10-Q

 

UNITED STATES SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

(Mark One)

☑ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended June 30, 2017

or

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to

Commission file number: 1-8923

WELLTOWER 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 offices)	(Zip Code)

(419) 247-2800

(Registrant’s telephone number, including area code)

Not Applicable

(Former name, former address and former fiscal year, if changed since last report)

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 such filing requirements for the past 90 days. Yes  ☑  No  o

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 ☑  No  o

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 ☑ 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  ☑

As of July 14, 2017, the registrant had 368,878,685 shares of common stock outstanding.

TABLE OF CONTENTS

	Page
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements (Unaudited)
Consolidated Balance Sheets — June 30, 2017 and December 31, 2016	3
Consolidated Statements of Comprehensive Income — Three and six months ended June 30, 2017 and 2016	4
Consolidated Statements of Equity — Six months ended June 30, 2017 and 2016	6
Consolidated Statements of Cash Flows — Six months ended June 30, 2017 and 2016	7
Notes to Unaudited Consolidated Financial Statements	8
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations	28
Item 3. Quantitative and Qualitative Disclosures About Market Risk	51
Item 4. Controls and Procedures	52
PART II. OTHER INFORMATION
Item 1. Legal Proceedings Item 1A. Risk Factors	52 53
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds	53
Item 5. Other Information	53
Item 6. Exhibits	53
Signatures	54

PART I. FINANCIAL INFORMATION

Item 1. Financial Statements

CONSOLIDATED BALANCE SHEETS

WELLTOWER INC. AND SUBSIDIARIES

(In thousands)

				June 30, 2017		December 31, 2016
				(Unaudited)		(Note)
Assets:
Real estate investments:
	Real property owned:
		Land and land improvements		$	2,746,483	$	2,591,071
		Buildings and improvements			25,399,178		24,496,153
		Acquired lease intangibles			1,436,041		1,402,884
		Real property held for sale, net of accumulated depreciation			141,319		1,044,859
		Construction in progress			321,655		506,091
			Gross real property owned		30,044,676		30,041,058
		Less accumulated depreciation and amortization			(4,568,408)		(4,093,494)
			Net real property owned		25,476,268		25,947,564
	Real estate loans receivable				520,479		622,628
		Less allowance for losses on loans receivable			(5,811)		(6,563)
			Net real estate loans receivable		514,668		616,065
	Net real estate investments				25,990,936		26,563,629
Other assets:
		Investments in unconsolidated entities			425,489		457,138
		Goodwill			68,321		68,321
		Cash and cash equivalents			442,284		419,378
		Restricted cash			45,357		187,842
		Straight-line rent receivable			370,819		342,578
		Receivables and other assets			632,580		826,298
			Total other assets		1,984,850		2,301,555
Total assets				$	27,975,786	$	28,865,184
Liabilities and equity
Liabilities:
		Borrowings under primary unsecured credit facility		$	385,000	$	645,000
		Senior unsecured notes			8,250,940		8,161,619
		Secured debt			2,670,914		3,477,699
		Capital lease obligations			73,092		73,927
		Accrued expenses and other liabilities			893,441		827,034
Total liabilities					12,273,387		13,185,279
Redeemable noncontrolling interests					388,876		398,433
Equity:
		Preferred stock			718,750		1,006,250
		Common stock			369,525		363,071
		Capital in excess of par value			17,439,977		16,999,691
		Treasury stock			(62,335)		(54,741)
		Cumulative net income			5,330,702		4,803,575
		Cumulative dividends			(8,805,336)		(8,144,981)
		Accumulated other comprehensive income (loss)			(163,624)		(169,531)
		Other equity			1,173		3,059
			Total Welltower Inc. stockholders’ equity		14,828,832		14,806,393
		Noncontrolling interests			484,691		475,079
Total equity					15,313,523		15,281,472
Total liabilities and equity				$	27,975,786	$	28,865,184

NOTE: The consolidated balance sheet at December 31, 2016 has been derived from the audited financial statements at that date but does not include all of the information and footnotes required by U.S. generally accepted accounting principles for complete financial statements.

See notes to unaudited consolidated financial statements

3

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (UNAUDITED)

WELLTOWER INC. AND SUBSIDIARIES

(In thousands, except per share data)

			Three Months Ended				Six Months Ended
			June 30,				June 30,
			2017		2016		2017		2016
Revenues:
	Rental income		$	355,599	$	422,628	$	722,741	$	838,290
	Resident fees and services			677,040		615,220		1,347,377		1,217,369
	Interest income			20,901		24,007		41,649		49,195
	Other income			5,062		14,802		9,133		18,851
		Total revenues		1,058,602		1,076,657		2,120,900		2,123,705
Expenses:
	Interest expense			116,231		132,326		234,827		265,285
	Property operating expenses			501,855		458,832		1,012,024		908,468
	Depreciation and amortization			224,847		226,569		453,124		455,265
	General and administrative			32,632		39,914		63,733		85,606
	Transaction costs			-		5,157		-		13,365
	Loss (gain) on derivatives, net			736		-		1,960		-
	Loss (gain) on extinguishment of debt, net			5,515		33		36,870		9
	Impairment of assets			13,631		-		24,662		14,314
	Other expenses			6,339		3,161		18,014		3,161
		Total expenses		901,786		865,992		1,845,214		1,745,473
Income (loss) from continuing operations before income taxes
	and income from unconsolidated entities			156,816		210,665		275,686		378,232
Income tax (expense) benefit				8,448		513		6,203		2,239
Income (loss) from unconsolidated entities				(3,978)		(1,959)		(27,084)		(5,778)
Income (loss) from continuing operations				161,286		209,219		254,805		374,693
Gain (loss) on real estate dispositions, net				42,155		1,530		286,247		1,530
Net income				203,441		210,749		541,052		376,223
Less:		Preferred stock dividends		11,680		16,352		26,059		32,703
Less:		Preferred stock redemption charge		-		-		9,769		-
Less:		Net income (loss) attributable to noncontrolling interests(1)		3,332		(1,077)		4,156		(924)
Net income (loss) attributable to common stockholders			$	188,429	$	195,474	$	501,068	$	344,444
Average number of common shares outstanding:
	Basic			366,524		356,646		364,551		355,879
	Diluted			368,149		358,891		366,423		357,489
Earnings per share:
	Basic:
	Income (loss) from continuing operations attributable to common stockholders, including real estate dispositions		$	0.51	$	0.55	$	1.37	$	0.97
	Net income (loss) attributable to common stockholders*		$	0.51	$	0.55	$	1.37	$	0.97
	Diluted:
	Income (loss) from continuing operations attributable to common stockholders, including real estate dispositions		$	0.51	$	0.54	$	1.37	$	0.96
	Net income (loss) attributable to common stockholders*		$	0.51	$	0.54	$	1.37	$	0.96
Dividends declared and paid per common share			$	0.87	$	0.86	$	1.74	$	1.72

* Amounts may not sum due to rounding

(1) Includes amounts attributable to redeemable noncontrolling interests.

See notes to unaudited consolidated financial statements

4

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (UNAUDITED)

WELLTOWER INC. AND SUBSIDIARIES

(In thousands)

		Three Months Ended June 30,				Six Months Ended June 30,
		2017		2016		2017		2016
Net income		$	203,441	$	210,749	$	541,052	$	376,223
Other comprehensive income (loss):
	Unrecognized gain (loss) on equity investments		(5,908)		(3,611)		(16,477)		(11,160)
	Change in net unrealized gains (losses) on cash flow hedges:
	Unrealized gains (losses) on cash flow hedges		-		487		-		970
	Unrecognized actuarial gain (loss)		-		-		-		2
	Foreign currency translation gain (loss)		27,713		(50,384)		33,426		(49,012)
Total other comprehensive income (loss)			21,805		(53,508)		16,949		(59,200)
Total comprehensive income (loss)			225,246		157,241		558,001		317,023
Less: Total comprehensive income (loss) attributable to noncontrolling interests(1)			11,562		(4,000)		15,198		11,271
Total comprehensive income (loss) attributable to common stockholders		$	213,684	$	161,241	$	542,803	$	305,752
(1) Includes amounts attributable to redeemable noncontrolling interests.

See notes to unaudited consolidated financial statements

5

CONSOLIDATED STATEMENTS OF EQUITY (UNAUDITED)

WELLTOWER INC. AND SUBSIDIARIES

(In thousands)

		Six Months Ended June 30, 2017
														Accumulated
						Capital in								Other
		Preferred		Common		Excess of		Treasury		Cumulative		Cumulative		Comprehensive		Other		Noncontrolling
		Stock		Stock		Par Value		Stock		Net Income		Dividends		Income (Loss)		Equity		Interests		Total
Balances at beginning of period		$	1,006,250	$	363,071	$	16,999,691	$	(54,741)	$	4,803,575	$	(8,144,981)	$	(169,531)	$	3,059	$	475,079	$	15,281,472
Comprehensive income:
	Net income (loss)										536,896								5,302		542,198
	Other comprehensive income														5,907				11,042		16,949
Total comprehensive income																					559,147
Net change in noncontrolling interests							(4,247)												(6,732)		(10,979)
Amounts related to stock incentive plans, net of forfeitures					337		11,803		(7,583)								(1,896)				2,661
Proceeds from issuance of common stock					6,026		417,506														423,532
Redemption of preferred stock			(287,500)				9,760				(9,769)										(287,509)
Redemption of equity membership units					91		5,464		(11)												5,544
Option compensation expense																	10				10
Dividends paid:
	Common stock dividends												(634,296)								(634,296)
	Preferred stock dividends												(26,059)								(26,059)
Balances at end of period		$	718,750	$	369,525	$	17,439,977	$	(62,335)	$	5,330,702	$	(8,805,336)	$	(163,624)	$	1,173	$	484,691	$	15,313,523
		Six Months Ended June 30, 2016
														Accumulated
						Capital in								Other
		Preferred		Common		Excess of		Treasury		Cumulative		Cumulative		Comprehensive		Other		Noncontrolling
		Stock		Stock		Par Value		Stock		Net Income		Dividends		Income (Loss)		Equity		Interests		Total
Balances at beginning of period		$	1,006,250	$	354,811	$	16,478,300	$	(44,372)	$	3,725,772	$	(6,846,056)	$	(88,243)	$	4,098	$	585,325	$	15,175,885
Comprehensive income:
	Net income (loss)										377,147								3,089		380,236
	Other comprehensive income														(71,395)				12,195		(59,200)
Total comprehensive income																					321,036
Net change in noncontrolling interests							(41,658)												(125,415)		(167,073)
Amounts related to stock incentive plans, net of forfeitures					688		32,284		(6,916)								(329)				25,727
Proceeds from issuance of common stock					2,451		156,260														158,711
Option compensation expense																	148				148
Dividends paid:
	Common stock dividends												(613,163)								(613,163)
	Preferred stock dividends												(32,703)								(32,703)
Balances at end of period		$	1,006,250		357,950		16,625,186		(51,288)		4,102,919		(7,491,922)		(159,638)		3,917		475,194	$	14,868,568

See notes to unaudited consolidated financial statements

6

CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)

WELLTOWER INC. AND SUBSIDIARIES

(In thousands)

			Six Months Ended
			June 30,
			2017		2016
Operating activities:
Net income			$	541,052	$	376,223
Adjustments to reconcile net income to
	net cash provided from (used in) operating activities:
		Depreciation and amortization		453,124		455,265
		Other amortization expenses		7,789		3,141
		Impairment of assets		24,662		14,314
		Stock-based compensation expense		9,669		15,217
		Loss (gain) on derivatives, net		1,960		-
		Loss (gain) on extinguishment of debt, net		36,870		9
		Loss (income) from unconsolidated entities		27,084		5,778
		Rental income in excess of cash received		(41,325)		(54,055)
		Amortization related to above (below) market leases, net		48		332
		Loss (gain) on sales of properties, net		(286,247)		(1,530)
		Distributions by unconsolidated entities		3,225		351
		Increase (decrease) in accrued expenses and other liabilities		70,005		43,621
		Decrease (increase) in receivables and other assets		(3,807)		(3,009)
Net cash provided from (used in) operating activities				844,109		855,657
Investing activities:
	Cash disbursed for acquisitions			(237,119)		(287,455)
	Cash disbursed for capital improvements to existing properties			(93,147)		(87,529)
	Cash disbursed for construction in progress			(149,046)		(249,867)
	Capitalized interest			(7,488)		(7,343)
	Investment in real estate loans receivable			(50,717)		(51,059)
	Other investments, net of payments			52,457		(16,664)
	Principal collected on real estate loans receivable			36,500		168,343
	Contributions to unconsolidated entities			(65,631)		(39,644)
	Distributions by unconsolidated entities			47,384		19,301
	Proceeds from (payments on) derivatives			19,665		56,842
	Decrease in restricted cash			142,485		3,342
	Proceeds from sales of real property			1,203,782		130,298
Net cash provided from (used in) investing activities				899,125		(361,435)
Financing activities:
	Net increase (decrease) under unsecured credit facilities			(260,000)		(90,000)
	Proceeds from issuance of senior unsecured notes			-		693,560
	Payments to extinguish senior unsecured notes			-		(400,000)
	Net proceeds from the issuance of secured debt			161,799		161,992
	Payments on secured debt			(1,020,129)		(281,051)
	Net proceeds from the issuance of common stock			424,451		159,032
	Redemption of preferred stock			(287,500)		-
	Payments for deferred financing costs and prepayment penalties			(52,838)		(17,439)
	Contributions by noncontrolling interests(1)			9,663		138,458
	Distributions to noncontrolling interests(1)			(38,143)		(91,133)
	Cash distributions to stockholders			(660,355)		(645,866)
	Other financing activities			(8,925)		(7,646)
Net cash provided from (used in) financing activities				(1,731,977)		(380,093)
Effect of foreign currency translation on cash and cash equivalents				11,649		(8,452)
Increase (decrease) in cash and cash equivalents				22,906		105,677
Cash and cash equivalents at beginning of period				419,378		360,908
Cash and cash equivalents at end of period			$	442,284	$	466,585
Supplemental cash flow information:
	Interest paid		$	210,184	$	236,861
	Income taxes paid			4,360		3,889
(1) Includes amounts attributable to redeemable noncontrolling interests.

See notes to unaudited consolidated financial statements

7

WELLTOWER INC.

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

1. Business

     Welltower Inc., an S&P 500 company headquartered in Toledo, Ohio, is driving the transformation of health care infrastructure. The company invests with leading seniors housing operators, post-acute providers and health systems to fund the real estate and infrastructure needed to scale innovative care delivery models and improve people’s wellness and overall health care experience.  Welltower™, a real estate investment trust (“REIT”), owns interests in properties concentrated in major, high-growth markets in the United States, Canada and the United Kingdom, consisting of seniors housing and post-acute communities and outpatient medical properties.  Founded in 1970, we were the first real estate investment trust to invest exclusively in health care facilities.

2. Accounting Policies and Related Matters

Basis of Presentation

The accompanying unaudited consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles (“U.S. GAAP”) for interim financial information and with instructions to Quarterly Report on Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by U.S. GAAP for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included. Operating results for the six months ended June 30, 2017 are not necessarily an indication of the results that may be expected for the year ending December 31, 2017. For further information, refer to the financial statements and notes thereto included in our Annual Report on Form 10-K for the year ended December 31, 2016.

New Accounting Standards

     In May 2014, the Financial Accounting Standards Board (the “FASB”) issued ASU No. 2014-09, “Revenue from Contracts with Customers (Topic 606)”. The standard is a comprehensive new revenue recognition model that requires revenue to be recognized in a manner to depict the transfer of goods or services to a customer at an amount that reflects the consideration expected to be received in exchange for those goods or services.  ASU 2014-09 is effective for fiscal years, and interim periods within those years, beginning after December 15, 2017, and early adoption is permitted beginning after December 15, 2016.  A reporting entity may apply the new standard using either a modified retrospective approach by recording a cumulative-effect adjustment to equity as of the beginning of the fiscal year of adoption or a full retrospective approach.  We are currently evaluating the impact that the adoption of the standard will have on our consolidated financial statements and have not yet determined the method by which we will adopt the new standard.  A significant source of our revenue is generated through leasing arrangements, which are specifically excluded from the new standard.  We expect that the new standard will affect our accounting policies related to non-lease revenue, including certain fees in our RIDEA joint ventures, common area maintenance in our outpatient medical properties and real estate sales.  Under ASU 2014-09, revenue recognition for real estate sales is mainly based on the transfer of control versus current guidance of continuing involvement.  We expect that the new guidance will result in more transactions qualifying as sales of real estate and being recognized at an earlier date than under the current guidance.

     In January 2016, the FASB issued ASU No. 2016-01, “Financial Instruments – Overall: Recognition and Measurement of Financial Assets and Financial Liabilities,” which will require entities to measure their investments at fair value and recognize any changes in fair value in net income unless the investments qualify for the new practicability exception.  The practicability exception will be available for equity investments that do not have readily determinable fair values. ASU 2016-01 is effective for fiscal years and interim periods within those years, beginning after December 15, 2017.  We are currently evaluating the impact that the standard will have on our consolidated financial statements.

In February 2016, the FASB issued ASU No. 2016-02, “Leases (Topic 842),” which requires lessees to recognize assets and liabilities on their balance sheet related to the rights and obligations created by most leases, while continuing to recognize expenses on their income statements over the lease term.  It will also require disclosures designed to give financial statement users information regarding amount, timing, and uncertainty of cash flows arising from leases.  ASU 2016-02 is effective for fiscal years, and interim periods within those years, beginning after December 15, 2018, and early adoption is permitted.  Entities are required to use a modified retrospective approach for leases that exist or are entered into after the beginning of the earliest comparative period in the financial statements.  We are currently evaluating the impact of this standard on our consolidated financial statements.  We believe that the adoption of this standard will likely have a material impact to our consolidated balance sheet for the recognition of certain operating leases as right-of-use assets and lease liabilities.  We are in the process of analyzing our lease portfolio and evaluating systems to comply with the standard’s retrospective adoption requirements. 

In March 2016, the FASB issued ASU No. 2016-09, “Improvements to Employee Share-Based Payment Accounting”.  ASU 2016-09 is effective for fiscal years, and interim periods within those years, beginning after December 15, 2016, and early adoption is

8

WELLTOWER INC.

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

permitted.  We adopted ASU 2016-09 on January 1, 2017.  The standard allows companies to make a policy election as to whether they will include an estimate of awards expected to be forfeited or whether they will account for forfeitures as they occur.  We have elected to account for forfeitures as they occur. This election had an immaterial impact on our consolidated financial statements.  The standard also requires an employer to classify as a financing activity in the statement of cash flow the cash paid to a tax authority when shares are withheld to satisfy the employer’s statutory income tax withholding obligation.  This standard is required to be applied on a retrospective basis and resulted in an increase in net cash provided by operating activities and a decrease in net cash used in financing activities of $6,916,000 for the six months ended June 30, 2016.  Upon adoption, no other provisions of ASU 2016-09 had an effect on our unaudited consolidated financial statements or related footnote disclosures.

In June 2016, the FASB issued ASU No. 2016-13, “Measurement of Credit Losses on Financial Instruments”.  This standard requires a new forward-looking “expected loss” model to be used for receivables, held-to-maturity debt, loans, and other instruments.  ASU 2016-13 is effective for fiscal years, and interim periods within those years, beginning after December 15, 2019, and early adoption is permitted for fiscal years beginning after December 15, 2018.  We are currently evaluating the impact that the standard will have on our consolidated financial statements. 

     In January 2017, the FASB issued ASU No. 2017-01, “Clarifying the Definition of a Business”.  This standard changes the definition of a business to assist entities with evaluating when a set of transferred assets and activities is a business.  ASU 2017-01 is effective for fiscal years, and interim periods within those years, beginning after December 15, 2017, and early adoption is permitted.  A reporting entity must apply ASU 2017-01 using a prospective approach.  We adopted ASU 2017-01 on January 1, 2017 and as a result, have classified our real estate acquisitions completed during the six months ended June 30, 2017 as asset acquisitions rather than business combinations due to the fact that substantially all of the fair value of the gross assets acquired were concentrated in a single asset or group of similar identifiable assets. We have recorded identifiable assets acquired, liabilities assumed and any noncontrolling interests associated with any asset acquisitions at cost on a relative fair value basis and have capitalized transaction costs incurred.

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 relative 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 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.  Effective January 1, 2017, with our adoption of ASU 2017-01, transaction costs related to asset acquisitions are capitalized as a component of purchase price and all other non-capitalizable costs are reflected in “Other Expenses” on our Consolidated Statements of Comprehensive Income. Certain of our subsidiaries’ functional currencies are the local currencies of their respective countries. See Note 2 to the financial statements included in our Annual Report on Form 10-K for the year ended December 31, 2016 for information regarding our foreign currency policies.

9

WELLTOWER INC.

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

     Triple-net Activity

		Six Months Ended
(In thousands)		June 30, 2017			June 30, 2016
Land and land improvements			$	30,440		$	18,901
Buildings and improvements				188,569			160,209
Acquired lease intangibles				-			2,876
	Total assets acquired			219,009			181,986
Accrued expenses and other liabilities				(20,855)			(1,459)
	Total liabilities assumed			(20,855)			(1,459)
Noncontrolling interests				(7,284)			-
Non-cash acquisition related activity(1)				(54,989)			(37,703)
	Cash disbursed for acquisitions			135,881			142,824
Construction in progress additions				76,245			85,687
Less:	Capitalized interest			(3,215)			(3,771)
	Foreign currency translation			(3,044)			(2,712)
Cash disbursed for construction in progress				69,986			79,204
Capital improvements to existing properties				15,269			14,877
	Total cash invested in real property, net of cash acquired		$	221,136		$	236,905
(1) For the six months ended June 30, 2017, $54,989,000 is related to the acquisition of assets previously financed as real estate loans receivable. For the six months ended June 30, 2016, $31,014,000 is related to the acquisition of assets previously financed as real estate loans receivable and $6,630,000 is related to the acquisition of assets previously financed as an investment in an unconsolidated entity.

Seniors Housing Operating Activity

		Six Months Ended
(In thousands)		June 30, 2017			June 30, 2016
Land and land improvements			$	10,590		$	5,617
Building and improvements				69,056			128,200
Acquired lease intangibles				3,596			6,334
Receivables and other assets				296			894
	Total assets acquired(1)			83,538			141,045
Accrued expenses and other liabilities				(8,606)			(4,853)
	Total liabilities assumed			(8,606)			(4,853)
Noncontrolling interests				(647)			(549)
Non-cash acquisition related activity(2)				(31,546)			(7,659)
	Cash disbursed for acquisitions			42,739			127,984
Construction in progress additions				42,787			134,019
Less:	Capitalized interest			(3,804)			(2,011)
	Foreign currency translation			3,060			(5,344)
Cash disbursed for construction in progress				42,043			126,664
Capital improvements to existing properties				60,129			47,553
	Total cash invested in real property, net of cash acquired		$	144,911		$	302,201
(1) Excludes $400,000and $134,000 of cash acquired during the six months ended June 30, 2017 and 2016, respectively.
(2) Includes $6,349,000 related to the acquisition of assets previously financed as real estate loans receivable during the six months ended June 30, 2017.  Includes $25,197,000 and $7,659,000 for the six months ended June 30, 2017 and 2016 related to the acquisition of assets previously financed as an investments in an unconsolidated entity.

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NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

Outpatient Medical Activity

		Six Months Ended
(In thousands)		June 30, 2017			June 30, 2016
Land and land improvements			$	25,060	$	-
Buildings and improvements				62,038		32,650
Acquired lease intangibles				8,397		-
Receivables and other assets				118		-
	Total assets acquired			95,613		32,650
Secured debt				(25,824)		-
Accrued expenses and other liabilities				(2,210)		(990)
	Total liabilities assumed			(28,034)		(990)
Noncontrolling interests				(9,080)		-
Non-cash acquisition activity(1)				-		(15,013)
	Cash disbursed for acquisitions			58,499		16,647
Construction in progress additions				31,830		50,896
Less:	Capitalized interest			(1,343)		(1,561)
	Accruals(2)			6,530		(5,336)
Cash disbursed for construction in progress				37,017		43,999
Capital improvements to existing properties				17,409		25,099
	Total cash invested in real property		$	112,925	$	85,745
(1) Represents the acquisition of assets previously financed as real estate loans receivable. Please refer to Note 6 for additional information.
(2) Represents the change in non-cash consideration accruals for amounts to be paid in periods other than the period in which the construction projects converted to operations.

Construction Activity

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

			Six Months Ended
			June 30, 2017			June 30, 2016
	Development projects:
		Triple-net		$	266,650		$	-
		Seniors housing operating			3,634			-
		Outpatient medical			63,036			35,363
	Total development projects				333,320			35,363
	Expansion projects				2,798			2,879
Total construction in progress conversions				$	336,118		$	38,242

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):

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NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

		June 30, 2017		December 31, 2016
Assets:
	In place lease intangibles	$	1,278,755	$	1,252,143
	Above market tenant leases		64,408		61,700
	Below market ground leases		62,224		61,628
	Lease commissions		30,654		27,413
	Gross historical cost		1,436,041		1,402,884
	Accumulated amortization		(1,053,353)		(966,714)
	Net book value	$	382,688	$	436,170
	Weighted-average amortization period in years		15.1		13.7
Liabilities:
	Below market tenant leases	$	90,683	$	89,468
	Above market ground leases		8,540		8,107
	Gross historical cost		99,223		97,575
	Accumulated amortization		(55,749)		(52,134)
	Net book value	$	43,474	$	45,441
	Weighted-average amortization period in years		15.4		15.2

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

	Three Months Ended				Six Months Ended
	June 30,				June 30,
	2017		2016		2017		2016
Rental income related to above/below market tenant leases, net	$	267	$	210	$	571	$	290
Property operating expenses related to above/below market ground leases, net		(307)		(311)		(619)		(622)
Depreciation and amortization related to in place lease intangibles and lease commissions		(35,439)		(31,109)		(74,741)		(65,473)

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

		Assets		Liabilities
2017	$	71,356	$	3,337
2018		83,762		6,190
2019		35,095		5,731
2020		24,793		5,234
2021		20,695		4,746
Thereafter		146,987		18,236
Total	$	382,688	$	43,474

5. Dispositions, Assets Held for Sale and Discontinued Operations

We periodically sell properties for various reasons, including favorable market conditions, the exercise of tenant purchase options or reduction of concentrations (e.g., property type, operator or geography). During the six months ended June 30, 2017 and 2016, we recorded impairment charges on certain held-for-sale seniors housing operating, triple-net, and outpatient medical properties for which the carrying values exceeded the fair values less estimated costs to sell. The following is a summary of our real property disposition activity for the periods presented (in thousands):

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NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

		Six Months Ended
		June 30, 2017			June 30, 2016
Real estate dispositions:
	Triple-net		$	882,436		$	128,768
	Seniors housing operating			13,845			-
	Total dispositions			896,281			128,768
Gain (loss) on real estate dispositions, net				286,247			1,530
	Net other assets/liabilities disposed			21,254			-
Proceeds from real estate dispositions			$	1,203,782		$	130,298

Dispositions and Assets Held for Sale

     Pursuant to our adoption of ASU No. 2014-08, “Presentation of Financial Statements (Topic 205) and Property, Plant and Equipment (Topic 360): Reporting Discontinued Operations and Disclosures of Disposals of Components of an Entity”, operating results attributable to properties sold subsequent to or classified as held for sale after January 1, 2014 and which do not meet the definition of discontinued operations are no longer reclassified on our Consolidated Statements of Comprehensive Income.  The following represents the activity related to these properties for the periods presented (in thousands):

			Three Months Ended				Six Months Ended
			June 30,				June 30,
		2017		2016		2017		2016
Revenues:
	Rental income	$	4,094	$	19,990	$	21,494	$	38,552
Expenses:
	Interest expense		284		2,506		1,714		5,032
	Property operating expenses		2,020		1,338		5,098		2,700
	Provision for depreciation		475		3,071		1,121		7,022
	Total expenses		2,779		6,915		7,933		14,754
Income (loss) from real estate dispositions, net		$	1,315	$	13,075	$	13,561	$	23,798

6. Real Estate Loans Receivable

     Please see Note 2 to the financial statements included in our Annual Report on Form 10-K for the year ended December 31, 2016 for discussion of our accounting policies for real estate loans receivable and related interest income. 

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

WELLTOWER INC.

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

		Six Months Ended
		June 30, 2017						June 30, 2016
				Outpatient						Outpatient
		Triple-net		Medical		Totals		Triple-net		Medical		Totals
Advances on real estate loans receivable:
	Investments in new loans	$	10,037	$	-	$	10,037	$	8,223	$	-	$	8,223
	Draws on existing loans		40,680		-		40,680		42,803		33		42,836
	Net cash advances on real estate loans		50,717		-		50,717		51,026		33		51,059
Receipts on real estate loans receivable:
	Loan payoffs		97,039		60,500		157,539		182,613		27,303		209,916
	Principal payments on loans		798		-		798		4,454		-		4,454
	Sub-total		97,837		60,500		158,337		187,067		27,303		214,370
	Less: Non-cash activity(1)(2)		(61,337)		(60,500)		(121,837)		(31,014)		(15,013)		(46,027)
	Net cash receipts on real estate loans		36,500		-		36,500		156,053		12,290		168,343
Net cash advances (receipts) on real estate loans			14,217		-		14,217		(105,027)		(12,257)		(117,284)
Change in balance due to foreign currency translation			5,471		-		5,471		(8,504)		-		(8,504)
Net change in real estate loans receivable		$	(41,649)	$	(60,500)	$	(102,149)	$	(144,545)	$	(27,270)	$	(171,815)
(1) Triple-net and prior year outpatient medical represents acquisitions of assets previously financed as real estate loans.  Please see Note 3 for additional information.
(2) Current year outpatient medical represents a deed in lieu of foreclosure on a previously financed first mortgage property.

In 2016, we restructured two existing real estate loans in the triple-net segment with Genesis Healthcare.  The two existing loans, with a combined principal balance of $317,000,000, were scheduled to mature in 2017 and 2018.  These loans were restructured into four separate loans effective October 1, 2016.  Each loan has a five-year term, a 10% interest rate and 25 basis point annual escalator.  In 2016, we recorded a loan loss charge in the amount of $6,935,000 on one of the loans as the present value of expected future cash flows was less than the carrying value of the loan.  We expect to collect all principal amounts due under the loans and, due to the passage of time, at June 30, 2017, the allowance for loan losses related to these loans is $5,811,000.  At June 30, 2017, we had no real estate loans with outstanding balances on non-accrual status and recorded no provision for loan losses during the three months ended June 30, 2017.

		Six Months Ended
	June 30, 2017		June 30, 2016
Balance of impaired loans at end of period	$	289,473	$	-
Allowance for loan losses		5,811		-
Balance of impaired loans not reserved	$	283,662	$	-
Average impaired loans for the period	$	327,324	$	-
Interest recognized on impaired loans		16,464		-

7. Investments in Unconsolidated Entities

We participate in a number of joint ventures, which generally invest in seniors housing and health care real estate.  The results of operations for these properties have been included in our consolidated results of operations from the date of acquisition by the joint ventures and are reflected in our Consolidated Statements of Comprehensive Income as income or loss from unconsolidated entities.  The following is a summary of our investments in unconsolidated entities (dollars in thousands):

	Percentage Ownership(1)	June 30, 2017		December 31, 2016
Triple-net	10% to 49%	$	23,978	$	27,005
Seniors housing operating	10% to 50%		358,889		407,172
Outpatient medical	43%		42,622		22,961
Total		$	425,489	$	457,138
(1) Excludes ownership of in-substance real estate.

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NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

     During the three months ended June 30, 2017, we increased our ownership in the Sunrise Senior Living, Inc. management company from 24% to 34%. At June 30, 2017, the aggregate unamortized basis difference of our joint venture investments of $84,451,000 is primarily attributable to the difference between the amount for which we purchase our interest in the entity, including transaction costs, and the historical carrying value of the net assets of the entity.  This difference is being amortized over the remaining useful life of the related properties and included in the reported amount of income from unconsolidated entities.

8. Credit Concentration

     We use consolidated net operating income (“NOI”) as our credit concentration metric.  See Note 17 for additional information and reconciliation. The following table summarizes certain information about our credit concentration for the six months ended June 30, 2017, excluding our share of NOI in unconsolidated entities (dollars in thousands):

		Number of	Total		Percent of
Concentration by relationship:(1)		Properties	NOI		NOI(2)
	Genesis Healthcare	86	$	98,225	9%
	Sunrise Senior Living(3)	153		155,331	14%
	Brookdale Senior Living	137		75,862	7%
	Revera(3)	98		75,937	7%
	Benchmark Senior Living	48		48,095	4%
	Remaining portfolio	752		655,426	59%
	Totals	1,274	$	1,108,876	100%
(1) Genesis Healthcare is in our triple-net segment.  Sunrise Senior Living and Revera are in our seniors housing operating segment.  Benchmark Senior Living and Brookdale Senior Living are in both our triple-net and seniors housing operating segments.
(2) NOI with our top five relationships comprised 45% of total NOI for the year ending December 31, 2016.
(3) Revera owns a controlling interest in Sunrise Senior Living.

9. Borrowings Under Credit Facilities and Related Items

At June 30, 2017, we had a primary unsecured credit facility with a consortium of 29 banks that includes a $3,000,000,000 unsecured revolving credit facility, a $500,000,000 unsecured term credit facility and a $250,000,000 Canadian-denominated unsecured term credit facility.  We have an option, through an accordion feature, to upsize the unsecured revolving credit facility and the $500,000,000 unsecured term credit facility by up to an additional $1,000,000,000, in the aggregate, and the $250,000,000 Canadian-denominated unsecured term credit facility by up to an additional $250,000,000.  The primary unsecured credit facility also allows us to borrow up to $1,000,000,000 in alternate currencies (none outstanding at June 30, 2017).  Borrowings under the unsecured revolving credit facility are subject to interest payable at the applicable margin over LIBOR interest rate (2.12% at June 30, 2017). The applicable margin is based on our debt ratings and was 0.90% at June 30, 2017.  In addition, we pay a facility fee quarterly to each bank based on the bank’s commitment amount.  The facility fee depends on our debt ratings and was 0.15% at June 30, 2017.  The term credit facilities mature on May 13, 2021. The revolving credit facility is scheduled to mature on May 13, 2020 and can be extended for two successive terms of six months each at our option.

     The following information relates to aggregate borrowings under the primary unsecured revolving credit facility for the periods presented (dollars in thousands):

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WELLTOWER INC.

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

		Three Months Ended June 30,				Six Months Ended June 30,
		2017		2016		2017		2016
Balance outstanding at quarter end(1)		$	385,000	$	745,000	$	385,000	$	745,000
Maximum amount outstanding at any month end		$	640,000	$	745,000	$	1,010,000	$	945,000
Average amount outstanding (total of daily
	principal balances divided by days in period)	$	561,626	$	623,077	$	678,343	$	647,060
Weighted average interest rate (actual interest
	expense divided by average borrowings outstanding)		1.94%		1.26%		1.87%		1.28%
(1) As of June 30, 2017, letters of credit in the aggregate amount of $32,456,000 have been issued, which reduces the borrowing capacity on the unsecured revolving credit facility.

10. Senior Unsecured Notes and Secured Debt

     We may repurchase, redeem or refinance 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 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 June 30, 2017, the annual principal payments due on these debt obligations were as follows (in thousands):

	Senior		Secured
	Unsecured Notes(1,2)		Debt (1,3)		Totals
2017	$	-	$	173,105	$	173,105
2018		450,000		405,834		855,834
2019		605,000		480,977		1,085,977
2020(4)		681,089		156,585		837,674
2021(5,6)		1,142,574		214,352		1,356,926
Thereafter(7,8,9,10)		5,464,476		1,243,836		6,708,312
Totals	$	8,343,139	$	2,674,689	$	11,017,828
(1) Amounts represent principal amounts due and do not include unamortized premiums/discounts, debt issuance costs, or other fair value adjustments as reflected on the balance sheet.
(2) Annual interest rates range from 1.8% to 6.5%.
(3) Annual interest rates range from 1.42% to 7.98%.  Carrying value of the properties securing the debt totaled $5,624,262,000 at June 30, 2017.
(4) In November 2015, one of our wholly-owned subsidiaries issued and we guaranteed $300,000,000 of Canadian-denominated 3.35% senior unsecured notes due 2020 (approximately $231,089,000 based on the Canadian/U.S. Dollar exchange rate on June 30, 2017).
(5) On May 13, 2016, we refinanced the funding on a $250,000,000 Canadian-denominated unsecured term credit facility (approximately $192,574,000 based on the Canadian/U.S. Dollar exchange rate on June 30, 2017).  The loan matures on May 13, 2021 and bears interest at the Canadian Dealer Offered Rate plus 95 basis points (1.79% at June 30, 2017).
(6) On May 13, 2016, we refinanced the funding on a $500,000,000 unsecured term credit facility.  The loan matures on May 13, 2021 and bears interest at LIBOR plus 95 basis points (2.08% at June 30, 2017).
(7) On November 20, 2013, we completed the sale of £550,000,000 (approximately $714,725,000 based on the Sterling/U.S. Dollar exchange rate in effect on June 30, 2017) of 4.8% senior unsecured notes due 2028.
(8) On November 25, 2014, we completed the sale of £500,000,000 (approximately $649,750,000 based on the Sterling/U.S. Dollar exchange rate in effect on June 30, 2017) of 4.5% senior unsecured notes due 2034.
(9) In May 2015, we issued $750,000,000 of 4.0% senior unsecured notes due 2025.  In October 2015, we issued an additional $500,000,000 of these notes under a re-opening of the offer.
(10) In March 2016, we issued $700,000,000 of 4.25% senior unsecured notes due 2026.

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

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WELLTOWER INC.

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

	Six Months Ended
	June 30, 2017			June 30, 2016
			Weighted Avg.			Weighted Avg.
	Amount		Interest Rate	Amount		Interest Rate
Beginning balance	$	8,260,038	4.245%	$	8,645,758	4.237%
Debt issued		-	0.000%		705,000	4.228%
Debt extinguished		-	0.000%		(400,000)	3.625%
Foreign currency		83,101	4.320%		(133,234)	4.417%
Ending balance	$	8,343,139	4.276%	$	8,817,524	4.263%

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

	Six Months Ended
		June 30, 2017		June 30, 2016
			Weighted Avg.			Weighted Avg.
	Amount		Interest Rate	Amount		Interest Rate
Beginning balance	$	3,465,066	4.094%	$	3,478,207	4.440%
Debt issued		161,799	2.331%		161,992	3.051%
Debt assumed		23,094	6.670%		-	0.000%
Debt extinguished		(987,923)	5.370%		(243,314)	4.874%
Principal payments		(32,206)	4.378%		(37,737)	4.579%
Foreign currency		44,859	3.116%		62,118	3.652%
Ending balance	$	2,674,689	3.669%	$	3,421,266	4.328%

     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 June 30, 2017, 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 may elect to manage this risk through the use of forward contracts and issuing debt in foreign currencies.

 Interest Rate Swap Contracts and Foreign Currency Forward Contracts Designated as Cash Flow Hedges

     For instruments that are designated and qualify as a cash flow hedge, the effective portion of the gain or loss on the derivative is reported as a component of other comprehensive income (“OCI”), and reclassified into earnings in the same period or periods, during which the hedged transaction affects earnings.  Gains and losses on the derivative representing either hedge ineffectiveness or hedge components excluded from the assessment of effectiveness are recognized in earnings.  Approximately $2,671,000 of gains, which are included in accumulated other comprehensive income (“AOCI”), are expected to be reclassified into earnings in the next 12 months.

Foreign Currency Hedges

     For instruments that are designated and qualify as net investment hedges, the variability in the foreign currency to U.S. Dollar of the instrument is recorded as a cumulative translation adjustment component of OCI.  During the six months ended June 30, 2017 and 2016, we settled certain net investment hedges generating cash proceeds of $19,665,000 and $56,842,000, respectively.  The balance of the cumulative translation adjustment will be reclassified to earnings when the hedged investment is sold or substantially liquidated. 

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NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

     The following presents the notional amount of derivatives and other financial instruments as of the dates indicated (in thousands):

		June 30, 2017		December 31, 2016
Derivatives designated as net investment hedges:
Denominated in Canadian Dollars	$	875,000	$	900,000
Denominated in Pounds Sterling	£	550,000	£	550,000
Financial instruments designated as net investment hedges:
Denominated in Canadian Dollars	$	250,000	$	250,000
Denominated in Pounds Sterling	£	1,050,000	£	1,050,000
Derivatives designated as cash flow hedges:
Denominated in U.S. Dollars	$	-	$	57,000
Denominated in Canadian Dollars	$	54,000	$	54,000
Denominated in Pounds Sterling	£	54,000	£	48,000
Derivative instruments not designated:
Denominated in Canadian Dollars	$	37,000	$	37,000

The following presents the impact of derivative instruments on the Consolidated Statements of Comprehensive Income for the periods presented (in thousands):

		Three Months Ended				Six Months Ended
		June 30,				June 30,
	Location		2017		2016		2017		2016
Gain (loss) on interest rate swaps reclassified from AOCI into income (effective portion)	Interest expense	$	-	$	(477)	$	-	$	(960)
Gain (loss) on forward exchange contracts recognized in income	Interest expense		1,732		2,697		4,189		1,369
Gain (loss) on foreign exchange contracts and term loans designated as net investment hedge recognized in OCI	OCI		(97,539)		178,575		(141,880)		175,836

12. Commitments and Contingencies

     At June 30, 2017, we had 14 outstanding letter of credit obligations totaling $170,131,000 and expiring between 2017 and 2024.  At June 30, 2017, we had outstanding construction in progress of $321,655,000 and were committed to providing additional funds of approximately $354,853,000 to complete construction.  At June 30, 2017, we had contingent purchase obligations totaling $13,170,000.  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 June 30, 2017, we had operating lease obligations of $1,078,526,000 relating to certain ground leases and company office space and capital lease obligations of $91,471,000 relating primarily to certain investment properties. Regarding 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 June 30, 2017, aggregate future minimum rentals to be received under these noncancelable subleases totaled $72,906,000.

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NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

13. Stockholders’ Equity

     The following is a summary of our stockholders’ equity capital accounts as of the dates indicated:

	June 30, 2017	December 31, 2016
Preferred Stock:
Authorized shares	50,000,000	50,000,000
Issued shares	14,375,000	25,875,000
Outstanding shares	14,375,000	25,875,000
Common Stock, $1.00 par value:
Authorized shares	700,000,000	700,000,000
Issued shares	369,966,425	363,576,924
Outstanding shares	368,878,042	362,602,173

Preferred Stock. The following is a summary of our preferred stock activity during the periods indicated:

	Six Months Ended
	June 30, 2017		June 30, 2016
		Weighted Avg.		Weighted Avg.
	Shares	Dividend Rate	Shares	Dividend Rate
Beginning balance	25,875,000	6.500%	25,875,000	6.500%
Shares redeemed	(11,500,000)	6.500%	-	0.000%
Ending balance	14,375,000	6.500%	25,875,000	6.500%

     During the six months ended June 30, 2017, we recognized a charge of $9,769,000 in connection with the redemption of the Series J preferred stock.

Common Stock. The following is a summary of our common stock issuances during the six months ended June 30, 2017 and 2016 (dollars in thousands, except per share amounts):

	Shares Issued		Average Price		Gross Proceeds		Net Proceeds
2016 Dividend reinvestment plan issuances	1,971,758	$	64.65	$	127,470	$	127,470
2016 Option exercises	37,409		48.73		1,823		1,823
2016 Equity shelf program issuances	443,096		67.12		30,192		29,739
2016 Stock incentive plans, net of forfeitures	460,047				-		-
2016 Totals	2,912,310			$	159,485	$	159,032
2017 Dividend reinvestment plan issuances	2,836,216	$	70.55	$	200,097	$	199,757
2017 Option exercises	202,190		50.88		10,288		10,288
2017 Equity shelf program issuances	2,986,574		72.30		215,917		214,406
2017 Redemption of equity membership units	91,180				-		-
2017 Stock incentive plans, net of forfeitures	159,709				-		-
2017 Totals	6,275,869			$	426,302	$	424,451

     Dividends.  The increase in dividends is primarily attributable to increases in our common shares outstanding as described above and an increase in common dividends per share.  The following is a summary of our dividend payments (in thousands, except per share amounts):

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WELLTOWER INC.

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

	Six Months Ended
	June 30, 2017				June 30, 2016
	Per Share		Amount		Per Share		Amount
Common Stock	$	1.7400	$	634,296	$	1.7200	$	613,163
Series I Preferred Stock		1.6250		23,360		1.6250		23,359
Series J Preferred Stock		0.2347		2,699		0.8126		9,344
Totals			$	660,355			$	645,866

     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		Available for Sale Securities		Actuarial Losses		Cash Flow Hedges		Total
Balance at December 31, 2016	$	(173,496)	$	5,120	$	(1,153)	$	(2)	$	(169,531)
Other comprehensive income before reclassification adjustments		22,384		(16,477)		-		-		5,907
Net current-period other comprehensive income		22,384		(16,477)		-		-		5,907
Balance at June 30, 2017	$	(151,112)	$	(11,357)	$	(1,153)	$	(2)	$	(163,624)
Balance at December 31, 2015	$	(85,484)	$	-	$	(1,343)	$	(1,416)	$	(88,243)
Other comprehensive income before reclassification adjustments		(61,207)		(11,160)		2		10		(72,355)
Reclassification amount to net income		-		-		-		960 (1)		960
Net current-period other comprehensive income		(61,207)		(11,160)		2		970		(71,395)
Balance at June 30, 2016	$	(146,691)	$	(11,160)	$	(1,341)	$	(446)	$	(159,638)
(1) Please see Note 11 for additional information.

14. Stock Incentive Plans

     Our 2016 Long-Term Incentive Plan (“2016 Plan”) authorizes up to 10,000,000 shares of common stock to be issued at the discretion of the Compensation Committee of the Board of Directors. Our non-employee directors, officers and key employees are eligible to participate in the 2016 Plan. The 2016 Plan allows for the issuance of, among other things, stock options, stock appreciation rights, restricted stock, deferred stock units and dividend equivalent rights. Vesting periods for options, deferred stock units and restricted shares generally range from three to five years. Options expire ten years from the date of grant.  Stock-based compensation expense totaled $4,763,000 and $9,669,000 for the three and six months ended June 30, 2017, respectively, and $7,031,000 and $15,217,000 for the same periods in 2016.

15. Earnings Per Share

     The following table sets forth the computation of basic and diluted earnings per share (in thousands, except per share data):

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WELLTOWER INC.

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

		Three Months Ended				Six Months Ended
		June 30,				June 30,
		2017		2016		2017		2016
Numerator for basic and diluted earnings
	per share - net income (loss) attributable
	to common stockholders	$	188,429	$	195,474	$	501,068	$	344,444
Denominator for basic earnings per
	share - weighted average shares		366,524		356,646		364,551		355,879
Effect of dilutive securities:
	Employee stock options		50		129		60		115
	Non-vested restricted shares		479		465		438		359
	Redeemable shares		1,096		1,651		1,374		1,136
Dilutive potential common shares			1,625		2,245		1,872		1,610
Denominator for diluted earnings per
	share - adjusted weighted average shares		368,149		358,891		366,423		357,489
Basic earnings per share		$	0.51	$	0.55	$	1.37	$	0.97
Diluted earnings per share		$	0.51	$	0.54	$	1.37	$	0.96

The Series I Cumulative Convertible Perpetual Preferred Stock was not included in the calculations as the effect of conversions into common stock was anti-dilutive.

16. Disclosure about Fair Value of Financial Instruments

U.S. GAAP provides authoritative guidance for measuring and disclosing fair value measurements of assets and liabilities.  The guidance defines fair value as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date.  The guidance also establishes a fair value hierarchy which requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value.  Please see Note 2 to the financial statements included in our Annual Report on Form 10-K for the year ended December 31, 2016 for additional information.  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.

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.

     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 2 and Level 3 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 1 publicly available trading prices.

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NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

Borrowings Under Primary Unsecured Credit Facility — The carrying amount of the primary unsecured credit facility approximates fair value because the borrowings are interest rate adjustable.

Senior Unsecured Notes — The fair value of the senior unsecured notes payable was estimated based on Level 1 publicly available trading prices. The carrying amount of the variable rate senior unsecured notes approximates fair value because they are interest rate adjustable.

Secured Debt — The fair value of fixed rate secured debt is estimated using Level 2 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.

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 2 inputs by estimating the future value of the currency pair based on existing exchange rates, comprised of current spot and traded forward points, and calculating a present value of the net amount using a discount factor based on observable traded interest rates.

Redeemable OP Unitholder Interests — Our redeemable unitholder interests are recorded on the balance sheet at fair value using Level 2 inputs.  The fair value is measured using the closing price of our common stock, as units may be redeemed at the election of the holder for cash or, at our option, one share of our common stock per unit, subject to adjustment in certain circumstances.

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

		June 30, 2017				December 31, 2016
		Carrying Amount		Fair Value		Carrying Amount		Fair Value
Financial assets:
	Mortgage loans receivable	$	369,141	$	405,671	$	485,735	$	521,773
	Other real estate loans receivable		151,338		156,266		136,893		138,050
	Available-for-sale equity investments		11,422		11,422		27,899		27,899
	Cash and cash equivalents		442,284		442,284		419,378		419,378
	Foreign currency forward contracts		54,326		54,326		135,561		135,561
Financial liabilities:
	Borrowings under unsecured credit facilities	$	385,000	$	385,000	$	645,000	$	645,000
	Senior unsecured notes		8,250,940		9,088,276		8,161,619		8,879,176
	Secured debt		2,670,914		2,718,333		3,477,699		3,558,378
	Foreign currency forward contracts		10,426		10,426		4,342		4,342
Redeemable OP unitholder interests		$	111,149	$	111,149	$	110,502	$	110,502

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. The following summarizes items measured at fair value on a recurring basis (in thousands):

	Fair Value Measurements as of June 30, 2017
	Total		Level 1		Level 2		Level 3
Available-for-sale equity investments(1)	$	11,422	$	11,422	$	-	$	-
Foreign currency forward contracts, net(2)		43,900		-		43,900		-
Redeemable OP unitholder interests		111,149		-		111,149		-
Totals	$	166,471	$	11,422	$	155,049	$	-
(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

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WELLTOWER INC.

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

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. Asset impairments (if applicable, see Note 5 for impairments of real property and Note 6 for impairments of loans receivable) are also measured at fair value on a nonrecurring basis. 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 resides 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 three operating segments: triple-net, seniors housing operating and outpatient medical.  During the three months ended December 31, 2016, we reclassified interest expense on our foreign-denominated senior notes from the seniors housing operating segment to non-segment.  Accordingly, the segment information provided in this Note has been reclassified to conform to the current presentation for all periods presented.

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

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

     Non-segment revenue consists mainly of interest income on certain non-real estate investments and other income. Non-segment assets consist of corporate assets including cash, deferred loan expenses and corporate offices and equipment among others. Non-property specific revenues and expenses are not allocated to individual segments in determining NOI. The accounting policies of the segments are the same as those described in the summary of significant accounting policies (see Note 2 to the financial statements included in our Annual Report on Form 10-K for the year ended December 31, 2016). The results of operations for all acquisitions described in Note 3 are included in our consolidated results of operations from the acquisition dates and are components of the appropriate segments.  There are no intersegment sales or transfers. Summary information for the reportable segments (which excludes unconsolidated entities) is as follows (in thousands):

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WELLTOWER INC.

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

Three Months Ended June 30, 2017:		Triple-net		Seniors Housing Operating		Outpatient Medical		Non-segment / Corporate		Total
Rental income	$	217,889	$	-	$	137,710	$	-	$	355,599
Resident fees and services		-		677,040		-		-		677,040
Interest income		20,901		-		-		-		20,901
Other income		2,557		1,049		1,217		239		5,062
Total revenues		241,347		678,089		138,927		239		1,058,602
Property operating expenses		-		459,111		42,744		-		501,855
Consolidated net operating income		241,347		218,978		96,183		239		556,747
Interest expense		2,515		15,403		2,122		96,191		116,231
Loss (gain) on derivatives, net		736		-		-		-		736
Depreciation and amortization		60,171		117,198		47,478		-		224,847
General and administrative		-		-		-		32,632		32,632
Transaction costs
Loss (gain) on extinguishment of debt, net		-		2,524		2,991		-		5,515
Impairment of assets		4,846		8,785		-		-		13,631
Other expenses		2,181		1,165		1,310		1,683		6,339
Income (loss) from continuing operations before income taxes and income from unconsolidated entities		170,898		73,903		42,282		(130,267)		156,816
Income tax (expense) benefit		(1,471)		10,247		(351)		23		8,448
Income (loss) from unconsolidated entities		3,867		(8,449)		604		-		(3,978)
Income (loss) from continuing operations		173,294		75,701		42,535		(130,244)		161,286
Gain (loss) on real estate dispositions, net		42,155		-		-		-		42,155
Net income (loss)	$	215,449	$	75,701	$	42,535	$	(130,244)	$	203,441
Total assets	$	9,990,063	$	12,753,128	$	5,008,067	$	224,528	$	27,975,786

Three Months Ended June 30, 2016:		Triple-net		Seniors Housing Operating		Outpatient Medical		Non-segment / Corporate		Total
Rental income	$	287,134	$	-	$	135,494	$	-	$	422,628
Resident fees and services		-		615,220		-		-		615,220
Interest income		21,971		1,042		994		-		24,007
Other income		1,206		8,989		4,153		454		14,802
Total revenues		310,311		625,251		140,641		454		1,076,657
Property operating expenses		-		417,996		40,836		-		458,832
Consolidated net operating income		310,311		207,255		99,805		454		617,825
Interest expense		5,754		20,274		5,402		100,896		132,326
Depreciation and amortization		75,809		102,312		48,448		-		226,569
General and administrative		-		-		-		39,914		39,914
Transaction costs		1,291		3,247		619		-		5,157
Loss (gain) on extinguishment of debt, net		121		(88)		-		-		33
Other expenses		-		-		-		3,161		3,161
Income (loss) from continuing operations before income taxes and income from unconsolidated entities		227,336		81,510		45,336		(143,517)		210,665
Income tax (expense) benefit		(213)		2,023		(248)		(1,049)		513
Income (loss) from unconsolidated entities		3,018		(4,887)		(90)		-		(1,959)
Income (loss) from continuing operations		230,141		78,646		44,998		(144,566)		209,219
Gain (loss) on real estate dispositions, net		1,530		-		-		-		1,530
Net income (loss)	$	231,671	$	78,646	$	44,998	$	(144,566)	$	210,749

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WELLTOWER INC.

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

Six Months Ended June 30, 2017:		Triple-net		Seniors Housing Operating		Outpatient Medical		Non-segment / Corporate		Total
Rental income	$	445,180	$	-	$	277,561	$	-	$	722,741
Resident fees and services		-		1,347,377		-		-		1,347,377
Interest income		41,580		69		-		-		41,649
Other income		4,321		2,510		1,830		472		9,133
Total revenues		491,081		1,349,956		279,391		472		2,120,900
Property operating expenses		-		921,536		90,488		-		1,012,024
Consolidated net operating income		491,081		428,420		188,903		472		1,108,876
Interest expense		8,025		31,219		4,413		191,170		234,827
Loss (gain) on derivatives, net		1,960		-		-		-		1,960
Depreciation and amortization		119,781		236,935		96,408		-		453,124
General and administrative		-		-		-		63,733		63,733
Loss (gain) on extinguishment of debt, net		29,083		3,414		4,373		-		36,870
Impairment of assets		4,846		14,191		5,625		-		24,662
Other expenses		7,190		2,943		1,671		6,210		18,014
Income (loss) from continuing operations before income taxes and income from unconsolidated entities		320,196		139,718		76,413		(260,641)		275,686
Income tax (expense) benefit		(2,271)		9,160		(686)		-		6,203
Income (loss) from unconsolidated entities		9,505		(37,640)		1,051		-		(27,084)
Income (loss) from continuing operations		327,430		111,238		76,778		(260,641)		254,805
Gain (loss) on real estate dispositions, net		273,236		13,011		-		-		286,247
Net income (loss)	$	600,666	$	124,249	$	76,778	$	(260,641)	$	541,052

Six Months Ended June 30, 2016:		Triple-net		Seniors Housing Operating		Outpatient Medical		Non-segment / Corporate		Total
Rental income	$	570,958	$	-	$	267,332	$	-	$	838,290
Resident fees and services		-		1,217,369		-		-		1,217,369
Interest income		44,824		2,073		2,298		-		49,195
Other income		2,695		11,178		4,466		512		18,851
Total revenues		618,477		1,230,620		274,096		512		2,123,705
Property operating expenses		-		826,890		81,578		-		908,468
Consolidated net operating income		618,477		403,730		192,518		512		1,215,237
Interest expense		12,117		40,797		11,146		201,225		265,285
Depreciation and amortization		155,609		204,144		95,512		-		455,265
General and administrative		-		-		-		85,606		85,606
Transaction costs		4,143		7,180		2,042		-		13,365
Loss (gain) on extinguishment of debt, net		97		(88)		-		-		9
Impairment of assets		14,314		-		-		-		14,314
Other expenses		-		-		-		3,161		3,161
Income (loss) from continuing operations before income taxes and income from unconsolidated entities		432,197		151,697		83,818		(289,480)		378,232
Income tax expense		(528)		4,789		(476)		(1,546)		2,239
(Loss) income from unconsolidated entities		6,100		(11,822)		(56)		-		(5,778)
Income (loss) from continuing operations		437,769		144,664		83,286		(291,026)		374,693
Gain (loss) on real estate dispositions, net		1,530		-		-		-		1,530
Net income (loss)	$	439,299	$	144,664	$	83,286	$	(291,026)	$	376,223

25

WELLTOWER INC.

NOTES TO UNAUDITED 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):

		Three Months Ended						Six Months Ended
		June 30, 2017			June 30, 2016			June 30, 2017			June 30, 2016
Revenues:		Amount	%		Amount	%		Amount	%		Amount	%
United States	$	851,943	80.5%	$	862,115	80.1%	$	1,710,611	80.7%	$	1,704,470	80.3%
United Kingdom		99,747	9.4%		102,593	9.5%		193,590	9.1%		203,148	9.5%
Canada		106,912	10.1%		111,949	10.4%		216,699	10.2%		216,087	10.2%
Total	$	1,058,602	100.0%	$	1,076,657	100.0%	$	2,120,900	100.0%	$	2,123,705	100.0%
		As of
		June 30, 2017			December 31, 2016
Assets:		Amount	%		Amount	%
United States	$	22,323,973	79.8%	$	23,572,459	81.7%
United Kingdom		3,064,196	11.0%		2,782,489	9.6%
Canada		2,587,617	9.2%		2,510,236	8.7%
Total	$	27,975,786	100.0%	$	28,865,184	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 undistributed 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.

Under the provisions of the REIT Investment Diversification and Empowerment Act of 2007 (“RIDEA”), for taxable years beginning after July 30, 2008, a REIT may lease “qualified health care properties” on an arm’s-length basis to a taxable REIT subsidiary (“TRS”) if the property is operated on behalf of such TRS 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 unaudited consolidated financial statements and are subject to federal and state income taxes as the operations of such facilities are included in TRS entities. Certain net operating loss carryforwards could be utilized to offset taxable income in future years.

     Income taxes reflected in the financial statements primarily represents U.S. federal and state and local income taxes as well as non-U.S. income based or withholding taxes on certain investments located in jurisdictions outside the U.S.  The provision for income taxes for the three and six months ended June 30, 2017 and 2016, was primarily due to operating income or losses, offset by certain discrete items at our TRS entities.  In 2014, we established certain wholly-owned direct and indirect subsidiaries in Luxembourg and Jersey and transferred interests in certain foreign investments into this holding company structure.  The structure includes a property holding company that is tax resident in the United Kingdom.  No material adverse current tax consequences in Luxembourg, Jersey or the United Kingdom resulted from the creation of this holding company structure and all of the subsidiary entities in the structure are treated as disregarded entities of the company for U.S. federal income tax purposes.  The company reflects current and deferred tax liabilities for any such withholding taxes incurred as a result of this holding company structure in its consolidated financial statements. Generally, given current statutes of limitations, we are subject to audit by the Internal Revenue Service (“IRS”) for the year ended December 31, 2013 and subsequent years and by state taxing authorities for the year ended December 31, 2012 and subsequent

26

WELLTOWER INC.

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

years.  The company and its subsidiaries are also subject to audit by the Canada Revenue Agency and provincial authorities generally for periods subsequent to our initial investments in Canada in May 2012, by HM Revenue & Customs for periods subsequent to our initial investments in the United Kingdom in August 2012 and by Luxembourg taxing authorities generally for periods subsequent to our establishment of certain Luxembourg-based subsidiaries during 2014.

19. Variable Interest Entities

     We have entered into joint ventures to own certain seniors housing and outpatient medical assets which are deemed to be variable interest entities (“VIE”).   We have concluded that we are the primary beneficiary of these VIE’s based on a combination of operational control of the joint venture and the rights to receive residual returns or the obligation to absorb losses arising from the joint ventures.  Except for capital contributions associated with the initial joint venture formations, the joint ventures have been and are expected to be funded from the ongoing operations of the underlying properties.  Accordingly, such joint ventures have been consolidated, and the table below summarizes the balance sheets of consolidated VIE’s in the aggregate (in thousands):

		June 30, 2017		December 31, 2016
Assets
	Net real property owned	$	1,019,154	$	989,596
	Cash and cash equivalents		10,180		10,501
	Receivables and other assets		16,284		12,102
	Total assets(1)	$	1,045,618	$	1,012,199
Liabilities and equity
	Secured debt	$	473,781	$	450,255
	Accrued expenses and other liabilities		15,396		13,803
	Redeemable noncontrolling interests		180,690		185,556
	Total equity		375,751		362,585
	Total liabilities and equity	$	1,045,618	$	1,012,199
(1) Note that assets of the consolidated variable interest entities can only be used to settle obligations relating to such variable interest entities.  Liabilities of the consolidated variable interest entities represent claims against the specific assets of the variable interest entities.

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Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

EXECUTIVE SUMMARY
Company Overview      Business Strategy      Key Transactions in 2017      Key Performance Indicators, Trends and Uncertainties      Corporate Governance	29 29 30 31 33
LIQUIDITY AND CAPITAL RESOURCES
Sources and Uses of Cash      Off-Balance Sheet Arrangements      Contractual Obligations      Capital Structure	33 34 35 35
RESULTS OF OPERATIONS
Summary      Triple-net      Seniors Housing Operating      Outpatient Medical      Non-Segment/Corporate	36 36 38 40 43
OTHER
Cautionary Statement Regarding Forward-Looking Statements	51

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Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

     The following discussion and analysis is based primarily on the unaudited consolidated financial statements of Welltower Inc. for the periods presented and should be read together with the notes thereto contained in this Quarterly Report on Form 10-Q. Other important factors are identified in our Annual Report on Form 10-K for the year ended December 31, 2016, including factors identified under the headings “Business,” “Risk Factors,” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations.”  References herein to “we,” “us,” “our,” or the “company” refer to Welltower Inc. and its subsidiaries unless specifically noted otherwise.

Executive Summary

Company Overview

Welltower Inc. (NYSE:HCN), an S&P 500 company headquartered in Toledo, Ohio, is driving the transformation of health care infrastructure. The company invests with leading seniors housing operators, post-acute providers and health systems to fund the real estate and infrastructure needed to scale innovative care delivery models and improve people’s wellness and overall health care experience.  Welltower™, a real estate investment trust (“REIT”), owns properties concentrated in major, high-growth markets in the United States, Canada and the United Kingdom, consisting of seniors housing and post-acute communities and outpatient medical properties. Our capital programs, when combined with comprehensive planning, development and property management services, make us a single-source solution for acquiring, planning, developing, managing, repositioning and monetizing real estate assets. 

     The following table summarizes our consolidated portfolio for the three months ended June 30, 2017 (dollars in thousands):

			Percentage of	Number of
Type of Property	NOI(1)		NOI	Properties
Triple-net	$	241,347	43.4%	583
Seniors housing operating		218,978	39.3%	425
Outpatient medical		96,183	17.3%	266
Totals	$	556,508	100.0%	1,274
(1) Represents consolidated net operating income and excludes our share of investments in unconsolidated entities. Entities in which we have a joint venture with a minority partner are shown at 100% of the joint venture amount. See Non-GAAP Financial Measures for additional information and reconciliation.

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 from continuing operations and portfolio growth. To meet these objectives, we invest across the full spectrum of seniors housing and health care real estate and diversify our investment portfolio by property type, relationship and geographic location.

     Substantially all of our revenues are derived from operating lease rentals, resident fees and services, and interest earned on outstanding loans receivable. These items represent our primary sources of liquidity to fund distributions and depend upon the continued ability of our obligors to make contractual rent and interest payments to us and the profitability of our operating properties. To the extent that our customers/partners experience operating difficulties and become unable to generate sufficient cash to make payments to us, there could be a material adverse impact on our consolidated results of operations, liquidity and/or financial condition. To mitigate this risk, we monitor our investments through a variety of methods determined by the type of property. Our proactive and comprehensive asset management process for seniors housing properties generally includes review of monthly financial statements and other operating data for each property, review of obligor/partner creditworthiness, property inspections, and review of covenant compliance relating to licensure, real estate taxes, letters of credit and other collateral. Our internal property management division actively manages and monitors the outpatient medical portfolio with a comprehensive process including tenant relations, lease expirations, the mix of health service providers, hospital/health system relationships, property performance, capital improvement needs, and market conditions among other things. 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

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Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

typically structured as master leases and loans are generally cross-defaulted and cross-collateralized with other real estate loans, operating leases or agreements between us and the obligor and its affiliates.

     For the six months ended June 30, 2017, rental income and resident fees and services represented 34% and 64%, respectively, of total revenues.  Substantially all of our operating leases are designed with escalating rent structures. Leases with fixed annual rental escalators are generally recognized on a straight-line basis over the initial lease period, subject to a collectability assessment. Rental income related to leases with contingent rental escalators is generally recorded based on the contractual cash rental payments due for the period. Our yield on loans receivable depends upon a number of factors, including the stated interest rate, the average principal amount outstanding during the term of the loan and any interest rate adjustments.

     Our primary sources of cash include rent and interest receipts, resident fees and services, borrowings under our primary unsecured credit facility, public issuances of debt and equity securities, proceeds from investment dispositions and principal payments on loans receivable. Our primary uses of cash include dividend distributions, debt service payments (including principal and interest), real property investments (including acquisitions, capital expenditures, construction advances and transaction costs), loan advances, property operating expenses and general and administrative expenses.  Depending upon the availability and cost of external capital, we believe our liquidity is sufficient to fund these uses of cash.

     We also continuously evaluate opportunities to finance future investments.  New investments are generally funded from temporary borrowings under our primary unsecured credit facility, internally generated cash and the proceeds from investment dispositions. Our investments generate cash from net operating income and principal payments on loans receivable. Permanent financing for future investments, which replaces funds drawn under our primary unsecured credit facility, has historically been provided through a combination of the issuance of public debt and equity securities and the incurrence or assumption of secured debt.

     Depending upon market conditions, we believe that new investments will be available in the future with spreads over our cost of capital that will generate appropriate returns to our stockholders. It is also possible that investment dispositions may occur in the future. To the extent that investment dispositions exceed new investments, our revenues and cash flows from operations could be adversely affected. We expect to reinvest the proceeds from any investment dispositions in new investments. To the extent that new investment requirements exceed our available cash on-hand, we expect to borrow under our primary unsecured credit facility. At June 30, 2017, we had $442,284,000 of cash and cash equivalents, $45,357,000 of restricted cash and $2,582,544,000 of available borrowing capacity under our primary unsecured credit facility.

Key Transactions in 2017

Capital.   During the six months ended June 30, 2017, we extinguished $987,923,000 of secured debt at a blended average interest rate of 5.4%.  In addition, we redeemed all 11,500,000 shares of our 6.5% Series J Cumulative Redeemable Preferred Stock.  During the six months ended June 30, 2017, we raised $416,014,000 through our dividend reinvestment program and our Equity Shelf Program (as defined below).

Investments.  The following summarizes our acquisitions and joint venture investments completed during the six months ended June 30, 2017 (dollars in thousands):

	Properties		Investment Amount(1)	Capitalization Rates(2)		Book Amount(3)
Triple-net	6	$	109,375	6.4%	$	219,009
Seniors housing operating	1		34,200	6.1%		83,538
Outpatient medical	4		71,395	6.7%		95,613
Totals	11	$	214,970	6.4%	$	398,160
(1) Represents stated pro rata purchase price including cash and any assumed debt but excludes fair value adjustments pursuant to U.S. GAAP.
(2) Represents annualized contractual or projected income to be received in cash divided by investment amounts.
(3) Represents amounts recorded on our books including fair value adjustments pursuant to U.S. GAAP.  See Note 3 to our unaudited consolidated financial statements for additional information.

Dispositions.  The following summarizes property dispositions made during the six months ended June 30, 2017 (dollars in thousands):

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Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

	Properties		Proceeds(1)	Capitalization Rates(2)		Book Amount(3)
Triple-net	54	$	1,144,951	6.8%	$	882,436
Seniors housing operating	1		27,519	4.8%		13,845
Totals	55	$	1,172,470	6.8%	$	896,281
(1) Represents pro rata proceeds received upon disposition including any seller financing.
(2) Represents annualized contractual income that was being received in cash at date of disposition divided by disposition proceeds.
(3) Represents carrying value of assets at time of disposition. See Note 5 to our unaudited consolidated financial statements for additional information.

Dividends. Our Board of Directors increased the annual cash dividend to $3.48 per common share ($0.87 per share quarterly), as compared to $3.44 per common share for 2016, beginning in February 2017.  The dividend declared for the quarter ended June 30, 2017 represents the 185^th 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, concentration risk and credit strength. 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 and net income attributable to common stockholders (“NICS”) per the Statement of Comprehensive Income are the most appropriate earnings measures. Other useful supplemental measures of our operating performance include funds from operations attributable to common stockholders (“FFO”), consolidated net operating income (“NOI”) and same store NOI (“SSNOI”); 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. These earnings measures (and FFO per share amounts) are widely used by investors and analysts in the valuation, comparison and investment recommendations of companies. The following table reflects the recent historical trends of our operating performance measures for the periods presented (in thousands, except per share amounts):

			Three Months Ended
		March 31,		June 30,		September 30,		December 31,		March 31,		June 30,
		2016		2016		2016		2016			2017		2017
Net income (loss) attributable to common stockholders		$	148,969	$	195,474	$	334,910	$	333,042	$	312,639	$	188,429
Funds from operations attributable to common stockholders			391,264		416,974		401,870		372,829		306,231		384,390
Consolidated net operating income			597,414		617,825		605,453		583,486		552,129		556,747
Same store net operating income			468,592		482,887		470,668		468,537		467,024		478,806
Per share data (fully diluted):
	Net income (loss) attributable to common stockholders	$	0.42	$	0.54	$	0.93	$	0.91	$	0.86	$	0.51
	Funds from operations attributable to common stockholders		1.10		1.16		1.11		1.02		0.84		1.04

     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, net of cash and IRC section 1031 deposits. 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 a capital structure consistent with our current profile. The coverage ratios are based on earnings before interest, taxes, depreciation and amortization (“EBITDA”). Please refer to the section entitled “Non-GAAP Financial Measures” for further discussion and reconciliations of these 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:

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Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

		Three Months Ended
		March, 31	June 30,	September 30,	December 31,	March 31,	June 30,
		2016	2016	2016	2016	2017	2017
Net debt to book capitalization ratio		45%	45%	45%	43%	42%	41%
Net debt to undepreciated book
	capitalization ratio	40%	39%	39%	37%	36%	35%
Net debt to market capitalization ratio		32%	30%	31%	31%	29%	27%
Interest coverage ratio		3.85x	4.21x	5.24x	5.26x	5.67x	4.60x
Fixed charge coverage ratio		3.06x	3.34x	4.17x	4.15x	4.53x	3.72x

Concentration Risk. We evaluate our concentration risk in terms of NOI by property mix, relationship mix and geographic mix. Concentration risk is a valuable measure in understanding what portion of our NOI could be at risk if certain sectors were to experience downturns.  Property mix measures the portion of our NOI that relates to our various property types. Relationship mix measures the portion of our NOI that relates to our top five relationships. Geographic mix measures the portion of our NOI that relates to our top five states (or international equivalents). The following table reflects our recent historical trends of concentration risk by NOI for the periods indicated below:

		Three Months Ended
		March 31,	June 30,	September 30,	December 31,	March 31,	June 30,
		2016	2016	2016	2016	2017	2017
Property mix:(1)
	Triple-net	52%	50%	51%	48%	45%	43%
	Seniors housing operating	32%	34%	33%	36%	38%	39%
	Outpatient medical	16%	16%	16%	16%	17%	17%
Relationship mix:(1)
	Sunrise Senior Living(2)	13%	14%	12%	13%	14%	14%
	Genesis Healthcare	17%	16%	16%	13%	9%	9%
	Revera(2)	6%	6%	6%	7%	7%	7%
	Brookdale Senior Living	7%	7%	7%	7%	7%	7%
	Benchmark Senior Living	4%	4%	4%	4%	4%	5%
	Remaining relationships	53%	53%	55%	56%	59%	58%
Geographic mix:(1)
	California	10%	10%	10%	12%	13%	14%
	United Kingdom	8%	8%	7%	7%	9%	9%
	New Jersey	8%	8%	8%	8%	7%	8%
	Canada	7%	7%	7%	8%	8%	8%
	Texas	6%	6%	7%	7%	7%	7%
	Remaining geographic areas	61%	61%	61%	58%	56%	54%
(1) Excludes our share of investments in unconsolidated entities.  Entities in which the company has a joint venture with a minority partner are shown at 100% of the joint venture amount.
(2) Revera owns a controlling interest in Sunrise Senior Living.

     Lease Expirations. The following table sets forth information regarding lease expirations for certain portions of our portfolio as of June 30, 2017 (dollars in thousands):

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Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

			Expiration Year
			2017		2018		2019		2020		2021		2022		2023		2024		2025		2026		Thereafter
Triple-net:
	Properties		-		51		-		14		12		7		4		4		61		32		412
	Base rent(1)	$	-	$	37,120	$	-	$	17,740	$	25,239	$	7,295	$	4,175	$	10,597	$	73,600	$	64,679	$	727,705
	% of base rent		0.0%		3.8%		0.0%		1.8%		2.6%		0.8%		0.4%		1.1%		7.6%		6.7%		75.2%
	Units/beds		-		3,151		-		1,225		2,289		690		317		692		4,538		3,724		42,250
	% of Units/beds		0.0%		5.4%		0.0%		2.1%		3.9%		1.2%		0.5%		1.2%		7.7%		6.3%		71.8%
Outpatient medical:
	Square feet		663,254		908,920		1,226,852		1,255,449		1,514,458		2,451,111		1,229,680		1,415,165		704,030		1,072,198		4,295,219
	Base rent(1)	$	17,180	$	24,307	$	33,244	$	34,045	$	40,604	$	53,945	$	31,140	$	40,034	$	19,980	$	27,537	$	98,753
	% of base rent		4.1%		5.8%		7.9%		8.1%		9.7%		12.8%		7.4%		9.5%		4.7%		6.5%		23.5%
	Leases		177		270		316		295		272		274		187		114		99		120		189
	% of Leases		7.7%		11.7%		13.7%		12.8%		11.8%		11.8%		8.1%		4.9%		4.3%		5.2%		8.0%
(1) The most recent monthly base rent including straight-line for leases with fixed escalators or annual cash rents for leases with contingent escalators.  Base rent does not include tenant recoveries or amortization of above and below market lease intangibles.

     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 “Cautionary Statement Regarding Forward-Looking Statements” and other sections of this Quarterly Report on Form 10-Q. 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 our Annual Report on Form 10-K for the year ended December 31, 2016, under the headings “Business,” “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” for further discussion of these risk factors.

Corporate Governance

     Maintaining investor confidence and trust is important in today’s business environment. Our Board of Directors and management are strongly committed to policies and procedures that reflect the highest level of ethical business practices. Our corporate governance guidelines provide the framework for our business operations and emphasize our commitment to increase stockholder value while meeting all applicable legal requirements. These guidelines meet the listing standards adopted by the New York Stock Exchange and are available on the Internet at www.welltower.com/investors/governance.  The information on our website is not incorporated by reference in this Quarterly Report on Form 10-Q, and our web address is included as an inactive textual reference only.

Liquidity and Capital Resources

Sources and Uses of Cash

     Our primary sources of cash include rent and interest receipts, resident fees and services, borrowings under our primary unsecured credit facility, public issuances of debt and equity securities, proceeds from investment dispositions and principal payments on loans receivable. Our primary uses of cash include dividend distributions, debt service payments (including principal and interest), real property investments (including acquisitions, capital expenditures, construction advances and transaction costs), loan advances, property operating expenses, and general and administrative expenses. These sources and uses of cash are reflected in our Consolidated Statements of Cash Flows and are discussed in further detail below.  The following is a summary of our sources and uses of cash flows (dollars in thousands):

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Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

	Six Months Ended				Change
	June 30, 2017		June 30, 2016		$		%
Cash and cash equivalents at beginning of period	$	419,378	$	360,908	$	58,470	16%
Cash provided from (used in) operating activities		844,109		855,657		(11,548)	-1%
Cash provided from (used in) investing activities		899,125		(361,435)		1,260,560	n/a
Cash provided from (used in) financing activities		(1,731,977)		(380,093)		(1,351,884)	356%
Effect of foreign currency translation		11,649		(8,452)		20,101	n/a
Cash and cash equivalents at end of period	$	442,284	$	466,585	$	(24,301)	-5%

Operating Activities. The change in net cash provided from operating activities was immaterial.  Please see “Results of Operations” for discussion of net income fluctuations. For the six months ended June 30, 2017 and 2016, cash flow provided from operations exceeded cash distributions to stockholders.

Investing Activities.  The changes in net cash used in investing activities are primarily attributable to an increase in dispositions, which are summarized above in “Key Transactions in 2017” and Notes 5 and 6 of our unaudited consolidated financial statements. The following is a summary of cash used in non-acquisition capital improvement activities (dollars in thousands):

	Six Months Ended				Change
	June 30,		June 30,
	2017		2016		$		%
New development	$	149,046	$	249,867	$	(100,821)	-40%
Recurring capital expenditures, tenant improvements and lease commissions		28,668		28,354		314	1%
Renovations, redevelopments and other capital improvements		64,479		59,175		5,304	9%
Total	$	242,193	$	337,396	$	(95,203)	-28%

    The change in new development is primarily due to the number and size of construction projects on-going during the relevant periods.  Renovations, redevelopments and other capital improvements include expenditures to maximize property value, increase net operating income, maintain a market-competitive position and/or achieve property stabilization.  Generally, these expenditures have increased as a result of acquisitions, primarily in our seniors housing operating 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/redemption of common and preferred stock and dividend payments. Please refer to Notes 9, 10 and 13 of our unaudited consolidated financial statements for additional information.

Off-Balance Sheet Arrangements

     At June 30, 2017, we had investments in unconsolidated entities with our ownership ranging from 10% to 50%. Please see Note 7 to our unaudited consolidated financial statements for additional information.  We use financial derivative instruments to hedge interest rate and foreign currency exchange rate exposure. Please see Note 11 to our unaudited consolidated financial statements for additional information.  At June 30, 2017, we had 14 outstanding letter of credit obligations. Please see Note 12 to our unaudited consolidated financial statements for additional information.

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Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

Contractual Obligations

     The following table summarizes our payment requirements under contractual obligations as of June 30, 2017 (in thousands):

	Payments Due by Period
Contractual Obligations	Total		2017		2018-2019		2020-2021		Thereafter
Unsecured revolving credit facility(1)	$	385,000	$	-	$	-	$	385,000	$	-
Senior unsecured notes and term credit facilities:(2)
U.S. Dollar senior unsecured notes		6,050,000		-		1,050,000		900,000		4,100,000
Canadian Dollar senior unsecured notes(3)		231,089		-		-		231,089		-
Pounds Sterling senior unsecured notes(3)		1,364,476		-		-		-		1,364,476
U.S. Dollar term credit facility		505,000		-		5,000		500,000		-
Canadian Dollar term credit facility(3)		192,574		-		-		192,574		-
Secured debt:(2,3)
Consolidated		2,674,689		173,105		886,811		370,937		1,243,836
Unconsolidated		747,748		15,255		161,131		52,295		519,067
Contractual interest obligations:(4)
Unsecured revolving credit facility		36,884		4,098		16,393		16,393		-
Senior unsecured notes and term loans(3)		3,356,536		276,791		694,260		584,876		1,800,609
Consolidated secured debt(3)		530,019		49,036		165,252		116,309		199,422
Unconsolidated secured debt(3)		181,975		14,472		56,754		40,299		70,450
Capital lease obligations(5)		91,471		2,366		9,012		8,346		71,747
Operating lease obligations(5)		1,078,526		8,589		34,487		33,592		1,001,858
Purchase obligations(5)		368,023		229,468		138,555		-		-
Other long-term liabilities(6)		3,441		737		2,704		-		-
Total contractual obligations	$	17,797,451	$	773,917	$	3,220,359	$	3,431,710	$	10,371,465
(1) Relates to unsecured revolving credit facility with an aggregate commitment of $3,000,000,000. See Note 9 to our unaudited consolidated financial statements for additional information.
(2) Amounts represent principal amounts due and do not reflect unamortized premiums/discounts or other fair value adjustments as reflected on the balance sheet.
(3) Based on foreign currency exchange rates in effect as of balance sheet date.
(4) Based on variable interest rates in effect as of balance sheet date.
(5) See Note 12 to our unaudited consolidated financial statements for additional information.
(6) Primarily relates to payments to be made under our Supplemental Executive Retirement Plan.

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 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 June 30, 2017, we were in compliance with all of the covenants under our debt agreements. None of our debt agreements contain provisions for acceleration which could be triggered by our debt ratings. However, under our primary unsecured credit facility, the ratings on our senior unsecured notes are used to determine the fees and interest charged.  We plan to manage the company to maintain compliance with our debt covenants and with a capital structure consistent with our current profile. Any downgrades in terms of ratings or outlook by any or all of the rating agencies could have a material adverse impact on our cost and availability of capital, which could in turn have a material adverse impact on our consolidated results of operations, liquidity and/or financial condition.

     On May 1, 2015, we filed with the Securities and Exchange Commission (1) an open-ended automatic or “universal” shelf registration statement covering an indeterminate amount of future offerings of debt securities, common stock, preferred stock, depositary shares, warrants and units and (2) a registration statement in connection with our enhanced dividend reinvestment plan (“DRIP”) under which we may issue up to 15,000,000 shares of common stock. As of July 14, 2017, 4,915,603 shares of common stock remained available for issuance under the DRIP registration statement. We have entered into separate Equity Distribution Agreements with each of Morgan Stanley & Co. LLC, Merrill Lynch, Pierce, Fenner & Smith Incorporated, Goldman, Sachs & Co., UBS Securities LLC and Wells Fargo Securities, LLC relating to the offer and sale from time to time of up to $1,000,000,000 aggregate amount of our common stock (“Equity Shelf Program”). As of July 14, 2017, we had $784,083,000 of remaining capacity

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Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

under the Equity Shelf Program. Depending upon market conditions, we anticipate issuing securities under our registration statements to invest in additional properties and to repay borrowings under our primary unsecured credit facility.

Results of Operations

Summary

Our primary sources of revenue include rent and resident fees and services. Our primary expenses include interest expense, depreciation and amortization, property operating expenses, and general and administrative expenses. We evaluate our business and make resource allocations on our three business segments: triple-net, seniors housing operating and outpatient medical. The primary performance measures for our properties are NOI and SSNOI, which are discussed below.  Please see Non-GAAP Financial Measures for additional information and reconciliations. The following is a summary of our results of operations (dollars in thousands, except per share amounts):

	Three Months Ended				Change			Six Months Ended				Change
	June 30,		June 30,					June 30,		June 30,
	2017		2016		Amount		%	2017		2016		Amount		%
Net income (loss) attributable to common stockholders	$	188,429	$	195,474	$	(7,045)	-4%	$	501,068	$	344,444	$	156,624	45%
Funds from operations attributable to common stockholders		384,390		416,974		(32,584)	-8%		690,623		808,241		(117,618)	-15%
EBITDA		536,071		569,131		(33,060)	-6%		1,222,800		1,094,534		128,266	12%
Consolidated net operating income (NOI)		556,747		617,825		(61,078)	-10%		1,108,876		1,215,237		(106,361)	-9%
Same store NOI		478,806		482,887		(4,081)	-1%		945,831		951,478		(5,647)	-1%
Per share data (fully diluted):
Net income (loss) attributable to common stockholders	$	0.51	$	0.54	$	(0.03)	-6%	$	1.37	$	0.96	$	0.41	43%
Funds from operations attributable to common stockholders	$	1.04	$	1.16	$	(0.12)	-10%	$	1.88	$	2.26	$	(0.38)	-17%
Interest coverage ratio		4.60x		4.21x		0.39x	9%		5.14x		4.03x		1.11x	28%
Fixed charge coverage ratio		3.72x		3.34x		0.38x	11%		4.13x		3.20x		0.93x	29%

Triple-net

          The following is a summary of our NOI and SSNOI for the triple-net segment (dollars in thousands):

	Three Months Ended					Change			Six Months Ended					Change
		June 30,		June 30,						June 30,		June 30,
		2017		2016		$		%		2017		2016		$		%
NOI		$	241,347	$	310,311	$	(68,964)	-22%		$	491,081	$	618,477	$	(127,396)	-21%
Non SSNOI attributable to same store properties			(12,239)		(14,396)		2,157	-15%			(25,489)		(30,575)		5,086	-17%
NOI attributable to non same store properties(1)			(38,814)		(107,725)		68,911	-64%			(86,773)		(213,804)		127,031	-59%
SSNOI(2)		$	190,294	$	188,190	$	2,104	1%		$	378,819	$	374,098	$	4,721	1%
(1) Change is primarily due to the acquisition of 17 properties and the conversion of 23 construction projects into revenue-generating properties subsequent to January 1, 2016 and 214 properties disposed or held for sale.
(2) Relates to 534 same store properties.

36

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

     The following is a summary of our results of operations for the triple-net segment (dollars in thousands):

			Three Months Ended				Change			Six Months Ended				Change
			June 30,		June 30,					June 30,		June 30,
			2017		2016		$		%	2017		2016		$		%
Revenues:
	Rental income		$	217,889	$	287,134	$	(69,245)	-24%	$	445,180	$	570,958	$	(125,778)	-22%
	Interest income			20,901		21,971		(1,070)	-5%		41,580		44,824		(3,244)	-7%
	Other income			2,557		1,206		1,351	112%		4,321		2,695		1,626	60%
		Total revenues		241,347		310,311		(68,964)	-22%		491,081		618,477		(127,396)	-21%
		NOI(1)		241,347		310,311		(68,964)	-22%		491,081		618,477		(127,396)	-21%
Other expenses:
	Interest expense			2,515		5,754		(3,239)	-56%		8,025		12,117		(4,092)	-34%
	Loss (gain) on derivatives, net			736		-		736	n/a		1,960		-		1,960	n/a
	Depreciation and amortization			60,171		75,809		(15,638)	-21%		119,781		155,609		(35,828)	-23%
	Transaction costs(2)			-		1,291		(1,291)	-100%		-		4,143		(4,143)	-100%
	Loss (gain) on extinguishment of debt, net			-		121		(121)	-100%		29,083		97		28,986	29,882%
	Impairment of assets			4,846		-		4,846	n/a		4,846		14,314		(9,468)	-66%
	Other expenses(2)			2,181		-		2,181	n/a		7,190		-		7,190	n/a
		Total other expenses		70,449		82,975		(12,526)	-15%		170,885		186,280		(15,395)	-8%
Income from continuing operations before income taxes and income (loss) from unconsolidated entities				170,898		227,336		(56,438)	-25%		320,196		432,197		(112,001)	-26%
Income tax (expense) benefit				(1,471)		(213)		(1,258)	591%		(2,271)		(528)		(1,743)	330%
Income (loss) from unconsolidated entities				3,867		3,018		849	28%		9,505		6,100		3,405	56%
Income from continuing operations				173,294		230,141		(56,847)	-25%		327,430		437,769		(110,339)	-25%
Gain (loss) on real estate dispositions, net(3)				42,155		1,530		40,625	2,655%		273,236		1,530		271,706	17,759%
Net income				215,449		231,671		(16,222)	-7%		600,666		439,299		161,367	37%
Less: Net income (loss) attributable to noncontrolling interests				970		774		196	25%		1,573		433		1,140	263%
Net income attributable to common stockholders			$	214,479	$	230,897	$	(16,418)	-7%	$	599,093	$	438,866	$	160,227	37%
(1) See Non-GAAP Financial Measures.
(2) See Note 3 to our unaudited consolidated financial statements.
(3) See Note 5 to our unaudited consolidated financial statements.

     The decrease in rental income is attributable to the disposition of properties exceeding new acquisitions.  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. For the three months ended June 30, 2017, we had 16 leases with rental rate increasers ranging from 0.12% to 0.58% in our triple-net portfolio. The decrease in interest income is directly related to the volume of loan payoffs during 2016 and 2017.

     Depreciation and amortization decreased as a result of the disposition of triple-net properties. To the extent that we acquire or dispose of additional properties in the future, our provision for depreciation and amortization will change accordingly.

During the six months ended June 30, 2017 and 2016, we recorded impairment charges on certain held-for-sale triple-net properties as the carrying values exceeded the estimated fair value less costs to sell. Changes in the gain on sales of properties are related to the volume of property sales and the sales prices.

    During the six months ended June 30, 2017, we completed eight triple-net construction projects totaling $266,650,000 or $291,102 per bed/unit.  The following is a summary of triple-net construction projects pending as of June 30, 2017 (dollars in thousands):

37

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

Location	Units/Beds		Commitment		Balance	Est. Completion
Bracknell, UK	64	$	16,404	$	15,228	3Q17
Alexandria, VA	116		60,156		31,385	1Q18
Exton, PA	120		34,175		8,503	2Q18
	300	$	110,735	$	55,116

     Interest expense for the six months ended June 30, 2017 and 2016 represents secured debt interest expense and related fees.  The change in interest expense is due to the net effect and timing of assumptions, segment transitions, fluctuations in foreign currency rates, extinguishments and principal amortizations. The fluctuation in losses/gains on debt extinguishment is attributable to the large volume of extinguishments in the first quarter of 2017.  The following is a summary of our triple-net secured debt principal activity (dollars in thousands):

	Three Months Ended						Six Months Ended
	June 30, 2017			June 30, 2016			June 30, 2017			June 30, 2016
			Wtd. Avg.			Wtd. Avg.			Wtd. Avg.			Wtd. Avg.
	Amount		Interest Rate	Amount		Interest Rate	Amount		Interest Rate	Amount		Interest Rate
Beginning balance	$	339,270	3.549%	$	522,399	5.467%	$	594,199	4.580%	$	554,014	5.488%
Debt extinguished		-	0.000%		(59,093)	5.260%		(255,553)	5.923%		(93,012)	5.492%
Foreign currency		7,662	2.833%		(239)	5.315%		10,817	2.823%		5,052	5.315%
Principal payments		(1,066)	5.563%		(2,798)	5.607%		(3,597)	5.723%		(5,785)	5.548%
Ending balance	$	345,866	3.532%	$	460,269	5.509%	$	345,866	3.532%	$	460,269	5.509%
Monthly averages	$	342,670	3.534%	$	497,403	5.493%	$	451,143	4.144%	$	518,490	5.490%

A portion of our triple-net properties were formed through partnerships.  Income or loss from unconsolidated entities represents our share of net income or losses related to unconsolidated investments.  Net income attributable to noncontrolling interest represents our partners’ share of net income relating to those partnerships where we are the controlling partner.

Seniors Housing Operating

     The following is a summary of our NOI and SSNOI for the seniors housing operating segment (dollars in thousands):

	Three Months Ended					Change			Six Months Ended				Change
		June 30,		June 30,					June 30,		June 30,
		2017		2016		$		%	2017		2016		$		%
NOI		$	218,978	$	207,255	$	11,723	6%	$	428,420	$	403,730	$	24,690	6%
Non SSNOI attributable to same store properties			481		242		239	99%		712		490		222	45%
NOI attributable to non same store properties(1)			(17,277)		71		(17,348)	-24434%		(34,386)		170		(34,556)	-20327%
SSNOI(2)		$	202,182	$	207,568	$	(5,386)	-3%	$	394,746	$	404,390	$	(9,644)	-2%
(1) Change is primarily due to the acquisition of 43 properties subsequent to January 1, 2016.
(2) Relates to 373 same store properties.

     The following is a summary of our seniors housing operating results of operations (dollars in thousands):

38

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

			Three Months Ended				Change			Six Months Ended				Change
			June 30,		June 30,					June 30,		June 30,
			2017		2016		$		%	2017		2016		$		%
Revenues:
	Resident fees and services		$	677,040	$	615,220	$	61,820	10%	$	1,347,377	$	1,217,369	$	130,008	11%
	Interest income			-		1,042		(1,042)	-100%		69		2,073		(2,004)	-97%
	Other income			1,049		8,989		(7,940)	-88%		2,510		11,178		(8,668)	-78%
		Total revenues		678,089		625,251		52,838	8%		1,349,956		1,230,620		119,336	10%
Property operating expenses				459,111		417,996		41,115	10%		921,536		826,890		94,646	11%
	NOI(1)			218,978		207,255		11,723	6%		428,420		403,730		24,690	6%
Other expenses:
	Interest expense			15,403		20,274		(4,871)	-24%		31,219		40,797		(9,578)	-23%
	Depreciation and amortization			117,198		102,312		14,886	15%		236,935		204,144		32,791	16%
	Transaction costs(2)			-		3,247		(3,247)	-100%		-		7,180		(7,180)	-100%
	Loss (gain) on extinguishment of debt, net			2,524		(88)		2,612	n/a		3,414		(88)		3,502	n/a
	Impairment of assets			8,785		-		8,785	n/a		14,191		-		14,191	n/a
	Other expenses(2)			1,165		-		1,165	n/a		2,943		-		2,943	n/a
		Total other expenses		145,075		125,745		19,330	15%		288,702		252,033		36,669	15%
Income (loss) from continuing operations before income taxes and income (loss) from unconsolidated entities				73,903		81,510		(7,607)	-9%		139,718		151,697		(11,979)	-8%
Income tax benefit (expense)				10,247		2,023		8,224	407%		9,160		4,789		4,371	91%
Income (loss) from unconsolidated entities				(8,449)		(4,887)		(3,562)	73%		(37,640)		(11,822)		(25,818)	218%
Income from continuing operations				75,701		78,646		(2,945)	-4%		111,238		144,664		(33,426)	-23%
Gain (loss) on real estate dispositions, net(3)				-		-		-	n/a		13,011		-		13,011	n/a
Net income (loss)				75,701		78,646		(2,945)	-4%		124,249		144,664		(20,415)	-14%
Less: Net income (loss) attributable to noncontrolling interests				781		(190)		971	n/a		191		167		24	14%
Net income (loss) attributable to common stockholders			$	74,920	$	78,836	$	(3,916)	-5%	$	124,058	$	144,497	$	(20,439)	-14%
(1) See Non-GAAP Financial Measures.
(2) See Note 3 to our unaudited consolidated financial statements.
(3) See Note 5 to our unaudited consolidated financial statements.

     Fluctuations in revenues and property operating expenses are primarily a result of acquisitions and the movement of U.S. and foreign currency exchange rates. The fluctuations in depreciation and amortization are due to 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. 

     During the six month period ended June 30, 2017, we recorded an impairment charge related to two held-for-sale properties for which our carrying value exceeded the estimated fair value less costs to sell.  During the six month period ended June 30, 2017, we recorded a gain on sale related to the sale of one property previously classified as held-for-sale.

     During the six month period ended June 30, 2017, we completed one seniors housing construction project representing $3,634,000 or $302,833 per unit.  The following is a summary of our seniors housing operating construction projects, excluding expansions, pending as of June 30, 2017 (dollars in thousands):

39

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

Location	Units		Commitment		Balance	Est. Completion
Chertsey, UK	94	$	40,544	$	27,452	1Q18
Bushey, UK	95		52,955		24,046	2Q18
	189	$	93,499		51,498
New York, NY	Project in planning stage				133,312
London, UK	Project in planning stage				26,404
Total				$	211,214

Interest expense represents secured debt interest expense.  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 seniors housing operating property secured debt principal activity (dollars in thousands):

	Three Months Ended						Six Months Ended
	June 30, 2017			June 30, 2016			June 30, 2017			June 30, 2016
			Weighted Avg.			Weighted Avg.			Weighted Avg.			Weighted Avg.
	Amount		Interest Rate	Amount		Interest Rate	Amount		Interest Rate	Amount		Interest Rate
Beginning balance	$	2,033,152	3.663%	$	2,355,182	3.980%	$	2,463,249	3.936%	$	2,290,552	3.958%
Debt issued		149,264	2.519%		86,856	3.040%		161,799	2.331%		161,992	3.051%
Debt extinguished		(156,422)	4.084%		(33,080)	4.588%		(594,954)	4.990%		(91,613)	3.594%
Foreign currency		26,884	3.222%		(3,131)	3.503%		34,042	3.209%		57,066	3.504%
Principal payments		(11,893)	3.530%		(12,199)	3.907%		(23,151)	3.606%		(24,369)	3.933%
Ending balance	$	2,040,985	3.556%	$	2,393,628	3.923%	$	2,040,985	3.556%	$	2,393,628	3.923%
Monthly averages	$	1,997,433	3.633%	$	2,400,782	3.940%	$	2,086,474	3.679%	$	2,353,251	3.955%

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 (loss) related to joint ventures. The fluctuations in income (loss) from unconsolidated entities is primarily due to the recognition of goodwill and intangible asset impairments as well as non-recurring income tax expense adjustments related to our investments in unconsolidated entities during the six month period ended June 30, 2017.  During the three months ended June 30, 2017, we recognized a $7,916,000 deferred tax benefit arising from basis difference generated by the aforementioned unconsolidated entities’ adjustments.

Outpatient Medical

     The following is a summary of our NOI and SSNOI for the outpatient medical segment (dollars in thousands):

	Three Months Ended					Change			Six Months Ended				Change
		June 30,		June 30,					June 30,		June 30,
		2017		2016		$		%	2017		2016		$		%
NOI		$	96,183	$	99,805	$	(3,622)	-4%	$	188,903	$	192,518	$	(3,615)	-2%
Non SSNOI on same store properties			(2,704)		(2,611)		(93)	4%		(4,918)		(4,984)		66	-1%
NOI attributable to non same store properties(1)			(7,149)		(10,065)		2,916	-29%		(11,719)		(14,544)		2,825	-19%
SSNOI(2)		$	86,330	$	87,129	$	(799)	-1%	$	172,266	$	172,990	$	(724)	0%
(1) Change is primarily due to a nonrecurring cash receipt during the three months ended June 30, 2016, partially offset by acquisitions of seven properties and conversions of construction projects into nine revenue-generating properties subsequent to January 1, 2016.
(2) Relates to 235 same store properties.

40

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

     The following is a summary of our results of operations for the outpatient medical segment (dollars in thousands):

			Three Months Ended				Change			Six Months Ended				Change
			June 30,		June 30,					June 30,		June 30,
			2017		2016		$		%	2017		2016		$		%
Revenues:
	Rental income		$	137,710	$	135,494	$	2,216	2%	$	277,561	$	267,332	$	10,229	4%
	Interest income			-		994		(994)	-100%		-		2,298		(2,298)	-100%
	Other income			1,217		4,153		(2,936)	-71%		1,830		4,466		(2,636)	-59%
		Total revenues		138,927		140,641		(1,714)	-1%		279,391		274,096		5,295	2%
Property operating expenses				42,744		40,836		1,908	5%		90,488		81,578		8,910	11%
	NOI(1)			96,183		99,805		(3,622)	-4%		188,903		192,518		(3,615)	-2%
Other expenses:
	Interest expense			2,122		5,402		(3,280)	-61%		4,413		11,146		(6,733)	-60%
	Depreciation and amortization			47,478		48,448		(970)	-2%		96,408		95,512		896	1%
	Transaction costs(2)			-		619		(619)	-100%		-		2,042		(2,042)	-100%
	Impairment of assets			-		-		-	n/a		5,625		-		5,625	n/a
	Loss (gain) on extinguishment of debt, net			2,991		-		2,991	n/a		4,373		-		4,373	n/a
	Other expenses(2)			1,310		-		1,310	n/a		1,671		-		1,671	n/a
		Total other expenses		53,901		54,469		(568)	-1%		112,490		108,700		3,790	3%
Income from continuing operations before income taxes and income from unconsolidated entities				42,282		45,336		(3,054)	-7%		76,413		83,818		(7,405)	-9%
Income tax (expense) benefit				(351)		(248)		(103)	42%		(686)		(476)		(210)	44%
Income from unconsolidated entities				604		(90)		694	n/a		1,051		(56)		1,107	n/a
Net income (loss)				42,535		44,998		(2,463)	-5%		76,778		83,286		(6,508)	-8%
Less: Net income (loss) attributable to noncontrolling interests				1,582		(1,660)		3,242	n/a		2,392		(1,525)		3,917	n/a
Net income (loss) attributable to common stockholders			$	40,953	$	46,658	$	(5,705)	-12%	$	74,386	$	84,811	$	(10,425)	-12%
(1) See Non-GAAP Financial Measures.
(2) See Note 3 to our unaudited consolidated financial statements.

     The increase in rental income is primarily attributable to the acquisitions of new properties and the conversion of newly constructed outpatient medical properties from which we receive rent. Certain of our leases contain annual rental escalators that are contingent upon changes in the Consumer Price Index. These escalators are not fixed, so no straight-line rent is recorded; however, rental income is recorded based on the contractual cash rental payments due for the period. If the Consumer Price Index does not increase, a portion of our revenues may not continue to increase. Sales of real property would offset revenue increases and, to the extent that they exceed new acquisitions, could result in decreased revenues. Our leases could renew above or below current rent rates, resulting in an increase or decrease in rental income.  For the three months ended June 30, 2017, our consolidated outpatient medical portfolio signed 96,841 square feet of new leases and 255,129 square feet of renewals.  The weighted-average term of these leases was nine years, with a rate of $30.29 per square foot and tenant improvement and lease commission costs of $29.70 per square foot. Substantially all of these leases during the referenced quarter contain an annual fixed or contingent escalation rent structure ranging from 0% to 3%. 

     The fluctuation in property operating expenses is primarily attributable to acquisitions and construction conversions of new outpatient medical facilities for which we incur certain property operating expenses.The fluctuations in depreciation and amortization are due to 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. 

     During the six months ended June 30, 2017, we recorded impairment charges related to certain held-for-sale properties as the carrying values exceeded the estimated fair values less costs to sell. 

41

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

    During the six months ended June 30, 2017, we completed four outpatient medical construction projects representing $63,036,000 or $310 per square foot. The following is a summary of the outpatient medical construction projects, excluding expansions, pending as of June 30, 2017 (dollars in thousands):

Location	Square Feet		Commitment		Balance	Est. Completion
Brooklyn, NY	140,955	$	105,177	$	46,965	4Q18

     Total interest expense represents secured debt interest expense. The change in secured debt interest expense is primarily due to the net effect and timing of assumptions, extinguishments and principal amortizations. The fluctuation in losses/gains on debt extinguishment is attributable to the large volume of extinguishments in 2017.  The following is a summary of our outpatient medical secured debt principal activity (dollars in thousands):

	Three Months Ended						Six Months Ended
	June 30, 2017			June 30, 2016			June 30, 2017			June 30, 2016
			Weighted Avg.			Weighted Avg.			Weighted Avg.			Weighted Avg.
	Amount		Interest Rate	Amount		Interest Rate	Amount		Interest Rate	Amount		Interest Rate
Beginning balance	$	289,824	4.509%	$	605,360	5.218%	$	404,079	4.846%	$	627,689	5.177%
Debt assumed		23,094	6.670%		-	0.000%		23,094	6.670%		-	0.000%
Debt extinguished		(25,312)	6.439%		(38,321)	5.878%		(137,416)	5.990%		(57,508)	5.993%
Principal payments		(2,688)	7.076%		(3,807)	6.281%		(4,839)	6.816%		(6,949)	5.924%
Ending balance	$	284,918	4.617%	$	563,232	5.129%	$	284,918	4.617%	$	563,232	5.129%
Monthly averages	$	275,048	4.490%	$	579,824	5.147%	$	305,530	4.572%	$	598,764	5.186%

         A portion of our outpatient medical properties were formed through partnerships. Income or loss from unconsolidated entities represents our share of net income or losses related to certain unconsolidated property investments. Net income attributable to noncontrolling interests represents our partners’ share of net income relating to those partnerships where we are the controlling partner.

42

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

     Non-Segment/Corporate

     The following is a summary of our results of operations for the non-segment/corporate activities (dollars in thousands):

		Three Months Ended				Change			Six Months Ended				Change
		June 30,		June 30,					June 30,		June 30,
		2017		2016		$		%	2017		2016		$		%
Revenues:
	Other income	$	239	$	454	$	(215)	-47%	$	472	$	512	$	(40)	-8%
Expenses:
	Interest expense		96,191		100,896		(4,705)	-5%		191,170		201,225		(10,055)	-5%
	General and administrative		32,632		39,914		(7,282)	-18%		63,733		85,606		(21,873)	-26%
	Other expenses		1,683		3,161		(1,478)	-47%		6,210		3,161		3,049	96%
	Total expenses		130,506		143,971		(13,465)	-9%		261,113		289,992		(28,879)	-10%
Loss from continuing operations before income taxes			(130,267)		(143,517)		13,250	-9%		(260,641)		(289,480)		28,839	-10%
Income tax (expense) benefit			23		(1,049)		1,072	n/a		-		(1,546)		1,546	-100%
Loss from continuing operations			(130,244)		(144,566)		14,322	-10%		(260,641)		(291,026)		30,385	-10%
Less: Preferred stock dividends			11,680		16,352		(4,672)	-29%		26,059		32,703		(6,644)	-20%
Less: Preferred stock redemption charge			-		-		-	n/a		9,769		-		9,769	n/a
Net loss attributable to common stockholders		$	(141,924)	$	(160,918)	$	18,994	-12%	$	(296,469)	$	(323,729)	$	27,260	-8%

     The following is a summary of our non-segment/corporate interest expense (dollars in thousands):

	Three Months Ended				Change			Six Months Ended				Change
	June 30,		June 30,					June 30,		June 30,
	2017		2016		$		%	2017		2016		$		%
Senior unsecured notes	$	88,556	$	94,364	$	(5,808)	-6%	$	175,147	$	187,898	$	(12,751)	-7%
Secured debt		55		78		(23)	-29%		115		175		(60)	-34%
Primary unsecured credit facility		4,236		3,296		940	29%		9,273		7,005		2,268	32%
Loan expense		3,344		3,158		186	6%		6,635		6,147		488	8%
Totals	$	96,191	$	100,896	$	(4,705)	-5%	$	191,170	$	201,225	$	(10,055)	-5%

The change in interest expense on senior unsecured notes is due to the net effect of issuances and extinguishments.  The decrease in interest expense is attributed primarily to the $450,000,000 of 4.70% senior unsecured notes extinguished in December 2016.  Please refer to Note 10 to our unaudited consolidated financial statements for additional information.  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 primary unsecured credit facility is due primarily to the net effect and timing of draws, paydowns and variable interest rate changes.  Please refer to Note 9 of our unaudited consolidated financial statements for additional information regarding our primary unsecured credit facility.

     General and administrative expenses as a percentage of consolidated revenues for the three months ended June 30, 2017 and 2016 were 3.08% and 3.70%, respectively.  The decrease in general and administrative expenses for the six months ended June 30, 2017 is primarily related to a reduction in professional service fees for tax and legal consulting and compensation costs as a result of execution of our strategic initiatives. Other expenses for the six months ended June 30, 2017 included costs associated with the departure of certain executive officers and key employees.

43

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

Other

Non-GAAP Financial Measures

     We believe that net income and net income attributable to common stockholders (“NICS”), as defined by U.S. GAAP, are the most appropriate earnings measurements. However, we consider FFO, NOI, SSNOI, EBITDA and Adjusted EBITDA to be useful supplemental measures 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 funds from operations attributable to common stockholders (“FFO”) as a supplemental measure of operating performance for REITs that excludes historical cost depreciation from net income. FFO, as defined by NAREIT, means NICS, 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.

     Consolidated net operating income (“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 paid to operators, 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 NOI (“SSNOI”) is used to evaluate the 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 reporting period subsequent to January 1, 2016.  Land parcels, loans and sub-leases as well as any properties acquired, developed/redeveloped, transitioned, sold or classified as held for sale during that period are excluded from the same store amounts.  We believe NOI and SSNOI 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 SSNOI to make decisions about resource allocations and to assess the property level performance of our properties.

     EBITDA stands for earnings (net income) 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. Covenants in our senior unsecured notes contain a financial ratios based on a definition of EBITDA that is specific to those agreements. 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 excluding unconsolidated entities and adjusted for items per our covenant. We use Adjusted EBITDA to measure our adjusted fixed charge coverage ratio, which represents Adjusted EBITDA divided by fixed charges on a trailing twelve months basis. Fixed charges include total interest (excluding capitalized interest and non-cash interest expenses), secured debt principal amortization and preferred dividends. Our covenant requires an adjusted fixed charge coverage ratio of at least 1.50 times.

     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. 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.

44

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

     The following tables reflect the reconciliations of NOI and SSNOI to net income, the most directly comparable U.S. GAAP measure, for the periods presented.  Dollars are in thousands.

			Three Months Ended
			March 31,		June 30,		September 30,		December 31,		March 31,		June 30,
NOI Reconciliations:			2016		2016		2016		2016		2017		2017
Net income			$	165,474	$	210,749	$	354,741	$	351,108	$	337,610	$	203,441
Loss (gain) on real estate dispositions, net				-		(1,530)		(162,351)		(200,165)		(244,092)		(42,155)
Loss (income) from unconsolidated entities				3,820		1,959		1,749		2,829		23,106		3,978
Income tax expense (benefit)				(1,725)		(513)		(305)		(16,585)		2,245		(8,448)
Other expenses				-		3,161		-		8,838		11,675		6,339
Impairment of assets				14,314		-		9,705		13,187		11,031		13,631
Provision for loan losses				-		-		-		10,215		-		-
Loss (gain) on extinguishment of debt, net				(24)		33		-		17,204		31,356		5,515
Loss (gain) on derivatives, net				-		-		(2,516)		68		1,224		736
Transaction costs				8,208		5,157		19,842		9,704		-		-
General and administrative expenses				45,691		39,914		36,828		32,807		31,101		32,632
Depreciation and amortization				228,696		226,569		218,061		227,916		228,276		224,847
Interest expense				132,960		132,326		129,699		126,360		118,597		116,231
Consolidated net operating income (NOI)			$	597,414	$	617,825	$	605,453	$	583,486	$	552,129	$	556,747
NOI by segment:
	Triple-net			308,168		310,311		310,864		279,516		249,735		241,347
	Seniors housing operating			196,475		207,255		199,495		210,895		209,442		218,978
	Outpatient medical			92,713		99,805		94,905		92,841		92,719		96,183
	Non-segment/corporate			58		454		189		234		233		239
		Total NOI	$	597,414	$	617,825	$	605,453	$	583,486	$	552,129	$	556,747

			Six Months Ended
			June 30,		June 30,
NOI Reconciliations:			2016		2017
Net income			$	376,223	$	541,052
Loss (gain) on real estate dispositions, net				(1,530)		(286,247)
Loss (income) from unconsolidated entities				5,778		27,084
Income tax expense (benefit)				(2,239)		(6,203)
Other expenses				3,161		18,014
Impairment of assets				14,314		24,662
Loss (gain) on extinguishment of debt, net				9		36,870
Loss (gain) on derivatives, net				-		1,960
Transaction costs				13,365		-
General and administrative expenses				85,606		63,733
Depreciation and amortization				455,265		453,124
Interest expense				265,285		234,827
Consolidated net operating income (NOI)			$	1,215,237	$	1,108,876
NOI by segment:
	Triple-net			618,477		491,081
	Seniors housing operating			403,730		428,420
	Outpatient medical			192,518		188,903
	Non-segment/corporate			512		472
		Total NOI	$	1,215,237	$	1,108,876

45

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

					Three Months Ended
					March 31,		June 30,		September 30,		December 31,		March 31,		June 30,
SSNOI Reconciliations:					2016		2016		2016		2016		2017		2017
NOI:
	Triple-net				$	308,168	$	310,311	$	310,864	$	279,516	$	249,735	$	241,347
	Seniors housing operating					196,475		207,255		199,495		210,895		209,442		218,978
	Outpatient medical					92,713		99,805		94,905		92,841		92,719		96,183
			Total			597,356		617,371		605,264		583,252		551,896		556,508
Adjustments:
	Triple-net:
		Non SSNOI on same store properties				(16,179)		(14,396)		(14,249)		(14,135)		(13,250)		(12,239)
		NOI attributable to non same store properties				(106,079)		(107,725)		(108,659)		(77,392)		(47,960)		(38,814)
			Subtotal			(122,258)		(122,121)		(122,908)		(91,527)		(61,210)		(51,053)
	Seniors housing operating:
		Non SSNOI on same store properties				248		242		1,269		231		231		481
		NOI attributable to non same store properties				99		71		(4,532)		(17,914)		(17,109)		(17,277)
			Subtotal			347		313		(3,263)		(17,683)		(16,878)		(16,796)
	Outpatient medical:
		Non SSNOI on same store properties				(2,373)		(2,611)		(2,636)		(1,974)		(2,214)		(2,704)
		NOI attributable to non same store properties				(4,480)		(10,065)		(5,789)		(3,531)		(4,570)		(7,149)
			Subtotal			(6,853)		(12,676)		(8,425)		(5,505)		(6,784)		(9,853)
SSNOI:				Properties
	Triple-net			534		185,910		188,190		187,956		187,989		188,525		190,294
	Seniors housing operating			373		196,822		207,568		196,232		193,212		192,564		202,182
	Outpatient medical			235		85,860		87,129		86,480		87,336		85,935		86,330
			Total	1,142	$	468,592	$	482,887	$	470,668	$	468,537	$	467,024	$	478,806
SSNOI Property Reconciliation:
	Total properties			1,274
	Acquisitions			(67)
	Developments			(37)
	Held-for-sale			(17)
	Segment transitions			(3)
	Other(1)			(8)
		Same store properties		1,142
(1) Includes eight land parcels.

					Six Months Ended
						June 30,		June 30,
SSNOI Reconciliations:						2016		2017
NOI:
	Triple-net					$	618,477	$	491,081
	Seniors housing operating						403,730		428,420
	Outpatient medical						192,518		188,903
			Total				1,214,725		1,108,404
Adjustments:
	Triple-net:
		Non SSNOI on same store properties					(30,575)		(25,489)
		NOI attributable to non same store properties					(213,804)		(86,773)
			Subtotal				(244,379)		(112,262)
	Seniors housing operating:
		Non SSNOI on same store properties					490		712
		NOI attributable to non same store properties					170		(34,386)
			Subtotal				660		(33,674)
	Outpatient medical
		Non SSNOI on same store properties					(4,984)		(4,918)
		NOI attributable to non same store properties					(14,544)		(11,719)
			Subtotal				(19,528)		(16,637)
SSNOI:				Properties
	Triple-net			534			374,098		378,819
	Seniors housing operating			373			404,390		394,746
	Outpatient medical			235			172,990		172,266
			Total	1,142		$	951,478	$	945,831

46

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

     The table below reflects the reconciliation of FFO to NICS, the most directly comparable U.S. GAAP measure, for the periods presented. 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.

		Three Months Ended
		March 31,		June 30,		September 30,		December 31,		March 31,		June 30,
FFO Reconciliations:		2016		2016		2016		2016		2017		2017
NICS		$	148,969	$	195,474	$	334,910	$	333,042	$	312,639	$	188,429
Depreciation and amortization			228,696		226,569		218,061		227,916		228,276		224,847
Impairment of assets			14,314		-		9,705		13,187		11,031		13,631
Loss (gain) on sales of properties, net			-		(1,530)		(162,351)		(200,165)		(244,092)		(42,155)
Noncontrolling interests			(17,319)		(20,616)		(15,695)		(17,897)		(18,107)		(16,955)
Unconsolidated entities			16,604		17,077		17,240		16,746		16,484		16,593
FFO		$	391,264	$	416,974	$	401,870	$	372,829	$	306,231	$	384,390
Average common shares outstanding:
	Basic		355,076		356,646		358,932		362,088		362,534		366,524
	Diluted		356,051		358,891		361,237		364,369		364,652		368,149
Per share data:
NICS
	Basic	$	0.42	$	0.55	$	0.93	$	0.92	$	0.86	$	0.51
	Diluted		0.42		0.54		0.93		0.91		0.86		0.51
FFO
	Basic	$	1.10	$	1.17	$	1.12	$	1.03	$	0.84	$	1.05
	Diluted		1.10		1.16		1.11		1.02		0.84		1.04

		Six Months Ended
		June 30,		June 30,
FFO Reconciliations:		2016		2017
Net income attributable to common stockholders		$	344,444	$	501,068
Depreciation and amortization			455,265		453,124
Impairment of assets			14,314		24,662
Loss (gain) on sales of properties, net			(1,530)		(286,247)
Noncontrolling interests			(37,934)		(35,061)
Unconsolidated entities			33,682		33,077
Funds from operations attributable to common stockholders		$	808,241	$	690,623
Average common shares outstanding:
	Basic		355,879		364,551
	Diluted		357,489		366,423
Per share data:
Net income attributable to
	common stockholders
	Basic	$	0.97	$	1.37
	Diluted		0.96		1.37
Funds from operations attributable to common stockholders
	Basic	$	2.27	$	1.89
	Diluted		2.26		1.88

     The table below reflects the reconciliation of EBITDA to net income, the most directly comparable U.S. GAAP measure, for the

47

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

periods presented. Dollars are in thousands.

		Three Months Ended
		March 31,		June 30,		September 30,		December 31,		March 31,			June 30,
EBITDA Reconciliations:		2016		2016		2016		2016		2017			2017
Net income		$	165,474	$	210,749	$	354,741	$	351,108	$	337,610	$	203,441
Interest expense			132,960		132,326		129,699		126,360		118,597		116,231
Income tax expense (benefit)			(1,725)		(513)		(305)		(16,585)		2,245		(8,448)
Depreciation and amortization			228,696		226,569		218,061		227,916		228,276		224,847
EBITDA		$	525,405	$	569,131	$	702,196	$	688,799	$	686,728	$	536,071
Interest Coverage Ratio:
Interest expense		$	132,960	$	132,326	$	129,699	$	126,360	$	118,597	$	116,231
Non-cash interest expense			599		(1,519)		(543)		(216)		(1,679)		(2,946)
Capitalized interest			3,037		4,306		4,766		4,834		4,129		3,358
	Total interest		136,596		135,113		133,922		130,978		121,047		116,643
EBITDA		$	525,405	$	569,131	$	702,196	$	688,799	$	686,728	$	536,071
	Interest coverage ratio		3.85x		4.21x		5.24x		5.26x		5.67x		4.60x
Fixed Charge Coverage Ratio:
Total interest		$	136,596	$	135,113	$	133,922	$	130,978	$	121,047	$	116,643
Secured debt principal payments			18,642		19,096		18,151		18,577		16,249		15,958
Preferred dividends			16,352		16,352		16,352		16,352		14,379		11,680
	Total fixed charges		171,590		170,561		168,425		165,907		151,675		144,281
EBITDA		$	525,405	$	569,131	$	702,196	$	688,799	$	686,728	$	536,071
	Fixed charge coverage ratio		3.06x		3.34x		4.17x		4.15x		4.53x		3.72x

		Six Months Ended
		June 30,		June 30,
EBITDA Reconciliations:		2016			2017
Net income		$	376,223	$	541,052
Interest expense			265,285		234,827
Income tax expense (benefit)			(2,239)		(6,203)
Depreciation and amortization			455,265		453,124
EBITDA		$	1,094,534	$	1,222,800
Interest Coverage Ratio:
Interest expense		$	265,285	$	234,827
Non-cash interest expense			(920)		(4,626)
Capitalized interest			7,343		7,488
	Total interest		271,708		237,689
EBITDA		$	1,094,534	$	1,222,800
	Interest coverage ratio		4.03x		5.14x
Fixed Charge Coverage Ratio:
Total interest		$	271,708	$	237,689
Secured debt principal payments			37,737		32,206
Preferred dividends			32,703		26,059
	Total fixed charges		342,148		295,954
EBITDA		$	1,094,534	$	1,222,800
	Fixed charge coverage ratio		3.20x		4.13x

48

Item 2. 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. Dollars are in thousands.

		Twelve Months Ended
Adjusted EBITDA		March 31,		June 30,		September 30,		December 31,		March 31,		June 30,
Reconciliations:		2016		2016		2016		2016		2017		2017
Net income		$	844,606	$	724,894	$	880,380	$	1,082,070	$	1,254,208	$	1,246,899
Interest expense			504,048		517,512		526,082		521,345		506,982		490,886
Income tax expense (benefit)			5,030		(2,899)		139		(19,128)		(15,158)		(23,093)
Depreciation and amortization			866,106		883,873		896,135		901,242		900,822		899,100
	EBITDA		2,219,790		2,123,380		2,302,736		2,485,529		2,646,854		2,613,792
Loss (income) from unconsolidated entities			12,676		11,682		10,801		10,357		29,643		31,662
Transaction costs			70,579		63,245		73,754		42,910		34,702		29,545
Stock-based compensation expense			29,976		25,883		25,807		28,869		25,588		23,321
Loss (gain) on extinguishment of debt, net			19,252		398		(186)		17,214		48,593		54,074
Losses/impairments (gain) on sale of properties, net			(209,228)		(20,647)		(171,246)		(326,839)		(574,216)		(601,209)
Provision for loan losses			-		-		-		10,215		10,215		10,215
Loss (gain) on derivatives, net			-		-		(2,516)		(2,448)		(1,225)		(489)
Other expenses			40,636		37,386		37,386		7,721		19,396		23,997
Additional other income			(2,144)		(13,955)		(11,811)		(16,664)		(16,664)		(4,853)
Adjusted EBITDA		$	2,181,537	$	2,227,372	$	2,264,725	$	2,256,864	$	2,222,886	$	2,180,055
Adjusted Fixed Charge Coverage Ratio:
Interest expense		$	504,048	$	517,512	$	526,082	$	521,345	$	506,982	$	490,886
Capitalized interest			9,320		11,566		14,467		16,943		18,035		17,087
Non-cash interest expense			(1,868)		(7,589)		(4,341)		(1,681)		(3,958)		(5,386)
	Total interest		511,500		521,489		536,208		536,607		521,059		502,587
Adjusted EBITDA		$	2,181,537	$	2,227,372	$	2,264,725	$	2,256,864	$	2,222,886	$	2,180,055
	Adjusted interest coverage ratio		4.26x		4.27x		4.22x		4.21x		4.27x		4.34x
Total interest		$	511,500	$	521,489	$	536,208	$	536,607	$	521,059	$	502,587
Secured debt principal payments			70,076		71,836		74,170		74,466		72,073		68,935
Preferred dividends			65,408		65,408		65,407		65,406		63,434		58,762
	Total fixed charges		646,984		658,733		675,785		676,479		656,566		630,284
Adjusted EBITDA		$	2,181,537	$	2,227,372	$	2,264,725	$	2,256,864	$	2,222,886	$	2,180,055
	Adjusted fixed charge coverage ratio		3.37x		3.38x		3.35x		3.34x		3.39x		3.46x

     Our leverage ratios include book capitalization, undepreciated book capitalization and market capitalization. Book capitalization represents the sum of net debt (defined as total long-term debt less cash and cash equivalents and any IRC section 1031 deposits), total equity and redeemable noncontrolling interests. Undepreciated book capitalization represents book capitalization adjusted for accumulated depreciation and amortization. Market capitalization represents book capitalization adjusted for the fair market value of our common stock. Our leverage ratios are defined as the proportion of net debt to total capitalization. The table below reflects the reconciliation of our leverage ratios to our balance sheets for the periods presented. Dollars are in thousands.

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Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

			As of
		March 31,		June 30,		September 30,		December 31,		March 31,		June 30,
			2016		2016		2016		2016		2017		2017
Book capitalization:
Borrowings under primary unsecured credit facility		$	645,000	$	745,000	$	1,350,000	$	645,000	$	522,000	$	385,000
Long-term debt obligations(1)			12,418,198		12,228,727		12,080,888		11,713,245		10,932,185		10,994,946
Cash & cash equivalents(2)			(355,949)		(466,585)		(456,420)		(557,659)		(380,360)		(442,284)
Total net debt			12,707,249		12,507,142		12,974,468		11,800,586		11,073,825		10,937,662
Total equity			14,999,794		14,868,568		15,264,238		15,281,472		15,110,263		15,313,523
Redeemable noncontrolling interest			359,656		394,126		393,530		398,433		385,418		388,876
Book capitalization		$	28,066,699	$	27,769,836	$	28,632,236	$	27,480,491	$	26,569,506	$	26,640,061
	Net debt to book capitalization ratio		45%		45%		45%		43%		42%		41%
Undepreciated book capitalization:
Total net debt		$	12,707,249	$	12,507,142	$	12,974,468	$	11,800,586	$	11,073,825	$	10,937,662
Accumulated depreciation and amortization			4,032,726		4,109,585		4,243,038		4,093,494		4,335,160		4,568,408
Total equity			14,999,794		14,868,568		15,264,238		15,281,472		15,110,263		15,313,523
Redeemable noncontrolling interest			359,656		394,126		393,530		398,433		385,418		388,876
Undepreciated book capitalization		$	32,099,425	$	31,879,421	$	32,875,274	$	31,573,985	$	30,904,666	$	31,208,469
	Net debt to undepreciated book capitalization ratio		40%		39%		39%		37%		36%		35%
Market capitalization:
Total net debt		$	12,707,249	$	12,507,142	$	12,974,468	$	11,800,586	$	11,073,825	$	10,937,662
Common shares outstanding			356,773		357,690		362,425		362,602		364,564		368,878
Period end share price		$	69.34	$	76.17	$	74.77	$	66.93	$	70.82	$	74.85
Common equity market capitalization			24,738,620		27,245,247		27,098,517		24,268,952		25,818,422		27,610,518
Noncontrolling interests			839,856		869,320		867,923		873,512		859,478		873,567
Preferred stock			1,006,250		1,006,250		1,006,250		1,006,250		718,750		718,750
Enterprise value		$	39,291,975	$	41,627,959	$	41,947,158	$	37,949,300	$	38,470,475	$	40,140,497
	Net debt to market capitalization ratio		32%		30%		31%		31%		29%		27%
(1) Amounts include senior unsecured notes, secured debt and capital lease obligations as reflected on our consolidated balance sheet.
(2) Inclusive of IRC section 1031 deposits, if any.

Critical Accounting Policies

Our unaudited consolidated financial statements are prepared in accordance with U.S. GAAP, which requires us to make estimates and assumptions.  Management considers an accounting estimate or assumption 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.  Management believes the current assumptions and other considerations used to estimate amounts reflected in our unaudited 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 unaudited consolidated financial statements, the resulting changes could have a material adverse effect on our consolidated results of operations, liquidity and/or financial condition.  Please refer to Note 2 to the financial statements included in our Annual Report on Form 10-K for the year ended December 31, 2016 for further information regarding significant accounting policies that impact us.  There have been no material changes to these policies in 2017.

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Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

Cautionary Statement Regarding Forward-Looking Statements

    This Quarterly Report on Form 10-Q may contain “forward-looking” statements as defined in the Private Securities Litigation Reform Act of 1995. When the company uses words such as “may,” “will,” “intend,” “should,” “believe,” “expect,” “anticipate,” “project,” “estimate” or similar expressions that do not relate solely to historical matters, it is making forward-looking statements. In particular, these forward-looking statements include, but are not limited to, those relating to the company’s opportunities to acquire, develop or sell properties; the company’s ability to close its anticipated acquisitions, investments or dispositions on currently anticipated terms, or within currently anticipated timeframes; the expected performance of the company’s operators/tenants and properties; the company’s expected occupancy rates; the company’s ability to declare and to make distributions to shareholders; the company’s investment and financing opportunities and plans; the company’s continued qualification as a real estate investment trust (“REIT”); the company’s ability to access capital markets or other sources of funds; and the company’s ability to meet its earnings guidance. Forward-looking statements are not guarantees of future performance and involve risks and uncertainties that may cause the company’s actual results to differ materially from the company’s 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; 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 and seniors housing 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; the company’s 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 the company’s properties; the company’s ability to re-lease space at similar rates as vacancies occur; the company’s 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 the company’s properties; changes in rules or practices governing the company’s financial reporting; the movement of U.S. and foreign currency exchange rates; the company’s ability to maintain its qualification as a REIT; and key management personnel recruitment and retention.  Other important factors are identified in the company’s Annual Report on Form 10-K for the year ended December 31, 2016, including factors identified under the headings “Business,” “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations.” Finally, the company undertakes no obligation to update or revise publicly any forward-looking statements, whether because of new information, future events or otherwise, or to update the reasons why actual results could differ from those projected in any forward-looking statements.

Item 3. 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 credit facility to acquire, construct or make loans relating to health care and seniors housing properties. Then, as market conditions dictate, we will issue equity or long-term fixed rate debt to repay the borrowings under our primary unsecured credit facility.  We are subject to risks associated with debt financing, including the risk that existing indebtedness may not be refinanced or that the terms of refinancing may not be as favorable as the terms of current indebtedness. The majority of our borrowings were completed under indentures or contractual agreements that limit the amount of indebtedness we may incur. Accordingly, in the event that we are unable to raise additional equity or borrow money because of these limitations, our ability to acquire additional properties may be limited.

      A change in interest rates will not affect the interest expense associated with our fixed rate debt. Interest rate changes, however, will affect the fair value of our fixed rate debt. Changes in the interest rate environment upon maturity of this fixed rate debt could have an effect on our future cash flows and earnings, depending on whether the debt is replaced with other fixed rate debt, variable rate debt or equity or repaid by the sale of assets. To illustrate the impact of changes in the interest rate markets, we performed a sensitivity analysis on our fixed rate debt instruments whereby we modeled the change in net present values arising from a hypothetical 1% increase in interest rates to determine the instruments’ change in fair value. The following table summarizes the

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analysis performed as of the dates indicated (in thousands):

	June 30, 2017				December 31, 2016
	Principal		Change in		Principal		Change in
	balance		fair value		balance		fair value
Senior unsecured notes	$	7,645,564	$	(514,151)	$	7,568,832	$	(521,203)
Secured debt		1,755,369		(67,651)		2,489,276		(73,944)
Totals	$	9,400,933	$	(581,802)	$	10,058,108	$	(595,147)

     Our variable rate debt, including our primary unsecured credit facility, is reflected at fair value. At June 30, 2017, we had $2,001,894,000 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 $20,019,000.  At December 31, 2016, we had $2,311,996,000 outstanding under 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 $23,120,000.

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 impact the amount of net income we earn from our investments in Canada and the United Kingdom. Based solely on our results for the three months ended June 30, 2017, including the impact of existing hedging arrangements, if these exchange rates were to increase or decrease by 10%, our net income from these investments would increase or decrease, as applicable, by less than $3,500,000.  We will continue to mitigate these underlying foreign currency exposures with non-U.S. denominated borrowings and gains and losses on derivative contracts.  If we increase our international presence through investments in, or acquisitions or development of, seniors housing and health care properties outside the U.S., we may also decide to transact additional business or borrow funds in currencies other than U.S. Dollars, 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):

	June 30, 2017				December 31, 2016
	Carrying		Change in		Carrying		Change in
	Value		fair value		Value		fair value
Foreign currency forward contracts	$	43,900	$	15,338	$	87,962 (1)	$	722 (1)
Debt designated as hedges		1,557,049		15,570		1,481,591		13,000
Totals	$	1,600,949	$	30,908	$	1,569,553	$	13,722
(1) Amounts exclude cross currency hedge activity.

     For additional information regarding fair values of financial instruments, see “Item 2 — Management’s Discussion and Analysis of Financial Condition and Results of Operations — Critical Accounting Policies” and Notes 11 and 16 to our unaudited consolidated financial statements.

Item 4. Controls and Procedures

     Our management, under the supervision and with the participation of our Chief Executive Officer and Chief Financial Officer, has evaluated the effectiveness of our disclosure controls and procedures (as defined in Rule 13a-15(e) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”)) as of the end of the period covered by this Quarterly Report on Form 10-Q. Based on that evaluation, the Chief Executive Officer and Chief Financial Officer have concluded that our disclosure controls and procedures are effective in providing reasonable assurance that information required to be disclosed by us in the reports we file with or submit to the SEC under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms. No changes in our internal control over financial reporting (as defined in Rule 13a-15(f) under the Exchange Act) occurred during the fiscal quarter covered by this Quarterly Report on Form 10-Q that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

PART II. OTHER INFORMATION

Item 1.  Legal Proceedings

     From time to time, there are various legal proceedings pending against us that arise in the ordinary course of our business. 

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Management does not believe that the resolution of any of these legal proceedings either individually or in the aggregate will have a material adverse effect on our business, results of operations or financial condition.  Despite management’s view of the ultimate resolution of these legal proceedings, we may have significant legal expenses and costs associated with the defense of such matters.  Further, management cannot predict the outcome of these legal proceedings and if management’s expectation regarding such matters is not correct, such proceedings could have a material adverse effect on our business, results of operations or financial condition.

     From time to time, we are party to certain legal proceedings for which third parties, such as tenants, operators and/or managers, are contractually obligated to indemnify, defend and hold us harmless.  In some of these matters, the indemnitors have insurance for the potential damages.  In other matters, we are being defended by tenants and other obligated third parties and these indemnitors may not have sufficient insurance, assets, income or resources to satisfy their defense and indemnification obligations to us.  The unfavorable resolution of such legal proceedings could, individually or in the aggregate, materially adversely affect the indemnitors’ ability to satisfy their respective obligations to us, which, in turn, could have a material adverse effect on our business, results of operations or financial condition.  It is management’s opinion that there are currently no such legal proceedings pending that will, individually or in the aggregate, have such a material adverse effect.

Item 1A. Risk Factors

     There have been no material changes from the risk factors identified under the heading “Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, 2016.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

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
April 1, 2017 through April 30, 2017	-	$	-
May 1, 2017 through May 31, 2017	107		73.45
June 1, 2017 through June 30, 2017	203		77.43
Totals	310	$	76.06
(1) During the three months ended June 30, 2017, the company acquired shares of common stock held by employees who tendered owned shares to satisfy tax withholding obligations.
(2) No shares were purchased as part of publicly announced plans or programs.

Item 5. Other Information

6.50% Series J Cumulative Redeemable Preferred Stock – Certificate of Elimination

     On July 26, 2017, we filed a certificate of elimination with the Delaware Secretary of State, which became effective upon filing, to eliminate from our Second Restated Certificate of Incorporation, as amended, all matters set forth in the certificate of designation for the 6.50% Series J Cumulative Redeemable Preferred Stock (the “Series J Stock”).  All 11,500,000 shares of the Series J Stock were redeemed by us on March 7, 2017, and no shares of the Series J Stock were issued or outstanding at the time of the filing of the certificate of elimination.

Item 6. Exhibits

3.1              Certificate of Elimination of 6.50% Series J Cumulative Redeemable Preferred Stock of the company.

10.1            Third Amended and Restated Employment Agreement, dated June 16, 2017, between the company and Scott A. Estes.*

10.2            Amended and Restated Employment Agreement, dated June 16, 2017, between the company and Mercedes T. Kerr.*

10.3            Summary of Director Compensation.*

12               Statement Regarding Computation of Ratio of Earnings to Fixed Charges and Ratio of Earnings to Combined Fixed Charges and Preferred Stock Dividends (Unaudited).

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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 Quarterly Report on Form 10-Q are the following materials, formatted in XBRL (eXtensible Business Reporting Language): (i) the Consolidated Balance Sheets at June 30, 2017 and December 31, 2016, (ii) the Consolidated Statements of Comprehensive Income for the six months ended June 30, 2017 and 2016, (iii) the Consolidated Statements of Equity for the six months ended June 30, 2017 and 2016, (iv) the Consolidated Statements of Cash Flows for the six months ended June 30, 2017 and 2016 and (v) the Notes to Unaudited Consolidated Financial Statements.

SIGNATURES

     Pursuant to the requirements 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.

	WELLTOWER INC.
Date: July 28, 2017	By:	/s/ THOMAS J. DEROSA
	Thomas J. DeRosa,
	Chief Executive Officer  (Principal Executive Officer)
Date: July 28, 2017	By:	/s/ SCOTT A. ESTES
	Scott A. Estes,
	Executive Vice President - Chief Financial Officer  (Principal Financial Officer)
Date: July 28, 2017	By:	/s/ PAUL D. NUNGESTER, JR.
	Paul D. Nungester, Jr.,
	Senior Vice President & Controller  (Principal Accounting Officer)

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EX-3.1

 

EXHIBIT 3.1

CERTIFICATE OF ELIMINATION

OF

6.50% SERIES J CUMULATIVE REDEEMABLE

PREFERRED STOCK

OF

WELLTOWER INC.

Pursuant to Section 151 of the

General Corporation Law of the State of Delaware

                The undersigned duly authorized officer of Welltower Inc., a corporation organized and existing under the General Corporation Law of the State of Delaware (the “Company”), does hereby certify as follows:

1.             That, pursuant to Section 151 of the General Corporation Law of the State of Delaware, the Board of Directors of the Company adopted the resolutions set forth below on May 4, 2017, authorizing a decrease in the number of shares designated as 6.50% Series J Cumulative Redeemable Preferred Stock, $1.00 par value per share (“Series J Stock”), from 11,500,000 shares to zero shares.

2.             That, pursuant to Section 151 of the General Corporation Law of the State of Delaware, such resolutions shall have the effect of eliminating from the certificate of incorporation of the Company all matters set forth in the Certificate of Designation of the Series J Stock.

3.             That no shares of Series J Stock remain issued and outstanding.

RESOLUTIONS ADOPTED BY THE BOARD OF DIRECTORS

NOW, THEREFORE, BE IT RESOLVED, that no further shares of Series J Stock shall be issued subject to the Certificate of Designation of the Series J Stock previously filed with the Secretary of State of the State of Delaware (the “Certificate of Designation”).

                RESOLVED, that the number of shares designated as Series J Stock be reduced to zero, which is the number issued and outstanding following the redemption of all the shares of Series J Stock by the Company, in order to allow the 11,500,000 redeemed shares to resume their status as authorized but undesignated shares of preferred stock of the Company, par value $1.00 per share, pursuant to Section 151 of the General Corporation Law of the State of Delaware, such shares thereafter to be available for designation in the future as part of a different series.

RESOLVED, that the officers of the Company be, and each of them hereby is, authorized and directed in the name and on behalf of the Company, to execute a Certificate of Elimination of the Series J Stock, as well as such other certificates or instruments as may be required, to be filed with the Secretary of State of the State of Delaware to evidence the reduction in the number of shares designated as Series J Stock and the elimination from the certificate of incorporation of the Company all matters set forth in the Certificate of Designation, such elimination to be effective upon the filing with the Secretary of State of the State of Delaware of such Certificate of Elimination of the Series J Stock.

RESOLVED, that any specific resolutions that may be required to have been adopted by the Board in connection with the actions contemplated by the foregoing resolutions be, and they hereby are, adopted, and the officers of the Company be, and each of them hereby is, authorized to certify as to the adoption of any and all such resolutions and attach such resolutions hereto.

RESOLVED, that all actions heretofore taken by any officer of the Company in connection with, or otherwise in contemplation of, the transactions contemplated by any of the foregoing resolutions be, and they hereby are, ratified, confirmed and approved.

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RESOLVED, that the officers of the Company be, and each of them hereby is, authorized and empowered on behalf of the Company and in its name to take or cause to be taken all actions and to execute and deliver all such instruments that the officers of the Company, or any one or more of them, approve as necessary or desirable in connection with the foregoing resolutions, such approval to be conclusively evidenced by the taking of such action or the execution and delivery of any such instrument by an officer of the Company.

[THE REMAINDER OF THIS PAGE IS INTENTIONALLY LEFT BLANK]

2

IN WITNESS WHEREOF, the undersigned has executed and subscribed this certificate and does affirm the foregoing as true under the penalties of perjury this 26^th day of July, 2017.

/s/ Scott A. Estes____________________________ 

                                                                                                                Scott A. Estes

                                                                                                                Executive Vice President – Chief Financial

                                                                                                                Officer

ATTEST:

/s/ Matthew McQueen_____________________

Matthew McQueen

Senior Vice President – General Counsel &

Corporate Secretary

3

EX-10.1

 

EXHIBIT 10.1

THIRD AMENDED AND RESTATED
EMPLOYMENT AGREEMENT

THIS THIRD AMENDED AND RESTATED EMPLOYMENT AGREEMENT (the “Agreement”), is being entered into this June 16, 2017 (the “Effective Date”), by and between WELLTOWER INC., a Delaware corporation, (the “Corporation”), and SCOTT A. ESTES (the “Executive”).

WHEREAS, Executive and the Corporation previously entered into a Second Amended and Restated Employment Agreement, dated December 29, 2008 (the “Prior Employment Agreement”); and

WHEREAS, the Parties desire to amend and restate the Prior Employment Agreement so that the Executive continues to act as the Corporation’s Executive Vice President – Chief Financial Officer based on the terms and conditions set forth herein.

NOW THEREFORE, in consideration of the mutual covenants herein contained, the parties, intending to be legally bound, hereby agree as follows:

1.EMPLOYMENT 

The Corporation hereby agrees to continue to employ the Executive as the Corporation’s Executive Vice President – Chief Financial Officer, upon the terms and conditions herein contained, and the Executive hereby agrees to continue such employment and to continue to serve in such positions, and to perform the duties and functions customarily performed by the Executive Vice President – Chief Financial Officer of a publicly traded corporation.

In such capacity, the Executive shall report to the Corporation’s Chief Executive Officer (“CEO”) and shall have such powers and responsibilities set forth in the Corporation’s By-Laws as well as such additional powers and responsibilities consistent with his position as may be assigned by the CEO.

Throughout the Term (defined below) of this Agreement, the Executive shall devote his best efforts and all of his business time and services to the business and affairs of the Corporation; provided, that the Executive will be permitted to, with the prior written approval of the CEO, act or serve as a director, trustee or committee member of a commercial business, civic or charitable organization.

2.TERM OF AGREEMENT

The term of employment under this Agreement shall expire on January 31, 2019, unless earlier terminated under one of the circumstances set forth in Sections 5, 6 or 7.  As used herein, “Term” refers to the length of the Executive’s employment under this Agreement, but the Term shall end upon any termination of Executive’s employment with the Corporation as provided herein.  Notwithstanding the foregoing, if a Change in Corporate Control (as defined in Section 6(b)) occurs during the Term, the Term shall be extended until twenty-four (24) months after the Change in Corporate Control.

The Corporation shall be entitled to terminate this Agreement and the Executive’s employment immediately for any reason or no reason, subject to the continuing obligations of the Corporation under this Agreement.  Upon termination of the Executive’s employment hereunder, unless otherwise expressly provided by the Corporation’s Board of Directors (the “Board”), the Executive shall be deemed to have resigned from all positions that the Executive holds as an officer of the Corporation or any of its affiliates.

3.BASE COMPENSATION AND BONUS

(a)The Executive shall receive annual base compensation during the Term of this Agreement of not less than $510,000 in cash (“Base Compensation”).  Such amounts shall be payable in substantially equal semi-monthly installments in accordance with the Corporation’s customary payroll practices.  Subject to the terms of this Agreement, during the Term, the Compensation Committee of the Board (the “Compensation Committee”) shall consult with the CEO and review the Executive’s Base Compensation at annual intervals, and may adjust the Executive’s annual Base Compensation from time to time.

(b)The Executive shall also be eligible to receive an annual incentive cash bonus for each calendar year ending during the Term of this Agreement, with the actual amount of such bonus to be determined by the Compensation Committee, using such performance measures as the Compensation Committee deems to be appropriate.  Such bonus, if any, shall be paid to the Executive no

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later than sixty (60) days after the end of the year to which the bonus relates.  Except as otherwise provided in Sections 5 or 6, (i) the annual bonus will be subject to the terms of any Corporation bonus plan under which it is granted and (ii) in order to be eligible to receive an annual bonus, the Executive must be employed by the Corporation on the last day of the applicable calendar year.

4.ADDITIONAL COMPENSATION AND BENEFITS

The Executive shall receive the following additional compensation and welfare and fringe benefits during the Term:

(a)Long-Term Incentives.  During the Term of the Agreement, any stock options, restricted stock or other awards granted under the 2016 Long-Term Incentive Plan shall be at the discretion of the Compensation Committee.

(b)Health Insurance.  During the Term of this Agreement, the Corporation shall provide the Executive and his dependents with health insurance, life insurance and disability coverage no less favorable than that from time to time made available to other key employees.

(c)Paid Time Off.  During the Term of this Agreement, the Executive shall be entitled to paid time off (“PTO”) (based on the number of years of service) in accordance with the Corporation’s PTO policy, as it may be amended from time to time.

(d)Business Expenses.  During the Term of this Agreement, the Corporation shall reimburse the Executive for all reasonable expenses he incurs in promoting the Corporation’s business, including expenses for travel and similar items, upon presentation by the Executive from time to time of an itemized account of such expenditures in accordance with the Corporation’s established policies and applicable law.  Following Executive’s termination of employment, any expense reimbursement requests must be submitted no later than sixty (60) days following such termination.

(e)Other Benefits.  In addition to the benefits provided pursuant to the preceding paragraphs of this Section 4, the Executive shall be eligible to participate in such other executive compensation and retirement plans of the Corporation as are applicable generally to other officers, and in such welfare plans, programs, practices and policies of the Corporation as are generally applicable to other key employees, unless such participation would duplicate, directly or indirectly, benefits already accorded to the Executive.

5.PAYMENTS UPON TERMINATION

(a)Termination without Cause or Termination by Executive for Good Reason (as defined below).  If the Executive’s employment is terminated by the Corporation without Cause (but not including due to death or Disability) or terminated by the Executive for Good Reason during the Term of this Agreement, the Executive shall be entitled to the following:

(i)Base Compensation accrued through the date of termination, based on the number of days in such year that had elapsed as of the termination date;

(ii)any accrued but unpaid PTO through the date of termination;

(iii)any bonuses earned but unpaid with respect to fiscal years or other completed bonus periods preceding the termination date;

(iv)any nonforfeitable benefits payable to the Executive under the terms of any deferred compensation, incentive or other benefit plans maintained by the Corporation, payable in accordance with the terms of the applicable plan;

(v)any expenses owed to the Executive under Section 4(d);

(vi)any pro-rated portion of the annual bonus that the Executive would have earned for the year in which the termination occurs (if he had remained employed for the entire year), based on the number of days in such year that had elapsed as of the termination date, payable at the time that the Corporation pays bonuses to its executive officers for such year;

(vii)all of Executive’s outstanding stock options, restricted stock or other equity awards with time-based vesting shall become fully vested and, in the case of stock options, exercisable in full, and the Executive shall have the right to exercise such stock options during a period of ninety (90) days following the termination of employment;

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(viii)the treatment of all of Executive’s outstanding stock options, restricted stock, restricted stock units or other equity awards with performance-based vesting shall be determined in accordance with the long-term incentive plan, and any other plans, pursuant to which such awards were granted and the applicable award agreement;

(ix)continued coverage under any group health plan maintained by the Corporation in which the Executive participated at the time of his termination for the remainder of the Term of the Agreement (but not less than six (6) months and not more than the period during which the Executive would be entitled to continuation coverage under Section 4980B of the Code, if the Executive elected such coverage and paid the applicable premiums), or until, if earlier, the date the Executive obtains comparable coverage under benefit plans maintained by a new employer, at an after-tax cost to the Executive comparable to the cost that the Executive would have incurred for the same coverage had he remained employed during such period; and

(x)a series of semi-monthly severance payments for each complete calendar month during the remaining Term of this Agreement, but not less than twelve (12) months (the “Severance Period”), each semi-monthly payment in an amount equal to one-twenty fourth (1/24th) of the sum of (A) the Executive’s Base Compensation, as in effect on the date of termination, and (B) the greater of (1) the annual bonus paid to the Executive for the last fiscal year preceding the termination date or (2) a minimum bonus equal to thirty-five percent (35%) of Executive’s Base Compensation.

Notwithstanding anything in the long-term incentive plan, and any other plans, pursuant to which any equity awards are granted, or any applicable equity award agreements to the contrary, the payments set forth in subsections (vi), (vii), (viii), (ix) and (x) are subject to (a) a waiver and general release of claims in favor of the Corporation, in a form and manner satisfactory to the Corporation, that is executed by the Executive and which becomes irrevocable within sixty (60) days following the date of such termination, and (b) the Executive’s compliance with the restrictive covenants set forth in Sections 9 and 10 below during the Severance Period (the “Severance Requirement”).  Notwithstanding anything in the 2016 Long-Term Incentive Plan, any other plans pursuant to which any equity awards are granted, or any applicable equity award agreements to the contrary, upon any violation of the Severance Requirement during the Severance Period, all post-employment compensation set forth in subsections (vi), (vii), (viii), (ix) and (x) above shall immediately stop and the Executive shall be obligated to return to the Corporation any post-employment compensation previously paid or otherwise provided to the Executive.  The pro-rated bonus payable pursuant to subsection (vi) shall be paid in accordance with the provisions of Section 3(b) after the Compensation Committee has approved bonuses payable for the year.  All payments to be made or settlements to occur pursuant to subsection (vii) and (viii) (excluding stock options) shall be made to the Executive on the first business day following the date that is sixty (60) days following the date of such termination (except as otherwise expressly provided in the applicable award agreement).  The payments set forth in subsection (x) shall commence on the 60th day following the date of such termination.

All payments required to be made pursuant to subsections (i), (ii), (iii), and (v) shall be made to the Executive within sixty (60) days following the date of such termination and within any shorter time period required by law.

For purposes of this Agreement, “Cause” shall mean: (1) any action by the Executive involving willful disloyalty to the Corporation, such as embezzlement, fraud, misappropriation of corporate assets or a breach of the covenants set forth in Section 9 or 10 herein; (2) the Executive being convicted of a felony; (3) the Executive being convicted of any crime or offense that is not a felony but was (x) committed in connection with the performance of his duties hereunder or (y) involved moral turpitude; or (4) the intentional and willful failure by the Executive to substantially perform his duties hereunder as directed by the CEO (other than any such failure resulting from the Executive’s incapacity due to physical or mental disability) after a demand for substantial performance is made by the Board.  For purposes of this Agreement, “Good Reason” shall mean: (1) the assignment of Executive to a position other than Executive Vice President – Chief Financial Officer (other than for Cause or by reason of disability), (2) the assignment of duties materially inconsistent with such position if such change in assignment constitutes (x) a material diminution in the Executive’s authority, duties or responsibilities, or (y) a change in the reporting structure such that the Executive is directed to report to anyone other than the Corporation’s CEO, or (3) a material breach by the Corporation of this Agreement; provided, however, Executive must not have consented to any such act or omission that could give rise to a claim for “Good Reason”, the Executive must have notified the Corporation in writing within the first thirty (30) days following the occurrence of any of the foregoing events and the Corporation must have failed to substantially cure such breach within thirty (30) days following its receipt of such notice from the Executive; and provided further, the Executive must have resigned under this paragraph within ninety (90) days following the occurrence of the event.  Notwithstanding the foregoing, any transfer of responsibilities in connection with succession planning and leadership transition shall in no event constitute Good Reason for purposes of this Agreement.

(b)Disability.  The Corporation shall be entitled to terminate the Executive’s employment if the Board determines that the Executive has been unable to engage in any substantial gainful activity by reason of any medically determinable physical or mental impairment that can be expected to result in death or which has lasted or can be expected to last for a continuous period of not less than

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12 months, and the permanence and degree of which shall be supported by medical evidence satisfactory to the Committee (“Disability”).  Upon such termination, the Executive shall be entitled to the following:

(i)Base Compensation accrued through the date of termination, based on the number of days in such year that had elapsed as of the termination date;

(ii)any accrued but unpaid PTO through the date of termination;

(iii)any bonuses earned but unpaid with respect to fiscal years or other completed bonus periods preceding the termination date;

(iv)any nonforfeitable benefits payable to the Executive under the terms of any deferred compensation, incentive or other benefit plans maintained by the Corporation, payable in accordance with the terms of the applicable plan;

(v)any expenses owed to the Executive under Section 4(d);

(vi)any pro-rated portion of the annual bonus that the Executive would have earned for the year in which the termination occurs (if he had remained employed for the entire year), based on the number of days in such year that had elapsed as of the termination date, payable at the time that the Corporation pays bonuses to its executive officers for such year; and

(vii)the treatment of all of Executive’s outstanding stock options, restricted stock, restricted stock units or other equity awards (whether subject to time-based vesting or performance-based vesting) shall be determined in accordance with the long-term incentive plan, and any other plans, pursuant to which such awards were granted and the applicable award agreement.

All payments required to be made pursuant to subsections (i), (ii), (iii) and (v) shall be made to the Executive within sixty (60) days following the date of such termination and within any shorter time period required by law.  The pro-rated bonus payable pursuant to subsection (vi) shall be paid in accordance with the provisions of Section 3(b) after the Compensation Committee has approved bonuses payable for the year.

(c)Termination for Cause.  If the Executive’s employment is terminated by the Corporation for Cause, the Executive shall be entitled to the following:

(i)Base Compensation accrued through the date of termination, based on the number of days in such year that had elapsed as of the termination date;

(ii)any accrued but unpaid PTO through the date of termination;

(iii)any bonuses earned but unpaid with respect to fiscal years or other completed bonus periods preceding the termination date;

(iv)any nonforfeitable benefits payable to the Executive under the terms of any deferred compensation, incentive or other benefit plans maintained by the Corporation, payable in accordance with the terms of the applicable plan; and

(v)any expenses owed to the Executive under Section 4(d).

All payments required to be made pursuant to subsections (i), (ii), (iii) and (v) shall be made to the Executive within sixty (60) days following the date of such termination and within any shorter time period required by law.

(d)Voluntary Termination or Resignation by the Executive.  If the Executive voluntarily terminates (but not by reason of expiration of the Term) or resigns his employment other than for Good Reason, the Executive shall be entitled to the following:

(i)Base Compensation accrued through the date of termination, based on the number of days in such year that had elapsed as of the termination date;

(ii)any accrued but unpaid PTO through the date of termination;

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(iii)any bonuses earned but unpaid with respect to fiscal years or other completed bonus periods preceding the termination date;

(iv)any nonforfeitable benefits payable to the Executive under the terms of any deferred compensation, incentive or other benefit plans maintained by the Corporation, payable in accordance with the terms of the applicable plan; and

(v)any expenses owed to the Executive under Section 4(d).

All payments required to be made pursuant to subsections (i), (ii), (iii) and (v) shall be made to the Executive within sixty (60) days following the date of such termination and within any shorter time period required by law.

(e)Termination upon Expiration of the Term.  If the Executive’s employment terminates as a result of the expiration of the Term of this Agreement, the Executive shall be entitled to the following:

(i)Base Compensation accrued through the date of termination, based on the number of days in such year that had elapsed as of the termination date;

(ii)any accrued but unpaid PTO through the date of termination;

(iii)any bonuses earned but unpaid with respect to fiscal years or other completed bonus periods preceding the termination date;

(iv)any nonforfeitable benefits payable to the Executive under the terms of any deferred compensation, incentive or other benefit plans maintained by the Corporation, payable in accordance with the terms of the applicable plan; and

(v)any expenses owed to the Executive under Section 4(d).

All payments required to be made pursuant to subsections (i), (ii), (iii) and (v) shall be made to the Executive within sixty (60) days following the date of such termination and within any shorter time period required by law.

(f)Cooperation.  The parties agree that certain matters in which the Executive will be involved during the Term of this Agreement may necessitate the Executive’s cooperation in the future.  Accordingly, following the termination of the Executive’s employment for any reason, to the extent reasonably requested by the CEO or the Board, the Executive shall cooperate with the Corporation in connection with matters arising out of the Executive’s service to the Corporation; provided that, the Corporation shall make reasonable efforts to minimize disruption of the Executive’s other activities.  The Corporation shall reimburse the Executive for reasonable expenses incurred in connection with such cooperation.

6.CHANGE IN CORPORATE CONTROL

(a)If at any time upon, or during the period of twenty-four (24) consecutive months following, the occurrence of a Change in Corporate Control (as defined below), and during the Term of this Agreement, the Executive is involuntarily terminated (other than for Cause), or resigns his employment for Good Reason, the Executive shall be entitled to the following:

(i)Base Compensation accrued through the date of termination, based on the number of days in such year that had elapsed as of the termination date;

(ii)any accrued but unpaid PTO pay through the date of termination;

(iii)any bonuses earned but unpaid with respect to fiscal years or other completed bonus periods preceding the termination date;

(iv)any nonforfeitable benefits payable to the Executive under the terms of any deferred compensation, incentive or other benefit plans maintained by the Corporation, payable in accordance with the terms of the applicable plan;

(v)any expenses owed to the Executive under Section 4(d);

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(vi)the pro-rated portion of the target annual bonus that the Executive would have earned for the year in which the termination occurs (if he had remained employed for the entire year), based on the number of days in such year that had elapsed as of the termination date;

(vii)all of Executive’s outstanding stock options, restricted stock or other equity awards with time-based vesting shall become fully vested and in the case of stock options, exercisable in full, and the Executive shall have the right to exercise such stock options during a period of ninety (90) days following the termination of employment, unless otherwise expressly provided in the applicable award agreement;

(viii)all of Executive’s outstanding stock options, restricted stock, restricted stock units or other equity awards with performance-based vesting shall become vested based upon a determination of actual level of achievement of performance goals by the Compensation Committee of the Board as of immediately prior to the occurrence of the Change of Corporate Control or as otherwise expressly provided in the applicable award agreements;

(ix)continued coverage pursuant to Section 601, et seq. of the Employee Retirement Income Security Act of 1974, as amended (“ERISA”) under any group health plan maintained by the Corporation in which the Executive participated at the time of his termination at an after-tax cost to the Executive comparable to the cost that the Executive would have incurred for the same coverage had he remained employed during such period for the remainder of the Term of the Agreement or until, if earlier, the date the Executive obtains comparable coverage under benefit plans maintained by a new employer or otherwise becomes ineligible to such continued coverage under ERISA; and

(x)a lump sum severance payment equal to the present value of a series of monthly severance payments for twenty-four (24) months, each in an amount equal to one-twelfth (1/12th) of the sum of (A) the Executive’s Base Compensation, as in effect at the time of the Change in Corporate Control, and (B) the greater of (1) the annual bonus paid to the Executive for the last fiscal year of the Corporation ending prior to the Change in Corporate Control or (2) a minimum annual bonus equal to thirty-five percent (35%) of his Base Compensation.  Such present value shall be calculated using a discount rate equal to the interest rate on 90-day Treasury bills, as reported in The Wall Street Journal (or similar publication) on the date of the Change in Corporate Control.  For purposes of this subsection (x), the amount of any annual bonus paid for a portion of a fiscal year shall be annualized.

Notwithstanding anything in the long-term incentive plan, and any other plans, pursuant to which any equity awards are granted, or any applicable equity award agreements to the contrary, the payments set forth in subsections (vi), (vii), (viii), (ix) and (x) are subject to a waiver and general release of claims in favor of the Corporation, in a form and manner satisfactory to the Corporation, that is executed by the Executive and which becomes irrevocable within sixty (60) days following the date of such termination.  All payments to be made or settlements to occur pursuant to subsections (vii) and (viii) (excluding stock options) shall be made to the Executive on the first business day following the date that is sixty (60) days following the date of such termination (except as otherwise expressly provided in the applicable award agreement).  All payments required to be made pursuant to subsections (i), (ii), (iii), (v) and (vi) shall be made within sixty (60) days following the date of such termination and within any shorter time period required by law.  All payments required to be made pursuant to subsection (x) shall be made to the Executive on the first business day following the date that is sixty (60) days following the date of such termination.  Notwithstanding the foregoing, the severance payment under this Section shall be payable on a semi-monthly basis instead of a lump sum if the “Change in Corporate Control” does not constitute a “change in control event” within the meaning of Treasury Regulation Section 1.409A-3(i)(5) and shall in any event comply with the provisions of Section 8.

(b)For purposes of this Agreement, a “Change in Corporate Control” shall have the meaning set forth in the Corporation’s 2016 Long-Term Incentive Plan.

(c)Notwithstanding anything else in this Agreement to the contrary, in the event that it shall be determined that any payments or distributions by the Corporation to or for the benefit of the Executive, whether paid or payable or distributed or distributable pursuant to the terms of this Agreement or otherwise ( together, the “Payments”) would constitute “parachute payments” within the meaning of Section 280G of the Code, then the Payments shall be payable either in (i) full or (ii) as to such lesser amount which would result in no portion of such Payments being subject to the excise tax imposed under Section 4999 of the Code, such that the Executive shall receive the greater, on an after-tax basis, of either (i) or (ii) above, as determined by an independent accountant or tax advisor (“Independent Tax Advisor”) selected by the Corporation.  In the event that the Payments are to be reduced pursuant to this Section 6(c), such Payments shall be reduced as determined by the Independent Tax Advisor such that the reduction of compensation to be provided to or for the benefit of the Executive as a result of this Section 6(c) is minimized and to effectuate that, Payments shall be reduced (i) by first reducing or eliminating the portion of such Payments which is not payable in cash (other than that portion of such payments that is subject to clause (iii) below), (ii) then by reducing or eliminating cash Payments (other than that portion of such

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Payments subject to clause (iii) below) and (iii) then by reducing or eliminating the portion of such Payments (whether or not payable in cash) to which Treas. Reg. §1.280G-1 Q/A 24(c) (or any successor provision thereto) applies, in each case in reverse order beginning with Payments which are to be paid the farthest in time from the date of the transaction constituting a change in ownership of the Corporation within the meaning of Section 280G of the Code.  Any reductions made pursuant to this Section 6(c) shall be made in a manner consistent with the requirements of Section 409A and where two economically equivalent amounts are subject to reduction but payable at different times, such amounts shall be reduced on a pro rata basis but not below zero.

(d)If any dispute arises between the Corporation (or any successor) and the Executive regarding Executive’s right to payments under this Section, the Executive shall be entitled to recover his attorneys’ fees and costs incurred in connection with such dispute if the Executive is determined to be the prevailing party.  The following additional terms and conditions shall apply to the reimbursement of any attorneys fees and costs: (i) the attorneys fees and costs must be incurred by the Executive within five years following the date of the Executive’s termination or resignation; (ii) the attorneys fees and costs shall be paid by the Corporation by the end of the taxable year following the year in which the attorneys fees and costs were incurred; (iii) the amount of any attorneys fees and costs paid by the Corporation in one taxable year shall not affect the amount of any attorneys fees and costs to be paid by the Corporation in any other taxable year; and (iv) the Executive’s right to receive attorneys fees and costs may not be liquidated or exchanged for any other benefit.

7.DEATH 

If the Executive dies during the Term of this Agreement, the Corporation shall pay to the Executive’s estate the following:

(i)Base Compensation accrued through the date of death, based on the number of days in such year that had elapsed as of the date of death;

(ii)any accrued but unpaid PTO through the date of death;

(iii)any bonuses earned but unpaid with respect to fiscal years or other completed bonus periods preceding the date of death;

(iv)any nonforfeitable benefits payable to the Executive under the terms of any deferred compensation, incentive or other benefit plans maintained by the Corporation, payable in accordance with the terms of the applicable plan;

(v)any expenses owed to the Executive under Sections 4(d);

(vi)any pro-rated portion of the annual bonus that the Executive would have earned for the year in which the death occurs (if he had remained employed for the entire year), based on the number of days in such year that had elapsed as of the date of death), payable at the time that the Corporation pays bonuses to its executive officers for such year; and

(vii)the treatment of all of Executive’s outstanding stock options, restricted stock, restricted stock units or other equity awards (whether subject to time-based vesting or performance-based vesting) shall be determined in accordance with the long-term incentive plan, and any other plans, pursuant to which such awards were granted and the applicable award agreement.

All payments required to be made pursuant to subsections (i), (ii), (iii) and (v) shall be made to the estate within sixty (60) days following the date of death and within any shorter time period required by law.  All payments to be made pursuant to subsection (vii) (excluding stock options) shall be made to the Executive on the first business day following the date that is sixty (60) days following the date of such termination (except as otherwise expressly provided in the applicable award agreement).  The pro-rated bonus shall be paid in accordance with the provisions of Section 3(b) after the Compensation Committee has approved bonuses payable for the year.

8.WITHHOLDING AND SECTION 409A COMPLIANCE

(a)The Corporation shall, to the fullest extent not prohibited by law, have the right to withhold and deduct from any payment hereunder any federal, state or local taxes of any kind required by law to be withheld with respect to any such payment.

(b)This Agreement is intended to comply with the requirements of Section 409A of the Code or an exemption thereunder, and shall be interpreted and construed consistently with such intent.  The payments to the Executive pursuant to this Agreement are intended to be exempt from Section 409A of the Code to the maximum extent possible, under the separation pay exemption, as short-

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term deferrals, or otherwise.  For purposes of Section 409A of the Code, each installment payment provided under this Agreement shall be treated as a separate payment.  In the event the terms of this Agreement would subject the Executive to additional income taxes, interest or penalties under Section 409A of the Code (“409A Penalties”), the Corporation and the Executive shall cooperate diligently to amend the terms of the Agreement to avoid such 409A Penalties, to the extent possible.  To the extent any amounts under this Agreement are payable by reference to Executive’s “termination,” “termination of employment,” or similar phrases, such term shall be deemed to refer to the Executive’s “separation from service” (as defined in Section 409A of the Code).  Notwithstanding any other provision in this Agreement, including but not limited to Sections 5 and 6, if the Executive is a “specified employee” (as defined in Section 409A(a)(2)(b)(i)), then to the extent any amount payable under this Agreement (i) constitutes the payment of nonqualified deferred compensation, within the meaning of Section 409A of the Code, (ii) is payable upon the Executive’s separation from service, and (iii) under the terms of this Agreement would be payable prior to the six-month anniversary of the Executive’s separation from service, such payment shall be delayed and paid to the Executive, on the first day of the first calendar month beginning at least six months following the date of termination, or, if earlier, within ninety (90) days following the Executive’s death to the Executive’s surviving spouse (or such other beneficiary as the Executive may designate in writing).  Any reimbursement or advancement payable to the Executive pursuant to this Agreement shall be conditioned on the submission by the Executive of all expense reports reasonably required by the Corporation under any applicable expense reimbursement policy, and shall be paid to the Executive within thirty (30) days following receipt of such expense reports, but in no event later than the last day of the calendar year following the calendar year in which the Executive incurred the reimbursable expense.  Any amount of expenses eligible for reimbursement, or in-kind benefit provided, during a calendar year shall not affect the amount of expenses eligible for reimbursement, or in-kind benefit to be provided, during any other calendar year.  The right to any reimbursement or in-kind benefit pursuant to this Agreement shall not be subject to liquidation or exchange for any other benefit.

9.PROTECTION OF CONFIDENTIAL INFORMATION

The Executive hereby agrees that, during his employment with the Corporation and thereafter, he shall not, directly or indirectly, disclose or make available to any person, firm, corporation, association or other entity for any reason or purpose whatsoever, any Confidential Information (defined below).  The Executive further agrees that, upon the date of the Executive’s termination, all Confidential Information in his possession that is in written or other tangible form shall be returned to the Corporation and shall not be retained by the Executive or furnished to any third party, in any form except as provided herein.

Notwithstanding the foregoing, this Section 9 shall not apply to Confidential Information that (i) was publicly known at the time of disclosure to the Executive, (ii) becomes publicly known or available thereafter other than by any means in violation of this Agreement or any other duty owed to the Corporation by the Executive, (iii) is lawfully disclosed to the Executive by a third party, or (iv) is required to be disclosed by law or by any court, arbitrator or administrative or legislative body with actual or apparent jurisdiction to order the Executive to disclose or make accessible any information.  As used in this Agreement, Confidential Information means, without limitation, any non-public confidential or proprietary information disclosed to Executive or known by the Executive as a consequence of or through the Executive’s relationship with the Corporation, in any form, including electronic media.  Confidential Information also includes, but is not limited to, the Corporation’s business plans and financial information, marketing plans, and business opportunities.  Nothing herein shall limit in any way any obligation the Executive may have relating to Confidential Information under any other agreement or promise to the Corporation.

The Executive specifically acknowledges that all such Confidential Information, whether reduced to writing, maintained on any form of electronic media, or maintained in the mind or memory of the Executive and whether compiled by the Corporation, and/or the Executive, derives independent economic value from not being readily known to or ascertainable by proper means by others who can obtain economic value from its disclosure or use, that reasonable efforts have been made by the Corporation to maintain the secrecy of such information, that such information is the sole property of the Corporation and that any retention and use of such information by the Executive during his employment with the Corporation (except in the course of performing his duties and obligations to the Corporation) or after the termination of his employment shall constitute a misappropriation of the Corporation’s trade secrets.

The Executive agrees that Confidential Information gained by the Executive during the Executive’s association with the Corporation, has been developed by the Corporation through substantial expenditures of time, effort and money and constitute valuable and unique property of the Corporation.  The Executive recognizes that because his work for the Corporation will bring him into contact with confidential and proprietary information of the Corporation, the restrictions of this Section 9 are required for the reasonable protection of the Corporation and its investments and for the Corporation’s reliance on and confidence in the Executive.  The Executive further understands and agrees that the foregoing makes it necessary for the protection of the Corporation’s business that the Executive not compete with the Corporation during his employment with the Corporation and not compete with the Corporation for a reasonable period thereafter, as further provided in the following Section.

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The Executive understands that nothing contained in this Agreement limits Executive’s ability to file a charge or complaint with the Equal Employment Opportunity Commission, the National Labor Relations Board, the Occupational Safety and Health Administration, the Securities and Exchange Commission or any other federal, state or local governmental agency or commission (each a “Government Agency”).  Executive further understands that this Agreement does not limit Executive’s ability to communicate with any Government Agency or otherwise participate in any investigation or proceeding that may be conducted by any Government Agency, including providing documents or other information, without notice to the Company.  However, to the maximum extent permitted by law, the Executive agrees that if such a charge or complaint is made, the Executive shall not be entitled to recover any individual monetary relief or other individual remedies.  This Agreement does not limit or prohibit Executive’s right to receive an award for information provided to any Government Agency to the extent that such limitation or prohibition is a violation of law.

The Executive affirms that the Executive has not divulged any proprietary or confidential information of the Corporation and will continue to maintain the confidentiality of such information consistent with the Corporation’s policies and the Executive’s agreement(s) with the Corporation and/or common law.  The Executive further affirms that the Executive is not aware of and has not reported any allegations of wrongdoing by the Corporation or its officers or directors, including any allegations of corporate fraud, to a Government Agency or other person, and therefore has not been retaliated against for reporting any allegations of wrongdoing by the Corporation or its officers or directors, including any allegations of corporate fraud.

10.COVENANT NOT TO COMPETE

The Executive hereby agrees that he will not, either during the Term or at all times until one year from the time his employment ceases, or, if later, during any period in which he is receiving any severance or change in control payments under Sections 5(a) or 6 (the “Restricted Period”), engage in the (i) ownership or operation of Health Care Facilities (defined below); (ii) investment in or lending to Health Care Facilities; (iii) management of Health Care Facilities; or (iv) provision of any planning, development or executive services for Health Care Facilities.  “Health Care Facilities” means any senior housing facilities, facilities used or intended for the delivery of health care services, active adult communities, independent living facilities, assisted living facilities, skilled nursing facilities, inpatient rehabilitation facilities, ambulatory surgery centers, medical office buildings and/or hospitals.  The Executive will be deemed to be engaged in such competitive business activities if he participates in such a business enterprise as an employee, officer, director, consultant, agent, partner, proprietor, or other participant; provided that the ownership of no more than two percent (2%) of the stock of a publicly traded corporation engaged in a competitive business shall not be deemed to be engaging in competitive business activities.

During the Restricted Period, Executive will be prohibited, to the fullest extent allowed by applicable law, from directly or indirectly, individually or on behalf of any person or entity, encouraging, inducing, attempting to induce, recruiting, attempting to recruit, soliciting or attempting to solicit or participating in the recruitment for employment, contractor or consulting opportunities anyone who is employed at that time by the Corporation or any subsidiary or affiliate.

During his employment with the Corporation and thereafter, Executive will not make or authorize anyone else to make on Executive’s behalf any disparaging or untruthful remarks or statements, whether oral or written, about the Corporation, its operations or its products, services, affiliates, officers, directors, employees, or agents, or issue any communication that reflects adversely on or encourages any adverse action against the Corporation.  Executive will not make any direct or indirect written or oral statements to the press, television, radio or other media or other external persons or entities concerning any matters pertaining to the business and affairs of the Corporation, its affiliates or any of its officers or directors.

While employed by the Corporation and during the Restricted Period, the Executive will communicate the contents of this Section 10 to any person, firm, association, partnership, corporation or other entity that the Executive intends to be employed by, associated with, or represent.

11.INJUNCTIVE RELIEF

The Executive acknowledges and agrees that it would be difficult to fully compensate the Corporation for damages resulting from the breach or threatened breach of the covenants set forth in Sections 9 and 10 of this Agreement and accordingly agrees that the Corporation shall be entitled to temporary and injunctive relief, including temporary restraining orders, preliminary injunctions and permanent injunctions, without the need to post any bond, to enforce such provisions in any action or proceeding instituted in the United States District Court for the Northern District of Ohio or in any court in the State of Ohio having subject matter jurisdiction.  This provision with respect to injunctive relief shall not, however, diminish the Corporation’s right to claim and recover damages.

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12.NOTICES 

All notices or communications hereunder shall be in writing and sent by overnight courier, certified mail, or registered mail, (return receipt requested), postage prepaid, addressed as follows (or to such other address as such party may designate in writing from time to time):

If to the Corporation:

Welltower Inc.
4500 Dorr Street
Toledo, OH 43615
Attention:  General Counsel

If to the Executive, at the address on file with the Corporation’s Human Resources department.

The actual date of mailing, as shown by a mailing receipt therefor, shall determine the time at which notice was given.

13.SEPARABILITY 

If any provision of this Agreement shall be declared to be invalid or unenforceable, in whole or in part, such invalidity or unenforceability shall not affect the remaining provisions hereof which shall remain in full force and effect.

It is expressly understood and agreed that although the parties consider the restrictions contained in this Agreement to be reasonable, if a court determines that the time or territory or any other restriction contained in this Agreement is an unenforceable restriction on the activities of the Executive, no such provision of this Agreement shall be rendered void but shall be deemed amended to apply as to such maximum time and territory and to such extent as such court may judicially determine or indicate to be reasonable.

14.ASSIGNMENT 

This Agreement shall be binding upon and inure to the benefit of the heirs and representatives of the Executive and the assigns and successors of the Corporation, but neither this Agreement nor any rights or obligations hereunder shall be assignable or otherwise subject to hypothecation by the Executive.

15.ENTIRE AGREEMENT

This Agreement represents the entire agreement of the parties and shall supersede any and all previous contracts, arrangements or understandings between the Corporation and the Executive (including the Prior Employment Agreement).  The Agreement may be amended at any time by mutual written agreement of the parties hereto.

16.GOVERNING LAW AND ARBITRATION

This Agreement shall be construed, interpreted, and governed in accordance with the laws of the State of Ohio, without regard to principles of conflicts of laws.

Any dispute, controversy or claim arising out of or related to this Agreement or any breach of this Agreement shall be submitted to and decided by binding arbitration.  Arbitration shall be administered exclusively by the American Arbitration Association and shall be conducted in accordance with the National Rules for the Resolution of Employment Disputes.  Any arbitral award determination shall be final and binding upon the parties.  Judgment may be entered in any court having jurisdiction.  Notwithstanding the foregoing, the Corporation shall be entitled to seek a restraining order or injunction in any court of competent jurisdiction to prevent any continuation of any violation of Sections 9 or 10 hereof.

17.SURVIVAL 

Subject to any limits on applicability contained therein, Sections 9 through 11 and Section 16 hereof shall survive and continue in full force in accordance with their terms notwithstanding any termination of the Term or this Agreement.

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[Remainder of Page Intentionally Left Blank] 

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IN WITNESS WHEREOF, the Corporation has caused this Agreement to be duly executed, and the Executive has hereunto set his hand, as of the day and year first above written.

WELLTOWER INC., a Delaware corporation

By:           /s/ Matthew McQueen                                               

Name:      Matthew McQueen

Title:         Senior Vice President, General Counsel and Secretary

SCOTT A. ESTES, Executive

By:           /s/ Scott A. Estes                                                         

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EX-10.2

 

EXHIBIT 10.2

AMENDED AND RESTATED
EMPLOYMENT AGREEMENT

THIS AMENDED AND RESTATED EMPLOYMENT AGREEMENT (the “Agreement”), is being entered into this June 16, 2017 (the “Effective Date”), by and between WELLTOWER INC., a Delaware corporation, (the “Corporation”), and MERCEDES T. KERR (the “Executive”).

WHEREAS, Executive and the Corporation previously entered into an Employment Agreement, dated October 4, 2016 (the “Prior Employment Agreement”); and

WHEREAS, the Parties desire to amend and restate the Prior Employment Agreement so that the Executive continues to act as the Corporation’s Executive Vice President – Business & Relationship Management based on the terms and conditions set forth herein.

NOW THEREFORE, in consideration of the mutual covenants herein contained, the parties, intending to be legally bound, hereby agree as follows:

1.EMPLOYMENT 

The Corporation hereby agrees to continue to employ the Executive as the Corporation’s Executive Vice President – Business & Relationship Management, upon the terms and conditions herein contained, and the Executive hereby agrees to continue such employment and to continue to serve in such position.  As Executive Vice President – Business & Relationship Management, the Executive will (i) be responsible for the origination of new investment relationships and the development of existing investment relationships in the United States across the full health care continuum and (ii) undertake such other responsibilities as may be assigned to the Executive by the Corporation’s Chief Executive Officer (the “CEO”) from time to time.  In such capacity, the Executive shall report to the Corporation’s CEO and shall have such powers and responsibilities consistent with her position as may be assigned.

Throughout the Term (defined below) of this Agreement, the Executive shall devote her best efforts and all of her business time and services to the business and affairs of the Corporation; provided, that the Executive will be permitted to, with the prior written approval of the CEO, act or serve as a director, trustee or committee member of a commercial business, civic or charitable organization.

2.TERM OF AGREEMENT

The term of employment under this Agreement shall expire on January 31, 2019, unless earlier terminated under one of the circumstances set forth in Sections 5, 6  or 7.  As used herein, “Term” refers to the length of the Executive’s employment under this Agreement, but the Term shall end upon any termination of Executive’s employment with the Corporation as provided herein.  Notwithstanding the foregoing, if a Change in Corporate Control (as defined in Section 6(b)) occurs during the Term, the Term shall be extended until twenty-four (24) months after the Change in Corporate Control.

The Corporation shall be entitled to terminate this Agreement and the Executive’s employment immediately for any reason or no reason, subject to the continuing obligations of the Corporation under this Agreement.  Upon termination of the Executive’s employment hereunder, unless otherwise expressly provided by the Corporation’s Board of Directors (the “Board”), the Executive shall be deemed to have resigned from all positions that the Executive holds as an officer of the Corporation or any of its affiliates.

3.BASE COMPENSATION AND BONUS

(a)The Executive shall receive annual base compensation during the Term of this Agreement of not less than $484,500 in cash (“Base Compensation”).  Such amounts shall be payable in substantially equal semi-monthly installments in accordance with the Corporation’s customary payroll practices.  Subject to the terms of this Agreement, during the Term, the Compensation Committee of the Board (the “Compensation Committee”) shall consult with the CEO and review the Executive’s Base Compensation at annual intervals, and may adjust the Executive’s annual Base Compensation from time to time.

(b)The Executive shall also be eligible to receive an annual incentive cash bonus for each calendar year ending during the Term of this Agreement, with the actual amount of such bonus to be determined by the Compensation Committee, using such performance measures as the Compensation Committee deems to be appropriate.  Such bonus, if any, shall be paid to the Executive no

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later than sixty (60) days after the end of the year to which the bonus relates.  Except as otherwise provided in Sections 5 or 6, (i) the annual bonus will be subject to the terms of any Corporation bonus plan under which it is granted and (ii) in order to be eligible to receive an annual bonus, the Executive must be employed by the Corporation on the last day of the applicable calendar year.

4.ADDITIONAL COMPENSATION AND BENEFITS

The Executive shall receive the following additional compensation and welfare and fringe benefits during the Term:

(a)Long-Term Incentives.  During the Term of the Agreement, any stock options, restricted stock or other awards granted under the 2016 Long-Term Incentive Plan shall be at the discretion of the Compensation Committee.

(b)Health Insurance.  During the Term of this Agreement, the Corporation shall provide the Executive and her dependents with health insurance, life insurance and disability coverage no less favorable than that from time to time made available to other key employees.

(c)Paid Time Off.  During the Term of this Agreement, the Executive shall be entitled to paid time off (“PTO”) (based on the number of years of service) in accordance with the Corporation’s PTO policy, as it may be amended from time to time.

(d)Business Expenses.  During the Term of this Agreement, the Corporation shall reimburse the Executive for all reasonable expenses she incurs in promoting the Corporation’s business, including expenses for travel and similar items, upon presentation by the Executive from time to time of an itemized account of such expenditures in accordance with the Corporation’s established policies and applicable law.  Following Executive’s termination of employment, any expense reimbursement requests must be submitted no later than sixty (60) days following such termination.

(e)Other Benefits.  In addition to the benefits provided pursuant to the preceding paragraphs of this Section 4, the Executive shall be eligible to participate in such other executive compensation and retirement plans of the Corporation as are applicable generally to other officers, and in such welfare plans, programs, practices and policies of the Corporation as are generally applicable to other key employees, unless such participation would duplicate, directly or indirectly, benefits already accorded to the Executive.

5.PAYMENTS UPON TERMINATION

(a)Termination without Cause or Termination by Executive for Good Reason (as defined below).  If the Executive’s employment is terminated by the Corporation without Cause (but not including due to death or Disability) or terminated by the Executive for Good Reason during the Term of this Agreement, the Executive shall be entitled to the following:

(i)Base Compensation accrued through the date of termination, based on the number of days in such year that had elapsed as of the termination date;

(ii)any accrued but unpaid PTO through the date of termination;

(iii)any bonuses earned but unpaid with respect to fiscal years or other completed bonus periods preceding the termination date;

(iv)any nonforfeitable benefits payable to the Executive under the terms of any deferred compensation, incentive or other benefit plans maintained by the Corporation, payable in accordance with the terms of the applicable plan;

(v)any expenses owed to the Executive under Section 4(d); 

(vi)any pro-rated portion of the annual bonus that the Executive would have earned for the year in which the termination occurs (if she had remained employed for the entire year), based on the number of days in such year that had elapsed as of the termination date, payable at the time that the Corporation pays bonuses to its executive officers for such year;

(vii)all of Executive’s outstanding stock options, restricted stock or other equity awards with time-based vesting shall become fully vested and in the case of stock options, exercisable in full, and the Executive shall have the right to exercise such stock options during a period of ninety (90) days following the termination of employment;

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(viii)the treatment of all of Executive’s outstanding stock options, restricted stock, restricted stock units or other equity awards with performance-based vesting shall be determined in accordance with the long-term incentive plan, and any other plans, pursuant to which such awards were granted and the applicable award agreement;

(ix)continued coverage under any group health plan maintained by the Corporation in which the Executive participated at the time of her termination for the remainder of the Term of the Agreement (but not less than six (6) months and not more than the period during which the Executive would be entitled to continuation coverage under Section 4980B of the Code, if the Executive elected such coverage and paid the applicable premiums), or until, if earlier, the date the Executive obtains comparable coverage under benefit plans maintained by a new employer, at an after-tax cost to the Executive comparable to the cost that the Executive would have incurred for the same coverage had she remained employed during such period; and

(x)a series of semi-monthly severance payments for each complete calendar month during the remaining Term of this Agreement, but not less than twelve (12) months (the “Severance Period”), each semi-monthly payment in an amount equal to one-twenty fourth (1/24th) of the sum of (A) the Executive’s Base Compensation, as in effect on the date of termination, and (B) the average of annual cash bonuses paid to the Executive for the last three (3) fiscal years of the Corporation ending prior to the date of termination, to be paid in accordance with the Corporation’s normal payroll practices.

Notwithstanding anything in the long-term incentive plan, and any other plans, pursuant to which any equity awards are granted, or any applicable equity award agreements to the contrary, the payments set forth in subsections (vi), (vii), (viii), (ix) and (x) are subject to (a) a waiver and general release of claims in favor of the Corporation, in a form and manner satisfactory to the Corporation, that is executed by the Executive and which becomes irrevocable within sixty (60) days following the date of such termination, and (b) the Executive’s compliance with the restrictive covenants set forth in Sections 9 and 10  below during the Severance Period (the “Severance Requirement”).  Notwithstanding anything in the 2016 Long-Term Incentive Plan, any other plans pursuant to which any equity awards are granted, or any applicable equity award agreements to the contrary, upon any violation of the Severance Requirement during the Severance Period, all post-employment compensation set forth in subsections (vi), (vii), (viii), (ix) and (x) above shall immediately stop and the Executive shall be obligated to return to the Corporation any post-employment compensation previously paid or otherwise provided to the Executive.  The pro-rated bonus payable pursuant to subsection (vi) shall be paid in accordance with the provisions of Section 3(b) after the Compensation Committee has approved bonuses payable for the year.  All payments to be made or settlements to occur pursuant to subsection (vii) and (viii) (excluding stock options) shall be made to the Executive on the first business day following the date that is sixty (60) days following the date of such termination (except as otherwise expressly provided in the applicable award agreement).  The payments set forth in subsection (x) shall commence on the 60^th day following the date of such termination.

All payments required to be made pursuant to subsections (i), (ii), (iii), and (v) shall be made to the Executive within sixty (60) days following the date of such termination and within any shorter time period required by law.

For purposes of this Agreement, “Cause” shall mean:  (1) any action by the Executive involving willful disloyalty to the Corporation, such as embezzlement, fraud, misappropriation of corporate assets or a breach of the covenants set forth in Section 9 or 10  herein; (2) the Executive being convicted of a felony; (3) the Executive being convicted of any crime or offense that is not a felony but was (x) committed in connection with the performance of her duties hereunder or (y) involved moral turpitude; or (4) the intentional and willful failure by the Executive to substantially perform her duties hereunder as directed by the CEO (other than any such failure resulting from the Executive’s incapacity due to physical or mental disability) after a demand for substantial performance is made by the Board.

For purposes of this Agreement, “Good Reason” shall mean:  (1) the assignment of Executive to a position other than Executive Vice President – Business & Relationship Management of the Corporation (other than for Cause or by reason of disability), (2) the assignment of duties materially inconsistent with such position if such change in assignment constitutes (x) a material diminution in the Executive’s authority, duties or responsibilities, or (y) a change in the reporting structure such that the Executive is directed to report to anyone other than the Corporation’s CEO, or (3) a material breach by the Corporation of this Agreement; provided, however, Executive must not have consented to any such act or omission that could give rise to a claim for “Good Reason”, the Executive must have notified the Corporation in writing within the first thirty (30) days following the occurrence of any of the foregoing events and the Corporation must have failed to substantially cure such breach within thirty (30) days following its receipt of such notice from the Executive; and provided further, the Executive must have resigned under this paragraph within ninety (90) days following the occurrence of the event.  Notwithstanding the foregoing, any transfer of responsibilities in connection with succession planning and leadership transition shall in no event constitute Good Reason for purposes of this Agreement.

(b)Disability.  The Corporation shall be entitled to terminate the Executive’s employment if the Board determines that the Executive has been unable to engage in any substantial gainful activity by reason of any medically determinable physical or mental

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impairment that can be expected to result in death or which has lasted or can be expected to last for a continuous period of not less than 12 months, and the permanence and degree of which shall be supported by medical evidence satisfactory to the Committee (“Disability”).  Upon such termination, the Executive shall be entitled to the following:

(i)Base Compensation accrued through the date of termination, based on the number of days in such year that had elapsed as of the termination date;

(ii)any accrued but unpaid PTO through the date of termination;

(iii)any bonuses earned but unpaid with respect to fiscal years or other completed bonus periods preceding the termination date;

(iv)any nonforfeitable benefits payable to the Executive under the terms of any deferred compensation, incentive or other benefit plans maintained by the Corporation, payable in accordance with the terms of the applicable plan;

(v)any expenses owed to the Executive under Section 4(d); 

(vi)any pro-rated portion of the annual bonus that the Executive would have earned for the year in which the termination occurs (if she had remained employed for the entire year), based on the number of days in such year that had elapsed as of the termination date, payable at the time that the Corporation pays bonuses to its executive officers for such year; and

(vii)the treatment of all of Executive’s outstanding stock options, restricted stock, restricted stock units or other equity awards (whether subject to time-based vesting or performance-based vesting) shall be determined in accordance with the long-term incentive plan, and any other plans, pursuant to which such awards were granted and the applicable award agreement.

All payments required to be made pursuant to subsections (i), (ii), (iii) and (v) shall be made to the Executive within sixty (60) days following the date of such termination and within any shorter time period required by law.  The pro-rated bonus payable pursuant to subsection (vi) shall be paid in accordance with the provisions of Section 3(b) after the Compensation Committee has approved bonuses payable for the year.

(c)Termination for Cause.  If the Executive’s employment is terminated by the Corporation for Cause, the Executive shall be entitled to the following:

(i)Base Compensation accrued through the date of termination, based on the number of days in such year that had elapsed as of the termination date;

(ii)any accrued but unpaid PTO through the date of termination;

(iii)any bonuses earned but unpaid with respect to fiscal years or other completed bonus periods preceding the termination date;

(iv)any nonforfeitable benefits payable to the Executive under the terms of any deferred compensation, incentive or other benefit plans maintained by the Corporation, payable in accordance with the terms of the applicable plan; and

(v)any expenses owed to the Executive under Section 4(d). 

All payments required to be made pursuant to subsections (i), (ii), (iii) and (v) shall be made to the Executive within sixty (60) days following the date of such termination and within any shorter time period required by law.

(d)Voluntary Termination or Resignation by the Executive.  If the Executive voluntarily terminates (but not by reason of expiration of the Term) or resigns her employment other than for Good Reason, the Executive shall be entitled to the following:

(i)Base Compensation accrued through the date of termination, based on the number of days in such year that had elapsed as of the termination date;

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(ii)any accrued but unpaid PTO through the date of termination;

(iii)any bonuses earned but unpaid with respect to fiscal years or other completed bonus periods preceding the termination date;

(iv)any nonforfeitable benefits payable to the Executive under the terms of any deferred compensation, incentive or other benefit plans maintained by the Corporation, payable in accordance with the terms of the applicable plan; and

(v)any expenses owed to the Executive under Section 4(d). 

All payments required to be made pursuant to subsections (i), (ii), (iii) and (v) shall be made to the Executive within sixty (60) days following the date of such termination and within any shorter time period required by law.

(e)Termination upon Expiration of the Term.  If the Executive’s employment terminates as a result of the expiration of the Term of this Agreement, the Executive shall be entitled to the following:

(i)Base Compensation accrued through the date of termination, based on the number of days in such year that had elapsed as of the termination date;

(ii)any accrued but unpaid PTO through the date of termination;

(iii)any bonuses earned but unpaid with respect to fiscal years or other completed bonus periods preceding the termination date;

(iv)any nonforfeitable benefits payable to the Executive under the terms of any deferred compensation, incentive or other benefit plans maintained by the Corporation, payable in accordance with the terms of the applicable plan; and

(v)any expenses owed to the Executive under Section 4(d). 

All payments required to be made pursuant to subsections (i), (ii), (iii) and (v) shall be made to the Executive within sixty (60) days following the date of such termination and within any shorter time period required by law.

(f)Cooperation.  The parties agree that certain matters in which the Executive will be involved during the Term of this Agreement may necessitate the Executive’s cooperation in the future.  Accordingly, following the termination of the Executive’s employment for any reason, to the extent reasonably requested by the CEO or the Board, the Executive shall cooperate with the Corporation in connection with matters arising out of the Executive’s service to the Corporation; provided that, the Corporation shall make reasonable efforts to minimize disruption of the Executive’s other activities.  The Corporation shall reimburse the Executive for reasonable expenses incurred in connection with such cooperation.

6.CHANGE IN CORPORATE CONTROL

(a)If at any time upon, or during the period of twenty-four (24) consecutive months following, the occurrence of a Change in Corporate Control (as defined below), and during the Term of this Agreement, the Executive is involuntarily terminated (other than for Cause), or resigns her employment for Good Reason, the Executive shall be entitled to the following:

(i)Base Compensation accrued through the date of termination, based on the number of days in such year that had elapsed as of the termination date;

(ii)any accrued but unpaid PTO pay through the date of termination;

(iii)any bonuses earned but unpaid with respect to fiscal years or other completed bonus periods preceding the termination date;

(iv)any nonforfeitable benefits payable to the Executive under the terms of any deferred compensation, incentive or other benefit plans maintained by the Corporation, payable in accordance with the terms of the applicable plan;

(v)any expenses owed to the Executive under Section 4(d); 

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(vi)the pro-rated portion of the target annual bonus that the Executive would have earned for the year in which the termination occurs (if she had remained employed for the entire year), based on the number of days in such year that had elapsed as of the termination date;

(vii)all of Executive’s outstanding stock options, restricted stock or other equity awards with time-based vesting shall become fully vested and in the case of stock options, exercisable in full, and the Executive shall have the right to exercise such stock options during a period of ninety (90) days following the termination of employment, unless otherwise expressly provided in the applicable award agreement;

(viii)all of Executive’s outstanding stock options, restricted stock, restricted stock units or other equity awards with performance-based vesting shall become vested based upon a determination of actual level of achievement of performance goals by the Compensation Committee of the Board as of immediately prior to the occurrence of the Change of Corporate Control or as otherwise expressly provided in the applicable award agreements;

(ix)continued coverage pursuant to Section 601, et seq. of the Employee Retirement Income Security Act of 1974, as amended (“ERISA”) under any group health plan maintained by the Corporation in which the Executive participated at the time of her termination at an after-tax cost to the Executive comparable to the cost that the Executive would have incurred for the same coverage had she remained employed during such period for the remainder of the Term of the Agreement or until, if earlier, the date the Executive obtains comparable coverage under benefit plans maintained by a new employer or otherwise becomes ineligible to such continued coverage under ERISA; and

(x)a lump sum severance payment equal to the present value of a series of monthly severance payments for twenty-four (24) months, each in an amount equal to one-twelfth (1/12th) of the sum of (A) the Executive’s Base Compensation, as in effect at the time of the Change in Corporate Control, and (B) the average of annual bonuses paid to the Executive for the last three (3) fiscal years of the Corporation ending prior to the Change in Corporate Control.  Such present value shall be calculated using a discount rate equal to the interest rate on 90-day Treasury bills, as reported in The Wall Street Journal (or similar publication) on the date of the Change in Corporate Control.  For purposes of this subsection (x), the amount of any annual bonus paid for a portion of a fiscal year shall be annualized.

Notwithstanding anything in the long-term incentive plan, and any other plans, pursuant to which any equity awards are granted, or any applicable equity award agreements to the contrary, the payments set forth in subsections (vi), (vii), (viii), (ix) and (x) are subject to a waiver and general release of claims in favor of the Corporation, in a form and manner satisfactory to the Corporation, that is executed by the Executive and which becomes irrevocable within sixty (60) days following the date of such termination.  All payments to be made or settlements to occur pursuant to subsections (vii) and (viii) (excluding stock options) shall be made to the Executive on the first business day following the date that is sixty (60) days following the date of such termination (except as otherwise expressly provided in the applicable award agreement).  All payments required to be made pursuant to subsections (i), (ii), (iii), (v) and (vi) shall be made within sixty (60) days following the date of such termination and within any shorter time period required by law.  All payments required to be made pursuant to subsection (x) shall be made to the Executive on the first business day following the date that is sixty (60) days following the date of such termination.  Notwithstanding the foregoing, the severance payment under this Section shall be payable on a semi-monthly basis instead of a lump sum if the “Change in Corporate Control” does not constitute a “change in control event” within the meaning of Treasury Regulation Section 1.409A-3(i)(5) and shall in any event comply with the provisions of Section 8.

(b)For purposes of this Agreement, a “Change in Corporate Control” shall have the meaning set forth in the Corporation’s 2016 Long-Term Incentive Plan.

(c)Notwithstanding anything else in this Agreement to the contrary, in the event that it shall be determined that any payments or distributions by the Corporation to or for the benefit of the Executive, whether paid or payable or distributed or distributable pursuant to the terms of this Agreement or otherwise (together, the “Payments”) would constitute “parachute payments” within the meaning of Section 280G of the Code, then the Payments shall be payable either in (i) full or (ii) as to such lesser amount which would result in no portion of such Payments being subject to the excise tax imposed under Section 4999 of the Code, such that the Executive shall receive the greater, on an after-tax basis, of either (i) or (ii) above, as determined by an independent accountant or tax advisor (“Independent Tax Advisor”) selected by the Corporation.  In the event that the Payments are to be reduced pursuant to this Section 6(c), such Payments shall be reduced as determined by the Independent Tax Advisor such that the reduction of compensation to be provided to or for the benefit of the Executive as a result of this Section 6(c) is minimized and to effectuate that, Payments shall be reduced (i) by first reducing or eliminating the portion of such Payments which is not payable in cash (other than that portion of such payments that is subject to clause (iii) below), (ii) then by reducing or eliminating cash Payments (other than that portion of such Payments subject to clause (iii) below) and (iii) then by reducing or eliminating the portion of such Payments (whether or not payable

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in cash) to which Treas. Reg. §1.280G-1 Q/A 24(c) (or any successor provision thereto) applies, in each case in reverse order beginning with Payments which are to be paid the farthest in time from the date of the transaction constituting a change in ownership of the Corporation within the meaning of Section 280G of the Code.  Any reductions made pursuant to this Section 6(c) shall be made in a manner consistent with the requirements of Section 409A and where two economically equivalent amounts are subject to reduction but payable at different times, such amounts shall be reduced on a pro rata basis but not below zero.

(d)If any dispute arises between the Corporation (or any successor) and the Executive regarding Executive’s right to payments under this Section, the Executive shall be entitled to recover her attorneys’ fees and costs incurred in connection with such dispute if the Executive is determined to be the prevailing party.  The following additional terms and conditions shall apply to the reimbursement of any attorneys fees and costs: (i) the attorneys fees and costs must be incurred by the Executive within five years following the date of the Executive’s termination or resignation; (ii) the attorneys fees and costs shall be paid by the Corporation by the end of the taxable year following the year in which the attorneys fees and costs were incurred; (iii) the amount of any attorneys fees and costs paid by the Corporation in one taxable year shall not affect the amount of any attorneys fees and costs to be paid by the Corporation in any other taxable year; and (iv) the Executive’s right to receive attorneys fees and costs may not be liquidated or exchanged for any other benefit.

7.DEATH 

If the Executive dies during the Term of this Agreement, the Corporation shall pay to the Executive’s estate the following:

(i)Base Compensation accrued through the date of death, based on the number of days in such year that had elapsed as of the date of death;

(ii)any accrued but unpaid PTO through the date of death;

(iii)any bonuses earned but unpaid with respect to fiscal years or other completed bonus periods preceding the date of death;

(iv)any nonforfeitable benefits payable to the Executive under the terms of any deferred compensation, incentive or other benefit plans maintained by the Corporation, payable in accordance with the terms of the applicable plan;

(v)any expenses owed to the Executive under Sections 4(d); 

(vi)any pro-rated portion of the annual bonus that the Executive would have earned for the year in which the death occurs (if she had remained employed for the entire year), based on the number of days in such year that had elapsed as of the date of death), payable at the time that the Corporation pays bonuses to its executive officers for such year; and

(vii)the treatment of all of Executive’s outstanding stock options, restricted stock, restricted stock units or other equity awards (whether subject to time-based vesting or performance-based vesting) shall be determined in accordance with the long-term incentive plan, and any other plans, pursuant to which such awards were granted and the applicable award agreement.

All payments required to be made pursuant to subsections (i), (ii), (iii) and (v) shall be made to the estate within sixty (60) days following the date of death and within any shorter time period required by law.  All payments to be made pursuant to subsection (vii) (excluding stock options) shall be made to the Executive on the first business day following the date that is sixty (60) days following the date of such termination (except as otherwise expressly provided in the applicable award agreement).  The pro-rated bonus shall be paid in accordance with the provisions of Section 3(b) after the Compensation Committee has approved bonuses payable for the year.

8.WITHHOLDING AND SECTION 409A COMPLIANCE

(a)The Corporation shall, to the fullest extent not prohibited by law, have the right to withhold and deduct from any payment hereunder any federal, state or local taxes of any kind required by law to be withheld with respect to any such payment.

(b)This Agreement is intended to comply with the requirements of Section 409A of the Code or an exemption thereunder, and shall be interpreted and construed consistently with such intent.  The payments to the Executive pursuant to this Agreement are intended to be exempt from Section 409A of the Code to the maximum extent possible, under the separation pay exemption, as short-term deferrals, or otherwise.  For purposes of Section 409A of the Code, each installment payment provided under this Agreement shall

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be treated as a separate payment.  In the event the terms of this Agreement would subject the Executive to additional income taxes, interest or penalties under Section 409A of the Code (“409A Penalties”), the Corporation and the Executive shall cooperate diligently to amend the terms of the Agreement to avoid such 409A Penalties, to the extent possible.  To the extent any amounts under this Agreement are payable by reference to Executive’s “termination,” “termination of employment,” or similar phrases, such term shall be deemed to refer to the Executive’s “separation from service” (as defined in Section 409A of the Code).  Notwithstanding any other provision in this Agreement, including but not limited to Sections 5 and 6, if the Executive is a “specified employee” (as defined in Section 409A(a)(2)(b)(i)), then to the extent any amount payable under this Agreement (i) constitutes the payment of nonqualified deferred compensation, within the meaning of Section 409A of the Code, (ii) is payable upon the Executive’s separation from service, and (iii) under the terms of this Agreement would be payable prior to the six-month anniversary of the Executive’s separation from service, such payment shall be delayed and paid to the Executive, on the first day of the first calendar month beginning at least six months following the date of termination, or, if earlier, within ninety (90) days following the Executive’s death to the Executive’s surviving spouse (or such other beneficiary as the Executive may designate in writing).  Any reimbursement or advancement payable to the Executive pursuant to this Agreement shall be conditioned on the submission by the Executive of all expense reports reasonably required by the Corporation under any applicable expense reimbursement policy, and shall be paid to the Executive within thirty (30) days following receipt of such expense reports, but in no event later than the last day of the calendar year following the calendar year in which the Executive incurred the reimbursable expense.  Any amount of expenses eligible for reimbursement, or in-kind benefit provided, during a calendar year shall not affect the amount of expenses eligible for reimbursement, or in-kind benefit to be provided, during any other calendar year.  The right to any reimbursement or in-kind benefit pursuant to this Agreement shall not be subject to liquidation or exchange for any other benefit.

9.PROTECTION OF CONFIDENTIAL INFORMATION

The Executive hereby agrees that, during her employment with the Corporation and thereafter, she shall not, directly or indirectly, disclose or make available to any person, firm, corporation, association or other entity for any reason or purpose whatsoever, any Confidential Information (defined below).  The Executive further agrees that, upon the date of the Executive’s termination, all Confidential Information in her possession that is in written or other tangible form shall be returned to the Corporation and shall not be retained by the Executive or furnished to any third party, in any form except as provided herein.  Notwithstanding the foregoing, this Section 9 shall not apply to Confidential Information that (i) was publicly known at the time of disclosure to the Executive, (ii) becomes publicly known or available thereafter other than by any means in violation of this Agreement or any other duty owed to the Corporation by the Executive, (iii) is lawfully disclosed to the Executive by a third party, or (iv) is required to be disclosed by law or by any court, arbitrator or administrative or legislative body with actual or apparent jurisdiction to order the Executive to disclose or make accessible any information.  As used in this Agreement, Confidential Information means, without limitation, any non-public confidential or proprietary information disclosed to Executive or known by the Executive as a consequence of or through the Executive’s relationship with the Corporation, in any form, including electronic media.  Confidential Information also includes, but is not limited to, the Corporation’s business plans and financial information, marketing plans, and business opportunities.  Nothing herein shall limit in any way any obligation the Executive may have relating to Confidential Information under any other agreement or promise to the Corporation.

The Executive specifically acknowledges that all such Confidential Information, whether reduced to writing, maintained on any form of electronic media, or maintained in the mind or memory of the Executive and whether compiled by the Corporation, and/or the Executive, derives independent economic value from not being readily known to or ascertainable by proper means by others who can obtain economic value from its disclosure or use, that reasonable efforts have been made by the Corporation to maintain the secrecy of such information, that such information is the sole property of the Corporation and that any retention and use of such information by the Executive during her employment with the Corporation (except in the course of performing her duties and obligations to the Corporation) or after the termination of her employment shall constitute a misappropriation of the Corporation’s trade secrets.

The Executive agrees that Confidential Information gained by the Executive during the Executive’s association with the Corporation, has been developed by the Corporation through substantial expenditures of time, effort and money and constitute valuable and unique property of the Corporation.  The Executive recognizes that because her work for the Corporation will bring her into contact with confidential and proprietary information of the Corporation, the restrictions of this Section 9 are required for the reasonable protection of the Corporation and its investments and for the Corporation’s reliance on and confidence in the Executive.  The Executive further understands and agrees that the foregoing makes it necessary for the protection of the Corporation’s business that the Executive not compete with the Corporation during her employment with the Corporation and not compete with the Corporation for a reasonable period thereafter, as further provided in the following Section.

The Executive understands that nothing contained in this Agreement limits Executive’s ability to file a charge or complaint with the Equal Employment Opportunity Commission, the National Labor Relations Board, the Occupational Safety and Health Administration, the Securities and Exchange Commission or any other federal, state or local governmental agency or commission (each

8

a “Government Agency”).  Executive further understands that this Agreement does not limit Executive’s ability to communicate with any Government Agency or otherwise participate in any investigation or proceeding that may be conducted by any Government Agency, including providing documents or other information, without notice to the Company.  However, to the maximum extent permitted by law, the Executive agrees that if such a charge or complaint is made, the Executive shall not be entitled to recover any individual monetary relief or other individual remedies.  This Agreement does not limit or prohibit Executive’s right to receive an award for information provided to any Government Agency to the extent that such limitation or prohibition is a violation of law.

The Executive affirms that the Executive has not divulged any proprietary or confidential information of the Corporation and will continue to maintain the confidentiality of such information consistent with the Corporation’s policies and the Executive’s agreement(s) with the Corporation and/or common law.  The Executive further affirms that the Executive is not aware of and has not reported any allegations of wrongdoing by the Corporation or its officers or directors, including any allegations of corporate fraud, to a Government Agency or other person, and therefore has not been retaliated against for reporting any allegations of wrongdoing by the Corporation or its officers or directors, including any allegations of corporate fraud.

10.COVENANT NOT TO COMPETE

The Executive hereby agrees that she will not, either during the Term or at all times until one year from the time her employment ceases, or, if later, during any period in which she is receiving any severance or change in control payments under Sections 5(a) or 6  (the “Restricted Period”), engage in the (i) ownership or operation of Health Care Facilities (defined below); (ii) investment in or lending to Health Care Facilities; (iii) management of Health Care Facilities; or (iv) provision of any planning, development or executive services for Health Care Facilities.   “Health Care Facilities” means any senior housing facilities, facilities used or intended for the delivery of health care services, active adult communities, independent living facilities, assisted living facilities, skilled nursing facilities, inpatient rehabilitation facilities, ambulatory surgery centers, medical office buildings and/or hospitals.  The Executive will be deemed to be engaged in such competitive business activities if she participates in such a business enterprise as an employee, officer, director, consultant, agent, partner, proprietor, or other participant; provided that the ownership of no more than two percent (2%) of the stock of a publicly traded corporation engaged in a competitive business shall not be deemed to be engaging in competitive business activities.

During the Restricted Period, Executive will be prohibited, to the fullest extent allowed by applicable law, from directly or indirectly, individually or on behalf of any person or entity, encouraging, inducing, attempting to induce, recruiting, attempting to recruit, soliciting or attempting to solicit or participating in the recruitment for employment, contractor or consulting opportunities anyone who is employed at that time by the Corporation or any subsidiary or affiliate.

During her employment with the Corporation and thereafter, Executive will not make or authorize anyone else to make on Executive’s behalf any disparaging or untruthful remarks or statements, whether oral or written, about the Corporation, its operations or its products, services, affiliates, officers, directors, employees, or agents, or issue any communication that reflects adversely on or encourages any adverse action against the Corporation.  Executive will not make any direct or indirect written or oral statements to the press, television, radio or other media or other external persons or entities concerning any matters pertaining to the business and affairs of the Corporation, its affiliates or any of its officers or directors.

While employed by the Corporation and during the Restricted Period, the Executive will communicate the contents of this Section 10 to any person, firm, association, partnership, corporation or other entity that the Executive intends to be employed by, associated with, or represent.

11.INJUNCTIVE RELIEF

The Executive acknowledges and agrees that it would be difficult to fully compensate the Corporation for damages resulting from the breach or threatened breach of the covenants set forth in Sections 9 and 10  of this Agreement and accordingly agrees that the Corporation shall be entitled to temporary and injunctive relief, including temporary restraining orders, preliminary injunctions and permanent injunctions, without the need to post any bond, to enforce such provisions in any action or proceeding instituted in the United States District Court for the Northern District of Ohio or in any court in the State of Ohio having subject matter jurisdiction.  This provision with respect to injunctive relief shall not, however, diminish the Corporation’s right to claim and recover damages.

12.NOTICES 

All notices or communications hereunder shall be in writing and sent by overnight courier, certified mail, or registered mail, (return receipt requested), postage prepaid, addressed as follows (or to such other address as such party may designate in writing from time to time):

9

If to the Corporation:

Welltower Inc.
4500 Dorr Street
Toledo, OH 43615
Attention:  General Counsel

If to the Executive, at the address on file with the Corporation’s Human Resources department.

The actual date of mailing, as shown by a mailing receipt therefor, shall determine the time at which notice was given.

13.SEPARABILITY 

If any provision of this Agreement shall be declared to be invalid or unenforceable, in whole or in part, such invalidity or unenforceability shall not affect the remaining provisions hereof which shall remain in full force and effect.

It is expressly understood and agreed that although the parties consider the restrictions contained in this Agreement to be reasonable, if a court determines that the time or territory or any other restriction contained in this Agreement is an unenforceable restriction on the activities of the Executive, no such provision of this Agreement shall be rendered void but shall be deemed amended to apply as to such maximum time and territory and to such extent as such court may judicially determine or indicate to be reasonable.

14.ASSIGNMENT 

This Agreement shall be binding upon and inure to the benefit of the heirs and representatives of the Executive and the assigns and successors of the Corporation, but neither this Agreement nor any rights or obligations hereunder shall be assignable or otherwise subject to hypothecation by the Executive.

15.ENTIRE AGREEMENT

This Agreement represents the entire agreement of the parties and shall supersede any and all previous contracts, arrangements or understandings between the Corporation and the Executive (including the Prior Employment Agreement).  The Agreement may be amended at any time by mutual written agreement of the parties hereto.

16.GOVERNING LAW AND ARBITRATION

This Agreement shall be construed, interpreted, and governed in accordance with the laws of the State of Ohio, without regard to principles of conflicts of laws.

Any dispute, controversy or claim arising out of or related to this Agreement or any breach of this Agreement shall be submitted to and decided by binding arbitration.  Arbitration shall be administered exclusively by the American Arbitration Association and shall be conducted in accordance with the National Rules for the Resolution of Employment Disputes.  Any arbitral award determination shall be final and binding upon the parties.  Judgment may be entered in any court having jurisdiction.  Notwithstanding the foregoing, the Corporation shall be entitled to seek a restraining order or injunction in any court of competent jurisdiction to prevent any continuation of any violation of Sections 9 or 10 hereof.

17.SURVIVAL 

Subject to any limits on applicability contained therein, Sections 9 through 11 and Section 16 hereof shall survive and continue in full force in accordance with their terms notwithstanding any termination of the Term or this Agreement.

[Remainder of Page Intentionally Left Blank

10

IN WITNESS WHEREOF, the Corporation has caused this Agreement to be duly executed, and the Executive has hereunto set her hand, as of the day and year first above written.

WELLTOWER INC.

By:           /s/ Matthew McQueen                                                 

Name:      Matthew McQueen

Title:         Senior Vice President, General Counsel and Secretary

MERCEDES T. KERR, Executive

By:           /s/ Mercedes T. Kerr                                                     

11

EX-10.3

 

EXHIBIT 10.3

WELLTOWER INC.

Summary of Director Compensation

For each calendar year, each non-employee member of the Board of Directors of Welltower Inc. (the “Company”) will receive an annual retainer of $85,000, payable in equal quarterly installments. If there is a non-employee director serving as the Chairman of the Board, such individual will receive an additional retainer of $125,000. Additionally, the chairs of the Audit Committee, the Compensation Committee, the Nominating/Corporate Governance Committee and the Investment Committee will receive additional retainers of $25,000, $20,000, $15,000 and $20,000, respectively. If the Board of Directors holds more than four meetings in a year, each non-employee member of the Board will receive $1,500 for each meeting attended in excess of four meetings. With respect to the Audit, Compensation, Executive, Nominating/Corporate Governance and Investment Committees, if any of these committees holds more than four meetings in a year, each non-employee member of these committees will receive $1,000 for each meeting attended in excess of four meetings. 

Each of the non-employee directors will receive, in each calendar year, a grant of deferred stock units with a value of $140,000, pursuant to the Company’s 2016 Long-Term Incentive Plan. The deferred stock units will be convertible into shares of common stock of the Company on the anniversary of the date of the grant. Recipients of the deferred stock units also will be entitled to dividend equivalent rights.

1

EX-12

 

EXHIBIT 12
STATEMENT REGARDING COMPUTATION OF RATIO OF EARNINGS TO FIXED CHARGES AND RATIO OF EARNINGS TO COMBINED FIXED CHARGES AND PREFERRED STOCK DIVIDENDS (UNAUDITED)
	Year Ended December 31,										Six Months Ended June 30,
(dollars in thousands)	2012		2013		2014		2015		2016		2016		2017
Earnings:
Pretax income from continuing operations before adjustment for income or loss from equity investees(1)	$	185,912	$	102,245	$	384,213	$	636,117	$	709,253	$	378,232	$	275,686
Fixed charges		359,947		460,918		485,762		498,253		536,607		271,708		237,689
Capitalized interest		(9,777)		(6,700)		(7,150)		(8,670)		(16,943)		(7,343)		(7,488)
Amortized premiums, discounts and capitalized expenses related to indebtedness		11,395		4,142		2,427		2,586		1,681		920		4,626
Noncontrolling interest in pre-tax income of subsidiaries that have not incurred fixed charges		2,415		6,770		(147)		(4,799)		(4,267)		924		(4,156)
Earnings	$	549,892	$	567,375	$	865,105	$	1,123,487	$	1,226,331	$	644,441	$	506,357
Fixed charges:
Interest expense(1)	$	361,565	$	458,360	$	481,039	$	492,169	$	521,345	$	265,285	$	234,827
Capitalized interest		9,777		6,700		7,150		8,670		16,943		7,343		7,488
Amortized premiums, discounts and capitalized expenses related to indebtedness		(11,395)		(4,142)		(2,427)		(2,586)		(1,681)		(920)		(4,626)
Fixed charges	$	359,947	$	460,918	$	485,762	$	498,253	$	536,607	$	271,708	$	237,689
Consolidated ratio of earnings to fixed charges		1.53		1.23		1.78		2.25		2.29		2.37		2.13
Earnings:
Pretax income from continuing operations before adjustment for income or loss from equity investees(1)	$	185,912	$	102,245	$	384,213	$	636,117	$	709,253	$	378,232	$	275,686
Fixed charges		359,947		460,918		485,762		498,253		536,607		271,708		237,689
Capitalized interest		(9,777)		(6,700)		(7,150)		(8,670)		(16,943)		(7,343)		(7,488)
Amortized premiums, discounts and capitalized expenses related to indebtedness		11,395		4,142		2,427		2,586		1,681		920		4,626
Noncontrolling interest in pre-tax income of subsidiaries that have not incurred fixed charges		2,415		6,770		(147)		(4,799)		(4,267)		924		(4,156)
Earnings	$	549,892	$	567,375	$	865,105	$	1,123,487	$	1,226,331	$	644,441	$	506,357
Fixed charges:
Interest expense(1)	$	361,565	$	458,360	$	481,039	$	492,169	$	521,345	$	265,285	$	234,827
Capitalized interest		9,777		6,700		7,150		8,670		16,943		7,343		7,488
Amortized premiums, discounts and capitalized expenses related to indebtedness		(11,395)		(4,142)		(2,427)		(2,586)		(1,681)		(920)		(4,626)
Fixed charges		359,947		460,918		485,762		498,253		536,607		271,708		237,689
Preferred stock dividends		69,129		66,336		65,408		65,406		65,406		32,703		26,059
Combined fixed charges and preferred stock dividends	$	429,076	$	527,254	$	551,170	$	563,659	$	602,013	$	304,411	$	263,748
Consolidated ratio of earnings to combined fixed charges and preferred stock dividends		1.28		1.08		1.57		1.99		2.04		2.12		1.92
(1) We have reclassified the income and expenses attributable to the properties sold prior to or held for sale at January 1, 2014 to discontinued operations.

1

EX-31.1

 

EXHIBIT 31.1

CERTIFICATION OF CHIEF EXECUTIVE OFFICER

I, Thomas J. DeRosa, certify that:

1.	I have reviewed this quarterly report on Form 10-Q of Welltower Inc.;
2.	Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3.	Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
4.	The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a)	Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
(b)	Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, 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;
(c)	Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
(d)	Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a)	All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
(b)	Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: July 28, 2017

/s/ THOMAS J. DEROSA

Thomas J. DeRosa, 

Chief Executive Officer 

1

EX-31.2

 

EXHIBIT 31.2

CERTIFICATION OF CHIEF FINANCIAL OFFICER

I, Scott A. Estes, certify that:

1.	I have reviewed this quarterly report on Form 10-Q of Welltower Inc.;
2.	Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3.	Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
4.	The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a)	Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
(b)	Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, 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;
(c)	Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
(d)	Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a)	All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
(b)	Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: July 28, 2017

/s/ SCOTT A. ESTES

Scott A. Estes, 

Chief Financial Officer 

1

EX-32.1

 

EXHIBIT 32.1

CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350

          I, Thomas J. DeRosa, the Chief Executive Officer of Welltower Inc. (the “Company”), certify, pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (18 U.S.C. Section 1350), that (i) the Quarterly Report on Form 10-Q for the Company for the quarter ended June 30, 2017 (the “Report”), fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934 and (ii) the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

/s/ THOMAS J. DEROSA

Thomas J. DeRosa, 

Chief Executive Officer

 Date: July 28, 2017

A signed original of this written statement required by Section 906 has been provided to the Company and will be retained by the Company and furnished to the Securities and Exchange Commission or its staff upon request.

1

EX-32.2

 

EXHIBIT 32.2

CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350

          I, Scott A. Estes, the Chief Financial Officer of Welltower Inc. (the “Company”), certify, pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (18 U.S.C. Section 1350), that (i) the Quarterly Report on Form 10-Q for the Company for the quarter ended June 30, 2017 (the “Report”), fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934 and (ii) the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

/s/ SCOTT A. ESTES

Scott A. Estes, 

Chief Financial Officer

 Date: July 28, 2017 

A signed original of this written statement required by Section 906 has been provided to the Company and will be retained by the Company and furnished to the Securities and Exchange Commission or its staff upon request.

1

XML

Document and Entity Information - USD ($)	6 Months Ended
	Jun. 30, 2017	Jul. 14, 2017
Document And Entity Information [Abstract]
Entity Registrant Name	WELLTOWER INC. /DE/
Entity Central Index Key	0000766704
Document Type	10-Q
Document Period End date	Jun. 30, 2017
Amendment Flag	false
Document Fiscal Year Focus	2017
Document Fiscal Period Focus	Q2
Current Fiscal Year End Date	--12-31
Entity Well Known Seasoned Issuer	Yes
Entity Voluntary Filers	No
Entity Current Reporting Status	Yes
Entity Filer Category	Large Accelerated Filer
Entity Public Float	$ 27,562,002,967
Entity Common Stock Shares Outstanding		368,878,685

XML

Consolidated Balance Sheets (Unaudited) - USD ($) $ in Thousands	Jun. 30, 2017		Dec. 31, 2016
Real property owned:
Land and land improvements	$ 2,746,483		$ 2,591,071
Buildings and improvements	25,399,178		24,496,153
Acquired lease intangibles	1,436,041		1,402,884
Real property held for sale, net of accumulated depreciation	141,319		1,044,859
Construction in progress	321,655		506,091
Gross real property owned	30,044,676		30,041,058
Less accumulated depreciation and amortization	(4,568,408)		(4,093,494)
Net real property owned	25,476,268		25,947,564
Real estate loans receivable:
Real estate loans receivable	520,479		622,628
Allowance for losses on loans receivable	(5,811)		(6,563)
Net real estate loans receivable	514,668		616,065
Net real estate investments	25,990,936		26,563,629
Other assets:
Investments in unconsolidated entities	425,489		457,138
Goodwill	68,321		68,321
Cash and cash equivalents	442,284		419,378
Restricted cash	45,357		187,842
Straight-line rent receivable	370,819		342,578
Receivables and other assets	632,580		826,298
Total other assets	1,984,850		2,301,555
Total assets	27,975,786		28,865,184
Liabilities:
Borrowings under primary unsecured credit facilities, Carrying Value	385,000	[1]	645,000
Senior unsecured notes	8,250,940		8,161,619
Secured debt	2,670,914		3,477,699
Capital lease obligations	73,092		73,927
Accrued expenses and other liabilities	893,441		827,034
Total liabilities	12,273,387		13,185,279
Redeemable noncontrolling interests	388,876		398,433
Equity:
Preferred stock	718,750		1,006,250
Common stock	369,525		363,071
Capital in excess of par value	17,439,977		16,999,691
Treasury stock	(62,335)		(54,741)
Cumulative net income	5,330,702		4,803,575
Cumulative dividends	(8,805,336)		(8,144,981)
Accumulated other comprehensive income (loss)	(163,624)		(169,531)
Other equity	1,173		3,059
Total Welltower Inc. stockholders' equity	14,828,832		14,806,393
Noncontrolling interests	484,691		475,079
Total equity	15,313,523		15,281,472
Total liabilities and equity	$ 27,975,786		$ 28,865,184

[1] As of June 30, 2017, letters of credit in the aggregate amount of $32,456,000 have been issued, which reduces the borrowing capacity on the unsecured revolving credit facility.

XML

Consolidated Statements of Income (Unaudited) - USD ($) shares in Thousands, $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2017	Jun. 30, 2016	Jun. 30, 2017	Jun. 30, 2016
Revenues:
Rental income	$ 355,599	$ 422,628	$ 722,741	$ 838,290
Resident fees and services	677,040	615,220	1,347,377	1,217,369
Interest income	20,901	24,007	41,649	49,195
Other income	5,062	14,802	9,133	18,851
Total revenues	1,058,602	1,076,657	2,120,900	2,123,705
Expenses:
Interest expense	116,231	132,326	234,827	265,285
Property operating expenses	501,855	458,832	1,012,024	908,468
Depreciation and amortization	224,847	226,569	453,124	455,265
General and administrative	32,632	39,914	63,733	85,606
Transaction costs	0	5,157	0	13,365
Loss (gain) on derivatives, net	736	0	1,960	0
Loss (gain) on extinguishment of debt, net	5,515	33	36,870	9
Impairment of Asset	13,631	0	24,662	14,314
Other expenses	6,339	3,161	18,014	3,161
Total expenses	901,786	865,992	1,845,214	1,745,473
Income (loss) from continuing operations before income taxes and income from unconsolidated entities, total	156,816	210,665	275,686	378,232
Income tax expense	8,448	513	6,203	2,239
(Loss) income from unconsolidated entities	(3,978)	(1,959)	(27,084)	(5,778)
Income from continuing operations	161,286	209,219	254,805	374,693
Gain (loss) on real estate dispositions, net	42,155	1,530	286,247	1,530
Net income	203,441	210,749	541,052	376,223
Less: Preferred stock dividends	11,680	16,352	26,059	32,703
Preferred stock redemption charge	0	0	9,769	0
Less: Net income (loss) attributable to noncontrolling interests	3,332	(1,077)	4,156	(924)
Net income (loss) attributable to common stockholders	$ 188,429	$ 195,474	$ 501,068	$ 344,444
Average number of common shares outstanding:
Basic	366,524	356,646	364,551	355,879
Diluted	368,149	358,891	366,423	357,489
Basic:
Income (loss) from continuing operations attributable to common stockholders, including real estate dispositions	$ 0.51	$ 0.55	$ 1.37	$ 0.97
Net income (loss) attributable to common stockholders, total	0.51	0.55	1.37	0.97
Diluted:
Income (loss) from continuing operations attributable to common stockholders, including real estate dispositions	0.51	0.54	1.37	0.96
Net income (loss) attributable to common stockholders, total	0.51	0.54	1.37	0.96
Dividends declared and paid per common share	$ 0.87	$ 0.86	$ 1.74	$ 1.72

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Consolidated Statements of Comprehensive Income (Unaudited) - USD ($) $ in Thousands		3 Months Ended		6 Months Ended
		Jun. 30, 2017	Jun. 30, 2016	Jun. 30, 2017	Jun. 30, 2016
Statement of Comprehensive Income [Abstract]
Net income		$ 203,441	$ 210,749	$ 541,052	$ 376,223
Other comprehensive income (loss):
Unrecognized gain (loss) on equity investments		(5,908)	(3,611)	(16,477)	(11,160)
Unrecognized gain (loss) on cash flow hedges		0	487	0	970
Unrecognized actuarial gain/(loss)		0	0	0	2
Unrecognized gain (loss) on foreign currency translation		27,713	(50,384)	33,426	(49,012)
Total other comprehensive income (loss)		21,805	(53,508)	16,949	(59,200)
Total comprehensive income (loss), total		225,246	157,241	558,001	317,023
Total comprehensive income (loss) attributable to noncontrolling interests	[1]	11,562	(4,000)	15,198	11,271
Comprehensive income (loss) attributable to controlling interests		$ 213,684	$ 161,241	$ 542,803	$ 305,752

[1] Includes amounts attributable to redeemable noncontrolling interests.

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Consolidated Statements of Equity (Unaudited) - USD ($) $ in Thousands	Total	Preferred Stock	Common Stock	Capital in Excess of Par Value	Treasury Stock	Cumulative Net Income	Cumulative Dividends	Accumulated Other Comprehensive Income (Loss)	Other Equity	Noncontrolling Interests
Balances at beginning of period at Dec. 31, 2015	$ 15,175,885	$ 1,006,250	$ 354,811	$ 16,478,300	$ (44,372)	$ 3,725,772	$ (6,846,056)	$ (88,243)	$ 4,098	$ 585,325
Comprehensive income:
Net income (loss)	380,236					377,147				3,089
Other comprehensive income	(59,200)							(71,395)		12,195
Total comprehensive income	321,036
Decrease in noncontrolling interests	(167,073)			(41,658)						(125,415)
Amounts related to stock incentive plans, net of forfeitures	25,727		688	32,284	(6,916)				(329)
Proceeds from issuance of common stock	158,711		2,451	156,260
Option compensation expense	148								148
Cash dividends paid:
Common stock	(613,163)						(613,163)
Preferred Stock	(32,703)						(32,703)
Balances at end of period at Jun. 30, 2016	14,868,568	1,006,250	357,950	16,625,186	(51,288)	4,102,919	(7,491,922)	(159,638)	3,917	475,194
Balances at beginning of period at Dec. 31, 2016	15,281,472	1,006,250	363,071	16,999,691	(54,741)	4,803,575	(8,144,981)	(169,531)	3,059	475,079
Comprehensive income:
Net income (loss)	542,198					536,896				5,302
Other comprehensive income	16,949							5,907		11,042
Total comprehensive income	559,147
Decrease in noncontrolling interests	(10,979)			(4,247)						(6,732)
Amounts related to stock incentive plans, net of forfeitures	2,661		337	11,803	(7,583)				(1,896)
Proceeds from issuance of common stock	423,532		6,026	417,506
Redemption of preferred stock	(287,509)	(287,500)		9,760		(9,769)
Redemption of equity membership units	5,544		91	5,464	(11)
Option compensation expense	10								10
Cash dividends paid:
Common stock	(634,296)						(634,296)
Preferred Stock	(26,059)						(26,059)
Balances at end of period at Jun. 30, 2017	$ 15,313,523	$ 718,750	$ 369,525	$ 17,439,977	$ (62,335)	$ 5,330,702	$ (8,805,336)	$ (163,624)	$ 1,173	$ 484,691

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Consolidated Statements of Cash Flows (Unaudited) - USD ($) $ in Thousands		6 Months Ended
		Jun. 30, 2017	Jun. 30, 2016
Operating activities
Net income (loss)		$ 541,052	$ 376,223
Adjustments to reconcile net income to net cash provided from (used in) operating activities:
Depreciation and amortization		453,124	455,265
Other amortization expenses		7,789	3,141
Asset Impairment Charges		24,662	14,314
Stock-based compensation expense		9,669	15,217
Loss (gain) on derivatives, net		1,960	0
Loss (gain) on extinguishment of debt, net		36,870	9
Income from unconsolidated entities		27,084	5,778
Rental income in excess of cash received		(41,325)	(54,055)
Amortization related to above (below) market leases, net		48	332
Net loss (gain) on sales of properties		(286,247)	(1,530)
Distributions by unconsolidated entities		3,225	351
Increase (decrease) in accrued expenses and other liabilities		70,005	43,621
Decrease (increase) in receivables and other assets		(3,807)	(3,009)
Net cash provided from (used in) operating activities		844,109	855,657
Investing activities
Cash disbursed for acquisitions		(237,119)	(287,455)
Cash disbursed for capital improvements to existing properties		(93,147)	(87,529)
Cash disbursed for construction in progress		(149,046)	(249,867)
Capitalized interest		(7,488)	(7,343)
Investment in real estate loans receivable		(50,717)	(51,059)
Other investments, net of payments		52,457	(16,664)
Principal collected on real estate loans receivable		36,500	168,343
Contributions to unconsolidated entities		(65,631)	(39,644)
Distributions by unconsolidated entities		47,384	19,301
Proceeds from (payments on) derivatives investing		19,665	56,842
Decrease (increase) in restricted cash		142,485	3,342
Proceeds from sales of real property		1,203,782	130,298
Net cash provided from (used in) investing activities		899,125	(361,435)
Financing activities
Net increase (decrease) under unsecured lines of credit arrangements		(260,000)	(90,000)
Proceeds from issuance of senior unsecured notes		0	693,560
Payments to extinguish senior unsecured notes		0	(400,000)
Secured debt issued		161,799	161,992
Payments on secured debt		(1,020,129)	(281,051)
Net proceeds from the issuance of common stock		424,451	159,032
Redemption of preferred stock		(287,500)	0
Decrease (increase) in deferred loan costs		(52,838)	(17,439)
Contributions by noncontrolling interests	[1]	9,663	138,458
Distributions to noncontrolling interests	[1]	(38,143)	(91,133)
Cash distributions to stockholders		(660,355)	(645,866)
Other financing activities		(8,925)	(7,646)
Net cash provided from (used in) financing activities		(1,731,977)	(380,093)
Effect of foreign currency translation on cash and cash equivalents		11,649	(8,452)
Increase (decrease) in cash and cash equivalents		22,906	105,677
Cash and cash equivalents at beginning of period		419,378	360,908
Cash and cash equivalents at end of period		442,284	466,585
Supplemental cash flow information:
Interest paid		210,184	236,861
Income taxes paid		$ 4,360	$ 3,889

[1] (1) Includes amounts attributable to redeemable noncontrolling interests.

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Business

6 Months Ended

Jun. 30, 2017

Business [Abstract]

Business

1. Business

Welltower Inc., an S&P 500 company headquartered in Toledo, Ohio, is driving the transformation of health care infrastructure. The company invests with leading seniors housingoperators, post-acute providers and health systems to fund the real estate and infrastructure needed to scale innovative care delivery models and improve people’s wellness and overall health care experience. Welltower™, a real estate investment trust (“REIT”), owns interests in properties concentrated in major, high-growth markets in the United States, Canada and the United Kingdom, consisting of seniors housing and post-acute communities and outpatient medical properties. Founded in 1970, we were the first real estate investment trust to invest exclusively in health care facilities.

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Accounting Policies and Related Matters

6 Months Ended

Jun. 30, 2017

Accounting Policies and Related Matters [Abstract]

Accounting Policies and Related Matters

2. Accounting Policies and Related Matters

Basis of Presentation

The accompanying unaudited consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles (“U.S. GAAP”) for interim financial information and with instructions to Quarterly Report on Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by U.S. GAAP for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included. Operating results for the six months ended June 30, 2017 are not necessarily an indication of the results that may be expected for the year ending December 31, 2017. For further information, refer to the financial statements and notes thereto included in our Annual Report on Form 10-K for the year ended December 31, 2016.

New Accounting Standards

In May 2014, the Financial Accounting Standards Board (the “FASB”) issued ASU No. 2014-09, “Revenue from Contracts with Customers (Topic 606)”. The standard is a comprehensive new revenue recognition model that requires revenue to be recognized in a manner to depict the transfer of goods or services to a customer at an amount that reflects the consideration expected to be received in exchange for those goods or services. ASU 2014-09 is effective for fiscal years, and interim periods within those years, beginning after December 15, 2017, and early adoption is permitted beginning after December 15, 2016. A reporting entity may apply the new standard using either a modified retrospective approach by recording a cumulative-effect adjustment to equity as of the beginning of the fiscal year of adoption or a full retrospective approach. We are currently evaluating the impact that the adoption of the standard will have on our consolidated financial statements and have not yet determined the method by which we will adopt the new standard. A significant source of our revenue is generated through leasing arrangements, which are specifically excluded from the new standard. We expect that the new standard will affect our accounting policies related to non-lease revenue, including certain fees in our RIDEA joint ventures, common area maintenance in our outpatient medical properties and real estate sales. Under ASU 2014-09, revenue recognition for real estate sales is mainly based on the transfer of control versus current guidance of continuing involvement. We expect that the new guidance will result in more transactions qualifying as sales of real estate and being recognized at an earlier date than under the current guidance.

In January 2016, the FASB issued ASU No. 2016-01, “Financial Instruments – Overall: Recognition and Measurement of Financial Assets and Financial Liabilities,” which will require entities to measure their investments at fair value and recognize any changes in fair value in net income unless the investments qualify for the new practicability exception. The practicability exception will be available for equity investments that do not have readily determinable fair values. ASU 2016-01 is effective for fiscal years and interim periods within those years, beginning after December 15, 2017. We are currently evaluating the impact that the standard will have on our consolidated financial statements.

In February 2016, the FASB issued ASU No. 2016-02, “Leases (Topic 842),” which requires lessees to recognize assets and liabilities on their balance sheet related to the rights and obligations created by most leases, while continuing to recognize expenses on their income statements over the lease term. It will also require disclosures designed to give financial statement users information regarding amount, timing, and uncertainty of cash flows arising from leases. ASU 2016-02 is effective for fiscal years, and interim periods within those years, beginning after December 15, 2018, and early adoption is permitted. Entities are required to use a modified retrospective approach for leases that exist or are entered into after the beginning of the earliest comparative period in the financial statements. We are currently evaluating the impact of this standard on our consolidated financial statements. We believe that the adoption of this standard will likely have a material impact to our consolidated balance sheet for the recognition of certain operating leases as right-of-use assets and lease liabilities. We are in the process of analyzing our lease portfolio and evaluating systems to comply with the standard’s retrospective adoption requirements.

In March 2016, the FASB issued ASU No. 2016-09, “Improvements to Employee Share-Based Payment Accounting”. ASU 2016-09 is effective for fiscal years, and interim periods within those years, beginning after December 15, 2016, and early adoption is permitted. We adopted ASU 2016-09 on January 1, 2017. The standard allows companies to make a policy election as to whether they will include an estimate of awards expected to be forfeited or whether they will account for forfeitures as they occur. We have elected to account for forfeitures as they occur. This election had an immaterial impact on our consolidated financial statements. The standard also requires an employer to classify as a financing activity in the statement of cash flow the cash paid to a tax authority when shares are withheld to satisfy the employer’s statutory income tax withholding obligation. This standard is required to be applied on a retrospective basis and resulted in an increase in net cash provided by operating activities and a decrease in net cash used in financing activities of $6,916,000 for the six months ended June 30, 2016. Upon adoption, no other provisions of ASU 2016-09 had an effect on our unaudited consolidated financial statements or related footnote disclosures.

In June 2016, the FASB issued ASU No. 2016-13, “Measurement of Credit Losses on Financial Instruments”. This standard requires a new forward-looking “expected loss” model to be used for receivables, held-to-maturity debt, loans, and other instruments. ASU 2016-13 is effective for fiscal years, and interim periods within those years, beginning after December 15, 2019, and early adoption is permitted for fiscal years beginning after December 15, 2018. We are currently evaluating the impact that the standard will have on our consolidated financial statements.

In January 2017, the FASB issued ASU No. 2017-01, “Clarifying the Definition of a Business”. This standard changes the definition of a business to assist entities with evaluating when a set of transferred assets and activities is a business. ASU 2017-01 is effective for fiscal years, and interim periods within those years, beginning after December 15, 2017, and early adoption is permitted. A reporting entity must apply ASU 2017-01 using a prospective approach. We adopted ASU 2017-01 on January 1, 2017 and as a result, have classified our real estate acquisitions completed during the six months endedJune 30, 2017as asset acquisitions rather than business combinations due to the fact that substantially all of the fair value of the gross assets acquired were concentrated in a single asset or group of similar identifiable assets. We have recorded identifiable assets acquired, liabilities assumed and any noncontrolling interests associated with any asset acquisitions at cost on a relative fair value basis and have capitalized transaction costs incurred.

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Real Property Acquisitions and Development

6 Months Ended

Jun. 30, 2017

Real Property Acquisitions and Development [Abstract]

Real Property Acquisitions and Development

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 relative 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 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. Effective January 1, 2017, with our adoption of ASU 2017-01, transaction costs related to asset acquisitions are capitalized as a component of purchase price and all other non-capitalizable costs are reflected in “Other Expenses” on our Consolidated Statements of Comprehensive Income. Certain of our subsidiaries’ functional currencies are the local currencies of their respective countries. See Note 2 to the financial statements included in our Annual Report on Form 10-K for the year ended December 31, 2016 for information regarding our foreign currency policies.

Triple-net Activity

		Six Months Ended
(In thousands)		June 30, 2017			June 30, 2016
Land and land improvements			$	30,440		$	18,901
Buildings and improvements				188,569			160,209
Acquired lease intangibles				-			2,876
	Total assets acquired			219,009			181,986
Accrued expenses and other liabilities				(20,855)			(1,459)
	Total liabilities assumed			(20,855)			(1,459)
Noncontrolling interests				(7,284)			-
Non-cash acquisition related activity(1)				(54,989)			(37,703)
	Cash disbursed for acquisitions			135,881			142,824
Construction in progress additions				76,245			85,687
Less:	Capitalized interest			(3,215)			(3,771)
	Foreign currency translation			(3,044)			(2,712)
Cash disbursed for construction in progress				69,986			79,204
Capital improvements to existing properties				15,269			14,877
	Total cash invested in real property, net of cash acquired		$	221,136		$	236,905
(1) For the six months ended June 30, 2017, $54,989,000 is related to the acquisition of assets previously financed as real estate loans receivable. For the six months ended June 30, 2016, $31,014,000 is related to the acquisition of assets previously financed as real estate loans receivable and $6,630,000 is related to the acquisition of assets previously financed as an investment in an unconsolidated entity.

Seniors Housing Operating Activity

		Six Months Ended
(In thousands)		June 30, 2017			June 30, 2016
Land and land improvements			$	10,590		$	5,617
Building and improvements				69,056			128,200
Acquired lease intangibles				3,596			6,334
Receivables and other assets				296			894
	Total assets acquired(1)			83,538			141,045
Accrued expenses and other liabilities				(8,606)			(4,853)
	Total liabilities assumed			(8,606)			(4,853)
Noncontrolling interests				(647)			(549)
Non-cash acquisition related activity(2)				(31,546)			(7,659)
	Cash disbursed for acquisitions			42,739			127,984
Construction in progress additions				42,787			134,019
Less:	Capitalized interest			(3,804)			(2,011)
	Foreign currency translation			3,060			(5,344)
Cash disbursed for construction in progress				42,043			126,664
Capital improvements to existing properties				60,129			47,553
	Total cash invested in real property, net of cash acquired		$	144,911		$	302,201
(1) Excludes $400,000and $134,000 of cash acquired during the six months ended June 30, 2017 and 2016, respectively.
(2) Includes $6,349,000 related to the acquisition of assets previously financed as real estate loans receivable during the six months ended June 30, 2017. Includes $25,197,000 and $7,659,000 for the six months ended June 30, 2017 and 2016 related to the acquisition of assets previously financed as an investments in an unconsolidated entity.

Outpatient Medical Activity

		Six Months Ended
(In thousands)		June 30, 2017			June 30, 2016
Land and land improvements			$	25,060	$	-
Buildings and improvements				62,038		32,650
Acquired lease intangibles				8,397		-
Receivables and other assets				118		-
	Total assets acquired			95,613		32,650
Secured debt				(25,824)		-
Accrued expenses and other liabilities				(2,210)		(990)
	Total liabilities assumed			(28,034)		(990)
Noncontrolling interests				(9,080)		-
Non-cash acquisition activity(1)				-		(15,013)
	Cash disbursed for acquisitions			58,499		16,647
Construction in progress additions				31,830		50,896
Less:	Capitalized interest			(1,343)		(1,561)
	Accruals(2)			6,530		(5,336)
Cash disbursed for construction in progress				37,017		43,999
Capital improvements to existing properties				17,409		25,099
	Total cash invested in real property		$	112,925	$	85,745
(1) Represents the acquisition of assets previously financed as real estate loans receivable. Please refer to Note 6 for additional information.
(2) Represents the change in non-cash consideration accruals for amounts to be paid in periods other than the period in which the construction projects converted to operations.

Construction Activity

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

			Six Months Ended
			June 30, 2017			June 30, 2016
	Development projects:
		Triple-net		$	266,650		$	-
		Seniors housing operating			3,634			-
		Outpatient medical			63,036			35,363
	Total development projects				333,320			35,363
	Expansion projects				2,798			2,879
Total construction in progress conversions				$	336,118		$	38,242

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Real Estate Intangibles

6 Months Ended

Jun. 30, 2017

Real Estate Intangibles [Abstract]

Real Estate Intangibles

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):

		June 30, 2017		December 31, 2016
Assets:
	In place lease intangibles	$	1,278,755	$	1,252,143
	Above market tenant leases		64,408		61,700
	Below market ground leases		62,224		61,628
	Lease commissions		30,654		27,413
	Gross historical cost		1,436,041		1,402,884
	Accumulated amortization		(1,053,353)		(966,714)
	Net book value	$	382,688	$	436,170
	Weighted-average amortization period in years		15.1		13.7
Liabilities:
	Below market tenant leases	$	90,683	$	89,468
	Above market ground leases		8,540		8,107
	Gross historical cost		99,223		97,575
	Accumulated amortization		(55,749)		(52,134)
	Net book value	$	43,474	$	45,441
	Weighted-average amortization period in years		15.4		15.2

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

	Three Months Ended				Six Months Ended
	June 30,				June 30,
	2017		2016		2017		2016
Rental income related to above/below market tenant leases, net	$	267	$	210	$	571	$	290
Property operating expenses related to above/below market ground leases, net		(307)		(311)		(619)		(622)
Depreciation and amortization related to in place lease intangibles and lease commissions		(35,439)		(31,109)		(74,741)		(65,473)

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

		Assets		Liabilities
2017	$	71,356	$	3,337
2018		83,762		6,190
2019		35,095		5,731
2020		24,793		5,234
2021		20,695		4,746
Thereafter		146,987		18,236
Total	$	382,688	$	43,474

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Dispositions, Assets Held for Sale and Discontinued Operations

6 Months Ended

Jun. 30, 2017

Disclosure Dispositions, Assets Held for Sale and Discontinued Operations [Abstract]

Dispositions, Assets Held for Sale and Discontinued Operations

5. Dispositions, Assets Held for Sale and Discontinued Operations

We periodically sell properties for various reasons, including favorable market conditions, the exercise of tenant purchase options or reduction of concentrations (e.g., property type, operator or geography). During the six months ended June 30, 2017 and 2016, we recorded impairment charges on certain held-for-sale seniors housing operating, triple-net, and outpatient medical properties for which the carrying values exceeded the fair values less estimated costs to sell. The following is a summary of our real property disposition activity for the periods presented (in thousands):

		Six Months Ended
		June 30, 2017			June 30, 2016
Real estate dispositions:
	Triple-net		$	882,436		$	128,768
	Seniors housing operating			13,845			-
	Total dispositions			896,281			128,768
Gain (loss) on real estate dispositions, net				286,247			1,530
	Net other assets/liabilities disposed			21,254			-
Proceeds from real estate dispositions			$	1,203,782		$	130,298

Dispositions and Assets Held for Sale

Pursuant to our adoption of ASU No. 2014-08, “Presentation of Financial Statements (Topic 205) and Property, Plant and Equipment (Topic 360): Reporting Discontinued Operations and Disclosures of Disposals of Components of an Entity”, operating results attributable to properties sold subsequent to or classified as held for sale after January 1, 2014 and which do not meet the definition of discontinued operations are no longer reclassified on our Consolidated Statements of Comprehensive Income. The following represents the activity related to these properties for the periods presented (in thousands):

			Three Months Ended				Six Months Ended
			June 30,				June 30,
		2017		2016		2017		2016
Revenues:
	Rental income	$	4,094	$	19,990	$	21,494	$	38,552
Expenses:
	Interest expense		284		2,506		1,714		5,032
	Property operating expenses		2,020		1,338		5,098		2,700
	Provision for depreciation		475		3,071		1,121		7,022
	Total expenses		2,779		6,915		7,933		14,754
Income (loss) from real estate dispositions, net		$	1,315	$	13,075	$	13,561	$	23,798

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Real Estate Loans Receivable

6 Months Ended

Jun. 30, 2017

Real Estate Loans Receivable [Abstract]

Real Estate Loans Receivable

6. Real Estate Loans Receivable

Please see Note 2 to the financial statements included in our Annual Report on Form 10-K for the year ended December 31, 2016 for discussion of our accounting policies for real estate loans receivable and related interest income.

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

		Six Months Ended
		June 30, 2017						June 30, 2016
				Outpatient						Outpatient
		Triple-net		Medical		Totals		Triple-net		Medical		Totals
Advances on real estate loans receivable:
	Investments in new loans	$	10,037	$	-	$	10,037	$	8,223	$	-	$	8,223
	Draws on existing loans		40,680		-		40,680		42,803		33		42,836
	Net cash advances on real estate loans		50,717		-		50,717		51,026		33		51,059
Receipts on real estate loans receivable:
	Loan payoffs		97,039		60,500		157,539		182,613		27,303		209,916
	Principal payments on loans		798		-		798		4,454		-		4,454
	Sub-total		97,837		60,500		158,337		187,067		27,303		214,370
	Less: Non-cash activity(1)(2)		(61,337)		(60,500)		(121,837)		(31,014)		(15,013)		(46,027)
	Net cash receipts on real estate loans		36,500		-		36,500		156,053		12,290		168,343
Net cash advances (receipts) on real estate loans			14,217		-		14,217		(105,027)		(12,257)		(117,284)
Change in balance due to foreign currency translation			5,471		-		5,471		(8,504)		-		(8,504)
Net change in real estate loans receivable		$	(41,649)	$	(60,500)	$	(102,149)	$	(144,545)	$	(27,270)	$	(171,815)
(1) Triple-net and prior year outpatient medical represents acquisitions of assets previously financed as real estate loans. Please see Note 3 for additional information.
(2) Current year outpatient medical represents a deed in lieu of foreclosure on a previously financed first mortgage property.

In 2016, we restructured two existing real estate loans in the triple-net segment with Genesis Healthcare. The two existing loans, with a combined principal balance of $317,000,000, were scheduled to mature in 2017 and 2018. These loans were restructured into four separate loans effective October 1, 2016. Each loan has a five-year term, a 10% interest rate and 25 basis point annual escalator. In 2016, we recorded a loan loss charge in the amount of $6,935,000 on one of the loans as the present value of expected future cash flows was less than the carrying value of the loan. We expect to collect all principal amounts due under the loans and, due to the passage of time, at June 30, 2017, the allowance for loan losses related to these loans is $5,811,000. At June 30, 2017, we had no real estate loans with outstanding balances on non-accrual status and recorded no provision for loan losses during the three months ended June 30, 2017.

		Six Months Ended
	June 30, 2017		June 30, 2016
Balance of impaired loans at end of period	$	289,473	$	-
Allowance for loan losses		5,811		-
Balance of impaired loans not reserved	$	283,662	$	-
Average impaired loans for the period	$	327,324	$	-
Interest recognized on impaired loans		16,464		-

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Investments in Unconsolidated Entities

6 Months Ended

Jun. 30, 2017

Investments In Unconsolidated Entities [Abstract]

Investments in Unconsolidated Entities

7. Investments in Unconsolidated Entities

We participate in a number of joint ventures, which generally invest in seniors housing and health care real estate. The results of operations for these properties have been included in our consolidated results of operations from the date of acquisition by the joint ventures and are reflected in our Consolidated Statements of Comprehensive Income as income or loss from unconsolidated entities. The following is a summary of our investments in unconsolidated entities (dollars in thousands):

	Percentage Ownership(1)	June 30, 2017		December 31, 2016
Triple-net	10% to 49%	$	23,978	$	27,005
Seniors housing operating	10% to 50%		358,889		407,172
Outpatient medical	43%		42,622		22,961
Total		$	425,489	$	457,138
(1) Excludes ownership of in-substance real estate.

During the three months ended June 30, 2017, we increased our ownership in the Sunrise Senior Living, Inc. management company from 24% to 34%. At June 30, 2017, the aggregate unamortized basis difference of our joint venture investments of $84,451,000 is primarily attributable to the difference between the amount for which we purchase our interest in the entity, including transaction costs, and the historical carrying value of the net assets of the entity. This difference is being amortized over the remaining useful life of the related properties and included in the reported amount of income from unconsolidated entities.

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Credit Concentration

6 Months Ended

Jun. 30, 2017

Customer Concentration [Abstract]

Credit Concentration

8. Credit Concentration

We use consolidated net operating income (“NOI”) as our credit concentration metric. See Note 17 for additional information and reconciliation. The following table summarizes certain information about our credit concentration for the six months ended June 30, 2017, excluding our share of NOI in unconsolidated entities (dollars in thousands):

		Number of	Total		Percent of
Concentration by relationship:(1)		Properties	NOI		NOI(2)
	Genesis Healthcare	86	$	98,225	9%
	Sunrise Senior Living(3)	153		155,331	14%
	Brookdale Senior Living	137		75,862	7%
	Revera(3)	98		75,937	7%
	Benchmark Senior Living	48		48,095	4%
	Remaining portfolio	752		655,426	59%
	Totals	1,274	$	1,108,876	100%
(1) Genesis Healthcare is in our triple-net segment. Sunrise Senior Living and Revera are in our seniors housing operating segment. Benchmark Senior Living and Brookdale Senior Living are in both our triple-net and seniors housing operating segments.
(2) NOI with our top five relationships comprised 45% of total NOI for the year ending December 31, 2016.
(3) Revera owns a controlling interest in Sunrise Senior Living.

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Borrowings Under Credit Facilities and Related Items

6 Months Ended

Jun. 30, 2017

Borrowings Under Credit Facilities and Related Items [Abstract]

Borrowings Under Credit Facilities and Related Items

9. Borrowings Under Credit Facilities and Related Items

At June 30, 2017, we had a primary unsecured credit facility with a consortium of 29 banks that includes a $3,000,000,000 unsecured revolving credit facility, a $500,000,000 unsecured term credit facility and a $250,000,000 Canadian-denominated unsecured term credit facility. We have an option, through an accordion feature, to upsize the unsecured revolving credit facility and the $500,000,000 unsecured term credit facility by up to an additional $1,000,000,000, in the aggregate, and the $250,000,000 Canadian-denominated unsecured term credit facility by up to an additional $250,000,000. The primary unsecured credit facility also allows us to borrow up to $1,000,000,000 in alternate currencies (none outstanding at June 30, 2017). Borrowings under the unsecured revolving credit facility are subject to interest payable at the applicable margin over LIBOR interest rate (2.12% atJune 30, 2017). The applicable margin is based on our debt ratings and was 0.90% at June 30, 2017. In addition, we pay a facility fee quarterly to each bank based on the bank’s commitment amount. The facility fee depends on our debt ratings and was 0.15% atJune 30, 2017. The term credit facilities mature on May 13, 2021. The revolving credit facility is scheduled to mature on May 13, 2020 and can be extended for two successive terms of six months each at our option.

The following information relates to aggregate borrowings under the primary unsecured revolving credit facility for the periods presented (dollars in thousands):

		Three Months Ended June 30,				Six Months Ended June 30,
		2017		2016		2017		2016
Balance outstanding at quarter end(1)		$	385,000	$	745,000	$	385,000	$	745,000
Maximum amount outstanding at any month end		$	640,000	$	745,000	$	1,010,000	$	945,000
Average amount outstanding (total of daily
	principal balances divided by days in period)	$	561,626	$	623,077	$	678,343	$	647,060
Weighted average interest rate (actual interest
	expense divided by average borrowings outstanding)		1.94%		1.26%		1.87%		1.28%
(1) As of June 30, 2017, letters of credit in the aggregate amount of $32,456,000 have been issued, which reduces the borrowing capacity on the unsecured revolving credit facility.

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Senior Unsecured Notes and Secured Debt

6 Months Ended

Jun. 30, 2017

Senior Unsecured Notes and Secured Debt [Abstract]

Senior Unsecured Notes and Secured Debt

10. Senior Unsecured Notes and Secured Debt

We may repurchase, redeem or refinance 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 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 June 30, 2017, the annual principal payments due on these debt obligations were as follows (in thousands):

	Senior		Secured
	Unsecured Notes(1,2)		Debt (1,3)		Totals
2017	$	-	$	173,105	$	173,105
2018		450,000		405,834		855,834
2019		605,000		480,977		1,085,977
2020(4)		681,089		156,585		837,674
2021(5,6)		1,142,574		214,352		1,356,926
Thereafter(7,8,9,10)		5,464,476		1,243,836		6,708,312
Totals	$	8,343,139	$	2,674,689	$	11,017,828
(1) Amounts represent principal amounts due and do not include unamortized premiums/discounts, debt issuance costs, or other fair value adjustments as reflected on the balance sheet.
(2) Annual interest rates range from 1.8% to 6.5%.
(3) Annual interest rates range from 1.42% to 7.98%. Carrying value of the properties securing the debt totaled $5,624,262,000 at June 30, 2017.
(4) In November 2015, one of our wholly-owned subsidiaries issued and we guaranteed $300,000,000 of Canadian-denominated 3.35% senior unsecured notes due 2020 (approximately $231,089,000 based on the Canadian/U.S. Dollar exchange rate on June 30, 2017).
(5) On May 13, 2016, we refinanced the funding on a $250,000,000 Canadian-denominated unsecured term credit facility (approximately $192,574,000 based on the Canadian/U.S. Dollar exchange rate on June 30, 2017). The loan matures on May 13, 2021 and bears interest at the Canadian Dealer Offered Rate plus 95 basis points (1.79% at June 30, 2017).
(6) On May 13, 2016, we refinanced the funding on a $500,000,000 unsecured term credit facility. The loan matures on May 13, 2021 and bears interest at LIBOR plus 95 basis points (2.08% at June 30, 2017).
(7) On November 20, 2013, we completed the sale of £550,000,000 (approximately $714,725,000 based on the Sterling/U.S. Dollar exchange rate in effect on June 30, 2017) of 4.8% senior unsecured notes due 2028.
(8) On November 25, 2014, we completed the sale of £500,000,000 (approximately $649,750,000 based on the Sterling/U.S. Dollar exchange rate in effect on June 30, 2017) of 4.5% senior unsecured notes due 2034.
(9) In May 2015, we issued $750,000,000 of 4.0% senior unsecured notes due 2025. In October 2015, we issued an additional $500,000,000 of these notes under a re-opening of the offer.
(10) In March 2016, we issued $700,000,000 of 4.25% senior unsecured notes due 2026.

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

	Six Months Ended
	June 30, 2017			June 30, 2016
			Weighted Avg.			Weighted Avg.
	Amount		Interest Rate	Amount		Interest Rate
Beginning balance	$	8,260,038	4.245%	$	8,645,758	4.237%
Debt issued		-	0.000%		705,000	4.228%
Debt extinguished		-	0.000%		(400,000)	3.625%
Foreign currency		83,101	4.320%		(133,234)	4.417%
Ending balance	$	8,343,139	4.276%	$	8,817,524	4.263%

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

	Six Months Ended
		June 30, 2017		June 30, 2016
			Weighted Avg.			Weighted Avg.
	Amount		Interest Rate	Amount		Interest Rate
Beginning balance	$	3,465,066	4.094%	$	3,478,207	4.440%
Debt issued		161,799	2.331%		161,992	3.051%
Debt assumed		23,094	6.670%		-	0.000%
Debt extinguished		(987,923)	5.370%		(243,314)	4.874%
Principal payments		(32,206)	4.378%		(37,737)	4.579%
Foreign currency		44,859	3.116%		62,118	3.652%
Ending balance	$	2,674,689	3.669%	$	3,421,266	4.328%

Our debt agreements contain various covenants, restrictions and events of default. Certain agreements require us to maintaincertain 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 June 30, 2017, we were in compliance with all of the covenants under our debt agreements.

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Derivative Instruments

6 Months Ended

Jun. 30, 2017

Summary of Derivative Instruments [Abstract]

Derivative Instruments

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 may elect to manage this risk through the use of forward contracts and issuing debt in foreign currencies.

Interest Rate Swap Contracts and Foreign Currency Forward Contracts Designated as Cash Flow Hedges

For instruments that are designated and qualify as a cash flow hedge, the effective portion of the gain or loss on the derivative is reported as a component of other comprehensive income (“OCI”), and reclassified into earnings in the same period or periods, during which the hedged transaction affects earnings. Gains and losses on the derivative representing either hedge ineffectiveness or hedge components excluded from the assessment of effectiveness are recognized in earnings. Approximately $2,671,000 of gains, which are included in accumulated other comprehensive income (“AOCI”), are expected to be reclassified into earnings in the next 12 months.

Foreign Currency Hedges

For instruments that are designated and qualify as net investment hedges, the variability in the foreign currency to U.S. Dollar of the instrument is recorded as a cumulative translation adjustment component of OCI. During the sixmonths ended June 30, 2017and 2016, we settled certain net investment hedges generating cash proceeds of $19,665,000and $56,842,000, respectively.  The balance of the cumulative translation adjustment will be reclassified to earnings when the hedged investment is sold or substantially liquidated.

The following presents the notional amount of derivatives and other financial instruments as of the dates indicated (in thousands):

		June 30, 2017		December 31, 2016
Derivatives designated as net investment hedges:
Denominated in Canadian Dollars	$	875,000	$	900,000
Denominated in Pounds Sterling	£	550,000	£	550,000
Financial instruments designated as net investment hedges:
Denominated in Canadian Dollars	$	250,000	$	250,000
Denominated in Pounds Sterling	£	1,050,000	£	1,050,000
Derivatives designated as cash flow hedges:
Denominated in U.S. Dollars	$	-	$	57,000
Denominated in Canadian Dollars	$	54,000	$	54,000
Denominated in Pounds Sterling	£	54,000	£	48,000
Derivative instruments not designated:
Denominated in Canadian Dollars	$	37,000	$	37,000

The following presents the impact of derivative instruments on the Consolidated Statements of Comprehensive Income for the periods presented (in thousands):

		Three Months Ended				Six Months Ended
		June 30,				June 30,
	Location		2017		2016		2017		2016
Gain (loss) on interest rate swaps reclassified from AOCI into income (effective portion)	Interest expense	$	-	$	(477)	$	-	$	(960)
Gain (loss) on forward exchange contracts recognized in income	Interest expense		1,732		2,697		4,189		1,369
Gain (loss) on foreign exchange contracts and term loans designated as net investment hedge recognized in OCI	OCI		(97,539)		178,575		(141,880)		175,836

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Commitments and Contingencies

6 Months Ended

Jun. 30, 2017

Commitments and Contingencies [Abstract]

Commitments and Contingencies

12. Commitments and Contingencies

At June 30, 2017, we had 14 outstanding letter of credit obligations totaling $170,131,000 and expiring between 2017 and 2024.At June 30, 2017, we had outstanding construction in progress of $321,655,000 and were committed to providing additional funds of approximately $354,853,000 to complete construction. At June 30, 2017, we had contingent purchase obligations totaling $13,170,000. 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 June 30, 2017, we had operating lease obligations of $1,078,526,000relating to certain ground leases and company office space and capital lease obligations of $91,471,000 relating primarily to certain investment properties. Regarding 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 June 30, 2017, aggregate future minimum rentals to be received under these noncancelable subleases totaled $72,906,000.

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Stockholders' Equity

6 Months Ended

Jun. 30, 2017

Stockholders' Equity [Abstract]

Stockholders' Equity

13. Stockholders’ Equity

     The following is a summary of our stockholders’ equity capital accounts as of the dates indicated:

	June 30, 2017	December 31, 2016
Preferred Stock:
Authorized shares	50,000,000	50,000,000
Issued shares	14,375,000	25,875,000
Outstanding shares	14,375,000	25,875,000
Common Stock, $1.00 par value:
Authorized shares	700,000,000	700,000,000
Issued shares	369,966,425	363,576,924
Outstanding shares	368,878,042	362,602,173

Preferred Stock. The following is a summary of our preferred stock activity during the periods indicated:

	Six Months Ended
	June 30, 2017		June 30, 2016
		Weighted Avg.		Weighted Avg.
	Shares	Dividend Rate	Shares	Dividend Rate
Beginning balance	25,875,000	6.500%	25,875,000	6.500%
Shares redeemed	(11,500,000)	6.500%	-	0.000%
Ending balance	14,375,000	6.500%	25,875,000	6.500%

During the six months endedJune 30, 2017, we recognized a charge of $9,769,000 in connection with the redemption of the Series J preferred stock.

Common Stock. The following is a summary of our common stock issuances during the six months ended June 30, 2017 and 2016 (dollars in thousands, except per share amounts):

	Shares Issued		Average Price		Gross Proceeds		Net Proceeds
2016 Dividend reinvestment plan issuances	1,971,758	$	64.65	$	127,470	$	127,470
2016 Option exercises	37,409		48.73		1,823		1,823
2016 Equity shelf program issuances	443,096		67.12		30,192		29,739
2016 Stock incentive plans, net of forfeitures	460,047				-		-
2016 Totals	2,912,310			$	159,485	$	159,032
2017 Dividend reinvestment plan issuances	2,836,216	$	70.55	$	200,097	$	199,757
2017 Option exercises	202,190		50.88		10,288		10,288
2017 Equity shelf program issuances	2,986,574		72.30		215,917		214,406
2017 Redemption of equity membership units	91,180				-		-
2017 Stock incentive plans, net of forfeitures	159,709				-		-
2017 Totals	6,275,869			$	426,302	$	424,451

Dividends. The increase in dividends is primarily attributable to increases in our common shares outstanding as described above and an increase in common dividends per share. The following is a summary of our dividend payments (in thousands, except per share amounts):

	Six Months Ended
	June 30, 2017				June 30, 2016
	Per Share		Amount		Per Share		Amount
Common Stock	$	1.7400	$	634,296	$	1.7200	$	613,163
Series I Preferred Stock		1.6250		23,360		1.6250		23,359
Series J Preferred Stock		0.2347		2,699		0.8126		9,344
Totals			$	660,355			$	645,866

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		Available for Sale Securities		Actuarial Losses		Cash Flow Hedges		Total
Balance at December 31, 2016	$	(173,496)	$	5,120	$	(1,153)	$	(2)	$	(169,531)
Other comprehensive income before reclassification adjustments		22,384		(16,477)		-		-		5,907
Net current-period other comprehensive income		22,384		(16,477)		-		-		5,907
Balance at June 30, 2017	$	(151,112)	$	(11,357)	$	(1,153)	$	(2)	$	(163,624)
Balance at December 31, 2015	$	(85,484)	$	-	$	(1,343)	$	(1,416)	$	(88,243)
Other comprehensive income before reclassification adjustments		(61,207)		(11,160)		2		10		(72,355)
Reclassification amount to net income		-		-		-		960 (1)		960
Net current-period other comprehensive income		(61,207)		(11,160)		2		970		(71,395)
Balance at June 30, 2016	$	(146,691)	$	(11,160)	$	(1,341)	$	(446)	$	(159,638)
(1) Please see Note 11 for additional information.

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Stock Incentive Plans

6 Months Ended

Jun. 30, 2017

Stock Incentive Plans [Abstract]

Stock Incentive Plans

14. Stock Incentive Plans

Our 2016 Long-Term Incentive Plan (“2016 Plan”) authorizes up to 10,000,000 shares of common stock to be issued at the discretion of the Compensation Committee of the Board of Directors. Our non-employee directors, officers and key employees are eligible to participate in the 2016 Plan. The 2016 Plan allows for the issuance of, among other things, stock options, stock appreciation rights, restricted stock, deferred stock units and dividend equivalent rights. Vesting periods for options, deferred stock units and restricted shares generally range from three to five years. Options expire ten years from the date of grant. Stock-based compensation expense totaled $4,763,000 and $9,669,000for the three and six months ended June 30, 2017, respectively, and $7,031,000 and $15,217,000 for the same periods in 2016.

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Earnings Per Share

6 Months Ended

Jun. 30, 2017

Earnings Per Share [Abstract]

Earnings Per Share

15. Earnings Per Share

     The following table sets forth the computation of basic and diluted earnings per share (in thousands, except per share data):

		Three Months Ended				Six Months Ended
		June 30,				June 30,
		2017		2016		2017		2016
Numerator for basic and diluted earnings
	per share - net income (loss) attributable
	to common stockholders	$	188,429	$	195,474	$	501,068	$	344,444
Denominator for basic earnings per
	share - weighted average shares		366,524		356,646		364,551		355,879
Effect of dilutive securities:
	Employee stock options		50		129		60		115
	Non-vested restricted shares		479		465		438		359
	Redeemable shares		1,096		1,651		1,374		1,136
Dilutive potential common shares			1,625		2,245		1,872		1,610
Denominator for diluted earnings per
	share - adjusted weighted average shares		368,149		358,891		366,423		357,489
Basic earnings per share		$	0.51	$	0.55	$	1.37	$	0.97
Diluted earnings per share		$	0.51	$	0.54	$	1.37	$	0.96

The Series I Cumulative Convertible Perpetual Preferred Stock was not included in the calculations as the effect of conversions into common stock was anti-dilutive.

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Disclosure about Fair Value of Financial Instruments

6 Months Ended

Jun. 30, 2017

Disclosure About Fair Value of Financial Instruments [Abstract]

Disclosure about Fair Value of Financial Instruments

16. Disclosure about Fair Value of Financial Instruments

U.S. GAAP provides authoritative guidance for measuring and disclosing fair value measurements of assets and liabilities. The guidance defines fair value as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. The guidance also establishes a fair value hierarchy which requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. Please see Note 2 to the financial statements included in our Annual Report on Form 10-K for the year ended December 31, 2016 for additional information.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.

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.

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 2 and Level 3 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 1 publicly available trading prices.

Borrowings Under Primary Unsecured Credit Facility — The carrying amount of the primary unsecured credit facility approximates fair value because the borrowings are interest rate adjustable.

Senior Unsecured Notes — The fair value of the senior unsecured notes payable was estimated based on Level 1 publicly available trading prices. The carrying amount of the variable rate senior unsecured notes approximates fair value because they are interest rate adjustable.

Secured Debt — The fair value of fixed rate secured debt is estimated using Level 2 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.

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 2 inputs by estimating the future value of the currency pair based on existing exchange rates, comprised of current spot and traded forward points, and calculating a present value of the net amount using a discount factor based on observable traded interest rates.

Redeemable OP Unitholder Interests — Our redeemable unitholder interests are recorded on the balance sheet at fair value using Level 2 inputs. The fair value is measured using the closing price of our common stock, as units may be redeemed at the election of the holder for cash or, at our option, one share of our common stock per unit, subject to adjustment in certain circumstances.

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

		June 30, 2017				December 31, 2016
		Carrying Amount		Fair Value		Carrying Amount		Fair Value
Financial assets:
	Mortgage loans receivable	$	369,141	$	405,671	$	485,735	$	521,773
	Other real estate loans receivable		151,338		156,266		136,893		138,050
	Available-for-sale equity investments		11,422		11,422		27,899		27,899
	Cash and cash equivalents		442,284		442,284		419,378		419,378
	Foreign currency forward contracts		54,326		54,326		135,561		135,561
Financial liabilities:
	Borrowings under unsecured credit facilities	$	385,000	$	385,000	$	645,000	$	645,000
	Senior unsecured notes		8,250,940		9,088,276		8,161,619		8,879,176
	Secured debt		2,670,914		2,718,333		3,477,699		3,558,378
	Foreign currency forward contracts		10,426		10,426		4,342		4,342
Redeemable OP unitholder interests		$	111,149	$	111,149	$	110,502	$	110,502

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. The following summarizes items measured at fair value on a recurring basis (in thousands):

	Fair Value Measurements as of June 30, 2017
	Total		Level 1		Level 2		Level 3
Available-for-sale equity investments(1)	$	11,422	$	11,422	$	-	$	-
Foreign currency forward contracts, net(2)		43,900		-		43,900		-
Redeemable OP unitholder interests		111,149		-		111,149		-
Totals	$	166,471	$	11,422	$	155,049	$	-
(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. Asset impairments (if applicable, see Note 5 for impairments of real property and Note 6 for impairments of loans receivable) are also measured at fair value on a nonrecurring basis. 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 resides 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.

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Segment Reporting

6 Months Ended

Jun. 30, 2017

Segment Reporting [Abstract]

Segment Reporting

17. Segment Reporting

We invest in seniors housing and health care real estate. We evaluate our business and make resource allocations on our three operating segments: triple-net, seniors housing operating and outpatient medical. During the three months ended December 31, 2016, we reclassified interest expense on our foreign-denominated senior notes from the seniors housing operating segment to non-segment. Accordingly, the segment information provided in this Note has been reclassified to conform to the current presentation for all periods presented.

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

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

Non-segment revenue consists mainly of interest income on certain non-real estate investments and other income. Non-segment assets consist of corporate assets including cash, deferred loan expenses and corporate offices and equipment among others. Non-property specific revenues and expenses are not allocated to individual segments in determining NOI.The accounting policies of the segments are the same as those described in the summary of significant accounting policies (see Note 2 to the financial statements included in our Annual Report on Form 10-K for the year ended December 31, 2016). The results of operations for all acquisitions described in Note 3 are included in our consolidated results of operations from the acquisition dates and are components of the appropriate segments. There are no intersegment sales or transfers.Summary information for the reportable segments (which excludes unconsolidated entities) is as follows(in thousands):

Three Months Ended June 30, 2017:		Triple-net		Seniors Housing Operating		Outpatient Medical		Non-segment / Corporate		Total
Rental income	$	217,889	$	-	$	137,710	$	-	$	355,599
Resident fees and services		-		677,040		-		-		677,040
Interest income		20,901		-		-		-		20,901
Other income		2,557		1,049		1,217		239		5,062
Total revenues		241,347		678,089		138,927		239		1,058,602
Property operating expenses		-		459,111		42,744		-		501,855
Consolidated net operating income		241,347		218,978		96,183		239		556,747
Interest expense		2,515		15,403		2,122		96,191		116,231
Loss (gain) on derivatives, net		736		-		-		-		736
Depreciation and amortization		60,171		117,198		47,478		-		224,847
General and administrative		-		-		-		32,632		32,632
Transaction costs
Loss (gain) on extinguishment of debt, net		-		2,524		2,991		-		5,515
Impairment of assets		4,846		8,785		-		-		13,631
Other expenses		2,181		1,165		1,310		1,683		6,339
Income (loss) from continuing operations before income taxes and income from unconsolidated entities		170,898		73,903		42,282		(130,267)		156,816
Income tax (expense) benefit		(1,471)		10,247		(351)		23		8,448
Income (loss) from unconsolidated entities		3,867		(8,449)		604		-		(3,978)
Income (loss) from continuing operations		173,294		75,701		42,535		(130,244)		161,286
Gain (loss) on real estate dispositions, net		42,155		-		-		-		42,155
Net income (loss)	$	215,449	$	75,701	$	42,535	$	(130,244)	$	203,441
Total assets	$	9,990,063	$	12,753,128	$	5,008,067	$	224,528	$	27,975,786

Three Months Ended June 30, 2016:		Triple-net		Seniors Housing Operating		Outpatient Medical		Non-segment / Corporate		Total
Rental income	$	287,134	$	-	$	135,494	$	-	$	422,628
Resident fees and services		-		615,220		-		-		615,220
Interest income		21,971		1,042		994		-		24,007
Other income		1,206		8,989		4,153		454		14,802
Total revenues		310,311		625,251		140,641		454		1,076,657
Property operating expenses		-		417,996		40,836		-		458,832
Consolidated net operating income		310,311		207,255		99,805		454		617,825
Interest expense		5,754		20,274		5,402		100,896		132,326
Depreciation and amortization		75,809		102,312		48,448		-		226,569
General and administrative		-		-		-		39,914		39,914
Transaction costs		1,291		3,247		619		-		5,157
Loss (gain) on extinguishment of debt, net		121		(88)		-		-		33
Other expenses		-		-		-		3,161		3,161
Income (loss) from continuing operations before income taxes and income from unconsolidated entities		227,336		81,510		45,336		(143,517)		210,665
Income tax (expense) benefit		(213)		2,023		(248)		(1,049)		513
Income (loss) from unconsolidated entities		3,018		(4,887)		(90)		-		(1,959)
Income (loss) from continuing operations		230,141		78,646		44,998		(144,566)		209,219
Gain (loss) on real estate dispositions, net		1,530		-		-		-		1,530
Net income (loss)	$	231,671	$	78,646	$	44,998	$	(144,566)	$	210,749

Six Months Ended June 30, 2017:		Triple-net		Seniors Housing Operating		Outpatient Medical		Non-segment / Corporate		Total
Rental income	$	445,180	$	-	$	277,561	$	-	$	722,741
Resident fees and services		-		1,347,377		-		-		1,347,377
Interest income		41,580		69		-		-		41,649
Other income		4,321		2,510		1,830		472		9,133
Total revenues		491,081		1,349,956		279,391		472		2,120,900
Property operating expenses		-		921,536		90,488		-		1,012,024
Consolidated net operating income		491,081		428,420		188,903		472		1,108,876
Interest expense		8,025		31,219		4,413		191,170		234,827
Loss (gain) on derivatives, net		1,960		-		-		-		1,960
Depreciation and amortization		119,781		236,935		96,408		-		453,124
General and administrative		-		-		-		63,733		63,733
Loss (gain) on extinguishment of debt, net		29,083		3,414		4,373		-		36,870
Impairment of assets		4,846		14,191		5,625		-		24,662
Other expenses		7,190		2,943		1,671		6,210		18,014
Income (loss) from continuing operations before income taxes and income from unconsolidated entities		320,196		139,718		76,413		(260,641)		275,686
Income tax (expense) benefit		(2,271)		9,160		(686)		-		6,203
Income (loss) from unconsolidated entities		9,505		(37,640)		1,051		-		(27,084)
Income (loss) from continuing operations		327,430		111,238		76,778		(260,641)		254,805
Gain (loss) on real estate dispositions, net		273,236		13,011		-		-		286,247
Net income (loss)	$	600,666	$	124,249	$	76,778	$	(260,641)	$	541,052

Six Months Ended June 30, 2016:		Triple-net		Seniors Housing Operating		Outpatient Medical		Non-segment / Corporate		Total
Rental income	$	570,958	$	-	$	267,332	$	-	$	838,290
Resident fees and services		-		1,217,369		-		-		1,217,369
Interest income		44,824		2,073		2,298		-		49,195
Other income		2,695		11,178		4,466		512		18,851
Total revenues		618,477		1,230,620		274,096		512		2,123,705
Property operating expenses		-		826,890		81,578		-		908,468
Consolidated net operating income		618,477		403,730		192,518		512		1,215,237
Interest expense		12,117		40,797		11,146		201,225		265,285
Depreciation and amortization		155,609		204,144		95,512		-		455,265
General and administrative		-		-		-		85,606		85,606
Transaction costs		4,143		7,180		2,042		-		13,365
Loss (gain) on extinguishment of debt, net		97		(88)		-		-		9
Impairment of assets		14,314		-		-		-		14,314
Other expenses		-		-		-		3,161		3,161
Income (loss) from continuing operations before income taxes and income from unconsolidated entities		432,197		151,697		83,818		(289,480)		378,232
Income tax expense		(528)		4,789		(476)		(1,546)		2,239
(Loss) income from unconsolidated entities		6,100		(11,822)		(56)		-		(5,778)
Income (loss) from continuing operations		437,769		144,664		83,286		(291,026)		374,693
Gain (loss) on real estate dispositions, net		1,530		-		-		-		1,530
Net income (loss)	$	439,299	$	144,664	$	83,286	$	(291,026)	$	376,223

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

		Three Months Ended						Six Months Ended
		June 30, 2017			June 30, 2016			June 30, 2017			June 30, 2016
Revenues:		Amount	%		Amount	%		Amount	%		Amount	%
United States	$	851,943	80.5%	$	862,115	80.1%	$	1,710,611	80.7%	$	1,704,470	80.3%
United Kingdom		99,747	9.4%		102,593	9.5%		193,590	9.1%		203,148	9.5%
Canada		106,912	10.1%		111,949	10.4%		216,699	10.2%		216,087	10.2%
Total	$	1,058,602	100.0%	$	1,076,657	100.0%	$	2,120,900	100.0%	$	2,123,705	100.0%
		As of
		June 30, 2017			December 31, 2016
Assets:		Amount	%		Amount	%
United States	$	22,323,973	79.8%	$	23,572,459	81.7%
United Kingdom		3,064,196	11.0%		2,782,489	9.6%
Canada		2,587,617	9.2%		2,510,236	8.7%
Total	$	27,975,786	100.0%	$	28,865,184	100.0%

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Income Taxes and Distributions

6 Months Ended

Jun. 30, 2017

Income Taxes And Distributions [Abstract]

Income Taxes And Distributions

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 undistributed 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.

Under the provisions of the REIT Investment Diversification and Empowerment Act of 2007 (“RIDEA”), for taxable years beginning after July 30, 2008, a REIT may lease “qualified health care properties” on an arm’s-length basis to a taxable REIT subsidiary (“TRS”) if the property is operated on behalf of such TRS 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 unaudited consolidated financial statements and are subject to federal and state income taxes as the operations of such facilities are included in TRS entities. Certain net operating loss carryforwards could be utilized to offset taxable income in future years.

     Income taxes reflected in the financial statements primarily represents U.S. federal and state and local income taxes as well as non-U.S. income based or withholding taxes on certain investments located in jurisdictions outside the U.S. The provision for income taxes for the three and six months ended June 30, 2017 and 2016, was primarily due to operating income or losses, offset by certain discrete items at our TRS entities. In 2014, we established certain wholly-owned direct and indirect subsidiaries in Luxembourg and Jersey and transferred interests in certain foreign investments into this holding company structure. The structure includes a property holding company that is tax resident in the United Kingdom. No material adverse current tax consequences in Luxembourg, Jersey or the United Kingdom resulted from the creation of this holding company structure and all of the subsidiary entities in the structure are treated as disregarded entities of the company for U.S. federal income tax purposes. The company reflects current and deferred tax liabilities for any such withholding taxes incurred as a result of this holding company structure in its consolidated financial statements. Generally, given current statutes of limitations, we are subject to audit by the Internal Revenue Service (“IRS”) for the year ended December 31, 2013 and subsequent years and by state taxing authorities for the year ended December 31, 2012 and subsequent years.  The company and its subsidiaries are also subject to audit by the Canada Revenue Agency and provincial authorities generally for periods subsequent to our initial investments in Canada in May 2012, by HM Revenue & Customs for periods subsequent to our initial investments in the United Kingdom in August 2012 and by Luxembourg taxing authorities generally for periods subsequent to our establishment of certain Luxembourg-based subsidiaries during 2014.

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Variable Interest Entity Disclosure

6 Months Ended

Jun. 30, 2017

Variable Interest Entity Disclosure [Abstract]

Variable Interest Entity Disclosure [Text Block]

19. Variable Interest Entities

We have entered into joint ventures to own certain seniors housing and outpatient medical assets which are deemed to be variable interest entities (“VIE”). We have concluded that we are the primary beneficiary of these VIE’s based on a combination of operational control of the joint venture and the rights to receive residual returns or the obligation to absorb losses arising from the joint ventures. Except for capital contributions associated with the initial joint venture formations, the joint ventures have been and are expected to be funded from the ongoing operations of the underlying properties. Accordingly, such joint ventures have been consolidated, andthe table below summarizes the balance sheets of consolidated VIE’s in the aggregate (in thousands):

		June 30, 2017		December 31, 2016
Assets
	Net real property owned	$	1,019,154	$	989,596
	Cash and cash equivalents		10,180		10,501
	Receivables and other assets		16,284		12,102
	Total assets(1)	$	1,045,618	$	1,012,199
Liabilities and equity
	Secured debt	$	473,781	$	450,255
	Accrued expenses and other liabilities		15,396		13,803
	Redeemable noncontrolling interests		180,690		185,556
	Total equity		375,751		362,585
	Total liabilities and equity	$	1,045,618	$	1,012,199
(1) Note that assets of the consolidated variable interest entities can only be used to settle obligations relating to such variable interest entities. Liabilities of the consolidated variable interest entities represent claims against the specific assets of the variable interest entities.

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Accounting Policies and Related Matters (Policies)

6 Months Ended

Jun. 30, 2017

Accounting Policies and Related Matters (Policies) [Abstract]

Basis of Presentation

2. Accounting Policies and Related Matters

Basis of Presentation

The accompanying unaudited consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles (“U.S. GAAP”) for interim financial information and with instructions to Quarterly Report on Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by U.S. GAAP for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included. Operating results for the six months ended June 30, 2017 are not necessarily an indication of the results that may be expected for the year ending December 31, 2017. For further information, refer to the financial statements and notes thereto included in our Annual Report on Form 10-K for the year ended December 31, 2016.

New Accounting Standards

New Accounting Standards

In May 2014, the Financial Accounting Standards Board (the “FASB”) issued ASU No. 2014-09, “Revenue from Contracts with Customers (Topic 606)”. The standard is a comprehensive new revenue recognition model that requires revenue to be recognized in a manner to depict the transfer of goods or services to a customer at an amount that reflects the consideration expected to be received in exchange for those goods or services. ASU 2014-09 is effective for fiscal years, and interim periods within those years, beginning after December 15, 2017, and early adoption is permitted beginning after December 15, 2016. A reporting entity may apply the new standard using either a modified retrospective approach by recording a cumulative-effect adjustment to equity as of the beginning of the fiscal year of adoption or a full retrospective approach. We are currently evaluating the impact that the adoption of the standard will have on our consolidated financial statements and have not yet determined the method by which we will adopt the new standard. A significant source of our revenue is generated through leasing arrangements, which are specifically excluded from the new standard. We expect that the new standard will affect our accounting policies related to non-lease revenue, including certain fees in our RIDEA joint ventures, common area maintenance in our outpatient medical properties and real estate sales. Under ASU 2014-09, revenue recognition for real estate sales is mainly based on the transfer of control versus current guidance of continuing involvement. We expect that the new guidance will result in more transactions qualifying as sales of real estate and being recognized at an earlier date than under the current guidance.

In January 2016, the FASB issued ASU No. 2016-01, “Financial Instruments – Overall: Recognition and Measurement of Financial Assets and Financial Liabilities,” which will require entities to measure their investments at fair value and recognize any changes in fair value in net income unless the investments qualify for the new practicability exception. The practicability exception will be available for equity investments that do not have readily determinable fair values. ASU 2016-01 is effective for fiscal years and interim periods within those years, beginning after December 15, 2017. We are currently evaluating the impact that the standard will have on our consolidated financial statements.

In February 2016, the FASB issued ASU No. 2016-02, “Leases (Topic 842),” which requires lessees to recognize assets and liabilities on their balance sheet related to the rights and obligations created by most leases, while continuing to recognize expenses on their income statements over the lease term. It will also require disclosures designed to give financial statement users information regarding amount, timing, and uncertainty of cash flows arising from leases. ASU 2016-02 is effective for fiscal years, and interim periods within those years, beginning after December 15, 2018, and early adoption is permitted. Entities are required to use a modified retrospective approach for leases that exist or are entered into after the beginning of the earliest comparative period in the financial statements. We are currently evaluating the impact of this standard on our consolidated financial statements. We believe that the adoption of this standard will likely have a material impact to our consolidated balance sheet for the recognition of certain operating leases as right-of-use assets and lease liabilities. We are in the process of analyzing our lease portfolio and evaluating systems to comply with the standard’s retrospective adoption requirements.

In March 2016, the FASB issued ASU No. 2016-09, “Improvements to Employee Share-Based Payment Accounting”. ASU 2016-09 is effective for fiscal years, and interim periods within those years, beginning after December 15, 2016, and early adoption is permitted. We adopted ASU 2016-09 on January 1, 2017. The standard allows companies to make a policy election as to whether they will include an estimate of awards expected to be forfeited or whether they will account for forfeitures as they occur. We have elected to account for forfeitures as they occur. This election had an immaterial impact on our consolidated financial statements. The standard also requires an employer to classify as a financing activity in the statement of cash flow the cash paid to a tax authority when shares are withheld to satisfy the employer’s statutory income tax withholding obligation. This standard is required to be applied on a retrospective basis and resulted in an increase in net cash provided by operating activities and a decrease in net cash used in financing activities of $6,916,000 for the six months ended June 30, 2016. Upon adoption, no other provisions of ASU 2016-09 had an effect on our unaudited consolidated financial statements or related footnote disclosures.

In June 2016, the FASB issued ASU No. 2016-13, “Measurement of Credit Losses on Financial Instruments”. This standard requires a new forward-looking “expected loss” model to be used for receivables, held-to-maturity debt, loans, and other instruments. ASU 2016-13 is effective for fiscal years, and interim periods within those years, beginning after December 15, 2019, and early adoption is permitted for fiscal years beginning after December 15, 2018. We are currently evaluating the impact that the standard will have on our consolidated financial statements.

In January 2017, the FASB issued ASU No. 2017-01, “Clarifying the Definition of a Business”. This standard changes the definition of a business to assist entities with evaluating when a set of transferred assets and activities is a business. ASU 2017-01 is effective for fiscal years, and interim periods within those years, beginning after December 15, 2017, and early adoption is permitted. A reporting entity must apply ASU 2017-01 using a prospective approach. We adopted ASU 2017-01 on January 1, 2017 and as a result, have classified our real estate acquisitions completed during the six months endedJune 30, 2017as asset acquisitions rather than business combinations due to the fact that substantially all of the fair value of the gross assets acquired were concentrated in a single asset or group of similar identifiable assets. We have recorded identifiable assets acquired, liabilities assumed and any noncontrolling interests associated with any asset acquisitions at cost on a relative fair value basis and have capitalized transaction costs incurred.

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Real Property Acquisitions and Development (Tables)

6 Months Ended

Jun. 30, 2017

Real property acquisitions and development [Line Items]

Estimated Fair Value of Allocated Purchase Price of Asset and Liabilities

Triple-net Activity

		Six Months Ended
(In thousands)		June 30, 2017			June 30, 2016
Land and land improvements			$	30,440		$	18,901
Buildings and improvements				188,569			160,209
Acquired lease intangibles				-			2,876
	Total assets acquired			219,009			181,986
Accrued expenses and other liabilities				(20,855)			(1,459)
	Total liabilities assumed			(20,855)			(1,459)
Noncontrolling interests				(7,284)			-
Non-cash acquisition related activity(1)				(54,989)			(37,703)
	Cash disbursed for acquisitions			135,881			142,824
Construction in progress additions				76,245			85,687
Less:	Capitalized interest			(3,215)			(3,771)
	Foreign currency translation			(3,044)			(2,712)
Cash disbursed for construction in progress				69,986			79,204
Capital improvements to existing properties				15,269			14,877
	Total cash invested in real property, net of cash acquired		$	221,136		$	236,905
(1) For the six months ended June 30, 2017, $54,989,000 is related to the acquisition of assets previously financed as real estate loans receivable. For the six months ended June 30, 2016, $31,014,000 is related to the acquisition of assets previously financed as real estate loans receivable and $6,630,000 is related to the acquisition of assets previously financed as an investment in an unconsolidated entity.

Seniors Housing Operating Activity

		Six Months Ended
(In thousands)		June 30, 2017			June 30, 2016
Land and land improvements			$	10,590		$	5,617
Building and improvements				69,056			128,200
Acquired lease intangibles				3,596			6,334
Receivables and other assets				296			894
	Total assets acquired(1)			83,538			141,045
Accrued expenses and other liabilities				(8,606)			(4,853)
	Total liabilities assumed			(8,606)			(4,853)
Noncontrolling interests				(647)			(549)
Non-cash acquisition related activity(2)				(31,546)			(7,659)
	Cash disbursed for acquisitions			42,739			127,984
Construction in progress additions				42,787			134,019
Less:	Capitalized interest			(3,804)			(2,011)
	Foreign currency translation			3,060			(5,344)
Cash disbursed for construction in progress				42,043			126,664
Capital improvements to existing properties				60,129			47,553
	Total cash invested in real property, net of cash acquired		$	144,911		$	302,201
(1) Excludes $400,000and $134,000 of cash acquired during the six months ended June 30, 2017 and 2016, respectively.
(2) Includes $6,349,000 related to the acquisition of assets previously financed as real estate loans receivable during the six months ended June 30, 2017. Includes $25,197,000 and $7,659,000 for the six months ended June 30, 2017 and 2016 related to the acquisition of assets previously financed as an investments in an unconsolidated entity.

Outpatient Medical Activity

		Six Months Ended
(In thousands)		June 30, 2017			June 30, 2016
Land and land improvements			$	25,060	$	-
Buildings and improvements				62,038		32,650
Acquired lease intangibles				8,397		-
Receivables and other assets				118		-
	Total assets acquired			95,613		32,650
Secured debt				(25,824)		-
Accrued expenses and other liabilities				(2,210)		(990)
	Total liabilities assumed			(28,034)		(990)
Noncontrolling interests				(9,080)		-
Non-cash acquisition activity(1)				-		(15,013)
	Cash disbursed for acquisitions			58,499		16,647
Construction in progress additions				31,830		50,896
Less:	Capitalized interest			(1,343)		(1,561)
	Accruals(2)			6,530		(5,336)
Cash disbursed for construction in progress				37,017		43,999
Capital improvements to existing properties				17,409		25,099
	Total cash invested in real property		$	112,925	$	85,745
(1) Represents the acquisition of assets previously financed as real estate loans receivable. Please refer to Note 6 for additional information.
(2) Represents the change in non-cash consideration accruals for amounts to be paid in periods other than the period in which the construction projects converted to operations.

Construction Activity

			Six Months Ended
			June 30, 2017			June 30, 2016
	Development projects:
		Triple-net		$	266,650		$	-
		Seniors housing operating			3,634			-
		Outpatient medical			63,036			35,363
	Total development projects				333,320			35,363
	Expansion projects				2,798			2,879
Total construction in progress conversions				$	336,118		$	38,242

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Real Estate Intangibles (Tables)

6 Months Ended

Jun. 30, 2017

Real Estate Intangibles (Tables) [Abstract]

Summary of real estate intangibles excluding those classified as held for sale

		June 30, 2017		December 31, 2016
Assets:
	In place lease intangibles	$	1,278,755	$	1,252,143
	Above market tenant leases		64,408		61,700
	Below market ground leases		62,224		61,628
	Lease commissions		30,654		27,413
	Gross historical cost		1,436,041		1,402,884
	Accumulated amortization		(1,053,353)		(966,714)
	Net book value	$	382,688	$	436,170
	Weighted-average amortization period in years		15.1		13.7
Liabilities:
	Below market tenant leases	$	90,683	$	89,468
	Above market ground leases		8,540		8,107
	Gross historical cost		99,223		97,575
	Accumulated amortization		(55,749)		(52,134)
	Net book value	$	43,474	$	45,441
	Weighted-average amortization period in years		15.4		15.2

Schedule of Real Estate Intangible Amortization

	Three Months Ended				Six Months Ended
	June 30,				June 30,
	2017		2016		2017		2016
Rental income related to above/below market tenant leases, net	$	267	$	210	$	571	$	290
Property operating expenses related to above/below market ground leases, net		(307)		(311)		(619)		(622)
Depreciation and amortization related to in place lease intangibles and lease commissions		(35,439)		(31,109)		(74,741)		(65,473)

Schedule of the future estimated aggregate amortization of intangible assets and liabilities

		Assets		Liabilities
2017	$	71,356	$	3,337
2018		83,762		6,190
2019		35,095		5,731
2020		24,793		5,234
2021		20,695		4,746
Thereafter		146,987		18,236
Total	$	382,688	$	43,474

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Dispositions, Assets Held for Sale and Discontinued Operations (Tables)

6 Months Ended

Jun. 30, 2017

Dispositions, Assets Held for Sale and Discontinued Operations (Tables) [Abstract]

Summary of real property disposition activity

		Six Months Ended
		June 30, 2017			June 30, 2016
Real estate dispositions:
	Triple-net		$	882,436		$	128,768
	Seniors housing operating			13,845			-
	Total dispositions			896,281			128,768
Gain (loss) on real estate dispositions, net				286,247			1,530
	Net other assets/liabilities disposed			21,254			-
Proceeds from real estate dispositions			$	1,203,782		$	130,298

Summary of disposed properties.

			Three Months Ended				Six Months Ended
			June 30,				June 30,
		2017		2016		2017		2016
Revenues:
	Rental income	$	4,094	$	19,990	$	21,494	$	38,552
Expenses:
	Interest expense		284		2,506		1,714		5,032
	Property operating expenses		2,020		1,338		5,098		2,700
	Provision for depreciation		475		3,071		1,121		7,022
	Total expenses		2,779		6,915		7,933		14,754
Income (loss) from real estate dispositions, net		$	1,315	$	13,075	$	13,561	$	23,798

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Real Estate Loans Receivable (Tables)

6 Months Ended

Jun. 30, 2017

Real Estate Loans Receivable (Tables) [Abstract]

Summary of real estate loan activity

		Six Months Ended
		June 30, 2017						June 30, 2016
				Outpatient						Outpatient
		Triple-net		Medical		Totals		Triple-net		Medical		Totals
Advances on real estate loans receivable:
	Investments in new loans	$	10,037	$	-	$	10,037	$	8,223	$	-	$	8,223
	Draws on existing loans		40,680		-		40,680		42,803		33		42,836
	Net cash advances on real estate loans		50,717		-		50,717		51,026		33		51,059
Receipts on real estate loans receivable:
	Loan payoffs		97,039		60,500		157,539		182,613		27,303		209,916
	Principal payments on loans		798		-		798		4,454		-		4,454
	Sub-total		97,837		60,500		158,337		187,067		27,303		214,370
	Less: Non-cash activity(1)(2)		(61,337)		(60,500)		(121,837)		(31,014)		(15,013)		(46,027)
	Net cash receipts on real estate loans		36,500		-		36,500		156,053		12,290		168,343
Net cash advances (receipts) on real estate loans			14,217		-		14,217		(105,027)		(12,257)		(117,284)
Change in balance due to foreign currency translation			5,471		-		5,471		(8,504)		-		(8,504)
Net change in real estate loans receivable		$	(41,649)	$	(60,500)	$	(102,149)	$	(144,545)	$	(27,270)	$	(171,815)
(1) Triple-net and prior year outpatient medical represents acquisitions of assets previously financed as real estate loans. Please see Note 3 for additional information.
(2) Current year outpatient medical represents a deed in lieu of foreclosure on a previously financed first mortgage property.

		Six Months Ended
	June 30, 2017		June 30, 2016
Balance of impaired loans at end of period	$	289,473	$	-
Allowance for loan losses		5,811		-
Balance of impaired loans not reserved	$	283,662	$	-
Average impaired loans for the period	$	327,324	$	-
Interest recognized on impaired loans		16,464		-

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Investments in Unconsolidated Entities (Tables)

6 Months Ended

Jun. 30, 2017

Investments In Unconsolidated Entities [Abstract]

Summary Of Investments In Unconsolidated Entities [Text Block]

	Percentage Ownership(1)	June 30, 2017		December 31, 2016
Triple-net	10% to 49%	$	23,978	$	27,005
Seniors housing operating	10% to 50%		358,889		407,172
Outpatient medical	43%		42,622		22,961
Total		$	425,489	$	457,138
(1) Excludes ownership of in-substance real estate.

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Credit Concentration (Tables)

6 Months Ended

Jun. 30, 2017

Customer Concentration (Tables) [Abstract]

Summary of credit concentration

		Number of	Total		Percent of
Concentration by relationship:(1)		Properties	NOI		NOI(2)
	Genesis Healthcare	86	$	98,225	9%
	Sunrise Senior Living(3)	153		155,331	14%
	Brookdale Senior Living	137		75,862	7%
	Revera(3)	98		75,937	7%
	Benchmark Senior Living	48		48,095	4%
	Remaining portfolio	752		655,426	59%
	Totals	1,274	$	1,108,876	100%
(1) Genesis Healthcare is in our triple-net segment. Sunrise Senior Living and Revera are in our seniors housing operating segment. Benchmark Senior Living and Brookdale Senior Living are in both our triple-net and seniors housing operating segments.
(2) NOI with our top five relationships comprised 45% of total NOI for the year ending December 31, 2016.
(3) Revera owns a controlling interest in Sunrise Senior Living.

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Borrowings Under Credit Facilities and Related Items (Tables)

6 Months Ended

Jun. 30, 2017

Borrowings Under Credit Facilities and Related Items (Tables) [Abstract]

Aggregate borrowings under the unsecured line of credit arrangements

		Three Months Ended June 30,				Six Months Ended June 30,
		2017		2016		2017		2016
Balance outstanding at quarter end(1)		$	385,000	$	745,000	$	385,000	$	745,000
Maximum amount outstanding at any month end		$	640,000	$	745,000	$	1,010,000	$	945,000
Average amount outstanding (total of daily
	principal balances divided by days in period)	$	561,626	$	623,077	$	678,343	$	647,060
Weighted average interest rate (actual interest
	expense divided by average borrowings outstanding)		1.94%		1.26%		1.87%		1.28%
(1) As of June 30, 2017, letters of credit in the aggregate amount of $32,456,000 have been issued, which reduces the borrowing capacity on the unsecured revolving credit facility.

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Senior Unsecured Notes and Secured Debt (Tables)

6 Months Ended

Jun. 30, 2017

Senior Unsecured Notes And Secured Debt (Tables) [Abstract]

Principal payments due on debt obligations

	Senior		Secured
	Unsecured Notes(1,2)		Debt (1,3)		Totals
2017	$	-	$	173,105	$	173,105
2018		450,000		405,834		855,834
2019		605,000		480,977		1,085,977
2020(4)		681,089		156,585		837,674
2021(5,6)		1,142,574		214,352		1,356,926
Thereafter(7,8,9,10)		5,464,476		1,243,836		6,708,312
Totals	$	8,343,139	$	2,674,689	$	11,017,828
(1) Amounts represent principal amounts due and do not include unamortized premiums/discounts, debt issuance costs, or other fair value adjustments as reflected on the balance sheet.
(2) Annual interest rates range from 1.8% to 6.5%.
(3) Annual interest rates range from 1.42% to 7.98%. Carrying value of the properties securing the debt totaled $5,624,262,000 at June 30, 2017.
(4) In November 2015, one of our wholly-owned subsidiaries issued and we guaranteed $300,000,000 of Canadian-denominated 3.35% senior unsecured notes due 2020 (approximately $231,089,000 based on the Canadian/U.S. Dollar exchange rate on June 30, 2017).
(5) On May 13, 2016, we refinanced the funding on a $250,000,000 Canadian-denominated unsecured term credit facility (approximately $192,574,000 based on the Canadian/U.S. Dollar exchange rate on June 30, 2017). The loan matures on May 13, 2021 and bears interest at the Canadian Dealer Offered Rate plus 95 basis points (1.79% at June 30, 2017).
(6) On May 13, 2016, we refinanced the funding on a $500,000,000 unsecured term credit facility. The loan matures on May 13, 2021 and bears interest at LIBOR plus 95 basis points (2.08% at June 30, 2017).
(7) On November 20, 2013, we completed the sale of £550,000,000 (approximately $714,725,000 based on the Sterling/U.S. Dollar exchange rate in effect on June 30, 2017) of 4.8% senior unsecured notes due 2028.
(8) On November 25, 2014, we completed the sale of £500,000,000 (approximately $649,750,000 based on the Sterling/U.S. Dollar exchange rate in effect on June 30, 2017) of 4.5% senior unsecured notes due 2034.
(9) In May 2015, we issued $750,000,000 of 4.0% senior unsecured notes due 2025. In October 2015, we issued an additional $500,000,000 of these notes under a re-opening of the offer.
(10) In March 2016, we issued $700,000,000 of 4.25% senior unsecured notes due 2026.

Summary of senior unsecured note activity

	Six Months Ended
	June 30, 2017			June 30, 2016
			Weighted Avg.			Weighted Avg.
	Amount		Interest Rate	Amount		Interest Rate
Beginning balance	$	8,260,038	4.245%	$	8,645,758	4.237%
Debt issued		-	0.000%		705,000	4.228%
Debt extinguished		-	0.000%		(400,000)	3.625%
Foreign currency		83,101	4.320%		(133,234)	4.417%
Ending balance	$	8,343,139	4.276%	$	8,817,524	4.263%

Secured debt principal activity

	Six Months Ended
		June 30, 2017		June 30, 2016
			Weighted Avg.			Weighted Avg.
	Amount		Interest Rate	Amount		Interest Rate
Beginning balance	$	3,465,066	4.094%	$	3,478,207	4.440%
Debt issued		161,799	2.331%		161,992	3.051%
Debt assumed		23,094	6.670%		-	0.000%
Debt extinguished		(987,923)	5.370%		(243,314)	4.874%
Principal payments		(32,206)	4.378%		(37,737)	4.579%
Foreign currency		44,859	3.116%		62,118	3.652%
Ending balance	$	2,674,689	3.669%	$	3,421,266	4.328%

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Derivative Instruments (Tables)

6 Months Ended

Jun. 30, 2017

Derivative Instruments (Tables) [Abstract]

Impact of derivative instruments on the statement of operations and OCI

		June 30, 2017		December 31, 2016
Derivatives designated as net investment hedges:
Denominated in Canadian Dollars	$	875,000	$	900,000
Denominated in Pounds Sterling	£	550,000	£	550,000
Financial instruments designated as net investment hedges:
Denominated in Canadian Dollars	$	250,000	$	250,000
Denominated in Pounds Sterling	£	1,050,000	£	1,050,000
Derivatives designated as cash flow hedges:
Denominated in U.S. Dollars	$	-	$	57,000
Denominated in Canadian Dollars	$	54,000	$	54,000
Denominated in Pounds Sterling	£	54,000	£	48,000
Derivative instruments not designated:
Denominated in Canadian Dollars	$	37,000	$	37,000

		Three Months Ended				Six Months Ended
		June 30,				June 30,
	Location		2017		2016		2017		2016
Gain (loss) on interest rate swaps reclassified from AOCI into income (effective portion)	Interest expense	$	-	$	(477)	$	-	$	(960)
Gain (loss) on forward exchange contracts recognized in income	Interest expense		1,732		2,697		4,189		1,369
Gain (loss) on foreign exchange contracts and term loans designated as net investment hedge recognized in OCI	OCI		(97,539)		178,575		(141,880)		175,836

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Stockholders' Equity (Tables)

6 Months Ended

Jun. 30, 2017

Stockholders' Equity (Tables) [Abstract]

Summary of stockholder's equity capital accounts

	June 30, 2017	December 31, 2016
Preferred Stock:
Authorized shares	50,000,000	50,000,000
Issued shares	14,375,000	25,875,000
Outstanding shares	14,375,000	25,875,000
Common Stock, $1.00 par value:
Authorized shares	700,000,000	700,000,000
Issued shares	369,966,425	363,576,924
Outstanding shares	368,878,042	362,602,173

Summary of preferred stock activity

	Six Months Ended
	June 30, 2017		June 30, 2016
		Weighted Avg.		Weighted Avg.
	Shares	Dividend Rate	Shares	Dividend Rate
Beginning balance	25,875,000	6.500%	25,875,000	6.500%
Shares redeemed	(11,500,000)	6.500%	-	0.000%
Ending balance	14,375,000	6.500%	25,875,000	6.500%

Summary of common stock issuances

	Shares Issued		Average Price		Gross Proceeds		Net Proceeds
2016 Dividend reinvestment plan issuances	1,971,758	$	64.65	$	127,470	$	127,470
2016 Option exercises	37,409		48.73		1,823		1,823
2016 Equity shelf program issuances	443,096		67.12		30,192		29,739
2016 Stock incentive plans, net of forfeitures	460,047				-		-
2016 Totals	2,912,310			$	159,485	$	159,032
2017 Dividend reinvestment plan issuances	2,836,216	$	70.55	$	200,097	$	199,757
2017 Option exercises	202,190		50.88		10,288		10,288
2017 Equity shelf program issuances	2,986,574		72.30		215,917		214,406
2017 Redemption of equity membership units	91,180				-		-
2017 Stock incentive plans, net of forfeitures	159,709				-		-
2017 Totals	6,275,869			$	426,302	$	424,451

Summary of dividend payments

	Six Months Ended
	June 30, 2017				June 30, 2016
	Per Share		Amount		Per Share		Amount
Common Stock	$	1.7400	$	634,296	$	1.7200	$	613,163
Series I Preferred Stock		1.6250		23,360		1.6250		23,359
Series J Preferred Stock		0.2347		2,699		0.8126		9,344
Totals			$	660,355			$	645,866

Summary of accumulated other comprehensive income/(loss)

		Unrecognized gains (losses) related to:
		Foreign Currency Translation		Available for Sale Securities		Actuarial Losses		Cash Flow Hedges		Total
Balance at December 31, 2016	$	(173,496)	$	5,120	$	(1,153)	$	(2)	$	(169,531)
Other comprehensive income before reclassification adjustments		22,384		(16,477)		-		-		5,907
Net current-period other comprehensive income		22,384		(16,477)		-		-		5,907
Balance at June 30, 2017	$	(151,112)	$	(11,357)	$	(1,153)	$	(2)	$	(163,624)
Balance at December 31, 2015	$	(85,484)	$	-	$	(1,343)	$	(1,416)	$	(88,243)
Other comprehensive income before reclassification adjustments		(61,207)		(11,160)		2		10		(72,355)
Reclassification amount to net income		-		-		-		960 (1)		960
Net current-period other comprehensive income		(61,207)		(11,160)		2		970		(71,395)
Balance at June 30, 2016	$	(146,691)	$	(11,160)	$	(1,341)	$	(446)	$	(159,638)
(1) Please see Note 11 for additional information.

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Earnings Per Share (Tables)

6 Months Ended

Jun. 30, 2017

Earnings Per Share (Tables) [Abstract]

Computation of basic and diluted earnings per share

		Three Months Ended				Six Months Ended
		June 30,				June 30,
		2017		2016		2017		2016
Numerator for basic and diluted earnings
	per share - net income (loss) attributable
	to common stockholders	$	188,429	$	195,474	$	501,068	$	344,444
Denominator for basic earnings per
	share - weighted average shares		366,524		356,646		364,551		355,879
Effect of dilutive securities:
	Employee stock options		50		129		60		115
	Non-vested restricted shares		479		465		438		359
	Redeemable shares		1,096		1,651		1,374		1,136
Dilutive potential common shares			1,625		2,245		1,872		1,610
Denominator for diluted earnings per
	share - adjusted weighted average shares		368,149		358,891		366,423		357,489
Basic earnings per share		$	0.51	$	0.55	$	1.37	$	0.97
Diluted earnings per share		$	0.51	$	0.54	$	1.37	$	0.96

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Disclosure about Fair Value of Financial Instruments (Tables)

6 Months Ended

Jun. 30, 2017

Disclosure about Fair Value of Financial Instruments (Tables) [Abstract]

Carrying amounts and estimated fair values of financial instruments

		June 30, 2017				December 31, 2016
		Carrying Amount		Fair Value		Carrying Amount		Fair Value
Financial assets:
	Mortgage loans receivable	$	369,141	$	405,671	$	485,735	$	521,773
	Other real estate loans receivable		151,338		156,266		136,893		138,050
	Available-for-sale equity investments		11,422		11,422		27,899		27,899
	Cash and cash equivalents		442,284		442,284		419,378		419,378
	Foreign currency forward contracts		54,326		54,326		135,561		135,561
Financial liabilities:
	Borrowings under unsecured credit facilities	$	385,000	$	385,000	$	645,000	$	645,000
	Senior unsecured notes		8,250,940		9,088,276		8,161,619		8,879,176
	Secured debt		2,670,914		2,718,333		3,477,699		3,558,378
	Foreign currency forward contracts		10,426		10,426		4,342		4,342
Redeemable OP unitholder interests		$	111,149	$	111,149	$	110,502	$	110,502

The Market approach utilized to measure fair value of financial assets and liabilities on recurring basis

	Fair Value Measurements as of June 30, 2017
	Total		Level 1		Level 2		Level 3
Available-for-sale equity investments(1)	$	11,422	$	11,422	$	-	$	-
Foreign currency forward contracts, net(2)		43,900		-		43,900		-
Redeemable OP unitholder interests		111,149		-		111,149		-
Totals	$	166,471	$	11,422	$	155,049	$	-
(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.

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Segment Reporting (Tables)

6 Months Ended

Jun. 30, 2017

Segment Reporting (Tables) [Abstract]

Summary of information for reportable segments

Three Months Ended June 30, 2017:		Triple-net		Seniors Housing Operating		Outpatient Medical		Non-segment / Corporate		Total
Rental income	$	217,889	$	-	$	137,710	$	-	$	355,599
Resident fees and services		-		677,040		-		-		677,040
Interest income		20,901		-		-		-		20,901
Other income		2,557		1,049		1,217		239		5,062
Total revenues		241,347		678,089		138,927		239		1,058,602
Property operating expenses		-		459,111		42,744		-		501,855
Consolidated net operating income		241,347		218,978		96,183		239		556,747
Interest expense		2,515		15,403		2,122		96,191		116,231
Loss (gain) on derivatives, net		736		-		-		-		736
Depreciation and amortization		60,171		117,198		47,478		-		224,847
General and administrative		-		-		-		32,632		32,632
Transaction costs
Loss (gain) on extinguishment of debt, net		-		2,524		2,991		-		5,515
Impairment of assets		4,846		8,785		-		-		13,631
Other expenses		2,181		1,165		1,310		1,683		6,339
Income (loss) from continuing operations before income taxes and income from unconsolidated entities		170,898		73,903		42,282		(130,267)		156,816
Income tax (expense) benefit		(1,471)		10,247		(351)		23		8,448
Income (loss) from unconsolidated entities		3,867		(8,449)		604		-		(3,978)
Income (loss) from continuing operations		173,294		75,701		42,535		(130,244)		161,286
Gain (loss) on real estate dispositions, net		42,155		-		-		-		42,155
Net income (loss)	$	215,449	$	75,701	$	42,535	$	(130,244)	$	203,441
Total assets	$	9,990,063	$	12,753,128	$	5,008,067	$	224,528	$	27,975,786

Three Months Ended June 30, 2016:		Triple-net		Seniors Housing Operating		Outpatient Medical		Non-segment / Corporate		Total
Rental income	$	287,134	$	-	$	135,494	$	-	$	422,628
Resident fees and services		-		615,220		-		-		615,220
Interest income		21,971		1,042		994		-		24,007
Other income		1,206		8,989		4,153		454		14,802
Total revenues		310,311		625,251		140,641		454		1,076,657
Property operating expenses		-		417,996		40,836		-		458,832
Consolidated net operating income		310,311		207,255		99,805		454		617,825
Interest expense		5,754		20,274		5,402		100,896		132,326
Depreciation and amortization		75,809		102,312		48,448		-		226,569
General and administrative		-		-		-		39,914		39,914
Transaction costs		1,291		3,247		619		-		5,157
Loss (gain) on extinguishment of debt, net		121		(88)		-		-		33
Other expenses		-		-		-		3,161		3,161
Income (loss) from continuing operations before income taxes and income from unconsolidated entities		227,336		81,510		45,336		(143,517)		210,665
Income tax (expense) benefit		(213)		2,023		(248)		(1,049)		513
Income (loss) from unconsolidated entities		3,018		(4,887)		(90)		-		(1,959)
Income (loss) from continuing operations		230,141		78,646		44,998		(144,566)		209,219
Gain (loss) on real estate dispositions, net		1,530		-		-		-		1,530
Net income (loss)	$	231,671	$	78,646	$	44,998	$	(144,566)	$	210,749

Six Months Ended June 30, 2017:		Triple-net		Seniors Housing Operating		Outpatient Medical		Non-segment / Corporate		Total
Rental income	$	445,180	$	-	$	277,561	$	-	$	722,741
Resident fees and services		-		1,347,377		-		-		1,347,377
Interest income		41,580		69		-		-		41,649
Other income		4,321		2,510		1,830		472		9,133
Total revenues		491,081		1,349,956		279,391		472		2,120,900
Property operating expenses		-		921,536		90,488		-		1,012,024
Consolidated net operating income		491,081		428,420		188,903		472		1,108,876
Interest expense		8,025		31,219		4,413		191,170		234,827
Loss (gain) on derivatives, net		1,960		-		-		-		1,960
Depreciation and amortization		119,781		236,935		96,408		-		453,124
General and administrative		-		-		-		63,733		63,733
Loss (gain) on extinguishment of debt, net		29,083		3,414		4,373		-		36,870
Impairment of assets		4,846		14,191		5,625		-		24,662
Other expenses		7,190		2,943		1,671		6,210		18,014
Income (loss) from continuing operations before income taxes and income from unconsolidated entities		320,196		139,718		76,413		(260,641)		275,686
Income tax (expense) benefit		(2,271)		9,160		(686)		-		6,203
Income (loss) from unconsolidated entities		9,505		(37,640)		1,051		-		(27,084)
Income (loss) from continuing operations		327,430		111,238		76,778		(260,641)		254,805
Gain (loss) on real estate dispositions, net		273,236		13,011		-		-		286,247
Net income (loss)	$	600,666	$	124,249	$	76,778	$	(260,641)	$	541,052

Six Months Ended June 30, 2016:		Triple-net		Seniors Housing Operating		Outpatient Medical		Non-segment / Corporate		Total
Rental income	$	570,958	$	-	$	267,332	$	-	$	838,290
Resident fees and services		-		1,217,369		-		-		1,217,369
Interest income		44,824		2,073		2,298		-		49,195
Other income		2,695		11,178		4,466		512		18,851
Total revenues		618,477		1,230,620		274,096		512		2,123,705
Property operating expenses		-		826,890		81,578		-		908,468
Consolidated net operating income		618,477		403,730		192,518		512		1,215,237
Interest expense		12,117		40,797		11,146		201,225		265,285
Depreciation and amortization		155,609		204,144		95,512		-		455,265
General and administrative		-		-		-		85,606		85,606
Transaction costs		4,143		7,180		2,042		-		13,365
Loss (gain) on extinguishment of debt, net		97		(88)		-		-		9
Impairment of assets		14,314		-		-		-		14,314
Other expenses		-		-		-		3,161		3,161
Income (loss) from continuing operations before income taxes and income from unconsolidated entities		432,197		151,697		83,818		(289,480)		378,232
Income tax expense		(528)		4,789		(476)		(1,546)		2,239
(Loss) income from unconsolidated entities		6,100		(11,822)		(56)		-		(5,778)
Income (loss) from continuing operations		437,769		144,664		83,286		(291,026)		374,693
Gain (loss) on real estate dispositions, net		1,530		-		-		-		1,530
Net income (loss)	$	439,299	$	144,664	$	83,286	$	(291,026)	$	376,223

		Three Months Ended						Six Months Ended
		June 30, 2017			June 30, 2016			June 30, 2017			June 30, 2016
Revenues:		Amount	%		Amount	%		Amount	%		Amount	%
United States	$	851,943	80.5%	$	862,115	80.1%	$	1,710,611	80.7%	$	1,704,470	80.3%
United Kingdom		99,747	9.4%		102,593	9.5%		193,590	9.1%		203,148	9.5%
Canada		106,912	10.1%		111,949	10.4%		216,699	10.2%		216,087	10.2%
Total	$	1,058,602	100.0%	$	1,076,657	100.0%	$	2,120,900	100.0%	$	2,123,705	100.0%
		As of
		June 30, 2017			December 31, 2016
Assets:		Amount	%		Amount	%
United States	$	22,323,973	79.8%	$	23,572,459	81.7%
United Kingdom		3,064,196	11.0%		2,782,489	9.6%
Canada		2,587,617	9.2%		2,510,236	8.7%
Total	$	27,975,786	100.0%	$	28,865,184	100.0%

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Variable Interest Entity Disclosure (Tables)

6 Months Ended

Jun. 30, 2017

Variable Interest Entity Disclosure [Abstract]

Schedule of Variable Interest Entities [Table Text Block]

		June 30, 2017		December 31, 2016
Assets
	Net real property owned	$	1,019,154	$	989,596
	Cash and cash equivalents		10,180		10,501
	Receivables and other assets		16,284		12,102
	Total assets(1)	$	1,045,618	$	1,012,199
Liabilities and equity
	Secured debt	$	473,781	$	450,255
	Accrued expenses and other liabilities		15,396		13,803
	Redeemable noncontrolling interests		180,690		185,556
	Total equity		375,751		362,585
	Total liabilities and equity	$	1,045,618	$	1,012,199
(1) Note that assets of the consolidated variable interest entities can only be used to settle obligations relating to such variable interest entities. Liabilities of the consolidated variable interest entities represent claims against the specific assets of the variable interest entities.

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Accounting Policies and Related Matters (Details) $ in Thousands	6 Months Ended
	Jun. 30, 2016 USD ($)
Accounting Policies and Related Matters [Abstract]
Payments Related to Tax Withholding for Share-based Compensation	$ 6,916

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Real Property Acquisitions and Development (Details 1) - USD ($) $ in Thousands		6 Months Ended
		Jun. 30, 2017	Jun. 30, 2016
Triple Net [Member]
Estimated Fair Value of Allocated Purchase Price of Asset and Liabilities
Land and land improvements		$ 30,440	$ 18,901
Buildings and improvements		188,569	160,209
Acquired lease intangibles		0	2,876
Total assets acquired		219,009	181,986
Accrued expenses and other liabilities		(20,855)	(1,459)
Total liabilities assumed		(20,855)	(1,459)
Noncontrolling interests		(7,284)	0
Non-cash acquisition related activity	[1]	(54,989)	(37,703)
Cash disbursed for acquisitions		135,881	142,824
Construction in progress additions		76,245	85,687
Less: Capitalized Interest		(3,215)	(3,771)
Less: Foreign currency translation		(3,044)	(2,712)
Cash disbursed for construction in progress		69,986	79,204
Capital improvements to existing properties		15,269	14,877
Total cash invested in real property		221,136	236,905
Non Cash Acquisition Financed As Real Estate Loan Receivable		54,989	31,014
Non cash acquisition financed as equity investments			6,630
Senior housing - operating [Member]
Estimated Fair Value of Allocated Purchase Price of Asset and Liabilities
Land and land improvements		10,590	5,617
Buildings and improvements		69,056	128,200
Acquired lease intangibles		3,596	6,334
Receivables and other assets		296	894
Total assets acquired	[2]	83,538	141,045
Accrued expenses and other liabilities		(8,606)	(4,853)
Total liabilities assumed		(8,606)	(4,853)
Noncontrolling interests		(647)	(549)
Non-cash acquisition related activity	[3]	(31,546)	(7,659)
Cash disbursed for acquisitions		42,739	127,984
Construction in progress additions		42,787	134,019
Less: Capitalized Interest		(3,804)	(2,011)
Less: Foreign currency translation		3,060	(5,344)
Cash disbursed for construction in progress		42,043	126,664
Capital improvements to existing properties		60,129	47,553
Total cash invested in real property		144,911	302,201
Cash Acquired from Acquisition		400	134
Non Cash Acquisition Financed As Real Estate Loan Receivable		6,349
Non cash acquisition financed as equity investments		25,197	7,659
Outpatient Medical [Member]
Estimated Fair Value of Allocated Purchase Price of Asset and Liabilities
Land and land improvements		25,060	0
Buildings and improvements		62,038	32,650
Acquired lease intangibles		8,397	0
Receivables and other assets		118	0
Total assets acquired		95,613	32,650
Secured debt		(25,824)	0
Accrued expenses and other liabilities		(2,210)	(990)
Total liabilities assumed		(28,034)	(990)
Noncontrolling interests		(9,080)	0
Non-cash acquisition related activity	[4]	0	(15,013)
Cash disbursed for acquisitions		58,499	16,647
Construction in progress additions		31,830	50,896
Less: Capitalized Interest		(1,343)	(1,561)
Less: Accruals	[5]	6,530	(5,336)
Cash disbursed for construction in progress		37,017	43,999
Capital improvements to existing properties		17,409	25,099
Total cash invested in real property		$ 112,925	$ 85,745

[1] For the six months ended June 30, 2017, $54,989,000 is related to the acquisition of assets previously financed as real estate loans receivable. For the six months ended June 30, 2016, $31,014,000 is related to the acquisition of assets previously financed as real estate loans receivable and $6,630,000 is related to the acquisition of assets previously financed as an investment in an unconsolidated entity.

[2] Excludes $400,000 and $134,000 of cash acquired during the six months ended June 30, 2017 and 2016, respectively.

[3] Includes $6,349,000 related to the acquisition of assets previously financed as real estate loans receivable during the six months ended June 30, 2017. Includes $25,197,000 and $7,659,000 for the six months ended June 30, 2017 and 2016 related to the acquisition of assets previously financed as an investments in an unconsolidated entity.

[4] Represents the acquisition of assets previously financed as real estate loans receivable. Please refer to Note 6 for additional information.

[5] Represents the change in non-cash consideration accruals for amounts to be paid in periods other than the period in which the construction projects converted to operations.

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Real Property Acquisitions and Development (Details 2) - USD ($) $ in Thousands	6 Months Ended
	Jun. 30, 2017	Jun. 30, 2016
Development projects:
Total development projects	$ 333,320	$ 35,363
Expansion projects	2,798	2,879
Total construction in progress conversions	336,118	38,242
Triple Net [Member]
Development projects:
Total development projects	266,650	0
Seniors housing operating [Member]
Development projects:
Total development projects	3,634	0
Outpatient Medical [Member]
Development projects:
Total development projects	$ 63,036	$ 35,363

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Real Estate Intangibles (Details) - USD ($) $ in Thousands	6 Months Ended	12 Months Ended
	Jun. 30, 2017	Dec. 31, 2016
Intangible Assets:
Gross historical cost	$ 1,436,041	$ 1,402,884
Accumulated amortization	(1,053,353)	(966,714)
Net book value	$ 382,688	$ 436,170
Weighted-average amortization period in years	15 years 1 month	13 years 8 months
Intangible Liabilities:
Gross historical cost	$ 99,223	$ 97,575
Accumulated amortization	(55,749)	(52,134)
Net book value	$ 43,474	$ 45,441
Weighted-average amortization period in years	15 years 5 months	15 years 2 months
In place lease intangibles [Member]
Intangible Assets:
Gross historical cost	$ 1,278,755	$ 1,252,143
Above market tenant leases [Member]
Intangible Assets:
Gross historical cost	64,408	61,700
Below market ground leases [Member]
Intangible Assets:
Gross historical cost	62,224	61,628
Lease commissions [Member]
Intangible Assets:
Gross historical cost	30,654	27,413
Below market tenant leases [Member]
Intangible Liabilities:
Gross historical cost	90,683	89,468
Above market ground leases [Member]
Intangible Liabilities:
Gross historical cost	$ 8,540	$ 8,107

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Real Estate Intangibles (Real Estate Intangible Maturity Schedule) (Details) - USD ($) $ in Thousands	Jun. 30, 2017	Dec. 31, 2016
Estimated Aggregate Amortization Expense For Acquired Lease Intangibles Expected To Be Recognized [Line Items]
Totals	$ 382,688	$ 436,170
Intangible Liability [Member]
Estimated Aggregate Amortization Expense For Acquired Lease Intangibles Expected To Be Recognized [Line Items]
2017	3,337
2018	6,190
2019	5,731
2020	5,234
2021	4,746
Thereafter	18,236
Totals	43,474
Intangible Asset [Member]
Estimated Aggregate Amortization Expense For Acquired Lease Intangibles Expected To Be Recognized [Line Items]
2017	71,356
2018	83,762
2019	35,095
2020	24,793
2021	20,695
Thereafter	146,987
Totals	$ 382,688

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Real Estate Intangibles (Details 1) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2017	Jun. 30, 2016	Jun. 30, 2017	Jun. 30, 2016
Real Estate Intangible Amortization [Abstract]
Rental income related to above/below market tenant leases, net	$ 267	$ 210	$ 571	$ 290
Property operating expenses related to above/below market ground leases, net	(307)	(311)	(619)	(622)
Depreciation and amortization related to in place lease intangibles and lease commissions	$ (35,439)	$ (31,109)	$ (74,741)	$ (65,473)

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Dispositions, Assets Held for Sale and Discontinued Operations (Details) - USD ($) $ in Thousands	6 Months Ended
	Jun. 30, 2017	Jun. 30, 2016
Real property dispositions:
Total dispositions	$ 896,281	$ 128,768
Gain Loss On Sale Of Properties	286,247	1,530
Net other assets/liabilities disposed	21,254	0
Proceeds from sales of real property	1,203,782	130,298
Triple Net [Member]
Real property dispositions:
Total dispositions	882,436	128,768
Senior housing - operating [Member]
Real property dispositions:
Total dispositions	$ 13,845	$ 0

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Dispositions, Assets Held for Sale and Discontinued Operations (Details 2) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2017	Jun. 30, 2016	Jun. 30, 2017	Jun. 30, 2016
Revenues:
Rental income, disposed	$ 4,094	$ 19,990	$ 21,494	$ 38,552
Expenses:
Interest expense, disposed	284	2,506	1,714	5,032
Property operating expenses, disposed	2,020	1,338	5,098	2,700
Depreciation expense, disposed	475	3,071	1,121	7,022
Expenses, disposed	2,779	6,915	7,933	14,754
Income (loss) from disposed properties	$ 1,315	$ 13,075	$ 13,561	$ 23,798

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Real Estate Loans Receivable (Details) - USD ($) $ in Thousands		6 Months Ended
		Jun. 30, 2017	Jun. 30, 2016
Advances on real estate loans receivable:
Investments in new loans		$ 10,037	$ 8,223
Draws on existing loans		40,680	42,836
Net cash advances on real estate loans		50,717	51,059
Receipts on real estate loans receivable:
Loan payoffs		157,539	209,916
Principal payments on loans		798	4,454
Sub-total		158,337	214,370
Less : Non-cash activity	[1],[2]	(121,837)	(46,027)
Total receipts on real estate loans		36,500	168,343
Net advances (receipts) on real estate loans		14,217	(117,284)
Change in balance due to foreign currency translation		5,471	(8,504)
Net change Real Estate Loans Receivable		(102,149)	(171,815)
Triple Net [Member]
Advances on real estate loans receivable:
Investments in new loans		10,037	8,223
Draws on existing loans		40,680	42,803
Net cash advances on real estate loans		50,717	51,026
Receipts on real estate loans receivable:
Loan payoffs		97,039	182,613
Principal payments on loans		798	4,454
Sub-total		97,837	187,067
Less : Non-cash activity	[1],[2]	(61,337)	(31,014)
Total receipts on real estate loans		36,500	156,053
Net advances (receipts) on real estate loans		14,217	(105,027)
Change in balance due to foreign currency translation		5,471	(8,504)
Net change Real Estate Loans Receivable		(41,649)	(144,545)
Outpatient Medical [Member]
Advances on real estate loans receivable:
Investments in new loans		0	0
Draws on existing loans		0	33
Net cash advances on real estate loans		0	33
Receipts on real estate loans receivable:
Loan payoffs		60,500	27,303
Principal payments on loans		0	0
Sub-total		60,500	27,303
Less : Non-cash activity	[1],[2]	(60,500)	(15,013)
Total receipts on real estate loans		0	12,290
Net advances (receipts) on real estate loans		0	(12,257)
Change in balance due to foreign currency translation		0	0
Net change Real Estate Loans Receivable		$ (60,500)	$ (27,270)

[1] Current year outpatient medical represents a deed in lieu of foreclosure on a previously financed first mortgage property.

[2] Triple-net and prior year outpatient medical represents acquisitions of assets previously financed as real estate loans. Please see Note 3 for additional information.

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Real Estate Loans Receivable (Details 1) - USD ($) $ in Thousands	6 Months Ended
	Jun. 30, 2017	Jun. 30, 2016
Summary of loan impairments
Balance of impaired loans at end of period	$ 289,473	$ 0
Allowance for loan losses	5,811	0
Balance of impaired loans not reserved	283,662	0
Average impaired loans for the period	327,324	0
Interest recognized on impaired loans	$ 16,464	$ 0

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Real Estate Loans Receivable (Textuals) (Details) - USD ($) $ in Thousands	6 Months Ended	12 Months Ended
	Jun. 30, 2017	Dec. 31, 2016	Jun. 30, 2016
Financing Receivable, Modifications [Line Items]
Maturity Date	May 13, 2021
Allowance for loan losses	$ 5,811	$ 6,563	$ 0
Genesis Healthcare Loans [Member] | Triple Net [Member]
Financing Receivable, Modifications [Line Items]
Long-term Debt, Gross	$ 317,000
Provision For Loan And Lease Losses Real Estate Excluding Write Off		$ 6,935
Gensis Healthcare Loan Maturing In 2017 [Member] | Triple Net [Member]
Financing Receivable, Modifications [Line Items]
Maturity Date	Feb. 28, 2017
Gensis Healthcare Loan Maturing In 2018 [Member] | Triple Net [Member]
Financing Receivable, Modifications [Line Items]
Maturity Date	Sep. 30, 2018
Genesis Healthcare Four Restructured Loans [Member] | Triple Net [Member]
Financing Receivable, Modifications [Line Items]
Debt Instrument Restructured Loan Effective Date	Oct. 01, 2016
Debt Instrument, Term	5 years
Debt Instrument Interest Rate Stated Percentage	10.00%
Debt Instrument Basis Spread On Variable Rate1	0.25%

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Investments in Unconsolidated Entities (Summary of Investments in Unconsolidated Entities) (Details) - USD ($) $ in Thousands		Jun. 30, 2017	Dec. 31, 2016
Schedule of Equity Method Investments [Line Items]
Investments in unconsolidated entities		$ 425,489	$ 457,138
Triple Net [Member]
Schedule of Equity Method Investments [Line Items]
Investments in unconsolidated entities		$ 23,978	$ 27,005
Triple Net [Member] | Minimum [Member]
Schedule of Equity Method Investments [Line Items]
Equity Method Investment, Ownership Percentage	[1]	10.00%	10.00%
Triple Net [Member] | Maximum [Member]
Schedule of Equity Method Investments [Line Items]
Equity Method Investment, Ownership Percentage	[1]	49.00%	49.00%
Seniors Housing Facilities Operating [Member]
Schedule of Equity Method Investments [Line Items]
Investments in unconsolidated entities		$ 358,889	$ 407,172
Seniors Housing Facilities Operating [Member] | Minimum [Member]
Schedule of Equity Method Investments [Line Items]
Equity Method Investment, Ownership Percentage	[1]	10.00%	10.00%
Seniors Housing Facilities Operating [Member] | Maximum [Member]
Schedule of Equity Method Investments [Line Items]
Equity Method Investment, Ownership Percentage	[1]	50.00%	50.00%
Outpatient Medical [Member]
Schedule of Equity Method Investments [Line Items]
Equity Method Investment, Ownership Percentage	[1]	43.00%	43.00%
Investments in unconsolidated entities		$ 42,622	$ 22,961

[1] Excludes ownership of in-substance real estate.

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Investments in Unconsolidated Entities (Details)	Jun. 30, 2017 USD ($)
Schedule of Equity Method Investments [Line Items]
Unamortized Investment In Joint Venture Primarily Attributable To Real Estate And Related Intangible Assets	$ 84,451,000
Sunrise Senior Living Inc. [Member]
Schedule of Equity Method Investments [Line Items]
Unamortized Investment In Joint Venture Primarily Attributable To Real Estate And Related Intangible Assets	$ 84,451,000
Percentage of partnership owned	24.00%
New ownership including new acquisitions	34.00%

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Credit Concentration (Details) $ in Thousands		3 Months Ended		6 Months Ended
		Jun. 30, 2017 USD ($) properties	Jun. 30, 2016 USD ($)	Jun. 30, 2017 USD ($) properties	Jun. 30, 2016 USD ($)	Dec. 31, 2016
Concentration by investment:
Number of properties in diversified portfolio | properties	[1]	1,274		1,274
Percent of NOI	[1],[2]			100.00%
Net Operating Income | $		$ 556,747	$ 617,825	$ 1,108,876	$ 1,215,237
Credit Concentration (Textual) [Abstract]
Percentage total investments with top five customers						45.00%
Genesis HealthCare [Member]
Concentration by investment:
Number of properties in diversified portfolio | properties	[1]	86		86
Genesis HealthCare [Member] | Net Operating Income [Member]
Concentration by investment:
Percent of NOI	[1],[2]			9.00%
Net Operating Income | $	[1]			$ 98,225
Sunrise Senior Living Inc. [Member]
Concentration by investment:
Number of properties in diversified portfolio | properties	[1],[3]	153		153
Sunrise Senior Living Inc. [Member] | Net Operating Income [Member]
Concentration by investment:
Percent of NOI	[1],[2],[3]			14.00%
Net Operating Income | $	[1],[3]			$ 155,331
Brookdale [Member]
Concentration by investment:
Number of properties in diversified portfolio | properties	[1]	137		137
Brookdale [Member] | Net Operating Income [Member]
Concentration by investment:
Percent of NOI	[1],[2]			7.00%
Net Operating Income | $	[1]			$ 75,862
Revera [Member]
Concentration by investment:
Number of properties in diversified portfolio | properties	[1],[3]	98		98
Revera [Member] | Net Operating Income [Member]
Concentration by investment:
Percent of NOI	[1],[2],[3]			7.00%
Net Operating Income | $	[1],[3]			$ 75,937
Benchmark Senior Living [Member]
Concentration by investment:
Number of properties in diversified portfolio | properties	[1]	48		48
Benchmark Senior Living [Member] | Net Operating Income [Member]
Concentration by investment:
Percent of NOI	[1],[2]			4.00%
Net Operating Income | $	[1]			$ 48,095
Remaining Portfolio [Member]
Concentration by investment:
Number of properties in diversified portfolio | properties	[1]	752		752
Remaining Portfolio [Member] | Net Operating Income [Member]
Concentration by investment:
Percent of NOI	[1],[2]			59.00%
Net Operating Income | $	[1]			$ 655,426

[1] Genesis Healthcare is in our triple-net segment. Sunrise Senior Living and Revera are in our seniors housing operating segment. Benchmark Senior Living and Brookdale Senior Living are in both our triple-net and seniors housing operating segments.

[2] NOI with our top five relationships comprised 45% of total NOI for the year ending December 31, 2016.

[3] Revera owns a controlling interest in Sunrise Senior Living.

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Borrowings Under Credit Facilities and Related Items (Details) - USD ($) $ in Thousands	3 Months Ended				6 Months Ended
	Jun. 30, 2017		Jun. 30, 2016		Jun. 30, 2017		Jun. 30, 2016		Dec. 31, 2016
Aggregate borrowings under the unsecured line of credit arrangements
Balance outstanding at quarter end	$ 385,000	[1]	$ 745,000	[1]	$ 385,000	[1]	$ 745,000	[1]	$ 645,000
Maximum amount outstanding at any month end	640,000		745,000		1,010,000		945,000
Average amount outstanding (total of daily principal balances divided by days in period)	$ 561,626		$ 623,077		$ 678,343		$ 647,060
Weighted average interest rate (actual interest expense divided by average borrowings outstanding)	1.94%		1.26%		1.87%		1.28%

[1] As of June 30, 2017, letters of credit in the aggregate amount of $32,456,000 have been issued, which reduces the borrowing capacity on the unsecured revolving credit facility.

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Borrowings Under Credit Facilities and Related Items (Details Textual) $ in Thousands	6 Months Ended
	Jun. 30, 2017 USD ($) Number
Line Of Credit Facility [Line Items]
Unsecured line of credit arrangement	$ 3,000,000
Number of banks in consortium | Number	29
Available to borrow in alternate currencies	$ 1,000,000
Annual facility fee for each bank based on commitment amount	0.15%
Maturity Date	May 13, 2021
HCN Term Loan	$ 500,000
HCN Canadian Denomiated Term Loan	250,000
Accordion Feature [Member]
Line Of Credit Facility [Line Items]
HCN Term Loan	1,000,000
HCN Canadian Denomiated Term Loan	$ 250,000
Revolving Credit Facility [Member]
Line Of Credit Facility [Line Items]
Agent bank's prime rate of interest	2.12%
Debt Instrument Basis Spread On Variable Rate1	0.90%
Maturity Date	May 13, 2020
Letter of credit that reduces the borrowing capacity	$ 32,456

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Senior Unsecured Notes and Secured Debt (Details) £ in Thousands, CAD in Thousands, $ in Thousands		6 Months Ended
		Jun. 30, 2017 CAD	Jun. 30, 2017 GBP (£)	Jun. 30, 2017 USD ($)	Dec. 31, 2016 USD ($)	Oct. 01, 2015 USD ($)
Principal payments due on debt obligations
2017				$ 173,105
2018				855,834
2019				1,085,977
2020	[1]			837,674
2021	[2],[3]			1,356,926
Thereafter	[4],[5],[6],[7]			6,708,312
Totals				11,017,828
Senior Unsecured Notes and Secured Debt (Textual) [Abstract]
Senior unsecured notes				8,250,940	$ 8,161,619
Secured debt				2,670,914	$ 3,477,699
Maturity Date		May 13, 2021
Senior Unsecured Notes [Member]
Principal payments due on debt obligations
2017	[8],[9]			0
2018	[8],[9]			450,000
2019	[8],[9]			605,000
2020	[1],[8],[9]			681,089
2021	[2],[3],[8],[9]			1,142,574
Thereafter	[4],[5],[6],[7],[8],[9]			5,464,476
Totals	[8],[9]			$ 8,343,139
Senior Unsecured Notes [Member] | Maximum [Member]
Senior Unsecured Notes and Secured Debt (Textual) [Abstract]
Interest rate		6.50%	6.50%	6.50%
Senior Unsecured Notes [Member] | Minimum [Member]
Senior Unsecured Notes and Secured Debt (Textual) [Abstract]
Interest rate		1.80%	1.80%	1.80%
Secured Debt [Member]
Principal payments due on debt obligations
2017	[8],[10]			$ 173,105
2018	[8],[10]			405,834
2019	[8],[10]			480,977
2020	[1],[8],[10]			156,585
2021	[2],[3],[8],[10]			214,352
Thereafter	[4],[5],[6],[7],[8],[10]			1,243,836
Totals	[8],[10]			2,674,689
Senior Unsecured Notes and Secured Debt (Textual) [Abstract]
Carrying values of properties securing the debt				$ 5,624,262
Secured Debt [Member] | Maximum [Member]
Senior Unsecured Notes and Secured Debt (Textual) [Abstract]
Interest rate		7.98%	7.98%	7.98%
Secured Debt [Member] | Minimum [Member]
Senior Unsecured Notes and Secured Debt (Textual) [Abstract]
Interest rate		1.42%	1.42%	1.42%
3.35% senior unsecured note due 2020
Senior Unsecured Notes and Secured Debt (Textual) [Abstract]
Senior unsecured notes issued amount		CAD 300,000		$ 231,089
Debt Instrument, Issuance Date		Nov. 01, 2015
Canadian Denominated Unsecured Term Loan [Member]
Senior Unsecured Notes and Secured Debt (Textual) [Abstract]
Senior unsecured notes		CAD 250,000		192,574
Debt Instrument Basis Spread On Variable Rate1		1.79%
Debt Instrument, Issuance Date		May 13, 2016
Maturity Date		May 13, 2021
Canadian Denominated Unsecured Term Loan [Member] | London Interbank Offered Rate (LIBOR) [Member]
Senior Unsecured Notes and Secured Debt (Textual) [Abstract]
Debt Instrument Basis Spread On Variable Rate1		0.95%
Unsecured term credit facility [Member]
Senior Unsecured Notes and Secured Debt (Textual) [Abstract]
Senior unsecured notes				$ 500,000
Debt Instrument Basis Spread On Variable Rate1		2.08%
Debt Instrument, Issuance Date		May 13, 2016
Maturity Date		May 13, 2021
Unsecured term credit facility [Member] | London Interbank Offered Rate (LIBOR) [Member]
Senior Unsecured Notes and Secured Debt (Textual) [Abstract]
Debt Instrument Basis Spread On Variable Rate1		0.95%
UK Debt Due 2028 [Member]
Senior Unsecured Notes and Secured Debt (Textual) [Abstract]
Interest rate		4.80%	4.80%	4.80%
Senior unsecured notes issued amount			£ 550,000	$ 714,725
Debt Instrument, Issuance Date		Nov. 20, 2013
Maturity Date		Nov. 20, 2028
UK Debt Due 2034 [Member]
Senior Unsecured Notes and Secured Debt (Textual) [Abstract]
Interest rate		4.50%	4.50%	4.50%
Senior unsecured notes issued amount			£ 500,000	$ 649,750
Debt Instrument, Issuance Date		Nov. 25, 2014
Maturity Date		Nov. 24, 2034
4.00% Senior Unsecured Notes Due 2025 [Member]
Senior Unsecured Notes and Secured Debt (Textual) [Abstract]
Senior unsecured notes issued amount				750,000
Debt Instrument, Issuance Date		May 01, 2015
Senior Unsecured Notes Additional Issued Amount						$ 500,000
4.25% Senior Unsecured Notes Due 2026
Senior Unsecured Notes and Secured Debt (Textual) [Abstract]
Senior unsecured notes issued amount				$ 700,000
Debt Instrument, Issuance Date		Mar. 01, 2016
Maturity Date		Mar. 01, 2026

[1] In November 2015, one of our wholly-owned subsidiaries issued and we guaranteed $300,000,000 of Canadian-denominated 3.35% senior unsecured notes due 2020 (approximately $231,089,000 based on the Canadian/U.S. Dollar exchange rate on June 30, 2017).

[2] On May 13, 2016, we refinanced the funding on a $250,000,000 Canadian-denominated unsecured term credit facility (approximately $192,574,000 based on the Canadian/U.S. Dollar exchange rate on June 30, 2017). The loan matures on May 13, 2021 and bears interest at the Canadian Dealer Offered Rate plus 95 basis points (1.79% at June 30, 2017).

[3] On May 13, 2016, we refinanced the funding on a $500,000,000 unsecured term credit facility. The loan matures on May 13, 2021 and bears interest at LIBOR plus 95 basis points (2.08% at June 30, 2017).

[4] In March 2016, we issued $700,000,000 of 4.25% senior unsecured notes due 2026.

[5] In May 2015, we issued $750,000,000 of 4.0% senior unsecured notes due 2025. In October 2015, we issued an additional $500,000,000 of these notes under a re-opening of the offer.

[6] On November 20, 2013, we completed the sale of £550,000,000 (approximately $714,725,000 based on the Sterling/U.S. Dollar exchange rate in effect on June 30, 2017) of 4.8% senior unsecured notes due 2028.

[7] On November 25, 2014, we completed the sale of £500,000,000 (approximately $649,750,000 based on the Sterling/U.S. Dollar exchange rate in effect on June 30, 2017) of 4.5% senior unsecured notes due 2034.

[8] Amounts represent principal amounts due and do not include unamortized premiums/discounts, debt issuance costs, or other fair value adjustments as reflected on the balance sheet.

[9] Annual interest rates range from 1.8% to 6.5%.

[10] Annual interest rates range from 1.42% to 7.98%. Carrying value of the properties securing the debt totaled $5,624,262,000 at June 30, 2017.

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Senior Unsecured Notes and Secured Debt (Details 1) $ in Thousands	6 Months Ended		12 Months Ended
	Jun. 30, 2017 USD ($)	Jun. 30, 2016 USD ($)	Dec. 31, 2016 USD ($)	Dec. 31, 2015 USD ($)
Unsecured note issuances
Senior unsecured debt issued	$ 0	$ 693,560
Senior unsecured debt redeemed	0	400,000
Excluding Fair Value Adjustments [Member]
Unsecured note issuances
Senior unsecured debt balance	8,343,139	8,817,524	$ 8,260,038	$ 8,645,758
Senior unsecured debt issued	0	705,000
Senior unsecured debt extinguished	0	(400,000)
Senior unsecured debt foreign currency	$ 83,101	$ (133,234)
Senior unsecured debt balance average rate	0.04276	0.04263	0.04245	0.04237
Senior unsecured debt issued average rate	0	0.04228
Senior unsecured debt extinguished average rate	0	0.03625
Senior unsecured debt foreign currency average rate	0.0432	0.04417

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Senior Unsecured Notes and Secured Debt (Details 2) $ in Thousands	6 Months Ended		12 Months Ended
	Jun. 30, 2017 USD ($)	Jun. 30, 2016 USD ($)	Dec. 31, 2016 USD ($)	Dec. 31, 2015 USD ($)
Secured debt principal activity
Secured debt issued	$ 161,799	$ 161,992
Secured debt extinguished	1,020,129	281,051
Excluding Fair Value Adjustments [Member]
Secured debt principal activity
Secured debt principal balance	2,674,689	3,421,266	$ 3,465,066	$ 3,478,207
Secured debt issued	161,799	161,992
Secured debt assumed	23,094	0
Secured debt extinguished	(987,923)	(243,314)
Secured debt principal payments	(32,206)	(37,737)
Secured debt foreign currency	$ 44,859	$ 62,118
Secured debt principal balance average rate	0.03669	0.04328	0.04094	0.0444
Secured debt principal issued average rate	0.02331	0.03051
Secured debt principal assumed average rate	0.0667	0
Secured debt principal extinguished average rate	0.0537	0.04874
Secured debt principal payment average rate	0.04378	0.04579
Secured debt principal foreign currency average rate	0.03116	0.03652

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Derivative Instrument (Notional Table) (Details) - USD ($) $ in Thousands	6 Months Ended	12 Months Ended
	Jun. 30, 2017	Dec. 31, 2016
Designated as Hedging Instrument [Member] | Cash Flow Hedging [Member] | USD
Derivatives Fair Value [Line Items]
Derivative, Notional Amount	$ 0	$ 57,000
Designated as Hedging Instrument [Member] | Cash Flow Hedging [Member] | CAD
Derivatives Fair Value [Line Items]
Derivative, Notional Amount	54,000	54,000
Designated as Hedging Instrument [Member] | Cash Flow Hedging [Member] | GBP
Derivatives Fair Value [Line Items]
Derivative, Notional Amount	54,000	48,000
Designated as Hedging Instrument [Member] | Net Investment Hedging [Member] | CAD
Derivatives Fair Value [Line Items]
Derivative, Notional Amount	875,000	900,000
Notional Amount Of Nonderivative Instruments	250,000	250,000
Designated as Hedging Instrument [Member] | Net Investment Hedging [Member] | GBP
Derivatives Fair Value [Line Items]
Derivative, Notional Amount	550,000	550,000
Notional Amount Of Nonderivative Instruments	1,050,000	1,050,000
Not Designated as Hedging Instrument [Member] | CAD
Derivatives Fair Value [Line Items]
Derivative, Notional Amount	$ 37,000	$ 37,000

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Derivative Instruments (Details 1) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2017	Jun. 30, 2016	Jun. 30, 2017	Jun. 30, 2016
Interest Rate Swap [Member]
Derivative [Line Items]
Gain (loss) on interest rate swaps recalssified from AOCI into income (effective portion)	$ 0	$ (477)	$ 0	$ (960)
Gain (loss) on forward exchange contracts recognized in income.	1,732	2,697	4,189	1,369
Foreign Exchange Contract [Member]
Derivative [Line Items]
Gain (loss) recognized in OCI	$ (97,539)	$ 178,575	$ (141,880)	$ 175,836

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Derivative Instruments (Textual) (Details) - USD ($) $ in Thousands	6 Months Ended
	Jun. 30, 2017	Jun. 30, 2016
Derivative Instruments [Abstract]
Cash Flow Hedge Gain Loss To Be Reclassified Within Twelve Months	$ 2,671
Derivative Cash Received On Hedge	$ 19,665	$ 56,842

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Commitments and Contingencies (Details Textual) $ in Thousands	6 Months Ended
	Jun. 30, 2017 USD ($) Number	Dec. 31, 2016 USD ($)
Commitments and Contingencies (Textual) [Abstract]
Number of outstanding letters of credit | Number	14
Letter of credit obligation	$ 170,131
Line Of Credit Facility [Line Items]
Outstanding construction financings for leased properties	321,655	$ 506,091
Additional financing to complete construction	354,853
Total contingent purchase obligations	$ 13,170
Minimum part of economic life of the leased asset to be classified as capital lease	75.00%
Minimum net present value of the future minimum lease payments to be classified as capital lease.	90.00%
Operating lease obligations relating to certain ground leases	$ 1,078,526
Operating Leases, Future Minimum Payments Due, Future Minimum Sublease Rentals	72,906
Capital Leases, Future Minimum Payments Due	$ 91,471
Letter Of Credit Expiration Date Maximum	Dec. 31, 2024
Letter Of Credit Expiration Date Minimum	Jan. 01, 2017

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Stockholder's Equity (Details) - shares	Jun. 30, 2017	Dec. 31, 2016	Jun. 30, 2016	Dec. 31, 2015
Preferred Stock:
Authorized shares	50,000,000	50,000,000
Issued shares	14,375,000	25,875,000
Outstanding shares	14,375,000	25,875,000	25,875,000	25,875,000
Common Stock, $1.00 par value:
Authorized shares	700,000,000	700,000,000
Issued shares	369,966,425	363,576,924
Outstanding shares	368,878,042	362,602,173

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Stockholder's Equity (Details 1)	6 Months Ended
	Jun. 30, 2017 USD ($) $ / shares shares	Jun. 30, 2016 USD ($) $ / shares shares
Summary of common stock issuances
Equity shelf plan issuances, Shares Issued | shares	2,986,574	443,096
Equity shelf plan issuances, average price | $ / shares	72.3	67.12
Equity Shelf Plan Issuances Gross Proceeds	$ 215,917,000	$ 30,192,000
Equity Shelf Plan Issuances Net Proceeds	$ 214,406,000	$ 29,739,000
Redemption of OP units | shares	91,180
Dividend reinvestment plan issuances, Shares Issued | shares	2,836,216	1,971,758
Dividend reinvestment plan issuances, Average Price	70.55	64.65
Dividend reinvestment plan issuances, Net Proceeds	$ 199,757,000	$ 127,470,000
Dividend reinvestment plan issuances, Gross Proceeds	$ 200,097,000	$ 127,470,000
Option exercises, Shares | shares	202,190	37,409
Option exercises, Average Price	50.88	48.73
Option exercises, Gross Proceeds	$ 10,288,000	$ 1,823,000
Option exercises, Net Proceeds	$ 10,288,000	$ 1,823,000
Stock incentive plans, net of forfeitures, Shares Issued | shares	159,709	460,047
Issuance of Common Stock, Shares | shares	6,275,869	2,912,310
Gross Proceeds From Issuance of Common Stock	$ 426,302,000	$ 159,485,000
Net proceeds from the issuance of common stock	$ 424,451,000	$ 159,032,000

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Stockholder's Equity (Details 2) - USD ($) $ in Thousands		Jun. 30, 2017	Dec. 31, 2016	Jun. 30, 2016	Dec. 31, 2015
Summary of accumulated other comprehensive income/(loss) [Line Items]
Unrecognized losses on cash flow hedges		$ (2)	$ (2)	$ (446)	$ (1,416)
Unrecognized losses on equity investments		(11,357)	5,120	(11,160)	0
Unrecognized gains (losses) on foreign currency translation		(151,112)	(173,496)	(146,691)	(85,484)
Unrecognized actuarial losses		(1,153)	(1,153)	(1,341)	(1,343)
Totals		(163,624)	$ (169,531)	(159,638)	$ (88,243)
Other comprehensive income before reclassification adjustments
Summary of accumulated other comprehensive income/(loss) [Line Items]
Unrecognized losses on cash flow hedges		0		10
Unrecognized losses on equity investments		(16,477)		(11,160)
Unrecognized gains (losses) on foreign currency translation		22,384		(61,207)
Unrecognized actuarial losses		0		2
Totals		5,907		(72,355)
Reclassification amount to net income
Summary of accumulated other comprehensive income/(loss) [Line Items]
Unrecognized losses on cash flow hedges	[1]			960
Unrecognized losses on equity investments				0
Unrecognized gains (losses) on foreign currency translation				0
Unrecognized actuarial losses				0
Totals				960
Net current period other comprehensive income
Summary of accumulated other comprehensive income/(loss) [Line Items]
Unrecognized losses on cash flow hedges		0		970
Unrecognized losses on equity investments		(16,477)		(11,160)
Unrecognized gains (losses) on foreign currency translation		22,384		(61,207)
Unrecognized actuarial losses		0		2
Totals		$ 5,907		$ (71,395)

[1] Please see Note 11 for additional information.

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Stockholder's Equity (Details 3) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended		12 Months Ended
	Jun. 30, 2017	Jun. 30, 2016	Jun. 30, 2017	Jun. 30, 2016	Dec. 31, 2016	Dec. 31, 2015
Stockholders' Equity (Details) [Abstract]
Preferred Stock, Shares Outstanding	14,375,000	25,875,000	14,375,000	25,875,000	25,875,000	25,875,000
Preferred stock, shares redeemed			(11,500,000)	0
Preferred stock balance weighted average rate			6.50%	6.50%	6.50%	6.50%
Preferred stock balance redeemed weighted average rate			6.50%	0.00%
Preferred stock redemption charge	$ 0	$ 0	$ 9,769	$ 0

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Stockholder's Equity (Details 5) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2017	Jun. 30, 2016	Jun. 30, 2017	Jun. 30, 2016
Summary of dividend payments
Dividends declared and paid per common share	$ 0.87	$ 0.86	$ 1.74	$ 1.72
Common stock cash dividends			$ 634,296	$ 613,163
Total dividends paid			$ 660,355	$ 645,866
Series I Preferred Stock [Member]
Summary of dividend payments
Dividends declared and paid per preferred share			$ 1.625	$ 1.625
Preferred stock cash dividends			$ 23,360	$ 23,359
Series J Preferred Stock [Member]
Summary of dividend payments
Dividends declared and paid per preferred share			$ 0.2347	$ 0.8126
Preferred stock cash dividends			$ 2,699	$ 9,344

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Stock Incentive Plans (Details Textual) - USD ($) shares in Thousands, $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2017	Jun. 30, 2016	Jun. 30, 2017	Jun. 30, 2016
Stock Incentive Plans [Line Items]
Number of common stock authorized for 2016 Long-Term Incentive Plan	10,000		10,000
Stock-based compensation expense	$ 4,763	$ 7,031	$ 9,669	$ 15,217
Maximum [Member]
Stock Incentive Plans [Line Items]
Vesting period			5 years
Minimum [Member]
Stock Incentive Plans [Line Items]
Vesting period			3 years
Stock Incentive Plan [Member]
Stock Incentive Plans [Line Items]
Option expiration period			10 years

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Earnings Per Share (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2017	Jun. 30, 2016	Jun. 30, 2017	Jun. 30, 2016
Computation of basic and diluted earnings per share
Numerator for basic and diluted earnings per share - net income (loss) attributable to common stockholders	$ 188,429	$ 195,474	$ 501,068	$ 344,444
Denominator for basic earnings per share - weighted average shares	366,524	356,646	364,551	355,879
Effect of dilutive securities:
Employee stock options	50	129	60	115
Non-vested restricted shares	479	465	438	359
Redeemable shares	1,096	1,651	1,374	1,136
Dilutive potential common shares	1,625	2,245	1,872	1,610
Denominator for diluted earnings per share - adjusted weighted average shares	368,149	358,891	366,423	357,489
Basic earnings per share	$ 0.51	$ 0.55	$ 1.37	$ 0.97
Diluted earnings per share	$ 0.51	$ 0.54	$ 1.37	$ 0.96

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Disclosure about Fair Value of Financial Instruments (Details) - USD ($) $ in Thousands	Jun. 30, 2017		Dec. 31, 2016	Jun. 30, 2016		Dec. 31, 2015
Financial Assets:
Loans receivable, Carrying Amount	$ 520,479		$ 622,628
Loans receivable, Fair value	405,671		521,773
Available-for-sale equity investments, Carrying Amount	11,422		27,899
Available-for-sale equity investments, Fair Value	11,422	[1]	27,899
Cash and cash equivalents, Carrying Amount	442,284		419,378	$ 466,585		$ 360,908
Cash and cash equivalents, Fair Value	442,284		419,378
Foreign Currency Forward Contracts Carrying Value	54,326		135,561
Foreign Currency Forward Contracts Fair Value	54,326		135,561
Financial Liabilities:
Borrowings under primary unsecured credit facilities, Carrying Value	385,000	[2]	645,000	$ 745,000	[2]
Borrowings under primary unsecured credit facilities, Fair Value	385,000		645,000
Senior unsecured notes, Carrying Amount	8,250,940		8,161,619
Senior unsecured notes, Fair Value	9,088,276		8,879,176
Secured debt, Carrying Amount	2,670,914		3,477,699
Secured debt, Fair Value	2,718,333		3,558,378
Foreign Currency Forward Contracts Carrying Value	10,426		4,342
Foreign Currency Forward Contracts, Fair Value	10,426		4,342
Redeemable OP unitholder interests carrying value	111,149		110,502
Redeemable OP unitholder interests fair value	111,149		110,502
Mortgage Loans on Real Estate [Member]
Financial Assets:
Loans receivable, Carrying Amount	369,141		485,735
Loans receivable, Fair value	405,671		521,773
Other Real Estate Loans Receivable [Member]
Financial Assets:
Loans receivable, Carrying Amount	151,338		136,893
Loans receivable, Fair value	$ 156,266		$ 138,050

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

[2] As of June 30, 2017, letters of credit in the aggregate amount of $32,456,000 have been issued, which reduces the borrowing capacity on the unsecured revolving credit facility.

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Disclosure about Fair Value of Financial Instruments (Details 1) - USD ($) $ in Thousands		Jun. 30, 2017		Dec. 31, 2016
The Market approach utilized to measure fair value of financial assets and liabilities on recurring basis
Available-for-sale equity investments		$ 11,422	[1]	$ 27,899
Foreign currency forward contracts	[2]	43,900
Redeemable OP unitholder interests		111,149
Totals		166,471
Level 1 [Member]
The Market approach utilized to measure fair value of financial assets and liabilities on recurring basis
Available-for-sale equity investments	[1]	11,422
Totals		11,422
Level 2 [Member]
The Market approach utilized to measure fair value of financial assets and liabilities on recurring basis
Foreign currency forward contracts	[2]	43,900
Redeemable OP unitholder interests		111,149
Totals		$ 155,049

[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.

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Segment Reporting (Details) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2017 USD ($)	Jun. 30, 2016 USD ($)	Jun. 30, 2017 USD ($)	Jun. 30, 2016 USD ($)	Dec. 31, 2016 USD ($)
Summary of information for reportable segments
Rental income	$ 355,599	$ 422,628	$ 722,741	$ 838,290
Resident fees and services	677,040	615,220	1,347,377	1,217,369
Interest income	20,901	24,007	41,649	49,195
Other income	5,062	14,802	9,133	18,851
Total revenues	1,058,602	1,076,657	2,120,900	2,123,705
Property operating expenses	501,855	458,832	1,012,024	908,468
Net Operating Income from Continuing Operations	556,747	617,825	1,108,876	1,215,237
Interest expense	116,231	132,326	234,827	265,285
Loss (gain) on derivatives, net	736	0	1,960	0
Depreciation and amortization	224,847	226,569	453,124	455,265
General and administrative	32,632	39,914	63,733	85,606
Transaction costs	0	5,157	0	13,365
Loss (gain) on extinguishment of debt, net	5,515	33	36,870	9
Impairment of Asset	13,631	0	24,662	14,314
Other expenses	6,339	3,161	18,014	3,161
Income (loss) from continuing operations before income taxes and income from unconsolidated entities	156,816	210,665	275,686	378,232
Income tax expense	8,448	513	6,203	2,239
(Loss) income from unconsolidated entities	(3,978)	(1,959)	(27,084)	(5,778)
Income (loss) from continuing operations	161,286	209,219	254,805	374,693
Gain (loss) on real estate dispositions, net	42,155	1,530	286,247	1,530
Net income	203,441	$ 210,749	541,052	$ 376,223
Total assets	$ 27,975,786		$ 27,975,786		$ 28,865,184
Percent Of Assets	1		1		1
Percent Of Revenues	1	1	1	1
United States
Summary of information for reportable segments
Total revenues	$ 851,943	$ 862,115	$ 1,710,611	$ 1,704,470
Total assets	$ 22,323,973		$ 22,323,973		$ 23,572,459
Percent Of Assets	0.798		0.798		0.817
Percent Of Revenues	0.805	0.801	0.807	0.803
United Kingdom
Summary of information for reportable segments
Total revenues	$ 99,747	$ 102,593	$ 193,590	$ 203,148
Total assets	$ 3,064,196		$ 3,064,196		$ 2,782,489
Percent Of Assets	0.11		0.11		0.096
Percent Of Revenues	0.094	0.095	0.091	0.095
Canada
Summary of information for reportable segments
Total revenues	$ 106,912	$ 111,949	$ 216,699	$ 216,087
Total assets	$ 2,587,617		$ 2,587,617		$ 2,510,236
Percent Of Assets	0.092		0.092		0.087
Percent Of Revenues	0.101	0.104	0.102	0.102
Triple Net [Member]
Summary of information for reportable segments
Rental income	$ 217,889	$ 287,134	$ 445,180	$ 570,958
Resident fees and services	0	0	0	0
Interest income	20,901	21,971	41,580	44,824
Other income	2,557	1,206	4,321	2,695
Total revenues	241,347	310,311	491,081	618,477
Property operating expenses	0	0	0	0
Net Operating Income from Continuing Operations	241,347	310,311	491,081	618,477
Interest expense	2,515	5,754	8,025	12,117
Loss (gain) on derivatives, net	736		1,960	0
Depreciation and amortization	60,171	75,809	119,781	155,609
General and administrative	0	0	0	0
Transaction costs		1,291		4,143
Loss (gain) on extinguishment of debt, net	0	121	29,083	97
Impairment of Asset	4,846	0	4,846	14,314
Other expenses	2,181		7,190	0
Income (loss) from continuing operations before income taxes and income from unconsolidated entities	170,898	227,336	320,196	432,197
Income tax expense	(1,471)	(213)	(2,271)	(528)
(Loss) income from unconsolidated entities	3,867	3,018	9,505	6,100
Income (loss) from continuing operations	173,294	230,141	327,430	437,769
Gain (loss) on real estate dispositions, net	42,155	1,530	273,236	1,530
Net income	215,449	231,671	600,666	439,299
Total assets	9,990,063		9,990,063
Senior housing - operating [Member]
Summary of information for reportable segments
Rental income	0	0	0	0
Resident fees and services	677,040	615,220	1,347,377	1,217,369
Interest income	0	1,042	69	2,073
Other income	1,049	8,989	2,510	11,178
Total revenues	678,089	625,251	1,349,956	1,230,620
Property operating expenses	459,111	417,996	921,536	826,890
Net Operating Income from Continuing Operations	218,978	207,255	428,420	403,730
Interest expense	15,403	20,274	31,219	40,797
Loss (gain) on derivatives, net	0		0	0
Depreciation and amortization	117,198	102,312	236,935	204,144
General and administrative	0	0	0	0
Transaction costs		3,247		7,180
Loss (gain) on extinguishment of debt, net	2,524	(88)	3,414	(88)
Impairment of Asset	8,785	0	14,191	0
Other expenses	1,165		2,943	0
Income (loss) from continuing operations before income taxes and income from unconsolidated entities	73,903	81,510	139,718	151,697
Income tax expense	10,247	2,023	9,160	4,789
(Loss) income from unconsolidated entities	(8,449)	(4,887)	(37,640)	(11,822)
Income (loss) from continuing operations	75,701	78,646	111,238	144,664
Gain (loss) on real estate dispositions, net	0	0	13,011	0
Net income	75,701	78,646	124,249	144,664
Total assets	12,753,128		12,753,128
Outpatient Medical [Member]
Summary of information for reportable segments
Rental income	137,710	135,494	277,561	267,332
Resident fees and services	0	0	0	0
Interest income	0	994	0	2,298
Other income	1,217	4,153	1,830	4,466
Total revenues	138,927	140,641	279,391	274,096
Property operating expenses	42,744	40,836	90,488	81,578
Net Operating Income from Continuing Operations	96,183	99,805	188,903	192,518
Interest expense	2,122	5,402	4,413	11,146
Loss (gain) on derivatives, net	0		0	0
Depreciation and amortization	47,478	48,448	96,408	95,512
General and administrative	0	0	0	0
Transaction costs		619		2,042
Loss (gain) on extinguishment of debt, net	2,991	0	4,373	0
Impairment of Asset	0	0	5,625	0
Other expenses	1,310		1,671	0
Income (loss) from continuing operations before income taxes and income from unconsolidated entities	42,282	45,336	76,413	83,818
Income tax expense	(351)	(248)	(686)	(476)
(Loss) income from unconsolidated entities	604	(90)	1,051	(56)
Income (loss) from continuing operations	42,535	44,998	76,778	83,286
Gain (loss) on real estate dispositions, net	0	0	0	0
Net income	42,535	44,998	76,778	83,286
Total assets	5,008,067		5,008,067
Corporate, Non-Segment [Member]
Summary of information for reportable segments
Rental income	0	0	0	0
Resident fees and services	0	0	0	0
Interest income	0	0	0	0
Other income	239	454	472	512
Total revenues	239	454	472	512
Property operating expenses	0	0	0	0
Net Operating Income from Continuing Operations	239	454	472	512
Interest expense	96,191	100,896	191,170	201,225
Loss (gain) on derivatives, net	0		0	0
Depreciation and amortization	0	0	0	0
General and administrative	32,632	39,914	63,733	85,606
Transaction costs		0		0
Loss (gain) on extinguishment of debt, net	0	0	0	0
Impairment of Asset	0	0	0	0
Other expenses	1,683	3,161	6,210	3,161
Income (loss) from continuing operations before income taxes and income from unconsolidated entities	(130,267)	(143,517)	(260,641)	(289,480)
Income tax expense	23	(1,049)	0	(1,546)
(Loss) income from unconsolidated entities	0	0	0	0
Income (loss) from continuing operations	(130,244)	(144,566)	(260,641)	(291,026)
Gain (loss) on real estate dispositions, net	0	0	0	0
Net income	(130,244)	$ (144,566)	(260,641)	$ (291,026)
Total assets	$ 224,528		$ 224,528

XML

Income Taxes and Distributions (Details)	6 Months Ended
	Jun. 30, 2017
Additional Income Taxes and Distributions (Textuals) [Abstract]
Percentage of Taxable income to be distributed to stockholders for federal tax purposes	90.00%
Percentage of capital gains excluded from taxable income distributed to shareholders	100.00%
Percentage of federal excise tax on real estate investment trusts that do not distribute income.	4.00%

XML

Variable Interest Entity Disclosure (Details) - Variable Interest Entity, Primary Beneficiary [Member] - USD ($) $ in Thousands		Jun. 30, 2017	Dec. 31, 2016
Variable Interest Entity [Line Items]
Total assets	[1]	$ 1,045,618	$ 1,012,199
Total equity		375,751	362,585
Total liabilities and equity		1,045,618	1,012,199
Net real property owned [Member]
Variable Interest Entity [Line Items]
Total assets		1,019,154	989,596
Cash and cash equivalents [Member]
Variable Interest Entity [Line Items]
Total assets		10,180	10,501
Receivables and other assets [Member]
Variable Interest Entity [Line Items]
Total assets		16,284	12,102
Secured Debt [Member]
Variable Interest Entity [Line Items]
Liabilities		473,781	450,255
Accrued expenses and other liabilities [Member]
Variable Interest Entity [Line Items]
Liabilities		15,396	13,803
Redeemable noncontrolling interests [Member]
Variable Interest Entity [Line Items]
Liabilities		$ 180,690	$ 185,556

[1] Note that assets of the consolidated variable interest entities can only be used to settle obligations relating to such variable interest entities. Liabilities of the consolidated variable interest entities represent claims against the specific assets of the variable interest entities.