 

 35 

 

 900 

 

 7,752 

 

 526 

 

2011

 

2005

 

6012 Magnolia Beach Road

Paris, TX

 

 - 

 

 490 

 

 5,452 

 

 - 

 

 490 

 

 5,452 

 

 2,604 

 

2005

 

2006

 

750 N Collegiate Dr

Parkersburg, WV

 

 - 

 

 390 

 

 21,288 

 

 643 

 

 390 

 

 21,931 

 

 1,599 

 

2011

 

1979

 

723 Summers Street

Parkville, MD

 

 - 

 

 1,350 

 

 16,071 

 

 274 

 

 1,350 

 

 16,345 

 

 1,265 

 

2011

 

1980

 

8710 Emge Road

Parkville, MD

 

 - 

 

 791 

 

 11,186 

 

 2 

 

 791 

 

 11,189 

 

 897 

 

2011

 

1972

 

8720 Emge Road

Parkville, MD

 

 - 

 

 1,100 

 

 11,768 

 

 - 

 

 1,100 

 

 11,768 

 

 934 

 

2011

 

1972

 

1801 Wentworth Road

Pasadena, TX

 

 9,820 

 

 720 

 

 24,080 

 

 - 

 

 720 

 

 24,080 

 

 4,301 

 

2007

 

2005

 

3434 Watters Rd.

Paso Robles, CA

 

 - 

 

 1,770 

 

 8,630 

 

 693 

 

 1,770 

 

 9,323 

 

 2,919 

 

2002

 

1998

 

1919 Creston Rd.

Pawleys Island, SC

 

 - 

 

 2,020 

 

 32,590 

 

 6,272 

 

 2,020 

 

 38,862 

 

 7,617 

 

2005

 

1997

 

120 Lakes at Litchfield Dr.

Pella, IA

 

 - 

 

 870 

 

 6,716 

 

 89 

 

 870 

 

 6,805 

 

 237 

 

2012

 

2002

 

2602 Fifield Road

Pennington, NJ

 

 - 

 

 1,380 

 

 27,620 

 

 506 

 

 1,432 

 

 28,074 

 

 1,617 

 

2011

 

2000

 

143 West Franklin Avenue

Pennsauken, NJ

 

 - 

 

 900 

 

 10,780 

 

 179 

 

 900 

 

 10,959 

 

 950 

 

2011

 

1985

 

5101 North Park Drive

Petoskey, MI

 

 6,102 

 

 860 

 

 14,452 

 

 - 

 

 860 

 

 14,452 

 

 1,141 

 

2011

 

1997

 

965 Hager Dr

Philadelphia, PA

 

 - 

 

 2,700 

 

 25,709 

 

 333 

 

 2,700 

 

 26,041 

 

 1,983 

 

2011

 

1976

 

184 Bethlehem Pike

Philadelphia, PA

 

 - 

 

 2,930 

 

 10,433 

 

 3,373 

 

 2,930 

 

 13,806 

 

 1,050 

 

2011

 

1952

 

1526 Lombard Street

Philadelphia, PA

 

 - 

 

 540 

 

 11,239 

 

 65 

 

 540 

 

 11,304 

 

 837 

 

2011

 

1965

 

8015 Lawndale Avenue

Philadelphia, PA

 

 - 

 

 1,810 

 

 16,898 

 

 32 

 

 1,810 

 

 16,931 

 

 1,424 

 

2011

 

1972

 

650 Edison Avenue

Phillipsburg, NJ

 

 - 

 

 800 

 

 21,175 

 

 193 

 

 800 

 

 21,368 

 

 1,644 

 

2011

 

1992

 

290 Red School Lane

Phillipsburg, NJ

 

 - 

 

 300 

 

 8,114 

 

 38 

 

 300 

 

 8,151 

 

 627 

 

2011

 

1905

 

843 Wilbur Avenue

Pigeon Forge, TN

 

 - 

 

 320 

 

 4,180 

 

 117 

 

 320 

 

 4,297 

 

 1,643 

 

2001

 

1986

 

415 Cole Dr.

Pinehurst, NC

 

 - 

 

 290 

 

 2,690 

 

 484 

 

 290 

 

 3,174 

 

 989 

 

2003

 

1998

 

17 Regional Dr.

Piqua, OH

 

 - 

 

 204 

 

 1,885 

 

 - 

 

 204 

 

 1,885 

 

 800 

 

1997

 

1997

 

1744 W. High St.

Pittsburgh, PA

 

 - 

 

 1,750 

 

 8,572 

 

 115 

 

 1,750 

 

 8,687 

 

 2,145 

 

2005

 

1998

 

100 Knoedler Rd.

Plainview, NY

 

 - 

 

 3,990 

 

 11,969 

 

 184 

 

 3,990 

 

 12,153 

 

 843 

 

2011

 

1963

 

150 Sunnyside Blvd

Plattsmouth, NE

 

 - 

 

 250 

 

 5,650 

 

 - 

 

 250 

 

 5,650 

 

 583 

 

2010

 

1999

 

1913 E. Highway 34

Plymouth, MI

 

 - 

 

 1,490 

 

 19,990 

 

 129 

 

 1,490 

 

 20,119 

 

 1,643 

 

2010

 

1972

 

14707 Northville Rd

Port St. Joe, FL

 

 - 

 

 370 

 

 2,055 

 

 - 

 

 370 

 

 2,055 

 

 962 

 

2004

 

1982

 

220 9th St.

Port St. Lucie, FL

 

 - 

 

 8,700 

 

 47,230 

 

 4,878 

 

 8,700 

 

 52,108 

 

 4,975 

 

2008

 

2010

 

10685 SW Stony Creek Way

Post Falls, ID

 

 - 

 

 2,700 

 

 14,217 

 

 2,181 

 

 2,700 

 

 16,398 

 

 2,308 

 

2007

 

2008

 

460 N. Garden Plaza Ct.

Pottsville, PA

 

 - 

 

 950 

 

 26,964 

 

 202 

 

 950 

 

 27,166 

 

 2,076 

 

2011

 

1990

 

1000 Schuylkill Manor Road

Princeton, NJ

 

 - 

 

 1,730 

 

 30,888 

 

 1,007 

 

 1,775 

 

 31,850 

 

 1,857 

 

2011

 

2001

 

155 Raymond Road

Puyallup, WA

 

 11,445 

 

 1,150 

 

 20,776 

 

 201 

 

 1,156 

 

 20,971 

 

 3,125 

 

2010

 

1985

 

123 Fourth Ave. NW

Quakertown, PA

 

 - 

 

 1,040 

 

 25,389 

 

 72 

 

 1,040 

 

 25,461 

 

 1,906 

 

2011

 

1977

 

1020 South Main Street

Raleigh, NC

 

 - 

 

 10,000 

 

 - 

 

 - 

 

 10,000 

 

 - 

 

 - 

 

2008

 

0

 

St. Albans Drive and Camelot Drive

Raleigh, NC

 

 25,735 

 

 3,530 

 

 59,589 

 

 - 

 

 3,530 

 

 59,589 

 

 1,967 

 

2012

 

2002

 

5301 Creedmoor Road

Raleigh, NC

 

 - 

 

 2,580 

 

 16,837 

 

 - 

 

 2,580 

 

 16,837 

 

 624 

 

2012

 

1988

 

7900 Creedmoor Road

Reading, PA

 

 - 

 

 980 

 

 19,906 

 

 102 

 

 980 

 

 20,008 

 

 1,520 

 

2011

 

1994

 

5501 Perkiomen Ave

Red Bank, NJ

 

 - 

 

 1,050 

 

 21,275 

 

 123 

 

 1,050 

 

 21,398 

 

 1,312 

 

2011

 

1997

 

One Hartford Dr.

Rehoboth Beach, DE

 

 - 

 

 960 

 

 24,248 

 

 312 

 

 973 

 

 24,547 

 

 1,917 

 

2010

 

1999

 

36101 Seaside Blvd

Reidsville, NC

 

 - 

 

 170 

 

 3,830 

 

 857 

 

 170 

 

 4,687 

 

 1,475 

 

2002

 

1998

 

2931 Vance St.

Reno, NV

 

 - 

 

 1,060 

 

 11,440 

 

 605 

 

 1,060 

 

 12,045 

 

 2,893 

 

2004

 

1998

 

5165 Summit Ridge Road

Ridgeland, MS

 

 - 

 

 520 

 

 7,675 

 

 427 

 

 520 

 

 8,102 

 

 2,144 

 

2003

 

1997

 

410 Orchard Park

Ridgely, TN

 

 - 

 

 300 

 

 5,700 

 

 97 

 

 300 

 

 5,797 

 

 2,039 

 

2001

 

1990

 

117 N. Main St.

Ridgewood, NJ

 

 - 

 

 1,350 

 

 16,170 

 

 479 

 

 1,350 

 

 16,650 

 

 1,233 

 

2011

 

1971

 

330 Franklin Turnpike

Rockledge, FL

 

 - 

 

 360 

 

 4,117 

 

 - 

 

 360 

 

 4,117 

 

 1,782 

 

2001

 

1970

 

1775 Huntington Lane

Rockville, MD

 

 - 

 

 - 

 

 16,398 

 

 10 

 

 - 

 

 16,408 

 

 758 

 

2012

 

1986

 

9701 Medical Center Drive

Rockville, CT

 

 - 

 

 1,500 

 

 4,835 

 

 76 

 

 1,500 

 

 4,911 

 

 504 

 

2011

 

1960

 

1253 Hartford Turnpike

Rockville Centre, NY

 

 - 

 

 4,290 

 

 20,310 

 

 298 

 

 4,290 

 

 20,608 

 

 1,327 

 

2011

 

2002

 

260 Maple Ave

Rockwood, TN

 

 - 

 

 500 

 

 7,116 

 

 741 

 

 500 

 

 7,857 

 

 2,718 

 

2001

 

1979

 

5580 Roane State Hwy.

Rocky Hill, CT

 

 - 

 

 1,090 

 

 6,710 

 

 1,500 

 

 1,090 

 

 8,210 

 

 2,062 

 

2003

 

1996

 

60 Cold Spring Rd.

Rogersville, TN

 

 - 

 

 350 

 

 3,278 

 

 - 

 

 350 

 

 3,278 

 

 1,167 

 

2003

 

1980

 

109 Hwy. 70 N.

Rohnert Park, CA

 

 13,710 

 

 6,500 

 

 18,700 

 

 1,498 

 

 6,546 

 

 20,152 

 

 4,417 

 

2005

 

1986

 

4855 Snyder Lane

Romeoville, IL

 

 - 

 

 1,895 

 

 - 

 

 - 

 

 1,895 

 

 - 

 

 - 

 

2006

 

0

 

Grand Haven Circle

Roswell, GA

 

 7,883 

 

 1,107 

 

 9,627 

 

 793 

 

 1,114 

 

 10,413 

 

 7,142 

 

1997

 

1999

 

655 Mansell Rd.

Rugeley, England

 

 - 

 

 2,552 

 

 13,786 

 

 - 

 

 2,552 

 

 13,786 

 

 161 

 

2013

 

2010

 

Horse Fair

Rutland, VT

 

 - 

 

 1,190 

 

 23,655 

 

 87 

 

 1,190 

 

 23,743 

 

 1,809 

 

2011

 

1968

 

9 Haywood Avenue

Sacramento, CA

 

 10,295 

 

 940 

 

 14,781 

 

 96 

 

 952 

 

 14,865 

 

 2,214 

 

2010

 

1978

 

6350 Riverside Blvd

Saint Simons Island, GA

 

 - 

 

 6,440 

 

 50,060 

 

 1,502 

 

 6,440 

 

 51,562 

 

 7,118 

 

2008

 

2007

 

136 Marsh's Edge Lane

Salem, OR

 

 - 

 

 449 

 

 5,171 

 

 - 

 

 449 

 

 5,172 

 

 2,099 

 

1999

 

1998

 

1355 Boone Rd. S.E.

Salisbury, NC

 

 - 

 

 370 

 

 5,697 

 

 168 

 

 370 

 

 5,865 

 

 1,683 

 

2003

 

1997

 

2201 Statesville Blvd.

San Angelo, TX

 

 - 

 

 260 

 

 8,800 

 

 425 

 

 260 

 

 9,225 

 

 2,170 

 

2004

 

1997

 

2695 Valleyview Blvd.

San Antonio, TX

 

 - 

 

 6,120 

 

 28,169 

 

 2,124 

 

 6,120 

 

 30,293 

 

 1,831 

 

2010

 

2011

 

2702 Cembalo Blvd

San Antonio, TX

 

 10,608 

 

 560 

 

 7,315 

 

 - 

 

 560 

 

 7,315 

 

 2,478 

 

2002

 

2000

 

5437 Eisenhaur Rd.

San Antonio, TX

 

 9,778 

 

 640 

 

 13,360 

 

 - 

 

 640 

 

 13,360 

 

 2,493 

 

2007

 

2004

 

8503 Mystic Park

San Ramon, CA

 

 9,107 

 

 2,430 

 

 17,488 

 

 52 

 

 2,435 

 

 17,535 

 

 2,483 

 

2010

 

1989

 

18888 Bollinger Canyon Rd

Sanatoga, PA

 

 - 

 

 980 

 

 30,695 

 

 37 

 

 980 

 

 30,733 

 

 2,260 

 

2011

 

1993

 

225 Evergreen Road

Sand Springs, OK

 

 6,711 

 

 910 

 

 19,654 

 

 - 

 

 910 

 

 19,654 

 

 773 

 

2012

 

2002

 

4402 South 129th Avenue West

Sarasota, FL

 

 - 

 

 475 

 

 3,175 

 

 - 

 

 475 

 

 3,175 

 

 1,548 

 

1996

 

1995

 

8450 McIntosh Rd.

Sarasota, FL

 

 - 

 

 600 

 

 3,400 

 

 - 

 

 600 

 

 3,400 

 

 1,064 

 

2004

 

1982

 

4602 Northgate Ct.

Sarasota, FL

 

 - 

 

 1,120 

 

 12,489 

 

 74 

 

 1,120 

 

 12,563 

 

 456 

 

2012

 

1999

 

2290 Cattlemen Road

Sarasota, FL

 

 - 

 

 950 

 

 8,825 

 

 244 

 

 950 

 

 9,069 

 

 321 

 

2012

 

1998

 

3221 Fruitville Road

Sarasota, FL

 

 - 

 

 880 

 

 9,854 

 

 65 

 

 880 

 

 9,919 

 

 375 

 

2012

 

1990

 

3749 Sarasota Square Boulevard

Scituate, MA

 

 - 

 

 1,740 

 

 10,640 

 

 - 

 

 1,740 

 

 10,640 

 

 2,374 

 

2005

 

1976

 

309 Driftway

Scott Depot, WV

 

 - 

 

 350 

 

 6,876 

 

 58 

 

 350 

 

 6,934 

 

 553 

 

2011

 

1995

 

5 Rolling Meadows

Seaford, DE

 

 - 

 

 720 

 

 14,029 

 

 53 

 

 720 

 

 14,082 

 

 1,129 

 

2011

 

1977

 

1100 Norman Eskridge Highway

Seaford, DE

 

 - 

 

 830 

 

 7,995 

 

 1,547 

 

 830 

 

 9,542 

 

 358 

 

2012

 

1992

 

715 East King Street

Seattle, WA

 

 7,664 

 

 5,190 

 

 9,350 

 

 350 

 

 5,199 

 

 9,692 

 

 2,366 

 

2010

 

1962

 

11501 15th Ave NE

Seattle, WA

 

 7,322 

 

 3,420 

 

 15,555 

 

 138 

 

 3,420 

 

 15,693 

 

 2,539 

 

2010

 

2000

 

2326 California Ave SW

Seattle, WA

 

 9,105 

 

 2,630 

 

 10,257 

 

 36 

 

 2,630 

 

 10,293 

 

 1,760 

 

2010

 

2003

 

4611 35th Ave SW

Seattle, WA

 

 28,615 

 

 10,670 

 

 37,291 

 

 157 

 

 10,700 

 

 37,418 

 

 7,938 

 

2010

 

2005

 

805 4th Ave N

Selbyville, DE

 

 - 

 

 750 

 

 25,912 

 

 203 

 

 769 

 

 26,096 

 

 2,051 

 

2010

 

2008

 

21111 Arrington Dr

Seven Fields, PA

 

 - 

 

 484 

 

 4,663 

 

 60 

 

 484 

 

 4,722 

 

 1,923 

 

1999

 

1999

 

500 Seven Fields Blvd.

Severna Park, MD(2)

 

 - 

 

 2,120 

 

 31,273 

 

 808 

 

 2,120 

 

 32,081 

 

 2,318 

 

2011

 

1981

 

24 Truckhouse Road

Shawnee, OK

 

 - 

 

 80 

 

 1,400 

 

 - 

 

 80 

 

 1,400 

 

 673 

 

1996

 

1995

 

3947 Kickapoo

Sheboygan, WI

 

 - 

 

 80 

 

 5,320 

 

 3,774 

 

 80 

 

 9,094 

 

 1,382 

 

2006

 

2006

 

4221 Kadlec Dr.

Shelbyville, KY

 

 - 

 

 630 

 

 3,870 

 

 - 

 

 630 

 

 3,870 

 

 973 

 

2005

 

1965

 

1871 Midland Trail

Shelton, WA

 

 - 

 

 530 

 

 17,049 

 

 137 

 

 530 

 

 17,186 

 

 713 

 

2012

 

1989

 

900 W Alpine Way

Shepherdstown, WV

 

 - 

 

 250 

 

 13,806 

 

 14 

 

 250 

 

 13,819 

 

 1,021 

 

2011

 

1990

 

80 Maddex Drive

Sherman, TX

 

 - 

 

 700 

 

 5,221 

 

 - 

 

 700 

 

 5,221 

 

 990 

 

2005

 

2006

 

1011 E. Pecan Grove Rd.

Shillington, PA

 

 - 

 

 1,020 

 

 19,569 

 

 956 

 

 1,020 

 

 20,525 

 

 1,515 

 

2011

 

1964

 

500 E Philadelphia Ave

Shrewsbury, NJ

 

 - 

 

 2,120 

 

 38,116 

 

 425 

 

 2,120 

 

 38,541 

 

 2,994 

 

2010

 

2000

 

5 Meridian Way

Silver Spring, MD

 

 - 

 

 1,250 

 

 7,278 

 

 268 

 

 1,250 

 

 7,547 

 

 349 

 

2012

 

1952

 

2101 Fairland Road

Silver Spring, MD

 

 - 

 

 1,150 

 

 9,252 

 

 104 

 

 1,150 

 

 9,356 

 

 420 

 

2012

 

1968

 

12325 New Hampshire

Silvis, IL

 

 - 

 

 880 

 

 16,420 

 

 - 

 

 880 

 

 16,420 

 

 1,470 

 

2010

 

2005

 

1900 10th St.

Sissonville, WV

 

 - 

 

 600 

 

 23,948 

 

 54 

 

 600 

 

 24,003 

 

 1,785 

 

2011

 

1981

 

302 Cedar Ridge Road

Sisterville, WV

 

 - 

 

 200 

 

 5,400 

 

 242 

 

 200 

 

 5,642 

 

 456 

 

2011

 

1986

 

201 Wood Street

Smithfield, NC

 

 - 

 

 290 

 

 5,680 

 

 - 

 

 290 

 

 5,680 

 

 1,647 

 

2003

 

1998

 

830 Berkshire Rd.

Somerset, MA

 

 - 

 

 1,010 

 

 29,577 

 

 152 

 

 1,010 

 

 29,728 

 

 2,192 

 

2011

 

1998

 

455 Brayton Avenue

Sonoma, CA

 

 14,899 

 

 1,100 

 

 18,400 

 

 1,374 

 

 1,109 

 

 19,764 

 

 4,269 

 

2005

 

1988

 

800 Oregon St.

South Boston, MA

 

 - 

 

 385 

 

 2,002 

 

 5,218 

 

 385 

 

 7,220 

 

 2,989 

 

1995

 

1961

 

804 E. Seventh St.

South Pittsburg, TN

 

 - 

 

 430 

 

 5,628 

 

 - 

 

 430 

 

 5,628 

 

 1,724 

 

2004

 

1979

 

201E. 10th St.

Southbury, CT

 

 - 

 

 1,860 

 

 23,613 

 

 958 

 

 1,860 

 

 24,571 

 

 1,741 

 

2011

 

2001

 

655 Main St

Sparks, NV

 

 - 

 

 3,700 

 

 46,526 

 

 - 

 

 3,700 

 

 46,526 

 

 5,594 

 

2007

 

2009

 

275 Neighborhood Way

Spartanburg, SC

 

 - 

 

 3,350 

 

 15,750 

 

 13,385 

 

 3,350 

 

 29,135 

 

 4,555 

 

2005

 

1997

 

110 Summit Hills Dr.

Spencer, WV

 

 - 

 

 190 

 

 8,810 

 

 28 

 

 190 

 

 8,838 

 

 677 

 

2011

 

1988

 

825 Summit Street

Spring City, TN

 

 - 

 

 420 

 

 6,085 

 

 3,210 

 

 420 

 

 9,295 

 

 2,896 

 

2001

 

1987

 

331 Hinch St.

Spring House, PA

 

 - 

 

 900 

 

 10,780 

 

 199 

 

 900 

 

 10,979 

 

 884 

 

2011

 

1900

 

905 Penllyn Pike

St. Charles, MD

 

 - 

 

 580 

 

 15,555 

 

 84 

 

 580 

 

 15,639 

 

 1,203 

 

2011

 

1996

 

4140 Old Washington Highway

St. Louis, MO

 

 - 

 

 1,890 

 

 12,165 

 

 131 

 

 1,890 

 

 12,297 

 

 1,043 

 

2010

 

1963

 

6543 Chippewa St

Stanwood, WA

 

 - 

 

 2,260 

 

 28,474 

 

 277 

 

 2,283 

 

 28,728 

 

 4,391 

 

2010

 

1998

 

7212 265th St NW

Statesville, NC

 

 - 

 

 150 

 

 1,447 

 

 266 

 

 150 

 

 1,713 

 

 532 

 

2003

 

1990

 

2441 E. Broad St.

Statesville, NC

 

 - 

 

 310 

 

 6,183 

 

 8 

 

 310 

 

 6,191 

 

 1,735 

 

2003

 

1996

 

2806 Peachtree Place

Statesville, NC

 

 - 

 

 140 

 

 3,627 

 

 - 

 

 140 

 

 3,627 

 

 1,046 

 

2003

 

1999

 

2814 Peachtree Rd.

Stillwater, OK

 

 - 

 

 80 

 

 1,400 

 

 - 

 

 80 

 

 1,400 

 

 675 

 

1995

 

1995

 

1616 McElroy Rd.

Stockton, CA

 

 2,963 

 

 2,280 

 

 5,983 

 

 285 

 

 2,372 

 

 6,176 

 

 1,093 

 

2010

 

1988

 

6725 Inglewood

Summit, NJ

 

 - 

 

 3,080 

 

 14,152 

 

 - 

 

 3,080 

 

 14,152 

 

 1,054 

 

2011

 

2001

 

41 Springfield Avenue

Superior, WI

 

 - 

 

 1,020 

 

 13,735 

 

 - 

 

 1,020 

 

 13,735 

 

 380 

 

2009

 

2010

 

1915 North 34th Street

Swanton, OH

 

 - 

 

 330 

 

 6,370 

 

 - 

 

 330 

 

 6,370 

 

 1,690 

 

2004

 

1950

 

401 W. Airport Hwy.

Takoma Park, MD

 

 - 

 

 1,300 

 

 10,136 

 

 - 

 

 1,300 

 

 10,136 

 

 467 

 

2012

 

1962

 

7525 Carroll Avenue

Texarkana, TX

 

 - 

 

 192 

 

 1,403 

 

 - 

 

 192 

 

 1,403 

 

 650 

 

1996

 

1996

 

4204 Moores Lane

Thomasville, GA

 

 - 

 

 530 

 

 13,899 

 

 436 

 

 530 

 

 14,335 

 

 936 

 

2011

 

2006

 

423 Covington Avenue

Tomball, TX

 

 - 

 

 1,050 

 

 13,300 

 

 671 

 

 1,050 

 

 13,971 

 

 998 

 

2011

 

2001

 

1221 Graham Dr

Toms River, NJ

 

 - 

 

 1,610 

 

 34,627 

 

 508 

 

 1,671 

 

 35,074 

 

 2,747 

 

2010

 

2005

 

1587 Old Freehold Rd

Topeka, KS

 

 - 

 

 260 

 

 12,712 

 

 - 

 

 260 

 

 12,712 

 

 517 

 

2012

 

2011

 

1931 Southwest Arvonia Place

Towson, MD(2)

 

 - 

 

 1,180 

 

 13,280 

 

 194 

 

 1,180 

 

 13,475 

 

 1,048 

 

2011

 

1973

 

7700 York Road

Troy, OH

 

 - 

 

 200 

 

 2,000 

 

 4,254 

 

 200 

 

 6,254 

 

 1,336 

 

1997

 

1997

 

81 S. Stanfield Rd.

Troy, OH

 

 - 

 

 470 

 

 16,730 

 

 - 

 

 470 

 

 16,730 

 

 4,273 

 

2004

 

1971

 

512 Crescent Drive

Trumbull, CT

 

 - 

 

 4,440 

 

 43,384 

 

 - 

 

 4,440 

 

 43,384 

 

 3,084 

 

2011

 

2001

 

6949 Main Street

Tucson, AZ

 

 - 

 

 930 

 

 13,399 

 

 - 

 

 930 

 

 13,399 

 

 3,077 

 

2005

 

1985

 

6211 N. La Cholla Blvd.

Tulsa, OK

 

 - 

 

 1,390 

 

 7,110 

 

 462 

 

 1,390 

 

 7,572 

 

 783 

 

2010

 

1998

 

7220 S. Yale Ave.

Tulsa, OK

 

 - 

 

 1,320 

 

 10,087 

 

 - 

 

 1,320 

 

 10,087 

 

 345 

 

2011

 

2012

 

7902 South Mingo Road East

Tyler, TX

 

 - 

 

 650 

 

 5,268 

 

 - 

 

 650 

 

 5,268 

 

 939 

 

2006

 

2007

 

5550 Old Jacksonville Hwy.

Uhrichsville, OH

 

 - 

 

 24 

 

 6,716 

 

 - 

 

 24 

 

 6,716 

 

 1,499 

 

2006

 

1977

 

5166 Spanson Drive S.E.

Uniontown, PA

 

 - 

 

 310 

 

 6,817 

 

 84 

 

 310 

 

 6,901 

 

 541 

 

2011

 

1964

 

75 Hikle Street

Vacaville, CA

 

 14,097 

 

 900 

 

 17,100 

 

 1,417 

 

 900 

 

 18,517 

 

 4,050 

 

2005

 

1987

 

799 Yellowstone Dr.

Vallejo, CA

 

 14,113 

 

 4,000 

 

 18,000 

 

 1,841 

 

 4,030 

 

 19,812 

 

 4,320 

 

2005

 

1989

 

350 Locust Dr.

Vallejo, CA

 

 7,458 

 

 2,330 

 

 15,407 

 

 152 

 

 2,330 

 

 15,559 

 

 2,539 

 

2010

 

1990

 

2261 Tuolumne

Valley Falls, RI

 

 - 

 

 1,080 

 

 7,433 

 

 10 

 

 1,080 

 

 7,443 

 

 593 

 

2011

 

1975

 

100 Chambers Street

Valparaiso, IN

 

 - 

 

 112 

 

 2,558 

 

 - 

 

 112 

 

 2,558 

 

 907 

 

2001

 

1998

 

2601 Valparaiso St.

Valparaiso, IN

 

 - 

 

 108 

 

 2,962 

 

 - 

 

 108 

 

 2,962 

 

 1,028 

 

2001

 

1999

 

2501 Valparaiso St.

Vancouver, WA

 

 11,826 

 

 1,820 

 

 19,042 

 

 99 

 

 1,821 

 

 19,140 

 

 2,895 

 

2010

 

2006

 

10011 NE 118th Ave

Venice, FL

 

 - 

 

 500 

 

 6,000 

 

 - 

 

 500 

 

 6,000 

 

 1,654 

 

2004

 

1987

 

1240 Pinebrook Rd.

Venice, FL

 

 - 

 

 1,150 

 

 10,674 

 

 - 

 

 1,150 

 

 10,674 

 

 1,207 

 

2008

 

2009

 

1600 Center Rd.

Vero Beach, FL

 

 - 

 

 263 

 

 3,187 

 

 - 

 

 263 

 

 3,187 

 

 1,094 

 

2001

 

1999

 

420 4th Ct.

Vero Beach, FL

 

 - 

 

 297 

 

 3,263 

 

 - 

 

 297 

 

 3,263 

 

 1,131 

 

2001

 

1996

 

410 4th Ct.

Vero Beach, FL

 

 - 

 

 2,930 

 

 40,070 

 

 14,729 

 

 2,930 

 

 54,799 

 

 7,741 

 

2007

 

2003

 

7955 16th Manor

Voorhees, NJ

 

 - 

 

 1,800 

 

 37,299 

 

 559 

 

 1,800 

 

 37,858 

 

 2,854 

 

2011

 

1965

 

2601 Evesham Road

Voorhees, NJ(2)

 

 - 

 

 1,900 

 

 26,040 

 

 893 

 

 1,900 

 

 26,934 

 

 2,014 

 

2011

 

1985

 

3001 Evesham Road

Voorhees, NJ

 

 - 

 

 3,100 

 

 25,950 

 

 - 

 

 3,100 

 

 25,950 

 

 693 

 

2011

 

2013

 

113 South Route 73

Voorhees, NJ

 

 - 

 

 3,700 

 

 24,312 

 

 - 

 

 3,700 

 

 24,312 

 

 268 

 

2012

 

2013

 

311 Route 73

Waconia, MN

 

 - 

 

 890 

 

 14,726 

 

 4,334 

 

 890 

 

 19,060 

 

 1,049 

 

2011

 

2005

 

500 Cherry Street

Wake Forest, NC

 

 - 

 

 200 

 

 3,003 

 

 1,742 

 

 200 

 

 4,745 

 

 1,752 

 

1998

 

1999

 

611 S. Brooks St.

Walkersville, MD

 

 - 

 

 1,650 

 

 15,103 

 

 - 

 

 1,650 

 

 15,103 

 

 678 

 

2012

 

1997

 

56 West Frederick Street

Wall, NJ

 

 - 

 

 1,650 

 

 25,350 

 

 1,907 

 

 1,690 

 

 27,217 

 

 1,500 

 

2011

 

2003

 

2021 Highway 35

Wallingford, CT

 

 - 

 

 490 

 

 1,210 

 

 59 

 

 490 

 

 1,269 

 

 163 

 

2011

 

1962

 

35 Marc Drive

Wareham, MA

 

 - 

 

 875 

 

 10,313 

 

 1,701 

 

 875 

 

 12,014 

 

 4,017 

 

2002

 

1989

 

50 Indian Neck Rd.

Warren, NJ

 

 - 

 

 2,000 

 

 30,810 

 

 209 

 

 2,000 

 

 31,019 

 

 1,879 

 

2011

 

1999

 

274 King George Rd

Warwick, RI

 

 - 

 

 1,530 

 

 18,564 

 

 170 

 

 1,530 

 

 18,734 

 

 1,453 

 

2011

 

1963

 

660 Commonwealth Avenue

Watchung, NJ

 

 - 

 

 1,920 

 

 24,880 

 

 501 

 

 1,960 

 

 25,341 

 

 1,465 

 

2011

 

2000

 

680 Mountain Boulevard

Waukee, IA

 

 - 

 

 1,870 

 

 31,878 

 

 1,075 

 

 1,870 

 

 32,953 

 

 1,113 

 

2012

 

2007

 

1650 SE Holiday Crest Circle

Waukesha, WI

 

 - 

 

 1,100 

 

 14,910 

 

 - 

 

 1,100 

 

 14,910 

 

 1,608 

 

2008

 

2009

 

400 Merrill Hills Rd.

Waxahachie, TX

 

 - 

 

 650 

 

 5,763 

 

 - 

 

 650 

 

 5,763 

 

 886 

 

2007

 

2008

 

1329 Brown St.

Weatherford, TX

 

 - 

 

 660 

 

 5,261 

 

 - 

 

 660 

 

 5,261 

 

 945 

 

2006

 

2007

 

1818 Martin Drive

Webster, TX

 

 9,344 

 

 360 

 

 5,940 

 

 - 

 

 360 

 

 5,940 

 

 2,004 

 

2002

 

2000

 

17231 Mill Forest

Webster, NY

 

 - 

 

 800 

 

 8,968 

 

 36 

 

 800 

 

 9,004 

 

 299 

 

2012

 

2001

 

100 Kidd Castle Way

Webster, NY

 

 - 

 

 1,300 

 

 21,127 

 

 9 

 

 1,300 

 

 21,136 

 

 675 

 

2012

 

2001

 

200 Kidd Castle Way

Webster Groves, MO

 

 - 

 

 1,790 

 

 15,425 

 

 - 

 

 1,790 

 

 15,425 

 

 547 

 

2011

 

2012

 

45 E Lockwood Avenue

West Bend, WI

 

 - 

 

 620 

 

 17,790 

 

 - 

 

 620 

 

 17,790 

 

 944 

 

2010

 

2011

 

2130 Continental Dr

West Chester, PA

 

 - 

 

 1,350 

 

 29,237 

 

 122 

 

 1,350 

 

 29,359 

 

 2,218 

 

2011

 

1974

 

800 West Miner Street

West Chester, PA

 

 - 

 

 3,290 

 

 42,258 

 

 595 

 

 3,290 

 

 42,852 

 

 1,982 

 

2012

 

2000

 

1615 East Boot Road

West Chester, PA

 

 - 

 

 600 

 

 11,894 

 

 5 

 

 600 

 

 11,899 

 

 565 

 

2012

 

2002

 

1615 East Boot Road

West Orange, NJ

 

 - 

 

 2,280 

 

 10,687 

 

 182 

 

 2,280 

 

 10,869 

 

 913 

 

2011

 

1963

 

20 Summit Street

West Worthington, OH

 

 - 

 

 510 

 

 5,090 

 

 - 

 

 510 

 

 5,090 

 

 1,180 

 

2006

 

1980

 

111 Lazelle Rd., E.

Westerville, OH

 

 - 

 

 740 

 

 8,287 

 

 3,105 

 

 740 

 

 11,392 

 

 6,967 

 

1998

 

2001

 

690 Cooper Rd.

Westfield, NJ(2)

 

 - 

 

 2,270 

 

 16,589 

 

 497 

 

 2,270 

 

 17,086 

 

 1,401 

 

2011

 

1970

 

1515 Lamberts Mill Road

Westford, MA

 

 - 

 

 920 

 

 13,829 

 

 206 

 

 920 

 

 14,034 

 

 1,096 

 

2011

 

1993

 

3 Park Drive

Westlake, OH

 

 - 

 

 1,330 

 

 17,926 

 

 - 

 

 1,330 

 

 17,926 

 

 6,076 

 

2001

 

1985

 

27601 Westchester Pkwy.

Westmoreland, TN

 

 - 

 

 330 

 

 1,822 

 

 2,640 

 

 330 

 

 4,462 

 

 1,629 

 

2001

 

1994

 

1559 New Hwy. 52

Weston Super Mare, England

 

 - 

 

 3,381 

 

 9,477 

 

 - 

 

 3,381 

 

 9,477 

 

 105 

 

2013

 

2011

 

141b Milton Road

White Lake, MI

 

 10,479 

 

 2,920 

 

 20,179 

 

 92 

 

 2,920 

 

 20,271 

 

 1,691 

 

2010

 

2000

 

935 Union Lake Rd

Whittier, CA

 

 11,228 

 

 4,470 

 

 22,151 

 

 301 

 

 4,483 

 

 22,439 

 

 4,848 

 

2010

 

1988

 

13250 E Philadelphia St

Wichita, KS

 

 - 

 

 1,400 

 

 11,000 

 

 - 

 

 1,400 

 

 11,000 

 

 2,622 

 

2006

 

1997

 

505 North Maize Road

Wichita, KS

 

 - 

 

 1,760 

 

 19,007 

 

 - 

 

 1,760 

 

 19,007 

 

 966 

 

2011

 

2012

 

10604 E 13th Street North

Wichita, KS

 

 13,759 

 

 630 

 

 19,747 

 

 - 

 

 630 

 

 19,747 

 

 769 

 

2012

 

2009

 

2050 North Webb Road

Wilkes-Barre, PA

 

 - 

 

 610 

 

 13,842 

 

 119 

 

 610 

 

 13,961 

 

 1,094 

 

2011

 

1986

 

440 North River Street

Wilkes-Barre, PA

 

 - 

 

 570 

 

 2,301 

 

 44 

 

 570 

 

 2,345 

 

 288 

 

2011

 

1992

 

300 Courtright Street

Willard, OH

 

 - 

 

 730 

 

 6,447 

 

 - 

 

 730 

 

 6,447 

 

 287 

 

2011

 

2012

 

1100 Neal Zick

Williamsport, PA

 

 - 

 

 300 

 

 4,946 

 

 373 

 

 300 

 

 5,319 

 

 419 

 

2011

 

1991

 

1251 Rural Avenue

Williamsport, PA

 

 - 

 

 620 

 

 8,487 

 

 438 

 

 620 

 

 8,925 

 

 737 

 

2011

 

1988

 

1201 Rural Avenue

Williamstown, KY

 

 - 

 

 70 

 

 6,430 

 

 - 

 

 70 

 

 6,430 

 

 1,614 

 

2005

 

1987

 

201 Kimberly Lane

Willow Grove, PA

 

 - 

 

 1,300 

 

 14,736 

 

 109 

 

 1,300 

 

 14,845 

 

 1,213 

 

2011

 

1905

 

1113 North Easton Road

Wilmington, DE

 

 - 

 

 800 

 

 9,494 

 

 57 

 

 800 

 

 9,551 

 

 775 

 

2011

 

1970

 

810 S Broom Street

Wilmington, NC

 

 - 

 

 210 

 

 2,991 

 

 - 

 

 210 

 

 2,991 

 

 1,207 

 

1999

 

1999

 

3501 Converse Dr.

Windsor, CT

 

 - 

 

 2,250 

 

 8,539 

 

 1,842 

 

 2,250 

 

 10,382 

 

 820 

 

2011

 

1969

 

One Emerson Drive

Windsor, CT

 

 - 

 

 1,800 

 

 600 

 

 944 

 

 1,800 

 

 1,544 

 

 173 

 

2011

 

1974

 

1 Emerson Drive

Winston-Salem, NC

 

 - 

 

 360 

 

 2,514 

 

 459 

 

 360 

 

 2,973 

 

 892 

 

2003

 

1996

 

2980 Reynolda Rd.

Winston-Salem, NC

 

 - 

 

 5,700 

 

 13,550 

 

 21,096 

 

 5,700 

 

 34,646 

 

 4,962 

 

2005

 

1997

 

2101 Homestead Hills

Winter Garden, FL

 

 - 

 

 1,350 

 

 7,937 

 

 - 

 

 1,350 

 

 7,937 

 

 198 

 

2012

 

2013

 

720 Roper Road

Witherwack, England

 

 - 

 

 1,268 

 

 9,290 

 

 - 

 

 1,268 

 

 9,290 

 

 103 

 

2013

 

2009

 

Whitchurch road

Wolverhampton, England

 

 - 

 

 2,113 

 

 8,972 

 

 - 

 

 2,113 

 

 8,972 

 

 101 

 

2013

 

2011

 

378 Prestonwood Road

Worcester, MA

 

 - 

 

 3,500 

 

 54,099 

 

 - 

 

 3,500 

 

 54,099 

 

 5,793 

 

2007

 

2009

 

101 Barry Road

Worcester, MA

 

 - 

 

 2,300 

 

 9,060 

 

 - 

 

 2,300 

 

 9,060 

 

 1,343 

 

2008

 

1993

 

378 Plantation St.

Wyncote, PA

 

 - 

 

 2,700 

 

 22,244 

 

 148 

 

 2,700 

 

 22,392 

 

 1,739 

 

2011

 

1960

 

1245 Church Road

Wyncote, PA

 

 - 

 

 1,610 

 

 21,256 

 

 214 

 

 1,610 

 

 21,470 

 

 1,590 

 

2011

 

1962

 

8100 Washington Lane

Wyncote, PA

 

 - 

 

 900 

 

 7,811 

 

 32 

 

 900 

 

 7,843 

 

 606 

 

2011

 

1889

 

240 Barker Road

Zionsville, IN

 

 - 

 

 1,610 

 

 22,400 

 

 1,691 

 

 1,610 

 

 24,091 

 

 2,007 

 

2010

 

2009

 

11755 N Michigan Rd

Seniors Housing Triple-Net Total

$

 587,136 

$

 781,397 

$

 8,430,604 

$

 428,753 

$

 782,390 

$

 8,858,364 

$

 1,075,955 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

117


 

  

Health Care REIT, Inc.

 

 

Schedule III

 

 

Real Estate and Accumulated Depreciation

 

 

December 31, 2013

 

 

(Dollars in thousands)

 

 

 

 

 

 

 

Initial Cost to Company

 

 

 

Gross Amount at Which Carried at Close of Period

 

 

 

 

 

 

Description

 

 

Encumbrances

 

Land

 

Building & Improvements

 

Cost Capitalized Subsequent to Acquisition

 

Land

 

Building & Improvements

 

Accumulated Depreciation(1)

 

Year Acquired

 

Year Built

 

Address

Seniors Housing Operating:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Acton, MA

$

 

 - 

$

 - 

$

 31,346 

$

 - 

$

 - 

$

 31,346 

$

 737 

 

2013

 

2000

 

10 Devon Drive

Agawam, MA

 

 

 6,675 

 

 883 

 

 10,047 

 

 207 

 

 883 

 

 10,259 

 

 1,430 

 

2011

 

1996

 

153 Cardinal Drive 

Albuquerque, NM

 

 

 5,525 

 

 1,270 

 

 20,837 

 

 862 

 

 1,272 

 

 21,697 

 

 3,145 

 

2010

 

1984

 

500 Paisano St NE

Alhambra, CA

 

 

 2,972 

 

 600 

 

 6,305 

 

 72 

 

 600 

 

 6,377 

 

 733 

 

2011

 

1923

 

1118 N. Stoneman Ave.

Altrincham, England

 

 

 - 

 

 5,685 

 

 29,221 

 

 - 

 

 5,685 

 

 29,221 

 

 2,556 

 

2012

 

2009

 

295 Hale Road

Arlington, TX

 

 

 22,210 

 

 1,660 

 

 37,395 

 

 175 

 

 1,660 

 

 37,570 

 

 2,768 

 

2012

 

2000

 

1250 West Pioneer Parkway

Arnprior, ON

 

 

 955 

 

 940 

 

 7,896 

 

 - 

 

 940 

 

 7,896 

 

 496 

 

2013

 

1991

 

15 Arthur Street

Avon, CT

 

 

 19,641 

 

 1,550 

 

 30,571 

 

 473 

 

 1,550 

 

 31,045 

 

 5,566 

 

2011

 

1998

 

101 Bickford Extension 

Azusa, CA

 

 

 - 

 

 570 

 

 3,141 

 

 6,222 

 

 570 

 

 9,363 

 

 1,807 

 

1998

 

1953

 

125 W. Sierra Madre Ave.

Bagshot, England

 

 

 - 

 

 6,537 

 

 38,668 

 

 2,255 

 

 6,663 

 

 40,798 

 

 3,204 

 

2012

 

2009

 

14 - 16 London Road

Banstead, England

 

 

 - 

 

 8,781 

 

 54,836 

 

 17,633 

 

 8,950 

 

 72,300 

 

 5,318 

 

2012

 

2005

 

Croydon Lane

Basking Ridge, NJ

 

 

 - 

 

 2,356 

 

 37,710 

 

 - 

 

 2,356 

 

 37,710 

 

 1,514 

 

2013

 

2002

 

404 King George Road

Bassett, England

 

 

 - 

 

 6,547 

 

 42,063 

 

 - 

 

 6,547 

 

 42,063 

 

 3,117 

 

2013

 

2006

 

111 Burgess Road

Baton Rouge, LA

 

 

 9,643 

 

 790 

 

 29,436 

 

 - 

 

 790 

 

 29,436 

 

 1,028 

 

2013

 

2009

 

9351 Siegen Lane

Beaconsfield, England

 

 

 - 

 

 7,473 

 

 68,201 

 

 - 

 

 7,473 

 

 68,201 

 

 4,788 

 

2013

 

2009

 

30-34 Station Road

Beaconsfield, QC

 

 

 - 

 

 3,009 

 

 20,695 

 

 - 

 

 3,009 

 

 20,695 

 

 2,501 

 

2013

 

2008

 

505 Elm Avenue

Bedford, NH

 

 

 - 

 

 - 

 

 - 

 

 33,000 

 

 2,520 

 

 30,480 

 

 - 

 

2011

 

2012

 

5 Corporate Drive

Bellevue, WA

 

 

 - 

 

 2,800 

 

 19,004 

 

 - 

 

 2,800 

 

 19,004 

 

 1,867 

 

2013

 

1998

 

15928 NE 8th Street

Belmont, CA

 

 

 - 

 

 3,000 

 

 23,526 

 

 482 

 

 3,000 

 

 24,007 

 

 3,293 

 

2011

 

1971

 

1301 Ralston Avenue

Belmont, CA

 

 

 - 

 

 - 

 

 35,300 

 

 - 

 

 - 

 

 35,300 

 

 1,433 

 

2013

 

2002

 

1010 Alameda de Las Pulgas

Bethesda, MD

 

 

 - 

 

 - 

 

 45,309 

 

 - 

 

 - 

 

 45,309 

 

 3,656 

 

2013

 

2009

 

8300 Burdett Road

Birmingham, England

 

 

 - 

 

 4 

 

 28,024 

 

 - 

 

 4 

 

 28,024 

 

 2,077 

 

2013

 

2006

 

5 Church Road, Edgbaston

Blainville, QC

 

 

 - 

 

 2,689 

 

 11,199 

 

 - 

 

 2,689 

 

 11,199 

 

 1,694 

 

2013

 

2008

 

50 des Chateaux Boulevard

Bloomfield Hills, MI

 

 

 - 

 

 2,000 

 

 35,662 

 

 - 

 

 2,000 

 

 35,662 

 

 1,253 

 

2013

 

2009

 

6790 Telegraph Road

Borehamwood, England

 

 

 - 

 

 7,074 

 

 41,060 

 

 13,518 

 

 7,210 

 

 54,442 

 

 3,755 

 

2012

 

2003

 

Edgwarebury Lane

Boulder, CO

 

 

 - 

 

 2,994 

 

 27,458 

 

 - 

 

 2,994 

 

 27,458 

 

 2,188 

 

2013

 

2003

 

3955 28th Street

Bournemouth, England

 

 

 - 

 

 7,425 

 

 57,277 

 

 - 

 

 7,425 

 

 57,277 

 

 4,080 

 

2013

 

2008

 

42 Belle Vue Road

Braintree, MA

 

 

 21,729 

 

 - 

 

 41,290 

 

 - 

 

 - 

 

 41,290 

 

 2,743 

 

2013

 

2007

 

618 Granite Street

Brighton, MA

 

 

 10,718 

 

 2,100 

 

 14,616 

 

 329 

 

 2,100 

 

 14,946 

 

 2,159 

 

2011

 

1995

 

50 Sutherland Road 

Brookfield, CT

 

 

 20,015 

 

 2,250 

 

 30,180 

 

 394 

 

 2,250 

 

 30,574 

 

 4,486 

 

2011

 

1999

 

246A Federal Road 

Broomfield, CO

 

 

 - 

 

 4,140 

 

 44,547 

 

 - 

 

 4,140 

 

 44,547 

 

 1,692 

 

2013

 

2009

 

400 Summit Blvd

Buffalo Grove, IL

 

 

 - 

 

 2,850 

 

 49,129 

 

 139 

 

 2,850 

 

 49,268 

 

 3,309 

 

2012

 

2003

 

500 McHenry Road

Burbank, CA

 

 

 - 

 

 4,940 

 

 43,466 

 

 172 

 

 4,940 

 

 43,638 

 

 3,339 

 

2012

 

2002

 

455 E. Angeleno Avenue

Burlington, ON

 

 

 8,384 

 

 1,692 

 

 24,560 

 

 - 

 

 1,692 

 

 24,560 

 

 1,445 

 

2013

 

1990

 

500 Appleby Line

Burlington, MA

 

 

 17,774 

 

 2,443 

 

 34,354 

 

 - 

 

 2,443 

 

 34,354 

 

 2,774 

 

2013

 

2005

 

24 Mall Road

Calabasas, CA

 

 

 - 

 

 - 

 

 6,438 

 

 - 

 

 - 

 

 6,438 

 

 720 

 

2013

 

1972

 

25100 Calabasas Road

Calgary, AB

 

 

 17,663 

 

 2,928 

 

 48,408 

 

 - 

 

 2,928 

 

 48,408 

 

 2,706 

 

2013

 

2003

 

20 Promenade Way SE

Calgary, AB

 

 

 14,163 

 

 3,581 

 

 50,498 

 

 - 

 

 3,581 

 

 50,498 

 

 2,752 

 

2013

 

1998

 

80 Edenwold Drive NW

Calgary, AB

 

 

 16,059 

 

 4,026 

 

 48,507 

 

 - 

 

 4,026 

 

 48,507 

 

 2,551 

 

2013

 

1998

 

150 Scotia Landing NW

Calgary, AB

 

 

 - 

 

 4,398 

 

 35,898 

 

 - 

 

 4,398 

 

 35,898 

 

 1,109 

 

2013

 

1989

 

9229 16th Street SW

Cardiff, England

 

 

 - 

 

 4,277 

 

 16,353 

 

 - 

 

 4,277 

 

 16,353 

 

 1,699 

 

2013

 

2007

 

127 Cyncoed Road

Cardiff by the Sea, CA

 

 

 41,115 

 

 5,880 

 

 64,711 

 

 211 

 

 5,880 

 

 64,923 

 

 7,116 

 

2011

 

2009

 

3535 Manchester Avenue

Carol Stream, IL

 

 

 - 

 

 1,730 

 

 55,048 

 

 545 

 

 1,730 

 

 55,593 

 

 3,502 

 

2012

 

2001

 

545 Belmont Lane

Cary, NC

 

 

 - 

 

 740 

 

 45,240 

 

 - 

 

 740 

 

 45,240 

 

 1,627 

 

2013

 

2009

 

1206 West Chatham Street

Centerville, MA

 

 

 - 

 

 1,300 

 

 27,357 

 

 322 

 

 1,300 

 

 27,679 

 

 3,140 

 

2011

 

1998

 

22 Richardson Road

Chesterfield, MO

 

 

 - 

 

 1,857 

 

 48,366 

 

 - 

 

 1,857 

 

 48,366 

 

 1,792 

 

2013

 

2001

 

1880 Clarkson Road

Chorleywood, England

 

 

 - 

 

 7,542 

 

 56,322 

 

 - 

 

 7,542 

 

 56,322 

 

 4,309 

 

2013

 

2007

 

High View, Rickmansworth Road

Chula Vista, CA

 

 

 - 

 

 2,072 

 

 22,163 

 

 - 

 

 2,072 

 

 22,163 

 

 1,666 

 

2013

 

2003

 

3302 Bonita Road

Cincinnati, OH

 

 

 - 

 

 2,060 

 

 109,388 

 

 2,744 

 

 2,060 

 

 112,132 

 

 9,867 

 

2007

 

2010

 

5445 Kenwood Road

Claremont, CA

 

 

 - 

 

 2,430 

 

 9,928 

 

 - 

 

 2,430 

 

 9,928 

 

 622 

 

2013

 

2001

 

2053 North Towne Avenue

Cohasset, MA

 

 

 - 

 

 2,485 

 

 26,147 

 

 - 

 

 2,485 

 

 26,147 

 

 2,076 

 

2013

 

1998

 

125 King Street (Rt 3A)

Colorado Springs, CO

 

 

 - 

 

 800 

 

 14,756 

 

 - 

 

 800 

 

 14,756 

 

 785 

 

2013

 

2001

 

2105 University Park Boulevard

Concord, NH

 

 

 13,780 

 

 720 

 

 21,164 

 

 227 

 

 720 

 

 21,391 

 

 2,318 

 

2011

 

2001

 

300 Pleasant Street 

Coquitlam, BC

 

 

 14,541 

 

 3,948 

 

 31,181 

 

 - 

 

 3,948 

 

 31,181 

 

 1,607 

 

2013

 

1990

 

1142 Dufferin Street

Costa Mesa, CA

 

 

 - 

 

 2,050 

 

 19,969 

 

 126 

 

 2,050 

 

 20,095 

 

 2,778 

 

2011

 

1965

 

350 West Bay St

Crystal Lake, IL

 

 

 - 

 

 875 

 

 12,461 

 

 - 

 

 875 

 

 12,461 

 

 756 

 

2013

 

2001

 

751 E Terra Cotta Avenue

Dallas, TX

 

 

 - 

 

 1,080 

 

 9,655 

 

 188 

 

 1,080 

 

 9,842 

 

 1,188 

 

2011

 

1997

 

3611 Dickason Avenue

Danvers, MA

 

 

 9,665 

 

 1,120 

 

 14,557 

 

 394 

 

 1,120 

 

 14,950 

 

 1,858 

 

2011

 

2000

 

1 Veronica Drive 

Davenport, IA

 

 

 - 

 

 1,403 

 

 35,893 

 

 2,202 

 

 1,426 

 

 38,072 

 

 4,388 

 

2006

 

2009

 

4500 Elmore Ave.

Decatur, GA

 

 

 - 

 

 1,932 

 

 27,523 

 

 - 

 

 1,932 

 

 27,523 

 

 2,354 

 

2013

 

1998

 

920 Clairemont Avenue

Denver, CO

 

 

 12,959 

 

 1,450 

 

 19,389 

 

 160 

 

 1,450 

 

 19,550 

 

 1,429 

 

2012

 

1997

 

4901 South Monaco Street

Denver, CO

 

 

 - 

 

 2,910 

 

 35,838 

 

 269 

 

 2,910 

 

 36,107 

 

 2,535 

 

2012

 

2007

 

8101 E Mississippi Avenue

Dix Hills, NY

 

 

 - 

 

 3,808 

 

 39,014 

 

 - 

 

 3,808 

 

 39,014 

 

 1,576 

 

2013

 

2003

 

337 Deer Park Road

Dollard-Des-Ormeaux, QC

 

 

 - 

 

 2,539 

 

 18,330 

 

 - 

 

 2,539 

 

 18,330 

 

 2,369 

 

2013

 

2008

 

4377 St. Jean Blvd

Dresher, PA

 

 

 7,476 

 

 1,900 

 

 10,664 

 

 - 

 

 1,900 

 

 10,664 

 

 713 

 

2013

 

2006

 

1650 Susquehanna Road

Dublin, OH

 

 

 18,541 

 

 1,680 

 

 43,423 

 

 2,152 

 

 1,694 

 

 45,561 

 

 6,395 

 

2010

 

1990

 

6470 Post Rd

East Haven, CT

 

 

 23,258 

 

 2,660 

 

 35,533 

 

 832 

 

 2,660 

 

 36,365 

 

 6,816 

 

2011

 

2000

 

111 South Shore Drive 

East Meadow, NY

 

 

 - 

 

 69 

 

 45,991 

 

 - 

 

 69 

 

 45,991 

 

 1,887 

 

2013

 

2002

 

1555 Glen Curtiss Boulevard

East Setauket, NY

 

 

 - 

 

 4,920 

 

 37,354 

 

 - 

 

 4,920 

 

 37,354 

 

 1,660 

 

2013

 

2002

 

1 Sunrise Drive

Eastbourne, England

 

 

 - 

 

 5,552 

 

 44,549 

 

 - 

 

 5,552 

 

 44,549 

 

 3,178 

 

2013

 

2008

 

6 Upper Kings Drive

Edgewater, NJ

 

 

 - 

 

 4,561 

 

 25,047 

 

 - 

 

 4,561 

 

 25,047 

 

 1,256 

 

2013

 

2000

 

351 River Road

Edison, NJ

 

 

 - 

 

 1,892 

 

 32,314 

 

 - 

 

 1,892 

 

 32,314 

 

 3,486 

 

2013

 

1996

 

1801 Oak Tree Road

Edmonton, AB

 

 

 13,083 

 

 1,936 

 

 36,132 

 

 - 

 

 1,936 

 

 36,132 

 

 1,980 

 

2013

 

1999

 

103 Rabbit Hill Court NW

Edmonton, AB

 

 

 16,774 

 

 2,660 

 

 46,017 

 

 - 

 

 2,660 

 

 46,017 

 

 2,380 

 

2013

 

1968

 

10015 103rd Avenue NW

Encinitas, CA

 

 

 - 

 

 1,460 

 

 7,721 

 

 468 

 

 1,460 

 

 8,189 

 

 3,173 

 

2000

 

1988

 

335 Saxony Rd.

Encino, CA

 

 

 - 

 

 5,040 

 

 46,255 

 

 225 

 

 5,040 

 

 46,479 

 

 3,633 

 

2012

 

2003

 

15451 Ventura Boulevard

Escondido, CA

 

 

 12,844 

 

 1,520 

 

 24,024 

 

 217 

 

 1,520 

 

 24,241 

 

 3,310 

 

2011

 

1987

 

1500 Borden Rd

Esher, England

 

 

 - 

 

 7,740 

 

 64,204 

 

 - 

 

 7,740 

 

 64,204 

 

 4,237 

 

2013

 

2006

 

42 Copsem Lane

Fairfax, VA

 

 

 - 

 

 19 

 

 2,678 

 

 - 

 

 19 

 

 2,678 

 

 409 

 

2013

 

1991

 

9207 Arlington Boulevard

Fairfield, NJ

 

 

 - 

 

 3,120 

 

 43,868 

 

 - 

 

 3,120 

 

 43,868 

 

 3,237 

 

2013

 

1998

 

47 Greenbrook Road

Flossmoor, IL

 

 

 - 

 

 1,292 

 

 9,496 

 

 - 

 

 1,292 

 

 9,496 

 

 758 

 

2013

 

2000

 

19715 Governors Highway

Fort Worth, TX

 

 

 - 

 

 2,080 

 

 27,888 

 

 335 

 

 2,080 

 

 28,223 

 

 2,352 

 

2012

 

2001

 

2151 Green Oaks Road

Franklin, MA

 

 

 14,390 

 

 2,430 

 

 30,597 

 

 - 

 

 2,430 

 

 30,597 

 

 833 

 

2013

 

1999

 

4 Forge Hill Road

Fullerton, CA

 

 

 13,214 

 

 1,964 

 

 19,989 

 

 - 

 

 1,964 

 

 19,989 

 

 1,727 

 

2013

 

2008

 

2226 North Euclid Street

Gahanna, OH

 

 

 - 

 

 772 

 

 11,214 

 

 - 

 

 772 

 

 11,214 

 

 605 

 

2013

 

1998

 

775 East Johnstown Road

Gilbert, AZ

 

 

 16,841 

 

 2,160 

 

 28,246 

 

 - 

 

 2,160 

 

 28,246 

 

 1,414 

 

2013

 

2008

 

580 S. Gilbert Road

Gilroy, CA

 

 

 - 

 

 760 

 

 13,880 

 

 24,013 

 

 1,520 

 

 37,133 

 

 6,005 

 

2006

 

2007

 

7610 Isabella Way

Glen Cove, NY

 

 

 - 

 

 4,594 

 

 35,236 

 

 - 

 

 4,594 

 

 35,236 

 

 3,159 

 

2013

 

1998

 

39 Forest Avenue

Glenview, IL

 

 

 - 

 

 2,090 

 

 69,288 

 

 218 

 

 2,090 

 

 69,505 

 

 4,611 

 

2012

 

2001

 

2200 Golf Road

Golden Valley, MN

 

 

 20,417 

 

 1,520 

 

 33,513 

 

 - 

 

 1,520 

 

 33,513 

 

 1,348 

 

2013

 

2005

 

4950 Olson Memorial Highway

Gross Pointe Woods, MI

 

 

 - 

 

 950 

 

 13,662 

 

 - 

 

 950 

 

 13,662 

 

 897 

 

2013

 

2006

 

1850 Vernier Road

Grosse Pointe Woods, MI

 

 

 - 

 

 1,430 

 

 31,777 

 

 - 

 

 1,430 

 

 31,777 

 

 2,168 

 

2013

 

2005

 

21260 Mack Avenue

Guildford, England

 

 

 - 

 

 7,195 

 

 75,166 

 

 - 

 

 7,195 

 

 75,166 

 

 5,009 

 

2013

 

2006

 

Astolat Way, Peasmarsh

Gurnee, IL

 

 

 - 

 

 890 

 

 27,931 

 

 - 

 

 890 

 

 27,931 

 

 1,065 

 

2013

 

2002

 

500 North Hunt Club Road

Hamden, CT

 

 

 15,651 

 

 1,460 

 

 24,093 

 

 503 

 

 1,460 

 

 24,596 

 

 3,693 

 

2011

 

1999

 

35 Hamden Hills Drive 

Hampshire, England

 

 

 - 

 

 5,604 

 

 34,119 

 

 - 

 

 5,604 

 

 34,119 

 

 2,529 

 

2013

 

2006

 

22-26 Church Road

Henderson, NV

 

 

 - 

 

 880 

 

 29,809 

 

 69 

 

 880 

 

 29,879 

 

 2,477 

 

2011

 

2009

 

1935 Paseo Verde Parkway

Henderson, NV

 

 

 5,873 

 

 1,190 

 

 11,600 

 

 - 

 

 1,190 

 

 11,600 

 

 1,223 

 

2013

 

2008

 

1555 West Horizon Ridge Parkway

Highland Park, IL

 

 

 20,893 

 

 2,250 

 

 25,313 

 

 - 

 

 2,250 

 

 25,313 

 

 2,191 

 

2013

 

2005

 

1601 Green Bay Road

Holbrook, NY

 

 

 - 

 

 3,957 

 

 35,337 

 

 - 

 

 3,957 

 

 35,337 

 

 1,560 

 

2013

 

2001

 

320 Patchogue Holbrook Road

Houston, TX

 

 

 - 

 

 3,830 

 

 55,674 

 

 380 

 

 3,830 

 

 56,054 

 

 7,041 

 

2012

 

1998

 

2929 West Holcombe Boulevard

Houston, TX

 

 

 18,224 

 

 1,040 

 

 31,965 

 

 571 

 

 1,040 

 

 32,536 

 

 2,884 

 

2012

 

1999

 

505 Bering Drive

Houston, TX

 

 

 7,942 

 

 960 

 

 27,598 

 

 430 

 

 960 

 

 28,028 

 

 3,365 

 

2011

 

1995

 

10225 Cypresswood Dr

Huntington Beach, CA

 

 

 - 

 

 3,808 

 

 31,172 

 

 - 

 

 3,808 

 

 31,172 

 

 3,003 

 

2013

 

2004

 

7401 Yorktown Avenue

Irving, TX

 

 

 - 

 

 1,030 

 

 6,823 

 

 696 

 

 1,030 

 

 7,519 

 

 1,194 

 

2007

 

1999

 

8855 West Valley Ranch Parkway

Johns Creek, GA

 

 

 - 

 

 1,580 

 

 23,285 

 

 - 

 

 1,580 

 

 23,285 

 

 1,072 

 

2013

 

2009

 

11405 Medlock Bridge Road

Kanata, ON

 

 

 - 

 

 2,132 

 

 39,336 

 

 - 

 

 2,132 

 

 39,336 

 

 3,487 

 

2012

 

2005

 

70 Stonehaven Drive

Kansas City, MO

 

 

 5,554 

 

 1,820 

 

 34,898 

 

 2,181 

 

 1,836 

 

 37,062 

 

 5,138 

 

2010

 

1980

 

12100 Wornall Road

Kansas City, MO

 

 

 6,790 

 

 1,930 

 

 39,997 

 

 1,335 

 

 1,954 

 

 41,308 

 

 6,576 

 

2010

 

1986

 

6500 North Cosby Ave

Kelowna, BC

 

 

 8,214 

 

 3,478 

 

 15,810 

 

 - 

 

 3,478 

 

 15,810 

 

 1,028 

 

2013

 

1999

 

863 Leon Avenue

Kennebunk, ME

 

 

 - 

 

 2,700 

 

 30,204 

 

 - 

 

 2,700 

 

 30,204 

 

 1,632 

 

2013

 

2006

 

One Huntington Common Drive

Kingwood, TX

 

 

 3,176 

 

 480 

 

 9,777 

 

 166 

 

 480 

 

 9,943 

 

 1,194 

 

2011

 

1999

 

22955 Eastex Freeway

Kirkland, WA

 

 

 24,600 

 

 3,450 

 

 38,709 

 

 267 

 

 3,450 

 

 38,975 

 

 3,883 

 

2011

 

2009

 

201 Kirkland Avenue

Kitchener, ON

 

 

 - 

 

 823 

 

 3,249 

 

 - 

 

 823 

 

 3,249 

 

 391 

 

2013

 

1979

 

164 - 168 Ferfus Avenue

Kitchener, ON

 

 

 - 

 

 1,382 

 

 15,380 

 

 - 

 

 1,382 

 

 15,380 

 

 946 

 

2013

 

1988

 

20 Fieldgate Street

Kitchener, ON

 

 

 - 

 

 1,415 

 

 10,478 

 

 - 

 

 1,415 

 

 10,478 

 

 895 

 

2013

 

1964

 

290 Queen Street South

La Palma, CA

 

 

 - 

 

 2,950 

 

 16,591 

 

 - 

 

 2,950 

 

 16,591 

 

 1,405 

 

2013

 

2003

 

5321 La Palma Avenue

Lafayette Hill, PA

 

 

 - 

 

 1,750 

 

 11,848 

 

 - 

 

 1,750 

 

 11,848 

 

 1,559 

 

2013

 

1998

 

429 Ridge Pike

Lawrenceville, GA

 

 

 16,444 

 

 1,500 

 

 29,003 

 

 - 

 

 1,500 

 

 29,003 

 

 2,130 

 

2013

 

2008

 

1375 Webb Gin House Road

Leawood, KS

 

 

 16,142 

 

 2,490 

 

 32,493 

 

 344 

 

 5,610 

 

 29,718 

 

 2,477 

 

2012

 

1999

 

4400 West 115th Street

Lenexa, KS

 

 

 10,085 

 

 826 

 

 26,251 

 

 - 

 

 826 

 

 26,251 

 

 1,029 

 

2013

 

2006

 

15055 West 87th Street Parkway

Lincroft, NJ

 

 

 - 

 

 9 

 

 19,958 

 

 - 

 

 9 

 

 19,958 

 

 948 

 

2013

 

2002

 

734 Newman Springs Road

Lombard, IL

 

 

 17,429 

 

 2,130 

 

 59,943 

 

 - 

 

 2,130 

 

 59,943 

 

 1,775 

 

2013

 

2009

 

2210 Fountain Square Dr

Los Angeles, CA

 

 

 - 

 

 - 

 

 11,430 

 

 707 

 

 - 

 

 12,137 

 

 1,376 

 

2008

 

1971

 

330 North Hayworth Avenue

Los Angeles, CA

 

 

 66,649 

 

 - 

 

 114,438 

 

 355 

 

 - 

 

 114,793 

 

 13,772 

 

2011

 

2009

 

10475 Wilshire Boulevard

Los Angeles, CA

 

 

 - 

 

 3,540 

 

 19,007 

 

 224 

 

 3,540 

 

 19,230 

 

 1,664 

 

2012

 

2001

 

2051 N. Highland Avenue

Louisville, KY

 

 

 - 

 

 2,420 

 

 20,816 

 

 217 

 

 2,420 

 

 21,033 

 

 1,738 

 

2012

 

1999

 

4600 Bowling Boulevard

Louisville, KY

 

 

 11,523 

 

 1,600 

 

 20,326 

 

 - 

 

 1,600 

 

 20,326 

 

 988 

 

2013

 

2010

 

6700 Overlook Drive

Lynnfield, MA

 

 

 17,453 

 

 3,165 

 

 45,200 

 

 - 

 

 3,165 

 

 45,200 

 

 3,324 

 

2013

 

2006

 

55 Salem Street

Malvern, PA

 

 

 - 

 

 1,651 

 

 17,194 

 

 - 

 

 1,651 

 

 17,194 

 

 1,799 

 

2013

 

1998

 

324 Lancaster Avenue

Mansfield, MA

 

 

 28,807 

 

 3,320 

 

 57,011 

 

 1,220 

 

 3,320 

 

 58,230 

 

 9,064 

 

2011

 

1998

 

25 Cobb Street 

Markham, ON

 

 

 22,788 

 

 4,762 

 

 61,686 

 

 - 

 

 4,762 

 

 61,686 

 

 3,081 

 

2013

 

1981

 

7700 Bayview Avenue

Marlboro, NJ

 

 

 - 

 

 2,222 

 

 14,888 

 

 - 

 

 2,222 

 

 14,888 

 

 882 

 

2013

 

2002

 

3A South Main Street

Memphis, TN

 

 

 - 

 

 1,800 

 

 17,744 

 

 227 

 

 1,800 

 

 17,971 

 

 2,713 

 

2012

 

1999

 

6605 Quail Hollow Road

Meriden, CT

 

 

 9,540 

 

 1,500 

 

 14,874 

 

 357 

 

 1,500 

 

 15,231 

 

 3,130 

 

2011

 

2001

 

511 Kensington Avenue 

Metairie, LA

 

 

 13,661 

 

 725 

 

 27,708 

 

 - 

 

 725 

 

 27,708 

 

 1,192 

 

2013

 

2009

 

3732 West Esplanade Ave. S

Middletown, CT

 

 

 15,713 

 

 1,430 

 

 24,242 

 

 295 

 

 1,430 

 

 24,537 

 

 3,905 

 

2011

 

1999

 

645 Saybrook Road

Middletown, RI

 

 

 16,711 

 

 2,480 

 

 24,628 

 

 565 

 

 2,480 

 

 25,193 

 

 3,834 

 

2011

 

1998

 

303 Valley Road 

Milford, CT

 

 

 11,722 

 

 3,210 

 

 17,364 

 

 618 

 

 3,210 

 

 17,982 

 

 2,956 

 

2011

 

1999

 

77 Plains Road 

Minnetonka, MN

 

 

 14,705 

 

 2,080 

 

 24,360 

 

 241 

 

 2,080 

 

 24,601 

 

 1,869 

 

2012

 

1999

 

500 Carlson Parkway

Minnetonka, MN

 

 

 16,799 

 

 920 

 

 29,344 

 

 - 

 

 920 

 

 29,344 

 

 1,092 

 

2013

 

2006

 

18605 Old Excelsior Blvd.

Mississauga, ON

 

 

 2,283 

 

 2,073 

 

 24,443 

 

 - 

 

 2,073 

 

 24,443 

 

 1,306 

 

2013

 

1984

 

1130 Bough Beeches Boulevard

Mississauga, ON

 

 

 - 

 

 1,121 

 

 5,308 

 

 - 

 

 1,121 

 

 5,308 

 

 490 

 

2013

 

1978

 

3051 Constitution Boulevard

Mobberley, England

 

 

 - 

 

 6,912 

 

 35,130 

 

 - 

 

 6,912 

 

 35,130 

 

 3,007 

 

2013

 

2007

 

Barclay Park, Hall Lane

Monterey, CA

 

 

 - 

 

 6,440 

 

 29,101 

 

 - 

 

 6,440 

 

 29,101 

 

 2,388 

 

2013

 

2009

 

1110 Cass St.

Montgomery Village, MD

 

 

 - 

 

 3,530 

 

 18,246 

 

 - 

 

 3,530 

 

 18,246 

 

 1,284 

 

2013

 

1993

 

19310 Club House Road

Moose Jaw, SK

 

 

 3,881 

 

 754 

 

 16,240 

 

 - 

 

 754 

 

 16,240 

 

 865 

 

2013

 

2001

 

425 4th Avenue NW

Mystic, CT

 

 

 11,722 

 

 1,400 

 

 18,274 

 

 429 

 

 1,400 

 

 18,702 

 

 2,521 

 

2011

 

2001

 

20 Academy Lane  Mystic

Naperville, IL

 

 

 - 

 

 1,540 

 

 28,204 

 

 - 

 

 1,540 

 

 28,204 

 

 1,205 

 

2013

 

2002

 

535 West Ogden Avenue

Nashville, TN

 

 

 - 

 

 3,900 

 

 35,788 

 

 266 

 

 3,900 

 

 36,054 

 

 4,922 

 

2012

 

1999

 

4206 Stammer Place

Newton, MA

 

 

 28,433 

 

 2,250 

 

 43,614 

 

 211 

 

 2,250 

 

 43,826 

 

 5,640 

 

2011

 

1996

 

2300 Washington Street

Newton, MA

 

 

 16,467 

 

 2,500 

 

 30,681 

 

 1,400 

 

 2,500 

 

 32,081 

 

 4,533 

 

2011

 

1996

 

280 Newtonville Avenue 

Newton, MA

 

 

 - 

 

 3,360 

 

 25,099 

 

 552 

 

 3,360 

 

 25,651 

 

 3,977 

 

2011

 

1994

 

430 Centre Street

Newtown Square, PA

 

 

 - 

 

 1,930 

 

 14,420 

 

 - 

 

 1,930 

 

 14,420 

 

 1,677 

 

2013

 

2004

 

333 S. Newtown Street Rd.

Niantic, CT

 

 

 - 

 

 1,320 

 

 25,986 

 

 368 

 

 1,320 

 

 26,354 

 

 3,042 

 

2011

 

2001

 

417 Main Street

North Andover, MA

 

 

 23,071 

 

 1,960 

 

 34,976 

 

 393 

 

 1,960 

 

 35,369 

 

 4,817 

 

2011

 

1995

 

700 Chickering Road 

North Chelmsford, MA

 

 

 12,159 

 

 880 

 

 18,478 

 

 465 

 

 880 

 

 18,944 

 

 2,166 

 

2011

 

1998

 

2 Technology Drive 

North Tustin, CA

 

 

 - 

 

 2,880 

 

 18,059 

 

 - 

 

 2,880 

 

 18,059 

 

 859 

 

2013

 

2000

 

12291 Newport Avenue

Oak Park, IL

 

 

 - 

 

 1,250 

 

 40,383 

 

 163 

 

 1,250 

 

 40,546 

 

 2,707 

 

2012

 

2004

 

1035 Madison Street

Oakland, CA

 

 

 - 

 

 3,877 

 

 47,508 

 

 - 

 

 3,877 

 

 47,508 

 

 3,862 

 

2013

 

1999

 

11889 Skyline Boulevard

Oakton, VA

 

 

 - 

 

 2,250 

 

 37,576 

 

 - 

 

 2,250 

 

 37,576 

 

 2,846 

 

2013

 

1997

 

2863 Hunter Mill Road

Oakville, ON

 

 

 2,195 

 

 1,622 

 

 8,357 

 

 - 

 

 1,622 

 

 8,357 

 

 727 

 

2013

 

1982

 

289 and 299 Randall Street

Oakville, ON

 

 

 14,289 

 

 2,750 

 

 37,613 

 

 - 

 

 2,750 

 

 37,613 

 

 1,988 

 

2013

 

1994

 

25 Lakeshore Road West

Oakville, ON

 

 

 7,424 

 

 1,656 

 

 17,217 

 

 - 

 

 1,656 

 

 17,217 

 

 1,007 

 

2013

 

1988

 

345 Church Street

Oceanside, CA

 

 

 12,951 

 

 2,160 

 

 18,352 

 

 466 

 

 2,160 

 

 18,818 

 

 2,841 

 

2011

 

2005

 

3500 Lake Boulevard

Oshawa, ON

 

 

 4,562 

 

 1,086 

 

 10,205 

 

 - 

 

 1,086 

 

 10,205 

 

 701 

 

2013

 

1991

 

649 King Street East

Ottawa, ON

 

 

 4,083 

 

 895 

 

 4,998 

 

 - 

 

 895 

 

 4,998 

 

 491 

 

2013

 

1995

 

1345 Ogilvie Road

Ottawa, ON

 

 

 - 

 

 818 

 

 2,165 

 

 - 

 

 818 

 

 2,165 

 

 369 

 

2013

 

1993

 

370 Kennedy Lane

Ottawa, ON

 

 

 14,990 

 

 3,654 

 

 34,247 

 

 - 

 

 3,654 

 

 34,247 

 

 2,068 

 

2013

 

1998

 

43 Aylmer Avenue

Ottawa, ON

 

 

 6,653 

 

 1,438 

 

 12,432 

 

 - 

 

 1,438 

 

 12,432 

 

 878 

 

2013

 

1998

 

1351 Hunt Club Road

Ottawa, ON

 

 

 4,935 

 

 959 

 

 9,029 

 

 - 

 

 959 

 

 9,029 

 

 722 

 

2013

 

1999

 

140 Darlington Private

Overland Park, KS

 

 

 3,592 

 

 1,540 

 

 16,269 

 

 151 

 

 1,670 

 

 16,290 

 

 1,332 

 

2012

 

1998

 

9201 Foster

Palo Alto, CA

 

 

 17,405 

 

 - 

 

 39,639 

 

 - 

 

 - 

 

 39,639 

 

 1,659 

 

2013

 

2007

 

2701 El Camino Real

Paramus, NJ

 

 

 - 

 

 2,840 

 

 35,728 

 

 - 

 

 2,840 

 

 35,728 

 

 2,526 

 

2013

 

1998

 

567 Paramus Road

Pembroke, ON

 

 

 - 

 

 2,437 

 

 12,966 

 

 - 

 

 2,437 

 

 12,966 

 

 1,107 

 

2012

 

1999

 

1111 Pembroke Street West

Pittsburgh, PA

 

 

 - 

 

 1,580 

 

 18,017 

 

 - 

 

 1,580 

 

 18,017 

 

 1,059 

 

2013

 

2009

 

900 Lincoln Club Dr.

Plainview, NY

 

 

 - 

 

 3,066 

 

 19,901 

 

 - 

 

 3,066 

 

 19,901 

 

 1,029 

 

2013

 

2001

 

1231 Old Country Road

Plano, TX

 

 

 4,228 

 

 840 

 

 8,538 

 

 485 

 

 840 

 

 9,023 

 

 1,299 

 

2011

 

1996

 

5521 Village Creek Dr

Plano, TX

 

 

 29,699 

 

 3,120 

 

 59,950 

 

 - 

 

 3,120 

 

 59,950 

 

 2,272 

 

2013

 

2006

 

4800 West Parker Road

Playa Vista, CA

 

 

 - 

 

 1,580 

 

 40,531 

 

 - 

 

 1,580 

 

 40,531 

 

 3,258 

 

2013

 

2006

 

5555 Playa Vista Drive

Providence, RI

 

 

 - 

 

 2,600 

 

 27,546 

 

 753 

 

 2,600 

 

 28,299 

 

 5,631 

 

2011

 

1998

 

700 Smith Street

Purley, England

 

 

 - 

 

 9,676 

 

 35,251 

 

 11,244 

 

 9,872 

 

 46,299 

 

 3,973 

 

2012

 

2005

 

21 Russell Hill Road

Quincy, MA

 

 

 - 

 

 1,350 

 

 12,584 

 

 387 

 

 1,350 

 

 12,971 

 

 1,878 

 

2011

 

1998

 

2003 Falls Boulevard

Rancho Cucamonga, CA

 

 

 - 

 

 1,480 

 

 10,055 

 

 - 

 

 1,480 

 

 10,055 

 

 650 

 

2013

 

2001

 

9519 Baseline Road

Rancho Palos Verdes, CA

 

 

 - 

 

 5,450 

 

 60,034 

 

 272 

 

 5,450 

 

 60,305 

 

 4,434 

 

2012

 

2004

 

5701 Crestridge Road

Randolph, NJ

 

 

 17,228 

 

 1,540 

 

 46,934 

 

 - 

 

 1,540 

 

 46,934 

 

 3,305 

 

2013

 

2006

 

648 Route 10 West

Redondo Beach, CA

 

 

 - 

 

 - 

 

 9,557 

 

 61 

 

 - 

 

 9,618 

 

 2,299 

 

2011

 

1957

 

514 North Prospect Ave

Regina, SK

 

 

 9,797 

 

 1,932 

 

 26,372 

 

 - 

 

 1,932 

 

 26,372 

 

 1,248 

 

2013

 

1999

 

3651 Albert Street

Regina, SK

 

 

 9,352 

 

 1,608 

 

 26,330 

 

 - 

 

 1,608 

 

 26,330 

 

 1,200 

 

2013

 

2004

 

3105 Hillsdale Street

Renton, WA

 

 

 22,270 

 

 3,080 

 

 51,824 

 

 132 

 

 3,080 

 

 51,957 

 

 5,194 

 

2011

 

2007

 

104 Burnett Avenue South

Rocky Hill, CT

 

 

 10,600 

 

 810 

 

 16,351 

 

 195 

 

 810 

 

 16,547 

 

 2,106 

 

2011

 

2000

 

1160 Elm Street

Romeoville, IL

 

 

 - 

 

 854 

 

 12,646 

 

 58,656 

 

 6,140 

 

 66,016 

 

 6,892 

 

2006

 

2010

 

605 S Edward Dr.

Roseville, MN

 

 

 - 

 

 1,540 

 

 35,877 

 

 - 

 

 1,540 

 

 35,877 

 

 1,444 

 

2013

 

2002

 

2555 Snelling Avenue, North

Roswell, GA

 

 

 - 

 

 2,080 

 

 6,486 

 

 139 

 

 2,380 

 

 6,325 

 

 645 

 

2012

 

1997

 

75 Magnolia Street

Sacramento, CA

 

 

 - 

 

 1,300 

 

 23,394 

 

 - 

 

 1,300 

 

 23,394 

 

 1,647 

 

2013

 

2004

 

345 Munroe Street

Salem, NH

 

 

 21,263 

 

 980 

 

 32,721 

 

 317 

 

 980 

 

 33,038 

 

 3,823 

 

2011

 

2000

 

242 Main Street

Salt Lake City, UT

 

 

 - 

 

 1,360 

 

 19,691 

 

 273 

 

 1,360 

 

 19,964 

 

 3,828 

 

2011

 

1986

 

1430 E. 4500 S.

San Diego, CA

 

 

 - 

 

 4,200 

 

 30,707 

 

 43 

 

 4,200 

 

 30,750 

 

 1,665 

 

2011

 

2011

 

2567 Second Avenue

San Diego, CA

 

 

 - 

 

 5,810 

 

 63,078 

 

 242 

 

 5,810 

 

 63,320 

 

 8,478 

 

2012

 

2001

 

13075 Evening Creek Drive S

San Diego, CA

 

 

 - 

 

 3,000 

 

 27,164 

 

 - 

 

 3,000 

 

 27,164 

 

 1,725 

 

2013

 

2003

 

810 Turquoise Street

San Gabriel, CA

 

 

 - 

 

 3,120 

 

 15,566 

 

 - 

 

 3,120 

 

 15,566 

 

 1,395 

 

2013

 

2005

 

8332 Huntington Drive

San Jose, CA

 

 

 - 

 

 2,850 

 

 35,098 

 

 78 

 

 2,850 

 

 35,176 

 

 3,469 

 

2011

 

2009

 

1420 Curvi Drive

San Jose, CA

 

 

 - 

 

 3,280 

 

 46,823 

 

 222 

 

 3,280 

 

 47,045 

 

 3,677 

 

2012

 

2002

 

500 S Winchester Boulevard

San Juan Capistrano, CA

 

 

 - 

 

 1,390 

 

 6,942 

 

 192 

 

 1,390 

 

 7,134 

 

 2,511 

 

2000

 

2001

 

30311 Camino Capistrano

Sandy Springs, GA

 

 

 - 

 

 2,214 

 

 8,360 

 

 160 

 

 2,220 

 

 8,513 

 

 1,235 

 

2012

 

1997

 

5455 Glenridge Drive NE

Santa Maria, CA

 

 

 - 

 

 6,050 

 

 50,658 

 

 350 

 

 6,050 

 

 51,008 

 

 7,107 

 

2011

 

2001

 

1220 Suey Road

Santa Monica, CA

 

 

 20,653 

 

 5,250 

 

 28,340 

 

 - 

 

 5,250 

 

 28,340 

 

 1,377 

 

2013

 

2004

 

1312 15th Street

Saskatoon, SK

 

 

 6,044 

 

 1,274 

 

 19,207 

 

 - 

 

 1,274 

 

 19,207 

 

 968 

 

2013

 

1999

 

220 24th Street East

Saskatoon, SK

 

 

 13,846 

 

 1,797 

 

 21,579 

 

 - 

 

 1,797 

 

 21,579 

 

 847 

 

2013

 

2004

 

1622 Acadia Drive

Schaumburg, IL

 

 

 - 

 

 2,460 

 

 22,863 

 

 - 

 

 2,460 

 

 22,863 

 

 1,143 

 

2013

 

2001

 

790 North Plum Grove Road

Scottsdale, AZ

 

 

 - 

 

 2,500 

 

 3,890 

 

 934 

 

 2,500 

 

 4,824 

 

 732 

 

2008

 

1998

 

9410 East Thunderbird Road

Seal Beach, CA

 

 

 - 

 

 6,204 

 

 72,954 

 

 - 

 

 6,204 

 

 72,954 

 

 5,771 

 

2013

 

2004

 

3850 Lampson Avenue

Seatlle, WA

 

 

 48,540 

 

 6,790 

 

 85,369 

 

 688 

 

 6,790 

 

 86,057 

 

 8,826 

 

2011

 

2009

 

5300 24th Avenue NE

Sevenoaks, England

 

 

 - 

 

 8,131 

 

 51,963 

 

 2,984 

 

 8,287 

 

 54,790 

 

 4,506 

 

2012

 

2009

 

64 - 70 Westerham Road

Shelburne, VT

 

 

 20,203 

 

 720 

 

 31,041 

 

 328 

 

 720 

 

 31,369 

 

 3,355 

 

2011

 

1988

 

687 Harbor Road

Shelby Township, MI

 

 

 17,059 

 

 1,040 

 

 26,344 

 

 - 

 

 1,040 

 

 26,344 

 

 1,167 

 

2013

 

2006

 

46471 Hayes Road

Sidcup, England

 

 

 - 

 

 9,773 

 

 56,163 

 

 17,547 

 

 9,961 

 

 73,522 

 

 5,429 

 

2012

 

2000

 

Frognal Avenue

Simi Valley, CA

 

 

 - 

 

 3,200 

 

 16,664 

 

 - 

 

 3,200 

 

 16,664 

 

 903 

 

2013

 

2009

 

190 Tierra Rejada Road

Solihull, England

 

 

 - 

 

 6,667 

 

 55,336 

 

 3,380 

 

 6,809 

 

 58,574 

 

 3,684 

 

2012

 

2009

 

1270 Warwick Road

Solihull, England

 

 

 - 

 

 4,767 

 

 34,466 

 

 - 

 

 4,767 

 

 34,466 

 

 2,784 

 

2013

 

2007

 

1 Worcester Way

Sonning, England

 

 

 - 

 

 7,552 

 

 56,227 

 

 - 

 

 7,552 

 

 56,227 

 

 4,168 

 

2013

 

2009

 

Old Bath Rd.

South Windsor, CT

 

 

 - 

 

 3,000 

 

 29,295 

 

 626 

 

 3,000 

 

 29,921 

 

 4,834 

 

2011

 

1999

 

432 Buckland Road

Spokane, WA

 

 

 - 

 

 3,200 

 

 25,064 

 

 - 

 

 3,200 

 

 25,064 

 

 1,572 

 

2013

 

2001

 

3117 E. Chaser Lane

Spokane, WA

 

 

 - 

 

 2,580 

 

 25,342 

 

 - 

 

 2,580 

 

 25,342 

 

 1,500 

 

2013

 

1999

 

1110 E. Westview Ct.

Stittsville, ON

 

 

 6,704 

 

 1,529 

 

 17,762 

 

 - 

 

 1,529 

 

 17,762 

 

 1,014 

 

2013

 

1996

 

1340 - 1354 Main Street

Stockport, England

 

 

 - 

 

 5,868 

 

 33,028 

 

 - 

 

 5,868 

 

 33,028 

 

 2,679 

 

2013

 

2008

 

1 Dairyground Road

Studio City, CA

 

 

 - 

 

 4,006 

 

 25,307 

 

 - 

 

 4,006 

 

 25,307 

 

 2,529 

 

2013

 

2004

 

4610 Coldwater Canyon Avenue

Sugar Land, TX

 

 

 5,623 

 

 960 

 

 31,423 

 

 1,079 

 

 960 

 

 32,501 

 

 4,351 

 

2011

 

1996

 

1221 Seventh St

Sun City West, AZ

 

 

 12,687 

 

 1,250 

 

 21,778 

 

 60 

 

 1,250 

 

 21,838 

 

 1,638 

 

2012

 

1998

 

13810 West Sandridge Drive

Sunnyvale, CA

 

 

 - 

 

 5,420 

 

 41,682 

 

 139 

 

 5,420 

 

 41,821 

 

 3,339 

 

2012

 

2002

 

1039 East El Camino Real

Surrey, BC

 

 

 9,952 

 

 4,686 

 

 29,265 

 

 - 

 

 4,686 

 

 29,265 

 

 1,725 

 

2013

 

2000

 

16028 83rd Avenue

Surrey, BC

 

 

 4,914 

 

 5,923 

 

 27,210 

 

 - 

 

 5,923 

 

 27,210 

 

 1,829 

 

2013

 

1987

 

15501 16th Avenue

Suwanee, GA

 

 

 - 

 

 1,560 

 

 11,538 

 

 169 

 

 1,560 

 

 11,707 

 

 1,408 

 

2012

 

2000

 

4315 Johns Creek Parkway

Swift Current, SK

 

 

 3,450 

 

 620 

 

 12,034 

 

 - 

 

 620 

 

 12,034 

 

 600 

 

2013

 

2001

 

301 Macoun Drive

Tacoma, WA

 

 

 18,960 

 

 2,400 

 

 35,053 

 

 92 

 

 2,400 

 

 35,145 

 

 3,523 

 

2011

 

2008

 

7290 Rosemount Circle

The Woodlands, TX

 

 

 2,551 

 

 480 

 

 12,379 

 

 124 

 

 480 

 

 12,503 

 

 1,525 

 

2011

 

1999

 

7950 Bay Branch Dr

Toledo, OH

 

 

 16,055 

 

 2,040 

 

 47,129 

 

 668 

 

 2,043 

 

 47,795 

 

 7,991 

 

2010

 

1985

 

3501 Executive Parkway

Toronto, ON

 

 

 2,190 

 

 1,340 

 

 7,087 

 

 - 

 

 1,340 

 

 7,087 

 

 474 

 

2013

 

1982

 

25 Centennial Park Road

Toronto, ON

 

 

 11,732 

 

 3,257 

 

 26,348 

 

 - 

 

 3,257 

 

 26,348 

 

 868 

 

2013

 

2002

 

305 Balliol Street

Toronto, ON

 

 

 25,307 

 

 4,033 

 

 39,031 

 

 - 

 

 4,033 

 

 39,031 

 

 1,961 

 

2013

 

1973

 

1055 and 1057 Don Mills Road

Toronto, ON

 

 

 1,764 

 

 1,767 

 

 2,730 

 

 - 

 

 1,767 

 

 2,730 

 

 589 

 

2013

 

1985

 

3705 Bathurst Street

Toronto, ON

 

 

 2,861 

 

 1,851 

 

 3,785 

 

 - 

 

 1,851 

 

 3,785 

 

 550 

 

2013

 

1987

 

1340 York Mills Road

Toronto, ON

 

 

 44,601 

 

 6,523 

 

 70,824 

 

 - 

 

 6,523 

 

 70,824 

 

 3,327 

 

2013

 

1988

 

8 The Donway East

Trumbull, CT

 

 

 25,066 

 

 2,850 

 

 37,685 

 

 590 

 

 2,850 

 

 38,275 

 

 5,936 

 

2011

 

1998

 

2750 Reservoir Avenue 

Tucson, AZ

 

 

 4,777 

 

 830 

 

 6,179 

 

 995 

 

 830 

 

 7,174 

 

 466 

 

2012

 

1997

 

5660 N. Kolb Road

Tulsa, OK

 

 

 6,251 

 

 1,330 

 

 21,285 

 

 542 

 

 1,330 

 

 21,827 

 

 3,270 

 

2010

 

1986

 

8887 South Lewis Ave

Tulsa, OK

 

 

 8,169 

 

 1,500 

 

 20,861 

 

 750 

 

 1,500 

 

 21,611 

 

 3,528 

 

2010

 

1984

 

9524 East 71st St

Tustin, CA

 

 

 6,924 

 

 840 

 

 15,299 

 

 73 

 

 840 

 

 15,372 

 

 1,684 

 

2011

 

1965

 

240 East 3rd St

Upper St Claire, PA

 

 

 - 

 

 1,102 

 

 13,455 

 

 - 

 

 1,102 

 

 13,455 

 

 1,575 

 

2013

 

2005

 

500 Village Drive

Vankleek Hill, ON

 

 

 1,681 

 

 472 

 

 5,097 

 

 - 

 

 472 

 

 5,097 

 

 380 

 

2013

 

1987

 

48 Wall Street

Victoria, BC

 

 

 - 

 

 3,478 

 

 18,180 

 

 - 

 

 3,478 

 

 18,180 

 

 1,667 

 

2012

 

2002

 

2638 Ross Lane

Victoria, BC

 

 

 10,420 

 

 3,713 

 

 22,972 

 

 - 

 

 3,713 

 

 22,972 

 

 1,709 

 

2013

 

1974

 

3000 Shelbourne Street

Victoria, BC

 

 

 9,607 

 

 4,754 

 

 19,351 

 

 - 

 

 4,754 

 

 19,351 

 

 1,132 

 

2013

 

1988

 

3051 Shelbourne Street

Virginia Water, England

 

 

 - 

 

 7,106 

 

 29,937 

 

 9,507 

 

 7,243 

 

 39,307 

 

 3,319 

 

2012

 

2002

 

Christ Church Road

Walnut Creek, CA

 

 

 - 

 

 3,700 

 

 12,467 

 

 - 

 

 3,700 

 

 12,467 

 

 1,598 

 

2013

 

1998

 

2175 Ygnacio Valley Road

Warwick, RI

 

 

 16,212 

 

 2,400 

 

 24,635 

 

 726 

 

 2,400 

 

 25,361 

 

 4,754 

 

2011

 

1998

 

75 Minnesota Avenue 

Washington, DC

 

 

 33,263 

 

 4,000 

 

 69,154 

 

 - 

 

 4,000 

 

 69,154 

 

 2,669 

 

2013

 

2004

 

5111 Connecticut Avenue NW

Waterbury, CT

 

 

 25,128 

 

 2,460 

 

 39,547 

 

 589 

 

 2,460 

 

 40,135 

 

 9,141 

 

2011

 

1998

 

180 Scott Road 

Wayland, MA

 

 

 - 

 

 1,207 

 

 27,462 

 

 - 

 

 1,207 

 

 27,462 

 

 2,226 

 

2013

 

1997

 

285 Commonwealth Road

West Babylon, NY

 

 

 - 

 

 3,960 

 

 47,085 

 

 - 

 

 3,960 

 

 47,085 

 

 1,740 

 

2013

 

2003

 

580 Montauk Highway

West Bloomfield, MI

 

 

 - 

 

 1,040 

 

 12,300 

 

 - 

 

 1,040 

 

 12,300 

 

 657 

 

2013

 

2000

 

7005 Pontiac Trail

West Hills, CA

 

 

 - 

 

 2,600 

 

 7,521 

 

 - 

 

 2,600 

 

 7,521 

 

 603 

 

2013

 

2002

 

9012 Topanga Canyon Road

West Vancouver, BC

 

 

 12,537 

 

 9,128 

 

 32,217 

 

 - 

 

 9,128 

 

 32,217 

 

 2,189 

 

2013

 

1987

 

2095 Marine Drive

Westbourne, England

 

 

 - 

 

 7,297 

 

 54,745 

 

 - 

 

 7,297 

 

 54,745 

 

 3,986 

 

2013

 

2006

 

16-18 Poole Road

Weston, MA

 

 

 - 

 

 1,160 

 

 6,200 

 

 - 

 

 1,160 

 

 6,200 

 

 350 

 

2013

 

1998

 

135 North Avenue

Weybridge, England

 

 

 - 

 

 10,574 

 

 63,972 

 

 - 

 

 10,574 

 

 63,972 

 

 4,802 

 

2013

 

2008

 

Ellesmere Road

White Oak, MD

 

 

 - 

 

 2,304 

 

 24,768 

 

 - 

 

 2,304 

 

 24,768 

 

 1,152 

 

2013

 

2002

 

11621 New Hampshire Avenue

Wilbraham, MA

 

 

 11,348 

 

 660 

 

 17,639 

 

 292 

 

 660 

 

 17,930 

 

 2,270 

 

2011

 

2000

 

2387 Boston Road 

Wilmington, DE

 

 

 - 

 

 1,040 

 

 23,338 

 

 - 

 

 1,040 

 

 23,338 

 

 1,966 

 

2013

 

2004

 

2215 Shipley Street

Winchester, England

 

 

 - 

 

 7,887 

 

 37,873 

 

 2,283 

 

 8,047 

 

 39,996 

 

 3,065 

 

2012

 

2010

 

Stockbridge Road

Winnipeg, MB

 

 

 18,550 

 

 2,519 

 

 49,216 

 

 - 

 

 2,519 

 

 49,216 

 

 2,517 

 

2013

 

1999

 

857 Wilkes Avenue

Winnipeg, MB

 

 

 10,834 

 

 1,653 

 

 27,401 

 

 - 

 

 1,653 

 

 27,401 

 

 1,440 

 

2013

 

1988

 

3161 Grant Avenue

Wolverhampton, England

 

 

 - 

 

 3,945 

 

 11,350 

 

 - 

 

 3,945 

 

 11,350 

 

 1,600 

 

2013

 

2008

 

73 Wergs Road

Woodbridge, CT

 

 

 - 

 

 1,370 

 

 14,219 

 

 563 

 

 1,370 

 

 14,782 

 

 3,221 

 

2011

 

1998

 

21 Bradley Road

Woodland Hills, CA

 

 

 - 

 

 3,400 

 

 20,478 

 

 - 

 

 3,400 

 

 20,478 

 

 2,195 

 

2013

 

2005

 

20461 Ventura Boulevard

Worcester, MA

 

 

 14,217 

 

 1,140 

 

 21,664 

 

 482 

 

 1,140 

 

 22,146 

 

 2,770 

 

2011

 

1999

 

340 May Street 

Yarmouth, ME

 

 

 17,708 

 

 450 

 

 27,711 

 

 336 

 

 450 

 

 28,046 

 

 3,245 

 

2011

 

1999

 

27 Forest Falls Drive

Yonkers, NY

 

 

 - 

 

 3,962 

 

 50,107 

 

 - 

 

 3,962 

 

 50,107 

 

 3,688 

 

2013

 

2005

 

65 Crisfield Street

Yorkton, SK

 

 

 4,682 

 

 599 

 

 11,233 

 

 - 

 

 599 

 

 11,233 

 

 681 

 

2013

 

2001

 

94 Russell Drive

Seniors Housing Operating Total

$

 

 1,714,714 

$

 738,098 

$

 8,145,281 

$

 249,360 

$

 751,712 

$

 8,381,027 

$

 715,534 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

128


 

  

Health Care REIT, Inc.

 

 

Schedule III

 

 

Real Estate and Accumulated Depreciation

 

 

December 31, 2013

 

 

(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

$

 

 - 

$

 300 

$

 20,200 

$

 - 

$

 300 

$

 20,200 

$

 2,113 

 

2009

 

2008

 

200 E. Market St.

Akron, OH

 

 

 - 

 

 821 

 

 12,079 

 

 - 

 

 821 

 

 12,079 

 

 603 

 

2012

 

2010

 

701 White Pond Drive

Allen, TX

 

 

 12,082 

 

 724 

 

 14,511 

 

 - 

 

 726 

 

 14,509 

 

 2,302 

 

2012

 

2006

 

1105 N Central Expressway

Alpharetta, GA

 

 

 - 

 

 1,700 

 

 162 

 

 - 

 

 1,862 

 

 - 

 

 - 

 

2011

 

0

 

940 North Point Parkway

Alpharetta, GA

 

 

 - 

 

 233 

 

 18,205 

 

 1,041 

 

 773 

 

 18,706 

 

 2,035 

 

2011

 

1993

 

3400-A Old Milton Parkway

Alpharetta, GA

 

 

 - 

 

 498 

 

 32,729 

 

 3,503 

 

 1,769 

 

 34,960 

 

 4,991 

 

2011

 

1999

 

3400-C Old Milton Parkway

Alpharetta, GA

 

 

 - 

 

 417 

 

 14,406 

 

 254 

 

 476 

 

 14,602 

 

 1,868 

 

2011

 

2003

 

11975 Morris Road

Alpharetta, GA

 

 

 - 

 

 628 

 

 16,063 

 

 947 

 

 548 

 

 17,090 

 

 2,255 

 

2011

 

2007

 

3300 Old Milton Parkway

Arcadia, CA

 

 

 - 

 

 5,408 

 

 23,219 

 

 2,312 

 

 5,618 

 

 25,321 

 

 6,039 

 

2006

 

1984

 

301 W. Huntington Drive

Atlanta, GA

 

 

 - 

 

 4,931 

 

 18,720 

 

 3,297 

 

 5,301 

 

 21,647 

 

 6,364 

 

2006

 

1991

 

755 Mt. Vernon Hwy.

Atlanta, GA

 

 

 17,637 

 

 1,945 

 

 23,437 

 

 681 

 

 1,947 

 

 24,115 

 

 1,821 

 

2012

 

1984

 

975 Johnson Ferry Road

Atlanta, GA

 

 

 26,426 

 

 - 

 

 42,468 

 

 528 

 

 - 

 

 42,996 

 

 4,645 

 

2012

 

2006

 

5670 Peachtree-Dunwoody Road

Bartlett, TN

 

 

 8,060 

 

 187 

 

 15,015 

 

 1,408 

 

 187 

 

 16,423 

 

 4,061 

 

2007

 

2004

 

2996 Kate Bond Rd.

Bellaire, TX

 

 

 - 

 

 4,551 

 

 46,105 

 

 - 

 

 4,551 

 

 46,105 

 

 9,190 

 

2006

 

2005

 

5410 W. Loop S.

Bellaire, TX

 

 

 - 

 

 2,972 

 

 33,445 

 

 2,026 

 

 2,972 

 

 35,471 

 

 8,097 

 

2006

 

2005

 

5420 W. Loop S.

Bellevue, NE

 

 

 - 

 

 4,500 

 

 109,719 

 

 - 

 

 4,500 

 

 109,719 

 

 9,849 

 

2008

 

2010

 

2500 Bellevue Medical Center Dr

Bellevue, NE

 

 

 - 

 

 - 

 

 15,833 

 

 868 

 

 - 

 

 16,701 

 

 2,155 

 

2010

 

2010

 

2510 Bellevue Medical Center Drive

Bellingham, MA

 

 

 - 

 

 9,270 

 

 - 

 

 - 

 

 9,270 

 

 - 

 

 - 

 

2007

 

0

 

Maple Street and High Street

Birmingham, AL

 

 

 - 

 

 52 

 

 9,950 

 

 230 

 

 52 

 

 10,181 

 

 2,507 

 

2006

 

1971

 

801 Princeton Avenue SW

Birmingham, AL

 

 

 - 

 

 124 

 

 12,238 

 

 112 

 

 124 

 

 12,350 

 

 2,961 

 

2006

 

1985

 

817 Princeton Avenue SW

Birmingham, AL

 

 

 - 

 

 476 

 

 18,994 

 

 717 

 

 476 

 

 19,712 

 

 4,454 

 

2006

 

1989

 

833 Princeton Avenue SW

Boardman, OH

 

 

 - 

 

 1,200 

 

 12,800 

 

 - 

 

 1,200 

 

 12,800 

 

 2,154 

 

2008

 

2008

 

8049 South Ave.

Boardman, OH

 

 

 - 

 

 80 

 

 11,787 

 

 368 

 

 80 

 

 12,155 

 

 1,850 

 

2010

 

2007

 

8423 Market St

Boca Raton, FL

 

 

 - 

 

 109 

 

 34,002 

 

 2,249 

 

 214 

 

 36,146 

 

 8,723 

 

2006

 

1995

 

9970 S. Central Park Blvd.

Boca Raton, FL

 

 

 - 

 

 31 

 

 11,659 

 

 510 

 

 31 

 

 12,168 

 

 737 

 

2012

 

1993

 

9960 S. Central Park Boulevard

Boerne, TX

 

 

 - 

 

 50 

 

 13,317 

 

 1 

 

 50 

 

 13,318 

 

 1,658 

 

2011

 

2007

 

134 Menger Springs Road

Bowling Green, KY

 

 

 - 

 

 3,800 

 

 26,700 

 

 149 

 

 3,800 

 

 26,849 

 

 3,738 

 

2008

 

1992

 

1300 Campbell Lane

Boynton Beach, FL

 

 

 - 

 

 2,048 

 

 7,692 

 

 423 

 

 2,048 

 

 8,115 

 

 2,436 

 

2006

 

1995

 

8188 Jog Rd.

Boynton Beach, FL

 

 

 - 

 

 2,048 

 

 7,403 

 

 1,058 

 

 2,048 

 

 8,461 

 

 2,208 

 

2006

 

1997

 

8200 Jog Road

Boynton Beach, FL

 

 

 5,789 

 

 214 

 

 5,611 

 

 7,390 

 

 117 

 

 13,098 

 

 3,063 

 

2007

 

1996

 

10075 Jog Rd.

Boynton Beach, FL

 

 

 26,276 

 

 13,303 

 

 39,981 

 

 - 

 

 13,303 

 

 39,981 

 

 640 

 

2013

 

1995

 

10301 Hagen Ranch Road

Bridgeton, MO

 

 

 - 

 

 - 

 

 30,221 

 

 278 

 

 - 

 

 30,499 

 

 1,525 

 

2011

 

2011

 

12380 DePaul Drive

Bridgeton, MO

 

 

 11,025 

 

 450 

 

 21,221 

 

 21 

 

 450 

 

 21,242 

 

 3,171 

 

2010

 

2006

 

12266 DePaul Dr

Burleson, TX

 

 

 - 

 

 10 

 

 11,619 

 

 251 

 

 10 

 

 11,869 

 

 1,366 

 

2011

 

2007

 

12001 South Freeway

Carmel, IN

 

 

 - 

 

 2,280 

 

 18,820 

 

 338 

 

 2,280 

 

 19,158 

 

 3,049 

 

2011

 

2005

 

12188-A North Meridian Street

Carmel, IN

 

 

 - 

 

 2,152 

 

 18,591 

 

 2,837 

 

 2,026 

 

 21,554 

 

 4,826 

 

2011

 

2007

 

12188-B North Meridian Street

Cedar Grove, WI

 

 

 - 

 

 113 

 

 618 

 

 - 

 

 113 

 

 618 

 

 87 

 

2010

 

1986

 

313 S. Main St.

Cincinnati, OH

 

 

 - 

 

 - 

 

 16,317 

 

 - 

 

 - 

 

 16,317 

 

 61 

 

2012

 

2013

 

3301 Mercy West Boulevard

Claremore, OK

 

 

 8,006 

 

 132 

 

 12,829 

 

 302 

 

 132 

 

 13,131 

 

 3,400 

 

2007

 

2005

 

1501 N. Florence Ave.

Clarkson Valley, MO

 

 

 - 

 

 - 

 

 35,592 

 

 - 

 

 - 

 

 35,592 

 

 5,278 

 

2009

 

2010

 

15945 Clayton Rd

Columbia, MD

 

 

 - 

 

 2,258 

 

 18,861 

 

 483 

 

 2,291 

 

 19,311 

 

 982 

 

2012

 

2002

 

10700 Charter Drive

Columbus, OH

 

 

 - 

 

 415 

 

 6,764 

 

 279 

 

 415 

 

 7,043 

 

 698 

 

2012

 

1994

 

750 Mt. Carmel Mall

Coral Springs, FL

 

 

 - 

 

 1,598 

 

 10,627 

 

 1,255 

 

 1,636 

 

 11,844 

 

 3,633 

 

2006

 

1992

 

1725 N. University Dr.

Dade City, FL

 

 

 - 

 

 1,211 

 

 5,511 

 

 - 

 

 1,211 

 

 5,511 

 

 481 

 

2011

 

1998

 

13413 US Hwy 301

Dallas, TX

 

 

 14,595 

 

 137 

 

 28,690 

 

 1,761 

 

 137 

 

 30,451 

 

 7,508 

 

2006

 

1995

 

9330 Poppy Dr.

Dallas, TX

 

 

 28,450 

 

 462 

 

 53,963 

 

 157 

 

 462 

 

 54,120 

 

 3,951 

 

2012

 

2004

 

7115 Greenville Avenue

Dayton, OH

 

 

 - 

 

 730 

 

 6,515 

 

 362 

 

 730 

 

 6,878 

 

 934 

 

2011

 

1988

 

1530 Needmore Road

Deerfield Beach, FL

 

 

 - 

 

 2,408 

 

 7,482 

 

 328 

 

 2,408 

 

 7,809 

 

 1,331 

 

2011

 

2001

 

1192 East Newport Center Drive

Delray Beach, FL

 

 

 - 

 

 1,882 

 

 34,767 

 

 5,347 

 

 2,064 

 

 39,932 

 

 11,089 

 

2006

 

1985

 

5130-5150 Linton Blvd.

Denton, TX

 

 

 11,810 

 

 - 

 

 19,407 

 

 631 

 

 - 

 

 20,038 

 

 4,248 

 

2007

 

2005

 

2900 North I-35

Durham, NC

 

 

 - 

 

 1,212 

 

 22,858 

 

 - 

 

 1,212 

 

 22,858 

 

 - 

 

2013

 

2012

 

1823 Hillandale Road

Edina, MN

 

 

 - 

 

 310 

 

 15,132 

 

 - 

 

 310 

 

 15,132 

 

 1,964 

 

2010

 

2003

 

8100 W 78th St

El Paso, TX

 

 

 9,787 

 

 677 

 

 17,075 

 

 1,782 

 

 677 

 

 18,857 

 

 5,198 

 

2006

 

1997

 

2400 Trawood Dr.

Everett, WA

 

 

 - 

 

 4,842 

 

 26,010 

 

 - 

 

 4,842 

 

 26,010 

 

 2,818 

 

2010

 

2011

 

13020 Meridian Ave. S.

Fayetteville, GA

 

 

 - 

 

 959 

 

 7,540 

 

 767 

 

 986 

 

 8,280 

 

 2,181 

 

2006

 

1999

 

1275 Hwy. 54 W.

Fenton, MO

 

 

 12,166 

 

 - 

 

 27,055 

 

 - 

 

 - 

 

 27,055 

 

 - 

 

2013

 

2009

 

1011 Bowles Avenue

Fenton, MO

 

 

 5,911 

 

 - 

 

 13,432 

 

 - 

 

 - 

 

 13,432 

 

 - 

 

2013

 

2009

 

1055 Bowles Avenue

Folsom, CA

 

 

 - 

 

 - 

 

 33,600 

 

 - 

 

 - 

 

 33,600 

 

 281 

 

2013

 

2009

 

330 Montrose Drive

Fort Wayne, IN

 

 

 - 

 

 170 

 

 8,232 

 

 - 

 

 170 

 

 8,232 

 

 1,445 

 

2006

 

2006

 

2626 Fairfield Ave.

Fort Wayne, IN

 

 

 16,606 

 

 1,105 

 

 22,836 

 

 - 

 

 1,105 

 

 22,836 

 

 1,281 

 

2012

 

2004

 

7916 Jefferson Boulevard

Fort Worth, TX

 

 

 - 

 

 450 

 

 13,615 

 

 - 

 

 450 

 

 13,615 

 

 1,220 

 

2010

 

2011

 

425 Alabama Ave.

Franklin, WI

 

 

 5,175 

 

 6,872 

 

 7,550 

 

 - 

 

 6,872 

 

 7,550 

 

 1,109 

 

2010

 

1984

 

9200 W. Loomis Rd.

Franklin, TN

 

 

 - 

 

 2,338 

 

 12,138 

 

 1,955 

 

 2,338 

 

 14,093 

 

 3,281 

 

2007

 

1988

 

100 Covey Drive

Fresno, CA

 

 

 - 

 

 2,500 

 

 35,800 

 

 118 

 

 2,500 

 

 35,918 

 

 5,007 

 

2008

 

1991

 

7173 North Sharon Avenue

Frisco, TX

 

 

 - 

 

 130 

 

 16,445 

 

 - 

 

 130 

 

 16,445 

 

 743 

 

2012

 

2010

 

2990 Legacy Drive

Frisco, TX

 

 

 8,677 

 

 - 

 

 18,635 

 

 498 

 

 - 

 

 19,133 

 

 4,576 

 

2007

 

2004

 

4401 Coit Road

Frisco, TX

 

 

 - 

 

 - 

 

 15,309 

 

 1,717 

 

 - 

 

 17,026 

 

 4,454 

 

2007

 

2004

 

4461 Coit Road

Gallatin, TN

 

 

 - 

 

 20 

 

 19,432 

 

 891 

 

 20 

 

 20,323 

 

 3,777 

 

2010

 

1997

 

300 Steam Plant Rd

Germantown, TN

 

 

 - 

 

 3,049 

 

 12,456 

 

 737 

 

 3,049 

 

 13,193 

 

 3,182 

 

2006

 

2002

 

1325 Wolf Park Drive

Glendale, CA

 

 

 7,769 

 

 37 

 

 18,398 

 

 661 

 

 37 

 

 19,059 

 

 4,228 

 

2007

 

2002

 

222 W. Eulalia St.

Grand Prairie, TX

 

 

 - 

 

 981 

 

 6,086 

 

 - 

 

 981 

 

 6,086 

 

 581 

 

2012

 

2009

 

2740 N State Hwy 360

Green Bay, WI

 

 

 8,349 

 

 - 

 

 14,891 

 

 - 

 

 - 

 

 14,891 

 

 1,932 

 

2010

 

2002

 

2253 W. Mason St.

Green Bay, WI

 

 

 - 

 

 - 

 

 20,098 

 

 - 

 

 - 

 

 20,098 

 

 2,558 

 

2010

 

2002

 

2845 Greenbrier Road

Green Bay, WI

 

 

 - 

 

 - 

 

 11,696 

 

 - 

 

 - 

 

 11,696 

 

 2,068 

 

2010

 

2002

 

2845 Greenbrier Road

Greeneville, TN

 

 

 - 

 

 970 

 

 10,032 

 

 32 

 

 970 

 

 10,064 

 

 1,436 

 

2010

 

2005

 

438 East Vann Rd

Greenfield, WI

 

 

 - 

 

 - 

 

 15,204 

 

 - 

 

 - 

 

 15,204 

 

 96 

 

2013

 

1983

 

5017 South 110th Street

Greenwood, IN

 

 

 - 

 

 8,316 

 

 26,384 

 

 - 

 

 8,316 

 

 26,384 

 

 1,590 

 

2012

 

2010

 

1260 Innovation Parkway

Harker Heights, TX

 

 

 - 

 

 1,907 

 

 3,575 

 

 - 

 

 1,907 

 

 3,575 

 

 119 

 

2011

 

2012

 

E Central Texas Expressway

High Point, NC

 

 

 - 

 

 2,595 

 

 29,013 

 

 64 

 

 2,604 

 

 29,068 

 

 1,302 

 

2012

 

2010

 

4515 Premier Drive

Highland, IL

 

 

 - 

 

 - 

 

 8,612 

 

 - 

 

 - 

 

 8,612 

 

 98 

 

2012

 

2013

 

12860 Troxler Avenue

Houston, TX

 

 

 - 

 

 10,395 

 

 - 

 

 8 

 

 10,403 

 

 - 

 

 1 

 

2011

 

0

 

15655 Cypress Woods Medical Drive

Houston, TX

 

 

 - 

 

 3,688 

 

 13,302 

 

 11 

 

 3,688 

 

 13,313 

 

 791 

 

2012

 

2007

 

10701 Vintage Preserve Parkway

Houston, TX

 

 

 - 

 

 12,815 

 

 44,717 

 

 473 

 

 12,815 

 

 45,191 

 

 2,478 

 

2012

 

1998

 

2727 W Holcombe Boulevard

Houston, TX

 

 

 14,000 

 

 378 

 

 31,018 

 

 - 

 

 378 

 

 31,018 

 

 2,694 

 

2012

 

1981

 

18100 St John Drive

Houston, TX

 

 

 - 

 

 91 

 

 11,136 

 

 39 

 

 91 

 

 11,175 

 

 1,217 

 

2012

 

1986

 

2060 Space Park Drive

Houston, TX

 

 

 - 

 

 5,837 

 

 32,986 

 

 101 

 

 5,837 

 

 33,087 

 

 2,975 

 

2012

 

2005

 

15655 Cypress Woods Medical Drive

Hudson, OH

 

 

 - 

 

 2,473 

 

 13,622 

 

 208 

 

 2,473 

 

 13,830 

 

 837 

 

2012

 

2006

 

5655 Hudson Drive

Jackson, MI

 

 

 8,197 

 

 - 

 

 17,617 

 

 - 

 

 - 

 

 17,617 

 

 - 

 

2013

 

2009

 

1201 E Michigan Avenue

Jupiter, FL

 

 

 6,817 

 

 2,252 

 

 11,415 

 

 396 

 

 2,252 

 

 11,811 

 

 3,010 

 

2006

 

2001

 

550 Heritage Dr.

Jupiter, FL

 

 

 4,237 

 

 2,825 

 

 5,858 

 

 87 

 

 2,825 

 

 5,945 

 

 1,768 

 

2007

 

2004

 

600 Heritage Dr.

Katy, TX

 

 

 - 

 

 1,099 

 

 1,604 

 

 - 

 

 1,099 

 

 1,604 

 

 171 

 

2012

 

1986

 

21660 Kingsland Blvd

Kenosha, WI

 

 

 9,222 

 

 - 

 

 18,058 

 

 - 

 

 - 

 

 18,058 

 

 2,293 

 

2010

 

1993

 

10400 75th St.

Killeen, TX

 

 

 - 

 

 760 

 

 22,667 

 

 206 

 

 760 

 

 22,874 

 

 2,967 

 

2010

 

2010

 

2405 Clear Creek Rd

Lafayette, LA

 

 

 - 

 

 1,928 

 

 10,483 

 

 25 

 

 1,928 

 

 10,509 

 

 2,842 

 

2006

 

1993

 

204 Energy Parkway

Lake St Louis, MO

 

 

 - 

 

 240 

 

 11,937 

 

 1,978 

 

 240 

 

 13,915 

 

 2,031 

 

2010

 

2008

 

400 Medical Dr

Lakeway, TX

 

 

 - 

 

 5,142 

 

 18,574 

 

 - 

 

 5,142 

 

 18,574 

 

 163 

 

2007

 

2011

 

2000 Medical Dr

Lakeway, TX

 

 

 - 

 

 2,801 

 

 - 

 

 - 

 

 2,801 

 

 - 

 

 - 

 

2007

 

0

 

Lohmans Crossing Road

Lakewood, CA

 

 

 - 

 

 146 

 

 14,885 

 

 1,307 

 

 146 

 

 16,192 

 

 3,637 

 

2006

 

1993

 

5750 Downey Ave.

Lakewood, WA

 

 

 7,431 

 

 72 

 

 15,932 

 

 - 

 

 72 

 

 15,932 

 

 622 

 

2012

 

2005

 

11307 Bridgeport Way SW

Las Vegas, NV

 

 

 - 

 

 6,127 

 

 - 

 

 - 

 

 6,127 

 

 - 

 

 - 

 

2007

 

0

 

SW corner of Deer Springs Way and Riley Street

Las Vegas, NV

 

 

 - 

 

 580 

 

 23,420 

 

 - 

 

 580 

 

 23,420 

 

 1,462 

 

2011

 

2002

 

2500 North Tenaya Way

Las Vegas, NV

 

 

 - 

 

 2,319 

 

 4,612 

 

 1,010 

 

 2,319 

 

 5,622 

 

 1,455 

 

2006

 

1991

 

2870 S. Maryland Pkwy.

Las Vegas, NV

 

 

 2,889 

 

 433 

 

 6,921 

 

 212 

 

 433 

 

 7,133 

 

 1,867 

 

2007

 

1997

 

1776 E. Warm Springs Rd.

Las Vegas , NV

 

 

 5,665 

 

 74 

 

 15,287 

 

 700 

 

 74 

 

 15,987 

 

 4,053 

 

2006

 

2000

 

1815 E. Lake Mead Blvd.

Lenexa, KS

 

 

 - 

 

 540 

 

 16,013 

 

 2,377 

 

 540 

 

 18,390 

 

 2,285 

 

2010

 

2008

 

23401 Prairie Star Pkwy

Lincoln, NE

 

 

 - 

 

 1,420 

 

 29,692 

 

 9 

 

 1,420 

 

 29,701 

 

 5,173 

 

2010

 

2003

 

575 South 70th St

Los Alamitos, CA

 

 

 7,891 

 

 39 

 

 18,635 

 

 816 

 

 39 

 

 19,451 

 

 4,514 

 

2007

 

2003

 

3771 Katella Ave.

Los Gatos, CA

 

 

 - 

 

 488 

 

 22,386 

 

 1,361 

 

 488 

 

 23,747 

 

 6,456 

 

2006

 

1993

 

555 Knowles Dr.

Loxahatchee, FL

 

 

 - 

 

 1,637 

 

 5,048 

 

 842 

 

 1,652 

 

 5,875 

 

 1,511 

 

2006

 

1997

 

12977 Southern Blvd.

Loxahatchee, FL

 

 

 - 

 

 1,340 

 

 6,509 

 

 227 

 

 1,345 

 

 6,731 

 

 1,738 

 

2006

 

1993

 

12989 Southern Blvd.

Loxahatchee, FL

 

 

 - 

 

 1,553 

 

 4,694 

 

 596 

 

 1,567 

 

 5,275 

 

 1,344 

 

2006

 

1994

 

12983 Southern Blvd.

Marinette, WI

 

 

 7,079 

 

 - 

 

 13,538 

 

 - 

 

 - 

 

 13,538 

 

 2,068 

 

2010

 

2002

 

4061 Old Peshtigo Rd.

Marlton, NJ

 

 

 - 

 

 - 

 

 38,300 

 

 1,500 

 

 - 

 

 39,800 

 

 5,385 

 

2008

 

1994

 

92 Brick Road

Mechanicsburg, PA

 

 

 - 

 

 1,350 

 

 16,650 

 

 - 

 

 1,350 

 

 16,650 

 

 1,064 

 

2011

 

1971

 

4950 Wilson Lane

Merced, CA

 

 

 - 

 

 - 

 

 13,772 

 

 927 

 

 - 

 

 14,699 

 

 2,108 

 

2009

 

2010

 

315 Mercy Ave.

Meridian, ID

 

 

 - 

 

 3,600 

 

 20,802 

 

 251 

 

 3,600 

 

 21,053 

 

 5,974 

 

2006

 

2008

 

2825 E. Blue Horizon Dr.

Merriam, KS

 

 

 - 

 

 176 

 

 7,189 

 

 605 

 

 176 

 

 7,794 

 

 1,720 

 

2011

 

1972

 

8800 West 75th Street

Merriam, KS

 

 

 - 

 

 81 

 

 3,122 

 

 687 

 

 81 

 

 3,810 

 

 495 

 

2011

 

1980

 

7301 Frontage Street

Merriam, KS

 

 

 - 

 

 336 

 

 12,972 

 

 202 

 

 336 

 

 13,174 

 

 2,397 

 

2011

 

1977

 

8901 West 74th Street

Merriam, KS

 

 

 15,032 

 

 182 

 

 7,393 

 

 488 

 

 182 

 

 7,881 

 

 1,354 

 

2011

 

1985

 

9119 West 74th Street

Merriam, KS

 

 

 - 

 

 - 

 

 25,458 

 

 - 

 

 - 

 

 25,458 

 

 - 

 

2013

 

2009

 

9301 West 74th Street

Merrillville, IN

 

 

 - 

 

 700 

 

 11,699 

 

 154 

 

 700 

 

 11,853 

 

 1,808 

 

2007

 

2008

 

9509 Georgia St.

Merrillville, IN

 

 

 - 

 

 - 

 

 22,134 

 

 210 

 

 - 

 

 22,344 

 

 3,652 

 

2008

 

2006

 

101 E. 87th Ave.

Mesa, AZ

 

 

 - 

 

 1,558 

 

 9,561 

 

 400 

 

 1,558 

 

 9,961 

 

 2,926 

 

2008

 

1989

 

6424 East Broadway Road

Mesquite, TX

 

 

 - 

 

 496 

 

 3,834 

 

 - 

 

 496 

 

 3,834 

 

 196 

 

2012

 

2012

 

1575 I-30

Milwaukee, WI

 

 

 4,258 

 

 540 

 

 8,457 

 

 - 

 

 540 

 

 8,457 

 

 1,162 

 

2010

 

1930

 

1218 W. Kilbourn Ave.

Milwaukee, WI

 

 

 9,386 

 

 1,425 

 

 11,519 

 

 - 

 

 1,425 

 

 11,520 

 

 2,063 

 

2010

 

1962

 

3301-3355 W. Forest Home Ave.

Milwaukee, WI

 

 

 2,347 

 

 922 

 

 2,185 

 

 - 

 

 922 

 

 2,185 

 

 489 

 

2010

 

1958

 

840 N. 12th St.

Milwaukee, WI

 

 

 20,781 

 

 - 

 

 44,535 

 

 - 

 

 - 

 

 44,535 

 

 5,533 

 

2010

 

1983

 

2801 W. Kinnickinnic Pkwy.

Moline, IL

 

 

 - 

 

 - 

 

 8,690 

 

 - 

 

 - 

 

 8,690 

 

 19 

 

2012

 

2013

 

3900 28th Avenue Drive

Monticello, MN

 

 

 9,212 

 

 61 

 

 18,489 

 

 - 

 

 61 

 

 18,489 

 

 662 

 

2012

 

2008

 

1001 Hart Boulevard

Moorestown, NJ

 

 

 - 

 

 - 

 

 52,645 

 

 1,479 

 

 - 

 

 54,124 

 

 2,311 

 

2011

 

2012

 

401  Young Avenue

Morrow, GA

 

 

 - 

 

 818 

 

 8,064 

 

 234 

 

 845 

 

 8,270 

 

 2,436 

 

2007

 

1990

 

6635 Lake Drive

Mount Juliet, TN

 

 

 4,003 

 

 1,566 

 

 11,697 

 

 1,086 

 

 1,566 

 

 12,783 

 

 3,278 

 

2007

 

2005

 

 5002 Crossing Circle

Mount Pleasant, SC

 

 

 - 

 

 - 

 

 17,200 

 

 - 

 

 - 

 

 17,200 

 

 144 

 

2013

 

1985

 

1200 Hospital Drive

Mount Vernon, IL

 

 

 - 

 

 - 

 

 25,163 

 

 906 

 

 - 

 

 26,069 

 

 1,141 

 

2011

 

2012

 

4121 Veterans Memorial Dr

Murrieta, CA

 

 

 - 

 

 8,800 

 

 202,412 

 

 - 

 

 8,800 

 

 202,412 

 

 13,453 

 

2008

 

2010

 

28062 Baxter Road

Murrieta, CA

 

 

 - 

 

 - 

 

 46,520 

 

 375 

 

 - 

 

 46,895 

 

 6,362 

 

2010

 

2011

 

28078 Baxter Rd.

Muskego, WI

 

 

 1,129 

 

 964 

 

 2,158 

 

 - 

 

 964 

 

 2,159 

 

 274 

 

2010

 

1993

 

S74 W16775 Janesville Rd.

Nashville, TN

 

 

 - 

 

 1,806 

 

 7,165 

 

 1,548 

 

 1,806 

 

 8,713 

 

 2,618 

 

2006

 

1986

 

310 25th Ave. N.

New Berlin, WI

 

 

 4,352 

 

 3,739 

 

 8,290 

 

 - 

 

 3,739 

 

 8,290 

 

 1,142 

 

2010

 

1993

 

14555 W. National Ave.

Niagara Falls, NY

 

 

 - 

 

 1,145 

 

 10,574 

 

 444 

 

 1,280 

 

 10,883 

 

 3,256 

 

2007

 

1995

 

6932 - 6934 Williams Rd

Niagara Falls, NY

 

 

 - 

 

 388 

 

 7,870 

 

 417 

 

 454 

 

 8,221 

 

 1,783 

 

2007

 

2004

 

6930 Williams Rd

Oklahoma City, OK

 

 

 - 

 

 - 

 

 19,119 

 

 - 

 

 - 

 

 19,119 

 

 - 

 

2013

 

2008

 

535 NW 9th Street

Orange Village, OH

 

 

 - 

 

 610 

 

 7,419 

 

 458 

 

 610 

 

 7,877 

 

 2,131 

 

2007

 

1985

 

3755 Orange Place

Oro Valley, AZ

 

 

 9,818 

 

 89 

 

 18,339 

 

 880 

 

 89 

 

 19,218 

 

 4,431 

 

2007

 

2004

 

1521 E. Tangerine Rd.

Oshkosh, WI

 

 

 - 

 

 - 

 

 18,339 

 

 - 

 

 - 

 

 18,339 

 

 2,311 

 

2010

 

2000

 

855 North Wethaven Dr.

Oshkosh, WI

 

 

 8,758 

 

 - 

 

 15,881 

 

 - 

 

 - 

 

 15,881 

 

 1,980 

 

2010

 

2000

 

855 North Wethaven Dr.

Palm Springs, FL

 

 

 2,607 

 

 739 

 

 4,066 

 

 467 

 

 739 

 

 4,532 

 

 1,260 

 

2006

 

1993

 

1640 S. Congress Ave.

Palm Springs, FL

 

 

 - 

 

 1,182 

 

 7,765 

 

 474 

 

 1,182 

 

 8,239 

 

 2,312 

 

2006

 

1997

 

1630 S. Congress Ave.

Palmer, AK

 

 

 18,957 

 

 217 

 

 29,705 

 

 854 

 

 217 

 

 30,559 

 

 6,625 

 

2007

 

2006

 

2490 South Woodworth Loop

Pasadena, TX

 

 

 - 

 

 1,700 

 

 7,991 

 

 - 

 

 1,700 

 

 7,991 

 

 101 

 

2012

 

2013

 

5001 E Sam Houston Parkway S

Pearland, TX

 

 

 - 

 

 1,500 

 

 11,484 

 

 - 

 

 1,500 

 

 11,484 

 

 48 

 

2012

 

2013

 

2515 Business Center Drive

Pendleton, OR

 

 

 - 

 

 - 

 

 10,533 

 

 - 

 

 - 

 

 10,533 

 

 23 

 

2012

 

2013

 

3001 St. Anthony Drive

Pewaukee, WI

 

 

 - 

 

 4,700 

 

 20,669 

 

 - 

 

 4,700 

 

 20,669 

 

 4,583 

 

2007

 

2007

 

2400 Golf Rd.

Phoenix, AZ

 

 

 27,199 

 

 1,149 

 

 48,018 

 

 11,155 

 

 1,149 

 

 59,174 

 

 13,907 

 

2006

 

1998

 

2222 E. Highland Ave.

Pineville, NC

 

 

 - 

 

 961 

 

 6,974 

 

 2,081 

 

 1,077 

 

 8,939 

 

 2,368 

 

2006

 

1988

 

10512 Park Rd.

Plano, TX

 

 

 - 

 

 5,423 

 

 20,752 

 

 398 

 

 5,423 

 

 21,150 

 

 7,070 

 

2008

 

2007

 

6957 Plano Parkway

Plano, TX

 

 

 53,948 

 

 793 

 

 82,703 

 

 - 

 

 793 

 

 82,703 

 

 7,072 

 

2012

 

2005

 

6020 West Parker Road

Plantation, FL

 

 

 9,214 

 

 8,563 

 

 10,666 

 

 2,517 

 

 8,575 

 

 13,171 

 

 4,477 

 

2006

 

1997

 

851-865 SW 78th Ave.

Plantation, FL

 

 

 8,559 

 

 8,848 

 

 9,262 

 

 332 

 

 8,907 

 

 9,535 

 

 5,130 

 

2006

 

1996

 

600 Pine Island Rd.

Plymouth, WI

 

 

 1,317 

 

 1,250 

 

 1,870 

 

 - 

 

 1,250 

 

 1,870 

 

 289 

 

2010

 

1991

 

2636 Eastern Ave.

Portland, ME

 

 

 15,418 

 

 655 

 

 25,500 

 

 421 

 

 655 

 

 25,921 

 

 2,592 

 

2011

 

2008

 

195 Fore River Parkway

Redmond, WA

 

 

 - 

 

 5,015 

 

 26,697 

 

 - 

 

 5,015 

 

 26,697 

 

 3,073 

 

2010

 

2011

 

18000 NE Union Hill Rd.

Reno, NV

 

 

 - 

 

 1,117 

 

 21,972 

 

 931 

 

 1,117 

 

 22,903 

 

 5,710 

 

2006

 

1991

 

343 Elm St.

Richmond, VA

 

 

 - 

 

 - 

 

 12,000 

 

 - 

 

 - 

 

 12,000 

 

 100 

 

2013

 

1989

 

2220 Edward Holland Drive

Richmond, VA

 

 

 - 

 

 2,838 

 

 26,305 

 

 39 

 

 2,838 

 

 26,343 

 

 1,429 

 

2012

 

2008

 

7001 Forest Avenue

Rochdale, MA

 

 

 - 

 

 - 

 

 7,100 

 

 - 

 

 - 

 

 7,100 

 

 59 

 

2013

 

1994

 

111 Huntoon Memorial Highway

Rockwall, TX

 

 

 - 

 

 132 

 

 17,056 

 

 139 

 

 132 

 

 17,195 

 

 1,541 

 

2012

 

2008

 

3142 Horizon Road

Rogers, AR

 

 

 - 

 

 1,062 

 

 28,680 

 

 231 

 

 1,062 

 

 28,911 

 

 2,950 

 

2011

 

2008

 

2708 Rife Medical Lane

Rolla, MO

 

 

 - 

 

 1,931 

 

 47,640 

 

 - 

 

 1,931 

 

 47,639 

 

 3,816 

 

2011

 

2009

 

1605 Martin Spring Drive

Roswell, NM

 

 

 1,674 

 

 183 

 

 5,851 

 

 - 

 

 183 

 

 5,851 

 

 601 

 

2011

 

2004

 

601 West Country Club Road

Roswell, NM

 

 

 4,756 

 

 883 

 

 15,984 

 

 - 

 

 883 

 

 15,984 

 

 1,360 

 

2011

 

2006

 

350 West Country Club Road

Roswell, NM

 

 

 - 

 

 762 

 

 17,171 

 

 - 

 

 762 

 

 17,171 

 

 1,166 

 

2011

 

2009

 

300 West Country Club Road

Ruston, LA

 

 

 - 

 

 710 

 

 9,790 

 

 - 

 

 710 

 

 9,790 

 

 679 

 

2011

 

1988

 

1401 Ezelle St

Sacramento, CA

 

 

 - 

 

 866 

 

 12,756 

 

 1,274 

 

 866 

 

 14,030 

 

 3,284 

 

2006

 

1990

 

8120 Timberlake Way

San Antonio, TX

 

 

 - 

 

 - 

 

 17,303 

 

 - 

 

 - 

 

 17,303 

 

 4,409 

 

2007

 

2007

 

8902 Floyd Curl Dr.

San Antonio, TX

 

 

 - 

 

 2,050 

 

 16,251 

 

 2,811 

 

 2,050 

 

 19,062 

 

 6,304 

 

2006

 

1999

 

540 & 19016 Stone Oak Pkwy.

San Antonio, TX

 

 

 18,400 

 

 4,518 

 

 29,905 

 

 326 

 

 4,518 

 

 30,231 

 

 3,486 

 

2012

 

1986

 

5282 Medical Drive

San Bernardino, CA

 

 

 - 

 

 3,700 

 

 14,300 

 

 687 

 

 3,700 

 

 14,987 

 

 1,991 

 

2008

 

1993

 

1760 W. 16th St.

San Diego, CA

 

 

 - 

 

 - 

 

 22,003 

 

 1,845 

 

 - 

 

 23,848 

 

 3,087 

 

2008

 

1992

 

555 Washington St.

Sarasota, FL

 

 

 - 

 

 3,360 

 

 19,140 

 

 - 

 

 3,360 

 

 19,140 

 

 1,171 

 

2011

 

2006

 

6150 Edgelake Drive

Sarasota, FL

 

 

 - 

 

 62 

 

 46,348 

 

 701 

 

 62 

 

 47,048 

 

 2,385 

 

2012

 

1990

 

1921 Waldemere Street

Seattle, WA

 

 

 - 

 

 4,410 

 

 35,787 

 

 2,056 

 

 4,410 

 

 37,844 

 

 4,889 

 

2010

 

2010

 

5350 Tallman Ave

Sewell, NJ

 

 

 - 

 

 - 

 

 53,360 

 

 4,553 

 

 - 

 

 57,913 

 

 10,862 

 

2007

 

2009

 

239 Hurffville-Cross Keys Road

Shakopee, MN

 

 

 6,749 

 

 420 

 

 11,360 

 

 11 

 

 420 

 

 11,371 

 

 1,669 

 

2010

 

1996

 

1515 St Francis Ave

Shakopee, MN

 

 

 11,428 

 

 640 

 

 18,089 

 

 - 

 

 640 

 

 18,089 

 

 1,877 

 

2010

 

2007

 

1601 St Francis Ave

Sheboygan, WI

 

 

 1,819 

 

 1,012 

 

 2,216 

 

 - 

 

 1,012 

 

 2,216 

 

 346 

 

2010

 

1958

 

1813 Ashland Ave.

Somerville, NJ

 

 

 - 

 

 3,400 

 

 22,244 

 

 2 

 

 3,400 

 

 22,246 

 

 3,013 

 

2008

 

2007

 

30 Rehill Avenue

Southlake, TX

 

 

 11,680 

 

 592 

 

 17,905 

 

 167 

 

 592 

 

 18,072 

 

 1,537 

 

2012

 

2004

 

1545 East Southlake Boulevard

Southlake, TX

 

 

 18,293 

 

 698 

 

 30,524 

 

 - 

 

 698 

 

 30,524 

 

 2,089 

 

2012

 

2004

 

1545 East Southlake Boulevard

Springfield, IL

 

 

 - 

 

 - 

 

 10,100 

 

 - 

 

 - 

 

 10,100 

 

 84 

 

2013

 

2010

 

701 North Walnut Street

St. Louis, MO

 

 

 7,106 

 

 336 

 

 17,247 

 

 941 

 

 336 

 

 18,188 

 

 4,422 

 

2007

 

2001

 

2325 Dougherty Rd.

St. Paul, MN

 

 

 25,694 

 

 2,681 

 

 39,507 

 

 - 

 

 2,681 

 

 39,507 

 

 4,229 

 

2011

 

2007

 

435 Phalen Boulevard

Stafford, VA

 

 

 - 

 

 - 

 

 11,260 

 

 313 

 

 - 

 

 11,573 

 

 1,737 

 

2008

 

2009

 

125 Hospital Center Blvd

Suffern, NY

 

 

 - 

 

 622 

 

 35,220 

 

 2,035 

 

 622 

 

 37,255 

 

 3,263 

 

2011

 

2007

 

255 Lafayette Avenue

Suffolk, VA

 

 

 - 

 

 1,530 

 

 10,979 

 

 559 

 

 1,547 

 

 11,521 

 

 2,323 

 

2010

 

2007

 

5838 Harbour View Blvd.

Sugar Land, TX

 

 

 8,727 

 

 3,513 

 

 15,527 

 

 35 

 

 3,543 

 

 15,532 

 

 879 

 

2012

 

2005

 

11555 University Boulevard

Summit, WI

 

 

 - 

 

 2,899 

 

 87,666 

 

 - 

 

 2,899 

 

 87,666 

 

 15,631 

 

2008

 

2009

 

36500 Aurora Dr.

Tacoma, WA

 

 

 - 

 

 - 

 

 67,385 

 

 - 

 

 - 

 

 67,385 

 

 2,570 

 

2011

 

2013

 

1608 South J Street

Tallahassee, FL

 

 

 - 

 

 - 

 

 14,719 

 

 2,730 

 

 - 

 

 17,449 

 

 2,055 

 

2010

 

2011

 

One Healing Place

Tampa, FL

 

 

 - 

 

 4,319 

 

 12,234 

 

 - 

 

 4,319 

 

 12,234 

 

 914 

 

2011

 

2003

 

14547 Bruce B Downs Blvd

Tampa, FL

 

 

 - 

 

 1,210 

 

 19,572 

 

 63 

 

 1,212 

 

 19,633 

 

 1,625 

 

2012

 

2006

 

3000 Medical Park Drive

Tampa, FL

 

 

 - 

 

 2,208 

 

 6,464 

 

 20 

 

 2,208 

 

 6,484 

 

 933 

 

2012

 

1985

 

3000 E. Fletcher Avenue

Temple, TX

 

 

 - 

 

 2,900 

 

 9,851 

 

 103 

 

 2,900 

 

 9,954 

 

 371 

 

2011

 

2012

 

2601 Thornton Lane

Tucson, AZ

 

 

 - 

 

 1,302 

 

 4,925 

 

 811 

 

 1,302 

 

 5,736 

 

 1,644 

 

2008

 

1995

 

2055 W. Hospital Dr.

Tulsa, OK

 

 

 - 

 

 3,003 

 

 6,025 

 

 20 

 

 3,003 

 

 6,045 

 

 2,279 

 

2006

 

1992

 

329 S. 79th E. Ave.

Van Nuys, CA

 

 

 - 

 

 - 

 

 36,187 

 

 - 

 

 - 

 

 36,187 

 

 4,374 

 

2009

 

1991

 

6815 Noble Ave.

Virginia Beach, VA

 

 

 - 

 

 827 

 

 18,289 

 

 609 

 

 895 

 

 18,831 

 

 2,665 

 

2011

 

2007

 

828 Health Way

Voorhees, NJ

 

 

 - 

 

 6,404 

 

 24,251 

 

 1,387 

 

 6,477 

 

 25,564 

 

 5,767 

 

2006

 

1997

 

900 Centennial Blvd.

Voorhees, NJ

 

 

 - 

 

 - 

 

 96,006 

 

 2,642 

 

 6 

 

 98,642 

 

 6,548 

 

2010

 

2012

 

200 Bowman Drive

Wellington, FL

 

 

 6,605 

 

 107 

 

 16,933 

 

 1,705 

 

 107 

 

 18,638 

 

 3,667 

 

2006

 

2000

 

10115 Forest Hill Blvd.

Wellington , FL

 

 

 5,925 

 

 388 

 

 13,697 

 

 220 

 

 388 

 

 13,917 

 

 3,096 

 

2007

 

2003

 

1395 State Rd. 7

West Allis, WI

 

 

 3,341 

 

 1,106 

 

 3,309 

 

 - 

 

 1,106 

 

 3,309 

 

 617 

 

2010

 

1961

 

11333 W. National Ave.

West Palm Beach, FL

 

 

 6,353 

 

 628 

 

 14,740 

 

 121 

 

 628 

 

 14,861 

 

 3,890 

 

2006

 

1993

 

5325 Greenwood Ave.

West Palm Beach, FL

 

 

 5,860 

 

 610 

 

 14,618 

 

 387 

 

 610 

 

 15,005 

 

 4,365 

 

2006

 

1991

 

927 45th St.

West Seneca, NY

 

 

 11,698 

 

 917 

 

 22,435 

 

 1,870 

 

 1,642 

 

 23,580 

 

 5,783 

 

2007

 

1990

 

550 Orchard Park Rd

Westerville, OH

 

 

 - 

 

 2,122 

 

 5,403 

 

 56 

 

 2,122 

 

 5,459 

 

 352 

 

2012

 

2001

 

444 N Cleveland Avenue

Zephyrhills, FL

 

 

 - 

 

 3,875 

 

 23,907 

 

 3,364 

 

 3,875 

 

 27,270 

 

 2,205 

 

2011

 

1974

 

38135 Market Square Dr

Medical facilities total:

$

 

 700,427 

$

 340,690 

$

 4,326,337 

$

 134,627 

$

 344,775 

$

 4,456,878 

$

 595,169 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Assets held for sale:

 

 

Durham, NC

$

 

 - 

$

 5,350 

$

 9,320 

$

 - 

$

 - 

$

 - 

$

 - 

 

2006

 

1980

 

2609 N. Duke Street

Goshen, IN

 

 

 - 

 

 210 

 

 6,120 

 

 - 

 

 - 

 

 4,880 

 

 - 

 

2005

 

2006

 

1332 Waterford Circle

Kalida, OH

 

 

 - 

 

 480 

 

 8,173 

 

 - 

 

 - 

 

 7,123 

 

 - 

 

2006

 

2007

 

755 Ottawa St.

McConnelsville, OH

 

 

 - 

 

 190 

 

 7,060 

 

 - 

 

 - 

 

 6,499 

 

 - 

 

2010

 

1946

 

4114 North SR 376 NW

Assets held for sale total

$

 

 - 

$

 6,230 

$

 30,673 

$

 - 

$

 - 

$

 18,502 

 

 - 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Summary:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Seniors housing triple-net

$

 587,136 

$

 781,397 

$

 8,430,604 

$

 428,753 

$

 782,390 

$

 8,858,364 

$

 1,075,955 

 

Seniors housing operating

 

 1,714,714 

 

 738,098 

 

 8,145,281 

 

 249,360 

 

 751,712 

 

 8,381,027 

 

 715,534 

 

Medical facilities

 

 700,427 

 

 340,690 

 

 4,326,337 

 

 134,627 

 

 344,775 

 

 4,456,878 

 

 595,169 

 

Construction in progress

 

 - 

 

 - 

 

 141,085 

 

 - 

 

 - 

 

 141,085 

 

 - 

 

Total continuing operating properties

 

 3,002,277 

 

 1,860,185 

 

 21,043,307 

 

 812,740 

 

 1,878,877 

 

 21,837,354 

 

 2,386,658 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Assets held for sale

 

 - 

 

 6,230 

 

 30,673 

 

 - 

 

 - 

 

 18,502 

 

 - 

 

Total investments in real property owned

$

 3,002,277 

$

 1,866,415 

$

 21,073,980 

$

 812,740 

$

 1,878,877 

$

 21,855,856 

$

 2,386,658 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(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.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

                                                                 

134


 

  

 

 

 

 

 

 

 

Year Ended December 31,

 

 

 

 

 

 

2013

 

 

2012

 

 

2011

 

 

 

 

 

 

 

 

 

 

 

 

 

Reconciliation of real property:

 

 

(in thousands)

 

Investment in real estate:

 

 

 

 

 

 

 

 

 

 

 

Balance at beginning of year

 

$

 18,082,399 

 

$

 14,844,319 

 

$

 8,992,495 

 

 

Additions:

 

 

 

 

 

 

 

 

 

 

 

 

Acquisitions

 

 

 3,597,955 

 

 

 2,923,251 

 

 

 4,525,737 

 

 

 

Improvements

 

 

 408,844 

 

 

 449,964 

 

 

 426,000 

 

 

 

Assumed other items, net

 

 

 772,972 

 

 

 108,404 

 

 

 210,411 

 

 

 

Assumed debt

 

 

 1,340,939 

 

 

 481,598 

 

 

 961,928 

 

 

Total additions

 

 

 6,154,628 

 

 

 3,969,299 

 

 

 6,124,076 

 

 

Deductions:

 

 

 

 

 

 

 

 

 

 

 

 

Cost of real estate sold

 

 

 (498,564) 

 

 

 (581,696) 

 

 

 (250,047) 

 

 

 

Reclassification of accumulated depreciation and amortization for assets held for sale

 

 

 (3,730) 

 

 

 (120,236) 

 

 

 (10,011) 

 

 

 

Impairment of assets

 

 

 - 

 

 

 (29,287) 

 

 

 (12,194) 

 

 

Total deductions

 

 

 (502,294) 

 

 

 (731,219) 

 

 

 (272,252) 

 

 

Foreign currency translation

 

 

 33,918 

 

 

 6,082 

 

 

 - 

 

 

Balance at end of year(3)

 

$

 23,734,733 

 

$

 18,082,399 

 

$

 14,844,319 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Accumulated depreciation:

 

 

 

 

 

 

 

 

 

 

 

Balance at beginning of year

 

$

 1,555,055 

 

$

 1,194,476 

 

$

 836,966 

 

 

Additions:

 

 

 

 

 

 

 

 

 

 

 

 

Depreciation and amortization expenses

 

 

 873,960 

 

 

 533,585 

 

 

 423,605 

 

 

 

Amortization of above market leases

 

 

 7,831 

 

 

 7,204 

 

 

 6,409 

 

 

Total additions

 

 

 881,791 

 

 

 540,789 

 

 

 430,014 

 

 

Deductions:

 

 

 

 

 

 

 

 

 

 

 

 

Sale of properties

 

 

 (49,625) 

 

 

 (59,974) 

 

 

 (63,997) 

 

 

 

Reclassification of accumulated depreciation and amortization for assets held for sale

 

 

 (3,730) 

 

 

 (120,236) 

 

 

 (8,507) 

 

 

Total deductions

 

 

 (53,355) 

 

 

 (180,210) 

 

 

 (72,504) 

 

 

Foreign currency translation

 

 

 3,167 

 

 

 - 

 

 

 - 

 

 

Balance at end of year

 

$

 2,386,658 

 

$

 1,555,055 

 

$

 1,194,476 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(3) The aggregate cost for tax purposes for real property equals $20,260,297,000, $14,788,080,000, and $13,604,448,000 at December 31, 2013, 2012 and 2011, respectively.

139


 

  

Health Care REIT, Inc.

Schedule IV - Mortgage Loans on Real Estate

December 31, 2013

 

 

 

 

 

 

 

 

 

 

(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:

 

 

 

 

 

 

 

 

 

 

 

 

 

Texas

Medical office buildings

 

6.18%

 

12/31/17

 

$133,300

 

$

 - 

 

$

 25,936 

 

$

 25,864 

 

$

 - 

 

Massachusetts

Seniors housing triple-net

 

7.60%

 

12/31/16

 

$130,934

 

 

 - 

 

 

 21,000 

 

 

 20,285 

 

 

 - 

 

California

Hospital

 

10.39%

 

06/01/20

 

$205,064

 

 

 - 

 

 

 25,050 

 

 

 18,546 

 

 

 - 

 

California

Hospital

 

8.72%

 

12/01/17

 

$127,158

 

 

 - 

 

 

 17,500 

 

 

 17,500 

 

 

 - 

 

Texas

Medical office buildings

 

6.18%

 

12/31/17

 

$83,353

 

 

 - 

 

 

 16,402 

 

 

 16,173 

 

 

 - 

 

United Kingdom

Seniors housing triple-net

 

7.00%

 

04/19/18

 

$87,414

 

 

 - 

 

 

 24,032 

 

 

 15,002 

 

 

 - 

 

United Kingdom

Seniors housing triple-net

 

7.00%

 

11/21/18

 

$52,667

 

 

 - 

 

 

 23,038 

 

 

 9,219 

 

 

 - 

 

Georgia

Medical office buildings

 

6.50%

 

10/01/14

 

$38,556

 

 

 - 

 

 

 6,100 

 

 

 5,940 

 

 

 - 

 

United Kingdom

Seniors housing triple-net

 

7.54%

 

07/31/15

 

$21,227

 

 

 - 

 

 

 3,315 

 

 

 3,315 

 

 

 - 

 

Texas

Seniors housing triple-net

 

7.50%

 

10/31/18

 

$12,887

 

 

 - 

 

 

 8,800 

 

 

 2,023 

 

 

 - 

 

Texas

Seniors housing triple-net

 

7.50%

 

10/31/18

 

$11,639

 

 

 - 

 

 

 8,800 

 

 

 1,827 

 

 

 - 

 

Texas

Seniors housing triple-net

 

10.50%

 

03/01/14

 

$56,574

 

 

 - 

 

 

 2,635 

 

 

 534 

 

 

 - 

 

Arizona

Seniors housing triple-net

 

3.55%

 

01/01/14

 

$12,275

 

 

 - 

 

 

 4,500 

 

 

 500 

 

 

 500 

 

Georgia

Medical office buildings

 

8.11%

 

10/01/14

 

$1,676

 

 

 - 

 

 

 800 

 

 

 243 

 

 

 - 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Second mortgages relating to 1 property located in:

 

 

 

 

 

 

 

 

 

 

 

 

 

Connecticut

Seniors housing triple-net

 

8.11%

 

04/01/18

 

$31,909

 

 

 6,536 

 

 

 5,300 

 

 

 4,616 

 

 

 - 

 

Florida

Seniors housing triple-net

 

12.17%

 

07/01/18

 

$27,908

 

 

 4,107 

 

 

 2,700 

 

 

 2,700 

 

 

 - 

 

Florida

Seniors housing triple-net

 

12.17%

 

11/01/18

 

$27,685

 

 

 1,324 

 

 

 2,700 

 

 

 2,700 

 

 

 - 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Totals

 

 

 

 

 

 

 

 

$

 11,967 

 

$

 198,608 

 

$

 146,987 

 

$

 500 

 

 

 

 

 

 

 

Year Ended December 31,

 

 

 

 

 

2013

 

 

2012

 

 

2011

Reconciliation of mortgage loans:

 

 

(in thousands)

 

Balance at beginning of year

 

$

 87,955 

 

$

 63,934 

 

$

 109,283 

 

Additions:

 

 

 

 

 

 

 

 

 

 

 

New mortgage loans

 

 

 68,530 

 

 

 40,641 

 

 

 11,286 

 

Total additions

 

 

 68,530 

 

 

 40,641 

 

 

 11,286 

 

Deductions:

 

 

 

 

 

 

 

 

 

 

 

Collections of principal

 

 

 (8,790) 

 

 

 (11,819) 

 

 

 (50,579) 

 

 

Conversions to real property

 

 

 - 

 

 

 (3,300) 

 

 

 (4,000) 

 

 

Charge-offs

 

 

 (2,110) 

 

 

 (1,501) 

 

 

 - 

 

 

Reclass to other real estate loans

 

 

 - 

 

 

 - 

 

 

 (2,056) 

 

Total deductions

 

 

 (10,900) 

 

 

 (16,620) 

 

 

 (56,635) 

 

Change in balance due to foreign currency translation

 

 

 1,402 

 

 

 - 

 

 

 - 

 

Balance at end of year

 

$

 146,987 

 

$

 87,955 

 

$

 63,934 

 

 

 

 

 

 

 

 

 

 

140


 

  

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 Designation, Preferences and Rights of Junior Participating Preferred Stock, Series A, 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 10-K filed March 20, 2000 (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 3.1 to the Company’s Form 8-K filed June 13, 2003 (File No. 001-08923), and incorporated herein by reference thereto).

3.1(e)      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(f)      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(g)      Certificate of Designation of 6% Series H Cumulative Convertible and Redeemable Preferred Stock of the Company (filed with the Commission as Exhibit 3.1 to the Company’s Form 10-Q filed May 10, 2011 (File No. 001-08923), and incorporated herein by reference thereto).

3.1(h)     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(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 10, 2011 (File No. 001-08923), and incorporated herein by reference thereto).

3.1(j)      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).

 


 

  

3.2          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 November 20, 2006, 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 20, 2006 (File No. 001-08923), and incorporated herein by reference thereto).

4.2(b)     Supplemental Indenture No. 1, dated as of November 20, 2006, between the Company and The Bank of New York Trust Company, N.A. (filed with the Commission as Exhibit 4.2 to the Company’s Form 8-K filed November 20, 2006 (File No. 001-08923), and incorporated herein by reference thereto).

4.2(c)      Supplemental Indenture No. 2, dated as of July 20, 2007, 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 July 20, 2007 (File No. 001-08923), and incorporated herein by reference thereto).

 


 

  

4.3(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).

4.3(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).

4.3(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).

4.3(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).

4.3(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).

4.3(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).

4.3(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).

4.3(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).

4.3(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).

4.3(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).

4.3(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).

4.3(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).

4.4          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).

4.5          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 January 7, 2013, by and among the Company, the lenders listed therein, KeyBank National Association, as administrative agent, LC 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 joint lead arrangers, and Merrill Lynch, Pierce, Fenner & Smith Incorporated and J.P. Morgan Securities LLC, as joint book managers (filed with the Commission as Exhibit 10.1 to the Company’s Form 8-K filed January 11, 2013 (File No. 001-08923), and incorporated herein by reference thereto).

10.2        Term Loan Agreement, dated as of May 24, 2012, by and among the Company, the banks signatory thereto, KeyBank National Association, as administrative agent, JPMorgan Chase Bank, N.A., Bank of America, N.A. and Royal Bank of Canada, as co-syndication agents, Citibank, N.A., Compass Bank, Fifth Third Bank, PNC Bank, National Association, The Bank of New York Mellon and Wells Fargo Bank, National Association, as co-documentation agents, and J.P. Morgan Securities LLC, Merrill Lynch, Pierce, Fenner & Smith Incorporated and RBC Capital Markets, as joint lead arrangers and joint bookrunners (filed with the Commission as Exhibit 10.1 to the Company’s Form 8-K filed May 30, 2012 (File No. No. 001-08923), and incorporated herein by reference thereto).

10.3        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).

10.4(a)   The 1995 Stock Incentive Plan of Health Care REIT, Inc. (filed with the Commission as Appendix II to the Company’s Proxy Statement for the 1995 Annual Meeting of Stockholders, filed September 29, 1995 (File No. 001-08923), and incorporated herein by reference thereto).*

10.4(b)   First Amendment to the 1995 Stock Incentive Plan of Health Care REIT, Inc. (filed with the Commission as Exhibit 4.2 to the Company’s Form S-8 (File No. 333-40771) filed November 21, 1997, and incorporated herein by reference thereto).*

10.4(c)   Second Amendment to the 1995 Stock Incentive Plan of Health Care REIT, Inc. (filed with the Commission as Exhibit 4.3 to the Company’s Form S-8 (File No. 333-73916) filed November 21, 2001, and incorporated herein by reference thereto).*

10.4(d)   Third Amendment to the 1995 Stock Incentive Plan of Health Care REIT, Inc. (filed with the Commission as Exhibit 10.15 to the Company’s Form 10-K filed March 12, 2004 (File No. 001-08923), and incorporated herein by reference thereto).*

10.4(e)   Form of Stock Option Agreement for Executive Officers under the 1995 Stock Incentive Plan (filed with the Commission as Exhibit 10.17 to the Company’s Form 10-K filed March 16, 2005 (File No. 001-08923), and incorporated herein by reference thereto).*

10.5(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).*

10.5(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).*

10.5(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).*

10.5(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).*

 


 

  

10.5(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).*

10.5(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).*

10.5(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).*

10.5(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).*

10.5(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).*

10.5(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).*

10.5(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).*

10.5(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).*

10.5(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).*

10.5(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).*

10.5(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).*

10.5(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).*

10.5(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).*

10.5(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).*

 


 

  

10.5(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).*

10.6(a)   Fifth Amended and Restated Employment Agreement, dated December 2, 2010, 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 December 8, 2010 (File No. 001-08923), and incorporated herein by reference thereto).*

10.6(b)   Letter Agreement, dated February 4, 2013, by and between the Company and George L. Chapman (filed with the Commission as Exhibit 10.8(b) to the Company’s Form 10-K filed February 26, 2013 (File No. 001-08923), and incorporated herein by reference thereto).*

10.6(c)   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).*

10.7        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).*

10.8        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).*

10.9        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).*

10.10      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).*

10.11      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).*

10.12      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).*

10.13      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).*

10.14      Summary of Director Compensation.*

10.15      Health Care REIT, Inc. 2013-2015 Long-Term Incentive Program (filed with the Commission as Exhibit 10.1 to the Company’s Form 10-Q filed August 6, 2013 (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, 2013 and 2012, (ii) the Consolidated Statements of Comprehensive Income for the years ended December 31, 2013, 2012 and 2011, (iii) the Consolidated Statements of Equity for the years ended December 31, 2013, 2012 and 2011, (iv) the Consolidated Statements of Cash Flows for the years ended December 31, 2013, 2012 and 2011, (v) the Notes to Consolidated Financial Statements, (vi) Schedule III – Real Estate and Accumulated Depreciation and (vii) Schedule IV – Mortgage Loans on Real Estate.