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 September 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 October 31, 2017, the registrant had 370,356,835 shares of common stock outstanding.

TABLE OF CONTENTS

	Page
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements (Unaudited)
Consolidated Balance Sheets — September 30, 2017 and December 31, 2016	3
Consolidated Statements of Comprehensive Income — Three and nine months ended September 30, 2017 and 2016	4
Consolidated Statements of Equity — Nine months ended September 30, 2017 and 2016	6
Consolidated Statements of Cash Flows — Nine months ended September 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)

				September 30, 2017		December 31, 2016
				(Unaudited)		(Note)
Assets:
Real estate investments:
	Real property owned:
		Land and land improvements		$	2,806,586	$	2,591,071
		Buildings and improvements			26,010,364		24,496,153
		Acquired lease intangibles			1,492,279		1,402,884
		Real property held for sale, net of accumulated depreciation			70,995		1,044,859
		Construction in progress			344,742		506,091
			Gross real property owned		30,724,966		30,041,058
		Less accumulated depreciation and amortization			(4,826,418)		(4,093,494)
			Net real property owned		25,898,548		25,947,564
	Real estate loans receivable				496,850		622,628
		Less allowance for losses on loans receivable			(5,406)		(6,563)
			Net real estate loans receivable		491,444		616,065
	Net real estate investments				26,389,992		26,563,629
Other assets:
		Investments in unconsolidated entities			407,507		457,138
		Goodwill			68,321		68,321
		Cash and cash equivalents			236,247		419,378
		Restricted cash			59,064		187,842
		Straight-line rent receivable			393,142		342,578
		Receivables and other assets			626,106		826,298
			Total other assets		1,790,387		2,301,555
Total assets				$	28,180,379	$	28,865,184
Liabilities and equity
Liabilities:
		Borrowings under primary unsecured credit facility		$	420,000	$	645,000
		Senior unsecured notes			8,315,395		8,161,619
		Secured debt			2,713,513		3,477,699
		Capital lease obligations			72,684		73,927
		Accrued expenses and other liabilities			1,027,375		827,034
Total liabilities					12,548,967		13,185,279
Redeemable noncontrolling interests					386,748		398,433
Equity:
		Preferred stock			718,503		1,006,250
		Common stock			371,012		363,071
		Capital in excess of par value			17,564,805		16,999,691
		Treasury stock			(62,363)		(54,741)
		Cumulative net income			5,416,427		4,803,575
		Cumulative dividends			(9,138,346)		(8,144,981)
		Accumulated other comprehensive income (loss)			(141,240)		(169,531)
		Other equity			1,127		3,059
			Total Welltower Inc. stockholders’ equity		14,729,925		14,806,393
		Noncontrolling interests			514,739		475,079
Total equity					15,244,664		15,281,472
Total liabilities and equity				$	28,180,379	$	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				Nine Months Ended
			September 30,				September 30,
			2017		2016		2017		2016
Revenues:
	Rental income		$	362,880	$	421,152	$	1,085,621	$	1,259,442
	Resident fees and services			702,380		630,017		2,049,757		1,847,386
	Interest income			20,187		25,080		61,836		74,275
	Other income			6,036		2,884		15,169		21,735
		Total revenues		1,091,483		1,079,133		3,212,383		3,202,838
Expenses:
	Interest expense			122,578		129,699		357,405		394,985
	Property operating expenses			523,997		473,680		1,536,021		1,382,148
	Depreciation and amortization			230,138		218,061		683,262		673,326
	General and administrative			29,913		36,828		93,643		122,434
	Transaction costs			-		19,842		-		33,207
	Loss (gain) on derivatives, net			324		(2,516)		2,284		(2,516)
	Loss (gain) on extinguishment of debt, net			-		-		36,870		9
	Impairment of assets			-		9,705		24,662		24,019
	Other expenses			99,595		-		117,608		3,161
		Total expenses		1,006,545		885,299		2,851,755		2,630,773
Income (loss) from continuing operations before income taxes
	and income from unconsolidated entities			84,938		193,834		360,628		572,065
Income tax (expense) benefit				(669)		305		5,535		2,543
Income (loss) from unconsolidated entities				3,408		(1,749)		(23,676)		(7,528)
Income (loss) from continuing operations				87,677		192,390		342,487		567,080
Gain (loss) on real estate dispositions, net				1,622		162,351		287,869		163,881
Net income				89,299		354,741		630,356		730,961
Less:		Preferred stock dividends		11,676		16,352		37,734		49,055
Less:		Preferred stock redemption charge		-		-		9,769		-
Less:		Net income (loss) attributable to noncontrolling interests(1)		3,580		3,479		7,735		2,553
Net income (loss) attributable to common stockholders			$	74,043	$	334,910	$	575,118	$	679,353
Average number of common shares outstanding:
	Basic			369,089		358,932		366,096		356,911
	Diluted			370,740		361,237		367,894		358,752
Earnings per share:
	Basic:
	Income (loss) from continuing operations attributable to common stockholders, including real estate dispositions		$	0.20	$	0.93	$	1.57	$	1.90
	Net income (loss) attributable to common stockholders*		$	0.20	$	0.93	$	1.57	$	1.90
	Diluted:
	Income (loss) from continuing operations attributable to common stockholders, including real estate dispositions		$	0.20	$	0.93	$	1.56	$	1.89
	Net income (loss) attributable to common stockholders*		$	0.20	$	0.93	$	1.56	$	1.89
Dividends declared and paid per common share			$	0.87	$	0.86	$	2.61	$	2.58

* 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 September 30,				Nine Months Ended September 30,
		2017		2016		2017		2016
Net income		$	89,299	$	354,741	$	630,356	$	730,961
Other comprehensive income (loss):
	Unrecognized gain (loss) on equity investments		(3,808)		5,908		(20,285)		(5,252)
	Change in net unrealized gains (losses) on cash flow hedges:
	Unrealized gains (losses) on cash flow hedges		2		401		2		1,371
	Unrecognized actuarial gain (loss)		-		(2)		-		-
	Foreign currency translation gain (loss)		37,343		516		70,769		(48,496)
Total other comprehensive income (loss)			33,537		6,823		50,486		(52,377)
Total comprehensive income (loss)			122,836		361,564		680,842		678,584
Less: Total comprehensive income (loss) attributable to noncontrolling interests(1)			14,732		1,846		29,930		13,117
Total comprehensive income (loss) attributable to common stockholders		$	108,104	$	359,718	$	650,912	$	665,467
(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)

		Nine Months Ended September 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)										622,621								9,907		632,528
	Other comprehensive income														28,291				22,195		50,486
Total comprehensive income																					683,014
Net change in noncontrolling interests							9,784												7,558		17,342
Amounts related to stock incentive plans, net of forfeitures					337		17,151		(7,611)								(1,942)				7,935
Proceeds from issuance of common stock					7,513		522,954														530,467
Redemption of preferred stock			(287,500)				9,760				(9,769)										(287,509)
Redemption of equity membership units					91		5,465		(11)												5,545
Conversion of preferred stock			(247)																		(247)
Option compensation expense																	10				10
Dividends paid:
	Common stock dividends												(955,631)								(955,631)
	Preferred stock dividends												(37,734)								(37,734)
Balances at end of period		$	718,503	$	371,012	$	17,564,805	$	(62,363)	$	5,416,427	$	(9,138,346)	$	(141,240)	$	1,127	$	514,739	$	15,244,664
		Nine Months Ended September 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)										728,408								7,363		735,771
	Other comprehensive income														(62,941)				10,564		(52,377)
Total comprehensive income																					683,394
Net change in noncontrolling interests							(45,765)												(128,859)		(174,624)
Amounts related to stock incentive plans, net of forfeitures					689		38,888		(7,822)								(1,285)				30,470
Proceeds from issuance of common stock					7,203		512,139														519,342
Option compensation expense																	207				207
Dividends paid:
	Common stock dividends												(921,381)								(921,381)
	Preferred stock dividends												(49,055)								(49,055)
Balances at end of period		$	1,006,250		362,703		16,983,562		(52,194)		4,454,180		(7,816,492)		(151,184)		3,020		474,393	$	15,264,238

See notes to unaudited consolidated financial statements

6

CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)

WELLTOWER INC. AND SUBSIDIARIES

(In thousands)

			Nine Months Ended
			September 30,
			2017		2016
Operating activities:
Net income			$	630,356	$	730,961
Adjustments to reconcile net income to
	net cash provided from (used in) operating activities:
		Depreciation and amortization		683,262		673,326
		Other amortization expenses		12,095		5,419
		Impairment of assets		24,662		24,019
		Stock-based compensation expense		16,459		20,618
		Loss (gain) on derivatives, net		2,284		(2,516)
		Loss (gain) on extinguishment of debt, net		36,870		9
		Loss (income) from unconsolidated entities		23,676		7,528
		Rental income in excess of cash received		(64,865)		(60,212)
		Amortization related to above (below) market leases, net		180		362
		Loss (gain) on sales of properties, net		(287,869)		(163,881)
		Distributions by unconsolidated entities		116		473
		Increase (decrease) in accrued expenses and other liabilities		171,713		79,619
		Decrease (increase) in receivables and other assets		(86,475)		(35,557)
Net cash provided from (used in) operating activities				1,162,464		1,280,168
Investing activities:
	Cash disbursed for acquisitions			(575,694)		(1,448,126)
	Cash disbursed for capital improvements to existing properties			(159,142)		(141,200)
	Cash disbursed for construction in progress			(198,068)		(325,372)
	Capitalized interest			(10,033)		(12,109)
	Investment in real estate loans receivable			(70,051)		(105,496)
	Other investments, net of payments			50,877		(88,398)
	Principal collected on real estate loans receivable			82,263		225,092
	Contributions to unconsolidated entities			(73,802)		(41,747)
	Distributions by unconsolidated entities			58,754		72,564
	Proceeds from (payments on) derivatives			55,771		56,842
	Decrease (increase) in restricted cash			130,470		(21,218)
	Proceeds from sales of real property			1,237,851		538,032
Net cash provided from (used in) investing activities				529,196		(1,291,136)
Financing activities:
	Net increase (decrease) under unsecured credit facilities			(225,000)		515,000
	Proceeds from issuance of senior unsecured notes			7,500		693,560
	Payments to extinguish senior unsecured notes			(5,000)		(400,000)
	Net proceeds from the issuance of secured debt			190,459		193,541
	Payments on secured debt			(1,050,879)		(471,898)
	Net proceeds from the issuance of common stock			530,992		520,067
	Redemption of preferred stock			(287,500)		-
	Payments for deferred financing costs and prepayment penalties			(54,027)		(18,831)
	Contributions by noncontrolling interests(1)			47,209		142,381
	Distributions to noncontrolling interests(1)			(51,824)		(106,076)
	Cash distributions to stockholders			(992,621)		(970,436)
	Other financing activities			(8,416)		(8,941)
Net cash provided from (used in) financing activities				(1,899,107)		88,367
Effect of foreign currency translation on cash and cash equivalents				24,316		(9,690)
Increase (decrease) in cash and cash equivalents				(183,131)		67,709
Cash and cash equivalents at beginning of period				419,378		360,908
Cash and cash equivalents at end of period			$	236,247	$	428,617
Supplemental cash flow information:
	Interest paid		$	312,896	$	360,421
	Income taxes paid			5,606		7,070
(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 REIT 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 (such as normal recurring accruals) considered necessary for a fair presentation have been included. Operating results for the nine months ended September 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 Accounting Standards Update (“ASU”) No. 2014-09, “Revenue from Contracts with Customers (Topic 606),” which 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 ASU 2014-09. We anticipate that we will be required to separately disclose the components of total revenue between lease revenue accounted for under existing leasing guidance and service revenue accounted for under ASU 2014-09, including non-lease components such as certain services embedded in base leasing fees.  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,” which

8

WELLTOWER INC.

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

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.  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, and we 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 aspect of the 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 $7,822,000 for the nine months ended September 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,” which 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,” which 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 nine months ended September 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.

     In August 2017, the FASB issued ASU 2017-12, “Derivatives and Hedging: Targeted Improvements to Accounting for Hedging Activities,” which expands and refines hedge accounting for both nonfinancial and financial risk components and aligns the recognition and presentation of the effects of the hedging instrument and the hedged item in the financial statements. It also includes certain targeted improvements to simplify the application of current guidance related to hedge accounting. The standard is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2018, with early adoption permitted. We are currently in the process of evaluating the effects this standard will have on our consolidated financial statements.

3. Real Property Acquisitions and Development

     The total purchase price for all properties acquired has been allocated to the tangible and identifiable intangible assets, liabilities and noncontrolling interests based upon their 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

		Nine Months Ended
(In thousands)		September 30, 2017			September 30, 2016
Land and land improvements			$	31,948		$	21,713
Buildings and improvements				206,910			220,274
Acquired lease intangibles				-			2,876
	Total assets acquired			238,858			244,863
Accrued expenses and other liabilities				(21,236)			(2,145)
	Total liabilities assumed			(21,236)			(2,145)
Noncontrolling interests				(7,275)			(3,162)
Non-cash acquisition related activity(1)				(54,901)			(51,733)
	Cash disbursed for acquisitions			155,446			187,823
Construction in progress additions				106,186			133,611
Less:	Capitalized interest			(3,886)			(6,263)
	Foreign currency translation			(656)			(3,179)
Cash disbursed for construction in progress				101,644			124,169
Capital improvements to existing properties				17,873			21,447
	Total cash invested in real property, net of cash acquired		$	274,963		$	333,439
(1) For the nine months ended September 30, 2017, $54,901,000 is related to the acquisition of assets previously financed as real estate loans receivable. For the nine months ended September 30, 2016, $45,044,000 is related to the acquisition of assets previously financed as real estate loans receivable and $6,689,000 is related to the acquisition of assets previously financed as an investment in an unconsolidated entity.

Seniors Housing Operating Activity

		Nine Months Ended
(In thousands)		September 30, 2017			September 30, 2016
Land and land improvements			$	31,006		$	122,649
Building and improvements				384,522			1,108,195
Acquired lease intangibles				48,197			90,771
Restricted cash				1,692			137
Receivables and other assets				3,164			2,179
	Total assets acquired(1)			468,581			1,323,931
Secured debt				-			(49,381)
Accrued expenses and other liabilities				(43,364)			(12,328)
	Total liabilities assumed			(43,364)			(61,709)
Noncontrolling interests				(4,701)			(1,089)
Non-cash acquisition related activity(2)				(59,065)			(17,477)
	Cash disbursed for acquisitions			361,451			1,243,656
Construction in progress additions				65,282			139,160
Less:	Capitalized interest			(5,996)			(3,923)
	Foreign currency translation			(6,218)			(5,953)
Cash disbursed for construction in progress				53,068			129,284
Capital improvements to existing properties				110,372			84,444
	Total cash invested in real property, net of cash acquired		$	524,891		$	1,457,384
(1) Excludes $4,581,000and $135,000 of cash acquired during the nine months ended September 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 nine months ended September 30, 2017.  Includes $51,097,000 and $17,477,000 for the nine months ended September 30, 2017 and 2016, respectively, 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

		Nine Months Ended
(In thousands)		September 30, 2017			September 30, 2016
Land and land improvements			$	25,060	$	1,466
Buildings and improvements				62,336		27,272
Acquired lease intangibles				8,397		4,592
Receivables and other assets				3		-
	Total assets acquired			95,796		33,330
Secured debt				(25,709)		-
Accrued expenses and other liabilities				(2,210)		(1,670)
	Total liabilities assumed			(27,919)		(1,670)
Noncontrolling interests				(9,080)		-
Non-cash acquisition activity(1)				-		(15,013)
	Cash disbursed for acquisitions			58,797		16,647
Construction in progress additions				33,495		81,843
Less:	Capitalized interest			(1,847)		(2,588)
	Accruals(2)			11,708		(7,336)
Cash disbursed for construction in progress				43,356		71,919
Capital improvements to existing properties				30,897		35,309
	Total cash invested in real property		$	133,050	$	123,875
(1) Represents the acquisition of assets previously financed as real estate loans receivable.
(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):

			Nine Months Ended
			September 30, 2017			September 30, 2016
	Development projects:
		Triple-net		$	283,472		$	24,535
		Seniors housing operating			3,634			-
		Outpatient medical			63,036			44,113
	Total development projects				350,142			68,648
	Expansion projects				10,336			2,879
Total construction in progress conversions				$	360,478		$	71,527

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

		September 30, 2017		December 31, 2016
Assets:
	In place lease intangibles	$	1,333,368	$	1,252,143
	Above market tenant leases		64,408		61,700
	Below market ground leases		62,224		61,628
	Lease commissions		32,279		27,413
	Gross historical cost		1,492,279		1,402,884
	Accumulated amortization		(1,098,814)		(966,714)
	Net book value	$	393,465	$	436,170
	Weighted-average amortization period in years		14.5		13.7
Liabilities:
	Below market tenant leases	$	90,671	$	89,468
	Above market ground leases		8,540		8,107
	Gross historical cost		99,211		97,575
	Accumulated amortization		(57,449)		(52,134)
	Net book value	$	41,762	$	45,441
	Weighted-average amortization period in years		15.5		15.2

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

	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2017		2016		2017		2016
Rental income related to above/below market tenant leases, net	$	173	$	278	$	745	$	569
Property operating expenses related to above/below market ground leases, net		(306)		(309)		(925)		(931)
Depreciation and amortization related to in place lease intangibles and lease commissions		(34,270)		(30,137)		(109,011)		(95,610)

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

		Assets		Liabilities
2017	$	39,678	$	1,636
2018		104,524		6,190
2019		50,051		5,731
2020		30,582		5,234
2021		20,918		4,746
Thereafter		147,712		18,225
Total	$	393,465	$	41,762

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, relationship or geography). During the nine months ended September 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 if applicable. 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

		Nine Months Ended
		September 30, 2017			September 30, 2016
Real estate dispositions:
	Triple-net		$	899,104		$	295,365
	Seniors housing operating			16,206			-
	Outpatient medical			12,202			78,786
	Total dispositions			927,512			374,151
Gain (loss) on real estate dispositions, net				287,869			163,881
	Net other assets/liabilities disposed			22,470			-
Proceeds from real estate dispositions			$	1,237,851		$	538,032

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				Nine Months Ended
			September 30,				September 30,
		2017		2016		2017		2016
Revenues:
	Rental income	$	1,955	$	31,966	$	23,255	$	99,057
Expenses:
	Interest expense		-		4,939		1,714		16,697
	Property operating expenses		2,111		1,476		7,209		4,411
	Provision for depreciation		26		4,604		1,167		20,873
	Total expenses		2,137		11,019		10,090		41,981
Income (loss) from real estate dispositions, net		$	(182)	$	20,947	$	13,165	$	57,076

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):

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NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

		Nine Months Ended
		September 30, 2017						September 30, 2016
				Outpatient						Outpatient
		Triple-net		Medical		Totals		Triple-net		Medical		Totals
Advances on real estate loans receivable:
	Investments in new loans	$	11,315	$	-	$	11,315	$	8,223	$	-	$	8,223
	Draws on existing loans		58,736		-		58,736		94,622		2,651		97,273
	Net cash advances on real estate loans		70,051		-		70,051		102,845		2,651		105,496
Receipts on real estate loans receivable:
	Loan payoffs		142,392		60,500		202,892		251,293		27,303		278,596
	Principal payments on loans		1,121		-		1,121		6,553		-		6,553
	Sub-total		143,513		60,500		204,013		257,846		27,303		285,149
	Less: Non-cash activity(1)(2)		(61,250)		(60,500)		(121,750)		(45,044)		(15,013)		(60,057)
	Net cash receipts on real estate loans		82,263		-		82,263		212,802		12,290		225,092
Net cash advances (receipts) on real estate loans			(12,212)		-		(12,212)		(109,957)		(9,639)		(119,596)
Change in balance due to foreign currency translation			8,183		-		8,183		(9,819)		-		(9,819)
Net change in real estate loans receivable		$	(65,279)	$	(60,500)	$	(125,779)	$	(164,820)	$	(24,652)	$	(189,472)
(1) Triple-net and prior year outpatient medical represents acquisitions of assets previously financed as real estate loans.
(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 September 30, 2017, the allowance for loan losses related to these loans is $5,406,000.  At September 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 September 30, 2017.

		Nine Months Ended
	September 30, 2017		September 30, 2016
Balance of impaired loans at end of period	$	282,929	$	-
Allowance for loan losses		5,406		-
Balance of impaired loans not reserved	$	277,523	$	-
Average impaired loans for the period	$	324,255	$	-
Interest recognized on impaired loans		23,957		-

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 entities 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)	September 30, 2017		December 31, 2016
Triple-net	10% to 49%	$	22,543	$	27,005
Seniors housing operating	10% to 50%		332,390		407,172
Outpatient medical	43%		52,574		22,961
Total		$	407,507	$	457,138
(1) Excludes ownership of in-substance real estate.

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NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

     During the nine months ended September 30, 2017, we increased our ownership in the Sunrise Senior Living, Inc. management company from 24% to 34%. At September 30, 2017, the aggregate unamortized basis difference of our joint venture investments of $83,843,000 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 nine months ended September 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)
	Sunrise Senior Living(3)	157		235,814	14%
	Genesis Healthcare	86	$	149,345	9%
	Revera(3)	98		117,124	7%
	Brookdale Senior Living	137		113,466	7%
	Benchmark Senior Living	48		74,070	4%
	Remaining portfolio	752		986,543	59%
	Totals	1,278	$	1,676,362	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 September 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 September 30, 2017).  Borrowings under the unsecured revolving credit facility are subject to interest payable at the applicable margin over LIBOR interest rate (2.13% at September 30, 2017). The applicable margin is based on our debt ratings and was 0.90% at September 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 September 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 September 30,				Nine Months Ended September 30,
		2017		2016		2017		2016
Balance outstanding at quarter end(1)		$	420,000	$	1,350,000	$	420,000	$	1,350,000
Maximum amount outstanding at any month end		$	645,000	$	1,560,000	$	1,010,000	$	1,560,000
Average amount outstanding (total of daily
	principal balances divided by days in period)	$	450,130	$	1,050,217	$	601,436	$	782,427
Weighted average interest rate (actual interest
	expense divided by average borrowings outstanding)		2.19%		1.44%		1.95%		1.35%
(1) As of September 30, 2017, letters of credit in the aggregate amount of $25,576,000 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 September 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	$	-	$	121,412	$	121,412
2018		450,000		426,728		876,728
2019		600,000		491,941		1,091,941
2020(4)		697,327		184,281		881,608
2021(5,6)		1,149,856		221,721		1,371,577
Thereafter(7,8,9,10)		5,507,210		1,273,919		6,781,129
Totals	$	8,404,393	$	2,720,002	$	11,124,395
(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 1.9% to 6.5%.
(3) Annual interest rates range from 1.45% to 7.98%.  Carrying value of the properties securing the debt totaled $5,766,501,000 at September 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 $239,827,000 based on the Canadian/U.S. Dollar exchange rate on September 30, 2017).
(5) On May 13, 2016, we refinanced the funding on a $250,000,000 Canadian-denominated unsecured term credit facility (approximately $199,856,000 based on the Canadian/U.S. Dollar exchange rate on September 30, 2017).  The loan matures on May 13, 2021 and bears interest at the Canadian Dealer Offered Rate plus 95 basis points (2.30% at September 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 (2.19% at September 30, 2017).
(7) On November 20, 2013, we completed the sale of £550,000,000 (approximately $737,110,000 based on the Sterling/U.S. Dollar exchange rate in effect on September 30, 2017) of 4.8% senior unsecured notes due 2028.
(8) On November 25, 2014, we completed the sale of £500,000,000 (approximately $670,100,000 based on the Sterling/U.S. Dollar exchange rate in effect on September 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

	Nine Months Ended
	September 30, 2017			September 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		7,500	1.940%		705,000	4.228%
Debt extinguished		(5,000)	1.830%		(400,000)	3.625%
Foreign currency		141,855	4.241%		(159,816)	4.443%
Ending balance	$	8,404,393	4.293%	$	8,790,942	4.264%

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

	Nine Months Ended
		September 30, 2017		September 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		190,459	2.730%		193,541	3.053%
Debt assumed		23,094	6.670%		47,156	4.132%
Debt extinguished		(1,003,372)	5.321%		(416,009)	4.986%
Principal payments		(47,507)	4.339%		53,636	3.631%
Foreign currency		92,262	3.196%		(55,889)	4.478%
Ending balance	$	2,720,002	3.735%	$	3,300,642	4.272%

     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 September 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 $6,454,000 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 nine months ended September 30, 2017 and 2016, we settled certain net investment hedges generating cash proceeds of $55,771,000 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):

		September 30, 2017		December 31, 2016
Derivatives designated as net investment hedges:
Denominated in Canadian Dollars	$	575,000	$	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	$	680,000	$	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				Nine Months Ended
		September 30,				September 30,
	Location		2017		2016		2017		2016
Gain (loss) on forward exchange contracts recognized in income	Interest expense	$	(576)	$	3,420	$	3,613	$	4,789
(Gain) on release of cumulative translation adjustment related to ineffectiveness on net investment hedge	Loss (gain) on derivatives, net		-		(2,516)		-		(2,516)
Gain (loss) on foreign exchange contracts and term loans designated as net investment hedge recognized in OCI	OCI		(98,003)		53,421		(239,884)		229,256

12. Commitments and Contingencies

     At September 30, 2017, we had 14 outstanding letter of credit obligations totaling $162,629,000 and expiring between 2017 and 2024.  At September 30, 2017, we had outstanding construction in progress of $344,742,000 and were committed to providing additional funds of approximately $317,542,000 to complete construction.  At September 30, 2017, we had contingent purchase obligations totaling $16,053,000.  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. In September 2017, we entered into an agreement with the University of Toledo Foundation to transfer our corporate headquarters as a gift. The gift is conditional based on certain terms within the agreement, which expire on November 30, 2017. Once the conditional terms have been satisfied, we expect to record the expense related to the gift.

     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 September 30, 2017, we had operating lease obligations of $1,105,254,000 relating to certain ground leases and company office space and capital lease obligations of $90,288,000 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 September 30, 2017, aggregate future minimum rentals to be received under these noncancelable subleases totaled $71,964,000.

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WELLTOWER INC.

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:

	September 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	14,370,065	25,875,000
Common Stock, $1.00 par value:
Authorized shares	700,000,000	700,000,000
Issued shares	371,430,074	363,576,924
Outstanding shares	370,341,635	362,602,173

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

	Nine Months Ended
	September 30, 2017		September 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%
Shares converted	(4,935)	6.500%	-	0.000%
Ending balance	14,370,065	6.500%	25,875,000	0.000%

     During the nine months ended September 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 nine months ended September 30, 2017 and 2016 (dollars in thousands, except average price amounts):

	Shares Issued		Average Price		Gross Proceeds		Net Proceeds
2016 Dividend reinvestment plan issuances	3,946,821	$	70.51	$	278,578	$	278,297
2016 Option exercises	137,579		50.57		6,958		6,958
2016 Equity shelf program issuances	3,119,801		75.27		237,131		234,812
2016 Stock incentive plans, net of forfeitures	442,899				-		-
2016 Totals	7,647,100			$	522,667	$	520,067
2017 Dividend reinvestment plan issuances	4,312,447	$	71.14	$	306,785	$	305,996
2017 Option exercises	209,192		50.62		10,590		10,590
2017 Equity shelf program issuances	2,986,574		72.30		215,917		214,406
2017 Preferred stock conversions	4,296				-		-
2017 Redemption of equity membership units	91,180				-		-
2017 Stock incentive plans, net of forfeitures	135,773				-		-
2017 Totals	7,739,462			$	533,292	$	530,992

     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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NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

	Nine Months Ended
	September 30, 2017				September 30, 2016
	Per Share		Amount		Per Share		Amount
Common Stock	$	2.6100	$	955,631	$	2.5800	$	921,381
Series I Preferred Stock		2.4375		35,035		2.4375		35,039
Series J Preferred Stock		0.2347		2,699		1.2189		14,016
Totals			$	993,365			$	970,436

     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		48,574		(20,285)		-		2		28,291
Net current-period other comprehensive income		48,574		(20,285)		-		2		28,291
Balance at September 30, 2017	$	(124,922)	$	(15,165)	$	(1,153)	$	-	$	(141,240)
Balance at December 31, 2015	$	(85,484)	$	-	$	(1,343)	$	(1,416)	$	(88,243)
Other comprehensive income before reclassification adjustments		(59,060)		(5,252)		-		11		(64,301)
Reclassification amount to net income		-		-		-		1,360 (1)		1,360
Net current-period other comprehensive income		(59,060)		(5,252)		-		1,371		(62,941)
Balance at September 30, 2016	$	(144,544)	$	(5,252)	$	(1,343)	$	(45)	$	(151,184)
(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 $6,790,000 and $16,459,000 for the three and nine months ended September 30, 2017, respectively, and $5,401,000 and $20,618,000 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				Nine Months Ended
		September 30,				September 30,
		2017		2016		2017		2016
Numerator for basic and diluted earnings
	per share - net income (loss) attributable
	to common stockholders	$	74,043	$	334,910	$	575,118	$	679,353
Denominator for basic earnings per
	share - weighted average shares		369,089		358,932		366,096		356,911
Effect of dilutive securities:
	Employee stock options		40		128		53		119
	Non-vested restricted shares		515		526		464		414
	Redeemable shares		1,096		1,651		1,281		1,308
Dilutive potential common shares			1,651		2,305		1,798		1,841
Denominator for diluted earnings per
	share - adjusted weighted average shares		370,740		361,237		367,894		358,752
Basic earnings per share		$	0.20	$	0.93	$	1.57	$	1.90
Diluted earnings per share		$	0.20	$	0.93	$	1.56	$	1.89

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):

		September 30, 2017				December 31, 2016
		Carrying Amount		Fair Value		Carrying Amount		Fair Value
Financial assets:
	Mortgage loans receivable	$	377,283	$	413,221	$	485,735	$	521,773
	Other real estate loans receivable		119,567		124,408		136,893		138,050
	Available-for-sale equity investments		7,615		7,615		27,899		27,899
	Cash and cash equivalents		236,247		236,247		419,378		419,378
	Foreign currency forward contracts		13,682		13,682		135,561		135,561
Financial liabilities:
	Borrowings under unsecured credit facilities	$	420,000	$	420,000	$	645,000	$	645,000
	Senior unsecured notes		8,315,395		9,186,768		8,161,619		8,879,176
	Secured debt		2,713,513		2,750,467		3,477,699		3,558,378
	Foreign currency forward contracts		55,264		55,264		4,342		4,342
Redeemable OP unitholder interests		$	104,363	$	104,363	$	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 September 30, 2017
	Total		Level 1		Level 2		Level 3
Available-for-sale equity investments(1)	$	7,615	$	7,615	$	-	$	-
Foreign currency forward contracts, net(2)		(41,582)		-		(41,582)		-
Redeemable OP unitholder interests		104,363		-		104,363		-
Totals	$	70,396	$	7,615	$	62,781	$	-
(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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NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

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 and asset acquisitions 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 September 30, 2017:		Triple-net		Seniors Housing Operating		Outpatient Medical		Non-segment / Corporate		Total
Rental income	$	221,555	$	-	$	141,325	$	-	$	362,880
Resident fees and services		-		702,380		-		-		702,380
Interest income		20,187		-		-		-		20,187
Other income		3,174		1,497		667		698		6,036
Total revenues		244,916		703,877		141,992		698		1,091,483
Property operating expenses		-		478,777		45,220		-		523,997
Consolidated net operating income		244,916		225,100		96,772		698		567,486
Interest expense		3,622		16,369		2,929		99,658		122,578
Loss (gain) on derivatives, net		324		-		-		-		324
Depreciation and amortization		62,891		119,089		48,158		-		230,138
General and administrative		-		-		-		29,913		29,913
Other expenses		89,236 (1)		5,157		530		4,672		99,595
Income (loss) from continuing operations before income taxes and income from unconsolidated entities		88,843		84,485		45,155		(133,545)		84,938
Income tax (expense) benefit		(816)		(1,519)		(366)		2,032		(669)
Income (loss) from unconsolidated entities		5,478		(2,886)		816		-		3,408
Income (loss) from continuing operations		93,505		80,080		45,605		(131,513)		87,677
Gain (loss) on real estate dispositions, net		(185)		(197)		2,004		-		1,622
Net income (loss)	$	93,320	$	79,883	$	47,609	$	(131,513)	$	89,299
Total assets	$	9,463,910	$	13,538,090	$	4,992,534	$	185,845	$	28,180,379
(1) Represents non-capitalizable transaction costs primarily related to a joint venture transaction with an existing seniors housing operator including the conversion of properties from triple-net to seniors housing operating, an exchange of PropCo/OpCo interests, and termination/restructuring of pre-existing relationships.

Three Months Ended September 30, 2016:		Triple-net		Seniors Housing Operating		Outpatient Medical		Non-segment / Corporate		Total
Rental income	$	286,226	$	-	$	134,926	$	-	$	421,152
Resident fees and services		-		630,017		-		-		630,017
Interest income		23,017		1,054		1,009		-		25,080
Other income		1,621		716		358		189		2,884
Total revenues		310,864		631,787		136,293		189		1,079,133
Property operating expenses		-		432,292		41,388		-		473,680
Consolidated net operating income		310,864		199,495		94,905		189		605,453
Interest expense		4,714		20,360		3,986		100,639		129,699
Loss (gain) on derivatives, net		-		-		-		(2,516)		(2,516)
Depreciation and amortization		74,296		97,210		46,555		-		218,061
General and administrative		-		-		-		36,828		36,828
Transaction costs		1,613		18,083		146		-		19,842
Impairment of assets		5,070		-		4,635		-		9,705
Income (loss) from continuing operations before income taxes and income from unconsolidated entities		225,171		63,842		39,583		(134,762)		193,834
Income tax (expense) benefit		(896)		515		417		269		305
Income (loss) from unconsolidated entities		1,998		(3,891)		144		-		(1,749)
Income (loss) from continuing operations		226,273		60,466		40,144		(134,493)		192,390
Gain (loss) on real estate dispositions, net		163,579		-		(1,228)		-		162,351
Net income (loss)	$	389,852	$	60,466	$	38,916	$	(134,493)	$	354,741

Nine Months Ended September 30, 2017:		Triple-net		Seniors Housing Operating		Outpatient Medical		Non-segment / Corporate		Total
Rental income	$	666,735	$	-	$	418,886	$	-	$	1,085,621
Resident fees and services		-		2,049,757		-		-		2,049,757
Interest income		61,767		69		-		-		61,836
Other income		7,496		4,005		2,497		1,171		15,169
Total revenues		735,998		2,053,831		421,383		1,171		3,212,383
Property operating expenses		-		1,400,313		135,708		-		1,536,021
Consolidated net operating income		735,998		653,518		285,675		1,171		1,676,362
Interest expense		11,647		47,587		7,342		290,829		357,405
Loss (gain) on derivatives, net		2,284		-		-		-		2,284
Depreciation and amortization		182,672		356,023		144,567		-		683,262
General and administrative		-		-		-		93,643		93,643
Loss (gain) on extinguishment of debt, net		29,083		3,414		4,373		-		36,870
Impairment of assets		4,846		14,191		5,625		-		24,662
Other expenses		96,425		8,100		2,201		10,882		117,608
Income (loss) from continuing operations before income taxes and income from unconsolidated entities		409,041		224,203		121,567		(394,183)		360,628
Income tax (expense) benefit		(2,070)		9,133		(655)		(873)		5,535
Income (loss) from unconsolidated entities		14,983		(40,527)		1,868		-		(23,676)
Income (loss) from continuing operations		421,954		192,809		122,780		(395,056)		342,487
Gain (loss) on real estate dispositions, net		273,051		12,814		2,004		-		287,869
Net income (loss)	$	695,005	$	205,623	$	124,784	$	(395,056)	$	630,356

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NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

Nine Months Ended September 30, 2016:		Triple-net		Seniors Housing Operating		Outpatient Medical		Non-segment / Corporate		Total
Rental income	$	857,184	$	-	$	402,258	$	-	$	1,259,442
Resident fees and services		-		1,847,386		-		-		1,847,386
Interest income		67,842		3,126		3,307		-		74,275
Other income		4,317		11,889		4,824		705		21,735
Total revenues		929,343		1,862,401		410,389		705		3,202,838
Property operating expenses		-		1,259,182		122,966		-		1,382,148
Consolidated net operating income		929,343		603,219		287,423		705		1,820,690
Interest expense		16,832		61,157		15,132		301,864		394,985
Loss (gain) on derivatives, net		-		-		-		(2,516)		(2,516)
Depreciation and amortization		229,906		301,354		142,066		-		673,326
General and administrative		-		-		-		122,434		122,434
Transaction costs		5,760		25,259		2,188		-		33,207
Loss (gain) on extinguishment of debt, net		97		(88)		-		-		9
Impairment of assets		19,384		-		4,635		-		24,019
Other expenses		-		-		-		3,161		3,161
Income (loss) from continuing operations before income taxes and income from unconsolidated entities		657,364		215,537		123,402		(424,238)		572,065
Income tax expense		(1,425)		5,304		(59)		(1,277)		2,543
(Loss) income from unconsolidated entities		8,097		(15,713)		88		-		(7,528)
Income (loss) from continuing operations		664,036		205,128		123,431		(425,515)		567,080
Gain (loss) on real estate dispositions, net		165,109		-		(1,228)		-		163,881
Net income (loss)	$	829,145	$	205,128	$	122,203	$	(425,515)	$	730,961

     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):

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NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

		Three Months Ended						Nine Months Ended
		September 30, 2017			September 30, 2016			September 30, 2017			September 30, 2016
Revenues:		Amount	%		Amount	%		Amount	%		Amount	%
United States	$	871,431	79.9%	$	874,050	81.0%	$	2,582,042	80.4%	$	2,581,533	80.6%
United Kingdom		105,028	9.6%		95,068	8.8%		298,618	9.3%		295,203	9.2%
Canada		115,024	10.5%		110,015	10.2%		331,723	10.3%		326,102	10.2%
Total	$	1,091,483	100.0%	$	1,079,133	100.0%	$	3,212,383	100.0%	$	3,202,838	100.0%
		As of
		September 30, 2017			December 31, 2016
Assets:		Amount	%		Amount	%
United States	$	22,535,209	80.0%	$	23,572,459	81.7%
United Kingdom		3,202,180	11.3%		2,782,489	9.6%
Canada		2,442,990	8.7%		2,510,236	8.7%
Total	$	28,180,379	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 nine months ended September 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.

26

WELLTOWER INC.

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

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 VIEs 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 VIEs in the aggregate (in thousands):

		September 30, 2017		December 31, 2016
Assets
	Net real property owned	$	1,010,638	$	989,596
	Cash and cash equivalents		11,874		10,501
	Receivables and other assets		18,920		12,102
	Total assets(1)	$	1,041,432	$	1,012,199
Liabilities and equity
	Secured debt	$	472,445	$	450,255
	Accrued expenses and other liabilities		16,982		13,803
	Redeemable noncontrolling interests		176,591		185,556
	Total equity		375,414		362,585
	Total liabilities and equity	$	1,041,432	$	1,012,199
(1) Note that assets of the consolidated VIEs can only be used to settle obligations relating to such VIEs. Liabilities of the consolidated VIEs represent claims against the specific assets of the VIEs.

27

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 42
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 September 30, 2017 (dollars in thousands):

			Percentage of	Number of
Type of Property	NOI(1)		NOI	Properties
Triple-net	$	244,916	43.2%	570
Seniors housing operating		225,100	39.7%	442
Outpatient medical		96,772	17.1%	266
Totals	$	566,788	100.0%	1,278
(1) Represents consolidated NOI 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 NOI 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/property 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 nine months ended September 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 NOI 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 September 30, 2017, we had $236,247,000 of cash and cash equivalents, $59,064,000 of restricted cash and $2,554,424,000 of available borrowing capacity under our primary unsecured credit facility.

Key Transactions in 2017

Capital.   During the nine months ended September 30, 2017, we extinguished $1,003,372,000 of secured debt at a blended average interest rate of 5.3%.  In addition, we redeemed all 11,500,000 shares of our 6.5% Series J Cumulative Redeemable Preferred Stock.  During the nine months ended September 30, 2017, we raised $522,702,000 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 nine months ended September 30, 2017 (dollars in thousands):

	Properties		Investment Amount(1)	Capitalization Rates(2)		Book Amount(3)
Triple-net	7	$	127,653	6.5%	$	238,858
Seniors housing operating	7		320,400	6.5%		468,581
Outpatient medical	4		71,395	6.7%		95,796
Totals	18	$	519,448	6.5%	$	803,235
(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 nine months ended September 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	58	$	1,160,191	6.8%	$	899,104
Seniors housing operating	2		29,715	4.4%		16,206
Outpatient medical	1		15,940	9.1%		12,202
Totals	61	$	1,205,846	6.8%	$	927,512
(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 September 30, 2017 represents the 186^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,		September 30,
		2016		2016		2016		2016			2017		2017	2017
NICS		$	148,969	$	195,474	$	334,910	$	333,042	$	312,639	$	188,429	$	74,043
FFO			391,264		416,974		401,870		372,829		306,231		384,390		295,722
NOI			597,414		617,825		605,453		583,486		552,129		556,747		567,486
SSNOI			441,299		457,660		446,955		444,090		444,209		457,714		464,062
Per share data (fully diluted):
	NICS	$	0.42	$	0.54	$	0.93	$	0.91	$	0.86	$	0.51	$	0.20
	FFO		1.10		1.16		1.11		1.02		0.84		1.04		0.80

     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,	September 30,
		2016	2016	2016	2016	2017	2017	2017
Net debt to book capitalization ratio		45%	45%	45%	43%	42%	41%	42%
Net debt to undepreciated book
	capitalization ratio	40%	39%	39%	37%	36%	35%	36%
Net debt to market capitalization ratio		32%	30%	31%	31%	29%	27%	29%
Interest coverage ratio		3.85x	4.21x	5.24x	5.26x	5.67x	4.60x	3.63x
Fixed charge coverage ratio		3.06x	3.34x	4.17x	4.15x	4.53x	3.72x	2.97x

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,	September 30,
		2016	2016	2016	2016	2017	2017	2017
Property mix:(1)
	Triple-net	52%	50%	51%	48%	45%	44%	43%
	Seniors housing operating	32%	34%	33%	36%	38%	39%	40%
	Outpatient medical	16%	16%	16%	16%	17%	17%	17%
Relationship mix:(1)
	Sunrise Senior Living(2)	13%	14%	12%	13%	14%	14%	14%
	Genesis Healthcare	17%	16%	16%	13%	9%	9%	9%
	Revera(2)	6%	6%	6%	7%	7%	7%	7%
	Brookdale Senior Living	7%	7%	7%	7%	7%	7%	7%
	Benchmark Senior Living	4%	4%	4%	4%	4%	5%	5%
	Remaining relationships	53%	53%	55%	56%	59%	58%	58%
Geographic mix:(1)
	California	10%	10%	10%	12%	13%	14%	13%
	United Kingdom	8%	8%	7%	7%	9%	9%	9%
	Canada	7%	7%	7%	8%	8%	8%	8%
	New Jersey	8%	8%	8%	8%	7%	8%	8%
	Texas	6%	6%	7%	7%	7%	7%	7%
	Remaining geographic areas	61%	61%	61%	58%	56%	54%	55%
(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 September 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 (1)
			2017		2018		2019		2020		2021		2022		2023		2024		2025		2026		Thereafter
Triple-net:
	Properties		3		51		-		14		14		11		4		5		59		32		364
	Base rent(2)	$	4,530	$	38,233	$	-	$	17,740	$	25,239	$	9,107	$	4,175	$	10,597	$	74,402	$	65,545	$	632,492
	% of base rent		0.5%		4.3%		0.0%		2.0%		2.9%		1.0%		0.5%		1.2%		8.4%		7.4%		71.8%
	Units/beds		367		3,151		-		1,225		2,289		1,042		317		692		4,489		3,724		36,207
	% of Units/beds		0.7%		5.9%		0.0%		2.3%		4.3%		1.9%		0.6%		1.3%		8.4%		7.0%		67.6%
Outpatient medical:
	Square feet		519,045		802,423		1,198,264		1,272,329		1,488,146		2,504,590		1,261,361		1,422,735		717,500		1,130,877		4,390,075
	Base rent(2)	$	13,437	$	21,836	$	32,704	$	34,331	$	40,184	$	54,993	$	31,857	$	39,582	$	20,640	$	28,656	$	102,135
	% of base rent		3.2%		5.2%		7.8%		8.2%		9.6%		13.1%		7.6%		9.4%		4.9%		6.8%		24.2%
	Leases		134		252		313		306		263		291		199		118		103		125		210
	% of Leases		5.8%		10.9%		13.5%		13.2%		11.4%		12.6%		8.6%		5.1%		4.5%		5.4%		9.0%
(1) Excludes investments in unconsolidated entities. Investments classified as held for sale are included in the current year.
(2) 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):

33

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

	Nine Months Ended				Change
	September 30, 2017		September 30, 2016		$		%
Cash and cash equivalents at beginning of period	$	419,378	$	360,908	$	58,470	16%
Cash provided from (used in) operating activities		1,162,464		1,280,168		(117,704)	-9%
Cash provided from (used in) investing activities		529,196		(1,291,136)		1,820,332	n/a
Cash provided from (used in) financing activities		(1,899,107)		88,367		(1,987,474)	n/a
Effect of foreign currency translation		24,316		(9,690)		34,006	n/a
Cash and cash equivalents at end of period	$	236,247	$	428,617	$	(192,370)	-45%

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 nine months ended September 30, 2017 and 2016, cash flow provided from operations exceeded cash distributions to stockholders.

Investing Activities.  The changes in net cash provided from/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):

	Nine Months Ended				Change
	September 30,		September 30,
	2017		2016		$		%
New development	$	198,068	$	325,372	$	(127,304)	-39%
Recurring capital expenditures, tenant improvements and lease commissions		45,777		48,055		(2,278)	-5%
Renovations, redevelopments and other capital improvements		113,365		93,145		20,220	22%
Total	$	357,210	$	466,572	$	(109,362)	-23%

    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/used in 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 September 30, 2017, we had investments in unconsolidated entities with our ownership interests 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 September 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 September 30, 2017 (in thousands):

	Payments Due by Period
Contractual Obligations	Total		2017		2018-2019		2020-2021		Thereafter
Unsecured revolving credit facility(1)	$	420,000	$	-	$	-	$	420,000	$	-
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)		239,827		-		-		239,827		-
Pounds Sterling senior unsecured notes(3)		1,407,210		-		-		-		1,407,210
U.S. Dollar term credit facility		507,500		-		-		507,500		-
Canadian Dollar term credit facility(3)		199,856		-		-		199,856		-
Secured debt:(2,3)
Consolidated		2,720,002		121,412		918,669		406,002		1,273,919
Unconsolidated		738,004		2,046		150,803		58,136		527,019
Contractual interest obligations:(4)
Unsecured revolving credit facility		38,116		2,242		17,937		17,937		-
Senior unsecured notes and term loans(3)		3,251,019		139,547		701,200		590,237		1,820,035
Consolidated secured debt(3)		520,722		25,542		172,182		119,399		203,599
Unconsolidated secured debt(3)		177,010		7,198		57,525		40,910		71,377
Capital lease obligations(5)		90,288		1,183		9,012		8,346		71,747
Operating lease obligations(5)		1,105,254		4,479		35,482		34,443		1,030,850
Purchase obligations(5)		333,595		121,949		211,646		-		-
Other long-term liabilities(6)		3,073		369		2,704		-		-
Total contractual obligations	$	17,801,476	$	425,967	$	3,327,160	$	3,542,593	$	10,505,756
(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 September 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 October 31, 2017, 3,437,349 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. LLC, 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”).  The Equity Shelf Program also allows us to enter into forward sale

35

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

agreements.  We expect that, if entered into, we will physically settle each forward sale agreement on one or more dates on or prior to the maturity date of that particular forward sale agreement, in which case we will expect to receive per share cash proceeds at settlement equal to the forward sale price under the relevant forward sale agreement.  However, we may also elect to cash settle or net share settle a forward sale agreement.  As of October 31, 2017, we had $784,083,000 of remaining capacity under the Equity Shelf Program and there were no outstanding forward sales agreements. 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			Nine Months Ended				Change
	September 30,		September 30,					September 30,		September 30,
	2017		2016		Amount		%	2017		2016		Amount		%
NICS	$	74,043	$	334,910	$	(260,867)	-78%	$	575,118	$	679,353	$	(104,235)	-15%
FFO		295,722		401,870		(106,148)	-26%		986,352		1,210,108		(223,756)	-18%
EBITDA		442,684		702,196		(259,512)	-37%		1,665,488		1,796,729		(131,241)	-7%
NOI		567,486		605,453		(37,967)	-6%		1,676,362		1,820,690		(144,328)	-8%
SSNOI		464,062		446,955		17,107	4%		1,365,983		1,345,907		20,076	1%
Per share data (fully diluted):
NICS	$	0.20	$	0.93	$	(0.73)	-78%	$	1.56	$	1.89	$	(0.33)	-17%
FFO	$	0.80	$	1.11	$	(0.31)	-28%	$	2.68	$	3.37	$	(0.69)	-20%
Interest coverage ratio		3.63x		5.24x		-1.61x	-31%		4.63x		4.43x		0.20x	5%
Fixed charge coverage ratio		2.97x		4.17x		-1.20x	-29%		3.74x		3.52x		0.22x	6%

Triple-net

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

	Three Months Ended					Change			Nine Months Ended					Change
		September 30,		September 30,						September 30,		September 30,
		2017		2016		$		%		2017		2016		$		%
NOI		$	244,916	$	310,864	$	(65,948)	-21%		$	735,998	$	929,343	$	(193,345)	-21%
Non SSNOI attributable to same store properties			(9,097)		(11,325)		2,228	-20%			(28,691)		(36,190)		7,499	-21%
NOI attributable to non same store properties(1)			(61,543)		(131,847)		70,304	-53%			(192,013)		(393,989)		201,976	-51%
SSNOI(2)		$	174,276	$	167,692	$	6,584	4%		$	515,294	$	499,164	$	16,130	3%
(1) Change is primarily due to the acquisition of 26 properties and the conversion of 15 construction projects into revenue-generating properties subsequent to January 1, 2016.
(2) Relates to 511 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			Nine Months Ended				Change
			September 30,		September 30,					September 30,		September 30,
			2017		2016		$		%	2017		2016		$		%
Revenues:
	Rental income		$	221,555	$	286,226	$	(64,671)	-23%	$	666,735	$	857,184	$	(190,449)	-22%
	Interest income			20,187		23,017		(2,830)	-12%		61,767		67,842		(6,075)	-9%
	Other income			3,174		1,621		1,553	96%		7,496		4,317		3,179	74%
		Total revenues		244,916		310,864		(65,948)	-21%		735,998		929,343		(193,345)	-21%
		NOI(1)		244,916		310,864		(65,948)	-21%		735,998		929,343		(193,345)	-21%
Other expenses:
	Interest expense			3,622		4,714		(1,092)	-23%		11,647		16,832		(5,185)	-31%
	Loss (gain) on derivatives, net			324		-		324	n/a		2,284		-		2,284	n/a
	Depreciation and amortization			62,891		74,296		(11,405)	-15%		182,672		229,906		(47,234)	-21%
	Transaction costs(2)			-		1,613		(1,613)	-100%		-		5,760		(5,760)	-100%
	Loss (gain) on extinguishment of debt, net			-		-		-	n/a		29,083		97		28,986	29882%
	Impairment of assets			-		5,070		(5,070)	-100%		4,846		19,384		(14,538)	-75%
	Other expenses(2)			89,236		-		89,236	n/a		96,425		-		96,425	n/a
		Total other expenses		156,073		85,693		70,380	82%		326,957		271,979		54,978	20%
Income from continuing operations before income taxes and income (loss) from unconsolidated entities				88,843		225,171		(136,328)	-61%		409,041		657,364		(248,323)	-38%
Income tax (expense) benefit				(816)		(896)		80	-9%		(2,070)		(1,425)		(645)	45%
Income (loss) from unconsolidated entities				5,478		1,998		3,480	174%		14,983		8,097		6,886	85%
Income from continuing operations				93,505		226,273		(132,768)	-59%		421,954		664,036		(242,082)	-36%
Gain (loss) on real estate dispositions, net(3)				(185)		163,579		(163,764)	n/a		273,051		165,109		107,942	65%
Net income				93,320		389,852		(296,532)	-76%		695,005		829,145		(134,140)	-16%
Less: Net income (loss) attributable to noncontrolling interests				1,539		926		613	66%		3,112		1,357		1,755	129%
Net income attributable to common stockholders			$	91,781	$	388,926	$	(297,145)	-76%	$	691,893	$	827,788	$	(135,895)	-16%
(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 September 30, 2017, we had 32 leases with rental rate increasers ranging from 0.07% 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 nine months ended September 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.

37

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

For the three months ended September 30, 2017, the increase in other expenses represents non-capitalizable transaction costs primarily related to a joint venture transaction with an existing seniors housing operator, including the conversion of properties from triple-net to seniors housing operating, an exchange of PropCo/OpCo interests and termination/restructuring of pre-existing relationships.

    During the nine months ended September 30, 2017, we completed ten triple-net construction projects totaling $283,472,000 or $347,818 per bed/unit.  The following is a summary of triple-net construction projects pending as of September 30, 2017 (dollars in thousands):

Location	Units/Beds		Commitment		Balance	Est. Completion
Alexandria, VA	116	$	60,156	$	40,405	2Q18
Exton, PA	120		34,175		12,779	2Q18
Westerville, OH	90		22,800		3,387	4Q18
	326	$	117,131		56,571
Raleigh, NC	Project in planning stage				7,095
Total				$	63,666

     Interest expense for the nine months ended September 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						Nine Months Ended
	September 30, 2017			September 30, 2016			September 30, 2017			September 30, 2016
			Wtd. Avg.			Wtd. Avg.			Wtd. Avg.			Wtd. Avg.
	Amount		Interest Rate	Amount		Interest Rate	Amount		Interest Rate	Amount		Interest Rate
Beginning balance	$	345,866	3.532%	$	460,269	5.509%	$	594,199	4.580%	$	554,014	5.488%
Debt issued		13,000	4.570%		-	0.000%		13,000	4.570%		-	0.000%
Debt extinguished		-	0.000%		(14,565)	5.865%		(255,553)	5.923%		(107,577)	5.028%
Foreign currency		7,707	3.134%		(503)	5.428%		18,525	2.954%		4,550	5.303%
Principal payments		(1,126)	5.559%		(2,514)	5.608%		(4,724)	5.684%		(8,300)	5.635%
Ending balance	$	365,447	5.554%	$	442,687	5.515%	$	365,447	3.554%	$	442,687	5.515%
Monthly averages	$	358,425	3.560%	$	455,044	5.511%	$	424,583	3.996%	$	498,934	5.496%

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):

38

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

	Three Months Ended					Change			Nine Months Ended				Change
		September 30,		September 30,					September 30,		September 30,
		2017		2016		$		%	2017		2016		$		%
NOI		$	225,100	$	199,495	$	25,605	13%	$	653,518	$	603,219	$	50,299	8%
Non SSNOI attributable to same store properties			206		1,269		(1,063)	-84%		918		1,759		(841)	-48%
NOI attributable to non same store properties(1)			(20,894)		(5,803)		(15,091)	260%		(57,501)		(11,596)		(45,905)	396%
SSNOI(2)		$	204,412	$	194,961	$	9,451	5%	$	596,935	$	593,382	$	3,553	1%
(1) Change is primarily due to the acquisition of 50 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):

			Three Months Ended				Change			Nine Months Ended				Change
			September 30,		September 30,					September 30,		September 30,
			2017		2016		$		%	2017		2016		$		%
Revenues:
	Resident fees and services		$	702,380	$	630,017	$	72,363	11%	$	2,049,757	$	1,847,386	$	202,371	11%
	Interest income			-		1,054		(1,054)	-100%		69		3,126		(3,057)	-98%
	Other income			1,497		716		781	109%		4,005		11,889		(7,884)	-66%
		Total revenues		703,877		631,787		72,090	11%		2,053,831		1,862,401		191,430	10%
Property operating expenses				478,777		432,292		46,485	11%		1,400,313		1,259,182		141,131	11%
	NOI(1)			225,100		199,495		25,605	13%		653,518		603,219		50,299	8%
Other expenses:
	Interest expense			16,369		20,360		(3,991)	-20%		47,587		61,157		(13,570)	-22%
	Depreciation and amortization			119,089		97,210		21,879	23%		356,023		301,354		54,669	18%
	Transaction costs(2)			-		18,083		(18,083)	-100%		-		25,259		(25,259)	-100%
	Loss (gain) on extinguishment of debt, net			-		-		-	n/a		3,414		(88)		3,502	n/a
	Impairment of assets			-		-		-	n/a		14,191		-		14,191	n/a
	Other expenses(2)			5,157		-		5,157	n/a		8,100		-		8,100	n/a
		Total other expenses		140,615		135,653		4,962	4%		429,315		387,682		41,633	11%
Income (loss) from continuing operations before income taxes and income (loss) from unconsolidated entities				84,485		63,842		20,643	32%		224,203		215,537		8,666	4%
Income tax benefit (expense)				(1,519)		515		(2,034)	n/a		9,133		5,304		3,829	72%
Income (loss) from unconsolidated entities				(2,886)		(3,891)		1,005	-26%		(40,527)		(15,713)		(24,814)	158%
Income from continuing operations				80,080		60,466		19,614	32%		192,809		205,128		(12,319)	-6%
Gain (loss) on real estate dispositions, net(3)				(197)		-		(197)	n/a		12,814		-		12,814	n/a
Net income (loss)				79,883		60,466		19,417	32%		205,623		205,128		495	0%
Less: Net income (loss) attributable to noncontrolling interests				1,008		1,556		(548)	-35%		1,199		1,739		(540)	-31%
Net income (loss) attributable to common stockholders			$	78,875	$	58,910	$	19,965	34%	$	204,424	$	203,389	$	1,035	1%
(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. 

39

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

     During the nine month period ended September 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 nine month period ended September 30, 2017, we recorded a gain on sale related to the sale of one property previously classified as held-for-sale.

     During the nine month period ended September 30, 2017, we completed one seniors housing operating 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 September 30, 2017 (dollars in thousands):

Location	Units		Commitment		Balance	Est. Completion
Chertsey, UK	94	$	41,814	$	32,103	1Q18
Bushey, UK	95		54,613		30,681	3Q18
	189	$	96,427		62,784
New York, NY	Project in planning stage				136,327
London, UK	Project in planning stage				28,433
Total				$	227,544

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						Nine Months Ended
	September 30, 2017			September 30, 2016			September 30, 2017			September 30, 2016
			Weighted Avg.			Weighted Avg.			Weighted Avg.			Weighted Avg.
	Amount		Interest Rate	Amount		Interest Rate	Amount		Interest Rate	Amount		Interest Rate
Beginning balance	$	2,040,985	3.556%	$	2,393,628	3.923%	$	2,463,249	3.936%	$	2,290,552	3.958%
Debt issued		15,659	3.458%		31,549	3.036%		177,459	2.595%		193,541	3.053%
Debt assumed		-	0.000%		47,156	4.132%		-	0.000%		47,156	4.132%
Debt extinguished		(15,449)	2.883%		(29,724)	3.655%		(610,403)	4.918%		(121,337)	3.609%
Foreign currency		39,696	3.180%		(7,980)	3.394%		73,737	3.257%		49,086	3.476%
Principal payments		(11,857)	3.573%		(12,326)	3.860%		(35,008)	3.629%		(36,695)	3.908%
Ending balance	$	2,069,034	3.633%	$	2,422,303	3.926%	$	2,069,034	3.633%	$	2,422,303	3.926%
Monthly averages	$	2,065,572	3.605%	$	2,413,116	3.910%	$	2,082,662	3.662%	$	2,371,211	3.940%

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 nine month period ended September 30, 2017.  During the nine months ended September 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):

40

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

	Three Months Ended					Change			Nine Months Ended				Change
		September 30,		September 30,					September 30,		September 30,
		2017		2016		$		%	2017		2016		$		%
NOI		$	96,772	$	94,905	$	1,867	2%	$	285,675	$	287,423	$	(1,748)	-1%
Non SSNOI on same store properties			(1,827)		(2,636)		809	-31%		(6,745)		(7,620)		875	-11%
NOI attributable to non same store properties(1)			(9,571)		(7,967)		(1,604)	20%		(25,176)		(26,442)		1,266	-5%
SSNOI(2)		$	85,374	$	84,302	$	1,072	1%	$	253,754	$	253,361	$	393	0%
(1) Change is primarily due to a nonrecurring cash receipt during the three months ended June 30, 2016, offset by acquisitions of seven properties subsequent to January 1, 2016.
(2) Relates to 235 same store properties.

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

			Three Months Ended				Change			Nine Months Ended				Change
			September 30,		September 30,					September 30,		September 30,
			2017		2016		$		%	2017		2016		$		%
Revenues:
	Rental income		$	141,325	$	134,926	$	6,399	5%	$	418,886	$	402,258	$	16,628	4%
	Interest income			-		1,009		(1,009)	-100%		-		3,307		(3,307)	-100%
	Other income			667		358		309	86%		2,497		4,824		(2,327)	-48%
		Total revenues		141,992		136,293		5,699	4%		421,383		410,389		10,994	3%
Property operating expenses				45,220		41,388		3,832	9%		135,708		122,966		12,742	10%
	NOI(1)			96,772		94,905		1,867	2%		285,675		287,423		(1,748)	-1%
Other expenses:
	Interest expense			2,929		3,986		(1,057)	-27%		7,342		15,132		(7,790)	-51%
	Depreciation and amortization			48,158		46,555		1,603	3%		144,567		142,066		2,501	2%
	Transaction costs(2)			-		146		(146)	-100%		-		2,188		(2,188)	-100%
	Impairment of assets			-		4,635		(4,635)	-100%		5,625		4,635		990	21%
	Loss (gain) on extinguishment of debt, net			-		-		-	n/a		4,373		-		4,373	n/a
	Other expenses(2)			530		-		530	n/a		2,201		-		2,201	n/a
		Total other expenses		51,617		55,322		(3,705)	-7%		164,108		164,021		87	0%
Income from continuing operations before income taxes and income from unconsolidated entities				45,155		39,583		5,572	14%		121,567		123,402		(1,835)	-1%
Income tax (expense) benefit				(366)		417		(783)	n/a		(655)		(59)		(596)	1010%
Income from unconsolidated entities				816		144		672	467%		1,868		88		1,780	2023%
Income from continuing operations				45,605		40,144		5,461	14%		122,780		123,431		(651)	-1%
Gain (loss) on real estate dispositions, net(3)				2,004		(1,228)		3,232.00	n/a		2,004		(1,228)		3,232.00	n/a
Net income (loss)				47,609		38,916		8,693	22%		124,784		122,203		2,581	2%
Less: Net income (loss) attributable to noncontrolling interests				1,032		997		35	4%		3,424		(529)		3,953	n/a
Net income (loss) attributable to common stockholders			$	46,577	$	37,919	$	8,658	23%	$	121,360	$	122,732	$	(1,372)	-1%
(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 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

41

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

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 September 30, 2017, our consolidated outpatient medical portfolio signed 98,116 square feet of new leases and 240,234 square feet of renewals.  The weighted-average term of these leases was seven years, with a rate of $33.97 per square foot and tenant improvement and lease commission costs of $20.72 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 5%. 

     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 nine months ended September 30, 2017 and 2016, we recorded impairment charges related to certain held-for-sale properties as the carrying values exceeded the estimated fair values less costs to sell. 

    During the nine months ended September 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 September 30, 2017 (dollars in thousands):

Location	Square Feet		Commitment		Balance	Est. Completion
Palmer. AK	38,676	$	12,345	$	466	3Q18
Brooklyn, NY	140,955		105,177		48,165	3Q19
	179,631	$	117,522	$	48,631

     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						Nine Months Ended
	September 30, 2017			September 30, 2016			September 30, 2017			September 30, 2016
			Weighted Avg.			Weighted Avg.			Weighted Avg.			Weighted Avg.
	Amount		Interest Rate	Amount		Interest Rate	Amount		Interest Rate	Amount		Interest Rate
Beginning balance	$	284,918	4.617%	$	563,232	5.129%	$	404,079	4.846%	$	627,689	5.177%
Debt assumed		-	0.000%		-	0.000%		23,094	6.670%		-	0.000%
Debt extinguished		-	0.000%		(128,406)	5.847%		(137,416)	5.990%		(185,914)	5.892%
Principal payments		(2,000)	6.633%		(3,014)	5.373%		(6,839)	6.762%		(9,963)	5.471%
Ending balance	$	282,918	4.693%	$	431,812	4.929%	$	282,918	4.693%	$	431,812	4.929%
Monthly averages	$	283,885	4.676%	$	521,636	5.077%	$	298,933	4.607%	$	571,466	5.152%

         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.

     Non-Segment/Corporate

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

42

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

		Three Months Ended				Change			Nine Months Ended				Change
		September 30,		September 30,					September 30,		September 30,
		2017		2016		$		%	2017		2016		$		%
Revenues:
	Other income	$	698	$	189	$	509	269%	$	1,171	$	705	$	466	66%
Expenses:
	Interest expense		99,658		100,639		(981)	-1%		290,829		301,864		(11,035)	-4%
	Loss (gain) on derivatives, net		-		(2,516)		2,516	-100%		-		(2,516)		2,516	-100%
	General and administrative		29,913		36,828		(6,915)	-19%		93,643		122,434		(28,791)	-24%
	Other expenses		4,672		-		4,672	n/a		10,882		3,161		7,721	244%
	Total expenses		134,243		134,951		(708)	-1%		395,354		424,943		(29,589)	-7%
Loss from continuing operations before income taxes			(133,545)		(134,762)		1,217	-1%		(394,183)		(424,238)		30,055	-7%
Income tax (expense) benefit			2,032		269		1,763	655%		(873)		(1,277)		404	-32%
Loss from continuing operations			(131,513)		(134,493)		2,980	-2%		(395,056)		(425,515)		30,459	-7%
Less: Preferred stock dividends			11,676		16,352		(4,676)	-29%		37,734		49,055		(11,321)	-23%
Less: Preferred stock redemption charge			-		-		-	n/a		9,769		-		9,769	n/a
Net loss attributable to common stockholders		$	(143,189)	$	(150,845)	$	7,656	-5%	$	(442,559)	$	(474,570)	$	32,011	-7%

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

	Three Months Ended				Change			Nine Months Ended				Change
	September 30,		September 30,					September 30,		September 30,
	2017		2016		$		%	2017		2016		$		%
Senior unsecured notes	$	92,296	$	92,005	$	291	0%	$	267,444	$	279,901	$	(12,457)	-4%
Secured debt		49		69		(20)	-29%		164		245		(81)	-33%
Primary unsecured credit facility		3,906		5,137		(1,231)	-24%		13,179		12,142		1,037	9%
Loan expense		3,407		3,428		(21)	-1%		10,042		9,576		466	5%
Totals	$	99,658	$	100,639	$	(981)	-1%	$	290,829	$	301,864	$	(11,035)	-4%

The change in interest expense on senior unsecured notes is due to the net effect of issuances and extinguishments.  The year-to-date 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 September 30, 2017 and 2016 were 2.74% and 3.41%, respectively.  The decrease in general and administrative expenses 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 primarily represent severance-related 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, sub-leases and major capital restructurings 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,		September 30,
NOI Reconciliations:			2016		2016		2016		2016		2017		2017		2017
Net income			$	165,474	$	210,749	$	354,741	$	351,108	$	337,610	$	203,441	$	89,299
Loss (gain) on real estate dispositions, net				-		(1,530)		(162,351)		(200,165)		(244,092)		(42,155)		(1,622)
Loss (income) from unconsolidated entities				3,820		1,959		1,749		2,829		23,106		3,978		(3,408)
Income tax expense (benefit)				(1,725)		(513)		(305)		(16,585)		2,245		(8,448)		669
Other expenses				-		3,161		-		8,838		11,675		6,339		99,595
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		324
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		29,913
Depreciation and amortization				228,696		226,569		218,061		227,916		228,276		224,847		230,138
Interest expense				132,960		132,326		129,699		126,360		118,597		116,231		122,578
Consolidated net operating income (NOI)			$	597,414	$	617,825	$	605,453	$	583,486	$	552,129	$	556,747	$	567,486
NOI by segment:
	Triple-net		$	308,168	$	310,311	$	310,864	$	279,516	$	249,735	$	241,347	$	244,916
	Seniors housing operating			196,475		207,255		199,495		210,895		209,442		218,978		225,100
	Outpatient medical			92,713		99,805		94,905		92,841		92,719		96,183		96,772
	Non-segment/corporate			58		454		189		234		233		239		698
		Total NOI	$	597,414	$	617,825	$	605,453	$	583,486	$	552,129	$	556,747	$	567,486

			Nine Months Ended
			September 30,		September 30,
NOI Reconciliations:			2016		2017
Net income			$	730,961	$	630,356
Loss (gain) on real estate dispositions, net				(163,881)		(287,869)
Loss (income) from unconsolidated entities				7,528		23,676
Income tax expense (benefit)				(2,543)		(5,535)
Other expenses				3,161		117,608
Impairment of assets				24,019		24,662
Loss (gain) on extinguishment of debt, net				9		36,870
Loss (gain) on derivatives, net				(2,516)		2,284
Transaction costs				33,207		-
General and administrative expenses				122,434		93,643
Depreciation and amortization				673,326		683,262
Interest expense				394,985		357,405
Consolidated net operating income (NOI)			$	1,820,690	$	1,676,362
NOI by segment:
	Triple-net		$	929,343	$	735,998
	Seniors housing operating			603,219		653,518
	Outpatient medical			287,423		285,675
	Non-segment/corporate			705		1,171
		Total NOI	$	1,820,690	$	1,676,362

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,		September 30,
SSNOI Reconciliations:					2016		2016		2016		2016		2017		2017		2017
NOI:
	Triple-net				$	308,168	$	310,311	$	310,864	$	279,516	$	249,735	$	241,347	$	244,916
	Seniors housing operating					196,475		207,255		199,495		210,895		209,442		218,978		225,100
	Outpatient medical					92,713		99,805		94,905		92,841		92,719		96,183		96,772
			Total			597,356		617,371		605,264		583,252		551,896		556,508		566,788
Adjustments:
	Triple-net:
		Non SSNOI on same store properties				(13,461)		(11,404)		(11,325)		(11,151)		(10,301)		(9,293)		(9,097)
		NOI attributable to non same store properties				(131,095)		(131,047)		(131,847)		(100,819)		(70,397)		(60,073)		(61,543)
			Subtotal			(144,556)		(142,451)		(143,172)		(111,970)		(80,698)		(69,366)		(70,640)
	Seniors housing operating:
		Non SSNOI on same store properties				248		242		1,269		231		231		481		206
		NOI attributable to non same store properties				(2,909)		(2,884)		(5,803)		(20,413)		(18,754)		(17,853)		(20,894)
			Subtotal			(2,661)		(2,642)		(4,534)		(20,182)		(18,523)		(17,372)		(20,688)
	Outpatient medical:
		Non SSNOI on same store properties				(2,373)		(2,611)		(2,636)		(1,974)		(2,214)		(2,704)		(1,827)
		NOI attributable to non same store properties				(6,467)		(12,007)		(7,967)		(5,036)		(6,252)		(9,352)		(9,571)
			Subtotal			(8,840)		(14,618)		(10,603)		(7,010)		(8,466)		(12,056)		(11,398)
SSNOI:				Properties
	Triple-net			511		163,612		167,860		167,692		167,546		169,037		171,981		174,276
	Seniors housing operating			373		193,814		204,613		194,961		190,713		190,919		201,606		204,412
	Outpatient medical			235		83,873		85,187		84,302		85,831		84,253		84,127		85,374
			Total	1,119	$	441,299	$	457,660	$	446,955	$	444,090	$	444,209	$	457,714	$	464,062
SSNOI Property Reconciliation:
	Total properties			1,278
	Acquisitions			(83)
	Developments			(30)
	Held-for-sale			(8)
	Transitions/restructurings			(29)
	Other(1)			(9)
		Same store properties		1,119
(1) Includes eight land parcels and one loan.

					Nine Months Ended
						September 30,		September 30,
SSNOI Reconciliations:						2016		2017
NOI:
	Triple-net					$	929,343	$	735,998
	Seniors housing operating						603,219		653,518
	Outpatient medical						287,423		285,675
			Total				1,819,985		1,675,191
Adjustments:
	Triple-net:
		Non SSNOI on same store properties					(36,190)		(28,691)
		NOI attributable to non same store properties					(393,989)		(192,013)
			Subtotal				(430,179)		(220,704)
	Seniors housing operating:
		Non SSNOI on same store properties					1,759		918
		NOI attributable to non same store properties					(11,596)		(57,501)
			Subtotal				(9,837)		(56,583)
	Outpatient medical
		Non SSNOI on same store properties					(7,620)		(6,745)
		NOI attributable to non same store properties					(26,442)		(25,176)
			Subtotal				(34,062)		(31,921)
SSNOI:				Properties
	Triple-net			511			499,164		515,294
	Seniors housing operating			373			593,382		596,935
	Outpatient medical			235			253,361		253,754
			Total	1,119		$	1,345,907	$	1,365,983

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,		September 30,
FFO Reconciliations:			2016		2016		2016		2016		2017		2017		2017
NICS			$	148,969	$	195,474	$	334,910	$	333,042	$	312,639	$	188,429	$	74,043
Depreciation and amortization				228,696		226,569		218,061		227,916		228,276		224,847		230,138
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)		(1,622)
Noncontrolling interests				(17,319)		(20,616)		(15,695)		(17,897)		(18,107)		(16,955)		(16,826)
Unconsolidated entities				16,604		17,077		17,240		16,746		16,484		16,593		9,989
FFO			$	391,264	$	416,974	$	401,870	$	372,829	$	306,231	$	384,390	$	295,722
Average common shares outstanding:
	Basic			355,076		356,646		358,932		362,088		362,534		366,524		369,089
	Diluted			356,051		358,891		361,237		364,369		364,652		368,149		370,740
Per share data:
NICS
	Basic		$	0.42	$	0.55	$	0.93	$	0.92	$	0.86	$	0.51	$	0.20
	Diluted			0.42		0.54		0.93		0.91		0.86		0.51		0.20
FFO
	Basic		$	1.10	$	1.17	$	1.12	$	1.03	$	0.84	$	1.05	$	0.80
	Diluted			1.10		1.16		1.11		1.02		0.84		1.04		0.80

		Nine Months Ended
		September 30,		September 30,
FFO Reconciliations:		2016		2017
NICS		$	679,353	$	575,118
Depreciation and amortization			673,326		683,262
Impairment of assets			24,019		24,662
Loss (gain) on sales of properties, net			(163,881)		(287,869)
Noncontrolling interests			(53,630)		(51,887)
Unconsolidated entities			50,921		43,066
FFO		$	1,210,108	$	986,352
Average common shares outstanding:
	Basic		356,911		366,096
	Diluted		358,752		367,894
Per share data:
NICS
	Basic	$	1.90	$	1.57
	Diluted		1.89		1.56
FFO
	Basic	$	3.39	$	2.69
	Diluted		3.37		2.68

47

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

     The table below reflects the reconciliation of EBITDA 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,		September 30,
EBITDA Reconciliations:		2016		2016		2016		2016		2017		2017			2017
Net income		$	165,474	$	210,749	$	354,741	$	351,108	$	337,610	$	203,441	$	89,299
Interest expense			132,960		132,326		129,699		126,360		118,597		116,231		122,578
Income tax expense (benefit)			(1,725)		(513)		(305)		(16,585)		2,245		(8,448)		669
Depreciation and amortization			228,696		226,569		218,061		227,916		228,276		224,847		230,138
EBITDA		$	525,405	$	569,131	$	702,196	$	688,799	$	686,728	$	536,071	$	442,684
Interest Coverage Ratio:
Interest expense		$	132,960	$	132,326	$	129,699	$	126,360	$	118,597	$	116,231	$	122,578
Non-cash interest expense			599		(1,519)		(543)		(216)		(1,679)		(2,946)		(3,199)
Capitalized interest			3,037		4,306		4,766		4,834		4,129		3,358		2,545
	Total interest		136,596		135,113		133,922		130,978		121,047		116,643		121,924
EBITDA		$	525,405	$	569,131	$	702,196	$	688,799	$	686,728	$	536,071	$	442,684
	Interest coverage ratio		3.85x		4.21x		5.24x		5.26x		5.67x		4.60x		3.63x
Fixed Charge Coverage Ratio:
Total interest		$	136,596	$	135,113	$	133,922	$	130,978	$	121,047	$	116,643	$	121,924
Secured debt principal payments			18,642		19,096		18,151		18,577		16,249		15,958		15,300
Preferred dividends			16,352		16,352		16,352		16,352		14,379		11,680		11,676
	Total fixed charges		171,590		170,561		168,425		165,907		151,675		144,281		148,900
EBITDA		$	525,405	$	569,131	$	702,196	$	688,799	$	686,728	$	536,071	$	442,684
	Fixed charge coverage ratio		3.06x		3.34x		4.17x		4.15x		4.53x		3.72x		2.97x

		Nine Months Ended
		September 30,		September 30,
EBITDA Reconciliations:		2016			2017
Net income		$	730,961	$	630,356
Interest expense			394,985		357,405
Income tax expense (benefit)			(2,543)		(5,535)
Depreciation and amortization			673,326		683,262
EBITDA		$	1,796,729	$	1,665,488
Interest Coverage Ratio:
Interest expense		$	394,985	$	357,405
Non-cash interest expense			(1,465)		(7,825)
Capitalized interest			12,109		10,033
	Total interest		405,629		359,613
EBITDA		$	1,796,729	$	1,665,488
	Interest coverage ratio		4.43x		4.63x
Fixed Charge Coverage Ratio:
Total interest		$	405,629	$	359,613
Secured debt principal payments			55,889		47,507
Preferred dividends			49,055		37,734
	Total fixed charges		510,573		444,854
EBITDA		$	1,796,729	$	1,665,488
	Fixed charge coverage ratio		3.52x		3.74x

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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,		September 30,
Reconciliations:		2016		2016		2016		2016		2017		2017		2017
Net income		$	844,606	$	724,894	$	880,380	$	1,082,070	$	1,254,208	$	1,246,899	$	981,458
Interest expense			504,048		517,512		526,082		521,345		506,982		490,886		483,765
Income tax expense (benefit)			5,030		(2,899)		139		(19,128)		(15,158)		(23,093)		(22,119)
Depreciation and amortization			866,106		883,873		896,135		901,242		900,822		899,100		911,180
	EBITDA		2,219,790		2,123,380		2,302,736		2,485,529		2,646,854		2,613,792		2,354,284
Loss (income) from unconsolidated entities			12,676		11,682		10,801		10,357		29,643		31,662		26,505
Transaction costs			70,579		63,245		73,754		42,910		34,702		29,545		9,704
Stock-based compensation expense(1)			29,976		25,883		25,807		28,869		25,588		23,321		24,710
Loss (gain) on extinguishment of debt, net			19,252		398		(186)		17,214		48,593		54,074		54,074
Losses/impairments (gain) on sale of properties, net			(209,228)		(20,647)		(171,246)		(326,839)		(574,216)		(601,209)		(450,185)
Provision for loan losses			-		-		-		10,215		10,215		10,215		10,215
Loss (gain) on derivatives, net			-		-		(2,516)		(2,448)		(1,225)		(489)		2,351
Other expenses(1)			40,636		37,386		37,386		7,721		19,396		23,997		122,211
Additional other income			(2,144)		(13,955)		(11,811)		(16,664)		(16,664)		(4,853)		(4,853)
Adjusted EBITDA		$	2,181,537	$	2,227,372	$	2,264,725	$	2,256,864	$	2,222,886	$	2,180,055	$	2,149,016
Adjusted Fixed Charge Coverage Ratio:
Interest expense		$	504,048	$	517,512	$	526,082	$	521,345	$	506,982	$	490,886	$	483,765
Capitalized interest			9,320		11,566		14,467		16,943		18,035		17,087		14,866
Non-cash interest expense			(1,868)		(7,589)		(4,341)		(1,681)		(3,958)		(5,386)		(8,041)
	Total interest		511,500		521,489		536,208		536,607		521,059		502,587		490,590
Adjusted EBITDA		$	2,181,537	$	2,227,372	$	2,264,725	$	2,256,864	$	2,222,886	$	2,180,055	$	2,149,016
	Adjusted interest coverage ratio		4.26x		4.27x		4.22x		4.21x		4.27x		4.34x		4.38x
Total interest		$	511,500	$	521,489	$	536,208	$	536,607	$	521,059	$	502,587	$	490,590
Secured debt principal payments			70,076		71,836		74,170		74,466		72,073		68,935		66,084
Preferred dividends			65,408		65,408		65,407		65,406		63,434		58,762		54,086
	Total fixed charges		646,984		658,733		675,785		676,479		656,566		630,284		610,760
Adjusted EBITDA		$	2,181,537	$	2,227,372	$	2,264,725	$	2,256,864	$	2,222,886	$	2,180,055	$	2,149,016
	Adjusted fixed charge coverage ratio		3.37x		3.38x		3.35x		3.34x		3.39x		3.46x		3.52x
(1) Certain severance-related costs are included in stock-based compensation and excluded from other expenses.

     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. Amounts are in thousands, except share price.

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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,		September 30,
			2016		2016		2016		2016		2017		2017		2017
Book capitalization:
Borrowings under primary unsecured credit facility		$	645,000	$	745,000	$	1,350,000	$	645,000	$	522,000	$	385,000	$	420,000
Long-term debt obligations(1)			12,418,198		12,228,727		12,080,888		11,713,245		10,932,185		10,994,946		11,101,592
Cash & cash equivalents(2)			(355,949)		(466,585)		(456,420)		(557,659)		(380,360)		(442,284)		(250,776)
Total net debt			12,707,249		12,507,142		12,974,468		11,800,586		11,073,825		10,937,662		11,270,816
Total equity			14,999,794		14,868,568		15,264,238		15,281,472		15,110,263		15,313,523		15,244,664
Redeemable noncontrolling interest			359,656		394,126		393,530		398,433		385,418		388,876		386,748
Book capitalization		$	28,066,699	$	27,769,836	$	28,632,236	$	27,480,491	$	26,569,506	$	26,640,061	$	26,902,228
	Net debt to book capitalization ratio		45%		45%		45%		43%		42%		41%		42%
Undepreciated book capitalization:
Total net debt		$	12,707,249	$	12,507,142	$	12,974,468	$	11,800,586	$	11,073,825	$	10,937,662	$	11,270,816
Accumulated depreciation and amortization			4,032,726		4,109,585		4,243,038		4,093,494		4,335,160		4,568,408		4,826,418
Total equity			14,999,794		14,868,568		15,264,238		15,281,472		15,110,263		15,313,523		15,244,664
Redeemable noncontrolling interest			359,656		394,126		393,530		398,433		385,418		388,876		386,748
Undepreciated book capitalization		$	32,099,425	$	31,879,421	$	32,875,274	$	31,573,985	$	30,904,666	$	31,208,469	$	31,728,646
	Net debt to undepreciated book capitalization ratio		40%		39%		39%		37%		36%		35%		36%
Market capitalization:
Common shares outstanding			356,773		357,690		362,425		362,602		364,564		368,878		370,342
Period end share price		$	69.34	$	76.17	$	74.77	$	66.93	$	70.82	$	74.85	$	70.28
Common equity market capitalization		$	24,738,640	$	27,245,247	$	27,098,517	$	24,268,952	$	25,818,422	$	27,610,518	$	26,027,636
Total net debt			12,707,249		12,507,142		12,974,468		11,800,586		11,073,825		10,937,662		11,270,816
Noncontrolling interests(3)			839,856		869,320		867,923		873,512		859,478		873,567		901,487
Preferred stock			1,006,250		1,006,250		1,006,250		1,006,250		718,750		718,750		718,503
Enterprise value		$	39,291,995	$	41,627,959	$	41,947,158	$	37,949,300	$	38,470,475	$	40,140,497	$	38,918,442
	Net debt to market capitalization ratio		32%		30%		31%		31%		29%		27%		29%
(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.
(3) Includes all noncontrolling interests (redeemable and permanent) as reflected on our consolidated balance sheet.

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

51

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

	September 30, 2017				December 31, 2016
	Principal		Change in		Principal		Change in
	balance		fair value		balance		fair value
Senior unsecured notes	$	7,697,037	$	(506,781)	$	7,568,832	$	(521,203)
Secured debt		1,791,932		(65,900)		2,489,276		(73,944)
Totals	$	9,488,969	$	(572,681)	$	10,058,108	$	(595,147)

     Our variable rate debt, including our primary unsecured credit facility, is reflected at fair value. At September 30, 2017, we had $2,055,426,000 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 $20,554,000.  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 September 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 $4,500,000.  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):

	September 30, 2017				December 31, 2016
	Carrying		Change in		Carrying		Change in
	Value		fair value		Value		fair value
Foreign currency forward contracts	$	42,036	$	13,778	$	87,962 (1)	$	722 (1)
Debt designated as hedges		1,607,066		16,071		1,481,591		13,000
Totals	$	1,649,102	$	29,849	$	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. 

52

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
July 1, 2017 through July 31, 2017	-	$	-
August 1, 2017 through August 31, 2017	56		71.93
September 1, 2017 through September 30, 2017	-		-
Totals	56	$	71.93
(1) During the three months ended September 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

     None.

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Item 6. Exhibits

10.1            Resignation Agreement, dated October 3, 2017, by and between Scott A. Estes and Welltower Inc.*

10.2            Welltower Inc. 2017-2019 Long-Term Incentive Program – Bridge 1.*

10.3            Welltower Inc. 2017-2019 Long-Term Incentive Program – Bridge 2.*

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

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 September 30, 2017 and December 31, 2016, (ii) the Consolidated Statements of Comprehensive Income for the nine months ended September 30, 2017 and 2016, (iii) the Consolidated Statements of Equity for the nine months ended September 30, 2017 and 2016, (iv) the Consolidated Statements of Cash Flows for the nine months ended September 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: November 7, 2017	By:	/s/ THOMAS J. DEROSA
	Thomas J. DeRosa,
	Chief Executive Officer  (Principal Executive Officer)
Date: November 7, 2017	By:	/s/ JOHN A. GOODEY
	John A. Goodey,
	Executive Vice President - Chief Financial Officer  (Principal Financial Officer)
Date: November 7, 2017	By:	/s/ PAUL D. NUNGESTER, JR.
	Paul D. Nungester, Jr.,
	Senior Vice President & Controller  (Principal Accounting Officer)

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EX-10.1

 

EXHIBIT 10.1

RESIGNATION AGREEMENT

This Resignation Agreement (this “Agreement”) is made as of October 3, 2017 by and between Scott A. Estes (“Executive”) and Welltower Inc., a Delaware corporation (the “Company”).  

                WHEREAS, Executive and the Company entered into the Third Amended and Restated Employment Agreement, dated June 16, 2017 (the “Employment Agreement”) and Executive is currently serving as the Company’s Executive Vice President – Chief Financial Officer;

                WHEREAS, Executive has determined that it is in his best interests to resign his positions with the Company and the Company has agreed with that determination;

                WHEREAS, in consideration for Executive’s execution and non-revocation of this Agreement, the Company shall pay to Executive the payments described in Section 5(a) of the Employment Agreement.

NOW, THEREFORE, in consideration of the promises and mutual covenants herein contained, the parties agree with each other as follows:

1.TERMINATION DATE.   

a.Executive’s last day of employment with the Company is October 3, 2017 (the “Termination Date”).  Effective as of the Termination Date, Executive also hereby resigns all other positions Executive holds (i) with the Company, (ii) with any of the Company’s direct and indirect subsidiaries and/or affiliates, or (iii) with any other organization as to any position held at the request of, as a representative of, or for the benefit of the Company.  Executive agrees to take any additional necessary steps and sign any additional documentation that may be reasonably requested by the Company in order to give full effect or confirmation of such resignations. 

b.The Employment Agreement is terminated as of the Termination Date, except (i) as provided in Section 17 of the Employment Agreement.

c.As of the Termination Date, Executive will have no authority or power to bind the Company or to represent the Company in relation to third parties or to represent to third parties that Executive has authority or power to bind the Company or represent the Company.

2.PAYMENTS UPON TERMINATION.  Within sixty (60) days following the Termination Date, or such earlier time as required by law or indicated below in this Section 2, the Company shall provide for the following to Executive:

a.Base Compensation (as defined in the Employment Agreement) accrued, but unpaid, through the Termination Date;

b.any accrued but unpaid PTO through the Termination Date;

c.any nonforfeitable benefits payable to Executive under the terms of any deferred compensation, incentive or other benefit plans maintained by the Company, payable in accordance with the terms of the applicable plan; and

d.any expenses owed to Executive under Section 4(d) of the Employment Agreement.

3.PAYMENTS FOLLOWING RESIGNATION.  The following payments (to which Executive would not otherwise be entitled) are being offered in consideration for Executive’s execution and delivery of this Agreement, including the release attached hereto as Exhibit A (the “Release”), and it becoming effective on or before November 2, 2017, and are subject to Executive’s compliance with the covenants and other obligations set forth in Sections 5(a), 5(b), 5(c), 5(d) and 5(e) of this Agreement and Sections 9 and 10 of the Employment Agreement, all of which must be satisfied in full in order for the payments set forth below in this Section 3 to be earned.  Notwithstanding the foregoing, any benefits payable under the 2017-2019 Long-Term Incentive Program shall be governed by the terms of such Program and the separate form of Waiver and Release of Claims required thereunder, which is attached hereto as Exhibit B. 

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a.a series of semi-monthly severance payments for the period commencing immediately following the Termination Date and concluding on January 31, 2019 (the “Severance Period”), each semi-monthly payment in an amount equal to one-twenty fourth (1/24th) of $1,355,382 (i.e., the sum of (i) Executive’s Base Compensation, as in effect on the Termination Date, which is $510,000, and (ii) the greater of (A) the annual bonus paid to Executive for the last fiscal year preceding the Termination Date, or (B) a minimum bonus equal to thirty-five percent (35%) of Executive’s Base Compensation, which greater amount is $845,382). Notwithstanding the foregoing, for the period between the Termination Date and October 15, 2017, this amount will be prorated by multiplying such amount by 0.80;

b.a pro-rated portion of the annual bonus that Executive would have earned for 2017 if Executive had remained employed for the entire year, based on the number of days in 2017 that have elapsed as of the Termination Date, payable at the time that the Company pays bonuses to its executive officers for 2017 (for the avoidance of doubt, the individual performance component of this annual bonus will be scored at the mid-point between Executive’s threshold and target amount); 

c.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 Executive shall have the right to exercise such stock options during a period of ninety (90) days following the Termination Date (the “90 Day Period”) as provided in the agreements documenting the terms of Executive’s outstanding stock options.  With respect to such outstanding stock options, in the event that the Company determines, in accordance with the terms of the Company’s Insider Trading Policy (the “Policy”) that the trading window shall be closed to Executive during the entire 90 Day Period such that Executive is prohibited under the Policy from selling any Option Shares (as defined below) during the entire 90 Day Period, the Company shall extend the 90 Day Period for an additional five (5) trading days, beginning on the first day that the Executive could sell any Option Shares without violating the Policy (the “Extended Period”).  The term “Option Shares” shall mean shares of the Company’s common stock acquired upon the exercise by Executive of an outstanding stock option on or after the Termination Date and during the 90 Day Period.  For the avoidance of doubt, (i) there shall be no Extended Period except under the circumstances described above in this Section 3(c), and (ii) the Company shall have no obligation to Executive other than to notify him while he remains subject to the Policy when the trading window for trading the Company’s common stock in accordance with the Policy opens or closes.

d.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; and

e.continued coverage under any group health plan maintained by the Company in which Executive participated as of the Termination Date through January 31, 2019, or until, if earlier, the date Executive obtains comparable coverage under benefit plans maintained by a new employer, at an after-tax cost to Executive comparable to the cost that Executive would have incurred for the same coverage had he remained employed during such period; provided, however, that the benefit set forth in this Section 3(e) (i) will be treated as taxable income to Executive and (ii) is contingent on Executive’s timely election of continuation coverage as provided under the Consolidated Omnibus Budget Reconciliation Act of 1986, as set forth in Sections 601-609 of the Employee Retirement Income Security Act of 1974, as amended. 

Executive represents that Exhibit C is a correct and complete list of all of Executive’s outstanding stock options, restricted stock, restricted stock units or other equity based awards with time-based vesting or performance-based vesting.

The pro-rated bonus payable pursuant to subsection (b) shall be paid after the Compensation Committee has approved bonuses payable for the 2017 calendar year.  All payments to be made, vesting restrictions to be lifted, or settlements to occur pursuant to subsections (c) and (d) (excluding stock options) shall be made to Executive on the first business day following the date that is sixty (60) days following the Termination Date (except as otherwise expressly provided in the applicable award agreement).  The payments set forth in subsection (a) shall commence on the 60th day following the Termination Date and conclude no later than January 31, 2019, with the first payment including all amounts accrued to date.

4.CONDITIONS OF PAYMENTS.

a.If this Agreement does not become effective and irrevocable by its terms on or before November 2, 2017, the Company will have no obligation to make the payments set forth in Section 3 of this Agreement. 

b.If Executive violates any of his obligations, covenants or representations under Section 5(a), 5(b), 5(c), 5(d) or 5(e) of this Agreement, then (i) the Company’s obligations to provide the payments under Section 3 of this Agreement will immediately

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cease, (ii) Executive shall be obligated to return to the Company any compensation paid or provided to Executive pursuant to Section 3 of this Agreement, and (iii) the Company will be entitled to obtain all other remedies provided by law or in equity.

5.COVENANTS BY EXECUTIVE.  

a.Protection of Confidential Information.  Executive hereby agrees that 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).  Executive further agrees that, upon the Termination Date, all Confidential Information in his possession that is in written or other tangible form shall be returned to the Company and shall not be retained by Executive or furnished to any third party, in any form except as provided herein.  Notwithstanding the foregoing, this Section 5(a) shall not apply to Confidential Information that (i) was publicly known at the time of disclosure to 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 Company by Executive, (iii) is lawfully disclosed to 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 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 Executive as a consequence of or through Executive’s relationship with the Company, in any form, including electronic media.  Confidential Information also includes, but is not limited to, the Company’s business plans and financial information, marketing plans, and business opportunities.  Nothing herein shall limit in any way any obligation Executive may have relating to Confidential Information under any other agreement or promise to the Company.

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 Executive and whether compiled by the Company, and/or 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 Company to maintain the secrecy of such information, that such information is the sole property of the Company and that any retention and use of such information by Executive during his employment with the Company (except in the course of performing his duties and obligations to the Company) or after the Termination Date shall constitute a misappropriation of the Company’s trade secrets.

Executive agrees that Confidential Information gained by Executive during Executive’s association with the Company, has been developed by the Company through substantial expenditures of time, effort and money and constitutes valuable and unique property of the Company.  Executive recognizes that because his work for the Company brought him into contact with confidential and proprietary information of the Company, the restrictions of this Section 5(a) are required for the reasonable protection of the Company and its investments.  Executive further understands and agrees that the foregoing makes it necessary for the protection of the Company’s business that Executive not compete with the Company for a reasonable period after the Termination Date, as further provided in Section 5(b).

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, Executive agrees that if such a charge or complaint is made, 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.

Executive affirms that Executive has not divulged any proprietary or confidential information of the Company and will continue to maintain the confidentiality of such information consistent with the Company’s policies and Executive’s agreement(s) with the Company and/or common law.  Executive further affirms that Executive is not aware of and has not reported any allegations of wrongdoing by the Company 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 Company or its officers or directors, including any allegations of corporate fraud.

b.Non-Competition.  Executive hereby agrees that he will not at all during the Severance Period (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

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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.  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 Company engaged in a competitive business shall not be deemed to be engaging in competitive business activities.  For the avoidance of doubt, the payment of cash severance set forth in Section 3(a), as well as the provision of continued coverage under any group health plan set forth in Section 3(e), to the extent not terminated sooner as set forth in Section 3(e), shall run through the Restricted Period. Nonetheless, all severance benefits set forth in Section 3 are subject to the Conditions of Payment set forth in Section 4. 

c.Non-Solicit of Employees. 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 Company or any subsidiary or affiliate.

d.Non-Disparagement. 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 Company, 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 Company.  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 Company, its affiliates or any of its officers or directors.

e.Return of Company Materials.  

i.Definition of Electronic Media Equipment and Electronic Media Systems.  For purposes of this Agreement, “Electronic Media Equipment” includes, but is not limited to, computers, external storage devices, thumb drives, handheld electronic devices, telephone equipment, and other electronic media devices. Additionally, “Electronic Media Systems” includes, but is not limited to, computer servers, messaging and email systems or accounts, and web-based services (including cloud-based information storage accounts), whether provided for Executive’s use directly by the Company or by third-party providers on behalf of the Company.

ii.Return of Company Property. Executive understands and agrees that anything that he created or worked on for the Company while working for the Company belongs solely to the Company and that Executive cannot remove, retain, or use such information without the Company’s express written permission. Accordingly, on or before the Termination Date, Executive will immediately deliver to the Company, and will not keep in his possession, recreate, or deliver to anyone else, any and all Company property, including, but not limited to, Confidential Information, all Company equipment including all Company Electronic Media Equipment, all tangible embodiments of Confidential Information, all electronically stored information and passwords to access such property, Company credit cards, records, data, notes, notebooks, lists, books, client contact information, reports, files, proposals, lists, correspondence, specifications, software, any other documents and property, and reproductions of any of the foregoing items, including, without limitation, those records maintained on a cloud storage network.

iii.Return of Company Information on Company Electronic Media Equipment.  Executive agrees that he has not and will not copy, delete, or alter any information, including personal information voluntarily created or stored, contained upon his Company Electronic Media Equipment prior to returning any information to the Company.

iv.Return of Company Information on Personal Electronic Media Equipment.  In addition, if Executive has used any personal Electronic Media Equipment or personal Electronic Media Systems to create, receive, store, review, prepare or transmit any Company information, including but not limited to, Confidential Information, Executive agrees, on or before the Termination Date, to make a prompt and reasonable search for such information in good faith, including reviewing any personal Electronic Media Equipment or personal Electronic Media Systems to locate such information and if he locates such information, he agrees to notify the Company of that fact and then provide the Company with a computer-useable copy of all such Company information from those equipment and systems or a reasonable opportunity to create such a copy; and he agrees to cooperate reasonably with the Company to verify that the necessary copying is completed (including upon request providing a sworn declaration confirming the return of property and deletion of information), and, upon confirmation of compliance by the Company, he agrees to delete and expunge all Company information.

v.Breach of Section 5(e).  To the extent the Company reasonably believes there is a breach of Section 5(e) and to the extent such breach of Section 5(e) is curable, the Company will give Executive written notice of such breach and a period

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of not less than five (5) business days to substantially cure the same.  Additionally, to the extent Executive determines he is in breach of Section 5(e), he shall notify the Company and substantially cure such breach within five (5) business days of determining such breach.  If Executive substantially cures the breach discussed in this Section 5(e)(v) within such cure period, he will be deemed to be in compliance with Section 5(e). 

f.While employed by the Company and during the Restricted Period, Executive will communicate the contents of this Section 5 to any person, firm, association, partnership, corporation or other entity that Executive intends to be employed by, associated with, or represent.

g.For the avoidance of doubt, any breach of Section 5(a) through 5(e) of this Agreement, inclusive, shall constitute a material breach of this Agreement.  Notwithstanding Section 6 of this Agreement, the parties agree that it would be difficult to fully compensate the Company for damages resulting from the breach or threatened breach of the covenants set forth in Sections 5(a) through 5(e) of this Agreement and accordingly agree that the Company shall be entitled to temporary and injunctive relief, including temporary restraining orders, preliminary injunctions and permanent injunctions, or to obtain specific performance, 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 Company’s right to claim and recover damages.

6.ARBITRATION.  Subject to Section 5(g) hereof, all claims, disputes, questions, or controversies arising out of or relating to this Agreement or Executive’s employment with the Company, including without limitation the construction or application of any of the terms, provisions, or conditions of this Agreement and any claims for any alleged discrimination, harassment, or retaliation in violation of any federal, state or local law, will be resolved exclusively in final and binding arbitration held under the auspices of the American Arbitration Association (“AAA”) and shall be conducted in accordance with the National Rules for the Resolution of Employment Disputes, or successor rules then in effect. The arbitration will be held in New York, New York, and will be conducted and administered by AAA or, in the event AAA does not then conduct arbitration proceedings, a similarly reputable arbitration administrator. Executive and the Company will select a mutually acceptable, neutral arbitrator from among the AAA panel of arbitrators.  Except as provided by this Agreement, the Federal Arbitration Act will govern the administration of the arbitration proceedings. The arbitrator will apply the substantive law (and the law of remedies, if applicable) of the State of Ohio, or federal law, if Ohio law is preempted, and the arbitrator is without jurisdiction to apply any different substantive law. Executive and the Company will each be allowed to engage in adequate discovery, the scope of which will be determined by the arbitrator consistent with the nature of the claim[s] in dispute. The arbitrator will have the authority to entertain a motion to dismiss and/or a motion for summary judgment by any party and will apply the standards governing such motions under the Federal Rules of Civil Procedure. The arbitrator will render a written award and supporting opinion that will set forth the arbitrator’s findings of fact and conclusions of law. Judgment upon the award may be entered in any court of competent jurisdiction. The Company will pay the arbitrator’s fees, as well as all administrative fees, associated with the arbitration. Each party will be responsible for paying its own attorneys’ fees and costs (including expert witness fees and costs, if any), provided, however, that the arbitrator may award attorney’s fees and costs to the prevailing party, except as prohibited by law. The existence and subject matter of all arbitration proceedings, including, any settlements or awards there under, shall remain confidential. In entering into this Agreement, both parties are waiving the right to a trial by judge or jury.

7.SECTION 409A.

a.This Agreement is intended to comply with Section 409A of the Code and will be administered and interpreted in a manner intended to comply with Code Section 409A.  Any provision that would cause this Agreement or any payment hereof to fail to satisfy Code Section 409A of the Code shall have no force or effect until amended to the minimum extent required to comply with Code Section 409A, which amendment may be retroactive to the extent permitted by Code Section 409A.  A termination of employment shall not be deemed to have occurred for purposes of any provision of this Agreement providing for the payment of amounts or benefits that may be considered “deferred compensation” under Code Section 409A (after taking into account all exclusions applicable to such payments or benefits under Code Section 409A) upon or following a termination of employment unless such termination is also a “Separation from Service” within the meaning of Code Section 409A and, for purposes of any such provision of this Agreement, references to a “retirement,” “termination,” “termination of employment” or like terms shall mean Separation from Service. 

b.Any payment scheduled to be made under this Agreement that may be considered “deferred compensation” under Code Section 409A (after taking into account all exclusions applicable to such payments or benefits under Code Section 409A), that are otherwise due on or within the six-month period following the Termination Date will accrue during such six-month period and will instead become payable in a lump sum payment on the first business day period following such six-month period.  Furthermore, if any other payments of money or other benefits due to Executive under this Agreement could cause the application of an accelerated or

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additional tax under Code Section 409A, such payments or other benefits shall be deferred if deferral will make such payment or other benefits compliant under Code Section 409A, or otherwise such payment or other benefits shall be restructured, to the extent possible, in a manner, determined by the Company, that does not cause such an accelerated or additional tax.  To the extent any reimbursements or in-kind benefits due to Executive under this Agreement constitute “deferred compensation” under Code Section 409A (after taking into account all exclusions applicable to such payments or benefits under Section 409A), any such reimbursements or in-kind benefits shall be paid to Executive in a manner consistent with Treas. Reg. Section 1.409A-3(i)(1)(iv).  

c. Notwithstanding any contrary provision herein, Executive’s right to any payment (including each installment payment) under this Agreement shall be treated as a “separate payment” within the meaning of Code Section 409A.   

d.The Company shall consult with Executive in good faith regarding the implementation of the provisions of this Section 7; provided that the Company shall not have any liability to Executive with respect thereto absent a breach by the Company of this Section 7 and the Company’s employees or representatives shall not have any liability to Executive with respect thereto. 

8.COOPERATION.  To the extent reasonably requested by the CEO of the Company or the Board of Directors of the Company, Executive shall cooperate with the Company in connection with matters arising out of Executive’s service to the Company; provided that, the Company shall make reasonable efforts to minimize disruption of Executive’s other activities.  The Company shall reimburse Executive for reasonable expenses incurred in connection with such cooperation.

9.NO ADMISSION OF LIABILITY.  Nothing in this Agreement will constitute or be construed in any way as an admission of any liability or wrongdoing whatsoever by the Company or Executive.

10.PAYMENT OF SALARY AND RECEIPT OF ALL BENEFITS.  Executive acknowledges and represents that, other than the consideration set forth or otherwise referenced in this Agreement, the Company has paid or provided all salary, wages, bonuses, accrued vacation, PTO, premiums, leaves, housing allowances, relocation costs, interest, severance, outplacement costs, fees, reimbursable expenses, commissions, stock, stock options, vesting, and any and all other benefits and compensation due to Executive.

11.INTEGRATED AGREEMENT.  This Agreement, including the Release attached as Exhibit A, is intended by the parties to be a complete and final expression of their rights and duties respecting the subject matter of this Agreement and supersedes all prior agreements, promises, covenants, arrangements, communications, representations or warranties, whether oral or written, by any officer, employee or representative of any party hereto, and any prior agreement of the parties hereto in respect of the subject matter contained herein, including but not limited to the Employment Agreement, except as expressly set forth herein (e.g., treatment of certain equity awards pursuant to the applicable plans, awards and other operative documents per Section 3(d) hereof or survival of the Employment Agreement per Section 1(b) hereof). Except as expressly provided herein, nothing in this Agreement is intended to negate Executive’s agreement to abide by the Company’s policies while serving as an employee of the Company (or thereafter to the extent provided by such policies), including but not limited to the Company’s Code of Business Conduct and Ethics and its Employee Handbook, or any other agreement governing the disclosure and/or use of proprietary information, which Executive signed while working with the Company or its predecessors; nor to waive any of Executive’s obligations under state and federal trade secret laws.

12.TAXES AND OTHER WITHHOLDINGS.  Notwithstanding any other provision of this Agreement, the Company may withhold from amounts payable hereunder all federal, state, local and foreign taxes and other amounts that are required to be withheld by applicable laws or regulations, and the withholding of any amount shall be treated as payment thereof for purposes of determining whether Executive has been paid amounts to which he is entitled.  Executive acknowledges that (i) the Company has made no representation to Executive as to the tax treatment of any compensation or benefits to be paid to Executive under this Agreement and (ii) the Company has no obligation to “gross-up” any amount payable to Executive under this Agreement for taxes payable by Executive thereon.

13.SURVIVAL.  Except as mutually agreed in writing in accordance with Section 15 below, the covenants, agreements, representations and warranties contained in or made in Section 4, 5, 6, 8, 9, 10, 11, 15 and this Section 13 of this Agreement shall survive any termination of this Agreement.

14.WAIVER.  Neither party shall, by mere lapse of time, without giving notice or taking other action hereunder, be deemed to have waived any breach by the other party of any of the provisions of this Agreement. Further, the waiver by either party of a particular breach of this Agreement by the other shall neither be construed as, nor constitute, a continuing waiver of such breach or of other breaches of the same or any other provision of this Agreement.

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15.MODIFICATION.  This Agreement may not be modified or terminated unless such modification or termination is embodied in writing, signed by the party against whom the modification is to be enforced.

16.NOTICE.  Except as otherwise expressly provided in this Agreement, any notice to either party 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 Company:

Welltower Inc.

4500 Dorr Street

Toledo, OH  43615

Attention:  Legal Department

                If to the Executive, at the address on file with the Company’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.

17.ASSIGNMENT AND SUCCESSORS.   The Company shall have the right to assign its rights and obligations under this Agreement to an entity that, directly or indirectly, acquires all or substantially all of the assets or the business of the Company.  The rights and obligations of the Company under this Agreement shall inure to the benefit and shall be binding upon the successors and assigns of the Company. Executive shall not have any right to assign his obligations under this Agreement and shall only be entitled to assign his rights under this Agreement upon his death (in which case any payments or benefits provided hereunder will be provided to his designated beneficiary or, if no such beneficiary has been designated, to his estate), solely to the extent permitted by this Agreement, or as otherwise agreed to by the Company.

18.SEVERABILITY.  Each provision of this Agreement shall be interpreted in such manner as to be effective and valid under applicable law, but if any provision of this Agreement is held to be prohibited by or invalid under applicable law, such provision will be ineffective only to the extent of such prohibition or invalidity, without invalidating the remainder of such provision or the remaining provisions of this Agreement. Moreover, if any of the provisions contained in this Agreement is determined by an arbitrator or court of competent jurisdiction to be unenforceable because it is excessively broad in scope, whether as to duration, activity, geographic application, subject or otherwise, it shall be construed, by limiting or reducing it to the extent legally permitted, so as to be enforceable to the extent compatible with then applicable law in order to achieve the intent of the parties.

19.GOVERNING LAW.  This Agreement will be construed, interpreted, governed and enforced in accordance with the laws of the State of Ohio, without regard to its conflict of laws principles.

20.COUNTERPARTS.   This Agreement may be executed in counterparts and delivered by means of facsimile or portable document format (PDF), each of which when so executed and delivered shall be an original, but all such counterparts together shall constitute one and the same instrument.

[Signature Page Follows] 

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

WELLTOWER INC.                                                        EXECUTIVE

By: /s/ Matthew McQueen                                                /s/ Scott A. Estes                                                 

Name:    Matthew McQueen                                            Scott A. Estes

Title:  Senior Vice President,

General Counsel and Corporate Secretary

Date: October 3, 2017                                                        Date: October 3, 2017                                       

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Exhibit A

WAIVER AND RELEASE OF CLAIMS

This WAIVER AND RELEASE OF CLAIMS (this “Agreement”) is made by and between Welltower Inc. (the “Company”) and Scott A. Estes on behalf of himself and his agents, heirs, executors, administrators, successors and assigns (collectively referred to herein as “Executive”). 

1.General Release of Claims. 

1.1.General Release of All Claims.  In exchange for the payments and benefits provided by the Company under the Resignation Agreement between the Company and Executive, dated October 3, 2017 (the “Resignation Agreement”), which Executive acknowledges and agrees provides adequate consideration to which Executive would not otherwise be entitled, Executive unconditionally, knowingly and voluntarily releases, remises, and forever discharges the Company and any of its past or present subsidiaries, divisions, joint ventures, affiliates, related entities, predecessors, merged entities and parent entities, benefit plans, and all of their respective past and present officers, directors, stockholders, employees, partners, members, managers, owners, consultants and advisors, benefit plan administrators and trustees, agents, attorneys, insurers, representatives, affiliates and all of their respective successors and assigns (collectively, the “Company Released Parties”), from any and all claims, actions, causes of action, demands, obligations, grievances, suits, losses, debts and expenses (including attorney’s fees and costs), damages and claims in law or in equity of any nature whatsoever, known or unknown, suspected or unsuspected, Executive ever had, now has, or may ever have against any Company Released Party  up to and including the day on which Executive signs this Agreement.  Without limiting the generality of the foregoing, subject to Section 1.2 below, the claims Executive is waiving include, but are not limited to, (a) any claims, demands, and causes of action alleging violations of public policy, or of any federal, state, or local law, statute, regulation, executive order, or ordinance, or of any duties or other obligations of any kind or description arising in law or equity under foreign, federal, state, or local law, regulation, ordinance, or public policy having any bearing whatsoever on the terms or conditions of Executive’s employment with or by the Company or the termination or resignation of Executive’s employment with the Company or any association or transaction with or by the Company; (b) all claims of discrimination or harassment on the basis of age, sex, race, national origin, religion, sexual orientation, disability, veteran status or any other legally protected category; (c) all claims under Title VII of the Civil Rights Act of 1964, the Americans with Disabilities Act, the Age Discrimination in Employment Act, the Older Workers Benefit Protection Act, the Fair Labor Standards Act, the Genetic Information Nondiscrimination Act, 42 U.S.C. § 1981, and all other federal, state and local fair employment and anti-discrimination laws, all as amended, including without limitation the Ohio Civil Rights Act, O.R.C. § 4112.01 et seq., the Ohio Age Discrimination in Employment Act, O.R.C. § 4112.14, the Ohio Uniformed Services Employment and Reemployment Act, O.R.C. §§ 5903.01, 5903.02; (d) all claims under the Worker Adjustment and Retraining Notification Act and similar state and local statutes, all as amended; (e) all claims under the National Labor Relations Act, as amended; (f) all claims under the Family and Medical Leave Act and other federal, state and local leave laws, all as amended; (g) all claims under the Employment Retirement Income Security Act, as amended (except with respect to accrued vested benefits under any retirement or 401(k) plan in accordance with the terms of such plan and applicable law); (h) all claims under the False Claims Act, the Securities Exchange Act of 1934, the Commodity Exchange Act, the Consumer Financial Protection Act, the American Recovery and Reinvestment Act, the Foreign Corrupt Practices Act, and the EU Competition Law, all as amended; (i) all claims of whistleblowing and retaliation under federal, state and local laws, including without limitation the Ohio Whistleblower Protection Act, O.R.C. § 4113.51 et. seq., Ohio statutory provisions regarding retaliation/discrimination for pursuing a workers compensation claim; (j) all claims under the Ohio Minimum Fair Wages Act, O.R.C. §  4111.01 et seq.; (k) all claims under the Ohio Wage Payment Act, O.R.C. §  4113.15; (l) all claims under any principle of common law or sounding in tort or contract; (m) all claims concerning any right to reinstatement; (n) all claims under the Immigration Reform and Control Act; (o) all claims under the Fair Credit Reporting Act; (p) all claims under The Equal Pay Act; (q) all claims for attorneys’ fees, costs, damages or other relief (monetary, equitable or otherwise), whether under foreign, federal, state or local law, whether statutory, regulatory or common law, to the fullest extent permitted by law; and (r) all claims under any policy, agreement, contract, understanding or promise, written or oral, formal or informal, between any of the Company Released Parties and Executive.  Further, each of the persons and entities released herein is intended to and shall be a third-party beneficiary of this Agreement.  

1.2.Claims Not Released.  This release of claims does not affect or waive: (a) benefits and/or the right to seek benefits under applicable workers’ compensation and/or unemployment compensation statutes; (b) any claims Executive may have for his own vested accrued employee benefits under the terms of the Company’s health, welfare, or retirement benefit plans as of Executive’s last day of employment with the Company; (c) any right to pursue claims which by law cannot be waived by signing this Agreement; (d) Executive’s rights to indemnification under any indemnification agreement he has with the

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Company or any other Company Released Party and/or under the Company’s or any Company Released Party’s charter or bylaws, or to whatever coverage Executive may have under the Company’s or any Company Released Party’s directors’ and officers’ insurance policy for acts and omissions when Executive was an officer or director of the Company or of any Company Released Party; or (e) Executive’s right to enforce this Agreement and the Resignation Agreement (including, for the avoidance of doubt, his rights with respect to the equity awards described in Exhibit C of the Resignation Agreement).

1.3.Government Agencies.  Notwithstanding any other provision in this Agreement to the contrary, 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, Executive agrees that if such a charge or complaint is made, 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.

1.4.Collective/Class Action Waiver.  If any claim is not subject to release, to the extent permitted by law, Executive waives any right or ability to be a class or collective action representative or to otherwise participate in any putative or certified class, collective or multi-party action or proceeding based on such a claim in which the Company or any other Company Released Party is a party.

1.5.Release of Unknown Claims. Executive intends that this release of claims cover all claims described above, whether or not known to Executive.  Executive further recognizes the risk that, subsequent to the execution of this Agreement, Executive may incur loss, damage or injury which Executive attributes to the claims encompassed by this release.  Executive also expressly waives and relinquishes, to the fullest extent permitted by law, any and all rights he may have under California Civil Code Section 1542, or the comparable provisions of the laws of any other jurisdiction, which provides as follows:

“A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE CREDITOR DOES NOT KNOW OR SUSPECT TO EXIST IN HIS FAVOR AT THE TIME OF EXECUTING THE RELEASE, WHICH IF KNOWN BY HIM MUST HAVE MATERIALLY AFFECTED HIS SETTLEMENT WITH THE DEBTOR.”

2.Acknowledgments and Affirmations.

2.1.Executive affirms that Executive has not filed, caused to be filed, or presently is a party to any claim against any Company Released Party.  Executive also represents and warrants that there has been no assignment or other transfer of any interest in any claim by Executive that is covered by the release set forth in Section 1. 

2.2.Executive affirms that (a) except for the benefits referred to in Section 1.2(b) above, Executive has been paid and/or has received all compensation, wages, bonuses, commissions, and/or benefits which are considered earned and therefore due and payable as of the date Executive signs this Agreement; (b) Executive has been granted any leave to which Executive was entitled under the Family and Medical Leave Act or related state or local leave or disability accommodation laws; (c) Executive has no known workplace injuries or occupational diseases; (d) Executive has not been retaliated against for reporting any allegations of wrongdoing by the Company or its officers; (e) Executive has not been prohibited, restricted or otherwise interfered with by any Company Released Party from communicating with any Governmental Agency as described in Section 1.3 above; and (f) all of the Company’s decisions regarding Executive’s pay and benefits through the date of Executive’s execution of this Agreement were, to Executive’s knowledge,  not discriminatory based on age, sex, race, national origin, religion, sexual orientation, disability, veteran status or any other classification protected by law.

2.3. Executive hereby represents and warrants that he has not breached any of his obligations under Sections 9 and 10 of the Third Amended and Restated Employment Agreement between Executive and the Company, dated June 16, 2017, as well as the obligations under Section 5 of the Resignation Agreement and hereby ratifies and affirms such obligations, which shall continue in full force and effect in accordance with their terms.  

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3.No Admission of Wrongdoing.  Executive and the Company agree that neither this Agreement nor the furnishing of the consideration for this Agreement shall be deemed or construed at any time for any purpose as an admission by any Company Released Party of wrongdoingor evidence of any liability or unlawful conduct of any kind.

4.Consultation with Attorney; Voluntary Agreement.  The Company hereby advises Executive to consult with an attorney of his choosing prior to signing this Agreement.  Executive understands and agrees that Executive has the right and has been given the opportunity to review this Agreement with an attorney.  Executive acknowledges and agrees that the payments and benefits provided by the Company under the terms of the Resignation Agreement are sufficient consideration to require him to comply with his obligations under this Agreement.  Executive represents that he has read this Agreement and understands its terms and that he enters into this Agreement freely, voluntarily, and without coercion. Except as otherwise provided in Section 1.2, EXECUTIVE, FREELY AND KNOWINGLY, AND AFTER DUE CONSIDERATION, ENTERS INTO THIS AGREEMENT INTENDING TO WAIVE, SETTLE AND RELEASE ALL CLAIMS EXECUTIVE HAS OR MIGHT HAVE AGAINST EACH AND EVERY COMPANY RELEASED PARTY AS OF THE DATE OF EXECUTION OF THIS AGREEMENT.

5.Effective Date; Revocation.  Executive acknowledges and agrees that: (a) Executive has been given at least twenty-one (21) days during which to review and consider the provisions of this Agreement, although he may at his discretion, knowingly and voluntarily, sign and return the Agreement at any earlier time, but Executive may not sign and return the Agreement until on or after his last day of employment with the Company; (b) modification of this Agreement does not restart this twenty-one (21)-day consideration period; (c) Executive is waiving rights or claims which may be waived by law in exchange for consideration that is not otherwise due to Executive, including claims and rights under the Age Discrimination in Employment Act of 1967, as amended (the “ADEA”), and as otherwise described in this Agreement; (d) rights or claims that may arise after the date this Agreement is executed, including those arising under the ADEA, are not waived by this Agreement; (e) at any time within seven (7) days after signing this Agreement, Executive may revoke this Agreement; and (f) this Agreement is not enforceable until the revocation period has passed without a revocation.

To revoke this Agreement, Executive must send a written statement of revocation delivered by certified mail to Welltower Inc., Attn:  Chief Executive Officer, 4500 Dorr Street, Toledo, OH  43615.  This revocation must be received no later than the seventh (7th) day following Executive’s execution of this Agreement. If no such revocation occurs, this Agreement shall become effective on the eighth (8th) day following execution of this Agreement.

In the event that Executive revokes this Agreement, it shall have no force or effect, and Executive shall have no right to receive or retain any payments and benefits provided by the Company under the terms of the Resignation Agreement.

6.Severability.  In the event that any one or more of the provisions of this Agreement shall be held to be invalid, illegal or unenforceable, the validity, legality and enforceability of the remainder of the Agreement shall not in any way be affected or impaired thereby.

7.Waiver.  No waiver by either party of any breach by the other party of any condition or provision of this Agreement to be performed by such other party shall be deemed a waiver of any other provision or condition at the time or at any prior or subsequent time.  This Agreement and the provisions contained in it shall not be construed or interpreted for or against either party because that party drafted or caused that party’s legal representative to draft any of its provisions.

8.Governing Law.  This Agreement shall be construed in accordance with and governed by the laws of the State of Ohio, without regard to principles of conflict of laws of such state.

9.Headings.  All descriptive headings in this Agreement are inserted for convenience only and shall be disregarded in construing or applying any provision of this Agreement.

10.Counterparts.  This Agreement may be executed in counterparts, each of which shall be deemed an original but all of which together shall constitute one and the same instrument.

[signature page follows]

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IN WITNESS WHEREOF, this Agreement has been duly executed as of the dates written below.

Dated:  October 3, 2017	EXECUTIVE /s/ Scott A. Estes                                Name: Scott A. Estes
Dated:  October 3, 2017	WELLTOWER INC. By: /s/ Matthew McQueen                                         Name: Matthew McQueen Title:   Senior Vice President – General Counsel and Corporate Secretary

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Exhibit B

WAIVER AND RELEASE OF CLAIMS

UNDER THE 2017-2019 LONG-TERM INCENTIVE PROGRAM

This WAIVER AND RELEASE OF CLAIMS (this “Agreement”) is made by and between Welltower Inc. (the “Company”) and Scott A. Estes on behalf of himself or herself and his or her agents, heirs, executors, administrators, successors and assigns (collectively referred to herein as “Employee”). 

1.General Release of Claims. 

1.1.General Release of All Claims.  In exchange for the payments and benefits provided by the Company under the terms of the Welltower Inc. 2017-2019 Long-Term Incentive Program (the “Program”), which Employee acknowledges and agrees provide adequate consideration to which Employee would not otherwise be entitled, Employee unconditionally, knowingly and voluntarily releases, remises, and forever discharges the Company and any of its past or present subsidiaries, divisions, joint ventures, affiliates, related entities, predecessors, merged entities and parent entities, benefit plans, and all of their respective past and present officers, directors, stockholders, employees, partners, members, managers, owners, consultants and advisors, benefit plan administrators and trustees, agents, attorneys, insurers, representatives, affiliates and all of their respective successors and assigns (collectively, the “Company Released Parties”), from any and all claims, actions, causes of action, demands, obligations, grievances, suits, losses, debts and expenses (including attorney’s fees and costs), damages and claims in law or in equity of any nature whatsoever, known or unknown, suspected or unsuspected, Employee ever had, now has, or may ever have against any Company Released Party  up to and including the day on which Employee signs this Agreement.  Without limiting the generality of the foregoing, subject to Section 1.2 below, the claims Employee is waiving include, but are not limited to, (a) any claims, demands, and causes of action alleging violations of public policy, or of any federal, state, or local law, statute, regulation, executive order, or ordinance, or of any duties or other obligations of any kind or description arising in law or equity under foreign, federal, state, or local law, regulation, ordinance, or public policy having any bearing whatsoever on the terms or conditions of Employee’s employment with or by the Company or the termination or resignation of Employee’s employment with the Company or any association or transaction with or by the Company; (b) all claims of discrimination or harassment on the basis of age, sex, race, national origin, religion, sexual orientation, disability, veteran status or any other legally protected category; (c) all claims under Title VII of the Civil Rights Act of 1964, the Americans with Disabilities Act, the Age Discrimination in Employment Act, the Older Workers Benefit Protection Act, the Fair Labor Standards Act, the Genetic Information Nondiscrimination Act, 42 U.S.C. § 1981, and all other federal, state and local fair employment and anti-discrimination laws, all as amended, including without limitation the Ohio Civil Rights Act, O.R.C. § 4112.01 et seq., the Ohio Age Discrimination in Employment Act, O.R.C. § 4112.14, the Ohio Uniformed Services Employment and Reemployment Act, O.R.C. §§ 5903.01, 5903.02; (d) all claims under the Worker Adjustment and Retraining Notification Act and similar state and local statutes, all as amended; (e) all claims under the National Labor Relations Act, as amended; (f) all claims under the Family and Medical Leave Act and other federal, state and local leave laws, all as amended; (g) all claims under the Employee Retirement Income Security Act, as amended (except with respect to accrued vested benefits under any retirement or 401(k) plan in accordance with the terms of such plan and applicable law); (h) all claims under the Sarbanes-Oxley Act of 2002, the False Claims Act, the Dodd-Frank Wall Street Reform and Consumer Protection Act, the Securities Exchange Act of 1934, the Commodity Exchange Act, the Consumer Financial Protection Act, the American Recovery and Reinvestment Act, the Foreign Corrupt Practices Act, and the EU Competition Law, all as amended; (i) all claims of whistleblowing and retaliation under federal, state and local laws, including without limitation the Ohio Whistleblower Protection Act, O.R.C. § 4113.51 et. seq., Ohio statutory provisions regarding retaliation/discrimination for pursuing a workers compensation claim; (j) all claims under the Ohio Minimum Fair Wages Act, O.R.C. §  4111.01 et seq.; (k) all claims under the Ohio Wage Payment Act, O.R.C. §  4113.15; (l) all claims under any principle of common law or sounding in tort or contract; (m) all claims concerning any right to reinstatement; (n) all claims under the Immigration Reform and Control Act; (o) all claims under the Fair Credit Reporting Act; (p) all claims under The Equal Pay Act; (q) all claims for attorneys’ fees, costs, damages or other relief (monetary, equitable or otherwise), whether under foreign, federal, state or local law, whether statutory, regulatory or common law, to the fullest extent permitted by law; and (r) all claims under any policy, agreement, contract, understanding or promise, written or oral, formal or informal, between any of the Company Released Parties and Employee.  Further, each of the persons and entities released herein is intended to and shall be a third-party beneficiary of this Agreement.  

1.2.Claims Not Released.  This release of claims does not affect or waive: (a) benefits and/or the right to seek benefits under applicable workers’ compensation and/or unemployment compensation statutes; (b) any claims Employee may have for his or her own vested accrued employee benefits under the terms of the Company’s health, welfare, or retirement benefit plans as of

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Employee’s last day of employment with the Company; (c) any right to pursue claims which by law cannot be waived by signing this Agreement; (d) Employee’s rights to indemnification under any indemnification agreement he or she has with the Company or any other Company Released Party and/or under the Company’s or any Company Released Party’s charter or bylaws, or to whatever coverage Employee may have under the Company’s or any Company Released Party’s directors’ and officers’ insurance policy for acts and omissions when Employee was an officer or director of the Company or of any Company Released Party; or (e) Employee’s right to enforce this Agreement and the Resignation Agreement between the Company and Employee, dated October 3, 2017 (the “Resignation Agreement”) (including, for the avoidance of doubt, his rights with respect to the equity awards described in Exhibit C of the Resignation Agreement). 

1.3.Government Agencies.  Notwithstanding any other provision in this Agreement to the contrary, nothing contained in this Agreement limits Employee’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”). Employee further understands that this Agreement does not limit Employee’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, Employee agrees that if such a charge or complaint is made, Employee shall not be entitled to recover any individual monetary relief or other individual remedies.  This Agreement does not limit or prohibit Employee’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.

1.4.Collective/Class Action Waiver.  If any claim is not subject to release, to the extent permitted by law, Employee waives any right or ability to be a class or collective action representative or to otherwise participate in any putative or certified class, collective or multi-party action or proceeding based on such a claim in which the Company or any other Company Released Party is a party.

1.5.Release of Unknown Claims. Employee intends that this release of claims cover all claims described above, whether or not known to Employee.  Employee further recognizes the risk that, subsequent to the execution of this Agreement, Employee may incur loss, damage or injury which Employee attributes to the claims encompassed by this release.  Employee also expressly waives and relinquishes, to the fullest extent permitted by law, any and all rights he or she may have under California Civil Code Section 1542, or the comparable provisions of the laws of any other jurisdiction, which provides as follows:

“A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE CREDITOR DOES NOT KNOW OR SUSPECT TO EXIST IN HIS OR HER FAVOR AT THE TIME OF EXECUTING THE RELEASE, WHICH IF KNOWN BY HIM OR HER MUST HAVE MATERIALLY AFFECTED HIS OR HER SETTLEMENT WITH THE DEBTOR.”

2.Acknowledgments and Affirmations.

2.1.Employee affirms that Employee has not filed, caused to be filed, or presently is a party to any claim against any Company Released Party.  Employee also represents and warrants that there has been no assignment or other transfer of any interest in any claim by Employee that is covered by the release set forth in Section 1. 

2.2.Employee affirms that (a) except for the benefits referred to in Section 1.2(b) above, Employee has been paid and/or has received all compensation, wages, bonuses, commissions, and/or benefits which are considered earned and therefore due and payable as of the date Employee signs this Agreement; (b) Employee has been granted any leave to which Employee was entitled under the Family and Medical Leave Act or related state or local leave or disability accommodation laws; (c) Employee has no known workplace injuries or occupational diseases; (d) Employee has not been retaliated against for reporting any allegations of wrongdoing by the Company or its officers; (e) Employee has not been prohibited, restricted or otherwise interfered with by any Company Released Party from communicating with any Governmental Agency as described in Section 1.3 above; and (f) all of the Company’s decisions regarding Employee’s pay and benefits through the date of Employee’s execution of this Agreement were, to Employee’s knowledge, not discriminatory based on age, sex, race, national origin, religion, sexual orientation, disability, veteran status or any other classification protected by law.

2.3.Employee affirms and agrees that Employee has not divulged any proprietary or confidential information of the Companyand will continue to maintain the confidentiality of such information consistent with the Company’s policies and Employee’s agreement(s) with the Company and/or common law. Employee hereby represents and warrants that he or she has not breached

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any of his or her obligations under Section 4 of the Program and hereby ratifies and affirms such obligations, which shall continue in full force and effect in accordance with their terms.  Employee understands and agrees that upon any violation of the provisions of Section 4 of the Program, any and all payment or benefits under the Program shall immediately stop and Employee shall be obligated to return to the Company any amounts previously paid to Employee under the Program.

3.No Admission of Wrongdoing.  Employee and the Company agree that neither this Agreement nor the furnishing of the consideration for this Agreement shall be deemed or construed at any time for any purpose as an admission by any Company Released Party of wrongdoingor evidence of any liability or unlawful conduct of any kind.

4.Consultation with Attorney; Voluntary Agreement.  The Company hereby advises Employee to consult with an attorney of his or her choosing prior to signing this Agreement.  Employee understands and agrees that Employee has the right and has been given the opportunity to review this Agreement with an attorney.  Employee acknowledges and agrees that the payments and benefits provided by the Company under the terms of the Welltower Inc. 2017-2019 Long-Term Incentive Program are sufficient consideration to require him or her to comply with his or her obligations under this Agreement.  Employee represents that he or she has read this Agreement and understands its terms and that he or she enters into this Agreement freely, voluntarily, and without coercion. Except as otherwise provided in Section 1.2, EMPLOYEE, FREELY AND KNOWINGLY, AND AFTER DUE CONSIDERATION, ENTERS INTO THIS AGREEMENT INTENDING TO WAIVE, SETTLE AND RELEASE ALL CLAIMS EMPLOYEE HAS OR MIGHT HAVE AGAINST EACH AND EVERY COMPANY RELEASED PARTY AS OF THE DATE OF EXECUTION OF THIS AGREEMENT.

5.Effective Date; Revocation.  Employee acknowledges and agrees that: (a) Employee has been given at least twenty-one (21) days during which to review and consider the provisions of this Agreement, although he or she may at his or her discretion, knowingly and voluntarily, sign and return the Agreement at any earlier time, but Employee may not sign and return the Agreement until on or after his or her last day of employment with the Company; (b) modification of this Agreement does not restart this twenty-one (21)-day consideration period; (c) Employee is waiving rights or claims which may be waived by law in exchange for consideration that is not otherwise due to Employee, including claims and rights under the Age Discrimination in Employment Act of 1967, as amended (the “ADEA”), and as otherwise described in this Agreement; (d) rights or claims that may arise after the date this Agreement is executed, including those arising under the ADEA, are not waived by this Agreement; (e) at any time within seven (7) days after signing this Agreement, Employee may revoke this Agreement; and (f) this Agreement is not enforceable until the revocation period has passed without a revocation.

To revoke this Agreement, Employee must send a written statement of revocation delivered by certified mail to Welltower Inc., Attn:  Chief Executive Officer, 4500 Dorr Street, Toledo, OH  43615.  This revocation must be received no later than the seventh (7th) day following Employee’s execution of this Agreement. If no such revocation occurs, this Agreement shall become effective on the eighth (8th) day following execution of this Agreement.

In the event that Employee revokes this Agreement, it shall have no force or effect, and Employee shall have no right to receive or retain any payments and benefits provided by the Company under the terms of the Welltower Inc. 2017-2019 Long-Term Incentive Program.

6.Severability.  In the event that any one or more of the provisions of this Agreement shall be held to be invalid, illegal or unenforceable, the validity, legality and enforceability of the remainder of the Agreement shall not in any way be affected or impaired thereby.

7.Waiver.  No waiver by either party of any breach by the other party of any condition or provision of this Agreement to be performed by such other party shall be deemed a waiver of any other provision or condition at the time or at any prior or subsequent time.  This Agreement and the provisions contained in it shall not be construed or interpreted for or against either party because that party drafted or caused that party’s legal representative to draft any of its provisions.

8.Governing Law.  This Agreement shall be construed in accordance with and governed by the laws of the State of Ohio, without regard to principles of conflict of laws of such state.

9.Headings.  All descriptive headings in this Agreement are inserted for convenience only and shall be disregarded in construing or applying any provision of this Agreement.

10.Counterparts.  This Agreement may be executed in counterparts, each of which shall be deemed an original but all of which together shall constitute one and the same instrument.

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[signature page follows]

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IN WITNESS WHEREOF, this Agreement has been duly executed as of the dates written below.

Dated:  October 3, 2017	EMPLOYEE /s/ Scott A. Estes                                                  Name: Scott A. Estes
Dated:  October 3, 2017	WELLTOWER INC. By: /s/ Matthew McQueen                              Name: Matthew McQueen Title:   Senior Vice President – General Counsel and Corporate Secretary

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Exhibit C

EXISTING EQUITY AWARDS

EXISTING EQUITY AWARDS WITH TIME-BASED VESTING

1)            Restricted Stock

Date of Agreement	Initial Award	Unvested Shares as of Date of Agreement to be fully vested
February 7, 2013	24,028	4,805
February 5, 2015	11,380	2,845
February 12, 2016	14,982	7,490
February 26, 2016	43,068	14,356
TOTAL		29,496

2)            Stock Options

Date of Agreement		Initial Grant	Type of Grant	Exercise Price	Maximum Expiration Date	Options Outstanding*
January 27, 2011		2,033	ISO	$49.17	January 27, 2021	2,033
January 27, 2011		17,449	NSO	$49.17	January 27, 2021	17,449
January 26, 2012		1,744	ISO	$57.33	January 26, 2022	1,744
January 26, 2012		22,561	NSO	$57.33	January 26, 2022	22,561
	TOTAL					43,787

*All options are fully vested.

EXISTING EQUITY AWARDS WITH PERFORMANCE-BASED VESTING

1) 3-Year LTIP Shares

Pro rata payment in shares for any award earned under the 2015-2017 Long-Term Incentive Program, the 2016-2018 Long-Term Incentive Program, and the 2017-2019 Long-Term Incentive Program based on Company performance as of September 30, 2017, determined and prorated in accordance with the terms of the respective program. 

For the avoidance of doubt, for purposes of the 2015-2017 Long-Term Incentive Program, the 2016-2018 Long-Term Incentive Program, and the 2017-2019 Long-Term Incentive Program, Executive shall be deemed to have had a termination of employment by reason of a “Qualified Termination” on the Termination Date.

2) 3-Year LTIP – Dividend Accrual

The value of accrued dividend equivalents on shares to be issued under the 2015-2017 Long-Term Incentive Program and the 2016-2018 Long-Term Incentive Program from the beginning of each of the performance periods through October 3, 2017, and the 2017-2019 Long-Term Incentive Program from the beginning of the performance period through the date the Issuance Date (as defined in the 2017-2019 Long-Term Incentive Program), in accordance with the terms of the respective program.

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EX-10.2

 

EXHIBIT 10.2

welltower INC.

2017-2019 LONG-TERM INCENTIVE PROGRAM – BRIDGE 1

1.Purpose.  This 2017-2019 Long-Term Incentive Program (the “Program”) adopted pursuant to the Welltower Inc. 2016 Long-Term Incentive Plan (the “Equity Plan”) and any successor equity plan and is intended to provide an incentive for superior work and to motivate executives and employees of Welltower Inc. (the “Company”) toward even higher achievement and business results, to tie their goals and interests to those of the Company and its stockholders and to enable the Company to attract and retain highly qualified executives and employees.  The Program is for the benefit of Participants (as defined below). 

2.Definitions.  Capitalized terms used herein without definitions shall have the meanings given to those terms in the Equity Plan.  In addition, as used herein:

“All REIT Index” means the MSCI US REIT Index

“Annualized TSR Percentage” means (1*(1 + Cumulative TSR))^(1/2) - 1.

“Award” means a grant to a Participant hereunder.

“Award Notice” means the restricted stock unit award agreement with a Participant that sets forth the terms, conditions and limitations of the Participant’s participation in this Program, including, without limitation, the Participant’s Target Award and the Participant’s threshold, target, and high payout multiples.

“Cause” for termination of the Participant’s employment for purposes of Section 7 means (a) if the Participant is a party to an employment agreement with the Company immediately prior to such termination, and “Cause” is defined therein, then “Cause” shall have the meaning set forth in such employment agreement, or (b) if the Participant is not party to an employment agreement with the Company immediately prior to such termination or the Participant’s employment agreement does not define “Cause,” then “Cause” shall mean: (i) negligence or willful misconduct by the Participant in connection with the performance of his or her material duties as an employee of the Company or any Subsidiary; (ii) a breach by the Participant of any of his or her material duties as an employee of the Company or any Subsidiary, including but not limited to the provisions of Section 4 herein; (iii) conduct by the Participant against the material best interests of the Company or any Subsidiary, including but not limited to embezzlement or misappropriation of corporate assets, or a material act of statutory or common law fraud against the Company, any Subsidiary or the employees of either the Company or any Subsidiary; (iv) conviction for or plea of nolo contendere to any crime that is a felony, involves moral turpitude, or was committed in connection with the performance of Participant’s job responsibilities for the Company; (v) indictment of the Participant of a felony or a misdemeanor involving moral turpitude and such indictment has a material adverse effect on the interests or reputation of the Company or any Subsidiary; (vi) the intentional and willful failure by Participant to substantially perform his or her job responsibilities to the Company (other than any such failure resulting from Participant’s incapacity due to physical or mental disability) after a demand for substantial performance is made by the Company; (vii) the failure by Participant to satisfactorily perform his or her job responsibilities to the Company (other than any such failure resulting from Participant’s incapacity due to physical or mental disability); or (viii) a breach by Participant of any of the Company’s policies and procedures, including but not limited to the Company’s Code of Business Conduct & Ethics. 

“Change in Corporate Control” shall have the same meaning as set forth in Section 10.1(a) of the Equity Plan and Section 10.1(c) of the Equity Plan.  In addition, in order to qualify as a “Change in Corporate Control”, an event must also meet the requirements for a “change in the ownership or effective control of a corporation, or a change in the ownership of a substantial portion of the assets of a corporation” with the meaning of Treas. Reg. §1.409A-3(i)(5).

“Code” means the Internal Revenue Code of 1986, as amended.

“Common Stock” means the Company’s common stock, par value $1.00 per share, either currently existing or authorized hereafter.

“Common Stock Price” means, as of a particular date, the average of the Fair Market Value of one share of Common Stock over the 20 consecutive trading days ending on, and including such date (or if such date is not a trading day, the most recent trading day

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immediately preceding such date); provided that, if such date is the date upon which a Change in Corporate Control occurs, the Common Stock Price as of such date shall be equal to the fair value, as determined by the Committee, of the total consideration paid or payable in the transaction resulting in the Change in Corporate Control for one share of Common Stock.

“Cumulative TSR” means ((1*(1 + TSR Year 1)*(1 + TSR Year 2)) ‑ 1.

 “Disability” for termination of the Participant’s employment for purposes of Section 7 means (a) if the Participant is a party to an employment agreement with the Company immediately prior to such termination, and “Disability” is defined therein, then “Disability” shall have the meaning set forth in such employment agreement, or (b) if the Participant is not party to an employment agreement with the Company that defines “Disability,” then “Disability” shall have the same meaning as defined in the Equity Plan.

“Dividend Value” means the aggregate amount of dividends and other distributions paid on one Share for which the record date occurred on or after the first day of the Performance Period and prior to the final settlement date at which shares of Common Stock are issued to a Participant (excluding dividends and distributions paid in the form of additional Shares).

“Earned Award” means, with respect to a Participant, the actual number of shares of Common Stock that were earned by such Participant pursuant to this Program at the end of the Performance Period based on the achievement of the performance goals set forth in Section 5.

 “Equity Plan” means the Welltower Inc. 2016 Long-Term Incentive Plan, as amended from time to time.

“Fair Market Value” means, as of any given date, the fair market value of a security which shall be the closing sale price reported for such security on the principal stock exchange or, if applicable, any other national exchange on which the security is traded or admitted to trading on such date on which a sale was reported.  If there are no market quotations for such date, the determination shall be made by reference to the last date preceding such date for which  there are market quotations.

“Good Reason” for termination of the Participant’s employment for purposes of Section 7 means (a) if the Participant is a party to an employment agreement with the Company immediately prior to such termination, and “good reason” is defined therein, then “Good Reason” shall have the meaning set forth in such employment agreement, or (b) if the Participant is not party to an employment agreement with the Company immediately prior to such termination and/or the Participant’s employment agreement does not define “Good Reason”:  (i) a substantial adverse change, not consented to by the Participant, in the nature or scope of the Participant’s responsibilities, authorities, powers, functions, or duties; or (ii) a breach by the Company of any of its material obligations hereunder.  Unless otherwise provided in an employment agreement to which the Participant is a party immediately prior to such termination, to constitute “good reason termination,” the Participant must:  (1) provide written notice to the Company within 90 days of the initial existence of the event constituting “Good Reason;” (2) may not terminate his or her employment unless the Company fails to substantially remedy the event constituting “Good Reason” within 30 days after such notice has been given; and (3) the Participant must terminate employment with the Company no later than 30 days after the end of the 30-day period in which the Company fails to substantially remedy the event constituting “Good Reason.”

“Health Care REIT Index” means the NAREIT Health Care REIT Index (or a successor index including a comparable universe of publicly traded U.S. real estate investment trusts), in each case adjusted and reweighted to exclude the Company from the index.   As of the beginning of the Performance Period, the NAREIT Health Care REIT Index was comprised of Ventas, Inc, HCP, Inc., Omega Healthcare Investors, Senior Housing Properties Trust, Healthcare Trust of America, Inc., Healthcare Realty Trust, National Health Investors, Medical Properties Trust, Community Healthcare Trust, Inc., Care Capital Properties, Sabra Health Care REIT, LTC Properties, New Senior Investment Group, Physicians Realty Trust, Universal Health Realty Income, Care Trust REIT, Quality Care Properties, Inc., MedEquities Realty Trust, Inc., and Global Medical REIT.  Any health care REIT organization that is not in existence for the entire Performance Period shall be omitted from this index.

“Index Return” means, with respect to the Performance Period, the compounded annualized return of either the Health Care REIT Index, or the All REIT Index, as applicable, over the Performance Period expressed as a percentage.  For the avoidance of doubt, the intent of the Committee is that Index Return over the Performance Period be calculated in a manner designed to produce a fair comparison between the Company’s Annualized TSR Percentage and the Index Return for the purpose of determining Relative Performance.  In the case of the Health Care REIT Index, the Index Return shall be computed as the sum of each component company’s weighted TSR with each component company’s weight as the average of its relative market capitalization on dates that correspond to the beginning of each year of the Performance Period.

“Participant” means an executive or employee of the Company or any Subsidiary selected by the Compensation Committee to participate in the Program.

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“Performance Period” means the period commencing on January 1, 2017 and concluding on the earlier of (i) December 31, 2018, or (ii) a Change in Corporate Control.

“Program” means this Welltower Inc. 2017-2019 Long-Term Incentive Program, as amended from time to time.

“Qualified Termination” means termination of a Participant’s employment for Good Reason, by reason of the Participant’s death, Disability, by the Company without Cause, Retirement and in the case of a Participant who is party to an employment agreement with the Company, a non‑renewal by the Company of the term of such agreement.

“Relative Performance” means the Annualized TSR Percentage relative to the applicable Index Return.

“Retirement” means the voluntary termination of employment by a Participant after attaining age 55 and completing ten consecutive full years of service; provided, however, that the sum of the Participant’s age and consecutive full years of service to the Company shall be equal to 70 or more; and provided further that the Participant (a) delivers to the Company, so that the Company receives or is deemed to have received in accordance with Section 12(i) at least six months prior to the date of his or her retirement, written notice specifying such retirement date, (b) remains in the continuous service of the Company from the date the written notice is received until his or her retirement date, and (c) enters into a retirement agreement with the Company  in such form as shall be determined by the Company from time to time that includes both (i) a customary release of claims covering the Company and its affiliates, and (ii) an affirmation of continued compliance with the non-competition, non-solicitation, non-disparagement and non-disclosure covenants in favor of the Company and related persons as set forth in Section 4.

“Target Award” means a Participant’s target award, expressed as a number of restricted stock units, for the Performance Period, as set forth in the Participant’s Award Notice.

“Total Shareholder Return” or “TSR” means the compounded annual growth rate, expressed as a percentage (rounded to the nearest tenth of a percent (0.1%)) in the value per share of Common Stock during the Performance Period due to the appreciation in the price per share of Common Stock and dividends paid during the Performance Period, assuming dividends are reinvested.  Total Shareholder Return or TSR for any 12-month period shall be calculated as follows:  (i) the Common Stock Price at the end of the period plus dividends paid during the 12-month period divided by (ii) the Fair Market Value of the Common Stock at the beginning of the period, minus (iii) 1.  As set forth in, and pursuant to, Section 9 of this Agreement, appropriate adjustments to the Total Shareholder Return shall be made to take into account all stock dividends, stock splits, reverse stock splits and the other events set forth in Section 9 that occur during the Performance Period.

3.Administration 

(a)The Program shall be administered by the Compensation Committee in accordance with the Equity Plan.  The Compensation Committee shall have the discretionary authority to make all determinations (including, without limitation, the interpretation and construction of the Program and the determination of relevant facts) regarding the entitlement to any Award hereunder and the amount of any Award to be paid under the Program (including the number of shares of Common Stock issuable to any Participant), provided such determinations are not made in bad faith and are not inconsistent with the terms, purpose and intent of the Program.  The Compensation Committee may delegate to one or more officers or employees of the Company some or all of its authority to administer the Program as described in this Section 3, and in the event of such delegation, references to the Compensation Committee in this Section 3 shall apply in the same manner to such delegate or delegates to the extent of such delegated authority.  In particular, but without limitation and subject to the foregoing, the Compensation Committee shall have the authority:

(i)to select Participants under the Program in its sole discretion;

(ii)to determine the Target Award and any formula or criteria for the determination of the Target Award for each Participant and to determine the Earned Award;

(iii)to determine the terms and conditions, consistent with the terms of this Program, which shall govern Award Notices and all other written instruments evidencing an Award hereunder, including the waiver or modification of any such conditions;

(iv)to adopt, alter and repeal such administrative rules, guidelines and practices governing the Program as it shall from time to time deem advisable; and

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(v)to interpret the terms and provisions of the Program and any Award granted under the Program (and any Award Notices or other agreements relating thereto) and to otherwise supervise the administration of the Program.

(b)Subject to the terms hereof, all decisions made by the Compensation Committee in good faith pursuant to the Program shall be final, conclusive and binding on all persons, including the Company and the Participants.  No member of the Compensation Committee, and no officer or employee of the Company acting on behalf of the Compensation Committee, shall be personally liable for any action, determination, or interpretation taken or made in good faith with respect to this Program, and all members of the Compensation Committee and each and any officer or employee of the Company acting on their behalf shall, to the fullest extent not prohibited by law, be fully indemnified and protected by the Company in respect of any such action, determination or interpretation.

4.Conditions of Participation

As a condition of entitlement to participate in the Program, whether or not the Participant receives any payment or other benefit under the Program, each Participant shall comply with the following restrictive covenants.

(a)           Protection of Confidential Information.         Participant, both during employment with the Company and thereafter, 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 (as defined below) except as may be required for Participant to perform in good faith his or her job responsibilities to the Company while employed by the Company.  Upon Participant’s termination of employment, Participant shall return to the Company all Confidential Information and shall not retain any Confidential Information in Participant’s possession that is in written or other tangible form and shall not furnish any such Confidential Information to any third party, except as provided herein.  Notwithstanding the foregoing, this Section 4(a) shall not apply to Confidential Information that (i) was publicly known at the time of disclosure to Participant, (ii) becomes publicly known or available thereafter other than by any means in violation of this Section 4 or any other duty owed to the Company by Participant, (iii) is lawfully disclosed to Participant 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 Participant to disclose or make accessible any information or is voluntarily disclosed by Participant to law enforcement or other governmental authorities.  Furthermore, in accordance with the Defend Trade Secrets Act of 2016, Participant will not be held criminally or civilly liable under any federal or state trade secret law for the disclosure of a trade secret that (x) is made (i) in confidence to a federal, state or local government official, either directly or indirectly, or to an attorney; and (ii) solely for the purpose of reporting or investigating a suspected violation of law; or (y) is made in a complaint or other document filed in a lawsuit or other proceeding, if such filing is made under seal. As used in this Program, Confidential Information means, without limitation, any non-public confidential or proprietary information disclosed to Participant or known by Participant as a consequence of or through Participant’s relationship with the Company, in any form, including electronic media.  Confidential Information also includes, but is not limited to the Company’s business plans and financial information, marketing plans, and business opportunities. Nothing herein shall limit in any way any obligation Participant may have relating to Confidential Information under any other agreement, promise or duty to the Company.

(b)           Non-Competition.               In the course of the performance of Participant’s job responsibilities for the Company, Participant has obtained extensive and valuable knowledge and information concerning the Company’s business (including confidential information relating to the Company and its operations, intellectual property, assets, contracts, customers, personnel, plans, marketing plans, research and development plans and prospects).  Accordingly, during employment with the Company and for [one year]^[1] following Participant’s termination of employment, Participant will not engage in any business activities on behalf of any enterprise which competes with the Company or any of its affiliates in the business of (i) ownership or operation of Health Care Facilities (defined below); (ii) investment in or lending to health care related enterprises (including, without limitation, owners or developers of Health Care Facilities); (iii) management of Health Care Facilities; or (iv) provision of any planning or development services for Health Care Facilities. “Health Care Facilities” means any senior housing facilities or facilities used or intended primarily for the delivery of health care services, including, without limitation, any active adult communities, independent living facilities, assisted living facilities, skilled nursing facilities, inpatient rehabilitation facilities, ambulatory surgery centers, medical office buildings, hospitals of any kind, or any similar types of facilities or projects.  Participant will be deemed to be engaged in such competitive business activities if Participant participates in such a business enterprise as an employee, officer, director, consultant, agent, partner, proprietor, or other participant;

[1]               One year will be the duration of the non-competition period for SVPs and above.  For employees holding the title of Director, Assistant Vice President and Vice President, the duration will be six months.  For all other employees (i.e., Managers and below), the duration will be three months.

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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.

(c)           Non-Solicitation.  During employment with the Company and for one year following the end of Participant’s employment with the Company, Participant, to the fullest extent not prohibited by applicable law, directly or indirectly, individually or on behalf of any other person or entity, including Participant, will not encourage, induce, attempt to induce, recruit, attempt to recruit, solicit or attempt to solicit or participate in any way in hiring or retaining for employment, contractor or consulting opportunities anyone who is employed or providing full-time services as a consultant at that time by the Company or any subsidiary or affiliate of the Company.

(d)           Non-Disparagement.           At all times during and following Participant’s employment with the Company, Participant will not make or direct anyone else to make on Participant’s behalf any disparaging or untruthful remarks or statements, whether oral or written, about the Company, 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 Company.  Participant will not make any direct or indirect written or oral statements to the press, television, radio, on social media or to, on or through other media or other external persons or entities concerning any matters pertaining to the business and affairs of the Company, its affiliates or any of its officers or directors.  The restrictions described in this paragraph shall not apply to any truthful statements made in response to a subpoena or other compulsory legal process or to law enforcement or other governmental authorities.

(e)           Remedies.             For the avoidance of doubt, any breach of any of the provisions in this Section 4 shall constitute a material breach by Participant.  Notwithstanding any other provision of this Program, by becoming entitled to receive any payments or other benefits under this Program, Participant is deemed to have agreed that damages would be an inadequate remedy for the Company in the event of a breach or threatened breach by Participant of any of Sections 4(a) through 4(d), inclusive.  In the event of any such breach or threatened breach, and without relinquishing any other rights or remedies that the Company may have, including but not limited to the forfeiture or repayment by Participant of any payments or benefits otherwise payable or paid to Participant under this Program, the Company may, either with or without pursuing any potential damage remedies and without being required to post a bond, obtain from a court of competent jurisdiction, and enforce, an injunction prohibiting Participant from violating this Section 4 and requiring Participant to comply with its provisions.  The Company may present this Section 4 to any third party with which Participant may have accepted employment, or otherwise entered into a business relationship, that the Company contends violates this Section 4, if the Company has reason to believe Participant has or may have breached a provision of this Section 4.

5.Determination of Awards

(a)Each Participant’s Award Notice shall specify such Participant’s Target Award and threshold, target, and high payout multiples.

(b)The percentage of a Participant’s Target Award that may be earned for the Performance Period shall be determined as follows:  50 percent of the Target Award shall be earned based on the Company’s Relative Performance to the Health Care REIT Index; 30 percent of the Target Award shall be earned based on the Company’s Relative Performance to the All REIT Index; 20 percent of the Target Award shall be earned based on the Company’s Annualized TSR Percentage; all as further set forth on Exhibit A.

(c)Depending on the score for each of the performance goals as determined pursuant to Exhibit A, the Earned Award for the Performance Period shall be determined based on the Participant’s individual threshold, target and high payout multiples described in the Participant’s Award Notice.  

For performance between two different tiers, the percentage payable shall be calculated using interpolation between tiers. The level of achievement for each listed performance goal shall be determined independently.

Except as otherwise provided herein, the Earned Award shall be settled in shares of Common Stock upon satisfaction of the vesting requirements as set forth in Section 8.

6.Change in Corporate Control.  In the event that prior to December 31, 2018, a Change in Corporate Control occurs, then each outstanding Award will be deemed earned as of the date of such Change in Corporate Control in accordance with the computation described in Section 5(b) as if the Performance Period ended on the day prior to the consummation of the Change in Corporate Control, but each Award shall further be multiplied by a fraction, the numerator of which shall be the number of full and partial months from the beginning of the Performance Period through the Change in Corporate Control and the denominator of which

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shall be 24.  Notwithstanding Sections 4 and 8(b), any shares of Common Stock issued to satisfy such outstanding Earned Awards shall be fully vested and nonforfeitable.

7.Termination of Participant’s Employment. 

(a)If a Participant’s employment with the Company terminates, the provisions of this Section 7 shall govern the treatment of the Participant’s Award exclusively, regardless of the provisions of any employment, change in control or other agreement or arrangement to which the Participant is a party, or any termination or severance policies of the Company then in effect, which shall be superseded by this Program.

(b)In the event of termination of a Participant’s employment by reason of a Qualified Termination prior to the end of the Performance Period, then the Compensation Committee shall determine the Participant’s Earned Award in accordance with the computation described in Section 5(b) as if the Performance Period ended on the calendar quarter end immediately preceding the date of the Participant’s Qualified Termination; provided, however, that the Earned Award of such terminated Participant for the Performance Period shall be multiplied by a fraction, the numerator of which shall be the number of days in which the Participant an employee of the Company during the Performance Period and the denominator of which shall be the total number of days in the Performance Period.  The pro-rated Earned Award shall be paid out in shares of Common Stock that are fully vested.

(c)In the event of termination of a Participant’s employment by reason of a Qualified Termination after the end of the Performance Period, any portion of the Participant’s Earned Award that has not yet been settled shall become fully vested and shall be paid out in shares of Common Stock.

(d)As a condition of receiving any payments or benefits under this Program on account of Participant’s Qualified Termination, the Company may require Participant to deliver an irrevocable, effective release of claims in the form determined by the Company and/or an affirmation of continued compliance with the non-competition, non-solicitation, non-disparagement and non-disclosure covenants in favor of the Company and related persons as set forth in Section 4.

(e)In the event of a termination of a Participant’s employment for any reason other than a Qualified Termination prior to the end of the Performance Period, except as otherwise set forth in the Participant’s Award Notice, the Award held by the Participant for the Performance Period shall, without payment of any consideration by the Company, automatically and without notice terminate, be forfeited and be and become null and void, and neither the Participant nor any of his or her successors, heirs, assigns, or personal representatives will thereafter have any further rights or interests in such Award.  In the event of a termination of a Participant’s employment for any reason other than a Qualified Termination after the end of the Performance Period, any portion of the Earned Award that has not yet been settled in shares of Common Stock shall be forfeited.

8.Payment of Awards. 

(a)As soon as practicable following the end of the Performance Period, the Compensation Committee shall determine the size of each Participant’s Earned Award, if any, with respect to the Performance Period (with the date of such determination being referred to as the “Issuance Date”).  In no event shall the Issuance Date with respect to the Performance Period be later than 74 days after the end of the Performance Period; provided that (i) in the case of the Performance Period that ends upon a Change in Corporate Control, the Issuance Date shall be no later than immediately prior to the consummation of the Change in Corporate Control, and (ii) in the case of a determination required by Section 7(b), the Issuance Date shall be no later than 74 days after the date of the Participant’s Qualified Termination.

(b)Except as otherwise provided in Sections 6 and 7, on each vesting date described below, the Company shall issue to each Participant (or such Participant’s estate or beneficiary, if applicable) a number of shares of Common Stock equal to the vested portion of the Earned Award.  Subject to a Participant’s continued employment with the Company or a subsidiary and continued compliance with the restrictive covenants set forth in Section 4 through such date, one-half of the shares subject to a Participant’s Earned Award shall be vested as of the Issuance Date, and one-half of such shares shall become fully vested on December 31, 2019.  In addition, on each such vesting date, as applicable (or on the Issuance Date with regard to an Earned Award settled in accordance with Section 6 or 7), the Company shall pay in cash to each Participant (or such Participant’s estate or beneficiary, if applicable) an amount equal to the Dividend Value multiplied by the number of shares issued pursuant to Section 6, Section 7 or this Section 8(b) on such date.

9.Adjustments.  Without duplication with the provisions of Sections 3 and 11 of the Equity Plan, if (i) the Company shall at any time be involved in a merger, consolidation, dissolution, liquidation, reorganization, exchange of Shares, sale of all or substantially all of the assets or Shares of the Company or a transaction similar thereto, (ii) any stock dividend, stock split, reverse stock split, stock combination, reclassification, recapitalization, or other similar change in the capital structure of the Company, or any

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distribution to holders of Shares other than ordinary cash dividends, shall occur or (iii) any other event shall occur which in the judgment of the Compensation Committee necessitates action by way of adjusting the terms of the Program, then and in that event, the Compensation Committee shall take such action as shall be necessary to maintain the Participants’ rights hereunder so that they are substantially the same rights existing under this Program prior to such event.

10.Restrictions and Conditions.  Subject to the provisions of the Equity Plan and this Program, except as may otherwise be permitted by the Compensation Committee, a Participant shall not be permitted voluntarily or involuntarily to sell, assign, transfer, or otherwise encumber or dispose of the restricted stock units or an Award; provided that the foregoing restriction shall not apply to Shares actually issued to a Participant.

11.Withholding of Tax.  Each Participant shall, not later than the date as of which vesting or payment in respect of an Award becomes a taxable event for Federal income tax purposes, pay to the Company or make arrangements satisfactory to the Company for payment of any Federal, state and local taxes required by law to be withheld on account of such taxable event.  The Company shall have the authority to cause the required minimum tax withholding obligation to be satisfied by withholding a number of Shares to be issued to a Participant with an aggregate Fair Market Value that would satisfy the withholding amount due.  The Company’s obligation to deliver stock certificates (or evidence of book entry) to any Participant is subject to and conditioned on tax withholding obligations being satisfied by such Participant or through the Company’s exercise of its authority.

12.Miscellaneous. 

(a)Amendment and Termination.  The Company reserves the right to amend or terminate the Program at any time in its discretion without the consent of any Participant, but no such amendment shall adversely affect the rights of the Participants with regard to outstanding Awards in any material respect.

(b)No Contract for Continuing Services.  This Program shall not be construed as creating any contract for continued services between the Company or any of its Subsidiaries and any Participant and nothing herein contained shall give any Participant the right to be retained as an employee or consultant of the Company or any of its Subsidiaries.

(c)Governing Law.  The Program and each Award Notice awarded under the Program shall be construed in accordance with and governed the laws of the State of Ohio, without regard to principles of conflict of laws of such state.

(d)Arbitration.           Subject to Section 4(e) hereof, all claims, disputes, questions, or controversies arising out of or relating to this Program, will be resolved exclusively in final and binding arbitration held under the auspices of Judicial Arbitration & Mediation Services, Inc. (“JAMS”) in accordance with JAMS then current Employment Arbitration Rules and Procedures, or successor rules then in effect. The arbitration will be held in New York, New York, and will be conducted and administered by JAMS or, in the event JAMS does not then conduct arbitration proceedings, a similarly reputable arbitration administrator. Participant and the Company will select a mutually acceptable, neutral arbitrator from among the JAMS panel of arbitrators.  Except as provided by this Program, the Federal Arbitration Act will govern the administration of the arbitration proceedings. The arbitrator will apply the substantive law (and the law of remedies, if applicable) of the State of Ohio, or federal law, if Ohio law is preempted, and the arbitrator is without jurisdiction to apply any different substantive law. Participant and the Company will each be allowed to engage in adequate discovery, the scope of which will be determined by the arbitrator consistent with the nature of the claim(s) in dispute. The arbitrator will have the authority to entertain a motion to dismiss and/or a motion for summary judgment by any party and will apply the standards governing such motions under the Federal Rules of Civil Procedure. The arbitrator will render a written award and supporting opinion that will set forth the arbitrator’s findings of fact and conclusions of law. Judgment upon the award may be entered in any court of competent jurisdiction. The Company will pay the arbitrator’s fees, as well as all administrative fees, associated with the arbitration. Each party will be responsible for paying its own attorneys’ fees and costs (including expert witness fees and costs, if any), provided, however, that the arbitrator may award attorney’s fees and costs to the prevailing party, except as prohibited by law.  If the Company is the prevailing party, the arbitration may award some or all of the costs for the arbitrator’s fees and/or other administrative fees to the fullest extent not prohibited by law.  The existence and subject matter of all arbitration proceedings, including, any settlements or awards thereunder, shall remain confidential.

(e)Construction.  Wherever appropriate, the use of the masculine gender shall be extended to include the feminine and/or neuter or vice versa; and the singular form of words shall be extended to include the plural; and the plural shall be restricted to mean the singular.

(f)Headings.  The Section headings and Section numbers are included solely for ease of reference.  If there is any conflict between such headings or numbers and the text of this Program, the text shall control.

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(g)Effect on Other Plans.  Nothing in this Program shall be construed to limit the rights of Participants under the Company’s or its Subsidiaries’ benefit plans, programs or policies.

(h)Clawback Policy.  All Awards granted under this Program shall be subject to forfeiture (as determined by the Compensation Committee) in accordance with the terms of the Company’s clawback or recoupment policy (as in effect from time to time).  Furthermore, prior to the occurrence of a Change in Corporate Control, an Award (including an Earned Award) granted under this Program and shares of Common Stock issued under this Program to a Participant shall be subject to forfeiture (as determined by the Compensation Committee) in the event that a Participant breaches any provision of Section 4 herein.

(i)Notices.  Any notice provided for under this Program shall be in writing and may be delivered in person or 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 Company:  Welltower Inc., 4500 Dorr Street, Toledo, OH  43615 Attention:  Legal Department

If to a Participant, at the address on file with the Company’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.  Any Participant may change the address at which notice shall be given by notifying the Company in the manner set forth in this Section 12(i).  The Company may change the address at which notice shall be given by notifying each Participant in the manner set forth in this Section 12(i).

                (j)            Section 409A.        

(1)           This Program is intended to comply with Section 409A of the Code (“Code Section 409A”) and will be interpreted in a manner intended to comply with Code Section 409A.  Any provision that would cause this Program or any payment hereunder to fail to satisfy Code Section 409A of the Code shall have no force or effect until amended to the minimum extent required to comply with Code Section 409A, which amendment may be retroactive to the extent permitted by Code Section 409A.  A termination of employment shall not be deemed to have occurred for purposes of any provision of this Agreement providing for the payment of amounts or benefits that may be considered “deferred compensation” under Code Section 409A (after taking into account all exclusions applicable to such payments or benefits under Code Section 409A) upon or following a termination of employment unless such termination is also a “separation from service” within the meaning of Code Section 409A and, for purposes of any such provision of this Program, references to a “retirement,” “termination,” “termination of employment” or like terms shall mean separation from service. 

(2)           Any payment scheduled to be made under this Program that may be considered “deferred compensation” under Code Section 409A (after taking into account all exclusions applicable to such payments or benefits under Code Section 409A), that are otherwise due on or within the six-month period following termination of employment will accrue during such six-month period and will instead become payable in a lump sum payment on the first business day period following such six-month period.  Furthermore, if any other payments of money or other benefits due to a Participant under this Agreement could cause the application of an accelerated or additional tax under Code Section 409A, such payments or other benefits shall be deferred if deferral will make such payment or other benefits compliant under Code Section 409A, or otherwise such payment or other benefits shall be restructured, to the extent possible, in a manner, determined by the Company, that does not cause such an accelerated or additional tax.  

(3)           Notwithstanding any contrary provision herein, a Participant’s right to any payment (including each installment payment) under this Program shall be treated as a “separate payment” within the meaning of Code Section 409A.

END OF PROGRAM DOCUMENT

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EX-10.3

EXHIBIT 10.3

welltower INC.

2017-2019 LONG-TERM INCENTIVE PROGRAM – Bridge 2

1.Purpose.  This 2017-2019 Long-Term Incentive Program (the “Program”) adopted pursuant to the Welltower Inc. 2016 Long-Term Incentive Plan (the “Equity Plan”) and any successor equity plan and is intended to provide an incentive for superior work and to motivate executives and employees of Welltower Inc. (the “Company”) toward even higher achievement and business results, to tie their goals and interests to those of the Company and its stockholders and to enable the Company to attract and retain highly qualified executives and employees.  The Program is for the benefit of Participants (as defined below). 

2.Definitions.  Capitalized terms used herein without definitions shall have the meanings given to those terms in the Equity Plan.  In addition, as used herein:

“All REIT Index” means the MSCI US REIT Index

“Annualized TSR Percentage” means (1*(1 + Cumulative TSR))^(1/3) - 1.

“Award” means a grant to a Participant hereunder.

“Award Notice” means the restricted stock unit award agreement with a Participant that sets forth the terms, conditions and limitations of the Participant’s participation in this Program, including, without limitation, the Participant’s Target Award and the Participant’s threshold, target, and high payout multiples.

“Cause” for termination of the Participant’s employment for purposes of Section 7 means (a) if the Participant is a party to an employment agreement with the Company immediately prior to such termination, and “Cause” is defined therein, then “Cause” shall have the meaning set forth in such employment agreement, or (b) if the Participant is not party to an employment agreement with the Company immediately prior to such termination or the Participant’s employment agreement does not define “Cause,” then “Cause” shall mean: (i) negligence or willful misconduct by the Participant in connection with the performance of his or her material duties as an employee of the Company or any Subsidiary; (ii) a breach by the Participant of any of his or her material duties as an employee of the Company or any Subsidiary, including but not limited to the provisions of Section 4 herein; (iii) conduct by the Participant against the material best interests of the Company or any Subsidiary, including but not limited to embezzlement or misappropriation of corporate assets, or a material act of statutory or common law fraud against the Company, any Subsidiary or the employees of either the Company or any Subsidiary; (iv) conviction for or plea of nolo contendere to any crime that is a felony, involves moral turpitude, or was committed in connection with the performance of Participant’s job responsibilities for the Company; (v) indictment of the Participant of a felony or a misdemeanor involving moral turpitude and such indictment has a material adverse effect on the interests or reputation of the Company or any Subsidiary; (vi) the intentional and willful failure by Participant to substantially perform his or her job responsibilities to the Company (other than any such failure resulting from Participant’s incapacity due to physical or mental disability) after a demand for substantial performance is made by the Company; (vii) the failure by Participant to satisfactorily perform his or her job responsibilities to the Company (other than any such failure resulting from Participant’s incapacity due to physical or mental disability); or (viii) a breach by Participant of any of the Company’s policies and procedures, including but not limited to the Company’s Code of Business Conduct & Ethics. 

“Change in Corporate Control” shall have the same meaning as set forth in Section 10.1(a) of the Equity Plan and Section 10.1(c) of the Equity Plan.  In addition, in order to qualify as a “Change in Corporate Control”, an event must also meet the requirements for a “change in the ownership or effective control of a corporation, or a change in the ownership of a substantial portion of the assets of a corporation” with the meaning of Treas. Reg. §1.409A-3(i)(5).

“Code” means the Internal Revenue Code of 1986, as amended.

“Common Stock” means the Company’s common stock, par value $1.00 per share, either currently existing or authorized hereafter.

“Common Stock Price” means, as of a particular date, the average of the Fair Market Value of one share of Common Stock over the 20 consecutive trading days ending on, and including such date (or if such date is not a trading day, the most recent trading day

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immediately preceding such date); provided that, if such date is the date upon which a Change in Corporate Control occurs, the Common Stock Price as of such date shall be equal to the fair value, as determined by the Committee, of the total consideration paid or payable in the transaction resulting in the Change in Corporate Control for one share of Common Stock.

“Cumulative TSR” means ((1*(1 + TSR Year 1)*(1 + TSR Year 2)*(1 + TSR Year 3)) ‑ 1.

“Debt + Preferred” means the sum of the Company’s secured debt, unsecured debt and the total amount of preferred stock for the designated period.

“Disability” for termination of the Participant’s employment for purposes of Section 7 means (a) if the Participant is a party to an employment agreement with the Company immediately prior to such termination, and “Disability” is defined therein, then “Disability” shall have the meaning set forth in such employment agreement, or (b) if the Participant is not party to an employment agreement with the Company that defines “Disability,” then “Disability” shall have the same meaning as defined in the Equity Plan.

“Dividend Value” means the aggregate amount of dividends and other distributions paid on one Share for which the record date occurred on or after the first day of the Performance Period and prior to the final settlement date at which shares of Common Stock are issued to a Participant (excluding dividends and distributions paid in the form of additional Shares).

“Earned Award” means, with respect to a Participant, the actual number of shares of Common Stock that were earned by such Participant pursuant to this Program at the end of the Performance Period based on the achievement of the performance goals set forth in Section 5.

“EBITDA” means the Company’s earnings before interest, taxes, depreciation and amortization, as determined in accordance with Generally Accepted Accounting Principles, for the designated period.

“Equity Plan” means the Welltower Inc. 2016 Long-Term Incentive Plan, as amended from time to time.

“Fair Market Value” means, as of any given date, the fair market value of a security which shall be the closing sale price reported for such security on the principal stock exchange or, if applicable, any other national exchange on which the security is traded or admitted to trading on such date on which a sale was reported.  If there are no market quotations for such date, the determination shall be made by reference to the last date preceding such date for which  there are market quotations.

“Good Reason” for termination of the Participant’s employment for purposes of Section 7 means (a) if the Participant is a party to an employment agreement with the Company immediately prior to such termination, and “good reason” is defined therein, then “Good Reason” shall have the meaning set forth in such employment agreement, or (b) if the Participant is not party to an employment agreement with the Company immediately prior to such termination and/or the Participant’s employment agreement does not define “Good Reason”:  (i) a substantial adverse change, not consented to by the Participant, in the nature or scope of the Participant’s responsibilities, authorities, powers, functions, or duties; or (ii) a breach by the Company of any of its material obligations hereunder.  Unless otherwise provided in an employment agreement to which the Participant is a party immediately prior to such termination, to constitute “good reason termination,” the Participant must:  (1) provide written notice to the Company within 90 days of the initial existence of the event constituting “Good Reason;” (2) may not terminate his or her employment unless the Company fails to substantially remedy the event constituting “Good Reason” within 30 days after such notice has been given; and (3) the Participant must terminate employment with the Company no later than 30 days after the end of the 30-day period in which the Company fails to substantially remedy the event constituting “Good Reason.”

“Health Care REIT Index” means the NAREIT Health Care REIT Index (or a successor index including a comparable universe of publicly traded U.S. real estate investment trusts), in each case adjusted and reweighted to exclude the Company from the index.   As of the beginning of the Performance Period, the NAREIT Health Care REIT Index was comprised of Ventas, Inc, HCP, Inc., Omega Healthcare Investors, Senior Housing Properties Trust, Healthcare Trust of America, Inc., Healthcare Realty Trust, National Health Investors, Medical Properties Trust, Community Healthcare Trust, Inc., Care Capital Properties, Sabra Health Care REIT, LTC Properties, New Senior Investment Group, Physicians Realty Trust, Universal Health Realty Income, Care Trust REIT, Quality Care Properties, Inc., MedEquities Realty Trust, Inc., and Global Medical REIT.  Any health care REIT organization that is not in existence for the entire Performance Period shall be omitted from this index.

“Index Return” means, with respect to the Performance Period, the compounded annualized return of either the Health Care REIT Index, or the All REIT Index, as applicable, over the Performance Period expressed as a percentage.  For the avoidance of doubt, the intent of the Committee is that Index Return over the Performance Period be calculated in a manner designed to produce a fair comparison between the Company’s Annualized TSR Percentage and the Index Return for the purpose of determining Relative

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Performance.  In the case of the Health Care REIT Index, the Index Return shall be computed as the sum of each component company’s weighted TSR with each component company’s weight as the average of its relative market capitalization on dates that correspond to the beginning of each year of the Performance Period.

“Participant” means an executive or employee of the Company or any Subsidiary selected by the Compensation Committee to participate in the Program.

“Performance Period” means the period commencing on January 1, 2017 and concluding on the earlier of (i) December 31, 2019, or (ii) a Change in Corporate Control.

“Program” means this Welltower Inc. 2017-2019 Long-Term Incentive Program, as amended from time to time.

“Qualified Termination” means termination of a Participant’s employment for Good Reason, by reason of the Participant’s death, Disability, by the Company without Cause, Retirement and in the case of a Participant who is party to an employment agreement with the Company, a non‑renewal by the Company of the term of such agreement.

“Relative Performance” means the Annualized TSR Percentage relative to the applicable Index Return.

“Retirement” means the voluntary termination of employment by a Participant after attaining age 55 and completing ten consecutive full years of service; provided, however, that the sum of the Participant’s age and consecutive full years of service to the Company shall be equal to 70 or more; and provided further that the Participant (a) delivers to the Company, so that the Company receives or is deemed to have received in accordance with Section 12(i) at least six months prior to the date of his or her retirement, written notice specifying such retirement date, (b) remains in the continuous service of the Company from the date the written notice is received until his or her retirement date, and (c) enters into a retirement agreement with the Company  in such form as shall be determined by the Company from time to time that includes both (i) a customary release of claims covering the Company and its affiliates, and (ii) an affirmation of continued compliance with the non-competition, non-solicitation, non-disparagement and non-disclosure covenants in favor of the Company and related persons as set forth in Section 4.

“Target Award” means a Participant’s target award, expressed as a number of restricted stock units, for the Performance Period, as set forth in the Participant’s Award Notice.

“Total Shareholder Return” or “TSR” means the compounded annual growth rate, expressed as a percentage (rounded to the nearest tenth of a percent (0.1%)) in the value per share of Common Stock during the Performance Period due to the appreciation in the price per share of Common Stock and dividends paid during the Performance Period, assuming dividends are reinvested.  Total Shareholder Return or TSR for any 12-month period shall be calculated as follows:  (i) the Common Stock Price at the end of the period plus dividends paid during the 12-month period divided by (ii) the Fair Market Value of the Common Stock at the beginning of the period, minus (iii) 1.  As set forth in, and pursuant to, Section 9 of this Agreement, appropriate adjustments to the Total Shareholder Return shall be made to take into account all stock dividends, stock splits, reverse stock splits and the other events set forth in Section 9 that occur during the Performance Period.

3.Administration 

(a)The Program shall be administered by the Compensation Committee in accordance with the Equity Plan.  The Compensation Committee shall have the discretionary authority to make all determinations (including, without limitation, the interpretation and construction of the Program and the determination of relevant facts) regarding the entitlement to any Award hereunder and the amount of any Award to be paid under the Program (including the number of shares of Common Stock issuable to any Participant), provided such determinations are not made in bad faith and are not inconsistent with the terms, purpose and intent of the Program.  The Compensation Committee may delegate to one or more officers or employees of the Company some or all of its authority to administer the Program as described in this Section 3, and in the event of such delegation, references to the Compensation Committee in this Section 3 shall apply in the same manner to such delegate or delegates to the extent of such delegated authority.  In particular, but without limitation and subject to the foregoing, the Compensation Committee shall have the authority:

(i)to select Participants under the Program in its sole discretion;

(ii)to determine the Target Award and any formula or criteria for the determination of the Target Award for each Participant and to determine the Earned Award;

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(iii)to determine the terms and conditions, consistent with the terms of this Program, which shall govern Award Notices and all other written instruments evidencing an Award hereunder, including the waiver or modification of any such conditions;

(iv)to adopt, alter and repeal such administrative rules, guidelines and practices governing the Program as it shall from time to time deem advisable; and

(v)to interpret the terms and provisions of the Program and any Award granted under the Program (and any Award Notices or other agreements relating thereto) and to otherwise supervise the administration of the Program.

(b)Subject to the terms hereof, all decisions made by the Compensation Committee in good faith pursuant to the Program shall be final, conclusive and binding on all persons, including the Company and the Participants.  No member of the Compensation Committee, and no officer or employee of the Company acting on behalf of the Compensation Committee, shall be personally liable for any action, determination, or interpretation taken or made in good faith with respect to this Program, and all members of the Compensation Committee and each and any officer or employee of the Company acting on their behalf shall, to the fullest extent not prohibited by law, be fully indemnified and protected by the Company in respect of any such action, determination or interpretation.

4.Conditions of Participation

As a condition of entitlement to participate in the Program, whether or not the Participant receives any payment or other benefit under the Program, each Participant shall comply with the following restrictive covenants.

(a)           Protection of Confidential Information.         Participant, both during employment with the Company and thereafter, 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 (as defined below) except as may be required for Participant to perform in good faith his or her job responsibilities to the Company while employed by the Company.  Upon Participant’s termination of employment, Participant shall return to the Company all Confidential Information and shall not retain any Confidential Information in Participant’s possession that is in written or other tangible form and shall not furnish any such Confidential Information to any third party, except as provided herein.  Notwithstanding the foregoing, this Section 4(a) shall not apply to Confidential Information that (i) was publicly known at the time of disclosure to Participant, (ii) becomes publicly known or available thereafter other than by any means in violation of this Section 4 or any other duty owed to the Company by Participant, (iii) is lawfully disclosed to Participant 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 Participant to disclose or make accessible any information or is voluntarily disclosed by Participant to law enforcement or other governmental authorities.  Furthermore, in accordance with the Defend Trade Secrets Act of 2016, Participant will not be held criminally or civilly liable under any federal or state trade secret law for the disclosure of a trade secret that (x) is made (i) in confidence to a federal, state or local government official, either directly or indirectly, or to an attorney; and (ii) solely for the purpose of reporting or investigating a suspected violation of law; or (y) is made in a complaint or other document filed in a lawsuit or other proceeding, if such filing is made under seal. As used in this Program, Confidential Information means, without limitation, any non-public confidential or proprietary information disclosed to Participant or known by Participant as a consequence of or through Participant’s relationship with the Company, in any form, including electronic media.  Confidential Information also includes, but is not limited to the Company’s business plans and financial information, marketing plans, and business opportunities. Nothing herein shall limit in any way any obligation Participant may have relating to Confidential Information under any other agreement, promise or duty to the Company.

(b)           Non-Competition.               In the course of the performance of Participant’s job responsibilities for the Company, Participant has obtained extensive and valuable knowledge and information concerning the Company’s business (including confidential information relating to the Company and its operations, intellectual property, assets, contracts, customers, personnel, plans, marketing plans, research and development plans and prospects).  Accordingly, during employment with the Company and for [one year]^[1] following Participant’s termination of employment, Participant will not engage in any business activities on behalf of any enterprise which competes with the Company or any of its affiliates in the business of (i) ownership or operation of Health Care Facilities (defined below); (ii) investment in or lending to health care related enterprises (including, without limitation, owners or developers of Health Care Facilities); (iii) management of Health Care Facilities; or (iv) provision of any planning or development services for Health Care Facilities. “Health Care Facilities” means any senior housing facilities or facilities used or intended primarily for the delivery of health care services, including, without limitation, any active adult communities, independent living facilities, assisted living facilities, skilled

[1]               One year will be the duration of the non-competition period for SVPs and above.  For employees holding the title of Director, Assistant Vice President and Vice President, the duration will be six months.  For all other employees (i.e., Managers and below), the duration will be three months.

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nursing facilities, inpatient rehabilitation facilities, ambulatory surgery centers, medical office buildings, hospitals of any kind, or any similar types of facilities or projects.  Participant will be deemed to be engaged in such competitive business activities if Participant 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.

(c)           Non-Solicitation.  During employment with the Company and for one year following the end of Participant’s employment with the Company, Participant, to the fullest extent not prohibited by applicable law, directly or indirectly, individually or on behalf of any other person or entity, including Participant, will not encourage, induce, attempt to induce, recruit, attempt to recruit, solicit or attempt to solicit or participate in any way in hiring or retaining for employment, contractor or consulting opportunities anyone who is employed or providing full-time services as a consultant at that time by the Company or any subsidiary or affiliate of the Company.

(d)           Non-Disparagement.           At all times during and following Participant’s employment with the Company, Participant will not make or direct anyone else to make on Participant’s behalf any disparaging or untruthful remarks or statements, whether oral or written, about the Company, 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 Company.  Participant will not make any direct or indirect written or oral statements to the press, television, radio, on social media or to, on or through other media or other external persons or entities concerning any matters pertaining to the business and affairs of the Company, its affiliates or any of its officers or directors.  The restrictions described in this paragraph shall not apply to any truthful statements made in response to a subpoena or other compulsory legal process or to law enforcement or other governmental authorities.

(e)           Remedies.             For the avoidance of doubt, any breach of any of the provisions in this Section 4 shall constitute a material breach by Participant.  Notwithstanding any other provision of this Program, by becoming entitled to receive any payments or other benefits under this Program, Participant is deemed to have agreed that damages would be an inadequate remedy for the Company in the event of a breach or threatened breach by Participant of any of Sections 4(a) through 4(d), inclusive.  In the event of any such breach or threatened breach, and without relinquishing any other rights or remedies that the Company may have, including but not limited to the forfeiture or repayment by Participant of any payments or benefits otherwise payable or paid to Participant under this Program, the Company may, either with or without pursuing any potential damage remedies and without being required to post a bond, obtain from a court of competent jurisdiction, and enforce, an injunction prohibiting Participant from violating this Section 4 and requiring Participant to comply with its provisions.  The Company may present this Section 4 to any third party with which Participant may have accepted employment, or otherwise entered into a business relationship, that the Company contends violates this Section 4, if the Company has reason to believe Participant has or may have breached a provision of this Section 4.

5.Determination of Awards

(a)Each Participant’s Award Notice shall specify such Participant’s Target Award and threshold, target, and high payout multiples.

(b)The percentage of a Participant’s Target Award that may be earned for the Performance Period shall be determined as follows:  25 percent of the Target Award shall be earned based on the Company’s Relative Performance to the Health Care REIT Index; 15 percent of the Target Award shall be earned based on the Company’s Relative Performance to the All REIT Index; 10 percent of the Target Award shall be earned based on the Company’s Annualized TSR Percentage; 20 percent of the Target Award shall be earned based on the Company’s (Debt + Preferred) / EBITDA ratio; 15% shall be earned based on the establishment of Academic Medical Centers and Super-Regional Health Systems Relationships; and 15 percent of the Target Award shall be earned based on the Effectiveness of  Management and Progression on Corporate Initiatives; all as further set forth on Exhibit A.

(c)Depending on the score for each of the performance goals as determined pursuant to Exhibit A, the Earned Award for the Performance Period shall be determined based on the Participant’s individual threshold, target and high payout multiples described in the Participant’s Award Notice. 

For performance between two different tiers, the percentage payable shall be calculated using interpolation between tiers. The level of achievement for each listed performance goal shall be determined independently.

Except as otherwise provided herein, the Earned Award shall be settled in shares of Common Stock upon satisfaction of the vesting requirements as set forth in Section 8.

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6.Change in Corporate Control.  In the event that prior to December 31, 2019, a Change in Corporate Control occurs, then each outstanding Award will be deemed earned as of the date of such Change in Corporate Control in accordance with the computation described in Section 5(b) as if the Performance Period ended on the day prior to the consummation of the Change in Corporate Control, except that corporate metrics not tied to TSR shall be calculated based on the results through the most recent completed fiscal quarter, but each Award shall further be multiplied by a fraction, the numerator of which shall be the number of full and partial months from the beginning of the Performance Period through the Change in Corporate Control and the denominator of which shall be 36.  Notwithstanding Sections 4 and 8(b), any shares of Common Stock issued to satisfy such outstanding Earned Awards shall be fully vested and nonforfeitable.

7.Termination of Participant’s Employment. 

(a)If a Participant’s employment with the Company terminates, the provisions of this Section 7 shall govern the treatment of the Participant’s Award exclusively, regardless of the provisions of any employment, change in control or other agreement or arrangement to which the Participant is a party, or any termination or severance policies of the Company then in effect, which shall be superseded by this Program.

(b)In the event of termination of a Participant’s employment by reason of a Qualified Termination prior to the end of the Performance Period, then the Compensation Committee shall determine the Participant’s Earned Award in accordance with the computation described in Section 5(b) as if the Performance Period ended on the calendar quarter end immediately preceding the date of the Participant’s Qualified Termination; provided, however, that the Earned Award of such terminated Participant for the Performance Period shall be multiplied by a fraction, the numerator of which shall be the number of days in which the Participant an employee of the Company during the Performance Period and the denominator of which shall be the total number of days in the Performance Period.  The pro-rated Earned Award shall be paid out in shares of Common Stock that are fully vested.

(c)In the event of termination of a Participant’s employment by reason of a Qualified Termination after the end of the Performance Period, any portion of the Participant’s Earned Award that has not yet been settled shall become fully vested and shall be paid out in shares of Common Stock.

(d)As a condition of receiving any payments or benefits under this Program on account of Participant’s Qualified Termination, the Company may require Participant to deliver an irrevocable, effective release of claims in the form determined by the Company and/or an affirmation of continued compliance with the non-competition, non-solicitation, non-disparagement and non-disclosure covenants in favor of the Company and related persons as set forth in Section 4.

(e)In the event of a termination of a Participant’s employment for any reason other than a Qualified Termination prior to the end of the Performance Period, except as otherwise set forth in the Participant’s Award Notice, the Award held by the Participant for the Performance Period shall, without payment of any consideration by the Company, automatically and without notice terminate, be forfeited and be and become null and void, and neither the Participant nor any of his or her successors, heirs, assigns, or personal representatives will thereafter have any further rights or interests in such Award.  In the event of a termination of a Participant’s employment for any reason other than a Qualified Termination after the end of the Performance Period, any portion of the Earned Award that has not yet been settled in shares of Common Stock shall be forfeited.

8.Payment of Awards. 

(a)As soon as practicable following the end of the Performance Period , the Compensation Committee shall determine the size of each Participant’s Earned Award, if any, with respect to the Performance Period (with the date of such determination being referred to as the “Issuance Date”).  In no event shall the Issuance Date with respect to the Performance Period be later than 74 days after the end of the Performance Period; provided that (i) in the case of the Performance Period that ends upon a Change in Corporate Control, the Issuance Date shall be no later than immediately prior to the consummation of the Change in Corporate Control, and (ii) in the case of a determination required by Section 7(b), the Issuance Date shall be no later than 74 days after the date of the Participant’s Qualified Termination.

(b)Except as otherwise provided in Sections 6 and 7, on each vesting date described below, the Company shall issue to each Participant (or such Participant’s estate or beneficiary, if applicable) a number of shares of Common Stock equal to the vested portion of the Earned Award.  Subject to a Participant’s continued employment with the Company or a subsidiary and continued compliance with the restrictive covenants set forth in Section 4 through such date, one-half of the shares subject to a Participant’s Earned Award shall be vested as of the Issuance Date, and one-half of such shares shall become fully vested on December 31, 2020.  In addition, on each such vesting date, as applicable (or on the Issuance Date with regard to an Earned Award settled in accordance with Section 6

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or 7), the Company shall pay in cash to each Participant (or such Participant’s estate or beneficiary, if applicable) an amount equal to the Dividend Value multiplied by the number of shares issued pursuant to Section 6, Section 7 or this Section 8(b) on such date.

9.Adjustments.  Without duplication with the provisions of Sections 3 and 11 of the Equity Plan, if (i) the Company shall at any time be involved in a merger, consolidation, dissolution, liquidation, reorganization, exchange of Shares, sale of all or substantially all of the assets or Shares of the Company or a transaction similar thereto, (ii) any stock dividend, stock split, reverse stock split, stock combination, reclassification, recapitalization, or other similar change in the capital structure of the Company, or any distribution to holders of Shares other than ordinary cash dividends, shall occur or (iii) any other event shall occur which in the judgment of the Compensation Committee necessitates action by way of adjusting the terms of the Program, then and in that event, the Compensation Committee shall take such action as shall be necessary to maintain the Participants’ rights hereunder so that they are substantially the same rights existing under this Program prior to such event.

10.Restrictions and Conditions.  Subject to the provisions of the Equity Plan and this Program, except as may otherwise be permitted by the Compensation Committee, a Participant shall not be permitted voluntarily or involuntarily to sell, assign, transfer, or otherwise encumber or dispose of the restricted stock units or an Award; provided that the foregoing restriction shall not apply to Shares actually issued to a Participant.

11.Withholding of Tax.  Each Participant shall, not later than the date as of which vesting or payment in respect of an Award becomes a taxable event for Federal income tax purposes, pay to the Company or make arrangements satisfactory to the Company for payment of any Federal, state and local taxes required by law to be withheld on account of such taxable event.  The Company shall have the authority to cause the required minimum tax withholding obligation to be satisfied by withholding a number of Shares to be issued to a Participant with an aggregate Fair Market Value that would satisfy the withholding amount due.  The Company’s obligation to deliver stock certificates (or evidence of book entry) to any Participant is subject to and conditioned on tax withholding obligations being satisfied by such Participant or through the Company’s exercise of its authority.

12.Miscellaneous. 

(a)Amendment and Termination.  The Company reserves the right to amend or terminate the Program at any time in its discretion without the consent of any Participant, but no such amendment shall adversely affect the rights of the Participants with regard to outstanding Awards in any material respect.

(b)No Contract for Continuing Services.  This Program shall not be construed as creating any contract for continued services between the Company or any of its Subsidiaries and any Participant and nothing herein contained shall give any Participant the right to be retained as an employee or consultant of the Company or any of its Subsidiaries.

(c)Governing Law.  The Program and each Award Notice awarded under the Program shall be construed in accordance with and governed the laws of the State of Ohio, without regard to principles of conflict of laws of such state.

(d)Arbitration.           Subject to Section 4(e) hereof, all claims, disputes, questions, or controversies arising out of or relating to this Program, will be resolved exclusively in final and binding arbitration held under the auspices of Judicial Arbitration & Mediation Services, Inc. (“JAMS”) in accordance with JAMS then current Employment Arbitration Rules and Procedures, or successor rules then in effect. The arbitration will be held in New York, New York, and will be conducted and administered by JAMS or, in the event JAMS does not then conduct arbitration proceedings, a similarly reputable arbitration administrator. Participant and the Company will select a mutually acceptable, neutral arbitrator from among the JAMS panel of arbitrators.  Except as provided by this Program, the Federal Arbitration Act will govern the administration of the arbitration proceedings. The arbitrator will apply the substantive law (and the law of remedies, if applicable) of the State of Ohio, or federal law, if Ohio law is preempted, and the arbitrator is without jurisdiction to apply any different substantive law. Participant and the Company will each be allowed to engage in adequate discovery, the scope of which will be determined by the arbitrator consistent with the nature of the claim(s) in dispute. The arbitrator will have the authority to entertain a motion to dismiss and/or a motion for summary judgment by any party and will apply the standards governing such motions under the Federal Rules of Civil Procedure. The arbitrator will render a written award and supporting opinion that will set forth the arbitrator’s findings of fact and conclusions of law. Judgment upon the award may be entered in any court of competent jurisdiction. The Company will pay the arbitrator’s fees, as well as all administrative fees, associated with the arbitration. Each party will be responsible for paying its own attorneys’ fees and costs (including expert witness fees and costs, if any), provided, however, that the arbitrator may award attorney’s fees and costs to the prevailing party, except as prohibited by law.  If the Company is the prevailing party, the arbitration may award some or all of the costs for the arbitrator’s fees and/or other administrative fees to the fullest extent not prohibited by law.  The existence and subject matter of all arbitration proceedings, including, any settlements or awards thereunder, shall remain confidential.

7

(e)Construction.  Wherever appropriate, the use of the masculine gender shall be extended to include the feminine and/or neuter or vice versa; and the singular form of words shall be extended to include the plural; and the plural shall be restricted to mean the singular.

(f)Headings.  The Section headings and Section numbers are included solely for ease of reference.  If there is any conflict between such headings or numbers and the text of this Program, the text shall control.

(g)Effect on Other Plans.  Nothing in this Program shall be construed to limit the rights of Participants under the Company’s or its Subsidiaries’ benefit plans, programs or policies.

(h)Clawback Policy.  All Awards granted under this Program shall be subject to forfeiture (as determined by the Compensation Committee) in accordance with the terms of the Company’s clawback or recoupment policy (as in effect from time to time).  Furthermore, prior to the occurrence of a Change in Corporate Control, an Award (including an Earned Award) granted under this Program and shares of Common Stock issued under this Program to a Participant shall be subject to forfeiture (as determined by the Compensation Committee) in the event that a Participant breaches any provision of Section 4 herein.

(i)Notices.  Any notice provided for under this Program shall be in writing and may be delivered in person or 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 Company:  Welltower Inc., 4500 Dorr Street, Toledo, OH  43615 Attention:  Legal Department

If to a Participant, at the address on file with the Company’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.  Any Participant may change the address at which notice shall be given by notifying the Company in the manner set forth in this Section 12(i).  The Company may change the address at which notice shall be given by notifying each Participant in the manner set forth in this Section 12(i).

                (j)            Section 409A.        

(1)           This Program is intended to comply with Section 409A of the Code (“Code Section 409A”) and will be interpreted in a manner intended to comply with Code Section 409A.  Any provision that would cause this Program or any payment hereunder to fail to satisfy Code Section 409A of the Code shall have no force or effect until amended to the minimum extent required to comply with Code Section 409A, which amendment may be retroactive to the extent permitted by Code Section 409A.  A termination of employment shall not be deemed to have occurred for purposes of any provision of this Agreement providing for the payment of amounts or benefits that may be considered “deferred compensation” under Code Section 409A (after taking into account all exclusions applicable to such payments or benefits under Code Section 409A) upon or following a termination of employment unless such termination is also a “separation from service” within the meaning of Code Section 409A and, for purposes of any such provision of this Program, references to a “retirement,” “termination,” “termination of employment” or like terms shall mean separation from service. 

(2)           Any payment scheduled to be made under this Program that may be considered “deferred compensation” under Code Section 409A (after taking into account all exclusions applicable to such payments or benefits under Code Section 409A), that are otherwise due on or within the six-month period following termination of employment will accrue during such six-month period and will instead become payable in a lump sum payment on the first business day period following such six-month period.  Furthermore, if any other payments of money or other benefits due to a Participant under this Agreement could cause the application of an accelerated or additional tax under Code Section 409A, such payments or other benefits shall be deferred if deferral will make such payment or other benefits compliant under Code Section 409A, or otherwise such payment or other benefits shall be restructured, to the extent possible, in a manner, determined by the Company, that does not cause such an accelerated or additional tax.  

(3)           Notwithstanding any contrary provision herein, a Participant’s right to any payment (including each installment payment) under this Program shall be treated as a “separate payment” within the meaning of Code Section 409A.

8

END OF PROGRAM DOCUMENT

9

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,										Nine Months Ended September 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	$	572,065	$	360,628
Fixed charges		359,947		460,918		485,762		498,253		536,607		405,629		359,613
Capitalized interest		(9,777)		(6,700)		(7,150)		(8,670)		(16,943)		(12,109)		(10,033)
Amortized premiums, discounts and capitalized expenses related to indebtedness		11,395		4,142		2,427		2,586		1,681		1,465		7,825
Noncontrolling interest in pre-tax income of subsidiaries that have not incurred fixed charges		2,415		6,770		(147)		(4,799)		(4,267)		(2,553)		(7,735)
Earnings	$	549,892	$	567,375	$	865,105	$	1,123,487	$	1,226,331	$	964,497	$	710,298
Fixed charges:
Interest expense(1)	$	361,565	$	458,360	$	481,039	$	492,169	$	521,345	$	394,985	$	357,405
Capitalized interest		9,777		6,700		7,150		8,670		16,943		12,109		10,033
Amortized premiums, discounts and capitalized expenses related to indebtedness		(11,395)		(4,142)		(2,427)		(2,586)		(1,681)		(1,465)		(7,825)
Fixed charges	$	359,947	$	460,918	$	485,762	$	498,253	$	536,607	$	405,629	$	359,613
Consolidated ratio of earnings to fixed charges		1.53		1.23		1.78		2.25		2.29		2.38		1.98
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	$	572,065	$	360,628
Fixed charges		359,947		460,918		485,762		498,253		536,607		405,629		359,613
Capitalized interest		(9,777)		(6,700)		(7,150)		(8,670)		(16,943)		(12,109)		(10,033)
Amortized premiums, discounts and capitalized expenses related to indebtedness		11,395		4,142		2,427		2,586		1,681		1,465		7,825
Noncontrolling interest in pre-tax income of subsidiaries that have not incurred fixed charges		2,415		6,770		(147)		(4,799)		(4,267)		(2,553)		(7,735)
Earnings	$	549,892	$	567,375	$	865,105	$	1,123,487	$	1,226,331	$	964,497	$	710,298
Fixed charges:
Interest expense(1)	$	361,565	$	458,360	$	481,039	$	492,169	$	521,345	$	394,985	$	357,405
Capitalized interest		9,777		6,700		7,150		8,670		16,943		12,109		10,033
Amortized premiums, discounts and capitalized expenses related to indebtedness		(11,395)		(4,142)		(2,427)		(2,586)		(1,681)		(1,465)		(7,825)
Fixed charges		359,947		460,918		485,762		498,253		536,607		405,629		359,613
Preferred stock dividends		69,129		66,336		65,408		65,406		65,406		49,055		37,734
Combined fixed charges and preferred stock dividends	$	429,076	$	527,254	$	551,170	$	563,659	$	602,013	$	454,684	$	397,347
Consolidated ratio of earnings to combined fixed charges and preferred stock dividends		1.28		1.08		1.57		1.99		2.04		2.12		1.79
(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: November 7, 2017

/s/ THOMAS J. DEROSA

Thomas J. DeRosa, 

Chief Executive Officer 

1

EX-31.2

 

EXHIBIT 31.2

CERTIFICATION OF CHIEF FINANCIAL OFFICER

I, John A. Goodey, 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: November 7, 2017

/s/ JOHN A. GOODEY

John A. Goodey, 

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 September 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: November 7, 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, John A. Goodey, 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 September 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/ JOHN A. GOODEY

John A. Goodey, 

Chief Financial Officer

 Date: November 7, 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 ($)	9 Months Ended
	Sep. 30, 2017	Oct. 31, 2017	Jun. 30, 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	Sep. 30, 2017
Amendment Flag	false
Document Fiscal Year Focus	2017
Document Fiscal Period Focus	Q3
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		370,356,835

XML

Consolidated Balance Sheets (Unaudited) - USD ($) $ in Thousands	Sep. 30, 2017		Dec. 31, 2016
Real property owned:
Land and land improvements	$ 2,806,586		$ 2,591,071
Buildings and improvements	26,010,364		24,496,153
Acquired lease intangibles	1,492,279		1,402,884
Real property held for sale, net of accumulated depreciation	70,995		1,044,859
Construction in progress	344,742		506,091
Gross real property owned	30,724,966		30,041,058
Less accumulated depreciation and amortization	(4,826,418)		(4,093,494)
Net real property owned	25,898,548		25,947,564
Real estate loans receivable:
Real estate loans receivable	496,850		622,628
Allowance for losses on loans receivable	(5,406)		(6,563)
Net real estate loans receivable	491,444		616,065
Net real estate investments	26,389,992		26,563,629
Other assets:
Investments in unconsolidated entities	407,507		457,138
Goodwill	68,321		68,321
Cash and cash equivalents	236,247		419,378
Restricted cash	59,064		187,842
Straight-line rent receivable	393,142		342,578
Receivables and other assets	626,106		826,298
Total other assets	1,790,387		2,301,555
Total assets	28,180,379		28,865,184
Liabilities:
Borrowings under primary unsecured credit facilities, Carrying Value	420,000	[1]	645,000
Senior unsecured notes	8,315,395		8,161,619
Secured debt	2,713,513		3,477,699
Capital lease obligations	72,684		73,927
Accrued expenses and other liabilities	1,027,375		827,034
Total liabilities	12,548,967		13,185,279
Redeemable noncontrolling interests	386,748		398,433
Equity:
Preferred stock	718,503		1,006,250
Common stock	371,012		363,071
Capital in excess of par value	17,564,805		16,999,691
Treasury stock	(62,363)		(54,741)
Cumulative net income	5,416,427		4,803,575
Cumulative dividends	(9,138,346)		(8,144,981)
Accumulated other comprehensive income (loss)	(141,240)		(169,531)
Other equity	1,127		3,059
Total Welltower Inc. stockholders' equity	14,729,925		14,806,393
Noncontrolling interests	514,739		475,079
Total equity	15,244,664		15,281,472
Total liabilities and equity	$ 28,180,379		$ 28,865,184

[1] As of September 30, 2017, letters of credit in the aggregate amount of $25,576,000 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		9 Months Ended
	Sep. 30, 2017	Sep. 30, 2016	Sep. 30, 2017	Sep. 30, 2016
Revenues:
Rental income	$ 362,880	$ 421,152	$ 1,085,621	$ 1,259,442
Resident fees and services	702,380	630,017	2,049,757	1,847,386
Interest income	20,187	25,080	61,836	74,275
Other income	6,036	2,884	15,169	21,735
Total revenues	1,091,483	1,079,133	3,212,383	3,202,838
Expenses:
Interest expense	122,578	129,699	357,405	394,985
Property operating expenses	523,997	473,680	1,536,021	1,382,148
Depreciation and amortization	230,138	218,061	683,262	673,326
General and administrative	29,913	36,828	93,643	122,434
Transaction costs	0	19,842	0	33,207
Loss (gain) on derivatives, net	324	(2,516)	2,284	(2,516)
Loss (gain) on extinguishment of debt, net	0	0	36,870	9
Impairment of Asset	0	9,705	24,662	24,019
Other expenses	99,595	0	117,608	3,161
Total expenses	1,006,545	885,299	2,851,755	2,630,773
Income (loss) from continuing operations before income taxes and income from unconsolidated entities, total	84,938	193,834	360,628	572,065
Income tax expense	(669)	305	5,535	2,543
(Loss) income from unconsolidated entities	3,408	(1,749)	(23,676)	(7,528)
Income from continuing operations	87,677	192,390	342,487	567,080
Gain (loss) on real estate dispositions, net	1,622	162,351	287,869	163,881
Net income	89,299	354,741	630,356	730,961
Less: Preferred stock dividends	11,676	16,352	37,734	49,055
Preferred stock redemption charge	0	0	9,769	0
Less: Net income (loss) attributable to noncontrolling interests	3,580	3,479	7,735	2,553
Net income (loss) attributable to common stockholders	$ 74,043	$ 334,910	$ 575,118	$ 679,353
Average number of common shares outstanding:
Basic	369,089	358,932	366,096	356,911
Diluted	370,740	361,237	367,894	358,752
Basic:
Income (loss) from continuing operations attributable to common stockholders, including real estate dispositions	$ 0.2	$ 0.93	$ 1.57	$ 1.9
Net income (loss) attributable to common stockholders, total	0.2	0.93	1.57	1.9
Diluted:
Income (loss) from continuing operations attributable to common stockholders, including real estate dispositions	0.2	0.93	1.56	1.89
Net income (loss) attributable to common stockholders, total	0.2	0.93	1.56	1.89
Dividends declared and paid per common share	$ 0.87	$ 0.86	$ 2.61	$ 2.58

XML

Consolidated Statements of Comprehensive Income (Unaudited) - USD ($) $ in Thousands		3 Months Ended		9 Months Ended
		Sep. 30, 2017	Sep. 30, 2016	Sep. 30, 2017	Sep. 30, 2016
Statement of Comprehensive Income [Abstract]
Net income		$ 89,299	$ 354,741	$ 630,356	$ 730,961
Other comprehensive income (loss):
Unrecognized gain (loss) on equity investments		(3,808)	5,908	(20,285)	(5,252)
Unrecognized gain (loss) on cash flow hedges		2	401	2	1,371
Unrecognized actuarial gain/(loss)		0	(2)	0	0
Foreign currency translation gain (loss)		37,343	516	70,769	(48,496)
Total other comprehensive income (loss)		33,537	6,823	50,486	(52,377)
Total comprehensive income (loss), total		122,836	361,564	680,842	678,584
Total comprehensive income (loss) attributable to noncontrolling interests	[1]	14,732	1,846	29,930	13,117
Comprehensive income (loss) attributable to controlling interests		$ 108,104	$ 359,718	$ 650,912	$ 665,467

[1] Includes amounts attributable to redeemable noncontrolling interests.

XML

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)	735,771					728,408				7,363
Other comprehensive income	(52,377)							(62,941)		10,564
Total comprehensive income	683,394
Decrease in noncontrolling interests	(174,624)			(45,765)						(128,859)
Amounts related to stock incentive plans, net of forfeitures	30,470		689	38,888	(7,822)				(1,285)
Proceeds from issuance of common stock	519,342		7,203	512,139
Option compensation expense	207								207
Cash dividends paid:
Common stock	(921,381)						(921,381)
Preferred Stock	(49,055)						(49,055)
Balances at end of period at Sep. 30, 2016	15,264,238	1,006,250	362,703	16,983,562	(52,194)	4,454,180	(7,816,492)	(151,184)	3,020	474,393
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)	632,528					622,621				9,907
Other comprehensive income	50,486							28,291		22,195
Total comprehensive income	683,014
Increase in noncontrolling interests	17,342			9,784						7,558
Amounts related to stock incentive plans, net of forfeitures	7,935		337	17,151	(7,611)				(1,942)
Proceeds from issuance of common stock	530,467		7,513	522,954
Redemption of preferred stock	(287,509)	(287,500)		9,760		(9,769)
Redemption of equity membership units	5,545		91	5,465	(11)
Conversion of preferred stock	(247)	(247)
Option compensation expense	10								10
Cash dividends paid:
Common stock	(955,631)						(955,631)
Preferred Stock	(37,734)						(37,734)
Balances at end of period at Sep. 30, 2017	$ 15,244,664	$ 718,503	$ 371,012	$ 17,564,805	$ (62,363)	$ 5,416,427	$ (9,138,346)	$ (141,240)	$ 1,127	$ 514,739

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Consolidated Statements of Cash Flows (Unaudited) - USD ($) $ in Thousands		9 Months Ended
		Sep. 30, 2017	Sep. 30, 2016
Operating activities
Net income (loss)		$ 630,356	$ 730,961
Adjustments to reconcile net income to net cash provided from (used in) operating activities:
Depreciation and amortization		683,262	673,326
Other amortization expenses		12,095	5,419
Asset Impairment Charges		24,662	24,019
Stock-based compensation expense		16,459	20,618
Loss (gain) on derivatives, net		2,284	(2,516)
Loss (gain) on extinguishment of debt, net		36,870	9
Income from unconsolidated entities		23,676	7,528
Rental income in excess of cash received		(64,865)	(60,212)
Amortization related to above (below) market leases, net		180	362
Net loss (gain) on sales of properties		(287,869)	(163,881)
Distributions by unconsolidated entities		116	473
Increase (decrease) in accrued expenses and other liabilities		171,713	79,619
Decrease (increase) in receivables and other assets		(86,475)	(35,557)
Net cash provided from (used in) operating activities		1,162,464	1,280,168
Investing activities
Cash disbursed for acquisitions		(575,694)	(1,448,126)
Cash disbursed for capital improvements to existing properties		(159,142)	(141,200)
Cash disbursed for construction in progress		(198,068)	(325,372)
Capitalized interest		(10,033)	(12,109)
Investment in real estate loans receivable		(70,051)	(105,496)
Other investments, net of payments		50,877	(88,398)
Principal collected on real estate loans receivable		82,263	225,092
Contributions to unconsolidated entities		(73,802)	(41,747)
Distributions by unconsolidated entities		58,754	72,564
Proceeds from (payments on) derivatives investing		55,771	56,842
Decrease (increase) in restricted cash		130,470	(21,218)
Proceeds from sales of real property		1,237,851	538,032
Net cash provided from (used in) investing activities		529,196	(1,291,136)
Financing activities
Net increase (decrease) under unsecured lines of credit arrangements		(225,000)	515,000
Proceeds from issuance of senior unsecured notes		7,500	693,560
Payments to extinguish senior unsecured notes		(5,000)	(400,000)
Net proceeds from the issuance of secured debt		190,459	193,541
Payments on secured debt		(1,050,879)	(471,898)
Net proceeds from the issuance of common stock		530,992	520,067
Redemption of preferred stock		(287,500)	0
Decrease (increase) in deferred loan costs		(54,027)	(18,831)
Contributions by noncontrolling interests	[1]	47,209	142,381
Distributions to noncontrolling interests	[1]	(51,824)	(106,076)
Cash distributions to stockholders		(992,621)	(970,436)
Other financing activities		(8,416)	(8,941)
Net cash provided from (used in) financing activities		(1,899,107)	88,367
Effect of foreign currency translation on cash and cash equivalents		24,316	(9,690)
Increase (decrease) in cash and cash equivalents		(183,131)	67,709
Cash and cash equivalents at beginning of period		419,378	360,908
Cash and cash equivalents at end of period		236,247	428,617
Supplemental cash flow information:
Interest paid		312,896	360,421
Income taxes paid		$ 5,606	$ 7,070

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

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Business

9 Months Ended

Sep. 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 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 REIT to invest exclusively in health care facilities.

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Accounting Policies and Related Matters

9 Months Ended

Sep. 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 (such as normal recurring accruals) considered necessary for a fair presentation have been included. Operating results for the nine months ended September 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 Accounting Standards Update (“ASU”) No. 2014-09, “Revenue from Contracts with Customers (Topic 606),” which 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 ASU 2014-09. We anticipate that we will be required to separately disclose the components of total revenue between lease revenue accounted for under existing leasing guidance and service revenue accounted for under ASU 2014-09, including non-lease components such as certain services embedded in base leasing fees. 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,” which 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. 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, and we 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 aspect of the 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 $7,822,000 for thenine months ended September 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,” which 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,” which 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 nine months endedSeptember 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.

In August 2017, the FASB issued ASU 2017-12, “Derivatives and Hedging: Targeted Improvements to Accounting for Hedging Activities,” which expands and refines hedge accounting for both nonfinancial and financial risk components and aligns the recognition and presentation of the effects of the hedging instrument and the hedged item in the financial statements. It also includes certain targeted improvements to simplify the application of current guidance related to hedge accounting. The standard is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2018, with early adoption permitted. We are currently in the process of evaluating the effects this standard will have on our consolidated financial statements.

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Real Property Acquisitions and Development

9 Months Ended

Sep. 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

		Nine Months Ended
(In thousands)		September 30, 2017			September 30, 2016
Land and land improvements			$	31,948		$	21,713
Buildings and improvements				206,910			220,274
Acquired lease intangibles				-			2,876
	Total assets acquired			238,858			244,863
Accrued expenses and other liabilities				(21,236)			(2,145)
	Total liabilities assumed			(21,236)			(2,145)
Noncontrolling interests				(7,275)			(3,162)
Non-cash acquisition related activity(1)				(54,901)			(51,733)
	Cash disbursed for acquisitions			155,446			187,823
Construction in progress additions				106,186			133,611
Less:	Capitalized interest			(3,886)			(6,263)
	Foreign currency translation			(656)			(3,179)
Cash disbursed for construction in progress				101,644			124,169
Capital improvements to existing properties				17,873			21,447
	Total cash invested in real property, net of cash acquired		$	274,963		$	333,439
(1) For the nine months ended September 30, 2017, $54,901,000 is related to the acquisition of assets previously financed as real estate loans receivable. For the nine months ended September 30, 2016, $45,044,000 is related to the acquisition of assets previously financed as real estate loans receivable and $6,689,000 is related to the acquisition of assets previously financed as an investment in an unconsolidated entity.

Seniors Housing Operating Activity

		Nine Months Ended
(In thousands)		September 30, 2017			September 30, 2016
Land and land improvements			$	31,006		$	122,649
Building and improvements				384,522			1,108,195
Acquired lease intangibles				48,197			90,771
Restricted cash				1,692			137
Receivables and other assets				3,164			2,179
	Total assets acquired(1)			468,581			1,323,931
Secured debt				-			(49,381)
Accrued expenses and other liabilities				(43,364)			(12,328)
	Total liabilities assumed			(43,364)			(61,709)
Noncontrolling interests				(4,701)			(1,089)
Non-cash acquisition related activity(2)				(59,065)			(17,477)
	Cash disbursed for acquisitions			361,451			1,243,656
Construction in progress additions				65,282			139,160
Less:	Capitalized interest			(5,996)			(3,923)
	Foreign currency translation			(6,218)			(5,953)
Cash disbursed for construction in progress				53,068			129,284
Capital improvements to existing properties				110,372			84,444
	Total cash invested in real property, net of cash acquired		$	524,891		$	1,457,384
(1) Excludes $4,581,000and $135,000 of cash acquired during the nine months ended September 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 nine months ended September 30, 2017. Includes $51,097,000 and $17,477,000 for the nine months ended September 30, 2017 and 2016, respectively, related to the acquisition of assets previously financed as an investments in an unconsolidated entity.

Outpatient Medical Activity

		Nine Months Ended
(In thousands)		September 30, 2017			September 30, 2016
Land and land improvements			$	25,060	$	1,466
Buildings and improvements				62,336		27,272
Acquired lease intangibles				8,397		4,592
Receivables and other assets				3		-
	Total assets acquired			95,796		33,330
Secured debt				(25,709)		-
Accrued expenses and other liabilities				(2,210)		(1,670)
	Total liabilities assumed			(27,919)		(1,670)
Noncontrolling interests				(9,080)		-
Non-cash acquisition activity(1)				-		(15,013)
	Cash disbursed for acquisitions			58,797		16,647
Construction in progress additions				33,495		81,843
Less:	Capitalized interest			(1,847)		(2,588)
	Accruals(2)			11,708		(7,336)
Cash disbursed for construction in progress				43,356		71,919
Capital improvements to existing properties				30,897		35,309
	Total cash invested in real property		$	133,050	$	123,875
(1) Represents the acquisition of assets previously financed as real estate loans receivable.
(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):

			Nine Months Ended
			September 30, 2017			September 30, 2016
	Development projects:
		Triple-net		$	283,472		$	24,535
		Seniors housing operating			3,634			-
		Outpatient medical			63,036			44,113
	Total development projects				350,142			68,648
	Expansion projects				10,336			2,879
Total construction in progress conversions				$	360,478		$	71,527

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Real Estate Intangibles

9 Months Ended

Sep. 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):

		September 30, 2017		December 31, 2016
Assets:
	In place lease intangibles	$	1,333,368	$	1,252,143
	Above market tenant leases		64,408		61,700
	Below market ground leases		62,224		61,628
	Lease commissions		32,279		27,413
	Gross historical cost		1,492,279		1,402,884
	Accumulated amortization		(1,098,814)		(966,714)
	Net book value	$	393,465	$	436,170
	Weighted-average amortization period in years		14.5		13.7
Liabilities:
	Below market tenant leases	$	90,671	$	89,468
	Above market ground leases		8,540		8,107
	Gross historical cost		99,211		97,575
	Accumulated amortization		(57,449)		(52,134)
	Net book value	$	41,762	$	45,441
	Weighted-average amortization period in years		15.5		15.2

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

	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2017		2016		2017		2016
Rental income related to above/below market tenant leases, net	$	173	$	278	$	745	$	569
Property operating expenses related to above/below market ground leases, net		(306)		(309)		(925)		(931)
Depreciation and amortization related to in place lease intangibles and lease commissions		(34,270)		(30,137)		(109,011)		(95,610)

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

		Assets		Liabilities
2017	$	39,678	$	1,636
2018		104,524		6,190
2019		50,051		5,731
2020		30,582		5,234
2021		20,918		4,746
Thereafter		147,712		18,225
Total	$	393,465	$	41,762

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Dispositions, Assets Held for Sale and Discontinued Operations

9 Months Ended

Sep. 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, relationship or geography). During the nine months ended September 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 if applicable. The following is a summary of our real property disposition activity for the periods presented (in thousands):

		Nine Months Ended
		September 30, 2017			September 30, 2016
Real estate dispositions:
	Triple-net		$	899,104		$	295,365
	Seniors housing operating			16,206			-
	Outpatient medical			12,202			78,786
	Total dispositions			927,512			374,151
Gain (loss) on real estate dispositions, net				287,869			163,881
	Net other assets/liabilities disposed			22,470			-
Proceeds from real estate dispositions			$	1,237,851		$	538,032

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				Nine Months Ended
			September 30,				September 30,
		2017		2016		2017		2016
Revenues:
	Rental income	$	1,955	$	31,966	$	23,255	$	99,057
Expenses:
	Interest expense		-		4,939		1,714		16,697
	Property operating expenses		2,111		1,476		7,209		4,411
	Provision for depreciation		26		4,604		1,167		20,873
	Total expenses		2,137		11,019		10,090		41,981
Income (loss) from real estate dispositions, net		$	(182)	$	20,947	$	13,165	$	57,076

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Real Estate Loans Receivable

9 Months Ended

Sep. 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):

		Nine Months Ended
		September 30, 2017						September 30, 2016
				Outpatient						Outpatient
		Triple-net		Medical		Totals		Triple-net		Medical		Totals
Advances on real estate loans receivable:
	Investments in new loans	$	11,315	$	-	$	11,315	$	8,223	$	-	$	8,223
	Draws on existing loans		58,736		-		58,736		94,622		2,651		97,273
	Net cash advances on real estate loans		70,051		-		70,051		102,845		2,651		105,496
Receipts on real estate loans receivable:
	Loan payoffs		142,392		60,500		202,892		251,293		27,303		278,596
	Principal payments on loans		1,121		-		1,121		6,553		-		6,553
	Sub-total		143,513		60,500		204,013		257,846		27,303		285,149
	Less: Non-cash activity(1)(2)		(61,250)		(60,500)		(121,750)		(45,044)		(15,013)		(60,057)
	Net cash receipts on real estate loans		82,263		-		82,263		212,802		12,290		225,092
Net cash advances (receipts) on real estate loans			(12,212)		-		(12,212)		(109,957)		(9,639)		(119,596)
Change in balance due to foreign currency translation			8,183		-		8,183		(9,819)		-		(9,819)
Net change in real estate loans receivable		$	(65,279)	$	(60,500)	$	(125,779)	$	(164,820)	$	(24,652)	$	(189,472)
(1) Triple-net and prior year outpatient medical represents acquisitions of assets previously financed as real estate loans.
(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 September 30, 2017, the allowance for loan losses related to these loans is $5,406,000. At September 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 September 30, 2017.

		Nine Months Ended
	September 30, 2017		September 30, 2016
Balance of impaired loans at end of period	$	282,929	$	-
Allowance for loan losses		5,406		-
Balance of impaired loans not reserved	$	277,523	$	-
Average impaired loans for the period	$	324,255	$	-
Interest recognized on impaired loans		23,957		-

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Investments in Unconsolidated Entities

9 Months Ended

Sep. 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 entities 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)	September 30, 2017		December 31, 2016
Triple-net	10% to 49%	$	22,543	$	27,005
Seniors housing operating	10% to 50%		332,390		407,172
Outpatient medical	43%		52,574		22,961
Total		$	407,507	$	457,138
(1) Excludes ownership of in-substance real estate.

During the nine months ended September 30, 2017, we increased our ownership in the Sunrise Senior Living, Inc. management company from 24% to 34%. AtSeptember 30, 2017, the aggregate unamortized basis difference of our joint venture investments of $83,843,000 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

9 Months Ended

Sep. 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 nine months ended September 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)
	Sunrise Senior Living(3)	157		235,814	14%
	Genesis Healthcare	86	$	149,345	9%
	Revera(3)	98		117,124	7%
	Brookdale Senior Living	137		113,466	7%
	Benchmark Senior Living	48		74,070	4%
	Remaining portfolio	752		986,543	59%
	Totals	1,278	$	1,676,362	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

9 Months Ended

Sep. 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 September 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 September 30, 2017). Borrowings under the unsecured revolving credit facility are subject to interest payable at the applicable margin over LIBOR interest rate (2.13% at September 30, 2017). The applicable margin is based on our debt ratings and was 0.90% at September 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 September 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 September 30,				Nine Months Ended September 30,
		2017		2016		2017		2016
Balance outstanding at quarter end(1)		$	420,000	$	1,350,000	$	420,000	$	1,350,000
Maximum amount outstanding at any month end		$	645,000	$	1,560,000	$	1,010,000	$	1,560,000
Average amount outstanding (total of daily
	principal balances divided by days in period)	$	450,130	$	1,050,217	$	601,436	$	782,427
Weighted average interest rate (actual interest
	expense divided by average borrowings outstanding)		2.19%		1.44%		1.95%		1.35%
(1) As of September 30, 2017, letters of credit in the aggregate amount of $25,576,000 have been issued, which reduces the borrowing capacity on the unsecured revolving credit facility.

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Senior Unsecured Notes and Secured Debt

9 Months Ended

Sep. 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 September 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	$	-	$	121,412	$	121,412
2018		450,000		426,728		876,728
2019		600,000		491,941		1,091,941
2020(4)		697,327		184,281		881,608
2021(5,6)		1,149,856		221,721		1,371,577
Thereafter(7,8,9,10)		5,507,210		1,273,919		6,781,129
Totals	$	8,404,393	$	2,720,002	$	11,124,395
(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 1.9% to 6.5%.
(3) Annual interest rates range from 1.45% to 7.98%. Carrying value of the properties securing the debt totaled $5,766,501,000 at September 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 $239,827,000 based on the Canadian/U.S. Dollar exchange rate on September 30, 2017).
(5) On May 13, 2016, we refinanced the funding on a $250,000,000 Canadian-denominated unsecured term credit facility (approximately $199,856,000 based on the Canadian/U.S. Dollar exchange rate on September 30, 2017). The loan matures on May 13, 2021 and bears interest at the Canadian Dealer Offered Rate plus 95 basis points (2.30% at September 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 (2.19% at September 30, 2017).
(7) On November 20, 2013, we completed the sale of £550,000,000 (approximately $737,110,000 based on the Sterling/U.S. Dollar exchange rate in effect on September 30, 2017) of 4.8% senior unsecured notes due 2028.
(8) On November 25, 2014, we completed the sale of £500,000,000 (approximately $670,100,000 based on the Sterling/U.S. Dollar exchange rate in effect on September 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):

	Nine Months Ended
	September 30, 2017			September 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		7,500	1.940%		705,000	4.228%
Debt extinguished		(5,000)	1.830%		(400,000)	3.625%
Foreign currency		141,855	4.241%		(159,816)	4.443%
Ending balance	$	8,404,393	4.293%	$	8,790,942	4.264%

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

	Nine Months Ended
		September 30, 2017		September 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		190,459	2.730%		193,541	3.053%
Debt assumed		23,094	6.670%		47,156	4.132%
Debt extinguished		(1,003,372)	5.321%		(416,009)	4.986%
Principal payments		(47,507)	4.339%		53,636	3.631%
Foreign currency		92,262	3.196%		(55,889)	4.478%
Ending balance	$	2,720,002	3.735%	$	3,300,642	4.272%

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 September 30, 2017, we were in compliance with all of the covenants under our debt agreements.

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Derivative Instruments

9 Months Ended

Sep. 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 $6,454,000 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 nine months ended September 30, 2017 and 2016, we settled certain net investment hedges generating cash proceeds of $55,771,000 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.

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

		September 30, 2017		December 31, 2016
Derivatives designated as net investment hedges:
Denominated in Canadian Dollars	$	575,000	$	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	$	680,000	$	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				Nine Months Ended
		September 30,				September 30,
	Location		2017		2016		2017		2016
Gain (loss) on forward exchange contracts recognized in income	Interest expense	$	(576)	$	3,420	$	3,613	$	4,789
(Gain) on release of cumulative translation adjustment related to ineffectiveness on net investment hedge	Loss (gain) on derivatives, net		-		(2,516)		-		(2,516)
Gain (loss) on foreign exchange contracts and term loans designated as net investment hedge recognized in OCI	OCI		(98,003)		53,421		(239,884)		229,256

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Commitments and Contingencies

9 Months Ended

Sep. 30, 2017

Commitments and Contingencies [Abstract]

Commitments and Contingencies

12. Commitments and Contingencies

At September 30, 2017, we had 14 outstanding letter of credit obligations totaling $162,629,000 and expiring between 2017 and 2024. At September 30, 2017, we had outstanding construction in progress of $344,742,000 and were committed to providing additional funds of approximately $317,542,000to complete construction. At September 30, 2017, we had contingent purchase obligations totaling $16,053,000. 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. In September 2017, we entered into an agreement with the University of Toledo Foundation to transfer our corporate headquarters as a gift. The gift is conditional based on certain terms within the agreement, which expire on November 30, 2017. Once the conditional terms have been satisfied, we expect to record the expense related to the gift.

     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 September 30, 2017, we had operating lease obligations of $1,105,254,000relating to certain ground leases and company office space and capital lease obligations of $90,288,000relating 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 September 30, 2017, aggregate future minimum rentals to be received under these noncancelable subleases totaled $71,964,000.

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Stockholders' Equity

9 Months Ended

Sep. 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:

	September 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	14,370,065	25,875,000
Common Stock, $1.00 par value:
Authorized shares	700,000,000	700,000,000
Issued shares	371,430,074	363,576,924
Outstanding shares	370,341,635	362,602,173

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

	Nine Months Ended
	September 30, 2017		September 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%
Shares converted	(4,935)	6.500%	-	0.000%
Ending balance	14,370,065	6.500%	25,875,000	0.000%

During the nine months endedSeptember 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 nine months ended September 30, 2017 and 2016 (dollars in thousands, except average price amounts):

	Shares Issued		Average Price		Gross Proceeds		Net Proceeds
2016 Dividend reinvestment plan issuances	3,946,821	$	70.51	$	278,578	$	278,297
2016 Option exercises	137,579		50.57		6,958		6,958
2016 Equity shelf program issuances	3,119,801		75.27		237,131		234,812
2016 Stock incentive plans, net of forfeitures	442,899				-		-
2016 Totals	7,647,100			$	522,667	$	520,067
2017 Dividend reinvestment plan issuances	4,312,447	$	71.14	$	306,785	$	305,996
2017 Option exercises	209,192		50.62		10,590		10,590
2017 Equity shelf program issuances	2,986,574		72.30		215,917		214,406
2017 Preferred stock conversions	4,296				-		-
2017 Redemption of equity membership units	91,180				-		-
2017 Stock incentive plans, net of forfeitures	135,773				-		-
2017 Totals	7,739,462			$	533,292	$	530,992

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):

	Nine Months Ended
	September 30, 2017				September 30, 2016
	Per Share		Amount		Per Share		Amount
Common Stock	$	2.6100	$	955,631	$	2.5800	$	921,381
Series I Preferred Stock		2.4375		35,035		2.4375		35,039
Series J Preferred Stock		0.2347		2,699		1.2189		14,016
Totals			$	993,365			$	970,436

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		48,574		(20,285)		-		2		28,291
Net current-period other comprehensive income		48,574		(20,285)		-		2		28,291
Balance at September 30, 2017	$	(124,922)	$	(15,165)	$	(1,153)	$	-	$	(141,240)
Balance at December 31, 2015	$	(85,484)	$	-	$	(1,343)	$	(1,416)	$	(88,243)
Other comprehensive income before reclassification adjustments		(59,060)		(5,252)		-		11		(64,301)
Reclassification amount to net income		-		-		-		1,360 (1)		1,360
Net current-period other comprehensive income		(59,060)		(5,252)		-		1,371		(62,941)
Balance at September 30, 2016	$	(144,544)	$	(5,252)	$	(1,343)	$	(45)	$	(151,184)
(1) Please see Note 11 for additional information.

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Stock Incentive Plans

9 Months Ended

Sep. 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 $6,790,000 and $16,459,000 for the three and nine months ended September 30, 2017, respectively, and $5,401,000 and $20,618,000 for the same periods in 2016.

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Earnings Per Share

9 Months Ended

Sep. 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				Nine Months Ended
		September 30,				September 30,
		2017		2016		2017		2016
Numerator for basic and diluted earnings
	per share - net income (loss) attributable
	to common stockholders	$	74,043	$	334,910	$	575,118	$	679,353
Denominator for basic earnings per
	share - weighted average shares		369,089		358,932		366,096		356,911
Effect of dilutive securities:
	Employee stock options		40		128		53		119
	Non-vested restricted shares		515		526		464		414
	Redeemable shares		1,096		1,651		1,281		1,308
Dilutive potential common shares			1,651		2,305		1,798		1,841
Denominator for diluted earnings per
	share - adjusted weighted average shares		370,740		361,237		367,894		358,752
Basic earnings per share		$	0.20	$	0.93	$	1.57	$	1.90
Diluted earnings per share		$	0.20	$	0.93	$	1.56	$	1.89

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

9 Months Ended

Sep. 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):

		September 30, 2017				December 31, 2016
		Carrying Amount		Fair Value		Carrying Amount		Fair Value
Financial assets:
	Mortgage loans receivable	$	377,283	$	413,221	$	485,735	$	521,773
	Other real estate loans receivable		119,567		124,408		136,893		138,050
	Available-for-sale equity investments		7,615		7,615		27,899		27,899
	Cash and cash equivalents		236,247		236,247		419,378		419,378
	Foreign currency forward contracts		13,682		13,682		135,561		135,561
Financial liabilities:
	Borrowings under unsecured credit facilities	$	420,000	$	420,000	$	645,000	$	645,000
	Senior unsecured notes		8,315,395		9,186,768		8,161,619		8,879,176
	Secured debt		2,713,513		2,750,467		3,477,699		3,558,378
	Foreign currency forward contracts		55,264		55,264		4,342		4,342
Redeemable OP unitholder interests		$	104,363	$	104,363	$	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 September 30, 2017
	Total		Level 1		Level 2		Level 3
Available-for-sale equity investments(1)	$	7,615	$	7,615	$	-	$	-
Foreign currency forward contracts, net(2)		(41,582)		-		(41,582)		-
Redeemable OP unitholder interests		104,363		-		104,363		-
Totals	$	70,396	$	7,615	$	62,781	$	-
(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 and asset acquisitions using current interest rates at which similar borrowings could be obtained on the transaction date.

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Segment Reporting

9 Months Ended

Sep. 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 September 30, 2017:		Triple-net		Seniors Housing Operating		Outpatient Medical		Non-segment / Corporate		Total
Rental income	$	221,555	$	-	$	141,325	$	-	$	362,880
Resident fees and services		-		702,380		-		-		702,380
Interest income		20,187		-		-		-		20,187
Other income		3,174		1,497		667		698		6,036
Total revenues		244,916		703,877		141,992		698		1,091,483
Property operating expenses		-		478,777		45,220		-		523,997
Consolidated net operating income		244,916		225,100		96,772		698		567,486
Interest expense		3,622		16,369		2,929		99,658		122,578
Loss (gain) on derivatives, net		324		-		-		-		324
Depreciation and amortization		62,891		119,089		48,158		-		230,138
General and administrative		-		-		-		29,913		29,913
Other expenses		89,236 (1)		5,157		530		4,672		99,595
Income (loss) from continuing operations before income taxes and income from unconsolidated entities		88,843		84,485		45,155		(133,545)		84,938
Income tax (expense) benefit		(816)		(1,519)		(366)		2,032		(669)
Income (loss) from unconsolidated entities		5,478		(2,886)		816		-		3,408
Income (loss) from continuing operations		93,505		80,080		45,605		(131,513)		87,677
Gain (loss) on real estate dispositions, net		(185)		(197)		2,004		-		1,622
Net income (loss)	$	93,320	$	79,883	$	47,609	$	(131,513)	$	89,299
Total assets	$	9,463,910	$	13,538,090	$	4,992,534	$	185,845	$	28,180,379
(1) Represents non-capitalizable transaction costs primarily related to a joint venture transaction with an existing seniors housing operator including the conversion of properties from triple-net to seniors housing operating, an exchange of PropCo/OpCo interests, and termination/restructuring of pre-existing relationships.

Three Months Ended September 30, 2016:		Triple-net		Seniors Housing Operating		Outpatient Medical		Non-segment / Corporate		Total
Rental income	$	286,226	$	-	$	134,926	$	-	$	421,152
Resident fees and services		-		630,017		-		-		630,017
Interest income		23,017		1,054		1,009		-		25,080
Other income		1,621		716		358		189		2,884
Total revenues		310,864		631,787		136,293		189		1,079,133
Property operating expenses		-		432,292		41,388		-		473,680
Consolidated net operating income		310,864		199,495		94,905		189		605,453
Interest expense		4,714		20,360		3,986		100,639		129,699
Loss (gain) on derivatives, net		-		-		-		(2,516)		(2,516)
Depreciation and amortization		74,296		97,210		46,555		-		218,061
General and administrative		-		-		-		36,828		36,828
Transaction costs		1,613		18,083		146		-		19,842
Impairment of assets		5,070		-		4,635		-		9,705
Income (loss) from continuing operations before income taxes and income from unconsolidated entities		225,171		63,842		39,583		(134,762)		193,834
Income tax (expense) benefit		(896)		515		417		269		305
Income (loss) from unconsolidated entities		1,998		(3,891)		144		-		(1,749)
Income (loss) from continuing operations		226,273		60,466		40,144		(134,493)		192,390
Gain (loss) on real estate dispositions, net		163,579		-		(1,228)		-		162,351
Net income (loss)	$	389,852	$	60,466	$	38,916	$	(134,493)	$	354,741

Nine Months Ended September 30, 2017:		Triple-net		Seniors Housing Operating		Outpatient Medical		Non-segment / Corporate		Total
Rental income	$	666,735	$	-	$	418,886	$	-	$	1,085,621
Resident fees and services		-		2,049,757		-		-		2,049,757
Interest income		61,767		69		-		-		61,836
Other income		7,496		4,005		2,497		1,171		15,169
Total revenues		735,998		2,053,831		421,383		1,171		3,212,383
Property operating expenses		-		1,400,313		135,708		-		1,536,021
Consolidated net operating income		735,998		653,518		285,675		1,171		1,676,362
Interest expense		11,647		47,587		7,342		290,829		357,405
Loss (gain) on derivatives, net		2,284		-		-		-		2,284
Depreciation and amortization		182,672		356,023		144,567		-		683,262
General and administrative		-		-		-		93,643		93,643
Loss (gain) on extinguishment of debt, net		29,083		3,414		4,373		-		36,870
Impairment of assets		4,846		14,191		5,625		-		24,662
Other expenses		96,425		8,100		2,201		10,882		117,608
Income (loss) from continuing operations before income taxes and income from unconsolidated entities		409,041		224,203		121,567		(394,183)		360,628
Income tax (expense) benefit		(2,070)		9,133		(655)		(873)		5,535
Income (loss) from unconsolidated entities		14,983		(40,527)		1,868		-		(23,676)
Income (loss) from continuing operations		421,954		192,809		122,780		(395,056)		342,487
Gain (loss) on real estate dispositions, net		273,051		12,814		2,004		-		287,869
Net income (loss)	$	695,005	$	205,623	$	124,784	$	(395,056)	$	630,356

Nine Months Ended September 30, 2016:		Triple-net		Seniors Housing Operating		Outpatient Medical		Non-segment / Corporate		Total
Rental income	$	857,184	$	-	$	402,258	$	-	$	1,259,442
Resident fees and services		-		1,847,386		-		-		1,847,386
Interest income		67,842		3,126		3,307		-		74,275
Other income		4,317		11,889		4,824		705		21,735
Total revenues		929,343		1,862,401		410,389		705		3,202,838
Property operating expenses		-		1,259,182		122,966		-		1,382,148
Consolidated net operating income		929,343		603,219		287,423		705		1,820,690
Interest expense		16,832		61,157		15,132		301,864		394,985
Loss (gain) on derivatives, net		-		-		-		(2,516)		(2,516)
Depreciation and amortization		229,906		301,354		142,066		-		673,326
General and administrative		-		-		-		122,434		122,434
Transaction costs		5,760		25,259		2,188		-		33,207
Loss (gain) on extinguishment of debt, net		97		(88)		-		-		9
Impairment of assets		19,384		-		4,635		-		24,019
Other expenses		-		-		-		3,161		3,161
Income (loss) from continuing operations before income taxes and income from unconsolidated entities		657,364		215,537		123,402		(424,238)		572,065
Income tax expense		(1,425)		5,304		(59)		(1,277)		2,543
(Loss) income from unconsolidated entities		8,097		(15,713)		88		-		(7,528)
Income (loss) from continuing operations		664,036		205,128		123,431		(425,515)		567,080
Gain (loss) on real estate dispositions, net		165,109		-		(1,228)		-		163,881
Net income (loss)	$	829,145	$	205,128	$	122,203	$	(425,515)	$	730,961

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

		Three Months Ended						Nine Months Ended
		September 30, 2017			September 30, 2016			September 30, 2017			September 30, 2016
Revenues:		Amount	%		Amount	%		Amount	%		Amount	%
United States	$	871,431	79.9%	$	874,050	81.0%	$	2,582,042	80.4%	$	2,581,533	80.6%
United Kingdom		105,028	9.6%		95,068	8.8%		298,618	9.3%		295,203	9.2%
Canada		115,024	10.5%		110,015	10.2%		331,723	10.3%		326,102	10.2%
Total	$	1,091,483	100.0%	$	1,079,133	100.0%	$	3,212,383	100.0%	$	3,202,838	100.0%
		As of
		September 30, 2017			December 31, 2016
Assets:		Amount	%		Amount	%
United States	$	22,535,209	80.0%	$	23,572,459	81.7%
United Kingdom		3,202,180	11.3%		2,782,489	9.6%
Canada		2,442,990	8.7%		2,510,236	8.7%
Total	$	28,180,379	100.0%	$	28,865,184	100.0%

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Income Taxes and Distributions

9 Months Ended

Sep. 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 nine months ended September 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

9 Months Ended

Sep. 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 VIEs 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 VIEs in the aggregate (in thousands):

		September 30, 2017		December 31, 2016
Assets
	Net real property owned	$	1,010,638	$	989,596
	Cash and cash equivalents		11,874		10,501
	Receivables and other assets		18,920		12,102
	Total assets(1)	$	1,041,432	$	1,012,199
Liabilities and equity
	Secured debt	$	472,445	$	450,255
	Accrued expenses and other liabilities		16,982		13,803
	Redeemable noncontrolling interests		176,591		185,556
	Total equity		375,414		362,585
	Total liabilities and equity	$	1,041,432	$	1,012,199
(1) Note that assets of the consolidated VIEs can only be used to settle obligations relating to such VIEs. Liabilities of the consolidated VIEs represent claims against the specific assets of the VIEs.

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Accounting Policies and Related Matters (Policies)

9 Months Ended

Sep. 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 (such as normal recurring accruals) considered necessary for a fair presentation have been included. Operating results for the nine months ended September 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 Accounting Standards Update (“ASU”) No. 2014-09, “Revenue from Contracts with Customers (Topic 606),” which 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 ASU 2014-09. We anticipate that we will be required to separately disclose the components of total revenue between lease revenue accounted for under existing leasing guidance and service revenue accounted for under ASU 2014-09, including non-lease components such as certain services embedded in base leasing fees. 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,” which 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. 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, and we 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 aspect of the 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 $7,822,000 for thenine months ended September 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,” which 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,” which 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 nine months endedSeptember 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.

In August 2017, the FASB issued ASU 2017-12, “Derivatives and Hedging: Targeted Improvements to Accounting for Hedging Activities,” which expands and refines hedge accounting for both nonfinancial and financial risk components and aligns the recognition and presentation of the effects of the hedging instrument and the hedged item in the financial statements. It also includes certain targeted improvements to simplify the application of current guidance related to hedge accounting. The standard is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2018, with early adoption permitted. We are currently in the process of evaluating the effects this standard will have on our consolidated financial statements.

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Real Property Acquisitions and Development (Tables)

9 Months Ended

Sep. 30, 2017

Real property acquisitions and development [Line Items]

Estimated Fair Value of Allocated Purchase Price of Asset and Liabilities

Triple-net Activity

		Nine Months Ended
(In thousands)		September 30, 2017			September 30, 2016
Land and land improvements			$	31,948		$	21,713
Buildings and improvements				206,910			220,274
Acquired lease intangibles				-			2,876
	Total assets acquired			238,858			244,863
Accrued expenses and other liabilities				(21,236)			(2,145)
	Total liabilities assumed			(21,236)			(2,145)
Noncontrolling interests				(7,275)			(3,162)
Non-cash acquisition related activity(1)				(54,901)			(51,733)
	Cash disbursed for acquisitions			155,446			187,823
Construction in progress additions				106,186			133,611
Less:	Capitalized interest			(3,886)			(6,263)
	Foreign currency translation			(656)			(3,179)
Cash disbursed for construction in progress				101,644			124,169
Capital improvements to existing properties				17,873			21,447
	Total cash invested in real property, net of cash acquired		$	274,963		$	333,439
(1) For the nine months ended September 30, 2017, $54,901,000 is related to the acquisition of assets previously financed as real estate loans receivable. For the nine months ended September 30, 2016, $45,044,000 is related to the acquisition of assets previously financed as real estate loans receivable and $6,689,000 is related to the acquisition of assets previously financed as an investment in an unconsolidated entity.

Seniors Housing Operating Activity

		Nine Months Ended
(In thousands)		September 30, 2017			September 30, 2016
Land and land improvements			$	31,006		$	122,649
Building and improvements				384,522			1,108,195
Acquired lease intangibles				48,197			90,771
Restricted cash				1,692			137
Receivables and other assets				3,164			2,179
	Total assets acquired(1)			468,581			1,323,931
Secured debt				-			(49,381)
Accrued expenses and other liabilities				(43,364)			(12,328)
	Total liabilities assumed			(43,364)			(61,709)
Noncontrolling interests				(4,701)			(1,089)
Non-cash acquisition related activity(2)				(59,065)			(17,477)
	Cash disbursed for acquisitions			361,451			1,243,656
Construction in progress additions				65,282			139,160
Less:	Capitalized interest			(5,996)			(3,923)
	Foreign currency translation			(6,218)			(5,953)
Cash disbursed for construction in progress				53,068			129,284
Capital improvements to existing properties				110,372			84,444
	Total cash invested in real property, net of cash acquired		$	524,891		$	1,457,384
(1) Excludes $4,581,000and $135,000 of cash acquired during the nine months ended September 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 nine months ended September 30, 2017. Includes $51,097,000 and $17,477,000 for the nine months ended September 30, 2017 and 2016, respectively, related to the acquisition of assets previously financed as an investments in an unconsolidated entity.

Outpatient Medical Activity

		Nine Months Ended
(In thousands)		September 30, 2017			September 30, 2016
Land and land improvements			$	25,060	$	1,466
Buildings and improvements				62,336		27,272
Acquired lease intangibles				8,397		4,592
Receivables and other assets				3		-
	Total assets acquired			95,796		33,330
Secured debt				(25,709)		-
Accrued expenses and other liabilities				(2,210)		(1,670)
	Total liabilities assumed			(27,919)		(1,670)
Noncontrolling interests				(9,080)		-
Non-cash acquisition activity(1)				-		(15,013)
	Cash disbursed for acquisitions			58,797		16,647
Construction in progress additions				33,495		81,843
Less:	Capitalized interest			(1,847)		(2,588)
	Accruals(2)			11,708		(7,336)
Cash disbursed for construction in progress				43,356		71,919
Capital improvements to existing properties				30,897		35,309
	Total cash invested in real property		$	133,050	$	123,875
(1) Represents the acquisition of assets previously financed as real estate loans receivable.
(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

			Nine Months Ended
			September 30, 2017			September 30, 2016
	Development projects:
		Triple-net		$	283,472		$	24,535
		Seniors housing operating			3,634			-
		Outpatient medical			63,036			44,113
	Total development projects				350,142			68,648
	Expansion projects				10,336			2,879
Total construction in progress conversions				$	360,478		$	71,527

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Real Estate Intangibles (Tables)

9 Months Ended

Sep. 30, 2017

Real Estate Intangibles (Tables) [Abstract]

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

		September 30, 2017		December 31, 2016
Assets:
	In place lease intangibles	$	1,333,368	$	1,252,143
	Above market tenant leases		64,408		61,700
	Below market ground leases		62,224		61,628
	Lease commissions		32,279		27,413
	Gross historical cost		1,492,279		1,402,884
	Accumulated amortization		(1,098,814)		(966,714)
	Net book value	$	393,465	$	436,170
	Weighted-average amortization period in years		14.5		13.7
Liabilities:
	Below market tenant leases	$	90,671	$	89,468
	Above market ground leases		8,540		8,107
	Gross historical cost		99,211		97,575
	Accumulated amortization		(57,449)		(52,134)
	Net book value	$	41,762	$	45,441
	Weighted-average amortization period in years		15.5		15.2

Schedule of Real Estate Intangible Amortization

	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2017		2016		2017		2016
Rental income related to above/below market tenant leases, net	$	173	$	278	$	745	$	569
Property operating expenses related to above/below market ground leases, net		(306)		(309)		(925)		(931)
Depreciation and amortization related to in place lease intangibles and lease commissions		(34,270)		(30,137)		(109,011)		(95,610)

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

		Assets		Liabilities
2017	$	39,678	$	1,636
2018		104,524		6,190
2019		50,051		5,731
2020		30,582		5,234
2021		20,918		4,746
Thereafter		147,712		18,225
Total	$	393,465	$	41,762

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

9 Months Ended

Sep. 30, 2017

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

Summary of real property disposition activity

		Nine Months Ended
		September 30, 2017			September 30, 2016
Real estate dispositions:
	Triple-net		$	899,104		$	295,365
	Seniors housing operating			16,206			-
	Outpatient medical			12,202			78,786
	Total dispositions			927,512			374,151
Gain (loss) on real estate dispositions, net				287,869			163,881
	Net other assets/liabilities disposed			22,470			-
Proceeds from real estate dispositions			$	1,237,851		$	538,032

Summary of disposed properties.

			Three Months Ended				Nine Months Ended
			September 30,				September 30,
		2017		2016		2017		2016
Revenues:
	Rental income	$	1,955	$	31,966	$	23,255	$	99,057
Expenses:
	Interest expense		-		4,939		1,714		16,697
	Property operating expenses		2,111		1,476		7,209		4,411
	Provision for depreciation		26		4,604		1,167		20,873
	Total expenses		2,137		11,019		10,090		41,981
Income (loss) from real estate dispositions, net		$	(182)	$	20,947	$	13,165	$	57,076

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Real Estate Loans Receivable (Tables)

9 Months Ended

Sep. 30, 2017

Real Estate Loans Receivable (Tables) [Abstract]

Summary of real estate loan activity

		Nine Months Ended
		September 30, 2017						September 30, 2016
				Outpatient						Outpatient
		Triple-net		Medical		Totals		Triple-net		Medical		Totals
Advances on real estate loans receivable:
	Investments in new loans	$	11,315	$	-	$	11,315	$	8,223	$	-	$	8,223
	Draws on existing loans		58,736		-		58,736		94,622		2,651		97,273
	Net cash advances on real estate loans		70,051		-		70,051		102,845		2,651		105,496
Receipts on real estate loans receivable:
	Loan payoffs		142,392		60,500		202,892		251,293		27,303		278,596
	Principal payments on loans		1,121		-		1,121		6,553		-		6,553
	Sub-total		143,513		60,500		204,013		257,846		27,303		285,149
	Less: Non-cash activity(1)(2)		(61,250)		(60,500)		(121,750)		(45,044)		(15,013)		(60,057)
	Net cash receipts on real estate loans		82,263		-		82,263		212,802		12,290		225,092
Net cash advances (receipts) on real estate loans			(12,212)		-		(12,212)		(109,957)		(9,639)		(119,596)
Change in balance due to foreign currency translation			8,183		-		8,183		(9,819)		-		(9,819)
Net change in real estate loans receivable		$	(65,279)	$	(60,500)	$	(125,779)	$	(164,820)	$	(24,652)	$	(189,472)
(1) Triple-net and prior year outpatient medical represents acquisitions of assets previously financed as real estate loans.
(2) Current year outpatient medical represents a deed in lieu of foreclosure on a previously financed first mortgage property.

		Nine Months Ended
	September 30, 2017		September 30, 2016
Balance of impaired loans at end of period	$	282,929	$	-
Allowance for loan losses		5,406		-
Balance of impaired loans not reserved	$	277,523	$	-
Average impaired loans for the period	$	324,255	$	-
Interest recognized on impaired loans		23,957		-

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Investments in Unconsolidated Entities (Tables)

9 Months Ended

Sep. 30, 2017

Investments In Unconsolidated Entities [Abstract]

Summary Of Investments In Unconsolidated Entities [Text Block]

	Percentage Ownership(1)	September 30, 2017		December 31, 2016
Triple-net	10% to 49%	$	22,543	$	27,005
Seniors housing operating	10% to 50%		332,390		407,172
Outpatient medical	43%		52,574		22,961
Total		$	407,507	$	457,138
(1) Excludes ownership of in-substance real estate.

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Credit Concentration (Tables)

9 Months Ended

Sep. 30, 2017

Customer Concentration (Tables) [Abstract]

Summary of credit concentration

		Number of	Total		Percent of
Concentration by relationship:(1)		Properties	NOI		NOI(2)
	Sunrise Senior Living(3)	157		235,814	14%
	Genesis Healthcare	86	$	149,345	9%
	Revera(3)	98		117,124	7%
	Brookdale Senior Living	137		113,466	7%
	Benchmark Senior Living	48		74,070	4%
	Remaining portfolio	752		986,543	59%
	Totals	1,278	$	1,676,362	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)

9 Months Ended

Sep. 30, 2017

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

Aggregate borrowings under the unsecured line of credit arrangements

		Three Months Ended September 30,				Nine Months Ended September 30,
		2017		2016		2017		2016
Balance outstanding at quarter end(1)		$	420,000	$	1,350,000	$	420,000	$	1,350,000
Maximum amount outstanding at any month end		$	645,000	$	1,560,000	$	1,010,000	$	1,560,000
Average amount outstanding (total of daily
	principal balances divided by days in period)	$	450,130	$	1,050,217	$	601,436	$	782,427
Weighted average interest rate (actual interest
	expense divided by average borrowings outstanding)		2.19%		1.44%		1.95%		1.35%
(1) As of September 30, 2017, letters of credit in the aggregate amount of $25,576,000 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)

9 Months Ended

Sep. 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	$	-	$	121,412	$	121,412
2018		450,000		426,728		876,728
2019		600,000		491,941		1,091,941
2020(4)		697,327		184,281		881,608
2021(5,6)		1,149,856		221,721		1,371,577
Thereafter(7,8,9,10)		5,507,210		1,273,919		6,781,129
Totals	$	8,404,393	$	2,720,002	$	11,124,395
(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 1.9% to 6.5%.
(3) Annual interest rates range from 1.45% to 7.98%. Carrying value of the properties securing the debt totaled $5,766,501,000 at September 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 $239,827,000 based on the Canadian/U.S. Dollar exchange rate on September 30, 2017).
(5) On May 13, 2016, we refinanced the funding on a $250,000,000 Canadian-denominated unsecured term credit facility (approximately $199,856,000 based on the Canadian/U.S. Dollar exchange rate on September 30, 2017). The loan matures on May 13, 2021 and bears interest at the Canadian Dealer Offered Rate plus 95 basis points (2.30% at September 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 (2.19% at September 30, 2017).
(7) On November 20, 2013, we completed the sale of £550,000,000 (approximately $737,110,000 based on the Sterling/U.S. Dollar exchange rate in effect on September 30, 2017) of 4.8% senior unsecured notes due 2028.
(8) On November 25, 2014, we completed the sale of £500,000,000 (approximately $670,100,000 based on the Sterling/U.S. Dollar exchange rate in effect on September 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

	Nine Months Ended
	September 30, 2017			September 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		7,500	1.940%		705,000	4.228%
Debt extinguished		(5,000)	1.830%		(400,000)	3.625%
Foreign currency		141,855	4.241%		(159,816)	4.443%
Ending balance	$	8,404,393	4.293%	$	8,790,942	4.264%

Secured debt principal activity

	Nine Months Ended
		September 30, 2017		September 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		190,459	2.730%		193,541	3.053%
Debt assumed		23,094	6.670%		47,156	4.132%
Debt extinguished		(1,003,372)	5.321%		(416,009)	4.986%
Principal payments		(47,507)	4.339%		53,636	3.631%
Foreign currency		92,262	3.196%		(55,889)	4.478%
Ending balance	$	2,720,002	3.735%	$	3,300,642	4.272%

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Derivative Instruments (Tables)

9 Months Ended

Sep. 30, 2017

Derivative Instruments (Tables) [Abstract]

Impact of derivative instruments on the statement of operations and OCI

		September 30, 2017		December 31, 2016
Derivatives designated as net investment hedges:
Denominated in Canadian Dollars	$	575,000	$	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	$	680,000	$	37,000

		Three Months Ended				Nine Months Ended
		September 30,				September 30,
	Location		2017		2016		2017		2016
Gain (loss) on forward exchange contracts recognized in income	Interest expense	$	(576)	$	3,420	$	3,613	$	4,789
(Gain) on release of cumulative translation adjustment related to ineffectiveness on net investment hedge	Loss (gain) on derivatives, net		-		(2,516)		-		(2,516)
Gain (loss) on foreign exchange contracts and term loans designated as net investment hedge recognized in OCI	OCI		(98,003)		53,421		(239,884)		229,256

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Stockholders' Equity (Tables)

9 Months Ended

Sep. 30, 2017

Stockholders' Equity (Tables) [Abstract]

Summary of stockholder's equity capital accounts

	September 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	14,370,065	25,875,000
Common Stock, $1.00 par value:
Authorized shares	700,000,000	700,000,000
Issued shares	371,430,074	363,576,924
Outstanding shares	370,341,635	362,602,173

Summary of preferred stock activity

	Nine Months Ended
	September 30, 2017		September 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%
Shares converted	(4,935)	6.500%	-	0.000%
Ending balance	14,370,065	6.500%	25,875,000	0.000%

Summary of common stock issuances

	Shares Issued		Average Price		Gross Proceeds		Net Proceeds
2016 Dividend reinvestment plan issuances	3,946,821	$	70.51	$	278,578	$	278,297
2016 Option exercises	137,579		50.57		6,958		6,958
2016 Equity shelf program issuances	3,119,801		75.27		237,131		234,812
2016 Stock incentive plans, net of forfeitures	442,899				-		-
2016 Totals	7,647,100			$	522,667	$	520,067
2017 Dividend reinvestment plan issuances	4,312,447	$	71.14	$	306,785	$	305,996
2017 Option exercises	209,192		50.62		10,590		10,590
2017 Equity shelf program issuances	2,986,574		72.30		215,917		214,406
2017 Preferred stock conversions	4,296				-		-
2017 Redemption of equity membership units	91,180				-		-
2017 Stock incentive plans, net of forfeitures	135,773				-		-
2017 Totals	7,739,462			$	533,292	$	530,992

Summary of dividend payments

	Nine Months Ended
	September 30, 2017				September 30, 2016
	Per Share		Amount		Per Share		Amount
Common Stock	$	2.6100	$	955,631	$	2.5800	$	921,381
Series I Preferred Stock		2.4375		35,035		2.4375		35,039
Series J Preferred Stock		0.2347		2,699		1.2189		14,016
Totals			$	993,365			$	970,436

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		48,574		(20,285)		-		2		28,291
Net current-period other comprehensive income		48,574		(20,285)		-		2		28,291
Balance at September 30, 2017	$	(124,922)	$	(15,165)	$	(1,153)	$	-	$	(141,240)
Balance at December 31, 2015	$	(85,484)	$	-	$	(1,343)	$	(1,416)	$	(88,243)
Other comprehensive income before reclassification adjustments		(59,060)		(5,252)		-		11		(64,301)
Reclassification amount to net income		-		-		-		1,360 (1)		1,360
Net current-period other comprehensive income		(59,060)		(5,252)		-		1,371		(62,941)
Balance at September 30, 2016	$	(144,544)	$	(5,252)	$	(1,343)	$	(45)	$	(151,184)
(1) Please see Note 11 for additional information.

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Earnings Per Share (Tables)

9 Months Ended

Sep. 30, 2017

Earnings Per Share (Tables) [Abstract]

Computation of basic and diluted earnings per share

		Three Months Ended				Nine Months Ended
		September 30,				September 30,
		2017		2016		2017		2016
Numerator for basic and diluted earnings
	per share - net income (loss) attributable
	to common stockholders	$	74,043	$	334,910	$	575,118	$	679,353
Denominator for basic earnings per
	share - weighted average shares		369,089		358,932		366,096		356,911
Effect of dilutive securities:
	Employee stock options		40		128		53		119
	Non-vested restricted shares		515		526		464		414
	Redeemable shares		1,096		1,651		1,281		1,308
Dilutive potential common shares			1,651		2,305		1,798		1,841
Denominator for diluted earnings per
	share - adjusted weighted average shares		370,740		361,237		367,894		358,752
Basic earnings per share		$	0.20	$	0.93	$	1.57	$	1.90
Diluted earnings per share		$	0.20	$	0.93	$	1.56	$	1.89

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Disclosure about Fair Value of Financial Instruments (Tables)

9 Months Ended

Sep. 30, 2017

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

Carrying amounts and estimated fair values of financial instruments

		September 30, 2017				December 31, 2016
		Carrying Amount		Fair Value		Carrying Amount		Fair Value
Financial assets:
	Mortgage loans receivable	$	377,283	$	413,221	$	485,735	$	521,773
	Other real estate loans receivable		119,567		124,408		136,893		138,050
	Available-for-sale equity investments		7,615		7,615		27,899		27,899
	Cash and cash equivalents		236,247		236,247		419,378		419,378
	Foreign currency forward contracts		13,682		13,682		135,561		135,561
Financial liabilities:
	Borrowings under unsecured credit facilities	$	420,000	$	420,000	$	645,000	$	645,000
	Senior unsecured notes		8,315,395		9,186,768		8,161,619		8,879,176
	Secured debt		2,713,513		2,750,467		3,477,699		3,558,378
	Foreign currency forward contracts		55,264		55,264		4,342		4,342
Redeemable OP unitholder interests		$	104,363	$	104,363	$	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 September 30, 2017
	Total		Level 1		Level 2		Level 3
Available-for-sale equity investments(1)	$	7,615	$	7,615	$	-	$	-
Foreign currency forward contracts, net(2)		(41,582)		-		(41,582)		-
Redeemable OP unitholder interests		104,363		-		104,363		-
Totals	$	70,396	$	7,615	$	62,781	$	-
(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)

9 Months Ended

Sep. 30, 2017

Segment Reporting (Tables) [Abstract]

Summary of information for reportable segments

Three Months Ended September 30, 2017:		Triple-net		Seniors Housing Operating		Outpatient Medical		Non-segment / Corporate		Total
Rental income	$	221,555	$	-	$	141,325	$	-	$	362,880
Resident fees and services		-		702,380		-		-		702,380
Interest income		20,187		-		-		-		20,187
Other income		3,174		1,497		667		698		6,036
Total revenues		244,916		703,877		141,992		698		1,091,483
Property operating expenses		-		478,777		45,220		-		523,997
Consolidated net operating income		244,916		225,100		96,772		698		567,486
Interest expense		3,622		16,369		2,929		99,658		122,578
Loss (gain) on derivatives, net		324		-		-		-		324
Depreciation and amortization		62,891		119,089		48,158		-		230,138
General and administrative		-		-		-		29,913		29,913
Other expenses		89,236 (1)		5,157		530		4,672		99,595
Income (loss) from continuing operations before income taxes and income from unconsolidated entities		88,843		84,485		45,155		(133,545)		84,938
Income tax (expense) benefit		(816)		(1,519)		(366)		2,032		(669)
Income (loss) from unconsolidated entities		5,478		(2,886)		816		-		3,408
Income (loss) from continuing operations		93,505		80,080		45,605		(131,513)		87,677
Gain (loss) on real estate dispositions, net		(185)		(197)		2,004		-		1,622
Net income (loss)	$	93,320	$	79,883	$	47,609	$	(131,513)	$	89,299
Total assets	$	9,463,910	$	13,538,090	$	4,992,534	$	185,845	$	28,180,379
(1) Represents non-capitalizable transaction costs primarily related to a joint venture transaction with an existing seniors housing operator including the conversion of properties from triple-net to seniors housing operating, an exchange of PropCo/OpCo interests, and termination/restructuring of pre-existing relationships.

Three Months Ended September 30, 2016:		Triple-net		Seniors Housing Operating		Outpatient Medical		Non-segment / Corporate		Total
Rental income	$	286,226	$	-	$	134,926	$	-	$	421,152
Resident fees and services		-		630,017		-		-		630,017
Interest income		23,017		1,054		1,009		-		25,080
Other income		1,621		716		358		189		2,884
Total revenues		310,864		631,787		136,293		189		1,079,133
Property operating expenses		-		432,292		41,388		-		473,680
Consolidated net operating income		310,864		199,495		94,905		189		605,453
Interest expense		4,714		20,360		3,986		100,639		129,699
Loss (gain) on derivatives, net		-		-		-		(2,516)		(2,516)
Depreciation and amortization		74,296		97,210		46,555		-		218,061
General and administrative		-		-		-		36,828		36,828
Transaction costs		1,613		18,083		146		-		19,842
Impairment of assets		5,070		-		4,635		-		9,705
Income (loss) from continuing operations before income taxes and income from unconsolidated entities		225,171		63,842		39,583		(134,762)		193,834
Income tax (expense) benefit		(896)		515		417		269		305
Income (loss) from unconsolidated entities		1,998		(3,891)		144		-		(1,749)
Income (loss) from continuing operations		226,273		60,466		40,144		(134,493)		192,390
Gain (loss) on real estate dispositions, net		163,579		-		(1,228)		-		162,351
Net income (loss)	$	389,852	$	60,466	$	38,916	$	(134,493)	$	354,741

Nine Months Ended September 30, 2017:		Triple-net		Seniors Housing Operating		Outpatient Medical		Non-segment / Corporate		Total
Rental income	$	666,735	$	-	$	418,886	$	-	$	1,085,621
Resident fees and services		-		2,049,757		-		-		2,049,757
Interest income		61,767		69		-		-		61,836
Other income		7,496		4,005		2,497		1,171		15,169
Total revenues		735,998		2,053,831		421,383		1,171		3,212,383
Property operating expenses		-		1,400,313		135,708		-		1,536,021
Consolidated net operating income		735,998		653,518		285,675		1,171		1,676,362
Interest expense		11,647		47,587		7,342		290,829		357,405
Loss (gain) on derivatives, net		2,284		-		-		-		2,284
Depreciation and amortization		182,672		356,023		144,567		-		683,262
General and administrative		-		-		-		93,643		93,643
Loss (gain) on extinguishment of debt, net		29,083		3,414		4,373		-		36,870
Impairment of assets		4,846		14,191		5,625		-		24,662
Other expenses		96,425		8,100		2,201		10,882		117,608
Income (loss) from continuing operations before income taxes and income from unconsolidated entities		409,041		224,203		121,567		(394,183)		360,628
Income tax (expense) benefit		(2,070)		9,133		(655)		(873)		5,535
Income (loss) from unconsolidated entities		14,983		(40,527)		1,868		-		(23,676)
Income (loss) from continuing operations		421,954		192,809		122,780		(395,056)		342,487
Gain (loss) on real estate dispositions, net		273,051		12,814		2,004		-		287,869
Net income (loss)	$	695,005	$	205,623	$	124,784	$	(395,056)	$	630,356

Nine Months Ended September 30, 2016:		Triple-net		Seniors Housing Operating		Outpatient Medical		Non-segment / Corporate		Total
Rental income	$	857,184	$	-	$	402,258	$	-	$	1,259,442
Resident fees and services		-		1,847,386		-		-		1,847,386
Interest income		67,842		3,126		3,307		-		74,275
Other income		4,317		11,889		4,824		705		21,735
Total revenues		929,343		1,862,401		410,389		705		3,202,838
Property operating expenses		-		1,259,182		122,966		-		1,382,148
Consolidated net operating income		929,343		603,219		287,423		705		1,820,690
Interest expense		16,832		61,157		15,132		301,864		394,985
Loss (gain) on derivatives, net		-		-		-		(2,516)		(2,516)
Depreciation and amortization		229,906		301,354		142,066		-		673,326
General and administrative		-		-		-		122,434		122,434
Transaction costs		5,760		25,259		2,188		-		33,207
Loss (gain) on extinguishment of debt, net		97		(88)		-		-		9
Impairment of assets		19,384		-		4,635		-		24,019
Other expenses		-		-		-		3,161		3,161
Income (loss) from continuing operations before income taxes and income from unconsolidated entities		657,364		215,537		123,402		(424,238)		572,065
Income tax expense		(1,425)		5,304		(59)		(1,277)		2,543
(Loss) income from unconsolidated entities		8,097		(15,713)		88		-		(7,528)
Income (loss) from continuing operations		664,036		205,128		123,431		(425,515)		567,080
Gain (loss) on real estate dispositions, net		165,109		-		(1,228)		-		163,881
Net income (loss)	$	829,145	$	205,128	$	122,203	$	(425,515)	$	730,961

		Three Months Ended						Nine Months Ended
		September 30, 2017			September 30, 2016			September 30, 2017			September 30, 2016
Revenues:		Amount	%		Amount	%		Amount	%		Amount	%
United States	$	871,431	79.9%	$	874,050	81.0%	$	2,582,042	80.4%	$	2,581,533	80.6%
United Kingdom		105,028	9.6%		95,068	8.8%		298,618	9.3%		295,203	9.2%
Canada		115,024	10.5%		110,015	10.2%		331,723	10.3%		326,102	10.2%
Total	$	1,091,483	100.0%	$	1,079,133	100.0%	$	3,212,383	100.0%	$	3,202,838	100.0%
		As of
		September 30, 2017			December 31, 2016
Assets:		Amount	%		Amount	%
United States	$	22,535,209	80.0%	$	23,572,459	81.7%
United Kingdom		3,202,180	11.3%		2,782,489	9.6%
Canada		2,442,990	8.7%		2,510,236	8.7%
Total	$	28,180,379	100.0%	$	28,865,184	100.0%

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Variable Interest Entity Disclosure (Tables)

9 Months Ended

Sep. 30, 2017

Variable Interest Entity Disclosure [Abstract]

Schedule of Variable Interest Entities [Table Text Block]

		September 30, 2017		December 31, 2016
Assets
	Net real property owned	$	1,010,638	$	989,596
	Cash and cash equivalents		11,874		10,501
	Receivables and other assets		18,920		12,102
	Total assets(1)	$	1,041,432	$	1,012,199
Liabilities and equity
	Secured debt	$	472,445	$	450,255
	Accrued expenses and other liabilities		16,982		13,803
	Redeemable noncontrolling interests		176,591		185,556
	Total equity		375,414		362,585
	Total liabilities and equity	$	1,041,432	$	1,012,199
(1) Note that assets of the consolidated VIEs can only be used to settle obligations relating to such VIEs. Liabilities of the consolidated VIEs represent claims against the specific assets of the VIEs.

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Accounting Policies and Related Matters (Details) $ in Thousands	9 Months Ended
	Sep. 30, 2016 USD ($)
Accounting Policies and Related Matters [Abstract]
Payments Related to Tax Withholding for Share-based Compensation	$ 7,822

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Real Property Acquisitions and Development (Details 1) - USD ($) $ in Thousands		9 Months Ended
		Sep. 30, 2017	Sep. 30, 2016
Triple Net [Member]
Estimated Fair Value of Allocated Purchase Price of Asset and Liabilities
Land and land improvements		$ 31,948	$ 21,713
Buildings and improvements		206,910	220,274
Acquired lease intangibles		0	2,876
Total assets acquired		238,858	244,863
Accrued expenses and other liabilities		(21,236)	(2,145)
Total liabilities assumed		(21,236)	(2,145)
Noncontrolling interests		(7,275)	(3,162)
Non-cash acquisition related activity	[1]	(54,901)	(51,733)
Cash disbursed for acquisitions		155,446	187,823
Construction in progress additions		106,186	133,611
Less: Capitalized Interest		(3,886)	(6,263)
Less: Foreign currency translation		(656)	(3,179)
Cash disbursed for construction in progress		101,644	124,169
Capital improvements to existing properties		17,873	21,447
Total cash invested in real property		274,963	333,439
Non Cash Acquisition Financed As Real Estate Loan Receivable		54,901	45,044
Non cash acquisition financed as equity investments			6,689
Senior housing - operating [Member]
Estimated Fair Value of Allocated Purchase Price of Asset and Liabilities
Land and land improvements		31,006	122,649
Buildings and improvements		384,522	1,108,195
Acquired lease intangibles		48,197	90,771
Restricted cash		1,692	137
Receivables and other assets		3,164	2,179
Total assets acquired	[2]	468,581	1,323,931
Secured debt		0	(49,381)
Accrued expenses and other liabilities		(43,364)	(12,328)
Total liabilities assumed		(43,364)	(61,709)
Noncontrolling interests		(4,701)	(1,089)
Non-cash acquisition related activity	[3]	(59,065)	(17,477)
Cash disbursed for acquisitions		361,451	1,243,656
Construction in progress additions		65,282	139,160
Less: Capitalized Interest		(5,996)	(3,923)
Less: Foreign currency translation		(6,218)	(5,953)
Cash disbursed for construction in progress		53,068	129,284
Capital improvements to existing properties		110,372	84,444
Total cash invested in real property		524,891	1,457,384
Cash Acquired from Acquisition		4,581	135
Non Cash Acquisition Financed As Real Estate Loan Receivable		6,349
Non cash acquisition financed as equity investments		51,097	17,477
Outpatient Medical [Member]
Estimated Fair Value of Allocated Purchase Price of Asset and Liabilities
Land and land improvements		25,060	1,466
Buildings and improvements		62,336	27,272
Acquired lease intangibles		8,397	4,592
Receivables and other assets		3	0
Total assets acquired		95,796	33,330
Secured debt		(25,709)	0
Accrued expenses and other liabilities		(2,210)	(1,670)
Total liabilities assumed		(27,919)	(1,670)
Noncontrolling interests		(9,080)	0
Non-cash acquisition related activity	[4]	0	(15,013)
Cash disbursed for acquisitions		58,797	16,647
Construction in progress additions		33,495	81,843
Less: Capitalized Interest		(1,847)	(2,588)
Less: Accruals	[5]	11,708	(7,336)
Cash disbursed for construction in progress		43,356	71,919
Capital improvements to existing properties		30,897	35,309
Total cash invested in real property		$ 133,050	$ 123,875

[1] For the nine months ended September 30, 2017, $54,901,000 is related to the acquisition of assets previously financed as real estate loans receivable. For the nine months ended September 30, 2016, $45,044,000 is related to the acquisition of assets previously financed as real estate loans receivable and $6,689,000 is related to the acquisition of assets previously financed as an investment in an unconsolidated entity.

[2] Excludes $4,581,000 and $135,000 of cash acquired during the nine months ended September 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 nine months ended September 30, 2017. Includes $51,097,000 and $17,477,000 for the nine months ended September 30, 2017 and 2016, respectively, 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.

[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	9 Months Ended
	Sep. 30, 2017	Sep. 30, 2016
Development projects:
Total development projects	$ 350,142	$ 68,648
Expansion projects	10,336	2,879
Total construction in progress conversions	360,478	71,527
Triple Net [Member]
Development projects:
Total development projects	283,472	24,535
Seniors housing operating [Member]
Development projects:
Total development projects	3,634	0
Outpatient Medical [Member]
Development projects:
Total development projects	$ 63,036	$ 44,113

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Real Estate Intangibles (Details) - USD ($) $ in Thousands	9 Months Ended	12 Months Ended
	Sep. 30, 2017	Dec. 31, 2016
Intangible Assets:
Gross historical cost	$ 1,492,279	$ 1,402,884
Accumulated amortization	(1,098,814)	(966,714)
Net book value	$ 393,465	$ 436,170
Weighted-average amortization period in years	14 years 6 months	13 years 8 months
Intangible Liabilities:
Gross historical cost	$ 99,211	$ 97,575
Accumulated amortization	(57,449)	(52,134)
Net book value	$ 41,762	$ 45,441
Weighted-average amortization period in years	15 years 6 months	15 years 2 months
In place lease intangibles [Member]
Intangible Assets:
Gross historical cost	$ 1,333,368	$ 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	32,279	27,413
Below market tenant leases [Member]
Intangible Liabilities:
Gross historical cost	90,671	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	Sep. 30, 2017	Dec. 31, 2016
Estimated Aggregate Amortization Expense For Acquired Lease Intangibles Expected To Be Recognized [Line Items]
Totals	$ 393,465	$ 436,170
Intangible Liability [Member]
Estimated Aggregate Amortization Expense For Acquired Lease Intangibles Expected To Be Recognized [Line Items]
2017	1,636
2018	6,190
2019	5,731
2020	5,234
2021	4,746
Thereafter	18,225
Totals	41,762
Intangible Asset [Member]
Estimated Aggregate Amortization Expense For Acquired Lease Intangibles Expected To Be Recognized [Line Items]
2017	39,678
2018	104,524
2019	50,051
2020	30,582
2021	20,918
Thereafter	147,712
Totals	$ 393,465

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Real Estate Intangibles (Details 1) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2017	Sep. 30, 2016	Sep. 30, 2017	Sep. 30, 2016
Real Estate Intangible Amortization [Abstract]
Rental income related to above/below market tenant leases, net	$ 173	$ 278	$ 745	$ 569
Property operating expenses related to above/below market ground leases, net	(306)	(309)	(925)	(931)
Depreciation and amortization related to in place lease intangibles and lease commissions	$ (34,270)	$ (30,137)	$ (109,011)	$ (95,610)

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Dispositions, Assets Held for Sale and Discontinued Operations (Details) - USD ($) $ in Thousands	9 Months Ended
	Sep. 30, 2017	Sep. 30, 2016
Real property dispositions:
Total dispositions	$ 927,512	$ 374,151
Gain (loss) on sale of properties	287,869	163,881
Net other assets/liabilities disposed	22,470	0
Proceeds from sales of real property	1,237,851	538,032
Triple Net [Member]
Real property dispositions:
Total dispositions	899,104	295,365
Senior housing - operating [Member]
Real property dispositions:
Total dispositions	16,206	0
Outpatient Medical [Member]
Real property dispositions:
Total dispositions	$ 12,202	$ 78,786

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Dispositions, Assets Held for Sale and Discontinued Operations (Details 2) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2017	Sep. 30, 2016	Sep. 30, 2017	Sep. 30, 2016
Revenues:
Rental income, disposed	$ 1,955	$ 31,966	$ 23,255	$ 99,057
Expenses:
Interest expense, disposed	0	4,939	1,714	16,697
Property operating expenses, disposed	2,111	1,476	7,209	4,411
Provision for depreciation, disposed	26	4,604	1,167	20,873
Expenses, disposed	2,137	11,019	10,090	41,981
Income (loss) from disposed properties	$ (182)	$ 20,947	$ 13,165	$ 57,076

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Real Estate Loans Receivable (Details) - USD ($) $ in Thousands		9 Months Ended
		Sep. 30, 2017	Sep. 30, 2016
Advances on real estate loans receivable:
Investments in new loans		$ 11,315	$ 8,223
Draws on existing loans		58,736	97,273
Net cash advances on real estate loans		70,051	105,496
Receipts on real estate loans receivable:
Loan payoffs		202,892	278,596
Principal payments on loans		1,121	6,553
Sub-total		204,013	285,149
Less : Non-cash activity	[1],[2]	(121,750)	(60,057)
Total receipts on real estate loans		82,263	225,092
Net advances (receipts) on real estate loans		(12,212)	(119,596)
Change in balance due to foreign currency translation		8,183	(9,819)
Net change Real Estate Loans Receivable		(125,779)	(189,472)
Triple Net [Member]
Advances on real estate loans receivable:
Investments in new loans		11,315	8,223
Draws on existing loans		58,736	94,622
Net cash advances on real estate loans		70,051	102,845
Receipts on real estate loans receivable:
Loan payoffs		142,392	251,293
Principal payments on loans		1,121	6,553
Sub-total		143,513	257,846
Less : Non-cash activity	[1],[2]	(61,250)	(45,044)
Total receipts on real estate loans		82,263	212,802
Net advances (receipts) on real estate loans		(12,212)	(109,957)
Change in balance due to foreign currency translation		8,183	(9,819)
Net change Real Estate Loans Receivable		(65,279)	(164,820)
Outpatient Medical [Member]
Advances on real estate loans receivable:
Investments in new loans		0	0
Draws on existing loans		0	2,651
Net cash advances on real estate loans		0	2,651
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	(9,639)
Change in balance due to foreign currency translation		0	0
Net change Real Estate Loans Receivable		$ (60,500)	$ (24,652)

[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.

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Real Estate Loans Receivable (Details 1) - USD ($) $ in Thousands	9 Months Ended
	Sep. 30, 2017	Sep. 30, 2016
Summary of loan impairments
Balance of impaired loans at end of period	$ 282,929	$ 0
Allowance for loan losses	5,406	0
Balance of impaired loans not reserved	277,523	0
Average impaired loans for the period	324,255	0
Interest recognized on impaired loans	$ 23,957	$ 0

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Real Estate Loans Receivable (Textuals) (Details) - USD ($) $ in Thousands	9 Months Ended	12 Months Ended
	Sep. 30, 2017	Dec. 31, 2016	Sep. 30, 2016
Financing Receivable, Modifications [Line Items]
Maturity Date	May 13, 2021
Allowance for loan losses	$ 5,406	$ 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		Sep. 30, 2017	Dec. 31, 2016
Schedule of Equity Method Investments [Line Items]
Investments in unconsolidated entities		$ 407,507	$ 457,138
Triple Net [Member]
Schedule of Equity Method Investments [Line Items]
Investments in unconsolidated entities		$ 22,543	$ 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		$ 332,390	$ 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		$ 52,574	$ 22,961

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

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Investments in Unconsolidated Entities (Details)	Sep. 30, 2017 USD ($)
Schedule of Equity Method Investments [Line Items]
Unamortized Investment In Joint Venture Primarily Attributable To Real Estate And Related Intangible Assets	$ 83,843,000
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	$ 83,843,000
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		9 Months Ended
		Sep. 30, 2017 USD ($) properties	Sep. 30, 2016 USD ($)	Sep. 30, 2017 USD ($) properties		Sep. 30, 2016 USD ($)	Dec. 31, 2016
Concentration by investment:
Number of properties in diversified portfolio | properties	[1]	1,278		1,278
Percent of NOI	[1],[2]			100.00%
Net Operating Income | $		$ 567,486	$ 605,453	$ 1,676,362	[1]	$ 1,820,690
Credit Concentration (Textual) [Abstract]
Percentage total investments with top five customers							45.00%
Sunrise Senior Living Inc. [Member]
Concentration by investment:
Number of properties in diversified portfolio | properties	[1],[3]	157		157
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]			$ 235,814
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]			$ 149,345
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]			$ 117,124
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]			$ 113,466
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]			$ 74,070
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]			$ 986,543

[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				9 Months Ended
	Sep. 30, 2017		Sep. 30, 2016		Sep. 30, 2017		Sep. 30, 2016		Dec. 31, 2016
Aggregate borrowings under the unsecured line of credit arrangements
Balance outstanding at quarter end	$ 420,000	[1]	$ 1,350,000	[1]	$ 420,000	[1]	$ 1,350,000	[1]	$ 645,000
Maximum amount outstanding at any month end	645,000		1,560,000		1,010,000		1,560,000
Average amount outstanding (total of daily principal balances divided by days in period)	$ 450,130		$ 1,050,217		$ 601,436		$ 782,427
Weighted average interest rate (actual interest expense divided by average borrowings outstanding)	2.19%		1.44%		1.95%		1.35%

[1] As of September 30, 2017, letters of credit in the aggregate amount of $25,576,000 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	9 Months Ended
	Sep. 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	2.13%
Debt Instrument Basis Spread On Variable Rate1	0.90%
Maturity Date	May 13, 2020
Letter of credit that reduces the borrowing capacity	$ 25,576

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Senior Unsecured Notes and Secured Debt (Details) £ in Thousands, CAD in Thousands, $ in Thousands		9 Months Ended
		Sep. 30, 2017 CAD	Sep. 30, 2017 GBP (£)	Sep. 30, 2017 USD ($)	Dec. 31, 2016 USD ($)	Oct. 01, 2015 USD ($)
Principal payments due on debt obligations
2017				$ 121,412
2018				876,728
2019				1,091,941
2020	[1]			881,608
2021	[2],[3]			1,371,577
Thereafter	[4],[5],[6],[7]			6,781,129
Totals				11,124,395
Senior Unsecured Notes and Secured Debt (Textual) [Abstract]
Senior unsecured notes				8,315,395	$ 8,161,619
Secured debt				2,713,513	$ 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]			600,000
2020	[1],[8],[9]			697,327
2021	[2],[3],[8],[9]			1,149,856
Thereafter	[4],[5],[6],[7],[8],[9]			5,507,210
Totals	[8],[9]			$ 8,404,393
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		1.90%	1.90%	1.90%
Secured Debt [Member]
Principal payments due on debt obligations
2017	[8],[10]			$ 121,412
2018	[8],[10]			426,728
2019	[8],[10]			491,941
2020	[1],[8],[10]			184,281
2021	[2],[3],[8],[10]			221,721
Thereafter	[4],[5],[6],[7],[8],[10]			1,273,919
Totals	[8],[10]			2,720,002
Senior Unsecured Notes and Secured Debt (Textual) [Abstract]
Carrying values of properties securing the debt				$ 5,766,501
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		1.45%	1.45%	1.45%
3.35% senior unsecured note due 2020
Senior Unsecured Notes and Secured Debt (Textual) [Abstract]
Senior unsecured notes issued amount		CAD 300,000		$ 239,827
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		199,856
Debt Instrument Basis Spread On Variable Rate1		2.30%
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		2.19%
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	$ 737,110
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	$ 670,100
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 $239,827,000 based on the Canadian/U.S. Dollar exchange rate on September 30, 2017).

[2] On May 13, 2016, we refinanced the funding on a $250,000,000 Canadian-denominated unsecured term credit facility (approximately $199,856,000 based on the Canadian/U.S. Dollar exchange rate on September 30, 2017). The loan matures on May 13, 2021 and bears interest at the Canadian Dealer Offered Rate plus 95 basis points (2.30% at September 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 (2.19% at September 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 $737,110,000 based on the Sterling/U.S. Dollar exchange rate in effect on September 30, 2017) of 4.8% senior unsecured notes due 2028.

[7] On November 25, 2014, we completed the sale of £500,000,000 (approximately $670,100,000 based on the Sterling/U.S. Dollar exchange rate in effect on September 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 1.9% to 6.5%.

[10] Annual interest rates range from 1.45% to 7.98%. Carrying value of the properties securing the debt totaled $5,766,501,000 at September 30, 2017.

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Senior Unsecured Notes and Secured Debt (Details 1) $ in Thousands	9 Months Ended		12 Months Ended
	Sep. 30, 2017 USD ($)	Sep. 30, 2016 USD ($)	Dec. 31, 2016 USD ($)	Dec. 31, 2015 USD ($)
Unsecured note issuances
Senior unsecured debt issued	$ 7,500	$ 693,560
Senior unsecured debt redeemed	5,000	400,000
Excluding Fair Value Adjustments [Member]
Unsecured note issuances
Senior unsecured debt balance	8,404,393	8,790,942	$ 8,260,038	$ 8,645,758
Senior unsecured debt issued	7,500	705,000
Senior unsecured debt extinguished	(5,000)	(400,000)
Senior unsecured debt foreign currency	$ 141,855	$ (159,816)
Senior unsecured debt balance average rate	0.04293	0.04264	0.04245	0.04237
Senior unsecured debt issued average rate	0.0194	0.04228
Senior unsecured debt extinguished average rate	0.0183	0.03625
Senior unsecured debt foreign currency average rate	0.04241	0.04443

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Senior Unsecured Notes and Secured Debt (Details 2) $ in Thousands	9 Months Ended		12 Months Ended
	Sep. 30, 2017 USD ($)	Sep. 30, 2016 USD ($)	Dec. 31, 2016 USD ($)	Dec. 31, 2015 USD ($)
Secured debt principal activity
Net proceeds from the issuance of secured debt	$ 190,459	$ 193,541
Secured debt extinguished	1,050,879	471,898
Excluding Fair Value Adjustments [Member]
Secured debt principal activity
Secured debt principal balance	2,720,002	3,300,642	$ 3,465,066	$ 3,478,207
Net proceeds from the issuance of secured debt	190,459	193,541
Secured debt assumed	23,094	47,156
Secured debt extinguished	(1,003,372)	(416,009)
Secured debt principal payments	(47,507)	53,636
Secured debt foreign currency	$ 92,262	$ (55,889)
Secured debt principal balance average rate	0.03735	0.04272	0.04094	0.0444
Secured debt principal issued average rate	0.0273	0.03053
Secured debt principal assumed average rate	0.0667	0.04132
Secured debt principal extinguished average rate	0.05321	0.04986
Secured debt principal payment average rate	0.04339	0.03631
Secured debt principal foreign currency average rate	0.03196	0.04478

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Derivative Instrument (Notional Table) (Details) - USD ($) $ in Thousands	9 Months Ended	12 Months Ended
	Sep. 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	575,000	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	$ 680,000	$ 37,000

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Derivative Instruments (Details 1) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2017	Sep. 30, 2016	Sep. 30, 2017	Sep. 30, 2016
Interest Rate Swap [Member]
Derivative [Line Items]
Gain (loss) on forward exchange contracts recognized in income.	$ (576)	$ 3,420	$ 3,613	$ 4,789
Foreign Exchange Contract [Member]
Derivative [Line Items]
Gain (loss) recognized in OCI	(98,003)	53,421	(239,884)	229,256
Gain on Release of cumulative translation adjustment related to net investment hedge of an equity investment	$ 0	$ (2,516)	$ 0	$ (2,516)

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Derivative Instruments (Textual) (Details) - USD ($) $ in Thousands	9 Months Ended
	Sep. 30, 2017	Sep. 30, 2016
Derivative Instruments [Abstract]
Cash Flow Hedge Gain Loss To Be Reclassified Within Twelve Months	$ 6,454
Derivative Cash Received On Hedge	$ 55,771	$ 56,842

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Commitments and Contingencies (Details Textual) $ in Thousands	9 Months Ended
	Sep. 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	$ 162,629
Line Of Credit Facility [Line Items]
Outstanding construction financings for leased properties	344,742	$ 506,091
Additional financing to complete construction	317,542
Total contingent purchase obligations	$ 16,053
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	$ 1,105,254
Operating Leases, Future Minimum Payments Due, Future Minimum Sublease Rentals	71,964
Capital Leases, Future Minimum Payments Due	$ 90,288
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	Sep. 30, 2017	Dec. 31, 2016	Sep. 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	14,370,065	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	371,430,074	363,576,924
Outstanding shares	370,341,635	362,602,173

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Stockholder's Equity (Details 1)	9 Months Ended
	Sep. 30, 2017 USD ($) $ / shares shares	Sep. 30, 2016 USD ($) $ / shares shares
Summary of common stock issuances
Equity shelf plan issuances, Shares Issued | shares	2,986,574	3,119,801
Equity shelf plan issuances, average price | $ / shares	72.3	75.27
Equity Shelf Plan Issuances Gross Proceeds	$ 215,917,000	$ 237,131,000
Equity Shelf Plan Issuances Net Proceeds	$ 214,406,000	$ 234,812,000
Redemption of equity membership units | shares	91,180
Preferred stock conversions | shares	4,296
Dividend reinvestment plan issuances, Shares Issued | shares	4,312,447	3,946,821
Dividend reinvestment plan issuances, Average Price	71.14	70.51
Dividend reinvestment plan issuances, Net Proceeds	$ 305,996,000	$ 278,297,000
Dividend reinvestment plan issuances, Gross Proceeds	$ 306,785,000	$ 278,578,000
Option exercises, Shares | shares	209,192	137,579
Option exercises, Average Price	50.62	50.57
Option exercises, Gross Proceeds	$ 10,590,000	$ 6,958,000
Option exercises, Net Proceeds	$ 10,590,000	$ 6,958,000
Stock incentive plans, net of forfeitures, Shares Issued | shares	135,773	442,899
Issuance of Common Stock, Shares | shares	7,739,462	7,647,100
Gross Proceeds From Issuance of Common Stock	$ 533,292,000	$ 522,667,000
Net proceeds from the issuance of common stock	$ 530,992,000	$ 520,067,000

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Stockholder's Equity (Details 2) - USD ($) $ in Thousands		Sep. 30, 2017	Dec. 31, 2016	Sep. 30, 2016	Dec. 31, 2015
Summary of accumulated other comprehensive income/(loss) [Line Items]
Unrecognized losses on cash flow hedges		$ 0	$ (2)	$ (45)	$ (1,416)
Unrecognized losses on equity investments		(15,165)	5,120	(5,252)	0
Unrecognized gains (losses) on foreign currency translation		(124,922)	(173,496)	(144,544)	(85,484)
Unrecognized actuarial losses		(1,153)	(1,153)	(1,343)	(1,343)
Totals		(141,240)	$ (169,531)	(151,184)	$ (88,243)
Other comprehensive income before reclassification adjustments
Summary of accumulated other comprehensive income/(loss) [Line Items]
Unrecognized losses on cash flow hedges		2		11
Unrecognized losses on equity investments		(20,285)		(5,252)
Unrecognized gains (losses) on foreign currency translation		48,574		(59,060)
Unrecognized actuarial losses		0		0
Totals		28,291		(64,301)
Reclassification amount to net income
Summary of accumulated other comprehensive income/(loss) [Line Items]
Unrecognized losses on cash flow hedges	[1]			1,360
Unrecognized losses on equity investments				0
Unrecognized gains (losses) on foreign currency translation				0
Unrecognized actuarial losses				0
Totals				1,360
Net current period other comprehensive income
Summary of accumulated other comprehensive income/(loss) [Line Items]
Unrecognized losses on cash flow hedges		2		1,371
Unrecognized losses on equity investments		(20,285)		(5,252)
Unrecognized gains (losses) on foreign currency translation		48,574		(59,060)
Unrecognized actuarial losses		0		0
Totals		$ 28,291		$ (62,941)

[1] Please see Note 11 for additional information.

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Stockholder's Equity (Details 3) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended		12 Months Ended
	Sep. 30, 2017	Sep. 30, 2016	Sep. 30, 2017	Sep. 30, 2016	Dec. 31, 2016	Dec. 31, 2015
Stockholders' Equity (Details) [Abstract]
Preferred Stock, Shares Outstanding	14,370,065	25,875,000	14,370,065	25,875,000	25,875,000	25,875,000
Preferred stock, shares redeemed			(11,500,000)	0
Preferred stock, shares converted			(4,935)	0
Preferred stock balance weighted average rate			6.50%	0.00%	6.50%	6.50%
Preferred stock balance redeemed weighted average rate			6.50%	0.00%
Preferred stock balance converted 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		9 Months Ended
	Sep. 30, 2017	Sep. 30, 2016	Sep. 30, 2017	Sep. 30, 2016
Summary of dividend payments
Dividends declared and paid per common share	$ 0.87	$ 0.86	$ 2.61	$ 2.58
Common stock cash dividends			$ 955,631	$ 921,381
Total dividends paid			$ 993,365	$ 970,436
Series I Preferred Stock [Member]
Summary of dividend payments
Dividends declared and paid per preferred share			$ 2.4375	$ 2.4375
Preferred stock cash dividends			$ 35,035	$ 35,039
Series J Preferred Stock [Member]
Summary of dividend payments
Dividends declared and paid per preferred share			$ 0.2347	$ 1.2189
Preferred stock cash dividends			$ 2,699	$ 14,016

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Stock Incentive Plans (Details Textual) - USD ($) shares in Thousands, $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2017	Sep. 30, 2016	Sep. 30, 2017	Sep. 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	$ 6,790	$ 5,401	$ 16,459	$ 20,618
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		9 Months Ended
	Sep. 30, 2017	Sep. 30, 2016	Sep. 30, 2017	Sep. 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	$ 74,043	$ 334,910	$ 575,118	$ 679,353
Denominator for basic earnings per share - weighted average shares	369,089	358,932	366,096	356,911
Effect of dilutive securities:
Employee stock options	40	128	53	119
Non-vested restricted shares	515	526	464	414
Redeemable shares	1,096	1,651	1,281	1,308
Dilutive potential common shares	1,651	2,305	1,798	1,841
Denominator for diluted earnings per share - adjusted weighted average shares	370,740	361,237	367,894	358,752
Basic earnings per share	$ 0.2	$ 0.93	$ 1.57	$ 1.9
Diluted earnings per share	$ 0.2	$ 0.93	$ 1.56	$ 1.89

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Disclosure about Fair Value of Financial Instruments (Details) - USD ($) $ in Thousands	Sep. 30, 2017		Dec. 31, 2016	Sep. 30, 2016		Dec. 31, 2015
Financial Assets:
Loans receivable, Carrying Amount	$ 496,850		$ 622,628
Loans receivable, Fair value	413,221		521,773
Available-for-sale equity investments, Carrying Amount	7,615		27,899
Available-for-sale equity investments, Fair Value	7,615	[1]	27,899
Cash and cash equivalents, Carrying Amount	236,247		419,378	$ 428,617		$ 360,908
Cash and cash equivalents, Fair Value	236,247		419,378
Foreign Currency Forward Contracts Carrying Value	13,682		135,561
Foreign Currency Forward Contracts Fair Value	13,682		135,561
Financial Liabilities:
Borrowings under primary unsecured credit facilities, Carrying Value	420,000	[2]	645,000	$ 1,350,000	[2]
Borrowings under primary unsecured credit facilities, Fair Value	420,000		645,000
Senior unsecured notes, Carrying Amount	8,315,395		8,161,619
Senior unsecured notes, Fair Value	9,186,768		8,879,176
Secured debt, Carrying Amount	2,713,513		3,477,699
Secured debt, Fair Value	2,750,467		3,558,378
Foreign Currency Forward Contracts Carrying Value	55,264		4,342
Foreign Currency Forward Contracts, Fair Value	55,264		4,342
Redeemable OP unitholder interests carrying value	104,363		110,502
Redeemable OP unitholder interests fair value	104,363		110,502
Mortgage Loans on Real Estate [Member]
Financial Assets:
Loans receivable, Carrying Amount	377,283		485,735
Loans receivable, Fair value	413,221		521,773
Other Real Estate Loans Receivable [Member]
Financial Assets:
Loans receivable, Carrying Amount	119,567		136,893
Loans receivable, Fair value	$ 124,408		$ 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 September 30, 2017, letters of credit in the aggregate amount of $25,576,000 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		Sep. 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		$ 7,615	[1]	$ 27,899
Foreign currency forward contracts	[2]	(41,582)
Redeemable OP unitholder interests		104,363
Totals		70,396
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]	7,615
Totals		7,615
Level 2 [Member]
The Market approach utilized to measure fair value of financial assets and liabilities on recurring basis
Foreign currency forward contracts	[2]	(41,582)
Redeemable OP unitholder interests		104,363
Totals		$ 62,781

[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			9 Months Ended
	Sep. 30, 2017 USD ($)		Sep. 30, 2016 USD ($)	Sep. 30, 2017 USD ($)		Sep. 30, 2016 USD ($)	Dec. 31, 2016 USD ($)
Summary of information for reportable segments
Rental income	$ 362,880		$ 421,152	$ 1,085,621		$ 1,259,442
Resident fees and services	702,380		630,017	2,049,757		1,847,386
Interest income	20,187		25,080	61,836		74,275
Other income	6,036		2,884	15,169		21,735
Total revenues	1,091,483		1,079,133	3,212,383		3,202,838
Property operating expenses	523,997		473,680	1,536,021		1,382,148
Net Operating Income from Continuing Operations	567,486		605,453	1,676,362	[1]	1,820,690
Interest expense	122,578		129,699	357,405		394,985
Loss (gain) on derivatives, net	324		(2,516)	2,284		(2,516)
Depreciation and amortization	230,138		218,061	683,262		673,326
General and administrative	29,913		36,828	93,643		122,434
Transaction costs	0		19,842	0		33,207
Loss (gain) on extinguishment of debt, net	0		0	36,870		9
Impairment of Asset	0		9,705	24,662		24,019
Other expenses	99,595		0	117,608		3,161
Income (loss) from continuing operations before income taxes and income from unconsolidated entities	84,938		193,834	360,628		572,065
Income tax expense	(669)		305	5,535		2,543
(Loss) income from unconsolidated entities	3,408		(1,749)	(23,676)		(7,528)
Income (loss) from continuing operations	87,677		192,390	342,487		567,080
Gain (loss) on real estate dispositions, net	1,622		162,351	287,869		163,881
Net income	89,299		$ 354,741	630,356		$ 730,961
Total assets	$ 28,180,379			$ 28,180,379			$ 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	$ 871,431		$ 874,050	$ 2,582,042		$ 2,581,533
Total assets	$ 22,535,209			$ 22,535,209			$ 23,572,459
Percent Of Assets	0.8			0.8			0.817
Percent Of Revenues	0.799		0.81	0.804		0.806
United Kingdom
Summary of information for reportable segments
Total revenues	$ 105,028		$ 95,068	$ 298,618		$ 295,203
Total assets	$ 3,202,180			$ 3,202,180			$ 2,782,489
Percent Of Assets	0.113			0.113			0.096
Percent Of Revenues	0.096		0.088	0.093		0.092
Canada
Summary of information for reportable segments
Total revenues	$ 115,024		$ 110,015	$ 331,723		$ 326,102
Total assets	$ 2,442,990			$ 2,442,990			$ 2,510,236
Percent Of Assets	0.087			0.087			0.087
Percent Of Revenues	0.105		0.102	0.103		0.102
Triple Net [Member]
Summary of information for reportable segments
Rental income	$ 221,555		$ 286,226	$ 666,735		$ 857,184
Resident fees and services	0		0	0		0
Interest income	20,187		23,017	61,767		67,842
Other income	3,174		1,621	7,496		4,317
Total revenues	244,916		310,864	735,998		929,343
Property operating expenses	0		0	0		0
Net Operating Income from Continuing Operations	244,916		310,864	735,998		929,343
Interest expense	3,622		4,714	11,647		16,832
Loss (gain) on derivatives, net	324		0	2,284		0
Depreciation and amortization	62,891		74,296	182,672		229,906
General and administrative	0		0	0		0
Transaction costs			1,613			5,760
Loss (gain) on extinguishment of debt, net			0	29,083		97
Impairment of Asset			5,070	4,846		19,384
Other expenses	89,236	[2]		96,425		0
Income (loss) from continuing operations before income taxes and income from unconsolidated entities	88,843		225,171	409,041		657,364
Income tax expense	(816)		(896)	(2,070)		(1,425)
(Loss) income from unconsolidated entities	5,478		1,998	14,983		8,097
Income (loss) from continuing operations	93,505		226,273	421,954		664,036
Gain (loss) on real estate dispositions, net	(185)		163,579	273,051		165,109
Net income	93,320		389,852	695,005		829,145
Total assets	9,463,910			9,463,910
Senior housing - operating [Member]
Summary of information for reportable segments
Rental income	0		0	0		0
Resident fees and services	702,380		630,017	2,049,757		1,847,386
Interest income	0		1,054	69		3,126
Other income	1,497		716	4,005		11,889
Total revenues	703,877		631,787	2,053,831		1,862,401
Property operating expenses	478,777		432,292	1,400,313		1,259,182
Net Operating Income from Continuing Operations	225,100		199,495	653,518		603,219
Interest expense	16,369		20,360	47,587		61,157
Loss (gain) on derivatives, net	0		0	0		0
Depreciation and amortization	119,089		97,210	356,023		301,354
General and administrative	0		0	0		0
Transaction costs			18,083			25,259
Loss (gain) on extinguishment of debt, net			0	3,414		(88)
Impairment of Asset			0	14,191		0
Other expenses	5,157			8,100		0
Income (loss) from continuing operations before income taxes and income from unconsolidated entities	84,485		63,842	224,203		215,537
Income tax expense	(1,519)		515	9,133		5,304
(Loss) income from unconsolidated entities	(2,886)		(3,891)	(40,527)		(15,713)
Income (loss) from continuing operations	80,080		60,466	192,809		205,128
Gain (loss) on real estate dispositions, net	(197)		0	12,814		0
Net income	79,883		60,466	205,623		205,128
Total assets	13,538,090			13,538,090
Outpatient Medical [Member]
Summary of information for reportable segments
Rental income	141,325		134,926	418,886		402,258
Resident fees and services	0		0	0		0
Interest income	0		1,009	0		3,307
Other income	667		358	2,497		4,824
Total revenues	141,992		136,293	421,383		410,389
Property operating expenses	45,220		41,388	135,708		122,966
Net Operating Income from Continuing Operations	96,772		94,905	285,675		287,423
Interest expense	2,929		3,986	7,342		15,132
Loss (gain) on derivatives, net	0		0	0		0
Depreciation and amortization	48,158		46,555	144,567		142,066
General and administrative	0		0	0		0
Transaction costs			146			2,188
Loss (gain) on extinguishment of debt, net			0	4,373		0
Impairment of Asset			4,635	5,625		4,635
Other expenses	530			2,201		0
Income (loss) from continuing operations before income taxes and income from unconsolidated entities	45,155		39,583	121,567		123,402
Income tax expense	(366)		417	(655)		(59)
(Loss) income from unconsolidated entities	816		144	1,868		88
Income (loss) from continuing operations	45,605		40,144	122,780		123,431
Gain (loss) on real estate dispositions, net	2,004		(1,228)	2,004		(1,228)
Net income	47,609		38,916	124,784		122,203
Total assets	4,992,534			4,992,534
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	698		189	1,171		705
Total revenues	698		189	1,171		705
Property operating expenses	0		0	0		0
Net Operating Income from Continuing Operations	698		189	1,171		705
Interest expense	99,658		100,639	290,829		301,864
Loss (gain) on derivatives, net	0		(2,516)	0		(2,516)
Depreciation and amortization	0		0	0		0
General and administrative	29,913		36,828	93,643		122,434
Transaction costs			0			0
Loss (gain) on extinguishment of debt, net			0	0		0
Impairment of Asset			0	0		0
Other expenses	4,672			10,882		3,161
Income (loss) from continuing operations before income taxes and income from unconsolidated entities	(133,545)		(134,762)	(394,183)		(424,238)
Income tax expense	2,032		269	(873)		(1,277)
(Loss) income from unconsolidated entities	0		0	0		0
Income (loss) from continuing operations	(131,513)		(134,493)	(395,056)		(425,515)
Gain (loss) on real estate dispositions, net	0		0	0		0
Net income	(131,513)		$ (134,493)	(395,056)		$ (425,515)
Total assets	$ 185,845			$ 185,845

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

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Income Taxes and Distributions (Details)	9 Months Ended
	Sep. 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%

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Variable Interest Entity Disclosure (Details) - Variable Interest Entity, Primary Beneficiary [Member] - USD ($) $ in Thousands		Sep. 30, 2017	Dec. 31, 2016
Variable Interest Entity [Line Items]
Total assets	[1]	$ 1,041,432	$ 1,012,199
Total equity		375,414	362,585
Total liabilities and equity		1,041,432	1,012,199
Net real property owned [Member]
Variable Interest Entity [Line Items]
Total assets		1,010,638	989,596
Cash and cash equivalents [Member]
Variable Interest Entity [Line Items]
Total assets		11,874	10,501
Receivables and other assets [Member]
Variable Interest Entity [Line Items]
Total assets		18,920	12,102
Secured Debt [Member]
Variable Interest Entity [Line Items]
Liabilities		472,445	450,255
Accrued expenses and other liabilities [Member]
Variable Interest Entity [Line Items]
Liabilities		16,982	13,803
Redeemable noncontrolling interests [Member]
Variable Interest Entity [Line Items]
Liabilities		$ 176,591	$ 185,556

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